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G.R. No.

138900 September 20, 2005


LEVI STRAUSS & CO., & LEVI STRAUSS (PHILS.), INC.,
Petitioners,
vs.
CLINTON APPARELLE, INC., Respondent.
DECISION
Tinga, J.:
Before us is a petition for review on certiorari1 under Rule 45 of the
1997 Rules of Civil Procedure filed by Levi Strauss & Co. (LS & Co.)
and Levi Strauss (Philippines), Inc. (LSPI) assailing the Court of
Appeals Decision2 and Resolution3 respectively dated 21
December 1998 and 10 May 1999. The questioned Decision
granted respondents prayer for a writ of preliminary injunction in
its Petition4 and set aside the trial courts orders dated 15 May
19985 and 4 June 19986 which respectively granted petitioners
prayer for the issuance of a temporary restraining order (TRO) and
application for the issuance of a writ of preliminary injunction.
This case stemmed from the Complaint7 for Trademark
Infringement, Injunction and Damages filed by petitioners LS & Co.
and LSPI against respondent Clinton Apparelle, Inc.* (Clinton
Aparelle) together with an alternative defendant, Olympian
Garments, Inc. (Olympian Garments), before the Regional Trial
Court of Quezon City, Branch 90.8 The Complaint was docketed as
Civil Case No. Q-98-34252, entitled "Levi Strauss & Co. and Levi
Strauss (Phils.), Inc. v. Clinton Aparelle, Inc. and/or Olympian
Garments, Inc."
The Complaint alleged that LS & Co., a foreign corporation duly
organized and existing under the laws of the State of Delaware,
U.S.A., and engaged in the apparel business, is the owner by prior
adoption and use since 1986 of the internationally famous
"Dockers and Design" trademark. This ownership is evidenced by
its valid and existing registrations in various member countries of
the Paris Convention. In the Philippines, it has a Certificate of
Registration No. 46619 in the Principal Register for use of said

trademark on pants, shirts, blouses, skirts, shorts, sweatshirts and


jackets under Class 25.9
The "Dockers and Design" trademark was first used in the
Philippines in or about May 1988, by LSPI, a domestic corporation
engaged in the manufacture, sale and distribution of various
products bearing trademarks owned by LS & Co. To date, LSPI
continues to manufacture and sell Dockers Pants with the "Dockers
and Design" trademark.10
LS & Co. and LSPI further alleged that they discovered the
presence in the local market of jeans under the brand name
"Paddocks" using a device which is substantially, if not exactly,
similar to the "Dockers and Design" trademark owned by and
registered in the name of LS & Co., without its consent. Based on
their information and belief, they added, Clinton Apparelle
manufactured and continues to manufacture such "Paddocks"
jeans and other apparel.
However, since LS & Co. and LSPI are unsure if both, or just one of
impleaded defendants are behind the manufacture and sale of the
"Paddocks" jeans complained of, they brought this suit under
Section 13, Rule 311 of the 1997 Rules of Civil Procedure.12
The Complaint contained a prayer that reads as follows:
1. That upon the filing of this complaint, a temporary restraining
order be immediately issued restraining defendants, their officers,
employees, agents, representatives, dealers, retailers or assigns
from committing the acts herein complained of, and, specifically,
for the defendants, their officers, employees, agents,
representatives, dealers and retailers or assigns, to cease and
desist from manufacturing, distributing, selling, offering for sale,
advertising, or otherwise using denims, jeans or pants with the
design herein complained of as substantially, if not exactly similar,
to plaintiffs "Dockers and Design" trademark.
2. That after notice and hearing, and pending trial on the merits, a
writ of preliminary injunction be issued enjoining defendants, their
officers, employees, agents, dealers, retailers, or assigns from
manufacturing, distributing, selling, offering for sale, advertising,

jeans the design herein complained of as substantially, if not


exactly similar, to plaintiffs "Dockers and Design" trademark.
3. That after trial on the merits, judgment be rendered as follows:
a. Affirming and making permanent the writ of preliminary
injunction;
b. Ordering that all infringing jeans in the possession of either or
both defendants as the evidence may warrant, their officers,
employees, agents, retailers, dealers or assigns, be delivered to
the Honorable Court of plaintiffs, and be accordingly destroyed; 13
Acting on the prayer for the issuance of a TRO, the trial court
issued an Order14 setting it for hearing on 5 May 1998. On said
date, as respondent failed to appear despite notice and the other
defendant, Olympian Garments, had yet to be notified, the hearing
was re-scheduled on 14 May 1998.15
On 14 May 1998, neither Clinton Apparelle nor Olympian Garments
appeared. Clinton Apparelle claimed that it was not notified of such
hearing. Only Olympian Garments allegedly had been issued with
summons. Despite the absence of the defendants, the hearing on
the application for the issuance of a TRO continued. 16
The following day, the trial court issued an Order17 granting the
TRO applied for, the pertinent portions of which state:
Considering the absence of counsel/s for the defendant/s during
the summary hearing scheduled on May 5, 1998 and also during
the re-scheduled summary hearing held on May 14, 1998 set for
the purpose of determining whether or not a Temporary Restraining
Order shall be issued, this Court allowed the counsel for the
plaintiffs to present on May 14, 1998 their arguments/evidences in
support of their application. After hearing the arguments presented
by the counsel for the plaintiffs during the summary hearing, this
Court is of the considered and humble view that grave injustice
and irreparable injury to the plaintiffs would arise before the matter
of whether or not the application for the issuance of a Writ of
Preliminary Injunction can be heard, and that, in the interest of
justice, and in the meantime, a Temporary Restraining Order be
issued.

WHEREFORE, let this Temporary Restraining Order be issued


restraining the defendants, their officers, employees, agents,
representatives, dealers, retailers or assigns from committing the
acts complained of in the verified Complaint, and specifically, for
the defendants, their officers, employees, agents, representatives,
dealers and retailers or assigns, to cease and desist from
manufacturing, distributing, selling, offering for sale, advertising or
otherwise using denims, jeans or pants with the design complained
of in the verified Complaint as substantially, if not exactly similar,
to plaintiffs "Dockers and Design" trademark; until after the
application/prayer for the issuance of a Writ of Preliminary
Injunction is heard/resolved, or until further orders from this Court.
The hearing on the application for the issuance of a Writ of
Preliminary Injunction as embodied in the verified Complaint is set
on May 26, 1998 (Tuesday) at 2:00 P.M. which setting is
intransferable in character considering that the lifetime of this
Temporary Restraining Order is twenty (20) days from date
hereof.18
On 4 June 1998, the trial court issued another Order19 granting the
writ of preliminary injunction, to wit:
ORDER
This resolves the plaintiffs application or prayer for the issuance of
a writ of preliminary injunction as embodied in the verified
complaint in this case. Parenthetically, this Court earlier issued a
temporary restraining order. (see Order dated May 15, 1998; see
also Order dated May 26, 1998)
After a careful perusal of the contents of the pleadings and
documents on record insofar as they are pertinent to the issue
under consideration, this Court finds that at this point in time, the
plaintiffs appear to be entitled to the relief prayed for and this
Court is of the considered belief and humble view that, without
necessarily delving on the merits, the paramount interest of justice
will be better served if the status quo shall be maintained and that
an injunction bond of P2,500,000.00 appears to be in order. (see
Sections 3 and 4, Rule 58, 1997 Rules of Civil Procedure)

IN VIEW OF THE FOREGOING, the plaintiffs prayer for the issuance


of a writ of preliminary injunction is GRANTED. Accordingly, upon
the plaintiffs filing, within ten (10) days from their receipt hereof,
an injunction bond of P2,500,000.00 executed to the defendants to
the effect that the plaintiffs will pay all damages the defendants
may sustain by reason of this injunction in case the Court should
finally decide that the plaintiffs are not entitled thereto, let a writ of
preliminary injunction issue enjoining or restraining the
commission of the acts complained of in the verified Complaint in
this case, and specifically, for the defendants, their officers,
employees, agents, representatives, dealers and retailers or
assigns or persons acting in their behalf to cease and desist from
manufacturing, distributing, selling, offering for sale, advertising,
or otherwise using, denims, jeans or pants with the design
complained of in the verified Complaint in this case, which is
substantially, if not exactly, similar to plaintiffs "DOCKERS and
DESIGN" trademark or logo as covered by the Bureau of Patents,
Trademarks and Technology Transfer Certificate of Registration No.
46619, until after this case shall have been decided on the merits
and/or until further orders from this Court.20
The evidence considered by the trial court in granting injunctive
relief were as follows: (1) a certified true copy of the certificate of
trademark registration for "Dockers and Design"; (2) a pair of
DOCKERS pants bearing the "Dockers and Design" trademark; (3) a
pair of "Paddocks" pants bearing respondents assailed logo; (4)
the Trends MBL Survey Report purportedly proving that there was
confusing similarity between two marks; (5) the affidavit of one
Bernabe Alajar which recounted petitioners prior adoption, use
and registration of the "Dockers and Design" trademark; and (6)
the affidavit of one Mercedes Abad of Trends MBL, Inc. which
detailed the methodology and procedure used in their survey and
the results thereof.21
Clinton Apparelle thereafter filed a Motion to Dismiss22 and a
Motion for Reconsideration23 of the Order granting the writ of
preliminary injunction. Meantime, the trial court issued an Order24
approving the bond filed by petitioners.
On 22 June 1998, the trial court required 25 the parties to file their
"respective citation of authorities/ jurisprudence/Supreme Court
decisions" on whether or not the trial court may issue the writ of

preliminary injunction pending the resolution of the Motion for


Reconsideration and the Motion to Dismiss filed by respondent.
On 2 October 1998, the trial court denied Clinton Apparelles
Motion to Dismiss and Motion for Reconsideration in an Omnibus
Order,26 the pertinent portions of which provide:
After carefully going over the contents of the pleadings in relation
to pertinent portions of the records, this Court is of the considered
and humble view that:
On the first motion, the arguments raised in the plaintiffs
aforecited Consolidated Opposition appears to be meritorious. Be
that as it may, this Court would like to emphasize, among other
things, that the complaint states a cause of action as provided
under paragraphs 1 to 18 thereof.
On the second motion, the arguments raised in the plaintiffs
aforecited Consolidated Opposition likewise appear to be
impressed with merit. Besides, there appears to be no strong and
cogent reason to reconsider and set aside this Courts Order dated
June 4, 1998 as it has been shown so far that the trademark or
logo of defendants is substantially, if not exactly, similar to
plaintiffs "DOCKERS and DESIGN" trademark or logo as covered by
BPTTT Certificate of Registration No. 46619 even as the BPTTT
Certificate of Registration No. 49579 of Clinton Apparelle, Inc. is
only for the mark or word "PADDOCKS" (see Records, p. 377) In any
event, this Court had issued an Order dated June 18, 1998 for the
issuance of the writ of preliminary injunction after the plaintiffs
filed the required bond of P2,500,000.00.
IN VIEW OF THE FOREGOING, the aforecited Motion To Dismiss and
Motion For Reconsideration are both DENIED for lack of merit, and
accordingly, this Courts Order dated June 18, 1998 for the
issuance of the writ of preliminary injunction is REITERATED so the
writ of preliminary injunction could be implemented unless the
implementation thereof is restrained by the Honorable Court of
Appeals or Supreme Court.
The writ of preliminary injunction was thereafter issued on 8
October 1998.27

Thus, Clinton Apparelle filed with the Court of Appeals a Petition28


for certiorari, prohibition and mandamus with prayer for the
issuance of a temporary restraining order and/or writ of preliminary
injunction, assailing the orders of the trial court dated 15 May
1998, 4 June 1998 and 2 October 1998.
On 20 October 1998, the Court of Appeals issued a Resolution29
requiring herein petitioners to file their comment on the Petition
and at the same time issued the prayed-for temporary restraining
order.
The appellate court rendered on 21 December 1998 its now
assailed Decision granting Clinton Apparelles petition. The Court of
Appeals held that the trial court did not follow the procedure
required by law for the issuance of a temporary restraining order
as Clinton Apparelle was not duly notified of the date of the
summary hearing for its issuance. Thus, the Court of Appeals ruled
that the TRO had been improperly issued. 30
The Court of Appeals also held that the issuance of the writ of
preliminary injunction is questionable. In its opinion, herein
petitioners failed to sufficiently establish its material and
substantial right to have the writ issued. Secondly, the Court of
Appeals observed that the survey presented by petitioners to
support their contentions was commissioned by petitioners. The
Court of Appeals remarked that affidavits taken ex-parte are
generally considered to be inferior to testimony given in open
court. The appellate court also considered that the injury
petitioners have suffered or are currently suffering may be
compensated in terms of monetary consideration, if after trial, a
final judgment shall be rendered in their favor.31
In addition, the Court of Appeals strongly believed that the
implementation of the questioned writ would effectively shut down
respondents business, which in its opinion should not be
sanctioned. The Court of Appeals thus set aside the orders of the
trial court dated 15 May 1998 and 4 June 1998, respectively issuing
a temporary restraining order and granting the issuance of a writ of
preliminary injunction.
With the denial of their Motion for Reconsideration,32 petitioners
are now before this Court seeking a review of the appellate courts

Decision and Resolution. LS & Co. and LSPI claim that the Court of
Appeals committed serious error in: (1) disregarding the welldefined limits of the writ of certiorari that questions on the
sufficiency of evidence are not to be resolved in such a petition; (2)
in holding that there was no confusion between the two marks; (3)
in ruling that the erosion of petitioners trademark is not
protectable by injunction; (4) in ignoring the procedure previously
agreed on by the parties and which was adopted by the trial court;
and (5) in declaring that the preliminary injunction issued by the
trial court will lead to the closure of respondents business.
In its Comment,33 Clinton Apparelle maintains that only questions
of law may be raised in an appeal by certiorari under Rule 45 of the
Rules of Court. It asserts that the question of whether the Court of
Appeals erred in: (1) disregarding the survey evidence; (2) ruling
that there was no confusion between the two marks; and (c)
finding that the erosion of petitioners trademark may not be
protected by injunction, are issues not within the ambit of a
petition for review on certiorari under Rule 45. Clinton Apparelle
also contends that the Court of Appeals acted correctly when it
overturned the writ of preliminary injunction issued by the trial
court. It believes that the issued writ in effect disturbed the status
quo and disposed of the main case without trial.
There is no merit in the petition.
At issue is whether the issuance of the writ of preliminary
injunction by the trial court was proper and whether the Court of
Appeals erred in setting aside the orders of the trial court.
Section 1, Rule 58 of the Rules of Court defines a preliminary
injunction as an order granted at any stage of an action prior to the
judgment or final order requiring a party or a court, agency or a
person to refrain from a particular act or acts. Injunction is
accepted as the strong arm of equity or a transcendent remedy to
be used cautiously as it affects the respective rights of the parties,
and only upon full conviction on the part of the court of its extreme
necessity. An extraordinary remedy, injunction is designed to
preserve or maintain the status quo of things and is generally
availed of to prevent actual or threatened acts until the merits of
the case can be heard.34 It may be resorted to only by a litigant for
the preservation or protection of his rights or interests and for no
other purpose during the pendency of the principal action. 35 It is

resorted to only when there is a pressing necessity to avoid


injurious consequences, which cannot be remedied under any
standard compensation. The resolution of an application for a writ
of preliminary injunction rests upon the existence of an emergency
or of a special recourse before the main case can be heard in due
course of proceedings.36
Section 3, Rule 58, of the Rules of Court enumerates the grounds
for the issuance of a preliminary injunction:
SEC. 3. Grounds for issuance of preliminary injunction. A
preliminary injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission
or continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or
perpetually;
(b) That the commission, continuance, or non-performance of the
act or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or
is attempting to do, or is procuring or suffering to be done, some
act or acts probably in violation of the rights of the applicant
respecting the subject of the action or proceeding, and tending to
render the judgment ineffectual.
Under the cited provision, a clear and positive right especially
calling for judicial protection must be shown. Injunction is not a
remedy to protect or enforce contingent, abstract, or future rights;
it will not issue to protect a right not in esse and which may never
arise, or to restrain an act which does not give rise to a cause of
action. There must exist an actual right.37 There must be a patent
showing by the complaint that there exists a right to be protected
and that the acts against which the writ is to be directed are
violative of said right.38
There are generally two kinds of preliminary injunction: (1) a
prohibitory injunction which commands a party to refrain from
doing a particular act; and (2) a mandatory injunction which

commands the performance of some positive act to correct a


wrong in the past.39
The Court of Appeals did not err in reviewing proof adduced by
petitioners to support its application for the issuance of the writ.
While the matter of the issuance of a writ of preliminary injunction
is addressed to the sound discretion of the trial court, this
discretion must be exercised based upon the grounds and in the
manner provided by law. The exercise of discretion by the trial
court in injunctive matters is generally not interfered with save in
cases of manifest abuse.40 And to determine whether there was
abuse of discretion, a scrutiny must be made of the bases, if any,
considered by the trial court in granting injunctive relief. Be it
stressed that injunction is the strong arm of equity which must be
issued with great caution and deliberation, and only in cases of
great injury where there is no commensurate remedy in
damages.41
In the present case, we find that there was scant justification for
the issuance of the writ of preliminary injunction.
Petitioners anchor their legal right to "Dockers and Design"
trademark on the Certificate of Registration issued in their favor by
the Bureau of Patents, Trademarks and Technology Transfer. *
According to Section 138 of Republic Act No. 8293, 42 this Certificate
of Registration is prima facie evidence of the validity of the
registration, the registrants ownership of the mark and of the
exclusive right to use the same in connection with the goods or
services and those that are related thereto specified in the
certificate. Section 147.1 of said law likewise grants the owner of
the registered mark the exclusive right to prevent all third parties
not having the owners consent from using in the course of trade
identical or similar signs for goods or services which are identical
or similar to those in respect of which the trademark is registered if
such use results in a likelihood of confusion.
However, attention should be given to the fact that petitioners
registered trademark consists of two elements: (1) the word mark
"Dockers" and (2) the wing-shaped design or logo. Notably, there is
only one registration for both features of the trademark giving the
impression that the two should be considered as a single unit.
Clinton Apparelles trademark, on the other hand, uses the
"Paddocks" word mark on top of a logo which according to

petitioners is a slavish imitation of the "Dockers" design. The two


trademarks apparently differ in their word marks ("Dockers" and
"Paddocks"), but again according to petitioners, they employ
similar or identical logos. It could thus be said that respondent only
"appropriates" petitioners logo and not the word mark "Dockers";
it uses only a portion of the registered trademark and not the
whole.
Given the single registration of the trademark "Dockers and
Design" and considering that respondent only uses the assailed
device but a different word mark, the right to prevent the latter
from using the challenged "Paddocks" device is far from clear.
Stated otherwise, it is not evident whether the single registration of
the trademark "Dockers and Design" confers on the owner the
right to prevent the use of a fraction thereof in the course of trade.
It is also unclear whether the use without the owners consent of a
portion of a trademark registered in its entirety constitutes
material or substantial invasion of the owners right.
It is likewise not settled whether the wing-shaped logo, as opposed
to the word mark, is the dominant or central feature of petitioners
trademarkthe feature that prevails or is retained in the minds of
the publican imitation of which creates the likelihood of deceiving
the public and constitutes trademark infringement.43 In sum, there
are vital matters which have yet and may only be established
through a full-blown trial.
From the above discussion, we find that petitioners right to
injunctive relief has not been clearly and unmistakably
demonstrated. The right has yet to be determined. Petitioners also
failed to show proof that there is material and substantial invasion
of their right to warrant the issuance of an injunctive writ. Neither
were petitioners able to show any urgent and permanent necessity
for the writ to prevent serious damage.
Petitioners wish to impress upon the Court the urgent necessity for
injunctive relief, urging that the erosion or dilution of their
trademark is protectable. They assert that a trademark owner does
not have to wait until the mark loses its distinctiveness to obtain
injunctive relief, and that the mere use by an infringer of a
registered mark is already actionable even if he has not yet
profited thereby or has damaged the trademark owner.

Trademark dilution is the lessening of the capacity of a famous


mark to identify and distinguish goods or services, regardless of
the presence or absence of: (1) competition between the owner of
the famous mark and other parties; or (2) likelihood of confusion,
mistake or deception. Subject to the principles of equity, the owner
of a famous mark is entitled to an injunction "against another
persons commercial use in commerce of a mark or trade name, if
such use begins after the mark has become famous and causes
dilution of the distinctive quality of the mark." This is intended to
protect famous marks from subsequent uses that blur
distinctiveness of the mark or tarnish or disparage it. 44
Based on the foregoing, to be eligible for protection from dilution,
there has to be a finding that: (1) the trademark sought to be
protected is famous and distinctive; (2) the use by respondent of
"Paddocks and Design" began after the petitioners mark became
famous; and (3) such subsequent use defames petitioners mark. In
the case at bar, petitioners have yet to establish whether "Dockers
and Design" has acquired a strong degree of distinctiveness and
whether the other two elements are present for their cause to fall
within the ambit of the invoked protection. The Trends MBL Survey
Report which petitioners presented in a bid to establish that there
was confusing similarity between two marks is not sufficient proof
of any dilution that the trial court must enjoin.
The Court also finds that the trial courts order granting the writ did
not adequately detail the reasons for the grant, contrary to our
ruling in University of the Philippines v. Hon. Catungal Jr., 45 wherein
we held that:
The trial court must state its own findings of fact and cite particular
law to justify grant of preliminary injunction. Utmost care in this
regard is demanded.46
The trial court in granting the injunctive relief tersely ratiocinated
that "the plaintiffs appear to be entitled to the relief prayed for and
this Court is of the considered belief and humble view that, without
necessarily delving on the merits, the paramount interest of justice
will be better served if the status quo shall be maintained." Clearly,
this statement falls short of the requirement laid down by the
above-quoted case. Similarly, in Developers Group of Companies,
Inc. v. Court of Appeals,47 we held that it was "not enough" for the
trial court, in its order granting the writ, to simply say that it

appeared "after hearing that plaintiff is entitled to the relief prayed


for."
In addition, we agree with the Court of Appeals in its holding that
the damages the petitioners had suffered or continue to suffer may
be compensated in terms of monetary consideration. As held in
Government Service Insurance System v. Florendo:48
a writ of injunction should never have been issued when an
action for damages would adequately compensate the injuries
caused. The very foundation of the jurisdiction to issue the writ of
injunction rests in the probability of irreparable injury, inadequacy
of pecuniary estimation and the prevention of the multiplicity of
suits, and where facts are not shown to bring the case within these
conditions, the relief of injunction should be refused. 49
We also believe that the issued injunctive writ, if allowed, would
dispose of the case on the merits as it would effectively enjoin the
use of the "Paddocks" device without proof that there is basis for
such action. The prevailing rule is that courts should avoid issuing
a writ of preliminary injunction that would in effect dispose of the
main case without trial.50 There would be a prejudgment of the
main case and a reversal of the rule on the burden of proof since it
would assume the proposition which petitioners are inceptively
bound to prove.51
Parenthetically, we find no flaw in the Court of Appeals disquisition
on the consequences of the issued injunction. An exercise of
caution, we believe that such reflection is necessary to weigh the
alleged entitlement to the writ vis--vis its possible effects. The
injunction issued in the instant case is of a serious nature as it
tends to do more than to maintain the status quo. In fact, the
assailed injunction if sustained would bring about the result desired
by petitioners without a trial on the merits.
Then again, we believe the Court of Appeals overstepped its
authority when it declared that the "alleged similarity as to the two
logos is hardly confusing to the public." The only issue brought
before the Court of Appeals through respondents Petition under
Rule 65 of the Rules of Court involved the grave abuse of discretion
allegedly committed by the trial court in granting the TRO and the
writ of preliminary injunction. The appellate court in making such a

statement went beyond that issue and touched on the merits of


the infringement case, which remains to be decided by the trial
court. In our view, it was premature for the Court of Appeals to
declare that there is no confusion between the two devices or
logos. That matter remains to be decided on by the trial court.
Finally, we have no contention against the procedure adopted by
the trial court in resolving the application for an injunctive writ and
we believe that respondent was accorded due process. Due
process, in essence, is simply an opportunity to be heard. And in
applications for preliminary injunction, the requirement of hearing
and prior notice before injunction may issue has been relaxed to
the point that not all petitions for preliminary injunction must
undergo a trial-type hearing, it being a hornbook doctrine that a
formal or trial-type hearing is not at all times and in all instances
essential to due process. Due process simply means giving every
contending party the opportunity to be heard and the court to
consider every piece of evidence presented in their favor.
Accordingly, this Court has in the case of Co v. Calimag, Jr.,52
rejected a claim of denial of due process where such claimant was
given the opportunity to be heard, having submitted his counteraffidavit and memorandum in support of his position.53
After a careful consideration of the facts and arguments of the
parties, the Court finds that petitioners did not adequately prove
their entitlement to the injunctive writ. In the absence of proof of a
legal right and the injury sustained by the applicant, an order of
the trial court granting the issuance of an injunctive writ will be set
aside for having been issued with grave abuse of discretion. 54
Conformably, the Court of Appeals was correct in setting aside the
assailed orders of the trial court.
WHEREFORE, the instant petition is DENIED. The Decision of the
Court of Appeals dated 21 December 1998 and its Resolution dated
10 May 1999 are AFFIRMED. Costs against petitioners.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:

REYNATO S. PUNO

Footnotes

Associate Justice

Chairman

MA. ALICIA AUSTRIA-MARTINEZ, ROMEO J. CALLEJO, SR.


Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the
opinion of the Courts Division.

Rollo, pp. 26-91; Dated 6 July 1999.

Id. at 93-101; Penned by Associate Justice Eloy R. Bello, Jr.


and concurred in by Associate Justices Salome A. Montoya
and Ruben T. Reyes.
Id. at 103.

Id. at 104-142.

RTC Records, p. 79.

CA Rollo, p. 42.

RTC Records, pp. 1-9; Dated 29 April 1998.

It calls itself Clinton Apparel, Inc.

REYNATO S. PUNO

The case was filed on 30 April 1998; Rollo, pp. 41, 94.

Associate Justice
Chairman, Second Division

Rollo, pp. 29-31.


Id. at 41-42.

10

CERTIFICATION
SEC. 13. Alternative defendants. Where the plaintiff is
uncertain against who of several persons he is entitled to
relief, he may join any or all of them as defendants in the
alternative, although a right to relief against one may be
inconsistent with a right of relief against the other.
11

Pursuant to Section 13, Article VIII of the Constitution, and the


Division Chairmans Attestation, it is hereby certified that the
conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the
opinion of the Courts Division.

Rollo, p. 94.

12

HILARIO G. DAVIDE, JR.


RTC Records, pp. 7-8.

13

Chief Justice
Rollo, p. 378; Dated 4 May 1998.

14

Id. at 727-728.

15

Id. at 95, 678.

16

RTC Records, p. 79.

17

Ibid.

18

RTC Records, p. 417.

Toyota Motor Phils. Corporation Workers Association


(TMPCWA) v. Court of Appeals, G.R. No. 148924, 24
September 2003, 412 SCRA 69, 85-86.
34

Id.; Government Service Insurance System v. Florendo,


G.R. No. 48603, 29 September 1989, 178 SCRA 76, 83-84.
35

19

Ibid.

20

Toyota Motor Phils. Corporation Workers Association


(TMPCWA) v. Court of Appeals; id. at 85-86.
36

Rollo, pp. 749-750.

Republic of the Philippines v. Judge Villarama, Jr., 344 Phil.


288, 302-303 (1997).

RTC Records, 418-424; Dated 5 June 1998.

38

37
21

22

CA Rollo, pp. 66-71; Dated 5 June 1998.

23

Government Service Insurance System v. Florendo, supra


note 35; National Power Corporation v. Vera, G.R. No.
83558, 27 February 1989, 170 SCRA 721, 727.

RTC Records, p. 494; Dated 18 June 1998.

39

In an Order of even date; Id. at 495.

40

24

25

Herrera, Oscar M., Remedial Law (1999 Edition) 71.

Government Service Insurance System v. Florendo, supra


note 35 at 89.

Id. at 576.

26

University of the Philippines v. Hon. Catungal, Jr., 338 Phil.


728, 743 (1997).
41

Id. at 577.

27

CA Rollo, pp. 2-40; Dated 12 October 1998.

28

Id. at 117-118.

29

Rollo, p. 98.

Now called Intellectual Property Office.

Otherwise known as the "Intellectual Property Code of the


Philippines."
42

30

Id. at 99-100.

31

See Co Tiong Sa v. Director of Patents, 95 Phil. 1, 5


(1954).
43

Toys "R" Us v. Akkaoui, 40 U.S. P.Q. 2d (BNA) 1836 (N.D.


Cal. 1996).
44

CA Rollo, pp. 1251-1268; Dated 11 January 1999.

32

Rollo, pp. 601-628; Dated 18 October 1999; In a


Resolution dated 10 May 1999, id. at 103.
33

338 Phil. 728, 743 (1997).

45

Id..

46

G.R. No. 104583, 8 March 1993, 219 SCRA 715, 721.

47

Government Service Insurance System v. Florendo, supra


note 35.
48

Government Service Insurance System v. Florendo, supra


note 35 at 87; See Golding v. Balatbat, 36 Phil. 941, 947
(1917)
49

Searth Commodities Corp. v. Court of Appeals, G.R. No.


64220, 31 March 1992, 207 SCRA 622, 629.
50

Id. at 630.

51

389 Phil. 389, 394-395 (2000).

52

Batangas Laguna Tayabas Bus Co., Inc. v. Bitanga, 415


Phil. 43, 55 (2001); See Co. v. Judge Calimag, supra, citing
NFL v. NLRC, 283 SCRA 275 (1997) and Ginete v. Court of
Appeals, 296 SCRA 38 (1998).
53

See Ong Ching Kian Chuan v. Court of Appeals, G.R. No.


130360, 15 August 2001, 363 SCRA 145, 154.
54

G.R. No. 180073

November 25, 2009

PROSOURCE INTERNATIONAL, INC., Petitioner,


vs.
HORPHAG RESEARCH MANAGEMENT SA, Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules
of Court seeking to reverse and set aside the Court of Appeals (CA)
Decision1 dated July 27, 2007 and Resolution2 dated October 15,
2007 in CA-G.R. CV No. 87556. The assailed decision affirmed the
Regional Trial Court (RTC)3 Decision4 dated January 16, 2006 and
Order5 dated May 3, 2006 in Civil Case No. 68048; while the
assailed resolution denied petitioners motion for reconsideration.
The facts are as follows:
Respondent Horphag Research Management SA is a corporation
duly organized and existing under the laws of Switzerland and the
owner6 of trademark PYCNOGENOL, a food supplement sold and
distributed by Zuellig Pharma Corporation. Respondent later
discovered that petitioner Prosource International, Inc. was also
distributing a similar food supplement using the mark PCO-GENOLS
since 1996.7 This prompted respondent to demand that petitioner
cease and desist from using the aforesaid mark.8
Without notifying respondent, petitioner discontinued the use of,
and withdrew from the market, the products under the name PCOGENOLS as of June 19, 2000. It, likewise, changed its mark from
PCO-GENOLS to PCO-PLUS.9
On August 22, 2000, respondent filed a Complaint10 for
Infringement of Trademark with Prayer for Preliminary Injunction
against petitioner, praying that the latter cease and desist from
using the brand PCO-GENOLS for being confusingly similar with
respondents trademark PYCNOGENOL. It, likewise, prayed for
actual and nominal damages, as well as attorneys fees. 11
In its Answer,12 petitioner contended that respondent could not file
the infringement case considering that the latter is not the

registered owner of the trademark PYCNOGENOL, but one Horphag


Research Limited. It, likewise, claimed that the two marks were not
confusingly similar. Finally, it denied liability, since it discontinued
the use of the mark prior to the institution of the infringement
case. Petitioner thus prayed for the dismissal of the complaint. By
way of counterclaim, petitioner prayed that respondent be directed
to pay exemplary damages and attorneys fees.13
During the pre-trial, the parties admitted the following:
1. Defendant [petitioner] is a corporation duly organized
and existing under the laws of the Republic of the
Philippines with business address at No. 7 Annapolis Street,
Greenhills, San Juan, Metro Manila;
2. The trademark PYCNOGENOL of the plaintiff is duly
registered with the Intellectual Property Office but not with
the Bureau of Food and Drug (BFAD).
3. The defendants product PCO-GENOLS is duly registered
with the BFAD but not with the Intellectual Property Office
(IPO).
4. The defendant corporation discontinued the use of and
had withdrawn from the market the products under the
name of PCO-GENOLS as of June 19, 2000, with its
trademark changed from PCO-GENOLS to PCO-PLUS.
5. Plaintiff corporation sent a demand letter to the
defendant dated 02 June 2000.14
On January 16, 2006, the RTC decided in favor of respondent. It
observed that PYCNOGENOL and PCO-GENOLS have the same
suffix "GENOL" which appears to be merely descriptive and thus
open for trademark registration by combining it with other words.
The trial court, likewise, concluded that the marks, when read,
sound similar, and thus confusingly similar especially since they
both refer to food supplements. The court added that petitioners
liability was not negated by its act of pulling out of the market the
products bearing the questioned mark since the fact remains that
from 1996 until June 2000, petitioner had infringed respondents
product by using the trademark PCO-GENOLS. As respondent

manifested that it was no longer interested in recovering actual


damages, petitioner was made to answer only for attorneys fees
amounting to P50,000.00.15 For lack of sufficient factual and legal
basis, the court dismissed petitioners counterclaim. Petitioners
motion for reconsideration was likewise denied.
On appeal to the CA, petitioner failed to obtain a favorable
decision. The appellate court explained that under the Dominancy
or the Holistic Test, PCO-GENOLS is deceptively similar to
PYCNOGENOL. It also found just and equitable the award of
attorneys fees especially since respondent was compelled to
litigate.16
Hence, this petition, assigning the following errors:
I. THAT THE COURT OF APPEALS ERRED IN AFFRIMING THE
RULING OF THE LOWER [COURT] THAT RESPONDENTS
TRADEMARK P[YC]NOGENOLS (SIC) WAS INFRINGED BY
PETITIONERS PCO-GENOLS.
II. THAT THE COURT OF APPEALS ERRED IN AFFIRMING THE
AWARD OF ATTORNEYS FEES IN FAVOR OF RESPONDENT
HORPHAG RESEARCH MANAGEMENT S.A. IN THE AMOUNT
OF Php50,000.00.17
The petition is without merit.
It must be recalled that respondent filed a complaint for trademark
infringement against petitioner for the latters use of the mark
PCO-GENOLS which the former claimed to be confusingly similar to
its trademark PYCNOGENOL. Petitioners use of the questioned
mark started in 1996 and ended in June 2000. The instant case
should thus be decided in light of the provisions of Republic Act
(R.A.) No. 16618 for the acts committed until December 31, 1997,
and R.A. No. 829319 for those committed from January 1, 1998 until
June 19, 2000.
A trademark is any distinctive word, name, symbol, emblem, sign,
or device, or any combination thereof, adopted and used by a
manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by others.
Inarguably, a trademark deserves protection.20

Section 22 of R.A. No. 166, as amended, and Section 155 of R.A.


No. 8293 define what constitutes trademark infringement, as
follows:
Sec. 22. Infringement, what constitutes. Any person who shall
use, without the consent of the registrant, any reproduction,
counterfeit, copy or colorable imitation of any registered mark or
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 of 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, shall be liable to a civil action by
the registrant for any or all of the remedies herein provided.
Sec. 155. Remedies; Infringement. Any person who shall, without
the consent of the owner of the registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark or the same container or a
dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including
other preparatory steps necessary to carry out the sale of any
goods or services on or in connection with which such use is likely
to cause confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a
registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in connection with the
sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be liable in a
civil action for infringement by the registrant for the remedies
hereinafter set forth: Provided, That infringement takes place at
the moment any of the acts stated in Subsection 155.1 or this
subsection are committed regardless of whether there is actual
sale of goods or services using the infringing material.

In accordance with Section 22 of R.A. No. 166, as well as Sections


2, 2-A, 9-A, and 20 thereof, the following constitute the elements of
trademark infringement:
(a) A trademark actually used in commerce in the
Philippines and registered in the principal register of the
Philippine Patent Office[;]
(b) [It] is used by another person in connection with the
sale, offering for sale, or advertising of any goods, business
or services 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 such trademark is
reproduced, counterfeited, copied or colorably imitated by
another person and such reproduction, counterfeit, copy or
colorable imitation is applied to labels, signs, prints,
packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such
goods, business or services as to likely cause confusion or
mistake or to deceive purchasers[;]
(c) [T]he trademark is used for identical or similar goods[;]
and
(d) [S]uch act is done without the consent of the trademark
registrant or assignee.21
On the other hand, the elements of infringement under R.A. No.
8293 are as follows:
(1) The trademark being infringed is registered in the
Intellectual Property Office; however, in infringement of
trade name, the same need not be registered;
(2) The trademark or trade name is reproduced,
counterfeited, copied, or colorably imitated by the
infringer;
(3) The infringing mark or trade name is used in connection
with the sale, offering for sale, or advertising of any goods,

business or services; or the infringing mark or trade name


is applied to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used upon or
in connection with such goods, business or services;
(4) The use or application of the infringing mark or trade
name is likely to cause confusion or mistake or to deceive
purchasers or others as to the goods or services
themselves or as to the source or origin of such goods or
services or the identity of such business; and
(5) It is without the consent of the trademark or trade
name owner or the assignee thereof.22
In the foregoing enumeration, it is the element of "likelihood of
confusion" that is the gravamen of trademark infringement. But
"likelihood of confusion" is a relative concept. The particular, and
sometimes peculiar, circumstances of each case are determinative
of its existence. Thus, in trademark infringement cases, precedents
must be evaluated in the light of each particular case. 23
In determining similarity and likelihood of confusion, jurisprudence
has developed two tests: the Dominancy Test and the Holistic or
Totality Test. The Dominancy Test focuses on the similarity of the
prevalent features of the competing trademarks that might cause
confusion and deception, thus constituting infringement. 24 If the
competing trademark contains the main, essential and dominant
features of another, and confusion or deception is likely to result,
infringement takes place. Duplication or imitation is not necessary;
nor is it necessary that the infringing label should suggest an effort
to imitate. The question is whether the use of the marks involved is
likely to cause confusion or mistake in the mind of the public or to
deceive purchasers.25 Courts will consider more the aural and
visual impressions created by the marks in the public mind, giving
little weight to factors like prices, quality, sales outlets, and market
segments.26
In contrast, the Holistic Test entails a consideration of the entirety
of the marks as applied to the products, including the labels and
packaging, in determining confusing similarity.27 The discerning eye
of the observer must focus not only on the predominant words but
also on the other features appearing on both labels in order that

the observer may draw his conclusion whether one is confusingly


similar to the other.28
The trial and appellate courts applied the Dominancy Test in
determining whether there was a confusing similarity between the
marks PYCNOGENOL and PCO-GENOL. Applying the test, the trial
court found, and the CA affirmed, that:
Both the word[s] PYCNOGENOL and PCO-GENOLS have the same
suffix "GENOL" which on evidence, appears to be merely
descriptive and furnish no indication of the origin of the article and
hence, open for trademark registration by the plaintiff thru
combination with another word or phrase such as PYCNOGENOL,
Exhibits "A" to "A-3." Furthermore, although the letters "Y" between
P and C, "N" between O and C and "S" after L are missing in the
[petitioners] mark PCO-GENOLS, nevertheless, when the two
words are pronounced, the sound effects are confusingly similar
not to mention that they are both described by their manufacturers
as a food supplement and thus, identified as such by their public
consumers. And although there were dissimilarities in the
trademark due to the type of letters used as well as the size, color
and design employed on their individual packages/bottles, still the
close relationship of the competing products name in sounds as
they were pronounced, clearly indicates that purchasers could be
misled into believing that they are the same and/or originates from
a common source and manufacturer.29

"Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe" and


"Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo." Leon
Amdur, in his book "Trade-Mark Law and Practice," pp. 419-421,
cities, as coming within the purview of the idem sonans rule,
"Yusea" and "U-C-A," "Steinway Pianos" and "Steinberg Pianos,"
and "Seven-Up" and "Lemon-Up." In Co Tiong vs. Director of
Patents, this Court unequivocally said that "Celdura" and "Cordura"
are confusingly similar in sound; this Court held in Sapolin Co. vs.
Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement
of the trademark "Sapolin," as the sound of the two names is
almost the same.32
Finally, we reiterate that the issue of trademark infringement is
factual, with both the trial and appellate courts finding the
allegations of infringement to be meritorious. As we have
consistently held, factual determinations of the trial court,
concurred in by the CA, are final and binding on this Court. 33
Hence, petitioner is liable for trademark infringement.
We, likewise, sustain the award of attorneys fees in favor of
respondent. Article 2208 of the Civil Code enumerates the
instances when attorneys fees are awarded, viz.:
Art. 2208. In the absence of stipulation, attorneys fees and
expenses of litigation, other than judicial costs, cannot be
recovered, except:

We find no cogent reason to depart from such conclusion.

1. When exemplary damages are awarded;

This is not the first time that the Court takes into account the aural
effects of the words and letters contained in the marks in
determining the issue of confusing similarity. In Marvex
Commercial Co., Inc. v. Petra Hawpia & Co., et al., 30 cited in
McDonalds Corporation v. L.C. Big Mak Burger, Inc., 31 the Court
held:

2. When the defendants act or omission has compelled the


plaintiff to litigate with third persons or to incur expenses
to protect his interest;

The following random list of confusingly similar sounds in the


matter of trademarks, culled from Nims, Unfair Competition and
Trade Marks, 1947, Vol. 1, will reinforce our view that "SALONPAS"
and "LIONPAS" are confusingly similar in sound: "Gold Dust" and
"Gold Drop"; "Jantzen" and "Jass-Sea"; "Silver Flash" and "Supper
Flash"; "Cascarete" and "Celborite"; "Celluloid" and "Cellonite";

3. In criminal cases of malicious prosecution against the


plaintiff;
4. In case of a clearly unfounded civil action or proceeding
against the plaintiff;

5. Where the defendant acted in gross and evident bad


faith in refusing to satisfy the plaintiff"s plainly valid, just
and demandable claim;

WE CONCUR:
RENATO C. CORONA
Associate Justice
Chairperson

6. In actions for legal support;


7. In actions for the recovery of wages of household
helpers, laborers and skilled workers;

MINITA V. CHICO-NAZARIO
Associate Justice

8. In actions for indemnity under workmens compensation


and employers liability laws;

DIOSDADO M. PERALTA
Associate Justice

9. In a separate civil action to recover civil liability arising


from a crime;
10. When at least double judicial costs are awarded;
11. In any other case where the court deems it just and
equitable that attorneys fees and expenses of litigation
should be recovered.
In all cases, the attorneys fees and expenses of litigation must be
reasonable.

PRESBITERO J. VELASCO,
JR.
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the
opinion of the Courts Division.
RENATO C. CORONA
Associate Justice
Chairperson, Third Division
CERTIFICATION

As a rule, an award of attorneys fees should be deleted where the


award of moral and exemplary damages is not granted.34
Nonetheless, attorneys fees may be awarded where the court
deems it just and equitable even if moral and exemplary damages
are unavailing.35 In the instant case, we find no reversible error in
the grant of attorneys fees by the CA.
WHEREFORE, premises considered, the petition is DENIED for lack
of merit. The Court of Appeals Decision dated July 27, 2007 and its
Resolution dated October 15, 2007 in CA-G.R. CV No. 87556 are
AFFIRMED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice

Pursuant to Section 13, Article VIII of the Constitution and the


Division Chairperson's Attestation, I certify that the conclusions in
the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Chief Justice

Footnotes

Penned by Associate Justice Vicente S.E. Veloso, with


Associate Justices Juan Q. Enriquez, Jr. and Marlene
Gonzales-Sison, concurring; rollo, pp. 38-47.
1

Id. at 48.

Branch 167, Pasig City.

Penned by Judge Alfredo C. Flores; rollo, pp. 230-234.

Id. at 248-250.

19

Intellectual Property Code.

Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R.


No. 158589, June 27, 2006, 493 SCRA 333, 345.
20

21

Id. at 360.

Ruben E. Agpalo, The Law on Trademark, Infringement


and Unfair Competition (2000), pp. 142-143.
22

Evidenced by Registration No. 62413 issued by the


Bureau of Patents, Trademarks and Technology Transfer.

Philip Morris, Inc. v. Fortune Tobacco Corporation, supra


note 20, at 356.
23

Rollo, p. 39.

Id. at 163-164.

Id. at 68.

Philip Morris, Inc. v. Fortune Tobacco Corporation, id;


Mighty Corporation v. E. & J. Gallo Winery, G.R. No. 154342,
July 14, 2004, 434 SCRA 473, 506.
24

Mighty Corporation v. E. & J. Gallo Winery, supra note 24,


at 506-507.
25

McDonalds Corporation v. L.C. Big Mak Burger, Inc., G.R.


No. 143993, August 18, 2004, 437 SCRA 10, 32.
26

10

Id. at 49-54.

11

Id. at 50-51.

Philip Morris, Inc. v. Fortune Tobacco Corporation, supra


note 20, at 356-357.

12

Id. at 57-61.

28

13

Id. at 60.

14

Id. at 68-69.

15

Id. at 233-234.

16

Id. at 44-46.

17

Id. at 26.

18

Trademark Law.

27

Mighty Corporation v. E. & J. Gallo Winery, supra note 24,


at 507.
29

Rollo, p. 45.

30

125 Phil. 295 (1966).

31

Supra note 26.

McDonalds Corporation v. L.C. Big Mak Burger, Inc.,


supra note 26, at 34.
32

Philip Morris, Inc. v. Fortune Tobacco Corporation, supra


note 20, at 361-362.
33

Francisco v. Co, G.R. No. 151339, January 31, 2006, 481


SCRA 241; Ibaan Rural Bank, Inc. v. Court of Appeals, 378
Phil. 707 (1999).
34

Villanueva v. Court of Appeals, G.R. No. 132955, October


27, 2006, 505 SCRA 564; Carlos v. Sandoval, G.R. Nos.
135830, 136035 and 137743, September 30, 2005, 471
SCRA 266.
35

G.R. No. L-26557 February 18, 1970


AMERICAN WIRE & CABLE COMPANY, petitioner,
vs.
DIRECTOR OF PATENTS and CENTRAL BANAHAW
INDUSTRIES, respondents.
Sotero H. Laurel and Florencio Z. Sioson for petitioner.
Celso P. Mariano for respondents.

REYES, J.B.L., J.:


Appeal filed by the American Wire & Cable Company, owner of the
registered trademark DURAFLEX for electric wires, questioning the
correctness of the decision of the Director of Patents (in Inter
Partes Case No. 290) holding that the label DYNAFLEX and Device
for electric wires, sought to be registered by the Central Banahaw
Industries, Inc., is not similar to herein appellant's patented mark.
On 2 June 1962, Central Banahaw Industries, Inc., applied with the
Director of Patents for registration of the trademark DYNAFLEX and
Device to be used in connection with electric wires, class 20, which
mark applicant allegedly had been using since 29 March 1962. The
American Wire and Cable Co., Inc., another domestic corporation
and authorized user since 10 April 1958 of the registered trade
mark DURAFLEX and Globe representation, for electric wires,

apparatus, machines and supplies, class 20, opposed the


application on the ground that applicant's use of the trade mark
DYNAFLEX would cause confusion or result in mistake to
purchasers intending to buy DURAFLEX electric wires and goods,
the mark being registered allegedly having practically the same
spelling, pronunciation and sound, and covering the same good, as
that of the opposer. Besides, opposer contended that there has
been no continuous use in commerce of the applicant's mark.
After due hearing, the Director of Patents rendered decision holding
the applicant's mark DYNAFLEX not to be similar to the previously
registered trademark DURAFLEX. Consequently, the application of
Central Banahaw Industries for registration of DYNAFLEX was given
due course and the opposition thereto by American Wire & Cable
Company dismissed. The latter interposed the present appeal.
The issue to be resolved in this proceeding is simple: whether or
not the mark DYNAFLEX and Device is registrable as label for
electric wires, class 20, considering that the trademark DURAFLEX
and Globe representation also for electric wires, machines and
supplies under class 20, has been registered more than 4 years
earlier.
In ruling in favor of the herein application, the Director of Patents
said:
... The applicant's trademark is a composite mark
consisting of the word DYNAFLEX printed in small
letters of the English alphabet except that letter
"D" is capitalized, within a fanciful device, on top of
which is the encircled initials, in downward
sequence, of the Respondent's corporate name,
and jutting out on two sides of the circle are bolts
of lightning, symbolic of electricity.

lightning. The word slants slightly upward,


traversing the center of a figure of the earth or
globe.
Resorting now to the semantics of the words, it is
clear that both marks are suffixed by the word
FLEX. The word appears in any dictionary having as
common meaning "to bend." In Webster's
International Dictionary, it is used by the British on
electric cord. However, one mark (Respondent's) is
prefixed with DYNA suggesting power. It is not in
itself a rootword but it has been commonly
associated with any source of power. At most, it
could have been derived from the Greek word
"Dynamis" and, generally, the root words
commonly derived therefrom are ''dynam'' and
"dynamo". The other (Opposer's) is prefixed with
DURA, suggesting durability, strength and
endurance.
Based on the foregoing comparisons, the
trademarks of the parties are different in
appearance, meaning, sound and connotation and
hence, are not confusingly similar.
The pertinent law, Republic Act 166, as amended, on registrability
of trademarks, prescribes:
SEC. 4. The owner of a trademark, trade name
or service-mark used to distinguish his goods,
business or services from the goods, business or
services of others shall have the right to register
the same, unless it:
xxx xxx xxx

On the other hand, Opposer's trademark is


DURAFLEX in Capitalized print, except that one
cross piece of the letter X is in the form of a bolt of

(d) Consists of or comprises a mark or trade name


which so resembles a mark or trade-name
registered in the Philippines by another and not
abandoned, as to be likely, when applied to or used
in connection with the goods, business or services
of the applicant, to cause confusion or mistake or
to deceive purchasers. (Emphasis supplied)
It is clear from the above-quoted provision that the determinative
factor in a contest involving registration of trade mark is not
whether the challenged mark would actually cause confusion or
deception of the purchasers but whether the use of such mark
would likely cause confusion or mistake on the part of the buying
public. In short, to constitute an infringement of an existing
trademark patent and warrant a denial of an application for
registration, the law does not require that the competing
trademarks must be so identical as to produce actual error or
mistake; it would be sufficient, for purposes of the law, that the
similarity between the two labels is such that there is a possibility
or likelihood of the purchaser of the older brand mistaking the
newer brand for it.
The question is, when is a trademark likely to confuse or cause the
public to mistake one for another? Earlier rulings of the Court seem
to indicate its reliance on the dominancy test or the assessment of
the essential or dominant features in the competing labels to
determine whether they are confusingly similar.1 On this matter,
the Court said:
It has been consistently held that the question of
infringement of a trademark is to be determined by
the test of dominancy. Similarity in size, form, and
color, while relevant, is not conclusive. If the
competing trademark contains the main or
essential or dominant features of another, and
confusion and deception is likely to result,
infringement takes place. Duplication or imitation is
not necessary, nor is it necessary that the

infringing label should suggest an effort to imitate


(C. Neilman Brewing Co. vs. Independent Brewing
Co., 191 F. 489, 495, citing Eagle White Lead Co.
vs. Pflugh [CC] 180 Fed. 579). 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." (Go Tiong vs.
Director of Patents, 95 Phil. 1, cited in Lim Hoa vs.
Director of Patents, 100 Phil. 214).2
In fact, even their similarity in sound is taken into consideration,
where the marks refer to merchandise of the same descriptive
properties, for the reason that trade idem sonans constitutes a
violation of trade mark patents.3 Thus, in he case of Marvex
Commercial Co. vs. Hawpia & Co.,4 the registration of the
trademark "Lionpas" for medicated plaster was denied for being
confusingly similar in sound with "Salonpas", a registered mark
also for medicated plaster, the Court saying:
Two letters of "SALONPAS" are missing in "LIONPAS"
the first letter a and the letter s. Be that as it may,
when the two words are pronounced, the sound
effects are confusingly similar. And where goods
are advertised over the radio, similarity in sound is
of especial significance (Co Tiong Sa vs. Director of
Patents, 95 Phil. 1, citing Nims, The Law of Unfair
Competition and Trademarks, 4th ed., vol. 2, pp.
678-679). "The importance of this rule is
emphasized by the increase of radio advertising in
which we are deprived of help of our eyes and
must depend entirely on the ear (Operators, Inc.
vs. Director of Patents, supra.)
Along the same line are the rulings denying registration of a mark
containing the picture of a fish (Bagus), as label for soy sauce, for
being similar to another registered brand of soy sauce that bears
the picture of the fish carp;5 or that of the mark bearing the picture

of two roosters with the word "Bantam", as label for food seasoning
(vetsin), which would confuse the purchasers of the same article
bearing the registered mark "Hen Brand" that features the picture
of a hen.6
The present case is governed by the principles laid down in the
preceding cases. The similarity between the competing
trademarks, DURAFLEX and DYNAFLEX, is apparent. Not only are
the initial letters and the last half of the appellations identical, but
the difference exists only in two out of the eight literal elements of
the designations. Coupled with the fact that both marks cover
insulated flexible wires under class 20; that both products are
contained in boxes of the same material, color, shape and size;
that the dominant elements of the front designs are a red circle
and a diagonal zigzag commonly related to a spark or flash of
electricity; that the back of both boxes show similar circles of
broken lines with arrows at the center pointing outward, with the
identical legend "Cut Out Ring" "Draw From Inside Circle", no
difficulty is experienced in reaching the conclusion that there is a
deceptive similarity that would lead the purchaser to confuse one
product with the other.
The Director of Patents has predicated his decision mostly on the
semantic difference and connotation of the prefixes "Dura" and
"Dyna" of the competing trademarks, unfortunately forgetting that
the buyers are less concerned with the etymology of the words as
with their sound and the dominant features of the design.
Of course, as pointed out in the decision now on appeal there are
some differences in the mark on the front portion of the box. But
they pale into insignificance in view of the close resemblance in
the general appearance of the box and the tradenames of the
articles. Indeed, measured against the dominant-feature standard,
applicant's mark must be disallowed. For, undeniably, the
dominant and essential feature of the article is the trademark
itself. Unlike in the case of commodities that are ordinarily picked
up by the purchaser himself from the grocery or market counters,
electric wires are purchased not by their appearance but by the

size (voltage) and length and, most importantly, by brand. It is


even within layman's knowledge that different brands of wire have
different characteristics and properties; and for an essential
building item as electric wires and supplies, the owner of the
building would not dare risk his property, perhaps his life, on an
unknown or untested brand. He would only demand for what is
recognized to be the best.
Relying on the doctrine enunciated in the Etepha case 7 and the
earlier ruling in Lim Hoa vs. Director of Patents,8 applicant-appellee
contends that the DYNAFLEX mark would not confuse or deceive
the buyers and subscribers of the DURAFLEX brand, because
electrical wires are of great value and the purchasers thereof are
generally intelligent the architects, engineers and building
contractors. It must be realized, however, that except perhaps in
big constructions, the designing architect or engineer, or the
contractor who will undertake the work of building, does not
himself purchase or place the order for the purchase of the
materials to be used therein. The task is oftentimes delegated to
another. Nor are said technical men the ones personally laying
down the wiring system in the building that they could possibly
check on whether or not the correct wires are being used. So that
even if the engineer or contractor will specify in the bill of
materials the particular brand of wires needed, there is no
certainty that the desired product will be acquired. For, unlike the
pharmacists or druggists, the dispensers of hardware or electrical
supplies are not generally known to pay as much concern to the
brand of articles asked for by the customer and of a person who
knows the name of the brand but is not acquainted with it is
appearance, the likelihood of the DYNAFLEX product being
mistaken for DURAFLEX is not remote.
Of course, as in all other cases of colorable imitations, the
unanswered riddle is why, of the millions of terms and
combinations of letters and designs available, the appellee had to
choose those so closely similar to another's trademark if there was
no intent to take advantage of the goodwill generated by the other
mark.

FOR THE FOREGOING CONSIDERATIONS, the decision appealed


from is hereby set aside, and the application for registration of the
trademark DYNAFLEX for electric wires, class 20, is ordered denied.
No costs.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro
Fernando, Barredo and Villamor, JJ., concur.
Teehankee, J., took no part.

Footnotes
1 Parke, Davis & Co. vs. Kui Foo & Co., Ltd., 60 Phil.
928; Sapolin Co., Inc. vs. Balmaceda, 67 Phil. 705.
2 Also Chua Che vs. Phil. Patent Office, L-18337, 30
January 1965, 13 SCRA 60; Operators, Inc. vs.
Director of Patents, L-17901, 29 Oct. 1965.
3 Sapolin Co., Inc. vs. Balmaceda, supra.
4 L-19297, 22 December 1066, 18 SCRA 1178.
5 Chuanchow Soy & Canning Co. vs. Director, L13947, 30 June 1960.
6 Lim Hoa vs. Director of Patents, 100 Phil. 214.
7 Etepha A.G. vs. Director of Patents, L-20635, 31
March 1966, 16 S.C.R.A. 495.
8 Lim Hoa vs. Director of Patents, 100 Phil. 214.

DECISION

CARPIO, J.:
The Case
This is a petition for review1 of the Decision dated 26 November
1999 of the Court of Appeals2 finding respondent L.C. Big Mak
Burger, Inc. not liable for trademark infringement and unfair
competition and ordering petitioners to pay respondents
P1,900,000 in damages, and of its Resolution dated 11 July 2000
denying reconsideration. The Court of Appeals' Decision reversed
the 5 September 1994 Decision3 of the Regional Trial Court of
Makati, Branch 137, finding respondent L.C. Big Mak Burger, Inc.
liable for trademark infringement and unfair competition.
The Facts

G.R. No. 143993

August 18, 2004

MCDONALD'S CORPORATION and MCGEORGE FOOD


INDUSTRIES, INC., petitioners,
vs.
L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY,
RENE B. DY, WILLIAM B. DY, JESUS AYCARDO, ARACELI
AYCARDO, and GRACE HUERTO, respondents.

Petitioner McDonald's Corporation ("McDonald's") is a corporation


organized under the laws of Delaware, United States. McDonald's
operates, by itself or through its franchisees, a global chain of fastfood restaurants. McDonald's4 owns a family of marks5 including
the "Big Mac" mark for its "double-decker hamburger sandwich."6
McDonald's registered this trademark with the United States
Trademark Registry on 16 October 1979.7 Based on this Home
Registration, McDonald's applied for the registration of the same
mark in the Principal Register of the then Philippine Bureau of
Patents, Trademarks and Technology ("PBPTT"), now 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 18 July 1985, the PBPTT
allowed registration of the "Big Mac" mark in the Principal Register
based on its Home Registration in the United States.
Like its other marks, McDonald's displays the "Big Mac" mark in
items8 and paraphernalia9 in its restaurants, and in its outdoor and
indoor signages. From 1982 to 1990, McDonald's spent P10.5

million in advertisement for "Big Mac" hamburger sandwiches


alone.10
Petitioner McGeorge Food Industries ("petitioner McGeorge"), a
domestic corporation, is McDonald's Philippine franchisee. 11
Respondent L.C. Big Mak Burger, Inc. ("respondent corporation") is
a domestic corporation which operates fast-food outlets and snack
vans in Metro Manila and nearby provinces.12 Respondent
corporation's menu includes hamburger sandwiches and other food
items.13 Respondents Francis B. Dy, Edna A. Dy, Rene B. Dy,
William B. Dy, Jesus Aycardo, Araceli Aycardo, and Grace Huerto
("private respondents") are the incorporators, stockholders and
directors of respondent corporation.14
On 21 October 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.
McDonald's also informed respondent Francis Dy ("respondent
Dy"), the chairman of the Board of Directors of respondent
corporation, of its exclusive right to the "Big Mac" mark and
requested him to desist from using the "Big Mac" mark or any
similar mark.
Having received no reply from respondent Dy, petitioners on 6 June
1990 sued respondents in the Regional Trial Court of Makati,
Branch 137 ("RTC"), for trademark infringement and unfair
competition. In its Order of 11 July 1990, the RTC issued a
temporary restraining order ("TRO") against respondents enjoining
them from using the "Big Mak" mark in the operation of their
business in the National Capital Region.15 On 16 August 1990, the
RTC issued a writ of preliminary injunction replacing the TRO. 16
In their Answer, respondents admitted that they have been using
the name "Big Mak Burger" for their fast-food business.
Respondents claimed, however, that McDonald's does not have an
exclusive right to the "Big Mac" mark or to any other similar mark.
Respondents point out that the Isaiyas Group of Corporations
("Isaiyas Group") registered the same mark for hamburger
sandwiches with the PBPTT on 31 March 1979. One Rodolfo Topacio

("Topacio") similarly registered the same mark on 24 June 1983,


prior to McDonald's registration on 18 July 1985. Alternatively,
respondents claimed that they are not liable for trademark
infringement or for unfair competition, as the "Big Mak" mark they
sought to register does not constitute a colorable imitation of the
"Big Mac" mark. Respondents asserted that they did not
fraudulently pass off their hamburger sandwiches as those of
petitioners' Big Mac hamburgers.17 Respondents sought damages
in their counterclaim.
In their Reply, petitioners denied respondents' claim that
McDonald's is not the exclusive owner of the "Big Mac" mark.
Petitioners asserted that while the Isaiyas Group and Topacio did
register the "Big Mac" mark ahead of McDonald's, the Isaiyas
Group did so only in the Supplemental Register of the PBPTT and
such registration does not provide any protection. McDonald's
disclosed that it had acquired Topacio's rights to his registration in
a Deed of Assignment dated 18 May 1981.18
The Trial Court's Ruling
On 5 September 1994, the RTC rendered judgment ("RTC
Decision") finding respondent corporation liable for trademark
infringement and unfair competition. However, the RTC dismissed
the complaint against private respondents and the counterclaim
against petitioners for lack of merit and insufficiency of evidence.
The RTC held:
Undeniably, the mark "B[ig] M[ac]" is a registered
trademark for plaintiff McDonald's, and as such, it is
entitled [to] protection against infringement.
xxxx
There exist some distinctions between the names "B[ig]
M[ac]" and "B[ig] M[ak]" as appearing in the respective
signages, wrappers and containers of the food products of
the parties. But infringement goes beyond the physical
features of the questioned name and the original name.
There are still other factors to be considered.
xxxx

Significantly, the contending parties are both in the


business of fast-food chains and restaurants. An average
person who is hungry and wants to eat a hamburger
sandwich may not be discriminating enough to look for a
McDonald's restaurant and buy a "B[ig] M[ac]" hamburger.
Once he sees a stall selling hamburger sandwich, in all
likelihood, he will dip into his pocket and order a "B[ig]
M[ak]" hamburger sandwich. Plaintiff McDonald's fast-food
chain has attained wide popularity and acceptance by the
consuming public so much so that its air-conditioned food
outlets and restaurants will perhaps not be mistaken by
many to be the same as defendant corporation's mobile
snack vans located along busy streets or highways. But the
thing is that what is being sold by both contending parties
is a food item a hamburger sandwich which is for
immediate consumption, so that a buyer may easily be
confused or deceived into thinking that the "B[ig] M[ak]"
hamburger sandwich he bought is a food-product of
plaintiff McDonald's, or a subsidiary or allied outlet thereof.
Surely, defendant corporation has its own secret
ingredients to make its hamburger sandwiches as palatable
and as tasty as the other brands in the market, considering
the keen competition among mushrooming hamburger
stands and multinational fast-food chains and restaurants.
Hence, the trademark "B[ig] M[ac]" has been infringed by
defendant corporation when it used the name "B[ig] M[ak]"
in its signages, wrappers, and containers in connection
with its food business. xxxx
Did the same acts of defendants in using the name "B[ig]
M[ak]" as a trademark or tradename in their signages, or in
causing the name "B[ig] M[ak]" to be printed on the
wrappers and containers of their food products also
constitute an act of unfair competition under Section 29 of
the Trademark Law?

trademark by the person whose goods or services are first


associated therewith. xxx Notwithstanding the distinction
between an action for trademark infringement and an
action for unfair competition, however, the law extends
substantially the same relief to the injured party for both
cases. (See Sections 23 and 29 of Republic Act No. 166)
Any conduct may be said to constitute unfair competition if
the effect is to pass off on the public the goods of one man
as the goods of another. The choice of "B[ig] M[ak]" as
tradename by defendant corporation is not merely for
sentimental reasons but was clearly made to take
advantage of the reputation, popularity and the
established goodwill of plaintiff McDonald's. For, as stated
in Section 29, a person is guilty of unfair competition who
in selling his goods shall give them the general
appearance, of goods of another manufacturer or dealer,
either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or
words thereon, or in any other feature of their appearance,
which would likely influence purchasers to believe that the
goods offered are those of a manufacturer or dealer other
than the actual manufacturer or dealer. Thus, plaintiffs
have established their valid cause of action against the
defendants for trademark infringement and unfair
competition and for damages.19
The dispositive portion of the RTC Decision provides:
WHEREFORE, judgment is rendered in favor of plaintiffs
McDonald's Corporation and McGeorge Food Industries, Inc.
and against defendant L.C. Big Mak Burger, Inc., as follows:
1. The writ of preliminary injunction issued in this case on
[16 August 1990] is made permanent;

The answer is in the affirmative. xxxx


The xxx provision of the law concerning unfair competition
is broader and more inclusive than the law concerning the
infringement of trademark, which is of more limited range,
but within its narrower range recognizes a more exclusive
right derived by the adoption and registration of the

2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay


plaintiffs actual damages in the amount of P400,000.00,
exemplary damages in the amount of P100,000.00, and
attorney's fees and expenses of litigation in the amount of
P100,000.00;

3. The complaint against defendants Francis B. Dy, Edna A.


Dy, Rene B. Dy, Wiliam B. Dy, Jesus Aycardo, Araceli
Aycardo and Grace Huerto, as well as all counter-claims,
are dismissed for lack of merit as well as for insufficiency of
evidence.20
Respondents appealed to the Court of Appeals.
The Ruling of the Court of Appeals
On 26 November 1999, the Court of Appeals rendered judgment
("Court of Appeals' Decision") reversing the RTC Decision and
ordering McDonald's to pay respondents P1,600,000 as actual and
compensatory damages and P300,000 as moral damages. The
Court of Appeals held:
Plaintiffs-appellees in the instant case would like to impress
on this Court that the use of defendants-appellants of its
corporate name the whole "L.C. B[ig] M[ak] B[urger],
I[nc]." which appears on their food packages, signages and
advertisements is an infringement of their trademark "B[ig]
M[ac]" which they use to identify [their] double decker
sandwich, sold in a Styrofoam box packaging material with
the McDonald's logo of umbrella "M" stamped thereon,
together with the printed mark in red bl[o]ck capital letters,
the words being separated by a single space. Specifically,
plaintiffs-appellees argue that defendants-appellants' use
of their corporate name is a colorable imitation of their
trademark "Big Mac".
xxxx
To Our mind, however, this Court is fully convinced that no
colorable imitation exists. As the definition dictates, it is
not sufficient that a similarity exists in both names, but
that more importantly, the over-all presentation, or in their
essential, substantive and distinctive parts is such as
would likely MISLEAD or CONFUSE persons in the ordinary
course of purchasing the genuine article. A careful
comparison of the way the trademark "B[ig] M[ac]" is being
used by plaintiffs-appellees and corporate name L.C. Big
Mak Burger, Inc. by defendants-appellants, would readily

reveal that no confusion could take place, or that the


ordinary purchasers would be misled by it. As pointed out
by defendants-appellants, the plaintiffs-appellees'
trademark is used to designate only one product, a double
decker sandwich sold in a Styrofoam box with the
"McDonalds" logo. On the other hand, what the
defendants-appellants corporation is using is not a
trademark for its food product but a business or corporate
name. They use the business name "L.C. Big Mak Burger,
Inc." in their restaurant business which serves diversified
food items such as siopao, noodles, pizza, and sandwiches
such as hotdog, ham, fish burger and hamburger.
Secondly, defendants-appellants' corporate or business
name appearing in the food packages and signages are
written in silhouette red-orange letters with the "b" and
"m" in upper case letters. Above the words "Big Mak" are
the upper case letter "L.C.". Below the words "Big Mak" are
the words "Burger, Inc." spelled out in upper case letters.
Furthermore, said corporate or business name appearing in
such food packages and signages is always accompanied
by the company mascot, a young chubby boy named Maky
who wears a red T-shirt with the upper case "m" appearing
therein and a blue lower garment. Finally, the defendantsappellants' food packages are made of plastic material.
xxxx
xxx [I]t is readily apparent to the naked eye that there
appears a vast difference in the appearance of the product
and the manner that the tradename "Big Mak" is being
used and presented to the public. As earlier noted, there
are glaring dissimilarities between plaintiffs-appellees'
trademark and defendants-appellants' corporate name.
Plaintiffs-appellees' product carrying the trademark "B[ig]
M[ac]" is a double decker sandwich (depicted in the tray
mat containing photographs of the various food products
xxx sold in a Styrofoam box with the "McDonald's" logo and
trademark in red, bl[o]ck capital letters printed thereon xxx
at a price which is more expensive than the defendantsappellants' comparable food products. In order to buy a
"Big Mac", a customer needs to visit an air-conditioned
"McDonald's" restaurant usually located in a nearby
commercial center, advertised and identified by its logo -

the umbrella "M", and its mascot "Ronald McDonald". A


typical McDonald's restaurant boasts of a playground for
kids, a second floor to accommodate additional customers,
a drive-thru to allow customers with cars to make orders
without alighting from their vehicles, the interiors of the
building are well-lighted, distinctly decorated and painted
with pastel colors xxx. In buying a "B[ig] M[ac]", it is
necessary to specify it by its trademark. Thus, a customer
needs to look for a "McDonald's" and enter it first before he
can find a hamburger sandwich which carry the mark "Big
Mac". On the other hand, defendants-appellants sell their
goods through snack vans xxxx
Anent the allegation that defendants-appellants are guilty
of unfair competition, We likewise find the same untenable.
Unfair competition is defined as "the employment of
deception or any other means contrary to good faith by
which a person shall pass off the goods manufactured by
him or in which he deals, or his business, or service, for
those of another who has already established good will for
his similar good, business or services, or any acts
calculated to produce the same result" (Sec. 29, Rep. Act
No. 166, as amended).
To constitute unfair competition therefore it must
necessarily follow that there was malice and that the entity
concerned was in bad faith.
In the case at bar, We find no sufficient evidence adduced
by plaintiffs-appellees that defendants-appellants
deliberately tried to pass off the goods manufactured by
them for those of plaintiffs-appellees. The mere suspected
similarity in the sound of the defendants-appellants'
corporate name with the plaintiffs-appellees' trademark is
not sufficient evidence to conclude unfair competition.
Defendants-appellants explained that the name "M[ak]" in
their corporate name was derived from both the first
names of the mother and father of defendant Francis Dy,
whose names are Maxima and Kimsoy. With this
explanation, it is up to the plaintiffs-appellees to prove bad
faith on the part of defendants-appellants. It is a settled
rule that the law always presumes good faith such that any

person who seeks to be awarded damages due to acts of


another has the burden of proving that the latter acted in
bad faith or with ill motive. 21
Petitioners sought reconsideration of the Court of Appeals' Decision
but the appellate court denied their motion in its Resolution of 11
July 2000.
Hence, this petition for review.
Petitioners raise the following grounds for their petition:
I. THE COURT OF APPEALS ERRED IN FINDING THAT
RESPONDENTS' CORPORATE NAME "L.C. BIG MAK BURGER,
INC." IS NOT A COLORABLE IMITATION OF THE
MCDONALD'S TRADEMARK "BIG MAC", SUCH COLORABLE
IMITATION BEING AN ELEMENT OF TRADEMARK
INFRINGEMENT.
A. Respondents use the words "Big Mak" as
trademark for their products and not merely as
their business or corporate name.
B. As a trademark, respondents' "Big Mak" is
undeniably and unquestionably similar to
petitioners' "Big Mac" trademark based on the
dominancy test and the idem sonans test resulting
inexorably in confusion on the part of the
consuming public.
II. THE COURT OF APPEALS ERRED IN REFUSING TO
CONSIDER THE INHERENT SIMILARITY BETWEEN THE MARK
"BIG MAK" AND THE WORD MARK "BIG MAC" AS AN
INDICATION OF RESPONDENTS' INTENT TO DECEIVE OR
DEFRAUD FOR PURPOSES OF ESTABLISHING UNFAIR
COMPETITION.22
Petitioners pray that we set aside the Court of Appeals' Decision
and reinstate the RTC Decision.

In their Comment to the petition, respondents question the


propriety of this petition as it allegedly raises only questions of
fact. On the merits, respondents contend that the Court of Appeals
committed no reversible error in finding them not liable for
trademark infringement and unfair competition and in ordering
petitioners to pay damages.
The Issues
The issues are:
1. Procedurally, whether the questions raised in this petition are
proper for a petition for review under Rule 45.
2. On the merits, (a) whether respondents used the words "Big
Mak" not only as part of the corporate name "L.C. Big Mak Burger,
Inc." but also as a trademark for their hamburger products, and (b)
whether respondent corporation is liable for trademark
infringement and unfair competition.23
The Court's Ruling
The petition has merit.
On Whether the Questions Raised in the Petition are Proper
for a Petition for Review
A party intending to appeal from a judgment of the Court of
Appeals may file with this Court a petition for review under Section
1 of Rule 45 ("Section 1")24 raising only questions of law. A question
of law exists when the doubt or difference arises on what the law is
on a certain state of facts. There is a question of fact when the
doubt or difference arises on the truth or falsity of the alleged
facts. 25
Here, petitioners raise questions of fact and law in assailing the
Court of Appeals' findings on respondent corporation's non-liability
for trademark infringement and unfair competition. Ordinarily, the
Court can deny due course to such a petition. In view, however, of
the contradictory findings of fact of the RTC and Court of Appeals,
the Court opts to accept the petition, this being one of the

recognized exceptions to Section 1.26 We took a similar course of


action in Asia Brewery, Inc. v. Court of Appeals27 which also
involved a suit for trademark infringement and unfair competition
in which the trial court and the Court of Appeals arrived at
conflicting findings.
On the Manner Respondents Used
"Big Mak" in their Business
Petitioners contend that the Court of Appeals erred in ruling that
the corporate name "L.C. Big Mak Burger, Inc." appears in the
packaging for respondents' hamburger products and not the words
"Big Mak" only.
The contention has merit.
The evidence presented during the hearings on petitioners' motion
for the issuance of a writ of preliminary injunction shows that the
plastic wrappings and plastic bags used by respondents for their
hamburger sandwiches bore the words "Big Mak." The other
descriptive words "burger" and "100% pure beef" were set in
smaller type, along with the locations of branches. 28 Respondents'
cash invoices simply refer to their hamburger sandwiches as "Big
Mak."29 It is respondents' snack vans that carry the words "L.C. Big
Mak Burger, Inc."30
It was only during the trial that respondents presented in evidence
the plastic wrappers and bags for their hamburger sandwiches
relied on by the Court of Appeals.31 Respondents' plastic wrappers
and bags were identical with those petitioners presented during
the hearings for the injunctive writ except that the letters "L.C."
and the words "Burger, Inc." in respondents' evidence were added
above and below the words "Big Mak," respectively. Since
petitioners' complaint was based on facts existing before and
during the hearings on the injunctive writ, the facts established
during those hearings are the proper factual bases for the
disposition of the issues raised in this petition.
On the Issue of Trademark Infringement

Section 22 ("Section 22) of Republic Act No. 166, as amended ("RA


166"), the law applicable to this case,32 defines trademark
infringement as follows:
Infringement, what constitutes. Any person who [1] shall
use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of
any registered mark or trade-name in connection with the
sale, offering for sale, or advertising of any goods, business
or services on or in connection with which such use is likely
to cause confusion or mistake or to deceive purchasers or
others as to the source or origin of such goods or services,
or identity of such business; or [2] reproduce, counterfeit,
copy, or colorably imitate any such mark or trade-name
and apply such reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or
services, shall be liable to a civil action by the registrant for
any or all of the remedies herein provided.33
Petitioners base their cause of action under the first part of Section
22, i.e. respondents allegedly used, without petitioners' consent, a
colorable imitation of the "Big Mac" mark in advertising and selling
respondents' hamburger sandwiches. This likely caused confusion
in the mind of the purchasing public on the source of the
hamburgers or the identity of the business.
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."34 Of these, it is the element of likelihood of confusion
that is the gravamen of trademark infringement.35
On the Validity of the "Big Mac"Mark
and McDonald's Ownership of such Mark
A mark is valid if it is "distinctive" and thus not barred from
registration under Section 436 of RA 166 ("Section 4"). However,
once registered, not only the mark's validity but also the
registrant's ownership of the mark is prima facie presumed. 37

Respondents contend that of the two words in the "Big Mac" mark,
it is only the word "Mac" that is valid because the word "Big" is
generic and descriptive (proscribed under Section 4[e]), and thus
"incapable of exclusive appropriation."38
The contention has no merit. The "Big Mac" mark, which should be
treated in its entirety and not dissected word for word, 39 is neither
generic nor descriptive. Generic marks are commonly used as the
name or description of a kind of goods,40 such as "Lite" for beer41
or "Chocolate Fudge" for chocolate soda drink.42 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,43 such as "Arthriticare" for arthritis medication.44
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.45 As such, it is highly
distinctive and thus valid. Significantly, the trademark "Little
Debbie" for snack cakes was found arbitrary or fanciful. 46
The Court also finds that petitioners have duly established
McDonald's exclusive ownership of the "Big Mac" mark. Although
Topacio and the Isaiyas Group registered the "Big Mac" mark ahead
of McDonald's, Topacio, as petitioners disclosed, had already
assigned his rights to McDonald's. The Isaiyas Group, on the other
hand, registered its trademark only in the Supplemental Register. A
mark which is not registered in the Principal Register, and thus not
distinctive, has no real protection.47 Indeed, we have held that
registration in the Supplemental Register is not even a prima facie
evidence of the validity of the registrant's exclusive right to use the
mark on the goods specified in the certificate.48
On Types of Confusion
Section 22 covers two types of confusion arising from the use of
similar or colorable imitation marks, namely, confusion of goods
(product confusion) and confusion of business (source or origin
confusion). In Sterling Products International, Incorporated v.
Farbenfabriken Bayer Aktiengesellschaft, et al.,49 the Court
distinguished these two types of confusion, thus:
[Rudolf] Callman notes two types of confusion. The first is
the confusion of goods "in which event the ordinarily

prudent purchaser would be induced to purchase one


product in the belief that he was purchasing the other." xxx
The other is the confusion of business: "Here 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."
Under Act No. 666,50 the first trademark law, infringement was
limited to confusion of goods only, when the infringing mark is
used on "goods of a similar kind."51 Thus, no relief was afforded to
the party whose registered mark or its colorable imitation is used
on different although related goods. To remedy this situation,
Congress enacted RA 166 on 20 June 1947. In defining trademark
infringement, Section 22 of RA 166 deleted the requirement in
question and expanded its scope to include such use of the mark
or its colorable imitation that is likely to result in confusion on "the
source or origin of such goods or services, or identity of such
business."52 Thus, while there is confusion of goods when the
products are competing, confusion of business exists when the
products are non-competing but related enough to produce
confusion of affiliation.53
On Whether Confusion of Goods and
Confusion of Business are Applicable
Petitioners claim that respondents' use of the "Big Mak" mark on
respondents' hamburgers results in confusion of goods, particularly
with respect to petitioners' hamburgers labeled "Big Mac." Thus,
petitioners alleged in their complaint:
1.15. Defendants have unduly prejudiced and clearly
infringed upon the property rights of plaintiffs in the
McDonald's Marks, particularly the mark "B[ig] M[ac]".
Defendants' unauthorized acts are likely, and calculated, to
confuse, mislead or deceive the public into believing that
the products and services offered by defendant Big Mak
Burger, and the business it is engaged in, are approved
and sponsored by, or affiliated with, plaintiffs.54 (Emphasis
supplied)

Since respondents used the "Big Mak" mark on the same goods,
i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is
used, trademark infringement through confusion of goods is a
proper issue in this case.
Petitioners also claim that respondents' use of the "Big Mak" mark
in the sale of hamburgers, the same business that petitioners are
engaged in, results in confusion of business. Petitioners alleged in
their complaint:
1.10. For some period of time, and without the consent of
plaintiff McDonald's nor its licensee/franchisee, plaintiff
McGeorge, and in clear violation of plaintiffs' exclusive
right to use and/or appropriate the McDonald's marks,
defendant Big Mak Burger acting through individual
defendants, has been operating "Big Mak Burger", a fast
food restaurant business dealing in the sale of hamburger
and cheeseburger sandwiches, french fries and other food
products, and has caused to be printed on the wrapper of
defendant's food products and incorporated in its signages
the name "Big Mak Burger", which is confusingly similar to
and/or is a colorable imitation of the plaintiff McDonald's
mark "B[ig] M[ac]", xxx. Defendant Big Mak Burger has
thus unjustly created the impression that its
business is approved and sponsored by, or affiliated
with, plaintiffs. xxxx
2.2 As a consequence of the acts committed by
defendants, which unduly prejudice and infringe upon the
property rights of plaintiffs McDonald's and McGeorge as
the real owner and rightful proprietor, and the
licensee/franchisee, respectively, of the McDonald's marks,
and which are likely to have caused confusion or
deceived the public as to the true source,
sponsorship or affiliation of defendants' food
products and restaurant business, plaintiffs have
suffered and continue to suffer actual damages in the form
of injury to their business reputation and goodwill, and of
the dilution of the distinctive quality of the McDonald's
marks, in particular, the mark "B[ig] M[ac]".55 (Emphasis
supplied)

Respondents admit that their business includes selling hamburger


sandwiches, the same food product that petitioners sell using the
"Big Mac" mark. Thus, trademark infringement through confusion
of business is also a proper issue in this case.
Respondents assert that their "Big Mak" hamburgers cater mainly
to the low-income group while petitioners' "Big Mac" hamburgers
cater to the middle and upper income groups. Even if this is true,
the likelihood of confusion of business remains, since the lowincome group might be led to believe that the "Big Mak"
hamburgers are the low-end hamburgers marketed by petitioners.
After all, petitioners have the exclusive right to use the "Big Mac"
mark. On the other hand, respondents would benefit by associating
their low-end hamburgers, through the use of the "Big Mak" mark,
with petitioners' high-end "Big Mac" hamburgers, leading to
likelihood of confusion in the identity of business.
Respondents further claim that petitioners use the "Big Mac" mark
only on petitioners' double-decker hamburgers, while respondents
use the "Big Mak" mark on hamburgers and other products like
siopao, noodles and pizza. Respondents also point out that
petitioners sell their Big Mac double-deckers in a styrofoam box
with the "McDonald's" logo and trademark in red, block letters at a
price more expensive than the hamburgers of respondents. In
contrast, respondents sell their Big Mak hamburgers in plastic
wrappers and plastic bags. Respondents further point out that
petitioners' restaurants are air-conditioned buildings with drivethru service, compared to respondents' mobile vans.
These and other factors respondents cite cannot negate the
undisputed fact that respondents use their "Big Mak" mark on
hamburgers, the same food product that petitioners' sell with the
use of their registered mark "Big Mac." Whether a hamburger is
single, double or triple-decker, and whether wrapped in plastic or
styrofoam, it remains the same hamburger food product. Even
respondents' use of the "Big Mak" mark on non-hamburger food
products cannot excuse their infringement of petitioners'
registered mark, otherwise registered marks will lose their
protection under the law.
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 Court has recognized that the
registered trademark owner enjoys protection in product and
market areas that are the normal potential expansion of his
business. Thus, the Court has declared:
Modern law recognizes that the protection to which the
owner of a trademark is entitled is not limited to guarding
his goods or business from actual market competition with
identical or similar products of the parties, but extends to
all cases in which the use by a junior appropriator of a
trade-mark or trade-name is likely to lead to a confusion of
source, as where prospective purchasers would be misled
into thinking that the complaining party has extended his
business into the field (see 148 ALR 56 et seq; 53 Am Jur.
576) or is in any way connected with the activities of the
infringer; or when it forestalls the normal potential
expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur.
576, 577).56 (Emphasis supplied)
On Whether Respondents' Use of the "Big Mak"
Mark Results in Likelihood of Confusion
In determining likelihood of confusion, jurisprudence has developed
two tests, the dominancy test and the holistic test. 57 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.
The Court of Appeals, in finding that there is no likelihood of
confusion that could arise in the use of respondents' "Big Mak"
mark on hamburgers, relied on the holistic test. Thus, the Court of
Appeals ruled that "it is not sufficient that a similarity exists in
both name(s), but that more importantly, the overall presentation,
or in their essential, substantive and distinctive parts is such as
would likely MISLEAD or CONFUSE persons in the ordinary course of
purchasing the genuine article." The holistic test considers the two
marks in their entirety, as they appear on the goods with their
labels and packaging. It is not enough to consider their words and
compare the spelling and pronunciation of the words.58

Respondents now vigorously argue that the Court of Appeals'


application of the holistic test to this case is correct and in accord
with prevailing jurisprudence.
This Court, however, has relied on the dominancy test rather than
the holistic test. The dominancy test considers the dominant
features in the competing marks in determining whether they are
confusingly similar. Under the dominancy test, courts give greater
weight to the similarity of the appearance of the product arising
from the adoption of the dominant features of the registered mark,
disregarding minor differences.59 Courts will consider more the
aural and visual impressions created by the marks in the public
mind, giving little weight to factors like prices, quality, sales outlets
and market segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents,60
the Court ruled:
xxx It has been consistently held that the question of
infringement of a trademark is to be determined by the
test of dominancy. Similarity in size, form and color, while
relevant, is not conclusive. If the competing trademark
contains the main or essential or dominant features
of another, and confusion and deception is likely to
result, infringement takes place. Duplication or
imitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate. (G.
Heilman Brewing Co. vs. Independent Brewing Co., 191 F.,
489, 495, citing Eagle White Lead Co. vs. Pflugh (CC) 180
Fed. 579). 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. (Auburn Rubber Corporation
vs. Honover Rubber Co., 107 F. 2d 588; xxx) (Emphasis
supplied.)
The Court reiterated the dominancy test in Lim Hoa v. Director
of Patents,61 Phil. Nut Industry, Inc. v. Standard Brands
Inc.,62 Converse Rubber Corporation v. Universal Rubber
Products, Inc.,63 and Asia Brewery, Inc. v. Court of Appeals.64
In the 2001 case of Societe Des Produits Nestl, S.A. v. Court
of Appeals,65 the Court explicitly rejected the holistic test in this
wise:

[T]he totality or holistic test is contrary to the


elementary postulate of the law on trademarks and
unfair competition that confusing similarity is to be
determined on the basis of visual, aural, connotative
comparisons and overall impressions engendered by the
marks in controversy as they are encountered in the
realities of the marketplace. (Emphasis supplied)
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. First, "Big
Mak" sounds exactly the same as "Big Mac." Second, the first word
in "Big Mak" is exactly the same as the first word in "Big Mac."
Third, the first two letters in "Mak" are the same as the first two
letters in "Mac." Fourth, the last letter in "Mak" while a "k" sounds
the same as "c" when the word "Mak" is pronounced. Fifth, in
Filipino, the letter "k" replaces "c" in spelling, thus "Caloocan" is
spelled "Kalookan."
In short, aurally the two marks are the same, with the first word of
both marks phonetically the same, and the second word of both
marks also phonetically the same. Visually, the two marks have
both two words and six letters, with the first word of both marks
having the same letters and the second word having the same first
two letters. In spelling, considering the Filipino language, even the
last letters of both marks are the same.
Clearly, 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.
The Court has taken into account the aural effects of the words
and letters contained in the marks in determining the issue of
confusing similarity. Thus, in Marvex Commercial Co., Inc. v.
Petra Hawpia & Co., et al.,66 the Court held:

The following random list of confusingly similar sounds in


the matter of trademarks, culled from Nims, Unfair
Competition and Trade Marks, 1947, Vol. 1, will reinforce
our view that "SALONPAS" and "LIONPAS" are confusingly
similar in sound: "Gold Dust" and "Gold Drop"; "Jantzen"
and "Jass-Sea"; "Silver Flash" and "Supper Flash";
"Cascarete" and "Celborite"; "Celluloid" and "Cellonite";
"Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean";
"Hebe" and "Meje"; "Kotex" and "Femetex"; "Zuso" and
"Hoo Hoo". Leon Amdur, in his book "Trade-Mark Law and
Practice", pp. 419-421, cities, as coming within the purview
of the idem sonans rule, "Yusea" and "U-C-A", "Steinway
Pianos" and "Steinberg Pianos", and "Seven-Up" and
"Lemon-Up". In Co Tiong vs. Director of Patents, this Court
unequivocally said that "Celdura" and "Cordura" are
confusingly similar in sound; this Court held in Sapolin Co.
vs. Balmaceda, 67 Phil. 795 that the name "Lusolin" is an
infringement of the trademark "Sapolin", as the sound of
the two names is almost the same. (Emphasis supplied)
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."
Petitioners' aggressive promotion of the "Big Mac" mark, as borne
by their advertisement expenses, has built goodwill and reputation
for such mark making it one of the easily recognizable marks in the
market today. This increases the likelihood that consumers will
mistakenly associate petitioners' hamburgers and business with
those of respondents'.
Respondents' inability to explain sufficiently how and why they
came to choose "Big Mak" for their hamburger sandwiches
indicates their intent to imitate petitioners' "Big Mac" mark.
Contrary to the Court of Appeals' finding, respondents' claim that
their "Big Mak" mark was inspired by the first names of respondent
Dy's mother (Maxima) and father (Kimsoy) is not credible. As
petitioners well noted:

[R]espondents, particularly Respondent Mr. Francis Dy,


could have arrived at a more creative choice for a
corporate name by using the names of his parents,
especially since he was allegedly driven by sentimental
reasons. For one, he could have put his father's name
ahead of his mother's, as is usually done in this patriarchal
society, and derived letters from said names in that order.
Or, he could have taken an equal number of letters (i.e.,
two) from each name, as is the more usual thing done.
Surely, the more plausible reason behind Respondents'
choice of the word "M[ak]", especially when taken in
conjunction with the word "B[ig]", was their intent to take
advantage of Petitioners' xxx "B[ig] M[ac]" trademark, with
their alleged sentiment-focused "explanation" merely
thought of as a convenient, albeit unavailing, excuse or
defense for such an unfair choice of name.67
Absent proof that respondents' adoption of the "Big Mak" mark was
due to honest mistake or was fortuitous,68 the inescapable
conclusion is that respondents adopted the "Big Mak" mark to "ride
on the coattails" of the more established "Big Mac" mark. 69 This
saves respondents much of the expense in advertising to create
market recognition of their mark and hamburgers.70
Thus, we hold that confusion is likely to result in the public mind.
We sustain petitioners' claim of trademark infringement.
On the Lack of Proof of
Actual Confusion
Petitioners' failure to present proof of actual confusion does not
negate their claim of trademark infringement. As noted in
American Wire & Cable Co. v. Director of Patents,71 Section
22 requires the less stringent standard of "likelihood of confusion"
only. While proof of actual confusion is the best evidence of
infringement, its absence is inconsequential.72
On the Issue of Unfair Competition
Section 29 ("Section 29")73 of RA 166 defines unfair competition,
thus:

xxxx
Any person who will employ deception or any other means
contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business,
or services for those of the one having established such
goodwill, or who shall commit any acts calculated to
produce said result, shall be guilty of unfair competition,
and shall be subject to an action therefor.
In particular, and without in any way limiting the scope of
unfair competition, the following shall be deemed
guilty of unfair competition:
(a) Any person, who in selling his goods shall give
them the general appearance of goods of another
manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in which
they are contained, or the devices or words thereon, or
in any feature of their appearance, which would be likely to
influence purchasers to believe that the goods offered are
those of a manufacturer or dealer, other than the actual
manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the public
and defraud another of his legitimate trade, or any
subsequent vendor of such goods or any agent of any
vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who
employs any other means calculated to induce the false
belief that such person is offering the services of another
who has identified such services in the mind of the public;
or
(c) Any person who shall make any false statement in the
course of trade or who shall commit any other act contrary
to good faith of a nature calculated to discredit the goods,
business or services of another. (Emphasis supplied)
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. 74 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. 75 Actual fraudulent intent need not
be shown.76
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.77
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.78
To support their claim of unfair competition, petitioners allege that
respondents fraudulently passed off their hamburgers as "Big Mac"
hamburgers. Petitioners add that respondents' fraudulent intent
can be inferred from the similarity of the marks in question. 79
Passing off (or palming off) takes place where the defendant, by
imitative devices on the general appearance of the goods,
misleads prospective purchasers into buying his merchandise
under the impression that they are buying that of his competitors. 80
Thus, the defendant gives his goods the general appearance of the
goods of his competitor with the intention of deceiving the public
that the goods are those of his competitor.
The RTC described the respective marks and the goods of
petitioners and respondents in this wise:
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." 81
(Emphasis supplied)
Respondents point to these dissimilarities as proof that they did
not give their hamburgers the general appearance of petitioners'
"Big Mac" hamburgers.
The dissimilarities in the packaging are minor compared to the
stark similarities in the words that give respondents' "Big Mak"
hamburgers the general appearance of petitioners' "Big Mac"
hamburgers. Section 29(a) expressly provides that the similarity in
the general appearance of the goods may be in the "devices or
words" used on the wrappings. Respondents have applied on their
plastic wrappers and bags almost the same words that petitioners
use on their styrofoam box. What attracts the attention of the
buying public are the words "Big Mak" which are almost the same,
aurally and visually, as the words "Big Mac." The dissimilarities in
the material and other devices are insignificant compared to the
glaring similarity in the words used in the wrappings.
Section 29(a) also provides that the defendant gives "his goods the
general appearance of goods of another manufacturer."
Respondents' goods are hamburgers which are also the goods of
petitioners. If respondents sold egg sandwiches only instead of
hamburger sandwiches, their use of the "Big Mak" mark would not
give their goods the general appearance of petitioners' "Big Mac"
hamburgers. In such case, there is only trademark infringement
but no unfair competition. However, 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.
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.
Had respondents' placed a notice on their plastic wrappers and
bags that the hamburgers are sold by "L.C. Big Mak Burger, Inc.",
then they could validly claim that they did not intend to deceive
the public. In such case, there is only trademark infringement but
no unfair competition.82 Respondents, however, did not give such
notice. We hold that as found by the RTC, respondent corporation is
liable for unfair competition.
The Remedies Available to Petitioners
Under Section 2383 ("Section 23") in relation to Section 29 of RA
166, a plaintiff who successfully maintains trademark infringement
and unfair competition claims is entitled to injunctive and
monetary reliefs. Here, the RTC did not err in issuing the injunctive
writ of 16 August 1990 (made permanent in its Decision of 5
September 1994) and in ordering the payment of P400,000 actual
damages in favor of petitioners. The injunctive writ is indispensable
to prevent further acts of infringement by respondent corporation.
Also, the amount of actual damages is a reasonable percentage
(11.9%) of respondent corporation's gross sales for three (19881989 and 1991) of the six years (1984-1990) respondents have
used the "Big Mak" mark.84
The RTC also did not err in awarding exemplary damages by way of
correction for the public good85 in view of the finding of unfair
competition where intent to deceive the public is essential. The
award of attorney's fees and expenses of litigation is also in
order.86

WHEREFORE, we GRANT the instant petition. We SET ASIDE the


Decision dated 26 November 1999 of the Court of Appeals and its
Resolution dated 11 July 2000 and REINSTATE the Decision dated 5
September 1994 of the Regional Trial Court of Makati, Branch 137,
finding respondent L.C. Big Mak Burger, Inc. liable for trademark
infringement and unfair competition.
SO ORDERED.
Davide, C.J. (Chairman), Quisumbing, Ynares-Santiago and Azcuna,
JJ., concur.

Aside from Big Mac sandwiches, McDonald's menu


includes cheeseburgers, special sandwiches, fried french
potatoes, chicken nuggets, fried fish sandwiches, shakes,
hot pies, sundaes, softdrinks, and other beverages.
6

Certificate of Registration No. 1,126,102.

Table napkins, tray liners, cups and food wrappers.

Labels, promotional items and packages.

10

TSN (Arlene Manalo), 26 July 1990, pp. 34-35.

McDonald's and petitioner McGeorge are referred to as


petitioners.
11

Footnotes
1

Under Rule 45 of the 1997 Rules of Civil Procedure.

Penned by Associate Justice Eloy R. Bello, Jr. with


Presiding Justice Jainal D. Rasul and Associate Justice
Ruben T. Reyes concurring.
2

Penned by Judge Santiago Ranada, Jr.

Itself a registered service mark.

Some of McDonald's registered marks representing food


items (f) and services (s) are: McDONALD'S HAMBURGERS
(s); McDONALD'S (f); RONALD McDONALD (s);
McDONALDLAND (s); McCHEESE & DESIGN (f); EGG
McMUFFIN (s); EGG McMUFFIN (f); McDONALDLAND (f);
McDONALD'S & ARCHES (s); McFEAST (f); McCHICKEN (f);
McDONALD'S & ARCHES (f); McDONUTS (f); McPIZZA (f);
McPIZZA (s); McHAPPY DAY (s); MINI MAC (s); McDOUBLE
(f); TOGETHER-McDONALD'S & YOU (s); CHICKEN
McNUGGETS (f); McDONALD'S & YOU (s); SUPER MAC (f);
McSNACK (s); MAC FRIES (f); McRIB (f); MAPLE McCRISP (f);
LITE MAC (f); BIG MAC (s); CHICKEN McSWISS (f);
McMUFFIN (f); McD.L.T. (f). (McDonald's Corporation v.
McBagel's, Inc., 649 F.Supp. 1268 [1986]).

12

Rizal, Laguna, Bulacan and Quezon.

E.g. pizzas, noodles, siopaos, hotdog sandwiches, ham


sandwiches, fish burgers, fruit juices, softdrinks and other
beverages.
13

Respondent corporation and private respondents are


referred to as respondents.
14

15

Records, p. 37.

16

Ibid., pp. 457-458.

17

Ibid., pp. 414-426.

18

Ibid., pp. 460-463.

19

Rollo, pp. 149-154.

20

Records, pp. 1431-1432.

21

Rollo, pp. 233-237 (Capitalization in the original).

22

Ibid., p. 24.

While petitioners seek to hold liable respondent


corporation only, the Court's opinion will refer not only to
the latter but also to all the respondents as all of them filed
the pleadings in this petition.

See A & H Sportswear Co. v. Victoria's Secret Stores, Inc.,


167 F.Supp.2d 770 (2001).
34

23

This provision states: "Filing of petition with Supreme


Court. A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of
Appeals, the Sandiganbayan, the Regional Trial Court or
other courts whenever authorized by law, may file with the
Supreme Court a verified petition for review on certiorari.
The petition shall raise only questions of law which must be
distinctly set forth."
24

Ramos, et al. v. Pepsi-Cola Bottling Co. of the Phils., et


al., 125 Phil. 701 (1967).
25

26

Ducusin, et al. v. CA, et al., 207 Phil. 248 (1983).

27

G.R. No. 103543, 5 July 1993, 224 SCRA 437.

28

Exhibits E-1 to 2, F-1 to 2 and G-1 to 2.

29

Exhibits E, F and G.

30

Exhibits L-10, L-16 to 27.

31

Exhibits 34, 36-37.

RA 166 has been superseded by Republic Act No. 8293


("RA 8293"), the Intellectual Property Code of the
Philippines, which took effect on 1 January 1998. Section
22 is substantially identical with Section 16 of the United
States' 1946 Trademark Act ("Lanham Act").
32

33

Superseded by Section 155 of RA 8293 ("Section 155").

Shaley's Inc. v. Covalt, 704 F.2d 426 (1983). Also referred


to as the "lynchpin" (Suncoast Tours, Inc. v. Lambert
Groups, Inc. 1999 WL 1034683 [1999]) or "touchstone"
(VMG Enterprises, Inc. v. F. Quesada and Franco, Inc., 788 F.
Supp. 648 [1992]) of trademark infringement.
35

This provision states: "Registration of trade-marks, tradenames and service-marks on the principal register. There
is hereby established a register of trade-marks, tradenames and service-marks which shall be known as the
principal register. The owner of a trade-mark, trade-name
or service-mark used to distinguish his goods, business or
services from the goods, business or services of others
shall have the right to register the same on the principal
register, unless it:
36

(a) Consists of or comprises immoral, deceptive or


scandalous matter; or matter which may disparage
or falsely suggest a connection with persons, living
or dead, institutions, beliefs, or national symbols,
or bring them into contempt or disrepute;
(b) Consists of or comprises the flag or coat of
arms or other insignia of the Philippines or any of
its political subdivisions, or of any foreign nation, or
any simulation thereof;
(c) Consists of or comprises a name, portrait, or
signature identifying a particular living individual
except by his written consent, or the name,
signature, or portrait of a deceased President of the
Philippines, during the life of his widow, if any,
except by the written consent of the widow;
(d) Consists of or comprises a mark or trade-name
which so resembles a mark or trade-name
registered in the Philippines or a mark or a tradename previously used in the Philippines by another
and not abandoned, as to be likely, when applied

to or used in connection with the goods, business


or services of the applicant, to cause confusion or
mistake or to deceive purchasers; or
(e) Consists of a mark or trade-name which, when
applied to or used in connection with the goods,
business or services of the applicant is merely
descriptive or deceptively misdescriptive of them,
or when applied to or used in connection with the
goods, business or services of the applicant is
primarily geographically descriptive or deceptively
misdescriptive of them, or is primarily merely a
surname;

place once the trademark has become "incontestable" i.e.


after the mark owner files affidavits stating that the mark
is registered and has been in continuous use for five
consecutive years; that there is no pending proceeding;
and that there has been no adverse decision concerning
the registrant's ownership or right to registration (See Luis
Vuitton Malletier and Oakley, Inc. v. Veit, 211 F.Supp.2d 556
[2002]). However, both RA 166 (Section 12) and RA 8293
(Section 145) require the filing of the affidavit attesting to
the continuous use of the mark for five years and, under
Section 145, failure to file such affidavit will result in the
removal of the mark from the Register.
38

(f) Except as expressly excluded in paragraphs (a),


(b), (c) and (d) of this section nothing herein shall
prevent the registration of a mark or trade-name
used by the applicant which has become distinctive
of the applicant's goods, business or services. The
Director may accept as prima facie evidence that
the mark or trade-name has become distinctive, as
applied to or used in connection with the
applicant's goods, business or services, proof of
substantially exclusive and continuous use thereof
as a mark or trade-name by the applicant in
connection with the sale of goods, business or
services for five years next preceding the date of
the filing of the application for its registration." This
has been superseded by Section 123 of RA 8293.

Rollo, pp. 525-527.

Societe Des Produits Nestl, S.A. v. Court of Appeals, G.R.


No. 112012, 4 April 2001, 356 SCRA 207; McKee Baking Co.
v. Interstate Brands Corporation, 738 F. Supp. 1272 (1990).
39

Societe Des Produits Nestl, S.A. v. Court of Appeals,


supra note 39; Miller Brewing Co. v. Heileman Brewing Co.,
561 F.2d 75 (1977).
40

Miller Brewing Co. v. Heileman Brewing Co., supra note


40.
41

42

A. J. Canfield Co. v. Honickman, 808 F.2d 291 (1986).

Societe Des Produits Nestl, S.A. v. Court of Appeals,


supra note 39 citing 43(A) of the Lanham Act, as
amended.
43

Section 20, RA 166. This provision states: "Certificate of


registration prima facie evidence of validity. A certificate
of registration of a mark or trade-name shall be prima facie
evidence of the validity of the registration, the registrant's
ownership of the mark or trade-name, and of the
registrant's exclusive right to use the same in connection
with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated
therein." This has been superseded by Section 138 of RA
8293. Neither RA 166 nor RA 8293 provides when the
presumption of validity and ownership becomes
indubitable. In contrast, under the Lanham Act, as
amended, (15 United States Code 1065), such takes
37

44

Bernard v. Commerce Drug Co., 964 F.2d 1338 (1992).

45

Keebler Co. v. Rovira Biscuit Corp., 624 F.2d 366 (1980).

McKee Baking Co. v. Interstate Brands Corporation, supra


note 39.
46

See A. Miller and M. Davis, Intellectual Property, Patents,


Trademarks and Copyright in a Nutshell 177-178 (1983).
47

See Lorenzana v. Macagba, No. L-33773, 22 October


1987, 154 SCRA 723; La Chemise Lacoste, S.A. v. Hon.
Fernandez, etc., et al. 214 Phil. 332 (1984). RA 8293 no
longer provides for a Supplemental Register and instead
mandates a single registry system (Section 137). Under
Section 239, marks registered in the Supplemental Register
under RA 166 will remain in force but are no longer subject
to renewal.
48

49

137 Phil. 838 (1969).

50

Enacted on 6 March 1903.

Section 3 of Act No. 666 provides: "The ownership or


possession of a trade-mark, heretofore or hereafter
appropriated, as in the foregoing section provided, shall be
recognized and protected in the same manner and to the
same extent, as are other property rights known to the law.
To this end any person entitled to the exclusive use of a
trade-mark to designate the origin or ownership of goods
he has made or deals in may recover damages in a civil
action from any person who has sold goods of a similar
kind, bearing such trade-mark, and the measure of the
damages suffered, at the option of the complaining party,
shall be either the reasonable profit which the complaining
party would have made had the defendant not sold the
goods with the trade-mark aforesaid, or the profit which
the defendant actually made out of the sale of the goods
with the trade-mark, and in cases where actual intent to
mislead the public or to defraud the owner of the trademark shall be shown, in the discretion of the court, the
damages may be doubled. The complaining party, upon
proper showing, may have a preliminary injunction,
restraining the defendant temporarily from use of the
trade-mark pending the hearing, to be granted or dissolved
in the manner provided in the Code of Civil Procedure, and
such injunction upon final hearing, if the complainant's
property in the trade-mark and the defendant's violation
thereof shall be fully established, shall be made perpetual,
and this injunction shall be part of the judgment for
damages to be rendered in the same cause as above
provided." (Emphasis supplied)
51

The United States Congress had introduced the same


amendment to the Lanham Act in 1946. In 1962, the US
Congress again amended Section 16 of the Lanham Act
("Sec. 43(A)") by deleting the phrase "the source or origin
of such goods or services, or identity of such business" in
the definition of trademark infringement. This led courts in
that jurisdiction to hold that post-sale confusion by the
public at large (Esercizio v. Roberts, 944 F.2d 1235 [1991].
See also Koppers Company, Inc. v. Krup-Koppers, 517
F.Supp. 836 [1981]) or "subliminal confusion," defined as
confusion on a subliminal or subconscious level, causing
the consumer to identify the properties and reputation of
one product with those of another, although he can identify
the particular manufacturer of each, (Ortho Pharmaceutical
Corporation v. American Cyanamid Company, 361 F.Supp.
1032 [1973]. See also Farberware, Inc. v. Mr. Coffee, Inc.,
740 F.Supp. 291 (1990); Dreyfus Fund Incorporated v. Royal
Bank of Canada, 525 F. Supp. 1108 [1981]) are sufficient to
sustain a trademark infringement claim. Section 155
substantially reproduces Sec. 43(A).
52

Agpalo, The Law on Trademark, Infringement and Unfair


Competition 45-46 (2000).
53

54

Records, p. 5.

55

Ibid., pp. 4, 6-7.

56

Sta. Ana v. Maliwat, et al., 133 Phil. 1006 (1968).

Societe Des Produits Nestl, S.A. v. Court of Appeals,


supra note 39; Emerald Garment Manufacturing
Corporation v. Court of Appeals, G.R. No. 100098, 29
December 1995, 251 SCRA 600.
57

V. Amador, Trademarks Under The Intellectual Property


Code 260 (1999).
58

59

Ibid., p. 263.

60

95 Phil. 1 (1954).

61

100 Phil. 214 (1956).

62

No. L-23035, 31 July 1975, 65 SCRA 575.

Co Tiong Sa v. Director of Patents, supra note 60; Clarke


v. Manila Candy Co., 36 Phil. 100 (1917).
77

See Q-Tips, Inc. v. Johnson & Johnson, 108 F.Supp 845


(1952).
78

63

No. L-27906, 8 January 1987, 147 SCRA 154.

64

Supra note 27.

65

Supra note 39.

66

125 Phil. 295 (1966).

67

Rollo, pp. 588-589.

Time v. Life Television Co. of St. Paul, 123 F. Supp. 470


(1954);

79

Rollo, pp. 40-45.

Suncoast Tours, Inc. v. Lambert Groups, Inc. 1999 WL


1034683 (1999).
80

81

Rollo, pp. 148-149.

82

See Q-Tips, Inc. v. Johnson & Johnson, supra note 78.

68

Conde Nast Publications v. Vogue School of Fashion


Modelling, 105 F. Supp. 325 (1952); Hanson v. Triangle
Publications, 163 F.2d 74 (1947).
69

See Fisons Horticulture, Inc. v. Vigoro Industries, Inc., 30


F.3d 466 (1994).
70

71

No. L-26557, 18 February 1970, 31 SCRA 544.

PACCAR Inc. v. Tele Scan Technologies, L.L.C., 319 F.3d


243 (2003).
72

73

Reiterated in Section 168 of RA 8293.

74

V. Amador, supra note 58 at 278.

Shell Co. of the Philippines, Ltd. v. Ins. Petroleum Refining


Co., Ltd., 120 Phil. 434 (1964); "La Insular" v. Jao Oge, 42
Phil. 366 (1921).
75

This provision reads: "Actions, and damages and


injunction for infringement. Any person entitled to the
exclusive use of a registered mark or trade-name may
recover damages in a civil action from any person who
infringes his rights, and the measure of the damages
suffered shall be either the reasonable profit which the
complaining party would have made, had the defendant
not infringed his said rights, or the profit which the
defendant actually made out of the infringement, 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 of the value of
the services in connection with which the mark or tradename 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.
83

The complaining party, upon proper showing, may also be


granted injunction."
TSN, (Francis Dy), 15 March 1993, p. 32; TSN (Francis
Dy), 22 March 1993, pp. 1-2.
84

76

Alhambra Cigar, etc., Co. v. Mojica, 27 Phil. 266 (1914).

85

Article 2229, Civil Code.

86

Article 2208(1), Civil Code.

This is a petition for review on certiorari1 seeking to reverse and


set aside the Decision dated August 7, 20092 and the Resolution
dated October 28, 20093 of the Court of Appeals (CA) in CA-G.R. SP
No. 108627.
The antecedent facts and proceedings
On October 21, 2006, petitioner Dermaline, Inc. (Dermaline) filed
before the Intellectual Property Office (IPO) an application for
registration of the trademark "DERMALINE DERMALINE, INC."
(Application No. 4-2006011536). The application was published for
Opposition in the IPO E-Gazette on March 9, 2007.
On May 8, 2007, respondent Myra Pharmaceuticals, Inc. (Myra)
filed a Verified Opposition4 alleging that the trademark sought to
be registered by Dermaline so resembles its trademark
"DERMALIN" and will likely cause confusion, mistake and deception
to the purchasing public. Myra said that the registration of
Dermalines trademark will violate Section 1235 of Republic Act
(R.A.) No. 8293 (Intellectual Property Code of the Philippines). It
further alleged that Dermalines use and registration of its applied
trademark will diminish the distinctiveness and dilute the goodwill
of Myras "DERMALIN," registered with the IPO way back July 8,
1986, renewed for ten (10) years on July 8, 2006. Myra has been
extensively using "DERMALIN" commercially since October 31,
1977, and said mark is still valid and subsisting.

G.R. No. 190065

August 16, 2010

DERMALINE, INC., Petitioner,


vs.
MYRA PHARMACEUTICALS, INC. Respondent.
DECISION
NACHURA, J.:

Myra claimed that, despite Dermalines attempt to differentiate its


applied mark, the dominant feature is the term "DERMALINE,"
which is practically identical with its own "DERMALIN," more
particularly that the first eight (8) letters of the marks are identical,
and that notwithstanding the additional letter "E" by Dermaline,
the pronunciation for both marks are identical. Further, both marks
have three (3) syllables each, with each syllable identical in sound
and appearance, even if the last syllable of "DERMALINE" consisted
of four (4) letters while "DERMALIN" consisted only of three (3).
Myra also pointed out that Dermaline applied for the same mark
"DERMALINE" on June 3, 2003 and was already refused registration
by the IPO. By filing this new application for registration, Dermaline
appears to have engaged in a fishing expedition for the approval of

its mark. Myra argued that its intellectual property right over its
trademark is protected under Section 1476 of R.A. No. 8293.

Inc. under class 44 covering the aforementioned goods filed on 21


October 2006, is as it is hereby, REJECTED.

Myra asserted that the mark "DERMALINE DERMALINE, INC." is


aurally similar to its own mark such that the registration and use of
Dermalines applied mark will enable it to obtain benefit from
Myras reputation, goodwill and advertising and will lead the public
into believing that Dermaline is, in any way, connected to Myra.
Myra added that even if the subject application was under
Classification 447 for various skin treatments, it could still be
connected to the "DERMALIN" mark under Classification 58 for
pharmaceutical products, since ultimately these goods are very
closely related.

Let the file wrapper of DERMALINE, DERMALINE, INC. Stylized


Wordmark subject matter of this case be forwarded to the Bureau
of Trademarks (BOT) for appropriate action in accordance with this
Decision.

In its Verified Answer,9 Dermaline countered that a simple


comparison of the trademark "DERMALINE DERMALINE, INC." vis-vis Myras "DERMALIN" trademark would show that they have
entirely different features and distinctive presentation, thus it
cannot result in confusion, mistake or deception on the part of the
purchasing public. Dermaline contended that, in determining if the
subject trademarks are confusingly similar, a comparison of the
words is not the only determinant, but their entirety must be
considered in relation to the goods to which they are attached,
including the other features appearing in both labels. It claimed
that there were glaring and striking dissimilarities between the two
trademarks, such that its trademark "DERMALINE DERMALINE,
INC." speaks for itself (Res ipsa loquitur). Dermaline further argued
that there could not be any relation between its trademark for
health and beauty services from Myras trademark classified under
medicinal goods against skin disorders.

Expectedly, Dermaline appealed to the Office of the Director


General of the IPO. However, in an Order14 dated April 17, 2009,
the appeal was dismissed for being filed out of time.

The parties failed to settle amicably. Consequently, the preliminary


conference was terminated and they were directed to file their
respective position papers.10
On April 10, 2008, the IPO-Bureau of Legal Affairs rendered
Decision No. 2008-7011 sustaining Myras opposition pursuant to
Section 123.1(d) of R.A. No. 8293. It disposed
WHEREFORE, the Verified Opposition is, as it is, hereby SUSTAINED.
Consequently, Application Serial No. 4-2006-011536 for the mark
DERMALINE, DERMALINE, INC. Stylized Wordmark for Dermaline,

SO ORDERED.12
Aggrieved, Dermaline filed a motion for reconsideration, but it was
denied under Resolution No. 2009-12(D)13 dated January 16, 2009.

Undaunted, Dermaline appealed to the CA, but it affirmed and


upheld the Order dated April 17, 2009 and the rejection of
Dermalines application for registration of trademark. The CA
likewise denied Dermalines motion for reconsideration; hence, this
petition raising the issue of whether the CA erred in upholding the
IPOs rejection of Dermalines application for registration of
trademark.
The petition is without merit.
A trademark is any distinctive word, name, symbol, emblem, sign,
or device, or any combination thereof, adopted and used by a
manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by others.15
Inarguably, it is an intellectual property deserving protection by
law. In trademark controversies, each case must be scrutinized
according to its peculiar circumstances, such that jurisprudential
precedents should only be made to apply if they are specifically in
point.16
As Myra correctly posits, as a registered trademark owner, it has
the right under Section 147 of R.A. No. 8293 to prevent third
parties from using a trademark, or similar signs or containers for
goods or services, without its consent, identical or similar to its

registered trademark, where such use would result in a likelihood


of confusion.
In determining likelihood of confusion, case law has developed two
(2) tests, the Dominancy Test and the Holistic or Totality Test.
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks that might cause confusion
or deception.17 It is applied when the trademark sought to be
registered contains the main, essential and dominant features of
the earlier registered trademark, and confusion or deception is
likely to result. Duplication or imitation is not even required;
neither is it necessary that the label of the applied mark for
registration should suggest an effort to imitate. The important
issue is whether the use of the marks involved would likely cause
confusion or mistake in the mind of or deceive the ordinary
purchaser, or one who is accustomed to buy, and therefore to
some extent familiar with, the goods in question. 18 Given greater
consideration are the aural and visual impressions created by the
marks in the public mind, giving little weight to factors like prices,
quality, sales outlets, and market segments.19 The test of
dominancy is now explicitly incorporated into law in Section 155.1
of R.A. No. 8293 which provides
155.1. Use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark or the same container or a
dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including
other preparatory steps necessary to carry out the sale of any
goods or services on or in connection with which such use is likely
to cause confusion, or to cause mistake, or to deceive; (emphasis
supplied)
On the other hand, the Holistic Test entails a consideration of the
entirety of the marks as applied to the products, including labels
and packaging, in determining confusing similarity. The scrutinizing
eye of the observer must focus not only on the predominant words
but also on the other features appearing in both labels so that a
conclusion may be drawn as to whether one is confusingly similar
to the other.20

Relative to the question on confusion of marks and trade names,


jurisprudence has noted two (2) types of confusion, viz: (1)
confusion of goods (product confusion), where the ordinarily
prudent purchaser would be induced to purchase one product in
the belief that he was purchasing the other; and (2) confusion of
business (source or origin confusion), where, although the goods of
the parties are different, the product, the mark of which
registration is applied for by one party, is such as might reasonably
be assumed to originate with the registrant of an earlier product,
and the public would then be deceived either into that belief or into
the belief that there is some connection between the two parties,
though inexistent.21
In rejecting the application of Dermaline for the registration of its
mark "DERMALINE DERMALINE, INC.," the IPO applied the
Dominancy Test. It declared that both confusion of goods and
service and confusion of business or of origin were apparent in
both trademarks. It also noted that, per Bureau Decision No. 2007179 dated December 4, 2007, it already sustained the opposition
of Myra involving the trademark "DERMALINE" of Dermaline under
Classification 5. The IPO also upheld Myras right under Section 138
of R.A. No. 8293, which provides that a certification of registration
of a mark is prima facie evidence of the validity of the registration,
the registrants ownership of the mark, and of the registrants
exclusive right to use the same in connection with the goods and
those that are related thereto specified in the certificate.
We agree with the findings of the IPO. As correctly applied by the
IPO in this case, while there are no set rules that can be deduced
as what constitutes a dominant feature with respect to trademarks
applied for registration; usually, what are taken into account are
signs, color, design, peculiar shape or name, or some special,
easily remembered earmarks of the brand that readily attracts and
catches the attention of the ordinary consumer.22
Dermalines insistence that its applied trademark "DERMALINE
DERMALINE, INC." had differences "too striking to be mistaken"
from Myras "DERMALIN" cannot, therefore, be sustained. While it
is true that the two marks are presented differently Dermalines
mark is written with the first "DERMALINE" in script going
diagonally upwards from left to right, with an upper case "D"
followed by the rest of the letters in lower case, and the portion
"DERMALINE, INC." is written in upper case letters, below and

smaller than the long-hand portion; while Myras mark "DERMALIN"


is written in an upright font, with a capital "D" and followed by
lower case letters the likelihood of confusion is still apparent. This
is because they are almost spelled in the same way, except for
Dermalines mark which ends with the letter "E," and they are
pronounced practically in the same manner in three (3) syllables,
with the ending letter "E" in Dermalines mark pronounced silently.
Thus, when an ordinary purchaser, for example, hears an
advertisement of Dermalines applied trademark over the radio,
chances are he will associate it with Myras registered mark.
Further, Dermalines stance that its product belongs to a separate
and different classification from Myras products with the registered
trademark does not eradicate the possibility of mistake on the part
of the purchasing public to associate the former with the latter,
especially considering that both classifications pertain to
treatments for the skin.1avvphi1
Indeed, the registered trademark owner may use its mark on the
same or similar products, in different segments of the market, and
at different price levels depending on variations of the products for
specific segments of the market. The Court is cognizant that the
registered trademark owner enjoys protection in product and
market areas that are the normal potential expansion of his
business. Thus, we have held
Modern law recognizes that the protection to which the owner of a
trademark is entitled is not limited to guarding his goods or
business from actual market competition with identical or similar
products of the parties, but extends to all cases in which the use by
a junior appropriator of a trade-mark or trade-name is likely to lead
to a confusion of source, as where prospective purchasers would
be misled into thinking that the complaining party has extended
his business into the field (see 148 ALR 56 et seq; 53 Am Jur. 576)
or is in any way connected with the activities of the infringer; or
when it forestalls the normal potential expansion of his business (v.
148 ALR 77, 84; 52 Am. Jur. 576, 577).23 (Emphasis supplied)
Thus, the public may mistakenly think that Dermaline is connected
to or associated with Myra, such that, considering the current
proliferation of health and beauty products in the market, the
purchasers would likely be misled that Myra has already expanded
its business through Dermaline from merely carrying

pharmaceutical topical applications for the skin to health and


beauty services.
Verily, when one applies for the registration of a trademark or label
which is almost the same or that very closely resembles one
already used and registered by another, the application should be
rejected and dismissed outright, even without any opposition on
the part of the owner and user of a previously registered label or
trademark. This is intended not only to avoid confusion on the part
of the public, but also to protect an already used and registered
trademark and an established goodwill.24
Besides, the issue on protection of intellectual property, such as
trademarks, is factual in nature. The findings of the IPO, upheld on
appeal by the same office, and further sustained by the CA, bear
great weight and deserves respect from this Court. Moreover, the
decision of the IPO had already attained finality when Dermaline
failed to timely file its appeal with the IPO Office of the Director
General.
WHEREFORE, the petition is DENIED. The Decision dated August 7,
2009 and the Resolution dated October 28, 2009 of the Court of
Appeals in CA-G.R. SP No. 108627 are AFFIRMED. Costs against
petitioner.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice

ROBERTO A. ABAD
Associate Justice

JOSE CATRAL MENDOZA


Associate Justice

ATTESTATION

(d) Is identical with a registered mark belonging to


a different proprietor or a mark with an earlier filing
or priority date, in respect of:

I attest that the conclusions in the above Resolution were reached


in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

(i) The same goods or services, or

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

(ii) Closely related goods or services, or


(iii) If it nearly resembles such a mark as to be
likely to deceive or cause confusion;

CERTIFICATION
x x x (Emphasis supplied.)
Pursuant to Section 13, Article VIII of the Constitution and the
Division Chairperson's Attestation, I certify that the conclusions in
the above Resolution had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts
Division.
RENATO C. CORONA
Chief Justice

SEC. 147. Rights Conferred. 147.1. The owner of a


registered mark shall have the exclusive right to prevent all
third parties not having the owners consent from using in
the course of trade identical or similar signs or containers
for goods or services which are identical or similar to those
in respect of which the trademark is registered where such
use would result in a likelihood of confusion. In case of the
use of an identical sign for identical goods or services, a
likelihood of confusion shall be presumed.
6

147.2. The exclusive right of the owner of a wellknown mark defined in Subsection 123.1(e) which
is registered in the Philippines, shall extend to
goods and services which are not similar to those
in respect of which the mark is registered:
Provided, That use of that mark in relation to those
goods or services would indicate a connection
between those goods or services would indicate a
connection between those goods or services and
the owner of the registered mark: Provided further,
That the interests of the owner of the registered
mark are likely to be damaged by such use.

Footnotes
1

Rollo, pp. 3-18.

Penned by Associate Justice Martin S. Villarama, Jr. (now a


member of this Court), with Associate Justices Vicente S.E.
Veloso and Normandie B. Pizarro, concurring; id. at 19-32.
2

Id. at 32.

Id. at 78-86.

"FACIAL, BACK CLEANING, ACNE TREATMENT AND


CONTROL SKIN PEELING (FACE BODY, ARMPIT, ARMS AND
LEGS), SLIMMING, HAIR GROWER TREATMENT, SKIN
BLEACHING (FACE, BODY, ARMPIT, BODY & LEGS),
DERMALIFT (FACE LIFTING, BODY TONING, EYEBAG
REMOVAL), EXCESSIVE SWEATING, BODY ODOR
7

SEC. 123. Registrability. 123.1. A mark cannot be


registered if it:
5

xxx

TREATMENT AND CONTROL, OPEN PORES TREATMENT,


STRETCH MARK TREATMENT, BODY MASSAGE, EYELASH
PERMING, TATTOO (EYEBROW, UPPER AND LOWER LID, LIP),
WOMENS HAIRCUT, MENS HAIRCUT, KIDS HAIRCUT,
BLOW-DRY SETTING, UP-STYLE (LADIES), PERMING, TINT
(TOUCH UP), HIGHLIGHTS (CAP), HIGHLIGHTS (FOIL),
CELLOPHANE, HAIR COLOR, HAIR RELAXING, HAIR
TREATMENT/SPA, HOT OIL, FULL MAKE-UP, EYE MAKE-UP,
FOOT SPA WITH PEDICURE, FOOT SCRUB, MANICURE,
EYEBROW THREADING, UPPER LIP THREADING, FULL BODY
MASSAGE, HALF BODY MASSAGE, SAUNA."

Philip Morris, Inc. v. Fortune Tobacco Corporation, supra


at 359, citing Dy Buncio v. Tan Tiao Bok, 42 Phil 190, 196197 (1921).
18

McDonalds Corporation v. L.C. Big Mak Burger, Inc., 480


Phil. 402, 434 (2004).
19

Mighty Corporation v. E. & J. Gallo Winery, 478 Phil. 615,


659 (2004).
20

McDonalds Corporation v. L.C. Big Mak Burger, Inc.,


supra at 428, citing Sterling Products International,
Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et
al., 137 Phil 838, 852 (1969).
21

"TOPICAL ANTIBACTERIAL, ANTIFUNGAL, ANTISCABIES


PREPARATIONS FOR THE TREATMENT OF SKIN DISORDERS."
8

Rollo, pp. 87-93.

Position Paper (For the Opposer), rollo, pp. 94-106;


Position Paper for Dermaline, pp. 107-119.

22

Rollo, p. 47.

10

11

Id. at 37-50.

12

Id. at.26.

13

Id. at 52-53.

14

Id. at 34-35.

McDonalds Corporation v. L.C. Big Mak Burger, Inc.,


supra at 432, citing Sta. Ana v. Maliwat, et al., 133 Phil.
1006, 1013 (1968).
23

McDonalds Corporation v. L.C. Big Mak Burger, Inc.,


supra at 406, citing Faberge Incorporated v. Intermediate
Appellate Court, G.R. No. 71189, November 4, 1992, 215
SCRA 316, 320 and Chuanchow Soy & Canning Co. v. Dir. of
Patents and Villapania, 108 Phil. 833, 836.
24

Prosource International, Inc. v. Horphag Research


Management SA, G.R. No. 180073, November 25, 2009,
605 SCRA 523, 528; McDonalds Corporation v. MacJoy
Fastfood Corporation, G.R. No. 166115, February 2, 2007,
514 SCRA 95, 107.
15

Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R.


No. 158589, June 27, 2006, 493 SCRA 333, 356.
16

Amigo Manufacturing, Inc. v. Cluett Peabody Co., Inc.,


406 Phil. 905, 918 (2001).
17

G.R. No. 154342

July 14, 2004

MIGHTY CORPORATION and LA CAMPANA FABRICA DE


TABACO, INC., petitioner,
vs.
E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC.,
respondents.

DECISION

CORONA, J.:
In this petition for review on certiorari under Rule 45, petitioners
Mighty Corporation and La Campana Fabrica de Tabaco, Inc. (La
Campana) seek to annul, reverse and set aside: (a) the November
15, 2001 decision1 of the Court of Appeals (CA) in CA-G.R. CV No.
65175 affirming the November 26, 1998 decision, 2 as modified by
the June 24, 1999 order,3 of the Regional Trial Court of Makati City,
Branch 57 (Makati RTC) in Civil Case No. 93-850, which held
petitioners liable for, and permanently enjoined them from,
committing trademark infringement and unfair competition, and
which ordered them to pay damages to respondents E. & J. Gallo
Winery (Gallo Winery) and The Andresons Group, Inc. (Andresons);
(b) the July 11, 2002 CA resolution denying their motion for
reconsideration4 and (c) the aforesaid Makati RTC decision itself.
I.
The Factual Background
Respondent Gallo Winery is a foreign corporation not doing
business in the Philippines but organized and existing under the
laws of the State of California, United States of America (U.S.),
where all its wineries are located. Gallo Winery produces different
kinds of wines and brandy products and sells them in many
countries under different registered trademarks, including the
GALLO and ERNEST & JULIO GALLO wine trademarks.
Respondent domestic corporation, Andresons, has been Gallo
Winerys exclusive wine importer and distributor in the Philippines
since 1991, selling these products in its own name and for its own
account.5
Gallo Winerys GALLO wine trademark was registered in the
principal register of the Philippine Patent Office (now Intellectual
Property Office) on November 16, 1971 under Certificate of
Registration No. 17021 which was renewed on November 16, 1991

for another 20 years.6 Gallo Winery also applied for registration of


its ERNEST & JULIO GALLO wine trademark on October 11, 1990
under Application Serial No. 901011-00073599-PN but the records
do not disclose if it was ever approved by the Director of Patents. 7
On the other hand, petitioners Mighty Corporation and La Campana
and their sister company, Tobacco Industries of the Philippines
(Tobacco Industries), are engaged in the cultivation, manufacture,
distribution and sale of tobacco products for which they have been
using the GALLO cigarette trademark since 1973. 8
The Bureau of Internal Revenue (BIR) approved Tobacco Industries
use of GALLO 100s cigarette mark on September 14, 1973 and
GALLO filter cigarette mark on March 26, 1976, both for the
manufacture and sale of its cigarette products. In 1976, Tobacco
Industries filed its manufacturers sworn statement as basis for
BIRs collection of specific tax on GALLO cigarettes. 9
On February 5, 1974, Tobacco Industries applied for, but eventually
did not pursue, the registration of the GALLO cigarette trademark
in the principal register of the then Philippine Patent Office. 10
In May 1984, Tobacco Industries assigned the GALLO cigarette
trademark to La Campana which, on July 16, 1985, applied for
trademark registration in the Philippine Patent Office.11 On July 17,
1985, the National Library issued Certificate of Copyright
Registration No. 5834 for La Campanas lifetime copyright claim
over GALLO cigarette labels.12
Subsequently, La Campana authorized Mighty Corporation to
manufacture and sell cigarettes bearing the GALLO trademark. 13
BIR approved Mighty Corporations use of GALLO 100s cigarette
brand, under licensing agreement with Tobacco Industries, on May
18, 1988, and GALLO SPECIAL MENTHOL 100s cigarette brand on
April 3, 1989.14
Petitioners claim that GALLO cigarettes have been sold in the
Philippines since 1973, initially by Tobacco Industries, then by La
Campana and finally by Mighty Corporation.15
On the other hand, although the GALLO wine trademark was
registered in the Philippines in 1971, respondents claim that they

first introduced and sold the GALLO and ERNEST & JULIO GALLO
wines in the Philippines circa 1974 within the then U.S. military
facilities only. By 1979, they had expanded their Philippine market
through authorized distributors and independent outlets. 16
Respondents claim that they first learned about the existence of
GALLO cigarettes in the latter part of 1992 when an Andresons
employee saw such cigarettes on display with GALLO wines in a
Davao supermarket wine cellar section. 17 Forthwith, respondents
sent a demand letter to petitioners asking them to stop using the
GALLO trademark, to no avail.
II.
The Legal Dispute
On March 12, 1993, respondents sued petitioners 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 6 bis of the
Paris Convention for the Protection of Industrial Property (Paris
Convention)18 and RA 166 (Trademark Law),19 specifically, Sections
22 and 23 (for trademark infringement),20 29 and 3021 (for unfair
competition and false designation of origin) and 37 (for tradename
infringement).22 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 attorneys fees and litigation expenses. 23
In their answer, petitioners alleged, among other affirmative
defenses, that: petitioners 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.
In an order dated April 21, 1993,24 the Makati RTC denied, for lack
of merit, respondents prayer for the issuance of a writ of
preliminary injunction,25 holding that respondents GALLO
trademark registration certificate covered wines only, that
respondents wines and petitioners cigarettes were not related
goods and respondents failed to prove material damage or great
irreparable injury as required by Section 5, Rule 58 of the Rules of
Court.26
On August 19, 1993, the Makati RTC denied, for lack of merit,
respondents motion for reconsideration. The court reiterated that
respondents wines and petitioners cigarettes were not related
goods since the likelihood of deception and confusion on the part
of the consuming public was very remote. The trial court
emphasized that it could not rely on foreign rulings cited by
respondents "because the[se] cases were decided by foreign
courts on the basis of unknown facts peculiar to each case or upon
factual surroundings which may exist only within their jurisdiction.
Moreover, there [was] no showing that [these cases had] been
tested or found applicable in our jurisdiction."27
On February 20, 1995, the CA likewise dismissed respondents
petition for review on certiorari, docketed as CA-G.R. No. 32626,
thereby affirming the Makati RTCs denial of the application for
issuance of a writ of preliminary injunction against petitioners. 28
After trial on the merits, however, the Makati RTC, on November
26, 1998, held petitioners liable for, and permanently enjoined

them from, committing trademark infringement and unfair


competition with respect to the GALLO trademark:
WHEREFORE, judgment is rendered in favor of the plaintiff
(sic) and against the defendant (sic), to wit:
a. permanently restraining and enjoining
defendants, their distributors, trade outlets, and all
persons acting for them or under their instructions,
from (i) using E & Js registered trademark GALLO
or any other reproduction, counterfeit, copy or
colorable imitation of said trademark, either singly
or in conjunction with other words, designs or
emblems and other acts of similar nature, and (ii)
committing other acts of unfair competition against
plaintiffs by manufacturing and selling their
cigarettes in the domestic or export markets under
the GALLO trademark.
b. ordering defendants to pay plaintiffs
(i) actual and compensatory damages for
the injury and prejudice and impairment of
plaintiffs business and goodwill as a result
of the acts and conduct pleaded as basis
for this suit, in an amount equal to 10% of
FOURTEEN MILLION TWO HUNDRED THIRTY
FIVE THOUSAND PESOS
(PHP14,235,000.00) from the filing of the
complaint until fully paid;
(ii) exemplary damages in the amount of
PHP100,000.00;
(iii) attorneys fees and expenses of
litigation in the amount of
PHP1,130,068.91;
(iv) the cost of suit.
SO ORDERED."29

On June 24, 1999, the Makati RTC granted respondents motion for
partial reconsideration and increased the award of actual and
compensatory damages to 10% of P199,290,000 or P19,929,000.30
On appeal, the CA affirmed the Makati RTC decision and
subsequently denied petitioners motion for reconsideration.
III.
The Issues
Petitioners now seek relief from this Court contending that the 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; [b] GALLO cigarettes and GALLO wines
were identical, similar or related goods for the reason alone that
they were purportedly forms of vice; [c] both goods passed through
the same channels of trade and [d] petitioners were liable for
trademark infringement, unfair competition and damages. 31
Respondents, on the other hand, assert that this petition which
invokes Rule 45 does not involve pure questions of law, and hence,
must be dismissed outright.
IV.
Discussion
THE EXCEPTIONAL CIRCUMSTANCES
IN THIS CASE OBLIGE THE COURT TO REVIEW
THE CAS FACTUAL FINDINGS
As a general rule, a petition for review on certiorari under Rule 45
must raise only "questions of law"32 (that is, the doubt pertains to
the application and interpretation of law to a certain set of facts)
and not "questions of fact" (where the doubt concerns the truth or
falsehood of alleged facts),33 otherwise, the petition will be denied.
We are not a trier of facts and the Court of Appeals factual findings
are generally conclusive upon us.34

This case involves questions of fact which are directly related and
intertwined with questions of law. The resolution of the factual
issues concerning the goods similarity, identity, relation, channels
of trade, and acts of trademark infringement and unfair
competition is greatly dependent on the interpretation of
applicable laws. The controversy here is not simply the identity or
similarity of both parties trademarks but whether or not
infringement or unfair competition was committed, a conclusion
based on statutory interpretation. Furthermore, one or more of the
following exceptional circumstances oblige us to review the
evidence on record:35
(1) the conclusion is grounded entirely on speculation,
surmises, and conjectures;
(2) the inference of the Court of Appeals from its findings of
fact is manifestly mistaken, absurd and impossible;
(3) there is grave abuse of discretion;

trial court veered away from the law and well-settled


jurisprudence.
Thus, we give due course to the petition.
THE TRADEMARK LAW AND THE PARIS
CONVENTION ARE THE APPLICABLE LAWS,
NOT THE INTELLECTUAL PROPERTY CODE
We note that 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, 37
or about five years after the filing of the complaint:

(5) the appellate court, in making its findings, went beyond


the issues of the case, and the same are contrary to the
admissions of both the appellant and the appellee;

Defendants unauthorized use of the GALLO trademark


constitutes trademark infringement pursuant to Section 22
of Republic Act No. 166, Section 155 of the IP Code,
Article 6bis of the Paris Convention, and Article 16 (1) of the
TRIPS Agreement as it causes confusion, deception and
mistake on the part of the purchasing public.38 (Emphasis
and underscoring supplied)

(6) the findings are without citation of specific evidence on


which they are based;

The CA apparently did not notice the error and affirmed the Makati
RTC decision:

(4) the judgment is based on a misapprehension of facts;

(7) the facts set forth in the petition as well as in the


petitioner's main and reply briefs are not disputed by the
respondents; and
(8) the findings of fact of the Court of Appeals are premised
on the absence of evidence and are contradicted [by the
evidence] on record.36
In this light, after thoroughly examining the evidence on record,
weighing, analyzing and balancing all factors to determine whether
trademark infringement and/or unfair competition has been
committed, we conclude that both the Court of Appeals and the

In the light of its finding that appellants use of the GALLO


trademark on its cigarettes is likely to create confusion
with the GALLO trademark on wines previously registered
and used in the Philippines by appellee E & J Gallo Winery,
the trial court thus did not err in holding that
appellants acts not only violated the provisions of the
our trademark laws (R.A. No. 166 and R.A. Nos. (sic)
8293) but also Article 6bis of the Paris Convention.39
(Emphasis and underscoring supplied)
We therefore hold that the courts a quo erred in retroactively
applying the IP Code in this case.

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. 40
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.41 There are only a few instances when laws may be given
retroactive effect,42 none of which is present in this case.
The IP Code, repealing the Trademark Law,43 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.
DISTINCTIONS BETWEEN
TRADEMARK INFRINGEMENT
AND UNFAIR COMPETITION
Although the laws on trademark infringement and unfair
competition have a common conception at their root, that is, a
person shall not be permitted to misrepresent his goods or his
business as the goods or business of another, the law on unfair
competition is broader and more inclusive than the law on
trademark infringement. The latter is more limited but it recognizes
a more exclusive right derived from the trademark adoption and
registration by the person whose goods or business is first
associated with it. The law on trademarks is thus a specialized
subject distinct from the law on unfair competition, although the
two subjects are entwined with each other and are dealt with
together in the Trademark Law (now, both are covered by the IP
Code). Hence, even if one fails to establish his exclusive property
right to a trademark, he may still obtain relief on the ground of his
competitors unfairness or fraud. Conduct constitutes unfair
competition if the effect is to pass off on the public the goods of
one man as the goods of another. It is not necessary that any
particular means should be used to this end.44

In Del Monte Corporation vs. Court of Appeals,45 we distinguished


trademark infringement from unfair competition:
(1) Infringement of trademark is the unauthorized use of a
trademark, whereas unfair competition is the passing off of
one's goods as those of another.
(2) In infringement of trademark fraudulent intent is
unnecessary, whereas in unfair competition fraudulent
intent is essential.
(3) In infringement of trademark the prior registration of
the trademark is a prerequisite to the action, whereas in
unfair competition registration is not necessary.
Pertinent Provisions on Trademark
Infringement under the Paris
Convention and the Trademark Law
Article 6bis of the Paris Convention,46 an international agreement
binding on the Philippines and the United States (Gallo Winerys
country of domicile and origin) prohibits "the [registration] or use
of a trademark which constitutes a reproduction, imitation or
translation, liable to create confusion, of a mark considered by the
competent authority of the country of registration or use to be
well-known in that country as being already the mark of a person
entitled to the benefits of the [Paris] Convention and used for
identical or similar goods. [This rule also applies] when the
essential part of the mark constitutes a reproduction of any such
well-known mark or an imitation liable to create confusion
therewith." There is no time limit for seeking the prohibition of the
use of marks used in bad faith.47
Thus, under Article 6bis of the Paris Convention, the following are
the elements of trademark infringement:
(a) registration or use by another person of a trademark
which is a reproduction, imitation or translation liable to
create confusion,

(b) of a mark considered by the competent authority of the


country of registration or use48 to be well-known in that
country and is already the mark of a person entitled to the
benefits of the Paris Convention, and
(c) such trademark is used for identical or similar goods.
On the other hand, Section 22 of the Trademark Law holds a person
liable for infringement when, among others, he "uses without the
consent of the registrant, any reproduction, counterfeit, copy or
colorable imitation of any registered mark or tradename in
connection with the sale, offering for sale, or advertising of any
goods, business or services 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."49 Trademark registration and actual use are
material to the complaining partys cause of action.
Corollary to this, Section 20 of the Trademark Law50 considers the
trademark registration certificate as prima facie evidence of the
validity of the registration, the registrants ownership and exclusive
right to use the trademark in connection with the goods, business
or services as classified by the Director of Patents 51 and as
specified in the certificate, subject to the conditions and limitations
stated therein. Sections 2 and 2-A52 of the Trademark Law
emphasize the importance of the trademarks actual use in
commerce in the Philippines prior to its registration. In the
adjudication of trademark rights between contending parties,
equitable principles of laches, estoppel, and acquiescence may be
considered and applied.53
Under Sections 2, 2-A, 9-A, 20 and 22 of the Trademark Law
therefore, the following constitute the elements of trademark
infringement:

(a) a trademark actually used in commerce in the


Philippines and registered in the principal register of the
Philippine Patent Office
(b) is used by another person in connection with the sale,
offering for sale, or advertising of any goods, business or
services 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 such trademark is
reproduced, counterfeited, copied or colorably imitated by
another person and such reproduction, counterfeit, copy or
colorable imitation is applied to labels, signs, prints,
packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such
goods, business or services as to likely cause confusion or
mistake or to deceive purchasers,
(c) the trademark is used for identical or similar goods, and
(d) such act is done without the consent of the trademark
registrant or assignee.
In summary, the Paris Convention protects well-known trademarks
only (to be determined by domestic authorities), while the
Trademark Law protects all trademarks, whether well-known or not,
provided that they have been registered and are in actual
commercial use in the Philippines. Following universal
acquiescence and comity, in case of domestic legal disputes on
any conflicting provisions between the Paris Convention (which is
an international agreement) and the Trademark law (which is a
municipal law) the latter will prevail.54
Under both the Paris Convention and the Trademark Law, the
protection of a registered trademark is limited only to goods
identical or similar to those in respect of which such trademark is
registered and only when there is likelihood of confusion. Under
both laws, the time element in commencing infringement cases is
material in ascertaining the registrants express or implied consent
to anothers use of its trademark or a colorable imitation thereof.
This is why acquiescence, estoppel or laches may defeat the
registrants otherwise valid cause of action.

Hence, proof of all the elements of trademark infringement is a


condition precedent to any finding of liability.
THE ACTUAL COMMERCIAL USE IN THE
PHILIPPINES OF GALLO CIGARETTE
TRADEMARK PRECEDED THAT OF
GALLO WINE TRADEMARK.
By respondents own judicial admission, the GALLO wine trademark
was registered in the Philippines in November 1971 but the wine
itself was first marketed and sold in the country only in 1974 and
only within the former U.S. military facilities, and outside thereof,
only in 1979. To prove commercial use of the GALLO wine
trademark in the Philippines, respondents presented sales invoice
no. 29991 dated July 9, 1981 addressed to Conrad Company Inc.,
Makati, Philippines and sales invoice no. 85926 dated March 22,
1996 addressed to Andresons Global, Inc., Quezon City, Philippines.
Both invoices were for the sale and shipment of GALLO wines to
the Philippines during that period.55 Nothing at all, however, was
presented to evidence the alleged sales of GALLO wines in the
Philippines in 1974 or, for that matter, prior to July 9, 1981.
On the other hand, by testimonial evidence supported by the BIR
authorization letters, forms and manufacturers sworn statement, it
appears that petitioners and its predecessor-in-interest, Tobacco
Industries, have indeed been using and selling GALLO cigarettes in
the Philippines since 1973 or before July 9, 1981. 56
In Emerald Garment Manufacturing Corporation vs. Court of
Appeals,57 we reiterated our rulings in Pagasa Industrial
Corporation vs. Court of Appeals,58 Converse Rubber Corporation
vs. Universal Rubber Products, Inc.,59 Sterling Products
International, Inc. vs. Farbenfabriken Bayer Aktiengesellschaft, 60
Kabushi Kaisha Isetan vs. Intermediate Appellate Court, 61 and Philip
Morris vs. Court of Appeals,62 giving utmost importance to the
actual commercial use of a trademark in the Philippines prior to
its registration, notwithstanding the provisions of the Paris
Convention:
xxx xxx xxx

In addition to the foregoing, we are constrained to agree


with petitioner's contention that private respondent
failed to prove prior actual commercial use of its
"LEE" trademark in the Philippines before filing its
application for registration with the BPTTT and
hence, has not acquired ownership over said mark.
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) x x x
xxx xxx xxx
The provisions of the 1965 Paris Convention for the
Protection of Industrial Property relied upon by private
respondent and Sec. 21-A of the Trademark Law (R.A. No.
166) were sufficiently expounded upon and qualified in
the recent case of Philip Morris, Inc. v. Court of
Appeals (224 SCRA 576 [1993]):
xxx xxx xxx
Following universal acquiescence and comity, our
municipal law on trademarks regarding the
requirement of actual use in the Philippines
must subordinate an international agreement
inasmuch as the apparent clash is being
decided by a municipal tribunal (Mortisen vs.
Peters, Great Britain, High Court of Judiciary of
Scotland, 1906, 8 Sessions, 93; Paras, International
Law and World Organization, 1971 Ed., p. 20).
Withal, the fact that international law has been
made part of the law of the land does not by any
means imply the primacy of international law over
national law in the municipal sphere. Under the
doctrine of incorporation as applied in most
countries, rules of international law are given a
standing equal, not superior, to national legislative
enactments.
xxx xxx xxx

In other words, (a foreign corporation) may


have the capacity to sue for infringement
irrespective of lack of business activity in the
Philippines on account of Section 21-A of the
Trademark Law but the question of whether
they have an exclusive right over their
symbol as to justify issuance of the
controversial writ will depend on actual use
of their trademarks in the Philippines in line
with Sections 2 and 2-A of the same law. It is
thus incongruous for petitioners to claim that when
a foreign corporation not licensed to do business in
the Philippines files a complaint for infringement,
the entity need not be actually using the
trademark in commerce in the Philippines. Such a
foreign corporation may have the personality to file
a suit for infringement but it may not necessarily
be entitled to protection due to absence of actual
use of the emblem in the local market.
xxx xxx xxx
Undisputably, private respondent is the senior
registrant, having obtained several registration
certificates for its various trademarks "LEE," "LEE RIDERS,"
and "LEESURES" in both the supplemental and principal
registers, as early as 1969 to 1973. However,
registration alone will not suffice. In Sterling
Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft (27 SCRA 1214 [1969]; Reiterated in
Kabushi Isetan vs. Intermediate Appellate Court (203 SCRA
583 [1991]) we declared:
xxx xxx xxx
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.
xxx xxx xxx

The credibility placed on a certificate of registration of


one's trademark, or its weight as evidence of validity,
ownership and exclusive use, is qualified. A registration
certificate serves merely as prima facie evidence. It
is not conclusive but can and may be rebutted by
controverting evidence.
xxx xxx xxx
In the case at bench, however, we reverse the findings of
the Director of Patents and the Court of Appeals. After a
meticulous study of the records, we observe that
the Director of Patents and the Court of Appeals
relied mainly on the registration certificates as
proof of use by private respondent of the trademark
"LEE" which, as we have previously discussed are
not sufficient. We cannot give credence to private
respondent's claim that its "LEE" mark first reached
the Philippines in the 1960's through local sales by
the Post Exchanges of the U.S. Military Bases in the
Philippines (Rollo, p. 177) based as it was solely on
the self-serving statements of Mr. Edward Poste,
General Manager of Lee (Phils.), Inc., a wholly
owned subsidiary of the H.D. Lee, Co., Inc., U.S.A.,
herein private respondent. (Original Records, p. 52)
Similarly, we give little weight to the numerous
vouchers representing various advertising expenses
in the Philippines for "LEE" products. It is well to
note that these expenses were incurred only in 1981
and 1982 by LEE (Phils.), Inc. after it entered into a
licensing agreement with private respondent on 11
May 1981. (Exhibit E)
On the other hand, petitioner has sufficiently shown
that it has been in the business of selling jeans and
other garments adopting its "STYLISTIC MR. LEE"
trademark since 1975 as evidenced by appropriate sales
invoices to various stores and retailers. (Exhibit 1-e to 1-o)
Our rulings in Pagasa Industrial Corp. v. Court of Appeals
(118 SCRA 526 [1982]) and Converse Rubber Corp. v.
Universal Rubber Products, Inc., (147 SCRA 154 [1987]),
respectively, are instructive:

The Trademark Law is very clear. It requires actual


commercial use of the mark prior to its registration.
There is no dispute that respondent
corporation was the first registrant, yet it
failed to fully substantiate its claim that it
used in trade or business in the Philippines
the subject mark; it did not present proof to
invest it with exclusive, continuous adoption
of the trademark which should consist among
others, of considerable sales since its first
use. The invoices submitted by respondent
which were dated way back in 1957 show
that the zippers sent to the Philippines were
to be used as "samples" and "of no
commercial value." The evidence for respondent
must be clear, definite and free from
inconsistencies. "Samples" are not for sale and
therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent
to the "use" contemplated by law. Respondent did
not expect income from such "samples." There
were no receipts to establish sale, and no proof
were presented to show that they were
subsequently sold in the Philippines.
xxx xxx xxx
For lack of adequate proof of actual use of its
trademark in the Philippines prior to petitioner's use
of its own mark and for failure to establish
confusing similarity between said trademarks,
private respondent's action for infringement must
necessarily fail. (Emphasis supplied.)
In view of the foregoing jurisprudence and respondents judicial
admission that the actual commercial use of the GALLO wine
trademark was subsequent to its registration in 1971 and to
Tobacco Industries commercial use of the GALLO cigarette
trademark in 1973, we rule that, on this account, respondents
never enjoyed the exclusive right to use the GALLO wine trademark
to the prejudice of Tobacco Industries and its successors-ininterest, herein petitioners, either under the Trademark Law or the
Paris Convention.

Respondents GALLO trademark


registration is limited to wines only
We also note that the GALLO trademark registration certificates in
the Philippines and in other countries expressly state that they
cover wines only, without any evidence or indication that registrant
Gallo Winery expanded or intended to expand its business to
cigarettes.63
Thus, by strict application of Section 20 of the Trademark Law,
Gallo Winerys exclusive right to use the GALLO trademark should
be limited to wines, the only product indicated in its registration
certificates. This strict statutory limitation on the exclusive right to
use trademarks was amply clarified in our ruling in Faberge, Inc.
vs. Intermediate Appellate Court:64
Having thus reviewed the laws applicable to the case
before Us, it is not difficult to discern from the foregoing
statutory enactments that private respondent may be
permitted to register the trademark "BRUTE" for briefs
produced by it notwithstanding petitioner's vehement
protestations of unfair dealings in marketing its own set of
items which are limited to: after-shave lotion, shaving
cream, deodorant, talcum powder and toilet soap.
Inasmuch as petitioner has not ventured in the
production of briefs, an item which is not listed in
its certificate of registration, petitioner cannot and
should not be allowed to feign that private
respondent had invaded petitioner's exclusive
domain. To be sure, it is significant that petitioner failed to
annex in its Brief the so-called "eloquent proof that
petitioner indeed intended to expand its mark BRUT to
other goods" (Page 27, Brief for the Petitioner; page 202,
Rollo). Even then, a mere application by petitioner in this
aspect does not suffice and may not vest an exclusive right
in its favor that can ordinarily be protected by the
Trademark Law. In short, paraphrasing Section 20 of
the Trademark Law as applied to the documentary
evidence adduced by petitioner, the certificate of
registration issued by the Director of Patents can
confer upon petitioner the exclusive right to use its
own symbol only to those goods specified in the
certificate, subject to any conditions and limitations

stated therein. This basic point is perhaps the unwritten


rationale of Justice Escolin in Philippine Refining
Co., Inc. vs. Ng Sam (115 SCRA 472 [1982]), when he
stressed the principle enunciated by the United States
Supreme Court in American Foundries vs. Robertson (269
U.S. 372, 381, 70 L ed 317, 46 Sct. 160) that one who
has adopted and used a trademark on his goods
does not prevent the adoption and use of the same
trademark by others for products which are of a
different description. Verily, this Court had the occasion
to observe in the 1966 case of George W. Luft Co., Inc. vs.
Ngo Guan (18 SCRA 944 [1966]) that no serious objection
was posed by the petitioner therein since the applicant
utilized the emblem "Tango" for no other product than hair
pomade in which petitioner does not deal.
This brings Us back to the incidental issue raised by
petitioner which private respondent sought to belie as
regards petitioner's alleged expansion of its business. It
may be recalled that petitioner claimed that it has a
pending application for registration of the emblem "BRUT
33" for briefs (page 25, Brief for the Petitioner; page 202,
Rollo) to impress upon Us the Solomonic wisdom imparted
by Justice JBL Reyes in Sta. Ana vs. Maliwat (24 SCRA
1018 [1968]), to the effect that dissimilarity of goods
will not preclude relief if the junior user's goods are
not remote from any other product which the first
user would be likely to make or sell (vide, at page
1025). Commenting on the former provision of the
Trademark Law now embodied substantially under Section
4(d) of Republic Act No. 166, as amended, the erudite jurist
opined that the law in point "does not require that the
articles of manufacture of the previous user and late user
of the mark should possess the same descriptive properties
or should fall into the same categories as to bar the latter
from registering his mark in the principal register." (supra
at page 1026).
Yet, it is equally true that as aforesaid, the
protective mantle of the Trademark Law extends
only to the goods used by the first user as specified
in the certificate of registration following the clear
message conveyed by Section 20.

How do We now reconcile the apparent conflict


between Section 4(d) which was relied upon by
Justice JBL Reyes in the Sta. Ana case and Section
20? It would seem that Section 4(d) does not require
that the goods manufactured by the second user be
related to the goods produced by the senior user
while Section 20 limits the exclusive right of the
senior user only to those goods specified in the
certificate of registration. But the rule has been laid
down that the clause which comes later shall be given
paramount significance over an anterior proviso upon the
presumption that it expresses the latest and dominant
purpose. (Graham Paper Co. vs. National Newspapers
Asso. (Mo. App.) 193 S.W. 1003; Barnett vs. Merchant's L.
Ins. Co., 87 Okl. 42; State ex nel Atty. Gen. vs. Toledo, 26
N.E., p. 1061; cited by Martin, Statutory Construction Sixth
ed., 1980 Reprinted, p. 144). It ineluctably follows that
Section 20 is controlling and, therefore, private
respondent can appropriate its symbol for the briefs
it manufactures because as aptly remarked by
Justice Sanchez in Sterling Products International
Inc. vs. Farbenfabriken Bayer (27 SCRA 1214 [1969]):
"Really, if the certificate of registration were
to be deemed as including goods not
specified therein, then a situation may arise
whereby an applicant may be tempted to
register a trademark on any and all goods
which his mind may conceive even if he had
never intended to use the trademark for the
said goods. We believe that such omnibus
registration is not contemplated by our Trademark
Law." (1226).
NO LIKELIHOOD OF CONFUSION, MISTAKE
OR DECEIT AS TO THE IDENTITY OR SOURCE
OF PETITIONERS AND RESPONDENTS
GOODS OR BUSINESS
A crucial issue in any trademark infringement case is the likelihood
of confusion, mistake or deceit as to the identity, source or origin
of the goods or identity of the business as a consequence of using
a certain mark. Likelihood of confusion is admittedly a relative

term, to be determined rigidly according to the particular (and


sometimes peculiar) circumstances of each case. Thus, in
trademark cases, more than in other kinds of litigation, precedents
must be studied in the light of each particular case. 65
There are two types of confusion in trademark infringement. The
first is "confusion of goods" when an otherwise prudent purchaser
is induced to purchase one product in the belief that he is
purchasing another, in which case defendants goods are then
bought as the plaintiffs and its poor quality reflects badly on the
plaintiffs reputation. The other is "confusion of business" wherein
the goods of the parties are different but the defendants product
can reasonably (though mistakenly) be assumed to originate from
the plaintiff, thus deceiving the public into believing that there is
some connection between the plaintiff and defendant which, in
fact, does not exist.66
In determining the likelihood of confusion, the Court must consider:
[a] the resemblance between the trademarks; [b] the similarity of
the goods to which the trademarks are attached; [c] the likely
effect on the purchaser and [d] the registrants express or implied
consent and other fair and equitable considerations.
Petitioners and respondents both use "GALLO" in the labels of their
respective cigarette and wine products. But, as held in the
following cases, the use of an identical mark does not, by itself,
lead to a legal conclusion that there is trademark infringement:
(a) in Acoje Mining Co., Inc. vs. Director of Patent,67 we
ordered the approval of Acoje Minings application for
registration of the trademark LOTUS for its soy sauce even
though Philippine Refining Company had prior registration
and use of such identical mark for its edible oil which, like
soy sauce, also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director
of Patents,68 we upheld the Patent Directors registration of
the same trademark CAMIA for Ng Sams ham under Class
47, despite Philippine Refining Companys prior trademark
registration and actual use of such mark on its lard, butter,
cooking oil (all of which belonged to Class 47), abrasive
detergents, polishing materials and soaps;

(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals


and Santos Lim Bun Liong,69 we dismissed Hickoks petition
to cancel private respondents HICKOK trademark
registration for its Marikina shoes as against petitioners
earlier registration of the same trademark for
handkerchiefs, briefs, belts and wallets;
(d) in Shell Company of the Philippines vs. Court of
Appeals,70 in a minute resolution, we dismissed the petition
for review for lack of merit and affirmed the Patent Offices
registration of the trademark SHELL used in the cigarettes
manufactured by respondent Fortune Tobacco Corporation,
notwithstanding Shell Companys opposition as the prior
registrant of the same trademark for its gasoline and other
petroleum products;
(e) in Esso Standard Eastern, Inc. vs. Court of Appeals, 71 we
dismissed ESSOs complaint for trademark infringement
against United Cigarette Corporation and allowed the latter
to use the trademark ESSO for its cigarettes, the same
trademark used by ESSO for its petroleum products, and
(f) in Canon Kabushiki Kaisha vs. Court of Appeals and NSR
Rubber Corporation,72 we affirmed the rulings of the Patent
Office and the CA that NSR Rubber Corporation could use
the trademark CANON for its sandals (Class 25) despite
Canon Kabushiki Kaishas prior registration and use of the
same trademark for its paints, chemical products, toner
and dyestuff (Class 2).
Whether a trademark causes confusion and is likely to deceive the
public hinges on "colorable imitation"73 which has been defined as
"such similarity in form, content, words, sound, meaning, special
arrangement or general appearance of the trademark or
tradename in their overall presentation or in their essential and
substantive and distinctive parts as would likely mislead or confuse
persons in the ordinary course of purchasing the genuine article." 74
Jurisprudence has developed two tests in determining similarity
and likelihood of confusion in trademark resemblance: 75

(a) the Dominancy Test applied in Asia Brewery, Inc. vs.


Court of Appeals76 and other cases,77 and
(b) the Holistic or Totality Test used in Del Monte
Corporation vs. Court of Appeals78 and its preceding
cases.79
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion
or deception, and thus infringement. If the competing trademark
contains the main, essential or dominant features of another, and
confusion or deception is likely to result, infringement takes place.
Duplication or imitation is not necessary; nor is it necessary that
the infringing label should suggest an effort to imitate. The
question is whether the use of the marks involved is likely to cause
confusion or mistake in the mind of the public or deceive
purchasers.80
On the other hand, the Holistic Test requires that the entirety of the
marks in question be considered in resolving confusing similarity.
Comparison of words is not the only determining factor. The
trademarks in their entirety as they appear in their respective
labels or hang tags must also be considered in relation to the
goods to which they are attached. The discerning eye of the
observer must focus not only on the predominant words but also
on the other features appearing in both labels in order that he may
draw his conclusion whether one is confusingly similar to the
other.81
In comparing the resemblance or colorable imitation of marks,
various factors have been considered, such as the dominant color,
style, size, form, meaning of letters, words, designs and emblems
used, the likelihood of deception of the mark or name's tendency
to confuse82 and the commercial impression likely to be conveyed
by the trademarks if used in conjunction with the respective goods
of the parties.83
Applying the Dominancy and Holistic Tests, we find that the
dominant feature of the GALLO cigarette trademark is the device of
a large rooster facing left, outlined in black against a gold
background. The roosters color is either green or red green for
GALLO menthols and red for GALLO filters. Directly below the large

rooster device is the word GALLO. The rooster device is given


prominence in the GALLO cigarette packs in terms of size and
location on the labels.84
The GALLO mark appears to be a fanciful and arbitrary mark for
the cigarettes as it has no relation at all to the product but was
chosen merely as a trademark due to the fondness for fighting
cocks of the son of petitioners president. Furthermore, petitioners
adopted GALLO, the Spanish word for rooster, as a cigarette
trademark to appeal to one of their target markets, the sabungeros
(cockfight aficionados).85
Also, as admitted by respondents themselves,86 on the side of the
GALLO cigarette packs are the words "MADE BY MIGHTY
CORPORATION," thus clearly informing the public as to the identity
of the manufacturer of the cigarettes.
On the other hand, GALLO Winerys wine and brandy labels are
diverse. In many of them, the labels are embellished with sketches
of buildings and trees, vineyards or a bunch of grapes while in a
few, one or two small roosters facing right or facing each other
(atop the EJG crest, surrounded by leaves or ribbons), with
additional designs in green, red and yellow colors, appear as minor
features thereof.87 Directly below or above these sketches is the
entire printed name of the founder-owners, "ERNEST & JULIO
GALLO" or just their surname "GALLO,"88 which appears in different
fonts, sizes, styles and labels, unlike petitioners uniform casquefont bold-lettered GALLO mark.
Moreover, on the labels of Gallo Winerys wines are printed the
words "VINTED AND BOTTLED BY ERNEST & JULIO GALLO,
MODESTO, CALIFORNIA."89
The many different features like color schemes, art works and
other markings of both products drown out the similarity between
them the use of the word GALLO a family surname for the
Gallo Winerys wines and a Spanish word for rooster for petitioners
cigarettes.
WINES AND CIGARETTES ARE NOT
IDENTICAL, SIMILAR, COMPETING OR
RELATED GOODS

Confusion of goods is evident where the litigants are actually in


competition; but confusion of business may arise between noncompeting interests as well.90
Thus, apart from the strict application of Section 20 of the
Trademark Law and Article 6bis of the Paris Convention which
proscribe trademark infringement not only of goods specified in the
certificate of registration but also of identical or similar goods, we
have also uniformly recognized and applied the modern concept of
"related goods."91 Simply stated, when goods are so related that
the public may be, or is actually, deceived and misled that they
come from the same maker or manufacturer, trademark
infringement occurs.92
Non-competing goods may be those which, though they are not in
actual competition, are so related to each other that it can
reasonably be assumed that they originate from one manufacturer,
in which case, confusion of business can arise out of the use of
similar marks.93 They may also be those which, being entirely
unrelated, cannot be assumed to have a common source; hence,
there is no confusion of business, even though similar marks are
used.94 Thus, there is no trademark infringement if the public does
not expect the plaintiff to make or sell the same class of goods as
those made or sold by the defendant.95
In resolving whether goods are related,96 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 97
(d) the nature and cost of the articles98
(e) the descriptive properties, physical attributes or essential
characteristics with reference to their form, composition, texture or
quality

(f) the purpose of the goods99


(g) whether the article is bought for immediate consumption, 100
that is, day-to-day household items101
(h) the fields of manufacture102
(i) the conditions under which the article is usually purchased 103
and
(j) the channels of trade through which the goods flow, 104 how they
are distributed, marketed, displayed and sold. 105
The wisdom of this approach is its recognition that each trademark
infringement case presents its own unique set of facts. No single
factor is preeminent, nor can the presence or absence of one
determine, without analysis of the others, the outcome of an
infringement suit. Rather, the court is required to sift the evidence
relevant to each of the criteria. This requires that the entire
panoply of elements constituting the relevant factual landscape be
comprehensively examined.106 It is a weighing and balancing
process. With reference to this ultimate question, and from a
balancing of the determinations reached on all of the factors, a
conclusion is reached whether the parties have a right to the relief
sought.107
A very important circumstance though is whether there exists a
likelihood that an appreciable number of ordinarily prudent
purchasers will be misled, or simply confused, as to the source of
the goods in question.108 The "purchaser" is not the "completely
unwary consumer" but is the "ordinarily intelligent buyer"
considering the type of product involved.109 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."110
Hence, in the adjudication of trademark infringement, we give due
regard to the goods usual purchasers character, attitude, habits,
age, training and education. 111
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.

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. 113
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.114
In this regard, we adopted the Director of Patents finding in
Philippine Refining Co., Inc. vs. Ng Sam and the Director of
Patents:115
In his decision, the Director of Patents enumerated the
factors that set respondents products apart from the
goods of petitioner. He opined and we quote:

112

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.

"I have taken into account such factors as probable


purchaser attitude and habits, marketing activities,
retail outlets, and commercial impression likely to
be conveyed by the trademarks if used in
conjunction with the respective goods of the
parties, I believe that ham on one hand, and
lard, butter, oil, and soap on the other are
products that would not move in the same
manner through the same channels of trade.
They pertain to unrelated fields of
manufacture, might be distributed and
marketed under dissimilar conditions, and
are displayed separately even though they

frequently may be sold through the same


retail food establishments. Opposers products
are ordinary day-to-day household items whereas
ham is not necessarily so. Thus, the goods of the
parties are not of a character which purchasers
would likely attribute to a common origin.
The observations and conclusion of the Director of Patents
are correct. The particular goods of the parties are so
unrelated that consumers, would not, in any probability
mistake one as the source of origin of the product of the
other. (Emphasis supplied).
The same is true in the present case. Wines and cigarettes are noncompeting 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.116 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. 117
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. 118 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.119
Furthermore, the Makati RTC and the CA erred in relying on Carling
Brewing Company vs. Philip Morris, Inc.120 to support its finding that
GALLO wines and GALLO cigarettes are related goods. The courts a
quo should have taken into consideration the subsequent case of
IDV North America, Inc. and R & A Bailey Co. Limited vs. S & M
Brands, Inc.:121
IDV correctly acknowledges, however, that there is no per
se rule that the use of the same mark on alcohol and
tobacco products always will result in a likelihood of
confusion. Nonetheless, IDV relies heavily on the decision
in John Walker & Sons, Ltd. vs. Tampa Cigar Co., 124 F.
Supp. 254, 256 (S.D. Fla. 1954), affd, 222 F. 2d 460 (5th Cir.
1955), wherein the court enjoined the use of the mark
"JOHNNIE WALKER" on cigars because the fame of the
plaintiffs mark for scotch whiskey and because the plaintiff
advertised its scotch whiskey on, or in connection with
tobacco products. The court, in John Walker & Sons,
placed great significance on the finding that the
infringers use was a deliberate attempt to capitalize
on the senior marks fame. Id. At 256. IDV also relies
on Carling Brewing Co. v. Philip Morris, Inc., 297 F.
Supp. 1330, 1338 (N.D. Ga. 1968), in which the court
enjoined the defendants use of the mark "BLACK
LABEL" for cigarettes because it was likely to cause
confusion with the plaintiffs well-known mark
"BLACK LABEL" for beer.
xxx xxx xxx
Those decisions, however, must be considered in
perspective of the principle that tobacco products
and alcohol products should be considered related
only in cases involving special circumstances.
Schenley Distillers, Inc. v. General Cigar Co.,
57C.C.P.A. 1213, 427 F. 2d 783, 785 (1970). The
presence of special circumstances has been found to
exist where there is a finding of unfair competition

or where a famous or well-known mark is involved


and there is a demonstrated intent to capitalize on
that mark. For example, in John Walker & Sons, the court
was persuaded to find a relationship between products,
and hence a likelihood of confusion, because of the
plaintiffs long use and extensive advertising of its mark
and placed great emphasis on the fact that the defendant
used the trademark Johnnie Walker with full knowledge of
its fame and reputation and with the intention of taking
advantage thereof. John Walker & Sons, 124 F. Supp. At
256; see Mckesson & Robbins, Inc. v. P. Lorillard Co., 1959
WL 5894, 120 U.S.P.Q. 306, 307 (1959) (holding that the
decision in John Walker & Sons was merely the law on the
particular case based upon its own peculiar facts); see
also Alfred Dunhill, 350 F. Supp. At 1363 (defendants
adoption of Dunhill mark was not innocent). However, in
Schenley, the court noted that the relation between
tobacco and whiskey products is significant where a widely
known arbitrary mark has long been used for diversified
products emanating from a single source and a newcomer
seeks to use the same mark on unrelated goods. Schenley,
427 F.2d. at 785. Significantly, in Schenley, the court
looked at the industry practice and the facts of the case in
order to determine the nature and extent of the
relationship between the mark on the tobacco product and
the mark on the alcohol product.
The record here establishes conclusively that IDV has
never advertised BAILEYS liqueurs in conjunction with
tobacco or tobacco accessory products and that IDV has no
intent to do so. And, unlike the defendant in Dunhill, S & M
Brands does not market bar accessories, or liqueur related
products, with its cigarettes. The advertising and
promotional materials presented a trial in this action
demonstrate a complete lack of affiliation between the
tobacco and liqueur products bearing the marks here at
issue.
xxx xxx xxx
Of equal significance, it is undisputed that S & M Brands
had no intent, by adopting the family name Baileys as
the mark for its cigarettes, to capitalize upon the fame of

the BAILEYS mark for liqueurs. See Schenley, 427 F. 2d at


785. Moreover, as will be discussed below, and as
found in Mckesson & Robbins, the survey evidence
refutes the contention that cigarettes and alcoholic
beverages are so intimately associated in the public
mind that they cannot under any circumstances be
sold under the same mark without causing
confusion. See Mckesson & Robbins, 120 U.S.P.Q. at
308.
Taken as a whole, the evidence here demonstrates the
absence of the special circumstances in which courts
have found a relationship between tobacco and alcohol
products sufficient to tip the similarity of goods analysis in
favor of the protected mark and against the allegedly
infringing mark. It is true that BAILEYS liqueur, the
worlds best selling liqueur and the second best
selling in the United States, is a well-known product.
That fact alone, however, is insufficient to invoke
the special circumstances connection here where so
much other evidence and so many other factors
disprove a likelihood of confusion. The similarity of
products analysis, therefore, augers against finding
that there is a likelihood of confusion. (Emphasis
supplied).
In short, 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.
THE GALLO WINE TRADEMARK IS NOT A
WELL-KNOWN MARK IN THE CONTEXT
OF THE PARIS CONVENTION IN THIS CASE
SINCE WINES AND CIGARETTES ARE NOT
IDENTICAL OR SIMILAR GOODS
First, the records bear out that most of the trademark registrations
took place in the late 1980s and the 1990s, that is, after Tobacco
Industries use of the GALLO cigarette trademark in 1973 and
petitioners use of the same mark in 1984.

GALLO wines and GALLO cigarettes are neither the same, identical,
similar nor related goods, a requisite element under both the
Trademark Law and the Paris Convention.
Second, the GALLO trademark cannot be considered a strong and
distinct mark in the Philippines. Respondents do not dispute the
documentary evidence that aside from Gallo Winerys GALLO
trademark registration, the Bureau of Patents, Trademarks and
Technology Transfer also issued on September 4, 1992 Certificate
of Registration No. 53356 under the Principal Register approving
Productos Alimenticios Gallo, S.As April 19, 1990 application for
GALLO trademark registration and use for its "noodles, prepared
food or canned noodles, ready or canned sauces for noodles,
semolina, wheat flour and bread crumbs, pastry, confectionery, ice
cream, honey, molasses syrup, yeast, baking powder, salt,
mustard, vinegar, species and ice."122
Third and most important, pursuant to our ruling in Canon
Kabushiki Kaisha vs. Court of Appeals and NSR Rubber
Corporation,123 "GALLO" cannot be considered a "well-known" mark
within the contemplation and protection of the Paris Convention in
this case since wines and cigarettes are not identical or similar
goods:
We agree with public respondents that the controlling
doctrine with respect to the applicability of Article 8 of the
Paris Convention is that established in Kabushi Kaisha
Isetan vs. Intermediate Appellate Court (203 SCRA 59
[1991]). As pointed out by the BPTTT:
"Regarding the applicability of Article 8 of
the Paris Convention, this Office believes that
there is no automatic protection afforded an
entity whose tradename is alleged to have
been infringed through the use of that name
as a trademark by a local entity.
In Kabushiki Kaisha Isetan vs. The Intermediate
Appellate Court, et. al., G.R. No. 75420, 15
November 1991, the Honorable Supreme Court
held that:

The Paris Convention for the


Protection of Industrial Property does
not automatically exclude all countries
of the world which have signed it from
using a tradename which happens to
be used in one country. To illustrate
if a taxicab or bus company in a town
in the United Kingdom or India
happens to use the tradename Rapid
Transportation, it does not
necessarily follow that Rapid can no
longer be registered in Uganda, Fiji, or
the Philippines.
This office is not unmindful that in (sic) the Treaty
of Paris for the Protection of Intellectual Property
regarding well-known marks and possible
application thereof in this case. Petitioner, as this
office sees it, is trying to seek refuge under its
protective mantle, claiming that the subject mark
is well known in this country at the time the then
application of NSR Rubber was filed.
However, the then Minister of Trade and Industry,
the Hon. Roberto V. Ongpin, issued a memorandum
dated 25 October 1983 to the Director of Patents, a
set of guidelines in the implementation of
Article 6bis of the Treaty of Paris. These
conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a
trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or
similar kinds of goods; and
d) the person claiming must be the owner
of the mark (The Parties Convention
Commentary on the Paris Convention.

Article by Dr. Bogsch, Director General of


the World Intellectual Property
Organization, Geneva, Switzerland, 1985)
From the set of facts found in the records, it is
ruled that the Petitioner failed to comply with
the third requirement of the said
memorandum that is the mark must be for
use in the same or similar kinds of goods.
The Petitioner is using the mark "CANON" for
products belonging to class 2 (paints,
chemical products) while the Respondent is
using the same mark for sandals (class 25).
Hence, Petitioner's contention that its mark is
well-known at the time the Respondent filed
its application for the same mark should fail."
(Emphasis supplied.)
Consent of the Registrant and
Other air, Just and Equitable
Considerations
Each trademark infringement case presents a unique problem
which must be answered by weighing the conflicting interests of
the litigants.124
Respondents claim that GALLO wines and GALLO cigarettes flow
through the same channels of trade, that is, retail trade. If
respondents 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
respondents 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.
PETITIONERS ARE ALSO NOT LIABLE
FOR 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 mans
goods or business as that of another constitutes unfair
competition. Actual or probable deception and confusion on the
part of customers by reason of defendants practices must always
appear.125 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.
All told, after applying all the tests provided by the governing laws
as well as those recognized by jurisprudence, we conclude that
petitioners are not liable for trademark infringement, unfair
competition or damages.
WHEREFORE, finding the petition for review meritorious, the same
is hereby GRANTED. The questioned decision and resolution of the
Court of Appeals in CA-G.R. CV No. 65175 and the November 26,
1998 decision and the June 24, 1999 order of the Regional Trial
Court of Makati, Branch 57 in Civil Case No. 93-850 are hereby
REVERSED and SET ASIDE and the complaint against petitioners
DISMISSED.

Penned by Judge Reinato O. Quilala.

Penned by Associate Justice Martin S. Villarama, Jr. and


concurred in by Associate Justices Conchita Carpio Morales
(now Associate Justice of the Supreme Court) and Sergio L.
Pestano of the former Ninth Division.
4

Complaint, Exhibits "D" to "D-1," Records, pp. 1-2; TSN,


June 9, 1997, Records, pp. 951-956.
5

Exhibits "B" to "B-6," Records, pp. 80-86.

Records, pp. 29-31.

Answer, Records, pp. 255 and 264-266; TSN, April 13,


1993, Records, pp. 767, 780-796; TSN, October 27, 1997,
Records, pp. 993-1000.
8

Exhibits 9 to 12, Records, pp. 89-95, 267-268; TSN,


October 27, 1997, Records, pp. 1005-1007.
9

10

Records, pp. 255-256, 269 and 271.

11

Records, pp. 256, 270.

12

Exhibit 15, Records, pp. 104, 256, 272.

13

Records, p. 256.

14

Exhibits 13 and 14, Records, pp. 96-98.

Costs against respondents.


SO ORDERED.
Vitug, (Chairman), and Sandoval-Gutierrez, JJ., concur.
Carpio-Morales, J., no part..

Footnotes
Penned by Associate Justice Martin S. Villarama, Jr. and
concurred in by Associate Justices Conchita Carpio Morales
(now Associate Justice of the Supreme Court) and Sergio L.
Pestano of the Ninth Division.
1

Penned by Acting Presiding Judge Bonifacio Sanz Maceda.

TSN, April 13, 1993, Records, pp. 780-796; TSN,


December 14, 1993, Records, pp. 420-422; TSN, October
27, 1997, Records, pp. 993-1000.
15

16

Complaint, Exhibit "D-2," Records, pp. 3, 110 and 328.

Exhibit "A," Complainants Memorandum, Records, p.


127; TSN, December 14, 1993, Records, pp. 326, 432-433.
17

CONVENTION OF PARIS FOR THE PROTECTION OF


INDUSTRIAL PROPERTY of 20th March, 1883 revised at
Brussels on 14th December, 1900, at Washington on 2nd
June, 1911, at the Hague on 6th November, 1925, at
London on 2nd June, 1934, and at Lisbon on 31st October,
1958
18

xxxxxxxxx
Article 6bis
(1) The countries of the Union undertake, either
administratively if their legislation so permits, or at
the request of an interested party, to refuse or to
cancel the registration and to prohibit the use of a
trademark which constitutes a reproduction,
imitation or translation, liable to create confusion,
of a mark considered by the competent authority of
the country of registration or use to be well-known
in that country as being already the mark of a
person entitled to the benefits of the present
Convention and used for identical or similar goods.
These provisions shall also apply when the
essential part of the mark constitutes a
reproduction of any such well-known mark or an
imitation liable to create confusion therewith.
(2) A period of at least five years from the date of
registration shall be allowed for seeking the
cancellation of such a mark. The countries of the
Union may provide for a period within which the
prohibition of use must be sought.
(3) No time limit shall be fixed for seeking the
cancellation or the prohibition of the use of marks
registered or used in bad faith.
Republic Act No. 166 is entitled "An Act To Provide For
The Registration And Protection Of Trademarks, Trade
Names And Servicemarks, Defining Unfair Competition And
False Marking And Providing Remedies Against The Same,
And For Other Purposes".

SEC. 22. Infringement, what constitutes. Any person


who shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any
registered mark or 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, shall be liable to a
civil action by the registrant for any or all of the remedies
herein provided.
20

SEC. 23. Actions, and damages and injunction for


infringement. Any person entitled to the
exclusive use of a registered mark or tradename
may recover damages in a civil action from any
person who infringes his rights, and the measure of
the damages suffered shall be either the
reasonable profit which the complaining party
would have made, had the defendant not infringed
his said rights, or the profit which the defendant
actually made out of the infringement, 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 of the value of the services in
connection with which the mark or tradename 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.

19

The complaining party, upon proper showing, may also be


granted injunction.

SEC. 29. Unfair competition, rights and remedies. A


person who has identified in the mind of the public the
goods he manufactures or deals in, his business or services
from those of others, whether or not a mark or tradename
is employed, has a property right in the goodwill of the said
goods, business or services so identified, which will be
protected in the same manner as other property rights.
Such a person shall have the remedies provided in section
twenty-three, Chapter V hereof.

(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.

21

Chapter VII
False Designation of Origin and False

Any person who shall employ deception or any other


means contrary to good faith by which he shall pass off the
goods manufactured by him or in which he deals, or his
business, or services for those of the one having
established such goodwill, or who shall commit any acts
calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.

Description
SEC. 30. False designation of origin and false
description forbidden. Any person who shall
affix, apply, annex or use in connection with any
goods or services, or any container or containers
for goods, a false designation of origin, or any false
description or representation, including words or
other symbols tending falsely to describe or
represent the same, and shall cause such goods or
services to enter into commerce, and any person
who shall with knowledge of the falsity of such
designation of origin or description or
representation cause or procure the same to enter
into commerce, shall be liable to a civil action for
damages and injunction provided in section
twenty-three, Chapter V hereof, by any person
doing business in the locality falsely indicated as
that of origin or in the region in which said locality
is situated, or by any person who believes that he
is or is likely to be damaged by the use of any such
false description or representation.

In particular, and without in any way limiting the scope of


unfair competition, the following shall be deemed guilty of
unfair competition:
(a) Any person, who in selling his goods shall give
them the general appearance of goods of another
manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in
which they are contained, or the devices or words
thereon, or in any other feature of their
appearance, which would be likely to influence
purchasers to believe that the goods offered are
those of a manufacturer or dealer other than the
actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall
deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such
goods or any agent of any vendor engaged in
selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or
who employs any other means calculated to induce
the false belief that such person is offering the
services of another who has identified such
services in the mind of the public; or

22

Chapter XI
Provisions in Reference to Foreign Industrial Property
SEC. 37. Rights of foreign registrants. Persons
who are nationals of, domiciled in, or have a bona
fide or effective business or commercial
establishment in any foreign country, which is a
party to any international convention or treaty

relating to marks or tradenames, or the repression


of unfair competition to which the Philippines may
be a party, shall be entitled to the benefits and
subject to the provisions of this Act to the extent
and under the conditions essential to give effect to
any such convention and treaties so long as the
Philippines shall continue to be a party thereto,
except as provided in the following paragraphs of
this section.
No registration of a mark or tradename in the
Philippines by a person described in the preceding
paragraph of this section shall be granted until
such mark or tradename has been registered in the
country of origin of the applicant, unless the
applicant alleges use in commerce.
For the purposes of this section, the country of
origin of the applicant is the country in which he
has bona fide and effective industrial or
commercial establishment, or if he has no such an
establishment in the country in which he is
domiciled, or if he has not a domicile in any of the
countries described in the first paragraph of this
section, the country of which he is a national.
An application for registration of a mark or
tradename under the provisions of this Act filed by
a person described in the first paragraph of this
section who has previously duly filed an application
for registration of the same mark or tradename in
one of the countries described in said paragraph
shall be accorded the same force and effect as
would be accorded to the same application if filed
in the Philippines on the same date on which the
application was first filed in such foreign country:
Provided, That
(a) The application in the Philippines is filed within
six months from the date on which the application
was first filed in the foreign country; and within
three months from the date of filing or within such
time as the Director shall in his discretion grant,

the applicant shall furnish a certified copy of the


application for or registration in the country of
origin of the applicant, together with a translation
thereof into English, if not in the English language;
(b) The application conforms as nearly as
practicable to the requirements of this Act, but use
in commerce need not be alleged;
(c) The rights acquired by third parties before the
date of the filing of the first application in the
foreign country shall in no way be affected by a
registration obtained on an application filed under
this paragraph;
(d) Nothing in this paragraph shall entitle the
owner of a registration granted under this section
to sue for acts committed prior to the date on
which his mark or tradename was registered in this
country unless the registration is based on use in
commerce; and
(e) A mark duly registered in the country of origin
of the foreign applicant may be registered on the
principal register if eligible, otherwise, on the
supplemental register herein provided. The
application thereof shall be accompanied by a
certified copy of the application for or registration
in the country of origin of the applicant. (As added
by R.A. No. 638.)
The registration of a mark under the provisions of
this section shall be independent of the registration
in the country of origin and the duration, validity or
transfer in the Philippines of such registration shall
be governed by the provisions of this Act.
Tradenames of persons described in the first
paragraph of this section shall be protected without
the obligation of filing or registration whether or
not they form parts of marks.

Any person designated in the first paragraph of this


section as entitled to the benefits and subject to
the provisions of this Act shall be entitled to
effective protection against unfair competition, and
the remedies provided herein for infringement of
marks and tradenames shall be available so far as
they may be appropriate in repressing acts of
unfair competition.
Citizens or residents of the Philippines shall have
the same benefits as are granted by this section to
persons described in the first paragraph hereof.
23

Complaint, Exhibits "D-1" to "D-9," Record, pp. 1-10.

24

Penned by Judge Francisco X. Velez.

25

Records, pp. 159-160.

Sec. 5. Preliminary injunction not granted without notice;


issuance of restraining order. No preliminary injunction
shall be granted without notice to the defendant. If it shall
appear from the facts shown by affidavits or by the verified
complaint that great or irreparable injury would result to
the applicant before the matter can be heard on notice, the
judge to whom the application for preliminary injunction
was made, may issue a restraining order to be effective
only for a period of twenty days from the date of its
issuance. Within the said twenty-day period, the judge
must cause an order to be served on the defendant,
requiring him to show cause, at a specified time and place,
why the injunction should not be granted, and determine
within the same period whether or not the preliminary
injunction shall be granted, and shall accordingly issue the
corresponding order. In the event that the application for
preliminary injunction is denied, the restraining order is
deemed automatically vacated.
26

Nothing herein contained shall be construed to impair,


affect or modify in any way any rights granted by, or rules
pertaining to injunctions contained in, existing agrarian,

labor or social legislation. (As amended by B.P. Blg. 224,


approved April 16, 1982).
27

Penned by Judge Velez; Records, pp. 302-304.

Penned by Associate Justice Ramon Mabutas, Jr. and


concurred in by Associate Justices Nathanael P. De Pano, Jr.
and Artemon D. Luna of the Special First Division; Records,
pp. 449-465.
28

29

Penned by Judge Maceda; Records, pp. 651-652.

30

Penned by Judge Quilala; Records, pp. 727-728.

31

Petition; Rollo, pp. 18-19.

32

Rule 45, Section 2.

Ramos vs. Pepsi-Cola Bottling Co. of the P.I., 19 SCRA


289, 292 [1967]; Medina vs. Asistio, Jr., 191 SCRA 218, 223
[1990]; Caia vs. People, 213 SCRA 309, 313 [1992].
33

Moomba Mining Exploration Company vs. Court of


Appeals, 317 SCRA 338 [1999].
34

Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA


411, 420 [1990].
35

Asia Brewery, Inc. vs. Court of Appeals, 224 SCRA 437,


443 [1993]; Philippine Nut Industry Inc. vs. Standard
Brands, Inc., 224 SCRA 437, 443 [1993]; Reynolds
Philippine Corporation vs. Court of Appeals, 169 SCRA 220,
223 [1989] citing Mendoza vs. Court of Appeals, 156 SCRA
597 [1987]; Manlapaz vs. Court of Appeals, 147 SCRA 238
[1987]; Sacay vs. Sandiganbayan, 142 SCRA 593, 609
[1986]; Guita vs. Court of Appeals, 139 SCRA 576 [1985];
Casanayan vs. Court of Appeals, 198 SCRA 333, 336
[1991]; also Apex Investment and Financing Corp. vs. IAC,
166 SCRA 458 [1988] citing Tolentino vs. De Jesus, 56 SCRA
167 [1974]; Carolina Industries, Inc. vs. CMS Stock
Brokerage, Inc., 97 SCRA 734 [1980]; Manero vs. Court of
36

Appeals, 102 SCRA 817 [1981]; and Moran, Jr. vs. Court of
Appeals, 133 SCRA 88 [1984].
37

Sec. 241, Intellectual Property Code of the Philippines.

38

Rollo, p. 191.

39

Rollo, p. 71.

(d) laws creating new rights (Bona vs. Briones, 38


Phil. 276 [1918]; Intestate Estate of Bustamante
vs. Cayas, 98 Phil. 107 [1955])
(e) penal statutes insofar as they favor the accused
who is not a habitual criminal (Article 22, Revised
Penal Code) or
(f) by express provision of the law, (Art. 4, Civil
Code of the Philippines; Alba Vda. De Raz vs. Court
of Appeals, 314 SCRA 36 [1999]), except in cases
of ex post facto laws (U.S. vs. Diaz Conde, 42 Phil.
766 [1922]; U.S. vs. Gomez, 12 Phil. 279 [1908]) or
impairment of obligation of contract. (Asiatic
Petroleum vs. Llanes, 49 Phil. 466 [1926]).

Tolentino, Civil Code Of The Philippines Commentaries


and Jurisprudence, Volume I, p. 19; See Articles 2 to 4 of
the Civil Code of the Philippines.
40

41

Ibid.

42

Laws may be given retroactive effect only if they are:


(a) procedural statutes which prescribe rules and
forms of procedures of enforcing rights or obtaining
redress for their invasion (Subido vs.
Sandiganbayan, 266 SCRA 379 [1997]; Primicias
vs. Ocampo, 93 Phil. 446 [1953]; Bustos vs. Lucero,
81 Phil. 640 [1948]; Lopez vs. Gloria, 40 Phil. 26
[1919]; People vs. Sumilang, 77 Phil. 764 [1946])
(b) remedial or curative statutes which cure errors
and irregularities and validate judicial or
administrative proceedings, acts of public officers,
or private deeds and contracts that otherwise
would not produce their intended consequences
due to some statutory disability or failure to
comply with technical rules (Government vs.
Municipality of Binalonan, 32 Phil. 634 [1915];
Subido vs. Sandiganbayan, supra; Del Castillo vs.
Securities and Exchange Commission, 96 Phil. 119
[1954]; Santos vs. Duata, 14 SCRA 1041 [1965];
Development Bank of the Philippines vs. Court of
Appeals, 96 SCRA 342 [1980]; Alunan III vs.
Mirasol, 276 SCRA 501 [1997])

43

E. Spinner & Co. vs. Neuss Hesslein Corporation, 54 Phil.


225, 231-232 [1930].
44

45

181 SCRA 410, 415 [1990].

The Paris Convention is a compact among various


member countries to accord in their own countries to
citizens of the other contracting parties trademarks and
other rights comparable to those accorded their own
citizens by their domestic laws. The underlying principle is
that foreign nationals should be given the same treatment
in each of the member countries as that country makes
available to its citizen. (Emerald Garden Manufacturing
Corp. vs. Court of Appeals, 251 SCRA 600 [1995]).
46

47

See footnote 18 for full text.

"conditions for the filing and registration of trademarks


shall be determined in each country of the Union by its
domestic law." (Art. 61, Paris Convention).
48

49

(c) laws interpreting others

Sec. 239, Intellectual Property Code of the Philippines.

See footnote 20 for full text.

SEC 20. Certificate of registration prima facie evidence


of validity. A certificate of registration of a mark or
trade-name shall be prima facie evidence of the validity of
the registration, the registrant's ownership of the mark or
tradename, and of the registrant's exclusive right to use
the same in connection with the goods, business or
services specified in the certificate, subject to any
conditions and limitations stated therein.
50

SEC. 6. Classification of goods and services. The


Director shall establish a classification of goods and
services, for the convenience of the Patent Office
administration, but not to limit or extend the applicants
rights. The applicant may register his mark or tradename
in one application for any or all of the goods or services
included in one class, upon or in connection with which he
is actually using the mark or tradename. The Director may
issue a single certificate for one mark or tradename
registered in a plurality of classes upon payment of a fee
equaling the sum of the fees for each registration in each
class.
51

SEC. 2. What are registrable. Trademarks, tradenames,


and servicemarks owned by persons, corporations,
partnerships or associations domiciled in the Philippines
and by persons, corporations, partnerships or associations
domiciled in any foreign country may be registered in
accordance with the provisions of this Act; Provided, That
said trademarks, tradenames, or servicemarks are actually
in use in commerce and services not less than two months
in the Philippines before the time the applications for
registration are filed. And provided, further, That the
country of which the applicant for registration is a citizen
grants by law substantially similar privileges to citizens of
the Philippines, and such fact is officially certified, with a
certified true copy of the foreign law translated into the
English language, by the government of the foreign
country to the Government of the Republic of the
Philippines. (As amended by R.A. 865).

any lawful business, or who renders any lawful service in


commerce, by actual use thereof in manufacture or trade,
in business, and in the service rendered, may appropriate
to his exclusive use a trademark, a tradename, or a
servicemark not so appropriated by another, to distinguish
his merchandise, business or service from the
merchandise, business or service of others. The ownership
or possession of a trademark, tradename, servicemark
heretofore or hereafter appropriated, as in this section
provided, shall be recognized and protected in the same
manner and to the same extent as are other property
rights known to the law. (As amended by R.A. 638).
SEC. 9-A. Equitable principles to govern proceedings. In
opposition proceedings and in all other inter partes
proceedings in the Patent Office under this Act, equitable
principles of laches, estoppel, and acquiescence where
applicable, may be considered and applied. (As added by
R.A. No. 638).
53

Philip Morris, Inc. vs. Court of Appeals, 224 SCRA 576


[1993].
54

52

SEC. 2-A. Ownership of trademarks, tradenames and


servicemarks; how acquired. Anyone who lawfully
produces or deals in merchandise of any kind or engages in

55

Exhibits "Q" to "R-2," Records, pp. 2075-2078.

56

Exhibits "9" to "14," Records, pp. 90-98.

57

251 SCRA 600, 619 [1995].

58

118 SCRA 526 [1982].

59

147 SCRA 154 [1987].

60

27 SCRA 1214 [1969].

61

203 SCRA 583 [1991].

62

224 SCRA 576 [1993].

TSN, April 13, 1993, Records, p. 783; TSN, June 9, 1997,


Records, p. 959.
63

64

215 SCRA 316, 325 [1992].

Esso Standard Eastern, Inc. vs. Court of Appeals, 116


SCRA 336, 341 [1982].
65

Sterling Products, International, Inc. vs. Farbenfabriken


Bayer Aktiengesellschaft, 27 SCRA 1214, 1227 [1969]
citing 2 Callman, Unfair Competition and Trademarks, 1945
ed., p. 1006.
66

SCRA 575 [1975]; Converse Rubber Corp. vs. Universal


Rubber Products, Inc., 147 SCRA 154 [1987].
78

181 SCRA 410 [1990].

Mead Johnson & Co. vs. N.V.J. Van Dorp, Ltd., 7 SCRA 771
[1963]; Bristol Myers Co. vs. Director of Patents, 17 SCRA
128 [1966]; Fruit of the Loom, Inc. vs. Court of Appeals,
133 SCRA 405 [1984].
79

Emerald Garment Manufacturing Corporation vs. Court of


Appeals, 251 SCRA 600 [1995].
80

67

38 SCRA 480 [1971].

81

Ibid.

68

115 SCRA 472 [1982].

82

Ibid.

69

116 SCRA 388 [1982].

83

70

G.R. No. L-49145, May 21, 1979.

71

72

Philippine Refining Co., Inc. vs. Ng Sam and the Director


of Patents, 115 SCRA 472 [1982].
84

Exhibits "1" to "4"; Records 2095-2097.

85

TSN, October 27, 1997, Records, pp. 995-1000.

86

Reply, Records, p. 293.

87

Exhibits "N to Q".

88

TSN, December 14, 1993, Records, pp. 414, 421 and 442.

89

Exhibits "1" to "4."

116 SCRA 336 [1982].


336 SCRA 266 [2000].

Emerald Garment Manufacturing Corporation vs. Court of


Appeals, 251 SCRA 600 [1995].
73

Ruben Agpalo, Trademark Law and Practice in the


Philippines [1990], p.41.
74

75

Ibid.
Esso Standard Eastern, Inc. vs. Court of Appeals, 116
SCRA 336,341 [1982].
90

76

224 SCRA 437 [1993].

Co Tiong vs. Director of Patents, 95 Phil. 1 [1954]; Lim


Hoa vs. Director of Patents, 100 Phil. 214 [1956]; American
Wire & Cable Co. vs. Director of Patents, 31 SCRA 544
[1970]; Phil. Nut Industry, Inc. vs. Standard Brands, Inc., 65
77

Esso Standard Eastern, Inc. vs. Court of Appeals, 116


SCRA 336 [1982]; Arce vs. Selecta, 1 SCRA 253 [1961];
Chua Che vs. Phil. Patents Office, 13 SCRA 67 [1965]; Ang
vs. Teodoro, 74 Phil. 50 [1942]; Khe vs. Lever Bros. Co., 49
91

O.G. 3891 [1941]; Ang Si Heng & Dee vs. Wellington Dept.
Store, 92 Phil. 448 [1953]; Acoje Mining Co., Inc. vs.
Director of Patents, 38 SCRA 480 [1971].
Esso Standard Eastern, Inc. vs. Court of Appeals, 116
SCRA 336 [1982].

Emerald Garment Manufacturing Corporation vs. Court of


Appeals, 251 SCRA 600 [1995]; Del Monte Corporation, vs.
Court of Appeals, 181 SCRA 410 [1990]; Asia Brewery, Inc.
vs. Court of Appeals, 224 SCRA 437 [1993].
97

92

93

Emerald Garment Manufacturing Corporation vs. Court of


Appeals, 251 SCRA 600 [1995].
98

Ibid.
Esso Standard Eastern, Inc. vs. Court of Appeals, 116
SCRA 336 [1982].
99

94

Ibid.

I CALLMAN 1121 cited in Philippine Refining Co., Inc. vs.


Ng Sam and the Director of Patents, 115 SCRA 472 [1982].
95

It has been held that where the products are different,


the prior owners chance of success is a function of many
variables, such as the:
96

Emerald Garment Manufacturing Corporation vs. Court


of Appeals, 251 SCRA 600 [1995].
100

Philippine Refining Co., Inc. vs. Ng Sam and the Director


of Patents, 115 SCRA 472 [1982].
101

102

Ibid.

(a) strength of his mark


Emerald Garment Manufacturing Corporation vs. Court
of Appeals, 251 SCRA 600 [1995].
103

(b) degree of similarity between the two marks


(c) reciprocal of defendants good faith in adopting
its own mark
(d) quality of defendants product
(e) proximity of the products
(f) likelihood that the prior owner will bridge the
gap
(g) actual confusion, and
(h) sophistication of the buyers. (Polaroid Corp. vs.
Polaroid Elecs. Corp., 287 F. 2d 492, 495 (2d Cir.),
cert. denied, 368 U.S. 820, 82 s. Ct. 36, 7 L. Ed. 2d
25 [1961]).

Esso Standard Eastern, Inc. vs. Court of Appeals, 116


SCRA 336 [1982].
104

Philippine Refining Co., Inc. vs. Ng Sam and the Director


of Patents, 115 SCRA 472 [1982].
105

Thompson Medical Co. vs. Pfizer, Inc. 753 F. 2d 208, 225


USPQ 124 (2d Cir.) 1985.
106

Kiki Undies Corp. vs. Promenade Hosiery Mills, Inc., 411


F. 2d 1097, 1099 (2d Cir. 1969), cert. denied, 396 U.S.
1094, 90 S. Ct. 707, 24 L. Ed. 698 [1970]; Lever Bros. Co.
vs. American Bakeries Co., 693 F. 2d 251, C.A. N.Y.,
November 3, 1982.
107

Mushroom Makers, Inc. vs. R.G. Barry Corp., 580 F. 2d


44, 47 (2d Cir. 1978), cert. denied, 439 U.S. 1116, 99 s. Ct.
1022, 59 L. Ed. 2d 75 [1979].
108

Emerald Garment Manufacturing Corporation vs. Court


of Appeals, 251 SCRA 600 [1995].
109

110

Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190 [1921].

Emerald Garment Manufacturing Corporation vs. Court


of Appeals, 251 SCRA 600 [1995]; Del Monte Corporation,
et al. vs. Court of Appeals, 181 SCRA 410 [1990]; Asia
Brewery, Inc. vs. Court of Appeals, et al., 224 SCRA 437
[1993]; Philippine Refining Co., Inc. vs. Ng Sam and the
Director of Patents, 115 SCRA 472 [1982].
111

Philippine Refining Co., Inc. vs. Ng Sam and Director of


Patents, 115 SCRA 472 [1982].
112

Emerald Garment Manufacturing Corporation vs. Court


of Appeals, 251 SCRA 600 [1995]; Del Monte Corporation,
vs. Court of Appeals, 181 SCRA 410 [1990]; Asia Brewery,
Inc. vs. Court of Appeals, 224 SCRA 437 [1993].

1966); Haviland & Co. vs. Johann Haviland China Corp., 269
F. Supp. 928, 154 U.S.P.Q. 287 (S.D.N.Y. 1967); Estee
Lauder, Inc. vs. The Gap, Inc., 108 F. 3d. 1503, 42 U.S.P.Q.
2d 1228(2nd Cir. 1997).
Answer, Records, p. 257; TSN, April 13, 1993, Records,
pp. 783; TSN, December 14, 1993, Records, p. 420; TSN,
September 8, 1997, Records, pp. 966, 971-972.
118

TSN, June 9, 1997, Record, pp. 952-958; TSN, December


14, 1993, Records, p. 432.
119

120

297 F. Supp. 1330, 160 USPQ 303.

121

26 F. Supp. 2d 815 (E.D. Va. 1998).

122

Exhibit 18, Records, pp. 107-108.

123

366 SCRA 266 [2000].

124

52 Am. Jur. 577.

113

California Fruit Growers Exchange vs. Sunkist Baking


Co., 166 F. 2d 971, 76 U.S.P.Q. 85 (7th Cir. 1947); Hot Shot
Quality Products, Inc. vs. Sifers Chemicals, Inc. 452 F.2d
1080, 172 U.S.P.Q. 350 (10th Cir. 1971); Federated Foods,
Inc. vs. Ft. Howard Paper Co., 544 F.2d 1098, 192 U.S.P.Q.
24; Faultless Starch Co. vs. Sales Producers Associates,
Inc., 530 F. 2d 1400, 189 U.S.P.Q. (C.C.P.A. 1976); Lever
Bros. Co. vs. American Bakeries Co., 693 F. 2d 251, 216
U.S.P.Q. 177 (2d Cir. 1982); Nestle Co. vs. Nash-Finch Co., 4
U.S.P.Q. 2d 1085 (T.T.A.B.).
114

115

115 SCRA 472, 478 [1982].

Answer, Records, p. 258; TSN, December 14, 1993,


Records, p. 420; TSN, June 9, 1997, Records, p. 958; TSN,
September 8, 1997, Records, p. 965-967.
116

Emerald Manufacturing, 251 SCRA 600 [1995]; Acoje


Mining Co., Inc. vs. Director of Patents, 38 SCRA 480
[1981]; Field Enterprises Educational Corp. vs. Grosset &
Dunlap, Inc. 256 F. Supp. 382, 150 U.S.P.Q. 517 (S.D.N.Y.
117

Shell Co. of the Philippines, Ltd. vs. Insular Petroleum


Refining Co. Ltd., 120 Phil. 434, 439 [1964].
125

G.R. No. 112012

April 4, 2001

SOCIETE DES PRODUITS NESTLE, S.A. and NESTLE


PHILIPPINES, INC., petitioners,
vs.
COURT OF APPEALS and CFC CORPORATION., respondents.
YNARES-SANTIAGO, J.:
This is a petition for review assailing the Decision of the Court of
Appeals in CA-G.R. SP No. 24101,1 reversing and setting aside the
decision of the Bureau of Patents, Trademarks and Technology
Transfer (BPTTT),2 which denied private respondents application
for registration of the trade-mark, FLAVOR MASTER.
On January 18, 1984, private respondent CFC Corporation filed with
the BPTTT an application for the registration of the trademark
"FLAVOR MASTER" for instant coffee, under Serial No. 52994. The
application, as a matter of due course, was published in the July
18, 1988 issue of the BPTTTs Official Gazette.
Petitioner Societe Des Produits Nestle, S.A., a Swiss company
registered under Swiss laws and domiciled in Switzerland, filed an
unverified Notice of Opposition,3 claiming that the trademark of
private respondents product is "confusingly similar to its

trademarks for coffee and coffee extracts, to wit: MASTER ROAST


and MASTER BLEND."
Likewise, a verified Notice of Opposition was filed by Nestle
Philippines, Inc., a Philippine corporation and a licensee of Societe
Des Produits Nestle S.A., against CFCs application for registration
of the trademark FLAVOR MASTER.4 Nestle claimed that the use, if
any, by CFC of the trademark FLAVOR MASTER and its registration
would likely cause confusion in the trade; or deceive purchasers
and would falsely suggest to the purchasing public a connection in
the business of Nestle, as the dominant word present in the three
(3) trademarks is "MASTER"; or that the goods of CFC might be
mistaken as having originated from the latter.
In answer to the two oppositions, CFC argued that its trademark,
FLAVOR MASTER, is not confusingly similar with the formers
trademarks, MASTER ROAST and MASTER BLEND, alleging that,
"except for the word MASTER (which cannot be exclusively
appropriated by any person for being a descriptive or generic
name), the other words that are used respectively with said word in
the three trademarks are very different from each other in
meaning, spelling, pronunciation, and sound". CFC further argued
that its trademark, FLAVOR MASTER, "is clearly very different from
any of Nestles alleged trademarks MASTER ROAST and MASTER
BLEND, especially when the marks are viewed in their entirety, by
considering their pictorial representations, color schemes and the
letters of their respective labels."
In its Decision No. 90-47 dated December 27, 1990, the BPTTT
denied CFCs application for registration.5 CFC elevated the matter
to the Court of Appeals, where it was docketed as CA-G.R. SP No.
24101.
The Court of Appeals defined the issue thus: "Does appellant CFCs
trade dress bear a striking resemblance with appellees trademarks
as to create in the purchasing publics mind the mistaken
impression that both coffee products come from one and the same
source?"
As stated above, the Court of Appeals, in the assailed decision
dated September 23, 1993, reversed Decision No. 90-47 of the

BPTTT and ordered the Director of Patents to approve CFCs


application. The Court of Appeals ruled:
Were We to take even a lackadaisical glance at the overall
appearance of the contending marks, the physical
discrepancies between appellant CFCs and appellees
respective logos are so ostensible that the casual
purchaser cannot likely mistake one for the other.
Appellant CFCs label (Exhibit "4") is predominantly a blend
of dark and lighter shade of orange where the words
"FLAVOR MASTER", "FLAVOR" appearing on top of
"MASTER", shaded in mocha with thin white inner and
outer sidings per letter and identically lettered except for
the slightly protruding bottom curve of the letter "S"
adjoining the bottom tip of the letter "A" in the word
"MASTER", are printed across the top of a simmering red
coffee cup. Underneath "FLAVOR MASTER" appears
"Premium Instant Coffee" printed in white, slim and slanted
letters. Appellees "MASTER ROAST" label (Exhibit "7"),
however, is almost double the width of appellant CFCs. At
the top is printed in brown color the word "NESCAFE"
against a white backdrop. Occupying the center is a
square-shaped configuration shaded with dark brown and
picturing a heap of coffee beans, where the word
"MASTER" is inscribed in the middle. "MASTER" in
appellees label is printed in taller capital letters, with the
letter "M" further capitalized. The letters are shaded with
red and bounded with thin gold-colored inner and outer
sidings. Just above the word "MASTER" is a red window like
portrait of what appears to be a coffee shrub clad in gold.
Below the "MASTER" appears the word "ROAST" impressed
in smaller, white print. And further below are the
inscriptions in white: "A selection of prime Arabica and
Robusta coffee." With regard to appellees "MASTER
BLEND" label (Exhibit "6") of which only a xeroxed copy is
submitted, the letters are bolder and taller as compared to
appellant CFCs and the word "MASTER" appears on top of
the word "BLEND" and below it are the words "100% pure
instant coffee" printed in small letters.
From the foregoing description, while the contending marks
depict the same product, the glaring dissimilarities in their
presentation far outweigh and dispel any aspect of

similitude. To borrow the words of the Supreme Court in


American Cyanamid Co. v. Director of Patents (76 SCRA
568), appellant CFCs and appellees labels are entirely
different in size, background, colors, contents and pictorial
arrangement; in short, the general appearances of the
labels bearing the respective trademarks are so distinct
from each other that appellees cannot assert that the
dominant features, if any, of its trademarks were used or
appropriated in appellant CFCs own. The distinctions are
so well-defined so as to foreclose any probability or
likelihood of confusion or deception on the part of the
normally intelligent buyer when he or she encounters both
coffee products at the grocery shelf. The answer therefore
to the query is a clear-cut NO.6
Petitioners are now before this Court on the following assignment
of errors:
1. RESPONDENT COURT GRAVELY ERRED IN REVERSING
AND SETTING ASIDE THE DECISION (NO. 90-47) OF THE
DIRECTOR OF THE BUREAU OF PATENTS, TRADEMARKS
AND TECHNOLOGY TRANSFER (BPTTT) DATED DECEMBER
27, 1990.
2. RESPONDENT COURT ERRED IN FINDING THAT
APPELLANT CFCS TRADE DRESS IS BEYOND THE SCOPE OF
THE PROSCRIPTION LAID DOWN BY JURISPRUDENCE AND
THE TRADEMARK LAW.
3. RESPONDENT COURT ERRED IN HOLDING THAT THE
TOTALITY RULE, RATHER THAN THE TEST OF DOMINANCY,
APPLIES TO THE CASE.
4. RESPONDENT COURT ERRED IN INVOKING THE TOTALITY
RULE APPLIED IN THE CASES OF BRISTOL MYERS V.
DIRECTOR OF PATENTS, ET AL. (17 SCRA 128), MEAD
JOHNSON & CO. V. NVJ VAN DORF LTD., (7 SCRA 768) AND
AMERICAN CYANAMID CO. V. DIRECTOR OF PATENTS (76
SCRA 568).
The petition is impressed with merit.

A trademark has been generally defined as "any word, name,


symbol or device adopted and used by a manufacturer or merchant
to identify his goods and distinguish them from those
manufactured and sold by others."7
A manufacturers trademark is entitled to protection. As Mr. Justice
Frankfurter observed in the case of Mishawaka Mfg. Co. v. Kresge
Co.:8
The protection of trade-marks is the laws recognition of
the psychological function of symbols. If it is true that we
live by symbols, it is no less true that we purchase goods
by them. A trade-mark is a merchandising short-cut which
induces a purchaser to select what he wants, or what he
has been led to believe he wants. The owner of a mark
exploits this human propensity by making every effort to
impregnate the atmosphere of the market with the drawing
power of a congenial symbol. Whatever the means
employed, the aim is the same --- to convey through the
mark, in the minds of potential customers, the desirability
of the commodity upon which it appears. Once this is
attained, the trade-mark owner has something of value. If
another poaches upon the commercial magnetism of the
symbol he has created, the owner can obtain legal redress.
Section 4 (d) of Republic Act No. 166 or the Trademark Law, as
amended, which was in force at the time, provides thus:
Registration of trade-marks, trade-names and servicemarks on the principal register. - There is hereby
established a register of trade-marks, trade-names and
service marks which shall be known as the principal
register. The owner of a trade-mark, trade-name or servicemark used to distinguish his goods, business or services
from the goods, business or services of others shall have
the right to register the same on the principal register,
unless it:
xxx

xxx

xxx

(d) Consists of or comprises a mark or trade-name which so


resembles a mark or trade-name registered in the

Philippines or a mark or trade-name previously used in the


Philippines by another and not abandoned, as to be likely,
when applied to or used in connection with the goods,
business or services of the applicant, to cause confusion or
mistake or to deceive purchasers;
xxx

xxx

xxx

(Emphasis supplied)
The law prescribes a more stringent standard in that there should
not only be confusing similarity but that it should not likely cause
confusion or mistake or deceive purchasers.
Hence, the question in this case is whether there is a likelihood
that the trademark FLAVOR MASTER may cause confusion or
mistake or may deceive purchasers that said product is the same
or is manufactured by the same company. In other words, the issue
is whether the trademark FLAVOR MASTER is a colorable imitation
of the trademarks MASTER ROAST and MASTER BLEND.
Colorable imitation 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, as to cause him
to purchase the one supposing it to be the other. 9 In determining if
colorable imitation exists, jurisprudence has developed two kinds
of tests - the Dominancy Test and the Holistic Test. 10 The test of
dominancy focuses on the similarity of the prevalent features of
the competing trademarks which might cause confusion or
deception and thus constitute infringement. On the other side of
the spectrum, the holistic test mandates that the entirety of the
marks in question must be considered in determining confusing
similarity.11
In the case at bar, the Court of Appeals held that:
The determination of whether two trademarks are indeed
confusingly similar must be taken from the viewpoint of the
ordinary purchasers who are, in general, undiscerningly
rash in buying the more common and less expensive
household products like coffee, and are therefore less

inclined to closely examine specific details of similarities


and dissimilarities between competing products. The
Supreme Court in Del Monte Corporation v. CA, 181 SCRA
410, held that:
"The question is not whether the two articles are
distinguishable by their labels when set side by
side but whether the general confusion made by
the article upon the eye of the casual purchaser
who is unsuspicious and off his guard, is such as to
likely result in his confounding it with the original.
As observed in several cases, the general
impression of the ordinary purchaser, buying under
the normally prevalent conditions in trade and
giving the attention such purchasers usually give in
buying that class of goods, is the touchstone."
From this perspective, the test of similarity is to consider
the two marks in their entirety, as they appear in the
respective labels, in relation to the goods to which they are
attached (Bristol Myers Company v. Director of Patents, et
al., 17 SCRA 128, citing Mead Johnson & Co. v. NVJ Van
Dorp, Ltd., et al., 7 SCRA 768). The mark must be
considered as a whole and not as dissected. If the buyer is
deceived, it is attributable to the marks as a totality, not
usually to any part of it (Del Monte Corp. v. CA, supra), as
what appellees would want it to be when they essentially
argue that much of the confusion springs from appellant
CFCs use of the word "MASTER" which appellees claim to
be the dominant feature of their own trademarks that
captivates the prospective consumers. Be it further
emphasized that the discerning eye of the observer must
focus not only on the predominant words but also on the
other features appearing in both labels in order that he
may draw his conclusion whether one is confusingly similar
to the other (Mead Johnson & Co. v. NVJ Van Dorp, Ltd.,
supra).12
The Court of Appeals applied some judicial precedents which are
not on all fours with this case. It must be emphasized that in
infringement or trademark cases in the Philippines, particularly in
ascertaining whether one trademark is confusingly similar to or is a
colorable imitation of another, no set rules can be deduced. Each

case must be decided on its own merits.13 In Esso Standard, Inc. v.


Court of Appeals,14 we ruled that the likelihood of confusion is a
relative concept; to be determined only according to the particular,
and sometimes peculiar, circumstances of each case. In trademark
cases, even more than in any other litigation, precedent must be
studied in light of the facts of the particular case. The wisdom of
the likelihood of confusion test lies in its recognition that each
trademark infringement case presents its own unique set of facts.
Indeed, the complexities attendant to an accurate assessment of
likelihood of confusion require that the entire panoply of elements
constituting the relevant factual landscape be comprehensively
examined.15
The Court of Appeals application of the case of Del Monte
Corporation v. Court of Appeals16 is, therefore, misplaced. In Del
Monte, the issue was about the alleged similarity of Del Montes
logo with that of Sunshine Sauce Manufacturing Industries. Both
corporations market the catsup product which is an inexpensive
and common household item.
Since Del Monte alleged that Sunshines logo was confusingly
similar to or was a colorable imitation of the formers logo, there
was a need to go into the details of the two logos as well as the
shapes of the labels or marks, the brands printed on the labels, the
words or lettering on the labels or marks and the shapes and colors
of the labels or marks. The same criteria, however, cannot be
applied in the instant petition as the facts and circumstances
herein are peculiarly different from those in the Del Monte case.
In the same manner, the Court of Appeals erred in applying the
totality rule as defined in the cases of Bristol Myers v. Director of
Patents;17 Mead Johnson & Co. v. NVJ Van Dorf Ltd.;18 and American
Cyanamid Co. v. Director of Patents.19 The totality rule states that
"the test is not simply to take their words and compare the spelling
and pronunciation of said words. In determining whether two
trademarks are confusingly similar, the two marks in their entirety
as they appear in the respective labels must be considered in
relation to the goods to which they are attached; the discerning
eye of the observer must focus not only on the predominant words
but also on the other features appearing on both labels."20
As this Court has often declared, each case must be studied
according to the peculiar circumstances of each case. That is the

reason why in trademark cases, jurisprudential precedents should


be applied only to a case if they are specifically in point.
In the above cases cited by the Court of Appeals to justify the
application of the totality or holistic test to this instant case, the
factual circumstances are substantially different. In the Bristol
Myers case, this Court held that although both BIOFERIN and
BUFFERIN are primarily used for the relief of pains such as
headaches and colds, and their names are practically the same in
spelling and pronunciation, both labels have strikingly different
backgrounds and surroundings. In addition, one is dispensable only
upon doctors prescription, while the other may be purchased overthe-counter.
In the Mead Johnson case, the differences between ALACTA and
ALASKA are glaring and striking to the eye. Also, ALACTA refers to
"Pharmaceutical Preparations which Supply Nutritional Needs,"
falling under Class 6 of the official classification of Medicines and
Pharmaceutical Preparations to be used as prescribed by
physicians. On the other hand, ALASKA refers to "Foods and
Ingredients of Foods" falling under Class 47, and does not require
medical prescription.
In the American Cyanamid case, the word SULMET is
distinguishable from the word SULMETINE, as the former is derived
from a combination of the syllables "SUL" which is derived from
sulfa and "MET" from methyl, both of which are chemical
compounds present in the article manufactured by the contending
parties. This Court held that the addition of the syllable "INE" in
respondents label is sufficient to distinguish respondents product
or trademark from that of petitioner. Also, both products are for
medicinal veterinary use and the buyer will be more wary of the
nature of the product he is buying. In any case, both products are
not identical as SULMETs label indicates that it is used in a
drinking water solution while that of SULMETINE indicates that they
are tablets.
It cannot also be said that the products in the above cases can be
bought off the shelf except, perhaps, for ALASKA. The said products
are not the usual "common and inexpensive" household items
which an "undiscerningly rash" buyer would unthinkingly buy.In the
case at bar, other than the fact that both Nestles and CFCs
products are inexpensive and common household items, the

similarity ends there. What is being questioned here is the use by


CFC of the trademark MASTER. In view of the difficulty of applying
jurisprudential precedents to trademark cases due to the
peculiarity of each case, judicial fora should not readily apply a
certain test or standard just because of seeming similarities. As
this Court has pointed above, there could be more telling
differences than similarities as to make a jurisprudential precedent
inapplicable.
Nestle points out that the dominancy test should have been
applied to determine whether there is a confusing similarity
between CFCs FLAVOR MASTER and Nestles MASTER ROAST and
MASTER BLEND.
We agree.
As the Court of Appeals itself has stated, "[t]he determination of
whether two trademarks are indeed confusingly similar must be
taken from the viewpoint of the ordinary purchasers who are, in
general, undiscerningly rash in buying the more common and less
expensive household products like coffee, and are therefore less
inclined to closely examine specific details of similarities and
dissimilarities between competing products." 21
The basis for the Court of Appeals application of the totality or
holistic test is the "ordinary purchaser" buying the product under
"normally prevalent conditions in trade" and the attention such
products normally elicit from said ordinary purchaser. An ordinary
purchaser or buyer does not usually make such scrutiny nor does
he usually have the time to do so. The average shopper is usually
in a hurry and does not inspect every product on the shelf as if he
were browsing in a library.22
The Court of Appeals held that the test to be applied should be the
totality or holistic test reasoning, since what is of paramount
consideration is the ordinary purchaser who is, in general,
undiscerningly rash in buying the more common and less
expensive household products like coffee, and is therefore less
inclined to closely examine specific details of similarities and
dissimilarities between competing products.

This Court cannot agree with the above reasoning. If the ordinary
purchaser is "undiscerningly rash" in buying such common and
inexpensive household products as instant coffee, and would
therefore be "less inclined to closely examine specific details of
similarities and dissimilarities" between the two competing
products, then it would be less likely for the ordinary purchaser to
notice that CFCs trademark FLAVOR MASTER carries the colors
orange and mocha while that of Nestles uses red and brown. 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.
It must be emphasized that the products bearing the trademarks in
question are "inexpensive and common" household items bought
off the shelf by "undiscerningly rash" purchasers. As such, if the
ordinary purchaser is "undiscerningly rash", then he would not
have the time nor the inclination to make a keen and perceptive
examination of the physical discrepancies in the trademarks of the
products in order to exercise his choice.
While this Court agrees with the Court of Appeals detailed
enumeration of differences between the respective trademarks of
the two coffee products, this Court cannot agree that totality test is
the one applicable in this case. Rather, this Court believes that the
dominancy test is more suitable to this case in light of its peculiar
factual milieu.
Moreover, the totality or holistic test is contrary to the elementary
postulate of the law on trademarks and unfair competition that
confusing similarity is to be determined on the basis of visual,
aural, connotative comparisons and overall impressions
engendered by the marks in controversy as they are encountered
in the realities of the marketplace.23 The totality or holistic test only
relies on visual comparison between two trademarks whereas the
dominancy test relies not only on the visual but also on the aural
and connotative comparisons and overall impressions between the
two trademarks.
For this reason, this Court agrees with the BPTTT when it applied
the test of dominancy and held that:

From the evidence at hand, it is sufficiently established


that the word MASTER is the dominant feature of opposers
mark. The word MASTER is printed across the middle
portion of the label in bold letters almost twice the size of
the printed word ROAST. Further, the word MASTER has
always been given emphasis in the TV and radio
commercials and other advertisements made in promoting
the product. This can be gleaned from the fact that Robert
Jaworski and Atty. Ric Puno Jr.., the personalities engaged
to promote the product, are given the titles Master of the
Game and Master of the Talk Show, respectively. In due
time, because of these advertising schemes the mind of
the buying public had come to learn to associate the word
MASTER with the opposers goods.
x x x. It is the observation of this Office that much of the
dominance which the word MASTER has acquired through
Opposers advertising schemes is carried over when the
same is incorporated into respondent-applicants
trademark FLAVOR MASTER. Thus, when one looks at the
label bearing the trademark FLAVOR MASTER (Exh. 4) ones
attention is easily attracted to the word MASTER, rather
than to the dissimilarities that exist. Therefore, the
possibility of confusion as to the goods which bear the
competing marks or as to the origins thereof is not
farfetched. x x x.24
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
terms25 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 descriptive26 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 terms27 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."
This is evident from the advertising scheme adopted by Nestle in
promoting its coffee products. In this case, Nestle has, over time,
promoted its products as "coffee perfection worthy of masters like
Robert Jaworski and Ric Puno Jr."
In associating its coffee products with the term "MASTER" and
thereby impressing them with the attributes of said term, Nestle
advertised its products thus:
Robert Jaworski. Living Legend. A true hard court hero. Fast
on his feet. Sure in every shot he makes. A master
strategist. In one word, unmatched.
MASTER ROAST. Equally unmatched. Rich and deeply
satisfying. Made from a unique combination of the best
coffee beans - Arabica for superior taste and aroma,
Robusta for strength and body. A masterpiece only
NESCAFE, the worlds coffee masters, can create.
MASTER ROAST. Coffee perfection worthy of masters like
Robert Jaworski.28
In the art of conversation, Ric Puno Jr. is master. Witty. Wellinformed. Confident.

In the art of coffee-making, nothing equals Master Roast,


the coffee masterpiece from Nescafe, the worlds coffee
masters. A unique combination of the best coffee beans Arabica for superior taste and aroma, Robusta for strength
and body. Truly distinctive and rich in flavor.
Master Roast. Coffee perfection worthy of masters like Ric Puno Jr. 29
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.
In closing, it may not be amiss to quote the case of American
Chicle Co. v. Topps Chewing Gum, Inc.,30 to wit:

Footnotes
Penned by Associate Justice Ricardo J. Francisco and
concurred in by Associate Justices Lourdes K. Tayao-Jaguros
and Eubulo G. Verzola.
1

Penned by Director Ignacio S. Sapalo.

Inter Partes Case No. 3202.

Inter Partes Case No. 3200.

Rollo, pp. 35-48.

Ibid., pp. 33-34.

Bass Buster, Inc. v. Gapen Mfg. Co., 420 F. Supp. 144,


156, 191 USPQ 315, 325 (W.D. Mo. 1976).
7

Why it should have chosen a mark that had long been


employed by [plaintiff] and had become known to the trade
instead of adopting some other means of identifying its
goods is hard to see unless there was a deliberate purpose
to obtain some advantage from the trade that [plaintiff]
had built up. Indeed, it is generally true that, as soon as we
see that a second comer in a market has, for no reason
that he can assign, plagiarized the "make-up" of an earlier
comer, we need no more; . . . [W]e feel bound to compel
him to exercise his ingenuity in quarters further afield.
WHEREFORE, in view of the foregoing, the decision of the Court of
Appeals in CA-G.R. SP No. 24101 is REVERSED and SET ASIDE and
the decision of the Bureau of Patents, Trademarks and Technology
Transfer in Inter Partes Cases Nos. 3200 and 3202 is REINSTATED.
SO ORDERED.

316 U.S. 203, 53 USPQ 323 [1942].

Etepha v. Director of Patents, et al., 16 SCRA 495, 497498 [1966].


9

10

Ibid.

11

Id.

12

Rollo, p. 32.

Emerald Garment Manufacturing Corporation v. Court of


Appeals, 251 SCRA 600 [1995].
13

116 SCRA 336 [1982] as cited in Emerald Garment


Manufacturing Corporation v. Court of Appeals, supra.
14

Davide, Jr., C.J. (Chairman), Kapunan, and Pardo, JJ., concur.


Puno J., on official leave.

Thompson Medical Co. v. Pfizer, Inc., 753 F. 2d 208, 225


USPQ 124 (2d Cir. 1985).
15

16

181 SCRA 410 [1990].

17

17 SCRA 128 [1966].

18

7 SCRA 768 [1963].

19

76 SCRA 568 [1977].

20

Mead Johnson & Co. v. NVJ Van Dorf Ltd., supra.

21

Rollo, p. 32.

Del Monte Corporation v. Court of Appeals, 181 SCRA 410


[1990].

G.R. No. L-29971 August 31, 1982

22

23

Federal Unfair Competition: Lanham Act 43(a), p. 3-76.

24

Rollo, pp. 38-39.

ESSO STANDARD EASTERN, INC., petitioner,


vs.
THE HONORABLE COURT OF APPEALS ** and UNITED
CIGARETTE CORPORATION, respondents.
&

Federal Unfair Competition: Lanham Act 43(a), p. 322.1.


25

26

Id., p. 3-36.

27

Id., p. 3-54.

28

Exhibit "N".

29

Exhibit "O".

208 F. 2d 560, 562-63, 99 USPQ 362, 364-65 (2d Cir.


1953).
30

TEEHANKEE, J.:1wph1.t
The Court affirms on the basis of controlling doctrine the appealed
decision of the Court of Appeals reversing that of the Court of First
Instance of Manila and dismissing the complaint filed by herein
petitioner against private respondent for trade infringement for
using petitioner's trademark ESSO, since it clearly appears that the
goods on which the trademark ESSO is used by respondent is noncompeting and entirely unrelated to the products of petitioner so
that there is no likelihood of confusion or deception on the part of
the purchasing public as to the origin or source of the goods.
Petitioner Esso Standard Eastern, Inc., 1 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.
In its answer, respondent admitted that it used the trademark
ESSO on its own product of cigarettes, which was not Identical to
those produced and sold by petitioner and therefore did not in any
way infringe on or imitate petitioner's trademark. Respondent
contended that in order that there may be trademark infringement,
it is indispensable that the mark must be used by one person in
connection or competition with goods of the same kind as the
complainant's.
The trial court, relying on the old cases of Ang vs. Teodoro 2 and
Arce & Sons, Inc. vs. Selecta Biscuit Company, 3 referring to related
products, decided in favor of petitioner and ruled that respondent
was guilty of infringement of trademark.
On appeal, respondent Court of Appeals found that there was no
trademark infringement and dismissed the complaint.
Reconsideration of the decision having been denied, petitioner
appealed to this Court by way of certiorari to reverse the decision

of the Court of Appeals and to reinstate the decision of the Court of


First Instance of Manila. The Court finds no ground for granting the
petition.
The law defines infringement as the use without consent of the
trademark owner of any "reproduction, counterfeit, copy or
colorable limitation of any registered mark or tradename in
connection with the sale, offering for sale, or advertising of any
goods, business or services on or in connection with which such
use is likely to cause confusion or mistake or to deceive purchasers
or others as to the source or origin of such goods or services, or
Identity of such business; or reproduce, counterfeit, copy or
colorably imitate any such mark or tradename and apply such
reproduction, counterfeit, copy or colorable limitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods,
business or services." 4 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. 5 But likelihood of confusion is a
relative concept; to be determined only according to the particular,
and sometimes peculiar, circumstances of each case. 6 It is
unquestionably true that, as stated in Coburn vs. Puritan Mills, Inc.
7
"In trademark cases, even more than in other litigation,
precedent must be studied in the light of the facts of the particular
case.
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. 8 The vast
majority of courts today follow the modern theory or concept of
"related goods" 9 which the Court has likewise adopted and
uniformly recognized and applied. 10
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. 11 Thus,
biscuits were held related to milk because they are both food
products. 12 Soap and perfume, lipstick and nail polish are similarly
related because they are common household items now a days. 13
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. 14 Soap and pomade although noncompetitive, were held to be similar or to belong to the same class,
since both are toilet articles. 15 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. 16
Thus, in Acoje Mining Co., Inc. vs. Director of Patents, 17 the Court,
through now Chief Justice Fernando, reversed the patent director's
decision on the question of "May petitioner Acoje Mining Company
register for the purpose of advertising its product, soy sauce, the
trademark LOTUS, there being already in existence one such
registered in favor of the Philippine Refining Company for its
product, edible oil, it being further shown that the trademark
applied for is in smaller type, colored differently, set on a
background which is dissimilar as to yield a distinct appearance?"
and ordered the granting of petitioner's application for registration
ruling that "there is quite a difference between soy sauce and
edible oil. If one is in the market for the former, he is not likely to
purchase the latter just because of the trademark LOTUS" and
"when regard is had for the principle that the two trademarks in

their entirety as they appear in their respective labels should be


considered in relation to the goods advertised before registration
could be denied, the conclusion is inescapable that respondent
Director ought to have reached a different conclusion. "
By the same token, in the recent case of Philippine Refining Co.,
Inc. vs. Ng Sam and Director of Patents, 18 the Court upheld the
patent director's registration of the same trademark CAMIA for
therein respondent's product of ham notwithstanding its already
being used by therein petitioner for a wide range of products: lard
butter, cooking oil, abrasive detergents, polishing materials and
soap of all kinds. The Court, after noting that the same CAMIA
trademark had been registered by two other companies, Everbright
Development Company and F. E. Zuellig, Inc. for their respective
products of thread and yarn (for the former) and textiles,
embroideries and laces (for the latter) ruled that "while ham and
some of the products of petitioner are classified under Class 47
(Foods and Ingredients of Food), this alone cannot serve as the
decisive factor in the resolution of whether or not they 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." The Court,
therefore, concluded that "In fine, We hold that the businesses of
the parties are non-competitive and their products so unrelated
that the use of Identical trademarks is not likely to give rise to
confusion, much less cause damage to petitioner."
In the situation before us, the goods are obviously different from
each other with "absolutely no iota of similitude" 19 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.t@lF 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. 20
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 noncompeting 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" 21 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. 22
Another factor that shows that the goods involved are noncompetitive 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." 23
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 comes 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." 24
Even the lower court, which ruled initially for petitioner, found that
a "noticeable difference between the brand ESSO being used by
the defendants and the trademark ESSO of the plaintiff is that the
former has a rectangular background, while in that of the plaintiff
the word ESSO is enclosed in an oval background."
In point of fact and time, the Court's dismissal of the petition at bar
was presaged by its Resolution of May 21, 1979 dismissing by
minute resolution the petition for review for lack of merit in the
Identical case of Shell Company of the Philippines, Ltd vs. Court of
Appeals 25, wherein the Court thereby affirmed the patent office's
registration of the trademark SHELL as used in the cigarettes
manufactured by therein respondent Fortune Tobacco Corporation
notwithstanding the therein petitioner Shell Company's opposition
thereto as the prior registrant of the same trademark for its
gasoline and other petroleum trademarks, on the strength of the
controlling authority of Acoje Mining Co. vs. Director of Patents,
Supra, and the same rationale that "(I)n the Philippines, where
buyers of appellee's (Fortune Corp.'s) cigarettes, which are low
cost articles, can be more numerous compared to buyers of the
higher priced petroleum and chemical products of appellant (Shell
Co.) and where appellant (Shell) is known to be in the business of
selling petroleum and petroleum-based chemical products, and no
others, it is difficult to conceive of confusion in the minds of the
buying public in the sense it can be thought that appellant (Shell)

is the manufacturer of appellee's (Fortune's) cigarettes, or that


appellee (Fortune) is the manufacturer or processor of appellant's
(Shell's) petroleum and chemical products." 26
ACCORDINGLY, the petition is dismissed and the decision of
respondent Court of Appeals is hereby affirmed.

4 Sec. 22, Trademark Law.


5 2 Callman, Unfair Competition and Trademarks,
p. 1324.
6 Ibid, p. 1123.

Melencio-Herrera, Plana, Relova and Gutierrez, Jr., JJ.,


concur.1wph1.t

7 108 F. 2d 377, 378.

Makasiar, J., is on leave.

8 2 Callman, Unfair Competition and Trademarks,


p. 1336.

Vasquez, J., took no part.

9 2 McCarthy, Trademarks and Unfair Competition,


p. 119.

&
Footnotes1wph1.t
* First Division then cmposed of Villamor, Presiding
Justice, ponente, Concepcion, Jr. and Mojica, JJ.
1 On December 31, 1969, by virtue of an
"Agreement of Exchange and Transfer," the
businesses, properties and other assets in the
Philippines of Esso Standard Eastern, Inc. were
transferred to Esso Philippines, Inc. Its petition to
be substituted by Esso Philippines, Inc. as party
petitioner was denied in a resolution of this Court
dated April 7, 1970, pursuant to the then Solicitor
General's opposition "because of the possible legal
consequence that may arise under the provisions
of the Laurel-Langley Act and other related laws.
2 74 Phil. 50.
3 1 SCRA 253.

10 Vide: Arce vs. Selecta, 1 SCRA 253 (1961); Chua


Che vs. Phil. Patents Office, 13 SCRA 67 (1965);
Ang vs. Teodoro, 74 Phil. 50; Khe vs. Lever Bros.
Co., 49 O.G. 3891 (1941); Ang Si Heng & Dee vs.
Wellington Dept. Store, 92 Phil. 448; Acoje Mining
Co., Inc. vs. Director of Patents, 38 SCRA 480
(1971).
11 2 Callman Unfair Competition & Trade Marks, p.
1257.
12 Arce vs. Selecta, supra.
13 Chua Che vs. Phils. Patent Office, supra.
14 Ang vs. Teodoro, supra.
15 Khe vs. Lever Bros. Co., supra.
16 Ang Si Heng & Dee vs. Wellington Department
Store, supra.

17 38 SCRA 480(1971).
18 G.R. No. L-26676, July 30, 1982 (2nd Division);
see also Leviton Industries vs, Salvador, G. R. L40163, June 19, 1982.
19 Record, p. 128.
20 American Foundries vs. Robertson, 269 US
372,381.

Via this petition for review under Rule 45 of the Rules of Court,
herein petitioners Philip Morris, Inc., Benson & Hedges (Canada)
Inc., and Fabriques de Tabac Reunies, S.A. (now Philip Morris
Products S.A.) seek the reversal and setting aside of the following
issuances of the Court of Appeals (CA) in CA-G.R. CV No. 66619, to
wit:
1. Decision dated January 21, 20031 affirming an earlier
decision of the Regional Trial Court of Pasig City, Branch
166, in its Civil Case No. 47374, which dismissed the
complaint for trademark infringement and damages
thereat commenced by the petitioners against respondent
Fortune Tobacco Corporation; and

21 Record at page 138.


22 George W. Luft Co., Inc. vs. Ngo Guan, 18 SCRA
944 (1966).
23 Record at pages 135-136.
24 Record at pages 137-138.
25 G.R. No. L-49145, petition for review denied May
21, 1979 and judgment entered June 28, 1979.
26 Idem, separate opinion of Court of Appeals
Justice Corazon Juliano Agrava; Record at page 77.
G.R. No. 158589

June 27, 2006

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC.,


and FABRIQUES DE TABAC REUNIES, S.A., (now known as
PHILIP MORRIS PRODUCTS S.A.), Petitioners,
vs.
FORTUNE TOBACCO CORPORATION, Respondent.

2. Resolution dated May 30, 20032 denying petitioners


motion for reconsideration.
Petitioner Philip Morris, Inc., a corporation organized under the laws
of the State of Virginia, United States of America, is, per Certificate
of Registration No. 18723 issued on April 26, 1973 by the Philippine
Patents Office (PPO), the registered owner of the trademark "MARK
VII" for cigarettes. Similarly, petitioner Benson & Hedges (Canada),
Inc., a subsidiary of Philip Morris, Inc., is the registered owner of
the trademark "MARK TEN" for cigarettes as evidenced by PPO
Certificate of Registration No. 11147. And as can be seen in
Trademark Certificate of Registration No. 19053, another subsidiary
of Philip Morris, Inc., the Swiss company Fabriques de Tabac
Reunies, S.A., is the assignee of the trademark "LARK," which was
originally registered in 1964 by Ligget and Myers Tobacco
Company. On the other hand, respondent Fortune Tobacco
Corporation, a company organized in the Philippines, manufactures
and sells cigarettes using the trademark "MARK."
The legal dispute between the parties started when the herein
petitioners, on the claim that an infringement of their respective
trademarks had been committed, filed, on August 18, 1982, a
Complaint for Infringement of Trademark and Damages against
respondent Fortune Tobacco Corporation, docketed as Civil Case
No. 47374 of the Regional Trial Court of Pasig, Branch 166.

DECISION
GARCIA, J.:

The decision under review summarized what happened next, as


follows:

In the Complaint xxx with prayer for the issuance of a preliminary


injunction, [petitioners] alleged that they are foreign corporations
not doing business in the Philippines and are suing on an isolated
transaction. xxx they averred that the countries in which they are
domiciled grant xxx to corporate or juristic persons of the
Philippines the privilege to bring action for infringement, xxx
without need of a license to do business in those countries.
[Petitioners] likewise manifested [being registered owners of the
trademark "MARK VII" and "MARK TEN" for cigarettes as evidenced
by the corresponding certificates of registration and an applicant
for the registration of the trademark "LARK MILDS"]. xxx.
[Petitioners] claimed that they have registered the aforementioned
trademarks in their respective countries of origin and that, by
virtue of the long and extensive usage of the same, these
trademarks have already gained international fame and
acceptance. Imputing bad faith on the part of the [respondent],
petitioners claimed that the [respondent], without any previous
consent from any of the [petitioners], manufactured and sold
cigarettes bearing the identical and/or confusingly similar
trademark "MARK" xxx Accordingly, they argued that
[respondents] use of the trademark "MARK" in its cigarette
products have caused and is likely to cause confusion or mistake,
or would deceive purchasers and the public in general into buying
these products under the impression and mistaken belief that they
are buying [petitioners] products.
Invoking the provisions of the Paris Convention for the Protection of
Industrial and Intellectual Property (Paris Convention, for brevity),
to which the Philippines is a signatory xxx, [petitioners] pointed out
that upon the request of an interested party, a country of the Union
may prohibit the use of a trademark which constitutes a
reproduction, imitation, or translation of a mark already belonging
to a person entitled to the benefits of the said Convention. They
likewise argued that, in accordance with Section 21-A in relation to
Section 23 of Republic Act 166, as amended, they are entitled to
relief in the form of damages xxx [and] the issuance of a writ of
preliminary injunction which should be made permanent to enjoin
perpetually the [respondent] from violating [petitioners] right to
the exclusive use of their aforementioned trademarks.

[Respondent] filed its Answer xxx denying [petitioners] material


allegations and xxx averred [among other things] xxx that "MARK"
is a common word, which cannot particularly identify a product to
be the product of the [petitioners] xxx
xxx
lawphil.net

xxx

xxx.

Meanwhile, after the [respondent] filed its Opposition (Records, Vo.


I, p. 26), the matter of the [petitioners] prayer for the issuance of
a writ of preliminary injunction was negatively resolved by the
court in an Order xxx dated March 28, 1973. [The incidental issue
of the propriety of an injunction would eventually be elevated to
the CA and would finally be resolved by the Supreme Court in its
Decision dated July 16, 1993 in G.R. No. 91332]. xxx.
xxx

xxx

xxx

After the termination of the trial on the merits xxx trial court
rendered its Decision xxx dated November 3, 1999 dismissing the
complaint and counterclaim after making a finding that the
[respondent] did not commit trademark infringement against the
[petitioners]. Resolving first the issue of whether or not
[petitioners] have capacity to institute the instant action, the trial
court opined that [petitioners] failure to present evidence to
support their allegation that their respective countries indeed grant
Philippine corporations reciprocal or similar privileges by law xxx
justifies the dismissal of the complaint xxx. It added that the
testimonies of [petitioners] witnesses xxx essentially declared that
[petitioners] are in fact doing business in the Philippines, but
[petitioners] failed to establish that they are doing so in
accordance with the legal requirement of first securing a license.
Hence, the court declared that [petitioners] are barred from
maintaining any action in Philippine courts pursuant to Section 133
of the Corporation Code.
The issue of whether or not there was infringement of the
[petitioners] trademarks by the [respondent] was likewise
answered xxx in the negative. It expounded that "in order for a
name, symbol or device to constitute a trademark, it must, either
by itself or by association, point distinctly to the origin or
ownership of the article to which it is applied and be of such nature

as to permit an exclusive appropriation by one person". Applying


such principle to the instant case, the trial court was of the opinion
that the words "MARK", "TEN", "LARK" and the Roman Numerals
"VII", either alone or in combination of each other do not by
themselves or by association point distinctly to the origin or
ownership of the cigarettes to which they refer, such that the
buying public could not be deceived into believing that
[respondents] "MARK" cigarettes originated either from the USA,
Canada, or Switzerland.
Emphasizing that the test in an infringement case is the likelihood
of confusion or deception, the trial court stated that the general
rule is that an infringement exists if the resemblance is so close
that it deceives or is likely to deceive a customer exercising
ordinary caution in his dealings and induces him to purchase the
goods of one manufacturer in the belief that they are those of
another. xxx. The trial court ruled that the [petitioners] failed to
pass these tests as it neither presented witnesses or purchasers
attesting that they have bought [respondents] product believing
that they bought [petitioners] "MARK VII", "MARK TEN" or "LARK",
and have also failed to introduce in evidence a specific magazine
or periodical circulated locally, which promotes and popularizes
their products in the Philippines. It, moreover, elucidated that the
words consisting of the trademarks allegedly infringed by
[respondent] failed to show that they have acquired a secondary
meaning as to identify them as [petitioners] products. Hence, the
court ruled that the [petitioners] cannot avail themselves of the
doctrine of secondary meaning.
As to the issue of damages, the trial court deemed it just not to
award any to either party stating that, since the [petitioners] filed
the action in the belief that they were aggrieved by what they
perceived to be an infringement of their trademark, no wrongful
act or omission can be attributed to them. xxx.3 (Words in brackets
supplied)
Maintaining to have the standing to sue in the local forum and that
respondent has committed trademark infringement, petitioners
went on appeal to the CA whereat their appellate recourse was
docketed as CA-G.R. CV No. 66619.
Eventually, the CA, in its Decision dated January 21, 2003, while
ruling for petitioners on the matter of their legal capacity to sue in

this country for trademark infringement, nevertheless affirmed the


trial courts decision on the underlying issue of respondents
liability for infringement as it found that:
xxx the appellants [petitioners] trademarks, i.e., "MARK VII",
"MARK TEN" and "LARK", do not qualify as well-known marks
entitled to protection even without the benefit of actual use in the
local market and that the similarities in the trademarks in question
are insufficient as to cause deception or confusion tantamount to
infringement. Consequently, as regards the third issue, there is
likewise no basis for the award of damages prayed for by the
appellants herein.4 (Word in bracket supplied)
With their motion for reconsideration having been denied by the CA
in its equally challenged Resolution of May 30, 2003, petitioners
are now with this Court via this petition for review essentially
raising the following issues: (1) whether or not petitioners, as
Philippine registrants of trademarks, are entitled to enforce
trademark rights in this country; and (2) whether or not respondent
has committed trademark infringement against petitioners by its
use of the mark "MARK" for its cigarettes, hence liable for
damages.
In its Comment,5 respondent, aside from asserting the correctness
of the CAs finding on its liability for trademark infringement and
damages, also puts in issue the propriety of the petition as it
allegedly raises questions of fact.
The petition is bereft of merit.
Dealing first with the procedural matter interposed by respondent,
we find that the petition raises both questions of fact and law
contrary to the prescription against raising factual questions in a
petition for review on certiorari filed before the Court. A question of
law exists when the doubt or difference arises as to what the law is
on a certain state of facts; there is a question of fact when the
doubt or difference arises as to the truth or falsity of alleged facts. 6
Indeed, the Court is not the proper venue to consider factual issues
as it is not a trier of facts.7 Unless the factual findings of the
appellate court are mistaken, absurd, speculative, conflicting,

tainted with grave abuse of discretion, or contrary to the findings


culled by the court of origin,8 we will not disturb them.
It is petitioners posture, however, that their contentions should
be treated as purely legal since they are assailing erroneous
conclusions deduced from a set of undisputed facts.
Concededly, when the facts are undisputed, the question of
whether or not the conclusion drawn therefrom by the CA is correct
is one of law.9 But, even if we consider and accept as pure
questions of law the issues raised in this petition, still, the Court is
not inclined to disturb the conclusions reached by the appellate
court, the established rule being that all doubts shall be resolved in
favor of the correctness of such conclusions. 10
Be that as it may, we shall deal with the issues tendered and
determine whether the CA ruled in accordance with law and
established jurisprudence in arriving at its assailed decision.
A "trademark" is any distinctive word, name, symbol, emblem,
sign, or device, or any combination thereof adopted and used by a
manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt in by others.11
Inarguably, a trademark deserves protection. For, as Mr. Justice
Frankfurter observed in Mishawaka Mfg. Co. v. Kresge Co.:12
The protection of trademarks is the laws recognition of the
psychological function of symbols. If it is true that we live by
symbols, it is no less true that we purchase goods by them. A
trade-mark is a merchandising short-cut which induces a purchaser
to select what he wants, or what he has been led to believe what
he wants. The owner of a mark exploits this human propensity by
making every effort to impregnate the atmosphere of the market
with the drawing power of a congenial symbol. Whatever the
means employed, the aim is the same - to convey through the
mark, in the minds of potential customers, the desirability of the
commodity upon which it appears. Once this is attained, the trademark owner has something of value. If another poaches upon the
commercial magnetism of the symbol he has created, the owner
can obtain legal redress.

It is thus understandable for petitioners to invoke in this recourse


their entitlement to enforce trademark rights in this country,
specifically, the right to sue for trademark infringement in
Philippine courts and be accorded protection against unauthorized
use of their Philippine-registered trademarks.
In support of their contention respecting their right of action,
petitioners assert that, as corporate nationals of member-countries
of the Paris Union, they can sue before Philippine courts for
infringement of trademarks, or for unfair competition, without need
of obtaining registration or a license to do business in the
Philippines, and without necessity of actually doing business in the
Philippines. To petitioners, these grievance right and mechanism
are accorded not only by Section 21-A of Republic Act (R.A.) No.
166, as amended, or the Trademark Law, but also by Article 2 of
the Paris Convention for the Protection of Industrial Property,
otherwise known as the Paris Convention.
In any event, petitioners point out that there is actual use of their
trademarks in the Philippines as evidenced by the certificates of
registration of their trademarks. The marks "MARK TEN" and
"LARK" were registered on the basis of actual use in accordance
with Sections 2-A13 and 5(a)14 of R.A. No. 166, as amended,
providing for a 2-month pre-registration use in local commerce and
trade while the registration of "MARK VII" was on the basis of
registration in the foreign country of origin pursuant to Section 37
of the same law wherein it is explicitly provided that prior use in
commerce need not be alleged.15
Besides, petitioners argue that their not doing business in the
Philippines, if that be the case, does not mean that cigarettes
bearing their trademarks are not available and sold locally. Citing
Converse Rubber Corporation v. Universal Rubber Products, Inc., 16
petitioners state that such availability and sale may be effected
through the acts of importers and distributors.
Finally, petitioners would press on their entitlement to protection
even in the absence of actual use of trademarks in the country in
view of the Philippines adherence to the Trade Related Aspects of
Intellectual Property Rights or the TRIPS Agreement and the
enactment of R.A. No. 8293, or the Intellectual Property Code
(hereinafter the "IP Code"), both of which provide that the fame of
a trademark may be acquired through promotion or advertising

with no explicit requirement of actual use in local trade or


commerce.
Before discussing petitioners claimed entitlement to enforce
trademark rights in the Philippines, it must be emphasized that
their standing to sue in Philippine courts had been recognized, and
rightly so, by the CA. It ought to be pointed out, however, that the
appellate court qualified its holding with a statement, following
G.R. No. 91332, entitled Philip Morris, Inc., et al. v. The Court of
Appeals and Fortune Tobacco Corporation,17 that such right to sue
does not necessarily mean protection of their registered marks in
the absence of actual use in the Philippines.
Thus clarified, what petitioners now harp about is their entitlement
to protection on the strength of registration of their trademarks in
the Philippines.
As we ruled in G.R. No. 91332,18 supra, so it must be here.
Admittedly, the registration of a trademark gives the registrant,
such as petitioners, advantages denied non-registrants or ordinary
users, like respondent. But while petitioners enjoy the statutory
presumptions arising from such registration,19 i.e., as to the validity
of the registration, ownership and the exclusive right to use the
registered marks, they may not successfully sue on the basis alone
of their respective certificates of registration of trademarks. For,
petitioners are still foreign corporations. As such, they ought, as a
condition to availment of the rights and privileges vis--vis their
trademarks in this country, to show proof that, on top of Philippine
registration, their country grants substantially similar rights and
privileges to Filipino citizens pursuant to Section 21-A 20 of R.A. No.
166.
In Leviton Industries v. Salvador,21 the Court further held that the
aforementioned reciprocity requirement is a condition sine qua non
to filing a suit by a foreign corporation which, unless alleged in the
complaint, would justify dismissal thereof, a mere allegation that
the suit is being pursued under Section 21-A of R.A. No. 166 not
being sufficient. In a subsequent case,22 however, the Court held
that where the complainant is a national of a Paris Conventionadhering country, its allegation that it is suing under said Section
21-A would suffice, because the reciprocal agreement between the

two countries is embodied and supplied by the Paris Convention


which, being considered part of Philippine municipal laws, can be
taken judicial notice of in infringement suits. 23
As well, the fact that their respective home countries, namely, the
United States, Switzerland and Canada, are, together with the
Philippines, members of the Paris Union does not automatically
entitle petitioners to the protection of their trademarks in this
country absent actual use of the marks in local commerce and
trade.
True, the Philippines adherence to the Paris Convention 24
effectively obligates the country to honor and enforce its
provisions25 as regards the protection of industrial property of
foreign nationals in this country. However, any protection accorded
has to be made subject to the limitations of Philippine laws. 26
Hence, despite Article 2 of the Paris Convention which substantially
provides that (1) nationals of member-countries shall have in this
country rights specially provided by the Convention as are
consistent with Philippine laws, and enjoy the privileges that
Philippine laws now grant or may hereafter grant to its nationals,
and (2) while no domicile requirement in the country where
protection is claimed shall be required of persons entitled to the
benefits of the Union for the enjoyment of any industrial property
rights,27 foreign nationals must still observe and comply with the
conditions imposed by Philippine law on its nationals.
Considering that R.A. No. 166, as amended, specifically Sections
228 and 2-A29 thereof, mandates actual use of the marks and/or
emblems in local commerce and trade before they may be
registered and ownership thereof acquired, the petitioners cannot,
therefore, dispense with the element of actual use. Their being
nationals of member-countries of the Paris Union does not alter the
legal situation.
In Emerald Garment Mfg. Corporation v. Court of Appeals, 30 the
Court reiterated its rulings in Sterling Products International, Inc. v.
Farbenfabriken Bayer Aktiengesellschaft,31 Kabushi Kaisha Isetan v.
Intermediate Appellate Court,32 and Philip Morris v. Court of
Appeals and Fortune Tobacco Corporation33 on the importance of
actual commercial use of a trademark in the Philippines
notwithstanding the Paris Convention:

The provisions of the 1965 Paris Convention relied upon by


private respondent and Sec. 21-A of the Trademark Law were
sufficiently expounded upon and qualified in the recent case of
Philip Morris, Inc., et. al. vs. Court of Appeals:
xxx

xxx

xxx

Following universal acquiescence and comity, our municipal law on


trademarks regarding the requirements of actual use in the
Philippines must subordinate an international agreement inasmuch
as the apparent clash is being decided by a municipal tribunal.
Xxx. Withal, the fact that international law has been made part of
the law of the land does not by any means imply the primacy of
international law over national law in the municipal sphere. Under
the doctrine of incorporation as applied in most countries, rules of
International Law are given a standing equal, not superior, to
national legislative enactments.
xxx

xxx

xxx

In other words, (a foreign corporation) may have the capacity to


sue for infringement but the question of whether they have an
exclusive right over their symbol as to justify issuance of the
controversial writ will depend on actual use of their trademarks in
the Philippines in line with Sections 2 and 2-A of the same law. It is
thus incongruous for petitioners to claim that when a foreign
corporation not licensed to do business in the Philippines files a
complaint for infringement, the entity need not be actually using
its trademark in commerce in the Philippines. Such a foreign
corporation may have the personality to file a suit for infringement
but it may not necessarily be entitled to protection due to absence
of actual use of the emblem in the local market.
Contrary to what petitioners suggest, the registration of trademark
cannot be deemed conclusive as to the actual use of such
trademark in local commerce. As it were, registration does not
confer upon the registrant an absolute right to the registered mark.
The certificate of registration merely constitutes prima facie
evidence that the registrant is the owner of the registered mark.
Evidence of non-usage of the mark rebuts the presumption of
trademark ownership,34 as what happened here when petitioners
no less admitted not doing business in this country. 35

Most importantly, we stress that registration in the Philippines of


trademarks does not ipso facto convey an absolute right or
exclusive ownership thereof. To borrow from Shangri-La
International Hotel Management, Ltd. v. Development Group of
Companies, Inc.36 trademark is a creation of use and, therefore,
actual use is a pre-requisite to exclusive ownership; registration is
only an administrative confirmation of the existence of the right of
ownership of the mark, but does not perfect such right; actual use
thereof is the perfecting ingredient.37
Petitioners reliance on Converse Rubber Corporation38 is quite
misplaced, that case being cast in a different factual milieu. There,
we ruled that a foreign owner of a Philippine trademark, albeit not
licensed to do, and not so engaged in, business in the Philippines,
may actually earn reputation or goodwill for its goods in the
country. But unlike in the instant case, evidence of actual sales of
Converse rubber shoes, such as sales invoices, receipts and the
testimony of a legitimate trader, was presented in Converse.
This Court also finds the IP Code and the TRIPS Agreement to be
inapplicable, the infringement complaint herein having been filed
in August 1982 and tried under the aegis of R.A. No. 166, as
amended. The IP Code, however, took effect only on January 1,
1998 without a provision as to its retroactivity.39 In the same vein,
the TRIPS Agreement was inexistent when the suit for infringement
was filed, the Philippines having adhered thereto only on
December 16, 1994.
With the foregoing perspective, it may be stated right off that the
registration of a trademark unaccompanied by actual use thereof
in the country accords the registrant only the standing to sue for
infringement in Philippine courts. Entitlement to protection of such
trademark in the country is entirely a different matter.
This brings us to the principal issue of infringement.
Section 22 of R.A. No. 166, as amended, defines what constitutes
trademark infringement, as follows:
Sec. 22. Infringement, what constitutes. Any person who shall
use, without the consent of the registrant, any reproduction,
counterfeit, copy or colorable imitation of any registered mark or

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 of color ably 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, shall be liable to a civil action by
the registrant for any or all of the remedies herein provided.
Petitioners would insist on their thesis of infringement since
respondents mark "MARK" for cigarettes is confusingly or
deceptively similar with their duly registered "MARK VII," "MARK
TEN" and "LARK" marks likewise for cigarettes. To them, the word
"MARK" would likely cause confusion in the trade, or deceive
purchasers, particularly as to the source or origin of respondents
cigarettes.
The "likelihood of confusion" is the gravamen of trademark
infringement.40 But likelihood of confusion is a relative concept, the
particular, and sometimes peculiar, circumstances of each case
being determinative of its existence. Thus, in trademark
infringement cases, more than in other kinds of litigation,
precedents must be evaluated in the light of each particular case. 41
In determining similarity and likelihood of confusion, jurisprudence
has developed two tests: the dominancy test and the holistic test. 42
The dominancy test43 sets sight on the similarity of the prevalent
features of the competing trademarks that might cause confusion
and deception, thus constitutes infringement. Under this norm, the
question at issue turns on whether the use of the marks involved
would be likely to cause confusion or mistake in the mind of the
public or deceive purchasers.44
In contrast, the holistic test45 entails a consideration of the entirety
of the marks as applied to the products, including the labels and
packaging, in determining confusing similarity.

Upon consideration of the foregoing in the light of the peculiarity of


this case, we rule against the likelihood of confusion resulting in
infringement arising from the respondents use of the trademark
"MARK" for its particular cigarette product.
For one, as rightly concluded by the CA after comparing the
trademarks involved in their entirety as they appear on the
products,46 the striking dissimilarities are significant enough to
warn any purchaser that one is different from the other. Indeed,
although the perceived offending word "MARK" is itself prominent
in petitioners trademarks "MARK VII" and "MARK TEN," the entire
marking system should be considered as a whole and not
dissected, because a discerning eye would focus not only on the
predominant word but also on the other features appearing in the
labels. Only then would such discerning observer draw his
conclusion whether one mark would be confusingly similar to the
other and whether or not sufficient differences existed between the
marks.47
This said, the CA then, in finding that respondents goods cannot
be mistaken as any of the three cigarette brands of the petitioners,
correctly relied on the holistic test.
But, even if the dominancy test were to be used, as urged by the
petitioners, but bearing in mind that a trademark serves as a tool
to point out distinctly the origin or ownership of the goods to which
it is affixed,48 the likelihood of confusion tantamount to
infringement appears to be farfetched. The reason for the origin
and/or ownership angle is that unless the words or devices do so
point out the origin or ownership, the person who first adopted
them cannot be injured by any appropriation or imitation of them
by others, nor can the public be deceived.49
Since the word "MARK," be it alone or in combination with the word
"TEN" and the Roman numeral "VII," does not point to the origin or
ownership of the cigarettes to which they apply, the local buying
public could not possibly be confused or deceived that
respondents "MARK" is the product of petitioners and/or originated
from the U.S.A., Canada or Switzerland. And lest it be overlooked,
no actual commercial use of petitioners marks in local commerce
was proven. There can thus be no occasion for the public in this
country, unfamiliar in the first place with petitioners marks, to be
confused.

For another, a comparison of the trademarks as they appear on the


goods is just one of the appreciable circumstances in determining
likelihood of confusion. Del Monte Corp. v. CA50 dealt with another,
where we instructed to give due regard to the "ordinary
purchaser," thus:
The question is not whether the two articles are distinguishable by
their label when set side by side but whether the general confusion
made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his
confounding it with the original. As observed in several cases, the
general impression of the ordinary purchaser, buying under the
normally prevalent conditions in trade and giving the attention
such purchasers usually give in buying that class of goods is the
touchstone.
When we spoke of an "ordinary purchaser," the reference was not
to the "completely unwary customer" but to the "ordinarily
intelligent buyer" considering the type of product involved. 51
It cannot be over-emphasized that the products involved are
addicting cigarettes purchased mainly by those who are already
predisposed to a certain brand. Accordingly, the ordinary buyer
thereof would be all too familiar with his brand and discriminating
as well. We, thus, concur with the CA when it held, citing a
definition found in Dy Buncio v. Tan Tiao Bok,52 that the "ordinary
purchaser" in this case means "one accustomed to buy, and
therefore to some extent familiar with, the goods in question."
Pressing on with their contention respecting the commission of
trademark infringement, petitioners finally point to Section 22 of
R.A. No. 166, as amended. As argued, actual use of trademarks in
local commerce is, under said section, not a requisite before an
aggrieved trademark owner can restrain the use of his trademark
upon goods manufactured or dealt in by another, it being sufficient
that he had registered the trademark or trade-name with the IP
Office. In fine, petitioners submit that respondent is liable for
infringement, having manufactured and sold cigarettes with the
trademark "MARK" which, as it were, are identical and/or
confusingly similar with their duly registered trademarks "MARK
VII," "MARK TEN" and "LARK".

This Court is not persuaded.


In Mighty Corporation v. E & J Gallo Winery,53 the Court held that
the following constitute the elements of trademark infringement in
accordance not only with Section 22 of R.A. No. 166, as amended,
but also Sections 2, 2-A, 9-A54 and 20 thereof:
(a) a trademark actually used in commerce in the
Philippines and registered in the principal register of the
Philippine Patent Office,
(b) is used by another person in connection with the sale,
offering for sale, or advertising of any goods, business or
services 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 such trademark is
reproduced, counterfeited, copied or colorably imitated by
another person and such reproduction, counterfeit, copy or
colorable imitation is applied to labels, signs, prints,
packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such
goods, business or services as to likely cause confusion or
mistake or to deceive purchasers,
(c) the trademark is used for identical or similar goods, and
(d) such act is done without the consent of the trademark
registrant or assignee.lawphil.net
As already found herein, while petitioners have registered the
trademarks "MARK VII," "MARK TEN" and "LARK" for cigarettes in
the Philippines, prior actual commercial use thereof had not been
proven. In fact, petitioners judicial admission of not doing business
in this country effectively belies any pretension to the contrary.
Likewise, we note that petitioners even failed to support their claim
that their respective marks are well-known and/or have acquired
goodwill in the Philippines so as to be entitled to protection even
without actual use in this country in accordance with Article 6bis 55
of the Paris Convention. As correctly found by the CA, affirming
that of the trial court:

xxx the records are bereft of evidence to establish that the


appellants [petitioners] products are indeed well-known in the
Philippines, either through actual sale of the product or through
different forms of advertising. This finding is supported by the fact
that appellants admit in their Complaint that they are not doing
business in the Philippines, hence, admitting that their products
are not being sold in the local market. We likewise see no cogent
reason to disturb the trial courts finding that the appellants failed
to establish that their products are widely known by local
purchasers as "(n)o specific magazine or periodical published in
the Philippines, or in other countries but circulated locally" have
been presented by the appellants during trial. The appellants also
were not able to show the length of time or the extent of the
promotion or advertisement made to popularize their products in
the Philippines.56
Last, but not least, we must reiterate that the issue of trademark
infringement is factual, with both the trial and appellate courts
having peremptorily found allegations of infringement on the part
of respondent to be without basis. As we said time and time again,
factual determinations of the trial court, concurred in by the CA,
are final and binding on this Court.57
For lack of convincing proof on the part of the petitioners of actual
use of their registered trademarks prior to respondents use of its
mark and for petitioners failure to demonstrate confusing
similarity between said trademarks, the dismissal of their basic
complaint for infringement and the concomitant plea for damages
must be affirmed. The law, the surrounding circumstances and the
equities of the situation call for this disposition.
WHEREFORE, the petition is hereby DENIED. Accordingly, the
assailed decision and resolution of the Court of Appeals are
AFFIRMED.

WE CONCUR:
REYNATO S. PUNO
Associate Justice
Chairperson
ANGELINA SANDOVALGUTIERREZ
Associate Justice

ADOLFO S. AZCUNA
Associate Justice
ATTESTATION
I attest that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the
opinion of the Courts Division.
REYNATO S. PUNO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, and the
Division Chairperson's Attestation, it is hereby certified that the
conclusions in the above decision were reached in consultation
before the case was assigned to the writer of the opinion of the
Court.
ARTEMIO V. PANGANIBAN
Chief Justice

Costs against the petitioners.


SO ORDERED.
Footnotes
CANCIO C. GARCIA
Associate Justice

RENATO C. CORONA
Asscociate Justice

Penned by Associate Justice Mercedes Gozo-Dadole (ret.)


and concurred in by Associate Justices Bennie Adefuin-Dela
Cruz (ret.) and Mariano C. del Castillo; Rollo, pp. 9-34.
1

Id. at 36.

CA Decision; Id. at 10-19.

his merchandise, [or] business xxx from the merchandise,


business or service of others. The ownership or possession
of a trademark, trade name, servicemark, heretofore or
hereafter appropriated, as in this section provided, shall be
recognized and protected in the same manner and to the
same extent as are other property rights known to the law.
14

CA Decision; Id. at 33.

(a) Sworn statement of the applicants domicile


and citizenship, the date of the applicants first use
of the mark or trade-name, the date of the
applicants first use of the mark or trade-name in
commerce or business, the goods, business or
services in connection with which the mark or
trade-name is used and the mode or manner in
which the mark is used in connection with such
goods, business or services, and that the person
making the application believes himself, or the
firm, corporation or association on whose behalf he
makes the verification, to be the owner of the mark
or trade-name sought to be registered, that the
mark or trade-name is in use in commerce or
business, and that to be best of his knowledge no
person, firm, corporation or association has the
right to use such mark or trade-name in commerce
or business either in the identical form thereof or in
such near resemblance thereto as might be
calculated to deceive; xxx.

Id. at 228-296.

Ramos v. Pepsi-Cola Bottling Co. of the Phils., L-22533,


February 9, 1967, 19 SCRA 289, 292.
6

Moomba Mining Exploration Co. v. CA, G.R. No. 108846,


October 26, 99, 317 SCRA 388, 397.
7

Smith Kline Beckman Corporation v. CA, G.R. No. 126627,


August 14, 2003, 409 SCRA 33, 39.
8

F. D. Regalado, REMEDIAL LAW COMPENDIUM, Vol. 1, 1999


ed., p. 541.
9

Ibid., citing Pilar Dev. Corp. v. IAC, et al., G.R. No. 72283,
December 12, 1986, 146 SCRA 215.
10

11

Sec. 38 of R.A. No. 166.

316 U.S. 203, 53 USPQ 323 [1942] cited in Societe Des


Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012,
April 4, 2001, 356 SCRA 207, 215.
12

Sec. 2-A. Ownership of trademarks, trade names and


servicemarks; how acquired. Anyone who lawfully
produces or deals in merchandise of any kind or who
engages in any lawful business, xxx, by actual use thereof
in manufacture or trade, in business, xxx, may appropriate
to his exclusive use a trademark, a trade name, or a
servicemark not so appropriated by another, to distinguish
13

SEC. 5. Requirements of the application. xxx

Sec. 37. Rights of Foreign Registrants-Persons who are


nationals of, domiciled in, or have a bona fide or effective
business or commercial establishment in any foreign
country, which is a party to an international convention or
treaty relating to marks or tradenames on the repression of
unfair competition to which the Philippines may be a party,
shall be entitled to the benefits and subject to the
provisions of this Act . . . x x x
15

"Tradenames of persons described in the first


paragraph of this section shall be protected without
the obligation of filing or registration (sic) whether
or not they form parts of marks."

17

that foreign nationals should be given the same treatment


in each of the member countries as that country makes
available to its own citizens. (La Chemise Lacoste, S.A. v.
Fernandez, G.R. No. L-63796-97, May 21, 1984, 129 SCRA
373.)

Superseded by R.A. No. 8293 which took effect on


January 1, 1998.

25

16

G.R. No. L-27906, January 8, 1987, 147 SCRA 154.

Philip Morris, Inc., et al. vs. CA, et al., July 16, 1993, 224
SCRA 576, 595.
18

SEC. 20. Certificate of registration prima facie evidence


of validity. - A certificate of registration of a mark or trade
name shall be prima facie evidence of the validity of the
registration, the registrants ownership of the mark xxx,
and of the registrants exclusive right to use the same xxx,
subject to any conditions and limitations stated therein.
(Superseded by Sec. 138 of R.A. No. 8293).

See La Chemise Lacoste S.A. v. Fernandez, supra at pp.


386-387.

19

SECTION 21-A. Any foreign corporation or juristic person


to which a mark or trade-name has been registered or
assigned under this Act may bring an action hereunder for
infringement, xxx, whether or not it has been licensed to
do business in the Philippines under Act [No. 1495] or the
Corporation Law, at the time it brings complaint: Provided,
That the country of which the said foreign corporation or
juristic person is a citizen or in which it is domiciled, by
treaty, convention or law, grants a similar privilege to
corporate or juristic persons of the Philippines.
(Superseded by Section 160 of R.A. No. 8293)
20

21

G.R. No. L-40163, June 19, 1982, 114 SCRA 420.

Puma Sportschufabriken Rudolf Dassler, K.G. v. IAC., G.R.


No. 75067, February 26, 1988, 158 SCRA 233.
22

Agpalo, The Law on Trademark, Infringement and Unfair


Competition, 2000 ed., pp. 209-210.
23

The Paris Convention is essentially a compact among the


various member countries to accord in their own countries
to citizens of the other contracting parties trademarks and
other rights comparable to those accorded their own
citizens by their domestic laws. The underlying principle is

Agpalo, The Law on Trademark, Infringement and Unfair


Competition, supra at p. 199.
26

ART. 2. Nationals of each of the countries of the Union


shall, as regards the protection of industrial property, enjoy
in all the other countries of the Union the advantages that
their respective laws now grant, or may hereafter grant, to
nationals, without prejudice to the rights specially provided
by the present Convention. Consequently, they shall have
the same protection as the latter, and the same legal
remedy against any infringement of their rights, provided
they observe the conditions and formalities imposed upon
nationals.
27

Sec. 2. What are registrable. Trademarks, tradenames


and service marks owned by persons, corporations,
partnerships or associations domiciled in the Philippines
and by persons, corporations, partnerships or associations
domiciled in any foreign country may be registered in
accordance with the provisions of this Act; Provided, That
said trademarks, tradenames, or service marks are actually
in use in commerce and services not less than two months
in the Philippines before the time the applications for
registration are filed; And provided, further, That the
country of which the applicant for registration is a citizen
grants by law substantially similar privileges to citizens of
the Philippines, and such fact is officially certified, . (As
amended by R.A. No. 865).
28

24

Sec. 2-A. Ownership of trademarks, trade names and


servicemarks; how acquired. Anyone who lawfully
produces or deals in merchandise of any kind or who
engages in any lawful business, or who renders any lawful
29

service in commerce, by actual use thereof in manufacture


or trade, in business, and in the service rendered, may
appropriate to his exclusive use a trademark, a trade
name, or a servicemark not so appropriated by another, to
distinguish his merchandise, business or service from the
merchandise, business or service of others. The ownership
or possession of a trademark, trade name, servicemark,
heretofore or hereafter appropriated, as in this section
provided, shall be recognized and protected in the same
manner and to the same extent as are other property
rights known to the law. (Now Sec. 122 of R.A. No. 8293.)
G.R. No. 100098, December 29, 1995, 251 SCRA 600,
619-621.

Gallo Winery, G.R. No. 154342, July 14, 2004, 434 SCRA
473, 504.
42

Id. at p. 506.

Applied in McDonalds Corp. v. L.C. Big Mak Burger, Inc.,


supra; Asia Brewery, Inc. v. CA, G.R. No. 103543, July 5,
1993, 224 SCRA 437; Converse Rubber Corp. v. Universal
Rubber Products, Inc., supra; Phil. Nut Industry Inc. v.
Standard Brands, Inc., et al., L-23035, July 31, 1975, 65
SCRA 575.
43

30

31

L-19906, April 30, 1969, 27 SCRA 1214.

32

G.R. No. 75420, November 15, 1991, 203 SCRA 583.

33

Supra.

34

Emerald Garment Mfg. Corp. supra at p. 623.

Emerald Garment Mfg. Corporation v. Court of Appeals,


supra at p. 615.
44

Applied in Emerald Garment Mfg. Corporation v. Court of


Appeals, supra; Del Monte Corp. v. CA, G.R. No. 78325,
January 25, 1990, 181 SCRA 410; Fruit of the Loom, Inc. v.
CA, et al., L-32747, September 29, 1984, 133 SCRA 405;
Bristol Myers Co. v. Dir. of Patents, et al., L-21587, May 19,
1966, 17 SCRA 128.
45

46
35

See CA Decision; Rollo, pp. 28-30.

Petitioners Complaint in the RTC; Rollo, p. 207.


Mead Johnson & Co. v. N.V.J. Van Dorp. Ltd., et al., L17501, April 27, 1963, 7 SCRA 768, 771.
47

36

G.R. No. 159938, March 31, 2006.

37

Supra note 32.

38

Supra note 16.

39

Sec. 241 of IP Code.

McDonalds Corp. v. L.C. Big Mak Burger, Inc., G.R. No.


143993, August 18, 2004, 437 SCRA 10.

Gabriel v. Perez, et al., L-24075, January 31, 1974, 55


SCRA 406.
48

49

74 Am. Jur. 2d, Trademarks and Tradenames, Sec. 5.

50

Supra at p. 417.

51

Emerald Garment Mfg. Corp. v. CA, supra at p. 618.

52

42 Phil. 190 (1921).

53

G.R. No. 154342, July 14, 2004, 434 SCRA 473, 496-497.

40

Emerald Garment Mfg. Corporation v. CA, supra, citing


Esso Standard Eastern Inc. v. CA, L-29971, August 31,
1982, 116 SCRA 336; also in Mighty Corporation v. E & J
41

Sec. 9-A. Equitable principles to govern proceedings. In


opposition proceedings and in all other inter partes
proceedings under this Act, equitable principles of
laches, estoppel, and acquiescence where applicable, may
be considered and applied. (As added by R.A. No. 638.)
54

Art. 6bis provides: x x x the countries of the Union


undertakes, either administratively if their legislation so
permits, or at the request of an interested party, to refuse
or to cancel the registration and to prohibit the use of a
trademark which constitutes a reproduction, imitation or
translation, liable to create confusion, of a mark considered
by the competent authority of the country of registration or
use to be well-known in that country as being already the
mark of a person entitled to the benefits of the present
Convention and used for identical or similar goods. These
provisions shall also apply when the essential part of the
mark constitutes a reproduction of any of such well-known
mark or an imitation liable to create confusion therewith.
55

56

Rollo, p. 179.

Sambar v. Levi Strauss & Co., G.R. No. 132604, March 6,


2002, 378 SCRA 364, 370.
57

G.R. No. 166115

February 2, 2007

McDONALDS CORPORATION, Petitioner,


vs.
MACJOY FASTFOOD CORPORATION, Respondent.

DECISION
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of
Court, herein petitioner McDonalds Corporation seeks the reversal
and setting aside of the following issuances of the Court of Appeals
(CA) in CA-G.R. SP No. 57247, to wit:
1. Decision dated 29 July 20041 reversing an earlier
decision of the Intellectual Property Office (IPO) which
rejected herein respondent MacJoy FastFood Corporations
application for registration of the trademark "MACJOY &
DEVICE"; and
2. Resolution dated 12 November 20042 denying the
petitioners motion for reconsideration.
As culled from the record, the facts are as follows:
On 14 March 1991, respondent MacJoy Fastfood Corporation, a
domestic corporation engaged in the sale of fast food products in
Cebu City, filed with the then Bureau of Patents, Trademarks and
Technology Transfer (BPTT), now the Intellectual Property Office
(IPO), an application, thereat identified as Application Serial No.
75274, for the registration of the trademark "MACJOY & DEVICE" for
fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok,
tacos, sandwiches, halo-halo and steaks under classes 29 and 30
of the International Classification of Goods.
Petitioner McDonalds Corporation, a corporation duly organized
and existing under the laws of the State of Delaware, USA, filed a
verified Notice of Opposition3 against the respondents application
claiming that the trademark "MACJOY & DEVICE" so resembles its
corporate logo, otherwise known as the Golden Arches or "M"
design, and its marks "McDonalds," McChicken," "MacFries,"
"BigMac," "McDo," "McSpaghetti," "McSnack," and "Mc,"
(hereinafter collectively known as the MCDONALDS marks) 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. Likewise, the
petitioner alleged that the respondents use and adoption in bad

faith of the "MACJOY & DEVICE" mark would falsely tend to suggest
a connection or affiliation with petitioners restaurant services and
food products, thus, constituting a fraud upon the general public
and further cause the dilution of the distinctiveness of petitioners
registered and internationally recognized MCDONALDS marks to
its prejudice and irreparable damage. The application and the
opposition thereto was docketed as Inter Partes Case No. 3861.
Respondent denied the aforementioned allegations of the
petitioner and averred that it has used the mark "MACJOY" for the
past many years in good faith and has spent considerable sums of
money for said marks extensive promotion in tri-media, especially
in Cebu City where it has been doing business long before the
petitioner opened its outlet thereat sometime in 1992; and that its
use of said mark would not confuse affiliation with the petitioners
restaurant services and food products because of the differences in
the design and detail of the two (2) marks.
In a decision4 dated December 28, 1998, the IPO, ratiocinating that
the predominance of the letter "M," and the prefixes "Mac/Mc" in
both the "MACJOY" and the "MCDONALDS" marks lead to the
conclusion that there is confusing similarity between them
especially since both are used on almost the same products falling
under classes 29 and 30 of the International Classification of
Goods, i.e., food and ingredients of food, sustained the petitioners
opposition and rejected the respondents application, viz:
WHEREFORE, the Opposition to the registration of the mark
MACJOY & DEVICE for use in fried chicken and chicken barbecue,
burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo,
and steaks is, as it is hereby, SUSTAINED. Accordingly, Application
Serial No. 75274 of the herein Respondent-Applicant is REJECTED.
Let the filewrapper of MACJOY subject matter of this case be sent
to the Administrative, Financial and Human Resources
Development Bureau for appropriate action in accordance with this
Decision, with a copy to be furnished the Bureau of Trademarks for
information and to update its record.
SO ORDERED.

In time, the respondent moved for a reconsideration but the IPO


denied the motion in its Order5 of January 14, 2000.
Therefrom, the respondent went to the CA via a Petition for Review
with prayer for Preliminary Injunction6 under Rule 43 of the Rules of
Court, whereat its appellate recourse was docketed as CA-G.R. SP
No. 57247.
Finding no confusing similarity between the marks "MACJOY" and
"MCDONALDS," the CA, in its herein assailed Decision7 dated July
29, 2004, reversed and set aside the appealed IPO decision and
order, thus:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered by us REVERSING and SETTING ASIDE the Decision of the
IPO dated 28 December 1998 and its Order dated 14 January 2000
and ORDERING the IPO to give due course to petitioners
Application Serial No. 75274.
SO ORDERED.
Explains the CA in its decision:
xxx, it is clear that the IPO brushed aside and rendered useless the
glaring and drastic differences and variations in style of the two
trademarks and even decreed that these pronounced differences
are "miniscule" and considered them to have been "overshadowed
by the appearance of the predominant features" such as "M," "Mc,"
and "Mac" appearing in both MCDONALDS and MACJOY marks.
Instead of taking into account these differences, the IPO
unreasonably shrugged off these differences in the device, letters
and marks in the trademark sought to be registered. The IPO
brushed aside and ignored the following irrefutable facts and
circumstances showing differences between the marks of MACJOY
and MCDONALDS. They are, as averred by the petitioner [now
respondent]:
1. The word "MacJoy" is written in round script while the
word "McDonalds" is written in single stroke gothic;

2. The word "MacJoy" comes with the picture of a chicken


head with cap and bowtie and wings sprouting on both
sides, while the word "McDonalds" comes with an arches
"M" in gold colors, and absolutely without any picture of a
chicken;
3. The word "MacJoy" is set in deep pink and white color
scheme while "McDonalds" is written in red, yellow and
black color combination;
4. The faade of the respective stores of the parties are
entirely different. Exhibits 1 and 1-A, show that
[respondents] restaurant is set also in the same bold,
brilliant and noticeable color scheme as that of its
wrappers, containers, cups, etc., while [petitioners]
restaurant is in yellow and red colors, and with the mascot
of "Ronald McDonald" being prominently displayed
therein." (Words in brackets supplied.)
Petitioner promptly filed a motion for reconsideration. However, in
its similarly challenged Resolution8 of November 12, 2004, the CA
denied the motion, as it further held:
Whether a mark or label of a competitor resembles another is to be
determined by an inspection of the points of difference and
resemblance as a whole, and not merely the points of
resemblance. The articles and trademarks employed and used by
the [respondent] Macjoy Fastfood Corporation are so different and
distinct as to preclude any probability or likelihood of confusion or
deception on the part of the public to the injury of the trade or
business of the [petitioner] McDonalds Corporation. The "Macjoy &
Device" mark is dissimilar in color, design, spelling, size, concept
and appearance to the McDonalds marks. (Words in brackets
supplied.)
Hence, the petitioners present recourse on the following grounds:
I.
THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS
"MACJOY & DEVICE" MARK IS NOT CONFUSINGLY SIMILAR TO
PETITIONERS "McDONALDS MARKS." IT FAILED TO CORRECTLY

APPLY THE DOMINANCY TEST WHICH HAS BEEN CONSISTENTLY


APPLIED BY THIS HONORABLE COURT IN DETERMINING THE
EXISTENCE OF CONFUSING SIMILARITY BETWEEN COMPETING
MARKS.
A. The McDonalds Marks belong to a well-known
and established "family of marks" distinguished by
the use of the prefix "Mc" and/or "Mac" and the
corporate "M" logo design.
B. The prefix "Mc" and/or "Mac" is the dominant
portion of both Petitioners McDonalds Marks and
the Respondents "Macjoy & Device" mark. As
such, the marks are confusingly similar under the
Dominancy Test.
C. Petitioners McDonalds Marks are well-known
and world-famous marks which must be protected
under the Paris Convention.

petition. As can be gleaned from the petitioners Board of


Directors Resolution dated December 5, 2002, as embodied in the
Certificate of the Assistant Secretary dated December 21, 2004, 11
Sheila Lehr was one of those authorized and empowered "to
execute and deliver for and on behalf of [the petitioner] all
documents as may be required in connection with x x x the
protection and maintenance of any foreign patents, trademarks,
trade-names, and copyrights owned now or hereafter by [the
petitioner], including, but not limited to, x x x documents required
to institute opposition or cancellation proceedings against
conflicting trademarks, and to do such other acts and things and to
execute such other documents as may be necessary and
appropriate to effect and carry out the intent of this resolution."
Indeed, the afore-stated authority given to Lehr necessarily
includes the authority to execute and sign the mandatorily required
certification of non-forum shopping to support the instant petition
for review which stemmed from the "opposition proceedings"
lodged by the petitioner before the IPO. Considering that the
person who executed and signed the certification against forum
shopping has the authority to do so, the petition, therefore, is not
procedurally defective.

II.
THE COURT OF APPEALS ERRED IN RULING THAT THE DECISION OF
THE IPO DATED 28 DECEMBER 1998 AND ITS ORDER DATED 14
JANUARY 2000 WERE NOT BASED ON SUBSTANTIAL EVIDENCE.
In its Comment,9 the respondent asserts that the petition should be
dismissed outright for being procedurally defective: first, because
the person who signed the certification against forum shopping in
behalf of the petitioner was not specifically authorized to do so,
and second, because the petition does not present a reviewable
issue as what it challenges are the factual findings of the CA. In
any event, the respondent insists that the CA committed no
reversible error in finding no confusing similarity between the
trademarks in question.
The petition is impressed with merit.
Contrary to respondents claim, the petitioners Managing Counsel,
Sheila Lehr, was specifically authorized to sign on behalf of the
petitioner the Verification and Certification10 attached to the

As regards the respondents argument that the petition raises only


questions of fact which are not proper in a petition for review,
suffice it to say that the contradictory findings of the IPO and the
CA constrain us to give due course to the petition, this being one of
the recognized exceptions to Section 1, Rule 45 of the Rules of
Court. True, this Court is not the proper venue to consider factual
issues as it is not a trier of facts.12 Nevertheless, when the factual
findings of the appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or
contrary to the findings culled by the court of origin, 13 as here, this
Court will review them.
The old Trademark Law, Republic Act (R.A.) No. 166, as amended,
defines a "trademark" as any distinctive word, name, symbol,
emblem, sign, or device, or any combination thereof adopted and
used by a manufacturer or merchant on his goods to identify and
distinguish them from those manufactured, sold, or dealt in by
others.14

Under the same law, the registration of a trademark is subject to


the provisions of Section 4 thereof, paragraph (d) of which is
pertinent to this case. The provision reads:
Section 4. Registration of trademarks, trade-names and servicemarks on the principal register. There is hereby established a
register of trademarks, tradenames and service-marks which shall
be known as the principal register. The owner of the trade-mark,
trade-name or service-mark used to distinguish his goods, business
or services of others shall have the right to register the same on
the principal register, unless it:
xxx xxx xxx
(d) Consists of or comprises a mark or trade-name which so
resembles a mark or trade-name registered in the Philippines or a
mark or trade-name previously used in the Philippines by another
and not abandoned, as to be likely, when applied to or used in
connection with the goods, business or services of the applicant, to
cause confusion or mistake or to deceive purchasers;
xxx xxx xxx

"Mc" and/or "Mac" in both the marks. In reversing the conclusion


reached by the IPO, the CA, while seemingly applying the
dominancy test, in fact actually applied the holistic test. The
appellate court ruled in this wise:
Applying the Dominancy test to the present case, the IPO should
have taken into consideration the entirety of the two marks instead
of simply fixing its gaze on the single letter "M" or on the
combinations "Mc" or "Mac". A mere cursory look of the subject
marks will reveal that, save for the letters "M" and "c", no other
similarity exists in the subject marks.
We agree with the [respondent] that it is entirely unwarranted for
the IPO to consider the prefix "Mac" as the predominant feature
and the rest of the designs in [respondents] mark as details.
Taking into account such paramount factors as color, designs,
spelling, sound, concept, sizes and audio and visual effects, the
prefix "Mc" will appear to be the only similarity in the two
completely different marks; and it is the prefix "Mc" that would
thus appear as the miniscule detail. When pitted against each
other, the two marks reflect a distinct and disparate visual
impression that negates any possible confusing similarity in the
mind of the buying public. (Words in brackets supplied.)

Essentially, the issue here is whether there is a confusing similarity


between the MCDONALDS marks of the petitioner and the
respondents "MACJOY & DEVICE" trademark when applied to
Classes 29 and 30 of the International Classification of Goods, i.e.,
food and ingredients of food.

Petitioner now vigorously points out that the dominancy test should
be the one applied in this case.

In determining similarity and likelihood of confusion, jurisprudence


has developed two tests, the dominancy test and the holistic test. 15
The dominancy test focuses on the similarity of the prevalent
features of the competing trademarks that might cause confusion
or deception.16 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.17 Under the latter test, a comparison of the words is not
the only determinant factor.18 1awphi1.net

In trademark cases, particularly in ascertaining whether one


trademark is confusingly similar to another, no set rules can be
deduced because each case must be decided on its merits. 19 In
such cases, even more than in any other litigation, precedent must
be studied in the light of the facts of the particular case. 20 That is
the reason why in trademark cases, jurisprudential precedents
should be applied only to a case if they are specifically in point. 21

Here, the IPO used the dominancy test in concluding that there was
confusing similarity between the two (2) trademarks in question as
it took note of the appearance of the predominant features "M",

We agree.

While we agree with the CAs detailed enumeration of differences


between the two (2) competing trademarks herein involved, we
believe that the holistic test is not the one applicable in this case,
the dominancy test being the one more suitable. In recent cases
with a similar factual milieu as here, the Court has consistently

used and applied the dominancy test in determining confusing


similarity or likelihood of confusion between competing
trademarks.22
Notably, in McDonalds Corp. v. LC Big Mak Burger, Inc., 23 a case
where the trademark "Big Mak" was found to be confusingly similar
with the "Big Mac" mark of the herein the petitioner, the Court
explicitly held:
This Court, xxx, has relied on the dominancy test rather than the
holistic test. The dominancy test considers the dominant features
in the competing marks in determining whether they are
confusingly similar. Under the dominancy test, courts give greater
weight to the similarity of the appearance of the product arising
from the adoption of the dominant features of the registered mark,
disregarding minor differences. Courts will consider more the aural
and visual impressions created by the marks in the public mind,
giving little weight to factors like prices, quality, sales outlets and
market segments.
Moreover, in Societe Des Produits Nestle, S.A. v. CA24 the Court,
applying the dominancy test, concluded that the use by the
respondent therein of the word "MASTER" for its coffee product
"FLAVOR MASTER" was likely to cause confusion with therein
petitioners coffee products "MASTER ROAST" and "MASTER
BLEND" and further ruled:
xxx, the totality or holistic test is contrary to the elementary
postulate of the law on trademarks and unfair competition that
confusing similarity is to be determined on the basis of visual,
aural, connotative comparisons and overall impressions
engendered by the marks in controversy as they are encountered
in the marketplace. The totality or holistic test only relies on visual
comparisons between two trademarks whereas the dominancy test
relies not only on the visual but also on the aural and connotative
comparisons and overall impressions between the two trademarks.
Applying the dominancy test to the instant case, the Court finds
that herein petitioners "MCDONALDS" and respondents "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 archlike, capitalized and stylized manner. 25
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 MCDONALDS marks which all use the prefixes Mc
and/or Mac.
Besides and most importantly, both trademarks are used in the
sale of fastfood products. Indisputably, the respondents trademark
application for the "MACJOY & DEVICE" trademark covers goods
under Classes 29 and 30 of the International Classification of
Goods, namely, fried chicken, chicken barbeque, burgers, fries,
spaghetti, etc. Likewise, the petitioners trademark registration for
the MCDONALDS marks in the Philippines covers goods which are
similar if not identical to those covered by the respondents
application.
Thus, we concur with the IPOs findings that:
In the case at bar, the predominant features such as the "M," "Mc,"
and "Mac" appearing in both McDonalds marks and the MACJOY &
DEVICE" easily attract the attention of would-be customers. Even
non-regular customers of their fastfood restaurants would readily
notice the predominance of the "M" design, "Mc/Mac" prefixes
shown in both marks. Such that the common awareness or
perception of customers that the trademarks McDonalds mark and
MACJOY & DEVICE are one and the same, or an affiliate, or under
the sponsorship of the other is not far-fetched.
The differences and variations in styles as the device depicting a
head of chicken with cap and bowtie and wings sprouting on both
sides of the chicken head, the heart-shaped "M," and the stylistic
letters in "MACJOY & DEVICE;" in contrast to the arch-like "M" and
the one-styled gothic letters in McDonalds marks are of no
moment. These minuscule variations are overshadowed by the
appearance of the predominant features mentioned hereinabove.

Thus, with the predominance of the letter "M," and prefixes


"Mac/Mc" found in both marks, the inevitable conclusion is there is
confusing similarity between the trademarks Mc Donalds marks
and "MACJOY AND DEVICE" especially considering the fact that
both marks are being used on almost the same products falling
under Classes 29 and 30 of the International Classification of
Goods i.e. Food and ingredients of food.

while the first McDonalds outlet of the petitioner thereat was


opened only in 1992, is downright unmeritorious. For the
requirement of "actual use in commerce x x x in the Philippines"
before one may register a trademark, trade-name and service
mark under the Trademark Law33 pertains to the territorial
jurisdiction of the Philippines and is not only confined to a certain
region, province, city or barangay.

With the existence of confusing similarity between the subject


trademarks, the resulting issue to be resolved is who, as between
the parties, has the rightful claim of ownership over the said
marks.

Likewise wanting in merit is the respondents claim that the


petitioner cannot acquire ownership of the word "Mac" because it
is a personal name which may not be monopolized as a trademark
as against others of the same name or surname. As stated earlier,
once a trademark has been registered, the validity of the mark is
prima facie presumed. In this case, the respondent failed to
overcome such presumption. We agree with the observations of
the petitioner regarding the respondents explanation that the
word "MACJOY" is based on the name of its presidents niece,
Scarlett Yu Carcell. In the words of the petitioner:

We rule for the petitioner.


A mark is valid if it is distinctive and hence not barred from
registration under the Trademark Law. However, once registered,
not only the marks validity but also the registrants ownership
thereof is prima facie presumed.26
Pursuant to Section 3727 of R.A. No. 166, as amended, as well as
the provision regarding the protection of industrial property of
foreign nationals in this country as embodied in the Paris
Convention28 under which the Philippines and the petitioners
domicile, the United States, are adherent-members, the petitioner
was able to register its MCDONALDS marks successively, i.e.,
"McDonalds" in 04 October, 197129 ; the corporate logo which is
the "M" or the golden arches design and the "McDonalds" with the
"M" or golden arches design both in 30 June 1977 30 ; and so on and
so forth.31
On the other hand, it is not disputed that the respondents
application for registration of its trademark "MACJOY & DEVICE"
was filed only on March 14, 1991 albeit the date of first use in the
Philippines was December 7, 1987.32
Hence, from the evidence on record, it is clear that the petitioner
has duly established its ownership of the mark/s.
Respondents contention that it was the first user of the mark in
the Philippines having used "MACJOY & DEVICE" on its restaurant
business and food products since December, 1987 at Cebu City

First of all, Respondent failed to present evidence to support the


foregoing claim which, at best, is a mere self-serving assertion.
Secondly, it cannot be denied that there is absolutely no
connection between the name "Scarlett Yu Carcel" and "MacJoy" to
merit the coinage of the latter word. Even assuming that the word
"MacJoy" was chosen as a term of endearment, fondness and
affection for a certain Scarlett Yu Carcel, allegedly the niece of
Respondents president, as well as to supposedly bring good luck
to Respondents business, one cannot help but wonder why out of
all the possible letters or combinations of letters available to
Respondent, its president had to choose and adopt a mark with the
prefix "Mac" as the dominant feature thereof. A more plausible
explanation perhaps is that the niece of Respondents president
was fond of the food products and services of the Respondent, but
that is beside the point." 34
By reason of the respondents 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 respondent would want to ride high on the established
reputation and goodwill of the MCDONALDs marks, which, as
applied to petitioners restaurant business and food products, is
undoubtedly beyond question.

Thus, the IPO was correct in rejecting and denying the


respondents application for registration of the trademark "MACJOY
& DEVICE." As this Court ruled in Faberge Inc. v. IAC, 35 citing
Chuanchow Soy & Canning Co. v. Dir. of Patents and Villapanta:36

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby


certified that the conclusions in the above decision had been
reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.

When one applies for the registration of a trademark or label which


is almost the same or very closely resembles one already used and
registered by another, the application should be rejected and
dismissed outright, even without any opposition on the part of the
owner and user of a previously registered label or trademark, this
not only to avoid confusion on the part of the public, but also to
protect an already used and registered trademark and an
established goodwill.

REYNATO S. PUNO
Chief Justice

Footnotes
Penned by Associate Justice Isaias P. Dicdican and
concurred in by Associate Justices Elvi John S. Asuncion and
Ramon Bato, Jr.; Rollo, pp. 209-219.
1

WHEREFORE, the instant petition is GRANTED. Accordingly, the


assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP NO. 57247, are REVERSED and SET ASIDE and the Decision of
the Intellectual Property Office in Inter Partes Case No. 3861 is
REINSTATED.

Id. at 256-257.

Id. at 77-81.

Id. at 114-122.

Id. at 139-142.

CANCIO C. GARCIA
Associate Justice

Id. at 144-159.

WE CONCUR:

Supra note 1.

Supra note 2.

Rollo, pp. 291-306.

No pronouncement as to costs.
SO ORDERED.

REYNATO S. PUNO
Chief Justice
Chairperson
ANGELINA SANDOVALGUTIERREZ
Associate Justice

RENATO C. CORONA
Asscociate Justice

ADOLFO S. AZCUNA
Associate Justice
CERTIFICATION

10

Id. at 72.

11

Id. at 74 & 76

Moomba Mining Exploration Co. v. CA, G.R. No. 108846,


October 26, 99, 317 SCRA 38, 397.
12

Smith Kline Beckman Corporation v. CA, G.R. No. 126627,


August 14, 2003, 409 SCRA 33, 39.
13

14

Section 38, R.A. 166, as amended

Mighty Corporation v. E & J Gallo Winery, G.R. No.


154342, July 14, 2004, 434 SCRA 473, 506.
15

McDonalds Corporation v. L.C. Big Mak Burger, Inc.,


supra

McDonalds Corporation v L.C. Big Mak Burger Inc., supra


note 14; SEC. 20. Certificate of registration prima facie
evidence of validity. - A certificate of registration of a mark
or trade name shall be prima facie evidence of the validity
of the registration, the registrants ownership of the mark
or trade name, and of the registrants exclusive right to use
the same in connection with the goods, business or
services specified in the certificate, subject to any
conditions and limitations stated therein.
26

16

17

Id.

Emerald Garment Manufacturing Corporation v. Court of


Appeals, G.R. No. 100098, December 29, 1995, 251 SCRA
600, 615-616.
18

Societe Des Produits Nestle, S.A. v. CA, GR No. 112012,


April 4, 2001, 356 SCRA 207, 217.

Sec. 37. Rights of Foreign Registrants-Persons who are


nationals of, domiciled in, or have a bona fide or effective
business or commercial establishment in any foreign
country, which is a party to an international convention or
treaty relating to marks or tradenames on the repression of
unfair competition to which the Philippines may be a party,
shall be entitled to the benefits and subject to the
provisions of this Act . . . x x x
27

19

20

Id.

21

Id. at p. 218.

Applied in McDonalds Corp. v. L.C. Big Mak Burger, Inc.,


supra; Societe Des Produits Nestle, S.A. v. CA, supra; Asia
Brewery, Inc. v. CA, G.R. No. 103543, July 5, 1993, 224
SCRA 437; Converse Rubber Corp. v. Universal Rubber
Products, Inc., G.R. No. L-27906, January 8, 1987, 147 SCRA
154; Phil. Nut Industry Inc. v. Standard Brands, Inc., G.R.
No. L-23035, July 31, 1975, 65 SCRA 575.
22

23

Supra note 14, at 32.

24

Supra note 23.

"MacJoy" mark, Rollo p. 297 and "MCDONALDS" marks,


Rollo, pp. 86, 89 & 91.
25

"Tradenames of persons described in the first paragraph of


this section shall be protected without the obligation of
filing or registration whether or not they form parts of
marks."
The Paris Convention is essentially a compact among the
various member countries to accord in their own countries
to citizens of the other contracting parties trademarks and
other rights comparable to those accorded their own
citizens by their domestic laws. The underlying principle is
that foreign nationals should be given the same treatment
in each of the member countries as that country makes
available to its own citizens. In addition, the Convention
sought to create uniformity in certain respects by
obligating each nation to assure to nationals of countries of
the Union an effective protection against unfair
competition. Article 2 of the Paris Convention provides
that: ART. 2. Nationals of each of the countries of the Union
shall, as regards the protection of industrial property, enjoy
in all the other countries of the Union the advantages that
their respective laws now grant, or may hereafter grant, to
nationals, without prejudice to the rights specially provided
by the present Convention. Consequently, they shall have
the same protection as the latter, and the same legal
28

remedy against any infringement of their rights, provided


they observe the conditions and formalities imposed upon
nationals.
29

Rollo, p. 86

30

Id. at 89 & 91

Registration No. 31966, dated June 24, 1983 for the mark
"McChicken", Id. at 93; Registration No. 34065, dated
March 06, 1985, for the mark "McDonalds with "corporate
logo"arches design, Id. at 94; Registration No. 34065,
dated July 18, 1985 for the mark "Big Mac", Id. at 97;
Registration No. 39988, dated July 14, 1988 for the mark
"MacFries", Id. at 99; Registration No. 45583, dated July 14,
1988, for the mark "McSpaghetti", Id. at 101; Registration
No. 50987, dated July 24, 1991, for the servicemark
"McDo" , Id. at 100; Registration No. 32009, dated June 24,
1983 for the trademark "Big Mac" and Circle Design Rollo,
p. 106; Registration No. 48491, dated June 25, 1990 for the
service mark "McSnack" Id. at 105; Registration No. 51789,
dated December 02, 1991, for the trademark "Mc" (Id. at
107).
31

32

Section 2 of R.A. 166, as amended, provides: Sec. 2.


What are registrable. Trademarks, tradenames and
service marks owned by persons, corporations,
partnerships or associations domiciled in the Philippines
and by persons, corporations, partnerships or associations
domiciled in any foreign country may be registered in
accordance with the provisions of this Act; Provided, That
said trademarks, tradenames, or service marks are actually
in use in commerce and services not less than two months
in the Philippines before the time the applications for
registration are filed; And provided, further, That the
country of which the applicant for registration is a citizen
grants by law substantially similar privileges to citizens of
the Philippines, and such fact is officially certified, with a
certified true copy of the foreign law translated into the
English language, by the government of the foreign
country to the Government of the Republic of the
Philippines. (As amended by R.A. No. 865).
33

34

Rollo, pp. 55-56.

35

G.R. No. 71189, November 4, 1992.

36

G.R. No. L-13947, 108 Phil. 833, 836.

IPO Decision; Rollo, pp. 120-121.

G.R. No. 166115

February 2, 2007

McDONALDS CORPORATION, Petitioner,


vs.
MACJOY FASTFOOD CORPORATION, Respondent.
DECISION
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of
Court, herein petitioner McDonalds Corporation seeks the reversal
and setting aside of the following issuances of the Court of Appeals
(CA) in CA-G.R. SP No. 57247, to wit:
1. Decision dated 29 July 20041 reversing an earlier
decision of the Intellectual Property Office (IPO) which
rejected herein respondent MacJoy FastFood Corporations
application for registration of the trademark "MACJOY &
DEVICE"; and
2. Resolution dated 12 November 20042 denying the
petitioners motion for reconsideration.
As culled from the record, the facts are as follows:
On 14 March 1991, respondent MacJoy Fastfood Corporation, a
domestic corporation engaged in the sale of fast food products in
Cebu City, filed with the then Bureau of Patents, Trademarks and
Technology Transfer (BPTT), now the Intellectual Property Office
(IPO), an application, thereat identified as Application Serial No.
75274, for the registration of the trademark "MACJOY & DEVICE" for
fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok,
tacos, sandwiches, halo-halo and steaks under classes 29 and 30
of the International Classification of Goods.
Petitioner McDonalds Corporation, a corporation duly organized
and existing under the laws of the State of Delaware, USA, filed a
verified Notice of Opposition3 against the respondents application
claiming that the trademark "MACJOY & DEVICE" so resembles its
corporate logo, otherwise known as the Golden Arches or "M"
design, and its marks "McDonalds," McChicken," "MacFries,"
"BigMac," "McDo," "McSpaghetti," "McSnack," and "Mc,"

(hereinafter collectively known as the MCDONALDS marks) 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. Likewise, the
petitioner alleged that the respondents use and adoption in bad
faith of the "MACJOY & DEVICE" mark would falsely tend to suggest
a connection or affiliation with petitioners restaurant services and
food products, thus, constituting a fraud upon the general public
and further cause the dilution of the distinctiveness of petitioners
registered and internationally recognized MCDONALDS marks to
its prejudice and irreparable damage. The application and the
opposition thereto was docketed as Inter Partes Case No. 3861.
Respondent denied the aforementioned allegations of the
petitioner and averred that it has used the mark "MACJOY" for the
past many years in good faith and has spent considerable sums of
money for said marks extensive promotion in tri-media, especially
in Cebu City where it has been doing business long before the
petitioner opened its outlet thereat sometime in 1992; and that its
use of said mark would not confuse affiliation with the petitioners
restaurant services and food products because of the differences in
the design and detail of the two (2) marks.
In a decision4 dated December 28, 1998, the IPO, ratiocinating that
the predominance of the letter "M," and the prefixes "Mac/Mc" in
both the "MACJOY" and the "MCDONALDS" marks lead to the
conclusion that there is confusing similarity between them
especially since both are used on almost the same products falling
under classes 29 and 30 of the International Classification of
Goods, i.e., food and ingredients of food, sustained the petitioners
opposition and rejected the respondents application, viz:
WHEREFORE, the Opposition to the registration of the mark
MACJOY & DEVICE for use in fried chicken and chicken barbecue,
burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo,
and steaks is, as it is hereby, SUSTAINED. Accordingly, Application
Serial No. 75274 of the herein Respondent-Applicant is REJECTED.
Let the filewrapper of MACJOY subject matter of this case be sent
to the Administrative, Financial and Human Resources
Development Bureau for appropriate action in accordance with this
Decision, with a copy to be furnished the Bureau of Trademarks for
information and to update its record.

SO ORDERED.
In time, the respondent moved for a reconsideration but the IPO
denied the motion in its Order5 of January 14, 2000.
Therefrom, the respondent went to the CA via a Petition for Review
with prayer for Preliminary Injunction6 under Rule 43 of the Rules of
Court, whereat its appellate recourse was docketed as CA-G.R. SP
No. 57247.
Finding no confusing similarity between the marks "MACJOY" and
"MCDONALDS," the CA, in its herein assailed Decision7 dated July
29, 2004, reversed and set aside the appealed IPO decision and
order, thus:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered by us REVERSING and SETTING ASIDE the Decision of the
IPO dated 28 December 1998 and its Order dated 14 January 2000
and ORDERING the IPO to give due course to petitioners
Application Serial No. 75274.
SO ORDERED.
Explains the CA in its decision:
xxx, it is clear that the IPO brushed aside and rendered useless the
glaring and drastic differences and variations in style of the two
trademarks and even decreed that these pronounced differences
are "miniscule" and considered them to have been "overshadowed
by the appearance of the predominant features" such as "M," "Mc,"
and "Mac" appearing in both MCDONALDS and MACJOY marks.
Instead of taking into account these differences, the IPO
unreasonably shrugged off these differences in the device, letters
and marks in the trademark sought to be registered. The IPO
brushed aside and ignored the following irrefutable facts and
circumstances showing differences between the marks of MACJOY
and MCDONALDS. They are, as averred by the petitioner [now
respondent]:
1. The word "MacJoy" is written in round script while the
word "McDonalds" is written in single stroke gothic;

2. The word "MacJoy" comes with the picture of a chicken


head with cap and bowtie and wings sprouting on both
sides, while the word "McDonalds" comes with an arches
"M" in gold colors, and absolutely without any picture of a
chicken;
3. The word "MacJoy" is set in deep pink and white color
scheme while "McDonalds" is written in red, yellow and
black color combination;
4. The faade of the respective stores of the parties are
entirely different. Exhibits 1 and 1-A, show that
[respondents] restaurant is set also in the same bold,
brilliant and noticeable color scheme as that of its
wrappers, containers, cups, etc., while [petitioners]
restaurant is in yellow and red colors, and with the mascot
of "Ronald McDonald" being prominently displayed
therein." (Words in brackets supplied.)
Petitioner promptly filed a motion for reconsideration. However, in
its similarly challenged Resolution8 of November 12, 2004, the CA
denied the motion, as it further held:
Whether a mark or label of a competitor resembles another is to be
determined by an inspection of the points of difference and
resemblance as a whole, and not merely the points of
resemblance. The articles and trademarks employed and used by
the [respondent] Macjoy Fastfood Corporation are so different and
distinct as to preclude any probability or likelihood of confusion or
deception on the part of the public to the injury of the trade or
business of the [petitioner] McDonalds Corporation. The "Macjoy &
Device" mark is dissimilar in color, design, spelling, size, concept
and appearance to the McDonalds marks. (Words in brackets
supplied.)
Hence, the petitioners present recourse on the following grounds:
I.
THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS
"MACJOY & DEVICE" MARK IS NOT CONFUSINGLY SIMILAR TO
PETITIONERS "McDONALDS MARKS." IT FAILED TO CORRECTLY

APPLY THE DOMINANCY TEST WHICH HAS BEEN CONSISTENTLY


APPLIED BY THIS HONORABLE COURT IN DETERMINING THE
EXISTENCE OF CONFUSING SIMILARITY BETWEEN COMPETING
MARKS.
A. The McDonalds Marks belong to a well-known
and established "family of marks" distinguished by
the use of the prefix "Mc" and/or "Mac" and the
corporate "M" logo design.
B. The prefix "Mc" and/or "Mac" is the dominant
portion of both Petitioners McDonalds Marks and
the Respondents "Macjoy & Device" mark. As
such, the marks are confusingly similar under the
Dominancy Test.
C. Petitioners McDonalds Marks are well-known
and world-famous marks which must be protected
under the Paris Convention.

petition. As can be gleaned from the petitioners Board of


Directors Resolution dated December 5, 2002, as embodied in the
Certificate of the Assistant Secretary dated December 21, 2004, 11
Sheila Lehr was one of those authorized and empowered "to
execute and deliver for and on behalf of [the petitioner] all
documents as may be required in connection with x x x the
protection and maintenance of any foreign patents, trademarks,
trade-names, and copyrights owned now or hereafter by [the
petitioner], including, but not limited to, x x x documents required
to institute opposition or cancellation proceedings against
conflicting trademarks, and to do such other acts and things and to
execute such other documents as may be necessary and
appropriate to effect and carry out the intent of this resolution."
Indeed, the afore-stated authority given to Lehr necessarily
includes the authority to execute and sign the mandatorily required
certification of non-forum shopping to support the instant petition
for review which stemmed from the "opposition proceedings"
lodged by the petitioner before the IPO. Considering that the
person who executed and signed the certification against forum
shopping has the authority to do so, the petition, therefore, is not
procedurally defective.

II.
THE COURT OF APPEALS ERRED IN RULING THAT THE DECISION OF
THE IPO DATED 28 DECEMBER 1998 AND ITS ORDER DATED 14
JANUARY 2000 WERE NOT BASED ON SUBSTANTIAL EVIDENCE.
In its Comment,9 the respondent asserts that the petition should be
dismissed outright for being procedurally defective: first, because
the person who signed the certification against forum shopping in
behalf of the petitioner was not specifically authorized to do so,
and second, because the petition does not present a reviewable
issue as what it challenges are the factual findings of the CA. In
any event, the respondent insists that the CA committed no
reversible error in finding no confusing similarity between the
trademarks in question.
The petition is impressed with merit.
Contrary to respondents claim, the petitioners Managing Counsel,
Sheila Lehr, was specifically authorized to sign on behalf of the
petitioner the Verification and Certification10 attached to the

As regards the respondents argument that the petition raises only


questions of fact which are not proper in a petition for review,
suffice it to say that the contradictory findings of the IPO and the
CA constrain us to give due course to the petition, this being one of
the recognized exceptions to Section 1, Rule 45 of the Rules of
Court. True, this Court is not the proper venue to consider factual
issues as it is not a trier of facts.12 Nevertheless, when the factual
findings of the appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or
contrary to the findings culled by the court of origin, 13 as here, this
Court will review them.
The old Trademark Law, Republic Act (R.A.) No. 166, as amended,
defines a "trademark" as any distinctive word, name, symbol,
emblem, sign, or device, or any combination thereof adopted and
used by a manufacturer or merchant on his goods to identify and
distinguish them from those manufactured, sold, or dealt in by
others.14

Under the same law, the registration of a trademark is subject to


the provisions of Section 4 thereof, paragraph (d) of which is
pertinent to this case. The provision reads:
Section 4. Registration of trademarks, trade-names and servicemarks on the principal register. There is hereby established a
register of trademarks, tradenames and service-marks which shall
be known as the principal register. The owner of the trade-mark,
trade-name or service-mark used to distinguish his goods, business
or services of others shall have the right to register the same on
the principal register, unless it:
xxx xxx xxx
(d) Consists of or comprises a mark or trade-name which so
resembles a mark or trade-name registered in the Philippines or a
mark or trade-name previously used in the Philippines by another
and not abandoned, as to be likely, when applied to or used in
connection with the goods, business or services of the applicant, to
cause confusion or mistake or to deceive purchasers;
xxx xxx xxx

"Mc" and/or "Mac" in both the marks. In reversing the conclusion


reached by the IPO, the CA, while seemingly applying the
dominancy test, in fact actually applied the holistic test. The
appellate court ruled in this wise:
Applying the Dominancy test to the present case, the IPO should
have taken into consideration the entirety of the two marks instead
of simply fixing its gaze on the single letter "M" or on the
combinations "Mc" or "Mac". A mere cursory look of the subject
marks will reveal that, save for the letters "M" and "c", no other
similarity exists in the subject marks.
We agree with the [respondent] that it is entirely unwarranted for
the IPO to consider the prefix "Mac" as the predominant feature
and the rest of the designs in [respondents] mark as details.
Taking into account such paramount factors as color, designs,
spelling, sound, concept, sizes and audio and visual effects, the
prefix "Mc" will appear to be the only similarity in the two
completely different marks; and it is the prefix "Mc" that would
thus appear as the miniscule detail. When pitted against each
other, the two marks reflect a distinct and disparate visual
impression that negates any possible confusing similarity in the
mind of the buying public. (Words in brackets supplied.)

Essentially, the issue here is whether there is a confusing similarity


between the MCDONALDS marks of the petitioner and the
respondents "MACJOY & DEVICE" trademark when applied to
Classes 29 and 30 of the International Classification of Goods, i.e.,
food and ingredients of food.

Petitioner now vigorously points out that the dominancy test should
be the one applied in this case.

In determining similarity and likelihood of confusion, jurisprudence


has developed two tests, the dominancy test and the holistic test. 15
The dominancy test focuses on the similarity of the prevalent
features of the competing trademarks that might cause confusion
or deception.16 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.17 Under the latter test, a comparison of the words is not
the only determinant factor.18 1awphi1.net

In trademark cases, particularly in ascertaining whether one


trademark is confusingly similar to another, no set rules can be
deduced because each case must be decided on its merits. 19 In
such cases, even more than in any other litigation, precedent must
be studied in the light of the facts of the particular case. 20 That is
the reason why in trademark cases, jurisprudential precedents
should be applied only to a case if they are specifically in point. 21

Here, the IPO used the dominancy test in concluding that there was
confusing similarity between the two (2) trademarks in question as
it took note of the appearance of the predominant features "M",

We agree.

While we agree with the CAs detailed enumeration of differences


between the two (2) competing trademarks herein involved, we
believe that the holistic test is not the one applicable in this case,
the dominancy test being the one more suitable. In recent cases
with a similar factual milieu as here, the Court has consistently

used and applied the dominancy test in determining confusing


similarity or likelihood of confusion between competing
trademarks.22
Notably, in McDonalds Corp. v. LC Big Mak Burger, Inc., 23 a case
where the trademark "Big Mak" was found to be confusingly similar
with the "Big Mac" mark of the herein the petitioner, the Court
explicitly held:
This Court, xxx, has relied on the dominancy test rather than the
holistic test. The dominancy test considers the dominant features
in the competing marks in determining whether they are
confusingly similar. Under the dominancy test, courts give greater
weight to the similarity of the appearance of the product arising
from the adoption of the dominant features of the registered mark,
disregarding minor differences. Courts will consider more the aural
and visual impressions created by the marks in the public mind,
giving little weight to factors like prices, quality, sales outlets and
market segments.
Moreover, in Societe Des Produits Nestle, S.A. v. CA24 the Court,
applying the dominancy test, concluded that the use by the
respondent therein of the word "MASTER" for its coffee product
"FLAVOR MASTER" was likely to cause confusion with therein
petitioners coffee products "MASTER ROAST" and "MASTER
BLEND" and further ruled:
xxx, the totality or holistic test is contrary to the elementary
postulate of the law on trademarks and unfair competition that
confusing similarity is to be determined on the basis of visual,
aural, connotative comparisons and overall impressions
engendered by the marks in controversy as they are encountered
in the marketplace. The totality or holistic test only relies on visual
comparisons between two trademarks whereas the dominancy test
relies not only on the visual but also on the aural and connotative
comparisons and overall impressions between the two trademarks.
Applying the dominancy test to the instant case, the Court finds
that herein petitioners "MCDONALDS" and respondents "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 archlike, capitalized and stylized manner. 25
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 MCDONALDS marks which all use the prefixes Mc
and/or Mac.
Besides and most importantly, both trademarks are used in the
sale of fastfood products. Indisputably, the respondents trademark
application for the "MACJOY & DEVICE" trademark covers goods
under Classes 29 and 30 of the International Classification of
Goods, namely, fried chicken, chicken barbeque, burgers, fries,
spaghetti, etc. Likewise, the petitioners trademark registration for
the MCDONALDS marks in the Philippines covers goods which are
similar if not identical to those covered by the respondents
application.
Thus, we concur with the IPOs findings that:
In the case at bar, the predominant features such as the "M," "Mc,"
and "Mac" appearing in both McDonalds marks and the MACJOY &
DEVICE" easily attract the attention of would-be customers. Even
non-regular customers of their fastfood restaurants would readily
notice the predominance of the "M" design, "Mc/Mac" prefixes
shown in both marks. Such that the common awareness or
perception of customers that the trademarks McDonalds mark and
MACJOY & DEVICE are one and the same, or an affiliate, or under
the sponsorship of the other is not far-fetched.
The differences and variations in styles as the device depicting a
head of chicken with cap and bowtie and wings sprouting on both
sides of the chicken head, the heart-shaped "M," and the stylistic
letters in "MACJOY & DEVICE;" in contrast to the arch-like "M" and
the one-styled gothic letters in McDonalds marks are of no
moment. These minuscule variations are overshadowed by the
appearance of the predominant features mentioned hereinabove.

Thus, with the predominance of the letter "M," and prefixes


"Mac/Mc" found in both marks, the inevitable conclusion is there is
confusing similarity between the trademarks Mc Donalds marks
and "MACJOY AND DEVICE" especially considering the fact that
both marks are being used on almost the same products falling
under Classes 29 and 30 of the International Classification of
Goods i.e. Food and ingredients of food.

while the first McDonalds outlet of the petitioner thereat was


opened only in 1992, is downright unmeritorious. For the
requirement of "actual use in commerce x x x in the Philippines"
before one may register a trademark, trade-name and service
mark under the Trademark Law33 pertains to the territorial
jurisdiction of the Philippines and is not only confined to a certain
region, province, city or barangay.

With the existence of confusing similarity between the subject


trademarks, the resulting issue to be resolved is who, as between
the parties, has the rightful claim of ownership over the said
marks.

Likewise wanting in merit is the respondents claim that the


petitioner cannot acquire ownership of the word "Mac" because it
is a personal name which may not be monopolized as a trademark
as against others of the same name or surname. As stated earlier,
once a trademark has been registered, the validity of the mark is
prima facie presumed. In this case, the respondent failed to
overcome such presumption. We agree with the observations of
the petitioner regarding the respondents explanation that the
word "MACJOY" is based on the name of its presidents niece,
Scarlett Yu Carcell. In the words of the petitioner:

We rule for the petitioner.


A mark is valid if it is distinctive and hence not barred from
registration under the Trademark Law. However, once registered,
not only the marks validity but also the registrants ownership
thereof is prima facie presumed.26
Pursuant to Section 3727 of R.A. No. 166, as amended, as well as
the provision regarding the protection of industrial property of
foreign nationals in this country as embodied in the Paris
Convention28 under which the Philippines and the petitioners
domicile, the United States, are adherent-members, the petitioner
was able to register its MCDONALDS marks successively, i.e.,
"McDonalds" in 04 October, 197129 ; the corporate logo which is
the "M" or the golden arches design and the "McDonalds" with the
"M" or golden arches design both in 30 June 1977 30 ; and so on and
so forth.31
On the other hand, it is not disputed that the respondents
application for registration of its trademark "MACJOY & DEVICE"
was filed only on March 14, 1991 albeit the date of first use in the
Philippines was December 7, 1987.32
Hence, from the evidence on record, it is clear that the petitioner
has duly established its ownership of the mark/s.
Respondents contention that it was the first user of the mark in
the Philippines having used "MACJOY & DEVICE" on its restaurant
business and food products since December, 1987 at Cebu City

First of all, Respondent failed to present evidence to support the


foregoing claim which, at best, is a mere self-serving assertion.
Secondly, it cannot be denied that there is absolutely no
connection between the name "Scarlett Yu Carcel" and "MacJoy" to
merit the coinage of the latter word. Even assuming that the word
"MacJoy" was chosen as a term of endearment, fondness and
affection for a certain Scarlett Yu Carcel, allegedly the niece of
Respondents president, as well as to supposedly bring good luck
to Respondents business, one cannot help but wonder why out of
all the possible letters or combinations of letters available to
Respondent, its president had to choose and adopt a mark with the
prefix "Mac" as the dominant feature thereof. A more plausible
explanation perhaps is that the niece of Respondents president
was fond of the food products and services of the Respondent, but
that is beside the point." 34
By reason of the respondents 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 respondent would want to ride high on the established
reputation and goodwill of the MCDONALDs marks, which, as
applied to petitioners restaurant business and food products, is
undoubtedly beyond question.

Thus, the IPO was correct in rejecting and denying the


respondents application for registration of the trademark "MACJOY
& DEVICE." As this Court ruled in Faberge Inc. v. IAC, 35 citing
Chuanchow Soy & Canning Co. v. Dir. of Patents and Villapanta:36

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby


certified that the conclusions in the above decision had been
reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.

When one applies for the registration of a trademark or label which


is almost the same or very closely resembles one already used and
registered by another, the application should be rejected and
dismissed outright, even without any opposition on the part of the
owner and user of a previously registered label or trademark, this
not only to avoid confusion on the part of the public, but also to
protect an already used and registered trademark and an
established goodwill.

REYNATO S. PUNO
Chief Justice

Footnotes
Penned by Associate Justice Isaias P. Dicdican and
concurred in by Associate Justices Elvi John S. Asuncion and
Ramon Bato, Jr.; Rollo, pp. 209-219.
1

WHEREFORE, the instant petition is GRANTED. Accordingly, the


assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP NO. 57247, are REVERSED and SET ASIDE and the Decision of
the Intellectual Property Office in Inter Partes Case No. 3861 is
REINSTATED.

Id. at 256-257.

Id. at 77-81.

Id. at 114-122.

Id. at 139-142.

CANCIO C. GARCIA
Associate Justice

Id. at 144-159.

WE CONCUR:

Supra note 1.

Supra note 2.

Rollo, pp. 291-306.

No pronouncement as to costs.
SO ORDERED.

REYNATO S. PUNO
Chief Justice
Chairperson
ANGELINA SANDOVALGUTIERREZ
Associate Justice

RENATO C. CORONA
Asscociate Justice

ADOLFO S. AZCUNA
Associate Justice
CERTIFICATION

10

Id. at 72.

11

Id. at 74 & 76

Moomba Mining Exploration Co. v. CA, G.R. No. 108846,


October 26, 99, 317 SCRA 38, 397.
12

Smith Kline Beckman Corporation v. CA, G.R. No. 126627,


August 14, 2003, 409 SCRA 33, 39.
13

14

Section 38, R.A. 166, as amended

Mighty Corporation v. E & J Gallo Winery, G.R. No.


154342, July 14, 2004, 434 SCRA 473, 506.
15

McDonalds Corporation v. L.C. Big Mak Burger, Inc.,


supra

McDonalds Corporation v L.C. Big Mak Burger Inc., supra


note 14; SEC. 20. Certificate of registration prima facie
evidence of validity. - A certificate of registration of a mark
or trade name shall be prima facie evidence of the validity
of the registration, the registrants ownership of the mark
or trade name, and of the registrants exclusive right to use
the same in connection with the goods, business or
services specified in the certificate, subject to any
conditions and limitations stated therein.
26

16

17

Id.

Emerald Garment Manufacturing Corporation v. Court of


Appeals, G.R. No. 100098, December 29, 1995, 251 SCRA
600, 615-616.
18

Societe Des Produits Nestle, S.A. v. CA, GR No. 112012,


April 4, 2001, 356 SCRA 207, 217.

Sec. 37. Rights of Foreign Registrants-Persons who are


nationals of, domiciled in, or have a bona fide or effective
business or commercial establishment in any foreign
country, which is a party to an international convention or
treaty relating to marks or tradenames on the repression of
unfair competition to which the Philippines may be a party,
shall be entitled to the benefits and subject to the
provisions of this Act . . . x x x
27

19

20

Id.

21

Id. at p. 218.

Applied in McDonalds Corp. v. L.C. Big Mak Burger, Inc.,


supra; Societe Des Produits Nestle, S.A. v. CA, supra; Asia
Brewery, Inc. v. CA, G.R. No. 103543, July 5, 1993, 224
SCRA 437; Converse Rubber Corp. v. Universal Rubber
Products, Inc., G.R. No. L-27906, January 8, 1987, 147 SCRA
154; Phil. Nut Industry Inc. v. Standard Brands, Inc., G.R.
No. L-23035, July 31, 1975, 65 SCRA 575.
22

23

Supra note 14, at 32.

24

Supra note 23.

"MacJoy" mark, Rollo p. 297 and "MCDONALDS" marks,


Rollo, pp. 86, 89 & 91.
25

"Tradenames of persons described in the first paragraph of


this section shall be protected without the obligation of
filing or registration whether or not they form parts of
marks."
The Paris Convention is essentially a compact among the
various member countries to accord in their own countries
to citizens of the other contracting parties trademarks and
other rights comparable to those accorded their own
citizens by their domestic laws. The underlying principle is
that foreign nationals should be given the same treatment
in each of the member countries as that country makes
available to its own citizens. In addition, the Convention
sought to create uniformity in certain respects by
obligating each nation to assure to nationals of countries of
the Union an effective protection against unfair
competition. Article 2 of the Paris Convention provides
that: ART. 2. Nationals of each of the countries of the Union
shall, as regards the protection of industrial property, enjoy
in all the other countries of the Union the advantages that
their respective laws now grant, or may hereafter grant, to
nationals, without prejudice to the rights specially provided
by the present Convention. Consequently, they shall have
the same protection as the latter, and the same legal
28

remedy against any infringement of their rights, provided


they observe the conditions and formalities imposed upon
nationals.
29

Rollo, p. 86

30

Id. at 89 & 91

Registration No. 31966, dated June 24, 1983 for the mark
"McChicken", Id. at 93; Registration No. 34065, dated
March 06, 1985, for the mark "McDonalds with "corporate
logo"arches design, Id. at 94; Registration No. 34065,
dated July 18, 1985 for the mark "Big Mac", Id. at 97;
Registration No. 39988, dated July 14, 1988 for the mark
"MacFries", Id. at 99; Registration No. 45583, dated July 14,
1988, for the mark "McSpaghetti", Id. at 101; Registration
No. 50987, dated July 24, 1991, for the servicemark
"McDo" , Id. at 100; Registration No. 32009, dated June 24,
1983 for the trademark "Big Mac" and Circle Design Rollo,
p. 106; Registration No. 48491, dated June 25, 1990 for the
service mark "McSnack" Id. at 105; Registration No. 51789,
dated December 02, 1991, for the trademark "Mc" (Id. at
107).
31

32

Section 2 of R.A. 166, as amended, provides: Sec. 2.


What are registrable. Trademarks, tradenames and
service marks owned by persons, corporations,
partnerships or associations domiciled in the Philippines
and by persons, corporations, partnerships or associations
domiciled in any foreign country may be registered in
accordance with the provisions of this Act; Provided, That
said trademarks, tradenames, or service marks are actually
in use in commerce and services not less than two months
in the Philippines before the time the applications for
registration are filed; And provided, further, That the
country of which the applicant for registration is a citizen
grants by law substantially similar privileges to citizens of
the Philippines, and such fact is officially certified, with a
certified true copy of the foreign law translated into the
English language, by the government of the foreign
country to the Government of the Republic of the
Philippines. (As amended by R.A. No. 865).
33

34

Rollo, pp. 55-56.

35

G.R. No. 71189, November 4, 1992.

36

G.R. No. L-13947, 108 Phil. 833, 836.

IPO Decision; Rollo, pp. 120-121.

G.R. No. L-23035 July 31, 1975

PHILIPPINE NUT INDUSTRY, INC., petitioner,


vs.
STANDARD BRANDS INCORPORATED and TIBURCIO S.
EVALLE as Director of Patents, respondents.
Perfecta E. De Vera for petitioner.
Paredes, Poblador, Cruz and Nazareno for private respondent.
Office of the Solicitor General Arturo A. Alafriz, Acting Assistant
Solicitor General Isidro C. Borromeo and Solicitor Francisco J.
Bautista for respondent Director.

MUNOZ PALMA, J.:


Challenged in this petition for review is the decision of respondent
Director of Patents which orders the cancellation of Certificate of
Registration No. SR-416 issued in favor of herein petitioner
Philippine Nut Industry, Inc. (hereinafter called Philippine Nut) for
the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," upon
complaint of Standard Brands Inc. (hereinafter to be called
Standard Brands).
The records of the case show the following incidents:
Philippine Nut, a domestic corporation, obtained from the Patent
Office on August 10, 1961, Certificate of Registration No. SR-416
covering the trademark "PHILIPPINE PLANTERS CORDIAL
PEANUTS," the label used on its product of salted peanuts.
On May 14, 1962, Standard Brands a foreign corporation, 1 filed
with the Director of Patents Inter Partes Case No. 268 asking for
the cancellation of Philippine Nut's certificate of registration on the
ground that "the registrant was not entitled to register the mark at
the time of its application for registration thereof" for the reason

that it (Standard Brands) is the owner of the trademark "PLANTERS


COCKTAIL PEANUTS" covered by Certificate of Registration No. SR172, issued by the Patent Office on July 28, 1958. Standard Brands
alleged in its petition that Philippine Nut's trademark "PHILIPPINE
PLANTERS CORDIAL PEANUTS" closely resembles and is
confusingly similar to its trademark "PLANTERS COCKTAIL
PEANUTS" used also on salted peanuts, and that the registration of
the former is likely to deceive the buying public and cause damage
to it.
On June 1, 1962, Philippine Nut filed its answer invoking the special
defense that its registered label is not confusingly similar to that of
Standard Brands as the latter alleges.
At the hearing of October 4, 1962, the parties submitted a partial
stipulation of facts. On December 12, 1962, an amended partial
stipulation of facts was submitted, the pertinent agreements
contained in which are: (1) that Standard Brands is the present
owner of the trademark "PLANTERS COCKTAIL PEANUTS" covered
by Certificate of Registration No. SR-172 issued on July 28, 1958;
(2) that Standard Brands trademark was first used in commerce in
the Philippines in December, 1938 and (3) that Philippine Nut's
trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS" was first
used in the Philippines on December 20, 1958 and registered with
the Patent Office on August 10, 1961.
On December 10, 1963, after the presentation of oral and
documentary evidence and the filing by the parties of their
memoranda, respondent Director of Patents rendered Decision No.
281 giving due course to Standard Brand's petition and ordering
the cancellation of Philippine Nut's Certificate of Registration No.
SR-416. The Director of Patents found and held that in the labels
using the two trademarks in question, the dominant part is the
word "Planters", displayed "in a very similar manner" so much so
that "as to appearance and general impression" there is "a very
confusing similarity," and he concluded that Philippine Nut "was
not entitled to register the mark at the time of its filing the
application for registration" as Standard Brands will be damaged

by the registration of the same. Its motion for reconsideration


having been denied, Philippine Nut came up to this Court for a
review of said decision.
In seeking a reversal of the decision of respondent Director of
Patents, petitioner brings forth eleven assigned errors all of which
revolve around one main issue: is the trademark "PHILIPPINE
PLANTERS CORDIAL PEANUTS" used by Philippine Nut on its label
for salted peanuts confusingly similar to the trademark "PLANTERS
COCKTAIL PEANUTS" used by Standard Brands on its product so as
to constitute an infringement of the latter's trademark rights and
justify its cancellation? 2
The applicable law to the case is found in Republic Act 166
otherwise known as the Trade-Mark Law from which We quote the
following pertinent provisions:

(d) Consists of or comprises a mark or trade-name


which so resembles a mark or trade-name
registered in the Philippines or a mark or tradename previously used in the Philippines by another
and not abandoned, as to be likely, when applied
to or used in connection with the goods, business
or services of the applicant, to cause confusion or
mistake or to deceive purchasers; ... (emphasis
Ours)
Sec. 17. Grounds for cancellation Any person,
who believes that he is or will be damaged by the
registration of a mark or trade-name, may, upon
the payment of the prescribed fee, apply to cancel
said registration upon any of the following grounds:
(c) That the registration was obtained fraudulently
or contrary to the provisions of section four,
Chapter II hereof; ....

Chapter II-A.
Sec. 4. Registration of trade-marks, trade-names
and service-marks on the principal register.
There is hereby established a register of trademarks, trade-names and service-marks which shall
be known as the principal register. The owner of a
trade-mark, trade-name or service-mark used to
distinguish his goods, business or services from the
goods, business or services of others shall have the
right to register the same on the principal register,
unless it:

Sec. 22. Infringement, what constitutes. Any


person who shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or
colorable imitation of any registered mark or 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 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. (emphasis supplied).
In the cases involving infringement of trademark brought before
the 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; that
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, then infringement takes pIace; that duplication or imitation
is not necessary, a similarity in the dominant features of the
trademarks would be sufficient. 3
1. The first argument advanced by petitioner which We believe
goes to the core of the matter in litigation is that the Director of
Patents erred in holding that the dominant portion of the label of
Standard Brands in its cans of salted peanuts consists of the word
PLANTERS which has been used in the label of Philippine Nut for its
own product. According to petitioner, PLANTERS cannot be
considered as the dominant feature of the trademarks in question
because it is a mere descriptive term, an ordinary word which is
defined in Webster International Dictionary as "one who or that
which plants or sows, a farmer or an agriculturist." (pp. 10-11,
petitioner's brief)
We find the argument without merit. While it is true that PLANTERS
is an ordinary word, nevertheless it is used in the labels not to
describe the nature of the product, but to project the source or
origin of the salted peanuts contained in the cans. The word
PLANTERS printed across the upper portion of the label in bold
letters easily attracts and catches the eye of the ordinary
consumer and it is that word and none other that sticks in his mind
when he thinks of salted peanuts.

In cases of this nature there can be no better evidence as to what


is the dominant feature of a label and as to whether there is a
confusing similarity in the contesting trademarks than the labels
themselves. A visual and graphic presentation of the labels will
constitute the best argument for one or the other, hence, we are
reproducing hereunder a picture of the cans of salted peanuts of
the parties to the case.
The picture below is part of the documentary evidence appearing
in the original records, and it clearly demonstrates the correctness
of the finding of respondent Director that the word PLANTERS is the
dominant, striking mark of the labels in question.
It is true that there are other words used such as "Cordial" in
petitioner's can and "Cocktail" in Standard Brands', which are also
prominently displayed, but these words are mere adjectives
describing the type of peanuts in the labeled containers and are
not sufficient to warn the unwary customer that the two products
come form distinct sources. As a whole it is the word PLANTERS
which draws the attention of the buyer and leads him to conclude
that the salted peanuts contained in the two cans originate from
one and the same manufacturer. In fact, when a housewife sends
her housemaid to the market to buy canned salted peanuts, she
will describe the brand she wants by using the word PLANTERS and
not "Cordial" nor "Cocktail".
2. The next argument of petitioner is that respondent Director
should not have based his decision simply on the use of the term
PLANTERS, and that what he should have resolved is whether there
is a confusing similarity in the trademarks of the parties.
It is quite obvious from the record, that respondent Director's
decision is based not only on the fact that petitioner herein
adopted the same dominant mark of Standard Brands, that is, the
word PLANTERS, but that it also used in its label the same coloring
scheme of gold, blue, and white, and basically the same lay-out of
words such as "salted peanuts" and "vacuum packed" with similar
type and size of lettering as appearing in Standard Brands' own

trademark, all of which result in a confusing similarity between the


two labels. 4 Thus, the decision states: "Furthermore, as to
appearance and general impression of the two trademarks, I find a
very confusing similarity." (Emphasis supplied) 5
Referring again to the picture We have reproduced, the striking
similarity between the two labels is quite evident not only in the
common use of PLANTERS but also in the other words employed.
As a matter of fact, the capital letter "C" of petitioner's "Cordial" is
alike to the capital "C" of Standard's "Cocktail", with both words
ending with an "1".
Admittedly, no producer or manufacturer may have a monopoly of
any color scheme or form of words in a label. But when a
competitor adopts a distinctive or dominant mark or feature of
another's trademark and with it makes use of the same color
ensemble, employs similar words written in a style, type and size
of lettering almost identical with those found in the other
trademark, the intent to pass to the public his product as that of
the other is quite obvious. Hence, there is good reason for
Standard Brands' to ask why did petitioner herein use the word
PLANTERS, the same coloring scheme, even almost identical size
and contour of the cans, the same lay-out of words on its label
when there is a myriad of other words, colors, phrases, symbols,
and arrangements to choose from to distinguish its product from
Standard Brands, if petitioner was not motivated to simulate the
label of the latter for its own can of salted peanuts, and thereby
deceive the public?
A similar question was asked by this Court in Clarke vs. Manila
Candy Co., 36 Phil. 100, when it resolved in favor of plaintiff a case
of unfair competition based on an imitation of Clarke's packages
and wrappers of its candies the main feature of which was one
rooster. The Court queried thus: "... why, with all the birds in the
air, and all the fishes in the sea, and all the animals on the face of
the earth to choose from, the defendant company (Manila Candy
Co.) selected two roosters as its trademark, although its directors
and managers must have been well aware of the long-continued

use of a rooster by the plaintiff with the sale and advertisement of


its goods? ... A cat, a dog, a carabao, a shark or an eagle stamped
upon the container in which candies are sold would serve as well
as a rooster for purposes of identification as the product of
defendant's factory. Why did defendant select two roosters as its
trademark ?" (p.109, supra)
Petitioner contends, however, that there are differences between
the two trademarks, such as, the presence of the word "Philippine"
above PLANTERS on its label, and other phrases, to wit: "For
Quality and Price, Its Your Outstanding Buy", the address of the
manufacturer in Quezon City, etc., plus a pictorial representation of
peanuts overflowing from a tin can, while in the label of Standard
Brands it is stated that the product is manufactured in San
Francisco, California, and on top of the tin can is printed "Mr.
Peanut" and the representation of a "humanized peanut". (pp. 3033, petitioner's brief)
We have taken note of those alleged differences but We find them
insignificant in the sense that they are not sufficient to call the
attention of the ordinary buyer that the labeled cans come from
distinct and separate sources. The word "Philippine" printed in
small type in petitioner's label may simply give to the purchaser
the impression that that particular can of PLANTERS salted peanuts
is locally produced or canned but that what he is buying is still
PLANTERS canned salted peanuts and nothing else. As regards "Mr.
Peanut" on Standard Brands' label, the same appears on the top
cover and is not visible when the cans are displayed on the
shelves, aside from the fact that the figure of "Mr. Peanut" is
printed on the tin cover which is thrown away after opening the
can, leaving no lasting impression on the consumer. It is also for
this reason that We do not agree with petitioner that it is "Mr.
Peanut and the Humanized Peanut" which is the trademark of
Standard Brands salted peanuts, it being a mere descriptive
pictorial representation of a peanut not prominently displayed on
the very body of the label covering the can, unlike the term
PLANTERS which dominates the label.

It is correctly observed by respondent Director that the


merchandize or goods being sold by the parties herein are very
ordinary commodities purchased by the average person and many
times by the ignorant and unlettered 6 and these are the persons
who will not as a rule examine the printed small letterings on the
container but will simply be guided by the presence of the striking
mark PLANTERS on the label. Differences there will always be, but
whatever differences exist, these pale into insignificance in the
face of an evident similarity in the dominant feature and overall
appearance of the labels of the parties.
It is not necessary, to constitute trademark
"infringement", that every word of a trade-mark
should be appropriated, but it is sufficient that
enough be taken to deceive the public in the
purchase of a protected article. (Bunte Bros. v.
Standard Chocolates, D.C. Mass., 45 F. Supp. 478,
481)
A trade-name in order to be an `infringement' upon
another need not be exactly like it in form and
sound, but it is enough if the one so resembles
another as to deceive or mislead persons of
ordinary caution into the belief that they are
dealing with the one concern when in fact they are
dealing with the other. (Foss v. Culbertson, 136 P.
2d 711, 718, 17 Wash. 2d 610)
Where a trade-mark contains a dominating or
distinguishing word, and purchasing public has
come to know and designate the article by such
dominating word, the use of such word by another
in marking similar goods may constitute
Infringement though the marks aside from such
dominating word may be dissimilar. (Queen Mfg.
Co. v. lsaac Ginsberg & Bros., C.C.A. Mon., 25 F. 2d
284, 287)

(d) "Infringement" of trade-mark does not depend


on the use of identical words, nor on the question
whether they are so similar that a person looking
at one would be deceived into the belief that it was
the other; it being sufficient if one mark is so like
another in form, spelling, or sound that one with
not a very definite or clear recollection as to the
real mark is likely to be confused or misled.
(Northam Warren Corporation v. Universal Cosmetic
Co., C. C. A; III., 18 F. 2d 774, 775)
3. What is next submitted by petitioner is that it was error for
respondent Director to have enjoined it from using PLANTERS in
the absence of evidence showing that the term has acquired
secondary meaning. Petitioner, invoking American jurisprudence,
asserts that the first user of a tradename composed of common
words is given no special preference unless it is shown that such
words have acquired secondary meaning, and this, respondent
Standard Brands failed to do when no evidence was presented to
establish that fact. (pp. 14-16, petitioner's brief)
The doctrine of secondary meaning is found in Sec. 4 (f), Chapter
II-A of the Trade-Mark Law, viz:
Except as expressly excluded in paragraphs (a),
(b), (c) and (d) of this section, nothing herein shall
prevent the registration of a mark or trade-name
used by the applicant which has become distinctive
of the applicant's goods, business or services. The
Director may accept as prima facie evidence that
the mark or trade-name has become distinctive, as
applied to or used in connection with the
applicant's goods, business or services, proof of
substantially exclusive and continuous use thereof
as a mark or trade-name by the applicant in
connection with the sale of goods, business or
services for the five years next preceding the date

of the filing of the application for its registration.


(As amended by Sec. 3, Rep. Act No. 638.)
This Court held that the doctrine is to the effect that a word or
phrase originally incapable of exclusive appropriation with
reference to an article on the market, because geographically or
otherwise descriptive, might nevertheless have been used so long
and so exclusively by one producer with reference to his article
that, in that trade and to that branch of the purchasing public, the
word or phrase has come to mean that the article was his product.
7

By way of illustration, is the word "Selecta" which according to this


Court is a common ordinary term in the sense that it may be used
or employed by any one in promoting his business or enterprise,
but which once adopted or coined in connection with one's
business as an emblem, sign or device to characterize its products,
or as a badge of authenticity, may acquire a secondary meaning as
to be exclusively associated with its products and business, so that
its use by another may lead to confusion in trade and cause
damage to its business. 8
The applicability of the doctrine of secondary meaning to the
situation now before Us is appropriate because there is oral and
documentary evidence showing that the word PLANTERS has been
used by and closely associated with Standard Brands for its canned
salted peanuts since 1938 in this country. Not only is that fact
admitted by petitioner in the amended stipulation of facts (see p. 2
of this Decision), but the matter has been established by
testimonial (tsn October 4, 1962, pp. 2-8) and documentary
evidence consisting of invoices covering the sale of "PLANTERS
cocktail peanuts". (Exhibits C to C-4; D to D-10; E to E-10; F to F-2)
In other words, there is evidence to show that the term PLANTERS
has become a distinctive mark or symbol insofar as salted peanuts
are concerned, and by priority of use dating as far back as 1938,
respondent Standard Brands has acquired a preferential right to its
adoption as its trademark warranting protection against its
usurpation by another. Ubi jus ibi remedium. Where there is a right

there is a remedy. Standard Brands has shown the existence of a


property right(Arce Sons & Co. vs. Selecta Biscuit Co., Inc., supra,
pp. 262-263) and respondent Director, has afforded the remedy.
Still on this point, petitioner contends that Standard Brands' use of
the trademark PLANTERS was interrupted during the Japanese
occupation and in fact was discontinued when the importation of
peanuts was prohibited by Central Bank regulations effective July
1, 1953, hence it cannot be presumed that it has acquired a
secondary meaning. We hold otherwise. Respondent Director
correctly applied the rule that non-use of a trademark on an article
of merchandize due to legal restrictions or circumstances beyond
one's control is not to be considered as an abandonment.
In the case of Andres Romero vs. Maiden Form Brassiere Co., Inc.,
L-18289, March 31, 1964, 10 SCRA 556, the same question was
raised by petitioner Romero when he filed with the Bureau of
Patents a petition to cancel the registration of the trademark
"Adagio" for brassieres manufactured by Maiden Form Brassiere
Co., Inc. His petition having been dismissed by the Director of
Patents, Romero appealed to this Court and one of the issues
posed by him was that when the Government imposed restrictions
on importations of brassieres bearing that particular trademark,
there was abandonment of the same by respondent company
which entitled petitioner to adopt it for his own use and which in
fact he had been using for a number of years. That argument was
met by the Court in the words of Justice Jesus Barrera thus:
... The evidence on record shows, on the other
hand, that the trademark "Adagio" was first used
exlusively in the Philippines by appellee in the year
1932. There being no evidence of use of the mark
by others before 1932, or that appellee abandoned
use thereof, the registration of the mark was made
in accordance with the Trademark Law. Granting
that appellant used the mark when appellee
stopped using it during the period of time that the
Government imposed restrictions on importation of

respondent's brassiere being the trademark, such


temporary non-use did not affect the rights of
appellee because it was occasioned by
government restrictions and was not permanent,
intentional, and voluntary.
To work an abandonment, the
disuse must be permanent and not
ephemeral; it must, be intentional
and voluntary, and not involuntary
or even compulsory. There must be
a thoroughgoing discontinuance of
any trade-mark use of the mark in
question (Callman, Unfair
Competition and Trademark, 2nd
Ed., p. 1341).1wph1.t
The use of the trademark by other manufacturers
did not indicate an intention on the part of appellee
to abandon it.
The instances of the use by others of the term
Budweiser, cited by the defendant, fail, even when
liberally construed, to indicate an intention upon
the part of the complainant to abandon its rights to
that name. "To establish the defense of
abandonment, it is necessary to show not only acts
indicating a practical abandonment, but an actual
intention to abandon." Sanlehner v. Eisener &
Mendelson Co., 179 U.S. 19, 21 S. Ct. 7 (45 L. Ed.
6.0).(Anheuser-Busch, Inc, v. Budweiser Malt
Products Corp., 287 F. 245.)
xxx xxx xxx
Non-use because of legal restrictions is not
evidence of an intent to abandon. Non-use of their
ancient trade-mark and the adoption of new marks

by the Carthusian Monks after they had been


compelled to leave France was consistent with an
intention to retain their right to use their old mark.
Abandonment will not be inferred from a disuse
over a period of years occasioned by statutory
restrictions on the name of liquor. (Nims, Unfair
Competition and Trade-Mark, p. 1269.) (pp. 562564, supra) (emphasis Ours)
Applying the words of Justice Roman Ozaeta in the "Ang Tibay"
case (Ang vs. Toribio Teodoro, p. 56, supra) to the case now before
Us, petitioner herein must not be allowed to get a free ride on the
reputation and selling power of Standard Brands PLANTERS salted
peanuts, for a self-respecting person, or a reputable business
concern as is the case here, does not remain in the shelter of
another's popularity and goodwill but builds one of his own.
4. Findings of fact by the Director of Patents are conclusive and
binding on this Court provided they are supported by substantial
evidence. 9 The testimonial and documentary evidence in addition
to the stipulation of facts submitted by the parties fully support the
findings of respondent Director that(1) there is a confusing
similarity between the labels or trademarks of Philippine Nut and
Standard Brands used in their respective canned salted peanuts;
(2) respondent Standard Brands has priority of adoption and use of
the label with PLANTERS as the dominant feature and the same
has acquired secondary meaning in relation to salted peanuts; and
(3) there has been no abandonment or non-use of said trademark
by Standard Brands which would justify its adoption by petitioner
or any other competitor for the sale of salted peanuts in the
market.
PREMISES CONSIDERED, We AFFIRM the decision of respondent
Director of Patents with costs against petitioner.
So Ordered.
Castro (Chairman), Makasiar, Esguerra and Martin, JJ., concur.

Teehankee, J., is on leave.

5 Page 4 decision, DP, at page 86 of original record.


6 p. 4, decision DP, supra

Footnotes
1 Standard Brands Incorporated is a corporation
organized and existing under the laws of the State
of Delaware, United States of America, with its
principal business offices at 625 Madison Avenue,
New York, New York, United States of America.
(Amended Partial Stipulation of Facts, par. (a), page
34 original record).

7 Ana Ang vs. Toribio Teodoro, 74 Phil. 50, 53, per


Roman Ozaeta, J., citing G. & C. Merriam Co., vs.
Saalfield, 198 F., 369, 373.
8 Arce Sons & Co. vs. Selecta Biscuit Co., Inc., L17981, L-14761, January 28, 1961, per Bautista
Angelo, J., 1 SCRA 253.

2 See p. 581 for a reproduction of the pictures of


the cans for salted peanuts with respective labels
of the parties.
3 Co Tiong Sa vs. Director of Patents, l954, 95 Phil.
1, American Jurisprudence and Philippine cases,
viz, Clarke vs. Manila Candy Co., 36 Phil. 100;
Alhambra Cigar & Cigarette Co. vs. Mojica, 27 Phil.
266: Sapolin Co. vs. Balmaceda, et al., 67 Phil. 705;
La Insular vs. Jao Oge, 47 Phil. 75. See also Forbes,
Munn & Co. vs. Ang San To, 40 Phil. 272; Lim Hoa
vs. Director of Patents, 100 Phil. 214; Operators,
Incorporate vs. The Director of Patents, et al., No.
L-17901, October 29, 1965, 15 ,SCRA. 147: Etepha,
A.G. vs. Director of Patents and Westmont
Pharmaceuticals, Inc., No. L-20635, March 31,
1966, 16 SCRA, 495; Crisanta Y. Gabriel vs. Dr. Jose
R. Perez and Honorable Tiburcio Evalle as Director
of Patents, No. L-24075, January 31, 1974, 55
SCRA, 406.

G.R. No. 139300

March 14, 2001

4 See p. 3 for sample of Philippine Nut's label

Petitioner Amigo Manufacturing Inc. challenges, under Rule 45 of


the Rules of Court, the January 14, 1999 Resolution1 of the Court of
Appeals (CA) in CA-GR SP No. 22792, which reversed, on

AMIGO MANUFACTURING, INC., petitioner,


vs.
CLUETT PEABODY CO., INC., respondent.
PANGANIBAN, J.:
The findings of the Bureau of Patents that two trademarks are
confusingly and deceptively similar to each other are binding upon
the courts, absent any sufficient evidence to the contrary. In the
present case, the Bureau considered the totality of the similarities
between the two sets of marks and found that they were of such
degree, number and quality as to give the overall impression that
the two products are confusingly if not deceptively the same.
Statement of the Case

reconsideration, its own September 29, 1998 Decision. 2 The


dispositive portion of the assailed Resolution reads as follows:
"WHEREFORE, the Motion for Reconsideration is GRANTED,
and the Decision dated September 29, 1998 REVERSED.
Consequently, the decision rendered by the Director of
Patents dated September 3, 1990 is hereby AFFIRMED."
The Decision of the Director of Patents, referred to by the
CA, disposed as follows:
"WHEREFORE, the Petition is GRANTED. Consequently,
Certificate of Registration No. SR-2206 issued to
Respondent-Registrant [herein petitioner] is hereby
cancelled.
"Let the records of this case be remanded to the
Patent/Trademark Registry and EDP Division for appropriate
action in accordance with this Decision."
Petitioner also seeks the reversal of the June 30, 1999 CA
Resolution3 denying its own Motion for Reconsideration.
The Facts
The facts, which are undisputed, are summarized by the Court of
Appeals in its original Decision, as follows:
"The source of the controversy that precipitated the filing
by [herein Respondent] Cluett Peabody Co., Inc. (a New
York corporation) of the present case against [herein
Petitioner] Amigo Manufacturing Inc. (a Philippine
corporation) for cancellation of trademark is [respondent'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:
a) GOLD TOE, under Certificate of Registration No.
6797 dated September 22, 1958;

b) DEVICE, representation of a sock and magnifying


glass on the toe of a sock, under Certificate of
Registration No. 13465 dated January 25, 1968;
c) 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
d) 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'.
In the Patent Office, this case was heard by no less than six
Hearing Officers: Attys. Rodolfo Gilbang, Rustico Casia, M.
Yadao, Fabian Rufina, Neptali Bulilan and Pausi Sapak. The
last named officer drafted the decision under appeal which
was in due court signed and issued by the Director of
Patents (who never presided over any hearing) adversely
against the respondent Amigo Manufacturing, Inc. as
heretofore mentioned (supra, p.1).
The decision pivots on two point: the application of the rule
of idem sonans and the existence of a confusing similarity
in appearance between two trademarks (Rollo, p. 33)." 4
Ruling of the Court of Appeals
In its assailed Resolution, the CA held as follows:
"After a careful consideration of [respondent's] arguments
and a re-appreciation of the records of this case. [w]e find
[respondent's] motion for reconsideration meritorious. As

shown by the records, and as correctly held by the Director


of Patents, 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. Section 4(d) of R.A.
No. 166 declares to be unregistrable, 'a mark which
consists o[r] comprises a mark or trademark which so
resembles a mark or tradename registered in the
Philippines of tradename previously used in the Philippines
by another and not abandoned, as to be likely, when
applied to or used in connection with the goods, business
or services of the applicant, to cause confusion or mistake
or to deceive the purchasers. [Petitioner]'s mark is a
combination of the different registered marks owned by
[respondent]. As held in Del Monte Corporation v. Court of
Appeals, 181 SCRA 410 (1990), the question is not whether
the two articles are distinguishable by their label when set
aside but whether the general confusion made by the
article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in
confounding it with the original. As held by the Court in the
same decision[,] 'The most successful form of copying is to
employ enough points of similarity to confuse the public
with enough points of difference to confuse the courts.'
Furthermore, [petitioner]'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 exclusiv[ity] given to a registered mark.
"Finally, the Philippines and the United States are
parties to the Union Convention for the Protection
of Industrial Property adopted in Paris on March 20,
1883, otherwise known as the Paris Convention.
(Puma Sportschuhfabriken Rudolf Dassler K.G. v.
Intermediate Appellate Court, 158 SCRA 233).
[Respondent] is domiciled in the United States of
America and is the lawful owner of several
trademark registrations in the United States for the
mark 'GOLD TOE'.
xxx

xxx

x x x'

By virtue of the Philippines' membership to the Paris Union,


trademark rights in favor of the [respondent] were created.
The object of the Convention is to accord a national of a
member nation extensive protection against infringement
and other types of unfair competition. (Puma
Sportschuhfabriken Rudolf Dassler K.G. v. Intermediate
Appellate Court, 158 SCRA 233; La Chemise Lacoste, S.A. v.
Fernandez, 129 SCRA 373)"5
Hence, this Petition.6
Issues
In its Memorandum,7 petitioner raises the following issues for the
consideration of this Court:
"I
Whether or not the Court of Appeals overlooked that
petitioner's trademark was used in commerce in the
Philippines earlier than respondent's actual use of its
trademarks, hence the Court of Appeals erred in affirming
the Decision of the Director of Patents dated September 3,
1990.
II
Since the petitioner's actual use of its trademark was
ahead of the respondent, whether or not the Court of
Appeals erred in canceling the registration of petitioner's
trademark instead of canceling the trademark of the
respondent.
III
Whether or not the Court of Appeals erred in affirming the
findings of the Director of Patents that petitioner's
trademark [was] confusingly similar to respondent's
trademarks.
IV

Whether or not the Court of Appeals erred in applying the


Paris Convention in holding that respondent ha[d] an
exclusive right to the trademark 'gold toe' without taking
into consideration the absence of actual use in the
Philippines."8
In the main, the Court will resolve three issues: (1) the date of
actual use of the two trademarks; (2) their confusing similarities,
and (3) the applicability of the Paris Convention.
The Court's Ruling
The Petition has no merit.
First Issue:
Dates of First Use of Trademark and Devices
Petitioner claims that it started the actual use of the trademark
"Gold Top and Device" in September 1956, while respondent began
using the trademark "Gold Toe" only on May 15, 1962. It contends
that the claim of respondent that it had been using the "Gold Toe"
trademark at an earlier date was not substantiated. The latter's
witnesses supposedly contradicted themselves as to the date of
first actual use of their trademark, coming up with different dates
such as 1952, 1947 and 1938.
We do not agree. Based on the evidence presented, this Court
concurs in the findings of the Bureau of Patents that respondent
had actually used the trademark and the devices in question prior
to petitioner's use of its own. During the hearing at the Bureau of
Patents, respondent presented 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 the above 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. Indeed, Section 20 of Republic Act 166 provides as
follows:
"Sec. 20. Certificate of registration prima facie evidence of
validity. - A certificate of registration of a mark or tradename shall be prima facie evidence of the validity of the
registration, the registrant's ownership of the mark or
trade-name, and of the registrant's exclusive right to use
the same in connection with the goods, business or
services specified in the certificate, subject to any
conditions and limitations stated therein."9
Moreover, the validity of the Certificates of Registration was not
questioned. Neither did petitioner present any evidence to indicate
that they were fraudulently issued. Consequently, the claimed
dates of respondent's first use of the marks are presumed valid.
Clearly, they were ahead of petitioner's claimed date of first use of
"Gold Top and Device" in 1958.
Section 5-A of Republic Act No. 16610 states that an applicant for a
trademark or trade name shall, among others, state the date of
first use. The fact that the marks were indeed registered by
respondent shows that it did use them on the date indicated in the
Certificate of Registration.
On the other hand, petitioner failed to present proof of the date of
alleged first use of the trademark "Gold Top and Device". Thus,
even assuming that respondent started using it only on May 15,
1962, we can make no finding that petitioner had started using it
ahead of respondent.
Furthermore, petitioner registered its trademark only with the
supplemental register. In La Chemise Lacoste v. Fernandez,11 the
Court held that registration with the supplemental register gives no
presumption of ownership of the trademark. Said the Court:
"The registration of a mark upon the supplemental register
is not, as in the case of the principal register, prima facie

evidence of (1) the validity of registration; (2) registrant's


ownership of the mark; and (3) registrant's exclusive right
to use the mark. It is not subject to opposition, although it
may be cancelled after its issuance. Neither may it be the
subject of interference proceedings. Registration [i]n the
supplemental register is not constructive notice of
registrant's claim of ownership. A supplemental register is
provided for the registration because of some defects
(conversely, defects which make a mark unregistrable on
the principal register, yet do not bar them from the
supplemental register.)' (Agbayani, II Commercial Laws of
the Philippines, 1978, p. 514, citing Uy Hong Mo v. Titay &
Co., et al., Dec. No. 254 of Director of Patents, Apr. 30,
1968."
As to the actual date of first use by respondent of the four marks it
registered, the seeming confusion may have stemmed from the
fact that the marks have different dates of first use. Clearly,
however, these dates are indicated in the Certificates of
Registration.
In any case, absent any clear showing to the contrary, this Court
accepts the finding of the Bureau of Patents that it was respondent
which had prior use of its trademark, as shown in the various
Certificates of Registration issued in its favor. Verily, administrative
agencies' findings of fact in matters falling under their jurisdiction
are generally accorded great respect, if not finality. Thus, the Court
has held:
"x x x. By reason of the special knowledge and expertise of
said administrative agencies over matters falling under
their jurisdiction, they are in a better position to pass
judgment thereon; thus, their findings of fact in that regard
are generally accorded great respect, if not finality, by the
courts. The findings of fact of an administrative agency
must be respected as long as they are supported by
substantial evidence, even if such evidence might not be
overwhelming or even preponderant. It is not the task of an
appellate court to weigh once more the evidence
submitted before the administrative body and to substitute
its own judgment for that of the administrative agency in
respect of sufficiency of evidence."12

Second Issue:
Similarity of Trademarks
Citing various differences between the two sets of marks,
petitioner assails the finding of the director of patents that its
trademark is confusingly similar to that of respondent. Petitioner
points out that the director of patents erred in its application of the
idem sonans rule, claiming that the two trademarks "Gold Toe" and
"Gold Top" do not sound alike and are pronounced differently. It
avers that since the words gold and toe are generic, respondent
has no right to their exclusive use.
The arguments of petitioner are incorrect. True, it would not be
guilty of infringement on the basis alone of the similarity in the
sound of petitioner's "Gold Top" with that of respondent's "Gold
Toe." Admittedly, the pronunciations of the two do not, by
themselves, create confusion.
The Bureau of Patents, however, did not rely on the idem sonans
test alone in arriving at its conclusion. This fact is shown in the
following portion of its Decision:
"As shown by the drawings and labels on file, the mark
registered by Respondent-Registrant under Registration No.
SR-2206 is a combination of the abovementioned
trademarks registered separately by the petitioner in the
Philippines and the United States.
"With respect to the issue of confusing similarity between
the marks of the petitioner and that of the respondentregistrant applying the tests of idem sonans, the mark
'GOLD TOP & DEVICE' is confusingly similar with the mark
'GOLD TOE'. The difference in sound occurs only in the final
letter at the end of the marks. For the same reason, hardly
is there any variance in their appearance. 'GOLD TOE' and
'GOLD TOP' are printed in identical lettering. Both show [a]
representation of a man's foot wearing a sock. 'GOLD TOP'
blatantly incorporates petitioner's 'LINENIZED' which by
itself is a registered mark."13
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.
In Emerald Garment Manufacturing Corporation v. Court of
Appeals,14 this Court stated that in determining whether
trademarks are confusingly similar, jurisprudence has developed
two kinds of tests, the Dominancy Test15 and the Holistic Test.16 In
its words:
"In determining whether colorable imitation exists,
jurisprudence has developed two kinds of tests the
Dominancy Test applied in Asia Brewery, Inc. v. Court of
Appeals and other cases and the Holistic Test developed in
Del Monte Corporation v. Court of Appeals and its
proponent cases.
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.
xxx

xxx

xxx

. . . . 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. [C. Neilman Brewing Co. v. Independent Brewing
Co., 191 F., 489, 495, citing Eagle White Lead Co., vs.
Pflugh (CC) 180 Fed. 579]. 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.
(Auburn Rubber Corporation vs. Hanover Rubber Co., 107 F.
2d 588; x x x.)
xxx

xxx

xxx

On the other side of the spectrum, 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." A glance at
petitioner's mark shows that it definitely has a lot of similarities
and in fact looks like a combination of the trademark and devices
that respondent has already registered; namely, "Gold Toe," the
representation of a sock with a magnifying glass, the "Gold Toe"
representation and "linenized."
Admittedly, there are some minor differences between the two sets
of marks. The similarities, however, are of such degree, number
and quality that the overall impression given is that the two brands
of socks are deceptively the same, or at least very similar to each
another. An examination of the products in question shows that
their dominant features are gold checkered lines against a
predominantly black background and a representation of a sock
with a magnifying glass. In addition, both products use the 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. Lastly, the names of the brands are similar -- "Gold Top" and
"Gold Toe." Moreover, it must also be considered that petitioner
and respondent are engaged in the same line of business.
Petitioner cannot therefore ignore the fact that, when compared,
most of the features of its trademark are strikingly similar to those
of respondent. In addition, these representations are at the same
location, either in the sock itself or on the label. Petitioner presents
no explanation why it chose those representations, considering
that these were the exact symbols used in respondent's marks.
Thus, the overall impression created is that the two products are
deceptively and confusingly similar to each other. Clearly,
petitioner violated the applicable trademark provisions during that
time.
Let it be remembered that duly registered trademarks are
protected by law as intellectual properties and cannot be
appropriated by others without violating the due process clause.
An infringement of intellectual rights is no less vicious and

condemnable as theft of material property, whether personal or


real.
Third Issue:
The Paris Convention
Petitioner claims that the Court of Appeals erred in applying the
Paris Convention. Although respondent registered its trademark
ahead, petitioner argues that the actual use of the said mark is
necessary in order to be entitled to the protection of the rights
acquired through registration.
As already discussed, respondent registered its trademarks under
the principal register, which means that the requirement of prior
use had already been fulfilled. To emphasize, 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.
Thus, applicable is the Union Convention for the Protection of
Industrial Property adopted in Paris on March 20, 1883, otherwise
known as the Paris Convention, of which the Philippines and the
United States are members. Respondent is domiciled in the United
States and is the registered owner of the "Gold Toe" trademark.
Hence, it is entitled to the protection of the Convention. A foreignbased trademark owner, whose country of domicile is a party to an
international convention relating to protection of trademarks, 17 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.
In sum, petitioner has failed to show any reversible error on the
part of the Court of Appeals. Hence, its Petition must fail.
WHEREFORE, the Petition is hereby DENIED and the assailed
Resolution AFFIRMED. Costs against petitioner.
SO ORDERED.

Melo, Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez JJ., concur.

Footnotes
Rollo, pp. 17-22; written by Justice Demetrio G. Demetria,
with the concurrence of Justices Ramon A. Barcelona and
Renato C. Dacudao.
1

Rollo, pp. 11-15; written by Justice Emeterio C. Cui, with


the concurrence of Justices Ramon A. Barcelona and
Demetrio G. Demetria.
2

Rollo, p. 36.

CA Decision, pp. 2-3; rollo, pp. 12-13.

Assailed Resolution, pp. 4-6; rollo, pp. 20-22.

This case was deemed submitted for resolution on April


17, 2000, upon receipt by this Court of respondent's
Memorandum, signed by Attys. Editha R. Hechanova and
Daphne Ruby B. Grasparil. Petitioner's Memorandum,
signed by Atty. Arturo S. Santos, was received by the Court
on February 24, 2000.
6

Rollo, pp. 273-298.

Petitioner's Memorandum, pp. 4-5; rollo, pp. 276-277.

This provision is substantially reproduced in Section 138


of RA 8293, otherwise known as "Intellectual Property Code
of the Philippines."
9

"Sec. 5. Requirements of the application. - The


application for the registration of a mark or trade-name
shall be in English or Spanish, or in the national language,
with its corresponding English translation, and signed by
the applicant, and shall include:
10

(a) Sworn statement of the applicant's domicile and


citizenship, the date of the applicant's first use of the mark
or trade-name, the date of the applicant's first use of the
mark or trade-name in commerce or business, the goods,
business or services in connection with which the mark or
trade-name is used and the mode or manner in which the
mark is used in connection with such goods, business or
services, and that the person making the application
believes himself, or the firm, corporation or association on
whose behalf he makes the verification, to be the owner of
the mark or trade-name sought to be registered, that the
mark or trade-name is in use in commerce or business, and
that to the best of his knowledge, no person, firm,
corporation or association has the right to use such mark
or trade-name in commerce or business either in the
identical form thereof or in such near resemblance thereto
as might be calculated to deceive. x x x ."
Under Section 124.2 of RA 8293, the applicant is now
required to "file a declaration of actual use of the mark
with evidence to that effect, as prescribed by the
Regulations within three (3) years from the filing date of
the application. x x x."
11

129 SCRA 373, 393, May 21, 1984, per Gutierrez, J.

Villaflor v. CA, 280 SCRA 297, 329-330, October 9, 1997,


per Panganiban, J. See also Bulilan v. Commission on Audit,
300 SCRA 445, December 22, 1998; Government Service
Insurance System v. Court of Appeals, 296 SCRA 514,
September 25, 1998; Prime Marine Services, Inc. v.
National Labor Relations Commission, 297 SCRA 394,
October 8, 1998.
12

13

Decision of the Bureau of Patents, p. 3; rollo, p. 85.

251 SCRA 600, 615-616, December 29, 1995, per


Kapunan, J.
14

See Asia Brewery, Inc. v. Court of Appeals, 224 SCRA


437, July 5, 1993; Converse Rubber Corporation v.
Universal Rubber Products, Inc., 147 SCRA 154, January 8,
1987.
15

See Del Monte Corporation v. Court of Appeals, 181 SCRA


410, January 25, 1990; Fruit of the Loom, Inc. v. Court of
Appeals, 133 SCRA 405, November 29, 1984.
16

17

37 of RA 166 reads:

"Rights Sec. 37. Rights of foreign registrants. - Persons who


are nationals of, domiciled in, or have a bona fide or
effective business or commercial establishment in any
foreign country, which is a party to any international
convention or treaty relating to marks or trade-names, or
the repression of unfair competition to which the
Philippines may be a party, shall be entitled to the benefits
and subject to the provisions of this Act to the extent and
under the conditions essential to give effect to any such
convention and treaties so long as the Philippines shall
continue to be a party thereto, except as provided in the
following paragraphs of this section.
No registration of a mark or trade-name in the Philippines
by a person described in the preceding paragraph of this
section shall be granted until such mark or trade-name has
been registered in the country of origin of the applicant,
unless the applicant alleges use in commerce.
For the purposes of this section, the country of origin of the
applicant is the country in which he has bona fide and
effective industrial or commercial establishment, or if he
has not such an establishment in the country in which he is
domiciled, or if he has not a domicile in any of the
countries described in the first paragraph of this section,
the country of which he is a national.
An application for registration of a mark or trade-name
under the provisions of this Act filed by a person described
in the first paragraph of this section who has previously
duly filed an application for registration of the same mark

or trade-name in one of the countries described in said


paragraph shall be accorded the same force and effect as
would be accorded to the same application if filed in the
Philippines on the same date on which the application was
first filed in such foreign country: Provided, That (a) The application in the Philippines is filed within six
months from the date on which the applica[tion] was first
filed in the foreign country; and within three months from
the date of filing or within such time as the Director shall in
his discretion grant, the applicant shall furnish a certified
copy of the application for or registration in the country of
origin of the applicant, together with a translation thereof
into English, if not in the English language;
(b) The application conforms as nearly as practicable to the
requirements of this Act, but use in commerce need not be
alleged:
(c) The rights acquired by third parties before the date of
the filing of the first application in the foreign country shall
in no way be affected by a registration obtained [for] an
application filed under this paragraph; and
(d) Nothing in this paragraph shall entitle the owner of a
registration granted under this section to sue for acts
committed prior to the date on which his mark or tradename was registered in this country unless the registration
is based on use in commerce.
The registration of a mark under the provisions of this
section shall be independent of the registration in the
country of origin and the duration, validity or transfer in
the Philippines of such registration shall be governed by
the provisions of this Act.
Trade-names of persons described in the first paragraph of
this section shall be protected without the obligation of
filing or registration whether or not they form parts of
marks.

Any person designated in the first paragraph of this section


as entitled to the benefits and subject to the provisions of
this Act shall be entitled to effective protection against
unfair competition, and the remedies provided herein for
infringement of marks and trade-names shall be available
so far as they may be appropriate in repressing acts of
unfair competition.
Citizens or residents of the Philippines shall have the same
benefits as are granted by this section to persons
described in the first paragraph hereof."

G.R. No. L-20635

March 31, 1966

ETEPHA, A.G., petitioner,


vs.
DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS,
INC., respondents.
McClure, Salas and Gonzalez, for petitioner.
Sycip, Salazar, Manalo, Luna and Associates, for respondent.
SANCHEZ, J.:
To the question: May trademark ATUSSIN be registered, given the
fact that PERTUSSIN, another trademark, had been previously
registered in the Patent Office? the Director of Patents answered
affirmatively. Hence this appeal.
On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a
New York corporation, sought registration of trademark "Atussin"
placed on its "medicinal preparation of expectorant antihistaminic,
bronchodilator sedative, ascorbic acid (Vitamin C) used in the
treatment of cough". The trademark is used exclusively in the
Philippines since January 21, 1959.1
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation,
objected. Petitioner claims that it will be damaged because Atussin
is so confusedly similar to its Pertussin (Registration No. 6089,

issued on September 25, 1957) used on a preparation for the


treatment of coughs, that the buying public will be misled into
believing that Westmont's product is that of petitioner's which
allegedly enjoys goodwill.
1. The objects of a trademark are "to point out distinctly
the origin or ownership of the articles to which it is affixed,
to secure to him who has been instrumental in bringing
into market a superior article or merchandise the fruit of
his industry and skill, and to prevent fraud and
imposition."2 Our over-all task then is to ascertain whether
or not Atussin so resembles Pertussin "as to be likely, when
applied to or used in connection with the goods ... of the
applicant, to cause confusion or mistake or to deceive
purchasers".3 And, we are to be guided by the rule that the
validity of a cause for infringement is predicated upon
colorable imitation. The phrase "colorable imitation"
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."4
2. 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".5 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.6
"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"7 of the word "tussin" in a trademark.8
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".9 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".1wph1.t
3. A practical approach to the problem of similarity or
dissimilarity is to go into the whole of the two trademarks
pictured in their manner of display. Inspection should be
undertaken from the viewpoint of a prospective buyer. The
trademark complained of should be compared and
contrasted with the purchaser's memory (not in
juxtaposition) of the trademark said to be infringed. 10
Some such factors as "sound; appearance; form, style,
shape, size or format; color; ideas connoted by marks; the
meaning, spelling, and pronunciation, of words used; and
the setting in which the words appear" may be considered.
11
For, indeed, trademark infringement is a form of unfair
competition. 12
We take a casual look at the two labels without spelling
out the details bearing in mind the easy-to-remember
earmarks thereof. Respondent's label underscores the
trademark Atussin in bold, block letters horizontally
written. In petitioner's, on the other hand, Pertussin is
printed diagonally upwards and across in semiscript style
with flourishes and with only the first letter "P" capitalized.
Each label plainly shows the source of the medicine:
petitioner's at the foot bears "Etepha Ltd. Schaan Fl", and
on top, "Apothecary E. Taeschner's"; respondent's projects
"Westmont Pharmaceuticals, Inc. New York, USA" at the
bottoms, and on the lower left side the word "Westmont"

upon a white diamond shaped enclosure and in red ink a


color different from that of the words above and below it.
Printed prominently along the left, bottom and right edges
of petitioner's label are indications of the use: "for
bronchial catarrh whopping-cough coughs and
asthma". Respondent's for its part briefly represents what
its produce actually is - a "cough syrup". The two labels are
entirely different in colors, contents, arrangement of words
thereon, sizes, shapes and general appearance. The
contrasts in pictorial effects and appeals to the eye is so
pronounced that the label of one cannot be mistaken for
that of the other, not even by persons unfamiliar with the
two trademarks. 13
On this point the following culled from a recent decision of
the United States Court of Customs and Patent Appeals
(June 15, 1956) is persuasive: 14
Confusion is likely between trademarks, however,
only if their over-all presentations in any of the
particulars of sound, appearance, or meaning are
such as would lead the purchasing public into
believing that the products to which the marks are
applied emanated from the same source. In testing
this issue, fixed legal rules exist if not in
harmony, certainly in abundance but, in the final
analysis, the application of these rules in any given
situation necessarily reflects a matter of individual
judgment largely predicated on opinion. There is,
however, and can be no disagreement with the rule
that the purchaser is confused, if at all, by the
marks as a whole.
4. We now consider exclusively the two words Pertussin
and Atussin as they appear on the respective labels. As
previously adverted to, these words are presented to the
public in different styles of writing and methods of design.
The horizontal plain, block letters of Atussin and the

diagonally and artistically upward writing of Pertussin leave


distinct visual impressions. One look is enough to denude
the mind of that illuminating similarity so essential for a
trademark infringement case to prosper.
5. As we take up Pertussin and Atussin once again, we
cannot escape notice of the fact that the two words do not
sound alike when pronounced. There is not much
phonetic similarity between the two. The Solicitor General
well-observed that in Pertussin the pronunciation of the
prefix "Per", whether correct or incorrect, includes a
combination of three letters P, e and r; whereas, in Atussin
the whole starts with the single letter A added to suffix
"tussin". Appeals to the ear are disimilar. And this, because
in a word combination, the part that comes first is the most
pronounced. An expositor of the applicable rule here is the
decision in the Syrocol-Cheracol controversy. 15 There, the
ruling is that trademark Syrocol (a cough medicine
preparation) is not confusedly similar to trademark
Cheracol (also a cough medicine preparation). Reason: the
two words "do not look or sound enough alike to justify a
holding of trademark infringement", and the "only
similarity is in the last syllable, and that is not uncommon
in names given drug compounds".
6. In the solution of a trademark infringement problem,
regard too should be given to the class of persons who buy
the particular product and the circumstances ordinarily
attendant to its acquisition. 16 The medicinal preparation
clothed with the trademarks in question, are unlike articles
of everyday use such as candies, ice cream, milk, soft
drinks and the like which may be freely obtained by
anyone, anytime, anywhere. Petitioner's and respondent's
products are to be dispensed upon medical prescription.
The respective labels say so. An intending buyer must have
to go first to a licensed doctor of medicine; he receives
instructions as to what to purchase; he reads the doctor's
prescription; he knows what he is to buy. He is not of the

incautious, unwary, unobservant or unsuspecting type; he


examines the product sold to him; he checks to find out
whether it conforms to the medical prescription. The
common trade channel is the pharmacy or the drugstore.
Similarly, the pharmacist or druggist verifies the medicine
sold. The margin of error in the acquisition of one for the
other is quite remote.
We concede the possibility that buyers might be able to obtain
Pertussin or Attusin without prescription. When this happens, then
the buyer must be one throughly familiar with what he intends to
get, else he would not have the temerity to ask for a medicine
specifically needed to cure a given ailment. In which case, the
more improbable it will be to palm off one for the other. For a
person who purchases with open eyes is hardly the man to be
deceived.
For the reasons given, the appealed decision of the respondent
Director of Patents giving due course to the application for the
registration of trademark ATTUSIN is hereby affirmed. Costa
against petitioner. So ordered.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera,
Regala, Makalintal, Bengzon, J. P., and Zaldivar, JJ., concur.
Dizon, J., took no part.

The Director of Patents cites the following: "NUMOTOZINE"


(Reg. No. 1990-S, renewed under Reg. No. 7461-R) for
treatment of pneumonia, bronchitis, pleurisy, etc.;
"ASCARICIDOL" (Reg. No. 6090) and "ASCAROL" (Reg. No.
4114), both for expelling intestinal worms such as ascaris;
"DIARROL" (Reg. No. 5864) for treatment of diarrhea,
dysentery and intestinal disorders; "ASMAKOL" (Reg. No.
SR-104), "ASMADREN" (Reg. No. 4353), "ASMOL" (Reg. No.
5379), all for treatment of asthma.
5

Webster's Third International Dictionary, 1964 ed., p.


2470.
6

Miles Laboratories, Inc. vs. Pepsodent Co., 104 F(2d), 205,


207. Here the marks pepso-seltzer and alka-seltzer were
involved. The U.S. Court of Customs and Patent Appeals
held that "seltzer" was descriptive, and could not be
appropriated.
7

In Dixi-Cola Laboratories, Inc., et al. vs. Coca-Cola Co., 117


F (2d), 352, 360, the Circuit Court of Appeals in refusing to
enjoin use of Dixi-Cola, held that "Cola" is descriptive and
generic. See also Coca-Cola Co. vs. Carlisle Bottling Works,
43 F (2d) 101, 103, where "Cola" was held to be
descriptive, so that "Roxa Kola" is not an infringement of
"Coca-Cola".
8

Footnotes
Annotations, Lawyers' Reports, Annotated, 1918 A, p. 966.

Section 2 of the Trademark Law requires actual use in the


Philippines of not less than two months before application
may be filed.
1

87 Corpus Juris Secundum, pp. 288-291.

10

87 Corpus Juris Secundum, pp. 291-292.

11

52 Am. Jur., p. 508, citing cases.

Clarke vs. Manila Candy Co., 36 Phil. 100, 106; Co Tiong


Sa vs. Director of Patents, 95 Phil. 1, 4.
12

Section 4(d), Trade Mark Law.

87 Corpuz Juris Secundum, p. 287.

Mead Jonhson & Co. vs. N.V.J. Van Dorp, Ltd., et al., G.R.
No. L-17501. April 27, 1963. In this case, this Court held
that thetrademark ALASKA does not infringed the
registered trademark ALACTA. This court, after comparing
the sizes of the containers and the color pattern, was
impressed more by the dissimilarities ( in the labels
attached to the containers) than by the similarities
appearing thereon. The present case, we believe, is within
the coverage of Mead Johnson decision.
13

Lekas & Drivas, Inc. vs. Tenth Avenue Trading Corp., 223 F
(2d), pp. 294, 296; emphasis supplied.
14

The Upjohn Co. vs. Schwartz, etc., 246 F(2d), pp. 254,
262.
15

87 Corpus Juris Secundum, p. 295.

16

G.R. No. L-20964

November 9, 1923

LA INSULAR, Fabrica de Tobacos y Cigarillos, Inc., plaintiffappellant,


vs.

YU SO, owner of La Grandeza cigarette factory, defendantappellee.


Araneta and Zaragoza for appellant.
Crossfield and O'Brien and C. A. Sobral for appellee.

MALCOLM, J.:
The trial judge found no unlawful similarity between Exhibit
B-1, the package for cigarettes used by the defendant, under the
name La Simpatica, and Exhibit A-1, the package for cigarettes
used by the plaintiff, under the name La Insular, and accordingly
dismissed the complaint without costs.
On the combined question of fact and law, we agree with the
trial judge. Counsel for the appellee points out sixteen differences
between the trade-marks and labels of the appellee and the
appellant, and while we have not gone to the trouble to note all of
these differences, we yet conclude that the goods of the defendant
have not been given such an appearances as would deceive the
public in their purchase of cigarettes. Moreover, it appears of
record the La Simpatica has been using this label and selling these
cigarettes since 1908, and that it was only in 1920 that this
complaint was filed.
It is rudimentary that the simulation of the plaintiff's mark
must be such as would appear likely to mislead the ordinarily
intelligent buyer into accepting the article with the stimulated
wrapper as and for the genuine. Seasonable measures must be
taken to protect the interests of the person who claims that his
trade-mark has been fraudulently imitated, or who complains of
unfair competition. (U. S. vs. Manuel [1906], 7 Phil., 221; La Yebana
Co. vs. Francisco Chua Seco & Co. [1909], 14 Phil., 534;, which
discloses facts constituting unfair competition; Rueda Hermanos &
Co. vs. Felix Paglinawan & Co. [1916], 33 Phil., 196, also finding

unfair competition; Forbes, Munn & Co. vs. Ang San To [1919], 40
Phil., 272, also finding unfair competition; Dy Buncio vs. Tan Tiao
Bok [1921], 42 Phil., 190, finding no unfair competition to exist; La
Insular vs. Jao Oge [1921], 42 Phil., 366, a somewhat similar case,
but relating merely to the question of whether or not the complaint
stated a good cause of action.) lawphil.net
Finding no reversible error and further discussion being
unnecessary it results that judgment must be affirmed, with costs
against the appellant. So ordered
Johnson, Avancea, Villamor and Romualdez, JJ., concur.
Street and Johns, JJ., concur in the result.
G.R. No. L-19297

December 22, 1966

MARVEX COMMERCIAL CO., INC., petitioner,


vs.
PETRA HAWPIA and CO., and THE DIRECTOR OF PATENTS,
respondents.
Sta. Ana and Lasam for petitioner.
A.S. Donato for respondent Petra Hawpia and Co.
Office of the Solicitor General for respondent Director of Patents.
CASTRO, J.:
Petra Hawpia & Co., a partnership duly organized under the laws of
the Philippines and doing business at 543 M. de Santos (Botica
Divisoria), Manila (hereinafter referred to as the applicant), on
October 14, 1958 filed a petition for the registration of the
trademark "LIONPAS" used on medicated plaster, with the
Philippine Patent Office, asserting its continuous use in the
Philippines since June 9, 1958.1 The Marvex Commercial Co., Inc., a
corporation also duly organized under the laws of the Philippines
(hereinafter referred to as the oppositor), on July 24, 1959 filed an
opposition thereto, alleging that the registration of such trademark
would violate its right to and interest in the trademark "SALONPAS"
used on another medicated plaster, which is registered in its name
under Certificate of Registration 5486, issued by the Director of

Patents on September 29, 1956, and that both trademarks when


used on medicated plaster would mislead the public as they are
confusingly similar.
After due hearing, the Director of Patents in his decision of August
18, 1961 dismissed the opposition and gave due course to the
petition, stating in part that "confusion, mistake, or deception
among the purchasers will not likely and reasonably occur" when
both trademarks are applied to medicated plaster. The oppositor
moved to have the decision reconsidered. This motion was denied
in a resolution of November 27, 1961. The oppositor then
interposed the present appeal.
The issues stated by the Director of Patents in his decision are the
same ones now tendered by the oppositor for resolution, namely,
(1) Is the applicant the owner of the trademark "LIONPAS"?; (2)
Should the application be rejected on the ground that the applicant
made false representations in placing the phrase "Reg. Phil. Pat.
Off." below the trademark "LIONPAS" on its cartons?, and (3) Is the
trademark "LIONPAS" confusingly similar to the trademark
"SALONPAS"?
We do not consider the second issue of any importance; we will
thus proceed to resolve the first and third issues.
Is the applicant the owner of the trademark "LIONPAS?"
Under sections 2 and 2-A of the Trade Mark Law, as amended, the
right to register trademarks, tradenames and service marks by any
person, corporation, partnership or association domiciled in the
Philippines or in any foreign country, is based on ownership, and
the burden is upon the applicant to prove such ownership
(Operators, Inc. vs. The Director of Patents, et al., L-17901, Oct. 29,
1965).
The Director of Patents found, on the strength of exhibits 5 and 6
for the applicant, that the latter has "satisfactorily shown" its
ownership of the trademark sought to be registered. Exhibit 5 is a
letter dated June 20, 1958, sent by "OSAKA BOEKI KAISHA, LTD." to
the applicant which tends to show that the former, for a $1
consideration, has assigned, ceded, and conveyed all its "rights,
interests and goodwill in the tradename LIONPAS Medicated Plaster

. . ." in favor of the latter. Exhibit 6 is a joint "SWORN STATEMENT"


which appears to have been executed by the presidents of "OSAKA
BOEKI KAISHA, LTD." and "ASUNARO PHARMACEUTICAL INDUSTRY
CO.", and tends to confirm the contents of exhibit 5.
A careful scrutiny of exh. 5 will reveal, however, that the sender of
the letter, "OSAKA BOEKI KAISHA LTD.", and which appears to be
the seller, is merely a representative of the manufacturer
"ASUNARO PHARMACEUTICAL INDUSTRY CO." There is no proof that
as such representative, the former has been authorized by the
latter to sell the trademark in question. Moreover, exh. 5 on its
face appears to have been signed only by someone whose position
in the company's "Sundries Dept." is not described; the signature is
not legible. It is even contradicted by exh. 6. While exh. 5 shows
that "OSAKA BOEKI KAISHA, LTD." is a representative of "ASUNARO
PHARMACEUTICAL INDUSTRY CO."; exh. 6 asserts that the former is
not a representative of the latter, but that it is the owner of the
trademark "LIONPAS" (par. 2, exh. 6). At all events, neither
averment can be accorded the weight of an assignment of
ownership of the trademark in question under the Trade Mark Law.
Exh. 5 is not acknowledged. Exh. 6 does not bear the
acknowledgment contemplated by the aforesaid law, particularly
by the last paragraph of section 37 and paragraph 2 of section 31
of R.A. 166, as amended, which provide as follows:
The registration of a mark under the provisions of this
section shall be independent of the registration in the
country of origin and the duration, validity or transfer in
the Philippines of such registration shall be governed by
the provisions of this Act. (Sec. 37, last par.) (Emphasis
ours)
The assignment must be in writing, acknowledged before a
notary public or other officer authorized to administer
oaths or perform other notarial acts and certified under the
hand and official seal of the notary or other officer. (Sec.
31, par. 2)
In this case, although a sheet of paper is attached to exh. 6, on
which is typewritten a certification that the signatures of the
presidents of the two named companies (referring to the
signatures in exh. 6) "have been duly written by themselves", this
sheet is unmarked, unpaged, unsigned, undated and unsealed. We

have thumbed the record in quest of any definitive evidence that it


is a correct translation of the Japanese characters found on another
unmarked and unpaged sheet, and have found none.
It follows from the above disquisition that exhs. 5 and 6 are legally
insufficient to prove that the applicant is the owner of the
trademark in question.
As a matter of fact, the other evidence on record conclusively
belies the import of exh. 6. Thus exh. A states that the applicant is
merely the "exclusive distributor" in the Philippines of the
"LIONPAS" penetrative plaster; exh. A-1 describes the applicant as
the "Philippine sole distributor" of "LIONPAS"; exh. B simply states
that "LIONPAS" is "manufactured exclusively for Petra Hawpia & Co.
for distribution in the Philippines."
Not being the owner of the trademark "LIONPAS" but being merely
an importer and/or distributor of the said penetrative plaster, the
applicant is not entitled under the law to register it in its name
(Operators, Inc. vs. Director of Patents, supra).
Upon the third issue, the applicant preliminarily asserts that there
is no justification for this Court to disturb any finding made by the
Director of Patents on appeal. This assertion is not tenable.
Although the Director of Patents is the official vested by law with
the power to administer the registration of trademarks and
tradenames, his opinion on the matter of similarity or dissimilarity
of trademarks and tradenames is not conclusive upon this Court
which may pass upon such determination.
The "SALONPAS" mark is not before this Court. Our meticulous
examination of the entire record has failed to yield a sample of
such mark. We have therefore proceeded to analyze the two
marks, vis-a-vis each other, on the basis of what we can derive
from the record for a comparative study. And our conclusion, in
disagreement with that of the Director of Patents, is not based on a
comparison of the appearance, form, style, shape, size or format of
the trademarks, which we can not make because, as we have
already observed, the "SALONPAS" mark is not before us, but on a
comparison of the spelling, sound and pronunciation of the two
words.

It is our considered view that the trademarks "SALONPAS" and


"LIONPAS" are confusingly similar in sound.
Both these words have the same suffix, "PAS", which is used to
denote a plaster that adheres to the body with curative powers.
"Pas, being merely descriptive, furnishes no indication of the origin
of the article and therefore is open for appropriation by anyone
(Ethepa vs. Director of Patents, L-20635, March 31, 1966) and may
properly become the subject of a trademark by combination with
another word or phrase.
Two letters of "SALONPAS" are missing in "LIONPAS"; the first letter
a and the letter s. Be that as it may, when the two words are
pronounced, the sound effects are confusingly similar. And where
goods are advertised over the radio, similarity in sound is of
especial significance (Co Tiong Sa vs. Director of Patents, 95 Phil. 1
citing Nims, The Law of Unfair Competition and Trademarks, 4th
ed., vol. 2, pp. 678-679). "The importance of this rule is
emphasized by the increase of radio advertising in which we are
deprived of help of our eyes and must depend entirely on the ear"
(Operators, Inc. vs. Director of Patents, supra).
The following random list of confusingly similar sounds in the
matter of trademarks, culled from Nims, Unfair Competition and
Trade Marks, 1947, vol. 1, will reinforce our view that "SALONPAS"
and "LIONPAS" are confusingly similar in sound: "Gold Dust" and
"Gold Drop"; "Jantzen" and "Jazz-Sea"; "Silver Flash" and "SupperFlash"; "Cascarete" and "Celborite"; "Celluloid" and "Cellonite";
"Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe" and
"Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo". Leon
Amdur, in his book "TradeMark Law and Practice", pp. 419-421,
cites, as coming within the purview of the idem sonans rule,
"Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos",
and "Seven-Up" and "Lemon-Up". In Co Tiong vs. Director of

Patents, this Court unequivocally said that "Celdura" and "Cordura"


are confusingly similar in sound; this Court held in Sapolin Co. vs.
Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement
of the trademark "Sapolin", as the sound of the two names is
almost the same.
In the case at bar, "SALONPAS" and "LIONPAS", when spoken,
sound very much alike. Similarity of sound is sufficient ground for
this Court to rule that the two marks are confusingly similar when
applied to merchandise of the same descriptive properties (see
Celanese Corporation of America vs. E. I. Du Pont, 154 F. 2d. 146,
148).
The registration of "LIONPAS" cannot therefore be given due
course.
ACCORDINGLY, the decision of the respondent Director of Patents is
set aside, and the petition below of the respondent Petra Hawpia &
Co. is hereby dismissed, at the cost of the latter respondent.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon,
J.P., Zaldivar and Sanchez, JJ., concur.

Footnotes
Sec. 2 of the Trade Mark Law requires actual use in the
Philippines of not less than two months before application
may be filed.
1