PHILIP MORRIS V. CA (G.R. NO.

91332)

Facts:

Petitioners are foreign corporations organized under US laws not doing business in the Philippines and
registered owners of symbols ‘MARK VII,’ ‘MARK TEN,’ and ‘LARK’ used in their cigarette products.
Petitioners moved to enjoin respondent Fortune Tobacco from manufacturing and selling cigarettes
bearing the symbol ‘MARK’ asserting that it is identical or confusingly similar with their trademarks.
Petitioners relied on Section 21-A of the Trademark Law to bring their suit and the Paris Convention to
protect their trademarks. The court denied the prayer for injunction stating that since petitioners are
not doing business in the Philippines, respondent’s cigarettes would not cause irreparable damage to
petitioner. CA granted the injunction but on a subsequent motion, dissolved the writ.

Issues:

(1) Whether or not petitioner’s mark may be afforded protection under said laws;

(2) Whether or not petitioner may be granted injunctive relief.

Ruling:

(1) NO. Yet, insofar as this discourse is concerned, there is no necessity to treat the matter with an
extensive response because adherence of the Philippines to the 1965 international covenant due to pact
sunt servanda had been acknowledged in La Chemise. Given these confluence of existing laws amidst
the cases involving trademarks, there can be no disagreement to the guiding principle in commercial law
that foreign corporations not engaged in business in the Philippines may maintain a cause of action for
infringement primarily because of Section 21-A of the Trademark Law when the legal standing to sue is
alleged, which petitioners have done in the case at hand.

Petitioners may have the capacity to sue for infringement irrespective of lack of business activity in the
Philippines on account of Section 21-A of the Trademark Law but the question whether they have an
exclusive right over their symbol as to justify issuance of the controversial writ will depend on actual use
of their trademarks in the Philippines in line with Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a foreign corporation not licensed to do business in
Philippines files a complaint for infringement, the entity need not be actually using its trademark in
commerce in the Philippines. Such a foreign corporation may have the personality to file a suit for
infringement but it may not necessarily be entitled to protection due to absence of actual use of the
emblem in the local market.

(2) NO. More telling are the allegations of petitioners in their complaint as well as in the very petition
filed with this Court indicating that they are not doing business in the Philippines, for these frank
representations are inconsistent and incongruent with any pretense of a right which can breached.
Indeed, to be entitled to an injunctive writ, petitioner must show that there exists a right to be
protected and that the facts against which injunction is directed are violative of said right. On the
economic repercussion of this case, we are extremely bothered by the thought of having to participate
in throwing into the streets Filipino workers engaged in the manufacture and sale of private
respondent’s “MARK” cigarettes who might be retrenched and forced to join the ranks of the many
unemployed and unproductive as a result of the issuance of a simple writ of preliminary injunction and
this, during the pendency of the case before the trial court, not to mention the diminution of tax
revenues represented to be close to a quarter million pesos annually. On the other hand, if the status
quo is maintained, there will be no damage that would be suffered by petitioners inasmuch as they are
not doing business in the Philippines. In view of the explicit representation of petitioners in the
complaint that they are not engaged in business in the Philippines, it inevitably follows that no
conceivable damage can be suffered by them not to mention the foremost consideration heretofore
discussed on the absence of their “right” to be protected.

Berris vs Abyadang

FACTS:

Abyadang filed a trademark application with the IPO for the mark "NS D-10 PLUS" for use in connection
with Fungicide. Berris Agricultural Co., Inc. filed an opposition against the trademark citing that it is
confusingly similar with their trademark, "D-10 80 WP" which is also used for Fungicide also with the
same active ingredient.

The IPO ruled in favor of Berries but on appeal with the CA, the CA ruled in favor of Abyadang.

ISSUE: Whether there is confusing similarity between the trademarks.

RULING:

Yes. The SC found that both products have the component D-10 as their ingredient and that it is the
dominant feature in both their marks. Applying the Dominancy Test, Abyadang's product is similar to
Berris' and that confusion may likely to occur especially that both in the same type of goods. Also using
the Holistic Test, it was more obvious that there is likelihood of confusion in their packaging and color
schemes of the marks. The SC states that buyers would think that Abyadang's product is an upgrade of
Berris'.

CANON KABUSHIKI KAISHA V. CA (G.R. NO. 120900)

Facts:

Respondent NSR Rubber filed an application for registration of the mark CANON for sandals. Petitioner
Canon, a Japanese corporation, opposed alleging it will be damaged by the registration. Petitioner
presented evidence that it was the owner of the mark CANON in various countries and in the Philippines
for goods such as paints, chemical products, toner and dye stuff. BPTTT dismissed the opposition and
gave due course to respondent’s application. CA affirmed. Petitioner invokes Article 8 of the Paris
Convention which affords protection to a tradename whether or not it forms part of a trademark.

Issue:

Whether or not petitioner may be afforded protection of its trade name.

Ruling: NO.

The term “trademark” is defined by RA 166, the Trademark Law, as including “any word, name, symbol,
emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to
identify his goods and distinguish them for those manufactured, sold or dealt in by others.” Tradename
is defined by the same law as including “individual names and surnames, firm names, tradenames,
devices or words used by manufacturers, industrialists, merchants, agriculturists, and others to identify
their business, vocations, or occupations; the names or titles lawfully adopted and used by natural or
juridical persons, unions, and any manufacturing, industrial, commercial, agricultural or other
organizations engaged in trade or commerce.” Simply put, a trade name refers to the business and its
goodwill; a trademark refers to the goods.

The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris
Convention, of which both the Philippines and Japan, the country of petitioner, are signatories, is a
multilateral treaty that seeks to protect industrial property consisting of patents, utility models,
industrial designs, trademarks, service marks, trade names and indications of source or appellations of
origin, and at the same time aims to repress unfair competition. We agree with public respondents that
the controlling doctrine with respect to the applicability of Article 8 of the Paris Convention is that
established in Kabushi Kaisha Isetan vs. IAC. As pointed out by the BPTTT: “Regarding the applicability of
Article 8 of the Paris Convention, this Office believes that there is no automatic protection afforded an
entity whose tradename is alleged to have been infringed through the use of that name as a trademark
by a local entity. To illustrate – if a taxicab or bus company in a town in the United Kingdom or India
happens to use the tradename “Rapid Transportation”, it does not necessarily follow that “Rapid” can
no longer be registered in Uganda, Fiji, or the Philippines.”

SOCIETE DES PRODUITS NESTLE V. CA (G.R. NO. 112012)

Facts:

Respondent CFC Corporation filed an application for the registration of the trademark FLAVOR MASTER
for instant coffee. Petitioners, a Swiss company and a domestic corporation licensee of Societe, opposed
on the ground that it is confusingly similar to its trademark for coffee and coffee extracts: MASTER
ROAST and MASTER BLEND. Petitioners contend that the dominant word MASTER is present in the 3
trademarks. Respondent CFC argued that the word MASTER cannot be exclusively appropriated being a
descriptive or generic term. BPTTT denied CFC’s application. CA held otherwise.

Issue:

Whether or not the word MASTER is descriptive or generic term incapable of exclusive appropriation.
Ruling: NO.

The word “MASTER” is neither a generic nor a descriptive term. As such, said term cannot be invalidated
as a trademark and, therefore, may be legally protected. Generic terms are those which constitute “the
common descriptive name of an article or substance,” or comprise the “genus of which the particular
product is a species,” or are “commonly used as the name or description of a kind of goods,” or “imply
reference to every member of a genus and the exclusion of individuating characters,” or “refer to the
basic nature of the wares or services provided rather than to the more idiosyncratic characteristics of a
particular product,” and are not legally protectable. On the other hand, a term is descriptive and
therefore invalid as a trademark if, as understood in its normal and natural sense, it “forthwith conveys
the characteristics, functions, qualities or ingredients of a product to one who has never seen it and
does not know what it is,” or “if it forthwith conveys an immediate idea of the ingredients, qualities or
characteristics of the goods,” or if it clearly denotes what goods or services are provided in such a way
that the consumer does not have to exercise powers of perception or imagination.

Rather, the term “MASTER” is a suggestive term brought about by the advertising scheme of Nestle.
Suggestive terms are those which, in the phraseology of one court, require “imagination, thought and
perception to reach a conclusion as to the nature of the goods.” Such terms, “which subtly connote
something about the product,” are eligible for protection in the absence of secondary meaning. While
suggestive marks are capable of shedding “some light” upon certain characteristics of the goods or
services in dispute, they nevertheless involve “an element of incongruity,” “figurativeness,” or ”
imaginative effort on the part of the observer.” The term “MASTER”, therefore, has acquired a certain
connotation to mean the coffee products MASTER ROAST and MASTER BLEND produced by Nestle. As
such, the use by CFC of the term “MASTER” in the trademark for its coffee product FLAVOR MASTER is
likely to cause confusion or mistake or even to deceive the ordinary purchasers.

COFFEE PARTNERS V. SAN FRANCISCO COFFEE & ROASTERY (G.R. NO. 169504)

Facts:

Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd. to operate
coffee shops in the country using the trademark ‘San Francisco Coffee.’ Respondent on the other hand,
is a local corporation engaged in the wholesale and retail sale of coffee and uses the business name ‘San
Francisco Coffee & Roastery’ registered with the DTI. Later, respondent filed an infringement and/or
unfair competition complaint against petitioner alleging that the latter was about to open a coffee shop
under the name ‘San Francisco Coffee’ causing confusion in the minds of the public as it bore a similar
name and is engaged also in selling of coffee. Petitioner contended no infringement would arise because
respondent’s tradename was not registered.

Issue:

Whether or not petitioner’s trademark would infringe respondent’s tradename.

Ruling: YES.

In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down what
constitutes infringement of an unregistered trade name, thus:

(1) The trademark being infringed is registered in the Intellectual Property Office; however, in
infringement of trade name, the same need not be registered;

(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the
infringer;

(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising
of any goods, business or services; or the infringing mark or trade name is applied to labels, signs, prints,
packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with
such goods, business, or services;

(4) The use or application of the infringing mark or trade name is likely to cause confusion or mistake or
to deceive purchasers or others as to the goods or services themselves or as to the source or origin of
such goods or services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.

RA 8293, which took effect on 1 January 1998, has dispensed with the registration requirement. Section
165.2 of RA 8293 categorically states that trade names shall be protected, even prior to or without
registration with the IPO, against any unlawful act including any subsequent use of the trade name by a
third party, whether as a trade name or a trademark likely to mislead the public.

It is the likelihood of confusion that is the gravamen of infringement. Applying the dominancy test or the
holistic test, petitioner’s “SAN FRANCISCO COFFEE” trademark is a clear infringement of respondent’s
“SAN FRANCISCO COFFEE & ROASTERY, INC.” trade name. The descriptive words “SAN FRANCISCO
COFFEE” are precisely the dominant features of respondent’s trade name. Petitioner and respondent
are engaged in the same business of selling coffee, whether wholesale or retail. The likelihood of
confusion is higher in cases where the business of one corporation is the same or substantially the same
as that of another corporation. In this case, the consuming public will likely be confused as to the source
of the coffee being sold at petitioner’s coffee shops.

MCDONALD’S CORPORATION V. L.C. BIG MAK BURGER (G.R. NO. 143993)

Facts:

Petitioner McDonald’s, an American corporation operating a global chain of fast-food restaurants, is the
owner of the ‘Big Mac’ mark for its double-decker hamburger sandwich here and in the US. Meanwhile,
respondent L.C., a domestic corporation which operates fast-food outlets and snack vans applied for the
registration of the ‘Big Mak’ mark for its hamburger sandwiches. Petitioner opposed on the ground that
‘Big Mak’ was a colorable imitation of its registered ‘Big Mac’ mark for the same food products.
Respondents denied there is colorable imitation and argued that petitioner cannot exclusively
appropriate the mark ‘Big Mac’ because the word ‘Big’ is a generic and descriptive term. Petitioner filed
a complaint for trademark infringement and unfair competition. The trial court found for petitioners. CA
held otherwise.

Issues:

(1) Whether or not the word ‘Big Mac’ can be exclusively appropriated by petitioner;
(2) Whether or not there is colorable imitation resulting in likelihood of confusion;

(3) Whether or not there is unfair competition.

Ruling:

(1) YES. A mark is valid if it is “distinctive” and thus not barred from registration under Section 4 of RA
166. However, once registered, not only the mark’s validity but also the registrant’s ownership of the
mark is prima facie presumed. The “Big Mac” mark, which should be treated in its entirety and not
dissected word for word, is neither generic nor descriptive. Generic marks are commonly used as the
name or description of a kind of goods, such as “Lite” for beer or “Chocolate Fudge” for chocolate soda
drink. Descriptive marks, on the other hand, convey the characteristics, functions, qualities or
ingredients of a product to one who has never seen it or does not know it exists, such as “Arthriticare”
for arthritis medication. On the contrary, “Big Mac” falls under the class of fanciful or arbitrary marks as
it bears no logical relation to the actual characteristics of the product it represents. As such, it is highly
distinctive and thus valid. Significantly, the trademark “Little Debbie” for snack cakes was found
arbitrary or fanciful.

(2) YES. In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy
test and the holistic test. The dominancy test 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
consider the entirety of the marks as applied to the products, including the labels and packaging, in
determining confusing similarity. This Court, however, has relied on the dominancy test rather than the
holistic test. The test of dominancy is now explicitly incorporated into law in Section 155.1 of the
Intellectual Property Code which defines infringement as the “colorable imitation of a registered mark
xxx or a dominant feature thereof.”

Applying the dominancy test, the Court finds that respondents’ use of the “Big Mak” mark results in
likelihood of confusion. 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 phonetically the same. Visually, the two
marks have both two words and six letters, with the first word of both marks having the same letters
and the second word having the same first two letters. In spelling, considering the Filipino language,
even the last letters of both marks are the same. Clearly, respondents have adopted in “Big Mak” not
only the dominant but also almost all the features of “Big Mac.” Applied to the same food product of
hamburgers, the two marks will likely result in confusion in the public mind. Certainly, “Big Mac” and
“Big Mak” for hamburgers create even greater confusion, not only aurally but also visually. Indeed, a
person cannot distinguish “Big Mac” from “Big Mak” by their sound. When one hears a “Big Mac” or “Big
Mak” hamburger advertisement over the radio, one would not know whether the “Mac” or “Mak” ends
with a “c” or a “k.”

(3) YES. The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods, and (2) intent to deceive the public and defraud a competitor. The
confusing similarity may or may not result from similarity in the marks, but may result from other
external factors in the packaging or presentation of the goods. The intent to deceive and defraud may
be inferred from the similarity of the appearance of the goods as offered for sale to the public. Actual
fraudulent intent need not be shown. Unfair competition is broader than trademark infringement and
includes passing off goods with or without trademark infringement. Trademark infringement is a form of
unfair competition. Trademark infringement constitutes unfair competition when there is not merely
likelihood of confusion, but also actual or probable deception on the public because of the general
appearance of the goods. There can be trademark infringement without unfair competition as when the
infringer discloses on the labels containing the mark that he manufactures the goods, thus preventing
the public from being deceived that the goods originate from the trademark owner.

Respondents’ goods are hamburgers which are also the goods of petitioners. Since respondents chose to
apply the “Big Mak” mark on hamburgers, just like petitioner’s use of the “Big Mac” mark on
hamburgers, respondents have obviously clothed their goods with the general appearance of
petitioners’ goods. 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. We hold that as found by the RTC,
respondent corporation is liable for unfair competition.

McDonald’s Corporation vs Macjoy Fastfood Corporation

Since 1987, MacJoy Devices had been operating in Cebu. MacJoy is a fast food restaurant which sells
fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo and
steaks. In 1991, MacJoy filed its application for trademark before the Intellectual Property Office (IPO).
McDonald’s opposed the application as it alleged that MacJoy closely resembles McDonald’s corporate
logo such that when used on identical or related goods, the trademark applied for would confuse or
deceive purchasers into believing that the goods originate from the same source or origin that the use
and adoption in bad faith of the “MacJoy and Device” mark would falsely tend to suggest a connection
or affiliation with McDonald’s restaurant services and food products, thus, constituting a fraud upon the
general public and further cause the dilution of the distinctiveness of McDonald’s registered and
internationally recognized McDonald’S marks to its prejudice and irreparable damage.

The IPO ruled in favor of McDonald’s. MacJoy appealed before the Court of Appeals and the latter ruled
in favor of MacJoy. The Court of Appeals, in ruling over the case, actually used the holistic test (which is
a test commonly used in infringement cases). The holistic test looks upon the visual comparisons
between the two trademarks. In this case, the Court of Appeals ruled that other than the letters “M”
and “C” in the words MacJoy and McDonald’s, there are no real similarities between the two
trademarks. “MacJoy” is written in round script while “McDonald’s” is written in thin gothic. “MacJoy” is
accompanied by a picture of a (cartoonish) chicken while “McDonald’s” is accompanied by the arches
“M”. The color schemes between the two are also different. “MacJoy” is in deep pink while
“McDonald’s” is in gold color.

ISSUE: Whether or not MacJoy infringed upon the trademark of McDonald’s.

HELD: Yes. The Supreme Court ruled that the proper test to be used is the dominancy test. The
dominancy test not only looks at the visual comparisons between two trademarks but also the aural
impressions created by the marks in the public mind as well as connotative comparisons, giving little
weight to factors like prices, quality, sales outlets and market segments. In the case at bar, the Supreme
Court ruled that “McDonald’s” and “MacJoy” marks are confusingly similar with each other such that an
ordinary purchaser can conclude an association or relation between the marks. To begin with, both
marks use the corporate “M” design logo and the 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. For sure, it is the prefix
“Mc,” an abbreviation of “Mac,” which visually and aurally catches the attention of the consuming
public. Verily, the word “MACJOY” attracts attention the same way as did “McDonalds,” “MacFries,”
“McSpaghetti,” “McDo,” “Big Mac” and the rest of the MCDONALD’S marks which all use the prefixes
Mc and/or Mac. Besides and most importantly, both trademarks are used in the sale of fastfood
products.

Further, the owner of MacJoy provided little explanation why in all the available names for a restaurant
he chose the prefix “Mac” to be the dominant feature of the trademark. The prefix “Mac” and “Macjoy”
has no relation or similarity whatsoever to the name Scarlett Yu Carcel, which is the name of the niece
of MacJoy’s president whom he said was the basis of the trademark MacJoy. By reason of the MacJoy’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 MacJoy would want to ride high on the established reputation and
goodwill of the McDonald’s marks, which, as applied to its restaurant business and food products, is
undoubtedly beyond question.

LYCEUM OF THE PHILIPPINES V. CA (G.R. NO. 101897)

Facts:

Petitioner Lyceum of the Philippines had commenced before the SEC a proceeding against the Lyceum of
Baguio to change its corporate name alleging that the 2 names are substantially identical because of the
word ‘Lyceum’. SEC found for petitioner and the SC denied the consequent appeal of Lyceum of Baguio
in a resolution. Petitioner then basing its ground on the resolution, wrote to all educational institutions
which made use of the word ‘Lyceum’ as part of their corporate name to discontinue their use. When
this recourse failed, petitioner moved before the SEC to enforce its exclusive use of the word ‘Lyceum.’
Petitioner further claimed that the word ‘Lyceum’ has acquired a secondary meaning in its favor. The
SEC Hearing Officer found for petitioner. Both SEC En Banc and CA ruled otherwise.

Issues:

(1) Whether or not ‘Lyceum’ is a generic word which cannot be appropriated by petitioner to the
exclusion of others.

(2) Whether or not the word ‘Lyceum’ has acquired a secondary meaning in favor of petitioner.

(3) Whether or not petitioner is infringed by respondent institutions’ corporate names.

Ruling:

(1) YES. “Lyceum” is in fact as generic in character as the word “university.” In the name of the
petitioner, “Lyceum” appears to be a substitute for “university;” in other places, however, “Lyceum,” or
“Liceo” or “Lycee” frequently denotes a secondary school or a college. It may be that the use of the
word “Lyceum” may not yet be as widespread as the use of “university,” but it is clear that a not
inconsiderable number of educational institutions have adopted “Lyceum” or “Liceo” as part of their
corporate names. Since “Lyceum” or “Liceo” denotes a school or institution of learning, it is not
unnatural to use this word to designate an entity which is organized and operating as an educational
institution.

(2) NO. Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market, because geographical or otherwise descriptive
might nevertheless have been used so long and so exclusively by one producer with reference to this
article that, in that trade and to that group of the purchasing public, the word or phrase has come to
mean that the article was his produce. With the foregoing as a yardstick, [we] believe the appellant
failed to satisfy the aforementioned requisites. While the appellant may have proved that it had been
using the word ‘Lyceum’ for a long period of time, this fact alone did not amount to mean that the said
word had acquired secondary meaning in its favor because the appellant failed to prove that it had been
using the same word all by itself to the exclusion of others. More so, there was no evidence presented
to prove that confusion will surely arise if the same word were to be used by other educational
institutions.

(3) NO. We do not consider that the corporate names of private respondent institutions are “identical
with, or deceptively or confusingly similar” to that of the petitioner institution. True enough, the
corporate names of private respondent entities all carry the word “Lyceum” but confusion and
deception are effectively precluded by the appending of geographic names to the word “Lyceum.” Thus,
we do not believe that the “Lyceum of Aparri” can be mistaken by the general public for the Lyceum of
the Philippines, or that the “Lyceum of Camalaniugan” would be confused with the Lyceum of the
Philippines. We conclude and so hold that petitioner institution is not entitled to a legally enforceable
exclusive right to use the word “Lyceum” in its corporate name and that other institutions may use
“Lyceum” as part of their corporate names.

FREDCO MANUFACTURING CORPORATION V. PRESIDENT AND FELLOWS OF HARVARD COLLEGE (G.R.

NO. 185917)

Facts:

Petitioner Fredco Manufacturing filed a petition to cancel the registration of respondent’s mark ‘Harvard
Veritas Shield Symbol’ used in products such as bags and t-shirts. Fredco alleges that the mark ‘Harvard’
was first used and registered by New York Garments, a domestic corporation and its predecessor-in-
interest, used in its clothing articles. Respondent Harvard University on the other hand, alleges that it is
the lawful owner of the name and mark in numerous countries worldwide including in the Philippines
which was used in commerce as early as 1872. Respondent further contend that it never authorized any
person to use its name or mark in connection with any goods in the Philippines. The IPO Bureau of Legal
Affairs cancelled respondent’s registration of the mark but only over the goods which are confusingly
similar with that of petitioner. IPO reversed the decision. CA affirmed.

Issue:

Whether or not respondent’s trade name is infringed.

Ruling: YES.

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. 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.

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 a trademark, is protected “without the obligation of filing
or registration.” “Harvard” is the trade name of the world famous Harvard University, and it is also a
trademark of Harvard University. Under Article 8 of the Paris Convention, as well as Section 37 of R.A.
No. 166, Harvard University is entitled to protection in the Philippines of its trade name “Harvard” even
without registration of such trade name in the Philippines. This means that no educational entity in the
Philippines can use the trade name “Harvard” without the consent of Harvard University. Likewise, no
entity in the Philippines can claim, expressly or impliedly through the use of the name and mark
“Harvard,” that its products or services are authorized, approved, or licensed by, or sourced from,
Harvard University without the latter’s consent.
Esso Standard v CA Digest

G.R. No. L-29971

Facts of the Case:

The petitioner Esso Standard is a foreign corporation duly licensed to do business in the philippines. it is
engaged in the sale of petroleum products which are identified by the trademarl 'Esso'. Esso is a
successor of Standard Vacuum Oil Co, it registered as a business name with the Bureau of Commerce in
1962. United Cigarette is a domestic corporation engaged in the manufacture and sale of cigarettes. it
acquired the business from La Oriental Tobacco Corp including patent rights, once of which is the use of
'Esso' on its cigarettes.

The petitioner filed a trademark infringement case alleging that it acquired goodwill to such an extent
that the buying public would be deceived as ti the quality and origin of the said products to the
detriment and disadvantage of its own products. The lower court found United Cigarette guilty of
infringement. Upon appeal, the Court of Appeals ruled that there was no infringment in this case.

Issue: Is there infringement committed?

Ruling: NONE. Infringement is defined by law as the use without the consent of the trademark owner of
any reproduction, counterfeit, copy or colorable imitation of any registered mark or tradename which
would likely cause confusion or mistake or deceive purchasers or others as to the source or origin of
such goods.

The products of both parties (Petroleum and cigarettes) are non-competing. But as to whether
trademark infringement exists depend on whether or not the goods are so related that the public may
be or is actually deceived and misled that they come from the same maker. Under the Related Goods
Theory, goods are related when they belong to the same class or have the same descriptive properties
or when they have same physical attributes. In these case, the goods are absolutely different and are so
foreign from each other it would be unlikely for purchasers to think that they came from the same
source. Moreover, the goods flow from different channels of trade and are evidently different in kind
and nature.

AMERICAN WIRE & CABLE COMPANY V. DIRECTOR OF PATENTS (G.R. NO. L-26557)

Facts:

Respondent Central Banahaw Industries applied for the registration of its trademark ‘Dynaflex’ to be
used in electric wires. Petitioner American Wire, authorized user of the mark ‘Duraflex’ placed also on
electric wires, opposed on the ground that the registration of the mark would cause confusion or result
in mistake to purchasers intending to buy their products. The Director of Patents gave due course to the
application holding that the two marks were not similar.

Issue:

Whether or not the two trademarks are confusingly similar.

Ruling: YES.

Earlier rulings of the Court seem to indicate its reliance on the dominancy test or the assessment of the
essential or dominant features in the competing labels to determine whether they are confusingly
similar.

The similarity between the competing trademarks, DURAFLEX and DYNAFLEX, is apparent. Not only are
the initial letters and the last half of the appellations identical, but the difference exists only in two out
of the eight literal elements of the designations. Coupled with the fact that both marks cover insulated
flexible wires under class 20; that both products are contained in boxes of the same material, color,
shape and size; that the dominant elements of the front designs are a red circle and a diagonal zigzag
commonly related to a spark or flash of electricity; that the back of both boxes show similar circles of
broken lines with arrows at the center pointing outward, with the identical legend “Cut Out Ring” “Draw
From Inside Circle”, no difficulty is experienced in reaching the conclusion that there is a deceptive
similarity that would lead the purchaser to confuse one product with the other.

*Relying on the doctrine enunciated in the Etepha case and the earlier ruling in Lim Hoa vs. Director of
Patents, applicant-appellee contends that the DYNAFLEX mark would not confuse or deceive the buyers
and subscribers of the DURAFLEX brand, because electrical wires are of great value and the purchasers
thereof are generally intelligent — the architects, engineers and building contractors. It must be
realized, however, that except perhaps in big constructions, the designing architect or engineer, or the
contractor who will undertake the work of building, does not himself purchase or place the order for the
purchase of the materials to be used therein. The task is oftentimes delegated to another. Nor are said
technical men the ones personally laying down the wiring system in the building that they could possibly
check on whether or not the correct wires are being used. So that even if the engineer or contractor will
specify in the bill of materials the particular brand of wires needed, there is no certainty that the desired
product will be acquired. For, unlike the pharmacists or druggists, the dispensers of hardware or
electrical supplies are not generally known to pay as much concern to the brand of articles asked for by
the customer and of a person who knows the name of the brand but is not acquainted with it is
appearance, the likelihood of the DYNAFLEX product being mistaken for DURAFLEX is not remote. (JBL
Reyes’ wisdom)

Asia Brewery, Inc. vs Court of Appeals

In September 1988, San Miguel Corporation (SMC) sued Asia Brewery Inc. for allegedly infringing upon
their trademark on their beer product popularly known as “San Miguel Pale Pilsen”; that Asia Brewery’s
“Beer na Beer” product, by infringing upon SMC’s trademark has committed unfair competition as “Beer
na Beer” creates confusion between the two products. The RTC ruled in favor of Asia Brewery but the
Court of Appeals reversed the RTC.

ISSUE: Whether or not Asia Brewery infringed upon the trademark of SMC.

HELD: No. Both products are manufactured using amber colored steinie bottles of 320 ml. Both were
labeled in a rectangular fashion using white color paint. But other than these similarities, there are
salient differences between the two. As found by the Supreme Court, among others they are the
following:

1. The dominant feature of SMC’s trademark are the words “San Miguel Pale Pilsen” while that of Asia
Brewery’s trademark is the word “Beer”. Nowhere in SMC’s product can be seen the word “Beer” nor in
Asia Brewery’s product can be seen the words “San Miguel Pale Pilsen”. Surely, someone buying “Beer
na Beer” cannot mistake it as “San Miguel Pale Pilsen” beer.

2. The bottle designs are different. SMC’s bottles have slender tapered neck while that of “Beer na Beer”
are fat. Though both beer products use steinie bottles, SMC cannot claim that Asia Brewery copied the
idea from SMC. SMC did not invent but merely borrowed the steinie bottle from abroad and SMC does
not have any patent or trademark to protect the steinie bottle shape and design.

3. In SMC bottles, the words “pale pilsen” are written diagonally while in “Beer na Beer”, the words
“pale pilsen” are written horizontally. Further, the words “pale pilsen” cannot be said to be copied from
SMC for “pale pilsen” are generic words which originated from Pilsen, Czechoslovakia. “Pilsen” is a
geographically descriptive word and is non-registrable.

4. SMC bottles have no slogans written on them while Asia Brewery’s bottles have a copyrighted slogan
written on them that is “Beer na Beer”.

5. In SMC bottles, it is expressly labeled as manufactured by SMC. In Asia Brewery beer products, it is
likewise expressly labeled as manufactured by Asia Brewery. Surely, there is no intention on the part of
Asia Brewery to confuse the public and make it appear that “Beer na Beer” is a product of SMC, a long-
established and more popular brand.

Justice Cruz Dissenting:

A number of courts have held that to determine whether a trademark has been infringed, we must
consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the
marks as a totality, not usually to any part of it. The court therefore should be guided by its first
impression, for a buyer acts quickly and is governed by a casual glance, the value of which may be
dissipated as soon as the court assumes to analyze carefully the respective features of the mark. (Del
Monte vs CA & Sunshine Sauce)

PROSOURCE INTERNATIONAL, INC. v. HORPHAG RESEARCH MANAGEMENT SA. G.R. No. 180073.
November 25, 2009

FACTS:

Respondent is a corporation and owner of trademark PYCNOGENOL, a food. Respondent later

discovered that petitioner was also distributing a similar food supplement using the mark PCO-GENOLS
since 1996. This prompted respondent to demand that petitioner cease and desist from using the
aforesaid mark.
Respondent filed a Complaint for Infringement of Trademark with Prayer for Preliminary Injunction
against petitioner, in using the name PCO-GENOLS for being confusingly similar. Petitioner appealed
otherwise.

The RTC decided in favor of respondent. It observed that PYCNOGENOL and PCO-GENOLS have the same
suffix "GENOL" which appears to be merely descriptive and thus open for trademark registration by
combining it with other words and concluded that the marks, when read, sound similar, and thus
confusingly similar especially since they both refer to food supplements.

On appeal to the CA, petitioner failed to obtain a favorable decision. The appellate court explained that
under the Dominancy or the Holistic Test, PCO-GENOLS is deceptively similar to PYCNOGENOL.

ISSUE: Whether the names are confusingly similar.

RULING:

Yes. There is confusing similarity and the petition is denied. Jurisprudence developed two test to prove
such.

The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks
that might cause confusion and deception, thus constituting infringement. If the competing trademark
contains the main, essential and dominant features of another, and confusion or deception is likely to
result, infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate. The question is whether the use of the marks
involved is likely to cause confusion or mistake in the mind of the public or to deceive purchasers. Courts
will consider more the aural and visual impressions created by the marks in the public mind, giving little
weight to factors like prices, quality, sales outlets, and market segments.

The Holistic Test entails a consideration of the entirety of the marks as applied to the products, including
the labels and packaging, in determining confusing similarity. Not only on the predominant words
should be the focus but also on the other features appearing on both labels in order that the observer
may draw his conclusion whether one is confusingly similar to the other.
SC applied the Dominancy Test.Both the words have the same suffix "GENOL" which on evidence,
appears to be merely descriptive and furnish no indication of the origin of the article and hence, open
for trademark registration by the plaintiff through combination with another word or phrase. When the
two words are pronounced, the sound effects are confusingly similar not to mention that they are both
described by their manufacturers as a food supplement and thus, identified as such by their public
consumers. And although there were dissimilarities in the trademark due to the type of letters used as
well as the size, color and design employed on their individual packages/bottles, still the close
relationship of the competing products’ name in sounds as they were pronounced, clearly indicates that
purchasers could be misled into believing that they are the same and/or originates from a common
source and manufacturer.

246 CORPORATION (ROLEX MUSIC LOUNGE) VS. DAWAY

G.R. No. 157216 November 20, 2003

246 CORPORATION, doing business under the name and style of ROLEX MUSIC LOUNGE

vs.

HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge of Branch 90 of the Regional Trial Court of
Quezon City, MONTRES ROLEX S.A. and ROLEX CENTRE PHIL. LIMITED

FACTS:

Respondents sued Petitioner for violation of the Trademark Law, contending that the use of the mark
“Rolex” in “Rolex Music Lounge” by 246 Corporation was an infringement on the rights of respondents
to the mark. Petitioner’s defense state that there could be no infringement since respondent and
petitioner dealt with goods and services entirely different from one another, thus, confusion to
consumers and injury to respondent would unlikely occur.

RULING:
The Court noted the veracity of the claim of petitioner that there is no infringement in the use of a
‘junior user of the registered mark on the entirely different goods as stated in Sec 123.1 (f) of RA 8293.
The court however stressed the limitation of the provision such as when the mark used is one that is
internationally well-known or is attributable to a well-known licensee or registrant of the said mark. So
much so that the use of it by another would affect the reputation of the registrant or its products and/or
services due to association by mark usage to junior user. The Court however held that before Sec 123.1
and its limitation are applied in the present case, the criteria to determine whether mark is well-known
must first be proven to have been met. The Court said that for such to be established, a full-blown
hearing on the merits must first be had.

EY Industrial Vs. Shen Dar

Facts:

EY Industrial Sales is a domestic corporation engaged in the production, distribution and sale of air
compressors.

Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture of compressors.

From 1997-2004, EY Industrial imported air compressors from Shen Dar.

In 1997, Shen Dar filed a Trademark Application with the Intellectual Property Office (IPO) for the mark
“Vespa” for the use of air compressors. It was approved in 2007.

In 1999, EY Industrial filed a Trademark Application also for the mark “VESPA” for the use of air
compressors. It was approved in 2004.

Shen Dar filed a Petition for Cancellation of the Industrial’s EYES COR with the Bureau of Legal Affairs
contending that: a. there was a violation of Section 123.1 (D) of the Intellectual Property Code which
provides that: A mark cannot be registered if it is identical to a mark with an earlier filing or priority
date. b. EY Industrial is only a distributor of the air compressors

On the other hand, EY Industrial alleged that it is the sole assembler and fabricator of VESPA air
compressors since the early 1990s and that Shen Dar supplied them air compressors with the mark “SD”
and not “VESPA”
Issues:

1. Who between EY Industrial and Shen Dar is entitled to the trademark “VESPA”. EY INDUSTRIAL SALES

2. WON the Bureau of Legal Affairs has the power to cancel the application of Shen Dar even if it is Shen
Dar who filed the case? YES

Held:

1st: EY INDUSTRIAL has the right to the trademark.

Based on the evidence, EYIS owns the “VESPA” trademark; it has prior use, as shown by various sales
invoices.

Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption and
use in trade or commerce. As between actual use of a mark without registration, and registration of the
mark without actual use thereof, the former prevails over the latter.

For a rule widely accepted and firmly entrenched, because it has come down through the years, is that
actual use in commerce or business is a pre-requisite to the acquisition of the right of ownership. It is
non sequitur to hold that porque EYIS is a distributor, it is no longer the owner.

FIRST-TO-FILE RULE

Under Section 123.1 of IPO provision, the registration of a mark is prevented with the filing of an earlier
application for registration.

This must not, however, be interpreted to mean that ownership should be based upon an earlier filing
date. While RA 8293 (IPC) removed the previous requirement of proof of actual use prior to the filing of
an application for registration of a mark, proof of prior and continuous use is necessary to establish
ownership of a mark. Such ownership constitutes sufficient evidence to oppose the registration of a
mark.

When we talk about trademark, we are just talking about the mark. It does not include the product.
Shen Dar is the manufacturer of the product, but they did not name the product as VESPA. It was EY that
named the VESPA, and used the VESPA, even though they were only the distributors. 
It was EY that
actually used the trademark through the use of receipts, and other documents.

The first to file rule – According to the SC that Shen Dar filed under the old IPC where prior use is the
one applied. 


2nd: BLA has the power to cancel the application.

Shen Dar challenges the propriety of such cancellation on the ground that there was no petition for
cancellation as required under Sec. 151 of RA 8293.

The IPO Director General stated that, despite the fact that the instant case was for the cancellation of
the COR issued in favor of EYIS, the interests of justice dictate, and in view of its findings, that the COR of
Shen Dar must be cancelled.

The above rule reflects the oft-repeated legal principle that quasi-judicial and administrative bodies are
not bound by technical rules of procedure. Such principle, however, is tempered by fundamental
evidentiary rules, including due process.

The fact that no petition for cancellation was filed against the COR issued to Shen Dar does not preclude
the cancellation of Shen Dar’s COR. It must be emphasized that, during the hearing for the cancellation
of EYIS’ COR before the BLA, Shen Dar tried to establish that it, not EYIS, was the true owner of the mark
“VESPA” and, thus, entitled to have it registered. Shen Dar had more than sufficient opportunity to
present its evidence and argue its case, and it did. It was given its day in court and its right to due
process was respected. The IPO Director General’s disregard of the procedure for the cancellation of a
registered mark was a valid exercise of his discretion.
Remember, EY’s application was the one granted, and it is Shen Dar’s application that was cancelled. 
It
does not mean that even you were the one who filed, it your application cannot be cancelled. The BLA,
who has jurisdiction over the case, were able to determine that it is Shen Dar’s trademark that should
not have been issued with registration, even it is the plaintiff.

DERMALINE v. MYRA PHARMACEUTICALS, GR No. 190065, 2010-08-16

Facts:

etitioner Dermaline, Inc. (Dermaline) filed before the Intellectual Property Office (IPO) an application for
registration of the trademark "DERMALINE DERMALINE, INC."... respondent Myra Pharmaceuticals, Inc.
(Myra) filed a Verified Opposition[4] alleging that the trademark sought to be registered by Dermaline
so resembles its trademark "DERMALIN" and will likely cause confusion, mistake and deception to the...
purchasing public.

It further alleged that Dermaline's use and registration of... its applied trademark will diminish the
distinctiveness and dilute the goodwill of Myra's "DERMALIN,"... espite Dermaline's attempt to
differentiate its applied mark, the dominant feature is the term "DERMALINE," which is practically
identical with its own "DERMALIN," more particularly that the first eight (8) letters of the marks are
identical,... Myra also pointed out that Dermaline applied for the same mark "DERMALINE" on June 3,
2003 and was already refused registration by the IPO. By filing this new application for registration,
Dermaline appears to have engaged in a fishing expedition for the approval of its... mark.

In its Verified Answer,[9] Dermaline countered that a simple comparison of the trademark "DERMALINE
DERMALINE, INC." vis-à-vis Myra's "DERMALIN" trademark would show that they have entirely different
features and distinctive presentation, thus it cannot... result in confusion, mistake or deception on the
part of the purchasing public.

the IPO-Bureau of Legal Affairs rendered Decision... sustaining Myra's opposition pursuant to Section
123.1(d) of R.A. No. 8293.
Dermaline appealed to the Office of the Director General of the IPO. However, in an Order[14] dated
April 17, 2009, the appeal was dismissed for being filed out of time.

Undaunted, Dermaline appealed to the CA, but it affirmed and upheld the Order dated April 17, 2009
and the rejection of Dermaline's application for registration of trademark.

Issues:

whether the CA erred in upholding the IPO's rejection of Dermaline's application for registration of
trademark.

Ruling:

The petition is without merit.

In rejecting the application of Dermaline for the registration of its mark "DERMALINE DERMALINE, INC.,"
the IPO applied the Dominancy Test. It declared that both confusion of goods and service and confusion
of business or of origin were apparent in both trademarks.

The IPO also upheld Myra's right under Section 138 of R.A. No. 8293, which... provides that a
certification of registration of a mark is prima facie evidence of the validity of the registration, the
registrant's ownership of the mark, and of the registrant's exclusive right to use the same in connection
with the goods and those that are related... thereto specified in the certificate.

hile it is true that the two marks are presented differently... the likelihood of confusion is still apparent.
This is because they are almost spelled in the same way, except for Dermaline's mark which ends with
the letter "E," and... they are pronounced practically in the same manner in three (3) syllables, with the
ending letter "E" in Dermaline's mark pronounced silently. Thus, when an ordinary purchaser, for
example, hears an advertisement of Dermaline's applied trademark over the radio, chances are he... will
associate it with Myra's registered mark.
Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra, such
that, considering the current proliferation of health and beauty products in the market, the purchasers
would likely be misled that Myra has already expanded its business through

Dermaline from merely carrying pharmaceutical topical applications for the skin to health and beauty
services.

WHEREFORE, the petition is DENIED. The Decision dated August 7, 2009 and the Resolution dated
October 28, 2009 of the Court of Appeals in CA-G.R. SP No. 108627 are AFFIRMED. Costs against
petitioner.

Principles:

A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof,
adopted and used by a manufacturer or merchant on his goods to identify and distinguish them from
those manufactured, sold, or dealt by others.[15]

Inarguably, it is an intellectual property deserving protection by law. In trademark controversies, each

case must be scrutinized according to its peculiar circumstances, such that jurisprudential precedents
should only be made to apply if they are specifically in... point.[16]

The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks
that might cause confusion or deception.[17] It is applied when the trademark sought to be registered
contains the main, essential and dominant features... of the earlier registered trademark, and confusion
or deception is likely to result. Duplication or imitation is not even required; neither is it necessary that
the label of the applied mark for registration should suggest an effort to imitate. The important issue
is... whether the use of the marks involved would likely cause confusion or mistake in the mind of or
deceive the ordinary purchaser, or one who is accustomed to buy, and therefore to some extent familiar
with, the goods in question.[18] Given greater... consideration are the aural and visual impressions
created by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets,
and market segments.[19] The test of dominancy is now explicitly incorporated into law in

Section 155.1 of R.A. No. 8293 which provides--

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark
or the same container or a dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or... services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; (emphasis supplied)

On the other hand, the Holistic Test entails a consideration of the entirety of the marks as applied to the
products, including labels and packaging, in determining confusing similarity. The scrutinizing eye of the
observer must focus not only on the predominant words but... also on the other features appearing in
both labels so that a conclusion may be drawn as to whether one is confusingly similar to the other.[20]

Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types
of confusion, viz: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser
would be induced to purchase one product in the belief that he was... purchasing the other; and (2)
confusion of business (source or origin confusion), where, although the goods of the parties are
different, the product, the mark of which registration is applied for by one party, is such as might
reasonably be assumed to originate with the... registrant of an earlier product, and the public would
then be deceived either into that belief or into the belief that there is some connection between the
two parties, though inexistent.[21]

Taiwan Kolin Corporation, Ltd., Petitioner v. Kolin Electronics Co. Inc.,

Facts: On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), docketed as
Application No. 4-1996-106310, for the use of “KOLIN” on a combination of goods, including colored
televisions, refrigerators, window-type and split-type air conditioners, electric fans and water
dispensers. Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan
Kolin’s failure to respond to IPO’s Paper No. 5 requiring it to elect one class of good for its coverage.
However, the same application was subsequently revived through Application Serial No. 4-2002-011002,
with petitioner electing Class 9 as the subject of its application, particularly: television sets, cassette
recorder, VCD Amplifiers, camcorders and other audio/video electronic equipment, flat iron, vacuum
cleaners, cordless handsets, videophones, facsimile machines, teleprinters, cellular phones and
automatic goods vending machine.

On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioner’s revived
application arguing that the mark Taiwan Kolin seeks to register is identical, if not confusingly similar,
with its “KOLIN” mark registered on November 23, 2003, covering the following products under Class 9
of the NCL: automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power
supply, step-down transformer, and PA amplified AC-DC.5cralawred

Issue:

Whether or not petitioner is entitled to its trademark registration of “KOLIN” over its specific goods of
television sets and DVD players.

Ruling: The Supreme Court held that he petitioner’s trademark registration not only covers unrelated
good, but is also incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser must be
thought of as having, and credited with, at least a modicum of intelligence to be able to see the
differences between the two trademarks in question.

On the arguments that both their goods belong to Class 9 of the NCL, the Supreme Court ruled that
identical marks may be registered for products from the same classification. The mere uniformity in
categorization, by itself, does not automatically preclude the registration of what appears to be an
identical mark, if that be the case.

Moreover, the Supreme Court stated that the products covered by petitioner’s application and
respondent’s registration are unrelated. It agreed with the petitioner on the following:

Taiwan Kolin’s goods are classified as home appliances as opposed to Kolin Electronics’ goods which are
power supply and audio equipment accessories;ChanRoblesVirtualawlibrary

Taiwan Kolin’s television sets and DVD players perform distinct function and purpose from Kolin
Electronics’ power supply and audio equipment; and

Taiwan Kolin sells and distributes its various home appliance products on wholesale and to accredited
dealers, whereas Kolin Electronics’ goods are sold and flow through electrical and hardware stores.
Seri Soomboonsakdikul vs. Orlane

FABERGE INC., VS. IAC & CO BENG KAY

FACTS:

Petitioner Faberge manufactures and sells after-shave lotion, shaving cream, deodorant, toilet soap, etc.
under its registered trademark ‘BRUT’. On the other hand, respondent Co Beng Kay manufactures and
sells briefs under the trademark ‘BRUTE.’

Petitioner tried to oppose the registration by respondent of the trademark ‘BRUTE’ for being confusingly
similar with petitioner’s ‘BRUT’ but Director of Patents denied such opposition observing that
considering the overall appearance of both trademarks, there are glaring differences which would
unlikely cause a confusion among customers.

On appeal, the CA initially ruled in favor of petitioner stating that the products of the petitioner and the
respondent have the same outlet (e,g, ‘Men’s accessories’ in a department store). Thus, even if the
trademark ‘BRUTE’ was only applied for briefs, the similarity of the same with ‘BRUT’ would likely cause
confusion to the buying public.

On respondent’s motion for reconsideration, the CA reversed itself in favor of respondent relying on the
ESSO and PRC cases wherein the SC ruled that identical trademark can be used by different
manufacturers for products that are non-competing and unrelated. Hence, this appeal.

Petitioner argues that the ruling in Teodoro which was reiterated in Sta. Ana where the SC ruled that a
registration may be opposed if the junior user’s goods (Co Beng Kay’s in this case) are not remote from
any product that the senior user (Faberge) would be likely to make or sell. To bolster this argument,
petitioner presented an alleged application of the trademark ‘BRUT 33 Device’ for briefs.

ISSUE: WON the respondent is permitted to use the trademark ‘BRUTE’ for briefs.
RULING: YES. The provisions applicable to this case are the following:

Sec. 4. Registration of trade-marks, trade-names and service-marks on the principal register. —

. . . The owner of trademark, trade-name or service-mark used to distinguish his goods, business or
services from the goods, business or services of others shall have right to register the same on the
principal register, unless it:

xxx xxx xxx

4(d) Consists of or comprises a mark or trade-name which so resembles a mark or trade-name registered
in the Philippines or a mark or trade-name previously used in the Philippines by another and not
abandoned, as to be likely, when applied to or used in connection with the goods, business or services of
the applicant, to cause confusion or mistake or to deceive purchasers.

xxx xxx xxx

Sec. 20. Certificate of registration prima facie evidence of validity. — A certificate of registration of a
mark or trade-name shall be prima facie evidence of the validity of the registration, the registrant's
ownership of the mark or trade-name, and of the registrant's exclusive right to use the same in
connection with the goods, business or services specified in the certificate, subject to any conditions and
limitations stated therein.

It is not difficult to discern from the foregoing statutory enactments that private respondent may be
permitted to register the trademark "BRUTE" for briefs produced by it notwithstanding petitioner's
vehement protestations of unfair dealings in marketing its own set of items which are limited to: after-
shave lotion, shaving cream, deodorant, talcum powder and toilet soap. In as much as petitioner has not
ventured in the production of briefs, an item which is not listed in its certificate of registration,
petitioner cannot and should not be allowed to feign that private respondent had invaded petitioner's
exclusive domain. To be sure, it is significant that petitioner failed to annex in its Brief the so-called
"eloquent proof that petitioner indeed intended to expand its mark "BRUT" to other goods. Even then, a
mere application by petitioner in this aspect does not suffice and may not vest an exclusive right in its
favor that can ordinarily be protected by the Trademark Law. In short, paraphrasing Section 20 of the
Trademark Law as applied to the documentary evidence adduced by petitioner, the certificate of
registration issued by the Director of Patents can confer upon petitioner the exclusive right to use its
own symbol only to those goods specified in the certificate, subject to any conditions and limitations
stated therein.
Emerald Garment Manufacturing Corporation vs Court of Appeals

In 1981, H.D Lee Co., Inc., a foreign company, filed an opposition against the trademark application of
Emerald Garment. Allegedly, the trademark “Stylistic Mr. Lee” sought to be applied for by Emerald
Garment is too confusingly similar with the brand “Lee” which has for its variations “Lee Riders”, “Lee
Sures”, and “Lee Leens”. The Director of Patents as well as the Court of Appeals ruled in favor of H.D.
Lee Co.

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

HELD: No. The Supreme Court considered that the trademarks involved as a whole and ruled that
Emerald Garment’s “STYLISTIC MR. LEE” is not confusingly similar to H.D. Lee’s “LEE” trademark. The
trademark “Stylistic Mr. Lee”, although on its label the word “LEE” is prominent, the trademark should
be considered as a whole and not piecemeal. The dissimilarities between the two marks become
conspicuous, noticeable and substantial enough to matter especially in the light of the following
variables that must be factored in.

First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not your
ordinary household items like catsup, soysauce or soap which are of minimal cost. Maong pants or jeans
are not inexpensive. Accordingly, the casual buyer is predisposed to be more cautious and discriminating
in and would prefer to mull over his purchase. Confusion and deception, then, is less likely.

Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does not ask
the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even an Armani. He is,
therefore, more or less knowledgeable and familiar with his preference and will not easily be distracted.

Finally, in line with the foregoing discussions, more credit should be given to the “ordinary purchaser.”
Cast in this particular controversy, the ordinary purchaser is not the “completely unwary consumer” but
is the “ordinarily intelligent buyer” considering the type of product involved.

There is no cause for the Court of Appeal’s apprehension that Emerald Garment’s products might be
mistaken as “another variation or line of garments under H.D. Lee’s ‘LEE’ trademark”. As one would
readily observe, H.D. Lee’s variation follows a standard format “LEERIDERS,” “LEESURES” and
“LEELEENS.” It is, therefore, improbable that the public would immediately and naturally conclude that
petitioner’s “STYLISTIC MR. LEE” is but another variation under H.D. Lee’s “LEE” mark.

The issue of confusing similarity between trademarks is resolved by considering the distinct
characteristics of each case. In the present controversy, taking into account these unique factors, we
conclude that the similarities in the trademarks in question are not sufficient as to likely cause deception
and confusion tantamount to infringement.

Further, H.D. Lee failed to prove in court that it had prior actual commercial use of its “LEE” trademark
in the Philippines. H.D. Lee did show certificates of registrations for its brand but registration is not
sufficient. Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of
ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No. 166).

A rule widely accepted and firmly entrenched because it has come down through the years is that actual
use in commerce or business is a prerequisite in the acquisition of the right of ownership over a
trademark.

It would seem quite clear that adoption alone of a trademark would not give exclusive right thereto.
Such right “grows out of their actual use.” Adoption is not use. One may make advertisements, issue
circulars, give out price lists on certain goods; but these alone would not give exclusive right of use. For
trademark is a creation of use. The underlying reason for all these is that purchasers have come to
understand the mark as indicating the origin of the wares. Flowing from this is the trader’s right to
protection in the trade he has built up and the goodwill he has accumulated from use of the trademark.
Registration of a trademark, of course, has value: it is an administrative act declaratory of a pre-existing
right. Registration does not, however, perfect a trademark right.

SKECHERS v. INTER PACIFIC INDUSTRIAL TRADING CORP., GR No. 164321, 2011-03-23

Facts:
The present controversy arose when petitioner filed with Branch 24 of the Regional Trial Court (RTC) of
Manila an application for the issuance of search warrants against an outlet and warehouse operated by
respondents for infringement of trademark under Section 155, in relation... to Section 170 of Republic
Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines.[2] In the course of
its business, petitioner has registered the trademark "SKECHERS"[3] and the trademark "S" (within... an
oval design)[4] with the Intellectual Property Office (IPO).

As a result of the raid, more than 6,000 pairs of shoes bearing the "S" logo were seized.

Later, respondents moved to quash the search warrants, arguing that there was no confusing similarity
between petitioner's "Skechers" rubber shoes and its "Strong" rubber shoes.

he RTC issued an Order[6] quashing the search warrants and directing the NBI to return the seized
goods. The RTC agreed with respondent's view that Skechers rubber shoes and Strong rubber shoes
have glaring differences such that an... ordinary prudent purchaser would not likely be misled or
confused in purchasing the wrong article.

with the Court of Appeals (CA) assailing the RTC Order. On November 17, 2003, the CA issued a
Decision[8] affirming the ruling of the RTC.

Issues:

whether or not respondent is guilty of trademark infringement.

Ruling:

The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No. 8293.
Specifically, Section 155 of R.A. No. 8293 states:
Remedies; Infringement. -- Any person who shall, without the consent of the owner of the registered
mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark
or the same container or a dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services... including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used... in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for... infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1 or
this subsection are committed regardless of whether there is actual sale of goods or services using the...
infringing material.[15]

The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to cause
confusion.

Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S" by
respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the
IPO. While it is undisputed that petitioner's stylized "S" is within an oval... design, to this Court's mind,
the dominant feature of the trademark is the stylized "S," as it is precisely the stylized "S" which catches
the eye of the purchaser. Thus, even if respondent did not use an oval design, the mere fact that it used
the same stylized "S", the... same being the dominant feature of petitioner's trademark, already
constitutes infringement under the Dominancy Test.

Furthermore, respondent did not simply use the letter "S," but it appears to this Court that based on the
font and the size of the lettering, the stylized "S" utilized by respondent is the very same stylized "S"
used by petitioner; a stylized "S" which is unique and... distinguishes petitioner's trademark. Indubitably,
the likelihood of confusion is present as purchasers will associate the respondent's use of the stylized
"S" as having been authorized by petitioner or that respondent's product is connected with petitioner's
business.

While there may be dissimilarities between the appearances of the shoes, to this Court's mind such
dissimilarities do not outweigh the stark and blatant similarities in their general features.

WHEREFORE, premises considered, the Motion for Reconsideration is GRANTED. The Decision dated
November 30, 2006 is RECONSIDERED and SET ASIDE.

SO ORDERED.

SOCIETE DES PRODUITS NESTLE V. DY, JR. (G.R. NO. 172276)

Facts:

Petitioner Nestle, a Swiss corporation, owns the ‘NAN’ trademark for its line of infant powdered milk
products in the Philippines. Respondent Dy, Jr. on the other hand, owner of 5M Enterprises, imports and
repacks powdered milk for adults bearing the mark ‘NANNY.’ Petitioner Nestle filed before the trial
court an infringement complaint against respondent. The trial court held that respondent’s trademark is
an infringement to petitioner’s mark because it would imply that respondent’s ‘NANNY’ product came
from petitioner. CA reversed and held that the two marks are not confusingly similar thus respondent
cannot be held liable for infringement.

Issue:

Whether or not respondent is liable for trademark infringement.

Ruling: YES.
In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-A, and 20 thereof, the
following constitute the elements of trademark infringement: (a) A trademark actually used in
commerce in the Philippines and registered in the principal register of the Philippine Patent Office; (b) It
is used by another person in connection with the sale, offering for sale, or advertising of any goods,
business or services or in connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or services, or identity of such
business; or such trademark is reproduced, counterfeited, copied or colorably imitated by another
person and such reproduction, counterfeit, copy or colorable imitation is applied to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such
goods, business or services as to likely cause confusion or mistake or to deceive purchasers; (c) The
trademark is used for identical or similar goods; and (d) Such act is done without the consent of the
trademark registrant or assignee.

On the other hand, the elements of infringement under R.A. No. 8293 are as follows: (a) The trademark
being infringed is registered in the Intellectual Property Office; however, in infringement of trade name,
the same need not be registered; (b) The trademark or trade name is reproduced, counterfeited, copied,
or colorably imitated by the infringer; (c) The infringing mark or trade name is used in connection with
the sale, offering for sale, or advertising of any goods, business or services; or the infringing mark or
trade name is applied to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods, business or services; (d) The use or
application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive
purchasers or others as to the goods or services themselves or as to the source or origin of such goods
or services or the identity of such business; and (e) It is without the consent of the trademark or trade
name owner or the assignee thereof.

Among the elements, the element of likelihood of confusion is the gravamen of trademark infringement.
Applying the dominancy test in the present case, the Court finds that “NANNY” is confusingly similar to
“NAN.” “NAN” is the prevalent feature of Nestle’s line of infant powdered milk products. It is written in
bold letters and used in all products. The line consists of PRE-NAN, NAN-H.A., NAN-1, and NAN-2.
Clearly, “NANNY” contains the prevalent feature “NAN.” The first three letters of “NANNY” are exactly
the same as the letters of “NAN.” When “NAN” and “NANNY” are pronounced, the aural effect is
confusingly similar.

Intellectual Property Law

Submitted by: Kristine P. Pastores

2008-0315
Shangri-La International Hotel Management Ltd., v The Court of Appeals

GR No. 111580 June 21, 2001

Facts: On June 21, 1988, the Shangri-La International Hotel Management, Ltd., Shangri-La Properties,
Inc., Makati Shangri-La Hotel and Resort, Inc. and Kuok Philippine Properties, Inc., filed with the Bureau
of Patents, Trademarks and Technology Transfer (BPTTT) a petition praying for the cancellation of the
registration of the Shangri-La mark and “S” device/logo issued to the Developers Group of Companies
Inc., on the ground that the same was illegally and fraudulently obtained and appropriated for the
latter’s restaurant business. The Shangri-La Group alleged that it is the legal and beneficial owners of the
subject mark and logo; that it has been using the said mark and logo for its corporate affairs and
business since March 1962 and caused the same to be specially designed for their international hotels in
1975, much earlier than the alleged first use by the Developers Group in 1982.

Likewise, the Shangri-La Group filed with the BPTTT its own application for registration of the subject
mark and logo. The Developers Group filed an opposition to the application.

Almost three (3) years later, the Developers Group instituted with the RTC a complaint for infringement
and damages with prayer for injunction. When the Shangri-La Group moved for the suspension of the
proceedings, the trial court denied such in a Resolution.

The Shangri-La Group filed a petition for certiorari before the CA but the CA dismissed the petition for
certiorari. Hence, the instant petition.

Issue: Whether or not the infringement case should be dismissed or at least suspended

Held: There can be no denying that the infringement case is validly pass upon the right of registration.
Section 161 of Republic Act No. 8293 provides to wit:

SEC. 161. Authority to Determine Right to Registration – In any action involving a registered mark the
court may determine the right to registration, order the cancellation of the registration, in whole or in
part, and otherwise rectify the register with respect to the registration of any party to the action in the
exercise of this. Judgement and orders shall be certified by the court to the Director, who shall make
appropriate entry upon the records of the Bureau, and shall be controlled thereby. (Sec. 25, R.A. No.
166a). (Emphasis provided)

To provide a judicious resolution of the issues at hand, the Court find it apropos to order the suspension
of the proceedings before the Bureau pending final determination of the infringement case, where the
issue of the validity of the registration of the subject trademark and logo in the name of Developers
Group was passed upon.

CONVERSE RUBBER CORPORATION V. UNIVERSAL RUBBER PRODUCTS (G.R. NO. L-27906)

Facts:

Respondent Universal Rubber applied for the registration of the trademark ‘Universal Converse and
Device’ used on its rubber shoes and rubber slippers. Petitioner Converse opposed on the ground that
the trademark sought to be registered is confusingly similar to the word ‘Converse’ which is part of its
corporate name ‘Converse Rubber Corporation’ and will likely deceive purchasers and cause irreparable
injury to its reputation and goodwill in the Philippines. Respondent argued that the trademarks
petitioner uses on its rubber shoes are ‘Chuck Taylor’ and ‘All Star Device.’ The Director of Patents gave
due course to respondent’s application. MR was denied.

Issue:

Whether or not there is confusing similarity between the two trademarks.

*Click here for the Corpo Law issue

Ruling: YES.

The trademark of respondent “UNIVERSAL CONVERSE and DEVICE” is imprinted in a circular manner on
the side of its rubber shoes. In the same manner, the trademark of petitioner which reads “CONVERSE
CHUCK TAYLOR” is imprinted on a circular base attached to the side of its rubber shoes. The
determinative factor in ascertaining whether or not marks are confusingly similar to each other “is not
whether the challenged mark would actually cause confusion or deception of the purchasers but
whether the use of such mark would likely cause confusion or mistake on the part of the buying public.
It would be sufficient, for purposes of the law that the similarity between the two labels is such that
there is a possibility or likelihood of the purchaser of the older brand mistaking the new brand for it.”
Even if not all the details just mentioned were identical, with the general appearance alone of the two
products, any ordinary, or even perhaps even [sic] a not too perceptive and discriminating customer
could be deceived … “

But even assuming, arguendo, that the trademark sought to be registered by respondent is distinctively
dissimilar from those of the petitioner, the likelihood of confusion would still subsists, not on the
purchaser’s perception of the goods but on the origins thereof. By appropriating the word “CONVERSE,”
respondent’s products are likely to be mistaken as having been produced by petitioner. “The risk of
damage is not limited to a possible confusion of goods but also includes confusion of reputation if the
public could reasonably assume that the goods of the parties originated from the same source.

Pro Line Sports Center, Inc. vs. CA

281 SCRA 162 (1997)

FACTS:

By virtue of its merger with A.G. Spalding Bros., Inc., QUESTOR, a

US-based corporation, became the owner of the tra

demark ―spalding.

Its exclusive distributor in the Philippines is Pro Line Sports Center, Inc. (Pro Line). Pro Line filed a
complaint with the NBI regarding the alleged manufacturer of fake ―spalding balls by UNIVERSAL.
When the NBI conducted a search on the premises of UNIVERSAL, some 1,200 basketballs and
volleyballs marked ―spalding were found in the premises of UNIVERSAL. Three days after, on motion of
the NBI, the court ordered to seal and padlock the instruments at UNIVERSAL‘s factory. Pro Line and
QESTOR filed a criminal complaint for unfair competition against Monico Sehwani, the President of
UNIVERSAL.
The criminal complaint against Sehwani was eventually dismissed. Upon dismissal of the criminal case,
UNIVERSAL and Sehwani filed a civil case for damages against Pro Line and QUESTOR for allegedly filing
an unfounded suit.

ISSUE :

Whether or not the counterclaim should be sustained.

HELD :

Counterclaim for damages by the Pro-Line based on the illegal and unauthorized manufacture of
"Spalding" balls certainly constitutes an independent cause of action which can be the subject of a
separate complaint for damages against Universal. However, this separate civil action cannot anymore
be pursued as it is already barred by res judicata, the judgment in the criminal case (against Universal)
involving both the criminal and civil aspects of the case for unfair competition. To recall, petitioner Pro-
Line, upon whose initiative the criminal action for unfair competition against respondent Universal was
filed, did not institute a separate civil action for damages nor reserve its right to do so. Thus the civil
aspect for damages was deemed instituted in the criminal case.

No better manifestation of the intent of petitioner to recover damages in the criminal case can be
expressed than their active participation in the prosecution of the civil aspect of the criminal case
through the intervention of their private prosecutor. Obviously, such intervention could only be for the
purpose of recovering damages or indemnity because the offended party is not entitled to represent the
People of the Philippines in the prosecution of a public offense. A counterclaim partakes of the nature of
a complaint and/or a cause of action against the plaintiffs. It is in itself a distinct and independent cause
of action, so that when properly stated as such, the defendant becomes, in respect to the matter stated
by him, an actor, and there are two simultaneous actions pending between the same parties, where
each is at the same time both a plaintiff and defendant. A counterclaim stands on the same footing and
is to be tested by the same rules, as if it were an independent action.

CATERPILLAR INC. V. SAMSON

Facts

Petitioner Caterpillar, Inc. is a foreign corporation engaged in the business of manufacturing shoes,
clothing items, among others. Search warrant applications were filed against Manolo Samson (herein
after referred to as Samson) for violations of unfair competition provided under Section 168.3(a) in
relation to Sections 131.3, 123(e) and 170 of Republic Act No. 8293, otherwise known as the Intellectual
Property Code. Search warrants were then issued against respondent Samson and his other business
establishments (Itti Shoes Corporation, Kolm’s Manufacturing, and Caterpillar Boutique and General
Merchandise). Pursuant to the search warrants various merchandise garments, footwear, bags, wallets,
deodorant sprays, shoe cleaners and accessories, all bearing the trademarks "CAT," "CAT AND DESIGN,"
"CATERPILLAR," "CATERPILLAR AND DESIGN," "WALKING MACHINES" and/or "Track-type Tractor and
Design" were seized. Respondent Samson filed a motion to quash the search warrants but was denied.
However, the Court ordered the release of the articles that were seized since there was no criminal
action filed against the respondent. Petitioner then filed Motion for Partial Reconsideration but was
denied by the TC. CA also denied the petition after noting that all the criminal complaints that were filed
against the respondent were dismissed by the investigating prosecutor and that the respondent never
denied the existence of the said items.

Issue/s

1) W/N CA erred in upholding the immediate release of the seized items on the ground that there was
no criminal action for unfair competition filed against the respondent?

2) W/N the CA erred in ruling that the subsequent dismissal of the investigating State Prosecutor of the
criminal complaints against respondent justifies the return of the seized items?

Held/Ratio

1) NO. The Joint Resolution of the DOJ has become final; therefore no criminal case was filed against the
respondent in relation with the five search warrants that were issued by the Trial Court. There was also
no criminal case filed against the articles that were seized. With these, the seized articles should be
immediately released. Also, the numerous articles of clothing, footwear and accessories, among others,
that were seized had little, if any, evidentiary value for the criminal action of unfair competition.
An action for unfair competition is based on the proposition that no dealer in merchandise should be
allowed to dress his goods in simulation of the goods of another dealer, so that purchasers desiring to
buy the goods of the latter would be induced to buy the goods of the former. The most usual devices
employed in committing this crime are the simulation of labels and the reproduction of form, color and
general appearance of the package used by the pioneer manufacturer or dealer. In the case at hand the
respondent already admitted the existence of the seized articles. The Court therefore ruled that the
admissions of the respondent in the case at hand are already suffiecient to establish that he used such
trademarks in order to sell merchandise at a commercial scale and that the actual products
manufactured by the respondent need not be presented to prove such fact. Also, there were already
available samples from the purchases as well as photographs of the particular parts of the merchandise
where the trademark in dispute were attached or used, therefore there is no more need for the court to
take custody of the countless articles that were seized.

2) NO. In the case at hand there is no criminal action that has been filed. The Court therefore was left
with no custody of the highly depreciable merchandise that were seized. More importantly, these highly
depreciable articles would have been superfluous if presented as evidence for the following reasons: (1)
the respondent had already admitted that he is the owner of the merchandise seized, which made use
of the trademarks in dispute; (2) the court required the respondent to execute an undertaking to
produce the articles seized when the court requires and had already in its possession a complete
inventory of the items seized as secondary evidence; (3) actual samples of the respondent’s
merchandise are in the possession of the police officers who had applied for the search warrant, and
photographs thereof had been made part of the records, and respondent did not dispute that these
were obtained from his stores. Where the purpose of presenting as evidence the articles seized is no
longer served, there is no justification for severely curtailing the rights of a person to his property.
Hence, petition denied.

Shang Properties v. St. Francis Development Corporation

GR No. 190706; July 21, 2014

FACTS:

Respondent domestic corporation is engaged in the real estate business and is the developer of the St.
Francis Square Commercial Center (built sometime in 1992).
It filed separate complaints against petitioners before the IPO - BLA, namely:

(a) IPV Case – an intellectual property violation case for unfair competition, false or fraudulent
declaration, and damages arising from petitioners’ use and filing of applications for the registration of
the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE,”; and

(b) St. Francis Towers IP Case – an inter partes case opposing the petitioners’ application for registration
of the mark “THE ST. FRANCIS TOWERS” for use relative to the latter’s business, particularly the
construction of permanent buildings or structures for residential and office purposes; and

(c) St. Francis Shangri-La IP Case – an inter partes case opposing the petitioners’ application for
registration of the mark “THE ST. FRANCIS SHANGRI-LA PLACE,”.

Respondent alleged that it has used the mark “ST. FRANCIS” to identify its numerous property
development projects located at Ortigas Center, such as the aforementioned St. Francis Square
Commercial Center, a shopping mall called the “St. Francis Square,” and a mixed-use realty project plan
that includes the St. Francis Towers. Respondent added that as a result of its continuous use of the mark
“ST. FRANCIS” in its real estate business, it has gained substantial goodwill with the public that
consumers and traders closely identify the said mark with its property development projects.
Accordingly, respondent claimed that petitioners could not have the mark “THE ST. FRANCIS TOWERS”
registered in their names, and that petitioners’ use of the marks “THE ST. FRANCIS TOWERS” and “THE
ST. FRANCIS SHANGRI-LA PLACE” in their own real estate development projects constitutes unfair
competition as well as false or fraudulent declaration.

Petitioners denied committing unfair competition and false or fraudulent declaration, maintaining that
they could register the mark “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE”
under their names. They contended that respondent is barred from claiming ownership and exclusive
use of the mark “ST. FRANCIS” because the same is geographically descriptive of the goods or services
for which it is intended to be used. This is because respondent’s as well as petitioners’ real estate
development projects are located along the streets bearing the name “St. Francis,” particularly, St.
Francis Avenue and St. Francis Street (now known as Bank Drive), both within the vicinity of the Ortigas
Center.

ISSUE:

Whether or not petitioners are guilty of unfair competition in using the marks “THE ST. FRANCIS
TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE.”
RULING:

NO.

RATIO DECIDENDI:

The unfair competition concept refers to the “‘the passing off (or palming off) or attempting to pass off
upon the public of the goods or business of one person as the goods or business of another with the end
and probable effect of deceiving the public.’ Passing off (or palming off) takes place where the
defendant, by imitative devices on the general appearance of the goods, misleads prospective
purchasers into buying his merchandise under the impression that they are buying that of his
competitors. [In other words], the defendant gives his goods the general appearance of the goods of his
competitor with the intention of deceiving the public that the goods are those of his competitor.”

The “true test” of unfair competition has thus been “whether the acts of the defendant have the intent
of deceiving or are calculated to deceive the ordinary buyer making his purchases under the ordinary
conditions of the particular trade to which the controversy relates.” Based on the foregoing, it is
therefore essential to prove the existence of fraud, or the intent to deceive, actual or probable,
determined through a judicious scrutiny of the factual circumstances attendant to a particular case.

Here, the Court finds the element of fraud to be wanting; hence, there can be no unfair competition.
The CA’s contrary conclusion was faultily premised on its impression that respondent had the right to
the exclusive use of the mark “ST. FRANCIS,” for which the latter had purportedly established
considerable goodwill. What the CA appears to have disregarded or been mistaken in its disquisition,
however, is the geographically descriptive nature of the mark “ST. FRANCIS” which thus bars its
exclusive appropriability, unless a secondary meaning is acquired.

As deftly explained in the U.S. case of Great Southern Bank v. First Southern Bank: “[d]escriptive
geographical terms are in the ‘public domain’ in the sense that every seller should have the right to
inform customers of the geographical origin of his goods. A ‘geographically descriptive term’ is any noun
or adjective that designates geographical location and would tend to be regarded by buyers as
descriptive of the geographic location of origin of the goods or services. A geographically descriptive
term can indicate any geographic location on earth, such as continents, nations, regions, states, cities,
streets and addresses, areas of cities, rivers, and any other location referred to by a recognized name. In
order to determine whether or not the geographic term in question is descriptively used, the following
question is relevant: (1) Is the mark the name of the place or region from which the goods actually
come? If the answer is yes, then the geographic term is probably used in a descriptive sense, and
secondary meaning is required for protection.”

Secondary meaning is established when a descriptive mark no longer causes the public to associate the
goods with a particular place, but to associate the goods with a particular source. In other words, it is
not enough that a geographically-descriptive mark partakes of the name of a place known generally to
the public to be denied registration as it is also necessary to show that the public would make a
goods/place association

– that is, to believe that the goods for which the mark is sought to be registered originate in that place.
However, where there is no genuine issue that the geographical significance of a term is its primary
significance and where the geographical place is neither obscure nor remote, a public association of the
goods with the place may ordinarily be presumed from the fact that the applicant’s own goods come
from the geographical place named in the mark.