Atty.

Ferrer
Torts and Damages

A. Definition of trademarks

Section 121.1, IPC

Mark means any visible sign capable of distinguishing the goods (trademark) or
services (service name) of an enterprise and shall include a stamped or marked container of
goods; (Sec. 38, R. A. No. 166a)

It is to be pointed out that a trademark refers to a word, name, symbol, emblem, sign or device
or any combination thereof adopted and used by a merchant to identify, and distinguish from
others, his goods of commerce. It is basically an intellectual creation that is susceptible to
ownership and, consistently therewith, gives rise to its own elements of jus posidendi, jus
utendi, jus fruendi, jus disponendi, and jus abutendi, along with the applicable jus lex,
comprising that ownership. The incorporeal right, however, is distinct from the property in the
material object subject to it. Ownership in one does not necessarily vest ownership in the other.
Thus, the transfer or assignment of the intellectual property will not necessarily constitute a
conveyance of the thing it covers, nor would a conveyance of the latter imply the transfer or
assignment of the intellectual right. Distilleria Washington v. CA, 263 SCRA 303, G.R. No.
120961 [17 October 1996]

B. Functions of trademarks

The function of a trademark is to point distinctively, either by its own meaning or by

association, to the origin or ownership of the wares to which it is applied.

The application of the doctrine of secondary meaning could nevertheless be fully

sustained because, in any event, by respondent's long and exclusive use of said phrase
with reference to his products and his business, it has acquired a proprietary connotation. This
doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with
reference to an article on the market, because geo graphically or otherwise descriptive, might
nevertheless have been used so long and so exclusively by one producer with reference to his
article that, in that trade and to that branch of the purchasing public, the word or phrase has
come to mean that the article was his product. Ang v. Teodoro, 74 Phil. 50 [14 December
1942]

The objects of a trademark are to point out distinctly the origin or ownership of the article
to which it is affixed, to secure to him, who has been instrumental in bringing into market a
superior article of merchandise, the fruit of his industry and skill, and to prevent fraud and
imposition.

The validity of a cause for infringement is predicated upon colorable imitation. The
phrase colorable imitation denotes such a close or ingenious imitation as to be calculated to
deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary
purchaser giving such attention as a purchaser usually gives, and to cause him to purchase the
one supposing it to be the other. Etepha v. Director of Patents, 16 SCRA 495, G.R. No. L-
20635 [31 March 1966]
 Atty. Ferrer
Torts and Damages

A trademark is defined under R.A. 166, the Trademark Law, as including any word,
name, symbol, emblem, sign or device or any combination thereof adopted and used by a
manufacturer or merchant to identify his goods and distinguish them from those manufactured,
sold or dealt in by others. This definition has been simplified in R.A. No. 8293, the Intellectual
Property Code of the Philippines, which defines a trademark as any visible sign capable of
distinguishing goods. In Philippine jurisprudence, the function of a trademark is to point out
distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has
been instrumental in bringing into the market a superior article of merchandise, the fruit of his
industry and skill; to assure the public that they are procuring the genuine article; to prevent
fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior
and different article as his product.

Modern authorities on trademark law view trademarks as performing three distinct

functions:
1. They indicate origin or ownership of the articles to which they are attached;
2. They guarantee that those articles come up to a certain standard of quality; and
3. They advertise the articles they symbolize.

Today, the trademark is not merely a symbol of origin and goodwill; it is often the
most effective agent for the actual creation and protection of goodwill. It imprints upon the public
mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further
satisfaction. In other words, the mark actually sells the goods. The mark has become the silent
salesman, the conduit through which direct contact between the trademark owner and the
consumer is assured. It has invaded popular culture in ways never anticipated that it
has become a more convincing selling point than even the quality of the article to which it refers.
Mirpuri v. Court of Appeals, 318 SCRA 516 (1999)

D. How Are Marks Acquired?

Section 122, IPC

How Marks are Acquired The rights in a mark shall be acquired through registration made
validly in accordance with the provisions of this law (Sec. 2-A, R. A. No. 166a).

Contrast this with Sec. 2-A of Republic Act No. 166 and cases decided under R. A. No, 166:

Ownership of trademarks, tradenames and service marks; how acquired.Anyone who

lawfully produces or deals in merchandise of any kind or who engages in any lawful business,
or who renders any lawful service in commerce, by actual use thereof in manufacture or trade,
in business, and in the service rendered, may appropriate to his exclusive use a trademark, a
tradename, or a service mark not so appropriated by another, to distinguish his merchandise,
business or service from the merchandise, business or service of others. The ownership or
possession of a trademark, trade name, service mark, heretofore or hereafter appropriated, as
in this section provided, shall be recognized and protected in the same manner and to the same
Atty. Ferrer
Torts and Damages

extent as are other property rights known to the law. (As amended by R.A. No. 638)

The right to register trademark is based on ownership. When the applicant is not the
owner of the trademark being applied for, he has no right to apply for the registration of the
same. Under the Trademark Law only the owner of the trademark, trade name or service mark
used to distinguish his goods, business or service from the goods, business or service of others
is entitled to register the same.

Ownership of a trademark is not acquired by the mere fact of registration

alone. Registration merely creates a prima facie presumption of the validity of the registration, of
the registrants ownership of the trademark and of the exclusive right to the use
thereof. Registration does not perfect a trademark right. As conceded itself by petitioner,
evidence may be presented to overcome the presumption. Prior use by one will controvert a
claim of legal appropriation by subsequent users. Unno Commercial Enterprises v. General
Milling Corp., 120 SCRA 904, G.R. No. L-28554 [28 February 1983]

A fundamental principle of Philippine Trademarks Law is that actual use in commerce in

the Philippines is a prerequisite to the acquisition of ownership over a trademark or a
tradename.

A rule widely accepted and firmly entrenched because it has come down through the
years is that actual use in commerce or business is a prerequisite to the acquisition of the right
of ownership over a trademark.

Adoption alone of a trademark would not give exclusive right thereto. Such right grows
out of their actual use. Adoption is not use. One may make advertisements, issue circulars, give
out price lists on certain goods; but these alone would not give exclusive right of use. For
trademark is a creation of use. The underlying reason for all these is that purchasers have come
to understand the mark as indicating the origin of the wares. Flowing from this is the traders
right to protection in the trade he has built up and the goodwill he has accumulated from use of
the trademark.

In fact, a prior registrant cannot claim exclusive use of the trademark unless it uses it in
commerce.

The mere origination or adoption of a particular trade name without actual use thereof in
the market is insufficient to give any exclusive right to its use even though such adoption is
publicly declared, such as by use of the name in advertisements, circulars, price lists, and on
signs and stationery.

Conditions which must exist before any trademark owner can claim and be afforded
right:
1. The mark must be internationally known or well known;
2. The subject of the right must be a trademark, not a patent or copyright or anything
else;
Atty. Ferrer
Torts and Damages

3. The mark must be for use in the same or similar kinds of goods; and
4. The person claiming must be the owner of the mark (The Parties Convention
Commentary on the Paris Convention.Article by Dr. Bogach, Director General of the
World Intellectual Property Organization, Geneva, Switzerland,1985) Kabushi
Kaisha Isetan v. IAC, 203 SCRA 583, G.R. No. 75420 [15 November 1991]

A fundamental principle of Philippine Trademark Law is that actual use in commerce in

the Philippines is a prerequisite to the acquisition of ownership over a trademark or
a tradename.

It may be added in this connection that albeit petitioners are holders of certificate of
registration in the Philippines of their symbols as admitted by private respondent, the fact of
exclusive ownership cannot be made to rest solely on these documents since dominion over
trademarks is not acquired by the mere fact of registration alone and does not perfect a
trademark right. Philip Morris v. CA, 224 SCRA 576, G.R. No. 91332 [16 July 1993]
Philip Morris v. Fortune Tobacco, G.R. No. 158589, 27 June 2006

Under the provisions of the former trademark law, R.A. No. 166, as amended, which was in
effect up to December 31, 1997, hence, the law in force at the time of respondent's application
for registration of trademark, the root of ownership of a trademark is actual use in commerce.
Section 2 of said law requires that before a trademark can be registered, it must have been
actually used in commerce and service for not less than two months in the Philippines prior to
the filing of an application for its registration.

Registration, without more, does not confer upon the registrant an absolute right to the
registered mark. The certificate of registration is merely a prima facie proof that the registrant is
the owner of the registered mark or trade name. Evidence of prior and continuous use of the
mark or trade name by another can overcome the presumptive ownership of the registrant and
may very well entitle the former to be declared owner in an appropriate case.

Ownership of a mark or trade name may be acquired not necessarily by registration but
by adoption and use in trade or commerce. As between actual use of a mark without
registration, and registration of the mark without actual use thereof, the former prevails over the
latter. For a rule widely accepted and firmly entrenched, because it has come down through the
years, is that actual use in commerce or business is a prerequisite to the acquisition of the right
of ownership.

While the present law on trademarks has dispensed with the requirement of prior actual
use at the time of registration, the law in force at the time of registration must be applied, and
thereunder it was held that as a condition precedent to registration of trademark, trade name or
service mark, the same must have been in actual use in the Philippines before the filing of
the application for registration.

Trademark is a creation of use and therefore actual use is a prerequisite to exclusive

ownership and its registration with the Philippine Patent Office is a mere administrative
Atty. Ferrer
Torts and Damages

confirmation of the existence of such right.

By itself, registration is not a mode of acquiring ownership. When the applicant is not the
owner of the trademark being applied for, he has no right to apply for registration of the same.
Registration merely creates a prima facie presumption of the validity of the registration, of the
registrant's ownership of the trademark and of the exclusive right to the use thereof.

Such presumption, just like the presumptive regularity in the performance of official functions, is
rebuttable and must give way to evidence to the contrary. Shangrila v. DCCI, G.R. 159938, 31
March 2006

Shangrila v. DCCI, G.R. 159938, 22 January 2007