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CONTRACT DRAFTING:

1. SAMSON vs DAWAY (GR No. 160054-55, July 21, 2004) AGUSTIN

Facts: The petitioner, owner/proprietor of ITTI Shoes/Mano Shoes


Manufactuirng Corporation,allegedly sold or offers the sale of garment product
using the trademark “Caterpillar” to the prejudice of Caterpillar, Inc., private
respondent in this case. The respondent filed two informations for unfair
competition under Section 168.3 (a), in relation to Section 170, of the Intellectual
Property Code (Republic Act No. 8293) with the RTC. The petitioner questioned
the jurisdiction of the trial court over the offense charged contending that the case
should be filed with the MTC because violation of unfair competition is penalized
with imprisonment not exceeding 6 years under RA 7691

Issue: Which court has jurisdiction over criminal and civil cases for violation of
intellectual property rights?

Ruling of the Court: The SC held that under Section 163 of the IPC, actions for
unfair competition shall be brought before the proper courts with appropriate
jurisdiction under existing laws. The law contemplated in Section 163 of IPC is RA
166 otherwise known as the Trademark Law. Section 27 of the Trademark Law
provides that jurisdiction over cases for infringement of registered marks, unfair
competition, false designation of origin and false description or representation, is
lodged with theCourt of First Instance (now Regional Trial Court). Since RA 7691
is a general law and IPC in relation to Trademark Law is a special law, the latter
shall prevail. Actions for unfair competition therefore should be filed with the RTC.

2. Mighty Corporation vs ENJ Gallo Winers (GR No. 154342, July 14, 2004)
TABANGAY

FACTS:
E. & J. Gallo Winery, producer of wines and brandy products which is based
in California, U.S.A., registered its GALLO wine trademark in the Philippines in
1971. On the other hand, Mighty Corporation and La Campana Fabrica de Tabaco,
Inc., together with their affiliate, Tobacco Industries of the Philippines, were
engaged in the manufacture and distribution of tobacco products for which they
have been using the GALLO cigarette trademark since 1973.
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 of the Paris
Convention for the Protection of Industrial Property (Paris Convention) and RA 166
(Trademark Law), specifically, Sections 22 and 23 (for trademark infringement),[29
and 30 (for unfair competition and false designation of origin) and 37 (for
tradename infringement). They claimed that petitioners adopted the GALLO
trademark to ride on Gallo Winerys GALLO and ERNEST & JULIO GALLO
trademarks established reputation and popularity, thus causing confusion,
deception and mistake on the part of the purchasing public who had always
associated GALLO and ERNEST & JULIO GALLO trademarks with Gallo Winerys
wines. Respondents prayed for the issuance of a writ of preliminary injunction and
ex parte restraining order.
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.

Issue:
Whether or not mighty corporation et. Al is liable for infringement and unfair
COMPETION.

HELD:
The SC held that there was no infringement. The use of the respondent of
the mark “Gallo” for its wine products was exclusive in nature. The court mentioned
two types of confusion in Trademark Infringement:
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
defendant’s goods are then brought as the plaintiff’s and its poor quality reflects
badly on the plaintiff’s reputation.
Confusion of Business – wherein the goods of the parties are different but
the defendant’s 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.
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 trademark is attached;
(c) the likely effect on the purchaser; and
(d) the registrant’s express or implied consent and other fair and equitable
considerations.
In this case, the SC employing the dominancy test, concluded that there is
no likelihood of confusion. They materially differ in color scheme, art works and
markings. Further, the two goods are not closely related because he products
belong to different classifications, form, composition and they have different
intended markets or consumers.

3. Mc Donalds Corp. vs LC Big Mak Burger Inc. (GR No. 143993, Aug. 18, 2004)
PALAPUS

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


MCDONALD’S CORPORATION V. L.C. BIG MAK BURGER

Facts:
Petitioner McDonald’s, an American corporation operating a global chain of fast-
food restaurants, is the owner of the ‘Big Mac’ mark for its double-decker
hamburger sandwich here and in the US. Meanwhile, respondent L.C., a domestic
corporation which operates fast-food outlets and snack vans applied for the
registration of the ‘Big Mak’ mark for its hamburger sandwiches. Petitioner opposed
on the ground that ‘Big Mak’ was a colorable imitation of its registered ‘Big Mac’
mark for the same food products. Respondents denied there is colorable imitation
and argued that petitioner cannot exclusively appropriate the mark ‘Big Mac’
because the word ‘Big’ is a generic and descriptive term. Petitioner filed a
complaint for trademark infringement and unfair competition. The trial court found
for petitioners. CA held otherwise.

Issues:
Whether or not the word ‘Big Mac’ can be exclusively appropriated by petitioner;
Whether or not there is colorable imitation resulting in likelihood of confusion;
Whether or not there is unfair competition.

Held:
(1) YES. A mark is valid if it is “distinctive” and thus not barred from registration
under Section 4 of RA 166. However, once registered, not only the mark’s validity
but also the registrant’s ownership of the mark is prima facie presumed. The “Big
Mac” mark, which should be treated in its entirety and not dissected word for word,
is neither generic nor descriptive. Generic marks are commonly used as the name
or description of a kind of goods, such as “Lite” for beer or “Chocolate Fudge” for
chocolate soda drink. Descriptive marks, on the other hand, convey the
characteristics, functions, qualities or ingredients of a product to one who has
never seen it or does not know it exists. 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.
(2) YES. In determining likelihood of confusion, jurisprudence has developed two
tests, the dominancy test and the holistic test. The dominancy test focuses on the
similarity of the prevalent features of the competing trademarks that might cause
confusion. In contrast, the holistic test requires the court to consider the entirety of
the marks as applied to the products, including the labels and packaging, in
determining confusing similarity. This Court, however, has relied on the dominancy
test rather than the holistic test. The test of dominancy is now explicitly
incorporated into law in Section 155.1 of the Intellectual Property Code which
defines infringement as the “colorable imitation of a registered mark xxx or a
dominant feature thereof.”
Applying the dominancy test, the Court finds that respondents’ use of the “Big Mak”
mark results in likelihood of confusion. Aurally the two marks are the same, with
the first word of both marks phonetically the same, and the second word of both
marks also phonetically the same. Visually, the two marks have both two words
and six letters, with the first word of both marks having the same letters and the
second word having the same first two letters. In spelling, considering the Filipino
language, even the last letters of both marks are the same. Clearly, respondents
have adopted in “Big Mak” not only the dominant but also almost all the features
of “Big Mac.” Applied to the same food product of hamburgers, the two marks will
likely result in confusion in the public mind. Certainly, “Big Mac” and “Big Mak” for
hamburgers create even greater confusion, not only aurally but also visually.
Indeed, a person cannot distinguish “Big Mac” from “Big Mak” by their sound. When
one hears a “Big Mac” or “Big Mak” hamburger advertisement over the radio, one
would not know whether the “Mac” or “Mak” ends with a “c” or a “k.”

(3) YES. The essential elements of an action for unfair competition are (1)
confusing similarity in the general appearance of the goods, and (2) intent to
deceive the public and defraud a competitor. The confusing similarity may or may
not result from similarity in the marks, but may result from other external factors in
the packaging or presentation of the goods. The intent to deceive and defraud may
be inferred from the similarity of the appearance of the goods as offered for sale to
the public. Actual fraudulent intent need not be shown. Unfair competition is
broader than trademark infringement and includes passing off goods with or
without trademark infringement. Trademark infringement is a form of unfair
competition. Trademark infringement constitutes unfair competition when there is
not merely likelihood of confusion, but also actual or probable deception on the
public because of the general appearance of the goods. There can be trademark
infringement without unfair competition as when the infringer discloses on the
labels containing the mark that he manufactures the goods, thus preventing the
public from being deceived that the goods originate from the trademark owner.

Respondents’ goods are hamburgers which are also the goods of petitioners.
Since respondents chose to apply the “Big Mak” mark on hamburgers, just like
petitioner’s use of the “Big Mac” mark on hamburgers, respondents have obviously
clothed their goods with the general appearance of petitioners’ goods. There is
actually no notice to the public that the “Big Mak” hamburgers are products of “L.C.
Big Mak Burger, Inc.” and not those of petitioners who have the exclusive right to
the “Big Mac” mark. This clearly shows respondents’ intent to deceive the public.
We hold that as found by the RTC, respondent corporation is liable for unfair
competition.

4. Phil. Pharmawealth, Inc vs Pfizer, Inc. & Pfizer (Phil.) Inc. (GR No. 1677715,
November 17, 2010) ANDRES

Facts: Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin.


It is marketed under the brand name “Unasyn.” Sometime in January and February
2003, Pfizer discovered that Pharmawealth submitted bids for the supply of
Sulbactam Ampicillin to several hospitals without the Pfizer’s consent. Pfizer then
demanded that the hospitals cease and desist from accepting such bids. Pfizer also
demanded that Pharmawealth immediately withdraw its bids to supply Sulbactam
Ampicillin. Pharmawealth and the hospitals ignored the demands. Pfizer then filed
a complaint for patent infringement with a prayer for permanent injunction and
forfeiture of the infringing products. A preliminary injunction effective for 90 days was
granted by the IPO’s Bureau of Legal Affairs (IPO-BLA). Upon expiration, a motion
for extension filed by Pfizer was denied. Pfizer filed a Special Civil Action for
Certiorari in the Court of Appeals (CA) assailing the denial. While the case was
pending in the CA, Pfizer filed with the Regional Trial Court of Makati (RTC) a
complaint for infringement and unfair competition, with a prayer for injunction. The
RTC issued a temporary restraining order, and then a preliminary injunction.
Pharmawealth filed a motion to dismiss the case in the CA, on the ground of
forum shopping. Nevertheless, the CA issued a temporary restraining order.
Pharmawealth again filed a motion to dismiss, alleging that the patent, the main
basis of the case, had already lapsed, thus making the case moot, and that the CA
had no jurisdiction to review the order of the IPO-BLA because this was granted to
the Director General. The CA denied all the motions. Pharmawealth filed a petition
for review on Certiorari with the Supreme Court.

Issues:
a) Can an injunctive relief be issued based on an action of patent infringement when
the patent allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal
Affairs of the Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly different
causes of action and yet pray for the same relief?

Held:

a) No. The provision of R.A. 165, from which the Pfizer’s patent was based, clearly
states that "[the] patentee shall have the exclusive right to make, use and sell the
patented machine, article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of the Philippines for the
term of the patent; and such making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent."
Clearly, the patentee’s exclusive rights exist only during the term of the patent. Since
the patent was registered on 16 July 1987, it expired, in accordance with the
provisions of R.A. 165, after 17 years, or 16 July 2004. Thus, after 16 July 2004,
Pfizer no longer possessed the exclusive right to make, use, and sell the products
covered by their patent. The CA was wrong in issuing a temporary restraining order
after the cut-off date.

b) According to IP Code, the Director General of the IPO exercises exclusive


jurisdiction over decisions of the IPO-BLA. The question in the CA concerns an
interlocutory order, and not a decision. Since the IP Code and the Rules and
Regulations are bereft of any remedy regarding interlocutory orders of the IPO-BLA,
the only remedy available to Pfizer is to apply the Rules and Regulations
suppletorily. Under the Rules, a petition for certiorari to the CA is the proper remedy.
This is consistent with the Rules of Court. Thus, the CA had jurisdiction.

c) Yes. Forum shopping is defined as the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum (other than by appeal or the special civil action
of certiorari), or the institution of two (2) or more actions or proceedings grounded
on the same cause on the supposition that one or the other court would make a
favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such parties
that represent the same interests in both actions; (b) identity of rights asserted and
reliefs prayed for, the reliefs being founded on the same facts; (c) identity of the two
preceding particulars, such that any judgment rendered in the other action will,
regardless of which party is successful, amount to res judicata in the action under
consideration. This instance meets these elements.

The parties are clearly identical. In both the complaints in the BLA-IPO and RTC,
the rights allegedly violated and the acts allegedly violative of such rights are
identical, regardless of whether the patents on which the complaints were based are
different. In both cases, the ultimate objective of Pfizer was to ask for damages and
to permanently prevent Pharmawealth from selling the contested products.
Relevantly, the Supreme Court has decided that the filing of two actions with the
same objective, as in this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC
cases, a decision in one case will necessarily amount to res judicata in the other
action.

5. Kabushi Kaisha Isetan vs IAC (GR No. 75420, November 15, 1991)
VALENZUELA

KABUSHI KAISHA ISETAN vs. THE INTERMEDIATE APPELLATE COURT


G.R. No. L-75420, November 15, 1991
FACTS:
Petitioner is the registered owner of the trademark "Isetan" and the "Young
Leaves Design" in Japan and applied for the registration in the Philippines. Private
respondent, on the other hand, registered, "Isetann Department Store, Inc." and
Isetann and Flower Design. Petitioner filed for cancellation of the latter’s
certificates for supplemental registration with the Phil. Patent Office alleging that
its act of registering a trademark which is exactly the same as its trademark and
adopting a corporate name similar to that of the petitioner will cause a great and
irreparable injury and damage to it because their goods move in the same channels
of trade, and ordinary people will be misled to believe that the products of the
private respondent are associated with the petitioner’s by reason of the use of the
challenged trademark. It also invoked the Convention of Paris of for the Protection
of Industrial Property of which the Philippines and Japan are both members. The
petitioner stressed that the Philippines' adherence to the Paris Convention
committed to the government to the protection of trademarks belonging not only to
Filipino citizens but also to those belonging to nationals of other member countries
who may seek protection in the Philippines.
Meanwhile, when the petitioner filed with the SEC a petition to cancel the
mark "ISETAN" as part of the registered corporate name of private respondent but
was denied by the Commission. Such decision was submitted to the Director of
Patents as part of the evidence for the private respondent, which led to an order of
the latter rendering Respondent's Certificate of Supplemental Registration in full
force and effect. The petitioner appealed the matter to the Intermediate Appellate
Court (now CA) but however dismissed by the latter on the sole ground of late
filing.

ISSUE:
1. Whether or not the IAC correctly rejected the appeal on the sole ground of late
filing
2. Whether or not origination of a tradename gives exclusive right to its use.

HELD:
1. Yes. Not only was the appeal filed late in the Court of Appeals, the petition for
review was also filed late with the Supreme Court. In common parlance, the
petitioner's case is "twice dead" and may no longer be reviewed. Perfection of an
appeal within the time provided by law is jurisdictional, and failure to observe the
period is fatal. The decision of the Patent Office has long become final and
executory. So has the Court of Appeal decision. Regarding the petitioner's claims
of substantial justice which led us to give due course, we decline to disturb the
rulings of the Patent Office and the Court of Appeals.

2. No. A fundamental principle of Philippine Trademark Law is that actual use in


commerce in the Philippines is a pre-requisite to the acquisition of ownership over
a trademark or a tradename. Adoption alone of a trademark would not give
exclusive right thereto. Such right grows out of their actual use. For trademark is a
creation of use. In fact, a prior registrant cannot claim exclusive use of the
trademark unless it uses it in commerce. The records show that the petitioner has
never conducted any business in the Philippines nor promoted its tradename or
trademark in the Philippines. It has absolutely no business goodwill in the
Philippines. It is unknown to Filipinos except the very few who may have noticed it
while travelling abroad. It has never paid a single centavo of tax to the Philippine
government. Under the law, it has no right to the remedy it seeks.
The Paris Convention clearly indicated the conditions which must exist
before any trademark owner can claim and be afforded rights such as the Petitioner
herein seeks and those conditions are that: must be internationally known or well
known; subject of the right must be a trademark; must be for use in the same or
similar kinds of goods; and the person claiming must be the owner of the mark.
The respondent registered its trademark in 1979. It has continuously used that
name in commerce. It has established a goodwill through extensive advertising.
The people who buy at Isetann Store do so because of Isetann's efforts. There is
no showing that the Japanese firm's registration in Japan or Hongkong has any
influence whatsoever on the Filipino buying public.

6. Emerald Garment vs CA (GR No. 100098, December 29, 1995) QUIDILLA

Facts: On 18 September 1981, private respondent H.D. Lee Co., Inc., a foreign
corporation organized under the laws of Delaware, U.S.A., filed with the Bureau of
Patents, Trademarks & Technology Transfer (BPTTT) a Petition for Cancellation
of Registration No. SR 5054 (Supplemental Register) for the trademark
"STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks, briefs, jackets,
jogging suits, dresses, shorts, shirts and lingerie under Class 25, issued on 27
October 1980 in the name of petitioner Emerald Garment Manufacturing
Corporation, a domestic corporation organized and existing under Philippine laws.
The petition was docketed as Inter Partes Case No. 1558.1
Private respondent, invoking Sec. 37 of R.A. No. 166 (Trademark Law) and Art.
VIII of the Paris Convention for the Protection of Industrial Property, averred that
petitioner's trademark "so closely resembled its own trademark, 'LEE' as previously
registered and used in the Philippines, and not abandoned, as to be likely, when
applied to or used in connection with petitioner's goods, to cause confusion,
mistake and deception on the part of the purchasing public as to the origin of the
goods."

Issue: WON the use of the Stylistic Mr.Lee constitutes trademark infringement

Ruling. No. In determining whether the trademarks are confusingly similar, a


comparison of the words is not the only determinant 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. "LEE" is primarily a surname. Private
respondent cannot, therefore, acquire exclusive ownership over and singular use
of said term.
. . . It has been held that a personal name or surname may not be monopolized as
a trademark or tradename as against others of the same name or surname. For in
the absence of contract, fraud, or estoppel, any man may use his name or surname
in all legitimate ways. Thus, "Wellington" is a surname, and its first user has no
cause of action against the junior user of "Wellington" as it is incapable of exclusive
appropriation. Further, It would seem quite clear that adoption alone of a trademark
would not give exclusive right thereto. Such right "grows out of their actual use."
Adoption is not use. One may make advertisements, issue circulars, give out price
lists on certain goods; but these alone would not give exclusive right of use. For
trademark is a creation of use. The underlying reason for all these is that
purchasers have come to understand the mark as indicating the origin of the
wares. Flowing from this is the trader's right to protection in the trade he has built
up and the goodwill he has accumulated from use of the trademark. Registration
of a trademark, of course, has value: it is an administrative act declaratory of a pre-
existing right. Registration does not, however, perfect a trademark right. 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 Philippines46 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. 47Similarly, we give little weight to the numerous
vouchers representing various advertising expenses in the Philippines for "LEE"
products. 48 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 1981.49
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.

7. Del Monte vs CA (GR No. L-78325, January 23, 1990) QUIDILLA

Facts: Petitioner Del Monte Corporation is a foreign company organized under the
laws of the United States and not engaged in business in the Philippines. Petitioner
Philippine Packing Corporation (Philpack) is a domestic corporation duly organized
under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack
the right to manufacture, distribute and sell in the Philippines various agricultural
products, including catsup, under the Del Monte trademark and logo. Respondent
Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration
by the Bureau of Domestic Trade on April 17,1980, to engage in the manufacture,
packing, distribution and sale of various kinds of sauce, identified by the logo
Sunshine Fruit Catsup. Having received reports that the private respondent was
using its exclusively designed bottles and a logo confusingly similar to Del Monte's,
Philpack warned it to desist from doing so on pain of legal action. Thereafter,
claiming that the demand had been ignored, Philpack and Del Monte filed a
complaint against the private respondent for infringement of trademark and unfair
competition.

Issue: Whether or not respondent is guilty of infringement.

Ruling: Yes. As previously stated, the person who infringes a trade mark does not
normally copy out but only makes colorable changes, employing enough points of
similarity to confuse the public with enough points of differences to confuse the
courts. What is undeniable is the fact that when a manufacturer prepares to
package his product, he has before him a boundless choice of words, phrases,
colors and symbols sufficient to distinguish his product from the others. When as
in this case, Sunshine chose, without a reasonable explanation, to use the same
colors and letters as those used by Del Monte though the field of its selection was
so broad, the inevitable conclusion is that it was done deliberately to deceive.

It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule
that as between a newcomer who by the confusion has nothing to lose and
everything to gain and one who by honest dealing has already achieved favor with
the public, any doubt should be resolved against the newcomer inasmuch as the
field from which he can select a desirable trademark to indicate the origin of his
product is obviously a large one.

8. 246 Corporation vs Daway (GR No. 157216, November 20, 2003) RAQUION

[G.R. No. 157216. November 20, 2003]


246 CORPORATION vs. HON. REYNALDO B. DAWAY
FACTS:
On November 26, 1998, respondents Montres Rolex S.A. and Rolex Centre Phil.,
Limited, owners/proprietors of Rolex and Crown Device, filed against petitioner 246
Corporation the instant suit for trademark infringement and damages with prayer
for the issuance of a restraining order or writ of preliminary injunction before the
RTC of Quezon City, Branch 90. Respondents alleged that sometime in July 1996,
petitioner adopted and, since then, has been using without authority the mark
Rolex in its business name Rolex Music Lounge as well as in its newspaper
advertisements as Rolex Music Lounge, KTV, Disco & Party Club. Petitioner
argued that respondents have no cause of action because no trademark
infringement exists as no confusion would arise from the use by petitioner of the
mark Rolex considering that its entertainment business is totally unrelated to the
items catered by respondents such as watches, clocks, bracelets and parts
thereof. Petitioner filed a motion for preliminary hearing on its affirmative defenses.
Subsequently, on motion of petitioner, the trial court issued a subpoena ad
testificandum requiring Atty. Alonzo Ancheta to appear at the preliminary hearing.
Respondents, in the meantime, filed a Comment and Opposition to the motion for
preliminary hearing and a motion to quash the subpoena ad testificandum. In an
Order dated October 27, 2000, the trial court quashed the subpoena ad
testificandum and denied petitioners motion for preliminary hearing on affirmative
defenses with motion to dismiss. With the denial of the motion for reconsideration,
petitioner filed a petition for certiorari with the Court of Appeals contending that the
trial court gravely abused its discretion in issuing the order, which was
subsequently denied.

ISSUE:
Whether or not trademark infringement may exist even when contending parties
deal with goods and services that are totally unrelated and non-competing with
each other.

HELD:
Yes. Under the old Trademark Law where the goods for which the identical marks
are used are unrelated, there can be no likelihood of confusion and there is
therefore no infringement in the use by the junior user of the registered mark on
the entirely different goods. This ruling, however, has been to some extent,
modified by Section 123.1(f) of the Intellectual Property Code (Republic Act No.
8293). A junior user of a well-known mark on goods or services which are not
similar to the goods or services, and are therefore unrelated, to those specified in
the certificate of registration of the well-known mark is precluded from using the
same on the entirely unrelated goods or services when the mark is well-known
internationally and in the Philippines subject to the criteria under Rule 102 of the
Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked
or Stamped Containers, that the use of the well-known mark on the entirely
unrelated goods or services would indicate a connection between such unrelated
goods or services and those goods or services specified in the certificate of
registration in the well known mark and that the interests of the owner of the well-
known mark are likely to be damaged. Section 123.1(f) is clearly in point because
the Music Lounge of petitioner is entirely unrelated to respondents business
involving watches, clocks, bracelets, etc. However, the Court cannot resolve the
merits of the present controversy considering that the requisites for the application
of Section 123.1(f), which constitute the kernel issue at bar, clearly require
determination facts of which need to be resolved at the trial court. The existence
or absence of these requisites should be addressed in a full blown hearing and not
on a mere preliminary hearing. The respondent must be given ample opportunity
to prove its claim, and the petitioner to debunk the same.

9. Pearl & Dean vs Shoemart (GR No. 148222, August 15, 2003) BARENG

PEARL & DEAN (PHIL.), INC. vs SHOEMART, INC


GR No. 148222 (August 15,2003)
Trademarks and Unfair Competition: Doctrine of Secondary Meaning

FACTS:
Pearl and Dean is a corporation engaged in the manufacture of advertising
display units referred to as light boxes and these light boxes were marketed under
the trademark Poster Ads. Pearl and Dean entered into a contract with Shoemart,
Inc. for the lease and installation of the light boxes in SM North Edsa. However,
due to construction constraints, Shoemart, Inc offered as an alternative SM Makati
and SM Cubao.
After Pearl and Dean’s contract was rescinded, exact copies of its light
boxes were installed in various SM malls, fabricated by Metro Industrial Services
and later by EYD Rainbow Advertising Corporation. Pearl and Dean sent a letter
to Shoemart and its sister company, North Edsa Marketing to cease using the light
boxes and to remove them from the malls, and demanded the discontinued used
of the trademark “Poster Ads”.
Unsatisfied with the compliance of its demands, Pearl and Dean sued
Shoemart which was ruled by the trial court in their favor. On appeal, however, the
Court of Appeals reversed the trial court’s decision.

ISSUE:
Whether Pearl and Dean’s copyright registration for its light boxes and the
trademark registration of “Poster Ads” preclude Shoemart and North Edsa
Marketing from using the same.

HELD: No, Pearl and Dean secured its copyright under the classification class “o”
work. This being so, its protection extended only to the technical drawings and not
to the light box itself. Pearl and Dean cannot exclude others from the manufacture,
sale and commercial use over the light boxes on the sole basis of its copyright,
certificated over the technical drawings. It cannot be the intention of the law that
the right of exclusivity would be granted for a longer time through the simplified
procedure of copyright registration with the National Library, without the rigor of
defending the patentability of its “invention” before the IPO and the public.
On the other hand, there has been no evidence that Pearl and Dean’s use
of “Poster Ads” was distinctive or well known. “Poster Ads” was too generic a name
to identify it to a specific company or entity. “Poster Ads” was generic and
incapable of being used as a trademark because it was used in the field of poster
advertising, the very business engaged by Pearl and Dean. Furthermore, Pearl
and Dean’s exclusive right to the use of “Poster Ads” is limited to what is written in
its certificate of registration. Shoemart cannot be held liable for the infringement of
the trademark.

10. Nestle vs CC (GR No. 112012, April 4, 2001) LLAPITAN

11. McDonald’s vs McJoy (GR No. 166115, February 2, 2007) ALEJANDRO


(ALVAREZ)
Facts:
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. Petitioner McDonalds
Corporation, a corporation duly organized and existing under the laws of the State
of Delaware, USA, filed a verified Notice of Opposition[3] 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. Further, petitioner said that respondemt acted in bad faith. These
allegations were denied by respondent. The IPO decided in favor of McDonalds.
Finding no confusing similarity between the marks MACJOY and MCDONALDS,
the CA, in its herein assailed Decision dated July 29, 2004, reversed and set aside
the appealed IPO decision and order.

Issue: whether there is a confusing similarity between the MCDONALDS marks of


the petitioner and the respondents MACJOY & DEVICE trademark

Ruling:
In determining similarity and likelihood of confusion, jurisprudence has developed
two tests, the dominancy test and the holistic test. The dominancy test focuses on
the similarity of the prevalent features of the competing trademarks that might
cause confusion or deception. 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. Under the latter test, a
comparison of the words is not the only determinant factor. The Court has
consistently used and applied the dominancy test in determining confusing
similarity or likelihood of confusion between competing 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. 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.

12. ABS CBN vs Gozon, et.al. (GR No. 195956, March 11, 2015) ALVAREZ
Facts:
The controversy arose from GMA-7's news coverage on the homecoming of
Filipino overseas worker and hostage victim Angelo dela Cruz on July 22, 2004.
ABS-CBN "conducted live audio-video coverage of and broadcasted the arrival of
Angelo dela Cruz at the Ninoy Aquino International Airport (NAIA) and the
subsequent press conference."8 ABS-CBN allowed Reuters Television Service
(Reuters) to air the footages it had taken earlier under a special embargo
agreement.
ABS-CBN alleged that under the special embargo agreement, any of the
footages it took would be for the "use of Renter's international subscribers only,
and shall be considered and treated by Reuters under 'embargo' against use by
other subscribers in the Philippines. . . . [N]o other Philippine subscriber of Reuters
would be allowed to use ABS-CBN footage without the latter's consent."
GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela Peña-Reyes, and
Manalastas are connected, "assigned and stationed news reporters and technical
men at the NAIA for its live broadcast and non-live news coverage of the arrival of
dela Cruz."11 GMA-7 subscribes to both Reuters and Cable News Network (CNN).
It received a live video feed of the coverage of Angelo dela Cruz's arrival from
Reuters.
GMA-7 immediately carried the live newsfeed in its program "Flash Report,"
together with its live broadcast.13 Allegedly, GMA-7 did not receive any notice or
was not aware that Reuters was airing footages of ABS-CBN.14 GMA-7's news
control room staff saw neither the "No Access Philippines" notice nor a notice that
the video feed was under embargo in favor of ABS-CBN.15
ABS-CBN filed the Complaint for copyright infringement under Sections 17716 and
21117 of the Intellectual Property Code.18

Issue:
whether there is probable cause to charge respondents with infringement under
Republic Act No. 8293, otherwise known as the Intellectual Property Code.

Held:
The news footage is copyrightable. The Intellectual Property Code is clear about
the rights afforded to authors of various kinds of work. Under the Code, "works are
protected by the sole fact of their creation, irrespective of their mode or form of
expression, as well as of their content, quality and purpose." These include "[audio-
visual works and cinematographic works and works produced by a process
analogous to cinematography or any process for making audiovisual recordings."
Contrary to the old copyright law, the Intellectual Property Code does not
require registration of the work to fully recover in an infringement suit.
Nevertheless, both copyright laws provide that copyright for a work is acquired by
an intellectual creator from the moment of creation.
It is true that under Section 175 of the Intellectual Property Code, "news of
the day and other miscellaneous facts having the character of mere items of press
information" are considered unprotected subject matter. However, the Code does
not state that expression of the news of the day, particularly when it underwent a
creative process, is not entitled to protection.
News or the event itself is not copyrightable. However, an event can be
captured and presented in a specific medium. As recognized by this court in
Joaquin, television "involves a whole spectrum of visuals and effects, video and
audio." News coverage in television involves framing shots, using images,
graphics, and sound effects. It involves creative process and originality. Television
news footage is an expression of the news.
Copyright is not primarily about providing the strongest possible protection
for copyright owners so that they have the highest possible incentive to create
more works. The control given to copyright owners is only a means to an end: the
promotion of knowledge and learning. Achieving that underlying goal of copyright
law also requires access to copyrighted works and it requires permitting certain
kinds of uses of copyrighted works without the permission of the copyright owner.

13. Shang Properties Realty Corporation vs St. Francis Development Corporation


(GR No. 190706, July 21, 2014) CALILAO

14. In-n-out Burger, Inc. vs Sehwani Incorporated (GR No. 179127, December 24,
2008) AGUSTIN

Facts
Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated
under the laws of California. It is a signatory to the Convention of Paris on
Protection of Industrial Property and the TRIPS Agreement. It is engaged mainly
in the restaurant business, but it has never engaged in business in the Philippines.
Respondents Sehwani, Incorporated and Benita Frites, Inc. are
corporations organized in the Philippines. Sometime in 1991, Sehwani filed with
the BPTTT an application for the registration of the mark “IN N OUT (the inside of
the letter “O” formed like a star). Its application was approved and a certificate of
registration was issued in its name on 1993. In 2000, Sehwani, Incorporated and
Benita Frites, Inc. entered into a Licensing Agreement, wherein the former entitled
the latter to use its registered mark, “IN N OUT.”
Sometime in 1997, In-N-Out Burger filed trademark and service mark
applications with the Bureau of Trademarks for the “IN-N-OUT” and “IN-N-OUT
Burger & Arrow Design. In 2000, In-N-Out Burger found out that Sehwani,
Incorporated had already obtained Trademark Registration for the mark “IN N OUT
(the inside of the letter “O” formed like a star).” Also in 2000, In-N-Out Burger sent
a demand letter directing Sehwani, Inc. to cease and desist from claiming
ownership of the mark “IN-N-OUT” and to voluntarily cancel its trademark
registration. Sehwani Inc. did not accede to In-N-Out Burger’s demand but it
expressed its willingness to surrender its registration for a consideration.
In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an
administrative complaint against the Sehwani, Inc. and Benita Frites, Inc. for unfair
competition and cancellation of trademark registration.
Issues:
Whether or not the Intellectual Property Office (an administrative body) have
jurisdiction of cases involving provisions of the IPC (e.g. unfair competition).[1]
Whether or not there was unfair competition.

Held:

FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases
involving provisions of the IPC (e.g. unfair competition) due to the following
reasons:
Section 10 of the Intellectual Property Code specifically identifies the
functions of the Bureau of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.“The Bureau of Legal Affairs shall
have the following functions:

10.1 Hear and decide opposition to the application for registration of marks;
cancellation of trademarks; subject to the provisions of Section 64,
cancellation of patents and utility models, and industrial designs; and
petitions for compulsory licensing of patents;

10.2 (a) Exercise original jurisdiction in administrative complaints for


violations of laws involving intellectual property rights; Provided, That its
jurisdiction is limited to complaints where the total damages claimed are not
less than Two hundred thousand pesos (P200,000): Provided, futher, That
availment of the provisional remedies may be granted in accordance with
the Rules of Court.
(vi) The cancellation of any permit, license, authority, or registration which
may have been granted by the Office, or the suspension of the validity
thereof for such period of time as the Director of Legal Affairs may deem
reasonable which shall not exceed one (1) year;
(viii) The assessment of damages;
Unquestionably, petitioner’s complaint, which seeks the cancellation of the
disputed mark in the name of respondent Sehwani, Incorporated, and damages for
violation of petitioner’s intellectual property rights, falls within the jurisdiction of the
IPO Director of Legal Affairs.
While Section 163 thereof vests in civil courts jurisdiction over cases of unfair
competition, nothing in the said section states that the regular courts have sole
jurisdiction over unfair competition cases, to the exclusion of administrative bodies.
Sections 160 and 170, which are also found under Part III of the Intellectual
Property Code, recognize the concurrent jurisdiction of civil courts and the IPO
over unfair competition cases.
These two provisions read:
Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark
Enforcement Action. Any foreign national or juridical person who meets the
requirements of Section 3 of this Act and does not engage in business in the
Philippines may bring a civil or administrative action hereunder for opposition,
cancellation, infringement, unfair competition, or false designation of origin and
false description, whether or not it is licensed to do business in the Philippines
under existing laws.
Section 170. Penalties. Independent of the civil and administrative sanctions
imposed by law, a criminal penalty of imprisonment from two (2) years to five (5)
years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred
thousand pesos (P200,000), shall be imposed on any person who is found guilty
of committing any of the acts mentioned in Section 155, Section168, and
Subsection169.1.
Based on the foregoing discussion, the IPO Director of Legal Affairs had
jurisdiction to decide the petitioner’s administrative case against respondents and
the IPO Director General had exclusive jurisdiction over the appeal of the judgment
of the IPO Director of Legal Affairs.

SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and
Benita Frites were not using their registered trademark but that of In-n-Out Burger.
Sehwani and Benita Frites are also giving their products the general appearance
that would likely influence the purchasers to believe that their products are that of
In-N-Out Burger. The intention to deceive may be inferred from the similarity of the
goods as packed and offered for sale, and, thus, an action will lie to restrain unfair
competition. The respondents’ frauduulent intention to deceive purchasers is also
apparent in their use of the In-N-Out Burger in business signages.
The essential elements of an action for unfair competition are (1) confusing
similarity in the general appearance of the goods and (2) intent to deceive the
public and defraud a competitor. The confusing similarity may or may not result
from similarity in the marks, but may result from other external factors in the
packaging or presentation of the goods. The intent to deceive and defraud may be
inferred from the similarity of the appearance of the goods as offered for sale to
the public. Actual fraudulent intent need not be shown.

15. Coca-Colas Bottlers, Phils. Inc. vs Gomez (GR No. 154491, November 14, 2008)
TABANGAY

16. Jessie Ching vs Salinas (GR No. 161295, June 29, 2005) RIVERAL

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