Canon vs.

CA

FACTS:

On January 15, 1985, private respondent NSR Rubber Corporation filed an application for registration of the mark CANON for
sandals in the Bureau of Patents, Trademarks, and Technology Transfer (BPTTT). Canon Kabushiki Kaisha filed a Verified Notice of
Opposition alleging that it will be damaged by the registration of the trademark CANON in the name of private respondent since
they were using the same trademark for their footwear line of products. The private respondent will also use the name Canon for its
footwear products.

Based on the records, the evidence presented by petitioner consisted of its certificates of registration for the mark CANON
in various countries covering goods belonging to class 2, paints, chemical products, toner, and dye stuff. Petitioner also submitted in
evidence its Philippine Trademark Registration No. 39398, showing its ownership over the trademark CANON.

The BPTTT, on November 10, 1992, issued its decision dismissing the opposition of petitioner and giving due course to NSR's
application for the registration of the trademark CANON. Canon Kabushiki Kaisha filed an appeal with the Court of Appeals that
eventually affirmed the decision of the BPTTT.

ISSUE:

Is the use of trademark, CANON, by the private respondent affects the business of Canon Kabushiki Kaisha who has an existing
ownership of a trademark also known as CANON?

HELD:

The Supreme Court says that ordinarily, the ownership of a trademark or tradename is a property right that the owner is
entitled to protect as mandated by the Trademark Law. However, 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.

The BPTTT correctly ruled that since the certificate of registration of petitioner for the trademark CANON covers class 2
(paints, chemical products, toner, dyestuff), private respondent can use the trademark CANON for its goods classified as class 25
(sandals). Clearly, there is a world of difference between the paints, chemical products, toner, and dyestuff of petitioner and the
sandals of private respondent.

McDonald's Corporation v. L.C. Big Mak Burger, Inc.

Petitioner McDonald's Corporation ("McDonald's") is a US corporation that operates a global chain of fast-food restaurants, with
Petitioner McGeorge Food Industries ("McGeorge"), as the Philippine franchisee.

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

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

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

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

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

RTC rendered a Decision finding respondent corporation liable for trademark infringement and unfair competition. CA reversed
RTC's decision on appeal.
1ST ISSUE:W/N respondent corporation is liable for trademark infringement and unfair competition.

Ruling: Yes
Section 22 of Republic Act No. 166, as amended, defines trademark infringement as follows:

Infringement, what constitutes. - Any person who [1] shall use, without the consent of the registrant, any reproduction, counterfeit,
copy or colorable imitation of any registered mark or trade-name in connection with the sale, offering for sale, or advertising of any
goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers
or others as to the source or origin of such goods or services, or identity of such business; or [2] reproduce, counterfeit, copy, or
colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods,
business or services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided.
To establish trademark infringement, the following elements must be shown: (1) the validity of plaintiff's mark; (2) the plaintiff's
ownership of the mark; and (3) the use of the mark or its colorable imitation by the alleged infringer results in "likelihood of
confusion." Of these, it is the element of likelihood of confusion that is the gravamen of trademark infringement.

1st element:

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

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

2nd element:

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

3rd element:

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

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

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

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

Applying the dominancy test, Respondents' use of the "Big Mak" mark results in likelihood of confusion. Aurally the two marks are
the same, with the first word of both marks phonetically the same, and the second word of both marks also phonetically the same.
Visually, the two marks have both two words and six letters, with the first word of both marks having the same letters and the
second word having the same first two letters.
Lastly, since Section 22 only requires the less stringent standard of "likelihood of confusion," Petitioners' failure to present proof of
actual confusion does not negate their claim of trademark infringement.

2ND ISSUE: W/N Respondents committed Unfair Competition

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

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

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

COFFEE PARTNERS V. SAN FRANCISCO COFFEE & ROASTERY (G.R. NO. 169504)

Facts:
Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd. to operate coffee shops in the country using
the trademark San Francisco Coffee. Respondent on the other hand, is a local corporation engaged in the wholesale and retail sale
of coffee and uses the business name San Francisco Coffee & Roastery registered with the DTI. Later, respondent filed an
infringement and/or unfair competition complaint against petitioner alleging that the latter was about to open a coffee shop under
the name San Francisco Coffee causing confusion in the minds of the public as it bore a similar name and is engaged also in selling
of coffee. Petitioner contended no infringement would arise because respondents tradename was not registered.
Issue:
Whether or not petitioners trademark would infringe respondents tradename.
Ruling: YES.
In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down what constitutes infringement of an
unregistered trade name, thus:
(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.
RA 8293, which took effect on 1 January 1998, has dispensed with the registration requirement. Section 165.2 of RA 8293
categorically states that trade names shall be protected, even prior to or without registration with the IPO, against any unlawful act
including any subsequent use of the trade name by a third party, whether as a trade name or a trademark likely to mislead the
public.
It is the likelihood of confusion that is the gravamen of infringement. Applying the dominancy test or the holistic test, petitioners
SAN FRANCISCO COFFEE trademark is a clear infringement of respondents SAN FRANCISCO COFFEE & ROASTERY, INC. trade
name. The descriptive words SAN FRANCISCO COFFEE are precisely the dominant features of respondents trade name. Petitioner
and respondent are engaged in the same business of selling coffee, whether wholesale or retail. The likelihood of confusion is higher
in cases where the business of one corporation is the same or substantially the same as that of another corporation. In this case, the
consuming public will likely be confused as to the source of the coffee being sold at petitioners coffee shops.