PART TWO: The Law on Patents, Utility Models and Industrial Designs

IX. Voluntary Licensing

Voluntary licensing is the grant by the patent owner to a third person of the right to exploit the
patented invention. (Sec. 85,IPC)

The law requires certain provisions to be stated in voluntary license contracts, as follows:

(a) That Philippine law shall govern the interpretation of the contract.
(b) That in the event of litigation, the venue shall be the proper court in the place where the
licensee has it principal office;
(c) That continued access to improvements in the licensed technology shall be made available
to the licensee during the term of the contract;
(d) That arbitration, if stipulated, shall be conducted in accordance with the procedure
provided in the Arbitration law of the Philippines, or the rules of the United Nations
Commission on International Trade Law (UNCITRAL), or the rules of conciliation and
arbitration of the International Chamber of Commerce (ICC);
(e) That the place of arbitration shall be the Philippines or any neutral country; and
(f) That Philippine taxes due on all payments under the contract shall be borne by the
licensor. (Sec. 88, IPC)

Certain clauses are also prohibited in voluntary license because they are deemed prima facie to
have an adverse effect on competition and trade. Examples are:

(a) Obliging the licensee to acquire goods, materials and other technology only from a specific
source;
(b) Obliging the licensee to permanently employ personnel indicated by the licensor;
(c) Where the right to fix the selling prices of the licensed products is reserved by the licensor;
(d) Where the volume and structure of production of the licensed products are restricted. (Sec.
87, IPC)

Effect of non-conformity of the provisions of Secs. 87 & 88 It will automatically render the
technology transfer arrangement unenforceable, unless the same is approved and registered
with the Documentation, Information and Technology Transfer Bureau as an exceptional or
meritorious case under Section 91 (when substantial benefits will accrue to the economy).

Voluntary license contracts are not required to be registered with DITT unless they do not
conform with Secs. 87 & 88.

In the absence of any provision to the contrary in the technology transfer arrangement, the
grant of a license shall not prevent the licensor from granting further licenses to third person
nor from exploiting the subject matter of the technology transfer arrangement himself. (Sec.
89, IPC)

The licensee shall be entitled to exploit the subject matter of the technology transfer
arrangement during the whole term of the technology transfer arrangement. (Sec. 90, IPC)

X. Compulsory Licensing

Compulsory Licensing is the grant by the Director of Legal Affairs of a license to exploit a
patented invention, even without the agreement of the patent owner, in favor of any person
who has shown his capability to exploit the invention, under any of the following
circumstances:

(a) When there is a national emergency or other circumstances of extreme urgency; or

(b) Where the public interest, in particular, national security, nutrition, health or the
development of other vital sectors of the national economy as determined by the
appropriate agency of the Government, so requires; or

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 (c) Where a judicial or administrative body has determined that the manner of exploitation by
the owner of the patent or his licensee is anti-competitive; or
(d) In case of public non-commercial use of the patent by the patentee, without satisfactory
reason;
(e) If the patented invention is not being worked in the Philippines on a commercial scale,
although capable of being worked, without satisfactory reason: Provided, That the
importation of the patented article shall constitute working or using the patent. Or
(f) Grounds of compulsory license based on interdependence of patents - If the invention
protected by a patent within the country (the second patent) cannot be worked without
infringing another patent (the first patent) granted on a prior application or benefiting
from an earlier priority, subject to certain conditions. (Sec. 93 and 97, IPC)

The legislative intent in the grant of a compulsory license was not only to afford others an
opportunity to provide the public with the quantity of the patented product, but also to prevent
the growth of monopolies. (Smith Kline vs. CA, G.R. No. 12167, October 23, 2001)

Compulsory license is not tantamount to deprivation of property without just compensation -

Even if other entities like private respondent are subsequently allowed to manufacture, use and
sell the patented invention by virtue of a compulsory license, petitioner as owner of the patent
would still receive remuneration for the use of such product in the form of royalties. (Smith
Kline vs. CA, G.R. No. 12167, October 23, 2001)

Requirement to Obtain a License on Reasonable Commercial Terms. - The license will only be
granted after the petitioner has made efforts to obtain authorization from the patent owner on
reasonable commercial terms and conditions but such efforts have not been successful within a
reasonable period of time. (Sec. 95.1, IPC). However, this requirement shall not apply in the
following cases:

(a) Where the petition for compulsory license seeks to remedy a practice determined after
judicial or administrative process to be anti-competitive;
(b) In situations of national emergency or other circumstances of extreme urgency;
(c) In cases of public non-commercial use. (Sec. 95.2, IPC)

Licensees Exemption from Liability Any person who works a patented product, substance
and/or process under a compulsory license, shall be free from any liability for infringement;
Provided: That in case of voluntary licensing, no collusion with licensor is proven. This is
without prejudice to rightful patent owner to recover from licensor whatever he may receive as
royalties under the license. (Sec. 102, IPC)

PART FOUR: The Law on Trademarks, Service Marks and Trade Names

I. Definitions; Principles

Mark is any visible sign capable of distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or marked container of goods. (Sec. 121.1,
IPC)

Mark could be a word mark (the use of the name of a person, or any fanciful or arbitrary
word), composite mark (consisting of a combination of a word or letter and a device), device
mark (which may be a geometrical figure, a stylized rendering of the alphabet or a
representation of any object).

Marks may be creatively designed or coined.

Collective mark - means any visible sign designated as such in the application for registration
and capable of distinguishing the origin or any other common characteristic, including the
quality of goods or services of different enterprises which use the sign under the control of the
registered owner of the collective mark. (Sec.121.2,IPC)

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 Trade name is the name or designation identifying or distinguishing an enterprise. (Sec.
121.333, IPC) A trade name refers to the business and its goodwill; a trademark refers to the
goods. (Canon Kabushiki Kaisha vs. CA, G.R. No. 120900, July 20, 2000)

Old definition of Marks - A trademark has been generally defined as "any word, name, symbol
or device adopted and used by a manufacturer or merchant to identify his goods and
distinguish them from those manufactured and sold by others. (Societe des Produits vs. CA,
G.R. No. 112012, April 4, 2001)

Functions of a trademark - (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. (Mirpuri vs. CA, G.R. No. 114508, Nov. 19,
1999).

The rights in a mark shall be acquired through registration made validly in accordance with the
provisions of the law. (Sec. 122, IPC)

The right to register trademarks, tradenames and service marks by any person, corporation,
partnership or association domiciled in the Philippines or in any foreign country, is based on
ownership, and the burden is upon the applicant to prove such ownership. (Marvex
Commercial Co., Inc. v. Petra Hawpia & Co., et al., L-16297, Dec. 22, 1926) Where the
applicant was not the owner of the trademark being applied for, he had no right to apply for
registration of the same. The right to register trademarks, tradenames and service marks is
based on ownership. (Operators Inc. vs. Director of Patenst, L-17901, Oct. 29, 1965)

However, 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. (Shangri-la Intl Hotel vs. DGC,
G.R. No. 159938, March 31, 2006) Such that, a certificate of registration of a mark shall be
prima facie evidence of the validity of the registration, the registrant's ownership of the mark,
and of the registrant's exclusive right to use the same in connection with the goods or services
and those that are related thereto specified in the certificate. (Sec. 138, IPC)

Ownership of a mark or trade name may be acquired not necessarily by registration but by
adoption and use in trade or commerce. As between actual use of a mark without registration,
and registration of the mark without actual use thereof, the former prevails over the latter. For
a rule widely accepted and firmly entrenched, because it has come down through the years, is
that actual use in commerce or business is a pre-requisite to the acquisition of the right of
ownership. (Emerald Garments Mfg. Corp. v. Court of Appeals, G.R. No. 100098, December
29, 1995, 251 SCRA 600; Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, G.R. No. L-19906, April 30, 1969, 27 SCRA 1214)

Thus, the right to register trademark is based on ownership and a mere distributor of a product
bearing a trademark, even if permitted to use said trademark, has no right to and cannot
register the said trademark. (Gabriel vs. Perez, G.R. No. L-24075, Jan. 31, 1974) The term
owner does not include the importer of the goods bearing the trademark, trade name, service
mark, or other mark of ownership, unless such importer is actually the owner thereof in the
country from which the goods are imported. A local importer, however, may make application
for the registration of a foreign trademark, trade name or service mark if he is duly authorized
by the actual owner of the name or other mark of ownership. (Unno vs. General Milling, G.R.
No. L-28554, Feb. 28, 1983)

Trademark vs. tradename Marks are protected upon registration while trade name may be
protected even without registration. (Sec. 165, IPC) Thus, any subsequent use of the trade
name by a third party, whether as a trade name or a mark or collective mark, or any such use of
a similar trade name or mark, likely to mislead the public, shall be deemed unlawful. (Sec.
165.2, IPC)

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 It is a property right - The ownership of a trademark or tradename is a property right which the
owner is entitled to protect "since there is damage to him from confusion or reputation or
goodwill in the mind of the public as well as from confusion of goods. The modern trend is to
give emphasis to the unfairness of the acts and to classify and treat the issue as fraud.
(Converse Rubber vs. Universal Rubber, G.R. No. L-27906, Jan. 8, 1987)

The protection of trademarks is the laws recognition of the psychological function of symbols.
If it is true that we live by symbols, it is no less true that we purchase goods by them. A trade-
mark is a merchandising short-cut which induces a purchaser to select what he wants, or what
he has been led to believe what he wants. The owner of a mark exploits this human propensity
by making every effort to impregnate the atmosphere of the market with the drawing power of
a congenial symbol. Whatever the means employed, the aim is the same - to convey through
the mark, in the minds of potential customers, the desirability of the commodity upon which it
appears. Once this is attained, the trade-mark owner has something of value. If another
poaches upon the commercial magnetism of the symbol he has created, the owner can obtain
legal redress. (Philip Morris Inc. vs. Fortune Tobacco Corp., G.R. No. 158589, June 27,
2006)

Is prior use a requirement for registration? No, prior use is no longer a condition for filing or
registration. However, the applicant or registrant shall file a declaration of actual use of the
mark, with evidence to that effect, within 3 years from the filing of the application; otherwise
the application shall be refused or the mark shall be removed from the Register. (Sec. 124.2,
IPC)

II. Registrability of a Mark

Who may apply for registration? Any person may apply for registration who is domiciled or
has a real and effective industrial establishment in a country (a) which is a party to any
convention, treaty or agreement relating to intellectual property rights or the repression of
unfair competition, to which the Philippines is also a party, or (b) extends reciprocal rights to
nationals of the Philippines by law. (Sec. 3, IPC)

Which marks can be registered? Any mark can be registered except those that:

(a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or
falsely suggest a connection with persons, living or dead, institutions, beliefs, or national
symbols, or bring them into contempt or disrepute;

(b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its
political subdivisions, or of any foreign nation, or any simulation thereof;

(c) Consists of a name, portrait or signature identifying a particular living individual except by
his written consent, or the name, signature, or portrait of a deceased President of the
Philippines, during the life of his widow, if any, except by written consent of the widow;

(d) Is identical with a registered mark belonging to a different proprietor or a mark with an
earlier filing or priority date, in respect of:

(i) The same goods or services, or

(ii) Closely related goods or services, or

(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is
considered by the competent authority of the Philippines to be well-known internationally and
in the Philippines, whether or not it is registered here, as being already the mark of a person
other than the applicant for registration, and used for identical or similar goods or services:
Provided, That in determining whether a mark is well-known, account shall be taken of the
knowledge of the relevant sector of the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a result of the promotion of the mark;

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 (f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered
well-known in accordance with the preceding paragraph, which is registered in the Philippines
with respect to goods or services which are not similar to those with respect to which
registration is applied for: Provided, That use of the mark in relation to those goods or services
would indicate a connection between those goods or services, and the owner of the registered
mark: Provided further, That the interests of the owner of the registered mark are likely to be
damaged by such use;

(g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or
geographical origin of the goods or services;

(h) Consists exclusively of signs that are generic for the goods or services that they seek to
identify;

(i) Consists exclusively of signs or of indications that have become customary or usual to
designate the goods or services in everyday language or in bona fide and established trade
practice;

(j) Consists exclusively of signs or of indications that may serve in trade to designate the kind,
quality, quantity, intended purpose, value, geographical origin, time or production of the goods
or rendering of the services, or other characteristics of the goods or services;

(k) Consists of shapes that may be necessitated by technical factors or by the nature of the
goods themselves or factors that affect their intrinsic value;

(l) Consists of color alone, unless defined by a given form; or

(m) Is contrary to public order or morality. (Sec. 123.1, IPC) NOTE: The nature of the goods
to which the mark is applied will not constitute an obstacle to registration. (Sec. 123.3, IPC)

Identical with prior marks - When one applies for the registration of a trademark or label
which is almost the same or very closely resembles one already used and registered by another,
the application should be rejected and dismissed outright, even without any opposition on the
part of the owner and user of a previously registered label or trademark, this not only to avoid
confusion on the part of the public, but also to protect an already used and registered trademark
and an established goodwill. (Chuanchow Soy & Canning Co. vs. Director of Patents, 108 Phil
833, 836)
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 vs. Director of Patents, L-
20635, March 31, 1966)
Generic terms and descriptive terms defined - Generic terms are those which constitute "the
common descriptive name of an article or substance," or comprise the "genus of which the
particular product is a species," or are "commonly used as the name or description of a kind of
goods," or "imply reference to every member of a genus and the exclusion of individuating
characters," or "refer to the basic nature of the wares or services provided rather than to the
more idiosyncratic characteristics of a particular product," and are not legally protectable. On
the other hand, a term is descriptive and therefore invalid as a trademark if, as understood in its
normal and natural sense, it "forthwith conveys the characteristics, functions, qualities or
ingredients of a product to one who has never seen it and does not know what it is," or "if it
forthwith conveys an immediate idea of the ingredients, qualities or characteristics of the
goods," or if it clearly denotes what goods or services are provided in such a way that the
consumer does not have to exercise powers of perception or imagination. (Societe des
Produits vs. CA, G.R. No. 112012, April 4, 2001)
Why are generic and descriptive terms not registrable? These types of marks cannot be
susceptible for exclusive appropriation as it is open to the public for their use. Words and
phrases in common use and which merely indicate the character, kind, quality and composition
of the thing, may not be appropriated by anyone to his exclusive use; nor those which are
deceptively misdescriptive of the product. (East Pacific Merchandising Corp. vs. Director of
Patents, G.R. No. L-14377, Dec. 29, 1960) A dealer in shoes cannot register "Leather Shoes"
as his trademark because that would be merely descriptive and it would be unjust to deprive

5
 other dealers in leather shoes of the right to use the same words with reference to their
merchandise. No one may appropriate generic or descriptive words. They belong to the public
domain. (Masso Hermanos vs. Director of Patents, G.R. No. L-3952, Dec. 29, 1953)
It is evident that "CAMIA" as a trademark is far from being distinctive. By itself, it does not
identify petitioner as the manufacturer or producer of the goods upon which said mark s used,
as contra-distinguished to trademarks derived from coined words such as "Rolex," "Kodak" or
Kotex." It has been held that "if a mark is so commonplace that it cannot be readily
distinguished from others, then it is apparent that it cannot identify a particular business; and
he who first adopted it cannot be injured by any subsequent appropriation or imitation by
others, and the public will not be deceived. (Phil. Refining Co. vs. Ng Sam, G.R. No. L-26676,
July 30, 1982)
The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are
part of its registered trademark: SAN MIGUEL PALE PILSEN, any more than such
descriptive words as "evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and
"cooking oil" may be appropriated by any single manufacturer of these food products, for no
other reason than that he was the first to use them in his registered trademark. (Asia Brewery
Inc. vs. CA, G.R. No. 103543, July 5, 1993)
Although a combination of words may be registered as a trade-name, it is no justification for
not applying the principle that the use of a descriptive or generic term in a trade-name is
always subject to the limitation that the registrant can not acquire the exclusive right to the
descriptive or generic term or word. (Ong Ai Gui vs. Director of Patents, G.R. No. L-6235,
March 28, 1955)
Suggestive terms on the other hand can be registered - Suggestive terms are those which, in the
phraseology of one court, require "imagination, thought and perception to reach a conclusion
as to the nature of the goods." Such terms, "which subtly connote something about the
product," are eligible for protection in the absence of secondary meaning. While suggestive
marks are capable of shedding "some light" upon certain characteristics of the goods or
services in dispute, they nevertheless involve "an element of incongruity," "figurativeness," or
" imaginative effort on the part of the observer." (Societe des Produits vs. CA, G.R. No.
112012, April 4, 2001)
Doctrine of Secondary meaning - As regards signs or devices mentioned in paragraphs (j), (k),
and (l) of Sec. 123.1, nothing shall prevent the registration of any such sign or device which
has become distinctive in relation to the goods for which registration is requested as a result of
the use that have been made of it in commerce in the Philippines. (Sec. 123.2, IPC) The
doctrine of secondary meaning was elaborated in the following terms: " . . . a word or phrase
originally incapable of exclusive appropriation with reference to an article on the market,
because geographically 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." (Phil. Nut Industry vs. Standard, L-23055, July 31, 1975)
Thus, even if "Ang Tibay," therefore, were not capable of exclusive appropriation as a trade-
mark, the application of the doctrine of secondary meaning could nevertheless be fully
sustained because, in any event, by 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 geographically 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 vs. Teodoro, 74 Phil 50 [1942]).
Although the word "SELECTA" may be an ordinary or common word in the sense that it may
be used or employed by any one in promoting his business or enterprise, once adopted or
coined in connection with one's business as an emblem, sign or device to characterize its
products, or as a badge or authenticity, it may acquire a secondary meaning as to be
exclusively associated with its products and business. In this sense, its use by another may lead
to confusion in trade and cause damage to its business. (Arce Sons and Co. vs. Selects
Biscuits, 1 SCRA 253 [1961])
Doctrine of Secondary Meaning applicable to trade names - The doctrine of secondary
meaning originated in the field of trademark law. Its application has, however, been extended
to corporate names sine the right to use a corporate name to the exclusion of others is based
upon the same principle which underlies the right to use a particular trademark or tradename.
However, while the appellant may have proved that it had been using the word 'Lyceum' for a
long period of time, this fact alone did not amount to mean that the said word had acquired
secondary meaning in its favor because the appellant failed to prove that it had been using the

6
 same word all by itself to the exclusion of others (Lyceum of the Philippines vs. Court of
Appeals, G.R. 101897, March 5, 1993)
Confusing Similarity - The similarity must be such as is likely to mislead purchasers of
ordinary caution and prudence into the belief that the articles are those of another producer or
manufacturer. Whether the mark or label of one competitor resembles another is to be
determined by an inspection of the points of difference and resemblance, as a whole, and not
merely the points of resemblance. (American Cyanimid vs. Director of Patents, G.R. 23954,
April 29, 1977)
Test of confusing similarity of marks

(a) phonetic similarity - 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 "Trade-Mark 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 "Seven-Up" 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. (Marvex Commercial Co., Inc. v. Petra Hawpia & Co.,
et al., L-16297, Dec. 22, 1926)
(b) Holistic Test - 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. (Del Monte
Corp. vs. CA, G.R. No. L-78352, Jan. 25, 1990)
(c) Dominancy Test - 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; not it is necessary that
the infringing label should suggest an effort to imitate. The dominant feature of SMC's
trademark is the name of the product: SAN MIGUEL PALE PILSEN, written in white
Gothic letters with elaborate serifs at the beginning and end of the letters "S" and "M" on
an amber background across the upper portion of the rectangular design. On the other
hand, the dominant feature of ABI's trademark is the name: BEER PALE PILSEN, with
the word "Beer" written in large amber letters, larger than any of the letters found in the
SMC label. The trial court perceptively observed that the word "BEER" does not appear in
SMC's trademark, just as the words "SAM MIGUEL" do not appear in ABI's trademark.
Hence, there is absolutely no similarity in the dominant features of both trademarks.
Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be
confusingly similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER
PALE PILSEN can possibly be deceived that it is SAN MIGUEL PALE PILSEN. No
evidence whatsoever was presented by SMC proving otherwise. (Asia Brewery Inc. vs.
CA, G.R. No. 103543, July 5, 1993)

Inexplicable use - Respondent's witness had no idea why respondent chose "UNIVERSAL
CONVERSE" as trademark and the record discloses no reasonable explanation for
respondent's use of the word "CONVERSE" in its trademark. Such unexplained use by
respondent of the dominant word of petitioner's corporate name lends itself open to the
suspicion of fraudulent motive to trade upon petitioner's reputation, thus: A boundless choice
of words, phrases and symbols is available to one who wishes a trademark sufficient unto itself
to distinguish his product from those of others. When, however, there is no reasonable
explanation for the defendant's choice of such a mark though the field for his selection was so
broad, the inference is inevitable that it was chosen deliberately to deceive. (Converse Rubber
vs. Universal Rubber, G.R. No. L-27906, Jan. 8, 1987) We do not see why applicant could not

7
 have stretched his imagination even a little and extended his choice to other members of the
animal kingdom, as a brand to differentiate his product from similar products in the market. In
a similar case decided by this Tribunal wherein, although one brand consisting of the
representation of a rooster was already being used by one party, another party wanted to
register a similar brand, consisting of two roosters on a similar product. (Lim Hoa vs. Director
of Patents, G.R. No. L-6235, March 28, 1955)

Ordinary purchaser - In order that there may be deception of the buying public in the sense
necessary to constitute unfair competition, it is necessary to suppose a public 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 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 possibility of the
deception, of the person who knows nothing about the design which has been counterfeited,
and who must be indifferent as between that and the other. The simulation, in order to be
objectionable, must be such as appears likely to mislead the ordinarily intelligent buyer who
has a need to supply and is familiar with the article that he seeks to purchase. (Asia Brewery
Inc. vs. CA, G.R. No. 103543, July 5, 1993) Accordingly, taken as they will appear to a
prospective customer, the trademarks in question are not apt to confuse. Furthermore, the
product of the applicant is expressly stated as dispensable only upon doctor's prescription,
while that of oppositor does not require the same. The chances of being confused into
purchasing one for the other are therefore all the more rendered negligible. Although oppositor
avers that some drugstores sell "BIOFERIN: without asking for a doctor's prescription, the
same if true would be an irregularity not attributable to the applicant, who has already clearly
stated the requirement of a doctor's prescription upon the face of the label of its product.
(Bristol Myers vs. Director of Patents, 17 SCRA 128 [1966])

The related goods principle Goods are related when they belong to the same class or have the
same descriptive properties or physical attributes, or they serve the same purpose or flow
through the same channel of trade. The registrant of the mark Esso for petroleum products
may not validly prevent others from using Esso for cigarettes because there is a marked
difference between oil and tobacco, the respective goods flow through different channels of
trade, and the business of one is beyond the zone of potential or natural and logical expansion
of the other. (Esso Standard Eastern Inc. vs. CA, G.R. No. L-29971, Aug. 31, 1982) The use
of identical marks on non-competing but related goods may likely cause confusion. Thus, the
trademark Ang Tibay for shoes and slippers was not allowed to be used for shirts and pants
because they belong to the same general class of goods. (Ang vs. Teodoro, 74 Phil 50 [1942])

III. Registration of a Mark

Formal requirement for application of registration - The application for the registration of the
mark shall be in Filipino or in English and shall contain the following:

(a) A request for registration;

(b) The name and address of the applicant;

(c) The name of a State of which the applicant is a national or where he has domicile; and the
name of a State in which the applicant has a real and effective industrial or commercial
establishment, if any;

(d) Where the applicant is a juridical entity, the law under which it is organized and existing;

(e) The appointment of an agent or representative, if the applicant is not domiciled in the
Philippines;

(f) Where the applicant claims the priority of an earlier application, an indication of:

i) The name of the State with whose national office the earlier application was filed or if filed
with an office other than a national office, the name of that office,

ii) The date on which the earlier application was filed, and

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 iii) Where available, the application number of the earlier application;

(g) Where the applicant claims color as a distinctive feature of the mark, a statement to that
effect as well as the name or names of the color or colors claimed and an indication, in respect
of each color, of the principal parts of the mark which are in that color;

(h) Where the mark is a three-dimensional mark, a statement to that effect;

(i) One or more reproductions of the mark, as prescribed in the Regulations;

(j) A transliteration or translation of the mark or of some parts of the mark, as prescribed in the
Regulations;

(k) The names of the goods or services for which the registration is sought, grouped according
to the classes of the Nice Classification, together with the number of the class of the said
Classification to which each group of goods or services belongs; and

(l) A signature by, or other self-identification of, the applicant or his representative. (Sec.
124, IPC)

Filing date - The filing date of an application shall be the date on which the Office received the
following indications and elements in English or Filipino:

(a) An express or implicit indication that the registration of a mark is sought;

(b) The identity of the applicant;

(c) Indications sufficient to contact the applicant or his representative, if any;

(d) A reproduction of the mark whose registration is sought; and

(e) The list of the goods or services for which the registration is sought. (Sec. 127, IPC)

Note: No filing date shall be accorded until the required fee is paid. (Sec. 127.2, IPC)

Priority right - An application for registration of a mark filed in the Philippines by a person
referred to in Section 3, and who previously duly filed an application for registration of the
same mark in one of those countries, shall be considered as filed as of the day the application
was first filed in the foreign country. (Sec. 131.1, IPC) However, no registration of a mark in
the Philippines by a person described in this section shall be granted until such mark has been
registered in the country of origin of the applicant. (Sec. 131.2, IPC) This right does not
entitle the owner of a registration granted under this section to sue for acts committed
prior to the date on which his mark was registered in this country except for well-
known marks. (Sec. 131.3, IPC)
Procedure for registration

(a) Examination to determine whether the application satisfies the requirements for the grant
of a filing date under Section 127. (Sec. 132, IPC)
(b) Examination to determine whether the application meets the requirements of Section 124
and the mark is registrable under Section 123. (Sec. 133, IPC)
(c) Denial of the application or amendment thereof or publication of the application. (Sec.
133.2 and Sec. 133.3, IPC)
(d) Opposition to the application; notice; hearing; decision by examiner; appeal to the
Director of the Bureau of Trademarks; appeal to the IPO Director General; appeal to the
Court of Appeals;
(e) Issuance of certificate of registration. (Sec. 136, IPC)
(f) Publication in the IPO Gazette of the fact of registration. (Sec. 136, IPC)

Duration of registration - The duration of a trademark registration is 10 years, renewable for

periods of 10 years each renewal. The request for renewal must be made within 6 months
before or after the expiration of the registration. (Sec. 145, IPC)

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 Post-registration requirement The registrant is required to file a declaration of actual use, and
evidence to that effect, within 1 year from the fifth anniversary of the date of registration of the
mark; otherwise the mark shall be removed from the Register. (Sec. 145, IPC) BUT, non-use
of a mark may be excused if caused by circumstance arising independently of the will of the
trademark owner. Lack of funds is not an acceptable excuse. (Sec. 152, IPC)
Cancellation of registration A petition to cancel a registration of a mark under this Act may
be filed with the Bureau of Legal Affairs by any person who believes that he is or will be
damaged by the registration of a mark under this Act as follows:

(a) Within five (5) years from the date of the registration of the mark under this Act.
(b) At any time, if the registered mark becomes the generic name for the goods or services, or
a portion thereof, for which it is registered, or has been abandoned, or its registration was
obtained fraudulently or contrary to the provisions of this Act, or if the registered mark is
being used by, or with the permission of, the registrant so as to misrepresent the source of
the goods or services on or in connection with which the mark is used. If the registered
mark becomes the generic name for less than all of the goods or services for which it is
registered, a petition to cancel the registration for only those goods or services may be
filed. A registered mark shall not be deemed to be the generic name of goods or services
solely because such mark is also used as a name of or to identify a unique product or
service. The primary significance of the registered mark to the relevant public rather than
purchaser motivation shall be the test for determining whether the registered mark has
become the generic name of goods or services on or in connection with which it has been
used.
(c) At any time, if the registered owner of the mark without legitimate reason fails to use the
mark within the Philippines, or to cause it to be used in the Philippines by virtue of a
license during an uninterrupted period of three (3) years or longer. (Sec. 151, IPC)

There, being no evidence of use of the mark by others before 1932, or that appellee abandoned
use thereof, the registration of the mark was made in accordance with the Trademark Law.
Granting that appellant used the mark when appellee stopped using it during the period of time
that the Government imposed restrictions on importation of respondent's brassiere bearing the
trademark, such temporary non-use did not affect the rights of appellee because it was
occasioned by government restrictions and was not permanent, intentional, and voluntary. To
work an abandonment, the disuse must be permanent and not ephemeral; it must be intentional
and voluntary, and not involuntary or even compulsory. There must be a thoroughgoing
discontinuance of any trade-mark use of the mark in question" (Callman, Unfair Competition
and Trademark, 2nd Ed., p. 1341). The use of the trademark by other manufacturers did not
indicate an intention on the part of appellee to abandon it. (Romero vs. Maiden Form, G.R. No.
L-18289, March 31, 1964 )
The non-use of a trademark or an article of merchandise due to legal restrictions or
circumstances beyond one's control is not to be considered as an abandonment. Said rule was
correctly applied to the case at bar where the use of the trademark was interrupted during the
Japanese occupation and in fact was discontinued when the importation of the product covered
by the trademark was prohibited by the Central Bank Regulations. (Phil. Nut Industry vs.
Standard, L-23055, July 31, 1975)
Assignment and Transfer of Application and Registration An application for registration or
its registration may be assigned or transferred with or without the transfer of the business using
the mark. However, it will be null and void if it would mislead the public especially as regards
the nature, source, manufacturing process, characteristics or suitability for their purpose, of the
goods or services to which the mark is applied. Such assignment or transfer shall be in writing
and with the signatures of the contracting parties. It shall be recorded with the IPO otherwise
it shall have no effect against third parties. (Sec. 149, IPC)
License contracts Any license contract concerning the application of a mark or its
registration shall provide for effective control by the licensor of the quality of the goods or
services of the licensee in connection with which the mark is used. If the contract shall not
provide the foregoing, it shall not be valid. Said contracts must be recorded with the IPO,
otherwise, it shall not bind third parties. (Sec. 150.1, IPC)

IV. Well-known Marks

A well-known mark is one which a competent authority of the Philippines has designated to be
well-known internationally and in the Philippines. In determining whether a mark is well-

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 known, account shall be taken of the knowledge of the relevant sector of the public, rather than
the public at large, including knowledge in the Philippines which has been obtained as a result
of the promotion of the mark. (Sec. 123.1[e] and [f],IPC)
Additional right of owner The exclusive right of the owner of a well-known mark which is
registered in the Philippines shall extend to goods and services which are not similar to those
in respect of which the mark is registered; provided that (i) the use of the mark in relation to
those goods or services would indicate a connection between those goods or services and the
owner of the registered mark, and (ii) the interests of the owner of the registered mark are
likely to be damaged by such use. (Sec. 147.2, IPC)

V. Infringement of Trademark; Unfair Competition

Rights conferred on trademark (a) The owner of a registered mark shall have the exclusive
right to prevent all third parties not having the owner's consent from using in the course of
trade identical or similar signs or containers for goods or services which are identical or similar
to those in respect of which the trademark is registered where such use would result in a
likelihood of confusion. In case of the use of an identical sign for identical goods or services, a
likelihood of confusion shall be presumed.

(b) The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e)
which is registered in the Philippines, shall extend to goods and services which are not similar
to those in respect of which the mark is registered: Provided, That use of that mark in relation
to those goods or services would indicate a connection between those goods or services and
the owner of the registered mark: Provided further, That the interests of the owner of the
registered mark are likely to be damaged by such use

Limitations on such right Duration of registration (10 years) and Territorial limitations
(rights can be enforced within the territory of registration except well-known marks)
When is there infringement? There is infringement if a registered mark is used in commerce
by a person without the consent of the registered owner thereof. Such infringement may
involve:

(a) 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
(b) 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. (Sec. 155, IPC)

In order to bring a civil action for infringement, it is not required that there be an actual sale of
the goods or services using the infringing material. Infringement takes place upon the mere
use or reproduction of the registered mark. (Sec. 155, IPC)
Remedies available to the owner whose registered mark was infringed

(a) Sue for damages (Sec. 156.1)

(b) Have the infringing goods impounded (Sec. 156.2)
(c) Ask for double damages (Sec. 156.3)
(d) Ask for injunction. (Sec. 156.4)
(e) Have the infringing goods disposed of outside the channels of commerce (Sec. 157.1)
(f) Have the infringing goods destroyed (Sec. 157.1)
(g) File criminal action (Sec. 170)
(h) Administrative sanctions.

Owners of a registered mark is required to give notice of the fact that his mark is registered in
order to recover profits or damages in case of infringement. However, knowledge of the fact

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 of registration is presumed if the words Registered Mark or the symbol (Registered) is
displayed together with the mark.
Limitations to actions for infringement

(a) No action for infringement could be taken against a person who, in good faith and before
the filing date or priority date, was using the mark for the purposes of his business or
enterprise. Note, however, that such person may assign or transfer his right to use the
registered mark only together with his business or enterprise.
(b) Only an injunction against future printing may be imposed upon an innocent infringing
printer.
(c) Similarly, only an injunction against the presentation of infringing advertising matter in
future issues may be imposed on innocent infringing newspapers and magazines. (Sec.
159, IPC)

Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement Action -

Any foreign national or juridical person who meets the requirements of Section 3 of this Act
and does not engage in business in the Philippines may bring a civil or administrative action
hereunder for opposition, cancellation, infringement, unfair competition, or false designation
of origin and false description, whether or not it is licensed to do business in the Philippines
under existing laws. (Sec. 160, IPC)
A foreign corporation which has never done any business in the Philippines and which is
unlicensed and unregistered to do business here, but is widely and favorably known in the
Philippines through the use therein of its products bearing its corporate and tradename, has a
legal right to maintain an action in the Philippines to restrain the residents and inhabitants
thereof from organizing a corporation therein bearing the same name as the foreign
corporation, when it appears that they have personal knowledge of the existence of such a
foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is
to deal and trade in the same goods as those of the foreign corporation. (La Chemise Lacoste
vs. Fernandez, G.R. No. 65659, May 21, 1984)
Unfair competition is the use by a person of deception or other means contrary to good faith
by which he passes off the goods manufactured by him or in which he deals, or his business or
services, for those of another person who has established goodwill in the goods such person
manufactures or deals in, or his business or services, or who shall commit any acts calculated
to produce said result. Some acts of unfair competition are as follows:

(a) Giving ones goods the general appearance of goods of another manufacturer;
(b) Inducing the false belief that one is offering the services of another who has identified
such services in the minds of the public;
(c) Making any false statement calculated to discredit the goods, business or services of
another.

Infringement of trademark vs. unfair competition

(a) 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.
(b) In infringement of trademark fraudulent intent is unnecessary whereas in unfair
competition fraudulent intent is essential.
(c) In infringement of trademark the prior registration of the trademark is a prerequisite to the
action, whereas in unfair competition registration is not necessary. (Del Monte Corp. vs.
CA, G.R. No. L-78352, Jan. 25, 1990)

Criminal 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) to Two hundred thousand pesos(P200,000), shall be imposed
on any person who is found guilty of committing any of the acts mentioned in Section 155,
Section 168 and Subsection 169.1. (Sec. 170, IPC)

-End-

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