MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC.

owners ERNEST & JULIO GALLO or just their surname

vs. E.J. GALLO WINERY and THE ANDRESONS GROUP, INC. GALLO;

FACTS: On April 21, 1993, the Makati RTC denied, for lack of merit,
respondent’s prayer for the issuance of a writ of preliminary injunction.

On March 12, 1993, respondents sued petitioners in the RTC-Makati

for trademark and trade name infringement and unfair competition, with a On August 19, 1993, respondent’s motion for reconsideration was
prayer for damages and preliminary injunction. denied.

They claimed that petitioners adopted the Gallo trademark to ride on On February 20, 1995, the CA likewise dismissed respondent’s petition
Gallo Winery’s and Gallo and Ernest & Julio Gallo trademark’s established for review on certiorari.
reputation and popularity, thus causing confusion, deception and mistake on
the part of the purchasing public who had always associated Gallo and Ernest
and Julio & Gallo trademarks with Gallo Winery’s wines. After the trial on the merits, however, the Makati RTC, on November 26,
1998, held petitioners liable for, permanently enjoined from committing
trademark infringement and unfair competition with respect to the GALLO
In their answer, petitioners alleged, among other affirmative defenses trademark.
that: petitioners Gallo cigarettes and Gallo Winery’s wine were totally
unrelated products. To wit:
On appeal, the CA affirmed the Makati RTC’s decision and
1. Gallo Winery’s GALLO trademark registration certificates
subsequently denied petitioner’s motion for reconsideration.
covered wines only, and not cigarettes;
2. GALLO cigarettes and GALLO wines were sold through
different channels of trade; ISSUE:
3. the target market of Gallo Winery’s wines was the middle
or high-income bracket while Gallo cigarette buyers were
Whether GALLO cigarettes and GALLO wines were identical, similar or
farmers, fishermen, laborers and other low-income workers;
related goods for the reason alone that they were purportedly forms of vice.
4. the dominant feature of the Gallo cigarette was the rooster
device with the manufacturer’s name clearly indicated as
MIGHTY CORPORATION, while in the case of Gallo HELD:
Winery’s wines, it was the full names of the founders-
 Wines and cigarettes are not identical, similar, competing or related
goods.
The petitioners are not liable for trademark infringement, unfair
competition or damages.
In resolving whether goods are related, several factors come into play:
WHEREFORE, petition is granted.
 the business (and its location) to which the goods belong
 the class of product to which the good belong

 the product’s quality, quantity, or size, including the nature of the

package, wrapper or container
 the nature and cost of the articles

 the descriptive properties, physical attributes or essential

characteristics with reference to their form, composition, texture
or quality
 the purpose of the goods

 whether the article is bought for immediate consumption, that is,

day-to-day household items
 the field of manufacture
 the conditions under which the article is usually purchased and

 the articles of the trade through which the goods flow, how they
are distributed, marketed, displayed and sold.

The test of fraudulent simulation is to the likelihood of the deception of

some persons in some measure acquainted with an established design and
desirous of purchasing the commodity with which that design has been
associated. The simulation, in order to be objectionable, must be as appears
likely to mislead the ordinary intelligent buyer who has a need to supply and is
familiar with the article that he seeks to purchase.

[G.R. No. 154342. July 14, 2004]
MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. petitioners,
vs. E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC. respondents.
DECISION
CORONA, J.:
In this petition for review on certiorari under Rule 45, petitioners Mighty Corporation and
La Campana Fabrica de Tabaco, Inc. (La Campana) seek to annul, reverse and set aside: (a)
the November 15, 2001 decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 65175
affirming the November 26, 1998 decision,[2] as modified by the June 24, 1999 order,[3] of the
Regional Trial Court of Makati City, Branch 57 (Makati RTC) in Civil Case No. 93-850, which
held petitioners liable for, and permanently enjoined them from, committing trademark
infringement and unfair competition, and which ordered them to pay damages to respondents
E. & J. Gallo Winery (Gallo Winery) and The Andresons Group, Inc. (Andresons); (b) the July
11, 2002 CA resolution denying their motion for reconsideration[4] and (c) the aforesaid Makati
RTC decision itself.
I.
The Factual Background
Respondent Gallo Winery is a foreign corporation not doing business in the Philippines
but organized and existing under the laws of the State of California, United States of America
(U.S.), where all its wineries are located. Gallo Winery produces different kinds of wines and
brandy products and sells them in many countries under different registered trademarks,
including the GALLO and ERNEST & JULIO GALLO wine trademarks.
Respondent domestic corporation, Andresons, has been Gallo Winerys exclusive wine
importer and distributor in the Philippines since 1991, selling these products in its own name
and for its own account.[5]
Gallo Winerys GALLO wine trademark was registered in the principal register of the
Philippine Patent Office (now Intellectual Property Office) on November 16, 1971 under
Certificate of Registration No. 17021 which was renewed on November 16, 1991 for another
20 years.[6] Gallo Winery also applied for registration of its ERNEST & JULIO GALLO wine
trademark on October 11, 1990 under Application Serial No. 901011-00073599-PN but the
records do not disclose if it was ever approved by the Director of Patents.[7]
On the other hand, petitioners Mighty Corporation and La Campana and their sister
company, Tobacco Industries of the Philippines (Tobacco Industries), are engaged in the
cultivation, manufacture, distribution and sale of tobacco products for which they have been
using the GALLO cigarette trademark since 1973. [8]
The Bureau of Internal Revenue (BIR) approved Tobacco Industries use of GALLO 100s
cigarette mark on September 14, 1973 and GALLO filter cigarette mark on March 26, 1976,
both for the manufacture and sale of its cigarette products. In 1976, Tobacco Industries filed
its manufacturers sworn statement as basis for BIRs collection of specific tax on GALLO
cigarettes.[9]
On February 5, 1974, Tobacco Industries applied for, but eventually did not pursue, the
registration of the GALLO cigarette trademark in the principal register of the then Philippine
Patent Office.[10]
In May 1984, Tobacco Industries assigned the GALLO cigarette trademark to La
Campana which, on July 16, 1985, applied for trademark registration in the Philippine Patent
Office.[11]On July 17, 1985, the National Library issued Certificate of Copyright Registration
No. 5834 for La Campanas lifetime copyright claim over GALLO cigarette labels. [12]
Subsequently, La Campana authorized Mighty Corporation to manufacture and sell
cigarettes bearing the GALLO trademark.[13] BIR approved Mighty Corporations use of
GALLO 100s cigarette brand, under licensing agreement with Tobacco Industries, on May 18,
1988, and GALLO SPECIAL MENTHOL 100s cigarette brand on April 3, 1989.[14]
Petitioners claim that GALLO cigarettes have been sold in the Philippines since 1973,
initially by Tobacco Industries, then by La Campana and finally by Mighty Corporation. [15]
On the other hand, although the GALLO wine trademark was registered in the
Philippines in 1971, respondents claim that they first introduced and sold the GALLO and
ERNEST & JULIO GALLO wines in the Philippines circa 1974 within the then U.S. military
facilities only. By 1979, they had expanded their Philippine market through authorized
distributors and independent outlets.[16]
Respondents claim that they first learned about the existence of GALLO cigarettes in the
latter part of 1992 when an Andresons employee saw such cigarettes on display with GALLO
wines in a Davao supermarket wine cellar section.[17] Forthwith, respondents sent a demand
letter to petitioners asking them to stop using the GALLO trademark, to no avail.
II.
The Legal Dispute
On March 12, 1993, respondents sued petitioners in the Makati RTC for trademark and
tradename infringement and unfair competition, with a prayer for damages and preliminary
injunction.
 Respondents charged petitioners with violating Article 6bis of the Paris Convention for the
Protection of Industrial Property (Paris Convention)[18] and RA 166 (Trademark
Law),[19]specifically, Sections 22 and 23 (for trademark infringement), [20] 29 and 30[21] (for
unfair competition and false designation of origin) and 37 (for tradename
infringement).[22] They claimed that petitioners adopted the GALLO trademark to ride on Gallo
Winerys GALLO and ERNEST & JULIO GALLO trademarks established reputation and
popularity, thus causing confusion, deception and mistake on the part of the purchasing
public who had always associated GALLO and ERNEST & JULIO GALLO trademarks with
Gallo Winerys wines. Respondents prayed for the issuance of a writ of preliminary injunction
and ex parte restraining order, plus P2 million as actual and compensatory damages, at
least P500,000 as exemplary and moral damages, and at least P500,000 as attorneys fees
and litigation expenses.[23]
In their answer, petitioners alleged, among other affirmative defenses, that: petitioners
GALLO cigarettes and Gallo Winerys wines were totally unrelated products; Gallo Winerys
GALLO trademark registration certificate covered wines only, not cigarettes; GALLO
cigarettes and GALLO wines were sold through different channels of trade; GALLO
cigarettes, sold at P4.60 for GALLO filters and P3 for GALLO menthols, were low-cost items
compared to Gallo Winerys high-priced luxury wines which cost between P98 to P242.50; the
target market of Gallo Winerys wines was the middle or high-income bracket with at
least P10,000 monthly income while GALLO cigarette buyers were farmers, fishermen,
laborers and other low-income workers; the dominant feature of the GALLO cigarette mark
was the rooster device with the manufacturers name clearly indicated as MIGHTY
CORPORATION while, in the case of Gallo Winerys wines, it was the full names of the
founders-owners ERNEST & JULIO GALLO or just their surname GALLO; by their inaction
and conduct, respondents were guilty of laches and estoppel; and petitioners acted with
honesty, justice and good faith in the exercise of their right to manufacture and sell GALLO
cigarettes.
In an order dated April 21, 1993,[24] the Makati RTC denied, for lack of merit,
respondents prayer for the issuance of a writ of preliminary injunction, [25] holding that
respondents GALLO trademark registration certificate covered wines only, that respondents
wines and petitioners cigarettes were not related goods and respondents failed to prove
material damage or great irreparable injury as required by Section 5, Rule 58 of the Rules of
Court.[26]
On August 19, 1993, the Makati RTC denied, for lack of merit, respondents motion for
reconsideration. The court reiterated that respondents wines and petitioners cigarettes were
not related goods since the likelihood of deception and confusion on the part of the
consuming public was very remote. The trial court emphasized that it could not rely on foreign
rulings cited by respondents because the[se] cases were decided by foreign courts on the
basis of unknown facts peculiar to each case or upon factual surroundings which may exist
only within their jurisdiction. Moreover, there [was] no showing that [these cases had] been
tested or found applicable in our jurisdiction.[27]
On February 20, 1995, the CA likewise dismissed respondents petition for review on
certiorari, docketed as CA-G.R. No. 32626, thereby affirming the Makati RTCs denial of the
application for issuance of a writ of preliminary injunction against petitioners. [28]
After trial on the merits, however, the Makati RTC, on November 26, 1998, held
petitioners liable for, and permanently enjoined them from, committing trademark
infringement and unfair competition with respect to the GALLO trademark:
WHEREFORE, judgment is rendered in favor of the plaintiff (sic) and against the defendant (sic), to
wit:
a. permanently restraining and enjoining defendants, their distributors, trade outlets, and all persons
acting for them or under their instructions, from (i) using E & Js registered trademark GALLO or any
other reproduction, counterfeit, copy or colorable imitation of said trademark, either singly or in
conjunction with other words, designs or emblems and other acts of similar nature, and (ii) committing
other acts of unfair competition against plaintiffs by manufacturing and selling their cigarettes in the
domestic or export markets under the GALLO trademark.
b. ordering defendants to pay plaintiffs
(i) actual and compensatory damages for the injury and prejudice and impairment of plaintiffs business
and goodwill as a result of the acts and conduct pleaded as basis for this suit, in an amount equal to
10% of FOURTEEN MILLION TWO HUNDRED THIRTY FIVE THOUSAND PESOS
(PHP14,235,000.00) from the filing of the complaint until fully paid;
(ii) exemplary damages in the amount of PHP100,000.00;
(iii) attorneys fees and expenses of litigation in the amount of PHP1,130,068.91;
(iv) the cost of suit.
SO ORDERED.[29]
On June 24, 1999, the Makati RTC granted respondents motion for partial
reconsideration and increased the award of actual and compensatory damages to 10%
of P199,290,000 or P19,929,000.[30]
On appeal, the CA affirmed the Makati RTC decision and subsequently denied
petitioners motion for reconsideration.
III.
The Issues
Petitioners now seek relief from this Court contending that the CA did not follow
prevailing laws and jurisprudence when it held that: [a] RA 8293 (Intellectual Property Code of
the Philippines [IP Code]) was applicable in this case; [b] GALLO cigarettes and GALLO
wines were identical, similar or related goods for the reason alone that they were purportedly
forms of vice; [c] both goods passed through the same channels of trade and [d] petitioners
were liable for trademark infringement, unfair competition and damages.[31]
Respondents, on the other hand, assert that this petition which invokes Rule 45 does not
involve pure questions of law, and hence, must be dismissed outright.
IV.
Discussion
THE EXCEPTIONAL CIRCUMSTANCES
IN THIS CASE OBLIGE THE COURT TO REVIEW
THE CAS FACTUAL FINDINGS
As a general rule, a petition for review on certiorari under Rule 45 must raise only
questions of law[32] (that is, the doubt pertains to the application and interpretation of law to a
certain set of facts) and not questions of fact (where the doubt concerns the truth or
falsehood of alleged facts),[33] otherwise, the petition will be denied. We are not a trier of facts
and the Court of Appeals factual findings are generally conclusive upon us. [34]
This case involves questions of fact which are directly related and intertwined with
questions of law. The resolution of the factual issues concerning the goods similarity, identity,
relation, channels of trade, and acts of trademark infringement and unfair competition is
greatly dependent on the interpretation of applicable laws. The controversy here is not simply
the identity or similarity of both parties trademarks but whether or not infringement or unfair
competition was committed, a conclusion based on statutory interpretation. Furthermore, one
or more of the following exceptional circumstances oblige us to review the evidence on
record:[35]
(1) the conclusion is grounded entirely on speculation, surmises, and conjectures;
(2) the inference of the Court of Appeals from its findings of fact is manifestly
mistaken, absurd and impossible;
(3) there is grave abuse of discretion;
(4) the judgment is based on a misapprehension of facts;
(5) the appellate court, in making its findings, went beyond the issues of the case,
and the same are contrary to the admissions of both the appellant and the
appellee;
(6) the findings are without citation of specific evidence on which they are based;
(7) the facts set forth in the petition as well as in the petitioner's main and reply
briefs are not disputed by the respondents; and
(8) the findings of fact of the Court of Appeals are premised on the absence of
evidence and are contradicted [by the evidence] on record.[36]
In this light, after thoroughly examining the evidence on record, weighing, analyzing and
balancing all factors to determine whether trademark infringement and/or unfair competition
has been committed, we conclude that both the Court of Appeals and the trial court veered
away from the law and well-settled jurisprudence.
Thus, we give due course to the petition.
THE TRADEMARK LAW AND THE PARIS
CONVENTION ARE THE APPLICABLE LAWS,
NOT THE INTELLECTUAL PROPERTY CODE
We note that respondents sued petitioners on March 12, 1993 for trademark
infringement and unfair competition committed during the effectivity of the Paris Convention
and the Trademark Law.
Yet, in the Makati RTC decision of November 26, 1998, petitioners were held liable not
only under the aforesaid governing laws but also under the IP Code which took effect only on
January 1, 1998,[37] or about five years after the filing of the complaint:
Defendants unauthorized use of the GALLO trademark constitutes trademark infringement pursuant to
Section 22 of Republic Act No. 166, Section 155 of the IP Code, Article 6bis of the Paris Convention,
and Article 16 (1) of the TRIPS Agreement as it causes confusion, deception and mistake on the part of
the purchasing public.[38] (Emphasis and underscoring supplied)
The CA apparently did not notice the error and affirmed the Makati RTC decision:
In the light of its finding that appellants use of the GALLO trademark on its cigarettes is likely to
create confusion with the GALLO trademark on wines previously registered and used in the
Philippines by appellee E & J Gallo Winery, the trial court thus did not err in holding that
appellants acts not only violated the provisions of the our trademark laws (R.A. No. 166 and R.A.
Nos. (sic) 8293) but also Article 6bis of the Paris Convention.[39] (Emphasis and underscoring supplied)
We therefore hold that the courts a quo erred in retroactively applying the IP Code in this
case.
It is a fundamental principle that the validity and obligatory force of a law proceed from
the fact that it has first been promulgated. A law that is not yet effective cannot be considered
as conclusively known by the populace. To make a law binding even before it takes effect
may lead to the arbitrary exercise of the legislative power.[40] Nova constitutio futuris formam
imponere debet non praeteritis. A new state of the law ought to affect the future, not the past.
Any doubt must generally be resolved against the retroactive operation of laws, whether
these are original enactments, amendments or repeals.[41] There are only a few instances
when laws may be given retroactive effect,[42] none of which is present in this case.
 The IP Code, repealing the Trademark Law,[43] was approved on June 6, 1997. Section
241 thereof expressly decreed that it was to take effect only on January 1, 1998, without any
provision for retroactive application. Thus, the Makati RTC and the CA should have limited
the consideration of the present case within the parameters of the Trademark Law and the
Paris Convention, the laws in force at the time of the filing of the complaint.
DISTINCTIONS BETWEEN
TRADEMARK INFRINGEMENT
AND UNFAIR COMPETITION
Although the laws on trademark infringement and unfair competition have a common
conception at their root, that is, a person shall not be permitted to misrepresent his goods or
his business as the goods or business of another, the law on unfair competition is broader
and more inclusive than the law on trademark infringement. The latter is more limited but it
recognizes a more exclusive right derived from the trademark adoption and registration by the
person whose goods or business is first associated with it. The law on trademarks is thus a
specialized subject distinct from the law on unfair competition, although the two subjects are
entwined with each other and are dealt with together in the Trademark Law (now, both are
covered by the IP Code). Hence, even if one fails to establish his exclusive property right to a
trademark, he may still obtain relief on the ground of his competitors unfairness or
fraud.Conduct constitutes unfair competition if the effect is to pass off on the public the goods
of one man as the goods of another. It is not necessary that any particular means should be
used to this end.[44]
In Del Monte Corporation vs. Court of Appeals,[45] we distinguished trademark
infringement from unfair competition:
(1) Infringement of trademark is the unauthorized use of a trademark, whereas
unfair competition is the passing off of one's goods as those of another.
(2) In infringement of trademark fraudulent intent is unnecessary, whereas in unfair
competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a
prerequisite to the action, whereas in unfair competition registration is
not necessary.
Pertinent Provisions on Trademark
Infringement under the Paris
Convention and the Trademark Law
Article 6bis of the Paris Convention,[46] an international agreement binding on the
Philippines and the United States (Gallo Winerys country of domicile and origin) prohibits the
[registration] or use of a trademark which constitutes a reproduction, 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 [Paris] Convention and used for identical or similar goods. [This
rule also applies] when the essential part of the mark constitutes a reproduction of any such
well-known mark or an imitation liable to create confusion therewith. There is no time limit for
seeking the prohibition of the use of marks used in bad faith.[47]
Thus, under Article 6bis of the Paris Convention, the following are the elements of
trademark infringement:
(a) registration or use by another person of a trademark which is a reproduction, imitation
or translation liable to create confusion,
(b) of a mark considered by the competent authority of the country of registration or
use[48] to be well-known in that country and is already the mark of a person entitled
to the benefits of the Paris Convention, and
(c) such trademark is used for identical or similar goods.
On the other hand, Section 22 of the Trademark Law holds a person liable for
infringement when, among others, he uses 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
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 imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services.[49] Trademark registration and actual use
are material to the complaining partys cause of action.
Corollary to this, Section 20 of the Trademark Law[50] considers the trademark
registration certificate as prima facie evidence of the validity of the registration, the registrants
ownership and exclusive right to use the trademark in connection with the goods, business or
services as classified by the Director of Patents [51] and as specified in the certificate, subject
to the conditions and limitations stated therein. Sections 2 and 2-A[52] of the Trademark Law
emphasize the importance of the trademarks actual use in commerce in the Philippines prior
to its registration. In the adjudication of trademark rights between contending parties,
equitable principles of laches, estoppel, and acquiescence may be considered and applied. [53]
Under Sections 2, 2-A, 9-A, 20 and 22 of the Trademark Law therefore, the following
constitute the elements of trademark infringement:
(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.
In summary, the Paris Convention protects well-known trademarks only (to be
determined by domestic authorities), while the Trademark Law protects all trademarks,
whether well-known or not, provided that they have been registered and are in actual
commercial use in the Philippines. Following universal acquiescence and comity, in case of
domestic legal disputes on any conflicting provisions between the Paris Convention (which is
an international agreement) and the Trademark law (which is a municipal law) the latter will
prevail.[54]
Under both the Paris Convention and the Trademark Law, the protection of a registered
trademark is limited only to goods identical or similar to those in respect of which such
trademark is registered and only when there is likelihood of confusion. Under both laws, the
time element in commencing infringement cases is material in ascertaining the registrants
express or implied consent to anothers use of its trademark or a colorable imitation
thereof. This is why acquiescence, estoppel or laches may defeat the registrants otherwise
valid cause of action.
Hence, proof of all the elements of trademark infringement is a condition precedent to
any finding of liability.
THE ACTUAL COMMERCIAL USE IN THE
PHILIPPINES OF GALLO CIGARETTE
TRADEMARK PRECEDED THAT OF
GALLO WINE TRADEMARK.
By respondents own judicial admission, the GALLO wine trademark was registered in
the Philippines in November 1971 but the wine itself was first marketed and sold in the
country only in 1974 and only within the former U.S. military facilities, and outside thereof,
only in 1979. To prove commercial use of the GALLO wine trademark in the Philippines,
respondents presented sales invoice no. 29991 dated July 9, 1981 addressed to Conrad
Company Inc., Makati, Philippines and sales invoice no. 85926 dated March 22, 1996
addressed to Andresons Global, Inc., Quezon City, Philippines. Both invoices were for the
sale and shipment of GALLO wines to the Philippines during that period. [55] Nothing at all,
however, was presented to evidence the alleged sales of GALLO wines in the Philippines in
1974 or, for that matter, prior to July 9, 1981.
On the other hand, by testimonial evidence supported by the BIR authorization letters,
forms and manufacturers sworn statement, it appears that petitioners and its predecessor-in-
interest, Tobacco Industries, have indeed been using and selling GALLO cigarettes in the
Philippines since 1973 or before July 9, 1981.[56]
In Emerald Garment Manufacturing Corporation vs. Court of Appeals, [57] we reiterated
our rulings in Pagasa Industrial Corporation vs. Court of Appeals,[58] Converse Rubber
Corporation vs. Universal Rubber Products, Inc.,[59] Sterling Products International, Inc. vs.
Farbenfabriken Bayer Aktiengesellschaft,[60] Kabushi Kaisha Isetan vs. Intermediate Appellate
Court,[61] and Philip Morris vs. Court of Appeals,[62] giving utmost importance to the actual
commercial use of a trademark in the Philippines prior to its registration, notwithstanding the
provisions of the Paris Convention:
xxx xxx xxx
In addition to the foregoing, we are constrained to agree with petitioner's contention that private
respondent failed to prove prior actual commercial use of its LEE trademark in the Philippines
before filing its application for registration with the BPTTT and hence, has not acquired
ownership over said mark.
Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of
ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No.
166) x x x
xxx xxx xxx
The provisions of the 1965 Paris Convention for the Protection of Industrial Property relied upon by
private respondent and Sec. 21-A of the Trademark Law (R.A. No. 166) were sufficiently expounded
upon and qualified in the recent case of Philip Morris, Inc. v. Court of Appeals (224 SCRA 576
[1993]):
xxx xxx xxx
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 (Mortisen 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, 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 irrespective
of lack of business activity in the Philippines on account of Section 21-A of the Trademark Law
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 the 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.
 xxx xxx xxx
Undisputably, private respondent is the senior registrant, having obtained several registration
certificates for its various trademarks LEE, LEE RIDERS, and LEESURES in both the supplemental
and principal registers, as early as 1969 to 1973. However, registration alone will not suffice.
In Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft (27 SCRA 1214
[1969]; Reiterated in Kabushi Isetan vs. Intermediate Appellate Court (203 SCRA 583 [1991]) we
declared:
xxx xxx xxx
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 in the acquisition of the right of
ownership over a trademark.
xxx xxx xxx
The credibility placed on a certificate of registration of one's trademark, or its weight as evidence of
validity, ownership and exclusive use, is qualified. A registration certificate serves merely as prima
facieevidence. It is not conclusive but can and may be rebutted by controverting evidence.
xxx xxx xxx
In the case at bench, however, we reverse the findings of the Director of Patents and the Court of
Appeals. After a meticulous study of the records, we observe that the Director of Patents and the
Court of Appeals relied mainly on the registration certificates as proof of use by private
respondent of the trademark LEE which, as we have previously discussed are not sufficient. We
cannot give credence to private respondent's claim that its LEE mark first reached the
Philippines in the 1960's through local sales by the Post Exchanges of the U.S. Military Bases in
the Philippines (Rollo, p. 177) based as it was solely on the self-serving statements of Mr. Edward
Poste, General Manager of Lee (Phils.), Inc., a wholly owned subsidiary of the H.D. Lee, Co.,
Inc., U.S.A., herein private respondent. (Original Records, p. 52) Similarly, we give little weight
to the numerous vouchers representing various advertising expenses in the Philippines for LEE
products. It is well to note that these expenses were incurred only in 1981 and 1982 by LEE
(Phils.), Inc. after it entered into a licensing agreement with private respondent on 11 May
1981. (Exhibit E)
On the other hand, petitioner has sufficiently shown that it has been in the business of selling jeans
and other garments adopting its STYLISTIC MR. LEE trademark since 1975 as evidenced by
appropriate sales invoices to various stores and retailers. (Exhibit 1-e to 1-o)
Our rulings in Pagasa Industrial Corp. v. Court of Appeals (118 SCRA 526 [1982]) and Converse
Rubber Corp. v. Universal Rubber Products, Inc., (147 SCRA 154 [1987]), respectively, are
instructive:
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 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. 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
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.
xxx xxx xxx
For lack of adequate proof of actual use of its trademark in the Philippines prior to petitioner's
use of its own mark and for failure to establish confusing similarity between said trademarks,
private respondent's action for infringement must necessarily fail. (Emphasis supplied.)
In view of the foregoing jurisprudence and respondents judicial admission that the actual
commercial use of the GALLO wine trademark was subsequent to its registration in 1971 and
to Tobacco Industries commercial use of the GALLO cigarette trademark in 1973, we rule
that, on this account, respondents never enjoyed the exclusive right to use the GALLO wine
trademark to the prejudice of Tobacco Industries and its successors-in-interest, herein
petitioners, either under the Trademark Law or the Paris Convention.
Respondents GALLO trademark
registration is limited to
wines only
We also note that the GALLO trademark registration certificates in the Philippines and in
other countries expressly state that they cover wines only, without any evidence or indication
that registrant Gallo Winery expanded or intended to expand its business to cigarettes.[63]
Thus, by strict application of Section 20 of the Trademark Law, Gallo Winerys exclusive
right to use the GALLO trademark should be limited to wines, the only product indicated in its
registration certificates. This strict statutory limitation on the exclusive right to use trademarks
was amply clarified in our ruling in Faberge, Inc. vs. Intermediate Appellate Court:[64]
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. Inasmuch as petitioner has not ventured in the production of briefs,
an item which is not listed in its certificate of registration, petitioner cannot 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 Sam (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
others for products which are of a 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 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 Newspapers 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).
NO LIKELIHOOD OF CONFUSION, MISTAKE
OR DECEIT AS TO THE IDENTITY OR SOURCE
OF PETITIONERS AND RESPONDENTS
GOODS OR BUSINESS
A crucial issue in any trademark infringement case is the likelihood of confusion, mistake
or deceit as to the identity, source or origin of the goods or identity of the business as a
consequence of using a certain mark. Likelihood of confusion is admittedly a relative term, to
be determined rigidly according to the particular (and sometimes peculiar) circumstances of
each case. Thus, in trademark cases, more than in other kinds of litigation, precedents must
be studied in the light of each particular case. [65]
There are two types of confusion in trademark infringement. The first is confusion of
goods when an otherwise prudent purchaser is induced to purchase one product in the belief
that he is purchasing another, in which case defendants goods are then bought as the
plaintiffs and its poor quality reflects badly on the plaintiffs reputation. The other is confusion
of businesswherein the goods of the parties are different but the defendants product can
reasonably (though mistakenly) be assumed to originate from the plaintiff, thus deceiving the
public into believing that there is some connection between the plaintiff and defendant which,
in fact, does not exist.[66]
In determining the likelihood of confusion, the Court must consider: [a] the resemblance
between the trademarks; [b] the similarity of the goods to which the trademarks are attached;
[c] the likely effect on the purchaser and [d] the registrants express or implied consent and
other fair and equitable considerations.
Petitioners and respondents both use GALLO in the labels of their respective cigarette
and wine products. But, as held in the following cases, the use of an identical mark does not,
by itself, lead to a legal conclusion that there is trademark infringement:
(a) in Acoje Mining Co., Inc. vs. Director of Patent,[67] we ordered the approval of Acoje
Minings application for registration of the trademark LOTUS for its soy sauce even
though Philippine Refining Company had prior registration and use of such identical
mark for its edible oil which, like soy sauce, also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents, [68] we upheld the Patent
Directors registration of the same trademark CAMIA for Ng Sams ham under Class 47,
despite Philippine Refining Companys prior trademark registration and actual use of such
mark on its lard, butter, cooking oil (all of which belonged to Class 47), abrasive
detergents, polishing materials and soaps;
 (c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun Liong, [69] we
dismissed Hickoks petition to cancel private respondents HICKOK trademark
registration for its Marikina shoes as against petitioners earlier registration of the same
trademark for handkerchiefs, briefs, belts and wallets;
(d) in Shell Company of the Philippines vs. Court of Appeals, [70] in a minute resolution, we
dismissed the petition for review for lack of merit and affirmed the Patent Offices
registration of the trademark SHELL used in the cigarettes manufactured by respondent
Fortune Tobacco Corporation, notwithstanding Shell Companys opposition as the prior
registrant of the same trademark for its gasoline and other petroleum products;
(e) in Esso Standard Eastern, Inc. vs. Court of Appeals, [71] we dismissed ESSOs complaint for
trademark infringement against United Cigarette Corporation and allowed the latter to
use the trademark ESSO for its cigarettes, the same trademark used by ESSO for its
petroleum products, and
(f) in Canon Kabushiki Kaisha vs. Court of Appeals and NSR Rubber Corporation,[72] we
affirmed the rulings of the Patent Office and the CA that NSR Rubber Corporation could
use the trademark CANON for its sandals (Class 25) despite Canon Kabushiki Kaishas
prior registration and use of the same trademark for its paints, chemical products, toner
and dyestuff (Class 2).
Whether a trademark causes confusion and is likely to deceive the public hinges on
colorable imitation[73] which has been defined as such similarity in form, content, words,
sound, meaning, special arrangement or general appearance of the trademark or tradename
in their overall presentation or in their essential and substantive and distinctive parts as would
likely mislead or confuse persons in the ordinary course of purchasing the genuine article. [74]
Jurisprudence has developed two tests in determining similarity and likelihood of
confusion in trademark resemblance:[75]
(a) the Dominancy Test applied in Asia Brewery, Inc. vs. Court of Appeals [76] and other
cases,[77] and
(b) the Holistic or Totality Test used in Del Monte Corporation vs. Court of Appeals [78] and its
preceding cases.[79]
The Dominancy Test focuses on the similarity of the prevalent features of the competing
trademarks which might cause confusion or deception, and thus infringement. If the
competing trademark contains the main, essential or dominant features of another, and
confusion or 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 question is whether the use of the marks involved is likely to cause confusion or mistake
in the mind of the public or deceive purchasers.[80]
On the other hand, the Holistic Test requires that the entirety of the marks in question be
considered in resolving confusing similarity. Comparison of words is not the only determining
factor. The trademarks in their entirety as they appear in their respective labels or hang tags
must also be considered in relation to the goods to which they are attached. The discerning
eye of the observer must focus not only on the predominant words but also on the other
features appearing in both labels in order that he may draw his conclusion whether one is
confusingly similar to the other.[81]
In comparing the resemblance or colorable imitation of marks, various factors have been
considered, such as the dominant color, style, size, form, meaning of letters, words, designs
and emblems used, the likelihood of deception of the mark or name's tendency to
confuse[82] and the commercial impression likely to be conveyed by the trademarks if used in
conjunction with the respective goods of the parties.[83]
Applying the Dominancy and Holistic Tests, we find that the dominant feature of the
GALLO cigarette trademark is the device of a large rooster facing left, outlined in black
against a gold background. The roosters color is either green or red green for GALLO
menthols and red for GALLO filters. Directly below the large rooster device is the word
GALLO. The rooster device is given prominence in the GALLO cigarette packs in terms of
size and location on the labels.[84]
The GALLO mark appears to be a fanciful and arbitrary mark for the cigarettes as it has
no relation at all to the product but was chosen merely as a trademark due to the fondness for
fighting cocks of the son of petitioners president. Furthermore, petitioners adopted GALLO,
the Spanish word for rooster, as a cigarette trademark to appeal to one of their target
markets, the sabungeros (cockfight aficionados).[85]
Also, as admitted by respondents themselves,[86] on the side of the GALLO cigarette
packs are the words MADE BY MIGHTY CORPORATION, thus clearly informing the public
as to the identity of the manufacturer of the cigarettes.
On the other hand, GALLO Winerys wine and brandy labels are diverse. In many of
them, the labels are embellished with sketches of buildings and trees, vineyards or a bunch of
grapes while in a few, one or two small roosters facing right or facing each other (atop the
EJG crest, surrounded by leaves or ribbons), with additional designs in green, red and yellow
colors, appear as minor features thereof.[87] Directly below or above these sketches is the
entire printed name of the founder-owners, ERNEST & JULIO GALLO or just their surname
GALLO,[88] which appears in different fonts, sizes, styles and labels, unlike
petitioners uniform casque-font bold-lettered GALLO mark.
Moreover, on the labels of Gallo Winerys wines are printed the words VINTED AND
BOTTLED BY ERNEST & JULIO GALLO, MODESTO, CALIFORNIA.[89]
The many different features like color schemes, art works and other markings of both
products drown out the similarity between them the use of the word GALLO ― a family
surname for the Gallo Winerys wines and a Spanish word for rooster for petitioners
cigarettes.
WINES AND CIGARETTES ARE NOT
IDENTICAL, SIMILAR, COMPETING OR
RELATED GOODS
Confusion of goods is evident where the litigants are actually in competition; but
confusion of business may arise between non-competing interests as well.[90]
Thus, apart from the strict application of Section 20 of the Trademark Law and Article
6bis of the Paris Convention which proscribe trademark infringement not only of goods
specified in the certificate of registration but also of identical or similar goods, we have also
uniformly recognized and applied the modern concept of related goods. [91] Simply stated,
when goods are so related that the public may be, or is actually, deceived and misled that
they come from the same maker or manufacturer, trademark infringement occurs. [92]
Non-competing goods may be those which, though they are not in actual competition,
are so related to each other that it can reasonably be assumed that they originate from one
manufacturer, in which case, confusion of business can arise out of the use of similar
marks.[93] They may also be those which, being entirely unrelated, cannot be assumed to
have a common source; hence, there is no confusion of business, even though similar marks
are used.[94] Thus, there is no trademark infringement if the public does not expect the plaintiff
to make or sell the same class of goods as those made or sold by the defendant. [95]
In resolving whether goods are related,[96] several factors come into play:
(a) the business (and its location) to which the goods belong
(b) the class of product to which the goods belong
(c) the product's quality, quantity, or size, including the nature of the package, wrapper or
container [97]
(d) the nature and cost of the articles[98]
(e) the descriptive properties, physical attributes or essential characteristics with reference to
their form, composition, texture or quality
(f) the purpose of the goods[99]
(g) whether the article is bought for immediate consumption, [100] that is, day-to-day household
items[101]
(h) the fields of manufacture[102]
(i) the conditions under which the article is usually purchased [103]
and
(j) the channels of trade through which the goods flow,[104] how they are distributed, marketed,
displayed and sold.[105]
The wisdom of this approach is its recognition that each trademark infringement case
presents its own unique set of facts. No single factor is preeminent, nor can the presence or
absence of one determine, without analysis of the others, the outcome of an infringement
suit. Rather, the court is required to sift the evidence relevant to each of the criteria. This
requires that the entire panoply of elements constituting the relevant factual landscape be
comprehensively examined.[106] It is a weighing and balancing process. With reference to this
ultimate question, and from a balancing of the determinations reached on all of the factors, a
conclusion is reached whether the parties have a right to the relief sought. [107]
A very important circumstance though is whether there exists a likelihood that an
appreciable number of ordinarily prudent purchasers will be misled, or simply confused, as to
the source of the goods in question.[108] The purchaser is not the completely unwary
consumer but is the ordinarily intelligent buyer considering the type of product
involved.[109] He is accustomed to buy, and therefore to some extent familiar with, the goods
in question. The test of fraudulent simulation is to be found in the likelihood of the deception
of some persons in some measure acquainted with an established design and desirous of
purchasing the commodity with which that design has been associated. The test is not found
in the deception, or the possibility of deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent between that and the
other. The simulation, in order to be objectionable, must be such as appears likely to mislead
the ordinary intelligent buyer who has a need to supply and is familiar with the article that he
seeks to purchase.[110]
Hence, in the adjudication of trademark infringement, we give due regard to the goods
usual purchasers character, attitude, habits, age, training and education. [111]
Applying these legal precepts to the present case, petitioners use of the GALLO
cigarette trademark is not likely to cause confusion or mistake, or to deceive the ordinarily
intelligent buyer of either wines or cigarettes or both as to the identity of the goods, their
source and origin, or identity of the business of petitioners and respondents.
Obviously, wines and cigarettes are not identical or competing products. Neither do they
belong to the same class of goods. Respondents GALLO wines belong to Class 33 under
Rule 84[a] Chapter III, Part II of the Rules of Practice in Trademark Cases while petitioners
GALLO cigarettes fall under Class 34.
We are mindful that product classification alone cannot serve as the decisive factor in
the resolution of whether or not wines and cigarettes 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. But the mere fact that one person has
adopted and used a particular trademark for his goods does not prevent the adoption and use
of the same trademark by others on articles of a different description. [112]
Both the Makati RTC and the CA held that wines and cigarettes are related products
because: (1) they are related forms of vice, harmful when taken in excess, and used for
pleasure and relaxation and (2) they are grouped or classified in the same section of
supermarkets and groceries.
 We find these premises patently insufficient and too arbitrary to support the legal
conclusion that wines and cigarettes are related products within the contemplation of the
Trademark Law and the Paris Convention.
First, anything - not only wines and cigarettes ― can be used for pleasure and relaxation
and can be harmful when taken in excess. Indeed, it would be a grave abuse of discretion to
treat wines and cigarettes as similar or related products likely to cause confusion just
because they are pleasure-giving, relaxing or potentially harmful. Such reasoning makes no
sense.
Second, it is common knowledge that supermarkets sell an infinite variety of wholly
unrelated products and the goods here involved, wines and cigarettes, have nothing
whatsoever in common with respect to their essential characteristics, quality, quantity, size,
including the nature of their packages, wrappers or containers.[113]
Accordingly, the U.S. patent office and courts have consistently held that the mere fact
that goods are sold in one store under the same roof does not automatically mean that
buyers are likely to be confused as to the goods respective sources, connections or
sponsorships. The fact that different products are available in the same store is an insufficient
standard, in and of itself, to warrant a finding of likelihood of confusion. [114]
In this regard, we adopted the Director of Patents finding in Philippine Refining Co., Inc.
vs. Ng Sam and the Director of Patents:[115]
In his decision, the Director of Patents enumerated the factors that set respondents products apart from
the goods of petitioner. He opined and we quote:
I have taken into account such factors as probable purchaser attitude and habits, marketing activities,
retail outlets, and commercial impression likely to be conveyed by the trademarks if used in
conjunction with the respective goods of the parties, I believe that ham on one hand, and lard,
butter, oil, and soap on the other are products that would not move in the same manner through
the same channels of trade. They pertain to unrelated fields of manufacture, might be distributed
and marketed under dissimilar conditions, and are displayed separately even though they
frequently may be sold through the same retail food establishments. Opposers products are
ordinary day-to-day household items whereas ham is not necessarily so. Thus, the goods of the parties
are not of a character which purchasers would likely attribute to a common origin.
The observations and conclusion of the Director of Patents are correct. The particular goods of the
parties are so unrelated that consumers, would not, in any probability mistake one as the source of
origin of the product of the other. (Emphasis supplied).
The same is true in the present case. Wines and cigarettes are non-competing and are
totally unrelated products not likely to cause confusion vis--vis the goods or the business of
the petitioners and respondents.
Wines are bottled and consumed by drinking while cigarettes are packed in cartons or
packages and smoked. There is a whale of a difference between their descriptive properties,
physical attributes or essential characteristics like form, composition, texture and quality.
GALLO cigarettes are inexpensive items while GALLO wines are not. GALLO wines are
patronized by middle-to-high-income earners while GALLO cigarettes appeal only to simple
folks like farmers, fishermen, laborers and other low-income workers.[116] Indeed, the big price
difference of these two products is an important factor in proving that they are in fact
unrelated and that they travel in different channels of trade. There is a distinct price
segmentation based on vastly different social classes of purchasers.[117]
GALLO cigarettes and GALLO wines are not sold through the same channels of
trade. GALLO cigarettes are Philippine-made and petitioners neither claim nor pass off their
goods as imported or emanating from Gallo Winery. GALLO cigarettes are distributed,
marketed and sold through ambulant and sidewalk vendors, small local sari-sari stores and
grocery stores in Philippine rural areas, mainly in Misamis Oriental, Pangasinan, Bohol, and
Cebu.[118] On the other hand, GALLO wines are imported, distributed and sold in the
Philippines through Gallo Winerys exclusive contracts with a domestic entity, which is
currently Andresons. By respondents own testimonial evidence, GALLO wines are sold in
hotels, expensive bars and restaurants, and high-end grocery stores and supermarkets, not
through sari-sari stores or ambulant vendors.[119]
Furthermore, the Makati RTC and the CA erred in relying on Carling Brewing Company
vs. Philip Morris, Inc.[120] to support its finding that GALLO wines and GALLO cigarettes are
related goods. The courts a quo should have taken into consideration the subsequent case
of IDV North America, Inc. and R & A Bailey Co. Limited vs. S & M Brands, Inc.:[121]
IDV correctly acknowledges, however, that there is no per se rule that the use of the same mark on
alcohol and tobacco products always will result in a likelihood of confusion. Nonetheless, IDV relies
heavily on the decision in John Walker & Sons, Ltd. vs. Tampa Cigar Co., 124 F. Supp. 254, 256 (S.D.
Fla. 1954), affd, 222 F. 2d 460 (5th Cir. 1955), wherein the court enjoined the use of the mark
JOHNNIE WALKER on cigars because the fame of the plaintiffs mark for scotch whiskey and because
the plaintiff advertised its scotch whiskey on, or in connection with tobacco products. The court,
in John Walker & Sons, placed great significance on the finding that the infringers use was a
deliberate attempt to capitalize on the senior marks fame. Id. At 256. IDV also relies on Carling
Brewing Co. v. Philip Morris, Inc., 297 F. Supp. 1330, 1338 (N.D. Ga. 1968), in which the court
enjoined the defendants use of the mark BLACK LABEL for cigarettes because it was likely to
cause confusion with the plaintiffs well-known mark BLACK LABEL for beer.
xxx xxx xxx
Those decisions, however, must be considered in perspective of the principle that tobacco
products and alcohol products should be considered related only in cases involving special
circumstances.Schenley Distillers, Inc. v. General Cigar Co., 57C.C.P.A. 1213, 427 F. 2d 783, 785
(1970). The presence of special circumstances has been found to exist where there is a finding of
unfair competition or where a famous or well-known mark is involved and there is a
demonstrated intent to capitalize on that mark. For example, in John Walker & Sons, the court was
persuaded to find a relationship between products, and hence a likelihood of confusion, because of the
plaintiffs long use and extensive advertising of its mark and placed great emphasis on the fact that the
defendant used the trademark Johnnie Walker with full knowledge of its fame and reputation and with
the intention of taking advantage thereof. John Walker & Sons, 124 F. Supp. At 256; see Mckesson &
Robbins, Inc. v. P. Lorillard Co., 1959 WL 5894, 120 U.S.P.Q. 306, 307 (1959) (holding that the
decision in John Walker & Sons was merely the law on the particular case based upon its own peculiar
facts); see also Alfred Dunhill, 350 F. Supp. At 1363 (defendants adoption of Dunhill mark was not
innocent). However, in Schenley, the court noted that the relation between tobacco and whiskey
products is significant where a widely known arbitrary mark has long been used for diversified
products emanating from a single source and a newcomer seeks to use the same mark on unrelated
goods. Schenley, 427 F.2d. at 785. Significantly, in Schenley, the court looked at the industry practice
and the facts of the case in order to determine the nature and extent of the relationship between the
mark on the tobacco product and the mark on the alcohol product.
The record here establishes conclusively that IDV has never advertised BAILEYS liqueurs in
conjunction with tobacco or tobacco accessory products and that IDV has no intent to do so. And,
unlike the defendant in Dunhill, S & M Brands does not market bar accessories, or liqueur related
products, with its cigarettes. The advertising and promotional materials presented a trial in this action
demonstrate a complete lack of affiliation between the tobacco and liqueur products bearing the marks
here at issue.
xxx xxx xxx
Of equal significance, it is undisputed that S & M Brands had no intent, by adopting the family
name Baileys as the mark for its cigarettes, to capitalize upon the fame of the BAILEYS mark for
liqueurs. See Schenley, 427 F. 2d at 785. Moreover, as will be discussed below, and as found
in Mckesson & Robbins, the survey evidence refutes the contention that cigarettes and alcoholic
beverages are so intimately associated in the public mind that they cannot under any
circumstances be sold under the same mark without causing confusion. See Mckesson & Robbins,
120 U.S.P.Q. at 308.
Taken as a whole, the evidence here demonstrates the absence of the special circumstances in which
courts have found a relationship between tobacco and alcohol products sufficient to tip the similarity of
goods analysis in favor of the protected mark and against the allegedly infringing mark. It is true that
BAILEYS liqueur, the worlds best selling liqueur and the second best selling in the United States,
is a well-known product. That fact alone, however, is insufficient to invoke the special
circumstances connection here where so much other evidence and so many other factors disprove
a likelihood of confusion. The similarity of products analysis, therefore, augers against finding
that there is a likelihood of confusion. (Emphasis supplied).
In short, tobacco and alcohol products may be considered related only in cases
involving special circumstances which exist only if a famous mark is involved and there is a
demonstrated intent to capitalize on it. Both of these are absent in the present case.
THE GALLO WINE TRADEMARK IS NOT A
WELL-KNOWN MARK IN THE CONTEXT
OF THE PARIS CONVENTION IN THIS CASE
SINCE WINES AND CIGARETTES ARE NOT
IDENTICAL OR SIMILAR GOODS
First, the records bear out that most of the trademark registrations took place in the late
1980s and the 1990s, that is, after Tobacco Industries use of the GALLO cigarette trademark
in 1973 and petitioners use of the same mark in 1984.
GALLO wines and GALLO cigarettes are neither the same, identical, similar nor related
goods, a requisite element under both the Trademark Law and the Paris Convention.
Second, the GALLO trademark cannot be considered a strong and distinct mark in the
Philippines. Respondents do not dispute the documentary evidence that aside from Gallo
Winerys GALLO trademark registration, the Bureau of Patents, Trademarks and Technology
Transfer also issued on September 4, 1992 Certificate of Registration No. 53356 under the
Principal Register approving Productos Alimenticios Gallo, S.As April 19, 1990 application for
GALLO trademark registration and use for its noodles, prepared food or canned noodles,
ready or canned sauces for noodles, semolina, wheat flour and bread crumbs, pastry,
confectionery, ice cream, honey, molasses syrup, yeast, baking powder, salt, mustard,
vinegar, species and ice.[122]
Third and most important, pursuant to our ruling in Canon Kabushiki Kaisha vs. Court of
Appeals and NSR Rubber Corporation,[123] GALLO cannot be considered a well-known mark
within the contemplation and protection of the Paris Convention in this case since wines and
cigarettes are not identical or similar goods:
We 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 (203 SCRA 59 [1991]). 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 (sic) 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 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
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. (Emphasis supplied.)
Consent of the Registrant and
Other air, Just and Equitable
Considerations
Each trademark infringement case presents a unique problem which must be answered
by weighing the conflicting interests of the litigants.[124]
Respondents claim that GALLO wines and GALLO cigarettes flow through the same
channels of trade, that is, retail trade. If respondents assertion is true, then both goods co-
existed peacefully for a considerable period of time. It took respondents almost 20 years to
know about the existence of GALLO cigarettes and sue petitioners for trademark
infringement. Given, on one hand, the long period of time that petitioners were engaged in the
manufacture, marketing, distribution and sale of GALLO cigarettes and, on the other,
respondents delay in enforcing their rights (not to mention implied consent, acquiescence or
negligence) we hold that equity, justice and fairness require us to rule in favor of
petitioners. The scales of conscience and reason tip far more readily in favor of petitioners
than respondents.
Moreover, there exists no evidence that petitioners employed malice, bad faith or fraud,
or that they intended to capitalize on respondents goodwill in adopting the GALLO mark for
their cigarettes which are totally unrelated to respondents GALLO wines. Thus, we rule out
trademark infringement on the part of petitioners.
PETITIONERS ARE ALSO NOT LIABLE
FOR UNFAIR COMPETITION
Under Section 29 of the Trademark Law, any person who employs deception or any
other means contrary to good faith by which he passes off the goods manufactured by him or
in which he deals, or his business, or services for those of the one having established such
goodwill, or who commits any acts calculated to produce said result, is guilty of unfair
competition. It includes the following acts:
(a) Any person, who in selling his goods shall give them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which
they are contained, or the devices or words thereon, or in any other feature of their appearance, which
would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or
dealer other than the actual manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent
vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means calculated to induce
the false belief that such person is offering the services of another who has identified such services in
the mind of the public;
(c) Any person who shall make any false statement in the course of trade or who shall commit any
other act contrary to good faith of a nature calculated to discredit the goods, business or services of
another.
The universal test question is whether the public is likely to be deceived. Nothing less
than conduct tending to pass off one mans goods or business as that of another constitutes
unfair competition. Actual or probable deception and confusion on the part of customers by
reason of defendants practices must always appear. [125] On this score, we find that petitioners
never attempted to pass off their cigarettes as those of respondents. There is no evidence of
bad faith or fraud imputable to petitioners in using their GALLO cigarette mark.
All told, after applying all the tests provided by the governing laws as well as those
recognized by jurisprudence, we conclude that petitioners are not liable for trademark
infringement, unfair competition or damages.
WHEREFORE, finding the petition for review meritorious, the same is hereby
GRANTED. The questioned decision and resolution of the Court of Appeals in CA-G.R. CV
No. 65175 and the November 26, 1998 decision and the June 24, 1999 order of the Regional
Trial Court of Makati, Branch 57 in Civil Case No. 93-850 are hereby REVERSED and SET
ASIDE and the complaint against petitioners DISMISSED.
Costs against respondents.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
G.R. No. 180677 February 18, 2013
VICTORIO P. DIAZ, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES AND LEVI STRAUSS [PHILS.], INC., Respondents.
DECISION
BERSAMIN, J.:
It is the tendency of the allegedly infringing mark to be confused with the registered
trademark that is the gravamen of the offense of infringement of a registered trademark. The
acquittal of the accused should follow if the allegedly infringing mark is not likely to cause
confusion. Thereby, the evidence of the State does not satisfy the quantum of proof beyond
reasonable doubt.
Accused Victorio P. Diaz (Diaz) appeals the resolutions promulgated on July 17, 2007 1 and
November 22, 2007,2whereby the Court of Appeals (CA), respectively, dismissed his appeal
in C.A.-G.R. CR No. 30133 for the belated filing of the appellant's brief, and denied his motion
for reconsideration. Thereby, the decision rendered on February 13, 2006 in Criminal Case
No. 00-0318 and Criminal Case No. 00-0319 by the Regional Trial Court, Branch 255, in Las
Pifias City (RTC) convicting him for two counts of infringement of trademark were affirmed. 3
Antecedents
On February 10, 2000, the Department of Justice filed two informations in the RTC of Las
Piñas City, charging Diaz with violation of Section 155, in relation to Section 170, of Republic
Act No. 8293, also known as the Intellectual Property Code of the Philippines (Intellectual
Property Code), to wit:
Criminal Case No. 00-0318
That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within
the jurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to
defraud Levi’s Strauss (Phil.) Inc. (hereinafter referred to as LEVI’S), did then and there,
willfully, unlawfully, feloniously, knowingly and intentionally engaged in commerce by
reproducing, counterfeiting, copying and colorably imitating Levi’s registered trademarks or
dominant features thereof such as the ARCUATE DESIGN, TWO HORSE BRAND, TWO
HORSE PATCH, TWO HORSE LABEL WITH PATTERNED ARCUATE DESIGN, TAB AND
COMPOSITE ARCUATE/TAB/TWO HORSE PATCH, and in connection thereto, sold, offered
for sale, manufactured, distributed counterfeit patches and jeans, including other preparatory
steps necessary to carry out the sale of said patches and jeans, which likely caused
confusion, mistake, and /or deceived the general consuming public, without the consent,
permit or authority of the registered owner, LEVI’S, thus depriving and defrauding the latter of
its right to the exclusive use of its trademarks and legitimate trade, to the damage and
prejudice of LEVI’S.
CONTRARY TO LAW.4
Criminal Case No. 00-0319
That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within
the jurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to
defraud Levi’s Strauss (Phil.) Inc. (hereinafter referred to as LEVI’S), did then and there,
willfully, unlawfully, feloniously, knowingly and intentionally engaged in commerce by
reproducing, counterfeiting, copying and colorably imitating Levi’s registered trademarks or
dominant features thereof such as the ARCUATE DESIGN, TWO HORSE BRAND, TWO
HORSE PATCH, TWO HORSE LABEL WITH PATTERNED ARCUATE DESIGN, TAB AND
COMPOSITE ARCUATE/TAB/TWO HORSE PATCH, and in connection thereto, sold, offered
for sale, manufactured, distributed counterfeit patches and jeans, including other preparatory
steps necessary to carry out the sale of said patches and jeans, which likely caused
confusion, mistake, and /or deceived the general consuming public, without the consent,
permit or authority of the registered owner, LEVI’S, thus depriving and defrauding the latter of
its right to the exclusive use of its trademarks and legitimate trade, to the damage and
prejudice of LEVI’S.
CONTRARY TO LAW.5
The cases were consolidated for a joint trial. Diaz entered his pleas of not guilty to each
information on June 21, 2000.6
1.
Evidence of the Prosecution
Levi Strauss and Company (Levi’s), a foreign corporation based in the State of Delaware,
United States of America, had been engaged in the apparel business. It is the owner of
trademarks and designs of Levi’s jeans like LEVI’S 501, the arcuate design, the two-horse
brand, the two-horse patch, the two-horse patch with pattern arcuate, and the composite tab
arcuate. LEVI’S 501 has the following registered trademarks, to wit: (1) the leather patch
showing two horses pulling a pair of pants; (2) the arcuate pattern with the inscription "LEVI
STRAUSS & CO;" (3) the arcuate design that refers to "the two parallel stitching curving
downward that are being sewn on both back pockets of a Levi’s Jeans;" and (4) the tab or
piece of cloth located on the structural seam of the right back pocket, upper left side. All these
trademarks were registered in the Philippine Patent Office in the 1970’s, 1980’s and early part
of 1990’s.7
Levi Strauss Philippines, Inc. (Levi’s Philippines) is a licensee of Levi’s. After receiving
information that Diaz was selling counterfeit LEVI’S 501 jeans in his tailoring shops in
Almanza and Talon, Las Piñas City, Levi’s Philippines hired a private investigation group to
verify the information. Surveillance and the purchase of jeans from the tailoring shops of Diaz
established that the jeans bought from the tailoring shops of Diaz were counterfeit or
imitations of LEVI’S 501. Levi’s Philippines then sought the assistance of the National Bureau
of Investigation (NBI) for purposes of applying for a search warrant against Diaz to be served
at his tailoring shops. The search warrants were issued in due course. Armed with the search
warrants, NBI agents searched the tailoring shops of Diaz and seized several fake LEVI’S
501 jeans from them. Levi’s Philippines claimed that it did not authorize the making and
selling of the seized jeans; that each of the jeans were mere imitations of genuine LEVI’S 501
jeans by each of them bearing the registered trademarks, like the arcuate design, the tab,
and the leather patch; and that the seized jeans could be mistaken for original LEVI’S 501
jeans due to the placement of the arcuate, tab, and two-horse leather patch.8
2.
Evidence of the Defense
On his part, Diaz admitted being the owner of the shops searched, but he denied any criminal
liability.
Diaz stated that he did not manufacture Levi’s jeans, and that he used the label "LS Jeans
Tailoring" in the jeans that he made and sold; that the label "LS Jeans Tailoring" was
registered with the Intellectual Property Office; that his shops received clothes for sewing or
repair; that his shops offered made-to-order jeans, whose styles or designs were done in
accordance with instructions of the customers; that since the time his shops began operating
in 1992, he had received no notice or warning regarding his operations; that the jeans he
produced were easily recognizable because the label "LS Jeans Tailoring," and the names of
the customers were placed inside the pockets, and each of the jeans had an "LSJT" red tab;
that "LS" stood for "Latest Style;" and that the leather patch on his jeans had two buffaloes,
not two horses.9
Ruling of the RTC
On February 13, 2006, the RTC rendered its decision finding Diaz guilty as charged,
disposing thus:
WHEREFORE, premises considered, the Court finds accused Victorio P. Diaz, a.k.a. Vic
Diaz, GUILTY beyond reasonable doubt of twice violating Sec. 155, in relation to Sec. 170, of
RA No. 8293, as alleged in the Informations in Criminal Case Nos. 00-0318 & 00-0319,
respectively, and hereby sentences him to suffer in each of the cases the penalty of
imprisonment of TWO (2) YEARS of prision correcional, as minimum, up to FIVE (5) YEARS
of prision correcional, as maximum, as well as pay a fine of ₱50,000.00 for each of the herein
cases, with subsidiary imprisonment in case of insolvency, and to suffer the accessory
penalties provided for by law.
Also, accused Diaz is hereby ordered to pay to the private complainant Levi’s Strauss
(Phils.), Inc. the following, thus:
1. ₱50,000.00 in exemplary damages; and
2. ₱222,000.00 as and by way of attorney’s fees.
Costs de officio.
SO ORDERED.10
Ruling of the CA
Diaz appealed, but the CA dismissed the appeal on July 17, 2007 on the ground that Diaz
had not filed his appellant’s brief on time despite being granted his requested several
extension periods.
Upon denial of his motion for reconsideration, Diaz is now before the Court to plead for his
acquittal.
Issue
Diaz submits that:
THE COURT OF APPEALS VIOLATED EXISTING LAW AND JURISPRUDENCE WHEN IT
APPLIED RIGIDLY THE RULE ON TECHNICALITIES AND OVERRIDE SUBSTANTIAL
JUSTICE BY DISMISSING THE APPEAL OF THE PETITIONER FOR LATE FILING OF
APPELLANT’S BRIEF.11
Ruling
The Court first resolves whether the CA properly dismissed the appeal of Diaz due to the late
filing of his appellant’s brief.
Under Section 7, Rule 44 of the Rules of Court, the appellant is required to file the appellant’s
brief in the CA "within forty-five (45) days from receipt of the notice of the clerk that all the
evidence, oral and documentary, are attached to the record, seven (7) copies of his legibly
typewritten, mimeographed or printed brief, with proof of service of two (2) copies thereof
upon the appellee." Section 1(e) of Rule 50 of the Rules of Court grants to the CA the
discretion to dismiss an appeal either motu proprio or on motion of the appellee should the
appellant fail to serve and file the required number of copies of the appellant’s brief within the
time provided by the Rules of Court.12
The usage of the word may in Section 1(e) of Rule 50 indicates that the dismissal of the
appeal upon failure to file the appellant’s brief is not mandatory, but discretionary. Verily, the
failure to serve and file the required number of copies of the appellant’s brief within the time
provided by the Rules of Court does not have the immediate effect of causing the outright
dismissal of the appeal. This means that the discretion to dismiss the appeal on that basis is
lodged in the CA, by virtue of which the CA may still allow the appeal to proceed despite the
late filing of the appellant’s brief, when the circumstances so warrant its liberality. In deciding
to dismiss the appeal, then, the CA is bound to exercise its sound discretion upon taking all
the pertinent circumstances into due consideration.
The records reveal that Diaz’s counsel thrice sought an extension of the period to file the
appellant’s brief. The first time was on March 12, 2007, the request being for an extension of
30 days to commence on March 11, 2007. The CA granted his motion under its resolution of
March 21, 2007. On April 10, 2007, the last day of the 30-day extension, the counsel filed
another motion, seeking an additional 15 days. The CA allowed the counsel until April 25,
2007 to serve and file the appellant’s brief. On April 25, 2007, the counsel went a third time to
the CA with another request for 15 days. The CA still granted such third motion for extension,
giving the counsel until May 10, 2007. Notwithstanding the liberality of the CA, the counsel
did not literally comply, filing the appellant’s brief only on May 28, 2007, which was the 18th
day beyond the third extension period granted.
Under the circumstances, the failure to file the appellant’s brief on time rightly deserved the
outright rejection of the appeal. The acts of his counsel bound Diaz like any other client. It
was, of course, only the counsel who was well aware that the Rules of Court fixed the periods
to file pleadings and equally significant papers like the appellant’s brief with the lofty objective
of avoiding delays in the administration of justice.
Yet, we have before us an appeal in two criminal cases in which the appellant lost his chance
to be heard by the CA on appeal because of the failure of his counsel to serve and file the
appellant’s brief on time despite the grant of several extensions the counsel requested. Diaz
was convicted and sentenced to suffer two indeterminate sentences that would require him to
spend time in detention for each conviction lasting two years, as minimum, to five years, as
maximum, and to pay fines totaling ₱100,000.00 (with subsidiary imprisonment in case of his
insolvency). His personal liberty is now no less at stake. This reality impels us to look beyond
the technicality and delve into the merits of the case to see for ourselves if the appeal, had it
not been dismissed, would have been worth the time of the CA to pass upon. After all, his
appellant’s brief had been meanwhile submitted to the CA. While delving into the merits of the
case, we have uncovered a weakness in the evidence of guilt that cannot be simply ignored
and glossed over if we were to be true to our oaths to do justice to everyone.
We feel that despite the CA being probably right in dismissing the excuses of oversight and
excusable negligence tendered by Diaz’s counsel to justify the belated filing of the appellant’s
brief as unworthy of serious consideration, Diaz should not be made to suffer the dire
consequence. Any accused in his shoes, with his personal liberty as well as his personal
fortune at stake, expectedly but innocently put his fullest trust in his counsel’s abilities and
professionalism in the handling of his appeal. He thereby delivered his fate to the hands of his
counsel. Whether or not those hands were efficient or trained enough for the job of handling
the appeal was a learning that he would get only in the end. Likelier than not, he was
probably even unaware of the three times that his counsel had requested the CA for
extensions. If he were now to be left to his unwanted fate, he would surely suffer despite his
innocence. How costly a learning it would be for him! That is where the Court comes in. It is
most important for us as dispensers of justice not to allow the inadvertence or incompetence
of any counsel to result in the outright deprivation of an appellant’s right to life, liberty or
property.13
We do not mind if this softening of judicial attitudes be mislabeled as excessive leniency. With
so much on the line, the people whose futures hang in a balance should not be left to suffer
from the incompetence, mindlessness or lack of professionalism of any member of the Law
Profession. They reasonably expect a just result in every litigation. The courts must give them
that just result. That assurance is the people’s birthright. Thus, we have to undo Diaz’s dire
fate.
Even as we now set aside the CA’s rejection of the appeal of Diaz, we will not remand the
records to the CA for its review. In an appeal of criminal convictions, the records are laid open
for review. To avoid further delays, therefore, we take it upon ourselves to review the records
and resolve the issue of guilt, considering that the records are already before us.
Section 155 of R.A. No. 8293 defines the acts that constitute infringement of trademark, viz:
Remedies; Infringement. — Any person who shall, without the consent of the owner of the
registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant feature thereof in connection with the
sale, offering for sale, distribution, advertising of any goods or services including other
preparatory steps necessary to carry out the sale of any goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to
deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant
feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be used in
commerce upon or in connection with the sale, offering for sale, distribution, or advertising of
goods or services on or in connection with which such use is likely to cause confusion, or to
cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant
for the remedies hereinafter set forth: Provided, That the infringement takes place at the
moment any of the acts stated in Subsection 155.1 or this subsection are committed
regardless of whether there is actual sale of goods or services using the infringing material.
The elements of the offense of trademark infringement under the Intellectual Property
Code are, therefore, the following:
1. The trademark being infringed is registered in the Intellectual Property Office;
2. The trademark is reproduced, counterfeited, copied, or colorably imitated by the
infringer;
3. The infringing mark is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark is applied to
labels, signs, prints, packages, wrappers, receptacles or advertisements intended to
be used upon or in connection with such goods, business or services;
4. The use or application of the infringing mark is likely to cause confusion or mistake
or to deceive purchasers or others as to the goods or services themselves or as to
the source or origin of such goods or services or the identity of such business; and
5. The use or application of the infringing mark is without the consent of the
trademark owner or the assignee thereof.14
As can be seen, the likelihood of confusion is the gravamen of the offense of trademark
infringement.15 There are two tests to determine likelihood of confusion, namely: the
dominancy test, and the holistic test. The contrasting concept of these tests was explained
in Societes Des Produits Nestle, S.A. v. Dy, Jr., thus:
x x x. The dominancy test focuses on the similarity of the main, prevalent or essential
features of the competing trademarks that might cause confusion. Infringement takes place
when the competing trademark contains the essential features of another. Imitation or an
effort to imitate is unnecessary. The question is whether the use of the marks is likely to
cause confusion or deceive purchasers.
The holistic test considers the entirety of the marks, including labels and packaging, in
determining confusing similarity. The focus is not only on the predominant words but also on
the other features appearing on the labels.16
As to what test should be applied in a trademark infringement case, we said in McDonald’s
Corporation v. Macjoy Fastfood Corporation17 that:
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar
to another, no set rules can be deduced because each case must be decided on its merits. In
such cases, even more than in any other litigation, precedent must be studied in the light of
the facts of the particular case. That is the reason why in trademark cases, jurisprudential
precedents should be applied only to a case if they are specifically in point.
The case of Emerald Garment Manufacturing Corporation v. Court of Appeals,18 which
involved an alleged trademark infringement of jeans products, is worth referring to. There,
H.D. Lee Co., Inc. (H.D. Lee), a corporation based in the United States of America, claimed
that Emerald Garment’s trademark of "STYLISTIC MR. LEE" that it used on its jeans products
was confusingly similar to the "LEE" trademark that H.D. Lee used on its own jeans products.
Applying the holistic test, the Court ruled that there was no infringement.
The holistic test is applicable here considering that the herein criminal cases also involved
trademark infringement in relation to jeans products. Accordingly, the jeans trademarks of
Levi’s Philippines and Diaz must be considered as a whole in determining the likelihood of
confusion between them. The maong pants or jeans made and sold by Levi’s Philippines,
which included LEVI’S 501, were very popular in the Philippines. The consuming public knew
that the original LEVI’S 501 jeans were under a foreign brand and quite expensive. Such
jeans could be purchased only in malls or boutiques as ready-to-wear items, and were not
available in tailoring shops like those of Diaz’s as well as not acquired on a "made-to-order"
basis. Under the circumstances, the consuming public could easily discern if the jeans were
original or fake LEVI’S 501, or were manufactured by other brands of jeans. Confusion and
deception were remote, for, as the Court has observed in Emerald Garments:
First, the products involved in the case at bar are, in the main, various kinds of jeans. These
are not your ordinary household items like catsup, soy sauce or soap which are of minimal
cost. Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is predisposed
to be more cautious and discriminating in and would prefer to mull over his purchase.
Confusion and deception, then, is less likely. In Del Monte Corporation v. Court of
Appeals, we noted that:
.... Among these, what essentially determines the attitudes of the purchaser, specifically his
inclination to be cautious, is the cost of the goods. To be sure, a person who buys a box of
candies will not exercise as much care as one who buys an expensive watch. As a general
rule, an ordinary buyer does not exercise as much prudence in buying an article for which he
pays a few centavos as he does in purchasing a more valuable thing. Expensive and valuable
items are normally bought only after deliberate, comparative and analytical investigation. But
mass products, low priced articles in wide use, and matters of everyday purchase requiring
frequent replacement are bought by the casual consumer without great care....
Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He
does not ask the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even
an Armani. He is, therefore, more or less knowledgeable and familiar with his preference and
will not easily be distracted.
Finally, in line with the foregoing discussions, more credit should be given to the "ordinary
purchaser." Cast in this particular controversy, the ordinary purchaser is not the "completely
unwary consumer" but is the "ordinarily intelligent buyer" considering the type of product
involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok is better suited to the present case.
There, the "ordinary purchaser" was defined as one "accustomed to buy, and therefore to
some extent familiar with, the goods in question. The test of fraudulent simulation is to be
found in the likelihood of the deception of some persons in some measure acquainted with an
established design and desirous of purchasing the commodity with which that design has
been associated. The test is not found in the deception, or the possibility of deception, of the
person who knows nothing about the design which has been counterfeited, and who must be
indifferent between that and the other. The simulation, in order to be objectionable, must be
such as appears likely to mislead the ordinary intelligent buyer who has a need to supply and
is familiar with the article that he seeks to purchase.19
Diaz used the trademark "LS JEANS TAILORING" for the jeans he produced and sold
in his tailoring shops. His trademark was visually and aurally different from the
trademark "LEVI STRAUSS & CO" appearing on the patch of original jeans under the
trademark LEVI’S 501. The word "LS" could not be confused as a derivative from "LEVI
STRAUSS" by virtue of the "LS" being connected to the word "TAILORING", thereby
openly suggesting that the jeans bearing the trademark "LS JEANS TAILORING" came
or were bought from the tailoring shops of Diaz, not from the malls or boutiques
selling original LEVI’S 501 jeans to the consuming public.
In terms of classes of customers and channels of trade, the jeans products of the private
complainant and the accused cater to different classes of customers and flow through the
different channels of trade. The customers of the private complainant are mall goers
belonging to class A and B market group – while that of the accused are those who belong to
class D and E market who can only afford Php 300 for a pair of made-toorder pants.20 x x x.
Moreover, based on the certificate issued by the Intellectual Property Office, "LS JEANS
TAILORING" was a registered trademark of Diaz. He had registered his trademark prior to the
filing of the present cases.21 The Intellectual Property Office would certainly not have allowed
the registration had Diaz’s trademark been confusingly similar with the registered trademark
for LEVI’S 501 jeans.
Given the foregoing, it should be plain that there was no likelihood of confusion between the
trademarks involved. Thereby, the evidence of guilt did not satisfy the quantum of proof
required for a criminal conviction, which is proof beyond reasonable doubt. According to
Section 2, Rule 133 of the Rules of Court, proof beyond a reasonable doubt does not mean
such a degree of proof as, excluding possibility of error, produces absolute certainty. Moral
certainty only is required, or that degree of proof which produces conviction in an
unprejudiced mind. Consequently, Diaz should be acquitted of the charges.
WHEREFORE, the Court ACQUITS petitioner VICTORIO P. DIAZ of the crimes of
infringement of trademark charged in Criminal Case No. 00-0318 and Criminal Case No. 00-
0319 for failure of the State to establish his guilt by proof beyond reasonable doubt.
No pronouncement on costs of suit.
SO ORDERED.

There were other remarkable differences between the two trademarks that the consuming
public would easily perceive. Diaz aptly noted such differences, as follows:

The prosecution also alleged that the accused copied the "two horse design" of the
petitioner-private complainant but the evidence will show that there was no such design in the
seized jeans. Instead, what is shown is "buffalo design." Again, a horse and a buffalo are
two different animals which an ordinary customer can easily distinguish. x x x.

The prosecution further alleged that the red tab was copied by the accused. However,
evidence will show that the red tab used by the private complainant indicates the word
"LEVI’S" while that of the accused indicates the letters "LSJT" which means LS JEANS
TAILORING. Again, even an ordinary customer can distinguish the word LEVI’S from the
letters LSJT.

xxxx
 4. The person claiming must be the owner of the mark.
G.R. No. L-75420 November 15, 1991

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

commerce in the Philippines is a prerequisite to the acquisition of
ownership over a trademark or a trade name.
 A prior registrant cannot claim exclusive use of the trademark unless it
uses it in commerce.
 The records show that the petitioner has never conducted any business in
the Philippines. I t has never promoted its tradename or trademark in
the Philippines. It has absolutely no business goodwill in the
Philippines. I t is unknown to Filipinos except the very few who may
have noticed it while travelling abroad. I t 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 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, even though such adoption is publicly
declared, such as by use of the name in advertisements, circulars,
price lists, and on signs and stationery.
 The Paris Convention for the Protection of Industrial Property does not
automatically exclude all countries of the world that have signed it from
using a trade name which happens to be used in one country.
 Conditions which must exist before any trademark owner can claim and be
afforded rights:
1. the mark must be internationally known or well known;
2. the subject of the right must be a trademark, not a patent or
copyright or anything else;
3. the mark must be for use in the same or similar kinds of goods,
and

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)
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 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
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.
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)"
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 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]; 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;
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.
Francisco Joaquin, Jr. vs Franklin
Drilon [G.R. No. 108946. January 28, 1999]
BJ Productions Inc. (BJPI) was the holder of copyright over the show Rhoda and Me.
It holds rights over the show’s format and style of presentation. In 1991, BJPI’s
president Francisco Joaquin saw on TV – RPN 9’s show It’s a Date, a show which is
basically the same as Rhoda and Me. He eventually sued Gabriel Zosa, the manager
of the show It’s a Date. The investigating prosecutor found probable cause against
Zosa. Zosa later sought a review of the prosecutor’s resolution before the Secretary of
Justice (Franklin Drilon). Drilon reversed the findings of the fiscal and directed him
to dismiss the case against Zosa.

ISSUE: Whether or not the order of Drilon finding no probable cause is valid.

HELD: Yes. The essence of copyright infringement is the copying, in whole or in

part, of copyrightable materials as defined and enumerated in Section 2 of PD. No. 49
(Copyright Law). Apart from the manner in which it is actually expressed, however,
the idea of a dating game show is a non-copyrightable material. Ideas, concepts,
formats, or schemes in their abstract form clearly do not fall within the class of
works or materials susceptible of copyright registration as provided in PD. No.
49. What is covered by BJPI’s copyright is the specific episodes of the show Rhoda
and Me.

Further, BJPI should have presented the master videotape of the show in order to
show the linkage between the copyright show (Rhoda and Me) and the infringing
show (It’s a Date). This is based on the ruling in 20th Century Fox vs CA (though this
has been qualified by Columbia Pictures vs CA, this is still good law). Though BJPI
did provide a lot of written evidence and description to show the linkage between the
shows, the same were not enough. A television show includes more than mere words
can describe because it involves a whole spectrum of visuals and effects, video and
audio, such that no similarity or dissimilarity may be found by merely describing the
general copyright/format of both dating game shows.
FRANCISCO G. JOAQUIN, JR., and BJ PRODUCTIONS, INC., petitioners, vs. FRANKLIN
DRILON GABRIEL ZOSA, WILLIAM ESPOSO, FELIPE MEDINA, JR., and CASEY
FRANCISCO, respondents.
DECISION
MENDOZA, J.:
This is a petition for certiorari. Petitioners seek to annul the resolution of the Department
of Justice, dated August 12, 1992, in Criminal Case No. Q-92-27854, entitled Gabriel Zosa, et
al. v. City Prosecutor of Quezon City and Francisco Joaquin, Jr., and its resolution, dated
December 3, 1992, denying petitioner Joaquins motion for reconsideration.
Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of Copyright No.
M922, dated January 28, 1971, of Rhoda and Me, a dating game show aired from 1970 to
1977.
On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its
certificate of copyright specifying the shows format and style of presentation.
On July 14, 1991, while watching television, petitioner Francisco Joaquin, Jr., president
of BJPI, saw on RPN Channel 9 an episode of Its a Date, which was produced by IXL
Productions, Inc. (IXL). On July 18, 1991, he wrote a letter to private respondent Gabriel M.
Zosa, president and general manager of IXL, informing Zosa that BJPI had a copyright
to Rhoda and Me and demanding that IXL discontinue airing Its a Date.
In a letter, dated July 19, 1991, private respondent Zosa apologized to petitioner Joaquin
and requested a meeting to discuss a possible settlement. IXL, however, continued airing Its
a Date, prompting petitioner Joaquin to send a second letter on July 25, 1991 in which he
reiterated his demand and warned that, if IXL did not comply, he would endorse the matter to
his attorneys for proper legal action.
Meanwhile, private respondent Zosa sought to register IXLs copyright to the first episode
of Its a Date for which it was issued by the National Library a certificate of copyright on
August 14, 1991.
Upon complaint of petitioners, an information for violation of P.D. No. 49 was filed
against private respondent Zosa together with certain officers of RPN Channel 9,
namely, William Esposo, Felipe Medina, and Casey Francisco, in the Regional Trial Court of
Quezon City where it was docketed as Criminal Case No. 92-27854 and assigned to Branch
104 thereof. However, private respondent Zosa sought a review of the resolution of the
Assistant City Prosecutor before the Department of Justice.
On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon reversed the
Assistant City Prosecutors findings and directed him to move for the dismissal of the case
against private respondents. [1]
Petitioner Joaquin filed a motion for reconsideration, but his motion was denied by
respondent Secretary of Justice on December 3, 1992. Hence, this petition. Petitioners
contend that:
1. The public respondent gravely abused his discretion amounting to lack of
jurisdiction when he invoked non-presentation of the master tape as being fatal
to the existence of probable cause to prove infringement, despite the fact that
private respondents never raised the same as a controverted issue.
2. The public respondent gravely abused his discretion amounting to lack of
jurisdiction when he arrogated unto himself the determination of what is
copyrightable - an issue which is exclusively within the jurisdiction of the regional
trial court to assess in a proper proceeding.
Both public and private respondents maintain that petitioners failed to establish the
existence of probable cause due to their failure to present the copyrighted master videotape
of Rhoda and Me. They contend that petitioner BJPIs copyright covers only a specific episode
of Rhoda and Me and that the formats or concepts of dating game shows are not covered by
copyright protection under P. D. No. 49.
Non-Assignment of Error
Petitioners claim that their failure to submit the copyrighted master videotape of the
television show Rhoda and Me was not raised in issue by private respondents during the
preliminary investigation and, therefore, it was error for the Secretary of Justice to reverse the
investigating prosecutors finding of probable cause on this ground.
A preliminary investigation falls under the authority of the state prosecutor who is given
by law the power to direct and control criminal actions.[2] He is, however, subject to the control
of the Secretary of Justice. Thus, Rule 112, 4 of the Revised Rules of Criminal Procedure,
provides:
SEC. 4. Duty of investigating fiscal. - If the investigating fiscal finds cause to hold
the respondent for trial, he shall prepare the resolution and corresponding
information. He shall certify under oath that he, or as shown by the record, an
authorized officer, has personally examined the complainant and his witnesses, that
there is reasonable ground to believe that a crime has been committed and that the
accused is probably guilty thereof, that the accused was informed of the complaint
and of the evidence submitted against him and that he was given an opportunity to
submit controverting evidence.Otherwise, he shall recommend dismissal of the
complaint.
In either case, he shall forward the records of the case to the provincial or city
fiscal or chief state prosecutor within five (5) days from his resolution. The latter shall
 take appropriate action thereon within ten (10) days from receipt thereof, immediately
informing the parties of said action.
No complaint or information may be filed or dismissed by an investigating fiscal
without the prior written authority or approval of the provincial or city fiscal or chief
state prosecutor.
Where the investigating assistant fiscal recommends the dismissal of the case
but his findings are reversed by the provincial or city fiscal or chief state prosecutor
on the ground that a probable cause exists, the latter may, by himself, file the
corresponding information against the respondent or direct any other assistant fiscal
or state prosecutor to do so, without conducting another preliminary investigation.
If upon petition by a proper party, the Secretary of Justice reverses the resolution
of the provincial or city fiscal or chief state prosecutor, he shall direct the fiscal
concerned to file the corresponding information without conducting another
preliminary investigation or to dismiss or move for dismissal of the complaint or
information.
In reviewing resolutions of prosecutors, the Secretary of Justice is not precluded from
considering errors, although unassigned, for the purpose of determining whether there is
probable cause for filing cases in court. He must make his own finding of probable cause and
is not confined to the issues raised by the parties during preliminary investigation. Moreover,
his findings are not subject to review unless shown to have been made with grave abuse.
Opinion of the Secretary of Justice
Petitioners contend, however, that the determination of the question whether the format
or mechanics of a show is entitled to copyright protection is for the court, and not the
Secretary of Justice, to make. They assail the following portion of the resolution of the
respondent Secretary of Justice:
[T]he essence of copyright infringement is the copying, in whole or in part, of
copyrightable materials as defined and enumerated in Section 2 of PD. No. 49. Apart
from the manner in which it is actually expressed, however, the idea of a dating game
show is, in the opinion of this Office, a non-copyrightable material. Ideas, concepts,
formats, or schemes in their abstract form clearly do not fall within the class of works or
materials susceptible of copyright registration as provided in PD. No. 49.[3] (Emphasis
added.)
It is indeed true that the question whether the format or mechanics of petitioners
television show is entitled to copyright protection is a legal question for the court to make.
This does not, however, preclude respondent Secretary of Justice from making a preliminary
determination of this question in resolving whether there is probable cause for filing the case
in court. In doing so in this case, he did not commit any grave error.
Presentation of Master Tape
Petitioners claim that respondent Secretary of Justice gravely abused his discretion in
ruling that the master videotape should have been presented in order to determine whether
there was probable cause for copyright infringement. They contend
that 20th Century Fox Film Corporation v. Court of Appeals,[4] on which respondent Secretary
of Justice relied in reversing the resolution of the investigating prosecutor, is inapplicable to
the case at bar because in the present case, the parties presented sufficient evidence which
clearly establish linkages between the copyrighted show Rhoda and Me and the infringing TV
show Its a Date.[5]
The case of 20th Century Fox Film Corporation involved raids conducted on various
videotape outlets allegedly selling or renting out pirated videotapes. The trial court found that
the affidavits of NBI agents, given in support of the application for the search warrant,
were insufficient without the master tape. Accordingly, the trial court lifted the search warrants
it had previously issued against the defendants. On petition for review, this Court sustained
the action of the trial court and ruled:[6]
The presentation of the master tapes of the copyrighted films from which the pirated films
were allegedly copied, was necessary for the validity of search warrants against those who
have in their possession the pirated films. The petitioners argument to the effect that the
presentation of the master tapes at the time of application may not be necessary as these
would be merely evidentiary in nature and not determinative of whether or not a probable
cause exists to justify the issuance of the search warrants is not meritorious. The court
cannot presume that duplicate or copied tapes were necessarily reproduced from master
tapes that it owns.
The application for search warrants was directed against video tape outlets which allegedly
were engaged in the unauthorized sale and renting out of copyrighted films belonging to the
petitioner pursuant to P.D. 49.
The essence of a copyright infringement is the similarity or at least substantial similarity of the
purported pirated works to the copyrighted work. Hence, the applicant must present to the
court the copyrighted films to compare them with the purchased evidence of the video tapes
allegedly pirated to determine whether the latter is an unauthorized reproduction of the
former. This linkage of the copyrighted films to the pirated films must be established to satisfy
the requirements of probable cause. Mere allegations as to the existence of the copyrighted
films cannot serve as basis for the issuance of a search warrant.
This ruling was qualified in the later case of Columbia Pictures, Inc. v. Court of Appeals[7] in
which it was held:
In fine, the supposed pronunciamento in said case regarding the necessity for the match to the searchee.
presentation of the master tapes of the copyrighted films for the validity of search warrants
should at most be understood to merely serve as a guidepost in determining the existence of d. Selection is made by the d. Selection is
probable cause in copyright infringement cases where there is doubt as to the true nexus
between the master tape and the pirated copies. An objective and careful reading of the
use of compute (sic) methods, based on the
decision in said case could lead to no other conclusion than that said directive was hardly
or by the way questions are answer of the
intended to be a sweeping and inflexible requirement in all or similar copyright infringement
answered, or similar methods. Searchees.
cases. . . .[8]
Set 2 Set 2
In the case at bar, during the preliminary investigation, petitioners and private
respondents presented written descriptions of the formats of their respective televisions
shows, on the basis of which the investigating prosecutor ruled: Same as above with the genders same

As may [be] gleaned from the evidence on record, the substance of the television productions
complainants RHODA AND ME and Zosas ITS A DATE is that two matches are made
between a male and a female, both single, and the two couples are treated to a night or two
of dining and/or dancing at the expense of the show. The major concepts of both shows is the
same. Any difference appear mere variations of the major concepts.
That there is an infringement on the copyright of the show RHODA AND ME both in content
and in the execution of the video presentation are established because respondents ITS A
DATE is practically an exact copy of complainants RHODA AND ME because of substantial
similarities as follows, to wit:
RHODA AND ME ITS A DATE
Set I Set I
of the searcher and
searchees
interchanged.[9]
Petitioners assert that the format of Rhoda and Me is a product of ingenuity and skill and
is thus entitled to copyright protection. It is their position that the presentation of a point-by-
point comparison of the formats of the two shows clearly demonstrates the nexus between
the shows and hence establishes the existence of probable cause for copyright
infringement. Such being the case, they did not have to produce the master tape.
To begin with, the format of a show is not copyrightable. Section 2 of P.D. No.
49,[10] otherwise known as the DECREE ON INTELLECTUAL PROPERTY, enumerates the
classes of work entitled to copyright protection, to wit:
Section 2. The rights granted by this Decree shall, from the moment of creation, subsist with
respect to any of the following classes of works:

a. Unmarried participant a. same

(A) Books, including composite and cyclopedic works, manuscripts, directories, and
gazetteers;
of one gender (searcher) appears on one side of a divider, while three (3) unmarried
participants of the other gender are on the other side of the divider. This
(B) Periodicals, including pamphlets and newspapers;
arrangement is done to ensure that the searcher does not see the searchees.
(C) Lectures, sermons, addresses, dissertations prepared for oral delivery;
b. Searcher asks a question b. same
to be answered by each of the (D) Letters;
searchees. The purpose
is to determine who (E) Dramatic or dramatico-musical compositions; choreographic works and entertainments in
among the searchees is dumb shows, the acting form of which is fixed in writing or otherwise;
the most compatible with
the searcher.
(F) Musical compositions, with or without words;
c. Searcher speculates on the c. same
(G) Works of drawing, painting, architecture, sculpture, engraving, lithography, and other
works of art; models or designs for works of art;
(H) Reproductions of a work of art;
(I) Original ornamental designs or models for articles of manufacture, whether or not
patentable, and other works of applied art;
(J) Maps, plans, sketches, and charts;
(K) Drawings or plastic works of a scientific or technical character;
(L) Photographic works and works produced by a process analogous to photography; lantern
slides;
(M) Cinematographic works and works produced by a process analogous to cinematography
or any process for making audio-visual recordings;
(N) Computer programs;
(O) Prints, pictorial illustrations advertising copies, labels, tags, and box wraps;
(P) Dramatizations, translations, adaptations, abridgements, arrangements and other
alterations of literary, musical or artistic works or of works of the Philippine government as
herein defined, which shall be protected as provided in Section 8 of this Decree.
(Q) Collections of literary, scholarly, or artistic works or of works referred to in Section 9 of
this Decree which by reason of the selection and arrangement of their contents constitute
intellectual creations, the same to be protected as such in accordance with Section 8 of this
Decree.
(R) Other literary, scholarly, scientific and artistic works.
This provision is substantially the same as 172 of the INTELLECTUAL PROPERTY
CODE OF THE PHILIPPINES (R.A. No. 8293).[11] The format or mechanics of a television
show is not included in the list of protected works in 2 of P.D. No. 49. For this reason, the
protection afforded by the law cannot be extended to cover them.
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent
right granted by the statute, and not simply a pre-existing right regulated by the statute. Being
a statutory grant, the rights are only such as the statute confers, and may be obtained and
enjoyed only with respect to the subjects and by the persons, and on terms and conditions
specified in the statute.[12]
Since . . . copyright in published works is purely a statutory creation, a copyright may be
obtained only for a work falling within the statutory enumeration or description.[13]
Regardless of the historical viewpoint, it is authoritatively settled in the United States that
there is no copyright except that which is both created and secured by act of Congress . . .
.[14]
P.D. No. 49, 2, in enumerating what are subject to copyright, refers to finished works and
not to concepts. The copyright does not extend to an idea, procedure, process, system,
method of operation, concept, principle, or discovery, regardless of the form in which it is
described, explained, illustrated, or embodied in such work.[15] Thus, the new
INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES provides:
Sec. 175. Unprotected Subject Matter. - Notwithstanding the provisions of Sections 172 and
173, no protection shall extend, under this law, to any idea, procedure, system, method or
operation, concept, principle, discovery or mere data as such, even if they are expressed,
explained, illustrated or embodied in a work; news of the day and other miscellaneous facts
having the character of mere items of press information; or any official text of a legislative,
administrative or legal nature, as well as any official translation thereof.
What then is the subject matter of petitioners copyright? This Court is of the opinion that
petitioner BJPIs copyright covers audio-visual recordings of each episode of Rhoda and Me,
as falling within the class of works mentioned in P.D. 49, 2(M), to wit:
Cinematographic works and works produced by a process analogous to cinematography or
any process for making audio-visual recordings;
The copyright does not extend to the general concept or format of its dating game show.
Accordingly, by the very nature of the subject of petitioner BJPIs copyright, the investigating
prosecutor should have the opportunity to compare the videotapes of the two shows.
Mere description by words of the general format of the two dating game shows is
insufficient; the presentation of the master videotape in evidence was indispensable to the
determination of the existence of probable cause. As aptly observed by respondent Secretary
of Justice:
A television show includes more than mere words can describe because it involves a
whole spectrum of visuals and effects, video and audio, such that no similarity or
dissimilarity may be found by merely describing the general copyright/format of both
dating game shows.[16]
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
 The Supreme Court also elucidated that in determining the question of infringement,
the amount of matter copied from the copyrighted work is an important consideration.
To constitute infringement, it is not necessary that the whole or even a large portion
Republic of the Philippines of the work shall have been copied. If so much is taken that the value of the original is
SUPREME COURT sensibly diminished, or the labors of the original author are substantially and to an
Manila injurious extent appropriated by another, that is sufficient in point of law to constitute
piracy.
FIRST DIVISION

G.R. No. 131522 July 19, 1999

Habana vs Robles

Pacita Habana and two others were the authors of College English for Today Series 1
and 2 (CET). While they were researching for books to assist them in updating their
own book, they chanced upon the book of Felicidad Robles entitled Developing
English Proficiency Books 1 and 2 (DEP). They discovered further that the book of
Robles was strikingly similar to the contents, scheme of presentation, illustrations and
illustrative examples of CET. They then sued Robles and her publisher (Goodwill
Trading Co.) for infringement and/or unfair competition with damages.

Robles, in her defense, alleged that her sources were from foreign books; that in their
field, similarity in styles cannot be avoided since they come from the same
background and orientation. The trial court as well as the Court of Appeals ruled in
favor of Robles.

ISSUE: Whether or not the Court of Appeals is correct.

HELD: No. A perusal of the records yields several pages of the book DEP that are
similar if not identical with the text of CET. In several other pages the treatment and
manner of presentation of the topics of DEP are similar if not a rehash of that
contained in CET. The similarities in examples and material contents are so obviously
present in this case. How can similar/identical examples not be considered as a mark
of copying? Robles’ act of lifting from the book of Habana et al substantial portions
of discussions and examples, and her failure to acknowledge the same in her book is
an infringement of Habana et al’s copyrights.
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO, petitioners,
vs.
FELICIDAD C. ROBLES and GOODWILL TRADING CO., INC., respondents.
PARDO, J.:
The case before us is a petition for review on certiorari1 to set aside the (a) decision or the
Court of Appeals2, and (b) the resolution denying petitioners' motion for reconsideration, 3 in
which the appellate court affirmed the trial court's dismissal of the complaint for infringement
and/or unfair competition and damages but deleted the award for attorney's fees.1âwphi1.nêt
The facts are as follows:
Petitioners are authors and copyright owners of duly issued certificates of copyright
registration covering their published works, produced through their combined resources and
efforts, entitled COLLEGE ENGLISH FOR TODAY (CET for brevity), Books 1 and 2, and
WORKBOOK FOR COLLEGE FRESHMAN ENGLISH, Series 1.
Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the author/publisher and
distributor/seller of another published work entitled "DEVELOPING ENGLISH
PROFICIENCY" (DEP for brevity), Books 1 and 2 (1985 edition) which book was covered by
copyrights issued to them.
In the course of revising their published works, petitioners scouted and looked around various
bookstores to check on other textbooks dealing with the same subject matter. By chance they
came upon the book of respondent Robles and upon perusal of said book they were
surprised to see that the book was strikingly similar to the contents, scheme of presentation,
illustrations and illustrative examples in their own book, CET.
After an itemized examination and comparison of the two books (CET and DEP), petitioners
found that several pages of the respondent's book are similar, if not all together a copy of
petitioners' book, which is a case of plagiarism and copyright infringement.
Petitioners then made demands for damages against respondents and also demanded that
they cease and desist from further selling and distributing to the general public the infringed
copies of respondent Robles' works.
However, respondents ignored the demands, hence, on July 7, 1988; petitioners filed with the
Regional Trial Court, Makati, a complaint for "Infringement and/or unfair competition with
damages" 4 against private respondents.5
In the complaint, petitioners alleged that in 1985, respondent Felicidad C. Robles being
substantially familiar with the contents of petitioners' works, and without securing their
permission, lifted, copied, plagiarized and/or transposed certain portions of their book CET.
The textual contents and illustrations of CET were literally reproduced in the book DEP. The
plagiarism, incorporation and reproduction of particular portions of the book CET in the book
DEP, without the authority or consent of petitioners, and the misrepresentations of
respondent Robles that the same was her original work and concept adversely affected and
substantially diminished the sale of the petitioners' book and caused them actual damages by
way of unrealized income.
Despite the demands of the petitioners for respondents to desist from committing further acts
of infringement and for respondent to recall DEP from the market, respondents refused.
Petitioners asked the court to order the submission of all copies of the book DEP, together
with the molds, plates and films and other materials used in its printing destroyed, and for
respondents to render an accounting of the proceeds of all sales and profits since the time of
its publication and sale.
Respondent Robles was impleaded in the suit because she authored and directly committed
the acts of infringement complained of, while respondent Goodwill Trading Co., Inc. was
impleaded as the publisher and joint co-owner of the copyright certificates of registration
covering the two books authored and caused to be published by respondent Robles with
obvious connivance with one another.
On July 27, 1988, respondent Robles filed a motion for a bill of particulars 6 which the trial
court approved on August 17, 1988. Petitioners complied with the desired particularization,
and furnished respondent Robles the specific portions, inclusive of pages and lines, of the
published and copyrighted books of the petitioners which were transposed, lifted, copied and
plagiarized and/or otherwise found their way into respondent's book.
On August 1, 1988, respondent Goodwill Trading Co., Inc. filed its answer to the
complaint7 and alleged that petitioners had no cause of action against Goodwill Trading Co.,
Inc. since it was not privy to the misrepresentation, plagiarism, incorporation and reproduction
of the portions of the book of petitioners; that there was an agreement between Goodwill and
the respondent Robles that Robles guaranteed Goodwill that the materials utilized in the
manuscript were her own or that she had secured the necessary permission from contributors
and sources; that the author assumed sole responsibility and held the publisher without any
liability.
On November 28, 1988, respondent Robles filed her answer8, and denied the allegations of
plagiarism and copying that petitioners claimed. Respondent stressed that (1) the book DEP
is the product of her independent researches, studies and experiences, and was not a copy
of any existing valid copyrighted book; (2) DEP followed the scope and sequence or syllabus
which are common to all English grammar writers as recommended by the Association of
Philippine Colleges of Arts and Sciences (APCAS), so any similarity between the
respondents book and that of the petitioners was due to the orientation of the authors to both
works and standards and syllabus; and (3) the similarities may be due to the authors'
exercise of the "right to fair use of copyrigthed materials, as guides."
Respondent interposed a counterclaim for damages on the ground that bad faith and malice
attended the filing of the complaint, because petitioner Habana was professionally jealous
and the book DEP replaced CET as the official textbook of the graduate studies department
of the Far Eastern University.9
During the pre-trial conference, the parties agreed to a stipulation of facts and for the trial
court to first resolve the issue of infringement before disposing of the claim for damages.
After the trial on the merits, on April 23, 1993, the trial court rendered its judgment finding
thus:
WHEREFORE, premises considered, the court hereby orders that the
complaint filed against defendants Felicidad Robles and Goodwill Trading
Co., Inc. shall be DISMISSED; that said plaintiffs solidarily reimburse
defendant Robles for P20,000.00 attorney's fees and defendant Goodwill for
P5,000.00 attorney's fees. Plaintiffs are liable for cost of suit.
IT IS SO ORDERED.
Done in the City of Manila this 23rd day of April, 1993.
(s/t) MARVIE R. ABRAHAM SINGSON
Assisting Judge
S. C. Adm. Order No. 124-92 11
On May 14, 1993, petitioners filed their notice of appeal with the trial court 12, and on July 19,
1993, the court directed its branch clerk of court to forward all the records of the case to the
Court of Appeals. 13
In the appeal, petitioners argued that the trial court completely disregarded their evidence and
fully subscribed to the arguments of respondent Robles that the books in issue were purely
the product of her researches and studies and that the copied portions were inspired by
foreign authors and as such not subject to copyright. Petitioners also assailed the findings of
the trial court that they were animated by bad faith in instituting the complaint. 14
On June 27, 1997, the Court of Appeals rendered judgment in favor of respondents Robles
and Goodwill Trading Co., Inc. The relevant portions of the decision state:
It must be noted, however, that similarity of the allegedly infringed work to the
author's or proprietor's copyrighted work does not of itself establish copyright
infringement, especially if the similarity results from the fact that both works
deal with the same subject or have the same common source, as in this
case.
Appellee Robles has fully explained that the portion or material of the book
claimed by appellants to have been copied or lifted from foreign books. She
has duly proven that most of the topics or materials contained in her book,
with particular reference to those matters claimed by appellants to have been
plagiarized were topics or matters appearing not only in appellants and her
books but also in earlier books on College English, including foreign
books, e.i. Edmund Burke's "Speech on Conciliation", Boerigs' "Competence
in English" and Broughton's, "Edmund Burke's Collection."
xxx xxx xxx
Appellant's reliance on the last paragraph on Section II is misplaced. It must
be emphasized that they failed to prove that their books were made sources
by appellee. 15
The Court of Appeals was of the view that the award of attorneys' fees was not proper, since
there was no bad faith on the part of petitioners Habana et al. in instituting the action against
respondents.
On July 12, 1997, petitioners filed a motion for reconsideration, 16 however, the Court of
Appeals denied the same in a Resolution 17 dated November 25, 1997.
Hence, this petition.
In this appeal, petitioners submit that the appellate court erred in affirming the trial court's
decision.
Petitioners raised the following issues: (1) whether or not, despite the apparent textual,
thematic and sequential similarity between DEP and CET, respondents committed no
copyright infringement; (2) whether or not there was animus furandi (intention to steal) on the
part of respondent when they refused to withdraw the copies of CET from the market despite
notice to withdraw the same; and (3) whether or not respondent Robles abused a writer's
right to fair use, in violation of Section 11 of Presidential Decree No. 49. 18
We find the petition impressed with merit.
The complaint for copyright infringement was filed at the time that Presidential Decree No. 49
was in force. At present, all laws dealing with the protection of intellectual property rights have
been consolidated and as the law now stands, the protection of copyrights is governed by
Republic Act No. 8293. Notwithstanding the change in the law, the same principles are
reiterated in the new law under Section 177. It provides for the copy or economic rights of an
owner of a copyright as follows:
Sec. 177. Copy or Economic rights. — Subject to the provisions of chapter
VIII, copyright or economic rights shall consist of the exclusive right to carry
out, authorize or prevent the following acts:
177.1 Reproduction of the work or substanlial portion of the work;
177.2 Dramatization, translation, adaptation, abridgement, arrangement or
other transformation of the work;
177.3 The first public distribution of the original and each copy of the work by
sale or other forms of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic
work, a work embodied in a sound recording, a computer program, a
compilation of data and other materials or a musical work in graphic form,
irrespective of the ownership of the original or the copy which is the subject
of the rental; (n)
177.5 Public display of the original or copy of the work;
177.6 Public performance of the work; and
177.7 Other communication to the public of the work 19
The law also provided for the limitations on copyright, thus:
Sec. 184.1 Limitations on copyright. — Notwithstanding the provisions of
Chapter V, the following acts shall not constitute infringement of copyright:
(a) the recitation or performance of a work, once it has been
lawfully made accessible to the public, if done privately and
free of charge or if made strictly for a charitable or religious
institution or society; [Sec. 10(1), P.D. No. 49]
(b) The making of quotations from a published work if they
are compatible with fair use and only to the extent justified
for the purpose, including quotations from newspaper articles
and periodicals in the form of press summaries; Provided,
that the source and the name of the author, if appearing on
the work are mentioned; (Sec. 11 third par. P.D. 49)
xxx xxx xxx
(e) The inclusion of a work in a publication, broadcast, or other
communication to the public, sound recording of film, if such inclusion is
made by way of illustration for teaching purposes and is compatible with fair
use: Provided, That the source and the name of the author, if appearing in
the work is mentioned; 20
In the above quoted provisions, "work" has reference to literary and artistic creations and this
includes books and other literary, scholarly and scientific works. 21
A perusal of the records yields several pages of the book DEP that are similar if not identical
with the text of CET.
On page 404 of petitioners' Book 1 of College English for Today, the authors wrote:
Items in dates and addresses:
He died on Monday, April 15, 1975.
Miss Reyes lives in 214 Taft Avenue,
Manila 22
On page 73 of respondents Book 1 Developing English Today, they wrote:
He died on Monday, April 25, 1975.
Miss Reyes address is 214 Taft Avenue Manila 23
On Page 250 of CET, there is this example on parallelism or repetition of sentence structures,
thus:
 The proposition is peace. Not peace through the medium of war; not peace
to be hunted through the labyrinth of intricate and endless negotiations; not
peace to arise out of universal discord, fomented from principle, in all parts of
the empire; not peace to depend on the juridical determination of perplexing
questions, or the precise marking of the boundary of a complex government.
It is simple peace; sought in its natural course, and in its ordinary haunts. It is
peace sought in the spirit of peace, and laid in principles purely pacific.
— Edmund Burke, "Speech on Criticism." 24
On page 100 of the book DEP 25, also in the topic of parallel structure and repetition, the
same example is found in toto. The only difference is that petitioners acknowledged the
author Edmund Burke, and respondents did not.
In several other pages 26 the treatment and manner of presentation of the topics of DEP are
similar if not a rehash of that contained in CET.
We believe that respondent Robles' act of lifting from the book of petitioners substantial
portions of discussions and examples, and her failure to acknowledge the same in her book is
an infringement of petitioners' copyrights.
When is there a substantial reproduction of a book? It does not necessarily require that the
entire copyrighted work, or even a large portion of it, be copied. If so much is taken that the
value of the original work is substantially diminished, there is an infringement of copyright and
to an injurious extent, the work is appropriated. 27
In determining the question of infringement, the amount of matter copied from the copyrighted
work is an important consideration. To constitute infringement, it is not necessary that the
whole or even a large portion of the work shall have been copied. If so much is taken that the
value of the original is sensibly diminished, or the labors of the original author are
substantially and to an injurious extent appropriated by another, that is sufficient in point of
law to constitute piracy. 28
The essence of intellectual piracy should be essayed in conceptual terms in order to
underscore its gravity by an appropriate understanding thereof. Infringement of a copyright is
a trespass on a private domain owned and occupied by the owner of the copyright, and,
therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous
term in this connection, consists in the doing by any person, without the consent of the owner
of the copyright, of anything the sole right to do which is conferred by statute on the owner of
the copyright. 29
The respondents' claim that the copied portions of the book CET are also found in foreign
books and other grammar books, and that the similarity between her style and that of
petitioners can not be avoided since they come from the same background and orientation
may be true. However, in this jurisdiction under Sec 184 of Republic Act 8293 it is provided
that:
Limitations on Copyright. Notwithstanding the provisions of Chapter V, the
following shall not constitute infringement of copyright:
xxx xxx xxx
(c) The making of quotations from a published work if they
are compatible with fair use and only to the extent justified
for the purpose, including quotations from newspaper articles
and periodicals in the form of press summaries: Provided,
That the source and the name of the author, if appearing on
the work, are mentioned.
A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in
such cases, did not know whether or not he was infringing any copyright; he at least knew
that what he was copying was not his, and he copied at his peril. 30
The next question to resolve is to what extent can copying be injurious to the author of the
book being copied. Is it enough that there are similarities in some sections of the books or
large segments of the books are the same?
In the case at bar, there is no question that petitioners presented several pages of the books
CET and DEP that more or less had the same contents. It may be correct that the books
being grammar books may contain materials similar as to some technical contents with other
grammar books, such as the segment about the "Author Card". However, the numerous
pages that the petitioners presented showing similarity in the style and the manner the books
were presented and the identical examples can not pass as similarities merely because of
technical consideration.
The respondents claim that their similarity in style can be attributed to the fact that both of
them were exposed to the APCAS syllabus and their respective academic experience,
teaching approach and methodology are almost identical because they were of the same
background.
However, we believe that even if petitioners and respondent Robles were of the same
background in terms of teaching experience and orientation, it is not an excuse for them to be
identical even in examples contained in their books. The similarities in examples and material
contents are so obviously present in this case. How can similar/identical examples not be
considered as a mark of copying?
We consider as an indicia of guilt or wrongdoing the act of respondent Robles of pulling out
from Goodwill bookstores the book DEP upon learning of petitioners' complaint while
pharisaically denying petitioners' demand. It was further noted that when the book DEP was
re-issued as a revised version, all the pages cited by petitioners to contain portion of their
book College English for Today were eliminated.

In cases of infringement, copying alone is not what is prohibited. The copying must produce
an "injurious effect". Here, the injury consists in that respondent Robles lifted from petitioners'
book materials that were the result of the latter's research work and compilation and
misrepresented them as her own. She circulated the book DEP for commercial use did not
acknowledged petitioners as her source.

Hence, there is a clear case of appropriation of copyrighted work for her benefit that
respondent Robles committed. Petitioners' work as authors is the product of their long and
assiduous research and for another to represent it as her own is injury enough. In
copyrighting books the purpose is to give protection to the intellectual product of an author.
This is precisely what the law on copyright protected, under Section 184.1 (b). Quotations
from a published work if they are compatible with fair use and only to the extent justified by
the purpose, including quotations from newspaper articles and periodicals in the form of press
summaries are allowed provided that the source and the name of the author, if appearing on
the work, are mentioned.

In the case at bar, the least that respondent Robles could have done was to acknowledge
petitioners Habana et. al. as the source of the portions of DEP. The final product of an
author's toil is her book. To allow another to copy the book without appropriate
acknowledgment is injury enough.

WHEREFORE, the petition is hereby GRANTED. The decision and resolution of the Court of
Appeals in CA-G. R. CV No. 44053 are SET ASIDE. The case is ordered remanded to the
trial court for further proceedings to receive evidence of the parties to ascertain the damages
caused and sustained by petitioners and to render decision in accordance with the evidence
submitted to it.

SO ORDERED.
G.R. No. L-36402 March 16, 1987
FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, INC., plaintiff-
appellant,
vs.
BENJAMIN TAN, defendant-appellee.
Lichauco, Picazo & Agcaoili Law Office for plaintiff-appellant.
Ramon A. Nieves for defendant-appellee.
PARAS, J.:
An appeal was made to the Court of Appeals docketed as CA-G.R. No. 46373-
R * entitled Filipino Society of Composers, Authors, Publishers, Inc., Plaintiff-Appellant v.
Benjamin Tan, Defendant-Appellee, from the decision of the Court of First Instance of Manila,
Branch VII in Civil Case No. 71222 ** "Filipino Society of Composers, Authors and
Publishers, Inc., Plaintiff v. Benjamin Tan, Defendant," which had dismissed plaintiffs'
complaint without special pronouncement as to costs.
The Court of Appeals, finding that the case involves pure questions of law, certified the same
to the Supreme Court for final determination (Resolution, CA-G.R. No. 46373-R, Rollo, p. 36;
Resolution of the Supreme Court of February 16, 1973 in L-36402, Rollo, p. 38).
The undisputed facts of this case are as follows:
Plaintiff-appellant(Fil sociey of composers) is a non-profit association of authors, composers
and publishers duly organized under the Corporation Law of the Philippines and registered
with the Securities and Exchange Commission. Said association is the owner of certain
musical compositions among which are the songs entitled: "Dahil Sa Iyo", "Sapagkat Ikaw Ay
Akin," "Sapagkat Kami Ay Tao Lamang" and "The Nearness Of You."
On the other hand, defendant-appellee (Benjamin Tan) is the operator of a restaurant known
as "Alex Soda Foundation and Restaurant" where a combo with professional singers, hired to
play and sing musical compositions to entertain and amuse customers therein, were playing
and singing the above-mentioned compositions without any license or permission from the
appellant to play or sing the same. Accordingly, appellant demanded from the appellee
payment of the necessary license fee for the playing and singing of aforesaid compositions
but the demand was ignored.
Hence, on November 7, 1967, appellant filed a complaint with the lower court for infringement
of copyright against defendant-appellee for allowing the playing in defendant-appellee's
restaurant of said songs copyrighted in the name of the former.
Defendant-appellee, in his answer, countered that the complaint states no cause of action.
While not denying the playing of said copyrighted compositions in his establishment, appellee
maintains that the mere singing and playing of songs and popular tunes even if they are
copyrighted do not constitute an infringement (Record on Appeal, p. 11; Resolution, CA-G.R.
NO. 46373-R, Rollo, pp. 32-36) under the provisions of Section 3 of the Copyright Law (Act
3134 of the Philippine Legislature).
The lower court, finding for the defendant, dismissed the complaint (Record on Appeal, p.
25).
Plaintiff (fil society) appealed to the Court of Appeals which as already stated certified the
case to the Supreme Court for adjudication on the legal question involved. (Resolution, Court
of Appeals, Rollo, p. 36; Resolution of the Supreme Court of February 18, 1973, Rollo, p. 38).
In its brief in the Court of Appeals, appellant raised the following Assignment of Errors:
I
THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL COMPOSITIONS OF
THE APPELLANT WERE IN THE NATURE OF PUBLIC PROPERTY WHEN THEY WERE
COPYRIGHTED OR REGISTERED.
II
THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL COMPOSITIONS OF
THE APPELLANT WERE PLAYED AND SUNG IN THE SODA FOUNTAIN AND
RESTAURANT OF THE APPELLEE BY INDEPENDENT CONTRACTORS AND ONLY
UPON THE REQUEST OF CUSTOMERS.
III
THE LOWER COURT ERRED IN HOLDING THAT THE PLAYING AND SINGING OF
COPYRIGHTED MUSICAL COMPOSITIONS IN THE SODA FOUNTAIN AND
RESTAURANT OF THE APPELLEE ARE NOT PUBLIC PERFORMANCES FOR PROFIT
OF THE SAID COMPOSITIONS WITHIN THE MEANING AND CONTEMPLATION OF THE
COPYRIGHT LAW.
IV
THE LOWER COURT ERRED IN NOT HOLDING THAT THE APPELLEE IS LIABLE TO
THE APPELLANT FOR FOUR (4) SEPARATE INFRINGEMENTS. (Brief for Appellant, pp. A
and B).
The petition is devoid of merit.
The principal issues in this case are whether or not the playing and signing of musical
compositions which have been copyrighted under the provisions of the Copyright Law (Act
3134) inside the establishment of the defendant-appellee constitute a public performance for
profit within the meaning and contemplation of the Copyright Law of the Philippines; and
assuming that there were indeed public performances for profit, whether or not appellee can
be held liable therefor.
Appellant anchors its claim on Section 3(c) of the Copyright Law which provides:
SEC. 3. The proprietor of a copyright or his heirs or assigns shall have the
exclusive right:
xxx xxx xxx
(c) To exhibit, perform, represent, produce, or reproduce the copyrighted
work in any manner or by any method whatever for profit or otherwise; if not
reproduced in copies for sale, to sell any manuscripts or any record
whatsoever thereof;
xxx xxx xxx
It maintains that playing or singing a musical composition is universally accepted as
performing the musical composition and that playing and singing of copyrighted music in the
soda fountain and restaurant of the appellee for the entertainment of the customers although
the latter do not pay for the music but only for the food and drink constitute performance for
profit under the Copyright Law (Brief for the Appellant, pp. 19-25).
We concede that indeed there were "public performances for profit. "
The word "perform" as used in the Act has been applied to "One who plays a musical
composition on a piano, thereby producing in the air sound waves which are heard as music
... and if the instrument he plays on is a piano plus a broadcasting apparatus, so that waves
are thrown out, not only upon the air, but upon the other, then also he is performing the
musical composition." (Buck, et al. v. Duncan, et al.; Same Jewell La Salle Realty Co., 32F.
2d. Series 367).
In relation thereto, it has been held that "The playing of music in dine and dance
establishment which was paid for by the public in purchases of food and drink constituted
"performance for profit" within a Copyright Law." (Buck, et al. v. Russon No. 4489 25 F. Supp.
317). Thus, it has been explained that while it is possible in such establishments for the
patrons to purchase their food and drinks and at the same time dance to the music of the
orchestra, the music is furnished and used by the orchestra for the purpose of inducing the
public to patronize the establishment and pay for the entertainment in the purchase of food
and drinks. The defendant conducts his place of business for profit, and it is public; and the
music is performed for profit (Ibid, p. 319). In a similar case, the Court ruled that "The
Performance in a restaurant or hotel dining room, by persons employed by the proprietor, of a
copyrighted musical composition, for the entertainment of patrons, without charge for
admission to hear it, infringes the exclusive right of the owner of the copyright." (Herbert v.
Shanley Co.; John Church Co. v. Hillard Hotel Co., et al., 242 U.S. 590-591). In delivering the
opinion of the Court in said two cases, Justice Holmes elaborated thus:
If the rights under the copyright are infringed only by a performance where
money is taken at the door, they are very imperfectly protected.
Performances not different in kind from those of the defendants could be
given that might compete with and even destroy the success of the monopoly
that the law intends the plaintiffs to have. It is enough to say that there is no
need to construe the statute so narrowly. The defendants' performances are
not eleemosynary. They are part of a total for which the public pays, and the
fact that the price of the whole is attributed to a particular item which those
present are expected to order is not important. It is true that the music is not
the sole object, but neither is the food, which probably could be got cheaper
elsewhere. The object is a repast in surroundings that to people having
limited power of conversation or disliking the rival noise, give a luxurious
pleasure not to be had from eating a silent meal. If music did not pay, it
would be given up. If it pays, it pays out of the public's pocket. Whether it
pays or not, the purpose of employing it is profit, and that is enough. (Ibid., p.
594).
In the case at bar, it is admitted that the patrons of the restaurant in question pay only for the
food and drinks and apparently not for listening to the music. As found by the trial court, the
music provided is for the purpose of entertaining and amusing the customers in order to make
the establishment more attractive and desirable (Record on Appeal, p. 21). It will be noted
that for the playing and singing the musical compositions involved, the combo was paid as
independent contractors by the appellant (Record on Appeal, p. 24). It is therefore obvious
that the expenses entailed thereby are added to the overhead of the restaurant which are
either eventually charged in the price of the food and drinks or to the overall total of additional
income produced by the bigger volume of business which the entertainment was
programmed to attract. Consequently, it is beyond question that the playing and singing of the
combo in defendant-appellee's restaurant constituted performance for profit contemplated by
the Copyright Law. (Act 3134 amended by P.D. No. 49, as amended).
Nevertheless, appellee cannot be said to have infringed upon the Copyright Law. Appellee's
allegation that the composers of the contested musical compositions waived their right in
favor of the general public when they allowed their intellectual creations to become property
of the public domain before applying for the corresponding copyrights for the same (Brief for
Defendant-Appellee, pp. 14-15) is correct.

The Supreme Court has ruled that "Paragraph 33 of Patent Office Administrative Order No. 3
(as amended, dated September 18, 1947) entitled 'Rules of Practice in the Philippines Patent
Office relating to the Registration of Copyright Claims' promulgated pursuant to Republic Act
165, provides among other things that an intellectual creation should be copyrighted thirty
(30) days after its publication, if made in Manila, or within the (60) days if made elsewhere,
failure of which renders such creation public property." (Santos v. McCullough Printing
Company, 12 SCRA 324-325 [1964]. Indeed, if the general public has made use of the object
sought to be copyrighted for thirty (30) days prior to the copyright application the law deems
the object to have been donated to the public domain and the same can no longer be
copyrighted.

A careful study of the records reveals that the song "Dahil Sa Iyo" which was registered on
April 20, 1956 (Brief for Appellant, p. 10) became popular in radios, juke boxes, etc. long
before registration (TSN, May 28, 1968, pp. 3-5; 25) while the song "The Nearness Of You"
registered on January 14, 1955 (Brief for Appellant, p. 10) had become popular twenty five
(25) years prior to 1968, (the year of the hearing) or from 1943 (TSN, May 28, 1968, p. 27)
and the songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao Lamang" both
registered on July 10, 1966, appear to have been known and sang by the witnesses as early
as 1965 or three years before the hearing in 1968. The testimonies of the witnesses at the
hearing of this case on this subject were unrebutted by the appellant. (Ibid, pp. 28; 29 and
30).

Under the circumstances, it is clear that the musical compositions in question had long
become public property and are therefore beyond the protection of the Copyright Law.

PREMISES CONSIDERED, the appealed decision of the Court of First Instance of Manila in
Civil Case No. 71222 is hereby AFFIRMED.

SO ORDERED.

Ching v. Salinas, Sr. (G.R.
No. 161295)
Facts:
Petitioner Ching is a maker and manufacturer of a utility model, Leaf Spring Eye
Bushing for Automobile, for which he holds certificates of copyright registration.
Petitioner’s request to the NBI to apprehend and prosecute illegal manufacturers of
his work led to the issuance of search warrants against respondent Salinas, alleged to
be reproducing and distributing said models in violation of the IP Code. Respondent
moved to quash the warrants on the ground that petitioner’s work is not artistic in
nature and is a proper subject of a patent, not copyright. Petitioner insists that the IP
Code protects a work from the moment of its creation regardless of its nature or
purpose. The trial court quashed the warrants. Petitioner argues that the copyright
certificates over the model are prima facie evidence of its validity. CA affirmed the
trial court’s decision.
Issues:
(1) Whether or not petitioner’s model is an artistic work subject to copyright
protection.
(2) Whether or not petitioner is entitled to copyright protection on the basis of the
certificates of registration issued to it.
Ruling:
(1) NO. As gleaned from the specifications appended to the application for a
copyright certificate filed by the petitioner, the said Leaf Spring Eye Bushing for
Automobile and Vehicle Bearing Cushion are merely utility models. As gleaned from
the description of the models and their objectives, these articles are useful articles
which are defined as one having an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information. Plainly, these are not
literary or artistic works. They are not intellectual creations in the literary and artistic
domain, or works of applied art. They are certainly not ornamental designs or one
having decorative quality or value. Indeed, while works of applied art, original
intellectual, literary and artistic works are copyrightable, useful articles and works of
industrial design are not. A useful article may be copyrightable only if and only to the
extent that such design incorporates pictorial, graphic, or sculptural features that can
be identified separately from, and are capable of existing independently of the
utilitarian aspects of the article. In this case, the bushing and cushion are not works of
art. They are, as the petitioner himself admitted, utility models which may be the
subject of a patent.
(2) NO. No copyright granted by law can be said to arise in favor of the petitioner
despite the issuance of the certificates of copyright registration and the deposit of the
Leaf Spring Eye Bushing and Vehicle Bearing Cushion. Indeed, in Joaquin, Jr. v.
Drilon and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated, the Court
ruled that:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or
independent right granted by the statute, and not simply a pre-existing right regulated
by it. Being a statutory grant, the rights are only such as the statute confers, and may
be obtained and enjoyed only with respect to the subjects and by the persons, and on
terms and conditions specified in the statute. Accordingly, it can cover only the works
falling within the statutory enumeration or description.
Ownership of copyrighted material is shown by proof of originality and
copyrightability. To discharge his burden, the applicant may present the certificate of
registration covering the work or, in its absence, other evidence. A copyright
certificate provides prima facie evidence of originality which is one element of
copyright validity. It constitutes prima facie evidence of both validity and ownership
and the validity of the facts stated in the certificate.
G.R. No. 161295 June 29, 2005
JESSIE G. CHING, petitioner,
vs.
WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR., JOSEPHINE L. SALINAS,
JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN ERIC I. SALINAS, NOEL M.
YABUT (Board of Directors and Officers of WILAWARE PRODUCT
CORPORATION), respondents.
This petition for review on certiorari assails the Decision1 and Resolution2 of the Court of - C190 27 }
Appeals (CA) in CA-G.R. SP No. 70411 affirming the January 3, 2002 and February 14, 2002
Orders3 of the Regional Trial Court (RTC) of Manila, Branch 1, which quashed and set aside - C240 rear 40 }
Search Warrant Nos. 01-2401 and 01-2402 granted in favor of petitioner Jessie G. Ching.
- C240 front 41 } BAG 1
Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the maker
and manufacturer of a Utility Model, described as "Leaf Spring Eye Bushing for Automobile" b) Polyvinyl Chloride Plastic
made up of plastic.
- C190 13 }
On September 4, 2001, Ching and Joseph Yu were issued by the National Library Certificates
of Copyright Registration and Deposit of the said work described therein as "Leaf Spring Eye
Bushing for Automobile."4 c) Vehicle bearing cushion

On September 20, 2001, Ching requested the National Bureau of Investigation (NBI) for - center bearing cushion 11 }
police/investigative assistance for the apprehension and prosecution of illegal manufacturers,
producers and/or distributors of the works.5 Budder for C190 mold 8 }

After due investigation, the NBI filed applications for search warrants in the RTC of Manila Diesel Mold
against William Salinas, Sr. and the officers and members of the Board of Directors of
Wilaware Product Corporation. It was alleged that the respondents therein reproduced and a) Mold for spring eye bushing rear 1 set
distributed the said models penalized under Sections 177.1 and 177.3 of Republic Act (R.A.)
No. 8293. The applications sought the seizure of the following: b) Mold for spring eye bushing front 1 set

a.) Undetermined quantity of Leaf spring eye bushing for automobile that are made c) Mold for spring eye bushing for C190 1 set
up of plastic polypropylene;
d) Mold for C240 rear 1 piece of the set
b.) Undetermined quantity of Leaf spring eye bushing for automobile that are made
up of polyvinyl chloride plastic;
e) Mold for spring eye bushing for L300 2 sets
c.) Undetermined quantity of Vehicle bearing cushion that is made up of polyvinyl
f) Mold for leaf spring eye bushing C190 with metal 1 set
chloride plastic;
g) Mold for vehicle bearing cushion 1 set8
d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the
manufacture/fabrication of items a to d;
The respondents filed a motion to quash the search warrants on the following grounds:
e.) Evidences of sale which include delivery receipts, invoices and official receipts. 6
2. The copyright registrations were issued in violation of the Intellectual Property Code on the
ground that:
The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-2402 for
the seizure of the aforecited articles.7 In the inventory submitted by the NBI agent, it appears
that the following articles/items were seized based on the search warrants: a) the subject matter of the registrations are not artistic or literary;

Leaf Spring eye bushing b) the subject matter of the registrations are spare parts of automobiles meaning –
there (sic) are original parts that they are designed to replace. Hence, they are not
original.9
a) Plastic Polypropylene
The respondents averred that the works covered by the certificates issued by the National
Library are not artistic in nature; they are considered automotive spare parts and pertain to
technology. They aver that the models are not original, and as such are the proper subject of
a patent, not copyright.10
In opposing the motion, the petitioner averred that the court which issued the search warrants
was not the proper forum in which to articulate the issue of the validity of the copyrights
issued to him. Citing the ruling of the Court in Malaloan v. Court of Appeals,11 the petitioner
stated that a search warrant is merely a judicial process designed by the Rules of Court in
anticipation of a criminal case. Until his copyright was nullified in a proper proceeding, he
enjoys rights of a registered owner/holder thereof.
On January 3, 2002, the trial court issued an Order 12 granting the motion, and quashed the
search warrant on its finding that there was no probable cause for its issuance. The court
ruled that the work covered by the certificates issued to the petitioner pertained to solutions to
technical problems, not literary and artistic as provided in Article 172 of the Intellectual
Property Code.
His motion for reconsideration of the order having been denied by the trial court’s Order of
February 14, 2002, the petitioner filed a petition for certiorari in the CA, contending that the
RTC had no jurisdiction to delve into and resolve the validity of the copyright certificates
issued to him by the National Library. He insisted that his works are covered by Sections
172.1 and 172.2 of the Intellectual Property Code. The petitioner averred that the copyright
certificates are prima facie evidence of its validity, citing the ruling of the United States Court
of Appeals in Wildlife Express Corporation v. Carol Wright Sales, Inc.13 The petitioner
asserted that the respondents failed to adduce evidence to support their motion to quash the
search warrants. The petitioner noted that respondent William Salinas, Jr. was not being
honest, as he was able to secure a similar copyright registration of a similar product from the
National Library on January 14, 2002.
On September 26, 2003, the CA rendered judgment dismissing the petition on its finding that
the RTC did not commit any grave abuse of its discretion in issuing the assailed order, to wit:
It is settled that preliminarily, there must be a finding that a specific offense must have been
committed to justify the issuance of a search warrant. In a number of cases decided by the
Supreme Court, the same is explicitly provided, thus:
"The probable cause must be in connection with one specific offense, and the judge must,
before issuing the warrant, personally examine in the form of searching questions and
answers, in writing and under oath, the complainant and any witness he may produce, on
facts personally known to them and attach to the record their sworn statements together with
any affidavit submitted.
"In the determination of probable cause, the court must necessarily resolve whether or not an
offense exists to justify the issuance or quashal of the search warrant."
In the instant case, the petitioner is praying for the reinstatement of the search warrants
issued, but subsequently quashed, for the offense of Violation of Class Designation of
Copyrightable Works under Section 177.1 in relation to Section 177.3 of Republic Act 8293,
when the objects subject of the same, are patently not copyrightable.
It is worthy to state that the works protected under the Law on Copyright are: literary or
artistic works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring Eye Bushing and
Vehicle Bearing Cushion fall on neither classification. Accordingly, if, in the first place, the
item subject of the petition is not entitled to be protected by the law on copyright, how can
there be any violation?14
The petitioner’s motion for reconsideration of the said decision suffered the same fate. The
petitioner forthwith filed the present petition for review on certiorari, contending that the
revocation of his copyright certificates should be raised in a direct action and not in a search
warrant proceeding.
The petitioner posits that even assuming ex argumenti that the trial court may resolve the
validity of his copyright in a proceeding to quash a search warrant for allegedly infringing
items, the RTC committed a grave abuse of its discretion when it declared that his works are
not copyrightable in the first place. He claims that R.A. No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, which took effect on January 1, 1998, provides
in no uncertain terms that copyright protection automatically attaches to a work by the sole
fact of its creation, irrespective of its mode or form of expression, as well as of its content,
quality or purpose.15 The law gives a non-inclusive definition of "work" as referring to original
intellectual creations in the literary and artistic domain protected from the moment of their
creation; and includes original ornamental designs or models for articles of manufacture,
whether or not registrable as an industrial design and other works of applied art under
Section 172.1(h) of R.A. No. 8293.
As such, the petitioner insists, notwithstanding the classification of the works as either literary
and/or artistic, the said law, likewise, encompasses works which may have a bearing on the
utility aspect to which the petitioner’s utility designs were classified. Moreover, according to
the petitioner, what the Copyright Law protects is the author’s intellectual creation, regardless
of whether it is one with utilitarian functions or incorporated in a useful article produced on an
industrial scale.
The petitioner also maintains that the law does not provide that the intended use or use in
industry of an article eligible for patent bars or invalidates its registration under the Law on
Copyright. The test of protection for the aesthetic is not beauty and utility, but art for the
copyright and invention of original and ornamental design for design patents.16 In like manner,
the fact that his utility designs or models for articles of manufacture have been expressed in
the field of automotive parts, or based on something already in the public domain does not
automatically remove them from the protection of the Law on Copyright. 17
The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293 which gives the same
presumption to an affidavit executed by an author who claims copyright ownership of his
work.
The petitioner adds that a finding of probable cause to justify the issuance of a search
warrant means merely a reasonable suspicion of the commission of the offense. It is not
equivalent to absolute certainty or a finding of actual and positive cause. 18 He assists that the
determination of probable cause does not concern the issue of whether or not the alleged
work is copyrightable. He maintains that to justify a finding of probable cause in the issuance
of a search warrant, it is enough that there exists a reasonable suspicion of the commission
of the offense.
The petitioner contends that he has in his favor the benefit of the presumption that his
copyright is valid; hence, the burden of overturning this presumption is on the alleged
infringers, the respondents herein. But this burden cannot be carried in a hearing on a
proceeding to quash the search warrants, as the issue therein is whether there was probable
cause for the issuance of the search warrant. The petitioner concludes that the issue of
probable cause should be resolved without invalidating his copyright.
In their comment on the petition, the respondents aver that the work of the petitioner is
essentially a technical solution to the problem of wear and tear in automobiles, the
substitution of materials, i.e., from rubber to plastic matter of polyvinyl chloride, an oil
resistant soft texture plastic material strong enough to endure pressure brought about by the
vibration of the counter bearing and thus brings bushings. Such work, the respondents assert,
is the subject of copyright under Section 172.1 of R.A. No. 8293. The respondents posit that a
technical solution in any field of human activity which is novel may be the subject of a patent,
and not of a copyright. They insist that the certificates issued by the National Library are only
certifications that, at a point in time, a certain work was deposited in the said office.
Furthermore, the registration of copyrights does not provide for automatic protection. Citing
Section 218.2(b) of R.A. No. 8293, the respondents aver that no copyright is said to exist if a
party categorically questions its existence and legality. Moreover, under Section 2, Rule 7 of
the Implementing Rules of R.A. No. 8293, the registration and deposit of work is not
conclusive as to copyright outlay or the time of copyright or the right of the copyright owner.
The respondents maintain that a copyright exists only when the work is covered by the
protection of R.A. No. 8293.
The petition has no merit.
The RTC had jurisdiction to delve into and resolve the issue whether the petitioner’s utility
models are copyrightable and, if so, whether he is the owner of a copyright over the said
models. It bears stressing that upon the filing of the application for search warrant, the RTC
was duty-bound to determine whether probable cause existed, in accordance with Section 4,
Rule 126 of the Rules of Criminal Procedure:
SEC. 4. Requisite for issuing search warrant. – A search warrant shall not issue but upon
probable cause in connection with one specific offense to be determined personally by the
judge after examination under oath or affirmation of the complainant and the witnesses he
may produce, and, particularly, describing the place to be searched and the things to be
seized.
In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,19 the Court held that in
the determination of probable cause, the court must necessarily resolve whether or not an
offense exists to justify the issuance of a search warrant or the quashal of one already issued
by the court. Indeed, probable cause is deemed to exist only where facts and circumstances
exist which could lead a reasonably cautious and prudent man to believe that an offense has
been committed or is being committed. Besides, in Section 3, Rule 126 of the Rules of
Criminal Procedure, a search warrant may be issued for the search and seizure of personal
property (a) subject of the offense; (b) stolen or embezzled and other proceeds or fruits of the
offense; or (c) used or intended to be used as the means of committing an offense.
The RTC is mandated under the Constitution and Rules of Criminal Procedure to determine
probable cause. The court cannot abdicate its constitutional obligation by refusing to
determine whether an offense has been committed.20 The absence of probable cause will
cause the outright nullification of the search warrant.21
For the RTC to determine whether the crime for infringement under R.A. No. 8293 as alleged
in an application is committed, the petitioner-applicant was burdened to prove that (a)
respondents Jessie Ching and Joseph Yu were the owners of copyrighted material; and (b)
the copyrighted material was being copied and distributed by the respondents. Thus, the
ownership of a valid copyright is essential. 22
Ownership of copyrighted material is shown by proof of originality and copyrightability. By
originality is meant that the material was not copied, and evidences at least minimal creativity;
that it was independently created by the author and that it possesses at least same minimal
degree of creativity.23 Copying is shown by proof of access to copyrighted material and
substantial similarity between the two works.24 The applicant must thus demonstrate the
existence and the validity of his copyright because in the absence of copyright protection,
even original creation may be freely copied.25
By requesting the NBI to investigate and, if feasible, file an application for a search warrant
for infringement under R.A. No. 8293 against the respondents, the petitioner thereby
authorized the RTC (in resolving the application), to delve into and determine the validity of
the copyright which he claimed he had over the utility models. The petitioner cannot seek
relief from the RTC based on his claim that he was the copyright owner over the utility models
and, at the same time, repudiate the court’s jurisdiction to ascertain the validity of his claim
without running afoul to the doctrine of estoppel.
To discharge his burden, the applicant may present the certificate of registration covering the
work or, in its absence, other evidence.26 A copyright certificate provides prima facie evidence
of originality which is one element of copyright validity. It constitutes prima facie evidence of
both validity and ownership27 and the validity of the facts stated in the certificate.28 The
presumption of validity to a certificate of copyright registration merely orders the burden of
proof. The applicant should not ordinarily be forced, in the first instance, to prove all the
multiple facts that underline the validity of the copyright unless the respondent, effectively
challenging them, shifts the burden of doing so to the applicant. 29 Indeed, Section 218.2 of
R.A. No. 8293 provides:
218.2. In an action under this Chapter:
(a) Copyright shall be presumed to subsist in the work or other subject matter to
which the action relates if the defendant does not put in issue the question whether
copyright subsists in the work or other subject matter; and
(b) Where the subsistence of the copyright is established, the plaintiff shall be
presumed to be the owner of the copyright if he claims to be the owner of the
copyright and the defendant does not put in issue the question of his ownership.
A certificate of registration creates no rebuttable presumption of copyright validity where other
evidence in the record casts doubt on the question. In such a case, validity will not be
presumed.30
To discharge his burden of probable cause for the issuance of a search warrant for violation
of R.A. No. 8293, the petitioner-applicant submitted to the RTC Certificate of Copyright
Registration Nos. 2001-197 and 2001-204 dated September 3, 2001 and September 4, 2001,
respectively, issued by the National Library covering work identified as Leaf Spring Eye
Bushing for Automobile and Vehicle Bearing Cushion both classified under Section 172.1(h)
of R.A. No. 8293, to wit:
SEC. 172. Literary and Artistic Works. – 172.1. Literary and artistic works, hereinafter referred
to as "works," are original intellectual creations in the literary and artistic domain protected
from the moment of their creation and shall include in particular:
...
(h) Original ornamental designs or models for articles of manufacture, whether or not
registrable as an industrial design, and other works of applied art.
Related to the provision is Section 171.10, which provides that a "work of applied art" is an
artistic creation with utilitarian functions or incorporated in a useful article, whether made by
hand or produced on an industrial scale.
But, as gleaned from the specifications appended to the application for a copyright certificate
filed by the petitioner, the said Leaf Spring Eye Bushing for Automobile is merely a utility
model described as comprising a generally cylindrical body having a co-axial bore that is
centrally located and provided with a perpendicular flange on one of its ends and a cylindrical
metal jacket surrounding the peripheral walls of said body, with the bushing made of plastic
that is either polyvinyl chloride or polypropylene.31 Likewise, the Vehicle Bearing Cushion is
illustrated as a bearing cushion comprising a generally semi-circular body having a central
hole to secure a conventional bearing and a plurality of ridges provided therefore, with said
cushion bearing being made of the same plastic materials. 32 Plainly, these are not literary or
artistic works. They are not intellectual creations in the literary and artistic domain, or works of
applied art. They are certainly not ornamental designs or one having decorative quality or
value.
It bears stressing that the focus of copyright is the usefulness of the artistic design, and not its
marketability. The central inquiry is whether the article is a work of art. 33 Works for applied art
include all original pictorials, graphics, and sculptural works that are intended to be or have
been embodied in useful article regardless of factors such as mass production, commercial
exploitation, and the potential availability of design patent protection.34
As gleaned from the description of the models and their objectives, these articles are useful
articles which are defined as one having an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information. Indeed, while works of applied
art, original intellectual, literary and artistic works are copyrightable, useful articles and works
of industrial design are not.35 A useful article may be copyrightable only if and only to the
extent that such design incorporates pictorial, graphic, or sculptural features that can be
identified separately from, and are capable of existing independently of the utilitarian aspects
of the article.
We agree with the contention of the petitioner (citing Section 171.10 of R.A. No. 8293), that
the author’s intellectual creation, regardless of whether it is a creation with utilitarian functions
or incorporated in a useful article produced on an industrial scale, is protected by copyright
law. However, the law refers to a "work of applied art which is an artistic creation." It bears
stressing that there is no copyright protection for works of applied art or industrial design
which have aesthetic or artistic features that cannot be identified separately from the
utilitarian aspects of the article.36Functional components of useful articles, no matter how
artistically designed, have generally been denied copyright protection unless they are
separable from the useful article.37
In this case, the petitioner’s models are not works of applied art, nor artistic works. They are
utility models, useful articles, albeit with no artistic design or value. Thus, the petitioner
described the utility model as follows:
LEAF SPRING EYE BUSHING FOR AUTOMOBILE
Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are made of
hard rubber. These rubber bushings after a time, upon subjecting them to so much or
intermittent pressure would eventually wore (sic) out that would cause the wobbling of the leaf
spring.
The primary object of this utility model, therefore, is to provide a leaf-spring eye bushing for
automobile that is made up of plastic.
Another object of this utility model is to provide a leaf-spring eye bushing for automobiles
made of polyvinyl chloride, an oil resistant soft texture plastic or polypropylene, a hard plastic,
yet both causes cushion to the leaf spring, yet strong enough to endure pressure brought
about by the up and down movement of said leaf spring.
Yet, an object of this utility model is to provide a leaf-spring eye bushing for automobiles that
has a much longer life span than the rubber bushings.
Still an object of this utility model is to provide a leaf-spring eye bushing for automobiles that
has a very simple construction and can be made using simple and ordinary molding
equipment.
A further object of this utility model is to provide a leaf-spring eye bushing for automobile that
is supplied with a metal jacket to reinforce the plastic eye bushing when in engaged with the
steel material of the leaf spring.
These and other objects and advantages will come to view and be understood upon a
reading of the detailed description when taken in conjunction with the accompanying
drawings.
Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the present
utility model;
Figure 2 is a sectional view taken along line 2-2 of Fig. 1;
Figure 3 is a longitudinal sectional view of another embodiment of this utility model;
Figure 4 is a perspective view of a third embodiment; and
Figure 5 is a sectional view thereof.
Referring now to the several views of the drawings wherein like reference numerals
designated same parts throughout, there is shown a utility model for a leaf-spring eye
bushing for automobile generally designated as reference numeral 10.
Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a co-axial
bore 12 centrally provided thereof.
As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a perpendicular
flange 13 on one of its ends and a cylindrical metal jacket 14 surrounding the peripheral walls
15 of said body 11. When said leaf-spring bushing 10 is installed, the metal jacket 14 acts
with the leaf-spring eye (not shown), which is also made of steel or cast steel. In effect, the
bushing 10 will not be directly in contact with steel, but rather the metal jacket, making the life
of the bushing 10 longer than those without the metal jacket.
In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl chloride, an oil
resistant soft texture plastic or a hard polypropylene plastic, both are capable to endure the
pressure applied thereto, and, in effect, would lengthen the life and replacement therefor.
Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said bushing 10 is
insertably provided with a steel tube 17 to reinforce the inner portion thereof. This steel tube
17 accommodates or engages with the leaf-spring bolt (not shown) connecting the leaf spring
and the automobile’s chassis.
Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is elongated and
cylindrical as to its construction. Said another embodiment is also made of polypropylene or
polyvinyl chloride plastic material. The steel tube 17 and metal jacket 14 may also be applied
to this embodiment as an option thereof.38
VEHICLE BEARING CUSHION
Known bearing cushions inserted to bearing housings for vehicle propeller shafts are made of
hard rubber. These rubber bushings after a time, upon subjecting them to so much or
intermittent pressure would eventually be worn out that would cause the wobbling of the
center bearing.
The primary object of this utility model therefore is to provide a vehicle-bearing cushion that is
made up of plastic.
Another object of this utility model is to provide a vehicle bearing cushion made of polyvinyl
chloride, an oil resistant soft texture plastic material which causes cushion to the propeller’s
center bearing, yet strong enough to endure pressure brought about by the vibration of the
center bearing.
Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a much
longer life span than rubber bushings.
Still an object of this utility model is to provide a vehicle bearing cushion that has a very
simple construction and can be made using simple and ordinary molding equipment.
These and other objects and advantages will come to view and be understood upon a
reading of the detailed description when taken in conjunction with the accompanying
drawings.
Figure 1 is a perspective view of the present utility model for a vehicle-bearing cushion; and
Figure 2 is a sectional view thereof.
Referring now to the several views of the drawing, wherein like reference numeral designate
same parts throughout, there is shown a utility model for a vehicle-bearing cushion generally
designated as reference numeral 10.
Said bearing cushion 10 comprises of a generally semi-circular body 11, having central hole
12 to house a conventional bearing (not shown). As shown in Figure 1, said body 11 is
provided with a plurality of ridges 13 which serves reinforcing means thereof.
The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and chemical
resistant plastic material which is strong, durable and capable of enduring severe pressure
from the center bearing brought about by the rotating movement of the propeller shaft of the
vehicle.39
A utility model is a technical solution to a problem in any field of human activity which is new
and industrially applicable. It may be, or may relate to, a product, or process, or an
improvement of any of the aforesaid.40Essentially, a utility model refers to an invention in the
mechanical field. This is the reason why its object is sometimes described as a device or
useful object.41 A utility model varies from an invention, for which a patent for invention is,
likewise, available, on at least three aspects: first, the requisite of "inventive step" 42 in a
patent for invention is not required; second, the maximum term of protection is only seven
years43 compared to a patent which is twenty years, 44 both reckoned from the date of the
application; and third, the provisions on utility model dispense with its substantive
examination45 and prefer for a less complicated system.
Being plain automotive spare parts that must conform to the original structural design of the
components they seek to replace, the Leaf Spring Eye Bushing and Vehicle Bearing Cushion
are not ornamental. They lack the decorative quality or value that must characterize authentic
works of applied art. They are not even artistic creations with incidental utilitarian functions or
works incorporated in a useful article. In actuality, the personal properties described in the
search warrants are mechanical works, the principal function of which is utility sans any
aesthetic embellishment.
Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion as
included in the catch-all phrase "other literary, scholarly, scientific and artistic works" in
Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem generis which states
that "where a statute describes things of a particular class or kind accompanied by words of a
generic character, the generic word will usually be limited to things of a similar nature with
those particularly enumerated, unless there be something in the context of the state which
would repel such inference,"46 the Leaf Spring Eye Bushing and Vehicle Bearing Cushion are
not copyrightable, being not of the same kind and nature as the works enumerated in Section
172 of R.A. No. 8293.
No copyright granted by law can be said to arise in favor of the petitioner despite the
issuance of the certificates of copyright registration and the deposit of the Leaf Spring Eye
Bushing and Vehicle Bearing Cushion. Indeed, in Joaquin, Jr. v. Drilon47 and Pearl & Dean
(Phil.), Incorporated v. Shoemart, Incorporated,48 the Court ruled that:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent
right granted by the statute, and not simply a pre-existing right regulated by it. Being a
statutory grant, the rights are only such as the statute confers, and may be obtained and
enjoyed only with respect to the subjects and by the persons, and on terms and conditions
specified in the statute. Accordingly, it can cover only the works falling within the statutory
enumeration or description.
That the works of the petitioner may be the proper subject of a patent does not entitle him to
the issuance of a search warrant for violation of copyright laws. In Kho v. Court of
Appeals49 and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,50 the Court ruled
that "these copyright and patent rights are completely distinct and separate from one another,
and the protection afforded by one cannot be used interchangeably to cover items or works
that exclusively pertain to the others." The Court expounded further, thus:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and shall include a stamped or
marked container of goods. In relation thereto, a trade name means the name or designation
identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to
literary and artistic works which are original intellectual creations in the literary and artistic
domain protected from the moment of their creation. Patentable inventions, on the other
hand, refer to any technical solution of a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable.
The petitioner cannot find solace in the ruling of the United States Supreme Court in Mazer v.
Stein51 to buttress his petition. In that case, the artifacts involved in that case were statuettes
of dancing male and female figures made of semi-vitreous china. The controversy therein
centered on the fact that although copyrighted as "works of art," the statuettes were intended
for use and used as bases for table lamps, with electric wiring, sockets and lampshades
attached. The issue raised was whether the statuettes were copyright protected in the United
States, considering that the copyright applicant intended primarily to use them as lamp bases
to be made and sold in quantity, and carried such intentions into effect. At that time, the
Copyright Office interpreted the 1909 Copyright Act to cover works of artistic craftsmanship
insofar as their form, but not the utilitarian aspects, were concerned. After reviewing the
history and intent of the US Congress on its copyright legislation and the interpretation of the
copyright office, the US Supreme Court declared that the statuettes were held copyrightable
works of art or models or designs for works of art. The High Court ruled that:

"Works of art (Class G) – (a) – In General. This class includes works of artistic craftsmanship,
in so far as their form but not their mechanical or utilitarian aspects are concerned, such as
artistic jewelry, enamels, glassware, and tapestries, as well as all works belonging to the fine
arts, such as paintings, drawings and sculpture. …"

So we have a contemporaneous and long-continued construction of the statutes by the

agency charged to administer them that would allow the registration of such a statuette as is
in question here.52

The High Court went on to state that "[t]he dichotomy of protection for the aesthetic is not
beauty and utility but art for the copyright and the invention of original and ornamental design
for design patents." Significantly, the copyright office promulgated a rule to implement Mazer
to wit:

… [I]f "the sole intrinsic function of an article is its utility, the fact that the work is unique and
attractively shaped will not qualify it as a work of art."

In this case, the bushing and cushion are not works of art. They are, as the petitioner himself
admitted, utility models which may be the subject of a patent.

IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit.
The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 70411 are
AFFIRMED. Search Warrant Nos. 01-2401 and 01-2402 issued on October 15, 2001 are
ANNULLED AND SET ASIDE. Costs against the petitioner.

SO ORDERED.