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1. Pearl & Dean Inc. v. Shoemart G.R.

148222, August 15, 2003


- Dinnah Mae
TOPIC: Trademark, Copyright, Patent Definitions
Pearl and Dean (Pearl) is a corporation engaged in the
manufacture of advertising display units simply referred to as light
boxes (using specially printed posters sandwiched between plastic
sheets and illuminated with back lights).
o had a Certificate of Copyright Registration dated January 20,
1981 over these
o These were also marketed under the trademark "Poster Ads".
The application for registration of the trademark was filed with the
Bureau of Patents, Trademarks and Technology Transfer on June
20, 1983 and approved only on September 12, 1988
o From 1981 to about 1988, Pearl employed the services of Metro
Industrial Services (MIS) to manufacture its advertising displays.
(1985) Pearl negotiated with Shoemart, Inc. (SMI) for the
lease and installation of the light boxes in SM City North Edsa.
Since SM City North Edsa was under construction, SMI offered to
change this to SM Makati and SM Cubao, to which pearl agreed.
Only the contract for SM Makati was signed. Vergara (Pearls
Gen. Manager) reminded SMI that their agreement for installation
of light boxes was not only for its SM Makati branch, but also for
SM Cubao but SMI did not bother to reply.
SMI said, in a letter, that it was rescinding the contract for
SM Makati due to non-performance of the terms thereof. Vergara
protested the unilateral action of SMI for being without basis and
also pushed for the signing of the contract for SM Cubao.
Two years later, MIS offered to construct light boxes for
Shoemarts chain of stores. SMI approved (10 units were made).
SMI also later engaged the services of EYD Rainbow Advertising
Corporation to make the light boxes (300 units)
(1989) Pearl found out that aside from SM City and SM
Cubao, light boxes similar to those it manufactures were installed
in two (2) other SM stores. It further discovered that North Edsa
Marketing Inc. or NEMI (SMIs sister company), through its
marketing arm, Prime Spots Marketing Services, was set up
primarily to sell advertising space in lighted display units located in
SMIs different branches.
(1991) Pearl sent letters to both SMI and NEMI:
o enjoining them to cease using the subject light boxes and to
remove the same from SMIs establishments.
o Demanding the discontinued use of the trademark "Poster
Ads,"
o Asking payment of compensatory damages (P20,000,000.00).
Upon receipt, SMI suspended the leasing of 224 light boxes
and NEMI took down its advertisements for "Poster Ads" from the
lighted display units in SMIs stores.
For failure to meet all the demands, Pearl filed this instant
case for infringement of trademark and copyright, unfair
competition and damages.
SMI:
it independently developed its poster panels using commonly
known techniques and available technology, without notice of or
reference to Pearl and Deans copyright.
registration of the mark "Poster Ads" was only for stationeries
such as letterheads, envelopes, and the like.
the word "Poster Ads" is a generic term which cannot be
appropriated as a trademark, and, as such, registration of such
mark is invalid.
Pearls advertising display units contained no copyright
notice, in violation of Section 27 of P.D. 49.
SMI also counterclaimed for moral, actual and exemplary
damages and for the cancellation of Pearl and Deans Certification
of Copyright Registration and Certificate of Trademark
Registration
NEMI:
denied having manufactured, installed or used any
advertising display units, nor having engaged in the business of
advertising. It repleaded SMIs averments, admissions and denials
and prayed for similar reliefs and counterclaims as SMI.
RTC Makati: decided in favor of Pearl
CA: reversed the trial court:
ISSUES:
1. WON there was copyright infringement. NO
2. WON there was patent infringement. NO
3. WON there was trademark infringement. NO
4. WON there was unfair competition. NO
RULING:
1. ON THE ISSUE OF COPYRIGHT INFRINGEMENT
PEARL: infringement on its copyright over the light boxes when
SMI had the units manufactured by Metro and EYD Rainbow
Advertising for its own account, premised on its belief that its
copyright over the engineering drawings extended ipso facto to the
light boxes depicted or illustrated in said drawings.
COURT: copyright was limited to the drawings alone and
not to the light box itself.
First, petitioners application for a copyright certificate clearly
stated that it was for a class "O" work under Section 2 (O) of PD 49
(The Intellectual Property Decree)[1], although petitioners
copyright certificate was entitled "Advertising Display Units"
(which depicted the box-type electrical devices)
Copyright, in the strict sense of the term, is purely a statutory
right thus covering only the works falling within the statutory
enumeration or description.
o Pearl secured its copyright under the classification class "O"
work. Thus its copyright protection extended only to the
technical drawings (within the category of "pictorial
illustrations." ) and not to the light box itself because the
latter was not at all in the category of "prints, pictorial
illustrations, advertising copies, labels, tags and box
wraps."
o the light box was not a literary or artistic piece which could be
copyrighted under the copyright law. The lack of statutory
authority to make the light box copyrightable cannot be remedied
by the simplistic act of entitling the copyright certificate issued by
the National Library as "Advertising Display Units."
During the trial, the president of Pearl himself admitted that
the light box was neither a literary not an artistic work but an
"engineering or marketing invention."
in Kho v. CA Trademark, copyright and patents are different
intellectual property rights that cannot be interchanged with one
another.
o A trademark is any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and
shall include a stamped or marked container of goods.
A trade name means the name or designation identifying or
distinguishing an enterprise.
o Meanwhile, the scope of a copyright is confined to literary
and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of their
creation.
o Patentable inventions, on the other hand, refer to any
technical solution of a problem in any field of human activity
which is new, involves an inventive step and is industrially
applicable.
2. ON THE ISSUE OF PATENT INFRINGEMENT
petitioner never secured a patent for the light boxes thus it
could not legally prevent anyone from manufacturing or
commercially using the contraption.
Creser Precision Systems, Inc. vs. Court of Appeals: "there
can be no infringement of a patent until a patent has been issued,
since whatever right one has to the invention covered by the patent
arises alone from the grant of patent.
o An inventor has no common law right to a monopoly of his
invention. He has the right to make use of and vend his invention,
but if he voluntarily discloses it, such as by offering it for sale, the
world is free to copy and use it with impunity. A patent, however,
gives the inventor the right to exclude all others. As a patentee, he
has the exclusive right of making, selling or using the invention.
It was passed for the purpose of encouraging useful invention
and promoting new and useful inventions by the protection and
stimulation given to inventive genius, and was intended to secure
to the public, after the lapse of the exclusive privileges granted the
benefit of such inventions and improvements.
The patent law has a three-fold purpose: "first, patent law
seeks to foster and reward invention; second, it promotes
disclosures of inventions to stimulate further innovation and to
permit the public to practice the invention once the patent expires;
third, the stringent requirements for patent protection seek to
ensure that ideas in the public domain remain there for the free use
of the public."
It is only after an exhaustive examination by the patent office
that a patent is issued. There is no such scrutiny in the case of
copyrights nor any notice published before its grant to the effect
that a person is claiming the creation of a work. The law confers the
copyright from the moment of creation and the copyright
certificate is issued upon registration with the National Library of a
sworn ex-parte claim of creation.
Baker v Selden: only the expression of an idea is protected by
copyright, not the idea itself. (see original case for a discussion on
Baker)
3. ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark
"Poster Ads" which petitioners president said was a contraction of
"poster advertising." Pearl was able to secure a trademark
certificate for it, but one where the goods specified were
"stationeries such as letterheads, envelopes, calling cards and
newsletters." Petitioner admitted it did not commercially engage in
or market these goods. On the contrary, it dealt in electrically
operated backlit advertising units and the sale of advertising spaces
thereon, which, however, were not at all specified in the trademark
certificate.
Section 20 of the old Trademark Law, ruled that "the
certificate of registration issued by the Director of Patents can
confer (upon petitioner) the exclusive right to use its own symbol
only to those goods specified in the certificate, subject to any
conditions and limitations specified in the certificate x x x. One
who has adopted and used a trademark on his goods does not
prevent the adoption and use of the same trademark by others for
products which are of a different description."
Assuming arguendo that "Poster Ads" could validly qualify as
a trademark, the failure of Pearl to secure a trademark registration
for specific use on the light boxes meant that there could not have
been any trademark infringement since registration was an
essential element thereof.1wphi1
4. ON THE ISSUE OF UNFAIR COMPETITION
While the petitioners complaint in the RTC also cited unfair
competition, the trial court did not find private respondents liable
therefor. Petitioner did not appeal this particular point; hence, it
cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless
cannot hold respondents guilty of unfair competition.
o Even a name or phrase incapable of appropriation as a
trademark or trade name may, by long and exclusive use by a
business (such that the name or phrase becomes associated with
the business or product in the mind of the purchasing public), be
entitled to protection against unfair competition.
o Here, there was no evidence that Pearls use of "Poster Ads" was
distinctive or well-known.
o Poster Ads was too generic a name. So it was difficult to
identify it with any company. This prevented the application of the
doctrine of secondary meaning. "Secondary meaning" means that a
word or phrase originally incapable of exclusive appropriation with
reference to an article in the market (because it is geographically or
otherwise descriptive) might nevertheless have been used for so
long and so exclusively by one producer with reference to his article
that, in the trade and to that branch of the purchasing public, the
word or phrase has come to mean that the article was his property.
WHEREFORE, the petition is hereby DENIED and the decision
of the Court of Appeals dated May 22, 2001 is AFFIRMED in toto.



[1] SEC. 2. The rights granted by this Decree shall, from the
moment of creation, subsist with respect to any of the following
works:
x x x x x x x x x
(O) Prints, pictorial illustrations, advertising copies, labels, tags,
and box wraps;


2. Pribhdas J. Mirpuri v. Court of Appeals, G.R. 114508,
November 19, 1999. - Jen
Topic: definition, function, and history of trademark, Paris
Convention
Facts:
1. June 15, 1970: Escobar filed an application with the Bureau
of Patents for the registration of the trademark Barbizon for use
in brassieres and ladies undergarments (case docketed as IPC 686).
She alleged that they have been manufacturing and selling these
products under the firm name "L & BM Commercial" since March
3, 1970.
2. Private respondent reported Barbizon Corporation, a
corporation organized and doing business under the laws of New
York, USA, opposed the application. It was alleged that its
trademark is confusingly similar with that of Escobar and that the
registration of the said trademark will cause damage to its business
reputation and goodwill.
3. In 1974, the Director of Patents gave due course to
Escobars application and dismissed the opposition. Escobar later
assigned all his rights and interest over the trademark to petitioner.
4. In 1979, however, Escobar failed to file with the Bureau of
Patents the affidavit of use of the trademark required under Sec. 12
of RA 166. Due to this failure, the Bureau cancelled Escobars
certificate of registration.
5. In 1981, Escobar and petitioner separately filed this
application for registration of the same trademark. (case docketed
as IPC 2049). Private respondent opposed again.
6. March 2, 1982, Escobar assigned to petitioner the use of the
business name "Barbizon International." Petitioner registered the
name with the DTI for which a certificate of registration was issued
in 1987. Private respondent filed before the Office of Legal Affairs
of the DTI a petition for cancellation of petitioner's business name,
which was given due course.
7. Meanwhile, in IPC No. 2049, the Director of Patents
rendered a decision declaring private respondent's opposition
barred by res judicata and giving due course to petitioner's
application for registration.
Petitioner: (1) "Barbizon" products have been sold in the
Philippines since 1970. Petitioner developed this market by
working long hours and spending considerable sums of money on
advertisements and promotion of the trademark and its products.
Now, almost thirty years later, private respondent, a foreign
corporation, "swaggers into the country like a conquering hero,"
usurps the trademark and invades petitioner's market. Justice and
fairness dictate that private respondent be prevented from
appropriating what is not its own. (2) private respondent is barred
from questioning petitioner's ownership of the trademark because
of res judicata.
Private Respondent: This time it alleged (1) prior use and
registration of the trademark in the United States and other
countries worldwide, prior use in the Philippines (2) that the said
trademark was registered with the US Patent Office; (2) that it is
entitled to protection as well-known mark under Article 6 bis of the
Paris Convention, EO 913 and the two Memoranda of the Minister
of Trade and Industry and (3) that its use on the same class of
goods amounts to a violation of the Trademark Law and Art. 189 of
the RPC.
Issue:
W/N IPC No. 686 and IPC No. 2049 involve the same cause of
action (One of the requisites of res judicata is identical causes of
action) NO


Held:
1. The Convention of Paris for the Protection of Industrial
Property, otherwise known as the Paris Convention, is a
multilateral treaty that seeks to protect industrial property
consisting of patents, utility models, industrial designs,
trademarks, service marks, trade names and indications of source
or appellations of origin, and at the same time aims to repress
unfair competition. The Convention is essentially a compact
among various countries which, as members of the Union, have
pledged to accord to citizens of the other member countries
trademark and other rights comparable to those accorded their
own citizens by their domestic laws for an effective protection
against unfair competition. In short, foreign nationals are to be
given the same treatment in each of the member countries as that
country makes available to its own citizens. Nationals of the
various member nations are thus assured of a certain minimum of
international protection of their industrial property. Art. 6bis
governs protection of well-known trademarks. Under the first
paragraph, each country of the Union bound itself to undertake to
refuse or cancel the registration, and prohibit the use of a
trademark which is a reproduction, imitation or translation, or any
essential part of which trademark constitutes a reproduction, liable
to create confusion, of a mark considered by the competent
authority of the country where protection is sought, to be well-
known in the country as being already the mark of a person
entitled to the benefits of the Convention, and used for identical or
similar goods.
Art. 6bis was first introduced at The Hague in 1925 and amended
in Lisbon in 1952. It is a self-executing provision and does not
require legislative enactment to give it effect in the member
country. It may be applied directly by the tribunals and officials of
each member country by the mere publication or proclamation of
the Convention, after its ratification according to the public law of
each state and the order for its execution. The essential
requirement under Article 6bis is that the trademark to be
protected must be "well-known" in the country where protection is
sought.
Both the Villafuerte and Ongpin Memoranda were sustained by the
Supreme Court in the 1984 landmark case ofLa Chemise Lacoste,
S.A. v. Fernandez.
60
This court ruled therein that under the
provisions of Article 6bis of the Paris Convention, the Minister of
Trade and Industry was the "competent authority" to determine
whether a trademark is well-known in this country. (in relation to
the 2 memoranda released by DTI providing a list of well-known
foreign marks)
2. The Villafuerte Memorandum was issued in 1980, i.e., fifteen
(15) years after the adoption of the Paris Convention in 1965. In the
case at bar, the first inter partes case, IPC No. 686, was filed in
1970, before the Villafuerte Memorandum but five (5) years after
the effectivity of the Paris Convention. Article 6bis was already in
effect five years before the first case was instituted. Private
respondent, however, did not cite the protection of Article 6bis,
neither did it mention the Paris Convention at all. It was only in
1981 when IPC No. 2049 was instituted that the Paris Convention
and the Villafuerte Memorandum, and, during the pendency of the
case, the 1983 Ongpin Memorandum were invoked by private
respondent. The issue of ownership of the trademark was not
raised in IPC 686. IPC 2049 raised the issue of ownership, the first
registration and use of the trademark in the US and other
countries, and the international recognition of the trademark
established by extensive use and advertisement of respondents
products for over 40 years here and abroad. These are different
from the issues of confessing similarity and damage in IPC 686.
The issue of prior use may have been raised in IPC 686 but this
claim was limited to prior use in the Philippines only. Prior use in
IPC 2049 stems from the respondents claims originator of the
word and symbol Barbizon, as the first and registered user of the
mark attached to its products which have been sold and advertised
would arise for a considerable number of years prior to petitioners
first application. Indeed, these are substantial allegations that
raised new issues and necessarily gave respondents a new cause of
action.


Moreover, the cancellation of petitioners certificate registration for
failure to file the affidavit of use arose after IPC 686. This gave
respondent another cause to oppose the second application.


It is also to be noted that the oppositions in the first and second
cases are based on different laws. Causes of action which are
distinct and independent from each other, although out of the
same contract, transaction, or state of facts, may be sued on
separately. Recovery on one is no bar to subsequent actions on
others. The mere fact that the same relief is sought in the
subsequent action will not render the judgment in the prior action
operating as res judicata, such as where the actions are based on
different statutes.
3. A "trademark" is defined under R.A. 166, the Trademark
Law, as including "any word, name, symbol, emblem, sign or
device or any combination thereof adopted and used by a
manufacturer or merchant to identify his goods and distinguish
them from those manufactured, sold or dealt in by others. This
definition has been simplified in R.A. No. 8293, the Intellectual
Property Code of the Philippines, which defines a "trademark" as
"any visible sign capable of distinguishing goods." In Philippine
jurisprudence, the function of a trademark is to point out distinctly
the origin or ownership of the goods to which it is affixed; to secure
to him, who has been instrumental in bringing into the market a
superior article of merchandise, the fruit of his industry and skill;
to assure the public that they are procuring the genuine article; to
prevent fraud and imposition; and to protect the manufacturer
against substitution and sale of an inferior and different article as
his product.
Modern authorities on trademark law view trademarks as
performing three distinct functions: (1) they indicate origin or
ownership of the articles to which they are attached; (2) they
guarantee that those articles come up to a certain standard of
quality; and (3) they advertise the articles they symbolize.
Archaeological discoveries of ancient Greek and Roman
inscriptions on sculptural works, paintings, vases, precious stones,
glassworks, bricks, etc. reveal some features which are thought to
be marks or symbols. These marks were affixed by the creator or
maker of the article, or by public authorities as indicators for the
payment of tax, for disclosing state monopoly, or devices for the
settlement of accounts between an entrepreneur and his workmen.
In the Middle Ages, the use of many kinds of marks on a variety of
goods was commonplace. Fifteenth century England saw the
compulsory use of identifying marks in certain trades. There were
the baker's mark on bread, bottlemaker's marks, smith's marks,
tanner's marks, watermarks on paper, etc. Every guild had its own
mark and every master belonging to it had a special mark of his
own. The marks were not trademarks but police marks
compulsorily imposed by the sovereign to let the public know that
the goods were not "foreign" goods smuggled into an area where
the guild had a monopoly, as well as to aid in tracing defective work
or poor craftsmanship to the artisan. For a similar reason,
merchants also used merchants' marks. Merchants dealt in goods
acquired from many sources and the marks enabled them to
identify and reclaim their goods upon recovery after shipwreck or
piracy.
With constant use, the mark acquired popularity and became
voluntarily adopted. It was not intended to create or continue
monopoly but to give the customer an index or guarantee of
quality. It was in the late 18th century when the industrial
revolution gave rise to mass production and distribution of
consumer goods that the mark became an important
instrumentality of trade and commerce. By this time, trademarks
did not merely identify the goods; they also indicated the goods to
be of satisfactory quality, and thereby stimulated further purchases
by the consuming public. Eventually, they came to symbolize the
goodwill and business reputation of the owner of the product and
became a property right protected by law. The common law
developed the doctrine of trademarks and tradenames "to prevent
a person from palming off his goods as another's, from getting
another's business or injuring his reputation by unfair means, and,
from defrauding the public." Subsequently, England and the
United States enacted national legislation on trademarks as part of
the law regulating unfair trade. It became the right of the
trademark owner to exclude others from the use of his mark, or of a
confusingly similar mark where confusion resulted in diversion of
trade or financial injury. At the same time, the trademark served as
a warning against the imitation or faking of products to prevent the
imposition of fraud upon the public.
Today, the trademark is not merely a symbol of origin and
goodwill; it is often the most effective agent for the actual creation
and protection of goodwill. It imprints upon the public mind an
anonymous and impersonal guaranty of satisfaction, creating a
desire for further satisfaction. In other words, the mark actually
sells the goods. The mark has become the "silent salesman," the
conduit through which direct contact between the trademark
owner and the consumer is assured. It has invaded popular culture
in ways never anticipated that it has become a more convincing
selling point than even the quality of the article to which it
refers. In the last half century, the unparalleled growth of industry
and the rapid development of communications technology have
enabled trademarks, tradenames and other distinctive signs of a
product to penetrate regions where the owner does not actually
manufacture or sell the product itself. Goodwill is no longer
confined to the territory of actual market penetration; it extends to
zones where the marked article has been fixed in the public mind
through advertising. Whether in the print, broadcast or electronic
communications medium, particularly on the Internet, advertising
has paved the way for growth and expansion of the product by
creating and earning a reputation that crosses over borders,
virtually turning the whole world into one vast marketplace.
Intellectual and industrial property rights cases are not simple
property cases. Trademarks deal with the psychological function of
symbols and the effect of these symbols on the public at
large. Trademarks play a significant role in communication,
commerce and trade, and serve valuable and interrelated business
functions, both nationally and internationally. For this reason, all
agreements concerning industrial property, like those on
trademarks and tradenames, are intimately connected with
economic development. Industrial property encourages
investments in new ideas and inventions and stimulates creative
efforts for the satisfaction of human needs. They speed up transfer
of technology and industrialization, and thereby bring about social
and economic progress. These advantages have been
acknowledged by the Philippine government itself. The Intellectual
Property Code of the Philippines declares that "an effective
intellectual and industrial property system is vital to the
development of domestic and creative activity, facilitates transfer
of technology, it attracts foreign investments, and ensures market
access for our products.


3. Jessie Ching v. William Salinas, G.R. 161295, June 29,
2005. - Kristina
Title: Jessie Ching vs. William Salinas
Concept/Topic: Definitions; differentiation among
patent, trademark and copyright; utility model;
copyright; works entitled to protection


Facts
Petitioner = Jessie G. Ching who is the owner and general
manager of Jeshicris Manufacturing Co., the maker and
manufacturer of a Utility Model, described as "Leaf Spring
Eye Bushing for Automobile" made up of plastic
Respondents = William Salinas, Sr. and the officers and
members of the Board of Directors of Wilaware Product
Corporation alleged to be reproducing and distributing the
model
September 4, 2001: Ching and Joseph Yu were issued by the
National Library Certificates of Copyright Registration and
Deposit of the work described as "Leaf Spring Eye Bushing
for Automobile
September 20, 2001: Ching requested the NBI for assistance
for the apprehension and prosecution of illegal
manufacturers, producers and/or distributors of the works
NBI filed applications for search warrants in the RTC of
Manila against respondents. The application sought the
seizure of the following items:
o Undetermined quantity of Leaf spring eye bushing
for automobile that are made up of plastic
polypropylene and of polyvinyl chloride plastic;
o Undetermined quantity of Vehicle bearing cushion
that is made up of polyvinyl chloride plastic;
o Undetermined quantity of Dies and jigs, patterns
and flasks used in the manufacture/fabrication of
items above;
o Evidences of sale which include delivery receipts,
invoices and official receipts
The RTC issued the search warrant; the NBI seized the
following items:
o Leaf Spring eye bushing: Plastic Polypropylene,
Polyvinyl Chloride Plastic, Vehicle bearing cushion
o Diesel Molds
Respondents moved to quash the search warrant on the
ground that the copyright registrations were issued in
violation of the IP Law because:
o the subject matter of the registrations are not artistic
or literary;
o the subject matter of the registrations are not
original;
o they are the proper subject of a patent, not copyright
Petitioner opposed the motion saying that the court which
issued the search warrant was not the proper forum to
contest the copyright registration
RTC quashed the search warrant; it ruled that the work
covered by the copyright pertained to solutions to technical
problems
Petitioners filed a petition for certiorari before the CA which
dismissed the petition
Petitioners filed the petition for review on certiorari before
the SC.
Issue(s):
1. WON the RTC had the jurisdiction to resolve the case/issue
the search warrants? YES
2. WON the work in question is a proper subject of a
copyright? NO
Petr:
1. The revocation of his copyright certificates should be raised
in a direct action and not in a search warrant proceeding
2. The determination of probable cause to justify the issuance of
a search warrant does not concern the issue of whether or not
the alleged work is copyrightable. The issue of probable cause
should be resolved without invalidating his copyright
3. Assuming that the trial court may resolve the validity of his
copyright in a proceeding to quash a search warrant, the RTC
committed a grave abuse of its discretion when it declared that
his works are not copyrightable in the first place because under
Section 172.1(h) of the IP Law, literary and artistic works
include original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial design
and other works of applied art
4. The law does not provide that the intended use or use in
industry of an article eligible for patent bars or invalidates its
registration under the Law on Copyright
Resp:
1. The work of the petitioner is essentially a technical solution
to the problem of wear and tear in automobiles, the
substitution of materials, i.e., from rubber to plastic matter of
polyvinyl chloride, an oil resistant soft texture plastic material
strong enough to endure pressure brought about by the
vibration of the counter bearing and thus brings bushings. Such
work may be the subject of a patent, and not of a copyright
2. Certificates issued by the National Library are only
certifications that, at a point in time, a certain work was
deposited in the said office. The registration of copyrights does
not provide for automatic protection
Held: Petition DENIED.
Ratio:
The RTC had jurisdiction to delve into and resolve the issue
whether the petitioners utility models are copyrightable
and, if so, whether he is the owner of a copyright over the
said models. The RTC was duty-bound to determine
whether probable cause existed in accordance with the
Rules of Court.
o Solid Triangle Sales Corporation v. The Sheriff of
RTC QC, Br. 93,19: In the determination of probable
cause, the court must necessarily resolve whether or
not an offense exists to justify the issuance of a
search warrant or the quashal of one already issued
by the court.
o For the RTC to determine whether the crime for
infringement under the IP Law is committed, the
petitioner-applicant was burdened to prove that (a)
respondents Jessie Ching and Joseph Yu were the
owners of copyrighted material; and (b) the
copyrighted material was being copied and
distributed by the respondents. Thus, the
ownership of a valid copyright is essential. x x
x The applicant must demonstrate the existence and
the validity of his copyright because in the absence of
copyright protection, even original creation may be
freely copied.
Leaf Spring Eye Bushing for Automobile and Vehicle
Bearing Cushion are not literary or artistic works. They are
not intellectual creations in the literary and artistic domain,
or works of applied art. They are certainly not ornamental
designs or one having decorative quality or value. (Pls refer
to Section 172.1(h) and Section 171.10 of IP Law)
o As gleaned from the specifications appended to the
application for a copyright certificate filed by the
petitioner, the said Leaf Spring Eye Bushing for
Automobile is merely a utility model described as
comprising a generally cylindrical body having a co-
axial bore that is centrally located and provided with
a perpendicular flange on one of its ends and a
cylindrical metal jacket surrounding the peripheral
walls of said body, with the bushing made of plastic
that is either polyvinyl chloride or polypropylene.
Likewise, the Vehicle Bearing Cushion is illustrated
as a bearing cushion comprising a generally semi-
circular body having a central hole to secure a
conventional bearing and a plurality of ridges
provided therefore, with said cushion bearing being
made of the same plastic materials.
Focus of copyright is the usefulness of the artistic design,
and not its marketability. The central inquiry is whether the
article is a work of art. Works for applied art include all
original pictorials, graphics, and sculptural works that are
intended to be or have been embodied in useful article
regardless of factors such as mass production, commercial
exploitation, and the potential availability of design patent
protection.
While works of applied art, original intellectual, literary and
artistic works are copyrightable, useful articles and works of
industrial design are not. A useful article may be
copyrightable only if and only to the extent that such design
incorporates pictorial, graphic, or sculptural features that
can be identified separately from, and are capable of
existing independently of the utilitarian aspects of the
article.
o In this case, the petitioners models are not works of
applied art, nor artistic works. They are utility
models, useful articles, albeit with no artistic design
or value. (Pls read case for the description of the
model)
o A utility model is a technical solution to a problem in
any field of human activity which is new and
industrially applicable. It may be, or may relate to, a
product, or process, or an improvement of any of the
aforesaid. A utility model refers to an invention in
the mechanical field. This is the reason why its object
is sometimes described as a device or useful object. A
utility model varies from an invention, for which a
patent for invention is, likewise, available, on at least
three aspects: (1) the requisite of "inventive step" in a
patent for invention is not required; (2) the
maximum term of protection is only seven years
compared to a patent which is twenty years, both
reckoned from the date of the application; and (3)
the provisions on utility model dispense with its
substantive examination and prefer for a less
complicated system.
Neither are we to regard the Leaf Spring Eye Bushing and
Vehicle Bearing Cushion as included in the catch-all phrase
"other literary, scholarly, scientific and artistic works" in
Section 172.1(a) of the IP Law. Applying the principle of
ejusdem generis, the Leaf Spring Eye Bushing and Vehicle
Bearing Cushion are not copyrightable, being not of the
same kind and nature as the works enumerated in Section
172 of the IP Law.
That the works of the petitioner may be the proper subject
of a patent does not entitle him to the issuance of a search
warrant for violation of copyright laws.
o Kho v. Court of Appeals and Pearl & Dean (Phil.),
Incorporated v. Shoemart, Incorporated: The Court
ruled that "these copyright and patent rights are
completely distinct and separate from one another,
and the protection afforded by one cannot be used
interchangeably to cover items or works that
exclusively pertain to the others."
o Definitions:
(1) A trademark is any visible sign capable of
distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a
stamped or marked container of goods. In relation
thereto, a trade name means the name or
designation identifying or distinguishing an
enterprise.
(2) Copyright is confined to literary and artistic
works which are original intellectual creations in the
literary and artistic domain protected from the
moment of their creation.
(3) Patentable inventions refer to any technical
solution of a problem in any field of human activity
which is new, involves an inventive step and is
industrially applicable.
4. Hoffman vs. Le Traunik, 209 Federal Reporter 375, 379
(1913).-Poy
HOFFMAN v. LE TRAUNIK
District Court, N.D. New York
209 F. 375; 1913 U.S. Dist. LEXIS 1116
December 8, 1913
CASE SUMMARY
PROCEDURAL POSTURE: Complainant writer brought suit for a preliminary
injunction against defendant performers for alleged copyright violations regarding
certain parts of monologues.
OVERVIEW: Complainant had copyrighted certain monologues in parts. Each part
was a separate and distinct monologue. The monologues came within no definition
of "literature" proper but came under the heading of light literature. Defendants
began reciting their own monologue similar in nature to complainant's. Complainant
was denied an injunction against defendants for alleged copyright violations. So long
as defendants averred that the expressions were not new with complainant, but were
common property and used on the stage prior to the writing of complainant's
monologues, a preliminary injunction could not issue. No public interest was
involved, and any damage to complainant would not have been very serious.
Defendants did not copy substantially the plan, arrangement, or combination of
materials found in complainant's monologues.
OUTCOME: The court denied the injunction because complainant did not prove
that the expressions in the monologue were original, and the situation was not
serious enough to warrant an injunction before a full trial on the merits.



CORE TERMS: monologue, originated, poor man, copyrighted,
drink, eggs, misrepresentatives, aggravation, sterilized, pleasure,
sentences, recited, undress, streets, navy, common property,
preliminary injunction, substantial part, childhood, speakers,
weather, walking, copying, star, boat, meat, wives, moving papers,
dear friends, original plan
If asked about the monologue being copyrighted, just answer: Sir,
its a sequence of 14 monologues, described by the court to be
gags or jokes that seem to connote political overtones with titles
such as the German Senator or the German politician


Doctrines:
Civil Procedure > Remedies > Injunctions > Preliminary &
Temporary Injunctions
HN1
The rule is that preliminary injunctions will not issue except in the clearest cases.



Copyright Law > Subject Matter > Statutory Copyright & Fixation >
Originality Requirements > General Overview
HN2
To be entitled to be copyrighted, the composition must be original, meritorious,
and free from illegality or immorality.



Copyright Law > Ownership Interests > General Overview
Copyright Law > Subject Matter > Statutory Copyright & Fixation >
Originality Requirements > General Overview
HN3
A work, in order to be copyrighted, must be original in the sense that the author
has created it by his own skill, labor, and judgment, without directly copying or
evasively imitating the work of another.



Copyright Law > Subject Matter > Statutory Copyright & Fixation >
Originality Requirements > General Overview
HN4
A new and original plan, arrangement, or combination of materials will entitle the
author to a copyright therein, whether the materials themselves be new or old.



Copyright Law > Civil Infringement Actions > Elements > Copying
by Defendants
Copyright Law > Civil Infringement Actions > Presumptions &
Requirements > General Overview
HN5
Copying the whole or a substantial part of a copyrighted work constitutes, and is
an essential element of, infringement. It is not confined to literal repetition or
reproduction, but includes also the various modes in which the matter of any work
may be adopted, imitated, transferred, or reproduced with more or less colorable
alteration to disguise the piracy. But, on the principle of de minimis non curat lex,
it is necessary that a substantial part of the copyrighted work be taken.



Civil Procedure > Remedies > Injunctions > Preliminary &
Temporary Injunctions
Copyright Law > Civil Infringement Actions > General Overview
Evidence > Procedural Considerations > Burdens of Proof >
General Overview
HN6
It must be established by the complainant that works were original with the person
accused of copyright infringement. The burden is on him to show this, and with
complainant making affidavit one way and the defendants the other, and a sworn
answer also interposed, a clear and satisfactory case on such a subject is not made
for the drastic use of a preliminary injunction.


5. Air Philippines Corporation v. Pennswell, Inc., G.R. 172835,
December 13, 2007. - Dane
Air Philippines Corporation v. Pennswell, Inc.
(G.R. 172835, December 13, 2007, CHICO-NAZARIO, J)
Topic: Trade Secrets
FACTS:
Parties:
o Petitioner Air Philippines: domestic corporation for
air transportation services
o Respondent Pennswell, Inc: manufacturer and
seller of industrial chemicals, solvents, and special
lubricants
Pennswell delivered and sold to Air Philippines sundry goods in
trade, covered by 4 Sales Invoices with corresponding Purchase
Orders
o AirPhils total outstanding obligation = P449,864.98
with 14% per annum interest until full payment
o AirPhil failed to pay
Pennswell filed a Complaint for a Sum of Money against AirPhil
o Answer by AirPhil alleged that refusal to pay was
with valid and justifiable reasons
Pennswell defraud it of P592,000.00 for its
previous sale of four items. The items were
misrepresented (by alteration of names and
labels of goods) as belonging to a new line
but truly are identical with products AirPhil
had previously purchased from Pennswell
The products: Excellent Rust Corrosion,
Connector Grease, Electric Strength
Protective Coating, and Anti-Seize
Compound, are identical with its Anti-Friction
Fluid, Contact Grease, Thixohtropic Grease,
and Dry Lubricant, respectively thus, if
Pennswell was forthright about the identical
character of the products, AirPhil would not
have purchased the items complained of
When fraud was known, conference was held.
Agreement: respondent would return to
petitioner the amount it previously paid
Petitioner was surprised when it received a
letter from the respondent, demanding
payment of the amount of P449,864.94
(subject matter Complaint for Collection of a
Sum of Money against petitioner)
Petitioner filed a Motion to Compel respondent to give a detailed
list of the ingredients and chemical components of the following
products: a) Contact Grease and Connector Grease; (b)
Thixohtropic Grease and Di-Electric Strength Protective Coating;
and (c) Dry Lubricant and Anti-Seize Compound
o RTC granted petitioners motion. [Respondent]
Pennswell, Inc. is given fifteen (15) days from receipt
of this Order to submit to [petitioner] Air Philippines
Corporation the chemical components of all the
above-mentioned products for chemical
comparison/analysis.
Respondent sought reconsideration of THE Order, contending that
o It cannot be compelled to disclose the chemical
components sought because the matter is
confidential its products are specialized lubricants,
and if their components were revealed, its business
competitors may easily imitate and market the same
types of products, in violation of its proprietary rights
and to its serious damage and prejudice
o What petitioner endeavored to inquire upon
constituted a trade secret which respondent cannot
be forced to divulge
RTC: reversed itself Order found chemical components are
respondents trade secrets and are privileged in character
o Petitioner filed a Petition for Certiorari under Rule
65 with the Court of Appeals CA: denied the
Petition and affirmed the Order reasoning that to
compel respondent to reveal in detail the list of
ingredients of its lubricants is to disregard
respondents rights over its trade secrets given that
the chemical formulation of respondents products
and their ingredients are embraced within the
meaning of trade secrets
o MR denied
ISSUE: Whether or not the chemical components or ingredients of
respondents products are trade/industrial secrets that are not
subject to compulsory disclosure
Petitioners contention:
It has a right to obtain the chemical composition and ingredients of
respondents products to conduct a comparative analysis of its
products\
The matters are not trade secrets, which are protected by law and
beyond public scrutiny
RULING: Affirm CA; rule against petitioner
A trade secret is
o a plan or process, tool, mechanism or compound
known only to its owner and those of his employees
to whom it is necessary to confide it
o includes, a secret formula or process not patented,
but known only to certain individuals using it in
compounding some article of trade having a
commercial value
o may consist of any formula, pattern, device, or
compilation of information that:
is used in one's business; and
gives the employer an opportunity to obtain an
advantage over competitors who do not
possess the information
o Generally, a trade secret is a process or device
intended for continuous use in the operation of the
business, for example, a machine or formula, but
can be a price list or catalogue or specialized
customer list
o Indubitable that trade secrets constitute proprietary
rights The inventor, discoverer, or possessor of a
trade secret or similar innovation has rights therein
which may be treated as property
ordinarily an injunction will be granted to
prevent the disclosure of the trade secret by
one who obtained the information "in
confidence" or through a "confidential
relationship"
o According to American jurisprudence, the following
are factors considered in determining if an
information is a trade secret:
the extent to which the information is known
outside of the employer's business;
the extent to which the information is known by
employees and others involved in the
business;
the extent of measures taken by the employer
to guard the secrecy of the information;
the value of the information to the employer
and to competitors;
the amount of effort or money expended by the
company in
developing the information; and
the extent to which the information
could be easily or readily obtained
through an independent source
o In Cocoland Development Corporation v. NLRC
(involving the legality of an employees termination
on the ground of unauthorized disclosure of trade
secrets): any determination by management as to
the confidential nature of technologies, processes,
formulae or other so-called trade secrets must have
a substantial factual basis, which can pass judicial
scrutiny
The chemical composition, formulation, and ingredients of
respondents special lubricants are trade secrets within the
contemplation of the law
o Respondent was established to engage in the
business of general manufacturing and selling of,
and to deal in, distribute, sell or otherwise dispose of
goods, wares, merchandise, products, including but
not limited to industrial chemicals, solvents,
lubricants, acids, alkalies, salts, paints, oils,
varnishes, colors, pigments and similar preparations,
among others
o Unmistakable that the manufacture and production
of respondents products proceed from a formulation
of a secret list of ingredients
The ingredients constitute the very fabric of
respondents production and business. No
doubt, the information is also valuable to
respondents competitors
To compel its disclosure is to cripple
respondents business, given that if the
chemical composition of respondents
lubricants are opened to public scrutiny, it will
stand to lose the backbone on which its
business is founded and would result in
nothing less than the probable demise of
respondents business
Thus, respondents proprietary interest over
the ingredients which it had developed and
expended money and effort on is
incontrovertible and that the detailed
ingredients sought to be revealed have a
commercial value to respondent
This information grants it a competitive
advantage and there was deliberate intent on
the part of the respondent to keep the
information confidential and not available to
the prying public
Section 1, Rule 27 of the Rules of Court allows parties to
inspect documents or things upon a showing of good cause
before the court in which an action is pending
o However, the documents, papers, books,
accounts, letters, photographs, objects or tangible
things that may be produced and inspected should
not be privileged
o Moreover, while Section 24 of Rule 130 of the
Rules of Court enumerates disqualification of
testimony by reason of privileged communication this
listing of privileged matters is not exclusive
other privileged matters not mentioned by Rule
130 are
editors may not be compelled to
disclose the source of published news;
voters may not be compelled to
disclose for whom they voted;
trade secrets;
information contained in tax census
returns; and (d) bank deposits
The ff are laws that provide protection for trade secrets:
o Interim Rules of Procedure on Government
Rehabilitation: that the court may issue an order to
protect trade secrets or other confidential research,
development, or commercial information belonging
to the debtor
o Securities Regulation Code: Securities and
Exchange Commission is not required or authorized
to require the revelation of trade secrets or
processes in any application, report or document
filed with the Commission, thus the SEC can deny a
request of any member of the general public to have
access to any information filed with it
o Revised Penal Code also protects trade secrets
under the following articles:
Art. 291. Revealing secrets with abuse of
office. The penalty of arresto mayor and a
fine not exceeding 500 pesos shall be
imposed upon any manager, employee or
servant who, in such capacity, shall learn the
secrets of his principal or master and shall
reveal such secrets.
Art. 292. Revelation of industrial secrets.
The penalty of prision correccional in its
minimum and medium periods and a fine not
exceeding 500 pesos shall be imposed upon
the person in charge, employee or workman
of any manufacturing or industrial
establishment who, to the prejudice of the
owner thereof, shall reveal the secrets of the
industry of the latter.
o Republic Act No. 8424, National Internal Revenue
Code of 1997
SECTION 278. Procuring Unlawful Divulgence
of Trade Secrets. - Any person who causes or
procures an officer or employee of the Bureau
of Internal Revenue to divulge any
confidential information regarding the
business, income or inheritance of any
taxpayer, knowledge of which was acquired
by him in the discharge of his official duties,
and which it is unlawful for him to reveal, and
any person who publishes or prints in any
manner whatever, not provided by law, any
income, profit, loss or expenditure appearing
in any income tax return, shall be punished by
a fine of not more than two thousand pesos
(P2,000), or suffer imprisonment of not less
than six (6) months nor more than five (5)
years, or both
o Republic Act No. 6969, Toxic Substances and
Hazardous and Nuclear Wastes Control Act of 1990,
limits the right of the public to have access to
records, reports or information concerning chemical
substances and mixtures including safety data
submitted and data on emission or discharge into the
environment, if the matter is confidential such that it
would divulge trade secrets, production or sales
figures; or methods, production or processes unique
to such manufacturer, processor or distributor; or
would otherwise tend to affect adversely the
competitive position of such manufacturer, processor
or distributor
Jurisprudence:
o intellectual and industrial property rights cases are
not simple property cases
all agreements concerning intellectual property
are intimately connected with economic
development and the protection of industrial
property encourages investments in new
ideas and inventions and stimulates creative
efforts for the satisfaction of human needs
It speeds up transfer of technology and
industrialization, and thereby bring about
social and economic progress
o acknowledged the private character of trade
secrets
trade secrets and banking transactions are
among the recognized restrictions to the right
of the people to information as embodied in
the Constitution
trade secret is exempted from compulsory
disclosure
o In labor cases: protectionist stance towards the
trade secrets of employers
SC upheld the validity of the policy of a
pharmaceutical company prohibiting its
employees from marrying employees of any
competitor company, on the rationalization
that the company has a right to guard its
trade secrets, manufacturing formulas,
marketing strategies and other confidential
programs and information from competitors
Petitioner cannot rely on Section 77[43] of Republic Act
7394, Consumer Act of the Philippines, to compel
respondent to reveal the chemical components of its
products
o GR: all consumer products domestically sold,
whether manufactured locally or imported, shall
indicate their general make or active ingredients in
their respective labels of packaging
o However, the law does not apply to respondent
because respondents specialized lubricants are not
consumer products
Consumer products, as defined by said law
refers to goods, services and credits, debts or
obligations which are primarily for personal,
family, household or agricultural purposes,
which shall include, but not be limited to,
food, drugs, cosmetics, and devices
here, respondents products are not intended
for personal, family, household or agricultural
purposes but are for industrial use,
specifically for the use of aircraft propellers
and engines
Moreover, petitioners argument that Republic Act No. 8203, or the
Special Law on Counterfeit Drugs, requires the disclosure of the
active ingredients of a drug is erroneous
o Respondents products are outside the scope of
the cited law since they are not drugs as defined by
said law referring to any chemical compound or
biological substance, other than food, that is
intended for use in the treatment, prevention or
diagnosis of disease in man or animals
Findings of RTC and CA show that the chemical formulation of
respondents products is not known to the general public and is
unique only to it
o Factual findings of the trial court when affirmed by
the Court of Appeals, are binding and conclusive on
the Supreme Court
While the privilege is not absolute and the trial court may compel
disclosure where it is indispensable for doing justice there is no
showing why respondents trade secrets should be excepted from
the rule on privilege
o The revelation of respondents trade secrets
serves no better purpose to the disposition of the
main case pending with the RTC, which is on the
collection of a sum of money since petitioner
received respondents goods in trade in the normal
course of business
o Trade secrets should receive greater protection
from discovery, because they derive economic value
from being generally unknown and not readily
ascertainable by the public and petitioner did not
show a compelling reason to lift the veil of
confidentiality which shields respondents trade
secrets
Dispositive: Petition is DENIED. The Decision dated 16 February
2006, and the Resolution dated 25 May 2006, of the Court of
Appeals in CA-G.R. SP No. 86329 are AFFIRMED. No costs.


6. Elidad Kho v. Court of Appeals, G.R. No. 116758, March 19,
2002. - Kite
Concept/Topic: Trademark
Facts:
Kho filed a complaint for injunction and damages with
preliminary injunction against Summerville and Ang
Tiam Chay
Kho is doing business under KEC Cosmetics Lab, the
registered owner of the copyrights Chin Chun Su and
Oval Facial Cream Container/Case. She has patent rights
on Chin Chun Su & device and Chin Chun Su for
medicated cream after purchasing the same from
Quintin Cheng, the registered owner in the
Supplemental Register of the Phil. Patent Office.
Summerville advertised and sold the same products
under the name Chin Chun Su, in similar containers
thereby misleading the public, and resulting in the
decline of Khos business sales and income = copyright
and patent infringement
Summerville: exclusive and authorized importer, re-
packer and distributor of Chin Chun Su products
manufactured by Shun Yi Taiwan
Trial Court granted preliminary injunction. CA reversed
Trial court barred Kho from using the trademark Chin
Chun Su but recognized the copyright over the oval
shaped container of her beauty cream.


Issue: WON copyright and patent over the name and
container of a beauty cream product would entitle the
registrant to the use and ownership over the same to the
exclusion of others? No


Ruling:
Trademark, copyright and patents are different
intellectual property rights that cannot be interchanged
with one another
Trademark is any visible sign capable of distinguishing
the goods (trademark) or services (service mark) of an
enterprise and shall include a stamped or marked
container of goods.
Trade name means the name or designation identifying
or distinguishing an enterprise
Scope of copyright is confined to literary and artistic
works which are original intellectual creations in the
literary and artistic domain protected from the moment
of their creation.
Patentable inventions any technical solution of a
problem in any field of human activity which is new,
involves an inventive step and is industrially applicable
Kho has no right to support her claim for the exclusive
use of the subject trade name and its container
The name and container of a beauty cream product are
proper subjects of a trademark.
To be entitled to exclusively use the same in the sale of
the beauty cream product, the user must sufficiently
prove that she registered or used it before anybody else
did.
Khos copyright and patent registration of the name and
container would not guarantee her the right to the
exclusive use of the same for the reason that they are not
appropriate subjects of said intellectual rights.
Preliminary injunction cannot be issued. Kho has not
proven that she has registered a trademark thereto or
used the same before anyone did.
R58.1, Revised Rules of Civ Pro: elements for issuance of
a writ of preliminary injunction
o Proof that the applicant is entitled to the relief
demanded
o The whole or part of such relief consists in
restraining the commission or continuance of the act
or acts complained of, either for a limited period or
perpetually


7. Berris Agricultural Co. v. Abyadang, G.R. 183404, October
13, 2010. - Michael
Concept/Topic: Trademark, Prior use, Priority Date,
Rights of Registered Trademark Holder, Confusion


Facts:
Abyadang filed a trademark application with the IPO for the
mark "NS D-10 PLUS" for use in connection with Fungicide (Class
5) with active ingredient 80% Mancozeb.
Berris Agricultural Co., Inc. (Berris), filed with the IPO Bureau
of Legal Affairs (IPO-BLA) a Verified Notice of Opposition against
the mark under application allegedly because "NS D-10 PLUS" is
similar and/or confusingly similar to its registered trademark "D-
10 80 WP," also used for Fungicide (Class 5) with active ingredient
80% Mancozeb.
Director Estrellita Beltran-Abelardo of the IPO-BLA decided in
favor of Berris. However, Abyadang appealed to the CA which
reversed the decision.
Issues:
1. W/N Berris is a prior user with the rights of one. YES
2. W/N there exists confusing similarity between the marks.
YES
3. W/N the cancellation of Petitioners duly registered and
validly existing trademark in the absence of a properly filed
Petition for Cancellation before the Intellectual Property Office is
not in accord with the Intellectual Property Code and applicable
Decisions of the Supreme Court. NO RULING
Held:
1)
Adoption of the mark alone does not suffice. One may make
advertisements, issue circulars, distribute price lists on certain
goods, but these alone will not inure to the claim of ownership of
the mark until the goods bearing the mark are sold to the public in
the market. Accordingly, receipts, sales invoices, and testimonies of
witnesses as customers, or orders of buyers, best prove the actual
use of a mark in trade and commerce during a certain period of
time.
Berris presented the following evidence: (1) its trademark
application dated November 29, 2002 with Application No. 4-
2002-0010272; (2) its IPO certificate of registration dated October
25, 2004 and July 8, 2004 as the date of registration; (3) a
photocopy of its packaging bearing the mark "D-10 80 WP"; (4)
photocopies of its sales invoices and official receipts; and (5) its
notarized DAU dated April 23, 2003, stating that the mark was first
used on June 20, 2002, and indicating that, as proof of actual use,
copies of official receipts or sales invoices of goods using the mark
were attached as Annex "B."
Abyadangs proofs consisted of the following: (1) a photocopy of
the packaging for his marketed fungicide bearing mark "NS D-10
PLUS"; (2) Abyadangs Affidavit dated February 14, 2006, stating
among others that the mark "NS D-10 PLUS" was his own creation
derived from: N for Norvy, his name; S for Soledad, his wifes
name; D the first letter for December, his birth month; 10 for
October, the 10th month of the year, the month of his business
name registration; and PLUS to connote superior quality; that
when he applied for registration, there was nobody applying for a
mark similar to "NS D-10 PLUS" (3) Certification dated December
19, 2005 issued by the FPA, stating that "NS D-10 PLUS" is owned
and distributed by NS Northern Organic Fertilizer, registered with
the FPA since May 26, 2003, and had been in the market since July
30, 2003;
Berris is the prior user of the mark. Berris was able to establish
that it was using its mark "D-10 80 WP" since June 20, 2002, even
before it filed for its registration with the IPO on November 29,
2002, as shown by its DAU which was under oath and notarized,
bearing the stamp of the Bureau of Trademarks of the IPO on April
25, 2003, and the DAU, being a notarized document, especially
when received in due course by the IPO, is evidence of the facts it
stated and has the presumption of regularity, entitled to full faith
and credit upon its face. The DAU is supported by the Certification
dated April 21, 2006 issued by the Bureau of Trademarks that
Berris mark is still valid and existing.
2)
According to Section 123.1(d) of R.A. No. 8293, a mark cannot
be registered if it is identical with a registered mark belonging to a
different proprietor with an earlier filing or priority date, with
respect to: (1) the same goods or services; (2) closely related goods
or services; or (3) near resemblance of such mark as to likely
deceive or cause confusion.
Comparing Berris mark "D-10 80 WP" with Abyadangs mark
"NS D-10 PLUS," as appearing on their respective packages, one
cannot but notice that both have a common component which is
"D-10." On Berris package, the "D-10" is written with a bigger font
than the "80 WP." Admittedly, the "D-10" is the dominant feature
of the mark. The "D-10," being at the beginning of the mark, is
what is most remembered of it. Although, it appears in Berris
certificate of registration in the same font size as the "80 WP," its
dominancy in the "D-10 80 WP" mark stands since the difference
in the form does not alter its distinctive character.
Dominancy Test: Abyadangs "NS D-10 PLUS" is similar to
Berris "D-10 80 WP," that confusion or mistake is more likely to
occur. Both pertain to fungicide with 80% Mancozeb and belong to
the same classification of goods under R.A. No. 8293. Both
depictions of "D-10," as found in both marks, are similar in size,
such that this portion is what catches the eye of the purchaser.
Holistic Test: The packaging is the same type of material (foil
type) and have identical color schemes (red, green, and white); and
the marks are both predominantly red in color, with the same
phrase "BROAD SPECTRUM FUNGICIDE" written underneath.
3)
Inasmuch as the ownership of the mark D-10 80 WP fittingly
belongs to Berris, and because the same should not have been
cancelled by the CA, we consider it proper not to belabor anymore
the issue of whether cancellation of a registered mark may be done
absent a petition for cancellation.


8. Manzano v. Court of Appeals G.R. 113388, September 5,
1997 - Arianne
TOPICS: patents, novelty, registration, patent office
presumption of regularity
FACTS: The petitioner filed an action for the cancellation of
Letters of Patent covering a gas burner registered in the
name of responded Melecia Madolaria who subsequently
assigned the letter of patent to United Foundry. Petitioner
alleged that the private respondent was not the original, true
and actual inventor nor did she derive her rights from the
original, true and actual inventor of the utility model covered
by the letter of patent; further alleged that the utility model
covered by the subject letter of patent had been known or
used by others in the Philippines for than one (1) year before
she filed her application for letter of patent on Dec 1979. For
failure to present substantive proof of her allegations, the
lower court and Court of Appeals denied the action for
cancellation.
ISSUE: Whether or not the respondent court wrongfully
denied the cancellation of letter of patent registered under
the private respondent.
HELD: No. The issuance of such patent creates a
presumption which yields only to clear and cogent evidence
that the patentee was the original and first inventor. The
burden of proving want of novelty is on him who avers it and
the burden is a heavy one which is met only by clear and
satisfactory proof which overcomes every reasonable doubt.
Clearly enough, the petitioner failed to present clear and
satisfactory proof to overcome every reasonable doubt to
afford the cancellation of the patent to the private
respondent.
ALSO:
The primary purpose of the patent system is not the
reward of the individual but the advancement of the
arts and sciences. The function of a patent is to add
to the sum of useful knowledge and one of the
purposes of the patent system is to encourage
dissemination of information concerning discoveries
and inventions.
This is a matter which is properly within the
competence of the Patent Office the official action of
which has the presumption of correctness and may
not be interfered with in the absence of new evidence
carrying thorough conviction that the Office has
erred.
The element of novelty is an essential requisite of the
patentability of an invention or discovery. If a device
or process has been known or used by others prior to
its invention or discovery by the applicant, an
application for a patent therefor should be denied;
and if the application has been granted, the court, in
a judicial proceeding in which the validity of the
patent is drawn in question, will hold it void and
ineffective.
It has been repeatedly held that an invention must
possess the essential elements of novelty, originality
and precedence, and for the patentee to be entitled
to the protection the invention must be new to the
world.
i.Rubber Tire Wheel Co. v. Goodyear Co., 232 U.S.
413 (1914) - Kester
Topic: Patents, where the right to a patent attaches.
Facts:
The petitioners are the owners of the Grant Tire patent (No. 554,675)
issued February 18, 1896, for an improvement in rubber-tired wheels.
Circuit CA ruled that the patent was void for lack of novelty.
Upon the basis of the decree entered upon that decision, the respondent
instituted the present suit in the Southern District of Ohio to restrain
the petitioners from prosecuting suits for infringement against
the respondent's customers.
SC however subsequently ruled that the patent of Rubber Tire Wheel was
valid saying that the wheel had a tipping and reseating power.
Rubber Tire Wheel then sued a man named Doherty who bought rubber from
goodyear and made them into tires. Rubber Tire Wheel claims the Doherty
violated its patent.
Goodyear now wants to defend Doherty
The Circuit Court granted the preliminary injunction
Rubber Tire Wheel now appeals to the Supreme Court
The Grant tire is composed of three elements: (1) a channel or groove with
tapered or inclined sides, (2) a rubber tire with a described shape, adapted to
fit into the channel, and (3) a fastening device consisting of independent
retaining wires, which pass through the rubber tire and are placed in a
particular position.
Issue:
WON Goodyears customers can buy the grant tire structure (not grant
tire itself which is covered by the Rubber tire patent) and fashion them
into tires?
Held:
No. Under the doctrine of Kessler v. Eldred, the respondent
was entitled to make and sell the Grant structure, and to
have those who bought that structure from it unmolested in
taking title and in enjoying the rights of ownership.
The respondent also had the right to make and sell its
rubber without hindrance by the petitioners claiming under
the patent. The trade right of the respondent, however,
whether with respect to the complete structure or its
separate parts, is merely the right to have that which it
lawfully produces freely bought and sold without restraint
or interference.
It is a right which attaches to its product -- to a particular
thing -- as an article of lawful commerce, and it continues
only so long as the commodity to which the right applies
retains its separate identity. If that commodity is combined
with other things in the process of the manufacture of a new
commodity, the trade right in the original part as an article
of commerce is necessarily gone. So that, when other
persons become manufacturers on their own behalf,
assembling the various elements and uniting them so as to
produce the patented device -- a new article -- it is manifest
that the respondent cannot insist upon their being protected
from suit for infringement by reason merely of its right to
make and sell, and the fact of its having made and sold,
some component part of that article.
It must be able to go beyond a mere trade right in that
element, and to show itself to be entitled to have its
customers manufacture the patented structure. Thus, the
fallacy in the respondent's contention becomes apparent.
The decree gave the respondent no right to have others
make Grant tires. It could make and sell them, and it could
make and sell rubber; it could demand protection for its
trade rights in the commodities it produced. But it had no
transferable immunity in manufacture. The decree gave it
no privilege to demand that others should be allowed to
make and sell the patented structure in order that it might
have a market for its rubber.
The suit against Doherty was based upon his conduct in
constructing Grant tires. The fact that the respondent could
not be charged with liability as a participant in the
infringement thus alleged did not excuse him, and the
petitioners, in bringing the suit, did not violate any right of
the respondent.
9. Gorham V. Company V. White, 81 U. S. 511 (1871) - Mars
Gorham vs. White (1871)
Topic: Design Patent
Facts:
In July1861, Gorham & Co., obtained a patent for a new design for
the handles of tablespoons and forks, which under the name of the
"cottage pattern" became extremely popular -- the most successful
plain pattern, indeed, that had been in the market for many years.
Gorham & Co. subsequently transferred their patent to the Gorham
Manufacturing Company.
In 1867, one White obtained a patent for a design which he alleged to
be original with him for the same things -- the handles, namely, of
forks and spoons -- and in 1868 a patent for still another design.
Gorham Manufacturing Company accordingly filed a bill in the
district court to enjoin White from making and selling spoons and
forks under either of his patents.
Witnesses for Gorham (manufacturer of silverware, merchant
jewelers and designers from Tiffany and Co.): The essential features
are the same; seven out of ten customers who buy silverware would
consider them the same; that manufacturers as well as customers
would consider them the same; that the trade generally would so
consider them; that, though there are differences, they would not be
noticed without a critical examination; that they are one and the
same pattern. The White designs were intended to imitate the other,
and they are so nearly identical that ordinary purchasers of
silverware would mistake one for the other.
Testimony of Mr. Henry B. Renwick, who during the last sixteen or
seventeen years had frequently been examined as expert in the court:
[this testimony contains descriptions of the objects involved]
o White's patent of 1868 has increased concavity of outline in
the broad part or head of the handle.The contours of the
Gorham's articles and the articles manufactured by the
White are not only substantially but almost identically the
same.
o The Gorham articles and the articles manufactured by White
all have a threaded or reeded pattern round the edges, all
have a slight knob or boss at the point where there are small
shoulders marking the dividing line between the stem and
head of the handle, and all have knobbed ornaments near the
extreme end of the handle and adjacent to the pointed
projection which, in all of them, forms that end.
o Minor differences:1) The Gorham spoon has two threads
along the shank where Whites have only one, but that one is
of nearly equal width with the two and gives the same effect.
2) In the Gorham, the knobbed ornament at the shoulders is
connected with the outer thread, while in White's it is
connected with the inner thread; but these knobbed
ornaments in both are in the same place and have the same
general effect. 3) In the Gorham spoons, the knobbed
ornaments on the inner reed are at the head of the spoon
turned upwards and outwards. In White's, they are turned
downwards and inwards, and the reed is flattened out, but
the substantial shape or contour at the end of the spoon, and
the ornamentation thereof, by raised ornaments, partly
connected and partly unconnected with the threading, is
substantially the same in both.
Witnesses for White (jewelers, engravers, persons engaged in the
inspection of designs): The designs wer substantially different, both
in shape and design.
Testimony of Mr. Edward S. Renwick, an expert, for White: In the
Gorham design the stem of the handle, between the shoulders and
the bowl, has a second thread upon it, which is parallel with and
inside of the boundary thread. No such second thread is found in
White's. There are fifteen mechanical differences between the
Gorham design and White's, patented in 1867, and sixteen
differences between the Gorham design and that of White patented
in 1868.
DC: No infringement. [see original for DC decision because it was
very detailed on the comparison of the features of the two designs]
The test of a patent for a design is not the eye of an ordinary
observer. There could be no infringement unless there was
"substantial identity" "in view of the observation of a person versed
in designs in the particular trade in question -- of a person engaged
in the manufacture or sale of articles containing such designs -- of a
person accustomed to compare such designs one with another, and
who sees and examines the articles containing them side by side.
Issue: Whether there was substantial identity of designs (Yes)
The acts of Congress which authorize the grant of patents for designs
(e.g. Patent Act) were plainly intended to give encouragement to the
decorative arts. They contemplate not so much utility as appearance,
and that not an abstract impression or picture but an aspect given to
those objects mentioned in the acts.
The thing invented or produced, for which a patent is given, is that
which gives a peculiar or distinctive appearance to the manufacture
or article to which it may be applied or to which it gives form.
The law manifestly contemplates that giving certain new and original
appearances to a manufactured article may enhance its salable value,
may enlarge the demand for it, and may be a meritorious service to
the public.
The appearance may be the result of peculiarity of
configuration, or of ornament alone, or of both conjointly,
but in whatever way produced, it is the new thing or
product which the patent law regards.
To speak of the invention as a combination or process or to treat it as
such is to overlook its peculiarities. Patents for designs applied or to
be applied refer to finished products of invention rather than to the
process of finishing them or to the agencies by which they are
developed. A patent for a product is a distinct thing from a patent for
the elements entering into it, or for the ingredients of which it is
composed, or for the combination that causes it.
The controlling consideration in determining whether two
designs are substantially the same is the resultant effect. It
is the effect upon the eye which adds value to articles of trade or
commerce.
Test of Substantial Identity of Design: Sameness of Effect upon the
Eye
Plainly it must be sameness of appearance, and mere difference of
lines in the drawing or sketch, a greater or smaller number of lines,
or slight variances in configuration, if sufficient to change the effect
upon the eye, will not destroy the substantial identity. An engraving
which has many lines may present to the eye the same picture, and to
the mind the same idea or conception as another with much fewer
lines. The design, however, would be the same.
Sameness of Effect upon the Eye of the Expert is NOT Essential
Such a test would destroy all the protection which the act of Congress
intended to give. There never could be piracy of a patented design,
for human ingenuity has never yet produced a design, in all its
details, exactly like another -- so like that an expert could not
distinguish them.
Experts, therefore, are not the persons to be deceived. It is persons of
the latter class who are the principal purchasers of the articles
to which designs have given novel appearances, and if they
are misled and induced to purchase what is not the article they
supposed it to be -- if, for example, they are led to purchase forks or
spoons, deceived by an apparent resemblance into the belief that
they bear the "cottage" design, and therefore, are the production of
the holders of the Gorham, Thurber, and Dexter patent, when in fact
they are not -- the patentees are injured and that advantage of a
market which the patent was granted to secure is destroyed.
The purpose of the law cannot be effected if, while the general
appearance of the design is preserved, minor differences of detail in
the manner in which the appearance is produced, observable by
experts but not noticed by ordinary observers, by those who buy and
use, are sufficient to relieve an imitating design from condemnation
as an infringement.
If, in the eye of an ordinary observer, giving such attention as a
purchaser usually gives, two designs are substantially the same, if the
resemblance is such as to deceive such an observer, inducing him to
purchase one supposing it to be the other, the first one patented is
infringed by the other.
As applied in this case:
The Gorham design, and the two designs sold by the defendant,
which were patented to White, one in 1867, and the other in 1868,
are alike in the result of peculiarities of outline, or configuration,
and of ornamentation. These make up whatever is distinctive in
appearance, and of these the outline or configuration is most
impressive to the eye.
Comparing the figure or outline of the plaintiffs' design with that of
the White design of 1867, it is apparent there is no substantial
difference. Even the minor differences are so minute as to escape
observation unless observation is stimulated by a suspicion that
there may be diversity.
o Degree of Concavity: At the upper part of the handle,
immediately above the point where the broader part widens
from the stem with a rounded shoulder, while the external
lines of both designs are first concave and then gradually
become convex, the degree of concavity is greater in the
White design. How much effect this variance has must be
determined by the evidence.
o Ornament: In all the designs, the ornament is, in part, a
rounded molding or bead along the edge with scrolls at the
shoulders and near the top. There are, however, some
diversities in this ornament which are discoverable when
attention is called to them.
o 1. In the plaintiffs' the bead is interrupted at the shoulders
and at the tip by the scrolls, while in both the designs of
White it is continued unbroken around the scrolls.
o 2. In the plaintiffs' the scrolls turn inward at the shoulders
and outward at the tip. In the White design they turn inward
both at the shoulders and at the upper end.
o But there are the same number of scrolls in all the designs,
and they are similarly located, all having the appearance of
rosettes.
o In all the external bead is formed by a depressed line
running near the edge of the handle, but in the plaintiffs'
there is an inner line, making a second very thin bead, nearly
parallel to the external bead common to them all.
o In the White designs this inner line is wanting on the stem
of the handle, though not on the broad part, but as the single
line is wider, it presents much the same appearance as it
would present if divided into two.
No doubt to the eye of an expert these minor differences are all real.
Still, though variances in the ornament are discoverable, the question
remains is the effect of the whole design substantially the same?
A large number of witnesses, familiar with designs, and most of them
engaged in the trade, testify that in their opinion there is no
substantial difference in the three designs and that ordinary
purchasers would be likely to mistake the White designs for the
"cottage" (viz., that of the plaintiffs).
As for defendants witnessnes, a large number of witnesses have
testified on behalf of the defendant that the designs are substantially
unlike, but when they attempt to define the dissimilarity, they specify
only the minor differences in the ornamentation of which we have
heretofore spoken. Their idea of what constitutes identity of
design seems to be that it is the possibility of being struck
from the same die, which, of course, cannot be if there
exists the slightest variation in a single line. They give little
importance to configuration, and none to general aspect.
Such evidence is not an answer to the complainants' case.
Whatever differences there may be between the plaintiffs' design and
those of the defendant in details of ornament, they are still the
same in general appearance and effect, so much alike that in
the market and with purchasers they would pass for the same thing --
so much alike that even persons in the trade would be in danger of
being deceived.


10. Ching v. Salinas G.R. 161295, June 29, 2005. supra
i. Feist Pubs., Inc. V. Rural Tel. SVC. Co., INC., 499 U. S. 340
(1991) - Andrew
Facts are not entitled to copyright
FEIST PUBLICATIONS, INC. v. RURAL TEL. SERVICE CO
Facts:
Respondent Rural Telephone Service Company is a certified public utility
providing telephone service to several communities in Kansas. Pursuant
to state regulation, Rural publishes a typical telephone directory,
consisting of white pages and yellow pages. It obtains data for the
directory from subscribers, who must provide their names and addresses
to obtain telephone service. Petitioner Feist Publications, Inc., is a
publishing company that specializes in area-wide telephone directories
covering a much larger geographic range than directories such as Rural's.
When Rural refused to license its white pages listings to Feist for a
directory covering 11 different telephone service areas, Feist extracted the
listings it needed from Rural's directory without Rural's consent.
Although Feist altered many of Rural's listings, several were identical to
listings in Rural's white pages. The District Court granted summary
judgment to Rural in its copyright infringement suit, holding that
telephone directories are copyrightable. The Court of Appeals affirmed.
Issue:
Whether Rural is entitled to a copyright over its telephone directory (No)
Held:
Rural's white pages are not entitled to copyright, and therefore Feist's use
of them does not constitute infringement.
The key to resolving the tension lies in understanding why facts are not
copyrightable. The sine qua non of copyright is originality. To qualify for
copyright protection, a work must be original to the author. Original, as
the term is used in copyright, means only that the work was
independently created by the author (as opposed to copied from other
works), and that it possesses at least some minimal degree of creativity
Article I, 8, cl. 8, of the Constitution mandates originality as a
prerequisite for copyright protection. The constitutional requirement
necessitates independent creation plus a modicum of creativity. Since
facts do not owe their origin to an act of authorship, they are not original,
and thus are not copyrightable. Although a compilation of facts may
possess the requisite originality because the author typically chooses
which facts to include, in what order to place them, and how to arrange
the data so that readers may use them effectively, copyright protection
extends only to those components of the work that are original to the
author, not to the facts themselves. This fact/expression dichotomy
severely limits the scope of protection in fact-based works.
The Copyright Act of 1976 and its predecessor, the Copyright Act of
1909, leave no doubt that originality is the touchstone of copyright
protection in directories and other fact-based works. The 1976 Act
explains that copyright extends to "original works of authorship," and that
there can be no copyright in facts, A compilation is not copyrightable per
se, but is copyrightable only if its facts have been "selected, coordinated,
or arranged in such a way that the resulting work as a whole constitutes
an original work of authorship." Thus, the statute envisions that some
ways of selecting, coordinating, and arranging data are not sufficiently
original to trigger copyright protection. Even a compilation that is
copyrightable receives only limited protection, for the copyright does not
extend to facts contained in the compilation. The Lower courts which
adopted a "sweat of the brow" or "industrious collection" test - which
extended a compilation's copyright protection beyond selection and
arrangement to the facts themselves - misunderstood the 1909 Act and
eschewed the fundamental axiom of copyright law that no one may
copyright facts or ideas.
In this case, there is no doubt that Feist took from the white pages of
Rural's directory a substantial amount of factual information. Not all
copying, however, is copyright infringement. To establish infringement,
two elements must be proven: (1) ownership of a valid copyright, and (2)
copying of constituent elements of the work that are original. The first
element is not at issue; Feist appears to concede that Rural's directory,
considered as a whole, is subject to a valid copyright because it contains
some foreword text, as well as original material in its yellow pages
advertisements.
The question is whether Rural has proved the second element. In other
words, did Feist, by taking 1,309 names, towns, and telephone numbers
from Rural's white pages, copy anything that was "original" to Rural? The
raw data does not satisfy the originality requirement. Rural may have
been the first to discover and report the names, towns, and telephone
numbers of its subscribers, but this data does not "`owe its origin'" to
Rural. Rather, these bits of information are uncopyrightable facts; they
existed before Rural reported them, and would have continued to exist if
Rural had never published a telephone directory. The originality
requirement rules out protecting names, addresses, and telephone
numbers of which the plaintiff, by no stretch of the imagination, could be
called the author."
Rural's white pages do not meet the constitutional or statutory
requirements for copyright protection. While Rural has a valid copyright
in the directory as a whole because it contains some forward text and
some original material in the yellow pages, there is nothing original in
Rural's white pages. The raw data are uncopyrightable facts, and the way
in which Rural selected, coordinated, and arranged those facts is not
original in any way. Rural's selection of listings - subscribers' names,
towns, and telephone numbers - could not be more obvious, and lacks the
modicum of creativity necessary to transform mere selection into
copyrightable expression. In fact, it is plausible to conclude that Rural did
not truly "select" to publish its subscribers' names and telephone numbers,
since it was required to do so by state law. Moreover, there is nothing
remotely creative about arranging names alphabetically in a white pages
directory. It is an age-old practice, firmly rooted in tradition and so
commonplace that it has come to be expected as a matter of course.


10. AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979)-Miggy
Concept/Topic: Trademark Infringement, Factors of Likelihood o
Facts:
This is a trademark infringement case filed by AMF (Slickcraft)
against Sleekcraft Boats. Trial court found that AMFs trademark was
valid, but not infringed, and denied AMFs request for injunctive relief.
AMF's predecessor used the name Slickcraft Boat Company from
1954 to 1969 when it became a division of AMF. The mark Slickcraft
was federally registered on April 1, 1969, and has been continuously used
since then as a trademark for this line of recreational boats.
After several years in the boat-building business, appellee Nescher
organized a sole proprietorship, Nescher Boats, in 1962. This venture
failed in 1967. In late 1968 Nescher began anew and adopted the name
Sleekcraft. Since then Sleekcraft has been the Nescher trademark.
The name Sleekcraft was selected without knowledge of appellant's
use.
After AMF notified him of the alleged trademark infringement,
Nescher adopted a distinctive logo and added the identifying phrase
"Boats by Nescher" on plaques affixed to the boat and in much of its
advertising.
The Sleekcraft mark still appears alone on some of appellee's
stationery, signs, trucks, and advertisements.
Issue(s):
1. What is the standard of review?
2. Has a likelihood of confusion been demonstrated?
3. What relief is warranted?
Ratio
1. RES: Nescher contends that "likelihood of confusion" is a question of
fact reviewable under the clearly erroneous standard.
PET: AMF says it is a question of law reviewable De novo.
Court: To the extent that the conclusion of the trial court is based solely
upon disputed findings of fact, the appellate court must follow the
conclusion of the trial court unless it finds the underlying facts to be
clearly erroneous. However, if the facts are not in dispute, the appellate
court is 'in as good a position as the trial judge to determine the
probability of confusion.
2. In determining whether confusion between related goods is likely, the
following factors are relevant: [FN11]
1. strength of the mark;
2. proximity of the goods;
3. similarity of the marks;
4. evidence of actual confusion;
5. marketing channels used;
6. type of goods and the degree of care likely to be exercised by the
purchaser;
7. defendant's intent in selecting the mark; and
8. likelihood of expansion of the product lines.
Strength of the Mark Court discusses several levels of strength.
Distinctive: Arbitrary or fanciful mark, afforded widest ambit of
protection form infringing use.
Suggestive: Subtly connote something about the products, although less
distinctive that a fanciful or arbitrary mark and therefore a comparatively
weak mark, protected without proof of second meaning.
Descriptive: Tells something about a product, protected only when second
meaning is shown. (BBQ, Hot&Crispy)
Although the distinction between descriptive and suggestive marks may
be inarticulable, the primary criterion is "the imaginativeness involved in
the suggestion. Court found that it was a suggestive mark, which although
protectible and may have been strengthened by advertising, it is a weak
mark entitled to a restricted range of protection. Thus, only if the marks
are quite similar, and the goods closely related, will infringement be
found.
Proximity - Although these product lines are non-competing, they are
extremely close in use and function. In fact, their uses overlap. Both are
for recreational boating on bays and lakes. Both are designed for water
skiing and speedy cruises. Their functional features, for the most part, are
also similar: fiberglass bodies, outboard motors, and open seating for a
handful of people. Although the Sleekcraft boat is for higher speed
recreation and its refinements support the market distinction the district
court made, they are so closely related that a diminished standard of
similarity must be applied when comparing the two marks.
Similarity of the Marks - Similarity of the marks is tested on three levels:
sight, sound, and meaning. Standing alone the words Sleekcraft and
Slickcraft are the same except for two inconspicuous letters in the middle
of the first syllable. To the eye, the words are similar. Sound is also
important because reputation is often conveyed word-of-mouth. We
recognize that the two sounds can be distinguished, but the difference is
only in a small part of one syllable. The final criterion reinforces our
conclusion. Closeness in meaning can itself substantiate a claim of
similarity of trademarks. Nescher contends the words are sharply different
in meaning. This contention is not convincing; the words are virtual
synonyms. Despite the trial court's findings, we hold that the marks are
quite similar on all three levels.
In support of the district court's finding, Nescher points out that the
distinctive logo on his boats and brochures negates the similarity of the
words. Nescher also points out that the Slickcraft name is usually
accompanied by the additional trademark AMF. As a result of this
consistent use, Nescher argues, AMF has become the salient part of the
mark indicative of the product's origin.
Court: the effect is negligible here even though AMF is a well-known
house name for recreational equipment. The exhibits show that the AMF
mark is down-played in the brochures and advertisements; the letters
AMF are smaller and skewed to one side.
Evidence of Actual Confusion Evidence that use of the two marks has
already led to confusion is persuasive proof that future confusion is likely.
A substantial showing of confusion among either group might have
convinced the trial court that continued use would lead to further
confusion. The district judge found that in light of the number of sales
and the extent of the parties' advertising, the amount of past confusion
was negligible. Because of the difficulty in garnering such evidence, the
failure to prove instances of actual confusion is not dispositive.
Marketing Channels - Convergent marketing channels increase the
likelihood of confusion. The normal marketing channels used by both
AMF and Nescher are, however, parallel. Each sells through authorized
retail dealers in diverse localities. The same sales methods are employed.
The price ranges are almost identical. Each line is advertised extensively
though different national magazines are used; the retail dealers also
promote the lines, by participating in smaller boat shows and by
advertising in local newspapers and classified telephone directories.
Although different submarkets are involved, the general class of boat
purchasers exposed to the products overlap.
Type of Goods and Purchaser care - In assessing the likelihood of
confusion to the public, the standard used by the courts is the typical
buyer exercising ordinary caution. When the buyer has expertise in the
field, a higher standard is proper though it will not preclude a finding that
confusion is likely. Also when the goods are expensive, the buyer can be
expected to exercise greater care in his purchases; again, though,
confusion may still be likely.
The district court also found that trademarks are unimportant to the
average boat buyer. Common sense and the evidence indicate this is not
the type of purchase made only on "general impressions." This inattention
to trade symbols does reduce the possibilities for confusion.
The hallmark of a trademark owner's interest in preventing use of his
mark on related goods is the threat such use poses to the reputation of his
own goods. When the alleged infringer's goods are of equal quality, there
is little harm to the reputation earned by the trademarked goods. Yet this
is no defense, for present quality is no assurance of continued quality.
Intent - The district judge found that Nescher was unaware of appellant's
use of the Slickcraft mark when he adopted the Sleekcraft name. There
was no evidence that anyone attempted to palm off the latter boats for the
former. And after notification of the purported infringement, Nescher
designed a distinctive logo. Appellee's good faith cannot be questioned
Likelihood of Expansion - The potential that one or both of the parties
will enter the other's submarket with a competing model is strong.
3. Both parties have used their trademarks for over a decade. AMF has a
substantial investment in the Slickcraft name, yet a complete prohibition
against appellee's use of the Sleekcraft name is unnecessary to protect
against encroachment of appellant's mark or to eliminate public
confusion. Appellee has also expended much effort and money to build
and preserve the goodwill of its mark.
At minimum, the logo should appear in all advertisements, signs, and
promotional materials prepared either by appellee or by his retail dealers,
and on all appellee's business forms except those intended for strictly
internal use. A specific disclaimer of any association with AMF or the
Slickcraft line seems unnecessary, nor do we think it necessary to enjoin
Nescher from expanding his product line. In its discretion the district
judge may allow appellee sufficient time to consume supplies at hand and
to add the logo to more permanent assets, such as business signs


11. Emerald Garment Manufacturing Corp. v. CA, G.R. 100098,
December 29, 1995. Dinnah Mae
TOPIC: Trademark
H.D. Lee Co., Inc., a foreign corporation organized under the
laws of Delaware, U.S.A., filed with BPTTT a Petition for
Cancellation of a Supplemental Register for the trademark
"STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks, briefs,
jackets, jogging suits, dresses, shorts, shirts and lingerie under
Class 25, issued on 27 October 1980 in the name of petitioner
Emerald Garment Manufacturing Corporation, a domestic
corporation organized and existing under Philippine laws (Inter
Partes Case No. 1558.)
o They invoked Sec. 37 of R.A. No. 166 (Trademark Law) and Art.
VIII of the Paris Convention for the Protection of Industrial
Property, averred that petitioner's trademark "so closely resembled
its own trademark, 'LEE' as previously registered and used in the
Philippines, and not abandoned, as to be likely, when applied to or
used in connection with petitioner's goods, to cause confusion,
mistake and deception on the part of the purchasing public as to
the origin of the goods."


Petitioner contended that its trademark was entirely and
unmistakably different from that of private respondent and that its
certificate of registration was legally and validly granted.


Petitioner later caused the publication of its application for
registration of the trademark "STYLISTIC MR. LEE" in the
Principal Register."
o Private respondent filed a notice of opposition also on grounds
that petitioner's trademark was confusingly similar to its "LEE"
trademark. (Inter Partes Case No. 1860.)
The Director of Patents issued an order consolidating Inter
Partes Cases Nos. 1558 and 1860 on grounds that a common
question of law was involved.


Director of Patents: rendered a decision granting private
respondent's petition for cancellation and opposition to
registration.
Petitioner filed a Motion to Stay Execution with the BPTTT:
granted
CA: affirmed the decision of the Director of Patents
MR: denied
ISSUES:
1. WON respondent is barred by laches. NO
2. Won there is confusing similarity between the two trademarks.
NO
RULING:
1. PETITIONER: private respondent is estopped from instituting
an action for infringement before the BPTTT under the equitable
principle of laches pursuant to Sec. 9-A of R.A. No. 166, otherwise
known as the Law on Trade-marks, Trade-names and Unfair
Competition
It has been using its trademark "STYLISTIC MR. LEE" since 1
May 1975, yet, it was only on 18 September 1981 that private
respondent filed a petition for cancellation of petitioner's certificate
of registration for the said trademark.
private respondent's notice of opposition to petitioner's
application for registration in the principal register was belatedly
filed on 27 July 1984.


PRIVATE RESPONDENT: petitioner was barred from raising new
issues on appeal, the only contention in the proceedings below
being the presence or absence of confusing similarity between the
two trademarks in question.


COURT: rejects petitioners contention
Petitioner's trademark is registered in the supplemental
register. The Trademark Law (R.A. No. 166) provides that "marks
and tradenames for the supplemental register shall not be
published for or be subject to opposition, but shall be published on
registration in the Official Gazette."

The reckoning point, should
not be 1 May 1975 (date of alleged use by petitioner of its assailed
trademark) but 27 October 1980,

the date the certificate of
registration SR No. 5054 was published in the Official Gazette and
issued to petitioner (when private respondent is considered
"officially" put on notice that petitioner has appropriated or is
using said mark)
The record is bereft of evidence that private respondent was
aware of petitioner's trademark before the date of said publication
and issuance When private respondent instituted cancellation
proceedings on 18 September 1981, less than a year had passed.
RE: filing its notice of opposition to petitioner's application
for registration in the principal register- The application was
published only on 20 February 1984 and the opposition was filed
on 27 July 1984 (barely 5 months had elapsed).
2. PETITIONER: vehemently contends that its trademark
"STYLISTIC MR. LEE" is entirely different from and not
confusingly similar to private respondent's "LEE" trademark.
PRIVATE RESPONDENT: petitioner's trademark tends to mislead
and confuse the public and thus constitutes an infringement of its
own mark, since the dominant feature therein is the word "LEE."
COURT:
The pertinent provision is R.A. No. 166 (Trademark Law)
a) NO COLORABLE IMITATION.
In the history of trademark cases in the Philippines,
particularly in ascertaining whether one trademark is confusingly
similar to or is a colorable imitation of another, no set rules can
be deduced. Each case must be decided on its own merits.
o Esso Standard Eastern, Inc. v. Court of Appeals: In
determining whether a particular name or mark is a "colorable
imitation" of another, no all-embracing rule seems possible in view
of the great number of factors which must necessarily be
considered in resolving this question of fact, such as the class of
product or business to which the article belongs; the product's
quality, quantity, or size, including its wrapper or container; the
dominant color, style, size, form, meaning of letters, words, designs
and emblems used; the nature of the package, wrapper or
container; the character of the product's purchasers; location of the
business; the likelihood of deception or the mark or name's
tendency to confuse;
etc.
Colorable imitation has been defined as "such a close
or ingenious imitation as to be calculated to deceive
ordinary purchasers, or such resemblance of the
infringing mark to the original as to deceive an ordinary
purchaser giving such attention as a purchaser usually
gives, and to cause him to purchase the one supposing it
to be the other."
o does not mean such similitude as amounts to
identity.
o refers to such similarity in form, content, words,
sound, meaning, special arrangement, or general
appearance of the trademark or tradename with that
of the other mark or tradename in their over-all
presentation or in their essential,
substantive and distinctive parts as would
likely mislead or confuse persons in the ordinary
course of purchasing the genuine article.
o TESTS:
Dominancy Test (Asia Brewery, Inc. v.
CA)- similarity of the prevalent features of
the competing trademarks which might cause
confusion or deception and thus constitutes
infringement.
Holistic Test (Del Monte Corporation v.
CA) -the entirety of the marks in question
must be considered in determining confusing
similarity.
taking into account the factual circumstances of this
case, we considered the trademarks involved as a whole and
rule that petitioner's "STYLISTIC MR. LEE" is not
confusingly similar to private respondent's "LEE"
trademark.
Petitioner's trademark is the whole "STYLISTIC MR.
LEE." Although on its label the word "LEE" is prominent,
the dissimilarities between the two marks become
conspicuous, noticeable and substantial enough to matter
especially in the light of the following variables that must be
factored in.
o the main, various kinds of jeans. They are not
inexpensive. Accordingly, the casual buyer is
predisposed to be more cautious and discriminating
in and would prefer to mull over his purchase.
Confusion and deception, then, is less likely.
o average Filipino consumer generally buys his
jeans by brand. He is, therefore, more or less
knowledgeable and familiar with his preference and
will not easily be distracted.
o the Ordinary purchaser is not the
"completely unwary consumer" but is the "ordinarily
intelligent buyer" considering the type of product
involved.
Dy Buncio v. Tan Tiao Bok: the "ordinary
purchaser" was defined as one "accustomed
to buy, and therefore to some extent familiar
with, the goods in question. The test of
fraudulent simulation is to be found in the
likelihood of the deception of some persons
in some measure acquainted with an
established design and desirous of
purchasing the commodity with which
that design has been associated.
b) RE: product might be mistaken as "another variation
or line of garments under private respondent's 'LEE'
trademark".
-
NO.
One would readily observe, private respondent's variation
follows a standard format "LEERIDERS," "LEESURES" and
"LEELEENS." It is, therefore, improbable that the public would
immediately and naturally conclude that petitioner's "STYLISTIC
MR. LEE" is but another variation under private respondent's
"LEE" mark.
c) Another way of resolving the conflict is to consider
the marks involved from the point of view of what marks
are registrable pursuant to Sec. 4 of R.A. No. 166,
particularly paragraph 4 (e)
"LEE" is primarily a surname. Private respondent cannot,
therefore, acquire exclusive ownership over and singular use of
said term. . . . personal name or surname may not be monopolized
as a trademark or tradename as against others of the same name or
surname. For in the absence of contract, fraud, or estoppel, any
man may use his name or surname in all legitimate ways
d) FAILED TO PROVE PRIOR ACTUAL COMMERCIAL USE.
Respondent failed to prove prior actual commercial use of its
"LEE" trademark in the Philippines before filing its application for
registration with the BPTTT and hence, has not acquired
ownership over said mark.
Actual use in commerce in the Philippines is an essential
prerequisite for the acquisition of ownership over a trademark
pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A.
No. 166)
The provisions of the 1965 Paris Convention for the
Protection of Industrial Property relied upon by private respondent
and Sec. 21-A of the Trademark Law (R.A. No. 166)

were
sufficiently expounded upon and qualified in the recent case of
Philip Morris, Inc. v. Court of Appeals
Undisputably, private respondent is the senior registrant,
having obtained several registration certificates for its various
trademarks "LEE," "LEERIDERS," and "LEESURES" in both the
supplemental and principal registers, as early as 1969 to 1973.
41

However, registration alone will not suffice.
o Sterling Products International, Inc. v.Farbenfabriken Bayer
Aktiengesellschaft: actual use in commerce or business is a
prerequisite in the acquisition of the right of ownership over a
trademark... Adoption is not use. One may make advertisements,
issue circulars, give out price lists on certain goods; but these alone
would not give exclusive right of use...The underlying reason for all
these is that purchasers have come to understand the mark as
indicating the origin of the wares. Registration of a trademark, of
course, has value: it is an administrative act declaratory of a pre-
existing right. Registration does not, however, perfect a
trademark right. (Emphasis ours.)
To augment its arguments that it was, not only the prior
registrant, but also the prior user, private respondent invokes Sec.
20 of the Trademark Law
o A registration certificate serves merely as prima facie evidence.
It is not conclusive but can and may be rebutted by controverting
evidence.
o Moreover, the provision applies only to registrations in the
principal register.

Registrations in the supplemental register do not
enjoy a similar privilege. A supplemental register was created
precisely for the registration of marks which are not registrable on
the principal register due to some defects.


The determination as to who is the prior user of the
trademark is a question of fact.
o In the case at bench, we reverse the findings of the Director of
Patents and the Court of Appeals.
o The Director of Patents and the Court of Appeals relied mainly
on the registration certificates as proof of use by private
respondent of the trademark "LEE" which, as we have previously
discussed are not sufficient.
o We cannot give credence to private respondent's claim that its
"LEE" mark first reached the Philippines in the 1960's through
local sales by the Post Exchanges of the U.S. Military Bases in the
Philippines

based as it was solely on the self-serving statements of
Mr. Edward Poste, General Manager of Lee (Phils.), Inc., a wholly
owned subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein private
respondent.
o On the other hand, petitioner has sufficiently shown that it has
been in the business of selling jeans and other garments adopting
its "STYLISTIC MR. LEE" trademark since 1975 as evidenced by
appropriate sales invoices to various stores and retailers.
(Pagasa Industrial Corp. v. Court of Appeals 51 and
Converse Rubber Corp. v. Universal Rubber Products, Inc.):
o The Trademark Law is very clear. It requires actual commercial
use of the mark prior to its registration. There is no dispute that
respondent corporation was the first registrant, yet it failed to fully
substantiate its claim that it used in trade or business in the
Philippines the subject markThe evidence for respondent must
be clear, definite and free from inconsistencies
For lack of adequate proof of actual use of its trademark
in the Philippines prior to petitioner's use of its own
mark and for failure to establish confusing similarity
between said trademarks, private respondent's action for
infringement must necessarily fail.
WHEREFORE, premises considered, the questioned decision and
resolution are hereby REVERSED and SET ASIDE.
---------
PADILLA, J., dissenting:
I dissent. I vote deny the petition; I agree with BPTTT and the CA
that petitioner's trademark "STYLISTIC MR. LEE" is confusingly
similar to private respondent's earlier registered trademarks "LEE"
or "LEE RIDER, LEE-LEENS and LEE-SURES" such that the
trademark "STYLISTIC MR. LEE" is an infringement of the earlier
registered trademarks.


12. Shangri-la International Hotel Management v. Developers
Group of Companies, INC, G.R. 159938, March 31, 2006. - Jen
Topic: actual use, prior use
Facts:
1. At the core of the controversy are the Shangri-La mark and
S logo. Respondent DGCI claims ownership of said mark and logo
in the Philippines on the strength of its prior use thereof within the
country.
2. October 18, 1982: DGCI filed with the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) pursuant to
Sections 2 and 4 of RA 166, as amended, an application for
registration covering the subject mark and logo.
3. December 1982: DGCI came up with the design for
their trademark and logo done by a jeepney signboard artist.
4. May 31, 1983: BPTTT issued in favor of DGCI the
corresponding certificate of registration, i.e., Registration No.
31904. Since then, DGCI started using the Shangri-La mark and
S logo in its restaurant business.
5. On the other hand, the Kuok family owns and operates a chain
of hotels with interest in hotels and hotel-related transactions since
1969. As far back as 1962, it adopted the name Shangri-La as
part of the corporate names of all companies organized under the
aegis of the Kuok Group of Companies (the Kuok Group). The Kuok
Group has used the name Shangri-La in all Shangri-La hotels
and hotel-related establishments around the world which the Kuok
Family owned.
6. To centralize operations, Kuok Group incorporated in Hong
Kong and Singapore, among other places, several companies that
form part of the Shangri-La International Hotel Management Ltd.
Group of Companies. EDSA Shangri-La Hotel and Resort, Inc.,
and Makati Shangri-La Hotel and Resort, Inc. were incorporated
in the Philippines beginning 1987 to own and operate the two
hotels put up by the Kuok Group in Mandaluyong and Makati,
Metro Manila.
7. All hotels owned, operated and managed by the aforesaid
SLIHM Group of Companies adopted and used the distinctive
lettering of the nameShangri-La as part of their trade names.
8. Kuok Group commissioned a Singaporean designer for their
logo. This logo has been used by the hotel chain since 1975 in all
their paraphernalia such as stationeries, envelopes, menus,
receipts, etc. The Kuok Group and/or petitioner SLIHM also
caused the registration of, and in fact registered, the Shangri-La
mark and S logo in the patent offices in different countries
around the world.
9. Petitioners filed with the BPTTT a petition, docketed as Inter
Partes Case No. 3145, praying for the cancellation of the
registration of the Shangri-La mark and S logo issued
to respondent DGCI on the ground that the same were illegally
and fraudulently obtained and appropriated for the latter's
restaurant business. They also filed in the same office Inter Partes
Case No. 3529, praying for the registration of the same mark and
logo in their own names.
10. While trial was in progress, the petitioners filed with the court
a motion to suspend proceedings on account of the pendency
before the BPTTT of Inter Partes Case No. 3145 for the
cancellation of DGCIs certificate of registration. For its part,
respondent DGCI filed a similar motion in that case, invoking in
this respect the pendency of its infringement case before the trial
court.
11. The two cases were eventually consolidated. On June 21, 2001,
the Court, limiting itself to the core issue of whether, despite the
petitioners institution of Inter Partes Case No. 3145 before the
BPTTT, herein respondent DGCI can file a subsequent action
for infringement with the regular courts of justice in connection
with the same registered mark, ruled in the affirmative, but
nonetheless ordered the BPTTT to suspend further proceedings in
said inter partes case and to await the final outcome of the main
case.
Petitioner: (1) Respondent had no right to file an application for
registration of the Shangri-La mark and S logo because it did
not have prior actual commercial use thereof. Although
petitioners did not operate any establishment in the Philippines
until 1987 or 1988, they advertised their hotels abroad since 1972
in numerous business, news, and/or travel magazines widely
circulated around the world, all readily available in Philippine
magazines and newsstands. They, too, maintained reservations and
booking agents in airline companies, hotel organizations, tour
operators, tour promotion organizations, and in other allied fields
in the Philippines. (2) Respondent's use of the Shangri-La mark
and S logo was in evident bad faith and cannot therefore ripen
into ownership, much less registration.
Private respondent: (1) such an argument raises a question of
fact that was already resolved by the RTC and concurred in by the
CA (2) DGCI has, for the last eight years, been the prior exclusive
user in the Philippines of the mark and logo in question and the
registered owner thereof for its restaurant and allied services. (3)
Since the petitioners adopted the Shangri-La mark and S logo
as a mere corporate name or as the name of their hotels, instead of
using them as a trademark or service mark, then such name and
logo are not trademarks. The two concepts of corporate name or
business name and trademark or service mark, are not mutually
exclusive
Issue:
W/N registration of a mark is sufficient to establish prior actual
use by the registrant (NO)
W/N respondent is guilty of bad faith (YES)
Held:
1. First off, all that the RTC found was that respondent was the
prior user and registrant of the subject mark and logo in the
Philippines. Taken in proper context, the trial courts finding on
prior use can only be interpreted to mean that respondent used
the subject mark and logo in the country before the petitioners did.
It cannot be construed as being a factual finding that there was
prior use of the mark and logo before registration. Moreover, the
question is not merely factual in nature because the question is not
whether there had been widespread prior use, which would have
been factual, but whether that prior use entitles the petitioners to
use the mark and logo in the Philippines. This is clearly a question
which is legal in nature.
2. While the present law on trademarks has dispensed with the
requirement of prior actual use at the time of registration, the law
in force at the time of registration must be applied. Ownership of a
mark or trade name may be acquired not necessarily by
registration but by adoption and use in trade or commerce. As
between actual use of a mark without registration, and registration
of the mark without actual use thereof, the former prevails over the
latter. For a rule widely accepted and firmly entrenched, because it
has come down through the years, is that actual use in commerce
or business is a pre-requisite to the acquisition of the right of
ownership. Registration, without more, does not confer upon the
registrant an absolute right to the registered mark. The certificate
of registration is merely a prima facie proof that the registrant is
the owner of the registered mark or trade name. Evidence of prior
and continuous use of the mark or trade name by another can
overcome the presumptive ownership of the registrant and may
very well entitle the former to be declared owner in an appropriate
case.
Here, respondent's own witness, Ramon Syhunliong, testified that
a jeepney signboard artist allegedly commissioned to create the
mark and logo submitted his designs only in December 1982. This
was two-and-a-half months after the filing of the respondents
trademark application on October 18, 1982 with the BPTTT. It was
also only in December 1982 when the respondent's restaurant was
opened for business. Respondent cannot now claim before the
Court that the certificate of registration itself is proof that the two-
month prior use requirement was complied with, what with the fact
that its very own witness testified otherwise in the trial court. And
because at the time (October 18, 1982) the respondent filed its
application for trademark registration of the Shangri-La mark
and S logo, respondent was not using these in the Philippines
commercially, the registration is void.
3. Section 2 of RA 166, the governing law at that time, requires
actual use for two months in determining what are registrable
marks. Section 2-A likewise emphasizes that in acquiring
ownership over marks, actual use of a mark not appropriated by
another (not limited to Philippines) is necessary. It is not the fact of
registration that enables one to acquire ownership over the mark
but the fact of actual use thereof. Under Section 2, in order to
register a trademark, one must be the owner thereof and must have
actually used the mark in commerce in the Philippines for 2
months prior to the application for registration. Since ownership
of the trademark is required for registration, Section 2-A of the
same law sets out to define how one goes about acquiring
ownership thereof. Under Section 2-A, it is clear that actual use in
commerce is also the test of ownership but the provision went
further by saying that the mark must not have been so
appropriated by another. Additionally, it is significant to note that
Section 2-A does not require that the actual use of a trademark
must be within the Philippines. Hence, under R.A. No. 166, as
amended, one may be an owner of a mark due to actual use thereof
but not yet have the right to register such ownership here due to
failure to use it within the Philippines for two months.
In the case of DGCI, not only was its trademark not actually used
prior to registration, the mark had already been appropriated by
someone else. Again, Section 2-A of RA 166 does not qualify that
such appropriation by another be limited to the Philippines.
4. The new Intellectual Property Code (IPC), Republic Act No.
8293, undoubtedly shows the firm resolve of the Philippines to
observe and follow the Paris Convention by incorporating the
relevant portions of the Convention such that persons who may
question a mark (that is, oppose registration, petition for the
cancellation thereof, sue for unfair competition) include persons
whose internationally well-
known mark, whether or not registered, is identical with or
confusingly similar to or constitutes a translation of a mark that is
sought to be registered or is actually registered. However, while the
Philippines was already a signatory to the Paris Convention, the
IPC only took effect on January 1, 1988, and in the absence of a
retroactivity clause, R.A. No. 166 still applies. Thus, petitioners
cannot use the Paris Convention to bolster their claim.
Nevertheless, with the double infirmity of lack of two-month prior
use, as well as bad faith in the respondent's registration of the
mark, it is evident that the petitioners cannot be guilty of
infringement.
5. Nor can the petitioners' separate personalities from their
mother corporation be an obstacle in the enforcement of their
rights as part of the Kuok Group of Companies and as official
repository, manager and operator of the subject mark and logo.
Besides, R.A. No. 166 did not require the party seeking relief to
be the owner of the mark but any person who believes that he
is or will be damaged by the registration of a mark or trade name.


13. Sehwani, Inc. v. In-N-Out Burger, Inc., G.R. 171053,
October 15, 2007 - Kristina
Title: Sehwani, Inc. vs. In-N-Out Burger, Inc.


Concept/Topic: Paris Convention; cancellation of
registration; internationally famous marks; trademark
infringement; protection of internationally famous marks


Facts
Petitioner = Sehwani, Inc; alleged infringer
Respondent = IN-N-OUT Burger, Inc., a foreign corporation
organized under the laws of California, U.S.A., and not
doing business in the Philippines; rights holder
June 2, 1997: Respondent applied with the IPO for the
registration of its trademark IN-N-OUT Burger & Arrow
Design and servicemark IN-N-OUT. In the course of its
application, it discovered that petitioner had obtained
Trademark Registration No. 56666 for the mark IN N
OUT (THE INSIDE OF THE LETTER O FORMED LIKE
A STAR) on December 17, 1993 without its authority.
Respondent demanded that petitioner desist from claiming
ownership of the mark IN-N-OUT and to voluntarily
cancel its trademark registration but petitioner refused to
accede to the demand and even entered into a licensing
agreement with Benitas Frites, Inc.
Respondent filed a complaint for violation of intellectual
property rights before BLA-IPO
In its answer, petitioner alleged the following:
o Respondent lack the legal capacity to sue because it
was not doing business in the Philippines and that it
has no cause of action because its mark is not
registered or used in the Philippines
o As the registered owner of the IN-N-OUT mark, it
enjoys the presumption that the same was validly
acquired and that it has the exclusive right to use the
mark
o Respondent failed to show the existence of any of the
grounds for cancellation thereof under Section 151 of
IP Code
BLA-IPO cancelled petitioners trademark registration but
held that it was not guilty of unfair competition
Office of the Director General dismissed petitioners appeal
for being filed out of time
The CA dismissed petitioners petition for lack of merit
Respondent filed a manifestation with the CA that on
December 23, 2005, the Director General had rendered a
decision in appeal finding petitioners guilty of unfair
competition
Petitioner filed petition for review before the SC
Issue: WON Sehwani is guilty of trademark infringement? YES
Held: Petition DENIED.
Ratio:
Respondent has the legal capacity to sue for the protection
of its trademarks, albeit it is not doing business in the
Philippines. Basis = Section 160 in relation to Section 3 of
IP Code
Articles 6bis and 8 of the Paris Convention, wherein both
the United States and the Philippines are signatories,
provides protection for well-known trademarks
BLA-IPO through Director Beltran-Abelardo held that
respondent is an owner of an internationally well-known
mark based on evidence consisting of:
o worldwide registration of mark IN-N-OUT almost
all of which were issued earlier than the petitioners
date of filing of its application
o subsequent registration of the mark IN-N-OUT in
the IPO
o advertisements made by respondent for In-N-Out
Burger
The fact that respondents marks are neither registered nor
used in the Philippines is of no moment. The scope of
protection initially afforded by Article 6bis of the Paris
Convention has been expanded in the 1999 Joint
Recommendation Concerning Provisions on the Protection
of Well-Known Marks, wherein the World Intellectual
Property Organization (WIPO) General Assembly and the
Paris Union agreed to a nonbinding recommendation that a
well-known mark should be protected in a country even if
the mark is neither registered nor used in that country.
Petitioners claim that no ground exists for the cancellation
of their registration lacks merit. Basis = Section 151(b) of
the IP Code
o The evidence on record shows that not only did the
petitioners use the IN-N-OUT Burger trademark for
the name of their restaurant, but they also used
identical or confusingly similar mark for their
hamburger wrappers and french-fries receptacles,
thereby effectively misrepresenting the source of the
goods and services
Petitioners contention that respondent is precluded from
asserting its claim by laches, if not by prescription, lacks
basis.
o Section 151(b) of the IP Code specifically provides
that a petition to cancel the registration of a mark
which is registered contrary to the provisions
thereof, or which is used to misrepresent the source
of the goods or services, may be filed at any time.
o Laches may not prevail against a specific provision of
law, since equity is applied in the absence of and not
against statutory law or rules of procedure.






14. Etepha, A.G. v. Director of Patents and Westmont
Pharmaceuticals Inc., G.R. No. L-20635, November 19, 1966. - Poy
Facts:
Respondent Westmont Pharmaceuticals, Inc., a New York
corporation, sought registration of trademark "Atussin" placed on
its "medicinal preparation of expectorant antihistaminic,
bronchodilator sedative, ascorbic acid (Vitamin C) used in the
treatment of cough". The trademark is used exclusively in the
Philippines since January 21, 1959.


Petitioner, Etepha, A. G., a Liechtenstin (principality)
corporation, objected. Petitioner claims that it will be damaged
because Atussin is so confusedly similar to its Pertussin
(Registration No. 6089, issued on September 25, 1957) used on a
preparation for the treatment of coughs, that the buying public will
be misled into believing that Westmont's product is that of
petitioner's which allegedly enjoys goodwill.


The Director of Patents ruled that the trademark ATUSSIN
may be registered even though PERTUSSIN had been previously
registered from the same office, hence, this appeal.


ISSUE: Whether or not ATUSSIN may be registered? YES


We are to be guided by the rule that the validity of a cause
for infringement is predicated upon colorable imitation. The phrase
"colorable imitation" denotes such a "close or ingenious imitation
as to be calculated to deceive ordinary persons, or such a
resemblance to the original as to deceive an ordinary purchaser,
giving such attention as a purchaser usually gives, and to cause
him to purchase the one supposing it to be the other.


A practical approach to the problem of similarity or
dissimilarity is to go into the whole of the two trademarks pictured
in their manner of display. Inspection should be undertaken from
the viewpoint of a prospective buyer. Confusion is likely between
trademarks, however, only if their over-all presentations in any of
the particulars of sound, appearance, or meaning are such as
would lead the purchasing public into believing that the products to
which the marks are applied emanated from the same source.


We concede the possibility that buyers might be able to
obtain Pertussin or Attusin without prescription.When this happens,
then the buyer must be one thoroughly familiar with what he
intends to get, else he would not have the temerity to ask for a
medicine specifically needed to cure a given ailment. In which
case, the more improbable it will be to palm off one for the other.
For a person who purchases with open eyes is hardly the man to
be deceived.


For the reasons given, the appealed decision of the
respondent Director of Patents giving due course to the
application for the registration of trademark ATTUSIN is hereby
affirmed. Cost against petitioner.So ordered.




15. Converse Rubber Corporation v. Universal Rubber Products
Inc., G.R. No. L-27906, January 18, 1987. - Dane
CONVERSE RUBBER vs.UNIVERSAL RUBBER (January 8,
1987, FERNAN)
Topic: How to go about protecting your IP -Trademark (Similar
Marks, cancellation of registration, confusion)
FACTS:
Respondent Universal Rubber filed an application with the
Philippine Patent office for registration of the trademark
"UNIVERSAL CONVERSE AND DEVICE" used on rubber
shoes and rubber slippers
Petitioner Converse Rubber filed its opposition to the
application for registration on grounds that:
o The trademark sought to be registered is
confusingly similar to the word "CONVERSE" which
is part of petitioner's corporate name "CONVERSE
RUBBER CORPORATION" as to likely deceive
purchasers of products on which it is to be used to
an extent that said products may be mistaken by the
unwary public to be manufactured by the petitioner;
and,
o The registration of respondent's trademark will
cause great and irreparable injury to the business
reputation and goodwill of petitioner in the
Philippines and would cause damage to said
petitioner within the, meaning of Section 8, R.A. No.
166, as amended
Respondent filed its answer and at the pre-trial
o Partial stipulation of facts:
The petitioner's corporate name is
"CONVERSE RUBBER CORPORATION"
and has been in existence since July 31,
1946; it is duly organized under the laws of
Massachusetts, USA and doing business at
392 Pearl St., Malden, County of Middle sex,
Massachusetts;
Petitioner is not licensed to do business in the
Philippines and it is not doing business on its
own in the Philippines; and,
Petitioner manufacturers rubber shoes and
uses thereon the trademarks "CHUCK
TAYLOR "and "ALL STAR AND DEVICE"
At the trial, petitioner's lone witness, Mrs. Pacquing, a duly
licensed private merchant with stores at the Sta. Mesa
Market and in Davao City, testified that
o she had been selling CONVERSE rubber shoes in
the local market since 1956 and that sales of
petitioner's rubber shoes in her stores averaged
twelve to twenty pairs a month purchased mostly by
basketball players of local private educational
institutions like Ateneo, La Salle and San Beda
o she knew petitioner's rubber shoes came from the
United States "because it says there in the
trademark Converse Chuck Taylor with star red or
blue and is a round figure and made in U.S.A. " In
the invoices issued by her store, the rubber shoes
were described as "Converse Chuck Taylor",
"Converse All Star," "All Star Converse Chuck
Taylor," or "Converse Shoes Chuck Taylor."
o she had no business connection with the
petitioner.
Respondents lone witness is secretary of said corporation
who testified that
o respondent has been selling on wholesale basis
"Universal Converse" sandals since 1962 and
"Universal Converse" rubber shoes since 1963.
Invoices were submitted as evidence of such sales
o she had no Idea why respondent chose "Universal
Converse" as a trademark and that she was
unaware of the name "Converse" prior to her
corporation's sale of "Universal Converse" rubber
shoes and rubber sandals
Director of Patents: dismissed the opposition of the
petitioner and gave due course to respondent's application
REASONING that
o there is nothing that will prevent registration of the
word 'UNIVERSAL CONVERSE' in favor of the
respondent given that the oppose-petitioner failed to
present proof that the single word "CONVERSE' in
its corporate name has become so Identified with the
corporation that whenever used, it designates to the
mind of the public that particular corporation
o sales made by a single witness who had never
dealt with the petitioner . . . the entry of Opposer's
[petitioner's] goods in the Philippines were not only
effected in a very insignificant quantity but without
the opposer [petitioner] having a direct or indirect
hand in the transaction so as to be made the basis
for trademark pre- exemption
o Opposer's [petitioner] proof of its corporate
personality cannot establish the use of the word
"CONVERSE" in any sense, as it is already
stipulated that it is not licensed to do business in the
Philippines, and is not doing business of its own in
the Philippines
o also stipulated that opposer [petitioner], in
manufacturing rubber shoes uses thereon the
trademark "CHUCK TAYLOR" and "ALL STAR and
DEVICE" and none other
MR denied; petitioner filed petition for review
ISSUE: whether or not the respondent's partial appropriation of
petitioner's corporate name is of such character that it is calculated
to deceive or confuse the public to the injury of the petitioner to
which the name belongs
RULING:
A trade name is any individual name or surname, firm
name, device or word used by manufacturers, industrialists,
merchants and others to identify their businesses, vocations
or occupations. It refers to the business and its goodwill
while trademark refers to the goods
o The ownership of a trademark or tradename is a
property right which the owner is entitled to protect
"since there is damage to him from confusion or
reputation or goodwill in the mind of the public as
well as from confusion of goods
o The modern trend is to give emphasis to the
unfairness of the acts and to classify and treat the
issue as fraud
From a cursory appreciation of the petitioner's corporate
name "CONVERSE RUBBER CORPORATION,' it is
evident that the word "CONVERSE" is the dominant word
which Identifies petitioner from other corporations engaged
in similar business
o Respondent, in the stipulation of facts, admitted
petitioner's existence since 1946 as a duly organized
foreign corporation engaged in the manufacture of
rubber shoes This admission shows its knowledge
of the reputation and business of petitioner even
before it applied for registration of the trademark in
question
o THUS respondent has no right to appropriate the
same for use on its products which are similar to
those being produced by petitioner
A corporation is entitled to the cancellation of a
mark that is confusingly similar to its
corporate name
Appropriation by another of the dominant part
of a corporate name is an infringement
o Respondent's witness had no Idea why respondent
chose "UNIVERSAL CONVERSE" as trademark and
the record discloses no reasonable explanation for
respondent's use of the word "CONVERSE" in its
trademark
Such unexplained use by respondent
of the dominant word of petitioner's
corporate name lends itself open to
the suspicion of fraudulent motive to
trade upon petitioner's reputation
o On the other hand, the testimony of petitioner's
witness, who is a legitimate trader as well as the
invoices evidencing sales of petitioner's products in
the Philippines, give credence to petitioner's claim
that it has earned a business reputation and goodwill
in this country
The sales invoices submitted by petitioner's
lone witness show that it is the word
"CONVERSE" that mainly Identifies
petitioner's products, i.e. "CONVERSE
CHUCK TAYLOR, 14 "CONVERSE ALL
STAR," 15 ALL STAR CONVERSE CHUCK
TAYLOR," 16 or "CONVERSE SHOES
CHUCK and TAYLOR."
said sales invoices provide the best
proof that there were actual sales of
petitioner's products in the country and
that there was actual use for a
protracted period of petitioner's
trademark or part thereof through
these sales
the most convincing proof of use of a
mark in commerce is testimony of
such witnesses as customers, or the
orders of buyers during a certain
period HERE, Petitioner's witness,
affirmed her lack of business
connections with petitioner, has
testified as such customer, supporting
strongly petitioner's move for
trademark pre-emption
The sales of 12 to 20 pairs a month of
petitioner's rubber shoes cannot be
considered insignificant, considering
that they appear to be of high
expensive quality, which not too many
basketball players can afford to buy.
Any sale made by a legitimate trader
from his store is a commercial act
establishing trademark rights since
such sales are made in due course of
business to the general public, not
only to limited individual Such actual
sale of goods in the local market
establishes trademark use which
serves as the basis for any action
aimed at trademark pre- exemption
Moreover, while Converse Rubber
Corporation is not licensed to do
business in the country and is not
actually doing business here, it does
not mean that its goods are not being
sold here or that it has not earned a
reputation or goodwill as regards its
products
Thus, contrary to the determination of the
respondent Director of Patents, the word
"CONVERSE" has grown to be Identified with
petitioner's products, and in this sense, has
acquired a second meaning within the context
of trademark and tradename laws
Another factor why respondent's applications should be
denied is the confusing similarity between its trademark
"UNIVERSAL CONVERSE AND DEVICE" and petitioner's
corporate name and/or its trademarks "CHUCK TAYLOR"
and "ALL STAR DEVICE" which could confuse the
purchasing public to the prejudice of petitioner
o The trademark of respondent "UNIVERSAL
CONVERSE and DEVICE" is imprinted in a circular
manner on the side of its rubber shoes. Also, the
trademark of petitioner which reads "CONVERSE
CHUCK TAYLOR" is imprinted on a circular base
attached to the side of its rubber shoes
o The deteminative factor in ascertaining whether or
not marks are confusingly similar to each other "is
not whether the challenged mark would actually
cause confusion or deception of the purchasers but
whether the use of such mark would likely cause
confusion or mistake on the part of the buying public
Sufficient: similarity between the two labels is
such that there is a possibility or likelihood of
the purchaser of the older brand mistaking
the new brand for it."
Even if not all the details just mentioned were
identical, with the general appearance alone
of the two products, any ordinary, or even
perhaps even [sic] a not too perceptive and
discriminating customer could be deceived
When the law speaks co-purchaser,"
the reference is to ordinary average
purchaser It is not necessary in either
case that the resemblance be
sufficient to deceive experts, dealers,
or other persons specially familiar with
the trademark or goods involve
The similarity in the general
appearance of respondent's trademark
and that of petitioner would evidently
create a likelihood of confusion among
the purchasing public
But even assuming, that the trademark sought
to be registered by respondent is distinctively
dissimilar from those of the petitioner, the
likelihood of confusion would still subsists, not
on the purchaser's perception of the goods
but on the origins thereof By appropriating
the word "CONVERSE," respondent's
products are likely to be mistaken as having
been produced by petitioner THUS the risk of
damage is not limited to a possible confusion
of goods but also includes confusion of
reputation if the public could reasonably
assume that the goods of the parties
originated from the same source
Director of Patents erred in concluding that since the
petitioner is not licensed to do business in the country and
is actually not doing business on its own in the Philippines,
it has no name to protect in the forum and thus, it is futile for
it to establish that "CONVERSE" as part of its corporate
name identifies its rubber shoes
o JURISPRUDENCE (La Chemise Lacoste case): a
foreign corporation has a right to maintain an action
in the forum even if it is not licensed to do business
and is not actually doing business on its own therein
Since sole purpose of the action is to protect
its reputation, its corporate name, its goodwill
whenever that reputation, corporate name or
goodwill have, through the natural
development of its trade, established
themselves.
o This is consistent with the Convention of the Union
of Paris for the Protection of Industrial Property to
which the Philippines became a party on September
27, 1965. Article 8 thereof provides that "a trade
name [corporate name] shall be protected in all the
countries of the Union without the obligation of filing
or registration, whether or not it forms part of the
trademark"
object of the Convention is to accord a national
of a member nation extensive protection
"against infringement and other types of
unfair competition"
Convention implemented by Sec. 37 of RA No.
166 Trademark Law: Sec. 37. Rights of
Foreign Registrants-Persons who are
nationals of, domiciled or have a bona fide or
effective business or commercial
establishment in any foreign country, which is
a party to an international convention or treaty
relating to marks or tradenames on the
repression of unfair competition to which the
Philippines may be a party, shall be entitled to
the benefits and subject to the provisions of
this Act ...Tradenames of persons described
in the first paragraph of this section shall be
protected without the obligation of filing or
registration whether or not they form parts of
marks.
DISPOSITIVE: decision of the Director of Patents is hereby set
aside and a new one entered denying Respondent Universal
Rubber Products, Inc.'s application for registration of the trademark
"UNIVERSAL CONVERSE AND DEVICE" on its rubber shoes and
slippers
16. McDonalds Corp. v. L.C. Big Mak Burger, Inc, G.R. No.
143993, August 18, 2004. - Kite
Topic: Trademark Infringement/Unfair Competition
Facts:
McDonalds is a corp organized under the laws of Delaware,
US. It owns a family of marks including Big Mac mark for
its double-decker hamburger sandwich.
Oct. 16, 1979: McDonalds registered this trademark with
the US Trademark Registry
September 1981: McDonalds introduced its Big Mac
hamburger in PH
July 18, 1985: PBPTT (now IPO) allowed registration of the
Big Mac mark in the Principal Register based on its Home
Registration in the US
1982-1990: McDonalds spent P10.5M in advertisement for
Big Mac hamburger alone
Mc George, a domestic corp, is McDonalds Philippine
franchisee
LC Big Mak Burger Inc. operates fast-food outlets and snack
vans in Metro Manila and nearby provinces. Its menu
includes hamburger.
Oct. 21, 1988: LC Big Mak applied with PBPTT for the
registration of the Big Mak mark for its hamburger.
McDonalds opposed on the ground that Big Mak was a
colorable imitation of its registered Big Mac mark for the
same food products. It also informed Dy, chairman of the
Board of Directors of LC Big Mak, of its exclusive right to
the Big Mac mark and requested him to desist from using
the Big Mac mark or any similar mark.
June 6, 2000: McDonalds sued LC Big Mak in RTC Makati
for trademark infringement and unfair competition.
LC Big Mak: McDonalds does not have an exclusive right to
the Big Mac mark or to any other similar mark. Isaiyas
and Topacio registered the same mark prior to McDonalds
registration; Big Mak is not a colorable imitation of Big
Mac
McDonalds: while Isaiyas and Topacio registered the Big
Mac mark ahead of time, Isaiyas did so only in the
Supplemental Register of the PBPTT and such registration
does not provide any protection.
McDonalds disclosed that it had acquired Topacios rights
to his registration in a Deed of Assignment dated May 18,
1981.
RTC: LC Big Mak liable for trademark infringement and
unfair competition
CA reversed RTC
Issues:
1. WON LC Big Mak used the words Big Mak not only as
part of the corporate name but also as a trademark for their
hamburger products?
2. WON LC Big Mak is liable for trademark infringement and
unfair competition?
Ruling:
Manner LC Big Mak used Big Mak in their Business
The plastic wrappings and plastic bags used by LC Big Mak
for their hamburger bore the words Big Mak. Its cash invoices
simply refer to their hamburger sandwiches as Big Mak. The
snack vans carry the words LC Big Mak Burger, Inc.
It was only during trial that LC presented in evidence the
plastic wrappers and bags for their hamburger sandwiches relied
on by the CA.
LCs plastic wrappers and bags were identical with those
McDonalds presented during the hearings for the injunctive writ
except that the letters LC and the words Burger, Inc. in LCs
evidence were added above and below the words Big Mak.
Since the complaint was based on facts existing before and
during the hearings on the injunctive writ, the facts established
during those hearings are the proper factual bases for the
disposition of the issues raised in the petition.
Trademark Infringement
RA 166, Sec. 22: trademark infringement:
Infringement, what constitutes. Any person who [1] shall
use, without the consent of the registrant, any reproduction,
counterfeit, copy or colorable imitation of any registered
mark or trade-name in connection with the sale, offering for
sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or
origin of such goods or services, or identity of such business;
or [2] reproduce, counterfeit, copy, or colorably imitate any
such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements
intended to be used uponor in connection with such goods,
business or services, shall be liable to a civil action by the
registrant for any or all of the remedies herein provided.
McDonalds base its cause of action under the first part of
Sec. 22(LC allegedly used, w/o its consent, a colourable
imitation of the Big Mac mark in advertising and selling
LCs hamburger sandwiches. This likely caused confusion in
the mind of the purchasing public on the source of the
hamburgers or the identity of the business.
Elements of trademark infringement:
1. validity of plaintiffs mark
2. plaintiffs ownership of the mark
3. use of the mark or its colourable imitation by the alleged
infringer results in likelihood of confusion.
Likelihood of confusion is the gravamen of trademark
infringement.
A mark is valid if it is distinctive and thus not barred from
registration under RA 166, Sec. 4.
Once registered, not only the marks validity but also the
registrants ownership of the mark is prima facie presumed.
LC: in the Big Mac mark, only the word Mac is valid
because the word Big is generic and descriptive and thus
incapable of exclusive appropriation
SC: The Big Mac mark is neither generic nor descriptive.
Generic marks are commonly used as the name or description
of a kind of goods such as Lite for beer

or Chocolate Fudge for
chocolate soda drink.
Descriptive marks convey the characteristics, functions,
qualities or ingredients of a product to one who has never seen it or
does not know it exists, such as Arthriticare for arthritis
medication
Big Mac falls under the class of fanciful or arbitrary marks
as it bears no logical relation to the actual characteristics of the
product it represents.As such, it is highly distinctive and thus valid.
Duly established is McDonalds exclusive ownership of the
Big Mac mark.
Although Topacio and the Isaiyas Group registered the Big
Mac mark ahead of McDonalds, Topacio, as petitioners disclosed,
had already assigned his rights to McDonalds.
The Isaiyas Group, on the other hand, registered its
trademark only in the Supplemental Register. A mark which is not
registered in the Principal Register, and thus not distinctive, has
no real protection.
Confusion arising from the use of similar or colorable imitation
marks
Confusion of goods (product confusion) - the ordinarily
prudent purchaser would be induced to purchase one
product in the belief that he was purchasing the other
Confusion of business (source or origin confusion)- though
the goods of the parties are different, the defendants
product is such as might reasonably be assumed to originate
with the plaintiff, and the public would then be deceived
either into that belief or into the belief that there is some
connection between the plaintiff and defendant which, in
fact, does not exist
First trademark law (Act 666), infringement was limited to
confusion of goods only (goods of a similar kind)
RA 166: expanded the scope of trademark infringement to
include use of the mark or its colorable imitation that is
likely to result in confusion on the source or origin of such
goods or services, or identity of such business
McDonalds: use of the Big Mak mark results in confusion
of goods, particularly with respect to McDonalds Big Mac
burger. LCs use of the Big Mak mark in the sale of
hamburgers, the same business that McDonalds is engaged
in, results in confusion of business
LC: Big Mak hamburgers cater mainly to low-income
group while Big Mac hamburgers cater to middle and
upper income groups
SC: the likelihood of confusion of business remains, since
the low-income group might be led to believe that Big mak
hamburgers are the low-end hamburgers marketed by
McDonalds. After all, McDonalds have the exclusive right
to use the Big Mac mark. LC would benefit by associating
their low-end hamburgers, through the use of the big Mak
mark, with the high-end Big Mac hamburgers, leading to
likelihood of confusion in the identity of business
LC: Big Mak also used on other products like siopao,
noodles and pizza unlike Big Mac which is only used for
double-decker hamburgers. Big Mac burgers are sold in
Styrofoam boxes with McDonalds logo and trademark. Big
Mak burgers are in plastic wrappers and plastic bags.
McDonalds restaurants are air-conditioned w/ drive-thru
service, compared to LCs mobile vans.
These factors cannot negate the fact that LC used Big Mak
mark on hamburgers, the same food product that
McDonalds sell with the use of their registered mark Big
Mac
The registered trademark owner may use his mark on the
same or similar products, in different segments of the
market, and at different price levels depending on variations
of the products for specific segments of the market.
The registered trademark owner enjoys protection in
product and market areas that are the normal potential
expansion of his business.
2 tests in determining likelihood of confusion:
o Dominancy test- focuses on the similarity of the
prevalent features of the competing trademarks that
might cause confusion
o Holistic test- consider the entirety of the marks as
applied to the products, including the labels and
packaging, in determining confusing similarity
SC has relied on the dominancy test rather than the holistic
test. Under the dominancy test, consider the similarity of
the appearance of the product arising from the adoption of
the dominant features of the registered mark, disregarding
minor differences.
The test of dominancy is now explicitly incorporated into
law in Sec. 155.1 of the IP Code (infringement as the
colorable imitation of a registered mark xxx or a dominant
feature thereof)
Applying the dominancy test, SC found that the use of Big
Mak mark results in likelihood of confusion:
o Big Mak sounds exactly the same as Big Mac
o 1
st
word in Big Mak is exactly the same as the 1
st

word in Big Mac
o 1
st
2 letters in Mak are the same as the 1
st
2 letters in
Mac
o k sounds the same as c
o In Filipino, k replaces c in spelling.
Visually, the 2 marks have both 2 words and 6 letters.
Clearly, LC adopted in Big Mak not only the dominant but
also almost all the features of Big Mac
A person cannot distinguish Big Mac from Big Mak by
their sound. When one hears a Big Mac or Big Mak
hamburger advertisement over the radio, one would not
know whether the Mac or Mak ends with a c or k.
LCs inability to explain sufficiently how and why they came
to choose Big Mak indicates their intent to imitate Big
Mac
LC: Big Mak mark was inspired by the 1
st
names of
Maxima (mother) and Kimsoy (father)
SC: absent proof that the adoption of Big Mak mark was
due to honest mistake or was fortuitous, the inescapable
conclusion is that LC adopted Big Mak mark to ride on
the coattails of the more established Big Mac mark.
Confusion is likely to result in the public mind.
McDonalds failure to present proof of actual confusion does
not negate their claim of trademark infringement. Sec. 22
requires less stringent standard (likelihood of confusion).
While proof of actual confusion is the best evidence of
infringement, its absence is inconsequential.
Unfair Competition
Essential elements:
o Confusing similarity in the general appearance of the
goods
o Intent to deceive the public and defraud a competitor
Confusing similarity may or may not result from similarity
in the marks, but may result from other external factors in
the packaging or presentation of the goods
Intent to deceive and defraud may be inferred from the
similarity of the appearance of the goods as offered for sale
to the public. Actual fraudulent intent need not be shown.
Trademark infringement is a form of unfair competition. It
constitutes unfair competition when there is not merely
likelihood of confusion, but also actual or probable
deception on the public because of the general appearance
of the goods.
Trademark infringement w/o unfair competition: when the
infringer discloses on the labels containing the mark that he
manufactures the goods, thus preventing the public from
being deceived that the goods originate from the trademark
owner.
McDonalds: LC fraudulently passed off their hamburgers as
Big Mac hamburgers
Passing off/palming off defendant, by imitative devices on
the general appearance of the goods, misleads prospective
purchasers into buying his merchandise under the
impression that they are buying that of his competitors.
Big Mac -packaging material is a styrofoam box with the
McDonalds logo and trademark in red with block capital
letters printed on it. All letters of the Big Mac mark are
also in red and block capital letters.
Big Mak script print is in orange with only the letter B
and M being capitalized and the packaging material is
plastic wrapper.
McDonalds logo and mascot are the umbrella M and
Ronald McDonalds,
LCs mascot: chubby boy called Macky displayed or
printed between the words Big and Mak.
The dissimilarities in the packaging are minor compared to
the stark similarities in the words that give Big Mak
hamburgers the general appearance of Big Mac
hamburgers.
Section 29(a): the similarity in the general appearance of
the goods may be in the devices or words used on the
wrappings.
LC applied on their plastic wrappers and bags almost the
same words that McDonalds use on their styrofoam box.
The words Big Mak which are almost the same, aurally
and visually, as the words Big Mac. The dissimilarities in
the material and other devices are insignificant compared to
the glaring similarity in the words used in the wrappings.
Section 29(a) also provides that the defendant gives his
goods the general appearance of goods of another
manufacturer.
LCs goods are hamburgers which are also the goods of
McDonalds. If LC sold egg sandwiches only instead of
hamburger sandwiches, its use of the Big Mak mark would
not give their goods the general appearance of Big Mac
hamburgers. In such case, there is only trademark
infringement but no unfair competition.
There is no notice to the public that the Big Mak
hamburgers are products of L.C. Big Mak Burger,
Inc. Plastic wrappers and bags with the Big Mak mark
without the name L.C. Big Mak Burger, Inc. = intent to
deceive the public
LCs belated presentation of plastic wrappers and bags
bearing the name of L.C. Big Mak Burger, Inc. as the seller
of the hamburgers is an after-thought designed to exculpate
them from their unfair business conduct.
17. Levi Strauss (Phil.), Inc. v. Tony Lim, G.R. No. 162311,
December 4, 2008. - Michael
Concept/Topic: Trademark, Confusion, Infringement,
Unfair Competition, Point of Sale vs. Post-Sales
Confusion


LEVI STRAUSS (PHILS.), INC., vs TONY LIM, December 4, 2008


Facts:
Petitioner Levi Strauss (Phils.), Inc. Is a duly-registered
domestic corporation. It is a wholly-owned subsidiary of Levi
Strauss & Co. (LS & Co.) A Delaware,USA company. In 1972, LS &
Co. granted petitioner a non-exclusive license to use its registered
trademarks and trade names for the manufacture and sale of
various garment products, primarily pants, jackets, and shirts, in
the Philippines. These trademarks are registered in over 130
countries, including the Philippines, and were first used in
commerce in the Philippines in 1946.
Sometime in 1995, petitioner lodged a complaint before the
Inter-Agency Committee on Intellectual Property Rights, alleging
that an establishment owned by respondent Tony Lim, doing
business under the name Vogue Traders Clothing Company, was
engaged in the manufacture, sale, and distribution of products
similar to those of petitioner and under the brand name LIVES,
and was granted the filing of an information against respondent.
Respondent then filed his own motion for reconsideration of the
Bello resolution, the DOJ then ordered the dismissal of the
complaint.. Dissatisfied with the DOJ rulings, petitioner sought
recourse with the CA via a petition for review under Rule 43 of the
1997 Rules of Civil Procedure. On October 17, 2003, the appellate
court affirmed the dismissal of the unfair competition complaint.
The CA pointed out that to determine the likelihood of confusion,
mistake or deception, all relevant factors and circumstances should
be taken into consideration, such as the circumstances under
which the goods are sold, the class of purchasers, and the actual
occurrence or absence of confusion.
Thus, the existence of some similarities between LIVES jeans
and LEVIS garments would not ipso facto equate to fraudulent
intent on the part of respondent. The CA noted that respondent
used affirmative and precautionary distinguishing features in his
products for differentiation. The appellate court considered the
spelling and pronunciation of the marks; the difference in the
designs of the back pockets; the dissimilarity between the carton
tickets; and the pricing and sale of petitioners products in upscale
exclusive specialty shops. The CA also disregarded the theory of
post-sale confusion propounded by petitioner, relying instead on
the view that the probability of deception must be determined at
the point of sale.


Issues:
1) W/N The CA gravely erred in ruling that actual confusion is
necessary to sustain a charge of unfair competition, and that there
must be direct evidence or proof of intent to deceive the public. NO
2) W/N the CA gravely erred in ruling that respondents Lives
jeans do not unfairly compete with Levis jeans and/or that there is
no possibility that the former will be confused for the latter,
considering that respondents Lives jeans blatantly copy or
colorably imitate no less than six (6) trademarks of Levis jeans.
NO


Ruling:
1)
Generally, unfair competition consists in employing deception
or any other means contrary to good faith by which any person
shall pass off the goods manufactured by him or in which he deals,
or his business, or services for those of the one having established
goodwill, or committing any acts calculated to produce such result.
The elements of unfair competition under Article 189(1) of the
Revised Penal Code are: (a) That the offender gives his goods the
general appearance of the goods of another manufacturer or
dealer; (b) That the general appearance is shown in the (1) goods
themselves, or in the (2) wrapping of their packages, or in the (3)
device or words therein, or in (4) any other feature of their
appearance; (c) That the offender offers to sell or sells those goods
or gives other persons a chance or opportunity to do the same with
a like purpose; and (d) That there is actual intent to deceive the
public or defraud a competitor. All these elements must be proven.
In finding that probable cause for unfair competition does not
exist, the investigating prosecutor and Secretaries Guingona and
Cuevas arrived at the same conclusion that there is insufficient
evidence to prove all the elements of the crime that would allow
them to secure a conviction. Secretary Guingona discounted the
element of actual intent to deceive by taking into consideration the
differences in spelling, meaning, and phonetics between LIVES
and LEVIS, as well as the fact that respondent had registered his
own mark.
While it is true that there may be unfair competition even if the
competing mark is registered in the Intellectual Property Office, it
is equally true that the same may show prima facie good faith.
Indeed, registration does not negate unfair competition where the
goods are packed or offered for sale and passed off as those of
complainant. However, the marks registration, coupled with the
stark differences between the competing marks, negate the
existence of actual intent to deceive, in this particular case.
2)
Petitioner argues that the element of intent to deceive
may be inferred from the similarity of the goods or their
appearance. The argument is specious on two fronts. First,
where the similarity in the appearance of the goods as
packed and offered for sale is so striking, intent to deceive
may be inferred. However, as found by the investigating
prosecutor and the DOJ Secretaries, striking similarity
between the competing goods is not present. Second, the
confusing similarity of the goods was precisely in issue
during the preliminary investigation. As such, the element
of intent to deceive could not arise without the investigating
prosecutors or the DOJ Secretarys finding that such
confusing similarity exists. Since confusing similarity was
not found, the element of fraud or deception could not be
inferred.
We cannot sustain Secretary Bellos opinion that to
establish probable cause, it is enough that the respondent
gave to his product the general appearance of the product of
petitioner. It bears stresing that that is only one element of
unfair competition. All others must be shown to exist. More
importantly, the likelihood of confusion exists not only if
there is confusing similarity. It should also be likely to
cause confusion or mistake or deceive purchasers. Thus, the
CA correctly ruled that the mere fact that some
resemblance can be pointed out between the marks used
does not in itself prove unfair competition. To reiterate, the
resemblance must be such as is likely to deceive the
ordinary purchaser exercising ordinary care.
The consumer survey alone does not equate to actual
confusion. We note that the survey was made by showing
the interviewees actual samples of petitioners and
respondents respective products, approximately five feet
away from them. From that distance, they were asked to
identify the jeans brand and state the reasons for thinking
so. This method discounted the possibility that the ordinary
intelligent buyer would be able to closely scrutinize, and
even fit, the jeans to determine if they were LEVIS or not.
It also ignored that a consumer would consider the price of
the competing goods when choosing a brand of jeans. It is
undisputed that LIVES jeans are priced much lower than
LEVIS.


18. Ang v. Teodoro, G.R. No. 48226, December 14, 1942. -
Arianne
Important case, read in full.
Topics covered: confusion, dilution, doctrine of secondary
meaning, injury & damages
FACTS
Respondent Toribio Teodoro, has continuously used "Ang Tibay," both
as a trade-mark and as a trade-name, in the manufacture and sale of slippers,
shoes, and indoor baseballs since 1910. He formally registered it as trade-
mark on September 29, 1915, and as trade-name on January 3, 1933.
Petitioner registered the same trade-mark "Ang Tibay" for pants and
shirts on April 11, 1932, and established a factory for the manufacture of said
articles in the year 1937. In that year she advertised the factory which she had
just built and it was when this was brought to the attention of the herein
respondent filed a complaint against the petitioner.
The trial court absolved the complaint on the grounds that the two
trademarks are dissimilar and are used on different and non-competing
goods; that there had been no exclusive use of the trade-mark by the
plaintiff(petitioner); and that there had been no fraud in the use of the said
trade-mark by the defendant because the goods on which it is used are
essentially different from those of the plaintiff. The Court of Appeals reversed
the trial courts judgment holding that by uninterrupted and exclusive use
since 1910 in the manufacture of slippers and shoes, respondent's trade-mark
has acquired a secondary meaning.
ISSUE
1. Whether or not the doctrine of secondary meaning can be applied
to respondents trade-mark.
2. Whether or not the goods or articles belong to the same class of
merchandise?
3. Whether or not Ang Tibay is a descriptive term?
RULING OF THE COURT
1. YES. The Function of a trade-mark is to point distinctively, either by
its own meaning or by association, to the origin or ownership of the wares to
which it is applied. Ang Tibay, as used by the respondent to designate his
wares, had exactly performed that function for 22 years before the petitioner
adopted it as a trade-mark in her own business. Ang Tibay shoes and
slippers are, by association, known throughout the Philippines as products of
the Ang Tibay factory owned and operated by the respondent. Even if Ang
Tibay, therefore, were not capable of exclusive appropriation as a trade-
mark, the application of the doctrine of secondary meaning could
nevertheless be fully sustained because, in any event, by respondents long
and exclusive use of said phrase with reference to his products and his
business, it has acquired a propriety connotation.
2. YES. In the present state of development of the law on Trade-Marks,
Unfair Competition, and Unfair Trading, the test employed by the courts to
determine whether noncompeting goods are or are not of the same class is
confusion as to the origin of the goods of the second user. Although two
noncompeting articles may be classified under two different classes by the
Patent Office because they are deemed not to possess the same descriptive
properties, they would, nevertheless, be held by the courts to belong to the
same class if the simultaneous use on them of identical or closely similar
trade-marks would be likely to cause confusion as to the origin, or personal
source, of the second user's goods. They would be considered as not falling
under the same class only if they are so dissimilar or so foreign to each other
as to make it unlikely that the purchaser would think the first user made the
second user's goods.
We think reasonable men may not disagree that shoes and shirts are
not as unrelated as fountain pens and razor blades, for instance. It is
certainly not far-fetched to surmise that the selection by petitioner of the
same trade-mark for pants and shirts was motivated by a desire to get a free
ride on the reputation and selling power it has acquired at the hands of the
respondent.
3. NO. "Ang Tibay" is not a descriptive term within the meaning of the
Trade-Mark Law but rather a fanciful or coined phrase which may properly
and legally be appropriated as a trade-mark or trade-name. In this
connection we do not fail to note that when the petitioner herself took the
trouble and expense of securing the registration of these same words as a
trademark of her products she or her attorney as well as the Director of
Commerce was undoubtedly convinced that said words (Ang Tibay) were not
a descriptive term and hence could be legally used and validly registered as a
trade-mark.
ALSO: Other famous cases cited on the margin, wherein the
courts granted injunctive relief, involved the following trade-marks
or trade-names:
"Kodak," for cameras and photographic supplies, against its
use for bicycles.


"Penslar," for medicines and toilet articles, against its use
for cigars;


"Rolls-Royce," for automobiles. against its use for radio
tubes;


Vogue," as the name of a magazine, against its use for
hats;


"Kotex," for sanitary napkins, against the use of "Rotex" for
vaginal syringes;


"Sun-Maid," for raisins, against its use for flour;


"Yale," for locks and keys, against its use for electric
flashlights;
"Waterman," for fountain pens, against its use for razor
blades.




19. Asia Brewery, Inc v. Court of Appeals and San Miguel
Corporation, G.R. No. 103543, July 5, 1993. - Kester
Topic: Test of Dominancy for infringement cases & unfair competition
Facts:
San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc.
(ABI) for infringement of trademark and unfair competition on account of
the latter's BEER PALE PILSEN or BEER NA BEER product which has been
competing with SMC's SAN MIGUEL PALE PILSEN for a share of the local
beer market.
The trial court dismissed SMC's complaint because ABI "has not committed
trademark infringement or unfair competition against" SMC
On appeal by SMC, the Court of Appeals reversed the decision rendered by
the trial court, finding the defendant Asia Brewery Incorporated GUILTY of
infringement of trademark and unfair competition. ABI then filed a petition
for certiorari.
Issue:
1. Do the words PALE PILSEN as part of ABIs trademark constitute
infringement of SMCs trademark?
2. Does the use of a similar looking bottle (but not identical) constitute unfair
competition?
Ruling:
1. No. The Supreme Court said it does not constitute an infringement as the
words PALE PILSEN, which are part of ABIs trademark, are generic words
descriptive of the color (pale), of a type of beer (pilsen), which is a light
bohemian beer with a strong hops flavor that originated in the City of Pilsen,
Czechislovakia and became famous in the Middle Ages.
Infringement is determined by the "test of dominancy" rather than
by differences or variations in the details of one trademark and of
another. The rule was formulated in Co Tiong Sa vs. Director of
Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of
Patents, 100 Phil. 214, 216-217 (1956), thus:
It has been consistently held that the question of
infringement of a trademark is to be determined by
the test of dominancy. Similarity in size, form and
color, while relevant, is not conclusive. If the
competing trademark contains the main or essential
or dominant features of another, and confusion and
deception is likely to result, infringement takes place.
Duplication or imitation is not necessary; nor it is
necessary that the infringing label should suggest an
effort to imitate.
Besides the dissimilarity in their names, the following other dissimilarities in the trade
dress or appearance of the competing products abound:
(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.
The BEER PALE PILSEN bottle has a fat, bulging neck.
(2) The words "pale pilsen" on SMC's label are printed in bold and laced letters along a
diagonal band, whereas the words "pale pilsen" on ABI's bottle are half the size and
printed in slender block letters on a straighthorizontal band. (See Exhibit "8-a".).
(3) The names of the manufacturers are prominently printed on their respective bottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery, Philippines," whereas
BEER PALE PILSEN is "Especially brewed and bottled by Asia Brewery Incorporated,
Philippines."
(4) On the back of ABI's bottle is printed in big, bold letters, under a row of flower buds
and leaves, its copyrighted slogan:
"BEER NA BEER!"
Whereas SMC's bottle carries no slogan.
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the
BEER PALE PILSEN bottle has no logo.
(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the
words "San Miguel Brewery Philippines" encircling the same.
The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the center,
surrounded by the words "Asia Brewery Incorporated Philippines."
(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently
at P4.25 per bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One
who pays only P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen
from the storekeeper or bartender.
The Supreme Court further said that the words "pale pilsen" may
not be appropriated by SMC for its exclusive use even if they are
part of its registered trademark. No one may appropriate generic or
descriptive words. They belong to the public domain.
2. The fact that BEER PALE PILSEN like SAN MIGUEL PALE
PILSEN is bottled in amber-colored steinie bottles of 320 ml.
capacity and is also advertised in print, broadcast, and television
media, does not necessarily constitute unfair competition.
Unfair competition is the employment of deception or any
other means contrary to good faith by which a person shall
pass off the goods manufactured by him or in which he
deals, or his business, or services, for those of another who
has already established goodwill for his similar goods,
business or services, or any acts calculated to produce the
same result
In this case, the question to be determined is whether ABI is using a name or
mark for its beer that has previously come to designate SMC's beer, or
whether ABI is passing off its BEER PALE PILSEN as SMC's SAN MIGUEL
PALE PILSEN.
The use of ABI of the steinie bottle, similar but not identical to the SAN
MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABI's
counsel, SMC did not invent but merely borrowed the steinie bottle from
abroad and it claims neither patent nor trademark protection for that bottle
shape and design
SMC's being the first to use the steinie bottle does not give SMC a vested right
to use it to the exclusion of everyone else. Being of functional or common use,
and not the exclusive invention of any one, it is available to all who might
need to use it within the industry. Nobody can acquire any exclusive right to
market articles supplying simple human needs in containers or wrappers of
the general form, size and character commonly and immediately used in
marketing such articles
That the ABI bottle has a 320 ml. capacity is not due to a
desire to imitate SMC's bottle because that bottle capacity is
the standard prescribed under Metrication Circular No. 778,
dated 4 December 1979, of the Department of Trade, Metric
System Board.
With regard to the white label of both beer bottles, ABI
explained that it used the color white for its label because
white presents the strongest contrast to the amber color of
ABI's bottle; it is also the most economical to use on labels,
and the easiest to "bake" in the furnace (p. 16, TSN of
September 20, 1988). No one can have a monopoly of the
color amber for bottles, nor of white for labels, nor of the
rectangular shape which is the usual configuration of labels.
Needless to say, the shape of the bottle and of the label is
unimportant. What is all important is the name of the
product written on the label of the bottle for that is how one
beer may be distinguished form the others.
20. In Re Petition for Registration of Trademark Freedom
under Section 4 of Republic Act No. 166 filed in the Philippines
Patent Office bearing Serial No. 38 Co Tiong Sa v. Director of
Patents, 95 Phil. 1, 4, G.R. No. L-5378, May 24, 1954. - Mars
Co Tiong Sa vs. Director of Patents, Saw Woo Chiong
and Co.
Concept: Test of Dominancy
Facts:
Applicant: Co Tiong Sa (Co)
Oppositor: Saw Woo Chiong and Co. (Saw)
Co Tiong Sa (Co) applied for registration of the
trademark Freedom and its corresponding design with
the Director of Patents. Director of Patents denied the
registration.
Co has used the trademark on undershirts and T-shirts
since March 1947. The trademark sought to be registered
is "Freedom". [Co attached facsimiles to the original
application showing the labels.
Exhibit D-1[Cos label]: The word "Freedom" is in hand
print, with a slight to the right. The said word is preceded
by a triangle, with the letter "F" inside and small letters
"H.L." under. A capital letter "L" is on the lower right-
hand corner; and all of these are enclosed in a rectangle
of double lines.
Exhibit D-2: The label is the same word "Freedom" with a
capital letter "M" above it, a flourish under the word
"Freedom", and the words "HIGH QUALITY" thereunder.
The label used for boxes is similar to label Exhibit D-1,
except that the rectangle is in a heavy line and is longer.


Meanwhile Saw has used its trademark since 1938 and it
had been advertised extensively in newspapers,
magazines, etc. This trademark was registered in 1947 in
the Bureau of Commerce and re-registered in the Patent
Office on September 22, 1948. This trademark is used not
only on shirts, but also on polo shirts, undershirts,
pajamas, skippers, and T-shirts, although in the year 1947
Saw discontinued the manufacture of shirts and skippers.
o Exhibit D-3: The word "Freeman" is in hand print,
with a right slant, above the middle of which is a
vignette of a man wearing a to what (NB: This is
the original text; might be HAT), which vignette is
preceded by the small word "The" in print and
followed by two parallel lines close to each other,
and the words "PERFECT WEAR" in smaller
letters under the word "FREEMAN".
Director of Patents:
1. The central idea of each trademark give the same general
impression (Freedom vs. Freeman). Hence, they are confusingly
similar.
2. The oppositor is not required to introduce testimony on
substantiate the claim made in its opposition.
Issue 1: Whether the use of the marks involved would be likely
to cause confusion or mistake in the mind of the public or to
deceive purchasers (Yes)


If the details of the two trademarks are to be considered,
many differences would be noted that would enable a
careful and scrutinizing eye to distinguish one trademark
from the other.
o Vignette of a man wearing a to what (hat?) vs.
Triangle with the letter "F" on the right hand
corner of the label
o No rectangle enclosing the mark vs. Rectangle
enclosing the mark
However, differences of variations in the details of one
trademark and of another are not the legally accepted
tests of similarity in trademarks.


Test of Dominancy
The question of infringement of a trademark is to be
determined by the test of dominancy. If the competing
trademark contains the main or essential or dominant
features of another, and confusion and deception is
likely to result, infringement takes place. Duplication
or limitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate.
Test of Confusion in the Mind of the Public/Unwary
Customers/Purchasers: Whether the public is likely to be
deceived is a question of fact.
When a person sees an object, a central or dominant idea
or picture thereof is formed in his mind. In this mind-
picture the slight or minor decorations are lost sight of,
and the central figure only is retained.
For a customer or purchaser who sees a label, he retains
in his mind the dominant characteristics or features or
central idea in the label, and does not retain or forgets the
attendant decorations, flourishes, or variations. The
ordinary customer does not scrutinize the details of the
label; he forgets or overlooks these, but retains a
general impression, or a central figure, or a
dominant characteristic.
Reason why he only retains the central figure: The
average person usually will not, and often can not, take in
at a casual glance all, or even a large part of the details of
what he looks at.
The average buyer usually seeks a sign, some special,
easily remembered earmarks of the brand he has in mind.
It may be the color, sound, design, or a peculiar shape or
name. Once his eyes see that or his ear hears it, he is
satisfied. An unfair competitor need not copy the
entire mark to accomplish his fraudulent
purpose. It is enough if he takes the one feature
which the average buyer is likely to remember.
(Nims, The Law of Unfair Competition and Trademarks)
In order to constitute infringement, it is not necessary
that the trademark be literally copied. Neither is it
necessary that every word be appropriated. There may be
infringement where the substantial and distinctive part of
the trademark is copied or imitated. The resemblances
may so far dominate the differences as to be likely to
deceive ordinary purchasers.
Test of Dominancy Applied
The word "FREEDOM" conveys a similar idea as the
word "FREEMAN".
The style in which both capital "F" are written are similar.
The print and slant of the letters are also similar.
An ordinary purchaser or an unsuspecting customer who
has seen the oppositor's label sometime before will not
recognize the difference between that label and
applicant's label. He may notice some variations, but he
will ignore these, believing that they are variations of the
same trademark to distinguish one kind or quality of
goods from another.
[The court enumerated examples in jurisprudence where
two words/labels were held to have the same significance
or appearance and meaning. See original]
Issue 2: Whether or not witnesses need to be presented to
prove infringement (No)
The question of similarity or dissimilarity while it
is a question of opinion, is to be determined by the court
mainly on the basis of the facsimiles or labels or pictures
submitted to the Director of Patents.
Similarity or dissimilarity can be determined by a mere
examination and comparison of the competing
trademarks. Failure on the part of the oppositor to
submit the testimony of witnesses, who are to give
opinions on the alleged similarity or dissimilarity, can
not, therefore, be a ground for a dismissal of an
opposition.


21. Fruit of the Loom, Incorporated v. Court of Appeals and
General Garments Corporation, G.R. L-32747, November 29, 1984.
- Elle
Topic: Trademark Infringement, Dominant v Holistic Test


Petitioner, a foreign corporation, is the registrant of a
trademark, FRUIT OF THE LOOM, in the Phil Patent
Office. It was issued two Certificates of Registration: 6227
on 1957 for mens, womens and childrens underwear,
including womens panties and 6680 on 1958 for knitted,
netted, textile fabrics.
Respondent, a domestic corporation, is the registrant of a
trademark FRUIT FOR EVE in the Phil Patent Office, issued
with Certificate of Registration 10160 on 1963 covering
womens panties and pajamas.
Thus: petitioner filed a complaint for infringement of
trademark and unfair competition, as respondents
trademark is confusingly similar to the petitioners.
Note admitted admissions during pre-trial: Fruit of the
Loom registered without the notice Reg. Phil. Patent Off.
while Fruit of Eve has, and that petitioner didnt protest
when the respondent registered.
WON respondents FRUIT OF EVE and its hangtag are confusingly
similar to petitioners FRUIT OF THE LOOM and its hangtag so as
to constitute an infringement of the latters trademark rights and
justify the cancellation of the former. NO.
Petitioner: The word FRUIT is not a generic word, which isnt
capable of exclusive appropriation by petitioner. The color get up
and general appearance of respondents hang tag, a red apple, is a
colorable imitation to that of petitioners, and upon seeing the
word FRUIT and the red apple, average and ordinary consumers
would be led to believe that the respondents products are that of
the petitioners.
Respondent: trademark used on ladies panties and pajamas, while
petitioners is used even on mens underwear and pajamas.
There is infringement of trademark when the use of the
mark involved would be likely to cause confusion or mistake
in the mind of the public or to deceive purchasers as to the
origin or source of the commodity.
There is no better evidence that a visual comparison of the
two hangtags. A comparison of the words FRUIT is not the
only determinant factor, but the trademarks in their entirety
as they appear must also be considered in relation to the
goods to which they are attached. Focus not only on the
predominant words but also on the other features appearing
in both labels in order that he may draw his conclusion
whether one is confusingly similar to the other.
Here: the lone similar word is FRUIT. By mere pronouncing
the two marks, it could hardly be said that it will provoke
confusion as to mistake one for the other. Standing by itself,
FRUIT OF THE LOOM is wholly different from FRUIT FOR
EVE. The dominant feature of both trademarks is not the
word FRUIT for even in the printing of the trademark in
both hang tags, the word FRUIT is not at all made dominant
over the other words.
As to the design and coloring scheme of the hang tags, while
there are similarities in the two marks: the red apple at the
center of each mark, there are also differences which are
glaring and striking to the eye such as:
a. The shape of petitioner's hang tag is
round with a base that looks like a paper rolled a few
inches in both ends; while that of private respondent
is plain rectangle without any base.
b. The designs differ. Petitioner's
trademark is written in almost semi-circle while that
of private respondent is written in straight line in
bigger letters than petitioner's. Private respondent's
tag has only an apple in its center but that of
petitioner has also clusters of grapes that surround
the apple in the center.
c. The colors of the hangtag are also very
distinct from each other. Petitioner's hangtag is fight
brown while that of respondent is pink with a white
colored centerpiece. The apples which are the only
similarities in the hangtag are differently colored.
Petitioner's apple is colored dark red, while that of
private respondent is light red.
Thus: The similarities of the competing trademarks in this
case are completely lost in the substantial differences in the
design and general appearance of their respective hang tags.
The trademarks FRUIT OF THE LOOM and FRUIT FOR
EVE do not resemble each other as to confuse or deceive an
ordinary purchaser. The ordinary purchaser must be
thought of as having, and credited with, at least a modicum
of intelligence to be able to see the obvious differences
between the two trademarks in question. Furthermore, a
person who buys petitioner's products and starts to have a
liking for it, will not get confused and reach out for private
respondent's products when she goes to a garment store.
Denied.
22. Del Monte Corporation and Philippine Packing Corporation
v. Court of Appeals and Sunshine Sauce Manufacturing Industries,
G.R. No. 78325, January 25, 1990. - Andrew
Holistic Test
DEL MONTE CORPORATION and PHILIPPINE PACKING
CORPORATION vs. CA and SUNSHINE SAUCE
MANUFACTURING INDUSTRIES
Facts:
Del Monte Corp is a foreign company organized under the laws of the
US and not engaged in business in the Philippines. Philippine Packing
Corp is a domestic corporation duly organized under the laws of the
Philippines. Del Monte granted Philpack the right to manufacture,
distribute and sell in the Philippines various agricultural products,
including catsup, under the Del Monte trademark and logo.
Del Monte authorized Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration, for which it was
granted Certificate of Trademark Registration No. SR-913 by the
Philippine Patent Office under the Supplemental Register. Del Monte also
obtained two registration certificates for its trademark "DEL MONTE"
and its logo.
Respondent Sunshine Sauce Manufacturing Industries was issued a
Certificate of Registration by the Bureau of Domestic Trade in 1980, to
engage in the manufacture, packing, distribution and sale of various kinds
of sauce, identified by the logo Sunshine Fruit Catsup. Their logo was
registered in the Supplemental Register in 1983. The product was
contained in various kinds of bottles, including the Del Monte bottle,
which respondent bought from junk shops for recycling.
Having received reports that the Sunshine was using its exclusively
designed bottles and a logo confusingly similar to Del Monte's, Philpack
and Del Monte filed a complaint against the respondent for infringement
of trademark and unfair competition.
Sunshine alleged that it had ceased to use the Del Monte bottle and
that its logo was substantially different from the Del Monte logo and
would not confuse the buying public to the detriment of the petitioners.
The RTC dismissed the complaint. It held that there were substantial
differences between the logos or trademarks of the parties; that the
defendant had ceased using the petitioners' bottles; and that the defendant
became the owner of the said bottles upon its purchase thereof from the
junk yards; and that the complainants had failed to establish the
defendant's malice or bad faith, an essential element of infringement of
trademark or unfair competition.
This decision was affirmed by the Court of Appeals, hence this
petition
Issue:
1. Whether respondent are liable for infringement of trademark and
unfair competition? (Yes)
2. Whether respondent is guilty of infringement for having used the Del
Monte bottle (Yes)
Ratio:
On the first Issue, side-by-side comparison, as done by the lower courts,
is not the final test of similarity. Ordinary buyers are usually in a hurry
and dont make such scrutiny. The question whether the general
confusion made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his
confounding it with the original. The general impression of the ordinary
purchaser, buying under the normally prevalent conditions in trade and
giving the attention such purchasers usually give in buying that class of
goods is the touchstone.
In making purchases, the consumer must depend upon his recollection of
the appearance of the product which he intends to purchase. The buyer
having in mind the mark/label of the respondent must rely upon his
memory of the petitioner's mark. Unlike the judge who has ample time to
minutely examine the labels in question in the comfort of his sala, the
ordinary shopper does not enjoy the same opportunity.
To determine whether a trademark has been infringed, we must consider
the mark as a whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of it. The
court therefore should be guided by its first impression, for a buyer acts
quickly and is governed by a casual glance, the value of which may be
dissipated as soon as the court assumes to analyze carefully the respective
features of the mark.
In cases of infringement and unfair competition the court should be
conscious of the fact that marks need not be identical. A confusing
similarity will justify the intervention of equity. The judge must be aware
of the fact that usually a defendant in cases of infringement does not
normally copy but makes only colorable changes. The most successful
form of copying is to employ enough points of similarity to confuse the
public with enough points of difference to confuse the courts.
The CA failed to take into consideration factors which should have
affected its conclusion, to wit: age, training and education of the usual
purchaser, the nature and cost of the article, whether the article is bought
for immediate consumption and also the conditions under which it is
usually purchased . Among these, what essentially determines the attitude
of the purchaser is the cost of the goods. An ordinary buyer does not
exercise as much prudence in buying an article for which he pays a few
centavos as he does in purchasing a more valuable thing. Mass products,
low priced articles in wide use, and matters of everyday purchase
requiring frequent replacement are bought by the casual consumer
without great care. In this latter category is catsup.
In this case, the Sunshine label is a colorable imitation of the Del Monte
trademark. The predominant colors used in the Del Monte label are green
and red-orange, the same with Sunshine. The word "catsup" in both
bottles is printed in white and the style of the print/letter is the same.
Although the logo of Sunshine is not a tomato, the figure nevertheless
approximates that of a tomato.
When a manufacturer prepares to package his product, he has a boundless
choice of words, phrases, colors and symbols sufficient to distinguish his
product from the others. When Sunshine chose, without a reasonable
explanation, to use the same colors and letters as those used by Del Monte
though the field of its selection was so broad, the inevitable conclusion is
that it was done deliberately to deceive.
On the second issue, respondent is not guilty of infringement for having
used the Del Monte bottle because the configuration of the bottle was
merely registered in the Supplemental Register. Although Del Monte has
actual use of the bottle's configuration, they cannot claim exclusive use
thereof because it has not been registered in the Principal Register.
However, we find that Sunshine, despite the many choices available to it
and notwithstanding that the caution "Del Monte Corporation, Not to be
Refilled" was embossed on the bottle, still opted to use the petitioners'
bottle to market a product which Philpack also produces. This clearly
shows the private respondent's bad faith and its intention to capitalize on
the Del Montes reputation and goodwill and pass off its own product as
that of Del Monte.
The lower court declared that the registration of the Sunshine label belied
the company's malicious intent to imitate petitioner's product however, it
is to be noted that the Sunshine label was registered not in the Principal
Register but only in the Supplemental Register where the presumption of
the validity of the trademark, the registrant's ownership of the mark and
his right to its exclusive use are all absent. Since registration was only in
the Supplemental Register, this did not vest the registrant with the
exclusive right to use the label nor did it give rise to the presumption of
the validity of the registration.
As Sunshine's label is an infringement of the Del Monte's trademark, law
and equity call for the cancellation of the private respondent's registration
and withdrawal of all its products bearing the questioned label from the
market. With regard to the use of Del Monte's bottle, the same constitutes
unfair competition; hence, the respondent should be permanently enjoined
from the use of such bottles.


23. La Chemise Lacoste v. Fernandez, G.R. L-63796-97 May 2,
1984, G.R. L-65659 May 21, 1984. - Miggy


24. Grotrian, Helfferich, Shulz, Th. Steinweg Nachf. v. Steinway
& Sons, 523 F.2d 1331 (2d Cir. 1975). Kester
Topic: Initial Interest Confusion


Fact
Steinway & Sons was founded by Heinrich Steinweg in the
USA while Grotrian-Steinweg was founded by his son,
Theodore Steinweg, in Germany. Theodore subsequently
migrated to the USA and sold the german company to his
employees, one of which was Grotrian who eventually got
control of the company.
F. Theodor Steinweg granted the German buyers the privilege of continuing
the business under the firm name "Successors to C. F. Theodor Steinweg" for
ten years, but because of confusion with defendant the name was changed by
agreement to "Grotrian, Helfferich, Schulz, Successors to Th. Steinweg."
Later, however, Grotrian first registered the trademark Grotrian-Steinweg in
Germany and then, in 1895, registered the name Steinweg. Grotrians use of
the latter name caused defendant to bring an action in Germany resulting in
the cancellation of the registration.
Nevertheless, in December 1918, shortly after the armistice, the Grotrian
family, plaintiff's owners, petitioned for an official change of the family name
to "Steinweg or at least Grotrian-Steinweg,"
In 1925, the company established a sales presence in the US as a Delaware
corporation called Grotrian-Steinweg Company.
Upon discovering the sales in 1928, Steinway & Sons complained to the
distributor and to Grotrian-Steinweg.
A family representative of Steinway went to Germany to discuss the problem
directly with the Grotrian-Steinweg family. Arriving at a private agreement,
the two family leaders smoked a "peace cigar

and Grotrian-Steinweg
subsequently stopped using the names "Steinweg" and "Grotrian-Steinweg"
in the US.
However, in 1952, plaintiff quietly reentered the American market on a mail
order basis and for the next twenty years regularly shipped a relatively
insignificant number of pianos to small dealers who sold only in their own
localities.
In 1961, Knut Grotrian-Steinweg (b. 1935) joined the company. In 1966, the
company formed a contract with Wurlitzer to sell Grotrian-Steinweg pianos
in the US, and the Steinway company brought suit in New York
Steinway now sued Grotrian-Steinweg claiming there was confusion.
Issue:
WON the mark Grotrian-Steinweg on the piano is similar enough to Steinway
or to Steinway & Sons that its use is likely to cause confusion, mistake or
deception of any kind.
Held:
Yes, there is a high chance of confusion and initial interest confusion.
In determining the existence of a likelihood of confusion, a number of factors
must be considered. Among these are: the strength of the Steinway marks;
the alleged infringer's purpose in adopting its marks; the degree of similarity
between the marks; the degree of similarity between the products; the
competitive proximity of the products; actual confusion; and the degree of
care likely to be exercised by consumers
THE STRENGTH OF THE STEINWAY MARKS
o the name "Steinway" is so associated in the minds of
prospective buyers and the public with defendant and its
product that plaintiff's own dealers were of the opinion that
"Steinway competition is tough, since the name STEINWAY
has a magic influence on buyers," has an "attraction" or
"excitement," and that "people seem to be swayed by this
name
PURPOSE in ADOPTING THE MARK
o The ancestral Grotrians candidly adopted the name Steinweg
for the sole purpose of exploiting the Steinweg name in
exporting pianos to English-speaking countries. Moreover,
they did this despite knowledge of defendant's trademark
and its objections.
THE DEGREE OF SIMILARITY BETWEEN AND THE
COMPETITIVE PROXIMITY OF THE PRODUCTS.
o Both parties manufacture lines of upright and grand
pianos and both pianos are considered "the very
finest and expensive pianos that cater and
administer to artists and the professions. Thus, the
products are virtually identical and compete on a
direct basis. .
ACTUAL CONFUSION.
o The court affirmed the lower court's ruling in favor of the
defendant that piano buyers would be misled in their "initial
interest" in the two piano brands; "a potential Steinway
buyer may satisfy himself that the less expensive Grotrian-
Steinweg is at least as good, if not better, than a Steinway
o Misled into an initial interest, a potential Steinway buyer may
satisfy himself that the less expensive Grotrian-Steinweg is at
least as good, if not better, than a Steinway. Deception and
confusion thus work to appropriate defendant's good will.
This confusion, or mistaken beliefs as to the companies'
interrelationships, can destroy the value of the trademark
which is intended to point to only one company.
o Thus, the mere fact that purchasers may be sophisticated or
discriminating is not sufficient to preclude the likelihood of
confusion. "'Being skilled in their own art does not
necessarily preclude their mistaking one trademark for
another when the marks are as similar as those here in issue,
and cover merchandise in the same general field. Even a
discriminating purchaser might well assume that the marks
in issue were trademarks on companion products of a single
producer.



25. Brookfield Communications, Inc. v. West Coast
Entertainment CORPORATION, 174 F.3d 1036 (9th Cir. 1999). -
Miggy
Brookfield Communications v West Coast Entertainment
Brookfield gathers and sells information about the entertainment
industry. (Think IMDB)
Brookfield initially offered software applications featuring
information such as recent film submissions, industry credits, professional
contacts, and future projects targeted Major Hollywood Stuidios.
Its consumer market with computer software featuring a searchable
database containing entertainment-industry related information marketed
under the "MovieBuff" mark around December 1993.
1996, tried to buy the domain name moviebuff.com but it was
already bought by westcoast. Bought the domain names
brookfieldcomm.com and moviebuffonline.com sold the software
and offered subscribers access to database online.
1997, applied with the Patent and Trademark Office for a
trademark for MovieBuff covering computer software
1998, Brookfield learned that West Coast intended to use
moviebuff.com to provide an online database similar to the
MovieBuff softaware.
Brookfield wrote a letter to WestCoast to cease and desist with the
complaint attached, but westcoast went ahead hence a complaint was
filed.
Brookfield filed a complaint of unfair competition and trademark
infringement on the use of moviebuff.com to give a service similar to that
of MovieBuff the software.
West Coast claims to be the Senior User, as it had used its federally
registered trademark, The Movie Buffs Movie Store since 1986, and
that their use of moviebuff.com would not cause a likelihood of confusion
with brookfields trademark.
Issue: W/N West Coast is guilty of trademark infringement and unfair
competition?
The standard test of ownership is priority of use. To acquire ownership of
a trademark it is not enough to have invented the mark first or even to
have registered it first; the party claiming ownership must have been the
first to actually use the mark in the sale of goods or services. The first to
use a mark is deemed the "senior" user and has the right to enjoin "junior"
users from using confusingly similar marks in the same industry and
market or within the senior user's natural zone of expansion.
Thus, to prove that there has been trademark infringement and unfair
competition on the part of West Coast, Brookfield needs to prove two
requisites 1) Prior Use on his part 2) That use moviebuff.com is likely
to cause confusion.
Prior Use
Brookfield: They started using MovieBuff in 1993 while West Coast
merely registered the use in 1996.
WestCoast: the Movie Buffs Movie Store constituted use of
moviebuff.com hence he should be considered the prior user. They
started using moviebuff.com before Brookfield started selling the
product MovieBuff in the internet.
A trademark owner to claim priority in a mark based on the first use date
of a similar, but technically distinct, mark--but only in the exceptionally
narrow instance where "the previously used mark is 'the legal equivalent
of the mark in question or indistinguishable therefrom. This constructive
use theory is known as "tacking," as the trademark holder essentially
seeks to "tack" his first use date in the earlier mark onto the subsequent
mark.
However, criteria for tacking is strict "The marks must create the same,
continuing commercial impression, and the later mark should not
materially differ from or alter the character of the mark attempted to be
tacked."
Court ruled that West Coast cannot tack the date of use of The Movie
Buffs Movie Store on moviebuff.com
It was very different, 3 less words on the domain name.
Situation: Movie Buffs Movie Store (West Coast)-> MovieBuff
(Brookfield) -> moviebuff.com (West Coast), Court held that Movie
Buffs Movie Store was not confusingly similar to MovieBuff as to West
Coasts own admission.
The court found that Brookfield's use of "MovieBuff" as a service mark
preceded West Coast's use.
The Lanham Act grants trademark protection only to marks that are used
to identify and to distinguish goods or services in commerce--which
typically occurs when a mark is used in conjunction with the actual sale
of goods or services.
(1) on goods when(A) it is placed in any manner on the goods or their
containers or the displays associated therewith or on the tags or labels
affixed thereto, or if the nature of the goods makes such placement
impracticable, then on documents associated with the goods or their sale,
and
(B) the goods are sold or transported in commerce, and
(2) on services when it is used or displayed in the sale or advertising of
services and the services are rendered in commerce, or the services are
rendered in more than one State or in the United States and a foreign
country and the person rendering the services is engaged in commerce in
connection with the services.
The court found that the earliest use of moviebuff.com by westcoast
was their announcement that they would be launching an online database
on 1998. As prior to that their only use of moviebuff.com was in email
correspondence. This did not meet the requirement that the mark must be
used in a way sufficiently public to identify or distinguish the marked
goods in an appropriate segment of the public mind as those of the
adopter of the mark. As their use was merely for private correspondence.
It was not disputed that Brookfield started the online database of
MovieBuff in 1997. Prior to the release of the website.
Likelihood of Confusion
Eight factor test:
Similarity of Mark Trial Court orginialy found that moviebuff.com
was different from moviebuffonline.com. However the court here said
that it was wrong of the trial court to compare the domain name. The
alleged infringing mark (moviebuff.com) should be compared with the
registered trademark (MovieBuff). Sound, Sight and Meaning -> Similar.
Relatedness of the Product Trial Court found that they were not
competitors because Brookfield provides information while WestCoast
rents and sells movies. However, both companies offer products and
services relating to the entertainment industry generally, and their
principal lines of business both relate to movies specifically. They are
competitors as both offer searchable database.
Marketing West Coast and Brookfield both utilize the Web as a
marketing and advertising facility, a factor that courts have consistently
recognized as exacerbating the likelihood of confusion. Both companies,
apparently recognizing the rapidly growing importance of Web
commerce, are maneuvering to attract customers via the Web. Not only
do they compete for the patronage of an overlapping audience on the
Web, both "MovieBuff" and "moviebuff.com" are utilized in conjunction
with Web-based products. In the Internet context, in particular, entering a
web site takes little effort--usually one click from a linked site or a search
engine's list; thus, Web surfers are more likely to be confused as to the
ownership of a web site than traditional patrons of a brick-and-mortar
store would be of a store's ownership.
Strength of the Mark - The factors that we have considered so far--the
similarity of marks, the relatedness of product offerings, and the overlap
in marketing and advertising channels--lead us to the tentative conclusion
that Brookfield has made a strong showing of likelihood of confusion.
Because the products involved are closely related and West Coast's
domain name is nearly identical to Brookfield's trademark, the strength of
the mark is of diminished importance in the likelihood of confusion
analysis
Intent - West Coast's intent does not appear to bear upon the likelihood of
confusion because it did not act with such an intent from which it is
appropriate to infer consumer confusion.
Actual confusion - is not relevant because Brookfield filed suit before
West Coast began actively using the "moviebuff.com" mark and thus
never had the opportunity to collect information on actual confusion.
The likelihood of expansion - in product lines factor is relatively
unimportant where two companies already compete to a significant
extent.
Purchaser Care - The complexity in this case arises because we must
consider both entertainment professionals, who probably will take the
time and effort to find the specific product they want, and movie
devotees, who will be more easily confused as to the source of the
database offered at West Coast's web site. In addition, West Coast's site is
likely to be visited by many casual movie watchers. The entertainment
professional, movie devotee, and casual watcher are likely to exercise
high, little, and very little care, respectively. We need not, however,
decide this question now because the purchaser confusion factor, even
considered in the light most favorable to West Coast, is not sufficient to
overcome the likelihood of confusion strongly established by the other
factors we have analyzed.
In light of the foregoing analysis, we conclude that Brookfield has
demonstrated a likelihood of success on its claim that West Coast's use of
"moviebuff.com" violates the Lanham Act.
3. On the Use of Metatags (codes embedded in the website, or repeated
use of a word in the website, so that it will pop up in a search engine.) -
Nevertheless, West Coast's use of "moviebuff.com" in metatags will still
result in what is known as initial interest confusion. Web surfers looking
for Brookfield's "MovieBuff" products who are taken by a search engine
to "westcoastvideo.com" will find a database similar enough to
"MovieBuff" such that a sizeable number of consumers who were
originally looking for Brookfield's product will simply decide to utilize
West Coast's offerings instead which is actionable in the Lanham Act.
FAIR USE: We agree that West Coast can legitimately use an appropriate
descriptive term in its metatags. But "MovieBuff" is not such a
descriptive term. Even though it differs from "Movie Buff" by only a
single space, that difference is pivotal. The term "Movie Buff" is a
descriptive term, which is routinely used in the English language to
describe a movie devotee. In light of the fact that it is not a word in the
English language, when the term "MovieBuff" is employed, it is used to
refer to Brookfield's products and services, rather than to mean "motion
picture enthusiast." The proper term for the "motion picture enthusiast" is
"Movie Buff," which West Coast certainly can use. It cannot, however,
omit the space.


26. Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254
(2d Cir. 1987). - Mars
Mobil Oil vs. Pegasus Petroleum (1987)
Concepts: Degree of Similarity, Relatedness of the Goods, Initial Interest
Confusion
Facts:
Mobil Oil charged Pegasus Petroleum with trademark infringement
and unfair competition, false designation of origin, and trademark dilution.
Mobil manufactures and sells a vast array of petroleum products to
industrial consumers and to the general public. Since 1931, Mobil has made
extensive use of its well known "flying horse" symbol--representing Pegasus,
the winged horse of Greek mythology--in connection with its petroleum
business.
Mobil displays this registered trademark, usually in red, but
occasionally in blue, black, white, or outline form, at virtually all its gasoline
service stations (usually on an illuminated disk four feet in diameter); in
connection with all petroleum products sold at its service stations; in
connection with the sale of a variety of its other petroleum products; on its
oil tankers, barges, and other vehicles; and on its letterhead.
Mobil buys and sells crude and refined petroleum products in bulk,
an activity known as oil trading, to insure a continuous flow of oil to its
refineries, and ultimately to its customers. Mobil does not use its flying
horse symbol in connection with its oil trading business.
Pegasus Petroleum, incorporated in 1981, confines its activities to
oil trading, and does not sell directly to the general public. Its founder,
Gregory Callimanopulos, admitted that he knew of Mobil's flying horse
symbol when he picked the name, but claimed that he did not know that the
symbol represented Pegasus or that Mobil used the word "Pegasus" in
connection with its petroleum business.
Shortly after the genesis of Pegasus Petroleum, its president of the
company, sent a letter to 400-500 people in the oil trading business which
used an interlocking double P as a letterhead. Pegasus Petroleum has
never used a flying horse symbol and sells no products with the
name "Pegasus" on them.
District Court Decision: DC used the criteria in Polaroid Corp. v.
Polarad Electronics Corp. There is a sufficient likelihood of confusion
between [Mobil's flying horse symbol] and [Pegasus Petroleum's use of the
'Pegasus' mark] to grant [Mobil] relief under the Lanham Act." Mobil is guilty
of unfair competition, false designation, and antidilution claims. Pegasus
Petroleum is enjoined from further use of the mark "Pegasus" in connection
with the oil industry.
Issue:
Whether Pegasus Petroleum infringed on Mobils registered flying horse
trademark (Yes) [NB: The Court no longer considered the charges of false
designation of origin and trademark dilution.]
Held:
The Lanham Act prohibits the use of "any reproduction, counterfeit,
copy, or colorable imitation of a registered mark" where "such use is likely to
cause confusion, or to cause mistake, or to deceive." To state a claim under
this section, a plaintiff must show a "likelihood that an appreciable number of
ordinarily prudent purchasers are likely to be misled, or indeed simply
confused, as to the source of the goods in question."
The Polaroid case enumerated eight factors as guide to this inquiry
(whether there was confusion)(1) the strength of the plaintiff's mark: (2) the
degree of similarity between the two marks; (3) the competitive proximity of
the products or services; (4) the existence of actual confusion; (5) the
likelihood that the plaintiff will "bridge the gap" between the two markets;
(6) the defendant's good faith in adopting its mark; (7) the quality of the
defendant's product; and (8) the sophistication of the purchasers.
[NB: The Court used each of the factors in Polaroid in deciding this case]
I. Strength of the Plaintiffs Mark
Pegasus Petroleum does not dispute that the strength of Mobil's
flying horse mark is "without question, and perhaps without equal." As an
arbitrary mark there is nothing suggestive of the petroleum business in the
flying horse symbol.
II. Degree of similarity between the two marks
Pegasus Petroleum:
The District Court erred in finding similarity between the two marks.
It blindly equated the word "Pegasus" with its pictorial representation--
Mobil's flying horse.
Court:
While words and their pictorial representations should not be
equated as a matter of law, a district court may make such a determination as
a factual matter.
It is well settled that words and their pictorial representation are
treated the same in determining the likelihood of confusion between two
marks.
A strong probability exists that prospective purchasers of defendant's
product will equate or translate Mobil's symbol for "Pegasus" and vice versa.
The word "Pegasus" evokes the symbol of the flying red horse and
that the flying horse is associated in the mind with Mobil. In other words, the
symbol of the flying horse and its name "Pegasus" are synonymous.
III. Competitive Proximity of the Products or Services
Pegasus Petroleum:
Mobil does not use its flying horse trademark in the field of oil
trading.
Court:
Direct competition between the products is not a prerequisite to
relief. Confusion, or the likelihood of confusion, not competition, is the real
test of trademark infringement." Both Mobil and Pegasus Petroleum use their
marks in the petroleum industry. Competitive proximity may be found where
goods are similar in use and function).
Competitive proximity must be measured with reference to the first
two Polaroid factors.
As to strength of mark: A mark that is strong because of its fame or
its uniqueness, is more likely to be remembered and more likely to be
associated in the public mind with a greater breadth of products or services
than is a mark that is weak. The consuming public has a tendency to
associate a relatively unknown mark with one to which they have
long been exposed if the [relatively unknown] mark bears any
resemblance thereto". Mobil's ubiquitous presence throughout the
petroleum industry further increases the likelihood that a consumer will
confuse Pegasus Petroleum with Mobil. Diversification makes it more likely
that a potential customer would associate the non-diversified company's
services with the diversified company, even though the two companies do not
actually compete.
As to degree of similarity: The great similarity between the two
marks entitles Mobil's mark to protection over a broader range of related
products. Closely related products require less similarity to support a finding
of trademark infringement.
IV. Defendant's Good Faith in Adopting its Mark
Pegasus Petroleum:
It sent a letter of trade informing oil traders of its formation and in
which it stated that it was member of the Callimanopulos group of
companies.
Actual and constructive notice of another company's prior
registration of the mark is not necessarily indicative of bad faith, because the
presumption of an exclusive right to use a registered mark extends only so far
as the goods or services noted in the registration certificate.
Court:
Pegasus Petroleum did not innocently select its potentially confusing
mark.
Intentional copying gives rise to a presumption of a likelihood of
confusion. Mr. Callimanopulos is obviously an educated, sophisticated man
who, from his prior shipping business, was familiar with the flying horse and
from his own background and education and awareness of Greek mythology
could not have escaped the conclusion that the use of the word 'Pegasus'
would infringe the tradename and symbol of the plaintiff.
The letter referred to by Pegasus Petroleum falls far short of
establishing, by itself, Pegasus Petroleum's good faith.
Actual or constructive knowledge may signal bad faith. The
second comer has a duty to so name and dress his product as to avoid all
likelihood of consumers confusing it with the product of the first comer.
Where we can perceive freedom of choice with full knowledge of a
senior user's mark, we can readily read into defendant's choice of a
confusingly similar mark the intent to get a free ride upon the reputation of a
well-known mark.
V. Existence of actual confusion
Both Mobil and Pegasus Petroleum offered surveys of consumers and
of members of the oil trading industry as evidence relating to the existence of
actual confusion between the two marks. The district court properly admitted
these surveys into evidence, despite claims of statistical imperfections by
both sides, as those criticisms affected the weight accorded to the evidence
rather than its admissibility.
The DC judge concluded that there was "evidence of actual
confusion."
VI. Likelihood that the Plaintiff will "bridge the gap" between the
Two Markets
Pegasus Petroleum:
The absence of misdirected mail and telephone calls between the
parties, and the fact that Pegasus Petroleum must post a letter of credit as
security during its oil trading deals while Mobil need not, prove that no
actual confusion between the two firms existed.
Court:
The DC found a likelihood of confusion not in the fact that a third
party would do business with Pegasus Petroleum believing it related to Mobil,
but rather in the likelihood that Pegasus Petroleum would gain crucial
credibility during the initial phases of a deal.
An oil trader might listen to a cold phone call from Pegasus
Petroleum--an admittedly oft used procedure in the oil trading business--
when otherwise he might not, because of the possibility that Pegasus
Petroleum is related to Mobil.
The DC did not examine whether Mobil would "bridge the gap" by
expanding its use of the flying horse symbol into the oil trading market.
Nevertheless, "sufficient likelihood of confusion may be established
although likelihood of bridging the gap is not demonstrated." The absence of
an intent to bridge the gap does not negate a finding of a likelihood of
confusion in the market as presently constituted.
The Lanham Act extends trademark protection to related goods in
order to guard against numerous evils in addition to restraints on the
possible expansion of the senior user's market, including consumer
confusion, tarnishment of the senior user's reputation, and unjust
enrichment of the infringer.
VII. Quality of the Defendant's Product
Pegasus Petroleum:
Its product--oil--does not differ from that sold by Mobil.
Court:
A senior user may sue to protect his reputation even where the
infringer's goods are of top quality.
Even if the infringer's goods are of high quality, the victim has the
right to insist that its reputation not be imperiled by another's actions.
If the other user sometime in the future engaged in false advertising,
or cheated customs, or employed a rude salesperson, or simply sold some
shoddy merchandise, the first user of the mark would suffer because buyers
would link them together through the medium of the similar marks.
VIII. Sophistication of the Purchasers
Even though defendant's business is transacted in large quantities
only with sophisticated oil traders, there is still and nevertheless a likelihood
of confusion.
There exists a probability that potential purchasers would be misled
into an initial interest in Pegasus Petroleum. Such initial confusion works a
sufficient trademark injury.
Pegasus Petroleum admits that it solicits business through telephone
calls to potential customers. Pegasus Petroleum also acknowledges that
"[t]rust, in the oil industry, is of paramount importance."
Finally, Mobil's Oil Trading Department executive, Thomas Cory,
testified that he did not undertake an investigation of a new company before
initially dealing with it. Such an investigation was undertaken only prior to
the culmination of a deal.



27. Coffee Partners, Inc. v. San Francisco Coffee & Roastery,
G.R. 169504, March 3, 2010. Nem
CONCEPT/TOPIC: TRADEMARK (INFRINGEMENT OF
TRADE NAMES WITHOUT REGISTRATION; TESTS FOR
CONFUSION)
FACTS:
Coffee Partners, Inc. is a local corporation engaged in the
business of establishing and maintaining coffee shops in the
country.
o It has a franchise agreement with Coffee Partners
Ltd. (CPL), for a non-exclusive right to operate coffee
shops in the Philippines using trademarks SAN
FRANCISCO COFFEE.
Respondent is a local corporation engaged in the wholesale
and retail sale of coffee.
o It registered the business name SAN FRANCISCO
COFFEE & ROASTERY, INC. with the Department
of Trade and Industry (DTI) in June 1995 and had
since built a customer base that included Figaro
Company, among others
o In 1998, respondent formed a joint venture company
with Boyd Coffee USA under the company name
Boyd Coffee Company Philippines, Inc. (BCCPI).
In June 2001, respondent discovered that petitioner was
about to open a coffee shop under the name SAN
FRANCISCO COFFEE in Libis, Quezon City and thus sent
a letter to petitioner demanding that the latter stop using
the name SAN FRANCISCO COFFEE.
Respondent also filed a complaint with the Bureau of Legal
Affairs-Intellectual Property Office (BLA-IPO) for
infringement and/or unfair competition with claims for
damages
The BLA-IPO ruled in favor of respondent. It held that the
right to the exclusive use of a trade name with freedom from
infringement by similarity is determined from priority of
adoption. Since respondent registered its business name
with the DTI in 1995 and petitioner registered its trademark
with the IPO in 2001 in the Philippines and in 1997 in other
countries, then respondent must be protected from
infringement of its trade name.
The Office of the Director General Intellectual Property
Office (ODG-IPO) reversed the BLA-IPO. It ruled that:
o Respondent had stopped using its trade name after it
entered into a joint venture with Boyd Coffee USA in
1998 while petitioner continuously used the
trademark since June 2001 when it opened its first
coffee shop in Libis, Quezon City.
o Between a subsequent user of a trade name in good
faith and a prior user who had stopped using such
trade name, it would be inequitable to rule in favor
of the latter.
The Court of Appeals reversed the ODG-IPO decision and
reinstated the decision of the BLA-IPO finding
infringement.


ISSUE/HELD:
Whether petitioners use of the trademark SAN FRANCISCO
COFFEE constitutes infringement of respondents trade name
SAN FRANCISCO COFFEE & ROASTERY, INC., even if such is
not registered with the IPO YES


PETITIONERS ARGUMENTS:
When a trade name is not registered, a suit for infringement
is not available.
Respondent has abandoned its trade name and failure to
continue the use of its trade name to designate its goods
negates any allegation of infringement.
No confusion is likely to occur between its trademark and
respondents trade name because of a wide divergence in
the channels of trade, petitioner serving ready-made coffee
while respondent is in wholesale blending, roasting, and
distribution of coffee.
The proper noun "San Francisco" and the generic word
"coffee" are not capable of exclusive appropriation.


RESPONDENTS ARGUMENTS:
RA 8293 dispensed with registration of a trade name with
the IPO as a requirement for the filing of an action for
infringement. All that is required is that the trade name is
previously used in trade or commerce in the Philippines.
It never abandoned the use of its trade name as evidenced
by its letter to petitioner demanding immediate
discontinuation of the use of its trademark and by the filing
of the infringement case.
Petitioners trademark is confusingly similar to
respondents trade name. Ordinarily prudent consumers are
likely to be misled about the source, affiliation, or
sponsorship of petitioners coffee


RULING:
In Prosource International, Inc. v. Horphag Research
Management SA, this Court laid down what constitutes
infringement of an unregistered trade name, thus:
o The trademark being infringed is registered in the
Intellectual Property Office; however, in
infringement of trade name, the same need not be
registered;
o The trademark or trade name is reproduced,
counterfeited, copied, or colorably imitated by the
infringer;
o The infringing mark or trade name is used in
connection with the sale, offering for sale, or
advertising of any goods, business or services; or the
infringing mark or trade name is applied to labels,
signs, prints, packages, wrappers, receptacles, or
advertisements intended to be used upon or in
connection with such goods, business, or services;
o The use or application of the infringing mark or
trade name is likely to cause confusion or mistake or
to deceive purchasers or others as to the goods or
services themselves or as to the source or origin of
such goods or services or the identity of such
business; and
o It is without the consent of the trademark or trade
name owner or the assignee thereof.
Clearly, a trade name need not be registered with the IPO
before an infringement suit may be filed by its owner
against the owner of an infringing trademark. All that is
required is that the trade name is previously used in trade
or commerce in the Philippines.
Section 165.2 of RA 8293 categorically states that trade
names shall be protected, even prior to or without
registration with the IPO, against any unlawful act including
any subsequent use of the trade name by a third party,
whether as a trade name or a trademark likely to mislead
the public.
In determining similarity and likelihood of confusion, our
jurisprudence has developed two tests: the dominancy test
and the holistic test.
The dominancy test focuses on the similarity of the
prevalent features of the competing trademarks that might
cause confusion and deception, thus constituting
infringement. If the competing trademark contains the
main, essential, and dominant features of another, and
confusion or deception is likely to result, infringement
occurs.
Exact duplication or imitation is not required. The question
is whether the use of the marks involved is likely to cause
confusion or mistake in the mind of the public or to deceive
consumers
The holistic test entails a consideration of the entirety of the
marks as applied to the products, including the labels and
packaging, in determining confusing similarity.
The discerning eye of the observer must focus not only on
the predominant words but also on the other features
appearing on both marks in order that the observer may
draw his conclusion whether one is confusingly similar to
the other.
Applying either the dominancy test or the holistic test,
petitioners "SAN FRANCISCO COFFEE" trademark is a
clear infringement of respondents "SAN FRANCISCO
COFFEE & ROASTERY, INC." trade name. The descriptive
words "SAN FRANCISCO COFFEE" are precisely the
dominant features of respondents trade name. Petitioner
and respondent are engaged in the same business of selling
coffee, whether wholesale or retail. The likelihood of
confusion is higher in cases where the business of one
corporation is the same or substantially the same as that of
another corporation.
Geographic or generic words are not, per se, subject to
exclusive appropriation. It is only the combination of the
words "SAN FRANCISCO COFFEE," which is respondents
trade name in its coffee business, that is protected against
infringement on matters related to the coffee business to
avoid confusing or deceiving the public.


28. Roma Drug v. RTC Pampanga, G.R. 149907, 16 April 2009
Elle
Topic: Patents, re medicines


A team of NBI operatives and BFAD inspectors conducted a
raid on petitioner, a drug store and a duly registered sole
proprietorship of petitioner Rodriguez. Several imported
medicines were seized, which were imported directly from
Smithkline, the manufacturer abroad, and not purchased
through the local one.
Thus the NBI filed a complaint against Rodriguez for
violation of Section 4 (in relation to Sections 3 and 5) of
Republic Act No. 8203, also known as the Special Law on
Counterfeit Drugs (SLCD), with the Office of the Provincial
Prosecutor in San Fernando, Pampanga. This prohibits the
sale of counterfeit drugs, which under Section 3(b)(3),
includes an unregistered imported drug product. The term
unregistered signifies the lack of registration with the
Bureau of Patent, Trademark and Technology Transfer of a
trademark, tradename or other identification mark of a
drug in the name of a natural or juridical person, the
process of which is governed under Part III of the
Intellectual Property Code.
Note: here, the classification as counterfeit is based solely
on the fact that they were imported from abroad and not
purchased from the Philippine-registered owner of the
patent or trademark of the drugs.
The prosecutor recommended that Rodriguez be charged of
violation of Section 4(a) of the SLCD. Thus: this petition for
prohibition asking for the prosecutor to desist, and to
declare the SLCD unconstitutional.


WON the SLCD is constitutional. MOOT QUESTION! BUT: IF
DECIDED, IN DOUBT.


Petitioner: contrary to equal protection clause, Section 11, Article
XIII, which mandates that the State make essential goods, health
and other social services available to all the people at affordable
cost; and Section 15, Article II, which states that it is the policy of
the State to protect and promote the right to health of the people
and instill health consciousness among them.


Respondent: the SLCD is presumed constitutional, Sections 11 and
15 are not self-executory. Also: the question is one of policy wisdom
of the law that is, beyond the interference of the judiciary.


I. Mooted by RA 9502, the Universally Accessible Cheaper and
Quality Medicines Act of 2008.


Section 7 amends Section 72 of the IPC, in that third
persons are now granted the unequivocal right to import
drugs or medicines whose patent were registered in the
Phils by the owner of the product: Sec. 72. Limitations of
Patent Rights. The owner of a patent has no right to
prevent third parties from performing, without his
authorization, the acts referred to in Section 71 hereof in the
following circumstances xxx
o 72.1. Using a patented product which has been put
on the market in the Philippines by the owner of the
product, or with his express consent, insofar as such
use is performed after that product has been so put
on the said market: Provided, That, with regard
to drugs and medicines, the limitation on
patent rights shall apply after a drug or
medicine has been introduced in the
Philippines or anywhere else in the world by
the patent owner, or
by any party authorized to use the inventi
on: Provided, further, That the right to
import the drugs and medicines
contemplated in this section shall be
available to any government agency or
any private third party;
This is repeated in the IRR (2008), Rule 9(i).
While RA 9502 didnt expressly repeal any provision of the
SLCD, the latters classification of unregistered imported
drugs as counterfeit drugs, and of corresponding
criminal penalties are irreconcilable with Rep. Act No. 9502
since the latter grants private third persons the unqualified
right to import or otherwise use such drug.


II. Re constitutionality of the SLCD.
The provisions would have been placed in doubt. The law
makes a criminal of any person who imports an
unregistered drug regardless of the purpose, even if the
medicine can spell life or death for someone in the
Philippines. It does not accommodate the situation where
the drug is out of stock in the Philippines, beyond the reach
of a patient who urgently depends on it. It discriminates, at
the expense of health, against poor Filipinos without means
to travel abroad to purchase less expensive medicines in
favor of their wealthier brethren able to do so. The absurd
results from this far-reaching ban extends to implications
that deny the basic decencies of humanity.
Even worse is the fact that the law equates the importers of
such drugs, many of whom motivated to do so out of
altruism or basic human love, with the malevolents who
would alter or counterfeit pharmaceutical drugs for reasons
of profit at the expense of public safety. Note: special law
thus malum prohibitum. For a law that is intended to help
save lives, the SLCD has revealed itself as a heartless,
soulless legislative piece.
Partly granted.
29. ABS-CBN v. Phil. Multi-media, G.R. No. 175769-70,
January 19, 2009 - Nem


CONCEPT/TOPIC: COPYRIGHT (LIMITATIONS; FAIR
USE)


FACTS:
Philippine Multi-Media System, Inc. (PMSI), operator of
Dream Broadcasting System, delivers a digital direct-to-
home (DTH) television satellite to its subscribers all over
the Philippines
It offered as part of its program line-up, together with other
paid premium program channels, ABS-CBN Channels 2 and
23, NBN, ABC, GMA, RPN, and IBC.
ABS-CBN which also had regional TV stations, demanded
PMSI to cease and desist from rebroadcasting Channels 2
and 23.
PMSI contended that the rebroadcasting was in
accordance with the authority granted by NTC under its
obligations under NTC Memorandum Circular 4-08-88,
Section 6.2 of which requires all cable television system
operators operating in a community within Grade A or B
contours to carry the television signals of the authorized
television broadcast stations (must-carry rule).
The parties tried to settle but negotiations were terminated
by ABS-CBN allegedly due to PMSIs inability to ensure the
prevention of illegal retransmission and further
rebroadcast of its signals, as well as the adverse effect of
the rebroadcasts on the business operations of its regional
TV stations.
ABS-CBN thus filed a complaint with the Intellectual
Property Rights Office (IPO) alleging that PMSIs
unauthorized rebroadcasting of Channels 2 and 23 infringed
on its broadcasting rights and copyright.
The Bureau of Legal Affairs of the IPO rendered a decision
finding that PMSI infringed the broadcasting rights and
copyright of ABS-CBN and ordering it to permanently cease
and desist from rebroadcasting Channels 2 and 23.
Upon appeal, the Director-General of the IPO rendered a
decision in favor of PMSI.
ABS-CBN filed a petition for review with the CA but said
court upheld the findings of the Director-General
ISSUE/HELD:
Whether or not PMSI violated the Laws on Property Rights. NO


PETITIONERS ARGUMENTS:
PMSIs unauthorized rebroadcasting of Channels 2 and 23
is an infringement of its broadcasting rights and copyright
under the Intellectual Property Code (IP Code)
Memorandum Circular No. 04-08-88 excludes DTH
satellite television operators
Court of Appeals interpretation of the must-carry rule
violates Section 9 of Article III19 of the Constitution
because it allows the taking of property for public use
without payment of just compensation
RESPONDENTS ARGUMENTS:
PMSIs rebroadcasting of Channels 2 and 23 is sanctioned
by Memorandum Circular No. 04-08-88
The must-carry rule under the Memorandum Circular is a
valid exercise of police power


RULING:
PMSI did not violate the Laws on Property Rights because it
is not engaged in rebroadcasting Channels 2 and 23.
Section 202.7 of the IP Code defines broadcasting as the
transmission by wireless means for the public reception of
sounds or of images or of representations thereof; such
transmission by satellite is also broadcasting where the
means for decrypting are provided to the public by the
broadcasting organization or with its consent.
On the other hand, rebroadcasting as defined in Article 3(g)
of the 1961 Rome Convention is the simultaneous
broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization.
PMSI is only engaged in the carrying of signals of ABS-CBN
coming from ABS-CBN and transmitting signals. PMSI is
not the origin nor does it claim to be the origin of the
programs broadcasted by the ABS-CBN. PMSI did not make
and transmit on its own but merely carried the existing
signals of the ABS-CBN. When PMSI subscribers view ABS-
CBNs programs in Channels 2 and 23, they know that the
origin thereof was the ABS-CBN.
PMSIs services are similar to a cable television system
because the services it renders fall under cable
retransmission,
While the Rome Convention gives broadcasting
organizations the right to authorize or prohibit the
rebroadcasting of its broadcast, however, this protection
does not extend to cable retransmission.
The retransmission of ABS-CBNs signals by PMSI which
functions essentially as a cable television does not
therefore constitute rebroadcasting in violation of the
formers intellectual property rights under the IP Code.
It must be emphasized that the law on copyright is not
absolute. Sec. 184.1(h) of the IP Code provides that the use
made of a work by or under the direction or control of the
Government, by the National Library or by educational,
scientific or professional institutions where such use is in
the public interest and is compatible with fair use, shall not
constitute infringement of copyright
The carriage of ABS-CBNs signals by virtue of the must-
carry rule in Memorandum Circular No. 04-08-88 is under
the direction and control of the government though the NTC
which is vested with exclusive jurisdiction to supervise,
regulate and control telecommunications and broadcast
services/facilities in the Philippines.
The imposition of the must-carry rule is within the NTCs
power to promulgate rules and regulations, as public safety
and interest may require, to encourage a larger and more
effective use of communications, radio and television
broadcasting facilities, and to maintain effective
competition among private entities
Court did not rule on constitutionality of Memorandum
Circular No. 04-08-88 as it was not necessary in the
disposition of the case