33. DEL MONTE CORPORATION vs.
CA and SUNSHINE SAUCE reproduction, counterfeit copy or colorable imitation to labels,
The petitioners are questioning the decision of the respondent court
upholding the dismissal by the trial court of their complaint against the
private respondent for infringement of trademark and unfair competition.
Petitioner Del Monte Corporation is a foreign company organized under
the laws of the United States and not engaged in business in the
Philippines. Both the Philippines and the United States are signatories to
the Convention of Paris of September 27, 1965, which grants to the
nationals of the parties rights and advantages which their own nationals
enjoy for the repression of acts of infringement and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic
corporation duly organized under the laws of the Philippines. On April 11,
1969, Del Monte granted Philpack the right to manufacture, distribute and
sell in the Philippines various agricultural products, including catsup, under
the Del Monte trademark and logo.
On October 27,1965, Del Monte authorized Philpack to register with the
Philippine Patent Office the Del Monte catsup bottle configuration, for
which it was granted Certificate of Trademark Registration No. SR-913 by
the Philippine Patent Office under the Supplemental Register. 1 On
November 20, 1972, Del Monte also obtained two registration certificates
for its trademark "DEL MONTE" and its logo. 2
Respondent Sunshine Sauce Manufacturing Industries was issued a
Certificate of Registration by the Bureau of Domestic Trade on April
17,1980, to engage in the manufacture, packing, distribution and sale of
various kinds of sauce, identified by the logo Sunshine Fruit Catsup. 3
This logo was registered in the Supplemental Register on September 20,
1983. 4
The product itself was contained in various kinds of bottles, including the
Del Monte bottle, which the private respondent bought from the junk
shops for recycling.
Having received reports that the private respondent was using its
exclusively designed bottles and a logo confusingly similar to Del Monte's,
Philpack warned it to desist from doing so on pain of legal action.
Thereafter, claiming that the demand had been ignored, Philpack and Del
Monte filed a complaint against the private respondent for infringement of
trademark and unfair competition, with a prayer for damages and the
issuance of a writ of preliminary injunction. 5
In its answer, Sunshine alleged that it had long ceased to use the Del
Monte bottle and that its logo was substantially different from the Del
Monte logo and would not confuse the buying public to the detriment of
the petitioners. 6
After trial, the Regional Trial Court of Makati dismissed the complaint. It
held that there were substantial differences between the logos or
trademarks of the parties; that the defendant had ceased using the
petitioners' bottles; and that in any case the defendant became the owner
of the said bottles upon its purchase thereof from the junk yards.
Furthermore, the complainants had failed to establish the defendant's
malice or bad faith, which was an essential element of infringement of
trademark or unfair competition. 7
This decision was affirmed in toto by the respondent court, which is now
faulted in this petition for certiorari under Rule 45 of the Rules of Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law,
provides in part as follows:
Sec. 22. Infringement, what constitutes. — Any person who
shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any
registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely to
cause confusion or mistake or to deceive purchasers or others
as to the source or origin of such goods or services or identity
of such business; or reproduce, counterfeit copy or colorably
imitate any such mark or trade name and apply such
signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with
such goods, business or services, shall be liable to a civil action
by the registrant for any or all of the remedies herein provided.
Sec. 29 of the same law states as follows:
Sec. 29. Unfair competition, rights and remedies. — 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 mark or tradename 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. Such a person shall have the
remedies provided in section twenty- three, Chapter V hereof.
Any person who shall employ deception or any other means
contrary to good faith by which he shall pass 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 shall commit any acts calculated to produce said result,
shall be guilty of unfair competition, and shall be subject to an
action therefor.
In particular, and without in any way limiting the scope of unfair
competition, the following shall be deemed guilty of unfair
competition:
(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 likely 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 ally 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; or
(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.
To arrive at a proper resolution of this case, it is important to
bear in mind the following distinctions between infringement of
trademark and 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. 8
In the challenged decision, the respondent court cited the
following test laid down by this Court in a number of cases:
 In determining whether two trademarks are
confusingly similar, the two marks in their entirety as
they appear in the respective labels must be
considered in relation to the goods to which they are
attached; the discerning eye of the observer must
focus not only on the predorninant words but also
on the other features appearing on both labels. 9
and applying the same, held that there was no colorable
imitation of the petitioners' trademark and logo by the private
respondent. The respondent court agreed with the findings of
the trial court that:
In order to resolve the said issue, the Court now attempts to make a
comparison of the two products, to wit:
1. As to the shape of label or make:
Del Monte: Semi-rectangular with a crown or
tomato shape design on top of the rectangle.
Sunshine: Regular rectangle.
2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or mark:
Del Monte: Clearly indicated words packed by Sysu
International, Inc., Q.C., Philippines.
Sunshine: Sunshine fruit catsup is clearly indicated
"made in the Philippines by Sunshine Sauce
Manufacturing Industries" No. 1 Del Monte Avenue,
Malabon, Metro Manila.
4. As to color of logo:
Del Monte: Combination of yellow and dark red,
with words "Del Monte Quality" in white.
Sunshine: White, light green and light red, with
words "Sunshine Brand" in yellow.
5. As to shape of logo:
Del Monte: In the shape of a tomato.
Sunshine: Entirely different in shape.
6. As to label below the cap:
Del Monte: Seal covering the cap down to the neck
of the bottle, with picture of tomatoes with words
"made from real tomatoes."
Sunshine: There is a label below the cap which says
"Sunshine Brand."
7. As to the color of the products:
Del Monte: Darker red.
Sunshine: Lighter than Del Monte.
While the Court does recognize these distinctions, it does not agree with
the conclusion that there was no infringement or unfair competition. It
seems to us that the lower courts have been so pre-occupied with the
details that they have not seen the total picture.
It has been correctly held that side-by-side comparison is not the final test
of similarity. 10 Such comparison requires a careful scrutiny to determine in
what points the labels of the products differ, as was done by the trial
judge. The ordinary buyer does not usually make such scrutiny nor does he
usually have the time to do so. The average shopper is usually in a hurry
and does not inspect every product on the shelf as if he were browsing in a
library. Where the housewife has to return home as soon as possible to her
baby or the working woman has to make quick purchases during her off
hours, she is apt to be confused by similar labels even if they do have
minute differences. The male shopper is worse as he usually does not
bother about such distinctions.
The question is not whether the two articles are distinguishable by their
label when set side by side but whether the general confusion made by the
article upon the eye of the casual purchaser who is unsuspicious and off
his guard, is such as to likely result in his confounding it with the
original. 11 As observed in several cases, the general impression of the
ordinary purchaser, buying under the normally prevalent conditions in
trade and giving the attention such purchasers usually give in buying that
class of goods is the touchstone. 12
It has been held that in making purchases, the consumer must depend
upon his recollection of the appearance of the product which he intends to
purchase. 13 The buyer having in mind the mark/label of the respondent
must rely upon his memory of the petitioner's mark. 14 Unlike the judge
who has ample time to minutely examine the labels in question in the
comfort of his sala, the ordinary shopper does not enjoy the same
opportunity.
A number of courts have held that to determine whether a trademark has
been infringed, we must consider the mark as a whole and not as
dissected. If the buyer is deceived, it is attributable to the marks as a
totality, not usually to any part of it. 15 The court therefore should be
guided by its first impression, 16 for a buyer acts quickly and is governed by
a casual glance, the value of which may be dissipated as soon as the court
assumes to analyze carefully the respective features of the mark. 17
It has also been held that it is not the function of the court in cases of
infringement and unfair competition to educate purchasers but rather to
take their carelessness for granted, and to be ever conscious of the fact
that marks need not be identical. A confusing similarity will justify the
intervention of equity. 18 The judge must also be aware of the fact that
usually a defendant in cases of infringement does not normally copy but
makes only colorable changes. 19Well has it been said that the most
successful form of copying is to employ enough points of similarity to
confuse the public with enough points of difference to confuse the
courts. 20
We also note that the respondent court failed to take into consideration
several factors which should have affected its conclusion, to wit: age,
training and education of the usual purchaser, the nature and cost of the
article, whether the article is bought for immediate consumption and also
the conditions under which it is usually purchased . 21Among these, what
essentially determines the attitude 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. 22 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. 23 In this latter category
is catsup.
At that, even if the labels were analyzed together it is not difficult to see
that the Sunshine label is a colorable imitation of the Del Monte
trademark. The predominant colors used in the Del Monte label are green
and red-orange, the same with Sunshine. The word "catsup" in both
bottles is printed in white and the style of the print/letter is the same.
Although the logo of Sunshine is not a tomato, the figure nevertheless
approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not
normally copy out but only makes colorable changes, employing enough
points of similarity to confuse the public with enough points of differences
to confuse the courts. What is undeniable is the fact that when a
manufacturer prepares to package his product, he has before him a
boundless choice of words, phrases, colors and symbols sufficient to
distinguish his product from the others. When as in this case, Sunshine
chose, without a reasonable explanation, to use the same colors and
letters as those used by Del Monte though the field of its selection was so
broad, the inevitable conclusion is that it was done deliberately to
deceive .24
It has been aptly observed that the ultimate ratio in cases of grave doubt is
the rule that as between a newcomer who by the confusion has nothing to
lose and everything to gain and one who by honest dealing has already
achieved favor with the public, any doubt should be resolved against the
newcomer inasmuch as the field from which he can select a desirable
trademark to indicate the origin of his product is obviously a large one. 25
Coming now to the second issue, we find that the private respondent is
not guilty of infringement for having used the Del Monte bottle. The
reason is that the configuration of the said bottle was merely registered in
the Supplemental Register. In the case of Lorenzana v. Macagba, 26 we
declared that:
(1) Registration in the Principal Register gives rise to a
presumption of the validity of the registration, the registrant's
ownership of the mark and his right to the exclusive use
thereof. There is no such presumption in the registration in the
Supplemental Register.
(2) Registration in the Principal Register is limited to the actual
owner of the trademark and proceedings therein on the issue
of ownership which may be contested through opposition or
interference proceedings or, after registration, in a petition for
cancellation.
Registration in the Principal Register is constructive notice of
the registrant's claim of ownership, while registration in the
Supplemental Register is merely proof of actual use of the
trademark and notice that the registrant has used or
appropriated it. It is not subject to opposition although it may
be cancelled after the issuance. Corollarily, registration in the
Principal Register is a basis for an action for infringement while
registration in the Supplemental Register is not.
(3) In applications for registration in the Principal Register,
publication of the application is necessary. This is not so in
applications for registrations in the Supplemental Register.
It can be inferred from the foregoing that although Del Monte has actual
use of the bottle's configuration, the petitioners cannot claim exclusive use
thereof because it has not been registered in the Principal Register.
However, we find that Sunshine, despite the many choices available to it
and notwithstanding that the caution "Del Monte Corporation, Not to be
Refilled" was embossed on the bottle, still opted to use the petitioners'
bottle to market a product which Philpack also produces. This clearly
shows the private respondent's bad faith and its intention to capitalize on
the latter's reputation and goodwill and pass off its own product as that of
Del Monte.
The Court observes that the reasons given by the respondent court in
resolving the case in favor of Sunshine are untenable. First, it declared that
the registration of the Sunshine label belied the company's malicious
intent to imitate petitioner's product. Second, it held that the Sunshine
label was not improper because the Bureau of Patent presumably
considered other trademarks before approving it. Third, it cited the case
of Shell Co. v. Insular Petroleum, 27 where this Court declared that selling oil
in containers of another with markings erased, without intent to deceive,
was not unfair competition.
Regarding the fact of registration, it is to be noted that the Sunshine label
was registered not in the Principal Register but only in the Supplemental
Register where the presumption of the validity of the trademark, the
registrant's ownership of the mark and his right to its exclusive use are all
absent.
Anent the assumption that the Bureau of Patent had considered other
existing patents, it is reiterated that since registration was only in the
Supplemental Register, this did not vest the registrant with the exclusive
right to use the label nor did it give rise to the presumption of the validity
of the registration.
On the argument that no unfair competition was committed, the Shell Case
is not on all fours with the case at bar because:
(1) In Shell, the absence of intent to deceive was supported by
the fact that the respondent therein, before marketing its
product, totally obliterated and erased the brands/mark of the
different companies stenciled on the containers thereof, except
for a single isolated transaction. The respondent in the present
case made no similar effort.
(2) In Shell, what was involved was a single isolated transaction.
Of the many drums used, there was only one container where
the Shell label was not erased, while in the case at hand, the
respondent admitted that it made use of several Del Monte
bottles and without obliterating the embossed warning.
(3) In Shell, the product of respondent was sold to dealers, not
to ultimate consumers. As a general rule, dealers are well
acquainted with the manufacturer from whom they make their
purchases and since they are more experienced, they cannot be
so easily deceived like the inexperienced public. There may well
be similarities and imitations which deceive all, but generally
the interests of the dealers are not regarded with the same
solicitude as are the interests of the ordinary consumer. For it is
the form in which the wares come to the final buyer that is of
significance. 28
As Sunshine's label is an infringement of the Del Monte's trademark, law
and equity call for the cancellation of the private respondent's registration
and withdrawal of all its products bearing the questioned label from the
market. With regard to the use of Del Monte's bottle, the same constitutes
unfair competition; hence, the respondent should be permanently
enjoined from the use of such bottles.
The court must rule, however, that the damage prayed for cannot be
granted because the petitioner has not presented evidence to prove the
amount thereof. Section 23 of R.A. No. 166 provides:
Sec. 23. Actions and damages and injunction for infringement.
— Any person entitled to the exclusive use of a registered mark
or trade name may recover damages in a civil action from any
person who infringes his rights, and the measure of the
damages suffered shall be either the reasonable profit which
the complaining party would have made, had the defendant not
infringed his said rights or the profit which the defendant
actually made out of the infringement, or in the event such
measure of damages cannot be readily ascertained with
reasonable certainty the court may award as damages
reasonable percentage based upon the amount of gross sales of
the defendant or the value of the services in connection with
which the mark or trade name was used in the infringement of
the rights of the complaining party. In cases where actual intent
to mislead the public or to defraud the complaining party shall
be shown, in the discretion of the court, the damages may be
doubled.
The complaining party, upon proper showing may also be
granted injunction.
Fortunately for the petitioners, they may still find some small comfort in
Art. 2222 of the Civil Code, which provides:
Art. 2222. The court may award nominal damages in every
obligation arising from any source enumerated in Art. 1157, or
in every case where any property right has been invaded.
Accordingly, the Court can only award to the petitioners, as it hereby does
award, nominal damages in the amount of Pl,000.00.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals dated December 24, 1986 and the Resolution dated April 27,1987,
are REVERSED and SET ASIDE and a new judgment is hereby rendered:
(1) Canceling the private respondent's Certificate of Register
No. SR-6310 and permanently enjoining the private respondent
from using a label similar to that of the petitioners.
(2) Prohibiting the private respondent from using the empty
bottles of the petitioners as containers for its own products.
(3) Ordering the private respondent to pay the petitioners
nominal damages in the amount of Pl,000.00, and the costs of
the suit.
SO ORDERED.
---------------
34. Berris Agricultural v. Abyadang
This petition for review[1] on certiorari under Rule 45 of the Rules of Court
seeks the reversal of the Decision dated April 14, 2008 [2] and the
Resolution dated June 18, 2008[3] of the Court of Appeals (CA) in CA-G.R. SP
No. 99928.
The antecedents
On January 16, 2004, respondent Norvy A. Abyadang (Abyadang),
proprietor of NS Northern Organic Fertilizer, with address at No. 43 Lower
QM, Baguio City, filed with the Intellectual Property Office (IPO) a
trademark application for the mark NS D-10 PLUS for use in connection
with Fungicide (Class 5) with active ingredient 80% Mancozeb. The
application, under Application Serial No. 4-2004-00450, was given due
course and was published in the IPO e-Gazette for opposition on July 28,
2005.
 On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), with
business address in Barangay Masiit, Calauan, Laguna, filed with the IPO
Bureau of Legal Affairs (IPO-BLA) a Verified Notice of Opposition [4] against
the mark under application allegedly because NS D-10 PLUS is similar
and/or confusingly similar to its registered trademark D-10 80 WP, also
used for Fungicide (Class 5) with active ingredient 80% Mancozeb. The
opposition was docketed as IPC No. 14-2005-00099.
After an exchange of pleadings, on April 28, 2006, Director Estrellita
Beltran-Abelardo (Director Abelardo) of the IPO-BLA issued Decision No.
2006-24[5] (BLA decision), the dispositive portion of which reads
WHEREFORE, viewed in the light of all the foregoing, this Bureau finds and
so holds that Respondent-Applicants mark NS D-10 PLUS is confusingly
similar to the Opposers mark and as such, the opposition is
hereby SUSTAINED. Consequently, trademark application bearing Serial
No. 4-2004-00450 for the mark NS D-10 PLUS filed on January 16, 2004 by
Norvy A. Ab[yada]ng covering the goods fungicide under Class 5 of the
International Classification of goods is, as it is hereby, REJECTED.
Let the filewrapper of the trademark NS D-10 PLUS
subject matter under consideration be forwarded to
the Administrative, Financial and Human Resources
Development Services Bureau (AFHRDSB) for
appropriate action in accordance with this Order
with a copy to be furnished the Bureau of Trademark
(BOT) for information and to update its records.
SO ORDERED.[6]
Abyadang filed a motion for reconsideration, and Berris, in turn, filed its
opposition to the motion.
On August 2, 2006, Director Abelardo issued Resolution No. 2006-09(D) [7]
(BLA resolution), denying the motion for reconsideration and disposing as
follows
IN VIEW OF THE FOREGOING, the Motion for Reconsideration filed by the
Respondent-Applicant is hereby DENIED FOR LACK OF
MERIT. Consequently, Decision No. 2006-24 dated April 28, 2006 STANDS.
Let the filewrapper of the trademark NS
D-10 PLUS subject matter under consideration be
forwarded to the Bureau of Trademarks for
appropriate action in accordance with this
Resolution.
[8]
SO ORDERED.
Aggrieved, Abyadang filed an appeal on August 22, 2006 with the Office of
the Director General, Intellectual Property Philippines (IPPDG), docketed as
Appeal No. 14-06-13.
With the filing of the parties respective memoranda, Director General
Adrian S. Cristobal, Jr. of the IPPDG rendered a decision dated July 20,
2007,[9]ruling as follows
Wherefore, premises considered[,] the appeal is hereby
DENIED.Accordingly, the appealed Decision of the Director is hereby
AFFIRMED.
Let a copy of this Decision as well as the
trademark application and records be furnished and
returned to the Director of Bureau of Legal Affairs
for appropriate action. Further, let also the Directors
of the Bureau of Trademarks, the Administrative,
Financial and Human Resources Development
Services Bureau, and the library of the
Documentation, Information and Technology
Transfer Bureau be furnished a copy of this Decision
for information, guidance, and records purposes.
SO ORDERED.[10]
Undeterred, Abyadang filed a petition for review[11] before the CA.
In its Decision dated April 14, 2008, the CA reversed the IPPDG decision. It
held
In sum, the petition should be granted due to the following reasons:
1) petitioners mark NS D-10 PLUS is not confusingly similar with
respondents trademark D-10 80 WP; 2) respondent failed to establish its
ownership of the mark D-10 80 WP and 3) respondents trademark
registration for D-10 80 WP may be cancelled in the present case to avoid
multiplicity of suits.
WHEREFORE, the petition
is GRANTED. The decision dated July 20, 2007 of the
IPO Director General in Appeal No. 14-06-13 (IPC No.
14-2005-00099) is REVERSED and SET ASIDE, and a
new one is entered giving due course to petitioners
application for registration of the mark NS D-10
PLUS, and canceling respondents trademark
registration for D-10 80 WP.
SO ORDERED.[12]
Berris filed a Motion for Reconsideration, but in its June 18, 2008
Resolution, the CA denied the motion for lack of merit. Hence, this petition
anchored on the following arguments
I. The Honorable Court of Appeals finding that there exists no
confusing similarity between Petitioners and respondents
marks is based on misapprehension of facts, surmise and
conjecture and not in accord with the Intellectual Property
Code and applicable Decisions of this Honorable Court
[Supreme Court].
II. The Honorable Court of Appeals Decision reversing and
setting aside the technical findings of the Intellectual Property
Office even without a finding or, at the very least, an
allegation of grave abuse of discretion on the part of said
agency is not in accord with law and earlier pronouncements
of this Honorable Court [Supreme Court].
III. The Honorable Court of Appeals Decision ordering
the cancellation of herein Petitioners duly registered and validly
existing trademark in the absence of a properly filed Petition for
Cancellation before the Intellectual Property Office is not in
accord with the Intellectual Property Code and applicable
Decisions of this Honorable Court [Supreme Court].[13]
The basic law on trademark, infringement, and unfair competition is
Republic Act (R.A.) No. 8293[14] (Intellectual Property Code of
the Philippines), specifically Sections 121 to 170 thereof. It took effect on
January 1, 1998. Prior to its effectivity, the applicable law was R.A. No. 166,
[15]
as amended.
Interestingly, R.A. No. 8293 did not expressly repeal in its
entirety R.A. No. 166, but merely provided in Section 239.1 [16] that Acts and
parts of Acts inconsistent with it were repealed. In other words, only in the
instances where a substantial and irreconcilable conflict is found between
the provisions of R.A. No. 8293 and of R.A. No. 166 would the provisions of
the latter be deemed repealed.
R.A. No. 8293 defines a mark as 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. [17] It
also defines a collective mark as any visible sign designated as such in the
application for registration and capable of distinguishing the origin or any
other common characteristic, including the quality of goods or services of
different enterprises which use the sign under the control of the registered
owner of the collective mark.[18]
On the other hand, R.A. No. 166 defines 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 another.[19] A trademark, being a special property, is afforded
protection by law. But for one to enjoy this legal protection, legal
protection ownership of the trademark should rightly be established.
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[20] 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
registrants ownership of the mark, and of the registrants exclusive right to
use the same in connection with the goods or services and those that are
related thereto specified in the certificate. [21] 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.[22] 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.[23] Moreover, the presumption may
likewise be defeated by evidence of prior use by another person, i.e., it will
controvert a claim of legal appropriation or of ownership based on
registration by a subsequent user. This is because a trademark is a creation
of use and belongs to one who first used it in trade or commerce. [24]
The determination of priority of use of a mark is a question of
fact.Adoption of the mark alone does not suffice. One may make
advertisements, issue circulars, distribute price lists on certain goods, but
these alone will not inure to the claim of ownership of the mark until the
goods bearing the mark are sold to the public in the market. Accordingly,
receipts, sales invoices, and testimonies of witnesses as customers, or
orders of buyers, best prove the actual use of a mark in trade and
commerce during a certain period of time.[25]
In the instant case, both parties have submitted proof to
support their claim of ownership of their respective trademarks.
Culled from the records, Berris, as oppositor to Abyadangs
application for registration of his trademark, presented the following
evidence: (1) its trademark application dated November 29, 2002 [26] with
Application No. 4-2002-0010272; (2) its IPO certificate of registration dated
October 25, 2004,[27] with Registration No. 4-2002-010272 and July 8, 2004
as the date of registration; (3) a photocopy of its packaging [28] bearing the
mark D-10 80 WP; (4) photocopies of its sales invoices and official receipts;
[29]
and (5) its notarized DAU dated April 23, 2003, [30] stating that the mark
was first used on June 20, 2002, and indicating that, as proof of actual use,
copies of official receipts or sales invoices of goods using the mark were
attached as Annex B.
On the other hand, Abyadangs proofs consisted of the
following: (1) a photocopy of the packaging[31] for his marketed fungicide
bearing mark NS D-10 PLUS; (2) Abyadangs Affidavit dated February 14,
2006,[32] stating among others that the mark NS D-10 PLUS was his own
creation derived from: N for Norvy, his name; S for Soledad, his wifes
name; D the first letter for December, his birth month; 10 for October, the
10th month of the year, the month of his business name registration; and
PLUS to connote superior quality; that when he applied for registration,
there was nobody applying for a mark similar to NS D-10 PLUS; that he did
not know of the existence of Berris or any of its products; that D-10 could
not have been associated with Berris because the latter never engaged in
any commercial activity to sell D-10 80 WP fungicide in the local market;
and that he could not have copied Berris mark because he registered his
packaging with the Fertilizer and Pesticide Authority (FPA) ahead of Berris;
(3) Certification dated December 19, 2005 [33] issued by the FPA, stating that
NS D-10 PLUS is owned and distributed by NS Northern Organic Fertilizer,
registered with the FPA since May 26, 2003, and had been in the market
since July 30, 2003; (4) Certification dated October 11, 2005 [34] issued by
the FPA, stating that, per monitoring among dealers in Region I and in the
Cordillera Administrative Region registered with its office, the Regional
Officer neither encountered the fungicide with mark D-10 80 WP nor did
the FPA provincial officers from the same area receive any report as to the
presence or sale of Berris product; (5) Certification dated March 14,
2006[35] issued by the FPA, certifying that all pesticides must be registered
with the said office pursuant to Section 9 [36] of Presidential Decree (P.D.)
No. 1144[37] and Section 1, Article II of FPA Rules and Regulations No. 1,
Series of 1977; (6) Certification dated March 16, 2006 [38] issued by the FPA,
certifying that the pesticide D-10 80 WP was registered by Berris on
November 12, 2004; and (7) receipts from Sunrise Farm Supply [39] in La
Trinidad, Benguet of the sale of Abyadangs goods referred to as D-10 and
D-10+.
Based on their proffered pieces of evidence, both Berris and
Abyadang claim to be the prior user of their respective marks.
We rule in favor of Berris.
Berris was able to establish that it was using its mark D-10 80
WP since June 20, 2002, even before it filed for its registration with the IPO
on November 29, 2002, as shown by its DAU which was under oath and
notarized, bearing the stamp of the Bureau of Trademarks of the IPO on
April 25, 2003,[40] and which stated that it had an attachment as Annex B
sales invoices and official receipts of goods bearing the mark. Indeed, the
DAU, being a notarized document, especially when received in due course
by the IPO, is evidence of the facts it stated and has the presumption of
regularity, entitled to full faith and credit upon its face. Thus, the burden of
proof to overcome the presumption of authenticity and due execution lies
on the party contesting it, and the rebutting evidence should be clear,
strong, and convincing as to preclude all controversy as to the falsity of the
certificate.[41]What is more, the DAU is buttressed by the Certification
dated April 21, 2006[42] issued by the Bureau of Trademarks that Berris
mark is still valid and existing.
Hence, we cannot subscribe to the contention of Abyadang
that Berris DAU is fraudulent based only on his assumption that Berris
could not have legally used the mark in the sale of its goods way back in
June 2002 because it registered the product with the FPA only on
November 12, 2004. As correctly held by the IPPDG in its decision on
Abyadangs appeal, the question of whether or not Berris violated P.D. No.
1144, because it sold its product without prior registration with the FPA, is
a distinct and separate matter from the jurisdiction and concern of the
IPO. Thus, even a determination of violation by Berris of P.D. No. 1144
would not controvert the fact that it did submit evidence that it had used
the mark D-10 80 WP earlier than its FPA registration in 2004.
Furthermore, even the FPA Certification dated October 11,
2005, stating that the office had neither encountered nor received reports
about the sale of the fungicide D-10 80 WP within Region I and the
Cordillera Administrative Region, could not negate the fact that Berris was
selling its product using that mark in 2002, especially considering that it
first traded its goods in Calauan, Laguna, where its business office is
located, as stated in the DAU.
Therefore, Berris, as prior user and prior registrant, is the
owner of the mark D-10 80 WP. As such, Berris has in its favor the rights
conferred by Section 147 of R.A. No. 8293, which provides
Sec. 147. Rights Conferred.
147.1. The owner of a registered mark
shall have the exclusive right to prevent all third
parties not having the owners 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.
147.2. The exclusive right of the owner
of a well-known mark defined in Subsection 123.1(e)
which is registered in the Philippines, shall extend to
goods and services which are not similar to those in
respect of which the mark is registered: Provided,
That use of that mark in relation to those goods or
services would indicate a connection between those
goods or services and the owner of the registered
mark: Provided, further, That the interests of the
owner of the registered mark are likely to be
damaged by such use.
Now, we confront the question, Is Abyadangs mark NS D-10
PLUS confusingly similar to that of Berris D-10 80 WP such that the latter
can rightfully prevent the IPO registration of the former?
We answer in the affirmative.
According to Section 123.1(d) of R.A. No. 8293, a mark cannot
be registered if it is identical with a registered mark belonging to a
different proprietor with an earlier filing or priority date, with respect to:
(1) the same goods or services; (2) closely related goods or services; or (3)
near resemblance of such mark as to likely deceive or cause confusion.
In determining similarity and likelihood of confusion,
jurisprudence has developed teststhe Dominancy Test and the Holistic or
Totality Test. 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.[43]
 In contrast, the Holistic or Totality Test necessitates a
consideration of the entirety of the marks as applied to the products,
including the labels and packaging, in determining confusing similarity. The
discerning eye of the observer must focus not only on the predominant
words but also on the other features appearing on both labels so that the
observer may draw conclusion on whether one is confusingly similar to the
other.[44]
Comparing Berris mark D-10 80 WP with Abyadangs mark NS
D-10 PLUS, as appearing on their respective packages, one cannot but
notice that both have a common component which is D-10. On Berris
package, the D-10 is written with a bigger font than the 80 WP. Admittedly,
the D-10 is the dominant feature of the mark. The D-10, being at the
beginning of the mark, is what is most remembered of it. Although, it
appears in Berris certificate of registration in the same font size as the 80
WP, its dominancy in the D-10 80 WP mark stands since the difference in
the form does not alter its distinctive character.[45]
Applying the Dominancy Test, it cannot be gainsaid that
Abyadangs NS D-10 PLUS is similar to Berris D-10 80 WP, that confusion or
mistake is more likely to occur. Undeniably, both marks pertain to the same
type of goods fungicide with 80% Mancozeb as an active ingredient and
used for the same group of fruits, crops, vegetables, and ornamental
plants, using the same dosage and manner of application. They also belong
to the same classification of goods under R.A. No. 8293. Both depictions of
D-10, as found in both marks, are similar in size, such that this portion is
what catches the eye of the purchaser. Undeniably, the likelihood of
confusion is present.
This likelihood of confusion and mistake is made more manifest
when the Holistic Test is applied, taking into consideration the packaging,
for both use the same type of material (foil type) and have identical color
schemes (red, green, and white); and the marks are both predominantly
red in color, with the same phrase BROAD SPECTRUM FUNGICIDE written
underneath.
Considering these striking similarities, predominantly the D-10,
the buyers of both products, mainly farmers, may be misled into thinking
that NS D-10 PLUS could be an upgraded formulation of the D-10 80 WP.
Moreover, notwithstanding the finding of the IPPDG that the D-
10 is a fanciful component of the trademark, created for the sole purpose
of functioning as a trademark, and does not give the name, quality, or
description of the product for which it is used, nor does it describe the
place of origin, such that the degree of exclusiveness given to the mark is
closely restricted,[46] and considering its challenge by Abyadang with
respect to the meaning he has given to it, what remains is the fact that
Berris is the owner of the mark D-10 80 WP, inclusive of its dominant
feature D-10, as established by its prior use, and prior registration with the
IPO. Therefore, Berris properly opposed and the IPO correctly rejected
Abyadangs application for registration of the mark NS D-10 PLUS.
Verily, the protection of trademarks as intellectual property is
intended not only to preserve the goodwill and reputation of the business
established on the goods bearing the mark through actual use over a
period of time, but also to safeguard the public as consumers against
confusion on these goods.[47] On this matter of particular concern,
administrative agencies, such as the IPO, by reason of their special
knowledge and expertise over matters falling under their jurisdiction, are
in a better position to pass judgment thereon. Thus, their findings of fact in
that regard are generally accorded great respect, if not finality by the
courts, as long as they are supported by substantial evidence, even if such
evidence might not be overwhelming or even preponderant. It is not the
task of the appellate court to weigh once more the evidence submitted
before the administrative body and to substitute its own judgment for that
of the administrative agency in respect to sufficiency of evidence.[48]
Inasmuch as the ownership of the mark D-10 80 WP fittingly
belongs to Berris, and because the same should not have been cancelled
by the CA, we consider it proper not to belabor anymore the issue of
whether cancellation of a registered mark may be done absent a petition
for cancellation.
WHEREFORE, the petition is GRANTED. The assailed Decision
dated April 14, 2008 and Resolution dated June 18, 2008 of the Court of
Appeals in CA-G.R. SP No. 99928 are REVERSED and SET ASIDE.Accordingly,
the Decision No. 2006-24 dated April 28, 2006 and the Resolution No.
2006-09(D) dated August 2, 2006 in IPC No. 14-2005-00099, and the
Decision dated July 20, 2007 in Appeal No. 14-06-13
are REINSTATED. Costs against respondent.
SO ORDERED.
35. 246 CORPORATION, doing business under the name and style of
ROLEX MUSIC LOUNGE, petitioner, vs. HON. REYNALDO B.
DAWAY
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure assailing the November 28, 2002 Decision [1] of the
Court of Appeals in CA-G.R. SP No. 64660 which dismissed the petition
for certiorari filed by petitioner, as well as the Resolution[2] dated February
13, 2003 denying its motion for reconsideration.
The undisputed facts show that on November 26, 1998,
respondents MontresRolex S.A. and Rolex Centre Phil., Limited,
owners/proprietors of Rolex and Crown Device, filed against petitioner 246
Corporation the instant suit for trademark infringement and damages with
prayer for the issuance of a restraining order or writ of preliminary
injunction[3] before the Regional Trial Court of Quezon City, Branch
90. Respondents alleged that sometime in July 1996, petitioner adopted
and, since then, has been using without authority the mark Rolex in its
business name Rolex Music Lounge as well as in its newspaper
advertisements as Rolex Music Lounge, KTV, Disco & Party Club.
In its answer raising special affirmative defenses, petitioner argued
that respondents have no cause of action because no trademark
infringement exist; that no confusion would arise from the use by
petitioner of the mark Rolex considering that its entertainment business is
totally unrelated to the items catered by respondents such as watches,
clocks, bracelets and parts thereof. It also contended that the complaint
was not properly verified and certified against forum shopping considering
that Atty. Alonzo Ancheta, the counsel of record of respondents who
signed the verification and certification, was not authorized to represent
respondents.[4]
On July 21, 2000, petitioner filed a motion for preliminary hearing
on its affirmative defenses.[5] Subsequently, on motion of petitioner, the
trial court issued a subpoena ad testificandum requiring Atty.
Alonzo Ancheta to appear at the preliminary hearing. [6] Respondents, in
the meantime, filed a Comment and Opposition [7] to the motion for
preliminary hearing and a motion to quash the subpoena ad testificandum.
In an Order dated October 27, 2000, the trial court quashed the
subpoena ad testificandum and denied petitioners motion for preliminary
hearing on affirmative defenses with motion to dismiss.[8]
With the denial of the motion for reconsideration on March 16,
2001, petitioner filed a petition for certiorari with the Court of Appeals
contending that the trial court gravely abused its discretion in issuing the
October 27, 2000 and March 16, 2001 orders.
On November 28, 2002, the Court of Appeals dismissed the
petition. The motion for reconsideration filed by petitioner was
denied. Hence, the instant petition anchored on the following grounds:
I
IN ISSUING THE ASSAILED DECISIONS, THE HONORABLE
COURT OF APPEALS PERFUNCTORILY BRUSHED ASIDE THE
CONTROLLING PRECEDENTS LAID DOWN BY THIS
HONORABLE COURT IN ESSO STANDARD EASTERN, INC. VS.
COURT OF APPEALS AND UNITED CIGARETTE CORPORATION
AND OTHER COMPANION CASES HOLDING THAT NO
TRADEMARK INFRINGEMENT CAN POSSIBLY OCCUR WHERE
THE CONTENDING PARTIES DEAL WITH GOODS AND
SERVICES THAT ARE TOTALLY UNRELATED AND NON-
COMPETING WITH EACH OTHER.
II
IN ARBITRARILY AND CAPRICIOUSLY RULING THAT THE ISSUES
RAISED IN PETITIONERS CERTIORARI PETITION ARE
QUESTIONS OF FACT, THE HONORABLE COURT OF APPEALS
VIOLATED NOT ONLY PETITIONERS SUBSTANTIVE DUE
PROCESS RIGHTS BUT ALSO THE WELL-SETTLED RULE THAT
THE ALLEGATIONS OF THE COMPLAINT IS HYPOTHETICALLY
 ADMITTED WHEN THE MOTION TO DISMISS IS GROUNDED
UPON LACK OF CAUSE OF ACTION. MOREOVER,
INDEPENDENT OF THE HYPOTHETICALLY ADMITTED FACTS
EMBODIED IN THE COMPLAINT A QUO, THERE ARE SELF-
EVIDENT FACTS AND IMPLIEDLY ADMITTED FACTS
CONTAINED IN PRIVATE RESPONDENTS PLEADINGS THAT
WOULD CLEARLY AND UNMISTAKABLY SHOW PRIVATE
RESPONDENTS LACK OF CAUSE OF ACTION AGAINST HEREIN
PETITIONER.
III
THE HONORABLE COURT OF APPEALS VIOLATED PETITIONERS
RIGHT TO SUBSTANTIVE DUE PROCESS WHEN IT ARBITRARILY
AND CAPRICIOUSLY RULED THAT WHAT WAS SPECIFICALLY
DENIED IN THE ASSAILED OCTOBER 20, 2000 ORDER IS
PETITIONERS MOTION FOR PRELIMINARY HEARING ON
DEFENDANTS AFFIRMATIVE DEFENSES AND NOT
PETITIONERS MOTION TO DISMISS PER SE CONSIDERING
THAT:
A. THERE IS ABSOLUTELY NOTHING IN THE ORDER DATED OCTOBER 20, 2000 OF
RESPONDENT JUDGE WHICH SUGGESTS THAT THE RESOLUTION OF
PETITIONERS MOTION TO DISMISS PER SE WAS HELD IN ABEYANCE BY THE
RESPONDENT JUDGE. HENCE THE SAID ORDER DATED OCTOBER 20, 2000
ALSO CONSTITUTES A DENIAL ON THE MERITS OF PETITIONERS MOTION
TO DISMISS PER SE AND NOT MERELY OF PETITIONERS MOTION FOR
PRELIMINARY HEARING THEREON.
B. PRIVATE RESPONDENTS COMMENT AND OPPOSITION DATED 11 AUGUST 2000,
WHICH WAS CITED AND SUSTAINED BY RESPONDENT JUDGE, CLEARLY
TRAVERSED THE MERITS OF THE GROUNDS FOR PETITIONERS MOTION TO
DISMISS PER SE. HENCE, THE SAID 20 OCTOBER 2000 ORDERS DENIAL OF
PETITIONERS MOTION IS NOT LIMITED TO THE MOTION FOR PRELIMINARY
HEARING BUT ALSO CONSTITUTES A DENIAL OF PETITIONERS MOTION TO
DISMISS PER SE.
IV
IN ARBITRARILY AND CAPRICIOUSLY RULING THAT ATTY.
ALONZO ANCHETA PROPERLY VERIFIED AND CERTIFIED
PRIVATE RESPONDENTS COMPLAINT A QUO, THE
HONORABLE COURT OF APPEALS VIOLATED NOT ONLY
PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO
THE DOCTRINE OF SEPARATE CORPORATE PERSONALITY;
CONSIDERING THAT THE RECORDS OF THIS CASE IS (sic)
COMPLETELY BEREFT AND DEVOID OF ANY DULY EXECUTED
SPECIAL POWER OF ATTORNEY, EMANATING FROM PRIVATE
RESPONDENTS, WHICH EXPLICITLY AND SPECIFICALLY
AUTHORIZES ATTY. ALONZO ANCHETA TO REPRESENT
PRIVATE RESPONDENTS MONTRES ROLEX S.A. IN THE FILING
OF THE COMPLAINT A QUO. BY REASON THEREOF, PRIVATE
RESPONDENTS COULD NOT BE DEEMED TO HAVE
VOLUNTARILY APPEARED BEFORE THE RESPONDENT JUDGE;
CONSEQUENTLY, THE TRIAL COURT COULD NOT HAVE
VALIDLY ACQUIRED JURISDICTION OVER THE PERSON OF
PRIVATE RESPONDENTS.
V
IN ARBITRARILY AND CAPRICIOUSLY AFFIRMING RESPONDENT
JUDGES QUASHAL OF THE SUBPOENA DATED 14 AUGUST
2000 DIRECTED AGAINST ATTY. ALONZO ANCHETA, THE
HONORABLE COURT OF APPEALS VIOLATED NOT ONLY
PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO
SECTION 9, RULE 132 AND SECTION 7 RULE 133 OF THE 1989
REVISED RULES ON EVIDENCE, AND THE RULING OF THIS
HONORABLE COURT IN THE CASE OF PEOPLE VS. RIVERA. [9]
Simply put, the issues are as follows (1) whether the trial court
denied not only petitioners motion for preliminary hearing on its
affirmative defenses but its motion to dismiss as well; (2) if the answer is in
the affirmative, whether or not the trial court gravely abused its discretion
in denying said motions; and (3) whether the trial court gravely abused its
discretion in quashing the subpoena ad testificandumissued against
Atty. Ancheta.
Anent the first issue, we find that what was denied in the order
dated October 27, 2000 was not only the motion for preliminary hearing
but the motion to dismiss as well. A reading of the dispositive portion of
said order shows that the trial court neither qualified its denial nor held in
abeyance the ruling on petitioners motion to dismiss thus
IN VIEW OF THE FOREGOING, the aforecited Motion To Quash Subpoena
Ad Testificandum is granted; and the aforecited Motion For Preliminary
Hearing On Defendants Affirmative Defenses With Motion To dismiss The
Instant Complaint Based On Said Affirmative Defenses is denied.
[10]
(Emphasis supplied)
In issuing the assailed order, the trial court ruled on the merits of
petitioners Motion to Dismiss vis--vis respondents Comment and
Opposition which clearly traversed the affirmative defenses raised by
petitioner, to wit:
After carefully going over the pleadings, this Court finds, on the first
motion that the arguments raised in the said motion and the reply filed in
connection thereto appear to be meritorious; and on the second motion,
that the arguments raised in the comments and opposition and the
rejoinder filed by the plaintiffs likewise appear to be meritorious.[11]
Moreover, it is presumed that all matters within an issue raised in a
case were passed upon by the court. In the absence of evidence to the
contrary, the presumption is that the court a quo discharged its task
properly.[12]
In Municipality of Bian Laguna v. Court of Appeals,[13] decided under
the old Rules of Civil Procedure, it was held that a preliminary hearing
permitted under Rule 16, Section 5, is not mandatory even when the same
is prayed for. It rests largely on the sound discretion of the trial court, thus
SEC. 5. Pleading grounds as affirmative defenses. Any of the grounds for
dismissal provided for in this Rule, except improper venue, may be pleaded
as an affirmative defense, and a preliminary hearing may be had thereon
as if a motion to dismiss had been filed. (Emphasis supplied)
The use of the word "may" in the aforequoted provision shows that such a
hearing is not a matter of right demandable from the trial court; it is not
mandatory but discretionary. May is an auxiliary verb indicating liberty,
opportunity, permission and possibility.[14] Such interpretation is specifically
stated under the 1997 Rules of Civil Procedure. Rule 16, Section 6, now
provides that a grant of a preliminary hearing rests on the
sound discretion of the court, to wit
SEC. 6. Pleading grounds as affirmative defenses. If no motion to dismiss
has been filed, any of the grounds for dismissal provided for in this Rule
may be pleaded as an affirmative defense in the answer and, in the
discretion of the court, a preliminary hearing may be had thereon as if a
motion to dismiss had been filed. (Emphasis supplied)
In the case at bar, the Court of Appeals did not err in finding that no
abuse of discretion could be ascribed to the trial courts denial of
petitioners motion for preliminary hearing on its affirmative defenses with
motion to dismiss. The issue of whether or not a trademark infringement
exists, is a question of fact that could best be determined by the trial court.
Under the old Trademark Law[15] where the goods for which the
identical marks are used are unrelated, there can be no likelihood of
confusion and there is therefore no infringement in the use by the junior
user of the registered mark on the entirely different goods. [16] This ruling,
however, has been to some extent, modified by Section 123.1(f) of the
Intellectual Property Code (Republic Act No. 8293), which took effect on
January 1, 1998. The said section reads:
Sec. 123. Registrability. 123.1. A mark cannot be registered if it:
xxxxxxxxx
(f) Is identical with, or confusingly similar to, or constitutes a translation of
a mark considered well-known in accordance with the preceding
paragraph, which is registered in the Philippines with respect to goods or
services which are not similar to those with respect to which registration is
applied for: Provided, That use of the mark in relation to those goods or
services would indicate a connection between those goods or services, and
the owner of the registered mark: Provided, further, That the interest of
the owner of the registered mark are likely to be damaged by such use;
(Emphasis supplied)
A junior user of a well-known mark on goods or services which are
not similar to the goods or services, and are therefore unrelated, to those
specified in the certificate of registration of the well-known mark is
precluded from using the same on the entirely unrelated goods or services,
subject to the following requisites, to wit:
1. The mark is well-known internationally and in the Philippines. Under
Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Trade
Names and Marked or Stamped Containers, [17] in determining whether a
mark is well known, the following criteria or any combination thereof may
be taken into account:
reason of passion or personal hostility, and it must be so patent and gross
as to amount to an evasion of positive duty or to a virtual refusal to
perform the duty enjoined or to act at all in contemplation of law. None of
these was committed by the trial court; hence, the Court of Appeals
correctly dismissed the petition.
WHEREFORE, in view of all the foregoing, the petition for review on
certiorari filed by petitioner is DENIED. The November 28, 2002 Decision
and the February 13, 2003 Resolution of the Court of Appeals in CA-G.R. SP
No. 64660 which dismissed the petition for certiorari filed by petitioner
are AFFIRMED.
SO ORDERED.

(a) the duration, extent and geographical area of any use of the mark, in
particular, the duration, extent and geographical area of any promotion of
the mark, including advertising or publicity and presentation, at fairs or
exhibitions, of the goods and/or services to which the mark applies;
(b) the market share in the Philippines and in other countries, of the goods
and/or services to which the mark applies;
(c) the degree of the inherent or acquired distinction of the mark;
(d) the quality-image or reputation acquired by the mark;
(e) the extent to which the mark has been registered in the world;
(f) the exclusivity of the registration attained by the mark in the world;
(g) the extent to which the mark has been used in the world;
(h) the exclusivity of use attained by the mark in the world;
(i) the commercial value attributed to the mark in the world;
(j) the record of successful protection of the rights in the mark;
(k) the outcome of litigations dealing with the issue of whether the mark is
a well-known mark; and

(l) the presence of absence of identical or similar marks validly registered

for or used on identical or similar goods or services and owned by persons
other than the person claiming that his mark is a well-known mark.

2. The use of the well-known mark on the entirely unrelated goods or

services would indicate a connection between such unrelated goods or
services and those goods or services specified in the certificate of
registration in the well known mark. This requirement refers to the
likelihood of confusion of origin or business or some business connection
or relationship between the registrant and the user of the mark.

3. The interests of the owner of the well-known mark are likely to be

damaged. For instance, if the registrant will be precluded from expanding
its business to those unrelated good or services, or if the interests of the
registrant of the well-known mark will be damaged because of the inferior
quality of the good or services of the user.[18]

Section 123.1(f) is clearly in point because the Music Lounge of

petitioner is entirely unrelated to respondents business involving watches,
clocks, bracelets, etc. However, the Court cannot yet resolve the merits of
the present controversy considering that the requisites for the application
of Section 123.1(f), which constitute the kernel issue at bar, clearly require
determination facts of which need to be resolved at the trial court. The
existence or absence of these requisites should be addressed in a full
blown hearing and not on a mere preliminary hearing.The respondent
must be given ample opportunity to prove its claim, and the petitioner to
debunk the same.

The same is true with respect to the issue of whether Atty.

Alonzo Ancheta was properly authorized to sign the verification and
certification against forum shopping in behalf of respondents. This could
be properly resolved during the trial together with the substantive issues
raised by petitioner.

Considering that the trial court correctly denied petitioners motion

for preliminary hearing on its affirmative defenses with motion to dismiss,
there exists no reason to compel Atty. Ancheta to testify. Hence, no abuse
of discretion was committed by the trial court in quashing the
subpoena ad testificandum issued against Atty. Ancheta.

Grave abuse of discretion implies such capricious and whimsical

exercise of judgment as equivalent to lack of jurisdiction, or, in other
words, where the power is exercised in an arbitrary or despotic manner by