ETEPHA V. DIRECTOR OF PATENTS (G.R. NO.
L-20635)
Facts:
Respondent Westmont Pharmaceuticals, an American corporation, sought registration of trademark
‘Atussin’ placed on its medicinal preparation for the treatment of coughs. Petitioner Etepha, owner of the
trademark ‘Pertussin’ placed also on preparation for cough treatment, objected claiming that it will be
damaged since the 2 marks are confusingly similar. The Director of Patents gave due course to the
application.
Issue:
Whether or not petitioner’s trademark is registrable.
Ruling: YES.
That the word “tussin” figures as a component of both trademarks is nothing to wonder at. The Director of
Patents aptly observes that it is “the common practice in the drug and pharmaceutical industries to
‘fabricate’ marks by using syllables or words suggestive of the ailments for which they are intended and
adding thereto distinctive prefixes or suffixes”. And appropriately to be considered now is the fact that,
concededly, the “tussin” (in Pertussin and Atussin) was derived from the Latin root-word “tussis” meaning
cough.
“Tussin” is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the goods;
it is open for appropriation by anyone. It is accordingly barred from registration as trademark. With
jurisprudence holding the line, we feel safe in making the statement that any other conclusion would result
in “appellant having practically a monopoly” of the word “tussin” in a trademark. While “tussin” by itself
cannot thus be used exclusively to identify one’s goods, it may properly become the subject of a trademark
“by combination with another word or phrase”. And this union of words is reflected in
petitioner’s Pertussin and respondent’s Atussin, the first with prefix “Per” and the second with Prefix “A.”
FACTS:
On April 23, 1959, private respondent Westmont Pharmaceuticals, Inc. sought registration of
trademark “Atussin” This was objected to by petitioner Etepha, A.G. alleging that it will be detrimental on
their part as it is confusingly similar to its Pertussin. Both products deal with the treatment of cough.
ISSUE:
Whether or not Attusin may be registered as a trademark.
HELD:
Yes. x x x The validity of a cause for infringment is predicated upon colorable imitation. The phrase
“colorable imitaion” denotes such a “close or ingenious imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a
purchaser usually gives, and to cause him to purchase the one supposing it to be the other.”
While “tussin” by itself cannot thus be used exclusively to identify one’s goods, it may properly
become the subject of a trademark “by combination with another word or phrase.”
The two labels are entirely different in colors, contents, arrangement of words theeon, sizes, shapes
and general appearance. The contrasts in pictorial effects and appeals to the eye is so pronounced that the
label of one cannot be mistaken for that of the other, not even by persons unfamiliar with the two
trademarks.
We cannot escape notice of the fact that the two words do not sound alike – when pronounced.
Esso Standard v CA Digest
G.R. No. L-29971
Facts of the Case:
The petitioner Esso Standard is a foreign corporation duly licensed to do business in the philippines. it is
engaged in the sale of petroleum products which are identified by the trademarl 'Esso'. Esso is a successor of
Standard Vacuum Oil Co, it registered as a business name with the Bureau of Commerce in 1962. United
Cigarette is a domestic corporation engaged in the manufacture and sale of cigarettes. it acquired the
business from La Oriental Tobacco Corp including patent rights, once of which is the use of 'Esso' on its
cigarettes.
The petitioner filed a trademark infringement case alleging that it acquired goodwill to such an extent that
the buying public would be deceived as ti the quality and origin of the said products to the detriment and
disadvantage of its own products. The lower court found United Cigarette guilty of infringement. Upon
appeal, the Court of Appeals ruled that there was no infringment in this case.
Issue: Is there infringement committed?
Ruling: NONE. Infringement is defined by law as the use without the consent of the trademark owner of any
reproduction, counterfeit, copy or colorable imitation of any registered mark or tradename which would
likely cause confusion or mistake or deceive purchasers or others as to the source or origin of such goods.
The products of both parties (Petroleum and cigarettes) are non-competing. But as to whether trademark
infringement exists depend on whether or not the goods are so related that the public may be or is actually
deceived and misled that they come from the same maker. Under the Related Goods Theory, goods are
related when they belong to the same class or have the same descriptive properties or when they have same
physical attributes. In these case, the goods are absolutely different and are so foreign from each other it
would be unlikely for purchasers to think that they came from the same source. Moreover, the goods flow
from different channels of trade and are evidently different in kind and nature.
ESSO STANDARD EASTERN, INC. VS THE HONORABLE COURT OF APPEALS AND UNITED
CIGARETTE CORPORATION
G.R. NO. L-29971 ; AUGUST 31, 1982
Tradenames and Trademarks; Words and Phrases; “Infringement” of trademark, defined.—The law
defines infringement as the use without consent of the trademark owner of 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; or reproduce, counterfeit, copy or colorably imitate any such mark or
tradename and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such
goods, business or services.” Implicit in this definition is the concept that the goods must be so related that
there is a likelihood either of confusion of goods or business. But likelihood of confusion is a relative
concept; to be determined only according to the particular, and sometimes peculiar, circumstances of each
case. It is unquestionably true that, as stated in Coburn vs. Puritan Mills, Inc.: “In trademark cases, even
more than in other litigation, precedent must be studied in the light of the facts of the particular case.”
Same; Same, Infringement of trademark depends on whether the goods of the two contending parties
using the same trademark, such as “ESSO,” are so related as to lead the public to be deceived.—It is
undisputed that the goods on which petitioner uses the trademark ESSO, petroleum products, and the
product of respondent, cigarettes, are non-competing. But as to whether trademark infringement exists
depends for the most part upon whether or not the goods are so related that the public may be, or is actually,
deceived and misled that they came from the same maker or manufacturer. For non-competing goods may
be those which, though they are not in actual competition, are so related to each other that it might
reasonably be assumed that they originate from one manufacturer. Non-competing goods may also be those
which, being entirely unrelated, could not reasonably be assumed to have a common source. In the former
case of related goods, confusion of business could arise out of the use of similar marks; in the latter case of
non-related goods, it could not. The vast majority of courts today follow the modern theory or concept of
“related goods” which the Court has likewise adopted and uniformly recognized and applied.
Same; Same; “Related goods” defined.—Goods are related when they belong to the same class or have
the same descriptive properties; when they possess the same physical attributes or essential characteristics
with reference to their form composition, texture or quality. They may also be related because they serve the
same purpose or are sold in grocery stores. Thus, biscuits were held related to milk because they are both
food products. Soap and perfume, lipstick and nail polish are similarly related because they are common
household items nowadays. The trademark “Ang Tibay” for shoes and slippers was disallowed to be used
for shirts and pants because they belong to the same general class of goods. Soap and pomade, although
non-competitive, were held to be similar or to belong to the same class, since both are toilet articles. But no
confusion or deception can possibly result or arise when the name “Wellington” which is the trademark for
shirts, pants, drawers and other articles of wear for men. women and children is used as a name of a
department store.
Same; The trademark ESSO which the petitioner uses for its various petroleum products may also be
used as a trademark by a manufacturer of cigarettes, the two products not being related and the
public cannot be deceived as to which product they are buying.—Petitioner uses the trademark ESSO
and holds certificate of registration of the trademark for petroleum products, including aviation gasoline,
grease, cigarette lighter fluid and other various products such as plastics, chemicals, synthetics, gasoline
solvents, kerosene, automotive and industrial fuel, bunker fuel, lubricating oil, fertilizers, gas, alcohol,
insecticides and the “ESSO Gasul” burner, while respondent’s business is solely for the manufacture and
sale of the unrelated product of cigarettes. The public knows too well that petitioner deals solely with
petroleum products that there is no possibility that cigarettes with ESSO brand will be associated with
whatever good name petitioner’s ESSO trademark may have generated. Although petitioner’s products are
numerous, they are of the same class or line of merchandise which are non-competing with respondent’s
product of cigarettes, which as pointed out in the appealed judgment is beyond petitioner’s “zone of
potential or natural and logical expansion.” When a trademark is used by a party for a product in which the
other party does not deal, the use of the same trademark on the latter’s product cannot be validly objected to.
Same; The trademark ESSO which petitioner uses for its various petroleum products can be used by
another as trademark for cigarettes as the two classes of products flow through different trade
channels.—Another factor that shows that the goods involved are non-competitive and non-related is the
appellate court’s finding that they flow through different channels of trade, thus: “The products of each
party move along and are disposed through different channels of distribution. The (petitioner’s) products are
distributed principally through gasoline service and lubrication stations, automotive shops and hardware
stores. On the other hand, the (respondent’s) cigarettes are sold in sari-sari stores, grocery stores, and other
small distributor outlets. (Respondent’s) cigarettes are even peddled in the streets while (petitioner’s) ‘gasul’
burners are not. Finally, there is a marked distinction between oil and tobacco, as well as between petroleum
and cigarettes. Evidently, in kind and nature the products of (respondent) and of (petitioner) are poles apart.”
Same; Same.—Respondent court correctly ruled that considering the general appearances of each mark as a
whole, the possibility of any confusion is unlikely. A comparison of the labels of the samples of the goods
submitted by the parties shows a great many differences on the trademarks used. As pointed out by
respondent court in its appealed decision, “(A) witness for the plaintiff, Mr. Buhay, admitted that the color
of the ‘ESSO’ used by the plaintiff for the oval design where the blue word ESSO is contained is the distinct
and unique kind of blue. In his answer to the trial court’s question, Mr. Buhay informed the court that the
plaintiff never used its trademark on any product where the combination of colors is similar to the label of
the Esso cigarettes,” and “Another witness for the plaintiff, Mr. Tengco, testified that generally, the
plaintiff’s trademark conies all in either red, white, blue or any combination of the three colors. It is to be
pointed out that not even a shade of these colors appears on the trademark of the appellant’s cigarette. The
only color that the appellant uses in its trademark is green,”
Facts:
Petitioner Esso Standard Eastern, Inc., then a foreign corporation duly licensed to do business in
the Philippines, is engaged in the sale of petroleum products which are identified with its trademark ESSO
(which as successor of the defunct Standard Vacuum Oil Co. it registered as a business name with the
Bureaus of Commerce and Internal Revenue in April and May, 1962).
Private respondent in turn is a domestic corporation then engaged in the manufacture and sale of
cigarettes, after it acquired in November, 1963 the business, factory and patent rights of its predecessor La
Oriental Tobacco Corporation, one of the rights thus acquired having been the use of the trademark ESSO
on its cigarettes, for which a permit had been duly granted by the Bureau of Internal Revenue.
Barely had respondent as such successor started manufacturing cigarettes with the trademark
ESSO, when petitioner commenced a case for trademark infringement in the Court of First Instance of
Manila. The complaint alleged that the petitioner had been for many years engaged in the sale of petroleum
products and its trademark ESSO had acquired a considerable goodwill to such an extent that the buying
public had always taken the trademark ESSO as equivalent to high quality petroleum products. Petitioner
asserted that the continued use by private respondent of the same trademark ESSO on its cigarettes was
being carried out for the purpose of deceiving the public as to its quality and origin to the detriment and
disadvantage of its own products.
Issue:
WON there is likelihood of confusion of business in the present case.
Held:
None. In the situation before us, the goods are obviously different from each other—with
“absolutely no iota of similitude” as stressed in respondent court’s judgment. They are so foreign to each
other as to make it unlikely that purchasers would think that petitioner is the manufacturer of respondent’s
goods. The mere fact that one person has adopted and used a trademark on his goods does not prevent the
adoption and use of the same trademark by others on unrelated articles of a different kind.
Petitioner uses the trademark ESSO and holds certificate of registration of the trademark for
petroleum products, including aviation gasoline, grease, cigarette lighter fluid and other various products
such as plastics, chemicals, synthetics, gasoline solvents, kerosene, automotive and industrial fuel, bunker
fuel, lubricating oil, fertilizers, gas, alcohol, insecticides and the “ESSO Gasul” burner, while respondent’s
business is solely for the manufacture and sale of the unrelated product of cigarettes. The public knows too
well that petitioner deals solely with petroleum products that there is no possibility that cigarettes with
ESSO brand will be associated with whatever good name petitioner’s ESSO trademark may have generated.
Although petitioner’s products are numerous, they are of the same class or line of merchandise which are
non-competing with respondent’s product of cigarettes, which as pointed out in the appealed judgment is
beyond petitioner’s “zone of potential or natural and logical expansion.” When a trademark is used by a
party for a product in which the other party does not deal, the use of the same trademark on the latter’s
product cannot be validly objected to.2 Another factor that shows that the goods involved are non-
competitive and non-related is the appellate court’s finding that they flow through different channels of
trade.
FRUIT OF THE LOOM V. CA
133 SCRA 405
FACTS:
1. Petitioner is a corporation duly organized and existing under the laws of the State of Rhode Island, USA.
It is the registrant of the trademark FRUIT OF THE LOOM in the Philippine Patent Office and was issued
two Certificates of Registration, one of which was in 1957 and the other in 1958.
2. Private Respondent, a domestic corporation, is the registrant of the trademark FRUIT FOR EVE in the
Philippine Patent Office.
3. Both are involved in the merchandise of garments.
4. Petitioner filed a complaint for infringement of trademark and unfair competition against private
respondent, alleging that:
a. The latter’s trademark is confusingly similar to the former’s, both trademarks being used in women’s
panties and other textile products.
b. That the hang tags used by private respondent is a colorable imitation of those of the petitioner.
5. Private respondent alleged that there was no confusing similarity between the trademarks.
6. At the pre-trial, the following admissions were made:
a. That the registered trademark Fruit for Eve bears the notice “Reg. Phil. Pat. Off.” while that of Fruit of the
Loom does not.
b. That at the time of its registration, the plaintiff filed no opposition thereto.
7. The lower court rendered a decision in favor of the petitioner, permanently enjoining private respondent
from using the trademark Fruit for Eve.
8. Both parties appealed to the former Court of Appeals:
a. Petitioner questioned the lower court’s failure to award damages in its favor.
b. Private respondent sought the reversal of the lower court’s decision.
9. The former Court of Appeals rendered a decision reversing the lower court’s decision and dismissing the
petitioner’s complaint. The petitioner’s motion for reconsideration was denied.
HELD:
In cases involving infringement of trademark brought before this Court, it has been consistently held that
there is infringement of trademark when the use of the mark involved would be likely to cause confusion or
mistake in the mind of the public or to deceive purchasers as to the origin or source of the commodity. The
discerning eye of the observer must focus not only on the predominant words but also on the other features
appearing in both labels in order that he may draw his conclusion where one is confusingly similar to the
other. The similarities of the competing trademarks in this case are completely lost in the substantial
differences in the design and general appearance of their respective hang tags. We have examined the two
trademarks as they appear in the hang tags submitted by the parties and We are impressed more by the
dissimilarities than by the similarities appearing therein. 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. The ordinary
purchaser must be thought of as having, and credited with, at least a modicum of intelligence to be able to
see the obvious differences between the two trademarks in question.
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 respondent’s 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 respondent’s 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 petitioner’s 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. Petitioner’s
trademark is written in almost semi-circle while that of private respondent is written in straight line in bigger
letters than petitioner’s. Private respondent’s 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.
DEL MONTE CORPORATION V. CA (G.R. NO. L-78325)
Facts:
Petitioner Del Monte, an American corporation, granted Philpack the right to manufacture, distribute and
sell in the Philippines its Del Monte catsup. Petitioner’s trademark and logo ‘Del Monte’ and its catsup
bottle were subsequently registered in the Philippines. Meanwhile respondent Sunshine Sauce, a company
also engaged in the manufacturing and sale of various kinds of sauces, registered its logo ‘Sunshine Fruit
Catsup.’ Philpack received reports that respondent was buying and recycling used Del Monte’s bottle in
junk shops to serve as container for its own catsup. Thus, petitioner and Philpack filed a complaint for
trademark infringement and unfair competition which the trial court dismissed. CA affirmed holding there
were substantial differences between the 2 marks.
Issue:
Whether or not there is confusing similarity between the two trademarks.
Ruling: YES.
At that, even if the labels were analyzed together it is not difficult to see that the Sunshine label is a
colorable imitation of the Del Monte trademark. The predominant colors used in the Del Monte label are
green and red-orange, the same with Sunshine. The word “catsup” in both bottles is printed in white and the
style of the print/letter is the same. Although the logo of Sunshine is not a tomato, the figure nevertheless
approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not normally copy out but only makes
colorable changes, employing enough points of similarity to confuse the public with enough points of
differences to confuse the courts. What is undeniable is the fact that when a manufacturer prepares to
package his product, he has before him a boundless choice of words, phrases, colors and symbols sufficient
to distinguish his product from the others. When as in this case, Sunshine chose, without a reasonable
explanation, to use the same colors and letters as those used by Del Monte though the field of its selection
was so broad, the inevitable conclusion is that it was done deliberately to deceive.
DEL MONTE CORPORATION V. CA
181 SCRA 410
FACTS:
Petitioner filed a case for trademark infringement and unfair competition against Sunshine Sauce. The latter
for a time used the bottles of Del Monte in packaging their own catsup sauce. It also used bottles which
were similar to those of petitioner.
HELD:
There is a distinction between infringment of trademark and unfair competition:
1. Infringement is the unauthorized use of a trademark while unfair competition is the passing off of one’s
goods as that of another
2. In infringement, fraudulent intent is unnecessary while it is otherwise for unfair competition
3. In infringement, prior registration of the trademark is needed whereas in unfair competition, registration is
not necessary.
In assessing the two trademarks, side-by-side comparison is not the final test of similarity because average
buyers don’t make minute scrutiny of
label details.
Also, in testing if there has been prior registration, registration in the supplemental register isn’t what the
law contemplates.

ASIA BREWERY VS. COURT OF APPEALS AND SAN MIGUEL CORP.- Unfair Competition
Nobody can acquire any exclusive right to market articles supplying the simple human needs in containers
or wrappers of the general form, size and character commonly and immediately used in marketing such
articles.
FACTS:
San Miguel Corp. (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark
and unfair competition. RTC dismissed the complaint finding that ABI has not committed trademark
infringement or unfair competition. The CA reversed the decision finding that ABI is guilty of trademark
infringement and unfair competition thus the case at bar.
ISSUE: Whether or not ABI infringes SMC’s trademark and as such constitutes unfair competition
HELD: NO
Infringement is determined by a test of dominancy. If the competing trademark contains the main or
essential or dominant features of another and confusion and deception is likely to result, infringement takes
place. A closer look at the trademark of both companies will show that the dominant features of each
absolutely bear no similarity to each other. SMC’s dominant trademark is the name of the product, “San
Miguel Pale Pilsen” written in white Gothic letters with elaborate serifs at the beginning and end of the
letters “S” and “M” on an amber background while ABI’s is the name “Beer Pale Pilsen” with the word
Beer written in large amber letters, larger than any of the letter found in SMC label.
The word “pale pilsen” on ABI’s trademark does not constitute trademark infringement for it is a generic
word descriptive of the color of a type of beer. No one may appropriate generic or descriptive words for they
belong to the public domain.
ABI is likewise not guilty of unfair competition for unfair competition is the employment of deception or
any other means contrary to good faith by which a person shall pass off the goods manufactured by him for
those of another who has already established goodwill for his similar goods. The universal test for this is
whether the public is likely to be deceived. Actual or probable deception and confusion on the part of the
customers by reason of defendant’s practices must appear. However, this is unlikely to happen in the case at
bar for consumers generally order beer by brand. Also, the fact that ABI also uses amber-colored steinie
bottles cannot constitute unfair competition for ABI did not copy SMC’s bottle. SMC did not invent but
merely borrowed the steinie bottle from abroad. Likewise, amber is the most effective color in preventing
transmission of light thus providing maximum protection to beer. 320 ml is likewise the standard prescribed
under Metrication Circular No. 778. The fact that it is the first to use the steinie bottle does not give SMC a
vested right to use it to the exclusion of everyone else. Nobody can acquire any exclusive right to market
articles supplying the simple human needs in containers or wrappers of the general form, size and character
commonly and immediately used in marketing such articles.
There is no confusing similarity between the competing beers therefore ABI neither infringed SMC’s
trademark nor did it commit unfair competition.
Dissenting Opinion of J. Cruz:
Side-by-side comparison is not the final test of similarity because average buyers do not make minute
scrutiny of label details. The average shopper is usually in a hurry and does not inspect every product on the
shelf is if he were browsing in a library.
ASIA BREWERY, INC. vs. THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION
G.R. 103543 July 5, 1993
Facts:
San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of
trademark and unfair competition on account of the latter's BEER PALE PILSEN or BEER NA BEER
product which has been competing with SMC's SAN MIGUEL PALE PILSEN for a share of the local beer
market.
The trial court dismissed SMC's complaint because ABI "has not committed trademark infringement or
unfair competition against" SMC
On appeal by SMC, the Court of Appeals reversed the decision rendered by the trial court, finding the
defendant Asia Brewery Incorporated GUILTY of infringement of trademark and unfair competition. ABI
then filed a petition for certiorari.
Issue:
Are the words PALE PILSEN as part of ABI’s trademark constitute infringement of SMC’s trademark?
Ruling:
No. The Supreme Court said it does not constitute an infringement as the words PALE PILSEN, which are
part of ABI’s trademark, are generic words descriptive of the color (“pale“), of a type of beer (“pilsen”),
which is a light bohemian beer with a strong hops flavor that originated in the City of Pilsen, Czechislovakia
and became famous in the Middle Ages.
The Supreme Court further said that the words "pale pilsen" may not be appropriated by SMC for its
exclusive use even if they are part of its registered trademark. No one may appropriate generic or descriptive
words. They belong to the public domain.
Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with the latter's
SAN MIGUEL PALE PILSEN product.
Conrad and Company, Inc. v. CA, et.al., G.R. No. 115115, July 18, 1995
Crim Pro - Jurisdiction
Facts:
The respondents Fitrite, Inc. and its sister company, Victoria Biscuit Co., Inc. are domestic
corporations engaged in the business of manufacturing, selling and distributing biscuits and cookies. Their
products bear the trademark "SUNSHINE" in the Philippines which was awarded by the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) listing Fitrite as principal registrant.
Since May 20, 1983 when Fitrite was issued the Certificate of Registration for its trademark to the
filing of its complaint against Conrad Company Inc., Fitrite and Victoria Biscuit have been manufacturing,
selling and distributing on a massive scale biscuits and cookies bearing the "Sunshine" trademark making it
popular in Metro Manila and in the provinces.
On May 30, 1990, Conrad's own Import Manager and Executive Assistant, Raul Olaya, executed an
affidavit stating that Conrad had also been importing, selling and distributing biscuits and cookies, and other
items bearing the same trademark as Fitrite and Victoria's. It was traced by the mentioned domestic
corporations that on April 18, 1988, Conrad was designated as an exclusive importer and dealer of the
products of "Sunshine Biscuits, Inc." for sale in the Philippine market.
A few days later, Conrad started its first importation and continuously did so. Through their
counsel, Fitrite and Victoria addressed a letter to Conrad demanding that it cease and desist from continuing
its operation and use of the subject trademark, but was ignored. This led Fitrite and Victoria to file a
complaint against Conrad for infringement and unfair competition. Conrad sought to dismiss the complaint
by invoking litis pendentia, the doctrine of primary jurisdiction, and failure to state a cause of action.
Conrad argued that it has been granted distributorship by Sunshine Biscuits USA over the Philippine
territory, and so, it follows that the basis of Fitrite and Victoria's claim is lodged under the exclusive
jurisdiction of the BPTTT. The trial court found merit on the motion to dismiss the complaint.
Fitrite and Victoria filed a motion for reconsideration, but was denied by the lower court. The Court
of Appeals, however, found merit on their claims and reinstated the complaint. Hence, this petition by
Conrad praying that the Civil Case for "Injunction with Damages with Prayer for Preliminary Injunction"
based on infringement and unfair competition filed by Fitrite and Victoria be dismissed.
Issue: Whether or not Fitrite and Victoria’s civil action against Conrad which was based on infringement
and unfair competition be dismissed because of the doctrine of litis pendentia.
Held: No, the petition is without merit.
An application for administrative cancellation of a registered trademark on any of the grounds enumerated
in Section 17 of R.A. No. 166 or the Trade-Mark Law, as amended, falls under the exclusive jurisdiction of
BPTTT. But, for infringement or unfair competition, as well as the remedy of injunction and relief for
damages, it is explicitly and unquestionably within the competence and jurisdiction of ordinary courts. As
held in an earlier decision by the Supreme Court, that the registration in the Principal Register gives rise to a
presumption of validity of the registration and of the registrant's ownership and right to the exclusive use of
the mark. Such registration can serve as the basis for an action of infringement which entitles the registrant
whose right was invaded for court protection and relief.
Section 23 and Section 27 of Chapter V, of the Trade-Mark Law provides:
Sec. 23. Actions, and damages and injunction for infringement. — Any person entitled to the exclusive use
of a registered mark or trade-name may recover damages in a civil action from any person who infringes his
rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining
party would have made, had the defendant not infringe his said rights, or the profit which the defendant
actually made out of the infringement, or in the event such measure of damages cannot be readily
ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based
upon the amount of gross sales of the defendant or the value of the services in connection with which the
mark or trade-name was used in the infringement of the rights of the complaining party. In cases where
actual intent to mislead the public or to defraud the complaining party shall be shown, in the discretion of
the court, the damages may be doubled.
The complaining party, upon proper showing, may also be granted injunction.
Conrad v. CA (Short title)
G.R. No. 115115 | 246 SCRA 691 | July 18, 1995
Petitioner: CONRAD AND COMPANY, INC.
Respondents: CA, FITRITE INC., and VICTORIA BISCUITS CO., INC.
FACTS
1. FITRITE, INC. and VICTORIA BISCUIT CO., INC., both domestic corporations, are engaged in
manufacturing, selling and distributing biscuits and cookies bearing the trademark "SUNSHINE" in
the Philippines.
2. CONRAD AND COMPANY is also engaged in importing, selling and distributing biscuits and
cookies in the Philippines.
3. In April 1982, FITRITE filed in the Bureau of Patents, Trademarks and Technology Transfer
(BPTTT) applications for registration of the trademark "SUNSHINE," both in the Supplemental
and Principal Registers, to be used on biscuits and cookies. Since March 31, 1981 FITRITE had
exclusively used this trademark in the concept of owner on its biscuits and cookies.
o On May 20, 1983, Supplemental Register was Approved
o On March 22, 1990, Principal Register was Approved
4. On May 20, 1990, FITRITE discovered that CONRAD had been importing, selling and distributing
biscuits bearing its trademark in Philippines. Being acts of infringement and unfair competition,
FITRITE filed an action for injunction with damages.
5. CONRAD filed a motion to dismiss on the grounds of the doctrine of primary jurisdiction and
failure to state the cause of action.
6. Trial Court granted the motion to dismiss. Held that CONRAD having been granted
distributorship by Sunshine Biscuits USA over Philippine territory it follows that the resolution of
the issue with respect to the ownership of Sunshine Biscuits which is the basis of FITRITE’s claim
is lodged under the exclusive jurisdiction of the BPTTT.
7. Court of Appeals reversed the decision of the Trial Court. It held that No evidence had been
introduced to show that “SUNHINE” trademark has been registered in the USA. Hence, unless and
until FITRITE’s certificate as registrant of the said trademark cancelled by BPTTT, the trademark
belongs to FITRITE.
8. CA also ordered the trial court to proceed with the case for "injunction with damages" filed by
FITRITE notwithstanding the pendency of an administrative case for the cancellation.
Hence, this petition.
ISSUE/S
1. W/N the Trial Court may proceed with the infringement case despite the pendency of Administrative
case for cancellation.
RULING & RATIO
1. YES.
2. While an application for the administrative cancellation of a registered trademark on any of the
grounds enumerated in Sec. 176 of RA 166, falls under the exclusive cognizance of BPTTT,
HOWEVER, action for infringement or unfair competition, as well as the remedy of
injunction and relief for damages, is explicitly and unquestionably within the competence and
jurisdiction of ordinary courts.
3. FITRITE are the holder of the Principal Register for the questioned trademark. Registration in the
Principal Register gives rise to a presumption of validity of the registration and of the registrant's
ownership and right to the exclusive use of the mark. It is precisely such a registration that can
serve as the basis for an action for infringement.
4. An application with BPTTT for an administrative cancellation of a registered trade mark
cannot per se have the effect of restraining or preventing the courts from the exercise of their
lawfully conferred jurisdiction.
DISPOSITION
WHEREFORE, the petition for review is DENIED for lack of merit, and the questioned amended decision
of the Court of Appeals is AFFIRMED. Costs against petitioner.

EMERALD GARMENT MANUFACTURING CORPORATION vs. HON. COURT OF APPEALS,
BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER and H.D. LEE
COMPANY, INC.
G.R. No. 100098, December 29, 1995
FACTS:
On 18 September 1981, private respondent H.D. Lee Co., Inc. filed with the Bureau of Patents,
Trademarks & Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR 5054 for
the trademark "STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks, briefs, jackets, jogging suits,
dresses, shorts, shirts and lingerie under Class 25, issued on 27 October 1980 in the name of petitioner
Emerald Garment Manufacturing Corporation.
Private respondent averred that petitioner's trademark "so closely resembled its own trademark,
'LEE' as previously registered and used in the Philippines cause confusion, mistake and deception on the
part of the purchasing public as to the origin of the goods.
On 19 July 1988, the Director of Patents rendered a decision granting private respondent's petition for
cancellation and opposition to registration. The Director of Patents, using the test of dominancy, declared
that petitioner's trademark was confusingly similar to private respondent's mark because "it is the word 'Lee'
which draws the attention of the buyer and leads him to conclude that the goods originated from the same
manufacturer. It is undeniably the dominant feature of the mark.
ISSUE:
Whether or not a trademark causes confusion and is likely to deceive the public is a question of fact
which is to be resolved by applying the "test of dominancy", meaning, if the competing trademark contains
the main or essential or dominant features of another by reason of which confusion and deception are likely
to result.
HELD:
The word "LEE" is the most prominent and distinctive feature of the appellant's trademark and all of
the appellee's "LEE" trademarks. It is the mark which draws the attention of the buyer and leads him to
conclude that the goods originated from the same manufacturer. The alleged difference is too insubstantial
to be noticeable. The likelihood of confusion is further made more probable by the fact that both parties are
engaged in the same line of business.
Although the Court decided in favor of the respondent, the appellee has sufficiently established its
right to prior use and registration of the trademark "LEE" in the Philippines and is thus entitled to protection
from any infringement upon the same. The dissenting opinion of Justice Padilla is more acceptable.
Emerald Garment Manufacturing Corporation vs Court of Appeals
251 SCRA 600 – Mercantile Law – Intellectual Property Law – Law on Trademarks, Service Marks and
Trade Names – Trademark Infringement
In 1981, H.D Lee Co., Inc., a foreign company, filed an opposition against the trademark application of
Emerald Garment. Allegedly, the trademark “Stylistic Mr. Lee” sought to be applied for by Emerald
Garment is too confusingly similar with the brand “Lee” which has for its variations “Lee Riders”, “Lee
Sures”, and “Lee Leens”. The Director of Patents as well as the Court of Appeals ruled in favor of H.D. Lee
Co.
ISSUE: Whether or not the decision of the Court of Appeals is correct.
HELD: No. The Supreme Court considered that the trademarks involved as a whole and ruled that Emerald
Garment’s “STYLISTIC MR. LEE” is not confusingly similar to H.D. Lee’s “LEE” trademark. The
trademark “Stylistic Mr. Lee”, although on its label the word “LEE” is prominent, the trademark should be
considered as a whole and not piecemeal. The dissimilarities between the two marks become conspicuous,
noticeable and substantial enough to matter especially in the light of the following variables that must be
factored in.
First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not your
ordinary household items like catsup, soysauce or soap which are of minimal cost. Maong pants or jeans are
not inexpensive. Accordingly, the casual buyer is predisposed to be more cautious and discriminating in and
would prefer to mull over his purchase. Confusion and deception, then, is less likely.
Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does not ask the
sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even an Armani. He is, therefore, more
or less knowledgeable and familiar with his preference and will not easily be distracted.
Finally, in line with the foregoing discussions, more credit should be given to the “ordinary purchaser.” Cast
in this particular controversy, the ordinary purchaser is not the “completely unwary consumer” but is the
“ordinarily intelligent buyer” considering the type of product involved.
There is no cause for the Court of Appeal’s apprehension that Emerald Garment’s products might be
mistaken as “another variation or line of garments under H.D. Lee’s ‘LEE’ trademark”. As one would
readily observe, H.D. Lee’s variation follows a standard format “LEERIDERS,” “LEESURES” and
“LEELEENS.” It is, therefore, improbable that the public would immediately and naturally conclude that
petitioner’s “STYLISTIC MR. LEE” is but another variation under H.D. Lee’s “LEE” mark.
The issue of confusing similarity between trademarks is resolved by considering the distinct characteristics
of each case. In the present controversy, taking into account these unique factors, we conclude that the
similarities in the trademarks in question are not sufficient as to likely cause deception and confusion
tantamount to infringement.
Further, H.D. Lee failed to prove in court that it had prior actual commercial use of its “LEE” trademark in
the Philippines. H.D. Lee did show certificates of registrations for its brand but registration is not sufficient.
Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of ownership over a
trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No. 166).
A rule widely accepted and firmly entrenched because it has come down through the years is that actual use
in commerce or business is a prerequisite in the acquisition of the right of ownership over a trademark.
It would seem quite clear that adoption alone of a trademark would not give exclusive right thereto. Such
right “grows out of their actual use.” Adoption is not use. One may make advertisements, issue circulars,
give out price lists on certain goods; but these alone would not give exclusive right of use. For trademark is
a creation of use. The underlying reason for all these is that purchasers have come to understand the mark as
indicating the origin of the wares. Flowing from this is the trader’s right to protection in the trade he has
built up and the goodwill he has accumulated from use of the trademark. Registration of a trademark, of
course, has value: it is an administrative act declaratory of a pre-existing right. Registration does not,
however, perfect a trademark right.

Amigo Manufacturing, Inc. vs. Cluett Peabody Co., Inc. G.R. No. 139300. March 14, 2001
Facts: The source of the controversy that precipitated the filing by Cluett Peabody Co., Inc. (a New York
corporation) of the present case against Amigo Manufacturing Inc. (a Philippine corporation) for
cancellation of trademark is Cluett‟s claim of exclusive ownership (as successor in interest of Great
American Knitting Mills, Inc.) of the following trademark and devices, as used on men‟s socks: GOLD
TOE, under Certificate of Registration No. 6797 dated September 22, 1958; DEVICE, representation of a
sock and magnifying glass on the toe of a sock, under Certificate of Registration No. 13465 dated January
25, 1968; DEVICE, consisting of a‟plurality of gold colored lines arranged in parallel relation within a
triangular area of toe of the stocking and spread from each other by lines of contrasting color of the major
part of the stocking‟ under Certificate of Registration No. 13887 dated May 9, 1968; and LINENIZED,
under Certificate of Registration No. 15440 dated April 13, 1970. On the other hand, petitioner‟s trademark
and device „GOLD TOP, Linenized for Extra Wear‟ has the dominant color „white‟ at the center and a
„blackish brown‟ background with a magnified design of the sock‟s garter, and is labeled „Amigo
Manufacturing Inc., Mandaluyong, Metro Manila, Made in the Philippines. The Patent office ruled in favor
of Cluett because of idem sonans and the existence of a confusing similarity in appearance between two
trademarks. The Court of Appeals upheld the ruling of the patent office by stating the ff: There is hardly any
variance in the appearance of the marks „GOLD TOP‟ and „GOLD TOE‟ since both show a representation
of a man‟s foot wearing a sock, and the marks are printed in identical lettering and that it can not be allowed
to be registered because it runs counter to the Section 4 of Republic Act 166. Amigo‟s mark is only
registered with the Supplemental Registry which gives no right of exclusivity to the owner and cannot
overturn the presumption of validity and exclusivity given to a registered mark. the Philippines and the
United States are parties to the Paris Convention. The object of the Convention is to accord a national of a
member nation extensive protection against infringement and other types of unfair competition.
Issue: 1. Who among the parties had first actual use over the trademark? 2. Are confusing similarities on the
trademark and device of the parties? 3. Does the Paris Convention apply in the given case?
Ruling: The petition of Amigo has no merit.
1st Issue: The respondent were able to present with the Bureau registrations indicating the dates of first use
in the Philippines of the trademark and the devices as follows: a) March 16, 1954, Gold Toe; b) February 1,
1952, the Representation of a Sock and a Magnifying Glass; c) January 30, 1932, the Gold Toe
Representation; and d) February 28, 1952, “Linenized.” The registration of these marks in favor of
respondent constitutes prima facie evidence, which petitioner failed to overturn satisfactorily, of
respondent‟s ownership of those marks, the dates of appropriation and the validity of other pertinent facts
stated therein which is specifically mandated by Section 20 of Republic Act 166. Furthermore, petitioner
registered its trademark only with the supplemental register. It is already settled that registration with the
supplemental register gives no presumption of ownership of the trademark.
2nd Issue - The Bureau of Patents, did not rely on the idem sonans test alone in arriving at its conclusion.
The Bureau considered the drawings and the labels, the appearance of the labels, the lettering, and the
representation of a man‟s foot wearing a sock. Obviously, its conclusion is based on the totality of the
similarities between the parties‟ trademarks and not on their sounds alone. As its title implies, the test of
dominancy focuses on the similarity of the prevalent features of the competing trademarks which might
cause confusion or deception and thus constitutes infringement. If the competing trademark contains the
main or essential or dominant features of another, and confusion and deception is likely to result,
infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the infringing
label should suggest an effort to imitate. The question at issue in cases of infringement of trademarks is
whether the use of the marks involved would be likely to cause confusion or mistakes in the mind of the
public or deceive purchasers. The holistic test mandates that the entirety of the marks in question must be
considered in determining confusing similarity. In the present case, a resort to either the Dominancy Test or
the Holistic Test shows that colorable imitation exists between respondent‟s “Gold Toe” and petitioner‟s
“Gold Top.” Both tests apply. An examination of the products would show the following similarities:
Dominant features are gold checkered lines against a predominantly black background Both has a
representation of a sock with a magnifying glass. both products usethe same type of lettering. Both also
include a representation of a man‟s foot wearing a sock and the word “linenized” with arrows printed on the
label. The names of the brands are similar “Gold Top” and “Gold Toe.” that petitioner and respondent are
engaged in the same line of business.
3rd Issue - Cluett registered its trademarks under the principal register, which means that the requirement of
prior use had already been fulfilled. Section 5-A of Republic Act 166 requires the date of first use to be
specified in the application for registration. Since the trademark was successfully registered, there exists a
prima facie presumption of the correctness of the contents thereof, including the date of first use. Petitioner
has failed to rebut this presumption. A foreign based trademark owner, whose country of domicile is a party
to an international convention relating to protection of trademarks, is accorded protection against
infringement or any unfair competition as provided in Section 37 of Republic Act 166, the Trademark Law
which was the law in force at the time this case was instituted.
SOCIETE DES PRODUITS NESTLE V. CA (G.R. NO. 112012)
Facts:
Respondent CFC Corporation filed an application for the registration of the trademark FLAVOR MASTER
for instant coffee. Petitioners, a Swiss company and a domestic corporation licensee of Societe, opposed on
the ground that it is confusingly similar to its trademark for coffee and coffee extracts: MASTER ROAST
and MASTER BLEND. Petitioners contend that the dominant word MASTER is present in the 3
trademarks. Respondent CFC argued that the word MASTER cannot be exclusively appropriated being a
descriptive or generic term. BPTTT denied CFC’s application. CA held otherwise.
Issue:
Whether or not the word MASTER is descriptive or generic term incapable of exclusive appropriation.
Ruling: NO.
The word “MASTER” is neither a generic nor a descriptive term. As such, said term cannot be invalidated
as a trademark and, therefore, may be legally protected. Generic terms are those which constitute “the
common descriptive name of an article or substance,” or comprise the “genus of which the particular
product is a species,” or are “commonly used as the name or description of a kind of goods,” or “imply
reference to every member of a genus and the exclusion of individuating characters,” or “refer to the basic
nature of the wares or services provided rather than to the more idiosyncratic characteristics of a particular
product,” and are not legally protectable. On the other hand, a term is descriptive and therefore invalid as a
trademark if, as understood in its normal and natural sense, it “forthwith conveys the characteristics,
functions, qualities or ingredients of a product to one who has never seen it and does not know what it is,” or
“if it forthwith conveys an immediate idea of the ingredients, qualities or characteristics of the goods,” or if
it clearly denotes what goods or services are provided in such a way that the consumer does not have to
exercise powers of perception or imagination.
Rather, the term “MASTER” is a suggestive term brought about by the advertising scheme of Nestle.
Suggestive terms are those which, in the phraseology of one court, require “imagination, thought and
perception to reach a conclusion as to the nature of the goods.” Such terms, “which subtly connote
something about the product,” are eligible for protection in the absence of secondary meaning. While
suggestive marks are capable of shedding “some light” upon certain characteristics of the goods or services
in dispute, they nevertheless involve “an element of incongruity,” “figurativeness,” or ” imaginative effort
on the part of the observer.” The term “MASTER”, therefore, has acquired a certain connotation to mean the
coffee products MASTER ROAST and MASTER BLEND produced by Nestle. As such, the use by CFC of
the term “MASTER” in the trademark for its coffee product FLAVOR MASTER is likely to cause
confusion or mistake or even to deceive the ordinary purchasers.
Societe Des Produits Nestle, S.A. vs Court of Appeals
356 SCRA 207 – Mercantile Law – Intellectual Property Law – Law on Trademarks, Service Marks and
Trade Names – Generic Term
In 1984, CFC Corporation filed with the Bureau of Patents, Trademarks, and Technology Transfers an
application for the registration of its trademark “Flavor Master” – an instant coffee. Nestle opposed the
application as it alleged that “Flavor Master” is confusingly similar to Nestle coffee products like Master
Blend and Master Roast. Nestle alleged that in promoting their products, the word Master has been used so
frequently so much so that when one hears the word Master it connotes to a Nestle product. They provided
as examples the fact that they’ve been using Robert Jaworski and Ric Puno Jr. as their commercial
advertisers; and that in those commercials Jaworski is a master of basketball and that Puno is a master of
talk shows; that the brand of coffee equitable or fit to them is Master Blend and Master Roast. CFC
Corporation on the other hand alleged that the word “Master” is a generic and a descriptive term, hence not
subject to trademark. The Director of Patents ruled in favor of Nestle but the Court of Appeals, using the
Holistic Test, reversed the said decision.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. The proper test that should have been used is the Dominancy Test. The application of the
totality or holistic test is improper since the ordinary purchaser would not be inclined to notice the specific
features, similarities or dissimilarities, considering that the product is an inexpensive and common
household item. The use of the word Master by Nestle in its products and commercials has made Nestle
acquire a connotation that if it’s a Master product it is a Nestle product. As such, the use by CFC of the term
“MASTER” in the trademark for its coffee product FLAVOR MASTER is likely to cause confusion or
mistake or even to deceive the ordinary purchasers.
In addition, the word “MASTER” is neither a generic nor a descriptive term. As such, said term can not be
invalidated as a trademark and, therefore, may be legally protected.
Generic terms are those which constitute “the common descriptive name of an article or substance,” or
comprise the “genus of which the particular product is a species,” or are “commonly used as the name or
description of a kind of goods,” or “imply reference to every member of a genus and the exclusion of
individuating characters,” or “refer to the basic nature of the wares or services provided rather than to the
more idiosyncratic characteristics of a particular product,” and are not legally protectable.
On the other hand, a term is descriptive and therefore invalid as a trademark if, as understood in its normal
and natural sense, it “forthwith conveys the characteristics, functions, qualities or ingredients of a product to
one who has never seen it and does not know what it is,” or “if it forthwith conveys an immediate idea of the
ingredients, qualities or characteristics of the goods,” or if it clearly denotes what goods or services are
provided in such a way that the consumer does not have to exercise powers of perception or imagination.
Rather, the term “MASTER” is a suggestive term brought about by the advertising scheme of Nestle.
Suggestive terms are those which, in the phraseology of one court, require “imagination, thought and
perception to reach a conclusion as to the nature of the goods.” Such terms, “which subtly connote
something about the product,” are eligible for protection in the absence of secondary meaning. While
suggestive marks are capable of shedding “some light” upon certain characteristics of the goods or services
in dispute, they nevertheless involve “an element of incongruity,” “figurativeness,” or ” imaginative effort
on the part of the observer.”
MIGHTY CORP. vs. E&J GALLO
MIGHTY CORP. vs. E&J GALLO
G.R. NO. 154342
July 14, 2004
PONENTE CORONA; J.
FACTS:
On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC (respondents) sued
MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. (petitioners) in the RTC-
Makati for trademark and trade name infringement and unfair competition, with a prayer for damages and
preliminary injunction.
They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winery’s and Gallo and Ernest
& Julio Gallo trademark’s established reputation and popularity, thus causing confusion, deception and
mistake on the part of the purchasing public who had always associated Gallo and Ernest and Julio & Gallo
trademarks with Gallo Winery’s wines.
In their answer, petitioners alleged, among other affirmative defenses that: petitioners Gallo cigarettes and
Gallo Winery’s wine were totally unrelated products. To wit:
1. Gallo Winery’s GALLO trademark registration certificates covered wines only, and not cigarettes;
2. GALLO cigarettes and GALLO wines were sold through different channels of trade;
3. the target market of Gallo Winery’s wines was the middle or high-income bracket while Gallo cigarette
buyers were farmers, fishermen, laborers and other low-income workers;
4. that the dominant feature of the Gallo cigarette was the rooster device with the manufacturer’s name
clearly indicated as MIGHTY CORPORATION, while in the case of Gallo Winery’s wines, it was the full
names of the founders-owners ERNEST & JULIO GALLO or just their surname GALLO;
The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a writ of preliminary
injunction. CA likewise dismissed respondent’s petition for review on certiorari.
After the trial on the merits, however, the Makati RTC held petitioners liable for committing trademark
infringement and unfair competition with respect to the GALLO trademark.
On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied petitioner’s motion for
reconsideration.
ISSUE/S: Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for the
reason alone that they were purportedly forms of vice.
RULING: NO.
Wines and cigarettes are not identical, similar, competing or related goods.
In resolving whether goods are related, several factors come into play:
· the business (and its location) to which the goods belong
· the class of product to which the good belong
· the product’s quality, quantity, or size, including the nature of the package, wrapper or container
· the nature and cost of the articles
· the descriptive properties, physical attributes or essential characteristics with reference to their form,
composition, texture or quality
· the purpose of the goods
· whether the article is bought for immediate consumption, that is, day-to-day household items
· the field of manufacture
· the conditions under which the article is usually purchased and
· the articles of the trade through which the goods flow, how they are distributed, marketed, displayed
and sold.
The test of fraudulent simulation is to the likelihood of the deception of some persons in some measure
acquainted with an established design and desirous of purchasing the commodity with which that design has
been associated. The simulation, in order to be objectionable, must be as appears likely to mislead the
ordinary intelligent buyer who has a need to supply and is familiar with the article that he seeks to purchase.
The petitioners are not liable for trademark infringement, unfair competition or damages.
Mighty Corporation vs. E.J. Gallow Winery
Mighty Corporation and La Campana Fabrica De Tabaco, Inc. vs. E. & J. Gallo Winery and The Andresons
Group, Inc.
[G.R. No. 154342. July 14, 2004]
E. & J. Gallo Winery and The Andresons Group, Inc. sued Mighty Corporation and La Campana Fabrica
De Tabaco, Inc. in the Makati RTC for trademark and tradename infringement and unfair competition, with
a prayer for damages and preliminary injunction.
Respondents charged petitioners with violating Article 6bis of the Paris Convention for the Protection of
Industrial Property (Paris Convention) and RA 166 (Trademark Law), specifically, Sections 22 and 23 (for
trademark infringement), 29 and 30 (for unfair competition and false designation of origin) and 37 (for
tradename infringement). They claimed that petitioners adopted the GALLO trademark to ride on Gallo
Winerys GALLO and ERNEST & JULIO GALLO trademarks established reputation and popularity, thus
causing confusion, deception and mistake on the part of the purchasing public who had always associated
GALLO and ERNEST & JULIO GALLO trademarks with Gallo Winerys wines. Respondents prayed for
the issuance of a writ of preliminary injunction and ex parte restraining order, plus P2 million as actual and
compensatory damages, at least P500,000 as exemplary and moral damages, and at least P500,000 as
attorney’s fees and litigation expenses.
In their answer, petitioners alleged, among other affirmative defenses, that:
· GALLO cigarettes and Gallo Winerys wines were totally unrelated products;
· Gallo Winerys GALLO trademark registration certificate covered wines only, not cigarettes;
· GALLO cigarettes and GALLO wines were sold through different channels of trade;
· GALLO cigarettes, sold at P4.60 for GALLO filters and P3 for GALLO menthols, were low-cost
items compared to Gallo Winerys high-priced luxury wines which cost between P98 to P242.50;
· the target market of Gallo Winerys wines was the middle or high-income bracket with at least P10,000
monthly income while GALLO cigarette buyers were farmers, fishermen, laborers and other low-income
workers;
· the dominant feature of the GALLO cigarette mark was the rooster device with the manufacturers
name clearly indicated as MIGHTY CORPORATION while, in the case of Gallo Winerys wines, it was the
full names of the founders-owners ERNEST & JULIO GALLO or just their surname GALLO;
· by their inaction and conduct, respondents were guilty of laches and estoppel; and petitioners acted
with honesty, justice and good faith in the exercise of their right to manufacture and sell GALLO cigarettes.
The Makati RTC held petitioners liable for, and permanently enjoined them from, committing trademark
infringement and unfair competition with respect to the GALLO trademark. Makati RTC granted
respondents motion for partial reconsideration and increased the award of actual and compensatory
damages. On appeal, the CA affirmed the Makati RTC decision and subsequently denied petitioners motion
for reconsideration.
Issues:
· Whether or not CA did not follow prevailing laws and jurisprudence when it held that [a] RA 8293
(Intellectual Property Code of the Philippines [IP Code]) was applicable in this case;
· Whether or not GALLO cigarettes and GALLO wines were identical, similar or related goods for the
reason alone that they were purportedly forms of vice;and
· Whether or not petitioners were liable for trademark infringement, unfair competition and damages.
Held:
· Yes.
Respondents sued petitioners on March 12, 1993 for trademark infringement and unfair competition
committed during the effectivity of the Paris Convention and the Trademark Law.
Yet, in the Makati RTC decision of November 26, 1998, petitioners were held liable not only under the
aforesaid governing laws but also under the IP Code which took effect only on January 1, 1998, or about
five years after the filing of the complaint
It is a fundamental principle that the validity and obligatory force of a law proceed from the fact that it has
first been promulgated. A law that is not yet effective cannot be considered as conclusively known by the
populace. To make a law binding even before it takes effect may lead to the arbitrary exercise of the
legislative power. Nova constitutio futuris formam imponere debet non praeteritis. A new state of the law
ought to affect the future, not the past. Any doubt must generally be resolved against the retroactive
operation of laws, whether these are original enactments, amendments or repeals. There are only a few
instances when laws may be given retroactive effect, none of which is present in this case.
The IP Code, repealing the Trademark Law, was approved on June 6, 1997. Section 241 thereof expressly
decreed that it was to take effect only on January 1, 1998, without any provision for retroactive application.
Thus, the Makati RTC and the CA should have limited the consideration of the present case within the
parameters of the Trademark Law and the Paris Convention, the laws in force at the time of the filing of the
complaint.
· No.
In resolving whether goods are related, several factors come into play:
(a) the business (and its location) to which the goods belong
(b) the class of product to which the goods belong
(c) the product's quality, quantity, or size, including the nature of the package, wrapper or container
(d) the nature and cost of the articles
(e) the descriptive properties, physical attributes or essential characteristics with reference to their form,
composition, texture or quality
(f) the purpose of the goods
(g) whether the article is bought for immediate consumption, that is, day-to-day household items
(h) the fields of manufacture
(i) the conditions under which the article is usually purchased and
(j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed and
sold.
A very important circumstance is whether there exists a likelihood that an appreciable number of ordinarily
prudent purchasers will be misled, or simply confused, as to the source of the goods in question. The
purchaser is not the completely unwary consumer but is the ordinarily intelligent buyer considering the type
of product involved. He is accustomed to buy, and therefore to some extent familiar with, the goods in
question. The test of fraudulent simulation is to be found in the likelihood of the deception of some persons
in some measure acquainted with an established design and desirous of purchasing the commodity with
which that design has been associated. The test is not found in the deception, or the possibility of deception,
of the person who knows nothing about the design which has been counterfeited, and who must be
indifferent between that and the other. The simulation, in order to be objectionable, must be such as appears
likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar with the article that
he seeks to purchase.
Hence, in the adjudication of trademark infringement, we give due regard to the goods usual purchasers
character, attitude, habits, age, training and education.
Applying these legal precepts to the present case, petitioners use of the GALLO cigarette trademark is not
likely to cause confusion or mistake, or to deceive the ordinarily intelligent buyer of either wines or
cigarettes or both as to the identity of the goods, their source and origin, or identity of the business of
petitioners and respondents.
Obviously, wines and cigarettes are not identical or competing products. Neither do they belong to the same
class of goods. Respondents GALLO wines belong to Class 33 under Rule 84[a] Chapter III, Part II of the
Rules of Practice in Trademark Cases while petitioners GALLO cigarettes fall under Class 34.
We are mindful that product classification alone cannot serve as the decisive factor in the resolution of
whether or not wines and cigarettes are related goods. Emphasis should be on the similarity of the products
involved and not on the arbitrary classification or general description of their properties or characteristics.
But the mere fact that one person has adopted and used a particular trademark for his goods does not prevent
the adoption and use of the same trademark by others on articles of a different description.
Both the Makati RTC and the CA held that wines and cigarettes are related products because: (1) they are
related forms of vice, harmful when taken in excess, and used for pleasure and relaxation and (2) they are
grouped or classified in the same section of supermarkets and groceries.
We find these premises patently insufficient and too arbitrary to support the legal conclusion that wines and
cigarettes are related products within the contemplation of the Trademark Law and the Paris Convention.
First, anything - not only wines and cigarettes ― can be used for pleasure and relaxation and can be harmful
when taken in excess. Indeed, it would be a grave abuse of discretion to treat wines and cigarettes as similar
or related products likely to cause confusion just because they are pleasure-giving, relaxing or potentially
harmful. Such reasoning makes no sense.
Second, it is common knowledge that supermarkets sell an infinite variety of wholly unrelated products and
the goods here involved, wines and cigarettes, have nothing whatsoever in common with respect to their
essential characteristics, quality, quantity, size, including the nature of their packages, wrappers or
containers.
Accordingly, the U.S. patent office and courts have consistently held that the mere fact that goods are sold
in one store under the same roof does not automatically mean that buyers are likely to be confused as to the
goods respective sources, connections or sponsorships. The fact that different products are available in the
same store is an insufficient standard, in and of itself, to warrant a finding of likelihood of confusion.
Wines and cigarettes are non-competing and are totally unrelated products not likely to cause confusion vis-
-vis the goods or the business of the petitioners and respondents.
Wines are bottled and consumed by drinking while cigarettes are packed in cartons or packages and smoked.
There is a whale of a difference between their descriptive properties, physical attributes or essential
characteristics like form, composition, texture and quality.
GALLO cigarettes are inexpensive items while GALLO wines are not. GALLO wines are patronized by
middle-to-high-income earners while GALLO cigarettes appeal only to simple folks like farmers, fishermen,
laborers and other low-income workers. Indeed, the big price difference of these two products is an
important factor in proving that they are in fact unrelated and that they travel in different channels of trade.
There is a distinct price segmentation based on vastly different social classes of purchasers.
GALLO cigarettes and GALLO wines are not sold through the same channels of trade. GALLO cigarettes
are Philippine-made and petitioners neither claim nor pass off their goods as imported or emanating from
Gallo Winery. GALLO cigarettes are distributed, marketed and sold through ambulant and sidewalk
vendors, small local sari-sari stores and grocery stores in Philippine rural areas, mainly in Misamis Oriental,
Pangasinan, Bohol, and Cebu. On the other hand, GALLO wines are imported, distributed and sold in the
Philippines through Gallo Winerys exclusive contracts with a domestic entity, which is currently Andresons.
By respondents own testimonial evidence, GALLO wines are sold in hotels, expensive bars and restaurants,
and high-end grocery stores and supermarkets, not through sari-sari stores or ambulant vendors.
Tobacco and alcohol products may be considered related only in cases involving special circumstances
which exist only if a famous mark is involved and there is a demonstrated intent to capitalize on it. Both of
these are absent in the present case.
· No, petitioners are not liable for trademark infringement and unfair competition.
Trademark Infringement
Each trademark infringement case presents a unique problem which must be answered by weighing the
conflicting interests of the litigants.
Respondents claim that GALLO wines and GALLO cigarettes flow through the same channels of trade, that
is, retail trade. If respondent’s assertion is true, then both goods co-existed peacefully for a considerable
period of time. It took respondents almost 20 years to know about the existence of GALLO cigarettes and
sue petitioners for trademark infringement. Given, on one hand, the long period of time that petitioners were
engaged in the manufacture, marketing, distribution and sale of GALLO cigarettes and, on the other,
respondents delay in enforcing their rights (not to mention implied consent, acquiescence or negligence) we
hold that equity, justice and fairness require us to rule in favor of petitioners. The scales of conscience and
reason tip far more readily in favor of petitioners than respondents.
Moreover, there exists no evidence that petitioners employed malice, bad faith or fraud, or that they
intended to capitalize on respondent’s goodwill in adopting the GALLO mark for their cigarettes which are
totally unrelated to respondents GALLO wines. Thus, we rule out trademark infringement on the part of
petitioners.
Unfair Competition
Under Section 29 of the Trademark Law, any person who employs deception or any other means contrary to
good faith by which he passes off the goods manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill, or who commits any acts calculated to
produce said result, is guilty of unfair competition. It includes the following acts:
(a) Any person, who in selling his goods shall give them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they
are contained, or the devices or words thereon, or in any other feature of their appearance, which would be
likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer other
than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall
deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or
any agent of any vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the
false belief that such person is offering the services of another who has identified such services in the mind
of the public;
(c) Any person who shall make any false statement in the course of trade or who shall commit any other act
contrary to good faith of a nature calculated to discredit the goods, business or services of another.
The universal test question is whether the public is likely to be deceived. Nothing less than conduct tending
to pass off one man’s goods or business as that of another constitutes unfair competition. Actual or probable
deception and confusion on the part of customers by reason of defendant’s practices must always appear. On
this score, we find that petitioners never attempted to pass off their cigarettes as those of respondents. There
is no evidence of bad faith or fraud imputable to petitioners in using their GALLO cigarette mark.
MCDONALD’S CORPORATION V. L.C. BIG MAK BURGER (G.R. NO. 143993)
Facts:
Petitioner McDonald’s, an American corporation operating a global chain of fast-food restaurants, is the
owner of the ‘Big Mac’ mark for its double-decker hamburger sandwich here and in the US. Meanwhile,
respondent L.C., a domestic corporation which operates fast-food outlets and snack vans applied for the
registration of the ‘Big Mak’ mark for its hamburger sandwiches. Petitioner opposed on the ground that ‘Big
Mak’ was a colorable imitation of its registered ‘Big Mac’ mark for the same food products. Respondents
denied there is colorable imitation and argued that petitioner cannot exclusively appropriate the mark ‘Big
Mac’ because the word ‘Big’ is a generic and descriptive term. Petitioner filed a complaint for trademark
infringement and unfair competition. The trial court found for petitioners. CA held otherwise.
Issues:
(1) Whether or not the word ‘Big Mac’ can be exclusively appropriated by petitioner;
(2) Whether or not there is colorable imitation resulting in likelihood of confusion;
(3) Whether or not there is unfair competition.
Ruling:
(1) YES. A mark is valid if it is “distinctive” and thus not barred from registration under Section 4 of RA
166. However, once registered, not only the mark’s validity but also the registrant’s ownership of the mark
is prima facie presumed. 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 or “Chocolate Fudge” for chocolate soda drink. 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. Significantly, the
trademark “Little Debbie” for snack cakes was found arbitrary or fanciful.
(2) YES. In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test
and the holistic test. The dominancy test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion. In contrast, 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. This Court, however, has relied on the dominancy test rather than the holistic test. The test of
dominancy is now explicitly incorporated into law in Section 155.1 of the Intellectual Property Code which
defines infringement as the “colorable imitation of a registered mark xxx or a dominant feature thereof.”
Applying the dominancy test, the Court finds that 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. In spelling, considering the Filipino language, even the last letters of both
marks are the same. Clearly, respondents have adopted in “Big Mak” not only the dominant but also almost
all the features of “Big Mac.” Applied to the same food product of hamburgers, the two marks will likely
result in confusion in the public mind. Certainly, “Big Mac” and “Big Mak” for hamburgers create even
greater confusion, not only aurally but also visually. Indeed, a person cannot distinguish “Big Mac” from
“Big Mak” by their sound. When one hears a “Big Mac” or “Big Mak” hamburger advertisement over the
radio, one would not know whether the “Mac” or “Mak” ends with a “c” or a “k.”
(3) YES. 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. The
confusing similarity may or may not result from similarity in the marks, but may result from other external
factors in the packaging or presentation of the goods. The intent to deceive and defraud may be inferred
from the similarity of the appearance of the goods as offered for sale to the public. Actual fraudulent intent
need not be shown. Unfair competition is broader than trademark infringement and includes passing off
goods with or without trademark infringement. Trademark infringement is a form of unfair competition.
Trademark infringement constitutes unfair competition when there is not merely likelihood of confusion, but
also actual or probable deception on the public because of the general appearance of the goods. There can be
trademark infringement without unfair competition as when the infringer discloses on the labels containing
the mark that he manufactures the goods, thus preventing the public from being deceived that the goods
originate from the trademark owner.
Respondents’ goods are hamburgers which are also the goods of petitioners. Since respondents chose to
apply the “Big Mak” mark on hamburgers, just like petitioner’s use of the “Big Mac” mark on hamburgers,
respondents have obviously clothed their goods with the general appearance of petitioners’ goods. There is
actually no notice to the public that the “Big Mak” hamburgers are products of “L.C. Big Mak Burger, Inc.”
and not those of petitioners who have the exclusive right to the “Big Mac” mark. This clearly shows
respondents’ intent to deceive the public. We hold that as found by the RTC, respondent corporation is
liable for unfair competition.
McDonald’s Corporation vs Macjoy Fastfood Corporation
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
petitioner’s registered and internationally recognized MCDONALD’S 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.
McDonald’s Corporation vs Macjoy Fastfood Corporation
514 SCRA 95 – Mercantile Law – Intellectual Property Law – Law on Trademarks, Service Marks and
Trade Names – Dominancy Test vs Holistic Test
Since 1987, MacJoy Devices had been operating in Cebu. MacJoy is a fast food restaurant which sells fried
chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo and steaks. In
1991, MacJoy filed its application for trademark before the Intellectual Property Office (IPO). McDonald’s
opposed the application as it alleged that MacJoy closely resembles McDonald’s corporate logo such that
when used on identical or related goods, the trademark applied for would confuse or deceive purchasers into
believing that the goods originate from the same source or origin that the use and adoption in bad faith of the
“MacJoy and Device” mark would falsely tend to suggest a connection or affiliation with McDonald’s
restaurant services and food products, thus, constituting a fraud upon the general public and further cause
the dilution of the distinctiveness of McDonald’s registered and internationally recognized McDonald’S
marks to its prejudice and irreparable damage.
The IPO ruled in favor of McDonald’s. MacJoy appealed before the Court of Appeals and the latter ruled in
favor of MacJoy. The Court of Appeals, in ruling over the case, actually used the holistic test (which is a test
commonly used in infringement cases). The holistic test looks upon the visual comparisons between the two
trademarks. In this case, the Court of Appeals ruled that other than the letters “M” and “C” in the words
MacJoy and McDonald’s, there are no real similarities between the two trademarks. “MacJoy” is written in
round script while “McDonald’s” is written in thin gothic. “MacJoy” is accompanied by a picture of a
(cartoonish) chicken while “McDonald’s” is accompanied by the arches “M”. The color schemes between
the two are also different. “MacJoy” is in deep pink while “McDonald’s” is in gold color.
ISSUE: Whether or not MacJoy infringed upon the trademark of McDonald’s.
HELD: Yes. The Supreme Court ruled that the proper test to be used is the dominancy test. The dominancy
test not only looks at the visual comparisons between two trademarks but also the aural impressions created
by the marks in the public mind as well as connotative comparisons, giving little weight to factors like
prices, quality, sales outlets and market segments. In the case at bar, the Supreme Court ruled that
“McDonald’s” and “MacJoy” marks are confusingly similar with each other such that an ordinary purchaser
can conclude an association or relation between the marks. To begin with, both marks use the corporate “M”
design logo and the prefixes “Mc” and/or “Mac” as dominant features. The first letter “M” in both marks
puts emphasis on the prefixes “Mc” and/or “Mac” by the similar way in which they are depicted i.e. in an
arch-like, capitalized and stylized manner. For sure, it is the prefix “Mc,” an abbreviation of “Mac,” which
visually and aurally catches the attention of the consuming public. Verily, the word “MACJOY” attracts
attention the same way as did “McDonalds,” “MacFries,” “McSpaghetti,” “McDo,” “Big Mac” and the rest
of the MCDONALD’S marks which all use the prefixes Mc and/or Mac. Besides and most importantly, both
trademarks are used in the sale of fastfood products.
Further, the owner of MacJoy provided little explanation why in all the available names for a restaurant he
chose the prefix “Mac” to be the dominant feature of the trademark. The prefix “Mac” and “Macjoy” has no
relation or similarity whatsoever to the name Scarlett Yu Carcel, which is the name of the niece of MacJoy’s
president whom he said was the basis of the trademark MacJoy. By reason of the MacJoy’s implausible and
insufficient explanation as to how and why out of the many choices of words it could have used for its trade-
name and/or trademark, it chose the word “Macjoy,” the only logical conclusion deducible therefrom is that
the MacJoy would want to ride high on the established reputation and goodwill of the McDonald’s marks,
which, as applied to its restaurant business and food products, is undoubtedly beyond question.
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 petitioner’s Skechers rubber shoes and its “Strong”rubber shoes.
RTC – agreed with respondents
CA – affirmed RTC’s 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 petitioner’s 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 petitioner’s trademark, already constitutes infringement under
the Dominancy Test.
 Comparing petitioner’s Energy model and respondent’s 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 respondent’s shoes are very similar to petitioner’s 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.
Forietrans Manufacturing Corp., et al. v. Devidoff ET. CIE SA & Japan Tobaccco, Inc.
G.R. No. 197482. March 6, 2017
Facts: Davidoff Et. Cie SA (Davidoff) and Japan Tobacco, Inc. (JTI) [collectively, respondents] are non-
resident foreign corporations organized and existing under the laws of Switzerland and Japan,
respectively. They are represented in the Philippines by law firm SyCip Salazar Hernandez & Gatmaitan
(SyCip Law Firm). It is authorized under a special power of attorney to maintain and prosecute legal actions
against any manufacturers, local importers and/or distributors, dealers or retailers of counterfeit products
bearing Davidoff s and JTI' s trademarks or any products infringing their trademarks. Respondents also
retained Business Profiles, Inc. (BPI) as their private investigator in the Philippines.
Meanwhile, petitioner Forietrans Manufacturing Corporation (FMC) is a domestic corporation with
principal address at Lots 5 and 7, Angeles Industrial Park, Special Economic Zone, Barangay Calibutbut,
Bacolor, Pampanga. BPI reported to respondents that "there were counterfeit Davidoff and JTI products, or
products bearing colorable imitation of Davidoff and JTI products, or which are confusingly or deceivingly
similar to Davidoff and JTI registered trademarks, being manufactured and stored" in FMC' s
warehouses. SyCip Law Firm then sought the assistance of the Criminal Investigation and Detection Group
(CIDG) of the Philippine National Police in securing warrants to search the warehouses. The RTC granted
the applications. In the same afternoon of August 4, 2004, PSI Nathaniel Villegas (PSI Villegas) and PSI
Eric Maniego (PSI Maniego) implemented SW Nos. 044 and 046, while PSI De Mesa implemented SW
Nos. 045 and 047. During their separate raids, the CIDG teams seized several boxes containing raw tobacco,
cigarettes, cigarette packs, and cigarette reams bearing the name DAGETA and DAGETA International.
They also secured machineries, receptacles, other paraphernalia, sales invoices and official receipts.
Petitioner Agerico Calaquian, president of FMC, was allegedly apprehended at the premises along with four
Chinese nationals.
With the seized items as evidence, three separate Complaint-Affidavits were filed before the Office of the
Provincial Prosecutor of San Fernando, Pampanga charging FMC and its employees· with violation of
Republic Act No. 8293, or the Intellectual Property Code of the Philippines (IP Code). The charges are as
follows:
1. LS. No. OCPSF-04-H-2047 (Davidoff infringement case) - Infringement under
Section 155 in relation to Section 170 of the IP Code for the illegal manufacture of
cigarettes bearing the DA GET A label, with packaging very similar to the packaging
of Davidoff's products and the script "DAGETA" on the packs being deceivingly or
confusingly similar to the registered mark "DAVIDOFF."
2. LS. No. OCPSF-04-H-2048 (False Designation of Origin) - False Designation of
Origin under Section 169 in relation to Section 170 of the IP Code for the illegal
manufacture and/or storage of cigarettes bearing the "DA GET A" label with an
indication that such cigarettes were "MADE IN GERMANY" though they were
actually processed, manufactured and packaged in FMC's office in Bacolor,
Pampanga.
3. LS. No. OCPSF-04-H-2226 (JTI infringement case)- Infringement under Section
155 in relation to Section 170 of the IP Code for illegally manufacturing cigarettes
which are deceivingly or confusingly similar to, or almost the same as, the registered
marks of JTI, which are the "MILD SEVEN" and "MILD SEVEN LIGHTS"
trademarks.
Calaquian denied the charges against him and FMC. He countered that during the August 4, 2004 raid, the
CIDG did not find counterfeit cigarettes within FMC's premises as nobody was there at the time. He claimed
that what the CIDG found were boxes of genuine Dageta and Dageta International cigarettes imported from
Germany for re-export to Taiwan and China. Calaquian asserted that FMC is an eco-zone export enterprise
registered with the Philippine Economic Zone Authority (PEZA), and is duly authorized by the National
Tobacco Administration to purchase, import and export tobacco. FMC would not have passed PEZA's strict
rules and close monitoring if it had engaged in trademark infringement. Calaquian also denies that the CIDG
made arrests on the occasion of the raid.
In a Joint Resolution dated September 12, 2005, Second Assistant Provincial Prosecutor Otto B. Macabulos
(Prosecutor Macabulos) dismissed the criminal complaints. Prosecutor Macabulos found the affidavit of
Jimmy Trocio (Trocio ), the informant/witness presented by PSI De Mesa in his application for search
warrants, clearly insufficient to show probable cause to search FMC's premises for fake JTI or Davidoff
products. Prosecutor Macabulos also expressed disbelief over the allegation that Mild Seven and Mild Seven
Lights were seized at FMC' s premises. He averred that the Joint Affidavit of Arrest/Seizure dated August 6,
2004 never mentioned those cigarettes as among the items seized. Furthermore, there was no proof that
FMC manufactured fake Mild Seven cigarettes. Hence, he also dismissed the JTI infringement case.
Respondents thereafter filed a Petition for Review before then Secretary of Justice Raul M. Gonzalez
(Secretary Gonzalez).
In his Resolution dated February 10, 2006, Secretary Gonzalez affirmed the ruling of Prosecutor Macabulos.
Respondents moved for reconsideration. This, however, was denied with finality by Secretary Gonzalez in
his Resolution dated March 27, 2006. Respondents elevated the case to the CA via a petition for certiorari.
The CA reversed the resolutions of Secretary Gonzalez. It adjudged that Secretary Gonzalez acted with
grave abuse of discretion in affirming Prosecutor Macabulos' finding that no probable cause exists against
FMC.
Issue: Whether the CA erred in ruling that Secretary Gonzalez committed grave abuse of discretion in
finding no probable cause to charge petitioners with trademark infringement and false designation of origin.
Ruling: We deny the petition.
The records show that a prima facie case for trademark infringement and false designation of origin exists
against petitioners.1âwphi1 Section 155 of the IP Code enumerates the instances when infringement is
committed, viz.:
Sec. 155. Remedies; Infringement. - Any person who shall, without the consent of the
owner of the registered mark:
15 5 .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 s trademarks. Respondents also submitted authentic Mild Seven and Mild Seven Lights cigarettes and
deceive; or samples of the cigarettes taken from FMC's premises.

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant When Secretary Gonzalez dismissed respondents' complaint, he made a factual determination that no Mild
feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to Seven and Mild Seven Lights were actually seized from FMC's premises. He cited Prosecutor Macabulos'
labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used observation that the Joint Affidavit of Arrest/Seizure dated August 6, 2004 never mentioned the foregoing
in commerce upon or in connection with the sale, offering for sale, distribution, or cigarettes as among the items seized. The CA, on the other hand, reversed the dismissal of the complaint and
advertising of goods or services on or in connection with which such use is likely to cause declared that the issue of whether or not there was an actual seizure of Mild Seven and Mild Seven Lights
confusion, or to cause mistake, or to deceive, shall be liable in a civil action for during the raid is evidentiary in character.
infringement by the registrant for the remedies hereinafter set forth: Provided, That the
infringement takes place at the moment any of the acts stated in Subsection 155.1 or this We concur with the CA. The validity and merits of a party's defense or accusation, as well as the
subsection are committed regardless of whether there is actual sale of goods or services admissibility of testimonies and evidence, are better ventilated during trial proper than at the preliminary
using the infringing material. investigation level. Further, the presence or absence of the elements of the crime is evidentiary in nature and
The essential element of infringement is that the infringing mark is likely to cause confusion. In this a matter of defense that may be passed upon only after a full-blown trial on the merits.
case, the complaint-affidavit for the Davidoff infringement case alleged confusing similarity between the
cigarette packs of the authentic Davidoff cigarette and the sample Dageta cigarette pack seized during the In this case, Secretary Gonzalez found no probable cause against petitioners for infringement of the JTI
search of FMC's premises. Respondents submitted samples of the Davidoff and Dageta cigarette packs trademarks based on his conclusion that no fake Mild Seven and Mild Seven Lights were seized from FMC's
during the preliminary investigation. They noted the following similarities: premises during the raid. He already passed upon as authentic and credible the Joint Affidavit of
Arrest/Seizure presented by petitioners which did not list Mild Seven and Mild Seven Lights cigarettes as
Davidoff (Exhibit 1) Dageta (Exhibit 2) among those items seized during the raid. In so doing, Secretary Gonzalez assumed the function of a trial
judge, determining and weighing the evidence submitted by the parties.
Octagonal designed pack Octagonal designed pack ·
Meanwhile, the Complaint-Affidavit in the JTI infringement case shows that, more likely than not,
Black and red covering Black and red covering petitioners have committed the offense charged. FMC, alleged to be without authority to deal with JTI
Silver coloring of the tear tape and printing Silver coloring of the tear tape and printing products, is claimed to have been manufacturing cigarettes that have almost the same appearance as JTI' s
Mild Seven and Mild Seven Lights cigarettes.
"Made in Germany by Reemtsman under license of "Made m Germany under license of DAGETA &
Davidoff & CIE SA, Geneva" Tobacco LT" As to the crime of False Designation of Origin, Section 169 of the IP Code provides:

Manufacturing Code imprinted on the base of the pack Manufacturing Code imprinted on the base of the pack Sec. 169. False Designations of Origin; False Description or Representation. -
169 .1. Any person who, on or in connection with any goods or services, or any container
Writing at the back says: "These carefully selected Writing at the back says: "These specifically selected for goods, uses in commerce any word, term, name, symbol, or device, or any
tobaccos have been skillfully blended to assure your tobaccos have been professionally blended to ensure combination thereof, or any false designation of origin, false or misleading description of
pleasure" with the signature of Zino Davidoff highest quality" with Chinese letters underneath the name fact, or false or misleading representation of fact, which:
Dageta (a) Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation,
Both Prosecutor Macabulos and Secretary Gonzalez disregarded the foregoing evidence of respondents and connection, or association of such person with another person, or as to the origin,
confined their resolutions on the finding that there is an obvious difference between the names "Davidoff' sponsorship, or approval of his or her goods, services, or commercial activities by another
and "Dageta." Petitioners likewise rely on this finding and did not bother to refute or explain the alleged person; or
similarities in the packaging of Davidoff and Dageta cigarettes. While we agree that no confusion is created (b) In commercial advertising or promotion, misrepresents the nature, characteristics,
insofar as the names "Davidoff' and "Dageta" are concerned, we cannot say the same with respect to the qualities, or geographic origin of his or her or another person's goods, services, or
cigarettes' packaging. Indeed there might be differences when the two are compared. We have, in previous commercial activities, shall be liable to a civil action for damages and injunction provided
cases, noted that defendants in cases of infringement do not normally copy but only make colorable changes. in Sections 156 and 157 of this Act by any person who believes that he or she is or is
The most successful form of copying is to employ enough points of similarity to confuse the public, with likely to be damaged by such act.
enough points of difference to confuse the courts. xxx
Respondents alleged in their Complaint-Affidavit that petitioners illegally manufactured and/or stored
Similarly, in their Complaint-Affidavit in the JTI infringement case, respondents aver that JTI is the cigarettes bearing the "DAGETA" label with an indication that these cigarettes were made in Germany even
registered owner of the Mild Seven and Mild Seven Lights trademarks; and that FMC manufactures if they were actually processed, manufactured and packed in the premises of FMC. To support their claim,
cigarettes deceivingly or confusingly similar to, or almost the same as, the registered marks of JTJ. They respondents submitted samples and attached a copy of the receipt/inventory of the items seized during the
asserted that FMC is not authorized to manufacture, pack, distribute or otherwise deal in products using JTI' August 4, 2004 raid. These included cigarettes bearing the infringing DAGETA trademark and various
machineries, receptacles, boxes and other paraphernalia used in the manufacturing and packing of the
infringing products.
Petitioners, for their part, disputed respondents' claim and maintained that the items seized from their
warehouse were genuine Dageta and Dageta International cigarettes imported from Germany. In dismissing
the charge,
Secretary Gonzalez ruled that respondents failed to establish the falsity of the claim indicated in the
cigarettes' labels that they were made in Germany without providing the factual or legal basis for his
conclusion. He also brushed aside the allegations that (1) machines intended for manufacturing cigarettes
and (2) cigarettes' bearing the label "Made in Germany" were found and seized from FMC's warehouse in
the Philippines. To our mind, however, these circumstances are enough to excite the belief that indeed
petitioners were manufacturing cigarettes in their warehouse here in the Philippines but misrepresenting the
cigarettes' origin to be Germany. The CA, therefore, did not err in reversing the Resolution of the Secretary
of Justice.
In fine, we see no compelling reason to disturb the ruling of the CA finding probable cause against
petitioners for trademark infringement and false designation of origin.