Mighty Corporation vs ENJ Gallo Winers(GR No 154342, July 14, 2004, Corona)

Facts:Respondent manufacture wines and uses the trademark Gallo for its product. On the other hand, the petitioner is a manufacturer of cigarette and also uses Gallo in its products.

Issue:Is there infringement?

Held:At the time the cause of action accrued in this case, the IPC was not yet enacted so the relevant laws used were the Trademark Law and the Paris Convention.The SC held that there was no infringement. The use of the respondent of the mark Gallo for its wine products was exclusive in nature. The court mentioned two types of confusion in Trademark Infringement:

Confusion of Goods when an otherwise prudent purchaser is induced to purchase one product in the belief that he is purchasing another, in which case defendants goods are then brought as the plaintiffs and its poor quality reflects badly on the plaintiffs reputation.Confusion of Business wherein the goods of the parties are different but the defendants product can reasonably (though mistakenly) be assumed to originate from the plaintiff, thus deceiving the public into believing that there is some connection between the plaintiff and defendant which, in fact, does not exist.

In determining the likelihood of confusion, the Court must consider:(a) the resemblance between the trademarks;(b) the similarity of the goods to which the trademark is attached;(c) the likely effect on the purchaser; and(d) the registrants express or implied consent and other fair and equitable considerations.

In this case, the SC employing the dominancy test, concluded that there is no likelihood of confusion. They materially differ in color scheme, art works and markings. Further, the two goods are not closely related because he products belong to different classifications, form, composition and they have different intended markets or consumers.

InDel Monte Corporation vs. Court of Appeals,45we distinguished trademark infringement from unfair competition:(1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the passing off of one's goods as those of another.(2) In infringement of trademark fraudulent intent is unnecessary, whereas in unfair competition fraudulent intent is essential.(3) In infringement of trademark the prior registration of the trademark is a prerequisite to the action, whereas in unfair competition registration is not necessary.under Article 6bisof the Paris Convention, the following are the elements of trademark infringement:(a) registration or use by another person of a trademark which is a reproduction, imitation or translationliable to create confusion,(b) of a mark considered by the competent authority of the country of registration or use48to bewell-knownin that country and is already the mark of a person entitled to the benefits of the Paris Convention, and(c) such trademark isused for identical or similar goods.On the other hand, Section 22 of the Trademark Law holds a person liable for infringement when, among others, he "uses without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or tradename 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 reproduce, counterfeit, copy or colorably imitate any such mark or tradename 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."49Trademark registration and actual use are material to the complaining partys cause of action.Corollary to this, Section 20 of the Trademark Law50considers the trademark registration certificate asprima facieevidence of the validity of the registration, the registrants ownership and exclusive right to use the trademark in connection with the goods, business or services as classified by the Director of Patents51and as specified in the certificate, subject to the conditions and limitations stated therein. Sections 2 and 2-A52of the Trademark Law emphasize the importance of the trademarks actual use in commerce in the Philippines prior to its registration. In the adjudication of trademark rights between contending parties, equitable principles of laches, estoppel, and acquiescence may be considered and applied.53Under Sections 2, 2-A, 9-A, 20 and 22 of the Trademark Law therefore, the following constitute the elements of trademark infringement:(a) a trademark actually used in commerce in the Philippines and registered in the principal register of the Philippine Patent Office(b) 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 islikely to cause confusion or mistake or to deceive purchasersor others as to thesource or originof such goods or services,or identityof 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.In summary, the Paris Convention protects well-known trademarks only (to be determined by domestic authorities), while the Trademark Law protects all trademarks, whether well-known or not, provided that they have been registered and are in actual commercial use in the Philippines. Following universal acquiescence and comity, in case of domestic legal disputes on any conflicting provisions between the Paris Convention (which is an international agreement) and the Trademark law (which is a municipal law) the latter will prevail.54Under both the Paris Convention and the Trademark Law, the protection of a registered trademark is limited only to goods identical or similar to those in respect of which such trademark is registered and only when there is likelihood of confusion. Under both laws, the time element in commencing infringement cases is material in ascertaining the registrants express or implied consent to anothers use of its trademark or a colorable imitation thereof. This is why acquiescence, estoppel or laches may defeat the registrants otherwise valid cause of action.In view of the foregoing jurisprudence and respondents judicial admission that theactual commercial useof the GALLO wine trademark wassubsequentto its registration in 1971 and to Tobacco Industries commercial use of the GALLO cigarette trademark in 1973, we rule that, on this account, respondents never enjoyed the exclusive right to use the GALLO wine trademark to the prejudice of Tobacco Industries and its successors-in-interest, herein petitioners, either under the Trademark Law or the Paris Convention.

We also note that the GALLO trademark registration certificates in the Philippines and in other countries expressly state that they coverwines only, without any evidence or indication that registrant Gallo Winery expanded or intended to expand its business to cigarettes.63Thus, by strict application of Section 20 of the Trademark Law, Gallo Winerys exclusive right to use the GALLO trademark should be limited to wines, the only product indicated in its registration certificates. This strict statutory limitation on the exclusive right to use trademarksThere are two types of confusion in trademark infringement. The first is "confusion of goods" when an otherwise prudent purchaser is induced to purchase one product in the belief that he is purchasing another, in which case defendants goods are then bought as the plaintiffs and its poor quality reflects badly on the plaintiffs reputation. The other is "confusion of business"wherein the goods of the parties are different but the defendants product can reasonably (though mistakenly) be assumed to originate from the plaintiff, thus deceiving the public into believing that there is some connection between the plaintiff and defendant which, in fact, does not exist.

In determining the likelihood of confusion, the Court must consider:

[a] the resemblance between the trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely effect on the purchaser and [d] the registrants express or implied consent and other fair and equitable considerations.

Whether a trademark causes confusion and is likely to deceive the public hinges on "colorable imitation"73which has been defined as "such similarity in form, content, words, sound, meaning, special arrangement or general appearance of the trademark or tradename in their overall presentation or in their essential and substantive and distinctive parts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine article."