MCDONALD'S CORPORATION, Petitioner,

vs
L.C. BIG MAK BURGER, INC., Respondent

G.R. No. 143993, August 18, 2004

Facts:

Petitioner McDonald’s Corporation (“McDonald’s”) is a corporation organized under the laws of

Delaware, United States. McDonald’s operates a global chain of fast-food restaurants.
McDonald’s own a family of marks including the “Big Mac” mark for its double-decker hamburger
sandwich. McDonald’s registered this trademark with the United States Trademark Registry on
October 16, 1979. Based on this Home Registration, McDonald’s applied for the registration of
the same mark in the Principal Register of then Philippine Bureau of Patents, Trademarks and
Technology (PBPTT) – now the Intellectual Property Office (IPO).

Pending approval of its application, McDonald’s introduced its “Big Mac” hamburger sandwiches
in the Philippine market in September 1981. On July 18, 1985, the PBPTT allowed registration of
the “Big Mac” mark in the Philippine Register based on its Home Registration in the United States.
From 1982 to 1990, McDonald’s spent P10.5 million in advertisement for “Big Mac” hamburger
sandwiches alone.

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

On October 21, 1988, respondent corporation applied with the PBPTT for the registration of the
“Big Mak” mark for its hamburger sandwiches. McDonald’s opposed respondent corporation’s
application on the ground that “Big Mak” was a colorable imitation of its registered “Big Mac” mark
for the same food products. On June 6, 1990, petitioners sued respondents in the Regional Trial
Court of Makati, Branch 137 ("RTC"), for trademark infringement and unfair competition.

Issues: Whether respondent corporation is liable for trademark infringement and unfair
competition.

Ruling: YES.

1. On the Issue of Trademark Infringement

Republic Act No. 166, Section 22 defines trademark infringement as “any person who [1] shall
use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale, offering for sale,
or advertising of any goods, business or services on or in connection with which such use is
likely to cause confusion or mistake or to deceive purchasers or others as to the source or
origin of such goods or services, or identity of such business; or [2] reproduce, counterfeit, copy,
or colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy,
or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods, business or services, shall be liable
to a civil action by the registrant for any or all of the remedies herein provided.”

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

To establish trademark infringement, the following elements must be shown: (1) the validity of
plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its colorable
imitation by the alleged infringer results in "likelihood of confusion." Of these, it is the element of
likelihood of confusion that is the gravamen of trademark infringement.

1st element:

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

The "Big Mac" mark, which should be treated in its entirety and not dissected word for word, is
neither generic nor descriptive. Generic marks are commonly used as the name or description of
a kind of goods, such as "Lite" for beer. Descriptive marks, on the other hand, convey the
characteristics, functions, qualities or ingredients of a product to one who has never seen it or
does not know it exists, such as "Arthriticare" for arthritis medication. On the contrary, "Big Mac"
falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual
characteristics of the product it represents. As such, it is highly distinctive and thus valid.

2nd element:

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

3rd element:

Section 22 covers two types of confusion arising from the use of similar or colorable imitation
marks, namely, confusion of goods (confusion in which the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he was purchasing the other) and confusion
of business (though the goods of the parties are different, the defendant's product is such as
might reasonably be assumed to originate with the plaintiff, and the public would then be deceived
either into that belief or into the belief that there is some connection between the plaintiff and
defendant which, in fact, does not exist).

There is confusion of goods in this case since respondents used the "Big Mak" mark on the same
goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used.

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

Furthermore, in determining likelihood of confusion, the SC has relied on the dominancy test
(similarity of the prevalent features of the competing trademarks that might cause confusion) over
the holistic test (consideration of the entirety of the marks as applied to the products, including
the labels and packaging).

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

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

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.

2. On the Issue of Unfair Competition

Section 29 of RA 166 defines unfair competition as, “any person who will employ deception or
any other means contrary to good faith by which he shall pass off the goods manufactured by
him or in which he deals, or his business, or services for those of the one having established such
goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.”

The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods, and (2) intent to deceive the public and defraud a competitor.

Unfair competition is broader than trademark infringement and includes passing off goods with or
without trademark infringement. Trademark infringement is a form of unfair competition.
Trademark infringement constitutes unfair competition when there is not merely likelihood of
confusion, but also actual or probable deception on the public because of the general appearance
of the goods.

The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its double decker hamburger
sandwich. The packaging material is a styrofoam box with the McDonald's logo and trademark in
red with block capital letters printed on it. All letters of the "B[ig] M[ac]" mark are also in red and
block capital letters. On the other hand, defendants' "B[ig] M[ak]" script print is in orange with only
the letter "B" and "M" being capitalized and the packaging material is plastic wrapper. xxxx
Further, plaintiffs' logo and mascot are the umbrella "M" and "Ronald McDonald's", respectively,
compared to the mascot of defendant Corporation which is a chubby boy called "Macky" displayed
or printed between the words "Big" and "Mak."

Moreover, there is no notice to the public that the "Big Mak" hamburgers are products of "L.C. Big
Mak Burger, Inc." Respondents introduced during the trial plastic wrappers and bags with the
words "L.C. Big Mak Burger, Inc." to inform the public of the name of the seller of the hamburgers.
However, petitioners introduced during the injunctive hearings plastic wrappers and bags with the
"Big Mak" mark without the name "L.C. Big Mak Burger, Inc." Respondents' belated presentation
of plastic wrappers and bags bearing the name of "L.C. Big Mak Burger, Inc." as the seller of the
hamburgers is an after-thought designed to exculpate them from their unfair business conduct.
As earlier stated, we cannot consider respondents' evidence since petitioners' complaint was
based on facts existing before and during the injunctive hearings.

Thus, 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.

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

DEL MONTE CORPORATION, Petitioner, vs
COURT OF APPEALS, Respondent

G.R. No. L-78325, January 25, 1990

Facts:

Petitioner Del Monte Corporation is a foreign company organized under the laws of the United
States and not engaged in business in the Philippines.

Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized

under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to
manufacture, distribute and sell in the Philippines various agricultural products, including catsup,
under the Del Monte trademark and logo.

On October 27, 1965, Del Monte authorized Philpack to register with the Philippine Patent Office
the Del Monte catsup bottle configuration, for which it was granted Certificate of Trademark
Registration No. SR-913. On November 20, 1972, Del Monte also obtained two registration
certificates for its trademark "DEL MONTE" and its logo.

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration

by the Bureau of Domestic Trade on April 17, 1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. The
product itself was contained in various kinds of bottles, including the Del Monte bottle, which the
private respondent bought from the junk shops for recycling.

Having received reports that the private respondent was using its exclusively designed bottles
and a logo confusingly similar to Del Monte's, Philpack warned it to desist from doing so on pain
of legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte
filed a complaint against the private respondent for infringement of trademark and unfair
competition, with a prayer for damages and the issuance of a writ of preliminary injunction.

Issue: Whether respondent is guilty of infringement and unfair competition.

Ruling: YES.

Section 22 of Republic Act No. 166 defines trademark infringement as “any person who [1] shall
use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation
of any registered mark or trade-name in connection with the sale, offering for sale, or advertising
of any goods, business or services on or in connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or others as to the source or origin of such goods
or services, or identity of such business; or [2] reproduce, counterfeit, copy, or colorably imitate
any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to
be used upon or in connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.”

Section 29 of RA 166 defines unfair competition as, “any person who will employ deception or
any other means contrary to good faith by which he shall pass off the goods manufactured by him
or in which he deals, or his business, or services for those of the one having established such

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.”

The Supreme Court recognizes that there are really distinctions between the designs of the logos
or trademarks of Del Monte and Sunshine Sauce. However, it has been correctly held that side-
by-side comparison is not the final test of similarity. 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.

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

CATERPILLAR, INC., Petitioner, vs MANOLO P. SAMSON, Respondent

G.R. No. 205972, November 9, 2016

Facts:

Caterpillar is a foreign corporation engaged in the manufacture and distribution of footwear,

clothing and related items, among others. Its products are known for six core trademarks, namely,
"CATERPILLAR", "CAT" "CATERPILLAR & DESIGN" "CAT AND DESIGN", "WALKING
MACHINES" and "TRACK-TYPE TRACTOR & DESIGN (Core Marks), all of which are alleged as
internationally known.

On the other hand, Samson, doing business under the names and styles of Itti Shoes Corporation,
Kolm's Manufacturing Corporation and Caterpillar Boutique and General Merchandise, is the
proprietor of various retail outlets in the Philippines selling footwear, bags, clothing, and related
items under the trademark "CATERPILLAR", registered in 1997 under Trademark Registration
No. 64705 issued by the Intellectual Property Office (IPO).

Caterpillar filed both civil and criminal cases against Samson for violation of unfair competition
provided under Section 168.3(a), in relation to Sections 131.3, 123(e) and 170 of R.A. 8293,
otherwise known as the Intellectual Property Code.

Issue: Whether a criminal complaint for unfair competition can proceed independently of, and
simultaneous with, the civil case for the same.

Ruling: YES.

The civil case filed by Caterpillar was for unfair competition, damages and cancellation of
trademark, while the criminal cases were the criminal prosecution of Samson for unfair
competition. A common element of all such cases for unfair competition - civil and criminal - was
fraud.

Under Article 33 of the Civil Code, a civil action entirely separate and distinct from the criminal
action may be brought by the injured party in cases of fraud, and such civil action shall proceed
independently of the criminal prosecution. In view of its being an independent civil action did not
operate as a prejudicial question that justified the suspension of the proceedings in criminal cases.

An action for the cancellation of trademark is a remedy available to a person who believes that
he is or will be damaged by the registration of a mark. On the other hand, the criminal actions for
unfair competition involved the determination of whether or not Samson had given his goods the
general appearance of the goods of Caterpillar, with the intent to deceive the public or defraud
Caterpillar as his competitor. In the suit for the cancellation of trademark, the issue of lawful
registration should necessarily be determined, but registration was not a consideration necessary
in unfair competition. Indeed, unfair competition is committed if the effect of the act is "to pass off
to the public the goods of one man as the goods of another;" it is independent of registration. As
fittingly put in R.F. & Alexander & Co. v. Ang, "one may be declared unfair competitor even if his
competing trademark is registered." Clearly, the determination of the lawful ownership of the
trademark in the civil action was not determinative of whether or not the criminal actions for unfair
competition shall proceed against Samson.

Digested by: Rhoda Crisnelle C. Villalobos JD-3A