09 DISTILLERIA WASHINGTON, INC. or WASHINGTON DISTILLERY, INC. vs. THE HONORABLE COURT OF APPEALS and LA TONDEA DISTILLERS, INC.

[G.R. No. 120961. October 17, 1996]

TOPIC: Trademark

PONENTE: Vitug, J.AUTHOR: Danna

FACTS

1. La Tondea Distillers, Inc. (LTDI) sought to seize from Distilleria Washington 18,157 empty 350 c.c. white flint bottles bearing the blown-in marks of La Tondea Inc. and Ginebra San Miguel. These bottles, it was averred, were being used by Washington for its own Gin Seven products without the consent of LTDI.

LTDIs contention: Being the owner and registrant of the bottles, it was entitled to the protection so extended by R.A. No. 623 (AN ACT TO REGULATE THE USE OF DULY STAMPED OR MARKED BOTTLES, BOXES, CASKS, KEGS, BARRELS AND OTHER SIMILAR CONTAINERS), as amended, notwithstanding its sale of the Ginebra San Miguel gin product that was contained in the said bottles.

[Basically, theyre saying that what theyre selling is only the gin (yung inumin inside the bottle); di kasama yung bottle sa binebenta so sila yung owner ng bottles and bawal yun gamitin ni Washington.]

The court, on application of LTDI, issued an order of replevin for the seizure of the empty gin bottles from Washington.

2.Washington claims that it is the owner of the 18,157 empty bottles.

Washingtons contention: R.A. No. 623 should not apply to gin, an alcoholic beverage which is unlike that of soda water, mineral or aerated water, ciders, milks, cream, or other lawful beverages mentioned in [RA 623]; and that, in any case, ownership of the bottles should be held lawfully transferred to the buyers upon the sale of the gin and containers at a single price.

ISSUE/HELD

Whether or not there was an illegal use of the bottles (which had blown-in marks of La Tondea Inc. and Ginebra San Miguel) by Washington >> YES

The Court found it legally absurd to still allow Washington to recover the bottles. The practical and feasible alternative is to merely require the payment of just compensation to [Washington] for the bottles seized from it by LTDI. Conventional wisdom, along with equity and justice to both parties, dictates it.

RATIO

1.It is a fact that R.A. No. 623 extends trademark protection in the use of containers duly registered with the Philippine Patent Office.

(Republic Act No. 623, which governs the registration of marked bottles and containers, merely requires that the bottles, in order to be eligible for registration, must be stamped or marked with the names of the manufacturers or the names of their principals or products, or other marks of ownership. No drawings or labels are required but, instead, two photographs of the container, duly signed by the applicant, showing clearly and legibly the names and other marks of ownership sought to be registered and a bottle showing the name or other mark or ownership, irremovably stamped or marked, shall be submitted.)

2.The instant suit is one for replevin (manual delivery) where the claimant must be able to show convincingly that he is either the owner or clearly entitled to the possession of the object sought to be recovered. Replevin is a possessory action the gist of which focuses on the right of possession that, in turn, is dependent on a legal basis that, not infrequently, looks to the ownership of the object sought to be replevied.

3.It is to be pointed out that a trademark refers to a word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a merchant to identify, and distinguish from others, his goods of commerce. It is basically an intellectual creation that is susceptible to ownership and, consistently therewith, gives rise to its own elements of jus posidendi, jus utendi, jus fruendi, jus disponendi, and jus abutendi, along with the applicable jus lex, comprising that ownership. The incorporeal right, however, is distinct from the property in the material object subject to it. Ownership in one does not necessarily vest ownership in the other. Thus, the transfer or assignment of the intellectual property will not necessarily constitute a conveyance of the thing it covers, nor would a conveyance of the latter imply the transfer or assignment of the intellectual right.

4.R.A. No. 623 evidently does not disallow the sale or transfer of ownership of the marked bottles or containers. In fact, the contrary is implicit in the law; thus

Sec. 5. No action shall be brought under this Act against any person to whom the registered manufacturer, bottler or seller, has transferred by way of sale, any of the containers herein referred to, but the sale of the beverage contained in the said containers shall not include the sale of the containers unless specifically so provided.

5.[The industry practice in the sale of gin is as follows:] The manufacturer sells the product in marked containers, through dealers, to the public in supermarkets, grocery shops, retail stores and other sales outlets. The buyer takes the item; he is neither required to return the bottle nor required to make a deposit to assure its return to the seller. He could return the bottle and get a refund. A number of bottles at times find their way to commercial users [like Washington. Ownership of the containers does pass on to the consumer albeit subject to the statutory limitation on the use of the registered containers and to the trademark right of the registrant.]

6.The statement in Section 5 of R.A. 623 to the effect that the sale of beverage contained in the said containers shall not include the sale of the containers unless specifically so provided is not a rule of proscription. It is a rule of construction that, in keeping with the spirit and intent of the law, establishes at best a presumption (of non-conveyance of the container) and which by no means can be taken to be either interdictive or conclusive in character.

7.LTDIs sales invoice, stipulating that the sale does not include the bottles [which have the blow-in marks of ownership of La Tondea Distillers], cannot affect those who are not privies thereto.

8.While it may be unwarranted for LTDI to simply seize the empty containers, this Court finds it to be legally absurd, however, to still allow [Washington] to recover the possession thereof.

R.A. 623, as amended, in affording trademark protection to the registrant, has additionally expressed a prima facie presumption of illegal use by a possessor whenever such use or possession is without the written permission of the registered manufacturer, a provision that is neither arbitrary nor without appropriate rationale.

The practical and feasible alternative is to merely require the payment of just compensation to [Washington] for the bottles seized from it by LTDI. Conventional wisdom, along with equity and justice to both parties, dictates it.

CASE LAW/DOCTRINE

It is to be pointed out that a trademark refers to a word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a merchant to identify and distinguish from others, his goods of commerce. It is basically an intellectual creation that is susceptible to ownership and, consistently therewith, gives rise to its own elements of jus posidendi, jus utendi, jus fruendi, jus disponendi, and jus abutendi, along with the applicable jus lex, comprising that ownership.

The incorporeal right, however, is distinct from the property in the material object subject to it. Ownership in one does not necessarily vest ownership in the other. Thus, the transfer or assignment of the intellectual property will not necessarily constitute a conveyance of the thing it covers, nor would a conveyance of the latter imply the transfer or assignment of the intellectual right.

The statement Sale of beverage contained in the said containers shall not include the sale of the containers unless specifically so provided is not a rule of proscription, but establishes, at best, a presumption of non-conveyance of the container.

001 ANA L. ANG, petitioner, vs.

TORIBIO TEODORO, respondent.

G.R. No. L-48226 December 14, 1942

Topic: TrademarkAUTHOR: Rhona Burs

Function of a trade-mark is to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied.

FACTS:

1. Respondent Toribio Teodoro has continuously used "Ang Tibay," both as a trade-mark and as a trade-name, in the manufacture and sale of slippers, shoes, and indoor baseballs since 1910.

2. He formally registered it as trade-mark on September 29, 1915, and as trade-name on January 3, 1933. The growth of his business is a thrilling epic of Filipino industry and business capacity.

3. Petitioner Ang (defendant below) registered the same trade-mark "Ang Tibay" for pants and shirts on April 11, 1932, and established a factory for the manufacture of said articles in the year 1937.

4. The trial court absolved the defendant (Ms. Ang) from the complaint on the grounds that the two trademarks are dissimilar and are used on different and non-competing goods; that there had been no exclusive use of the trade-mark by the plaintiff; and that there had been no fraud in the use of the said trade-mark by the defendant (Ang) because the goods on which it is used are essentially different from those of the plaintiff.

5. The CA reversed that judgment, holding that by uninterrupted an exclusive use since 191 in the manufacture of slippers and shoes, respondent's trade-mark has acquired a secondary meaning; that the goods or articles on which the two trade-marks are used are similar or belong to the same class; and that the use by petitioner of said trade-mark constitutes a violation of sections 3 and 7 of Act No. 666.

6. The CA directed the Director of Commerce to cancel the registration of the trade-mark "Ang Tibay" in favor of petitioner Ang, and perpetually enjoining the latter from using said trade-mark on goods manufactured and sold by her.

The defendant Director of Commerce did not appeal from the decision of the Court of Appeals.

7. Hence, this appeal by petitioner.

8. Petitioners contention: the phrase "Ang Tibay" as employed by the respondent on the articles manufactured by him is a descriptive term because, "freely translate in English," it means "strong, durable, lasting." Petitioner invokes section 2 of Act No. 666, which provides that words or devices, which related only to the name, quality, or description of the merchandise, cannot be the subject of a trade-mark.

9. Respondents contention: the words "Ang Tibay" are not descriptive but merely suggestive and may properly be regarded as fanciful or arbitrary in the legal sense.

ISSUE: 1. Whether or not the words Ang Tibay had acquired a secondary meaning

2. WON the the words "Ang Tibay" are not descriptive but merely suggestive

HELD:

1. It is unnecessary to apply here the doctrine of "secondary meaning" in trade-mark parlance. The phrase "Ang Tibay," being neither geographic nor descriptive, was originally capable of exclusive appropriation as a trademark. But were it not so, the application of the doctrine of secondary meaning made by the Court of Appeals could nevertheless be fully sustained because, in any event, by respondent's long and exclusive use of said phrase with reference to his products and his business, it has acquired a proprietary connotation.

2. "Ang Tibay" is not a descriptive term within the meaning of the Trade-Mark Law but rather a fanciful or coined phrase, which may properly and legally be appropriated as a trade-mark or trade-name

RATIO:

1. We find it necessary to go into the etymology and meaning of the Tagalog words "Ang Tibay" to determine whether they are a descriptive term, i.e., whether they relate to the quality or description of the merchandise to which respondent has applied them as a trade-mark. The word "ang" is a definite article meaning "the" in English. It is also used as an adverb, a contraction of the word "anong" (what or how).

The phrase "Ang Tibay" is an exclamation denoting administration of strength or durability.

2. We deduce that "Ang Tibay" is not a descriptive term within the meaning of the Trade-Mark Law but rather a fanciful or coined phrase, which may properly and legally be appropriated as a trade-mark or trade-name. In this connection we do not fail to note that when the petitioner herself took the trouble and expense of securing the registration of these same words as a trademark of her products she or her attorney as well as the Director of Commerce was undoubtedly convinced that said words (Ang Tibay) were not a descriptive term and hence could be legally used and validly registered as a trade-mark. It seems stultifying and puerile for her now to contend otherwise, suggestive of the story of sour grapes.

3. Counsel for the petitioner says that the function of a trade-mark is to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied. That is correct, and we find that "Ang Tibay," as used by the respondent to designate his wares, had exactly performed that function for twenty-two years before the petitioner adopted it as a trade-mark in her own business. Ang Tibay shoes and slippers are, by association, known throughout the Philippines as products of the Ang Tibay factory owned and operated by the respondent Toribio Teodoro.

4. Petitioners other contention: Court of Appeals erred in holding that the words "Ang Tibay" had acquired a secondary meaning.

SC: it is unnecessary to apply here the doctrine of "secondary meaning" in trade-mark parlance. This doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article of the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product.

We have said that the phrase "Ang Tibay," being neither geographic nor descriptive, was originally capable of exclusive appropriation as a trademark. But were it not so, the application of the doctrine of secondary meaning made by the Court of Appeals could nevertheless be fully sustained because, in any event, by respondent's long and exclusive use of said phrase with reference to his products and his business, it has acquired a proprietary connotation.

5. Petitioners contention: Court of Appeals erred in holding that pants and shirts are goods similar to shoes and slippers within the meaning of sections 3 and 7 of Act No. 666; there can be no infringement then because those articles do not belong to the same class of merchandise as shoes and slippers.

SC: In the present state of development of the law on Trade-Marks, Unfair Competition, and Unfair Trading, the test employed by the courts to determine whether noncompeting goods are or are not of the same class is confusion as to the origin of the goods of the second user. Although two noncompeting articles may be classified under two different classes by the Patent Office because they are deemed not to possess the same descriptive properties, they would, nevertheless, be held by the courts to belong to the same class if the simultaneous use on them of identical or closely similar trade-marks would be likely to cause confusion as to the origin, or personal source, of the second user's goods. They would be considered as not falling under the same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the purchaser would think the first user made the second user's goods.

The courts have come to realize that there can be unfair competition or unfair trading even if the goods are non-competing, and that such unfair trading can cause injury or damage to the first user of a given trade-mark, first, by prevention of the natural expansion of his business and, second, by having his business reputation confused with and put at the mercy of the second user. Then noncompetitive products are sold under the same mark, the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark created by its first user, inevitably results. The original owner is entitled to the preservation of the valuable link between him and the public that has been created by his ingenuity and the merit of his wares or services. Experience has demonstrated that when a well-known trade-mark is adopted by another even for a totally different class of goods, it is done to get the benefit of the reputation and advertisements of the originator of said mark, to convey to the public a false impression of some supposed connection between the manufacturer of the article sold under the original mark and the new articles being tendered to the public under the same or similar mark.

The mere relation or association of the articles is not controlling. As may readily be noted from what we have heretofore said, the proprietary connotation that a trade-mark or trade-name has acquired is of more paramount consideration.

The Court of Appeals found in this case that by uninterrupted and exclusive use since 1910 of respondent's registered trade-mark on slippers and shoes manufactured by him, it has come to indicate the origin and ownership of said goods. It is certainly not farfetched to surmise that the selection by petitioner of the same trade-mark for pants and shirts was motivated by a desire to get a free ride on the reputation and selling power it has acquired at the hands of the respondent. As observed in another case, the field from which a person may select a trade-mark is practically unlimited, and hence there is no excuse for impinging upon or even closely approaching the mark of a business rival.

CASE LAW/ DOCTRINE:

The owner of a trade-mark or trade-name has a property right in which he is entitled to protection, since there is damage to him from confusion of reputation or goodwill in the mind of the public as well as from confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to classify and treat the issue as a fraud.

4. G.R. No. L-20635 March 31, 1966

ETEPHA, A.G., petitioner,

vs.

DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC.

in 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of trademark "Atussin" placed on its "medicinal preparation of expectorant antihistaminic, bronchodilator sedative, ascorbic acid (Vitamin C) used in the treatment of cough". The trademark is used exclusively in the Philippines since january 1959.

Petitioner, Etepha, A. G., a Liechtenstin corporation, objected. Petitioner claims that it will be damaged because Atussin is so confusedly similar to its Pertussin (Registration No. 6089, issued on September 25, 1957) used on a preparation for the treatment of coughs, that the buying public will be misled into believing that Westmont's product is that of petitioner's which allegedly enjoys goodwill.

the purpose of their objection was said to be to prevent fraud and imposition

the main issue is whether or not Atussin so resembles Pertussin "as to be likely, when applied to or used in connection with the goods ... of the applicant, to cause confusion or mistake or to deceive purchasers

ISSUE: May trademark ATUSSIN be registered, given the fact that PERTUSSIN, another trademark, had been previously registered in the Patent Office?

The phrase "colorable imitation" denotes such a "close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser, giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other.

tussin is "the common practice in the drug and pharmaceutical industries to 'fabricate' marks by using syllables or words suggestive of the ailments for which they are intended and adding thereto distinctive prefixes or suffixes".5 And appropriately to be considered now is the fact that, concededly, the "tussin" (in Pertussin and Atussin) was derived from the Latin root-word "tussis" meaning cough.

"Tussin" is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the goods; it is open for appropriation by anyone. It is accordingly barred from registration as trademark.

Tussin can be added to another word or phrase for it to become the subject of a trademark.

A practical approach to the problem of similarity or dissimilarity is to go into the whole of the two trademarks pictured in their manner of display. Inspection should be undertaken from the viewpoint of a prospective buyer. The trademark complained of should be compared and contrasted with the purchaser's memory (not in juxtaposition) of the trademark said to be infringed. Some such factors as "sound; appearance; form, style, shape, size or format; color; ideas connoted by marks; the meaning, spelling, and pronunciation, of words used; and the setting in which the words appear" may be considered. For, indeed, trademark infringement is a form of unfair competition.

Respondent's label underscores the trademark Atussin in bold, block letters horizontally written. In petitioner's, on the other hand, Pertussin is printed diagonally upwards and across in semiscript style with flourishes and with only the first letter "P" capitalized. Each label plainly shows the source of the medicine: petitioner's at the foot bears "Etepha Ltd. Schaan Fl", and on top, "Apothecary E. Taeschner's"; respondent's projects "Westmont Pharmaceuticals, Inc. New York, USA" at the bottoms, and on the lower left side the word "Westmont" upon a white diamond shaped enclosure and in red ink a color different from that of the words above and below it. Printed prominently along the left, bottom and right edges of petitioner's label are indications of the use: "for bronchial catarrh whopping-cough coughs and asthma". Respondent's for its part briefly represents what its produce actually is - a "cough syrup". The two labels are entirely different in colors, contents, arrangement of words thereon, sizes, shapes and general appearance. The contrasts in pictorial effects and appeals to the eye is so pronounced that the label of one cannot be mistaken for that of the other, not even by persons unfamiliar with the two trademarks.

only if their over-all presentations in any of the particulars of sound, appearance, or meaning are such as would lead the purchasing public into believing that the products to which the marks are applied emanated from the same source. In testing this issue, fixed legal rules exist if not in harmony, certainly in abundance but, in the final analysis, the application of these rules in any given situation necessarily reflects a matter of individual judgment largely predicated on opinion. There is, however, and can be no disagreement with the rule that the purchaser is confused, if at all, by the marks as a whole.

One look is enough to denude the mind of that illuminating similarity so essential for a trademark infringement case to prosper.

As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that the two words do not sound alike when pronounced. There is not much phonetic similarity between the two. The Solicitor General well-observed that in Pertussin the pronunciation of the prefix "Per", whether correct or incorrect, includes a combination of three letters P, e and r; whereas, in Atussin the whole starts with the single letter A added to suffix "tussin". Appeals to the ear are disimilar. And this, because in a word combination, the part that comes first is the most pronounced.

In the solution of a trademark infringement problem, regard too should be given to the class of persons who buy the particular product and the circumstances ordinarily attendant to its acquisition.The medicinal preparation clothed with the trademarks in question, are unlike articles of everyday use such as candies, ice cream, milk, soft drinks and the like which may be freely obtained by anyone, anytime, anywhere. Petitioner's and respondent's products are to be dispensed upon medical prescription. The respective labels say so. An intending buyer must have to go first to a licensed doctor of medicine; he receives instructions as to what to purchase; he reads the doctor's prescription; he knows what he is to buy. He is not of the incautious, unwary, unobservant or unsuspecting type; he examines the product sold to him; he checks to find out whether it conforms to the medical prescription. The common trade channel is the pharmacy or the drugstore. Similarly, the pharmacist or druggist verifies the medicine sold. The margin of error in the acquisition of one for the other is quite remote

003 PRIBHDAS J. MIRPURI, petitioner, vs.

COURT OF APPEALS, DIRECTOR OF PATENTS and the BARBIZON CORPORATION, respondents.

[G.R. No. 114508November 19, 1999]

TOPIC: Trademarks

PONENTE: PUNO, J.AUTHOR: Ernest

FACTS:

1.Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J. Mirpuri, filed an application with the Bureau of Patents for the registration of the trademark "Barbizon" for use in brassieres and ladies undergarments. Escobar alleged that she had been manufacturing and selling these products under the firm name "L & BM Commercial" since March 3, 1970.

2.Barbizon Corporation, a corporation organized and doing business under the laws of New York, U.S.A., opposed the application on the ff grounds:

a)The mark BARBIZON of respondent-applicant is confusingly similar to the trademark BARBIZON which opposer owns and has not abandoned.

b)That opposer will be damaged by the registration of the mark BARBIZON and its business reputation and goodwill will suffer great and irreparable injury.

c)That the respondent-applicant's use of the said mark BARBIZON which resembles the trademark used and owned by opposer, constitutes an unlawful appropriation of a mark previously used in the Philippines and not abandoned and therefore a statutory violation of Section 4 (d) of Republic Act No. 166, as amended.

3.The Director of Patents rendered judgment dismissing the opposition and giving due course to Escobar's application, which became final on Sep 11, 1974.

4.Escobar later assigned all her rights and interest over the trademark to petitioner Pribhdas J. Mirpuri who, under his firm name then, the "Bonito Enterprises," was the sole and exclusive distributor of Escobar's "Barbizon" products.

5.Escobar failed to file with the Bureau of Patents the Affidavit of Use of the trademark required under Section 12 of Republic Act (R.A.) No. 166, the Philippine Trademark Law. Due to this failure, the Bureau of Patents cancelled Escobar's certificate of registration.

6.Escobar reapplied for registration of the cancelled trademark. Mirpuri filed his own application for registration of Escobar's trademark. Escobar later assigned her application to herein petitioner and this application was opposed by private respondent on the ground that the trademark applied for by respondent applicant is identical to Opposer's BARBIZON trademark and constitutes the dominant part of Opposer's two other marks namely, BARBIZON and Bee design and BARBIZON and a Representation of a Woman.

Director rendered a decision declaring private respondent's opposition barred by res judicata and giving due course to petitioner's application for registration.

Court of Appeals reversed the Director of Patents finding that IPC No. 686 was not barred by judgment in IPC No. 2049 and ordered that the case be remanded to the Bureau of Patents for further proceedings. Hence petition.

ISSUE: The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty which the Philippines bound itself to honor and enforce in this country. Hence, whether or not the treaty affords protection to a foreign corporation against a Philippine applicant for the registration of a similar trademark.

HELD/RATIO:

Yes. The essential requirement under Article 6bis is that the trademark to be protected must be "well-known" in the country where protection is sought. The power to determine whether a trademark is well-known lies in the "competent authority of the country of registration or use." This competent authority would be either the registering authority if it has the power to decide this, or the courts of the country in question if the issue comes before a court.

In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all pending applications for Philippine registration of signature and other world-famous trademarks by applicants other than their original owners or users. The Minister enumerated several internationally-known trademarks and ordered the Director of Patents to require Philippine registrants of such marks to surrender their certificates of registration.

In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate well-known trademarks but laid down guidelines for the Director of Patents to observe in determining whether a trademark is entitled to protection as a well-known mark in the Philippines under Article 6bis of the Paris Convention. This was to be established through Philippine Patent Office procedures in inter partes and ex parte cases pursuant to the criteria enumerated therein. The Philippine Patent Office was ordered to refuse applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or imitation of a trademark owned by a person who is a citizen of a member of the Union. All pending applications for registration of world-famous trademarks by persons other than their original owners were to be rejected forthwith. The Ongpin Memorandum was issued pursuant to Executive Order No. 913 dated October 7, 1983 of then President Marcos which strengthened the rule-making and adjudicatory powers of the Minister of Trade and Industry for the effective protection of consumers and the application of swift solutions to problems in trade and industry.

Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the 1984 landmark case ofLa Chemise Lacoste, S.A. v. Fernandez. This court ruled therein that under the provisions of Article 6bis of the Paris Convention, the Minister of Trade and Industry was the "competent authority" to determine whether a trademark is well-known in this country.

DOCTRINES:

A "trademark" is defined under R.A. 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 from those manufactured, sold or dealt in by others. This definition has been simplified in R.A. No. 8293, the Intellectual Property Code of the Philippines, which defines a "trademark" as "any visible sign capable of distinguishing goods." 12 In Philippine jurisprudence, the function of a trademark is to point out distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior and different article as his product.

Today, the trademark is not merely a symbol of origin and goodwill; it is often the most effective agent for the actual creation and protection of goodwill. It imprints upon the public mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the goods. 28 The mark has become the "silent salesman," the conduit through which direct contact between the trademark owner and the consumer is assured. It has invaded popular culture in ways never anticipated that it has become a more convincing selling point than even the quality of the article to which it refers.

DISPOSITIVE: IN VIEW WHEREOF, the petition is denied and the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 28415 are affirmed. SO ORDERED.

ARCE SONS AND COMPANY, petitioner, vs. SELECTA BISCUIT COMPANY, INC., ET AL., respondents.

G.R. No. L-14761 January 28, 1961 Bautistta Angelo, J.

Facts:

1. Selecta Biscuit Company, Inc., hereinafter referred to as respondent, filed with the Philippine Patent Office a petition for the registration of the word "SELECTA" as trade-mark to be use in its bakery products

a. Allegation: actual use thereof for not less than two months before said date and that "no other persons, partnership, corporation or association ... has the right to use said trademark in the Philippines, either in the identical form or in any such near resemblance thereto, as might be calculated to deceive."

2.Its petition was referred to an examiner for study who found that the trade-mark sought to be registered resembles the word "SELECTA" used by the Acre and Sons and Company, in its milk and ice cream products

a.so that its use by respondent will cause confusion as to the origin of their respective goods.

b.he recommended that the application be refused.

c.Upoen Reconsideration: Patent Office ordered the publication of the application for purposes of opposition.

3.Petitioner filed its opposition thereto on several grounds

a.That the mark "SELECTA" had been continuously used by petitioner in the manufacture and sale of its products, including cakes, bakery products, milk and ice cream from the time of its organization and even prior thereto by its predecessor-in-interest, Ramon Arce;

b.That the mark "SELECTA" has already become identified with name of the petitioner and its business

c.That petitioner had warned respondent not to use said mark because it was already being used by the former, but that the latter ignored said warning

d.That respondent is using the word "SELECTA" as a trade-mark as bakery products in unfair competition with the products of petitioner thus resulting in confusion in trade;

e.That the mark to which the application of respondent refers has striking resemblance, both in appearance and meaning,

f.That actually a complaint has been filed by the petitioner against respondent for unfair competition in the Court of First Instance of Manila

4.Points raised by respondent:

a.That its products are biscuits, crackers, and cookies, wrapped in cellophane packages, place in tin containers, and that its products may last a year with out spoilage, while the ice cream, milk, cakes and other bakery products which petitioner manufactures last only for two or three days;

b.that the sale and distribution of petitioner's products are on retail basis, limited to the City of Manila and suburbs, and its place of business is localized at Azcarraga, corner of Lepanto Street and at Dewey Blvd., Manila, while that of respondent is on a wholesale basis, extending throughout the length and breadth of the Philippines

c.that petitioner's signboard on its place of business reads 'SELECTA' and on its delivery trucks "Selecta, Quality Always, Restaurant and Caterer, Azcarraga, Dewey Blvd., Balintawak and Telephone number," in contrast with respondent's signboard on its factory which reads "Selecta Biscuit Company, Inc.," and on its delivery trucks "Selecta Biscuit Company, Inc., Tuason Avenue, Malabon, Rizal, Telephone No. 2-13-27

d.that the business name of petitioner is different from the business name of respondent

e.that petitioner has only a capital investment of P25,000.00 whereas respondent has a fully paid-up stock in the amount of P234,000.00 out of the P500,000.00 authorized capital,

f.that the use of the name 'SELECTA' by respondent cannot lead to confusion in the business operation of the parties.

5.CFI: rendered decision in the unfair competition case perpetually enjoining respondent from using the name "SELECTA" as a trade-mark on the goods manufactured and/or sold by it and ordering it to pay petitioner by way of damages

6.Patent Office: rendered decision dismissing petitioner's opposition and stating that the registration of the trade-mark "SELECTA" in favor of applicant Selecta Biscuits Company, Inc. will not cause confusion or mistake nor will deceive the purchasers as to the cause damage to petitioner.

a.Director of Patents: He believes that the word as used by the petitioner functions only to point to the place of business or location of its restaurant while the same word as used by respondent points to the origin of the products its manufactures and sells and he predicates this distinction upon the fact that while the goods of petitioner are only served within its restaurant or sold only on special orders in the City of Manila, respondent's goods are ready-made and are for sale throughout the length and breadth of the country.

b.He is of the opinion that the use of said trade-mark by respondent has not resulted in confusion in trade contrary to the finding of the court a quo. Which of this opinions is correct is the issue now for determination.

Issue: WON the adoption by the respondent of the word 'SELECTA' is tantamount to unfair competition.

Held. Yes. The Director of Patents committed an error in dismissing the opposition of petitioner and in holding that the registration of the trade-mark 'SELECTA' in favor of respondent will not cause damage to petitioner.

Ratio:

1. It appears that Ramon Arce, predecessor-in-interest of petitioner, started his milk business as early as 1933.

a.He sold his milk products in bottles covered with caps on which the words 'SELECTA FRESH MILK' were inscribed.

b.Expanding his business, he established a store at Lepanto Street, City of Manila, where he sold, in addition to his products, ice cream, sandwiches and other food products, placing right in front of his establishment a signboard with the name 'SELECTA' inscribed thereon.

c.Special containers made of tin cans with the word 'SELECTA' written on their covers were used for his products. Bottle with the same word embossed on their sides were used for his milk products.

d.The sandwiches he sold and distributed were wrapped in carton boxes with covers bearing the same name.

e.He used several cars and trucks for delivery purposes on the sides of which were written the same word.

f.As new products were produced for sale, the same were placed in containers with the same name written on their covers.

g.After the war, he added to his business such items as cakes, bread, cookies, pastries, and assorted bakery products.

h.Then his business was acquired by petitioner, a copartnership organized by his sons, the purposes of which are "to conduct a first class restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other products; and to carry on such other legitimate business as may produce profit."

2. The foregoing unmistakably show that petitioner, through its predecessor-in-interest, had made use of the word "SELECTA" not only as a trade-name indicative of the location of the restaurant where it manufactures and sells its products, but as trade-mark is used.

a.Trade-mark' or trade-name', distinction being highly technical, is sign, device, or mark by which articles produced are dealt in by particular person or organization are distinguished or distinguishable from those produced or dealt in by other."

b.the word 'SELECTA' has been chosen by petitioner and has been inscribed on all its products to serve not only as a sign or symbol that may indicate that they are manufactured and sold by it but as a mark of authenticity that may distinguish them from the products manufactured and sold by other merchants or businessmen.

c.The Director of Patents, therefore, erred in holding that petitioner made use of that word merely as a trade-name and not as a trade-mark within the meaning of the law. The word 'SELECTA', it is true, may be an ordinary or common word in the sense that may be used or employed by any one in promoting his business or enterprise, but once adopted or coined in connection with one's business as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may acquire a secondary meaning as to be exclusively associated with its products and business.

The term 'SELECTA' may be placed at par with the words "Ang Tibay" which this Court has considered not merely as a descriptive term within the meaning of the Trade-mark Law but as a fanciful or coined phrase, or a trade-mark.

a.In that case, this Court found that respondent has constantly used the term "Ang Tibay" , both as a trade-mark and a tradename, in the manufacture and sale of slippers, shoes and indoor baseballs for twenty-two years before petitioner registered it as a trade-name for pants and shirts

b.The rationale in the Ang Tibay case applies on all fours to the case of petitioner.

On respondent claims that it adopted the trade-mark 'SELECTA' in good faith and not precisely to engage in unfair competition with petitioner.

a.The suggestion that the name 'SELECTA' was chosen by the organizers of respondent merely as a translation from a Chinese word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very manner of its selection, for if the only purpose is to make an English translation of that word and not to compete with the business of petitioner, why chose the word 'SELECTA', a Spanish word, and not "Selected", the English equivalent thereof, as was done by other well-known enterprises?

b.In the words of petitioner's counsel, "Why with all the words in the English dictionary and all the words in the Spanish dictionary and all the phrases that could be coined, should defendant-appellant (respondent) choose 'SELECTA' if its purpose was not and is not to fool the people and to damage plaintiff-appellee?"

c.The explanation given by Sy Hap, manager of the defendant, that the word 'Selecta' was chosen for its bakery products by the organizers of said company from the Chinese word 'Ching Suan' meaning 'mapili', which in English translation , is to say the least, very weak and untenable.

d.Sy Hap himself admitted that he had known Eulalio Arce, the person managing plaintiff's business, since 1954

6. All of these circumstances tend to conspire in inducing one to doubt defendant's motive for using the same word "Selecta" for its bakery products.

a. To allow the defendant here to use the word "Selecta" in spite of the fact that this word has already been adopted and exploited by Ramon Arce and by his family thru the organization of Arce Sons and Company, for the maintenance of its goodwill, for which said plaintiff and its predecessor have spent time, effort and fortune, is to permit business pirates and buccaneers to appropriate for themselves and to their profit and advantage the trade names and trade marks of well established merchants with all their attendant good will and commercial benefit.

006 Philip Morris vs. CA

[G.R. No. 91332 July 16, 1993]

TOPIC: Acquisition of Trademark; Registration

PONENTE: Melo, J.

AUTHOR: Arthur Archie Tiu

NOTES:

Philip Morris is a US company (laws of Virginia) and does business at the US. The other companies are subsidiaries of Philip Morris and not doing business in the Philippines.

FACTS:

1.Petitioners Philip Morris, Benson and Hedges Inc., and Fabriques Tabac Reunies are ascribing whimsical exercise of the faculty conferred upon magistrates by Section 6, Rule 58 of the Revised Rules of Court when respondent Court of Appeals lifted the writ of preliminary injunction it earlier had issued against Fortune Tobacco Corporation, herein private respondent, from manufacturing and selling "MARK" cigarettes in the local market.

2.Petitioners claim that the symbols "MARK VII", "MARK TEN", and "LARK" must be protected against unauthorized appropriation.

3.respondent alleged that it has been authorized by the Bureau of Internal Revenue to manufacture and sell cigarettes bearing the trademark "MARK", and that "MARK" is a common word which cannot be exclusively appropriated. They also admit to petitioners certificates of registration with the IPO but sets up affirmative and special defenses.

4.Petitioners claim that Fortune has no right to manufacture and sell the cigarettes bearing confusingly similar trademark . However, they are not doing business in the Philippines

ISSUE(S) Whether or not there has been an invasion on plaintiffs right to trademark?

Whether or not there is a violation of the international agreement on protection of trademark?

HELD: No

RATIO:

1.There is no proof whatsoever that any of plaintiffs products which they seek to protect from any adverse effect of the trademark applied for by defendant, is in actual use and available for commercial purposes anywhere in the Philippines.

2.To sustain a successful prosecution of their suit for infringement, petitioners, as foreign corporations not engaged in local commerce, rely on Section 21-A of the Trademark Law reading as follows:

SECTION 21-A. Any foreign corporation or juristic person to which a mark or trade-name has been registered or assigned under this act may bring an action hereunder for infringement, for unfair competition, or false designation of origin and false description, whether or not it has been licensed to do business in the Philippines under Act Numbered Fourteen hundred and fifty-nine, as amended, otherwise known as the Corporation Law, at the time it brings complaint: Provided, That the country of which the said foreign corporation or juristic person is a citizen or in which it is domiciled, by treaty, convention or law, grants a similar privilege to corporate or juristic persons of the Philippines. (As inserted by Sec. 7 of Republic Act No. 638.) to drive home the point that they are not precluded from initiating a cause of action in the Philippines on account of the principal perception that another entity is pirating their symbol without any lawful authority to do so.

3.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. At any rate, and assuming in gratia argumenti that respondent court erroneously lifted the writ it previously issued, the same may be cured by appeal and not in the form of a petition for certiorari.

CASE LAW/ DOCTRINE:

DISSENTING/CONCURRING OPINION(S):

May dissenting Opinion si Feliciano, J.

Private respondent's claims concerning alleged damages both to itself and to the Government, which obviously loomed very large in the mind of the majority here, and of the Court of Appeals when it lifted the injunction it had issued, appear to me to be extravagant indeed. Petitioners cannot claim to be entitled to an injunction which could restrain private respondent from manufacturing and selling cigarettes completely; petitioner do not pretend to be so entitled to such a comprehensive injunction. Petitioners seek only the reinstatement of the original injunction issued by the Court of Appeals, i.e., one that restrains private respondent from using the trademark "MARK" on its cigarettes. There is nothing to prevent private respondent from continuing to manufacture and sell cigarettes under any of its already existing and registered trademarks, of which it has several, or under some new and specially created trademark(s). Realistically, private respondent, if enjoined, would lose only the value of the packaging material imprinted with the same trademark (which cigarettes and material may well be amenable to re-cycling) and the cost of past advertisements of "MARK" in media, if any. Thus, the apprehension on the part of the majority which private respondent tried diligently to foment that the Government would lose many millions of pesos in tax revenues and that many employees would lose their jobs, if an injunction is issued is more apparent than real. The damages private respondent would sustain from reinstatement of the preliminary injunction are clearly quantifiable in pesos.

My conclusion is that private respondent's claims concerning damage which it would sustain if the petitioners were granted the injunction they seek, did not constitute a sufficient basis for overturning the original decision of the Court of Appeals. The Resolution of the Court of Appeals granting private respondent's Motion to Dissolve, in effect disregarded everything that Court had set out in its original Decision. The mere offer and filing of a counterbond does not, by itself, provide a sufficient basis for lifting the preliminary injunction earlier granted. For all the elements which supported the original issuance of a preliminary injunction continued to exist. Private respondent's hyperbolic claims concerning the damages that it and the Government would sustain by reason of an injunction, had been made earlier both before the trial court and the Court of Appeals. Finally, it is not enough to say as private respondent says, that the Court of Appeals in granting its Motion to Dissolve the preliminary injunction was merely exercising its discretion; for the Court of Appeals obviously was also exercising its discretion when it rendered its original Decision granting the preliminary injunction.

007 E.Y. Industrial Sales v Shen Dar

G.R. No. 184850

TOPIC: First to file rule; Prior and Continuous User

PONENTE: Justice VelascoAUTHOR: Dann. M.

FACTS:

1.EYIS is a domestic corporation engaged in the production, distribution and sale of air compressors and other industrial tools and equipment.[5]

2.Petitioner Engracio Yap is the Chairman of the Board of Directors of EYIS.[6]

3.Respondent Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture of air compressors.[7]

4.Both companies claimed to have the right to register the trademark VESPA for air compressors.

5.From 1997 to 2004, EYIS imported air compressors from Shen Dar through sales contracts. In the Sales Contract dated April 20, 2002,[8] for example, Shen Dar would supply EYIS in one (1) year with 24 to 30 units of 40-ft. containers worth of air compressors identified in the Packing/Weight Lists simply as SD-23, SD-29, SD-31, SD-32, SD-39, SD-67 and SD-68. In the corresponding Bill of Ladings, the items were described merely as air compressors.[9] There is no documentary evidence to show that such air compressors were marked VESPA.

6.On June 9, 1997, Shen Dar filed Trademark Application with the IPO for the mark VESPA, Chinese Characters and Device for use on air compressors and welding machines.[10]

7.On July 28, 1999, EYIS filed Trademark Application also for the mark VESPA, for use on air compressors.[11]

8.On January 18, 2004, the IPO issued COR No. 4-1999-005393 in favor of EYIS.[12] Thereafter, on February 8, 2007, Shen Dar was also issued COR No. 4-1997-121492.[13]

9.In the meantime, on June 21, 2004, Shen Dar filed a Petition for Cancellation of EYIS COR with the BLA.[14] In the Petition, Shen Dar primarily argued that the issuance of the COR in favor of EYIS violated Section 123.1 paragraphs (d), (e) and (f) of Republic Act No. (RA) 8293, otherwise known as the Intellectual Property Code (IP Code), having first filed an application for the mark. Shen Dar further alleged that EYIS was a mere distributor of air compressors bearing the mark VESPA which it imported from Shen Dar. Shen Dar also argued that it had prior and exclusive right to the use and registration of the mark VESPA in the Philippines under the provisions of the Paris Convention.[15]

10.In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true owners of the mark VESPA being the sole assembler and fabricator of air compressors since the early 1990s. They further alleged that the air compressors that Shen Dar allegedly supplied them bore the mark SD for Shen Dar and not VESPA. Moreover, EYIS argued that Shen Dar, not being the owner of the mark, could not seek protection from the provisions of the Paris Convention or the IP Code.[16]

11.BLA = in favor of EYIS.

12.IPO = affirmed.

13.CA= reversed. The IPO failed to properly apply the provisions of Sec. 123.1(d) of RA 8293, which prohibits the registration of a trademark in favor of a party when there is an earlier filed application for the same mark. Shen Dar should be considered to have prior use of the mark based on the statements made by the parties in their respective Declarations of Actual Use. EYIS is a mere importer of the air compressors with the mark VESPA as may be gleaned from its receipts which indicated that EYIS is an importer, wholesaler and retailer, and therefore, cannot be considered an owner of the mark.[22]

14.Hence, this appeal.

ISSUE: Whether EYIS is the true owner of the mark VESPA

RA 8293 espouses the first-to-file rule as stated under Sec. 123.1(d) which states:

Section 123. Registrability. - 123.1. A mark cannot be registered if it:

x x x x

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

(i) The same goods or services, or

(ii) Closely related goods or services, or

(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion. (Emphasis supplied.)

Under this 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 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.

Sec. 134 of the IP Code provides that any person who believes that he would be damaged by the registration of a mark x x x may file an opposition to the application. The term any person encompasses the true owner of the mark. the prior and continuous user.

Notably, the Court has ruled that the prior and continuous use of a mark may even overcome the presumptive ownership of the registrant and be held as the owner of the mark. As aptly stated by the Court in Shangri-la International Hotel Management, Ltd. v. Developers Group of Companies, Inc.:[37]

Registration, without more, does not confer upon the registrant an absolute right to the registered mark. The certificate of registration is merely a prima facie proof that the registrant is the owner of the registered mark or trade name. Evidence of prior and continuous use of the mark or trade name by another can overcome the presumptive ownership of the registrant and may very well entitle the former to be declared owner in an appropriate case.

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.

By itself, registration is not a mode of acquiring ownership. When the applicant is not the owner of the trademark being applied for, he has no right to apply for registration of the same. Registration merely creates a prima facie presumption of the validity of the registration, of the registrants ownership of the trademark and of the exclusive right to the use thereof. Such presumption, just like the presumptive regularity in the performance of official functions, is rebuttable and must give way to evidence to the contrary.

Here, the incontrovertible truth, as established by the evidence submitted by the parties, is that EYIS is the prior user of the mark. The exhaustive discussion on the matter made by the BLA sufficiently addresses the issue:

More importantly, the private respondents prior adoption and continuous use of the mark VESPA on air compressors is bolstered by numerous documentary evidence consisting of sales invoices issued in the name of respondent EY Industrial and Bills of Lading. (Exhibits 4 to 375). Sales Invoice No. 12075 dated March 27, 1995 antedates petitioners date of first use in January 1, 1997 indicated in its trademark application filed in June 9, 1997 as well as the date of first use in June of 1996 as indicated in the Declaration of Actual Use submitted on December 3, 2001 (Exhibit 385). The use by respondent-registrant in the concept of owner is shown by commercial documents, sales invoices unambiguously describing the goods as VESPA air compressors. Private respondents have sold the air compressors bearing the VESPA to various locations in the Philippines, as far as Mindanao and the Visayas since the early 1990s. We carefully inspected the evidence consisting of three hundred seventy one (371) invoices and shipment documents which show that VESPA air compressors were sold not only in Manila, but to locations such as Iloilo City, Cebu City, Dumaguete City, Zamboanga City, Cagayan de Oro City, Davao City to name a few. There is no doubt that it is through private respondents efforts that the mark VESPA used on air compressors has gained business goodwill and reputation in the Philippines for which it has validly acquired trademark rights. Respondent EY Industrials right has been preserved until the passage of RA 8293 which entitles it to register the same. x x x[38]

On the other hand, Shen Dar failed to refute the evidence cited by the BLA in its decision. More importantly, Shen Dar failed to present sufficient evidence to prove its own prior use of the mark VESPA. We cite with approval the ruling of the BLA:

[Shen Dar] avers that it is the true and rightful owner of the trademark VESPA used on air compressors. The thrust of [Shen Dars] argument is that respondent E.Y. Industrial Sales, Inc. is a mere distributor of the VESPA air compressors. We disagree.

This conclusion is belied by the evidence. We have gone over each and every document attached as Annexes A, A 1-48 which consist of Bill of Lading and Packing Weight List. Not one of these documents referred to a VESPA air compressor. Instead, it simply describes the goods plainly as air compressors which is type SD and not VESPA. More importantly, the earliest date reflected on the Bill of Lading was on May 5, 1997. (Annex A-1). [Shen Dar] also attached as Annex B a purported Sales Contract with respondent EY Industrial Sales dated April 20, 2002. Surprisingly, nowhere in the document does it state that respondent EY Industrial agreed to sell VESPA air compressors. The document only mentions air compressors which if genuine merely bolsters respondent Engracio Yaps contention that [Shen Dar] approached them if it could sell the Shen Dar or SD air compressor. (Exhibit 386) In its position paper, [Shen Dar] merely mentions of Bill of Lading constituting respondent as consignee in 1993 but never submitted the same for consideration of this Bureau. The document is also not signed by [Shen Dar]. The agreement was not even drafted in the letterhead of either [Shen Dar] nor [sic] respondent registrant. Our only conclusion is that [Shen Dar] was not able to prove to be the owner of the VESPA mark by appropriation. Neither was it able to prove actual commercial use in the Philippines of the mark VESPA prior to its filing of a trademark application in 9 June 1997.[39]

As such, EYIS must be considered as the prior and continuous user of the mark VESPA and its true owner. Hence, EYIS is entitled to the registration of the mark in its name.

WHEREFORE, the petition is hereby GRANTED. The CAs February 21, 2008 Decision and October 6, 2008 Resolution in CA-G.R. SP No. 99356 are hereby REVERSED and SET ASIDE. The Decision dated May 25, 2007 issued by the IPO Director General in Inter Partes Case No. 14-2004-00084 and the Decision dated May 29, 2006 of the BLA Director of the IPO are hereby REINSTATED.

FREDCO MANUFACTURING CORPORATION, petitioner, vs. PRESIDENT AND FELLOWS OF HARVARD COLLEGE (HARVARD UNIVERSITY), respondents.

DOCTRINE:

Section 4(a) of R.A. No. 166 prohibits the registration of a mark which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs x x x.

Under Article 8 of the Paris Convention, as well as Section 37 of R.A. No. 166, 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.

Section 123.1(e) of R.A. No. 8293 now states that a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, cannot be registered by another in the Philippines.

Section 123.1(e) does not require that the well-known mark be used in commerce in the Philippines but only that it be well-known in the Philippines.

While under the territoriality principle a mark must be used in commerce in the Philippines to be entitled to protection, internationally well-known marks are the exceptions to this rule.

FACTS:

1)Fredco Manufacturing Corporation (Fredco) was a domestic corporation. Its predecessor-in-interest was known as New York Garments Manufacturing & Export Co., Inc. (New York).

2)On 24 January 1985, New York Garments filed for trademark registration of the mark Harvard for goods under Class 25 of the Nice International Classification of Goods and Services. A Certificate of Registration was issued on 12 December 1988, with a 20-year term subject to renewal at the end of the term.

3)On 25 November 1993, Harvard University was issued Trademark Registration No. 56561 for Harvard Veritas Shield Design for goods and services in Classes 16, 18, 21, 25 and 28 (decals, tote bags, serving trays, sweatshirts, t-shirts, hats and flying discs) of the Nice International Classification of Goods and Services.

4)In March 2002, Harvard University discovered Fredcos website www.harvard-usa.com. The website advertises and promotes the brand name Harvard Jeans USA without Harvard Universitys consent. The websites main page shows an oblong logo bearing the mark Harvard Jeans USA, Established 1936, and Cambridge, Massachusetts. [Please note that Fredco was also manufacturing these logos and actually placing them on garments which it manufactured]

5)On 20 April 2004, Harvard University filed an administrative complaint against Fredco before the IPO for trademark infringement and/or unfair competition with damages.

6)On 10 August 2005 Fredco filed a Petition for Cancellation of Registration No. 56561 before the Bureau of Legal Affairs of the Intellectual Property Office (IPO) against Harvard University. Fredco filed this despite the fact that his registration had already been cancelled on 30 July 1998 when it had failed to file the required affidavit of use/non-use for the fifth anniversary of the marks registration.

7)The 22 December 2006 decision of the Bureau of Legal Affairs (BLA) of the IPO cancelled Harvard Universitys registration of the mark Harvard under Class 25. Harvard then appealed to Office of the Director General of the IPO. And the Director General reversed the decision of the BLA.

8)Fredco appealed to CA, but CA affirmed the decision of the Director General and even ruled that Harvard University was able to substantiate that it appropriated and used the marks Harvard and Harvard Veritas Shield Symbol in Class 25 way ahead of Fredco and its predecessor New York Garments.

9)Fredco appealed to the SC.

ISSUE: Who has a better right over the mark Harvard? Answer: Harvard University

HELD: There are two compelling reasons why Fredcos petition must fail.

First, Fredcos registration of the mark Harvard and its identification of origin as Cambridge, Massachusetts falsely suggest that Fredco or its goods are connected with Harvard University, which uses the same mark Harvard and is also located in Cambridge, Massachusetts. This can easily be gleaned from the following oblong logo of Fredco that it attaches to its clothing line.

Fredcos registration of the mark Harvard should not have been allowed because Section 4(a) of R.A. No. 166 prohibits the registration of a mark which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs x x x.

Fredco offered no explanation to the Court of Appeals or to the IPO why it used the mark Harvard on its oblong logo with the words Cambridge, Massachusetts, Established in 1936, and USA. Fredco now claims before this Court that it used these words to evoke a lifestyle or suggest a desirable aura of petitioners clothing lines. Fredcos belated justification merely confirms that it sought to connect or associate its products with Harvard University, riding on the prestige and popularity of Harvard University, and thus appropriating part of Harvard Universitys goodwill without the latters consent.

Second, the Philippines and the United States of America are both signatories to the Paris Convention for the Protection of Industrial Property (Paris Convention).

Articles 6bis and 8 of the Paris Convention state:

ARTICLE 6bis

(i) The countries of the Union undertake either administratively if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration and to prohibit the use of a trademark which constitutes a reproduction, imitation or translation, liable to create confusion or a mark considered by the competent authority of the country as being already the mark of a person entitled to the benefits of the present Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.

ARTICLE 8

A trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark. (Emphasis supplied)

The Philippines is obligated to assure nationals of countries of the Paris Convention that they are afforded an effective protection against violation of their intellectual property rights in the Philippines in the same way that their own countries are obligated to accord similar protection to Philippine nationals.

Article 8 of the Paris Convention has been incorporated in Section 37 of R.A. No. 166. 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 latters consent.

Section 123.1(e) of R.A. No. 8293 now categorically states that a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, cannot be registered by another in the Philippines. Section 123.1(e) does not require that the well-known mark be used in commerce in the Philippines but only that it be well-known in the Philippines. To be protected therefore all that is required is that the mark is well-known internationally and in the Philippines for identical or similar goods, whether or not the mark is registered or used in the Philippines.

While under the territoriality principle a mark must be used in commerce in the Philippines to be entitled to protection, internationally well-known marks are the exceptions to this rule.

In Mirpuri, 318 SCRA 516 (1999), the Court ruled that the essential requirement under Article 6bis of the Paris Convention is that the trademark to be protected must be well-known in the country where protection is sought. The Court declared that the power to determine whether a trademark is well-known lies in the competent authority of the country of registration or use. The Court then stated that the competent authority would either be the registering authority if it has the power to decide this, or the courts of the country in question if the issue comes before the courts.

-----End-----

Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, which implement R.A. No. 8293, provides:

Rule 102. Criteria for determining whether a mark is well-known. In determining whether a mark is well-known, the following criteria or any combination thereof may be taken into account:

a)the duration, extent and geographical area of any use of the mark, in particular, the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;

b)the market share, in the Philippines and in other countries, of the goods and/or services to which the mark applies;

c)the degree of the inherent or acquired distinction of the mark;

d)the quality-image or reputation acquired by the mark;

e)the extent to which the mark has been registered in the world;

f)the exclusivity of registration attained by the mark in the world;

g)the extent to which the mark has been used in the world;

h)the exclusivity of use attained by the mark in the world;

i)the commercial value attributed to the mark in the world;

j)the record of successful protection of the rights in the mark;

k)the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and

l)the presence or absence of identical or similar marks validly registered for or used on identical or similar goods or services and owned by persons other than the person claiming that his mark is a well-known mark. (Emphasis supplied)

04 COFFEE PARTNERS, INC., Petitioner, vs. SAN FRANCISCO COFFEE & ROASTERY, INC., Respondent.

G.R. No. 169504, March 3, 2010

PONENTE: CARPIO, J.:

NATURE: petition for review

AUTHOR: Loi La Chica

NOTES:

FACTS:

1.Coffee Partners, Inc. is a local corporation engaged in the business of establishing and maintaining coffee shops in the country. It registered with the Securities and Exchange Commission (SEC) in January 2001.

2.It has a franchise agreement with Coffee Partners Ltd. (CPL), a business entity organized and existing under the laws of British Virgin Islands, for a non-exclusive right to operate coffee shops in the Philippines using trademarks designed by CPL such as "SAN FRANCISCO COFFEE."

3.San Francisco Coffee & Roastery is a local corporation engaged in the wholesale and retail sale of coffee. It registered with the SEC in May 1995. It registered the business name "SAN FRANCISCO COFFEE & ROASTERY, INC." with the DTI in June 1995. It built a customer base that included Figaro Company, Tagaytay Highlands, Fat Willys, and other coffee companies.

4.1998 - R formed a joint venture company with Boyd Coffee USA under the company name Boyd Coffee Company Philippines, Inc. (BCCPI). BCCPI engaged in the processing, roasting, and wholesale selling of coffee. Respondent later embarked on a project study of setting up coffee carts in malls and other commercial establishments in Metro Manila.

5.June 2001 - respondent discovered that petitioner was about to open a coffee shop under the name "SAN FRANCISCO COFFEE" in Libis, QC

6.It caused confusion in the minds of the public as it bore a similar name and it also engaged in the business of selling coffee.

7.R sent a letter to petitioner demanding that the latter stop using the name "SAN FRANCISCO COFFEE." Respondent also filed a complaint with the BLA-IPO for infringement and/or unfair competition with claims for damages.

8.P answered:

-Denied the allegations in the complaint

-Filed with the IPO applications for registration of the mark "SAN FRANCISCO COFFEE & DEVICE" for class 42 in 1999 and for class 35 in 2000

-Maintained its mark could not be confused with respondents trade name because of the notable distinctions in their appearances

-Argued that R stopped operating under the trade name "SAN FRANCISCO COFFEE" when it formed a joint venture with Boyd Coffee USA.

-R did not cite any specific acts that would lead one to believe petitioner had, through fraudulent means, passed off its mark as that of R, or that it had diverted business away from respondent.

9.Mr. David Puyat, president of Coffee Partners, testified that the coffee shop in Libis, Quezon City opened sometime in June 2001 and that another coffee shop would be opened in Glorietta Mall, Makati City. It was pursuant to a franchise agreement executed in January 2001 with CPL, a British Virgin Island Company owned by Robert Boxwell.

10.Mr. Boxwell attested that the coffee shop "SAN FRANCISCO COFFEE" has branches in Malaysia and Singapore. He added that he formed CPL in 1997 along with two other colleagues, Shirley Miller John and Leah Warren, who were former managers of Starbucks Coffee Shop in the United States. He said they decided to invest in a similar venture and adopted the name "SAN FRANCISCO COFFEE" from the famous city in California where he and his former colleagues once lived and where special coffee roasts came from.

11.BLA-IPO: Ps trademark infringed on respondents trade name.

-The right to the exclusive use of a trade name with freedom from infringement by similarity is determined from priority of adoption: (Respondent registered in 1995, Petitioner registered in 2001 in the Ph. and 1997 in other countries)

-R did not abandon the use of its trade name, continuously used its trade name in connection with the purpose for which it was organized

-R continued making plans and doing research on the retailing of coffee and the setting up of coffee carts

-Use of the trademark "SAN FRANCISCO COFFEE" will likely cause confusion because of the exact similarity in sound, spelling, pronunciation, and commercial impression which is the dominant portion of Rs trade name and Ps trademark.

-No significant difference resulted even with a diamond-shaped figure with a cup in the center in P's trademark because greater weight is given to words the medium consumers use in ordering coffee products.

-P is absolved from unfair competition It adopted the trademark because it was authorized by its franchisor. No evidence of intent to defraud on the part of P.

-Rs claim of actual damages (profit loss) dismissed.

12.Both parties moved for partial reconsideration.

-P: protested the finding of infringement

-R: questioned the denial of actual damages.

13.BLA-IPO: denied both

14.ODG-IPO:

-Reversed BLA-IPO

-R had stopped using its trade name after it entered into a joint venture with Boyd Coffee USA in 1998

-P continuously used the trademark since June 2001 when it opened its first coffee shop in Libis, QC.

-Used in good faith and a prior user had stopped using such

15.CA: Decision of Office of the Director Gen. IPO set aside. Reinstated the BLA-IPO. Denied Coffee Partners MR and San Franciscos motion for partial reconsideration.

ISSUE

Whether petitioners use of the trademark "SAN FRANCISCO COFFEE" constitutes infringement of respondents trade name even if the trade name is not registered with the IPO? YES

HELD

The petition has no merit. There is infringement of trade name. Republic Act No. 8293 (RA 8293) dispensed with registration of a trade name with the IPO as a requirement for the filing of an action for infringement. All that is required is that the trade name is previously used in trade or commerce in the Philippines.

RATIO:

1.The law protects trade names from infringement even if not registered with the IPO.

2.R never abandoned the use of its trade name as evidenced by its letter to petitioner demanding immediate discontinuation of the use of its trademark and by the filing of the infringement case. It continued to make plans and do research on the retailing of coffee and the establishment of coffee carts, which negates abandonment.

3.Petitioners trademark is confusingly similar to respondents trade name.

4.CA found that while R stopped using its trade name in its business of selling coffee, it continued to import and sell coffee machines, one of the services for which the use of the business name has been registered.

5.What constitutes infringement of an unregistered trade name (Prosource International, Inc. v. Horphag Research Management):

(1) The trademark being infringed is registered in the IPO; 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.

6.Clearly, a trade name need not be registered with the IPO before an infringement suit may be filed by its owner against the owner of an infringing trademark. All that is required is that the trade name is previously used in trade or commerce in the Philippines.

7.Section 22 of Republic Act No. 166, as amended, required registration of a trade name as a condition for the institution of an infringement suit. However, RA 8293, which took effect on 1 January 1998, has dispensed with the registration requirement.

8.In infringement cases, precedents must be evaluated in the light of each particular case.

9.Two tests in determining similarity and likelihood of confusion:

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 occurs. Exact duplication or imitation is not required. 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 consumers.

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 (focusing not only on the predominant words but also on the other features appearing on both marks in order that the observer may draw his conclusion whether one is confusingly similar to the other).

10.Ps "SAN FRANCISCO COFFEE" trademark is a clear infringement of respondents "SAN FRANCISCO COFFEE & ROASTERY, INC." trade name.

11.The descriptive words "SAN FRANCISCO COFFEE" are precisely the dominant features of respondents trade name. They are engaged in the same business of selling coffee, whether wholesale or retail. The likelihood of confusion is higher

12.R has acquired an exclusive right to the use of the trade name "SAN FRANCISCO COFFEE & ROASTERY, INC." since the registration of the business name with the DTI in 1995.

13.Geographic or generic words are not, per se, subject to exclusive appropriation. It is only the combination of the words "SAN FRANCISCO COFFEE," which is respondents trade name in its coffee business, that is protected against infringement

14.Law and equity considerations hold petitioner liable for infringement.

CASE LAW/DOCTRINE

NOTE

SEC. 165.2

(a) Notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties.

(b) In particular, any subsequent use of a trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed unlawful.

017 KABUSHI KAISHA ISETAN vs. IAC

TOPIC: TRADEMARK

PONENTE: GUTIERREZ, JR., J.:AUTHOR:

NOTES:

FACTS:

Petitioner Kabushi Kaisha Isetan is a foreign corporation organized and existing under the laws of Japan with business address at 14-1 Shinjuku, 3-Chrome, Shinjuku, Tokyo, Japan. It is the owner of the trademark "Isetan" and the "Young Leaves Design".

The petitioner alleges that it first used the trademark Isetan on November 5, 1936. It states that the trademark is a combination of "Ise" taken from "Iseya" the first name of the rice dealer in Kondo, Tokyo in which the establishment was first located and "Tan" which was taken from "Tanji Kosuge the First".

The petitioner claims to have expanded its line of business internationally from 1936 to 1974. The trademark "Isetan" and "Young Leaves Design" were registered in Japan covering more than 34 classes of goods. On October 3, 1983, the petitioner applied for the registration of "Isetan" and "Young Leaves Design" with the Philippine Patent Office under Permanent Serial Nos. 52422 and 52423 respectively.

Private respondent, Isetann Department Store, on the other hand, is a domestic corporation organized and existing under the laws of the Philippines with business address at 423-430 Rizal Avenue, Sta. Cruz, Manila, Philippines.

It claims that it used the word "Isetann" as part of its corporated name and on its products particularly on shirts in Joymart Department Store sometime in January 1979. The suffix "Tann" means an altar, the place of offering in Chinese and this was adopted to harmonize the corporate name and the corporate logo of two hands in cup that symbolizes the act of offering to the Supreme Being for business blessing.

On May 30, 1980 and May 20, 1980, the private respondent registered "Isetann Department Store, Inc." and Isetann and Flower Design in the Philippine Patent Office under SR. Reg. No. 4701 and 4714, respectively, as well as with the Bureau of Domestic Trade under Certificate of Registration No. 32020.

On November 28, 1980, the petitioner filed with the Phil. Patent Office two (2) petitions for the cancellation of Certificates of Supplemental Registration Nos. SR-4714 and SR-4701 stating among others that:

. . . except for the additional letter "N" in the word "Isetan", the mark registered by the registrant is exactly the same as the trademark ISETAN owned by the petitioner and that the young leaves registered by the registrant is exactly the same as the young leaves design owned by the petitioner.

The petitioner further alleged that private respondent's act of registering a trademark which is exactly the same as its trademark and adopting a corporate name similar to that of the petitioner were with the illegal and immoral intention of cashing in on the long established goodwill and popularity of the petitioner's reputation, thereby causing great and irreparable injury and damage to it (Rollo, p. 521). It argued that both the petitioner's and respondent's goods move in the same channels of trade, and ordinary people will be misled to believe that the products of the private respondent originated or emanated from, are associated with, or are manufactured or sold, or sponsored by the petitioner by reason of the use of the challenged trademark.

The petitioner also invoked the Convention of Paris of March 20, 1883 for the Protection of Industrial Property of which the Philippines and Japan are both members. The petitioner stressed that the Philippines' adherence to the Paris Convention committed to the government to the protection of trademarks belonging not only to Filipino citizens but also to those belonging to nationals of other member countries who may seek protection in the Philippines.

Meanwhile, the petitioner also filed with the Securities and Exchange Commission (SEC) a petition to cancel the mark "ISETAN" as part of the registered corporate name of Isetann Department Store, Inc. this petition was denied in a decision rendered by SEC's Hearing Officer, Atty. Joaquin C. Garaygay.

On appeal, the Commission reversed the decision of the Hearing Officer on February 25, 1986. It directed the private respondent to amend its Articles of Incorporation within 30 days from finality of the decision.

On April 15, 1986, however, respondent Isetann Department Store filed a motion for reconsideration. And on September 10, 1987, the Commission reversed its earlier decision dated February 25, 1986 thereby affirming the decision rendered by the Hearing Officer on May 17, 1985. The Commission stated that since the petitioner's trademark and tradename have never been used in commerce on the petitioner's products marketed in the Philippines, the trademark or tradename have not acquired a reputation and goodwill deserving of protection from usurpation by local competitors.

On January 24, 1986, the Director of Patents after notice and hearing rendered a joint decision in Inter Partes Cases Nos. 1460 and 1461, dismissing the petition.

On appeal, the IAC dismissed the appeal on the ground that it was filed out of time.

ISSUE(S): whether or not ISETANN Violates the Philippine Trademark Law.

HELD:

1.NO,

RATIO:

A fundamental principle of Philippine Trademark Law is that actual use in commerce in the Philippines is a pre-requisite to the acquisition of ownership over a trademark or a tradename.

The trademark Law, Republic Act No. 166, as amended, under which this case heard and decided provides:

SEC. 2. What are registrable.- Trademark, tradenames and service marks owned by persons, corporation, partnerships or associations domiciled in the Philippines and by persons, corporations, partnerships or associations domicided in any foreign country may be registered in accordance with the provisions of this Act: Provided, That said trademarks, tradenames, or service marks are actually in use in commerce and services not less than two months in the Philippines before the time the applications for registration are filed: And provided, further, That the country of which the applicant for registration is a citizen