G.R. No.

154342 July 14, 2004

MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC., petitioner,

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

FACTS
Respondent Gallo Winery is a foreign corporation not doing business in the Philippines but
organized and existing under the laws of the State of California. Gallo Winery produces different kinds
of wines and brandy products and sells them in many countries under different registered trademarks,
including the GALLO and ERNEST & JULIO GALLO wine trademarks.

Respondent domestic corporation, Andersons, has been Gallo Winery’s exclusive wine
importer and distributor in the Philippines since 1991, selling these products in its own name and for
its own account.

On the other hand, petitioners Mighty Corporation and La Campana and their sister company,
Tobacco Industries of the Philippines (Tobacco Industries), are engaged in the cultivation,
manufacture, distribution and sale of tobacco products for which they have been usi ng the GALLO
cigarette trademark since 1973.

On March 12, 1993, respondents sued petitioners in the Makati RTC for trademark and trade
name infringement and unfair competition, with a prayer for damages and preliminary injunction.

Respondents charged petitioners with violating Article 6 of the Paris Convention for the
Protection of Industrial Property (Paris Convention) and RA 166 (Trademark Law), specifically,
Sections 22 and 23 (for trademark infringement), 29 and 30 (for unfair competition and false
designation of origin) and 37 (for trade name).

ISSUE
1. Whether GALLO cigarettes and GALLO wines were identical, similar, or related goods because
they were purported forms of vice?

RULING
No.

Wines and cigarettes are not identical, similar, competing, or related goods.

There are several factors to consider in determining whether goods or services are related,
the said factors that are recognized in our jurisprudence are:

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; the conditions under which the article is usually purchased, and
 9. the channels of trade through which the goods flow, how they a re distributed, marketed,
displayed and sold.

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 desi rous 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)

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 we ighing
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.The test of fraudulent simulation is to 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 was associated. The simulation, to be objectionable, must be 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.

Wherefore, the petitioners are not liable for trademark infringement, unfair competition or
damages.
 G.R. No. L-8937 March 21, 1914

ALHAMBRA CIGAR AND CIGARETTE MANUFACTURING CO., plaintiff-appellee,

vs.
PEDRO N. MOJICA, defendant-appellant.

FACTS
This was an appeal from the judgment of the Court of First Instance of city of Manila declaring
that the cigar bands or rings attached to the complaint and those in evidence used by the defendant
upon his cigars bear such a close resemblance to those used on the cigars of the plaintiff that, taken
together with other circumstances, their use constituted unfair competition, and forever prohibiting the
defendant from using said bands or rings.

The plaintiff has been manufacturing cigars of a certain kind and form for a long period of years
and during that time has used upon said cigars a paper ring or band of a chocolate -brown color, with
letters and lines upon it in gold. This ring or band, having been used by the plaintiff for many years,
had become well- known to the trade and was of great value in the sale of its cigars.

The defendant commenced to use a band or ring very similar to that of the plaintiff, and it is
upon this use that the action was founded. The bands or rings of the defendant, so far as they appear
in the evidence, are of two different colors but of the same shape and with substantially the same
markings.

ISSUE
1. Whether or not the defendant is guilty of unfair competition in using said bands ?

RULING
Yes.

In determining whether or not the defendant is guilty of unfair competition in using the bands,
we have the right and it is our duty to take into consideration all of the other features of the articles
offered for sale to ascertain whether, when taken together with the limited band, there is li kelihood that
the public may be deceived as to the article it is purchasing . It is clear that, the cigars having
substantially the same appearance and color, the same size, the same shape, and the same style and
color of band, the deception is not only possible but is very probable. the cigar put outby the defendant,
taken as a whole, disarms and deceives the purchaser who is desirous of purchasing cigars of plaintiff.

Unfair competition consists in passing off or attempting to pass off upon the public the goods
or business of one person as and for the goods or business of another. It consists essentially in the
conduct of a trade or business in such a manner that there is either an e -press or implied
representation to that effect. It may be stated broadly that any conduct the end and probable effect of
which is to deceive the public or pass off the goods or business of one person as and for that of
another, constitutes actionable unfair competition unfair competition, as thus denied, isa legal wrong
for which the courts afford a remedy. It is a tort and a fraud.

Under the evidence in this case there is no doubt whatever in our minds that the use of the
chocolate-colored bands by the defendant, taken together with the other circumstances under which
the article in question is sold, constitutes unfair competition We do not believe, however, that the
complaint against the green band is well founded. That is clearly and easily distinguishable from the
band used by the plaintiff" and the ordinary purchaser of plaintiffs goods would be able, at a glance,
to distinguish defendants cigars, when surrounded by the green band, from t hose of plaintiff.
 G.R. No. 170891 November 24, 2009

MANUEL C. ESPIRITU, JR., AUDIE LLONA, FREIDA F. ESPIRITU, CARLO F. ESPIRITU,

RAFAEL F. ESPIRITU, ROLANDO M. MIRABUNA, HERMILYN A. MIRABUNA, KIM ROLAND A.
MIRABUNA, KAYE ANN A. MIRABUNA, KEN RYAN A. MIRABUNA, JUANITO P. DE CASTRO,
GERONIMA A. ALMONITE and MANUEL C. DEE, who are the officers and directors of BICOL
GAS REFILLING PLANT CORPORATION, Petitioners,
vs.
PETRON CORPORATION and CARMEN J. DOLOIRAS, doing business under the name
"KRISTINA PATRICIA ENTERPRISES," Respondents.

FACTS
Respondent Petron sold and distributed liquefied petroleum gas (LPG) in cylinder
tanks that carried its trademark “Gasul.” Respondent Carmen Doloiras owned and operated Kristina
Patricia Enterprises (KPE), the exclusive distributor of Gasul LPGs in the whole of Sorsogon. Jose
Nelson Doloiras served as KPE’s manager. Bicol Gas was also in the business of selling and
distributing LPGs in Sorsogon, but theirs carried the trademark “Bicol Savers Gas.” Petitioner Llona
managed Bicol Gas. In the course of trade and competition, any given distributor of LPGs at times
acquired possession of LPG cylinder tanks belonging to other distributors operating inthe same area.
They called these “captured cylinders.”

According to Jose, KPE’s manager, Bicol Gas agreed with KPE for the swapping of “captured
cylinders” since one distributor could not refill captured cylinders with its own brand of LPG. Later on,
KPE’s Jose saw a particular Bicol Gas truck that carried mostly Bicol Savers LPG tanks, but it had on
it one unsealed Gasul tank and one Shellane tank. Jose followed the truck and when it stopped at a
store, he asked the driver, Jun Leorena, and the Bicol Gas sales representative, Jerome Misal, about
the Gasul tank in their truck. They said it was empty but, when Jose turned open its valve, he noted
that it was not. Misal and Leorena then admitted that the Gasul and Shellane tanks on their truck
belonged to a customer who had them filled up by Bicol Gas.

Because of this incident, KPE filed a complaint for violations of the Republic Act (R.A.) 623
(illegally filling unregistered cylinder tanks), as amended, and Sections 155 (infringement of
trademarks) and 169.1 (unfair competition) of the Intellectual Property Code (R.A. 8293). The
complaint charged the following: Misal, Leorena, Mirabena, Llona, and several others, described as
the directors, officers, and stockholders of Bicol Gas. Subsequently, the provincial prosecutor ruled
that there was probable cause only for violation of R.A. 623 (unlawfully filling up registered tanks) and
that only the four Bicol Gas employees, Mirabena, Misal, Leorena, and Llona, could be charged.

The charge against the other petitioners who were the stockholders and directors of the
company was dismissed. The Court of Appeals, however, ruled that they should be charged along
with the Bicol Gas employees who were pointed to as directly involved in overt acts constituting the
offense.

ISSUE

RULING
 G.R. No. 211850, September 08, 2020

ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS ARAIN, M.D., AND STYLE OF
ZUNECA PHARMACEUTICAL, Petitioners,
vs.
NATRAPHARM, INC., Respondents.

FACTS
Natrapharm, Inc. (Natrapharm) filed with the Regional Tr ial Court (RTC) a Complaint against
Zuneca Pharmaceutical, Akram Arain and/or Venus Arain, M.D., and Style of Zuneca Pharmaceutical
(Zuneca) for Injunction, Trademark Infringement, Damages, and Destruction, alleging that Zuneca's
"ZYNAPS" is confusingly similar to its registered trademark "ZYNAPSE" and the resulting likelihood of
confusion is dangerous because the marks cover medical drugs intended for different types of
illnesses.

In its Answer, Zuneca claims that as the prior user, it had already owned the “ZYNAPS” mark
prior to Natrapharm’s registration of its confusingly similar mark, thus, its rights prevail over the rights
of Natrapharm.

The RTC ruled that the first filer in good faith defeats a first user in good faith who did not file
any application for registration. Hence, Natrapharm, as the first registrant, had trademark rights over
"ZYNAPSE" and it may prevent others, including Zuneca, from registering an identical or confusingly
similar mark. Moreover, the RTC ruled that there was insufficient evidence that Natrapharm had
registered the mark "ZYNAPSE" in bad faith. Further, following the use of the dominancy test, the RTC
likewise observed that "ZYNAPS" was confusingly similar to "ZYNAPSE." To protect the public from
the disastrous effects of erroneous prescription and mistaken dispensation, the confusion between the
two drugs must be eliminated.

On appeal, the Court of Appeals (CA) affirmed the Decision of the RTC. Hence, the instant
petition for review on Certiorari.

ISSUE
1. Whether or not Zuneca can be held liable for trademark infringement?

RULING
No.

While Natrapharm is the owner of the “ZYNAPSE” mark, this does not, however, automatically
mean that its complaint against Zuneca should be granted. This is because Sec. 159.1 of the IP Code
clearly contemplates that a prior user in good faith may continue to use its mark even after the
registration of the mark by the first-to-file registrant in good faith, subject to the condition that any
transfer or assignment of the mark by the prior user in good faith should be made together with the
enterprise or business or with that part of his enterprise or business in which the mark is used. The
mark cannot be transferred independently of the enterprise and business using it.

In any event, the application of Section 159.1 of the IP Code necessarily results in at least two
entities — the unregistered prior user in good faith or their assignee or transferee, on one hand; and
the first-to-file registrant in good faith on the other — concurrently using identical or confusingly similar
marks in the market, even if there is likelihood of confusion. While this situation may not be ideal, the
Court is constrained to apply Section 159.1 of the IP Code as written.
 To further reduce therefore, if not totally eliminate, the likelihood of switching in this case, the
Court hereby orders the parties to prominently state on the packaging of their respective products, in
plain language understandable by people with no medical background or training, the medical
conditions that their respective drugs are supposed to treat or alleviate and a warning indicating what
"ZYNAPS" is not supposed to treat and what "ZYNAPSE" is not supposed to treat, given the likelihood
of confusion between the two.
 G.R. No. 78413 November 8, 1989

CAGAYAN VALLEY ENTERPRISES, INC., Represented by its President, Rogelio Q.

Lim, petitioner,
vs.
THE HON. COURT OF APPEALS and LA TONDEÑA, INC., respondents.

FACTS
In 1953, La Tondeña, Inc.’s registered with the Philippine Patent Office pursuant to Republic
Act No. 623 the 350 Civil Case white flint bottles has been using for its gin popularly known as "Ginebra
San Miguel". LTI filed Civil Case No. 2668 for injunction and damages against Cagayan
Valley Enterprises Inc. therein by filling the same with liquor product bearing th e label "Sonny Boy" for
commercial sale and distribution, without LTI's written consent and in violation of Section 2
of Republic Act No. 623 governs the registration of marked bottles and containers and merely requires
that the bottles and/or containers be marked or stamped by the names of the manufacturer or the
names of their principals or products or other marks of ownership. The owner upon registration of its
marked bottles, is vested by law with an exclusive right to use the same to the exclusion of others,
except as a container for native products. LTI contended its entitlement to protection under Republic
Act No. 623, as amended by Republic Act No. 5700.

ISSUE

RULING
 G.R. No. 148222 August 15, 2003

PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,

vs.
SHOEMART, INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, Respondents.

FACTS
Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as
light boxes. These units utilize specially printed posters sandwiched between plastic sheets and
illuminated with backlights. It was able to secure registration over these illuminated display units. The
advertising light boxes were marketed under the trademark “Poster Ads”.

In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of
the light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI
offered as alternative SM Makati and Cubao. During the signing of the Contract, SMI only
returned the Contract with SM Makati. Manager of petitioner reminded SMI that their agreement
includes SM Cubao. However, SMI did not bother to reply. Instead, respondent informed
petitioner that they are rescinding the contract for SM Makati due to non-performance.

Two years later, SMI engaged the services of EYD Rainbow Advertising to make the
light boxes. These were delivered in a staggered basis and installed at SM Megamall and SM City.
In 1989, petitioner received reports that exact copy of its light boxes was installed by SMI. It further
discovered that North Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to sell
advertising space in lighted display units located in SMI’s different branches. Petitioner sent letters to
respondents asking them to cease using the light boxes and the discontinued use of the trademark
“Poster Ads”.

Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for infringem ent
of trademark and copy right, unfair competition and damages. SMI maintained that it
independently developed its poster panels using commonly known techniques and available
technology without notice of or reference to P&D’s copyright. In addition, it said that registration of
“Poster Ads” obtained by petitioner was only for stationeries such as letterheads, envelopes and the
like. “Poster Ads” is a generic term which cannot be appropriated as trademark, and, as such,
registration of such mark is invalid. It also stressed that P&D is not entitled to the reliefs sought
because the advertising display units contained no copyright notice as provided for by law.

RTC found SMI and NEMI jointly and severally liable for infringement of copyright and
trademark. CA reversed saying that it agreed with SMI that what was copyrighted was the technical
drawings only and not the light boxes. Light boxes cannot be considered as either prints, pictorial
illustrations, advertising copies, labels, tags or box wraps, to be properly classified as
copyrightable class “O” work. In addition, CA stressed that the protective mantle of the Trademark Law
extends only to the goods used by the first user as specified in its certificate of registration. The
registration of the trademark “Poster Ads” covers only stationeries such as letterheads, envelopes and
calling cards and newsletter.

ISSUES:
1. Whether or not the light box depicted in such engineering drawings ipso facto also protected by
such copyright?
2. Whether or not there was a patent infringement?
3. Whether or not the owner of a registered trademark legally prevent others from using such
trademark if it is a mere abbreviation of a term descriptive of his goods, services or business?

RULING

1st Issue: No

Copyright is purely statutory. As such, the rights are limited to what the statute confers. It
may be obtained and enjoyed only with respect to the subjects and by the persons, and on the terms
and conditions specified in the statute. Accordingly, it can cover only the works falling within
the statutory enumeration or description. Petitioner secured copyright under classification class
“O” work. Thus, copyright protection extended only to the technical drawings and not to the light
box itself because the latter was not at all in the category of “prints, pictorial illustrations,
advertising copies, labels, tags and box wraps.

What the law does not include, it excludes, and for the good reason: the light box was not a
literary or artistic piece which could be copyrighted under the copyright law. And no less clearly,
neither could the lack of statutory authority to make the light box copyrightable be remedied by the
simplistic act of entitling the copyright certificate issued by the National Library as “Advertising
Display Units”.

It must be noted that copyright is confined to literary and artistic works which are
original intellectual creations in the literary and artistic domain protected from the moment of their
creation.

2nd Issue: Yes.

Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights
which could have protected its invention, if in fact it really was. And because it had no patent,
petitioner could not legally prevent anyone from manufacturing or commercially using the contraption.
To be able to effectively and legally preclude others from copying and profiting from the invention,
a patent is a primordial requirement. No patent, no prote ction. The ultimate goal of a patent
system is to bring new designs and technologies into the public through disclosure. Ideas, once,
disclosed to the public without protection of a valid patent, are subject to appropriation without
significant restraint.

The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward invention;
second, it promotes disclosures of inventions to stimulate further innovation and to permit the public
to practice the invention once the patent expires; third, the stringent requirements for patent
protection seek to ensure that ideas in the public domain remain there for the free use of the public.
It is only after an exhaustive examination by the patent office that patent is issued. Therefore, not
having gone through the arduous examination for patents, petitioner cannot exclude other s from the
manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate
over the technical drawings.

3rd Issue: Yes.

Court agrees with CA that the certificate of registration issued by the Director of Patents can
confer the exclusive right to use its own symbol only to those goods specified in the certificate,
subject to any conditions and
 limitations specified in the certificate. One who has adopted and used a trademark on his
goods does not prevent the adoption and use of the same trademark by others for products which
are of a different description.

Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure
of petitioner to secure a trademark registration for specific use on the light boxes meant that
there could not have been any trademark infringement since registration was an essential element
thereof.

There is no evidence that petitioner’s use of “poster Ads” was distinctive or well-known. As
noted by CA, petitioner’s expert witness himself had testified that “Poster Ads” was not too generic a
name. SO it was difficult to identify it with any company. This fact also prevented the application
of the doctrine of secondary meaning. “Poster Ads” was generic and incapable of being used as a
trademark because it was used in the field of poster advertising the very business engaged in by
petitioner. Secondary meaning means that a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market might nevertheless have been used for so long
and so exclusively by one producer with reference to his article that , in the trade and to that branch
of the purchasing public, the word or phrase has come to mean that the article was his property.
 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.

FACTS
Petitioner McDonald's Corporation ("McDonald's") is a US corporation that operates a global
chain of fast-food restaurants, with Petitioner McGeorge Food Industries ("McGeorge"), as the
Philippine franchisee.

McDonald's owns the "Big Mac" mark for its "double-decker hamburger sandwich." with the
US Trademark Registry on 16 October 1979.

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 IPO). On 18 July 1985, the PBPTT allowed registration of the "Big Mac."

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast -food
outlets and snack vans in Metro Manila and nearby provinces. Respondent corporation's menu
includes hamburger sandwiches and other food items.

On 21 October 1988, respondent corporation applied with the PBPTT for the registration of
the "Big Mak" mark for its hamburger sandwiches, which was opposed by McDonald's. McDonald's
also informed LC Big Mak chairman 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, petitioners sued L.C. Big Mak Burger, Inc. and its directors before
Makati RTC Branch 137 ("RTC"), for trademark infringement and unfair competition.

RTC rendered a Decision finding respondent corporation liable for trademark infringement and
unfair competition. CA reversed RTC's decision on appeal.

ISSUE
1. Whether or not respondent corporation is liable for trademark infringement and unfair
competition?
2. Whether or not respondent committed unfair competition?

RULING

1st Issue: Yes.

Section 22 of Republic Act No. 166, as amended, 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 t rade-
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.

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." Of these, it is the element of
likelihood of confusion that is the gravamen of trademark infringement.

1st element:

A mark is valid if it is distinctive and not merely generic and descriptive.

The "Big Mac" mark, which should be treated in its entirety and not dissected word for word,
is neither generic nor descriptive. Generic marks are commonly used as the name or description of a
kind of goods, such as "Lite" for beer. 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,
such as "Arthriticare" for arthritis medication. On the contrary, "Big Mac" falls under the class of fancif ul
or arbitrary marks as it bears no logical relation to the actual characteristics of the product it represents.
As such, it is highly distinctive and thus valid.

2nd element:

Petitioners have duly established McDonald's exclusive ownership of the "Big Mac" mark. Prior
valid registrants of the said mark had already assigned his rights to McDonald's.

3rd element:

Section 22 covers two types of confusion arising from the use of similar or colorable imitation
marks, namely, confusion of goods (confusion in which the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was purchasing the other) and confusion of
business (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 is confusion of goods in this case since respondents used the "Big Mak" mark on the
same goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used.

There is also confusion of business due to Respondents' use of the "Big Mak" mark in the sale
of hamburgers, the same business that petitioners are engaged in, also results in confusion of
business. 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 registered trademark owner enjoys protection in product and
market areas that are the normal potential expansion of his business.

Furthermore, in determining likelihood of confusion, the SC has relied on the dominancy test
(similarity of the prevalent features of the competing trademarks that might cause confusion) over the
holistic test (consideration of the entirety of the marks as applied to the products, including the labels
and packaging).
 Applying the dominancy test, Respondents' use of the "Big Mak" mark results in likelihood of
confusion. 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.

Lastly, since Section 22 only requires the less stringent standard of "likelihood of confusion,"
Petitioners' failure to present proof of actual confusion does not negate their claim of trademark
infringement.

2ndIssue: Yes

Section 29 ("Section 29") 73 of RA 166 defines unfair competition, thus:

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.

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 c ompetitor.

In the case at bar, Respondents have applied on their plastic wrappers and bags almost the
same words that petitioners use on their styrofoam box. Further, Respondents' goods are hamburgers
which are also the goods of petitioners. Moreover, there is actually no notice to the public that the "Big
Mak" hamburgers are products of "L.C. Big Mak Burger, Inc." This clearly shows respondents' intent
to deceive the public.
 G.R. No. 175769-70 January 19, 2009

ABS-CBN BROADCASTING CORPORATION, Petitioners,

vs.
PHILIPPINE MULTI-MEDIA SYSTEM, INC., CESAR G. REYES, FRANCIS CHUA (ANG BIAO),
MANUEL F. ABELLADA, RAUL B. DE MESA, AND ALOYSIUS M. COLAYCO, Respondents.

FACTS
ABS-CBN is engaged in television and radio broadcasting through wireless and satellite
means while Philippine Multi-Media Systems Inc. (“PMSI” for brevity), the operator of Dream
Broadcasting System provides direct-to-home (DTH) television via satellite to its subscribers all over
the Philippines.

PMSI was granted legislative franchise under RA 8630 to install, operate and maintain a
nationwide DTH satellite service and is obligated under by NTC Memorandum Circular No. 4-08-88,
Section 6.2 of which requires all cable television system operators operating in a community within
Grade “A” or “B” contours to carry the television signals of the authorized television broadcast stations
(“must-carry rule”). ABS-CBN filed a complaint with Intellectual Property Office (IPO) for violation of
laws involving property rights. It alleged that PMSI’s unauthorized rebroadcasting of Channels 2 and
23 infringed on its broadcasting rights and copyright and that the NTC circular only covers cable
television system operators and not DTH satellite television operators. Moreover, NTC Circular 4-08-
88 violates Sec. 9 of Art. III of the Constitution because it allows the taking of property for public use
without payment of just compensation.

PMSI argued that its rebroadcasting of Channels 2 and 23 is sanctioned by Memorandum

Circular No. 04-08-88; that the must-carry rule under the Memorandum Circular is a valid exercise of
police power. IPO and Court of Appeals ruled in favor of PMSI.

ISSUE
1. Whether or not PMSI infringed on ABS-CBN’s broadcasting rights and copyright?
2. Whether or not PMSI is covered by the NTC Circular (“must-carry rule”)?
3. Whether NTC CirNcular 4-08-88 violates Sec. 9 of Art. III of the Constitution because it allows the
taking of property for public use without payment of just compensation or it is a valid exercise of
police power?

RULING

1st Issue: No

PMSI does not infringe on ABS-CBN’s broadcasting rights under the IP Code as PMSI is not
engaged in rebroadcasting of Channels 2 and 23. Rebroadcasting, which is prohibited by the IP Code,
is “the simultaneous broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization.” ABS-CBN creates and transmits its own signals; PMSI merely carries such
signals which the viewers receive in its unaltered form. PMSI does not produce, select, or determine
the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off as the origin or
author of such programs. Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the
same in accordance with NTC Memorandum Circular 04-08-88.

2nd Issue: Yes

 “DTH satellite tv operators” is covered under the NTC Circular which “requires all cable
television system operators… to carry the television signals of the authorized television broadcast
stations”. The Director-General of the IPO and the Court of Appeals correctly found that PMSI’s
services are similar to a cable television system because the services it renders fall under cable
“retransmission”. Thus, PMSI, being a DTH Satellite TV operator is covered by the NTC Circular.

3rd Issue: No

The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular
No. 04-08-88 is under the direction and control of the government though the NTC which is vested
with exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast
services/facilities in the Philippines. The imposition of the must-carry rule is within the NTC’s power to
promulgate rules and regulations, as public safety and interest may require, to encourage a larger and
more effective use of communications, radio and television broadcasting facilities, and to maintain
effective competition among private entities.
 G.R. No. 158589 June 27, 2006

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE TABAC
REUNIES, S.A., (now known as PHILIP MORRIS PRODUCTS S.A.), Petitioners,
vs.
FORTUNE TOBACCO CORPORATION, Respondent.

FACTS
Petitioner Philip Morris, Inc. a corporation organized under the laws of thestate of Virginia,
USA, is the registered owner of the trademark MARK VII for cigarettes. Benson and Hedges (Canada),
Inc., a subsidiary of Philip Morris, Inc., isthe registered owner of the trademark MARK TEN for
cigarettes. Another subsidiary of Philip Morris, Inc. the Swiss Company Fabriques de Tabac Reunies,
S.A., is the assignee of the trademark LARK. All are evidenced by Trademark Certificate of
Registration. On the other hand, Fortune Tobacco Corporation, a company organized in the
Philippines, manufactures and sells cigarettes using the trademark MARK.

Philip Morris, Inc. filed a complaint for trademark infringement and damages against Fortune
Tobacco Corporation. The complaint was dismissed by the RTC Pasig City in its decision dated
January 21, 2003.

Maintaining to have the standing to sue in the local forum and that respondent has committed
trademark infringement, petitioners went on appeal to the CA but CA affirmed the trial court’s decision.
The CA found that MARK VII, MARK TEN and LARK do not qualify as well-known marks entitled to
protection even without the benefit of actual use in the local market and that the similarities in the
trademarks in question are insufficient as to cause deception or confusion tantamount to infringement.

With the motion for reconsideration denied in the CA, the petitioners filed a petition for review
with the Supreme Court.

ISSUE
1. Whether or not petitioners, as Philippine registrants of trademarks, are entitled to
enforce trademark rights in this country?
2. Whether or not respondent has committed trademark infringeme nt against petitioners by its use
of the mark “MARK” for its cigarettes, hence liable for damages?

RULING

1st Issue: Yes

However, it does not automatically entitle petitioners to the protection of their trademarks in this country
in the absence of actual use of the marks in local commerce and trade.

Before discussing petitioners’ claimed entitlement to enforce trademark rights in the

Philippines, it must be emphasized that their standing to sue in Philippine courts had been recognized,
and rightly so, by the CA. It ought to be pointed out, however, that the appellate court qualified its
holding with a statement, following G.R. No. 91332, entitled Philip Morris, Inc., et al. v. The Court of
Appeals and Fortune Tobacco Corporation,17 that such right to sue does not necessarily mean
protection of their registered marks in the absence of actual use in the Philippines.

In a subsequent case, however, the Court held that where the complainant is a national of a
Paris Convention- adhering country, its allegation that it is suing under said Section 21-A would suffice,
because the reciprocal agreement between the two countries is embodied and supplied by the Paris
Convention which, being considered part of Philippine municipal laws, can be taken judicial notice of
in infringement suits. As well, the fact that their respective home countries, namely, the United States,
Switzerland and Canada, are, together with the Philippines, members of the Paris Union does
not automatically entitle petitioners to the protection of their trademarks in this country absent actual
use of the marks in local commerce and trade.

True, the Philippines’ adherence to the Paris Convention effectively obligates the country to
honorand enforce its provisions as regards the protection of industrial property of foreign nationals in
this country. However, any protection accorded has to be made subject to the limitations
of Philippine laws.

Hence, despite Article 2 of the Paris Convention which substantially provides that (1)
nationals of member-countries shall have in this country rights specially provided by the
Convention as are consistent with Philippine laws, and enjoy the privileges that Philippine laws now
grant or may hereafter grant to its nationals, and (2) while no domicile requirement in the country
where protection is claimed shall be required of persons entitled to the benefits of the Union
for the enjoyment of any industrial propertyrights,27 foreign nationals must still observe and
comply with the conditions imposed by Philippine law on its nationals. Considering that R.A. No. 166,
as amended, specifically Sections 228 and 2-A29 thereof, mandates actual use of the marks and/or
emblems in local commerce and trade before they may be registered and ownership thereof acquired,
the petitioners cannot, therefore, dispense with the element of actual use. Their being nationals
of member-countries of the Paris Union does not alter the legal situation.

2nd Issue: No

For lack of convincing proof on the part of the petitioners of actual use of their registered
trademarks prior to respondent’s use of its mark and for petitioners’ failure to demonstrate confusing
similarity between said trademarks, the dismissal of their basic complaint for infringement and the
concomitant plea for damages must be affirmed.

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 in by others.

Pressing on with their contention respecting the commission of trademark infringement,

petitioners finally point to Section 22 of R.A. No. 166, as amended. As argued, actual use of
trademarks in local commerce is, under said section, not a requisite before an aggrieved trademark
owner can restrain the use of his trademark upon goods manufactured or dealt in by another, it being
sufficient that he had registered the trademark or trade-name with the IP Office. In fine,
petitioners submit that respondent is liable for infringement, having manufactured and sold cigarettes
with the trademark “MARK" which, as it were, are identical and/or confusingly similar with
their duly registered trademarks "MARK VII," "MARK TEN" and "LARK"

The Court is not persuaded.

In Mighty Corporation v. E & J Gallo Winery,53 the Court held that the
following constitute theelements of trademark infringement in accordance not only with Section 22
of R.A. No. 166, asamended, but also Sections 2, 2-A, 9-A54 and 20 thereof:

(a) a trademark actually used in commerce in the Philippines and registered in the principal
register of the Philippine Patent Office,
 (b) (b) is used by another person in connection with the sale, offering for sale, or advertising
ofany 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) the trademark is used for identical or similar goods, and
(d) such act is done without the consent of the trademark registrant or assignee

As already found herein, while petitioners have registered the trademarks "MARK VII," "MARK
TEN“ and "LARK” for cigarettes in the Philippines, prior actual commercial use thereof had not
been proven. In fact, petitioners’ judicial admission of not doing business in this country effectively
belies any pretension to the contrary.

Likewise, we note that petitioners even failed to support their claim that their respective marks
are well-known and/or have acquired goodwill in the Philippines so as to be entitled to protection even
without actual use in this country in accordance with Article 6bis55 of the Paris Convention.

For lack of convincing proof on the part of the petitioners of actual use of their registered
trademarks prior to respondent’s use of its mark and for petitioners’ failure to demonstrate confusing
similarity between said trademarks, the dismissal of their basic complaint for infringement and the
concomitant plea for damages must be affirmed. The law, the surrounding circumstances and the
equities of the situation call for this disposition.
 G.R. No. 101897 March 5, 1993

LYCEUM OF THE PHILIPPINES, INC., Petitioners,

vs.
COURT OF APPEALS, LYCEUM OF APARRI, LYCEUM OF CABAGAN, LYCEUM OF
CAMALANIUGAN, INC., LYCEUM OF LALLO, INC., LYCEUM OF TUAO, INC., BUHI LYCEUM,
CENTRAL LYCEUM OF CATANDUANES, LYCEUM OF SOUTHERN PHILIPPINES, LYCEUM OF
EASTERN MINDANAO, INC. and WESTERN PANGASINAN LYCEUM, INC.,, Respondent.

FACTS
Petitioner Lyceum of the Philippines after a favorable case enjoining the Lyceum of Baguio
from using the word “Lyceum”, Armed with the Resolution of this Court in G.R. No. L -46595, petitioner
then wrote all the educational institutions it could find using the word “Lyceum” as part of their corporate
name (Respondents), and advised them to discontinue such use of “Lyceum.” When, with the passage
of time, it became clear that this recourse had failed, petitioner instituted before the SEC to enforce
what petitioner claims as its proprietary right to the word “Lyceum.”

The SEC hearing officer rendered a decision sustaining petitioner’s claim to an exclusive right
to use the word “Lyceum.” On appeal, however, by private respondents to the SEC En Banc, the
decision of the hearing officer was reversed and set aside. The SEC En Banc did not consider the
word “Lyceum” to have become so identified with petitioner as to render use thereof by other
institutions as productive of confusion about the identity of the schools concerned in the mind of the
general public. Unlike its hearing officer, the SEC En Banc held that the attaching of geographical
names to the word “Lyceum” served sufficiently to distinguish the schools from one another, especially
in view of the fact that the campuses of petitioner and those of the private respondents were physically
quite remote from each other.

Petitioner then went on appeal to the Court of Appeals. In its Decision dated 28 June 1991,
however, the Court of Appeals affirmed the questioned Orders of the SEC En Banc. Petitioner filed a
motion for reconsideration, without success. Hence, this case.

ISSUE
1. Whether or not the Court of Appeals erred in holding that the word Lyceum has not acquired a
secondary meaning in favor of petitioner?

RULING
No.

"SECTION 18. Corporate name. — No corporate name may be allowed by the Securities and
Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that
of any existing corporation or to any other name already protected by law or is patently deceptive,
confusing or contrary to existing laws. When a change in the corporate name is approved, the
Commission shall issue an amended certificate of incorporation under the amended name."
(Emphasis supplied)

The policy underlying the prohibition in Section 18 against the registration of a corporate name
which is "identical or deceptively or confusingly similar" to that of any existing corporation or which is
"patently deceptive" or "patently confusing" or "contrary to existing laws," is the avoidance of fraud
upon the public which would have occasion to deal with the entity concerned, the evasion of legal
obligations and duties, and the reduction of difficulties of administration and supervision over
corporations.
 Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market, because geographical or otherwise descriptive
might nevertheless have been used so long and so exclusively by one producer with reference to this
article that, in that trade and to that group of the purchasing public, the word or phrase has come to
mean that the article was his produce (Ana Ang vs. Toribio Teodoro, 74 Phil. 56). This circumstance
has been referred to as the distinctiveness into which the name or phrase has evolved through the
substantial and exclusive use of the same for a considerable period of time. Consequently, the same
doctrine or principle cannot be made to apply where the evidence did not prove that the business (of
the plaintiff) has continued for so long a time that it has become of consequence and acquired a good
will of considerable value such that its articles and produce have acquired a well- known reputation,
and confusion will result by the use of the disputed name (by the defendant) .

We conclude and so hold that petitioner institution is not entitled to a legally enforceable
exclusive right to use the word "Lyceum" in its corporate name and that other institutions may use
"Lyceum" as part of their corporate names. To determine whether a given corporate name is "identical"
or "confusingly or deceptively similar" with another entity's corporate name, it is not enough to
ascertain the presence of "Lyceum" or "Liceo" in both names. One must evaluate corporate names in
their entirety and when the name of petitioner is juxtaposed with the names of private respondents,
they are not reasonably regarded as "identical" or "confusingly or deceptively similar" with each other.
 APPEAL NO. 10-05-01

IN-N-OUT BUTGER, INC., Complainant-Appellant,

vs.
SEHWANI INC. AND/OR BENITA’S FRITES, INC., Respondent-Appellees

FACTS
Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated under the laws of
California. It is a signatory to the Convention of Paris on Protection of Industrial Property and the
TRIPS Agreement. It is engaged mainly in the restaurant business, but it has ne ver engaged in
business in the Philippines.

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

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

In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative complaint
against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition and cancellation of trademark
registration.

ISSUE
1. Whether or not the subject orders are already final and executory?
2. Whether or not the respondent has the legal capacity to sue for the protection of its Trademark?
3. Whether or not there was unfair competition?

RULING

1st Issue: Yes.

The Court has invariably ruled that perfection of an appeal within the statutory or reglementary
period is not only mandatory but also jurisdictional; failure to do so renders the questioned
decision/final order final and executory, and deprives the appellate court of jurisdiction to alter the
judgment or final order, much less to entertain the appeal. True, this rule had been relaxed but only in
highly meritorious cases to prevent a grave injustice from being done. Such does not obtain in this
case.

2nd Issue: Yes.

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.
 3rd Issue: Yes.

The evidence on record shows that Sehwani Inc. and Benita Frites were not using their
registered trademark but that of In-n-Out Burger. Sehwani and Benita Frites are also giving their
products the general appearance that would likely influence the purchasers to believe that their
products are that of In-N-Out Burger. The intention to deceive may be inferred from the similarity of
the goods as packed and offered for sale, and, thus, an action will lie to restrain unfair competition.
The respondents’ fraudulent intention to deceive purchasers is also apparent in their use of the In-N-
Out Burger in business signages.