G.R. Nos.

160054-55 July 21, 2004

MANOLO P. SAMSON, petitioner,

vs.
HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge, Regional Trial Court of
Quezon City, Branch 90, PEOPLE OF THE PHILIPPINES and CATERPILLAR, INC., respondents

Facts:

On March 7, 2002, two informations for unfair competition under Section 168.3 (a), in relation to
Section 170, of the Intellectual Property Code (R.A No. 8293), were filed against petitioner
Manolo P. Samson, the registered owner of ITTI Shoes. That sometime on November 1999 and
sometime prior or subsequent thereto, petitioner have distributed, sold and/or offer for sale
CATERPILLAR products such as footwear, garments, clothing, bags, accessories and paraphernalia
which are closely identical to and/or colorable imitations of the authentic Caterpillar products and
likewise using trademarks, symbols and/or designs as would cause confusion, mistake or deception
on the part of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior adopter,
user and owner internationally.

On April 19, 2002, petitioner filed a motion to suspend arraignment and other proceedings in view of
the existence of an alleged prejudicial question involved, for unfair competition pending with the same
branch; and also in view of the pendency of a petition for review filed with the Secretary of Justice
assailing the Chief State Prosecutors resolution finding probable cause, RTC however denied their
motion.

On August 20, 2002, petitioner filed a twin motion to quash the information and motion for
reconsideration of the order denying motion to suspend, this time challenging the jurisdiction of the
trial court over the offense charged. He contended that since under Section 170 of R.A. No. 8293, the
penalty4 of imprisonment for unfair competition does not exceed six years, the offense is cognizable
by the Municipal Trial Courts and not by the Regional Trial Court, per R.A. No. 7691.

The twin motions were both denied, hence the instant petition.

Issues:

1. Which court has jurisdiction over criminal and civil cases for violation of intellectual property
rights?

2. Did the respondent Judge gravely abuse his discretion in refusing to suspend the arraignment and
other proceedings on the ground of (a) the existence of a prejudicial question?

Held:

1.) Under Section 170 of R.A. No. 8293 the criminal penalty for infringement of registered marks,
unfair competition, false designation of origin and false description or representation, is imprisonment
from 2 to 5 years. Corollarily, Section 163 of the same Code states that actions (including criminal
and civil) under 168 shall be brought before the proper courts. The existing law referred to in the
foregoing provision is Section 27 of R.A. No. 166 (The Trademark Law) which provides that
jurisdiction over cases for infringement of registered marks, unfair competition, false designation of
origin and false description or representation, is lodged with the Court of First Instance (now Regional
Trial Court).
Furthermore R.A. No. 166 was not expressly repealed by R.A. No. 8293. If it did it would not have
used the phrases "parts of Acts" and "inconsistent herewith".

SEC. 239. Repeals. 239.1. All Acts and parts of Acts inconsistent herewith, more
particularly Republic Act No. 165, as amended; Republic Act No. 166

As for the conflict between R.A. No. 8293 and R.A. No. 166, and R.A. No. 7691 (expanding
Jurisdiction of MTC), the former being special laws conferring jurisdiction over violations of
intellectual property rights to the Regional Trial Court they should therefore prevail over the latter.

Lastly, to implement and ensure the speedy disposition of cases involving violations of intellectual
property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19, 2002
designating certain Regional Trial Courts as Intellectual Property Courts.

2.) There is NO prejudicial question. In the case at bar, the common element in the acts constituting
unfair competition under Section 168 of R.A. No. 8293 is fraud. Pursuant to Article 33 of the Civil
Code, in cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate
and distinct from the criminal action, may be brought by the injured party. At any rate, there is no
prejudicial question if the civil and the criminal action can, according to law, proceed independently of
each other.
G.R. No. 132604 March 6, 2002

VENANCIO SAMBAR, doing business under the name and style of CVS Garment
Enterprises, petitioner,
vs.
LEVI STRAUSS & CO., and LEVI STRAUSS (PHIL.), INC., respondents.

Facts:

On September 28, 1987, private respondents, demanded that CVS Garment Enterprises (CVSGE)
desist from using their stitched arcuate design on the Europress jeans which CVSGE advertised in
the Manila Bulletin. Atty. Gruba, counsel of CVSGE, replied that the arcuate design on the back
pockets of Europress jeans was different from the design on the back pockets of Levis jeans. He
further asserted that his client had a copyright on the design it was using.

Thereafter, private respondents filed a complaint private respondents alleged that Levi Strauss and
Co. (LS&Co.), an internationally known clothing manufacturer, owns the arcuate design trademark
which was registered under U.S. on November 16, 1943, and in the Principal Register of trademarks
with the Philippine Patent Office under Certificate of Registration No. 20240 issued on October 8,
1973; that through a Trademark Technical Data and Technical Assistance Agreement with Levi
Strauss (Phil.) Inc. (LSPI) in 1972, LS&Co. granted LSPI a non-exclusive license to use the arcuate
trademark in its manufacture and sale of Levis pants, jackets and shirts in the Philippines; that in
1983, LS&Co. also appointed LSPI as its agent and attorney-in-fact to protect its trademark in the
Philippines; and that sometime in 1987, CVSGIC and Venancio Sambar, without the consent and
authority of private respondents and in infringement and unfair competition, sold and advertised, and
despite demands to cease and desist, continued to manufacture, sell and advertise denim pants under
the brand name "Europress" with back pockets bearing a design similar to the arcuate trademark of
private respondents, thereby causing confusion on the buying public, prejudicial to private
respondents goodwill and property right.

In its answer, CVSGIC admitted it manufactured, sold and advertised and was still manufacturing and
selling denim pants under the brand name of "Europress", bearing a back pocket design of two double
arcs meeting in the middle. However, it denied that there was infringement or unfair competition
because the display rooms of department stores where Levis and Europress jeans were sold, were
distinctively segregated by billboards and other modes of advertisement. CVSGIC avers that the
public would not be confused on the ownership of such known trademark as Levis, Jag, Europress,
etc.. Also, CVSGIC claimed that it had its own original arcuate design, as evidenced by Copyright
Registration No. 1-1998, which was very different and distinct from Levis design. CVSGIC prayed for
actual, moral and exemplary damages by way of counterclaim.

Petitioner Venancio Sambar filed a separate answer. He denied he was connected with CVSGIC.
He admitted that Copyright Registration No. 1-1998 was issued to him, but he denied using it.

After hearing, the trial court issued a writ of preliminary injunction. On May 3, 1995, the trial court
rendered its decision against Petitioners. On appeal judgment appealed from was AFFIRMED by
the Court of Appeals.

Hence the present petition.

Issues:

1. Did petitioner infringe on private respondents arcuate design?

2. Must we hold petitioner solidarily liable with CVS Garments Industrial Corporation?

3. Are private respondents entitled to nominal, temperate and exemplary damages and cancellation
of petitioners copyright?

Held:

1.) On the first issue, petitioner claims that he did not infringe on private respondents arcuate design
because there was no colorable imitation which deceived or confused the public. He disagreed with
the Court of Appeals that there were confusing similarities between Levis and Europress arcuate
designs, despite the trial courts observation of differences in them. Petitioner maintains that although
the backpocket designs had similarities, the public was not confused because Levis jeans had other
marks not found in Europress jeans. Further, he says Levis long history and popularity made its
trademark easily identifiable by the public.

Although the trial court found differences in the two designs, these differences were not noticeable.
Further, private respondents said, infringement of trademark did not require exact similarity. Colorable
imitation enough to cause confusion among the public, was sufficient for a trademark to be infringed.
Private respondents explained that in a market research they conducted with 600 respondents, the
result showed that the public was confused by Europress trademark vis the Levis trademark.

We find that the first issue raised by petitioner is factual. The basic rule is that factual questions are
beyond the province of this Court in a petition for review. Although there are exceptions to this rule,
this case is not one of them.5 Hence, we find no reason to disturb the findings of the Court of Appeals
that Europress use of the arcuate design was an infringement of the Levis design.

2.) On the second issue, petitioner claims that private respondents did not show that he was
connected with CVSGIC, nor did they prove his specific acts of infringement to make him liable for
damages. Again, this is a factual matter and factual findings of the trial court, concurred in by the Court
of Appeals, are final and binding on this Court.6 Both the courts below found that petitioner had a
copyright over Europress arcuate design and that he consented to the use of said design by CVSGIC.
We are bound by this finding, especially in the absence of a showing that it was tainted with
arbitrariness or palpable error.7 It must be stressed that it was immaterial whether or not petitioner was
connected with CVSGIC. What is relevant is that petitioner had a copyright over the design and that
he allowed the use of the same by CVSGIC.

3.) Lastly, are private respondents entitled to nominal, temperate and exemplary damages and
cancellation of petitioners copyright? Petitioner claims that damages are not due private respondents
and his copyright should not be cancelled because he had not infringed on Levis trademark. Both the
trial court and the Court of Appeals found there was infringement. Thus, the award of damages and
cancellation of petitioners copyright are appropriate.12 Award of damages is clearly provided in Section
23,13 while cancellation of petitioners copyright finds basis on the fact that the design was a mere copy
of that of private respondents trademark. To be entitled to copyright, the thing being copyrighted must
1w phi 1

be original, created by the author through his own skill, labor and judgment, without directly copying
or evasively imitating the work of another.
G.R. No. L-54158 November 19, 1982
PAGASA INDUSTRIAL CORPORATION, petitioner,
vs.
HE HONORABLE COURT OF APPEALS, TIBURCIO S. EVALLE Director of Patents, and
YOSHIDA KOGYO KABUSHIKI KAISHA, respondents.

Facts:

Sometime on November 9, 1961, the Philippines Patent Office issued Certificate of Registration No.
9331 in favor of respondent Kaisha covering the trademark "YKK" for slide fasteners and zippers in
class 41.

On April 27, 1967 or 51/2 years after respondent's registration, petitioner Pagasa filed an
application for registration of exactly the same or Identical trademark of "YKK" for zippers which was
allowed on April 4, 1968.

Alleging that both trademark ("YKK") are confusingly similar, being used on similar products (slide
fasteners or zippers) under the same classification of goods, respondent Kaisha filed with the
Director of Patents a petition for cancellation of petitioner's registration of exactly the same trademark
"YKK".

On May 5, 1977, the Director of Patents, finding the trademark in question "YKK" brand to be
confusingly similar, cancelled Registration in the name of Petitioner Corporation pursuant to Section
4 (d) of R.A No. 166.

The matter was elevated by petitioner to the Court of Appeals which affirmed the decision of the
Director of Patents, and held that the equitable principles of laches, estoppel and acquiescence
would not apply in this case for it has not been shown that Kaisha abandoned the use of the trademark.
CA further dismissed petitioners contention regarding actual commercial use in the Philippines of
the trademark "YKK".

Apart from the issue of estoppel, petitioner claims that Kaisha never acquired ownership of the
trademark, considering that the latter had no proof of actual commercial use of "YKK" trademark in the
Philippines; that the certificate of registration issued to Kaisha is void ab initio for without such
commercial use, no trademark rights accrue; that respondent has not presented any reliable and
competent evidence to show that the sample zippers sent to this country were actually sold here and
sample products are not for sale.

Petitioner likewise asserts that respondent failed to satisfy a condition sine qua non imposed by law,
that is, the two months commercial use of the trademark prior to the filing of' an application for
registration, as provided for in Section 2 of the Trademark Law. Section 2.xxx 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.

Respondent on the other hand, argued that petitioner should have presented clear, positive proof
that Kaisha abandoned the trademark, because there exists already a prima facie evidence of
continuing use by the latter by virtue of its registration.
Issue:

1.) Should the equitable principles of laches, estoppel and acquiescence be applied for lack of
showing that respondent has abandoned the trademark in question and for Pagasa's failure to refute
previous knowledge of its existence and registration.

2.) Did the respondent failed to comply with the required actual commercial use prior to registration?

Held:

We find for the petitioner.

1.) It appears that it was only after more than seven (7) years when respondent sought the cancellation
of the trademark. An unreasonable length of time had already passed before respondent asserted its
right to the trademark. There is a presumption of neglect already amounting to "abandonment" of a
right after a party had remained silent for quite a long time during which petitioner had been openly
using the trademark in question. Such inaction on the part of respondent entitles petitioner to the
equitable principle of laches.

2.) 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 3 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, definite and free from
inconsistencies. 4"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.

A perusal of the pleadings showed no explanation why respondent allowed the use by petitioner of the
trademark under a duly approved application of registration thereof for as long as almost eight (8)
years before filing the instant petition for cancellation. Obviously, respondent wanted goodwill and
a wide market established at the expense of the petitioner but for its benefit. It is precisely the
intention of the law, including a provision on equitable principle to protect only the vigilant, not those
guilty of laches. It is most unfair if at any time, a previous registrant, even after a lapse of more than
five (5) years, can ask for the cancellation of a similar or the same trademark, the registration of which
was never opposed by the prior registrant.
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.

Facts:

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.

Petitioners are foreign corporation with the other two being subsidiaries of Philip Morris. All 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.

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 appropriated.

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.

When the case reach the Court of Appeals, (after having been referred back by SC), CA set aside
RTCs decision and issued the assailed writ of injunction, respondent however move to dissolve the
writ, which was granted by the CA provided a sufficient counter bond was file. Petitioners, in turn, filed
their own motion for re-examination for the reimposition of the writ of preliminary injunction but to no
avail. Hence the petition.

NOTE: The case pending above refers to

Issues:

1.) Whether or not the Petitioners as foreign corporations not engaged in local commerce in the
Philippines can file a petition for the issuance of a writ of preliminary injunction.

2.) Whether the actual use of the registered trademarks in commerce in the Philippines must be
complied with before petitioners may suffer irreparable injury for lifting of the injunction.
Held:

1.) Yes. Sec. 21-A. provides that any foreign corporation 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. The provision however, was qualified by the court in the case La
Chemise Lacoste S.A. vs. Fernandez, stating that , 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 especially so when they
asserted that the main action for infringement is anchored on an isolated transaction.

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.

2.) Yes. Section 2 and 2-a of the Trademark law, provides that 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.

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.

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.
G.R. No. L-26557 February 18, 1970

AMERICAN WIRE & CABLE COMPANY, petitioner,

vs.
DIRECTOR OF PATENTS and CENTRAL BANAHAW INDUSTRIES, respondents.

Facts:

On 2 June 1962, Central Banahaw Industries, Inc., applied with the Director of Patents for
registration of the trademark DYNAFLEX and Device to be used in connection with electric wires,
which mark applicant allegedly had been using since 29 March 1962. The American Wire and
Cable Co., Inc., another domestic corporation and authorized user since 10 April 1958 of the
registered trade mark DURAFLEX and Globe representation, for electric wires, apparatus, machines
and supplies, opposed the application on the ground that applicant's use of the trade mark
DYNAFLEX would cause confusion or result in mistake to purchasers intending to buy DURAFLEX
electric wires and goods, the mark being registered allegedly having practically the same spelling,
pronunciation and sound, and covering the same good, as that of the opposer. Besides, opposer
contended that there has been no continuous use in commerce of the applicant's mark.

After due hearing, the Director of Patents rendered decision holding the applicant's mark
DYNAFLEX not to be similar to the previously registered trademark DURAFLEX. Consequently, the
application of Central Banahaw Industries for registration of DYNAFLEX was given due course and
the opposition thereto by American Wire & Cable Company dismissed. The latter interposed the
present appeal.

Issue:

1.) Whether or not the DYNAFLEX mark would confuse or deceive the buyers and subscribers of the
DURAFLEX brand.

Held:

Yes.

The question is, when is a trademark likely to confuse or cause the public to mistake one for another?
Earlier rulings of the Court seem to indicate its reliance on the dominancy test or the assessment of
the essential or dominant features in the competing labels to determine whether they are confusingly
similar.1 Similarity in size, form, and color, while relevant, is not conclusive. If the competing trademark
contains the main or essential or dominant features of another, and confusion and deception is likely
to result, infringement takes place. Duplication or imitation is not necessary, nor is it necessary that
the infringing label should suggest an effort to imitate

The similarity between the competing trademarks, DURAFLEX and DYNAFLEX, is apparent. Not
only are the initial letters and the last half of the appellations identical, but the difference exists only in
two out of the eight literal elements of the designations.

Indeed, measured against the dominant-feature standard, applicant's mark must be disallowed. For,
undeniably, the dominant and essential feature of the article is the trademark itself. Unlike in the case
of commodities that are ordinarily picked up by the purchaser himself from the grocery or market
counters, electric wires are purchased not by their appearance but by the size (voltage) and length
and, most importantly, by brand. It is even within layman's knowledge that different brands of wire
have different characteristics and properties; and for an essential building item as electric wires and
supplies, the owner of the building would not dare risk his property, perhaps his life, on an unknown
or untested brand. He would only demand for what is recognized to be the best.

Relying on the doctrine enunciated in the Etepha case7 and the earlier ruling in Lim Hoa vs. Director
of Patents,8applicant-appellee contends that the DYNAFLEX mark would not confuse or deceive the
buyers and subscribers of the DURAFLEX brand, because electrical wires are of great value and the
purchasers thereof are generally intelligent the architects, engineers and building contractors. It
must be realized, however, that except perhaps in big constructions, the designing architect or
engineer, or the contractor who will undertake the work of building, does not himself purchase or place
the order for the purchase of the materials to be used therein. The task is oftentimes delegated to
another. Nor are said technical men the ones personally laying down the wiring system in the building
that they could possibly check on whether or not the correct wires are being used. So that even if the
engineer or contractor will specify in the bill of materials the particular brand of wires needed, there is
no certainty that the desired product will be acquired. For, unlike the pharmacists or druggists, the
dispensers of hardware or electrical supplies are not generally known to pay as much concern to the
brand of articles asked for by the customer and of a person who knows the name of the brand but is
not acquainted with it is appearance, the likelihood of the DYNAFLEX product being mistaken for
DURAFLEX is not remote.