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1. Mcdonald’s vs. LC Big Mak Burger, G.R. No. 143993 signages. From 1982 to 1990, McDonald’s spent P10.

90, McDonald’s spent P10.5 million in


advertisement for “Big Mac” hamburger sandwiches alone. 10
[G.R. No. 143993. August 18, 2004.]
Petitioner McGeorge Food Industries (“petitioner McGeorge”), a
domestic corporation, is McDonald’s Philippine franchisee. 11
MCDONALD’S CORPORATION and MCGEORGE FOOD
INDUSTRIES, INC., petitioners, vs. L.C. BIG MAK Respondent L.C. Big Mak Burger, Inc. (“respondent corporation”) is a
BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B. domestic corporation which operates fast-food outlets and snack vans in Metro
DY, WILLIAM B. DY, JESUS AYCARDO, ARACELI Manila and nearby provinces. 12 Respondent corporation’s menu includes
AYCARDO, and GRACE HUERTO, respondents. hamburger sandwiches and other food items. 13 Respondents Francis B. Dy,
Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo, and
Grace Huerto (“private respondents”) are the incorporators, stockholders and
directors of respondent corporation. 14
DECISION
On 21 October 1988, respondent corporation applied with the PBPTT
for the registration of the “Big Mak” mark for its hamburger sandwiches.
McDonald’s opposed respondent corporation’s application on the ground that
CARPIO, J p: “Big Mak” was a colorable imitation of its registered “Big Mac” mark for the
same food products. McDonald’s also informed respondent Francis Dy
The Case (“respondent Dy”), the chairman of the Board of Directors of respondent
corporation, of its exclusive right to the “Big Mac” mark and requested him to
This is a petition for review 1 of the Decision dated 26 November 1999 desist from using the “Big Mac” mark or any similar mark. ADaSET
of the Court of Appeals 2 finding respondent L.C. Big Mak Burger, Inc. not
liable for trademark infringement and unfair competition and ordering Having received no reply from respondent Dy, petitioners on 6 June
petitioners to pay respondents P1,900,000 in damages, and of its Resolution 1990 sued respondents in the Regional Trial Court of Makati, Branch 137
dated 11 July 2000 denying reconsideration. The Court of Appeals’ Decision (“RTC”), for trademark infringement and unfair competition. In its Order of 11
reversed the 5 September 1994 Decision 3 of the Regional Trial Court of July 1990, the RTC issued a temporary restraining order (“TRO”) against
Makati, Branch 137, finding respondent L.C. Big Mak Burger, Inc. liable for respondents enjoining them from using the “Big Mak” mark in the operation of
trademark infringement and unfair competition. their business in the National Capital Region. 15 On 16 August 1990, the RTC
issued a writ of preliminary injunction replacing the TRO. 16
The Facts
Petitioner McDonald’s Corporation (“McDonald’s”) is a corporation In their Answer, respondents admitted that they have been using the
name “Big Mak Burger” for their fast-food business. Respondents claimed,
organized under the laws of Delaware, United States. McDonald’s operates,
however, that McDonald’s does not have an exclusive right to the “Big Mac”
by itself or through its franchisees, a global chain of fast-food restaurants.
McDonald’s 4 owns a family of marks 5 including the “Big Mac” mark for its mark or to any other similar mark. Respondents point out that the Isaiyas
“double-decker hamburger sandwich.” 6 McDonald’s registered this trademark Group of Corporations (“Isaiyas Group”) registered the same mark for
with the United States Trademark Registry on 16 October 1979. 7 Based on hamburger sandwiches with the PBPTT on 31 March 1979. One Rodolfo
Topacio (“Topacio”) similarly registered the same mark on 24 June 1983, prior
this Home Registration, McDonald’s applied for the registration of the same
to McDonald’s registration on 18 July 1985. Alternatively, respondents claimed
mark in the Principal Register of the then Philippine Bureau of Patents,
Trademarks and Technology (“PBPTT”), now the Intellectual Property Office that they are not liable for trademark infringement or for unfair competition, as
the “Big Mak” mark they sought to register does not constitute a colorable
(“IPO”). Pending approval of its application, McDonald’s introduced its “Big
imitation of the “Big Mac” mark. Respondents asserted that they did not
Mac” hamburger sandwiches in the Philippine market in September 1981. On
18 July 1985, the PBPTT allowed registration of the “Big Mac” mark in the fraudulently pass off their hamburger sandwiches as those of petitioners’ Big
Principal Register based on its Home Registration in the United States. Mac hamburgers. 17 Respondents sought damages in their counterclaim.

Like its other marks, McDonald’s displays the “Big Mac” mark in In their Reply, petitioners denied respondents’ claim that McDonald’s
items 8 and paraphernalia 9 in its restaurants, and in its outdoor and indoor is not the exclusive owner of the “Big Mac” mark. Petitioners asserted that
while the Isaiyas Group and Topacio did register the “Big Mac” mark ahead of
McDonald’s, the Isaiyas Group did so only in the Supplemental Register of the
PBPTT and such registration does not provide any protection. McDonald’s competition among mushrooming hamburger stands and
disclosed that it had acquired Topacio’s rights to his registration in a Deed of multinational fast-food chains and restaurants. Hence, the
Assignment dated 18 May 1981. 18 trademark “B[ig] M[ac]” has been infringed by defendant
corporation when it used the name “B[ig] M[ak]” in its
The Trial Court’s Ruling signages, wrappers, and containers in connection with its
On 5 September 1994, the RTC rendered judgment (“RTC Decision”) food business . . .
finding respondent corporation liable for trademark infringement and unfair
competition. However, the RTC dismissed the complaint against private Did the same acts of defendants in using the name
respondents and the counterclaim against petitioners for lack of merit and “B[ig] M[ak]” as a trademark or tradename in their signages,
insufficiency of evidence. The RTC held: or in causing the name “B[ig] M[ak]” to be printed on the
wrappers and containers of their food products also
Undeniably, the mark “B[ig] M[ac]” is a registered constitute an act of unfair competition under Section 29
trademark for plaintiff McDonald’s, and as such, it is entitled of the Trademark Law?
[to] protection against infringement.
The answer is in the affirmative . . .
xxx xxx xxx
The . . . provision of the law concerning unfair
There exist some distinctions between the names competition is broader and more inclusive than the law
“B[ig] M[ac]” and “B[ig] M[ak]” as appearing in the respective concerning the infringement of trademark, which is of more
signages, wrappers and containers of the food products of limited range, but within its narrower range recognizes a
the parties. But infringement goes beyond the physical more exclusive right derived by the adoption and
features of the questioned name and the original name. registration of the trademark by the person whose goods or
There are still other factors to be considered. services are first associated therewith. . . . Notwithstanding
the distinction between an action for trademark infringement
xxx xxx xxx and an action for unfair competition, however, the law
Significantly, the contending parties are both in the extends substantially the same relief to the injured party for
business of fast-food chains and restaurants. An average both cases. (See Sections 23 and 29 of Republic Act No.
person who is hungry and wants to eat a hamburger 166)
sandwich may not be discriminating enough to look for a Any conduct may be said to constitute unfair
McDonald’s restaurant and buy a “B[ig] M[ac]” hamburger. competition if the effect is to pass off on the public the goods
Once he sees a stall selling hamburger sandwich, in all of one man as the goods of another. The choice of “B[ig]
likelihood, he will dip into his pocket and order a “B[ig] M[ak]” M[ak]” as tradename by defendant corporation is not merely
hamburger sandwich. Plaintiff McDonald’s fast-food chain for sentimental reasons but was clearly made to take
has attained wide popularity and acceptance by the advantage of the reputation, popularity and the established
consuming public so much so that its air-conditioned food goodwill of plaintiff McDonald’s. For, as stated in Section 29,
outlets and restaurants will perhaps not be mistaken by a person is guilty of unfair competition who in selling his
many to be the same as defendant corporation’s mobile goods shall give them the general appearance, of goods of
snack vans located along busy streets or highways. But the another manufacturer or dealer, either as to the goods
thing is that what is being sold by both contending parties is themselves or in the wrapping of the packages in which they
a food item — a hamburger sandwich which is for immediate are contained, or the devices or words thereon, or in any
consumption, so that a buyer may easily be confused or other feature of their appearance, which would likely
deceived into thinking that the “B[ig] M[ak]” hamburger influence purchasers to believe that the goods offered are
sandwich he bought is a food-product of plaintiff those of a manufacturer or dealer other than the actual
McDonald’s, or a subsidiary or allied outlet thereof. Surely, manufacturer or dealer. Thus, plaintiffs have established
defendant corporation has its own secret ingredients to their valid cause of action against the defendants for
make its hamburger sandwiches as palatable and as tasty trademark infringement and unfair competition and for
as the other brands in the market, considering the keen damages. 19
The dispositive portion of the RTC Decision provides: it is not sufficient that a similarity exists in both names, but
that more importantly, the over-all presentation, or in their
WHEREFORE, judgment is rendered in favor of essential, substantive and distinctive parts is such as would
plaintiffs McDonald’s Corporation and McGeorge Food likely MISLEAD or CONFUSE persons in the ordinary
Industries, Inc. and against defendant L.C. Big Mak Burger, course of purchasing the genuine article. A careful
Inc., as follows: comparison of the way the trademark “B[ig] M[ac]” is being
used by plaintiffs-appellees and corporate name L.C. Big
Mak Burger, Inc. by defendants-appellants, would readily
1. The writ of preliminary injunction issued in this reveal that no confusion could take place, or that the
case on [16 August 1990] is made permanent; ordinary purchasers would be misled by it. As pointed out
by defendants-appellants, the plaintiffs-appellees’
2. Defendant L.C. Big Mak Burger, Inc. is ordered trademark is used to designate only one product, a double
to pay plaintiffs actual damages in the amount of decker sandwich sold in a Styrofoam box with the
P400,000.00, exemplary damages in the amount of “McDonalds” logo. On the other hand, what the defendants-
P100,000.00, and attorney’s fees and expenses of litigation appellants corporation is using is not a trademark for its food
in the amount of P100,000.00; product but a business or corporate name. They use the
3. The complaint against defendants Francis B. Dy, business name “L.C. Big Mak Burger, Inc.” in their
Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, restaurant business which serves diversified food items
Araceli Aycardo and Grace Huerto, as well as all counter- such as siopao, noodles, pizza, and sandwiches such as
claims, are dismissed for lack of merit as well as for hotdog, ham, fish burger and hamburger. Secondly,
insufficiency of evidence. 20 defendants-appellants’ corporate or business name
appearing in the food packages and signages are written in
Respondents appealed to the Court of Appeals. silhouette red-orange letters with the “b” and “m” in upper
case letters. Above the words “Big Mak” are the upper case
The Ruling of the Court of Appeals letter “L.C.”. Below the words “Big Mak” are the words
On 26 November 1999, the Court of Appeals rendered judgment “Burger, Inc.” spelled out in upper case letters. Furthermore,
(“Court of Appeals’ Decision”) reversing the RTC Decision and ordering said corporate or business name appearing in such food
McDonald’s to pay respondents P1,600,000 as actual and compensatory packages and signages is always accompanied by the
damages and P300,000 as moral damages. The Court of Appeals held: company mascot, a young chubby boy named Maky who
wears a red T-shirt with the upper case “m” appearing
Plaintiffs-appellees in the instant case would like to therein and a blue lower garment. Finally, the defendants-
impress on this Court that the use of defendants-appellants appellants’ food packages are made of plastic material.
of its corporate name – the whole “L.C. B[ig] M[ak] B[urger],
I[nc].” which appears on their food packages, signages and xxx xxx xxx
advertisements is an infringement of their trademark “B[ig]
M[ac]” which they use to identify [their] double decker . . . [I]t is readily apparent to the naked eye that
sandwich, sold in a Styrofoam box packaging material with there appears a vast difference in the appearance of the
the McDonald’s logo of umbrella “M” stamped thereon, product and the manner that the tradename “Big Mak” is
together with the printed mark in red bl[o]ck capital letters, being used and presented to the public. As earlier noted,
the words being separated by a single space. Specifically, there are glaring dissimilarities between plaintiffs-appellees’
plaintiffs-appellees argue that defendants-appellants’ use of trademark and defendants-appellants’ corporate name.
their corporate name is a colorable imitation of their Plaintiffs-appellees’ product carrying the trademark “B[ig]
trademark “Big Mac”. DHACES M[ac]” is a double decker sandwich (depicted in the tray mat
containing photographs of the various food products . . .
xxx xxx xxx sold in a Styrofoam box with the “McDonald’s” logo and
trademark in red, bl[o]ck capital letters printed thereon . . .
To Our mind, however, this Court is fully convinced at a price which is more expensive than the defendants-
that no colorable imitation exists. As the definition dictates,
appellants’ comparable food products. In order to buy a “Big seeks to be awarded damages due to acts of another has
Mac”, a customer needs to visit an air-conditioned the burden of proving that the latter acted in bad faith or with
“McDonald’s” restaurant usually located in a nearby ill motive. 21
commercial center, advertised and identified by its logo —
the umbrella “M”, and its mascot — “Ronald McDonald”. A Petitioners sought reconsideration of the Court of Appeals’ Decision
typical McDonald’s restaurant boasts of a playground for but the appellate court denied their motion in its Resolution of 11 July 2000.
kids, a second floor to accommodate additional customers, Hence, this petition for review.
a drive-thru to allow customers with cars to make orders
without alighting from their vehicles, the interiors of the Petitioners raise the following grounds for their petition:
building are well-lighted, distinctly decorated and painted
with pastel colors . . . . In buying a “B[ig] M[ac]”, it is I. THE COURT OF APPEALS ERRED IN FINDING THAT
necessary to specify it by its trademark. Thus, a customer RESPONDENTS’ CORPORATE NAME “L.C. BIG
needs to look for a “McDonald’s” and enter it first before he MAK BURGER, INC.” IS NOT A COLORABLE
can find a hamburger sandwich which carry the mark “Big IMITATION OF THE MCDONALD’S TRADEMARK
Mac”. On the other hand, defendants-appellants sell their “BIG MAC”, SUCH COLORABLE IMITATION
goods through snack vans . . . BEING AN ELEMENT OF TRADEMARK
INFRINGEMENT.
Anent the allegation that defendants-appellants are
guilty of unfair competition, We likewise find the same A. Respondents use the words “Big Mak” as
untenable. trademark for their products and not merely
as their business or corporate name.
Unfair competition is defined as “the employment of
deception or any other means contrary to good faith by B. As a trademark, respondents’ “Big Mak” is
which a person shall pass off the goods manufactured by undeniably and unquestionably similar to
him or in which he deals, or his business, or service, for petitioners’ “Big Mac” trademark based on
those of another who has already established good will for the dominancy test and the idem
his similar good, business or services, or any acts sonans test resulting inexorably in
calculated to produce the same result” (Sec. 29, Rep. confusion on the part of the consuming
Act No. 166, as amended). public.

To constitute unfair competition therefore it must II. THE COURT OF APPEALS ERRED IN REFUSING TO
necessarily follow that there was malice and that the entity CONSIDER THE INHERENT SIMILARITY
concerned was in bad faith. BETWEEN THE MARK “BIG MAK” AND THE
WORD MARK “BIG MAC” AS AN INDICATION OF
In the case at bar, We find no sufficient evidence RESPONDENTS’ INTENT TO DECEIVE OR
adduced by plaintiffs-appellees that defendants-appellants DEFRAUD FOR PURPOSES OF ESTABLISHING
deliberately tried to pass off the goods manufactured by UNFAIR COMPETITION. 22
them for those of plaintiffs-appellees. The mere suspected
similarity in the sound of the defendants-appellants’ Petitioners pray that we set aside the Court of Appeals’ Decision and
corporate name with the plaintiffs-appellees’ trademark is reinstate the RTC Decision.
not sufficient evidence to conclude unfair competition. In their Comment to the petition, respondents question the propriety
Defendants-appellants explained that the name “M[ak]” in of this petition as it allegedly raises only questions of fact. On the merits,
their corporate name was derived from both the first names respondents contend that the Court of Appeals committed no reversible error
of the mother and father of defendant Francis Dy, whose in finding them not liable for trademark infringement and unfair competition and
names are Maxima and Kimsoy. With this explanation, it is in ordering petitioners to pay damages.
up to the plaintiffs-appellees to prove bad faith on the part
of defendants-appellants. It is a settled rule that the law The Issues
always presumes good faith such that any person who The issues are:
1. Procedurally, whether the questions raised in this petition are It was only during the trial that respondents presented in evidence the
proper for a petition for review under Rule 45. ADEaHT plastic wrappers and bags for their hamburger sandwiches relied on by the
Court of Appeals. 31 Respondents’ plastic wrappers and bags were identical
2. On the merits, (a) whether respondents used the words “Big Mak” with those petitioners presented during the hearings for the injunctive writ
not only as part of the corporate name “L.C. Big Mak Burger, Inc.” but also as except that the letters “L.C.” and the words “Burger, Inc.” in respondents’
a trademark for their hamburger products, and (b) whether respondent evidence were added above and below the words “Big Mak,” respectively.
corporation is liable for trademark infringement and unfair competition. 23 Since petitioners’ complaint was based on facts existing before and during the
The Court’s Ruling hearings on the injunctive writ, the facts established during those hearings are
the proper factual bases for the disposition of the issues raised in this petition.
The petition has merit.
On the Issue of Trademark Infringement
On Whether the Questions Raised in the Petition are
Proper for a Petition for Review Section 22 (“Section 22) of Republic Act No. 166, as amended (“RA
166”), the law applicable to this case, 32 defines trademark infringement as
A party intending to appeal from a judgment of the Court of Appeals
follows:
may file with this Court a petition for review under Section 1 of Rule 45
(“Section 1”) 24 raising only questions of law. A question of law exists when Infringement, what constitutes. — Any person who
the doubt or difference arises on what the law is on a certain state of facts. [1] shall use, without the consent of the registrant, any
There is a question of fact when the doubt or difference arises on the truth or reproduction, counterfeit, copy or colorable imitation of any
falsity of the alleged facts. 25 registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or
Here, petitioners raise questions of fact and law in assailing the Court
services on or in connection with which such use is likely to
of Appeals’ findings on respondent corporation’s non-liability for trademark
cause confusion or mistake or to deceive purchasers or
infringement and unfair competition. Ordinarily, the Court can deny due course
others as to the source or origin of such goods or services,
to such a petition. In view, however, of the contradictory findings of fact of the
or identity of such business; or [2] reproduce, counterfeit,
RTC and Court of Appeals, the Court opts to accept the petition, this being one
copy, or colorably imitate any such mark or trade-name and
of the recognized exceptions to Section 1. 26 We took a similar course of
apply such reproduction, counterfeit, copy, or colorable
action in Asia Brewery, Inc. v. Court of Appeals 27 which also involved a suit
imitation to labels, signs, prints, packages, wrappers,
for trademark infringement and unfair competition in which the trial court and
receptacles or advertisements intended to be used upon or
the Court of Appeals arrived at conflicting findings.
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. 33
On the Manner Respondents Used
“Big Mak” in their Business Petitioners base their cause of action under the first part of Section 22, i.e.
respondents allegedly used, without petitioners’ consent, a colorable
Petitioners contend that the Court of Appeals erred in ruling that the imitation of the “Big Mac” mark in advertising and selling respondents’
corporate name “L.C. Big Mak Burger, Inc.” appears in the packaging for hamburger sandwiches. This likely caused confusion in the mind of the
respondents’ hamburger products and not the words “Big Mak” only. purchasing public on the source of the hamburgers or the identity of the
The contention has merit. business.
To establish trademark infringement, the following elements must be
The evidence presented during the hearings on petitioners’ motion for
shown: (1) the validity of plaintiff’s mark; (2) the plaintiff’s ownership of the
the issuance of a writ of preliminary injunction shows that the plastic wrappings
mark; and (3) the use of the mark or its colorable imitation by the alleged
and plastic bags used by respondents for their hamburger sandwiches bore
infringer results in “likelihood of confusion.” 34 Of these, it is the element of
the words “Big Mak.” The other descriptive words “burger” and “100% pure
likelihood of confusion that is the gravamen of trademark infringement. 35
beef” were set in smaller type, along with the locations of
branches. 28 Respondents’ cash invoices simply refer to their hamburger On the Validity of the “Big Mac ”Mark
sandwiches as “Big Mak.” 29 It is respondents’ snack vans that carry the words and McDonald’s Ownership of such Mark
“L.C. Big Mak Burger, Inc.” 30
A mark is valid if it is “distinctive” and thus not barred from registration such as might reasonably be assumed to originate with the
under Section 4 36 of RA 166 (“Section 4”). However, once registered, not plaintiff, and the public would then be deceived either into
only the mark’s validity but also the registrant’s ownership of the mark is prima that belief or into the belief that there is some connection
facie presumed. 37 between the plaintiff and defendant which, in fact, does not
exist.”
Respondents contend that of the two words in the “Big Mac” mark, it
is only the word “Mac” that is valid because the word “Big” is generic and Under Act No. 666, 50 the first trademark law, infringement was limited to
descriptive (proscribed under Section 4[e]), and thus “incapable of exclusive confusion of goods only, when the infringing mark is used on “goods of a
appropriation.” 38 similar kind.” 51 Thus, no relief was afforded to the party whose registered
mark or its colorable imitation is used on different although related goods.
The contention has no merit. The “Big Mac” mark, which should be To remedy this situation, Congress enacted RA 166 on 20 June 1947. In
treated in its entirety and not dissected word for word, 39 is neither generic nor defining trademark infringement, Section 22 of RA 166 deleted the
descriptive. Generic marks are commonly used as the name or description of requirement in question and expanded its scope to include such use of the
a kind of goods, 40 such as “Lite” for beer 41 or “Chocolate Fudge” for mark or its colorable imitation that is likely to result in confusion on “the
chocolate soda drink. 42 Descriptive marks, on the other hand, convey the source or origin of such goods or services, or identity of such
characteristics, functions, qualities or ingredients of a product to one who has business.” 52 Thus, while there is confusion of goods when the products
never seen it or does not know it exists, 43 such as “Arthriticare” for arthritis are competing, confusion of business exists when the products are non-
medication. 44 On the contrary, “Big Mac” falls under the class of fanciful or competing but related enough to produce confusion of affiliation. 53
arbitrary marks as it bears no logical relation to the actual characteristics of
the product it represents. 45 As such, it is highly distinctive and thus valid. On Whether Confusion of Goods and
Significantly, the trademark “Little Debbie” for snack cakes was found arbitrary Confusion of Business are Applicable
or fanciful. 46 Petitioners claim that respondents’ use of the “Big Mak” mark on
respondents’ hamburgers results in confusion of goods, particularly with
The Court also finds that petitioners have duly established McDonald’s
exclusive ownership of the “Big Mac” mark. Although Topacio and the Isaiyas respect to petitioners’ hamburgers labeled “Big Mac.” Thus, petitioners alleged
Group registered the “Big Mac” mark ahead of McDonald’s, Topacio, as in their complaint: IDTcHa
petitioners disclosed, Topacio had already assigned his rights to McDonald’s. 1.15. Defendants have unduly prejudiced and
The Isaiyas Group, on the other hand, registered its trademark only in the clearly infringed upon the property rights of plaintiffs in the
Supplemental Register. A mark which is not registered in the Principal McDonald’s Marks, particularly the mark “B[ig]
Register, and thus not distinctive, has no real protection. 47 Indeed, we have M[ac]”. Defendants’ unauthorized acts are likely, and
held that registration in the Supplemental Register is not even aprima calculated, to confuse, mislead or deceive the public into
facie evidence of the validity of the registrant’s exclusive right to use the mark believing that the products and services offered by
on the goods specified in the certificate. 48 defendant Big Mak Burger, and the business it is engaged
On Types of Confusion in, are approved and sponsored by, or affiliated with,
plaintiffs. 54 (Emphasis supplied)
Section 22 covers two types of confusion arising from the use of
similar or colorable imitation marks, namely, confusion of goods (product Since respondents used the “Big Mak” mark on the same
confusion) and confusion of business (source or origin confusion). In Sterling goods, i.e. hamburger sandwiches, that petitioners’ “Big Mac” mark is
Products International, Incorporated v. Farbenfabriken Bayer used, trademark infringement through confusion of goods is a proper issue
Aktiengesellschaft, et al., 49 the Court distinguished these two types of in this case.
confusion, thus: Petitioners also claim that respondents’ use of the “Big Mak” mark in
[Rudolf] Callman notes two types of confusion. The the sale of hamburgers, the same business that petitioners are engaged in,
first is the confusion of goods “in which event the ordinarily results in confusion of business. Petitioners alleged in their complaint:
prudent purchaser would be induced to purchase one 1.10. For some period of time, and without the
product in the belief that he was purchasing the other.” . . . consent of plaintiff McDonald’s nor its licensee/franchisee,
The other is the confusion of business: “Here though the plaintiff McGeorge, and in clear violation of plaintiffs’
goods of the parties are different, the defendant’s product is exclusive right to use and/or appropriate the McDonald’s
marks, defendant Big Mak Burger acting through individual in a styrofoam box with the “McDonald’s” logo and trademark in red, block
defendants, has been operating “Big Mak Burger”, a fast letters at a price more expensive than the hamburgers of respondents. In
food restaurant business dealing in the sale of hamburger contrast, respondents sell their Big Mak hamburgers in plastic wrappers and
and cheeseburger sandwiches, french fries and other food plastic bags. Respondents further point out that petitioners’ restaurants are air-
products, and has caused to be printed on the wrapper of conditioned buildings with drive-thru service, compared to respondents’ mobile
defendant’s food products and incorporated in its signages vans.
the name “Big Mak Burger”, which is confusingly similar to
and/or is a colorable imitation of the plaintiff McDonald’s These and other factors respondents cite cannot negate the
mark “B[ig] M[ac]”, . . . Defendant Big Mak Burger has thus undisputed fact that respondents use their “Big Mak” mark on hamburgers, the
unjustly created the impression that its business is same food product that petitioners’ sell with the use of their registered mark
approved and sponsored by, or affiliated with, plaintiffs . . . “Big Mac.” Whether a hamburger is single, double or triple-decker, and
whether wrapped in plastic or styrofoam, it remains the same hamburger food
2.2 As a consequence of the acts committed by product. Even respondents’ use of the “Big Mak” mark on non-hamburger food
defendants, which unduly prejudice and infringe upon the products cannot excuse their infringement of petitioners’ registered mark,
property rights of plaintiffs McDonald’s and McGeorge as otherwise registered marks will lose their protection under the law.
the real owner and rightful proprietor, and the
licensee/franchisee, respectively, of the McDonald’s The registered trademark owner may use his mark on the same or
marks, and which are likely to have caused confusion or similar products, in different segments of the market, and at different price
deceived the public as to the true source, sponsorship or levels depending on variations of the products for specific segments of the
affiliation of defendants’ food products and restaurant market. The Court has recognized that the registered trademark owner enjoys
business, plaintiffs have suffered and continue to suffer protection in product and market areas that are the normal potential expansion
actual damages in the form of injury to their business of his business. Thus, the Court has declared:
reputation and goodwill, and of the dilution of the distinctive Modern law recognizes that the protection to which
quality of the McDonald’s marks, in particular, the mark the owner of a trademark is entitled is not limited to guarding
“B[ig] M[ac]”. 55 (Emphasis supplied) his goods or business from actual market competition with
identical or similar products of the parties, but extends to all
cases in which the use by a junior appropriator of a trade-
Respondents admit that their business includes selling hamburger mark or trade-name is likely to lead to a confusion of source,
sandwiches, the same food product that petitioners sell using the “Big as where prospective purchasers would be misled into
Mac” mark. Thus, trademark infringement through confusion of business thinking that the complaining party has extended his
is also a proper issue in this case. business into the field (see 148 ALR 56 et seq; 53 Am Jur.
576) or is in any way connected with the activities of the
Respondents assert that their “Big Mak” hamburgers cater mainly to
infringer; or when it forestalls the normal potential
the low-income group while petitioners’ “Big Mac” hamburgers cater to the
middle and upper income groups. Even if this is true, the likelihood of confusion expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur.
576, 577). 56 (Emphasis supplied)
of business remains, since the low-income group might be led to believe that
the “Big Mak” hamburgers are the low-end hamburgers marketed by On Whether Respondents’ Use of the “Big Mak”
petitioners. After all, petitioners have the exclusive right to use the “Big Mac” Mark Results in Likelihood of Confusion
mark. On the other hand, respondents would benefit by associating their low-
end hamburgers, through the use of the “Big Mak” mark, with petitioners’ high- In determining likelihood of confusion, jurisprudence has developed
end “Big Mac” hamburgers, leading to likelihood of confusion in the identity of two tests, the dominancy test and the holistic test. 57 The dominancy test
business. focuses on the similarity of the prevalent features of the competing trademarks
that might cause confusion. In contrast, the holistic test requires the court to
Respondents further claim that petitioners use the “Big Mac” mark only consider the entirety of the marks as applied to the products, including the
on petitioners’ double-decker hamburgers, while respondents use the “Big labels and packaging, in determining confusing similarity.
Mak” mark on hamburgers and other products like siopao, noodles and pizza.
Respondents also point out that petitioners sell their Big Mac double-deckers The Court of Appeals, in finding that there is no likelihood of confusion
that could arise in the use of respondents’ “Big Mak” mark on hamburgers,
relied on the holistic test. Thus, the Court of Appeals ruled that “it is not S.A. v. Court of Appeals, 65 the Court explicitly rejected the holistic test in this
sufficient that a similarity exists in both name(s), but that more importantly, wise:
the overall presentation, or in their essential, substantive and distinctive parts
is such as would likely MISLEAD or CONFUSE persons in the ordinary course [T]he totality or holistic test is contrary to the
of purchasing the genuine article.” The holistic test considers the two marks in elementary postulate of the law on trademarks and unfair
their entirety, as they appear on the goods with their labels and packaging. It competition that confusing similarity is to be determined on
is not enough to consider their words and compare the spelling and the basis of visual, aural, connotative comparisons and
pronunciation of the words. 58 overall impressions engendered by the marks in
controversy as they are encountered in the realities of the
Respondents now vigorously argue that the Court of Appeals’ marketplace. (Emphasis supplied)
application of the holistic test to this case is correct and in accord with
prevailing jurisprudence. The test of dominancy is now explicitly incorporated into law in Section
155.1 of the Intellectual Property Code which defines infringement as the
This Court, however, has relied on the dominancy test rather than the “colorable imitation of a registered mark . . . or a dominant feature thereof.”
holistic test. The dominancy test considers the dominant features in the
competing marks in determining whether they are confusingly similar. Under Applying the dominancy test, the Court finds that respondents’ use of
the dominancy test, courts give greater weight to the similarity of the the “Big Mak” mark results in likelihood of confusion. First, “Big Mak” sounds
appearance of the product arising from the adoption of the dominant features exactly the same as “Big Mac.” Second, the first word in “Big Mak” is exactly
of the registered mark, disregarding minor differences. 59 Courts will consider the same as the first word in “Big Mac.” Third, the first two letters in “Mak” are
more the aural and visual impressions created by the marks in the public mind, the same as the first two letters in “Mac.” Fourth, the last letter in “Mak” while
giving little weight to factors like prices, quality, sales outlets and market a “k” sounds the same as “c” when the word “Mak” is pronounced. Fifth, in
segments. Filipino, the letter “k” replaces “c” in spelling, thus “Caloocan” is spelled
“Kalookan.”
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, 60 the
Court ruled: In short, aurally the two marks are the same, with the first word of both
marks phonetically the same, and the second word of both marks also
. . . It has been consistently held that the question phonetically the same. Visually, the two marks have both two words and six
of infringement of a trademark is to be determined by the letters, with the first word of both marks having the same letters and the second
test of dominancy. Similarity in size, form and color, while word having the same first two letters. In spelling, considering the Filipino
relevant, is not conclusive. If the competing trademark language, even the last letters of both marks are the same.
contains the main or essential or dominant features of
another, and confusion and deception is likely to result, Clearly, respondents have adopted in “Big Mak” not only the dominant
infringement takes place. Duplication or imitation is not but also almost all the features of “Big Mac.” Applied to the same food product
necessary; nor is it necessary that the infringing label of hamburgers, the two marks will likely result in confusion in the public mind.
should suggest an effort to imitate. (G. Heilman Brewing Co. The Court has taken into account the aural effects of the words and
vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle letters contained in the marks in determining the issue of confusing similarity.
White Lead Co. vs. Pflugh (CC) 180 Fed. 579). The Thus, in Marvex Commercial Co., Inc. v. Petra Hawpia & Co., et al., 66 the
question at issue in cases of infringement of trademarks is Court held: aAHTDS
whether the use of the marks involved would be likely to
cause confusion or mistakes in the mind of the public or The following random list of confusingly similar
deceive purchasers. (Auburn Rubber Corporation vs. sounds in the matter of trademarks, culled from Nims,
Honover Rubber Co., 107 F. 2d 588; . . .) (Emphasis Unfair Competition and Trade Marks, 1947, Vol. 1, will
supplied.) reinforce our view that “SALONPAS” and “LIONPAS” are
confusingly similar in sound: “Gold Dust” and “Gold Drop”;
The Court reiterated the dominancy test in Lim Hoa v. Director of “Jantzen” and “Jass-Sea”; “Silver Flash” and “Supper
Patents, 61 Phil. Nut Industry, Inc. v. Standard Brands Inc., 62 Converse Flash”; “Cascarete” and “Celborite”; “Celluloid” and
Rubber Corporation v. Universal Rubber Products, Inc., 63 and Asia Brewery, “Cellonite”; “Chartreuse” and “Charseurs”; “Cutex” and
Inc. v. Court of Appeals. 64 In the 2001 case of Societe Des Produits Nestlé, “Cuticlean”; “Hebe” and “Meje”; “Kotex” and “Femetex”;
“Zuso” and “Hoo Hoo”. Leon Amdur, in his book “Trade- convenient, albeit unavailing, excuse or defense for such an
Mark Law and Practice”, pp. 419–421, cities, as coming unfair choice of name. 67
within the purview of the idem sonans rule, “Yusea” and “U-
C-A”, “Steinway Pianos” and “Steinberg Pianos”, and Absent proof that respondents’ adoption of the “Big Mak” mark was
“Seven-Up” and “Lemon-Up”. In Co Tiong vs. Director of due to honest mistake or was fortuitous, 68 the inescapable conclusion is that
Patents, this Court unequivocally said that “Celdura” and respondents adopted the “Big Mak” mark to “ride on the coattails” of the more
“Cordura” are confusingly similar in sound; this Court held established “Big Mac” mark. 69 This saves respondents much of the expense
in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the name in advertising to create market recognition of their mark and hamburgers. 70
“Lusolin” is an infringement of the trademark “Sapolin”, as Thus, we hold that confusion is likely to result in the public mind. We
the sound of the two names is almost the same. (Emphasis sustain petitioners’ claim of trademark infringement.
supplied)
On the Lack of Proof of
Certainly, “Big Mac” and “Big Mak” for hamburgers create even greater Actual Confusion
confusion, not only aurally but also visually.
Petitioners’ failure to present proof of actual confusion does not
negate their claim of trademark infringement. As noted in American Wire &
Indeed, a person cannot distinguish “Big Mac” from “Big Mak” by their Cable Co. v. Director of Patents, 71 Section 22 requires the less stringent
sound. When one hears a “Big Mac” or “Big Mak” hamburger advertisement standard of “likelihood of confusion” only. While proof of actual confusion is
over the radio, one would not know whether the “Mac” or “Mak” ends with a “c” the best evidence of infringement, its absence is inconsequential. 72
or a “k.”
On the Issue of Unfair Competition
Petitioners’ aggressive promotion of the “Big Mac” mark, as borne by Section 29 (“Section 29”) 73 of RA 166 defines unfair competition,
their advertisement expenses, has built goodwill and reputation for such mark thus:
making it one of the easily recognizable marks in the market today. This
increases the likelihood that consumers will mistakenly associate petitioners’ xxx xxx xxx
hamburgers and business with those of respondents’.
Any person who will employ deception or any other
Respondents’ inability to explain sufficiently how and why they came means contrary to good faith by which he shall pass off the
to choose “Big Mak” for their hamburger sandwiches indicates their intent to goods manufactured by him or in which he deals, or his
imitate petitioners’ “Big Mac” mark. Contrary to the Court of Appeals’ finding, business, or services for those of the one having
respondents’ claim that their “Big Mak” mark was inspired by the first names established such goodwill, or who shall commit any acts
of respondent Dy’s mother (Maxima) and father (Kimsoy) is not credible. As calculated to produce said result, shall be guilty of unfair
petitioners well noted: competition, and shall be subject to an action therefor.
[R]espondents, particularly Respondent Mr. In particular, and without in any way limiting the
Francis Dy, could have arrived at a more creative choice for scope of unfair competition, the following shall be deemed
a corporate name by using the names of his parents, guilty of unfair competition:
especially since he was allegedly driven by sentimental
reasons. For one, he could have put his father’s name (a) Any person, who in selling his goods shall give
ahead of his mother’s, as is usually done in this patriarchal them the general appearance of goods of another
society, and derived letters from said names in that order. manufacturer or dealer, either as to the goods
Or, he could have taken an equal numberof letters (i.e., two) themselves or in the wrapping of the packages in which they
from each name, as is the more usual thing done. Surely, are contained, or the devices or words thereon, or in any
the more plausible reason behind Respondents’ choice of feature of their appearance, which would be likely to
the word “M[ak]”, especially when taken in conjunction with influence purchasers to believe that the goods offered are
the word “B[ig]”, was their intent to take advantage of those of a manufacturer or dealer, other than the actual
Petitioners’ . . . “B[ig] M[ac]” trademark, with their alleged manufacturer or dealer, or who otherwise clothes the goods
sentiment-focused “explanation” merely thought of as a with such appearance as shall deceive the public and
defraud another of his legitimate trade, or any subsequent The mark “B[ig] M[ac]” is used by plaintiff
vendor of such goods or any agent of any vendor engaged McDonald’s to identify its double decker hamburger
in selling such goods with a like purpose; sandwich. The packaging material is a styrofoam box with
the McDonald’s logo and trademark in red with block capital
(b) Any person who by any artifice, or device, or letters printed on it. All letters of the “B[ig] M[ac]” mark are
who employs any other means calculated to induce the also in red and block capital letters. On the other hand,
false belief that such person is offering the services of defendants’ “B[ig] M[ak]” script print is in orange with only
another who has identified such services in the mind of the the letter “B” and “M” being capitalizedand the packaging
public; or material is plastic wrapper. . . Further, plaintiffs’ logo and
(c) Any person who shall make any false statement mascot are the umbrella “M” and “Ronald McDonald’s”,
in the course of trade or who shall commit any other act respectively, compared to the mascot of defendant
contrary to good faith of a nature calculated to discredit the Corporation which is a chubby boy called “Macky” displayed
goods, business or services of another. (Emphasis or printed between the words “Big” and
supplied) “Mak.” 81 (Emphasis supplied)

The essential elements of an action for unfair competition are (1) Respondents point to these dissimilarities as proof that they did not give
confusing similarity in the general appearance of the goods, and (2) intent to their hamburgers the general appearance of petitioners’ “Big Mac”
deceive the public and defraud a competitor. 74 The confusing similarity may hamburgers.
or may not result from similarity in the marks, but may result from other external The dissimilarities in the packaging are minor compared to the
factors in the packaging or presentation of the goods. The intent to deceive stark similarities in the words that give respondents’ “Big Mak” hamburgers the
and defraud may be inferred from the similarity of the appearance of the goods general appearance of petitioners’ “Big Mac” hamburgers. Section 29(a)
as offered for sale to the public. 75 Actual fraudulent intent need not be expressly provides that the similarity in the general appearance of the goods
shown. 76 may be in the “devices or words” used on the wrappings. Respondents have
applied on their plastic wrappers and bags almost the same words that
Unfair competition is broader than trademark infringement and
petitioners use on their styrofoam box. What attracts the attention of the buying
includes passing off goods with or without trademark infringement. Trademark
public are the words “Big Mak” which are almost the same, aurally and visually,
infringement is a form of unfair competition. 77 Trademark infringement
as the words “Big Mac.” The dissimilarities in the material and other devices
constitutes unfair competition when there is not merely likelihood of confusion,
are insignificant compared to the glaring similarity in the words used in the
but also actual or probable deception on the public because of the general
wrappings.
appearance of the goods. There can be trademark infringement without unfair
competition as when the infringer discloses on the labels containing the mark Section 29(a) also provides that the defendant gives “his goods the
that he manufactures the goods, thus preventing the public from being general appearance of goods of another manufacturer.” Respondents’ goods
deceived that the goods originate from the trademark owner. 78 are hamburgers which are also the goods of petitioners. If respondents sold
egg sandwiches only instead of hamburger sandwiches, their use of the “Big
To support their claim of unfair competition, petitioners allege that
Mak” mark would not give their goods the general appearance of petitioners’
respondents fraudulently passed off their hamburgers as “Big Mac”
“Big Mac” hamburgers. In such case, there is only trademark infringement
hamburgers. Petitioners add that respondents’ fraudulent intent can be
but no unfair competition. However, since respondents chose to apply the “Big
inferred from the similarity of the marks in question. 79
Mak” mark on hamburgers, just like petitioner’s use of the “Big Mac” mark on
Passing off (or palming off) takes place where the defendant, by hamburgers, respondents have obviously clothed their goods with the general
imitative devices on the general appearance of the goods, misleads appearance of petitioners’ goods. ASTcEa
prospective purchasers into buying his merchandise under the impression that
Moreover, there is no notice to the public that the “Big Mak”
they are buying that of his competitors. 80 Thus, the defendant gives his goods
hamburgers are products of “L.C. Big Mak Burger, Inc.” Respondents
the general appearance of the goods of his competitor with the intention of
introduced during the trial plastic wrappers and bags with the words “L.C. Big
deceiving the public that the goods are those of his competitor.
Mak Burger, Inc.” to inform the public of the name of the seller of the
The RTC described the respective marks and the goods of petitioners hamburgers. However, petitioners introduced during the injunctive hearings
and respondents in this wise: plastic wrappers and bags with the “Big Mak” mark without the name “L.C. Big
Mak Burger, Inc.” Respondents’ belated presentation of plastic wrappers and
bags bearing the name of “L.C. Big Mak Burger, Inc.” as the seller of the
hamburgers is an after-thought designed to exculpate them from their unfair
business conduct. As earlier stated, we cannot consider respondents’
evidence since petitioners’ complaint was based on facts existing before and
during the injunctive hearings.
Thus, there is actually no notice to the public that the “Big Mak”
hamburgers are products of “L.C. Big Mak Burger, Inc.” and not those of
petitioners who have the exclusive right to the “Big Mac” mark. This clearly
shows respondents’ intent to deceive the public. Had respondents’ placed a
notice on their plastic wrappers and bags that the hamburgers are sold by “L.C.
Big Mak Burger, Inc.”, then they could validly claim that they did not intend to
deceive the public. In such case, there is only trademark infringement
but no unfair competition. 82 Respondents, however, did not give such notice.
We hold that as found by the RTC, respondent corporation is liable for unfair
competition.
The Remedies Available to Petitioners
Under Section 23 83 (“Section 23”) in relation to Section 29 of RA 166,
a plaintiff who successfully maintains trademark infringement and unfair
competition claims is entitled to injunctive and monetary reliefs. Here, the RTC
did not err in issuing the injunctive writ of 16 August 1990 (made permanent in
its Decision of 5 September 1994) and in ordering the payment of P400,000
actual damages in favor of petitioners. The injunctive writ is indispensable to
prevent further acts of infringement by respondent corporation. Also, the
amount of actual damages is a reasonable percentage (11.9%) of respondent
corporation’s gross sales for three (1988–1989 and 1991) of the six years
(1984–1990) respondents have used the “Big Mak” mark. 84
The RTC also did not err in awarding exemplary damages by way of
correction for the public good 85 in view of the finding of unfair competition
where intent to deceive the public is essential. The award of attorney’s fees
and expenses of litigation is also in order. 86
WHEREFORE, we GRANT the instant petition. We SET ASIDE the
Decision dated 26 November 1999 of the Court of Appeals and its Resolution
dated 11 July 2000 and REINSTATE the Decision dated 5 September 1994 of
the Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big
Mak Burger, Inc. liable for trademark infringement and unfair competition.
SO ORDERED.
||| (McDonald's Corp. v. L.C. Big Mak Burger, Inc., G.R. No. 143993, [August
18, 2004], 480 PHIL 402-443)
2. Mcdonald’s vs. McJoy, G.R. No. 166115 confuse or deceive purchasers into believing that the goods originate from the
same source or origin. Likewise, the petitioner alleged that the respondent's
[G.R. No. 166115. February 2, 2007.] use and adoption in bad faith of the "MACJOY & DEVICE" mark would falsely
tend to suggest a connection or affiliation with petitioner's restaurant services
and food products, thus, constituting a fraud upon the general public and
McDONALD'S CORPORATION, petitioner, vs. MACJOY further cause the dilution of the distinctiveness of petitioner's registered and
FASTFOOD CORPORATION, respondent. internationally recognized MCDONALD'S marks to its prejudice and
irreparable damage. The application and the opposition thereto was docketed
asInter Partes Case No. 3861.
DECISION Respondent denied the aforementioned allegations of the petitioner
and averred that it has used the mark "MACJOY" for the past many years in
good faith and has spent considerable sums of money for said mark's
extensive promotion in tri-media, especially in Cebu City where it has been
GARCIA, J p:
doing business long before the petitioner opened its outlet thereat sometime
in 1992; and that its use of said mark would not confuse affiliation with the
In this petition for review on certiorari under Rule 45 of the Rules of
petitioner's restaurant services and food products because of the differences
Court, herein petitioner McDonald's Corporation seeks the reversal and setting
in the design and detail of the two (2) marks.
aside of the following issuances of the Court of Appeals (CA) in CA-
G.R. SP No. 57247, to wit: In a decision 4 dated December 28, 1998, the IPO, ratiocinating that
the predominance of the letter "M," and the prefixes "Mac/Mc" in both the
1. Decision dated 29 July 2004 1 reversing an earlier
"MACJOY" and the "MCDONALDS" marks lead to the conclusion that there is
decision of the Intellectual Property Office (IPO)
confusing similarity between them especially since both are used on almost
which rejected herein respondent MacJoy
the same products falling under classes 29 and 30 of the International
FastFood Corporation's application for registration
Classification of Goods, i.e., food and ingredients of food, sustained the
of the trademark "MACJOY & DEVICE"; and
petitioner's opposition and rejected the respondent's application, viz:
2. Resolution dated 12 November 2004 2 denying the
WHEREFORE, the Opposition to the registration of
petitioner's motion for reconsideration.
the mark MACJOY & DEVICE for use in fried chicken and
As culled from the record, the facts are as follows: chicken barbecue, burgers, fries, spaghetti, palabok, tacos,
sandwiches, halo-halo, and steaks is, as it is
On 14 March 1991, respondent MacJoy Fastfood Corporation, a hereby, SUSTAINED. Accordingly, Application Serial No.
domestic corporation engaged in the sale of fast food products in Cebu City, 75274 of the herein Respondent-Applicant
filed with the then Bureau of Patents, Trademarks and Technology Transfer is REJECTED. DHIaTS
(BPTT), now the Intellectual Property Office (IPO), an application, thereat
identified as Application Serial No. 75274, for the registration of the trademark Let the filewrapper of MACJOY subject matter of
"MACJOY & DEVICE" for fried chicken, chicken barbeque, burgers, fries, this case be sent to the Administrative, Financial and
spaghetti, palabok, tacos, sandwiches, halo-halo and steaks under classes 29 Human Resources Development Bureau for appropriate
and 30 of the International Classification of Goods. SCDaET action in accordance with this Decision, with a copy to be
furnished the Bureau of Trademarks for information and to
Petitioner McDonald's Corporation, a corporation duly organized and update its record.
existing under the laws of the State of Delaware, USA, filed a verified Notice
of Opposition 3 against the respondent's application claiming that the SO ORDERED.
trademark "MACJOY & DEVICE" so resembles its corporate logo, otherwise
In time, the respondent moved for a reconsideration but the IPO
known as the Golden Arches or "M" design, and its marks "McDonalds,"
denied the motion in its Order 5 of January 14, 2000.
McChicken," "MacFries," "BigMac," "McDo," "McSpaghetti," "McSnack," and
"Mc," (hereinafter collectively known as the MCDONALD'S marks) such that
when used on identical or related goods, the trademark applied for would
Therefrom, the respondent went to the CA via a Petition for Review 4. The façade of the respective stores of the parties
with prayer for Preliminary Injunction 6 under Rule 43 of the Rules of Court, are entirely different. Exhibits 1 and 1-A,
whereat its appellate recourse was docketed as CA-G.R. SP No. 57247 . show that [respondent's] restaurant is set
also in the same bold, brilliant and
Finding no confusing similarity between the marks "MACJOY" and noticeable color scheme as that of its
"MCDONALD'S," the CA, in its herein assailed Decision 7 dated July 29, wrappers, containers, cups, etc., while
2004, reversed and set aside the appealed IPO decision and order, thus: [petitioner's] restaurant is in yellow and red
WHEREFORE, in view of the foregoing, judgment colors, and with the mascot of "Ronald
is hereby rendered by us REVERSING and SETTING McDonald" being prominently displayed
ASIDE the Decision of the IPO dated 28 December 1998 therein." (Words in brackets
and its Order dated 14 January 2000 and ORDERING the supplied.) AICDSa
IPO to give due course to petitioner's Application Serial No. Petitioner promptly filed a motion for reconsideration. However, in its
75274. similarly challenged Resolution 8 of November 12, 2004, the CA denied the
SO ORDERED. motion, as it further held:

Explains the CA in its decision: Whether a mark or label of a competitor resembles


another is to be determined by an inspection of the points
. . . , it is clear that the IPO brushed aside and of difference and resemblance as a whole, and not merely
rendered useless the glaring and drastic differences and the points of resemblance. The articles and trademarks
variations in style of the two trademarks and even decreed employed and used by the [respondent] Macjoy Fastfood
that these pronounced differences are "miniscule" and Corporation are so different and distinct as to preclude any
considered them to have been "overshadowed by the probability or likelihood of confusion or deception on the part
appearance of the predominant features" such as "M," "Mc," of the public to the injury of the trade or business of the
and "Mac" appearing in both MCDONALD'S and MACJOY [petitioner] McDonald's Corporation. The "Macjoy & Device"
marks. Instead of taking into account these differences, the mark is dissimilar in color, design, spelling, size, concept
IPO unreasonably shrugged off these differences in the and appearance to the McDonald's marks. (Words in
device, letters and marks in the trademark sought to be brackets supplied.)
registered. The IPO brushed aside and ignored the
following irrefutable facts and circumstances showing Hence, the petitioner's present recourse on the following grounds:
differences between the marks of MACJOY and I.
MCDONALD'S. They are, as averred by the petitioner [now
respondent]: THE COURT OF APPEALS ERRED IN RULING THAT
RESPONDENT'S "MACJOY & DEVICE" MARK IS NOT
1. The word "MacJoy" is written in round script while CONFUSINGLY SIMILAR TO PETITIONER'S
the word "McDonald's" is written in single "McDONALD'S MARKS." IT FAILED TO CORRECTLY
stroke gothic; APPLY THE DOMINANCY TEST WHICH HAS BEEN
2. The word "MacJoy" comes with the picture of a CONSISTENTLY APPLIED BY THIS HONORABLE
chicken head with cap and bowtie and COURT IN DETERMINING THE EXISTENCE OF
wings sprouting on both sides, while the CONFUSING SIMILARITY BETWEEN COMPETING
word "McDonald's" comes with an arches MARKS.
"M" in gold colors, and absolutely without A. The McDonald's Marks belong to a well-known
any picture of a chicken; and established "family of marks"
3. The word "MacJoy" is set in deep pink and white distinguished by the use of the prefix "Mc"
color scheme while "McDonald's" is written and/or "Mac" and the corporate "M" logo
in red, yellow and black color combination; design.
B. The prefix "Mc" and/or "Mac" is the dominant
portion of both Petitioner's McDonald's
Marks and the Respondent's "Macjoy & As regards the respondent's argument that the petition raises only
Device" mark. As such, the marks are questions of fact which are not proper in a petition for review, suffice it to say
confusingly similar under the Dominancy that the contradictory findings of the IPO and the CA constrain us to give due
Test. course to the petition, this being one of the recognized exceptions to Section
1, Rule 45 of the Rules of Court. True, this Court is not the proper venue to
C. Petitioner's McDonald's Marks are well-known consider factual issues as it is not a trier of facts. 12 Nevertheless, when the
and world-famous marks which must be factual findings of the appellate court are mistaken, absurd, speculative,
protected under the Paris Convention. conjectural, conflicting, tainted with grave abuse of discretion, or contrary to
the findings culled by the court of origin, 13 as here, this Court will review
II. them. HICEca
THE COURT OF APPEALS ERRED IN RULING THAT THE The old Trademark Law, Republic Act (R.A.) No. 166, as amended,
DECISION OF THE IPO DATED 28 DECEMBER 1998 defines a "trademark" as any distinctive word, name, symbol, emblem, sign, or
AND ITS ORDER DATED 14 JANUARY 2000 WERE NOT device, or any combination thereof adopted and used by a manufacturer or
BASED ON SUBSTANTIAL EVIDENCE. DacASC merchant on his goods to identify and distinguish them from those
In its Comment, 9 the respondent asserts that the petition should be manufactured, sold, or dealt in by others. 14
dismissed outright for being procedurally defective: first, because the person Under the same law, the registration of a trademark is subject to the
who signed the certification against forum shopping in behalf of the petitioner provisions of Section 4 thereof, paragraph (d) of which is pertinent to this case.
was not specifically authorized to do so, and second, because the petition does The provision reads:
not present a reviewable issue as what it challenges are the factual findings of
the CA. In any event, the respondent insists that the CA Section 4. Registration of trademarks, trade-names
committed no reversible error in finding no confusing similarity between the and service-marks on the principal register. — There is
trademarks in question. hereby established a register of trademarks, tradenames
and service-marks which shall be known as the principal
The petition is impressed with merit. register. The owner of the trade-mark, trade-name or
Contrary to respondent's claim, the petitioner's Managing Counsel, service-mark used to distinguish his goods, business or
Sheila Lehr, was specifically authorized to sign on behalf of the petitioner the services of others shall have the right to register the same
Verification and Certification 10 attached to the petition. As can be gleaned on the principal register, unless it:
from the petitioner's Board of Director's Resolution dated December 5, 2002, xxx xxx xxx
as embodied in the Certificate of the Assistant Secretary dated December 21,
2004, 11 Sheila Lehr was one of those authorized and empowered "to execute (d) Consists of or comprises a mark or
and deliver for and on behalf of [the petitioner] all documents as may be trade-name which so resembles a mark or trade-
required in connection with . . . the protection and maintenance of any foreign name registered in the Philippines or a mark or
patents, trademarks, trade-names, and copyrights owned now or hereafter by trade-name previously used in the Philippines by
[the petitioner], including, but not limited to, . . . documents required to institute another and not abandoned, as to be likely, when
opposition or cancellation proceedings against conflicting trademarks, and to applied to or used in connection with the goods,
do such other acts and things and to execute such other documents as may business or services of the applicant, to cause
be necessary and appropriate to effect and carry out the intent of this confusion or mistake or to deceive purchasers;
resolution." Indeed, the afore-stated authority given to Lehr necessarily
xxx xxx xxx
includes the authority to execute and sign the mandatorily required certification
of non-forum shopping to support the instant petition for review which stemmed Essentially, the issue here is whether there is a confusing similarity
from the "opposition proceedings" lodged by the petitioner before the IPO. between the MCDONALD'S marks of the petitioner and the respondent's
Considering that the person who executed and signed the certification against "MACJOY & DEVICE" trademark when applied to Classes 29 and 30 of the
forum shopping has the authority to do so, the petition, therefore, is not International Classification of Goods, i.e., food and ingredients of food.
procedurally defective.
In determining similarity and likelihood of confusion, jurisprudence has While we agree with the CA's detailed enumeration of differences
developed two tests, the dominancy test and the holistic test. 15 The between the two (2) competing trademarks herein involved, we believe that
dominancy test focuses on the similarity of the prevalent features of the the holistic test is not the one applicable in this case, the dominancy test being
competing trademarks that might cause confusion or deception. 16 In contrast, the one more suitable. In recent cases with a similar factual milieu as here, the
the holistic test requires the court to consider the entirety of the marks as Court has consistently used and applied the dominancy test in determining
applied to the products, including the labels and packaging, in determining confusing similarity or likelihood of confusion between competing
confusing similarity. 17 Under the latter test, a comparison of the words is not trademarks. 22
the only determinant factor. 18
Notably, in McDonalds Corp. v. LC Big Mak Burger, Inc., 23 a case
Here, the IPO used the dominancy test in concluding that there was where the trademark "Big Mak" was found to be confusingly similar with the
confusing similarity between the two (2) trademarks in question as it took note "Big Mac" mark of the herein the petitioner, the Court explicitly held:
of the appearance of the predominant features "M", "Mc" and/or "Mac" in both
the marks. In reversing the conclusion reached by the IPO, the CA, while This Court, . . . , has relied on the dominancy test
seemingly applying the dominancy test, in fact actually applied the holistic test. rather than the holistic test. The dominancy test considers
The appellate court ruled in this wise: the dominant features in the competing marks in
determining whether they are confusingly similar. Under the
Applying the Dominancy test to the present case, dominancy test, courts give greater weight to the similarity
the IPO should have taken into consideration the entirety of of the appearance of the product arising from the adoption
the two marks instead of simply fixing its gaze on the single of the dominant features of the registered mark,
letter "M" or on the combinations "Mc" or "Mac". A mere disregarding minor differences. Courts will consider more
cursory look of the subject marks will reveal that, save for the aural and visual impressions created by the marks in the
the letters "M" and "c", no other similarity exists in the public mind, giving little weight to factors like prices, quality,
subject marks. HCITAS sales outlets and market segments.
We agree with the [respondent] that it is entirely Moreover, in Societe Des Produits Nestle, S.A. v. CA 24 the Court,
unwarranted for the IPO to consider the prefix "Mac" as the applying the dominancy test, concluded that the use by the respondent therein
predominant feature and the rest of the designs in of the word "MASTER" for its coffee product "FLAVOR MASTER" was likely to
[respondent's] mark as details. Taking into account such cause confusion with therein petitioner's coffee products' "MASTER ROAST"
paramount factors as color, designs, spelling, sound, and "MASTER BLEND" and further ruled:
concept, sizes and audio and visual effects, the prefix "Mc"
will appear to be the only similarity in the two completely . . . , the totality or holistic test is contrary to the
different marks; and it is the prefix "Mc" that would thus elementary postulate of the law on trademarks and unfair
appear as the miniscule detail. When pitted against each competition that confusing similarity is to be determined on
other, the two marks reflect a distinct and disparate visual the basis of visual, aural, connotative comparisons and
impression that negates any possible confusing similarity in overall impressions engendered by the marks in
the mind of the buying public. (Words in brackets supplied.) controversy as they are encountered in the marketplace.
The totality or holistic test only relies on visual comparisons
Petitioner now vigorously points out that the dominancy test should be between two trademarks whereas the dominancy test relies
the one applied in this case. not only on the visual but also on the aural and connotative
comparisons and overall impressions between the two
We agree. trademarks.
In trademark cases, particularly in ascertaining whether one Applying the dominancy test to the instant case, the Court finds that
trademark is confusingly similar to another, no set rules can be deduced herein petitioner's "MCDONALD'S" and respondent's "MACJOY" marks are
because each case must be decided on its merits. 19 In such cases, even confusingly similar with each other such that an ordinary purchaser can
more than in any other litigation, precedent must be studied in the light of the conclude an association or relation between the marks. ECaAHS
facts of the particular case. 20 That is the reason why in trademark cases,
jurisprudential precedents should be applied only to a case if they are To begin with, both marks use the corporate "M" design logo and the
specifically in point. 21 prefixes "Mc" and/or "Mac" as dominant features. The first letter "M" in both
marks puts emphasis on the prefixes "Mc" and/or "Mac" by the similar way in
which they are depicted i.e. in an arch-like, capitalized and stylized manner. 25
With the existence of confusing similarity between the subject
For sure, it is the prefix "Mc," an abbreviation of "Mac," which visually trademarks, the resulting issue to be resolved is who, as between the parties,
and aurally catches the attention of the consuming public. Verily, the word has the rightful claim of ownership over the said marks.
"MACJOY" attracts attention the same way as did "McDonalds," "MacFries,"
"McSpaghetti," "McDo," "Big Mac" and the rest of the MCDONALD'S marks We rule for the petitioner.
which all use the prefixes Mc and/or Mac. A mark is valid if it is distinctive and hence not barred from registration
Besides and most importantly, both trademarks are used in the sale under the Trademark Law. However, once registered, not only the mark's
of fastfood products. Indisputably, the respondent's trademark application for validity but also the registrant's ownership thereof is prima facie presumed. 26
the "MACJOY & DEVICE" trademark covers goods under Classes 29 and 30 Pursuant to Section 37 27 of R.A. No. 166, as amended, as well as
of the International Classification of Goods, namely, fried chicken, chicken the provision regarding the protection of industrial property of foreign nationals
barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioner's trademark in this country as embodied in the Paris Convention 28 under which the
registration for the MCDONALD'S marks in the Philippines covers goods which Philippines and the petitioner's domicile, the United States, are adherent-
are similar if not identical to those covered by the respondent's application. members, the petitioner was able to register its MCDONALD'S marks
Thus, we concur with the IPO's findings that: successively, i.e., "McDonald's" in 04 October, 1971; 29 the corporate logo
which is the "M" or the golden arches design and the "McDonald's" with the
In the case at bar, the predominant features such "M" or golden arches design both in 30 June 1977; 30 and so on and so
as the "M," "Mc," and "Mac" appearing in both McDonald's forth. 31
marks and the MACJOY & DEVICE" easily attract the
attention of would-be customers. Even non-regular On the other hand, it is not disputed that the respondent's application
customers of their fastfood restaurants would readily notice for registration of its trademark "MACJOY & DEVICE" was filed only on March
the predominance of the "M" design, "Mc/Mac" prefixes 14, 1991 albeit the date of first use in the Philippines was December 7,
shown in both marks. Such that the common awareness or 1987. 32
perception of customers that the trademarks McDonalds Hence, from the evidence on record, it is clear that the petitioner has
mark and MACJOY & DEVICE are one and the same, or an duly established its ownership of the mark/s. HaTDAE
affiliate, or under the sponsorship of the other is not far-
fetched. Respondent's contention that it was the first user of the mark in the
Philippines having used "MACJOY & DEVICE" on its restaurant business and
The differences and variations in styles as the food products since December, 1987 at Cebu City while the first McDonald's
device depicting a head of chicken with cap and bowtie and outlet of the petitioner thereat was opened only in 1992, is downright
wings sprouting on both sides of the chicken head, the unmeritorious. For the requirement of "actual use in commerce . . . in the
heart-shaped "M," and the stylistic letters in "MACJOY & Philippines" before one may register a trademark, trade-name and service
DEVICE;" in contrast to the arch-like "M" and the one-styled mark under the Trademark Law 33 pertains to the territorial jurisdiction of the
gothic letters in McDonald's marks are of no moment. Philippines and is not only confined to a certain region, province, city or
These minuscule variations are overshadowed by the barangay.
appearance of the predominant features mentioned
hereinabove. EDSHcT Likewise wanting in merit is the respondent's claim that the petitioner
cannot acquire ownership of the word "Mac" because it is a personal name
Thus, with the predominance of the letter "M," and which may not be monopolized as a trademark as against others of the same
prefixes "Mac/Mc" found in both marks, the inevitable name or surname. As stated earlier, once a trademark has been registered,
conclusion is there is confusing similarity between the the validity of the mark is prima facie presumed. In this case, the respondent
trademarks Mc Donald's marks and "MACJOY AND failed to overcome such presumption. We agree with the observations of the
DEVICE" especially considering the fact that both marks are petitioner regarding the respondent's explanation that the word "MACJOY" is
being used on almost the same products falling under based on the name of its president's niece, Scarlett Yu Carcell. In the words
Classes 29 and 30 of the International Classification of of the petitioner:
Goods i.e. Food and ingredients of food.
First of all, Respondent failed to present evidence ||| (McDonald's Corporation v. Macjoy Fastfood Corporation, G.R. No. 166115,
to support the foregoing claim which, at best, is a mere self- [February 2, 2007], 543 PHIL 90-107)
serving assertion. Secondly, it cannot be denied that there
is absolutely no connection between the name "Scarlett Yu
Carcel" and "MacJoy" to merit the coinage of the latter word.
Even assuming that the word "MacJoy" was chosen as a
term of endearment, fondness and affection for a certain
Scarlett Yu Carcel, allegedly the niece of Respondent's
president, as well as to supposedly bring good luck to
Respondent's business, one cannot help but wonder why
out of all the possible letters or combinations of letters
available to Respondent, its president had to choose and
adopt a mark with the prefix "Mac" as the dominant feature
thereof. A more plausible explanation perhaps is that the
niece of Respondent's president was fond of the food
products and services of the Respondent, but that is beside
the point." 34
By reason of the respondent's implausible and insufficient explanation
as to how and why out of the many choices of words it could have used for its
trade-name and/or trademark, it chose the word "MACJOY," the only logical
conclusion deducible therefrom is that the respondent would want to ride high
on the established reputation and goodwill of the MCDONALD's marks, which,
as applied to petitioner's restaurant business and food products, is
undoubtedly beyond question.
Thus, the IPO was correct in rejecting and denying the respondent's
application for registration of the trademark "MACJOY & DEVICE." As this
Court ruled in Faberge Inc. v. IAC, 35 citing Chuanchow Soy & Canning Co. v.
Dir. of Patents and Villapanta: 36
When one applies for the registration of a
trademark or label which is almost the same or very closely
resembles one already used and registered by another, the
application should be rejected and dismissed outright, even
without any opposition on the part of the owner and user of
a previously registered label or trademark, this not only to
avoid confusion on the part of the public, but also to protect
an already used and registered trademark and an
established goodwill. HTSaEC
WHEREFORE, the instant petition is GRANTED. Accordingly, the
assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP NO.
57247, are REVERSED and SET ASIDE and the Decision of the Intellectual
Property Office in Inter Partes Case No. 3861 is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
3. Ana Ang vs. Teodoro, G.R. No. L-48226 doctrine of secondary meaning could nevertheless be fully sustained
because, in any event, by respondent's long and exclusive use of said
[G.R. No. 48226. December 14, 1942.] phrase with reference to his products and his business, it has acquired a
proprietary connotation. This doctrine is to the effect that a word or phrase
originally incapable of exclusive appropriation with reference to an article
ANA L. ANG, petitioner, vs. on the market, because geographically or otherwise descriptive, might
TORIBIO TEODORO, respondent. nevertheless have been used so long and so exclusively by one producer
with reference to his article that, in that trade and to that branch of the
purchasing public, the word or phrase has come to mean that the article
Cirilo Lim for petitioner.
was his product.
Marcial P. Lichauco and Manuel M. Mejia for respondent. 4. ID.; ID.; ID.; ID.; TEST OF WHETHER NONCOMPETING
GOODS ARE OR ARE NOT OF THE SAME CLASS. — In the present
stage of development of the law on trade-marks, unfair competition, and
SYLLABUS unfair trading, the test employed by the courts to determine whether
noncompeting goods are or are not of the same class is confusion as to
1. TRADE-MARKS AND TRADE-NAMES; ACT NO. 666. — the origin of the goods of the second user. Although two noncompeting
Respondent has continuously used "Ang Tibay," both as a trade-mark and articles may be classified under two different classes by the Patent Office
as a trade- name, in the manufacture and sale of slippers, shoes, and because they are deemed not to possess the same descriptive properties,
indoor baseballs since 1910. He formally registered it as a trade-mark on they would nevertheless be held by the courts to belong to the same class
September 29, 1915, and as a trade-name on January 3, 1933. Petitioner if the simultaneous use on them of identical or closely similar trade- marks
registered the same trade-mark "Ang Tibay" for pants and shirts on April would be likely to cause confusion as to the origin, or personal source, of
11, 1932, and established a factory for the manufacture of said articles in the second user's goods. They would be considered as not falling under
the year 1937. Held: That petitioner's registration of the trade-mark the same class only if they are so dissimilar or so foreign to each other as
"Ang Tibay" should be cancelled, and that she should be perpetually to make it unlikely that the purchaser would think the first user made the
enjoined from using said trade-mark on goods manufactured and sold by second user's goods. Such construction of the law is induced by cogent
her. reasons of equity and fair dealing discussed in the decision.

2. ID; ID.; TERM "ANG TIBAY," NOT BEING GEOGRAPHIC OR 5. ID.; ID.; ID.; ID.; ID. — Tested by the foregoing rule, and in the
DESCRIPTIVE, IS CAPABLE OF EXCLUSIVE APPROPRIATION AS A light of other considerations set out in greater detail in the decision, Held:
TRADE-MARK. — An inquiry into the etymology and meaning of the That pants and shirts are goods similar to shoes and slippers within the
Tagalog words "Ang Tibay," made in the decision, shows that the phrase meaning of sections 3, 7, 11, 13, and 20 of the Trade-mark Law (Act No.
is never used adjectively to define or describe an object. It is, therefore, 666).
not a descriptive term within the meaning of the Trade-mark Law but rather
a fanciful or coined phrase which may properly and legally be appropriated
as a trade-mark or trade-name. Hence, it was originally capable of
DECISION
exclusive appropriation as a trade-mark by the respondent.
3. ID.; ID.; ID.; FUNCTION OF A TRADE-MARK; DOCTRINE OF
"SECONDARY MEANING." — The function of a trade-mark is to point
distinctively, either by its own meaning or by association, to the origin or OZAETA, J p:
ownership of the wares to which it is applied. "Ang Tibay," as used by the
respondent to designate his wares, had exactly performed that function for Petitioner has appealed to this Court by certiorari to reverse the
twenty-two years before the petitioner adopted it as a trade-mark in her judgment of the Court of Appeals reversing that of the Court of First
own business. "Ang Tibay" shoes and slippers are, by association, known Instance of Manila and directing the Director of Commerce to cancel the
throughout the Philippines as products of the "Ang Tibay" factory owned registration of the trade-mark "Ang Tibay" in favor of said petitioner, and
and operated by the respondent. Even if "Ang Tibay," therefore, were not perpetually enjoining the latter from using said trade-mark on goods
capable of exclusive appropriation as a trade-mark, the application of the manufactured and sold by her.
Respondent Toribio Teodoro, at first in partnership with Juan First. Counsel for the petitioner, in a well-written brief, makes a
Katindig and later as sole proprietor, has continuously used "Ang Tibay," frontal sledge-hammer attack on the validity of respondent's trade- mark
both as a trade-mark and as a trade-name, in the manufacture and sale of "AngTibay." He contends that the phrase "Ang Tibay" as employed by the
slippers, shoes, and indoor baseballs since 1910. He formally registered respondent on the articles manufactured by him is a descriptive term
it as a trade-mark on September 29, 1915, and as a trade-name on because, "freely translated in English," it means "strong, durable lasting."
January 3, 1933. The growth of his business is a thrilling epic of Filipino He invokes section 2 of Act No. 666, which provides that words or devices
industry and business capacity. Starting in an obscure shop in 1910 with which relate only to the name, quality, or description of the merchandise
a modest capital of P210 but with tireless industry and unlimited cannot be the subject of a trade-mark. He cites among others the case of
perseverance, Toribio Teodoro, then an unknown young man making Baxter vs. Zuazua (5 Phil., 160), which involved the trade-mark "Agua de
slippers with his own hands but now a prominent business magnate and Kananga" used on toilet water, and in which this Court held that the word
manufacturer with a large factory operated with modern machinery by a "Kananga," which is the name of a well-known Philippine tree or its flower,
great number of employees, has steadily grown with his business to which could not be appropriated as a trade-mark any more than could the words
he has dedicated the best years of his life and which he has expanded to "sugar," "tobacco," or "coffee." On the other hand, counsel for the
such proportions that his gross sales from 1918 to 1938 aggregated respondent, in an equally well-prepared and exhaustive brief, contend that
P8,787,025.65. His sales in 1937 amounted to P1,299,343.10 and in 1938, the words "Ang Tibay" are not descriptive but merely suggestive and may
P1,133,165.77. His expenses for advertisement from 1919 to 1938 properly be regarded as fanciful or arbitrary in the legal sense. They cite
aggregated P210,641.56. several cases in which similar words have been sustained as valid trade-
Petitioner (defendant below) registered the same trade-mark marks such as "Holeproof" for hosiery, 1 "Ideal" for tooth brushes, 2 and
"Fashionknit" for neckties and sweaters. 3
"Ang Tibay" for pants and shirts on April 11, 1932, and established a
factory for the manufacture of said articles in the year 1937. In the following We find it necessary to go into the etymology and meaning of the
year (1938) her gross sales amounted to P422,682.09. Neither the Tagalog words "Ang Tibay" to determine whether they are a descriptive
decision of the trial court nor that of the Court of Appeals shows how much term, i. e., whether they relate to the quality or description of the
petitioner has spent for advertisement. But respondent in his brief says merchandise to which respondent has applied them as a trade-mark. The
that petitioner "was unable to prove that she had spent a single centavo word "ang" is a definite article meaning "the" in English. It is also used as
advertising 'Ang Tibay' shirts and pants prior to 1938. In that year she an adverb, a contraction of the word "anong" (what or how). For instance,
advertised the factory which she had just built and it was when this was instead of saying, "Anong ganda!" ("How beautiful!"), we ordinarily say,
brought to the attention of the appellee that he consulted his attorneys and "Ang ganda!" Tibay is a root word from which are derived the
eventually brought the present suit." verb magpatibay (to strengthen); the nouns pagkamatibay (strength,
durability), katibayan (proof, support, strength), katibay-tibayan (superior
The trial court (Judge Quirico Abeto presiding) absolved the
strength); and the adjectives matibay(strong, durable,
defendant from the complaint, with costs against the plaintiff, on the
lasting), napakatibay (very strong), kasintibay or magkasintibay (as
grounds that the two trade-marks are dissimilar and are used on different
strong as, or of equal strength). The phrase "Ang Tibay" is an exclamation
and non-competing goods; that there had been no exclusive use of the
trade-mark by the plaintiff; and that there had been no fraud in the use of denoting admiration of strength or durability. For instance, one who tries
hard but fails to break an object exclaims "Ang tibay!" ("How strong!") It
the said trade-mark by the defendant because the goods on which it is
may also be used in a sentence thus, "Ang tibay ng sapatos mo!" ("How
used are essentially different from those of the plaintiff. The second
division of the Court of Appeals, composed of Justices Bengson, Padilla, durable your shoes are!") The phrase "ang tibay" is never used adjectively
Lopez Vito, Tuason, and Alex Reyes, with Justice Padilla as ponente, to define or describe an object. One does not say, "ang tibay sapatos" or
reversed that judgment, holding that by uninterrupted and exclusive use "sapatos ang tibay" to mean "durable shoes," but "matibay na sapatos" or
since 1910 in the manufacture of slippers and shoes, respondent's trade- "sapatos na matibay."
mark has acquired a secondary meaning; that the goods or articles on From all of this we deduce that "Ang Tibay" is not a descriptive
which the two trade-marks are used are similar or belong to the same term within the meaning of the Trade-Mark Law but rather a fanciful or
class; and that the use by petitioner of said trade-mark constitutes a coined phrase which may properly and legally be appropriated as a trade-
violation of sections 3 and 7 of Act No. 666. The defendant Director of mark or trade-name. In this connection we do not fail to note that when the
Commerce did not appeal from the decision of the Court of Appeals. petitioner herself took the trouble and expense of securing the registration
of these same words as a trademark of her products she or her attorney
as well as the Director of Commerce was undoubtedly convinced that said
words (Ang Tibay) were not a descriptive term and hence could be legally or deals in, may recover damages in a civil action from any person who
used and validly registered as a trade-mark. It seems stultifying and has sold goods of a similar kind, bearing such trade-mark . . . The
puerile for her now to contend otherwise, suggestive of the story of sour complaining party . . . may have a preliminary injunction, . . . and such
grapes. Counsel for the petitioner says that the function of a trade-mark is injunction upon final hearing, if the complainant's property in the trade-
to point distinctively, either by its own meaning or by association, to the mark and the defendant's violation thereof shall be fully established, shall
origin or ownership of the wares to which it is applied. That is correct, and be made perpetual, and this injunction shall be part of the judgment for
we find that "Ang Tibay," as used by the respondent to designate his damages to be rendered in the same cause." Section 7 provides that any
wares, had exactly performed that function for twenty- two years before person who, in selling his goods, shall give them the general appearance
the petitioner adopted it as a trade-mark in her own business. Ang Tibay of the goods of another either in the wrapping of the packages, or in the
shoes and slippers are, by association, known throughout the Philippines devices or. words thereon, or in any other feature of their appearance,
as products of the Ang Tibay factory owned and operated by the which would be likely to influence purchasers to believe that the goods
respondent Toribio Teodoro. offered are those of the complainant, shall be guilty of unfair competition,
Second. In her second assignment of error petitioner contends and shall be liable to an action for damages and to an injunction, as in the
cases of trade-mark infringement under section 3. Section 11 requires the
that the Court of Appeals erred in holding that the words "Ang Tibay" had
acquired a secondary meaning. In view of the conclusion we have reached applicant for registration of a trade-mark to state, among others, "the
upon the first assignment of error, it is unnecessary to apply here the general class of merchandise to which the trade-mark claimed has been
doctrine of "secondary meaning" in trade-mark parlance. This doctrine is appropriated." Section 13 provides that no alleged trade-mark or trade-
to the effect that a word or phrase originally incapable of exclusive name shall be registered which is identical with a registered or known
trade-mark owned by another and appropriate to the same class of
appropriation with reference to an article on the market, because
merchandise, or which so nearly resembles another person's lawful trade-
geographically or otherwise descriptive, might nevertheless have been
used so long and so exclusively by one producer with reference to his mark or trade-name as to be likely to cause confusion or mistake in the
mind of the public, or to deceive purchasers. And section 20 authorizes
article that, in that trade and to that branch of the purchasing public, the
word or phrase has come to mean that the article was his product. (G. & the Director of Commerce to establish classes of merchandise for the
C. Merriam Co. vs. Saalfield, 198 F., 369, 373.) We have said that the purpose of the registration of trade-marks and to determine the particular
phrase "AngTibay," being neither geographic nor descriptive, was description of articles included in each class; it also provides that "an
application for registration of a trade-mark shall be registered only for
originally capable of exclusive appropriation as a trade-mark. But were it
not so, the application of the doctrine of secondary meaning made by the one class of articles and only for the particular description of articles
Court of Appeals could nevertheless be fully sustained because, in any mentioned in said application."
event, by respondent's long and exclusive use of said phrase with We have underlined the key words used in the statute: "goods of
reference to his products and his business, it has acquired a proprietary a similar kind," "general class of merchandise," "same class of
connotation. (Landers, Frary, and Clark vs. Universal Cooler Corporation, merchandise," "classes of merchandise," and "class of articles," because
85 F. [2d], 46.) it is upon their implications that the result of the case hinges. These
Third. Petitioner's third assignment of error is, that the Court of phrases, which refer to the same thing, have the same meaning as the
phrase "merchandise of the same descriptive properties" used in the
Appeals erred in holding that pants and shirts are goods similar to shoes
statutes and jurisprudence of other jurisdictions.
and slippers within the meaning of sections 3 and 7 of Act No. 666. She
also contends under her fourth assignment of error (which we deem The burden of petitioner's argument is that under sections 11 and
convenient to pass upon together with the third) that there can neither be 20 the registration by respondent of the trade-mark "Ang Tibay" for shoes
infringement of trade-mark under section 3 nor unfair competition under and slippers is no safe-guard against its being used by petitioner for pants
section 7 through her use of the words "Ang Tibay" in connection with and shirts because the latter do not belong to the same class of
pants and shirts, because those articles do not belong to the same class merchandise or articles as the former; that she cannot be held guilty of
of merchandise as shoes and slippers. infringement of trade-mark under section 3 because respondent's mark is
The question raised by petitioner involve the scope and not a valid trade-mark, nor has it acquired a secondary meaning; that
application of sections 3, 7, 11, 13, and 20 of the Trade-Mark Law (Act No. pants and shirts do not possess the same descriptive properties as shoes
666). Section 3 provides that "any person entitled to the exclusive use of and slippers; that neither can she be held guilty of unfair competition under
a trade-mark to designate the origin or ownership of goods he has made section 7 because the use by her of the trade-mark "Ang Tibay" upon
pants and shirts is not likely to mislead the general public as to their origin
or ownership; and that there is no showing that she is unfairly or business and, second, by having his business reputation confused with
fraudulently using the mark "Ang Tibay" against the respondent. If we were and put at the mercy of the second user. When noncompetitive products
interpreting the statute for the first time and in the first decade of the are sold under the same mark, the gradual whittling away or dispersion of
twentieth century, when it was enacted, and were to construe it strictly and the identity and hold upon the public mind of the mark created by its first
literally, we might uphold petitioner's contentions. But law and user, inevitably results. The original owner is entitled to the preservation
jurisprudence must keep abreast with the progress of mankind, and the of the valuable link between him and the public that has been created by
courts must breathe life into the statutes if they are to serve their purpose. his ingenuity and the merit of his wares or services. Experience has
Our Trade-mark Law, enacted nearly forty years ago, has grown in its demonstrated that when a well-known trade-mark is adopted by another
implications and practical application, like a constitution, in virtue of the life even for a totally different class of goods, it is done to get the benefit of the
continually breathed into it. It is not of merely local application; it has its reputation and advertisements of the originator of said mark, to convey to
counterpart in other jurisdictions of the civilized world from whose the public a false impression of some supposed connection between the
jurisprudence it has also received vitalizing nourishment. We have to apply manufacturer of the article sold under the original mark and the new
this law as it has grown and not as it was born. Its growth or development articles being tendered to the public under the same or similar mark. As
abreast with that of sister statutes and jurisprudence in other jurisdictions trade has developed and commercial changes have come about, the law
is reflected in the following observation of a well-known author: of unfair competition has expanded to keep pace with the times and the
"This fundamental change in attitude first element of strict competition in itself has ceased to be the determining
manifested itself in the year 1915-1917. Until about then, factor. The owner of a trade-mark or trade-name has a property right in
the courts had proceeded on the theory that the same trade- which he is entitled to protection, since there is damage to him from
confusion of reputation or goodwill in the mind of the public as well as from
mark, used on unlike goods, could not cause confusion in
confusion of goods. The modern trend is to give emphasis to the
trade and that, therefore, there could be no objection to the
use and registration of a well-known mark by a third party unfairness of the acts and to classify and treat the issue as a fraud.
for a different class of goods. Since 1916 however, a A few of the numerous cases in which the foregoing doctrines
growing sentiment began to arise that in the selection of a have been laid down in one form or another will now be cited: (1)
famous mark by a third party, there was generally the In TeodoroKalaw Ng Khe vs. Lever Brothers Company (G. R. No. 46817),
hidden intention to 'have a free ride' on the trade-mark decided by this Court on April 18, 1941, the respondent company (plaintiff
owner's reputation and good will." (Derenberg, Trade-Mark below) was granted injunctive relief against the use by the petitioner of the
Protection & Unfair Trading, 1936 edition, p. 409.) trade-mark "Lux" and "Lifebuoy" for hair pomade, they having been
In the present state of development of the law on Trade-Marks, originally used by the respondent for soap; the Court held in effect that
although said articles are noncompetitive, they are similar or belong to the
Unfair Competition, and Unfair Trading, the test employed by the courts to
same class. (2) In Lincoln Motor Co. vs. Lincoln Automobile Co. (44 F.
determine whether noncompeting goods are or are not of the same class
[2d], 812), the manufacturer of the well-known Lincoln automobile was
is confusion as to the origin of the goods of the second user. Although two
granted injunctive relief against the use of the word "Lincoln" by another
noncompeting articles may be classified under two different classes by the
Patent Office because they are deemed not to possess the same company as part of its firm name. (3) The case of Aunt Jemima Mills
Co. vs. Rigney & Co. (247 F., 407), involved the trade-mark "Aunt
descriptive properties, they would, nevertheless, be held by the courts to
Jemima," originally used on flour, which the defendant attempted to use
belong to the same class if the simultaneous use on them of identical or
closely similar trade-marks would be likely to cause confusion as to the on syrup, and there the court held that the goods, though different, are so
origin, or personal source, of the second user's goods. They would be related as to fall within the mischief which equity should prevent. (4) In
considered as not falling under the same class only if they are so dissimilar Tiffany & Co. vs. Tiffany Productions, Inc. (264 N. Y. S., 459; 23 Trade-
or so foreign to each other as to make it unlikely that the purchaser would mark Reporter, 183), the plaintiff, a jewelry concern, was granted
injunctive relief against the defendant, a manufacturer of motion pictures,
think the first user made the second user's goods.
from using the name "Tiffany." Other famous cases cited on the margin,
Such construction of the law is induced by cogent reasons of wherein the courts granted injunctive relief, involved the following trade-
equity and fair dealing. The courts have come to realize that there can be marks or trade-names. "Kodak," for cameras and photographic supplies,
unfair competition or unfair trading even if the goods are noncompeting, against its use for bicycles; 1 "Penslar," for medicines and toilet articles,
and that such unfair trading can cause injury or damage to the first user of against its use for cigars; 2 "Rolls- Royce," for automobiles, against its use
a given trade-mark, first, by prevention of the natural expansion of his for radio tubes; 3 "Vogue," as the name of a magazine, against its use for
hats; 4 "Kotex," for sanitary napkins, against the use of "Rotex" for vaginal your own?" On our part may we add, without meaning to be harsh, that a
syringes; 5 "Sun-Maid," for raisins, against its use for flour; 6"Yale," for self-respecting person does not remain in the shelter of another but builds
locks and keys, against its use for electric flashlights; 1 and "Waterman," one of his own.
for fountain pens, against its use for razor blades. 2 The judgment of the Court of Appeals is affirmed, with costs
Against this array of famous cases, the industry of counsel for the against the petitioner in the three instances. So ordered.
petitioner has enabled him to cite on this point only the following cases:
||| (Ang v. Teodoro, G.R. No. 48226, [December 14, 1942], 74 PHIL 50-56)
(1) Mohawk Milk Products vs. General Distilleries Corporation (95 F. [2d],
334), wherein the court held that gin and canned milk and cream do not
belong to the same class; (2) Fawcett Publications, Inc. vs. Popular
Mechanics Co. (80 F. [2d], 194), wherein the court held that the words
"Popular Mechanics" used as the title of a magazine and duly registered
as a trade-mark were not infringed by defendant's use of the words
"Modern Mechanics and Inventions" on a competitive magazine, because
the word "mechanics" is merely a descriptive name; and (3) Oxford Book
Co. vs. College Entrance Book Co. (98 F. [2d], 688), wherein the plaintiff
unsuccessfully attempted to enjoin the defendant from using the word
"Visualized" in connection with history books, the court holding that said
word is merely descriptive. These cases cited and relied upon by petitioner
are obviously of no decisive application to the case at bar.
We think reasonable men may not disagree that shoes and shirts
are not as unrelated as fountain pens and razor blades, for instance. The
mere relation or association of the articles is not controlling. As may readily
be noted from what we have heretofore said, the proprietary connotation
that a trade-mark or trade-name has acquired is of more paramount
consideration. The Court of Appeals found in this case that by
uninterrupted and exclusive use since 1910 of respondent's registered
trade-mark on slippers and shoes manufactured by him, it has come to
indicate the origin and ownership of said goods. It is certainly not
farfetched to surmise that the selection by petitioner of the same trade-
mark for pants and shirts was motivated by a desire to get a free ride on
the reputation and selling power it has acquired at the hands of the
respondent. As observed in another case, 3 the field from which a person
may select a trade-mark is practically unlimited, and hence there is no
excuse for impinging upon or even closely approaching the mark of a
business rival. In the unlimited field of choice, what could have been
petitioner's purpose in selecting "Ang Tibay" if not for its fame?
Lastly, in her fifth assignment of error petitioner seems to make a
frantic effort to retain the use of the mark "Ang Tibay." Her counsel
suggests that instead of enjoining her from using it, she may be required
to state in her labels affixed to her products the inscription: "Not
manufactured by Toribio Teodoro." We think such practice would be
unethical and unworthy of a reputable businessman. To the suggestion of
petitioner, respondent may say, not without justice though with a tinge of
bitterness: "Why offer a perpetual apology or explanation as to the origin
of your products in order to use my trade-mark instead of creating one of
4. Fredco Mfg. vs. Harvard College, G.R. No. 185917 later assigned to Romeo Chuateco, a member of the family that owned
New York Garments. CEASaT
[G.R. No. 185917. June 1, 2011.]
Fredco alleged that it was formed and registered with the
Securities and Exchange Commission on 9 November 1995 and had since
FREDCO MANUFACTURING then handled the manufacture, promotion and marketing of "Harvard"
CORPORATION, petitioner, vs. PRESIDENT AND clothing articles. Fredco alleged that at the time of issuance of
FELLOWS OF HARVARD COLLEGE (HARVARD Registration No. 56561 to Harvard. University, New York Garments had
UNIVERSITY),respondents. already registered the mark "Harvard" for goods under Class 25. Fredco
alleged that the registration was cancelled on 30 July 1998 when New
York Garments inadvertently failed to file an affidavit of use/non-use on
the fifth anniversary of the registration but the right to the mark "Harvard"
DECISION remained with its predecessor New York Garments and now with Fredco.
Harvard University, on the other hand, alleged that it is the lawful
owner of the name and mark "Harvard" in numerous countries worldwide,
CARPIO, J p: including the Philippines. Among the countries where Harvard University
has registered its name and mark "Harvard" are:
The Case 1. Argentina
Before the Court is a petition for review 1 assailing the 24 October
2. Benelux 4
2008 Decision 2 and 8 January 2009 Resolution 3 of the Court of Appeals
in CA-G.R. SP No. 103394. 3. Brazil
The Antecedent Facts 4. Canada
On 10 August 2005, petitioner Fredco Manufacturing Corporation
5. Chile
(Fredco), a corporation organized and existing under the laws of the
Philippines, filed a Petition for Cancellation of Registration No. 56561 6. China P.R.
before the Bureau of Legal Affairs of the Intellectual Property Office (IPO)
against respondents President and Fellows of Harvard College (Harvard 7. Colombia
University), a corporation organized and existing under the laws of 8. Costa Rica
Massachusetts, United States of America. The case was docketed as Inter
Partes Case No. 14-2005-00094. 9. Cyprus
Fredco alleged that Registration No. 56561 was issued to Harvard 10. Czech Republic
University on 25 November 1993 for the mark "Harvard Veritas Shield
Symbol" for decals, tote bags, serving trays, sweatshirts, t-shirts, hats and 11. Denmark
flying discs under Classes 16, 18, 21, 25 and 28 of the Nice International
12. Ecuador
Classification of Goods and Services. Fredco alleged that the mark
"Harvard" for t-shirts, polo shirts, sandos, briefs, jackets and slacks was 13. Egypt
first used in the Philippines on 2 January 1982 by New York Garments
Manufacturing & Export Co., Inc. (New York Garments), a domestic 14. Finland
corporation and Fredco's predecessor-in-interest. On 24 January 1985, 15. France
New York Garments filed for trademark registration of the mark "Harvard"
for goods under Class 25. The application matured into a registration and 16. Great Britain
a Certificate of Registration was issued on 12 December 1988, with a 20-
year term subject to renewal at the end of the term. The registration was 17. Germany
18. Greece DCcTHa
19. Hong Kong 47. United States of America
20. India 48. Venezuela
21. Indonesia 49. Zimbabwe
22. Ireland 50. European Community 5
23. Israel The name and mark "Harvard" was adopted in 1639 as the name of
Harvard College 6 of Cambridge, Massachusetts, U.S.A. The name and
24. Italy mark "Harvard" was allegedly used in commerce as early as 1872.
25. Japan Harvard University is over 350 years old and is a highly regarded institution
of higher learning in the United States and throughout the world. Harvard
26. South Korea University promotes, uses, and advertises its name "Harvard" through
various publications, services, and products in foreign countries, including
27. Malaysia the Philippines. Harvard University further alleged that the name and the
28. Mexico mark have been rated as one of the most famous brands in the world,
valued between US$750,000,000 and US$1,000,000,000.
29. New Zealand
Harvard University alleged that in March 2002, it discovered,
30. Norway through its international trademark watch program, Fredco's website
www.harvard-usa.com. The website advertises and promotes the brand
31. Peru name "Harvard Jeans USA" without Harvard University's consent. The
32. Philippines website's main page shows an oblong logo bearing the mark "Harvard
Jeans USA®," "Established 1936," and "Cambridge, Massachusetts."
33. Poland On 20 April 2004, Harvard University filed an administrative complaint
against Fredco before the IPO for trademark infringement and/or unfair
34. Portugal competition with damages.
35. Russia Harvard University alleged that its valid and existing certificates of
36. South Africa trademark registration in the Philippines are:
1. Trademark Registration No. 56561 issued on 25
37. Switzerland
November 1993 for "Harvard Veritas Shield
38. Singapore Design" for goods and services in Classes 16, 18,
21, 25 and 28 (decals, tote bags, serving trays,
39. Slovak Republic sweatshirts, t-shirts, hats and flying discs) of the
Nice International Classification of Goods and
40. Spain
Services;
41. Sweden
2. Trademark Registration No. 57526 issued on 24 March
42. Taiwan 1994 for "Harvard Veritas Shield Symbol" for
services in Class 41; Trademark Registration No.
43. Thailand 56539 issued on 25 November 1998 for "Harvard"
for services in Class 41; and
44. Turkey TaCSAD
3. Trademark Registration No. 66677 issued on 8
45. United Arab Emirates
December 1998 for "Harvard Graphics" for goods in
46. Uruguay Class 9. Harvard University further alleged that it
filed the requisite affidavits of use for the mark that the mark covered by Harvard University's Registration No. 56561 is
"Harvard Veritas Shield Symbol" with the IPO. not only the word "Harvard" but also the logo, emblem or symbol of
Harvard University. The Director General ruled that Fredco failed to
Further, on 7 May 2003 Harvard University filed Trademark explain how its predecessor New York Garments came up with the mark
Application No. 4-2003-04090 for "Harvard Medical International & Shield "Harvard." In addition, there was no evidence that Fredco or New York
Design" for services in Classes 41 and 44. In 1989, Harvard University Garments was licensed or authorized by Harvard University to use its
established the Harvard Trademark Licensing Program, operated by the name in commerce or for any other use.
Office for Technology and Trademark Licensing, to oversee and manage
the worldwide licensing of the "Harvard" name and trademarks for various The dispositive portion of the decision of the Office of the Director
goods and services. Harvard University stated that it never authorized or General, IPO reads:
licensed any person to use its name and mark "Harvard" in connection WHEREFORE, premises considered, the instant appeal is
with any goods or services in the Philippines. DcaSIH GRANTED. The appealed decision is hereby REVERSED
In a Decision 7 dated 22 December 2006, Director Estrellita and SET ASIDE. Let a copy of this Decision as well as the
Beltran-Abelardo of the Bureau of Legal Affairs, IPO cancelled Harvard trademark application and records be furnished and
University's registration of the mark "Harvard" under Class 25, as follows: returned to the Director of Bureau of Legal Affairs for
appropriate action. Further, let also the Directors of the
WHEREFORE, premises considered, the Petition for Bureau of Trademarks and the Administrative, Financial
Cancellation is hereby GRANTED. Consequently, and Human Resources Development Services Bureau, and
Trademark Registration Number 56561 for the trademark the library of the Documentation, Information and
"HARVARD VE RI TAS 'SHIELD' SYMBOL" issued on Technology Transfer Bureau be furnished a copy of this
November 25, 1993 to PRESIDENT AND FELLOWS OF Decision for information, guidance, and records
HARVARD COLLEGE (HARVARD UNIVERSITY) should purposes. aIcETS
be CANCELLED only with respect to goods falling under
Class 25. On the other hand, considering that the goods of SO ORDERED. 10
Respondent-Registrant falling under Classes 16, 18, 21 and
28 are not confusingly similar with the Petitioner's goods, Fredco filed a petition for review before the Court of Appeals
the Respondent-Registrant has acquired vested right over assailing the decision of the Director General.
the same and therefore, should not be cancelled. The Decision of the Court of Appeals
Let the filewrapper of the Trademark Registration No. In its assailed decision, the Court of Appeals affirmed the decision
56561 issued on November 25, 1993 for the trademark of the Office of the Director General of the IPO.
"HARVARD VE RI TAS 'SHIELD' SYMBOL", subject matter
The Court of Appeals adopted the findings of the Office of the
of this case together with a copy of this Decision be
forwarded to the Bureau of Trademarks (BOT) for Director General and ruled that the latter correctly set aside the
appropriate action. cancellation by the Director of the Bureau of Legal Affairs of Harvard
University's trademark registration under Class 25. The Court of Appeals
SO ORDERED. 8 ruled that Harvard University was able to substantiate that it appropriated
and used the marks "Harvard" and "Harvard Veritas Shield Symbol" in
Harvard University filed an appeal before the Office of the Director Class 25 way ahead of Fredco and its predecessor New York Garments.
General of the IPO. In a Decision 9 dated 21 April 2008, the Office of the The Court of Appeals also ruled that the records failed to disclose any
Director General, IPO reversed the decision of the Bureau of Legal Affairs, explanation for Fredco's use of the name and mark "Harvard" and the
IPO. words "USA," "Established 1936," and "Cambridge, Massachusetts" within
The Director General ruled that more than the use of the an oblong device, "US Legend" and "Europe's No. 1 Brand."
trademark in the Philippines, the applicant must be the owner of the mark Citing Shangri-La International Hotel Management, Ltd. v Developers
sought to be registered. The Director General ruled that the right to register Group of Companies, Inc., 11 the Court of Appeals ruled:
a trademark is based on ownership and when the applicant is not the One who has imitated the trademark of another cannot bring
owner, he has no right to register the mark. The Director General noted an action for infringement, particularly against the true
owner of the mark, because he would be coming to court Under Section 2 of Republic Act No. 166, 14 as amended
with unclean hands. Priority is of no avail to the bad faith (R.A. No. 166), before a trademark can be registered, it must have been
plaintiff. Good faith is required in order to ensure that a actually used in commerce for not less than two months in the Philippines
second user may not merely take advantage of the goodwill prior to the filing of an application for its registration. While Harvard
established by the true owner. 12 University had actual prior use of its marks abroad for a long time, it did
not have actual prior use in the Philippines of the mark "Harvard Veritas
The dispositive portion of the decision of the Court of Appeals Shield Symbol" before its application for registration of the mark "Harvard"
reads: with the then Philippine Patents Office. However, Harvard University's
WHEREFORE, premises considered, the petition for review registration of the name "Harvard" is based on home registration which is
is DENIED. The Decision dated April 21, 2008 of the allowed under Section 37 of R.A. No. 166. 15 As pointed out by Harvard
Director General of the IPO in Appeal No. 14-07-09 Inter University in its Comment:
Partes Case No. 14-2005-00094 is hereby AFFIRMED. Although Section 2 of the Trademark law (R.A. 166)
SO ORDERED. 13 requires for the registration of trademark that the applicant
thereof must prove that the same has been actually in use
Fredco filed a motion for reconsideration. in commerce or services for not less than two (2) months in
the Philippines before the application for registration is filed,
In its Resolution promulgated on 8 January 2009, the Court of
where the trademark sought to be registered has already
Appeals denied the motion for lack of merit.
been registered in a foreign country that is a member of the
Hence, this petition before the Court. CaAcSE Paris Convention, the requirement of proof of use in the
commerce in the Philippines for the said period is not
The Issue
necessary. An applicant for registration based on home
The issue in this case is whether the Court of Appeals committed certificate of registration need not even have used the mark
a reversible error in affirming the decision of the Office of the Director or trade name in this country. 16
General of the IPO.
Indeed, in its Petition for Cancellation of Registration No. 56561, Fredco
The Ruling of this Court alleged that Harvard University's registration "is based on 'home
The petition has no merit. registration' for the mark 'Harvard Veritas Shield' for Class 25." 17 HESIcT

There is no dispute that the mark "Harvard" used by Fredco is the In any event, under Section 239.2 of Republic Act No.
8293 (R.A. No. 8293), 18 "[m]arks registered under Republic Act No.
same as the mark "Harvard" in the "Harvard Veritas Shield Symbol" of
166 shall remain in force but shall be deemed to have been granted
Harvard University. It is also not disputed that Harvard University was
named Harvard College in 1639 and that then, as now, Harvard University under this Act . . .," which does not require actual prior use of the mark
is located in Cambridge, Massachusetts, U.S.A. It is also unrefuted that in the Philippines. Since the mark "Harvard Veritas Shield Symbol" is now
Harvard University has been using the mark "Harvard" in commerce since deemed granted under R.A. No. 8293, any alleged defect arising from the
absence of actual prior use in the Philippines has been cured by Section
1872. It is also established that Harvard University has been using the
239.2. 19 In addition, Fredco's registration was already cancelled on 30
marks "Harvard" and "Harvard Veritas Shield Symbol" for Class 25 goods
in the United States since 1953. Further, there is no dispute that Harvard July 1998 when it failed to file the required affidavit of use/non-use for the
fifth anniversary of the mark's registration. Hence, at the time of Fredco's
University has registered the name and mark "Harvard" in at least 50
filing of the Petition for Cancellation before the Bureau of Legal Affairs of
countries.
the IPO, Fredco was no longer the registrant or presumptive owner of the
On the other hand, Fredco's predecessor-in-interest, New York mark "Harvard."
Garments, started using the mark "Harvard" in the Philippines only in
1982. New York Garments filed an application with the Philippine Patent There are two compelling reasons why Fredco's petition must fail.
Office in 1985 to register the mark "Harvard," which application was First, Fredco's registration of the mark "Harvard" and its
approved in 1988. Fredco insists that the date of actual use in the identification of origin as "Cambridge, Massachusetts" falsely suggest that
Philippines should prevail on the issue of who has the better right to Fredco or its goods are connected with Harvard University, which uses the
register the marks. same mark "Harvard" and is also located in Cambridge, Massachusetts.
This can easily be gleaned from the following oblong logo of Fredco that it (b) . . . (emphasis supplied)
attaches to its clothing line:
Fredco's use of the mark "Harvard," coupled with its claimed origin in
Cambridge, Massachusetts, obviously suggests a false connection with
Harvard University. On this ground alone, Fredco's registration of the mark
"Harvard" should have been disallowed. EcDATH
Indisputably, Fredco does not have any affiliation or connection
with Harvard University, or even with Cambridge, Massachusetts. Fredco
or its predecessor New York Garments was not established in 1936, or in
the U.S.A. as indicated by Fredco in its oblong logo. Fredco
offered no explanation to the Court of Appeals or to the IPO why it used
the mark "Harvard" on its oblong logo with the words "Cambridge,
Massachusetts," "Established in 1936," and "USA." Fredco now claims
before this Court that it used these words "to evoke a 'lifestyle' or suggest
a 'desirable aura' of petitioner's clothing lines." Fredco's belated
justification merely confirms that it sought to connect or associate its
products with Harvard University, riding on the prestige and popularity of
Harvard University, and thus appropriating part of Harvard University's
goodwill without the latter's consent.
Section 4 (a) of R.A. No. 166 is identical to Section 2 (a) of the
Lanham Act, 20 the trademark law of the United States. These provisions
are intended to protect the right of publicity of famous individuals and
institutions from commercial exploitation of their goodwill by
others. 21 What Fredco has done in using the mark "Harvard" and the
words "Cambridge, Massachusetts," "USA" to evoke a "desirable aura" to
Fredco's registration of the mark "Harvard" should not have been its products is precisely to exploit commercially the goodwill of Harvard
allowed because Section 4 (a) of R.A. No. 166 prohibits the registration of University without the latter's consent. This is a clear violation of Section
a mark "which may disparage or falsely suggest a connection 4 (a) of R.A. No. 166. Under Section 17 (c) 22 of R.A. No. 166, such
with persons, living or dead, institutions, beliefs . . . ." Section 4 (a) violation is a ground for cancellation of Fredco's registration of the mark
of R.A. No. 166provides: "Harvard" because the registration was obtained in violation of Section 4
Section 4. Registration of trade-marks, trade-names and of R.A. No. 166. acHTIC
service-marks on the principal register. — There is hereby Second, the Philippines and the United States of America are both
established a register of trade-mark, trade-names and signatories to the Paris Convention for the Protection of Industrial Property
service-marks which shall be known as the principal (Paris Convention). The Philippines became a signatory to the Paris
register. The owner of a trade-mark, a trade-name or Convention on 27 September 1965. Articles 6bis and 8 of the Paris
service-mark used to distinguish his goods, business or Convention state:
services from the goods, business or services of others
shall have the right to register the same on the principal ARTICLE 6bis
register, unless it:
(i) The countries of the Union undertake either
(a) Consists of or comprises immoral, deceptive or administratively if their legislation so permits, or at the
scandalous manner, or matter which may disparage request of an interested party, to refuse or to cancel the
or falsely suggest a connection withpersons, living or registration and to prohibit the use of a trademark which
dead, institutions, beliefs, or national symbols, or bring constitutes a reproduction, imitation or translation, liable to
them into contempt or disrepute; create confusion or a mark considered by the competent
authority of the country as being already the mark of a
person entitled to the benefits of the present "Harvard" is the trade name of the world famous Harvard
Convention and used for identical or similar goods. University, and it is also a trademark of Harvard University. Under Article
These provisions shall also apply when the essential 8 of the Paris Convention, as well as Section 37 of R.A. No. 166, Harvard
part of the mark constitutes a reproduction of any such University is entitled to protection in the Philippines of its trade name
well-known mark or an imitation liable to create "Harvard" even without registration of such trade name in the Philippines.
confusion therewith. This means that no educational entity in the Philippines can use the trade
name "Harvard" without the consent of Harvard University.
ARTICLE 8 Likewise, no entity in the Philippines can claim, expressly or impliedly
A trade name shall be protected in all the countries of the through the use of the name and mark "Harvard," that its products or
Union without the obligation of filing or registration, services are authorized, approved, or licensed by, or sourced from,
whether or not it forms part of a trademark. (Emphasis Harvard University without the latter's consent.
supplied) Article 6bis of the Paris Convention has been administratively
Thus, this Court has ruled that the Philippines is obligated to assure implemented in the Philippines through two directives of the then Ministry
(now Department) of Trade, which directives were upheld by this Court in
nationals of countries of the Paris Convention that they are afforded an
effective protection against violation of their intellectual property rights in several cases. 25 On 20 November 1980, then Minister of Trade Secretary
the Philippines in the same way that their own countries are obligated to Luis Villafuerte issued a Memorandum directing the Director of Patents to
accord similar protection to Philippine nationals. 23 reject, pursuant to the Paris Convention, all pending applications for
Philippine registration of signature and other world-famous trademarks by
Article 8 of the Paris Convention has been incorporated in Section applicants other than their original owners. 26 The Memorandum states:
37 of R.A. No. 166, as follows:
Pursuant to the Paris Convention for the Protection of
Section 37. Rights of foreign registrants. — Persons who Industrial Property to which the Philippines is a signatory,
are nationals of, domiciled in, or have a bona fide or you are hereby directed to reject all pending applications for
effective business or commercial establishment in any Philippine registration of signature and other world-famous
foreign country, which is a party to any international trademarks by applicants other than its original owners or
convention or treaty relating to marks or trade-names, or the users.
repression of unfair competition to which the Philippines
may be a party, shall be entitled to the benefits and subject The conflicting claims over internationally known
to the provisions of this Act to the extent and under the trademarks involve such name brands as Lacoste,
conditions essential to give effect to any such convention Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci,
and treaties so long as the Philippines shall continue to be Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy,
a party thereto, except as provided in the following Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
paragraphs of this section. It is further directed that, in cases where warranted,
xxx xxx xxx Philippine registrants of such trademarks should be asked
to surrender their certificates of registration, if any, to avoid
Trade-names of persons described in the first suits for damages and other legal action by the trademarks'
paragraph of this section shall be protected without the foreign or local owners or original users.
obligation of filing or registration whether or not they
form parts of marks. 24 DcSACE You are also required to submit to the undersigned a
progress report on the matter.
xxx xxx xxx (Emphasis supplied)
For immediate compliance. 27
Thus, under Philippine law, a trade name of a national of a State that is a
party to the Paris Convention, whether or not the trade name forms part of In a Memorandum dated 25 October 1983, then Minister of Trade
a trademark, is protected "without the obligation of filing or registration." and Industry Roberto Ongpin affirmed the earlier Memorandum of Minister
Villafuerte. Minister Ongpin directed the Director of Patents to implement
measures necessary to comply with the Philippines' obligations under the In Mirpuri, the Court ruled that the essential requirement under
Paris Convention, thus: EScaIT Article 6bis of the Paris Convention is that the trademark to be protected
must he "well-known" in the country where protection is sought. 29 The
1. Whether the trademark under consideration is well-
Court declared that the power to determine whether a trademark is well-
known in the Philippines or is a mark already belonging to a
known lies in the competent authority of the country of registration or
person entitled to the benefits of the CONVENTION, this
use. 30 The Court then stated that the competent authority would either
should be established, pursuant to Philippine Patent Office
be the registering authority if it has the power to decide this, or the courts
procedures in inter partes and ex parte cases, according
of the country in question if the issue comes before the courts. 31 caEIDA
to any of the following criteria or any combination thereof:
To be protected under the two directives of the Ministry of Trade,
(a) a declaration by the Minister of Trade and Industry that an internationally well-known mark need not be registered or used in the
the trademark being considered is already well-known in the Philippines. 32 All that is required is that the mark is well-known
Philippines such that permission for its use by other than its internationally and in the Philippines for identical or similar goods, whether
original owner will constitute a reproduction, imitation, or not the mark is registered or used in the Philippines. The Court ruled
translation or other infringement; in Sehwani, Incorporated v. In-N-Out Burger, Inc.: 33
(b) that the trademark is used in commerce internationally, The fact that respondent's marks are neither registered
supported by proof that goods bearing the trademark are nor used in the Philippines is of no moment. The scope
sold on an international scale, advertisements, the of protection initially afforded by Article 6bis of the Paris
establishment of factories, sales offices, distributorships, Convention has been expanded in the 1999 Joint
and the like, in different countries, including volume or other Recommendation Concerning Provisions on the Protection
measure of international trade and commerce; of Well-Known Marks, wherein the World Intellectual
Property Organization (WIPO) General Assembly and the
(c) that the trademark is duly registered in the industrial
Paris Union agreed to a nonbinding recommendation that a
property office(s) of another country or countries,
taking into consideration the dates of such registration; well-known mark should be protected in a country even
if the mark is neither registered nor used in that
(d) that the trademark has been long established and country. Part I, Article 2(3) thereof provides:
obtained goodwill and general international consumer
recognition as belonging to one owner or source; (3) [Factors Which Shall Not Be Required] (a) A Member
State shall not require, as a condition for determining
(e) that the trademark actually belongs to a party claiming whether a mark is a well-known mark:
ownership and has the right to registration under the
provisions of the aforestated PARIS CONVENTION. (i) that the mark has been used in, or that the mark has been
registered or that an application for registration of the mark
2. The word trademark, as used in this MEMORANDUM, has been filed in or in respect of, the Member State;
shall include tradenames, service marks, logos, signs,
emblems, insignia or other similar devices used for (ii) that the mark is well known in, or that the mark has been
registered or that an application for registration of the mark
identification and recognition by consumers.
has been filed in or in respect of, any jurisdiction other than
3. The Philippine Patent Office shall refuse all applications the Member State; or
for, or cancel the registration of, trademarks which
(iii) that the mark is well known by the public at large in the
constitute a reproduction, translation or imitation of a
Member State. 34 (Italics in the original decision; boldface
trademark owned by a person, natural or corporate, who is
a citizen of a country signatory to the PARIS CONVENTION supplied)
FOR THE PROTECTION OF INDUSTRIAL PROPERTY. Indeed, Section 123.1 (e) of R.A. No. 8293 now categorically
xxx xxx xxx 28 (Emphasis supplied) states that "a mark which is considered by the competent authority of the
Philippines to be well-known internationally and in the Philippines,
whether or not it is registered here," cannot be registered by another in
the Philippines. Section 123.1 (e) does not require that the well-known Since "any combination" of the foregoing criteria is sufficient to determine
mark be used in commerce in the Philippines but only that it be well-known that a mark is well-known, it is clearly not necessary that the mark be used
in the Philippines. Moreover, Rule 102 of the Rules and Regulations on in commerce in the Philippines. Thus, while under the territoriality principle
Trademarks, Service Marks, Trade Names and Marked or Stamped a mark must be used in commerce in the Philippines to be entitled to
Containers, which implement R.A. No. 8293, provides: protection, internationally well-known marks are the exceptions to this rule.
Rule 102. Criteria for determining whether a mark is well- In the assailed Decision of the Office of the Director General dated
known. In determining whether a mark is well-known, the 21 April 2008, the Director General found that:
following criteria or any combination thereof may be taken
Traced to its roots or origin, HARVARD is not an ordinary
into account: CSTHca
word. It refers to no other than Harvard University, a
(a) the duration, extent and geographical area of any use of recognized and respected institution of higher learning
the mark, in particular, the duration, extent and located in Cambridge, Massachusetts, U.S.A. Initially
geographical area of any promotion of the mark, including referred to simply as "the new college," the institution was
advertising or publicity and the presentation, at fairs or named "Harvard College" on 13 March 1639, after its first
exhibitions, of the goods and/or services to which the mark principal donor, a young clergyman named John Harvard. A
applies; graduate of Emmanuel College, Cambridge in England,
John Harvard bequeathed about four hundred books in his
(b) the market share, in the Philippines and in other will to form the basis of the college library collection, along
countries, of the goods and/or services to which the mark with half his personal wealth worth several hundred pounds.
applies; The earliest known official reference to Harvard as a
"university" rather than "college" occurred in the new
(c) the degree of the inherent or acquired distinction of the
Massachusetts Constitution of 1780. IcTaAH
mark;
(d) the quality-image or reputation acquired by the mark; Records also show that the first use of the name HARVARD
was in 1638 for educational services, policy courses of
(e) the extent to which the mark has been registered in the instructions and training at the university level. It has a
world; Charter. Its first commercial use of the name or mark
HARVARD for Class 25 was on 31 December 1953 covered
(f) the exclusivity of registration attained by the mark in the by UPTON Reg. No. 2,119,339 and 2,101,295. Assuming in
world; arguendo, that the Appellate may have used the mark
(g) the extent to which the mark has been used in the world; HARVARD in the Philippines ahead of the Appellant, it still
cannot be denied that the Appellant's use thereof was
(h) the exclusivity of use attained by the mark in the world; decades, even centuries, ahead of the Appellee's. More
importantly, the name HARVARD was the name of a person
(i) the commercial value attributed to the mark in the world; whose deeds were considered to be a cornerstone of the
(j) the record of successful protection of the rights in the university. The Appellant's logos, emblems or symbols are
mark; owned by Harvard University. The name HARVARD and the
logos, emblems or symbols are endemic and cannot be
(k) the outcome of litigations dealing with the issue of separated from the institution. 35
whether the mark is a well-known mark; and
Finally, in its assailed Decision, the Court of Appeals ruled:
(l) the presence or absence of identical or similar marks
Records show that Harvard University is the oldest and one
validly registered for or used on identical or similar goods or
of the foremost educational institutions in the United States,
services and owned by persons other than the person
it being established in 1636. It is located primarily in
claiming that his mark is a well-known mark. (Emphasis
Cambridge, Massachusetts and was named after John
supplied)
Harvard, a puritan minister who left to the college his books
and half of his estate.
The mark "Harvard College" was first used in commerce in ||| (Fredco Manufacturing Corp. v. President and Fellows of Hardvard
the United States in 1638 for educational services, College, G.R. No. 185917, [June 1, 2011], 665 PHIL 374-399)
specifically, providing courses of instruction and training at
the university level (Class 41). Its application for registration
with the United States Patent and Trademark Office was
filed on September 20, 2000 and it was registered on
October 16, 2001. The marks "Harvard" and "Harvard Ve ri
tas 'Shield' Symbol" were first used in commerce in the the
United States on December 31, 1953 for athletic uniforms,
boxer shorts, briefs, caps, coats, leather coats, sports coats,
gym shorts, infant jackets, leather jackets, night shirts,
shirts, socks, sweat pants, sweatshirts, sweaters and
underwear (Class 25). The applications for registration with
the USPTO were filed on September 9, 1996, the mark
"Harvard" was registered on December 9, 1997 and the
mark "Harvard Ve ri tas 'Shield' Symbol" was registered on
September 30, 1997. 36
We also note that in a Decision 37 dated 18 December 2008
involving a separate case between Harvard University and Streetward
International, Inc., 38 the Bureau of Legal Affairs of the IPO ruled that the
mark "Harvard" is a "well-known mark." This Decision, which cites among
others the numerous trademark registrations of Harvard University in
various countries, has become final and executory. SCEDAI
There is no question then, and this Court so declares, that
"Harvard" is a well-known name and mark not only in the United States
but also internationally, including the Philippines. The mark "Harvard" is
rated as one of the most famous marks in the world. It has been registered
in at least 50 countries. It has been used and promoted extensively in
numerous publications worldwide. It has established a considerable
goodwill worldwide since the founding of Harvard University more than 350
years ago. It is easily recognizable as the trade name and mark of Harvard
University of Cambridge, Massachusetts, U.S.A., internationally known as
one of the leading educational institutions in the world. As such, even
before Harvard University applied for registration of the mark "Harvard" in
the Philippines, the mark was already protected under Article 6bis and
Article 8 of the Paris Convention. Again, even without applying the Paris
Convention, Harvard University can invoke Section 4 (a) of R.A. No.
166 which prohibits the registration of a mark "which may disparage
or falsely suggest a connection with persons, living or
dead, institutions, beliefs . . . ."
WHEREFORE, we DENY the petition. We AFFIRM the 24
October 2008 Decision and 8 January 2009 Resolution of the Court of
Appeals in CA-G.R. SP No. 103394.
SO ORDERED.
5. Birkenstock vs. Philippine Shoe, G.R. No. 194307 rightful owner of the Birkenstock marks (Cancellation Case). 7During its
pendency, however, respondent and/or its predecessor-in-interest failed to file
[G.R. No. 194307. November 20, 2013.] the required 10th Year Declaration of Actual Use (10th Year DAU) for
Registration No. 56334 on or before October 21, 2004, 8 thereby resulting in
the cancellation of such mark. 9 Accordingly, the cancellation case was
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG
dismissed for being moot and academic. 10
(formerly BIRKENSTOCK ORTHOPAEDIE
GMBH), petitioner, vs. PHILIPPINE SHOE EXPO The aforesaid cancellation of Registration No. 56334 paved the way for the
MARKETING CORPORATION, respondent. publication of the subject applications in the IPO e-Gazette on February 2,
2007. 11 In response, respondent filed three (3) separate verified notices of
oppositions to the subject applications docketed as Inter Partes Case Nos. 14-
2007-00108, 14-2007-00115, and 14-2007-00116, 12 claiming, inter alia,
DECISION that: (a) it, together with its predecessor-in-interest, has been using
Birkenstock marks in the Philippines for more than 16 years through the mark
"BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject
applications are identical to the one covered by Registration No. 56334 and
PERLAS-BERNABE, J p:
thus, petitioner has no right to the registration of such marks; (c) on November
15, 1991, respondent's predecessor-in-interest likewise obtained a Certificate
Assailed in this Petition for Review on Certiorari 1 are the Court of Appeals'
of Copyright Registration No. 0-11193 for the word
(CA) Decision 2 dated June 25, 2010 and Resolution 3 dated October 27,
"BIRKENSTOCK"; (d) while respondent and its predecessor-in-interest failed
2010 in CA-G.R. SP No. 112278 which reversed and set aside the Intellectual
to file the 10th Year DAU, it continued the use of "BIRKENSTOCK AND
Property Office (IPO) Director General's Decision 4 dated December 22, 2009
DEVICE" in lawful commerce; and (e) to record its continued ownership and
that allowed the registration of various trademarks in favor of petitioner
exclusive right to use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-
Birkenstock Orthopaedie GmbH & Co. KG.
010273 as a "re-application" of its old registration, Registration No.
The Facts 56334. 13 On November 13, 2007, the Bureau of Legal Affairs (BLA) of the
IPO issued Order No. 2007-2051 consolidating the aforesaid inter
Petitioner, a corporation duly organized and existing under the laws of partes cases (Consolidated Opposition Cases). 14 CHEIcS
Germany, applied for various trademark registrations before the IPO,
namely: (a)"BIRKENSTOCK" under Trademark Application Serial No. (TASN) The Ruling of the BLA
4-1994-091508 for goods falling under Class 25 of the International
In its Decision 15 dated May 28, 2008, the BLA of the IPO sustained
Classification of Goods and Services (Nice Classification) with filing date of
respondent's opposition, thus, ordering the rejection of the subject
March 11, 1994; (b)"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE
applications. It ruled that the competing marks of the parties are confusingly
COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF
similar since they contained the word "BIRKENSTOCK" and are used on the
A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-091509 for goods
same and related goods. It found respondent and its predecessor-in-interest
falling under Class 25 of the Nice Classification with filing date of March 11,
as the prior user and adopter of "BIRKENSTOCK" in the Philippines, while on
1994; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE
the other hand, petitioner failed to present evidence of actual use in the trade
COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF
and business in this country. It opined that while Registration No. 56334 was
A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-095043 for goods
cancelled, it does not follow that prior right over the mark was lost, as proof of
falling under Class 10 of the Nice Classification with filing date of September
continuous and uninterrupted use in trade and business in the Philippines was
5, 1994 (subject applications). 5 AcDHCS
presented. The BLA likewise opined that petitioner's marks are not well-known
However, registration proceedings of the subject applications were suspended in the Philippines and internationally and that the various certificates of
in view of an existing registration of the mark "BIRKENSTOCK AND DEVICE" registration submitted by petitioners were all photocopies and, therefore, not
under Registration No. 56334 dated October 21, 1993 (Registration No. admissible as evidence. 16
56334) in the name of Shoe Town International and Industrial Corporation, the
Aggrieved, petitioner appealed to the IPO Director General.
predecessor-in-interest of respondent Philippine Shoe Expo Marketing
Corporation. 6 In this regard, on May 27, 1997 petitioner filed a petition for The Ruling of the IPO Director General
cancellation of Registration No. 56334 on the ground that it is the lawful and
In his Decision 17 dated December 22, 2009, the IPO Director General In its Comment 28 dated April 29, 2011, respondent asserts that the
reversed and set aside the ruling of the BLA, thus allowing the registration of documentary evidence submitted by petitioner in the Consolidated Opposition
the subject applications. He held that with the cancellation of Registration No. Cases, which are mere photocopies, are violative of Section 8.1 of the Rules
56334 for respondent's failure to file the 10th Year DAU, there is no more on Inter Partes Proceedings, which requires certified true copies of documents
reason to reject the subject applications on the ground of prior registration by and evidence presented by parties in lieu of originals. 29 As such, they should
another proprietor. 18 More importantly, he found that the evidence presented be deemed inadmissible.
proved that petitioner is the true and lawful owner and prior user of
"BIRKENSTOCK" marks and thus, entitled to the registration of the marks The Court is not convinced.
covered by the subject applications. 19 The IPO Director General further held It is well-settled that "the rules of procedure are mere tools aimed at facilitating
that respondent's copyright for the word "BIRKENSTOCK" is of no moment the attainment of justice, rather than its frustration. A strict and rigid application
since copyright and trademark are different forms of intellectual property that of the rules must always be eschewed when it would subvert the primary
cannot be interchanged. 20 HETDAC objective of the rules, that is, to enhance fair trials and expedite justice.
Finding the IPO Director General's reversal of the BLA unacceptable, Technicalities should never be used to defeat the substantive rights of the
respondent filed a petition for review with the CA. other party. Every party-litigant must be afforded the amplest opportunity for
the proper and just determination of his cause, free from the constraints of
Ruling of the CA technicalities." 30 "Indeed, the primordial policy is a faithful observance of
In its Decision 21 dated June 25, 2010, the CA reversed and set aside the [procedural rules], and their relaxation or suspension should only be for
persuasive reasons and only in meritorious cases, to relieve a litigant of an
ruling of the IPO Director General and reinstated that of the BLA. It disallowed
the registration of the subject applications on the ground that the marks injustice not commensurate with the degree of his thoughtlessness in not
covered by such applications "are confusingly similar, if not outright identical" complying with the procedure prescribed." 31 This is especially true with
quasi-judicial and administrative bodies, such as the IPO, which are not bound
with respondent's mark. 22 It equally held that respondent's failure to file the
10th Year DAU for Registration No. 56334 "did not deprive petitioner of its by technical rules of procedure. 32 On this score, Section 5 of the Rules
ownership of the "BIRKENSTOCK' mark since it has submitted substantial on Inter Partes Proceedings provides: CSTcEI
evidence showing its continued use, promotion and advertisement thereof up Sec. 5. Rules of Procedure to be followed in the conduct of
to the present." 23 It opined that when respondent's predecessor-in-interest hearing of Inter Partes cases. — The rules of procedure
adopted and started its actual use of "BIRKENSTOCK," there is neither an herein contained primarily apply in the conduct of hearing
existing registration nor a pending application for the same and thus, it cannot of Inter Partes cases. The Rules of Court may be applied
be said that it acted in bad faith in adopting and starting the use of such suppletorily. The Bureau shall not be bound by strict
mark. 24 Finally, the CA agreed with respondent that petitioner's documentary technical rules of procedure and evidence but may
evidence, being mere photocopies, were submitted in violation of Section 8.1 adopt, in the absence of any applicable rule herein,
of Office Order No. 79, Series of 2005 (Rules on Inter Partes Proceedings). such mode of proceedings which is consistent with the
requirements of fair play and conducive to the just,
Dissatisfied, petitioner filed a Motion for Reconsideration 25 dated July 20,
2010, which was, however, denied in a Resolution 26 dated October 27, 2010. speedy and inexpensive disposition of cases, and which
will give the Bureau the greatest possibility to focus on the
Hence, this petition. 27
contentious issues before it. (Emphasis and underscoring
Issues Before the Court supplied)
The primordial issue raised for the Court's resolution is whether or not the In the case at bar, while petitioner submitted mere photocopies as
subject marks should be allowed registration in the name of petitioner. documentary evidence in the Consolidated Opposition Cases, it should be
noted that the IPO had already obtained the originals of such documentary
The Court's Ruling
evidence in the related Cancellation Case earlier filed before it. Under this
The petition is meritorious. circumstance and the merits of the instant case as will be subsequently
discussed, the Court holds that the IPO Director General's relaxation of
A. Admissibility of Petitioner's procedure was a valid exercise of his discretion in the interest of substantial
Documentary Evidence. justice. 33
Having settled the foregoing procedural matter, the Court now proceeds to been so appropriated by another. Significantly, to be an owner, Section 2-A
resolve the substantive issues. does not require that the actual use of a trademark must be within the
Philippines. Thus, under RA 166, one may be an owner of a mark due to its
B. Registration and ownership of actual use but may not yet have the right to register such ownership here due
"BIRKENSTOCK." to the owner's failure to use the same in the Philippines for two (2) months
Republic Act No. (RA) 166, 34 the governing law for Registration No. 56334, prior to registration. 40 EaSCAH
requires the filing of a DAU on specified periods, 35 to wit:
It must be emphasized that registration of a trademark, by itself, is not a mode
Section 12. Duration. — Each certificate of registration shall of acquiring ownership. If the applicant is not the owner of the trademark, he
remain in force for twenty years: Provided, That has no right to apply for its registration. Registration merely creates a prima
registrations under the provisions of this Act shall be facie presumption of the validity of the registration, of the registrant's
cancelled by the Director, unless within one year ownership of the trademark, and of the exclusive right to the use thereof. Such
following the fifth, tenth and fifteenth anniversaries of presumption, just like the presumptive regularity in the performance of official
the date of issue of the certificate of registration, the functions, is rebuttable and must give way to evidence to the contrary. 41
registrant shall file in the Patent Office an affidavit
Clearly, it is not the application or registration of a trademark that vests
showing that the mark or trade-name is still in use or
showing that its non-use is due to special circumstance ownership thereof, but it is the ownership of a trademark that confers the right
which excuse such non-use and is not due to any intention to register the same. A trademark is an industrial property over which its owner
is entitled to property rights which cannot be appropriated by unscrupulous
to abandon the same, and pay the required fee. acCTSE
entities that, in one way or another, happen to register such trademark ahead
The Director shall notify the registrant who files the above- of its true and lawful owner. The presumption of ownership accorded to a
prescribed affidavits of his acceptance or refusal thereof registrant must then necessarily yield to superior evidence of actual and real
and, if a refusal, the reasons therefor. (Emphasis and ownership of a trademark. The Court's pronouncement inBerris Agricultural
underscoring supplied) Co., Inc. v. Abyadang 42 is instructive on this point:
The aforementioned provision clearly reveals that failure to file the DAU within The ownership of a trademark is acquired by its registration
the requisite period results in the automatic cancellation of registration of a and its actual use by the manufacturer or distributor of the
trademark. In turn, such failure is tantamount to the abandonment or goods made available to the purchasing public. . . . A
withdrawal of any right or interest the registrant has over his trademark. 36 certificate of registration of a mark, once issued,
constitutes prima facie evidence of the validity of the
In this case, respondent admitted that it failed to file the 10th Year DAU for registration, of the registrant's ownership of the mark, and
Registration No. 56334 within the requisite period, or on or before October 21, of the registrant's exclusive right to use the same in
2004. As a consequence, it was deemed to have abandoned or withdrawn any connection with the goods or services and those that are
right or interest over the mark "BIRKENSTOCK." Neither can it invoke Section related thereto specified in the certificate. . . . In other words,
236 37 of the IP Code which pertains to intellectual property rights obtained the prima facie presumption brought about by the
under previous intellectual property laws, e.g., RA 166, precisely because it registration of a mark may be challenged and overcome in
already lost any right or interest over the said mark. an appropriate action, . . . by evidence of prior use by
Besides, petitioner has duly established its true and lawful ownership of the another person, i.e., it will controvert a claim of legal
mark "BIRKENSTOCK." appropriation or of ownership based on registration by
a subsequent user. This is because a trademark is a
Under Section 2 38 of RA 166, which is also the law governing the subject creation of use and belongs to one who first used it in
applications, in order to register a trademark, one must be the owner thereof trade or commerce. 43 (Emphasis and underscoring
and must have actually used the mark in commerce in the Philippines for two supplied)
(2) months prior to the application for registration. Section 2-A 39 of the same
law sets out to define how one goes about acquiring ownership thereof. Under In the instant case, petitioner was able to establish that it is the owner of the
the same section, it is clear that actual use in commerce is also the test of mark "BIRKENSTOCK." It submitted evidence relating to the origin and history
ownership but the provision went further by saying that the mark must not have of "BIRKENSTOCK" and its use in commerce long before respondent was able
to register the same here in the Philippines. It has sufficiently proven that
"BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor, Johann SO ORDERED.
Birkenstock, a shoemaker, on his line of quality footwear and thereafter,
numerous generations of his kin continuously engaged in the manufacture and ||| (Birkenstock Orthopaedie GmbH and Co. KG v. Phil. Shoe Expo Marketing
sale of shoes and sandals bearing the mark "BIRKENSTOCK" until it became Corp., G.R. No. 194307, [November 20, 2013], 721 PHIL 867-882)
the entity now known as the petitioner. Petitioner also submitted various
certificates of registration of the mark "BIRKENSTOCK" in various countries
and that it has used such mark in different countries worldwide, including the
Philippines. 44
On the other hand, aside from Registration No. 56334 which had been
cancelled, respondent only presented copies of sales invoices and
advertisements, which are not conclusive evidence of its claim of ownership of
the mark "BIRKENSTOCK" as these merely show the transactions made by
respondent involving the same. 45 ETDHaC
In view of the foregoing circumstances, the Court finds the petitioner to be the
true and lawful owner of the mark "BIRKENSTOCK" and entitled to its
registration, and that respondent was in bad faith in having it registered in its
name. In this regard, the Court quotes with approval the words of the IPO
Director General, viz.:
The facts and evidence fail to show that [respondent] was
in good faith in using and in registering the mark
BIRKENSTOCK. BIRKENSTOCK, obviously of German
origin, is a highly distinct and arbitrary mark. It is very
remote that two persons did coin the same or identical
marks. To come up with a highly distinct and uncommon
mark previously appropriated by another, for use in the
same line of business, and without any plausible
explanation, is incredible. The field from which a person
may select a trademark is practically unlimited. As in all
other cases of colorable imitations, the unanswered riddle
is why, of the millions of terms and combinations of letters
and designs available, [respondent] had to come up with a
mark identical or so closely similar to the [petitioner's] if
there was no intent to take advantage of the goodwill
generated by the [petitioner's] mark. Being on the same line
of business, it is highly probable that the [respondent] knew
of the existence of BIRKENSTOCK and its use by the
[petitioner], before [respondent] appropriated the same
mark and had it registered in its name. 46
WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010
and Resolution dated October 27, 2010 of the Court of Appeals in CA-
G.R. SP No. 112278 are REVERSED and SET ASIDE. Accordingly, the
Decision dated December 22, 2009 of the IPO Director General is
hereby REINSTATED.

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