FOR WEDNESDAY CONFLICT OF LAWS

Aznar vs. Garcia

Where the testator was a citizen of California, and domiciled in the Philippines, the
amount of successional rights should be governed by his national law. However, since
the conflicts of law rules of California provides that in case of citizens who are
residents of another country, the law of the country of domicile should apply, then
Philippine law on legitimes was applied. Hence, under Philippine laws, the
acknowledged natural daughter cannot be deprived of her legitime.

G.R. No. L-16749

January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED.

ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased, Executor and
Heir-appellees,
vs.
HELEN CHRISTENSEN GARCIA, oppositor-appellant.
M. R. Sotelo for executor and heir-appellees.
Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.
LABRADOR, J.:
This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente N. Cusi, Jr.,
presiding, in Special Proceeding No. 622 of said court, dated September 14, 1949, approving among
things the final accounts of the executor, directing the executor to reimburse Maria Lucy Christensen
the amount of P3,600 paid by her to Helen Christensen Garcia as her legacy, and declaring Maria
Lucy Christensen entitled to the residue of the property to be enjoyed during her lifetime, and in case
of death without issue, one-half of said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in
accordance with the provisions of the will of the testator Edward E. Christensen. The will was
executed in Manila on March 5, 1951 and contains the following provisions:
3. I declare ... that I have but ONE (1) child, named MARIA LUCY CHRISTENSEN (now Mrs.
Bernard Daney), who was born in the Philippines about twenty-eight years ago, and who is
now residing at No. 665 Rodger Young Village, Los Angeles, California, U.S.A.
4. I further declare that I now have no living ascendants, and no descendants except my
above named daughter, MARIA LUCY CHRISTENSEN DANEY.
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7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now married to
Eduardo Garcia, about eighteen years of age and who, notwithstanding the fact that she was
baptized Christensen, is not in any way related to me, nor has she been at any time adopted

by me, and who, from all information I have now resides in Egpit, Digos, Davao, Philippines,
the sum of THREE THOUSAND SIX HUNDRED PESOS (P3,600.00), Philippine Currency
the same to be deposited in trust for the said Maria Helen Christensen with the Davao
Branch of the Philippine National Bank, and paid to her at the rate of One Hundred Pesos
(P100.00), Philippine Currency per month until the principal thereof as well as any interest
which may have accrued thereon, is exhausted..
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12. I hereby give, devise and bequeath, unto my well-beloved daughter, the said MARIA
LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing as aforesaid at No. 665
Rodger Young Village, Los Angeles, California, U.S.A., all the income from the rest,
remainder, and residue of my property and estate, real, personal and/or mixed, of
whatsoever kind or character, and wheresoever situated, of which I may be possessed at my
death and which may have come to me from any source whatsoever, during her lifetime: ....
It is in accordance with the above-quoted provisions that the executor in his final account and project
of partition ratified the payment of only P3,600 to Helen Christensen Garcia and proposed that the
residue of the estate be transferred to his daughter, Maria Lucy Christensen.
Opposition to the approval of the project of partition was filed by Helen Christensen Garcia, insofar
as it deprives her (Helen) of her legitime as an acknowledged natural child, she having been
declared by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the deceased Edward E.
Christensen. The legal grounds of opposition are (a) that the distribution should be governed by the
laws of the Philippines, and (b) that said order of distribution is contrary thereto insofar as it denies to
Helen Christensen, one of two acknowledged natural children, one-half of the estate in full
ownership. In amplification of the above grounds it was alleged that the law that should govern the
estate of the deceased Christensen should not be the internal law of California alone, but the entire
law thereof because several foreign elements are involved, that the forum is the Philippines and
even if the case were decided in California, Section 946 of the California Civil Code, which requires
that the domicile of the decedent should apply, should be applicable. It was also alleged that Maria
Helen Christensen having been declared an acknowledged natural child of the decedent, she is
deemed for all purposes legitimate from the time of her birth.
The court below ruled that as Edward E. Christensen was a citizen of the United States and of the
State of California at the time of his death, the successional rights and intrinsic validity of the
provisions in his will are to be governed by the law of California, in accordance with which a testator
has the right to dispose of his property in the way he desires, because the right of absolute dominion
over his property is sacred and inviolable (In re McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d
952, and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor
Maria Helen Christensen, through counsel, filed various motions for reconsideration, but these were
denied. Hence, this appeal.
The most important assignments of error are as follows:
I

THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE SUPREME
COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E.
CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER JUST SHARE IN THE
INHERITANCE.
II
THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO RECOGNIZE THE
EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES CALLING FOR THE
APPLICATION OF INTERNAL LAW.
III
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER INTERNATIONAL LAW,
PARTICULARLY UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY OF THE
TESTAMENTARY DISPOSITION OF THE DISTRIBUTION OF THE ESTATE OF THE DECEASED
EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF DISTRIBUTION
SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS.
V
THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE LAWS
HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE IN FULL
OWNERSHIP.
There is no question that Edward E. Christensen was a citizen of the United States and of the State
of California at the time of his death. But there is also no question that at the time of his death he
was domiciled in the Philippines, as witness the following facts admitted by the executor himself in
appellee's brief:
In the proceedings for admission of the will to probate, the facts of record show that the
deceased Edward E. Christensen was born on November 29, 1875 in New York City, N.Y.,
U.S.A.; his first arrival in the Philippines, as an appointed school teacher, was on July 1,
1901, on board the U.S. Army Transport "Sheridan" with Port of Embarkation as the City of
San Francisco, in the State of California, U.S.A. He stayed in the Philippines until 1904.
In December, 1904, Mr. Christensen returned to the United States and stayed there for the
following nine years until 1913, during which time he resided in, and was teaching school in
Sacramento, California.
Mr. Christensen's next arrival in the Philippines was in July of the year 1913. However, in
1928, he again departed the Philippines for the United States and came back here the

following year, 1929. Some nine years later, in 1938, he again returned to his own country,
and came back to the Philippines the following year, 1939.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted
and approved by this Honorable Court, without prejudice to the parties adducing other
evidence to prove their case not covered by this stipulation of facts.
1wph1.t

Being an American citizen, Mr. Christensen was interned by the Japanese Military Forces in
the Philippines during World War II. Upon liberation, in April 1945, he left for the United
States but returned to the Philippines in December, 1945. Appellees Collective Exhibits "6",
CFI Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l",
"MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)
In April, 1951, Edward E. Christensen returned once more to California shortly after the
making of his last will and testament (now in question herein) which he executed at his
lawyers' offices in Manila on March 5, 1951. He died at the St. Luke's Hospital in the City of
Manila on April 30, 1953. (pp. 2-3)
In arriving at the conclusion that the domicile of the deceased is the Philippines, we are persuaded
by the fact that he was born in New York, migrated to California and resided there for nine years, and
since he came to the Philippines in 1913 he returned to California very rarely and only for short visits
(perhaps to relatives), and considering that he appears never to have owned or acquired a home or
properties in that state, which would indicate that he would ultimately abandon the Philippines and
make home in the State of California.
Sec. 16. Residence is a term used with many shades of meaning from mere temporary
presence to the most permanent abode. Generally, however, it is used to denote something
more than mere physical presence. (Goodrich on Conflict of Laws, p. 29)
As to his citizenship, however, We find that the citizenship that he acquired in California when he
resided in Sacramento, California from 1904 to 1913, was never lost by his stay in the Philippines,
for the latter was a territory of the United States (not a state) until 1946 and the deceased appears to
have considered himself as a citizen of California by the fact that when he executed his will in 1951
he declared that he was a citizen of that State; so that he appears never to have intended to
abandon his California citizenship by acquiring another. This conclusion is in accordance with the
following principle expounded by Goodrich in his Conflict of Laws.
The terms "'residence" and "domicile" might well be taken to mean the same thing, a place of
permanent abode. But domicile, as has been shown, has acquired a technical meaning.
Thus one may be domiciled in a place where he has never been. And he may reside in a
place where he has no domicile. The man with two homes, between which he divides his
time, certainly resides in each one, while living in it. But if he went on business which would
require his presence for several weeks or months, he might properly be said to have
sufficient connection with the place to be called a resident. It is clear, however, that, if he
treated his settlement as continuing only for the particular business in hand, not giving up his
former "home," he could not be a domiciled New Yorker. Acquisition of a domicile of choice

requires the exercise of intention as well as physical presence. "Residence simply requires
bodily presence of an inhabitant in a given place, while domicile requires bodily presence in
that place and also an intention to make it one's domicile." Residence, however, is a term
used with many shades of meaning, from the merest temporary presence to the most
permanent abode, and it is not safe to insist that any one use et the only proper one.
(Goodrich, p. 29)
The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil
Code of the Philippines, which is as follows:
ART. 16. Real property as well as personal property is subject to the law of the country
where it is situated.
However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country where said property may be found.
The application of this article in the case at bar requires the determination of the meaning of the
term "national law"is used therein.
There is no single American law governing the validity of testamentary provisions in the United
States, each state of the Union having its own private law applicable to its citizens only and in force
only within the state. The "national law" indicated in Article 16 of the Civil Code above quoted can
not, therefore, possibly mean or apply to any general American law. So it can refer to no other than
the private law of the State of California.
The next question is: What is the law in California governing the disposition of personal property?
The decision of the court below, sustains the contention of the executor-appellee that under the
California Probate Code, a testator may dispose of his property by will in the form and manner he
desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant
invokes the provisions of Article 946 of the Civil Code of California, which is as follows:
If there is no law to the contrary, in the place where personal property is situated, it is
deemed to follow the person of its owner, and is governed by the law of his domicile.
The existence of this provision is alleged in appellant's opposition and is not denied. We have
checked it in the California Civil Code and it is there. Appellee, on the other hand, relies on the case
cited in the decision and testified to by a witness. (Only the case of Kaufman is correctly cited.) It is
argued on executor's behalf that as the deceased Christensen was a citizen of the State of
California, the internal law thereof, which is that given in the abovecited case, should govern the
determination of the validity of the testamentary provisions of Christensen's will, such law being in
force in the State of California of which Christensen was a citizen. Appellant, on the other hand,
insists that Article 946 should be applicable, and in accordance therewith and following the doctrine

of therenvoi, the question of the validity of the testamentary provision in question should be referred
back to the law of the decedent's domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by various authors, thus:
The problem has been stated in this way: "When the Conflict of Laws rule of the forum refers
a jural matter to a foreign law for decision, is the reference to the purely internal rules of law
of the foreign system; i.e., to the totality of the foreign law minus its Conflict of Laws rules?"
On logic, the solution is not an easy one. The Michigan court chose to accept the renvoi, that
is, applied the Conflict of Laws rule of Illinois which referred the matter back to Michigan law.
But once having determined the the Conflict of Laws principle is the rule looked to, it is
difficult to see why the reference back should not have been to Michigan Conflict of Laws.
This would have resulted in the "endless chain of references" which has so often been
criticized be legal writers. The opponents of the renvoi would have looked merely to the
internal law of Illinois, thus rejecting the renvoi or the reference back. Yet there seems no
compelling logical reason why the original reference should be the internal law rather than to
the Conflict of Laws rule. It is true that such a solution avoids going on a merry-go-round, but
those who have accepted the renvoi theory avoid this inextricabilis circulas by getting off at
the second reference and at that point applying internal law. Perhaps the opponents of
the renvoi are a bit more consistent for they look always to internal law as the rule of
reference.
Strangely enough, both the advocates for and the objectors to the renvoi plead that greater
uniformity will result from adoption of their respective views. And still more strange is the fact
that the only way to achieve uniformity in this choice-of-law problem is if in the dispute the
two states whose laws form the legal basis of the litigation disagree as to whether
the renvoi should be accepted. If both reject, or both accept the doctrine, the result of the
litigation will vary with the choice of the forum. In the case stated above, had the Michigan
court rejected the renvoi, judgment would have been against the woman; if the suit had been
brought in the Illinois courts, and they too rejected the renvoi, judgment would be for the
woman. The same result would happen, though the courts would switch with respect to
which would hold liability, if both courts accepted the renvoi.
The Restatement accepts the renvoi theory in two instances: where the title to land is in
question, and where the validity of a decree of divorce is challenged. In these cases the
Conflict of Laws rule of the situs of the land, or the domicile of the parties in the divorce case,
is applied by the forum, but any further reference goes only to the internal law. Thus, a
person's title to land, recognized by the situs, will be recognized by every court; and every
divorce, valid by the domicile of the parties, will be valid everywhere. (Goodrich, Conflict of
Laws, Sec. 7, pp. 13-14.)
X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving movable property
in Massachusetts, England, and France. The question arises as to how this property is to be
distributed among X's next of kin.

Assume (1) that this question arises in a Massachusetts court. There the rule of the conflict
of laws as to intestate succession to movables calls for an application of the law of the
deceased's last domicile. Since by hypothesis X's last domicile was France, the natural thing
for the Massachusetts court to do would be to turn to French statute of distributions, or
whatever corresponds thereto in French law, and decree a distribution accordingly. An
examination of French law, however, would show that if a French court were called upon to
determine how this property should be distributed, it would refer the distribution to the
national law of the deceased, thus applying the Massachusetts statute of distributions. So on
the surface of things the Massachusetts court has open to it alternative course of action: (a)
either to apply the French law is to intestate succession, or (b) to resolve itself into a French
court and apply the Massachusetts statute of distributions, on the assumption that this is
what a French court would do. If it accepts the so-called renvoidoctrine, it will follow the latter
course, thus applying its own law.
This is one type of renvoi. A jural matter is presented which the conflict-of-laws rule of the
forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back
again to the law of the forum. This is renvoi in the narrower sense. The German term for this
judicial process is 'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523-571.)
After a decision has been arrived at that a foreign law is to be resorted to as governing a
particular case, the further question may arise: Are the rules as to the conflict of laws
contained in such foreign law also to be resorted to? This is a question which, while it has
been considered by the courts in but a few instances, has been the subject of frequent
discussion by textwriters and essayists; and the doctrine involved has been descriptively
designated by them as the "Renvoyer" to send back, or the "Ruchversweisung", or the
"Weiterverweisung", since an affirmative answer to the question postulated and the operation
of the adoption of the foreign law in toto would in many cases result in returning the main
controversy to be decided according to the law of the forum. ... (16 C.J.S. 872.)
Another theory, known as the "doctrine of renvoi", has been advanced. The theory of the
doctrine of renvoiis that the court of the forum, in determining the question before it, must
take into account the whole law of the other jurisdiction, but also its rules as to conflict of
laws, and then apply the law to the actual question which the rules of the other jurisdiction
prescribe. This may be the law of the forum. The doctrine of therenvoi has generally been
repudiated by the American authorities. (2 Am. Jur. 296)
The scope of the theory of renvoi has also been defined and the reasons for its application in a
country explained by Prof. Lorenzen in an article in the Yale Law Journal, Vol. 27, 1917-1918, pp.
529-531. The pertinent parts of the article are quoted herein below:
The recognition of the renvoi theory implies that the rules of the conflict of laws are to be
understood as incorporating not only the ordinary or internal law of the foreign state or
country, but its rules of the conflict of laws as well. According to this theory 'the law of a
country' means the whole of its law.
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Von Bar presented his views at the meeting of the Institute of International Law, at
Neuchatel, in 1900, in the form of the following theses:
(1) Every court shall observe the law of its country as regards the application of foreign laws.
(2) Provided that no express provision to the contrary exists, the court shall respect:
(a) The provisions of a foreign law which disclaims the right to bind its nationals
abroad as regards their personal statute, and desires that said personal statute shall
be determined by the law of the domicile, or even by the law of the place where the
act in question occurred.
(b) The decision of two or more foreign systems of law, provided it be certain that one
of them is necessarily competent, which agree in attributing the determination of a
question to the same system of law.
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If, for example, the English law directs its judge to distribute the personal estate of an
Englishman who has died domiciled in Belgium in accordance with the law of his domicile,
he must first inquire whether the law of Belgium would distribute personal property upon
death in accordance with the law of domicile, and if he finds that the Belgian law would make
the distribution in accordance with the law of nationality that is the English law he must
accept this reference back to his own law.
We note that Article 946 of the California Civil Code is its conflict of laws rule, while the rule applied
in In re Kaufman, Supra, its internal law. If the law on succession and the conflict of laws rules of
California are to be enforced jointly, each in its own intended and appropriate sphere, the principle
cited In re Kaufman should apply to citizens living in the State, but Article 946 should apply to such
of its citizens as are not domiciled in California but in other jurisdictions. The rule laid down of
resorting to the law of the domicile in the determination of matters with foreign element involved is in
accord with the general principle of American law that the domiciliary law should govern in most
matters or rights which follow the person of the owner.
When a man dies leaving personal property in one or more states, and leaves a will directing
the manner of distribution of the property, the law of the state where he was domiciled at the
time of his death will be looked to in deciding legal questions about the will, almost as
completely as the law of situs is consulted in questions about the devise of land. It is logical
that, since the domiciliary rules control devolution of the personal estate in case of intestate
succession, the same rules should determine the validity of an attempted testamentary
dispostion of the property. Here, also, it is not that the domiciliary has effect beyond the
borders of the domiciliary state. The rules of the domicile are recognized as controlling by the
Conflict of Laws rules at the situs property, and the reason for the recognition as in the case
of intestate succession, is the general convenience of the doctrine. The New York court has
said on the point: 'The general principle that a dispostiton of a personal property, valid at the
domicile of the owner, is valid anywhere, is one of the universal application. It had its origin in

that international comity which was one of the first fruits of civilization, and it this age, when
business intercourse and the process of accumulating property take but little notice of
boundary lines, the practical wisdom and justice of the rule is more apparent than ever.
(Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)
Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as the national
law is the internal law of California. But as above explained the laws of California have prescribed
two sets of laws for its citizens, one for residents therein and another for those domiciled in other
jurisdictions. Reason demands that We should enforce the California internal law prescribed for its
citizens residing therein, and enforce the conflict of laws rules for the citizens domiciled abroad. If we
must enforce the law of California as in comity we are bound to go, as so declared in Article 16 of
our Civil Code, then we must enforce the law of California in accordance with the express mandate
thereof and as above explained, i.e., apply the internal law for residents therein, and its conflict-oflaws rule for those domiciled abroad.
It is argued on appellees' behalf that the clause "if there is no law to the contrary in the place where
the property is situated" in Sec. 946 of the California Civil Code refers to Article 16 of the Civil Code
of the Philippines and that the law to the contrary in the Philippines is the provision in said Article 16
that the national law of the deceased should govern. This contention can not be sustained. As
explained in the various authorities cited above the national law mentioned in Article 16 of our Civil
Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the
reference or return of the question to the law of the testator's domicile. The conflict of laws rule in
California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled
in California, to the law of his domicile, the Philippines in the case at bar. The court of the domicile
can not and should not refer the case back to California; such action would leave the issue incapable
of determination because the case will then be like a football, tossed back and forth between the two
states, between the country of which the decedent was a citizen and the country of his domicile. The
Philippine court must apply its own law as directed in the conflict of laws rule of the state of the
decedent, if the question has to be decided, especially as the application of the internal law of
California provides no legitime for children while the Philippine law, Arts. 887(4) and 894, Civil Code
of the Philippines, makes natural children legally acknowledged forced heirs of the parent
recognizing them.
The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40 Phil. 105;
Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider Babcock, 52 Phil. 130; and Gibbs vs.
Government, 59 Phil. 293.) cited by appellees to support the decision can not possibly apply in the
case at bar, for two important reasons, i.e., the subject in each case does not appear to be a citizen
of a state in the United States but with domicile in the Philippines, and it does not appear in each
case that there exists in the state of which the subject is a citizen, a law similar to or identical with
Art. 946 of the California Civil Code.
We therefore find that as the domicile of the deceased Christensen, a citizen of California, is the
Philippines, the validity of the provisions of his will depriving his acknowledged natural child, the
appellant, should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil
Code of California, not by the internal law of California..

WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower
court with instructions that the partition be made as the Philippine law on succession provides.
Judgment reversed, with costs against appellees.
Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon, Regala and Makalintal, JJ.,
concur.
Bengzon, C.J., took no part.

Facts:
Edward S. Christensen, though born in New York, migrated to California where he resided
and consequently was considered a California Citizen for a period of nine years to 1913. He came to
the Philippines where he became a domiciliary until the time of his death. However, during the entire
period of his residence in this country, he had always considered himself as a citizen of California.
In his will, executed on March 5, 1951, he instituted an acknowledged natural daughter,
Maria Lucy Christensen as his only heir but left a legacy of some money in favor of Helen
Christensen Garcia who, in a decision rendered by the Supreme Court had been declared as an
acknowledged natural daughter of his. Counsel of Helen claims that under Art. 16 (2) of the civil
code, California law should be applied, the matter is returned back to the law of domicile, that
Philippine law is ultimately applicable, that the share of Helen must be increased in view of
successional rights of illegitimate children under Philippine laws. On the other hand, counsel for
daughter Maria , in as much that it is clear under Art, 16 (2) of the Mew Civil Code, the national of
the deceased must apply, our courts must apply internal law of California on the matter. Under
California law, there are no compulsory heirs and consequently a testator should dispose any
property possessed by him in absolute dominion.

Issue:
Whether Philippine Law or California Law should apply.

Held:
The Supreme Court deciding to grant more successional rights to Helen Christensen
Garcia said in effect that there be two rules in California on the matter.
1.

The conflict rule which should apply to Californians outside the California, and

2.

The internal Law which should apply to California domiciles in califronia.

The California conflict rule, found on Art. 946 of the California Civil code States that if there
is no law to the contrary in the place where personal property is situated, it is deemed to follow the
decree of its owner and is governed by the law of the domicile.

Christensen being domiciled outside california, the law of his domicile, the Philippines is
ought to be followed.
Wherefore, the decision appealed is reversed and case is remanded to the lower court with
instructions that partition be made as that of the Philippine law provides.

Barretto vs. Gonzales

G.R. No. L-37048

March 7, 1933

MANUELA BARRETTO GONZALEZ, plaintiff-appellee,

vs.
AUGUSTO C. GONZALEZ, defendant-appellant.
AUGUSTO C. GONZALEZ, Jr., ET AL., intervenors-appellees.
Quintin Paredes and Barrera and Reyes for appellant.
DeWitt, Perkins and Brady for plaintiff-appellee.
Camus and Delgado for intervenors-appellees.
HULL, J.:
Plaintiff and defendant are citizens of the Philippine Islands and at present residents of the City of
Manila. They were married in the City of Manila on January 19, 1919, and lived together as man and
wife in the Philippine Islands until the spring of 1926. They voluntarily separated and since that time
have not lived together as man and wife. Of this union four children were born who are now 11, 10, 8
and 6 years of age. Negotiations between the parties, both being represented by attorneys,
continued for several months, whereupon it was mutually agreed to allow the plaintiff for her support
and that of her children, five hundred pesos (P500) monthly; this amount to be increased in case of
illness or necessity, and the title of certain properties to be put in her name. Shortly after this
agreement the husband left the Islands, betook himself to Reno, Nevada, and secured in that
jurisdiction an absolute divorce on the ground of desertion, which decree was dated November 28,
1927. Shortly thereafter the defendant moved to California and returned to these Islands in August
1928, where he has since remained. On the same date that he secured a divorce in Nevada he went
through the forms of marriage with another citizen of these Islands and now has three children as a
result of that marriage. Defendant, after his departure from these Islands, reduced the amount he
had agreed to pay monthly for the support of his wife and four minor children and has not made the
payments fixed in the Reno divorce as alimony.
Shortly after his return his wife brought action in the Court of First Instance of Manila requesting that
the courts of the Philippine Islands confirm and ratify the decree of divorce issued by the courts of
the State of Nevada; that section 9 of Act No. 2710, which reads as follows:
The decree of divorce shall dissolve the community of property as soon as such decree
becomes final, but shall not dissolve the bonds of matrimony until one year thereafter.

The bonds of matrimony shall not be considered as dissolved with regard to the spouse who,
having legitimate children, has not delivered to each of them or to the guardian appointed by
the court, within said period of one year, the equivalent of what would have been due to them
as their legal portion if said spouse had died intestate immediately after the dissolution of the
community of property.
be enforced, and that she and the defendant deliver to the guardian ad litem the equivalent of what
would have been due to their children as their legal portion from the respective estates had their
parents did intestate on November 28, 1927. It is also prayed that the community existing between
plaintiff and defendant be declared dissolved and the defendant be ordered to render an accounting
and to deliver to the plaintiff her share of the community property, that the defendant be ordered to
pay the plaintiff alimony at the rate of five hundred pesos (P500) per month, that the defendant be
ordered to pay the plaintiff, as counsel fees, the sum of five thousand pesos (P5000), and that the
defendant be ordered to pay plaintiff the expenses incurred in educating the three minor sons.
A guardian ad litem was appointed for the minor children, and they appear as intervenors and join
their mother in these proceedings. The Court of First Instance, after hearing, found against the
defendant and granted judgment as prayed for by the plaintiff and intervenors, with the exception of
reducing attorneys fees to three thousand, and also granted costs of the action against the
defendant. From this judgment defendant appeals and makes the following assignment of errors:
I. The lower court erred in not declaring that paragraph 2 of section 9 of the Philippine
Divorce Law, is unconstitutional, null and void.
II. The lower court erred in holding that section 9 of Act No. 2710 (Divorce Law) applies to
the Nevada decree of divorce issued in favor of appellant Augusto C. Gonzalez, said decree
being entitled to confirmation and recognition.
III. The lower court erred in not dismissing the complaint in intervention for lack of cause of
action against appellant and appellee.
IV. The lower court erred in not declaring the notice of lis pendens filed by intervenors to be
null and void.
V. The lower court erred in ordering the appellant to pay the sum of P500 per month for the
support not only of his children but also of his ex-wife, appellee herein, Manuela Barretto.
VI. The lower court erred in not holding that plaintiff- appellee, Manuela Barretto, is not
entitled to support from her ex-husband, herein appellant, over and beyond the alimony fixed
by the divorce decree in Exhibit A.
VII. The lower court erred in condemning defendant appellant to pay to plaintiff-appellee
P3,000 attorney's fees.
VIII. The lower court erred in denying appellant's motion for new trial.

While the parties in this action are in dispute over financial matters they are in unity in trying to
secure the courts of this jurisdiction to recognize and approve of the Reno divorce. On the record
here presented this can not be done. The public policy in this jurisdiction on the question of divorce
is clearly set forth in Act No. 2710, and the decisions of this court: Goitia vs. Campos Rueda (35
Phil., 252); Garcia Valdez vs. Soteraa Tuason (40 Phil., 943-952);Ramirez vs. Gmur (42 Phil.,
855); Chereau vs. Fuentebella (43 Phil., 216); Fernandez vs. De Castro (48 Phil., 123);Gorayeb vs.
Hashim (50 Phil., 22); Francisco vs. Tayao (50 Phil., 42); Alkuino Lim Pang vs. Uy Pian Ng Shun
and Lim Tingco (52 Phil., 571); and the late case of Cousins Hix vs. Fluemer, decided March 21,
1931, and reported in 55 Phil., 851.
The entire conduct of the parties from the time of their separation until the case was submitted to this
court, in which they all prayed that the Reno divorce be ratified and confirmed, clearly indicates a
purpose to circumvent the laws of the Philippine Islands regarding divorce and to secure for
themselves a change of status for reasons and under conditions not authorized by our law. At all
times the matrimonial domicile of this couple has been within the Philippine Islands and the
residence acquired in the State of Nevada by the husband of the purpose of securing a divorce was
not a bona fide residence and did not confer jurisdiction upon the Court of that State to dissolve the
bonds if matrimony in which he had entered in 1919. While the decisions of this court heretofore in
refusing to recognize the validity of foreign divorce has usually been expressed in the negative and
have been based upon lack of matrimonial domicile or fraud or collusion, we have not overlooked
the provisions of the Civil Code now in force in these Islands. Article 9 thereof reads as follows:
The laws relating to family rights and duties, or to the status, condition and legal capacity or
persons, are binding upon Spaniards even though they reside in a foreign country.
And article 11, the last part of which reads:
. . . the prohibitive laws concerning persons, their acts and their property, and those intended
to promote public order and good morals, shall nor be rendered without effect by any foreign
laws or judgments or by anything done or any agreements entered into a foreign country.
It is therefore a serious question whether any foreign divorce relating to citizens of the Philippine
Islands, will be recognized in this jurisdiction, except it be for a cause, and under conditions for
which the courts of Philippine Islands would grant a divorce. The lower court in granting relief as
prayed for frankly stated that the securing of the divorce, the contracting of another marriage and the
bringing into the world of innocent children brings about such a condition that the court must grant
relief. The hardships of the existing divorce laws of the Philippine Islands are well known to the
members of the Legislature. It is of no moment in this litigation what he personal views of the writer
on the subject of divorce may be. It is the duty of the courts to enforce the laws of divorce as written
by the Legislature if they are constitutional. Courts have no right to say that such laws are too strict
or too liberal.
Litigants by mutual agreement can not compel the courts to approve of their own actions or permit
the personal relations of the citizens of these Islands to be affected by decrees of foreign courts in a
manner which our Government believes is contrary to public order and good morals. Holding the

above views it becomes unnecessary to discuss the serious constitutional question presented by
appellant in his first assignment of error.
The judgment of the Court of First Instance of the City of Manila must therefore be reversed and
defendant absolved from the demands made against him in this action. This, however, without
prejudice to any right of maintenance that plaintiff and the intervenors may have against defendant.
No special pronouncement as to costs. So ordered.

FOR THURSDAY LAW ON INTELLECTUAL PROPERTY

1. Samson vs Cabanos GR # 161693 June 28, 2005

etitioner Manolo P. Samson seeks the reversal of the orders dated January
22, 2003 and November 17, 2003 issued by Presiding Judge Felix S. Caballes
and Acting Presiding Judge Victoriano B. Cabanos, respectively, of the
Regional Trial Court (RTC) of Antipolo City, Branch 71, in relation to Criminal
Case No. 02-23183. The assailed orders denied petitioners motion to quash
the information for unfair competition filed against him before said court.
Petitioner also prayed that a temporary restraining order and/or preliminary
injunction be issued to enjoin respondent judge from further proceeding with
Criminal Case No. 02-23183 until the resolution of the instant petition. The
Court issued a temporary restraining order on February 18, 2004.
[1]

[2]

The background facts: Petitioner was charged with the crime of unfair
competition before the RTC of Antipolo City in an Information that states:
The undersigned Senior State Prosecutor of the Department of Justice hereby accuses
MANOLO P. SAMSON for violation of Sec. 168.3 (a) in relation to Secs. 123.1 (e),
131.3 and 170 of RA 8293 otherwise known as the Intellectual Property Code of the
Philippines, committed as follows:
That on or about the first week of November 1999 and sometime prior or subsequent
thereto, in Cainta, Rizal, Philippines, and within the jurisdiction of this Honorable

Court, above-named accused, owner/proprietor of ITTI Shoes Corporation located at

F.P. Felix Avenue, Cainta, Rizal, did then and there willfully, unlawfully and
feloniously distribute, sell and/or offer for sale CATERPILLAR products such as
footwear, garments, clothing, bags, accessories and paraphernalia which are closely
identical to and/or colorable imitations of the authentic Caterpillar products and
likewise using trademarks, symbols and/or designs as would cause confusion, mistake
or deception on the part of the buying public to the damage and prejudice of
CATERPILLAR, INC., the prior adopter, user and owner of the following
internationally famous marks: CATERPILLAR, CAT, CATERPILLAR, CAT,
CATERPILLAR & DESIGN, CAT AND DESIGN, WALKING MACHINES and
TRACK-TYPE TRACTOR & DESIGN.
CONTRARY TO LAW.

[3]

Petitioner moved to quash the information on the ground that the court has
no jurisdiction over the offense charged in the Information. He argued that
Section 170 of Republic Act (R.A.) No. 8293 provides that the penalty for
violation of Section 168 thereof is imprisonment from two (2) to five (5) years
and a fine ranging from fifty thousand pesos (P50,000.00) to two hundred
thousand pesos (P200,000.00), and R.A. No. 7691 amending Batas
Pambansa (B.P.) Blg. 129 vested the Metropolitan Trial Courts (MTC)
exclusive original jurisdiction over all offenses punishable with imprisonment
not exceeding six (6) years irrespective of the amount of the fine. Presiding
Judge Felix S. Caballes denied the motion for lack of merit in his order dated
January 22, 2003. Petitioner filed a motion for reconsideration which was
likewise denied by Acting Presiding Judge Victoriano B. Cabanos.
[4]

[5]

[6]

[7]

[8]

[9]

Petitioner filed the instant petition for certiorari before this Court on pure
question of law:
Whether or not the respondent Regional Trial Court has jurisdiction over the offenses
charged in the subject information where the penalty therein range from two (2) years
to five (5) years, pursuant to Section 170 of R.A. 8293, in the light of the enactment of
Republic Act No. 7691, amending B.P. Blg. 129, which vests exclusive original
jurisdiction on the Metropolitan Trial Courts over all offenses punishable with
imprisonment not exceeding six (6) years irrespective of the amount of fine, in
relation to Section 163 of R.A. No. 8293.
[10]

Petitioner reiterates his argument before the trial court in support of his
motion to quash. He contends that Section 170 of R.A. No. 8293 provides that
the penalty to be imposed upon any person guilty of violation of Section 168 of
the law is imprisonment from two (2) to five (5) years and a fine ranging from
fifty thousand pesos (P50,000.00) to two hundred thousand pesos
(P200,000.00). Under Section 2 of R.A. No. 7691, amending Section 32 of
B.P. 129, the MTC shall exercise exclusive original jurisdiction over all
offenses punishable with imprisonment not exceeding six (6) years
irrespective of the fine. As petitioner is charged with an offense penalized by
imprisonment not exceeding six (6) years, the jurisdiction to try the case lies
with the MTC and not the RTC. In addition, petitioner submits that the old
Trademark Law, R.A. No. 166, conferring jurisdiction on the Courts of First
Instance (now RTC) over complaints for unfair competition, has been repealed
by Section 239 of R.A. No. 8293. He cites the Courts decision in Mirpuri vs.
Court of Appeals.
[11]

The petition must be dismissed.

It appears that petitioner had already raised the same issue and argument
before this Court in the case of Samson vs. Daway, decided on July 21,
2004. That case involved exactly the same facts and issue as in this case,
except that the information for unfair competition against petitioner was filed
before the RTC of Quezon City. We held in that case:
[12]

The issues posed for resolution are - (1) Which court has jurisdiction over criminal
and civil cases for violation of intellectual property rights? xxx
Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the
criminal penalty for infringement of registered marks, unfair competition, false
designation of origin and false description or representation, is imprisonment from 2
to 5 years and a fine ranging from Fifty Thousand Pesos to Two Hundred Thousand
Pesos, to wit:
SEC. 170. Penalties. - Independent of the civil and administrative sanctions imposed
by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a
fine ranging from Fifty thousand pesos (P50,000.00) to Two hundred thousand pesos
(P200,000.00) shall be imposed on any person who is found guilty of committing any

of the acts mentioned in Section 155 [Infringement], Section 168 [Unfair

Competition] and Section 169.1 [False Designation of Origin and False Description or
Representation].
Corollarily, Section 163 of the same Code states that actions (including criminal and
civil) under Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the
proper courts with appropriate jurisdiction under existing laws, thus SEC. 163. Jurisdiction of Court. - All actions under Sections 150, 155, 164 and 166 to
169 shall be brought before the proper courts with appropriate jurisdiction under
existing laws. (Emphasis supplied)
The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166
(The Trademark Law) which provides that jurisdiction over cases for infringement of
registered marks, unfair competition, false designation of origin and false description
or representation, is lodged with the Court of First Instance (now Regional Trial
Court) SEC. 27. Jurisdiction of Court of First Instance. - All actions under this Chapter [V Infringement] and Chapters VI [Unfair Competition] and VII [False Designatiion of
Origin and False Description or Representation], hereof shall be brought before the
Court of First Instance.
We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed
by R.A. No. 8293. The repealing clause of R.A. No. 8293, reads SEC. 239. Repeals. - 239.1. All Acts and parts of Acts inconsistent herewith, more
particularly Republic Act No. 165, as amended; Republic Act No. 166, as amended;
and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49,
including Presidential Decree No. 285, as amended, are hereby repealed. (Emphasis
added)
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety,
otherwise, it would not have used the phrases parts of Acts and inconsistent herewith;
and it would have simply stated Republic Act No. 165, as amended; Republic Act No.
166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential
Decree No. 49, including Presidential Decree No. 285, as amended are hereby
repealed. It would have removed all doubts that said specific laws had been rendered

without force and effect. The use of the phrases parts of Acts and inconsistent
herewith only means that the repeal pertains only to provisions which are repugnant or
not susceptible of harmonization with R.A. No. 8293. Section 27 of R.A. No. 166,
however, is consistent and in harmony with Section 163 of R.A. No. 8293. Had R.A.
No. 8293 intended to vest jurisdiction over violations of intellectual property rights
with the Metropolitan Trial Courts, it would have expressly stated so under Section
163 thereof.
Moreover, the settled rule in statutory construction is that in case of conflict between a
general law and a special law, the latter must prevail. Jurisdiction conferred by a
special law to Regional Trial Courts must prevail over that granted by a general law to
Municipal Trial Courts.
In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws conferring
jurisdiction over violations of intellectual property rights to the Regional Trial Court.
They should therefore prevail over R.A. No. 7691, which is a general law. Hence,
jurisdiction over the instant criminal case for unfair competition is properly lodged
with the Regional Trial Court even if the penalty therefor is imprisonment of less than
6 years, or from 2 to 5 years and a fine ranging from P50,000.00 to P200,000.00.
In fact, to implement and ensure the speedy disposition of cases involving violations
of intellectual property rights under R.A. No. 8293, the Court issued A.M. No. 02-111-SC dated February 19, 2002 designating certain Regional Trial Courts as
Intellectual Property Courts. On June 17, 2003, the Court further issued a Resolution
consolidating jurisdiction to hear and decide Intellectual Property Code and Securities
and Exchange Commission cases in specific Regional Trial Courts designated as
Special Commercial Courts.
The case of Mirpuri v. Court of Appeals, invoked by petitioner finds no application in
the present case. Nowhere in Mirpuri did we state that Section 27 of R.A. No. 166 was
repealed by R.A. No. 8293. Neither did we make a categorical ruling therein that
jurisdiction over cases for violation of intellectual property rights is lodged with the
Municipal Trial Courts. The passing remark in Mirpuri on the repeal of R.A. No. 166
by R.A. No. 8293 was merely a backgrounder to the enactment of the present
Intellectual Property Code and cannot thus be construed as a jurisdictional
pronouncement in cases for violation of intellectual property rights.

The foregoing ruling is the law of the case and thus lays to rest the issue
posed by petitioner. We see no reason in this case to deviate therefrom. It is a
basic legal principle that whatever is once irrevocably established as the
controlling legal rule or decision between the same parties in the case
continues to be the law of the case, whether correct on general principles or
not, so long as the facts on which such decision was predicated continue to
be the facts of the case before the court.
[13]

IN VIEW WHEREOF, the petition is DISMISSED. The temporary

restraining order issued by this Court on February 18, 2004 is hereby LIFTED.

2. Del Monte Corp. vs CA GR # L-78325 Jan. 25, 1990

The petitioners are questioning the decision of the respondent court upholding the dismissal by the
trial court of their complaint against the private respondent for infringement of trademark and unfair
competition.
Petitioner Del Monte Corporation is a foreign company organized under the laws of the United
States and not engaged in business in the Philippines. Both the Philippines and the United States
are signatories to the Convention of Paris of September 27, 1965, which grants to the nationals of
the parties rights and advantages which their own nationals enjoy for the repression of acts of
infringement and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized under
the laws of the Philippines. On April 11, 1969, 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.
On October 27,1965, 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. 1 On November 20,
1972, Del Monte also obtained two registration certificates for its trademark "DEL MONTE" and its logo. 2
Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration by
the Bureau of Domestic Trade on April 17,1980, to engage in the manufacture, packing, distribution
and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. 3 This logo was
registered in the Supplemental Register on September 20, 1983. 4 The product itself was contained in
various kinds of bottles, including the Del Monte bottle, which the private respondent bought from the junk
shops for recycling.
Having received reports that the private respondent was using its exclusively designed bottles and a
logo confusingly similar to Del Monte's, Philpack warned it to desist from doing so on pain of legal

action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte filed a
complaint against the private respondent for infringement of trademark and unfair competition, with a
prayer for damages and the issuance of a writ of preliminary injunction. 5
In its answer, Sunshine alleged that it had long 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. 6
After trial, the Regional Trial Court of Makati 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 in any case the defendant became the owner of the
said bottles upon its purchase thereof from the junk yards. Furthermore, the complainants had failed
to establish the defendant's malice or bad faith, which was an essential element of infringement of
trademark or unfair competition. 7
This decision was affirmed in toto by the respondent court, which is now faulted in this petition
for certiorari under Rule 45 of the Rules of Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law, provides in part as follows:
Sec. 22. Infringement, what constitutes. Any person who 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
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 upon
or 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.
Sec. 29 of the same law states as follows:
Sec. 29. Unfair competition, rights and remedies. A person who has identified in
the mind of the public the goods he manufactures or deals in, his business or
services from those of others, whether or not a mark or tradename is employed, has
a property right in the goodwill of the said goods, business or services so identified,
which will be protected in the same manner as other property rights. Such a person
shall have the remedies provided in section twenty- three, Chapter V hereof.
Any person who shall employ deception or any other means contrary to good faith by
which he 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 such goodwill, or who
shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.

In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either as to
the goods themselves or in the wrapping of the packages in which
they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would likely influence purchasers
to believe that the goods offered are those of a manufacturer or
dealer other than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the public
and defraud another of his legitimate trade, or any subsequent
vendor of such goods or any agent of any vendor engaged in selling
such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs ally
other means calculated to induce the false belief that such person is
offering the services of another who has identified such services in
the mind of the public; or
(c) Any person who shall make any false statement in the course of
trade or who shall commit any other act contrary to good faith of a
nature calculated to discredit the goods, business or services of
another.
To arrive at a proper resolution of this case, it is important to bear in mind the following distinctions
between infringement of trademark and unfair competition.
(1) Infringement of trademark is the unauthorized use of a trademark,
whereas unfair competition is the passing off of one's goods as those
of another.
(2) In infringement of trademark fraudulent intent is unnecessary
whereas in unfair competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark
is a prerequisite to the action, whereas in unfair competition
registration is not necessary. 8
In the challenged decision, the respondent court cited the following test laid down by this Court in a
number of cases:
In determining whether two trademarks are confusingly similar, the two marks in their
entirety as they appear in the respective labels must be considered in relation to the
goods to which they are attached; the discerning eye of the observer must focus not

only on the predorninant words but also on the other features appearing on both
labels. 9
and applying the same, held that there was no colorable imitation of the petitioners' trademark and
logo by the private respondent. The respondent court agreed with the findings of the trial court that:
In order to resolve the said issue, the Court now attempts to make a
comparison of the two products, to wit:
1. As to the shape of label or make:
Del Monte: Semi-rectangular with a crown or tomato shape design on
top of the rectangle.
Sunshine: Regular rectangle.
2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or mark:
Del Monte: Clearly indicated words packed by Sysu International,
Inc., Q.C., Philippines.
Sunshine: Sunshine fruit catsup is clearly indicated "made in the
Philippines by Sunshine Sauce Manufacturing Industries" No. 1 Del
Monte Avenue, Malabon, Metro Manila.
4. As to color of logo:
Del Monte: Combination of yellow and dark red, with words "Del
Monte Quality" in white.
Sunshine: White, light green and light red, with words "Sunshine
Brand" in yellow.
5. As to shape of logo:
Del Monte: In the shape of a tomato.
Sunshine: Entirely different in shape.
6. As to label below the cap:

Del Monte: Seal covering the cap down to the neck of the bottle, with
picture of tomatoes with words "made from real tomatoes."
Sunshine: There is a label below the cap which says "Sunshine
Brand."
7. As to the color of the products:
Del Monte: Darker red.
Sunshine: Lighter than Del Monte.
While the Court does recognize these distinctions, it does not agree with the conclusion that there
was no infringement or unfair competition. It seems to us that the lower courts have been so preoccupied with the details that they have not seen the total picture.
It has been correctly held that side-by-side comparison is not the final test of similarity. 10 Such
comparison requires a careful scrutiny to determine in what points the labels of the products differ, as was
done by the trial judge. The ordinary buyer does not usually make such scrutiny nor does he usually have
the time to do so. The average shopper is usually in a hurry and does not inspect every product on the
shelf as if he were browsing in a library. Where the housewife has to return home as soon as possible to
her baby or the working woman has to make quick purchases during her off hours, she is apt to be
confused by similar labels even if they do have minute differences. The male shopper is worse as he
usually does not bother about such distinctions.
The question is not whether the two articles are distinguishable by their label when set side by side
but 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. 11 As
observed in several cases, 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. 12
It has been held that in making purchases, the consumer must depend upon his recollection of the
appearance of the product which he intends to purchase. 13 The buyer having in mind the mark/label of
the respondent must rely upon his memory of the petitioner's mark. 14 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.
A number of courts have held that 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. 15 The court therefore should be guided by its first
impression, 16 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. 17
It has also been held that it is not the function of the court in cases of infringement and unfair
competition to educate purchasers but rather to take their carelessness for granted, and to be ever
conscious of the fact that marks need not be identical. A confusing similarity will justify the

intervention of equity. 18 The judge must also be aware of the fact that usually a defendant in cases of
infringement does not normally copy but makes only colorable changes. 19 Well has it been said that 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. 20
We also note that the respondent court failed to take into consideration several 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 . 21Among these, what essentially determines the attitude
of the purchaser, specifically his inclination to be cautious, is the cost of the goods. To be sure, a person
who buys a box of candies will not exercise as much care as one who buys an expensive watch. As a
general rule, 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. 22 Expensive and valuable items are
normally bought only after deliberate, comparative and analytical investigation. But 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. 23 In this latter category is catsup.
At that, even if the labels were analyzed together it is not difficult to see that 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.
As previously stated, the person who infringes a trade mark does not normally copy out but only
makes colorable changes, employing enough points of similarity to confuse the public with enough
points of differences to confuse the courts. What is undeniable is the fact that when a manufacturer
prepares to package his product, he has before him a boundless choice of words, phrases, colors
and symbols sufficient to distinguish his product from the others. When as in this case, 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 . 24
It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule that as between
a newcomer who by the confusion has nothing to lose and everything to gain and one who by honest
dealing has already achieved favor with the public, any doubt should be resolved against the
newcomer inasmuch as the field from which he can select a desirable trademark to indicate the
origin of his product is obviously a large one. 25
Coming now to the second issue, we find that the private respondent is not guilty of infringement for
having used the Del Monte bottle. The reason is that the configuration of the said bottle was merely
registered in the Supplemental Register. In the case of Lorenzana v. Macagba, 26 we declared that:
(1) Registration in the Principal Register gives rise to a presumption
of the validity of the registration, the registrant's ownership of the
mark and his right to the exclusive use thereof. There is no such
presumption in the registration in the Supplemental Register.

(2) Registration in the Principal Register is limited to the actual owner

of the trademark and proceedings therein on the issue of ownership
which may be contested through opposition or interference
proceedings or, after registration, in a petition for cancellation.
Registration in the Principal Register is constructive notice of the
registrant's claim of ownership, while registration in the Supplemental
Register is merely proof of actual use of the trademark and notice
that the registrant has used or appropriated it. It is not subject to
opposition although it may be cancelled after the issuance.
Corollarily, registration in the Principal Register is a basis for an
action for infringement while registration in the Supplemental Register
is not.
(3) In applications for registration in the Principal Register, publication
of the application is necessary. This is not so in applications for
registrations in the Supplemental Register.
It can be inferred from the foregoing that although Del Monte has actual use of the bottle's
configuration, the petitioners 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 latter's
reputation and goodwill and pass off its own product as that of Del Monte.
The Court observes that the reasons given by the respondent court in resolving the case in favor of
Sunshine are untenable. First, it declared that the registration of the Sunshine label belied the
company's malicious intent to imitate petitioner's product. Second, it held that the Sunshine label
was not improper because the Bureau of Patent presumably considered other trademarks before
approving it. Third, it cited the case of Shell Co. v. Insular Petroleum, 27 where this Court declared that
selling oil in containers of another with markings erased, without intent to deceive, was not unfair
competition.
Regarding the fact of registration, 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.
Anent the assumption that the Bureau of Patent had considered other existing patents, it is reiterated
that 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.
On the argument that no unfair competition was committed, the Shell Case is not on all fours with
the case at bar because:

(1) In Shell, the absence of intent to deceive was supported by the fact that the
respondent therein, before marketing its product, totally obliterated and erased the
brands/mark of the different companies stenciled on the containers thereof, except
for a single isolated transaction. The respondent in the present case made no similar
effort.
(2) In Shell, what was involved was a single isolated transaction. Of the many drums
used, there was only one container where the Shell label was not erased, while in the
case at hand, the respondent admitted that it made use of several Del Monte bottles
and without obliterating the embossed warning.
(3) In Shell, the product of respondent was sold to dealers, not to ultimate
consumers. As a general rule, dealers are well acquainted with the manufacturer
from whom they make their purchases and since they are more experienced, they
cannot be so easily deceived like the inexperienced public. There may well be
similarities and imitations which deceive all, but generally the interests of the dealers
are not regarded with the same solicitude as are the interests of the ordinary
consumer. For it is the form in which the wares come to the final buyer that is of
significance. 28
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.
The court must rule, however, that the damage prayed for cannot be granted because the petitioner
has not presented evidence to prove the amount thereof. Section 23 of R.A. No. 166 provides:
Sec. 23. Actions and damages and injunction for infringement. Any person entitled
to the exclusive use of a registered mark or trade name may recover damages in a
civil action from any person who infringes his rights, and the measure of the
damages suffered shall be either the reasonable profit which the complaining party
would have made, had the defendant not infringed his said rights or the profit which
the defendant actually made out of the infringement, or in the event such measure of
damages cannot be readily ascertained with reasonable certainty the court may
award as damages reasonable percentage based upon the amount of gross sales of
the defendant or the value of the services in connection with which the mark or trade
name was used in the infringement of the rights of the complaining party. In cases
where actual intent to mislead the public or to defraud the complaining party shall be
shown, in the discretion of the court, the damages may be doubled.
The complaining party, upon proper showing may also be granted injunction.
Fortunately for the petitioners, they may still find some small comfort in Art. 2222 of the Civil Code,
which provides:

Art. 2222. The court may award nominal damages in every obligation arising from
any source enumerated in Art. 1157, or in every case where any property right has
been invaded.
Accordingly, the Court can only award to the petitioners, as it hereby does award, nominal damages
in the amount of Pl,000.00.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated December 24,
1986 and the Resolution dated April 27,1987, are REVERSED and SET ASIDE and a new judgment
is hereby rendered:
(1) Canceling the private respondent's Certificate of Register No. SR-6310 and
permanently enjoining the private respondent from using a label similar to that of the
petitioners.
(2) Prohibiting the private respondent from using the empty bottles of the petitioners
as containers for its own products.
(3) Ordering the private respondent to pay the petitioners nominal damages in the
amount of Pl,000.00, and the costs of the suit.
SO ORDERED.
Narvasa Gancayco, Grio-Aquino and Medialdea

3. Victorio Diaz vs Levi Strauss (Phils) GR # 180677 Feb. 18, 2013

It is the tendency of the allegedly infringing mark to be confused with the registered trademark that is
the gravamen of the offense of infringement of a registered trademark. The acquittal of the accused
should follow if the allegedly infringing mark is not likely to cause confusion. Thereby, the evidence of
the State does not satisfy the quantum of proof beyond reasonable doubt.
Accused Victorio P. Diaz (Diaz) appeals the resolutions promulgated on July 17, 2007 1 and
November 22, 2007,2whereby the Court of Appeals (CA), respectively, dismissed his appeal in C.A.G.R. CR No. 30133 for the belated filing of the appellant's brief, and denied his motion for
reconsideration. Thereby, the decision rendered on February 13, 2006 in Criminal Case No. 00-0318
and Criminal Case No. 00-0319 by the Regional Trial Court, Branch 255, in Las Pifias City (RTC)
convicting him for two counts of infringement of trademark were affirmed. 3
Antecedents

On February 10, 2000, the Department of Justice filed two informations in the RTC of Las Pias City,
charging Diaz with violation of Section 155, in relation to Section 170, of Republic Act No. 8293, also
known as the Intellectual Property Code of the Philippines (Intellectual Property Code), to wit:
Criminal Case No. 00-0318
That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within the
jurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to defraud Levis
Strauss (Phil.) Inc. (hereinafter referred to as LEVIS), did then and there, willfully, unlawfully,
feloniously, knowingly and intentionally engaged in commerce by reproducing, counterfeiting,
copying and colorably imitating Levis registered trademarks or dominant features thereof such as
the ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE LABEL WITH
PATTERNED ARCUATE DESIGN, TAB AND COMPOSITE ARCUATE/TAB/TWO HORSE PATCH,
and in connection thereto, sold, offered for sale, manufactured, distributed counterfeit patches and
jeans, including other preparatory steps necessary to carry out the sale of said patches and jeans,
which likely caused confusion, mistake, and /or deceived the general consuming public, without the
consent, permit or authority of the registered owner, LEVIS, thus depriving and defrauding the latter
of its right to the exclusive use of its trademarks and legitimate trade, to the damage and prejudice of
LEVIS.
CONTRARY TO LAW.4
Criminal Case No. 00-0319
That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within the
jurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to defraud Levis
Strauss (Phil.) Inc. (hereinafter referred to as LEVIS), did then and there, willfully, unlawfully,
feloniously, knowingly and intentionally engaged in commerce by reproducing, counterfeiting,
copying and colorably imitating Levis registered trademarks or dominant features thereof such as
the ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE LABEL WITH
PATTERNED ARCUATE DESIGN, TAB AND COMPOSITE ARCUATE/TAB/TWO HORSE PATCH,
and in connection thereto, sold, offered for sale, manufactured, distributed counterfeit patches and
jeans, including other preparatory steps necessary to carry out the sale of said patches and jeans,
which likely caused confusion, mistake, and /or deceived the general consuming public, without the
consent, permit or authority of the registered owner, LEVIS, thus depriving and defrauding the latter
of its right to the exclusive use of its trademarks and legitimate trade, to the damage and prejudice of
LEVIS.
CONTRARY TO LAW.5
The cases were consolidated for a joint trial. Diaz entered his pleas of not guilty to each information
on June 21, 2000.6
1.
Evidence of the Prosecution

Levi Strauss and Company (Levis), a foreign corporation based in the State of Delaware, United
States of America, had been engaged in the apparel business. It is the owner of trademarks and
designs of Levis jeans like LEVIS 501, the arcuate design, the two-horse brand, the two-horse
patch, the two-horse patch with pattern arcuate, and the composite tab arcuate. LEVIS 501 has the
following registered trademarks, to wit: (1) the leather patch showing two horses pulling a pair of
pants; (2) the arcuate pattern with the inscription "LEVI STRAUSS & CO;" (3) the arcuate design that
refers to "the two parallel stitching curving downward that are being sewn on both back pockets of a
Levis Jeans;" and (4) the tab or piece of cloth located on the structural seam of the right back
pocket, upper left side. All these trademarks were registered in the Philippine Patent Office in the
1970s, 1980s and early part of 1990s.7
Levi Strauss Philippines, Inc. (Levis Philippines) is a licensee of Levis. After receiving information
that Diaz was selling counterfeit LEVIS 501 jeans in his tailoring shops in Almanza and Talon, Las
Pias City, Levis Philippines hired a private investigation group to verify the information.
Surveillance and the purchase of jeans from the tailoring shops of Diaz established that the jeans
bought from the tailoring shops of Diaz were counterfeit or imitations of LEVIS 501. Levis
Philippines then sought the assistance of the National Bureau of Investigation (NBI) for purposes of
applying for a search warrant against Diaz to be served at his tailoring shops. The search warrants
were issued in due course. Armed with the search warrants, NBI agents searched the tailoring shops
of Diaz and seized several fake LEVIS 501 jeans from them. Levis Philippines claimed that it did not
authorize the making and selling of the seized jeans; that each of the jeans were mere imitations of
genuine LEVIS 501 jeans by each of them bearing the registered trademarks, like the arcuate
design, the tab, and the leather patch; and that the seized jeans could be mistaken for original
LEVIS 501 jeans due to the placement of the arcuate, tab, and two-horse leather patch. 8
2.
Evidence of the Defense
On his part, Diaz admitted being the owner of the shops searched, but he denied any criminal
liability.
Diaz stated that he did not manufacture Levis jeans, and that he used the label "LS Jeans Tailoring"
in the jeans that he made and sold; that the label "LS Jeans Tailoring" was registered with the
Intellectual Property Office; that his shops received clothes for sewing or repair; that his shops
offered made-to-order jeans, whose styles or designs were done in accordance with instructions of
the customers; that since the time his shops began operating in 1992, he had received no notice or
warning regarding his operations; that the jeans he produced were easily recognizable because the
label "LS Jeans Tailoring," and the names of the customers were placed inside the pockets, and
each of the jeans had an "LSJT" red tab; that "LS" stood for "Latest Style;" and that the leather patch
on his jeans had two buffaloes, not two horses.9
Ruling of the RTC
On February 13, 2006, the RTC rendered its decision finding Diaz guilty as charged, disposing thus:

WHEREFORE, premises considered, the Court finds accused Victorio P. Diaz, a.k.a. Vic Diaz,
GUILTY beyond reasonable doubt of twice violating Sec. 155, in relation to Sec. 170, of RA No.
8293, as alleged in the Informations in Criminal Case Nos. 00-0318 & 00-0319, respectively, and
hereby sentences him to suffer in each of the cases the penalty of imprisonment of TWO (2) YEARS
of prision correcional, as minimum, up to FIVE (5) YEARS of prision correcional, as maximum, as
well as pay a fine of P50,000.00 for each of the herein cases, with subsidiary imprisonment in case
of insolvency, and to suffer the accessory penalties provided for by law.
Also, accused Diaz is hereby ordered to pay to the private complainant Levis Strauss (Phils.), Inc.
the following, thus:
1. P50,000.00 in exemplary damages; and
2. P222,000.00 as and by way of attorneys fees.
Costs de officio.
SO ORDERED.10
Ruling of the CA
Diaz appealed, but the CA dismissed the appeal on July 17, 2007 on the ground that Diaz had not
filed his appellants brief on time despite being granted his requested several extension periods.
Upon denial of his motion for reconsideration, Diaz is now before the Court to plead for his acquittal.
Issue
Diaz submits that:
THE COURT OF APPEALS VIOLATED EXISTING LAW AND JURISPRUDENCE WHEN IT
APPLIED RIGIDLY THE RULE ON TECHNICALITIES AND OVERRIDE SUBSTANTIAL JUSTICE
BY DISMISSING THE APPEAL OF THE PETITIONER FOR LATE FILING OF APPELLANTS
BRIEF.11
Ruling
The Court first resolves whether the CA properly dismissed the appeal of Diaz due to the late filing of
his appellants brief.
Under Section 7, Rule 44 of the Rules of Court, the appellant is required to file the appellants brief in
the CA "within forty-five (45) days from receipt of the notice of the clerk that all the evidence, oral and
documentary, are attached to the record, seven (7) copies of his legibly typewritten, mimeographed
or printed brief, with proof of service of two (2) copies thereof upon the appellee." Section 1(e) of
Rule 50 of the Rules of Court grants to the CA the discretion to dismiss an appeal either motu

proprio or on motion of the appellee should the appellant fail to serve and file the required number of
copies of the appellants brief within the time provided by the Rules of Court.12
The usage of the word may in Section 1(e) of Rule 50 indicates that the dismissal of the appeal upon
failure to file the appellants brief is not mandatory, but discretionary. Verily, the failure to serve and
file the required number of copies of the appellants brief within the time provided by the Rules of
Court does not have the immediate effect of causing the outright dismissal of the appeal. This means
that the discretion to dismiss the appeal on that basis is lodged in the CA, by virtue of which the CA
may still allow the appeal to proceed despite the late filing of the appellants brief, when the
circumstances so warrant its liberality. In deciding to dismiss the appeal, then, the CA is bound to
exercise its sound discretion upon taking all the pertinent circumstances into due consideration.
The records reveal that Diazs counsel thrice sought an extension of the period to file the appellants
brief. The first time was on March 12, 2007, the request being for an extension of 30 days to
commence on March 11, 2007. The CA granted his motion under its resolution of March 21, 2007.
On April 10, 2007, the last day of the 30-day extension, the counsel filed another motion, seeking an
additional 15 days. The CA allowed the counsel until April 25, 2007 to serve and file the appellants
brief. On April 25, 2007, the counsel went a third time to the CA with another request for 15 days.
The CA still granted such third motion for extension, giving the counsel until May 10, 2007.
Notwithstanding the liberality of the CA, the counsel did not literally comply, filing the appellants brief
only on May 28, 2007, which was the 18th day beyond the third extension period granted.
Under the circumstances, the failure to file the appellants brief on time rightly deserved the outright
rejection of the appeal. The acts of his counsel bound Diaz like any other client. It was, of course,
only the counsel who was well aware that the Rules of Court fixed the periods to file pleadings and
equally significant papers like the appellants brief with the lofty objective of avoiding delays in the
administration of justice.
Yet, we have before us an appeal in two criminal cases in which the appellant lost his chance to be
heard by the CA on appeal because of the failure of his counsel to serve and file the appellants brief
on time despite the grant of several extensions the counsel requested. Diaz was convicted and
sentenced to suffer two indeterminate sentences that would require him to spend time in detention
for each conviction lasting two years, as minimum, to five years, as maximum, and to pay fines
totaling P100,000.00 (with subsidiary imprisonment in case of his insolvency). His personal liberty is
now no less at stake. This reality impels us to look beyond the technicality and delve into the merits
of the case to see for ourselves if the appeal, had it not been dismissed, would have been worth the
time of the CA to pass upon. After all, his appellants brief had been meanwhile submitted to the CA.
While delving into the merits of the case, we have uncovered a weakness in the evidence of guilt
that cannot be simply ignored and glossed over if we were to be true to our oaths to do justice to
everyone.
We feel that despite the CA being probably right in dismissing the excuses of oversight and
excusable negligence tendered by Diazs counsel to justify the belated filing of the appellants brief
as unworthy of serious consideration, Diaz should not be made to suffer the dire consequence. Any
accused in his shoes, with his personal liberty as well as his personal fortune at stake, expectedly
but innocently put his fullest trust in his counsels abilities and professionalism in the handling of his

appeal. He thereby delivered his fate to the hands of his counsel. Whether or not those hands were
efficient or trained enough for the job of handling the appeal was a learning that he would get only in
the end. Likelier than not, he was probably even unaware of the three times that his counsel had
requested the CA for extensions. If he were now to be left to his unwanted fate, he would surely
suffer despite his innocence. How costly a learning it would be for him! That is where the Court
comes in. It is most important for us as dispensers of justice not to allow the inadvertence or
incompetence of any counsel to result in the outright deprivation of an appellants right to life, liberty
or property.13
We do not mind if this softening of judicial attitudes be mislabeled as excessive leniency. With so
much on the line, the people whose futures hang in a balance should not be left to suffer from the
incompetence, mindlessness or lack of professionalism of any member of the Law Profession. They
reasonably expect a just result in every litigation. The courts must give them that just result. That
assurance is the peoples birthright. Thus, we have to undo Diazs dire fate.
Even as we now set aside the CAs rejection of the appeal of Diaz, we will not remand the records to
the CA for its review. In an appeal of criminal convictions, the records are laid open for review. To
avoid further delays, therefore, we take it upon ourselves to review the records and resolve the issue
of guilt, considering that the records are already before us.
Section 155 of R.A. No. 8293 defines the acts that constitute infringement of trademark, viz:
Remedies; Infringement. Any person who shall, without the consent of the owner of the registered
mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall
be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of whether there is actual sale of goods or
services using the infringing material.
The elements of the offense of trademark infringement under the Intellectual Property Code are,
therefore, the following:
1. The trademark being infringed is registered in the Intellectual Property Office;

2. The trademark is reproduced, counterfeited, copied, or colorably imitated by the infringer;

3. The infringing mark is used in connection with the sale, offering for sale, or advertising of
any goods, business or services; or the infringing mark 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;
4. The use or application of the infringing mark 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
5. The use or application of the infringing mark is without the consent of the trademark owner
or the assignee thereof.14
As can be seen, the likelihood of confusion is the gravamen of the offense of trademark
infringement.15 There are two tests to determine likelihood of confusion, namely: the dominancy test,
and the holistic test. The contrasting concept of these tests was explained in Societes Des Produits
Nestle, S.A. v. Dy, Jr., thus:
x x x. The dominancy test focuses on the similarity of the main, prevalent or essential features of the
competing trademarks that might cause confusion. Infringement takes place when the competing
trademark contains the essential features of another. Imitation or an effort to imitate is unnecessary.
The question is whether the use of the marks is likely to cause confusion or deceive purchasers.
The holistic test considers the entirety of the marks, including labels and packaging, in determining
confusing similarity. The focus is not only on the predominant words but also on the other features
appearing on the labels.16
As to what test should be applied in a trademark infringement case, we said in McDonalds
Corporation v. Macjoy Fastfood Corporation17 that:
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to
another, no set rules can be deduced because each case must be decided on its merits. In such
cases, even more than in any other litigation, precedent must be studied in the light of the facts of
the particular case. That is the reason why in trademark cases, jurisprudential precedents should be
applied only to a case if they are specifically in point.
The case of Emerald Garment Manufacturing Corporation v. Court of Appeals,18 which involved an
alleged trademark infringement of jeans products, is worth referring to. There, H.D. Lee Co., Inc.
(H.D. Lee), a corporation based in the United States of America, claimed that Emerald Garments
trademark of "STYLISTIC MR. LEE" that it used on its jeans products was confusingly similar to the
"LEE" trademark that H.D. Lee used on its own jeans products. Applying the holistic test, the Court
ruled that there was no infringement.
The holistic test is applicable here considering that the herein criminal cases also involved trademark
infringement in relation to jeans products. Accordingly, the jeans trademarks of Levis Philippines and

Diaz must be considered as a whole in determining the likelihood of confusion between them.
The maong pants or jeans made and sold by Levis Philippines, which included LEVIS 501, were
very popular in the Philippines. The consuming public knew that the original LEVIS 501 jeans were
under a foreign brand and quite expensive. Such jeans could be purchased only in malls or
boutiques as ready-to-wear items, and were not available in tailoring shops like those of Diazs as
well as not acquired on a "made-to-order" basis. Under the circumstances, the consuming public
could easily discern if the jeans were original or fake LEVIS 501, or were manufactured by other
brands of jeans. Confusion and deception were remote, for, as the Court has observed in Emerald
Garments:
First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not
your ordinary household items like catsup, soy sauce or soap which are of minimal cost. Maong
pants or jeans 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. In Del Monte Corporation v. Court of Appeals, we noted that:
.... Among these, what essentially determines the attitudes of the purchaser, specifically his
inclination to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies
will not exercise as much care as one who buys an expensive watch. As a general rule, 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. Expensive and valuable items are normally bought
only after deliberate, comparative and analytical investigation. But 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....
Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does not
ask the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even an Armani. He is,
therefore, more or less knowledgeable and familiar with his preference and will not easily be
distracted.
Finally, in line with the foregoing discussions, more credit should be given to the "ordinary
purchaser." Cast in this particular controversy, the ordinary purchaser is not the "completely unwary
consumer" but is the "ordinarily intelligent buyer" considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok is better suited to the present case. There, 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. The test is not found in the
deception, or the possibility of deception, of the person who knows nothing about the design which
has been counterfeited, and who must be indifferent between that and the other. The simulation, in
order to be objectionable, must be such as appears likely to mislead the ordinary intelligent buyer
who has a need to supply and is familiar with the article that he seeks to purchase. 19
Diaz used the trademark "LS JEANS TAILORING" for the jeans he produced and sold in his tailoring
shops. His trademark was visually and aurally different from the trademark "LEVI STRAUSS & CO"

appearing on the patch of original jeans under the trademark LEVIS 501. The word "LS" could not
be confused as a derivative from "LEVI STRAUSS" by virtue of the "LS" being connected to the word
"TAILORING", thereby openly suggesting that the jeans bearing the trademark "LS JEANS
TAILORING" came or were bought from the tailoring shops of Diaz, not from the malls or boutiques
selling original LEVIS 501 jeans to the consuming public.
There were other remarkable differences between the two trademarks that the consuming public
would easily perceive. Diaz aptly noted such differences, as follows:
The prosecution also alleged that the accused copied the "two horse design" of the petitionerprivate complainant but the evidence will show that there was no such design in the seized jeans.
Instead, what is shown is "buffalo design." Again, a horse and a buffalo are two different animals
which an ordinary customer can easily distinguish. x x x.
The prosecution further alleged that the red tab was copied by the accused. However, evidence will
show that the red tab used by the private complainant indicates the word "LEVIS" while that of the
accused indicates the letters "LSJT" which means LS JEANS TAILORING. Again, even an ordinary
customer can distinguish the word LEVIS from the letters LSJT.
xxxx
In terms of classes of customers and channels of trade, the jeans products of the private
complainant and the accused cater to different classes of customers and flow through the different
channels of trade. The customers of the private complainant are mall goers belonging to class A and
B market group while that of the accused are those who belong to class D and E market who can
only afford Php 300 for a pair of made-toorder pants.20 x x x.
Moreover, based on the certificate issued by the Intellectual Property Office, "LS JEANS
TAILORING" was a registered trademark of Diaz. He had registered his trademark prior to the filing
of the present cases.21 The Intellectual Property Office would certainly not have allowed the
registration had Diazs trademark been confusingly similar with the registered trademark for LEVIS
501 jeans.
Given the foregoing, it should be plain that there was no likelihood of confusion between the
trademarks involved. Thereby, the evidence of guilt did not satisfy the quantum of proof required for
a criminal conviction, which is proof beyond reasonable doubt. According to Section 2, Rule 133 of
the Rules of Court, proof beyond a reasonable doubt does not mean such a degree of proof as,
excluding possibility of error, produces absolute certainty. Moral certainty only is required, or that
degree of proof which produces conviction in an unprejudiced mind. Consequently, Diaz should be
acquitted of the charges.
WHEREFORE, the Court ACQUITS petitioner VICTORIO P. DIAZ of the crimes of infringement of
trademark charged in Criminal Case No. 00-0318 and Criminal Case No. 00-0319 for failure of the
State to establish his guilt by proof beyond reasonable doubt.
No pronouncement on costs of suit.

SO ORDERED.

4. Skechers, USA, Inc. vs Inter Pacific Industrial Trading Corp., et al. GR # 164321
March 23, 2011

For resolution are the twin Motions for Reconsideration[1] filed by petitioner and
petitioner-intervenor from the Decision rendered in favor of respondents,
dated November 30, 2006.
At the outset, a brief narration of the factual and procedural antecedents that
transpired and led to the filing of the motions is in order.
The present controversy arose when petitioner filed with Branch 24 of the
Regional Trial Court (RTC) of Manila an application for the issuance of search
warrants against an outlet and warehouse operated by respondents for infringement
of trademark under Section 155, in relation to Section 170 of Republic Act No.
8293, otherwise known as the Intellectual Property Code of the Philippines.[2] In
the course of its business, petitioner has registered the trademark
SKECHERS[3] and the trademark S (within an oval design) [4] with the Intellectual
Property Office (IPO).
Two search warrants[5] were issued by the RTC and were served on the premises of
respondents. As a result of the raid, more than 6,000 pairs of shoes bearing the S
logo were seized.
Later, respondents moved to quash the search warrants, arguing that there was no
confusing similarity between petitioners Skechers rubber shoes and its Strong
rubber shoes.
On November 7, 2002, the RTC issued an Order [6] quashing the search warrants
and directing the NBI to return the seized goods. The RTC agreed with respondents
view that Skechers rubber shoes and Strong rubber shoes have glaring differences
such that an ordinary prudent purchaser would not likely be misled or confused in
purchasing the wrong article.
Aggrieved, petitioner filed a petition for certiorari[7] with the Court of Appeals
(CA) assailing the RTC Order. On November 17, 2003, the CA issued a
Decision[8] affirming the ruling of the RTC.

Subsequently, petitioner filed the present petition[9] before this Court which puts
forth the following assignment of errors:
A. WHETHER THE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION IN CONSIDERING MATTERS OF
DEFENSE IN A CRIMINAL TRIAL FOR TRADEMARK
INFRINGEMENT IN PASSING UPON THE VALIDITY OF THE
SEARCH WARRANT WHEN IT SHOULD HAVE LIMITED
ITSELF TO A DETERMINATION OF WHETHER THE TRIAL
COURT COMMITTED GRAVE ABUSE OF DISCRETION IN
QUASHING THE SEARCH WARRANTS.
B. WHETHER THE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION IN FINDING THAT RESPONDENTS
ARE NOT GUILTY OF TRADEMARK INFRINGEMENT IN THE
CASE WHERE THE SOLE TRIABLE ISSUE IS THE EXISTENCE
OF PROBABLE CAUSE TO ISSUE A SEARCH WARRANT.[10]
In the meantime, petitioner-intervenor filed a Petition-in-Intervention [11] with
this Court claiming to be the sole licensed distributor of Skechers products here in
the Philippines.

On November 30, 2006, this Court rendered a Decision [12] dismissing the
petition.
Both petitioner and petitioner-intervenor filed separate motions for
reconsideration.
In petitioners motion for reconsideration, petitioner moved for a
reconsideration of the earlier decision on the following grounds:
(a)

THIS HONORABLE COURT MUST RE-EXAMINE THE FACTS

OF THIS CASE DUE TO THE SIGNIFICANCE AND
REPERCUSSIONS OF ITS DECISION.
(b) COMMERCIAL QUANTITIES OF THE SEIZED ITEMS WITH
THE UNAUTHORIZED REPRODUCTIONS OF THE S
TRADEMARK OWNED BY PETITIONER WERE INTENDED
FOR DISTRIBUTION IN THE PHILIPPINE MARKET TO THE
DETRIMENT OF PETITIONER RETURNING THE GOODS TO

(c)
(d)
(e)

(f)
(g)

RESPONDENTS WILL ADVERSELY AFFECT THE GOODWILL

AND REPUTATION OF PETITIONER.
THE SEARCH WARRANT COURT AND THE COURT OF
APPEALS BOTH ACTED WITH GRAVE ABUSE OF
DISCRETION.
THE SEARCH WARRANT COURT DID NOT PROPERLY REEVALUATE THE EVIDENCE PRESENTED DURING THE
SEARCH WARRANT APPLICATION PROCEEDINGS.
THE SOLID TRIANGLE CASE IS NOT APPLICABLE IN THIS
CASE, AS IT IS BASED ON A DIFFERENT FACTUAL MILIEU.
PRELIMINARY FINDING OF GUILT (OR ABSENCE
THEREOF) MADE BY THE SEARCH WARRANT COURTAND
THE COURT OF APPEALS WAS IMPROPER.
THE SEARCH WARRANT COURT OVERSTEPPED ITS
DISCRETION. THE LAW IS CLEAR. THE DOMINANCY TEST
SHOULD BE USED.
THE COURT OF APPEALS COMMITTED ERRORS OF
JURISDICTION.[13]

On the other hand, petitioner-intervenors motion for reconsideration raises

the following errors for this Courts consideration, to wit:
(a)

(b)

(c)

THE COURT OF APPEALS AND THE SEARCH WARRANT

COURT ACTED
CONTRARY
TO
LAW
AND
JURISPRUDENCE IN ADOPTING THE ALREADYREJECTED HOLISTIC TEST IN DETERMINING THE ISSUE
OF CONFUSING SIMILARITY;
THE COURT OF APPEALS AND THE SEARCH WARRANT
COURT ACTED CONTRARY TO LAW IN HOLDING THAT
THERE IS NO PROBABLE CAUSE FOR TRADEMARK
INFRINGEMENT; AND
THE COURT OF APPEALS SANCTIONED THE TRIAL
COURTS DEPARTURE FROM THE USUAL AND ACCEPTED
COURSE OF JUDICIAL PROCEEDINGS WHEN IT UPHELD
THE QUASHAL OF THE SEARCH WARRANT ON THE
BASIS SOLELY OF A FINDING THAT THERE IS NO
CONFUSING SIMILARITY.[14]

A perusal of the motions submitted by petitioner and petitioner-intervenor

would show that the primary issue posed by them dwells on the issue of whether or
not respondent is guilty of trademark infringement.
After a thorough review of the arguments raised herein, this Court
reconsiders its earlier decision.
The basic law on trademark, infringement, and unfair competition is
Republic Act (R.A.) No. 8293. Specifically, Section 155 of R.A. No. 8293 states:
Remedies; Infringement. Any person who shall, without the
consent of the owner of the registered mark:
155.1. Use in commerce any reproduction,
counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature
thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including
other preparatory steps necessary to carry out the sale of
any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or
to deceive; or
155.2. Reproduce, counterfeit, copy or colorably
imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used
in commerce upon or in connection with the sale, offering
for sale, distribution, or advertising of goods or services on
or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for infringement by the registrant for
the remedies hereinafter set forth: Provided, That the
infringement takes place at the moment any of the acts
stated in Subsection 155.1 or this subsection are committed
regardless of whether there is actual sale of goods or
services using the infringing material.[15]

The essential element of infringement under R.A. No. 8293 is that the infringing
mark is likely to cause confusion. In determining similarity and likelihood of
confusion, jurisprudence has developed tests the Dominancy Test and the
Holistic or Totality Test. The Dominancy Test focuses on the similarity of the
prevalent or dominant features of the competing trademarks that might cause
confusion, mistake, and deception in the mind of the purchasing public.
Duplication or imitation is not necessary; neither is it required that the mark sought
to be registered suggests an effort to imitate. Given more consideration are the
aural and visual impressions created by the marks on the buyers of goods, giving
little weight to factors like prices, quality, sales outlets, and market segments.[16]
In contrast, the Holistic or Totality Test necessitates 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 labels so that the observer may draw conclusion on whether one is
confusingly similar to the other.[17]
Relative to the question on confusion of marks and trade names,
jurisprudence has noted two (2) types of confusion, viz.: (1) confusion of goods
(product confusion), where the ordinarily prudent purchaser would be induced to
purchase one product in the belief that he was purchasing the other; and (2)
confusion of business (source or origin confusion), where, although the goods of
the parties are different, the product, the mark of which registration is applied for
by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be deceived either into
that belief or into the belief that there is some connection between the two parties,
though inexistent.[18]
Applying the Dominancy Test to the case at bar, this Court finds that the use
of the stylized S by respondent in its Strong rubber shoes infringes on the mark
already registered by petitioner with the IPO. While it is undisputed that
petitioners stylized S is within an oval design, to this Courts mind, the dominant
feature of the trademark is the stylized S, as it is precisely the stylized S which
catches the eye of the purchaser. Thus, even if respondent did not use an oval
design, the mere fact that it used the same stylized S, the same being the dominant

feature of petitioners trademark, already constitutes infringement under the

Dominancy Test.
This Court cannot agree with the observation of the CA that the use of the
letter S could hardly be considered as highly identifiable to the products of
petitioner alone. The CA even supported its conclusion by stating that the letter S
has been used in so many existing trademarks, the most popular of which is the
trademark S enclosed by an inverted triangle, which the CA says is identifiable to
Superman. Such reasoning, however, misses the entire point, which is that
respondent had used a stylized S, which is the same stylized S which petitioner has
a registered trademark for. The letter S used in the Superman logo, on the other
hand, has a block-like tip on the upper portion and a round elongated tip on the
lower portion. Accordingly, the comparison made by the CA of the letter S used in
the Superman trademark with petitioners stylized S is not appropriate to the case at
bar.
Furthermore, respondent did not simply use the letter S, but it appears to this
Court that based on the font and the size of the lettering, the stylized S utilized by
respondent is the very same stylized S used by petitioner; a stylized S which is
unique and distinguishes petitioners trademark. Indubitably, the likelihood of
confusion is present as purchasers will associate the respondents use of the stylized
S as having been authorized by petitioner or that respondents product is connected
with petitioners business.
Both the RTC and the CA applied the Holistic Test in ruling that respondent
had not infringed petitioners trademark. For its part, the RTC noted the following
supposed dissimilarities between the shoes, to wit:
1. The mark S found in Strong Shoes is not enclosed in an oval design.
2. The word Strong is conspicuously placed at the backside and insoles.
3. The hang tags and labels attached to the shoes bears the word Strong
for respondent and Skechers U.S.A. for private complainant;
4. Strong shoes are modestly priced compared to the costs of Skechers
Shoes.[19]

While there may be dissimilarities between the appearances of the shoes,

to this Courts mind such dissimilarities do not outweigh the stark and blatant
similarities in their general features. As can be readily observed by simply
comparing petitioners Energy[20] model and respondents Strong[21] rubber shoes,
respondent also used the color scheme of blue, white and gray utilized by
petitioner. Even the design and wavelike pattern of the midsole and outer sole of
respondents shoes are very similar to petitioners shoes, if not exact patterns
thereof. At the side of the midsole near the heel of both shoes are two elongated
designs in practically the same location. Even the outer soles of both shoes have
the same number of ridges, five at the back and six in front. On the side of
respondents shoes, near the upper part, appears the stylized S, placed in the exact
location as that of the stylized S on petitioners shoes. On top of the "tongue" of
both shoes appears the stylized S in practically the same location and size.
Moreover, at the back of petitioners shoes, near the heel counter, appears Skechers
Sport Trail written in white lettering. However, on respondents shoes appears
Strong Sport Trail noticeably written in the same white lettering, font size,
direction and orientation as that of petitioners shoes. On top of the heel collar of
petitioners shoes are two grayish-white semi-transparent circles. Not surprisingly,
respondents shoes also have two grayish-white semi-transparent circles in the exact
same location.
Based on the foregoing, this Court is at a loss as to how the RTC and the
CA, in applying the holistic test, ruled that there was no colorable imitation, when
it cannot be any more clear and apparent to this Court that there is colorable
imitation. The dissimilarities between the shoes are too trifling and frivolous that
it is indubitable that respondents products will cause confusion and mistake in the
eyes of the public. Respondents shoes may not be an exact replica of petitioners
shoes, but the features and overall design are so similar and alike that confusion is
highly likely.
In Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., Inc.,
this Court, in a case for unfair competition, had opined that even if not all the
details are identical, as long as the general appearance of the two products are such
that any ordinary purchaser would be deceived, the imitator should be liable,
to wit:
[22]

From said examination, We find the shoes manufactured by

defendants to contain, as found by the trial court, practically all the
features of those of the plaintiff Converse Rubber Corporation and
manufactured, sold or marketed by plaintiff Edwardson Manufacturing
Corporation, except for their respective brands, of course. We fully agree
with the trial court that "the respective designs, shapes, the colors of the
ankle patches, the bands, the toe patch and the soles of the two products
are exactly the same ... (such that) at a distance of a few meters, it is
impossible to distinguish "Custombuilt" from "Chuck Taylor." These
elements are more than sufficient to serve as basis for a charge of unfair
competition. Even if not all the details just mentioned were identical,
with the general appearances alone of the two products, any ordinary, or
even perhaps even a not too perceptive and discriminating customer
could be deceived, and, therefore, Custombuilt could easily be passed off
for Chuck Taylor. Jurisprudence supports the view that under such
circumstances, the imitator must be held liable. x x x [23]

Neither can the difference in price be a complete defense in trademark

infringement. In McDonalds Corporation v. L.C. Big Mak Burger. Inc.,[24] this
Court held:
Modern law recognizes that the protection to which the owner of
a trademark is entitled is not limited to guarding his goods or business
from actual market competition with identical or similar products of the
parties, but extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to lead to a
confusion of source, as where prospective purchasers would be misled
into thinking that the complaining party has extended his business into
the field (see 148 ALR 56 et seq; 53 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the
normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am.
Jur. 576, 577). x x x[25]

Indeed, the registered trademark owner may use its 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. [26] The
purchasing public might be mistaken in thinking that petitioner had ventured into a
lower market segment such that it is not inconceivable for the public to think that

Strong or Strong Sport Trail might be associated or connected with petitioners

brand, which scenario is plausible especially since both petitioner and respondent
manufacture rubber shoes.
Withal, the protection of trademarks as intellectual property is intended not
only to preserve the goodwill and reputation of the business established on the
goods bearing the mark through actual use over a period of time, but also to
safeguard the public as consumers against confusion on these goods. [27] While
respondents shoes contain some dissimilarities with petitioners shoes, this Court
cannot close its eye to the fact that for all intents and purpose, respondent had
deliberately attempted to copy petitioners mark and overall design and features of
the shoes. Let it be remembered, that defendants in cases of infringement do not
normally copy but only make colorable changes.[28] 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.[29]
WHEREFORE, premises considered, the Motion for Reconsideration
is GRANTED. The
Decision
dated November
30,
2006 is RECONSIDERED and SET ASIDE.
SO ORDERED.
5. Taiwan Koiln Corporation, Ltd vs Kolin Electronics Co., Inc. GR # 209843 March 25,
2015
Nature of the Case
Before the Court is a petition for review under Rule 45 of the Rules of Court interposed by petitioner Taiwan
1

Kolin Corporation, Ltd. (Taiwan Kolin), assailing the April 30, 2013 Decision of the Court of Appeals (CA) in
2

CA-G.R. SP No. 122565 and its subsequent November 6, 2013 Resolution. The assailed issuances
effectively denied petitioners trademark application for the use of KOLIN on its television and DVD
players.
chanroblesvirtuallawlibrary

The Facts
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), then Bureau of Patents,
Trademarks, and Technology Transfer, a trademark application, docketed as Application No. 4-1996-106310,
for the use of KOLIN on a combination of goods, including colored televisions, refrigerators, window-type
and split-type air conditioners, electric fans and water dispensers. Said goods allegedly fall under Classes 9,
11, and 21 of the Nice Classification (NCL).
Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan Kolins failure to
respond to IPOs Paper No. 5 requiring it to elect one class of good for its coverage. However, the same
3

application was subsequently revived through Application Serial No. 4-2002-011002, with petitioner

electing Class 9 as the subject of its application, particularly: television sets, cassette recorder, VCD
Amplifiers, camcorders and other audio/video electronic equipment, flat iron, vacuum cleaners, cordless
handsets, videophones, facsimile machines, teleprinters, cellular phones and automatic goods vending
machine. The application would in time be duly published.

cralawred

On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioners revived
application, docketed as Inter Partes Case No. 14-2006-00096. As argued, the mark Taiwan Kolin seeks to
register is identical, if not confusingly similar, with its KOLIN mark registered on November 23, 2003,
covering the following products under Class 9 of the NCL: automatic voltage regulator, converter, recharger,
stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-DC.

5
cralawred

To digress a bit, Kolin Electronics KOLIN registration was, as it turns out, the subject of a prior legal
dispute between the parties in Inter Partes Case No. 14-1998-00050 before the IPO. In the said case, Kolin
Electronics own application was opposed by Taiwan Kolin, being, as Taiwan Kolin claimed, the prior
registrant and user of the KOLIN trademark, having registered the same in Taipei, Taiwan on December 1,
1988. The Bureau of Legal Affairs of the IPO (BLA-IPO), however, did not accord priority right to Taiwan
Kolins Taipei registration absent evidence to prove that it has already used the said mark in the Philippines
as early as 1988. On appeal, the IPO Director General affirmed the BLA-IPOs Decision. Taiwan Kolin
elevated the case to the CA, but without injunctive relief, Kolin Electronics was able to register the KOLIN
6

trademark on November 23, 2003 for its products. Subsequently, the CA, on July 31, 2006, affirmed the
Decision of the Director General.
In answer to respondents opposition in Inter Partes Case No. 14-2006-00096, petitioner argued that it
should be accorded the benefits of a foreign-registered mark under Secs. 3 and 131.1 of Republic Act No.
8

8293, otherwise known as the Intellectual Property Code of the Philippines (IP Code); that it has already
registered the KOLIN mark in the Peoples Republic of China, Malaysia and Vietnam, all of which are parties
to the Paris Convention for the Protection of Industrial Property (Paris Convention) and the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS);and that benefits accorded to a well-known
9

mark should be accorded to petitioner.

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Ruling of the BLA-IPO

By Decision

10

dated August 16, 2007, the BLA-IPO denied petitioners application disposing as follows:

chanRoble svirtualLawlibrary

In view of all the foregoing, the instant Opposition is as, it is hereby SUSTAINED. Accordingly, application
bearing Serial No. 4-1996-106310 for the mark KOLIN filed in the name of TAIWAN KOLIN., LTD. on
February 29, 1996 for goods falling under Class 09 of the International Classification of Goods such as
cassette recorder, VCD, woofer, amplifiers, camcorders and other audio/video electronic equipment, flat iron,
vacuum cleaners, cordless handsets, videophones, facsimile machines, teleprinters, cellular phones,
automatic goods vending machines and other electronic equipment is hereby REJECTED.
Let the file wrapper of KOLIN, subject of this case be forwarded to the Bureau of Trademarks (BOT) for
appropriate
action
in
accordance
with
this
Decision.
SO ORDERED.

cralawlawlibrary

11

Citing Sec. 123(d) of the IP Code, the BLA-IPO held that a mark cannot be registered if it is identical with
a registered mark belonging to a different proprietor in respect of the same or closely-related goods.
Accordingly, respondent, as the registered owner of the mark KOLIN for goods falling under Class 9 of the
NCL, should then be protected against anyone who impinges on its right, including petitioner who seeks to
12

register an identical mark to be used on goods also belonging to Class 9 of the NCL. The BLA-IPO also
noted that there was proof of actual confusion in the form of consumers writing numerous e-mails to
respondent asking for information, service, and complaints about petitioners products.

13
cralawre d

Petitioner moved for reconsideration but the same was denied on January 26, 2009 for lack of merit.
petitioner appealed the above Decision to the Office of the Director General of the IPO.
chanroble svirtuallawlibrary

14

Thus,

Ruling of the IPO Director General

On November 23, 2011, the IPO Director General rendered a Decision
following wise:

15

reversing that of the BLA-IPO in the

chanRoble svirtualLawlibrary

Wherefore, premises considered, the appeal is hereby GRANTED. The Appellants Trademark Application No.
4-1996-106310 is hereby GIVEN DUE COURSE subject to the use limitation or restriction for the goods
television and DVD player. Let a copy of this Decision as well as the trademark application and records be
furnished and returned to the Director of the Bureau of Legal Affairs for appropriate action. Further, let the
Director of the Bureau of Trademarks and the library of the Documentation, Information and Technology
Transfer Bureau be furnished a copy of this Decision for information, guidance, and records purposes.
SO ORDERED.

cralawlawlibrary

In so ruling, the IPO Director General ratiocinated that product classification alone cannot serve as the
decisive factor in the resolution of whether or not the goods are related and that emphasis should be on the
similarity of the products involved and not on the arbitrary classification or general description of their
properties or characteristics. As held, the mere fact that one person has adopted and used a particular
trademark for his goods does not prevent the adoption and use of the same trademark by others on articles
of a different description.

16

cralawred

Aggrieved, respondent elevated the case to the CA.

chanroblesvirtuallawlibrary

Ruling of the Court of Appeals

In its assailed Decision, the CA found for Kolin Electronics, on the strength of the following premises: (a) the
mark sought to be registered by Taiwan Kolin is confusingly similar to the one already registered in favor of
Kolin Electronics; (b) there are no other designs, special shape or easily identifiable earmarks that would
17

differentiate the products of both competing companies; and (c) the intertwined use of television sets with
amplifier, booster and voltage regulator bolstered the fact that televisions can be considered as within the
normal expansion of Kolin Electronics,
protected under Sec. 138

19

18

and is thereby deemed covered by its trademark as explicitly

of the IP Code.

20

Resultantly, the CA granted respondents appeal thusly:

chanRoblesvirtualLa wlibrary

WHEREFORE, the appeal is GRANTED. The November 23, 2011 Decision of the Director General of the
Intellectual Property Office in Inter Partes Case No. 14-2006-0096 is REVERSED and SET ASIDE. The
September 17, 2007 Decision of the Bureau of Legal Affairs of the same office is REINSTATED.
SO ORDERED.

cralawlawlibrary

Petitioner moved for reconsideration only to be denied by the CA through its equally assailed November 6,
2013 Resolution. Hence, the instant recourse.
chanroble svirtuallawlibrary

The Issue
The primordial issue to be resolved boils down to whether or not petitioner is entitled to its trademark
registration of KOLIN over its specific goods of television sets and DVD players. Petitioner postulates, in
the main, that its goods are not closely related to those of Kolin Electronics. On the other hand, respondent
hinges its case on the CAs findings that its and petitioners products are closely-related. Thus, granting
petitioners application for trademark registration, according to respondent, would cause confusion as to the
public.

The Courts Ruling

The petition is impressed with merit.

Identical marks may be registered for
products from the same classification
To bolster its opposition against petitioners application to register trademark KOLIN, respondent maintains
that the element of mark identity argues against approval of such application,quoting the BLA IPOs ruling in
this regard:

21
cralawred

Indubitably, Respondent-Applicants [herein petitioner] mark is identical to the registered mark of herein
Opposer [herein respondent] and the identical mark is used on goods belonging to Class 9 to which
Opposers goods are also classified. On this point alone, Respondent-Applicants application should already
be denied.
cralawla wlibrary

The argument is specious.

The parties admit that their respective sets of goods belong to Class 9 of the NCL, which includes the
following:

22

cralawred

Class

Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling,

checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for
conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for
recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs;
compact discs, DVDs and other digital recording media; mechanisms for coin-operated apparatus; cash
registers, calculating machines, data processing equipment, computers; computer software; fireextinguishing apparatus.
cralawlawlibrary

But mere uniformity in categorization, by itself, does not automatically preclude the registration of what
appears to be an identical mark, if that be the case. In fact, this Court, in a long line of cases,has held that
such circumstance does not necessarily result in any trademark infringement. The survey of jurisprudence
cited in Mighty Corporation v. E. & J Gallo Winery

23

is enlightening on this point:

chanRoble svirtualLawlibrary

(a) in Acoje Mining Co., Inc. vs. Director of Patents,24 we ordered the
approval of Acoje Minings application for registration of the trademark
LOTUS for its soy sauce even though Philippine Refining Company had
prior registration and use of such identical mark for its edible oil which,
like soy sauce, also belonged to Class 47;
(b)
in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents, 25 we
upheld the Patent Directors registration of the same trademark CAMIA
for Ng Sams ham under Class 47, despite Philippine Refining Companys
prior trademark registration and actual use of such mark on its lard,
butter, cooking oil (all of which belonged to Class 47), abrasive
detergents, polishing materials and soaps;
(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim
Bun Liong,26we dismissed Hickoks petition to cancel private respondents
HICKOK trademark registration for its Marikina shoes as against

cralawla wlibrary

petitioners earlier registration of the same trademark for handkerchiefs,

briefs, belts and wallets.

Verily, whether or not the products covered by the trademark sought to be registered by Taiwan Kolin, on
the one hand, and those covered by the prior issued certificate of registration in favor of Kolin Electronics,
on the other, fall under the same categories in the NCL is not the sole and decisive factor in determining a
possible violation of Kolin Electronics intellectual property right should petitioners application be granted. It
is hornbook doctrine, as held in the above-cited cases, that emphasis should be on the similarity of the
products involved and not on the arbitrary classification or general description of their properties or
characteristics. The mere fact that one person has adopted and used a trademark on his goods would not,
without more, prevent the adoption and use of the same trademark by others on unrelated articles of a
different kind.

27
cralawre d

The CA erred in denying petitioners

registration application
Respondent next parlays the idea of relation between products as a factor militating against petitioners
28

application. Citing Esso Standard Eastern, Inc. v. Court of Appeals, respondent argues that the goods
covered by petitioners application and those covered by its registration are actually related belonging as
they do to the same class or have the same physical characteristics with reference to their form,
composition, texture, or quality, or if they serve the same purpose. Respondent likewise draws parallelisms
between the present controversy and the following cases:

29
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(a) In Arce & Sons, Inc. vs. Selecta Biscuit Company,30 biscuits were held
related to milk because they were both food products;
(b)
In Chua Che vs. Phil. Patents Office,31 soap and perfume, lipstick and nail
polish are held to be similarly related because they are common
household items;
(c) In Ang vs. Teodoro,32 the trademark Ang Tibay for shoes and slippers
was disallowed to be used for shirts and pants because they belong to
the same general class of goods; and
(d) In Khe vs. Lever Bros. Co.,33 soap and pomade, although noncompetitive, were held to be similar or belong to the same class, since
both are toilet articles.
cralawla wlibrary

Respondent avers that Kolin Electronics and Taiwan Kolins products are closely-related not only because
both fall under Class 9 of the NCL, but mainly because they both relate to electronic products, instruments,
34

apparatus, or appliances. Pushing the point, respondent would argue that Taiwan Kolin and Kolin
Electronics goods are inherently similar in that they are all plugged into electric sockets and perform a
useful function.

35

application, viz:

Furthermore, respondent echoes the appellate courts ratiocination in denying petitioners

36
cralawred

Significantly, Kolin Electronics goods (automatic voltage regulator; converter; recharger; stereo booster;
AC-DC regulated power supply; step-down transformer; and PA amplified AC-DC) and Taiwan Kolins
television sets and DVD players are both classified under class 9 of the NICE agreement. At first glance, it is
also evident that all these goods are generally described as electrical devices.x x x [T]he goods of both Kolin
Electronics and Taiwan Kolin will inevitably be introduced to the public as KOLIN products and will be
offered for sale in the same channels of trade. Contrary to Taiwan Kolins claim, power supply as well as
audio and stereo equipment like booster and amplifier are not only sold in hardware and electrical shops.

These products are commonly found in appliance stores alongside television sets and DVD players. With the
present trend in todays entertainment of having a home theater system, it is not unlikely to see a stereo
booster, amplifier and automatic voltage regulator displayed together with the television sets and DVD
players. With the intertwined use of these products bearing the identical KOLIN mark, the ordinary
intelligent consumer would likely assume that they are produced by the same manufacturer.
In sum, the intertwined use, the same classification of the products as class 9 under the NICE
Agreement, and the fact that they generally flow through the same channel of trade clearly
establish that Taiwan Kolins television sets and DVD players are closely related to Kolin
Electronics goods. As correctly pointed out by the BLA-IPO, allowing Taiwan Kolins registration would
only confuse consumers as to the origin of the products they intend to purchase. Accordingly, protection
should be afforded to Kolin Electronics, as the registered owner of the KOLIN trademark. 37 (emphasis
added)
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The CAs approach and reasoning to arrive at the assailed holding that the approval of petitioners
application is likely to cause confusion or deceive fail to persuade.
The products covered by petitioners
application and respondents
registration are unrelated
A certificate of trademark registration confers upon the trademark owner the exclusive right to sue those
who have adopted a similar mark not only in connection with the goods or services specified in the
certificate, but also with those that are related thereto.

38
cralawre d

In resolving one of the pivotal issues in this casewhether or not the products of the parties involved are
relatedthe doctrine in Mighty Corporation is authoritative. There, the Court held that the goods should be
tested against several factors before arriving at a sound conclusion on the question of relatedness. Among
these are:
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(a)
the
business
(and
its
location)
to
which
the
goods
belong;
(b)
the
class
of
product
to
which
the
goods
belong;
(c) the products quality, quantity, or size, including the nature of the package, wrapper or container;
(d)
the
nature
and
cost
of
the
articles;
(e) the descriptive properties, physical attributes or essential characteristics with reference to their form,
composition,
texture
or
quality;
(f)
the
purpose
of
the
goods;
(g) whether the article is bought for immediate consumption, that is, day-to-day household items;
(h)
the
fields
of
manufacture;
(i)
the
conditions
under
which
the
article
is
usually
purchased;
and
(j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed and
sold.39
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As mentioned, the classification of the products under the NCL is merely part and parcel of the factors to be
considered in ascertaining whether the goods are related. It is not sufficient to state that the goods involved
herein are electronic products under Class 9 in order to establish relatedness between the goods, for this
only accounts for one of many considerations enumerated in Mighty Corporation.In this case, credence is
accorded to petitioners assertions that:

a.

40

cralawred

Taiwan Kolins goods are classified as home appliances as opposed to Kolin Electronics goods which
are power supply and audio equipment accessories;
ChanRoblesVirtualawlibrary

b.

Taiwan Kolins television sets and DVD players perform distinct function and purpose from Kolin
Electronics power supply and audio equipment; and

c.

Taiwan Kolin sells and distributes its various home appliance products on wholesale and to
accredited dealers, whereas Kolin Electronics goods are sold and flow through electrical and
hardware stores.

Clearly then, it was erroneous for respondent to assume over the CA to conclude that all electronic products
are related and that the coverage of one electronic product necessarily precludes the registration of a similar
mark over another. In this digital age wherein electronic products have not only diversified by leaps and
bounds, and are geared towards interoperability, it is difficult to assert readily, as respondent simplistically
did, that all devices that require plugging into sockets are necessarily related goods.
41

It bears to stress at this point that the list of products included in Class 9 can be sub-categorized into five
(5) classifications, namely: (1) apparatus and instruments for scientific or research purposes, (2)
information technology and audiovisual equipment, (3) apparatus and devices for controlling the distribution
42

and use of electricity, (4) optical apparatus and instruments, and (5) safety equipment. From this subclassification, it becomes apparent that petitioners products, i.e., televisions and DVD players, belong to
audiovisiual equipment, while that of respondent, consisting of automatic voltage regulator, converter,
recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-DC,
generally fall under devices for controlling the distribution and use of electricity.
The ordinarily intelligent buyer
is not likely to be confused
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to another, no
rigid set rules can plausible be formulated. Each case must be decided on its merits, with due regard to the
goods or services involved, the usual purchasers character and attitude, among others. In such cases, even
more than in any other litigation, precedent must be studied in the light of the facts of a particular case.
That is the reason why in trademark cases, jurisprudential precedents should be applied only to a case if
they are specifically in point.

43

cralawre d

For a clearer perspective and as matter of record, the following image on the left
for by petitioner, while the image juxtaposed to its right

45

44

is the trademark applied

is the trademark registered by respondent:

(please see image in G.R. No. 209843 page 10)

While both competing marks refer to the word KOLIN written in upper case letters and in bold font, the
Court at once notes the distinct visual and aural differences between them: Kolin Electronics mark is
italicized and colored black while that of Taiwan Kolin is white in pantone red color background. The differing
features between the two, though they may appear minimal, are sufficient to distinguish one brand from the
other.
It cannot be stressed enough that the products involved in the case at bar are, generally speaking, various
kinds of electronic products. These are not ordinary consumable household items, like catsup, soy sauce or
46

soap which are of minimal cost. The products of the contending parties are relatively luxury items not
easily considered affordable. 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
47

likely.

48

As further elucidated in Del Monte Corporation v. Court of Appeals:

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x x x Among these, what essentially determines the attitudes of the purchaser, specifically his inclination to
be cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not exercise as
much care as one who buys an expensive watch. As a general rule, 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. Expensive and valuable items are normally bought only after deliberate,
comparative and analytical investigation. But 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 x x x.(emphasis added)
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Respondent has made much reliance on Arce & Sons, Chua Che, Ang, and Khe, oblivious that they involved
common household itemsi.e., biscuits and milk, cosmetics, clothes, and toilet articles, respectively
whereas the extant case involves luxury items not regularly and inexpensively purchased by the consuming
public. In accord with common empirical experience, the useful lives of televisions and DVD players last for
about five (5) years, minimum, making replacement purchases very infrequent. The same goes true with
converters and regulators that are seldom replaced despite the acquisition of new equipment to be plugged

onto it. In addition, the amount the buyer would be parting with cannot be deemed minimal considering that
the price of televisions or DVD players can exceed todays monthly minimum wage.In light of these
circumstances, it is then expected that the ordinary intelligent buyer would be more discerning when it
comes to deciding which electronic product they are going to purchase, and it is this standard which this
Court applies here in in determining the likelihood of confusion should petitioners application be granted.
To be sure, the extant case is reminiscent of Emerald Garment Manufacturing Corporation v. Court of
49

Appeals, wherein the opposing trademarks are that of Emerald Garment Manufacturing Corporations
Stylistic Mr. Lee and H.D. Lees LEE. In the said case, the appellate court affirmed the decision of the
Director of Patents denying Emerald Garments application for registration due to confusing similarity with
H.D. Lees trademark. This Court, however, was of a different beat and ruled that there is no confusing
similarity between the marks, given that the products covered by the trademark, i.e., jeans, were,at that
time, considered pricey, typically purchased by intelligent buyers familiar with the products and are more
circumspect, and, therefore, would not easily be deceived. As held:
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Finally, in line with the foregoing discussions, more credit should be given to the ordinary purchaser. Cast
in this particular controversy, the ordinary purchaser is not the completely unwary consumer but is the
ordinarily
intelligent
buyer
considering
the
type
of
product
involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok50is better suited to the present case. There, 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. The test is not found in the
deception, or the possibility of deception, of the person who knows nothing about the design which has been
counterfeited, and who must be indifferent between that and the other. The simulation, in order to be
objectionable, must be such as appears likely to mislead the ordinary intelligent buyer who has a
need to supply and is familiar with the article that he seeks to purchase.51 (emphasis added)
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Consistent with the above ruling, this Court finds that the differences between the two marks, subtle as they
may be, are sufficient to prevent any confusion that may ensue should petitioners trademark application be
52

granted.As held in Esso Standard Eastern, Inc.:

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Respondent court correctly ruled that considering the general appearances of each mark as a whole, the
possibility of any confusion is unlikely. A comparison of the labels of the samples of the goods submitted by
the parties shows a great many differences on the trademarks used. As pointed out by respondent court in
its appealed decision, (A) witness for the plaintiff, Mr. Buhay, admitted that the color of the ESSO used by
the plaintiff for the oval design where the blue word ESSO is contained is the distinct and unique kind of
blue. In his answer to the trial courts question, Mr. Buhay informed the court that the plaintiff never used its
trademark on any product where the combination of colors is similar to the label of the Esso cigarettes, and
Another witness for the plaintiff, Mr. Tengco, testified that generally, the plaintiffs trademark comes all in
either red, white, blue or any combination of the three colors. It is to be pointed out that not even a shade
of these colors appears on the trademark of the appellants cigarette. The only color that the appellant uses
in
its
trademark
is
green.
Even the lower court, which ruled initially for petitioner, found that a noticeable difference between the
brand ESSO being used by the defendants and the trademark ESSO of the plaintiff is that the former has a
rectangular background, while in that of the plaintiff the word ESSO is enclosed in an oval background.
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All told, We are convinced that petitioners trademark registration not only covers unrelated good, but is also
incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser must be thought of as having,
and credited with, at least a modicum of intelligence to be able to see the differences between the two
trademarks in question.

53
cralawre d

Questions of fact may still be entertained

On a final note, the policy according factual findings of courts a quo great respect, if not finality, is not
binding where they have overlooked, misapprehended, or misapplied any fact or circumstance of weight and

54

substance. So it must be here; the nature of the products involved materially affects the outcome of the
instant case. A reversal of the appellate courts Decision is then in order.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and the Resolution
of the Court of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and November 6, 2013,
respectively, are hereby REVERSED and SET ASIDE. Accordingly, the Decision of the Intellectual Property
Office Director General in Inter Partes Case No. 14-2006-00096, dated November 23, 2011, is
hereby REINSTATED.
SO ORDERED.

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6. McDonalds vs Big Mak GR # 143993 Aug. 18, 2004

CARPIO, J.:
The Case
This is a petition for review1 of the Decision dated 26 November 1999 of the Court of Appeals 2 finding
respondent L.C. Big Mak Burger, Inc. not liable for trademark infringement and unfair competition
and ordering petitioners to pay respondents P1,900,000 in damages, and of its Resolution dated 11
July 2000 denying reconsideration. The Court of Appeals' Decision reversed the 5 September 1994
Decision3 of the Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big Mak Burger,
Inc. liable for trademark infringement and unfair competition.
The Facts
Petitioner McDonald's Corporation ("McDonald's") is a corporation organized under the laws of
Delaware, United States. McDonald's operates, by itself or through its franchisees, a global chain of
fast-food restaurants. McDonald's4 owns a family of marks5 including the "Big Mac" mark for its
"double-decker hamburger sandwich."6McDonald's registered this trademark with the United States
Trademark Registry on 16 October 1979.7 Based on this Home Registration, McDonald's applied
for the registration of the same mark in the Principal Register of the then Philippine Bureau of
Patents, Trademarks and Technology ("PBPTT"), now the Intellectual Property Office
("IPO"). Pending approval of its application, McDonald's introduced its "Big Mac" hamburger
sandwiches in the Philippine market in September 1981. On 18 July 1985, the PBPTT allowed
registration of the "Big Mac" mark in the Principal Register based on its Home Registration in the
United States.
Like its other marks, McDonald's displays the "Big Mac" mark in items 8 and paraphernalia9 in its
restaurants, and in its outdoor and indoor signages. From 1982 to 1990, McDonald's spent P10.5
million in advertisement for "Big Mac" hamburger sandwiches alone.10
Petitioner McGeorge Food Industries ("petitioner McGeorge"), a domestic corporation, is McDonald's
Philippine franchisee.11
Respondent L.C. Big Mak Burger, Inc. ("respondent corporation") is a domestic corporation which
operates fast-food outlets and snack vans in Metro Manila and nearby provinces. 12 Respondent
corporation's menu includes hamburger sandwiches and other food items. 13 Respondents Francis B.
Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo, and Grace Huerto
("private respondents") are the incorporators, stockholders and directors of respondent corporation. 14

On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the "Big
Mak" mark for its hamburger sandwiches. McDonald's opposed respondent corporation's application
on the ground that "Big Mak" was a colorable imitation of its registered "Big Mac" mark for the same
food products. McDonald's also informed respondent Francis Dy ("respondent Dy"), the chairman of
the Board of Directors of respondent corporation, of its exclusive right to the "Big Mac" mark and
requested him to desist from using the "Big Mac" mark or any similar mark.
Having received no reply from respondent Dy, petitioners on 6 June 1990 sued respondents in the
Regional Trial Court of Makati, Branch 137 ("RTC"), for trademark infringement and unfair
competition. In its Order of 11 July 1990, the RTC issued a temporary restraining order ("TRO")
against respondents enjoining them from using the "Big Mak" mark in the operation of their business
in the National Capital Region.15 On 16 August 1990, the RTC issued a writ of preliminary injunction
replacing the TRO.16
In their Answer, respondents admitted that they have been using the name "Big Mak Burger" for their
fast-food business. Respondents claimed, however, that McDonald's does not have an exclusive
right to the "Big Mac" mark or to any other similar mark. Respondents point out that the Isaiyas
Group of Corporations ("Isaiyas Group") registered the same mark for hamburger sandwiches with
the PBPTT on 31 March 1979. One Rodolfo Topacio ("Topacio") similarly registered the same mark
on 24 June 1983, prior to McDonald's registration on 18 July 1985.Alternatively, respondents
claimed that they are not liable for trademark infringement or for unfair competition, as the "Big Mak"
mark they sought to register does not constitute a colorable imitation of the "Big Mac" mark.
Respondents asserted that they did not fraudulently pass off their hamburger sandwiches as those
of petitioners' Big Mac hamburgers.17 Respondents sought damages in their counterclaim.
In their Reply, petitioners denied respondents' claim that McDonald's is not the exclusive owner of
the "Big Mac" mark. Petitioners asserted that while the Isaiyas Group and Topacio did register the
"Big Mac" mark ahead of McDonald's, the Isaiyas Group did so only in the Supplemental Register of
the PBPTT and such registration does not provide any protection. McDonald's disclosed that it
had acquired Topacio's rights to his registration in a Deed of Assignment dated 18 May 1981. 18
The Trial Court's Ruling
On 5 September 1994, the RTC rendered judgment ("RTC Decision") finding respondent corporation
liable for trademark infringement and unfair competition. However, the RTC dismissed the complaint
against private respondents and the counterclaim against petitioners for lack of merit and
insufficiency of evidence. The RTC held:
Undeniably, the mark "B[ig] M[ac]" is a registered trademark for plaintiff McDonald's, and as
such, it is entitled [to] protection against infringement.
xxxx
There exist some distinctions between the names "B[ig] M[ac]" and "B[ig] M[ak]" as
appearing in the respective signages, wrappers and containers of the food products of the
parties. But infringement goes beyond the physical features of the questioned name and the
original name. There are still other factors to be considered.
xxxx

Significantly, the contending parties are both in the business of fast-food chains and
restaurants. An average person who is hungry and wants to eat a hamburger sandwich may
not be discriminating enough to look for a McDonald's restaurant and buy a "B[ig] M[ac]"
hamburger. Once he sees a stall selling hamburger sandwich, in all likelihood, he will dip into
his pocket and order a "B[ig] M[ak]" hamburger sandwich. Plaintiff McDonald's fast-food
chain has attained wide popularity and acceptance by the consuming public so much so that
its air-conditioned food outlets and restaurants will perhaps not be mistaken by many to be
the same as defendant corporation's mobile snack vans located along busy streets or
highways. But the thing is that what is being sold by both contending parties is a food item
a hamburger sandwich which is for immediate consumption, so that a buyer may easily be
confused or deceived into thinking that the "B[ig] M[ak]" hamburger sandwich he bought is a
food-product of plaintiff McDonald's, or a subsidiary or allied outlet thereof. Surely, defendant
corporation has its own secret ingredients to make its hamburger sandwiches as palatable
and as tasty as the other brands in the market, considering the keen competition among
mushrooming hamburger stands and multinational fast-food chains and restaurants.Hence,
the trademark "B[ig] M[ac]" has been infringed by defendant corporation when it used the
name "B[ig] M[ak]" in its signages, wrappers, and containers in connection with its food
business. xxxx
Did the same acts of defendants in using the name "B[ig] M[ak]" as a trademark or
tradename in their signages, or in causing the name "B[ig] M[ak]" to be printed on the
wrappers and containers of their food products also constitute an act of unfair competition
under Section 29 of the Trademark Law?
The answer is in the affirmative. xxxx
The xxx provision of the law concerning unfair competition is broader and more inclusive
than the lawconcerning the infringement of trademark, which is of more limited range, but
within its narrower range recognizes a more exclusive right derived by the adoption and
registration of the trademark by the person whose goods or services are first
associated therewith. xxx Notwithstanding the distinction between an action for trademark
infringement and an action for unfair competition, however, the law extends substantially the
same relief to the injured party for both cases. (See Sections 23 and 29 of Republic Act No.
166)
Any conduct may be said to constitute unfair competition if the effect is to pass off on the
public the goods of one man as the goods of another. The choice of "B[ig] M[ak]" as
tradename by defendant corporation is not merely for sentimental reasons but was clearly
made to take advantage of the reputation, popularity and the established goodwill of plaintiff
McDonald's. For, as stated in Section 29, a person is guilty of unfair competition who in
selling his goods shall give them the general appearance, of goods of another manufacturer
or dealer, either as to the goods themselves or in the wrapping of the packages in which they
are contained, or the devices or words thereon, or in any other feature of their appearance,
which would likely influence purchasers to believe that the goods offered are those of a
manufacturer or dealer other than the actual manufacturer or dealer. Thus, plaintiffs have
established their valid cause of action against the defendants for trademark infringement and
unfair competition and for damages.19
The dispositive portion of the RTC Decision provides:
WHEREFORE, judgment is rendered in favor of plaintiffs McDonald's Corporation and
McGeorge Food Industries, Inc. and against defendant L.C. Big Mak Burger, Inc., as follows:

1. The writ of preliminary injunction issued in this case on [16 August 1990] is made
permanent;
2. Defendant L.C. Big Mak Burger, Inc. is ordered to pay plaintiffs actual damages in
the amount ofP400,000.00, exemplary damages in the amount of P100,000.00, and
attorney's fees and expenses of litigation in the amount of P100,000.00;
3. The complaint against defendants Francis B. Dy, Edna A. Dy, Rene B. Dy, Wiliam B. Dy,
Jesus Aycardo, Araceli Aycardo and Grace Huerto, as well as all counter-claims, are
dismissed for lack of merit as well as for insufficiency of evidence.20
Respondents appealed to the Court of Appeals.
The Ruling of the Court of Appeals
On 26 November 1999, the Court of Appeals rendered judgment ("Court of Appeals' Decision")
reversing the RTC Decision and ordering McDonald's to pay respondents P1,600,000 as actual and
compensatory damages and P300,000 as moral damages. The Court of Appeals held:
Plaintiffs-appellees in the instant case would like to impress on this Court that the use
of defendants-appellants of its corporate name the whole "L.C. B[ig] M[ak] B[urger], I[nc]."
which appears on their food packages, signages and advertisements is an infringement of
their trademark "B[ig] M[ac]" which they use to identify [their] double decker sandwich, sold in
a Styrofoam box packaging material with the McDonald's logo of umbrella "M" stamped
thereon, together with the printed mark in red bl[o]ck capital letters, the words being
separated by a single space. Specifically, plaintiffs-appellees argue that defendantsappellants' use of their corporate name is a colorable imitation of their trademark "Big Mac".
xxxx
To Our mind, however, this Court is fully convinced that no colorable imitation exists. As the
definition dictates, it is not sufficient that a similarity exists in both names, but that more
importantly, the over-all presentation, or in their essential, substantive and distinctive parts is
such as would likely MISLEAD or CONFUSE persons in the ordinary course of purchasing
the genuine article. A careful comparison of the way the trademark "B[ig] M[ac]" is being
used by plaintiffs-appellees and corporate name L.C. Big Mak Burger, Inc. by defendantsappellants, would readily reveal that no confusion could take place, or that the ordinary
purchasers would be misled by it. As pointed out by defendants-appellants, the plaintiffsappellees' trademark is used to designate only one product, a double decker sandwich sold
in a Styrofoam box with the "McDonalds" logo. On the other hand, what the defendantsappellants corporation is using is not a trademark for its food product but a business or
corporate name. They use the business name "L.C. Big Mak Burger, Inc." in their restaurant
business which serves diversified food items such as siopao, noodles, pizza, and
sandwiches such as hotdog, ham, fish burger and hamburger. Secondly, defendantsappellants' corporate or business name appearing in the food packages and signages are
written in silhouette red-orange letters with the "b" and "m" in upper case letters. Above the
words "Big Mak" are the upper case letter "L.C.". Below the words "Big Mak" are the words
"Burger, Inc." spelled out in upper case letters. Furthermore, said corporate or business
name appearing in such food packages and signages is always accompanied by the
company mascot, a young chubby boy named Maky who wears a red T-shirt with the upper
case "m" appearing therein and a blue lower garment. Finally, the defendants-appellants'
food packages are made of plastic material.

xxxx
xxx [I]t is readily apparent to the naked eye that there appears a vast difference in the
appearance of the product and the manner that the tradename "Big Mak" is being used and
presented to the public. As earlier noted, there are glaring dissimilarities between plaintiffsappellees' trademark and defendants-appellants' corporate name. Plaintiffs-appellees'
product carrying the trademark "B[ig] M[ac]" is a double decker sandwich (depicted in the
tray mat containing photographs of the various food products xxx sold in a Styrofoam box
with the "McDonald's" logo and trademark in red, bl[o]ck capital letters printed thereon xxx at
a price which is more expensive than the defendants-appellants' comparable food
products. In order to buy a "Big Mac", a customer needs to visit an air-conditioned
"McDonald's" restaurant usually located in a nearby commercial center, advertised and
identified by its logo - the umbrella "M", and its mascot "Ronald McDonald". A typical
McDonald's restaurant boasts of a playground for kids, a second floor to
accommodate additional customers, a drive-thru to allow customers with cars to make orders
without alighting from their vehicles, the interiors of the building are well-lighted, distinctly
decorated and painted with pastel colors xxx. In buying a "B[ig] M[ac]", it is necessary to
specify it by its trademark. Thus, a customer needs to look for a "McDonald's" and enter it
first before he can find a hamburger sandwich which carry the mark "Big Mac". On the other
hand, defendants-appellants sell their goods through snack vans xxxx
Anent the allegation that defendants-appellants are guilty of unfair competition,
We likewise find the same untenable.
Unfair competition is defined as "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 service, for those of another who has already established good will
for his similar good, business or services, or any acts calculated to produce the same result"
(Sec. 29, Rep. Act No. 166, as amended).
To constitute unfair competition therefore it must necessarily follow that there was malice and
that the entity concerned was in bad faith.
In the case at bar, We find no sufficient evidence adduced by plaintiffs-appellees that
defendants-appellants deliberately tried to pass off the goods manufactured by them for
those of plaintiffs-appellees. The mere suspected similarity in the sound of the defendantsappellants' corporate name with the plaintiffs-appellees' trademark is not sufficient evidence
to conclude unfair competition. Defendants-appellants explained that the name "M[ak]" in
their corporate name was derived from both the first names of the mother and father of
defendant Francis Dy, whose names are Maxima and Kimsoy. With this explanation, it is up
to the plaintiffs-appellees to prove bad faith on the part of defendants-appellants. It is a
settled rule that the law always presumes good faith such that any person who seeks to be
awarded damages due to acts of another has the burden of proving that the latter acted in
bad faith or with ill motive. 21
Petitioners sought reconsideration of the Court of Appeals' Decision but the appellate court denied
their motion in its Resolution of 11 July 2000.
Hence, this petition for review.
Petitioners raise the following grounds for their petition:

I. THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENTS' CORPORATE

NAME "L.C. BIG MAK BURGER, INC." IS NOT A COLORABLE IMITATION OF THE
MCDONALD'S TRADEMARK "BIG MAC", SUCH COLORABLE IMITATION BEING
AN ELEMENT OF TRADEMARK INFRINGEMENT.
A. Respondents use the words "Big Mak" as trademark for their products and not
merely as their business or corporate name.
B. As a trademark, respondents' "Big Mak" is undeniably and unquestionably similar
to petitioners' "Big Mac" trademark based on the dominancy test and the idem
sonans test resulting inexorably in confusion on the part of the consuming public.
II. THE COURT OF APPEALS ERRED IN REFUSING TO CONSIDER THE INHERENT
SIMILARITY BETWEEN THE MARK "BIG MAK" AND THE WORD MARK "BIG MAC" AS
AN INDICATION OF RESPONDENTS' INTENT TO DECEIVE OR DEFRAUD
FOR PURPOSES OF ESTABLISHING UNFAIR COMPETITION.22
Petitioners pray that we set aside the Court of Appeals' Decision and reinstate the RTC Decision.
In their Comment to the petition, respondents question the propriety of this petition as it allegedly
raises only questions of fact. On the merits, respondents contend that the Court of Appeals
committed no reversible error in finding them not liable for trademark infringement and unfair
competition and in ordering petitioners to pay damages.
The Issues
The issues are:
1. Procedurally, whether the questions raised in this petition are proper for a petition for review under
Rule 45.
2. On the merits, (a) whether respondents used the words "Big Mak" not only as part of the
corporate name "L.C. Big Mak Burger, Inc." but also as a trademark for their hamburger products,
and (b) whether respondent corporation is liable for trademark infringement and unfair competition. 23
The Court's Ruling
The petition has merit.
On Whether the Questions Raised in the Petition are Proper for a Petition for Review
A party intending to appeal from a judgment of the Court of Appeals may file with this Court a petition
for review under Section 1 of Rule 45 ("Section 1") 24 raising only questions of law. A question of law
exists when the doubt or difference arises on what the law is on a certain state of facts. There is a
question of fact when the doubt or difference arises on the truth or falsity of the alleged facts. 25
Here, petitioners raise questions of fact and law in assailing the Court of Appeals' findings on
respondent corporation's non-liability for trademark infringement and unfair competition. Ordinarily,
the Court can deny due course to such a petition. In view, however, of the contradictory findings of
fact of the RTC and Court of Appeals, the Court opts to accept the petition, this being one of the
recognized exceptions to Section 1.26 We took a similar course of action in Asia Brewery, Inc. v.

Court of Appeals27 which also involved a suit for trademark infringement and unfair competition in
which the trial court and the Court of Appeals arrived at conflicting findings.
On the Manner Respondents Used
"Big Mak" in their Business
Petitioners contend that the Court of Appeals erred in ruling that the corporate name "L.C. Big Mak
Burger, Inc." appears in the packaging for respondents' hamburger products and not the words "Big
Mak" only.
The contention has merit.
The evidence presented during the hearings on petitioners' motion for the issuance of a writ of
preliminary injunction shows that the plastic wrappings and plastic bags used by respondents for
their hamburger sandwiches bore the words "Big Mak." The other descriptive words "burger" and
"100% pure beef" were set in smaller type, along with the locations of branches. 28 Respondents'
cash invoices simply refer to their hamburger sandwiches as "Big Mak."29 It is respondents' snack
vans that carry the words "L.C. Big Mak Burger, Inc."30
It was only during the trial that respondents presented in evidence the plastic wrappers and bags for
their hamburger sandwiches relied on by the Court of Appeals.31 Respondents' plastic wrappers and
bags were identical with those petitioners presented during the hearings for the injunctive writ except
that the letters "L.C." and the words "Burger, Inc." in respondents' evidence were added above and
below the words "Big Mak," respectively. Since petitioners' 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 this petition.
On the Issue of Trademark Infringement
Section 22 ("Section 22) of Republic Act No. 166, as amended ("RA 166"), the law applicable to this
case,32defines trademark infringement as follows:
Infringement, what constitutes. Any person who [1] shall use, without the consent of the
registrant, anyreproduction, 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 withwhich 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 usedupon or 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.33
Petitioners base their cause of action under the first part of Section 22, i.e. respondents allegedly
used, without petitioners' consent, a colorable imitation of the "Big Mac" mark in advertising and
selling respondents' 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.
To establish trademark infringement, the following elements must be shown: (1) the validity of
plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its colorable

imitation by the alleged infringer results in "likelihood of confusion."34 Of these, it is the element
of likelihood of confusion that is the gravamen of trademark infringement.35
On the Validity of the "Big Mac"Mark
and McDonald's Ownership of such Mark
A mark is valid if it is "distinctive" and thus not barred from registration under Section 4 36 of RA 166
("Section 4").However, once registered, not only the mark's validity but also the registrant's
ownership of the mark is prima facie presumed.37
Respondents contend that of the two words in the "Big Mac" mark, it is only the word "Mac" that is
valid because the word "Big" is generic and descriptive (proscribed under Section 4[e]), and thus
"incapable of exclusive appropriation."38
The contention has no merit. The "Big Mac" mark, which should be treated in its entirety and not
dissected word for word,39 is neither generic nor descriptive. Generic marks are commonly used as
the name or description of a kindof goods,40 such as "Lite" for beer41 or "Chocolate Fudge" for
chocolate soda drink.42 Descriptive marks, on the other hand, convey the characteristics, functions,
qualities or ingredients of a product to one who has never seen it or does not know it exists, 43 such
as "Arthriticare" for arthritis medication.44 On the contrary, "Big Mac" falls underthe class of fanciful or
arbitrary marks as it bears no logical relation to the actual characteristics of the product it
represents.45 As such, it is highly distinctive and thus valid. Significantly, the trademark "Little Debbie"
for snack cakes was found arbitrary or fanciful.46
The Court also finds that petitioners have duly established McDonald's exclusive ownership of the
"Big Mac" mark. Although Topacio and the Isaiyas Group registered the "Big Mac" mark ahead of
McDonald's, Topacio, as petitioners disclosed, had already assigned his rights to McDonald's. 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.47 Indeed, we have held that registration in the Supplemental Register is not even a prima
facie evidence of the validity of the registrant's exclusive right to use the mark on the goods specified
in the certificate.48
On Types of Confusion
Section 22 covers two types of confusion arising from the use of similar or colorable imitation
marks, namely, confusion of goods (product confusion) and confusion of business (source or origin
confusion). In Sterling Products International, Incorporated v. Farbenfabriken Bayer
Aktiengesellschaft, et al.,49 the Court distinguished these two types of confusion, thus:
[Rudolf] Callman notes two types of confusion. The first is the confusion of goods "in which
event the ordinarily prudent purchaser would be induced to purchase one product in the
belief that he was purchasing the other." xxx The other is the confusion of business: "Here
though the goods of the parties are different, the defendant's 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."
Under Act No. 666,50 the first trademark law, infringement was limited to confusion of goods only,
when the infringing mark is used on "goods of a similar kind."51 Thus, no relief was afforded to the
party whose registered mark or its colorable imitation is used on different although related goods. To
remedy this situation, Congress enacted RA 166 on 20 June 1947. In defining trademark

infringement, Section 22 of RA 166 deleted the requirement in question and expanded its scope to
include such 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." 52 Thus, while there is
confusion of goods when the products are competing, confusion of business exists when the
products are non-competing but related enough to produce confusion of affiliation. 53
On Whether Confusion of Goods and
Confusion of Business are Applicable
Petitioners claim that respondents' use of the "Big Mak" mark on respondents' hamburgers results in
confusion of goods, particularly with respect to petitioners' hamburgers labeled "Big Mac." Thus,
petitioners alleged in their complaint:
1.15. Defendants have unduly prejudiced and clearly infringed upon the property rights of
plaintiffs in the McDonald's Marks, particularly the mark "B[ig] M[ac]". Defendants'
unauthorized acts are likely, and calculated, to confuse, mislead or deceive the public into
believing that the products and services offered by defendant Big Mak Burger, and the
business it is engaged in, are approved and sponsored by, or affiliated with,
plaintiffs.54 (Emphasis supplied)
Since respondents used the "Big Mak" mark on the same goods, i.e. hamburger sandwiches, that
petitioners' "Big Mac" mark is used, trademark infringement through confusion of goods is a proper
issue in this case.
Petitioners also claim that respondents' use of the "Big Mak" mark in the sale of hamburgers, the
same business that petitioners are engaged in, results in confusion of
business. Petitioners alleged in their complaint:
1.10. For some period of time, and without the consent of plaintiff McDonald's nor its
licensee/franchisee, plaintiff McGeorge, and in clear violation of plaintiffs' exclusive right to
use and/or appropriate the McDonald's marks, defendant Big Mak Burger acting through
individual defendants, has been operating "Big Mak Burger", a fast food restaurant business
dealing in the sale of hamburger and cheeseburger sandwiches, french fries and other food
products, and has caused to be printed on the wrapper of defendant's food products and
incorporated in its signages the name "Big Mak Burger", which is confusingly similar
to and/or is a colorable imitation of the plaintiff McDonald's mark "B[ig] M[ac]",
xxx. Defendant Big Mak Burger has thus unjustly created the impression that its
business is approved and sponsored by, or affiliated with, plaintiffs. xxxx
2.2 As a consequence of the acts committed by defendants, which unduly prejudice and
infringe upon the property rights of plaintiffs McDonald's and McGeorge as the real owner
and rightful proprietor, and the licensee/franchisee, respectively, of the McDonald's
marks, and which are likely to have caused confusion or deceived the public as to the
true source, sponsorship or affiliation of defendants' food products and restaurant
business, plaintiffs have suffered and continue to suffer actual damages in the form of injury
to their business reputation and goodwill, and of the dilution of the distinctive quality of the
McDonald's marks, in particular, the mark "B[ig] M[ac]".55 (Emphasis supplied)
Respondents admit that their business includes selling hamburger sandwiches, the same food
product that petitioners sell using the "Big Mac" mark. Thus, trademark infringement through
confusion of business is also a proper issue in this case.

Respondents assert that their "Big Mak" hamburgers cater mainly to the low-income group while
petitioners' "Big Mac" hamburgers cater to the middle and upper income groups. Even if this is true,
the likelihood of confusion of business remains, since the low-income group might be led to believe
that the "Big Mak" hamburgers are the low-end hamburgers marketed by petitioners. After all,
petitioners have the exclusive right to use the "Big Mac" mark.On the other hand, respondents would
benefit by associating their low-end hamburgers, through the use of the "Big Mak" mark, with
petitioners' high-end "Big Mac" hamburgers, leading to likelihood of confusion in the identity of
business.
Respondents further claim that petitioners use the "Big Mac" mark only on petitioners' double-decker
hamburgers, while respondents use the "Big Mak" mark on hamburgers and other products like
siopao, noodles and pizza. Respondents also point out that petitioners sell their Big Mac doubledeckers in a styrofoam box with the "McDonald's" logo and trademark in red, block letters at a price
more expensive than the hamburgers of respondents. In contrast, respondents sell their Big Mak
hamburgers in plastic wrappers and plastic bags. Respondents further point out that petitioners'
restaurants are air-conditioned buildings with drive-thru service, compared to respondents' mobile
vans.
These and other factors respondents cite cannot negate the undisputed fact that respondents use
their "Big Mak" mark on hamburgers, the same food product that petitioners' sell with the use of their
registered mark "Big Mac." Whether a hamburger is single, double or triple-decker, and whether
wrapped in plastic or styrofoam, it remains the same hamburger food product. Even respondents'
use of the "Big Mak" mark on non-hamburger food products cannot excuse their infringement of
petitioners' registered mark, otherwise registered marks will lose their protection under the law.
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 Court has recognized that the registered trademark owner
enjoys protection in product and market areas that are the normal potential expansion of his
business. Thus, the Court has declared:
Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or
similar products of the parties, but extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as
where prospective purchasers would be misled into thinking that the complaining party has
extended his business into the field (see 148 ALR 56 et seq; 53 Am Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the normal potential
expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).56 (Emphasis supplied)
On Whether Respondents' Use of the "Big Mak"
Mark Results in Likelihood of Confusion
In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test
and the holistic test.57 The dominancy test focuses on the similarity of the prevalent features of the
competing trademarks that might cause confusion. In contrast, the holistic test requires the court to
consider the entirety of the marks as applied to the products, including the labels and packaging,
in determining confusing similarity.
The Court of Appeals, in finding that there is no likelihood of confusion that could arise in the use
of respondents' "Big Mak" mark on hamburgers, relied on the holistic test. Thus, the Court of
Appeals ruled that "it is not sufficientthat a similarity exists in both name(s), but that more

importantly, the overall presentation, or in their essential, substantive and distinctive parts is such as
would likely MISLEAD or CONFUSE persons in the ordinary course of purchasing the genuine
article." The holistic test considers the two marks in their entirety, as they appear on the goods with
their labels and packaging. It is not enough to consider their words and compare the spelling and
pronunciation of the words.58
Respondents now vigorously argue that the Court of Appeals' application of the holistic test to this
case is correct and in accord with prevailing jurisprudence.
This Court, however, has relied on the dominancy test rather than the holistic test. The dominancy
test considers the dominant features in the competing marks in determining whether they are
confusingly similar. Under the dominancy test, courts give greater weight to the similarity of the
appearance of the product arising from theadoption of the dominant features of the registered mark,
disregarding minor differences.59 Courts will consider more the aural and visual impressions created
by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets and
market segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents,60 the Court ruled:
xxx 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 is itnecessary that the infringing label
should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing Co.,
191 F., 489, 495, citing Eagle White Lead Co. vs. Pflugh (CC) 180 Fed. 579). The question at
issue in cases of infringement of trademarks is whether the use of the marks involved would
be likely to cause confusion or mistakes in the mind of the public or deceive purchasers.
(Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; xxx) (Emphasis
supplied.)
The Court reiterated the dominancy test in Lim Hoa v. Director of Patents,61 Phil. Nut Industry,
Inc. v. Standard Brands Inc.,62 Converse Rubber Corporation v. Universal Rubber Products,
Inc.,63 and Asia Brewery, Inc. v. Court of Appeals.64 In the 2001 case of Societe Des Produits
Nestl, S.A. v. Court of Appeals,65 the Court explicitly rejected the holistic test in this wise:
[T]he totality or holistic test is contrary to the elementary postulate of the law on
trademarks and unfair competition that confusing similarity is to be determined on the
basis of visual, aural, connotative comparisons and overall impressions engendered by the
marks in controversy as they are encounteredin the realities of the marketplace. (Emphasis
supplied)
The test of dominancy is now explicitly incorporated into law in Section 155.1 of the Intellectual
Property Code which defines infringement as the "colorable imitation of a registered mark xxx or
a dominant feature thereof."
Applying the dominancy test, the Court finds that respondents' use of the "Big Mak" mark results in
likelihood of confusion. First, "Big Mak" sounds exactly the same as "Big Mac." Second, the first
word in "Big Mak" is exactly the same as the first word in "Big Mac." Third, the first two letters in
"Mak" are the same as the first two letters in "Mac." Fourth, the last letter in "Mak" while a "k" sounds
the same as "c" when the word "Mak" is pronounced. Fifth, in Filipino, the letter "k" replaces "c" in
spelling, thus "Caloocan" is spelled "Kalookan."

In short, aurally the two marks are the same, with the first word of both marks phonetically the same,
and the second word of both marks also phonetically the same. Visually, the two marks
have both two words and six letters, with the first word of both marks having the same letters and the
second word having the same first two letters. In spelling, considering the Filipino language, even
the last letters of both marks are the same.
Clearly, respondents have adopted in "Big Mak" not only the dominant but also almost all the
features of "Big Mac." Applied to the same food product of hamburgers, the two marks will likely
result in confusion in the public mind.
The Court has taken into account the aural effects of the words and letters contained in the marks
in determining the issue of confusing similarity. Thus, in Marvex Commercial Co., Inc. v. Petra
Hawpia & Co., et al.,66 the Court held:
The following random list of confusingly similar sounds in the matter of trademarks, culled
from Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will reinforce our view that
"SALONPAS" and "LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop";
"Jantzen" and "Jass-Sea"; "Silver Flash" and "Supper Flash"; "Cascarete" and "Celborite";
"Celluloid" and "Cellonite"; "Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe"
and "Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo". Leon Amdur, in his book "TradeMark Law and Practice", pp. 419-421, cities, as coming within the purview of the idem
sonans rule, "Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos", and "SevenUp" and "Lemon-Up". In Co Tiong vs. Director of Patents, this Court unequivocally said that
"Celdura" and "Cordura" are confusingly similar in sound; this Court held in Sapolin Co. vs.
Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement of the trademark
"Sapolin", as the sound of the two names is almost the same. (Emphasis supplied)
Certainly, "Big Mac" and "Big Mak" for hamburgers create even greater confusion, not only aurally
but also visually.
Indeed, 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 a "k."
Petitioners' aggressive promotion of the "Big Mac" mark, as borne by their advertisement expenses,
has built goodwill and reputation for such mark making it one of the easily recognizable marks in the
market today. Thisincreases the likelihood that consumers will mistakenly associate petitioners'
hamburgers and business with those of respondents'.
Respondents' inability to explain sufficiently how and why they came to choose "Big Mak" for their
hamburger sandwiches indicates their intent to imitate petitioners' "Big Mac" mark. Contrary to the
Court of Appeals' finding, respondents' claim that their "Big Mak" mark was inspired by the first
names of respondent Dy's mother (Maxima) and father (Kimsoy) is not credible. As petitioners well
noted:
[R]espondents, particularly Respondent Mr. Francis Dy, could have arrived at a more
creative choice for a corporate name by using the names of his parents, especially since he
was allegedly driven by sentimental reasons. For one, he could have put his father's name
ahead of his mother's, as is usually done in this patriarchal society, and derived letters from
said names in that order. Or, he could have taken an equalnumber of letters (i.e., two) from
each name, as is the more usual thing done. Surely, the more plausible reason behind
Respondents' choice of the word "M[ak]", especially when taken in conjunction with the word

"B[ig]", was their intent to take advantage of Petitioners' xxx "B[ig] M[ac]" trademark, with
their allegedsentiment-focused "explanation" merely thought of as a
convenient, albeit unavailing, excuse or defense for such an unfair choice of name. 67
Absent proof that respondents' adoption of the "Big Mak" mark was due to honest mistake or was
fortuitous,68 the inescapable conclusion is that respondents adopted the "Big Mak" mark to "ride on
the coattails" of the more established "Big Mac" mark.69 This saves respondents much of the
expense in advertising to create market recognition of their mark and hamburgers. 70
Thus, we hold that confusion is likely to result in the public mind. We sustain petitioners' claim of
trademark infringement.
On the Lack of Proof of
Actual Confusion
Petitioners' failure to present proof of actual confusion does not negate their claim of trademark
infringement. As noted in American Wire & Cable Co. v. Director of Patents,71 Section
22 requires the less stringent standard of "likelihood of confusion" only. While proof
of actual confusion is the best evidence of infringement, its absence is inconsequential. 72
On the Issue of Unfair Competition
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
xxxx
Any person who will employ deception or any other means contrary to good faith by which
he 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 such goodwill, or who shall commit any acts
calculated to produce said result, shall be guilty of unfair competition, and shall be subject to
an action therefor.
In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or the devices or words thereon, or
in any feature of their appearance, which would be likely to influence purchasers to believe
that the goods offered are those of a manufacturer or dealer, other
than the actual manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shalldeceive the public and defraud another of his legitimate trade,
or any subsequent vendor of such goods orany agent of any vendor engaged in selling such
goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means calculated to
induce the false belief that such person is offering the services of another who has identified
such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated to discredit the
goods, business or services of another. (Emphasis supplied)
The essential elements of an action for unfair competition are (1) confusing similarity in the general
appearance of the goods, and (2) intent to deceive the public and defraud a competitor.74 The
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. The intent to deceive and defraud
may be inferred from the similarity of the appearance of the goods as offered for sale to the
public.75 Actual fraudulent intent need not be shown.76
Unfair competition is broader than trademark infringement and includes passing off goods with or
without trademark infringement. Trademark infringement is a form of unfair competition. 77 Trademark
infringement 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.
There can be trademark infringement without unfair competition as 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.78
To support their claim of unfair competition, petitioners allege that respondents fraudulently passed
off their hamburgers as "Big Mac" hamburgers. Petitioners add that respondents' fraudulent intent
can be inferred from the similarity of the marks in question. 79
Passing off (or palming off) takes place where the 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.80 Thus, the defendant gives his goods the
general appearance of the goods of his competitor with the intention of deceiving the public that the
goods are those of his competitor.
The RTC described the respective marks and the goods of petitioners and respondents in this wise:
The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its double decker hamburger
sandwich. The packaging material is a styrofoam box with the McDonald's logo and
trademark in red with block capital letters printed on it. All letters of the "B[ig] M[ac]" mark are
also in red and block capital letters. On the other hand, defendants' "B[ig] M[ak]" script print
is in orange with only the letter "B" and "M" being capitalized and the packaging material
is plastic wrapper. xxxx Further, plaintiffs' logo and mascot are the umbrella "M" and "Ronald
McDonald's", respectively, compared to the mascot of defendant Corporation which is a
chubby boy called "Macky" displayed or printed between the words "Big" and
"Mak."81 (Emphasis supplied)
Respondents point to these dissimilarities as proof that they did not give their hamburgers the
general appearance of petitioners' "Big Mac" hamburgers.
The dissimilarities in the packaging are minor compared to the stark similarities in the words that
give respondents' "Big Mak" hamburgers the general appearance of petitioners' "Big Mac"
hamburgers. Section 29(a) expressly provides that the similarity in the general appearance of the
goods may be in the "devices or words" used on the wrappings. Respondents have applied on their
plastic wrappers and bags almost the same wordsthat petitioners use on their styrofoam box. What
attracts the attention of the buying public are 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." Respondents' goods are hamburgers which are also the goods of petitioners.
If respondents sold egg sandwiches only instead of hamburger sandwiches, their use of the "Big
Mak" mark would not give their goods the general appearance of petitioners' "Big Mac" hamburgers.
In such case, there is only trademark infringement but no unfair competition. However, since
respondents chose to apply the "Big Mak" mark on hamburgers, just like petitioner's use of the "Big
Mac" mark on hamburgers, respondents have obviously clothed their goods with the general
appearance of petitioners' goods.
Moreover, there is no notice to the public that the "Big Mak" hamburgers are products of "L.C. Big
Mak Burger, Inc." Respondents introduced during the trial plastic wrappers and bags with the words
"L.C. Big Mak Burger, Inc." to inform the public of the name of the seller of the
hamburgers. However, petitioners introduced during the injunctive hearings plastic wrappers and
bags with the "Big Mak" mark without the name "L.C. Big Mak Burger, Inc." Respondents' 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. As earlier stated, we cannot consider respondents' evidence since petitioners' complaint
was based on facts existing before and during the injunctive hearings.
Thus, there is actually no notice to the public that the "Big Mak" hamburgers are products of "L.C.
Big Mak Burger, Inc." and not those of petitioners who have the exclusive right to the "Big Mac"
mark. This clearly shows respondents' intent to deceive the public. Had respondents' placed a notice
on their plastic wrappers and bags that the hamburgers are sold by "L.C. Big Mak Burger, Inc.", then
they could validly claim that they did not intend to deceive the public. In such case, there is only
trademark infringement but no unfair competition.82 Respondents, however, did not give such notice.
We hold that as found by the RTC, respondent corporation is liable for unfair competition.
The Remedies Available to Petitioners
Under Section 2383 ("Section 23") in relation to Section 29 of RA 166, a plaintiff who successfully
maintains trademark infringement and unfair competition claims is entitled to injunctive and monetary
reliefs. Here, the RTC did not err in issuing the injunctive writ of 16 August 1990 (made permanent in
its Decision of 5 September 1994) and in ordering the payment of P400,000 actual damages in favor
of petitioners. The injunctive writ is indispensable to prevent further acts of infringement by
respondent corporation. Also, the amount of actual damages is a reasonable percentage (11.9%) of
respondent corporation's gross sales for three (1988-1989 and 1991) of the six years (1984-1990)
respondents have used the "Big Mak" mark.84
The RTC also did not err in awarding exemplary damages by way of correction for the public
good85 in view of the finding of unfair competition where intent to deceive the public is essential. The
award of attorney's fees and expenses of litigation is also in order.86
WHEREFORE, we GRANT the instant petition. We SET ASIDE the Decision dated 26 November
1999 of the Court of Appeals and its Resolution dated 11 July 2000 and REINSTATE the Decision
dated 5 September 1994 of the Regional Trial Court of Makati, Branch 137, finding respondent L.C.
Big Mak Burger, Inc. liable for trademark infringement and unfair competition.
SO ORDERED.

7. Habana vs Robles GR # 131522 July 19, 1999

8. Phil Pharmawealth, Inc. vs Pfizer, Inc GR # 167715 Nov. 17, 2010
9. Republic of the Philippines vs. Vicente Roxas GR # 157988 Dec. 11, 2013
Provident Tree Farms, Inc vs Vicente Roxas GR # 160640

FOR THURSDAY SPECIAL COMMERCIAL LAW

FOR UPLOAD:
Transfield Philippines Inc. vs. Luzon Hydro Corp (2004)
FACTS:
Transfield Philippines (Transfield) entered into a turn-key contract with Luzon Hydro Corp.
(LHC).Under the contract, Transfield were to construct a hydro-electric plants in Benguet
and Ilocos. Transfield was given the sole responsibility for the design, construction,

commissioning, testing and completion of the Project. The contract provides for a period for
which the project is to be completed and also allows for the extension of the period provided
that the extension is based on justifiable grounds such as fortuitous event. In order to
guarantee performance by Transfield, two stand-by letters of credit were required to be
opened. During the construction of the plant, Transfield requested for extension of time
citing typhoon and various disputes delaying the construction. LHC did not give due course
to the extension of the period prayed for but referred the matter to arbitration committee.
Because of the delay in the construction of the plant, LHC called on the stand-by letters of
credit because of default. However, the demand was objected by Transfield on the ground
that there is still pending arbitration on their request for extension of time.
ISSUE:
Whether or not LHC can collect from the letters of credit despite the pending
arbitration case
RULING:
Transfields argument that any dispute must first be resolved by the parties,
whether through negotiations or arbitration, before the beneficiary is entitled to call on the
letter of credit in essence would convert the letter of credit into a mere guarantee.
The independent nature of the letter of credit may be: (a) independence in toto where
the credit is independent from the justification aspect and is a separate obligation from the
underlying agreement like for instance a typical standby; or (b) independence may be only
as to the justification aspect like in a commercial letter of credit or repayment standby,
which is identical with the same obligations under the underlying agreement. In both cases
the payment may be enjoined if in the light of the purpose of the credit the payment of the
credit would constitute fraudulent abuse of the credit.
The engagement of the issuing bank is to pay the seller or beneficiary of the credit
once the draft and the required documents are presented to it. The so-called independence
principle assures the seller or the beneficiary of prompt payment independent of any
breach of the main contract and precludes the issuing bank from determining whether the
main contract is actually accomplished or not. Under this principle, banks assume no
liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or
legal effect of any documents, or for the general and/or particular conditions stipulated in
the documents or superimposed thereon, nor do they assume any liability or responsibility
for the description, quantity, weight, quality, condition, packing, delivery, value or existence
of the goods represented by any documents, or for the good faith or acts and/or omissions,
solvency, performance or standing of the consignor, the carriers, or the insurers of the
goods, or any other person whomsoever.

PNB vs. San Miguel Corporation GR 186063 (2014)

FACTS:
San Miguel Corporation entered into an Exclusive Dealership Agreement with a certain
Goroza wherein the latter was given by SMC the right to trade, deal, market or otherwise
sell its various beer products. Goroza applied for a credit line with SMC, but one of the
requirements for the credit line was a letter of credit. Thus, Goroza applied for and was
granted a letter of credit by the PNB in the amount of two million pesos (P2,000,000.00).
Under the credit agreement, the PNB has the obligation to release the proceeds of Goroza's
credit line to SMC upon presentation of the invoices and official receipts of Goroza's
purchases of SMC beer products to the PNB, Butuan Branch. Goroza availed of his credit
line with PNB and started selling SMC's beer products. Goroza applied for an additional
credit line with the PNB. The latter granted Goroza a one (1) year revolving credit line in
the amount not exceeding two million four hundred thousand pesos (P2,400,000.00). Thus,
Goroza's total credit line reached four million four hundred thousand pesos (P4,400,000.00)
Initially, Goroza was able to pay his credit purchases with SMC. However, Goroza started to
become delinquent with his accounts. Demands to pay the amount were made by SMC
against Goroza and PNB, but neither of them paid. Thus, SMC filed a Complaint for
collection of sum of money against PNB and Goroza with the RTC. RTC ordered to pay
SMC.
ISSUE:
Whether or not PNB is liable under the letter of credit it issued
RULING:
PNB cannot evade responsibility on the sole ground that the RTC judgment found
Goroza liable and ordered him to pay the amount sought to be recovered by SMC. PNB's
liability, if any, under the letter of credit is yet to be determined.
In a letter of credit transaction, such as in this case, where the credit is stipulated as
irrevocable, there is a definite undertaking by the issuing bank to pay the beneficiary
provided that the stipulated documents are presented and the conditions of the credit are
complied with. Precisely, the independence principle liberates the issuing bank from the
duty of ascertaining compliance by the parties in the main contract. As the principle's
nomenclature clearly suggests, the obligation under the letter of credit is independent of the
related and originating contract. In brief, the letter of credit is separate and distinct from
the underlying transaction.