Etepha vs Director of Patents

FACTS: 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 Liechtenstein (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.

ISSUE: May trademark ATUSSIN be registered, given the fact that PERTUSSIN, another trademark, had
been previously registered in the Patent Office?

HELD: YES. We concede the possibility that buyers might be able to obtain Pertussin or Atussin without
prescription. When this happens, then the buyer must be one thoroughly 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 below, the appealed decision of respondent Director of Patents, — giving due course
to the application for the registration of trademark ATUSSIN, is hereby affirmed.

1.TRADEMARKS; OBJECTS OF. — The objects of a trademark are to point out distinctly the origin or
ownership of the article to which it is affixed, to secure to him who has been instrumental in bringing into
market a superior article of merchandise the fruit of his industry and skill, and to prevent fraud and
imposition.

2.ID.; INFRINGEMENT OF TRADEMARKS; “COLORABLE IMITATION” EXPLAINED. — 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.” (87 C.J.S., p. 287.)

3.ID.; ID.; MARK BARRED FROM REGISTRATION; WORD “TUSSIN”, HOW MAY IT BECOME SUBJECT OF
TRADEMARK. — “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. But 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”. (Annotations,
Lawyers’ Reports, Annotated, 1918 A, p. 966.)

4.ID.; ID.; SIMILARITY AND DISSIMILARITY OF TRADEMARKS. HOW DETERMINED. — 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 prospective buyer. The
trademark complained of should be cmpared and contrasted with the purchaser’s memory (not in
juxtaposition) of the trade mark said to be infringed. (87 C.J.S., pp. 288-291) 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, (87 C.J.S.,
pp. 291-292.) For, indeed, trademark infringement is a form of unfair competition. (Clarke vs. Manila
Candy Co., 36 Phil. 100, 106; Co Tiong Sa vs. Director of Patents, 95 Phil., 1, 4,)

5.ID.; ID.; WHEN THERE IS CONFUSION BETWEEN TRADEMARK. — Confusion is likely between trademarks
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.

6.ID.; ID.; “PERTUSSIN” AND “ATUSSIN” COMPARED. — Considering the two labels in question — Pertussin
and Atussin — as they appear on the respective labels, 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.
Moreover, the two words do not sound alike — when pronounced. There is not as much as phonetic
similarity between the two. 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 word starts
with the single letter A added to the suffix “tussin”. Appeals to the ear are dissimilar. And this, because in
a word- combination, the part that comes first is the most pronounced.

7.ID.; ID.; SOLUTION OF TRADEMARK INFRINGEMENT; CLASS OF PERSONS WHO BUY SHOULD BE
CONSIDERED. — 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. (87 C.J.S., p. 295). The medicinal preparations, clothed with the trade marks 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. An intending buyer must have to go first to a licensed doctor of
medicine; he receives instructions as to what to purchase; he examines the product sold to him; he checks
to find out whether it conforms to the medical prescription. Similarly, the pharmacist or druggist verifies
the medicine sold. The margin of error in the acquisition of one for the other is quite remote. It is possible
that buyers might be able to obtain Pertussin or Atussin without prescription. When this happens, then
the buyer must be one thoroughly 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. For a person who purchases
with open eyes is hardly the man to be deceived.
Des Produits Nestle vs Dy

Facts:

Petitioner Nestle, a Swiss corporation, owns the ‘NAN’ trademark for its line of infant powdered milk
products in the Philippines. Respondent Dy, Jr. on the other hand, owner of 5M Enterprises, imports and
repacks powdered milk for adults bearing the mark ‘NANNY.’ Petitioner Nestle filed before the trial court
an infringement complaint against respondent. The trial court held that respondent’s trademark is an
infringement to petitioner’s mark because it would imply that respondent’s ‘NANNY’ product came from
petitioner. CA reversed and held that the two marks are not confusingly similar thus respondent cannot
be held liable for infringement.

Issue:

Whether or not respondent is liable for trademark infringement.

Ruling: YES.

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) The trademark is used for identical or similar
goods; and (d) Such act is done without the consent of the trademark registrant or assignee.

On the other hand, the elements of infringement under R.A. No. 8293 are as follows: (a) The trademark
being infringed is registered in the Intellectual Property Office; however, in infringement of trade name,
the same need not be registered; (b) The trademark or trade name is reproduced, counterfeited, copied,
or colorably imitated by the infringer; (c) 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; (d) 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 (e) It is without the consent of the trademark or trade name owner or the assignee
thereof.

Among the elements, the element of likelihood of confusion is the gravamen of trademark infringement.
Applying the dominancy test in the present case, the Court finds that “NANNY” is confusingly similar to
“NAN.” “NAN” is the prevalent feature of Nestle’s line of infant powdered milk products. It is written in
bold letters and used in all products. The line consists of PRE-NAN, NAN-H.A., NAN-1, and NAN-2. Clearly,
“NANNY” contains the prevalent feature “NAN.” The first three letters of “NANNY” are exactly the same
as the letters of “NAN.” When “NAN” and “NANNY” are pronounced, the aural effect is confusingly similar.
THE ALHAMBRA CIGAR AND CIGARETTE MANUFACTURING CO., plaintiff-appellant, vs. COMPAÑIA
GENERAL DE TABACOS DE FILIPINAS, defendant-appellee.

G.R. No. L-11490 October 14, 1916

JOHNSON, J.:

Overview:

The only question presented by this appeal is whether or not the defendant is guilty of unfair competition
in the manufacture and sale of a certain cigar. The plaintiff attempted to show that the defendant was
guilty of a violation of section 7 of Act No. 666 of the Philippine Commission, and claimed that it had been
damaged in the sum of P20,000, and prayed for a permanent injunction to restrain the defendant from
the further manufacture or sale of the cigars alleged to have been made in imitation of a cigar
manufactured by the plaintiff, and for an accounting.

Upon the issues presented the lower court reached the conclusion that the defendant was not guilty of a
violation of said Act and absolved it from all liability under the complaint.

Facts:

The plaintiff and defendant are corporations engaged in manufacturing products of tobacco in the city of
Manila. The plaintiff alleged that it had engaged in manufacturing Especiales Alhambra, since the year
1906; that these cigars are made of superior quality of tobacco on which is imprinted in gold color the
word Especiales Alhambra; that the cigars are packed with distinguishable labels and marks; that the
cigars present a very definite appearance; that the plaintiff had extensively advertised the said cigar as
"The little brown label cigar." The plaintiff further alleged that the cigars had acquired a reputation for
their excellence and had been a source of great profit. It was alleged that three months preceding the
filing of the complaint (July 19, 1915) the defendant, "in disregard of plaintiff's rights and with intent to
deceive the public and defraud the plaintiff," had soles and was selling a cigar "made in similar form, size,
and appearance and in simulation of plaintiff's said cigar: that defendant's cigar was named Especiales,
and is "encircled with a brown collared band, with the words 'Especiales Isabela,' printed in gold letters
upon it. Hence the action against the defendant.

Said section 7 of Act No. 666, for the alleged violation of which the present action was instituted, provides:

Any person who in selling his goods shall give them the general appearance of goods of another
manufacturer or dealer, either 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, and who clothes the goods with such appearance for the purpose of deceiving
the public and defrauding 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, shall be guilty of unfair competition,
and shall be liable to an action for damages, in which the measure shall be the same as that provided for
a violation of trade-mark rights, together with discretionary power in the court to impose double
damages, if the circumstances call for the same. The injured party may also have a remedy by injunction
similar to that provided for in cases of violation of trade-marks. xxx
In addition to the oral testimony, the plaintiff presented Exhibits A and B. Exhibit A is a box of cigars which
the plaintiff claims the defendant was attempting to imitate. Exhibit B is a box of cigars which the plaintiff
claims is an imitation of the cigars in Exhibit A and constitutes the infringement or unfair competition
complained of. Exhibits A and B, including the size of the box, labels, etc., are as follows:

The lower court, after an examination of the evidence, states in the course of his opinion:

There certainly is not sufficient similarity to justify the inference of actual intent on defendant's part to
deceive the public and defraud a competitor, and this is an essential element of unfair competition.

Issue:

Whether or not the defendant was guilty of violation of Section 7 of Act No. 666

Held:

No. An action for unfair competition is distinguished from an action for a violation of technical trade-
marks and is based upon the proposition that no dealer in merchandise should be allowed to dress his
goods in simulation of the goods of another dealer, so that purchasers desiring to buy the goods of the
latter would be induced to buy the goods of the former. The policy of the law is not to prevent competition
but to prevent deceit and fraud. A merchant is entitled to the fruits of his reputation and his ingenuity
and no other merchant will be allowed to simulate the appearance of the goods of the former, for the
purpose of taking advantage his reputation and ingenuity in business. The law does not, however pretend
to prohibit or enjoin every similarity. The similarity must be such that the ordinary purchaser will be
deceived into the belief that the goods are those of another. It must be a "similarity in the general
appearance," or in the goods "taken as a whole." (Alhambra Cigar, etc., Co. vs. Mojica, 27 Phil. Rep., 566;
Coats vs. Merrick Thread Company, 149 U. U., 562; Enoch Morgan's Sons Company vs. Peper, 86 Fed. REp.,
956.) It frequently happens that goods of a particular class are labeled by all manufacturers in a common
manner. In cases of that sort, no manufacturer may appropriate to himself the method of labeling or
packing his merchandise and then enjoin other merchants from using it.

In the case of Coats vs. Merrick Thread Company, supra, the question presented to the court was with
regard to the similarity of the labels on spools of thread. The labels of both parties were black and gold,
with the name of the manufacturer, kind of thread, and the number of the thread stamped upon it. These
labels were small and were attached to the end of the spools. The court found that the small black and
gold labels was in common use among manufacturers of that quality of thread. The court held, that in
view of the limited space upon the label, and in view of the common right to use such label, the defendants
were fully within their rights.

With reference to Exhibits A and B, upon a close examination some points of resemblance may possibly
be found. A casual examination, however, shows clearly that there is an essential and marked difference.
The allegation of unfair competition, however, can not be based upon the fact that by a close examination
a similarity may be found. The similarity or simulation must be use as to defraud and deceive the
purchaser into the belief that he is purchasing the goods of one person believing them to be the goods of
another. The question is whether, taking the defendant's package and label as a whole, it so far copies or
resembles the plaintiff's package and label, that a person of ordinary intelligence would be misled into
buying the one supposing he was buying the other. No inflexible definition can be given as to what will
constitute unfair competition. Each case must depend upon its own particular facts.
The resemblance spoken of in the law of unfair competition is a resemblance in the general appearance
of the goods, in the wrapping of the packages, or in the devices or words thereon, or in any other feature
of their appearance which would be likely to deceive purchasers. It is not enough for the plaintiff's cause
that in certain details there may be discovered something of similarity, provided that in the general
appearance there is a decided dissimilarity. Nor is it enough to save the defendant that experts, on
examination, can point to differences in details of the component parts of the markings or wrappings.

Summing it all up, while there are certain minor points of resemblance which have been forcibly urged
upon our attention by the counsel for plaintiff, yet, looking at the two packages with their labels, — taking
the tout ensemble— it appears to us clear that they are so essentially different that no one of ordinary
intelligence, desiring to buy the one kind of tobacco, would be misled into buying a package of the other.

In the present case there is no proof in the record that any persons had been deceived into purchasing
the cigars of the defendant, believing that he was purchasing the cigars of the plaintiff. There is no proof
that any person or persons were actually deceived.

As has been stated in effect, any one who sells goods packed, or labeled, or otherwise prepared in such a
manner to induce intending purchasers to believe that the goods are of a make or origin other than the
true, or who clothes his goods with a certain appearance for the purpose of deceiving the public, is
deemed guilty of unfair competition as defined in section 7 of Act No. 666. (Brook Bros. vs. Froelich &
Kuttner, 8 Phil. Rep., 580.) The true test of unfair competition is whether certain goods have been
intentionally clothed with an appearance which is likely to deceive the ordinary purchaser, exercising
ordinary care, and not whether a certain limited class of purchasers, with special knowledge not possessed
by the ordinary purchaser, could avoid a mistake by the exercise of this special knowledge. (U. S. vs.
Manuel, 7 Phil. Rep., 221; Song Fo & Co. vs. Tiu Ca Siong, 13 Phil. Rep., 143; Inchausti & Co. vs. Song Fo &
Co., 21 Phil. Rep., 278; Baxter and Baxter & Co. vs. Zuazua, 5 Phil. Rep., 160; Nelle vs. Baer, Senior & Co.,
5 Phil. Rep., 608.) lawphil.net

Facsimiles of the two rings are in the record before us, and they are so nearly alike in general appearance
that one might pass for the other. These rings so used on cigars are, however, so small, and are necessary
so similar in design and appearance, that we should hesitate to say that actual intent to deceive the public
and defraud a competitor . . . may be inferred from the similarity in the goods.

In view of all of the foregoing and summing up all the arguments pro and con, looking at the two cigars,
with special reference to the rings or bands used by the plaintiff and the defendant, we are convinced
that the two cigars, including their rings or bands, are so essentially different that no one of ordinary
intelligence desiring to buy one would be misled or deceived into buying the other. "It is not enough for
plaintiff's cause that in certain details and upon a close examination there may be discovered something
of a similarity in the general appearance of the cigars, or bands or rings.