PEARL & DEAN (PHIL.), INCORPORATED, vs.

3) Whether or not the owner of a registered trademark legally SHOEMART, INCORPORATED prevent others from using such trademark if it is a mere FACTS:Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a abbreviation of a term descriptive of his goods, services or corporation engaged in the manufacture of advertising display business; units simply referred to as light boxes. These units utilize RULING:1) No.2) Yes.3) No. specially printed posters sandwiched between plastic sheets RATIO DECIDENDI:On the first question:Petitioner P & Ds and illuminated with back lights. Pearl and Dean was able to complaint was that SMI infringed on its copyright over the secure a Certificate of Copyright Registration dated January light boxes when SMI had the units manufactured by Metro 20, 1981 over these illuminated display units. The advertising and EYD Rainbow Advertising for its own account. Obviously, light boxes were marketed under the trademark Poster petitioners position was premised on its belief that its Ads. The application for registration of the trademark was copyright over the engineering drawings extended ipso facto to filed with the Bureau of Patents, Trademarks and Technology the light boxes depicted or illustrated in said drawings. In Transfer on June 20, 1983. ruling that there was no copyright infringement, the Court of Sometime in 1985, Pearl and Dean negotiated with defendant- Appeals held that the copyright was limited to the drawings appellant Shoemart, Inc. (SMI) for the lease and installation of alone and not to the light box itself. The Court agrees with the the light boxes in SM City North Edsa. Since SM City North appellate court. Edsa was under construction at that time, SMI offered as an Copyright, in the strict sense of the term, is purely a statutory alternative, SM Makati and SM Cubao, to which Pearl and Dean right. Being a mere statutory grant, the rights are limited to agreed. Only the contract for SM Makati, however, was what the statute confers. It may be obtained and enjoyed only returned signed. On October 4, 1985, Vergara wrote Abano with respect to the subjects and by the persons, and on terms inquiring about the other contract and reminding him that their and conditions specified in the statute. Accordingly, it can agreement for installation of light boxes was not only for its cover only the works falling within the statutory enumeration or SM Makati branch, but also for SM Cubao. SMI did not bother description. to reply. P & D secured its copyright under the classification class O Instead, in a letter dated January 14, 1986, SMIs house work. This being so, petitioners copyright protection extended counsel informed Pearl and Dean that it was rescinding the only to the technical drawings and not to the light box itself contract for SM Makati due to non-performance of the terms because the latter was not at all in the category of prints, thereof. pictorial illustrations, advertising copies, labels, tags and box Two years later, Metro Industrial Services, the company wraps. formerly contracted by Pearl and Dean to fabricate its display During the trial, the president of P & D himself admitted that units, offered to construct light boxes for Shoemarts chain of the light box was neither a literary not an artistic work but an stores. SMI approved the proposal and ten (10) light boxes engineering or marketing invention. were subsequently fabricated by Metro Industrial for Trademark, copyright and patents are different intellectual SMI. After its contract with Metro Industrial was terminated, property rights that cannot be interchanged with one SMI engaged the services of EYD Rainbow Advertising another. A trademark is any visible sign capable of Corporation to make the light boxes. distinguishing the goods (trademark) or services (service mark) Sometime in 1989, Pearl and Dean, received reports that exact of an enterprise and shall include a stamped or marked copies of its light boxes were installed at SM City and in the container of goods. In relation thereto, a trade name means the fastfood section of SM Cubao. Upon investigation, Pearl and name or designation identifying or distinguishing an enterprise. Dean found out that aside from the two (2) reported SM Meanwhile, the scope of a copyright is confined to literary and branches, light boxes similar to those it manufactures were artistic works which are original intellectual creations in the also installed in two (2) other SM stores. It further literary and artistic domain protected from the moment of discovered that defendant-appellant North Edsa Marketing their creation. Patentable inventions, on the other hand, refer Inc. (NEMI), through its marketing arm, Prime Spots Marketing to any technical solution of a problem in any field of human Services, was set up primarily to sell advertising space in activity which is new, involves an inventive step and is lighted display units located in SMIs different branches. It industrially applicable. therefore filed a case for infringement of trademark and On the second question:Petitioner never secured a patent for copyright, unfair competition and damages. the light boxes. It therefore acquired no patent rights which SMI maintained that it independently developed its poster could have protected its invention, if in fact it really was. And panels using commonly known techniques and available because it had no patent, petitioner could not legally prevent technology, without notice of or reference to Pearl and Deans anyone from manufacturing or commercially using the copyright. SMI noted that the registration of the mark contraption. In Creser Precision Systems, Inc. vs. Court of Poster Ads was only for stationeries such as letterheads, Appeals, the Court held that there can be no infringement of a envelopes, and the like. Besides, according to SMI, the word patent until a patent has been issued, since whatever right one Poster Ads is a generic term which cannot be appropriated as has to the invention covered by the patent arises alone from a trademark. the grant of patent. The RTC of Makati City decided in favor of P & D. On appeal, On the third question:This issue concerns the use by however, the Court of Appeals reversed the trial courts ruling. respondents of the mark Poster Ads which petitioners Hence, this petition. president said was a contraction of poster advertising. P & D ISSUES:1) Whether or not the light box depicted in such was able to secure a trademark certificate for it, but one engineering drawings is also protected by such copyright if the where the goods specified were stationeries such as engineering or technical drawings of an advertising display unit letterheads, envelopes, calling cards and newsletters. (light box) are granted copyright protection (copyright Petitioner admitted it did not commercially engage in or market certificate of registration) by the National Library; these goods. On the contrary, it dealt in electrically operated 2) Whether or not light box should be registered separately backlit advertising units and the sale of advertising spaces and protected by a patent issued by the Bureau of Patents thereon, which, however, were not at all specified in the Trademarks and Technology Transfer (now Intellectual trademark certificate. Property Office) in addition to the copyright of the Under the circumstances, the Court of Appeals correctly engineering drawings; cited Faberge Inc. vs. Intermediate Appellate Court where the

Court, invoking Section 20 of the old Trademark Law, ruled similarity. Such comparison requires a careful scrutiny to that the certificate of registration issued by the Director of determine in what points the labels of the products differ, as Patents can confer (upon petitioner) the exclusive right to use was done by the trial judge. The ordinary buyer does not usually its own symbol only to those goods specified in the certificate, make such scrutiny nor does he usually have the time to do so. subject to any conditions and limitations specified in the The average shopper is usually in a hurry and does not inspect certificate x x x. One who has adopted and used a trademark every product on the shelf as if he were browsing in a library. on his goods does not prevent the adoption and use of the same The question is not whether the two articles are distinguishable trademark by others for products which are of a by their label when set side by side but whether the general different description. confusion made by the article upon the eye of the casual Assuming arguendo that Poster Ads could validly qualify as a purchaser who is unsuspicious and off his guard, is such as to trademark, the failure of P & D to secure a trademark likely result in his confounding it with the original. registration for specific use on the light boxes meant that Sunshine Sauces logo is a colorable imitation of Del Montes there could not have been any trademark infringement since trademark. The word catsup in both bottles is printed in registration was an essential element thereof. white and the style of the print/letter is the same. Although DEL MONTE CORPORATION and PHILIPPINE PACKING the logo of Sunshine is not a tomato, the figure nevertheless CORPORATION,vs.SUNSHINE approximates that of a tomato. The person who infringes a FACTS:Petitioner Del Monte Corporation is a foreign company trade mark does not normally copy out but only makes colorable organized under the laws of the United States and not engaged changes, employing enough points of similarity to confuse the in business in the Philippines. Both the Philippines and the public with enough points of differences to confuse the courts. United States are signatories to the Convention of Paris of What is undeniable is the fact that when September 27, 1965, which grants to the nationals of the a manufacturer prepares to package his product, he has before parties rights and advantages which their own nationals enjoy him a boundless choice of words, phrases, colors and symbols for the repression of acts of infringement and unfair sufficient to distinguish his product from the others. When as competition. in this case, Sunshine chose, without a reasonable explanation, Petitioner Philippine Packing Corporation (Philpack) is a to use the same colors and letters as those used by Del Monte domestic corporation duly organized under the laws of the though the field of its selection was so broad, the inevitable Philippines. On April 11, 1969, Del Monte granted Philpack the conclusion is that it was done deliberately to deceive. right to manufacture, distribute and sell in the Philippines The Supreme Court also ruled that Del Monte does not have the various agricultural products, including catsup, under the Del exclusive right to use Del Monte bottles in the Philippines Monte trademark and logo. because Philpacks patent was only registered under the On October 27,1965, Del Monte authorized Philpack to register Supplemental Register and not with the Principal Register. with the Philippine Patent Office the Del Monte catsup bottle Under the law, registration under the Supplemental Register is configuration, for which it was granted Certificate of not a basis for a case of infringement because unlike Trademark Registration No. SR-913 by the Philippine Patent registration under the Principal Register, it does not grant Office under the Supplemental Register. On November 20, exclusive use of the patent. However, the bottles of Del Monte 1972, Del Monte also obtained two registration certificates for do say in embossed letters: Del Monte Corporation, Not to be its trademark "DEL MONTE" and its logo. Refilled. And yet Sunshine Sauce refilled these bottles with Respondent Sunshine Sauce Manufacturing Industries was its catsup products. This clearly shows the Sunshine Sauces issued a Certificate of Registration by the Bureau of Domestic bad faith and its intention to capitalize on the Del Montes Trade on April 17,1980, to engage in the manufacture, packing, reputation and goodwill and pass off its own product as that of distribution and sale of various kinds of sauce, identified by theDel Monte. logo Sunshine Fruit Catsup. This logo was registered in the MCDONALD'S CORPORATION vs.L.C. BIG MAK BURGER, Supplemental Register on September 20, 1983. The product FACTS:Petitioner McDonald's Corporation ("McDonald's") is a itself was contained in various kinds of bottles, including the corporation organized under the laws of Delaware, United Del Monte bottle, which the private respondent bought from States. McDonald's operates, by itself or through its the junk shops for recycling. franchisees, a global chain of fast-food restaurants. Having received reports that the private respondent was using McDonald's owns a family of marks including the "Big Mac" mark its exclusively designed bottles and a logo confusingly similar to for its "double-decker hamburger sandwich." It applied Del Monte's, Philpack warned it to desist from doing so on pain for the registration of the same mark in the Principal Register of legal action. Thereafter, claiming that the demand had been of the then Philippine Bureau of Patents, Trademarks and ignored, Philpack and Del Monte filed a complaint against the Technology ("PBPTT"), now the Intellectual Property Office private respondent for infringement of trademark and unfair ("IPO"). Pending approval of its application, McDonald's competition, with a prayer for damages and the issuance of a introduced its "Big Mac" hamburger sandwiches in the Philippine writ of preliminary injunction. market in September 1981. On 18 July 1985, the PBPTT allowed In its answer, Sunshine alleged that it had long ceased to use registration of the "Big Mac" mark in the Principal Register the Del Monte bottle and that its logo was substantially based on its Home Registration in the United States. different from the Del Monte logo and would not confuse the Respondent L.C. Big Mak Burger, Inc. ("respondent buying public to the detriment of the petitioners. corporation") is a domestic corporation which operates fastThe RTC dismissed the complaint. This decision was affirmed in food outlets and snack vans in Metro Manila and nearby toto by the respondent court, which is now faulted in this provinces. Respondent corporation's menu includes hamburger petition for certiorari under Rule 45 of the Rules of Court. sandwiches and other food items.On 21 October 1988, ISSUE:Whether or not the private respondent is liable for respondent corporation applied with the PBPTT infringement of trademark and of unfair competition for the registration of the "Big Mak" mark for its hamburger RULING:Yes. sandwiches. McDonald's opposed respondent corporation's RATIO DECIDENDI:The Supreme Court recognizes that there application on the ground that "Big Mak" was a colorable really are distinctions between the designs of the logos or imitation of its registered "Big Mac" mark for the same food trademarks of Del Monte and Sunshine Sauce. However, it has products. The latter sued respondents for trademark been that side by side comparison is not the final test of infringement and unfair competition. similarity. Side-by-side comparison is not the final test of In their Answer, respondents admitted that they have been

using the name "Big Mak Burger" for their fast-food business. respondents use the "Big Mak" mark on hamburgers and other Respondents claimed, however, that McDonald's does not have products like siopao, noodles and pizza. Respondents also point an exclusive right to the "Big Mac" mark or to any other similar out that petitioners sell their Big Mac double-deckers in a mark. Respondents point out that the Isaiyas Group of styrofoam box with the "McDonald's" logo and trademark in Corporations ("Isaiyas Group") registered the same mark for red, block letters at a price more expensive than the hamburger sandwiches with the PBPTT on 31 March 1979. One hamburgers of respondents. In contrast, respondents sell their Rodolfo Topacio ("Topacio") similarly registered the same mark Big Mak hamburgers in plastic wrappers and plastic bags. on 24 June 1983, prior to McDonald's registration on 18 July Respondents further point out that petitioners' restaurants 1985.Alternatively, respondents claimed that they are not liableare air-conditioned buildings with drive-thru service, compared for trademark infringement or for unfair competition, as the to respondents' mobile vans. "Big Mak" mark they sought to register does not constitute a These and other factors respondents cite cannot negate the colorable imitation of the "Big Mac" mark. Respondents undisputed fact that respondents use their "Big Mak" mark on asserted that they did not fraudulently pass off their hamburgers, the same food product that petitioners' sell hamburger sandwiches as those of petitioners' Big Mac with the use of their registered mark "Big Mac." Whether a hamburgers. Respondents sought damages in their counterclaim. hamburger is single, double or triple-decker, and whether In their Reply, petitioners denied respondents' claim that wrapped in plastic or styrofoam, it remains the same hamburger McDonald's is not the exclusive owner of the "Big Mac" mark. food product. Even respondents' use of the "Big Mak" mark on Petitioners asserted that while the Isaiyas Group and Topacio non-hamburger food products cannot excuse their infringement did register the "Big Mac" mark ahead of McDonald's, the of petitioners' registered mark, otherwise registered marks Isaiyas Group did so only in the Supplemental Register of the will lose their protection under the law. PBPTT and such registration does not provide any protection. In determining likelihood of confusion, jurisprudence has The RTC ruled that L.C. Big Mak Burger,Inc. is liable for developed two tests, the dominancy test and the holistic test. trademark infringement and unfair competition. Said decision The dominancy test focuses on the similarity of was reversed by the Court of Appeals. Hence, this petition. the prevalent features of the competing trademarks that might ISSUE:Whether or not L.C. Big Mak Burger,Inc. is liable for cause confusion. In contrast, the holistic test requires the trademark infringement and unfair competition court to consider the entirety of the marks as applied to the RULING:Yes.RATIO DECIDENDI:Petitioners base their cause products, including the labels and packaging, of action under the first part of Section 22, i.e. respondents in determining confusing similarity. allegedly used, without petitioners' consent, a colorable Applying the dominancy test, the Court finds that respondents' imitation of the "Big Mac" mark in advertising and selling use of the "Big Mak" mark results in likelihood of confusion. respondents' hamburger sandwiches. This likely caused First, "Big Mak" sounds exactly the same as "Big Mac." Second, confusion in the mind of the purchasing public on the source of the first word in "Big Mak" is exactly the same as the first the hamburgers or the identity of the business. word in "Big Mac." Third, the first two letters in "Mak" are the To establish trademark infringement, the following elements same as the first two letters in "Mac." Fourth, the last letter in must be shown: (1) the validity of plaintiff's mark; (2) the "Mak" while a "k" sounds the same as "c" when the word "Mak" plaintiff's ownership of the mark; and (3) the use of the mark is pronounced. Fifth, in Filipino, the letter "k" replaces "c" in or its colorable imitation by the alleged infringer results in spelling, thus "Caloocan" is spelled "Kalookan." "likelihood of confusion." Of these, it is the element In short, aurally the two marks are the same, with the first of likelihood of confusion that is the gravamen of trademark word of both marks phonetically the same, and the second word infringement. of both marks also phonetically the same. Visually, the two A mark is valid if it is "distinctive" and thus not barred from marks have both two words and six letters, with the first word registration under Section 4 of RA 166 ("Section 4").However, of both marks having the same letters and the second word once registered, not only the mark's validity but also the having the same first two letters. In spelling, considering the registrant's ownership of the mark is prima facie presumed. Filipino language, even the last letters of both marks are the The "Big Mac" mark, which should be treated in its entirety and same. not dissected word for word, is neither generic nor descriptive. Clearly, respondents have adopted in "Big Mak" not only the "Big Mac" falls under the class of fanciful or arbitrary marks as dominant but also almost all the features of "Big Mac." Applied it bears no logical relation to the actual characteristics of the to the same food product of hamburgers, the two marks will product it represents. As such, it is highly distinctive and thus likely result in confusion in the public mind. valid.Petitioners claim that respondents' use of the "Big Mak" Certainly, "Big Mac" and "Big Mak" for hamburgers create even mark on respondents' hamburgers results in confusion of goods, greater confusion, not only aurally but also visually. particularly with respect to petitioners' hamburgers labeled Indeed, a person cannot distinguish "Big Mac" from "Big Mak" "Big Mac." They also claim that respondents' use of the "Big by their sound. When one hears a "Big Mac" or "Big Mak" Mak" mark in the sale of hamburgers, the same business that hamburger advertisement over the radio, one would not know petitioners are engaged in, results in confusion of business. whether the "Mac" or "Mak" ends with a "c" or a "k." Respondents assert that their "Big Mak" hamburgers Petitioners' aggressive promotion of the "Big Mac" mark, as cater mainly to the low-income group while petitioners' "Big borne by their advertisement expenses, has built goodwill and Mac" hamburgers cater to the middle and upper income groups. reputation for such mark making it one of the easily Even if this is true, the likelihood of confusion of business recognizable marks in the market today. This increases the remains, since the low-income group might be led to believe likelihood that consumers will mistakenly associate petitioners' that the "Big Mak" hamburgers are the low-end hamburgers hamburgers and business with those of respondents'. marketed by petitioners. After all, petitioners have the Respondents' inability to explain sufficiently how and why they exclusive right to use the "Big Mac" mark.On the other came to choose "Big Mak" for their hamburger hand, respondents would benefit by associating their low-end sandwiches indicates their intent to imitate petitioners' "Big hamburgers, through the use of the "Big Mak" mark, with Mac" mark. Absent proof that respondents' adoption of the petitioners' high-end "Big Mac" hamburgers, leading to "Big Mak" mark was due to honest mistake or was fortuitous, likelihood of confusion in the identity of business. the inescapable conclusion is that respondents adopted the "Big Respondents further claim that petitioners use the "Big Mac" Mak" mark to "ride on the coattails" of the more established mark only on petitioners' double-decker hamburgers, while "Big Mac" mark. This saves respondents much of the expense in

advertising to create market recognition of their mark and hamburgers, respondents have obviously clothed their goods hamburgers. with the general appearance of petitioners' goods. The essential elements of an action for unfair competition are Thus, there is actually no notice to the public that the "Big (1) confusing similarity in the general appearance of the goods, Mak" hamburgers are products of "L.C. Big Mak Burger, Inc." and (2) intent to deceive the public and defraud a competitor. and not those of petitioners who have the exclusive right to the The confusing similarity may or may not result from similarity "Big Mac" mark. This clearly shows respondents' intent to in the marks, but may result from other external factors deceive the public. Had respondents' placed a notice on their in the packaging or presentation of the goods. The intent to plastic wrappers and bags that the hamburgers are sold by "L.C. deceive and defraud may be inferred from the similarity of the Big Mak Burger, Inc.", then they could validly claim that they appearance of the goods as offered for sale to the did not intend to deceive the public. In such case, there is only public. Actual fraudulent intent need not be shown. trademark infringement but no unfair competition. Unfair competition is broader than trademark infringement and Respondents, however, did not give such notice. We hold that as includes passing off goods with or without trademark found by the RTC, respondent corporation is liable for unfair infringement. Trademark infringement is a form of unfair competition. competition. Trademark infringement constitutes unfair EMERALD GARMENT MANUFACTURING CORPORATION,vs. competition when there is not merely likelihood of confusion, H.D. LEE COMPANY, INC., but also actual or probable deception on the public because of FACTS:On 18 September 1981, private respondent H.D. Lee the general appearance of the goods. There can be trademark Co., Inc., a foreign corporation organized under the laws of infringement without unfair competition as when the infringer Delaware, U.S.A., filed with the Bureau of Patents, Trademarks discloses on the labels containing the mark that he & Technology Transfer (BPTTT) a Petition for Cancellation of manufactures the goods, thus preventing the public from being Registration No. SR 5054 (Supplemental Register) for the deceived that the goods originate from the trademark owner. trademark "STYLISTIC MR. LEE" used on skirts, jeans, Passing off (or palming off) takes place where the defendant, blouses, socks, briefs, jackets, jogging suits, dresses, shorts, by imitative devices on the general appearance of the goods, shirts and lingerie under Class 25, issued on 27 October 1980 in misleads prospective purchasers into buying his merchandise the name of petitioner Emerald Garment Manufacturing under the impression that they are buying that of his Corporation, a domestic corporation organized and existing competitors. Thus, the defendant gives his goods the general under Philippine laws. It averred that petitioner's trademark appearance of the goods of his competitor with the intention of "so closely resembled its own trademark, 'LEE' as previously deceiving the public that the goods are those of his competitor. registered and used in the Philippines and that it would cause The RTC described the respective marks and the goods of confusion, mistake and deception on the part of the purchasing petitioners and respondents in this wise: public as to the origin of the goods." The mark "B[ig] M[ac]" is used by plaintiff McDonald's to Petitioner contended that its trademark was entirely and identify its double decker hamburger sandwich. The packaging unmistakably different from that of private respondent and material is a styrofoam box with the McDonald's logo and that its certificate of registration was legally and validly trademark in red with block capital letters printed on it. All granted. letters of the "B[ig] M[ac]" mark are also in red and block On 20 February 1984, petitioner caused the publication of its capital letters. On the other hand, defendants' "B[ig] M[ak]" application for registration of the trademark "STYLISTIC MR. script print is in orange with only the letter "B" and "M" being LEE" in the Principal Register." It was opposed by the private capitalized and the packaging material is plastic wrapper. xxxx respondent. Further, plaintiffs' logo and mascot are the umbrella "M" and On 19 July 1988, the Director of Patents rendered a decision "Ronald McDonald's", respectively, compared to the mascot of granting private respondent's petition for cancellation and defendant Corporation which is a chubby boy called "Macky" opposition to registration. On appeal, the Court of Appeals displayed or printed between the words "Big" and "Mak." affirmed the decision of the Director of Patents. Petitioners Respondents point to these dissimilarities as proof that they Motion for Reconsideration was denied. Hence, this petition. did not give their hamburgers the general appearance of ISSUE:Whether or not petitioner's "STYLISTIC MR. LEE" is petitioners' "Big Mac" hamburgers. confusingly similar to private respondent's "LEE" trademark The dissimilarities in the packaging are minor compared to RULING:No. the stark similarities in the words that give respondents' "Big RATIO DECIDENDI:Petitioner's trademark is the whole Mak" hamburgers the general appearance of petitioners' "Big "STYLISTIC MR. LEE." Although on its label the word "LEE" is Mac" hamburgers. Section 29(a) expressly provides that the prominent, the trademark should be considered as a whole and similarity in the general appearance of the goods may be in the not piecemeal. The dissimilarities between the two marks "devices or words" used on the wrappings. Respondents have become conspicuous, noticeable and substantial enough to applied on their plastic wrappers and bags almost the same matter especially in the light of the following variables that wordsthat petitioners use on their styrofoam box. What must be factored in. attracts the attention of the buying public are the words "Big First, the products involved in the case at bar are, in the main, Mak" which are almost the same, aurally and visually, as the various kinds of jeans. These are not your ordinary household words "Big Mac." The dissimilarities in the material and other items like catsup, soysauce or soap which are of minimal cost. devices are insignificant compared to the glaring similarity in Maong pants or jeans are not inexpensive. Accordingly, the the words used in the wrappings. casual buyer is predisposed to be more cautious and Section 29(a) also provides that the defendant gives "his goods discriminating in and would prefer to mull over his purchase. the general appearance of goods of another manufacturer." Confusion and deception, then, is less likely. Respondents' goods are hamburgers which are also the goods ofSecond, like his beer, the average Filipino consumer generally petitioners. If respondents sold egg sandwiches only instead buys his jeans by brand. He does not ask the sales clerk for of hamburger sandwiches, their use of the "Big Mak" mark generic jeans but for, say, a Levis, Guess, Wrangler or even an would not give their goods the general appearance of Armani. He is, therefore, more or less knowledgeable and petitioners' "Big Mac" hamburgers. In such case, there is only familiar with his preference and will not easily be distracted. trademark infringement but no unfair competition. However, Finally, in line with the foregoing discussions, more credit since respondents chose to apply the "Big Mak" mark on should be given to the "ordinary purchaser." Cast in this hamburgers, just like petitioner's use of the "Big Mac" mark on particular controversy, the ordinary purchaser is not the

"completely unwary consumer" but is the "ordinarily intelligent from the use by petitioner of the mark "Rolex" considering that buyer" considering the type of product involved. its entertainment business is totally unrelated to the items The "ordinary purchaser" was defined as one "accustomed to catered by respondents such as watches, clocks, bracelets and buy, and therefore to some extent familiar with, the goods in parts thereof. question. The test of fraudulent simulation is to be found in the On July 21, 2000, petitioner filed a motion for preliminary likelihood of the deception of some persons in some measure hearing on its affirmative defenses. Subsequently, on motion of acquainted with an established design and desirous of petitioner, the trial court issued a subpoena ad purchasing the commodity with which that design has been testificandum requiring Atty. Alonzo Ancheta to appear at the associated. The test is not found in the deception, or the preliminary hearing. Respondents, in the meantime, filed a possibility of deception, of the person who knows nothing about Comment and Opposition to the motion for preliminary hearing the design which has been counterfeited, and who must be and a motion to quash the subpoena ad testificandum. indifferent between that and the other. The simulation, in In an Order dated October 27, 2000, the trial court quashed order to be objectionable, must be such as appears likely to the subpoena ad testificandum and denied petitioners motion mislead the ordinary intelligent buyer who has a need to supply for preliminary hearing on affirmative defenses with motion to and is familiar with the article that he seeks to purchase." dismiss. There is no cause for the Court of Appeal's apprehension that With the denial of the motion for reconsideration on March 16, petitioner's products might be mistaken as "another variation 2001, petitioner filed a petition for certiorari with the Court of or line of garments under private respondent's 'LEE' Appeals contending that the trial court gravely abused its 36 trademark". As one would readily observe, private discretion in issuing the October 27, 2000 and March 16, 2001 respondent's variation follows a standard format orders. "LEERIDERS," "LEESURES" and "LEELEENS." It is, therefore, On November 28, 2002, the Court of Appeals dismissed the improbable that the public would immediately and naturally petition. The motion for reconsideration filed by petitioner was conclude that petitioner's "STYLISTIC MR. LEE" is but denied. Hence, the instant petition. another variation under private respondent's "LEE" mark. ISSUES:1) Whether or not the trial court denied not only Another way of resolving the conflict is to consider the marks petitioners motion for preliminary hearing on its affirmative involved from the point of view of what marks are registrable defenses but its motion to dismiss as well; pursuant to Sec. 4 of R.A. No. 166, particularly paragraph 4 (e). 2) If the answer is in the affirmative, whether or not the trial "LEE" is primarily a surname. Private respondent cannot, court gravely abused its discretion in denying said motions; and therefore, acquire exclusive ownership over and singular use of 3) Whether the trial court gravely abused its discretion in said term. quashing the subpoena ad testificandum issued against Atty. In addition to the foregoing, the Court is constrained to agree Ancheta with petitioner's contention that private respondent failed to RULING:1) Yes.2) No.3) No. prove prior actual commercial use of its "LEE" trademark in the RATIO DECIDENDI:The Court finds that what was denied in Philippines before filing its application for registration with the the order dated October 27, 2000 was not only the motion for BPTTT and hence, has not acquired ownership over said mark. preliminary hearing but the motion to dismiss as well. A reading Actual use in commerce in the Philippines is an essential of the dispositive portion of said order shows that the trial prerequisite for the acquisition of ownership over a trademark court neither qualified its denial nor held in abeyance the ruling pursuant to Sec. 2 and 2-A of the Philippine Trademark Law on petitioners motion to dismiss. (R.A. No. 166).Undisputably, private respondent is the senior In issuing the assailed order, the trial court ruled on the merits registrant, having obtained several registration certificates for of petitioners Motion to Dismiss vis--vis respondents its various trademarks "LEE," "LEERIDERS," and "LEESURES" Comment and Opposition which clearly traversed the in both the supplemental and principal registers, as early as affirmative defenses raised by petitioner. 1969 to 1973. However, registration alone will not suffice. Moreover, it is presumed that all matters within an issue raised The credibility placed on a certificate of registration of one's in a case were passed upon by the court. In the absence of trademark, or its weight as evidence of validity, ownership and evidence to the contrary, the presumption is that the court a exclusive use, is qualified. A registration certificate serves quo discharged its task properly. merely as prima facie evidence. It is not conclusive but can and Under the old Trademark Law where the goods for which the may be rebutted by controverting evidence. identical marks are used are unrelated, there can be no Moreover, the aforequoted provision applies only to likelihood of confusion and there is therefore no infringement registrations in the principal register. Registrations in the in the use by the junior user of the registered mark on the supplemental register do not enjoy a similar privilege. A entirely different goods. This ruling, however, has been to some supplemental register was created precisely for the extent, modified by Section 123.1(f) of the Intellectual registration of marks which are not registrable on the principal Property Code (Republic Act No. 8293), which took effect on register due to some defects. January 1, 1998. 246 CORPORATION, style of ROLEX MUSIC A junior user of a well-known mark on goods or services which LOUNGEvs.HROLEX CENTRE PHIL. LIMITED are not similar to the goods or services, and are therefore FACTS:On November 26, 1998, respondents Montres Rolex unrelated, to those specified in the certificate of registration S.A. and Rolex Centre Phil., Limited, owners/proprietors of of the well-known mark is precluded from using the same on the Rolex and Crown Device, filed against petitioner 246 entirely unrelated goods or services, subject to the certain Corporation the instant suit for trademark infringement and requisites.Section 123.1(f) is clearly in point because the Music damages with prayer for the issuance of a restraining order or Lounge of petitioner is entirely unrelated to respondents writ of preliminary injunction. They alleged that sometime in business involving watches, clocks, bracelets, etc. However, the July 1996, petitioner adopted and, since then, has been using Court cannot yet resolve the merits of the present controversy without authority the mark "Rolex" in its business name "Rolex considering that the requisites for the application of Section Music Lounge" as well as in its newspaper advertisements as 123.1(f), which constitute the kernel issue at bar, clearly "Rolex Music Lounge, KTV, Disco & Party Club." require determination facts of which need to be resolved at In its answer raising special affirmative defenses, petitioner the trial court.The same is true with respect to the issue of argued that respondents have no cause of action because no whether Atty. Alonzo Ancheta was properly authorized to sign trademark infringement exist; that no confusion would arise the verification and certification against forum shopping in

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