IP Digests1

8/22/2019 IP Digests1

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Mirpuri v CA

Facts:

On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J. Mirpuri, filed anapplication with the Bureau of Patents for the registration of the trademark "Barbizon" for use in brassieresand ladies undergarments. Escobar alleged that she had been manufacturing and selling these products

under the firm name "L & BM Commercial" since March 3, 1970. Private respondent Barbizon Corporation, acorporation organized and doing business under the laws of New York, U.S.A., opposed the application. Itclaimed that:respondent-applicant's use of the said mark BARBIZON which resembles the trademark usedand owned by opposer, constitutes an unlawful appropriation of a mark previously used in the Philippinesand not abandoned and therefore a statutory violation of Section 4 (d) of Republic Act No. 166, asamended."[1]This was docketed as Inter Partes Case No. 686 (IPC No. 686).In 1974, the Director of Patents gave due course to the application. Escobar later assigned all his rights andinterest over the trademark to petitioner. In 1979, Escobar failed to file with the Bureau the affidavit of use ofthe trademark required under the Philippine Trademark Law. Due to this failure, the Bureau cancelledEscobars certificate of registration.

In 1981, Escobar and petitioner separately filed this application for registration of the same trademark. (IPC

2049). Private respondent opposed again. This time it alleged (1) that the said trademark was registeredwith the US Patent Office; (2) that it is entitled to protection aswell-known mark under Article 6 bis of the Paris Convention, EO 913 and the two Memoranda of the Ministerof Trade and Industry and (3) that its use on the same class of goods amounts to a violation of the TrademarkLaw and Art. 189 of the RPC. Petitioner raised the defense of Res Judicata.

Forthwith, private respondent filed before the Office of Legal Affairs of the DTI a petition for cancellation ofpetitioner's business name. On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner'scertificate of registration, and declared private respondent the owner and prior user of the business name"Barbizon International." Meanwhile, in IPC No. 2049, the evidence of both parties were received by theDirector of Patents. On June 18, 1992, the Director rendered a decision declaring private respondent'sopposition barred by res judicata and giving due course to petitioner's application for registration

Court of Appeals in CA-G.R. SP No. 28415. On April 30, 1993, the Court of Appeals reversed the Director ofPatents finding that IPC No. 686 was not barred by judgment in IPC No. 2049 and ordered that the case beremanded to the Bureau of Patents for further proceedings

Issue: One of the requisites of res judicata is identical causes of action. Do IPC No. 686 and IPC No. 2049involve the same cause of action?Held: No.

Ratio:

R.A. No. 8293, the Intellectual Property Code of the Philippines, which defines a "trademark" as "any visiblesign capable of distinguishing goods."[12]In Philippine jurisprudence, the function of a trademark is to pointout distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has beeninstrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill;

to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and toprotect the manufacturer against substitution and sale of an inferior and different article as his product.[13]

Modern authorities on trademark law view trademarks as performing three distinct functions: (1) theyindicate origin or ownership of the articles to which they are attached; (2) they guarantee that those articlescome up to a certain standard of quality; and (3) they advertise the articles they symbolize Today, thetrademark is not merely a symbol of origin and goodwill; it is often the most effective agent for the actualcreation and protection of goodwill. It imprints upon the public mind an anonymous and impersonalguaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the
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goods.[28]The mark has become the "silent salesman," the conduit through which direct contact between thetrademark owner and the consumer is assured.

No res judicata in this case because of differing COAs. The Convention of Paris for the Protection of IndustrialProperty, otherwise known as the Paris Convention, is a multilateral treaty that seeks to protect industrialproperty 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.Inshort, foreign nationals are to be given the same treatment in each of the member countries as that country

makes available to its own citizens.[43]Nationals of the various member nations are thus assured of a certainminimum of international protection of their industrial property

In the case at bar, private respondent anchors its cause of action on the first paragraph of Article 6bis of theParis Convention which reads as follows: "Article 6bis(1) The countries of the Union undertake, eitheradministratively if their legislation so permits, or at the request of an interested party, to refuse or to

cancel the registration and to prohibit the use, of a trademark which constitutes a reproduction, an

imitation, or a translation, liable to create confusion, of a mark considered by the competent authority

of the country of registration or use to be well-known in that country as being already the mark of a

person entitled to the benefits of this Convention and used for identical or similar goods. These

provisions shall also apply when the essential part of the mark constitutes a reproduction of any such

well-known mark or an imitation liable to create confusion therewith.

The essential requirement under Article 6bis is that the trademark to be protected must be "well-known" inthe country where protection is sought. The power to determine whether a trademark is well-known lies inthe "competent authority of the country of registration or use." This competent authority would be either theregistering authority if it has the power to decide this, or the courts of the country in question if the issuecomes before a court

In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all pendingapplications for Philippine registration of signature and other world-famous trademarks by applicants otherthan their original owners or users. The Minister enumerated several internationally-known trademarks andordered the Director of Patents to require Philippine registrants of such marks to surrender their certificatesof registration. In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-

known trademarks but laid down guidelines for the Director of Patents to observe in determining whether atrademark is entitled to protection as a well-known mark in the Philippines under Article 6 bis of the ParisConvention.

Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the 1984 landmark caseofLa Chemise Lacoste, S.A. v. Fernandez.[60]This court ruled therein that under the provisions of Article 6 bis ofthe Paris Convention, the Minister of Trade and Industry was the "competent authority" to determinewhether a trademark is well-known in this country.[61]The Villafuerte Memorandum was issued in 1980, i.e.,fifteen (15) years after the adoption of the Paris Convention in 1965. In the case at bar, the first interpartes case, IPC No. 686, was filed in 1970, before the Villafuerte Memorandum but five (5) years after theeffectivity of the Paris Convention. Article 6bis was already in effect five years before the first case wasinstituted. Private respondent, however, did not cite the protection of Article 6bis, neither did it mention theParis Convention at all. It was only in 1981 when IPC No. 2049 was instituted that the Paris Convention andthe Villafuerte Memorandum, and, during the pendency of the case, the 1983 Ongpin Memorandum wereinvoked by private respondent.

The issue of ownership of the trademark was not raised in IPC 686. IPC 2049 raised the issue of ownership,the first registration and use of the trademark in the US and other countries, and the international recognitionof the trademark established by extensive use and advertisement of respondents products for over 40 yearshere and abroad. These are different from the issues of confessing similarity and damage in IPC 686. Theissue of prior use may have been raised in IPC 686 but this claim was limited to prior use in thePhilippines only. Prior use in IPC 2049 stems from the respondents claims originator of the word and symbolBarbizon, as the first and registered user of the mark attached to its products which have been sold and
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advertised would arise for a considerable number of years prior to petitioners first application. Indeed, theseare substantial allegations that raised new issues and necessarily gave respondents a new cause of action.

Moreover, the cancellation of petitioners certificate registration for failure to file the affidavit of use aroseafter IPC 686. This gave respondent another cause to oppose the second application. It is also to be noted thatthe oppositions in the first and second cases are based on different laws. Causes of action which are distinct

and independent from each other, although out of the same contract, transaction, or state of facts, may besued on separately, recovery on one being no bar to subsequent actions on others. The mere fact that thesame relief is sought in the subsequent action will not render the judgment in the prior action operating asres judicata, such as where the actions are based on different statutes.

It is also noted that the oppositions in the first and second cases are based on different laws. The oppositionin IPC No. 686 was based on specific provisions of the Trademark Law, i.e., Section 4 (d )[70]on confusingsimilarity of trademarks and Section 8[71]on the requisite damage to file an opposition to a petition forregistration. The opposition in IPC No. 2049 invoked the Paris Convention, particularly Article 6bis thereof,E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry.

Philip Morris v Fortune Tobacco (2006)

Facts:Petitioner Philip Morris, Inc., a corporation organized under the laws of the State of Virginia, United States ofAmerica, is, per Certificate of Registration No. 18723 issued on April 26, 1973 by the Philippine Patents Office(PPO), the registered owner of the trademark "MARK VII" for cigarettes. Similarly, petitioner Benson &Hedges (Canada), Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the trademark "MARKTEN" for cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as can be seen inTrademark Certificate of Registration No. 19053, another subsidiary of Philip Morris, Inc., the Swiss companyFabriques de Tabac Reunies, S.A., is the assignee of the trademark "LARK,

In the Complaint xxx with prayer for the issuance of a preliminary injunction, [petitioners] alleged that theyare foreign corporations not doing business in the Philippines and are suing on an isolated transaction. xxxthey averred that the countries in which they are domiciled grant xxx to corporate or juristic persons of thePhilippines the privilege to bring action for infringement, xxx without need of a license to do business in those

countries. [Petitioners] likewise manifested [being registered owners of the trademark "MARK VII" and"MARK TEN" for cigarettes as evidenced by the corresponding certificates of registration and an applicant forthe registration of the trademark "LARK MILDS"]. xxx. [Petitioners] claimed that they have registered theaforementioned trademarks in their respective countries of origin and that, by virtue of the long andextensive usage of the same, these trademarks have already gained international fame and acceptance.Imputing bad faith on the part of the [respondent], petitioners claimed that the [respondent], without anyprevious consent from any of the [petitioners], manufactured and sold cigarettes bearing the identical and/orconfusingly similar trademark "MARK"

TC dismissed for lack of standing to sue and that there is mo infringement. CA dismissed finding that therewas standing to sue but there was no infrigment. In support of their contention respecting their right ofaction, petitioners assert that, as corporate nationals of member-countries of the Paris Union, they can suebefore Philippine courts for infringement of trademarks, or for unfair competition, without need of obtainingregistration or a license to do business in the Philippines, and without necessity of actually doing business inthe Philippines. To petitioners, these grievance right and mechanism are accorded not only by Section 21-A ofRepublic Act (R.A.) No. 166, as amended, or the Trademark Law, but also by Article 2 of the Paris Conventionfor the Protection of Industrial Property, otherwise known as the Paris Convention.

In any event, petitioners point out that there is actual use of their trademarks in the Philippines as evidencedby the certificates of registration of their trademarks. The marks "MARK TEN" and "LARK" were registered onthe basis of actual use in accordance with Sections 2-A13and 5(a)14of R.A. No. 166, as amended, providing fora 2-month pre-registration use in local commerce and trade while the registration of "MARK VII" was on the
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basis of registration in the foreign country of origin pursuant to Section 37 of the same law wherein it isexplicitly provided that prior use in commerce need not be alleged.15

Finally, petitioners would press on their entitlement to protection even in the absence of actual use oftrademarks in the country in view of the Philippines adherence to the Trade Related Aspects of Intellectual

Property Rights or the TRIPS Agreement and the enactment of R.A. No. 8293, or the Intellectual Property

Code (hereinafter the "IP Code"), both of which provide that the fame of a trademark may be acquiredthrough promotion or advertising with no explicit requirement of actual use in local trade or commerce.

Issue: WON there was infringementHeld: None

Ratio:

1. For, petitioners are still foreign corporations. As such, they ought, as a condition to availment of the rightsand privileges vis--vis their trademarks in this country, to show proof that, on top of Philippine registration,their country grants substantially similar rights and privileges to Filipino citizens pursuant to Section 21-A20of R.A. No. 166. In Leviton Industries v. Salvador,21the Court further held that the aforementionedreciprocity requirement is a condition sine qua non to filing a suit by a foreign corporation which, unlessalleged in the complaint, would justify dismissal thereof, a mere allegation that the suit is being pursued

under Section 21-A of R.A. No. 166 not being sufficient. In a subsequent case,22

however, the Court held thatwhere the complainant is a national of a Paris Convention- adhering country, its allegation that it is suingunder said Section 21-A would suffice, because the reciprocal agreement between the two countries isembodied and supplied by the Paris Convention which, being considered part of Philippine municipal laws,can be taken judicial notice of in infringement suits.23

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 theprotection of their trademarks in this country absent actual use of the marks in local commerce and trade.True, the Philippines adherence to the Paris Convention24effectively obligates the country to honor andenforce its provisions25as 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.26Hence,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) whileno domicile requirement in the country where protection is claimed shall be required of persons entitled tothe benefits of the Union for the enjoyment of any industrial property rights,27foreign nationals must stillobserve and comply with the conditions imposed by Philippine law on its nationals.

Considering that R.A. No. 166, as amended, specifically Sections 228and 2-A29thereof, mandates actual use ofthe marks and/or emblems in local commerce and trade before they may be registered and ownershipthereof acquired, the petitioners cannot, therefore, dispense with the element of actual use. Followinguniversal acquiescence and comity, our municipal law on trademarks regarding the requirements of actualuse in the Philippines must subordinate an international agreement inasmuch as the apparent clash is beingdecided by a municipal tribunal. Xxx. Withal, the fact that international law has been made part of the law ofthe land does not by any means imply the primacy of international law over national law in the municipalsphere. Under the doctrine of incorporation as applied in most countries, rules of International Law are givena standing equal, not superior, to national legislative enactments

Contrary to what petitioners suggest, the registration of trademark cannot be deemed conclusive as to theactual use of such trademark in local commerce. As it were, registration does not confer upon the registrantan absolute right to the registered mark. The certificate of registration merely constitutes prima facieevidence that the registrant is the owner of the registered mark. Evidence of non-usage of the mark rebuts thepresumption of trademark ownership,34as what happened here when petitioners no less admitted not doingbusiness in this country.35
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Most importantly, we stress that registration in the Philippines of trademarks does not ipso facto convey anabsolute right or exclusive ownership thereof. To borrow from Shangri-La International Hotel Management,Ltd. v. Development Group of Companies, Inc.36trademark is a creation of use and, therefore, actual use is apre-requisite to exclusive ownership; registration is only an administrative confirmation of the existence ofthe right of ownership of the mark, but does not perfect such right; actual use thereof is the perfectingingredient.37

Petitioners reliance on Converse Rubber Corporation38is quite misplaced, that case being cast in a differentfactual milieu. There, we ruled that a foreign owner of a Philippine trademark, albeit not licensed to do, andnot so engaged in, business in the Philippines, may actually earn reputation or goodwill for its goods in thecountry. But unlike in the instant case, evidence of actual sales of Converse rubber shoes, such as salesinvoices, receipts and the testimony of a legitimate trader, was presented in Converse. This Court also findsthe IP Code and the TRIPS Agreement to be inapplicable, the infringement complaint herein having been filedin August 1982 and tried under the aegis of R.A. No. 166, as amended. The IP Code, however, took effect onlyon January 1, 1998 without a provision as to its retroactivity .39In the same vein, the TRIPS Agreement wasinexistent when the suit for infringement was filed, the Philippines having adhered thereto only on December16, 1994.

2. Section 22 of R.A. No. 166, as amended, defines what constitutes trademark infringement, as follows: Sec.

22. Infringement, what constitutes. Any person who shall use, without the consent of the registrant, anyreproduction, counterfeit, copy or colorable imitation of any registered mark or tradename in connectionwith the sale, offering for sale, or advertising of any goods, business or services on or in connection withwhich such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source ororigin of such goods or services, or identity of such business; or reproduce, counterfeit, copy of color ablyimitate any such mark or tradename and apply such reproduction, counterfeit, copy or colorable imitation tolabels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or inconnection with such goods, business, or services

The "likelihood of confusion" is the gravamen of trademark infringement.40But likelihood of confusion is arelative concept, the particular, and sometimes peculiar, circumstances of each case being determinative of itsexistence. Thus, in trademark infringement cases, more than in other kinds of litigation, precedents must beevaluated in the light of each particular case.41

In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the dominancytest and the holistic test.42The dominancy test43sets sight on the similarity of the prevalent features of thecompeting trademarks that might cause confusion and deception, thus constitutes infringement. Under thisnorm, the question at issue turns on whether the use of the marks involved would be likely to cause confusionor mistake in the mind of the public or deceive purchasers.44 In contrast, the holistic test45entails aconsideration of the entirety of the marks as applied to the products, including the labels and packaging, indetermining confusing similarity.

Upon consideration of the foregoing in the light of the peculiarity of this case, we rule against the likelihood ofconfusion resulting in infringement arising from the respondents use of the trademark "MARK" for its

particular cigarette product. For one, as rightly concluded by the CA after comparing the trademarks involvedin their entirety as they appear on the products,46the striking dissimilarities are significant enough to warnany purchaser that one is different from the other. Indeed, although the perceived offending word "MARK" isitself prominent in petitioners trademarks "MARK VII" and "MARK TEN," the entire marking system should

be considered as a whole and not dissected, because a discerning eye would focus not only on thepredominant word but also on the other features appearing in the labels. Only then would such discerningobserver draw his conclusion whether one mark would be confusingly similar to the other and whether ornot sufficient differences existed between the marks.47

But, even if the dominancy test were to be used, as urged by the petitioners, but bearing in mind that atrademark serves as a tool to point out distinctly the origin or ownership of the goods to which it isaffixed,48the likelihood of confusion tantamount to infringement appears to be farfetched. The reason for the
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origin and/or ownership angle is that unless the words or devices do so point out the origin or ownership, theperson who first adopted them cannot be injured by any appropriation or imitation of them by others, norcan the public be deceived.49

Since the word "MARK," be it alone or in combination with the word "TEN" and the Roman numeral "VII,"does not point to the origin or ownership of the cigarettes to which they apply, the local buying public could

not possibly be confused or deceived that respondents "MARK" is the product of petitioners and/ororiginated from the U.S.A., Canada or Switzerland. And lest it be overlooked, no actual commercial use ofpetitioners marks in local commerce was proven. There can thus be no occasion for the public in this country,unfamiliar in the first place with petitioners marks, to be confused.

For another, a comparison of the trademarks as they appear on the goods is just one of the appreciablecircumstances in determining likelihood of confusion. Del Monte Corp. v. CA 50dealt with another, where weinstructed to give due regard to the "ordinary purchaser," thus: The question is not whether the two articlesare distinguishable by their label when set side by side but whether the general confusion made by the articleupon the eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result in hisconfounding it with the original. As observed in several cases, the general impression of the ordinarypurchaser, buying under the normally prevalent conditions in trade and giving the attention such purchasersusually give in buying that class of goods is the touchstone.

When we spoke of an "ordinary purchaser," the reference was not to the "completely unwary customer" butto the "ordinarily intelligent buyer" considering the type of product involved.51It cannot be over-emphasizedthat the products involved are addicting cigarettes purchased mainly by those who are already predisposedto a certain brand. Accordingly, the ordinary buyer thereof would be all too familiar with his brand anddiscriminating as well.

3. In Mighty Corporation v. E & J Gallo Winery ,53the Court held that the following constitute the elements oftrademark infringement in accordance not only with Section 22 of R.A. No. 166, as amended, but also Sections2, 2-A, 9-A54and 20 thereof: (a) a trademark actually used in commerce in the Philippines and registered inthe principal register of the Philippine Patent Office,(b) 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 suchtrademark is reproduced, counterfeited, copied or colorably imitated by another person and suchreproduction, 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 orservices 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. lawphil.net

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 thecontrary. Likewise, we note that petitioners even failed to support their claim that their respective marks arewell-known and/or have acquired goodwill in the Philippines so as to be entitled to protection even withoutactual use in this country in accordance with Article 6bis55of the Paris Convention.

4. Last, but not least, we must reiterate that the issue of trademark infringement is factual, with both the trialand appellate courts having peremptorily found allegations of infringement on the part of respondent to bewithout basis. As we said time and time again, factual determinations of the trial court, concurred in by theCA, are final and binding on this Court.57

Shangrila v DCCI 2006

Facts:
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At the core of the controversy are the Shangri-Lamark and Slogo. Respondent DGCI claims ownership ofsaid mark and logo in the Philippines on the strength of its prior use thereof within the country. As DGCIstresses at every turn, it filed on October 18, 1982 with the Bureau of Patents, Trademarks and TechnologyTransfer (BPTTT) pursuant to Sections 2 and 4 of Republic Act (RA) No. 166 ,[3]as amended, an application forregistration covering the subject mark and logo. On May 31, 1983, the BPTTT issued in favor of DGCI thecorresponding certificate of registration therefor, i.e., Registration No. 31904. Since then, DGCI started

using the Shangri-Lamark and Slogo 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-Laas part of thecorporate names of all companies organized under the aegis of the Kuok Group of Companies (the KuokGroup). The Kuok Group has used the name Shangri-Lain all Shangri-La hotels and hotel-relatedestablishments around the world which the Kuok Family owned.

It is principally upon the foregoing factual backdrop that respondent DGCI filed a complaint for Infringementand Damages with the RTC of Quezon City against the herein petitionersSLIHM, 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 anddamages 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 andallied services.

In their Answer with Counterclaim, the petitioners accused DGCI of appropriating and illegally usingthe Shangri-Lamark and Slogo, adding that the legal and beneficial ownership thereof pertained toSLIHM and that the Kuok Group and its related companies had been using this mark and logo since March1962 for all their corporate names and affairs. In this regard, they point to the Paris Convention for theProtection of Industrial Propertyas affording security and protection to SLIHMs exclusive right to said markand logo. They further claimed having used, since late 1975, the internationally-known and specially-designed Shangri-Lamark and S logo for all the hotels in their hotel chain.

TC ruled in favor of respondent, CA affirmed. Albeit the Kuok Group used the mark and logo since 1962, theevidence 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 accordancewith Section 2 of R.A. No. 166), it cannot claim ownership of the mark and logo in accordance with the holdingin Kabushi Kaisha Isetan v. IAC[8],as reiterated in Philip Morris, Inc. v. Court of Appeals.[9] On the otherhand, respondent has a right to the mark and logo by virtue of its prior use in the Philippines and theissuance of Certificate of Registration No. 31904.

Issue: WON Petitioner is guilty of infringementHeld: No

Ratio:

Under the provisions of the former trademark law, R.A. No. 166, as amended, which was in effect upto December 31, 1997, hence, the law in force at the time of respondent's application for registration oftrademark, the root of ownership of a trademark is actual use in commerce. Registration, without more, doesnot confer upon the registrant an absolute right to the registered mark. The certificate of registration ismerely aprima facie proof that the registrant is the owner of the registered mark or trade name. Evidence ofprior and continuous use of the mark or trade name by another can overcome the presumptive ownership ofthe 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:Registration in the Principal Register gives rise to a presumption of the validity of the registration, theregistrant's ownership of the mark, and his right to the exclusive use thereof. x x x Registration in thePrincipal Register is limited to the actual owner of the trademark and proceedings therein pass on the issue
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of ownership, which may be contested through opposition or interference proceedings, or, afterregistration, in a petition for cancellation

While the present law on trademarks[17]has dispensed with the requirement of prior actual use at the time ofregistration, the law in force at the time of registration must be applied, and thereunder it was held that as acondition 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]

Here, respondent's own witness, Ramon Syhunliong, testified that a jeepney signboard artist allegedlycommissioned to create the mark and logo submitted his designs only in December 1982 .[21]This was two-and-a-half months afterthe filing of the respondents trademark application on October 18, 1982 with theBPTTT. It was also only in December 1982 when the respondent's restaurant was opened forbusiness.[22] Respondent cannot now claim before the Court that the certificate of registration itself is proofthat the two-month prior use requirement was complied with, what with the fact that its very own witnesstestified otherwise in the trial court. And because at the time (October 18, 1982) the respondent filed itsapplication for trademark registration of the Shangri-Lamark and Slogo, respondent was not using thesein the Philippines commercially, the registration is void.

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 fontand lettering style and in addition, he copies also the logo portion of the trademark, the slightest doubtvanishes. It is then replaced by the certainty that the adoption was deliberate, malicious and in bad faith .[31]Itis 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 intentto take advantage of the goodwill of petitioners' mark and logo

R.A. No. 166, as amended, under which this case was heard and decided provides: Section 2. Whatare registrable. - Trademarks, trade names and service marks owned by persons, corporations, partnershipsor associations domiciled in the Philippines and by persons, corporations, partnerships or associationsdomiciled 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 lessthan 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 lawsubstantially similar privileges to citizens of the Philippines, and such fact is officially certified, with acertified true copy of the foreign law translated into the English language, by the government of the foreigncountry to the Government of the Republic of the Philippines.

Section 2-A. Ownership of trademarks, trade names and service marks; how acquired. - Anyone who lawfullyproduces or deals in merchandise of any kind or who engages in any lawful business, or who renders anylawful service in commerce, by actual use thereof in manufacture or trade, in business, and in the servicerendered, may appropriate to his exclusive use a trademark, a trade name, or a servicemarknot soappropriated 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 thesame 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 tradename and Slogo 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 respondents favor. Unfortunately, however, what the CA failedto 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 outhow 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 usedthe mark in commerce in the Philippines for 2 months prior to the application for registration. Since
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ownership of the trademark is required for registration, Section 2-A of the same law sets out to define howone goes about acquiring ownership thereof. Under Section 2-A, it is clear that actual use in commerce is alsothe test of ownership but the provision went further by saying that the mark must not have been soappropriated by another. Additionally, it is significant to note that Section 2-A does not require that the actualuse of a trademark must be within the Philippines. Hence, under R.A. No. 166, as amended, one may be anowner 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 didrespondent 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 beenalready appropriated (i.e., used) by someone else. At the time of respondent DGCI's registration of themark, the same was already being used by the petitioners, albeit abroad, of which DGCIs presidentwasfully aware.

It is respondent's contention that since the petitioners adopted the Shangri-Lamark and Slogo as a merecorporate name or as the name of their hotels, instead of using them as a trademark or service mark, thensuch name and logo are not trademarks. The two concepts of corporate name or business name andtrademark 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 definesthe terms as follows: Sec. 38. Words and terms defined and construed In the construction of this Act, unlessthe contrary is plainly apparent from the context The term trade name includes individual names andsurnames, 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 lawfullyadopted and used by natural or juridical persons, unions, and any manufacturing, industrial, commercial,agricultural or other organizations engaged in trade or commerce .The term service mark means a markused in the sale or advertising of services to identify the services of one person and distinguish them fromthe services of others and includes without limitation the marks, names, symbols, titles, designations,

slogans, character names, and distinctive features of radio or other advertising. [Emphasissupplied]Clearly, from the broad definitions quoted above, the petitioners can be considered as having usedthe Shangri-Laname and Slogo as a tradename and service mark.

The new Intellectual Property Code (IPC), Republic Act No. 8293, undoubtedly shows the firm resolve of thePhilippines 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 thecancellation thereof, sue for unfair competition) include persons whose internationally well-known mark, whether or not registered. However, while the Philippines was already a signatory tothe 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.

Consequently, the petitioners cannot claim protection under the Paris Convention. Nevertheless, with thedouble infirmity of lack of two-month prior use, as well as bad faith in the respondent's registration of themark, it is evident that the petitioners cannot be guilty of infringement. It would be a great injustice toadjudge 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 theenforcement of their rights as part of the Kuok Group of Companies and as official repository, manager andoperator of the subject mark and logo. Besides, R.A. No. 166 did not require the party seeking relief tobe the owner of the mark but any person who believes that he is or will be damaged by the registrationof a mark or trade name

Shangrila v DCCI (2007)

Denial of DGCC MR. Movant DGCI would make capital on the alleged danger the subject Decision might wreakupon Philippine trademark law, claiming that the decision in question would render nugatory the protection


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intended by the trademark law to all Philippine trademark registrants. This assertion is a baseless andsweeping statement. The interpretation of Republic Act No. 166 in the Decision does not in any way diminishthe protection afforded to validtrademark registrations made under said law. It was glaringly obvious,however, from the testimony of movants own witness that DGCIs registration of the subject mark and logowas voiddue to the existence of bad faith and the absence of the requisite 2-month prior use. Despitemovant's melodramatic imputation of an abandonment of the territoriality principle, the Decision actually

upholds the principle but found that respondent DGCI was not entitled to protection thereunder due to thedouble infirmity which attended its registration of the subject mark and logo.

Nor can the petitioners' separate personalities from their mother corporation be an obstacle in theenforcement of their rights as part of the Kuok Group of Companies and as official repository, manager andoperator of the subject mark and logo. Besides, R.A. No. 166 did not require the party seeking relief to be theowner of the mark but "any person who believes that he is or will be damaged by the registration of a mark ortrade name."4[Emphasis supplied] Clearly, from the word "Besides"used in the context of the aforequotedparagraph, all that the Decision says is thateven if petitioners were not the owners , they would still have aright of action under the law. There was never an attempt on their part at an eleventh-hour change of theory,as movant DGCI wishes to portray.

Compania General Tobacco v Alhambra Cigar

Facts:

It is admitted that plaintiffs trade name as evidenced by the certificate issued under the Spanish regime,

consists solely of the words La Flor de la Isabela. Plaintiff does not claim that the word Isabela has been

registered by it as a trade name or that it has a title from any source conferring on it the exclusive right to usethat word. Defendant began the manufacture of cigarettes, offering them to the public in packages on thefront side of each of which appeared the words Alhambra Isabelas.

Action is brought to enjoin the defendant from using the word Isabelas; unfair competition andinfringement.. The exclusive right to use this name, plaintiff claim arises from two causes: First, thecontraction of the phrase La Flor de la Isabela into the word Isabela by popular expression and use; and

second, the use for more than twenty years of the word Isabela. Judgment was for plaintiff and defendantappealed; absolved of unfair competition but liable for infringement.

ISSUE:Whether defendantsuse of the word Alhambra Isabela is an infringement to the use of trade name.

HELD:

First the SC said that the case should be treated as an action for infringement of a trade name rather than atrademark. The Act is No. 666 of the Philippine Commission and confers a right of action in three cases (1)for the violation of a trade-mark, (2) a trade-name, and (3) to restrain unfair competition. The statute foundsthe cause of action in the first two cases exclusively on the invasion of the right of property which the statutegives in the trade-mark or trade-name. These actions are not based on fraud nor is the right given on thetheory of unfair competition. It is founded solely in the property.

As a necessary consequence, an action for a violation or infringement of a trade-mark or trade-name does notproceed primarily on the theory that either the plaintiff or the public has been or will be defrauded, althoughthat may be in effect, the result; but on the hypothesis that plaintiff's right in the mark or the name has beeninvaded and that he is entitled to the damages resulting from the invasion. In either case an action may bemaintained without proof of anything more than the right to the exclusive use of the mark or name and thatthe defendant has violated it. No allegation or proof of fraud or intent to defraud is necessarily.

On the other hand, the action to prevent unfair competition is based exclusivelyon fraud; and it would seemfrom the wording of the statute that it refers to the fraud committed on the public rather than to the fraudcommitted on theplaintiff the fraud against the plaintiff being only an incident the means by which thefraud is perpetrated on the public.In such an action plaintiff, to recover, must prove that the defendant, inselling his goods, gave them the same general appearance of the goods of the plaintiff either in the wrapping
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of the package in which they were contained or in the devices of words thereon or in some other feature oftheir appearance which would be likely to influence purchasers to believe that the goods offered for sale bydefendant were those of the plaintiff; and that the defendant clothed his goods with such appearance for thepurpose of deceiving the public and of defrauding the plaintiff of his legitimate trade. The statute expresslyrequires that the plaintiff prove the intent to deceive the public and defraud a competitor before he canrecover

From these observations it is a necessary deduction that an action for the violation of a trade-name cannot becarried on in conjunction with an action of unfair competition based on a similarity to the plaintiff's trade-name. If an action on the trade-name will lie, then an action of unfair competition based on similarity to thetrade-name is impossible; whereas, on the other hand, if an action of unfair competition is the proper action,then one for the violation of a trade-name based on the same facts will not lie. The facts which will support anaction for the violation of a trade-name will not support an action of unfair competition. The same is true ofan action for the violation of a trade-mark except where such an action fails for the reason that the trade-mark is invalid because it consists of a word or words which, in law, are not capable of appropriation as atrade-mark. In such case, by express provision of the statute (section 7), an action of unfair competition willlie. No such exception is made in favor of a trade-name

We apprehend that the reason why this privilege was not extended to a plaintiff in an action for the violation

of a trade-name was that an action of unfair competition is based exclusively on the appearance of the goodsas they are exposed for sale; while, under the statute, the trade-name; unlike the trade-mark, appliesexclusively to the business, profession, trade or occupation of the plaintiff and, as a consequence, it is notessential that the trade-name appear on plaintiff's goods or go into the market with them. (Section 5). It isclear that, if the action of unfair competition is based on the appearance of the goods as they exposed for sale,the facts necessary to support an action for the violation of a trade-name will not sustain it, as neither thetrade-name of the plaintiff nor of the defendant need go into the market at all, and, as consequence, thesimilarity of appearance between the goods of plaintiff and defendant, a fact necessary to sustain an action ofunfair competition, may not exist.

The statute prohibits the registration of a trade name when the trade name represents the geographical placeof production or origin of the products or goods to which the trade name refers, or when it is merely thename, quality or description of the merchandise with respect to which the trade name is to be used. In such

cases, therefore, no trade name can exist.Of course, if the trade-name is not recognized in law, it can have nosecondary meaning. Moreover, the doctrine of secondary meaning as it is known in the United States, is

carried into effect on the theory of unfair competition and not on the theory of property in the trade-name.Indeed, the necessity of basing the action on the theory of unfair competition negatives the existence at thetime of the trade-name in its primary meaning.

The two claims of the plaintiff are identical; for, there could have been no contraction brought about bypopular expression except after long lapse of time. The contraction of the phrase in to the word would createno rights, there being no registration, unless it resulted from long use. The opinion of the plaintiff must fail. Itshows that in not a single instance in the history of the plaintiff corporation, so far as is disclosed by therecord, has a package of its cigarettes gone into the market, either at wholesale or retail with the wordIsabela alone on the package as a separate or distinct word or name.

Re: letter received from one of plaintiffs employees in America. The sentence in the letter to which referenceis particularly made in this : "Furthermore, the trade here knows the cigars as 'Isabela' pure and simple." As isseen, this letter refers to cigars and not cigarettes; but, be that as it may, we believe that the plaintiff has quiteoverlooked the real nature of the letter as evidence. Ehram Bros. say their customers claim that the letteringon this strip is too small for the customers to notice it readily behind the counter, whereas a large lettering ofthe word "Isabela" will be much more attractive and more noticeable. This portion of the letter demonstratesconclusively that the plaintiff has never advertised its cigars in America as "Isabela" cigars. It has persistedalways in advertising them as "La Flor de la Isabela;" and the precise objection made by the dealers handlingplaintiff's cigars in the United States is that plaintiff insists on advertising its goods as "La Flor de la Isabela"


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instead of "Isabela;" and it is clear from the letter that if, as the writer says, its cigars are known to the trade inAmerica as "Isabela" cigars, it is not by reason of plaintiff's efforts but in spite of them.

Furthermore, we are of the opinion that, even if plaintiff had proved a right to the exclusive use of the word"Isabela," we would be forced to conclude that its use by the defendant in connection with the word"Alhambra," which is made equally conspicuous with the word "Isabela," would be a sufficient effort on the

part of defendant to distinguish its cigarettes from those of plaintiff; particularly in view of the fact that theword "Isabela" is the name of a province and also the commercial name of the tobacco grown in that province.

We do not believe, however, that the word "Isabela" can be appropriated or could be appropriated at the timeplaintiff claimed that it began to use that word as descriptive of its products. The Royal Decree of 1888prohibited the use of a geographical name as trade-name or trade-mark and that decree was in force beforethe use of the word "Isabela" began, even under plaintiff's claim. While Act No. 666, as we have seen,expressly permits the appropriation of a trade-mark, although it may be a geographical or descriptive name, itdoes not permit the appropriation of a trade-name under the same circumstance. We accordingly repeat, fromthe Royal Decree of 1888 to the present time, the word "Isabela" has not been appropriable by anybody as atrade-name.

Arce Sons v Selecta Biscuits

Facts:

1955, Selecta Biscuit Company, Inc., hereinafter referred to as respondent, filed with the Philippine PatentOffice a petition for the registration of the word "SELECTA" as trade-mark to be use in its bakery productsalleging that it is in actual use thereof for not less than two months before said date and that "no otherpersons, partnership, corporation or association ... has the right to use said trade-mark in the Philippine

In due time, petitioner filed its opposition thereto on several grounds, among which are: (1) that the mark"SELECTA" had been continuously used by petitioner in the manufacture and sale of its products, includingcakes, bakery products, milk and ice cream from the time of its organization and even prior thereto by itspredecessor-in-interest, Ramon Arce; (2) that the mark "SELECTA" has already become identified with nameof the petitioner and its business;and (6) that actually a complaint has been filed by the petitioner againstrespondent for unfair competition in the Court of First Instance of Manila asking for damages and for the

issuance of a writ of injunction against respondent enjoining the latter for continuing with the use of saidmark

CFI: perpetually enjoining respondent from using the name "SELECTA" as a trade-mark on the goodsmanufactured and/or sold by it and ordering it to pay petitioner by way of damages.

Director of Patents, on December 7, 1958, rendered decision dismissing petitioner's opposition and statingthat the registration of the trade-mark "SELECTA" in favor of applicant Selecta Biscuits Company, Inc. will notcause confusion or mistake nor will deceive the purchasers as to the cause damage to petitioner. He believesthat the word as used by the petitioner functions only to point to the place of business or location of itsrestaurant while the same word as used by respondent points to the origin of the products its manufacturesand sells and he predicates this distinction upon the fact that while the goods of petitioner are only servedwithin its restaurant or sold only on special orders in the City of Manila, respondent's goods are ready-madeand are for sale throughout the length and breadth of the country. He is of the opinion that the use of saidtrade-mark by respondent has not resulted in confusion in trade contrary to the finding of the court a quo.Which of this opinions is correct is the issue now for determination

Issue: WON respondent is guilty of infringementHeld: Yes

Ratio:

It appears that Ramon Arce, predecessor-in-interest of petitioner, started his milk business as early as 1933.He sold his milk products in bottles covered with caps on which the words 'SELECTA FRESH MILK' were


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inscribed. Expanding his business, he established a store at Lepanto Street, City of Manila, where he sold, inaddition to his products, ice cream, sandwiches and other food products, placing right in front of hisestablishment a signboard with the name 'SELECTA' inscribed thereon.e sandwiches he sold and distributedwere wrapped in carton boxes with covers bearing the same name. He used several cars and trucks fordelivery purposes on the sides of which were written the same word.

The foregoing unmistakably show that petitioner, through its predecessor-in-interest, had made use of theword "SELECTA" not only as a trade-name indicative of the location of the restaurant where it manufacturesand sells its products, but as trade-mark is used. This is not only in accordance with its general acceptationbut with our law on the matter. "Verily, the word 'SELECTA' has been chosen by petitioner and has beeninscribed on all its products to serve not only as a sign or symbol that may indicate that they aremanufactured and sold by it but as a mark of authenticity that may distinguish them from the productsmanufactured and sold by other merchants or businessmen. The Director of Patents, therefore, erred inholding that petitioner made use of that word merely as a trade-name and not as a trade-mark within themeaning of the law.

The word 'SELECTA', it is true, may be an ordinary or common word in the sense that may be used oremployed by any one in promoting his business or enterprise, but once adopted or coined in connection withone's business as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may

acquire a secondary meaning as to be exclusively associated with its products and business.2

In this sense, itsused by another may lead to confusion in trade and cause damage to its business.

The suggestion that the name 'SELECTA' was chosen by the organizers of respondent merely as a translationfrom a Chinese word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very manner of itsselection, for if the only purpose is to make an English translation of that word and not to compete with thebusiness of petitioner, why chose the word 'SELECTA', a Spanish word, and not "Selected", the Englishequivalent thereof, as was done by other well-known enterprises? Eventually, like the plaintiff, one istempted to ask as to why with the richness in words of the English language and with the affluence of theSpanish vocabulary or, for that matter, of our own dialects, should the defendant choose the controvertedword "Selecta", which has already acquired a secondary meaning by virtue of plaintiff's prior and continueduse of the same as a trade-mark or trade-name of its products?

Sy Hap himself admitted that he had known Eulalio Arce, the person managing plaintiff's business, since1954; that since he began to reside at 10th Avenue, Grace Park, he had known the Selecta Restaurant onAzcarraga Street and Dewey Blvd. and that he even had occasion to eat in one of the restaurants of theplaintiff.

Asia Brewery v CA

Facts:

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) forinfringement of trademark and unfair competition on account of the latter's BEER PALE PILSEN or BEER NABEER product which has been competing with SMC's SAN MIGUEL PALE PILSEN for a share of the local beermarket.

TC: Dismissed. CA: Reversed. In the light of the foregoing analysis and under the plain language of theapplicable rule and principle on the matter, We find the defendant Asia Brewery Incorporated GUILTY ofinfringement of trademark and unfair competition.

Issue: WON Asia brewery is guilty of infringementHeld: No

Ratio:

RA 166, Sec. 22: Infringement, what constitutes. Any person who shall use, without the consent of theregistrant, any reproduction, counterfeit, copy or colorable imitation of any registeredmark or trade-name in


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connection with the sale, offering for sale, or advertising of any goods, business or services on or inconnection with which such use is likely to cause confusion or mistake or to deceive purchasers or others asto the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copyor colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy, orcolorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to beused 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

This definition implies that only registeredtrade marks, trade names and service marks are protected againstinfringement or unauthorized use by another or others. The use of someone else's registered trademark,trade name or service mark is unauthorized, hence, actionable, if it is done "without the consent of theregistrant." (Ibid.)

The registered trademark of SMC for its pale pilsen beer is: San Miguel Pale Pilsen With Rectangular Hops andMalt Design. On the other hand, ABI's trademark, as described by the trial court, consists of:. . . a rectangulardesign bordered by what appear to be buds of flowers with leaves. The dominant feature is "Beer" writtenacross the upper portion of the rectangular design. The phrase "Pale Pilsen" appears immediately below insmaller block letters. To the left is a hop design and to the right, written in small prints, is the phrase "NetContents 320 ml."

Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN MIGUEL PALE PILSEN WITHRECTANGULAR MALT AND HOPS DESIGN? The answer is "No." Infringement is determined by the "test ofdominancy" rather than by differences or variations in the details of one trademark and of another. It hasbeen consistently held that the question of infringement of a trademark is to be determined by the test ofdominancy. Similarity in size, form and color, while relevant, is not conclusive. If the competing trademarkcontains the main or essential or dominant features of another, and confusion and deception is likely toresult, infringement takes place. Duplication or imitation is not necessary; nor it is necessary that theinfringing label should suggest an effort to imitate. The question at issue in cases of infringement oftrademarks is whether the use of the marks involved would be likely to cause confusion or mistakes in themind of the public or deceive purchasers.The test is "similarity in the dominant features of the trademarks."There is hardly any dispute that the dominant feature of SMC's trademark is the name of the product: SAN

MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end of theletters "S" and "M" on an amber background across the upper portion of the rectangular design. On the otherhand, the dominant feature of ABI's trademark is the name: BEER PALE PILSEN, with the word "Beer" writtenin large amber letters, larger than any of the letters found in the SMC label. The trial court perceptivelyobserved that the word "BEER" does not appear in SMC's trademark, just as the words "SAN MIGUEL" do notappear in ABI's trademark. Hence, there is absolutely no similarity in the dominant features of bothtrademarks.

Other dissimilarities: different shapes of the bottles; SMCs name is printed diagonally whereas Beer is printedhorizontally; the names of manufacturers are prominently indicated; Beer carries a slogan while SMC doesnot; SMC bottle carries a logo, beer does not; SMC cap carries the coat of arms and San Miguel BreweryPhilippines, Beer cap carries the word beer; substantial price difference, beer is 4.25 while SMC is 7.00.

The fact that the wordspale pilsen

are part of ABI's trademark does not constitute an infringement of SMC'strademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic words descriptive of the color ("pale"), ofa type of beer ("pilsen"), which is a light bohemian beer with a strong hops flavor that originated in the City ofPilsen in Czechoslovakia and became famous in the Middle Ages. Pilsen" is a "primarily geographicallydescriptive word," (Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and not appropriable by any beer manufacturer.

his rule excluding descriptive terms has also been held to apply to trade-names. As to whether wordsemployed fall within this prohibition, it is said that the true test is not whether they are exhaustivelydescriptive of the article designated, but whether in themselves, and as they are commonly used by those who


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understand their meaning, they are reasonably indicative and descriptive of the thing intended. If they arethus descriptive, and not arbitrary, they cannot be appropriated from general use and become the exclusiveproperty of anyone.

ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which has a fatbulging neck to differentiate it from SMC's bottle. The amber color is a functional feature of the beer bottle. As

pointed out by ABI, all bottled beer produced in the Philippines is contained and sold in amber-coloredbottles because amber is the most effective color in preventing transmission of light and provides themaximum protection to beer. SMC's being the first to use the steinie bottle does not give SMC a vested right touse it to the exclusion of everyone else. Being of functional or common use, and not the exclusive invention ofany one, it is available to all who might need to use it within the industry. Nobody can acquire any exclusiveright to market articles supplying simple human needs in containers or wrappers of the general form, sizeand character commonly and immediately used in marketing such articles

Registration of SMC's beer bottles did not give SMC a patent on the steinie or on bottles of similar size, shapeor color. Most containers are standardized because they are usually made by the same manufacturer. Milk,whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard ketchupor vinegar bottle with its familiar elongated neck. Only their respective labels distinguish them from eachother since they are ordered by brand.

Our decision in this case will not diminish our ruling in "Del Monte Corporation vs. Court of Appeals andSunshine Sauce Manufacturing Industries," 181 SCRA 410, 419, 3that: . . . to determine whether a trademarkhas been infringed, we must consider the mark as a whole and not as dissected. If the buyer is deceived, it isattributable to the marks as a totality, not usually to any part of it.

That ruling may not apply to allkinds of products. The Court itself cautioned that in resolving cases ofinfringement and unfair competition, the courts should "take into consideration several factors which wouldaffect its conclusion, to wit: the age, training and education of the usual purchaser, the nature and cost of thearticle, whether the article is bought for immediate consumption and also the conditions under which it isusually purchased" (181 SCRA 410, 418-419).

The Del Monte case involved catsup, a common household item which is bought off the store shelves by

housewives and house help who, if they are illiterate and cannot identify the product by name or brand,would very likely identify it by mere recollection of its appearance. Since the competitor, Sunshine Sauce Mfg.Industries, not only used recycled Del Monte bottles for its catsup (despite the warning embossed on thebottles: "Del Monte Corporation. Not to be refilled.") but also used labels which were "a colorable imitation"of Del Monte's label, we held that there was infringement of Del Monte's trademark and unfair competition bySunshine. Our ruling in Del Monte would not apply to beer which is not usually picked from a store shelf butordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.

Dissenting: Cruz

It has been correctly held that side-by-side comparison is not the final test of similarity. Such comparisonrequires a careful scrutiny to determine in what points the labels of the products differ, as was done by thetrial judge. The ordinary buyer does not usually make such scrutiny nor does he usually have the time to doso. The average shopper is usually in a hurry and does not inspect every product on the shelf as if he werebrowsing in a library. Where the housewife has to return home as soon as possible to her baby or the workingwoman has to make quick purchases during her off hours, she is apt to be confused by similar labels even ifthey do have minute differences. The male shopper is worse as he usually does not bother about suchdistinctions. The question is not whether the two articles are distinguishable by their labels when set aside byside but whether the general confusion made by the article upon the eye of the casual purchaser who isunsuspicious and off his guard, is such as to likely result in his confounding it with the original.

Emerald Garment Manufacturing v CA and HD Lee


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Facts:

On 18 September 1981, private respondent H.D. Lee Co., Inc., a foreign corporation organized under the lawsof Delaware, U.S.A., filed with the Bureau of Patents, Trademarks & Technology Transfer (BPTTT) a Petitionfor Cancellation of Registration No. SR 5054 (Supplemental Register) for the trademark "STYLISTIC MR. LEE"used on skirts, jeans, blouses, socks, briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie underClass 25, issued on 27 October 1980 in the name of petitioner Emerald Garment Manufacturing Corporation, a

domestic corporation organized and existing under Philippine laws.Private respondent, invoking Sec. 37 ofR.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, 'LEE'

On 19 July 1988, the Director of Patents rendered a decision granting private respondent's petition forcancellation and opposition to registration. The Director of Patents found private respondent to be the priorregistrant of the trademark "LEE" in the Philippines and that it had been using said mark in the Philippines. 7Moreover, the Director of Patents, using the test of dominancy, declared that petitioner's trademark wasconfusingly similar to private respondent's mark because "it is the word 'Lee' which draws the attention ofthe buyer and leads him to conclude that the goods originated from the same manufacturer. CA affirmed

Issue: WON petitioner is guilty of infringementHeld: No

Ratio:

1. Re: laches. 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 besubject 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 27October 1980, 20 the date the certificate of registration SR No. 5054 was published in the Official Gazette andissued to petitioner.

It was only on the date of publication and issuance of the registration certificate that private respondent maybe 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 evidencethat 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 yearhad passed.

2. Re: infringement. Proceeding to the task at hand, the essential element of infringement is colorableimitation. This term has been defined as "such a close or ingenious imitation as to be calculated to deceiveordinary purchasers, or such resemblance of the infringing mark to the original as to deceive an ordinarypurchaser giving such attention as a purchaser usually gives, and to cause him to purchase the one supposingit to be the other." 26 Colorable imitation does not mean such similitude as amounts to identity. Nor does itrequire 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 thatof the other mark or tradename in their over-all presentation or in their essential, substantive and distinctiveparts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine article. 27

Two kinds of tests the Dominancy Test applied inAsia Brewery, Inc

.v

.Court of Appeals

28and other

cases 29and the Holistic Test developed in Del Monte Corporation v. Court of Appeals30 and its proponentcases. 31 As its title implies, the test

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