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·~INTELLECTUAL PROPERTY•OFFICE OF THE PHILIPPINES

AMALGAM J2 TRADING CO., IPV No. 10-2013-00029 Complainant,

-versus-

ROLANDO J. ANG, doing business under the name and style CITY SQUARE TRADER,

For: INFRINGEMENT OF TRADEMARK, UNFAIR COMPETITION, DAMAGES WITH PRAYER FOR ISSUANCE OF WRIT OF INJUNCTION

Respondent. }

NOTICE OF DECISION

ATTY. ESTRELLITA BELTRAN-ABELARDO Counsel for Complainant

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Blk. 22, Lot 13 Singkil Street Lagro Subdivisio,Novaliches Quezon City

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&TAGLE-CHUA CRUZ AQUINO Counsel for Respondent Unit 204 Amberland Plaza Condom inium Dona Julia Vargas Avenue, Ortigas Center Pasig City

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GREETINGS:

Please be informed that Decision No. 2019 - ~ dated 19 February 2019 (copy enclosed) was promulgated in the above entitled case.

Taguig City, 19 February 2019.

MAR~TAL IPRS IV

Bureau of Legal Affairs

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www.ipophil.go v.ph Intellectual Property Center

e mail@ipophil.gov.ph #28 Uppe r McKinley Road Mckinley Hill Town Center g +632-2386300 Fort Bonifacio. Taguig City

+632-5539480 1634 Philippi nes

INTELLEoCTUAL PROPERTY OFFICE OF THE PHILIPPINES

AMALGAM J2 TRADING CO., } IPV NO. 10-2013-00029 Complainant, }

} For: INFRINGEMENT OF TRADEMARK, -versus ­ } UNFAIR COMPETITION, DAMAGES WITH

} PRAYER FOR ISSUANCE OF WRIT OF ROLANDO J. ANG, doing business } INJUI\ICTION under the name and style CITY } SQUARE TRADER }

Respondent } x -----------------------------------------------x Decision No. 201Q----=D_IJ.. _

DECISION

Amalgam J2 Trading Co. ("Complainant,,)l filed a complaint against Rolando J. Ang, doing business under the name and style City Square Trader', ("Respondent") for unfair competition and damages.

The Complainant claims that it is the registered owner/holder of Certificate of Registration No. 4-2010-010368 for the trademark "ZEUS HOI\1E 'Your Choice' AND DEVICE" issued by the Bureau of Trademarks of the Intellectual Property Office ("IPOPHIL") on 10 March 2011 with a duration of ten (10) years, for goods under Class 11 namely: gas stoves, electric fans, rice cooker, flat iron, pressure cooker, air cooler, blender and washing machine.

Sometime in June 2013, the Complainant alleges to have discovered that the Respondent has been offering for sale, selling and distributing products with the mark "ZEUS HOME 'Your Choice' AND DEVICE". Josephine Acabado and Joy Pluma, the partners in Amalgam J2 Trading Co., were able to purchase an auto flat iron bearing the subject mark in City Square Trader with address at Felipe II Street, Daet Camarines Norte. Pluma also purchased mark "ZEUS HOME 'Your Choice' AND DEVICE" washing machine, rice cooker, blender and stand fan from City Square Traders located respectively at J.M. Basa Street, Iloilo City; Taft Street, Roxas City; San Jose City, Antique; and XIX Martyres St., Kalibo, Aklan. The Complainant claims to know that the Respondent is not their dealer because they only supply its products in certain Gaisano branches. Through counsel, it sent a letter dated 16 July 2013 demanding Respondent to cease and desist offering for sale, selling and distributing products bearing the mark "ZEUS HOME 'Your Choice' AND DEVICE"; destroy inventories of all products bearing the mark; recall from the mark all products with the mark "ZEUS HOrvlE 'Your Choice' AND DEVICE"; and execute a notarized undertaking that the Respondent will never infringe its mark. According to

1 A partnersh ip duly registered under Philippine laws, with address at Block 71 Lot 10 Miraffores Street, Barangay Rizal, Makati City. 2 A Filipino citizen, doing business under the name and style City Square Traders with principal business address at City Square Trader, J.M. Basa Street, Iloilo City.

www.ipophrl.gov.ph Intellectual Property Center 1128 Up per Mc Kinley Road e mail@ipoPhil.gov.ph McKinl ey Hi ll Town Centere +632-2386300 Fort Bonifabo, Tag uig City

+632-5539480 1634 Philippin es

the Complainant, despite receipt of the said letter on 17 July 2013, the Respondent continues to sell products bearing the mark "ZEUS HOME 'Your Choice' AI\ID DEVICE". In fact, on 31 August 2013, Acabado was able to buy rice cooker with the said mark from City Square Traders in Iloilo, City.

On 16 November 2015, the Complainant filed its Formal Offer of Evidence consisting of the following exhlblts:"

1. its Amended Articles of Partnership; 2. ICARE Certificate of Accreditation issued by the Bureau of Customs ("BOC'')

issued on 17 January 2013; 3. AMO Certificate of Accreditation as importer issued by the BOC on 27

March 2014; 4. Certificate of Registration No. 4-2010-010368 issued on 10 March 2011 for

"ZEUS HOrvlE 'Your Choice' AND DEVICE"; 5. actual labels of the mark; 6. photographs of actual products bearing the mark "ZEUS HOME 'Your

Choice' AND DEVICE'", 7. amended judicial affidavit of Joy Pluma; 8. official receipts issued by the different City Square Trader branches where

the "ZEUS HOME 'Your Choice' AI'JD DEVICE" products were bought; 9. photographs of the products bought from the City Square Traders bearing

the mark "ZEUS HOME 'Your Choice' AI'JD DEVICE"; 10. name of the Complainant as it appears in the box container of the rice

cooker purchased from City Square Trader; 11.formal letter of demand dated 16 July 2013; 12.amended judicial affidavit of Josephine Acabado; 13.cut out portions in the box container and the rice cooker; 14. list of Gaisano branches authorized to sell its products; 15.copies of its quarterly value added tax; 16.official receipts issued by the IPOPHIL for the filing of the complaint and

the cash bond; 17. itinerary receipt from Cebu Pacific for flight to and from Iloilo; 18.official receipt from Harbor Town Hotel; 19. bill of lading from 2GO Express and signature of the receiver; 20. receipt from the notarial services dated 30 October 2013; 21.official receipt for photocopy services issued by InterMatrix; 22.genuine sales invoice no. 157 it issued dated 10 July 2011; 23. imitation/counterfeit sales invoice no. 0157 signed by a certain Jocelyn

issued to City Square Trade on 02 May 2012;

3 l'v1arked as Exhibits "A" to "Q", inclusive.

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24. Philippine Standard Certificate No. 023569 issued by the Department of Trade and Industry CDTI") with License No. Q-1314 and Certificate No. 1314 with sub-markings;

25. letter-complaint for fraud/misrepresentation against Techstrong Corporatio addressed to Atty. Pedro Vicente C. Mendoza, BPS Director, dated 22 October 2012;

26.letter dated 14 January 2013 addressed to the Bureau of Product Standards signed by Josephine Acabado;

27.letter response of the Bureau of Product Standards signed by Atty. Mendoza;

28.DTI certification for City Square that the owner's name is Rolando Ang; 29.certification stating that available records do not show the registration of

the business name San Jose City Square Traders M.A.S. Mura Dito dated 03 June 2015;

30.official receipts issued by Estrellita Beltran Abelardo Law Office for services rendered for the Complainant; and,

31. tax payment deposit slips.

The Hearing Officer issued Order No. 2016-22 admitting Exhibits "A" to "Y", inclusive of sub-markings, for the purposes for which they were offered by the Complainant.

The Respondent, in his defense, alleges that he has no direct and personal business transaction with the Complainant and that the items and/or merchandise that were allegedly seen and/or purchased by the latter were sourced from Germani Trading, which is owned by a certain Willy Ang. He claims to know that Germani Trading and the Complainant had a business agreement whereby the former supplied the merchandise and the latter distributed and sold the merchandise. At the end of a certain period, the Complainant had to make an accounting and had to remit the money due to Germani Trading or return the merchandise not sold or disposed. He avers that he knows that there had been a difference between the Complainant and Germani Trading. Allegedly, the latter is asking for payment and/or remittance of all the money. According to the Respondent, the Complainant has knowledge of the good relation between the him and Germani Trading, which is the reason for the filing of the instant complaint.

The Respondent further argues that he is an innocent purchaser of products bearing the mark "ZEUS HOrvlE 'Your Choice' AND DEVICE". According to him, there is only one manufacturer of the said products, which is Techstrong Appliances, which in turn sells the same to Germani Trading. These goods already contain the trademark when they were manufactured. Also, aside from "ZEUS HOME 'Your Choice' AND DEVICE", he purchased many products bearing other different brands from Germani Trading. As to the cease and desist letter sent by the Complainant's counsel, he denies having received the same as the letter was sent to the store of

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M.A.S. Muradito, Inc., which operates City Square Traders stores in J.M. Basa St., Iloilo and San Jose, Antique. He claims that he operates City Square Trader stores in Kalibo, Aklan; Roxas City and Daet, Camarines Norte. When he learned about the instant case, however, he returned the remaining goods to Germani Trading.

The Respondent's Formal Offer of Evidence was filed on 21 February 2017, consisting of the following:

1. judicial affidavit of Azineth C. IVlendoza dated 09 December 2014; 2. delivery receipts of Germani Trading addressed to City Square Trade in

Iloilo and Antique; 3. delivery receipts of Germani Trading addressed to City Square Trade in

Daet, Roxas and Kalibo; 4. City Square Trade return slips; 5. cash vouchers dated 04 and 20 July 2012; 6. business permits of M.A.5. Muradito, Inc. for years 2015, 2014, 2012 and

2011 (under the trade name of business or style, San Jose City Square Traders);

7. mayor's/business permit of City Square Trader for 2016 issued by the Municipalities of Aklan, Daet and Roxas;

8. Amended Articles of Incorporation of M.A.S. Muradito, Inc. dated 09 May 2014;

9. 2011-2014 General Information Sheet ("GIS") of M.A.S. Muradito, Inc.; 10.Germani Trading's brochure; 11.the Complainant's authorization dated 13 August 2011, company profile,

company and Social Securities System ("SSS'') identification card ("lD'') of Josephine Acabado, and Senior Citizen's ID of Napoleon Acabado;

12.Cebu Pacific itinerary receipt of Josephine Acabado for IVlanila, 22 November 2012, and Bacolod, 24 November 2012;

13.Philippine Bank of Commerce ("PBCom'') deposit slip dated 14 November 2012 for the account of Germani Trading in the amount of Five Hundred Sixty Eight Thousand Three Hundred Fifty Pesos (P568,350.00), three pages of Metro Gaisano summary of sales and commisisions;

14.Germani Trading's delivery receipts; 15.cash vouchers; and, 16.judicial affidavit of Emmanuel Ang.

The Hearing Officer issued Order No. 2017-94 admitting the Exhibits "1" to "32", with sub-markings, of the Respondent for the purposes for which they were offered.

Thereafter, the parties were required to submit their respective memorandum, after which, the case is deemed submitted for decision.

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The issue to be resolved is whether the Respondent may be held gUilty of trademark infringement and/or unfair competition.

Section 155 of R.A. No. 8293, also known as the Intellectual Property Code of the Philippines, as amended ("IP Code"), defines what constitutes trademark infringement, to wit:

"Sec. 155. Remedies; Infringement. - Any person who shall, without the consent of the owner of the registered mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth: Provided, That infringement takes place at the moment any of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether there is actual sale of goods or services using the infringing material."

Succinctly, the elements of infringement under the IP Code are as follows:

(1) The trademark being infringed is registered in the Intellectual Property Office; however, in infringement of trade name, the same need not be registered;

(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer;

(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or the infringing mark or trade name is applied to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services;

(4) The use or application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive purchasers or others as to the goods

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or services themselves or as to the source or origin of such goods or services or the identity of such business; and

(5) It is without the consent of the trademark or trade name owner or the assignee thereof."

This Bureau will discuss each and every element.

For a trademark infringement case to prosper, it is indispensable that the Complainant has registered its mark. In this case, it is undisputed that the Complainant has registered the mark "ZEUS HOME 'Your Choice' AND DEVICE" and secured Certificate of Registration No. 4-2010-010368 issued on 10 March 2011. Also, it is required that the infringed mark is used in connection with the sale, offering for sale, or advertising of any goods, business or services. The Complainant presented evidence of the purchased products bearing the subject mark from different locations of City SquareTrader stores. These purchased items are proof the mark "ZEUS HOME 'Your Choice' AI\ID DEVICE" is being used on different kinds of appliances being sold at City Square Trader stores. In addition, it is mandatory that the use or application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive purchasers or others as to the goods or services themselves or as to the source or origin of such goods or services or the identity of such business. Perusing the purchased items by from the City Traders stores, they clearly bear the trademark "ZEUS HOME 'Your Choice' AND DEVICE", which is identical to the Complainant's registered mark. Thus, the purchasers will have every reason to believe that these products are sourced from or sponsored by the the Complainant. Therefore, the first, third and fourth elements are present.

However, as regards the second element, the Complainant failed to prove the same. Jurisprudence requires that the trademark is reproduced, counterfeited, copied, or colorably imitated by the infringer. The Complainant failed to adduce evidence that these products sold in the Respondent's stores are merely reproduction, counterfeit, copy and/or colorable imitation. When asked why he said that the products sold by the Respondent are counterfeit, the Complainant's Witness, Mr. Joy Pluma, answered in this wise:"

"Q32: You mentioned that the products/items that Mr. Rolando J. Ang is offering for sale, selling and distributing using the same mark ZEUS HOME 'Your Choice' and device and riding on the qoodwlll and popularity of the trademark SEUS HOME 'Your Choice', a trademark owned by the partnership are counterfeit products are not the actual products/items being sold by your partnership bearing the trademark ZEUS HOME 'Your Choice'. Why do you say that the products/items that Mr. Rolando J. Ang is using the goodwill and popularity of the trademark ZEUS HOME 'Your Choice' are counterfeit products?

4 Prosource International, Inc. vs. Horphag Research Management SA, G.R. No. 180073, 23 November 2009. 5 Exhibit "D", p. 11.

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A32: Because we know the stores where we supply our products bearing the trademark ZEUS HOME 'Your Choice' and Device and as a partner it is easy for me to determine whether or not City Square Trader is one of our business partners/establishments where we sell our products because we sell our products to the following stores x x x"

Complainant's other witness, Ms. Josephine Acabado, testified as follows:"

"Q29: How did you know that the products being sold or offered for sale in City SquareTrader did not come from you?

A29: Because we only supply or products in the following stores: x x x"

Aside from the Complainant's allegation that it supplies its products to certain Gaisano branches, no other proof was presented to show that the products purchased from the Respondent's stores are counterfeit, reproductions or colorable imitations. This is crucial considering that the Complainant, while it is the brand owner, does not manufacture the goods itself but sources the same from another company, that is, Techstrong Corporation. In turn, Techstrong Corporation delivers the goods to another entity, Germani Trading. The Complainant in fact admits that it does not manufacture the "ZEUS HOIV1E 'Your Choice' ANDDEVICE" itself. 7

Moreover, assuming in arguendo that the goods sold by the Respondent in its store are counterfeit, reproductions or colorable imitations of the Complainant's registered mark, the latter failed to allege, much more prove, that the former is the one who copied, reproduced or colorably imitated its mark. It was established that Respondent does not produce or manufacture any of the goods sold in his stores but merely sources the same from other entities. No proof was presented that the Respondent produced the alleged infringing goods and/or mark or caused the production thereof. Instead, the Respondent proved through the delivery receipts" issued by Germani Trading for various products, lncludtnq that bearing "ZEUS HOME 'Your Choice' AND DEVICE", that he is not the one which produced the said products. Based on the foregoing, it appears that he is merely a wholesale purchaser of the goods to be sold in his stores.

Anent the last requirement, which is the Complainant's lack of consent, the same was refuted by evidence. The Complainant laments that the Respondent is selling products bearing its registered trademark without its authority. The latter, on the other hand, does not deny that it sells "ZEUS HOIV1E 'Your Choice' AND DEVICE" products in his stores. He contends, however, that he is just an innocent purchaser of products bearing different brands, including "ZEUS HOrvlE 'Your Choice' AND

6 Exhibit "W , p. 8. 7 Exhibit "H", p. 6. 8 Exhibits "2" to "3", inclusive.

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DEVICE" appliances, from a certain Germani Trading. Allegedly, this Germani Trading procures the goods from a manufacturer, Techstrong Corporation, which was also the Complainant's manufacturer from the early part of 2012 to 2013.9

Aside from the Complainant's bare allegation that it did not give its consent to the transaction, there are pieces of evidences pointing to the Complainant's connection with Germani Trading. The Respondent showed that he had reasons to believe that Germani Trading may distribute or sell products bearing the subject mark. The Respondent's witness, Azenith C. Mendoza, testified in this wise:"

"ATTY. AQUINO: You also said in your Judicial Affidavit the delivery of sales product were within the instruction of Amalgam Trading?

MS. wrrNESS: Yes, Sir.

ATTY. AQUINO: Do you have proof of that?

MS. wrrNESS: The delivery fee."

To corroborate the testimony, cash vouchers "paid to Maam Jho/Slr Joy PlumajAmalgam" were presented." Noteworthy, in a letter dated 14 February 2013 to the Bureau of Product Standards, Department of Trade and Industry from Josephine Acabado, one of the partners of the Complainant company, she wrote that: 12

"We wish to inform your good office that in February 2012 we negotiated with Techstrong Corp. with office located at 328 Playa St., Balut, Tondo, Manila. Our negotiation with Techstrong Corp. is that they will manufacture our appliance with brand name Zeus Home through a middle man named Willy Ang of Germani Trading with office address at x x x" (Emphasis supplied.)

All told, based on the requisites laid down by governing laws as well as those recognized by jurisprudence, this Bureau concludes that the Complainant failed to prove by substantial evidence that the Respondent is liable for trademark infringement. Consequently, he cannot be held liable to damages.

As to the issue of unfair competition, Section 168 of R.A. No. 8293, also known as the Intellectual Property Code of the Philippines, as amended, ("IP Code'') provides:

"Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A person who has identified in the mind of the public the goods he manufactures or deals in, his

9 TSN, Cross Examination of Josephine Acabado, 23 July 2015, pp. 8-10. 10 TSI'l, 19 May2016, p. 8. 11 Exhibits "5" and "5-B". 12 Exhibit "T'.

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business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights.

168.2. Any person who shall 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 qoodwlll, 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.

168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the followinq shall be deemed gUilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.

168.4. The remedies provided by Sections 156, 157 and 161 shall apply mutatis mutandis."

The essential elements of unfair competition are the followlnq: (1) confusing similarity in the general appearance of the goods; and, (2) intent to deceive the public and defraud a competitor. The confusing similarity mayor may not result from similarity in the marks, but may result from other external factors in the packaging or presentation of the goods. The intent to deceive and defraud may be inferred from the similarity of the appearance of the goods as offered for sale to the public. Actual fraudulent intent need not be shown."

The goods purchased from the Respondent's stores are all branded with the mark "ZEUS HOrvlE 'Your Choice' AND DEVICE", giving the products the same appearance as that of the Complainant's products. Thus, the first element of unfair competition is present.

13 In-N-Out Burger, Inc. VS. Sehwani, Inc., G.R. No. 179127,24 December 2008.

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As to the second element, however, the Complainant failed to substantially establish fraud or intent to deceive on the part of the Respondent. According to jurisprudence, the same is the "true test" of unfair competition; that is whether the acts of the defendant have the intent of deceiving or are calculated to deceive the ordinary buyer making his purchases under the ordinary conditions of the particular trade to which the controversy relates. One of the essential requisites in an action to restrain unfair competition is proof of fraud, the intent to deceive, actual or probable must be shown before the right to recover can exist."

There is scant evidence, if at all, of the Respondent's bad faith. As previously discussed, the Respondent merely bought its supplies from a certain Germani Trading. It was not shown that he appropriated the registered trademark as his own. In fact, the Complainant's name is on the labels of the products purchased by its witnesses, negating any intention of the Respondent to pass off the questioned products as his own. Taken together, the evidences prove that there is no intent to deceive or bad faith on the part of the Respondent.

In administrative cases, the quantum of proof required is substantial evidence. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise. is The burden of proof rests on the shoulder of the Complainant. In this case, it failed to discharge its burden.

WHEREFORE, the instant Complaint is hereby DISMISSED. No cost.

SO ORDERED.

Taguig City, T(f rt:.B 10-'--'"

ATTY.NAT~NIELS.AREVALO j2;;ector IV

Bureau of Legal Affairs

14 Superior Commercial Enterprise, Inc. vs. Kunnan Enterprise Ltd., .R. No. 169974, 20 April 2010. 15 Primo C. Mira vs. Marilyn Mendoza Vda. De Erederos, G.R. No. 172532, 172544-55, 20 November 2013.

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