Chapter 3 FRAUD

Art 188 Altering Trademark

a) Trademark defined
Canon Kabushiki Kaisha v. CA
NSR Rubber Corporation filed an application forregistration of the mark CANON for sandals in theBureau
of Patents, Trademarks, and Technology Transfer(BPTTT).
An opposition was filed byCanon Kabushiki Kaisha(CKK), a foreign corporation duly organized and
existingunder the laws of Japan. CKK alleged that it will bedamaged by the registration of the trademark
CANON inthe name of NSR Rubber Corporation.
The evidence presented by CKK consisted of itscertificates of registration for the mark CANON in
variouscountries covering goods belonging to class 2 (paints,chemical products, toner, and dye stuff).
CKK also submitted in evidence its Philippine TrademarkRegistration No. 39398, showing its ownership
over thetrademark CANON also under class 2.
However, theBureau of Patents, Trademarks, and Technology Transfer (BPTTT) dismissed the petition of
CKK and gave due course to NSRs application for theregistration of the trademark CANON.
According to BPTTT, the trademark CANON as used byCKK for its paints, chemical products, toner,
anddyestuff, can be used by NSR for its sandals because theproducts of these two parties are dissimilar.
Hence, CKK filed this case arguing that:a) it is entitled to exclusive use of the mark canonbecause it is its
trademark and is used also for footwear.b) to allow NSR to register canon for footwear is toprevent CKK
from using canon for various kinds of footwear, when in fact, CKK has earlier used said markfor said
goods.c) it is also entitled to the right to exclusively use canonto prevent confusion of business.
ISSUE:
WON NSR RUBBER CORPORATION MAY BE ALLOWED TOUSE THE MARK CANON.
HELD:
Yes.When a trademark is used by a party for a product in which theother party does not deal, the use of
the same trademark on thelatter's product cannot be validly objected to. The certificates of registration for
the trademark CANON in othercountries and in the Philippines as presented by CKK, clearlyshowed that
said certificates of registration cover goods belongingto class 2 (paints, chemical products, toner,
dyestuff). On this basis,the BPTTT correctly ruled that since the certificate of registration of petitioner for
the trademark CANON covers class 2 (paints,chemical products, toner, dyestuff), NSR can use the
trademarkCANON for its goods classified as class 25 (sandals). Clearly, thereis a world of difference
between the paints, chemical products,toner, and dyestuff of CKK and the sandals of NSR. The certificate
of registration confers upon the trademark ownerthe exclusive right to use its own symbol only to those
goodsspecified in the certificate, subject to the conditions and limitationsstated therein. Thus, the
exclusive right of CKK in this case to usethe trademark CANON is limited only to the products covered by
itscertificate of registration.As to the argument of CKK that there could be confusion as to theorigin of the
goods, as well as confusion of business, if NSR isallowed to register the mark CANON, the SC ruled that in
cases of confusion of business or origin, the question that usually arises iswhether the respective goods or
services of the senior user and the junior user are so related as to likely cause confusion of business
ororigin, and thereby render the trademark or tradenamesconfusingly similar.Goods are related when they
belong to the same class or have thesame descriptive properties; when they possess the same
physicalattributes or essential characteristics with reference to their form,composition, texture or quality.
They may also be related becausethey serve the same purpose or are sold in grocery stores. The paints,
chemical products, toner and dyestuff of CKK that carrythe trademark CANON are unrelated to sandals, the
product of NSR. The two classes of products in this case flow through different tradechannels. The products
of CKK are sold through special chemicalstores or distributors while the products of NSR are sold in
grocerystores, sari-sari stores and department stores.

The term "trademark" is defined by RA 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 for those manufactured,
sold or dealt in by others."[26] Tradename is defined by the same law as including "individual
names and surnames, firm names, tradenames, devices or words used by manufacturers,
industrialists, merchants, agriculturists, and others to identify their business, vocations, or
occupations; the names or titles lawfully adopted and used by natural or juridical persons,
unions, and any manufacturing, industrial, commercial, agricultural or other organizations
engaged in trade or commerce."[27] Simply put, a trade name refers to the business and its
goodwill; a trademark refers to the goods
b) Cases
LA CHEMISE LACOSTE, S. A. VS. FERNANDEZ
FACTS: La chemise Lacoste is a French corporation and the actual owner of the trademarks Lacoste,
Chemise Lacoste, Crocodile Device and a composite mark consisting of the word Lacoste and a
representation of a crocodile/alligator, used on clothings and other goods sold in many parts of the world
and which has been marketed in the Philippines (notably by Rustans) since 1964.
In 1975 and 1977, Hemandas Q. Co. was issued certificate of registration for the trademark Chemise
Lacoste and Q Crocodile Device both in the supplemental and Principal Registry. In 1980, La Chemise
Lacoste SA filed for the registration of the Crocodile device and Lacoste.
Games and Garments (Gobindram Hemandas, assignee of Hemandas Q.Co.) opposed the registration of
Lacoste. In 1983, La Chemise Lacoste filed with the NBI a letter-complaint alleging acts of unfair
competition committed by Hemandas and requesting the agencys assistance.
A search warrant was issued by the trial court. Various goods and articles were seized upon the execution
of the warrants. Hemandas filed motion to quash the warrants, which the court granted. The search
warrants were recalled, and the goods ordered to be returned. La Chemise Lacoste filed a petition for
certiorari.
ISSUE:
Whether or not the trademark Chemise Lacoste and Q Crocodile Device is registrable.
HELD:
No. Inasmuch as the goodwill and reputation of La Chemise Lacoste products date back even before 1964,
Hemandas cannot be allowed to continue the trademark Lacoste for the reason that he was the first
registrant in the Supplemental Register of a trademark used in international commerce.
Registration in the Supplemental Register cannot be given a posture as if the registration is in the Principal
Register. It must be noted that one may be declared an unfair competitor even if his competing trademark
is registered. La Chemise Lacoste is world renowned mark, and by virtue of the 20 November 1980
Memorandum of the Minister of Trade to the director of patents in compliance with the Paris Convention for
the protection of industrial property, effectively cancels the registration of contrary claimants to the
enumerated marks, which include Lacoste.
_________________________________________________________________________________________
Facts: La chemise Lacoste is a French corporation and the actual owner of the trademarks Lacoste,
Chemise Lacoste, Crocodile Device and a composite mark consisting of the word Lacoste and a
representation of a crocodile/alligator, used on clothings and other goods sold in many parts of the world
and which has been marketed in the Philippines (notably by Rustans) since 1964. In 1975 and 1977,
Hemandas Q. Co. was issued certificate of registration for the trademark Chemise Lacoste and Q
Crocodile Device both in the supplemental and Principal Registry. In 1980, La Chemise Lacoste SA filed
for the registration of the Crocodile device and Lacoste. Games and Garments (Gobindram
Hemandas, assignee of Hemandas Q.Co.) opposed the registration of Lacoste.
In 1983, La Chemise Lacoste filed with the NBI a letter-complaint alleging acts of unfair competition
committed by Hemandas and requesting the agencys assistance. A search warrant was issued by the trial

court. Various goods and articles were seized upon the execution of the warrants. Hemandas filed motion
to quash the warrants, which the court granted. The search warrants were recalled, and the goods ordered
to be returned. La Chemise Lacoste filed a petition for certiorari.
Issue: Whether the proceedings before the patent office is a prejudicial question that need to be resolved
before the criminal action for unfair competition may be pursued.
Held: No. The proceedings pending before the Patent Office do not partake of the nature of a prejudicial
question which must first be definitely resolved. The case which suspends the criminal action must be a
civil case, not a mere administrative case, which is determinative of the innocence or guilt of the accused.
The issue whether a trademark used is different from anothers trademark is a matter of defense and will
be better resolved in the criminal proceedings before a court of justice instead of raising it as a preliminary
matter in an administrative proceeding.
Inasmuch as the goodwill and reputation of La Chemise Lacoste products date back even before 1964,
Hemandas cannot be allowed to continue the trademark Lacoste for the reason that he was the first
registrant in the Supplemental Register of a trademark used in international commerce. Registration in the
Supplemental Register cannot be given a posture as if the registration is in the Principal Register. It must
be noted that one may be declared an unfair competitor even if his competing trademark is registered. La
Chemise Lacoste is world renowned mark, and by virtue of the 20 November 1980 Memorandum of the
Minister of Trade to the director of patents in compliance with the Paris Convention for the protection of
industrial property, effectively cancels the registration of contrary claimants to the enumerated marks,
which include Lacoste"
U.S. v. Kyburz
Kyburz, the defendant and appellant in this case, was convicted in the court below of a violation of section
6 of Act No. 666 of the Philippine Commission, which defines and penalizes the fraudulent use of trademarks and trade names, and was sentenced to pay a fine of P200 and costs.
The information charges the commission of the alleged offense as follows:
"That on or about and during the period included between the 4th and the 22d days of September, 1913,
in the city of Manila, Philippine Islands, the said J. Kyburz was a merchant and the proprietor of the
business known as the Manila Jewelry Store, engaged in the sale of watches, among other things; that
during the same period, and for a number of years prior thereto in the said city of Manila, the commercial
firm known by the name of Greilsammer Hermanos, a partnership duly licensed to do business therein, was
also engaged in the sale of watches, including those known as Meridian watches, the trade-mark in the
Philippine Islands for which was then and there owned and registered exclusively by the said firm of
Greilsammer Hermanos, under the laws of the Philippine Islands, which trade-mark consisted of a sphere
with the word Meridian in its center, applied to the cases and movements of the Meridian watches; and
that during the aforesaid period, in the said city of Manila, Philippine Islands, the said J. Kyburz, with intent
to defraud the public and the said firm of Greilsammer Hermanos, owner of the above described trademark, did then and there unlawfully, willfully, and feloniously use the word Meridian on cards placed on
and in connection with his watches, for the purpose of selling the same as genuine Meridian watches, at
his place of business, the said Manila Jewelry Store and with the intention of making the purchasers believe
that the said watches thus offered for sale and sold by the said J. Kyburz were genuine Meridian watches
when in truth and in fact they were watches of some other make, to the damage and prejudice of the
aforesaid Greilsammer Hermanos. All contrary to law."cralaw virtua1aw library
Greilsammer Hermanos is a regularly organized partnership engaged in the retail jewelry business in
Manila. Since the year 1903 it has imported from a manufacturing firm in Europe a certain class of watches
upon which after due inspection it engraves a trade-mark consisting of a sphere across which runs a scroll
bearing the word Meridian. The watches thus inspected and marked have been advertised and put on sale
in this country for several years under the trade name of Meridian watches. The trade-mark above
described was duly registered on or about December, 1908.
In the month of September, 1913, Kyburz, the defendant in this case, was the owner of two retail jewelry
stores in Manila, located within about two minutes walk of each other. He spent most of his time in one of
them known as El Zenith, the other, known as the Manila Jewelry Store, being in charge of a manager. The
defendant admitted that he visited the Manila Jewelry Store several times a week, and it would appear to
have been at all times under his supervision and control.

During the month of September, 1913, a number of watches were displayed in a prominent place in one of
the show windows of the Manila Jewelry Store under a show card or placard (Exhibits B and C) which reads
as follows: MERIDIAN Ten jewels. 20 years guaranty. It appears that the watches thus put on sale in the
defendants jewelry store were purchased from the same manufacturer in Europe from whom Greilsammer
Hermanos purchased the watches upon which they engraved their trade-mark and which they sold under
the trade name of Meridian watches. It would appear furthermore that these watches are substantially
identical in quality and design, and apparently are shipped by the manufacturer from one and the same
stock.
The witness Wolfson purchased one of these watches from a clerk employed in the Manila Jewelry Store,
who issued to him a written guaranty in which this watch was described as a Meridian sin marca
(unmarked). This guaranty bore the signature of both the clerk who issued it and the defendant, the owner
of the store. It would appear, however, that defendant signed the guaranty in blank, leaving it to be filled
out by the clerk at the time of the sale.
The defendant testifying in his own behalf, swore that the clerk was not instructed or authorized to set
forth in the guaranty that these watches were Meridian watches. The clerk himself, who testified that he
was not a watchmaker but that he had been working for the defendant for about four months, said that He
first discovered the identity of the Meridian watches with those sold by the defendant upon an occasion
when a customer called for a Meridian watch, upon which occasion he made a comparison of the two
watches and satisfied himself that they were of the same make in every respect. Upon cross-examination,
he was unable to describe the Meridian mark, and his testimony to the effect that he himself made the
discovery as to the identity of origin of these watches does not impress us favorably, and was not
accepted as true by the court below. Both the manager of the branch store and the defendant himself
admitted that they were aware of the identity in origin of the two watches, and the defendant went so far
as to say that when prospective purchasers asked him for a meridian watch he informed them that he had
the same watch but without the mark Meridian.
The first contention of counsel for appellant is that the trial court erred in holding Kyburz criminally
responsible for the acts of his employees in the Manila Jewelry Store in offering for sale and in selling
watches under the trade name of Meridian watches. It is urged that the trial court erred in holding that
Kyburz directed or authorized the action of his employees in the Manila Jewelry Store, in view of the
positive denials of that fact by both Kyburz and the clerk who made the sale above mentioned. After a
careful review of the whole record we find nothing which would justify us in holding that the trial court
erred in refusing to believe the testimony of these interested witnesses, and upon the whole record we do
not think that we would be justified in disturbing the finding of the trial judge that the offer to sell and the
sale of watches under the trade name of Meridian watches were made with the knowledge and consent, if
not by the express direction of the defendant.
While it is true that in cases of this kind the master cannot be held criminally responsible for the acts of his
employees unless they are done by his direction or with his consent, nevertheless, there can be no
question that he is amenable to the criminal law when he assents, either expressly or impliedly, to the
commission of the act, whether he is present or not.
The doctrine, supported by authority, is set forth as follows in 7 Labatts Master and Servant, section
2566:jgc:chanrobles.com.ph
"So the master is criminally responsible if he causes the illegal act to be done, or requests, commands, or
permits it, or in any manner authorizes it, or aids and abets the servant in its commission. He cannot,
without rendering himself amenable to the criminal law, participate in the offense, or have knowledge of it,
or exercise any control over it, or in any manner assent to it, whether he is present at the time the
unlawful act is committed or not."cralaw virtua1aw library
It is contended on various grounds that the trial court erred in holding that the facts as found by him
constituted a violation of the provisions of section 6 of Act No. 666.
Counsel insists that since defendant did not place the trade-mark or trade name on the watches sold by
him, he cannot be held liable for an infringement of the penal provisions of section 6 of the Act, which
prescribe that "any person who, with intent to defraud the public or the owner of a trade-mark or trade
name, shall use the trade-mark of another on his goods offered for sale, . . . shall be punished by a fine of
not exceeding two thousand five hundred dollars, or by imprisonment not exceeding three years, or both,
in the discretion of the court. . . ."cralaw virtua1aw library

But this contention is manifestly untenable in view of the fact that the penal provisions of the statute are
extended also in express terms to one who uses the "trade name of another in his business, occupation, or
profession." Indeed one of the distinguishing characteristics of a trade name is that, unlike trade-marks,
they are not necessarily attached or affixed to the goods of the owner.
Section 5 of the Act provides that: "A trade name is the name, device, or mark by which is intended to be
distinguished from that of others the business, profession, trade, or occupation in which one may be
engaged and in which goods are manufactured or sold to the public, work is done for the public, or
professional services are rendered to the public. It is not essential that the trade name should appear on
the goods manufactured or dealt in by the person owning or using the same. It is sufficient if the trade
name is used by way of advertisements, signs over the place of business, upon letter heads, and in other
ways to furnish to the public a method of distinguishing the business, trade, or occupation of the person
owning and using such name. Property in trade names shall be as fully protected as property in a trademark by the civil remedies provided in section three of this Act for the protection of property in trademarks."cralaw virtua1aw library
Trade names have been frequently confused with trade-marks, and, broadly considered, they do include
names which may constitute trade-marks.
"More accurately, however, trade names are names which are used in trade to designate a particular
business of certain individuals considered somewhat as an entity, or the place at which a business is
located, or of a class of goods, but which are not technical trade-marks either because not applied or
affixed to goods sent into the market, or because not capable of exclusive appropriation by anyone as
trade-marks. Such trade names may, or may not, be exclusive. Exclusive trade names are protected very
much upon the same principles as trade-marks, and the same rules that govern trade-marks are applied in
determining what may be an exclusive trade name.
It is further contended that the evidence does not disclose a violation of the penal provisions of section 6
of the Act because it does not appear that the public was in fact deceived as to the quality of the watches
purchased from the defendant, the watches sold by the defendant and the complaining company having
been made by the same manufacturer, and being in fact of exactly the same standard and quality. It is to
be observed, however, that the statute penalizes the use of trade-marks and trade names with intent to
defraud either the public or the owner of such trade-mark or trade name.
Trade names are protected against use or imitation upon the ground of unfair competition, and an
examination of the statute clearly indicates its purpose to protect the manufacturer or dealer as well as
the public.
"The rule which protects against unfair competition is primarily for the protection of the party against
whom such competition is directed, and only incidentally for the protection of the public. In some of the
cases language is used which would suggest that the public is under the protection of the court, but in fact
the liability of the article to mislead the public is only an element of proof in the plaintiff s case, the
evidence showing that he has been or may be injured by the fraudulent acts of the defendant. The court
therefore, does not interfere for the purpose of preventing the public from being misled, except in so far as
it is necessary to protect the owner of a business from its fraudulent invasion by others. If what is done
tends to mislead the public, it naturally diverts customers from the complainant, to the injury of his
business. The prohibition is upon so acting as to beguile the public, and thus mislead an intending
purchaser into buying the goods of one person under the belief that he is buying those of a rival."
The same author in section 209 says that "the law of unfair competition rests upon the simple principle
that no person has the right to sell his own goods as those of another. In other words, the basic rule is that
no one shall, by imitation or any unfair device, induce the public to believe that the goods he offers for sale
are the goods of another, and thereby appropriate to himself the value of the reputation which the other
has acquired for his own products or merchandise."cralaw virtua1aw library
We think that the following citation from the opinion of the Supreme Court of the United States in the case
of Menendez v. Holt (128 U.S., 514), written by Chief Justice Fuller, quite clearly indicates the grounds upon
which the decision of the court below must be sustained:
"The fact that Holt & Co. were not the actual manufacturers of the flour upon which they had for years
placed the brand in question does not deprive them of the right to be protected in the use of that brand as
a trademark.

"They used the words La Favorita to designate flour selected by them, in the exercise of their best
judgment as equal to a certain standard. The brand did not indicate by whom the flour was manufactured,
but it did indicate the origin of its selection and classification. It was equivalent to the signature of Holt &
Co. to a certificate that the flour was the genuine article which had been determined by them to possess a
certain degree of excellence. It did not, of course, in itself indicate quality, for it was merely a fancy name
and in a foreign language, but it evidenced that the skill, knowledge, and judgment of Holt & Co. had been
exercised in ascertaining that the particular flour so marked was possessed of a merit rendered definite by
their examination and of a uniformity rendered certain by their selection."cralaw virtua1aw library
Greilsammer Hermanos import watches of a certain make and standard, stamp them with their trademark, put them on the market under the trade name of Meridian watches, and have advertised them and
established a market for them. By so doing they give the public to understand that watches known in
Manila as Meridian watches are of a certain make, standard, and quality, guaranteed by them. A sale of a
Meridian watch by them carries with it the guaranty that in their best judgment it is equal to the standard
thus established. They do not claim to be the manufacturers of these watches, but every sale by them of a
watch under the trade name thus adopted and advertised implies that their skill and judgment, as
watchmakers and jewellers, has been exercised in ascertaining that this watch is up to the standard
established for watches known as Meridian watches.
Trade names are acquired by adoption and user, and belong to the one who first uses them and gives them
value. (Viano v. Baccigalupo, 183 Mass., 160; Chadron Opera House Co. v. Loomer, 71 Neb., 785; Liebigs
Extract of Meat Co. v. Liebig Extract Co., 172 Fed., 158.) We think that there can be no doubt that
Greilsammer Hermanos have acquired the exclusive ownership of the trade name Meridian as applied to
this class of watches, and that they are clearly entitled to protection from the use of this trade name by
others, not only under the express provisions of section 6 of the Act, but also upon the general grounds
which afford protection against unfair competition.
Of course, nothing that has been said should be construed as a holding that Greilsammer Hermanos have
an exclusive right to sell watches of the make or standard of those on which they engrave their trademark, and which are there-after sold by them under the trade name of Meridian watches. There is nothing
in the record which would indicate that, by contract with the manufacturer or otherwise, they have
acquired any such exclusive right in and to this make of watches or in and to their sale. We hold only that
no person is entitled in these Islands to sell watches, whether of the same make and quality as those of
the defendant or of any other make and quality, under the trade name of Meridian watches, which by
adoption and user has become the property of Greilsammer Hermanos. With the infinity of distinguishing
names, marks and signs which are subject to the use and appropriation of makers and dealers in watches,
the use of the trade name Meridian by any other firm than Greilsammer Hermanos can have but one
reasonable explanation, and that is the intent to take advantage of the favorable opinion formed by the
public of the quality and standard of the watches sold by that firm under the trade name adopted by it for
advertising purposes, and as a guaranty to the public that such watches have passed through its hands
and are up to the standard set by it for watches advertised and sold as Meridian watches.
We find no error in the proceedings prejudicial to the rights of the accused. The judgment entered in the
court below should therefore be affirmed, with the costs of this instance against the Appellant. So ordered.
Pearl & Dean, INC v. SM, INC
Facts:
Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light boxes.
Theseunits utilize specially printed posters sandwiched between plastic sheets and illuminated with
backlights. It was able tosecure registration over these illuminated display units. The advertising light
boxes were marketed under the trademarkPoster Ads.In 1985, P&D negotiated with defendant Shoemart,
Inc. (SMI) for the lease and installation of the light boxes inSM North Edsa. However, since SM North Edsa
was under construction, SMI offered as alternative SM Makati andCubao. During the signing of the
Contract, SMI only returned the Contract with SM Makati. Manager of petitioner reminded SMI that their
agreement includes SM Cubao. However, SMI did not bother to reply. Instead, respondentinformed
petitioner that they are rescinding the contract for SM Makati due to non-performance.Two years later, SMI
engaged the services of EYD Rainbow Advertising to make the light boxes. These weredelivered in a
staggered basis and installed at SM Megamall and SM City. In 1989, petitioner received reports that
exactcopy of its light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc.
(NEMI), sister companyof SMI, was set up primarily to sell advertising space in lighted display units located

in SMIs different branches. Petitioner sent letters to respondents asking them to cease using the light
boxes and the discontinued use of the trademark Poster Ads.Claiming that SMI and NEMI failed to meet
its demand, petitioner filed a case for infringement of trademark andcopy right, unfair competition and
damages. SMI maintained that it independently developed its poster panels usingcommonly known
techniques and available technology without notice of or reference to P&Ds copyright. In addition, itsaid
that registration of Poster Ads obtained by petitioner was only for stationeries such as letterheads,
envelopes andthe like. Poster Ads is a generic term which cannot be appropriated as trademark, and, as
such, registration of suchmark is invalid. It also stressed that P&D is not entitled to the reliefs sought
because the advertising display unitscontained no copyright notice as provided for by law.RTC found SMI
and NEMI jointly and severally liable for infringement of copyright and trademark. CA reversedsaying that
it agreed with SMI that what was copyrighted was the technical drawings only and not the light boxes.
Lightboxes cannot be considered as either prints, pictorial illustrations, advertising copies, labels, tags or
box wraps, to beproperly classified as copyrightable class O work. In addition, CA stressed that the
protective mantle of the TrademarkLaw extends only to the goods used by the first user as specified in its
certificate of registration. The registration of thetrademark Poster Ads covers only stationeries such as
letterheads, envelopes and calling cards and newsletter.
ISSUES:
(1) If the engineering or technical drawings of an advertising display unit are granted copyright protection
is thelight box depicted in such drawings ipso facto also protected by such copyright? (2) Should the light
box be registeredseparately? (3) Can the owner of the registered trademark legally prevent others from
using such mark if it is mere abbreviation of a term descriptive of his goods, services or business?
Held:
1. No. Copyright is purely statutory. As such, the rights are limited to what the statute confers. It may be
obtained and enjoyed only with respect to the subjects and by the persons, and on the terms and
conditions specified in the statute. Accordingly, it can cover only the works falling within the statutory
enumeration or description. Petitioner secured copyright under classification class O work. Thus,
copyright protection extended only to the technical drawings 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.What the law does not include, it excludes, and for the good reason: the light box was not a literary
or artistic piece which could be copyrighted under the copyright law. And no less clearly, neither could the
lack of statutory authority to make the light box copyrightable be remedied by the simplistic act of
entitling the copyrightcertificate issued by the National Library as Advertising Display Units.It must be
noted that copyright is confined to literary and artistic works which are original intellectualcreations in the
literary and artistic domain protected from the moment of their creation.
2.Yes. Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which
could have protected its invention, if in fact it really was. And because it had no patent, petitioner could
not legally prevent anyone from manufacturing or commercially using the contraption. To be able to
effectively and legally preclude others from copying and profiting from the invention, a patent is a
primordial requirement. No patent, no protection. The ultimate goal of a patent system is to bring new
designs and technologies into the public throughdisclosure. Ideas, once, disclosed to the public without
protection of a valid patent, are subject to appropriationwithout significant restraint. The Patent Law has a
three-fold purpose: first, patent law seeks to foster and reward invention; second, itpromotes 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
patentoffice that patent is issued. Therefore, not having gone through the arduous examination for
patents, petitioner cannot exclude other s from the manufacture, sale or commercial use of the light boxes
on the sole basis of itscopyright certificate over the technical drawings.
3.Court agrees with CA that the certificate of registration issued by the Director of Patents can confer the
exclusiveright to use its own symbol only to those goods specified in the certificate, subject to any
conditions and limitations specified in the certificate. One who has adopted and used a trademark on his
goods does not preventthe 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 petitioner tosecure a trademark registration for specific use on the light boxes meant that there could
not have been anytrademark infringement since registration was an essential element thereof.There is no
evidence that petitioners use of poster Ads was distinctive or well-known. As noted by CA,petitioners

expert witness himself had testified that Poster Ads was not too generic a name. SO it was difficult
toidentify it with any company. This fact also prevented the application of the doctrine of secondary
meaning.Poster Ads was generic and incapable of being used as a trademark because it was used in the
field of poster advertising the very business engaged in by petitioner. Secondary meaning means that a
word or phraseoriginally incapable of exclusive appropriation with reference to an article in the market
might nevertheless havebeen used for so long and so exclusively by one producer with reference to his
article that , in the trade and tothat branch of the purchasing public, the word or phrase has come to mean
that the article was his property.PETITION WAS DENIED.
ART 189 Unfair Competition
a) Elements
the elements of unfair competition under Article 189(1)[43] 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
(d) That there is actual intent to deceive the public or defraud a competitor.
The element of intent to deceive may be inferred from the similarity of the goods or their appearance
NBI-Microsoft Corp v Hwang
In May 1993, Microsoft and Beltron Computer Philippines, Inc. entered into a Licensing Agreement. Under
Section 2(a) of the Agreement Microsoft authorized Beltron, for a fee, to:
Reproduce and install no more than one copy of Windows on each Customer System hard disk;
Distribute directly or indirectly and license copies of Windows (reproduced as per Section 2 of the
Agreement and/or acquired from an Authorized Replicator or Authorized Distributor.
Their agreement allowed either party to terminate if one fails to comply with their respective obligations.
Microsoft terminated the Agreement in June 1995 by reason of Beltrons non-payment of royalties. Later,
Microsoft learned that Beltron was illegally copying and selling copies of Windows. Microsoft then sought
the assistance of the National Bureau of Investigation. NBI agents made some purchase from Beltron
where they acquired a computer unit pre-installed with Windows, 12 windows installer CDs packed as
Microsoft products. The agents were not given the end-user license agreements, user manuals, and
certificates of authenticity for the products purchased. They were given a receipt which has a header of
T.M.T.C. (Phils) Inc. BELTRON COMPUTER. TMTC stands for Taiwan Machinery Display and Trade Center.
A search warrant was subsequently issued where 2,831 CDs of Windows installers, among others, were
seized. Based on the items seized from Beltron, Microsoft filed a case of copyright infringement against
Beltron and TMTC as well as their officers (Hwang et al) before the Department of Justice (DOJ). Beltron, in
its counter-affidavit, argued the following:
That Microsofts issue with Beltron was really just to have leverage in forcing Beltron to pay the unpaid
royalties; and that Microsoft should have filed a collection suit.
That the computer unit allegedly purchased by the NBI agents from them cannot be decisively traced as
coming from Beltron because the receipt issued to the agents did not list the computer unit as one of the
items bought.
That the 12 installers purchased by the agents which are actually listed in the receipt were not
manufactured by Beltron but rather they were genuine copies purchased by TMTC from an authorized
Microsoft seller in Singapore.

That the 2,831 installers seized from them were not a property of Beltron but rather they were left to
them by someone for safekeeping.
The DOJ secretary agreed with Beltron and dismissed the case. The Secretary ruled that the issue of the
authority of Beltron to copy and sell Microsoft products should first be resolved in a civil suit. Microsoft
appealed the decision of the DOJ secretary before the Supreme Court. Meanwhile, Beltron filed a motion to
quash the search warrant before the RTC that issued the same. The RTC partially granted the quashal. The
Court of Appeals reversed the RTC. Hwang et al did not appeal the CA decision.
ISSUE: Whether or not the DOJ Secretary is correct.
HELD: No. Section 5 of Presidential Decree 49 enumerates the rights vested exclusively on the copyright
owner. Contrary to the DOJs ruling, the gravamen of copyright infringement is not merely the unauthorized
manufacturing of intellectual works but rather the unauthorized performance of any of the acts covered
by Section 5. Hence, any person who performs any of the acts under Section 5 without obtaining the
copyright owners prior consent renders himself civilly and criminally liable for copyright infringement.
Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the
copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the doing by any person, without the consent of the owner
of the copyright, of anything the sole right to do which is conferred by statute on the owner of the
copyright.
Being the copyright and trademark owner of Microsoft software, Microsoft acted well within its rights in
filing the complaint before DOJ on the incriminating evidence obtained from Beltron. Hence, it was highly
irregular for the DOJ to hold that Microsoft sought the issuance of the search warrants and the filing of the
complaint merely to pressure Beltron to pay its overdue royalties to Microsoft.
There is no basis for the DOJ to rule that Microsoft must await a prior resolution from the proper court of
whether or not the Agreement is still binding between the parties. Beltron has not filed any suit to
question Microsofts termination of the Agreement. Microsoft can neither be expected nor compelled to
wait until Beltron decides to sue before Microsoft can seek remedies for violation of its intellectual property
rights.
Furthermore, the articles seized from Beltron are counterfeit per se because Microsoft does not (and could
not have authorized anyone to) produce such CD installers The copying of the genuine Microsoft software
to produce these fake CDs and their distribution are illegal even if the copier or distributor is a Microsoft
licensee. As far as these installer CD-ROMs are concerned, the Agreement (and the alleged question on the
validity of its termination) is immaterial to the determination of Beltrons liability for copyright infringement
and unfair competition. Beltrons defense that the box of CD installers found in their possession was only
left to them for safekeeping is not tenable.
b) LAW AND CASES
RA 8293, SEC 217, Intellectual Property CodeSection 217. Criminal Penalties. - 217.1. Any person infringing any right secured by provisions of Part IV of
this Act or aiding or abetting such infringement shall be guilty of a crime punishable by:
(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000)
to One hundred fifty thousand pesos (P150,000) for the first offense.
(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred
fifty thousand pesos (P150,000) to Five hundred thousand pesos (P500,000) for the second offense.
(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from five hundred
thousand pesos (P500,000) to One million five hundred thousand pesos (P1,500,000) for the third and
subsequent offenses.
(d) In all cases, subsidiary imprisonment in cases of insolvency.

217.2. In determining the number of years of imprisonment and the amount of fine, the court shall
consider the value of the infringing materials that the defendant has produced or manufactured and the
damage that the copyright owner has suffered by reason of the infringement.
217.3. Any person who at the time when copyright subsists in a work has in his possession an article which
he knows, or ought to know, to be an infringing copy of the work for the purpose of:
(a) Selling, letting for hire, or by way of trade offering or exposing for sale, or hire, the article
(b) Distributing the article for purpose of trade, or for any other purpose to an extent that will prejudice the
rights of the copyright owner in the work; or
(c) Trade exhibit of the article in public, shall be guilty of an offense and shall be liable on conviction to
imprisonment and fine as above mentioned.
Columbia Pictures, inc, v CA
FACTS: In 1986, the Video Regulatory Board (VRB) applied for a warrant against Jose Jinco (Jingco), owner
of Showtime Enterprises for allegedly pirating movies produced and owned by Columbia Pictures and
other motion picture companies. Jingco filed a motion to quash the search warrant but the same was
denied in 1987. Subsequently, Jinco filed an Urgent Motion to Lift the Search Warrant and Return the
Articles Seized. In 1989, the RTC judge granted the motion. The judge ruled that based on the ruling in the
1988 case of 20th Century Fox Film Corporation vs CA, before a search warrant could be issued in
copyright cases, the master copy of the films alleged to be pirated must be attached in the application for
warrant.
ISSUE: Whether or not the 20th Century Fox ruling may be applied retroactively in this case.
HELD: No. In 1986, obviously the 1988 case of 20th Century Fox was not yet promulgated. The lower court
could not possibly have expected more evidence from the VRB and Columbia Pictures in their application
for a search warrant other than what the law and jurisprudence, then existing and judicially accepted,
required with respect to the finding of probable cause.
The Supreme Court also revisited and clarified the ruling in the 20th Century Fox Case. It is evidently
incorrect to suggest, as the ruling in 20th Century Fox may appear to do, that in copyright infringement
cases, the presentation of master tapes of the copyright films is always necessary to meet the requirement
of probable cause for the issuance of a search warrant. It is true that such master tapes are object
evidence, with the merit that in this class of evidence the ascertainment of the controverted fact is made
through demonstration involving the direct use of the senses of the presiding magistrate. Such auxiliary
procedure, however, does not rule out the use of testimonial or documentary evidence, depositions,
admissions or other classes of evidence tending to prove the factum probandum, especially where the
production in court of object evidence would result in delay, inconvenience or expenses out of proportion
to is evidentiary value.
In fine, the supposed pronouncement in said case regarding the necessity for the presentation of the
master tapes of the copy-righted films for the validity of search warrants should at most be understood to
merely serve as a guidepost in determining the existence of probable cause in copy-right infringement
cases where there is doubt as to the true nexus between the master tape and the pirated copies. An
objective and careful reading of the decision in said case could lead to no other conclusion than that said
directive was hardly intended to be a sweeping and inflexible requirement in all or similar copyright
infringement cases.
Facts:
07 April 1998: NBI filed with the RTC of Pasig 3 applications for SW againstprivate respondent (Tube Video
Enterprises Edward C. Cham; BloomingRose Tape Center Ma. Jajorie T. Uy; Video Channel Lydia
Nabong) chargingthem with violations of Sec. 56 of PD 49 (Decree on the Protection of Intellectual
Property) as amended by PD 1988.
RTC Judge Austria consolidated the 3 applications and conducted a jointhearing where she made a
personal examination of the applicant (NBI AgentReyes) and his witnesses.
Finding just and probable cause, Judge Austria issued the search warrants.

Private Respondents filed their Motion to Quash the SW citing as groundsthat there was no probable
cause; the films in question are not protected byPD 1988 in that they were never registered in the National
Library as acondition precedent to the availment of the protection; the Motion PictureAssociation of
America have not proven nor established their ownership overthe films; etc.
Judge Austria reversed her former stand initially finding probable cause forthe issuance of the search
warrants and ordered their quashal:
O Private complainants uncertain of their ownership over the titles;
O Complainants did not comply with the requirement that master tapesshould be presented during the
application for search warrants; Complainants failed to comply with the deposit and
registrationrequirements of PD 49 as amended by PD 1988.
Judge Austria also ordered the return of the items seized by virtue of thewarrants.
CA affirmed the quashal of the SWs.
Issue: WON the SWs were issued with probable cause. NO
Ratio :BASIC REQUIREMENT for the validity of search warrants (in cases of this nature) is the presentation
of the master tapes of the copyrighted films from whichthe pirated films are supposed to have been copied
(20Th Century Fox FilmCorp. vs. CA, 164 SCRA 655). The essence of a copyright infringement is the
similarity or at least substantial similarity of the purported pirated works to the copyrighted work. Hence,
theapplicant must present to the court the copyrighted films to compare them with thepurchased evidence
of the video tapes allegedly pirated to determine whether thelatter is an unauthorized reproduction of the
former. This linkage of the copyrightedfilms to the pirated films must be established to satisfy the
requirements of probable cause. Mere allegations as to the existence of the copyrighted films cannotserve
as basis for the issuance of a search warrant.According to the CA, in which the SC concurs:
It is not correct to say that "the basic fact" to be proven to establishprobable cause in the instant cases is
not the "unauthorized transfer"of a motion picture that has been recorded but the "sale, lease,
ordistribution of pirated video tapes of copyrighted films."In applying for the search warrants the NBI
charged violation of theentire provisions of Section 56 of P.D. No. 49 as amended by P.D.No.1988. This
included not only the sale, lease or distribution of piratedtapes but also the transfer or causing to be
transferred of any soundrecording or motion picture or other audio visual work.But even assuming, as
appellants argue, that only the sale, lease, ordistribution of pirated video tapes is involved, the fact
remains thatthere is need to establish probable cause that the tapes being sold,leased or distributed are
pirated tapes, hence the issue reverts back tothe question of whether there was unauthorized transfer,
directly orindirectly, of a sound recording or motion picture or other audio visualwork that has been
recorded Petitions denied.
MIRPURI v CA
FACTS
Lolita Escobar applied with the Bureau of Patents for the registration of the trademark Barbizon,
alleging that she had been manufacturing and selling these products since 1970. private respondent
Barbizon Corp opposed the application in IPC No. 686. The Bureau granted the application and a certificate
of registration was issued for the trademark Barbizon. Escobar later assigned all her rights and interest
over the trademark to petitioner Mirpuri. In 1979, Escobar failed to file with the Bureau the Affidavit of Use
of the trademark. Due to his failure, the Bureau cancelled the certificate of registration. Escobar reapplied
and Mirpuri also applied and this application was also opposed by private respondent in IPC No. 2049,
claiming that it adopted said trademark in 1933 and has been using it. It obtained a certificate from the US
Patent Office in 1934. Then in 1991, DTI cancelled petitioners registration and declared private respondent
the owner and prior user of the business name Barbizon International.
ISSUE
Whether or not the treaty (Paris Convention) affords protection to a foreign corporation against a
Philippine applicant for the registration of a similar trademark.
HELD

The Court held in the affirmative. RA 8293 defines trademark as any visible sign capable of
distinguishing goods. 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. 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.
Facts: In 1970, Escobar filed an application with the Bureau of Patents for the registration of the
trademark Barbizon for use in horsiers and ladies undergarments (IPC No. 686). 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.
In 1974, the Director of Patents gave due course to the application. Escobar later assigned all his rights
and interest over the trademark to petitioner. In 1979, Escobar failed to file with the Bureau the affidavit of
use of the trademark required under the Philippine Trademark Law. Due to this failure, the Bureau
cancelled Escobars certificate of registration. In 1981, Escobar and petitioner separately filed this
application for registration of the same trademark. (IPC 2049). Private respondent opposed again. This
time it alleged (1) 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. Petitioner raised the defense of Res Judicata.
Issue: One of the requisites of res judicata is identical causes of action. Do IPC No. 686 and IPC No. 2049
involve the same cause of action?
2. Whether a treaty affords protection to a foreign corporation against a Philippine applicant for the
registration of a similar trademark.

Held: No. 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 being 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.
2. The WTO is a common institutional framework for the conduct of trade relations among its members in
matters related to the multilateral and plurilateral trade agreements annexed to the WTO Agreement, one
of which is the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPs. Members to
this Agreement have agreed to adhere to minimum standards of protection set by several Conventions,
including the Paris Convention. The Philippines and the US have acceded to the WTO Agreement.
Conformably, the State must reaffirm its commitment to the global