G.R. No. 103543 July 5, 1993 ASIA BREWERY, vs. THE HON. COURT OF APPEA S CORPORATION, respondents.

GRI%O&A'UINO, J.: On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against sia !re"er# $nc. ( !$) for infringement of trademar% and unfair competition on account of t&e latter's !(() * +( *$+S(, or !(() , !(() product "&ic& &as been competing "it& SMC's S , M$-.(+ * +( *$+S(, for a s&are of t&e local beer mar%et. (San Miguel Corporation vs. sia !re"er# $nc., Civ. Case. ,o. 5/091, )2C !ranc& 1//, *asig, Metro Manila.). On ugust 34, 1991, a decision "as rendered b# t&e trial Court, presided over b# 5udge 5esus O. !ersamira, dismissing SMC's complaint because !$ 6&as not committed trademar% infringement or unfair competition against6 SMC (p. 189, Rollo). SMC appealed to t&e Court of ppeals (C. .7-.). C8 ,o. 38119). On September 01, 1991, t&e Court of ppeals (Si:t& ;ivision composed of 5ustice 5ose C. Campos, 5r., c&airman and ponente, and 5ustices 8enancio ;. ldecoa 5r. and <ilemon =. Mendo>a, as members) reversed t&e trial court. 2&e dispositive part of t&e decision reads as follo"s? $n t&e lig&t of t&e foregoing anal#sis and under t&e plain language of t&e applicable rule and principle on t&e matter, @e find t&e defendant sia !re"er# $ncorporated -.$+2A of infringement of trademar% and unfair competition. 2&e decision of t&e trial court is &ereb# )(8()S(;, and a ne" Budgment entered in favor of t&e plaintiff and against t&e defendant as follo"s? (1) 2&e defendant sia !re"er# $nc. its officers, agents, servants and emplo#ees are &ereb# permanentl# enBoined and restrained from manufacturing, putting up, selling, advertising, offering or announcing for sale, or suppl#ing !eer *ale *ilsen, or an# similar preparation, manufacture or beer in bottles and under labels substantiall# identical "it& or li%e t&e said bottles and labels of plaintiff San Miguel Corporation emplo#ed for t&at purpose, or substantiall# identical "it& or li%e t&e bottles and labels no" emplo#ed b# t&e defendant for t&at purpose, or in bottles or under labels "&ic& are calculated to deceive purc&asers and consumers into t&e belief t&at t&e beer is t&e product of t&e plaintiff or "&ic& "ill enable ot&ers to substitute, sell or palm off t&e said beer of t&e defendant as and for t&e beer of t&e plaintiff7complainant. (3) 2&e defendant sia !re"er# $nc. is &ereb# ordered to render an accounting and pa# t&e San Miguel Corporation double an# and all t&e pa#ments derived b# defendant from operations of its business and t&e sale of goods bearing t&e mar% 6!eer *ale *ilsen6 estimated at appro:imatel# <ive Million *esos (*5,111,111.11)C to recall all its products bearing t&e mar% 6!eer *ale *ilsen6 from its retailers and deliver t&ese as "ell as all labels, signs, prints, pac%ages, "rappers, receptacles and advertisements bearing t&e infringing mar% and all plates, molds, materials and ot&er means of ma%ing t&e same to t&e Court aut&ori>ed to e:ecute t&is Budgment for destruction. (0) 2&e defendant is &ereb# ordered to pa# plaintiff t&e sum of 2"o Million *esos (*3,111,111.11) as moral damages and =alf a Million *esos (*5,111,111.11) b# "a# of e:emplar# damages. (9) 2&e defendant is furt&er ordered to pa# t&e plaintiff attorne#'s fees in t&e amount of *351,111.11 plus costs to t&is suit. (p. 91, Rollo.) .pon a motion for reconsideration filed b# !$, t&e above dispositive part of t&e decision, "as modified b# t&e separate opinions of t&e Special Si:t& ;ivision 1 so t&at it s&ould read t&us? INC., petitioner, !"# SAN $IGUE

$n t&e lig&t of t&e foregoing anal#sis and under t&e plain language of t&e applicable rule and principle on t&e matter, @e find t&e defendant sia !re"er# $ncorporated GUILTY of infringement of trademark and unfair competition. 2&e decision of t&e trial court is &ereb# )(8()S(;, and a ne" Budgment entered in favor of t&e plaintiff and against t&e defendant as follo"s? (1) 2&e defendant sia !re"er# $nc., its officers, agents, servants and emplo#ees are &ereb# permanentl# enBoined and restrained from manufacturing, putting up, selling, advertising, offering or announcing for sale, or suppl#ing !eer *ale *ilsen, or an# similar preparation, manufacture or beer in bottles and under labels substantiall# identical "it& or li%e t&e said bottles and labels of plaintiff San Miguel Corporation emplo#ed for t&at purpose, or substantiall# identical "it& or li%e t&e bottles and labels no" emplo#ed b# t&e defendant for t&at purpose, or in bottles or under labels "&ic& are calculated to deceive purc&asers and consumers into t&e belief t&at t&e beer if t&e product of t&e plaintiff or "&ic& "ill enable ot&ers to substitute, sell or palm off t&e said beer of t&e defendant as and for t&e beer of t&e plaintiff7complainant. (3) 2&e defendant sia !re"er# $nc. is &ereb# ordered ( to recall all its products bearing t&e mar% !eer *ale *ilsen from its retailers and deliver t&ese as "ell as all labels, signs, prints, pac%ages, "rappers, receptacles and advertisements bearing t&e infringing mar% and all plates, molds, materials and ot&er means of ma%ing t&e same to t&e Court aut&ori>ed to e:ecute t&is Budgment for destruction. (0) 2&e defendant is &ereb# ordered to pa# plaintiff t&e sum of 2"o Million *esos (*3,111,111.11) as moral damages and =alf a Million *esos (*511,111.11) b# "a# of e:emplar# damages. (9) 2&e defendant is furt&er ordered to pa# t&e plaintiff attorne#'s fees in t&e amount of *351,111.11 plus costs of t&is suit. $n due time, !$ appealed to t&is Court b# a petition for certiorari under )ule 95 of t&e )ules of Court. 2&e lone issue in t&is appeal is "&et&er !$ infringes SMC's trademar%? San Miguel Pale Pilsen with Rectangular Hops and Malt esign , and t&ereb# commits unfair competition against t&e latter. $t is a factual issue (*&il. ,ut $ndustr# $nc. v. Standard !rands $nc., /5 SC) 545) and as a general rule, t&e findings of t&e Court of ppeals upon factual Duestions are conclusive and oug&t not to be disturbed b# us. =o"ever, t&ere are e:ceptions to t&is general rule, and t&e# are? (1) @&en t&e conclusion is grounded entirel# on speculation, surmises and conBecturesC (3) @&en t&e inference of t&e Court of ppeals from its findings of fact is manifestl# mista%en, absurd and impossibleC (0) @&ere t&ere is grave abuse of discretionC (9) @&en t&e Budgment misappre&ension of factsC is based on a

(5) @&en t&e appellate court, in ma%ing its findings, "ent be#ond t&e issues of t&e case, and t&e same are contrar# to t&e admissions of bot& t&e appellant and t&e appelleeC (/) @&en t&e findings of said court are contrar# to t&ose of t&e trial courtC (4) @&en t&e findings are "it&out citation of specific evidence on "&ic& t&e# are basedC (8) @&en t&e facts set fort& in t&e petition as "ell as in t&e petitioner's main and repl# briefs are not disputed b# t&e respondentsC and

(9) @&en t&e findings of facts of t&e Court of ppeals are premised on t&e absence of evidence and are contradicted on record. ()e#nolds *&ilippine Corporation vs. Court of ppeals, 1/9 SC) 331, 330 citing, Mendo>a vs. Court of ppeals, 15/ SC) 594C Manlapa> vs. Court of ppeals, 194 SC) 308C Saca# vs. Sandiganba#an, 193 SC) 590, /19C -uita vs. C , 109 SC) 54/C Casana#an vs. Court of ppeals, 198 SC) 000, 00/C also pe: $nvestment and <inancing Corp. vs. $ C, 1// SC) 958 Eciting 2olentino vs. ;e 5esus, 5/ SC) 1/4C Carolina $ndustries, $nc. vs. CMS Stoc% !ro%erage, $nc., 94 SC) 409C Manero vs. C , 113 SC) 814C and Moran, 5r. vs. C , 100 SC) 88F.) .nder an# of t&ese e:ceptions, t&e Court &as to revie" t&e evidence in order to arrive at t&e correct findings based on t&e record ()oman Cat&olic !is&op of Malolos, $nc. vs. $ C, 191 SC) 911, 931.) @&ere findings of t&e Court of ppeals and trial court are contrar# to eac& ot&er, t&e Supreme Court ma# scrutini>e t&e evidence on record. (Cru> vs. C , 139 SC) 333, 334.) 2&e present case is one of t&e e:ceptions because t&ere is no concurrence bet"een t&e trial court and t&e Court of ppeals on t&e lone factual issue of "&et&er !$, b# manufacturing and selling its !(() * +( *$+S(, in amber colored steinie bottles of 031 ml. capacit# "it& a "&ite painted rectangular label &as committed trademar% infringement and unfair competition against SMC. $nfringement of trademar% is a form of unfair competition (Clar%e vs. Manila Cand# Co., 0/ *&il. 111, 11/). Sec. 33 of )epublic ct ,o. 1//, ot&er"ise %no"n as t&e 2rademar% +a", defines "&at constitutes infringement? Sec. 33. Infringement! what constitutes. G n# person "&o s&all use, "it&out t&e consent of t&e registrant, an# reproduction, counterfeit, cop# or colorable imitation of an# registered mar% or trade7 name in connection "it& t&e sale, offering for sale, or advertising of an# goods, business or services on or in connection "it& "&ic& suc& use is li%el# to cause confusion or mista%e or to deceive purc&asers or ot&ers as to t&e source or origin of suc& goods or services, or identit# of suc& businessC or reproduce, counterfeit, cop# or colorabl# imitate an# suc& mar% or trade7name and appl# suc& reproduction, counterfeit, cop#, or colorable imitation to labels, signs, prints, pac%ages, "rappers, receptacles or advertisements intended to be used upon or in connection "it& suc& goods, business or services, s&all be liable to a civil action b# t&e registrant for an# or all of t&e remedies &erein provided. ((mp&asis supplied.) 2&is definition implies t&at onl# registered trade mar%s, trade names and service mar%s are protected against infringement or unaut&ori>ed use b# anot&er or ot&ers. 2&e use of someone else's registered trademar%, trade name or service mar% is unaut&ori>ed, &ence, actionable, if it is done 6"it&out t&e consent of t&e registrant.6 (I"id.) 2&e registered trademar% of SMC for its pale pilsen beer is? San Miguel Pale Pilsen #ith Rectangular Hops and Malt esign$ (*&ilippine !ureau of *atents, 2rademar%s and 2ec&nolog# 2ransfer 2rademar% Certificate of )egistration ,o. 0/110, dated 30 Oct. 198/, (p. 149, Rollo.) s described b# t&e trial court in its decision (*age 144, Rollo)? . . . . a rectangular design EisF bordered b# "&at appears to be minute grains arranged in rows of three in which there appear in each corner hop designs. t t&e top is a p&rase "ritten in small print 6)eg. *&il. *at. Off.6 and at t&e bottom 6,et Contents? 031 Ml.6 2&e dominant feature is t&e p&rase 6San Miguel6 "ritten &ori>ontall# at t&e upper portion. !elo" are t&e "ords 6*ale *ilsen6 "ritten diagonall# across t&e middle of t&e rectangular design. $n bet"een is a coat of arms and t&e p&rase 6(:pertl# !re"ed.6 2&e 6S6 in 6San6 and t&e 6M6 of 6Miguel,6 6*6 of 6*ale6 and

6*ilsen6 are "ritten in -ot&ic letters "it& fine stro%es of serifs, t&e %ind t&at first appeared in t&e 1481s in (ngland and used for printing -erman as distinguis&ed from )oman and $talic. !elo" 6*ale *ilsen6 is t&e statement 6 nd !ottled b#6 (first line, 6San Miguel !re"er#6 (second line), and 6*&ilippines6 (t&ird line). (p. 144, RolloC (mp&asis supplied.) On t&e ot&er &and, consists of? !$'s trademar%, as described b# t&e trial court,

. . . a rectangular design bordered b# "&at appear to be "uds of flowers with lea%es. 2&e dominant feature is 6&eer6 "ritten across t&e upper portion of t&e rectangular design. 2&e p&rase 6*ale *ilsen6 appears immediatel# belo" in smaller bloc% letters. 2o t&e left is a &op design and to t&e rig&t, "ritten in small prints, is t&e p&rase 6,et Contents 031 ml.6 $mmediatel# belo" 6*ale *ilsen6 is t&e statement "ritten in t&ree lines 6(speciall# bre"ed and bottled b#6 (first line), 6 sia !re"er# $ncorporated6 (second line), and 6*&ilippines6 (t&ird line), (p. 144, RolloC (mp&asis supplied.) ;oes !$'s !(() * +( *$+S(, label or 6design6 infringe upon SMC's S , M$-.(+ * +( *$+S(, @$2= )(C2 ,-.+ ) M +2 ,; =O*S ;(S$-,H 2&e ans"er is 6,o.6 $nfringement is determined b# t&e 6test of dominanc#6 rat&er t&an b# differences or variations in t&e details of one trademar% and of anot&er. 2&e rule "as formulated in 'o Tiong Sa %s$ irector of Patents! 95 *&il. 1, 9 (1959)C reiterated in Lim Hoa %s$ irector of Patents, 111 *&il. 319, 31/7314 (195/), t&us? $t &as been consistentl# &eld t&at t&e Duestion of infringement of a trademar% is to be determined b# t&e test of dominanc(. Similarit# in si>e, form and color, "&ile relevant, is not conclusive. $f t&e competing trademar% contains t&e main or essential or dominant features of anot&er, and confusion and deception is li%el# to result, infringement ta%es place. ;uplication or imitation is not necessar#C nor it is necessar# t&at t&e infringing label s&ould suggest an effort to imitate. EC. ,eilman !re"ing Co. vs. $ndependent !re"ing Co., 191 <., 989, 995, citing (agle @&ite +ead Co., vs. *flug& (CC) 181 <ed. 549F. 2&e Duestion at issue in cases of infringement of trademar%s is "&et&er t&e use of t&e mar%s involved "ould be li%el# to cause confusion or mistakes in the mind of the pu"lic or decei%e purchasers . ( uburn )ubber Corporation vs. =onover )ubber Co., 114 <. 3d 588C . . . .) ((mp&asis supplied.) $n )or"es! Munn * 'o$ +Ltd$, %s$ -ng San To , 91 *&il. 343, 345, t&e test "as similarit# or 6resemblance bet"een t&e t"o (trademar%s) suc& as "ould be li%el# to cause t&e one mar% to be mista%en for t&e ot&er. . . . E!utF t&is is not suc& similitude as amounts to identit#.6 In Phil$ .ut Industr( Inc$ %s$ Standard &rands Inc$ , /5 SC) 545, t&e court "as more specific? t&e test is 6similarit# in t&e dominant features of t&e trademar%s.6 @&at are t&e dominant features of t&e competing trademar%s before usH 2&ere is &ardl# an# dispute t&at t&e dominant feature of SMC's trademar% is t&e name of t&e product? S , M$-.(+ * +( *$+S(,, "ritten in "&ite -ot&ic letters "it& elaborate serifs at t&e beginning and end of t&e letters 6S6 and 6M6 on an amber bac%ground across t&e upper portion of t&e rectangular design. On t&e ot&er &and, t&e dominant feature of !$'s trademar% is t&e name? !(() * +( *$+S(,, "it& t&e "ord 6!eer6 "ritten in large amber letters, larger t&an an# of t&e letters found in t&e SMC label. 2&e trial court perceptivel# observed t&at t&e "ord 6!(()6 does not appear in SMC's trademar%, Bust as t&e "ords 6S , M$-.(+6 do not appear in !$'s trademar%. =ence, t&ere is absolutel# no similarit# in t&e dominant features of bot& trademar%s. ,eit&er in sound, spelling or appearance can !(() * +( *$+S(, be said to be confusingl# similar to S , M$-.(+ * +( *$+S(,. ,o one "&o purc&ases !(() * +( *$+S(, can possibl# be deceived t&at it

is S , M$-.(+ * +( *$+S(,. ,o evidence "&atsoever "as presented b# SMC proving ot&er"ise. !esides t&e dissimilarit# in t&eir names, t&e follo"ing ot&er dissimilarities in t&e trade dress or appearance of t&e competing products abound? (1) 2&e S , M$-.(+ * +( *$+S(, bottle &as a slender tapered nec%. 2&e !(() * +( *$+S(, bottle &as a fat, bulging nec%. (3) 2&e "ords 6pale pilsen6 on SMC's label are printed in bold and laced letters along a diagonal band, "&ereas t&e "ords 6pale pilsen6 on !$'s bottle are &alf t&e si>e and printed in slender bloc% letters on a straig&t hori/ontalband. (See (:&ibit 687a6.). (0) 2&e names of t&e manufacturers are prominentl# printed on t&eir respective bottles. S , M$-.(+ * +( *$+S(, is 6!ottled b# t&e San Miguel !re"er#, *&ilippines,6 "&ereas !(() * +( *$+S(, is 6(speciall# bre"ed and bottled b# sia !re"er# $ncorporated, *&ilippines.6 (9) On t&e bac% of !$'s bottle is printed in big, bold letters, under a ro" of flo"er buds and leaves, its cop#rig&ted slogan? 6!(() , !(()I6 @&ereas SMC's bottle carries no slogan. (5) 2&e bac% of t&e S , M$-.(+ * +( *$+S(, bottle carries t&e SMC logo, "&ereas t&e !(() * +( *$+S(, bottle &as no logo. (/) 2&e S , M$-.(+ * +( *$+S(, bottle cap is stamped "it& a coat of arms and t&e "ords 6San Miguel !re"er# *&ilippines6 encircling t&e same. 2&e !(() * +( *$+S(, bottle cap is stamped "it& t&e name 6!(()6 in t&e center, surrounded b# t&e "ords 6 sia !re"er# $ncorporated *&ilippines.6 (4) <inall#, t&ere is a substantial price difference bet"een !(() * +( *$+S(, (currentl# at *9.35 per bottle) and S , M$-.(+ * +( *$+S(, (currentl# at *4.11 per bottle). One "&o pa#s onl# *9.35 for a bottle of beer cannot e:pect to receive San Miguel *ale *ilsen from t&e store%eeper or bartender. 2&e fact t&at t&e "ords pale pilsen are part of !$'s trademar% does not constitute an infringement of SMC's trademar%? S , M$-.(+ * +( *$+S(,, for 6pale pilsen6 are generic "ords descriptive of t&e color (6pale6), of a t#pe of beer (6pilsen6), "&ic& is a lig&t bo&emian beer "it& a strong &ops flavor t&at originated in t&e Cit# of *ilsen in C>ec&oslova%ia and became famous in t&e Middle ges. (@ebster's 2&ird ,e" $nternational ;ictionar# of t&e (nglis& +anguage, .nabridged. (dited b# *&ilip !abcoc% -ove. Springfield, Mass.? - J C Merriam Co., EcF 194/, page 141/.) 6*ilsen6 is a 6primaril# geograp&icall# descriptive "ord,6 (Sec. 9, subpar. EeF )epublic ct ,o. 1//, as inserted b# Sec. 3 of ). . ,o. /08) &ence, non7registerable and not appropriable b# an# beer manufacturer. 2&e 2rademar% +a" provides? Sec. 9. . . .. 2&e o"ner of trade7mar%, trade7name or service7mar% used to distinguis& &is goods, business or services from t&e goods, business or services of ot&ers s&all &ave t&e rig&t to register t&e same Eon t&e principal registerF, unless it? ::: ::: ::: (e) Consists of a mar% or trade7name "&ic&, "&en applied to or used in connection "it& t&e goods, business or services of t&e applicant is merel( descripti%e or decepti%el( misdescripti%e of them , or "&en applied to or used in connection "it& t&e goods, business or services of t&e applicant isprimaril( geographicall( descripti%e or deceptivel# misdescriptive of t&em, or is primaril# merel# a surname.6 ((mp&asis supplied.) 2&e "ords 6pale pilsen6 ma# not be appropriated b# SMC for its e:clusive use even if t&e# are part of its registered trademar%? S ,

M$-.(+ * +( *$+S(,, an# more t&an suc& descriptive "ords as 6evaporated mil%,6 6tomato %etc&up,6 6c&eddar c&eese,6 6corn fla%es6 and 6coo%ing oil6 ma# be appropriated b# an# single manufacturer of t&ese food products, for no ot&er reason t&an t&at &e "as t&e first to use t&em in &is registered trademar%. $n Masso Hermanos! S$-$ %s$ irector of Patents, 99 *&il. 10/, 109 (1950), it "as &eld t&at a dealer in s&oes cannot register 6+eat&er S&oes6 as &is trademar% because t&at "ould be merel# descriptive and it "ould be unBust to deprive ot&er dealers in leat&er s&oes of t&e rig&t to use t&e same "ords "it& reference to t&eir merc&andise. ,o one ma# appropriate generic or descriptive "ords. 2&e# belong to t&e public domain (Ong i -ui vs. ;irector of *atents, 9/ *&il. /40, /4/ E1955F)? "ord or a combination of "ords "&ic& is merel# descriptive of an article of trade, or of its composition, c&aracteristics, or Dualities, cannot be appropriated and protected as a trademar% to t&e e:clusion of its use b# ot&ers. . . . inasmuc& as all persons &ave an eDual rig&t to produce and vend similar articles, t&e# also &ave t&e rig&t to describe t&em properl# and to use an# appropriate language or "ords for t&at purpose, and no person can appropriate to himself e0clusi%el( an( word or e0pression! properl( descripti%e of the article! its 1ualities! ingredients or characteristics , and t&us limit ot&er persons in t&e use of language appropriate to t&e description of t&eir manufactures, the right to the use of such language "eing common to all. 2&is rule e:cluding descriptive terms &as also been &eld to appl# to trade7names. s to "&et&er "ords emplo#ed fall "it&in t&is pro&ibition, it is said t&at t&e true test is not "&et&er t&e# are e:&austivel# descriptive of t&e article designated, but "&et&er in t&emselves, and as t&e# are commonl# used b# t&ose "&o understand t&eir meaning, t&e# are reasonabl# indicative and descriptive of t&e t&ing intended. $f t&e# are t&us descriptive, and not arbitrar#, t&e# cannot be appropriated from general use and become t&e e:clusive propert# of an#one. (53 m. 5ur. 5937590.) . . . . Ot&ers ma# use t&e same or similar descriptive "ord in connection "it& t&eir o"n "ares, provided t&e# ta%e proper steps to prevent t&e public being deceived. ()ic&mond )emedies Co. vs. ;r. Miles Medical Co., 1/ (. E3dF 598.) . . . . descriptive "ord ma# be admittedl# distinctive, especiall# if t&e user is t&e first creator of t&e article. $t "ill, &o"ever, be denied protection, not because it lac%s distinctiveness, but rat&er because ot&ers are eDuall# entitled to its use. (3 Callman. .nfair Competition and 2rademar%s, pp. 8/97841.)6 ((mp&asis supplied.) 2&e circumstance t&at t&e manufacturer of !(() * +( *$+S(,, sia !re"er# $ncorporated, &as printed its name all over t&e bottle of its beer product? on t&e label, on t&e bac% of t&e bottle, as "ell as on t&e bottle cap, disproves SMC's c&arge t&at !$ dis&onestl# and fraudulentl# intends to palm off its !(() * +( *$+S(, as SMC's product. $n vie" of t&e visible differences bet"een t&e t"o products, t&e Court believes it is Duite unli%el# t&at a customer of average intelligence "ould mista%e a bottle of !(() * +( *$+S(, for S , M$-.(+ * +( *$+S(,. 2&e fact t&at !(() * +( *$+S(, li%e S , M$-.(+ * +( *$+S(, is bottled in amber7colored steinie bottles of 031 ml. capacit# and is also advertised in print, broadcast, and television media, does not necessaril# constitute unfair competition. .nfair competition is t&e emplo#ment of deception or an# ot&er means contrar# to good fait& b# "&ic& a person s&all pass off t&e goods manufactured b# &im or in "&ic& &e deals, or &is business, or services, for t&ose of anot&er "&o &as alread# establis&ed good"ill for &is similar goods, business or services, or an# acts calculated to produce t&e same result. (Sec. 39, )epublic ct ,o. 1//, as amended.) 2&e la" furt&er enumerates t&e more common "a#s of committing unfair competition, t&us? Sec. 39. . . . $n particular, and "it&out in an# "a# limiting t&e scope of unfair competition, t&e follo"ing s&all be deemed guilt# of unfair competition?

(a) n# person, "&o in selling &is goods s&all give t&em t&e general appearance of goods of anot&er manufacturer or dealer, eit&er as to t&e goods t&emselves or in t&e "rapping of t&e pac%ages in "&ic& t&e# are contained, or t&e devices or "ords t&ereon, or in an# ot&er feature of t&eir appearance, "&ic& "ould be li%el# to influence purc&asers to believe t&at t&e goods offered are t&ose of a manufacturer or dealer ot&er t&an t&e actual manufacturer or dealer, or "&o ot&er"ise clot&es t&e goods "it& suc& appearance as s&all deceive t&e public and defraud anot&er of &is legitimate trade, or an# subseDuent vendor of suc& goods or an# agent of an# vendor engaged in selling suc& goods "it& a li%e purpose. (b) n# person "&o b# an# artifice, or device, or "&o emplo#s an# ot&er means calculated to induce t&e false belief t&at suc& person is offering t&e services of anot&er "&o &as identified suc& services in t&e mind of t&e publicC or (c) n# person "&o s&all ma%e an# false statement in t&e course of trade or "&o s&all commit an# ot&er act contrar# to good fait& of a nature calculated to discredit t&e goods, business or services of anot&er. $n t&is case, t&e Duestion to be determined is "&et&er !$ is using a name or mar% for its beer t&at &as previousl# come to designate SMC's beer, or "&et&er !$ is passing off its !(() * +( *$+S(, as SMC's S , M$-.(+ * +( *$+S(,. . . ..2&e universal test Duestion is "&et&er t&e public is li%el# to be deceived. ,ot&ing less t&an conduct tending to pass off one man's goods or business as t&at of anot&er "ill constitute unfair competition. ctual or probable deception and confusion on t&e part of t&e customers b# reason of defendant's practices must al"a#s appear. (S&ell Co., of t&e *&ilippines, +td. vs. $nsular *etroleum )efining Co. +td. et al., 131 *&il. 909, 909.) 2&e use of !$ of t&e steinie bottle, similar but not identical to t&e S , M$-.(+ * +( *$+S(, bottle, is not unla"ful. s pointed out b# !$'s counsel, SMC did not invent but merel# borro"ed t&e steinie bottle from abroad and it claims neit&er patent nor trademar% protection for t&at bottle s&ape and design. (See rollo, page 55.) 2&e Cerve>a (special and t&e (fes *ale *ilsen use t&e 6steinie6 bottle. (See (:&ibits 547;, 547(.) 2&e trial court found no infringement of SMC's bottle G 2&e court agrees "it& defendant t&at t&ere is no infringement of plaintiff's bottle, firstl#, because according to plaintiff's "itness ;eogracias 8illadolid, it is a standard t#pe of bottle called steinie, and to "itness 5ose ntonio -arcia, it is not a San Miguel Corporation design but a design originall# developed in t&e .nited States b# t&e -lass Container Manufacturer's $nstitute and t&erefore lac%s e:clusivit#. Secondl#, t&e s&ape "as never registered as a trademar%. (:&ibit 6C6 is not a registration of a beer bottle design reDuired under )ep. ct 1/5 but t&e registration of t&e name and ot&er mar%s of o"ners&ip stamped on containers as reDuired b# )ep. ct /30. 2&irdl#, t&e nec% of defendant's bottle is muc& larger and &as a distinct bulge in its uppermost part. (p. 18/, Rollo.) 2&e petitioner's contention t&at bottle si>e, s&ape and color ma# not be t&e e:clusive propert# of an# one beer manufacturer is "ell ta%en. SMC's being t&e first to use t&e steinie bottle does not give SMC a vested rig&t to use it to t&e e:clusion of ever#one else. !eing of functional or common use, and not t&e e:clusive invention of an# one, it is available to all "&o mig&t need to use it "it&in t&e industr#. ,obod# can acDuire an# e:clusive rig&t to mar%et articles suppl#ing simple &uman needs in containers or "rappers of t&e general form, si>e and c&aracter commonl# and immediatel# used in mar%eting suc& articles (;# !uncio vs. 2an 2iao !o%, 93 *&il. 191, 1997195.) . . . protection against imitation s&ould be properl# confined to nonfunctional features. (ven if purel# functional elements are slavis&l# copied, t&e resemblance "ill not support an action for unfair competition, and t&e first user cannot claim

secondar# meaning protection. ,or can t&e first user predicate &is claim to protection on t&e argument t&at &is business "as establis&ed in reliance on an# suc& unpatented nonfunctional feature, even 6at large e:penditure of mone#.6 (Callman .nfair Competition, 2rademar%s and Monopolies, Sec. 19.00 E9t& (d.F.) (*etition for )evie", p. 38.) !$ does not use SMC's steinie bottle. ,eit&er did !$ cop# it. !$ ma%es its o"n steinie bottle "&ic& &as a fat bulging nec% to differentiate it from SMC's bottle. 2&e amber color is a functional feature of t&e beer bottle. s pointed out b# !$, all bottled beer produced in t&e *&ilippines is contained and sold in amber7colored bottles because amber is t&e most effective color in preventing transmission of lig&t and provides t&e ma:imum protection to beer. s "as ruled in 'alifornia 'rushed )ruit 'orporation %s$ Ta(lor &$ and 'and( 'o., 08 <3d 885, a merc&ant cannot be enBoined from using a t#pe or color of bottle "&ere t&e same &as t&e useful purpose of protecting t&e contents from t&e deleterious effects of lig&t ra#s. Moreover, no one ma# &ave a monopol# of an# color. ,ot onl# beer, but most medicines, "&et&er in liDuid or tablet form, are sold in amber7 colored bottles. 2&at t&e !$ bottle &as a 031 ml. capacit# is not due to a desire to imitate SMC's bottle because t&at bottle capacit# is t&e standard prescribed under Metrication Circular ,o. 448, dated 9 ;ecember 1949, of t&e ;epartment of 2rade, Metric S#stem !oard. @it& regard to t&e "&ite label of bot& beer bottles, !$ e:plained t&at it used t&e color "&ite for its label because "&ite presents t&e strongest contrast to t&e amber color of !$'s bottleC it is also t&e most economical to use on labels, and t&e easiest to 6ba%e6 in t&e furnace (p. 1/, 2S, of September 31, 1988). ,o one can &ave a monopol# of t&e color amber for bottles, nor of "&ite for labels, nor of t&e rectangular s&ape "&ic& is t&e usual configuration of labels. ,eedless to sa#, t&e s&ape of t&e bottle and of t&e label is unimportant. @&at is all important is t&e name of t&e product "ritten on t&e label of t&e bottle for t&at is &o" one beer ma# be distinguis&ed form t&e ot&ers. $n ( &uncio %$ Tan Tiao &ok, 93 *&il. 191, 19/7194, "&ere t"o competing tea products "ere bot& labelled as <ormosan tea, bot& sold in 57ounce pac%ages made of ordinar# "rapping paper of conventional color, bot& "it& labels containing designs dra"n in green in% and C&inese c&aracters "ritten in red in%, one label s&o"ing a double7 dec%ed Bar in t&e center, t&e ot&er, a flo"er pot, t&is court found t&at t&e resemblances bet"een t&e designs "ere not sufficient to mislead t&e ordinar# intelligent bu#er, &ence, t&ere "as no unfair competition. 2&e Court &eld? . . . . $n order t&at t&ere ma# be deception of t&e bu#ing public in t&e sense necessar# to constitute unfair competition, it is necessar# to suppose a public accustomed to bu#, and t&erefore to some e:tent familiar "it&, t&e goods in Duestion. 2&e test of fraudulent simulation is to be found in t&e li%eli&ood of t&e deception of persons in some measure acDuainted "it& an establis&ed design and desirous of purc&asing t&e commodit# "it& "&ic& t&at design &as been associated. 2&e test is not found in t&e deception, or possibilit# of t&e deception, of t&e person "&o %no"s not&ing about t&e design "&ic& &as been counterfeited, and "&o must be indifferent as bet"een t&at and t&e ot&er. 2&e simulation, in order to be obBectionable, must be suc& as appears li%el# to mislead t&e ordinaril# intelligent bu#er "&o &as a need to suppl# and is familiar "it& t&e article t&at &e see%s to purc&ase. 2&e main t&rust of SMC's complaint if not infringement of its trademar%, but unfair competition arising form t&e allegedl# 6confusing similarit#6 in t&e general appearance or trade dress of !$'s !(() * +( *$+S(, beside SMC's S , M$-.(+ * +( *$+S(, (p. 319, Rollo) SMC claims t&at t&e 6trade dress6 of !(() * +( *$+S(, is 6confusingl# similar6 to its S , M$-.(+ * +( *$+S(, because bot& are bottled in 031 ml. steinie t#pe, amber7colored bottles "it& "&ite rectangular labels. =o"ever, "&en as in t&is case, t&e names of t&e competing products are clearl# different and t&eir respective sources are prominentl# printed on t&e label and on ot&er parts of t&e bottle, mere similarit# in t&e s&ape and si>e of t&e container and label, does not constitute unfair competition. 2&e steinie bottle is a standard bottle for beer and is universall# used. SMC did not invent it nor patent it. 2&e fact t&at SMC's bottle is registered under ). . ,o. /30 (as amended b# ) 5411, n ct to )egulate t&e .se of ;ul# Stamped or Mar%ed !ottles,

!o:es, Cas%s, Kegs, !arrels and Ot&er Similar Containers) simpl# pro&ibits manufacturers of ot&er foodstuffs from t&e unaut&ori>ed use of SMC's bottles b# refilling t&ese "it& t&eir products. $t "as not uncommon t&en for products suc& as patis (fis& sauce) and to(o (so# sauce) to be sold in rec#cled S , M$-.(+ * +( *$+S(, bottles. )egistration of SMC's beer bottles did not give SMC a patent on t&e steinie or on bottles of similar si>e, s&ape or color. Most containers are standardi>ed because t&e# are usuall# made b# t&e same manufacturer. Mil%, "&et&er in po"dered or liDuid form, is sold in uniform tin cans. 2&e same can be said of t&e standard %etc&up or vinegar bottle "it& its familiar elongated nec%. Man# ot&er grocer# items suc& as coffee, ma#onnaise, pic%les and peanut butter are sold in standard glass Bars. 2&e manufacturers of t&ese foodstuffs &ave eDual rig&t to use t&ese standards tins, bottles and Bars for t&eir products. Onl# t&eir respective labels distinguis& t&em from eac& ot&er. 5ust as no mil% producer ma# sue t&e ot&ers for unfair competition because t&e# sell t&eir mil% in t&e same si>e and s&ape of mil% can "&ic& &e uses, neit&er ma# SMC claim unfair competition arising from t&e fact t&at !$'s !(() * +( *$+S(, is sold, li%e SMC's S , M$-.(+ * +( *$+S(, in amber steinie bottles. 2&e record does not bear out SMC's appre&ension t&at !(() * +( *$+S(, is being passed off as S , M$-.(+ * +( *$+S(,. 2&is is unli%el# to &appen for consumers or bu#ers of beer generall# order t&eir beer b# brand. s pointed out b# !$'s counsel, in supermar%ets and tiendas, beer is ordered b# brand, and t&e customer surrenders &is empt# replacement bottles or pa#s a deposit to guarantee t&e return of t&e empties. $f &is empties are S , M$-.(+ * +( *$+S(,, &e "ill get S , M$-.(+ * +( *$+S(, as replacement. $n sari7sari stores, beer is also ordered from t&e tindera b# brand. 2&e same is true in restaurants, pubs and beer gardens G beer is ordered from t&e "aiters b# brand. (2p$ cit. page 51.) Considering furt&er t&at S , M$-.(+ * +( *$+S(, &as virtuall# monopoli>ed t&e domestic beer mar%et for t&e past &undred #ears, t&ose "&o &ave been drin%ing no ot&er beer but S , M$-.(+ * +( *$+S(, t&ese man# #ears certainl# %no" t&eir beer too "ell to be deceived b# a ne"comer in t&e mar%et. $f t&e# gravitate to !$'s c&eaper beer, it "ill not be because t&e# are confused or deceived, but because t&e# find t&e competing product to t&eir taste. Our decision in t&is case "ill not diminis& our ruling in 6;el Monte Corporation vs. Court of ppeals and Suns&ine Sauce Manufacturing $ndustries,6 181 SC) 911, 919, 3 t&at? . . . to determine "&et&er a trademar% &as been infringed, "e must consider t&e mar% as a "&ole and not as dissected. $f t&e bu#er is deceived, it is attributable to t&e mar%s as a totalit#, not usuall# to an# part of it. 2&at ruling ma# not appl# to all %inds of products. 2&e Court itself cautioned t&at in resolving cases of infringement and unfair competition, t&e courts s&ould 6ta%e into consideration several factors "&ic& "ould affect its conclusion, to "it? t&e age, training and education of t&e usual purc&aser, t&e nature and cost of t&e article, "&et&er t&e article is boug&t for immediate consumption and also t&e conditions under "&ic& it is usuall# purc&ased6 (181 SC) 911, 9187 919). 2&e ;el Monte case involved catsup, a common &ouse&old item "&ic& is boug&t off t&e store s&elves b# &ouse"ives and &ouse &elp "&o, if t&e# are illiterate and cannot identif# t&e product b# name or brand, "ould ver# li%el# identif# it b# mere recollection of its appearance. Since t&e competitor, Suns&ine Sauce Mfg. $ndustries, not onl# used rec#cled ;el Monte bottles for its catsup (despite t&e "arning embossed on t&e bottles? 6;el Monte Corporation. ,ot to be refilled.6) but also used labels "&ic& "ere 6a colorable imitation6 of ;el Monte's label, "e &eld t&at t&ere "as infringement of ;el Monte's trademar% and unfair competition b# Suns&ine. Our ruling in ;el Monte "ould not appl# to beer "&ic& is not usuall# pic%ed from a store s&elf but ordered b# brand b# t&e beer drin%er &imself from t&e store%eeper or "aiter in a pub or restaurant. Moreover, SMC's brand or trademar%? 6S , M$-.(+ * +( *$+S(,6 is not infringed b# !$'s mar%? 6!(() , !(()6 or 6!(() * +( *$+S(,.6 !$ ma%es its o"n bottle "it& a bulging nec% to differentiate it from SMC's bottle, and prints !$'s name in t&ree (0) places on said bottle (front, bac% and bottle cap) to prove t&at it &as no intention to pass of its 6!(()6 as 6S , M$-.(+.6 2&ere is no confusing similarit# bet"een t&e competing beers for t&e name of one is 6S , M$-.(+6 "&ile t&e competitor is plain 6!(()6

and t&e points of dissimilarit# bet"een t&e t"o outnumber t&eir points of similarit#. *etitioner !$ &as neit&er infringed SMC's trademar% nor committed unfair competition "it& t&e latter's S , M$-.(+ * +( *$+S(, product. @&ile its !(() * +( *$+S(, admittedl# competes "it& t&e latter in t&e open mar%et, t&at competition is neit&er unfair nor fraudulent. =ence, "e must den# SMC's pra#er to suppress it. @=()(<O)(, finding t&e petition for revie" meritorious, t&e same is &ereb# granted. 2&e decision and resolution of t&e Court of ppeals in C 7-.). C8 ,o. 38119 are &ereb# set aside and t&at of t&e trial court is )($,S2 2(; and <<$)M(;. Costs against t&e private respondent. SO O);()(;.