LEVITON INDUSTRIES, NENA DE LA CRUZ LIM,
DOMINGO GO, and LIM KIAT, petitioners,
vs.
HON. SERAFIN SALVADOR, Judge, Court of First
Instance of Rizal, Caloocan City, Branch XIV and
LEVITON MANUFACTURING CO., INC., respondents.
G.R. No. L-40163 June 19, 1982 ESCOLIN, J:
Doctrine: The legal capacity of a foreign corporation
must be alleged in order to maintain a suit for unfair
competition under Section 21-A of Republic Act No. 1661, as
amended, otherwise known as the Trademark Law
Facts:
April 17, 1973 - Leviton Mfg. (MFG) filed a complaint for
unfair competition against Leviton Industries et al. (IND) with
CFI Rizal. The complaint alleged that:
MFG is a foreign corp under New York laws
founded in 1906 by Isidor Leviton. MFG is the
largest manufacturer of electrical wiring devices in
the US, under the trademark Leviton and
tradename Leviton Manufacturing Co. Its products
were exported to the PH since 1954.
IND is a partnership under PH laws with Nena Lim,
Domingo Go and Lim Kiat as partners. IND began
manufacturing and selling electrical ballast, fuse
and oval buzzer under the trademark Leviton and
trade name Leviton Industries Co. and registered
with the PH Patent Office (PPO) the trademarks
Leviton Label and Leviton with respect to ballast
and fuse under Certificate of Registration Nos. SR-
1132 and 15517.
Such registration is contrary to paragraphs (d) and
(e) of Section 4 of RA 1662, as amended; violates
their right over the trademark Leviton; that IND
used and copied the design distinguishing its
trademark; and that the use thereof would cause
confusion in the minds of the consumers and likely
to deceive them as to the source of origin.
IND filed two motions to dismiss, the first citing MFGs failure
to allege its capacity to sue, and the second is based on the
1
Sec. 21-A. Any foreign corporation or juristic person to which a
mark or tradename has been registered or assigned under this Act may
bring an action hereunder for infringement, for unfair competition, or
false designation of origin and false description, whether or not it has
been licensed to do business in the Philippines under Act numbered
Fourteen Hundred and Fifty-Nine, as amended, otherwise known as the
Corporation Law, at the time it brings the complaint; Provided, That the
country of which the said foreign corporation or juristic person is a
citizen, or in which it is domiciled, by treaty, convention or law, grants a
similar privilege to corporate or juristic persons of the Philippines.
(As amended by R.A. No. 638)
2
Section 4. Registration of trade-marks, trade-names and service-
marks on the principal register. - There is hereby established a
register of trade-mark, trade-names and service-marks which shall be
known as the principal register. The owner of a trade-mark, a trade-
name or service-mark used to distinguish his goods, business or
services from the goods, business or services of others shall have the
right to register the same on the principal register, unless it:
admission of MFG that it does not manufacture ballasts; that
it has not registered its trademark in the PPO, but has filed
with the same office an application of its trade mark on April
16, 1971; and that it has no license to do business in the
Philippines. CFI denied both motions.
Hence, this petition for certiorari and prohibition.
Issue:
WON alleging capacity to sue is essential - YES
Ratio:
Under RA 166 Sec. 21-A, foreign corporations, whether or
not licensed to do business in the PH, has the right to sue for
unfair competition, if the ff. concur:
It has a registered trademark with the PPO OR it is
an assignee of such registered trademark
The country of citizenship or domiciliary grants the
same reciprocal treatment to PH corps, either thru
treaty, convention or law.
The complaint merely alleges that MFG is a foreign corp. It
does not allege its capacity to sue. As held in Atlantic Mutual
Insurance Co., et al. versus Cebu Stevedoring Co., Inc. -
these are matters peculiarly within the
knowledge of appellants alone, and it would
be unfair to impose upon appellees the
burden of asserting and proving the
contrary. It is enough that foreign
corporations are allowed by law to seek
redress in our courts under certain
conditions: the interpretation of the law
should not go so far as to include, in effect,
an inference that those conditions had
been met from the mere fact that the party
sued is a foreign corporation.
It was indeed in the light of this and other
considerations that this Court has seen fit
to amend the former rule by requiring in the
revised rules (Section 4, Rule 8) that "facts
showing the capacity of a party to sue or be
(d) Consists of or comprises a mark or trade-name which so
resembles a mark or trade-name registered in the Philippines
or a mark or trade-name previously used in the Philippines by
another and not abandoned, as to be likely, when applied to
or used in connection with the goods, business or services of
the applicant, to cause confusion or mistake or to deceive
purchasers; or
(e) Consists of a mark or trade-name which, when applied to
or used in connection with the goods, business or services of
the applicant is merely descriptive or deceptively
misdescriptive of them, or when applied to or used in
connection with the goods, business or services of the
applicant is primarily geographically descriptive or deceptively
misdescriptive of them, or is primarily merely a surname;
 sued or the authority of a party to sue or be
sued in a representative capacity or the
legal existence of an organized association
of persons that is made a party, must be
averred,
Held:
Petition is granted.
062 Puma v IAC
Feb. 26, 1988
Gutierrez Jr, J.
Short Version:
Puma sued Mil-oro for trademark infringement, as the latter
had been producing Puma socks and belts. MTD filed for
lack of capacity to sue. Denied and injunction issued.
SC upheld injunction. Puma had capacity to sue. A foreign
corporation not doing business in the Philippines which is a
national of a country party to the Paris Convention need not
have a license in order to sue to protect its intellectual
property.
Facts:
Puma, a West German Corporation and producer of Puma
products, filed a complaint for patent or trademark
infringement with a prayer for the issuance of a writ of prelim
injunction against Mil-Oro Manufacturing Corp. Mil-Oro had
been producing Puma socks and belts.
MTD filed for lack of capacity to sue. MTD denied, injunction
granted. CA reversed. Hence this petition for review on
certiorari.
Issues:
1. WON Puma has capacity to sue (Yes)
2. WON the case should be dismissed on the ground
of lis pendens (No)
3. WON injunction should issue. (Yes)
Ratio:
1. Puma had substantially complied with Sec. 21-A of
RA 166. Its complaint specifically alleged that it is
not doing business in the Philippines and is suing
under that law, which provides that "the country of
which the said corporation or juristic person is a
citizen, or in which it is domiciled, by treaty,
convention or law, grants a similar privilege to
corporate or juristic persons of the Philippines." The
Federal Republic of Germany and the Philippines
are both parties of the Paris Convention, which
forms part of the law of the land.
As held in La Chemise Lacoste, S.A .v. Fernandez,, a
foreign corporation not doing business in the Philippines
needs no license to sue before Philippine courts for
infringement of trademark and unfair competition.
Further, a foreign corporation which has never done any
business in the Philippines and which is unlicensed and
unregistered to do business here, but is widely and favorably
known in the Philippines through the use therein of its
products bearing its corporate and tradename, has a legal
right to maintain an action in the Philippines to restrain the
residents and inhabitants thereof from organizing a
corporation therein bearing the same name as the foreign
corporation, when it appears that they have personal
knowledge of the existence of such a foreign corporation,
and it is apparent that the purpose of the proposed domestic
corporation is to deal and trade in the same goods as those
of the foreign corporation.
This is in accordance with Section 37 of RA No. 166,
otherwise known as the trademark Law, which provides that
Persons who are nationals of, domiciled in, or have a bona
fide or effective business or commercial establishment in any
foreign country, which is a party to an international
convention or treaty relating to marks or tradenames on the
represssion of unfair competition to which the Philippines
may be party, shall be entitled to the benefits and subject to
the provisions of this Act ...
Tradenames of persons described in the first paragraph of
this section shall be protected without the obligation of filing
or registration whether or not they form part of marks.
Thus, Puma had the legal capacity to file the action.
2. There was no lis pendens. The civil action filed was
different from the administrative action filed. For a
finding of lis pendens, the other case pending
between the same parties and having the same
cause must be a court action. Thus, the Court of
Appeals likewise erred in holding that the requisites
of lis pendens were present so as to justify the
dismissal of the case below.
3. Mil-oro intentionally refused to present counter-
evidence against the issuance of the writ. Thus, the
court reiterated its guidance to lower courts and
administrative agencies found in Lacoste:
One final point. It is essential that we stress our concern
at the seeming inability of law enforcement officials to
stem the tide of fake and counterfeit consumer items
flooding the Philippine market or exported abroad from
our country. The greater victim is not so much the
manufacturer whose product is being faked but the
Filipino consuming public and in the case of
exportations, our image abroad. No less than the
President, in issuing Executive Order No. 913 dated
October 7, 1983 to strengthen the powers of the Minister
of Trade and Industry for the protection of consumers,
stated that, among other acts, the dumping of
substandard, imitated, hazardous, and cheap goods, the
infringement of internationally known tradenames and
trademarks, and the unfair trade Practices of business
firms have reached such proportions as to constitute
economic sabotage. We buy a kitchen appliance, a
household tool, perfume, face powder, other toilet
articles, watches, brandy or whisky, and items of clothing
like jeans, T-shirts, neckties, etc. the list is quite
 lengthy pay good money relying on the brand name
as guarantee of its quality and genuine nature only to
explode in bitter frustration and helpless anger because
the purchased item turns out to be a shoddy imitation,
albeit a clever looking counterfeit, of the quality product.
Judges all over the country are well advised to
remember that court processes should not be used as
instruments to, unwittingly or otherwise, aid
counterfeiters and intellectual pirates, tie the hands of
the law as it seeks to protect the Filipino consuming
public and frustrate executive and administrative
implementation of solemn commitments pursuant to
international conventions and treaties.
CA reversed and set aside.
La Chemise Lacoste v. Fernandez
G.R. No. L-63796-97; May 2, 1984; Gutierrez, Jr., J.
I. Facts
1. La Chemise Lacoste (Lacoste) - a foreign corporation,
organized under the laws of France and not doing
business in the Philippines. It is the actual owner of
the trademarks "LACOSTE", "CHEMISE LACOSTE",
"CROCODILE DEVICE" and a composite mark
consisting of the word "LACOSTE" and a representation
of a crocodile/alligator.
2. Hemandas & Co., a duly licensed domestic firm, applied
for the trademark "CHEMISE LACOSTE & CROCODILE
DEVICE" for use on T-shirts, sportswear and other
garment products with the Philippine Patent Office under
the Supplemental Register (1975) and the Principal
Register (1977).
3. Hemandas & Co. assigned to Respondent Gobindram
Hemandas all rights, title, and interest in the trademark
"CHEMISE LACOSTE & DEVICE".
4. In 1980, Lacoste filed its application for registration of
the trademark "Crocodile Device and "Lacoste."
5. In 1983, Lacoste filed with the NBI a letter-complaint
alleging therein the acts of unfair competition being
committed by Hemandas. The NBI conducted an
investigation and subsequently filed two applications for
the issuance of search warrants which would authorize
the search of the premises used and occupied by the
Lacoste Sports Center and Games and Garments both
owned and operated by Hemandas.
6. The RTC issued two Search Warrants for violation of
Article 189 of the RPC. The NBI agents executed the two
search warrants and seized various goods and articles
described in the warrants.
7. Hemandas filed a motion to quash the search warrants
alleging that the trademark used by him was different
from Lacoste's trademark.
8. In its Opposition, Lacoste argued that that the motion to
quash was fatally defective as it cited no valid ground for
3
Sec. 21 A. Any foreign corporation or juristic person to which a mark
or tradename has been registered or assigned under this Act may bring
an action hereunder for infringement, for unfair competition, or false
designation of origin and false description, whether or not it has been
licensed to do business in the Philippines under Act numbered Fourteen
the quashal of the search warrants and that the grounds
alleged in the motion were without merit. The State
Prosecutor likewise filed his opposition on the grounds
that the goods seized were instrument of a crime and
necessary for the resolution of the case on preliminary
investigation and that the release of the said goods
would be fatal to the case of the People should
prosecution follow in court.
9. RTC There was no probable cause to justify the
issuance of the search warrants. The search warrants
were recalled and the NBI agents in custody of the
seized items were ordered to return the same to
Hemandas. Aggrieved, Lacoste filed a petition for
certiorari with the SC.
10. Hemandas arguments:
a. [Comment on Petition for Certiorari] Lacoste,
being a foreign corporation, failed to allege
essential facts bearing upon its capacity to sue
before Philippine courts. Lacoste is not doing
business in the Philippines and it is also is not
licensed to do business in the Philippines. He
cites the case of Leviton Industries v. Salvador
to support his contention.
b. [Brief] Lacoste was doing business in the
Philippines but was not licensed to do so. The
applicable ruling is Mentholatum Co., Inc. v.
Mangaliman, where Mentholatum, a foreign
corporation and Philippine-American Drug Co.,
the former's exclusive distributing agent in the
Philippines filed a complaint for infringement of
trademark and unfair competition against the
Mangalimans.
II. Issues/Held
1. Whether or not petitioner has capacity to sue in
Phillippine Courts Yes
2. Whether or not the RTC committed grave abuse of
discretion in issuing the order to return the seized items
- Yes
III. Ratio
Whether or not petitioner has capacity to sue in Phillippine
Courts Yes
The Leviton case does not apply
It was not enough for Leviton, a foreign corporation
organized under the laws of New York, to merely allege
that it is a foreign corporation. In its complaint, it averred
that its action was being filed under the Section 21-A of
RA166.3 However, Leviton did not comply with the
requirements imposed by the provision. A foreign
corporation may have the right to sue before Philippine
courts, but the rules on pleadings require that the
qualifying circumstances necessary for the assertion of
such right should first be affirmatively pleaded.
Hundred and Fifty-Nine, as amended, otherwise known as the
Corporation Law, at the time it brings the complaint; Provided, That the
country of which the said foreign corporation or juristic person is a
citizen, or in which it is domiciled, by treaty, convention or law, grants a
similar privilege to corporate or juristic persons of the Philippines.
 In contradistinction, the present case involves a
complaint for violation of Article 189 of the RPC
The Mentholatum case does not apply
Philippine-American Drug Co., Inc., was admittedly
selling products of its principal, Mentholatum, in the
latter's name or for the latter's account. Thus, this Court
held that "whatever transactions the Philippine-
American Drug Co., Inc. had executed in view of the law,
the Mentholatum Co., Inc., did it itself. And, the
Mentholatum Co., Inc., being a foreign corporation doing
business in the Philippines without the license required
by Section 68 of the Corporation Law, it may not
prosecute this action for violation of trademark and unfair
competition."
In the present case, the petitioner is a foreign
corporation not doing business in the Philippines. The
marketing of its products in the Philippines is done
through an exclusive distributor, Rustan Commercial
Corporation. The latter is an independent entity which
buys and then markets not only products of the petitioner
but also many other products bearing equally well-
known and established trademarks and tradenames. In
other words, Rustan is not a mere agent or conduit of
the petitioner.
Lacoste is not doing business in the Philippines
Under Rule I, Sec. 1 (g) of the rules and regulations of
the Board of Investments, doing business includes a
foreign firm which does business through middlemen
acting on their own names (1) and appointing a
representative or distributor who is domiciled in the
Philippines, unless said representative or distributor has
an independent status, i.e., it transacts business in its
name and for its account, and not in the name or for the
account of a principal. Thus, where a foreign firm is
represented by a person or local company which does
not act in its name but in the name of the foreign firm the
latter is doing business in the Philippines (2).
Applying this provision, Lacoste is not doing business in
the Philippines. Rustan is actually a middleman acting
and transacting business in its own name and or its own
account and not in the name or for the account of the
petitioner.
Even assuming that Lacoste failed to allege material
facts in its petition relative to capacity to sue, the Lacoste
may still maintain the present suit because as early as
1927, the SC of the view that a foreign corporation not
doing business in the Philippines needs no license
to sue before Philippine courts for infringement of
trademark and unfair competition.
o A foreign corporation which has never done any
business in the Philippines and which is
unlicensed and unregistered to do business
here, but is widely and favorably known in the
Philippines through the use therein of its
products bearing its corporate and tradename,
has a legal right to maintain an action in the
Philippines to restrain the residents and
inhabitants thereof from organizing a
corporation therein bearing the same name as
the foreign corporation, when it appears that
they have personal knowledge of the existence
of such a foreign corporation, and it is apparent
that the purpose of the proposed domestic
corporation is to deal and trade in the same
goods as those of the foreign corporation.
(Western Equipment and Supply Co. v. Reyes)
More important is the nature of the case which led to this
petition a letter-complaint filed before the NBI charging
-Hemandas with a criminal offense. Should an
information be filed, it shall be in the name of the People
of the Philippines and no longer the petitioner which is
only an aggrieved party since a criminal offense is
essentially an act against the State. It is the latter which
is principally the injured party although there is a private
right violated. Petitioner's capacity to sue would become,
therefore, of not much significance in the main case.
Recognition of Right and Duties under Paris Convention
for the Protection of Industrial Property
Both the Philippines and France are parties to this
convention.
The underlying principle is that foreign nationals should
be given the same treatment in each of the member
countries as that country makes available to its own
citizens.
The Ministry of Trade issued a memorandum to the
Director of the Patents Office directing the latter to reject
all pending applications for Philippine registration of
signature and other world famous trademarks by
applicants other than its original owners or users. The
memorandum is a clear manifestation of our avowed
adherence to a policy of cooperation and amity with all
nations.
Whether or not the RTC committed grave abuse of
discretion in issuing the order to return the seized items
- Yes
The grounds invoked by Hemandas in his motion to
quash the search warrants are not appropriate for
quashing a warrant. They are matters of defense which
should be ventilated during the trial on the merits of the
case.
Probable Cause
The RTC complied with the constitutional and statutory
requirements for the issuance of a valid search warrant.
At that point in time, it was fully convinced that there
existed probable cause. But after hearing the motion to
quash and the oppositions thereto, the RTC executed a
complete turnabout and declared that there was no
probable cause to justify its earlier issuance of the
warrants.
o The NBI agents at the hearing of the application
for the warrants before RTC presented three
witnesses under oath, sworn statements, and
various exhibits in the form of clothing apparels
 manufactured by Hemandas but carrying the
trademark Lacoste.
o The RTC personally interrogated the witnesses
by means of searching questions. After hearing
the testimonies and examining the
documentary evidence, the RTC was convinced
that there were good and sufficient reasons for
the issuance of the warrant. And it then issued
the warrant.
Supplemental Register
Hemandas relied heavily below and before us on the
argument that it is the holder of a certificate of
registration of the trademark "CHEMISE LACOSTE &
CROCODILE DEVICE". Significantly, such registration
is only in the Supplemental Register.
A certificate of registration in the Supplemental Register
is not prima facie evidence of the validity of
registration, of the registrant's exclusive right to use the
same in connection with the goods, business, or
services specified in the certificate.
The registration of a mark upon the supplemental
register is not, as in the case of the principal register,
prima facie evidence of (1) the validity of registration; (2)
registrant's ownership of the mark; and (3) registrant's
exclusive right to use the mark. It is not subject to
opposition, although it may be cancelled after its
issuance.
Registration in the Supplemental Register serves as
notice that the registrant is using or has appro-priated
the trademark. By the very fact that the trademark
cannot as yet be entered in the Principal Register, all
who deal with it should be on guard that there are certain
defects, some obstacles which the user must still
overcome before he can claim legal ownership of the
mark or ask the courts to vindicate his claims of an
exclusive right to the use of the same
Purpose of the Law protecting a trademark
They are to point out distinctly the origin or ownership of
the article to which it is affixed, to secure to him, who has
been instrumental in bringing into market a superior
article of merchandise, the fruit of his industry and skill,
and to prevent fraud and imposition
The legislature has enacted laws to regulate the use of
trademarks and provide for the protection thereof.
Modern trade and commerce demands that
depredations on legitimate trade marks of non-nationals
including those who have not shown prior registration
thereof should not be countenanced. The law against
such depredations is not only for the protection of the
owner of the trademark but also, and more importantly,
for the protection of purchasers from confusion, mistake,
or deception as to the goods they are buying.
The law on trademarks and tradenames is based on the
principle of business integrity and common justice. This
law, both in letter and spirit, is laid upon the premise that,
while it encourages fair trade in every way and aims to
foster, and not to hamper, competition, no one,
especially a trader, is justified in damaging or
jeopardizing another's business by fraud, deceipt,
trickery or unfair methods of any sort. This necessarily
precludes the trading by one dealer upon the good name
and reputation built up by another.
The goodwill and reputation of the Lacoste's products
bearing the trademark LACOSTE date back even before
1964 when LACOSTE clothing apparels were first
marketed in the Philippines. To allow Hemandas to
continue using the trademark Lacoste for the simple
reason that he was the first registrant in the
Supplemental Register of a trademark used in
international commerce and not belonging to him is to
render nugatory the very essence of the law on
trademarks and tradenames.
ROMERO V MAIDEN FORM & DIR OF PATENTS
March 31, 1964
Barrera, J.
FACTS:
1957: Maiden Form, a foreign company, filed an application
for registration of the mark Adagio for the bras it
manufactures. Said trademark was first used by it in the
United States on October 26, 1937, and in the Philippines on
August 31, 1946; that it had been continuously used by it in
trade in, or with the Philippines for over 10 years; that said
trademark "is on the date of this application, actually used by
respondent company on the following goods.
Director of Patents: granted the application
1958: Romero filed a petition to cancel Maiden Forms
registration:
- The trademark "Adagio" has become a common
descriptive name of a particular style of brassiere and is,
therefore, unregistrable.
- said mark has been used by local brassiere manufacturers
since 1948, without objection on the part of respondent
company
- Maiden form is guilty of its non-use for a number of years
ISSUE/HELD: WON the registration in favor of Maiden
Form should be canceled. NO
Ruling: IN VIEW OF ALL THE FOREGOING, we are of the
opinion and so hold, that respondent Director of Patents
did not err in dismissing the present petition for
cancellation of the registered trademark of appellee
company, and the decision appealed from is therefore
hereby affirmed, with costs against the appellant. So
ordered.
1. Term adagio is not a common descriptive name for
brasseries
The word adagio is a musical term (slowly, easy manner).
The owners of Maiden form use other musical terms to name
their bra styles. (such as "Etude", "Chansonette" , "Prelude"
,"Over-ture", and "Concerto").The use of such words is used
in an arbitrary, fanciful sense. (case does not explain but:
arbitrary = literal meaning of word is different from what it
refers to. as in here, musical terms are used for brasseries).
2. Madien Form protested against the unathorized use of
adagio by manufacturers in the Philippines
It caused an ad to be published in the Manila Times warning
the public to desist from using the term Adagio for non-
Maiden form goods. Mr. Schwartz, warned the Valleson
Department Store to desist from the sale of the "Adagio"
Royal Form brassieres manufactured by petitioner , and
even placed an advertisement in the local newspapers
(Manila Daily Bulletin, Manila Times, Fookien Times, and
others) warning the public against unlawful use of said
trademark. The advertisement in the Manila Times made by
respondent company on February 9, 1958, was brought to
petitioner's attention, which must have prompted him to file
this present petition for cancellation, on February 26, 1958.
3. Non-use by Maidenform of the term was not voluntary;
not abandonment
The evidence record shows that the trademark "Adagio" was
first exclusively in the Philippines by Maiden Form in the year
1932. There being no evidence of use of the mark by others
before 1932, or that Maidenform abandoned use thereof, the
registration of the mark was made in accordance with the
Trademark Law. Granting that appellant used the mark when
appellee stopped using it during the period of time that the
Government imposed restrictions on importation of
respondent's brassiere bearing the trademark, such
temporary non-use did not affect the rights of appellee
because it was occasioned by government restrictions and
was not permanent, intentional, and voluntary.
To work an abandonment, the disuse must be permanent
and not ephemeral; it must be intentional and voluntary, and
not involuntary or even compulsory
TO further illustrate, Court cited the non-use of its
trademarks by alcohol companies during Prohibition. This
non-use =/= abandonment because they were forced to not
use it because of law.
Philippine Nut Industry Inc. v Standard Brands
Incorporated
G.R. No. L-23035 || July 31, 1975 || Munoz-Palma, J.
Digest by: Norly
Facts:
1. Philippine Nut (PN), a domestic corporation,
obtained from the Patent Office on August 10, 1961,
Certificate of Registration No. SR-416 covering the
trademark "PHILIPPINE PLANTERS CORDIAL
PEANUTS," the label used on its product of salted
peanuts.
2. On May 14, 1962, Standard Brands (SB) a foreign
corporation, filed with the Director of Patents Inter
Partes Case No. 268 asking for the cancellation of
Philippine Nut's certificate of registration.
a. Ground: Confusing similarity - SB is the
owner of the trademark "PLANTERS
COCKTAIL PEANUTS" covered by
Certificate of Registration No. SR- 172
(also for salted peanuts), issued by the
Patent Office on July 28, 1958.
3. Director of Patents rendered the Decision ordering
the cancellation of PN's Certificate of Registration.
a. Ground: Confusing similarity - the dominant
part is the word "Planters", displayed "in a
very similar manner"
Issue:
1. WON the trademark "PHILIPPINE PLANTERS
CORDIAL PEANUTS" used by PN is confusingly
similar to the trademark "PLANTERS COCKTAIL
PEANUTS" used by SB - YES
Held: Decision of Director of Patents affirmed.
Ratio:
1. Rule: Trademark Law (RA 166)
a. Sec. 4. Registration of trade-marks, trade-
names and service-marks on the principal
register. xxx The owner of a trade-mark
xxx shall have the right to register the same
on the principal register, unless it: xxx (d)
Consists of or comprises a mark or trade-
name which so resembles a mark or
tradename registered in the Philippines or
a mark or trade-name previously used in
the Philippines by another and not
abandoned, as to be likely, when applied to
or used in connection with the goods,
business or services of the applicant, to
cause confusion or mistake or to deceive
purchasers;
2. Doctrine: There is infringement of trademark when
the use of the mark involved would be likely to
cause confusion or mistake in the mind of the
public or to deceive purchasers as to the origin or
source of the commodity.
a. "test of dominancy" - if the competing
trademark contains the main or essential or
dominant features of another by reason of
which confusion and deception are likely to
result, then infringement takes pIace; that
duplication or imitation is not necessary, a
similarity in the dominant features of the
trademarks would be sufficient
3. As applied:
a. The word 'PLANTERS' is the dominant
feature.
i. While it is true that PLANTERS is
an ordinary word, nevertheless it is
used in the labels not to describe
the nature of the product, but to
project the source or origin of the
salted peanuts contained in the
cans.
ii. The word PLANTERS printed
across the upper portion of the
label in bold letters easily attracts
and catches the eye of the
ordinary consumer and it is that
word and none other that sticks in
his mind when he thinks of salted
peanuts.
iii. In fact, when a housewife sends
her housemaid to the market to
buy canned salted peanuts, she
will describe the brand she wants
by using the word PLANTERS and
not "Cordial" nor "Cocktail"
 b. Director of Patents considered the
overall look of the label, not just the use
of the word 'PLANTERS'
i. Director's decision is based not
only on the fact that PN adopted
the same dominant mark of SB,
but that it also used in its label the
same coloring scheme of gold,
blue, and white, and basically the
same lay-out of words such as
"salted peanuts" and "vacuum
packed" with similar type and
size of lettering as appearing in
SB' own trademark, all of which
result in a confusing similarity
between the two labels
ii. Admittedly, no producer or
manufacturer may have a occupation and was discontinued
monopoly of any color scheme or
form of words in a label. But when
a competitor adopts a distinctive or
dominant mark or feature of
another's trademark and with it
makes use of the same color
ensemble, employs similar words
written in a style, type and size of
lettering almost identical with
those found in the other
trademark, the intent to pass to the
public his product as that of the
other is quite obvious.
c. The differences between the two labels
pointed out by PN are insignificant [e.g.
the word "Philippines" and the "Mr.
Peanut" on top of tin can].
i. They are not sufficient to call the
attention of the ordinary buyer that
the labeled cans come from
distinct and separate sources4.
ii. The merchandize or goods being
sold by the parties herein are very
ordinary commodities purchased
by the average person and many
times by the ignorant and
unlettered and these are the
persons who will not as a rule
examine the printed small
letterings on the container.
d. The word "PLANTERS" has acquired
secondary meaning.
i. Doctrine of secondary meaning: a
word or phrase originally
incapable of exclusive
appropriation with reference to an
article on the market, because
geographically or otherwise
descriptive, might nevertheless
4
The word "Philippine" printed in small type in PN's label may simply
give to the purchaser the impression that that particular can of
PLANTERS salted peanuts is locally produced or canned but that what
he is buying is still PLANTERS canned salted peanuts and nothing else.
As regards "Mr. Peanut" on SB's label, the same appears
on the top cover and is not visible when the cans are displayed on the
shelves, aside from the fact that the figure of "Mr. Peanut" is printed on
have been used so long and so
exclusively by one producer with
reference to his article that, in that
trade and to that branch of the
purchasing public, the word or
phrase has come to mean that the
article was his product
ii. The word PLANTERS has been
used by and closely associated
with SB for its canned salted
peanuts since 1938 in this country
[stipulated fact and established by
testimonial and documentary
evidence.
iii. The fact that SB's use of the
trademark PLANTERS was
interrupted during the Japanese
when the importation of peanuts
was prohibited by Central Bank
cannot be construed as
abandonment of trademark. The
non-use of a trademark on an
article of merchandize due to legal
restrictions or circumstances
beyond one's control is not to be
considered as an abandonment.
Anchor Trading v. Director of Patents and Kua Lian Ham
G.R. No. L-8004; 30 May 1956; Bautista Angelo, J.
Digest prepared by: Dianne Cadorna
I. Facts
1. Petitioner filed an application for registration of
trademark with the Director of Patents.
2. The Director of Patents granted the same and
issued Certificate of Registration No. 3739.
3. However, upon private respondents opposition,
which was done belatedly, the Director of Patents
ordered the cancellation of the above Certificate of
Registration.
4. Thus, petitioner instituted the instant appeal.
ii. Issue
WON failure of private respondent to register his opposition
to petitioners petition for registration in due time should have
estopped him from asking for cancellation of such
registration NO.
the tin cover which is thrown away after opening the can, leaving no
lasting impression on the consumer.
It is also for this reason that We do not agree that it is "Mr.
Peanut and the Humanized Peanut" which is the trademark of
Standard Brands salted peanuts, it being a mere descriptive pictorial
representation of a peanut not prominently displayed on the very
body of the label covering the can, unlike the term PLANTERS which
dominates the label.
 II. Holding
Judgment appealed from affirmed.
III. Ratio
1. The only consequence resulting from a late filing of
an opposition to any application for registration of a
trademark is the oppositors relinquishment of the
privilege given to him by laws to object to such
registration.
2. However, such cannot prevent him from asking later
for its cancellation when in his opinion there are
good grounds justifying it (Sec. 17 RA 166).
(Legit ito lang yung case :p)
068. Shangri-La v. Court of Appeals
G.R. No. 111580/21 June 2001/Petition for Review
Shangri-La International Hotel Management, Ltd.; Shangri-
La Properties, Inc.; Makati Shangri-La Hotel and Resort, Inc.;
and Kuok Philippine Properties, Inc. petitioners
Court of Appeals, Hon. Felix De Guzman (Judge of the RTC
of Quezon City, Branch 99), and Developers Group of
Companies, Inc. respondents
G.R. No. 114802
Developers Group of Companies, Inc. petitioner
Court of Appeals, Hon. Ignacio S. Sapalo (Director, Bureau
of Patents, Trademarks, and Technology Transfer), and
Shangri-La International Hotel Management, Ltd.
respondents
Decision by J. Ynares-Santiago, Digest by Pip
Short Version: SLG filed a complaint for cancellation of
trademark against DGCI. DGCI had already registered the
disputed mark and logo, whereas SLG only filed an
application for registration after filing the complaint. While the
case was pending before the BPTTT, SLG filed a motion
before the RTC for suspension of proceedings in the
infringement case pending resolution of the administrative
proceedings. The RTC denied the motion. DGCI tried to pull
the same trick (i.e. suspension of proceedings) before the
BPTTT, but the BPTTT also refused to suspend the
administrative proceedings despite the pendency of the
infringement case.
The SC ruled that an infringement case can and should
proceed independently from a cancellation case with the
BPTTT so as to afford the owner of certificates of registration
redress and injunctive writs. In the same light, the case
before the BPTTT should also continue independently from
the infringement case so as to determine whether a
registered mark may ultimately be cancelled.
In this case, however, the proceedings before the
BPTTT were suspended in view of the fact that the RTC later
issued a decision finding not only that SLG had infringed
DGCIs rights, but that DGCI had a better right to the
registration of the mark and logo. The RTCs determination
of that particular issue, made permissible under Section 161
5 6
Issue was framed by the Court. See the numbers below for my
interpretation of the issues, haha.
of R.A. 8293, rendered the administrative proceedings moot
and academic.
Facts: In June 1988, the Shangri-La Group (see list of
petitioners in the first case above, from hereon they will be
SLG for brevity) filed with the Bureau of Patents,
Trademarks, and Technology Transfer (BPTTT) a petition
praying for the cancellation of the registration of the Shangri-
La mark and S device/logo issued to the Developers
Group of Companies, Inc. (DGCI).
SLG alleged that the mark and logo were illegally and
fraudulently obtained and appropriated for DGCIs restaurant
business. According to SLG, it was the legal and beneficial
owner of the mark and logo, which had been used for its
corporate affairs and business since March 1962. The mark
and logo were then made as a special design for SLGs
international hotels in 1975. In contrast, DGCI only began
using the mark and logo in 1982.
At the same time, SLG filed an application with the
BPTTT to register the disputed mark and logo. DGCI filed an
opposition to the application.
Nearly three years later, in April 1991, DGCI instituted
with the RTC of Quezon City a complaint for infringement
and damages, with prayer for injunction, against SLG. SLG
sought to suspend the proceedings in the infringement case
in view of the pending administrative proceedings before the
BPTTT. The RTC denied SLGs motion, prompting SLG to
file both a Motion for Reconsideration and a Motion to Inhibit
against the Presiding Judge, Felix M. De Guzman. The RTC
denied both motions.
SLG filed a petition for certiorari before the Court of
Appeals to question the RTCs orders. The CA dismissed the
petition and SLGs subsequent MR. SLG then filed this
petition before the Supreme Court.
Meanwhile, in October 1991, DGCI also filed an urgent
motion to suspend proceedings before the BPTTT in view of
the infringement case it had lodged before the RTC of
Quezon City. The BPTTT denied the motion and DGCIs later
MR was also denied. DGCI filed a petition for certiorari,
mandamus, and prohibition before the CA, questioning the
BPTTTs orders. The CA also dismissed DGCIs petition,
causing DGCI to bring the case up for review before the SC.
This case was later consolidated with SLGs petition.
While the consolidated cases were pending before the
SC, the RTC ruled in favor of DGCI in March 1996 and found
that SLG had infringed upon the formers rights. SLG
appealed that decision to the CA.
Issue5: May a party6 file a subsequent action for infringement
with the regular courts despite a pending administrative case
for cancellation of mark filed against that party? YES.
(1) Should the infringement case have been dismissed
or at least suspended in view of the prior and
pending administrative proceedings? NO.
i.e. DGCI
 (2) Should the proceedings before the BPTTT have
been suspended in view of the pending infringement
case? NO. (As a general rule. For the exception, see
below.)
Ruling:
Ratio: As provided in Section 151.2 of the Intellectual
Property Code
Notwithstanding the foregoing provisions, the court
or the administrative agency vested with jurisdiction
to hear and adjudicate any action to enforce the
rights to a registered mark shall likewise exercise
jurisdiction to determine whether the registration of
said mark may be cancelled in accordance with this
Act. The filing of a suit to enforce the registered
mark with the proper court or agency shall exclude
any other court or agency from assuming jurisdiction
over a subsequently filed petition to cancel the same
mark. On the other hand, the earlier filing of
petition to cancel the mark with the Bureau of
Legal Affairs shall not constitute a prejudicial
question that must be resolved before an action
to enforce the rights to same registered mark
may be decided.
Further, Section 7 of Rule 8 of the Regulations on Inter
Partes proceedings also provides that
The filing of a suit to enforce the registered mark
with the proper court or Bureau shall exclude any
other court or agency from assuming jurisdiction
over a subsequently filed petition to cancel the same
mark. On the other hand, the earlier filing of
petition to cancel the mark with the Bureau shall
not constitute a prejudicial question that must
be resolved before an action to enforce the
rights to same registered mark may be decided.
Applying the foregoing provisions to this case, the
fact that SLG filed an earlier case for cancellation of
mark and logo before the BPTTT does not bar DGCI from
later filing an infringement case against SLG with
respect to the mark and logo.
The Court explained the rationale thus: the case filed by
DGCI was based on its certificate of registration covering the
disputed mark and logo. Until cancelled by BPTTT or by an
infringement court, the certificate of registration remains valid
and constitutes prima facie evidence of the validity of the
registration, the registrants ownership of the mark or trade-
name, and of the registrants exclusive right to use the same
in connection with the goods, business or services specified
in the certificate. The certificate in this case was still valid and
subsisting, hence DGCI was within its rights when it filed an
infringement and damages suit against those it saw to be
infringing upon its rights.
In addition, the Court viewed the issues raised before
the BPTTT and RTC as very different. The BPTTT was
tasked with determining whether DGCIs mark and logo
should be cancelled in view of SLGs claim of prior ownership
over the mark and logo. The RTC, in contrast, was faced with
ruling on whether SLG infringed on DGCIs rights. Citing
Conrad and Company, Inc. v. Court of Appeals, the Court
stressed that the BPTTT has exclusive jurisdiction over
cancellation of trademark cases pursuant to the Trademark
Law, whereas the RTC has broader jurisdiction covering
infringement or unfair competition, among others.
In short, an infringement case can and should
proceed independently from a cancellation case with the
Bureau so as to afford the owner of certificates of
registration redress and injunctive writs. In the same
light, the case before the BPTTT should also continue
independently from the infringement case so as to
determine whether a registered mark may ultimately be
cancelled.
HOWEVER!!!
In this case, the RTC did not just determine whether
DGCIs rights had been infringed. In its March 1996
decision, it also upheld the validity and preference of
DGCIs registration over SLGs. The Court, citing Section
161 of R.A. 8293 verbatim, ruled that the trial court may
determine the right to registration, order the cancellation of
the registration, in whole or in part, and otherwise rectify the
register with respect to the registration of any party to the
action in the exercise of this. Judgment and orders shall be
certified by the court to the Director, who shall make
appropriate entry upon the records of the Bureau, and shall
be controlled thereby.
Since the RTC already ruled on the validity of the
registration of the mark and logo, the cancellation case
before the BPTTT was rendered moot. Allowing BPTTT to
proceed with the cancellation case could lead to a ruling that
would contradict the RTCs decision, which would be
anathema to the orderly administration of justice.
The Court thus ordered the suspension of proceedings
before the BPTTT pending final determination of the
infringement case then pending before the CA.
Voting: C.J. Davide, Jr., Puno and Pardo, JJ., concur.
Kapunan, J., no part.
Superior Commercial Ent. Inc. v. Kunnan Enterprises
Ltd. and Sports Concept & Distributor, Inc.
20 April 2010; Brion, J.
Digest prepared by Jethro Koon
I. Facts
1. SUPERIOR filed this complaint for trademark
infringement and unfair competition with PI against
KUNNAN and SPORTS CONCEPT in the RTC.
Claimed to be the owner of the trademarks,
trading styles, company names and
business names "KENNEX", "KENNEX &
DEVICE", "PRO KENNEX" and "PRO-
KENNEX"
Prior use of these trademarks, presenting
as evidence of ownership the Principal and
Supplemental Registrations of these
 trademarks in its name.
It extensively sold and advertised sporting
goods and products covered by its
trademark registrations.
Preambular clause of the Distributorship
Agreement it executed with KUNNAN:
Whereas, KUNNAN intends to
acquire the ownership of KENNEX
trademark registered by the [sic]
Superior in the Philippines.
Whereas, the [sic] Superior is
desirous of having been appointed
[sic] as the sole distributor by
KUNNAN in the territory of the
Philippines."
2. KUNNAN disputed SUPERIORs claim and
maintained that SUPERIORas mere distributor
fraudulently registered the trademarks in its name.
KUNNAN alleged that it was incorporated
in 1972, under the name KENNEX Sports
Corporation and it commercially marketed
its products in different countries, including
the Philippines since 1972 including "PRO
KENNEX" in 1976.
It registered the "PRO KENNEX" trademark
not only here but also in 31 other countries,
and widely promoted the trademarks
through worldwide advertisements in print
media and sponsorships of known tennis
players.
KUNNAN appointed SUPERIOR as its
exclusive distributor in the Philippines
Certificate of Registration remained with
SUPERIOR because SUPERIORs
President and GM misled their officers into
believing that KUNNAN was not qualified to
hold the same due to the "many
requirements set by the Philippine Patent
Office" that KUNNAN could not meet.
SUPERIOR deceived it into assigning its
applications for registration of the "PRO
KENNEX" trademark through an
Assignment Agreement
Upon the termination of its agreement,
KUNNAN appointed SPORTS CONCEPT
as its new distributor. KUNNAN also
caused the publication of a Notice and
Warning in the Manila Bulletin, stating that
(1) it is the owner of the trademarks; (2) it
terminated its Agreement with SUPERIOR;
and (3) it appointed SPORTS CONCEPT
as its exclusive distributor. This notice
prompted SUPERIOR to file this case.
3. Cancellation case! Prior to and during the
pendency of the case, KUNNAN filed with the (now
defunct) Bureau of Patents separate Petitions for
the Cancellation of Registration Trademark on the
ground that SUPERIOR fraudulently registered
and appropriated the disputed trademarks; as
mere distributor and not as lawful owner.
BLA ruled that Superior is a mere
distributor and ordered their trademarks
cancelled. Appeal to the IPO was denied.
CA affirmed (now final and executory).
4. RTC held KUNNAN liable and issued a writ of PI
enjoining KUNNAN and SPORTS CONCEPT from
using the disputed trademarks.
Based on the "Whereas clause" of the
Distributorship Agreement and the findings
of the Director of Patents in Inter Partes
Case No. 1709 and 1734 that SUPERIOR
was "rightfully entitled to register the mark
KENNEX as user and owner thereof."
5. KUNNAN and SPORTS CONCEPT appealed. CA
reversed and ruled that Certificates of Principal
Registration does not conclusively establish
ownership as dominion over trademarks is not
acquired by the fact of registration alone; at best, it
merely raises a rebuttable presumption of
ownership. Certificates of Supplemental
Registration in SUPERIORs name do not even
enjoy the presumption of ownership accorded to
registration in the principal register.
i. The Distributorship Agreement, considered
in its entirety, positively confirmed that
SUPERIOR sought to be the KUNNANs
exclusive distributor.
ii. SUPERIOR made the express undertaking
in the Assignment Agreement to
"acknowledge that KUNNAN is still the real
and truthful owner of the trademarks," and
that it "shall agree that it will not use the
right of the abovementioned trademarks to
do anything which is unfavourable or
harmful to KUNNAN."These provisions are
clearly inconsistent with SUPERIORs
claim of ownership.
iii. SUPERIORs Letter addressed to Brig.
Gen. Jose Almonte, identifying itself as the
"sole and exclusive licensee and
distributor." Attached to the letter was an
agreement with KUNNAN, identifying the
latter as the "foreign manufacturer of all
KENNEX products." SUPERIOR
acknowledged its status as a distributor
even in transactions with third persons.
II. Holding
Petition for review on certiorari DENIED for lack of merit.
Cost against Superior.
III. Ratio
No Trademark Infringement
1. FIRST. The CA decided that the registration of the
"KENNEX" and "PRO KENNEX" trademarks should
be cancelled because SUPERIOR was not the
owner of, and could not in the first place have validly
registered these trademarks. Thus, as of the finality
of the CA decision, these trademark registrations
were effectively cancelled and SUPERIOR was no
 longer the registrant of the disputed trademarks.
2. 22 of RA 166 states that only a registrant of a mark
can file a case for infringement. Corollary to this, 19
provides that any right conferred upon the registrant
terminates when the judgment or order of
cancellation has become final.:
Section 22. Infringement, what constitutes.
Any person who [1] shall use, without
the consent of the registrant, any
reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-
name in connection with the sale, offering
for sale, or advertising of any goods,
business or services on or in connection
with which such use is likely to cause
confusion or mistake or to deceive
purchasers or others as to the source or
origin of such goods or services, or identity
of such business; or [2] reproduce,
counterfeit, copy, or colorably imitate any
such mark or trade-name and apply such
reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or
advertisements intended to be used upon
or in connection with such goods, business
or services, shall be liable to a civil action
by the registrant for any or all of the
remedies herein provided.
3. In the present case, by operation of law the
trademark infringement aspect has been rendered
moot and academic in view of the finality of the
decision in the Cancellation Case.
4. SECOND. Even assuming that SUPERIORs case
No Unfair Competition
had not been rendered moot and academic, there
can be no infringement committed by KUNNAN who
was adjudged with finality to be the rightful owner of
the disputed trademarks in the Registration
Cancellation Case.
Jurisprudence holds that in the absence of
any inequitable conduct on the part of the
manufacturer, an exclusive distributor who
employs the trademark of the former does
not acquire proprietary rights, and a
registration of the trademark as such
belongs to the manufacturer, provided the
fiduciary relationship does not terminate
before application for registration is filed.
The right to register a trademark should be
based on ownership.
An exclusive distributor does not acquire
any proprietary interest in the principals
trademark and cannot register it in his own
name unless it is has been validly assigned
to him.
5. THIRD. Res judicata bars SUPERIORs present
case. Res judicata embraces two (2) concepts: the
first is "bar by prior judgment" under par. (b) of Rule
39, Section 47, and the second is "conclusiveness
of judgment" under par. (c) thereof.
Under conclusiveness of judgment, facts
and issues actually and directly resolved in
a former suit cannot again be raised in any
future case between the same parties,
even if the latter suit may involve a different
cause of action.
Because the Cancellation Case and the
present case involve the same parties,
litigating with respect to and disputing the
same trademarks, we are bound to
examine how one case would affect the
other.
Even if the causes of action of the
Cancellation Case (cancellation of
trademark registration) differs from that of
the present case (improper or unauthorized
use of trademarks), the final judgment is
nevertheless conclusive on the facts and
issues that are determinative of the present
case.
To establish trademark infringement, the 3
elements must be proven: (1) the validity of
plaintiffs mark; (2) the plaintiffs ownership
of the mark; and (3) the use of the mark or
its colorable imitation by the infringer
results in "likelihood of confusion."
The second elementownership of the
markwas what the Cancellation Case
decided with finality. On this element
depended the validity of the registrations
that, on their own, only gave rise to the
presumption of, but was not conclusive on,
the issue of ownership.
1. Neither the RTC nor the CA made any factual
findings with respect to unfair competition.
2. From jurisprudence, unfair competition has been
defined as the passing off (or palming off) or
attempting to pass off upon the public of the goods
or business of one person as the goods or business
of another with the end and probable effect of
deceiving the public.
The essential elements are (1) confusing
similarity in the general appearance of the
goods; and (2) intent to deceive the public
and defraud a competitor.
3. Jurisprudence also formulated the "true test" of
unfair competition: 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.
4. In the present case, no evidence exists showing that
KUNNAN ever attempted to pass off the goods it
 sold as those of SUPERIOR. In addition, there is no
evidence of bad faith or fraud.
5. In McDo v. L.C. Big Mak we held that there can be
trademark infringement without unfair competition
such as when the infringer discloses on the labels
containing the mark that he manufactures the
goods, thus preventing the public from being
deceived that the goods originate from the
trademark owner. In this case, no issue of confusion
arises because the same manufactured products
are sold; only the ownership of the trademarks is at
issue.
6. Furthermore, KUNNANs notice prevents the public
from being deceived that the goods originated from
SUPERIOR since the notice clearly indicated that
KUNNAN is the manufacturer of the goods bearing
the trademarks "KENNEX" and "PRO KENNEX."
7. Finally, with the CAs final ruling in the Cancellation
Case, SUPERIOR no longer presents a valid cause
of action. For this reason, the unfair competition
aspect of the SUPERIORs case likewise falls.
IN-N-OUT Burger v. Sehwani, Inc and Benitas Frites, Inc
(PH Companies)
GR. 179127 December 24, 2008 Chico-Nazario,
J.
FACTS
IN-N-OUT Burger, a US company not engaged in business
in the PH, filed a trademark and service mark application with
the Bureau of Trademarks of the IPO for IN-N-OUT Burger
& Arrow Design. It found out the Sehwani had already
obtained a trademark registration for the mark IN N OUT
(with the inside of the letter O formed like a star) with
Benita able use said mark due to a licensing agreement with
Sehwani.
IN-N-OUT Burger filed before the Bureau of Legal Affairs of
the IPO an administrative complaint against respondents for
unfair competition and cancellation of trademark because
the trademarks of (1) IN-N-OUT, (2) IN-N-OUT Burger and
Arrow designed and (3) IN-N-OUT Burger Logo were:
1. owned by him,
2. registered in various parts of the world, including the
Trademark Office of the U.S.,
3. internationally well-known
4. distinctive of its business and goods through its long
and exclusive commercial use.
They pointed out that both trademarks are registered for the
restaurant business and are clearly identical and similar,
making it appear that their goods are from IN-N-OUT Burger
and therefore, misleading ordinary and unsuspecting
consumers that they are purchasing from IN-N-OUT Burger.
They sent a demand letter directing Sehwani desist from
claiming ownership of the mark IN-N-OUT.
Sehwani refused but expressed willingness to surrender the
registration for a price.
IN-N-OUT Burger, registered owner of the mark Double
Double in the PH, alleged that respondents uses the mark
and the color scheme in their menus and issues their receipts
stating that they represent IN-N-OUT Burger.
Sehwani claims that it has been using the mark IN N OUT
in the PH since 1982 and had registered the mark IN N OUT
(with the inside of the letter O formed like a star) in 1991
and was issued a certificate of registration in 1993. As a
registered owner of the mark, they should be accorded the
presumption of a valid registration of the mark with the
exclusive right to use.
IPO Director rendered a decision that IN-N-OUT Burger has
the capacity to sue since its country of origin is a member
and a signatory of the Convention of Paris on Protection of
Industrial Property. It is a widely known brand in the PH and
its marks are internationally well-known due to its
advertisements and world-wide registrations; therefore, they
have the exclusive right to use the trademark. However, the
respondents used the mark in good faith and were not guilty
of unfair competition due to lack of any intent to ride upon IN-
N-OUT Burgers goodwill by exactly copying their mark.
Respondents certificate of registration is cancelled and they
are ordered to stop using the mark.
The MR of both parties were denied.
When the respondents received a copy of the Resolution
denying their MR, they filed an Appeal Memorandum with the
IPO Director. It was dismissed for being filed beyond the 15-
day reglementary period. CA denied their Petition for Review
via Rule 43 and their subsequent MR. SC denied their
Petition for Review via Rule 45 and affirmed the decision of
the IPO director. They filed an MR.
IN-N-OUT Burger filed a timely appeal before the IPO
director, who modified the Decision and declared
respondents guilty of unfair competition. Despite their claims
of using the mark since 1982, they only started constructing
their restaurant in 2000 and after IN-N-OUT Burger
demanded that they desist from claiming ownership over the
mark. Their non-use of the star symbol because of alleged
difficult in printing and their use of the mark Double Double
is a sign of bad faith and intent to mislead the public. The
Director awarded damages (PHP 212,574.28), exemplary
damages (PHP500K) and attorneys fees (PHP 500K) to IN-
N-OUT Burger.
Respondents again filed a Petition for Review via Rule 43 to
the CA because their use of the mark is not tainted with
fraudulent intent. IN-N-OUT Burger had never entered any
transactions in the PH and could not claim that its goods and
services had been identified in the mind of the public. The
mark is not well-known and their complaint is barred by
laches.
CA reversed the decision of the IPO Director because only
the regular courts have sole jurisdiction to hear and decide
cases involving the provisions of the IPC. IN-N-OUT Burgers
MR was denied.
ISSUE:
 1. W/N only regular courts have sole jurisdiction to
hear and decide cases involving the provisions of
the IPC NO
2. W/N the respondents are guilty of unfair competition
YES
3. W/N IN-N-OUT Burgers have the right to damages.
YES
HOLDING: Decision of the CA is reversed. Decision of the
IPO Director General is partially reinstated (exemplary
damages was reduced).
RATIO
1. W/N only regular courts have sole jurisdiction to
hear and decide cases involving the provisions of
the IPC NO
Doctrine: Section 10 of the IP defines the jurisdiction of the
IPC to include, among others, the cancellation of marks and
administrative complaints regarding violation of laws
involving intellectual property rights and the assessment of
damages. The Sec. 7 of the IPC also recognizes the
appellate jurisdiction of the IPO Director General over the
decisions of the IPO Director of Legal Aid. Therefore, while
Sec. 163 of the IPC vests civil courts with the jurisdiction over
cases of unfair competition, it does not state that they have
sole jurisdiction over unfair competition cases, to the
exclusion of administrative bodies. In fact, Sec. 160 and 170
of the IPC recognize the concurrent jurisdiction of the civil
courts and the IPO over unfair competition cases.
Application: IN-N-OUT Burgers complaint seeks the
cancellation of a disputed mark as well as damages for
violation of its intellectual property rights; therefore, the IPO
Director has jurisdiction to decide the case against
respondents and the IPO Director General have exclusive
jurisdiction over the appeal of the judgment of the IPO
Director.
2. W/N the respondents are guilty of unfair competition
YES
Doctrine: The essential elements of an action for unfair
competition:
1. Confusing similarity in the
appearance of the goods
- May or may not result from
similarity of the marks
- May result from other external
factors in the packaging or
presentation of the goods
2. Intent to deceive the public and
defraud the competitor
- 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 does not
need to be shown.
Application:
1. The respondents, as found by the IPO Director,
were not using their registered mark but are using
the mark of IN-N-OUT Burgers. They were also
using the mark of Double Double on their
hamburger products. Although they were issued a
Certificate of Registration, they only started building
their restaurant (named IN-N-OUT and containing
such signage) in 2000 after IN-N-OUT Burgers
demanded that they stop claiming ownership over
their mark IN-N-OUT. Their receipts even contain
the statement representing IN-N-OUT
2. They are giving their products the general
appearance that would likely influence purchasers
to believe that their products are those from IN-N-
OUT Burgers. The intention to deceive may be
inferred from the similarity of the goods as packed
and offered for sale.
The respondents failed to offer evidence of their use of the
mark since 1982 to counter the findings of fraudulent intent.
In administrative proceedings, only substantial evidence or
such relevant evidence as a reasonable mind may accept as
adequate to support a conclusion is necessary. There is
more than enough substantial evidence to find the
respondents guilty of unfair competition.
3. W/N IN-N-OUT Burgers have the right to damages.
YES
The right to damages is provided under Sec. 156 of the IPC.
It is fair that the IPO Director General computed the damages
due by applying reasonable percentage of 30% to
respondents gross sales and then doubling the amount due
to their intent to mislead the public and defraud IN-N-OUT
Burgers. Due to the deliberate intent of the respondents to
engage in unfair competition, exemplary damages must be
awarded but reduced to Php 250K. Due to IN-N-OUT
Burgers having to protect its rights over the disputed marks
with the case dragging on for 7 years despite lack of
countervailing evidence from the respondents, they should
be awarded attorneys fees.
Etepha, A.G. v. Director of Patents and Westmont
Pharmaceuticals, Inc.
31 March 1966; Sanchez, J.
Digest prepared by Jethro Koon
I. Facts
1. 1959, Westmont (NY), sought registration of
trademark "Atussin" placed on its "medicinal
preparation of expectorant antihistaminic,
bronchodilator sedative, ascorbic acid (Vitamin C)
used in the treatment of cough".
2. Etepha (Liechtenstein) objected. It will be damaged
because Atussin is so confusedly similar to its
Pertussin (Registration No. 6089, 1957) used on a
preparation for the treatment of coughs, that the
buying public will be misled into believing that
Westmont's product is that of Etepha's which
allegedly enjoys goodwill.
 3. The Director of Patents said that registration is
allowed. Hence this appeal.
II. Issues
Is there infringement? NONE
III. Holding
Director of Patents affirmed. Costs against petitioner.
IV. Trademark Doctrines
1. The objects of a trademark are "to point out distinctly
the origin or ownership of the articles to which it is
affixed, to secure to him who has been instrumental
in bringing into market a superior article or
merchandise the fruit of his industry and skill, and to
prevent fraud and imposition."
2. A cause for infringement is predicated upon
colorable imitation: such a "close or ingenious
imitation as to be (1) calculated to deceive ordinary
persons, or such a resemblance to the original as to
deceive an ordinary purchaser, (2) giving such
attention as a purchaser usually gives, and (3) to
cause him to purchase the one supposing it to be
the other."
3. A practical approach to the problem of
similarity/dissimilarity is to go into the whole of the
trademarks pictured in their manner of display, from
the viewpoint of a prospective buyer.
The trademark complained of should be
compared and contrasted with the
purchaser's memory (not in juxtaposition)
of the trademark said to be infringed.
Sound; appearance; form, style, shape,
size or format; color; ideas connoted by
marks; the meaning, spelling, and
pronunciation, of words used; and the
setting in which the words appear may be
considered.
4. Trademark infringement is a form of unfair
competition.
V. Ratio
1. "Tussin" was derived from the Latin "tussis"
meaning cough. "Tussin" is merely descriptive; it is
generic; it furnishes to the buyer no indication of the
origin of the goods; it is open for appropriation by
anyone. It is barred from registration as trademark.
Any other conclusion = "appellant having a
monopoly" of the word "tussin" in a
trademark.
2. While "tussin" by itself cannot thus be used
exclusively to identify one's goods, it may properly
become the subject of a trademark "by combination
with another word or phrase".
3. The two labels are entirely different in colors,
contents, arrangement of words thereon, sizes,
shapes and general appearance. The contrasts in
pictorial effects and appeals to the eye is so
pronounced that the label of one cannot be
mistaken for that of the other, not even by persons
unfamiliar with the two trademarks
Atussin in bold, block Pertussin is printed
letters horizontally diagonally upwards
written and across in
semiscript style with
flourishes and with
only the first letter
"P" capitalized
bottom: Westmont bottom: Etepha Ltd.
Pharmaceuticals, Inc. Schaan Fl
New York, USA"
top: Apothecary E.
lower left side the word Taeschner's
"Westmont" upon a
white diamond shaped
enclosure and in red ink
a color different from
that of the words above
and below it.
(left, bottom, and right (indications of the
edge of label) use)
"for bronchial catarrh "cough syrup"
whopping-cough
coughs and asthma".
4. One look is enough to denude the mind of that
illuminating similarity so essential for a trademark
infringement case to prosper.
5. The two words also do not sound alike when
pronounced.
The SolGen observed that the pronunciation of
"Per", whether correct or incorrect, includes a
combination of P, e and r; whereas, in Atussin it
starts with the single letter A added to "tussin".
Appeals to the ear are dissimilar. And this,
because in a word combination, the part that
comes first is the most pronounced.
6. Regard too should be given to the class of persons
who buy the particular product and the
circumstances ordinarily attendant to its acquisition.
Because it is a prescription drug, the process by
which it is bought is subject to multiple safeguards:
the doctor, the discerning buyer of medicine, and the
pharmacist.
An intending buyer must have to go first to
a doctor; he receives instructions as to
what to purchase; he reads the
prescription; he knows what he is to buy.
He is not of the incautious, unwary,
unobservant or unsuspecting type; he
examines the product sold to him; he
checks to find out whether it conforms to
the medical prescription. The common
trade channel is the pharmacy or the
drugstore. Similarly, the pharmacist or
druggist verifies the medicine sold.
7. While it is possible that buyers might be able to
obtain Pertussin or Attusin without prescription,
 when this happens, then the buyer must be one
throughly familiar with what he intends to get, or else
he would not have the temerity to ask for medicine
specifically needed to cure a given ailment. In which
case, the more improbable it will be to palm off one
for the other for a person who purchases with open
eyes is hardly the man to be deceived.
Esso v CA
August 31, 1982
Teehankee, J.
Bahjin
Facts:
Petitioner Esso Standard Eastern, Inc., then a foreign
corporation duly licensed to do business in the Philippines,
is engaged in the sale of petroleum products which are
Identified with its trademark ESSO (which as successor of
the defunct Standard Vacuum Oil Co. it registered as a
business name with the Bureaus of Commerce and Internal
Revenue in April and May, 1962).
Private respondent in turn is a domestic corporation then
engaged in the manufacture and sale of cigarettes, after it
acquired in November, 1963 the business, factory and patent
rights of its predecessor La Oriental Tobacco Corporation,
one of the rights thus acquired having been the use of the
trademark ESSO on its cigarettes, for which a permit had
been duly granted by the Bureau of Internal Revenue.
Petitioner commenced a case for trademark infringement.
a. Alleged that the petitioner had been for many years
engaged in the sale of petroleum products and its
trademark ESSO had acquired a considerable goodwill
to such an extent that the buying public had always
taken the trademark ESSO as equivalent to high quality
petroleum products.
b. Asserted that the use by respondent of the same
trademark ESSO on its cigarettes was for the purpose
of deceiving the public as to its quality and origin to the
detriment and disadvantage of its own products.
Respondent Answer:
c. In order that there may be trademark infringement, it is
indispensable that the mark must be used by one
person in connection or competition with goods of the
same kind as the complainant's. (Cigarettes does not
compete with Petroleum).
TC there was infringement; CA reversed TC; Hence, this
petition.
Issue: WON there was infringement. NO.
Dispositive: Petition dismissed.
Resolution and Ratio:
The law defines infringement:
the use without consent of the trademark owner of
any "reproduction, counterfeit, copy or colorable
limitation of any registered mark or tradename in
connection with the sale, offering for sale, or
advertising of any goods, business or services on or
in connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or
services, or Identity of such business; or reproduce,
counterfeit, copy or colorably imitate any such mark
or tradename and apply such reproduction,
counterfeit, copy or colorable limitation to labels,
signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in
connection with such goods, business or services."
Implicit in this definition is the concept that the goods must
be so related that there is a likelihood either of confusion
of goods or business.
a. Likelihood of confusion - A relative concept; to be
determined only according to the particular, and
sometimes peculiar, circumstances of each case.
b. For non-competing goods may be those which,
though they are not in actual competition, are so
related to each other that it might reasonably be
assumed that they originate from one
manufacturer. Non-competing goods may also be
those which, being entirely unrelated,
could not reasonably be assumed to have a common
source.
c. Related - belong to the same class or have the same
descriptive properties; when they possess the same
physical attributes or essential characteristics with
reference to their form, composition, texture or
quality; serve the same purpose;
In this case, the goods are obviously different from each
other with "absolutely no iota of similitude"
d. The public knows too well that petitioner deals solely
with petroleum products that there is no possibility
that cigarettes with ESSO brand will be associated
with whatever good name petitioner's ESSO
trademark may have generated.
e. Also, they flow through different channels of trade:
i. Petitioners thru gasoline service and lubrication
stations, automotive shops and hardware
stores.
ii. Respondents thru sari-sari stores, grocery
stores, and other small distributor outlets.
f. Appearances are different:
i. Petitioner: trademark comes in either red, white,
blue, or combination of 3; oval background.
ii. Respondent: Green; rectangular background.
Fruit of the Loom v. CA (no digest)
DEL MONTE vs. CA
Petitioners: DEL MONTE CORPORATION and
PHILIPPINE PACKING CORPORATION
Respondents: COURT OF APPEALS and SUNSHINE
SAUCE MANUFACTURING INDUSTRIES
G.R. No. L-78325 January 25, 1990, FIRST DIVISION,
CRUZ, J.
Facts:
Del Monte Corporation (Del Monte) is a foreign company
organized in the US and not engaged in business in the
Philippines. Philippine Packing Corporation (Philpack) is
a domestic corp. In 1969, Del Monte granted Philpack
the right to manufacture, distribute and sell in the
Philippines various agricultural products, including
catsup, under the Del Monte trademark and logo.
In 1965, Philpack (authorized by Del Monte) registered
the Del Monte catsup bottle and was granted Certificate
of Trademark by Philippine Patent Office under
Supplemental Register. In 1972, Del Monte obtained 2
registration certificates for trademark "DEL MONTE" and
its logo.
Sunshine Sauce Manufacturing Industries (Sunshine)
was issued a Certificate of Registration by Bureau of
Domestic Trade in 1980, to engage in manufacture,
packing, distribution and sale of various kinds of sauce,
identified by the logo Sunshine Fruit Catsup. This logo
was registered on the Supplemental Register in 1983.
The product itself was contained in various kinds of
bottles, including the Del Monte bottle, which Sunshine
bought from the junk shops for recycling.
Having received reports that Sunshine was using its
exclusively designed bottles and a logo confusingly
similar to Del Monte's, Philpack warned Sunshine to
desist from doing so.
Philpack and Del Monte filed a complaint against
Sunshine for infringement of trademark and unfair
competition, with damages, and the issuance of a writ of
preliminary injunction.
Sunshine alleged it had long ceased to use Del Monte
bottles and that its logo was substantially different from
Del Montes and would not confuse buying public to
detriment of petitioners.
RTC dismissed complaint. It held that there were
substantial differences between logos/trademarks of
parties; that Sunshine had ceased using Del Monte
bottles; that in any case Sunshine became owner of said
bottles upon its purchase from the junk yards; and that
complainants had failed to establish Sunshine's malice
or bad faith, which was an essential element of
infringement of trademark or unfair competition. CA
affirmed in toto.
Issue: Whether or not Sunshine is guilty of infringement
and unfair competition? YES
Held: Petition is GRANTED. CA decision REVERSED.
Sunshines Certificate of Registration is cancelled. Sunshine
is permanently enjoined from using label similar to Del
Montes, prohibited from using Del Monte empty bottles as
containers for its own products, and ordered to pay
petitioners P1,000 as nominal damages and costs of suit.
Ratio: Section 22 and 29 of R.A. No. 166, otherwise known
as Trademark Law:
Sec. 22. Infringement, what constitutes. Any person who
shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any
registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely to
cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services or
identity of such business; or reproduce, counterfeit copy or
colorably imitate any such mark or trade name and apply
such reproduction, counterfeit copy or colorable imitation to
labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection
with such goods, business or services, shall be liable to a
civil action by the registrant for any or all of
the remedies herein provided.
Sec. 29. Unfair competition, rights and remedies. A
person who has identified in the mind of the public the goods
he manufactures or deals in, his business or services from
those of others, whether or not a mark or tradename 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. Such
a person shall have the remedies provided in section twenty-
three, Chapter V hereof.
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
goodwill, or who shall commit any acts calculated to produce
said result, shall be guilty of unfair competition, and shall be
subject to an action therefor.
In particular, and without in any way limiting the scope, the
following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give
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 likely 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 ally 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.
To arrive at a proper resolution of this case, it is important to
bear in mind the following distinctions between infringement
of trademark and unfair competition.
 1) Trademark Infringement is the unauthorized use mark as a whole and not as dissected. If the buyer is
of a trademark, whereas unfair competition is the deceived, it is attributable to the marks as a totality, not
passing off of one's goods as those of another. usually to any part of it. The court therefore should be
2) In Infringement, fraudulent intent is unnecessary; guided by its first impression, for a buyer acts quickly
in unfair competition fraudulent intent is essential. and is governed by a casual glance, the value of which
may be dissipated as soon as the court assumes to
3) In infringement, prior registration is prerequisite analyze carefully the respective features of the mark.
to action; in unfair competition registration is not
necessary. Xxxxxx It has also been held that it is not the function of the court
in cases of infringement and unfair competition to
Del Monte: Sunshine:
1. shape of label or Semi-rectangular with a crown or tomato Regular rectangle.
make shape design on top of the rectangle.
2. brand printed on label Tomato catsup mark. Fruit catsup.
3. words or lettering on Clearly indicated words packed by Sysu "made in the Philippines by Sunshine
label or mark International, Inc., Q.C., Philippines. Sauce Manufacturing Industries" No. 1 Del
Monte Avenue, Malabon, Metro Manila.
4. color of logo Combination of yellow and dark red, with White, light green and light red, with words
words "Del Monte Quality" in white. "Sunshine Brand" in yellow.
5. shape of logo In the shape of a tomato. Entirely different in shape.
6. label below cap Seal covering the cap down to the neck There is a label below the cap which says
of the bottle, with picture of tomatoes "Sunshine Brand."
with words "made from real tomatoes."
7. color of product Darker red. Lighter than Del Monte.
While the Court does recognize these distinctions, it educate purchasers but rather to take their carelessness
does not agree with the conclusion that there was no for granted, and to be ever conscious of the fact that
infringement or unfair competition. It seems to us that marks need not be identical. A confusing similarity will
the lower courts have been so pre-occupied with the justify the intervention of equity. The judge must also be
details that they have not seen the total picture. aware of the fact that usually a defendant in cases of
infringement does not normally copy but makes only
It has been correctly held that side-by-side comparison
colorable changes. Well has it been said that the most
is not the final test of similarity. Such comparison
successful form of copying is to employ enough points
requires a careful scrutiny to determine in what points
of similarity to confuse the public with enough points of
the labels of the products differ, as was done by the trial
difference to confuse the courts. Xxxxxx
judge. The ordinary buyer does not usually make such
scrutiny nor does he usually have the time to do so. The At that, even if labels were analyzed together it is not
average shopper is usually in a hurry and does not difficult to see Sunshine label is a colorable imitation of
inspect every product on the shelf as if he were browsing Del Monte trademark. Predominant colors used in the
in a library. Where the housewife has to return home as Del Monte label are green and red-orange, the same
soon as possible to her baby or the working woman has with Sunshine. The word "catsup" in both bottles is
to make quick purchases during her off hours, she is apt printed in white and the style of the print/letter is the
to be confused by similar labels even if they do have same. Although the logo of Sunshine is not a tomato, the
minute differences. Male shopper is worse as he usually figure nevertheless approximates that of a tomato.
does not bother about such distinctions. As previously stated, the person who infringes a trade
The question is not whether the two articles are mark does not normally copy out but only makes
distinguishable by their label when set side by side but colorable changes, employing enough points of
whether the general confusion made by the article upon similarity to confuse the public with enough points of
the eye of the casual purchaser who is unsuspicious and differences to confuse the courts. What is undeniable is
off his guard, is such as to likely result in his confounding the fact that when a manufacturer prepares to package
it with the original. As observed in several cases, the his product, he has before him a boundless choice of
general impression of the ordinary purchaser, buying words, phrases, colors and symbols sufficient to
under the normally prevalent conditions in trade and distinguish his product from the others. When as in this
giving the attention such purchasers usually give in case, Sunshine chose, without a reasonable
buying that class of goods is the touchstone. explanation, to use the same colors and letters as those
used by Del Monte though the field of its selection was
It has been held that in making purchases, the consumer
so broad, the inevitable conclusion is that it was done
must depend upon his recollection of the appearance of
deliberately to deceive. Xxxxxx
the product which he intends to purchase. The buyer
having in mind the mark/label of the respondent must We find that Sunshine is not guilty of infringement for
rely upon his memory of the petitioner's mark. Unlike the having used the Del Monte bottle. The reason is that the
judge who has ample time to minutely examine the configuration of said bottle was merely registered in the
labels in question in the comfort of his sala, the ordinary Supplemental Register. ..although Del Monte has
shopper does not enjoy the same opportunity. actual use of the bottle's configuration, the petitioners
cannot claim exclusive use thereof because it has not
A number of courts have held that to determine whether
been registered in the Principal Register. However, we
a trademark has been infringed, we must consider the
find that Sunshine, despite the many choices available
 to it and notwithstanding that the caution "Del Monte bordered by minute bordered by buds of
Corporation, Not to be Refilled" was embossed on the grains arranged in rows flowers with leaves.
bottle, still opted to use petitioners' bottle to market a of three
product which Philpack also produces. This clearly
shows Sunshines bad faith and its intention to capitalize In each corner there are
on Del Monte's reputation and goodwill and pass off its hop designs.
own product as that of Del Monte. Xxxxxx
Top (dominant feature): Top (dominant feature):
As Sunshine's label is an infringement of the Del Monte's
"San Miguel" written "Beer"
trademark, law and equity call for the cancellation of
horizontally
Sunshines registration and withdrawal of all its products "Pale Pilsen" appears
bearing the questioned label from the market. With Bottom: "Pale Pilsen" immediately below in
regard to the use of Del Monte's bottle, the same written diagonally smaller block letters.
constitutes unfair competition; hence, the respondent across the middle of the
should be permanently enjoined from the use of such design.
bottles.
In between: coat of
arms and the phrase
"Expertly Brewed."
Asia Brewery, Inc. (ABI) v. CA and San Miguel
Corporation (SMC) The "S" in "San" and the
5 July 1993; Grio-Aquino, J. "M" of "Miguel," "P" of
"Pale" and "Pilsen" are
Digest prepared by Jethro Koon written in Gothic letters
I. Facts with fine strokes of
serifs, the kind that first
1. On September 15, 1988, SMC filed a complaint appeared in the 1780s
against ABI for infringement of trademark and unfair in England and used for
competition on account of the latter's BEER PALE printing German as
PILSEN or BEER NA BEER which has been distinguished from
competing with SAN MIGUEL PALE PILSEN for a Roman and Italic.
share of the local beer market.
2. On August 27, 1990, a decision was rendered by the Below "Pale Pilsen" is Below "Pale Pilsen" is
RTC, dismissing SMC's complaint because ABI the statement "And the statement written in
"has not committed trademark infringement or unfair Bottled by" (first line, three lines "Especially
competition against" SMC. CA reversed. MR was "San Miguel Brewery" brewed and bottled by"
denied. ABI went to the SC on a R45. (second line), and (first line), "Asia Brewery
"Philippines" (third line) Incorporated" (second
II. Issues line), and "Philippines"
(third line)
Whether ABI infringes SMC's trademark and thereby
commits unfair competition against SMC. NO
Above design: "Reg. Left: hop design
III. Holding Phil. Pat. Off."
Right: "Net Contents
RTC decision is REINSTATED and AFFIRMED. Costs Below: "Net Contents: 320 ml."
against the SMC. 320 Ml."
IV. Ratio
1. Infringement of trademark is a form of unfair 3. Infringement is determined by the "test of
competition. Sec. 22 of RA 166 (Trademark Law), dominancy" rather than by differences or variations
defines what constitutes infringement. This in the details of one trademark and of another:
definition implies that only registered trade marks,
trade names and service marks are protected Similarity in size, form and color, while relevant,
against infringement or unauthorized use by another is not conclusive. If the competing trademark
or others. The use of someone else's registered contains the main or essential or dominant
trademark, trade name or service mark is features of another, and confusion and
unauthorized, hence, actionable, if it is done deception is likely to result, infringement takes
"without the consent of the registrant." place. Duplication or imitation is not necessary;
nor it is necessary that the infringing label
2. The trademarks, as described by the RTC are (see should suggest an effort to imitate.
attached image):
The question is whether the use of the marks
San Miguel Pale Pilsen involved would be likely to cause confusion or
With Rectangular Hops mistakes in the mind of the public or deceive
and Malt Design purchasers.
4. What are the dominant features of the competing
A rectangular design A rectangular design
trademarks before us?
 The dominant feature of SMC's trademark is the No one may appropriate generic or descriptive
name of the product: SAN MIGUEL PALE words. They belong to the public domain.
PILSEN, written in white Gothic letters with
8. Is ABI using a name or mark for its beer that has
elaborate serifs on an amber background
previously come to designate SMC's beer, or is ABI
across the upper portion of the rectangular
passing off its BEER PALE PILSEN as SMC's SAN
design.
MIGUEL PALE PILSEN?
The dominant feature of ABI's trademark is the
The universal test question is whether the
name: BEER PALE PILSEN, with "Beer" written
public is likely to be deceived.
in large amber letters, larger than any of the
letters found in the SMC label. Nothing less than conduct tending to pass off
one man's goods or business as that of another
The trial court perceptively observed that the
will constitute unfair competition. Actual or
word "BEER" does not appear in SMC's
probable deception and confusion on the part of
trademark, just as the words "SAN MIGUEL" do
the customers by reason of defendant's
not appear in ABI's trademark. Hence, there is
practices must always appear.
absolutely no similarity in the dominant features
of both trademarks. 9. The use of ABI of amber-colored steinie bottles of
320 ml similar but not identical to the San Mig bottle
5. Neither in sound, spelling, or appearance can BEER
(former has a fat bulging neck) does not necessarily
PALE PILSEN be said to be confusingly similar to
constitute unfair competition.
SAN MIGUEL PALE PILSEN. No one who
purchases BEER PALE PILSEN can possibly be SMC did not invent but merely borrowed the
deceived that it is SAN MIGUEL PALE PILSEN. steinie from abroad and claims neither patent
nor trademark protection for that bottle shape
6. Besides the dissimilarity in their names, the
and design (it was also never trademark-
following other dissimilarities in the trade dress or
registered). Cerveza Especial and the Efes
appearance of the competing products abound:
Pale Pilsen use the "steinie" bottle.
The San Mig bottle has a slender tapered neck.
Bottle size, shape and color may not be the
The ABI bottle has a fat, bulging neck.
exclusive property of any one beer
"Pale pilsen" on SMC's label are printed in bold manufacturer. SMC's being the first to use the
and laced letters along a diagonal band. "Pale steinie bottle does not give SMC a vested right
pilsen" on ABI's are half the size in slender to use it to the exclusion of everyone else.
block letters on straight horizontal band.
Being of functional or common use, and not the
The names of the manufacturers are exclusive invention of any one, it is available to
prominently printed on their respective bottles. all who might need to use it within the industry.
Protection against imitation should be properly
SMC's bottle carries no slogan. On the back of
confined to nonfunctional features.
ABI's bottle is printed in big, bold letters, under
a row of flower buds and leaves, its copyrighted The amber color is a functional feature. All
slogan: "BEER NA BEER!" bottled beer produced in the Phil. is contained
and sold in amber-colored bottles because it is
The back of the SAN MIGUEL PALE PILSEN
the most effective color in preventing
bottle carries the SMC logo, whereas the BEER
transmission of light and provides the maximum
PALE PILSEN bottle has no logo.
protection to beer. (SC compared this to
The San Mig bottle cap is stamped with a coat medicine bottles)
of arms and the words "San Miguel Brewery
That the ABI bottle has a 320 ml. capacity is not
Philippines" encircling the same. The ABI bottle
due to a desire to imitate SMC because that
cap is stamped with the name "BEER" in the
bottle capacity is the standard prescribed under
center, surrounded by the words "Asia Brewery
Metrication Circular No. 778, dated 4 December
Incorporated Philippines."
1979, of the Department of Trade, Metric
SMC is priced P7 per bottle, ABI is at P4.25 per System Board.
bottle (significant price difference in 1993
ABI explained that it used the color white for its
rates). One who pays only P4.25 for a bottle of
label because it presents the strongest contrast;
beer cannot expect to receive San Miguel Pale
it is also the most economical, and the easiest
Pilsen from the storekeeper or bartender.
to "bake" in the furnace.
7. "Pale pilsen" are generic words descriptive of the
SC mentioned that SMC's bottle is registered
color ("pale"), of a type of beer ("pilsen"), which is a
under R.A. No. 623 which simply prohibits
light bohemian beer with a strong hops flavor that
manufacturers of other foodstuffs from the
originated in the City of Pilsen in Czechoslovakia
unauthorized rebottling of SMC's bottles by
and became famous in the Middle Ages.
refilling these with their products (ex. With patis
(Webster's). "Pilsen" is a "primarily geographically
or toyo)
descriptive word," hence, non-registerable and not
appropriable according to the Trademark Law. 10. When the names of the competing products are
clearly different and their respective sources are
 prominently printed on the label and on other parts 5. The judge must also be aware of the fact that usually
of the bottle, mere similarity in the shape and size of a defendant in cases of infringement does not
the container and label, does not constitute unfair normally copy but makes only colorable changes.
competition. Well has it been said that the most successful form
of copying is to employ enough points of similarity to
11. Consumers or buyers of beer generally order their
confuse the public with enough points of difference
beer by brand. The customer surrenders his empty
to confuse the courts.
replacement bottles or pays a deposit to guarantee
the return of the empties. If his empties are SAN
MIGUEL, he will get SAN MIGUEL as replacement.
The same is true in sari-sari stores, beer,
restaurants, pubs, and beer gardens.
12. Considering that SAN MIGUEL PALE PILSEN has
virtually monopolized the domestic beer market for
the past hundred years, those who have been
drinking no other beer but SAN MIGUEL PALE
PILSEN these many years certainly know their beer
too well to be deceived by a newcomer in the
market. If they gravitate to ABI's cheaper beer, it will
not be because they are confused or deceived, but
because they find the competing product to their
taste.
13. This case will not diminish "Del Monte Corp. v. CA" CONRAD AND COMPANY, INC., petitioner,
involving catsup which is a common household item vs.
which is bought off the store shelves by housewives HON. COURT OF APPEALS, FITRITE INC., and VICTORIA
and house help who, if they are illiterate and cannot BISCUITS CO., INC., respondents.
identify the product by name or brand, would very
likely identify it by mere recollection of its G.R. No. 115115 July 18, 1995 VITUG, J.:
appearance
14. The points of dissimilarity between the two Facts:
outnumber their points of similarity.
FITRITE, INC. and VICTORIA BISCUIT CO., INC. (Fitrite /
Victoria) are domestic corporations engaged in
V. CRUZ, J., dissenting: (ponente of Del Monte v. CA) manufacturing, selling and distributing biscuits and cookies
bearing the trademark "SUNSHINE."
1. The average shopper is usually in a hurry and does
not inspect every product on the shelf as if he were
browsing in a library. Where the housewife has to CONRAD AND COMPANY (Conrad) is engaged in
return home as soon as possible to her baby or the importing, selling and distributing biscuits and cookies in the
working woman has to make quick purchases Philippines.
during her off hours, she is apt to be confused by
similar labels even if they do have minute April 1982 - Fitrite filed with the Bureau of Patents,
differences. The male shopper is worse as he Trademarks and Technology Transfer (BPTTT) applications
usually does not bother about such distinctions. for registration of the trademark "SUNSHINE," to be used on
biscuits and cookies. The application in the Supplemental
2. The question is not whether the two articles are Register was approved in May 1983, while the application in
distinguishable by their labels when set aside by the Principal Register was approved in March 1990. In June
side but whether the general confusion made by the 1984, Fitrite authorized its sister company, Victoria, to use its
article upon the eye of the casual purchaser who is trademark.
unsuspicious and off his guard.
3. To determine whether a trademark has been In April 1988, Conrad was designated exclusive importer and
infringed, we must consider the mark as a whole and dealer of Sunshine Biscuits, Inc. (Sunshine USA) in the PH.
not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to June 1990 - Fitrite discovered that Conrad had been
any part of it. The court therefore should be guided importing, selling and distributing biscuits and cookies
by its first impression. bearing their trademark. Fitrite filed a case for infringement
4. It has also been held that it is not the function of the
court in cases of infringement and unfair competition
to educate purchasers but rather to take their
carelessness for granted, and to be ever conscious
of the fact that marks need not be identical. A
confusing similarity will justify the intervention of
equity.
under Sec. 23 7of RA 166 and unfair competition under Sec.
298.
Conrad filed a motion to dismiss on the ground of litis
pendentia9, doctrine of primary jurisdiction and failure to
state a cause of action.
RTC granted the motion holding that internationally accepted
trademarks are protected under PH laws and the action filed
by Sunshine USA with the BPTTT necessarily includes
Conrad as assignee. Moreover, the doctrine of primary
juridisction also applies considering that BPTTT already
acquired jurisdiction over the suit filed by Sunshine Inc.
Fitrite appealed to the CA which reserved the RTC and
reinstated the case. It held that Conrads claim that its
principal, Sunshine USA, is the registrant of Sunshine
trademark in the US is a mere allegation subject to proof.
Hence, this petition for review:
Conrad- that, because technical matters or intricate
issues of fact regarding the ownership of the
trademark in question are involved, its
determination requires the expertise, specialized
skills and knowledge of the proper administrative
7
Sec. 23. Actions, and damages and injunction for infringement.
Any person entitled to the exclusive use of a registered mark or trade-
name may recover damages in a civil action from any person who
infringes his rights, and the measure of the damages suffered shall be
either the reasonable profit which the complaining party would have
made, had the defendant not infringe his said rights, or the profit which
the defendant actually made out of the infringement, or in the event such
measure of damages cannot be readily ascertained with reasonable
certainty, then the court may award as damages a reasonable
percentage based upon the amount of gross sales of the defendant or
the value of the services in connection with which the mark or trade-
name was used in the infringement of the rights of the complaining party.
In cases where actual intent to mislead the public or to defraud the
complaining party shall be shown, in the discretion of the court, the
damages may be doubled.
The complaining party, upon proper showing, may also be granted
injunction.
8
Section 29. Unfair competition, rights and remedies. - A person
who has identified in the mind of the public the goods he manufactures
or deals in, his business or services from those of others, whether or not
a mark or trade-name 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. Such a person
shall have the remedies provided in section twenty-three, Chapter V
hereof.
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 goodwill, or who shall commit any acts calculated to
produce said result, shall be guilty of unfair competition, and shall be
subject to an action therefor.
In particular, and without in any way limiting the scope of unfair
competition, the following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give 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,
body, which is BPTTT, which has the primary
jurisdiction over the action a quo; (Industrial
Enterprises, Inc. vs. Court of Appeal)
CA- the issue pending in BPTTT is WON the
Sunshine trademarks is registrable or cancellable,
while the issue in the RTC is WON Conrads
committed infringement under Sec. 22 RA 16610
when it imported, sold and distributed biscuits
bearing the Sunshine trademark without the
consent of Fitrite.
Issue:
1. WON the RTC case should proceed notwithstanding the
pending admin case with BPTTT - YES
2. WON the issuance of the writ of preliminary injunction is
proper pending resolution of the admin case - YES
Ratio:
1. The CA is correct.
An application for the administrative cancellation of a
registered trademark under Section 1711 Republic Act No.
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;
(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.
9
Sunshine Biscuits filed a Petition for Cancellation of Registration with
BPTTT against Fitrite in 1989 and 1990.
10
Section 22. Infringement, what constitutes. - Any person who shall
use, without the consent of the registrant, any reproduction, counterfeit,
copy or colorable imitation of any registered mark or trade-name in
connection with the sale, offering for sale, or advertising of any goods,
business or services on or in connection with which such use is likely to
cause confusion or mistake or to deceive purchasers or others as to the
source or origin of such goods or services, or identity of such business;
or reproduce, counterfeit, copy or colorably imitate any such mark or
trade-name and apply such reproduction, counterfeit, copy, or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such
goods, business or services, shall be liable to a civil action by the
registrant for any or all of the remedies herein provided.
11
Section 17. Grounds for cancellation. - Any person, who believes
that he is or will be damaged by the registration of a mark or trade-name,
may, upon the payment of the prescribed fee, apply to cancel said
registration upon any of the following grounds:
(a) That the registered mark or trade-name becomes the
common descriptive name of an article or substance on which
the patent has expired;
166 falls under the exclusive cognizance of BPTTT (Sec.
1912, Trade-Mark Law), while an action for infringement or
unfair competition, as well as the remedy of injunction and
relief for damages, is within the jurisdiction of ordinary courts.
Fitrite holds Certificate of Registration No. 47590 (Principal
Register) for the questioned trademark. In Lorenzana
vs. Macagba, we have declared that registration in the
Principal Register gives rise to a presumption of validity
of the registration and of the registrant's ownership and
right to the exclusive use of the mark. It is precisely such
a registration that can serve as the basis for an action for
infringement. An invasion of this right entitles the registrant
to court protection and relief under Section 23 and Section
2713, Chapter V, of the Trade-Mark Law.
An application for administrative cancellation of registration
with the BPTTT cannot prevent the courts from the exercise
of their jurisdiction. A contrary rule will unduly expand the
doctrine of primary jurisdiction14.
2. Having the exclusive right over said trademark, FITRITE
should be protected in the use thereof considering that (a)
the invasion of the right FITRITE is material and substantial;
(b) such right is clear and unmistakable; and (c) there is an
urgent necessity to prevent serious damage to FITRITE's
business interest, goodwill and profit. Therefore, a
preliminary injunction may be issued to maintain the status
quo pending trial of the action
The pending admin case does not have a bearing on the
issuance of the writ. For one, Conrad is not even a party to
the admin case filed by Sunshine USA. The averments that
Sunshine USA is Conrads principal and that it has a foreign
registration are mere asseverations which have yet to be
established.
Held:
BPTTT to resolve the admin case.
Petition for review is denied, CA affirmed.
(b) That it has been abandoned;
(c) That the registration was obtained fraudulently or contrary
to the provisions of section four, Chapter II hereof;
(d) That the registered mark or trade-name has been
assigned, and is being used by, or with the permission of, the
assignee so as to misrepresent the source of the goods,
business or services in connection with which the mark or
trade-name is used; or
(e) That cancellation is authorized by other provisions of this
Act.
12
Section 19. Cancellation of registration. - If the Director finds that
a case for cancellation has been made out he shall order the
cancellation of the registration. The order shall not become effective until
the period for appeal has elapsed, or if appeal is taken, until the
Emerald Garment Manufacturing Corporation v. CA, H.D.
Lee Company
G.R. No. 100098 December 29, 1995
Kapunan, J
Digest by Trixie Mariano
FACTS:
CASE 1: H.D. Lee Co., Inc. [H.D. Lee]15 filed with
the Bureau of Patents, Trademarks & Technology Transfer
(BPTTT) a Petition for Cancellation of Registration
(Supplemental Register) for the trademark Stylistic Mr. Lee
issued in the name of Emerald Garment Manufacturing
Corporation [EMERALD]16.
H.D. Lee invoked Sec. 37 of R.A. 166 (Trademark
Law) and Art VIII of the Paris Convention for the Protection
of Industrial Property because Emeralds trademark so
closely resembled its own trademark, LEE, which causes
confusion, mistake and deception on the part of the
purchasing public as to the origin of the goods. Said
trademark was previously registered and used in the
Philippines and had not been abandoned.
Emerald contends that its trademark is different
from H.D.s and that its certificate of registration was legally
and validly granted. Emerald later publicized its application
for registration of the trademark Stylistic Mr. Lee in the
Principal Register.
CASE 2: H.D. filed a notice of opposition to
Emeralds application on the ground that their trademark was
confusingly similar to its Lee trademark.
The two cases we consolidated due to a common
question law. Director of Patents granted H.D.s petition for
the cancellation and opposition to registration because due
to being prior registrants of the trademark LEE in the
Philippines and the continued use of said mark in the
Philippines. Using the test of dominancy, he declared that
Emeralds trademark was confusingly similar to H.D.s
because it is the word LEE which draws the attention of the
buyer and leads him to conclude that the goods originated
from the same manufacturer; said word is the dominant
feature of the mark.
Emerald appealed to the CA and filed with the
BPTTT a Motion to Stay Execution the decision of the
Director of Parents because it would cause them great and
irreparable damage and injury. H.D. opposed said motion.
judgment on appeal becomes final. When the order or judgment
becomes final, any right conferred by such registration upon the
registrant or any person in interest of record shall terminate. Notice of
cancellation shall be published in the Official Gazette.
13
Sec. 27. Jurisdiction of [Regional Trial Court]. All actions under this
Chapter and Chapters VI and VII hereof shall be brought before the
proper [Regional Trial Court].
14
Re Doctrine of Primary Jurisdiction:
Applies when a case is concurrently the primary jurisdiction of both an
admin agency and the regular courts. When this happens, under the
doctrine, "the judicial process is suspended pending referral of such
issues to the administrative body for its view.
15
Foreign corporation organized under the laws of Delaware, U.S.A.
16
Domestic corporation organized and existing under Philippine laws
 BPTT issued a Resolution granting Emeralds
motion subject to the condition that they would only dispose
its current stock and is strictly prohibited from further
production; and that the relief order would automatically
cease upon resolution of the appeal by the CA and upon their
lost, all goods bearing the mark Stylistic Mr. Lee shall be
removed from the market or seized in accordance with the
law.
CA affirmed the decision of the Director of Patents,
stating that the word LEE is the most prominent and
distinctive feature of both marks.17
Emerald filed an MR. H.D. opposed due to the
impermissible change of theory on appeal.18 CA issued a
resolution rejection petitioners MR stating that a defense not
raised in the trial court cannot be raised on appeal for the first
time and cannot change his theory on appeal. Emeralds
main defense was that there was no confusingly similarity
between the competing trademarks while their main
argument in the MR is that H.D. Lee is estopped by laches
from asserting its right to its trademark, belatedly coming to
court with unclean hands by changing the appearance of its
trademark to make it identical to their trademark. Therefore,
their appeal is dismissed.
ISSUES
1. W/N H.D. Lee is estopped by laches from asserting
their rights to its trademarks. NO
2. [Civil Infringement Topic] W/N Emeralds
trademark tends to mislead and confuse the public
and constitutes an infringement of its own mark. NO
3. [What marks may be registered Not a surname]
W/N the trademark LEE is registerable. NO
4. [What marks may be registered In actual use in
the PH] W/N H.D. LEE was able to prove actual
commercial use of its LEE trademark in the
Philippines before filing its application for
registrations and had acquired ownership over said
mark. NO
HOLDING: For lack of adequate proof of actual use of its
trademark in the Philippines prior to petitioner's use of its own
mark and for failure to establish confusing similarity between
said trademarks, private respondent's action for infringement
must necessarily fail.
17
While there are other words printed in Emeralds mark, it is printed in
such small letters and had overlapped with the word LEE. Even
arguing that such words are conspicuous enough to draw the attention
of ordinary buyers, the goods may still be easily mistaken for a variation
of the line of H.D.s LEE trademarks, considering that they had
registered trademarks which use other words in addition to the principal
mark LEE. The likelihood of confusion is more probable due to the fact
that they are both engaged in the same line to business. The
determinative factor in ascertaining whether or not the marks are
confusingly similar to each other is whether the use of such mark would
LIKELY cause confusion or mistake on the part of the buying public. The
merchandise being ordinary commodities purchased by the average,
sometimes ignorant and unlettered, persons who will not examine the
small letterings but merely guided by the striking mark that whatever
difference is insignificant in the face of such evident similarity in the
dominant features of the labels. H.D., having established its right of prior
use and registration of the trademark LEE in the Philippine, is entitled
to protection from any infringement.
18
Petitioner allegedly raised new and unrelated arguments that were not
previously raised in the proceedings bellows such as laches and a claim
RATIO:
1. W/N H.D. Lee is estopped by laches from asserting
their rights to its trademarks. NO
Emerald: Section 9- A of RA 166: equitable principles of
laches, estoppel, and acquiescence may be considered and
applied
Emerald has been using its trademark since May 1, 1975 and
yet it was only on September 18, 1981 that H.D. Lee filed a
petition for cancellation of Emeralds certificate of
registration. Additionally, their opposition to their application
for registration in the principal register was only filed on July
27, 1984.
Court: The reckoning point for putting H.D. Lee official on
notice that Emerald has appropriated or is using the mark is
the date the certificate of registration was published in the
official gazette and issued to Emerald. Hence, when they
instituted the cancellation proceedings on September 18,
1981, less than a year had passed. Also their time of filing
the opposition for the application for registration in the
principal register was published only on February 20, 1984;
therefore, only 5 months (on July 27, 1984) had passed since
H.D. Lee filed their opposition.
Doctrine: To be barred from bring a suit on the grounds of
estoppel and laches, delay, must have been lengthy.
2. W/N Emeralds trademark tends to mislead and
confuse the public and constitutes an infringement
of its own mark. NO.
Doctrine: Sec. 22 of R.A. 166 indicates that there must be
application or use of a trademark or trade-name that is of
colorable imitation to constitute infringement19. The essential
element of infringement is colorable imitation, wherein there
is such a close or ingenious imitation as to be calculated to
deceive ordinary purchases, or such resemblance of the
infringing mark to the original as to deceive an ordinary
purchases giving such attention as a purchases give, and to
cause him to purchase the one supposing it to be the other.
Colorable imitation does not mean that it is identical or that
the details were copied, it is merely such similarity in form,
content, words, sound, meaning, special arrangement or
general appearance of the trademarks or trade-name in the
over-all presentation or in the essential, substantive and
distinctive parts as would likely mislead or confuse persons
in the ordinary discourse of purchasing a genuine article.
that H.D. appropriated the style and appearance of their trademark when
it registered its LEE mark.
19
RA 166 (Trademark Law)
Sec. 22. Infringement, what constitutes. Any person
who shall use, without the consent of the registrant, any reproduction,
counterfeit, copy or colorable imitation of any registered mark or trade-
name in connection with the sale, offering for sale, or advertising of any
goods, business or services on or in connection with which such use is
likely to cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services, or
identity of such business; or reproduce, counterfeit, copy or
colorably imitable any such mark or trade-name and apply such
reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods, business or
services; shall be liable to a civil action by the registrant for any or all of
the remedies herein provided.
2 TESTS:
1. Dominancy Test
- If the main trademark contains the main or
essential or dominant features of another, and
confusion and deception is likely to result, there
is infringement. The issue is whether the use of
the marks would cause confusion or mistakes
in the mind of the public or deceive purchasers
2. Holistic Test
- The entirety of the marks should be considered
in determining confusing similarity.
Application: Emeralds Stylistic Mr. Lee is not confusingly
similar to H.D. Lees LEE trademark. The dissimilarities is
noticeable and substantial enough to matter if the following
factors are considered:
1. The products are expensive jeans wherein the
buyers are more cautious and discriminating in their
purchases.
- Expensive and valuable items are normally
bought only after deliberate, comparative, and
analytical investigations (Del Monte Corp. v.
CA)
2. An average Filipino buys his jeans by brand;
therefore, he is knowledgeable and familiar with his
preferences
3. The ordinary purchaser is not completely unwary
but is intelligent regarding the type of product
involved.
- An ordinary purchaser is one accustomed to
buy and therefore to some extent, familiar with
goods in question. The test of fraudulent
simulation is to be found in the likelihood of
deception of some person in some measure
acquainted with an established design and
desirous of purchasing the commodity with
which the design has been associated. (Dy
Buncio v. Tan Tiao Bok)
In taking into account the unique factors, it is improbable that
the public would naturally conclude that MR. STYLISTIC
LEE is a variation of LEE. Therefore, the similarities in the
trademarks are not sufficient to cause deception and
confusion tantamount to infringement.
3. W/N the trademark LEE is registerable. NO
Doctrine: A trade name that is primarily merely a surname
cannot be registered (Sec. 4(e) of R.A. 638).
Application: LEE is a surname and H.D. Lee cannot be
acquire exclusive ownership over and singular use of said
20
R.A. 166
Sec. 2. What are registrable. Trade-marks, trade-names, and
service marks owned by persons, corporations, partnerships or
associations domiciled in the Philippines and by persons, corporations,
partnerships, or associations domiciled in any foreign country may be
registered in accordance with the provisions of this act: Provided, That
said trade-marks, trade-names, or service marks are actually in use in
commerce and services not less than 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 law substantially similar privileges to citizens of the
Philippines, and such fact is officially certified, with a certified true copy
of the foreign law translated into the English language, by the
term. A personal name or surname may not be monopolized
as a trademark or tradename as against others of the same
name or surname. In the absence of fraud, contract or
estoppel, any man may use his name or surname.
4. W/N H.D. LEE was able to prove actual commercial
use of its LEE trademark in the Philippines before
filing its application for registrations and had
acquired ownership over said mark. NO
Doctrine: Actual use in commerce in the Philippines is an
essential pre-requisite for the acquisition of ownership over
a trademark20. A registration certificate is merely a prima
facie evidence that is rebuttable by controverting evidence.
Registration in the supplemental register was for registration
of mark which is not registerable on the principal register due
to some defect.
Application: While H.D. Lee has acquired several
registration certificates for its various trademarks, such
registration alone will not suffice. H.D. Lees claim that its
marks first reached the Philippines in the 1960s through local
sales by the Post Exchanges of the U.S. Military Bases is
merely the self-serving statement of its General Manager.
Similarly, the numerous vouchers representing various
advertising expenses in the Philippines should be given
weight and proved to be incurred only in 1981 and 1982 by
Lee Phils after it entered a licensing agreement with H.D. Lee
on May 11, 1981.
Emerald proved that it has been selling jeans and
other garments under the trademark Stylistic Mr. Lee since
1975 as evidenced by appropriate sales invoices, which are
the best proof to prove that there were actual sales and use
of their trademark in the Philippines.
077 Amigo v. Cluett Peabody
Mar. 14, 2001
Panganiban, J.
Short Version:
Cluett, owner of GOLD TOE socks, sued Amigo, producer of
GOLD TOP socks, for trademark infringement.
Guilty. Cluett had already registered its marks and devices,
which, under the Law on Trademarks, was prima facie proof
of ownership and first use. Amigo failed to overthrow this
presumption.
Facts:
government of the foreign country to the Government of the Republic of
the Philippines. (As amended.) (Emphasis ours.)
Sec. 2-A. Ownership of trade-marks, trade-names and service-
marks; how acquired. Anyone who lawfully produces or deals in
merchandise of any kind or who engages in lawful business, or who
renders any lawful service in commerce, by actual use hereof in
manufacture or trade, in business, and in the service rendered; may
appropriate to his exclusive use a trade-mark, a trade-name, or a
service-mark not so appropriated by another, to distinguish his
merchandise, business or services from others. The ownership or
possession of trade-mark, trade-name, service-mark, heretofore or
hereafter appropriated, as in this section provided, shall be recognized
and protected in the same manner and to the same extent as are other
property rights to the law. (As amended.)
Cluett Peabody, a New York Corporation, sued Amigo, a
Filipino Corp, for cancellation of trademark.
The dispute revolved around Cluetts GOLD TOE brand for
socks, its Linenized copyright, and its logo, attached below.
Amigo had been producing socks under the GOLD TOP
brand labeled Linenized for Extra Wear, with a dominant
color white at the center and a blackish brown background
with a magnified design of the socks garter. See below for
how similar that is.
The Patent Office ruled in favor of Cluett.
CA reversed at first, but affirmed the Patent Offices ruling on
MR. Hence this petition for review.
Issues:
1. WON Amigo was the first actual user of the
trademark. (No)
2. WON the trademarks were confusingly similar (Yes)
3. WON Cluett had exclusive right to the trademark
despite absence of actual use in the Philippines.
(Yes)
Ratio:
1. Contrary to Amigos claims, there was sufficient
evidence that Cluett used Gold Toe before Amigo
did. The evidence consisted of the ff. Bureau of
Patents registrations:
a. March 16, 1954, Gold Toe
b. Feb. 1, 1952, Representation of a Sock in
a Magnifiying Glass
c. Jan. 20, 1932, The Gold Toe Presentation,
and
d. Feb. 28, 1952, Linenized.
These certificates of registration of trademarks are
prima facie evidence of ownership of those marks.,
the dates of appropriation and the validity of other
pertinent facts stated therein, in accordance with
Sec. 20 of RA 166.
On the other hand, Amigo failed to present
proof of the date of the alleged first use of its Gold
Top mark and device. Thus, no finding could be
made to that effect.
Further, Amigo only registered its
trademark with the supplemental register, which, as
held in La Chemise Lacoste, gives no presumption
of ownership of the trademark.
As to the dates of registration, theyre only
different because each of the marks had different
dates of first use.
In conclusion, the Court upheld the findings
of the Bureau of patents, invoking the doctrine of
expertise of administrative agencies over matters
falling under their jurisdiction.
2. The trademarks are similar. While, concededly,
Amigo was correct that mere similarity in sound
does not by itself create confusion, the Bureau of
Patents did not rely on the idem sonans test.
Rather, the Bureau looked at the drawings
and labels on file in determining that the Gold Top mark
and devices were combinations of Cluetts trademarks,
in addition to the idem sonans test and determination
that the marks sounded similar. Clearly then, the Bureau
used the Holistic test
Emerald Garment v. CA gave us the 2 tests
in determining whether trademarks are confusingly
similar, namely the Dominancy Test and the Holistic
Test.
As the name implies, the Dominancy Test
focuses on the similarity of the prevalent features of the
competing trademarks which might cause confusion or
deception, and thus infringement.
In contrast, the holistic test mandates that
the entirety of the marks in question must be considered
in determining confusing similarity
In any case, an application of either of
these tests would lead to the same conclusion that the
marks are confusingly similar. Under the dominancy
test, there are definitely a lot of similiarities, e..g. the gold
checkered lines against a black background, and a
representation of a sock with a magnifying glass, a
mans foot wearing a sock and the word linenized on the
label.
Applying the holistic test, when compared,
the features of the trademark are strikingly similar. The
overall impression is that the two products are
deceptively and confusingly similar to one aother.
3. As Cluett had already registered its trademarks,
there was already a prima facie presumption of,
among others, the date of first use.
Petition denied. CA affirmed.
Gabe.
Trademarks involved:
Societe Des Products Nestle, S.A. and Nestle
Philippines, Inc., v. CA and CFC Corporation
G.R. No. 112012 April 04, 2001 Ynares-
Santiago, J
FACTS
CFC filed with the BPTTT an application for the registration
of the trademark FLAVOR MASTER for instant coffee.
Societe Des Produits Nestle, S.A., a Swiss Company, and
Nestle, a PH corporation and a licensee of Societe Des
Produits Nestle, filed a Notice of Opposition against CFCs
application for registration of the trademark because their
product is confusingly similar to its trademarks for coffee and
the coffee extracts, to wit: MASTER ROAST and MASTER
BLEND. Its registration would cause confusion in the trade
or deceive purchasers and would falsely suggest to the
purchasing public a connection in the business of Nestle, as
the dominant word in the three (3) trademarks is MASTER.
CFC argued that its trademark, FLAVOR MASTER, is not
confusingly similar with Nestles trademarks. The word
MASTER cannot be exclusively appropriate by any person
for being a descriptive or generic name and the other words
from the three (3) trademarks are very different from each
other in meaning, spelling, pronunciation and sound. Its
trademark, the FLAVOR MASTER, is clearly very different
from any of Nestles alleged trademarks, especially when the
marks are viewed in their entirety, by considering their
pictorial representations, color schemes, and the letters of
their respective labels.
BPTTT denied CFCs application for registration.
When CFC elevated the matter to the CA, the CA stated that
the discrepancies between the logos are so ostensible that
the casual purchases cannot likely mistake one for the other.
While the contending marks depict the same product, the
glaring dissimilarities in their presentation far outweigh and
dispel any aspect of similitude. The distinctions are so well-
defined so as to foreclose any probability or likelihood of
confusion or deception on the part of the normally intelligent
buyer when they encounter both products at the grocery
shelf. [Differences21 of the Label by the CA]
ISSUE: W/N the trademark FLAVOR MASTER is a colorable
imitation/an infringement of the trademarks MASTER
ROAST and MASTER BLEND. - YES
HOLDING: The decision of the Court of Appeals is
REVERSED and SET ASIDE and the decision of the Bureau
of Patents, Trademarks and Technology Transfer are
REINSTATED.
RATIO
21
CFCs label (Exhibit "4") is predominantly a blend of dark and lighter
shade of orange where the words "FLAVOR MASTER", "FLAVOR"
appearing on top of "MASTER", shaded in mocha with thin white inner
and outer sidings per letter and identically lettered except for the slightly
protruding bottom curve of the letter "S" adjoining the bottom tip of the
letter "A" in the word "MASTER", are printed across the top of a
simmering red coffee cup. Underneath "FLAVOR MASTER" appears
"Premium Instant Coffee" printed in white, slim and slanted letters.
Appellees "MASTER ROAST" label (Exhibit "7"), however, is almost
double the width of appellant CFCs. At the top is printed in brown color
the word "NESCAFE" against a white backdrop. Occupying the center
is a square-shaped configuration shaded with dark brown and picturing
a heap of coffee beans, where the word "MASTER" is inscribed in the
middle. "MASTER" in appellees label is printed in taller capital letters,
with the letter "M" further capitalized. The letters are shaded with red
and bounded with thin gold-colored inner and outer sidings. Just above
the word "MASTER" is a red window like portrait of what appears to be
a coffee shrub clad in gold. Below the "MASTER" appears the word
"ROAST" impressed in smaller, white print. And further below are the
inscriptions in white: "A selection of prime Arabica and Robusta coffee."
With regard to appellees "MASTER BLEND" label (Exhibit "6") of which
only a xeroxed copy is submitted, the letters are bolder and taller as
compared to appellant CFCs and the word "MASTER" appears on top
of the word "BLEND" and below it are the words "100% pure instant
coffee" printed in small letters.
TOPIC: Is there infringement even if the goods are non-
competing. Focus on infringement for goods with competing
marks when the product is inexpensive and common.
As Section 4 (d) of Republic Act No. 166 or the Trademark
Law prescribes, a trademark22 cannot be registered if there
is like to cause confusion or mistake or deceive purchasers.
The law prescribes a more stringent standard in that there
should not only be confusing similarity but that it should not
likely cause confusion or mistake or deceive purchasers.
Colorable imitation is a close or ingenious imitation as to be
calculated to deceive ordinary to cause him to purchase the
one supposing it to be the other. The test of dominancy
focuses on the similarity of the prevalent features of the
competing trademarks which might cause confusion or
deception and thus constitute infringement, while the holistic
test mandates that the entirety of the marks in question must
be considered in determining confusing similarity.
The totality or holistic test is improper since the ordinary
purchaser would not be inclined to notice the specific
features, similarities or dissimilarities, considering that the
product is an inexpensive and common household item. The
products bearing the trademarks in question are
"inexpensive and common" household items bought off the
shelf by "undiscerningly rash" purchasers. As such, if the
ordinary purchaser is "undiscerningly rash", then he would
not have the time nor the inclination to make a keen and
perceptive examination of the physical discrepancies in the
trademarks of the products in order to exercise his choice.
The totality or holistic test is contrary to the elementary
postulate of the law on trademarks and unfair competition
that confusing similarity is to be determined on the basis of
visual, aural, connotative comparisons and overall
impressions engendered by the marks in controversy as they
comparison between two trademarks. The dominancy test
should be used because it relies not only on the visual but
also on the aural and connotative comparisons and overall
impressions between the two trademarks.
In associating its coffee products with the term "MASTER" in
its advertisements23, the term "MASTER has acquired a
22
A trademark is any word, name, symbol or device adopted and used
by a manufacturer or merchant to identify his goods and distinguish them
from those manufactured and sold by others. The protection of trade-
marks is the laws recognition of the psychological function of symbols.
A trademark is a merchandising short-cut which induces a purchaser to
select what he wants, or what he has been led to believe what he wants.
The owner of a mark exploits this human propensity by making every
effort to impregnate the atmosphere of the market with the drawing
power of a congenial symbol [...] to convey through the mark, in the
minds of potential customers, the desirability of the commodity upon
which it appears. Once this is attained, the trade-mark owner has
something of value. If another poaches upon the commercial magnetism
of the symbol he has created, the owner can obtain legal redress
(Mishawaka Mfg. Co. v. Kresge Co).
23
Robert Jaworski. Living Legend. A true hard court hero. Fast on his
feet. Sure in every shot he makes. A master strategist. In one word,
unmatched.
MASTER ROAST. Equally unmatched. Rich and deeply satisfying.
Made from a unique combination of the best coffee beans - Arabica for
superior taste and aroma, Robusta for strength and body. A masterpiece
only NESCAFE, the worlds coffee masters, can create.
certain connotation to mean the coffee products MASTER
ROAST and MASTER BLEND produced by Nestle. As such,
the use by CFC of the term "MASTER" in the trademark for
its coffee product FLAVOR MASTER is likely to cause
confusion or mistake or even to deceive the ordinary
purchasers.
The word "MASTER" is neither a generic24 nor a descriptive25
term and may be legally protected. The term "MASTER" is a
suggestive term brought about by the advertising scheme of
Nestle. In this case, Nestle has, over time, promoted its
products as "coffee perfection worthy of masters like Robert
Jaworski and Ric Puno Jr."
Suggestive terms are those which, in the phraseology of one
court, require "imagination, thought and perception to reach
a conclusion as to the nature of the goods which subtly
connote something about the product" They are eligible for
protection in the absence of secondary meaning.
It is sufficiently established that the word MASTER is the
dominant feature of Nestles mark. The word MASTER is
printed across the middle portion of the label in bold letters
almost twice the size of the printed word ROAST and has
always been given emphasis in the advertisements made in
promoting the product. In the mind of the buying public had
come to learn to associate the word MASTER with Nestles
goods.
The label bearing the trademark FLAVOR MASTER attracts
attention to the word MASTER, rather than to the
dissimilarities that exist. Therefore, the possibility of
confusion as to the goods which bear the competing
marks or as to the origins thereof is not farfetched.
Mighty Corporation v. E & J Gallo Winery
G.R. No. 154342; July 14, 2004; Corona, J.
IV. Facts
Respondent Gallo Winery - A foreign corporation not doing
business in the Philippines but organized and existing under
the laws of the US where all its wineries are located. Gallo
Winery produces different kinds of wines and brandy
products and sells them in many countries under different
registered trademarks, including the GALLO and ERNEST &
JULIO GALLO wine trademarks.
Respondent domestic corporation Andresons - Gallo
Winerys exclusive wine importer and distributor in the
MASTER ROAST. Coffee perfection worthy of masters like Robert
Jaworski.
In the art of conversation, Ric Puno Jr. is master. Witty. Well-informed.
Confident.
In the art of coffee-making, nothing equals Master Roast, the coffee
masterpiece from Nescafe, the worlds coffee masters. A unique
combination of the best coffee beans - Arabica for superior taste and
aroma, Robusta for strength and body. Truly distinctive and rich in flavor.
Master Roast. Coffee perfection worthy of masters like Ric Puno Jr.
Philippines since 1991, selling these products in its own
name and for its own account.
Petitioners Mighty Corporation and La Campana and
their sister company, Tobacco Industries - Engaged in
the cultivation, manufacture, distribution and sale of tobacco
products
1. Respondent Gallo Winery registered its GALLO wine
trademark on November 16, 1971 and its ERNEST &
JULIO GALLO wine trademark on October 11, 1990. A
certificate of registration was issued for the GALLO
trademark, but the records do not disclose if the
ERNEST & JULIO GALLO wine trademark was ever
approved by the Director of Patents.
a. They first introduced and sold the wines in the
Philippines circa 1974 within the then U.S.
military facilities only. By 1979, they had
expanded their Philippine market through
authorized distributors and independent outlets.
2. Petitioners claim that GALLO cigarettes have been sold
in the Philippines since 1973, initially by Tobacco
Industries, then by La Campana and finally by Mighty
Corporation.
a. The BIR approved Tobacco Industries use of
GALLO 100s cigarette mark on September 14,
1973 and GALLO filter cigarette mark on March
26, 1976, both for the manufacture and sale of
its cigarette products.
b. In May 1984, Tobacco Industries assigned the
GALLO cigarette trademark to La Campana
which, on July 16, 1985, applied for trademark
registration in the Philippine Patent Office. On
July 17, 1985, the National Library issued a
certificate of copyright registration for La
Campanas lifetime copyright claim over
GALLO cigarette labels.
c. La Campana authorized Mighty Corporation to
manufacture and sell cigarettes bearing the
GALLO trademark.
3. Respondents claim that they first learned about the
existence of GALLO cigarettes in the latter part of 1992
when an Andresons employee saw such cigarettes on
display with GALLO wines in a Davao supermarket wine
cellar section.
4. In 1993, respondents sued petitioners in the Makati RTC
for trademark and tradename infringement and unfair
competition.
a. Argument: Petitioners adopted the GALLO
trademark to ride on Gallo Winerys GALLO and
ERNEST & JULIO GALLO trademarks
established reputation and popularity, thus
causing confusion, deception and mistake on
the part of the purchasing public who had
24
Generic terms are those which are commonly used as the name or
description or basic nature of a kind of goods
25
Descriptive terms clearly denotes what goods or services are provided
in such a way that the consumer does not have to exercise powers of
perception or imagination.
 always associated GALLO and ERNEST & another. It is not
JULIO GALLO trademarks with Gallo Winery. necessary that any
5. In their answer, petitioners alleged that: particular means should
a. Petitioners GALLO cigarettes and Gallo be used to this end.
Winerys wines were totally unrelated products;
b. Gallo Winerys GALLO trademark registration Fraudulent intent is Fraudulent intent is
certificate covered wines only, not cigarettes; unnecessary essential
GALLO cigarettes and GALLO wines were sold
through different channels of trade; Prior registration of the Registration is not
c. GALLO cigarettes, sold at P4.60 for GALLO trademark is a prerequisite to necessary
filters and P3 for GALLO menthols, were low- the action
cost items compared to Gallo Winerys high-
priced luxury wines which cost between P98 to More limited but it recognizes Broader and more
P242.50; a more exclusive right inclusive
d. The target market of Gallo Winerys wines was derived from the trademark
the middle or high-income bracket with at least adoption and registration by
P10,000 monthly income while GALLO the person whose goods or
cigarette buyers were farmers, fishermen, business is first associated
laborers and other low-income workers; with it
e. The dominant feature of the GALLO cigarette
mark was the rooster device with the Even if one fails to establish his exclusive property right to a
manufacturers name clearly indicated as trademark, he may still obtain relief on the ground of his
MIGHTY CORPORATION while, in the case of competitors unfairness or fraud.
Gallo Winerys wines, it was the full names of
the founders-owners ERNEST & JULIO GALLO
or just their surname GALLO;
f. By their inaction and conduct, respondents Article 6bis of the Paris Convention - Elements of
were guilty of laches and estoppel; and trademark infringement:
g. Petitioners acted with honesty, justice and good
faith in the exercise of their right to manufacture 1. Registration or use by another person of a trademark
and sell GALLO cigarettes. which is a reproduction, imitation or translation liable to
6. RTC Held petitioners liable for, and permanently create confusion
enjoined them from, committing trademark infringement 2. Of a mark considered by the competent authority of the
and unfair competition with respect to the GALLO country of registration or use to be well-known in that
trademark. country and is already the mark of a person entitled to
7. CA Affirmed the RTC. the benefits of the Paris Convention, and
3. such trademark is used for identical or similar goods.

V. Issues/Held
1. Whether or not the IP Code applies No, the Trademark Sections 2, 2-A, 9-A, 20 and 22 of the Trademark Law -
Law and the Paris Convention are the applicable laws. Elements of trademark infringement:
2. Whether actual commercial use in the Ph. of the Gallo
1. A trademark actually used in commerce in the
Cigarette trademark preceded that of the Gallo wine
Philippines and registered in the principal register of the
trademark Yes
Philippine Patent Office
3. Whether or not Respondents GALLO trademark
2. Is used by another person in connection with the sale,
registration is limited to wines only Yes
offering for sale, or advertising of any goods, business
4. Whether or not there is a likelihood of confusion,
or services or in connection with which such use is likely
mistake, or deceit as to the identity or source of the
to cause confusion or mistake or to deceive purchasers
parties' goods or business - No, the many different
or others as to the source or origin of such goods or
features of both products drown out the similarity
services, or identity of such business; or such trademark
between them.
is reproduced, counterfeited, copied or colorably
5. Whether or not wines and cigarettes are identical,
imitated by another person and such reproduction,
similar, competing, or related goods - No
counterfeit, copy or colorable imitation is applied to
6. Whether or not the Gallo wine trademark is a well-known
labels, signs, prints, packages, wrappers, receptacles or
mark in the context of the Paris convention - No
advertisements intended to be used upon or in
7. Whether or not the petitioners are liable for unfair
connection with such goods, business or services as to
competition - No
likely cause confusion or mistake or to deceive
VI. Laws and Concepts
purchasers,
Trademark Infringement Unfair Competition
3. The trademark is used for identical or similar goods, and
4. Such act is done without the consent of the trademark
A person shall not be permitted to misrepresent his goods
registrant or assignee.
or his business as the goods or business of another

Unauthorized use of a Passing off of one's In summary, the Paris Convention protects well-known
trademark goods as those of trademarks only, 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. In case of conflict, the trademark
law prevails.
Under 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.
Types of Confusion
1. 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.
2. 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.
Whether a trademark causes confusion and is likely to
deceive the public hinges on colorable imitation which 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.
Tests in determining similarity and likelihood of
confusion in trademark resemblance
1. Dominancy Test
Focuses on the similarity of the prevalent features of the
competing trademarks which might cause confusion or
deception, and thus infringement. If the competing
trademark contains the main, essential or dominant
features of another, and confusion or deception is likely
to result, infringement takes place.
Duplication or imitation is not necessary; nor is it
necessary that the infringing label should suggest an
effort to imitate.
The question is whether the use of the marks involved is
likely to cause confusion or mistake in the mind of the
public or deceive purchasers
2. Holistic or Totality Test
Requires that the entirety of the marks in question be
considered in resolving confusing similarity.
Comparison of words is not the only determining factor.
The trademarks in their entirety as they appear in their
respective labels or hang tags must also be considered
in relation to the goods to which they are attached.
The discerning eye of the observer must focus not only
on the predominant words but also on the other features
appearing in both labels in order that he may draw his
conclusion whether one is confusingly similar to the
other.[
In determining the likelihood of confusion, the Court must
consider:
1. The resemblance between the trademarks;
2. The similarity of the goods to which the trademarks are
attached
3. The likely effect on the purchaser and [d] the registrants
express or implied consent and other fair and equitable
considerations
Related Goods
When goods are so related that the public may be, or is
actually, deceived and misled that they come from the
same maker or manufacturer, trademark infringement
occurs.[92]
Non-competing Goods
Those which, though they are not in actual competition,
are so related to each other that it can reasonably be
assumed that they originate from one manufacturer, in
which case, confusion of business can arise out of the
use of similar marks.
They may also be those which, being entirely unrelated,
cannot be assumed to have a common source; hence,
there is no confusion of business, even though similar
marks are used.
There is no trademark infringement if the public does not
expect the plaintiff to make or sell the same class of
goods as those made or sold by the defendant.
In resolving whether goods are related, several factors come
into play:
the business (and its location) to which the goods belong
the class of product to which the goods belong
the product's quality, quantity, or size, including the
nature of the package, wrapper or container
the nature and cost of the articles
the descriptive properties, physical attributes or
essential characteristics with reference to their form,
composition, texture or quality
the purpose of the goods
whether the article is bought for immediate consumption,
that is, day-to-day household items
the fields of manufacture
the conditions under which the article is usually
purchased
the channels of trade through which the goods flow, how
they are distributed, marketed, displayed and sold. A
very important circumstance though is whether there
exists a likelihood that an appreciable number of
 ordinarily prudent purchasers will be misled, or simply
confused, as to the source of the goods in question.
The purchaser is not the completely unwary Law and the Paris Convention are the applicable laws.
consumer but is the ordinarily intelligent buyer
considering the type of product involved. He is
accustomed to buy, and therefore to some extent
familiar with, the goods in question.
The test of fraudulent simulation is to be found in the
likelihood of the deception of some persons in some
measure acquainted with an established design and
desirous of purchasing the commodity with which that
design has been associated.
The test is not found in the deception, or the possibility
of deception, of the person who knows nothing about the
design which has been counterfeited, and who must be
indifferent between that and the other. The simulation,
in order to be objectionable, must be such as appears
likely to mislead the ordinary intelligent buyer who has a
need to supply and is familiar with the article that he
seeks to purchase.
In the adjudication of trademark infringement, due
regard is given to the goods usual purchasers
character, attitude, habits, age, training and education.
Unfair Competition (Section 29 of the Trademark Law)
Any person who employs deception or any other means
contrary to good faith by which he passes off the goods
manufactured by him or in which he deals, or his
business, or services for those of the one having
established such goodwill, or who commits any acts
calculated to produce said result, is guilty of unfair
competition. It includes the following acts:
o Any person, who in selling his goods shall give 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;
o 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;
o 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.
The universal test question is whether the public is likely
to be deceived. Nothing less than conduct tending to
pass off one mans goods or business as that of another
constitutes unfair competition. Actual or probable
deception and confusion on the part of customers by
reason of defendants practices must always appear
VII. Ratio
Whether or not the IP Code applies No, the Trademark
Respondents sued petitioners on March 12, 1993 for
trademark infringement and unfair competition
committed during the effectivity of the Paris Convention
and the Trademark Law. Thus, the RTC and CA erred in
retroactively applying the IP Code in this case.
Whether actual commercial use in the Ph. of the Gallo
Cigarette trademark preceded that of the Gallo wine
trademark Yes
Actual use in commerce in the Philippines is an essential
prerequisite for the acquisition of ownership over a
trademark pursuant to Sec. 2 and 2-A of the Trademark
Law.
Respondents never enjoyed the exclusive right to use
the GALLO wine trademark to the prejudice of Tobacco
Industries and its successors-in-interest. By
respondents own judicial admission, the GALLO wine
trademark was registered in the Philippines in November
1971 but the wine itself was first marketed and sold in
the country only in 1974 and only within the former U.S.
military facilities, and outside thereof, only in 1979.
To prove commercial use of the GALLO wine trademark
in the Philippines, respondents presented sales invoice
no. 29991 dated July 9, 1981 addressed to Conrad
Company Inc., Makati, Philippines and sales invoice no.
85926 dated March 22, 1996 addressed to Andresons
Global, Inc., Quezon City, Philippines. Both invoices
were for the sale and shipment of GALLO wines to the
Philippines during that period. However, nothing was
presented to evidence the alleged sales of GALLO wines
in the Philippines in 1974 or, for that matter, prior to July
9, 1981.
Whether or not Respondents GALLO trademark
registration is limited to wines only Yes
The GALLO trademark registration certificates in the
Philippines and in other countries expressly state that
they cover wines only, without any evidence or indication
that registrant Gallo Winery expanded or intended to
expand its business to cigarettes. 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.
If the certificate of registration were to be deemed as
including goods not specified therein, then a situation
may arise whereby an applicant may be tempted to
register a trademark on any and all goods which his mind
may conceive even if he had never intended to use the
trademark for the said goods.
Whether or not there is a likelihood of confusion,
mistake, or deceit as to the identity or source of the
parties' goods or business No, the many different
feautures of both products drown out the similarity
between them.
 Gallo Cigarette Trademark Gallo Winerys Wine and Wines and cigarettes are not identical or competing
Brandy Labels products. Neither do they belong to the same class of
goods. Respondents GALLO wines belong to Class 33
The dominant feature of GALLO Winerys wine while petitioners GALLO cigarettes fall under Class 34.
the GALLO cigarette and brandy labels are The mere fact that one person has adopted and used a
trademark is the device diverse. In many of particular trademark for his goods does not prevent the
of a large rooster facing them, the labels are adoption and use of the same trademark by others on
left, outlined in black embellished with articles of a different description.
against a gold sketches of buildings The RTC and the CAs premises were patently
background. and trees, vineyards insufficient and too arbitrary.
The roosters color is or a bunch of grapes o Anything not only wines and cigarettes
either green or red while in a few, one or can be used for pleasure and relaxation and
green for GALLO two small roosters can be harmful when taken in excess. Indeed, it
menthols and red for facing right or facing would be a grave abuse of discretion to treat
GALLO filters. each other (atop the wines and cigarettes as similar or related
Directly below the large EJG crest, products likely to cause confusion just because
rooster device is the surrounded by leaves they are pleasure-giving, relaxing or potentially
word GALLO. The or ribbons), with harmful. Such reasoning makes no sense.
rooster device is given additional designs in o It is common knowledge that supermarkets sell
prominence in the green, red and yellow an infinite variety of wholly unrelated products
GALLO cigarette packs colors, appear as and the goods here involved, wines and
in terms of size and minor features cigarettes, have nothing whatsoever in common
location on the labels. thereof. with respect to their essential characteristics,
The GALLO mark Directly below or quality, quantity, size, including the nature of
appears to be a fanciful above these sketches their packages, wrappers or containers.
and arbitrary mark for is the entire printed The goods travel in different channels of trade. There is
the cigarettes as it has name of the founder- a distinct price segmentation based on vastly different
no relation at all to the owners, ERNEST & social classes of purchasers.
product but was chosen JULIO GALLO or just Gallo Cigarettes Gallo Wines
merely as a trademark their surname
due to the fondness for GALLO, which Inexpensive Expensive
fighting cocks of the son appears in different
of petitioners president. fonts, sizes, styles Appeal only to simple folks Patronized by middle-to-
GALLO, the Spanish and labels, unlike like farmers, fishermen, high-income earners
word for rooster, was petitioners uniform laborers and other low-
used to appeal to one of casque-font bold- income workers.
their target markets, the lettered GALLO mark.
sabungeros (cockfight GALLO cigarettes are GALLO wines are imported,
aficionados) Philippine-made and distributed and sold in the
On the side of the GALLO On the labels of Gallo petitioners neither claim Philippines through Gallo
cigarette packs are the Winerys wines are printed nor pass off their goods as Winerys exclusive
words MADE BY MIGHTY the words VINTED AND imported or emanating contracts with a domestic
CORPORATION, thus BOTTLED BY ERNEST & from Gallo Winery. entity, which is currently
clearly informing the public JULIO GALLO, Andresons.
as to the identity of the MODESTO,
manufacturer of the CALIFORNIA. GALLO cigarettes are GALLO wines are sold in
cigarettes. distributed, marketed and hotels, expensive bars and
sold through ambulant and restaurants, and high-end
Whether or not wines and cigarettes are identical, sidewalk vendors, small grocery stores and
similar, competing, or related goods No local sari-sari stores and supermarkets.
grocery stores in Philippine
Makati RTC and the CA - Wines and cigarettes are related rural areas, mainly in
products because: (1) they are related forms of vice, harmful Misamis Oriental,
when taken in excess, and used for pleasure and relaxation Pangasinan, Bohol, and
and (2) they are grouped or classified in the same section of Cebu
supermarkets and groceries.
Tobacco and alcohol products may be considered
SC: related only in cases involving special circumstances
which exist only if a famous mark is involved and there
Petitioners use of the GALLO cigarette trademark is not is a demonstrated intent to capitalize on it. Both of these
likely to cause confusion or mistake, or to deceive the are absent in the present case.
ordinarily intelligent buyer of either wines or cigarettes
or both as to the identity of the goods, their source and
origin, or identity of the business of petitioners and Whether or not the Gallo wine trademark is a well-known
respondents. mark in the context of the Paris convention No
 GALLO wines and GALLO cigarettes are neither the
same, identical, similar nor related goods, a requisite
element under both the Trademark Law and the Paris
Convention.
The GALLO trademark cannot be considered a strong
and distinct mark in the Philippines. Respondents do not
dispute the documentary evidence that the Bureau of
Patents, Trademarks and Technology Transfer also
issued on September 4, 1992 Certificate of Registration
No. 53356 under the Principal Register approving
Productos Alimenticios Gallo, S.As application for
GALLO trademark registration and use for its noodles,
prepared food or canned noodles, ready or canned
sauces for noodles, semolina, wheat flour and bread
crumbs, pastry, confectionery, ice cream, honey,
molasses syrup, yeast, baking powder, salt, mustard,
vinegar, species and ice.
Whether or not the petitioners are liable for unfair
competition No
Petitioners never attempted to pass off their cigarettes
as those of respondents. There is no evidence of bad
faith or fraud imputable to petitioners in using their
GALLO cigarette mark.
Other just and equitable considerations
It took respondents almost 20 years to know about the
existence of GALLO cigarettes and sue petitioners for
trademark infringement. Given the long period of time
that petitioners were engaged in the manufacture,
marketing, distribution and sale of GALLO cigarettes
and, on the other, respondents delay in enforcing their
rights, equity, justice and fairness led the SC to rule in
favor of petitioners.
There exists no evidence that petitioners employed
malice, bad faith or fraud, or that they intended to
capitalize on respondents goodwill in adopting the
GALLO mark for their cigarettes which are totally
unrelated to respondents GALLO wines.
McDonalds Corporation and McGeorge Food Industries
Inc. vs. L.C. Big Mak Burger Inc.
August 18, 2004
Carpio, J.
FACTS:
Petitioner McDonald's Corporation (McDo) operates, by itself
or through its franchisees, a global chain of fast-food
restaurants. Petitioner McGeorge Food Industries, a
domestic corporation, is McDos Philippine franchisee. McDo
owns a family of marks including the "Big Mac" mark for its
"double-decker hamburger sandwich." On 18 July 1985, the
Bureau of Patents, Trademarks and Technology (BPTT; now
the Intellectual Property Office) allowed registration of the
"Big Mac" mark in the Principal Register based on McDos
Home Registration in the United States.
Respondent L.C. Big Mak Burger, Inc. (LCBM) is a domestic
corporation which operates fast-food outlets and snack vans
in Metro Manila and nearby provinces. LCBMs menu
includes hamburger sandwiches and other food items. On 21
October 1988, LCBM applied with the BPTT for the
registration of the "Big Mak" mark for its hamburger
sandwiches. McDo opposed the application on the ground
that "Big Mak" was a colorable imitation of its registered "Big
Mac" mark for the same food products.
McDo sued LCBM in the Makati RTC for trademark
infringement and unfair competition. The RTC found LCBM
liable. The CA reversed, holding that no colorable imitation
of the mark exists (applying the holistic test) hence LCBM did
not commit trademark infringement. The CA also held that
LCBM was not guilty of unfair competition because the use
of Big Mak was without malice - it was derived from both the
first names of the mother and father of owner Francis Dy,
whose names are Maxima and Kimsoy.
Hence this petition for review by McDo.
ISSUE and HELD:
WON LCBM is liable for trademark infringement and unfair
competition. YES.
RATIO:
The law applicable to this case is RA 166.
TRADEMARK INFRINGEMENT
Sec. 22 of the said law defines trademark infringement:
Infringement, what constitutes. Any person who shall
use, without the consent of the registrant, any reproduction,
counterfeit, copy or colorable imitation of any registered mark
or trade-name in connection with the sale, offering for sale,
or advertising of any goods
To establish trademark infringement, the following elements
must be shown: (1) the validity of plaintiff's mark; (2) the
plaintiff's ownership of the mark; and (3) the use of the mark
or its colorable imitation by the alleged infringer results in
"likelihood of confusion."
1. Validity of the Mark
A mark is valid if it is "distinctive" and thus not barred from
registration. However, once registered, not only the mark's
validity but also the registrant's ownership of the mark is
prima facie presumed. "Big Mac" falls under the class of
fanciful or arbitrary marks as it bears no logical relation to the
actual characteristics of the product it represents. As such, it
is highly distinctive and thus valid.
2. Plaintiffs Ownership of the Mark
McDo has duly established its exclusive ownership of the
"Big Mac" mark. Although a certain Topacio and the Isaiyas
Group registered the "Big Mac" mark ahead of McDo,
Topacio had already assigned his rights to McDonald's. The
Isaiyas Group, on the other hand, registered its trademark
only in the Supplemental Register. A mark which is not
registered in the Principal Register, and thus not distinctive,
has no real protection.
3. Likelihood of Confusion
The Court has relied on the dominancy test rather than
the holistic test. The dominancy test considers the
dominant features in the competing marks in determining
whether they are confusingly similar. Under the dominancy
test, courts give greater weight to the similarity of the
appearance of the product arising from the adoption of the
dominant features of the registered mark, disregarding minor
differences.
Applying the dominancy test, the Court finds that LCBM's
use of the "Big Mak" mark results in likelihood of
confusion. First, "Big Mak" sounds exactly the same as "Big
Mac." Second, the first word in "Big Mak" is exactly the same
as the first word in "Big Mac." Third, the first two letters in
"Mak" are the same as the first two letters in "Mac." Fourth,
the last letter in "Mak" while a "k" sounds the same as "c"
when the word "Mak" is pronounced. Fifth, in Filipino, the
letter "k" replaces "c" in spelling, thus "Caloocan" is spelled
"Kalookan." In short, aurally the two marks are the same,
with the first word of both marks phonetically the same, and
the second word of both marks also phonetically the same.
Visually, the two marks have both two words and six letters,
with the first word of both marks having the same letters and
the second word having the same first two letters. In spelling,
considering the Filipino language, even the last letters of
both marks are the same. Clearly, LCBM has adopted in "Big
Mak" not only the dominant but also almost all the features
of "Big Mac." Applied to the same food product of
hamburgers, the two marks will likely result in confusion
in the public mind.
Certainly, "Big Mac" and "Big Mak" for hamburgers create
even greater confusion, not only aurally but also visually.
Indeed, a person cannot distinguish "Big Mac" from "Big
Mak" by their sound. When one hears a "Big Mac" or "Big
Mak" hamburger advertisement over the radio, one would
not know whether the "Mac" or "Mak" ends with a "c" or a "k."
McDos aggressive promotion of the "Big Mac" mark, as
borne by their advertisement expenses, has built goodwill
and reputation for such mark making it one of the easily
recognizable marks in the market today. This increases the
likelihood that consumers will mistakenly associate McDos
hamburgers and business with those of LCBM.
UNFAIR COMPETITION
Sec. 29 of RA 166 defines unfair competition, thus: xxxx Any
person who will employ deception or any other means
contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business,
or services for those of the one having established such
goodwill, or who shall commit any acts calculated to produce
said result, shall be guilty of unfair competition, and shall be
subject to an action therefor.
The essential elements of an action for unfair competition are
(1) confusing similarity in the general appearance of the
goods, and (2) intent to deceive the public and defraud a
competitor.
Unfair competition is broader than trademark infringement
and includes passing off goods with or without trademark
infringement. Trademark infringement is a form of unfair
competition. Trademark infringement constitutes unfair
competition when there is not merely likelihood of confusion,
but also actual or probable deception on the public because
of the general appearance of the goods.
LCBMs goods are hamburgers which are also the goods
of McDo. If LCBM sold egg sandwiches only instead of
hamburger sandwiches, their use of the "Big Mak" mark
would not give their goods the general appearance of
McDo's "Big Mac" hamburgers. In such case, there is only
trademark infringement but no unfair competition. However,
since LCBM chose to apply the "Big Mak" mark on
hamburgers, just like McDo's use of the "Big Mac" mark on
hamburgers, LCBM have obviously clothed their goods with
the general appearance of McDos goods.
Also, there is actually no notice to the public that the
"Big Mak" hamburgers are products of "L.C. Big Mak
Burger, Inc." and not those of McDo who have the
exclusive right to the "Big Mac" mark. This clearly shows
LCBMs intent to deceive the public. Had LCBM placed a
notice on their plastic wrappers and bags that the
hamburgers are sold by "L.C. Big Mak Burger, Inc.", then
they could validly claim that they did not intend to deceive
the public. In such case, there is only trademark infringement
but no unfair competition. LCBM, however, did not give such
notice.
THE REMEDIES
The SC affirms the ruling of the RTC:
Under Sec. 23 of RA 166, a plaintiff who successfully
maintains trademark infringement and unfair competition
claims is entitled to injunctive and monetary reliefs. Here, the
RTC did not err in issuing the injunctive writ and in ordering
the payment of P400,000 actual damages in favor of McDo.
The injunctive writ is indispensable to prevent further acts of
infringement by LCBM. Also, the amount of actual damages
is a reasonable percentage (11.9%) of LCBMs gross sales
for three (1988-1989 and 1991) of the six years (1984-1990)
LCBM have used the "Big Mak" mark.
The RTC also did not err in awarding exemplary damages by
way of correction for the public good in view of the finding of
unfair competition where intent to deceive the public is
essential. The award of attorney's fees and expenses of
litigation is also in order.
McDonalds Corporation v Macjoy Fastfood Corp.
GR 166115 || Feb. 2, 2007 || Garcia, J.
Digest by Norly
Facts: (Trivia: MacJoy after this decision became MyJoy)
1. On 14 March 1991, MacJoy Fastfood
Corporation (MacJoy), a domestic corporation
engaged in the sale of fast food products in Cebu
City, filed with the then Bureau of Patents,
Trademarks and Technology Transfer (BPTT) an
application for the registration of the trademark
MACJOY & DEVICE for fried chicken, chicken
 barbeque, burgers, fries, spaghetti, palabok, tacos,
sandwiches, halo-halo and steaks under classes 29
and 30 of the International Classification of Goods.
2. McDonalds Corporation (McDo), a foreign
corporation, filed a verified Notice of Opposition
claiming that the trademark MACJOY & DEVICE so
resembles its corporate logo (Golden Arches or M
design), and its marks McDonalds, McChicken,
MacFries, BigMac, McDo, McSpaghetti, McSnack,
and Mc (MCDONALDS marks).
3. MacJoy denied the allegations of McDo and averred
that: a) it has used the mark MACJOY for the past
many years in good faith (since 1987) especially in
Cebu City whereas McDo only opened its outlet
here in 1992, and b) its use of said mark would not
confuse affiliation with the McDO because of the
differences in the design and detail of the 2 marks.
4. IPO's decided in favor of Mcdo (dominancy test):
the predominance of the letter M, and the
prefixes Mac/Mc in both the MACJOY and the
MCDONALDS marks lead to the conclusion that
there is confusing similarity between them
especially since both are used on almost the same
products falling under classes 29 and 30 of the
International Classification of Goods (i.e food and
ingredients).
5. CA reversed (holistic test): IPO brushed aside and
rendered useless the glaring and drastic
differences and variations in style of the two
trademarks26 (font, color, design of logo and faade
of store) and even decreed that these pronounced
differences are miniscule and considered them to
have been overshadowed by the appearance of the
predominant features such as M, Mc, and Mac
appearing in both MCDONALDS and MACJOY
marks.
Issues:
1. WON there is a confusing similarity between the
MCDONALDS marks and the respondents
MACJOY & DEVICE trademark when applied to
Classes 29 and 30 of the International Classification
of Goods YES
2. Who between the two has ownership over said
marks - MCDO
Holding: CA reversed; IPO reinstated
Ratio:
1. Applying the dominancy test, Mcdo and MacJoy
marks are confusingly similar with each other
such that an ordinary purchaser can conclude
an association or relation between the marks.
> TESTS FOR INFRINGEMENT:
Dominancy test - focuses on the similarity of the
prevalent features of the competing trademarks
that might cause confusion or deception.
Holistic test - requires the court to consider the
entirety of the marks as applied to the products,
including the labels and packaging, in determining
confusing similarity.
26
1. The word MacJoy is written in round script while the word
McDonalds is written in single stroke gothic
2. The word MacJoy comes with the picture of a chicken head with cap
and bowtie and wings sprouting on both sides, while the word
> WHAT TEST TO APPLY: Look at precedents with
similar factual milieu
In trademark cases, no set rules can be deduced
because each case must be decided on its merits.
In such cases, even more than in any other litigation,
precedent must be studied in the light of the facts of
the particular case.
> AS APPLIED:
Dominancy test should be applied because in
recent cases with a similar factual milieu as here,
the Court has consistently used and applied said
test (McDonalds Corp. v. LC Big Mak Burger, Inc
and Societe Des Produits Nestle, S.A. v. CA)
Prevalent feature(s): M, Mc and/or Mac
o The first letter M in both marks puts
emphasis on the prefixes Mc and/or Mac by
the similar way in which they are depicted
i.e. in an arch-like, capitalized and stylized
manner.
o It is the prefix Mc, an abbreviation of Mac,
which visually and aurally catches the
attention of the consuming public.
Covers same goods: Both trademarks are used in
the sale of fastfood products. MacJoy's trademark
application covers goods under Classes 29 and 30
of the International Classification of Goods.
Differences in style of device are miniscule
variations which are overshadowed by the
predominant features: The differences and
variations in styles as the device depicting a head of
chicken with cap and bowtie and wings sprouting on
both sides of the chicken head, the heart-shaped M,
and the stylistic letters in MACJOY & DEVICE; in
contrast to the arch-like M and the one-styled gothic
letters in McDonalds marks are of no moment.
2. Mcdo has duly established its ownership of the
marks.
> DOCTRINE: Once registered, the marks validity and the
registrants ownership thereof is prima facie presumed.
> AS APPLIED:
Mcdo registered first: Pursuant to Section 37 of
RA 166, as amended, as well as the Paris
Convention, Mcdowas able to register its
MCDONALDS marks successively, i.e.,
McDonalds in 04 October, 1971; the corporate
logo which is the M or the golden arches design
and the McDonalds with the M or golden arches
design both in 30 June 1977. On the other hand, it
is MacJoy's application for registration of its
trademark MACJOY & DEVICE was filed only on
March 14, 1991 albeit the date of first use in the
Philippines was December 7, 1987
MacJoy's use on Dec. 7, 1987 doesn't matter:
MacJoy's contention that it was the first user of the
mark since December, 1987 at Cebu City while the
first McDonalds outlet of the petitioner thereat was
opened only in 1992, is downright unmeritorious.
For the requirement of actual use in commerce x x
x in the Philippines before one may register a
trademark, trade-name and service mark under the
McDonalds comes with an arches M in gold colors, and absolutely
without any picture of a chicken;
3. The word MacJoy is set in deep pink and white color scheme while
McDonalds is written in red, yellow and black color combination;
4. The facade of the respective stores of the parties are entirely different.
 Trademark Law pertains to the territorial jurisdiction
of the Philippines and is not only confined to a
certain region, province, city or barangay.
MacJoy failed to overcome prima facie
presumption of validity of McDo's trademark:
Likewise wanting in merit is MacJoy's claim that the
McDo cannot acquire ownership of the word Mac
because it is a personal name which may not be
monopolized as a trademark as against others of the
same name or surname. MacJoy's explanation that
the word MACJOY is based on the name of its
presidents niece, Scarlett Yu Carcell, is implausible.
Skechers USA v. Inter Pacific Trading
23 March 2011; Peralta, J.
Digest prepared by Dianne Cadorna
I. Facts
1. Petitioner Skechers registered the trademark
SKECHERS and the trademark S (within an oval
design) with the IPO.
2. Alleging that respondent Inter Pacific Trading (IPT)
committed trademark infringement under Sec.155,
in relation to Sec. 170 of the IP Code, Skechers
applied for search warrants with the RTC Manila
against IPTs outlet and warehouse.
3. The RTC issued the warrants, on the strength of
which, a raid was then conducted on the said
premises where more than 6,000 pairs of shoes
bearing the S logo were seized.
4. IPT moved to quash the search warrants, arguing
that there was no confusing similarity between
Skechers rubber shoes and its Strong rubber
shoes.
5. The RTC granted the motion, holding that Skechers
rubber shoes and Strong rubber shoes have glaring
differences such that an ordinary prudent purchaser
would not likely be misled or confused in purchasing
the wrong article. The CA affirmed. The RTC and
CA both used the Holistic or Totality Test27 in
arriving at their conclusions (See Ratio for
discussion on the tests)
6. The SC, in its earlier ruling, likewise affirmed. Thus,
Skechers, together with intervenor Trendworks,
which is claiming to be the sole licensed distributor
27
a. The mark S found in Strong Shoes is not enclosed in an oval
design.
b. The word Strong is conspicuously placed at the backside and
insoles.
c. The hang tags and labels attached to the shoes bears the word
Strong for respondents and
Skechers U.S.A. for private complainant.
d. Strong shoes are modestly priced compared to the costs of Skechers
Shoes.
28
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
of Skechers products in the Philippines, filed the
instant MR.
II. Issues
WON IPT is guilty of trademark infringement YES.
III. Holding
MR granted.
IV. Ratio
1. Sec. 15528 of the IP Code provides the instances of
trademark infringement.
2. The essential element of infringement under such
section is that the infringing mark is likely to
cause confusion.
3. In determining similarity and likelihood of confusion,
jurisprudence has developed two tests: the
Dominancy Test and the Holistic or Totality Test
Dominancy Test - focuses on the similarity of
the prevalent or dominant features of the
competing trademarks that might cause
confusion, mistake, and deception in the mind
of the purchasing public; gives emphasis on the
aural and visual impressions.
Holistic or Totality Test considers the
entirety of the marks as applied to the products,
including the labels and packaging, in
determining confusing similarity.
4. Further, jurisprudence has noted two types of
confusion:
Confusion of goods - ordinarily prudent
purchaser would be induced to purchase one
product in the belief that he was purchasing the
other; and
Confusion of business - although the goods
of the parties are different, the product, for
which one has made an application for
registration of trademark, is such as would yield
the impression that it originated from the
registrant of an earlier product, and the public
would then be deceived either into that belief or
into the belief that there is some connection
between the two parties, though inexistent.
5. Application of the two tests:
Dominancy Test
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 the 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.
 - While it is undisputed that Skechers unfair competition, even if not all the details are
stylized S is within an oval design, the identical, as long as the general appearance of
dominant feature of the trademark is the the two products are such that any ordinary
stylized S, as it is precisely the stylized purchaser would be deceived, the imitator
S which catches the eye of the purchaser. should be liable.
- Thus, even if IPT did not use an oval
7. Neither can the difference in price be a complete
design, the mere fact that it used the
defense in trademark infringement. This is
same stylized S in its Strong rubber
because the registered trademark owner may use
shoes (with similar looking font and size of
its mark on the same or similar products, in different
lettering) already constitutes
segments of the market, and at different price levels
infringement.
depending on variations of the products for specific
- The likelihood of confusion is present as
segments of the market. The purchasing public
purchasers will associate IPTs use of the
might be mistaken in thinking that Skechers had
stylized S as having been authorized by
ventured into a lower market segment such that it is
Skechers or that IPTs product is connected
not inconceivable for the public to think that Strong
with Skechers.
or Strong Sport Trail might be associated or
Holistic Test
connected with the Skechers brand, especially
- While there may be dissimilarities
since both involve rubber shoes.
between the appearances of the two shoes
(See FN 1), such dissimilarities do not 8. The protection of trademarks as intellectual property
outweigh the stark and blatant is intended not only to preserve the goodwill and
similarities in their general features. reputation of the business established on the goods
- Comparing Skechers Energy model and bearing the mark through actual use over a period
IPTs Strong rubber shoes reveals: of time, but also to safeguard the public as
o The two have the same color scheme consumers against confusion on these goods.
of blue, white and gray.
o The two have very similar (if not exact)
design and wavelike pattern of the 084. Cagayan Valley Enterprises v. Court of Appeals
midsole and outer sole. G.R. No. 78413/8 November 1989/Second Division/Petition
o Both have two elongated designs in for Review on Certiorari
practically the same location at the side Cagayan Valley Enterprises, Inc. (Represented by its
of the midsole near the heel. President, Rogelio Q. Lim) petitioner
o The outer soles of both shoes have the Court of Appeals and La Tondea, Inc. respondents
same number of ridges. Decision by J. Regalado, Digest by Pip
o Both have the stylized S in the exact
Short Version: LTI filed a case against CVEI to enjoin the
location.
use of the formers gin bottles. CVEI argued that because the
o On top of the tongue of both shoes
words property of and Registered Phil. Patent Office were
appears the stylized S in practically
not on the bottles, notwithstanding the labels La Tondea,
the same location and size.
Inc. and Ginebra San Miguel, LTI was not entitled to
o At the back of the former, near the heel
protection against unauthorized use. The Court explained
counter, appears Skechers Sport
that under the law (R.A. 623, requiring the marking of
Trail written in white lettering.
bottles), all that was necessary was a mark indicating the
However, on the latter appears Strong
manufacturer or the name of the product.
Sport Trail noticeably written in the
same white lettering, font size,
Facts: In 1953, pursuant to R.A. 62329, La Tondea, Inc.
direction and orientation as that of the
(hereafter LTI) registered with the Philippine Patent Office
former.
the 350 cc white flint bottles it had been using for its gin,
o Both have two grayish-white semi-
popularly known as Ginebra San Miguel. The registration
transparent circles on top of the heel
was renewed in December 1974.
collar.
- Based on the foregoing, even the
In November 1981, LTI filed a civil case for injunction
application of the holistic test, contrary to
and damages30 in the Court of First Instance of Isabela
the findings of the RTC and the CA, would
against Cagayan Valley Enterprises, Inc. (lets call it CVEI)
yield a finding of colorable imitation.
for using LTIs marked bottles by filling them with CVEIs
- The dissimilarities between the shoes
Sonny Boy liquor and selling them. This commercial use
are too trifling and frivolous as
was done without LTIs written consent and LTI argued that
compared to the above noted
this constituted a violation of Section 2 of R.A. 623, as
similarities, that it is indubitable that
amended. The CFI issued a temporary restraining order
IPTs products will cause confusion and
against CVEI.
mistake in the eyes of the public.
In its answer, CVEI argued that LTI had no cause of
6. As held in Converse Rubber Corporation v. Jacinto action due to its failure to comply with Section 21 of R.A. 166,
Rubber & Plastic Co., Inc., which was a case for

29
An Act to Regulate the Use of Duly Stamped or Marked Bottles. Boxes, 30
On the same day, an ex parte petition for the issuance of a writ of preliminary
Casks, Kegs, Barrels and Other Similar Containers. injunction.
which requires giving notice that its marks are registered by
displaying and printing the words Registered in the Phil.
Patent Office or at least Reg. Phil. Pat. Off.31. Moreover,
LTI was not protected under R.A. 623 because its products,
consisting of hard liquor, were not among those
contemplated in that law.32 Third, LTI did not reserve
ownership of its bottles in its sales invoices or require any
deposit for the retention of the bottles. Fourth, CVEI did not
infringe LTIs goods or products because it slapped on its
own labels and trademark on its products. Finally, CVEI
wasnt using LTIs bottles at all because the words property
of werent stamped onto the bottles, despite the glaring La
Tondea, Inc. and Ginebra San Miguel on them.
In December 1981, upon filing of bond by LTI, the CFI
issued a writ of preliminary injunction. After a protracted
trial33, the CFI ruled in favor of CVEI and even awarded
damages. LTI appealed the decision, and in December 1986,
the Court of Appeals ruled in LTIs favor. The CA ruled that
there was no need for LTI to display the words Reg. Phil.
Pat. Off. in order to bring suit to stop the illegal use of its
bottles. The marks should have been sufficient notice to
CVEI that the bottles could not be used without LTIs
permission. Second, there was no material difference
between the bottles which carried the words property of and
the bottles which were merely marked La Tondea, Inc.
and Ginebra San Miguel. Furthermore, finding that there
was bad faith, the CA awarded temperate and exemplary
damages, as well as attorneys fees. CVEIs motion for
reconsideration was denied.
Issue: Was it necessary for LTI to have the words Reg. Phil.
Pat. Off. and property of on its bottles in order to claim
protection against unauthorized use by others? NO.
Ruling: Petition denied, CA affirmed.
Ratio: The pertinent provisions of R.A. 623, as amended, are
as follows
Section 1. Persons engaged or licensed to
engage in the manufacture, bottling, or selling of
soda water, mineral or aerated waters, cider,
milk, cream or other lawful beverages in bottles,
boxes, casks, kegs, or barrels and other similar
containers, or in the manufacturing, compressing
or selling of gases such as oxygen, acytelene,
nitrogen, carbon dioxide ammonia, hydrogen,
chloride, helium, sulphur, dioxide, butane, propane,
freon, melthyl chloride or similar gases contained in
steel cylinders, tanks, flasks, accumulators or
similar containers, with the name or the names of
their principals or products, or other marks of
ownership stamped or marked thereon, may
register with the Philippine Patent Office a
description of the names or marks, and the
purpose for which the containers so marked and
used by them, under the same conditions, rules,
and regulations, made applicable by law or
regulation to the issuance of trademarks.
31
Seriously.
32
According to CVEI, the law only protected beverages like Coca-Cola, Royal
Tru-Orange, Lem-o-Line and similar beverages.
Section 2. It shall be unlawful for any person,
without the written consent of the manufacturer,
bottler, or seller, who has successfully
registered the marks of ownership in
accordance with the provisions of the next
preceding section, to fill such bottles, boxes,
kegs, barrels, steel cylinders, tanks, flasks,
accumulators or other similar containers so marked
or stamped, for the purpose of sale, or to sell,
disposed of, buy or traffic in, or wantonly destroy the
same, whether filled or not, to use the same, for
drinking vessels or glasses or drain pipes,
foundation pipes, for any other purpose than that
registered by the manufacturer, bottler or seller.
Any violation of this section shall be punished by a
fine of not more than one thousand pesos or
imprisonment of not more than one year or both.
Section 3. The use by any person other than the
registered manufacturer, bottler or seller,
without written permission of the latter of any
such bottle, cask, barrel, keg, box, steel cylinders,
tanks, flask, accumulators, or other similar
containers, or the possession thereof without written
permission of the manufacturer, by any junk dealer
or dealer in casks, barrels, kegs boxes, steel
cylinders, tanks, flasks, accumulators or other
similar containers, the same being duly marked or
stamped and registered as herein provided, shall
give rise to a prima facie presumption that such
use or possession is unlawful.
The only exceptions to the foregoing are the use of the
containers for sis, bagoong, patis, and similar native
products. In this case, CVEI admitted the fact that it
bought the bottles from junk dealers and retailers and
used them as containers for its own liquor products.
Under the law, all that was required was the stamping
and marking of the containers with the names of the
manufacturers or the names of their principals or
products, or other marks of ownership.
The phrase name or other mark of ownership under the
law simply means the name of the applicant for registration
or the name of his principal, or of the product, or other mark
of ownership. It does not literally require the words property
of. If the owners of a trademark or trade-name do not lose
protection by making minor modifications to the same, it is
even less likely for a trademark owner to lose protection
because of the mere omission of the words property of ,
since even without the words the ownership of the bottles
was clearly identifiable.
The purpose of R.A. 623 was the protection of the health
of the general public and the prevention of the spread of
contagious diseases, as well as the safeguarding of the
property rights of an important sector of Philippine industry.
CVEIs interpretation of the law would undermine its very
purpose, which included the right to block others from using
ones containers without authorization.34
33
Which included five motions of contempt filed by LTI against CVEI because the
latter continued to use the bottles.
34
Also, CVEIs contention that the law only protects lawful beverages was
unwarranted and specious but the Court dwelt on it at length and even included
Other matters:
Not raised in the petition, but a quick discussion on the
remedy that LTI sought:
While R.A. 623 only provided for a criminal action in case
of violation, the Court explained that a civil action for
damages was warranted under Article 20 of the Civil Code,
which provides that every person who, contrary to law,
willfully or negligently causes damage to another, shall
indemnify the latter for the same. Moreover, under Section
23 of R.A. 166, a person entitled to the exclusive use of a
registered mark or tradename may recover damages in a
civil action from any person who infringes his rights. He may
also, upon proper showing, be granted injunction. While it
does appear to be a requirement that the words Reg. Phil.
Pat. Off. appear on the products to give due notice that the
marks are registered, this would only be material if the case
were filed under the provisions of R.A. 166.
Last bit, as to the damages:
CVEI was in bad faith in using the bottles of LTI. In fact,
there was a previous case involving the essentially the same
parties (LTI and one Diego Lim35, representing Cagayan
Valley Distillery) decided by the CFI of Manila, where the
defendant acknowledged that the bottles marked only with
the words La Tondea, Inc. and Ginebra San Miguel were
the registered bottles of LTI. The Court pierced the corporate
veil in coming to this conclusion.
Voting: Paras, Padilla and Sarmiento, JJ., concur.
Melencio-Herrera (Chairperson), J., on leave.
Distillera Washington v. CA
Summary: LTDI sued DWI so that the former could recover
its marked gin bottles which it sold to the latter (with the gin
product in it), and which, it is alleged, the latter has been
using for its own purposes without LTDIs written consent.
SC finds that the marked gin bottles are within the protection
of RA 623, as LTDI was able to register the mark on such
container; however, it held that since the trademark and the
bottles (the object to which the trademark attaches to) are
separate and distinct properties, ownership over the former
does not necessarily amount to ownership over the latter,
and in this case, since the beverage (consisting of the gin
and the marked bottles containing the same) was sold to
DWI, the latter acquired ownership and legal right to possess
the bottles, notwithstanding that the registered marks on the
same are owned by and registered in the name of LTDI.
an in-depth statutory construction lesson on ejusdem generis. Basically, even
hard liquor is protected, since it is a lawful beverage, despite the fact that it was
not among those expressly enumerated in the law.
facts of the case
Respondent La Tondea Distillers, Inc. (LTDI) instituted a
replevin suit with damages against petitioner Distilleria
Washington, Inc. (DWI). LTDI, under a claim of ownership,
sought to seize from DWI 18,157 empty 350 c.c. white flint
bottles bearing the blown-in marks of LTDI and Ginebra San
Miguel. LTDI averred that DWI used these bottles for its own
Gin Seven products without prior consent of LTDI.
The RTC granted LTDIs application for replevin. On the
merits, the parties presented the following arguments:
LTDI: Being the owner and registrant of the bottles,
it was entitled to the protection under RA 623, as
amended, notwithstanding its sale of the Ginebra
San Miguel gin product contained in said bottles to
DWI.
DWI: RA 623 should not apply to gin, an alcoholic
beverage which is unlike that of soda water, mineral
or aerated water, ciders, milks, cream, or other
lawful beverages mentioned in the law. In any case,
ownership of the bottles should, considering the
attendant facts and circumstances, be held lawfully
transferred to the buyers (DWI in this case) upon the
sale of the gin and containers at a single price.
The RTC thereafter ruled in favor of DWI, ordering LTDI to
return to DWI the empty bottles, or to pay DWI in case of
failure to effect such return. Upon appeal however, the CA
reversed the RTCs decision, holding that LTDI, as owner of
the bottles which are registered in its name, is authorized to
retain possession of the same.
Thus, DWI brought the instant case before the SC, reiterating
its abovementioned arguments.
issue
1. WON RA 623 applies to alcoholic beverages like gin
YES.
2. [main]WON it is LTDI or DWI that is entitled to possession
of the bottles DWI as buyer of the bottles, which are a
separate and distinct property from the registered mark
itself; but its pointless for LTDI to return the same, so it
should pay DWI instead.
ratio
35
Father of the Lim in this case.
1. RA 623 covers alcoholic beverages like gin; thus,
successful registrants of names or marks of their
containers come under the protection of said law.
RA 623 extends trademark protection in the use of
containers duly registered with the Philippine Patent Office.
Sec. 136 thereof provides the instances when a person may
register a description of the names or marks of the containers
of the items listed therein. Sec. 237 makes it unlawful for
anyone to fill or use the containers for their own purpose
(unless to contain sisi, bagoong, patis and similar native
products), without the written consent of the
manufacturer/bottler/seller who was successfully registered
the marks under Sec. 1. Finally, Sec. 338 creates a prima
facie presumption that the use/possession by person/s other
than the registered manufacturer/bottler/seller of the
containers with the registered name/marks without the
written consent of said manufacturer/bottler/seller is
unlawful.
To come under the protection of RA 623, it is merely required
that the bottles be stamped or marked with the names of the
manufacturers or the names of their principals or products,
or other marks of ownership.
The claim of DWI that gin is not embraced by Sec. 1 of RA
623 is untenable, for the title of the law itself, which reads An
Act to Regulate the Use of Duly Stamped or Marked Bottles,
Boxes, Casks, Kegs, Barrels and Other Similar Containers,
clearly shows the legislative intent to give protection to
all marked bottles and containers of all lawful beverages
regardless of the nature of their contents. The words
other lawful beverages is used in its general sense, referring
to all beverages not prohibited by law. Gin, a kind of hard
liquor, is a beverage which, while regulated, is not
prohibited by law; hence it is within the purview and
coverage of RA 623.
36
SECTION 1. Persons engaged or licensed to engage in the manufacture,
bottling, or selling of soda water, mineral or aerated waters, cider, milk, cream or
other lawful beverages in bottles, boxes, casks, kegs, or barrels, and other
similar containers, or in the manufacture, compressing or selling of gases such
as oxygen, acetylene, nitrogen, carbon dioxide, ammonia, hydrogen, chloride,
helium, sulphur dioxide, butane, propane, freon, methyl chloride or similar gases
contained in steel cylinders, tanks, flasks, accumulators or similar containers,
with their names or the names of their principals or products, or other marks of
ownership stamped or marked thereon, may register with the Philippines Patent
Office a description of the names or marks, and the purpose for which the
containers so marked are used by them, under the same conditions, rules, and
regulations, made applicable by law or regulation to the issuance of trademarks.
37
SEC. 2. It shall be unlawful for any person, without the written consent of the
manufacturer, bottler, or seller, who has successfully registered the marks of
ownership in accordance with the provisions of the next preceding section, to fill
such bottles, boxes, kegs, barrels, steel cylinders, tanks, flasks, accumulators, or
other similar containers so marked or stamped, for the purpose of sale, or to sell,
dispose of, buy or traffic in, or wantonly destroy the same, whether filled or not to
2. While LTDI is clearly the registered owner of the marks
on the gin bottles, it is no longer the case with respect
to the bottles themselves. The gin product having been
sold to DWI, the latter, as buyer, acquired ownership and
right of possession over the bottles containing such
product.
The instant case does not seek to hold DWI liable for
unauthorized use of the containers under Sec. 2 of RA 623.
It is one for replevin with damages, which requires a showing
that LTDI is either the owner or the legal possessor of the
bottles herein question. With this in mind, it is important to
distinguish ownership/possessory title over the bottles from
that over the registered trademark on the same.
A trademark refers to a word, name, symbol, emblem,
sign or device or any combination thereof adopted and
used by a merchant to identify, and distinguish from
others, his goods of commerce. It is basically an
intellectual creation that is susceptible to ownership and,
consistently therewith, gives rise to its own elements of
ownership. The incorporeal right, however, is distinct
from the property in the material object subject to
it. Ownership in one does not necessarily vest ownership in
the other. Thus, the transfer or assignment of the intellectual
property will not necessarily constitute a conveyance of the
thing it covers, nor would a conveyance of the latter imply the
transfer or assignment of the intellectual right.
Noting the above definition of a trademark and its severability
from the material or object to which it attaches, it is no longer
difficult to imagine how ownership over the bottles in this
case, and consequently, legal entitlement to
possession, could be transferred to DWI
notwithstanding the fact that LTDI remains to be the
registered owner of the trademark on the said bottles. In
fact, under RA 623, the sale or transfer of ownership of the
marked bottles or containers are not prohibited, and are
implicitly allowed under Secs. 5 and 639 thereof. The last part
use the same for drinking vessels or glasses or drain pipes, foundation pipes, for
any other purpose than that registered by the manufacturer, bottler or seller. Any
violation of this section shall be punished by a fine of not more than one
thousand pesos or imprisonment of not more than one year or both.
38
SEC. 3. The use by any person other than the registered manufacturer, bottler
or seller, without written permission of the latter of any such bottle, cask, barrel,
keg, box, steel cylinders, tanks, flasks, accumulators, or other similar containers,
or the possession thereof without written permission of the manufacturer, by any
junk dealer or dealer in casks, barrels, kegs, boxes, steel cylinders, tanks, flasks,
accumulators or other similar containers, the same being duly marked or
stamped and registered as herein provided, shall give rise to a prima
facie presumption that such use or possession is unlawful.
39
Sec. 5. No action shall be brought under this Act against any person to whom
the registered manufacturer, bottler or seller, has transferred by way of sale, any
of the containers herein referred to, but the sale of the beverage contained in the
said containers shall not include the sale of the containers unless specifically so
provided.
of Sec. 5 stating that the sale of beverage contained in the ownership stamped or marked" on the
said containers shall not include the sale of the containers bottles.
unless specifically so provided is merely meant to provide a iv. Sec. 3 of RA 623 of a prima facie
presumption that unconsented41 use or
presumption (of non-conveyance of the container).
possession is unlawful, does not arise here
because the Court itself found Section 5 as
the law applicable.
v. It is absurd to hold the buyer liable for the
In the instant case, while LTDIs sales invoice may contain a possession and use of its own bottles
stipulation that the sale does not include the bottles with the without the consent of La Tondea who is
blow-in marks of ownership of LTDI, such cannot affect those no longer the owner thereof and for which
who are not privies thereto. it was paid.
vi. To hold the buyer liable would grant La
However, it would be legally absurd to order LTDI to return Tondea the extraordinary right not only of
the bottles to DWI, in light of the presumption under Sec. 3 possession and use of the bottles which it
of RA 623 that the unauthorized use or possession of the has sold and no longer owns, but also to
sell said bottles ad infinitum, thus enriching
marked containers (which was found as a fact by the CA) is
itself unjustly.
unlawful. There being no other logical purpose for DWIs vii. It is manifestly unjust and unconscionable
insistence to keep the bottles, it is enough that LTDI merely that millions of buyers of Ginebra, who pay
be ordered to compensate DWI for the same. not only for the gin but also for the bottles
containing it should run the risk of criminal
prosecution by the mere fact of possession
of the empty bottles after consumption.
II. Holding

Distilleria Washington, Inc. or Washington Distillery, Inc. v. CA is REVERSED in toto. The decision of the RTC is
La Tondea Distillers, Inc. and the CA REINSTATED.

2 October 1997; Kapunan, J. III. Ratio

Digest prepared by Jethro Koon 1. La Tondea not only sold its gin products but also
the marked bottles or containers, as well. And when
I. Facts these products were transferred by way of sale, then
ownership and all its attributes passed to the buyer.
It necessarily follows that the transferee has the
1. Oct. 17, 1996, the SC rendered a decision which
right to possession of the bottles unless he uses
ordering LTDI to pay Washington just compensation
them in violation of the original owner's registered or
for the seized bottles (P18,157.00). First MR was
incorporeal rights.
denied but the SC allowed this second MR.
2. After practically saying that La Tondea has
2. Original decision implicitly acknowledged that there
surrendered ownership and possession, it is
was a valid transfer of the bottles to Washington,
incongruous and unfair to still allow La Tondea,
except that its possession without the written
citing the prima facie presumption of illegal use, to
consent of La Tondea gave rise to a prima facie
retain possession of the seized bottles by simply
presumption of illegal use under R.A. 623.
requiring payment of just compensation to
3. Washington argues the following:
Washington.
i. If Washington had acquired ownership of
3. In resolving that Washington is the owner, the Court
the bottles, La Tondea's suit for replevin,
applied Section 5 of R.A. 623; and in withholding
where the sole issue is possession, should
possession of the bottles from the Washington vis-
be denied.
avis the prima facie presumption, the Court invoked
ii. Since the right of ownership over the
Sections 2 and 3 of the same law.
bottles gives rise, according to the SC, the
A careful reading of the Sections would
collective bundle of rights40, to allow La
lead to the conclusion that they
Tondea to keep the bottles is to deny
contemplate situations separate and
Washington the very attributes or elements
distinct from each other.
of its ownership.
Section 2 prohibits any person from using,
iii. There is no showingand it cannot be
selling or otherwise disposing of registered
assumedthat if Washington would have
containers without the written consent of
possession, it will exercise the other
the registrant. Such rights belong
attributes of ownership over the "marks of

40 jus posidendi, jus utendi, jus fruendi, jus disponendi, and jus
Sec. 6. The provisions of this Act shall not be interpreted as prohibiting the use of abutendi, along with the applicable jus lex
bottles as containers for sisi, bagoong, patis, and similar native products.
41 Written consent.
 exclusively to the registrant. Under Section
3, mere possession of such registered
containers without the written consent of
the registrant is prima facie presumed
unlawful.
4. Sections 2 and 3 apply only when the "filling" up
of the bottle or the "use" of the bottle is "without
the written permission" of the "registered
manufacturer, bottler, or seller," who has
registered the marks of "ownership" of the
bottles. It is thus implicit that they apply only
when the "registered manufacturer, bottler, or
seller" retain ownership of the bottles.
5. Upon the other hand, when the bottles have
been "transferred by way of sale," Section 5
applies, thereby precluding the institution of any
action "under this Act," meaning to say, any action
under Sections 2 and 3.
6. The general rule on ownership, therefore, must
apply and Washington must be allowed to enjoy all
the rights of an owner in regard the bottles. What is
proscribed is the use of the bottles in infringement
of another's trademark or incorporeal rights.
7. While others may argue that Section 5 is applicable
only to the immediate transferee of the marked
bottles or container, this matter is best discussed
where the applicability of Sec. 5 is squarely raised.
It must be recalled, however, that this is a case of
replevin, not a violation of the "trademark protection
of the registrant" under R.A. 623 or of the
Trademark Law.
8. Q: Would use of the bottles constitute a violation of
the incorporeal rights of La Tondea over its "marks
of ownership" embossed on the bottles? While
apparently relevant, it would be improper and
premature because:
Violation of the "marks of ownership" has
not been put in issue, the parties did not
have the opportunity to ventilate their
respective positions on the matter. Thus, a
ruling would be violative of due process.
The question calls for a factual
investigation which this Court has generally
not taken upon itself to undertake because
it is not a trier of facts; and
The facts do not provide a sufficient basis
for a fair and intelligent resolution of the
question.
"The Court sees no other insistence to keep
the bottles, except for such continued use."
is rather speculative at this point;
something which was never touched upon
in the proceedings below.
9. If La Tondea's thesis that every possession of the
bottles without the requisite written consent is
illegal, thousands upon thousands of buyers of
Ginebra would be exposed to criminal prosecution
by the mere fact of possession of the empty bottles
after consuming the content.
10. La Tondea is a big and established distillery which
already has captured a big share of the gin market,
estimated to be 90%. Washington, together with
other small distillers (around 40), concedes that it
42
A manufacturer, distiller and bottler of distillery products under the name and
style of Tanduay Distillers, Inc. (TANDUAY).
cannot fight this giant but only asks a share of the
market. It cannot afford to manufacture its own
bottles and just have to rely on recycled bottles to
sell its products. To disallow the use of these
recycled products would necessarily deprive it a
share of the market which La Tondea seeks to
monopolize.
11. We recognize the role of large industry in the
growth of our nascent economy. However, small
industries likewise play a vital role in economic
growth, playing a significant part in the success of
such tiger economies as Korea, Taiwan and
Thailand.
IV. Vitug, dissenting (writer of the previous decision)
1. The Court's ruling did say that the ownership of the
"marked bottles" passed on to the consumer but it
was understood to be subject to the "statutory
limitations on the use of registered containers and
to the trademark rights of the registrant."
2. Republic Act No. 623, which is the law applicable,
prohibits the use of registered bottles or containers
without the written consent of the manufacturer.
This enactment has heretofore been upheld by the
Court in Cagayan Valley Enterprise, Inc. vs. Court
of Appeals.
3. The marked bottles in the instant case were
evidently being used by Washington for its own "Gin
Seven" products without the consent of La Tondea.
The Court of Appeals itself made such a finding of
unauthorized commercial use by petitioner. Our
ponencia did not thus rely merely on the statutory
prima facia presumption.
4. Why else would Washington insist on keeping the
bottles if it were not for its own continued use?
TWIN ACE HOLDINGS CORPORATION, v. CA and
LORENZANA FOOD CORP.
[G.R. No. 123248. October 16, 1997]
BELLOSILLO, J.:
FACTS: TWIN ACE42 filed a complaint for replevin to recover
380,000 bottles used by LORENZANA as containers for their
native products violating RA No. 623 which prohibits the use
of registered bottles and other containers for any purpose
other than that for which they were registered without the
express permission of the owner.
LORENZAN43A moved to dismiss because bottles used as
containers for hard liquor are not protected. But,
assuming otherwise, the right of LORENZANA to use the
bottles as containers for its patis and other native products
was expressly sanctioned by Sec. 6 of the same law and
upheld in Cagayan Valley Enterprises, Inc. v. CA
43
manufactures and exports processed foods and other related products e.g.
patis, toyo, bagoong, vinegar and other food seasonings
RTC dismissed the complaint. CA affirmed because the
exception granted in Sec. 6 for those who use the bottles as
containers for sisi, bagoong, patis and other native products
is applicable to LORENZANA.
TWIN ACE contends that LORENZANA is obliged to pay
just compensation for the use of the bottles because the
exemption is for criminal sanction only. The civil liability that
arises from Sec. 5 of RA No 623 expressly reserves for the
registered owner the ownership of the containers
notwithstanding the sale of the beverage contained therein.
ISSUE:
1. W/N registered containers of hard liquor such as
rhum, gin, brandy and the like are protected by RA
No. 623. YES.
2. [TOPIC: Infringement for Bottles] W/N
LORENZANA is civilly liable NO
3. W/N TWIN ACE has a continuing ownership over
the subject bottles - NO
HOLDING: Decision and resolution of the Court of Appeals
are AFFIRMED
RATIO:
1. Hard liquor, although regulated, is not prohibited by
law and still within the purview of the phrase "other
lawful beverages" protected by RA No. 623 as
amended.44
2. Republic Act No. 62345 as amended was meant to
protect the intellectual property rights of the
registrants of the containers and prevent
unfair trade practices and fraud on the public.
However, the exemption granted in Sec. 6 46 is to provide
assistance and incentive to the small-scale manufacturers of
indigenous native products such as patis, sisi andtoyo who
do not have the capital to buy brand new bottles as
containers nor afford to pass the added cost to the majority
of poor Filipinos who use the products as their daily
condiments or viands.
To fulfil its purpose, the exemption includes civil and criminal
liability otherwise the small-scale manufacturers of the
indigenous native products would not use the registered
bottles.
3. The cost of the container is also included in the
selling price of the product such that the buyer of
liquor or any such product from any store is not
required to return the bottle nor is the liquor placed
44
Cagayan Valley Enterprises, Inc. v. Court of Appeals: Cagayan Valley
Enterprises was enjoined from using the 350 ml. white flint bottles of La Tondea,
Inc., with the marks of ownership "La Tondea, Inc." and "Ginebra San Miguel" for
its own liquor products.
in a plastic container that possession of the bottle is
retained by the store. Thus, the transaction must be
regarded as a sale of the bottles when the purchaser
actually exercised that discretion and decided not to
return them to the vendor47.
DEL MONTE vs. CA
Petitioners: DEL MONTE CORPORATION and
PHILIPPINE PACKING CORPORATION
Respondents: COURT OF APPEALS and SUNSHINE
SAUCE MANUFACTURING INDUSTRIES
G.R. No. L-78325 January 25, 1990, FIRST DIVISION,
CRUZ, J.
Facts:
Del Monte Corporation (Del Monte) is a foreign company
organized in the US and not engaged in business in the
Philippines. Philippine Packing Corporation (Philpack) is
a domestic corp. In 1969, Del Monte granted Philpack
the right to manufacture, distribute and sell in the
Philippines various agricultural products, including
catsup, under the Del Monte trademark and logo.
In 1965, Philpack (authorized by Del Monte) registered
the Del Monte catsup bottle and was granted Certificate
of Trademark by Philippine Patent Office under
Supplemental Register. In 1972, Del Monte obtained 2
registration certificates for trademark "DEL MONTE" and
its logo.
Sunshine Sauce Manufacturing Industries (Sunshine)
was issued a Certificate of Registration by Bureau of
Domestic Trade in 1980, to engage in manufacture,
packing, distribution and sale of various kinds of sauce,
identified by the logo Sunshine Fruit Catsup. This logo
was registered on the Supplemental Register in 1983.
The product itself was contained in various kinds of
bottles, including the Del Monte bottle, which Sunshine
bought from the junk shops for recycling.
Having received reports that Sunshine was using its
exclusively designed bottles and a logo confusingly
similar to Del Monte's, Philpack warned Sunshine to
desist from doing so.
Philpack and Del Monte filed a complaint against
Sunshine for infringement of trademark and unfair
competition, with damages, and the issuance of a writ of
preliminary injunction.
Sunshine alleged it had long ceased to use Del Monte
bottles and that its logo was substantially different from
Del Montes and would not confuse buying public to
detriment of petitioners.
RTC dismissed complaint. It held that there were
substantial differences between logos/trademarks of
45
An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks,
Kegs, Barrels and Other Similar Containers
46
"The provisions of this Act shall not be interpreted as prohibiting the use of
bottles as containers for "sisi," "bagoong," "patis," and similar native products"
47
United States v. Manuel
 parties; that Sunshine had ceased using Del Monte
bottles; that in any case Sunshine became owner of said
bottles upon its purchase from the junk yards; and that
complainants had failed to establish Sunshine's malice
or bad faith, which was an essential element of
infringement of trademark or unfair competition. CA
affirmed in toto.
Issue: Whether or not Sunshine is guilty of infringement
and unfair competition? YES
Held: Petition is GRANTED. CA decision REVERSED.
Sunshines Certificate of Registration is cancelled. Sunshine
is permanently enjoined from using label similar to Del
Montes, prohibited from using Del Monte empty bottles as
containers for its own products, and ordered to pay
petitioners P1,000 as nominal damages and costs of suit.
Ratio: Section 22 and 29 of R.A. No. 166, otherwise known
as Trademark Law:
Sec. 22. Infringement, what constitutes. Any person who
shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any
registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely to
cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services or
identity of such business; or reproduce, counterfeit copy or
colorably imitate any such mark or trade name and apply
such reproduction, counterfeit copy or colorable imitation to
labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection
with such goods, business or services, shall be liable to a
civil action by the registrant for any or all of the remedies
herein provided.
Sec. 29. Unfair competition, rights and remedies. A
person who has identified in the mind of the public the goods
he manufactures or deals in, his business or services from
those of others, whether or not a mark or tradename 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. Such
a person shall have the remedies provided in section twenty-
three, Chapter V hereof.
(a) Any person, who in selling his goods shall give 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 likely 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
ally 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.
To arrive at a proper resolution of this case, it is important to
bear in mind the following distinctions between infringement
of trademark and unfair competition.
1) Trademark Infringement 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, fraudulent intent is unnecessary; in unfair
competition fraudulent intent is essential.
3) In infringement, prior registration is prerequisite to action;
in unfair competition registration is not necessary. Xxxxxx
Del Monte: Sunshine:
1. shape Semi-rectangular Regular rectangle.
of label with a crown or
or make tomato shape
design on top of
the rectangle.

Any person who shall employ deception or any other means 2. brand Tomato catsup Fruit catsup.
contrary to good faith by which he shall pass off the goods printed mark.
manufactured by him or in which he deals, or his business, on label
or services for those of the one having established such
goodwill, or who shall commit any acts calculated to produce 3. words Clearly indicated "made in the
said result, shall be guilty of unfair competition, and shall be or words packed by Philippines by
subject to an action therefor. lettering Sysu International, Sunshine Sauce
on label Inc., Q.C., Manufacturing
In particular, and without in any way limiting the scope, the or mark Philippines. Industries" No. 1 Del
following shall be deemed guilty of unfair competition: Monte Avenue,
 Malabon, Metro purchase. The buyer having in mind the mark/label
Manila. of the respondent must rely upon his memory of the
petitioner's mark. Unlike the judge who has ample
4. color Combination of White, light green time to minutely examine the labels in question in
of logo yellow and dark and light red, with the comfort of his sala, the ordinary shopper does
not enjoy the same opportunity.
red, with words words "Sunshine
A number of courts have held that to determine
"Del Monte Quality" Brand" in yellow. whether a trademark has been infringed, we must
in white. consider the mark as a whole and not as dissected.
If the buyer is deceived, it is attributable to the marks
5. shape In the shape of a Entirely different in as a totality, not usually to any part of it. The court
of logo tomato. shape. therefore should be guided by its first impression, for
a buyer acts quickly and is governed by a casual
6. label Seal covering the There is a label glance, the value of which may be dissipated as
below cap down to the below the cap which soon as the court assumes to analyze carefully the
respective features of the mark.
cap neck of the bottle, says "Sunshine
It has also been held that it is not the function of the
with picture of Brand." court in cases of infringement and unfair competition
tomatoes with to educate purchasers but rather to take their
words "made from carelessness for granted, and to be ever conscious
real tomatoes." of the fact that marks need not be identical. A
confusing similarity will justify the intervention of
7. color Darker red. Lighter than Del equity. The judge must also be aware of the fact
of Monte. that usually a defendant in cases of infringement
product does not normally copy but makes only colorable
changes. Well has it been said that the most
successful form of copying is to employ enough
points of similarity to confuse the public with enough
points of difference to confuse the courts. Xxxxxx
While the Court does recognize these distinctions, it At that, even if labels were analyzed together it is
does not agree with the conclusion that there was not difficult to see Sunshine label is a colorable
no infringement or unfair competition. It seems to imitation of Del Monte trademark. Predominant
us that the lower courts have been so pre- colors used in the Del Monte label are green and
occupied with the details that they have not seen red-orange, the same with Sunshine. The word
the total picture. "catsup" in both bottles is printed in white and the
It has been correctly held that side-by-side style of the print/letter is the same. Although the logo
comparison is not the final test of similarity. Such of Sunshine is not a tomato, the figure nevertheless
comparison requires a careful scrutiny to determine approximates that of a tomato.
in what points the labels of the products differ, as As previously stated, the person who infringes a
was done by the trial judge. The ordinary buyer does trade mark does not normally copy out but only
not usually make such scrutiny nor does he usually makes colorable changes, employing enough points
have the time to do so. The average shopper is of similarity to confuse the public with enough points
usually in a hurry and does not inspect every of differences to confuse the courts. What is
product on the shelf as if he were browsing in a undeniable is the fact that when a manufacturer
library. Where the housewife has to return home as prepares to package his product, he has before him
soon as possible to her baby or the working woman a boundless choice of words, phrases, colors and
has to make quick purchases during her off hours, symbols sufficient to distinguish his product from the
she is apt to be confused by similar labels even if others. When as in this case, Sunshine chose,
they do have minute differences. Male shopper is without a reasonable explanation, to use the same
worse as he usually does not bother about such colors and letters as those used by Del Monte
distinctions. though the field of its selection was so broad, the
The question is not whether the two articles are inevitable conclusion is that it was done deliberately
distinguishable by their label when set side by side to deceive. Xxxxxx
but whether the general confusion made by the We find that Sunshine is not guilty of infringement
article upon the eye of the casual purchaser who is for having used the Del Monte bottle. The reason is
unsuspicious and off his guard, is such as to likely that the configuration of said bottle was merely
result in his confounding it with the original. As registered in the Supplemental Register.
observed in several cases, the general impression ..although Del Monte has actual use of the bottle's
of the ordinary purchaser, buying under the normally configuration, the petitioners cannot claim exclusive
prevalent conditions in trade and giving the attention use thereof because it has not been registered in
such purchasers usually give in buying that class of the Principal Register. However, we find that
goods is the touchstone. Sunshine, despite the many choices available to it
It has been held that in making purchases, the and notwithstanding that the caution "Del Monte
consumer must depend upon his recollection of the Corporation, Not to be Refilled" was embossed on
appearance of the product which he intends to the bottle, still opted to use petitioners' bottle to
 market a product which Philpack also produces.
This clearly shows Sunshines bad faith and its
intention to capitalize on Del Monte's reputation and
goodwill and pass off its own product as that of Del
Monte. Xxxxxx
As Sunshine's label is an infringement of the Del
Monte's trademark, law and equity call for the
cancellation of Sunshines registration and
withdrawal of all its products bearing the questioned
label from the market. With regard to the use of Del
Monte's bottle, the same constitutes unfair
competition; hence, the respondent should be
permanently enjoined from the use of such bottles.
UNIVERSAL RUBBER PRODUCTS vs. CA
Petitioner: UNIVERSAL RUBBER PRODUCTS, INC
Respondents: HON. COURT OF APPEALS, CONVERSE
RUBBER CORPORATION, EDWARDSON
MANUFACTURING CO., INC. AND HON. PEDRO C.
NAVARRO
G.R. No. L-30266 June 29, 1984, SECOND
DIVISION, GUERRERO, J.
Facts:
The two respondent corporations CONVERSE RUBBER
CORPORATION (CONVERSE) and EDWARDSON
MANUFACTURING CO. (EDWARDSON) sued
petitioner UNIVERSAL RUBBER PRODUCTS
(UNIVERSAL) before the CFI of Rizal for unfair
competition with damages and attorney's fees.
After presenting 9 witnesses and various documentary
evidence, CONVERSE and EDWARDSON made a
request to respondent Judge who issued a subpoena
duces tecum against the treasurer of UNIVERSAL to
bring with him "all sales invoices, sales books and
ledgers wherein are recorded the sales of Plymouth Star
Player rubber shoes from the time the corporation
started manufacturing and selling said shoes up to the
present.
UNIVERSAL filed a motion to quash the subpoena
duces tecum on the grounds that: (1) it is Unreasonable
and oppressive as the books and documents are
numerous and voluminous; (2) there is no good cause
shown for the issuance thereof; and (3) the books and
documents are not relevant to the case pending below.
The respondent Judge denied the motion to quash the
subpoena duces tecum.
UNIVERSAL filed an MR and respondent Judge denied
the MR.
UNIVERSAL filed its present petition for certiorari with
preliminary injunction.
CA issued a TRO directing respondent Judge of trial
court to refrain from implementing his order.
CA rendered its decision denying the petition for
certiorari for lack of merit. TRO was lifted.
Issue: Whether the issuance of the "subpoena duces
tecum" is proper in a suit for unfair competition? YES
Held: Petition DISMISSED for becoming moot and
academic.
Ratio: As a general rule, on obtaining an injunction for
infringement of a trademark, complainant is entitled to an
accounting and recovery of defendant's profits on the goods
sold under that mark, as incident to, and a part of, his
property right, and this rule applies in cases of unfair
competition. In such case, the infringer or unfair trader is
required in equity to account for and yield up his gains on a
principle analogous to that which charges as trustee with the
profits acquired by the wrongful use of the property of the
cestuique trust, and defendant's profits are regarded as an
equitable measure of the compensation plaintiff should
receive for the past harm suffered by him.
Act No. 166,' which provides:
CHAPTER V.Rights and Remedies
xxx xxx xxx
Sec. 23. Actions, and damages and injunction for
infringement. Any person entitled to the exclusive use of
a registered mark or trade name may recover damages in a
civil action from any person who infringes his rights and the
measure of the damages suffered shall be either the
reasonable profit which the complaining party would have
made, had the defendant not infringed his said rights, or the
profit which the defendant actually made out of the
infringement management, or in the event such measure of
damages cannot be readily ascertained with reasonable
certainty, their the court may award as damages a
reasonable percentage based upon the amount of gross
sales of the defendant of the value of the services in
connection with which the mark or trade name was used in
the infringement of the rights of the complaining party. In
cases where actual intent to mislead the public or to defraud
the complaining party shall be shown in the discretion of the
court, the damages may be doubled.
The complaining party, upon proper showing may also be
granted injunction.
In recovering the loss suffered by the aggrieved party due to This is an action for unfair competition.
unfair competition, Sec. 23 of R.A. 166 grants the
complainant three options within which to ascertain the
amount of damages recoverable, either (1) the reasonable
Plaintiff Converse Rubber Corporation - an American
profit which the complaining party would have made, had the
Corporation, manufactures rubber shoes under the trade
defendant not infringed his said rights; or (2) the profit which
name "Converse Chuck Taylor All Star"; in the Philippines, it
the defendant actually made out of the infringement; or (3)
has an exclusive licensee, plaintiff Edwardson
the court may award as damages a reasonable percentage
Manufacturing Corporation. Converse is the owner of
based upon the amount of gross sales of the defendant of
trademarks and patent, registered with United States Patent
the value of the services in connection with which the mark
Office, covering the words "All Star", the representation and
or tradename was issued in the infringement of the rights of
design of a five-pointed star, and the design of the sole. The
the complaining party.
trademark "Chuck Taylor" was registered with the Philippines
Patent Office on March 3, 1966.

In a suit for unfair competition, it is only through the issuance

of the questioned "subpoena duces tecum " that the
Defendant Jacinto Rubber & Plastics Company, Inc., is a
complaining party is afforded his full rights of redress.
local corporation that manufactures and sells canvas rubber
shoes under the trade names "Custombuilt Viscount",
"Custombuilt Challenger", and "Custombuilt Jayson's". Its
The argument that the petitioner should first be found guilty trademark "Custombuilt Jayson's" was registered by the
unfair competition before an accounting for purposes of Philippines Patent Office on November 29, 1957.
ascertaining the amount of damages recoverable can
proceed, stands without merit.. The complaint for unfair
competition is basically a suit for "injunction and damages".
In 1963, Converse and Jacinto entered into negotiations for
Injunction, for the purpose of enjoining the unlawful
a licensing agreement whereby defendant Jacinto would be
competitor from proceeding further with the unlawful
the exclusive licensee for the manufacture and sale of
competition, and damages, in order to allow the aggrieved
"Chuck Taylor" shoes but with the right to continue
party to recover the damage he has suffered by virtue of the
manufacturing and selling its own products. This was on the
said unlawful competition. Hence, the election of the
condition that Jacinto rubber will change the appearance of
complainant (private respondent herein) for the accounting
its Custombuilt shoes. Jacinto rubber agreed. However, the
of petitioner's (defendant below) gross sales as damages per
negotiations failed and Edwardson became the exclusive
R.A. 166, appears most relevant. For Us, to determine the
licensee. Converse thus demanded Jacinto to stop selling its
amount of damages allowable after the final determination of
shoes with identical appearance to its chuck taylors.
the unfair labor case would not only render nugatory the
rights of complainant under Sec. 23 of R.A. 166, but would
be a repetitious process causing only unnecessary delay.
Plaintiffs contend that "Custombuilt" shoes are Identical in
design and General appearance to "Chuck Taylor" and,
claiming prior Identification of "Chuck Taylor" in the mind of
As We said earlier, the establishment of the petitioner burned
the buying public in the Philippines, they contend that
down together with all the records sought to be produced by
defendants are guilty of unfair competition by selling
the questioned "subpoena duces tecum," hence this case
"Custombuilt" of the design and with the general appearance
has become moot and academic. We have no recourse but
of "Chuck Taylor".
to dismiss the same.

Defendants insist that there is no similarity in design and

general appearance between "Custombuilt" and "Chuck
Taylor", pointing out that "Custombuilt" is readily Identifiable
Converse rubber vs jacinto rubber (1980)
by the tradename "Custombuilt" appearing on the ankle
patch, the heel patch, and on the sole. also, the registration
of trademark "Custombuilt" being prior to the registration in
Facts: the Philippines of plaintiff Converse Rubber's trademark
"Chuck Taylor", plaintiffs have no cause of action.
Defendant started to manufacture and sell "Custombuilt" of
its present design and with its present appearance in 1962,
while, "Chuck Taylor" started to be sold in the Philippines in
1946.
CFI found for Converse.
Issue/Ratio:
1. WON there is unfair competition - yes
Custombuilt is practically the same design as Chuck Taylor
(designs, shapes, the colors of the ankle patches, the bands,
the toe patch) such that, from a distance, it is impossible to
distinguish the two.
These elements are more than sufficient to serve as basis
for a charge of unfair competition. Even if not all the details
just mentioned were Identical, with the general appearances
alone of the two products, any ordinary, or even perhaps
even a not too perceptive and discriminating customer could
be deceived, and, therefore, Custombuilt could easily be
passed off for Chuck Taylor. Jurisprudence supports the
view that under such circumstances, the imitator must be
held liable.
"... in cases of unfair competition, while the requisite degree
of resemblance or similarity between the names, brands, or
other indicia is not capable of exact definition, it may be
stated generally that the similarity must be such, but need
only be such, as is likely to mislead purchasers of ordinary
caution and prudence; or in other words, the ordinary buyer,
into the belief that the goods or wares are those, or that the
name or business is that, of another producer or tradesman.
It is not necessary in either case that the resemblance be
sufficient to deceive experts, dealers, or other persons
specially familiar with the trademark or goods involved. Nor
is it material that a critical inspection and comparison would
disclose differences, or that persons seeing the trademarks
or articles side by side would not be deceive."
2. WON sale in Ph commercial market is required in unfair
competition - no
Old jurisprudence requires sale in local market but under the
modern view, unfair competition has been expanded:
"the law of unfair competition has expanded to keep pace
with the times and the elements of strict competition in itself
has ceased to be the determining factor. The owner of a
trademark or trade-name has property right in which he is
entitled to protection, since there is damage to him from
confusion of reputation or goodwill in the mind of the public
as well as from confusion of goods. The modern trend is to
give emphasis to the unfairness of the acts and to classify
and treat the issue as fraud."
In no uncertain terms, the statute on unfair competition
extends protection to the goodwill of a manufacturer or
dealer. It attaches no fetish to the word "competition". In plain
language it declares that a "person who has Identified in the
public the goods he manufactures or deals in, his business
or services from those of others, whether or not a 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." It denominates as "unfair competition" "any acts"
calculated to result in the passing off of other goods "for
those of the one having established such goodwill."
Singularly absent is a requirement that the goodwill sought
to be protected in an action for unfair competition must have
been established in an actual competitive situation. Nor does
the law require that the deception or other means contrary to
good faith or any acts calculated to pass off other goods for
those of one who has established a goodwill must have been
committed in an actual competitive situation.
3. WON the trial court can acquire jurisdiction considering
that Converse rubber is a foreign corp not licensed to do
business in the ph - yes
Western Equipment and Supply Co. v. Reyes, made clear
that the disability of a foreign corporation from suing in the
Philippines is limited to suits "to enforce any legal or contract
rights arising from, or growing out, of any business which it
has transacted in thePhilippine Islands." ... On the other
hand, where the purpose of a suit is "to protect its reputation,
its corporate name, its goodwill, whenever that reputation,
corporate name or goodwill have, through the natural
development of its trade, established themselves," an
unlicensed foreign corporation may sue in the Philippines. So
interpreted by the Supreme Court, it is clear that Section 69
of the Corporation Law does not disqualify plaintiff-appellee
Converse Rubber, which does not have a branch office in
any part of the Philippines and is not "doing business" in the
Philippines, from filing and prosecuting this action for unfair definition implies that only registered trade marks,
competition. trade names and service marks are protected
against infringement or unauthorized use by another
or others. The use of someone else's registered
trademark, trade name or service mark is
Furthermore, Section 21 (a) of Republic Act No. 166, as unauthorized, hence, actionable, if it is done
amended, provides that a foreign corporation, whether or not "without the consent of the registrant."
licensed to transact business in the Philippines may bring an 2. The trademarks, as described by the RTC are (see
action for unfair competition provided the country of which it attached image):
"is a citizen, or in which it is domiciled, by treaty, convention
San Miguel Pale Pilsen
or law, grants a similar privilege to juristic persons in the
With Rectangular Hops
Philippines." The Convention of Paris for the Protection of
and Malt Design
Industrial Property, to which the Philippines adheres,
provides, on a reciprocal basis that citizens of a union A rectangular design A rectangular design
member may file an action for unfair competition and bordered by minute bordered by buds of
infringement of trademarks, patents, etc. in and of the union grains arranged in rows flowers with leaves.
members. The United States of America, of which Converse of three
Rubber is a citizen, is also a signatory to this Convention.
Section 1126 (b) and (h) of Public Law 489 of the United In each corner there are
States of America allows corporations organized under the hop designs.
laws of the Philippines to file an action for unfair competition
in the United States of America, whether or not it is licensed Top (dominant feature): Top (dominant feature):
to do business in the United States. "San Miguel" written "Beer"
horizontally
"Pale Pilsen" appears
Bottom: "Pale Pilsen" immediately below in
written diagonally smaller block letters.
across the middle of the
Asia Brewery, Inc. (ABI) v. CA and San Miguel Corporation design.
(SMC) In between: coat of
5 July 1993; Grio-Aquino, J. arms and the phrase
"Expertly Brewed."
Digest prepared by Jethro Koon
I. Facts The "S" in "San" and the
"M" of "Miguel," "P" of
1. On September 15, 1988, SMC filed a complaint "Pale" and "Pilsen" are
against ABI for infringement of trademark and unfair written in Gothic letters
competition on account of the latter's BEER PALE
with fine strokes of
PILSEN or BEER NA BEER which has been
competing with SAN MIGUEL PALE PILSEN for a serifs, the kind that first
share of the local beer market. appeared in the 1780s
in England and used for
2. On August 27, 1990, a decision was rendered by the
printing German as
RTC, dismissing SMC's complaint because ABI
"has not committed trademark infringement or unfair distinguished from
competition against" SMC. CA reversed. MR was Roman and Italic.
denied. ABI went to the SC on a R45.
Below "Pale Pilsen" is Below "Pale Pilsen" is
II. Issues
the statement "And the statement written in
Whether ABI infringes SMC's trademark and thereby Bottled by" (first line, three lines "Especially
commits unfair competition against SMC. NO "San Miguel Brewery" brewed and bottled by"
III. Holding (second line), and (first line), "Asia Brewery
"Philippines" (third line) Incorporated" (second
RTC decision is REINSTATED and AFFIRMED. Costs line), and "Philippines"
against the SMC. (third line)
IV. Ratio
Above design: "Reg. Left: hop design
1. Infringement of trademark is a form of unfair Phil. Pat. Off."
competition. Sec. 22 of RA 166 (Trademark Law), Right: "Net Contents
defines what constitutes infringement. This Below: "Net Contents:
320 Ml." 320 ml."
3. Infringement is determined by the "test of
dominancy" rather than by differences or variations
in the details of one trademark and of another:
Similarity in size, form and color, while relevant,
is not conclusive. If the competing trademark
contains the main or essential or dominant
features of another, and confusion and
deception is likely to result, infringement takes
place. Duplication or imitation is not necessary;
nor it is necessary that the infringing label
should suggest an effort to imitate.
The question is whether the use of the marks
involved would be likely to cause confusion or
mistakes in the mind of the public or deceive
purchasers.
4. What are the dominant features of the competing
trademarks before us?
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 on an amber background
across the upper portion of the rectangular
design.
The dominant feature of ABI's trademark is the
name: BEER PALE PILSEN, with "Beer" written
in large amber letters, larger than any of the
letters found in the SMC label.
The trial court perceptively observed that the
word "BEER" does not appear in SMC's
trademark, just as the words "SAN MIGUEL" do
not appear in ABI's trademark. Hence, there is
absolutely no similarity in the dominant features
of both trademarks.
5. Neither in sound, spelling, or appearance can BEER
PALE PILSEN be said to be confusingly similar to
SAN MIGUEL PALE PILSEN. No one who
purchases BEER PALE PILSEN can possibly be
deceived that it is SAN MIGUEL PALE PILSEN.
6. Besides the dissimilarity in their names, the
following other dissimilarities in the trade dress or
appearance of the competing products abound:
The San Mig bottle has a slender tapered neck.
The ABI bottle has a fat, bulging neck.
"Pale pilsen" on SMC's label are printed in bold
and laced letters along a diagonal band. "Pale
pilsen" on ABI's are half the size in slender
block letters on straight horizontal band.
The names of the manufacturers are
prominently printed on their respective bottles.
SMC's bottle carries no slogan. On the back of
ABI's bottle is printed in big, bold letters, under
a row of flower buds and leaves, its copyrighted
slogan: "BEER NA BEER!"
The back of the SAN MIGUEL PALE PILSEN
bottle carries the SMC logo, whereas the BEER
PALE PILSEN bottle has no logo.
The San Mig bottle cap is stamped with a coat
of arms and the words "San Miguel Brewery
Philippines" encircling the same. The ABI bottle
cap is stamped with the name "BEER" in the
center, surrounded by the words "Asia Brewery
Incorporated Philippines."
SMC is priced P7 per bottle, ABI is at P4.25 per
bottle (significant price difference in 1993
rates). One who pays only P4.25 for a bottle of
beer cannot expect to receive San Miguel Pale
Pilsen from the storekeeper or bartender.
7. "Pale pilsen" are generic words descriptive of the
color ("pale"), of a type of beer ("pilsen"), which is a
light bohemian beer with a strong hops flavor that
originated in the City of Pilsen in Czechoslovakia
and became famous in the Middle Ages.
(Webster's). "Pilsen" is a "primarily geographically
descriptive word," hence, non-registerable and not
appropriable according to the Trademark Law.
No one may appropriate generic or descriptive
words. They belong to the public domain.
8. Is ABI using a name or mark for its beer that has
previously come to designate SMC's beer, or is ABI
passing off its BEER PALE PILSEN as SMC's SAN
MIGUEL PALE PILSEN?
The universal test question is whether the
public is likely to be deceived.
Nothing less than conduct tending to pass off
one man's goods or business as that of another
will constitute unfair competition. Actual or
probable deception and confusion on the part of
the customers by reason of defendant's
practices must always appear.
9. The use of ABI of amber-colored steinie bottles of
320 ml similar but not identical to the San Mig bottle
(former has a fat bulging neck) does not necessarily
constitute unfair competition.
SMC did not invent but merely borrowed the
steinie from abroad and claims neither patent
nor trademark protection for that bottle shape
and design (it was also never trademark-
registered). Cerveza Especial and the Efes
Pale Pilsen use the "steinie" bottle.
Bottle size, shape and color may not be the
exclusive property of any one beer
manufacturer. SMC's being the first to use the
steinie bottle does not give SMC a vested right
to use it to the exclusion of everyone else.
Being of functional or common use, and not the
exclusive invention of any one, it is available to
all who might need to use it within the industry.
Protection against imitation should be properly
confined to nonfunctional features.
The amber color is a functional feature. All
bottled beer produced in the Phil. is contained
and sold in amber-colored bottles because it is
the most effective color in preventing
 transmission of light and provides the maximum
protection to beer. (SC compared this to
medicine bottles)
That the ABI bottle has a 320 ml. capacity is not
due to a desire to imitate SMC because that
bottle capacity is the standard prescribed under
Metrication Circular No. 778, dated 4 December
1979, of the Department of Trade, Metric
System Board.
ABI explained that it used the color white for its
label because it presents the strongest contrast;
it is also the most economical, and the easiest
to "bake" in the furnace.
SC mentioned that SMC's bottle is registered
under R.A. No. 623 which simply prohibits
manufacturers of other foodstuffs from the
unauthorized rebottling of SMC's bottles by
refilling these with their products (ex. With patis
or toyo)
10. When the names of the competing products are
clearly different and their respective sources are
prominently printed on the label and on other parts
of the bottle, mere similarity in the shape and size of
the container and label, does not constitute unfair
competition.
11. Consumers or buyers of beer generally order their
beer by brand. The customer surrenders his empty
replacement bottles or pays a deposit to guarantee
the return of the empties. If his empties are SAN
MIGUEL, he will get SAN MIGUEL as replacement.
The same is true in sari-sari stores, beer,
restaurants, pubs, and beer gardens.
12. Considering that SAN MIGUEL PALE PILSEN has
virtually monopolized the domestic beer market for
the past hundred years, those who have been
drinking no other beer but SAN MIGUEL PALE
PILSEN these many years certainly know their beer
too well to be deceived by a newcomer in the
market. If they gravitate to ABI's cheaper beer, it will
not be because they are confused or deceived, but
because they find the competing product to their
taste.
13. This case will not diminish "Del Monte Corp. v. CA"
involving catsup which is 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
14. The points of dissimilarity between the two
outnumber their points of similarity.
V. CRUZ, J., dissenting: (ponente of Del Monte v. CA)
1. The average shopper is usually in a hurry and does
not inspect every product on the shelf as if he were
browsing in a library. Where the housewife has to
return home as soon as possible to her baby or the
working woman has to make quick purchases
during her off hours, she is apt to be confused by
similar labels even if they do have minute
differences. The male shopper is worse as he
usually does not bother about such distinctions.
2. The question is not whether the two articles are
distinguishable by their labels when set aside by
side but whether the general confusion made by the
article upon the eye of the casual purchaser who is
unsuspicious and off his guard.
3. To determine whether a trademark has been
infringed, we must consider the mark as a whole and
not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to
any part of it. The court therefore should be guided
by its first impression.
4. It has also been held that it is not the function of the
court in cases of infringement and unfair competition
to educate purchasers but rather to take their
carelessness for granted, and to be ever conscious
of the fact that marks need not be identical. A
confusing similarity will justify the intervention of
equity.
5. The judge must also be aware of the fact that usually
a defendant in cases of infringement does not
normally copy but makes only colorable changes.
Well has it been said that the most successful form
of copying is to employ enough points of similarity to
confuse the public with enough points of difference
to confuse the courts.
092 Solid Triangle v Sheriff
Nov. 23, 2001
Kapunan, J.
Short Version:
Solid Triangle sued Sanly for alleged unfair competition
because the latter imported genuine Mitsubishi Photo Paper.
In this respect, it filed and was granted a search warrant. CA
ruled that there was no probable cause because the products
were genuine.
Which the SC agreed with. The parallel importation of
genuine goods cannot be considered unfair competition
under Sec. 168 of the IP Code. Sanly did not pass off the
subject goods as that of another. In fact, it admits that the
goods are genuine Mitsubishi photographic paper, which it
purchased from a supplier in Hong Kong. Even assuming
that this would be a crime, there is no proof that Sanly made
 determine probable cause. However, it reversed on MR,
holding that there was no probable cause in this case, as the
subject goods were genuine.

Hence this petition for review.

Issues:

1. WON a judge can quash a search warrant without

waiting for the findings of the prosecutor as to
probable cause. (Yes)
2. WON parallel importation can be the basis of a
finding of probable cause for the crime of unfair
it appear that they were duly authorized to sell or distribute competition. (No)
Mitsubishi Photo Paper in the Philippines. 3. WON the application for a writ of attachment should
be denied on the ground that an affidavit of merits is
not appended to the complaint.(No)
4. WON Solid Triangle can be held in contempt for
Facts: failure to return the goods.(No)

1. Judge Apolinario Bruselas of Branch 93, RTC-QC

issued a Search Warrant against Sanly Corporation, Ratio:
for violation of Sec. 168 of RA 8293. By virtue of the
search warrant, EIIB agents seized 451 boxes of 1. Only judges have the power to issue search
genuine Mitsubishi photographic color paper from warrants. This function is exclusively judicial.
Sanly. Inherent in such power is the power to quash
Solid Triangle then filed an affidavit-complaint for unfair warrants already issued.
competition against he members of the Board of Sanly and
LWT Co, Inc. It was alleged that ERA Radio and Electrical
A judge can only issue a search warrant upon probable
Supply, operated by LWT, was in conspiracy with Sanly in
cause in connection with one specific offense. Probable
selling and distributing Mitsubishi brand photo paper to the
cause is defined as the existence of such facts and
damage and prejudice of Solid Triangle, which claims to be
circumstances which could lead a reasonably discreet and
the sole and exclusive distributor thereof.
prudent man to believe that an offense has been committed
Sanly, LWT and ERA moved to quash the search warrant, and that he items, articles or objects sought in connection
but the motion was denied. with said offense or subject to seizure and destruction by law
is in the place to be searched.
On MR, Bruselas reversed himself, on the ground that there
was doubt as to whether the case was criminal. MR to the It must be noted that prosecutors find probable cause at
MR denied. preliminary investigation, not during applications for search
warrants. These proceedings are entirely independent of one
2. Solid Triangle filed a case for damages and another. Thus, a judge can quash a search warrant even
injunction against Sanly, LWT and ERA with Branch before the prosecutor determines whether or not there is
91 of RTC-QC. Judge Genilo of that Branch denied probably cause.
the application for writs of injunction and
attachment, on the ground that the application is not
supported with an affidavit by the applicant through
its authorized officer who personally knows the fact. 2. ***************IMPORTANT
3. Meanwhile, Judge Bruselas issued another order PART**********************
directing the EIIB and Solid Triangle to reveal where
they were keeping the goods, and show cause why
they should not be held in contempt. The parallel importation of genuine goods cannot be
These antecedents led Solid Triangle to file a petition for
considered unfair competition under Sec. 168 of the IP Code.
certiorari before the CA challenging the orders of Judge
Sanly did not pass off the subject goods as that of another.
Bruselas under 1 and 3 above, and Judge Genilos denial of
In fact, it admits that the goods are genuine Mitsubishi
the applications of writs of attachment and injunction under
photographic paper, which it purchased from a supplier in
2 above.
Hong Kong. Even assuming that this would be a crime, there
is no proof that Sanly made it appear that they were duly
CA initially granted certiorari, holding that the quashing of the
warrants deprived the prosecution of vital evidence to
authorized to sell or distribute Mitsubishi Photo Paper in the
Philippines.
3. The trial court has yet to hear this matter. An
affidavit of merit is not necessary since the petition
was verified by an authorized officer who personally
knows the facts.
4. This issue is premature, there not yet having been a
hearing as to whether there are sufficient grounds to
hold Solid Triangle in Contempt.
Petition partly granted.
Gabe.
Sony Computer Entertainment v. Supergreen, Inc.
G.R. No. 161823; 22 March 2007; Quisumbing, J.
VIII. Facts
1. Sony Computer Entertainment filed a complaint against
Supergreen with the NBI. The NBI found that
Supergreen engaged in the reproduction and distribution
of counterfeit "PlayStation" game software, consoles
and accessories in violation of Sony Computers
intellectual property rights.
2. The NBI applied for warrants to search Supergreens
premises in Paraaque City and Cavite with the Manila
RTC.
3. The NBI simultaneously served the search warrants on
the subject premises and seized a replicating machine
and several units of counterfeit "PlayStation" consoles,
joy pads, housing, labels and game software.
4. Supergreen filed a Motion to Quash the search warrants
and/or release of seized properties on the ground that
the search warrant failed to particularly describe the
properties to be seized. The RTC denied the motion.
5. Supergreen filed another Motion to Quash questioning
the propriety of the venue.
6. Sony Computer opposed the motion on the ground that
it violated the omnibus motion rule wherein all objections
not included shall be deemed waived.
7. The RTC affirmed the validity of the search warrants
covering Supergreens premises in Paraaque City, but
quashed the search warrants covering Supergreens
premises in Cavite. The RTC held that lack of
jurisdiction is an exception to the omnibus motion rule
and may be raised at any stage of the proceedings.
8. CA - Under Section 2, 5 Rule 126 of the Rules of Court,
the RTC of Manila had no jurisdiction to issue a search
warrant enforceable in Cavite, and that lack of
jurisdiction was not deemed waived.
IX. Issue/Held
Whether the quashal of the search warrants covering
Supergreens premises in Cavite was valid - No
X. Ratio
Sony:
1. Citing Malaloan v. CA, where the SC clarified that a
search warrant application is only a special criminal
process and not a criminal action, the rule on venue for
search warrant application is not jurisdictional. Hence,
failure to raise the objection waived it.
2. Applying for search warrants in different courts
increases the possibility of leakage and contradictory
outcomes that could defeat the purpose for which the
warrants were issued.
3. Even granting that the rules on search warrant
applications are jurisdictional, the application filed either
in the courts of the National Capital Region or Fourth
Judicial Region is still proper because the crime was
continuing and committed in both Paraaque City and
Cavite.
Supergreen:
1. Section 2 is explicit on where applications should be
filed and provided the territorial limitations on search
warrants.
2. Malaloan is no longer applicable jurisprudence with the
promulgation of the 2000 Rules of Criminal Procedure.
3. Even granting that Sony has compelling reasons, it
cannot file the application with the RTC of Manila
because Cavite belongs to another judicial region.
4. The doctrine on continuing crime is applicable only to the
institution of a criminal action, not to search warrant
applications which is governed by Rule 126, and in this
case Section 2.
SC:
1. The pronouncement in Malaloan should be read into the
Judiciary Reorganization Act of 1980 (BP 129)
conferring on the regional trial courts and their judges a
territorial jurisdiction, regional in scope.
2. Supergreens premises in Cavite, within the Fourth
Judicial Region, is beyond the territorial jurisdiction of
the RTC of Manila, in the National Capital Region. Thus,
the RTC of Manila does not have the authority to issue
a search warrant for offenses committed in Cavite.
a. Sonys reliance in Malaloan is misplaced.
Malaloan involved a court in the same judicial
region where the crime was committed.
b. The instant case involves a court in another
region. Any other interpretation re-defining
territorial jurisdiction would amount to judicial
legislation.
3. However, this case involves a transitory or continuing
offense of unfair competition under Section 168 of the IP
Code and Article 189 of the RPC.
SEC. 168. Unfair Competition, Rights, Regulation and
Remedies.
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 goodwill, or who shall commit any acts calculated to
produce said result, shall be guilty of unfair competition, and
shall be subject to an action therefor.
168.3. In particular, and without in any way limiting the scope
of protection against unfair competition, the following 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.
Article 189 (1) of the RPC enumerates the elements of unfair
competition:
a. That the offender gives his goods the
general appearance of the goods of
another manufacturer or dealer;
b. That the general appearance is shown in
the (1) goods themselves, or in the (2)
wrapping of their packages, or in the (3)
device or words therein, or in (4) any other
feature of their appearance;
c. That the offender offers to sell or sells those
goods or gives other persons a chance or
opportunity to do the same with a like
purpose; and
d. That there is actual intent to deceive the
public or defraud a competitor.
4. Supergreens imitation of the general appearance of
Sonys goods was done allegedly in Cavite. It sold the
goods allegedly in Mandaluyong City, Metro Manila. The
alleged acts would constitute a transitory or continuing
offense.
5. Under Section 2 (b) of Rule 126, Section 168 of the IP
Code and Article 189 (1) of the RPC, Sony may apply for
a search warrant in any court where any element of the
alleged offense was committed, including any of the
courts within the National Capital Region (Metro Manila).
Sehwani Inc. and/or Benita's Frites, Inc. v In-N-Out
Burger Inc.
October 15, 2007
Ynares-Santiago, J.
FACTS:
Respondent In-N-Out is a foreign corporation organized
under the laws of California, USA, and is not doing business
in the Philippines. It alleged that it is the owner of the
trandename IN-N-OUT and trademarks IN-N-OUT, IN-N-
OUT Burger & Arrow Design, and IN-N-OUT Burger Logo
which have been used in its business since 1948. These
tradename and trademarks were registered in the USA and
in other parts of the world.
June 2, 1997: Petitioner applied with the IPO for registration
of its trademark IN-N-OUT Burger & Arrow Design, and
servicemark IN-N-OUT. In the course of its application, it
discovered that petitioner Sehwani had obtained Trademark
Registration No. 56666 for the mark IN-N-OUT (with the
inside of the letter O formed like a star) on December 17,
1993 without its authority.
Respondent demanded that Sehwani desist from claiming
ownership of the mark IN-N-OUT and to voluntarily cancel
said Trademark Registration in the name of Sehwani.
Petitioner Sehwani refused to accede to the demand and
entered into a Licensing Agreement, granting its co-
petitioner Benita's Frites license to use the trademark for a
period of 5 years.
1. WON there is a ground for the cancellation of the
petitioners' registration? YES.

Hence, respondent filed before the Bureau of Legal Affairs of

the IPO an administrative complaint against petitioners
Sehwani and Benita's Frites for violation of intellectual 2. WON respondent is precluded from asserting its claim by
property rights, attorney's fees and damages with prayer for laches? NO.
the issuance of a restraining order or writ of preliminary
injunction.
RATIO:

In their answer, petitioners alleged that respondent lacked

the capacity to sue as it was not doing business in the
1. A petition to cancel a registration of a mark, under Sec.
Philippines. It also claimed that as the owner of the
151 (b) may be filed at any time, if the registered mark
registered mark, it enjoyed the presumption that the same
becomes the generic name for the goods or services, or a
was validly acquired and that it has the exclusive right to use
portion thereof, for which it is registered, or has been
the mark. Petitioners also alleged that the respondent failed
abandoned, or its registration was obtained fraudulently or
to show the existence of any of the grounds for cancellation
contrary to the provisions of this Act, or if the registered mark
under Sec. 151 of the IPC.
is being used by, or with the permission of, the registrant so
as to misrepresent the source of the goods or services
on or in connection with which the mark is used.
December 22, 2003: Bureau Director Beltran-Abelardo
rendered a decision finding that the respondent had the legal
capacity to sue and that it is the owner of the internationally
The evidence on record shows that not only did the
well-known trademarks. However, she held that the
petitioners use the IN-N-OUT Burger trademark for the
petitioners are not guilty of unfair competition. Petitioners
name of their restaurant, but they also used identical or
filed an MR which was denied. confusingly similar mark for their hamburger wrappers and
french-fries receptacles, thereby effectively misrepresenting
the source of the goods and services.
On separate dates, the parties appealed to the Office of the
Director General which rendered an Order dismissing
petitioners' appeal for being filed out of time. 2. Section 151(b) of R.A. No. 8293 specifically provides that
a petition to cancel the registration of a mark which is
registered contrary to the provisions thereof, or which is used
Petitioners filed a petition before the CA which was to misrepresent the source of the goods or services, may be
dismissed for lack of merit. The CA held that the right to filed at any time. Moreover, laches may not prevail against a
appeal is not a natural right or a part of due process. It is a specific provision of law, since equity, which has been
remedy of statutory origin, hence, its requirements must be defined as justice outside legality is applied in the absence
strictly complied with. The appeal being out of time, the of and not against statutory law or rules of procedure.
Decision and Orders of the Bureau Director were then final
and executory.

Meanwhile, respondent filed a Manifestation with the CA that Coca-Cola Bottlers Phil.Inc.Naga v Quitin Gomez (Naga
on December 23, 2005, Director General Cristobal rendered Sales Manager) & Danilo Galicia (Regional Manager)
a Decision on the respondent's appeal, finding the petitioners
G.R. No. 154491 || Nov. 14, 2008 || Brion, J.
guilty of unfair competition.Petitioners filed an MR which was
denied. Petitioners filed a petition for review with the SC.
Digest by Norly

ISSUES and HELD:

Facts:
 1. On July 2, 2001, Coca-Cola applied for a search
warrant against Pepsi for hoarding Coke empty
bottles in Pepsis yard in Concepcion Grande, Naga
City, an act allegedly penalized as unfair
competition under the IP Code.
2. Naga MTC Judge Julian Ocampo, after taking the
joint deposition of the witnesses, issued Search
Warrant (SW) to seize 2,500 Litro and 3,000 eight
and 12 ounces empty Coke bottles at Pepsis Naga
yard for violation of Section 168.3 (c) of the IP
Code.
3. The local police seized and brought to the MTCs
custody 2,464 Litro and 4,036 eight and 12 ounces
empty Coke bottles, 205 Pepsi shells for Litro, and
168 Pepsi shells for smaller empty Coke bottles.
4. Police filed with the Office of the City Prosecutor of
Naga a complaint against two Pepsi officers
(Gomez and Galicia) for violation of Section
168.3 (c) in relation to Section 170 of the IP Code
5. The Gomez and Galicia filed motions for the
return of their shells and to quash the search
warrant. They contended that no probable cause
existed to justify the issuance of the search warrant;
the facts charged do not constitute an offense;
and their Naga plant was in urgent need of the
shells.
6. MTC denied the twin motions of Gomez and
Galicia: there's probable cause and requirements
for issuance of SW were complied with.
7. RTC voided the warrant for lack of probable
cause and the non-commission of the crime of
unfair competition, even as it implied that other laws
may have been violated by the respondents. The
RTC, though, found no GAD on the part of the
issuing MTC judge.
8. Coke's theory:
a. RTC should have dismissed the
respondents petition for certiorari because
it found no GAD by the MTC in issuing the
search warrant
b. Section 168.3(c) of the IP Code does not
limit the scope of protection on the
particular acts enumerated as it expands
the meaning of unfair competition to
include other acts contrary to good faith
of a nature calculated to discredit the
goods, business or services of another.
The inherent element of unfair competition
is fraud or deceit, and that hoarding of
large quantities of a competitors empty
bottles is necessarily characterized by
bad faith.
c. Requisites for the issuance of SW were
complied with.The empty bottles were
48
Probable cause requires facts and circumstances that would lead a reasonably
prudent man to believe that an offense has been committed and the objects
sought in connection with that offense are in the place to be searched
49
168.1. A person who has identified in the mind of the public the goods he
manufactures or deals in, his 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
goodwill, or who shall commit any acts calculated to produce said result, shall be
guilty of unfair competition, and shall be subject to an action therefor.
concealed in Pepsi shells to prevent
discovery while they were
systematically being destroyed to
hamper the petitioners bottling
operation and to undermine the
capability of its bottling operations in
Bicol.
9. Gomez/Gonzales' arguments:
a. No probable cause: hoarding of empty
Coke bottles did not cause actual or
probable deception and confusion on the
part of the general public; the alleged
criminal acts do not show conduct aimed at
deceiving the public; there was no attempt
to use the empty bottles or pass them off as
Pepsi's goods.
b. No crime committed: IP Code does not
criminalize bottle hoarding, as the acts
penalized must always involve fraud and
deceit
Issues:
WON the Naga MTC was correct in issuing the Search
Warrant for the seizure of the empty Coke bottles from
Pepsi's yard for probable violation of Section 168.3 (c) of the
IP Code NO, RTC correctly quashed the search warrant
because it was issued on an invalid substantive basis. The
acts imputed on Pepsi do not violate Section 168.3 (c) of the
IP Code.
Holding: Petition denied for lack of merit
Ratio:
> WHEN A SEARCH WARRANT MAY BE ISSUED:
Only if there is probable cause48 in connection with
a specific offense alleged in an application based
on the personal knowledge of the applicant and his
or her witnesses
In this case, no probable cause because no
crime in the first place was effectively charged.
> IS THE ACT OF HOARDING EMPTY COKE BOTTLES
AN OFFENSE UNDER SEC.168.3 (c) IPC? NO
LAW: SECTION 16849 Unfair Competition, Rights,
Regulation and Remedies
168.3. In particular, and without in any way limiting the scope of protection against
unfair competition, the following 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
 o
Section 168.1 speaks of a person who has
earned goodwill with respect to his goods
and services and who is entitled to
protection under the Code, with or without
a registered mark.
o Section 168.2 refers to the general
definition of unfair competition.
o Section 168.3 provides specifics of what
unfair competition is without in any way
limiting the scope of protection against
unfair competition.
168.3 (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.
INTERPRETATION: Deception, passing off and
fraud upon the public are still the key elements
that must be present for unfair competition to
exist.
o Unfair competition - the passing off (or
palming off) or attempting to pass off upon
the public the goods or business of one
person as the goods or business of another
with the end and probable effect of
deceiving the public.
o Test of unfair competition: whether the
acts of defendant are such as are
calculated to deceive the ordinary buyer
making his purchases under the ordinary
conditions which prevail in the particular
trade to which the controversy relates
AS APPLIED: Hoarding as defined by Coke [see
bullet (c) under Coke's theory] is not even an act
within the contemplation of the IP Code.
o Does hoarding refer to an intellectual
property right? NO, it does not relate to any
patent, trademark, trade name or service
mark that Pepsi has invaded, intruded into
or used without proper authority from Coke.
o Does hoarding fall under the general unfair
competition concept and definition under
Sections 168.1 and 168.2 of the Code? NO,
Coke does not allege that Pepsi is
fraudulently passing off their products or
services as those of the petitioner. Nor is
Pepsi alleged to be undertaking any
representation or misrepresentation that
would confuse or tend to confuse the goods
of Coke with those of Pepsi, or vice versa.
What in fact the petitioner alleges is an act
foreign to the Code, to the concepts it
embodies and to the acts it regulates; as
alleged, hoarding inflicts unfairness by
seeking to limit the oppositions sales by
depriving it of the bottles it can use for these
sales.
> IS THE ACT AS ALLEGED PUNISHABLE UNDER ANY
OTHER LAW? Yes, RA 623 covers alleged act.
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.
LAW: RA 623
o SECTION 2. It shall be unlawful for any
person, without the written consent of the
manufacturer,xxx who has successfully
registered the marks of ownership xxx, to
fill such bottles xxx so marked or stamped,
for the purpose of sale, or to sell, dispose
of, buy, or traffic in, or wantonly destroy
the same, xxx for any other purpose than
that registered by the manufacturer, bottler
or seller. Any violation of this section shall
be punished by a fine or not more than one
hundred pesos or imprisonment of not
more than thirty days or both.
AS APPLIED:
o While RA 623 covers the alleged act
(unlawful wanton destruction of bottles),
said Act is not the law in issue in the
present case and one that the parties did
not consider at all in the search warrant
application.
Superior Commercial Ent. Inc. v. Kunnan Enterprises
Ltd. and Sports Concept & Distributor, Inc.
20 April 2010; Brion, J.
Digest prepared by Jethro Koon
I. Facts
1. SUPERIOR filed this complaint for trademark
infringement and unfair competition with PI against
KUNNAN and SPORTS CONCEPT in the RTC.
Claimed to be the owner of the trademarks,
trading styles, company names and
business names "KENNEX", "KENNEX &
DEVICE", "PRO KENNEX" and "PRO-
KENNEX"
Prior use of these trademarks, presenting
as evidence of ownership the Principal and
Supplemental Registrations of these
trademarks in its name.
It extensively sold and advertised sporting
goods and products covered by its
trademark registrations.
Preambular clause of the Distributorship
Agreement it executed with KUNNAN:
Whereas, KUNNAN intends to
acquire the ownership of KENNEX
trademark registered by the [sic]
Superior in the Philippines.
Whereas, the [sic] Superior is
desirous of having been appointed
[sic] as the sole distributor by
KUNNAN in the territory of the
Philippines."
168.4. The remedies provided by Sections 156, 157 and 161 shall apply mutatis
mutandis.
2. KUNNAN disputed SUPERIORs claim and
maintained that SUPERIORas mere distributor
fraudulently registered the trademarks in its name.
KUNNAN alleged that it was incorporated
in 1972, under the name KENNEX Sports
Corporation and it commercially marketed
its products in different countries, including
the Philippines since 1972 including "PRO
KENNEX" in 1976.
It registered the "PRO KENNEX" trademark
not only here but also in 31 other countries,
and widely promoted the trademarks
through worldwide advertisements in print
media and sponsorships of known tennis
players.
KUNNAN appointed SUPERIOR as its
exclusive distributor in the Philippines
Certificate of Registration remained with
SUPERIOR because SUPERIORs
President and GM misled their officers into
believing that KUNNAN was not qualified to
hold the same due to the "many
requirements set by the Philippine Patent
Office" that KUNNAN could not meet.
SUPERIOR deceived it into assigning its
applications for registration of the "PRO
KENNEX" trademark through an
Assignment Agreement
Upon the termination of its agreement,
KUNNAN appointed SPORTS CONCEPT
as its new distributor. KUNNAN also
caused the publication of a Notice and
Warning in the Manila Bulletin, stating that
(1) it is the owner of the trademarks; (2) it
terminated its Agreement with SUPERIOR;
and (3) it appointed SPORTS CONCEPT
as its exclusive distributor. This notice
prompted SUPERIOR to file this case.
3. Cancellation case! Prior to and during the
pendency of the case, KUNNAN filed with the (now
defunct) Bureau of Patents separate Petitions for
the Cancellation of Registration Trademark on the
ground that SUPERIOR fraudulently registered
and appropriated the disputed trademarks; as
mere distributor and not as lawful owner.
BLA ruled that Superior is a mere
distributor and ordered their trademarks
cancelled. Appeal to the IPO was denied.
CA affirmed (now final and executory).
4. RTC held KUNNAN liable and issued a writ of PI
enjoining KUNNAN and SPORTS CONCEPT from
using the disputed trademarks.
Based on the "Whereas clause" of the
Distributorship Agreement and the findings
of the Director of Patents in Inter Partes
Case No. 1709 and 1734 that SUPERIOR
was "rightfully entitled to register the mark
KENNEX as user and owner thereof."
5. KUNNAN and SPORTS CONCEPT appealed. CA
reversed and ruled that Certificates of Principal
Registration does not conclusively establish
ownership as dominion over trademarks is not
acquired by the fact of registration alone; at best, it
merely raises a rebuttable presumption of
ownership. Certificates of Supplemental
Registration in SUPERIORs name do not even
enjoy the presumption of ownership accorded to
registration in the principal register.
i. The Distributorship Agreement, considered
in its entirety, positively confirmed that
SUPERIOR sought to be the KUNNANs
exclusive distributor.
ii. SUPERIOR made the express undertaking
in the Assignment Agreement to
"acknowledge that KUNNAN is still the real
and truthful owner of the trademarks," and
that it "shall agree that it will not use the
right of the abovementioned trademarks to
do anything which is unfavourable or
harmful to KUNNAN."These provisions are
clearly inconsistent with SUPERIORs
claim of ownership.
iii. SUPERIORs Letter addressed to Brig.
Gen. Jose Almonte, identifying itself as the
"sole and exclusive licensee and
distributor." Attached to the letter was an
agreement with KUNNAN, identifying the
latter as the "foreign manufacturer of all
KENNEX products." SUPERIOR
acknowledged its status as a distributor
even in transactions with third persons.
II. Holding
Petition for review on certiorari DENIED for lack of merit.
Cost against Superior.
III. Ratio
No Trademark Infringement
1. FIRST. The CA decided that the registration of the
"KENNEX" and "PRO KENNEX" trademarks should
be cancelled because SUPERIOR was not the
owner of, and could not in the first place have validly
registered these trademarks. Thus, as of the finality
of the CA decision, these trademark registrations
were effectively cancelled and SUPERIOR was no
longer the registrant of the disputed trademarks.
2. 22 of RA 166 states that only a registrant of a mark
can file a case for infringement. Corollary to this, 19
provides that any right conferred upon the registrant
terminates when the judgment or order of
cancellation has become final.:
Section 22. Infringement, what constitutes.
Any person who [1] shall use, without
the consent of the registrant, any
reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-
name in connection with the sale, offering
for sale, or advertising of any goods,
business or services on or in connection
with which such use is likely to cause
confusion or mistake or to deceive
purchasers or others as to the source or
origin of such goods or services, or identity
of such business; or [2] reproduce,
counterfeit, copy, or colorably imitate any
such mark or trade-name and apply such
 reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or
advertisements intended to be used upon
or in connection with such goods, business
or services, shall be liable to a civil action
by the registrant for any or all of the
remedies herein provided.
3. In the present case, by operation of law the
trademark infringement aspect has been rendered
moot and academic in view of the finality of the
decision in the Cancellation Case.
4. SECOND. Even assuming that SUPERIORs case
had not been rendered moot and academic, there
can be no infringement committed by KUNNAN who
was adjudged with finality to be the rightful owner of
the disputed trademarks in the Registration
Cancellation Case.
Jurisprudence holds that in the absence of
any inequitable conduct on the part of the
manufacturer, an exclusive distributor who
employs the trademark of the former does
not acquire proprietary rights, and a
registration of the trademark as such
belongs to the manufacturer, provided the
fiduciary relationship does not terminate
before application for registration is filed.
The right to register a trademark should be
based on ownership.
An exclusive distributor does not acquire
any proprietary interest in the principals
trademark and cannot register it in his own
name unless it is has been validly assigned
to him.
5. THIRD. Res judicata bars SUPERIORs present
case. Res judicata embraces two (2) concepts: the
first is "bar by prior judgment" under par. (b) of Rule
39, Section 47, and the second is "conclusiveness
of judgment" under par. (c) thereof.
Under conclusiveness of judgment, facts
and issues actually and directly resolved in
a former suit cannot again be raised in any
future case between the same parties,
even if the latter suit may involve a different
cause of action.
Because the Cancellation Case and the
present case involve the same parties,
litigating with respect to and disputing the
same trademarks, we are bound to
examine how one case would affect the
other.
Even if the causes of action of the
Cancellation Case (cancellation of
trademark registration) differs from that of
the present case (improper or unauthorized
use of trademarks), the final judgment is
nevertheless conclusive on the facts and
issues that are determinative of the present
case.
To establish trademark infringement, the 3
elements must be proven: (1) the validity of
plaintiffs mark; (2) the plaintiffs ownership
of the mark; and (3) the use of the mark or
its colorable imitation by the infringer
results in "likelihood of confusion."
The second elementownership of the
markwas what the Cancellation Case
decided with finality. On this element
depended the validity of the registrations
that, on their own, only gave rise to the
presumption of, but was not conclusive on,
the issue of ownership.
No Unfair Competition
1. Neither the RTC nor the CA made any factual
findings with respect to unfair competition.
2. From jurisprudence, unfair competition has been
defined as the passing off (or palming off) or
attempting to pass off upon the public of the goods
or business of one person as the goods or business
of another with the end and probable effect of
deceiving the public.
The essential elements are (1) confusing
similarity in the general appearance of the
goods; and (2) intent to deceive the public
and defraud a competitor.
3. Jurisprudence also formulated the "true test" of
unfair competition: 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.
4. In the present case, no evidence exists showing that
KUNNAN ever attempted to pass off the goods it
sold as those of SUPERIOR. In addition, there is no
evidence of bad faith or fraud.
5. In McDo v. L.C. Big Mak we held that there can be
trademark infringement without unfair competition
such as when the infringer discloses on the labels
containing the mark that he manufactures the
goods, thus preventing the public from being
deceived that the goods originate from the
trademark owner. In this case, no issue of confusion
arises because the same manufactured products
are sold; only the ownership of the trademarks is at
issue.
6. Furthermore, KUNNANs notice prevents the public
from being deceived that the goods originated from
SUPERIOR since the notice clearly indicated that
KUNNAN is the manufacturer of the goods bearing
the trademarks "KENNEX" and "PRO KENNEX."
7. Finally, with the CAs final ruling in the Cancellation
Case, SUPERIOR no longer presents a valid cause
of action. For this reason, the unfair competition
aspect of the SUPERIORs case likewise falls.
Chester Uyco v. Vicente Lo
28 January 2013; Brion, J.
Digest prepared by Dianne Cadorna
I. Facts
1. The disputed marks in this case are the HIPOLITO
& SEA HORSE & TRIANGULAR DEVICE, FAMA,
and other related marks, service marks and trade
names of Casa Hipolito S.A. Portugal appearing in
kerosene burners.
2. Respondent Vicente Lo and Philippine Burners
Manufacturing Corporation (PBMC) filed a
complaint against petitioners, officers of Wintrade
Industrial Sales Corporation (Wintrade) and of
National Hardware for violation of Sec. 169.1, in
relation to Sec. 170 of RA 8293, which punishes any
person who uses in commerce any false
designation of origin which is likely to cause
confusion or mistake as to the origin of the product.
3. Lo claimed that Gasirel-Industria de Comercio e
Componentes para Gass, Lda. (Gasirel), the owner
of the disputed marks, assigned the above marks in
his favor, to be used in all countries except for those
in Europe and America. However, when Lo did a test
buy of the kerosene burners manufactured by
Wintrade, it found that the said burners contained
the subject marks and the designations Made in
Portugal and Original Portugal in the wrappers,
notwithstanding that as the assignee for the
trademarks, he had not authorized Wintrade to use
these marks, nor had Casa Hipolito S.A. Portugal.
4. It appears that a prior authority to that effect was
given to Wintrades predecessor-in-interest,
Wonder Project & Development Corporation
(Wonder); however, Casa Hipolito S.A. Portugal had
already revoked this authority through a letter of
cancellation dated May 31, 1993.
5. Thus, law claimed that Wintrades kerosene burners
have caused confusion, mistake and deception on
the part of the buying public.
6. Petitioners countered that Wintrade owns the
subject trademarks and their variants, pursuant to
certificates of registration issued by the IPO. They
alleged that their authority to use the marks from
Casa Hipolito S.A. Portugal was derived from
Wonder, their predecessor-in-interest. At the same
time, they averred that that the products bought
during the test buy bearing the trademarks in
question were not manufactured by, or in any way
connected with, the petitioners and/or Wintrade.
Finally, they argued that the marks Made in
Portugal and Original Portugal are merely
descriptive and refer to the source of the design and
the history of manufacture, and were not meant to
cause deception among the public.
7. The Chief State Prosecutor found probable cause
against petitioners. The DOJ affirmed.
8. The CA, and ultimately the SC affirmed. Thus,
petitioners filed the instant MR, reiterating their
earlier arguments. se of the Courts discretionary
power.
II. Issues
WON the finding of probable cause against petitioners for
violation of Sec. 169.1 in relation to Sec. 170 of Ra 8293
should be reversed NO.
III. Holding
MR denied.
IV. Ratio
9. Contrary to petitioners assertion, they made
admissions in their joint affidavit, which, in effect,
controvert their argument that they have not
manufactured the products bearing the marks
Made in Portugal and Original Portugal that were
bought by Lo during the test buy.
10. Said admissions show Wintrades former
association with Casa Hipolito S.A. Portugal; their
decision to produce the burners in the Philippines;
their use of the disputed marks; and their
justification for their use.
11. Thus, the evidence shows that petitioners, who are
officers of Wintrade, placed the words Made in
Portugal and "Original Portugal" with the disputed
marks knowing fully well because of their
previous dealings with the Portuguese company
that these were the marks used in the products of
Casa Hipolito S.A. Portugal.
12. More importantly, the products that Wintrade sold
were admittedly produced in the Philippines, with no
authority from Casa Hipolito S.A. Portugal.
13. The law on trademarks and trade names precisely
precludes a person from profiting from the business
reputation built by another and from deceiving the
public as to the origins of products. These facts
support the consistent findings of the State
Prosecutor, the DOJ and the CA that probable
cause exists to charge the petitioners with false
designation of origin.
14. The fact that the evidence did not come from Lo, but
had been given by the petitioners, is of no
significance.
15. The argument that the words Made in Portugal and
Original Portugal refer to the origin of the design
and not to the origin of the goods does not negate
the finding of probable cause; nevertheless,
petitioners are not precluded from raising such
argument as a defense during the hearing of the
case on the merits.
Chester Uyco v. Vicente Lo
28 January 2013; Brion, J.
Digest prepared by Dianne Cadorna
I. Facts
9. The disputed marks in this case are the HIPOLITO
& SEA HORSE & TRIANGULAR DEVICE, FAMA,
and other related marks, service marks and trade
names of Casa Hipolito S.A. Portugal appearing in
kerosene burners.
10. Respondent Vicente Lo and Philippine Burners
Manufacturing Corporation (PBMC) filed a
complaint against petitioners, officers of Wintrade
Industrial Sales Corporation (Wintrade) and of
National Hardware for violation of Sec. 169.1, in
relation to Sec. 170 of RA 8293, which punishes any
person who uses in commerce any false
 designation of origin which is likely to cause
confusion or mistake as to the origin of the product.
11. Lo claimed that Gasirel-Industria de Comercio e
Componentes para Gass, Lda. (Gasirel), the owner
of the disputed marks, assigned the above marks in
his favor, to be used in all countries except for those
in Europe and America. However, when Lo did a test
buy of the kerosene burners manufactured by
Wintrade, it found that the said burners contained
the subject marks and the designations Made in
Portugal and Original Portugal in the wrappers,
notwithstanding that as the assignee for the
trademarks, he had not authorized Wintrade to use
these marks, nor had Casa Hipolito S.A. Portugal.
12. It appears that a prior authority to that effect was
given to Wintrades predecessor-in-interest,
Wonder Project & Development Corporation
(Wonder); however, Casa Hipolito S.A. Portugal had
already revoked this authority through a letter of
cancellation dated May 31, 1993.
13. Thus, law claimed that Wintrades kerosene burners
have caused confusion, mistake and deception on
the part of the buying public.
14. Petitioners countered that Wintrade owns the
subject trademarks and their variants, pursuant to
certificates of registration issued by the IPO. They
alleged that their authority to use the marks from
Casa Hipolito S.A. Portugal was derived from
Wonder, their predecessor-in-interest. At the same
time, they averred that that the products bought
during the test buy bearing the trademarks in
question were not manufactured by, or in any way
connected with, the petitioners and/or Wintrade.
Finally, they argued that the marks Made in
Portugal and Original Portugal are merely
descriptive and refer to the source of the design and
the history of manufacture, and were not meant to
cause deception among the public.
15. The Chief State Prosecutor found probable cause
against petitioners. The DOJ affirmed.
16. The CA, and ultimately the SC affirmed. Thus,
petitioners filed the instant MR, reiterating their
earlier arguments. se of the Courts discretionary
power.
II. Issues
WON the finding of probable cause against petitioners for
violation of Sec. 169.1 in relation to Sec. 170 of Ra 8293
should be reversed NO.
III. Holding
MR denied.
IV. Ratio
16. Contrary to petitioners assertion, they made
admissions in their joint affidavit, which, in effect,
controvert their argument that they have not
manufactured the products bearing the marks
50
Only managed to find the case on philippinelaw.info, so
unfortunately some of the details I usually like to include are
missing.
Made in Portugal and Original Portugal that were
bought by Lo during the test buy.
17. Said admissions show Wintrades former
association with Casa Hipolito S.A. Portugal; their
decision to produce the burners in the Philippines;
their use of the disputed marks; and their
justification for their use.
18. Thus, the evidence shows that petitioners, who are
officers of Wintrade, placed the words Made in
Portugal and "Original Portugal" with the disputed
marks knowing fully well because of their
previous dealings with the Portuguese company
that these were the marks used in the products of
Casa Hipolito S.A. Portugal.
19. More importantly, the products that Wintrade sold
were admittedly produced in the Philippines, with no
authority from Casa Hipolito S.A. Portugal.
20. The law on trademarks and trade names precisely
precludes a person from profiting from the business
reputation built by another and from deceiving the
public as to the origins of products. These facts
support the consistent findings of the State
Prosecutor, the DOJ and the CA that probable
cause exists to charge the petitioners with false
designation of origin.
21. The fact that the evidence did not come from Lo, but
had been given by the petitioners, is of no
significance.
22. The argument that the words Made in Portugal and
Original Portugal refer to the origin of the design
and not to the origin of the goods does not negate
the finding of probable cause; nevertheless,
petitioners are not precluded from raising such
argument as a defense during the hearing of the
case on the merits.
099. Sy v. Court of Appeals50
28 February 1982/Petition for Certiorari
Short Version: Sy was charged with unfair competition for
selling poor-quality imitations of SCCIs hand pumps. The
CFI dismissed the information against him because it found
that he had been improperly charged; he should have been
charged with trademark infringement. Sy questioned the
filing of a second information against him on the ground of
double jeopardy. The Supreme Court ruled that his right
against double jeopardy was not violated; the CFI neither
acquitted nor convicted him in the first case and unfair
competition and trademark infringement are separate and
distinct offenses.
Facts: Sy was charged with violation of Article 189(1) of the
Revised Penal Code. The information alleged that from June
to October 1970, Sy committed acts of unfair competition
against Sea Commercial Company, Inc. (SCCI from
hereafter) when he sold inferior hand pumps labeled
Jetmatic Dragon Hand Pump at a price lower than the
Jetmatic Dragon Hand Pumps sold by SCCI. Sy allegedly
gave his pumps the general appearance of SCCIs product,
including the colors, the embossed words PAT. No.
463490, MODEL, and JETMATIC DRAGON HAND
PUMP.
The Court of First Instance of Bulacan dismissed the
charge for violation Article 189(1) of the RPC, finding that the
prosecution had failed to prove that Sy gave his goods the
general appearance of the goods of another manufacturer or
dealer. However, the CFI found that the evidence submitted
showed a prima facie case for violation of Article 188(2) of
the RPC, and thus ordered the fiscal to prepare a
corresponding information. The fiscal accordingly prepared
an information for infringement of trademark and charged Sy
under the same set of facts, with the only additional
allegation being that the trademark of SCCI was registered.
Sy filed a motion to quash, alleging that
(1) The information did not conform to the prescribed
form;
(2) The court had no jurisdiction over the case because
no preliminary investigation was conducted (i.e. Sy
was deprived of due process); and
(3) The new information would place Sy in double
jeopardy.
Sys motion to quash was denied.
Issues:
(1) Was Sy placed in double jeopardy? NO.
(2) Could Sy be arraigned and tried under the second
information without a preliminary investigation being
conducted? YES, but51
Ruling: Petition partially granted.
51
Just to shut him up about it, they allowed him to have
another preliminary investigation.
52
For one, registration of the mark is an essential element of
the offense of trademark infringement, but the Court didnt
(1) Sy was not placed in double jeopardy when he was
charged under the second information.
In the opinion of the trial court, the first information
did not properly charge the offense of infringement of
trademark, for what was expressly charged was unfair
competition. The Supreme Court ruled that it would have
been improper for the CFI to convict Sy of trademark
infringement even though it was not the offense he was
charged with. Seeing that the evidence presented a case for
trademark infringement, it was proper for the CFI to dismiss
the erroneously filed unfair competition case and
recommend the filing of a trademark infringement case.
Following Sys logic, trademark infringement and unfair
competition are the same, when in fact and in law they are
not.52
(2) Sy is not entitled to a new preliminary investigation
for the second information, since he was neither
convicted nor acquitted for the offense originally
charged.
A preliminary investigation is only due before
judgment. As already explained, judgment was never in fact
rendered in the original case against Sy, hence a second
preliminary investigation under the new charge would have
been unnecessary. But since Sy insisted and the prosecution
did not object, the Supreme Court ordered that he be allowed
to have one by way of reinvestigation.
Voting: Concepcion, Jr., Abad Santos, and Escolin, JJ.,
concur.
Barredo, J., concurring in the result.
Aquino, J., dissenting: no need for second preliminary
investigation! Just make sure that a different judge handles
the second case.
Ericta, J., dissenting: second preliminary investigation and
second trial unnecessary. The first information actually
actually make an official pronouncement on that point
because it was immaterial. It was only inclined to agree with
the Solicitor General that registration is an essential element
of the offense charged.
charged Sy with two offenses, so the CFI should have just
convicted him of trademark infringement.
Manolo Samson v. Hon. Reynaldo B. Daway and
Caterpillar, Inc.
21 July 2004; Yares-Santiago, J.
Digest prepared by Jethro Koon
I. Facts
1. On March 7, 2002, two informations for unfair
competition under 168.3 (a), in relation to 170, of
the IPC were filed against Samson, the registered
owner of ITTI Shoes, alleging that ITTI at
Robinsons Galleria sell and/or offer for sale
CATERPILLAR products such as footwear,
garments, clothing, bags, accessories and
paraphernalia which are closely identical to and/or
colorable imitations of the authentic Caterpillar
products and likewise using trademarks, symbols
and/or designs as would cause confusion, mistake
or deception on the part of the buying public.
2. Samson filed a motion to suspend arraignment and
other proceedings in view of the existence of an
alleged prejudicial question involved in Civil Case
No. Q-00-41446 for unfair competition pending with
the same branch; and also in view of the pendency
of a petition for review filed with the SOJ assailing
the Chief State Prosecutors resolution finding
probable cause. RTC denied.
3. Samson then filed a twin motion to quash the
informations and MR of the denial, challenging the
jurisdiction of the RTC over the offense charged:
since under 170 the penalty of imprisonment for
unfair competition does not exceed six years, the
offense is cognizable by the MTCs and not by the
RTC, per R.A. No. 7691. RTC denied. MR denied.
Hence, this certiorari (for GAD).
II. Issues
Which court has jurisdiction over criminal and civil cases for
violation of IP rights? RTC
III. Holding
Petition dismissed.
IV. Ratio
1. Under 170 , the criminal penalty for infringement of
registered marks, unfair competition, false
designation of origin and false description or
representation, is imprisonment from 2 to 5 years
and a fine ranging from 50,000 to 200,000.
2. 163 states that actions (including criminal and civil)
under 150, 155, 164, 166, 167, 168 and 169 shall
be brought before the proper courts with appropriate
jurisdiction under existing laws.
3. The existing law referred to in the foregoing
provision is 27 of R.A. No. 166 which provides that
jurisdiction over cases for infringement of registered
marks, unfair competition, false designation of origin
and false description or representation, is lodged
with the CFI.
4. There is no merit in the claim of Samson that R.A.
166 was expressly repealed by R.A. 8293. The
repealing clause of R.A. 8293, reads
SEC. 239. Repeals. 239.1. All Acts and
parts of Acts inconsistent herewith,
more particularly Republic Act No. 165, as
amended; Republic Act No. 166, as
amended; and Articles 188 and 189 of the
Revised Penal Code; Presidential Decree
No. 49, including Presidential Decree No.
285, as amended, are hereby repealed.
(Emphasis by SC)
5. Notably, the clause did not expressly repeal R.A.
166 in its entirety, otherwise, it would not have used
the phrases "parts of Acts" and "inconsistent
herewith;" and it would have simply stated "Republic
Act No. 165, as amended; Republic Act No. 166, as
amended; etc." It would have removed all doubts
that said specific laws had been rendered without
force and effect. The repeal pertains only to
provisions which are repugnant or not susceptible of
harmonization with R.A. 8293. 27 of R.A. 166,
however, is consistent and in harmony with 163.
Had R.A. 8293 intended to vest jurisdiction over
violations of IP rights with the MTC, it would have
expressly stated.
6. Moreover, in case of conflict between a general law
and a special law, the latter must prevail.
Jurisdiction conferred by a special law to RTCs
(R.A. No. 8293 and R.A. No. 166) must prevail over
that granted by a general law to MTCs ( R.A. No.
7691).
In fact, to implement and ensure the
speedy disposition of cases involving
violations of IP rights under R.A. 8293, the
Court issued A.M. No. 02-1-11-SC
designating certain RTCs as IP Courts. The
Court further issued a Resolution
consolidating jurisdiction to hear and
decide IPC and SEC cases in specific
RTCs designated as SCCs.
7. Mirpuri v. Court of Appeals, invoked by Samson,
finds no application in the present case.
Nowhere in Mirpuri did the SC state that
27 of R.A. No. 166 was repealed. Neither
did it make a categorical ruling therein that
jurisdiction over cases for violation of IP
rights is lodged with the MTCs.
The passing remark in Mirpuri on the repeal
of R.A. 166 by R.A. 8293 was merely a
backgrounder to the enactment of the
present IPC and cannot thus be construed
as a jurisdictional pronouncement in cases
for violation of IP rights.
V. Other Issues
1. Samson failed to substantiate his claim that there
was a prejudicial question.
He made no discussion in support of said
prayer. Neither did he attach a copy of the
complaint in Civil Case No. Q-00-41446 nor
 quote the pertinent portion thereof to prove
the existence of a prejudicial question.
At any rate, there is no prejudicial question
if the civil and the criminal action can,
according to law, proceed independently of
each other. Under Rule 111, 3 (CrimPro),
in the cases provided in NCC Art. 32, 33,
34 and 2176, the independent civil action
shall proceed independently of the criminal
action.
In the case at bar, the common element in
the acts constituting unfair competition
under 168 is fraud. NCC Art. 33, in cases
of defamation, fraud, and physical injuries,
a civil action for damages, entirely separate
and distinct from the criminal action, may
be brought by the injured party. Hence,
Civil Case No. Q-00-41446, which as
admitted by Caterpillar also relate to unfair
competition, is an independent civil action
under NCC Art. 33.
2. While the pendency of a petition for review is a
ground for suspension of the arraignment, 11 (c),
Rule 116 limits the deferment of the arraignment to
a period of 60 days reckoned from the filing of the
petition with the reviewing office. It follows,
therefore, that after the expiration of said period, the
trial court is bound to arraign the accused or to deny
the motion to defer arraignment.
His pleadings and annexes submitted
before the Court do not show the date of
filing of the petition for review with the
Secretary of Justice. The Order denying his
motion to suspend was not appended to the
petition. He thus failed to discharge the
burden of proving that he was entitled to a
suspension of his arraignment and that the
questioned orders are contrary to 11 (c).
He who alleges must prove his allegations.
3. So also, his failure to attach documents relevant to
his allegations warrants the dismissal of the petition,
pursuant to Rule 46.3, which states:
Sec. 3 Contents and filing of petition; effect of non-
compliance with requirements. [...]
It shall be filed in seven (7) clearly legible copies together
with proof of service thereof on the respondent with the
53Petron is the registered owner in the Philippines of the
trademarks GASUL and GASUL cylinders used for its LPG products
and the sole entity in the Philippines authorized to allow re-fillers
and distributors to refill, use, sell, and distribute GASUL LPG
containers, products and its trademarks.
54 Pilipinas Shell is the authorized user in the Philippines of the
tradename, trademarks, symbols, or designs of its principal (SHELL
INTERNATIONAL), including the marks SHELLANE and SHELL device
in connection with the production, sale, and distribution of
SHELLANCE LPG and the only corporation authorized to allow
refillers and distributors to refill, use, sell and distribute SHELLANE
LPG containers and products
55 [BASIS OF THE SEARCH WARRANT]
original copy intended for the court indicated as such by the
petitioner, and shall be accompanied by a clearly legible
duplicate original or certified true copy of the judgment,
order, resolution, or ruling subject thereof, such material
portions of the record as are referred to therein, and other
documents relevant or pertinent thereto.
xxxxxxxxx
The failure of the petitioner to comply with any of the
foregoing requirements shall be sufficient ground for the
dismissal of the petition.
WILLIAM C. YAO, SR., LUISA C. YAO, RICHARD C. YAO,
WILLIAM C. YAO JR., and ROGER C. YAO,petitioners,
vs.
THE PEOPLE OF THE PHILIPPINES, PETRON
CORPORATION and PILIPINAS SHELL PETROLEUM
CORP., and its Principal, SHELL INTL PETROLEUM CO.
LTD., respondents.
CHICO-NAZARIO, J. G.R. No. 168306 June 19,
2007
FACTS:
1. Petitioners are incorporators and officers of
Masagana Gas Corporation, an entity engaged in
refilling, sale and distribution of LPG products.
2. Petron53 and Pilipinas Shells54 LPG products are
sold under the marks GASUL and SHELLANE,
respectively.
3. NBI agent Oblanca filed 2 application for a search
warrant [basis of the search warrant]55 with the RTC
against petitioners and the other occupants of the
MASAGANA compound for alleged violation of Sec.
155 of the Intellectual Property Code in producing,
selling, offering for sale and distributing LPG
products using steel cylinders bearing the
In his 2 separate affidavits, Oblanca allege that the NBI
received a letter complaint from Petron and Pilipinas Shell,
authorized representative of Shell Intl, requesting assistance in the
investigation, apprehension and prosecution of entities violating
their intellectual property rights. Oblanca reviewed the certificates
of trademark registrations and other documents and evidence to
confirm that MASAGANA is not authorized to use Petron and
Shellane LPG cylinders and its trademarks and tradename or to be
refillers or distributors of Petron and Shellance LPGs. He also
conducted a test-buy and attached copies of the photographs of the
delivery trucks, LPG cylinders and registration papers.
Alajar, hired by Petron and Pilipinas Shell in their Brand
Protection Program, had accompanied him in the surveillance and
test buy, executing 2 separate affidavits to corroborate the
statement of Oblanca.
 tradenames, trademarks, and devices of Petron and
Pilipina Shell.
4. Judge Sadang found probable cause and issued
search warrants commanding any peace officer to
make an immediate search of the MASAGAN
compound and seize the items listed in the search
warrant.
5. Pursuant to the search warrants issued, several
cylindrical LPG tanks and other items were seized.
6. Petitioners filed with the RTC a Motion to Quash
Search Warrants because of lack of probable
cause, the area was not particularly specified and it
was in the form of a general warrant. Oblanca and
Alajar aslo did not have the authority to apply for a
search warrant and had committed perjury when
they swore that they conducted a test-buy.
7. MASAGANA, as 3rd party claimant, filed with the
RTC a Motion for the Return of Motor Compressor
and LPG Refilling Machine claiming ownership over
said items and that they were used in the operation
of its legitimate business with the seizure
jeopardizing their business interest.
8. RTC denied both motions and their MR. The CA
affirmed the orders of the RTC and denied their MR.
ISSUE W/N the seized items should be returned. -NO
HOLDING: Petition is denied. Decision and Resolution of the
CA is affirmed.
RATIO
PETITIONERS: The items are owned and used by
MASAGANA in their legitimate business. There is no action
for infringement filed against them and/or MASAGANA from
the seizure of the items up. Therefore, as per Section 20 of
A.M. No. 02-1-06-SC56, said items should be returned to their
lawful owner.
COURT: The law does not require that the property to be
seized should be owned by the person against whom the
search warrants is directed. It is sufficient that the person
against whom the warrant is directed has control or
possession of the property sought to be seized. Hence, even
if the properties seized belong to MASAGANA, their seizure
pursuant to the search warrants is still valid.
Further, it is apparent that the motor compressor, LPG
refilling machine and the GASUL and SHELL LPG cylinders
seized were the corpus delicti, the body or substance of the
crime, or the evidence of the commission of trademark
infringement. These were the very instruments used or
intended to be used by the petitioners in trademark
infringement. It is possible that, if returned to MASAGANA,
these items will be used again in violating the intellectual
property rights of Petron and Pilipinas Shell. Thus, the RTC
was justified in denying the petitioners motion for their return
56
Sec. 20 Failure to File a Complaint. The writ shall also,
upon motion of the expected adverse party, be set aside and
the seized documents and articles returned to the expected
so as to prevent the petitioners and/or MASAGANA from
using them again in trademark infringement.
A.M. 02-1-06-SC [RULE ON SEARCH AND SEIZURE IN
CIVIL ACTIONS FOR INFRINGEMENT OF
INTELLECTUAL PROPERTY RIGHTS]is not applicable in
the present case because it governs only searches and
seizures in civil actions for infringement of intellectual
property rights. The offense complained of herein is for
criminal violation of Section 155 in relation to Section 170 of
Republic Act No. 8293.
[OTHER ISSUES SKIP]
W/N Oblanca and Alajar had personal knowledge of the
violation of the intellectual property rights of
respondents.
Oblanca reviewed the certificates of trademark registration
of Petron and Pilipinas Shell and confirmed that MASAGANA
is not authorized to sell, use, refill or distribute GASUL and
SHELLANCE LPG cylinder containers. He and Alajar
monitored the activities of MASAGANA in its refilling plant
station in their compound and conducted 2 test-buys for the
purchase of LPG cylinders bearing the trademarks GASUL
and SHELLANE, refilled in their presence by MASAGANA
employees. He alleged, as corroborated by Alajar, that there
were stockpiles of multi-branded cylinders which included
GASUL and SHELLANCE cylinders and that delivery trucks
delivered said items to various retail outlets. He submitted to
the court various documentary evidence which includes
certified true copies of Certificate of Registration of Petron
and Shell, pictures of delivery trucks making deliveries, cash
invoices issued by Masagana and etc.
Alajar owns the private investigation and research firm hired
to verify that MASAGANA was involved in the illegal sale and
refill of GASUL and SHELLANE cylinders. He familiarized
himself with the registered trademarks of GASUL and
SHELLANE, and the distinct features of the LPG cylinders
bearing the trademarks before conducting surveillance and
test-buys on MASAGANA.
From the foregoing testimonial documentary and object
evidence, Oblanca and Alajar had personal knowledge that
petitioners, through MASAGANA, have been using LPG
cylinders bearing the marks GASUL and SHELLANCE
without permission from Petron and Pilipinas Shell. Such
evidence is sufficient to estasblish probable cause. The fact
that Oblanca and Alajar used different names do not negate
their personal knowledge, such is a common practice to
facilitate the lawful arrest of suspected violators of the law.
There is nothing in the law that states that they must state
that they used different names which conducting their
adverse part if no case is filed with the appropriate court or
authority within 31 calendar days for the date of the issuance
of the writ.
investigation or divulge such facts during the preliminary
examinations.
W/N the Judge complied with the requirements of Sec. 5
of Rule 126 of the ROC
The questions of the Judge were probing. He required the
NBI agent to confirm the contents of his affidavit, inquired
about the circumstance regarding the test-buys and
description of the LPG cylinders. He inquired about the
sketch of the place and any distinguishing signs and the
tailing and monitoring of the delivery trucks. He also inquired
why the search warrant was filed in Cavite City when
MASAGANA Gas Corp was located in Trece Marites, Cavite.
W/N Oblanco and the lawyers of Petron and Pilipinas
Shell are authorized to apply for the search warrants.
The fact that Oblanco is a member of the Anti-Organized
Crime Division and not of the Intellectual Property Division
does not abrogate his authority to apply for a search warrant.
There is nothing under Rule 126 of the ROC which command
that the applicant law enforcer must be a member of the
division that is assigned or related to the subject crime or
offense before the application for a search warrant may be
acted upon.
The lawyers did not have to present the letter-complaint or a
board resolution from Petron and Pilipinas Shell for the
determination of probable cause, the affidavits of Oblanco
and Alajar with the evidence presented are sufficient to
establish probable cause for the issuance of a search
warrant.
W/N the search warrants specified the particular area to
be searched and are in the form of general warrants,
which are violative of the Constitution.
A description of the place to be searched is sufficient if the
officer with the warrant can, with reasonable effort, ascertain
and identify the place intended and distinguish it from other
places in the community. An executing officers prior
knowledge as to the place intended in the warrant is relevant,
especially when he is the affiant on whose affidavit the
warrant has been issued and when he knows that the judge
57A search warrant may be said to particularly describe the things to
be seized when the description is as specific as the circumstances
will ordinarily allow; or when the description expresses a conclusion
of fact not of law by which the warrant officer may be guided in
who issued the warrant intended the compound described in
the affidavit.
The search warrants commanded the peace officers to
make a search on the MASAGANA compound at Governors
Drive,Trece Marites, Cavite. The raiding team ascertained
and reached the Masagana compound without difficulty
since they do not have any other offices in Trece Marites and
Oblanca, who was familiar with said compound, was a part
of the raiding team.
Even if there were several structures inside the compound,
they constitute the essential and necessary components of
the business and cannot be treated separately, especially
since it is used and owned solely by Masagana. The law
merely requires that the place to be searched can be
distinguished in relation to the other places in the community.
W/N the search warrant indicated with particularity the
items to be seized since it merely described the items a
LPG cylinders bearing the trademarks GASUL and
SHELLANE without specifying the sizes.
While it is true that the property to be seized under a warrant
must be particularly described57 therein and no other
property can be taken thereunder, yet the description is
required to be specific only in so far as the circumstances will
ordinarily allow. The law does not require that the things to
be seized must be described in precise and minute details
as to leave no room for doubt on the part of the searching
authorities. Substantial similarity of those articles described
and those seized as a class or specie would suffice.
The items to be seized under the search warrants in question
were sufficiently described with particularity. The articles to
be confiscated were restricted to the following: (1) LPG
cylinders bearing the trademarks GASUL and SHELLANE;
(2) Machines and equipments used or intended to be used
in the illegal refilling of GASUL and SHELLANE cylinders; (3)
Documents which pertain only to the production, sale and
distribution of the GASUL and SHELLANE LPG cylinders;
and (4) Delivery trucks bearing Plate Nos. WTE-527, XAM-
970 and WFC-603, hauling trucks, and/or other delivery
trucks or vehicles or conveyances being used or intended to
be used for the purpose of selling and/or distributing GASUL
and SHELLANE LPG cylinders.
Additionally, since the described items are clearly limited
only to those which bear direct relation to the offense, i.e.,
violation of section 155 of Republic Act No. 8293, for which
making the search and seizure; or when the things described are
limited to those which bear direct relation to the offense for which
the warrant is being issued.
the warrant was issued, the requirement of particularity of
description is satisfied.

Therefore, an indication of the accurate sizes of the GASUL

and SHELLANE LPG cylinders or tanks would be
unnecessary.