1 IJFFU~F COP"

~iP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

GREEN CAB PIZZA HAUS and/or Appeal No.1 0-07-08 CHRISTOPHER DE LEON BAULA,

Appellant, IPV No. 10-2005-00025 For: Trademark Infringement Unfair Competition & Damages with Application for TRO and Preliminary Injunction

- versus ­

...El(I:L~j::':~l~;;~ x

~t:) '0 Go NOTICE OF DECISION

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Received by: Mc..f}0 On: {lib Time:

Office of the Director Bureau of Leg" Aft.l"

~"". ~ ~~ON LAYNO LAW OFFICES U~ 'l,: ~\\" (j\:ct>unsel for Appellant ~~ q~~\ Suite 208 Cityland Condominium 8 ~ No. 98 Sen. Gil Puyat Ave., Makati City

TECERO LAW OFFICES -~A qll(,/~ Co-Counsel for Appellee CTC Bldg., No. 2232 Roxas Blvd. Pasay City, Metro Manila

BENGZON NEGRE UNTALAN LAW FIRM

Counsel for Appellee 2nd Floor, SEDDCO Building Rada corner Legaspi Streets

Legaspi Village Makati City -"

t~ GREETINGS,I

ESTRELUTAB.ABELARDO Director Bureau of Legal Affairs Intellectual Property Office, Makati City

IP PHILIPPINES LIBRARY (jj)/) r/t~y Documentation, Information ffechnology Transfer Bureau Intellectual Property Office, Makati City

BENGZON PCEGRE ~TALAM IHIELLECTUAL 'ROPERTY ATTlRN9S

SEP 1 6 2008 ~EC£IV(D BY: (('fA.- VP1 FAX/MAIL~

Please be informed that on 15 September 2008, the Office of the Director General rendered a DECISION in the above-titled case (copy attached).

Makati City, 15 September 2008.

Very truly yours, I I 1 j 1

! j Attorney IV

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l Republic of the Philippines J

1 INTELLECTUAL PROPERTY OFFICE

;ERTIFIED TRUE COpy

YA~JOR/~JN M. PESCASIO RECORDS OFFICER'

~ ROBERT NEREO B. SAMSON

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~iP INTELLECTUAL PROPERTY PHILIPPINES

! ~ I OFFICE OF THE DIRECTOR GENERAL l -j

j GREEN CAB PIZZA HAUS and/or I CHRISTOPHER DE LEON BAULA, I Appellant,

I - versus ­

I YELLOW CAB FOOD CORP., Appellee.

l X--------------------------------------------------XI

Appeal No. 10-07-08

IPV No. 10-2005-00025 For: Trademark Infringement Unfair Competition & Damages with Application for TRO and Preliminary Injunction

1 NOTICE OF DECISION .1

AMON LAYNO LAW OFFICES 1 j Counsel for Appellant 1j Suite 208 Cityland Condominium 8 j No. 98 Sen. Gil Puyat Ave., Makati City 1

I 1 TECERO LAW OFFICES

Co-Counsel for Appellee CTC Bldg., No. 2232 Roxas Blvd. Pasay City, Metro Manila

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I BENGZON NEGRE UNTALAN LAW FIRM Counsel for Appellee 2nd Floor, SEDDCO Building Rada corner Legaspi Streets Legaspi Village Makati City

GREETINGS:

ESTRELLITA B. ABELARDO Director Bureau of Legal Affairs Intellectual Property Office, Makati City

IP PHILIPPINES LIBRARY Documentation, Information & Technology Transfer Bureau Intellectual Property Office, Makati City

I Please be informed that on 15 September 2008, the Office of the Director General rendered a DECISION in the above-titled case (copy attached).

1 J Makati City, 15 September 2008.

1 Very truly yours,

~ ROBERT NEREO B. SAMSON Attorney IV

Republic of the Philippines INTELLECTUAL PROPERTY OFFICE

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1 ~iP INTELLECTUAL PROPERTY PHILIPPINES

~ ! OFFICE OF THE DIRECTOR GENERAL

jGREEN CAB PIZZA HAUS and/or Appeal No. 10-07-08

CRISTOPHER DE LEON BAULA, ~ t

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Appellant, IPV No. 10-2005-00025

For: Trademark Infringement -versus- Unfair Competition & Damages

with Application for TRO and YELLOW CAB FOOD CORP., Preliminary Injunction

Appellee. x-------------------------------------------x

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11 DECISION I 1

GREEN CAB PIZZA HAUS and/or CRISTOPHER DE LEON BAULA

I("Appellant") appeals the Decision No. 2007-07, dated 25 May 2007, of the Director of the Bureau of Legal Affairs ("Director"). The Director held the Appellants liable for infringement and unfair competition for using the mark "GREEN CAB" in their

1 j pizza business.

J Records show that the Appellee filed on 19 July 2005 a "COMPLAINT"· ~

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against the Appellants alleging the following:

1. It is the owner of the famous service mark "YELLOW CAB PIZZA -~

CO.", registered under Cert. of Reg. No. 4-2001-0073012, and operates

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a chain of pizza restaurants by itself and through the granting of franchises;

2. Sometime in April 2005, it came to its attention that the Appellant is operating a pizza restaurant under the service mark "GREEN CAB PIZZA HAUS" - a colorable imitation of YELLOW CAB PIZZA CO.;

3. There is substantial likelihood that Appellant's colorable imitation of the Appellee's mark on identical goods and its use of the "checkerboard" design in its flyers and advertisements will cause confusion, or mistake or deceive the consuming public into believing that the Appellant's goods are those of the Appellee;

4. The Appellant's use of its mark is likely to cause confusion and mistake, and to deceive the public as to the affiliation, connection, or

For trademark infringement, unfair competition and damages with Application for Temporary Restraining Order and Preliminary Injunction, 2 Issued on 21 May 2004.

Republic of tbe Pbilippines INTELLECTUAL PROPERTY OFFICE

association of the Appellant to the Appellee, especially as regards the origin, sponsorship or approval of the Appellant's goods by the Appellee, to the latter's damage;

5. Not only is there a likelihood of confusion as to the association of the Appellant and the Appellee; there has been several instances of actual confusion where the Appellee has received telephone inquiries on franchising where the callers were obviously confusing the Appellant with Appellee;

6. The Appellee is engaged in franchising and the apparent confusion of the public as regards the relationship of the Appellee and the Appellant not only dilutes the goodwill of the Appellee's mark but shows the Appellant's malicious intent to ride in on the established goodwill of the Appellee for its own benefit;

7. The Appellant's representatives have been misrepresenting to the public that it is a "sister company" of the Appellee;

8. The Appellant infringed the intellectual property rights of the Appellee, when it used the mark GREEN CAB PIZZA HAUS without the Appellee's consent and authority and advertised, sold and offered for sale products identical to those of the Appellee;

9. Due to considerable losses incurred by the Appellee in terms of lost revenue and dilution of its service mark since at least 17 May 2002 or for a period of more than three (3) years, it suffered actual damages in the form of lost income, among others, that although incapable of exact pecuniary estimation, may nevertheless be offset by a reasonable amount of damages, aggregating in the amount of at least PhP4,000,000;

10. Because of the Appellant's continuous use of its mark even during the pendency of this case, the Appellee stands to suffer further damages in the form of lost income of at least Php 100,000 a month unless the Appellant is enjoined from using its mark;

11. Due to the considerable dilution of and the fact that the Appellee's service mark has been and continues to be tarnished, the Appellee has suffered moral damages that although incapable of exact pecuniary estimation, may nevertheless be offset by a reasonable amount of damages aggregating in the amount of at least PhP4,000,000;

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12. The Appellant's contumacious refusal to desist from his infringing activities, despite due notice and warning from the Appellee is causing immense losses and distress to the Appellee, exemplary damages of at least Phpi.ooo.ooo must be levied against the Appellant as a deterrence; and

13. As the Appellee was compelled to seek the instant administrative relief, necessitating the retention of the services of counsel, attorney's fees of at least Phl'i.ooo.ooo are likewise prayed for.

The Appellant filed on IS August 2005 an "ANSWERWITH COMPULSORY COUNTERCLAIM" alleging the following in defense:

1. The Appellant did not in any way infringe the rights of the Appellee and did not engage in any unfair competition;

2. The Appellant registered on 17 May 2002 his single proprietor business with the Department of Trade and Industry under the name and style GREEN CAB PIZZA HAUS and had used this business name since then up to the present;

3. The Appellant engaged his new and very small business in good faith and personally processes his pizza products and personally deliver the orders of his customers to their houses and has no other personnel to help him except his wife;

4. The Appellant has no intention to engage in unfair competition with the Appellee nor to infringe the rights of the Appellee because he was just very new to the business and a very small entrepreneur, and at the time, Yellow Cab Pizza is not yet heard in the Cavite area and what was established then were the Dominos Pizza and the Little Ceasars Pizza;

5. There is no basis in fact and in law of the Appellee's prayer for Temporary Restraining Order and Preliminary Injunction as the Appellee has no existing rights to be protected; and

6. There could be no great and irreparable damage and injury to the Appellee even if the Appellant will continue to use the business name GREEN CAB PIZZA HAUS.

The Appellee submitted the following as its evidence:

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1. Affidavit of Henry Lee III, dated 20 March 2006;3

2. Certificate of Incorporation of the Appellee;4

3. Copy of Lease Contract between RS Queensland and Development Corporation and the Appellee, executed on 31 May 2000;5

4. Copies of various certificates of trademark registration and trademark applications for the mark YELLOW CAB;6

5. Copies of flyers, bookmarks, and advertising materials and documents and the corresponding invoices and receipts of the costs of advertisement of the Appellee's pizza products under the name/mark YELLOW CAB;7

6. Copy of internet message thread with YELLOW CAB as the topic of discussion."

7. Statements of Account and official receipts issued by the counsel for the Appellee for handling the instant case; 9

8. Affidavit of Daniel Yaptangco, Sr., dated 02 June 2006;10 and

9. Questionnaire Forms for the "Amazing Scooter Race"."

On the other hand, the Appellants' evidence consists of the following:

1. Questionnaire Forms for the "Amazing Scooter Race":"

2. Affidavit of Cristopher D. Baula, executed on 09 September 2005;13

3. Certifications (one is undated while the other one was issued on 29

September 2005) by suppliers to show that they are supplying the raw materials used by the Appellants since 2001;14

Exhibits "A" to "A-4". Exhibit "B". Exhibits "C" to "C-IO'. Exhibits "0" to "I", inclusive of sub-markings. Exhibits "J" to 'W", inclusive of sub-markings. Exhibits "X" to "X-I". Exhibits 'Y" to "2", inclusive of sub-markings.

10 Exhibits "AA" to "AA-2". 11 Exhibits "BB" to "B-1". 12 Exhibits "I" to "I-A". 13 Exhibits "2" to "2-B". 14 Exhibits "3" and "4", inclusive of sub-markings.

All

4. Certification dated 11 May 2006 issued by Office of the Barangay Council, Brgy. Pinagkaisahan, Makati City to show that there is no outlet of Green Cab Pizza located in that Barangay:"

5. Affidavit of Melody Baula, executed on 12 September 2005;16

6. Certificate of Recognition issued by the Trade Information Marketing and Exhibitions, Inc. for Appellants' joining the Asia food Expo 2005;17

7. Invitation Letter from the Philippine Franchise Association, dated 31 July 2006 for the Appellants to be a member."

8. Advertising magazines, photographs, promotional materials and acknowledgment receipts of the Appellants' products under the name/mark GREEN CAB;19

9. Affidavit of Ricardo T. Dalumpines, executed on 20 September 2005;20

10. Affidavit of Cristina T. Relcopan, executed on 04 November 2006;21

11. Tabulation of expenses incurred on attorneys fees and incidental expenses incurred by the Appellants;" and

12. Attorney's Fees Agreements and receipts for payment of Transcript of Stenographic Notes by the Appellants."

After the appropriate proceedings, the Director rendered her decision, the dispositive portion ofwhich reads, as follows:

"WHEREFORE, in view of the foregoing, this Bureau finds that Respondents' acts of using a mark that constitutes a colorable imitation of Complainant's service mark for use on the same pizza business to be acts of infringement and unfair competition against Complainant. Respondents are hereby permanently enjoined to cease and desist from using the subject mark 'GREEN CAB' or any variations thereof in its pizza business. Respondents are likewise, ordered to deliver to this Bureau for destruction any and all labels, signs, prints, packages, wrappers, receptacles, and advertisements in the possession of the Respondents, bearing the aforesaid mark 'GREEN CAB' within fifteen (15) days from receipt of this Decision and ordering Respondents to pay Complainant:

15 Exhibits "5" to "5-A". 16 Exhibits "6" to "6-A". 17 Exhibit "7". 18 Exhibits "10" to "IO-A". 19 Exhibits "8" to "9" and "l l" to "24", inclusive of sub-markings. 20 Exhibits "25" to "25-C". 2\ Exhibits "26" to "26-A". 22 Exhibits "27" to "27-D". 23 Exhibits "28" to "28-X".

1. the amount of P 300,000.00 as temperate damages; and 2. the amount of P 100,000.00 as attorney's fees.

SO ORDERED."

On 28 June 2007, the Appellant filed a "MEMORANDUM OF APPEAL". In his appeal, the Appellant contends that:

1. he did not commit infringement as the competing marks are different from each other in both their dominant features and in their entire appearance;

2. the Appellee has no right to claim ownership over the checker board design as this is not included in its registered mark, and that even if it could claim registrable right over the said design, what he is using in its flyers are black and white stripes;

3. the goodwill the Appellee claims to possess is not existent at the time the Appellant started its business and used the name Greencab;

4. he has no intention of passing off his products as that of the Appellee; and

S. the award of damages to the Appellee is unwarranted and has no legal basis whatsoever.

The Appellee filed its "COMMENT (on Respondents-Appellants' 'Memorandum ofAppeal' dated 26 June 2007)" on 27 July 2007, asserting that:

1. the likelihood of confusion is immediately apparent from the Appellant's use of a mark which is confusingly similar to and a colorable imitation of the Appellee's mark;

2. the Appellant's use of his mark on directly competitive products and services creates confusion of goods and services as well as of business by suggesting a connection or affiliation between the parties;

3. it has sufficiently established goodwill over its pizza business through its use of its mark, aggressive advertising, promotion and expansion;

4. the Appellant's belated use of Green Cab is tainted with bad faith and an obvious indication of its desire to get a free ride on the goodwill associated exclusively with the Appellee's famous service mark; and

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5. the Director was correct in awarding the Appellee temperate damages and attorneys.

The principal issue in this case is whether or not the Appellant is liable for infringement and/or unfair competition. In this regard, Sections 155 and 168 of RA 8293 ("IP Code"Y4 provide:

"SEC.155. Remedies; Infringement.- Any person who shall, without the consent of the owner of the registered mark:

"155.1. Use in any 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 whatever there is actual sale of goods or services using the infringing material."

"SEC.168. Unfair Competition, Rights, Regulations and Remedies.- 168.1. A person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights.

"168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefore.

"168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the

"AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES."

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devices or words thereon, or in any other feature of their appearance, which would be I likely to influence purchasers to believe that the goods offered are those of a I

i•manufacturer or dealer, other than the actual manufacturer or dealer, or who

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otherwise clothes the goods with such appearance as shall deceive the public and I defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other I means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or f

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to I

~ discredit the goods, business or services of another.

"168+ The remedies provided by Sections 156, 157 and 161 shall apply mutatis mutandis."

In McDonald's Corporation and McGeorge Food Industries, Inc. vs, L. C. Big Mak Burger, Inc., et al" the Supreme Court laid down the elements of trademark infringement, to wit:

"(1) the validity of plaintiffs mark; (2) the plaintiffs ownership of the mark; and (3) the use of the mark or its colorable imitation by the alleged infringer results in 'likelihood of confusion'. Of these, it is the element of likelihood of confusion that is the gravamen of trademark infringement."

Unfair competition, meanwhile, concerns the passing-off or attempting to pass-off the public the goods or business of one person as and for the goods or business of another. The concept is to give protection to a person who has earned goodwill on his goods, business or services. Unfair competition is a question of fact and the determination of the existence thereof rests on the issue of whether or not, as a matter of fact, a defendant is, by conduct, passing off defendant's goods as plaintiffs goods or defendant's business as plaintiffs business. The universal test is whether the public is likely to be deceived." In unfair competition, fraudulent intent is essential.27

In this regard, the validity of the Appellee's registered mark YELLOW CAB PIZZA CO. and its ownership of this mark are not disputed. The question is whether the Appellant's mark is a colorable imitation of the Appellee's that will result in the likelihood of confusion.

Accordingly, the Director's decision will be sustained if the evidence shows:

25 G. R. No. 143993, 18 Aug. 2004. 26 Alhambra Cigar and Cigarette Manufacturing Co. v. Pedro N. Mojica, G.R. No. 8937, 21 Mar. 1914. 27 Del Monte Corporation vs. Court ofAppeals, G. R. No. L-78325, 25 Jan. 1990.

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1. that the Appellee used its mark YELLOW CAB PIZZA CO. ahead of the Appellant's use of the mark GREEN CAB PIZZA HOUSE in pizza products and services, and

2. that the competing marks are confusingly similar.

The issue of which mark was used ahead of the other was well discussed by the Director, to wit:

"One essential factor that led to this Office to tilt the scales of justice in favor of Complainant is the latter's establishment of prior adoption of the mark or label. Priority in use and registration of a service mark is material in an action for infringement of trademark. An examination of the documentary evidence confirms Complainant's claim of prior use. Complainant was incorporated on January 18, 2000 by virtue of SEC registration No. 200000240 (Exhibit B, Complainant) and on the same year, Complainant applied for the registration of YELLOW CAB PIZZA CO & DEVICE as service mark with the Intellectual Property Office under Application Serial No. 4­2001-007301 and matured onto Certificate of Registration No. 4-2001-007301 on May 24, 2004 (Annex' A', Complainant). Complainant presented evidence of its early use of the words YELLO CAB as service mark with the presentation of the abovecited registration and incorporation. On its part, Respondent Christopher D. Baula, owner and operator of GREEN CAB PIZZAHAUS asserted prior use as well when it testified (sic):

ATTY. PINEDA: Can you read paragraph 2?

WITNESS: That sometimes January 2001 I formally started my own business under the name and style of Green Cab Pizza. Initially, I was the one who prepared my own pizza product and deliver it to the customer. When my own pizza business improved, I open branches and/or outlet in different places and we offered the business for franchise.

ATTY. PINEDA: When you said here 'I informally started my own business under the name and style Green Cab Pizza", what did you mean by informally started my own business?

WITNESS: Sa house kasi nags tart yan.

ATTY. PINEDA: In?

WITNESS: Block 15 Lot 14. Nagstart van sa bahay, ang wife ko ang gumagawa ng pizza. Ako yung ra-rider.

ATTY. PINEDA: So did you have any sign?

WITNESS: Wala, mga box. Green Cab and nakapangalan.

ATTY. PINEDA: On boxes?

WITNESS: Atsaka flyers?

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ATrY. PINEDA;

WITNESS:

ATrY. PINEDA:

WITNESS:

ATrY. PINEDA:

WITNESS:

That you prepared?

Hindi.

That you had...

Ano, binibili kasi naming sa Divisoria lang yun he, yung box. Tapos tinatatakan lang naming stamp pad na Green Cab Pizza. Tapos and flyers na ginagamit naming may Green Cab Pizza din.

When was this?

January 2001. [TSN, 02 October 2006, pp. 37-39).

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"Apparently to lend credence to this declaration and tending to establish the fact of prior use by Respondents is the subsequent testimony under oath of Respondent's wife, Melody Baula, who confirmed likewise the existence of Respondent's business in January 2001, to the effect that:

ATrY. PINEDA:

MS. WITNESS:

ATrY. PINEDA:

MS. WITNESS:

ATrY. PINEDA:

MS. WITNESS:

Nag-agree ka sa akin. Nung nagsimula kayon nung 2001, saan mo nilalagay... nagdidine-in ka doon... I withdraw my question. Saan kayo unang nagsimula ng business nyo?

Sa bahay po.

Sa'n ang address non?

Sa may Molino?

Ano'ng address?

Block 15, Lot 14, Flame Tree Street, BF El Grande Subdivision, Soldiers Hills 4, Bacoor, Cavite. [TSN, 06 October 2006, pp. 80-81].

"To present proof thereof, Mrs. Baula, presented pictures (Exhibits' 14-0', '14-E' and '14-F', Respondents) of the house:

ATrY. PINEDA:

WITNESS:

At present. Is there an advertising or promotional materials during the period, the 2001 where you alleged you started the business, from 2001 to 2004, or zooy?

Wala ho. 2001 ho kase, so nag-start kami ng asawa ko sa bahay, so may picture ho diyan na tala gang sa bahay lang. Tapos, 2002 ho nag-advertise kami. .. ah nag-start ho ang franchising naming... pero pre­franchise ho iyon, wala kaming hinihingi sa kanila. [TSN, 06 October 2006, p. 52].

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ATTY. LAYNO:

MS. WITNESS:

ATTY. LAYNO: For identification purposdes, your Honor, we respectfully requests that the pictures be marked as our Exhibits '14', '14-A', '14-B', '14-C', '14_D" '14-E', '14-F', '14-G', '14-H' and '14-1'... [TSN, 06 October 2006, p. 24].

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For identification purposes, your Honor, we respectfully request that the pictures, your Honor, be marked as our Exhibit' 13-B'... (markings)... You also handed to this representation, Madam Witness, several pictures of the store. What does these tells us about, Madam Witness?

So, ito po yung nagpapatunay na nung nag-start ho kami noong 2001, as in sa bahay, tapos nag-start ho akong magpa-franchise year 2002, so hindi pa ganoon kadveloped iyong Green Cab. Kung baga, unti-unti po naming dineveloped na mag-asawa. So, nagsimula ho sya sa bahay, hanggang nakapag-ano kami ng franchise sa labas, paunti-unti, hanggang sa nadeveloped ho naming yung ayos ng store na yon.

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"From the records, it appears that one of the pictures (Exhibit '14-E') bore the address of the house in a streamer with a GREEN CAB PIZZA signage at the rooftop. The printed letters in the streamer showed the name GREEN CAB PIZZA (first line), NOW OPEN (2nd line) and the address indicated on the third line as 'No.7 Don Posadas Ave. Don Juan Bayview' in complete contrast to the address as declared to be so, which in this case, is 'Block 15, Lot 14, Flame Tree Street, BF El Grande Subdivision, Soldiers Hills 4, Bacoor, Cavite'. This fact aroused suspicion of Respondent's spouses Christopher and Melody, direct testimonies as regards prior use on January 2001 of the mark GREEN CAB PIZZA. This Bureau now turns its attention to the other documentary evidence pertinent to show prior use but these are just bare assertions and self-serving:

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"Nowhere in all the aforementioned certifications (Exhibits' 3' and '4' including their sub-markings, Respondents) as issued by the two suppliers of GREEN CAB PIZZA HAUS showed concrete evidence of prior use or use if the name GREEN CAB PIZZAon January 2001. The suppliers therein only certified to the fact of their being suppliers of Respondents, nothing else. Not even one of the two suppliers was presented and appeared as witness for the Respondents or had been subjected to cross examination in order to test the credibility of their statement/s, if there is any, as regards prior use by Respondents of the mark GREEN CAB. This Bureau therefore concludes that Respondents failed miserably to show prior use. Notably, the use that this Bureau can reckon is the date of registration of Respondent's business name on May 17, 2002 with the Department of Trade and Industry (Exhibit' 2', Respondents) more than two (2) years from date of incorporation of YELLOW CAB FOD CORPORATION on January 18, 2000.',,8

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28 Decision, pp. 17-22.

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Reviewing the records, this Office noticed that the Director's finds support in the statement of the Appellant himself in his Answer to the Complaint. In page 13 of his Answer to the Complaint, Appellant stated:

"13. That on May 17, 2002, respondent Baula registered his single proprietorship business with the Department of Trade and Industry (DTI) under the name and style Green Cab Pizza Haus. After the approval of the DTI. respondent Baula used the said

Green Cab Pizza business name since then up to the present". (Underscoring supplied)

Thus, this statement further cast doubts on the Appellant's and his witnesses' claim that the Appellant has used the mark GREEN CAB PIZZA HAUS for pizza business as early as January 2001. The Answer was filed on 15 August 2005,

while Appellant's Affidavit and those of his witnesses were executed only starting in September 2005. It is emphasized that the Answer is verified and/or under oath.

~ For the foregoing reasons, it is reasonable to infer that the Appellant's claim of use of its mark in January 2001 is merely an afterthought, purposely designed as a matter of defense in this case.

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Going now to the question of whether the competing marks are confusingly similar, the marks are reproduced below for comparison.

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Appellant's mark Appellee's mark

This Office concurs with the findings of the Director, as follows:

"At the core of the issues presented before this forum is the appropriation of the words 'GREEN CAB' in Respondent's mark which is considered a colorable imitation of the dominant, essential and distinguishing features of Complainant's service mark, the dominant being the words 'YELLOWCAB'. 'PIZZA CO' forming part of Complainant's service mark and printed at the bottom of the label or just right below the very prominent and dominant YELLOW CAB are generic terms not capable of appropriation, which resulted in having this phrase disclaimed in the process to gain registration (Annex 'A', Complainant). The adoption by Respondents of a dominant portion of Complainant's service mark for use on identical goods constitutes an infringement of Complainant's trademark rights. x x x

"The choice of the color GREEN and used of a sliced pizza as device at the bottom of the label do not make Respondents' mark 'GREEN CAB PIZZA HAUS' any different, the marked similarities of the two labels are more evident and pronounced. Respondents cannot assert identity, by mere looking at the questioned mark, one can

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readily see that Respondents have indeed used and appropriated the dominant features of Complainant's service mark which in this case is the concept of combining a color with the word 'cab' to be used for non-descriptive articles of food products consisting of pizza, pasta and chicken. This word-combination becomes the source of confusion because nowhere in Respondents' label clearly indicates the origin or source of the products, corollary, it presents to pizza buyers the striking and illuminating similarities of the two labels x x X."Z9

Examining the features of the competing marks, it can be gleaned that notwithstanding the differences in their presentation, the dominant feature of the competing marks is the word "CAB", which is the accepted colloquial term for "taxi". In this regard, there is obviously no connection between the word "CAB" and pizzas. Hence, YELLOW CAB PIZZA CO. could be considered as an arbitrary, or even a fanciful mark.

A fanciful mark is one that has been invented by the owner for the sole purpose of functioning as a trademark. Because it is highly distinctive, it is a very remote possibility that two or more parties would accidentally adopt the same or substantially similar fanciful mark. For example, the marks "BIG MAC", "PEPSI" and "KODAK" are some of the more famous and fanciful marks, which originally have no meaning but through the efforts of the trademark owners have become distinctive symbols of the products they represent.

Arbitrary marks, meanwhile, are words that have some meaning to the public, but when used in connection with the relevant products, do not immediately suggest or describe any quality of the products. A good example of an arbitrary mark is "BABY RUTH" for candy bars. These are names or elements with significance in certain contexts but no immediate significance with respect to the relevant goods or services. An arbitrary mark may be a strong trademark

Thus, if two or more parties came up with the same fanciful or arbitrary mark, one of them is likely a copycat.

Aptly, the Appellee has shown that its use of its mark preceded the Appellant's. As early as 2001, it has already appropriated a service mark that uses the word combination of a color "yellow" and the term "cab" for its pizza products. The Appellant, on the other hand, failed to satisfactorily explain how it was able to coin his mark. His explanation that he adopted the use of the word "green" as a sign of good luck as advised by a ''feng shu;" expert and that he used to drive a taxi cab as reason for using the word "cab" is lame and innocuous. The Appellant did not even present the "expert" to show his good faith in coming up with the word "green" or the owner of the taxi he alleged to have used. These claims are further suspect in view of the Appellant's own admission that he used to work at several

Decision, page 9. 29

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pizza establishments. This means that he is likely to be aware of the existence of YELLOW CAB PIZZACO. As stated by the Director:

"x x x The combination of a color and a cab or vehicle presents a very unique and distinctive choice of word-combination to arrive at a registrable trademark for a pizza business, this concept of associating a color with a cab becomes Complainant's source identifier. Respondent's union of the color GREEN with the word CAB for a pizza business is identical or closely resembles Complainant's word-combination that the use or adoption thereof has continued to create confusion between the competing marks. Anyone is likely to be misled by the adoption of the same word-combination. Hence, Respondent's mark GREEN CAB PIZZA HAUS lacks the element of originality to be sufficiently distinctive. Such word-combination as Complainant's mark is not one that would naturally occur to Respondents or any other trader for that matter to use and/or conceptualize. " 30

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This Office agree with the Director that the Appellant's mark is a colorable imitation of the Appellee's mark. In Co Tiong Sa Y. Director of Patents." the Supreme Court has ruled that:

"The question of infringement is to be determined by the test of dominancy. The dissimilarity in size, form and color of the label and the place where applied are not conclusive. If the competing label contains the trademark of another, and confusion or deception is likely to result, infringement takes place, regardless of the fact that the accessories are dissimilar. Duplication or exact imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, citing Eagle Co. vs. Pflugh «.c.i 180 F., 579.)

"In order to constitute infringement, it is not necessary that the trademark be literally copied .... Neither is it necessary that every word be appropriated. There may be infringement where the substantial and distinctive part of the trademark is copied or imitated ... Dissimilarity in size, form and color of the label and place where it is applied are not conclusive against infringement.... The resemblances may so far dominate the differences as to be likely to deceive ordinary purchasers. (Queen Mfg. Co. vs. Isaac Ginsberg Bros. Co., 25 F zd, 284, 287. See also Finchley, Inc. vs. George Hess Co., Inc., et al, 24 F., Supp. 94.)"

Consequently, the Appellant's use of its mark will likely cause confusion, mistake or deception on the buying public. There are two types of confusion arising from the use of similar or colorable imitation of marks, namely, the confusion of goods and confusion of business. In Sterling Products International, Inc. YS. Farbenfabriken Bayer Aktiengesellschaft, et. al." the Supreme Court held:

"Callman notes two types of confusion. The first is the confusion of goods in which event the ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other. In which case, defendant's goods are then bought as the plaintiffs and the poorer quality of the former reflects

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Decision, page 16. G. R. No. L-5378, 24 May 1954. G. R. No. L-19906, 30 Apr. 1969.

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adversely on the plaintiffs reputation. The other is the confusion of business. Here, though the goods of the parties are different, the defendant's product is such as might reasonably be assumed to originate with the plaintiff, and the public would then be deceived either into that belief or into the belief that there is some connection between the plaintiff and defendant which, in fact does not exist."

The Appellant and the Appellee are using their respective marks on the same goods of pizza products. As the registered owner of the mark YELLOW CAB PIZZA CO., the Appellee therefore has the exclusive right to prevent third parties from using in the course of trade similar signs that would result to a likelihood of confusion. Sec. 147.1 of the IP Code provides that:

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I "SEC. 147. Rights Conferred.- 147.1. The owner of a registered mark shall have the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical

~ sign for identical goods or services, a likelihood of confusion shall be presumed."

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Relevant is the Supreme Court's disquisition in McDonald's Corporation and McGeorge Food Industries, Inc. vs. L. C. Big Mak Burger, Inc., et al,33 to wit:

"x x x Respondents' use of the 'Big Mak' mark results in likelihood of confusion. First, 'Big Mak' sounds exactly the same as 'Big Mac.' Second, the first word in 'Big Mak' is exactly the same as the first word in 'Big Mac.' Third, the first two letters in 'Mak' are the same as the first two letters in 'Mac.' Fourth, the last letter in ,Mak' while a 'k' sounds the same as 'c' when the word "Mak' is pronounced. Fifth, in Filipino, the letter' k' replaces' c' in spelling, thus' Caloocan' is spelled 'Kalookan.'

"In short, aurally the two marks are the same, with the first word of both marks phonetically the same, and the second word of both marks also 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."

x x x "Certainly, 'Big Mac' and 'Big Mak' for hamburgers create even greater

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confusion, not only aurally but also visually. t 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.'

Petitioners' aggressive promotion of the 'Big Mac' mark, as borne by their advertisement expenses, has built goodwill and reputation for such mark making it one of the easily recognizable marks in the market today. This increases the likelihood that

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of respondents'.

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1 Respondents' inability to explain sufficiently how and why they came toI

choose 'Big Mak' for their hamburger sandwiches indicates their intent to imitate petitioners' 'Big Mac' mark."

I This Office also concurs with the Directors' finding that the Appellant also

I committed unfair competition. On pain of redundancy, this Office took note of the fact that the Appellees' and the Appellant's goods are both pizza products. The Appellee has already established goodwill over its pizza business through the use of the mark YELLOW CAB PIZZACO. and has identified in the mind of the public

I the pizza it deals in. The Appellant, on the other hand, belatedly use the mark GREEN CAB PIZZA HAUS which is a colorable imitation of the Appellee's mark. The Appellant has clothed its goods with the general appearance of the Appellee's goods obviously to get a free ride on the goodwill associated with the Appellee's mark and its established business thereby saving the Appellant from the expenses in creating market recognition of its products. As pointed out by the Appellee:

"62. The essential elements of an action for unfair competition are (a) confusing similarity in the general appearance of the goods, and (b) intent to deceive the public and defraud a competitor.

63. The above elements are present in this case. Respondents-appellants even used similar 'checkerboard' designs in its flyers to promote its pizza products. The intent to deceive may be inferred from the fact that respondents-appellants chose a very similar tradename to that used by Yellow Cab as a service mark, to be used in the commercial trade of identical goods and services."

A witness for the Appellee, its Director, Albert Tan, testified that on several occasions, he received telephone inquiries regarding franchising. The callers, according to him, mistook GREEN CAB PIZZA HAUS for YELLOW CAB PIZZA CO. Another witness, Daniel Yaptangco, Jr., also told the hearing officer that his first reaction when he saw GREEN CAB PIZZA HAUS was that it was an affiliate of YELLOW CAB PIZZA CO. These witnesses were cross-examined providing the hearing officer the opportunity to observe their demeanor at the time.

But even without these testimonies, unfair competition is apparent in this case. Actual confusion or deception is not a requirement in determining whether unfair competition is committed. What the law requires is the possibility of confusion of or deception on the public resulting from the calculated and deliberate act of clothing a product the general appearance of its competitors.

The Appellant's claim of good faith is diluted by the fact that there is no evidence submitted that shows that he gave sufficient notice to the public that pizza products bearing the mark GREEN CAB PIZZA HAUS are products of the Appellant. Without indicating the source or origin of the pizza products bearing the mark GREEN CAB PIZZA HAUS, it is likely that the Appellant's products would be mistaken as those of or associated with the Appellee's.

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IirIWhile the Appellant submitted evidence to show the promotional activities

for GREEN CAB PIZZA HAUS, including the engagement of an advertising firm, the advertisements, sponsorships, and the "appearance" of Melody Baula in a television show, these efforts were made only during the later part of 2005 up to 2006. The promotional "blitz" undertaken by the Appellant came only after the Appellee has already filed its Complaint on 19 July 2005. Obviously, these promotional activities were belated - afterthoughts - in an attempt to put up his defense in this case.

With the findings that the Appellant is liable for infringement and unfair competition, the Appellee is, therefore, entitled to damages. However, this Office concurs with the Director, to wit:

"In this case, Complainant has not presented to this Office sufficient basis to measure actual damages. There was no evidence to show that Complainant suffered losses during the period of Respondents' actual operation of GREEN CAB pizza business. Complainant, however, is entitled to temperate damages for the specific acts of infringement and unfair competition as thoroughly discussed and passed upon in the foregoing. Respondent, being an artificial person and having existence only in legal contemplation, is not entitled to moral damages. Regarding attorney's fees, as this is supported by evidence during trial, the same may be recovered.Y"

To conclude, it is emphasized that the essence of trademark registration is to give protection to the owners of trademarks. 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." The law on trademark and tradename is based on the principle of business integrity and common justice. This law, both in letter and spirit, is laid upon the premise that, while it encourages fair trade in every way and aims to foster, and not to hamper, competition, no one, especially a trader, is justified in damaging or jeopardizing another's business by fraud, deceit, trickery or unfair methods of any sort."

It is but normal that competitors monitor competing products in the conduct of their businesses. It is, however, another thing if one will adopt and imitate the distinguishing feature of a competitor's product. In this regard, the statement by the Supreme Court in one case is instructive.

34 Decision No. 2007-07, dated 25 May 2007, page 27. 35 Pribhdas J Mirpuri v. Court of Appeals, G.R. No. 114508, 19 Nov. 1999, citing Etepha v. Director of Patents, supra, Gabriel v. Perez, 55 SCRA 406 (1974). 36 La Chemise Lacoste, SA. v. Fernandez, 129 SCRA 373, May 21,1984.

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, "Of course, as in all other cases of colorable imitations, the unanswered riddle

is why, of the millions of terms and combinations of letters and designs available, the appellee had to choose those so closely similar to another's trademark if there was no intent to take advantage of the goodwill generated by the other mark."37

Wherefore, premises considered, the appeal is hereby DISMISSED. Let a copy of this Decision and the records of this case be furnished and returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance, and records purposes.

SO ORDERED.

SEP 15 2008 Makati City.

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,.JAmerican Wire & Cable Company v. Director a/Patents, G. R. No. L-26557, 18 Feb. 1970.

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