Republic of the Philippines INTELLECTUAL PROPERTY OFFICE Bureau of Legal Affairs Upper McKinley Road, BGC, Taguig City

TOKYO TOKYO, INC Opposer,

- versus -

IPC No. 14-2010-000210 Appln. No. 4-2009012600 Date Filed: 8 December 2009 Mark: SHOGUN FRY AND DEVICE Goods: Class 43- Japanese Fest Foods, Take-Out Counter & Restaurants

BRYANT JAMES LAO Respondent-Applicant. x-------------------------------x

POSITION PAPER WITH PETITION FOR THE ISSUANCE OF A WRIT OF INJUNCTION

(For the Opposer)

OPPOSER, through counsel, unto this Honorable Court, most respectfully submits its hereunder Position Paper, in support of its enumerated causes of actions in its Opposition and avers:

PREFATORY STATEMENT

Opposer TOKYO TOKYO, INC. (Tokyo Tokyo) is a corporation duly organized and existing under Philippine Law with office address at Ramcar Building, 80-82 Don A. Roces, Diliman, Quezon City, and has been in the fast food and restaurant business since 1985, marketing and selling a wide variety of Japanese food products through its Tokyo Tokyo Japanese restaurant chain. As such, Opposer has been using the mark SHOGUN since 1992 to promote and market their Japanese fast food, restaurants and products. They extensively promote the use of said mark and subsequently associated the mark SHOGUN with Tokyo Tokyos restaurants and products. Moreover, Tokyo Tokyo has sustained considerable amounts to build substantial goodwill in the SHOGUN mark.

Be as it may, Opposer filed for and is seeking the denial of the application for registration of Respondent-Applicant, Bryant James Lao of the mark Shogun Fry and Device which in the outright, infringes the Trademark rights of the Opposer to the word, SHOGUN.

Consonant to the above, Opposer is entitled to all that it is claiming in the instant proceedings.

STATEMENT OF FACTS

Opposer TOKYO TOKYO, Inc. has been in the fast food restaurant and food business, marketing and selling a wide variety of Japanese food products through its Tokyo Tokyo Japanese restaurant chain. There are over 50 Tokyo Tokyo

restaurants in Metro Manila and in highly urbanized cities in the Philippines. Tokyo Tokyo has in fact become the yardstick for Japanese fast food restaurant operations.

To maintain its stronghold among its consumers, Tokyo Tokyo continues to innovate its products and services, and its unique advertising and marketing campaigns. Tokyo Tokyo conceptualized its strategic sales promotion called

SHOGUN. The SHOGUN campaign was launched in 1992, through the SHOGUN club to promote and market Tokyo Tokyos Japanese fast food restaurants and products. The promotion of SHOGUN was further intensified in 2002, with over Through this extensive campaign, consumers,

45,000 members joining the club.

especially Japanese fast food customers have associated the mark SHOGUN with Tokyo Tokyo Japanese fast food restaurants and products.

On February 27, 2007, Tokyo Tokyo filed an Application for the Registration of the SHOGUN word mark under class 35 (sales, promotions and discount cards), which was granted by this Honorable Office on September 22, 2008.

Tokyo Tokyo has extensively used and continues to use the SHOGUN word mark as an integral part of its business and as part of its advertising and promotional strategies. Tokyo Tokyo has exerted substantial effects and has spent considerable amounts to build and has built substantial goodwill in the SHOGUN mark.

On the other hand, Respondent-applicant, Bryant James G. Lao, is the Sole Proprietor of SHOGUN FRY FOODS. He filed an Application on December 8, 2009 for the registration of Shogun Fry and Device under Class 43 (Japanese Fast Food and Take-Out Counter and Restaurant).

THE CASE

1. Opposer Tokyo Tokyo, Inc. filed an Opposition to the Application for Registration of SHOGUN Fry and Device in the name of respondent -applicant Bryant James Lao on the ground that such registration brings or results to a great damage and prejudice on the part of Tokyo Tokyo; stating its argument based on the widely recognized principle in Intellectual Property Law that a mark

cannot be registered if it is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date in respect of closely related goods or services.

2. Opposer further avers that respondent-applicant mark is identical and confusingly similar with the Opposers SHOGUN word mark in respect of closely related goods. The dominant feature of the applicants mark, i.e. SHOGUN is the very registered word mark of Tokyo Tokyo. Applicants confusing mark is also used in connection with Japanese food- the primary business of Opposer, which will eventually lead to the commission infringement and unfair competition.

3. Opposers Notice of Opposition was questioned for the lack of or inadvertent omission of a verification and is being sought by the Applicant to not be recognized by the Office.

STATEMENT OF THE ISSUES

I.

Whether or not the Applicants use of the Shogun mark will result to confusing similarity between the Tokyo Tokyo and Shogun Fry and Devices products and/or services;

II.

Whether or not unfair competition will ensue due to infringement of Opposers mark by the Applicant;

III.

Whether or not the omission and/or absence of a verification negates and nullifies the Opposers cause and opposition, regardless of the merits of the case; and.

IV.

Whether or not the application for registration of the Applicants Shogun mark should be denied as it not done in good faith but rather tainted with malice and fraudulent intentions and thus, a restraining order or an injunction be issued in favor or the Opposer for the protection of its registered mark from being further exploited by the Applicant.

POSITION OF THE OPPOSER

I.

Confusing Similarity of Marks

The application of the respondent applicant of the mark SHOGUN FRY AND DEVICE will undoubtedly be prejudicial to the mark of the Tokyo Tokyo. While it is true that the mark of the former is being used on Japanese Fast Foods Take out Counter and the mark of the latter is being used on sales promotion and discount cards, these two marks could still be reasonably considered as similar, related, and competitive with each other. Both marks pertain to Japanese fast foods restaurants and products Tokyo Tokyo used the said mark in the promotion of their goods and services while respondent applicant used theirs as a business name. Undeniably, the respondent-applicant mark is identical and confusingly similar with the Oppositors SHOGUN word mark. The word SHOGUN is the very registered word of Tokyo Tokyos mark. The aural and the visual likeness cannot be in any way denied. The prohibition on this type of usage of marks or names is nowhere else better laid down by Sec. 123 (d) (iii) of the Intellectual Property Code, viz: A mark cannot be registered if it: x x x [I]s identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of x x x [Closely related goods or services

The Intellectual Property Code elucidates, further;

Sec. 147.2. The exclusive right of the owner of a well-known 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 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.

II.

On Unfair Competition

The continuous use of Shogun Fry and Device mark by the applicant will tend to mislead the purchasing public that may cause injury of both the Opposer and the public. The applicant Laos Shogun Fry and Device mark will mislead the public into believing that the products marketed and sold by Opposer and the Applicant originate from the same source. Considering the connotation of the two trademarks, it is clear and unmistakable that there is likelihood of confusion on the part of ordinary customers. They are not only similar but they also refer to goods sold within the same channels of trade and industry. This scenario will lead an unknowing and ordinary customer to believe that Opposer may have expanded its business by creating another chain of fast food restaurants/take-out

counters, They may even be misled to use their discount cards while purchasing food at the Applicants establishment; and, the rejection of the latter to honor the discount card that bears the same mark as that of his establishment will eventually create a notion on in the minds of customers that Opposer has just figured a way out of having to honor its discount cards, in a sly and underhanded manner, to the detriment of the Opposers business and reputation.

This argument finds logical basis in the decision of the Supreme Court in Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft , (G.R. No. L-19906) the Court distinguished the 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. In which case, defendants goods are then bought as the plaintiffs, and the poorer quality of the former reflects adversely on the plaintiffs reputation. The other is the confusion of business: here though the goods of the parties are different, the defendants 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.

Tokyo Tokyo has been considerately recognized here in the Philippines with their promotion using SHOGUN by employing advertisements in all kinds of media. Tokyo Tokyo has gained more popularity because of their usage of SHOGUN mark and their customers continually patronized promos contained in the said mark. In short, we can aptly say that SHOGUN mark CARRIED the name of TOKYO TOKYO and vice versa. The subject mark of Opposer is used to promote and REPRESENT TOKYO TOKYO. Applicants mark also covers Japanese fast food and directly competes with the products/restaurants promoted and represented by Opposers SHOGUN mark. Hence, the application of the respondent applicant invades the good reputation that Tokyo Tokyo built for over two decades simply because of mere confusion among the two marks of both parties.

A well-founded principle in determining whether there is colorable imitation of the mark of another is encompassed in the test of Dominancy which focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. 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. 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. [The test of dominancy is now explicitly incorporated into law in Section 155.1 of R.A. No. 8293]

Furthermore, we condone the contention of respondent applicant that SHOGUN and SHOGUN FRY deal with different customers or clients because customers of SHOGUN FRYs clientele are mainly those who would like to buy or dine in while being fully waited on and served by the restaurants crew or employees, while the customers of SHOGUN of Tokyo Tokyo are the people who would like to buy and eat the products included in the promo being served by Tokyo Tokyo, since such is not just without basis but also discriminatory.

III.

On Verification and Certification

It has been held that the absence of verification or the non-compliance with the verification requirement does not necessarily render the pleading defective. It is only a formal and not a jurisdictional requirement. The

requirement is a condition affecting only the form of the pleading (Benguet Corporation vs. Cordillera Caraballo Mission, Inc., 469 SCRA 381; Micro Sales Operation Network vs. NLRC, 472 SCRA 328) and non-compliance therewith does not necessarily render it fatally defective (Sarmiento vs. Zaratan, G.R. No. 167471, February 5, 2007).

The court has consistently held that the requirement regarding verification of a pleading is formal, not jurisdictional. Such requirement is simply a condition affecting the form of the pleading, non-compliance with which does not necessarily under the pleading fatally defective. The court may order the correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attending circumstances are such that strict compliance with the rules may be dispensed with order that the ends of justice may thereby be served. (Bank of Philippine islands vs. C.A. G.R. No. 170625, October 17, 2008).

In De Guia vs. De Guia (356 SCRA 287), the Supreme Court went to the extent of invoking its power to suspend the Rules by disregarding the absence of the certification against forum shopping in the interest of substantial justice.

IV.

On the issue of Registration.

We have to note that even if the word Shogun used by Opposer was conceptualized for its strategic sales promotion, ultimately, the beneficiary of

such promotion is Tokyo Tokyo, Inc. which is related to the line of business of Applicant, Shogun Fry and Device. It can be pictured out clearly that the

ultimate purpose or goal of SHOGUN is to promote Tokyo Tokyo, Inc., so even though that Opposers SHOGUN mark falls under class 35 and Applicants Shogun Fry and Device falls under class 43, there is an increased tendency or a higher degree of possibility of confusion in the public. This is mainly due to the fact that both businesses are ingrained in the public consciousness as food and food service entities specializing in the Japanese cuisine.

Section 123(d) of the Intellectual Property law states that: Section 123. Registrability. A mark cannot be registered if it: x x x

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:

1. The same goods or services, or

2. Closely related goods or services, or

3. If it nearly resembles such a mark as to be likely to deceive or cause confusion. Xxx

g.) is likely to mislead the public, particularly to the quality, characteristics or geographical origin of the goods or services. Xxx

As held by the Supreme Court in the case of Ana L. Ang vs. Toribio Teodoro, (GR No. L-48226): In the present state of development of the law on Trade-marks, Unfair Competition, and Unfair Trading, the test employed by the courts to determine whether noncompeting goods are or are not of the same class is confusion as to origin of the goods of the second user. Although two non-competing articles may be classified under two different classes by the Patent Office because they are deemed not to posses the same descriptive properties, they would, nevertheless, be held by the courts to belong to the same class if the simultaneous use on them of identical or closely similar trade-marks would be likely to cause confusion as to the origin, or personal source, of the second users goods. They would be considered as not falling under the same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the purchaser would think the first user made the second users goods.

We can say that Applicant was motivated by a desire to get a free ride on the strategic sales promotion of Tokyo Tokyo. Inc. by the own words of Applicant

when it avers, Shogun of Opposer is a sales strategy or promotional and marketing tool while Applicants Shogun Fry and Device is the business itself.

Again, as stated by the Supreme Court in Ana L. Ang vs. Toribio Teodoro, (G.R. No. L-48226): Such construction of the law is induced by cogent reasons of equity and fair dealing. The courts have come to realize that can be unfair competition or unfair trading even if the goods are non-competing, and that such unfair trading can cause injury or damage to the first user of a given trademark, first, by prevention of the natural expansion of his business and, second, by having his business reputation confused with and put at the mercy of the second user. Then the non-competitive products that are sold under the same

mark, resulting to the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark created by its first user, inevitably results. The original owner is entitled to the preservation of the valuable link between him and the public that has been created by his ingenuity and the merit of his wares or services. Experience has

demonstrated that when a well-known trade-mark is adopted by another even for a totally different class of goods, it is done to get the benefit of the reputation and advertisements of the originator of said mark, to convey to the public a false impression of some supposed connection between the manufacture of the article sold under the original mark and the new articles

being tendered to the public under the same or similar mark . As trade has developed and commercial changes have come about, the law of unfair competition has expanded to keep pace with the times and the element of strict competition in itself has ceased to be the determining factor. The owner of a trade-mark or trade-name has a property right in which he is entitled to protection, since there is damage to him from confusion of reputation or goodwill in the mind of the public as well as from confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to classify and treat the issue as a fraud.

As to the petition for the issuance of a writ of injunction, it is a wellestablished remedy for the Opposer to seek for such protection n injunction may also be granted, upon proper showing to the injured party. As stated in Sec. 156.4 of the Intellectual Property Code; the complainant, upon proper showing, may also be granted injunction. This remedy may be sought by the Opposer during the pendency of the action to ascertain that the documents or forms and even the devices that cause confusion between the two marks be impounded, including those that show evidence of sales. Once the cases are decided with finality, the courts or the Office is/are further authorized to order the disposal of the infringing goods outside the channels of commerce, or to order their destruction without compensation.

PRAYER

WHEREFORE, premises considered, it is hereby respectfully prayed of this Honorable Office to render judgment in favor of the Opposer for the rejection of the Application for Trademark by Shogun Fry and Device and to restrain and/or enjoin the same party from further using the contested trademark, Shogun.

Quezon City, October 17, 2012.

(Signed) Atty. Julie Anne V. Adalla Counsel for the Opposer PTR No.070613 MCLE No. 54321-A Roll of Attorney No. 35650 Adalla, Montemayor and Associates 1820 Wainwright Ave., Manila 1006 ldmapacali@gmail.com

VERIFICATION

I, Eliza Montemayor, after having been sworn in accordance with law, deposes and says: That I am is the duly authorized representative of the Opposer in the aboveentitled case; that I have caused the above-complaint to be prepared and have read and knows the contents thereof; that the allegations therein are true of my own knowledge.

(Signed) Eliza Montemayor

SUBSCRIBED and sworn to before me, in the city of MANILA, this 10th day of August, 2011, by Eliza Montemayor with Tax Identification Number 235-005-651 issued at the city of MAKATI on April 17, 1980.

(Signed) Atty. Julie Anne V. Adalla Notary Public Not. Reg.No. 678910 Exp. December 31, 2011 PTR No.070613 MCLE No. 54321-A

Doc. No. 35 Page No. 7 Book No. 10 Series of 2012.

Copy furnished with registered mail: Bryant James Lao Shogun Fry Restaurant 2070 Wilson St. Little Baguio San Juan

EXPLANATION
Service of copy to the Defendant and his counsel were done by registered mail due to lack of manpower to effect personal service.

(Signed) Atty. Julie Anne V. Adalla

The MANUEL L. QUEZON UNIVERSITY

School of Law 916 R. Hidalgo St. Quiapo, 1001, Manila

POSITION PAPER WITH PETITION FOR THE ISSUANCE OF A WRIT OF INJUNCTION (For the Opposer) Tokyo Tokyo v. Bryant James Lao (A partial fulfillment of the requirements for The Law on Intellectual Property, First Semester, AY 2012-2013)

Submitted by: Adalla Julie Anne V. Montemayor, Eliza M. Tacorda, Lorilee Jane A.

Submitted to: Atty. Estrellita B. Abelardo Faculty of Commercial Law October 19, 2012