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Birkenstock v Philippine Shoe Expo

Background

In 1994, the German company Birkenstock Orthopaedie Gmbh & Co., filed several trade mark
applications for its mark BIRKENSTOCK and its variants in the Philippines. To its surprise, Birkenstock
learned that its BIRKENSTOCK trade mark was already registered to a Philippine company called
Philippine Shoe Expo Marketing Corporation (Shoe Expo).

Birkenstock quickly filed actions for cancellation against the registered mark. While the cancellation case
was pending, Shoe Expo failed to file the required 10th year Declaration of Actual Use (DAU). Failure to
file the DAU results in the trade mark registrations being deemed withdrawn. Because of this, the
cancellation action filed by Birkenstock was dismissed for being moot and academic, paving the way for
its own trade mark applications to be allowed. Shoe Expo, not deterred by the cancellation of its
registration, filed oppositions to the trade mark applications of Birkenstock, on the grounds that it had
been using the mark BIRKENSTOCK for over 16 years in the Philippines and that it had re-applied for
said trade marks, and had also obtained copyright registration for the word BIRKENSTOCK in 1991.

The Bureau of Legal Affairs (BLA), adjudicating bureau of the Intellectual Property Office in the
Philippines (IPOPHL), consolidated the opposition actions, and on May 28 2008 issued a decision
sustaining ShoeExpos oppositions and rejecting the applications of Birkenstock based on the following:

(i) Shoe Expo was the prior user and adopter of the BIRKENSTOCK trade mark in the Philippines.

(ii) Birkenstock did not present evidence of actual use of the mark in the Philippines.

(iii) The marks of Birkenstock are not internationally well-known.

(iv) Birkenstock submitted only photocopies of its certificates of registrations from other countries which
were not considered admissible as evidence.

Action taken

Birkenstock appealed the BLA decision to the IPOPHL Director General (DG) who reversed the BLA, and
held that with the cancellation of Shoe Expos registrations, the reason to reject Birkenstocks applications
on the ground of prior registration no longer existed, and that the evidence presented showed that
Birkenstock was the true and lawful owner and prior user of the mark BIRKENSTOCK. The DG
disregarded Shoe Expos copyright registration for the Birkenstock word since copyright and trade marks
are different forms of intellectual property rights and cannot be interchanged.

Dissatisfied, Shoe Expo appealed the DGs decision to the Court of Appeals (CA) which reinstated the
BLA decision. Birkenstock then appealed the CA decision to the Supreme Court.
The Supreme Court emphasised that it is not the registration of a mark by itself which is the mode of
acquiring ownership since the applicant, if not the owner of the mark, has no right to apply for its
registration; it is the ownership of a mark that confers the right to register it. The Supreme Court also,
quoting the IPOPHL DG, stated that BIRKENSTOCK is obviously of German origin and is a highly
distinct and arbitrary mark, adding that it is very remote and incredible that two persons could coin the
same or identical mark for use in the same line of business without any plausible explanation from Shoe
Expo.

It must be noted that this case went through four stages of contentious litigation, from the BLA up to
FREDCO MANUFACTURING CORPORATION v. PRESIDENT AND FELLOWS OF
HARVARD COLLEGE
G.R. NO. 185917

FACTS:

Fredco Manufacturing filed a petition to cancel the registration of respondents mark


Harvard Veritas Shield Symbol used in products such as bags and T-shirts. Fredco
alleged that the mark Harvard was first used and registered by New York Garments, a
domestic corporation and its predecessor-in-interest, used in its clothing articles.
Harvard University on the other hand, alleged that it is the lawful owner of the name and
mark in numerous countries worldwide including the Philippines which was used in
commerce as early as 1872. Harvard further contend that it never authorized any
person to use its name or mark in connection with any goods in the Philippines. The
IPO Bureau of Legal Affairs cancelled respondents registration of the mark but only
with regard to the goods which were confusingly similar with that of the petitioner. The
IPO reversed the decision. CA affirmed.

ISSUE: WON respondents trade name is infringed?

HELD: YES.

Fredcos use of the mark Harvard, coupled with its claimed origin in Cambridge,
Massachusetts, obviously suggests a false connection with Harvard University. On this
ground alone, Fredcos registration of the mark Harvard should have been disallowed.
Indisputably, Fredco does not have any affiliation or connection with Harvard University,
or even with Cambridge, Massachusetts. Fredco or its predecessor New York Garments
was not established in 1936, or in the U.S.A. as indicated by Fredco in its oblong logo.

Under Philippine law, a trade name of a national of a State that is a party to the Paris
Convention, whether or not the trade name forms part of a trademark, is protected
without the obligation of filing or registration. Harvard is the trade name of the world
famous Harvard University, and it is also a trademark of Harvard University. Under
Article 8 of the Paris Convention, as well as Section 37 of R.A. No. 166, Harvard
University is entitled to protection in the Philippines of its trade name Harvard even
without registration of such trade name in the Philippines. This means that no
educational entity in the Philippines can use the trade name Harvard without the
consent of Harvard University. Likewise, no entity in the Philippines can claim, expressly
or impliedly through the use of the name and mark Harvard, that its products or
services are authorized, approved, or licensed by, or sourced from, Harvard University
without the latters consent.
ANA ANG v TORIBIO TEODORO
G.R. No. L-48226

FACTS:

Toribio Teodoro has continuously used "Ang Tibay," both as a trade-mark and as a
trade-name, in the manufacture and sale of slippers, shoes, and indoor baseballs since
1910. On September 29, 1915, he formally registered it as trade-mark and as trade-
name on January 3, 1933.

Petitioner Ana Ang registered the same trade-mark "Ang Tibay" for pants and shirts on
April 11, 1932, and established a factory for the manufacture of said articles in the year
1937.

The Court of First Instance of Manila absolved the defendant (Ms. Ang) on the grounds
that the two trademarks are dissimilar and are used on different and non-competing
goods; that there had been no exclusive use of the trade-mark by the plaintiff; and that
there had been no fraud in the use of the said trade-mark by the defendant because the
goods on which it is used are essentially different from those of the plaintiff.

The Court of Appeals reversed said judgment, directing the Director of Commerce to
cancel the registration of the trade-mark "Ang Tibay" in favor of petitioner, and
perpetually enjoining the latter from using said trade-mark on goods manufactured and
sold by her.

ISSUE: Are the two trademarks used similar or do they belong to the same class of
merchandise?

HELD:

Yes, pants and shirts are goods closely similar to shoes and slippers. They belong to
the same class of merchandise as shoes and slippers. They are closely related goods.

The Supreme Court affirmed the judgment of the Court of Appeals and added that
although two non-competing articles may be classified under to different classes by the
Patent Office because they are deemed not to possess the same descriptive properties,
they would, nevertheless, be held by the courts to belong to the same class if the
simultaneous use on them of identical or closely similar trademarks would be likely to
cause confusion as to the origin, or personal source, of the second users goods. They
would be considered as not falling under the same class only if they are so dissimilar or
so foreign to each other as to make it unlikely that the purchaser would think that the
first user made the second users goods.
MCDONALD'S CORPORATION v. L.C. BIG MAK BURGER, INC.
G.R. No. 143993

FACTS:

McDonald's Corporation ("McDonald's") is a US corporation that operates a global chain


of fast-food restaurants, with McGeorge Food Industries ("McGeorge"), as the Philippine
franchisee.

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

Based on this Home Registration, McDonald's applied for the registration of the same
mark in the Principal Register of the then Philippine Bureau of Patents, Trademarks and
Technology ("PBPTT") (now IPO). On 18 July 1985, the PBPTT allowed registration of
the "Big Mac."

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

On 21 October 1988, respondent corporation applied with the PBPTT for the registration
of the "Big Mak" mark for its hamburger sandwiches, which was opposed by
McDonald's. McDonald's also informed LC Big Mak chairman of its exclusive right to the
"Big Mac" mark and requested him to desist from using the "Big Mac" mark or any
similar mark.

Having received no reply, petitioners sued L.C. Big Mak Burger, Inc. and its directors
before Makati RTC Branch 137 ("RTC"), for trademark infringement and unfair
competition.

RTC rendered a Decision finding respondent corporation liable for trademark


infringement and unfair competition. CA reversed RTC's decision on appeal.

ISSUES:
1.) WON respondent corporation is liable for trademark infringement and unfair
competition.
2.) WON Respondents committed Unfair Competition

HELD 1: 1: Yes
Section 22 of Republic Act No. 166, as amended, defines trademark infringement as
follows:
Infringement, what constitutes. - Any person who [1] shall use, without the consent of
the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered
mark or 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.
To establish trademark infringement, the following elements must be shown: (1) the
validity of plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the
mark or its colorable imitation by the alleged infringer results in "likelihood of confusion."
Of these, it is the element of likelihood of confusion that is the gravamen of trademark
infringement.

1st element:

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

The "Big Mac" mark, which should be treated in its entirety and not dissected word for
word, is neither generic nor descriptive. Generic marks are commonly used as the name
or description of a kind of goods, such as "Lite" for beer. Descriptive marks, on the other
hand, convey the characteristics, functions, qualities or ingredients of a product to one
who has never seen it or does not know it exists, such as "Arthriticare" for arthritis
medication. On the contrary, "Big Mac" falls under the class of 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.

2nd element:

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

3rd element:

Section 22 covers two types of confusion arising from the use of similar or colorable
imitation marks, namely, confusion of goods (confusion in which the ordinarily prudent
purchaser would be induced to purchase one product in the belief that he was
purchasing the other) and confusion of business (though the goods of the parties are
different, the defendant's product is such as might reasonably be assumed to originate
with the plaintiff, and the public would then be deceived either into that belief or into the
belief that there is some connection between the plaintiff and defendant which, in fact,
does not exist).
There is confusion of goods in this case since respondents used the "Big Mak" mark on
the same goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used.

There is also confusion of business due to Respondents' use of the "Big Mak" mark in
the sale of hamburgers, the same business that petitioners are engaged in, also results
in confusion of business. The registered trademark owner may use his mark on the
same or similar products, in different segments of the market, and at different price
levels depending on variations of the products for specific segments of the market. The
registered trademark owner enjoys protection in product and market areas that are the
normal potential expansion of his business.

Furthermore, In determining likelihood of confusion, the SC has relied on the dominancy


test (similarity of the prevalent features of the competing trademarks that might cause
confusion) over the holistic test (consideration of the entirety of the marks as applied to
the products, including the labels and packaging).

Applying the dominancy test, Respondents' use of the "Big Mak" mark results in
likelihood of confusion. Aurally the two marks are the same, with the first word of both
marks phonetically the same, and the second word of both marks also phonetically the
same. Visually, the two marks have both two words and six letters, with the first word of
both marks having the same letters and the second word having the same first two
letters.

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

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

Any person who will employ deception or any other means contrary to good faith by
which he shall pass off the goods manufactured by him or in which he deals, or his
business, or services for those of the one having established such goodwill, or who shall
commit any acts calculated to produce said result, shall be guilty of unfair competition,
and shall be subject to an action therefor.
The essential elements of an action for unfair competition are (1) confusing similarity in
the general appearance of the goods, and (2) intent to deceive the public and defraud a
competitor.

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

McDONALDS CORPORATION v. MACJOY


FASTFOOD CORPORATION. G.R. No. 166115.
February 2, 2007
FACTS:

MacJoy Fastfood Corp. is a corporation in the sale of fastfood based in Cebu


filed with IPO for the registration of their name.

McDonald's Corporation filed an opposition to the application. McDonald's


claims that their logo and use of their name would falsely tend to suggest a
connection with MacJoy's services and food products, thus, constituting a
fraud upon the general public and further cause the dilution of the
distinctiveness of petitioners registered and internationally recognized
MCDONALDS marks to its prejudice and irreparable damage.

Respondent averred that MACJOY has been used for the past many years in
good faith and has spent considerable sums of money for said mark.

The IPO held that there is confusing similarity The CA held otherwise
stating there are
predominant difference like the spelling, the font and color of the
trademark and the picture of the logo.

ISSUE: Whether the ruling of the CA is correct.

RULING:

No. Jurisprudence developed two tests, the dominancy and holistic test. The
dominancy test focuses on the similarity of the prevalent features of the
competing trademarks that might cause confusion or deception while the
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. Under the latter test, a comparison of the words is not
the only determinant factor.
The IPO, though they correctly used the dominancy, they should have taken
more considerations. In recent cases, the SC has consistently used and
applied the dominancy test in determining confusing similarity or likelihood
of confusion between competing trademarks. The CA, while seemingly
applying the dominancy test, in fact actually applied the holistic test.

Applying the dominancy test to the instant case, the Court both marks are
confusingly similar with each other such that an ordinary purchaser can
conclude an association or relation between the marks. The predominant
features such as the "M," "Mc," and "Mac" appearing in both easily attract the
attention of would-be customers. Most importantly, both trademarks are
used in the sale of fastfood products.

Petitioner has the right of ownership in the said marks. Petitioner's mark
was registered in 1977 while respondent only in 1991.
SKECHERS, U.S.A., INC., vs. INTER PACIFIC INDUSTRIAL TRADING CORP., et al
GR No. 164321 March 23, 2011

Facts:
Skechers (petitioner) filed with RTC Manila application for issuance of search warrants against
an outlet or warehouse operated by respondents for infringement of trademark. Petitioner has
registered the trademark Skechers and the trademark S (within an oval design) with the IPO.
Respondents moved to quash the search warrants, arguing that there was no confusing
similarity between petitioners Skechers rubber shoes and its Strongrubber shoes.
RTC agreed with respondents
CA affirmed RTCs ruling

Issue:
Whether or not there was trademark infringement.

SC Ruling:
Yes.
The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to
cause confusion. In determining similarity and likelihood of confusion, jurisprudence has developed
tests: the Dominancy Test and the Holistic or Totality Test. The 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. Given more consideration are the aural
and visual impressions created by the marks on the buyers. In contrast, the Holistic or Totality Test
necessitates a consideration of the entirety of the marks as applied to the products, including the labels
and packaging, in determining confusing similarity.
Applying the Dominancy Test to the case at bar, the Court held that the use of the stylized S
by respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the
IPO. While it is undisputed that petitioners stylized S is within an oval design, the dominant feature of
the trademark is the stylized S, as it is precisely the stylized S which catches the eye of the
purchaser. Thus, even if respondent did not use an oval design, the mere fact that it used the same
stylized S, the same being the dominant feature of petitioners trademark, already constitutes
infringement under the Dominancy Test.
Comparing petitioners Energy model and respondents Strong rubber shoes, respondent also
used the color scheme of blue, white and gray utilized by petitioner. Even the design and wavelike
pattern of the midsole and outer sole of respondents shoes are very similar to petitioners shoes, if not
exact patterns thereof. The protection of trademarks as intellectual property is intended not only to
preserve the goodwill and reputation of the business established on the goods bearing the mark through
actual use over a period of time, but also to safeguard the public as consumers against confusion on
these goods.
ASIA BREWERY, INC v CA
n September 1988, San Miguel Corporation (SMC) sued Asia Brewery Inc. for allegedly infringing upon their
trademark on their beer product popularly known as San Miguel Pale Pilsen; that Asia Brewerys Beer na
Beer product, by infringing upon SMCs trademark has committed unfair competition as Beer na Beer creates
confusion between the two products. The RTC ruled in favor of Asia Brewery but the Court of Appeals reversed
the RTC.
ISSUE: Whether or not Asia Brewery infringed upon the trademark of SMC.
HELD: No. Both products are manufactured using amber colored steinie bottles of 320 ml. Both were labeled in
a rectangular fashion using white color paint. But other than these similarities, there are salient differences
between the two. As found by the Supreme Court, among others they are the following:
1. The dominant feature of SMCs trademark are the words San Miguel Pale Pilsen while that of Asia
Brewerys trademark is the word Beer. Nowhere in SMCs product can be seen the word Beer nor in Asia
Brewerys product can be seen the words San Miguel Pale Pilsen. Surely, someone buying Beer na Beer
cannot mistake it as San Miguel Pale Pilsen beer.
2. The bottle designs are different. SMCs bottles have slender tapered neck while that of Beer na Beer are
fat. Though both beer products use steinie bottles, SMC cannot claim that Asia Brewery copied the idea from
SMC. SMC did not invent but merely borrowed the steinie bottle from abroad and SMC does not have any
patent or trademark to protect the steinie bottle shape and design.
3. In SMC bottles, the words pale pilsen are written diagonally while in Beer na Beer, the words pale pilsen
are written horizontally. Further, the words pale pilsen cannot be said to be copied from SMC for pale pilsen
are generic words which originated from Pilsen, Czechoslovakia. Pilsen is a geographically descriptive word
and is non-registrable.
4. SMC bottles have no slogans written on them while Asia Brewerys bottles have a copyrighted slogan written
on them that is Beer na Beer.
5. In SMC bottles, it is expressly labeled as manufactured by SMC. In Asia Brewery beer products, it is likewise
expressly labeled as manufactured by Asia Brewery. Surely, there is no intention on the part of Asia Brewery to
confuse the public and make it appear that Beer na Beer is a product of SMC, a long-established and more
popular brand.
PROSOURCE INTERNATIONAL, INC. v HORPHAG RESEARCH MANAGEMENT
GR NO. 180073
November 25, 2009
FACTS:

Respondent is a corporation and owner of trademark PYCNOGENOL, a food.


Respondent later discovered that petitioner was also distributing a similar
food supplement using the mark PCO-GENOLS since 1996. This prompted
respondent to demand that petitioner cease and desist from using the
aforesaid mark.

Respondent filed a Complaint for Infringement of Trademark with Prayer for


Preliminary Injunction against petitioner, in using the name PCO-GENOLS for
being confusingly similar. Petitioner appealed otherwise.

The RTC decided in favor of respondent. It observed that PYCNOGENOL and


PCO-GENOLS have the same suffix "GENOL" which appears to be merely
descriptive and thus open for trademark registration by combining it with
other words and concluded that the marks, when read, sound similar, and
thus confusingly similar especially since they both refer to food
supplements.

On appeal to the CA, petitioner failed to obtain a favorable decision. The


appellate court explained that under the Dominancy or the Holistic Test,
PCO-GENOLS is deceptively similar to PYCNOGENOL.

ISSUE: Whether the names are confusingly similar.

RULING:

Yes. There is confusing similarity and the petition is denied. Jurisprudence


developed two test to prove such.

The Dominancy Test focuses on the similarity of the prevalent features of


the competing trademarks that might cause confusion and deception, thus
constituting infringement. If the competing trademark contains the main,
essential and 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 to deceive
purchasers. Courts will consider more the aural and visual impressions
created by the marks in the public mind, giving little weight to factors like
prices, quality, sales outlets, and market segments.

The Holistic Test entails a consideration of the entirety of the marks as


applied to the products, including the labels and packaging, in determining
confusing similarity. Not only on the predominant words should be the focus
but also on the other features appearing on both labels in order that the
observer may draw his conclusion whether one is confusingly similar to the
other.

SC applied the Dominancy Test.Both the words have the same suffix "GENOL"
which on evidence, appears to be merely descriptive and furnish no
indication of the origin of the article and hence, open for trademark
registration by the plaintiff through combination with another word or
phrase. When the two words are pronounced, the sound effects are
confusingly similar not to mention that they are both described by their
manufacturers as a food supplement and thus, identified as such by their
public consumers. And although there were dissimilarities in the trademark
due to the type of letters used as well as the size, color and design
employed on their individual packages/bottles, still the close relationship of
the competing products name in sounds as they were pronounced, clearly
indicates that purchasers could be misled into believing that they are the
same and/or originates from a common source and manufacturer.
DEL MONTE V.
SUNSHINE SAUCE-
Infringement of
Trademark and Unfair
Competition
In making the comparison to determine similarity, the question is NOT
whether the two articles are distinguishable by their label when set side 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, is such as to
likely result in his confounding it with the original. The court therefore should
be guided by its first impression because the imitator will always try to create
enough differences to confuse the Court but enough similarity to confuse the
public.

FACTS:
Petitioner Del Monte Corporation is a foreign company organized under the
laws of the United States and not engaged in business in the Philippines. Both
the Philippines and the United States are signatories to the Convention of
Paris of September 27, 1965, which grants to the nationals of the parties
rights and advantages which their own nationals enjoy for the repression of
acts of infringement and unfair competition.

Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation


duly organized under the laws of the Philippines. 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. Del Monte authorized Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration, for which it was granted
Certificate of Trademark Registration No. SR-913 by the Philippine Patent
Office under the Supplemental Register. Del Monte also obtained two
registration certificates for its trademark "DEL MONTE" and its logo.
Respondent Sunshine Sauce Manufacturing Industries was issued a
Certificate of Registration by the Bureau of Domestic Trade to engage in the
manufacture, packing, distribution and sale of various kinds of sauce,
identified by the logo Sunshine Fruit Catsup. The product itself was contained
in various kinds of bottles, including the Del Monte bottle, which the private
respondent bought from the junk shops for recycling.

Having received reports that the private respondent was using its exclusively
designed bottles and a logo confusingly similar to Del Monte's, Philpack and
Del Monte filed a complaint against the private respondent for infringement of
trademark and unfair competition.

Sunshine alleged that its logo was substantially different from the Del Monte
logo and would not confuse the buying public to the detriment of the
petitioners.

ISSUE:
Whether or not there was infringement of trademark and unfair competition.

RULING: YES.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law,
provides:
Any person who shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any registered mark or
tradename in connection with the sale, offering for sale, or advertising of any
goods, business or services 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...
Sec. 29 of the same law states as follows:

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...

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) Infringement of trademark is the unauthorized use of a trademark, whereas


unfair competition is the passing off of one's goods as those of another.
(2) In infringement of trademark fraudulent intent is unnecessary whereas in
unfair competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a
prerequisite to the action, whereas in unfair competition registration is not
necessary.

In determining whether two trademarks are confusingly similar, the two marks
in their entirety as they appear in the respective labels must be considered in
relation to the goods to which they are attached; the discerning eye of the
observer must focus not only on the predorninant words but also on the other
features appearing on both labels.

The ordinary buyer does not usually make such scrutiny nor does he usually
have the time to do so. The question is NOT whether the two articles are
distinguishable by their label when set side 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, is such as to likely result in his confounding it
with the original.The court therefore should be guided by its first impression
because the imitator will always try to create enough differences to confuse
the Court but enough similarity to confuse the public. Here, although there are
particular differences, such are only manifest when you conduct a thorough
comparison.

We also note that the respondent court failed to take into consideration
several factors which should have affected its conclusion, to wit: age, training
and education of the usual purchaser, the nature and cost of the article,
whether the article is bought for immediate consumption and also the
conditions under which it is usually purchased. It has been aptly observed that
the ultimate ratio in cases of grave doubt is the rule that any doubt should be
resolved against the newcomer inasmuch as the field from which he can
select a desirable trademark to indicate the origin of his product is obviously a
large one. As Sunshine's label is an infringement of the Del Monte's
trademark, law and equity call for the cancellation of the private respondent's
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.
FRUIT OF THE LOOM V. CA (G.R. NO. L-
32747)

Facts:
Petitioner Fruit of the Loom, an American corporation, is
the registrant of the trademark Fruit of the Loom covering
goods such as underwear and other textile fabrics.
Respondent General Garments on the other hand, is a
domestic corporation and a registrant of the trademark
Fruit for Eve covering garments similar to petitioner.
Alleging respondents mark and hang tag is confusingly
similar with its own, petitioner filed a complaint for
trademark infringement and unfair competition. The trial
court found for petitioner. CA reversed the judgment.
Issue:
Whether or not respondents mark and hang tag is
confusingly similar with that of petitioner.
Ruling: NO.
WE agree with the respondent court that by mere
pronouncing the two marks, it could hardly be said that it
will provoke a confusion as to mistake one for the other.
Standing by itself, FRUIT OF THE LOOM is wholly
different from FRUIT FOR EVE. WE do not agree with
petitioner that the dominant feature of both trademarks is
the word FRUIT for even in the printing of the trademark
in both hang tags, the word FRUIT is not at all made
dominant over the other words. As to the design and
coloring scheme of the hang tags, the shape of petitioners
hang tag is round with a base that looks like a paper rolled
a few inches in both ends; while that of private respondent
is plain rectangle without any base. The designs differ.
Petitioners trademark is written in almost semi-circle
while that of private respondent is written in straight line in
bigger letters than petitioners. Private respondents tag has
only an apple in its center but that of petitioner has also
clusters of grapes that surround the apple in the center. The
colors of the hang tag are also very distinct from each
other. WE hold that the trademarks FRUIT OF THE
LOOM and FRUIT FOR EVE do not resemble each other
as to confuse or deceive an ordinary purchaser. WE hold
that the trademarks FRUIT OF THE LOOM and FRUIT
FOR EVE do not resemble each other as to confuse or
deceive an ordinary purchaser.
Digest

BERRIS AGRICULTURAL CO., INC. vs. NORVY ABYADANG, G.R. No.


1 8 3 4 0 4 , October 13, 2010Facts:
Abyadang filed a trademark application with the IPO for the mark "NS D -10 PLUS" for
use inconnection with Fungicide (Class 5) with active ingredient 80% Mancozeb. Berris
AgriculturalCo., Inc. (Berris), filed with the IPO Bureau of Legal Affairs (IPO -BLA) a
Verified Notice of Opposition against the mark under application allegedly because "NS
D-10 PLUS" is similar and/or confusingly similar to its registered trademark "D -10 80
WP," also used for Fungicide(Class 5) with active ingredient 80% Mancozeb.D i r e c t o r
Estrellita Beltran -Abelardo of the IPO -BLA decided in favor of Berris.
H o w e v e r , Abyadang appealed to the CA which reversed the decision.
Issues:
1.W/N there exists no confusing similarity between the marks2.W/N the cancellation of
Petitioners duly registered and validly existing trademark in theabsence of a properly
filed Petition for Cancellation befor e the Intellectual PropertyOffice is not in accord with
the Intellectual Property Code and applicable Decisions of the Supreme Court.

Held:First Issue
The determination of priority of use of a mark is a question of fact. Adoption of the mark alonedoes not
suffice. One may make advertisements, issue circulars, distribute price lists on certaing o o d s , b u t
these alone will not inure to the claim of ownership of the mark until the
g o o d s bearing the mark are sold to the public in the market. Accordingly, receipts, sales invoices,
andtestimonies of witnesses as customers, or orders of buyers, best prove the actual use of a mark intrade
and commerce during a certain period of time.In the instant case, both parties have submitted proof to
support their claim of ownership of their respective trademarks. Berris presented the following
evidence: (1) its trademark application d a t e d N o v e m b e r 2 9 , 2 0 0 2 w i t h A p p l i c a t i o n
N o . 4 - 2 0 0 2 - 0 0 1 0 2 7 2 ; ( 2 ) i t s I P O c e r t i f i c a t e o f registration dated October 25, 2004 and
July 8, 2004 as the date of registration; (3) a photocopyo f i t s p a c k a g i n g b e a r i n g t h e m a r k " D -
1 0 8 0 W P " ; ( 4 ) p h o t o c o p i e s o f i t s s a l e s i n v o i c e s a n d official receipts; and (5) its
notarized DAU dated April 23, 2003, stating that the mark was firstused on June 20, 2002, and
indicating that, as proof of actual use, copies of official receipts or sales invoices of goods
using the mark were attached as Annex "B."Abyadangs proofs consisted of the following: (1) a
photocopy of the packaging for his marketedf u n g i c i d e b e a r i n g m a r k " N S D - 1 0 P L U S " ; ( 2 )
A b y a d a n g s A f f i d a v i t d a t e d F e b r u a r y 1 4 , 2006, stating among others that the mark "NS D-10
PLUS" was his own creation derived from: N for Norvy, his name; S for Soledad, his wifes name; D
the first letter for December, his b i r t h m o n t h ; 1 0 f o r O c t o b e r , t h e 1 0 t h m o n t h o f t h e
y e a r , t h e m o n t h o f h i s b u s i n e s s n a m e registration; and PLUS to connote superior quality;
that when he applied for registration, therewas nobody applying for a mark similar to "NS D -10
PLUS" (3) Certification dated December 1 9 , 2 0 0 5 i s s u e d b y t h e F P A , s t a t i n g t h a t
" N S D - 1 0 P L U S " i s o w n e d a n d d i s t r i b u t e d b y N S Northern Organic Fertilizer,
registered with the FPA since May 26, 2003, and had been in the market since July 30,
2003;Berris is the prior user of the mark. Berris was able to establish that it was using its mark "D-1080
WP" since June 20, 2002, even before it filed for its registration with the IPO on
November 29, 2002, as shown by its DAU which was under oath and notarized, bearing the
stamp of theBureau of Trademarks of the IPO on April 25, 2003, and the DAU, being a notarized
document,especially when received in due course by the IPO, is evidence of the facts it stated and has
the presumption of regularity, entitled to full faith and credit upon its face. The DAU is supported bythe
Certification dated April 21, 2006 issued by the Bureau of Trademarks that Berris mark
isstill valid and existing.According to Section 123.1(d) of R.A. No. 8293, a mark cannot be
registered if it is identicalwith a registered mark be longing to a different proprietor with
an earlier filing or priority date, with respect to: (1) the same goods or services; (2) closely related
goods or services; or (3) near resemblance of such mark as to likely deceive or cause
confusion.Comparing Berris mark "D-10 80 WP" with Abyadangs mark "NS D-10 PLUS," as
appearingon their respective packages, one cannot but notice that both have a common
component whichi s " D - 1 0 . " O n B e r r i s p a c k a g e , t h e " D - 1 0 " i s w r i t t e n w i t h a
b i g g e r f o n t t h a n t h e " 8 0 W P . " Admittedly, the "D-10" is the dominant feature of the mark. The
"D-10," being at the beginningof the mark, is what is most remembered of it. Although, it
appears in Berris certificate of registration in the same font size as the "80 WP," its
dominancy in the "D-10 80 WP" mark stands since the difference in the form does not alter its
distinctive character.A p p l y i n g t h e D o m i n a n c y T e s t , i t c a n n o t b e g a i n s a i d t h a t
A b y a d a n g s " N S D - 1 0 P L U S " i s similar to Berris "D-10 80 WP," that confusion or mistake is
more likely to occur. Undeniably, b o t h m a r k s p e r t a i n t o t h e s a m e t y p e o f g o o d s
f u n g i c i d e w i t h 8 0 % M a n c o z e b a s a n a c t i v e ingredient and used for the same group of fruits,
crops, vegetables, and ornamental plants, usingthe same dosage and manner of application. They also
belong to the same classification of goodsunder R.A. No. 8293. Both depictions of "D-10," as found in
both marks, are similar in size, suchthat this portion is what catches the eye of the purchaser. Undeniably,
the likelihood of confusionis present.T h i s l i k e l i h o o d o f c o n f u s i o n a n d m i s t a k e i s m a d e
m o r e m a n i f e s t w h e n t h e H o l i s t i c T e s t i s applied, taking into consideration the
packaging, for both use the same type of material (foil t y p e ) a n d h a v e i d e n t i c a l
color schemes (red, green, and white); and the marks are
b o t h predominantly red in color, with the same phrase "BROAD SPECTRUM FUNGICIDE"
writtenunderneath.
Corporation v. Daway

G.R. No. 157216 November 20, 2003

Lessons Applicable: Jurisdiction of Trial court, special affirmative defences on


infringement

Laws Applicable:

FACTS:
Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of
Rolex and Crown Device, filed against 246 Corporation the instant suit for
trademark infringement and damages with prayer for the issuance of a
restraining order or writ of preliminary injunctionbefore the RTC of QC
o July 1996: 246 adopted and , since then, has been using without authority
the mark Rolex in its business name Rolex Music Lounge as well as in its
newspaper advertisements as Rolex Music Lounge, KTV, Disco & Party
Club.
246 answered special affirmative defences: no confusion would arise from
the use by petitioner of the mark Rolex considering that its entertainment
business is totally unrelated to the items catered by respondents such as
watches, clocks, bracelets and parts thereof
RTC: quashed the subpoena ad testificandum and denied petitioners
motion for preliminary hearing on affirmative defenses with motion to dismiss
CA: affirmed

ISSUE: W/N RTC performed a grave abuse of discretion

HELD: NO. petition denied. RTC affirmed


The issue of whether or not a trademark infringement exists, is a question
of fact that could best be determined by the trial court.
Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293)
o (f) Is identical with, or confusingly similar to, or constitutes a translation
of a mark considered well-known in accordance with the preceding paragraph,
which is registered in the Philippines with respect to goods or services which
are not similar to those with respect to which registration is applied for:
Provided, That use of the mark in relation to those goods or services would
indicate a connection between those goods or services, and the owner of the
registered mark: Provided, further, That the interest of the owner of the
registered mark are likely to be damaged by such use
Section 123.1(f) is clearly in point because the Music Lounge of petitioner
is entirely unrelated to respondents business involving watches, clocks,
bracelets, etc. However, the Court cannot yet resolve the merits of the
present controversy considering that the requisites for the application of
Section 123.1(f), which constitute the kernel issue at bar, clearly require
determination facts of which need to be resolved at the trial court. The
existence or absence of these requisites should be addressed in a full blown
hearing and not on a mere preliminary hearing. The respondent must be
given ample opportunity to prove its claim, and the petitioner to debunk the
same.
Ecole De Cuisine Manille (Cordon Bleuofthe Philippines), Inc.,vs. Renaud Cointreau & Cie and Le Cordon Bleu Int'l.,
B.V.

Facts:
Cointreau, a partnership registered under the laws of France, filed for a trademark application for the mark "LE
CORDON BLEU & DEVICE" pursuant to Section 37 of Republic Act No. 166. Petitioner Ecole filed an opposition to
the subject application, averring that it is the owner of the mark "LE CORDON BLEU, ECOLE DE CUISINE MANILLE,"
which it has been using since 1948 in cooking and other culinary activities, including in its restaurant business; and
it has earned immense and invaluable goodwill such that Cointreaus use of the subject mark will actually create
confusion, mistake, and deception to the buying public as to the origin and sponsorship of the goods, and cause
great and irreparable injury and damage to Ecoles business reputation and goodwill as a senior user of the same.
The Bureau of Legal Affairs (BLA) sustained Ecoles opposition to the subject mark, necessarily resulting in the
rejection of Cointreaus application. While noting the certificates of registration obtained from other countries and
other pertinent materials showing the use of the subject mark outside the Philippines, the BLA did not find such
evidence sufficient to establish Cointreaus claim of prior use of the same in the Philippines. It emphasized that the
adoption and use of trademark must be in commerce in the Philippines and not abroad. Cointreau has not
established any proprietary right entitled to protection in the Philippine jurisdiction because the law on
trademarks rests upon the doctrine of nationality or territoriality.
The IPO Director General reversed and set aside the BLAs decision.. The CA affirmed and declared Cointreau as the
true and actual owner of the subject mark with a right to register the same in the Philippines under Section 37 of
R.A. No. 166, having registered such mark in its country of origin on November 25, 1986

Issue:
Whether the CA was correct in upholding the IPO Director Generals ruling that Cointreau is the true and lawful
owner of the subject mark and thus, entitled to have the same registered under its name.

Held:
Yes, the CA was correct. At the time Ecole started using the subject mark, the same was already being used by
Cointreau, albeit abroad, of which Ecoles directress was fully aware, being an alumna of the latters culinary
school in Paris, France. Hence, Ecole cannot claim any tinge of ownership whatsoever over the subject mark as
Cointreau is the true and lawful owner thereof. As such, the IPO Director General and the CA were correct in
declaring Cointreau as the true and lawful owner of the subject mark and as such, is entitled to have the same
registered under its name.
In any case, the present law on trademarks, Republic Act No. 8293, otherwise known as the Intellectual Property
Code of the Philippines, as amended, has already dispensed with the requirement of prior actual use at the time of
registration. Thus, there is more reason to allow the registration of the subject mark under the name of Cointreau
as its true and lawful owner.
Lyceum of the Philippines vs CA Case Digest
Lyceum of the Philippines vs. Court of Appeals

[GR 101897, 5 March 1993]

Facts: Lyceum of the Philippines Inc. had sometime before commenced in the
SEC a proceeding (SEC-Case No. 1241) against the Lyceum of Baguio, Inc. to
require it to change its corporate name and to adopt another name not "similar
[to] or identical" with that of petitioner. In an Order dated 20 April 1977, Associate
Commissioner Julio Sulit held that the corporate name of petitioner and that of
the Lyceum of Baguio, Inc. were substantially identical because of the presence
of a "dominant" word, i.e., "Lyceum," the name of the geographical location of the
campus being the only word which distinguished one from the other corporate
name. The SEC also noted that Lyceum of the Philippines Inc. had registered as
a corporation ahead of the Lyceum of Baguio, Inc. in point of time, and ordered
the latter to change its name to another name "not similar or identical [with]" the
names of previously registered entities. The Lyceum of Baguio, Inc. assailed the
Order of the SEC before the Supreme Court (GR L-46595). In a Minute
Resolution dated 14 September 1977, the Court denied the Petition for Review
for lack of merit. Entry of judgment in that case was made on 21 October 1977.

Armed with the Resolution of the Supreme Court, the Lyceum of the Philippines
then wrote all the educational institutions it could find using the word "Lyceum" as
part of their corporate name, and advised them to discontinue such use of
"Lyceum." When, with the passage of time, it became clear that this recourse had
failed, and on 24 February 1984, Lyceum of the Philippines instituted before the
SEC SEC-Case 2579 to enforce what Lyceum of the Philippines claims as its
proprietary right to the word "Lyceum." The SEC hearing officer rendered a
decision sustaining petitioner's claim to an exclusive right to use the word
"Lyceum." The hearing officer relied upon the SEC ruling in the Lyceum of
Baguio, Inc. case (SEC-Case 1241) and held that the word "Lyceum" was
capable of appropriation and that petitioner had acquired an enforceable
exclusive right to the use of that word. On appeal, however, by Lyceum Of Aparri,
Lyceum Of Cabagan, Lyceum Of Camalaniugan, Inc., Lyceum Of Lallo, Inc.,
Lyceum Of Tuao, Inc., Buhi Lyceum, Central Lyceum Of Catanduanes, Lyceum
Of Southern Philippines, Lyceum Of Eastern Mindanao, Inc. and Western
Pangasinan Lyceum, Inc.,, which are also educational institutions, to the SEC En
Banc, the decision of the hearing officer was reversed and set aside. The SEC
En Banc did not consider the word "Lyceum" to have become so identified with
Lyceum of the Philippines as to render use thereof by other institutions as
productive of confusion about the identity of the schools concerned in the mind of
the general public. Unlike its hearing officer, the SEC En Banc held that the
attaching of geographical names to the word "Lyceum" served sufficiently to
distinguish the schools from one another, especially in view of the fact that the
campuses of Lyceum of the Philippines and those of the other Lyceums were
physically quite remote from each other. Lyceum of the Philippines then went on
appeal to the Court of Appeals. In its Decision dated 28 June 1991, however, the
Court of Appeals affirmed the questioned Orders of the SEC En Banc. Lyceum of
the Philippines filed a motion for reconsideration, without success. Lyceum of the
Philippines filed the petition for review.

Issue:

1. Whether the names of the contending Lyceum schools are


confusingly similar.
2. Whether the use by the Lyceum of the Philippines of "Lyceum" in its
corporate name has been for such length of time and with such exclusivity
as to have become associated or identified with the petitioner institution in
the mind of the general public (or at least that portion of the general public
which has to do with schools).
Held:

1. The Articles of Incorporation of a corporation must, among other things, set out
the name of the corporation. Section 18 of the Corporation Code establishes a
restrictive rule insofar as corporate names are concerned. It provides that "No
corporate name may be allowed by the Securities an Exchange Commission if
the proposed name is identical or deceptively or confusingly similar to that of any
existing corporation or to any other name already protected by law or is patently
deceptive, confusing or contrary to existing laws. When a change in the
corporate name is approved, the Commission shall issue an amended certificate
of incorporation under the amended name." The policy underlying the prohibition
in Section 18 against the registration of a corporate name which is "identical or
deceptively or confusingly similar" to that of any existing corporation or which is
"patently deceptive" or "patently confusing" or "contrary to existing laws," is the
avoidance of fraud upon the public which would have occasion to deal with the
entity concerned, the evasion of legal obligations and duties, and the reduction of
difficulties of administration and supervision over corporations. Herein, the Court
does not consider that the corporate names of the academic institutions are
"identical with, or deceptively or confusingly similar" to that of Lyceum of the
Philippines Inc.. True enough, the corporate names of the other schools
(defendant institutions) entities all carry the word "Lyceum" but confusion and
deception are effectively precluded by the appending of geographic names to the
word "Lyceum." Thus, the "Lyceum of Aparri" cannot be mistaken by the general
public for the Lyceum of the Philippines, or that the "Lyceum of Camalaniugan"
would be confused with the Lyceum of the Philippines. Further, etymologically,
the word "Lyceum" is the Latin word for the Greek lykeion which in turn referred
to a locality on the river Ilissius in ancient Athens "comprising an enclosure
dedicated to Apollo and adorned with fountains and buildings erected by
Pisistratus, Pericles and Lycurgus frequented by the youth for exercise and by
the philosopher Aristotle and his followers for teaching." In time, the word
"Lyceum" became associated with schools and other institutions providing public
lectures and concerts and public discussions. Thus today, the word "Lyceum"
generally refers to a school or an institution of learning. Since "Lyceum" or
"Liceo" denotes a school or institution of learning, it is not unnatural to use this
word to designate an entity which is organized and operating as an educational
institution. To determine whether a given corporate name is "identical" or
"confusingly or deceptively similar" with another entity's corporate name, it is not
enough to ascertain the presence of "Lyceum" or "Liceo" in both names. One
must evaluate corporate names in their entirety and when the name of Lyceum of
the Philippines is juxtaposed with the names of private respondents, they are not
reasonably regarded as "identical" or "confusingly or deceptively similar" with
each other.

2. The number alone of the private respondents in the present case suggests
strongly that the Lyceum of the Philippines' use of the word "Lyceum" has not
been attended with the exclusivity essential for applicability of the doctrine of
secondary meaning. It may be noted also that at least one of the private
respondents, i.e., the Western Pangasinan Lyceum, Inc., used the term
"Lyceum" 17 years before Lyceum of the Philippines registered its own corporate
name with the SEC and began using the word "Lyceum." It follows that if any
institution had acquired an exclusive right to the word "Lyceum," that institution
would have been the Western Pangasinan Lyceum, Inc. rather than Lyceum of
the Philippines. Hence, Lyceum of the Philippines is not entitled to a legally
enforceable exclusive right to use the word "Lyceum" in its corporate name and
that other institutions may use "Lyceum" as part of their corporate names.
19. Shang Properties v. St. Francis Development Corporation
GR No. 190706; July 21, 2014

FACTS:
Respondent domestic corporation is engaged in the real estatebusiness and is the developer of the St.
Francis Square Commercial Center (built sometime in 1992).
It filed separate complaints against petitionersbefore the IPO - BLA, namely:
(a) IPV Case an intellectualproperty violation case for unfair competition, false or
fraudulentdeclaration, and damages arising from petitioners use and filing ofapplications for
the registration of the marks THE ST. FRANCISTOWERS and THE ST. FRANCIS SHANGRI-LA
PLACE,;and
(b) St. Francis Towers IP Case an inter partes caseopposing the petitioners application for
registration of the mark THE ST.FRANCIS TOWERS for use relative to the latters business,
particularlythe construction of permanent buildings or structures for residential andoffice
purposes; and
(c) St. Francis Shangri-La IP Case an inter partescase opposing thepetitioners application for
registration of the mark THE ST. FRANCISSHANGRI-LA PLACE,.

Respondent alleged that it has used the mark ST.FRANCIS to identify its numerous
propertydevelopment projects locatedat Ortigas Center, such as the aforementioned St. Francis
SquareCommercial Center, a shopping mall called the St. Francis Square, and amixed-use realty
project plan that includes the St. Francis Towers.Respondent added that as a result of its continuous use
of the mark ST.FRANCIS in its real estate business, it has gained substantial goodwill withthe public
that consumers and traders closely identify the said mark with itsproperty development projects.
Accordingly, respondent claimed thatpetitioners could not have the mark THE ST. FRANCIS
TOWERSregistered in their names, and that petitioners use of the marks THE ST.FRANCIS TOWERS
and THE ST. FRANCIS SHANGRI-LA PLACE intheir own real estate development projects constitutes
unfair competition aswell as false or fraudulent declaration.

Petitioners denied committing unfair competition and false orfraudulent declaration, maintaining that
they could register the mark THEST.FRANCIS TOWERS and THE ST. FRANCIS SHANGRI-LAPLACE
under their names. They contended that respondent is barred fromclaiming ownership and exclusive
use of the mark ST. FRANCIS becausethe same is geographically descriptive of the goods or services
for which it isintended to be used.This is because respondents as well as petitioners realestate
development projects are located along the streets bearing the nameSt. Francis, particularly, St.
Francis Avenue and St. Francis Street (nowknown as Bank Drive), both within the vicinity of the Ortigas
Center.

ISSUE:
Whether or notpetitioners are guilty of unfair competition in using the marks THE ST.FRANCIS
TOWERS and THE ST. FRANCIS SHANGRI-LA PLACE.

RULING:
NO.

RATIO DECIDENDI:
The unfair competition concept refers to the the passing off (or palming off)or attempting to pass off
upon the public of the goods or business of oneperson as the goods or business of another with the end
and probable effectof deceiving the public. Passing off (or palming off) takes place where thedefendant,
by imitative devices on the general appearance of the goods,misleads prospective purchasers into
buying his merchandise under theimpression that they are buying that of his competitors. [In other
words], thedefendant gives his goods the general appearance of the goods of hiscompetitor with the
intention of deceiving the public that the goods arethose of his competitor.
The true test of unfair competition has thusbeen whether the acts of the defendant have the intent
of deceiving orare calculated to deceive the ordinary buyer making his purchasesunder the ordinary
conditions of the particular trade to which thecontroversy relates. Based on the foregoing, it is
therefore essential toprove the existence of fraud, or the intent to deceive, actual or probable,
determined through a judicious scrutiny of the factual circumstancesattendant to a particular case.
Here, the Court finds the element of fraud to be wanting; hence, there can be no unfair competition.The
CAs contrary conclusion was faultilypremised on its impression that respondent had the right to the
exclusive useof the mark ST. FRANCIS, for which the latter had purportedlyestablished considerable
goodwill. What the CA appears to have disregardedor been mistaken in its disquisition, however, is the
geographicallydescriptivenature of the mark ST. FRANCIS which thus bars its exclusiveappropriability,
unless a secondary meaning is acquired.

As deftly explainedin the U.S. case of Great Southern Bank v. First Southern Bank: [d]escriptive
geographical terms are in the public domain in the sensethat every seller should have the right to
inform customers of thegeographical origin of his goods. A geographically descriptive term is any
noun or adjective that designates geographical location and would tendto be regarded by buyers as
descriptive of the geographic location of originof the goods or services. A geographically descriptive
term can indicateany geographic location on earth, such as continents, nations, regions,states, cities,
streets and addresses, areas of cities, rivers, and any otherlocation referred to by a recognized name. In
order to determine whether ornot the geographic term in question is descriptively used, the
followingquestion is relevant: (1) Is the mark the name of the place or region fromwhich the goods
actually come? If the answer is yes, then the geographicterm is probably used in a descriptive sense,
and secondary meaning isrequired for protection.
Secondary meaning is established when a descriptivemark no longer causes the public to associate the
goods with a particularplace, but to associate the goods with a particular source. In other words, it isnot
enough that a geographically-descriptive mark partakes of the name of aplace known generally to the
public to be denied registration as it is also necessary to show that the public would make a goods/place
association
that is, to believe that the goods for which the mark is sought to be registered originate in that
place.However, where there isno genuine issue that the geographical significance of a term is
itsprimary significance and where the geographical place is neither obscurenor remote, a public
association of the goods with the place mayordinarily be presumed from the fact that the applicants
own goodscome from the geographical place named in the mark.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 190065 August 16, 2010
DERMALINE, INC., Petitioner,
vs.
MYRA PHARMACEUTICALS, INC. Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari1 seeking to reverse and set aside the Decision dated August 7, 20092and the
Resolution dated October 28, 20093 of the Court of Appeals (CA) in CA-G.R. SP No. 108627.
The antecedent facts and proceedings
On October 21, 2006, petitioner Dermaline, Inc. (Dermaline) filed before the Intellectual Property Office (IPO) an
application for registration of the trademark "DERMALINE DERMALINE, INC." (Application No. 4-2006011536). The
application was published for Opposition in the IPO E-Gazette on March 9, 2007.
On May 8, 2007, respondent Myra Pharmaceuticals, Inc. (Myra) filed a Verified Opposition 4 alleging that the trademark
sought to be registered by Dermaline so resembles its trademark "DERMALIN" and will likely cause confusion, mistake
and deception to the purchasing public. Myra said that the registration of Dermalines trademark will violate Section
1235 of Republic Act (R.A.) No. 8293 (Intellectual Property Code of the Philippines). It further alleged that Dermalines use
and registration of its applied trademark will diminish the distinctiveness and dilute the goodwill of Myras "DERMALIN,"
registered with the IPO way back July 8, 1986, renewed for ten (10) years on July 8, 2006. Myra has been extensively
using "DERMALIN" commercially since October 31, 1977, and said mark is still valid and subsisting.
Myra claimed that, despite Dermalines attempt to differentiate its applied mark, the dominant feature is the term
"DERMALINE," which is practically identical with its own "DERMALIN," more particularly that the first eight (8) letters of
the marks are identical, and that notwithstanding the additional letter "E" by Dermaline, the pronunciation for both
marks are identical. Further, both marks have three (3) syllables each, with each syllable identical in sound and
appearance, even if the last syllable of "DERMALINE" consisted of four (4) letters while "DERMALIN" consisted only of
three (3).
Myra also pointed out that Dermaline applied for the same mark "DERMALINE" on June 3, 2003 and was already refused
registration by the IPO. By filing this new application for registration, Dermaline appears to have engaged in a fishing
expedition for the approval of its mark. Myra argued that its intellectual property right over its trademark is protected
under Section 1476 of R.A. No. 8293.
Myra asserted that the mark "DERMALINE DERMALINE, INC." is aurally similar to its own mark such that the registration
and use of Dermalines applied mark will enable it to obtain benefit from Myras reputation, goodwill and advertising and
will lead the public into believing that Dermaline is, in any way, connected to Myra. Myra added that even if the subject
application was under Classification 447 for various skin treatments, it could still be connected to the "DERMALIN" mark
under Classification 58 for pharmaceutical products, since ultimately these goods are very closely related.
In its Verified Answer,9 Dermaline countered that a simple comparison of the trademark "DERMALINE DERMALINE, INC."
vis--vis Myras "DERMALIN" trademark would show that they have entirely different features and distinctive
presentation, thus it cannot result in confusion, mistake or deception on the part of the purchasing public. Dermaline
contended that, in determining if the subject trademarks are confusingly similar, a comparison of the words is not the
only determinant, but their entirety must be considered in relation to the goods to which they are attached, including the
other features appearing in both labels. It claimed that there were glaring and striking dissimilarities between the two
trademarks, such that its trademark "DERMALINE DERMALINE, INC." speaks for itself (Res ipsa loquitur). Dermaline
further argued that there could not be any relation between its trademark for health and beauty services from Myras
trademark classified under medicinal goods against skin disorders.
The parties failed to settle amicably. Consequently, the preliminary conference was terminated and they were directed to
file their respective position papers.10
On April 10, 2008, the IPO-Bureau of Legal Affairs rendered Decision No. 2008-7011 sustaining Myras opposition
pursuant to Section 123.1(d) of R.A. No. 8293. It disposed
WHEREFORE, the Verified Opposition is, as it is, hereby SUSTAINED. Consequently, Application Serial No. 4-2006-011536
for the mark DERMALINE, DERMALINE, INC. Stylized Wordmark for Dermaline, Inc. under class 44 covering the
aforementioned goods filed on 21 October 2006, is as it is hereby, REJECTED.
Let the file wrapper of DERMALINE, DERMALINE, INC. Stylized Wordmark subject matter of this case be forwarded to
the Bureau of Trademarks (BOT) for appropriate action in accordance with this Decision.
SO ORDERED.12
Aggrieved, Dermaline filed a motion for reconsideration, but it was denied under Resolution No. 2009-12(D)13dated
January 16, 2009.
Expectedly, Dermaline appealed to the Office of the Director General of the IPO. However, in an Order14 dated April 17,
2009, the appeal was dismissed for being filed out of time.
Undaunted, Dermaline appealed to the CA, but it affirmed and upheld the Order dated April 17, 2009 and the rejection of
Dermalines application for registration of trademark. The CA likewise denied Dermalines motion for reconsideration;
hence, this petition raising the issue of whether the CA erred in upholding the IPOs rejection of Dermalines application
for registration of trademark.
The petition is without merit.
A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof, adopted and
used by a manufacturer or merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt
by others.15 Inarguably, it is an intellectual property deserving protection by law. In trademark controversies, each case
must be scrutinized according to its peculiar circumstances, such that jurisprudential precedents should only be made to
apply if they are specifically in point.16
As Myra correctly posits, as a registered trademark owner, it has the right under Section 147 of R.A. No. 8293 to prevent
third parties from using a trademark, or similar signs or containers for goods or services, without its consent, identical or
similar to its registered trademark, where such use would result in a likelihood of confusion.
In determining likelihood of confusion, case law has developed two (2) tests, the Dominancy Test and the Holistic or
Totality Test.
The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks that might cause
confusion or deception.17 It is applied when the trademark sought to be registered contains the main, essential and
dominant features of the earlier registered trademark, and confusion or deception is likely to result. Duplication or
imitation is not even required; neither is it necessary that the label of the applied mark for registration should suggest an
effort to imitate. The important issue is whether the use of the marks involved would likely cause confusion or mistake in
the mind of or deceive the ordinary purchaser, or one who is accustomed to buy, and therefore to some extent familiar
with, the goods in question.18 Given greater consideration are the aural and visual impressions created by the marks in
the public mind, giving little weight to factors like prices, quality, sales outlets, and market segments. 19 The test of
dominancy is now explicitly incorporated into law in Section 155.1 of R.A. No. 8293 which provides
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same
container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any
goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; (emphasis supplied)
On the other hand, the Holistic Test entails a consideration of the entirety of the marks as applied to the products,
including labels and packaging, in determining confusing similarity. The scrutinizing eye of the observer must focus not
only on the predominant words but also on the other features appearing in both labels so that a conclusion may be drawn
as to whether one is confusingly similar to the other.20
Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types of confusion, viz:
(1) confusion of goods (product confusion), where the ordinarily prudent purchaser would be induced to purchase one
product in the belief that he was purchasing the other; and (2) confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product, the mark of which registration is applied for by one party, is
such as might reasonably be assumed to originate with 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.21
In rejecting the application of Dermaline for the registration of its mark "DERMALINE DERMALINE, INC.," the IPO applied
the Dominancy Test. It declared that both confusion of goods and service and confusion of business or of origin were
apparent in both trademarks. It also noted that, per Bureau Decision No. 2007-179 dated December 4, 2007, it already
sustained the opposition of Myra involving the trademark "DERMALINE" of Dermaline under Classification 5. The IPO also
upheld Myras right under Section 138 of R.A. No. 8293, which provides that a certification of registration of a mark is
prima facie evidence of the validity of the registration, the registrants ownership of the mark, and of the registrants
exclusive right to use the same in connection with the goods and those that are related thereto specified in the certificate.
We agree with the findings of the IPO. As correctly applied by the IPO in this case, while there are no set rules that can be
deduced as what constitutes a dominant feature with respect to trademarks applied for registration; usually, what are
taken into account are signs, color, design, peculiar shape or name, or some special, easily remembered earmarks of the
brand that readily attracts and catches the attention of the ordinary consumer. 22
Dermalines insistence that its applied trademark "DERMALINE DERMALINE, INC." had differences "too striking to be
mistaken" from Myras "DERMALIN" cannot, therefore, be sustained. While it is true that the two marks are presented
differently Dermalines mark is written with the first "DERMALINE" in script going diagonally upwards from left to
right, with an upper case "D" followed by the rest of the letters in lower case, and the portion "DERMALINE, INC." is
written in upper case letters, below and smaller than the long-hand portion; while Myras mark "DERMALIN" is written in
an upright font, with a capital "D" and followed by lower case letters the likelihood of confusion is still apparent. This is
because they are almost spelled in the same way, except for Dermalines mark which ends with the letter "E," and they are
pronounced practically in the same manner in three (3) syllables, with the ending letter "E" in Dermalines mark
pronounced silently. Thus, when an ordinary purchaser, for example, hears an advertisement of Dermalines applied
trademark over the radio, chances are he will associate it with Myras registered mark.
Further, Dermalines stance that its product belongs to a separate and different classification from Myras products with
the registered trademark does not eradicate the possibility of mistake on the part of the purchasing public to associate the
former with the latter, especially considering that both classifications pertain to treatments for the skin.1avvphi1
Indeed, the registered trademark owner may use its mark on the same or similar products, in different segments of the
market, and at different price levels depending on variations of the products for specific segments of the market. The
Court is cognizant that the registered trademark owner enjoys protection in product and market areas that are the
normal potential expansion of his business. Thus, we have held
Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to guarding his
goods or business from actual market competition with identical or similar products of the parties, but extends to all
cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as
where prospective purchasers would be misled into thinking that the complaining party has extended his business into
the field (see 148 ALR 56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of the infringer; or when it
forestalls the normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577).23 (Emphasis supplied)
Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra, such that, considering the
current proliferation of health and beauty products in the market, the purchasers would likely be misled that Myra has
already expanded its business through Dermaline from merely carrying pharmaceutical topical applications for the skin
to health and beauty services.
Verily, when one applies for the registration of a trademark or label which is almost the same or that very closely
resembles one already used and registered by another, the application should be rejected and dismissed outright, even
without any opposition on the part of the owner and user of a previously registered label or trademark. This is intended
not only to avoid confusion on the part of the public, but also to protect an already used and registered trademark and an
established goodwill.24
Besides, the issue on protection of intellectual property, such as trademarks, is factual in nature. The findings of the IPO,
upheld on appeal by the same office, and further sustained by the CA, bear great weight and deserves respect from this
Court. Moreover, the decision of the IPO had already attained finality when Dermaline failed to timely file its appeal with
the IPO Office of the Director General.
WHEREFORE, the petition is DENIED. The Decision dated August 7, 2009 and the Resolution dated October 28, 2009 of
the Court of Appeals in CA-G.R. SP No. 108627 are AFFIRMED. Costs against petitioner.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
Roma Drug vs RTC

G.R. No. 149907 April 16, 2009

FACTS: The petitioner Roma Drug was among the 6 local drugstores in Pampanga raided by the joint
NBI and BFAD inspectors where various medicines were found and seized on the strength of a search
warrant issued by the RTC of Pampanga and upon the request of Glaxo Smithkline, a registered
corporation and the authorized Philippine distributor of the medicines seized from said drugstores. The
NBI proceeded in filing a complaint against petitioner for violation of Section 4 (in relation to Sections 3
and 5) of Republic Act No. 8203, also known as the Special Law on Counterfeit Drugs (SLCD), with the
Office of the Provincial Prosecutor in San Fernando, Pampanga. The law prohibits the sale of counterfeit
drugs, which include an "unregistered imported drug product". The term "unregistered" signifies lack of
registration with the Bureau of Patent, Trademark and Technology Transfer of a trademark of a drug in
the name of a natural or juridical person. The seized drugs are identical in content with their Philippine-
registered counterparts. No claim was made that the drugs were adulterated in any way or mislabeled at
the least. Their classification as "counterfeit" is based solely on the fact that they were imported from
abroad and not purchased from Philippine-registered owner of the patent or trademark of the drugs.

Petitioner Roma Drug challenged the constitutionality of the SLCD during the preliminary investigation but
the provincial prosecutors issued a resolution recommending that Rodriguez, the owner of Roma Drug,
be charged with violation of Section 4 of the SLCD.

Thus, Roma Drug filed a Petition for Prohibition before the Supreme Court questing the RTC-Guagua
Pampanga and the Provincial Prosecutor to desist from further prosecuting Rodriguez, and that Sections
3(b)(3), 4 and 5 of the SLCD be declared unconstitutional.

The Court issued a temporary restraining order enjoining the RTC from proceeding with the trial against
Rodriguez, and the BFAD, the NBI and Glaxo Smithkline from prosecuting the petitioners.

Glaxo Smithkline and the Office of the Solicitor General (OSG) have opposed the petition. On the
constitutional issue, Glaxo Smithkline asserts the rule that the SLCD is presumed constitutional. The OSG
invokes the presumption of constitutionality of statutes and asserts that there is no clear and unequivocal
breach of the Constitution presented by the SLCD.

ISSUE: WON RA 9502 impliedly abrogates the provisions of RA 8203 (SLCD) with which the petitioner is
criminally charged? Yes
HELD: (petition granted, writ of prohibition issued, TRO made permanent)

It may be that Rep. Act No. 9502 (Universally Accessible Cheaper and Quality Medicines Act of 2008) did
not expressly repeal any provision of the SLCD. However, it is clear that the SLCD's classification of
"unregistered imported drugs" as "counterfeit drugs," and of corresponding criminal penalties therefore
are irreconcilably in the imposition conflict with Rep. Act No. 9502 since the latter indubitably grants
private third persons the unqualified right to import or otherwise use such drugs. Where a statute of later
date, such as Rep. Act No. 9502, clearly reveals an intention on the part of the legislature to
abrogate a prior act on the subject that intention must be given effect. When a subsequent
enactment covering a field of operation co-terminus with a prior statute cannot by any reasonable
construction be given effect while the prior law remains in operative existence because of irreconcilable
conflict between the two acts, the latest legislative expression prevails and the prior law yields to the
extent of the conflict. Irreconcilable inconsistency between two laws embracing the same subject may
exist when the later law nullifies the reason or purpose of the earlier act, so that the latter loses all
meaning and function. Legis posteriors priores contrarias abrogant.

For the reasons above-stated, the prosecution of petitioner is no longer warranted and the quested writ of
prohibition should accordingly be issued.
025Levi Strauss & Co. vs. Clinton Apparelle

G.R. No. 138900 September 20, 2005

Topic:Issuance of the writ of preliminary injunction; Trademark dilution

Ponente:Tinga, J.

DOCTRINE:

According to Section 138 of Republic Act No. 8293, [the Certificate of Registration] is prima facie
evidence of the validity of the registration, the registrants ownership of the mark and of the exclusive right
to use the same in connection with the goods or services and those that are related thereto specified in
the certificate. Section 147.1 of said law likewise grants the owner of the registered mark the exclusive
right to prevent all third parties not having the owners consent from using in the course of trade identical
or similar signs for goods or services which are identical or similar to those in respect of which the
trademark is registered if such use results in a likelihood of confusion.

Trademark dilution is the lessening of the capacity of a famous mark to identify and distinguish good or
services; To be eligible for the protection from dilution, there has to be a finding that: (1) the trademark
sought to be protected is famous and distinctive; (2) the use by another began after the owners mark
became famous; and (3) such subsequent use defames the owners mark.

____________________________________________________________________________________
_____________

FACTS:

Petitioners LS & Co. and LSPI filed a Complaint for Trademark Infringement, Injunction and Damages
against respondent Clinton Apparelle, Inc. together with an alternative defendant, Olympian Garments,
Inc. before the RTC.The complaint alleged that LS & Co., a foreign corporation duly organized and
existing under the laws of the State of Delaware, U.S.A., and engaged in the apparel business, is the
owner by prior adoption and use since 1986 of the internationally famous Dockers and Design trademark.
This ownership is evidenced by its valid and existing registrations in various member countries of the
Paris Convention. In the Philippines, it has a Certificate of Registration No. 46619 in the Principal
Register for use of said trademark on pants, shirts, blouses, skirts, shorts, sweatshirts and jackets under
Class 25.

The Dockers and Design trademark was first used in the Philippines in or about May 1988, by LSPI, a
domestic corporation engaged in the manufacture, sale and distribution of various products bearing
trademarks owned by LS & Co. LS & Co. and LSPI further alleged that they discovered the presence in
the local market of jeans under the brand name Paddocks using a device which is substantially, if not
exactly, similar to the Dockers and Design trademark owned by and registered in the name of LS & Co.,
without its consent. Based on their information and belief, Clinton Apparelle manufactured and continues
to manufacture such Paddocks jeans and other apparel.
The petitioners prayed for the issuance of a TRO. On the date of the hearing for the issuance of the TRO,
respondentsClinton Apparelle and Olympian Garmentsfailed to appear despite notice. Clinton Apparelle
claimed that it was not notified of such hearing. Only Olympian Garments allegedly had been issued with
summons. Despite the absence of the defendants, the hearing on the application for the issuance of a
TRO continued.

The RTC then issued a TRO and a writ of preliminary injuction. The evidence considered by the trial court
in granting injunctive relief were as follows:

(1) a certified true copy of the certificate of trademark registration for Dockers and Design; (2) a pair of DOCKERS pants bearing the
Dockers and Design trademark; (3) a pair of Paddocks pants bearing respondents assailed logo; (4) the Trends MBL Survey Report
purportedly proving that there was confusing similarity between two marks; (5) the affidavit of one Bernabe Alajar which recounted
petitioners prior adoption, use and registration of the Dockers and Design trademark; and (6) the affidavit of one Mercedes Abad of
Trends MBL, Inc. which detailed the methodology and procedure used in their survey and the results thereof.

On appeal, the CA held that the trial court did not follow the procedure required by law for the issuance of
a TRO as Clinton Apparelle was not duly notified of the date of the summary hearing for its issuance.
Thus, the CA ruled that the TRO had been improperly issued. The CA also held that the issuance of the
writ of preliminary injunction is questionable. According to the CA, petitionersLS & Co. and LSPI failed to
sufficiently establish its material and substantial right to have the writ issued.

ISSUE:Whether the issuance of the writ of preliminary injunction by the trial court was proper and whether
the Court of Appeals erred in setting aside the orders of the trial court.

No.After a careful consideration of the facts and arguments of the parties, the Court finds that
petitioners did not adequately prove their entitlement to the injunctive writ. In the absence of proof of a
legal right and the injury sustained by the applicant, an order of the trial court granting the issuance of an
injunctive writ will be set aside for having been issued with grave abuse of discretion. Conformably, the
Court of Appeals was correct in setting aside the assailed orders of the trial court.

____________________________________________________________________________________
_____________

RULING:Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an order granted at
any stage of an action prior to the judgment or final order requiring a party or a court, agency or a person
to refrain from a particular act or acts. An extraordinary remedy, injunction is designed to preserve or
maintain the status quo of things and is generally availed of to prevent actual or threatened acts until the
merits of the case can be heard. It is resorted to only when there is a pressing necessity to avoid injurious
consequences, which cannot be remedied under any standard compensation. The resolution of an
application for a writ of preliminary injunction rests upon the existence of an emergency or of a special
recourse before the main case can be heard in due course of proceedings.Section 3, Rule 58, of the
Rules of Court enumerates the grounds for the issuance of a preliminary injunction:

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the
commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;

(b) That the commission, continuance, or non-performance of the act or acts complained of during the litigation would probably
work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and
tending to render the judgment ineffectual.

Under the cited provision, a clear and positive right especially calling for judicial protection must be
shown. Injunction is not a remedy to protect or enforce contingent, abstract, or future rights. There must
exist an actual right.There must be a patent showing by the complaint that there exists a right to be
protected and that the acts against which the writ is to be directed are violative of said right.

The Court of Appeals did not err in reviewing proof adduced by petitioners to support its application for
the issuance of the writ. While the matter of the issuance of a writ of preliminary injunction is addressed to
the sound discretion of the trial court, this discretion must be exercised based upon the grounds and in
the manner provided by law.

In the present case, we find that there was scant justification for the issuance of the writ of
preliminary injunction.Petitioners anchor their legal right to Dockers and Design trademark on the
Certificate of Registration issued in their favor by the Bureau of Patents, Trademarks and Technology
Transfer.* According to Section 138 of Republic Act No. 8293, this Certificate of Registration is prima
facie evidence of the validity of the registration, the registrants ownership of the mark and of the exclusive
right to use the same in connection with the goods or services and those that are related thereto specified
in the certificate. Section 147.1 of said law likewise grants the owner of the registered mark the exclusive
right to prevent all third parties not having the owners consent from using in the course of trade identical
or similar signs for goods or services which are identical or similar to those in respect of which the
trademark is registered if such use results in a likelihood of confusion.

However, attention should be given to the fact that petitioners registered trademark consists of two
elements: (1) the word mark Dockers and (2) the wing-shaped design or logo. Notably, there is only one
registration for both features of the trademark giving the impression that the two should be considered as
a single unit. Clinton Apparelles trademark, on the other hand, uses the Paddocks word mark on top of a
logo which according to petitioners is a slavish imitation of the Dockers design. The two trademarks
apparently differ in their word marks (Dockers and Paddocks), but again according to petitioners, they
employ similar or identical logos. It could thus be said that respondent only appropriates petitioners logo
and not the word mark Dockers; it uses only a portion of the registered trademark and not the whole.
Given the single registration of the trademark Dockers and Design and considering that respondent only
uses the assailed device but a different word mark, the right to prevent the latter from using the
challenged Paddocks device is far from clear. Stated otherwise, it is not evident whether the single
registration of the trademark Dockers and Design confers on the owner the right to prevent the use of a
fraction thereof in the course of trade. It is also unclear whether the use without the owners consent of a
portion of a trademark registered in its entirety constitutes material or substantial invasion of the owners
right.

It is likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the dominant or
central feature of petitioners trademark the feature that prevails or is retained in the minds of the publican
imitation of which creates the likelihood of deceiving the public and constitutes trademark infringement. In
sum, there are vital matters which have yet and may only be established through a full-blown trial.

From the above discussion, we find that petitioners right to injunctive relief has not been clearly and
unmistakably demonstrated. The right has yet to be determined. Petitioners also failed to show proof that
there is material and substantial invasion of their right to warrant the issuance of an injunctive writ.
Neither were petitioners able to show any urgent and permanent necessity for the writ to prevent serious
damage.

Petitioners wish to impress upon the Court the urgent necessity for injunctive relief, urging that the
erosion or dilution of their trademark is protectable. They assert that a trademark owner does not have to
wait until the mark loses its distinctiveness to obtain injunctive relief, and that the mere use by an infringer
of a registered mark is already actionable even if he has not yet profited thereby or has damaged the
trademark owner.

Trademark dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or
services, regardless of the presence or absence of: (1) competition between the owner of the famous
mark and other parties; or (2) likelihood of confusion, mistake or deception. Subject to the principles of
equity, the owner of a famous mark is entitled to an injunction against another persons commercial use in
commerce of a mark or trade name, if such use begins after the mark has become famous and causes
dilution of the distinctive quality of the mark. This is intended to protect famous marks from subsequent
uses that blur distinctiveness of the mark or tarnish or disparage it.

Based on the foregoing, to be eligible for protection from dilution, there has to be a finding that: (1) the
trademark sought to be protected is famous and distinctive; (2) the use by respondent of Paddocks and
Design began after the petitioners mark became famous; and (3) such subsequent use defames
petitioners mark. In the case at bar, petitioners have yet to establish whether Dockers and Design has
acquired a strong degree of distinctiveness and whether the other two elements are present for their
cause to fall within the ambit of the invoked protection. The Trends MBL Survey Report which petitioners
presented in a bid to establish that there was confusing similarity between two marks is not sufficient
proof of any dilution that the trial court must enjoin.

The Court also finds that the trial courts order granting the writ did not adequately detail the reasons for
the grant. The trial court in granting the injunctive relief tersely ratiocinated that the plaintiffs appear to be
entitled to the relief prayed for and this Court is of the considered belief and humble view that, without
necessarily delving on the merits, the paramount interest of justice will be better served if the status quo
shall be maintained. Clearly, this statement falls short of the requirement laid down. In addition, we agree
with the Court of Appeals in its holding that the damages the petitioners had suffered or continue to suffer
may be compensated in terms of monetary consideration.

We also believe that the issued injunctive writ, if allowed, would dispose of the case on the merits as it
would effectively enjoin the use of the Paddocks device without proof that there is basis for such action.
The prevailing rule is that courts should avoid issuing a writ of preliminary injunction that would in effect
dispose of the main case without trial. There would be a prejudgment of the main case and a reversal of
the rule on the burden of proof since it would assume the proposition which petitioners are inceptively
bound to prove.

DISPOSITIVE: WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals dated
21 December 1998 and its Resolution dated 10 May 1999 are AFFIRMED. Costs against petitioners.