G.R. No.

198889

UFC PHILIPPINES, INC. (now merged with NUTRI-ASIA, INC., with NUTRI-
ASIA, INC. as the surviving entity) vs. BARRIO FIESTA MANUFACTURING
CORPORATION

FACTS:

1. Petitioner Nutri-Asia, Inc. (petitioner) is a corporation duly organized and existing

under Philippine laws merged with UFC Philippines, Inc. Respondent Barrio Fiesta
Manufacturing Corporation (respondent) is likewise a corporation organized and existing
under Philippine laws.

2. Respondent filed Application for the mark "PAPA BOY & DEVICE" for goods
specifically for "lechon sauce." The Intellectual Property Office (IPO) published said
application for opposition in the IP Phil. e-Gazette.The mark appears as follows:

3.Petitioner filed
with the IPO-BLA a
Verified Notice of
Opposition to the
above-mentioned
application and
alleged that:

1. The mark "PAPA" for use on banana catsup and other

similar goods was first used [in] 1954 by Neri Papa, and thus, was
taken from his surname;

2. After using the mark "PAP A" for about twenty-seven (27)
years, Neri Papa subsequently assigned the mark "PAPA" to
Heman D. Reyes who, on September 17, 1981, filed an
application to register said mark "PAP A" for use on banana catsup, chili sauce, achara,
banana chips, and instant ube powder;

3. The test of dominancy is now explicitly incorporated into law in Section 155 .1 of
the IP Code which defines infringement as the colorable imitation of a registered mark
or a dominant feature thereof, and is provided for by jurisprudence;

4. As a corporation also engaged in the food business, Respondent-applicant knew

and/or ought to know that Opposer and its predecessors-in-interest have been using the
mark "PAPA" and the variations thereof for the last fifty-two (52) years while its sister
company is engaged in the business of manufacturing and distributing "lechon sauce" and
other table sauces for the last forty-one (41) years;

5. Petitioner alleged that the registration of respondent's challenged mark was also
likely to damage the petitioner, considering that its former sister company, Southeast
Asia Food, Inc., and the latter's predecessors-in-interest, had been major manufacturers
and distributors of lechon and other table sauces since 1965, such as products employing
the registered "Mang Tomas" mark.

4. Respondent’s answer:

1. Contrary to Opposer's belief, the dominant features of Respondent-applicant's

mark "PAPA BOY & DEVICE" are the words "PAPA BOY" and the representation of a
smiling hog-like character gesturing the thumbs-up sign and wearing a traditional
Filipino hat and scarf while the dominant feature of Opposer's mark "PAPA
KETSARAP" are the words "Papa" and "Ketsarap", not the word "Papa"; and the word
"Ketsarap " is more prominently printed and displayed in the foreground than the word
"Papa" for which reasons opposer's reference to the Dominancy Test fails;

2. Opposer's allegation that the registration of Respondent-applicant's mark "PAPA

BOY & DEVICE" will damage and prejudice the mark "MANG TOMAS" is
irrelevant considering that Opposer's basis for filing this opposition is the alleged
confusing similarity between Respondent-applicant's mark and Opposer's mark "PAPA
KETSARAP", not the mark "MANG TOMAS";

5. IPO - The IPO-BLA rendered a Decision on March 26, 2008 sustaining petitioner's
Opposition and rejecting respondent's application for "PAPA BOY & DEVICE."

6. CA:

1. Under R.A. No. 8293, as amended by R.A. No. 9150, the duration of a trademark
registration is 10 years, renewable for periods of 10 years each renewal. The request for
renewal must be made within 6 months before or after the expiration of the registration.
Respondent's PAPA mark was not renewed within the period provided for under RA No.
8293. Its registered term ended on August 11, 2003 but was reapplied for registration only
on April 4, 2005. Meanwhile, the mark PAPA BANANA CATSUP was registered by
respondent only in the Supplemental Register, hence, was not provided any protection. x
x x. It is noted that the PAPA BANANA CATSUP label was applied for registration on
November 15, 2006, over three years after the expiration of its registration in the
Supplemental Register of the Philippine Patent Office on August 11, 2003. Thus, while
petitioner has a point that the marks PAPA and PAPA BANANA CATSUP have
already expired and the latter having been afforded no protection at all and should
not be juxtaposed with petitioner's trademark, respondent can still use the marks
PAPA KETSARAP and PAPA BANANA CATSUP, it appearing that the Intellectual
Property Office issued a Certificate of Registration No. 4-2006-012364 for the latter
on April 30, 2007, to bar the registration of petitioner's "PAPA BOY & DEVICE"
mark.

2. After taking into account the aforementioned doctrines and the factual
circumstances of the case at bar, this Court, after considering the trademarks
involved as a whole, is of the view that petitioner's trademark "PAP A BOY &
DEVICE" is not confusingly similar to respondent's "PAPA KETSARAP" and
"PAPA BANANA CATSUP" trademark. Petitioner's trademark is "PAPA BOY" as a
whole as opposed to respondent's "PAPA". Although on its label the word "PAPA" is
prominent, the trademark should be taken as a whole and not piecemeal. The difference
between the two marks are conspicuous and noticeable. While respondent's products are
both labeled as banana sauces, that of petitioner Barrio Fiesta is labeled as lechon sauce.

7. Theory of Petitioner:

The dominancy test should have been applied to determine if there is confusing
similarity between the competing marks.22

Petitioner points out that the Director General and the IPO-BLA found that the
dominant feature of the competing marks is the word "PAP A" and the minor additions to
respondent's "PAPA BOY & DEVICE" mark do not negate likelihood of confusion
caused by the latter's use of the dominant word "PAPA." Petitioner claims that even
compared solely to petitioner's "PAPA KETSARAP" mark (Registration No. 34681),
which is conceded to have been timely renewed and to have never expired, respondent's
"PAPA BOY & DEVICE" would still create the likelihood of confusion.

8. Theory of Respondent

The dominancy test should have been applied to determine if there is confusing similarity
between the competing marks.22

Petitioner points out that the Director General and the IPO-BLA found that the
dominant feature of the competing marks is the word "PAP A" and the minor additions to
respondent's "PAPA BOY & DEVICE" mark do not negate likelihood of confusion
caused by the latter's use of the dominant word "PAPA." Petitioner claims that even
compared solely to petitioner's "PAPA KETSARAP" mark (Registration No. 34681),
which is conceded to have been timely renewed and to have never expired, respondent's
"PAPA BOY & DEVICE" would still create the likelihood of confusion.

Using the holistic test, respondent further discusses the differences in the marks in
this wise:

Even the use of the holistic test x x x takes into consideration the entirety of the marks in
question [to] be considered in resolving confusing similarity. The differences are again
very obvious. Respondent's mark has (1) the word "lechon sauce" printed inside a blue
ribbon-like device which is illustrated below the word "PAPA BOY"; (2) a prominent
smiling hog-like character gesturing a thumbs-up sign and wearing a Filipino hat and
scarf stands beside the word "PAPA BOY"; and the word "BARRIO FIESTA"
conspicuously displayed above the said trademark which leaves no doubt in the
consumer's mind on the product that he or she is purchasing. On the other hand,
petitioner's mark is the word "PAPA" enclosed by a cloud on top of the word
"KETSARAP' enclosed by a geometrical figure.

ISSUE: Whether or not Court of Appeals erred in applying the holistic test and that
the proper test under the circumstances is the dominancy test, which was correctly
applied by the IPO-BLA and the Director General.

RULING:

1. We find that the Court of Appeals erred in applying the holistic test and in reversing
and setting aside the decision of the IPO-BLA and that of the IPO Director General, both
of which rejected respondent's application for the mark "PAPA BOY & DEVICE."

2. In Dermaline, Inc. v. Myra Pharmaceuticals, Inc.,43 we defined a trademark as "any

distinctive word, name, symbol, emblem, sign, or device, or any combination thereof,
adopted and used by a manufacturer or merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt by others." We held that a trademark is "an
intellectual property deserving protection by law."

3. A. Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall
have the exclusive right to prevent all third parties not having the owner's consent from
using in the course of trade identical or similar signs or containers for goods or services
which are identical or similar to those in respect of which the trademark is registered
where such use would result in a likelihood of confusion. In case of the use of an
identical sign for identical goods or services, a likelihood of confusion shall be presumed.

B. Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A

person who has identified in the mind of the public the goods he manufactures or deals in,
his business or services from those of others, whether or not a registered mark is
employed, has a property right in the goodwill of the said goods, business or services so
identified, which will be protected in the same manner as other property rights.

C. A.M. No. 10-3-10-SC, or the Rules of Procedure for Intellectual Property

Rights Cases, Rule 18.

4. The ownership of a trademark is acquired by its registration and its actual use by the
manufacturer. or distributor of the goods made available to the purchasing public. Section
122 of R.A.. No. 8293 provides that the rights in a mark shall be acquired by means of its
valid registration with the IPO. A certificate of registration of a mark, once issued,
constitutes prima facie evidence of the validity of the registration, of the registrant's
ownership of the mark, and of the registrant's exclusive right to use the same in
connection with the goods or services and those that are related thereto specified in the
certificate. R.A. No. 8293, however, requires the applicant for registration or the
registrant to file a declaration of actual use (DAU) of the mark, with evidence to that
effect, within three (3) years from the filing of the application for registration; otherwise,
the application shall be refused or the mark shall be removed from the register. In other
words, the prima facie presumption brought about by the registration of a mark may be
challenged and overcome, in an appropriate action, by proof of the nullity of the
registration or of non-use of the mark, except when excused.

5. A. The Dominancy Test focuses on the similarity of the prevalent or dominant features
of the competing trademarks that might cause confusion, mistake, and deception in the
mind of the purchasing public. Duplication or imitation is not necessary; neither is it
required that the mark sought to be registered suggests an effort to imitate. Given more
consideration are the aural and visual impressions created by the marks on the buyers of
goods, giving little weight to factors like prices, quality, sales outlets, and market
segments.

The Dominancy Test focuses on the similarity of the prevalent features of the
competing trademarks that might cause confusion or deception. It is applied when the
trademark sought to be registered contains the main, essential and dominant features of
the earlier registered trademark, and confusion or deception is likely to result.
Duplication or imitation is not even required; neither is it necessary that the label of the
applied mark for registration should suggest an effort to imitate. The important issue is
whether the use of the marks involved would likely cause confusion or mistake in the
mind of or deceive the ordinary purchaser, or one who is accustomed to buy, and
therefore to some extent familiar with, the goods in question. Given greater consideration
are the aural and visual impressions created by the marks in the public mind, giving little
weight to factors like prices, quality, sales outlets, and market segments.

B. The totality or holistic test only relies on visual comparison between two
trademarks.

6. Section 123.l(d) of the IP Code provides:

A mark cannot be registered if it:

xxxx

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

i. The same goods or services, or

 ii. Closely related goods or services, or

iii. If it nearly resembles such a mark as to be likely to deceive or cause confusion[.]

A scrutiny of petitioner's and respondent's respective marks would show that the IPO-
BLA and the IPO Director General correctly found the word "PAPA" as the dominant
feature of petitioner's mark "PAPA KETSARAP." Contrary to respondent's contention,
"KETSARAP" cannot be the dominant feature of the mark as it is merely descriptive of
the product. Furthermore, it is the "PAPA" mark that has been in commercial use for
decades and has established awareness and goodwill among consumers.

We likewise agree with the IPO-BLA that the word "PAPA" is also the dominant feature
of respondent's "PAPA BOY & DEVICE" mark subject of the application, such that "the
word 'PAPA' is written on top of and before the other words such that it is the first
word/figure that catches the eyes."49 Furthermore, as the IPO Director General put it, the
part of respondent's mark which appears prominently to the eyes and ears is the phrase
"PAPA BOY" and that is what a purchaser of respondent's product would immediately
recall, not the smiling hog.

We quote the relevant portion of the IPO-BLA decision on this point below:

A careful examination of Opposer's and Respondent-applicant's respective marks shows

that the word "PAPA" is the dominant feature: In Opposer's marks, the word "PAPA" is
either the mark by itself or the predominant word considering its stylized font and the
conspicuous placement of the word "PAPA" before the other words. In Respondent-
applicant's mark, the word "PAPA" is written on top of and before the other words such
that it is the first word figure that catches the eyes. The visual and aural impressions
created by such dominant word "PAPA" at the least is that the respective goods of the
parties originated from the other, or that one party has permitted or has been given license
to the other to use the word "PAPA" for the other party's product, or that there is a
relation/connection between the two parties when, in fact, there is none. This is especially
true considering that the products of both parties belong to the same class and are closely
related: Catsup and lechon sauce or liver sauce are both gravy-like condiments used to
spice up dishes. Thus, confusion of goods and of business may likely result.

Under the Dominancy Test, the dominant features of the competing marks are considered
in determining whether these competing marks are confusingly similar. Greater weight is
given to the similarity of the appearance of the products arising from the adoption of the
dominant features of the registered mark, disregarding minor differences. The visual,
aural, connotative, and overall comparisons and impressions engendered by the marks in
controversy as they are encountered in the realities of the marketplace are the main
considerations. If the competing trademark contains the main or essential or dominant
features of another, and confusion and deception is likely to result, infringement takes
place. Duplication or imitation is not necessary; nor is it necessary that the infringing
label should suggest an effort to imitate. Actual confusion is not required: Only likelihood
of confusion on the part of the buying public is necessary so as to render two marks
confusingly similar so as to deny the registration of the junior mark.

7. As to the issue of whether PAPA BOY is confusingly similar to Opposer's PAPA mark,
this Bureau rules in the affirmative.

Though Respondent-applicant was first to file the subject application on April 04, 2002
vis-a-vis the mark "PAP A" the filing date of which is reckoned on October 28, 2005, and
the mark "PAPA LABEL DESIGN" the filing date of which is reckoned on November 15,
2006, Opposer was able to secure a registration for the mark "PAPA KETSARAP" on
August 23, 1985 considering that Opposer was the prior registrant and that its renewal
application timely filed on August 23, 2005.

xxxx

Pursuant to [Section 123 .1 (d) of the IP Code], the application for registration of the
subject mark cannot be allowed considering that Opposer was earlier registrant of the
marks PAPA and PAPA KETSARAP which registrations were timely renewed upon its
expiration. Respondent-applicant's mark "PAPA BOY & DEVICE" is confusingly similar
to Opposer's mark "PAPA KETSARAP" and is applied to goods that are related to
Opposer's goods, but Opposer's mark "PAPA KETSARAP" was registered on August 23,
1985 per Certificate of Registration No. 34681, which registration was renewed for a
period of 10 years counted from August 23, 2005 per Certificate of Renewal of
Registration No. 34681 issued on August 23, 2005. To repeat, Opposer has already
registered a mark which Respondent-applicant's mark nearly resembles as to likely
deceive or cause confusion as to origin and which is applied to goods to which
respondent-applicant's goods under Class 30 are closely related.1âwphi1

Section 138 of the IP Code provides that a certificate of registration of a mark is prima
facie evidence of the validity of the registration, the registrant's ownership of the mark,
and of the registrant's exclusive right to use the same in connection with the goods and
those that are related thereto specified in the certificate.50

We agree that respondent's mark cannot be registered. Respondent's mark is related

to a product, lechon sauce, an everyday all-purpose condiment and sauce, that is not
subjected to great scrutiny and care by the casual purchaser, who knows from
regular visits to the grocery store under what aisle to find it, in which bottle it is
contained, and approximately how much it costs. Since petitioner's product, catsup,
is also a household product found on the same grocery aisle, in similar packaging,
the public could think that petitioner had expanded its product mix to include
lechon sauce, and that the "PAPA BOY" lechon sauce is now part of the "PAPA"
family of sauces, which is not unlikely considering the nature of business that
petitioner is in. Thus, if allowed. registration, confusion of business may set in, and
petitioner's hard-earned goodwill may be associated to the newer product
introduced by respondent, all because of the use of the dominant feature of
petitioner's mark on respondent's mark, which is the word "PAPA." The words
"Barrio Fiesta" are not included in the mark, and although printed on the label of
respondent's lechon sauce packaging, still do not remove the impression that "PAPA
BOY" is a product owned by the manufacturer of "PAPA" catsup, by virtue of the
use of the dominant feature. It is possible that petitioner could expand its business to
include lechon sauce, and that would be well within petitioner's rights, but the
existence of a "PAPA BOY" lechon sauce would already eliminate this possibility
and deprive petitioner of its rights as an owner of a valid mark included in the
Intellectual Property Code.

The Court of Appeals likewise erred in finding that "PAPA," being a common term
of endearment for one's father, is a word over which petitioner could not claim
exclusive use and ownership. The Merriam-Webster dictionary defines "Papa"
simply as "a person's father." True, a person's father has no logical connection with
catsup products, and that precisely makes "PAPA" as an arbitrary mark capable of
being registered, as it is distinctive, coming from a family name that started the
brand several decades ago. What was registered was not the word "Papa" as
defined in the dictionary, but the word "Papa" as the last name of the original
owner of the brand. In fact, being part of several of petitioner's marks, there is no
question that the IPO has found "PAPA" to be a registrable mark.