Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
G.R. No. L-28554 February 28, 1983
UNNO COMMERCIAL ENTERPRISES, INCORPORATED, petitioner, vs. GENERAL
MILLING CORPORATION and TIBURCIO S. EVALLE, in his capacity as Director of
Patents, respondents.
The Court affirms respondent Director of Patent's decision declaring respondent General
Milling Corporation as the prior user of the trademark "All Montana" on wheat flour in the
Philippines and ordering the cancellation of the certificate of registration for the same
trademark previously issued in favor of petitioner Unno Commercial Enterprises,
Incorporated, it appearing that Unno Commercial Enterprises, Inc. merely acted as
exclusive distributor of All Montana wheat flour in the Philippines. Only the owner of a
trademark, trade name or service mark may applly for its registration and an importer,
broker, indentor or distributor acquires no rights to the trademark of the goods he is dealing
with in the absence of a valid transfer or assignment of the trade mark.
On December 11, 1962, respondent General Milling Corporation filed an application for
the registration of the trademark "All Montana" to be used in the sale of wheat flour. In view
of the fact that the same trademark was previously, registered in favor of petitioner Unno
Commercial Enterprises, Inc., the Chief Trademark Examiner of the Philippines Patent
Office declared an interference proceeding 1 between respondent corporation's application
(Serial No. 9732), as Junior - Party-Applicant and petitioner company's registration
(Registration No. 9589), as Senior Party-Applicant, docketed in the Philippines Patent
Office as Inter Partes Case No. 313, to determine which party has previously adopted and
used the trademark "All Montana".
Respondent General Milling Corporation, in its application for registration, alleged that it
started using the trademark "All Montana" on August 31, 1955 and subsequently was
licensed to use the same by Centennial Mills, Inc. by virtue of a deed of assignment
executed on September 20, 1962. On the other hand petitioner Unno Commercial
Enterprises, Inc. argued that the same trademark had been registered in its favor on March
8, 1962 asserting that it started using the trademark on June 30, 1956, as indentor or
broker for S.H. Huang Bros. & Co., a local firm.
The Director of Patents, after hearing, ruled in favor of respondent General Milling
Corporation and rendered its decision as follows:
However, there is testimony in the record (t.s.n., pp. 11-12, Jan.17,1967, testimony
of Jose Uy) to the effect that, indispensable, "ALL MONTANA" wheat flour is a
premium flour produced from premium wheat coming from the State of Montana,
U.S.A. It is apparent that the trademark is primarily geographically descriptive of
the goods. It is therefore a matter overlooked by the Trademark Examiner, and it
is incumbent upon him to determine if the applicant should claim and is qualified
to claim distinctiveness under Section 4(f) of the Trademark Statute. Otherwise, it
is registrable on the Supplemental Register and should thus be registered therein.
WHEREFORE, the Junior Party-Applicant is adjudged prior -user of the trademark
ALL MONTANA, but 'because it is primarily geographically descriptive, the
application is herein remanded to the Chief Trademark Examiner for proper
proceeding before issuance of the certificate of registration.
The certificate of registration issued to the Senior Party is ordered cancelled.
IT IS SO ORDERED.
After its motion for reconsideration was denied, petitioner brought the instant petition
seeking the reversal of the decision and praying that it be declared the owner and prior
user of the trademark "All Montana" on wheat flour.
Petitioner based its claim of ownership over the trademark in question by the fact that it
acted as an indentor or broker for S. H. Huang Bros. & Co., a local importer of wheat flour,
offering as evidence the various shipments, documents, invoices and other
correspondence of Centennial Mills, Inc., shipping thousand of bags of wheat flour bearing
the trademark "All Montana" to the Philippines. Petitioner argued that these documents,
invoices and correspondence proved the fact that it has been using the trademark "All
Montana" as early as 1955 in the concept of an owner and maintained that anyone,
whether he is only an importer, broker or indentor can appropriate, use and own a
particular mark of its own choice although he is not the manufacturer of the goods he deals
with. Relying on the provisions of Section 2-A of the Trademarks Law 2 (Republic Act 166),
petitioner insists that "the appropriation and ownership of a particular trademark is not
merely confined to producers or manufacturers but likewise to anyone who lawfully deals
in merchandise who renders any lawful service in commerce, like petitioner in the case at
bar. 3
The right to register trademark is based on ownership. 4 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. 5 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. 6
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. 7
1

Thus, this Court, has on several occasions ruled that where the applicant's alleged
ownership is not shown in any notarial document and the applicant appears to be merely
an importer or distributor of the merchandise covered by said trademark, its application
cannot be granted. 8
Moreover, the provision relied upon by petitioner (Sec. 2-A, Rep. Act No. 166) allows one
"who lawfully produces or deals in merchandise ... or who engages in any lawful business
or who renders any lawful service in commerce, by actual use thereof . . . (to) appropriate
to his exclusive use a trademark, or a service mark not so appropriated by another. " In
the case at bar, the evidence showed that the trademark "All Montana" was owned and
registered in the name of Centennial Mills, Inc. which later transferred it to respondent
General Milling Corporation by way of a deed of assignment. It is undisputed that way back
in March, 1955, Centennial Mills, Inc. under the tradename Wenatchee Milling Co.,
exported flour to the Philippines, through its distributor, herein petitioner Unno Commercial
Enterprises, Inc. which acted as indentor or broker for the firm S. H. Huang Bros. & Co.
However, because of increased taxes and subsidies, Centennial Mills discontinued
shipments of flour in the Philippines and eventually sold its brands for wheat flour, including
"All Montana" brand to respondent General Milling Corporation in consideration of 1,000
shares of stock of respondent corporation with a par value of P100.00 per share or a total
of P100,000.00. Respondent General Milling Corporation, since the start of the operation
in 1961 of its flour mills located in Lapu-lapu City, Cebu has been manufacturing and selling
"All Montana" flour in the Philippines.
As against petitioner's argument that respondent failed to establish convincingly the
ownership of the trademark "All Montana" by its assignor Centennial Mills, Inc., the Director
of Patents correctly found that ample evidence was presented that Centennial Mills, Inc.
was the owner and prior user in the Philippines of the trademark "All Montana" through a
local importer and broker. The Deed of Assignment itself constitutes sufficient proof of its
ownership of the trademark "All Montana," showing that Centennial Mills was a corporation
duly organized and existing under and by virtue of the laws of the State of Oregon, U.S.A.
with principal place and business at Portland, Oregon, U.S.A. and the absolute and
registered owner of several trademarks for wheat flour, i.e. (Imperial, White Lily, Duck,
General, Swan, White Horse, Vinta, El Paro, Baker's Joy, Choice, Red Bowl All Montana
and Dollar.) all of which were assigned by it to respondent General Milling Corporation.
The deed of assignment was signed by its president, Dugald MacGregor, duly
acknowledged before James Hunt, a notary public for the State of Oregon, accompanied
by a certification issued by the Secretary of State of the State of Oregon stating that the
said James Hunt is a duly qualified Notary Public with full power and authority to take
acknowledgments of all oaths and that full faith and credit should be given to his official
acts as notary public.
The Director of Patents likewise correctly rejected petitioner's contention that in a 1954
conference in Manila the ownership and use by petitioner of the brand "All Montana" was
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
agreed upon, on the contrary finding that "Details of that meeting were, however, explained
by Mr. Dugald MacGregor, President of Centennial Mills, Inc., as the Junior Party's rebuttal
witness. Mr. MacGregor confirmed holding such conference in a restaurant in Manila with
representatives of the Senior Party, namely; Messrs. Jose Uy, Francisco Gonzales and S.
H. Huang although he could not remember the name of the restaurant. He further
explained that his company owned the trademark; that it had been using the mark in the
United States; and that ownership of the mark had never been conferred upon any other
company, much less the Senior Party"; and "Inasmuch as it was not the owner of the
trademark, the Senior Party could not be regarded as having used and adopted it, and had
no right to apply for its registration. It acknowledged that it was a mere importer of flour,
and a mere importer and distributor acquires no rights in the mark used on the imported
goods by the foreign exporter in the absence of an assignment of any kind ... Trademarks
used and adopted on goods manufactured or packed in a foreign country in behalf of a
domestic importer, broker, or indentor and distributor are presumed to be owned by the
manufacturer or packer, unless there is a written agreement clearly showing that
ownership vests in the importer, broker, indentor or distributor.
Thus, petitioner's contention that it is the owner of the mark "All Montana" because of its
certificate of registration issued by the Director of Patents, must fail, since ownership of a
trademark is not acquired by the mere fact of registration alone. 9 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. 10 Registration
does not perfect a trademark right. 11 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. In the case at bar, the Director of Patents found that
"ample evidence was presented in the record that Centennial Mills, Inc. was the owner and
prior user in the Philippines of the trademark 'All Montana' through a local importer and
broker. Use of a trademark by a mere importer, indentor or exporter (the Senior Party
herein) inures to the benefit of the foreign manufacturer whose goods are Identified by the
trademark. The Junior Party has hereby established a continuous chain of title and,
consequently, prior adoption and use" and ruled that "based on the facts established, it is
safe to conclude that the Junior Party has satisfactorily discharged the burden of proving
priority of adoption and use and is entitled to registration." It is well-settled that we are
precluded from making further inquiry, since the findings of fact of the Director of Patents
in the absence of any showing that there was grave abuse of discretion is binding on
us 12 and the findings of facts by the Director of Patents are deemed conclusive in the
Supreme Court provided that they are supported by substantial evidence. 13 Petitioner has
failed to show that the findings of fact of the Director of Patents are not substantially
supported by evidence nor that any grave abuse of discretion was committed.
Finally, the Court finds without merit petitioner's argument that the Director of Patents could
not order the cancellation of' its certificate of registration in an interference proceeding and
that the question of whether or not a certificate of registration is to be cancelled should
2
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
have been brought in cancellation proceedings. Under Rule 178 of the Rules of the Patent
Office in Trademark Cases, 14 the Director of Patents is expressly authorized to order the
cancellation of a registered mark or trade name or name or other mark of ownership in an
inter partes case, such as the interference proceeding at bar. 15

WHEREFORE, the appealed decision is hereby affirmed. No costs.

3

G.R. No. L-75420 November 15, 1991
KABUSHI KAISHA ISETAN, also known and trading as ISETAN CO.,
LTD., petitioner, vs. THE INTERMEDIATE APPELLATE COURT, THE DIRECTOR OF
PATENTS, and ISETANN DEPARTMENT STORE, INC., respondents.
This is a petition for review on certiorari which seeks to set aside - (1) the decision of the
Court of Appeals dated June 2, 1986 in AC-G.R. SP No. 008873 entitled "Kabushi Kaisha
Isetan, also known and trading as Isetan Company Limited v. Isetann Department Store,
Inc." dismissing the petitioner's appeal from the decision of the Director of Patents; and (2)
the Resolution dated July 11, 1986 denying the petitioner's motion for reconsideration.
As gathered from the records, the facts are as follows:
Petitioner Kabushi Kaisha Isetan is a foreign corporation organized and existing under the
laws of Japan with business address at 14-1 Shinjuku, 3-Chrome, Shinjuku, Tokyo, Japan.
It is the owner of the trademark "Isetan" and the "Young Leaves Design".
The petitioner alleges that it first used the trademark Isetan on November 5, 1936. It states
that the trademark is a combination of "Ise" taken from "Iseya" the first name of the rice
dealer in Kondo, Tokyo in which the establishment was first located and "Tan" which was
taken from "Tanji Kosuge the First". The petitioner claims to have expanded its line of
business internationally from 1936 to 1974. The trademark "Isetan" and "Young Leaves
Design" were registered in Japan covering more than 34 classes of goods. On October 3,
1983, the petitioner applied for the registration of "Isetan" and "Young Leaves Design" with
the Philippine Patent Office under Permanent Serial Nos. 52422 and 52423 respectively.
(Rollo, p. 43)
Private respondent, Isetann Department Store, on the other hand, is a domestic
corporation organized and existing under the laws of the Philippines with business address
at 423-430 Rizal Avenue, Sta. Cruz, Manila, Philippines.
It claims that it used the word "Isetann" as part of its corporated name and on its products
particularly on shirts in Joymart Department Store sometime in January 1979. The suffix
"Tann" means an altar, the place of offering in Chinese and this was adopted to harmonize
the corporate name and the corporate logo of two hands in cup that symbolizes the act of
offering to the Supreme Being for business blessing.
On May 30, 1980 and May 20, 1980, the private respondent registered "Isetann
Department Store, Inc." and Isetann and Flower Design in the Philippine Patent Office
under SR. Reg. No. 4701 and 4714, respectively, as well as with the Bureau of Domestic
Trade under Certificate of Registration No. 32020. (Rollo, pp. 43-44)
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
On November 28, 1980, the petitioner filed with the Phil. Patent Office two (2) petitions for
the cancellation of Certificates of Supplemental Registration Nos. SR-4714 and SR-4701
stating among others that:
. . . except for the additional letter "N" in the word "Isetan", the mark registered by
the registrant is exactly the same as the trademark ISETAN owned by the petitioner
and that the young leaves registered by the registrant is exactly the same as the
young leaves design owned by the petitioner.
The petitioner further alleged that private respondent's act of registering a trademark which
is exactly the same as its trademark and adopting a corporate name similar to that of the
petitioner were with the illegal and immoral intention of cashing in on the long established
goodwill and popularity of the petitioner's reputation, thereby causing great and irreparable
injury and damage to it (Rollo, p. 521). It argued that both the petitioner's and respondent's
goods move in the same channels of trade, and ordinary people will be misled to believe
that the products of the private respondent originated or emanated from, are associated
with, or are manufactured or sold, or sponsored by the petitioner by reason of the use of
the challenged trademark.
The petitioner also invoked the Convention of Paris of March 20, 1883 for the Protection
of Industrial Property of which the Philippines and Japan are both members. The petitioner
stressed that the Philippines' adherence to the Paris Convention committed to the
government to the protection of trademarks belonging not only to Filipino citizens but also
to those belonging to nationals of other member countries who may seek protection in the
Philippines. (Rollo, p. 522)
The petition was docketed as Inter Partes Cases Nos. 1460 and 1461 (Rollo, p. 514)
Meanwhile, the petitioner also filed with the Securities and Exchange Commission (SEC)
a petition to cancel the mark "ISETAN" as part of the registered corporate name of Isetann
Department Store, Inc. which petition was docketed as SEC Case No. 2051 (Rollo, p. 524)
On May 17, 1985, this petition was denied in a decision rendered by SEC's Hearing Officer,
Atty. Joaquin C. Garaygay.
On appeal, the Commission reversed the decision of the Hearing Officer on February 25,
1986. It directed the private respondent to amend its Articles of Incorporation within 30
days from finality of the decision.
On April 15, 1986, however, respondent Isetann Department Store filed a motion for
reconsideration. (Rollo, pp. 325-353). And on September 10, 1987, the Commission
reversed its earlier decision dated February 25, 1986 thereby affirming the decision
rendered by the Hearing Officer on May 17, 1985. The Commission stated that since the
4

petitioner's trademark and tradename have never been used in commerce on the
petitioner's products marketed in the Philippines, the trademark or tradename have not
acquired a reputation and goodwill deserving of protection from usurpation by local
competitors. (Rollo, p. 392).
This SEC decision which denied and dismissed the petition to cancel was submitted to the
Director of Patents as part of the evidence for the private respondent.
On January 24, 1986, the Director of Patents after notice and hearing rendered a joint
decision in Inter Partes Cases Nos. 1460 and 1461, the dispositive portion of which reads:
WHEREFORE, all the foregoing considered, this Office is constrained to hold that
the herein Petitioner has not successfully made out a case of cancellation.
Accordingly, Inter Partes Cases Nos. 1460 and 1461 are, as they are hereby,
DISMISSED. Hence, Respondent's Certificate of Supplemental Registration No.
4714 issued on May 20, 1980 covering the tradename "ISETANN DEPT. STORE,
INC. & FLOWER DESIGN" are, as they are hereby, ordered to remain in full force
and effect for the duration of their term unless sooner or later terminated by law.
The corresponding application for registration in the Principal Register of the
Trademark and of the tradename aforesaid are hereby given due course.
Let the records of these cases be transmitted to the Trademark Examining Division
for appropriate action in accordance with this Decision.
On February 21, 1986, Isetan Company Limited moved for the reconsideration of said
decision but the motion was denied on April 2, 1986 (Rollo, pp. 355-359).
From this adverse decision of the Director of Patents, the petitioner appealed to the
Intermediate Appellate Court (now Court of Appeals).
On June 2, 1986, the IAC dismissed the appeal on the ground that it was filed out of time.
The petitioner's motion for reconsideration was likewise denied in a resolution dated July
11, 1986.
Hence, this petition.
Initially, the Court dismissed the petition in a resolution dated July 8, 1987, on the ground
that it was filed fourteen (14) days late. However, on motion for reconsideration, whereby
the petitioner appealed to this Court on equitable grounds stating that it has a strong and
meritorious case, the petition was given due course in a resolution dated May 19, 1988 to
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
enable us to examine more fully any possible denial of substantive justice. The parties
were then required to submit their memoranda. (Rollo, pp. 2-28; Resolution, pp. 271; 453)
After carefully considering the records of this case, we reiterate our July 8, 1987 resolution
dismissing the petition. There are no compelling equitable considerations which call for the
application of the rule enunciated in Serrano v. Court of Appeals (139 SCRA 179 [1985])
and Orata v. Intermediate Appellate Court, et al. (185 SCRA 148 [1990]) that
considerations of substantial justice manifest in the petition may relax the stringent
application of technical rules so as not to defeat an exceptionally meritorious petition.
There is no dispute and the petitioner does not question the fact that the appeal was filed
out of time.
Not only was the appeal filed late in the Court of Appeals, the petition for review was also
filed late with us. In common parlance, the petitioner's case is "twice dead" and may no
longer be reviewed.
The Court of Appeals correctly rejected the appeal on the sole ground of late filing when it
ruled:
Perfection of an appeal within the time provided by law is jurisdictional, and failure
to observe the period is fatal.
The decision sought to be appealed is one rendered by the Philippine Patent
Office, a quasi-judicial body. Consequently, under Section 23(c) of the Interim
Rules of Court, the appeal shall be governed by the provisions of Republic Act No.
5434, which provides in its Section 2;
Sec. 2. Appeals to Court of Appeals. - Appeals to the Court of Appeals shall be
filed within fifteen (15) days from notice of the ruling, award, order, decision or
judgment or from the date of its last publication, if publication is required by law for
its effectivity; or in case a motion for reconsideration is filed within that period of
fifteen (15) days, then within ten (10) days from notice or publication, when
required by law, of the resolution denying the motion for reconsideration. No more
than one motion for reconsideration shall be allowed any party. If no appeal is filed
within the periods here fixed, the ruling, award, order, decision or judgment shall
become final and may be executed as provided by existing law.
Attention is invited to that portion of Section 2 which states that in case a motion
for reconsideration is filed, an appeal should be filed within ten (10) days from
notice of the resolution denying the motion for reconsideration.
5

The petitioner received a copy of the Court of Appeals' resolution denying and received by
us on August 8, 1986, its motion for reconsideration on July 17, 1986. It had only up to
August 1, 1986 to file a petition for review with us. The present petition was posted on
August 2, 1986. There is no question that it was, again, filed late because the petitioner
filed an ex-parte motion for admission explaining the delay.
The decision of the Patent Office has long become final and executory. So has the Court
of Appeal decision.
Regarding the petitioner's claims of substantial justice which led us to give due course, we
decline to disturb the rulings of the Patent Office and the Court of Appeals.
A fundamental principle of Philippine Trademark Law is that actual use in commerce in the
Philippines is a pre-requisite to the acquisition of ownership over a trademark or a
tradename.
The trademark Law, Republic Act No. 166, as amended, under which this case heard and
decided provides:
SEC. 2. What are registrable.- Trademark, tradenames and service marks owned
by persons, corporation, partnerships or associations domiciled in the Philippines
and by persons, corporations, partnerships or associations domicided in any
foreign country may be registered in accordance with the provisions of this Act:
Provided, That said trademarks, tradenames, or service marks are actually in use
in commerce and services not less than two months in the Philippines before the
time the applications for registration are filed: And provided, further, That the
country of which the applicant for registration is a citizen grants by law substantially
similar privileges to citizens of the Philippines, and such fact is officially certified,
with a certified true copy of the foreign law translated into the English language, by
the government of the foreign country to the Government of the Republic of the
Philippines. (As amended by R.A. No. 865).
SEC. 2-A. 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, tradename, service mark, heretofore or
hereafter appropriated, as in this section provided, shall be recognized and
protected in the same manner and to the same extent as are other property rights
known to the law. (As amended by R.A. No. 638)"
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
These provisions have been interpreted in Sterling Products International, Inc. v.
Farbenfabriken Bayer Actiengesellschaft (27 SCRA 1214 [1969]) in this way:
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.
xxx xxx xxx
... Adoption alone of a trademark would not give exclusive right thereto. Such right
grows out of their actual use. Adoption is not use. One way 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 trader's 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.
We ruled in Pagasa Industrial Corporation v. Court of Appeals (118 SCRA 526 [1982]):
3. The Trademark Law is very clear. It requires actual commercial use of the mark
prior to its registration. - There is no dispute that respondent corporation was the
first registrant, yet it failed to fully substantiate its claim that it used in trade or
business in the Philippines the subject mark; it did not present proof to invest it
with exclusive, continuous adoption of the trademark which should consist among
others, of considerable sales since its first use. The invoices (Exhibits 7, 7-a, and
8-b) submitted by respondent which were dated way back in 1957 show that the
zippers sent to the Philippines were to be used as "samples" and "of no commercial
value". The evidence for respondent must be clear, definite and free from
incosistencies. (Sy Ching v. Gaw Lui. 44 SCRA 148-149) "Samples" are not for
sale and therefore, the fact of exporting them to the Philippines cannot be
considered to be equivalent to the "use" contemplated by the law. Respondent did
not expect income from such "samples". "There were no receipts to establish sale,
and no proof were presented to show that they were subsequently sold in the
Philippines." (Pagasa Industrial Corp. v. Court of Appeals, 118 SCRA 526 [1982];
Emphasis Supplied)
The records show that the petitioner has never conducted any business in the Philippines.
It has never promoted its tradename or trademark in the Philippines. It has absolutely no
business goodwill in the Philippines. It is unknown to Filipinos except the very few who
6

may have noticed it while travelling abroad. It has never paid a single centavo of tax to the
Philippine government. Under the law, it has no right to the remedy it seeks.
There can be no question from the records that the petitioner has never used its tradename
or trademark in the Philippines.
The petitioner's witnesses, Mr. Mayumi Takayama and Mr. Hieoya Murakami, admitted
that:
1) The petitioner's company is not licensed to do business in the Philippines;
2) The petitioner's trademark is not registered under Philippine law; and
3) The petitioner's trademark is not being used on products in trade, manufacture, or
business in the Philippines.
It was also established from the testimony of Atty. Villasanta, petitioner's witness, that the
petitioner has never engaged in promotional activities in the Philippines to popularize its
trademark because not being engaged in business in the Philippines, there is no need for
advertising. The claim of the petitioner that millions of dollars have been spent in
advertising the petitioner's products, refers to advertising in Japan or other foreign places.
No promotional activities have been undertaken in the Philippines, by the petitioner's own
admission.
Any goodwill, reputation, or knowledge regarding the name Isetann is purely the work of
the private respondent. Evidence was introduced on the extensive promotional activities
of the private respondent.
It might be pertinent at this point to stress that what is involved in this case is not so much
a trademark as a tradename. Isetann Department Store, Inc. is the name of a store and
not of product sold in various parts of the country. This case must be differentiated from
cases involving products bearing such familiar names as "colgate", "Singer". "Toyota", or
"Sony" where the products are marketed widely in the Philippines. There is not product
with the name "Isetann" popularized with that brand name in the Philippines. Unless one
goes to the store called Isetann in Manila, he would never know what the name means.
Similarly, until a Filipino buyer steps inside a store called "Isetan" in Tokyo or Hongkong,
that name would be completely alien to him. The records show that among Filipinos, the
name cannot claim to be internationally well-known.
The rule is that the findings of facts of the Director of Patents are conclusive on the
Supreme Court, provided they are supported by substantial evidence. (Chua Che v. Phil.
Patent Office, 13 SCRA 67 [1965]; Chung Te v. Ng Kian Giab, 18 SCRA 747 [1966];
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Marvex Commercial Co., Inc. v. Petra Hawpia & Co., 18 SCRA 1178 [1966]; Lim Kiah v.
Kaynee, Co. 25 SCRA 485 [1968]; Kee Boc v. Dir. of Patents, 34 SCRA 570 [1970]).
The conclusions of the Director of Patents are likewise based on applicable law and
jurisprudence:
What is to be secured from unfair competition in a given territory is the trade which
one has in that particular territory. There is where his business is carried on where
the goodwill symbolized by the trademark has immediate value; where the infringer
may profit by infringement.
There is nothing new in what we now say. Plaintiff itself concedes (Brief for Plaintiff-
Appellant, p. 88) that the principle of territoriality of the Trademark Law has been
recognized in the Philippines, citing Ingenohl v. Walter E. Olsen, 71 L. ed. 762. As
Callmann puts it, the law of trademarks "rests upon the doctrine of nationality or
territoriality." (2 Callmann, Unfair Competition and Trademarks, 1945 ed., p. 1006)
(Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellachaft,
27 SCRA 1214 [1969]; Emphasis supplied)
The mere origination or adoption of a particular tradename without actual use thereof in
the market is insufficient to give any exclusive right to its use (Johnson Mfg. Co. v. Leader
Filling Stations Corp. 196 N.E. 852, 291 Mass. 394), even though such adoption is publicly
declared, such as by use of the name in advertisements, circulars, price lists, and on signs
and stationery. (Consumers Petrolum Co. v. Consumers Co. of ILL. 169 F 2d 153)
The Paris Convention for the Protection of Industrial Property does not automatically
exclude all countries of the world which have signed it from using a tradename which
happens to be used in one country. To illustrate - If a taxicab or bus company in a town in
the United Kingdom or India happens to use the tradename "Rapid Transportation", it does
not necessarily follow that "Rapid" can no longer be registered in Uganda, Fiji, or the
Philippines.
As stated by the Director of Patents -
Indeed, the Philippines is a signatory to this Treaty and, hence, we must honor our
obligation thereunder on matters concerning internationally known or well known
marks. However, this Treaty provision clearly indicated the conditions which must
exist before any trademark owner can claim and be afforded rights such as the
Petitioner herein seeks and those conditions are that:
a) the mark must be internationally known or well known;
7
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
b) the subject of the right must be a trademark, not a patent or copyright or anything
else;

c) the mark must be for use in the same or similar kinds of goods; and

d) 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)

The respondent registered its trademark in 1979. It has continuously used that name in
commerce. It has established a goodwill through extensive advertising. The people who
buy at Isetann Store do so because of Isetann's efforts. There is no showing that the
Japanese firm's registration in Japan or Hongkong has any influence whatsoever on the
Filipino buying public.

WHEREFORE, premises considered, the petition is hereby DISMISSED.

SO ORDERED.

8

G.R. No. 91332 July 16, 1993
PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., AND FABRIQUES OF
TABAC REUNIES, S.A., petitioners vs. THE COURT OF APPEALS AND FORTUNE
TOBACCO CORPORATION, respondents.
In the petition before us, petitioners Philip Morris, Inc., Benson and Hedges (Canada), Inc.,
and Fabriques of Tabac Reunies, S.A., are ascribing whimsical exercise of the faculty
conferred upon magistrates by Section 6, Rule 58 of the Revised Rules of Court when
respondent Court of Appeals lifted the writ of preliminary injunction it earlier had issued
against Fortune Tobacco Corporation, herein private respondent, from manufacturing and
selling "MARK" cigarettes in the local market.
Banking on the thesis that petitioners' respective symbols "MARK VII", "MARK TEN", and
"LARK", also for cigarettes, must be protected against unauthorized appropriation,
petitioners twice solicited the ancillary writ in the course the main suit for infringement but
the court of origin was unpersuaded.
Before we proceed to the generative facts of the case at bar, it must be emphasized that
resolution of the issue on the propriety of lifting the writ of preliminary injunction should not
be construed as a prejudgment of the suit below. Aware of the fact that the discussion we
are about to enter into involves a mere interlocutory order, a discourse on the aspect
infringement must thus be avoided. With these caveat, we shall now shift our attention to
the events which spawned the controversy.
As averred in the initial pleading, Philip Morris, Incorporated is a corporation organized
under the laws of the State of Virginia, United States of America, and does business at
100 Park Avenue, New York, New York, United States of America. The two other plaintiff
foreign corporations, which are wholly-owned subsidiaries of Philip Morris, Inc., are
similarly not doing business in the Philippines but are suing on an isolated transaction. As
registered owners "MARK VII", "MARK TEN", and "LARK" per certificates of registration
issued by the Philippine Patent Office on April 26, 1973, May 28, 1964, and March 25,
1964, plaintiffs-petitioners asserted that defendant Fortune Tobacco Corporation has no
right to manufacture and sell cigarettes bearing the allegedly identical or confusingly
similar trademark "MARK" in contravention of Section 22 of the Trademark Law, and
should, therefore, be precluded during the pendency of the case from performing the acts
complained of via a preliminary injunction (p. 75, Court of Appeals Rollo in AC-G.R. SP
No. 13132).
For its part, Fortune Tobacco Corporation admitted petitioners' certificates of registration
with the Philippine Patent Office subject to the affirmative and special defense on
misjoinder of party plaintiffs. Private respondent alleged further that it has been authorized
by the Bureau of Internal Revenue to manufacture and sell cigarettes bearing the
trademark "MARK", and that "MARK" is a common word which cannot be exclusively
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
appropriated (p.158, Court of Appeals Rollo in A.C.-G.R. SP No. 13132). On March 28,
1983, petitioners' prayer for preliminary injunction was denied by the Presiding Judge of
Branch 166 of the Regional Trial Court of the National Capital Judicial Region stationed at
Pasig, premised upon the following propositions:
Plaintiffs admit in paragraph 2 of the complaint that ". . . they are
not doing business in the Philippines and are suing on an isolated transaction . .
.". This simply means that they are not engaged in the sale, manufacture,
importation, expor[t]ation and advertisement of their cigarette products in the
Philippines. With this admission, defendant asks: ". . . how could defendant's
"MARK" cigarettes cause the former "irreparable damage" within the territorial
limits of the Philippines?" Plaintiffs maintain that since their trademarks are entitled
to protection by treaty obligation under Article 2 of the Paris Convention of which
the Philippines is a member and ratified by Resolution No. 69 of the Senate of the
Philippines and as such, have the force and effect of law under Section 12, Article
XVII of our Constitution and since this is an action for a violation or infringement of
a trademark or trade name by defendant, such mere allegation is sufficient even
in the absence of proof to support it. To the mind of the Court, precisely, this is the
issue in the main case to determine whether or not there has been an invasion of
plaintiffs' right of property to such trademark or trade name. This claim of plaintiffs
is disputed by defendant in paragraphs 6 and 7 of the Answer; hence, this cannot
be made a basis for the issuance of a writ of preliminary injunction.
There is no dispute that the First Plaintiff is the registered owner of trademar[k]
"MARK VII" with Certificate of Registration No. 18723, dated April 26,1973 while
the Second Plaintiff is likewise the registered owner of trademark "MARK TEN"
under Certificate of Registration No. 11147, dated May 28, 1963 and the Third
Plaintiff is a registrant of trademark "LARK" as shown by Certificate of Registration
No. 10953 dated March 23, 1964, in addition to a pending application for
registration of trademark "MARK VII" filed on November 21, 1980 under
Application Serial No. 43243, all in the Philippine Patent Office. In same the
manner, defendant has a pending application for registration of the trademark
"LARK" cigarettes with the Philippine Patent Office under Application Serial No.
44008. Defendant contends that since plaintiffs are "not doing business in the
Philippines" coupled the fact that the Director of Patents has not denied their
pending application for registration of its trademark "MARK", the grant of a writ of
preliminary injunction is premature. Plaintiffs contend that this act(s) of defendant
is but a subterfuge to give semblance of good faith intended to deceive the public
and patronizers into buying the products and create the impression that
defendant's goods are identical with or come from the same source as plaintiffs'
products or that the defendant is a licensee of plaintiffs when in truth and in fact
the former is not. But the fact remains that with its pending application, defendant
has embarked in the manufacturing, selling, distributing and advertising of "MARK"
9

cigarettes. The question of good faith or bad faith on the part of defendant are
matters which are evidentiary in character which have to be proven during the
hearing on the merits; hence, until and unless the Director of Patents has denied
defendant's application, the Court is of the opinion and so holds that issuance a
writ of preliminary injunction would not lie.
There is no question that defendant has been authorized by the Bureau of Internal
Revenue to manufacture cigarettes bearing the trademark "MARK" (Letter of
Ruben B. Ancheta, Acting Commissioner addressed to Fortune Tobacco
Corporation dated April 3, 1981, marked as Annex "A", defendant's
"OPPOSITION, etc." dated September 24, 1982). However, this authority is
qualified . . . that the said brands have been accepted and registered by the Patent
Office not later than six (6) months after you have been manufacturing the
cigarettes and placed the same in the market." However, this grant ". . . does not
give you protection against any person or entity whose rights may be prejudiced
by infringement or unfair competition in relation to your indicated
trademarks/brands". As aforestated, the registration of defendant's application is
still pending in the Philippine Patent Office.
It has been repeatedly held in this jurisdiction as well as in the United States that
the right or title of the applicant for injunction remedy must be clear and free from
doubt. Because of the disastrous and painful effects of an injunction, Courts should
be extremely careful, cautious and conscionable in the exercise of its discretion
consistent with justice, equity and fair play.
There is no power the exercise of which is more delicate which requires
greater caution, deliberation, and sound discretion, or (which is) more
dangerous in a doubtful case than the issuing of an injunction; it is the
strong arm of equity that never ought to be extended unless to cases of
great injury, where courts of law cannot afford an adequate or
commensurate remedy in damages. The right must be clear, the injury
impending or threatened, so as to be averted only by the protecting
preventive process of injunction. (Bonaparte v. Camden, etc. N. Co., 3 F.
Cas. No. 1, 617, Baldw. 205, 217.)
Courts of equity constantly decline to lay down any rule which injunction
shall be granted or withheld. There is wisdom in this course, for it is
impossible to foresee all exigencies of society which may require their aid
to protect rights and restrain wrongs. (Merced M. Go v. Freemont, 7 Gal.
317, 321; 68 Am. Dec. 262.)
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
It is the strong arm of the court; and to render its operation begin and
useful, it must be exercised with great discretion, and when necessary
requires it. (Attorney-General v. Utica Inc. Co., P. John Ch. (N.Y.) 371.)
Having taken a panoramic view of the position[s] of both parties as viewed from
their pleadings, the picture reduced to its minimum size would be this: At the
crossroads are the two (2) contending parties, plaintiffs vigorously asserting the
rights granted by law, treaty and jurisprudence to restrain defendant in its activities
of manufacturing, selling, distributing and advertising its "MARK" cigarettes and
now comes defendant who countered and refused to be restrained claiming that it
has been authorized temporarily by the Bureau of Internal Revenue under certain
conditions to do so as aforestated coupled by its pending application for
registration of trademark "MARK" in the Philippine Patent Office. This
circumstance in itself has created a dispute between the parties which to the mind
of the Court does not warrant the issuance of a writ of preliminary injunction.
It is well-settled principle that courts of equity will refuse an application for
the injunctive remedy where the principle of law on which the right to
preliminary injunction rests is disputed and will admit of doubt, without a
decision of the court of law establishing such principle although satisfied
as to what is a correct conclusion of law upon the facts. The fact, however,
that there is no such dispute or conflict does not in itself constitute a
justifiable ground for the court to refuse an application for the injunctive
relief. (Hackensack Impr. Commn. v. New Jersey Midland P. Co., 22 N.J.
Eg. 94.)
Hence, the status quo existing between the parties prior to the filing of this case
should be maintained. For after all, an injunction, without reference to the parties,
should be violent, vicious nor even vindictive. (pp. 338-341, Rollo in G.R. No.
91332.)
In the process of denying petitioners' subsequent motion for reconsideration of the order
denying issuance of the requested writ, the court of origin took cognizance of the
certification executed on January 30, 1984 by the Philippine Patent Office attesting to the
fact that private respondent's application for registration is still pending appropriate action.
Apart from this communication, what prompted the trial court judge to entertain the idea of
prematurity and untimeliness of petitioners' application for a writ of preliminary injunction
was the letter from the Bureau of Internal Revenue date February 2, 1984 which reads:
MRS. TERESITA GANDIONGCO OLEDAN
Legal Counsel
Fortune Tobacco Corporation
10

Madam:
In connection with your letter dated January 25, 1984, reiterating your
query as to whether your label approval automatically expires or becomes
null and void after six (6) months if the brand is not accepted and by the
patent office, please be informed that no provision in the Tax Code or
revenue regulation that requires an applicant to comply with the
aforementioned condition order that his label approved will remain valid
and existing.
Based on the document you presented, it shows that registration of this
particular label still pending resolution by the Patent Office. These being
so , you may therefore continue with the production said brand of cigarette
until this Office is officially notified that the question of ownership of
"MARK" brand is finally resolved.
Very truly yours,
TEODORO D. PAREO
Chief, Manufactured Tobacco
Tax Division
TAN-P6531-D2830-A-6
(p. 348, Rollo.)
It appears from the testimony of Atty. Enrique Madarang, Chief of the Trademark Division
of the then Philippine Patent Office that Fortune's application for its trademark is still
pending before said office (p. 311, Rollo).
Petitioners thereafter cited supervening events which supposedly transpired since March
28, 1983, when the trial court first declined issuing a writ of preliminary injunction, that
could alter the results of the case in that Fortune's application had been rejected, nay,
barred by the Philippine Patent Office, and that the application had been forfeited by
abandonment, but the trial court nonetheless denied the second motion for issuance of the
injunctive writ on April 22, 1987, thus:
For all the prolixity of their pleadings and testimonial evidence, the plaintiffs-
movants have fallen far short of the legal requisites that would justify the grant of
the writ of preliminary injunction prayed for. For one, they did not even bother to
establish by competent evidence that the products supposedly affected adversely
by defendant's trademark now subject of an application for registration with the
Philippine Patents Office, are in actual use in the Philippines. For another, they
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
concentrated their fire on the alleged abandonment and forfeiture by defendant of
said application for registration.
The Court cannot help but take note of the fact that in their complaint plaintiffs
included a prayer for issuance preliminary injunction. The petition was duly heard,
and thereafter matter was assiduously discussed lengthily and resolved against
plaintiffs in a 15-page Order issued by the undersigned's predecessor on March
28, 1983. Plaintiffs' motion for reconsideration was denied in another well-argued
8 page Order issued on April 5, 1984,, and the matter was made to rest.
However, on the strength of supposed changes in the material facts of this case,
plaintiffs came up with the present motion citing therein the said changes which
are: that defendant's application had been rejected and barred by the Philippine
Patents Office, and that said application has been deemed abandoned and
forfeited. But defendant has refiled the same.
Plaintiffs' arguments in support of the present motion appear to be a mere rehash
of their stand in the first above-mentioned petition which has already been ruled
upon adversely against them. Granting that the alleged changes in the material
facts are sufficient grounds for a motion seeking a favorable grant of what has
already been denied, this motion just the same cannot prosper.
In the first place there is no proof whatsoever that any of plaintiffs' products which
they seek to protect from any adverse effect of the trademark applied for by
defendant, is in actual use and available for commercial purposes anywhere in the
Philippines. Secondly as shown by plaintiffs' own evidence furnished by no less
than the chief of Trademarks Division of the Philippine Patent Office, Atty. Enrique
Madarang, the abandonment of an application is of no moment, for the same can
always be refiled. He said there is no specific provision in the rules prohibiting such
refiling (TSN, November 21, 1986, pp. 60 & 64, Raviera). In fact, according to
Madarang, the refiled application of defendant is now pending before the Patents
Office. Hence, it appears that the motion has no leg to stand on. (pp. 350-
351, Rolloin G. R. No. 91332.)
Confronted with this rebuff, petitioners filed a previous petition for certiorari before the
Court, docketed as G.R. No. 78141, but the petition was referred to the Court of Appeals.
The Court of Appeals initially issued a resolution which set aside the court of origin's order
dated April 22, 1987, and granted the issuance of a writ of preliminary injunction enjoining
Fortune, its agents, employees, and representatives, from manufacturing, selling, and
advertising "MARK" cigarettes. The late Justice Cacdac, speaking for the First Division of
the Court of Appeals in CA-G.R. SP No. 13132, remarked:
11

There is no dispute that petitioners are the registered owners of the trademarks for
cigarettes "MARK VII", "MARK TEN", and "LARK".(Annexes B, C and D, petition).
As found and reiterated by the Philippine Patent Office in two (2) official
communications dated April 6, 1983 and January 24, 1984, the trademark "MARK"
is "confusingly similar" to the trademarks of petitioners, hence registration was
barred under Sec. 4 (d) of Rep. Act. No. 166, as amended (pp. 106, 139,
SCA rollo). In a third official communication dated April 8, 1986, the trademark
application of private respondent for the "MARK" under Serial No. 44008 filed on
February 13, 1981 which was declared abandoned as of February 16, 1986, is now
deemed forfeited, there being no revival made pursuant to Rule 98 of the Revised
Rules of Practitioners in Trademark Cases." (p. 107, CA rollo). The foregoing
documents or communications mentioned by petitioners as "the changes in
material facts which occurred after March 28, 1983", are not also questioned by
respondents.
Pitted against the petitioners' documentary evidence, respondents pointed to (1)
the letter dated January 30, 1979 (p. 137, CA rollo) of Conrado P. Diaz, then Acting
Commissioner of Internal Revenue, temporarily granting the request of private
respondent for a permit to manufacture two (2) new brands of cigarettes one of
which is brand "MARK" filter-type blend, and (2) the certification dated September
26, 1986 of Cesar G. Sandico, Director of Patents (p. 138, CA rollo) issued upon
the written request of private respondents' counsel dated September 17, 1986
attesting that the records of his office would show that the "trademark MARK" for
cigarettes is now the subject of a pending application under Serial No. 59872 filed
on September 16, 1986.
Private respondent's documentary evidence provides the reasons neutralizing or
weakening their probative values. The penultimate paragraph of Commissioner
Diaz' letter of authority reads:
Please be informed further that the authority herein granted does not give
you protection against any person or entity whose rights may be prejudiced
by infringement or unfair competition in relation to your above-named
brands/trademark.
while Director Sandico's certification contained similar conditions as follows:
This Certification, however, does not give protection as against any person
or entity whose right may be prejudiced by infringement or unfair
competition in relation to the aforesaid trademark nor the right to register if
contrary to the provisions of the Trademark Law, Rep. Act No. 166 as
amended and the Revised Rules of Practice in Trademark Cases.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
The temporary permit to manufacture under the trademark "MARK" for cigarettes
and the acceptance of the second application filed by private respondent in the
height of their dispute in the main case were evidently made subject to the outcome
of the said main case or Civil Case No. 47374 of the respondent Court. Thus, the
Court has not missed to note the absence of a mention in the Sandico letter of
September 26, 1986 of any reference to the pendency of the instant action filed on
August 18, 1982. We believe and hold that petitioners have shown a prima
facie case for the issuance of the writ of prohibitory injunction for the purposes
stated in their complaint and subsequent motions for the issuance of the prohibitory
writ. (Buayan Cattle Co. vs. Quintillan, 125 SCRA 276)
The requisites for the granting of preliminary injunction are the existence of the
right protected and the facts against which the injunction is to be directed as
violative of said right. (Buayan Cattle Co. vs. Quintillan, supra; Ortigas & Co. vs.
Ruiz, 148 SCRA 326). It is a writ framed according to the circumstances of the
case commanding an act which the Court regards as essential to justice and
restraining an act it deems contrary to equity and good conscience (Rosauro vs.
Cuneta, 151 SCRA 570). If it is not issued, the defendant may, before final
judgment, do or continue the doing of the act which the plaintiff asks the court to
restrain, and thus make ineffectual the final judgment rendered afterwards granting
the relief sought by the plaintiff (Calo vs. Roldan, 76 Phil. 445). Generally, its grant
or denial rests upon the sound discretion of the Court except on a clear case of
abuse (Belish Investment & Finance Co. vs. State House, 151 SCRA 636).
Petitioners' right of exclusivity to their registered trademarks being clear and
beyond question, the respondent court's denial of the prohibitive writ constituted
excess of jurisdiction and grave abuse discretion. If the lower court does not grant
preliminary injunction, the appellate court may grant the same. (Service
Specialists, Inc. vs. Sheriff of Manila, 145 SCRA 139). (pp. 165-167, Rollo in G.R.
No. 91332.)
After private respondent Fortune's motion for reconsideration was rejected, a motion to
dissolve the disputed writ of preliminary injunction with offer to post a counterbond was
submitted which was favorably acted upon by the Court of Appeals, premised on the filing
of a sufficient counterbond to answer for whatever perjuicio petitioners may suffer as a
result thereof, to wit:
The private respondent seeks to dissolve the preliminary injunction previously
granted by this Court with an offer to file a counterbond. It was pointed out in its
supplemental motion that lots of workers employed will be laid off as a
consequence of the injunction and that the government will stand to lose the
amount of specific taxes being paid by the
private respondent. The specific taxes being paid is the sum total of P120,120,
295.98 from January to July 1989.
12

The petitioners argued in their comment that the damages caused by the
infringement of their trademark as well as the goodwill it generates are incapable
of pecuniary estimation and monetary evaluation and not even the counterbond
could adequately compensate for the damages it will incur as a result of the
dissolution of the bond. In addition, the petitioner further argued that doing
business in the Philippines is not relevant as the injunction pertains to an
infringement of a trademark right.
After a thorough re-examination of the issues involved and the arguments
advanced by both parties in the offer to file a counterbond and the opposition
thereto, WE believe that there are sound and cogent reasons for US to grant the
dissolution of the writ of preliminary injunction by the offer of the private respondent
to put up a counterbond to answer for whatever damages the petitioner may suffer
as a consequence of the dissolution of the preliminary injunction.
The petitioner will not be prejudiced nor stand to suffer irreparably as a
consequence of the lifting of the preliminary injunction considering that they are
not actually engaged in the manufacture of the cigarettes with the trademark in
question and the filing of the counterbond will amply answer for such damages.
While the rule is that an offer of a counterbond does not operate to dissolve an
injunction previously granted, nevertheless, it is equally true that an injunction
could be dissolved only upon good and valid grounds subject to the sound
discretion of the court. As WE have maintained the view that there are sound and
good reasons to lift the preliminary injunction, the motion to file a counterbond is
granted. (pp. 53-54, Rollo in G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-examination geared towards reimposition
of the writ of preliminary injunction but to no avail (p. 55, Rollo in G.R. No. 91332).
Hence, the instant petition casting three aspersions that respondent court gravely abused
its discretion tantamount to excess of jurisdiction when:
I. . . . it required, contrary to law and jurisprudence, that in order that petitioners
may suffer irreparable injury due to the lifting of the injunction, petitioners should
be using actually their registered trademarks in commerce in the Philippines;
II. . . . it lifted the injunction in violation of section 6 of Rule 58 of the Rules of Court;
and
III. . . . after having found that the trial court had committed grave abuse of
discretion and exceeded its jurisdiction for having refused to issue the writ of
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
injunction to restrain private respondent's acts that are contrary to equity and good
conscience, it made a complete about face for legally insufficient grounds and
authorized the private respondent to continue performing the very same acts that
it had considered contrary to equity and good conscience, thereby ignoring not
only the mandates of the Trademark Law, the international commitments of the
Philippines, the judicial admission of private respondent that it will have no more
right to use the trademark "MARK" after the Director of Patents shall have rejected
the application to register it, and the admonitions of the Supreme Court. (pp. 24-
25, Petition; pp. 25-26, Rollo.)
To sustain a successful prosecution of their suit for infringement, petitioners, as foreign
corporations not engaged in local commerce, rely on section 21-A of the Trademark Law
reading as follows:
Sec. 21-A. Any foreign corporation or juristic person to which a mark or trade-name
has been registered or assigned under this act may bring an action hereunder for
infringement, for unfair competition, or false designation of origin and false
description, whether or not it has been licensed to do business in the Philippines
under Act Numbered Fourteen hundred and fifty-nine, as amended, otherwise
known as the Corporation Law, at the time it brings complaint: Provided, That the
country of which the said foreign corporation or juristic person is a citizen or in
which it is domiciled, by treaty, convention or law, grants a similar privilege to
corporate or juristic persons of the Philippines. (As inserted by Sec. 7 of Republic
Act No. 638.)
to drive home the point that they are not precluded from initiating a cause of action
in the Philippines on account of the principal perception that another entity is
pirating their symbol without any lawful authority to do so. Judging from a perusal
of the aforequoted Section 21-A, the conclusion reached by petitioners is certainly
correct for the proposition in support thereof is embedded in the Philippine legal
jurisprudence.
Indeed, it was stressed in General Garments Corporation vs. Director of Patents (41 SCRA
50 [1971]) by then Justice (later Chief Justice) Makalintal that:
Parenthetically, it may be stated that the ruling in the Mentholatum case was
subsequently derogated when Congress, purposely to "counteract the effects" of
said case, enacted Republic Act No. 638, inserting Section 21-A in the Trademark
Law, which allows a foreign corporation or juristic person to bring an action in
Philippine courts for infringement of a mark or tradename, for unfair competition,
or false designation of origin and false description, "whether or not it has been
licensed to do business in the Philippines under Act Numbered Fourteen hundred
13

and fifty-nine, as amended, otherwise known as the Corporation Law, at the time
it brings complaint."
Petitioner argues that Section 21-A militates against respondent's capacity to
maintain a suit for cancellation, since it requires, before a foreign corporation may
bring an action, that its trademark or tradename has been registered under the
Trademark Law. The argument misses the essential point in the said provision,
which is that the foreign corporation is allowed thereunder to sue "whether or not
it has been licensed to do business in the Philippines" pursuant to the Corporation
Law (precisely to counteract the effects of the decision in the Mentholatum case).
(at p. 57.)
However, on May, 21, 1984, Section 21-A, the provision under consideration, was qualified
by this Court in La Chemise Lacoste S.A. vs. Fernandez (129 SCRA 373 [1984]), to the
effect that a foreign corporation not doing business in the Philippines may have the right
to sue before Philippine Courts, but existing adjective axioms require that qualifying
circumstances necessary for the assertion of such right should first be affirmatively
pleaded (2 Agbayani Commercial Laws of the Philippines, 1991 Ed., p. 598; 4 Martin,
Philippine Commercial Laws, Rev. Ed., 1986, p. 381). Indeed, it is not sufficient for a
foreign corporation suing under Section 21-A to simply allege its alien origin. Rather, it
must additionally allege its personality to sue. Relative to this condition precedent, it may
be observed that petitioners were not remiss in averring their personality to lodge a
complaint for infringement (p. 75, Rollo in AC-G.R. SP No. 13132) especially so when they
asserted that the main action for infringement is anchored on an isolated transaction (p.
75, Rollo in AC-G.R. SP No. 13132; Atlantic Mutual Ins. Co. vs. Cebu Stevedoring Co.,
Inc., 17 SCRA 1037 (1966), 1 Regalado, Remedial Law Compendium, Fifth Rev. Ed.,
1988, p. 103).
Another point which petitioners considered to be of significant interest, and which they
desire to impress upon us is the protection they enjoy under the Paris Convention of 1965
to which the Philippines is a signatory. Yet, insofar as this discourse is concerned, there is
no necessity to treat the matter with an extensive response because adherence of the
Philippines to the 1965 international covenant due to pact sunt servanda had been
acknowledged in La Chemise (supra at page 390).
Given these confluence of existing laws amidst the cases involving trademarks, there can
be no disagreement to the guiding principle in commercial law that foreign corporations
not engaged in business in the Philippines may maintain a cause of action for infringement
primarily because of Section 21-A of the Trademark Law when the legal standing to sue is
alleged, which petitioners have done in the case at hand.
In assailing the justification arrived at by respondent court when it recalled the writ of
preliminary injunction, petitioners are of the impression that actual use of their trademarks
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
in Philippine commercial dealings is not an indispensable element under Article 2 of the
Paris Convention in that:
(2) . . . . no condition as to the possession of a domicile or establishment in the
country where protection is claimed may be required of persons entitled to the
benefits of the Union for the enjoyment of any industrial property of any industrial
property rights. (p. 28, Petition; p. 29, Rollo in G.R. No. 91332.)
Yet petitioners' perception along this line is nonetheless resolved by Sections 2 and 2-A
of the Trademark Law which speak loudly, about necessity of actual commercial use of
the trademark in the local forum:
Sec. 2. What are registrable. Trademarks, tradenames and service marks
owned by persons, corporations, partnerships or associations domiciled in the
Philippines and by persons, corporations, partnerships or associations domiciled
in any foreign country may be registered in accordance with the provisions of this
Act; Provided, That said trademarks, tradenames, or service marks are actually in
use in commerce and services not less than two months in the Philippines before
the time the applications for registration are filed; And provided, further, That the
country of which the applicant for registration is a citizen grants by law substantially
similar privileges to citizens of the Philippines, and such fact is officially certified,
with a certified true copy of the foreign law translated into the English language, by
the government of the foreign country to the Government of the Republic of the
Philippines. (As amended by R.A. No. 865).
Sec. 2-A. 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, tradename, service mark, heretofore or
hereafter appropriated, as in this section provided, shall be recognized and
protected in the same manner and to the same extent as are other property rights
known to the law. (As amended by R.A. No. 638). (Kabushi Kaisha Isetan vs.
Intermediate Appellate Court, 203 SCRA 583 [1991], at pp. 589-590; emphasis
supplied.)
Following universal acquiescence and comity, our municipal law on trademarks regarding
the requirement of actual use in the Philippines must subordinate an international
agreement inasmuch as the apparent clash is being decided by a municipal tribunal
(Mortensen vs. Peters, Great Britain, High Court of Judiciary of Scotland, 1906, 8 Sessions
14

93; Paras, International Law and World Organization, 1971 Ed., p. 20). Withal, the fact that
international law has been made part of the law of the land does not by any means imply
the primacy of international law over national law in the municipal sphere. Under the
doctrine of incorporation as applied in most countries, rules of international law are given
a standing equal, not superior, to national legislative enactments (Salonga and Yap, Public
International Law, Fourth ed., 1974, p. 16).
The aforequoted basic provisions of our Trademark Law, according to Justice Gutierrez,
Jr., in Kabushi Kaisha Isetan vs. Intermediate Appellate Court (203 SCRA 583 [1991]),
have been construed in this manner:
A fundamental principle of Philippine Trademark Law is that actual use in
commerce in the Philippines is a pre-requisite to the acquisition of ownership over
a trademark or a tradename.
xxx xxx xxx
These provisions have been interpreted in Sterling Products International, Inc. v.
Farbenfabriken Bayer Actiengesellschaft (27 SCRA 1214 [1969]) in this way:
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.
xxx xxx xxx
. . . 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 trader's 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.
We rule[d] in Pagasa Industrial Corporation v. Court of Appeals (118 SCRA 526
[1982]):
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
3. The Trademark law is very clear. It requires actual commercial use of the mark
prior to its registration. There is no dispute that respondent corporation was the
first registrant, yet it failed to fully substantiate its claim that it used in trade or
business in the Philippines the subject mark; it did not present proof to invest it
with exclusive, continuous adoption of the trademark which should consist among
others, of considerable sales since its first use. The invoices (Exhibits 7, 7-a, and
8-b) submitted by respondent which were dated way back in 1957 show that the
zippers sent to the Philippines were to be used as "samples" and "of no commercial
value". The evidence for respondent must be clear, definite and free from
inconsistencies. (Sy Ching v. Gaw Lui, 44 SCRA 148-149) "Samples" are not for
sale and therefore, the fact of exporting them to the Philippines cannot be
considered to be equivalent to the "use" contemplated by the law. Respondent did
not expect income from such "samples". There were no receipts to establish sale,
and no proof were presented to show that they were subsequently sold in the
Philippines. (Pagasa Industrial Corp. v. Court of Appeals, 118 SCRA 526 [1982];
Emphasis Supplied)
The records show that the petitioner has never conducted any business in the
Philippines. It has never promoted its tradename or trademark in the Philippines.
It is unknown to Filipino except the very few who may have noticed it while
travelling abroad. It has never paid a single centavo of tax to the Philippine
government. Under the law, it has no right to the remedy it seeks. (at pp. 589-591.)
In other words, petitioners may have the capacity to sue for infringement irrespective of
lack of business activity in the Philippines on account of Section 21-A of the Trademark
Law but the question whether they have an exclusive right over their symbol as to justify
issuance of the controversial writ will depend on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of the same law. It is thus incongruous for
petitioners to claim that when a foreign corporation not licensed to do business in
Philippines files a complaint for infringement, the entity need not be actually using its
trademark in commerce in the Philippines. Such a foreign corporation may have the
personality to file a suit for infringement but it may not necessarily be entitled to protection
due to absence of actual use of the emblem in the local market.
Going back to the first assigned error, we can not help but notice the manner the ascription
was framed which carries with it the implied but unwarranted assumption of the existence
of petitioners' right to relief. It must be emphasized that this aspect of exclusive dominion
to the trademarks, together with the corollary allegation of irreparable injury, has yet to be
established by petitioners by the requisite quantum of evidence in civil cases. It cannot be
denied that our reluctance to issue a writ of preliminary injunction is due to judicial
deference to the lower courts, involved as there is mere interlocutory order (Villarosa vs.
Teodoro, Sr., 100 Phil. 25 [1956]). In point of adjective law, the petition has its roots on a
remedial measure which is but ancillary to the main action for infringement still pending
15

factual determination before the court of origin. It is virtually needless to stress the obvious
reality that critical facts in an infringement case are not before us more so when even
Justice Feliciano's opinion observes that "the evidence is scanty" and that petitioners
"have yet to submit copies or photographs of their registered marks as used in cigarettes"
while private respondent has not, for its part, "submitted the actual labels or packaging
materials used in selling its "Mark" cigarettes." Petitioners therefore, may not be permitted
to presume a given state of facts on their so called right to the trademarks which could be
subjected to irreparable injury and in the process, suggest the fact of infringement. Such
a ploy would practically place the cart ahead of the horse. To our mind, what appears to
be the insurmountable barrier to petitioners' portrayal of whimsical exercise of discretion
by the Court of Appeals is the well-taken remark of said court that:
The petitioner[s] will not be prejudiced nor stand to suffer irreparably as a
consequence of the lifting of the preliminary injunction considering that they are
not actually engaged in the manufacture of the cigarettes with the trademark in
question and the filing of the counterbond will amply answer for such damages. (p.
54. Rollo in G.R. No. 91332.)
More telling are the allegations of petitioners in their complaint (p. 319, Rollo G.R. No.
91332) as well as in the very petition filed with this Court (p. 2, Rollo in G.R. No. 91332)
indicating that they are not doing business in the Philippines, for these frank
representations are inconsistent and incongruent with any pretense of a right which can
breached (Article 1431, New Civil Code; Section 4, Rule 129; Section 3, Rule 58, Revised
Rules of Court). Indeed, to be entitled to an injunctive writ, petitioner must show that there
exists a right to be protected and that the facts against which injunction is directed are
violative of said right (Searth Commodities Corporation vs. Court of Appeals, 207 SCRA
622 [1992]). 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 (Unno Commercial Enterprises, Inc. vs.
General Milling Corporation, 120 SCRA 804 [1983]).
Even if we disregard the candid statements of petitioners anent the absence of business
activity here and rely on the remaining statements of the complaint below, still, when these
averments are juxtaposed with the denials and propositions of the answer submitted by
private respondent, the supposed right of petitioners to the symbol have thereby been
controverted. This is not to say, however, that the manner the complaint was traversed by
the answer is sufficient to tilt the scales of justice in favor of private respondent. Far from
it. What we are simply conveying is another basic tenet in remedial law that before
injunctive relief may properly issue, complainant's right or title must be undisputed and
demonstrated on the strength of one's own title to such a degree as to unquestionably
exclude dark clouds of doubt, rather than on the weakness of the adversary's evidence,
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
inasmuch as the possibility of irreparable damage, without prior proof of transgression of
an actual existing right, is no ground for injunction being mere damnum absque
injuria (Talisay-Silay Milling Co., Inc. vs. CFI of Negros Occidental, 42 SCRA 577 [1971];
Francisco, Rules of Court, Second ed., 1985, p. 225; 3 Martin, Rules of Court, 1986 ed.,
p. 82).
On the economic repercussion of this case, we are extremely bothered by the thought of
having to participate in throwing into the streets Filipino workers engaged in the
manufacture and sale of private respondent's "MARK" cigarettes who might be retrenched
and forced to join the ranks of the many unemployed and unproductive as a result of the
issuance of a simple writ of preliminary injunction and this, during the pendency of the case
before the trial court, not to mention the diminution of tax revenues represented to be close
to a quarter million pesos annually. On the other hand, if the status quo is maintained,
there will be no damage that would be suffered by petitioners inasmuch as they are not
doing business in the Philippines.
With reference to the second and third issues raised by petitioners on the lifting of the writ
of preliminary injunction, it cannot be gainsaid that respondent court acted well within its
prerogatives under Section 6, Rule 58 of the Revised Rules of Court:
Sec. 6. Grounds for objection to, or for motion of dissolution of injunction. The
injunction may be refused or, if granted ex parte, may be dissolved, upon the
insufficiency of the complaint as shown by the complaint itself, with or without
notice to the adverse party. It may also be refused or dissolved on other grounds
upon affidavits on the part of the defendants which may be opposed by the plaintiff
also by affidavits. It may further be refused or, if granted, may be dissolved, if it
appears after hearing that although the plaintiff is entitled to the injunction, the
issuance or continuance thereof, as the case may be, would cause great damage
to the defendant while the plaintiff can be fully compensated for such damages as
he may suffer, and the defendant files a bond in an amount fixed by the judge
conditioned that he will pay all damages which the plaintiff may suffer by the refusal
or the dissolution of the injunction. If it appears that the extent of the preliminary
injunction granted is too great, it must be modified.
Under the foregoing rule, injunction may be refused, or, if granted, may be dissolved, on
the following instances:
(1) If there is insufficiency of the complaint as shown by the allegations
therein. Refusal or dissolution may be granted in this case with or without notice
to the adverse party.
(2) If it appears after hearing that although the plaintiff is entitled to the injunction,
the issuance or continuance thereof would cause great damage to the defendant,
16
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
while the plaintiff can be fully compensated for such damages as he may suffer.
The defendant, in this case, must file a bond in an amount fixed by the judge
conditioned that he will pay all damages which plaintiff may suffer by the refusal or
the dissolution of the injunction.

(3) On the other grounds upon affidavits on the part of the defendant which may
be opposed by the plaintiff also affidavits.

Modification of the injunction may also be ordered by the court if it appears that the
extent of the preliminary injunction granted is too great. (3 Martin, Rules of Court,
1986 ed., p. 99; Francisco, supra, at p. 268.)

In view of the explicit representation of petitioners in the complaint that they are not
engaged in business in the Philippines, it inevitably follows that no conceivable damage
can be suffered by them not to mention the foremost consideration heretofore discussed
on the absence of their "right" to be protected. At any rate, and assuming in gratia
argumenti that respondent court erroneously lifted the writ it previously issued, the same
may be cured by appeal and not in the form of a petition for certiorari (Clark vs. Philippine
Ready Mix Concrete Co., 88 Phil. 460 [1951]). Verily, and mindful of the rule that a writ of
preliminary injunction is an interlocutory order which is always under the control of the
court before final judgment, petitioners' criticism must fall flat on the ground, so to speak,
more so when extinction of the previously issued writ can even be made without previous
notice to the adverse party and without a hearing (Caluya vs. Ramos, 79 Phil. 640 [1974];
3 Moran, Rules of Court, 1970 ed., p. 81).

WHEREFORE, the petition is hereby DISMISSED and the Resolutions of the Court of
Appeals dated September 14, 1989 and November 29, 1989 are hereby AFFIRMED.

SO ORDERED.

17

G.R. No. 158589 June 27, 2006
PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE
TABAC REUNIES, S.A., (now known as PHILIP MORRIS PRODUCTS
S.A.), Petitioners, vs. FORTUNE TOBACCO CORPORATION, Respondent.
Via this petition for review under Rule 45 of the Rules of Court, herein petitioners Philip
Morris, Inc., Benson & Hedges (Canada) Inc., and Fabriques de Tabac Reunies, S.A. (now
Philip Morris Products S.A.) seek the reversal and setting aside of the following issuances
of the Court of Appeals (CA) in CA-G.R. CV No. 66619, to wit:
1. Decision dated January 21, 20031 affirming an earlier decision of the Regional
Trial Court of Pasig City, Branch 166, in its Civil Case No. 47374, which dismissed
the complaint for trademark infringement and damages thereat commenced by the
petitioners against respondent Fortune Tobacco Corporation; and
2. Resolution dated May 30, 20032 denying petitioners motion for reconsideration.
Petitioner Philip Morris, Inc., a corporation organized under the laws of the State of
Virginia, United States of America, is, per Certificate of Registration No. 18723 issued on
April 26, 1973 by the Philippine Patents Office (PPO), the registered owner of the
trademark "MARK VII" for cigarettes. Similarly, petitioner Benson & Hedges (Canada), Inc.,
a subsidiary of Philip Morris, Inc., is the registered owner of the trademark "MARK TEN"
for cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as can be
seen in Trademark Certificate of Registration No. 19053, another subsidiary of Philip
Morris, Inc., the Swiss company Fabriques de Tabac Reunies, S.A., is the assignee of the
trademark "LARK," which was originally registered in 1964 by Ligget and Myers Tobacco
Company. On the other hand, respondent Fortune Tobacco Corporation, a company
organized in the Philippines, manufactures and sells cigarettes using the trademark
"MARK."
The legal dispute between the parties started when the herein petitioners, on the claim
that an infringement of their respective trademarks had been committed, filed, on August
18, 1982, a Complaint for Infringement of Trademark and Damages against respondent
Fortune Tobacco Corporation, docketed as Civil Case No. 47374 of the Regional Trial
Court of Pasig, Branch 166.
The decision under review summarized what happened next, as follows:
In the Complaint xxx with prayer for the issuance of a preliminary injunction, [petitioners]
alleged that they are foreign corporations not doing business in the Philippines and are
suing on an isolated transaction. xxx they averred that the countries in which they are
domiciled grant xxx to corporate or juristic persons of the Philippines the privilege to bring
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
action for infringement, xxx without need of a license to do business in those countries.
[Petitioners] likewise manifested [being registered owners of the trademark "MARK VII"
and "MARK TEN" for cigarettes as evidenced by the corresponding certificates of
registration and an applicant for the registration of the trademark "LARK MILDS"]. xxx.
[Petitioners] claimed that they have registered the aforementioned trademarks in their
respective countries of origin and that, by virtue of the long and extensive usage of the
same, these trademarks have already gained international fame and acceptance. Imputing
bad faith on the part of the [respondent], petitioners claimed that the [respondent], without
any previous consent from any of the [petitioners], manufactured and sold cigarettes
bearing the identical and/or confusingly similar trademark "MARK" xxx Accordingly, they
argued that [respondents] use of the trademark "MARK" in its cigarette products have
caused and is likely to cause confusion or mistake, or would deceive purchasers and the
public in general into buying these products under the impression and mistaken belief that
they are buying [petitioners] products.
Invoking the provisions of the Paris Convention for the Protection of Industrial and
Intellectual Property (Paris Convention, for brevity), to which the Philippines is a signatory
xxx, [petitioners] pointed out that upon the request of an interested party, a country of the
Union may prohibit the use of a trademark which constitutes a reproduction, imitation, or
translation of a mark already belonging to a person entitled to the benefits of the said
Convention. They likewise argued that, in accordance with Section 21-A in relation to
Section 23 of Republic Act 166, as amended, they are entitled to relief in the form of
damages xxx [and] the issuance of a writ of preliminary injunction which should be made
permanent to enjoin perpetually the [respondent] from violating [petitioners] right to the
exclusive use of their aforementioned trademarks.
[Respondent] filed its Answer xxx denying [petitioners] material allegations and xxx
averred [among other things] xxx that "MARK" is a common word, which cannot particularly
identify a product to be the product of the [petitioners] xxx
xxx
lawphil.net
xxx xxx.
Meanwhile, after the [respondent] filed its Opposition (Records, Vo. I, p. 26), the matter of
the [petitioners] prayer for the issuance of a writ of preliminary injunction was negatively
resolved by the court in an Order xxx dated March 28, 1973. [The incidental issue of the
propriety of an injunction would eventually be elevated to the CA and would finally be
resolved by the Supreme Court in its Decision dated July 16, 1993 in G.R. No. 91332].
xxx.
xxx xxx xxx
18

After the termination of the trial on the merits xxx trial court rendered its Decision xxx dated
November 3, 1999 dismissing the complaint and counterclaim after making a finding that
the [respondent] did not commit trademark infringement against the [petitioners].
Resolving first the issue of whether or not [petitioners] have capacity to institute the instant
action, the trial court opined that [petitioners] failure to present evidence to support their
allegation that their respective countries indeed grant Philippine corporations reciprocal or
similar privileges by law xxx justifies the dismissal of the complaint xxx. It added that the
testimonies of [petitioners] witnesses xxx essentially declared that [petitioners] are in fact
doing business in the Philippines, but [petitioners] failed to establish that they are doing so
in accordance with the legal requirement of first securing a license. Hence, the court
declared that [petitioners] are barred from maintaining any action in Philippine courts
pursuant to Section 133 of the Corporation Code.
The issue of whether or not there was infringement of the [petitioners] trademarks by the
[respondent] was likewise answered xxx in the negative. It expounded that "in order for a
name, symbol or device to constitute a trademark, it must, either by itself or by association,
point distinctly to the origin or ownership of the article to which it is applied and be of such
nature as to permit an exclusive appropriation by one person". Applying such principle to
the instant case, the trial court was of the opinion that the words "MARK", "TEN", "LARK"
and the Roman Numerals "VII", either alone or in combination of each other do not by
themselves or by association point distinctly to the origin or ownership of the cigarettes to
which they refer, such that the buying public could not be deceived into believing that
[respondents] "MARK" cigarettes originated either from the USA, Canada, or Switzerland.
Emphasizing that the test in an infringement case is the likelihood of confusion or
deception, the trial court stated that the general rule is that an infringement exists if the
resemblance is so close that it deceives or is likely to deceive a customer exercising
ordinary caution in his dealings and induces him to purchase the goods of one
manufacturer in the belief that they are those of another. xxx. The trial court ruled that the
[petitioners] failed to pass these tests as it neither presented witnesses or purchasers
attesting that they have bought [respondents] product believing that they bought
[petitioners] "MARK VII", "MARK TEN" or "LARK", and have also failed to introduce in
evidence a specific magazine or periodical circulated locally, which promotes and
popularizes their products in the Philippines. It, moreover, elucidated that the words
consisting of the trademarks allegedly infringed by [respondent] failed to show that they
have acquired a secondary meaning as to identify them as [petitioners] products. Hence,
the court ruled that the [petitioners] cannot avail themselves of the doctrine of secondary
meaning.
As to the issue of damages, the trial court deemed it just not to award any to either party
stating that, since the [petitioners] filed the action in the belief that they were aggrieved by
what they perceived to be an infringement of their trademark, no wrongful act or omission
can be attributed to them. xxx.3 (Words in brackets supplied)
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Maintaining to have the standing to sue in the local forum and that respondent has
committed trademark infringement, petitioners went on appeal to the CA whereat their
appellate recourse was docketed as CA-G.R. CV No. 66619.
Eventually, the CA, in its Decision dated January 21, 2003, while ruling for petitioners on
the matter of their legal capacity to sue in this country for trademark infringement,
nevertheless affirmed the trial courts decision on the underlying issue of respondents
liability for infringement as it found that:
xxx the appellants [petitioners] trademarks, i.e., "MARK VII", "MARK TEN" and "LARK",
do not qualify as well-known marks entitled to protection even without the benefit of actual
use in the local market and that the similarities in the trademarks in question are insufficient
as to cause deception or confusion tantamount to infringement. Consequently, as regards
the third issue, there is likewise no basis for the award of damages prayed for by the
appellants herein.4 (Word in bracket supplied)
With their motion for reconsideration having been denied by the CA in its equally
challenged Resolution of May 30, 2003, petitioners are now with this Court via this petition
for review essentially raising the following issues: (1) whether or not petitioners, as
Philippine registrants of trademarks, are entitled to enforce trademark rights in this country;
and (2) whether or not respondent has committed trademark infringement against
petitioners by its use of the mark "MARK" for its cigarettes, hence liable for damages.
In its Comment,5 respondent, aside from asserting the correctness of the CAs finding on
its liability for trademark infringement and damages, also puts in issue the propriety of the
petition as it allegedly raises questions of fact.
The petition is bereft of merit.
Dealing first with the procedural matter interposed by respondent, we find that the petition
raises both questions of fact and law contrary to the prescription against raising factual
questions in a petition for review on certiorari filed before the Court. A question of law
exists when the doubt or difference arises as to what the law is on a certain state of facts;
there is a question of fact when the doubt or difference arises as to the truth or falsity of
alleged facts.6
Indeed, the Court is not the proper venue to consider factual issues as it is not a trier of
facts.7 Unless the factual findings of the appellate court are mistaken, absurd, speculative,
conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the
court of origin,8 we will not disturb them.
It is petitioners posture, however, that their contentions should
19

be treated as purely legal since they are assailing erroneous conclusions deduced from a
set of undisputed facts.
Concededly, when the facts are undisputed, the question of whether or not the conclusion
drawn therefrom by the CA is correct is one of law.9 But, even if we consider and accept
as pure questions of law the issues raised in this petition, still, the Court is not inclined to
disturb the conclusions reached by the appellate court, the established rule being that all
doubts shall be resolved in favor of the correctness of such conclusions.10
Be that as it may, we shall deal with the issues tendered and determine whether the CA
ruled in accordance with law and established jurisprudence in arriving at its assailed
decision.
A "trademark" is any distinctive word, name, symbol, emblem, sign, or device, or any
combination thereof adopted and used by a manufacturer or merchant on his goods to
identify and distinguish them from those manufactured, sold, or dealt in by
others.11 Inarguably, a trademark deserves protection. For, as Mr. Justice Frankfurter
observed in Mishawaka Mfg. Co. v. Kresge Co.:12
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.
It is thus understandable for petitioners to invoke in this recourse their entitlement to
enforce trademark rights in this country, specifically, the right to sue for trademark
infringement in Philippine courts and be accorded protection against unauthorized use of
their Philippine-registered trademarks.
In support of their contention respecting their right of action, petitioners assert that, as
corporate nationals of member-countries of the Paris Union, they can sue before Philippine
courts for infringement of trademarks, or for unfair competition, without need of obtaining
registration or a license to do business in the Philippines, and without necessity of actually
doing business in the Philippines. To petitioners, these grievance right and mechanism are
accorded not only by Section 21-A of Republic Act (R.A.) No. 166, as amended, or the
Trademark Law, but also by Article 2 of the Paris Convention for the Protection of Industrial
Property, otherwise known as the Paris Convention.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
In any event, petitioners point out that there is actual use of their trademarks in the
Philippines as evidenced by the certificates of registration of their trademarks. The marks
"MARK TEN" and "LARK" were registered on the basis of actual use in accordance with
Sections 2-A13 and 5(a)14 of R.A. No. 166, as amended, providing for a 2-month pre-
registration use in local commerce and trade while the registration of "MARK VII" was on
the basis of registration in the foreign country of origin pursuant to Section 37 of the same
law wherein it is explicitly provided that prior use in commerce need not be alleged.15
Besides, petitioners argue that their not doing business in the Philippines, if that be the
case, does not mean that cigarettes bearing their trademarks are not available and sold
locally. Citing Converse Rubber Corporation v. Universal Rubber Products,
Inc.,16 petitioners state that such availability and sale may be effected through the acts of
importers and distributors.
Finally, petitioners would press on their entitlement to protection even in the absence of
actual use of trademarks in the country in view of the Philippines adherence to the Trade
Related Aspects of Intellectual Property Rights or the TRIPS Agreement and the
enactment of R.A. No. 8293, or the Intellectual Property Code (hereinafter the "IP Code"),
both of which provide that the fame of a trademark may be acquired through promotion or
advertising with no explicit requirement of actual use in local trade or commerce.
Before discussing petitioners claimed entitlement to enforce trademark rights in the
Philippines, it must be emphasized that their standing to sue in Philippine courts had been
recognized, and rightly so, by the CA. It ought to be pointed out, however, that the appellate
court qualified its holding with a statement, following G.R. No. 91332, entitled Philip Morris,
Inc., et al. v. The Court of Appeals and Fortune Tobacco Corporation,17 that such right to
sue does not necessarily mean protection of their registered marks in the absence of actual
use in the Philippines.
Thus clarified, what petitioners now harp about is their entitlement to protection on the
strength of registration of their trademarks in the Philippines.
As we ruled in G.R. No. 91332,18 supra, so it must be here.
Admittedly, the registration of a trademark gives the registrant, such as petitioners,
advantages denied non-registrants or ordinary users, like respondent. But while petitioners
enjoy the statutory presumptions arising from such registration,19 i.e., as to the validity of
the registration, ownership and the exclusive right to use the registered marks, they may
not successfully sue on the basis alone of their respective certificates of registration of
trademarks. For, petitioners are still foreign corporations. As such, they ought, as a
condition to availment of the rights and privileges vis--vis their trademarks in this country,
to show proof that, on top of Philippine registration, their country grants substantially similar
rights and privileges to Filipino citizens pursuant to Section 21-A20 of R.A. No. 166.
20

In Leviton Industries v. Salvador, the Court further held that the aforementioned
21
reciprocity requirement is a condition sine qua non to filing a suit by a foreign corporation
which, unless alleged in the complaint, would justify dismissal thereof, a mere allegation
that the suit is being pursued under Section 21-A of R.A. No. 166 not being sufficient. In a
subsequent case,22 however, the Court held that where the complainant is a national of a
Paris Convention- adhering country, its allegation that it is suing under said Section 21-A
would suffice, because the reciprocal agreement between the two countries is embodied
and supplied by the Paris Convention which, being considered part of Philippine municipal
laws, can be taken judicial notice of in infringement suits.23
As well, the fact that their respective home countries, namely, the United States,
Switzerland and Canada, are, together with the Philippines, members of the Paris Union
does not automatically entitle petitioners to the protection of their trademarks in this country
absent actual use of the marks in local commerce and trade.
True, the Philippines adherence to the Paris Convention24 effectively obligates the country
to honor and enforce its provisions25 as regards the protection of industrial property of
foreign nationals in this country. However, any protection accorded has to be made subject
to the limitations of Philippine laws.26 Hence, despite Article 2 of the Paris Convention
which substantially provides that (1) nationals of member-countries shall have in this
country rights specially provided by the Convention as are consistent with Philippine laws,
and enjoy the privileges that Philippine laws now grant or may hereafter grant to its
nationals, and (2) while no domicile requirement in the country where protection is claimed
shall be required of persons entitled to the benefits of the Union for the enjoyment of any
industrial property rights,27 foreign nationals must still observe and comply with the
conditions imposed by Philippine law on its nationals.
Considering that R.A. No. 166, as amended, specifically Sections 228 and 2-A29 thereof,
mandates actual use of the marks and/or emblems in local commerce and trade before
they may be registered and ownership thereof acquired, the petitioners cannot, therefore,
dispense with the element of actual use. Their being nationals of member-countries of the
Paris Union does not alter the legal situation.
In Emerald Garment Mfg. Corporation v. Court of Appeals,30 the Court reiterated its rulings
in Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, Kabushi Kaisha Isetan v. Intermediate Appellate Court, and Philip
31 32
Morris v. Court of Appeals and Fortune Tobacco Corporation33 on the importance of actual
commercial use of a trademark in the Philippines notwithstanding the Paris Convention:
The provisions of the 1965 Paris Convention relied upon by private respondent and
Sec. 21-A of the Trademark Law were sufficiently expounded upon and qualified in the
recent case of Philip Morris, Inc., et. al. vs. Court of Appeals:
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
xxx xxx xxx
Following universal acquiescence and comity, our municipal law on trademarks regarding
the requirements of actual use in the Philippines must subordinate an international
agreement inasmuch as the apparent clash is being decided by a municipal tribunal. Xxx.
Withal, the fact that international law has been made part of the law of the land does not
by any means imply the primacy of international law over national law in the municipal
sphere. Under the doctrine of incorporation as applied in most countries, rules of
International Law are given a standing equal, not superior, to national legislative
enactments.
xxx xxx xxx
In other words, (a foreign corporation) may have the capacity to sue for infringement
but the question of whether they have an exclusive right over their symbol as to justify
issuance of the controversial writ will depend on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of the same law. It is thus incongruous for
petitioners to claim that when a foreign corporation not licensed to do business in the
Philippines files a complaint for infringement, the entity need not be actually using its
trademark in commerce in the Philippines. Such a foreign corporation may have the
personality to file a suit for infringement but it may not necessarily be entitled to protection
due to absence of actual use of the emblem in the local market.
Contrary to what petitioners suggest, the registration of trademark cannot be deemed
conclusive as to the actual use of such trademark in local commerce. As it were,
registration does not confer upon the registrant an absolute right to the registered mark.
The certificate of registration merely constitutes prima facie evidence that the registrant is
the owner of the registered mark. Evidence of non-usage of the mark rebuts the
presumption of trademark ownership,34 as what happened here when petitioners no less
admitted not doing business in this country.35
Most importantly, we stress that registration in the Philippines of trademarks does not ipso
facto convey an absolute right or exclusive ownership thereof. To borrow from Shangri-La
International Hotel Management, Ltd. v. Development Group of Companies,
Inc.36 trademark is a creation of use and, therefore, actual use is a pre-requisite to
exclusive ownership; registration is only an administrative confirmation of the existence of
the right of ownership of the mark, but does not perfect such right; actual use thereof is
the perfecting ingredient.37
Petitioners reliance on Converse Rubber Corporation38 is quite misplaced, that case being
cast in a different factual milieu. There, we ruled that a foreign owner of a Philippine
trademark, albeit not licensed to do, and not so engaged in, business in the Philippines,
may actually earn reputation or goodwill for its goods in the country. But unlike in the instant
21

case, evidence of actual sales of Converse rubber shoes, such as sales invoices, receipts
and the testimony of a legitimate trader, was presented in Converse.
This Court also finds the IP Code and the TRIPS Agreement to be inapplicable, the
infringement complaint herein having been filed in August 1982 and tried under the aegis
of R.A. No. 166, as amended. The IP Code, however, took effect only on January 1, 1998
without a provision as to its retroactivity.39 In the same vein, the TRIPS Agreement was
inexistent when the suit for infringement was filed, the Philippines having adhered thereto
only on December 16, 1994.
With the foregoing perspective, it may be stated right off that the registration of a trademark
unaccompanied by actual use thereof in the country accords the registrant only the
standing to sue for infringement in Philippine courts. Entitlement to protection of such
trademark in the country is entirely a different matter.
This brings us to the principal issue of infringement.
Section 22 of R.A. No. 166, as amended, defines what constitutes trademark infringement,
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 tradename 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 of color
ably imitate any such mark or tradename 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.
Petitioners would insist on their thesis of infringement since respondents mark "MARK"
for cigarettes is confusingly or deceptively similar with their duly registered "MARK VII,"
"MARK TEN" and "LARK" marks likewise for cigarettes. To them, the word "MARK" would
likely cause confusion in the trade, or deceive purchasers, particularly as to the source or
origin of respondents cigarettes.
The "likelihood of confusion" is the gravamen of trademark infringement.40 But likelihood
of confusion is a relative concept, the particular, and sometimes peculiar, circumstances
of each case being determinative of its existence. Thus, in trademark infringement cases,
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
more than in other kinds of litigation, precedents must be evaluated in the light of each
particular case.41
In determining similarity and likelihood of confusion, jurisprudence has developed two
tests: the dominancy test and the holistic test.42 The dominancy test43 sets sight on the
similarity of the prevalent features of the competing trademarks that might cause confusion
and deception, thus constitutes infringement. Under this norm, the question at issue turns
on whether the use of the marks involved would be likely to cause confusion or mistake in
the mind of the public or deceive purchasers.44
In contrast, the holistic test45 entails a consideration of the entirety of the marks as applied
to the products, including the labels and packaging, in determining confusing similarity.
Upon consideration of the foregoing in the light of the peculiarity of this case, we rule
against the likelihood of confusion resulting in infringement arising from the respondents
use of the trademark "MARK" for its particular cigarette product.
For one, as rightly concluded by the CA after comparing the trademarks involved in their
entirety as they appear on the products,46 the striking dissimilarities are significant enough
to warn any purchaser that one is different from the other. Indeed, although the perceived
offending word "MARK" is itself prominent in petitioners trademarks "MARK VII" and
"MARK TEN," the entire marking system should be considered as a whole and not
dissected, because a discerning eye would focus not only on the predominant word but
also on the other features appearing in the labels. Only then would such discerning
observer draw his conclusion whether one mark would be confusingly similar to the other
and whether or not sufficient differences existed between the marks.47
This said, the CA then, in finding that respondents goods cannot be mistaken as any of
the three cigarette brands of the petitioners, correctly relied on the holistic test.
But, even if the dominancy test were to be used, as urged by the petitioners, but bearing
in mind that a trademark serves as a tool to point out distinctly the origin or ownership of
the goods to which it is affixed,48 the likelihood of confusion tantamount to infringement
appears to be farfetched. The reason for the origin and/or ownership angle is that unless
the words or devices do so point out the origin or ownership, the person who first adopted
them cannot be injured by any appropriation or imitation of them by others, nor can the
public be deceived.49
Since the word "MARK," be it alone or in combination with the word "TEN" and the Roman
numeral "VII," does not point to the origin or ownership of the cigarettes to which they
apply, the local buying public could not possibly be confused or deceived that respondents
"MARK" is the product of petitioners and/or originated from the U.S.A., Canada or
22

Switzerland. And lest it be overlooked, no actual commercial use of petitioners marks in
local commerce was proven. There can thus be no occasion for the public in this country,
unfamiliar in the first place with petitioners marks, to be confused.
For another, a comparison of the trademarks as they appear on the goods is just one of
the appreciable circumstances in determining likelihood of confusion. Del Monte Corp. v.
CA50 dealt with another, where we instructed to give due regard to the "ordinary
purchaser," thus:
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. 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.
When we spoke of an "ordinary purchaser," the reference was not to the "completely
unwary customer" but to the "ordinarily intelligent buyer" considering the type of product
involved.51
It cannot be over-emphasized that the products involved are addicting cigarettes
purchased mainly by those who are already predisposed to a certain brand. Accordingly,
the ordinary buyer thereof would be all too familiar with his brand and discriminating as
well. We, thus, concur with the CA when it held, citing a definition found in Dy Buncio v.
Tan Tiao Bok,52 that the "ordinary purchaser" in this case means "one accustomed to buy,
and therefore to some extent familiar with, the goods in question."
Pressing on with their contention respecting the commission of trademark infringement,
petitioners finally point to Section 22 of R.A. No. 166, as amended. As argued, actual use
of trademarks in local commerce is, under said section, not a requisite before an aggrieved
trademark owner can restrain the use of his trademark upon goods manufactured or dealt
in by another, it being sufficient that he had registered the trademark or trade-name with
the IP Office. In fine, petitioners submit that respondent is liable for infringement, having
manufactured and sold cigarettes with the trademark "MARK" which, as it were, are
identical and/or confusingly similar with their duly registered trademarks "MARK VII,"
"MARK TEN" and "LARK".
This Court is not persuaded.
In Mighty Corporation v. E & J Gallo Winery,53 the Court held that the following constitute
the elements of trademark infringement in accordance not only with Section 22 of R.A. No.
166, as amended, but also Sections 2, 2-A, 9-A54and 20 thereof:
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
(a) a trademark actually used in commerce in the Philippines and registered in the
principal register of the Philippine Patent Office,
(b) is used by another person in connection with the sale, offering for sale, or
advertising of any goods, business or services 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
such trademark is reproduced, counterfeited, copied or colorably imitated by
another person and such reproduction, counterfeit, copy or colorable imitation 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
as to likely cause confusion or mistake or to deceive purchasers,
(c) the trademark is used for identical or similar goods, and
(d) such act is done without the consent of the trademark registrant or assignee. lawphil.net
As already found herein, while petitioners have registered the trademarks "MARK VII,"
"MARK TEN" and "LARK" for cigarettes in the Philippines, prior actual commercial use
thereof had not been proven. In fact, petitioners judicial admission of not doing business
in this country effectively belies any pretension to the contrary.
Likewise, we note that petitioners even failed to support their claim that their respective
marks are well-known and/or have acquired goodwill in the Philippines so as to be entitled
to protection even without actual use in this country in accordance with Article 6bis55 of the
Paris Convention. As correctly found by the CA, affirming that of the trial court:
xxx the records are bereft of evidence to establish that the appellants [petitioners]
products are indeed well-known in the Philippines, either through actual sale of the product
or through different forms of advertising. This finding is supported by the fact that
appellants admit in their Complaint that they are not doing business in the Philippines,
hence, admitting that their products are not being sold in the local market. We likewise see
no cogent reason to disturb the trial courts finding that the appellants failed to establish
that their products are widely known by local purchasers as "(n)o specific magazine or
periodical published in the Philippines, or in other countries but circulated locally" have
been presented by the appellants during trial. The appellants also were not able to show
the length of time or the extent of the promotion or advertisement made to popularize their
products in the Philippines.56
Last, but not least, we must reiterate that the issue of trademark infringement is factual,
with both the trial and appellate courts having peremptorily found allegations of
infringement on the part of respondent to be without basis. As we said time and time again,
23
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
factual determinations of the trial court, concurred in by the CA, are final and binding on
this Court.57

For lack of convincing proof on the part of the petitioners of actual use of their registered
trademarks prior to respondents use of its mark and for petitioners failure to demonstrate
confusing similarity between said trademarks, the dismissal of their basic complaint for
infringement and the concomitant plea for damages must be affirmed. The law, the
surrounding circumstances and the equities of the situation call for this disposition.

WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed decision and
resolution of the Court of Appeals are AFFIRMED.

Costs against the petitioners.

SO ORDERED.

24

G.R. No. 159938 March 31, 2006
SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD., SHANGRI-LA
PROPERTIES, INC., MAKATI SHANGRI-LA HOTEL & RESORT, INC., AND KUOK
PHILIPPINES PROPERTIES, INC., Petitioners, vs. DEVELOPERS GROUP OF
COMPANIES, INC., Respondent.
In this petition for review under Rule 45 of the Rules of Court, petitioners Shangri-La
International Hotel Management, Ltd. (SLIHM), et al. assail and seek to set aside the
Decision dated May 15, 20031 of the Court of Appeals (CA) in CA-G.R. CV No. 53351 and
its Resolution2 of September 15, 2003 which effectively affirmed with modification an
earlier decision of the Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-91-
8476, an action for infringement and damages, thereat commenced by respondent
Developers Group of Companies, Inc. (DGCI) against the herein petitioners.
The facts:
At the core of the controversy are the "Shangri-La" mark and "S" logo. Respondent DGCI
claims ownership of said mark and logo in the Philippines on the strength of its prior use
thereof within the country. As DGCI stresses at every turn, it filed on October 18, 1982 with
the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) pursuant to
Sections 2 and 4 of Republic Act (RA) No. 166,3 as amended, an application for registration
covering the subject mark and logo. On May 31, 1983, the BPTTT issued in favor of DGCI
the corresponding certificate of registration therefor, i.e., Registration No. 31904. Since
then, DGCI started using the "Shangri-La" mark and "S" logo in its restaurant business.
On the other hand, the Kuok family owns and operates a chain of hotels with interest in
hotels and hotel-related transactions since 1969. As far back as 1962, it adopted the name
"Shangri-La" as part of the corporate names of all companies organized under the aegis
of the Kuok Group of Companies (the Kuok Group). The Kuok Group has used the name
"Shangri-La" in all Shangri-La hotels and hotel-related establishments around the world
which the Kuok Family owned.
To centralize the operations of all Shangri-la hotels and the ownership of the "Shangri-La"
mark and "S" logo, the Kuok Group had incorporated in Hong Kong and Singapore, among
other places, several companies that form part of the Shangri-La International Hotel
Management Ltd. Group of Companies. EDSA Shangri-La Hotel and Resort, Inc., and
Makati Shangri-La Hotel and Resort, Inc. were incorporated in the Philippines beginning
1987 to own and operate the two (2) hotels put up by the Kuok Group in Mandaluyong and
Makati, Metro Manila.
All hotels owned, operated and managed by the aforesaid SLIHM Group of Companies
adopted and used the distinctive lettering of the name "Shangri-La" as part of their trade
names.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
From the records, it appears that Shangri-La Hotel Singapore commissioned a
Singaporean design artist, a certain Mr. William Lee, to conceptualize and design the logo
of the Shangri-La hotels.
During the launching of the stylized "S" Logo in February 1975, Mr. Lee gave the following
explanation for the logo, to wit:
The logo which is shaped like a "S" represents the uniquely Asean architectural structures
as well as keep to the legendary Shangri-la theme with the mountains on top being
reflected on waters below and the connecting centre [sic] line serving as the horizon. This
logo, which is a bold, striking definitive design, embodies both modernity and sophistication
in balance and thought.
Since 1975 and up to the present, the "Shangri-La" mark and "S" logo have been used
consistently and continuously by all Shangri-La hotels and companies in their
paraphernalia, such as stationeries, envelopes, business forms, menus, displays and
receipts.
The Kuok Group and/or petitioner SLIHM caused the registration of, and in fact registered,
the "Shangri-La" mark and "S" logo in the patent offices in different countries around the
world.
On June 21, 1988, the petitioners filed with the BPTTT a petition, docketed as Inter Partes
Case No. 3145, praying for the cancellation of the registration of the "Shangri-La" mark
and "S" logo issued to respondent DGCI on the ground that the same were illegally and
fraudulently obtained and appropriated for the latter's restaurant business. They also filed
in the same office Inter Partes Case No. 3529, praying for the registration of the same
mark and logo in their own names.
Until 1987 or 1988, the petitioners did not operate any establishment in the Philippines,
albeit they advertised their hotels abroad since 1972 in numerous business, news, and/or
travel magazines widely circulated around the world, all readily available in Philippine
magazines and newsstands. They, too, maintained reservations and booking agents in
airline companies, hotel organizations, tour operators, tour promotion organizations, and
in other allied fields in the Philippines.
It is principally upon the foregoing factual backdrop that respondent DGCI filed a complaint
for Infringement and Damages with the RTC of Quezon City against the herein petitioners
SLIHM, Shangri-La Properties, Inc., Makati Shangri-La Hotel & Resort, Inc., and Kuok
Philippine Properties, Inc., docketed as Civil Case No. Q-91-8476 and eventually raffled
to Branch 99 of said court. The complaint with prayer for injunctive relief and damages
alleged that DGCI has, for the last eight (8) years, been the prior exclusive user in the
25

Philippines of the mark and logo in question and the registered owner thereof for its
restaurant and allied services. As DGCI alleged in its complaint, SLIHM, et al., in promoting
and advertising their hotel and other allied projects then under construction in the country,
had been using a mark and logo confusingly similar, if not identical, with its mark and "S"
logo. Accordingly, DGCI sought to prohibit the petitioners, as defendants a quo, from using
the "Shangri-La" mark and "S" logo in their hotels in the Philippines.
In their Answer with Counterclaim, the petitioners accused DGCI of appropriating and
illegally using the "Shangri-La" mark and "S" logo, adding that the legal and beneficial
ownership thereof pertained to SLIHM and that the Kuok Group and its related companies
had been using this mark and logo since March 1962 for all their corporate names and
affairs. In this regard, they point to the Paris Convention for the Protection of Industrial
Property as affording security and protection to SLIHM's exclusive right to said mark and
logo. They further claimed having used, since late 1975, the internationally-known and
specially-designed "Shangri-La" mark and "S" logo for all the hotels in their hotel chain.
Pending trial on the merits of Civil Case No. Q-91-8476, the trial court issued a Writ of
Preliminary Injunction enjoining the petitioners from using the subject mark and logo. The
preliminary injunction issue ultimately reached the Court in G.R. No. 104583 entitled
Developers Group of Companies, Inc. vs. Court of Appeals, et al. In a decision4 dated
March 8, 1993, the Court nullified the writ of preliminary injunction issued by the trial court
and directed it to proceed with the main case and decide it with deliberate dispatch.
While trial was in progress, the petitioners filed with the court a motion to suspend
proceedings on account of the pendency before the BPTTT of Inter Partes Case No. 3145
for the cancellation of DGCI's certificate of registration. For its part, respondent DGCI filed
a similar motion in that case, invoking in this respect the pendency of its infringement case
before the trial court. The parties' respective motions to suspend proceedings also reached
the Court via their respective petitions in G.R. No. 114802, entitled Developers Group of
Companies, Inc. vs. Court of Appeals, et al. and G.R. No. 111580, entitled Shangri-La
International Hotel Management LTD., et al. vs. Court of Appeals, et al., which were
accordingly consolidated.
In a consolidated decision5 dated June 21, 2001, the Court, limiting itself to the core issue
of whether, despite the petitioners' institution of Inter Partes Case No. 3145 before the
BPTTT, herein respondent DGCI "can file a subsequent action for infringement with the
regular courts of justice in connection with the same registered mark," ruled in the
affirmative, but nonetheless ordered the BPTTT to suspend further proceedings in said
inter partes case and to await the final outcome of the main case.
Meanwhile, trial on the merits of the infringement case proceeded. Presented as DGCI's
lone witness was Ramon Syhunliong, President and Chairman of DGCI's Board of
Directors. Among other things, this witness testified that:
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
1. He is a businessman, with interest in lumber, hotel, hospital, trading and
restaurant businesses but only the restaurant business bears the name "Shangri-
La" and uses the same and the "S-logo" as service marks. The restaurant now
known as "Shangri-La Finest Chinese Cuisine" was formerly known as the
"Carvajal Restaurant" until December 1982, when respondent took over said
restaurant business.
2. He had traveled widely around Asia prior to 1982, and admitted knowing the
Shangri-La Hotel in Hong Kong as early as August 1982.
3. The "S-logo" was one of two (2) designs given to him in December 1982,
scribbled on a piece of paper by a jeepney signboard artist with an office
somewhere in Balintawak. The unnamed artist supposedly produced the two
designs after about two or three days from the time he (Syhunliong) gave the idea
of the design he had in mind.
4. On October 15, 1982, or before the unknown signboard artist supposedly
created the "Shangri-La" and "S" designs, DGCI was incorporated with the primary
purpose of "owning or operating, or both, of hotels and restaurants".
5. On October 18, 1982, again prior to the alleged creation date of the mark and
logo, DGCI filed an application for trademark registration of the mark "SHANGRI-
LA FINEST CHINESE CUISINE & S. Logo" with the BPTTT. On said date,
respondent DGCI amended its Articles of Incorporation to reflect the name of its
restaurant, known and operating under the style and name of "SHANGRI-LA
FINEST CHINESE CUISINE." Respondent DGCI obtained Certificate of
Registration No. 31904 for the "Shangri-La" mark and "S" logo.
Eventually, the trial court, on the postulate that petitioners', more particularly petitioner
SLIHM's, use of the mark and logo in dispute constitutes an infringement of DGCI's right
thereto, came out with its decision6 on March 8, 1996 rendering judgment for DGCI, as
follows:
WHEREFORE, judgment is hereby rendered in favor of [respondent DGCI] and against
[SLIHM, et al.] -
a) Upholding the validity of the registration of the service mark "Shangri-la" and "S-
Logo" in the name of [respondent];
b) Declaring [petitioners'] use of said mark and logo as infringement of
[respondent's] right thereto;
26

c) Ordering [petitioners], their representatives, agents, licensees, assignees and
other persons acting under their authority and with their permission, to permanently
cease and desist from using and/or continuing to use said mark and logo, or any
copy, reproduction or colorable imitation
thereof, in the promotion, advertisement, rendition of their hotel and allied projects
and services or in any other manner whatsoever;
d) Ordering [petitioners] to remove said mark and logo from any premises, objects,
materials and paraphernalia used by them and/or destroy any and all prints, signs,
advertisements or other materials bearing said mark and logo in their possession
and/or under their control; and
e) Ordering [petitioners], jointly and severally, to indemnify [respondent] in the
amounts of P2,000,000.00 as actual and compensatory damages, P500,000.00 as
attorney's fee and expenses of litigation.
Let a copy of this Decision be certified to the Director, Bureau of Patents, Trademarks and
Technology Transfer for his information and appropriate action in accordance with the
provisions of Section 25, Republic Act No. 166
Costs against [petitioners].
SO ORDERED. [Words in brackets added.]
Therefrom, the petitioners went on appeal to the CA whereat their recourse was docketed
as CA G.R. SP No. 53351.
As stated at the threshold hereof, the CA, in its assailed Decision of May 15,
2003,7 affirmed that of the lower court with the modification of deleting the award of
attorney's fees. The appellate court predicated its affirmatory action on the strength or
interplay of the following premises:
1. Albeit the Kuok Group used the mark and logo since 1962, the evidence
presented shows that the bulk use of the tradename was abroad and not in the
Philippines (until 1987). Since the Kuok Group does not have proof of actual use
in commerce in the Philippines (in accordance with Section 2 of R.A. No. 166), it
cannot claim ownership of the mark and logo in accordance with the holding in
Kabushi Kaisha Isetan v. IAC8, as reiterated in Philip Morris, Inc. v. Court of
Appeals.9
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
2. On the other hand, respondent has a right to the mark and logo by virtue of its
prior use in the Philippines and the issuance of Certificate of Registration No.
31904.
3. The use of the mark or logo in commerce through the bookings made by travel
agencies is unavailing since the Kuok Group did not establish any branch or
regional office in the Philippines. As it were, the Kuok Group was not engaged in
commerce in the Philippines inasmuch as the bookings were made through travel
agents not owned, controlled or managed by the Kuok Group.
4. While the Paris Convention protects internationally known marks, R.A. No. 166
still requires use in commerce in the Philippines. Accordingly, and on the premise
that international agreements, such as Paris Convention, must yield to a municipal
law, the question on the exclusive right over the mark and logo would still depend
on actual use in commerce in the Philippines.
Petitioners then moved for a reconsideration, which motion was denied by the CA in its
equally assailed Resolution of September 15, 2003.10
As formulated by the petitioners, the issues upon which this case hinges are:
1. Whether the CA erred in finding that respondent had the right to file an
application for registration of the "Shangri-La" mark and "S" logo although
respondent never had any prior actual commercial use thereof;
2. Whether the CA erred in finding that respondent's supposed use of the identical
"Shangri-La" mark and "S" logo of the petitioners was not evident bad faith and
can actually ripen into ownership, much less registration;
3. Whether the CA erred in overlooking petitioners' widespread prior use of the
"Shangri-La" mark and "S" logo in their operations;
4. Whether the CA erred in refusing to consider that petitioners are entitled to
protection under both R.A. No. 166, the old trademark law, and the Paris
Convention for the Protection of Industrial Property;
5. Whether the CA erred in holding that SLIHM did not have the right to legally own
the "Shangri-La" mark and "S" logo by virtue of and despite their ownership by the
Kuok Group;
6. Whether the CA erred in ruling that petitioners' use of the mark and logo
constitutes actionable infringement;
27

7. Whether the CA erred in awarding damages in favor of respondent despite the
absence of any evidence to support the same, and in failing to award relief in favor
of the petitioners; and
8. Whether petitioners should be prohibited from continuing their use of the mark
and logo in question.
There are two preliminary issues, however, that respondent DGCI calls our attention to,
namely:
1. Whether the certification against forum-shopping submitted on behalf of the
petitioners is sufficient;
2. Whether the issues posed by petitioners are purely factual in nature hence
improper for resolution in the instant petition for review on certiorari.
DGCI claims that the present petition for review should be dismissed outright for certain
procedural defects, to wit: an insufficient certification against forum shopping and raising
pure questions of fact. On both counts, we find the instant petition formally and
substantially sound.
In its Comment, respondent alleged that the certification against forum shopping signed
by Atty. Lee Benjamin Z. Lerma on behalf and as counsel of the petitioners was insufficient,
and that he was not duly authorized to execute such document. Respondent further
alleged that since petitioner SLIHM is a foreign entity based in Hong Kong, the Director's
Certificate executed by Mr. Madhu Rama Chandra Rao, embodying the board resolution
which authorizes Atty. Lerma to act for SLIHM and execute the certification against forum
shopping, should contain the authentication by a consular officer of the Philippines in Hong
Kong.
In National Steel Corporation v. CA,11 the Court has ruled that the certification on non-
forum shopping may be signed, for and in behalf of a corporation, by a specifically
authorized lawyer who has personal knowledge of the facts required to be disclosed in
such document. The reason for this is that a corporation can only exercise its powers
through its board of directors and/or its duly authorized officers and agents. Physical acts,
like the signing of documents, can be performed only by natural persons duly authorized
for the purpose.12
Moreover, Rule 7, Section 5 of the Rules of Court concerning the certification against forum
shopping does not require any consular certification if the petitioner is a foreign entity.
Nonetheless, to banish any lingering doubt, petitioner SLIHM furnished this Court with a
consular certification dated October 29, 2003 authenticating the Director's Certificate
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
authorizing Atty. Lerma to execute the certification against forum shopping, together with
petitioners' manifestation of February 9, 2004.
Respondent also attacks the present petition as one that raises pure questions of fact. It
points out that in a petition for review under Rule 45 of the Rules of Court, the questions
that may properly be inquired into are strictly circumscribed by the express limitation that
"the petition shall raise only questions of law which must be distinctly set forth."13 We do
not, however, find that the issues involved in this petition consist purely of questions of
fact. These issues will be dealt with as we go through the questions raised by the
petitioners one by one.
Petitioners' first argument is that the respondent had no right to file an application for
registration of the "Shangri-La" mark and "S" logo because it did not have prior actual
commercial use thereof. To respondent, such an argument raises a question of fact that
was already resolved by the RTC and concurred in by the CA.
First off, all that the RTC found was that respondent was the prior user and registrant of
the subject mark and logo in the Philippines. Taken in proper context, the trial court's
finding on "prior use" can only be interpreted to mean that respondent used the subject
mark and logo in the country before the petitioners did. It cannot be construed as being a
factual finding that there was prior use of the mark and logo before registration.
Secondly, the question raised is not purely factual in nature. In the context of this case, it
involves resolving whether a certificate of registration of a mark, and the presumption of
regularity in the performance of official functions in the issuance thereof, are sufficient to
establish prior actual use by the registrant. It further entails answering the question of
whether prior actual use is required before there may be a valid registration of a mark.
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.14
28

Among the effects of registration of a mark, as catalogued by the Court in Lorenzana v.
Macagba,15 are:
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. x x x
2. Registration in the Principal Register is limited to the actual owner of the
trademark and proceedings therein pass on the issue of ownership, which may be
contested through opposition or interference proceedings, or, after
registration, in a petition for cancellation. xxx
[Emphasis supplied] 1avvphil.et
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.16
While the present law on trademarks17 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.18 Trademark is a creation of use and therefore
actual use is a pre-requisite to exclusive ownership and its registration with the Philippine
Patent Office is a mere administrative confirmation of the existence of such right.19
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.20 Such presumption, just like the presumptive regularity in the performance of
official functions, is rebuttable and must give way to evidence to the contrary.
Here, respondent's own witness, Ramon Syhunliong, testified that a jeepney signboard
artist allegedly commissioned to create the mark and logo submitted his designs only in
December 1982.21 This was two-and-a-half months after the filing of the respondent's
trademark application on October 18, 1982 with the BPTTT. It was also only in December
1982 when the respondent's restaurant was opened for business.22 Respondent cannot
now claim before the Court that the certificate of registration itself is proof that the two-
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
month prior use requirement was complied with, what with the fact that its very own witness
testified otherwise in the trial court. And because at the time (October 18, 1982) the
respondent filed its application for trademark registration of the "Shangri-La" mark and "S"
logo, respondent was not using these in the Philippines commercially, the registration is
void.
Petitioners also argue that the respondent's use of the "Shangri-La" mark and "S" logo was
in evident bad faith and cannot therefore ripen into ownership, much less registration.
While the respondent is correct in saying that a finding of bad faith is factual, not
legal,23 hence beyond the scope of a petition for review, there are, however, noted
exceptions thereto. Among these exceptions are:
1. When the inference made is manifestly mistaken, absurd or impossible;24
2. When there is grave abuse of discretion;25
3. When the judgment is based on a misapprehension of facts;26
4. When the findings of fact are conflicting;27 and
5. When the facts set forth in the petition as well as in the petitioner's main and
reply briefs are not disputed by the respondent.28
And these are naming but a few of the recognized exceptions to the rule.
The CA itself, in its Decision of May 15, 2003, found that the respondent's president and
chairman of the board, Ramon Syhunliong, had been a guest at the petitioners' hotel
before he caused the registration of the mark and logo, and surmised that he must have
copied the idea there:
Did Mr. Ramon Syhunliong, [respondent's] President copy the mark and devise from one
of [petitioners'] hotel (Kowloon Shangri-la) abroad? The mere fact that he was a visitor of
[petitioners'] hotel abroad at one time (September 27, 1982) establishes [petitioners']
allegation that he got the idea there.29
Yet, in the very next paragraph, despite the preceding admission that the mark and logo
must have been copied, the CA tries to make it appear that the adoption of the same mark
and logo could have been coincidental:
The word or name "Shangri-la" and the S-logo, are not uncommon. The word "Shangri-la"
refers to a (a) remote beautiful imaginary place where life approaches perfection or (b)
imaginary mountain land depicted as a utopia in the novel Lost Horizon by James Hilton.
29

The Lost Horizon was a well-read and popular novel written in 1976. It is not impossible
that the parties, inspired by the novel, both adopted the mark for their business to conjure
[a] place of beauty and pleasure.
The S-logo is, likewise, not unusual. The devise looks like a modified Old English print.30
To jump from a recognition of the fact that the mark and logo must have been copied to a
rationalization for the possibility that both the petitioners and the respondent coincidentally
chose the same name and logo is not only contradictory, but also manifestly mistaken or
absurd. Furthermore, the "S" logo appears nothing like the "Old English" print that the CA
makes it out to be, but is obviously a symbol with oriental or Asian overtones. At any rate,
it is ludicrous to believe that the parties would come up with the exact same lettering for
the word "Shangri-La" and the exact same logo to boot. As correctly observed by the
petitioners, to which we are in full accord:
x x x When a trademark copycat adopts the word portion of another's trademark as his
own, there may still be some doubt that the adoption is intentional. But if he copies not
only the word but also the word's exact font and lettering style and in addition, he copies
also the logo portion of the trademark, the slightest doubt vanishes. It is then replaced by
the certainty that the adoption was deliberate, malicious and in bad faith.31
It is truly difficult to understand why, of the millions of terms and combination of letters and
designs available, the respondent had to choose exactly the same mark and logo as that
of the petitioners, if there was no intent to take advantage of the goodwill of petitioners'
mark and logo.32
One who has imitated the trademark of another cannot bring an action for infringement,
particularly against the true owner of the mark, because he would be coming to court with
unclean hands.33 Priority is of no avail to the bad faith plaintiff. Good faith is required in
order to ensure that a second user may not merely take advantage of the goodwill
established by the true owner.
This point is further bolstered by the fact that under either Section 17 of R.A. No. 166, or
Section 151 of R.A. No. 8293, or Article 6bis(3) of the Paris Convention, no time limit is
fixed for the cancellation of marks registered or used in bad faith.34 This is precisely why
petitioners had filed an inter partes case before the BPTTT for the cancellation of
respondent's registration, the proceedings on which were suspended pending resolution
of the instant case.
Respondent DGCI also rebukes the next issue raised by the petitioners as being purely
factual in nature, namely, whether the CA erred in overlooking petitioners' widespread prior
use of the "Shangri-La" mark and "S" logo in their operations. The question, however, is
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
not whether there had been widespread prior use, which would have been factual, but
whether that prior use entitles the petitioners to use the mark and logo in the Philippines.
This is clearly a question which is legal in nature.
It has already been established in the two courts below, and admitted by the respondent's
president himself, that petitioners had prior widespread use of the mark and logo abroad:
There is, to be sure, an impressive mass of proof that petitioner SLIHM and its related
companies abroad used the name and logo for one purpose or another x x x.35 [Emphasis
supplied]
In respondent's own words, "[T]he Court of Appeals did note petitioners' use of the mark
and logo but held that such use did not confer to them ownership or exclusive right to use
them in the Philippines."36 To petitioners' mind, it was error for the CA to rule that their
worldwide use of the mark and logo in dispute could not have conferred upon them any
right thereto. Again, this is a legal question which is well worth delving into.
R.A. No. 166, as amended, under which this case was heard and decided provides:
Section 2. What are registrable. - Trademarks, trade names and service marks owned by
persons, corporations, partnerships or associations domiciled in the Philippines and by
persons, corporations, partnerships or associations domiciled in any foreign country may
be registered in accordance with the provisions of this Act: Provided, That said trademarks
trade names, or service marks are actually in use in commerce and services not less
than two months in the Philippines before the time the applications for registration are
filed: And provided, further, That the country of which the applicant for registration is a
citizen grants by law substantially similar privileges to citizens of the Philippines, and such
fact is officially certified, with a certified true copy of the foreign law translated into the
English language, by the government of the foreign country to the Government of the
Republic of the Philippines.
Section 2-A. Ownership of trademarks, trade names 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 trade name, or a servicemark not so appropriated by
another, to distinguish his merchandise, business or service from the merchandise,
business or services 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 extent as are other property
rights known to this law. [Emphasis supplied]
30

Admittedly, the CA was not amiss in saying that the law requires the actual use in
commerce of the said trade name and "S" logo in the Philippines. Hence, consistent with
its finding that the bulk of the petitioners' evidence shows that the alleged use of the
Shangri-La trade name was done abroad and not in the Philippines, it is understandable
for that court to rule in respondent's favor. Unfortunately, however, what the CA failed to
perceive is that there is a crucial difference between the aforequoted Section 2 and Section
2-A of R.A. No. 166. For, while Section 2 provides for what is registrable, Section 2-A, on
the other hand, sets out how ownership is acquired. These are two distinct concepts.
Under Section 2, in order to register a trademark, one must be the owner thereof and must
have actually used the mark in commerce in the Philippines for 2 months prior to the
application for registration. Since "ownership" of the trademark is required for registration,
Section 2-A of the same law sets out to define how one goes about acquiring ownership
thereof. Under Section 2-A, it is clear that actual use in commerce is also the test of
ownership but the provision went further by saying that the mark must not have been so
appropriated by another. Additionally, it is significant to note that Section 2-A does not
require that the actual use of a trademark must be within the Philippines. Hence, under
R.A. No. 166, as amended, one may be an owner of a mark due to actual use thereof but
not yet have the right to register such ownership here due to failure to use it within the
Philippines for two months.
While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a
registrant, neither did respondent DGCI, since the latter also failed to fulfill the 2-month
actual use requirement. What is worse, DGCI was not even the owner of the mark. For it
to have been the owner, the mark must not have been already appropriated (i.e., used) by
someone else. At the time of respondent DGCI's registration of the mark, the same was
already being used by the petitioners, albeit abroad, of which DGCI's president was
fully aware.
It is respondent's contention that since the petitioners adopted the "Shangri-La" mark and
"S" logo as a mere corporate name or as the name of their hotels, instead of using them
as a trademark or service mark, then such name and logo are not trademarks. The two
concepts of corporate name or business name and trademark or service mark, are not
mutually exclusive. It is common, indeed likely, that the name of a corporation or business
is also a trade name, trademark or service mark. Section 38 of R.A. No. 166 defines the
terms as follows:
Sec. 38. Words and terms defined and construed - In the construction of this Act, unless
the contrary is plainly apparent from the context - The term "trade name" includes individual
names and surnames, firm names, trade names, devices or words used by manufacturers,
industrialists, merchants, agriculturists, and others to identify their business, vocations or
occupations; the names or titles lawfully adopted and used by natural or juridical
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
persons, unions, and any manufacturing, industrial, commercial, agricultural or other
organizations engaged in trade or commerce.
The term "trade mark" includes 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.
The term "service mark" means a mark used in the sale or advertising of services to identify
the services of one person and distinguish them from the services of others and
includes without limitation the marks, names, symbols, titles, designations,
slogans, character names, and distinctive features of radio or other advertising.
[Emphasis supplied]
Clearly, from the broad definitions quoted above, the petitioners can be considered as
having used the "Shangri-La" name and "S" logo as a tradename and service mark.
The new Intellectual Property Code (IPC), Republic Act No. 8293, undoubtedly shows the
firm resolve of the Philippines to observe and follow the Paris Convention by incorporating
the relevant portions of the Convention such that persons who may question a mark (that
is, oppose registration, petition for the cancellation thereof, sue for unfair competition)
include persons whose internationally well-known mark, whether or not registered, is
identical with or confusingly similar to or constitutes a translation of a mark that is sought
to be registered or is actually registered.37
However, while the Philippines was already a signatory to the Paris Convention, the IPC
only took effect on January 1, 1988, and in the absence of a retroactivity clause, R.A. No.
166 still applies.38 Under the prevailing law and jurisprudence at the time, the CA had not
erred in ruling that:
The Paris Convention mandates that protection should be afforded to internationally known
marks as signatory to the Paris Convention, without regard as to whether the foreign
corporation is registered, licensed or doing business in the Philippines. It goes without
saying that the same runs afoul to Republic Act No. 166, which requires the actual use in
commerce in the Philippines of the subject mark or devise. The apparent conflict between
the two (2) was settled by the Supreme Court in this wise -
"Following universal acquiescence and comity, our municipal law on trademarks
regarding the requirement of actual use in the Philippines must subordinate an
international agreement inasmuch as the apparent clash is being decided by a municipal
tribunal (Mortensen vs. Peters, Great Britain, High Court of Judiciary of Scotland, 1906, 8
Sessions 93; Paras, International Law and World Organization, 1971 Ed., p. 20). Withal,
31
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
the fact that international law has been made part of the law of the land does not by any
means imply the primacy of international law over national law in the municipal sphere.
Under the doctrine of incorporation as applied in most countries, rules of international law
are given a standing equal, not superior, to national legislative enactments (Salonga and
Yap, Public International Law, Fourth ed., 1974, p. 16)."39 [Emphasis supplied]

Consequently, the petitioners cannot claim protection under the Paris Convention.
Nevertheless, with the double infirmity of lack of two-month prior use, as well as bad faith
in the respondent's registration of the mark, it is evident that the petitioners cannot be guilty
of infringement. It would be a great injustice to adjudge the petitioners guilty of infringing a
mark when they are actually the originator and creator thereof.

Nor can the petitioners' separate personalities from their mother corporation be an
obstacle in the enforcement of their rights as part of the Kuok Group of Companies and as
official repository, manager and operator of the subject mark and logo. Besides, R.A. No.
166 did not require the party seeking relief to be the owner of the mark but "any person
who believes that he is or will be damaged by the registration of a mark or trade name."40

WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution of
the Court of Appeals dated May 15, 2003 and September 15, 2003, respectively, and the
Decision of the Regional Trial Court of Quezon City dated March 8, 1996 are hereby SET
ASIDE. Accordingly, the complaint for infringement in Civil Case No. Q-91-8476 is ordered
DISMISSED.

SO ORDERED.

32

G.R. No. 159938 January 22, 2007
SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD., SHANGRI-LA
PROPERTIES, INC., MAKATI SHANGRI-LA HOTEL & RESORT, INC., AND KUOK
PHILIPPINES PROPERTIES, INC., Petitioners, vs. DEVELOPERS GROUP OF
COMPANIES, INC., Respondent.
Before the Court is this Motion for Reconsideration filed by respondent Developers Group
of Companies, Inc. (DGCI) praying for the reversal of this Court's Decision1 of March 31,
2006, the dispositive portion of which reads:
WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution of
the Court of Appeals dated May 15, 2003 and September 15, 2003, respectively, and the
Decision of the Regional Trial Court of Quezon City dated March 8, 1996 are hereby SET
ASIDE. Accordingly, the complaint for infringement in Civil Case No. Q-91-8476 is ordered
DISMISSED.
In its motion, respondent-movant DGCI raises the following grounds:
1. The certification of non-forum shopping submitted by petitioners is insufficient;
2. The word "Shangri-La" and "S" logo were adopted and used by the Kuok Group
as part of their corporate names and the names of their hotels;
3. Petitioners' claim of legal and beneficial ownership of mark and logo is baseless
and unwarranted;
4. Change of theory from owner to one who may be damaged as entitled to relief
is not allowable;
5. Finding of registration in patent offices in different countries around the world is
inaccurate;
6. DGCI's registration of the "Shangri-La" mark and the "S" logo is valid because
there was at least two months use thereof prior to application;
7. Section 2-A of R.A. No. 166 requires the actual commercial use of trademarks
in the Philippines pursuant to the principle of territoriality applicable to trademarks.
Hence, petitioners' use of subject marks outside of Philippine territory did not
confer on them any ownership rights thereto under Philippine laws;
8. The Regional Trial Court and the Court of Appeals' failure to find any bad faith
on the part of DGCI is conclusive on the Supreme Court;
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
9. DGCI's use of the subject marks in the Philippines is entitled to protection under
the territoriality principle of trademarks.2
The bulk of the aforementioned grounds is a mere rehash of movants previous arguments.
While DGCI is correct in stating that a motion for reconsideration, by its very nature, may
tend to dwell on issues already resolved in the decision sought to be reconsidered and
that this should not be an obstacle for a reconsideration,3 the hard reality is that movant
has failed to raise matters substantially plausible or compellingly persuasive to warrant the
desired course of action.
Considering that the grounds presently raised have been sufficiently considered, if not
squarely addressed, in the subject Decision, it behooves movant to convince the Court
that certain findings or conclusions in the Decision are contrary to law. As it is, however,
the instant motion does not raise any new or substantial legitimate ground or reason to
justify the reconsideration sought.1av vphi1.net
Movant DGCI would make capital on the alleged danger the subject Decision might wreak
upon Philippine trademark law, claiming that the decision in question would render
nugatory the protection intended by the trademark law to all Philippine trademark
registrants. This assertion is a baseless and sweeping statement. The interpretation of
Republic Act No. 166 in the Decision does not in any way diminish the protection afforded
to valid trademark registrations made under said law. It was glaringly obvious, however,
from the testimony of movants own witness that DGCIs registration of the subject mark
and logo was void due to the existence of bad faith and the absence of the requisite 2-
month prior use. Despite movant's melodramatic imputation of an abandonment of the
territoriality principle, the Decision actually upholds the principle but found that respondent
DGCI was not entitled to protection thereunder due to the double infirmity which attended
its registration of the subject mark and logo.
Anent DGCI's assertion of a change of theory on the part of the petitioners, suffice it to say
that the latter have never budged from seeking relief as rightful, legal and/or beneficial
owners of the mark and logo in dispute. The Decision ruled favorably on the veracity of the
petitioners' claim:
xxx It would be a great injustice to adjudge the petitioners guilty of infringing a mark when
they are actually the originator and creator thereof.
Nor can the petitioners' separate personalities from their mother corporation be an
obstacle in the enforcement of their rights as part of the Kuok Group of Companies and as
official repository, manager and operator of the subject mark and logo. Besides, R.A. No.
166 did not require the party seeking relief to be the owner of the mark but "any person
who believes that he is or will be damaged by the registration of a mark or trade
name."4 [Emphasis supplied]
33
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Clearly, from the word "Besides" used in the context of the aforequoted paragraph, all
that the Decision says is that even if petitioners were not the owners, they would still have
a right of action under the law. There was never an attempt on their part at an eleventh-
hour change of theory, as movant DGCI wishes to portray.

WHEREFORE, the instant motion for reconsideration is DENIED for lack of merit.

SO ORDERED.

34

G.R. No. 184850 October 20, 2010
E.Y. INDUSTRIAL SALES, INC. and ENGRACIO YAP, Petitioners, vs. SHEN DAR
ELECTRICITY AND MACHINERY CO., LTD., Respondent.
The Case
This Petition for Review on Certiorari under Rule 45 seeks to nullify and reverse the
February 21, 2008 Decision1and the October 6, 2008 Resolution2 rendered by the Court
of Appeals (CA) in CA-G.R. SP No. 99356 entitled Shen Dar Electricity and Machinery
Co., Ltd. v. E.Y. Industrial Sales, Inc. and Engracio Yap.
The assailed decision reversed the Decision dated May 25, 20073 issued by the Director
General of the Intellectual Property Office (IPO) in Inter Partes Case No. 14-2004-00084.
The IPO Director General upheld Certificate of Registration (COR) No. 4-1999-005393
issued by the IPO for the trademark "VESPA" in favor of petitioner E.Y. Industrial Sales,
Inc. (EYIS), but ordered the cancellation of COR No. 4-1997-121492, also for the
trademark "VESPA," issued in favor of respondent Shen Dar Electricity and Machinery
Co., Ltd. (Shen Dar). The Decision of the IPO Director General, in effect, affirmed the
Decision dated May 29, 20064 issued by the Director of the Bureau of Legal Affairs (BLA)
of the IPO.
The Facts
EYIS is a domestic corporation engaged in the production, distribution and sale of air
compressors and other industrial tools and equipment.5 Petitioner Engracio Yap is the
Chairman of the Board of Directors of EYIS.6
Respondent Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture
of air compressors.7
Both companies claimed to have the right to register the trademark "VESPA" for air
compressors.
From 1997 to 2004, EYIS imported air compressors from Shen Dar through sales
contracts. In the Sales Contract dated April 20, 2002,8 for example, Shen Dar would supply
EYIS in one (1) year with 24 to 30 units of 40-ft. containers worth of air compressors
identified in the Packing/Weight Lists simply as SD-23, SD-29, SD-31, SD-32, SD-39, SD-
67 and SD-68. In the corresponding Bill of Ladings, the items were described merely as
air compressors.9 There is no documentary evidence to show that such air compressors
were marked "VESPA."
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
On June 9, 1997, Shen Dar filed Trademark Application Serial No. 4-1997-121492 with
the IPO for the mark "VESPA, Chinese Characters and Device" for use on air compressors
and welding machines.10
On July 28, 1999, EYIS filed Trademark Application Serial No. 4-1999-005393, also for
the mark "VESPA," for use on air compressors.11 On January 18, 2004, the IPO issued
COR No. 4-1999-005393 in favor of EYIS.12 Thereafter, on February 8, 2007, Shen Dar
was also issued COR No. 4-1997-121492.13
In the meantime, on June 21, 2004, Shen Dar filed a Petition for Cancellation of EYIS
COR with the BLA.14 In the Petition, Shen Dar primarily argued that the issuance of the
COR in favor of EYIS violated Section 123.1 paragraphs (d), (e) and (f) of Republic Act
No. (RA) 8293, otherwise known as the Intellectual Property Code (IP Code), having first
filed an application for the mark. Shen Dar further alleged that EYIS was a mere distributor
of air compressors bearing the mark "VESPA" which it imported from Shen Dar. Shen Dar
also argued that it had prior and exclusive right to the use and registration of the mark
"VESPA" in the Philippines under the provisions of the Paris Convention.15
In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true owners of the
mark "VESPA" being the sole assembler and fabricator of air compressors since the early
1990s. They further alleged that the air compressors that Shen Dar allegedly supplied
them bore the mark "SD" for Shen Dar and not "VESPA." Moreover, EYIS argued that
Shen Dar, not being the owner of the mark, could not seek protection from the provisions
of the Paris Convention or the IP Code.16
Thereafter, the Director of the BLA issued its Decision dated May 29, 2006 in favor of EYIS
and against Shen Dar, the dispositive portion of which reads:
WHEREFORE, premises considered, the Petition for Cancellation is, as it is hereby,
DENIED. Consequently, Certificate of Registration No. 4-1999-[005393] for the mark
"VESPA" granted in the name of E.Y. Industrial Sales, Inc. on 9 January 2007 is hereby
upheld.
Let the filewrapper of VESPA subject matter of this case be forwarded to the
Administrative, Financial and Human Resource Development Services Bureau for
issuance and appropriate action in accordance with this DECISION and a copy thereof
furnished to the Bureau of Trademarks for information and update of its records.
SO ORDERED.17
Shen Dar appealed the decision of the BLA Director to the Director General of the IPO. In
the appeal, Shen Dar raised the following issues:
35

1. Whether the BLA Director erred in ruling that Shen Dar failed to present
evidence;
2. Whether the registration of EYIS application was proper considering that Shen
Dar was the first to file an application for the mark; and
3. Whether the BLA Director correctly ruled that EYIS is the true owner of the
mark.18
Later, the IPO Director General issued a Decision dated May 25, 2007 upholding the COR
issued in favor of EYIS while cancelling the COR of Shen Dar, the dispositive portion of
which reads:
WHEREFORE, premises considered, the appeal is DENIED. Certificate of Registration
No. 4-1999-005393 for the mark VESPA for air compressor issued in favor of Appellee is
hereby upheld. Consequently, Certificate of Registration No. 4-1997-121492 for the mark
VESPA, Chinese Characters & Device for goods air compressor and spot welding machine
issued in favor of Appellant is hereby ordered cancelled.
Let a copy of this Decision as well as the records of this case be furnished and returned to
the Director of Bureau of Legal Affairs for appropriate action. Further, let also the Directors
of the Bureau of Trademarks, the Administrative, Financial and Human Resources
Development Services Bureau, and the Documentation, Information and Technology
Transfer Bureau be furnished a copy of this Decision for information, guidance, and
records purposes.19
Shen Dar appealed the above decision of the IPO Director General to the CA where Shen
Dar raised the following issues:
1. Whether Shen Dar is guilty of forum shopping;
2. Whether the first-to-file rule applies to the instant case;
3. Whether Shen Dar presented evidence of actual use;
4. Whether EYIS is the true owner of the mark "VESPA";
5. Whether the IPO Director General erred in cancelling Shen Dars COR No. 4-
1997-121492 without a petition for cancellation; and
6. Whether Shen Dar sustained damages.20
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
In the assailed decision, the CA reversed the IPO Director General and ruled in favor of
Shen Dar. The dispositive portion states:
WHEREFORE, premises considered, the petition is GRANTED. Consequently, the
assailed decision of the Director General of the Intellectual Property Office dated May 25,
2007 is hereby REVERSED and SET ASIDE. In lieu thereof, a new one is entered: a)
ordering the cancellation of Certificate of Registration No. 4-1999-005393 issued on
January 19, 2004 for the trademark VESPA in favor of E.Y. Industrial Sales, Inc.; b)
ordering the restoration of the validity of Certificate of Registration No. 4-1997-121492 for
the trademark VESPA in favor of Shen Dar Electricity and Machinery Co., Ltd. No
pronouncement as to costs.
SO ORDERED.21
In ruling for Shen Dar, the CA ruled that, despite the fact that Shen Dar did not formally
offer its evidence before the BLA, such evidence was properly attached to the Petition for
Cancellation. As such, Shen Dars evidence may be properly considered. The CA also
enunciated that the IPO failed to properly apply the provisions of Sec. 123.1(d) of RA 8293,
which prohibits the registration of a trademark in favor of a party when there is an earlier
filed application for the same mark. The CA further ruled that Shen Dar should be
considered to have prior use of the mark based on the statements made by the parties in
their respective Declarations of Actual Use. The CA added that EYIS is a mere importer of
the air compressors with the mark "VESPA" as may be gleaned from its receipts which
indicated that EYIS is an importer, wholesaler and retailer, and therefore, cannot be
considered an owner of the mark.22
EYIS filed a motion for reconsideration of the assailed decision which the CA denied in the
assailed resolution.
Hence, the instant appeal.
Issues
EYIS and Yap raise the following issues in their petition:
A. Whether the Director General of the IPO correctly upheld the rights of Petitioners
over the trademark VESPA.
B. Whether the Director General of the IPO can, under the circumstances, order
the cancellation of Respondents certificate of registration for VESPA, which has
been fraudulently obtained and erroneously issued.
36

C. Whether the Honorable Court of Appeals was justified in reversing the findings
of fact of the IPO, which affirm the rights of Petitioner EYIS over the trademark
VESPA and when such findings are supported by the evidence on record.
D. Whether this Honorable Court may review questions of fact considering that the
findings of the Court of Appeals and the IPO are in conflict and the conclusions of
the appellee court are contradicted by the evidence on record.23
The Ruling of the Court
The appeal is meritorious.
First Issue:
Whether this Court may review the questions of fact presented
Petitioners raise the factual issue of who the true owner of the mark is. As a general rule,
this Court is not a trier of facts. However, such rule is subject to exceptions.
In New City Builders, Inc. v. National Labor Relations Commission,24 the Court ruled that:
We are very much aware that the rule to the effect that this Court is not a trier of facts
admits of exceptions. As we have stated in Insular Life Assurance Company, Ltd. vs. CA:
[i]t is a settled rule that in the exercise of the Supreme Courts power of review, the Court
is not a trier of facts and does not normally undertake the re-examination of the evidence
presented by the contending parties during the trial of the case considering that the
findings of facts of the CA are conclusive and binding on the Court. However, the Court
had recognized several exceptions to this rule, to wit: (1) when the findings are grounded
entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of facts are
conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of
the case, or its findings are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9) when the
facts set forth in the petition as well as in the petitioners main and reply briefs are not
disputed by the respondent; (10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (11) when the Court
of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which,
if properly considered, would justify a different conclusion. (Emphasis supplied.)
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
In the instant case, the records will show that the IPO and the CA made differing
conclusions on the issue of ownership based on the evidence presented by the parties.
Hence, this issue may be the subject of this Courts review.
Second Issue:
Whether evidence presented before the BLA must be formally offered
Preliminarily, it must be noted that the BLA ruled that Shen Dar failed to adduce evidence
in support of its allegations as required under Office Order No. 79, Series of 2005,
Amendments to the Regulations on Inter Partes Proceedings, having failed to formally
offer its evidence during the proceedings before it. The BLA ruled:
At the outset, we note petitioners failure to adduce any evidence in support of its
allegations in the Petition for Cancellation. Petitioner did not file nor submit its marked
evidence as required in this Bureaus Order No. 2006-157 dated 25 January 2006 in
compliance with Office Order No. 79, Series of 2005, Amendments to the Regulations on
Inter Partes Proceedings.25 x x x
In reversing such finding, the CA cited Sec. 2.4 of BLA Memorandum Circular No. 03,
Series of 2005, which states:
Section 2.4. In all cases, failure to file the documentary evidences in accordance with
Sections 7 and 8 of the rules on summary proceedings shall be construed as a waiver on
the part of the parties. In such a case, the original petition, opposition, answer and the
supporting documents therein shall constitute the entire evidence for the parties subject to
applicable rules.
The CA concluded that Shen Dar needed not formally offer its evidence but merely needed
to attach its evidence to its position paper with the proper markings,26 which it did in this
case.
The IP Code provides under its Sec. 10.3 that the Director General of the IPO shall
establish the procedure for the application for the registration of a trademark, as well as
the opposition to it:
Section 10. The Bureau of Legal Affairs.The Bureau of Legal Affairs shall have the
following functions:
xxxx
37

10.3. The Director General may by Regulations establish the procedure to govern the
implementation of this Section.
Thus, the Director General issued Office Order No. 79, Series of 2005 amending the
regulations on Inter Partes Proceedings, Sec. 12.1 of which provides:
Section 12. Evidence for the Parties
12.1. The verified petition or opposition, reply if any, duly marked affidavits of the
witnesses, and the documents submitted, shall constitute the entire evidence for the
petitioner or opposer. The verified answer, rejoinder if any, and the duly marked affidavits
and documents submitted shall constitute the evidence for the respondent. Affidavits,
documents and other evidence not submitted and duly marked in accordance with the
preceding sections shall not be admitted as evidence.
The preceding sections referred to in the above provision refer to Secs. 7.1, 8.1 and 9
which, in turn, provide:
Section 7. Filing of Petition or Opposition
7.1. The petition or opposition, together with the affidavits of witnesses and originals of the
documents and other requirements, shall be filed with the Bureau, provided, that in case
of public documents, certified copies shall be allowed in lieu of the originals. The Bureau
shall check if the petition or opposition is in due form as provided in the Regulations
particularly Rule 3, Section 3; Rule 4, Section 2; Rule 5, Section 3; Rule 6, Section 9; Rule
7, Sections 3 and 5; Rule 8, Sections 3 and 4. For petition for cancellation of layout design
(topography) of integrated circuits, Rule 3, Section 3 applies as to the form and
requirements. The affidavits, documents and other evidence shall be marked
consecutively as "Exhibits" beginning with the letter "A".
Section 8. Answer
8.1. Within three (3) working days from receipt of the petition or opposition, the Bureau
shall issue an order for the respondent to file an answer together with the affidavits of
witnesses and originals of documents, and at the same time shall notify all parties required
to be notified in the IP Code and these Regulations, provided, that in case of public
documents, certified true copies may be submitted in lieu of the originals. The affidavits
and documents shall be marked consecutively as "Exhibits" beginning with the number
"1".
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Section 9. Petition or Opposition and Answer must be verified Subject to Rules 7 and 8
of these regulations, the petition or opposition and the answer must be verified. Otherwise,
the same shall not be considered as having been filed.
In other words, as long as the petition is verified and the pieces of evidence consisting of
the affidavits of the witnesses and the original of other documentary evidence are attached
to the petition and properly marked in accordance with Secs. 7.1 and 8.1 abovementioned,
these shall be considered as the evidence of the petitioner. There is no requirement under
the abovementioned rules that the evidence of the parties must be formally offered to the
BLA.
In any case, as a quasi-judicial agency and as stated in Rule 2, Sec. 5 of the Regulations
on Inter Partes Proceedings, the BLA is not bound by technical rules of procedure. The
evidence attached to the petition may, therefore, be properly considered in the resolution
of the case.
Third Issue:
Whether the IPO Director General can
validly cancel Shen Dars Certificate of Registration
In his Decision, the IPO Director General stated that, despite the fact that the instant case
was for the cancellation of the COR issued in favor of EYIS, the interests of justice dictate,
and in view of its findings, that the COR of Shen Dar must be cancelled. The Director
General explained:
Accordingly, while the instant case involves a petition to cancel the registration of the
Appellees trademark VESPA, the interest of justice requires that Certificate of Registration
No. 4-1997-121492 be cancelled. While the normal course of proceedings should have
been the filing of a petition for cancellation of Certificate of Registration No. 4-1997-
121492, that would involve critical facts and issues that have already been resolved in this
case. To allow the Applicant to still maintain in the Trademark Registry Certificate of
Registration No. 4-1997-121492 would nullify the exclusive rights of Appellee as the true
and registered owner of the mark VESPA and defeat the purpose of the trademark
registration system.27
Shen Dar challenges the propriety of such cancellation on the ground that there was no
petition for cancellation as required under Sec. 151 of RA 8293.
Office Order No. 79, Series of 2005, provides under its Sec. 5 that:
38

Section 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes
cases.The rules of procedure herein contained primarily apply in the conduct of hearing
of Inter Partes cases. The Rules of Court may be applied suppletorily. The Bureau shall
not be bound by strict technical rules of procedure and evidence but may adopt, in the
absence of any applicable rule herein, such mode of proceedings which is consistent with
the requirements of fair play and conducive to the just, speedy and inexpensive disposition
of cases, and which will give the Bureau the greatest possibility to focus on the contentious
issues before it. (Emphasis supplied.)
The above rule reflects the oft-repeated legal principle that quasi-judicial and
administrative bodies are not bound by technical rules of procedure. Such principle,
however, is tempered by fundamental evidentiary rules, including due process. Thus, we
ruled in Aya-ay, Sr. v. Arpaphil Shipping Corp.:28
That administrative quasi-judicial bodies like the NLRC are not bound by technical rules of
procedure in the adjudication of cases does not mean that the basic rules on proving
allegations should be entirely dispensed with. A party alleging a critical fact must still
support his allegation with substantial evidence. Any decision based on unsubstantiated
allegation cannot stand as it will offend due process.
x x x The liberality of procedure in administrative actions is subject to limitations imposed
by basic requirements of due process. As this Court said in Ang Tibay v. CIR, the provision
for flexibility in administrative procedure "does not go so far as to justify orders without a
basis in evidence having rational probative value." More specifically, as held in Uichico v.
NLRC:
It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the
technical rules of procedure in the adjudication of cases. However, this procedural rule
should not be construed as a license to disregard certain fundamental evidentiary rules.
This was later reiterated in Lepanto Consolidated Mining Company v. Dumapis:29
While it is true that administrative or quasi-judicial bodies like the NLRC are not bound by
the technical rules of procedure in the adjudication of cases, this procedural rule should
not be construed as a license to disregard certain fundamental evidentiary rules. The
evidence presented must at least have a modicum of admissibility for it to have probative
value. Not only must there be some evidence to support a finding or conclusion, but the
evidence must be substantial. Substantial evidence is more than a mere scintilla. It means
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion. Thus, even though technical rules of evidence are not strictly complied with
before the LA and the NLRC, their decision must be based on evidence that must, at the
very least, be substantial.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
The fact that no petition for cancellation was filed against the COR issued to Shen Dar
does not preclude the cancellation of Shen Dars COR. It must be emphasized that, during
the hearing for the cancellation of EYIS COR before the BLA, Shen Dar tried to establish
that it, not EYIS, was the true owner of the mark "VESPA" and, thus, entitled to have it
registered. Shen Dar had more than sufficient opportunity to present its evidence and
argue its case, and it did. It was given its day in court and its right to due process was
respected. The IPO Director Generals disregard of the procedure for the cancellation of a
registered mark was a valid exercise of his discretion.
Fourth Issue:
Whether the factual findings of the IPO are binding on the CA
Next, petitioners challenge the CAs reversal of the factual findings of the BLA that Shen
Dar and not EYIS is the prior user and, therefore, true owner of the mark. In arguing its
position, petitioners cite numerous rulings of this Court where it was enunciated that the
factual findings of administrative bodies are given great weight if not conclusive upon the
courts when supported by substantial evidence.
We agree with petitioners that the general rule in this jurisdiction is that the factual findings
of administrative bodies deserve utmost respect when supported by evidence. However,
such general rule is subject to exceptions.
In Fuentes v. Court of Appeals,30 the Court established the rule of conclusiveness of factual
findings of the CA as follows:
Jurisprudence teaches us that "(a)s a rule, the jurisdiction of this Court in cases brought to
it from the Court of Appeals x x x is limited to the review and revision of errors of law
allegedly committed by the appellate court, as its findings of fact are deemed conclusive.
As such this Court is not duty-bound to analyze and weigh all over again the evidence
already considered in the proceedings below. This rule, however, is not without
exceptions." The findings of fact of the Court of Appeals, which are as a general rule
deemed conclusive, may admit of review by this Court:
(1) when the factual findings of the Court of Appeals and the trial court are
contradictory;
(2) when the findings are grounded entirely on speculation, surmises, or
conjectures;
(3) when the inference made by the Court of Appeals from its findings of fact is
manifestly mistaken, absurd, or impossible;
39

(4) when there is grave abuse of discretion in the appreciation of facts;
(5) when the appellate court, in making its findings, goes beyond the issues of the
case, and such findings are contrary to the admissions of both appellant and
appellee;
(6) when the judgment of the Court of Appeals is premised on a misapprehension
of facts;
(7) when the Court of Appeals fails to notice certain relevant facts which, if properly
considered, will justify a different conclusion;
(8) when the findings of fact are themselves conflicting;
(9) when the findings of fact are conclusions without citation of the specific
evidence on which they are based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence
of evidence but such findings are contradicted by the evidence on record.
(Emphasis supplied.)
Thereafter, in Villaflor v. Court of Appeals,31 this Court applied the above principle to factual
findings of quasi-judicial bodies, to wit:
Proceeding by analogy, the exceptions to the rule on conclusiveness of factual findings of
the Court of Appeals, enumerated in Fuentes vs. Court of Appeals, can also be applied to
those of quasi-judicial bodies x x x. (Emphasis supplied.)
Here, the CA identified certain material facts that were allegedly overlooked by the BLA
and the IPO Director General which it opined, when correctly appreciated, would alter the
result of the case. An examination of the IPO Decisions, however, would show that no
such evidence was overlooked.
First, as to the date of first use of the mark by the parties, the CA stated:
To begin with, when respondents-appellees filed its application for registration of the
VESPA trademark on July 28, 1999, they stated under oath, as found in their
DECLARATION OF ACTUAL USE, that their first use of the mark was on December 22,
1998. On the other hand, [Shen Dar] in its application dated June 09, 1997 stated, likewise
under oath in their DECLARATION OF ACTUAL USE, that its first use of the mark was in
June 1996. This cannot be made any clearer. [Shen Dar] was not only the first to file an
application for registration but likewise first to use said registrable mark.32
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Evidently, the CA anchors its finding that Shen Dar was the first to use the mark on the
statements of the parties in their respective Declarations of Actual Use. Such conclusion
is premature at best. While a Declaration of Actual Use is a notarized document, hence, a
public document, it is not conclusive as to the fact of first use of a mark. The declaration
must be accompanied by proof of actual use as of the date claimed. In a declaration of
actual use, the applicant must, therefore, present evidence of such actual use.
The BLA ruled on the same issue, as follows:
More importantly, the private respondents prior adoption and continuous use of the mark
VESPA on air compressors is bolstered by numerous documentary evidence consisting
of sales invoices issued in the name of E.Y. Industrial and Bill of Lading (Exhibits 4 to
375). Sales Invoice No. 12075 dated March 27, 1995 antedates petitioners date of first
use on January 1, 1997 indicated in its trademark application filed on June 9, 1997 as well
as the date of first use in June of 1996 as indicated in the Declaration of Actual Use
submitted on December 3, 2001 (Exhibit 385). The use by respondent registrant in the
concept of owner is shown by commercial documents, sales invoices unambiguously
describing the goods as "VESPA" air compressors. Private respondents have sold the air
compressors bearing the "VESPA" to various locations in the Philippines, as far as
Mindanao and the Visayas since the early 1990s. We carefully inspected the evidence
consisting of three hundred seventy-one (371) invoices and shipment documents which
show that VESPA air compressors were sold not only in Manila, but to locations such as
Iloilo City, Cebu City, Dumaguete City, Zamboanga City, Cagayan de Oro City, Davao
City, to name a few. There is no doubt that it is through private respondents efforts that
the mark "VESPA" used on air compressors has gained business goodwill and reputation
in the Philippines for which it has validly acquired trademark rights. Respondent E.Y.
Industrials right has been preserved until the passage of RA 8293 which entitles it to
register the same.33
Comparatively, the BLAs findings were founded upon the evidence presented by the
parties. An example of such evidence is Invoice No. 12075 dated March 29, 199534 where
EYIS sold four units of VESPA air compressors to Veteran Paint Trade Center. Shen Dar
failed to rebut such evidence. The truth, as supported by the evidence on record, is that
EYIS was first to use the mark.
Moreover, the discrepancy in the date provided in the Declaration of Actual Use filed by
EYIS and the proof submitted was appropriately considered by the BLA, ruling as follows:
On the contrary, respondent EY Industrial was able to prove the use of the mark "VESPA"
on the concept of an owner as early as 1991. Although Respondent E.Y. indicated in its
trademark application that its first use was in December 22, 1998, it was able to prove by
clear and positive evidence of use prior to such date.
40

In Chuang Te v. Ng Kian-Guiab and Director of Patents, L-23791, 23 November 1966, the
High Court clarified: Where an applicant for registration of a trademark states under oath
the date of his earliest use, and later on he wishes to carry back his first date of use to an
earlier date, he then takes on the greater burden of presenting "clear and convincing
evidence" of adoption and use as of that earlier date. (B.R. Baker Co. vs. Lebrow Bros.,
150 F. 2d 580.)35
The CA further found that EYIS is not a manufacturer of air compressors but merely
imports and sells them as a wholesaler and retailer. The CA reasoned:
Conversely, a careful perusal of appellees own submitted receipts shows that it is not
manufacturer but an importer, wholesaler and retailer. This fact is corroborated by the
testimony of a former employee of appellees. Admittedly too, appellees are importing air
compressors from [Shen Dar] from 1997 to 2004. These matters, lend credence to [Shen
Dars] claim that the letters SD followed by a number inscribed in the air compressor is
only to describe its type, manufacturer business name and capacity. The VESPA mark is
in the sticker which is attached to the air compressors. The ruling of the Supreme Court,
in the case of UNNO Commercial Enterprises, Inc. vs. General Milling Corporation et al.,
is quite enlightening, thus We quote:
"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. Thus, this Court, has on several
occasions ruled that where the applicants alleged ownership is not shown in any notarial
document and the applicant appears to be merely an importer or distributor of the
merchandise covered by said trademark, its application cannot be granted."36
This is a non sequitur. It does not follow. The fact that EYIS described itself in its sales
invoice as an importer, wholesaler and retailer does not preclude its being a manufacturer.
Sec. 237 of the National Internal Revenue Code states:
Section 237. Issuance of Receipts or Sales or Commercial Invoices.All persons subject
to an internal revenue tax shall, for each sale and transfer of merchandise or for services
rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or
sale or commercial invoices, prepared at least in duplicate, showing the date of
transaction, quantity, unit cost and description of merchandise or nature of service:
Provided, however, That where the receipt is issued to cover payment made as rentals,
commissions, compensation or fees, receipts or invoices shall be issued which shall show
the name, business style, if any, and address of the purchaser, customer or client.
The original of each receipt or invoice shall be issued to the purchaser, customer or client
at the time the transaction is effected, who, if engaged in business or in the exercise of
profession, shall keep and preserve the same in his place of business for a period of three
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
(3) years from the close of the taxable year in which such invoice or receipt was issued,
while the duplicate shall be kept and preserved by the issuer, also in his place of business,
for a like period.
The Commissioner may, in meritorious cases, exempt any person subject to an internal
revenue tax from compliance with the provisions of this Section. (Emphasis supplied.)
Correlatively, in Revenue Memorandum No. 16-2003 dated May 20, 2003, the Bureau of
Internal Revenue defined a Sales Invoice and identified its required information as follows:
Sales Invoices (SI)/Cash Invoice (CI) is written account of goods sold or services
rendered and the prices charged therefor used in the ordinary course of business
evidencing sale and transfer or agreement to sell or transfer of goods and services. It
contains the same information found in the Official Receipt.
Official Receipt (OR) is a receipt issued for the payment of services rendered or goods
sold. It contains the following information:
a. Business name and address;
b. Taxpayer Identification Number;
c. Name of printer (BIR Permit No.) with inclusive serial number of booklets and
date of issuance of receipts.
There is no requirement that a sales invoice should accurately state the nature of all the
businesses of the seller. There is no legal ground to state that EYIS "declaration" in its
sales invoices that it is an importer, wholesaler and retailer is restrictive and would
preclude its being a manufacturer.
From the above findings, there was no justifiable reason for the CA to disregard the factual
findings of the IPO. The rulings of the IPO Director General and the BLA Director were
supported by clear and convincing evidence. The facts cited by the CA and Shen Dar do
not justify a different conclusion from that of the IPO. Hence, the findings of the BLA
Director and the IPO Director General must be deemed as conclusive on the CA.
Fifth Issue:
Whether EYIS is the true owner of the mark "VESPA"
41

In any event, given the length of time already invested by the parties in the instant case,
this Court must write finis to the instant controversy by determining, once and for all, the
true owner of the mark "VESPA" based on the evidence presented.
RA 8293 espouses the "first-to-file" rule as stated under Sec. 123.1(d) which states:
Section 123. Registrability. - 123.1. A mark cannot be registered if it:
xxxx
(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.
(Emphasis supplied.)
Under this provision, the registration of a mark is prevented with the filing of an earlier
application for registration. This must not, however, be interpreted to mean that ownership
should be based upon an earlier filing date. While RA 8293 removed the previous
requirement of proof of actual use prior to the filing of an application for registration of a
mark, proof of prior and continuous use is necessary to establish ownership of a mark.
Such ownership constitutes sufficient evidence to oppose the registration of a mark.
Sec. 134 of the IP Code provides that "any person who believes that he would be damaged
by the registration of a mark x x x" may file an opposition to the application. The term "any
person" encompasses the true owner of the markthe prior and continuous user.
Notably, the Court has ruled that the prior and continuous use of a mark may even
overcome the presumptive ownership of the registrant and be held as the owner of the
mark. As aptly stated by the Court in Shangri-la International Hotel Management, Ltd. v.
Developers Group of Companies, Inc.:37
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.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
xxxx
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.
xxxx
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 registrants 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.
Here, the incontrovertible truth, as established by the evidence submitted by the parties,
is that EYIS is the prior user of the mark. The exhaustive discussion on the matter made
by the BLA sufficiently addresses the issue:
Based on the evidence, Respondent E.Y. Industrial is a legitimate corporation engaged in
buying, importing, selling, industrial machineries and tools, manufacturing, among others
since its incorporation in 1988. (Exhibit "1"). Indeed private respondents have submitted
photographs (Exhibit "376", "377", "378", "379") showing an assembly line of its
manufacturing or assembly process. 1avv phi1
More importantly, the private respondents prior adoption and continuous use of the mark
"VESPA" on air compressors is bolstered by numerous documentary evidence consisting
of sales invoices issued in the name of respondent EY Industrial and Bills of Lading.
(Exhibits "4" to "375"). Sales Invoice No. 12075 dated March 27, 1995 antedates
petitioners date of first use in January 1, 1997 indicated in its trademark application filed
in June 9, 1997 as well as the date of first use in June of 1996 as indicated in the
Declaration of Actual Use submitted on December 3, 2001 (Exhibit "385"). The use by
respondent-registrant in the concept of owner is shown by commercial documents, sales
invoices unambiguously describing the goods as "VESPA" air compressors. Private
respondents have sold the air compressors bearing the "VESPA" to various locations in
the Philippines, as far as Mindanao and the Visayas since the early 1990s. We carefully
inspected the evidence consisting of three hundred seventy one (371) invoices and
shipment documents which show that "VESPA" air compressors were sold not only in
Manila, but to locations such as Iloilo City, Cebu City, Dumaguete City, Zamboanga City,
Cagayan de Oro City, Davao City to name a few. There is no doubt that it is through private
42
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
respondents efforts that the mark "VESPA" used on air compressors has gained business SO ORDERED.
goodwill and reputation in the Philippines for which it has validly acquired trademark rights.
Respondent EY Industrials right has been preserved until the passage of RA 8293 which
entitles it to register the same. x x x38

On the other hand, Shen Dar failed to refute the evidence cited by the BLA in its decision.
More importantly, Shen Dar failed to present sufficient evidence to prove its own prior use
of the mark "VESPA." We cite with approval the ruling of the BLA:

[Shen Dar] avers that it is the true and rightful owner of the trademark "VESPA" used on
air compressors. The thrust of [Shen Dars] argument is that respondent E.Y. Industrial
Sales, Inc. is a mere distributor of the "VESPA" air compressors. We disagree.

This conclusion is belied by the evidence. We have gone over each and every document
attached as Annexes "A", "A" 1-48 which consist of Bill of Lading and Packing Weight List.
Not one of these documents referred to a "VESPA" air compressor. Instead, it simply
describes the goods plainly as air compressors which is type "SD" and not "VESPA". More
importantly, the earliest date reflected on the Bill of Lading was on May 5, 1997. (Annex
"A"-1). [Shen Dar] also attached as Annex "B" a purported Sales Contract with respondent
EY Industrial Sales dated April 20, 2002. Surprisingly, nowhere in the document does it
state that respondent EY Industrial agreed to sell "VESPA" air compressors. The
document only mentions air compressors which if genuine merely bolsters respondent
Engracio Yaps contention that [Shen Dar] approached them if it could sell the "Shen Dar"
or "SD" air compressor. (Exhibit "386") In its position paper, [Shen Dar] merely mentions
of Bill of Lading constituting respondent as consignee in 1993 but never submitted the
same for consideration of this Bureau. The document is also not signed by [Shen Dar].
The agreement was not even drafted in the letterhead of either [Shen Dar] nor [sic]
respondent registrant. Our only conclusion is that [Shen Dar] was not able to prove to be
the owner of the VESPA mark by appropriation. Neither was it able to prove actual
commercial use in the Philippines of the mark VESPA prior to its filing of a trademark
application in 9 June 1997.39

As such, EYIS must be considered as the prior and continuous user of the mark "VESPA"
and its true owner. Hence, EYIS is entitled to the registration of the mark in its name.

WHEREFORE, the petition is hereby GRANTED. The CAs February 21, 2008 Decision
and October 6, 2008 Resolution in CA-G.R. SP No. 99356 are hereby REVERSED and
SET ASIDE. The Decision dated May 25, 2007 issued by the IPO Director General in Inter
Partes Case No. 14-2004-00084 and the Decision dated May 29, 2006 of the BLA Director
of the IPO are hereby REINSTATED.

No costs.

43

G.R. No. 194307 November 20, 2013
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly BIRKENSTOCK
ORTHOPAEDIE GMBH), Petitioner, vs. PHILIPPINE SHOE EXPO MARKETING
CORPORATION, Respondent.
Assailed in this Petition for Review on Certiorari1 are the Court of Appeals (CA)
Decision2 dated June 25, 2010 and Resolution3 dated October 27, 2010 in CA-G.R. SP No.
112278 which reversed and set aside the Intellectual Property Office (IPO) Director
Generals Decision4 dated December 22, 2009 that allowed the registration of various
trademarks in favor of petitioner Birkenstock Orthopaedie GmbH & Co. KG.
The Facts
Petitioner, a corporation duly organized and existing under the laws of Germany, applied
for various trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under
Trademark Application Serial No. (TASN) 4-1994-091508 for goods falling under Class 25
of the International Classification of Goods and Services (Nice Classification) with filing
date of March 11, 1994; (b) "BIRKENSTOCK BAD HONNEF -RHEIN & DEVICE
COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT,
CROSS AND SUNBEA M" under TASN 4-1994-091509 for goods falling under Class 25
of the Nice Classification with filing date of March 11, 1994; and (c) "BIRKENSTOCK BAD
HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL AND
REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-095043
for goods falling under Class 10 of the Nice Classification with filing date of September 5,
1994 (subject applications).5
However, registration proceedings of the subject applications were suspended in view of
an existing registration of the mark "BIRKENSTOCK AND DEVICE" under Registration
No. 56334 dated October 21, 1993 (Registration No. 56334) in the name of Shoe Town
International and Industrial Corporation, the predecessor-in-interest of respondent
Philippine Shoe Expo Marketing Corporation.6 In this regard, on May 27, 1997 petitioner
filed a petition for cancellation of Registration No. 56334 on the ground that it is the lawful
and rightful owner of the Birkenstock marks (Cancellation Case).7 During its pendency,
however, respondent and/or its predecessor-in-interest failed to file the required 10th Year
Declaration of Actual Use (10th Year DAU) for Registration No. 56334 on or before
October 21, 2004,8 thereby resulting in the cancellation of such mark.9 Accordingly, the
cancellation case was dismissed for being moot and academic.10
The aforesaid cancellation of Registration No. 56334 paved the way for the publication of
the subject applications in the IPO e-Gazette on February 2, 2007.11 In response,
respondent filed three (3) separate verified notices of oppositions to the subject
applications docketed as Inter Partes Case Nos. 14-2007-00108, 14-2007-00115, and 14-
2007-00116,12 claiming, inter alia, that: (a) it, together with its predecessor-in-interest, has
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
been using Birkenstock marks in the Philippines for more than 16 years through the mark
"BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject applications are
identical to the one covered by Registration No. 56334 and thus, petitioner has no right to
the registration of such marks; (c) on November 15, 1991, respondents predecessor-in-
interest likewise obtained a Certificate of Copyright Registration No. 0-11193 for the word
"BIRKENSTOCK" ; (d) while respondent and its predecessor-in-interest failed to file the
10th Yea r DAU, it continued the use of "BIRKENSTOCK AND DEVICE" in lawful
commerce; and (e) to record its continued ownership and exclusive right to use the
"BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a " re-application " of its old
registration, Registration No. 56334.13 On November 13, 2007, the Bureau of Legal Affairs
(BLA) of the IPO issued Order No. 2007-2051 consolidating the aforesaid inter partes
cases (Consolidated Opposition Cases).14
The Ruling of the BLA
In its Decision15 dated May 28, 2008, the BLA of the IPO sustained respondents
opposition, thus, ordering the rejection of the subject applications. It ruled that the
competing marks of the parties are confusingly similar since they contained the word
"BIRKENSTOCK" and are used on the same and related goods. It found respondent and
its predecessor-in-interest as the prior user and adopter of "BIRKENSTOCK" in the
Philippines, while on the other hand, petitioner failed to present evidence of actual use in
the trade and business in this country. It opined that while Registration No. 56334 was
cancelled, it does not follow that prior right over the mark was lost, as proof of continuous
and uninterrupted use in trade and business in the Philippines was presented. The BLA
likewise opined that petitioners marks are not well -known in the Philippines and
internationally and that the various certificates of registration submitted by petitioners were
all photocopies and, therefore, not admissible as evidence.16
Aggrieved, petitioner appealed to the IPO Director General.
The Ruling of the IPO Director General
In his Decision17 dated December 22, 2009, the IPO Director General reversed and set
aside the ruling of the BLA, thus allowing the registration of the subject applications. He
held that with the cancellation of Registration No. 56334 for respondents failure to file the
10th Year DAU, there is no more reason to reject the subject applications on the ground
of prior registration by another proprietor.18 More importantly, he found that the evidence
presented proved that petitioner is the true and lawful owner and prior user of
"BIRKENSTOCK" marks and thus, entitled to the registration of the marks covered by the
subject applications.19 The IPO Director General further held that respondents copyright
for the word "BIRKENSTOCK" is of no moment since copyright and trademark are different
forms of intellectual property that cannot be interchanged.20
44

Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a
petition for review with the CA.
Ruling of the CA
In its Decision21 dated June 25, 2010, the CA reversed and set aside the ruling of the IPO
Director General and reinstated that of the BLA. It disallowed the registration of the subject
applications on the ground that the marks covered by such applications "are confusingly
similar, if not outright identical" with respondents mark.22 It equally held that respondents
failure to file the 10th Year DAU for Registration No. 56334 "did not deprive petitioner of
its ownership of the BIRKENSTOCK mark since it has submitted substantial evidence
showing its continued use, promotion and advertisement thereof up to the present."23 It
opined that when respondents predecessor-in-interest adopted and started its actual use
of "BIRKENSTOCK," there is neither an existing registration nor a pending application for
the same and thus, it cannot be said that it acted in bad faith in adopting and starting the
use of such mark.24 Finally, the CA agreed with respondent that petitioners documentary
evidence, being mere photocopies, were submitted in violation of Section 8.1 of Office
Order No. 79, Series of 2005 (Rules on Inter Partes Proceedings).
Dissatisfied, petitioner filed a Motion for Reconsideration25 dated July 20, 2010, which was,
however, denied in a Resolution26 dated October 27, 2010. Hence, this petition.27
Issues Before the Court
The primordial issue raised for the Courts resolution is whether or not the subject marks
should be allowed registration in the name of petitioner.
The Courts Ruling
The petition is meritorious.
A. Admissibility of Petitioners Documentary Evidence.
In its Comment28 dated April 29, 2011, respondent asserts that the documentary evidence
submitted by petitioner in the Consolidated Opposition Cases, which are mere
photocopies, are violative of Section 8.1 of the Rules on Inter Partes Proceedings, which
requires certified true copies of documents and evidence presented by parties in lieu of
originals.29 As such, they should be deemed inadmissible.
The Court is not convinced.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
It is well-settled that "the rules of procedure are mere tools aimed at facilitating the
attainment of justice, rather than its frustration. A strict and rigid application of the rules
must always be eschewed when it would subvert the primary objective of the rules, that is,
to enhance fair trials and expedite justice. Technicalities should never be used to defeat
the substantive rights of the other party. Every party-litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free from the constraints of
technicalities."30 "Indeed, the primordial policy is a faithful observance of [procedural rules],
and their relaxation or suspension should only be for persuasive reasons and only in
meritorious cases, to relieve a litigant of an injustice not commensurate with the degree of
his thoughtlessness in not complying with the procedure prescribed."31 This is especially
true with quasi-judicial and administrative bodies, such as the IPO, which are not bound
by technical rules of procedure.32 On this score, Section 5 of the Rules on Inter Partes
Proceedings provides:
Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases.
The rules of procedure herein contained primarily apply in the conduct of hearing of Inter
Partes cases. The Rules of Court may be applied suppletorily. The Bureau shall not be
bound by strict technical rules of procedure and evidence but may adopt, in the absence
of any applicable rule herein, such mode of proceedings which is consistent with the
requirements of fair play and conducive to the just, speedy and inexpensive disposition of
cases, and which will give the Bureau the greatest possibility to focus on the contentious
issues before it. (Emphasis and underscoring supplied)
In the case at bar, while petitioner submitted mere photocopies as documentary evidence
in the Consolidated Opposition Cases, it should be noted that the IPO had already
obtained the originals of such documentary evidence in the related Cancellation Case
earlier filed before it. Under this circumstance and the merits of the instant case as will be
subsequently discussed, the Court holds that the IPO Director Generals relaxation of
procedure was a valid exercise of his discretion in the interest of substantial justice.33
Having settled the foregoing procedural matter, the Court now proceeds to resolve the
substantive issues.
B. Registration and ownership of "BIRKENSTOCK."
Republic Act No. (RA) 166,34 the governing law for Registration No. 56334, requires the
filing of a DAU on specified periods,35 to wit:
Section 12. Duration. Each certificate of registration shall remain in force for twenty
years: Provided, That registrations under the provisions of this Act shall be cancelled by
the Director, unless within one year following the fifth, tenth and fifteenth anniversaries of
the date of issue of the certificate of registration, the registrant shall file in the Patent Office
an affidavit showing that the mark or trade-name is still in use or showing that its non-use
45

is due to special circumstance which excuse such non-use and is not due to any intention
to abandon the same, and pay the required fee.
The Director shall notify the registrant who files the above- prescribed affidavits of his
acceptance or refusal thereof and, if a refusal, the reasons therefor. (Emphasis and
underscoring supplied)
The aforementioned provision clearly reveals that failure to file the DAU within the requisite
period results in the automatic cancellation of registration of a trademark. In turn, such
failure is tantamount to the abandonment or withdrawal of any right or interest the
registrant has over his trademark.36
In this case, respondent admitted that it failed to file the 10th Year DAU for Registration
No. 56334 within the requisite period, or on or before October 21, 2004. As a consequence,
it was deemed to have abandoned or withdrawn any right or interest over the mark
"BIRKENSTOCK." Neither can it invoke Section 23637 of the IP Code which pertains to
intellectual property rights obtained under previous intellectual property laws, e.g., RA 166,
precisely because it already lost any right or interest over the said mark.
Besides, petitioner has duly established its true and lawful ownership of the mark
"BIRKENSTOCK."
Under Section 238 of RA 166, which is also the law governing the subject applications, in
order to register a trademark, one must be the owner thereof and must have actually used
the mark in commerce in the Philippines for two (2) months prior to the application for
registration. Section 2-A39 of the same law sets out to define how one goes about acquiring
ownership thereof. Under the same section, it is clear that actual use in commerce is also
the test of ownership but the provision went further by saying that the mark must not have
been so appropriated by another. Significantly, to be an owner, Section 2-A does not
require that the actual use of a trademark must be within the Philippines. Thus, under RA
166, one may be an owner of a mark due to its actual use but may not yet have the right
to register such ownership here due to the owners failure to use the same in the
Philippines for two (2) months prior to registration.40
It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring
ownership. If the applicant is not the owner of the trademark, he has no right to apply for
1wphi1
its registration. 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. Such presumption, just like the presumptive regularity in the performance of
official functions, is rebuttable and must give way to evidence to the contrary.41
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Clearly, it is not the application or registration of a trademark that vests ownership thereof,
but it is the ownership of a trademark that confers the right to register the same. A
trademark is an industrial property over which its owner is entitled to property rights which
cannot be appropriated by unscrupulous entities that, in one way or another, happen to
register such trademark ahead of its true and lawful owner. The presumption of ownership
accorded to a registrant must then necessarily yield to superior evidence of actual and real
ownership of a trademark.
The Courts pronouncement in Berris Agricultural Co., Inc. v. Abyadang42 is instructive on
this point:
The ownership of a trademark is acquired by its registration and its actual use by the
manufacturer or distributor of the goods made available to the purchasing public. x x x A
certificate of registration of a mark, once issued, constitutes prima facie evidence of the
validity of the registration, of the registrants ownership of the mark, and of the registrants
exclusive right to use the same in connection with the goods or services and those that
are related thereto specified in the certificate. x x x In other words, the prima facie
presumption brought about by the registration of a mark may be challenged and overcome
in an appropriate action, x x x by evidence of prior use by another person, i.e. , it will
controvert a claim of legal appropriation or of ownership based on registration by a
subsequent user. This is because a trademark is a creation of use and belongs to one who
first used it in trade or commerce.43(Emphasis and underscoring supplied)
In the instant case, petitioner was able to establish that it is the owner of the mark
"BIRKENSTOCK." It submitted evidence relating to the origin and history of
"BIRKENSTOCK" and its use in commerce long before respondent was able to register
the same here in the Philippines. It has sufficiently proven that "BIRKENSTOCK" was first
adopted in Europe in 1774 by its inventor, Johann Birkenstock, a shoemaker, on his line
of quality footwear and thereafter, numerous generations of his kin continuously engaged
in the manufacture and sale of shoes and sandals bearing the mark "BIRKENSTOCK" until
it became the entity now known as the petitioner. Petitioner also submitted various
certificates of registration of the mark "BIRKENSTOCK" in various countries and that it has
used such mark in different countries worldwide, including the Philippines.44
On the other hand, aside from Registration No. 56334 which had been cancelled,
respondent only presented copies of sales invoices and advertisements, which are not
conclusive evidence of its claim of ownership of the mark "BIRKENSTOCK" as these
merely show the transactions made by respondent involving the same.45
In view of the foregoing circumstances, the Court finds the petitioner to be the true and
lawful owner of the mark "BIRKENSTOCK" and entitled to its registration, and that
respondent was in bad faith in having it registered in its name. In this regard, the Court
quotes with approval the words of the IPO Director General, viz.:
46
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
The facts and evidence fail to show that [respondent] was in good faith in using and in
registering the mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a
highly distinct and arbitrary mark. It is very remote that two persons did coin the same or
identical marks. To come up with a highly distinct and uncommon mark previously
appropriated by another, for use in the same line of business, and without any plausible
explanation, is incredible. The field from which a person may select a trademark is
practically unlimited. As in all other cases of colorable imitations, the unanswered riddle is
why, of the millions of terms and combinations of letters and designs available,
[respondent] had to come up with a mark identical or so closely similar to the [petitioners]
if there was no intent to take advantage of the goodwill generated by the [petitioners] mark.
Being on the same line of business, it is highly probable that the [respondent] knew of the
existence of BIRKENSTOCK and its use by the [petitioner], before [respondent]
appropriated the same mark and had it registered in its name.46

WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and
Resolution dated October 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are
REVERSED and SET ASIDE. Accordingly, the Decision dated December 22, 2009 of the
IPO Director General is hereby REINSTATED.

SO ORDERED.

47
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
G.R. No. 185917 June 1, 2011 Harvard University, on the other hand, alleged that it is the lawful owner of the name and
FREDCO MANUFACTURING CORPORATION Petitioner, vs. PRESIDENT AND mark "Harvard" in numerous countries worldwide, including the Philippines. Among the
FELLOWS OF HARVARD COLLEGE (HARVARD UNIVERSITY), Respondents. countries where Harvard University has registered its name and mark "Harvard" are:

The Case 1. Argentina 26. South Korea

Before the Court is a petition for review1 assailing the 24 October 2008 Decision2 and 8
January 2009 Resolution3of the Court of Appeals in CA-G.R. SP No. 103394. 2. Benelux4 27. Malaysia

The Antecedent Facts 3. Brazil 28. Mexico

On 10 August 2005, petitioner Fredco Manufacturing Corporation (Fredco), a corporation 4. Canada 29. New Zealand
organized and existing under the laws of the Philippines, filed a Petition for Cancellation
of Registration No. 56561 before the Bureau of Legal Affairs of the Intellectual Property
Office (IPO) against respondents President and Fellows of Harvard College (Harvard 5. Chile 30. Norway
University), a corporation organized and existing under the laws of Massachusetts, United
States of America. The case was docketed as Inter Partes Case No. 14-2005-00094. 6. China P.R. 31. Peru

Fredco alleged that Registration No. 56561 was issued to Harvard University on 25
November 1993 for the mark "Harvard Veritas Shield Symbol" for decals, tote bags, 7. Colombia 32. Philippines
serving trays, sweatshirts, t-shirts, hats and flying discs under Classes 16, 18, 21, 25 and
28 of the Nice International Classification of Goods and Services. Fredco alleged that the 8. Costa Rica 33. Poland
mark "Harvard" for t-shirts, polo shirts, sandos, briefs, jackets and slacks was first used in
the Philippines on 2 January 1982 by New York Garments Manufacturing & Export Co.,
Inc. (New York Garments), a domestic corporation and Fredcos predecessor-in-interest. 9. Cyprus 34. Portugal
On 24 January 1985, New York Garments filed for trademark registration of the mark
"Harvard" for goods under Class 25. The application matured into a registration and a 10. Czech Republic 35. Russia
Certificate of Registration was issued on 12 December 1988, with a 20-year term subject
to renewal at the end of the term. The registration was later assigned to Romeo Chuateco,
a member of the family that owned New York Garments. 11. Denmark 36. South Africa

Fredco alleged that it was formed and registered with the Securities and Exchange 12. Ecuador 37. Switzerland
Commission on 9 November 1995 and had since then handled the manufacture, promotion
and marketing of "Harvard" clothing articles. Fredco alleged that at the time of issuance of
13. Egypt 38. Singapore
Registration No. 56561 to Harvard University, New York Garments had already registered
the mark "Harvard" for goods under Class 25. Fredco alleged that the registration was
cancelled on 30 July 1998 when New York Garments inadvertently failed to file an affidavit 14. Finland 39. Slovak Republic
of use/non-use on the fifth anniversary of the registration but the right to the mark "Harvard"
remained with its predecessor New York Garments and now with Fredco.
15. France 40. Spain

48
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
16. Great Britain 41. Sweden Harvard University alleged that its valid and existing certificates of trademark registration
in the Philippines are:

17. Germany 42. Taiwan 1. Trademark Registration No. 56561 issued on 25 November 1993 for "Harvard
Veritas Shield Design" for goods and services in Classes 16, 18, 21, 25 and 28
18. Greece 43. Thailand (decals, tote bags, serving trays, sweatshirts, t-shirts, hats and flying discs) of the
Nice International Classification of Goods and Services;
19. Hong Kong 44. Turkey
2. Trademark Registration No. 57526 issued on 24 March 1994 for "Harvard
Veritas Shield Symbol" for services in Class 41; Trademark Registration No. 56539
20. India 45. United Arab Emirates issued on 25 November 1998 for "Harvard" for services in Class 41; and

21. Indonesia 46. Uruguay 3. Trademark Registration No. 66677 issued on 8 December 1998 for "Harvard
Graphics" for goods in Class 9. Harvard University further alleged that it filed the
requisite affidavits of use for the mark "Harvard Veritas Shield Symbol" with the
22. Ireland 47. United States of America IPO.

23. Israel 48. Venezuela Further, on 7 May 2003 Harvard University filed Trademark Application No. 4-2003-04090
for "Harvard Medical International & Shield Design" for services in Classes 41 and 44. In
1989, Harvard University established the Harvard Trademark Licensing Program,
24. Italy 49. Zimbabwe operated by the Office for Technology and Trademark Licensing, to oversee and manage
the worldwide licensing of the "Harvard" name and trademarks for various goods and
25. Japan 50. European Community5 services. Harvard University stated that it never authorized or licensed any person to use
its name and mark "Harvard" in connection with any goods or services in the Philippines.

The name and mark "Harvard" was adopted in 1639 as the name of Harvard College 6 of
Cambridge, Massachusetts, U.S.A. The name and mark "Harvard" was allegedly used in
commerce as early as 1872. Harvard University is over 350 years old and is a highly
regarded institution of higher learning in the United States and throughout the world.
Harvard University promotes, uses, and advertises its name "Harvard" through various
publications, services, and products in foreign countries, including the Philippines. Harvard
University further alleged that the name and the mark have been rated as one of the most
famous brands in the world, valued between US $750,000,000 and US $1,000,000,000.
Harvard University alleged that in March 2002, it discovered, through its international
trademark watch program, Fredcos website www.harvard-usa.com. The website
advertises and promotes the brand name "Harvard Jeans USA" without Harvard
Universitys consent. The websites main page shows an oblong logo bearing the mark
"Harvard Jeans USA," "Established 1936," and "Cambridge, Massachusetts." On 20 April
2004, Harvard University filed an administrative complaint against Fredco before the IPO
for trademark infringement and/or unfair competition with damages. lawphi 1
In a Decision7 dated 22 December 2006, Director Estrellita Beltran-Abelardo of the Bureau
of Legal Affairs, IPO cancelled Harvard Universitys registration of the mark "Harvard"
under Class 25, as follows:
WHEREFORE, premises considered, the Petition for Cancellation is hereby GRANTED.
Consequently, Trademark Registration Number 56561 for the trademark "HARVARD VE
RI TAS SHIELD SYMBOL" issued on November 25, 1993 to PRESIDENT AND
FELLOWS OF HARVARD COLLEGE (HARVARD UNIVERSITY) should be CANCELLED
only with respect to goods falling under Class 25. On the other hand, considering that the
goods of Respondent-Registrant falling under Classes 16, 18, 21 and 28 are not
confusingly similar with the Petitioners goods, the Respondent-Registrant has acquired
vested right over the same and therefore, should not be cancelled.
Let the filewrapper of the Trademark Registration No. 56561 issued on November 25, 1993
for the trademark "HARVARD VE RI TAS SHIELD SYMBOL", subject matter of this case
together with a copy of this Decision be forwarded to the Bureau of Trademarks (BOT) for
appropriate action.

49

SO ORDERED. 8 marks "Harvard" and "Harvard Veritas Shield Symbol" in Class 25 way ahead of Fredco
Harvard University filed an appeal before the Office of the Director General of the IPO. In
a Decision9 dated 21 April 2008, the Office of the Director General, IPO reversed the
decision of the Bureau of Legal Affairs, IPO.
The Director General ruled that more than the use of the trademark in the Philippines, the
applicant must be the owner of the mark sought to be registered. The Director General
ruled that the right to register a trademark is based on ownership and when the applicant
is not the owner, he has no right to register the mark. The Director General noted that the
mark covered by Harvard Universitys Registration No. 56561 is not only the word
"Harvard" but also the logo, emblem or symbol of Harvard University. The Director General
ruled that Fredco failed to explain how its predecessor New York Garments came up with
the mark "Harvard." In addition, there was no evidence that Fredco or New York Garments
was licensed or authorized by Harvard University to use its name in commerce or for any
other use.
The dispositive portion of the decision of the Office of the Director General, IPO reads:
WHEREFORE, premises considered, the instant appeal is GRANTED. The appealed
decision is hereby REVERSED and SET ASIDE. Let a copy of this Decision as well as the
trademark application and records be furnished and returned to the Director of Bureau of
Legal Affairs for appropriate action. Further, let also the Directors of the Bureau of
Trademarks and the Administrative, Financial and Human Resources Development
Services Bureau, 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.10
Fredco filed a petition for review before the Court of Appeals assailing the decision of the
Director General.
The Decision of the Court of Appeals
In its assailed decision, the Court of Appeals affirmed the decision of the Office of the
Director General of the IPO.
The Court of Appeals adopted the findings of the Office of the Director General and ruled
that the latter correctly set aside the cancellation by the Director of the Bureau of Legal
Affairs of Harvard Universitys trademark registration under Class 25. The Court of Appeals
ruled that Harvard University was able to substantiate that it appropriated and used the
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
and its predecessor New York Garments. The Court of Appeals also ruled that the records
failed to disclose any explanation for Fredcos use of the name and mark "Harvard" and
the words "USA," "Established 1936," and "Cambridge, Massachusetts" within an oblong
device, "US Legend" and "Europes No. 1 Brand." Citing Shangri-La International Hotel
Management, Ltd. v. Developers Group of Companies, Inc.,11 the Court of Appeals ruled:
One who has imitated the trademark of another cannot bring an action for infringement,
particularly against the true owner of the mark, because he would be coming to court with
unclean hands. Priority is of no avail to the bad faith plaintiff. Good faith is required in order
to ensure that a second user may not merely take advantage of the goodwill established
by the true owner.12
The dispositive portion of the decision of the Court of Appeals reads:
WHEREFORE, premises considered, the petition for review is DENIED. The Decision
dated April 21, 2008 of the Director General of the IPO in Appeal No. 14-07-09 Inter Partes
Case No. 14-2005-00094 is hereby AFFIRMED.
SO ORDERED.13
Fredco filed a motion for reconsideration.
In its Resolution promulgated on 8 January 2009, the Court of Appeals denied the motion
for lack of merit.
Hence, this petition before the Court.
The Issue
The issue in this case is whether the Court of Appeals committed a reversible error in
affirming the decision of the Office of the Director General of the IPO.
The Ruling of this Court
The petition has no merit.
There is no dispute that the mark "Harvard" used by Fredco is the same as the mark
"Harvard" in the "Harvard Veritas Shield Symbol" of Harvard University. It is also not
disputed that Harvard University was named Harvard College in 1639 and that then, as
now, Harvard University is located in Cambridge, Massachusetts, U.S.A. It is also
unrefuted that Harvard University has been using the mark "Harvard" in commerce since
50

1872. It is also established that Harvard University has been using the marks "Harvard"
and "Harvard Veritas Shield Symbol" for Class 25 goods in the United States since 1953.
Further, there is no dispute that Harvard University has registered the name and mark
"Harvard" in at least 50 countries.
On the other hand, Fredcos predecessor-in-interest, New York Garments, started using
the mark "Harvard" in the Philippines only in 1982. New York Garments filed an application
with the Philippine Patent Office in 1985 to register the mark "Harvard," which application
was approved in 1988. Fredco insists that the date of actual use in the Philippines should
prevail on the issue of who has the better right to register the marks.
Under Section 2 of Republic Act No. 166,14 as amended (R.A. No. 166), before a trademark
can be registered, it must have been actually used in commerce for not less than two
months in the Philippines prior to the filing of an application for its registration. While
Harvard University had actual prior use of its marks abroad for a long time, it did not have
actual prior use in the Philippines of the mark "Harvard Veritas Shield Symbol" before its
application for registration of the mark "Harvard" with the then Philippine Patents Office.
However, Harvard Universitys registration of the name "Harvard" is based on home
registration which is allowed under Section 37 of R.A. No. 166.15 As pointed out by Harvard
University in its Comment:
Although Section 2 of the Trademark law (R.A. 166) requires for the registration of
trademark that the applicant thereof must prove that the same has been actually in use in
commerce or services for not less than two (2) months in the Philippines before the
application for registration is filed, where the trademark sought to be registered has already
been registered in a foreign country that is a member of the Paris Convention, the
requirement of proof of use in the commerce in the Philippines for the said period is not
necessary. An applicant for registration based on home certificate of registration need not
even have used the mark or trade name in this country.16
Indeed, in its Petition for Cancellation of Registration No. 56561, Fredco alleged that
Harvard Universitys registration "is based on home registration for the mark Harvard
Veritas Shield for Class 25."17
In any event, under Section 239.2 of Republic Act No. 8293 (R.A. No. 8293),18 "[m]arks
registered under Republic Act No. 166 shall remain in force but shall be deemed to have
been granted under this Act x x x," which does not require actual prior use of the mark
in the Philippines. Since the mark "Harvard Veritas Shield Symbol" is now deemed granted
under R.A. No. 8293, any alleged defect arising from the absence of actual prior use in the
Philippines has been cured by Section 239.2.19 In addition, Fredcos registration was
already cancelled on 30 July 1998 when it failed to file the required affidavit of use/non-
use for the fifth anniversary of the marks registration. Hence, at the time of Fredcos filing
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
of the Petition for Cancellation before the Bureau of Legal Affairs of the IPO, Fredco was
no longer the registrant or presumptive owner of the mark "Harvard."
There are two compelling reasons why Fredcos petition must fail.
First, Fredcos registration of the mark "Harvard" and its identification of origin as
"Cambridge, Massachusetts" falsely suggest that Fredco or its goods are connected with
Harvard University, which uses the same mark "Harvard" and is also located in Cambridge,
Massachusetts. This can easily be gleaned from the following oblong logo of Fredco that
it attaches to its clothing line:
Fredcos registration of the mark "Harvard" should not have been allowed because Section
4(a) of R.A. No. 166 prohibits the registration of a mark "which may disparage or falsely
suggest a connection with persons, living or dead, institutions, beliefs x x x." Section
4(a) of R.A. No. 166 provides:
Section 4. Registration of trade-marks, trade-names and service- marks on the principal
register. There is hereby established a register of trade-mark, trade-names and service-
marks which shall be known as the principal register. The owner of a trade-mark, a trade-
name or service-mark used to distinguish his goods, business or services from the goods,
business or services of others shall have the right to register the same on the principal
register, unless it:
(a) Consists of or comprises immoral, deceptive or scandalous manner, 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) x x x (emphasis supplied)
Fredcos use of the mark "Harvard," coupled with its claimed origin in Cambridge,
Massachusetts, obviously suggests a false connection with Harvard University. On this
ground alone, Fredcos registration of the mark "Harvard" should have been disallowed.
Indisputably, Fredco does not have any affiliation or connection with Harvard University,
or even with Cambridge, Massachusetts. Fredco or its predecessor New York Garments
was not established in 1936, or in the U.S.A. as indicated by Fredco in its oblong logo.
Fredco offered no explanation to the Court of Appeals or to the IPO why it used the mark
"Harvard" on its oblong logo with the words "Cambridge, Massachusetts," "Established in
1936," and "USA." Fredco now claims before this Court that it used these words "to evoke
a lifestyle or suggest a desirable aura of petitioners clothing lines." Fredcos belated
justification merely confirms that it sought to connect or associate its products with Harvard
51

University, riding on the prestige and popularity of Harvard University, and thus
appropriating part of Harvard Universitys goodwill without the latters consent.
Section 4(a) of R.A. No. 166 is identical to Section 2(a) of the Lanham Act,20 the trademark
law of the United States. These provisions are intended to protect the right of publicity of
famous individuals and institutions from commercial exploitation of their goodwill by
others.21 What Fredco has done in using the mark "Harvard" and the words "Cambridge,
Massachusetts," "USA" to evoke a "desirable aura" to its products is precisely to exploit
commercially the goodwill of Harvard University without the latters consent. This is a clear
violation of Section 4(a) of R.A. No. 166. Under Section 17(c)22 of R.A. No. 166, such
violation is a ground for cancellation of Fredcos registration of the mark "Harvard" because
the registration was obtained in violation of Section 4 of R.A. No. 166.
Second, the Philippines and the United States of America are both signatories to the Paris
Convention for the Protection of Industrial Property (Paris Convention). The Philippines
became a signatory to the Paris Convention on 27 September 1965. Articles 6bis and 8 of
the Paris Convention state:
ARTICLE 6bis
(i) The countries of the Union undertake either administratively if their legislation so
permits, or at the request of an interested party, to refuse or to cancel the registration and
to prohibit the use of a trademark which constitutes a reproduction, imitation or translation,
liable to create confusion or a mark considered by the competent authority of the country
as being already the mark of a person entitled to the benefits of the present
Convention and used for identical or similar goods. These provisions shall also
apply when the essential part of the mark constitutes a reproduction of any such
well-known mark or an imitation liable to create confusion therewith.
ARTICLE 8
A trade name shall be protected in all the countries of the Union without the obligation
of filing or registration, whether or not it forms part of a trademark. (Emphasis supplied)
Thus, this Court has ruled that the Philippines is obligated to assure nationals of countries
of the Paris Convention that they are afforded an effective protection against violation of
their intellectual property rights in the Philippines in the same way that their own countries
are obligated to accord similar protection to Philippine nationals.23
Article 8 of the Paris Convention has been incorporated in Section 37 of R.A. No. 166, as
follows:
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Section 37. Rights of foreign registrants. Persons who are nationals of, domiciled in, or
have a bona fide or effective business or commercial establishment in any foreign country,
which is a party to any international convention or treaty relating to marks or trade-names,
or the repression of unfair competition to which the Philippines may be a party, shall be
entitled to the benefits and subject to the provisions of this Act to the extent and under the
conditions essential to give effect to any such convention and treaties so long as the
Philippines shall continue to be a party thereto, except as provided in the following
paragraphs of this section.
xxxx
Trade-names of persons described in the first paragraph of this section shall be
protected without the obligation of filing or registration whether or not they form
parts of marks.24
x x x x (Emphasis supplied)
Thus, under Philippine law, a trade name of a national of a State that is a party to the Paris
Convention, whether or not the trade name forms part of a trademark, is protected "without
the obligation of filing or registration."
"Harvard" is the trade name of the world famous Harvard University, and it is also a
trademark of Harvard University. Under Article 8 of the Paris Convention, as well as
Section 37 of R.A. No. 166, Harvard University is entitled to protection in the Philippines
of its trade name "Harvard" even without registration of such trade name in the Philippines.
This means that no educational entity in the Philippines can use the trade name "Harvard"
without the consent of Harvard University. Likewise, no entity in the Philippines can claim,
expressly or impliedly through the use of the name and mark "Harvard," that its products
or services are authorized, approved, or licensed by, or sourced from, Harvard University
without the latters consent.
Article 6bis of the Paris Convention has been administratively implemented in the
Philippines through two directives of the then Ministry (now Department) of Trade, which
directives were upheld by this Court in several cases.25 On 20 November 1980, then
Minister of Trade Secretary Luis Villafuerte issued a Memorandum directing the Director
of Patents to reject, pursuant to the Paris Convention, all pending applications for
Philippine registration of signature and other world-famous trademarks by applicants other
than their original owners.26 The Memorandum states:
Pursuant to the Paris Convention for the Protection of Industrial Property to which the
Philippines is a signatory, you are hereby directed to reject all pending applications for
52

Philippine registration of signature and other world-famous trademarks by applicants other
than its original owners or users.
The conflicting claims over internationally known trademarks involve such name brands
as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar
de la Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted
Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such
trademarks should be asked to surrender their certificates of registration, if any, to avoid
suits for damages and other legal action by the trademarks foreign or local owners or
original users.
You are also required to submit to the undersigned a progress report on the matter.
For immediate compliance.27
In a Memorandum dated 25 October 1983, then Minister of Trade and Industry Roberto
Ongpin affirmed the earlier Memorandum of Minister Villafuerte. Minister Ongpin directed
the Director of Patents to implement measures necessary to comply with the Philippines
obligations under the Paris Convention, thus:
1. Whether the trademark under consideration is well-known in the Philippines or
is a mark already belonging to a person entitled to the benefits of the
CONVENTION, this should be established, pursuant to Philippine Patent Office
procedures in inter partes and ex parte cases, according to any of the following
criteria or any combination thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark
being considered is already well-known in the Philippines such that
permission for its use by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by
proof that goods bearing the trademark are sold on an international scale,
advertisements, the establishment of factories, sales offices,
distributorships, and the like, in different countries, including volume or
other measure of international trade and commerce;
(c) that the trademark is duly registered in the industrial property
office(s) of another country or countries, taking into consideration
the dates of such registration;
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
(d) that the trademark has been long established and obtained goodwill
and general international consumer recognition as belonging to one owner
or source;
(e) that the trademark actually belongs to a party claiming ownership and
has the right to registration under the provisions of the aforestated PARIS
CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include
tradenames, service marks, logos, signs, emblems, insignia or other similar
devices used for identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel the
registration of, trademarks which constitute a reproduction, translation or imitation
of a trademark owned by a person, natural or corporate, who is a citizen of a
country signatory to the PARIS CONVENTION FOR THE PROTECTION OF
INDUSTRIAL PROPERTY.
x x x x28 (Emphasis supplied)
In Mirpuri, the Court ruled that the essential requirement under Article 6bis of the Paris
Convention is that the trademark to be protected must be "well-known" in the country
where protection is sought.29 The Court declared that the power to determine whether a
trademark is well-known lies in the competent authority of the country of registration or
use.30 The Court then stated that the competent authority would either be the registering
authority if it has the power to decide this, or the courts of the country in question if the
issue comes before the courts.31
To be protected under the two directives of the Ministry of Trade, an internationally well-
known mark need not be registered or used in the Philippines.32 All that is required is that
the mark is well-known internationally and in the Philippines for identical or similar goods,
whether or not the mark is registered or used in the Philippines. The Court ruled
in Sehwani, Incorporated v. In-N-Out Burger, Inc.:33
The fact that respondents marks are neither registered nor used in the Philippines
is of no moment. The scope of protection initially afforded by Article 6bis of the Paris
Convention has been expanded in the 1999 Joint Recommendation Concerning
Provisions on the Protection of Well-Known Marks, wherein the World Intellectual Property
Organization (WIPO) General Assembly and the Paris Union agreed to a nonbinding
recommendation that a well-known mark should be protected in a country even if the
mark is neither registered nor used in that country. Part I, Article 2(3) thereof provides:
53

(3) [Factors Which Shall Not Be Required] (a) A Member State shall not require, as a
condition for determining whether a mark is a well-known mark:
(i) that the mark has been used in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, the
Member State:
(ii) that the mark is well known in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, any
jurisdiction other than the Member State; or
(iii) that the mark is well known by the public at large in the Member State.34 (Italics
in the original decision; boldface supplied)
Indeed, Section 123.1(e) of R.A. No. 8293 now categorically states that "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," cannot be
registered by another in the Philippines. Section 123.1(e) does not require that the well-
known mark be used in commerce in the Philippines but only that it be well-known in the
Philippines. Moreover, Rule 102 of the Rules and Regulations on Trademarks, Service
Marks, Trade Names and Marked or Stamped Containers, which implement R.A. No.
8293, provides:
Rule 102. Criteria for determining whether a mark is well-known. In determining whether a
mark is well-known, the following criteria or any combination thereof may be taken into
account:
(a) the duration, extent and geographical area of any use of the mark, in particular,
the duration, extent and geographical area of any promotion of the mark, including
advertising or publicity and the presentation, at fairs or exhibitions, of the goods
and/or services to which the mark applies;
(b) the market share, in the Philippines and in other countries, of the goods and/or
services to which the mark applies;
(c) the degree of the inherent or acquired distinction of the mark;
(d) the quality-image or reputation acquired by the mark;
(e) the extent to which the mark has been registered in the world;
(f) the exclusivity of registration attained by the mark in the world;
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
(g) the extent to which the mark has been used in the world;
(h) the exclusivity of use attained by the mark in the world;
(i) the commercial value attributed to the mark in the world;
(j) the record of successful protection of the rights in the mark;
(k) the outcome of litigations dealing with the issue of whether the mark is a well-
known mark; and
(l) the presence or absence of identical or similar marks validly registered for or
used on identical or similar goods or services and owned by persons other than
the person claiming that his mark is a well-known mark. (Emphasis supplied)
Since "any combination" of the foregoing criteria is sufficient to determine that a mark is
well-known, it is clearly not necessary that the mark be used in commerce in the
Philippines. Thus, while under the territoriality principle a mark must be used in commerce
in the Philippines to be entitled to protection, internationally well-known marks are the
exceptions to this rule.
In the assailed Decision of the Office of the Director General dated 21 April 2008, the
Director General found that:
Traced to its roots or origin, HARVARD is not an ordinary word. It refers to no other than
Harvard University, a recognized and respected institution of higher learning located in
Cambridge, Massachusetts, U.S.A. Initially referred to simply as "the new college," the
institution was named "Harvard College" on 13 March 1639, after its first principal donor,
a young clergyman named John Harvard. A graduate of Emmanuel College, Cambridge
in England, John Harvard bequeathed about four hundred books in his will to form the
basis of the college library collection, along with half his personal wealth worth several
hundred pounds. The earliest known official reference to Harvard as a "university" rather
than "college" occurred in the new Massachusetts Constitution of 1780.
Records also show that the first use of the name HARVARD was in 1638 for educational
services, policy courses of instructions and training at the university level. It has a Charter.
Its first commercial use of the name or mark HARVARD for Class 25 was on 31 December
1953 covered by UPTON Reg. No. 2,119,339 and 2,101,295. Assuming in arguendo, that
the Appellate may have used the mark HARVARD in the Philippines ahead of the
Appellant, it still cannot be denied that the Appellants use thereof was decades, even
centuries, ahead of the Appellees. More importantly, the name HARVARD was the name
of a person whose deeds were considered to be a cornerstone of the university. The
54

Appellants logos, emblems or symbols are owned by Harvard University. The name
HARVARD and the logos, emblems or symbols are endemic and cannot be separated
from the institution.35
Finally, in its assailed Decision, the Court of Appeals ruled:
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
WHEREFORE, we DENY the petition. We AFFIRM the 24 October 2008 Decision and 8
January 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 103394.
SO ORDERED.

Records show that Harvard University is the oldest and one of the foremost educational
institutions in the United States, it being established in 1636. It is located primarily in
Cambridge, Massachusetts and was named after John Harvard, a puritan minister who left
to the college his books and half of his estate.

The mark "Harvard College" was first used in commerce in the United States in 1638 for
educational services, specifically, providing courses of instruction and training at the
university level (Class 41). Its application for registration with the United States Patent and
Trademark Office was filed on September 20, 2000 and it was registered on October 16,
2001. The marks "Harvard" and "Harvard Ve ri tas Shield Symbol" were first used in
commerce in the the United States on December 31, 1953 for athletic uniforms, boxer
shorts, briefs, caps, coats, leather coats, sports coats, gym shorts, infant jackets, leather
jackets, night shirts, shirts, socks, sweat pants, sweatshirts, sweaters and underwear
(Class 25). The applications for registration with the USPTO were filed on September 9,
1996, the mark "Harvard" was registered on December 9, 1997 and the mark "Harvard Ve
ri tas Shield Symbol" was registered on September 30, 1997.36

We also note that in a Decision37 dated 18 December 2008 involving a separate case
between Harvard University and Streetward International, Inc.,38 the Bureau of Legal
Affairs of the IPO ruled that the mark "Harvard" is a "well-known mark." This Decision,
which cites among others the numerous trademark registrations of Harvard University in
various countries, has become final and executory.

There is no question then, and this Court so declares, that "Harvard" is a well-known name
and mark not only in the United States but also internationally, including the Philippines.
The mark "Harvard" is rated as one of the most famous marks in the world. It has been
registered in at least 50 countries. It has been used and promoted extensively in numerous
publications worldwide. It has established a considerable goodwill worldwide since the
founding of Harvard University more than 350 years ago. It is easily recognizable as the
trade name and mark of Harvard University of Cambridge, Massachusetts, U.S.A.,
internationally known as one of the leading educational institutions in the world. As such,
even before Harvard University applied for registration of the mark "Harvard" in the
Philippines, the mark was already protected under Article 6bis and Article 8 of the Paris
Convention. Again, even without applying the Paris Convention, Harvard University can
invoke Section 4(a) of R.A. No. 166 which prohibits the registration of a mark "which may
disparage or falsely suggest a connection with persons, living or dead, institutions,
beliefs x x x."
55

G.R. No. L-29971 August 31, 1982
ESSO STANDARD EASTERN, INC., petitioner, vs.THE HONORABLE COURT OF
APPEALS ** and UNITED CIGARETTE CORPORATION, respondents.
The Court affirms on the basis of controlling doctrine the appealed decision of the Court of
Appeals reversing that of the Court of First Instance of Manila and dismissing the complaint
filed by herein petitioner against private respondent for trade infringement for using
petitioner's trademark ESSO, since it clearly appears that the goods on which the
trademark ESSO is used by respondent is non-competing and entirely unrelated to the
products of petitioner so that there is no likelihood of confusion or deception on the part of
the purchasing public as to the origin or source of the goods.
Petitioner Esso Standard Eastern, Inc., 1 then a foreign corporation duly licensed to do
business in the Philippines, is engaged in the sale of petroleum products which are Identified
with its trademark ESSO (which as successor of the defunct Standard Vacuum Oil Co. it
registered as a business name with the Bureaus of Commerce and Internal Revenue in April
and May, 1962). Private respondent in turn is a domestic corporation then engaged in the
manufacture and sale of cigarettes, after it acquired in November, 1963 the business, factory
and patent rights of its predecessor La Oriental Tobacco Corporation, one of the rights thus
acquired having been the use of the trademark ESSO on its cigarettes, for which a permit had
been duly granted by the Bureau of Internal Revenue.
Barely had respondent as such successor started manufacturing cigarettes with the
trademark ESSO, when petitioner commenced a case for trademark infringement in the
Court of First Instance of Manila. The complaint alleged that the petitioner had been for
many years engaged in the sale of petroleum products and its trademark ESSO had
acquired a considerable goodwill to such an extent that the buying public had always taken
the trademark ESSO as equivalent to high quality petroleum products. Petitioner asserted
that the continued use by private respondent of the same trademark ESSO on its cigarettes
was being carried out for the purpose of deceiving the public as to its quality and origin to
the detriment and disadvantage of its own products.
In its answer, respondent admitted that it used the trademark ESSO on its own product of
cigarettes, which was not Identical to those produced and sold by petitioner and therefore
did not in any way infringe on or imitate petitioner's trademark. Respondent contended that
in order that there may be trademark infringement, it is indispensable that the mark must
be used by one person in connection or competition with goods of the same kind as the
complainant's.
The trial court, relying on the old cases of Ang vs. Teodoro 2 and Arce & Sons, Inc. vs.
Selecta Biscuit Company, 3referring to related products, decided in favor of petitioner and ruled
that respondent was guilty of infringement of trademark.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
On appeal, respondent Court of Appeals found that there was no trademark infringement
and dismissed the complaint. Reconsideration of the decision having been denied,
petitioner appealed to this Court by way of certiorari to reverse the decision of the Court of
Appeals and to reinstate the decision of the Court of First Instance of Manila. The Court
finds no ground for granting the petition.
The law defines infringement as the use without consent of the trademark owner of any
"reproduction, counterfeit, copy or colorable limitation of any registered mark or tradename
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 tradename and apply such reproduction, counterfeit, copy or colorable limitation
to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business or services." 4 Implicit in this
definition is the concept that the goods must be so related that there is a likelihood either of
confusion of goods or business. 5But likelihood of confusion is a relative concept; to be
determined only according to the particular, and sometimes peculiar, circumstances of each
case. 6 It is unquestionably true that, as stated in Coburn vs. Puritan Mills, Inc. 7 "In trademark
cases, even more than in other litigation, precedent must be studied in the light of the facts of
the particular case.
It is undisputed that the goods on which petitioner uses the trademark ESSO, petroleum
products, and the product of respondent, cigarettes, are non-competing. But as to whether
trademark infringement exists depends for the most part upon whether or not the goods
are so related that the public may be, or is actually, deceived and misled that they came
from the same maker or manufacturer. For non-competing goods may be those which,
though they are not in actual competition, are so related to each other that it might
reasonably be assumed that they originate from one manufacturer. Non-competing goods
may also be those which, being entirely unrelated, could not reasonably be assumed to
have a common source. in the former case of related goods, confusion of business could
arise out of the use of similar marks; in the latter case of non-related goods, it could
not. 8 The vast majority of courts today follow the modern theory or concept of "related
goods" 9 which the Court has likewise adopted and uniformly recognized and applied. 10
Goods are related when they belong to the same class or have the same descriptive
properties; when they possess the same physical attributes or essential characteristics
with reference to their form, composition, texture or quality. They may also be related
because they serve the same purpose or are sold in grocery stores. 11 Thus, biscuits were
held related to milk because they are both food products. 12 Soap and perfume, lipstick and nail
polish are similarly related because they are common household items now a days. 13 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. 14 Soap and pomade although non-
competitive, were held to be similar or to belong to the same class, since both are toilet
56

15
articles. But no confusion or deception can possibly result or arise when the name
"Wellington" which is the trademark for shirts, pants, drawers and other articles of wear for
men, women and children is used as a name of a department store. 16
Thus, in Acoje Mining Co., Inc. vs. Director of Patents, 17 the Court, through now Chief Justice
Fernando, reversed the patent director's decision on the question of "May petitioner Acoje
Mining Company register for the purpose of advertising its product, soy sauce, the trademark
LOTUS, there being already in existence one such registered in favor of the Philippine Refining
Company for its product, edible oil, it being further shown that the trademark applied for is in
smaller type, colored differently, set on a background which is dissimilar as to yield a distinct
appearance?" and ordered the granting of petitioner's application for registration ruling that
"there is quite a difference between soy sauce and edible oil. If one is in the market for the
former, he is not likely to purchase the latter just because of the trademark LOTUS" and "when
regard is had for the principle that the two trademarks in their entirety as they appear in their
respective labels should be considered in relation to the goods advertised before registration
could be denied, the conclusion is inescapable that respondent Director ought to have reached
a different conclusion. "
By the same token, in the recent case of Philippine Refining Co., Inc. vs. Ng Sam and
Director of Patents, 18 the Court upheld the patent director's registration of the same trademark
CAMIA for therein respondent's product of ham notwithstanding its already being used by
therein petitioner for a wide range of products: lard butter, cooking oil, abrasive detergents,
polishing materials and soap of all kinds. The Court, after noting that the same CAMIA
trademark had been registered by two other companies, Everbright Development Company
and F. E. Zuellig, Inc. for their respective products of thread and yarn (for the former) and
textiles, embroideries and laces (for the latter) ruled that "while ham and some of the products
of petitioner are classified under Class 47 (Foods and Ingredients of Food), this alone cannot
serve as the decisive factor in the resolution of whether or not they are related goods. 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 Court, therefore, concluded that
"In fine, We hold that the businesses of the parties are non-competitive and their products
so unrelated that the use of Identical trademarks is not likely to give rise to confusion, much
less cause damage to petitioner."
In the situation before us, the goods are obviously different from each other with
"absolutely no iota of similitude" 19as stressed in respondent court's judgment. They are so
foreign to each other as to make it unlikely that purchasers would think that petitioner is the
manufacturer of respondent's goods. The mere fact that one person has adopted and used a
t@lF
trademark on his goods does not prevent the adoption and use of the same trademark by
others on unrelated articles of a different kind. 20
Petitioner uses the trademark ESSO and holds certificate of registration of the trademark
for petroleum products, including aviation gasoline, grease, cigarette lighter fluid and other
various products such as plastics, chemicals, synthetics, gasoline solvents, kerosene,
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
automotive and industrial fuel, bunker fuel, lubricating oil, fertilizers, gas, alcohol,
insecticides and the ESSO Gasul" burner, while respondent's business is solely for the
manufacture and sale of the unrelated product of cigarettes. The public knows too well that
petitioner deals solely with petroleum products that there is no possibility that cigarettes
with ESSO brand will be associated with whatever good name petitioner's ESSO
trademark may have generated. Although petitioner's products are numerous, they are of
the same class or line of merchandise which are non-competing with respondent's product
of cigarettes, which as pointed out in the appealed judgment is beyond petitioner's "zone
of potential or natural and logical expansion" 21When a trademark is used by a party for a
product in which the other party does not deal, the use of the same trademark on the latter's
product cannot be validly objected to. 22
Another factor that shows that the goods involved are non-competitive and non-related is
the appellate court's finding that they flow through different channels of trade, thus: "The
products of each party move along and are disposed through different channels of
distribution. The (petitioner's) products are distributed principally through gasoline service
and lubrication stations, automotive shops and hardware stores. On the other hand, the
(respondent's) cigarettes are sold in sari-sari stores, grocery stores, and other small
distributor outlets. (Respondent's) cigarettes are even peddled in the streets while
(petitioner's) 'gasul' burners are not. Finally, there is a marked distinction between oil and
tobacco, as well as between petroleum and cigarettes. Evidently, in kind and nature the
products of (respondent) and of (petitioner) are poles apart." 23
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
court's 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 plaintiff's 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 appellant's cigarette.
The only color that the appellant uses in its trademark is green." 24
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."
In point of fact and time, the Court's dismissal of the petition at bar was presaged by its
Resolution of May 21, 1979 dismissing by minute resolution the petition for review for lack
of merit in the Identical case of Shell Company of the Philippines, Ltd vs. Court of
57
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Appeals , wherein the Court thereby affirmed the patent office's registration of the trademark
25

SHELL as used in the cigarettes manufactured by therein respondent Fortune Tobacco

Corporation notwithstanding the therein petitioner Shell Company's opposition thereto as the
prior registrant of the same trademark for its gasoline and other petroleum trademarks, on the
strength of the controlling authority of Acoje Mining Co. vs. Director of Patents, Supra, and the
same rationale that "(I)n the Philippines, where buyers of appellee's (Fortune Corp.'s)
cigarettes, which are low cost articles, can be more numerous compared to buyers of the higher
priced petroleum and chemical products of appellant (Shell Co.) and where appellant (Shell) is
known to be in the business of selling petroleum and petroleum-based chemical products, and
no others, it is difficult to conceive of confusion in the minds of the buying public in the sense it
can be thought that appellant (Shell) is the manufacturer of appellee's (Fortune's) cigarettes,
or that appellee (Fortune) is the manufacturer or processor of appellant's (Shell's) petroleum
and chemical products." 26

ACCORDINGLY, the petition is dismissed and the decision of respondent Court of Appeals
is hereby affirmed.

58

G.R. No. 120900 July 20, 2000
CANON KABUSHIKI KAISHA, petitioner, vs. COURT OF APPEALS and NSR
RUBBER CORPORATION, respondents.
Before us is a petition for review that seeks to set aside the Decision 1 dated February 21,
1995 of the Court of Appeals in CA-GR SP No. 30203, entitled "Canon Kabushiki Kaisha
vs. NSR Rubber Corporation" and its Resolution dated June 27, 1995 denying the motion
for reconsideration of herein petitioner Canon Kabushiki Kaisha (petitioner).
On January 15, 1985, private respondent NSR Rubber Corporation (private respondent)
filed an application for registration of the mark CANON for sandals in the Bureau of
Patents, Trademarks, and Technology Transfer (BPTTT). A Verified Notice of Opposition
was filed by petitioner, a foreign corporation duly organized and existing under the laws of
Japan, alleging that it will be damaged by the registration of the trademark CANON in the
name of private respondent. The case was docketed as Inter Partes Case No. 3043.
Petitioner moved to declare private respondent in default for its failure to file its answer
within the prescribed period. The BPTTT then declared private respondent in default and
allowed petitioner to present its evidence ex-parte.
Based on the records, the evidence presented by petitioner consisted of its certificates of
registration for the mark CANON in various countries covering goods belonging to class 2
(paints, chemical products, toner, and dye stuff). Petitioner also submitted in evidence its
Philippine Trademark Registration No. 39398, showing its ownership over the trademark
CANON also under class 2.
On November 10, 1992, the BPTTT issued its decision dismissing the opposition of
petitioner and giving due course to private respondent's application for the registration of
the trademark CANON. On February 16, 1993, petitioner appealed the decision of the
BPTTT with public respondent Court of Appeals that eventually affirmed the decision of
BPTTT. Hence, this petition for review.
Petitioner anchors this instant petition on these grounds:
A) PETITIONER IS ENTITLED TO EXCLUSIVE USE OF THE MARK CANON
BECAUSE IT IS ITS TRADEMARK AND IS USED ALSO FOR FOOTWEAR.
B) TO ALLOW PRIVATE RESPONDENT TO REGISTER CANON FOR
FOOTWEAR IS TO PREVENT PETITIONER FROM USING CANON FOR
VARIOUS KINDS OF FOOTWEAR, WHEN IN FACT, PETITIONER HAS
EARLIER USED SAID MARK FOR SAID GOODS.
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
C) PETITIONER IS ALSO ENTITLED TO THE RIGHT TO EXCLUSIVELY USE
CANON TO PREVENT CONFUSION OF BUSINESS.
D) PETITIONER IS ALSO ENTITLED TO THE EXCLUSIVE USE OF CANON
BECAUSE IT FORMS PART OF ITS CORPORATE NAME, PROTECTED BY THE
PARIS CONVENTION.2
The BPTTT and the Court of Appeals share the opinion that the trademark "CANON" as
used by petitioner for its paints, chemical products, toner, and dyestuff, can be used by
private respondent for its sandals because the products of these two parties are dissimilar.
Petitioner protests the appropriation of the mark CANON by private respondent on the
ground that petitioner has used and continues to use the trademark CANON on its wide
range of goods worldwide. Allegedly, the corporate name or tradename of petitioner is also
used as its trademark on diverse goods including footwear and other related products like
shoe polisher and polishing agents. To lend credence to its claim, petitioner points out that
it has branched out in its business based on the various goods carrying its trademark
CANON3 , including footwear which petitioner contends covers sandals, the goods for
which private respondent sought to register the mark CANON. For petitioner, the fact alone
that its trademark CANON is carried by its other products like footwear, shoe polisher and
polishing agents should have precluded the BPTTT from giving due course to the
application of private respondent.
We find the arguments of petitioner to be unmeritorious. Ordinarily, the ownership of a
trademark or tradename is a property right that the owner is entitled to protect4 as
mandated by the Trademark Law.5 However, when a trademark is used by a party for a
product in which the other party does not deal, the use of the same trademark on the
latter's product cannot be validly objected to.6
A review of the records shows that with the order of the BPTTT declaring private
respondent in default for failure to file its answer, petitioner had every opportunity to
present ex-parte all of its evidence to prove that its certificates of registration for the
trademark CANON cover footwear. The certificates of registration for the trademark
CANON in other countries and in the Philippines as presented by petitioner, clearly showed
that said certificates of registration cover goods belonging to class 2 (paints, chemical
products, toner, dyestuff). On this basis, the BPTTT correctly ruled that since the certificate
of registration of petitioner for the trademark CANON covers class 2 (paints, chemical
products, toner, dyestuff), private respondent can use the trademark CANON for its goods
classified as class 25 (sandals). Clearly, there is a world of difference between the paints,
chemical products, toner, and dyestuff of petitioner and the sandals of private respondent.
Petitioner counters that notwithstanding the dissimilarity of the products of the parties, the
trademark owner is entitled to protection when the use of by the junior user "forestalls the
normal expansion of his business".7Petitioner's opposition to the registration of its
59

trademark CANON by private respondent rests upon petitioner's insistence that it would
be precluded from using the mark CANON for various kinds of footwear, when in fact it
has earlier used said mark for said goods. Stretching this argument, petitioner claims that
it is possible that the public could presume that petitioner would also produce a wide variety
of footwear considering the diversity of its products marketed worldwide.
We do not agree. Even in this instant petition, except for its bare assertions, petitioner
failed to attach evidence that would convince this Court that petitioner has also embarked
in the production of footwear products. We quote with approval the observation of the Court
of Appeals that:
"The herein petitioner has not made known that it intends to venture into the
business of producing sandals. This is clearly shown in its Trademark Principal
Register (Exhibit "U") where the products of the said petitioner had been clearly
and specifically described as "Chemical products, dyestuffs, pigments, toner
developing preparation, shoe polisher, polishing agent". It would be taxing one's
credibility to aver at this point that the production of sandals could be considered
as a possible "natural or normal expansion" of its business operation".8
In Faberge, Incorporated vs. Intermediate Appellate Court,9 the Director of patents allowed
the junior user to use the trademark of the senior user on the ground that the briefs
manufactured by the junior user, the product for which the trademark BRUTE was sought
to be registered, was unrelated and non-competing with the products of the senior user
consisting of after shave lotion, shaving cream, deodorant, talcum powder, and toilet soap.
The senior user vehemently objected and claimed that it was expanding its trademark to
briefs and argued that permitting the junior user to register the same trademark would
allow the latter to invade the senior user's exclusive domain. In sustaining the Director of
Patents, this Court said that since "(the senior user) has not ventured in the production of
briefs, an item which is not listed in its certificate of registration, (the senior user), cannot
and should not be allowed to feign that (the junior user) had invaded (the senior user's)
exclusive domain."10 We reiterated the principle that the certificate of registration confers
upon the trademark owner the exclusive right to use its own symbol only to those goods
specified in the certificate, subject to the conditions and limitations stated therein.11 Thus,
the exclusive right of petitioner in this case to use the trademark CANON is limited to the
products covered by its certificate of registration.
Petitioner further argues that the alleged diversity of its products all over the world makes
it plausible that the public might be misled into thinking that there is some supposed
connection between private respondent's goods and petitioner. Petitioner is apprehensive
that there could be confusion as to the origin of the goods, as well as confusion of business,
if private respondent is allowed to register the mark CANON. In such a case, petitioner
would allegedly be immensely prejudiced if private respondent would be permitted to take
"a free ride on, and reap the advantages of, the goodwill and reputation of petitioner
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Canon". In support of the foregoing arguments, petitioner invokes the rulings in Sta. Ana
12
vs. Maliwat13 , Ang vs. Teodoro14 and Converse Rubber Corporation vs. Universal Rubber
Products, Inc.15 .
The likelihood of confusion of goods or business is a relative concept, to be determined
only according to the particular, and sometimes peculiar, circumstances of each
case.16 Indeed, in trademark law cases, even more than in other litigation, precedent must
be studied in the light of the facts of the particular case.17 Contrary to petitioner's
supposition, the facts of this case will show that the cases of Sta. Ana vs. Maliwat,, Ang
vs. Teodoro and Converse Rubber Corporation vs. Universal Rubber Products, Inc. are
hardly in point. The just cited cases involved goods that were confusingly similar, if not
identical, as in the case of Converse Rubber Corporation vs. Universal Rubber Products,
Inc. Here, the products involved are so unrelated that the public will not be misled that
there is the slightest nexus between petitioner and the goods of private respondent.
In cases of confusion of business or origin, the question that usually arises is whether the
respective goods or services of the senior user and the junior user are so related as to
likely cause confusion of business or origin, and thereby render the trademark or
tradenames confusingly similar.18 Goods are related when they belong to the same class
or have the same descriptive properties; when they possess the same physical attributes
or essential characteristics with reference to their form, composition, texture or
quality.19 They may also be related because they serve the same purpose or are sold in
grocery stores.20
Thus, in Esso Standard Eastern, Inc. vs. Court of Appeals, this Court ruled that the
petroleum products on which the petitioner therein used the trademark ESSO, and the
product of respondent, cigarettes are "so foreign to each other as to make it unlikely that
purchasers would think that petitioner is the manufacturer of respondent's goods"21 .
Moreover, the fact that the goods involved therein flow through different channels of trade
highlighted their dissimilarity, a factor explained in this wise:
"The products of each party move along and are disposed through different
channels of distribution. The (petitioner's) products are distributed principally
through gasoline service and lubrication stations, automotive shops and hardware
stores. On the other hand, the (respondent's) cigarettes are sold in sari-sari stores,
grocery store, and other small distributor outlets. (Respondnet's) cigarettes are
even peddled in the streets while (petitioner's) 'gasul' burners are not. Finally, there
is a marked distinction between oil and tobacco, as well as between petroleum and
cigarettes. Evidently, in kind and nature the products of (respondent) and of
(petitioner) are poles apart."22
Undoubtedly, the paints, chemical products, toner and dyestuff of petitioner that carry the
trademark CANON are unrelated to sandals, the product of private respondent. We agree
60

with the BPTTT, following the Esso doctrine, when it noted that the two classes of products
in this case flow through different trade channels. The products of petitioner are sold
through special chemical stores or distributors while the products of private respondent
are sold in grocery stores, sari-sari stores and department stores.23 Thus, the evident
disparity of the products of the parties in the case at bar renders unfounded the
apprehension of petitioner that confusion of business or origin might occur if private
respondent is allowed to use the mark CANON.
In its bid to bar the registration of private respondent of the mark CANON, petitioner
invokes the protective mantle of the Paris Convention. Petitioner asserts that it has the
exclusive right to the mark CANON because it forms part of its corporate name or
tradename, protected by Article 8 of the Paris Convention, to wit:
"A tradename shall be protected in all the countries of the Union without the
obligation of filing or registration, whether or not it forms part of a trademark."
Public respondents BPTTT and the Court of Appeals allegedly committed an oversight
when they required petitioner to prove that its mark is a well-known mark at the time the
application of private respondent was filed. Petitioner questions the applicability of the
guidelines embodied in the Memorandum of then Minister of Trade and Industry Roberto
Ongpin (Ongpin) dated October 25, 1983 which according to petitioner implements Article
6bis of the Paris Convention, the provision referring to the protection of trademarks. The
memorandum reads:
"a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or anything
else;
c) the mark must be for use in the same or similar class of goods;
d) the person claiming must be the owner of the mark."
According to petitioner, it should not be required to prove that its trademark is well-known
and that the products are not similar as required by the quoted memorandum. Petitioner
emphasizes that the guidelines in the memorandum of Ongpin implement Article 6bis of
the Paris Convention, the provision for the protection of trademarks, not tradenames.
Article 6bis of the Paris Convention states:
(1) The countries of the Union undertake, either administratively if their legislation
so permits, or at the request of an interested party, to refuse or to cancel the
registration and to prohibit the use of a trademark which constitutes a reproduction,
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
imitation or translation, liable to create confusion, of a mark considered by the
competent authority of the country of registration or use to be well-known in that
country as being already the mark of a person entitled to the benefits of the present
Convention and used for identical or similar goods. These provisions shall also
apply when the essential part of the mark constitutes a reproduction of any such
well-known mark or an imitation liable to create confusion therewith.
(2) A period of at least five years from the date of registration shall be allowed for
seeking the cancellation of such a mark. The countries of the Union may provide
for a period within which the prohibition of use must be sought.
(3) No time limit shall be fixed for seeking the cancellation or the prohibition of the
use of marks or used in bad faith."
Petitioner insists that what it seeks is the protection of Article 8 of the Paris Convention,
the provision that pertains to the protection of tradenames. Petitioner believes that the
appropriate memorandum to consider is that issued by the then Minister of Trade and
Industry, Luis Villafuerte, directing the Director of patents to:
"reject all pending applications for Philippine registration of signature and other
world famous trademarks by applicants other than the original owners or users."
As far as petitioner is concerned, the fact that its tradename is at risk would call for the
protection granted by Article 8 of the Paris Convention. Petitioner calls attention to the fact
that Article 8, even as embodied in par. 6, sec. 37 of RA 166, mentions no requirement of
similarity of goods. Petitioner claims that the reason there is no mention of such a
requirement, is "because there is a difference between the referent of the name and that
of the mark"24 and that "since Art. 8 protects the tradename in the countries of the Union,
such as Japan and the Philippines, Petitioner's tradename should be protected here."25
We cannot uphold petitioner's position.
The term "trademark" is defined by RA 166, the Trademark Law, as including "any word,
name, symbol, emblem, sign or device or any combination thereof adopted and used by a
manufacturer or merchant to identify his goods and distinguish them for those
manufactured, sold or dealt in by others."26 Tradename is defined by the same law as
including "individual names and surnames, firm names, tradenames, devices or words
used by manufacturers, industrialists, merchants, agriculturists, and others to identify their
business, vocations, or occupations; the names or titles lawfully adopted and used by
natural or juridical persons, unions, and any manufacturing, industrial, commercial,
agricultural or other organizations engaged in trade or commerce."27 Simply put, a trade
name refers to the business and its goodwill; a trademark refers to the goods.28
61

The Convention of Paris for the Protection of Industrial Property, otherwise known as the
Paris Convention, of which both the Philippines and Japan, the country of petitioner, are
signatories29 , is a multilateral treaty that seeks to protect industrial property consisting of
patents, utility models, industrial designs, trademarks, service marks, trade names and
indications of source or appellations of origin, and at the same time aims to repress unfair
competition.30We agree with public respondents that the controlling doctrine with respect
to the applicability of Article 8 of the Paris Convention is that established in Kabushi Kaisha
Isetan vs. Intermediate Appellate Court.31 As pointed out by the BPTTT:
"Regarding the applicability of Article 8 of the Paris Convention, this Office believes
that there is no automatic protection afforded an entity whose tradename is alleged
to have been infringed through the use of that name as a trademark by a local
entity.
In Kabushiki Kaisha Isetan vs. The Intermediate Appellate Court, et. al., G.R. No.
75420, 15 November 1991, the Honorable Supreme Court held that:
'The Paris Convention for the Protection of Industrial Property does not
automatically exclude all countries of the world which have signed it from
using a tradename which happens to be used in one country. To illustrate
if a taxicab or bus company in a town in the United Kingdom or India
happens to use the tradename "Rapid Transportation", it does not
necessarily follow that "Rapid" can no longer be registered in Uganda, Fiji,
or the Philippines.
This office is not unmindful that in the Treaty of Paris for the Protection of
Intellectual Property regarding well-known marks and possible application thereof
in this case. Petitioner, as this office sees it, is trying to seek refuge under its
protective mantle, claiming that the subject mark is well known in this country at
the time the then application of NSR Rubber was filed.
However, the then Minister of Trade and Industry, the Hon. Roberto V. Ongpin,
issued a memorandum dated 25 October 1983 to the Director of Patents, a set of
guidelines in the implementation of Article 6bis (sic) of the Treaty of Paris. These
conditions are:
a) the mark must be internationally known;
b) the subject of the right must be a trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or similar kinds of goods; and
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
d) the person claiming must be the owner of the mark (The Parties
Convention Commentary on the Paris Convention. Article by Dr. Bogsch,
Director General of the World Intellectual Property Organization, Geneva,
Switzerland, 1985)'
From the set of facts found in the records, it is ruled that the Petitioner failed to
comply with the third requirement of the said memorandum that is the mark must
be for use in the same or similar kinds of goods. The Petitioner is using the mark
"CANON" for products belonging to class 2 (paints, chemical products) while the
Respondent is using the same mark for sandals (class 25). Hence, Petitioner's
contention that its mark is well-known at the time the Respondent filed its
application for the same mark should fail. "32
Petitioner assails the application of the case of Kabushi Kaisha Isetan vs. Intermediate
Appellate Court to this case. Petitioner points out that in the case of Kabushi Kaisha Isetan
vs. Intermediate Appellate Court, petitioner therein was found to have never at all
conducted its business in the Philippines unlike herein petitioner who has extensively
conducted its business here and also had its trademark registered in this country. Hence,
petitioner submits that this factual difference renders inapplicable our ruling in the case
of Kabushi Kaisha Isetan vs. Intermediate Appellate Court that Article 8 of the Paris
Convention does not automatically extend protection to a tradename that is in danger of
being infringed in a country that is also a signatory to said treaty. This contention deserves
scant consideration. Suffice it to say that the just quoted pronouncement in the case
of Kabushi Kaisha Isetan vs. Intermediate Appellate Court, was made independent of the
factual finding that petitioner in said case had not conducted its business in this country.
WHEREFORE, in view of the foregoing, the instant petition for review on certiorari is
DENIED for lack of merit.
SO ORDERED.
62

G.R. No. 71189 November 4, 1992
FABERGE, INCORPORATED, petitioner, vs. THE INTERMEDIATE APPELLATE
COURT and CO BENG KAY, respondents.
The Director of Patents authorized herein private respondent Co Beng Kay to register the
trademark "BRUTE" for the briefs manufactured and sold by his Corporation in the
domestic market vis-a-vis petitioner's opposition grounded on similarity of said trademark
with petitioner's own symbol "BRUT" which it previously registered for after shave lotion,
shaving cream, deodorant, talcum powder, and toilet soap. Thereafter, respondent court,
through Justice Gopengco with Justices Patajo and Racela, Jr. concurring, was initially
persuaded by petitioner's plea for reversal directed against the permission granted by the
Director of Patents, but the decision of the Second Special Cases Division handed down
on April 29, 1983 was later reconsidered in favor of herein private respondent (pp. 46-54;
pp. 34-36, Rollo).
Hence, the petition at bar assailing the action of respondent court in affirming the ruling of
the Director of Patents (Page 7, Petition; Page 16, Rollo).
In essence, it appears that in the course of marketing petitioner's "BRUT" products and
during the pendency of its application for registration of the trademark "BRUT 33 and
DEVICE" for antiperspirant, personal deodorant, cream shave, after shave/shower lotion,
hair spray, and hair shampoo (page 236, Rollo), respondent Co Beng Kay of Webengton
Garments Manufacturing applied for registration of the disputed emblem "BRUTE" for
briefs. Opposition raised by petitioner anchored on similarity with its own symbol and
irreparable injury to the business reputation of the first user was to no avail. When the legal
tussle was elevated to respondent court, Justice Gopengco remarked that:
Indeed, a look at the marks "BRUT," "BRUT 33" and "BRUTE" shows that such
marks are not only similar in appearance but they are even similar in sound and in
the style of presentation. It is reasonable to believe that this similarity is sufficient
to cause confusion and even mistake and deception in the buying public as to the
origin for source of the goods bearing such trademarks. It should be considered
that, although the mark "BRUTE" was applied for, only for briefs, yet such product
has the same outlet such as department stores and haberdashery stores in the
Philippines as the goods covered by the trademarks "BRUT" and "BRUTE 33"
so that such confusion, mistake or deception is not unlikely to occur. The argument
of appellee, that in modern marketing, goods of similar use are grouped in one
section of the supermarket and thus it is unlikely that cosmetics be mixed with
textile or wearing apparel, is hardly convincing enough, for a look at the modern
department stores shows that merchandise intended for the use of men are now
placed in a section which is then labelled "Men's Accessories." It is not unlikely,
therefore, that in said section, appellant's products, which are cosmetics for men's
use, be placed beside appellee's product, and cause such confusion or mistake as
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
to the source of the goods displayed in the section. To avoid this, the Director of
Patents held:
The marks KEYSTON (on shirts) and KEYSTONE (on shoes and slippers),
the latter having been previously registered are clearly similar in sound and
appearance that confusion or mistake, or deception among purchasers as
to origin and source of goods is likely to occur. Shirts and shoes are both
wearing apparel and there is no gainsaying the truth that these items are
ordinarily displayed in the same manner and sold through the same retail
outlets such as department and haberdashery stores in the Philippines.
(Ex-Parte Keystone Garment Manufacturing Co., Decision No. 245 of the
Director of Patents, January 25, 1963.)
It is also not disputed that on account of the considerable length of time that
appellant has marketed its products bearing the trademarks "BRUT" and "BRUT
33," and its maintenance of high quality of its products through the years, appellant
has earned and established immense goodwill among its customers. We agree
with appellant that should appellee be allowed to use the trademark "BRUTE" on
the briefs manufactured by him, appellee would be cashing in on the goodwill
already established by appellant, because, as already stated above, appellant's
cosmetics and appellee's briefs are not entirely unrelated since both are directed
to the fashion trade and in the marketing process, they may find themselves side
by side in the "Men's Accessories Section" of the market, thus easily leading the
buying public to believe that such briefs come from the same source as appellant's
cosmetics, and be induced to buy said briefs, to the undue advantage of appellee.
Again, if after purchasing such briefs, the public finds them to be of non-competitive
quality, or not of the high quality expected of appellant's products, then appellant's
reputation and goodwill will be ruined, to its damage and prejudice. Thus, for the
protection of the goodwill already established by a party, the Supreme Court held:
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. Dir. of Patents and Villapanta, 108 Phil. 833, 836.)
The test of confusing similarity which would preclude the registration of a
trademark is not whether the challenged mark would actually cause confusion or
deception of the purchasers but whether the use of such mark would likely cause
confusion or mistake on the part of the buying public. In short, the law does not
63

require that the competing marks must be so identical as to produce actual error
or mistakes. It would be sufficient, for purposes of the law, that the similarity
between the two labels be such that there is a possibility or likelihood of the
purchaser of the older brand mistaking the newer brand for it. (Gopengco,
Mercantile Law Compendium, 1983 ed., p. 684; Acoje Mining Co., Inc. vs. Director
of Patents, 38 SCRA 480). (pp. 3-6, Decision; pp. 48-51, Rollo).
On June 5, 1984, respondent's Motion for Reconsideration merited the nod of approval of
the appellate court brought about by private respondent's suggestion that the controlling
ruling is that laid down in Philippine Refining Co., Inc. vs. Ng Sam (115 SCRA 472
[1982]), ESSO Standard Eastern, Inc. vs. Court of Appeals (116 SCRA 336
[1982]); Hickok Manufacturing Co., Inc. vs. CA (116 SCRA 378 [1982]), and Acoje Mining
Co., Inc. vs. Director of Patents (38 SCRA 480 [1971], to the effect that the identical
trademark can be used by different manufacturers for products that are non-competing
and unrelated. (pp. 34-36, Rollo)
Petitioner is of the impression that respondent court could not have relied on the rulings of
this Court in the ESSOand the PRC cases when the original decision was reconsidered
since respondent court already expressed the opinion in the text of the previous discourse
that the facts in said cases "are not found in the case at bar" (Page 12, Brief for the
Petitioner, Page 202, Rollo). Petitioner likewise emphasis American jurisprudential
doctrines to the effect that sale of cosmetics and wearing apparel under similar marks is
likely to cause confusion. Instead of applying the ESSO, PRC and Hickok cases, petitioner
continues to asseverate, the rule as announced in Ang vs.Teodoro (74 Phil. 50 [1942]) as
reiterated in Sta. Ana vs. Maliwat and Evalle (24 SCRA (1968) 101) should be applied.
In additional, it seems that petitioner would want this Court to appreciate petitioner's
alleged application for registration of the trademark "BRUT 33 DEVICE" for briefs as an
explicit proof that petitioner intended to expand its mark "BRUT" to other goods, following
the sentiment expressed by Justice J.B.L. Reyes in the Sta. Ana case (supra, at page
1025) that relief is available where the junior user's goods are not remote from any product
that the senior user would be likely to make or sell (Pages 26-27, Brief for the Petitioner).
Besides, petitioner insists that in view of the repeal of Republic Act No. 166 (which
advocated the related goods theory) by Republic Act No. 666 which deleted the phrase
found in the old law that the merchandise must be substantially the same descriptive
properties, respondent Court should have heeded the pronouncement in the Ang case that
there can be unfair competition even if the goods are noncompeting (supra, at page 54).
On the other hand, private respondent echoes the glaring difference in physical
appearance of its products with petitioner's own goods by stressing the observations of
the Director of Patents on May 3, 1978:
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Considered in their entireties as depicted in the parties' sample box and can
containers, the involved trademarks are grossly different in their overall
appearance that even at a distance a would-be purchaser could easily distinguish
what is BRUTE brief and what is BRUT after shave lotion, lotion and the like.
Opposer's mark BRUT or BRUT 33, as shown in Exhibit "6", is predominantly
colored green with a blue and white band at the middle portion of the container.
Also appearing therein in bold letters is opposer's name "FABERGE" and a
notation "Creme Shave". On the other hand, respondent's mark as shown in Exh.
"4-A" prominently displays the representation of a muscular man, underneath of
which appears the trademark BRUTE with a notation "Bikini Brief" . . . Equally
visible at the other portions of respondent's labels are the pictorial representation
of "briefs" which unmistakably suggest that the product contained in the box
container is that of a man's brief. The fact therefore is obvious that the goods upon
which the conflicting trademarks are used are clearly different and the intended
purpose of such goods are likewise not the same. Accordingly, a purchaser who is
out in the market for the purpose of buying respondent's BRUTE brief would
definitely be not mistaken or misled into buying instead opposer's BRUT after
shave lotion or deodorant.
Additional, the meaning or connotation of the bare word marks of opposer, BRUT,
and BRUTE of respondent, are clearly different and not likely to be confused with
each other. BRUT simply means "dry", and also, "to browse"; while BRUTE means
"ferocious, sensual", and in Latin, it signifies "heavy". Gleaned from the respective
meanings of the two marks in question, they both suggest the resultant effects of
the application of the products, upon which the said trademarks are employed,
which fact all the more renders confusion or deception of purchasers a remote
possibility.
The products covered by petitioner's trademarks "BRUT" and "BRUT 33 & Device"
enjoying its so-called "goodwill" are after-shave lotion, shaving cream, deodorant,
talcum powder, toilet soap, anti-perspirant, personal deodorant, cream shave, after
shave/shower lotion, hair spray and hair shampoo. Petitioner has never applied
for, registered nor used its trademarks for briefs in commerce or trade in the
Philippines. Private respondent seeks to register his trademark "BRUTE" only for
briefs which is a product non-competitive to and entirely unrelated with petitioner's
aforementioned products. (pp. 3-4, Brief for the Respondent)
in order to impress upon Us that the controlling norm is the comparison of the trademarks
in their entirely as they appear in their labels to determine whether there is confusing
similarity.
Moreover, private respondent asserts that briefs and cosmetics do not belong to the same
class nor do they have the same descriptive properties such that the use of a trademark
64

on one's goods does not prevent the adoption and use of the same trademark by others
on unrelated articles of a different nature in line with the ruling of this Court in Hickok
Manufacturing Co., Inc. vs. Court of Appeals (116 SCRA 387 [1982]). Furthermore,
respondent belies petitioner's claim that the latter had applied for registration of the
trademark "BRUT 33 DEVICE" for briefs since the documents on file with the Director of
Patents attached to respondent's legal Brief does not include the so-called application by
petitioner of the alleged trademark for briefs.
To the legal query of whether private respondent may appropriate the trademark "BRUTE"
for the briefs it manufactures and sells to the public albeit petitioner had previously
registered the symbol "BRUT" and "BRUT 33" for its own line of times, it is but apropos to
shift Our attention to the pertinent provisions of the new Civil Code vis-a-vis Republic Act
No. 166, as amended, the special law patterned after the United States Trademark Act of
1946 (Director of Patents, Circular Release No. 36, 45 O.G. 3704; Martin, Commentaries
and Jurisprudence on the Philippine Commercial Laws, 1986 Revised Edition, Volume 2,
page 489), thus:
Art. 520. A trade-mark or trade-name duly registered in the proper government
bureau or office is owned by and pertains to the person, corporation, or firm
registering the same, subject to the provisions of special laws.
Art. 521. The goodwill of a business is property, and may be transferred together
with the right to use the name under which the business is conducted.
Art. 522. Trade-marks and trade-names are governed by special laws.
xxx xxx xxx
Sec. 2. What are registrable. Trade-marks, trade-names, and service-marks
owned by persons, corporations, partnerships or associations domiciled in the
Philippines and by persons, corporations, partnerships or associations domiciled
in any foreign country may be registered in accordance with the provisions of this
Act; Provided, That said trade-marks, trade-names, or service-marks, are actually
in use in commerce and services not less than two months in the Philippines before
the time the applications for registration are filed: And provided, further, That the
country of which the applicant for registration is a citizen grants by law substantially
similar privileges to citizens of the Philippines, and such fact is officially certified,
with a certified true copy of the foreign law translated into the English language, by
the government of the Republic of the Philippines. (As amended by Rep. Act No.
865).
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Sec. 2-A. Ownership of trade-marks, trade-names 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 trade-mark, a trade-
name, or a service-mark not so appropriated by another, to distinguish his
merchandise, business or service from the merchandise, business or services of
others. The ownership or possession of a trade-mark, 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 extent as are other
property rights known to the law. (As inserted by Sec. 1 of Rep. Act 638).
xxx xxx xxx
Sec. 4. Registration of trade-marks, trade-names and service-marks on the
principal register.
. . . The owner of trademark, trade-name or service-mark used to distinguish his
goods, business or services from the goods, business or services of others shall
have right to register the same on the principal register, unless it:
xxx xxx xxx
4(d) Consists of or comprises a mark or trade-name which so resembles a mark
or trade-name registered in the Philippines or a mark or trade-name previously
used in the Philippines by another and not abandoned, as to be likely, when applied
to or used in connection with the goods, business or services of the applicant, to
cause confusion or mistake or to deceive purchasers.
xxx xxx xxx
Sec. 11. Issuance and contents of the certificate. Certificates of registration
shall be issued in the name of the Republic of the Philippines under the seal of the
Patent Office, and shall be signed by the Director, and a record thereof together
with a copy of the specimen or facsimile and the statement of the applicant, shall
be kept in books for that purpose. The certificate shall reproduce the specimen or
facsimile of the mark or trade-name, contain the statement of the applicant and
state that the mark or trade-name is registered under this Act, the date of the first
use in commerce or business, the particular goods or services for which it is
registered, the number and date of the registration, the term thereof, the date on
which the application for registration was received in the Patent Office, a statement
of the requirement that in order to maintain the registration, periodical affidavits of
65

use within the specified times hereinafter in section twelve provided, shall be filed,
and such other data as the rules and regulations may from time to time prescribe.
xxx xxx xxx
Sec. 20. Certificate of registration prima facie evidence of validity. A certificate
of registration of a mark or trade-name shall be prima facie evidence of the validity
of the registration, the registrant's ownership of the mark or trade-name, and of the
registrant's exclusive right to use the same in connection with the goods, business
or services specified in the certificate, subject to any conditions and limitations
stated therein.
Having thus reviewed the laws applicable to the case before Us, it is not difficult to discern
from the foregoing statutory enactments that private respondent may be permitted to
register the trademark "BRUTE" for briefs produced by it notwithstanding petitioner's
vehement protestations of unfair dealings in marketing its own set of items which are
limited to: after-shave lotion, shaving cream, deodorant, talcum powder and toilet soap. In
as much as petitioner has not ventured in the production of briefs, an item which is not
listed in its certificate of registration, petitioner can not and should not be allowed to feign
that private respondent had invaded petitioner's exclusive domain. To be sure, it is
significant that petitioner failed to annex in its Brief the so-called "eloquent proof that
petitioner indeed intended to expand its mark "BRUT" to other goods" (Page 27, Brief for
the Petitioner; Page 202, Rollo). Even then, a mere application by petitioner in this aspect
does not suffice and may not vest an exclusive right in its favor that can ordinarily be
protected by the Trademark Law. In short, paraphrasing Section 20 of the Trademark Law
as applied to the documentary evidence adduced by petitioner, the certificate of
registration issued by the Director of Patents can confer upon petitioner the exclusive right
to use its own symbol only to those goods specified in the certificate, subject to any
conditions and limitations stated therein. This basic point is perhaps the
unwritten rationale of Justice Escolin in Philippine Refining Co., Inc. vs. Ng Lam (115
SCRA 472 [1982]), when he stressed the principle enunciated by the United States
Supreme Court in American Foundries vs. Robertson (269 U.S. 372, 381, 70 L ed 317, 46
Sct. 160) that one who has adopted and used a trademark on his goods does not prevent
the adoption and use of the same trademark by other for products which are of different
description. Verily, this Court had the occasion to observe in the 1966 case of George
W. Luft Co., Inc. vs. Ngo Guan (18 SCRA 944 [1966]) that no serious objection was posed
by the petitioner therein since the applicant utilized the emblem "Tango" for no other
product than hair pomade in which petitioner does not deal.
This brings Us back to the incidental issue raised by petitioner which private respondent
sought to belie as regards petitioner's alleged expansion of its business. It may be recalled
that petitioner claimed that it has a pending application for registration of the emblem
"BRUT 33" for briefs (page 25, Brief for the Petitioner; page 202, Rollo) to impress upon
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Us the Solomonic wisdom imparted by Justice JBL Reyes in Sta. Ana vs. Maliwat (24
SCRA 1018 [1968]), to the effect that dissimilarity of goods will not preclude relief if the
junior user's goods are not remote from any other product which the first user would be
likely to make or sell (vide, at page 1025). Commenting on the former provision of the
Trademark Law now embodied substantially under Section 4(d) of Republic Act No. 166,
as amended, the erudite jurist opined that the law in point "does not require that the articles
of manufacture of the previous user and late user of the mark should possess the same
descriptive properties or should fall into the same categories as to bar the latter from
registering his mark in the principal register." (supra at page 1026).
Yet, it is equally true that as aforesaid, the protective mantle of the Trademark Law extends
only to the goods used by the first user as specified in the certificate of registration following
the clear message conveyed by section 20.
How do We now reconcile the apparent conflict between Section 4(d) which was relied
upon by Justice JBL Reyes in the Sta. Ana case and Section 20? It would seem that
Section 4(d) does not require that the goods manufactured by the second user be related
to the goods produced by the senior user while Section 20 limits the exclusive right of the
senior user only to those goods specified in the certificate of registration. But the rule has
been laid down that the clause which comes later shall be given paramount significance
over an anterior proviso upon the presumption that it expresses the latest and dominant
purpose. (Graham Paper Co. vs. National Newspaper Asso. (Mo. App.) 193 S.W.
1003; Barnett vs. Merchant's L. Ins. Co., 87 Okl. 42; State ex nel Atty. Gen. vs. Toledo, 26
N.E., p. 1061; cited by Martin, Statutory Construction Sixth ed., 1980 Reprinted, p. 144). It
ineluctably follows that Section 20 is controlling and, therefore, private respondent can
appropriate its symbol for the briefs it manufactures because as aptly remarked by Justice
Sanchez in Sterling Products International Inc. vs. Farbenfabriken Bayer (27 SCRA 1214
[1969]):
Really, if the certificate of registration were to be deemed as including goods not
specified therein, then a situation may arise whereby an applicant may be tempted
to register a trademark on any and all goods which his mind may conceive even if
he had never intended to use the trademark for the said goods. We believe that
such omnibus registration is not contemplated by our Trademark Law. (1226)
Withal, judging from the physical attributes of petitioner's and private respondent's
products, there can be no doubt that confusion or the likelihood of deception to the average
purchaser is unlikely since the goods are non-competing and unrelated. In upholding
registration of the brand "ESSO for cigarettes inspite previous appropriation of the same
mark "ESSO" for petroleum products, then Justice, later Chief Justices Teehankee in Esso
Standard Eastern, Inc.vs. Court of Appeals (116 SCRA 336 [1982] said:
66

The Court affirms on the basis of controlling doctrine the appealed decision of the
Court of Appeals reversing that of the Court of First Instance of Manila and
dismissing the complaint filed by herein petitioner against private respondent for
trade infringement for using petitioner's trademark ESSO, since it clearly appears
that the goods on which the trademark ESSO is used by respondent is non-
competing and entirely unrelated to the products of petitioner so that there is no
likelihood of confusion or deception on the part of the purchasing public as to the
origin or source of the goods.
xxx xxx xxx
The trial court, relying on the old cases of Ang vs. Teodoro and Arce & Sons,
Inc. vs. Selecta Biscuit Company, referring to related products, decided in favor of
petitioner and ruled that respondent was guilty of infringement of trademark.
On appeal, respondent Court of Appeals found that there was no trademark
infringement and dismissed the complaint. Reconsideration of the decision having
been denied, petitioner appealed to this court by way of certiorari to reverse the
decision of the Court of Appeals and to reinstate the decision of the Court of First
Instance of Manila. The Court finds no ground for granting the petition.
The law defines infringement as the use without consent of the trademark owner
of any "reproduction, counterfeit, copy or colorable imitation of any registered mark
or tradename 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 colorable imitate any director's decision on the question of
"May petitioner Acoje Mining Company register for the purpose of advertising its
product, soy sauce, the trademark LOTUS, there being already in existence one
such registered in favor of the Philippine Refining Company for its product, edible
oil, it being further shown that the trademark applied for is in smaller type, colored
differently, set on a background which is dissimilar as to yield a distinct
appearance?" and ordered the granting of petitioner's application for registration
ruling that "there is quite a difference between soy sauce and edible oil. If one is
in the market for the former, he is not likely to purchase the latter just because of
the trademarks LOTUS" and "when regard is had for the principle that the two
trademark in their entirely as they appear in their respective labels should be
considered in relation to the goods advertised before registration could be denied,
the conclusion is inescapable that respondent Director ought to have reached a
different conclusion."
Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
By the same token, in the recent case of Philippine Refining Co., Inc. v. Ng Sam
and Director of Patents, the Court upheld the patent director's registration of the
same trademark CAMIA for therein respondent's product of ham notwithstanding
its already being used by therein petitioner for a wide range of products: lard;
butter, cooking oil, abrasive detergents, polishing material and soap of all kinds.
The Court, after noting that the same CAMIA trademark had been registered by
two other companies, Everbright Development Company and F.E. Zuellig, Inc. for
their respective products of thread and yarn (for the former) and textiles,
embroideries and laces (for the latter) ruled that "while ham and some of the
products of petitioner are classified under Class 47 (Foods and Ingredients of
Food), this alone cannot serve as the decisive factor in the resolution of whether
or not they are related goods. Emphasis should be on the similarity of the arbitrary
classification or general description of their properties or characteristics. The
Court, therefore, concluded that "In fine, We hold that the businesses of the parties
are noncompetitive and their products so unrelated that the use of identical
trademarks is not likely to give rise to confusion, much less cause damage to
petitioner.
In the situation before us, the goods are obviously different from each other with
"absolutely no iota of similitude" as stressed in respondent court's judgment. They
are so foreign to each other as to make it unlikely that purchasers would think that
petitioner is the manufacturer of respondent' goods. The mere fact that one person
has adopted and used a trademark on his goods does not prevent the adoption
and use of the same trademark by others on unrelated articles of a different kind.
Petitioner uses the trademark ESSO and holds certificate registration of the
trademark for petroleum products, including aviation gasoline, grease, cigarette
lighter fluid and other various products such as plastics, chemicals, synthetics,
gasoline solvents, kerosene, automotive and industrial fuel, bunker fuel, lubricating
oil, fertilizers, gas alcohol, insecticides and the "ESSO Gasul" burner, while
respondent's business is solely for the manufacture and sale of the unrelated
product of cigarettes. The public knows too well that petitioner deals solely with
petroleum products that there is no possibility that cigarettes with ESSO brand will
be associated with whatever good name petitioner's ESSO trademark may have
generated. Although petitioner's products are numerous, they are of the same
class or line of merchandise which are non-competing with respondent's product
of cigarettes, which as pointed out in the appealed judgment is beyond petitioner's
"zone of potential or natural and logical expansion." When a trademark is used by
a party for a product in which the other party does not deal, the use of the same
trademark on the latter's product cannot be validly objected to.
xxx xxx xxx
67
 Intellectual Property Law The Law on Trademarks, Tradenames and Service Marks
Respondent court correctly ruled that considering the general appearances of each But these nagging and disturbing points cannot win the day for petitioner, although We
mark as a whole, the possibility of any confusion is unlikely. A comparison of the must hasten to add that in the final denouement, Our apprehensions in this regard are not
labels of the samples of the goods submitted by the parties shows a great many entirely irreversible since Section 4(d) and 20 of the law in question may still be subjected
differences on the trademark used. As pointed out by respondent court in its to legislative modification in order to protect the original user of the symbol.
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 WHEREFORE, the petition is hereby DISMISSED without pronouncement as to costs.
is contained is the distinct and unique kind of blue. In his answer to the trial court's
question, Mr. Buhay informed the court that the plaintiff never used its trademark SO ORDERED.
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 plaintiff's 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 appellant's cigarette. The only color
that the appellant uses in its trademark is green. (339; 341-346)

The glaring discrepancies between the two products had been amply portrayed to such an
extent that indeed, "a purchaser who is out in the market for the purpose of buying
respondent's BRUTE brief would definitely be not mistaken or misled into buying BRUT
after shave lotion or deodorant" as categorically opined in the decision of the Director of
Patents relative to the inter-partes case. (supra, at page 7).

Petitioner's bid to persuade Us into accepting the doctrines announced in the

aforementioned cases of Sta. Ana vs.Maliwat and Ang vs. Teodoro hardly inspire belief.
In Sta Ana, it was admitted that the marks were confusingly similar which is not so in the
case at bar. In the 1942 case of Ang vs. Teodoro, Justice Ozaeta noted that pants and
shirts are similar to shoes and slippers within the meaning of Sections 3, 7, 11, 13 and 20
of Act No. 666 which was the old Trademark Law enacted on March 6, 1903 prior to the
present law. Obviously, the conclusion reached by theponente in the Ang case may not
now be utilized by analogy to the case at bar due to variance in the factual and legal milieu.
Neither can we agree with petitioner that the ruling in La Chemise Lacoste,
S.A. vs. Fernandez (129 SCRA 373 [1984]) is applicable to the controversy at hand. The
case adverted to by petitioner involved the same mark for the same class of shirts
manufactured by the parties therein.

It would appear that as a consequence of this discourse, there still remains hanging in mid-
air the unanswered puzzle as to why an aspiring commercial enterprise, given the infinite
choices available to it of names for the intend product, would select a trademark or
tradename which somewhat resembles an existing emblem that had established goodwill.
Our opinion hereinbefore expressed could even open the floodgates to similar incursions
in the future when we interpreted Section 20 of the Trademark Law as an implicit
permission to a manufacturer to venture into the production of goods and allow that
producer to appropriate the brand name of the senior registrant on goods other than those
stated in the certificate of registration.
68