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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-20635 March 31, 1966 ETEPHA, A.G.

, petitioner, vs. D RECTOR O! PATENTS a"# $ESTMONT PHARMACEUT CALS, NC., respondents. McClure, Salas and Gonzalez, for petitioner. Sycip, Salazar, Manalo, Luna and Associates, for respondent. SANCHE%, J.: To the question: Ma trade!ar" AT#$$%N be re&istered, &iven the fact that PERT#$$%N, another trade!ar", had been previousl re&istered in the Patent 'ffice( ) the *irector of Patents ans+ered affir!ativel . ,ence this appeal. 'n April -., /010, respondent 2est!ont Phar!aceuticals, %nc., a Ne+ 3or" corporation, sou&ht re&istration of trade!ar" 4Atussin4 placed on its 4!edicinal preparation of e5pectorant antihista!inic, bronchodilator sedative, ascorbic acid 67ita!in C8 used in the treat!ent of cou&h4. The trade!ar" is used e5clusivel in the Philippines since 9anuar -/, /010./ Petitioner, Etepha, A. :., a ;iechtenstin 6principalit 8 corporation, ob<ected. Petitioner clai!s that it +ill be

da!a&ed because Atussin is so confusedl si!ilar to its Pertussin 6Re&istration No. =>?0, issued on $epte!ber -1, /01@8 used on a preparation for the treat!ent of cou&hs, that the bu in& public +ill be !isled into believin& that 2est!ontAs product is that of petitionerAs +hich alle&edl en<o s &ood+ill. /. The ob<ects of a trade!ar" are 4to point out distinctl the ori&in or o+nership of the articles to +hich it is affi5ed, to secure to hi! +ho has been instru!ental in brin&in& into !ar"et a superior article or !erchandise the fruit of his industr and s"ill, and to prevent fraud and i!position.4- 'ur overBall tas" then is to ascertain +hether or not Atussin so rese!bles Pertussin 4as to be li"el , +hen applied to or used in connection +ith the &oods ... of the applicant, to cause confusion or !ista"e or to deceive purchasers4.. And, +e are to be &uided b the rule that the validit of a cause for infrin&e!ent is predicated upon colorable i!itation. The phrase 4colorable i!itation4 denotes such a 4close or in&enious i!itation as to be calculated to deceive ordinar persons, or such a rese!blance to the ori&inal as to deceive an ordinar purchaser, &ivin& such attention as a purchaser usuall &ives, and to cause hi! to purchase the one supposin& it to be the other.4C -. That the +ord 4tussin4 fi&ures as a co!ponent of both trade!ar"s is nothin& to +onder at. The *irector

of Patents aptl observes that it is 4the co!!on practice in the dru& and phar!aceutical industries to AfabricateA !ar"s b usin& s llables or +ords su&&estive of the ail!ents for +hich the are intended and addin& thereto distinctive prefi5es or suffi5es4.1 And appropriatel to be considered no+ is the fact that, concededl , the 4tussin4 6in Pertussin and Atussin8 +as derived fro! the ;atin rootB+ord 4tussis4 !eanin& cou&h.= 4Tussin4 is !erel descriptiveD it is &enericD it furnishes to the bu er no indication of the ori&in of the &oodsD it is open for appropriation b an one. %t is accordin&l barred fro! re&istration as trade!ar". 2ith <urisprudence holdin& the line, +e feel safe in !a"in& the state!ent that an other conclusion +ould result in 4appellant havin& practicall a !onopol 4@ of the +ord 4tussin4 in a trade!ar".? 2hile 4tussin4 b itself cannot thus be used e5clusivel to identif oneAs &oods, it !a properl beco!e the sub<ect of a trade!ar" 4b co!bination +ith another +ord or phrase4.0 And this union of +ords is reflected in petitionerAs Pertussin and respondentAs Atussin, the first +ith prefi5 4Per4 and the second +ith Prefi5 4A4./E+phF/.GHt .. A practical approach to the proble! of si!ilarit or dissi!ilarit is to &o into the whole of the t+o trade!ar"s pictured in their !anner of displa . %nspection should be underta"en fro! the vie+point

of a prospective bu er. The trade!ar" co!plained of should be co!pared and contrasted +ith the purchaserAs !e!or 6not in <u5taposition8 of the trade!ar" said to be infrin&ed. /> $o!e such factors as 4soundD appearanceD for!, st le, shape, siIe or for!atD colorD ideas connoted b !ar"sD the !eanin&, spellin&, and pronunciation, of +ords usedD and the settin& in +hich the +ords appear4 !a be considered. // Jor, indeed, trade!ar" infrin&e!ent is a for! of unfair co!petition. /2e ta"e a casual loo" at the t+o labels ) +ithout spellin& out the details ) bearin& in !ind the eas B toBre!e!ber ear!ar"s thereof. RespondentAs label underscores the trade!ar" Atussin in bold, bloc" letters horiIontall +ritten. %n petitionerAs, on the other hand, Pertussin is printed dia&onall up+ards and across in se!iscript st le +ith flourishes and +ith onl the first letter 4P4 capitaliIed. Each label plainl sho+s the source of the !edicine: petitionerAs at the foot bears 4Etepha ;td. $chaan Jl4, and on top, 4Apothecar E. TaeschnerAs4D respondentAs pro<ects 42est!ont Phar!aceuticals, %nc. Ne+ 3or", #$A4 at the botto!s, and on the lo+er left side the +ord 42est!ont4 upon a +hite dia!ond shaped enclosure and in red in" ) a color different fro! that of the +ords above and belo+ it. Printed pro!inentl alon& the left, botto! and ri&ht ed&es of petitionerAs label are indications of the use: 4for bronchial catarrh )

+hoppin&Bcou&h ) cou&hs and asth!a4. RespondentAs for its part briefl represents +hat its produce actuall is B a 4cou&h s rup4. The t+o labels are entirel different in colors, contents, arran&e!ent of +ords thereon, siIes, shapes and &eneral appearance. The contrasts in pictorial effects and appeals to the e e is so pronounced that the label of one cannot be !ista"en for that of the other, not even b persons unfa!iliar +ith the t+o trade!ar"s. /. 'n this point the follo+in& culled fro! a recent decision of the #nited $tates Court of Custo!s and Patent Appeals 69une /1, /01=8 is persuasive: /C Confusion is li"el bet+een trade!ar"s, ho+ever, onl if their over-all presentations in an of the particulars of sound, appearance, or !eanin& are such as +ould lead the purchasin& public into believin& that the products to +hich the !ar"s are applied e!anated fro! the sa!e source. %n testin& this issue, fi5ed le&al rules e5ist ) if not in har!on , certainl in abundance ) but, in the final anal sis, the application of these rules in an &iven situation necessaril reflects a !atter of individual <ud&!ent lar&el predicated on opinion. There is, ho+ever, and can be no disa&ree!ent +ith the rule that the purchaser is confused, if at all, b the !ar"s as a whole. C. 2e no+ consider e5clusivel the t+o +ords )

Pertussin and Atussin ) as the appear on the respective labels. As previousl adverted to, these +ords are presented to the public in different st les of +ritin& and !ethods of desi&n. The horiIontal plain, bloc" letters of Atussin and the dia&onall and artisticall up+ard +ritin& of Pertussin leave distinct visual i!pressions. 'ne loo" is enou&h to denude the !ind of that illu!inatin& si!ilarit so essential for a trade!ar" infrin&e!ent case to prosper. 1. As +e ta"e up Pertussin and Atussin once a&ain, +e cannot escape notice of the fact that the t+o +ords do not sound ali"e ) +hen pronounced. There is not !uch phonetic si!ilarit bet+een the t+o. The $olicitor :eneral +ellBobserved that in Pertussin the pronunciation of the prefi5 4Per4, +hether correct or incorrect, includes a co!bination of three letters P, e and rD +hereas, in Atussin the +hole starts +ith the sin&le letter A added to suffi5 4tussin4. Appeals to the ear are disi!ilar. And this, because in a +ord co!bination, the part that co!es first is the most pronounced. An e5positor of the applicable rule here is the decision in the $ rocolB Cheracol controvers . /1 There, the rulin& is that trade!ar" $ rocol 6a cou&h !edicine preparation8 is not confusedl si!ilar to trade!ar" Cheracol 6also a cou&h !edicine preparation8. Reason: the t+o +ords 4do not loo" or sound enou&h ali"e to <ustif a holdin& of trade!ar" infrin&e!ent4, and the 4onl si!ilarit is

in the last s llable, and that is not unco!!on in na!es &iven dru& co!pounds4. =. %n the solution of a trade!ar" infrin&e!ent proble!, re&ard too should be &iven to the class of persons +ho bu the particular product and the circu!stances ordinaril attendant to its acquisition. /= The !edicinal preparation clothed +ith the trade!ar"s in question, are unli"e articles of ever da use such as candies, ice crea!, !il", soft drin"s and the li"e +hich !a be freel obtained b an one, an ti!e, an +here. PetitionerAs and respondentAs products are to be dispensed upon !edical prescription. The respective labels sa so. An intendin& bu er !ust have to &o first to a licensed doctor of !edicineD he receives instructions as to +hat to purchaseD he reads the doctorAs prescriptionD he "no+s +hat he is to bu . ,e is not of the incautious, un+ar , unobservant or unsuspectin& t peD he e5a!ines the product sold to hi!D he chec"s to find out +hether it confor!s to the !edical prescription. The co!!on trade channel is the phar!ac or the dru&store. $i!ilarl , the phar!acist or dru&&ist verifies the !edicine sold. The !ar&in of error in the acquisition of one for the other is quite re!ote. 2e concede the possibilit that bu ers !i&ht be able to obtain Pertussin or Attusin +ithout prescription. 2hen this happens, then the bu er !ust be one throu&hl

fa!iliar +ith +hat he intends to &et, else he +ould not have the te!erit to as" for a !edicine ) specificall needed to cure a &iven ail!ent. %n +hich case, the !ore i!probable it +ill be to pal! off one for the other. Jor a person +ho purchases +ith open e es is hardl the !an to be deceived. Jor the reasons &iven, the appealed decision of the respondent *irector of Patents ) &ivin& due course to the application for the re&istration of trade!ar" ATT#$%N is hereb affir!ed. Costa a&ainst petitioner. $o ordered. en!zon, C."., autista An!elo, Concepcion, #eyes, ". .L., arrera, #e!ala, Ma$alintal, en!zon, ". P., and %aldivar, ""., concur. &izon, "., too$ no part. T,%R* *%7%$%'N &G.R. No. 120900. '()* 20, 2000+ CANON ,A-USH , ,A SHA, petitioner, vs. COURT O! APPEALS a"# NSR RU--ER CORPORAT ON, respondents. DEC S ON GON%AGA-RE.ES, J./ Before us is a petition for revie+ that see"s to set aside the *ecisionK/L dated Jebruar -/, /001 of the Court of Appeals in CAB:R $P No. .>->., entitled 4Canon Mabushi"i Maisha vs. N$R Rubber Corporation4 and its Resolution dated 9une -@, /001 den in& the !otion for reconsideration of herein petitioner Canon Mabushi"i

Maisha 6petitioner8. 'n 9anuar /1, /0?1, private respondent N$R Rubber Corporation 6private respondent8 filed an application for re&istration of the !ar" CAN'N for sandals in the Bureau of Patents, Trade!ar"s, and Technolo& Transfer 6BPTTT8. A 7erified Notice of 'pposition +as filed b petitioner, a forei&n corporation dul or&aniIed and e5istin& under the la+s of 9apan, alle&in& that it +ill be da!a&ed b the re&istration of the trade!ar" CAN'N in the na!e of private respondent. The case +as doc"eted as %nter Partes Case No. .>C.. Based on the records, the evidence presented b petitioner consisted of its certificates of re&istration for the !ar" CAN'N in various countries coverin& &oods belon&in& to class - 6paints, che!ical products, toner, and d e stuff8. Petitioner also sub!itted in evidence its Philippine Trade!ar" Re&istration No. .0.0?, sho+in& its o+nership over the trade!ar" CAN'N also under class -. 'n Nove!ber />, /00-, the BPTTT issued its decision dis!issin& the opposition of petitioner and &ivin& due course to private respondentNs application for the re&istration of the trade!ar" CAN'N. 'n Jebruar /=, /00., petitioner appealed the decision of the BPTTT +ith public respondent Court of Appeals that eventuall affir!ed the decision of BPTTT. ,ence, this petition for revie+.

Petitioner anchors this instant petition on these &rounds: A8 PET%T%'NER %$ ENT%T;E* T' EOC;#$%7E #$E 'J T,E MARM CAN'N BECA#$E %T %$ %T$ TRA*EMARM AN* %$ #$E* A;$' J'R J''T2EAR. B8 T' A;;'2 PR%7ATE RE$P'N*ENT T' RE:%$TER CAN'N J'R J''T2EAR %$ T' PRE7ENT PET%T%'NER JR'M #$%N: CAN'N J'R 7AR%'#$ M%N*$ 'J J''T2EAR, 2,EN %N JACT, PET%T%'NER ,A$ EAR;%ER #$E* $A%* MARM J'R $A%* :''*$. C8 PET%T%'NER %$ A;$' ENT%T;E* T' T,E R%:,T T' EOC;#$%7E;3 #$E CAN'N T' PRE7ENT C'NJ#$%'N 'J B#$%NE$$. *8 PET%T%'NER %$ A;$' ENT%T;E* T' T,E EOC;#$%7E #$E 'J CAN'N BECA#$E %T J'RM$ PART 'J %T$ C'RP'RATE NAME, PR'TECTE* B3 T,E PAR%$ C'N7ENT%'N.K-L The BPTTT and the Court of Appeals share the opinion that the trade!ar" 4CAN'N4 as used b petitioner for its paints, che!ical products, toner, and d estuff, can be used b private respondent for its sandals because the products of these t+o parties are dissi!ilar. Petitioner protests the appropriation of the !ar" CAN'N b private respondent on the &round that petitioner has used and continues to use the trade!ar" CAN'N on its +ide ran&e of &oods +orld+ide. Alle&edl , the corporate na!e

or tradena!e of petitioner is also used as its trade!ar" on diverse &oods includin& foot+ear and other related products li"e shoe polisher and polishin& a&ents. To lend credence to its clai!, petitioner points out that it has branched out in its business based on the various &oods carr in& its trade!ar" CAN'NK.L, includin& foot+ear +hich petitioner contends covers sandals, the &oods for +hich private respondent sou&ht to re&ister the !ar" CAN'N. Jor petitioner, the fact alone that its trade!ar" CAN'N is carried b its other products li"e foot+ear, shoe polisher and polishin& a&ents should have precluded the BPTTT fro! &ivin& due course to the application of private respondent. 2e find the ar&u!ents of petitioner to be un!eritorious. 'rdinaril , the o+nership of a trade!ar" or tradena!e is a propert ri&ht that the o+ner is entitled to protectKCL as !andated b the Trade!ar" ;a+.K1L ,o+ever, +hen a trade!ar" is used b a part for a product in +hich the other part does not deal, the use of the sa!e trade!ar" on the latterNs product cannot be validl ob<ected to.K=L A revie+ of the records sho+s that +ith the order of the BPTTT declarin& private respondent in default for failure to file its ans+er, petitioner had ever opportunit to present e'-parte all of its evidence to prove that its certificates of re&istration for the trade!ar" CAN'N cover foot+ear. The certificates of re&istration for the trade!ar" CAN'N in other countries and in the Philippines as presented b petitioner, clearl sho+ed

that said certificates of re&istration cover &oods belon&in& to class - 6paints, che!ical products, toner, d estuff8. 'n this basis, the BPTTT correctl ruled that since the certificate of re&istration of petitioner for the trade!ar" CAN'N covers class - 6paints, che!ical products, toner, d estuff8, private respondent can use the trade!ar" CAN'N for its &oods classified as class -1 6sandals8. Clearl , there is a +orld of difference bet+een the paints, che!ical products, toner, and d estuff of petitioner and the sandals of private respondent. Petitioner counters that not+ithstandin& the dissi!ilarit of the products of the parties, the trade!ar" o+ner is entitled to protection +hen the use of b the <unior user 4forestalls the nor!al e5pansion of his business4. K@L PetitionerNs opposition to the re&istration of its trade!ar" CAN'N b private respondent rests upon petitionerNs insistence that it +ould be precluded fro! usin& the !ar" CAN'N for various "inds of foot+ear, +hen in fact it has earlier used said !ar" for said &oods. $tretchin& this ar&u!ent, petitioner clai!s that it is possible that the public could presu!e that petitioner +ould also produce a +ide variet of foot+ear considerin& the diversit of its products !ar"eted +orld+ide. 2e do not a&ree. Even in this instant petition, e5cept for its bare assertions, petitioner failed to attach evidence that +ould convince this Court that petitioner has also

e!bar"ed in the production of foot+ear products. 2e quote +ith approval the observation of the Court of Appeals that: 4The herein petitioner has not !ade "no+n that it intends to venture into the business of producin& sandals. This is clearl sho+n in its Trade!ar" Principal Re&ister 6E5hibit 4#48 +here the products of the said petitioner had been clearl and specificall described as 4Che!ical products, d estuffs, pi&!ents, toner developin& preparation, shoe polisher, polishin& a&ent4. %t +ould be ta5in& oneNs credibilit to aver at this point that the production of sandals could be considered as a possible 4natural or nor!al e5pansion4 of its business operation4.K?L %n (a)er!e, *ncorporated vs. *ntermediate Appellate Court,K0L the *irector of patents allo+ed the <unior user to use the trade!ar" of the senior user on the &round that the briefs !anufactured b the <unior user, the product for +hich the trade!ar" BR#TE +as sou&ht to be re&istered, +as unrelated and nonBco!petin& +ith the products of the senior user consistin& of after shave lotion, shavin& crea!, deodorant, talcu! po+der, and toilet soap. The senior user vehe!entl ob<ected and clai!ed that it +as e5pandin& its trade!ar" to briefs and ar&ued that per!ittin& the <unior user to re&ister the sa!e trade!ar" +ould allo+ the latter to invade the senior userNs e5clusive do!ain. %n sustainin& the *irector

of Patents, this Court said that since 46the senior user8 has not ventured in the production of briefs, an ite! +hich is not listed in its certificate of re&istration, 6the senior user8, cannot and should not be allo+ed to fei&n that 6the <unior user8 had invaded 6the senior userNs8 e5clusive do!ain.4K/>L 2e reiterated the principle that the certificate of re&istration confers upon the trade!ar" o+ner the e5clusive ri&ht to use its o+n s !bol only to those !oods specified in the certificate, sub<ect to the conditions and li!itations stated therein.K//L Thus, the e5clusive ri&ht of petitioner in this case to use the trade!ar" CAN'N is li!ited to the products covered b its certificate of re&istration. Petitioner further ar&ues that the alle&ed diversit of its products all over the +orld !a"es it plausible that the public !i&ht be !isled into thin"in& that there is so!e supposed connection bet+een private respondentNs &oods and petitioner. Petitioner is apprehensive that there could be confusion as to the ori&in of the &oods, as +ell as confusion of business, if private respondent is allo+ed to re&ister the !ar" CAN'N. %n such a case, petitioner +ould alle&edl be i!!ensel pre<udiced if private respondent +ould be per!itted to ta"e 4a free ride on, and reap the advanta&es of, the &ood+ill and reputation of petitioner Canon4.K/-L %n support of the fore&oin& ar&u!ents, petitioner invo"es the rulin&s in Sta. Ana vs. MaliwatK/.L, An! vs. +eodoroK/CL and Converse #u))er Corporation vs. ,niversal #u))er

Products, *nc.K/1L. The li"elihood of confusion of &oods or business is a relative concept, to be deter!ined onl accordin& to the particular, and so!eti!es peculiar, circu!stances of each case.K/=L %ndeed, in trade!ar" la+ cases, even !ore than in other liti&ation, precedent !ust be studied in the li&ht of the facts of the particular case. K/@L Contrar to petitionerNs supposition, the facts of this case +ill sho+ that the cases of Sta. Ana vs. Maliwat,, An! vs. +eodoro and Converse #u))er Corporation vs. ,niversal #u))er Products, *nc. are hardl in point. The <ust cited cases involved &oods that +ere confusin&l si!ilar, if not identical, as in the case of Converse #u))er Corporation vs. ,niversal #u))er Products, *nc. ,ere, the products involved are so unrelated that the public +ill not be !isled that there is the sli&htest ne5us bet+een petitioner and the &oods of private respondent. %n cases of confusion of business or ori&in, the question that usuall arises is +hether the respective &oods or services of the senior user and the <unior user are so related as to li"el cause confusion of business or ori&in, and thereb render the trade!ar" or tradena!es confusin&l si!ilar.K/?L :oods are related +hen the belon& to the sa!e class or have the sa!e descriptive propertiesD +hen the possess the sa!e ph sical attributes or essential characteristics +ith reference to their for!, co!position, te5ture or qualit .K/0L The !a also be related because the serve the sa!e purpose or

are sold in &rocer stores.K->L Thus, in -sso Standard -astern, *nc. vs. Court of Appeals, this Court ruled that the petroleu! products on +hich the petitioner therein used the trade!ar" E$$', and the product of respondent, ci&arettes are 4so forei&n to each other as to !a"e it unli"el that purchasers +ould thin" that petitioner is the !anufacturer of respondentNs &oods4K-/L. Moreover, the fact that the &oods involved therein flo+ throu&h different channels of trade hi&hli&hted their dissi!ilarit , a factor e5plained in this +ise: 4The products of each part !ove alon& and are disposed throu&h different channels of distribution. The 6petitionerNs8 products are distributed principall throu&h &asoline service and lubrication stations, auto!otive shops and hard+are stores. 'n the other hand, the 6respondentNs8 ci&arettes are sold in sariBsari stores, &rocer store, and other s!all distributor outlets. 6RespondentNs8 ci&arettes are even peddled in the streets +hile 6petitionerNs8 P&asulN burners are not. Jinall , there is a !ar"ed distinction bet+een oil and tobacco, as +ell as bet+een petroleu! and ci&arettes. Evidentl , in "ind and nature the products of 6respondent8 and of 6petitioner8 are poles apart.4K--L #ndoubtedl , the paints, che!ical products, toner and d estuff of petitioner that carr the trade!ar" CAN'N

are unrelated to sandals, the product of private respondent. 2e a&ree +ith the BPTTT, follo+in& the Esso doctrine, +hen it noted that the t+o classes of products in this case flo+ throu&h different trade channels. The products of petitioner are sold throu&h special che!ical stores or distributors +hile the products of private respondent are sold in &rocer stores, sariBsari stores and depart!ent stores.K-.L Thus, the evident disparit of the products of the parties in the case at bar renders unfounded the apprehension of petitioner that confusion of business or ori&in !i&ht occur if private respondent is allo+ed to use the !ar" CAN'N. %n its bid to bar the re&istration of private respondent of the !ar" CAN'N, petitioner invo"es the protective !antle of the Paris Convention. Petitioner asserts that it has the e5clusive ri&ht to the !ar" CAN'N because it for!s part of its corporate na!e or tradena!e, protected b Article ? of the Paris Convention, to +it: 4A tradena!e shall be protected in all the countries of the #nion +ithout the obli&ation of filin& or re&istration, +hether or not it for!s part of a trade!ar".4 Public respondents BPTTT and the Court of Appeals alle&edl co!!itted an oversi&ht +hen the required petitioner to prove that its !ar" is a +ellB"no+n !ar" at the ti!e the application of private respondent +as filed. Petitioner questions the applicabilit of the &uidelines e!bodied in the Me!orandu! of then Minister of Trade

and %ndustr Roberto 'n&pin 6'n&pin8 dated 'ctober -1, /0?. +hich accordin& to petitioner i!ple!ents Article =bis of the Paris Convention, the provision referrin& to the protection of trade!ar"s. The !e!orandu! reads: 4a8 the !ar" !ust be internationall "no+nD b8 the sub<ect of the ri&ht !ust be a trade!ar", not a patent or cop ri&ht or an thin& elseD c8 the !ar" !ust be for use in the sa!e or si!ilar class of &oodsD d8 the person clai!in& !ust be the o+ner of the !ar".4 Accordin& to petitioner, it should not be required to prove that its trade!ar" is +ellB"no+n and that the products are not si!ilar as required b the quoted !e!orandu!. Petitioner e!phasiIes that the &uidelines in the !e!orandu! of 'n&pin i!ple!ent Article =bis of the Paris Convention, the provision for the protection of trade!ar"s, not tradena!es. Article =bis of the Paris Convention states: 6/8....The countries of the #nion underta"e, either ad!inistrativel if their le&islation so per!its, or at the request of an interested part , to refuse or to cancel the re&istration and to prohibit the use of a trade!ar" +hich constitutes a reproduction, i!itation or translation, liable to create confusion, of a !ar" considered b the co!petent authorit of the countr of re&istration or use to be +ellB

"no+n in that countr as bein& alread the !ar" of a person entitled to the benefits of the present Convention and used for identical or si!ilar &oods. These provisions shall also appl +hen the essential part of the !ar" constitutes a reproduction of an such +ellB"no+n !ar" or an i!itation liable to create confusion there+ith. 6-8....A period of at least five ears fro! the date of re&istration shall be allo+ed for see"in& the cancellation of such a !ar". The countries of the #nion !a provide for a period +ithin +hich the prohibition of use !ust be sou&ht. 6.8....No ti!e li!it shall be fi5ed for see"in& the cancellation or the prohibition of the use of !ar"s or used in bad faith.4 Petitioner insists that +hat it see"s is the protection of Article ? of the Paris Convention, the provision that pertains to the protection of tradena!es. Petitioner believes that the appropriate !e!orandu! to consider is that issued b the then Minister of Trade and %ndustr , ;uis 7illafuerte, directin& the *irector of patents to: 4re<ect all pendin& applications for Philippine re&istration of si&nature and other +orld fa!ous trade!ar"s b applicants other than the ori&inal o+ners or users.4 As far as petitioner is concerned, the fact that its tradena!e is at ris" +ould call for the protection &ranted

b Article ? of the Paris Convention. Petitioner calls attention to the fact that Article ?, even as e!bodied in par. =, sec. .@ of RA /==, !entions no require!ent of si!ilarit of &oods. Petitioner clai!s that the reason there is no !ention of such a require!ent, is 4because there is a difference bet+een the referent of the na!e and that of the !ar"4K-CL and that 4since Art. ? protects the tradena!e in the countries of the #nion, such as 9apan and the Philippines, PetitionerNs tradena!e should be protected here.4K-1L 2e cannot uphold petitionerNs position. The ter! 4trade!ar"4 is defined b RA /==, the Trade!ar" ;a+, as includin& 4an +ord, na!e, s !bol, e!ble!, si&n or device or an co!bination thereof adopted and used b a !anufacturer or !erchant to identif his &oods and distin&uish the! for those !anufactured, sold or dealt in b others.4K-=L Tradena!e is defined b the sa!e la+ as includin& 4individual na!es and surna!es, fir! na!es, tradena!es, devices or +ords used b !anufacturers, industrialists, !erchants, a&riculturists, and others to identif their business, vocations, or occupationsD the na!es or titles la+full adopted and used b natural or <uridical persons, unions, and an !anufacturin&, industrial, co!!ercial, a&ricultural or other or&aniIations en&a&ed in trade or co!!erce.4K-@L $i!pl put, a trade na!e refers to the business and its &ood+illD a trade!ar" refers to the &oods.K-?L

The Convention of Paris for the Protection of %ndustrial Propert , other+ise "no+n as the Paris Convention, of +hich both the Philippines and 9apan, the countr of petitioner, are si&natoriesK-0L, is a !ultilateral treat that see"s to protect industrial propert consistin& of patents, utilit !odels, industrial desi&ns, trade!ar"s, service !ar"s, trade na!es and indications of source or appellations of ori&in, and at the sa!e ti!e ai!s to repress unfair co!petition.K.>L 2e a&ree +ith public respondents that the controllin& doctrine +ith respect to the applicabilit of Article ? of the Paris Convention is that established in .a)ushi .aisha *setan vs. *ntermediate Appellate Court.K./L As pointed out b the BPTTT: 4Re&ardin& the applicabilit of Article ? of the Paris Convention, this 'ffice believes that there is no auto!atic protection afforded an entit +hose tradena!e is alle&ed to have been infrin&ed throu&h the use of that na!e as a trade!ar" b a local entit . %n Mabushi"i Maisha %setan vs. The %nter!ediate Appellate Court, et. al., :.R. No. @1C->, /1 Nove!ber /00/, the ,onorable $upre!e Court held that: The Paris Convention for the Protection of %ndustrial Propert does not auto!aticall e5clude all countries of the +orld +hich have si&ned it fro! usin& a

tradena!e +hich happens to be used in one countr . To illustrate Q if a ta5icab or bus co!pan in a to+n in the #nited Min&do! or %ndia happens to use the tradena!e 4Rapid Transportation4, it does not necessaril follo+ that 4Rapid4 can no lon&er be re&istered in #&anda, Ji<i, or the Philippines. This office is not un!indful that in the Treat of Paris for the Protection of %ntellectual Propert re&ardin& +ellB"no+n !ar"s and possible application thereof in this case. Petitioner, as this office sees it, is tr in& to see" refu&e under its protective !antle, clai!in& that the sub<ect !ar" is +ell "no+n in this countr at the ti!e the then application of N$R Rubber +as filed. ,o+ever, the then Minister of Trade and %ndustr , the ,on. Roberto 7. 'n&pin, issued a !e!orandu! dated -1 'ctober /0?. to the *irector of Patents, a set of &uidelines in the i!ple!entation of Article =bis 6sic8 of the Treat of Paris. These conditions are: a8 the !ar" !ust be internationall "no+nD b8 the sub<ect of the ri&ht !ust be a trade!ar", not a patent or cop ri&ht or an thin& elseD c 8 the !ar" !ust be for use in the sa!e or si!ilar "inds of &oodsD and

d8 the person clai!in& !ust be the o+ner of the !ar" 6The Parties Convention Co!!entar on the Paris Convention. Article b *r. Bo&sch, *irector :eneral of the 2orld %ntellectual Propert 'r&aniIation, :eneva, $+itIerland, /0?18N Jro! the set of facts found in the records, it is ruled that the Petitioner failed to co!pl +ith the third require!ent of the said !e!orandu! that is the !ar" !ust be for use in the sa!e or si!ilar "inds of &oods. The Petitioner is usin& the !ar" 4CAN'N4 for products belon&in& to class 6paints, che!ical products8 +hile the Respondent is usin& the sa!e !ar" for sandals 6class -18. ,ence, PetitionerNs contention that its !ar" is +ellB"no+n at the ti!e the Respondent filed its application for the sa!e !ar" should fail. 4K.-L Petitioner assails the application of the case of .a)ushi .aisha *setan vs. *ntermediate Appellate Court to this case. Petitioner points out that in the case of .a)ushi .aisha *setan vs. *ntermediate Appellate Court, petitioner therein +as found to have never at all conducted its business in the Philippines unli"e herein petitioner +ho has e5tensivel conducted its business here and also had its trade!ar" re&istered in this countr . ,ence, petitioner sub!its that this factual difference renders inapplicable our rulin& in the case of .a)ushi .aisha *setan vs. *ntermediate Appellate Court that Article ? of

the Paris Convention does not auto!aticall e5tend protection to a tradena!e that is in dan&er of bein& infrin&ed in a countr that is also a si&nator to said treat .This contention deserves scant consideration. $uffice it to sa that the <ust quoted pronounce!ent in the case of .a)ushi .aisha *setan vs. *ntermediate Appellate Court, +as !ade independent of the factual findin& that petitioner in said case had not conducted its business in this countr . $HERE!ORE, in vie+ of the fore&oin&, the instant petition for revie+ on certiorari is *EN%E* for lac" of !erit. SO ORDERED. Melo, /Chairman0, 1itu!, Pan!ani)an, and Pursima, ""., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 103503 '()* 5, 1993 AS A -RE$ER., NC., petitioner, vs. THE HON. COURT O! APPEALS a"# SAN M GUEL CORPORAT ON, respondents.

A)ad Santos 2 Associates and Sycip, Salazar, 3ernandez 2 Gatmaitan for petitioner. #oco, una!, .apunan Law 4ffice for private respondent. GR 1O-A2U NO, J.: 'n $epte!ber /1, /0??, $an Mi&uel Corporation 6$MC8 filed a co!plaint a&ainst Asia Bre+er %nc. 6AB%8 for infrin&e!ent of trade!ar" and unfair co!petition on account of the latterAs BEER PA;E P%;$EN or BEER NA BEER product +hich has been co!petin& +ith $MCAs $AN M%:#E; PA;E P%;$EN for a share of the local beer !ar"et. 6$an Mi&uel Corporation vs. Asia Bre+er %nc., Civ. Case. No. 1=.0>, RTC Branch /==, Pasi&, Metro Manila.8. 'n Au&ust -@, /00>, a decision +as rendered b the trial Court, presided over b 9ud&e 9esus '. Bersa!ira, dis!issin& $MCAs co!plaint because AB% 4has not co!!itted trade!ar" infrin&e!ent or unfair co!petition a&ainst4 $MC 6p. /?0, #ollo8. $MC appealed to the Court of Appeals 6C.A.B:.R. C7 No. -?/>C8. 'n $epte!ber .>, /00/, the Court of Appeals 6$i5th *ivision co!posed of 9ustice 9ose C. Ca!pos, 9r., chair!an and ponente, and 9ustices 7enancio *. Aldecoa 9r. and Jile!on ,. MendoIa, as !e!bers8 reversed the trial court. The dispositive part of the decision reads as follo+s:

%n the li&ht of the fore&oin& anal sis and under the plain lan&ua&e of the applicable rule and principle on the !atter, 2e find the defendant Asia Bre+er %ncorporated :#%;T3 of infrin&e!ent of trade!ar" and unfair co!petition. The decision of the trial court is hereb RE7ER$E*, and a ne+ <ud&!ent entered in favor of the plaintiff and a&ainst the defendant as follo+s: 6/8 The defendant Asia Bre+er %nc. its officers, a&ents, servants and e!plo ees are hereb per!anentl en<oined and restrained fro! !anufacturin&, puttin& up, sellin&, advertisin&, offerin& or announcin& for sale, or suppl in& Beer Pale Pilsen, or an si!ilar preparation, !anufacture or beer in bottles and under labels substantiall identical +ith or li"e the said bottles and labels of plaintiff $an Mi&uel Corporation e!plo ed for that purpose, or substantiall identical +ith or li"e the bottles and labels no+ e!plo ed b the defendant for that purpose, or in bottles or under labels +hich are calculated to deceive purchasers and consu!ers into the belief that the beer is the product of the plaintiff or +hich +ill enable others to substitute, sell or pal! off the said beer of the defendant as and for the beer of the plaintiffBco!plainant. 6-8 The defendant Asia Bre+er %nc. is hereb

ordered to render an accountin& and pa the $an Mi&uel Corporation double an and all the pa !ents derived b defendant fro! operations of its business and the sale of &oods bearin& the !ar" 4Beer Pale Pilsen4 esti!ated at appro5i!atel Jive Million Pesos 6P1,>>>,>>>.>>8D to recall all its products bearin& the !ar" 4Beer Pale Pilsen4 fro! its retailers and deliver these as +ell as all labels, si&ns, prints, pac"a&es, +rappers, receptacles and advertise!ents bearin& the infrin&in& !ar" and all plates, !olds, !aterials and other !eans of !a"in& the sa!e to the Court authoriIed to e5ecute this <ud&!ent for destruction. 6.8 The defendant is hereb ordered to pa plaintiff the su! of T+o Million Pesos 6P-,>>>,>>>.>>8 as !oral da!a&es and ,alf a Million Pesos 6P1,>>>,>>>.>>8 b +a of e5e!plar da!a&es. 6C8 The defendant is further ordered to pa the plaintiff attorne As fees in the a!ount of P-1>,>>>.>> plus costs to this suit. 6p. 0>, #ollo.8 #pon a !otion for reconsideration filed b AB%, the above dispositive part of the decision, +as !odified b the separate opinions of the $pecial $i5th *ivision 1 so that it should read thus: %n the li&ht of the fore&oin& anal sis and under the plain lan&ua&e of the applicable rule and

principle on the !atter, 2e find the defendant Asia Bre+er %ncorporated G,*L+5 of infrin!ement of trademar$ and unfair competition. The decision of the trial court is hereb RE7ER$E*, and a ne+ <ud&!ent entered in favor of the plaintiff and a&ainst the defendant as follo+s: 6/8 The defendant Asia Bre+er %nc., its officers, a&ents, servants and e!plo ees are hereb per!anentl en<oined and restrained fro! !anufacturin&, puttin& up, sellin&, advertisin&, offerin& or announcin& for sale, or suppl in& Beer Pale Pilsen, or an si!ilar preparation, !anufacture or beer in bottles and under labels substantiall identical +ith or li"e the said bottles and labels of plaintiff $an Mi&uel Corporation e!plo ed for that purpose, or substantiall identical +ith or li"e the bottles and labels no+ e!plo ed b the defendant for that purpose, or in bottles or under labels +hich are calculated to deceive purchasers and consu!ers into the belief that the beer if the product of the plaintiff or +hich +ill enable others to substitute, sell or pal! off the said beer of the defendant as and for the beer of the plaintiffBco!plainant. 6-8 The defendant Asia Bre+er %nc. is hereb ordered 2 to recall all its products bearin& the !ar" Beer Pale Pilsen fro! its retailers and

deliver these as +ell as all labels, si&ns, prints, pac"a&es, +rappers, receptacles and advertise!ents bearin& the infrin&in& !ar" and all plates, !olds, !aterials and other !eans of !a"in& the sa!e to the Court authoriIed to e5ecute this <ud&!ent for destruction. 6.8 The defendant is hereb ordered to pa plaintiff the su! of T+o Million Pesos 6P-,>>>,>>>.>>8 as !oral da!a&es and ,alf a Million Pesos 6P1>>,>>>.>>8 b +a of e5e!plar da!a&es. 6C8 The defendant is further ordered to pa the plaintiff attorne As fees in the a!ount of P-1>,>>>.>> plus costs of this suit. %n due ti!e, AB% appealed to this Court b a petition for certiorari under Rule C1 of the Rules of Court. The lone issue in this appeal is +hether AB% infrin&es $MCAs trade!ar": San Mi!uel Pale Pilsen with #ectan!ular 3ops and Malt &esi!n, and thereb co!!its unfair co!petition a&ainst the latter. %t is a factual issue 6Phil. Nut %ndustr %nc. v. $tandard Brands %nc., =1 $CRA 1@18 and as a &eneral rule, the findin&s of the Court of Appeals upon factual questions are conclusive and ou&ht not to be disturbed b us. ,o+ever, there are e5ceptions to this &eneral rule, and the are: 6/8 2hen the conclusion is &rounded entirel on speculation, sur!ises and con<ecturesD

6-8 2hen the inference of the Court of Appeals fro! its findin&s of fact is !anifestl !ista"en, absurd and i!possibleD 6.8 2here there is &rave abuse of discretionD 6C8 2hen the <ud&!ent is based on a !isapprehension of factsD 618 2hen the appellate court, in !a"in& its findin&s, +ent be ond the issues of the case, and the sa!e are contrar to the ad!issions of both the appellant and the appelleeD 6=8 2hen the findin&s of said court are contrar to those of the trial courtD 6@8 2hen the findin&s are +ithout citation of specific evidence on +hich the are basedD 6?8 2hen the facts set forth in the petition as +ell as in the petitionerAs !ain and repl briefs are not disputed b the respondentsD and 608 2hen the findin&s of facts of the Court of Appeals are pre!ised on the absence of evidence and are contradicted on record. 6Re nolds Philippine Corporation vs. Court of Appeals, /=0 $CRA -->, --. citin&, MendoIa vs. Court of Appeals, /1= $CRA 10@D ManlapaI vs. Court of Appeals, /C@ $CRA -.?D $aca vs. $andi&anba an, /C- $CRA 10., =>0D :uita vs. CA, /.0 $CRA 1@=D Casana an vs. Court of Appeals, /0? $CRA ..., ..=D also Ape5

%nvest!ent and Jinancin& Corp. vs. %AC, /== $CRA C1? Kcitin& Tolentino vs. *e 9esus, 1= $CRA /=@D Carolina %ndustries, %nc. vs. CM$ $toc" Bro"era&e, %nc., 0@ $CRA @.CD Manero vs. CA, />- $CRA ?/@D and Moran, 9r. vs. CA, /.. $CRA ??L.8 #nder an of these e5ceptions, the Court has to revie+ the evidence in order to arrive at the correct findin&s based on the record 6Ro!an Catholic Bishop of Malolos, %nc. vs. %AC, /0/ $CRA C//, C->.8 2here findin&s of the Court of Appeals and trial court are contrar to each other, the $upre!e Court !a scrutiniIe the evidence on record. 6CruI vs. CA, /-0 $CRA ---, --@.8 The present case is one of the e5ceptions because there is no concurrence bet+een the trial court and the Court of Appeals on the lone factual issue of +hether AB%, b !anufacturin& and sellin& its BEER PA;E P%;$EN in a!ber colored steinie bottles of .-> !l. capacit +ith a +hite painted rectan&ular label has co!!itted trade!ar" infrin&e!ent and unfair co!petition a&ainst $MC. %nfrin&e!ent of trade!ar" is a for! of unfair co!petition 6Clar"e vs. Manila Cand Co., .= Phil. />>, />=8. $ec. -- of Republic Act No. /==, other+ise "no+n as the Trade!ar" ;a+, defines +hat constitutes infrin&e!ent: $ec. --. *nfrin!ement, what constitutes. ) An person +ho shall use, +ithout the consent of the re&istrant, an reproduction, counterfeit, cop or colorable i!itation of an re!istered !ar" or

tradeBna!e in connection +ith the sale, offerin& for sale, or advertisin& of an &oods, business or services on or in connection +ith +hich such use is li"el to cause confusion or !ista"e or to deceive purchasers or others as to the source or ori&in of such &oods or services, or identit of such businessD or reproduce, counterfeit, cop or colorabl i!itate an such !ar" or tradeBna!e and appl such reproduction, counterfeit, cop , or colorable i!itation to labels, si&ns, prints, pac"a&es, +rappers, receptacles or advertise!ents intended to be used upon or in connection +ith such &oods, business or services, shall be liable to a civil action b the re&istrant for an or all of the re!edies herein provided. 6E!phasis supplied.8 This definition i!plies that onl re!istered trade !ar"s, trade na!es and service !ar"s are protected a&ainst infrin&e!ent or unauthoriIed use b another or others. The use of so!eone elseAs re&istered trade!ar", trade na!e or service !ar" is unauthoriIed, hence, actionable, if it is done 4+ithout the consent of the re&istrant.4 6*)id.8 The re&istered trade!ar" of $MC for its pale pilsen beer is: San Mi!uel Pale Pilsen 6ith #ectan!ular 3ops and Malt &esi!n. 6Philippine Bureau of Patents, Trade!ar"s and Technolo& Transfer Trade!ar"

Certificate of Re&istration No. .=/>., dated -. 'ct. /0?=, 6p. /@C, #ollo.8 As described b the trial court in its decision 6Pa&e /@@, #ollo8: . . . . a rectan&ular desi&n KisL bordered b +hat appears to be minute !rains arran!ed in rows of three in which there appear in each corner hop desi!ns. At the top is a phrase +ritten in s!all print 4Re&. Phil. Pat. 'ff.4 and at the botto! 4Net Contents: .-> Ml.4 The do!inant feature is the phrase 4San Mi!uel4 +ritten horiIontall at the upper portion. Belo+ are the +ords 4Pale Pilsen4 +ritten dia&onall across the !iddle of the rectan&ular desi&n. %n bet+een is a coat of ar!s and the phrase 4E5pertl Bre+ed.4 The 4$4 in 4$an4 and the 4M4 of 4Mi&uel,4 4P4 of 4Pale4 and 4Pilsen4 are +ritten in :othic letters +ith fine stro"es of serifs, the "ind that first appeared in the /@?>s in En&land and used for printin& :er!an as distin&uished fro! Ro!an and %talic. Belo+ 4Pale Pilsen4 is the state!ent 4And Bottled b 4 6first line, 4$an Mi&uel Bre+er 4 6second line8, and 4Philippines4 6third line8. 6p. /@@, #olloD E!phasis supplied.8 'n the other hand, AB%As trade!ar", as described b the trial court, consists of: . . . a rectan&ular desi&n bordered b +hat

appear to be )uds of flowers with leaves. The do!inant feature is 4 eer4 +ritten across the upper portion of the rectan&ular desi&n. The phrase 4Pale Pilsen4 appears i!!ediatel belo+ in s!aller bloc" letters. To the left is a hop desi&n and to the ri&ht, +ritten in s!all prints, is the phrase 4Net Contents .-> !l.4 %!!ediatel belo+ 4Pale Pilsen4 is the state!ent +ritten in three lines 4Especiall bre+ed and bottled b 4 6first line8, 4Asia Bre+er %ncorporated4 6second line8, and 4Philippines4 6third line8, 6p. /@@, #olloD E!phasis supplied.8 *oes AB%As BEER PA;E P%;$EN label or 4desi&n4 infrin&e upon $MCAs $AN M%:#E; PA;E P%;$EN 2%T, RECTAN:#;AR MA;T AN* ,'P$ *E$%:N( The ans+er is 4No.4 %nfrin&e!ent is deter!ined b the 4test of do!inanc 4 rather than b differences or variations in the details of one trade!ar" and of another. The rule +as for!ulated in Co +ion! Sa vs. &irector of Patents, 01 Phil. /, C 6/01C8D reiterated in Lim 3oa vs. &irector of Patents, />> Phil. -/C, -/=B-/@ 6/01=8, thus: %t has been consistentl held that the question of infrin&e!ent of a trade!ar" is to be deter!ined b the test of dominancy. $i!ilarit in siIe, for! and color, +hile relevant, is not conclusive. %f the co!petin& trade!ar" contains the !ain or essential or do!inant features of another, and

confusion and deception is li"el to result, infrin&e!ent ta"es place. *uplication or i!itation is not necessar D nor it is necessar that the infrin&in& label should su&&est an effort to i!itate. KC. Neil!an Bre+in& Co. vs. %ndependent Bre+in& Co., /0/ J., C?0, C01, citin& Ea&le 2hite ;ead Co., vs. Pflu&h 6CC8 /?> Jed. 1@0L. The question at issue in cases of infrin&e!ent of trade!ar"s is +hether the use of the !ar"s involved +ould be li"el to cause confusion or mista$es in the mind of the pu)lic or deceive purchasers. 6Auburn Rubber Corporation vs. ,onover Rubber Co., />@ J. -d 1??D . . . .8 6E!phasis supplied.8 %n (or)es, Munn 2 Co. /Ltd.0 vs. An! San +o, C> Phil. -@-, -@1, the test +as si!ilarit or 4rese!blance bet+een the t+o 6trade!ar"s8 such as +ould be li"el to cause the one !ar" to be !ista"en for the other. . . . KButL this is not such si!ilitude as a!ounts to identit .4 *n Phil. 7ut *ndustry *nc. vs. Standard rands *nc., =1 $CRA 1@1, the court +as !ore specific: the test is 4si!ilarit in the do!inant features of the trade!ar"s.4 2hat are the do!inant features of the co!petin& trade!ar"s before us( There is hardl an dispute that the do!inant feature of $MCAs trade!ar" is the na!e of the product: $AN M%:#E; PA;E P%;$EN, +ritten in +hite :othic letters +ith elaborate serifs at the be&innin& and end of the

letters 4$4 and 4M4 on an a!ber bac"&round across the upper portion of the rectan&ular desi&n. 'n the other hand, the do!inant feature of AB%As trade!ar" is the na!e: BEER PA;E P%;$EN, +ith the +ord 4Beer4 +ritten in lar&e a!ber letters, lar&er than an of the letters found in the $MC label. The trial court perceptivel observed that the +ord 4BEER4 does not appear in $MCAs trade!ar", <ust as the +ords 4$AN M%:#E;4 do not appear in AB%As trade!ar". ,ence, there is absolutel no si!ilarit in the do!inant features of both trade!ar"s. Neither in sound, spellin& or appearance can BEER PA;E P%;$EN be said to be confusin&l si!ilar to $AN M%:#E; PA;E P%;$EN. No one +ho purchases BEER PA;E P%;$EN can possibl be deceived that it is $AN M%:#E; PA;E P%;$EN. No evidence +hatsoever +as presented b $MC provin& other+ise. Besides the dissi!ilarit in their na!es, the follo+in& other dissi!ilarities in the trade dress or appearance of the co!petin& products abound: 6/8 The $AN M%:#E; PA;E P%;$EN bottle has a slender tapered nec". The BEER PA;E P%;$EN bottle has a fat, bul&in& nec". 6-8 The +ords 4pale pilsen4 on $MCAs label are printed in bold and laced letters alon& a dia!onal band, +hereas the +ords 4pale pilsen4 on AB%As bottle are half the siIe and printed in slender bloc" letters on a

strai&ht horizontalband. 6$ee E5hibit 4?Ba4.8. 6.8 The na!es of the !anufacturers are pro!inentl printed on their respective bottles. $AN M%:#E; PA;E P%;$EN is 4Bottled b the $an Mi&uel Bre+er , Philippines,4 +hereas BEER PA;E P%;$EN is 4Especiall bre+ed and bottled b Asia Bre+er %ncorporated, Philippines.4 6C8 'n the bac" of AB%As bottle is printed in bi&, bold letters, under a ro+ of flo+er buds and leaves, its cop ri&hted slo&an: 4BEER NA BEERR4 2hereas $MCAs bottle carries no slo&an. 618 The bac" of the $AN M%:#E; PA;E P%;$EN bottle carries the $MC lo&o, +hereas the BEER PA;E P%;$EN bottle has no lo&o. 6=8 The $AN M%:#E; PA;E P%;$EN bottle cap is sta!ped +ith a coat of ar!s and the +ords 4$an Mi&uel Bre+er Philippines4 encirclin& the sa!e. The BEER PA;E P%;$EN bottle cap is sta!ped +ith the na!e 4BEER4 in the center, surrounded b the +ords 4Asia Bre+er %ncorporated Philippines.4 6@8 Jinall , there is a substantial price difference bet+een BEER PA;E P%;$EN 6currentl at PC.-1 per bottle8 and $AN M%:#E; PA;E P%;$EN 6currentl at P@.>> per bottle8. 'ne +ho pa s onl PC.-1 for a bottle of beer cannot e5pect to receive $an Mi&uel Pale Pilsen fro!

the store"eeper or bartender. The fact that the +ords pale pilsen are part of AB%As trade!ar" does not constitute an infrin&e!ent of $MCAs trade!ar": $AN M%:#E; PA;E P%;$EN, for 4pale pilsen4 are &eneric +ords descriptive of the color 64pale48, of a t pe of beer 64pilsen48, +hich is a li&ht bohe!ian beer +ith a stron& hops flavor that ori&inated in the Cit of Pilsen in CIechoslova"ia and beca!e fa!ous in the Middle A&es. 62ebsterAs Third Ne+ %nternational *ictionar of the En&lish ;an&ua&e, #nabrid&ed. Edited b Philip Babcoc" :ove. $prin&field, Mass.: : S C Merria! Co., KcL /0@=, pa&e /@/=.8 4Pilsen4 is a 4pri!aril &eo&raphicall descriptive +ord,4 6$ec. C, subpar. KeL Republic Act No. /==, as inserted b $ec. - of R.A. No. =.?8 hence, nonBre&isterable and not appropriable b an beer !anufacturer. The Trade!ar" ;a+ provides: $ec. C. . . .. The o+ner of tradeB!ar", tradeBna!e or serviceB!ar" used to distin&uish his &oods, business or services fro! the &oods, business or services of others shall have the ri&ht to re&ister the sa!e Kon the principal re&isterL, unless it: 555 555 555 6e8 Consists of a !ar" or tradeBna!e +hich, +hen applied to or used in connection +ith the &oods, business or services of the applicant is merely descriptive or deceptively misdescriptive of them, or +hen applied to or

used in connection +ith the &oods, business or services of the applicant isprimarily !eo!raphically descriptive or deceptivel !isdescriptive of the!, or is pri!aril !erel a surna!e.4 6E!phasis supplied.8 The +ords 4pale pilsen4 !a not be appropriated b $MC for its e5clusive use even if the are part of its re&istered trade!ar": $AN M%:#E; PA;E P%;$EN, an !ore than such descriptive +ords as 4evaporated !il",4 4to!ato "etchup,4 4cheddar cheese,4 4corn fla"es4 and 4coo"in& oil4 !a be appropriated b an sin&le !anufacturer of these food products, for no other reason than that he +as the first to use the! in his re&istered trade!ar". %nMasso 3ermanos, S.A. vs. &irector of Patents, 0C Phil. /.=, /.0 6/01.8, it +as held that a dealer in shoes cannot re&ister 4;eather $hoes4 as his trade!ar" because that +ould be !erel descriptive and it +ould be un<ust to deprive other dealers in leather shoes of the ri&ht to use the sa!e +ords +ith reference to their !erchandise. No one !a appropriate &eneric or descriptive +ords. The belon& to the public do!ain 6'n& Ai :ui vs. *irector of Patents, 0= Phil. =@., =@= K/011L8: A +ord or a co!bination of +ords +hich is !erel descriptive of an article of trade, or of its co!position, characteristics, or qualities, cannot be appropriated and protected as a trade!ar" to the e5clusion of its use b others. . . . inas!uch

as all persons have an equal ri&ht to produce and vend si!ilar articles, the also have the ri&ht to describe the! properl and to use an appropriate lan&ua&e or +ords for that purpose, and no person can appropriate to himself e'clusively any word or e'pression, properly descriptive of the article, its 8ualities, in!redients or characteristics, and thus li!it other persons in the use of lan&ua&e appropriate to the description of their !anufactures, the ri!ht to the use of such lan!ua!e )ein! common to all. This rule e5cludin& descriptive ter!s has also been held to appl to tradeBna!es. As to +hether +ords e!plo ed fall +ithin this prohibition, it is said that the true test is not +hether the are e5haustivel descriptive of the article desi&nated, but +hether in the!selves, and as the are co!!onl used b those +ho understand their !eanin&, the are reasonabl indicative and descriptive of the thin& intended. %f the are thus descriptive, and not arbitrar , the cannot be appropriated fro! &eneral use and beco!e the e5clusive propert of an one. 61- A!. 9ur. 1C-B1C..8 . . . . 'thers !a use the sa!e or si!ilar descriptive +ord in connection +ith their o+n +ares, provided the ta"e proper steps to prevent the public bein& deceived. 6Rich!ond Re!edies Co. vs. *r. Miles Medical Co., /= E. K-dL 10?.8

. . . . A descriptive +ord !a be ad!ittedl distinctive, especiall if the user is the first creator of the article. %t +ill, ho+ever, be denied protection, not because it lac"s distinctiveness, but rather because others are equall entitled to its use. 6- Call!an. #nfair Co!petition and Trade!ar"s, pp. ?=0B?@>.84 6E!phasis supplied.8 The circu!stance that the !anufacturer of BEER PA;E P%;$EN, Asia Bre+er %ncorporated, has printed its na!e all over the bottle of its beer product: on the label, on the bac" of the bottle, as +ell as on the bottle cap, disproves $MCAs char&e that AB% dishonestl and fraudulentl intends to pal! off its BEER PA;E P%;$EN as $MCAs product. %n vie+ of the visible differences bet+een the t+o products, the Court believes it is quite unli"el that a custo!er of avera&e intelli&ence +ould !ista"e a bottle of BEER PA;E P%;$EN for $AN M%:#E; PA;E P%;$EN. The fact that BEER PA;E P%;$EN li"e $AN M%:#E; PA;E P%;$EN is bottled in a!berBcolored steinie bottles of .-> !l. capacit and is also advertised in print, broadcast, and television !edia, does not necessaril constitute unfair co!petition. #nfair co!petition is the e!plo !ent of deception or an other !eans contrar to &ood faith b +hich a person shall pass off the &oods !anufactured b hi! or in +hich he deals, or his business, or services, for those of another +ho has alread established &ood+ill for his

si!ilar &oods, business or services, or an acts calculated to produce the sa!e result. 6$ec. -0, Republic Act No. /==, as a!ended.8 The la+ further enu!erates the !ore co!!on +a s of co!!ittin& unfair co!petition, thus: $ec. -0. . . . %n particular, and +ithout in an +a li!itin& the scope of unfair co!petition, the follo+in& shall be dee!ed &uilt of unfair co!petition: 6a8 An person, +ho in sellin& his &oods shall &ive the! the &eneral appearance of &oods of another !anufacturer or dealer, either as to the &oods the!selves or in the +rappin& of the pac"a&es in +hich the are contained, or the devices or +ords thereon, or in an other feature of their appearance, +hich +ould be li"el to influence purchasers to believe that the &oods offered are those of a !anufacturer or dealer other than the actual !anufacturer or dealer, or +ho other+ise clothes the &oods +ith such appearance as shall deceive the public and defraud another of his le&iti!ate trade, or an subsequent vendor of such &oods or an a&ent of an vendor en&a&ed in sellin& such &oods +ith a li"e purpose. 6b8 An person +ho b an artifice, or device, or +ho e!plo s an other !eans calculated to induce the false belief that such person is offerin&

the services of another +ho has identified such services in the !ind of the publicD or 6c8 An person +ho shall !a"e an false state!ent in the course of trade or +ho shall co!!it an other act contrar to &ood faith of a nature calculated to discredit the &oods, business or services of another. %n this case, the question to be deter!ined is +hether AB% is usin& a na!e or !ar" for its beer that has previousl co!e to desi&nate $MCAs beer, or +hether AB% is passin& off its BEER PA;E P%;$EN as $MCAs $AN M%:#E; PA;E P%;$EN. . . ..The universal test question is +hether the public is li"el to be deceived. Nothin& less than conduct tendin& to pass off one !anAs &oods or business as that of another +ill constitute unfair co!petition. Actual or probable deception and confusion on the part of the custo!ers b reason of defendantAs practices !ust al+a s appear. 6$hell Co., of the Philippines, ;td. vs. %nsular Petroleu! Refinin& Co. ;td. et al., /-> Phil. C.C, C.0.8 The use of AB% of the steinie bottle, si!ilar but not identical to the $AN M%:#E; PA;E P%;$EN bottle, is not unla+ful. As pointed out b AB%As counsel, $MC did not invent but !erel borro+ed the steinie bottle fro! abroad and it clai!s neither patent nor trade!ar" protection for that bottle shape and desi&n. 6$ee rollo,

pa&e 11.8 The CerveIa Especial and the Efes Pale Pilsen use the 4steinie4 bottle. 6$ee E5hibits 1@B*, 1@BE.8 The trial court found no infrin&e!ent of $MCAs bottle ) The court a&rees +ith defendant that there is no infrin&e!ent of plaintiffAs bottle, firstl , because accordin& to plaintiffAs +itness *eo&racias 7illadolid, it is a standard t pe of bottle called steinie, and to +itness 9ose Antonio :arcia, it is not a $an Mi&uel Corporation desi&n but a desi&n ori&inall developed in the #nited $tates b the :lass Container ManufacturerAs %nstitute and therefore lac"s e5clusivit . $econdl , the shape +as never re&istered as a trade!ar". E5hibit 4C4 is not a re&istration of a beer bottle desi&n required under Rep. Act /=1 but the re&istration of the na!e and other !ar"s of o+nership sta!ped on containers as required b Rep. Act =-.. Thirdl , the nec" of defendantAs bottle is !uch lar&er and has a distinct bul&e in its upper!ost part. 6p. /?=, #ollo.8 The petitionerAs contention that bottle siIe, shape and color !a not be the e5clusive propert of an one beer !anufacturer is +ell ta"en. $MCAs bein& the first to use the steinie bottle does not &ive $MC a vested ri&ht to use it to the e5clusion of ever one else. Bein& of functional or co!!on use, and not the e5clusive invention of an one, it is available to all +ho !i&ht need to use it +ithin the industr . Nobod can acquire an

e5clusive ri&ht to !ar"et articles suppl in& si!ple hu!an needs in containers or +rappers of the &eneral for!, siIe and character co!!onl and i!!ediatel used in !ar"etin& such articles 6* Buncio vs. Tan Tiao Bo", CPhil. /0>, /0CB/01.8 . . . protection a&ainst i!itation should be properl confined to nonfunctional features. Even if purel functional ele!ents are slavishl copied, the rese!blance +ill not support an action for unfair co!petition, and the first user cannot clai! secondar !eanin& protection. Nor can the first user predicate his clai! to protection on the ar&u!ent that his business +as established in reliance on an such unpatented nonfunctional feature, even 4at lar&e e5penditure of !one .4 6Call!an #nfair Co!petition, Trade!ar"s and Monopolies, $ec. /0... KCth Ed.L.8 6Petition for Revie+, p. -?.8 AB% does not use $MCAs steinie bottle. Neither did AB% cop it. AB% !a"es its o+n steinie bottle +hich has a fat bul&in& nec" to differentiate it fro! $MCAs bottle. The a!ber color is a functional feature of the beer bottle. As pointed out b AB%, all bottled beer produced in the Philippines is contained and sold in a!berBcolored bottles because a!ber is the !ost effective color in preventin& trans!ission of li&ht and provides the !a5i!u! protection to beer. As +as ruled in California Crushed (ruit Corporation vs. +aylor . and Candy Co.,

.? J-d ??1, a !erchant cannot be en<oined fro! usin& a t pe or color of bottle +here the sa!e has the useful purpose of protectin& the contents fro! the deleterious effects of li&ht ra s. Moreover, no one !a have a !onopol of an color. Not onl beer, but !ost !edicines, +hether in liquid or tablet for!, are sold in a!berBcolored bottles. That the AB% bottle has a .-> !l. capacit is not due to a desire to i!itate $MCAs bottle because that bottle capacit is the standard prescribed under Metrication Circular No. @@?, dated C *ece!ber /0@0, of the *epart!ent of Trade, Metric $ ste! Board. 2ith re&ard to the +hite label of both beer bottles, AB% e5plained that it used the color +hite for its label because +hite presents the stron&est contrast to the a!ber color of AB%As bottleD it is also the !ost econo!ical to use on labels, and the easiest to 4ba"e4 in the furnace 6p. /=, T$N of $epte!ber ->, /0??8. No one can have a !onopol of the color a!ber for bottles, nor of +hite for labels, nor of the rectan&ular shape +hich is the usual confi&uration of labels. Needless to sa , the shape of the bottle and of the label is uni!portant. 2hat is all i!portant is the na!e of the product +ritten on the label of the bottle for that is ho+ one beer !a be distin&uished for! the others. %n &y uncio v. +an +iao o$, C- Phil. /0>, /0=B/0@, +here t+o co!petin& tea products +ere both labelled as Jor!osan tea, both sold in 1Bounce pac"a&es !ade of

ordinar +rappin& paper of conventional color, both +ith labels containin& desi&ns dra+n in &reen in" and Chinese characters +ritten in red in", one label sho+in& a doubleBdec"ed <ar in the center, the other, a flo+er pot, this court found that the rese!blances bet+een the desi&ns +ere not sufficient to !islead the ordinar intelli&ent bu er, hence, there +as no unfair co!petition. The Court held: . . . . %n order that there !a be deception of the bu in& public in the sense necessar to constitute unfair co!petition, it is necessar to suppose a public accusto!ed to bu , and therefore to so!e e5tent fa!iliar +ith, the &oods in question. The test of fraudulent si!ulation is to be found in the li"elihood of the deception of persons in so!e !easure acquainted +ith an established desi&n and desirous of purchasin& the co!!odit +ith +hich that desi&n has been associated. The test is not found in the deception, or possibilit of the deception, of the person +ho "no+s nothin& about the desi&n +hich has been counterfeited, and +ho !ust be indifferent as bet+een that and the other. The si!ulation, in order to be ob<ectionable, !ust be such as appears li"el to !islead the ordinaril intelli&ent bu er +ho has a need to suppl and is fa!iliar +ith the article that he see"s to purchase. The !ain thrust of $MCAs co!plaint if not infrin&e!ent of

its trade!ar", but unfair co!petition arisin& for! the alle&edl 4confusin& si!ilarit 4 in the &eneral appearance or trade dress of AB%As BEER PA;E P%;$EN beside $MCAs $AN M%:#E; PA;E P%;$EN 6p. ->0, #ollo8 $MC clai!s that the 4trade dress4 of BEER PA;E P%;$EN is 4confusin&l si!ilar4 to its $AN M%:#E; PA;E P%;$EN because both are bottled in .-> !l. steinie t pe, a!berBcolored bottles +ith +hite rectan&ular labels. ,o+ever, +hen as in this case, the na!es of the co!petin& products are clearl different and their respective sources are pro!inentl printed on the label and on other parts of the bottle, !ere si!ilarit in the shape and siIe of the container and label, does not constitute unfair co!petition. The steinie bottle is a standard bottle for beer and is universall used. $MC did not invent it nor patent it. The fact that $MCAs bottle is re&istered under R.A. No. =-. 6as a!ended b RA 1@>>, An Act to Re&ulate the #se of *ul $ta!ped or Mar"ed Bottles, Bo5es, Cas"s, Me&s, Barrels and 'ther $i!ilar Containers8 si!pl prohibits !anufacturers of other foodstuffs fro! the unauthoriIed use of $MCAs bottles b refillin& these +ith their products. %t +as not unco!!on then for products such as patis 6fish sauce8 and toyo 6so sauce8 to be sold in rec cled $AN M%:#E; PA;E P%;$EN bottles. Re&istration of $MCAs beer bottles did not &ive $MC a patent on the steinie or

on bottles of si!ilar siIe, shape or color. Most containers are standardiIed because the are usuall !ade b the sa!e !anufacturer. Mil", +hether in po+dered or liquid for!, is sold in unifor! tin cans. The sa!e can be said of the standard "etchup or vine&ar bottle +ith its fa!iliar elon&ated nec". Man other &rocer ite!s such as coffee, !a onnaise, pic"les and peanut butter are sold in standard &lass <ars. The !anufacturers of these foodstuffs have equal ri&ht to use these standards tins, bottles and <ars for their products. 'nl their respective labels distin&uish the! fro! each other. 9ust as no !il" producer !a sue the others for unfair co!petition because the sell their !il" in the sa!e siIe and shape of !il" can +hich he uses, neither !a $MC clai! unfair co!petition arisin& fro! the fact that AB%As BEER PA;E P%;$EN is sold, li"e $MCAs $AN M%:#E; PA;E P%;$EN in a!ber steinie bottles. The record does not bear out $MCAs apprehension that BEER PA;E P%;$EN is bein& passed off as $AN M%:#E; PA;E P%;$EN. This is unli"el to happen for consu!ers or bu ers of beer &enerall order their beer b brand. As pointed out b AB%As counsel, in super!ar"ets and tiendas, beer is ordered b brand, and the custo!er surrenders his e!pt replace!ent bottles or pa s a deposit to &uarantee the return of the e!pties. %f his e!pties are $AN M%:#E; PA;E P%;$EN, he +ill &et $AN M%:#E; PA;E P%;$EN as replace!ent. %n sariB sari stores, beer is also ordered fro! the tindera b

brand. The sa!e is true in restaurants, pubs and beer &ardens ) beer is ordered fro! the +aiters b brand. 64p. cit. pa&e 1>.8 Considerin& further that $AN M%:#E; PA;E P%;$EN has virtuall !onopoliIed the do!estic beer !ar"et for the past hundred ears, those +ho have been drin"in& no other beer but $AN M%:#E; PA;E P%;$EN these !an ears certainl "no+ their beer too +ell to be deceived b a ne+co!er in the !ar"et. %f the &ravitate to AB%As cheaper beer, it +ill not be because the are confused or deceived, but because the find the co!petin& product to their taste. 'ur decision in this case +ill not di!inish our rulin& in 4*el Monte Corporation vs. Court of Appeals and $unshine $auce Manufacturin& %ndustries,4 /?/ $CRA C/>, C/0, 3 that: . . . to deter!ine +hether a trade!ar" has been infrin&ed, +e !ust consider the !ar" as a +hole and not as dissected. %f the bu er is deceived, it is attributable to the !ar"s as a totalit , not usuall to an part of it. That rulin& !a not appl to all "inds of products. The Court itself cautioned that in resolvin& cases of infrin&e!ent and unfair co!petition, the courts should 4ta"e into consideration several factors +hich +ould affect its conclusion, to +it: the a&e, trainin& and education of the usual purchaser, the nature and cost of the article, +hether the article is bou&ht for i!!ediate

consu!ption and also the conditions under +hich it is usuall purchased4 6/?/ $CRA C/>, C/?BC/08. The *el Monte case involved catsup, a co!!on household ite! +hich is bou&ht off the store shelves b house+ives and house help +ho, if the are illiterate and cannot identif the product b na!e or brand, +ould ver li"el identif it b !ere recollection of its appearance. $ince the co!petitor, $unshine $auce Mf&. %ndustries, not onl used rec cled *el Monte bottles for its catsup 6despite the +arnin& e!bossed on the bottles: 4*el Monte Corporation. Not to be refilled.48 but also used labels +hich +ere 4a colorable i!itation4 of *el MonteAs label, +e held that there +as infrin&e!ent of *el MonteAs trade!ar" and unfair co!petition b $unshine. 'ur rulin& in *el Monte +ould not appl to beer +hich is not usuall pic"ed fro! a store shelf but ordered b brand b the beer drin"er hi!self fro! the store"eeper or +aiter in a pub or restaurant. Moreover, $MCAs brand or trade!ar": 4$AN M%:#E; PA;E P%;$EN4 is not infrin&ed b AB%As !ar": 4BEER NA BEER4 or 4BEER PA;E P%;$EN.4 AB% !a"es its o+n bottle +ith a bul&in& nec" to differentiate it fro! $MCAs bottle, and prints AB%As na!e in three 6.8 places on said bottle 6front, bac" and bottle cap8 to prove that it has no intention to pass of its 4BEER4 as 4$AN M%:#E;.4 There is no confusin& si!ilarit bet+een the co!petin& beers for the na!e of one is 4$AN M%:#E;4 +hile the co!petitor is plain 4BEER4 and the points of dissi!ilarit

bet+een the t+o outnu!ber their points of si!ilarit . Petitioner AB% has neither infrin&ed $MCAs trade!ar" nor co!!itted unfair co!petition +ith the latterAs $AN M%:#E; PA;E P%;$EN product. 2hile its BEER PA;E P%;$EN ad!ittedl co!petes +ith the latter in the open !ar"et, that co!petition is neither unfair nor fraudulent. ,ence, +e !ust den $MCAs pra er to suppress it. 2,EREJ'RE, findin& the petition for revie+ !eritorious, the sa!e is hereb &ranted. The decision and resolution of the Court of Appeals in CAB:.R. C7 No. -?/>C are hereb set aside and that of the trial court is RE%N$TATE* and AJJ%RME*. Costs a&ainst the private respondent. $' 'R*ERE*. 7arvasa, C."., idin, #e!alado, #omero, 7ocon, ellosillo and Melo, ""., concur. (eliciano, "., too$ no part.

FIRST DIVISION [G.R. No. 114508. November 19, 1999] PRIBHDAS J. MIRPURI, petitioner, vs. C UR! " APP#A$S, DIR#C! R " PA!#N!S %&' ()e BARBI* N C RP RA!I N, respondents.

D#CISI PUN , J.+

The Convention of Paris for the Protection of Industrial Property is a multi lateral treaty !hich the Philippines "ound itself to honor and enforce in this country# $s to !hether or not the treaty affords protection to a forei%n corporation a%ainst a Philippine applicant for the re%istration of a similar trademar& is the principal issue in this case# On 'une ()* (+,-* one .olita /sco"ar* the predecessor in interest of petitioner Pri"hdas '# 0irpuri* filed an application !ith the 1ureau of Patents for the re%istration of the trademar& 21ar"i3on2 for use in "rassieres and ladies under%arments# /sco"ar alle%ed that she had "een manufacturin% and sellin% these products under the firm name 2. 4 10 Commercial2 since 0arch 5* (+,-# Private respondent 1ar"i3on Corporation* a corporation or%ani3ed and doin% "usiness under the la!s of Ne! 6or&* 7#S#$#* opposed the application# It claimed that8 2The mar& 1$R1I9ON of respondent applicant is confusin%ly similar to the trademar& 1$R1I9ON !hich opposer o!ns and has not a"andoned# That opposer !ill "e dama%ed "y the re%istration of the mar& 1$R1I9ON and its "usiness reputation and %ood!ill !ill suffer %reat and irrepara"le in:ury# That the respondent applicant;s use of the said mar&

1$R1I9ON !hich resem"les the trademar& used and o!ned "y opposer* constitutes an unla!ful appropriation of a mar& previously used in the Philippines and not a"andoned and therefore a statutory violation of Section < =d> of Repu"lic $ct No# (??* as amended#2@(A This !as doc&eted as I&(er P%r(e, C%,e No. -8- .IPC No. -8-/. $fter filin% of the pleadin%s* the parties su"mitted the case for decision# On 'une (B* (+,<* the Director of Patents rendered :ud%ment dismissin% the opposition and %ivin% due course to /sco"ar;s application* thus8 2CD/R/FOR/* the opposition should "e* as it is here"y* DIS0ISS/D# $ccordin%ly* $pplication Serial No# (+-(- for the re%istration of the trademar& 1$R1I9ON* of respondent .olita R# /sco"ar* is %iven due course# IT IS SO ORD/R/D#2@EA This decision "ecame final and on Septem"er ((* (+,<* .olita /sco"ar !as issued a certificate of re%istration for the trademar& 21ar"i3on#2 The trademar& !as 2for use in 2"rassieres and lady;s under!ear %arments li&e panties#2@5A /sco"ar later assi%ned all her ri%hts and interest over the trademar& to petitioner Pri"hdas '# 0irpuri !ho* under his firm name then* the 21onito /nterprises*2 !as the sole and eFclusive distri"utor of /sco"ar;s 21ar"i3on2 products# In (+,+* ho!ever* /sco"ar failed to file !ith the 1ureau of

Patents the $ffidavit of 7se of the trademar& reGuired under Section (E of Repu"lic $ct =R#$#> No# (??* the Philippine Trademar& .a!# Due to this failure* the 1ureau of Patents cancelled /sco"ar;s certificate of re%istration# On 0ay E,* (+B(* /sco"ar reapplied for re%istration of the cancelled trademar&# 0irpuri filed his o!n application for re%istration of /sco"ar;s trademar&# /sco"ar later assi%ned her application to herein petitioner and this application !as opposed "y private respondent# The case !as doc&eted as I&(er P%r(e, C%,e No. 0049 .IPC No. 0049/. In its opposition* private respondent alle%ed that8 2=a> The Opposer has adopted the trademar& 1$R1I9ON =!ord>* sometime in 'une (+55 and has then used it on various &inds of !earin% apparel# On $u%ust (<* (+5<* Opposer o"tained from the 7nited States Patent Office a more recent re%istration of the said mar& under Certificate of Re%istration No# 5(?*(?(# On 0arch (* (+<+* Opposer o"tained from the 7nited States Patent Office a more recent re%istration for the said trademar& under Certificate of Re%istration No# )-,*E(<* a copy of !hich is here!ith attached as $nneF H$#; Said Certificate of Re%istration covers the follo!in% %oods !earin% apparel8 ro"es* pa:amas* lin%erie* ni%ht%o!ns and slipsI ="> Sometime in 0arch (+,?* Opposer further adopted the trademar& 1$R1I9ON and 1ee desi%n and used the said mar& in various &inds of !earin% apparel# On 0arch ()* (+,,* Opposer secured from the 7nited States Patent Office a

re%istration of the said mar& under Certificate of Re%istration No# (*-?(*E,,* a copy of !hich is herein enclosed as $nneF H1#; The said Certificate of Re%istration covers the follo!in% %oods8 ro"es* pa:amas* lin%erie* ni%ht%o!ns and slipsI =c> Still further* sometime in (+?(* Opposer adopted the trademar& 1$R1I9ON and a Representation of a Coman and thereafter used the said trademar& on various &inds of !earin% apparel# Opposer o"tained from the 7nited States Patent Office re%istration of the said mar& on $pril )* (+B5 under Certificate of Re%istration No# (*E55*??? for the follo!in% %oods8 !earin% apparel8 ro"es* pa:amas* ni%ht%o!ns and lin%erie# $ copy of the said certificate of re%istration is here!ith enclosed as $nneF HC#; =d> $ll the a"ove re%istrations are su"sistin% and in force and Opposer has not a"andoned the use of the said trademar&s# In fact* Opposer* throu%h a !holly o!ned Philippine su"sidiary* the Philippine .in%erie Corporation* has "een manufacturin% the %oods covered "y said re%istrations and sellin% them to various countries* there"y earnin% valua"le forei%n eFchan%e for the country# $s a result of respondent applicant;s misappropriation of Opposer;s 1$R1I9ON trademar&* Philippine .in%erie Corporation is prevented from sellin% its %oods in the local mar&et* to the dama%e and pre:udice of Opposer and its !holly o!ned su"sidiary# =e> The Opposer;s %oods "earin% the trademar& 1$R1I9ON have "een used in many countries* includin% the Philippines* for at least <- years and has en:oyed international reputation and %ood !ill for their Guality# To protect its re%istrations in

countries !here the %oods covered "y the re%istrations are "ein% sold* Opposer has procured the re%istration of the trademar& 1$R1I9ON in the follo!in% countries8 $ustralia* $ustria* $"u Dha"i* $r%entina* 1el%ium* 1olivia* 1ahrain* Canada* Chile* Colom"ia* Denmar&* /cuador* France* Cest Jermany* Jreece* Juatemala* Don%&on%* Donduras* Italy* 'apan* 'ordan* .e"anon* 0eFico* 0orocco* Panama* Ne! 9ealand* Nor!ay* S!eden* S!it3erland* Syria* /l Salvador* South $frica* 9am"ia* /%ypt* and Iran* amon% othersI =f> To enhance its international reputation for Guality %oods and to further promote %ood!ill over its name* mar&s and products* Opposer has eFtensively advertised its products* trademar&s and name in various pu"lications !hich are circulated in the 7nited States and many countries around the !orld* includin% the PhilippinesI =%> The trademar& 1$R1I9ON !as fraudulently re%istered in the Philippines "y one .olita R# /sco"ar under Re%istration No# E(+E-* issued on Septem"er ((* (+,<* in violation of $rticle (B+ =5> of the Revised Penal Code and Section < =d> of the Trademar& .a!# Derein respondent applicant acGuired "y assi%nment the Hri%hts; to the said mar& previously re%istered "y .olita /sco"ar* hence respondent applicant;s title is vitiated "y the same fraud and criminal act# 1esides* Certificate of Re%istration No# E(+E- has "een cancelled for failure of either .olita /sco"ar or herein respondent applicant* to seasona"ly file the statutory affidavit of use# 1y applyin% for a re re%istration of the mar& 1$R1I9ON su":ect of this opposition* respondent applicant see&s to perpetuate the fraud

and criminal act committed "y .olita /sco"ar# =h> Opposer;s 1$R1I9ON as !ell as its 1$R1I9ON and 1ee Desi%n and 1$R1I9ON and Representation of a Coman trademar&s Gualify as !ell &no!n trademar&s entitled to protection under $rticle 6bis of the Convention of Paris for the Protection of Industrial Property and further amplified "y the 0emorandum of the 0inister of Trade to the Donora"le Director of Patents dated Octo"er E)* (+B5 @sicA*@<A /Fecutive Order No# +(5 dated Octo"er ,* (+?5 and the 0emorandum of the 0inister of Trade and Industry to the Donora"le Director of Patents dated Octo"er E)* (+B5# =i> The trademar& applied for "y respondent applicant is identical to Opposer;s 1$R1I9ON trademar& and constitutes the dominant part of Opposer;s t!o other mar&s namely* 1$R1I9ON and 1ee desi%n and 1$R1I9ON and a Representation of a Coman# The continued use "y respondent applicant of Opposer;s trademar& 1$R1I9ON on %oods "elon%in% to Class E) constitutes a clear case of commercial and criminal piracy and if allo!ed re%istration !ill violate not only the Trademar& .a! "ut also $rticle (B+ of the Revised Penal Code and the commitment of the Philippines to an international treaty#2@)A Replyin% to private respondent;s opposition* petitioner raised the defense of res judicata# On 0arch E* (+BE* /sco"ar assi%ned to petitioner the use of the "usiness name 21ar"i3on International#2 Petitioner re%istered the name !ith the Department of Trade and Industry

=DTI> for !hich a certificate of re%istration !as issued in (+B,# Forth!ith* private respondent filed "efore the Office of .e%al $ffairs of the DTI a petition for cancellation of petitioner;s "usiness name# On Novem"er E?* (++(* the DTI* Office of .e%al $ffairs* cancelled petitioner;s certificate of re%istration* and declared private respondent the o!ner and prior user of the "usiness name 21ar"i3on International#2 Thus8 2CD/R/FOR/* the petition is here"y JR$NT/D and petitioner is declared the o!ner and prior user of the "usiness name 21$R1I9ON INT/RN$TION$.2 under Certificate of Re%istration No# B, -+--- dated 0arch (-* (+B, and issued in the name of respondent* is @sicA here"y ordered revo&ed and cancelled# F F F#2@?A 0ean!hile* in IPC No# E-<+* the evidence of "oth parties !ere received "y the Director of Patents# On 'une (B* (++E* the Director rendered a decision declarin% private respondent;s opposition "arred "y res judicata and %ivin% due course to petitioner;s application for re%istration* to !it8 2CD/R/FOR/* the present Opposition in Inter Partes Case No# E-<+ is here"y D/C.$R/D 1$RR/D "y res :udicata and is here"y DIS0ISS/D# $ccordin%ly* $pplication Serial No# <)-(( for trademar& 1$R1I9ON filed "y Pri"hdas '# 0irpuri is JIV/N D7/ CO7RS/# SO ORD/R/D#2@,A

Private respondent Guestioned this decision "efore the Court of $ppeals in C$ J#R# SP No# EB<()# On $pril 5-* (++5* the Court of $ppeals reversed the Director of Patents findin% that IPC No# ?B? !as not "arred "y :ud%ment in IPC No# E-<+ and ordered that the case "e remanded to the 1ureau of Patents for further proceedin%s* viz8 2CD/R/FOR/* the appealed Decision No# +E (5 dated 'une (B* (++E of the Director of Patents in Inter Partes Case No# E-<+ is here"y S/T $SID/I and the case is here"y remanded to the 1ureau of Patents for further proceedin%s* in accordance !ith this pronouncement# No costs#2@BA In a Resolution dated 0arch (?* (++<* the Court of $ppeals denied reconsideration of its decision#@+A Dence* this recourse# 1efore us* petitioner raises the follo!in% issues8 2(# CD/TD/R OR NOT TD/ D/CISION OF TD/ DIR/CTOR OF P$T/NTS IN INT/R P$RT/S C$S/ NO# ?B? R/ND/R/D ON '7N/ (B* (+,<* $NN/K C D/R/OF* CONSTIT7T/D R/S '7DIC$T$ IN SO F$R $S TD/ C$S/ 1/FOR/ TD/ DIR/CTOR OF P$T/NTS IS CONC/RN/DI E# CD/TD/R OR NOT TD/ DIR/CTOR OF P$T/NTS CORR/CT.6 $PP.I/D TD/ PRINCIP./ OF R/S '7DIC$T$ IN DIS0ISSINJ PRIV$T/ R/SPOND/NT 1$R1I9ON;S OPPOSITION TO P/TITION/R;S $PP.IC$TION FOR R/JISTR$TION FOR TD/ TR$D/0$RL 1$R1I9ON* CDICD D$S SINC/ RIP/N/D TO C/RTIFIC$T/ OF R/JISTR$TION NO#

)5+E- ON NOV/01/R (?* (++EI 5# CD/TD/R OR NOT TD/ R/M7ISIT/ TD$T $ ;'7DJ0/NT ON TD/ 0/RITS; R/M7IR/D $ ;D/$RINJ CD/R/ 1OTD P$RTI/S $R/ S7PPOS/D TO $DD7C/ /VID/NC/; $ND CD/TD/R TD/ 'OINT S710ISSION OF TD/ P$RTI/S TO $ C$S/ ON TD/ 1$SIS OF TD/IR R/SP/CTIV/ P./$DINJS CITDO7T PR/S/NTINJ T/STI0ONI$. OR DOC70/NT$R6 /VID/NC/ F$..S CITDIN TD/ 0/$NINJ OF ;'7DJ0/NT ON TD/ 0/RITS; $S ON/ OF TD/ R/M7ISIT/S TO CONSTIT7T/ R/S '7DIC$T$I <# CD/TD/R $ D/CISION OF TD/ D/P$RT0/NT OF TR$D/ $ND IND7STR6 C$NC/..INJ P/TITION/R;S FIR0 N$0/ ;1$R1I9ON INT/RN$TION$.; $ND CDICD D/CISION IS STI.. P/NDINJ R/CONSID/R$TION N/V/R OFF/R/D IN /VID/NC/ 1/FOR/ TD/ DIR/CTOR OF P$T/NTS IN INT/R P$RT/S C$S/ NO# E-<+ D$S TD/ RIJDT TO D/CID/ S7CD C$NC/..$TION NOT ON TD/ 1$SIS OF TD/ 17SIN/SS N$0/ .$C =$S I0P./0/NT/D 16 TD/ 17R/$7 OF DO0/STIC TR$D/> 17T ON TD/ 1$SIS OF TD/ P$RIS CONV/NTION $ND TD/ TR$D/0$RL .$C =R#$# (??> CDICD IS CITDIN TD/ ORIJIN$. $ND /KC.7SIV/ '7RISDICTION OF TD/ DIR/CTOR OF P$T/NTS#2@(-A 1efore rulin% on the issues of the case* there is need for a "rief "ac&%round on the function and historical development of trademar&s and trademar& la!#

$ 2trademar&2 is defined under R#$# (??* the Trademar& .a!* as includin% 2any !ord* name* sym"ol* em"lem* si%n or device or any com"ination thereof adopted and used "y a manufacturer or merchant to identify his %oods and distin%uish them from those manufactured* sold or dealt in "y others#2@((A This definition has "een simplified in R#$# No# BE+5* the Intellectual Property Code of the Philippines* !hich defines a 2trademar&2 as 2any visi"le si%n capa"le of distin%uishin% %oods#2@(EA In Philippine :urisprudence* the function of a trademar& is to point out distinctly the ori%in or o!nership of the %oods to !hich it is affiFedI to secure to him* !ho has "een instrumental in "rin%in% into the mar&et a superior article of merchandise* the fruit of his industry and s&illI to assure the pu"lic that they are procurin% the %enuine articleI to prevent fraud and impositionI and to protect the manufacturer a%ainst su"stitution and sale of an inferior and different article as his product#@(5A 0odern authorities on trademar& la! vie! trademar&s as performin% three distinct functions8 =(> they indicate ori%in or o!nership of the articles to !hich they are attachedI =E> they %uarantee that those articles come up to a certain standard of GualityI and =5> they advertise the articles they sym"oli3e#@(<A Sym"ols have "een used to identify the o!nership or ori%in of articles for several centuries#@()A $s early as )*--- 1#C#* mar&in%s on pottery have "een found "y archaeolo%ists# Cave dra!in%s in south!estern /urope sho! "ison !ith sym"ols on their flan&s#@(?A $rchaeolo%ical discoveries of ancient Jree&

and Roman inscriptions on sculptural !or&s* paintin%s* vases* precious stones* %lass!or&s* "ric&s* etc# reveal some features !hich are thou%ht to "e mar&s or sym"ols# These mar&s !ere affiFed "y the creator or ma&er of the article* or "y pu"lic authorities as indicators for the payment of taF* for disclosin% state monopoly* or devices for the settlement of accounts "et!een an entrepreneur and his !or&men#@(,A In the 0iddle $%es* the use of many &inds of mar&s on a variety of %oods !as commonplace# Fifteenth century /n%land sa! the compulsory use of identifyin% mar&s in certain trades# There !ere the "a&er;s mar& on "read* "ottlema&er;s mar&s* smith;s mar&s* tanner;s mar&s* !atermar&s on paper* etc#@(BA /very %uild had its o!n mar& and every master "elon%in% to it had a special mar& of his o!n# The mar&s !ere not trademar&s "ut police mar&s compulsorily imposed "y the soverei%n to let the pu"lic &no! that the %oods !ere not 2forei%n2 %oods smu%%led into an area !here the %uild had a monopoly* as !ell as to aid in tracin% defective !or& or poor craftsmanship to the artisan#@(+A For a similar reason* merchants also used merchants; mar&s# 0erchants dealt in %oods acGuired from many sources and the mar&s ena"led them to identify and reclaim their %oods upon recovery after ship!rec& or piracy#@E-A Cith constant use* the mar& acGuired popularity and "ecame voluntarily adopted# It !as not intended to create or continue monopoly "ut to %ive the customer an indeF or %uarantee of Guality#@E(A It !as in the late (Bth century !hen the industrial

revolution %ave rise to mass production and distri"ution of consumer %oods that the mar& "ecame an important instrumentality of trade and commerce#@EEA 1y this time* trademar&s did not merely identify the %oodsI they also indicated the %oods to "e of satisfactory Guality* and there"y stimulated further purchases "y the consumin% pu"lic# @E5A /ventually* they came to sym"oli3e the %ood!ill and "usiness reputation of the o!ner of the product and "ecame a property ri%ht protected "y la!#@E<A The common la! developed the doctrine of trademar&s and tradenames 2to prevent a person from palmin% off his %oods as another;s* from %ettin% another;s "usiness or in:urin% his reputation "y unfair means* and* from defraudin% the pu"lic#2@E)A Su"seGuently* /n%land and the 7nited States enacted national le%islation on trademar&s as part of the la! re%ulatin% unfair trade#@E?A It "ecame the ri%ht of the trademar& o!ner to eFclude others from the use of his mar&* or of a confusin%ly similar mar& !here confusion resulted in diversion of trade or financial in:ury# $t the same time* the trademar& served as a !arnin% a%ainst the imitation or fa&in% of products to prevent the imposition of fraud upon the pu"lic#@E,A Today* the trademar& is not merely a sym"ol of ori%in and %ood!illI it is often the most effective a%ent for the actual creation and protection of %ood!ill# It imprints upon the pu"lic mind an anonymous and impersonal %uaranty of satisfaction* creatin% a desire for further satisfaction# In other !ords* the mar& actually sells the %oods#@EBA The mar& has "ecome the 2silent salesman*2 the conduit throu%h !hich

direct contact "et!een the trademar& o!ner and the consumer is assured# It has invaded popular culture in !ays never anticipated that it has "ecome a more convincin% sellin% point than even the Guality of the article to !hich it refers#@E+A In the last half century* the unparalleled %ro!th of industry and the rapid development of communications technolo%y have ena"led trademar&s* tradenames and other distinctive si%ns of a product to penetrate re%ions !here the o!ner does not actually manufacture or sell the product itself# Jood!ill is no lon%er confined to the territory of actual mar&et penetrationI it eFtends to 3ones !here the mar&ed article has "een fiFed in the pu"lic mind throu%h advertisin%#@5-A Chether in the print* "roadcast or electronic communications medium* particularly on the Internet*@5(A advertisin% has paved the !ay for %ro!th and eFpansion of the product "y creatin% and earnin% a reputation that crosses over "orders* virtually turnin% the !hole !orld into one vast mar&etplace# This is the mise-en-scene of the present controversy# Petitioner "rin%s this action claimin% that 21ar"i3on2 products have "een sold in the Philippines since (+,-# Petitioner developed this mar&et "y !or&in% lon% hours and spendin% considera"le sums of money on advertisements and promotion of the trademar& and its products# No!* almost thirty years later* private respondent* a forei%n corporation* 2s!a%%ers into the country li&e a conGuerin% hero*2 usurps the trademar& and invades petitioner;s mar&et#@5EA 'ustice and fairness dictate that private respondent "e prevented from appropriatin% !hat is not its o!n# .e%ally* at the same time*

private respondent is "arred from Guestionin% petitioner;s o!nership of the trademar& "ecause of res judicata#@55A .iterally* res judicata means a matter ad:ud%ed* a thin% :udicially acted upon or decidedI a thin% or matter settled "y :ud%ment#@5<A In res judicata* the :ud%ment in the first action is considered conclusive as to every matter offered and received therein* as to any other admissi"le matter !hich mi%ht have "een offered for that purpose* and all other matters that could have "een ad:ud%ed therein#@5)A Res judicata is an a"solute "ar to a su"seGuent action for the same causeI and its reGuisites are8 =a> the former :ud%ment or order must "e finalI ="> the :ud%ment or order must "e one on the meritsI =c> it must have "een rendered "y a court havin% :urisdiction over the su":ect matter and partiesI =d> there must "e "et!een the first and second actions* identity of parties* of su":ect matter and of causes of action#@5?A The Solicitor Jeneral* on "ehalf of respondent Director of Patents* has :oined cause !ith petitioner# 1oth claim that all the four elements of res judicata have "een complied !ith8 that the :ud%ment in IPC No# ?B? !as final and !as rendered "y the Director of Patents !ho had :urisdiction over the su":ect matter and partiesI that the :ud%ment in IPC No# ?B? !as on the meritsI and that the lac& of a hearin% !as immaterial "ecause su"stantial issues !ere raised "y the parties and passed upon "y the Director of Patents#@5,A The decision in IPC No# ?B? reads as follo!s8 2F F F#

Neither party too& testimony nor adduced documentary evidence# They su"mitted the case for decision "ased on the pleadin%s !hich* to%ether !ith the pertinent records* have all "een carefully considered# $ccordin%ly* the only issue for my disposition is !hether or not the herein opposer !ould pro"a"ly "e dama%ed "y the re%istration of the trademar& 1$R1I9ON sou%ht "y the respondent applicant on the %round that it so resem"les the trademar& 1$R1I9ON alle%edly used and o!ned "y the former to "e Hli&ely to cause confusion* mista&e or to deceive purchasers#; On record* there can "e no dou"t that respondent applicant;s sou%ht to "e re%istered trademar& 1$R1I9ON is similar* in fact o"viously identical* to opposer;s alle%ed trademar& 1$R1I9ON* in spellin% and pronunciation# The only apprecia"le "ut very ne%li%i"le difference lies in their respective appearances or manner of presentation# Respondent applicant;s trademar& is in "old letters =set a%ainst a "lac& "ac&%round>* !hile that of the opposer is offered in stylish script letters# It is opposer;s assertion that its trademar& 1$R1I9ON has "een used in trade or commerce in the Philippines prior to the date of application for the re%istration of the identical mar& 1$R1I9ON "y the respondent applicant# Do!ever* the alle%ation of facts in opposer;s verified notice of opposition is devoid of such material information# In fact* a readin% of the teFt of said verified opposition reveals an apparent* if not deli"erate* omission of the date =or year> !hen opposer;s

alle%ed trademar& 1$R1I9ON !as first used in trade in the Philippines =see par# No# (* p# E* Verified Notice of Opposition* Rec#># Thus* it cannot here and no! "e ascertained !hether opposer;s alle%ed use of the trademar& 1$R1I9ON could "e prior to the use of the identical mar& "y the herein respondent applicant* since the opposer attempted neither to su"stantiate its claim of use in local commerce !ith any proof or evidence# Instead* the opposer su"mitted the case for decision "ased merely on the pleadin%s# On the other hand* respondent applicant asserted in her amended application for re%istration that she first used the trademar& 1$R1I9ON for "rassiere =or ;"rasseire;> and ladies under!ear %arments and panties as early as 0arch 5* (+,-# 1e that as it may* there "ein% no testimony ta&en as to said date of first use* respondent applicant !ill "e limited to the filin% date* 'une ()* (+,-* of her application as the date of first use =Rule (,5* Rules of Practice in Trademar& Cases># From the fore%oin%* I conclude that the opposer has not made out a case of pro"a"le dama%e "y the re%istration of the respondent applicant;s mar& 1$R1I9ON# CD/R/FOR/* the opposition should "e* as it is here"y* DIS0ISS/D# $ccordin%ly* $pplication Serial No# (+-(-* for the re%istration of the trademar& 1$R1I9ON of respondent .olita R# /sco"ar* is %iven due course#2@5BA The decision in IPC No# ?B? !as a :ud%ment on the merits and it !as error for the Court of $ppeals to rule that it !as not# $ :ud%ment is on the merits !hen it determines the ri%hts

and lia"ilities of the parties "ased on the disclosed facts* irrespective of formal* technical or dilatory o":ections#@5+A It is not necessary that a trial should have "een conducted# If the court;s :ud%ment is %eneral* and not "ased on any technical defect or o":ection* and the parties had a full le%al opportunity to "e heard on their respective claims and contentions* it is on the merits althou%h there !as no actual hearin% or ar%uments on the facts of the case#@<-A In the case at "ar* the Director of Patents did not dismiss private respondent;s opposition on a sheer technicality# $lthou%h no hearin% !as conducted* "oth parties filed their respective pleadin%s and !ere %iven opportunity to present evidence# They* ho!ever* !aived their ri%ht to do so and su"mitted the case for decision "ased on their pleadin%s# The lac& of evidence did not deter the Director of Patents from rulin% on the case* particularly on the issue of prior use* !hich %oes into the very su"stance of the relief sou%ht "y the parties# Since private respondent failed to prove prior use of its trademar&* /sco"ar;s claim of first use !as upheld# The :ud%ment in IPC No# ?B? "ein% on the merits* petitioner and the Solicitor Jeneral alle%e that IPC No# ?B? and IPC No# E-<+ also comply !ith the fourth reGuisite of res judicata* i.e.* they involve the same parties and the same su":ect matter* and have identical causes of action# 7ndisputedly* IPC No# ?B? and IPC No# E-<+ involve the same parties and the same su":ect matter# Petitioner herein is the assi%nee of /sco"ar !hile private respondent is the same

$merican corporation in the first case# The su":ect matter of "oth cases is the trademar& 21ar"i3on#2 Private respondent counter ar%ues* ho!ever* that the t!o cases do not have identical causes of action# Ne! causes of action !ere alle%edly introduced in IPC No# E-<+* such as the prior use and re%istration of the trademar& in the 7nited States and other countries !orld!ide* prior use in the Philippines* and the fraudulent re%istration of the mar& in violation of $rticle (B+ of the Revised Penal Code# Private respondent also cited protection of the trademar& under the Convention of Paris for the Protection of Industrial Property* specifically $rticle ?bis thereof* and the implementation of $rticle ?bis "y t!o 0emoranda dated Novem"er E-* (+B- and Octo"er E)* (+B5 of the 0inister of Trade and Industry to the Director of Patents* as !ell as /Fecutive Order =/#O#> No# +(5# The Convention of Paris for the Protection of Industrial Property* other!ise &no!n as the Paris Convention* is a multilateral treaty that see&s to protect industrial property consistin% of patents* utility models* industrial desi%ns* trademar&s* service mar&s* trade names and indications of source or appellations of ori%in* and at the same time aims to repress unfair competition#@<(A The Convention is essentially a compact amon% various countries !hich* as mem"ers of the 7nion* have pled%ed to accord to citi3ens of the other mem"er countries trademar& and other ri%hts compara"le to those accorded their o!n citi3ens "y their domestic la!s for an effective protection a%ainst unfair competition#@<EA In short* forei%n nationals are to "e %iven the

same treatment in each of the mem"er countries as that country ma&es availa"le to its o!n citi3ens#@<5A Nationals of the various mem"er nations are thus assured of a certain minimum of international protection of their industrial property#@<<A The Convention !as first si%ned "y eleven countries in Paris on 0arch E-* (BB5#@<)A It under!ent several revisions at 1russels in (+--* at Cashin%ton in (+((* at The Da%ue in (+E)* at .ondon in (+5<* at .is"on in (+)B*@<?A and at Stoc&holm in (+?,# 1oth the Philippines and the 7nited States of $merica* herein private respondent;s country* are si%natories to the Convention# The 7nited States acceded on 0ay 5-* (BB, !hile the Philippines* throu%h its Senate* concurred on 0ay (-* (+?)#@<,A The Philippines; adhesion "ecame effective on Septem"er E,* (+?)*@<BA and from this date* the country o"li%ated itself to honor and enforce the provisions of the Convention#@<+A In the case at "ar* private respondent anchors its cause of action on the first para%raph of $rticle ?bis of the Paris Convention !hich reads as follo!s8 2$rticle ?bis .1/ !)e 1o2&(r3e, o4 ()e U&3o& 2&'er(%5e, e3()er %'m3&3,(r%(3ve67 34 ()e3r 6e83,6%(3o& ,o 9erm3(,, or %( ()e re:2e,( o4 %& 3&(ere,(e' 9%r(7, (o re42,e or (o 1%&1e6 ()e re83,(r%(3o& %&' (o 9ro)3b3( ()e 2,e, o4 % (r%'em%r5 ;)31) 1o&,(3(2(e, % re9ro'21(3o&, %& 3m3(%(3o&, or % (r%&,6%(3o&, 63%b6e (o 1re%(e 1o&42,3o&, o4 % m%r5 1o&,3'ere' b7 ()e

1om9e(e&( %2()or3(7 o4 ()e 1o2&(r7 o4 re83,(r%(3o& or 2,e (o be ;e66<5&o;& 3& ()%( 1o2&(r7 %, be3&8 %6re%'7 ()e m%r5 o4 % 9er,o& e&(3(6e' (o ()e be&e43(, o4 ()3, Co&ve&(3o& %&' 2,e' 4or 3'e&(31%6 or ,3m36%r 8oo',. !)e,e 9rov3,3o&, ,)%66 %6,o %9967 ;)e& ()e e,,e&(3%6 9%r( o4 ()e m%r5 1o&,(3(2(e, % re9ro'21(3o& o4 %&7 ,21) ;e66<5&o;& m%r5 or %& 3m3(%(3o& 63%b6e (o 1re%(e 1o&42,3o& ()ere;3(). =E> $ period of at least five years from the date of re%istration shall "e allo!ed for see&in% the cancellation of such a mar&# The countries of the 7nion may provide for a period !ithin !hich the prohi"ition of use must "e sou%ht# =5> No time limit shall "e fiFed for see&in% the cancellation or the prohi"ition of the use of mar&s re%istered or used in "ad faith#2@)-A This $rticle %overns protection of ;e66< 5&o;& (r%'em%r5,# 7nder the first para%raph* each country of the 7nion "ound itself to underta&e to refuse or cancel the re%istration* and prohi"it the use of a trademar& !hich is a reproduction* imitation or translation* or any essential part of !hich trademar& constitutes a reproduction* lia"le to create confusion* of a mar& considered "y the competent authority of the country !here protection is sou%ht* to "e !ell &no!n in the country as "ein% already the mar& of a person entitled to the "enefits of the Convention* and used for identical or similar %oods# $rticle ?bis !as first introduced at The Da%ue in (+E) and amended in .is"on in (+)E#@)(A It is a self eFecutin%

provision and does not reGuire le%islative enactment to %ive it effect in the mem"er country#@)EA It may "e applied directly "y the tri"unals and officials of each mem"er country "y the mere pu"lication or proclamation of the Convention* after its ratification accordin% to the pu"lic la! of each state and the order for its eFecution#@)5A The essential reGuirement under $rticle ?bis is that the trademar& to "e protected must "e 2!ell &no!n2 in the country !here protection is sou%ht# The po!er to determine !hether a trademar& is !ell &no!n lies in the 2competent authority of the country of re%istration or use#2 This competent authority !ould "e either the re%isterin% authority if it has the po!er to decide this* or the courts of the country in Guestion if the issue comes "efore a court#@)<A Pursuant to $rticle ?bis* on Novem"er E-* (+B-* then 0inister .uis Villafuerte of the 0inistry of Trade issued a 0emorandum to the Director of Patents# The 0inister ordered the Director that8 2Pursuant to the Paris Convention for the Protection of Industrial Property to !hich the Philippines is a si%natory* you are here"y directed to re:ect all pendin% applications for Philippine re%istration of si%nature and other !orld famous trademar&s "y applicants other than its ori%inal o!ners or users# The conflictin% claims over internationally &no!n trademar&s involve such name "rands as .acoste* 'ordache* Vander"ilt* Sasson* Fila* Pierre Cardin* Jucci* Christian Dior* Oscar de la

Renta* Calvin Llein* Jivenchy* Ralph .auren* Jeoffrey 1eene* .anvin and Ted .apidus# It is further directed that* in cases !here !arranted* Philippine re%istrants of such trademar&s should "e as&ed to surrender their certificates of re%istration* if any* to avoid suits for dama%es and other le%al action "y the trademar&s; forei%n or local o!ners or ori%inal users# 6ou are also reGuired to su"mit to the undersi%ned a pro%ress report on the matter# For immediate compliance#2@))A Three years later* on Octo"er E)* (+B5* then 0inister Ro"erto On%pin issued another 0emorandum to the Director of Patents* viz8 2Pursuant to /Fecutive Order No# +(5 dated , Octo"er (+B5 !hich stren%thens the rule ma&in% and ad:udicatory po!ers of the 0inister of Trade and Industry and provides inter alia* that Hsuch rule ma&in% and ad:udicatory po!ers should "e revitali3ed in order that the 0inister of Trade and Industry can F F F apply more s!ift and effective solutions and remedies to old and ne! pro"lems F F F such as infrin%ement of internationally &no!n tradenames and trademar&s F F F; and in vie! of the decision of the Intermediate $ppellate Court in the case of .$ CD/0IS/ .$COST/* S#$#* versus R$0 S$DCD$NI @$C J#R# SP NO# (55)+ =(,> 'une (+B5A @)?A !hich affirms the validity of the 0/0OR$ND70 of then 0inister .uis R# Villafuerte dated E- Novem"er (+Bconfirmin% our o"li%ations under the P$RIS CONV/NTION

FOR TD/ PROT/CTION OF IND7STRI$. PROP/RT6 to !hich the Repu"lic of the Philippines is a si%natory* you are here"y directed to implement measures necessary to effect compliance !ith our o"li%ations under said Convention in %eneral* and* more ,9e13431%667, (o )o&or o2r 1omm3(me&( 2&'er Se1(3o& -bis@),A ()ereo4* as follo!s8 (# Chether the trademar& under consideration is !ell &no!n in the Philippines or is a mar& already "elon%in% to a person entitled to the "enefits of the CONV/NTION* this should "e esta"lished* pursuant to Philippine Patent Office procedures in inter partes and eF parte cases* accordin% to any of the follo!in% criteria or any com"ination thereof8 =a> a declaration "y the 0inister of Trade and Industry that the trademar& "ein% considered is already !ell &no!n in the Philippines such that permission for its use "y other than its ori%inal o!ner !ill constitute a reproduction* imitation* translation or other infrin%ementI ="> that the trademar& is used in commerce internationally* supported "y proof that %oods "earin% the trademar& are sold on an international scale* advertisements* the esta"lishment of factories* sales offices* distri"utorships* and the li&e* in different countries* includin% volume or other measure of international trade and commerceI =c> that the trademar& is duly re%istered in the industrial property office=s> of another country or countries* ta&in% into consideration the date of such re%istrationI =d> that the trademar& has lon% "een esta"lished and

o"tained %ood!ill and international consumer reco%nition as "elon%in% to one o!ner or sourceI =e> that the trademar& actually "elon%s to a party claimin% o!nership and has the ri%ht to re%istration under the provisions of the aforestated P$RIS CONV/NTION# E# The !ord trademar&* as used in this 0/0OR$ND70* shall include tradenames* service mar&s* lo%os* si%ns* em"lems* insi%nia or other similar devices used for identification and reco%nition "y consumers# 5# The Philippine Patent Office shall refuse all applications for* or cancel the re%istration of* trademar&s !hich constitute a reproduction* translation or imitation of a trademar& o!ned "y a person* natural or corporate* !ho is a citi3en of a country si%natory to the P$RIS CONV/NTION FOR TD/ PROT/CTION OF IND7STRI$. PROP/RT6# <# The Philippine Patent Office shall %ive due course to the Opposition in cases already or hereafter filed a%ainst the re%istration of trademar&s entitled to protection of Section 6 bis of said P$RIS CONV/NTION as outlined a"ove* "y remandin% applications filed "y one not entitled to such protection for final disallo!ance "y the /Famination Division# )# $ll pendin% applications for Philippine re%istration of si%nature and other !orld famous trademar&s filed "y applicants other than their ori%inal o!ners or users shall "e re:ected forth!ith# Chere such applicants have already o"tained re%istration contrary to the a"ovementioned P$RIS CONV/NTION andNor Philippine .a!* they shall "e directed

to surrender their Certificates of Re%istration to the Philippine Patent Office for immediate cancellation proceedin%s# F F F#2@)BA In the Villafuerte 0emorandum* the 0inister of Trade instructed the Director of Patents to re:ect all pendin% applications for Philippine re%istration of si%nature and other !orld famous trademar&s "y applicants other than their ori%inal o!ners or users# The 0inister enumerated several internationally &no!n trademar&s and ordered the Director of Patents to reGuire Philippine re%istrants of such mar&s to surrender their certificates of re%istration# In the On%pin 0emorandum* the 0inister of Trade and Industry did not enumerate !ell &no!n trademar&s "ut laid do!n %uidelines for the Director of Patents to o"serve in determinin% !hether a trademar& is entitled to protection as a !ell &no!n mar& in the Philippines under $rticle ?bis of the Paris Convention# This !as to "e esta"lished throu%h Philippine Patent Office procedures in inter partes and ex parte cases pursuant to the criteria enumerated therein# The Philippine Patent Office !as ordered to refuse applications for* or cancel the re%istration of* trademar&s !hich constitute a reproduction* translation or imitation of a trademar& o!ned "y a person !ho is a citi3en of a mem"er of the 7nion# $ll pendin% applications for re%istration of !orld famous trademar&s "y persons other than their ori%inal o!ners !ere to "e re:ected forth!ith# The On%pin 0emorandum !as issued pursuant to /Fecutive Order No# +(5 dated Octo"er ,* (+B5 of

then President 0arcos !hich stren%thened the rule ma&in% and ad:udicatory po!ers of the 0inister of Trade and Industry for the effective protection of consumers and the application of s!ift solutions to pro"lems in trade and industry#@)+A 1oth the Villafuerte and On%pin 0emoranda !ere sustained "y the Supreme Court in the (+B< landmar& case of La Chemise Lacoste, S.A. v. Fernandez#@?-A This court ruled therein that under the provisions of $rticle ? bis of the Paris Convention* the 0inister of Trade and Industry !as the 2competent authority2 to determine !hether a trademar& is !ell &no!n in this country#@?(A The Villafuerte 0emorandum !as issued in (+B-* i#e#* fifteen =()> years after the adoption of the Paris Convention in (+?)# In the case at "ar* the first inter partes case* IPC No# ?B?* !as filed in (+,-* be4ore the Villafuerte 0emorandum "ut five =)> years %4(er the effectivity of the Paris Convention# $rticle ?bis !as already in effect five years "efore the first case !as instituted# Private respondent* ho!ever* did not cite the protection of $rticle ? bis* neither did it mention the Paris Convention at all# It !as only in (+B( !hen IPC No# E-<+ !as instituted that the Paris Convention and the Villafuerte 0emorandum* and* durin% the pendency of the case* the (+B5 On%pin 0emorandum !ere invo&ed "y private respondent# The Solicitor Jeneral ar%ues that the issue of !hether the protection of $rticle ?bis of the Convention and the t!o 0emoranda is "arred "y res judicata has already "een

ans!ered in Wo verine Wor d!ide, "nc. v. Court o# Appea s# @?EA In this case* petitioner Colverine* a forei%n corporation* filed !ith the Philippine Patent Office a petition for cancellation of the re%istration certificate of private respondent* a Filipino citi3en* for the trademar& 2Dush Puppies2 and 2Do% Device#2 Petitioner alle%ed that it !as the re%istrant of the internationally &no!n trademar& in the 7nited States and other countries* and cited protection under the Paris Convention and the On%pin 0emorandum# The petition !as dismissed "y the Patent Office on the %round of res judicata# It !as found that in (+,5 petitioner;s predecessor in interest filed t!o petitions for cancellation of the same trademar& a%ainst respondent;s predecessor in interest# The Patent Office dismissed the petitions* ordered the cancellation of re%istration of petitioner;s trademar&* and %ave due course to respondent;s application for re%istration# This decision !as sustained "y the Court of $ppeals* !hich decision !as not elevated to us and "ecame final and eFecutory#@?5A Colverine claimed that !hile its previous petitions !ere filed under R#$# No# (??* the Trademar& .a!* its su"seGuent petition !as "ased on a ne! cause of action* i#e#* the On%pin 0emorandum and /#O# No# +(5 issued in (+B5* after finality of the previous decision# Ce held that the said 0emorandum and /#O# did not %rant a ne! cause of action "ecause it did 2not amend the Trademar& .a!*2 F F F 2nor did it indicate a ne! policy !ith respect to the re%istration in the Philippines of !orld famous trademar&s#2@?<A This conclusion !as "ased on the findin% that Colverine;s t!o previous petitions and

su"seGuent petition dealt !ith the same issue of o!nership of the trademar&#@?)A In other !ords* since the first and second cases involved the same issue of o!nership* then the first case !as a "ar to the second case# In the instant case* the issue of o!nership of the trademar& 21ar"i3on2 !as not raised in IPC No# ?B?# Private respondent;s opposition therein !as merely anchored on8 =a> 2confusin% similarity2 of its trademar& !ith that of /sco"ar;sI ="> that the re%istration of /sco"ar;s similar trademar& !ill cause dama%e to private respondent;s "usiness reputation and %ood!illI and =c> that /sco"ar;s use of the trademar& amounts to an unla!ful appropriation of a mar& previously used in the Philippines !hich act is penali3ed under Section < =d> of the Trademar& .a!# In IPC No# E-<+* private respondent;s opposition set forth several issues summari3ed as follo!s8 =a> as early as (+55* it adopted the !ord 21$R1I9ON2 as trademar& on its products such as ro"es* pa:amas* lin%erie* ni%ht%o!ns and slipsI ="> that the trademar& 21$R1I9ON2 !as re%istered !ith the 7nited States Patent Office in (+5< and (+<+I and that variations of the same trademar&* i#e#* 21$R1I9ON2 !ith 1ee desi%n and 21$R1I9ON2 !ith the representation of a !oman !ere also re%istered !ith the 7#S# Patent Office in (+?( and

(+,?I =c> that these mar&s have "een in use in the Philippines and in many countries all over the !orld for over forty years# 21ar"i3on2 products have "een advertised in international pu"lications and the mar&s re%istered in 5? countries !orld!ideI =d> /sco"ar;s re%istration of the similar trademar& 21$R1I9ON2 in (+,< !as "ased on fraudI and this fraudulent re%istration !as cancelled in (+,+* strippin% /sco"ar of !hatsoever ri%ht she had to the said mar&I =e> Private respondent;s trademar& is entitled to protection as a !ell &no!n mar& under $rticle ?bis of the Paris Convention* /Fecutive Order No# +(5* and the t!o 0emoranda dated Novem"er E-* (+B- and Octo"er E)* (+B5 of the 0inister of Trade and Industry to the Director of PatentsI =f> /sco"ar;s trademar& is identical to private respondent;s and its use on the same class of %oods as the latter;s amounts to a violation of the Trademar& .a! and $rticle (B+ of the Revised Penal Code# IPC No# E-<+ raised the issue of o!nership of the trademar&* the first re%istration and use of the trademar& in the 7nited States and other countries* and the international reco%nition and reputation of the trademar& esta"lished "y eFtensive use and advertisement of private respondent;s products for over forty years here and a"road# These are different from the issues of confusin% similarity and dama%e in IPC No# ?B?# The issue of prior 2,e may have "een raised in IPC No#

?B? "ut this claim !as limited to prior use in the Philippines only# Prior use in IPC No# E-<+ stems from private respondent;s claim as or383&%(or of the !ord and sym"ol 21ar"i3on*2@??A as the first and re%istered user of the mar& attached to its products !hich have "een sold and advertised !orld!ide for a considera"le num"er of years prior to petitioner;s first application for re%istration of her trademar& in the Philippines# Indeed* these are su"stantial alle%ations that raised ne! issues and necessarily %ave private respondent a ne! cause of action# Res judicata does not apply to ri%hts* claims or demands* althou%h %ro!in% out of the same su":ect matter* !hich constitute separate or distinct causes of action and !ere not put in issue in the former action#@?,A Respondent corporation also introduced in the second case a fact that did not eFist at the time the first case !as filed and terminated# The cancellation of petitioner;s certificate of re%istration for failure to file the affidavit of use arose only after IPC No# ?B?# It did not and could not have occurred in the first case* and this %ave respondent another cause to oppose the second application# Res judicata eFtends only to facts and conditions as they eFisted at the time :ud%ment !as rendered and to the le%al ri%hts and relations of the parties fiFed "y the facts so determined#@?BA Chen ne! facts or conditions intervene "efore the second suit* furnishin% a ne! "asis for the claims and defenses of the parties* the issues are no lon%er the same* and the former :ud%ment cannot "e pleaded as a "ar to the su"seGuent action#@?+A

It is also noted that the oppositions in the first and second cases are "ased on different la!s# The opposition in IPC No# ?B? !as "ased on specific provisions of the Trademar& .a!* i#e#* Section < =d>@,-A on confusin% similarity of trademar&s and Section B@,(A on the reGuisite dama%e to file an opposition to a petition for re%istration# The opposition in IPC No# E-<+ invo&ed the Paris Convention* particularly $rticle ? bis thereof* /#O# No# +(5 and the t!o 0emoranda of the 0inister of Trade and Industry# This opposition also invo&ed $rticle (B+ of the Revised Penal Code !hich is a statute totally different from the Trademar& .a!#@,EA Causes of action !hich are distinct and independent from each other* althou%h arisin% out of the same contract* transaction* or state of facts* may "e sued on separately* recovery on one "ein% no "ar to su"seGuent actions on others#@,5A The mere fact that the same relief is sou%ht in the su"seGuent action !ill not render the :ud%ment in the prior action operative as res judicata* such as !here the t!o actions are "ased on different statutes#@,<A Res judicatatherefore does not apply to the instant case and respondent Court of $ppeals did not err in so rulin%# Intellectual and industrial property ri%hts cases are not simple property cases# Trademar&s deal !ith the psycholo%ical function of sym"ols and the effect of these sym"ols on the pu"lic at lar%e#@,)A Trademar&s play a si%nificant role in communication* commerce and trade* and serve valua"le and interrelated "usiness functions* "oth nationally and internationally# For this reason* all a%reements concernin% industrial property* li&e those on trademar&s and

tradenames* are intimately connected !ith economic development#@,?A Industrial property encoura%es investments in ne! ideas and inventions and stimulates creative efforts for the satisfaction of human needs# They speed up transfer of technolo%y and industriali3ation* and there"y "rin% a"out social and economic pro%ress#@,,A These advanta%es have "een ac&no!led%ed "y the Philippine %overnment itself# The Intellectual Property Code of the Philippines declares that 2an effective intellectual and industrial property system is vital to the development of domestic and creative activity* facilitates transfer of technolo%y* it attracts forei%n investments* and ensures mar&et access for our products#2@,BA The Intellectual Property Code too& effect on 'anuary (* (++B and "y its eFpress provision*@,+A repealed the Trademar& .a!*@B-A the Patent .a!*@B(A $rticles (BB and (B+ of the Revised Penal Code* the Decree on Intellectual Property*@BEA and the Decree on Compulsory Reprintin% of Forei%n TeFt"oo&s#@B5A The Code !as enacted to stren%then the intellectual and industrial property system in the Philippines as mandated "y the country;s accession to the $%reement /sta"lishin% the Corld Trade Or%ani3ation =CTO>#@B<A The CTO is a common institutional frame!or& for the conduct of trade relations amon% its mem"ers in matters related to the multilateral and plurilateral trade a%reements anneFed to the CTO $%reement#@B)A The CTO frame!or& ensures a 2sin%le underta&in% approach2 to the administration and operation of all a%reements and arran%ements attached to the CTO $%reement# $mon% those anneFed is the $%reement

on Trade Related $spects of Intellectual Property Ri%hts or TRIPs#@B?A 0em"ers to this $%reement 2desire to reduce distortions and impediments to international trade* ta&in% into account the need to promote effective and adeGuate protection of intellectual property ri%hts* and to ensure that measures and procedures to enforce intellectual property ri%hts do not themselves "ecome "arriers to le%itimate trade#2 To fulfill these o":ectives* the mem"ers have a%reed to adhere to minimum standards of protection set "y several Conventions# @B,A These Conventions are8 the 1erne Convention for the Protection of .iterary and $rtistic Cor&s =(+,(>* the Rome Convention or the International Convention for the Protection of Performers* Producers of Phono%rams and 1roadcastin% Or%anisations* the Treaty on Intellectual Property in Respect of Inte%rated Circuits* %&' ()e P%r3, Co&ve&(3o& .19-=/, as revised in Stoc&holm on 'uly (<* (+?,#@BBA $ ma:or proportion of international trade depends on the protection of intellectual property ri%hts#@B+A Since the late (+,-;s* the unauthori3ed counterfeitin% of industrial property and trademar&ed products has had a considera"le adverse impact on domestic and international trade revenues#@+-A The TRIPs $%reement see&s to %rant adeGuate protection of intellectual property ri%hts "y creatin% a favora"le economic environment to encoura%e the inflo! of forei%n investments* and stren%thenin% the multi lateral tradin% system to "rin% a"out economic* cultural and technolo%ical independence# @+(A The Philippines and the 7nited States of $merica have acceded to the CTO $%reement# This $%reement has

revolutioni3ed international "usiness and economic relations amon% states* and has propelled the !orld to!ards trade li"erali3ation and economic %lo"ali3ation#@+EAProtectionism and isolationism "elon% to the past# Trade is no lon%er confined to a "ilateral system# There is no! 2a ne! era of %lo"al economic cooperation* reflectin% the !idespread desire to operate in a fairer and more open multilateral tradin% system#2@+5A Conforma"ly* the State must reaffirm its commitment to the %lo"al community and ta&e part in evolvin% a ne! international economic order at the da!n of the ne! millenium# IN >I#? ?H#R# "* the petition is denied and the Decision and Resolution of the Court of $ppeals in C$ J#R# SP No# EB<() are affirmed# S RD#R#D. $avide, %r., C.%., &Chairman', (apunan, )ardo, and *naresSantia+o, %%., concur. FIRST DIVISION [G.R. No. 110010. A9r36 4, 0001] S CI#!# D#S PR DUI!S N#S!$#, S.A. %&' N#S!$# PHI$IPPIN#S, INC. petitioners, vs. C UR! " APP#A$S %&' C"C C RP RA!I N. respondents.

D#CISI @NAR#S<SAN!IAG , J.+

This is a petition for revie! assailin% the Decision of the Court of $ppeals in C$ J#R# SP No# E<(-(*@(A reversin% and settin% aside the decision of the 1ureau of Patents* Trademar&s and Technolo%y Transfer =1PTTT>*@EA !hich denied private respondentOs application for re%istration of the trade mar&* F.$VOR 0$ST/R# On 'anuary (B* (+B<* private respondent CFC Corporation filed !ith the 1PTTT an application for the re%istration of the trademar& PF.$VOR 0$ST/RQ for instant coffee* under Serial No# )E++<# The application* as a matter of due course* !as pu"lished in the 'uly (B* (+BB issue of the 1PTTTOs Official Ja3ette# Petitioner Societe Des Produits Nestle* S#$#* a S!iss company re%istered under S!iss la!s and domiciled in S!it3erland* filed an unverified Notice of Opposition* @5A claimin% that the trademar& of private respondentOs product is Pconfusin%ly similar to its trademar&s for coffee and coffee eFtracts* to !it8 0$ST/R RO$ST and 0$ST/R 1./ND#Q .i&e!ise* a verified Notice of Opposition !as filed "y Nestle Philippines* Inc#* a Philippine corporation and a licensee of Societe Des Produits Nestle S#$#* a%ainst CFCOs application for re%istration of the trademar& F.$VOR 0$ST/R#@<A Nestle claimed that the use* if any* "y CFC of

the trademar& F.$VOR 0$ST/R and its re%istration !ould li&ely cause confusion in the tradeI or deceive purchasers and !ould falsely su%%est to the purchasin% pu"lic a connection in the "usiness of Nestle* as the dominant !ord present in the three =5> trademar&s is P0$ST/RQI or that the %oods of CFC mi%ht "e mista&en as havin% ori%inated from the latter# In ans!er to the t!o oppositions* CFC ar%ued that its trademar&* F.$VOR 0$ST/R* is not confusin%ly similar !ith the formerOs trademar&s* 0$ST/R RO$ST and 0$ST/R 1./ND* alle%in% that* PeFcept for the !ord 0$ST/R =!hich cannot "e eFclusively appropriated "y any person for "ein% a descriptive or %eneric name>* the other !ords that are used respectively !ith said !ord in the three trademar&s are very different from each other R in meanin%* spellin%* pronunciation* and soundQ# CFC further ar%ued that its trademar&* F.$VOR 0$ST/R* Pis clearly very different from any of NestleOs alle%ed trademar&s 0$ST/R RO$ST and 0$ST/R 1./ND* especially !hen the mar&s are vie!ed in their entirety* "y considerin% their pictorial representations* color schemes and the letters of their respective la"els#Q In its Decision No# +- <, dated Decem"er E,* (++-* the 1PTTT denied CFCOs application for re%istration#@)A CFC elevated the matter to the Court of $ppeals* !here it !as doc&eted as C$ J#R# SP No# E<(-(# The Court of $ppeals defined the issue thus8 PDoes appellant CFCOs trade dress "ear a stri&in% resem"lance !ith appelleeOs trademar&s as to create in the purchasin% pu"licOs

mind the mista&en impression that "oth coffee products come from one and the same sourceSQ $s stated a"ove* the Court of $ppeals* in the assailed decision dated Septem"er E5* (++5* reversed Decision No# +<, of the 1PTTT and ordered the Director of Patents to approve CFCOs application# The Court of $ppeals ruled8 Cere Ce to ta&e even a lac&adaisical %lance at the overall appearance of the contendin% mar&s* the physical discrepancies "et!een appellant CFCOs and appelleeOs respective lo%os are so ostensi"le that the casual purchaser cannot li&ely mista&e one for the other# $ppellant CFCOs la"el =/Fhi"it P<Q> is predominantly a "lend of dar& and li%hter shade of oran%e !here the !ords PF.$VOR 0$ST/RQ* PF.$VORQ appearin% on top of P0$ST/RQ* shaded in mocha !ith thin !hite inner and outer sidin%s per letter and identically lettered eFcept for the sli%htly protrudin% "ottom curve of the letter PSQ ad:oinin% the "ottom tip of the letter P$Q in the !ord P0$ST/RQ* are printed across the top of a simmerin% red coffee cup# 7nderneath PF.$VOR 0$ST/RQ appears PPremium Instant CoffeeQ printed in !hite* slim and slanted letters# $ppelleesO P0$ST/R RO$STQ la"el =/Fhi"it P,Q>* ho!ever* is almost dou"le the !idth of appellant CFCOs# $t the top is printed in "ro!n color the !ord PN/SC$F/Q a%ainst a !hite "ac&drop# Occupyin% the center is a sGuare shaped confi%uration shaded !ith dar& "ro!n and picturin% a heap of coffee "eans* !here the !ord P0$ST/RQ is inscri"ed in the middle# P0$ST/RQ in appelleesO la"el is printed in taller capital letters* !ith the letter P0Q further

capitali3ed# The letters are shaded !ith red and "ounded !ith thin %old colored inner and outer sidin%s# 'ust a"ove the !ord P0$ST/RQ is a red !indo! li&e portrait of !hat appears to "e a coffee shru" clad in %old# 1elo! the P0$ST/RQ appears the !ord PRO$STQ impressed in smaller* !hite print# $nd further "elo! are the inscriptions in !hite8 P$ selection of prime $ra"ica and Ro"usta coffee#Q Cith re%ard to appelleesO P0$ST/R 1./NDQ la"el =/Fhi"it P?Q> of !hich only a FeroFed copy is su"mitted* the letters are "older and taller as compared to appellant CFCOs and the !ord P0$ST/RQ appears on top of the !ord P1./NDQ and "elo! it are the !ords P(--T pure instant coffeeQ printed in small letters# From the fore%oin% description* !hile the contendin% mar&s depict the same product* the %larin% dissimilarities in their presentation far out!ei%h and dispel any aspect of similitude# To "orro! the !ords of the Supreme Court in $merican Cyanamid Co# v# Director of Patents =,? SCR$ )?B>* appellant CFCOs and appelleesO la"els are entirely different in si3e* "ac&%round* colors* contents and pictorial arran%ementI in short* the %eneral appearances of the la"els "earin% the respective trademar&s are so distinct from each other that appellees cannot assert that the dominant features* if any* of its trademar&s !ere used or appropriated in appellant CFCOs o!n# The distinctions are so !ell defined so as to foreclose any pro"a"ility or li&elihood of confusion or deception on the part of the normally intelli%ent "uyer !hen he or she encounters "oth coffee products at the %rocery shelf# The ans!er therefore to the Guery is a clear cut NO#@?A

Petitioners are no! "efore this Court on the follo!in% assi%nment of errors8 (# R/SPOND/NT CO7RT JR$V/.6 /RR/D IN R/V/RSINJ $ND S/TTINJ $SID/ TD/ D/CISION =NO# +- <,> OF TD/ DIR/CTOR OF TD/ 17R/$7 OF P$T/NTS* TR$D/0$RLS $ND T/CDNO.OJ6 TR$NSF/R =1PTTT> D$T/D D/C/01/R E,* (++-# E# R/SPOND/NT CO7RT /RR/D IN FINDINJ TD$T $PP/..$NT CFCOS TR$D/ DR/SS IS 1/6OND TD/ SCOP/ OF TD/ PROSCRIPTION .$ID DOCN 16 '7RISPR7D/NC/ $ND TD/ TR$D/0$RL .$C# 5# R/SPOND/NT CO7RT /RR/D IN DO.DINJ TD$T TD/ TOT$.IT6 R7./* R$TD/R TD$N TD/ T/ST OF DO0IN$NC6* $PP.I/S TO TD/ C$S/# <# R/SPOND/NT CO7RT /RR/D IN INVOLINJ TD/ TOT$.IT6 R7./ $PP.I/D IN TD/ C$S/S OF 1RISTO. 06/RS V# DIR/CTOR OF P$T/NTS* /T $.# =(, SCR$ (EB>* 0/$D 'ODNSON 4 CO# V# NV' V$N DORF .TD#* =, SCR$ ,?B> $ND $0/RIC$N C6$N$0ID CO# V# DIR/CTOR OF P$T/NTS =,? SCR$ )?B># The petition is impressed !ith merit# $ trademar& has "een %enerally defined as Pany !ord* name* sym"ol or device adopted and used "y a manufacturer or merchant to identify his %oods and distin%uish them from those manufactured and sold "y others#Q@,A $ manufacturerOs trademar& is entitled to protection# $s 0r#

'ustice Fran&furter o"served in the case of ,isha!a-a ,#+. Co. v. (res+e Co.8@BA The protection of trade mar&s is the la!Os reco%nition of the psycholo%ical function of sym"ols# If it is true that !e live "y sym"ols* it is no less true that !e purchase %oods "y them# $ trade mar& is a merchandisin% short cut !hich induces a purchaser to select !hat he !ants* or !hat he has "een led to "elieve he !ants# The o!ner of a mar& eFploits this human propensity "y ma&in% every effort to impre%nate the atmosphere of the mar&et !ith the dra!in% po!er of a con%enial sym"ol# Chatever the means employed* the aim is the same to convey throu%h the mar&* in the minds of potential customers* the desira"ility of the commodity upon !hich it appears# Once this is attained* the trade mar& o!ner has somethin% of value# If another poaches upon the commercial ma%netism of the sym"ol he has created* the o!ner can o"tain le%al redress# Section < =d> of Repu"lic $ct No# (?? or the Trademar& .a!* as amended* !hich !as in force at the time* provides thus8 Re%istration of trade mar&s* trade names and service mar&s on the principal re%ister# There is here"y esta"lished a re%ister of trade mar&s* trade names and service mar&s !hich shall "e &no!n as the principal re%ister# The o!ner of a trade mar&* trade name or service mar& used to distin%uish his %oods* "usiness or services from the %oods* "usiness or services of others shall have the ri%ht to re%ister the same on the principal

re%ister* unless it8 FFF FFF FFF =d> Consists of or comprises a mar& or trade name !hich so resem"les a mar& or trade name re%istered in the Philippines or a mar& or trade name previously used in the Philippines "y another and not a"andoned* as to "e li&ely* !hen applied to or used in connection !ith the %oods* "usiness or services of the applicant* to cause confusion or mista&e or to deceive purchasersI FFF =/mphasis supplied> FFF FFF

The la! prescri"es a more strin%ent standard in that there should not only "e confusin% similarity "ut that it should not li&ely cause confusion or mista&e or deceive purchasers# Dence* the Guestion in this case is !hether there is a li&elihood that the trademar& F.$VOR 0$ST/R may cause confusion or mista&e or may deceive purchasers that said product is the same or is manufactured "y the same company# In other !ords* the issue is !hether the trademar& F.$VOR 0$ST/R is a colora"le imitation of the trademar&s 0$ST/R RO$ST and 0$ST/R 1./ND# Colora"le imitation denotes such a close or in%enious imitation as to "e calculated to deceive ordinary persons* or such a resem"lance to the ori%inal as to deceive an ordinary purchaser %ivin% such attention as a purchaser usually %ives*

as to cause him to purchase the one supposin% it to "e the other#@+A In determinin% if colora"le imitation eFists* :urisprudence has developed t!o &inds of tests the Dominancy Test and the Dolistic Test#@(-A The test of dominancy focuses on the similarity of the prevalent features of the competin% trademar&s !hich mi%ht cause confusion or deception and thus constitute infrin%ement# On the other side of the spectrum* the holistic test mandates that the entirety of the mar&s in Guestion must "e considered in determinin% confusin% similarity#@((A In the case at "ar* the Court of $ppeals held that8 The determination of !hether t!o trademar&s are indeed confusin%ly similar must "e ta&en from the vie!point of the ordinary purchasers !ho are* in %eneral* undiscernin%ly rash in "uyin% the more common and less eFpensive household products li&e coffee* and are therefore less inclined to closely eFamine specific details of similarities and dissimilarities "et!een competin% products# The Supreme Court in $e ,onte Corporation v. CA, ./. SCRA 0.1* held that8 PThe Guestion is not !hether the t!o articles are distin%uisha"le "y their la"els !hen set side "y side "ut !hether the %eneral confusion made "y the article upon the eye of the casual purchaser !ho is unsuspicious and off his %uard* is such as to li&ely result in his confoundin% it !ith the ori%inal# $s o"served in several cases* the %eneral impression of the ordinary purchaser* "uyin% under the normally prevalent conditions in trade and %ivin% the attention such purchasers

usually %ive in "uyin% that class of %oods* is the touchstone#Q From this perspective* the test of similarity is to consider the t!o mar&s in their entirety* as they appear in the respective la"els* in relation to the %oods to !hich they are attached =2risto ,3ers Compan3 v. $irector o# )atents, et a ., .4 SCRA .5/, citin+ ,ead %ohnson 6 Co. v. 78% 8an $orp, Ltd., et a ., 4 SCRA 46/># The mar& must "e considered as a !hole and not as dissected# If the "uyer is deceived* it is attri"uta"le to the mar&s as a totality* not usually to any part of it =$e ,onte Corp. v. CA, supra>* as !hat appellees !ould !ant it to "e !hen they essentially ar%ue that much of the confusion sprin%s from appellant CFCOs use of the !ord P0$ST/RQ !hich appellees claim to "e the dominant feature of their o!n trademar&s that captivates the prospective consumers# 1e it further emphasi3ed that the discernin% eye of the o"server must focus not only on the predominant !ords "ut also on the other features appearin% in "oth la"els in order that he may dra! his conclusion !hether one is confusin%ly similar to the other =,ead %ohnson 6 Co. v. 78% 8an $orp, Ltd., supra>#@(EA The Court of $ppeals applied some :udicial precedents !hich are not on all fours !ith this case# It must "e emphasi3ed that in infrin%ement or trademar& cases in the Philippines* particularly in ascertainin% !hether one trademar& is confusin%ly similar to or is a colora"le imitation of another* no set rules can "e deduced# /ach case must "e decided on its o!n merits#@(5A In 9sso Standard, "nc. v. Court o# Appea s, @(<A !e ruled that the li&elihood of confusion is a relative conceptI to "e determined only accordin% to the particular* and

sometimes peculiar* circumstances of each case# In trademar& cases* even more than in any other liti%ation* precedent must "e studied in li%ht of the facts of the particular case# The !isdom of the li&elihood of confusion test lies in its reco%nition that each trademar& infrin%ement case presents its o!n uniGue set of facts# Indeed* the compleFities attendant to an accurate assessment of li&elihood of confusion reGuire that the entire panoply of elements constitutin% the relevant factual landscape "e comprehensively eFamined#@()A The Court of $ppealsO application of the case of $e ,onte Corporation v. Court o# Appea s@(?A is* therefore* misplaced# In $e ,onte* the issue !as a"out the alle%ed similarity of Del 0onteOs lo%o !ith that of Sunshine Sauce 0anufacturin% Industries# 1oth corporations mar&et the catsup product !hich is an ineFpensive and common household item# Since Del 0onte alle%ed that SunshineOs lo%o !as confusin%ly similar to or !as a colora"le imitation of the formerOs lo%o* there !as a need to %o into the details of the t!o lo%os as !ell as the shapes of the la"els or mar&s* the "rands printed on the la"els* the !ords or letterin% on the la"els or mar&s and the shapes and colors of the la"els or mar&s# The same criteria* ho!ever* cannot "e applied in the instant petition as the facts and circumstances herein are peculiarly different from those in the $e ,onte case# In the same manner* the Court of $ppeals erred in applyin% the totality rule as defined in the cases of 2risto ,3ers v.

$irector o# )atents:@(,A ,ead %ohnson 6 Co. v. 78% 8an $or# Ltd.I@(BA and American C3anamid Co. v. $irector o# )atents#@(+A The totality rule states that Pthe test is not simply to ta&e their !ords and compare the spellin% and pronunciation of said !ords# In determinin% !hether t!o trademar&s are confusin%ly similar* the t!o mar&s in their entirety as they appear in the respective la"els must "e considered in relation to the %oods to !hich they are attachedI the discernin% eye of the o"server must focus not only on the predominant !ords "ut also on the other features appearin% on "oth la"els#Q@E-A $s this Court has often declared* each case must "e studied accordin% to the peculiar circumstances of each case# That is the reason !hy in trademar& cases* :urisprudential precedents should "e applied only to a case if they are specifically in point# In the a"ove cases cited "y the Court of $ppeals to :ustify the application of the totality or holistic test to this instant case* the factual circumstances are su"stantially different# In the 2risto ,3ers case* this Court held that althou%h "oth 1IOF/RIN and 17FF/RIN are primarily used for the relief of pains such as headaches and colds* and their names are practically the same in spellin% and pronunciation* "oth la"els have stri&in%ly different "ac&%rounds and surroundin%s# In addition* one is dispensa"le only upon doctorOs prescription* !hile the other may "e purchased over the counter# In the ,ead %ohnson case* the differences "et!een $.$CT$ and $.$SL$ are %larin% and stri&in% to the

eye# $lso* $.$CT$ refers to PPharmaceutical Preparations !hich Supply Nutritional Needs*Q fallin% under Class ? of the official classification of 0edicines and Pharmaceutical Preparations to "e used as prescri"ed "y physicians# On the other hand* $.$SL$ refers to PFoods and In%redients of FoodsQ fallin% under Class <,* and does not reGuire medical prescription# In the American C3anamid case* the !ord S7.0/T is distin%uisha"le from the !ord S7.0/TIN/* as the former is derived from a com"ination of the sylla"les PS7.Q !hich is derived from sulfa and P0/TQ from methyl* "oth of !hich are chemical compounds present in the article manufactured "y the contendin% parties# This Court held that the addition of the sylla"le PIN/Q in respondentOs la"el is sufficient to distin%uish respondentOs product or trademar& from that of petitioner# $lso* "oth products are for medicinal veterinary use and the "uyer !ill "e more !ary of the nature of the product he is "uyin%# In any case* "oth products are not identical as S7.0/TOs la"el indicates that it is used in a drin&in% !ater solution !hile that of S7.0/TIN/ indicates that they are ta"lets# It cannot also "e said that the products in the a"ove cases can "e "ou%ht off the shelf eFcept* perhaps* for $.$SL$# The said products are not the usual Pcommon and ineFpensiveQ household items !hich an Pundiscernin%ly rashQ "uyer !ould unthin&in%ly "uy# In the case at "ar* other than the fact that "oth NestleOs and

CFCOs products are ineFpensive and common household items* the similarity ends there# Chat is "ein% Guestioned here is the use "y CFC of the trademar& 0$ST/R# In vie! of the difficulty of applyin% :urisprudential precedents to trademar& cases due to the peculiarity of each case* :udicial fora should not readily apply a certain test or standard :ust "ecause of seemin% similarities# $s this Court has pointed a"ove* there could "e more tellin% differences than similarities as to ma&e a :urisprudential precedent inapplica"le# Nestle points out that the dominancy test should have "een applied to determine !hether there is a confusin% similarity "et!een CFCOs F.$VOR 0$ST/R and NestleOs 0$ST/R RO$ST and 0$ST/R 1./ND# Ce a%ree# $s the Court of $ppeals itself has stated* P@tAhe determination of !hether t!o trademar&s are indeed confusin%ly similar must "e ta&en from the vie!point of the ordinary purchasers !ho are* in %eneral* undiscernin%ly rash in "uyin% the more common and less eFpensive household products li&e coffee* and are therefore less inclined to closely eFamine specific details of similarities and dissimilarities "et!een competin% products#Q@E(A The "asis for the Court of $ppealsO application of the totality or holistic test is the Pordinary purchaserQ "uyin% the product under Pnormally prevalent conditions in tradeQ and the attention such products normally elicit from said ordinary

purchaser# $n ordinary purchaser or "uyer does not usually ma&e such scrutiny nor does he usually have the time to do so# The avera%e shopper is usually in a hurry and does not inspect every product on the shelf as if he !ere "ro!sin% in a li"rary#@EEA The Court of $ppeals held that the test to "e applied should "e the totality or holistic test reasonin%* since !hat is of paramount consideration is the ordinary purchaser !ho is* in %eneral* undiscernin%ly rash in "uyin% the more common and less eFpensive household products li&e coffee* and is therefore less inclined to closely eFamine specific details of similarities and dissimilarities "et!een competin% products# This Court cannot a%ree !ith the a"ove reasonin%# If the ordinary purchaser is Pundiscernin%ly rashQ in "uyin% such common and ineFpensive household products as instant coffee* and !ould therefore "e Pless inclined to closely eFamine specific details of similarities and dissimilaritiesQ "et!een the t!o competin% products* then it !ould "e less li&ely for the ordinary purchaser to notice that CFCOs trademar& F.$VOR 0$ST/R carries the colors oran%e and mocha !hile that of NestleOs uses red and "ro!n# The application of the totality or holistic test is improper since the ordinary purchaser !ould not "e inclined to notice the specific features* similarities or dissimilarities* considerin% that the product is an ineFpensive and common household item# It must "e emphasi3ed that the products "earin% the trademar&s in Guestion are PineFpensive and commonQ

household items "ou%ht off the shelf "y Pundiscernin%ly rashQ purchasers# $s such* if the ordinary purchaser is Pundiscernin%ly rashQ* then he !ould not have the time nor the inclination to ma&e a &een and perceptive eFamination of the physical discrepancies in the trademar&s of the products in order to eFercise his choice# Chile this Court a%rees !ith the Court of $ppealsO detailed enumeration of differences "et!een the respective trademar&s of the t!o coffee products* this Court cannot a%ree that totality test is the one applica"le in this case# Rather* this Court "elieves that the dominancy test is more suita"le to this case in li%ht of its peculiar factual milieu# 0oreover* the totality or holistic test is contrary to the elementary postulate of the la! on trademar&s and unfair competition that confusin% similarity is to "e determined on the "asis of visual* aural* connotative comparisons and overall impressions en%endered "y the mar&s in controversy as they are encountered in the realities of the mar&etplace#@E5A The totality or holistic test only relies on visual comparison "et!een t!o trademar&s !hereas the dominancy test relies not only on the visual "ut also on the aural and connotative comparisons and overall impressions "et!een the t!o trademar&s# For this reason* this Court a%rees !ith the 1PTTT !hen it applied the test of dominancy and held that8 From the evidence at hand* it is sufficiently esta"lished that the !ord 0$ST/R is the dominant feature of opposerOs

mar&# The !ord 0$ST/R is printed across the middle portion of the la"el in "old letters almost t!ice the si3e of the printed !ord RO$ST# Further* the !ord 0$ST/R has al!ays "een %iven emphasis in the TV and radio commercials and other advertisements made in promotin% the product# This can "e %leaned from the fact that Ro"ert 'a!ors&i and $tty# Ric Puno 'r##* the personalities en%a%ed to promote the product* are %iven the titles 0aster of the Jame and 0aster of the Tal& Sho!* respectively# In due time* "ecause of these advertisin% schemes the mind of the "uyin% pu"lic had come to learn to associate the !ord 0$ST/R !ith the opposerOs %oods# F F F# It is the o"servation of this Office that much of the dominance !hich the !ord 0$ST/R has acGuired throu%h OpposerOs advertisin% schemes is carried over !hen the same is incorporated into respondent applicantOs trademar& F.$VOR 0$ST/R# Thus* !hen one loo&s at the la"el "earin% the trademar& F.$VOR 0$ST/R =/Fh# <> oneOs attention is easily attracted to the !ord 0$ST/R* rather than to the dissimilarities that eFist# Therefore* the possi"ility of confusion as to the %oods !hich "ear the competin% mar&s or as to the ori%ins thereof is not farfetched# F F F#@E<A In addition* the !ord P0$ST/RQ is neither a %eneric nor a descriptive term# $s such* said term can not "e invalidated as a trademar& and* therefore* may "e le%ally protected# Jeneric terms@E)A are those !hich constitute Pthe common descriptive name of an article or su"stance*Q or comprise the P%enus of !hich the particular product is a species*Q or are Pcommonly used as the name or description of a &ind of %oods*Q or Pimply

reference to every mem"er of a %enus and the eFclusion of individuatin% characters*Q or Prefer to the "asic nature of the !ares or services provided rather than to the more idiosyncratic characteristics of a particular product*Q and are not le%ally protecta"le# On the other hand* a term is descriptive@E?A and therefore invalid as a trademar& if* as understood in its normal and natural sense* it Pforth!ith conveys the characteristics* functions* Gualities or in%redients of a product to one !ho has never seen it and does not &no! !hat it is*Q or Pif it forth!ith conveys an immediate idea of the in%redients* Gualities or characteristics of the %oods*Q or if it clearly denotes !hat %oods or services are provided in such a !ay that the consumer does not have to eFercise po!ers of perception or ima%ination# Rather* the term P0$ST/RQ is a su%%estive term "rou%ht a"out "y the advertisin% scheme of Nestle# Su%%estive terms@E,A are those !hich* in the phraseolo%y of one court* reGuire Pima%ination* thou%ht and perception to reach a conclusion as to the nature of the %oods#Q Such terms* P!hich su"tly connote somethin% a"out the product*Q are eli%i"le for protection in the a"sence of secondary meanin%# Chile su%%estive mar&s are capa"le of sheddin% Psome li%htQ upon certain characteristics of the %oods or services in dispute* they nevertheless involve Pan element of incon%ruity*Q Pfi%urativeness*Q or P ima%inative effort on the part of the o"server#Q This is evident from the advertisin% scheme adopted "y

Nestle in promotin% its coffee products# In this case* Nestle has* over time* promoted its products as Pcoffee perfection !orthy of masters li&e Ro"ert 'a!ors&i and Ric Puno 'r#Q In associatin% its coffee products !ith the term P0$ST/RQ and there"y impressin% them !ith the attri"utes of said term* Nestle advertised its products thus8 Ro"ert 'a!ors&i# .ivin% .e%end# $ true hard court hero# Fast on his feet# Sure in every shot he ma&es# $ master strate%ist# In one !ord* unmatched# 0$ST/R RO$ST# /Gually unmatched# Rich and deeply satisfyin%# 0ade from a uniGue com"ination of the "est coffee "eans $ra"ica for superior taste and aroma* Ro"usta for stren%th and "ody# $ masterpiece only N/SC$F/* the !orldOs coffee masters* can create# 0$ST/R RO$ST# Coffee perfection !orthy of masters li&e Ro"ert 'a!ors&i#@EBA In the art of conversation* Ric Puno 'r# is master# Citty# Cell informed# Confident# In the art of coffee ma&in%* nothin% eGuals 0aster Roast* the coffee masterpiece from Nescafe* the !orldOs coffee masters# $ uniGue com"ination of the "est coffee "eans $ra"ica for superior taste and aroma* Ro"usta for stren%th and "ody# Truly distinctive and rich in flavor# 0aster Roast# Coffee perfection !orthy of masters li&e Ric Puno 'r#@E+A The term P0$ST/RQ* therefore* has acGuired a certain

connotation to mean the coffee products 0$ST/R RO$ST and 0$ST/R 1./ND produced "y Nestle# $s such* the use "y CFC of the term P0$ST/RQ in the trademar& for its coffee product F.$VOR 0$ST/R is li&ely to cause confusion or mista&e or even to deceive the ordinary purchasers# In closin%* it may not "e amiss to Guote the case of American Chic e Co. v. ;opps Che!in+ <um, "nc #*@5-A to !it8 Chy it should have chosen a mar& that had lon% "een employed "y @plaintiffA and had "ecome &no!n to the trade instead of adoptin% some other means of identifyin% its %oods is hard to see unless there !as a deli"erate purpose to o"tain some advanta%e from the trade that @plaintiffA had "uilt up# Indeed* it is %enerally true that* as soon as !e see that a second comer in a mar&et has* for no reason that he can assi%n* pla%iari3ed the Pma&e upQ of an earlier comer* !e need no moreI # # # @CAe feel "ound to compel him to eFercise his in%enuity in Guarters further afield# ?H#R#" R#* in vie! of the fore%oin%* the decision of the Court of $ppeals in C$ J#R# SP No# E<(-( is R/V/RS/D and S/T $SID/ and the decision of the 1ureau of Patents* Trademar&s and Technolo%y Transfer in Inter Partes Cases Nos# 5E-- and 5E-E is R/INST$T/D# S RD#R#D. $avide, %r., C.%. %%., concur. &Chairman', (apunan, and )ardo,

)uno %.* on official leave# "IRS! DI>ISI N

MCD NA$DAS C RP RA!I N %&' No. 14B99B MCG# RG# " D INDUS!RI#S, INC., Petitioners* Present8 ide* 'r#* C.%.*

G.R.

Dav Ch airman* versus m"in%* 6nares Santia%o* Carpio* and $3cun a* %%# $.C. BIG MAC BURG#R, INC., "RANCIS B. D@, #DNA A. D@, R#N# B. D@, ?I$$IAM B. D@, Muisu

J#SUS A@CARD , ARAC#$I Promul%ated8 A@CARD , %&' GRAC# HU#R! , Respondents# t (B* E--< F F D#CISI N CARPIO, J.+ !)e C%,e

$u%us

This is a petition for revie!@(A of the Decision dated E? Novem"er (+++ of the Court of $ppeals@EA findin% respondent .#C# 1i% 0a& 1ur%er* Inc# not lia"le for trademar& infrin%ement and unfair competition and orderin% petitioners to pay respondents P(*+--*--- in dama%es* and of its Resolution dated (( 'uly E--- denyin% reconsideration# The Court of $ppealsO Decision reversed the ) Septem"er (++< Decision@5A of the Re%ional Trial Court of

0a&ati* 1ranch (5,* findin% respondent .#C# 1i% 0a& 1ur%er* Inc# lia"le for trademar& infrin%ement and unfair competition# !)e "%1(, Petitioner 0cDonaldOs Corporation =P0cDonaldOsQ> is a corporation or%ani3ed under the la!s of Dela!are* 7nited States# 0cDonaldOs operates* b3 itse # or throu%h its franchisees* a %lo"al chain of fast food restaurants# 0cDonaldOs@<A o!ns a family of mar&s@)A includin% the P1i% 0acQ mar& for its Pdou"le dec&er ham"ur%er sand!ich#Q@?A0cDonaldOs re%istered this trademar& !ith the 7nited States Trademar& Re%istry on (? Octo"er (+,+# @,A 1ased on this Dome Re%istration* 0cDonaldOs applied for there%istration o# the same mar& in the )rincipa Re%ister of the then Philippine 1ureau of Patents* Trademar&s and Technolo%y =PP1PTTQ>* no! the Intellectual Property Office =PIPOQ># )endin+ approval of its application* 0cDonaldOs introduced its P1i% 0acQ ham"ur%er sand!iches in the Philippine mar&et in Septem"er (+B(# On (B 'uly (+B)* theP1PTT allo!ed re%istration o# the P1i% 0acQ mar& in the )rincipa Re%ister "ased on its Dome Re%istration in the 7nited States# .i&e its other mar&s* 0cDonaldOs displays the P1i% 0acQ

mar& in items@BA and paraphernalia@+A in its restaurants* and in its outdoor and indoor si%na%es# From (+BE to (++-* 0cDonaldOs spent P(-#) million in advertisement for P1i% 0acQ ham"ur%er sand!iches alone#@(-A Petitioner 0cJeor%e Food Industries =Ppetitioner 0cJeor%eQ>* a domestic corporation* is 0cDonaldOs Philippine franchisee#@((A Respondent .#C# 1i% 0a& 1ur%er* Inc# =Prespondent corporationQ> is a domestic corporation !hich operates fast food outlets and snac& vans in 0etro 0anila and near"y provinces#@(EA Respondent corporationOs menu includes ham"ur%er sand!iches and other food items#@(5A Respondents Francis 1# Dy* /dna $# Dy* Rene 1# Dy* Cilliam 1# Dy* 'esus $ycardo* $raceli $ycardo* and Jrace Duerto =Pprivate respondentsQ> are the incorporators* stoc&holders and directors of respondent corporation#@(<A On E( Octo"er (+BB* respondent corporation applied !ith the P1PTT for the re%istration o# the P1i% 0a&Q mar& for its ham"ur%er sand!iches# 0cDonaldOs opposed respondent corporationOs application on the %round that P1i% 0a&Q !as a colora"le imitation of its re%istered P1i% 0acQ mar& for the same food products# 0cDonaldOs also informed respondent Francis Dy =Prespondent DyQ>* the chairman of the 1oard of Directors of respondent corporation* of its eFclusive ri%ht to

the P1i% 0acQ mar& and reGuested him to desist from usin% the P1i% 0acQ mar& or an3 similar mar&# Davin% received no reply from respondent Dy* petitioners on ? 'une (++- sued respondents in the Re%ional Trial Court of 0a&ati* 1ranch (5, =PRTCQ>* for trademar& infrin%ement and unfair competition# In its Order of (( 'uly (++-* the RTC issued a temporary restrainin% order =PTROQ> a%ainst respondents en:oinin% them from usin% the P1i% 0a&Q mar& in the operation o# their "usiness in the National Capital Re%ion#@()A On (? $u%ust (++-* the RTC issued a !rit of preliminary in:unction replacin% the TRO#@(?A In their $ns!er* respondents admitted that they have "een usin% the name P1i% 0a& 1ur%erQ for their fast food "usiness# Respondents claimed* ho!ever* that 0cDonaldOs does not have an eFclusive ri%ht to the P1i% 0acQ mar& or to an3 other similar mar&# Respondents point out that the Isaiyas Jroup of Corporations =PIsaiyas JroupQ> re%istered the same mar& for ham"ur%er sand!iches !ith the P1PTT on 5( 0arch (+,+# One Rodolfo Topacio =PTopacioQ> similarly re%istered the same mar& on E< 'une (+B5* prior to0cDonaldOs re%istration on (B 'uly (+B)# A ternative 3* respondents claimed that they are not lia"le for trademar& infrin%ement or for unfair competition* as the P1i% 0a&Q mar& they sou%ht to re%ister does not constitute a colora"le imitation

of the P1i% 0acQ mar&# Respondents asserted that they did not fraudulently pass off their ham"ur%er sand!iches as those of petitionersO 1i% 0ac ham"ur%ers#@(,A Respondents sou%ht dama%es in their counterclaim# In their Reply* petitioners denied respondentsO claim that 0cDonaldOs is not the eFclusive o!ner of the P1i% 0acQ mar&# Petitioners asserted that !hile the Isaiyas Jroup and Topacio did re%ister the P1i% 0acQ mar& ahead of 0cDonaldOs* the Isaiyas Jroup did so only in the Supplemental Re%ister of the P1PTT and such re%istration does not provide an3 protection# 0cDonaldOs disclosed that it had ac=uired TopacioOs ri%hts to his re%istration in a Deed of $ssi%nment dated (B 0ay (+B(#@(BA

!)e !r3%6 Co2r(A, R263&8 On ) Septem"er (++<* the RTC rendered :ud%ment =PRTC DecisionQ> findin% respondent corporation lia"le for trademar& infrin%ement and unfair competition# >o!ever* the RTC dismissed the complaint a%ainst private respondents and the counterclaim a%ainst petitioners for lac& of merit and insufficiency of evidence# The RTC held8

7ndenia"ly* the mar& P1@i%A 0@acAQ is a re%istered trademar& for plaintiff 0cDonaldOs* and as such* it is entitled @toA protection a%ainst infrin%ement# FFFF ;here exist some distinctions "et!een the names P1@i%A 0@acAQ and P1@i%A 0@a&AQ as appearin% in the respective si%na%es* !rappers and containers of the food products of the parties# 1ut infrin%ement %oes "eyond the physical features of the Guestioned name and the ori%inal name# There are still other factors to "e considered# FFFF

Si%nificantly* the contendin% parties are "oth in the "usiness of fast food chains and restaurants# $n avera%e person !ho is hun%ry and !ants to eat a ham"ur%er sand!ich may not "e discriminatin% enou%h to loo& for a 0cDonaldOs restaurant and "uy a P1@i%A 0@acAQ ham"ur%er# Once he sees a stall sellin% ham"ur%er sand!ich* in all li&elihood* he !ill dip into his poc&et and order a P1@i%A 0@a&AQ ham"ur%er sand!ich# Plaintiff 0cDonaldOs fast food chain has attained !ide popularity and acceptance "y

the consumin% pu"lic so much so that its air conditioned food outlets and restaurants !ill perhaps not "e mista&en "y many to "e the same as defendant corporationOs mo"ile snac& vans ocated alon% "usy streets or hi%h!ays# 1ut the thin% is that !hat is "ein% sold "y both contendin% parties is a food item R a ham"ur%er sand!ich !hich is for immediate consumption* so that a "uyer may easily "e confused or deceived into thin&in% that the P1@i%A 0@a&AQ ham"ur%er sand!ich he "ou%ht is a food product of plaintiff 0cDonaldOs* or a su"sidiary or allied outlet thereo## Surely* defendant corporation has its o!n secret in%redients to ma&e its ham"ur%er sand!iches as palata"le and as tasty as the other "rands in the mar&et* considerin% the &een competition amon% mushroomin% ham"ur%er stands and multinational fast food chains and restaurants# >ence* the trademar& P1@i%A 0@acAQ has "een infrin%ed "y defendant corporation !hen it used the name P1@i%A 0@a&AQ in its si%na%es* !rappers* and containers in connection !ith its food "usiness# FFFF Did the same acts of defendants in usin% the name P1@i%A 0@a&AQ as a trademar& or tradename in their si%na%es* or in causin% the name P1@i%A 0@a&AQ to "e printed on the !rappers and containers of their food products also constitute an act of unfair competition under Section E+ of the Trademar& .a!S

The ans!er is in the affirmative# FFFF The FFF provision of the la! concernin+ unfair competition is "roader and more inclusive than the la! concernin+ the infrin%ement of trademar&* !hich is of more imited ran%e* "ut !ithin its narro!er ran%e reco%ni3es a more eFclusive ri%ht derived "y the adoption and re%istration o# the trademar& "y the person !hose %oods or services are first associated there!ith# FFF 7ot!ithstandin+ the distinction "et!een an action for trademar& infrin%ement and an action for unfair competition* ho!ever* the la! eFtends su"stantially the same relief to the in:ured party for both cases# =See Sections E5 and E+ of Repu"lic $ct No# (??> An3 conduct may "e said to constitute unfair competition if the effect is to pass off on the pu"lic the %oods of one man as the %oods of another# The choice of P1@i%A 0@a&AQ as tradename "y defendant corporation is not merely for sentimental reasons "ut !as clearly made to ta&e advanta%e of the reputation* popularity and the esta"lished %ood!ill of plaintiff 0cDonaldOs# For* as stated in Section E+* a person is %uilty of unfair competition !ho in sellin% his %oods sha %ive them the %eneral appearance* of %oods of another manufacturer or dealer* either as to the %oods themselves or in the !rappin% of the

pac&a%es in !hich they are contained* or the devices or !ords thereon* or in an3 other feature of their appearance* !hich !ould li&ely influence purchasers to "elieve that the %oods offered are those of a manufacturer or dealer other than the actua manufacturer or dealer# ;hus* plaintiffs have esta"lished their valid cause of action a%ainst the defendants for trademar& infrin%ement and unfair competition and for dama%es#@(+A

The dispositive portion of the RTC Decision provides8 CD/R/FOR/* :ud%ment is rendered in favor of plaintiffs 0cDonaldOs Corporation and 0cJeor%e Food Industries* Inc# and a%ainst defendant .#C# 1i% 0a& 1ur%er* Inc#* as follo!s8 (# The !rit of preliminary in:unction issued in this case on @(? $u%ust (++-A is made permanentI E# Defendant .#C# 1i% 0a& 1ur%er* Inc# is ordered to pay plaintiffs actua dama%es in the amount o# P<--*---#--* eFemplary dama%es in the amount o# P(--*---#--* and attorneyOs fees and eFpenses of liti%ation in the amount o# P(--*---#--I

5# The complaint a%ainst defendants Francis 1# Dy* /dna $# Dy* Rene 1# Dy* Ciliam 1# Dy* 'esus $ycardo* $raceli $ycardo and Jrace Duerto* as !e as all counter claims* are dismissed for lac& of merit as !e as for insufficiency of evidence#@E-A

Respondents appealed to the Court of $ppeals#

!)e R263&8 o4 ()e Co2r( o4 A99e%6, On E? Novem"er (+++* the Court of $ppeals rendered :ud%ment =PCourt of $ppealsO DecisionQ> reversin% the RTC Decision and orderin% 0cDonaldOs to pay respondentsP(*?--*--- as actua and compensatory dama%es and P5--*--- as moral dama%es# The Court of $ppeals held8 Plaintiffs appellees in the instant case !ould li&e to impress on this Court that the use o# defendants appellants of its corporate name R the !hole P.#C# 1@i%A 0@a&A 1@ur%erA* I@ncA#Q !hich appears on their food pac&a%es* si%na%es and advertisements is an infrin%ement of their trademar& P1@i%A 0@acAQ !hich they use to identify @theirA dou"le dec&er sand!ich* sold in a Styrofoam "oF pac&a%in% material !ith the

0cDonaldOs lo%o of um"rella P0Q stamped thereon* to+ether !ith the printed mar& in red "l@oAc& capital letters* the !ords "ein% separated "y a sin+ e space# Specifically* plaintiffs appellees ar%ue that defendants appellantsO use of their corporate name is a colora"le imitation of their trademar& P1i% 0acQ# FFFF To Our mind* ho!ever* this Court is fully convinced that no colora"le imitation eFists# $s the definition dictates* it is not su##icient that a similarity eFists in both names* "ut that more important 3* the over all presentation* or in their essential* su"stantive and distinctive parts is such as !ould li&ely 0IS./$D or CONF7S/ persons in the ordinary course of purchasin% the %enuine article# $ care#u comparison of the !ay the trademar& P1@i%A 0@acAQ is "ein% used "y plaintiffs appellees and corporate name .#C# 1i% 0a& 1ur%er* Inc# "y defendants appellants* !ould readily revea that no confusion could ta&e place* or that the ordinary purchasers !ould "e misled "y it# $s pointed out "y defendants appellants* the plaintiffs appelleesO trademar& is used to desi%nate only one product* a dou"le dec&er sand!ich sold in a Styrofoam "oF !ith the P0cDonaldsQ lo%o# ?n the other hand, !hat the defendants appellants corporation is usin% is not a trademar& for its food product "ut a "usiness or

corporate name# They use the "usiness name P.#C# 1i% 0a& 1ur%er* Inc#Q in their restaurant "usiness !hich serves diversified food items such as siopao* noodles* pi33a* and sand!iches such as hotdo%* ham* fish "ur%er and ham"ur%er# Second 3* defendants appellantsO corporate or "usiness name appearin% in the food pac&a%es and si%na%es are !ritten in silhouette red oran%e letters !ith the P"Q and PmQ in upper case letters# $"ove the !ords P1i% 0a&Q are the upper case letter P.#C#Q# 1elo! the !ords P1i% 0a&Q are the !ords P1ur%er* Inc#Q spelled out in upper case letters# Furthermore* said corporate or "usiness name appearin% in such food pac&a%es and si%na%es is al!ays accompanied "y the company mascot* a youn% chu""y "oy named 0a&y !ho !ears a red T shirt !ith the upper case PmQ appearin%therein and a "lue lo!er %arment# Fina 3, the defendants appellantsO food pac&a%es are made of plastic material# FFFF FFF @IAt is readily apparent to the na&ed eye that there appears a vast difference in the appearance of the product and the manner that the tradename P1i% 0a&Q is "ein% used and presented to the pu"lic# $s earlier noted* there are %larin% dissimilarities "et!een plaintiffs appelleesO trademar& and defendants appellantsO corporate name# Plaintiffs appelleesO product carryin% the trademar& P1@i%A 0@acAQ is a

dou"le dec&er sand!ich =depicted in the tray mat containin% photo%raphs of the various food products FFF sold in a Styrofoam "oF !ith the P0cDonaldOsQ lo%o and trademar& in red* "l@oAc& capital letters printed thereon FFF at a price !hich is more eFpensive than the defendants appellantsO compara"le food products# "n order to "uy a P1i% 0acQ* a customer needs to visit an air conditioned P0cDonaldOsQ restaurant usually ocated in a near"y commercial center* advertised and identified "y its lo%o the um"rella P0Q* and its mascot R PRonald 0cDonaldQ# $ typical 0cDonaldOs restaurant "oasts of a play%round for &ids* a second floor to accommodate additiona customers* a drive thru to allo! customers !ith cars to ma&e orders !ithout ali%htin% from their vehicles* the interiors of the "uildin% are !ell li%hted* distinctly decorated and painted !ith pastel colors FFF# In "uyin% a P1@i%A 0@acAQ* it is necessar3 to specify it "y its trademar&# ;hus* a customer needs to loo& for a P0cDonaldOsQ and enter it first "efore he can find a ham"ur%er sand!ich !hich carry the mar& P1i% 0acQ# ?n the other hand, defendants appellants sell their %oods throu%h snac& vans FFFF $nent the alle%ation that defendants appellants are %uilty of unfair competition* Ce i-e!ise find the same untena"le#

7nfair competition is defined as Pthe emp o3ment of deception or an3 other means contrary to %ood faith "y !hich a person sha pass off the %oods manufactured "y him or in !hich he deals* or his "usiness* or service* for those of another !ho has already esta"lished %ood !ill for his similar %ood* "usiness or services* or an3 acts calculated to produce the same resultQ =Sec. 5@, Rep. Act 7o. .66, as amended># To constitute unfair competition therefore it must necessari 3 follo! that there !as malice and that the entity concerned !as in "ad faith# In the case at "ar* Ce find no su##icient evidence adduced "y plaintiffs appellees that defendants appellants deli"erately tried to pass off the %oods manufactured "y them for those of plaintiffs appellees# The mere suspected similarity in the sound of the defendants appellantsO corporate name !ith the plaintiffs appelleesO trademar& is not su##icient evidence to conclude unfair competition# Defendants appellants eFplained that the name P0@a&AQ in their corporate name !as derived from both the first names of the mother and father of defendant Francis Dy* !hose names are 0aFima and Limsoy# Cith this eFplanation* it is up to the plaintiffs appellees to prove "ad faith on the part o# defendants appellants# It is a settled rule that the

la! al!ays presumes %ood faith such that an3 person !ho see&s to "e a!arded dama%es due to acts of another has the "urden of provin+ that the atter acted in "ad faith or !ith ill motive# @E(A

Petitioners sou%ht reconsideration of the Court of $ppealsO Decision "ut the appellate court denied their motion in its Resolution of (( 'uly E---# >ence* this petition for revie!# Petitioners raise the follo!in% %rounds for their petition8 I# TD/ CO7RT OF $PP/$.S /RR/D IN FINDINJ TD$T R/SPOND/NTSO CORPOR$T/ N$0/ P.#C# 1IJ 0$L 17RJ/R* INC#Q IS NOT $ CO.OR$1./ I0IT$TION OF TD/ 0CDON$.DOS TR$D/0$RL P1IJ 0$CQ* S7CD CO.OR$1./ I0IT$TION 1/INJ $N 9L9,97; ?F TR$D/0$RL INFRINJ/0/NT# $# Respondents use the !ords P1i% 0a&Q as trademar& for their products and not merely as their "usiness or corporate name# 1# $s a trademar&* respondentsO P1i% 0a&Q is

undenia"ly and unGuestiona"ly similar to petitionersO P1i% 0acQ trademar& "ased on the dominancy test and the idem sonans test resultin% ineFora"ly in confusion on the part of the consumin% pu"lic# II# TD/ CO7RT OF $PP/$.S /RR/D IN R/F7SINJ TO CONSID/R TD/ IND/R/NT SI0I.$RIT6 1/TC//N TD/ 0$RL P1IJ 0$LQ $ND TD/ CORD 0$RL P1IJ 0$CQ $S $N"7$"CA;"?7 OF R/SPOND/NTSO INT/NT TO D/C/IV/ OR D/FR$7D FOR )AR)?S9S ?F 9S;A2L"S>"7< 7NF$IR CO0P/TITION# @EEA Petitioners pray that !e set aside the Court of $ppealsO Decision and reinstate the RTC Decision# In their Comment to the petition* respondents Guestion the propriety of this petition as it alle%edly raises only Guestions of fact# On the merits* respondents contend that the Court of $ppeals committed no reversi"le error in findin% them not lia"le for trademar& infrin%ement and unfair competition and in orderin% petitioners to pay dama%es#

!)e I,,2e, The issues are8 (# Procedurally* !hether the Guestions raised in this petition are proper for a petition for revie! under Rule <)# E# On the merits* =a> !hether respondents used the !ords P1i% 0a&Q not only as part of the corporate name P.#C# 1i% 0a& 1ur%er* Inc#Q "ut also as a trademar& for their ham"ur%er products* and ="> !hether respondent corporation is lia"le for trademar& infrin%ement and unfair competition#@E5A !)e Co2r(A, R263&8 The petition has merit# On Whether the Questions Raised in the Petition are Proper for a Petition for Review $ party intendin+ to appeal from a :ud%ment of the Court of $ppeals may file !ith this Court a petition for revie! under Section ( of Rule <) =PSection (Q>@E<A raisin% only

Guestions of la!# $ Guestion of la! eFists !hen the dou"t or difference arises on !hat the la! is on a certain state of facts# There is a Guestion of fact !hen the dou"t or difference arises on the truth or falsity of the a e+ed facts# @E)A Dere* petitioners raise Guestions of fact and la! in assailin% the Court of $ppealsO findin%s on respondent corporationOs non lia"ility for trademar& infrin%ement and unfair competition# Ordinarily* the Court can deny due course to such a petition# In vie!* ho!ever* of the contradictory findin%s of fact of the RTC and Court of $ppeals* the Court opts to accept the petition* this "ein% one of the reco%ni3ed eFceptions to Section (#@E?A Ce too& a similar course of action in Asia Brewery, Inc. v. Court of Appea s@E,A !hich also involved a suit for trademar& infrin%ement and unfair competition in !hich the trial court and the Court of $ppeals arrived at conflictin% findin%s#

On the !anner Respondents "sed DBi# !a$% in their Business

Petitioners contend that the Court of $ppeals erred in rulin% that the corporate name P.#C# 1i% 0a& 1ur%er* Inc#Q appears in the pac&a%in% for respondentsO ham"ur%er products

and not the !ords P1i% 0a&Q only# The contention has merit# The evidence presented durin% the hearin%s on petitionersO motion for the issuance of a !rit of preliminary in:unction sho!s that the plastic !rappin%s and plastic "a%s used "y respondents for their ham"ur%er sand!iches "ore the !ords P1i% 0a&#Q The other descriptive !ords P"ur%erQ and P(--T pure "eefQ !ere set in smaller type* alon% !ith the locations of "ranches#@EBA RespondentsO cash invoices simply refer to their ham"ur%er sand!iches as P1i% 0a&#Q@E+A It is respondentsO snac& vans that carry the !ords P.#C# 1i% 0a& 1ur%er* Inc#Q@5-A It !as only durin% the trial that respondents presented in evidence the plastic !rappers and "a%s for their ham"ur%er sand!iches re ied on "y the Court of $ppeals# @5(A RespondentsO plastic !rappers and "a%s !ere identical !ith those petitioners presented durin% the hearin%s for the in:unctive !rit eFcept that the letters P.#C#Q and the !ords P1ur%er* Inc#Q in respondentsO evidence !ere added a"ove and "elo! the !ords P1i% 0a&*Q respective 3# Since petitionersO complaint !as "ased on facts eFistin% "efore and durin% the hearin%s on the in:unctive !rit* the facts esta"lished durin% those hearin%s are the proper factual "ases for the disposition of the issues raised in this petition#

On the Issue of &rade'ar$ Infrin#e'ent

Section EE =PSection EE> of Repu"lic $ct No# (??* as amended =PR$ (??Q>* the la! applica"le to this case* @5EA defines trademar& infrin%ement as follo!s8 "n#rin+ement, !hat constitutes# U An3 person !ho @(A sha use* !ithout the consent of the re%istrant* an3 reproduction* counterfeit* copy or colora"le imitation of an3 re%istered mar& or trade name in connection !ith the sale* offerin% for sale* or advertisin% of an3 %oods* "usiness or services on or in connection !ith !hich such use is li&ely to cause confusion or mista&e or to deceive purchasers or others as to the source or ori%in of such %oods or services* or identity of such "usinessI or @EA reproduce* counterfeit* copy* or colora"ly imitate an3 such mar& or trade name and apply such reproduction* counterfeit* copy* or colora"le imitation to la"els* si%ns* prints* pac&a%es* !rappers* receptacles or advertisements intended to "e used upon or in connection !ith such %oods* "usiness or services* sha "e iab e to a civil action "y the re%istrant for an3 or a o# the remedies herein provided#@55A

Petitioners "ase their cause of action under the first part of Section EE* i.e. respondents alle%edly used* !ithout petitionersO consent* a colora"le imitation of the P1i% 0acQ mar& in advertisin% and sellin% respondentsO ham"ur%er sand!iches# This li&ely caused confusion in the mind of the purchasin% pu"lic on the source of the ham"ur%ers or the identity of the "usiness# To estab ish trademar& infrin%ement* the follo!in% elements must "e sho!n8 =(> the validity of plaintiffOs mar&I =E> the plaintiffOs o!nership of the mar&I and =5> the use o#the mar& or its colora"le imitation "y the a e+ed infrin%er results in Pli&elihood of confusion#Q@5<A Of these* it is the e ement o# li&elihood of confusion that is the %ravamen of trademar& infrin%ement#@5)A On the (a idity of the )Bi# !ac%!ar$ and !c*ona d+s Ownership of such !ar$ $ mar& is valid if it is PdistinctiveQ and thus not "arred from re%istration under Section <@5?A of R$ (?? =PSection <Q># >o!ever* once re%istered* not only the mar&Os validity "ut also the re%istrantOs o!nership of the mar& is prima #aciepresumed#@5,A Respondents contend that of the t!o !ords in the P1i% 0acQ

mar&* it is only the !ord P0acQ that is valid "ecause the !ord P1i%Q is %eneric and descriptive =proscri"ed under Section <@eA>* and thus Pincapa"le of eFclusive appropriation#Q@5BA The contention has no merit# The P1i% 0acQ mar&* !hich should "e treated in its entirety and not dissected !ord for !ord*@5+A is neither %eneric nor descriptive# Jeneric mar&s are commonly used as the name or description of a $ind o# %oods*@<-A such as P.iteQ for "eer@<(A or PChocolate Fud%eQ for chocolate soda drin&#@<EA Descriptive mar&s* on the other hand* convey the characteristics* #unctions* Gualities or in%redients of a product to one !ho has never seen it or does not &no! it eFists*@<5A such as P$rthriticareQ for arthritis medication#@<<A On the contrary* P1i% 0acQ falls under the class o# fanciful or ar"itrary mar&s as it "ears no lo%ical relation to the actua characteristics of the product it represents#@<)A As such* it is hi%hly distinctive and thus valid# Si%nificantly* the trademar& P.ittle De""ieQ for snac& ca&es !as found ar"itrary or fanciful#@<?A The Court also finds that petitioners have duly esta"lished 0cDonaldOs eFclusive o!nership of the P1i% 0acQ mar&# $lthou%h Topacio and the Isaiyas Jroup re%istered the P1i% 0acQ mar& ahead of 0cDonaldOs* Topacio* as petitioners disclosed* had already assi%ned his ri%hts to 0cDonaldOs# The Isaiyas Jroup* on the other hand* re%istered its trademar& only in the Supplemental Re%ister# $ mar& !hich is not re%istered in the )rincipa Re%ister* and thus not distinctive* has no real protection#@<,A Indeed* !e have held that re%istration in the Supplemental Re%ister is not even a prima #acie evidence of

the validity of the re%istrantOs eFclusive ri%ht to use the mar& on the %oods specified in the certificate#@<BA On &ypes of Confusion Section EE covers t!o types of confusion arisin% from the use o# similar or colora"le imitation mar&s* name 3* confusion of %oods =product confusion> and confusion of "usiness =source or ori%in confusion># In ,ter in# Products Internationa , Incorporated v. -arbenfabri$en Bayer A$tien#ese schaft* et a .*@<+A the Court distin%uished these t!o types of confusion* thus8 @RudolfA Callman notes t!o types of confusion# The first is the confusion of %oods Pin !hich event the ordinarily prudent purchaser !ould "e induced to purchase one product in the "elief that he !as purchasin% the other#Q FFF The other is the confusion of "usiness8 PDere thou%h the %oods of the parties are different* the defendantOs product is such as mi%ht reasona"ly "e assumed to ori%inate !ith the plaintiff* and the pu"lic !ould then "e deceived either into that "elief or into the "elief that there is some connection "et!een the plaintiff and defendant !hich* in #act* does not eFist#Q

7nder $ct No# ???*@)-A the first trademar& la!* infrin%ement !as limited to confusion of %oods only* !hen the infrin%in% mar& is used on P%oods of a similar &ind#Q@)(A Thus* no relief !as afforded to the party !hose re%istered mar& or its colora"le imitation is used on different althou%h related %oods# To remedy this situation* Con%ress enacted R$ (?? on E- 'une (+<,# In definin% trademar& infrin%ement* Section EE of R$ (?? deleted the reGuirement in Guestion and eFpanded its scope to include such use of the mar& or its colora"le imitation that is li&ely to result in confusion on Pthe source or ori%in of such %oods or services* or identity of such "usiness#Q@)EA ;hus* !hile there is confusion of %oods !hen the products are competin%* confusion of "usiness eFists !hen the products are non competin% "ut related enou%h to produce confusion of affiliation#@)5A On Whether Confusion of .oods and Confusion of Business are App icab e Petitioners claim that respondentsO use of the P1i% 0a&Q mar& on respondentsO ham"ur%ers results in confusion of %oods* particularly !ith respect to petitionersO ham"ur%ers la"eled P1i% 0ac#Q ;hus* petitioners a e+ed in their

complaint8 (#()# Defendants have unduly pre:udiced and clearly infrin%ed upon the property ri%hts of plaintiffs in the 0cDonaldOs 0ar&s* particularly the mar& P1@i%A 0@acAQ# DefendantsO unauthori3ed acts are li&ely* and calculated* to confuse* mislead or deceive the pu"lic into "elievin% that the 9ro'21(, %&' ,erv31e, o44ere' b7 'e4e&'%&( B38 M%5 1ur%er* and the "usiness it is en%a%ed in* are approved and sponsored "y* or affiliated !ith* plaintiffs#@)<A =/mphasis supplied> Since respondents used the P1i% 0a&Q mar& on the same %oods* i.e. ham"ur%er sand!iches* that petitionersO P1i% 0acQ mar& is used* trademar& infrin%ement throu%h confusion of %oods is a proper issue in this case# Petitioners also claim that respondentsO use of the P1i% 0a&Q mar& in the sale of ham"ur%ers* the same "usiness that petitioners are en%a%ed in* results in confusion of "usiness# )etitioners a e+ed in their complaint8 (#(-# For some period o# time* and !ithout the consent of plaintiff 0cDonaldOs nor its licenseeNfranchisee* plaintiff 0cJeor%e* and in clear violation of plaintiffsO eFclusive ri%ht to

use andBorappropriate the 0cDonaldOs mar&s* defendant 1i% 0a& 1ur%er actin% throu%h individual defendants* has "een operatin% P1i% 0a& 1ur%erQ* a fast food restaurant "usiness dealin% in the sale of ham"ur%er and cheese"ur%er sand!iches* french fries and other food products* and has caused to "e printed on the !rapper of defendantOs food products and incorporated in its si%na%es the name P1i% 0a& 1ur%erQ* !hich is confusin%ly similar to andBor is a colora"le imitation of the plaintiff 0cDonaldOs mar& P1@i%A 0@acAQ* FFF# De4e&'%&( B38 M%5 B2r8er )%, ()2, 2&E2,(67 1re%(e' ()e 3m9re,,3o& ()%( 3(, b2,3&e,, 3, %99rove' %&' ,9o&,ore' b7, or %44363%(e' ;3(), 96%3&(344,. FFFF E#E As a conse=uence o# the acts committed "y defendants* !hich unduly pre:udice and infrin%e upon the property ri%hts of plaintiffs 0cDonaldOs and 0cJeor%e as the real o!ner and ri%htful proprietor* and the licenseeNfranchisee* respective 3* of the 0cDonaldOs mar&s* and !hich are li&ely to have 1%2,e' 1o&42,3o& or 'e1e3ve' ()e 92b631 as to ()e (r2e ,o2r1e, ,9o&,or,)39 or %44363%(3o& o4 'e4e&'%&(,A 4oo' 9ro'21(, %&' re,(%2r%&( b2,3&e,,, plaintiffs have suffered and continue to suffer actua dama%es in the #orm o# in:ury to their "usiness reputation and %ood!ill* and of the dilution o# the distinctive Guality of the 0cDonaldOs mar&s* in particu ar* the mar&

P1@i%A 0@acAQ#@))A =/mphasis supplied> Respondents admit that their business inc udes se in+ hambur+er sand!iches, the same #ood product that petitioners se usin+ the C2i+ ,acD mar-. ;hus* trademar& infrin%ement throu%h confusion of "usiness is also a proper issue in this case# Respondents assert that their P1i% 0a&Q ham"ur%ers cater main 3 to the lo! income %roup !hile petitionersO P1i% 0acQ ham"ur%ers cater to the middle and upper income %roups# /ven if this is true* the li&elihood of confusion of "usiness remains* since the lo! income %roup mi%ht "e led to "elieve that the P1i% 0a&Q ham"ur%ers are the lo! end ham"ur%ers mar&eted "y petitioners# $fter all* petitioners have the eFclusive ri%ht to use the P1i% 0acQ mar&# ?n the other hand, respondents !ould "enefit "y associatin% their lo! end ham"ur%ers* throu%h the use o# the P1i% 0a&Q mar&* !ith petitionersO hi%h end P1i% 0acQ ham"ur%ers* leadin% to li&elihood of confusion in the identity of "usiness# Respondents further claim that petitioners use the P1i% 0acQ mar& only on petitionersO dou"le dec&er ham"ur%ers* !hile respondents use the P1i% 0a&Q mar& on ham"ur%ers and other products li&e siopao* noodles and pi33a# Respondents also point out that petitioners sell their 1i% 0ac dou"le dec&ers in

a styrofoam "oF !ith the P0cDonaldOsQ lo%o and trademar& in red* "loc& letters at a price more eFpensive than the ham"ur%ers of respondents# In contrast* respondents sell their 1i% 0a& ham"ur%ers in plastic !rappers and plastic "a%s# Respondents further point out that petitionersO restaurants are air conditioned "uildin%s !ith drive thru service* compared to respondentsO mo"ile vans# These and other factors respondents cite cannot ne%ate the undisputed fact that respondents use their P1i% 0a&Q mar& on ham"ur%ers* the same food product that petitionersO sell !ith the use o# their re%istered mar& P1i% 0ac#Q Chether a ham"ur%er is sin%le* dou"le or triple dec&er* and !hether !rapped in plastic or styrofoam* it remains the same ham"ur%er food product# /ven respondentsO use of the P1i% 0a&Q mar& on non ham"ur%er food products cannot eFcuse their infrin%ement of petitionersO re%istered mar&* other!ise re%istered mar&s !ill lose their protection under the la!# The re%istered trademar& o!ner may use his mar& on the same or similar products* in different se%ments of the mar&et* and at different price levels dependin% on variations of the products for specific se%ments of the mar&et# The Court has reco%ni3ed that the re%istered trademar& o!ner en:oys protection in product and mar&et areas that are the&orm%6 9o(e&(3%6 eF9%&,3o& o4 )3, b2,3&e,,. ;hus* the Court has declared8

0odern la! reco%ni3es that the protection to !hich the o!ner of a trademar& is entitled is not limited to %uardin% his %oods or "usiness from actua mar&et competition !ith identical or similar products of the parties* "ut eFtends to all cases in !hich the use "y a :unior appropriator of a trade mar& or trade name is 635e67 (o 6e%' (o % 1o&42,3o& o4 ,o2r1e, %, ;)ere 9ro,9e1(3ve 92r1)%,er, ;o26' be m3,6e' 3&(o ()3&53&8 ()%( ()e 1om96%3&3&8 9%r(7 )%, eF(e&'e' )3, b2,3&e,, 3&(o ()e 43e6' =see (<B $.R )? et seGI )5 $m 'ur# ),?> or is in an3 !ay connected !ith the activities of the infrin%erI or ;)e& 3( 4ore,(%66, ()e &orm%6 9o(e&(3%6 eF9%&,3o& o4 )3, b2,3&e,, =v# (<B $.R* ,,* B<I )E $m# 'ur# ),?* ),,>#@)?A =/mphasis supplied>

On Whether Respondents+ "se of the )Bi# !a$% !ar$ Resu ts in /i$e ihood of Confusion In determinin+ li&elihood of confusion* :urisprudence has developed t!o tests* the dominancy test and the holistic test#@),A The dominancy test focuses on the similarity of the preva ent features of the competin% trademar&s that mi%ht cause confusion# In contrast* the holistic test re=uires the court

to consider the entirety of the mar&s as applied to the products* includin% the la"els and pac&a%in%* in determinin+ confusin% similarity# The Court of $ppeals* in findin% that there is no li&elihood of confusion that could arise in the use o# respondentsO P1i% 0a&Q mar& on ham"ur%ers* relied on the holistic test# ;hus* the Court of $ppeals ruled that Pit is not su##icient that a similarity eFists in both name=s>* "ut that more important 3* the overa 9re,e&(%(3o&* or in their essential* su"stantive and distinctive parts is such as !ould li&ely 0IS./$D or CONF7S/ persons in the ordinary course of purchasin% the %enuine article#Q The holistic test considers the t!o mar&s in their entirety* as they appear on the %oods !ith their la"els and pac&a%in%# It is not enou%h to consider their !ords and compare the spellin% and pronunciation o# the !ords#@)BA Respondents no! vi%orously ar%ue that the Court of $ppealsO application of the holistic test to this case is correct and in accord !ith prevailin% :urisprudence# This Court* ho!ever* has relied on the dominancy test rather than the holistic test# The dominancy test considers the dominant features in the competin% mar&s indeterminin+ !hether they are confusin%ly similar# 7nder the dominancy test* courts %ive %reater !ei%ht to the similarity

of the appearance of the product arisin% from theadoption o# the dominant features of the re%istered mar&* disre%ardin% minor differences#@)+A Courts !ill consider more the aural and visual impressions created "y the mar&s in the pu"lic mind* %ivin% little !ei%ht to factors li&e prices* Guality* sales outlets and mar&et se%ments# ;hus* in the (+)< case of Co &ion# ,a v. *irector of Patents * @?-A the Court ruled8 FFF It has "een consistently held that the Guestion of infrin%ement of a trademar& is to "e determined "y the test of dominancy# Similarity in si3e* form and color* !hile relevant* is not conclusive# I4 ()e 1om9e(3&8 (r%'em%r5 1o&(%3&, ()e m%3& or e,,e&(3%6 or 'om3&%&( 4e%(2re, o4 %&o()er, %&' 1o&42,3o& %&' 'e1e9(3o& 3, 635e67 (o re,26(, 3&4r3&8eme&( (%5e, 96%1e# Duplication or imitation is not necessar3I nor is it necessar3 that the infrin%in% la"el should su%%est an effort to imitate# =J# Deilman 1re!in% Co# vs# Independent 1re!in% Co#* (+( F#* <B+* <+)* citin% /a%le Chite .ead Co# vs# Pflu%h =CC> (B- Fed# ),+># The Guestion at issue in cases o# infrin%ement of trademar&s is !hether the use o# the mar&s involved !ould "e li&ely to cause confusion or mista&es in the mind of the pu"lic or deceive purchasers# =$u"urn Ru""er Corporation vs# Donover Ru""er Co#* (-, F# Ed )BBI FFF> =/mphasis supplied#>

The Court reiterated the dominancy test in /i' 0oa v. *irector of Patents*@?(A Phi . 1ut Industry, Inc. v. ,tandard Brands Inc.*@?EA Converse Rubber Corporation v. "niversa Rubber Products, Inc.*@?5A and Asia Brewery, Inc. v. Court of Appea s#@?<A In the E--( case of ,ociete *es Produits 1est 2, ,.A. v. Court of Appea s*@?)A the Court eFplicitly re:ected the holistic test in this !ise8 @TAhe (o(%63(7 or )o63,(31 (e,( 3, 1o&(r%r7 (o ()e e6eme&(%r7 9o,(26%(e o4 ()e 6%; o& (r%'em%r5, %&' 2&4%3r 1om9e(3(3o& that confusin% similarity is to "e determined on the basis o# visual* aural* connotative comparisons and overa impressions e&8e&'ere' b7 ()e m%r5, 3& 1o&(rover,7 as they are encountered in the realities of the mar&etplace# =/mphasis supplied>

The test of dominancy is no! eFplicitly incorporated into la! in Section ())#( of the Intellectual Property Code !hich defines infrin%ement as the Pcolora"le imitation o# a re%istered mar& FFF or a 'om3&%&( 4e%(2re thereo##Q $pplyin% the dominancy test* the Court finds that respondentsO use of the P1i% 0a&Q mar& results in li&elihood of

confusion# First* P1i% 0a&Q sounds exact 3 the same as P1i% 0ac#Q Second* the first !ord in P1i% 0a&Q is exact 3 the same as the first !ord in P1i% 0ac#Q Third* the first t!o letters in P0a&Q are the same as the first t!o letters in P0ac#Q Fourth* the last letter in P0a&Q !hile a P&Q sounds the same as PcQ !hen the !ord P0a&Q is pronounced# Fifth* in Filipino* the letter P&Q replaces PcQ in spellin%* thus PCaloocanQ is spelled PLaloo&an#Q In short* aurally the t!o mar&s are the same* !ith the first !ord of both mar&s phonetically the same* and the second !ord of both mar&s also phonetically the same# Visually* the t!o mar&s have both t!o !ords and siF letters* !ith the first !ord of both mar&s havin% the same letters and the second !ord havin% the same first t!o letters# In spellin%* considerin% the Filipino lan%ua%e* even the last letters of both mar&s are the same# C ear y, respondents have adopted in )Bi# !a$% not on y the do'inant but a so a 'ost a the features of )Bi# !ac#Q $pplied to the same food product of ham"ur%ers* the t!o mar&s !ill li&ely result in confusion in the pu"lic mind# The Court has ta&en into account the %2r%6 e44e1(, of the !ords and letters contained in the mar&s in determinin+ the issue o# confusin% similarity# ;hus* in !arve3 Co''ercia Co., Inc. v. Petra 0awpia 4 Co., et a .*@??A the Court held8

The follo!in% random list of confusin%ly ,3m36%r ,o2&', in the matter of trademar&s* culled from Nims* 7nfair Competition and Trade 0ar&s* (+<,* Vol# (* !ill reinforce our vie! that PS$.ONP$SQ and P.IONP$SQ are confusin%ly similar in sound8 PJold DustQ and PJold DropQI P'ant3enQ and P'ass SeaQI PSilver FlashQ and PSupper FlashQI PCascareteQ and PCel"oriteQI PCelluloidQ and PCelloniteQI PChartreuseQ and PCharseursQI PCuteFQ and PCuticleanQI PDe"eQ and P0e:eQI PLoteFQ and PFemeteFQI P9usoQ and PDoo DooQ# .eon $mdur* in his "oo& PTrade 0ar& .a! and PracticeQ* pp# <(+ <E(* cities* as comin% !ithin the purvie! of the idem sonans rule* P6useaQ and P7 C $Q* PStein!ay PianosQ and PStein"er% PianosQ* and PSeven 7pQ and P.emon 7pQ# In Co Tion% vs# Director of Patents* this Court uneGuivocally said that PCelduraQ and PCorduraQ are confusin%ly similar in soundI this Court held in Sapolin Co# vs# 1almaceda* ?, Phil# ,+) that the name P.usolinQ is an infrin%ement of the trademar& PSapolinQ* as the sound of the t!o names is almost the same# =/mphasis supplied> Certain 3* P1i% 0acQ and P1i% 0a&Q for ham"ur%ers create even %reater confusion* not only aurally "ut also visually# Indeed* a person cannot distin%uish P1i% 0acQ from P1i% 0a&Q "y their sound# Chen one hears a P1i% 0acQ or P1i% 0a&Q ham"ur%er advertisement over the radio* one !ould not

&no! !hether the P0acQ or P0a&Q ends !ith a PcQ or a P&#Q PetitionersO a%%ressive promotion of the P1i% 0acQ mar&* as "orne "y their advertisement expenses* has "uilt %ood!ill and reputation for such mar& ma&in% it one of the easily reco%ni3a"le mar&s in the mar&et today# This increases the li&elihood that consumers !ill mista&enly associate petitionersO ham"ur%ers and "usiness !ith those of respondentsO# RespondentsO ina"ility to eFplain su##icient 3 ho! and !hy they came to choose P1i% 0a&Q for their ham"ur%er sand!iches indicates their intent to imitate petitionersO P1i% 0acQ mar&# Contrary to the Court of $ppealsO findin%* respondentsO claim that their P1i% 0a&Q mar& !as inspired "y the first names of respondent DyOs mother =0aFima> and father =Limsoy> is not credi"le# $s petitioners !ell noted8 @RAespondents* particularly Respondent 0r# Francis Dy* could have arrived at a more creative choice for a corporate name "y usin% the names of his parents* especially since he !as alle%edly driven "y sentimental reasons# For one* he could have put his fatherOs name ahead of his motherOs* as is usually done in this patriarchal society* and derived letters from said names in that order# Or* he could have ta&en an eGual number o# letters =i#e#* t!o> from each name* as is the more usual thin% done# Surely* the more plausi"le reason "ehind RespondentsO choice of the

!ord P0@a&AQ* especially !hen ta&en in con:unction !ith the !ord P1@i%AQ* !as their intent to ta&e advanta%e of PetitionersO FFF P1@i%A 0@acAQ trademar&* !ith their a e+ed sentiment focused PeFplanationQ merely thou%ht of as a convenient* a beitunavailin%* eFcuse or defense for such an unfair choice of name#@?,A $"sent proof that respondentsO adoption o# the P1i% 0a&Q mar& !as due to honest mista&e or !as fortuitous*@?BA the inescapa"le conclusion is that respondents adopted the P1i% 0a&Q mar& to Pride on the coattailsQ of the more esta"lished P1i% 0acQ mar&#@?+A This saves respondents much of the eFpense in advertisin% to create mar&et reco%nition of their mar& and ham"ur%ers#@,-A Thus* !e hold that confusion is li&ely to result in the pu"lic mind# Ce sustain petitionersO claim of trademar& infrin%ement# On the /ac$ of Proof of Actua Confusion

PetitionersO failure to present proof of actua confusion does not ne%ate their claim of trademar& infrin%ement# $s noted in A'erican Wire 4 Cab e Co. v. *irector of Patents* @,(A Section EE re=uires the less strin%ent standard of

P635e63)oo' of confusionQ only# Whi e proof of actua confusion is the "est evidence of infrin%ement* its a"sence is inconseGuential#@,EA On the Issue of "nfair Co'petition Section E+ =PSection E+Q>@,5A of R$ (?? defines unfair competition* thus8 FFFF An3 person !ho !ill employ deception or an3 other means contrary to %ood faith "y !hich he sha pass off the %oods manufactured "y him or in !hich he deals* or his "usiness* or services for those of the one havin% esta"lished such %ood!ill* or !ho sha commit an3 acts calculated to produce said result* sha "e %uilty of unfair competition* and sha "e su":ect to an action there#or# "n particu ar* and !ithout in an3 !ay limitin% the scope of unfair competition* ()e 4o66o;3&8 sha be 'eeme' 8236(7 o4 2&4%3r 1om9e(3(3o&8 =a> Any 9er,o&, ;)o 3& ,e663&8 )3, 8oo', sha 83ve ()em ()e 8e&er%6 %99e%r%&1e o4 8oo', o4 %&o()er m%&24%1(2rer or 'e%6er, e3()er as to ()e 8oo', ()em,e6ve, or in the !rappin% of the pac&a%es in !hich they are contained* or ()e 'ev31e,

or ;or', ()ereo&* or in an3 feature of their appearance* !hich !ould "e li&ely to influence purchasers to "elieve that the %oods offered are those of a manufacturer or dealer* other than the actua manufacturer or dealer* or !ho other!ise clothes the %oods !ith such appearance as sha deceive the pu"lic and defraud another of his le%itimate trade* or an3 su"seGuent vendor of such %oods or an3 a%ent of an3 vendor en%a%ed in sellin% such %oods !ith a li&e purposeI ="> An3 person !ho "y an3 artifice* or device* or !ho emp o3s an3 other means calculated to induce the false "elief that such person is offerin% the services of another !ho has identified such services in the mind of the pu"licI or =c> An3 person !ho sha ma&e an3 false statement in the course o# trade or !ho sha commit an3 other act contrary to %ood faith of a nature calculated to discredit the %oods* "usiness or services of another# =/mphasis supplied> The essential e ements o# an action for unfair competition are =(> confusin% similarity in the %eneral appearance of the %oods* and =E> intent to deceive the pu"lic and defraud a competitor#@,<A The confusin% similarity may or may not result from similarity in the mar&s* "ut may result from other eFternal factors in the pac&a%in% or presentation o# the %oods# The intent to deceive and defraud may "e inferred

from the similarity of the appearance of the %oods as offered for sale to the pu"lic#@,)A Actua fraudulent intent need not "e sho!n#@,?A 7nfair competition is "roader than trademar& infrin%ement and includes passin% off %oods !ith or !ithout trademar& infrin%ement# Trademar& infrin%ement is a form of unfair competition#@,,A Trademar& infrin%ement constitutes unfair competition !hen there is not merely li&elihood of confusion* "ut also actua or pro"a"le deception on the pu"lic "ecause of the %eneral appearance of the %oods# There can "e trademar& infrin%ement !ithout unfair competition as !hen the infrin%er discloses on the la"els containin% the mar& that he manufactures the %oods* thus preventin% the pu"lic from "ein% deceived that the %oods ori%inate from the trademar& o!ner# @,BA To support their claim of unfair competition* petitioners alle%e that respondents fraudulently passed off their ham"ur%ers as P1i% 0acQ ham"ur%ers# Petitioners add that respondentsO fraudulent intent can "e inferred from the similarity of the mar&s in Guestion#@,+A Passin% off =or palmin% off> ta&es place !here the defendant* "y imitative devices on the %eneral appearance of the %oods* misleads prospective purchasers into "uyin% his merchandise under the impression that they are "uyin% that of his competitors#@B-A ;hus* the defendant %ives his %oods the %eneral appearance of the %oods of his competitor !ith the intention of deceivin% the pu"lic that the %oods are those of his

competitor# The RTC descri"ed the respective mar&s and the %oods of petitioners and respondents in this !ise8 The mar& P1@i%A 0@acAQ is used "y plaintiff 0cDonaldOs to identify its dou"le dec&er ham"ur%er sand!ich# The pac&a%in% material is a styrofoam "oF !ith the 0cDonaldOs lo%o and trademar& in red !ith "loc& capital letters printed on it# $ll letters of the P1@i%A 0@acAQ mar& are also in red and "loc& capital letters# ?n the other hand, defendantsO P1@i%A 0@a&AQ script print is in oran%e !ith only the letter P1Q and P0Q "ein% capitali3ed and the pac&a%in% material is plastic !rapper# FFFF Further* plaintiffsO lo%o and mascot are the um"rella P0Q and PRonald 0cDonaldOsQ* respective 3* compared to the mascot of defendant Corporation !hich is a chu""y "oy called P0ac&yQ displayed or printed "et!een the !ords P1i%Q and P0a&#Q@B(A =/mphasis supplied> Respondents point to these dissimilarities as proof that they did not %ive their ham"ur%ers the %eneral appearance of petitionersO P1i% 0acQ ham"ur%ers# The dissimilarities in the pac&a%in% are minor compared to the ,(%r5 ,3m36%r3(3e, 3& ()e ;or', that %ive respondentsO P1i% 0a&Q ham"ur%ers the %eneral appearance of petitionersO P1i% 0acQ ham"ur%ers# Section E+=a> eFpressly provides that

the similarity in the %eneral appearance of the %oods may "e in the Pdevices or ;or',Q used on the !rappin%s# Respondents have applied on their plastic !rappers and "a%s almost the ,%me ;or', that petitioners use on their styrofoam "oF# Chat attracts the attention of the "uyin% pu"lic are the !ords P1i% 0a&Q !hich are almost the same* aurally and visually* as the !ords P1i% 0ac#Q The dissimilarities in the material and other devices are insi%nificant compared to the %larin% similarity in the !ords used in the !rappin%s# Section E+=a> also provides that the defendant %ives Phis %oods the %eneral appearance of %oods of another manufacturer#Q RespondentsO %oods are ham"ur%ers !hich are also the %oods of petitioners# If respondents sold e%% sand!iches only instead o# ham"ur%er sand!iches* their use of the P1i% 0a&Q mar& !ould not %ive their %oods the %eneral appearance of petitionersO P1i% 0acQ ham"ur%ers# In such case* there is only trademar& infrin%ement "ut no unfair competition# >o!ever* since respondents chose to apply the P1i% 0a&Q mar& on ham"ur%ers* :ust li&e petitionerOs use of the P1i% 0acQ mar& on ham"ur%ers* respondents have obvious 3 clothed their %oods !ith the %eneral appearance of petitionersO %oods# 0oreover* there is no notice to the pu"lic that the P1i% 0a&Q ham"ur%ers are products of P.#C# 1i% 0a& 1ur%er* Inc#Q Respondents introduced durin% the trial plastic !rappers and "a%s !ith the !ords P.#C# 1i% 0a& 1ur%er* Inc#Q to inform the pu"lic of the name of the seller of the

ham"ur%ers# >o!ever* petitioners introduced durin% the in:unctive hearin%s plastic !rappers and "a%s !ith the P1i% 0a&Q mar& ;3()o2( the name P.#C# 1i% 0a& 1ur%er* Inc#Q RespondentsO "elated presentation of plastic !rappers and "a%s "earin% the name of P.#C# 1i% 0a& 1ur%er* Inc#Q as the seller of the ham"ur%ers is an after thou%ht desi%ned to eFculpate them from their unfair "usiness conduct# $s earlier stated* !e cannot consider respondentsO evidence since petitionersO complaint !as "ased on facts eFistin% "efore and durin% the in:unctive hearin%s# ;hus* there is actua 3 no notice to the pu"lic that the P1i% 0a&Q ham"ur%ers are products of P.#C# 1i% 0a& 1ur%er* Inc#Q and not those of petitioners !ho have the eFclusive ri%ht to the P1i% 0acQ mar&# This clearly sho!s respondentsO intent to deceive the pu"lic# Dad respondentsO placed a notice on their plastic !rappers and "a%s that the ham"ur%ers are sold "y P.#C# 1i% 0a& 1ur%er* Inc#Q* then they could validly claim that they did not intend to deceive the pu"lic# In such case* there is only trademar& infrin%ement "ut no unfair competition#@BEA Respondents* ho!ever* did not %ive such notice# Ce hold that as found "y the RTC* respondent corporation is lia"le for unfair competition#

&he Re'edies Avai ab e to Petitioners 7nder Section E5@B5A =PSection E5Q> in relation to Section E+ of R$ (??* a plaintiff !ho successfully maintains trademar& infrin%ement and unfair competition claims is entitled to in:unctive and monetary reliefs# Dere* the RTC did not err in issuin% the in:unctive !rit of (? $u%ust (++- =made permanent in its Decision of ) Septem"er (++<> and in orderin% the payment of P<--*--- actua dama%es in favor of petitioners# The in:unctive !rit is indispensa"le to prevent further acts of infrin%ement "y respondent corporation#$lso, the amount of actual dama%es is a reasona"le percenta%e =((#+T> of respondent corporationOs %ross sales for three =(+BB (+B+ and (++(> of the siF years =(+B< (++-> respondents have used the P1i% 0a&Q mar&#@B<A The RTC also did not err in a!ardin% eFemplary dama%es "y !ay of correction for the pu"lic %ood@B)A in vie! o# the findin% of unfair competition !here intent to deceive the pu"lic is essential# The a!ard of attorneyOs fees and eFpenses of liti%ation is also in order#@B?A ?H#R#" R#* !e GRAN! the instant petition# Ce S#! ASID# the Decision dated E? Novem"er (+++ of the Court of

$ppeals and its Resolution dated (( 'uly E--and R#INS!A!# the Decision dated ) Septem"er (++< of the Re%ional Trial Court of 0a&ati* 1ranch (5,* findin% respondent .#C# 1i% 0a& 1ur%er* Inc# lia"le for trademar& infrin%ement and unfair competition# S RD#R#D# Republic of the Philippines SUPREME COURT Manila T,%R* *%7%$%'N G.R. No. 101394. March 5, 1993. ;3CE#M 'J T,E P,%;%PP%NE$, %NC., petitioner, vs. C'#RT 'J APPEA;$, ;3CE#M 'J APARR%, ;3CE#M 'J CABA:AN, ;3CE#M 'J CAMA;AN%#:AN, %NC., ;3CE#M 'J ;A;;', %NC., ;3CE#M 'J T#A', %NC., B#,% ;3CE#M, CENTRA; ;3CE#M 'J CATAN*#ANE$, ;3CE#M 'J $'#T,ERN P,%;%PP%NE$, ;3CE#M 'J EA$TERN M%N*ANA', %NC. and 2E$TERN PAN:A$%NAN ;3CE#M, %NC., respondents. Tuisu!bin&, Torres S Evan&elista ;a+ 'ffices and A!brosio Padilla for petitioner. Antonio M. Nu les and Purun&an, Chato, Chato, Tarriela S Tan ;a+ 'ffices for respondents.

Jroilan $iobal for 2estern Pan&asinan ; ceu!. $3;;AB#$ /. C'RP'RAT%'N ;A2D C'RP'RATE NAME$D RE:%$TRAT%'N 'J PR'P'$E* NAME 2,%C, %$ %*ENT%CA; 'R C'NJ#$%N:;3 $%M%;AR T' T,AT 'J AN3 EO%$T%N: C'RP'RAT%'N, PR',%B%TE*D C'NJ#$%'N AN* *ECEPT%'N EJJECT%7E;3 PREC;#*E* B3 T,E APPEN*%N: 'J :E':RAP,%C NAME$ T' T,E 2'R* 4;3CE#M4. ) The Articles of %ncorporation of a corporation !ust, a!on& other thin&s, set out the na!e of the corporation. $ection /? of the Corporation Code establishes a restrictive rule insofar as corporate na!es are concerned: 4$ection /?. Corporate na!e. ) No corporate na!e !a be allo+ed b the $ecurities an E5chan&e Co!!ission if the proposed na!e is identical or deceptivel or confusin&l si!ilar to that of an e5istin& corporation or to an other na!e alread protected b la+ or is patentl deceptive, confusin& or contrar to e5istin& la+s. 2hen a chan&e in the corporate na!e is approved, the Co!!ission shall issue an a!ended certificate of incorporation under the a!ended na!e.4 The polic underl in& the prohibition in $ection /? a&ainst the re&istration of a corporate na!e +hich is 4identical or deceptivel or confusin&l si!ilar4 to that of an e5istin& corporation or +hich is 4patentl deceptive4 or 4patentl confusin&4 or 4contrar to e5istin& la+s,4 is the avoidance of fraud upon the public +hich +ould have occasion to deal +ith the entit concerned,

the evasion of le&al obli&ations and duties, and the reduction of difficulties of ad!inistration and supervision over corporations. 2e do not consider that the corporate na!es of private respondent institutions are 4identical +ith, or deceptivel or confusin&l si!ilar4 to that of the petitioner institution. True enou&h, the corporate na!es of private respondent entities all carr the +ord 4; ceu!4 but confusion and deception are effectivel precluded b the appendin& of &eo&raphic na!es to the +ord 4; ceu!.4 Thus, +e do not believe that the 4; ceu! of Aparri4 can be !ista"en b the &eneral public for the ; ceu! of the Philippines, or that the 4; ceu! of Ca!alaniu&an4 +ould be confused +ith the ; ceu! of the Philippines. -. %*.D %*.D *'CTR%NE 'J $EC'N*AR3 MEAN%N:D #$E 'J 2'R* 4;3CE#M,4 N'T ATTEN*E* 2%T, EOC;#$%7%T3. ) %t is clai!ed, ho+ever, b petitioner that the +ord 4; ceu!4 has acquired a secondar !eanin& in relation to petitioner +ith the result that +ord, althou&h ori&inall a &eneric, has beco!e appropriable b petitioner to the e5clusion of other institutions li"e private respondents herein. The doctrine of secondar !eanin& ori&inated in the field of trade!ar" la+. %ts application has, ho+ever, been e5tended to corporate na!es sine the ri&ht to use a corporate na!e to the e5clusion of others is based upon the sa!e principle +hich underlies the ri&ht to use a particular trade!ar" or tradena!e. %n Philippine Nut %ndustr , %nc. v. $tandard

Brands, %nc., the doctrine of secondar !eanin& +as elaborated in the follo+in& ter!s: 4 . . . a +ord or phrase ori&inall incapable of e5clusive appropriation +ith reference to an article on the !ar"et, because &eo&raphicall or other+ise descriptive, !i&ht nevertheless have been used so lon& and so e5clusivel b one producer +ith reference to his article that, in that trade and to that branch of the purchasin& public, the +ord or phrase has co!e to !ean that the article +as his product.4 The question +hich arises, therefore, is +hether or not the use b petitioner of 4; ceu!4 in its corporate na!e has been for such len&th of ti!e and +ith such e5clusivit as to have beco!e associated or identified +ith the petitioner institution in the !ind of the &eneral public 6or at least that portion of the &eneral public +hich has to do +ith schools8. The Court of Appeals reco&niIed this issue and ans+ered it in the ne&ative: 4#nder the doctrine of secondar !eanin&, a +ord or phrase ori&inall incapable of e5clusive appropriation +ith reference to an article in the !ar"et, because &eo&raphical or other+ise descriptive !i&ht nevertheless have been used so lon& and so e5clusivel b one producer +ith reference to this article that, in that trade and to that &roup of the purchasin& public, the +ord or phrase has co!e to !ean that the article +as his produce 6Ana An& vs. Toribio Teodoro, @C Phil. 1=8. This circu!stance has been referred to as the distinctiveness into +hich the na!e or phrase has evolved throu&h the substantial and e5clusive use of the

sa!e for a considerable period of ti!e. . . . No evidence +as ever presented in the hearin& before the Co!!ission +hich sufficientl proved that the +ord A; ceu!A has indeed acquired secondar !eanin& in favor of the appellant. %f there +as an of this "ind, the sa!e tend to prove onl that the appellant had been usin& the disputed +ord for a lon& period of ti!e. . . . %n other +ords, +hile the appellant !a have proved that it had been usin& the +ord A; ceu!A for a lon& period of ti!e, this fact alone did not a!ount to !ean that the said +ord had acquired secondar !eanin& in its favor because the appellant failed to prove that it had been usin& the sa!e +ord all b itself to the e5clusion of others. More so, there +as no evidence presented to prove that confusion +ill surel arise if the sa!e +ord +ere to be used b other educational institutions. Consequentl , the alle&ations of the appellant in its first t+o assi&ned errors !ust necessaril fail.4 2e a&ree +ith the Court of Appeals. The nu!ber alone of the private respondents in the case at bar su&&ests stron&l that petitionerAs use of the +ord 4; ceu!4 has not been attended +ith the e5clusivit essential for applicabilit of the doctrine of secondar !eanin&. PetitionerAs use of the +ord 4; ceu!4 +as not e5clusive but +as in truth shared +ith the 2estern Pan&asinan ; ceu! and a little later +ith other private respondent institutions +hich re&istered +ith the $EC usin& 4; ceu!4 as part of their corporation na!es. There !a +ell be other schools usin& ; ceu! or ;iceo in their na!es, but not re&istered

+ith the $EC because the have not adopted the corporate for! of or&aniIation. .. %*.D %*.D M#$T BE E7A;#ATE* %N T,E%R ENT%RET3 T' *ETERM%NE 2,ET,ER T,E3 ARE C'NJ#$%N:;3 'R *ECEPT%7E;3 $%M%;AR T' AN'T,ER C'RP'RATE ENT%T3A$ NAME. ) petitioner institution is not entitled to a le&all enforceable e5clusive ri&ht to use the +ord 4; ceu!4 in its corporate na!e and that other institutions !a use 4; ceu!4 as part of their corporate na!es. To deter!ine +hether a &iven corporate na!e is 4identical4 or 4confusin&l or deceptivel si!ilar4 +ith another entit As corporate na!e, it is not enou&h to ascertain the presence of 4; ceu!4 or 4;iceo4 in both na!es. 'ne !ust evaluate corporate na!es in their entiret and +hen the na!e of petitioner is <u5taposed +ith the na!es of private respondents, the are not reasonabl re&arded as 4identical4 or 4confusin&l or deceptivel si!ilar4 +ith each other. *EC%$%'N JE;%C%AN', 9 p: Petitioner is an educational institution dul re&istered +ith the $ecurities and E5chan&e Co!!ission 64$EC48. 2hen it first re&istered +ith the $EC on -/ $epte!ber /01>, it used the corporate na!e ; ceu! of the Philippines, %nc. and has used that na!e ever since. 'n -C Jebruar /0?C, petitioner instituted proceedin&s before the $EC to co!pel the private respondents,

+hich are also educational institutions, to delete the +ord 4; ceu!4 fro! their corporate na!es and per!anentl to en<oin the! fro! usin& 4; ceu!4 as part of their respective na!es. $o!e of the private respondents activel participated in the proceedin&s before the $EC. These are the follo+in&, the dates of their ori&inal $EC re&istration bein& set out belo+ opposite their respective na!es: 2estern Pan&asinan ; ceu! ) -@ 'ctober /01> ; ceu! of Caba&an ) ./ 'ctober /0=; ceu! of ;allo, %nc. ) -= March /0@; ceu! of Aparri ) -? March /0@; ceu! of Tuao, %nc. ) -? March /0@; ceu! of Ca!alaniu&an ) -? March /0@The follo+in& private respondents +ere declared in default for failure to file an ans+er despite service of su!!ons: Buhi ; ceu!D Central ; ceu! of CatanduanesD ; ceu! of Eastern Mindanao, %nc.D and ; ceu! of $outhern Philippines PetitionerAs ori&inal co!plaint before the $EC had included three 6.8 other entities: /. The ; ceu! of Malacana D -. The ; ceu! of MarbelD and

.. The ; ceu! of Araullo The co!plaint +as later +ithdra+n insofar as concerned the ; ceu! of Malacana and the ; ceu! of Marbel, for failure to serve su!!ons upon these t+o 6-8 entities. The case a&ainst the ;iceu! of Araullo +as dis!issed +hen that school !otu proprio chan&e its corporate na!e to 4Pa!antasan n& Araullo.4 The bac"&round of the case at bar needs so!e recountin&. Petitioner had so!eti!e before co!!enced in the $EC a proceedin& 6$ECBCase No. /-C/8 a&ainst the ; ceu! of Ba&uio, %nc. to require it to chan&e its corporate na!e and to adopt another na!e not 4si!ilar KtoL or identical4 +ith that of petitioner. %n an 'rder dated -> April /0@@, Associate Co!!issioner 9ulio $ulit held that the corporate na!e of petitioner and that of the ; ceu! of Ba&uio, %nc. +ere substantiall identical because of the presence of a 4do!inant4 +ord, i.e., 4; ceu!,4 the na!e of the &eo&raphical location of the ca!pus bein& the onl +ord +hich distin&uished one fro! the other corporate na!e. The $EC also noted that petitioner had re&istered as a corporation ahead of the ; ceu! of Ba&uio, %nc. in point of ti!e, / and ordered the latter to chan&e its na!e to another na!e 4not si!ilar or identical K+ithL4 the na!es of previousl re&istered entities. The ; ceu! of Ba&uio, %nc. assailed the 'rder of the $EC before the $upre!e Court in a case doc"eted as :.R. No. ;BC=101. %n a Minute Resolution dated /C

$epte!ber /0@@, the Court denied the Petition for Revie+ for lac" of !erit. Entr of <ud&!ent in that case +as !ade on -/ 'ctober /0@@. Ar!ed +ith the Resolution of this Court in :.R. No. ;B C=101, petitioner then +rote all the educational institutions it could find usin& the +ord 4; ceu!4 as part of their corporate na!e, and advised the! to discontinue such use of 4; ceu!.4 2hen, +ith the passa&e of ti!e, it beca!e clear that this recourse had failed, petitioner instituted before the $EC $ECBCase No. -1@0 to enforce +hat petitioner clai!s as its proprietar ri&ht to the +ord 4; ceu!.4 The $EC hearin& officer rendered a decision sustainin& petitionerAs clai! to an e5clusive ri&ht to use the +ord 4; ceu!.4 The hearin& officer relied upon the $EC rulin& in the ; ceu! of Ba&uio, %nc. case 6$ECB Case No. /-C/8 and held that the +ord 4; ceu!4 +as capable of appropriation and that petitioner had acquired an enforceable e5clusive ri&ht to the use of that +ord. 'n appeal, ho+ever, b private respondents to the $EC En Banc, the decision of the hearin& officer +as reversed and set aside. The $EC En Banc did not consider the +ord 4; ceu!4 to have beco!e so identified +ith petitioner as to render use thereof b other institutions as productive of confusion about the identit of the schools concerned in the !ind of the &eneral public. #nli"e its hearin& officer, the $EC En Banc held that the attachin& of &eo&raphical na!es to the +ord 4; ceu!4 served sufficientl to distin&uish the schools

fro! one another, especiall in vie+ of the fact that the ca!puses of petitioner and those of the private respondents +ere ph sicall quite re!ote fro! each other. . Petitioner then +ent on appeal to the Court of Appeals. %n its *ecision dated -? 9une /00/, ho+ever, the Court of Appeals affir!ed the questioned 'rders of the $EC En Banc. C Petitioner filed a !otion for reconsideration, +ithout success. Before this Court, petitioner asserts that the Court of Appeals co!!itted the follo+in& errors: /. The Court of Appeals erred in holdin& that the Resolution of the $upre!e Court in :.R. No. ;BC=101 did not constitute stare decisis as to appl to this case and in not holdin& that said Resolution bound subsequent deter!inations on the ri&ht to e5clusive use of the +ord ; ceu!. -. The Court of Appeals erred in holdin& that respondent 2estern Pan&asinan ; ceu!, %nc. +as incorporated earlier than petitioner. .. The Court of Appeals erred in holdin& that the +ord ; ceu! has not acquired a secondar !eanin& in favor of petitioner. C. The Court of Appeals erred in holdin& that ; ceu! as a &eneric +ord cannot be appropriated b the petitioner to the e5clusion of others. 1 2e +ill consider all the fore&oin& ascribed errors, thou&h

not necessaril seriati!. 2e be&in b notin& that the Resolution of the Court in :.R. No. ;BC=101 does not, of course, constitute res ad<udicata in respect of the case at bar, since there is no identit of parties. Neither is stare decisis pertinent, if onl because the $EC En Banc itself has reBe5a!ined Associate Co!!issioner $ulitAs rulin& in the ; ceu! of Ba&uio case. The Minute Resolution of the Court in :.R. No. ;BC=101 +as not a reasoned adoption of the $ulit rulin&. The Articles of %ncorporation of a corporation !ust, a!on& other thin&s, set out the na!e of the corporation. = $ection /? of the Corporation Code establishes a restrictive rule insofar as corporate na!es are concerned: 4$ECT%'N /?. Corporate na!e. ) No corporate na!e !a be allo+ed b the $ecurities an E5chan&e Co!!ission if the proposed na!e is identical or deceptivel or confusin&l si!ilar to that of an e5istin& corporation or to an other na!e alread protected b la+ or is patentl deceptive, confusin& or contrar to e5istin& la+s. 2hen a chan&e in the corporate na!e is approved, the Co!!ission shall issue an a!ended certificate of incorporation under the a!ended na!e.4 6E!phasis supplied8 The polic underl in& the prohibition in $ection /? a&ainst the re&istration of a corporate na!e +hich is 4identical or deceptivel or confusin&l si!ilar4 to that of an e5istin& corporation or +hich is 4patentl deceptive4

or 4patentl confusin&4 or 4contrar to e5istin& la+s,4 is the avoidance of fraud upon the public +hich +ould have occasion to deal +ith the entit concerned, the evasion of le&al obli&ations and duties, and the reduction of difficulties of ad!inistration and supervision over corporations. @ 2e do not consider that the corporate na!es of private respondent institutions are 4identical +ith, or deceptivel or confusin&l si!ilar4 to that of the petitioner institution. True enou&h, the corporate na!es of private respondent entities all carr the +ord 4; ceu!4 but confusion and deception are effectivel precluded b the appendin& of &eo&raphic na!es to the +ord 4; ceu!.4 Thus, +e do not believe that the 4; ceu! of Aparri4 can be !ista"en b the &eneral public for the ; ceu! of the Philippines, or that the 4; ceu! of Ca!alaniu&an4 +ould be confused +ith the ; ceu! of the Philippines. Et !olo&icall , the +ord 4; ceu!4 is the ;atin +ord for the :ree" l "eion +hich in turn referred to a localit on the river %lissius in ancient Athens 4co!prisin& an enclosure dedicated to Apollo and adorned +ith fountains and buildin&s erected b Pisistratus, Pericles and ; cur&us frequented b the outh for e5ercise and b the philosopher Aristotle and his follo+ers for teachin&.4 ? %n ti!e, the +ord 4; ceu!4 beca!e associated +ith schools and other institutions providin& public lectures and concerts and public discussions. Thus toda , the +ord 4; ceu!4 &enerall refers to a

school or an institution of learnin&. 2hile the ;atin +ord 4l ceu!4 has been incorporated into the En&lish lan&ua&e, the +ord is also found in $panish 6liceo8 and in Jrench 6l cee8. As the Court of Appeals noted in its *ecision, Ro!an Catholic schools frequentl use the ter!D e.&., 4;iceo de Manila,4 4;iceo de Baleno4 6in Baleno, Masbate8, 4;iceo de Masbate,4 4;iceo de Alba .4 0 4; ceu!4 is in fact as &eneric in character as the +ord 4universit .4 %n the na!e of the petitioner, 4; ceu!4 appears to be a substitute for 4universit D4 in other places, ho+ever, 4; ceu!,4 or 4;iceo4 or 4; cee4 frequentl denotes a secondar school or a colle&e. %t !a be 6thou&h this is a question of fact +hich +e need not resolve8 that the use of the +ord 4; ceu!4 !a not et be as +idespread as the use of 4universit ,4 but it is clear that a not inconsiderable nu!ber of educational institutions have adopted 4; ceu!4 or 4;iceo4 as part of their corporate na!es. $ince 4; ceu!4 or 4;iceo4 denotes a school or institution of learnin&, it is not unnatural to use this +ord to desi&nate an entit +hich is or&aniIed and operatin& as an educational institution. %t is clai!ed, ho+ever, b petitioner that the +ord 4; ceu!4 has acquired a secondar !eanin& in relation to petitioner +ith the result that that +ord, althou&h ori&inall a &eneric, has beco!e appropriable b petitioner to the e5clusion of other institutions li"e private respondents herein. The doctrine of secondar !eanin& ori&inated in the field

of trade!ar" la+. %ts application has, ho+ever, been e5tended to corporate na!es sine the ri&ht to use a corporate na!e to the e5clusion of others is based upon the sa!e principle +hich underlies the ri&ht to use a particular trade!ar" or tradena!e. /> %n Philippine Nut %ndustr , %nc. v. $tandard Brands, %nc., // the doctrine of secondar !eanin& +as elaborated in the follo+in& ter!s: 4 . . . a +ord or phrase ori&inall incapable of e5clusive appropriation +ith reference to an article on the !ar"et, because &eo&raphicall or other+ise descriptive, !i&ht nevertheless have been used so lon& and so e5clusivel b one producer +ith reference to his article that, in that trade and to that branch of the purchasin& public, the +ord or phrase has co!e to !ean that the article +as his product.4 /The question +hich arises, therefore, is +hether or not the use b petitioner of 4; ceu!4 in its corporate na!e has been for such len&th of ti!e and +ith such e5clusivit as to have beco!e associated or identified +ith the petitioner institution in the !ind of the &eneral public 6or at least that portion of the &eneral public +hich has to do +ith schools8. The Court of Appeals reco&niIed this issue and ans+ered it in the ne&ative: 4#nder the doctrine of secondar !eanin&, a +ord or phrase ori&inall incapable of e5clusive appropriation +ith reference to an article in the !ar"et, because &eo&raphical or other+ise descriptive !i&ht nevertheless

have been used so lon& and so e5clusivel b one producer +ith reference to this article that, in that trade and to that &roup of the purchasin& public, the +ord or phrase has co!e to !ean that the article +as his produce 6Ana An& vs. Toribio Teodoro, @C Phil. 1=8. This circu!stance has been referred to as the distinctiveness into +hich the na!e or phrase has evolved throu&h the substantial and e5clusive use of the sa!e for a considerable period of ti!e. Consequentl , the sa!e doctrine or principle cannot be !ade to appl +here the evidence did not prove that the business 6of the plaintiff8 has continued for so lon& a ti!e that it has beco!e of consequence and acquired a &ood +ill of considerable value such that its articles and produce have acquired a +ellB"no+n reputation, and confusion +ill result b the use of the disputed na!e 6b the defendant8 6An& $i ,en& vs. 2ellin&ton *epart!ent $tore, %nc., 0- Phil. CC?8. 2ith the fore&oin& as a ardstic", K+eL believe the appellant failed to satisf the afore!entioned requisites. No evidence +as ever presented in the hearin& before the Co!!ission +hich sufficientl proved that the +ord A; ceu!A has indeed acquired secondar !eanin& in favor of the appellant. %f there +as an of this "ind, the sa!e tend to prove onl that the appellant had been usin& the disputed +ord for a lon& period of ti!e. Nevertheless, its 6appellant8 e5clusive use of the +ord 6; ceu!8 +as never established or proven as in fact the

evidence tend to conve that the crossBclai!ant +as alread usin& the +ord A; ceu!A seventeen 6/@8 ears prior to the date the appellant started usin& the sa!e +ord in its corporate na!e. Jurther!ore, educational institutions of the Ro!an Catholic Church had been usin& the sa!e or si!ilar +ord li"e A;iceo de Manila,A A;iceo de BalenoA 6in Baleno, Masbate8, A;iceo de Masbate,A A;iceo de Alba A lon& before appellant started usin& the +ord A; ceu!A. The appellant also failed to prove that the +ord A; ceu!A has beco!e so identified +ith its educational institution that confusion +ill surel arise in the !inds of the public if the sa!e +ord +ere to be used b other educational institutions. %n other +ords, +hile the appellant !a have proved that it had been usin& the +ord A; ceu!A for a lon& period of ti!e, this fact alone did not a!ount to !ean that the said +ord had acquired secondar !eanin& in its favor because the appellant failed to prove that it had been usin& the sa!e +ord all b itself to the e5clusion of others. More so, there +as no evidence presented to prove that confusion +ill surel arise if the sa!e +ord +ere to be used b other educational institutions. Consequentl , the alle&ations of the appellant in its first t+o assi&ned errors !ust necessaril fail.4 /. 6#nderscorin& partl in the ori&inal and partl supplied8 2e a&ree +ith the Court of Appeals. The nu!ber alone of the private respondents in the case at bar su&&ests stron&l that petitionerAs use of the +ord 4; ceu!4 has

not been attended +ith the e5clusivit essential for applicabilit of the doctrine of secondar !eanin&. %t !a be noted also that at least one of the private respondents, i.e., the 2estern Pan&asinan ; ceu!, %nc., used the ter! 4; ceu!4 seventeen 6/@8 ears before the petitioner re&istered its o+n corporate na!e +ith the $EC and be&an usin& the +ord 4; ceu!.4 %t follo+s that if an institution had acquired an e5clusive ri&ht to the +ord 4; ceu!,4 that institution +ould have been the 2estern Pan&asinan ; ceu!, %nc. rather than the petitioner institution. %n this connection, petitioner ar&ues that because the 2estern Pan&asinan ; ceu!, %nc. failed to reconstruct its records before the $EC in accordance +ith the provisions of R.A. No. =-, +hich records had been destro ed durin& 2orld 2ar %%, 2estern Pan&asinan ; ceu! should be dee!ed to have lost all ri&hts it !a have acquired b virtue of its past re&istration. %t !i&ht be noted that the 2estern Pan&asinan ; ceu!, %nc. re&istered +ith the $EC soon after petitioner had filed its o+n re&istration on -/ $epte!ber /01>. 2hether or not 2estern Pan&asinan ; ceu!, %nc. !ust be dee!ed to have lost its ri&hts under its ori&inal /0.. re&istration, appears to us to be quite secondar in i!portanceD +e refer to this earlier re&istration si!pl to underscore the fact that petitionerAs use of the +ord 4; ceu!4 +as neither the first use of that ter! in the Philippines nor an e5clusive use thereof. PetitionerAs use of the +ord

4; ceu!4 +as not e5clusive but +as in truth shared +ith the 2estern Pan&asinan ; ceu! and a little later +ith other private respondent institutions +hich re&istered +ith the $EC usin& 4; ceu!4 as part of their corporation na!es. There !a +ell be other schools usin& ; ceu! or ;iceo in their na!es, but not re&istered +ith the $EC because the have not adopted the corporate for! of or&aniIation. 2e conclude and so hold that petitioner institution is not entitled to a le&all enforceable e5clusive ri&ht to use the +ord 4; ceu!4 in its corporate na!e and that other institutions !a use 4; ceu!4 as part of their corporate na!es. To deter!ine +hether a &iven corporate na!e is 4identical4 or 4confusin&l or deceptivel si!ilar4 +ith another entit As corporate na!e, it is not enou&h to ascertain the presence of 4; ceu!4 or 4;iceo4 in both na!es. 'ne !ust evaluate corporate na!es in their entiret and +hen the na!e of petitioner is <u5taposed +ith the na!es of private respondents, the are not reasonabl re&arded as 4identical4 or 4confusin&l or deceptivel si!ilar4 +ith each other. 2,EREJ'RE, the petitioner havin& failed to sho+ an reversible error on the part of the public respondent Court of Appeals, the Petition for Revie+ is *EN%E* for lac" of !erit, and the *ecision of the Court of Appeals dated -? 9une /00/ is hereb AJJ%RME*. No pronounce!ent as to costs. $' 'R*ERE*.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-03226 D5c5675r 10, 1902 ANA L. ANG, petitioner, vs. TOR - O TEODORO, respondent. Cirilo Lim for petitioner. Marcial P. Lichauco and Manuel M. Me9ia for respondent. O%AETA, J.: Petitioner has appealed to this Court b certiorari to reverse the <ud&!ent of the Court of Appeals reversin& that of the Court of Jirst %nstance of Manila and directin& the *irector of Co!!erce to cancel the re&istration of the tradeB!ar" 4An& Tiba 4 in favor of said petitioner, and perpetuall en<oinin& the latter fro! usin& said tradeB !ar" on &oods !anufactured and sold b her. Respondent Toribio Teodoro, at first in partnership +ith 9uan Matindi& and later as sole proprietor, has continuousl used 4An& Tiba ,4 both as a tradeB!ar" and as a tradeBna!e, in the !anufacture and sale of slippers, shoes, and indoor baseballs since /0/>. ,e for!all re&istered it as tradeB!ar" on $epte!ber -0, /0/1, and as tradeBna!e on 9anuar ., /0... The &ro+th of his business is a thrillin& epic of Jilipino

industr and business capacit . $tartin& in an obscure shop in /0/> +ith a !odest capital of P-/> but +ith tireless industr and unli!ited perseverance, Toribio Teodoro, then an un"no+n oun& !an !a"in& slippers +ith his o+n hands but no+ a pro!inent business !a&nate and !anufacturer +ith a lar&e factor operated +ith !odern !achiner b a &reat nu!ber of e!plo ees, has steadil &ro+n +ith his business to +hich he has dedicated the best ears of his life and +hich he has e5panded to such proportions that his &ross sales fro! /0/? to /0.? a&&re&ated P?,@?@,>-1.=1. ,is sales in /0.@ a!ounted to P/,-00,.C../> and in /0.?, P/,/..,/=1.@@. ,is e5penses for advertise!ent fro! /0/0 to /0.? a&&re&ated P-/>,=C/.1=. Petitioner 6defendant belo+8 re&istered the sa!e tradeB !ar" 4An& Tiba 4 for pants and shirts on April //, /0.-, and established a factor for the !anufacture of said articles in the ear /0.@. %n the follo+in& ear 6/0.?8 her &ross sales a!ounted to PC--,=?-.>0. Neither the decision of the trial court nor that of the Court of Appeals sho+s ho+ !uch petitioner has spent or advertise!ent. But respondent in his brief sa s that petitioner 4+as unable to prove that she had spent a sin&le centavo advertisin& 4An& Tiba 4 shirts and pants prior to /0.?. %n that ear she advertised the factor +hich she had <ust built and it +as +hen this +as brou&ht to the attention of the appellee that he consulted his attorne s and eventuall brou&ht the present suit.4

The trial court 69ud&e Tuirico Abeto8 presidin& absolved the defendant fro! the co!plaint, +ith costs a&ainst the plaintiff, on the &rounds that the t+o trade!ar"s are dissi!ilar and are used on different and nonBco!petin& &oodsD that there had been no e5clusive use of the tradeB!ar" b the plaintiffD and that there had been no fraud in the use of the said tradeB!ar" b the defendant because the &oods on +hich it is used are essentiall different fro! those of the plaintiff. The second division of the Court of Appeals, co!posed of 9ustices Ben&son, Padilla, ;opeI 7ito, Tuason, and Ale5 Re es, +ith 9ustice Padilla as ponente, reversed that <ud&!ent, holdin& that b uninterrupted an e5clusive use since /0/ in the !anufacture of slippers and shoes, respondentAs tradeB!ar" has acquired a secondar !eanin&D that the &oods or articles on +hich the t+o tradeB!ar"s are used are si!ilar or belon& to the sa!e classD and that the use b petitioner of said tradeB!ar" constitutes a violation of sections . and @ of Act No. ===. The defendant *irector of Co!!erce did not appeal fro! the decision of the Court of Appeals. (irst. Counsel for the petitioner, in a +ellB+ritten brief, !a"es a frontal sled&eBha!!er attac" on the validit of respondentAs tradeB!ar" 4An& Tiba .4 ,e contends that the phrase 4An& Tiba 4 as e!plo ed b the respondent on the articles !anufactured b hi! is a descriptive ter! because, 4freel translate in En&lish,4 it !eans 4stron&, durable, lastin&.4 ,e invo"es section - of Act No. ===,

+hich provides that +ords or devices +hich related onl to the na!e, qualit , or description of the !erchandise cannot be the sub<ect of a tradeB!ar". ,e cites a!on& others the case of a'ter vs. %uazua 61 Phil., /=8, +hich involved the tradeB!ar" 4A&ua de Manan&a4 used on toilet +ater, and in +hich this Court held that the +ord 4Manan&a,4 +hich is the na!e of a +ellB"no+n Philippine tree or its flo+er, could not be appropriated as a tradeB !ar" an !ore than could the +ords 4su&ar,4 4tobacco,4 or 4coffee.4 'n the other hand, counsel for the respondent, in an equall +ellBprepared and e5haustive brief, contend that the +ords 4An& Tiba 4 are not descriptive but !erel su&&estive and !a properl be re&arded as fanciful or arbitrar in the le&al sense. The cite several cases in +hich si!ilar +ords have been sustained as valid tradeB!ar"s, such as 4,oleproof4 for hosier , / 4ideal for tooth brushes, - and 4Jashion"nit4 for nec"ties and s+eaters. . 2e find it necessar to &o into the et !olo& and !eanin& of the Ta&alo& +ords 4An& Tiba 4 to deter!ine +hether the are a descriptive ter!, i.e., +hether the relate to the qualit or description of the !erchandise to +hich respondent has applied the! as a tradeB!ar". The +ord 4an&4 is a definite article !eanin& 4the4 in En&lish. %t is also used as an adverb, a contraction of the +ord 4anon&4 6+hat or ho+8. Jor instance, instead of sa in&, 4Anon& &andaR4 64,o+ beautifulR48, +e ordinaril sa , 4An& &andaR4 +i)ay is a root +ord fro! +hich are

derived the verb ma!pati)ay 6to stren&htenD the nouns pa!$amati)ay 6stren&th, durabilit 8, $ati)ayan 6proof, support, stren&th8, $ati)ayti)ayan 6superior stren&th8D and the ad<ectives !atiba 6stron&, durable, lastin&8, napa$ati)ay6ver stron&8, $asinti)ay or ma!$asinti)ay 6as stron& as, or of equal stren&th8. The phrase 4An& Tiba 4 is an e5cla!ation denotin& ad!inistration of stren&th or durabilit . Jor instance, one +ho tries hard but fails to brea" an ob<ect e5clai!s, 4An& tiba R4 6,o+ stron&R48 %t !a also be used in a sentence thus, 4An! ti)ay n! sapatos moR4 6,o+ durable our shoes areR48 The phrase 4an! ti)ay4 is never used ad<ectivel to define or describe an ob<ect. 'ne does not sa , 4an! ti)ay sapatos4 or 4sapatos an! ti)ay4 is never used ad<ectivel to define or describe an ob<ect. 'ne does not sa , 4 an! ti)ay sapatos4 or 4sapatos an! ti)ay4 to !ean 4durable shoes,4 but 4mati)ay na sapatos4 or 4sapatos na mati)ay.4 Jro! all of this +e deduce that 4An& Tiba 4 is not a descriptive ter! +ithin the !eanin& of the TradeBMar" ;a+ but rather a fanciful or coined phrase +hich !a properl and le&all be appropriated as a tradeB!ar" or tradeBna!e. %n this connection +e do not fail to note that +hen the petitioner herself too" the trouble and e5pense of securin& the re&istration of these sa!e +ords as a trade!ar" of her products she or her attorne as +ell as the *irector of Co!!erce +as undoubtedl convinced

that said +ords 6An& Tiba 8 +ere not a descriptive ter! and hence could be le&all used and validl re&istered as a tradeB!ar". %t see!s stultif in& and puerile for her no+ to contend other+ise, su&&estive of the stor of sour &rapes. Counsel for the petitioner sa s that the function of a tradeB!ar" is to point distinctivel , either b its o+n !eanin& or b association, to the ori&in or o+nership of the +ares to +hich it is applied. That is correct, and +e find that 4An& Tiba ,4 as used b the respondent to desi&nate his +ares, had e5actl perfor!ed that function for t+ent Bt+o ears before the petitioner adopted it as a tradeB!ar" in her o+n business. An& Tiba shoes and slippers are, b association, "no+n throu&hout the Philippines as products of the An& Tiba factor o+ned and operated b the respondent Toribio Teodoro. Second. %n her second assi&n!ent of error petitioner contends that the Court of Appeals erred in holdin& that the +ords 4An& Tiba 4 had acquired a secondar !eanin&. %n vie+ of the conclusion +e have reached upon the first assi&n!ent of error, it is unnecessar to appl here the doctrine of 4secondar !eanin&4 in tradeB !ar" parlance. This doctrine is to the effect that a +ord or phrase ori&inall incapable of e5clusive appropriation +ith reference to an article of the !ar"et, because &eo&raphicall or other+ise descriptive, !i&ht nevertheless have been used so lon& and so e5clusivel b one producer +ith reference to his article that, in that trade and to that branch of the purchasin& public, the

+ord or phrase has co!e to !ean that the article +as his product. 6:. S C. Merria! Co. vs. $alfield, /0? J., .=0, .@..8 2e have said that the phrase 4An& Tiba ,4 bein& neither &eo&raphic nor descriptive, +as ori&inall capable of e5clusive appropriation as a tradeB!ar". But +ere it not so, the application of the doctrine of secondar !eanin& !ade b the Court of Appeals could nevertheless be full sustained because, in an event, b respondentAs lon& and e5clusive use of said phrase +ith reference to his products and his business, it has acquired a proprietar connotation. 6;anders, Jrar , and Clar" vs. #niversal Cooler Corporation, ?1 J. K-dL, C=.8 +hird. PetitionerAs third assi&n!ent of error is, that the Court of Appeals erred in holdin& that pants and shirts are &oods si!ilar to shoes and slippers +ithin the !eanin& of sections . and @ of Act No. ===. $he also contends under her fourth assi&n!ent of error 6+hich +e dee! convenient to pass upon to&ether +ith the third8 that there can neither be infrin&e!ent of tradeB!ar" under section . nor unfair co!petition under section @ throu&h her use of the +ords 4An& Tiba 4 in connection +ith pants and shirts, because those articles do not belon& to the sa!e class of !erchandise as shoes and slippers. The question raised b petitioner involve the scope and application of sections .,@, //, /., and -> of the TradeB Mar" ;a+ 6Act No. ===.8 $ection . provides that 4an person entitled to the e5clusive use of a tradeB!ar" to

desi&nate the ori&in or o+nership of &oods he has !ade or deals in, !a recover da!a&es in a civil actions fro! an person +ho has sold &oods of a si!ilar "ind, bearin& such tradeB!ar" . . . The co!plainin& part . . . !a have a preli!inar in<unction, . . . and such in<unction upon final hearin&, if the co!plainantAs propert in the tradeB!ar" and the defendantAs violation thereof shall be full established, shall be !ade perpetual, and this in<unction shall be part of the <ud&!ent for da!a&es to be rendered in the sa!e cause.4 $ection @ provides that an person +ho, in sellin& his &oods, shall &ive the! the &eneral appearance of the &oods of another either in the +rappin& of the pac"a&es, or in the devices or +ords thereon, or in an other feature of their appearance, +hich +ould be li"el to influence purchasers to believe that the &oods offered are those of the co!plainant, shall be &uilt of unfair co!petition, and shall be liable to an action for da!a&es and to an in<unction, as in the cases of tradeB!ar" infrin&e!ent under section .. $ection // requires the applicant for re&istration of a tradeB!ar" to state, a!on& others, 4the !eneral class of merchandise to +hich the tradeB!ar" clai!ed has been appropriated.4 $ection /. provides that no alle&ed tradeB !ar" or trade na!e shall be re&istered +hich is identical +ith a re&istered or "no+n tradeB!ar" o+ned b another and appropriate to the same class of merchandise, or +hich to nearl rese!bles another personAs la+ful tradeB !ar" or tradeBna!e as to be li"el to cause confusion or !ista"e in the !ind of the public, or to deceive

purchasers. And section - authoriIes the *irector of Co!!erce to establish classes of merchandise for the purpose of the re&istration of tradeB!ar"s and to deter!ine the particular description of articles included in each classD it also provides that 4an application for re&istration of a tradeB!ar" shall be re&istered onl for one class of articles and onl for the particular description of articles !entioned in said application.4 2e have underlined the "e +ords used in the statute: 4&oods of a si!ilar "in,4 4&eneral class of !erchandise,4 4sa!e class of !erchandise,4 4classes of !erchandise,4 and 4class of articles,4 because it is upon their i!plications that the result of the case hin&es. These phrases, +hich refer to the sa!e thin&, have the sa!e !eanin& as the phrase 4!erchandise of the sa!e descriptive properties4 used in the statutes and <urisprudence of other <urisdictions. The burden of petitionerAs ar&u!ent is that under sections // and -> the re&istration b respondent of the tradeB!ar" 4An& Tiba 4 for shoes and slippers is no safeB &uard a&ainst its bein& used b petitioner for pants and shirts because the latter do not belon& to the sa!e class of !erchandise or articles as the for!erD that she cannot be held &uilt of infrin&e!ent of tradeB!ar" under section . because respondentAs !ar" is not a valid tradeB !ar", nor has it acquired a secondar !eanin&D that pants and shirts do not possess the sa!e descriptive properties as shoes and slippersD that neither can she be

held &uilt of unfair co!petition under section @ because the use b her of the tradeB!ar" 4An& Tiba 4 upon pants and shirts is not li"el to !islead the &eneral public as to their ori&in or o+nershipD and that there is no+ sho+in& that she in unfairl or fraudulentl usin& that !ar" 4An& Tiba 4 a&ainst the respondent. %f +e +ere interpretin& the statute for the first ti!e and in the first decade of the t+entieth centur , +hen it +as enacted, and +ere to construe it strictl and literall , +e !i&ht uphold petitionerAs contentions. But la+ and <urisprudence !ust "eep abreast +ith the pro&ress of !an"ind, and the courts !ust breathe life into the statutes if the are to serve their purpose. 'ur TradeB!ar" ;a+, enacted nearl fort ears a&o, has &ro+n in its i!plications and practical application, li"e a constitution, in virtue of the life continuall breathed into it. %t is not of !erel local applicationD it has its counterpart in other <urisdictions of the civiliIed +orld fro! +hose <urisprudence it has also received vitaliIin& nourish!ent. 2e have to appl this la+ as it has &ro+n and not as it +as born. %ts &ro+th or develop!ent abreast +ith that of sister statutes and <urisprudence in other <urisdictions is reflected in the follo+in& observation of a +ellB"no+n author: This funda!ental chan&e in attitude first !anifested itself in the ear /0/1B/0/@. #ntil about then, the courts had proceeded on the theor that the sa!e tradeB!ar", used on unBli"e &oods, could not cause confusion in trade and that, therefore, there could be

no ob<ection to the use and re&istration of a +ellB "no+n !ar" b a third part for a different class of &oods. $ince /0/= ho+ever, a &ro+in& senti!ent be&an to arise that in the selection of a fa!ous !ar" b a third part , there +as &enerall the hidden intention to 4have a free ride4 on the tradeB!ar" o+nerAs reputation and &ood +ill. 6*erenber&, TradeB Mar" Protection S #nfair Tradin&, /0.= edition, p. C>0.8 %n the present state of develop!ent of the la+ on TradeB Mar"s, #nfair Co!petition, and #nfair Tradin&, the test e!plo ed b the courts to deter!ine +hether nonco!petin& &oods are or are not of the sa!e class is confusion as to the ori&in of the &oods of the second user. Althou&h t+o nonco!petin& articles !a be classified under t+o different classes b the Patent 'ffice because the are dee!ed not to possess the sa!e descriptive properties, the +ould, nevertheless, be held b the courts to belon& to the sa!e class if the si!ultaneous use on the! of identical or closel si!ilar tradeB!ar"s +ould be li"el to cause confusion as to the ori&in, or personal source, of the second userAs &oods. The +ould be considered as not fallin& under the sa!e class onl if the are so dissi!ilar or so forei&n to each other as to !a"e it unli"el that the purchaser +ould thin" the first user !ade the second userAs &oods. $uch construction of the la+ is induced b co&ent reasons of equit and fair dealin&. The courts have co!e

to realiIe that there can be unfair co!petition or unfair tradin& even if the &oods are nonBco!petin&, and that such unfair tradin& can cause in<ur or da!a&e to the first user of a &iven tradeB!ar", first, b prevention of the natural e5pansion of his business and, second, b havin& his business reputation confused +ith and put at the !erc of the second user. Then nonco!petitive products are sold under the sa!e !ar", the &radual +hittlin& a+a or dispersion of the identit and hold upon the public !ind of the !ar" created b its first user, inevitabl results. The ori&inal o+ner is entitled to the preservation of the valuable lin" bet+een hi! and the public that has been created b his in&enuit and the !erit of his +ares or services. E5perience has de!onstrated that +hen a +ellB"no+n tradeB!ar" is adopted b another even for a totall different class of &oods, it is done to &et the benefit of the reputation and advertise!ents of the ori&inator of said !ar", to conve to the public a false i!pression of so!e supposed connection bet+een the !anufacturer of the article sold under the ori&inal !ar" and the ne+ articles bein& tendered to the public under the sa!e or si!ilar !ar". As trade has developed and co!!ercial chan&es have co!e about, the la+ of unfair co!petition has e5panded to "eep pace +ith the ti!es and the ele!ent of strict co!petition in itself has ceased to be the deter!inin& factor. The o+ner of a tradeB!ar" or tradeBna!e has a propert ri&ht in +hich he is entitled to protection, since there is da!a&e to hi! fro! confusion of reputation or

&ood+ill in the !ind of the public as +ell as fro! confusion of &oods. The !odern trend is to &ive e!phasis to the unfairness of the acts and to classif and treat the issue as a fraud. A fe+ of the nu!erous cases in +hich the fore&oin& doctrines have been laid do+n in one for! or another +ill no+ be cited: 6/8 %n +eodoro .alaw 7! .he vs. Level rothers Company 6:.R. No. C=?/@8, decided b this Court on April /?, /0C/, the respondent co!pan 6plaintiff belo+8 +as &ranted in<unctive relief a&ainst the use b the petitioner of the tradeB!ar" 4;u54 and 4;ifebuo 4 for hair po!ade, the havin& been ori&inall used b the respondent for soapD The Court held in effect that althou&h said articles are nonco!petitive, the are si!ilar or belon& to the sa!e class. 6-8 %n Lincoln Motor Co. vs. Lincoln Automo)ile Co. 6CC J. K-dL, ?/-8, the !anufacturer of the +ellB"no+n ;incoln auto!obile +as &ranted in<unctive relief a&ainst the use of the +ord 4;incoln4 b another co!pan as part of its fir! na!e. 6.8 The case of Aunt "emima Mills Co. vs. #i!ney 2 Co. 6-C@ J., C>@8, involved the tradeB!ar" 4Aunt 9e!i!a,4 ori&inall used on flour, +hich the defendant atte!pted to use on s rup, and there the court held that the &oods, thou&h different, are so related as to fall +ithin the !ischief +hich equit should prevent. 6C8 %n +iffany 2 Co., vs. +iffany Productions, *nc. 6-=C N.3.$., C10D -. TradeB!ar" Reporter, /?.8, the plaintiff, a <e+elr concern, +as &ranted in<unctive relief a&ainst the

defendant, a !anufacturer of !otion pictures, fro! usin& the na!e 4Tiffan .4 'ther fa!ous cases cited on the !ar&in, +herein the courts &ranted in<unctive relief, involved the follo+in& tradeB!ar"s or tradeBna!es: 4Moda",4 for ca!eras and photo&raphic supplies, a&ainst its use for bic cles. C 4Penslar,4 for !edicines and toilet articles, a&ainst its use for ci&arsD 1 4RollsBRo ce,4 for auto!obiles. a&ainst its use for radio tubesD = 47o&ue,4 as the na!e of a !a&aIine, a&ainst its use for hatsD @4Mote5,4 for sanitar nap"ins, a&ainst the use of 4Rote54 for va&inal s rin&esD ? 4$unBMaid,4 for raisins, a&ainst its use for flourD 0 43ale,4 for loc"s and "e s, a&ainst its use for electric flashli&htsD /> and 42ater!an,4 for fountain pens, a&ainst its use for raIor blades. //la+phil.net A&ainst this arra of fa!ous cases, the industr of counsel for the petitioner has enabled hi! to cite on this point onl the follo+in& cases: 6/8 Mohaw$ Mil$ Products vs. General &istilleries Corporation 601 J. K-dL, ..C8, +herein the court held that &in and canned !il" and crea! do not belon& to the sa!e classD 6-8 (awcett Pu)lications, *nc. vs. Popular Mechanics Co. 6?> J. K-dL, /0C8, +herein the court held that the +ords 4Popular Mechanics4 used as the title of a !a&aIine and dul re&istered as a tradeB!ar" +ere not infrin&ed b defendantAs use of the +ords 4Modern Mechanics and %nventions4 on a co!petitive !a&aIine, because the +ord 4!echanics4 is !erel a descriptive na!eD and

6.8 4'ford oo$ Co. vs. Colle!e -ntrance oo$ Co . 60? J. K-dL, =??8, +herein the plaintiff unsuccessfull atte!pted to en<oin the defendant fro! usin& the +ord 47isualiIed4 in connection +ith histor boo"s, the court holdin& that said +ord is !erel descriptive. These cases cites and relied upon b petitioner are obviousl of no decisive application to the case at bar. 2e thin" reasonable !en !a not disa&ree that shoes and shirts are not as unrelated as fountain pens and raIor blades, for instance. The !ere relation or association of the articles is not controllin&. As !a readil be noted fro! +hat +e have heretofore said, the proprietar connotation that a tradeB!ar" or tradeBna!e has acquired is of !ore para!ount consideration. The Court of Appeals found in this case that b uninterrupted and e5clusive use since /0/> of respondentAs re&istered tradeB!ar" on slippers and shoes !anufactured b hi!, it has co!e to indicate the ori&in and o+nership of said &oods. %t is certainl not farfetched to sur!ise that the selection b petitioner of the sa!e tradeB!ar" for pants and shirts +as !otivated b a desire to &et a free ride on the reputation and sellin& po+er it has acquired at the hands of the respondent. As observed in another case, /- the field fro! +hich a person !a select a tradeB!ar" is practicall unli!ited, and hence there is no e5cuse for i!pin&in& upon or even closel approachin& the !ar" of a business rival. %n the unli!ited field of choice, +hat could have been petitionerAs purpose in

selectin& 4An& Tiba 4 if not for its fa!e( ;astl , in her fifth assi&n!ent of error petitioner see!s to !a"e a frantic effort to retain the use of the !ar" 4An& Tiba .4 ,er counsel su&&ests that instead of en<oinin& her fro! usin& it, she !a be required to state in her labels affi5ed to her products the inscription: 4Not !anufactured b Toribio Teodoro.4 2e thin" such practice +ould be unethical and un+orth of a reputable business!an. To the su&&estion of petitioner, respondent !a sa , not +ithout <ustice thou&h +ith a tin&e of bitterness: 42h offer a perpetual apolo& or e5planation as to the ori&in of our products in order to use ! tradeB!ar" instead of creatin& one of our o+n(4 'n our part !a +e add, +ithout !eanin& to be harsh, that a selfBrespectin& person does not re!ain in the shelter of another but builds one of his o+n. The <ud&!ent of the Court of Appeals is affir!ed, +ith costs a&ainst the petitioner in the three instances. $o ordered. 5ulo, C."., Moran, Paras and oco)o, ""., concur.

Republic of the Philippines SUPREME COURT Manila J%R$T *%7%$%'N G.R. No. L-43325 'a"(ar* 25, 1990

DEL MONTE CORPORAT ON a"# PH L PP NE PAC, NG CORPORAT ON, petitioners, vs. COURT O! APPEALS a"# SUNSH NE SAUCE MANU!ACTUR NG NDUSTR ES, respondents. ito, Misa 2 Lozada for petitioners. #eynaldo (. Sin!son for private respondent. CRU%, J.: The petitioners are questionin& the decision of the respondent court upholdin& the dis!issal b the trial court of their co!plaint a&ainst the private respondent for infrin&e!ent of trade!ar" and unfair co!petition. Petitioner *el Monte Corporation is a forei&n co!pan or&aniIed under the la+s of the #nited $tates and not en&a&ed in business in the Philippines. Both the Philippines and the #nited $tates are si&natories to the Convention of Paris of $epte!ber -@, /0=1, +hich &rants to the nationals of the parties ri&hts and advanta&es +hich their o+n nationals en<o for the repression of acts of infrin&e!ent and unfair co!petition. Petitioner Philippine Pac"in& Corporation 6Philpac"8 is a do!estic corporation dul or&aniIed under the la+s of the Philippines. 'n April //, /0=0, *el Monte &ranted Philpac" the ri&ht to !anufacture, distribute and sell in the Philippines various a&ricultural products, includin& catsup, under the *el Monte trade!ar" and lo&o.

'n 'ctober -@,/0=1, *el Monte authoriIed Philpac" to re&ister +ith the Philippine Patent 'ffice the *el Monte catsup bottle confi&uration, for +hich it +as &ranted Certificate of Trade!ar" Re&istration No. $RB0/. b the Philippine Patent 'ffice under the $upple!ental Re&ister. 1 'n Nove!ber ->, /0@-, *el Monte also obtained t+o re&istration certificates for its trade!ar" 4*E; M'NTE4 and its lo&o. 2 Respondent $unshine $auce Manufacturin& %ndustries +as issued a Certificate of Re&istration b the Bureau of *o!estic Trade on April /@,/0?>, to en&a&e in the !anufacture, pac"in&, distribution and sale of various "inds of sauce, identified b the lo&o $unshine Jruit Catsup. 3 This lo&o +as re&istered in the $upple!ental Re&ister on $epte!ber ->, /0?.. 0 The product itself +as contained in various "inds of bottles, includin& the *el Monte bottle, +hich the private respondent bou&ht fro! the <un" shops for rec clin&. ,avin& received reports that the private respondent +as usin& its e5clusivel desi&ned bottles and a lo&o confusin&l si!ilar to *el MonteAs, Philpac" +arned it to desist fro! doin& so on pain of le&al action. Thereafter, clai!in& that the de!and had been i&nored, Philpac" and *el Monte filed a co!plaint a&ainst the private respondent for infrin&e!ent of trade!ar" and unfair co!petition, +ith a pra er for da!a&es and the issuance of a +rit of preli!inar in<unction. 5 %n its ans+er, $unshine alle&ed that it had lon& ceased to

use the *el Monte bottle and that its lo&o +as substantiall different fro! the *el Monte lo&o and +ould not confuse the bu in& public to the detri!ent of the petitioners. 6 After trial, the Re&ional Trial Court of Ma"ati dis!issed the co!plaint. %t held that there +ere substantial differences bet+een the lo&os or trade!ar"s of the partiesD that the defendant had ceased usin& the petitionersA bottlesD and that in an case the defendant beca!e the o+ner of the said bottles upon its purchase thereof fro! the <un" ards. Jurther!ore, the co!plainants had failed to establish the defendantAs !alice or bad faith, +hich +as an essential ele!ent of infrin&e!ent of trade!ar" or unfair co!petition. 4 This decision +as affir!ed in toto b the respondent court, +hich is no+ faulted in this petition for certiorari under Rule C1 of the Rules of Court. $ection -- of R.A. No. /==, other+ise "no+n as the Trade!ar" ;a+, provides in part as follo+s: $ec. --. *nfrin!ement, what constitutes. ) An person +ho shall use, +ithout the consent of the re&istrant, an reproduction, counterfeit, cop or colorable i!itation of an re&istered !ar" or tradeBna!e in connection +ith the sale, offerin& for sale, or advertisin& of an &oods, business or services on or in connection +ith +hich such use is li"el to cause confusion or !ista"e or to deceive purchasers or others as to the source or

ori&in of such &oods or services or identit of such businessD or reproduce, counterfeit cop or colorabl i!itate an such !ar" or trade na!e and appl such reproduction, counterfeit cop or colorable i!itation to labels, si&ns, prints, pac"a&es, +rappers, receptacles or advertise!ents intended to be used upon or in connection +ith such &oods, business or services, shall be liable to a civil action b the re&istrant for an or all of the re!edies herein provided. $ec. -0 of the sa!e la+ states as follo+s: $ec. -0. ,nfair competition, ri!hts and remedies. ) A person +ho has identified in the !ind of the public the &oods he !anufactures or deals in, his business or services fro! those of others, +hether or not a !ar" or tradena!e is e!plo ed, has a propert ri&ht in the &ood+ill of the said &oods, business or services so identified, +hich +ill be protected in the sa!e !anner as other propert ri&hts. $uch a person shall have the re!edies provided in section t+ent B three, Chapter 7 hereof. An person +ho shall e!plo deception or an other !eans contrar to &ood faith b +hich he shall pass off the &oods !anufactured b hi! or in +hich he deals, or his business, or services for those of the one havin& established such

&ood+ill, or +ho shall co!!it an acts calculated to produce said result, shall be &uilt of unfair co!petition, and shall be sub<ect to an action therefor. %n particular, and +ithout in an +a li!itin& the scope of unfair co!petition, the follo+in& shall be dee!ed &uilt of unfair co!petition: 6a8 An person, +ho in sellin& his &oods shall &ive the! the &eneral appearance of &oods of another !anufacturer or dealer, either as to the &oods the!selves or in the +rappin& of the pac"a&es in +hich the are contained, or the devices or +ords thereon, or in an other feature of their appearance, +hich +ould li"el influence purchasers to believe that the &oods offered are those of a !anufacturer or dealer other than the actual !anufacturer or dealer, or +ho other+ise clothes the &oods +ith such appearance as shall deceive the public and defraud another of his le&iti!ate trade, or an subsequent vendor of such &oods or an a&ent of an vendor en&a&ed in sellin& such &oods +ith a li"e purposeD 6b8 An person +ho b an artifice, or device, or +ho e!plo s all other !eans calculated to induce the false belief that

such person is offerin& the services of another +ho has identified such services in the !ind of the publicD or 6c8 An person +ho shall !a"e an false state!ent in the course of trade or +ho shall co!!it an other act contrar to &ood faith of a nature calculated to discredit the &oods, business or services of another. To arrive at a proper resolution of this case, it is i!portant to bear in !ind the follo+in& distinctions bet+een infrin&e!ent of trade!ar" and unfair co!petition. 6/8 %nfrin&e!ent of trade!ar" is the unauthoriIed use of a trade!ar", +hereas unfair co!petition is the passin& off of oneAs &oods as those of another. 6-8 %n infrin&e!ent of trade!ar" fraudulent intent is unnecessar +hereas in unfair co!petition fraudulent intent is essential. 6.8 %n infrin&e!ent of trade!ar" the prior re&istration of the trade!ar" is a prerequisite to the action, +hereas in unfair co!petition re&istration is not necessar . 3 %n the challen&ed decision, the respondent court cited the follo+in& test laid do+n b this Court in a nu!ber of

cases: %n deter!inin& +hether t+o trade!ar"s are confusin&l si!ilar, the t+o !ar"s in their entiret as the appear in the respective labels !ust be considered in relation to the &oods to +hich the are attachedD the discernin& e e of the observer !ust focus not onl on the predorninant +ords but also on the other features appearin& on both labels. 9 and appl in& the sa!e, held that there +as no colorable i!itation of the petitionersA trade!ar" and lo&o b the private respondent. The respondent court a&reed +ith the findin&s of the trial court that: %n order to resolve the said issue, the Court no+ atte!pts to !a"e a co!parison of the t+o products, to +it: /. As to the shape of label or !a"e: *el Monte: $e!iBrectan&ular +ith a cro+n or to!ato shape desi&n on top of the rectan&le. $unshine: Re&ular rectan&le. -. As to brand printed on label: *el Monte: To!ato catsup !ar". $unshine: Jruit catsup. .. As to the +ords or letterin& on label or !ar":

*el Monte: Clearl indicated +ords pac"ed b $ su %nternational, %nc., T.C., Philippines. $unshine: $unshine fruit catsup is clearl indicated 4!ade in the Philippines b $unshine $auce Manufacturin& %ndustries4 No. / *el Monte Avenue, Malabon, Metro Manila. C. As to color of lo&o: *el Monte: Co!bination of ello+ and dar" red, +ith +ords 4*el Monte Tualit 4 in +hite. $unshine: 2hite, li&ht &reen and li&ht red, +ith +ords 4$unshine Brand4 in ello+. 1. As to shape of lo&o: *el Monte: %n the shape of a to!ato. $unshine: Entirel different in shape. =. As to label belo+ the cap: *el Monte: $eal coverin& the cap do+n to the nec" of the bottle, +ith picture of to!atoes +ith +ords 4!ade fro! real to!atoes.4 $unshine: There is a label belo+ the cap +hich sa s 4$unshine Brand.4 @. As to the color of the products: *el Monte: *ar"er red.

$unshine: ;i&hter than *el Monte. 2hile the Court does reco&niIe these distinctions, it does not a&ree +ith the conclusion that there +as no infrin&e!ent or unfair co!petition. %t see!s to us that the lo+er courts have been so preBoccupied +ith the details that the have not seen the total picture. %t has been correctl held that sideBb Bside co!parison is not the final test of si!ilarit . 10 $uch co!parison requires a careful scrutin to deter!ine in +hat points the labels of the products differ, as +as done b the trial <ud&e. The ordinar bu er does not usuall !a"e such scrutin nor does he usuall have the ti!e to do so. The avera&e shopper is usuall in a hurr and does not inspect ever product on the shelf as if he +ere bro+sin& in a librar . 2here the house+ife has to return ho!e as soon as possible to her bab or the +or"in& +o!an has to !a"e quic" purchases durin& her off hours, she is apt to be confused b si!ilar labels even if the do have !inute differences. The !ale shopper is +orse as he usuall does not bother about such distinctions. The question is not +hether the t+o articles are distin&uishable b their label +hen set side b side but +hether the &eneral confusion !ade b the article upon the e e of the casual purchaser +ho is unsuspicious and off his &uard, is such as to li"el result in his confoundin& it +ith the ori&inal. 11 As observed in several cases, the &eneral i!pression of the ordinar purchaser, bu in& under the nor!all prevalent conditions in trade and

&ivin& the attention such purchasers usuall &ive in bu in& that class of &oods is the touchstone. 12 %t has been held that in !a"in& purchases, the consu!er !ust depend upon his recollection of the appearance of the product +hich he intends to purchase. 13 The bu er havin& in !ind the !ar"Ulabel of the respondent !ust rel upon his !e!or of the petitionerAs !ar". 10 #nli"e the <ud&e +ho has a!ple ti!e to !inutel e5a!ine the labels in question in the co!fort of his sala, the ordinar shopper does not en<o the sa!e opportunit . A nu!ber of courts have held that to deter!ine +hether a trade!ar" has been infrin&ed, +e !ust consider the !ar" as a +hole and not as dissected. %f the bu er is deceived, it is attributable to the !ar"s as a totalit , not usuall to an part of it. 15 The court therefore should be &uided b its first i!pression, 16 for a bu er acts quic"l and is &overned b a casual &lance, the value of +hich !a be dissipated as soon as the court assu!es to anal Ie carefull the respective features of the !ar". 14 %t has also been held that it is not the function of the court in cases of infrin&e!ent and unfair co!petition to educate purchasers but rather to ta"e their carelessness for &ranted, and to be ever conscious of the fact that !ar"s need not be identical. A confusin& si!ilarit +ill <ustif the intervention of equit . 13 The <ud&e !ust also be a+are of the fact that usuall a defendant in cases of infrin&e!ent does not nor!all cop but !a"es onl colorable chan&es. 19 2ell has it been said that the

!ost successful for! of cop in& is to e!plo enou&h points of si!ilarit to confuse the public +ith enou&h points of difference to confuse the courts. 20 2e also note that the respondent court failed to ta"e into consideration several factors +hich should have affected its conclusion, to +it: a&e, trainin& and education of the usual purchaser, the nature and cost of the article, +hether the article is bou&ht for i!!ediate consu!ption and also the conditions under +hich it is usuall purchased . 21 A!on& these, +hat essentiall deter!ines the attitude of the purchaser, specificall his inclination to be cautious, is the cost of the &oods. To be sure, a person +ho bu s a bo5 of candies +ill not e5ercise as !uch care as one +ho bu s an e5pensive +atch. As a &eneral rule, an ordinar bu er does not e5ercise as !uch prudence in bu in& an article for +hich he pa s a fe+ centavos as he does in purchasin& a !ore valuable thin&. 22E5pensive and valuable ite!s are nor!all bou&ht onl after deliberate, co!parative and anal tical investi&ation. But !ass products, lo+ priced articles in +ide use, and !atters of ever da purchase requirin& frequent replace!ent are bou&ht b the casual consu!er +ithout &reat care. 23 %n this latter cate&or is catsup. At that, even if the labels +ere anal Ied to&ether it is not difficult to see that the $unshine label is a colorable i!itation of the *el Monte trade!ar". The predo!inant colors used in the *el Monte label are &reen and redB

oran&e, the sa!e +ith $unshine. The +ord 4catsup4 in both bottles is printed in +hite and the st le of the printUletter is the sa!e. Althou&h the lo&o of $unshine is not a to!ato, the fi&ure nevertheless appro5i!ates that of a to!ato. As previousl stated, the person +ho infrin&es a trade !ar" does not nor!all cop out but onl !a"es colorable chan&es, e!plo in& enou&h points of si!ilarit to confuse the public +ith enou&h points of differences to confuse the courts. 2hat is undeniable is the fact that +hen a !anufacturer prepares to pac"a&e his product, he has before hi! a boundless choice of +ords, phrases, colors and s !bols sufficient to distin&uish his product fro! the others. 2hen as in this case, $unshine chose, +ithout a reasonable e5planation, to use the sa!e colors and letters as those used b *el Monte thou&h the field of its selection +as so broad, the inevitable conclusion is that it +as done deliberatel to deceive . 20 %t has been aptl observed that the ulti!ate ratio in cases of &rave doubt is the rule that as bet+een a ne+co!er +ho b the confusion has nothin& to lose and ever thin& to &ain and one +ho b honest dealin& has alread achieved favor +ith the public, an doubt should be resolved a&ainst the ne+co!er inas!uch as the field fro! +hich he can select a desirable trade!ar" to indicate the ori&in of his product is obviousl a lar&e one. 25

Co!in& no+ to the second issue, +e find that the private respondent is not &uilt of infrin&e!ent for havin& used the *el Monte bottle. The reason is that the confi&uration of the said bottle +as !erel re&istered in the $upple!ental Re&ister. %n the case of Lorenzana v. Maca!)a, 26 +e declared that: 6/8 Re&istration in the Principal Re&ister &ives rise to a presu!ption of the validit of the re&istration, the re&istrantAs o+nership of the !ar" and his ri&ht to the e5clusive use thereof. There is no such presu!ption in the re&istration in the $upple!ental Re&ister. 6-8 Re&istration in the Principal Re&ister is li!ited to the actual o+ner of the trade!ar" and proceedin&s therein on the issue of o+nership +hich !a be contested throu&h opposition or interference proceedin&s or, after re&istration, in a petition for cancellation. Re&istration in the Principal Re&ister is constructive notice of the re&istrantAs clai! of o+nership, +hile re&istration in the $upple!ental Re&ister is !erel proof of actual use of the trade!ar" and notice that the re&istrant has used or appropriated it. %t is not sub<ect to opposition althou&h it !a be cancelled

after the issuance. Corollaril , re&istration in the Principal Re&ister is a basis for an action for infrin&e!ent +hile re&istration in the $upple!ental Re&ister is not. 6.8 %n applications for re&istration in the Principal Re&ister, publication of the application is necessar . This is not so in applications for re&istrations in the $upple!ental Re&ister. %t can be inferred fro! the fore&oin& that althou&h *el Monte has actual use of the bottleAs confi&uration, the petitioners cannot clai! e5clusive use thereof because it has not been re&istered in the Principal Re&ister. ,o+ever, +e find that $unshine, despite the !an choices available to it and not+ithstandin& that the caution 4*el Monte Corporation, Not to be Refilled4 +as e!bossed on the bottle, still opted to use the petitionersA bottle to !ar"et a product +hich Philpac" also produces. This clearl sho+s the private respondentAs bad faith and its intention to capitaliIe on the latterAs reputation and &ood+ill and pass off its o+n product as that of *el Monte. The Court observes that the reasons &iven b the respondent court in resolvin& the case in favor of $unshine are untenable. Jirst, it declared that the re&istration of the $unshine label belied the co!pan As !alicious intent to i!itate petitionerAs product. $econd, it held that the $unshine label +as not i!proper because

the Bureau of Patent presu!abl considered other trade!ar"s before approvin& it. Third, it cited the case of Shell Co. v. *nsular Petroleum, 24 +here this Court declared that sellin& oil in containers of another +ith !ar"in&s erased, +ithout intent to deceive, +as not unfair co!petition. Re&ardin& the fact of re&istration, it is to be noted that the $unshine label +as re&istered not in the Principal Re&ister but onl in the $upple!ental Re&ister +here the presu!ption of the validit of the trade!ar", the re&istrantAs o+nership of the !ar" and his ri&ht to its e5clusive use are all absent. Anent the assu!ption that the Bureau of Patent had considered other e5istin& patents, it is reiterated that since re&istration +as onl in the $upple!ental Re&ister, this did not vest the re&istrant +ith the e5clusive ri&ht to use the label nor did it &ive rise to the presu!ption of the validit of the re&istration. 'n the ar&u!ent that no unfair co!petition +as co!!itted, the $hell Case is not on all fours +ith the case at bar because: 6/8 %n $hell, the absence of intent to deceive +as supported b the fact that the respondent therein, before !ar"etin& its product, totall obliterated and erased the brandsU!ar" of the different co!panies stenciled on the containers thereof, e5cept for a sin&le isolated transaction. The respondent in the present case !ade no si!ilar

effort. 6-8 %n $hell, +hat +as involved +as a sin&le isolated transaction. 'f the !an dru!s used, there +as onl one container +here the $hell label +as not erased, +hile in the case at hand, the respondent ad!itted that it !ade use of several *el Monte bottles and +ithout obliteratin& the e!bossed +arnin&. 6.8 %n $hell, the product of respondent +as sold to dealers, not to ulti!ate consu!ers. As a &eneral rule, dealers are +ell acquainted +ith the !anufacturer fro! +ho! the !a"e their purchases and since the are !ore e5perienced, the cannot be so easil deceived li"e the ine5perienced public. There !a +ell be si!ilarities and i!itations +hich deceive all, but &enerall the interests of the dealers are not re&arded +ith the sa!e solicitude as are the interests of the ordinar consu!er. Jor it is the for! in +hich the +ares co!e to the final bu er that is of si&nificance. 23 As $unshineAs label is an infrin&e!ent of the *el MonteAs trade!ar", la+ and equit call for the cancellation of the private respondentAs re&istration and +ithdra+al of all its products bearin& the questioned label fro! the !ar"et. 2ith re&ard to the use of *el MonteAs bottle, the sa!e constitutes unfair co!petitionD hence, the respondent should be per!anentl en<oined fro! the use of such

bottles. The court !ust rule, ho+ever, that the da!a&e pra ed for cannot be &ranted because the petitioner has not presented evidence to prove the a!ount thereof. $ection -. of R.A. No. /== provides: $ec. -.. Actions and dama!es and in9unction for infrin!ement. ) An person entitled to the e5clusive use of a re&istered !ar" or trade na!e !a recover da!a&es in a civil action fro! an person +ho infrin&es his ri&hts, and the !easure of the da!a&es suffered shall be either the reasonable profit +hich the co!plainin& part +ould have !ade, had the defendant not infrin&ed his said ri&hts or the profit +hich the defendant actuall !ade out of the infrin&e!ent, or in the event such !easure of da!a&es cannot be readil ascertained +ith reasonable certaint the court !a a+ard as da!a&es reasonable percenta&e based upon the a!ount of &ross sales of the defendant or the value of the services in connection +ith +hich the !ar" or trade na!e +as used in the infrin&e!ent of the ri&hts of the co!plainin& part . %n cases +here actual intent to !islead the public or to defraud the co!plainin& part shall be sho+n, in the discretion of the court, the da!a&es !a be doubled. The co!plainin& part , upon proper sho+in& !a

also be &ranted in<unction. Jortunatel for the petitioners, the !a still find so!e s!all co!fort in Art. ---- of the Civil Code, +hich provides: Art. ----. The court !a a+ard no!inal da!a&es in ever obli&ation arisin& fro! an source enu!erated in Art. //1@, or in ever case +here an propert ri&ht has been invaded. Accordin&l , the Court can onl a+ard to the petitioners, as it hereb does a+ard, no!inal da!a&es in the a!ount of Pl,>>>.>>. 2,EREJ'RE, the petition is :RANTE*. The decision of the Court of Appeals dated *ece!ber -C, /0?= and the Resolution dated April -@,/0?@, are RE7ER$E* and $ET A$%*E and a ne+ <ud&!ent is hereb rendered: 6/8 Cancelin& the private respondentAs Certificate of Re&ister No. $RB=./> and per!anentl en<oinin& the private respondent fro! usin& a label si!ilar to that of the petitioners. 6-8 Prohibitin& the private respondent fro! usin& the e!pt bottles of the petitioners as containers for its o+n products. 6.8 'rderin& the private respondent to pa the petitioners no!inal da!a&es in the a!ount of Pl,>>>.>>, and the costs of the suit. $' 'R*ERE*.

7arvasa Gancayco, Gri:o-A8uino and Medialdea, ""., concur. American Wire & Cable Company v. Director of Patents, G.R. No. L-26557 February 18, 1970.