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G.R. No. L-48226

December 14, 1942

ANA L. ANG, petitioner,


vs.
TORIBIO TEODORO, respondent.
Cirilo Lim for petitioner.
Marcial P. Lichauco and Manuel M. Mejia for respondent.

OZAETA, J.:
Petitioner has appealed to this Court by certiorari to reverse the judgment of the Court of
Appeals reversing that of the Court of First Instance of Manila and directing the Director of
Commerce to cancel the registration of the trade-mark "Ang Tibay" in favor of said petitioner,
and perpetually enjoining the latter from using said trade-mark on goods manufactured and
sold by her. DECISION OF CA WAS AFFIRMED. TORIBIO WON.
Respondent Toribio Teodoro, at first in partnership with Juan Katindig and later as sole
proprietor, 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. He formally
registered it as trade-mark on September 29, 1915, and as trade-name on January 3, 1933.
His expenses for advertisement from 1919 to 1938 aggregated P210,641.56.
Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for pants and shirts
on April 11, 1932.
The trial court (Judge Quirico Abeto) presiding absolved the defendant from the complaint,
with costs against the plaintiff, 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 because
the goods on which it is used are essentially different from those of the plaintiff.
the Court of Appeals, reversed that judgment, holding that:
by uninterrupted an exclusive use since 1910 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 Trade mark law.
The defendant Director of Commerce did not appeal from the decision of the Court of
Appeals.
COUNSEL FOR THE PETITIONER, He contends that:
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."

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He 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.
He cites among others the case of Baxter vs. Zuazua (5 Phil., 16), which involved the trademark "Agua de Kananga" used on toilet water, and in which this Court held that the word
"Kananga," which is the name of a well-known Philippine tree or its flower, could not be
appropriated as a trade-mark any more than could the words "sugar," "tobacco," or "coffee."
COUNSEL FOR THE RESPONDENT, contend that:
the words "Ang Tibay" are not descriptive but merely suggestive and may properly be
regarded as fanciful or arbitrary in the legal sense.
The cite several cases in which similar words have been sustained as valid trade-marks, such
as "Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and "Fashionknit" for neckties and
sweaters. 3
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. The phrase "ang tibay" is never used
adjectively to define or describe an object. One does not say, "ang tibay sapatos" or "sapatos
ang tibay" is never used adjectively to define or describe an object. One does not say, "ang
tibay sapatos" or "sapatos ang tibay" to mean "durable shoes," but "matibay na sapatos" or
"sapatos na matibay."
ISSUE 1: ANG TIBAY IS A DESCRIPTIVE TERM no.
From all of this 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.
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.

ISSUE 2: ANG TIBAY CANNOT ACQUIRE SECONDARY MEANING yes


In her second assignment of error petitioner contends that the Court of Appeals erred in
holding that the words "Ang Tibay" had acquired a secondary meaning.
In view of the conclusion we have reached upon the first assignment of error, 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, 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.

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We have said that the phrase "Ang Tibay," being neither geographic nor descriptive, was
originally capable of exclusive appropriation as a trade-mark. But were it not so, the
application of the doctrine of secondary meaning made by the 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.

ISSUE 3: PANTS/SHIRTS ARE SIMILAR TO SHOES/SLIPPERS


Petitioner's third assignment of error is, that the 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.
The question raised by petitioner involve the scope and application of sections 3,7, 11, 13,
and 20 of the Trade-Mark Law (Act No. 666.)
Section 3 provides that "any person entitled to the exclusive use of a trade-mark to designate
the origin or ownership of goods he has made or deals in, may recover damages in a civil
actions from any person who has sold goods of a similar kind, bearing such trade-mark . . .
The complaining party . . . may have a preliminary injunction, . . . and such injunction upon
final hearing, if the complainant's property in the trade-mark and the defendant's violation
thereof shall be fully established, shall be made perpetual, and this injunction shall be part of
the judgment for damages to be rendered in the same cause."
Section 7 provides that any person who, in selling his goods, shall give them the general
appearance of the goods of another either in the wrapping of the packages, or in the devices
or words thereon, or in any other feature of their appearance, which would be likely to
influence purchasers to believe that the goods offered are those of the complainant, shall be
guilty of unfair competition, and shall be liable to an action for damages and to an injunction,
as in the cases of trade-mark infringement under section 3.
Section 11 requires the applicant for registration of a trade-mark to state, among others, "the
general class of merchandise to which the trade-mark claimed has been appropriated."
Section 13 provides that no alleged trade-mark or trade name shall be registered which is
identical with a registered or known trade-mark owned by another and appropriate to
the same class of merchandise, or which to nearly resembles another person's lawful trademark or trade-name as to be likely to cause confusion or mistake in the mind of the public, or
to deceive purchasers. And section 2 authorizes the Director of Commerce to
establish classes of merchandise for the purpose of the registration of trade-marks and to
determine the particular description of articles included in each class; it also provides that "an
application for registration of a trade-mark shall be registered only for one class of articles and
only for the particular description of articles mentioned in said application."
We have underlined the key words used in the statute: "goods of a similar kin," "general class
of merchandise," "same class of merchandise," "classes of merchandise," and "class of
articles," because it is upon their implications that the result of the case hinges. These
phrases, which refer to the same thing, have the same meaning as the phrase "merchandise
of the same descriptive properties" used in the statutes and jurisprudence of other
jurisdictions.
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.

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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.
We think reasonable men may not disagree that shoes and shirts are not as unrelated as
fountain pens and razor blades, for instance. The mere relation or association of the articles is
not controlling. As may readily be noted from what we have heretofore said, the proprietary
connotation that a trade-mark or trade-name has acquired is of more paramount
consideration. The Court of Appeals found in this case that by uninterrupted and exclusive
use since 1910 of respondent's registered trade-mark on slippers and shoes manufactured by
him, it has come to indicate the origin and ownership of said goods. It is certainly not
farfetched to surmise that the selection by petitioner of the same trade-mark for pants and
shirts was motivated by a desire to get a free ride on the reputation and selling power it has
acquired at the hands of the respondent. As observed in another case, 12 the field from which
a person may select a trade-mark is practically unlimited, and hence there is no excuse for
impinging upon or even closely approaching the mark of a business rival. In the unlimited field
of choice, what could have been petitioner's purpose in selecting "Ang Tibay" if not for its
fame?
Lastly, in her fifth assignment of error petitioner seems to make a frantic effort to retain the
use of the mark "Ang Tibay." Her counsel suggests that instead of enjoining her from using it,
she may be required to state in her labels affixed to her products the inscription: "Not
manufactured by Toribio Teodoro." We think such practice would be unethical and unworthy of
a reputable businessman. To the suggestion of petitioner, respondent may say, not without
justice though with a tinge of bitterness: "Why offer a perpetual apology or explanation as to
the origin of your products in order to use my trade-mark instead of creating one of your
own?" On our part may we add, without meaning to be harsh, that a self-respecting person
does not remain in the shelter of another but builds one of his own.
The judgment of the Court of Appeals is affirmed, with costs against the petitioner in the three
instances. So ordered.

G.R. No. 100098 December 29, 1995


EMERALD GARMENT MANUFACTURING CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND
TECHNOLOGY TRANSFER and H.D. LEE COMPANY, INC., respondents.

KAPUNAN, J.:
In this petition for review on certiorari under Rule 45 of the Revised Rules of Court, Emerald
Garment Manufacturing Corporation seeks to annul the decision of the Court of Appeals
dated 29 November 1990 in CA-G.R. SP No. 15266 declaring petitioner's trademark to be
confusingly similar to that of private respondent and the resolution dated 17 May 1991
denying petitioner's motion for reconsideration.
The record reveals the following antecedent facts:

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On 18 September 1981, private respondent H.D. Lee Co., Inc., a foreign corporation
organized under the laws of Delaware, U.S.A., filed with the Bureau of Patents, Trademarks &
Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR 5054
(Supplemental Register) for the trademark "STYLISTIC MR. LEE" used on skirts, jeans,
blouses, socks, briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie under Class
25, issued on 27 October 1980 in the name of petitioner Emerald Garment Manufacturing
Corporation, a domestic corporation organized and existing under Philippine laws. The
petition was docketed as Inter Partes Case No. 1558. 1
PRIVATE RESPONDENT, invoking Sec. 37 of R.A. No. 166 (Trademark Law) and Art. VIII of
the Paris Convention for the Protection of Industrial Property, averred that petitioner's
trademark "so closely resembled its own trademark, 'LEE' as previously registered and used
in the Philippines, and not abandoned, as to be likely, when applied to or used in connection
with petitioner's goods, to cause confusion, mistake and deception on the part of the
purchasing public as to the origin of the goods." 2
PETITIONER contended that its trademark was entirely and unmistakably different from that
of private respondent and that its certificate of registration was legally and validly granted. 3
On 20 February 1984, petitioner caused the publication of its application for registration of the
trademark "STYLISTIC MR. LEE" in the Principal Register." 4
On 27 July 1984, PRIVATE RESPONDENt filed a notice of opposition to petitioner's
application for registration also on grounds that petitioner's trademark was confusingly similar
to its "LEE" trademark. 5 The case was docketed as Inter Partes Case No. 1860.
On 21 June 1985, the Director of Patents, on motion filed by private respondent dated 15 May
1985, issued an order consolidating Inter Partes Cases Nos. 1558 and 1860 on grounds that
a common question of law was involved. 6
On 19 July 1988, THE DIRECTOR OF PATENTS rendered a decision granting private
respondent's petition for cancellation and opposition to registration.
The Director of Patents found private respondent to be the prior registrant of the trademark
"LEE" in the Philippines and that it had been using said mark in the Philippines. 7
Moreover, the Director of Patents, using the test of dominancy, declared that petitioner's
trademark was confusingly similar to private respondent's mark because "it is the word 'Lee'
which draws the attention of the buyer and leads him to conclude that the goods originated
from the same manufacturer. It is undeniably the dominant feature of the mark." 8

On 29 November 1990, the Court of Appeals promulgated its decision affirming the
decision of the Director of Patents dated 19 July 1988 in all respects. 11
In said decision THE COURT OF APPEALS expounded, thus:
xxx xxx xxx
Whether or not a trademark causes confusion and is likely to deceive the
public is a question of fact which is to be resolved by applying the "test of
dominancy", meaning, if the competing trademark contains the main or
essential or dominant features of another by reason of which confusion and
deception are likely to result, then infringement takes place; that duplication
or imitation is not necessary, a similarity in the dominant features of the
trademark would be sufficient.

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The word "LEE" is the most prominent and distinctive feature of the
appellant's trademark and all of the appellee's "LEE" trademarks.
It is the mark which draws the attention of the buyer and leads him to
conclude that the goods originated from the same manufacturer.
While it is true that there are other words such as "STYLISTIC", printed in the
appellant's label, such word is printed in such small letters over the word
"LEE" that it is not conspicuous enough to draw the attention of ordinary
buyers whereas the word "LEE" is printed across the label in big, bold letters
and of the same color, style, type and size of lettering as that of the
trademark of the appellee.
The alleged difference is too insubstantial to be noticeable. Even
granting arguendo that the word "STYLISTIC" is conspicuous enough to draw
attention, the goods may easily be mistaken for just another variation or line
of garments under the ap appelle's "LEE" trademarks in view of the fact that
the appellee has registered trademarks which use other words in addition to
the principal mark "LEE" such as "LEE RIDERS", "LEESURES" and "LEE
LEENS".
The likelihood of confusion is further made more probable by the fact that
both parties are engaged in the same line of business.
On 19 December 1990, petitioner filed a motion for reconsideration of the abovementioned decision of the Court of Appeals. REJECTED.
ISSUES: Twice rebuffed, petitioner presents its case before this Court on the following
assignment of errors:
I. THE COURT OF APPEALS ERRED IN NOT FINDING THAT PRIVATE
RESPONDENT CAUSED THE ISSUANCE OF A FOURTH "LEE"
TRADEMARK IMITATING THAT OF THE PETITIONER'S ONMAY 5,
1989 OR MORE THAN EIGHT MONTHS AFTER THE BUREAU OF
PATENT'S DECISION DATED JULY 19, 1988.
II. THE COURT OF APPEALS ERRED IN RULING THAT THE DEFENSE OF
ESTOPPEL BY LACHES MUST BE RAISED IN THE PROCEEDINGS
BEFORE THE BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY
TRANSFER.
III. THE COURT OF APPEALS ERRED WHEN IT CONSIDERED PRIVATE
RESPONDENT'S PRIOR REGISTRATION OF ITS TRADEMARK AND
DISREGARDED THE FACT THAT PRIVATE RESPONDENT HAD FAILED
TO PROVE COMMERCIAL
USE THEREOF BEFORE FILING OF APPLICATION FOR
REGISTRATION. 15
In addition, petitioner reiterates the issues it raised in the Court of Appeals:
I. THE ISSUE INVOLVED IN THIS CASE IS WHETHER OR NOT
PETITIONER'S TRADEMARK SYTLISTIC MR. LEE, IS CONFUSINGLY
SIMILAR WITH THE PRIVATE RESPONDENT'S TRADEMARK LEE OR
LEE-RIDER, LEE-LEENS AND LEE-SURES.
II. PETITIONER'S EVIDENCES ARE CLEAR AND SUFFICIENT TO SHOW
THAT IT IS THE PRIOR USER AND ITS TRADEMARK IS DIFFERENT
FROM THAT OF THE PRIVATE RESPONDENT.

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III. PETITIONER'S TRADEMARK IS ENTIRELY DIFFERENT FROM THE


PRIVATE RESPONDENT'S AND THE REGISTRATION OF ITS
TRADEMARK IS PRIMA FACIE EVIDENCE OF GOOD FAITH.
IV. PETITIONER'S "STYLISTIC MR. LEE" TRADEMARK CANNOT BE
CONFUSED WITH PRIVATE RESPONDENT'S LEE TRADEMARK. 16
ISSUE 1: LEE WAS ESTOPPED DUE TO DELAYED FILING OF CANCELLATION
Petitioner contends that private respondent is estopped from instituting an action for
infringement before the BPTTT under the equitable principle of laches pursuant to Sec. 9-A of
R.A. No. 166, otherwise known as the Law on Trade-marks, Trade-names and Unfair
Competition:
Sec. 9-A. Equitable principles to govern proceedings. In opposition
proceedings and in all other inter partes proceedings in the patent office
under this act, equitable principles of laches, estoppel, and acquiescence,
where applicable, may be considered and applied.
Petitioner alleges that it has been using its trademark "STYLISTIC MR. LEE" since 1 May
1975, yet, it was only on 18 September 1981 that private respondent filed a petition for
cancellation of petitioner's certificate of registration for the said trademark. Similarly, private
respondent's notice of opposition to petitioner's application for registration in the principal
register was belatedly filed on 27 July 1984. 17
Private respondent counters by maintaining that petitioner was barred from raising new issues
on appeal, the only contention in the proceedings below being the presence or absence of
confusing similarity between the two trademarks in question. 18
WE REJECT PETITIONER'S CONTENTION.
Petitioner's trademark is registered in the supplemental register. The Trademark Law (R.A.
No. 166) provides that "marks and tradenames for the supplemental register shall not be
published for or be subject to opposition, but shall be published on registration in the Official
Gazette." 19 The reckoning point, therefore, should not be 1 May 1975, the date of alleged use
by petitioner of its assailed trademark but 27 October 1980, 20 the date the certificate of
registration SR No. 5054 was published in the Official Gazette and issued to petitioner.
It was only on the date of publication and issuance of the registration certificate that private
respondent may be considered "officially" put on notice that petitioner has appropriated or is
using said mark, which, after all, is the function and purpose of registration in the
supplemental register. 21 The record is bereft of evidence that private respondent was aware
of petitioner's trademark before the date of said publication and issuance. Hence, when
private respondent instituted cancellation proceedings on 18 September 1981, less than a
year had passed.
Corollarily, private respondent could hardly be accused of inexcusable delay in filing its notice
of opposition to petitioner's application for registration in the PRINCIPAL REGISTER since
said application was published only on 20 February 1984. 22 From the time of publication to
the time of filing the opposition on 27 July 1984 barely five (5) months had elapsed. To be
barred from bringing suit on grounds of estoppel and laches, the delay must be
lengthy. 23
ISSUE 2: STYLISTIC MR LEE IS DIFFERENT FROM LEE.
More crucial is the issue of confusing similarity between the two trademarks. Petitioner
vehemently contends that its trademark "STYLISTIC MR. LEE" is entirely different from and
not confusingly similar to private respondent's "LEE" trademark.

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The pertinent provision of R.A. No. 166 (Trademark Law) states thus:
Sec. 22. Infringement, what constitutes. Any person who shall use, without
the consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy or
colorably imitable any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services; shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.
Practical application, however, of the aforesaid provision is easier said than done. In the
history of trademark cases in the Philippines, particularly in ascertaining whether one
trademark is confusingly similar to or is a colorable imitation of another, no set rules can be
deduced. Each case must be decided on its own merits.
In Esso Standard Eastern, Inc. v. Court of Appeals, 24 we held:
. . . But likelihood of confusion is a relative concept; to be determined only
according to the particular, and sometimes peculiar, circumstances of each
case. It is unquestionably true that, as stated inCoburn vs. Puritan Mills, Inc.:
"In trademark cases, even more than in other litigation, precedent must be
studied in the light of the facts of the particular case."
xxx xxx xxx
Likewise, it has been observed that:
In determining whether a particular name or mark is a "colorable imitation" of
another, no all-embracing rule seems possible in view of the great number of
factors which must necessarily be considered in resolving this question of
fact, such as the class of product or business to which the article belongs; the
product's quality, quantity, or size, including its wrapper or container; the
dominant color, style, size, form, meaning of letters, words, designs and
emblems used; the nature of the package, wrapper or container; the
character of the product's purchasers; location of the business; the likelihood
of deception or the mark or name's tendency to confuse;
etc. 25
Proceeding to the task at hand, the essential element of infringement is colorable imitation.
This term has been defined as "such a close or ingenious imitation as to be calculated to
deceive ordinary purchasers, or such resemblance of the infringing mark 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." 26
Colorable imitation does not mean such similitude as amounts to identity. Nor
does it require that all the details be literally copied. Colorable imitation refers
to such similarity in form, content, words, sound, meaning, special
arrangement, or general appearance of the trademark or tradename with that
of the other mark or tradename in their over-all presentation or in their
essential, substantive and distinctive parts as would likely mislead or confuse
persons in the ordinary course of purchasing the genuine article. 27

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In determining whether colorable imitation exists, jurisprudence has developed two kinds of
tests the Dominancy Test applied in Asia Brewery, Inc. v. Court of Appeals 28 and other
cases 29 and the Holistic Test developed in Del Monte Corporation v. Court of Appeals 30 and
its proponent cases. 31
As its title implies, the test of dominancy focuses on the similarity of the prevalent features of
the competing trademarks which might cause confusion or deception and thus constitutes
infringement.
xxx xxx xxx
. . . If the competing trademark contains the main or essential or dominant
features of another, and confusion and deception is likely to result,
infringement takes place. Duplication or imitation is not necessary; nor it is
necessary that the infringing label should suggest an effort to imitate. [C.
Neilman Brewing Co. v. Independent Brewing Co., 191 F., 489,
495, citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed. 579]. The
question at issue in cases of infringement of trademarks is whether the use of
the marks involved would be likely to cause confusion or mistakes in the
mind of the public or deceive purchasers. (Auburn Rubber Corporation vs.
Honover Rubber Co., 107 F. 2d 588; . . .) 32
xxx xxx xxx
On the other side of the spectrum, the holistic test mandates that the entirety of the marks in
question must be considered in determining confusing similarity.
xxx xxx xxx
In determining whether the trademarks are confusingly similar, a comparison
of the words is not the only determinant factor. The trademarks in their
entirety as they appear in their respective labels or hang tags must also be
considered in relation to the goods to which they are attached. The discerning
eye of the observer must focus not only on the predominant words but also
on the other features appearing in both labels in order that he may draw his
conclusion whether one is confusingly similar to the other. 33
xxx xxx xxx
we considered the trademarks involved as a whole and rule that petitioner's
"STYLISTIC MR. LEE" is not confusingly similar to private respondent's "LEE"
trademark.
Petitioner's trademark is the whole "STYLISTIC MR. LEE." Although on its label the word
"LEE" is prominent, the trademark should be considered as a whole and not piecemeal. The
dissimilarities between the two marks become conspicuous, noticeable and substantial
enough to matter especially in the light of the following variables that must be factored in.
First, the products involved in the case at bar are, in the main, various kinds of jeans. These
are not your ordinary household items like catsup, soysauce or soap which are of minimal
cost. Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is predisposed
to be more cautious and discriminating in and would prefer to mull over his purchase.
Confusion and deception, then, is less likely.
Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He
does not ask the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even
an Armani. He is, therefore, more or less knowledgeable and familiar with his preference and
will not easily be distracted.

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10

Finally, in line with the foregoing discussions, more credit should be given to the
"ordinary purchaser." Cast in this particular controversy, the ordinary purchaser is not
the "completely unwary consumer" but is the "ordinarily intelligent buyer" considering
the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok 35 is better suited to the present case.
There, the "ORDINARY PURCHASER" was defined as one "accustomed to buy, and
therefore to some extent familiar with, the goods in question.
There is no cause for the Court of Appeal's apprehension that petitioner's products might be
mistaken as "another variation or line of garments under private respondent's 'LEE'
trademark". 36 As one would readily observe, private respondent's variation follows a standard
format "LEERIDERS," "LEESURES" and "LEELEENS." It is, therefore, improbable that the
public would immediately and naturally conclude that petitioner's "STYLISTIC MR. LEE" is but
another variation under private respondent's "LEE" mark.
"LEE" is primarily a surname. Private respondent cannot, therefore, acquire exclusive
ownership over and singular use of said term.
. . . It has been held that a personal name or surname may not be
monopolized as a trademark or tradename as against others of the same
name or surname. For in the absence of contract, fraud, or estoppel, any
man may use his name or surname in all legitimate ways. Thus, "Wellington"
is a surname, and its first user has no cause of action against the junior user
of "Wellington" as it is incapable of exclusive appropriation. 37
In addition to the foregoing, we are constrained to agree with petitioner's contention that
private respondent failed to prove prior actual commercial use of its "LEE" trademark in the
Philippines before filing its application for registration with the BPTTT and hence, has not
acquired ownership over said mark.
Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of
ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law
(R.A. No. 166) which explicitly provides that:
CHAPTER II. Registration of Marks and Trade-names.
Sec. 2. What are registrable. Trade-marks, trade-names, and service
marks owned by persons, corporations, partnerships or associations
domiciled in the Philippines and by persons, corporations, partnerships, or
associations domiciled in any foreign country may be registered in
accordance with the provisions of this act: Provided, That said trademarks, trade-names, 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 grants by law substantially
similar privileges to citizens of the Philippines, and such fact is officially
certified, with a certified true copy of the foreign law translated into the
English language, by the government of the foreign country to the
Government of the Republic of the Philippines. (As amended.) (Emphasis
ours.)
Sec. 2-A. Ownership of trade-marks, trade-names and service-marks; how
acquired. Anyone who lawfully produces or deals in merchandise of any
kind or who engages in lawful business, or who renders any lawful service in
commerce, by actual use hereof in manufacture or trade, in business, and in
the service rendered; may appropriate to his exclusive use a trade-mark, a
trade-name, or a service-mark not so appropriated by another, to distinguish

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his merchandise, business or services from others. The ownership or


possession of trade-mark, trade-name, service-mark, heretofore or hereafter
appropriated, as in this section provided, shall be recognized and protected in
the same manner and to the same extent as are other property rights to the
law. (As amended.) (Emphasis ours.)
The provisions of the 1965 Paris Convention for the Protection of Industrial Property 38 relied
upon by private respondent and Sec. 21-A of the Trademark Law (R.A. No. 166) 39 were
sufficiently expounded upon and qualified in the recent case of Philip Morris, Inc. v. Court of
Appeals: 40
xxx xxx xxx
Following universal acquiescence and comity, our municipal law on
trademarks regarding the requirement of actual use in the Philippines must
subordinate an international agreement inasmuch as the apparent clash is
being decided by a municipal tribunal (Mortisen vs. Peters, Great Britain,
High Court of Judiciary of Scotland, 1906, 8 Sessions, 93; Paras,
International Law and World Organization, 1971 Ed., p. 20). Withal, the fact
that international law has been made part of the law of the land does not by
any means imply the primacy of international law over national law in the
municipal sphere. Under the doctrine of incorporation as applied in most
countries, rules of international law are given a standing equal, not superior,
to national legislative enactments.
xxx xxx xxx
In other words, (a foreign corporation) may have the capacity to sue for
infringement irrespective of lack of business activity in the Philippines on
account of Section 21-A of the Trademark Law but the question of whether
they have an exclusive right over their symbol as to justify issuance of the
controversial writ will depend on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a foreign corporation not
licensed to do business in the Philippines files a complaint for infringement,
the entity need not be actually using its trademark in commerce in the
Philippines. Such a foreign corporation may have the personality to file a suit
for infringement but it may not necessarily be entitled to protection due to
absence of actual use of the emblem in the local market.
xxx xxx xxx
Undisputably, private respondent is the senior registrant, having obtained several registration
certificates for its various trademarks "LEE," "LEERIDERS," and "LEESURES" in both the
supplemental and principal registers, as early as 1969 to 1973. 41 However, registration alone
will not suffice. In Sterling Products International, Inc. v.Farbenfabriken Bayer
Aktiengesellschaft, 42 we declared:
xxx xxx xxx
A rule widely accepted and firmly entrenched because it has come down
through the years is that actual use in commerce or business is a prerequisite
in the acquisition of the right of ownership over a trademark.
xxx xxx xxx
It would seem quite clear that adoption alone of a trademark would not give
exclusive right thereto. Such right "grows out of their actual use." Adoption is

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not use. One may make advertisements, issue circulars, give out price lists
on certain goods; but these alone would not give exclusive right of use. For
trademark is a creation of use. The underlying reason for all these is that
purchasers have come to understand the mark as indicating the origin of the
wares. Flowing from this is the trader's right to protection in the trade he has
built up and the goodwill he has accumulated from use of the trademark.
Registration of a trademark, of course, has value: it is an administrative act
declaratory of a pre-existing right. Registration does not, however, perfect a
trademark right. (Emphasis ours.)
xxx xxx xxx
To augment its arguments that it was, not only the prior registrant, but also the prior user,
private respondent invokes Sec. 20 of the Trademark Law, thus:
Sec. 20. Certificate of registration prima facie evidence of validity. A
certificate of registration of a mark or tradename shall be a prima
facie evidence of the validity of the registration, the registrant's ownership of
the mark or trade-name, and of the registrant's exclusive right to use the
same in connection with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated therein.
The credibility placed on a certificate of registration of one's trademark, or its weight as
evidence of validity, ownership and exclusive use, is qualified. A registration certificate serves
merely as prima facie evidence. It is not conclusive but can and may be rebutted by
controverting evidence.
Moreover, the aforequoted provision applies only to registrations in the principal
register. 43 Registrations in the supplemental register do not enjoy a similar privilege. A
supplemental register was created precisely for the registration of marks which are not
registrable on the principal register due to some defects. 44
The determination as to who is the prior user of the trademark is a question of fact and it is
this Court's working principle not to disturb the findings of the Director of Patents on this issue
in the absence of any showing of grave abuse of discretion. The findings of facts of the
Director of Patents are conclusive upon the Supreme Court providedthey are supported by
substantial evidence. 45
In the case at bench, however, we reverse the findings of the Director of Patents and the
Court of Appeals. After a meticulous study of the records, we observe that the Director of
Patents and the Court of Appeals relied mainly on the registration certificates as proof of use
by private respondent of the trademark "LEE" which, as we have previously discussed are not
sufficient. We cannot give credence to private respondent's claim that its "LEE" mark first
reached the Philippines in the 1960's through local sales by the Post Exchanges of the U.S.
Military Bases in the Philippines 46 based as it was solely on the self-serving statements of Mr.
Edward Poste, General Manager of Lee (Phils.), Inc., a wholly owned subsidiary of the H.D.
Lee, Co., Inc., U.S.A., herein private respondent. 47 Similarly, we give little weight to the
numerous
vouchers representing various advertising expenses in the Philippines for "LEE" products. 48 It
is well to note that these expenses were incurred only in 1981 and 1982 by LEE (Phils.), Inc.
after it entered into a licensing agreement with private respondent on 11 May 1981. 49
On the other hand, petitioner has sufficiently shown that it has been in the business of selling
jeans and other garments adopting its "STYLISTIC MR. LEE" trademark since 1975 as
evidenced by appropriate sales invoices to various stores and retailers. 50
Our rulings in Pagasa Industrial Corp. v. Court of Appeals 51 and Converse Rubber
Corp. v. Universal Rubber Products, Inc., 52respectively, are instructive:

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The Trademark Law is very clear. It requires actual commercial use of the
mark prior to its registration. There is no dispute that respondent corporation
was the first registrant, yet it failed to fully substantiate its claim that it used in
trade or business in the Philippines the subject mark; it did not present proof
to invest it with exclusive, continuous adoption of the trademark which should
consist among others, of considerable sales since its first use. The invoices
submitted by respondent which were dated way back in 1957 show that the
zippers sent to the Philippines were to be used as "samples" and "of no
commercial value." The evidence for respondent must be clear, definite and
free from inconsistencies. "Samples" are not for sale and therefore, the fact of
exporting them to the Philippines cannot be considered to be equivalent to
the "use" contemplated by law. Respondent did not expect income from such
"samples." There were no receipts to establish sale, and no proof were
presented to show that they were subsequently sold in the Philippines.
xxx xxx xxx
The sales invoices provide the best proof that there were actual sales of
petitioner's product in the country and that there was actual use for a
protracted period of petitioner's trademark or part thereof through these
sales.
For lack of adequate proof of actual use of its trademark in the Philippines prior to
petitioner's use of its own mark and for failure to establish confusing similarity
between said trademarks, private respondent's action for infringement must
necessarily fail.
WHEREFORE, premises considered, the questioned decision and resolution are
hereby REVERSED and SET ASIDE.

G.R. No. 103543 July 5, 1993


ASIA BREWERY, INC., petitioner,
vs.
THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents.

GRIO-AQUINO, J.:
On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia
Brewery Inc. (ABI) for infringement of trademark and unfair competition on account of the
latter's BEER PALE PILSEN or BEER NA BEER product which has been competing with
SMC's SAN MIGUEL PALE PILSEN for a share of the local beer market. (San Miguel
Corporation vs. Asia Brewery Inc., Civ. Case. No. 56390, RTC Branch 166, Pasig, Metro
Manila.).
On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge
Jesus O. Bersamira, dismissing SMC's complaint because ABI "has not committed trademark
infringement or unfair competition against" SMC (p. 189, Rollo).
SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991,
the Court of Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman
and ponente, and Justices Venancio D. Aldecoa Jr. and Filemon H. Mendoza, as members)
reversed the trial court. The dispositive part of the decision reads as follows:

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In the light of the foregoing analysis and under the plain language of the
applicable rule and principle on the matter, We find the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new
judgment entered in favor of the plaintiff and against the defendant as follows:
(1) The defendant Asia Brewery Inc. its officers, agents, servants and
employees are hereby permanently enjoined and restrained from
manufacturing, putting up, selling, advertising, offering or announcing for
sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture
or beer in bottles and under labels substantially identical with or like the said
bottles and labels of plaintiff San Miguel Corporation employed for that
purpose, or substantially identical with or like the bottles and labels now
employed by the defendant for that purpose, or in bottles or under labels
which are calculated to deceive purchasers and consumers into the belief
that the beer is the product of the plaintiff or which will enable others to
substitute, sell or palm off the said beer of the defendant as and for the beer
of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered to render an
accounting and pay the San Miguel Corporation double any and all the
payments derived by defendant from operations of its business and the sale
of goods bearing the mark "Beer Pale Pilsen" estimated at approximately
Five Million Pesos (P5,000,000.00); to recall all its products bearing the mark
"Beer Pale Pilsen" from its retailers and deliver these as well as all labels,
signs, prints, packages, wrappers, receptacles and advertisements bearing
the infringing mark and all plates, molds, materials and other means of
making the same to the Court authorized to execute this judgment for
destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million
Pesos (P2,000,000.00) as moral damages and Half a Million Pesos
(P5,000,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney's fees in the
amount of P250,000.00 plus costs to this suit. (p. 90, Rollo.)
Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was
modified by the separate opinions of the Special Sixth Division 1 so that it should read thus:
In the light of the foregoing analysis and under the plain language of the
applicable rule and principle on the matter, We find the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new
judgment entered in favor of the plaintiff and against the defendant as follows:
(1) The defendant Asia Brewery Inc., its officers, agents, servants and
employees are hereby permanently enjoined and restrained from
manufacturing, putting up, selling, advertising, offering or announcing for
sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture
or beer in bottles and under labels substantially identical with or like the said
bottles and labels of plaintiff San Miguel Corporation employed for that
purpose, or substantially identical with or like the bottles and labels now
employed by the defendant for that purpose, or in bottles or under labels
which are calculated to deceive purchasers and consumers into the belief
that the beer if the product of the plaintiff or which will enable others to
substitute, sell or palm off the said beer of the defendant as and for the beer
of the plaintiff-complainant.

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(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its
products bearing the mark Beer Pale Pilsen from its retailers and deliver
these as well as all labels, signs, prints, packages, wrappers, receptacles and
advertisements bearing the infringing mark and all plates, molds, materials
and other means of making the same to the Court authorized to execute this
judgment for destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million
Pesos (P2,000,000.00) as moral damages and Half a Million Pesos
(P500,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney's fees in the
amount of P250,000.00 plus costs of this suit.
In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules
of Court. The lone issue in this appeal is whether ABI infringes SMC's trademark: San Miguel
Pale Pilsen with Rectangular Hops and Malt Design, and thereby commits unfair competition
against the latter. It is a factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65
SCRA 575) and as a general rule, the findings of the Court of Appeals upon factual questions
are conclusive and ought not to be disturbed by us. However, there are exceptions to this
general rule, and they are:
(1) When the conclusion is grounded entirely on speculation, surmises and
conjectures;
(2) When the inference of the Court of Appeals from its findings of fact is
manifestly mistaken, absurd and impossible;
(3) Where there is grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the appellate court, in making its findings, went beyond the issues
of the case, and the same are contrary to the admissions of both the
appellant and the appellee;
(6) When the findings of said court are contrary to those of the trial court;
(7) When the findings are without citation of specific evidence on which they
are based;
(8) When the facts set forth in the petition as well as in the petitioner's main
and reply briefs are not disputed by the respondents; and
(9) When the findings of facts of the Court of Appeals are premised on the
absence of evidence and are contradicted on record. (Reynolds Philippine
Corporation vs. Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs.
Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA
238; Sacay vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139
SCRA 576; Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex
Investment and Financing Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs.
De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS Stock Brokerage,
Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. vs. CA,
133 SCRA 88].)
Under any of these exceptions, the Court has to review the evidence in order to arrive at the
correct findings based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191

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SCRA 411, 420.) Where findings of the Court of Appeals and trial court are contrary to each
other, the Supreme Court may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA
222, 227.)
The present case is one of the exceptions because there is no concurrence between the trial
court and the Court of Appeals on the lone factual issue of whether ABI, by manufacturing and
selling its BEER PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a
white painted rectangular label has committed trademark infringement and unfair competition
against SMC.
Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36
Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law,
defines what constitutes infringement:
Sec. 22. Infringement, what constitutes. Any person who shall use, without
the consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy or
colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.
(Emphasis supplied.)
This definition implies that only registered trade marks, trade names and service marks are
protected against infringement or unauthorized use by another or others. The use of someone
else's registered trademark, trade name or service mark is unauthorized, hence, actionable, if
it is done "without the consent of the registrant." (Ibid.)
The registered trademark of SMC for its pale pilsen beer is:
San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine
Bureau of Patents, Trademarks and Technology Transfer Trademark
Certificate of Registration No. 36103, dated 23 Oct. 1986,
(p. 174, Rollo.)
As described by the trial court in its decision (Page 177, Rollo):
. . . . a rectangular design [is] bordered by what appears to be minute grains
arranged in rows of three in which there appear in each corner hop designs.
At the top is a phrase written in small print "Reg. Phil. Pat. Off." and at the
bottom "Net Contents: 320 Ml." The dominant feature is the phrase "San
Miguel" written horizontally at the upper portion. Below are the words "Pale
Pilsen" written diagonally across the middle of the rectangular design. In
between is a coat of arms and the phrase "Expertly Brewed." The "S" in
"San" and the "M" of "Miguel," "P" of "Pale" and "Pilsen" are written in Gothic
letters with fine strokes of serifs, the kind that first appeared in the 1780s in
England and used for printing German as distinguished from Roman and
Italic. Below "Pale Pilsen" is the statement "And Bottled by" (first line, "San
Miguel Brewery" (second line), and "Philippines" (third line). (p. 177, Rollo;
Emphasis supplied.)
On the other hand, ABI's trademark, as described by the trial court, consists of:

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. . . a rectangular design bordered by what appear to be buds of flowers with


leaves. The dominant feature is "Beer" written across the upper portion of the
rectangular design. The phrase "Pale Pilsen" appears immediately below in
smaller block letters. To the left is a hop design and to the right, written in
small prints, is the phrase "Net Contents 320 ml." Immediately below "Pale
Pilsen" is the statement written in three lines "Especially brewed and bottled
by" (first line), "Asia Brewery Incorporated" (second line), and "Philippines"
(third line), (p. 177, Rollo; Emphasis supplied.)
Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN MIGUEL PALE
PILSEN WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is "No."
Infringement is determined by the "test of dominancy" rather than by differences or variations
in the details of one trademark and of another. The rule was formulated in Co Tiong Sa vs.
Director of Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100
Phil. 214, 216-217 (1956), thus:
It has been consistently held that the question of infringement of a trademark
is to be determined by thetest of dominancy. Similarity in size, form and color,
while relevant, is not conclusive. If the competing trademark contains the
main or essential or dominant features of another, and confusion and
deception is likely to result, infringement takes place. Duplication or imitation
is not necessary; nor it is necessary that the infringing label should suggest
an effort to imitate. [C. Neilman Brewing Co. vs. Independent Brewing Co.,
191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed. 579].
The question at issue in cases of infringement of trademarks is whether the
use of the marks involved would be likely to cause confusion or mistakes in
the mind of the public or deceive purchasers. (Auburn Rubber Corporation
vs. Honover Rubber Co., 107 F. 2d 588; . . . .) (Emphasis supplied.)
In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was similarity or
"resemblance between the two (trademarks) such as would be likely to cause the one mark to
be mistaken for the other. . . . [But] this is not such similitude as amounts to identity."
In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific:
the test is "similarity in the dominant features of the trademarks."
What are the dominant features of the competing trademarks before us?
There is hardly any dispute that the dominant feature of SMC's trademark is the name of the
product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at
the beginning and end of the letters "S" and "M" on an amber background across the upper
portion of the rectangular design.
On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE
PILSEN, with the word "Beer" written in large amber letters, larger than any of the letters
found in the SMC label.
The trial court perceptively observed that the word "BEER" does not appear in SMC's
trademark, just as the words "SAN MIGUEL" do not appear in ABI's trademark. Hence, there
is absolutely no similarity in the dominant features of both trademarks.
Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly
similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can
possibly be deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was
presented by SMC proving otherwise.

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Besides the dissimilarity in their names, the following other dissimilarities in the trade dress or
appearance of the competing products abound:
(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.
The BEER PALE PILSEN bottle has a fat, bulging neck.
(2) The words "pale pilsen" on SMC's label are printed in bold and laced letters along
a diagonal band, whereas the words "pale pilsen" on ABI's bottle are half the size and printed
in slender block letters on a straight horizontal band. (See Exhibit "8-a".).
(3) The names of the manufacturers are prominently printed on their respective bottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery, Philippines," whereas
BEER PALE PILSEN is "Especially brewed and bottled by Asia Brewery Incorporated,
Philippines."
(4) On the back of ABI's bottle is printed in big, bold letters, under a row of flower buds and
leaves, its copyrighted slogan:
"BEER NA BEER!"
Whereas SMC's bottle carries no slogan.
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the
BEER PALE PILSEN bottle has no logo.
(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words
"San Miguel Brewery Philippines" encircling the same.
The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the center,
surrounded by the words "Asia Brewery Incorporated Philippines."
(7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at
P4.25 per bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who
pays only P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen from the
storekeeper or bartender.
The fact that the words pale pilsen are part of ABI's trademark does not constitute an
infringement of SMC's trademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic
words descriptive of the color ("pale"), of a type of beer ("pilsen"), which is a light bohemian
beer with a strong hops flavor that originated in the City of Pilsen in Czechoslovakia and
became famous in the Middle Ages. (Webster's Third New International Dictionary of the
English Language, Unabridged. Edited by Philip Babcock Gove. Springfield, Mass.: G & C
Merriam Co., [c] 1976, page 1716.) "Pilsen" is a "primarily geographically descriptive word,"
(Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of R.A. No. 638) hence, nonregisterable and not appropriable by any beer manufacturer. The Trademark Law provides:
Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to
distinguish his goods, business or services from the goods, business or
services of others shall have the right to register the same [on the principal
register], unless it:
xxx xxx xxx
(e) Consists of a mark or trade-name which, when applied to or used in
connection with the goods, business or services of the applicant is merely

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descriptive or deceptively misdescriptive of them, or when applied to or used


in connection with the goods, business or services of the applicant
is primarily geographically descriptive or deceptively misdescriptive of them,
or is primarily merely a surname." (Emphasis supplied.)
The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are
part of its registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive
words as "evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking
oil" may be appropriated by any single manufacturer of these food products, for no other
reason than that he was the first to use them in his registered trademark. In Masso
Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it was held that a dealer in
shoes cannot register "Leather Shoes" as his trademark because that would be merely
descriptive and it would be unjust to deprive other dealers in leather shoes of the right to use
the same words with reference to their merchandise. No one may appropriate generic or
descriptive words. They belong to the public domain (Ong Ai Gui vs. Director of Patents, 96
Phil. 673, 676 [1955]):
A word or a combination of words which is merely descriptive of an article of
trade, or of its composition, characteristics, or qualities, cannot be
appropriated and protected as a trademark to the exclusion of its use by
others. . . . inasmuch as all persons have an equal right to produce and vend
similar articles, they also have the right to describe them properly and to use
any appropriate language or words for that purpose, and no person can
appropriate to himself exclusively any word or expression, properly
descriptive of the article, its qualities, ingredients or characteristics, and thus
limit other persons in the use of language appropriate to the description of
their manufactures, the right to the use of such language being common to
all. This rule excluding descriptive terms has also been held to apply to tradenames. As to whether words employed fall within this prohibition, it is said
that the true test is not whether they are exhaustively descriptive of the article
designated, but whether in themselves, and as they are commonly used by
those who understand their meaning, they are reasonably indicative and
descriptive of the thing intended. If they are thus descriptive, and not
arbitrary, they cannot be appropriated from general use and become the
exclusive property of anyone. (52 Am. Jur. 542-543.)
. . . . Others may use the same or similar descriptive word in connection with
their own wares, provided they take proper steps to prevent the public being
deceived. (Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. [2d]
598.)
. . . . A descriptive word may be admittedly distinctive, especially if the user is
the first creator of the article. It will, however, be denied protection, not
because it lacks distinctiveness, but rather because others are equally
entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. 869870.)" (Emphasis supplied.)
The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated,
has printed its name all over the bottle of its beer product: on the label, on the back of the
bottle, as well as on the bottle cap, disproves SMC's charge that ABI dishonestly and
fraudulently intends to palm off its BEER PALE PILSEN as SMC's product. In view of the
visible differences between the two products, the Court believes it is quite unlikely that a
customer of average intelligence would mistake a bottle of BEER PALE PILSEN for SAN
MIGUEL PALE PILSEN.
The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in ambercolored steinie bottles of 320 ml. capacity and is also advertised in print, broadcast, and
television media, does not necessarily constitute unfair competition.

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Unfair competition is the employment of deception or any other means contrary to good faith
by which a person shall pass off the goods manufactured by him or in which he deals, or his
business, or services, for those of another who has already established goodwill for his similar
goods, business or services, or any acts calculated to produce the same result. (Sec. 29,
Republic Act No. 166, as amended.) The law further enumerates the more common ways of
committing unfair competition, thus:
Sec. 29. . . .
In particular, and without in any way limiting the scope of unfair competition,
the following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give 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 devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer other than the actual
manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and 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
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
(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 discredit the goods, business or services of another.
In this case, the question to be determined is whether ABI is using a name or mark for its beer
that has previously come to designate SMC's beer, or whether ABI is passing off its BEER
PALE PILSEN as SMC's SAN MIGUEL PALE PILSEN.
. . ..The universal test question is whether the public is likely to be deceived.
Nothing less than conduct tending to pass off one man's goods or business
as that of another will constitute unfair competition. Actual or probable
deception and confusion on the part of the customers by reason of
defendant's practices must always appear. (Shell Co., of the Philippines, Ltd.
vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil. 434, 439.)
The use of ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE
PILSEN bottle, is not unlawful. As pointed out by ABI's counsel, SMC did not invent but
merely borrowed the steinie bottle from abroad and it claims neither patent nor trademark
protection for that bottle shape and design. (See rollo, page 55.) The Cerveza Especial and
the Efes Pale Pilsen use the "steinie" bottle. (See Exhibits 57-D, 57-E.) The trial court found
no infringement of SMC's bottle
The court agrees with defendant that there is no infringement of plaintiff's
bottle, firstly, because according to plaintiff's witness Deogracias Villadolid, it
is a standard type of bottle called steinie, and to witness Jose Antonio Garcia,
it is not a San Miguel Corporation design but a design originally developed in
the United States by the Glass Container Manufacturer's Institute and
therefore lacks exclusivity. Secondly, the shape was never registered as a
trademark. Exhibit "C" is not a registration of a beer bottle design required
under Rep. Act 165 but the registration of the name and other marks of

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21

ownership stamped on containers as required by Rep. Act 623. Thirdly, the


neck of defendant's bottle is much larger and has a distinct bulge in its
uppermost part. (p. 186, Rollo.)
The petitioner's contention that bottle size, shape and color may not be the exclusive property
of any one beer manufacturer is well taken. SMC's being the first to use the steinie bottle
does not give SMC a vested right to use it to the exclusion of everyone else. Being of
functional or common use, and not the exclusive invention of any one, it is available to all who
might need to use it within the industry. Nobody can acquire any exclusive right to market
articles supplying simple human needs in containers or wrappers of the general form, size
and character commonly and immediately used in marketing such articles (Dy Buncio vs. Tan
Tiao Bok, 42 Phil. 190, 194-195.)
. . . protection against imitation should be properly confined to nonfunctional
features. Even if purely functional elements are slavishly copied, the
resemblance will not support an action for unfair competition, and the first
user cannot claim secondary meaning protection. Nor can the first user
predicate his claim to protection on the argument that his business was
established in reliance on any such unpatented nonfunctional feature, even
"at large expenditure of money." (Callman Unfair Competition, Trademarks
and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.)
ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie
bottle which has a fat bulging neck to differentiate it from SMC's bottle. The amber color is a
functional feature of the beer bottle. As pointed out by ABI, all bottled beer produced in the
Philippines is contained and sold in amber-colored bottles because amber is the most
effective color in preventing transmission of light and provides the maximum protection to
beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and Candy Co., 38
F2d 885, a merchant cannot be enjoined from using a type or color of bottle where the same
has the useful purpose of protecting the contents from the deleterious effects of light rays.
Moreover, no one may have a monopoly of any color. Not only beer, but most medicines,
whether in liquid or tablet form, are sold in amber-colored bottles.
That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMC's bottle
because that bottle capacity is the standard prescribed under Metrication Circular No. 778,
dated 4 December 1979, of the Department of Trade, Metric System Board.
With regard to the white label of both beer bottles, ABI explained that it used the color white
for its label because white presents the strongest contrast to the amber color of ABI's bottle; it
is also the most economical to use on labels, and the easiest to "bake" in the furnace (p. 16,
TSN of September 20, 1988). No one can have a monopoly of the color amber for bottles, nor
of white for labels, nor of the rectangular shape which is the usual configuration of labels.
Needless to say, the shape of the bottle and of the label is unimportant. What is all important
is the name of the product written on the label of the bottle for that is how one beer may be
distinguished form the others.
In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products were
both labelled as Formosan tea, both sold in 5-ounce packages made of ordinary wrapping
paper of conventional color, both with labels containing designs drawn in green ink and
Chinese characters written in red ink, one label showing a double-decked jar in the center, the
other, a flower pot, this court found that the resemblances between the designs were not
sufficient to mislead the ordinary intelligent buyer, hence, there was no unfair competition. The
Court held:
. . . . In order that there may be deception of the buying public in the sense
necessary to constitute unfair competition, it is necessary to suppose a public
accustomed to buy, and therefore to some extent familiar with, the goods in
question. The test of fraudulent simulation is to be found in the likelihood of
the deception of persons in some measure acquainted with an established

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design and desirous of purchasing the commodity with which that design has
been associated. The test is not found in the deception, or possibility of the
deception, of the person who knows nothing about the design which has
been counterfeited, and who must be indifferent as between that and the
other. The simulation, in order to be objectionable, must be such as appears
likely to mislead the ordinarily intelligent buyer who has a need to supply and
is familiar with the article that he seeks to purchase.
The main thrust of SMC's complaint if not infringement of its trademark, but unfair competition
arising form the allegedly "confusing similarity" in the general appearance or trade dress of
ABI's BEER PALE PILSEN beside SMC's SAN MIGUEL PALE PILSEN (p. 209, Rollo)
SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly similar" to its SAN
MIGUEL PALE PILSEN because both are bottled in 320 ml. steinie type, amber-colored
bottles with white rectangular labels.
However, when as in this case, the names of the competing products are clearly different and
their respective sources are prominently printed on the label and on other parts of the bottle,
mere similarity in the shape and size of the container and label, does not constitute unfair
competition. The steinie bottle is a standard bottle for beer and is universally used. SMC did
not invent it nor patent it. The fact that SMC's bottle is registered under R.A. No. 623 (as
amended by RA 5700, An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes,
Casks, Kegs, Barrels and Other Similar Containers) simply prohibits manufacturers of other
foodstuffs from the unauthorized use of SMC's bottles by refilling these with their products. It
was not uncommon then for products such as patis (fish sauce) and toyo (soy sauce) to be
sold in recycled SAN MIGUEL PALE PILSEN bottles. Registration of SMC's beer bottles did
not give SMC a patent on the steinie or on bottles of similar size, shape or color.
Most containers are standardized because they are usually made by the same manufacturer.
Milk, whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of
the standard ketchup or vinegar bottle with its familiar elongated neck. Many other grocery
items such as coffee, mayonnaise, pickles and peanut butter are sold in standard glass jars.
The manufacturers of these foodstuffs have equal right to use these standards tins, bottles
and jars for their products. Only their respective labels distinguish them from each other. Just
as no milk producer may sue the others for unfair competition because they sell their milk in
the same size and shape of milk can which he uses, neither may SMC claim unfair
competition arising from the fact that ABI's BEER PALE PILSEN is sold, like SMC's SAN
MIGUEL PALE PILSEN in amber steinie bottles.
The record does not bear out SMC's apprehension that BEER PALE PILSEN is being passed
off as SAN MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of
beer generally order their beer by brand. As pointed out by ABI's counsel, in supermarkets
and tiendas, beer is ordered by brand, and the customer surrenders his empty replacement
bottles or pays a deposit to guarantee the return of the empties. If his empties are SAN
MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE PILSEN as replacement. In sari-sari
stores, beer is also ordered from the tindera by brand. The same is true in restaurants, pubs
and beer gardens beer is ordered from the waiters by brand. (Op. cit. page 50.)
Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic
beer market for the past hundred years, those who have been drinking no other beer but SAN
MIGUEL PALE PILSEN these many years certainly know their beer too well to be deceived by
a newcomer in the market. If they gravitate to ABI's cheaper beer, it will not be because they
are confused or deceived, but because they find the competing product to their taste.
Our decision in this case will not diminish our ruling in "Del Monte Corporation vs. Court of
Appeals and Sunshine Sauce Manufacturing Industries," 181 SCRA 410, 419, 3 that:

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23

. . . to determine whether a trademark has been infringed, we must consider


the mark as a whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of it.
That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving
cases of infringement and unfair competition, the courts should "take into consideration
several factors which would affect its conclusion, to wit: the age, training and education of the
usual purchaser, the nature and cost of the article, whether the article is bought for immediate
consumption and also the conditions under which it is usually purchased" (181 SCRA 410,
418-419).
The Del Monte case involved catsup, a common household item which is bought off the store
shelves by housewives and house help who, if they are illiterate and cannot identify the
product by name or brand, would very likely identify it by mere recollection of its appearance.
Since the competitor, Sunshine Sauce Mfg. Industries, not only used recycled Del Monte
bottles for its catsup (despite the warning embossed on the bottles: "Del Monte Corporation.
Not to be refilled.") but also used labels which were "a colorable imitation" of Del Monte's
label, we held that there was infringement of Del Monte's trademark and unfair competition by
Sunshine.
Our ruling in Del Monte would not apply to beer which is not usually picked from a store shelf
but ordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or
restaurant.
Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not infringed by ABI's
mark: "BEER NA BEER" or "BEER PALE PILSEN." ABI makes its own bottle with a bulging
neck to differentiate it from SMC's bottle, and prints ABI's name in three (3) places on said
bottle (front, back and bottle cap) to prove that it has no intention to pass of its "BEER" as
"SAN MIGUEL."
There is no confusing similarity between the competing beers for the name of one is "SAN
MIGUEL" while the competitor is plain "BEER" and the points of dissimilarity between the two
outnumber their points of similarity.
Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with
the latter's SAN MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly
competes with the latter in the open market, that competition is neither unfair nor fraudulent.
Hence, we must deny SMC's prayer to suppress it.
WHEREFORE, finding the petition for review meritorious, the same is hereby granted. The
decision and resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby set
aside and that of the trial court is REINSTATED and AFFIRMED. Costs against the private
respondent.
SO ORDERED.

G.R. No. L-6235

March 28, 1955

ONG AI GUI alias TAN AI GUI, applicant-petitioner,


vs.
the Director of the Philippines Patent Office, respondent.
E. I. DU PONT DE NEMOURS AND COMPANY, intervenor.

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24

Jose P. Laurel for petitioner.


Solicitor General Juan R. Liwag and Solicitor Pacifico P. de Castro for respondent.
J. A. Wolfson for intervenor.
LABRADOR, J.:
On November 8, 1948, Ong Ai Gui alias Tan Ai Gui filed an application (No. 803) with the
Director of Patents for the registration of the following trade-name: "20th Century Nylon Shirts
Factory." It is stated in connection with the application that the trade-name was used for the
first time by the applicant on September 12, 1941 for his business described as follows:
"General merchandise dealing principally in textiles, haberdasheries; also operating as
manufacturer of shirts, pants and other men's and woman's wears." Upon the filing of the
application, the same was referred by the Director to an examiner. The latter in a report dated
August 18, 1950 held that the words "shirts factory" are not registrable; so the applicant made
a disclaimer of said words (shirts factory) inserting a statement to that effect in his original
application. On August 13, 1951 the Director ordered the publication of the trade-name in the
official Gazette.
Publication was made but before the expiration of the period for filing opposition, Atty. J. A.
Wolfson, on behalf of E. I. De Pont de Nemours and Company, presented on February 27,
1952, an opposition on the ground that the word "nylon" was a name coined by E. I. Du Pont
de Nemours and Company as the generic name of a synthetic fabric material, invented,
patented, manufactured and sold by it and that this word is a generic term; that the use of the
name "nylon" is descriptive or deceptively misdescriptive of the goods, business of
manufactures of the applicant; that the use of the name would produce confusion in trade and
would deceive the public; and that "nylon" is not distinctive of applicant's goods; business and
manufactures and applicant does not claim that it has so become. This opposition, however,
was dismissed by the Director on the ground that at the time it was submitted Atty. J. A.
Wolfson did not have, nor did he submit, authority to file it (opposition) in the corporate name,
and that the subsequent authorization from the corporation to that effect did not cure the
general defect in the opposition.
But while he dismissed the opposition, the Director ruled that the application must be
disapproved unless the word "nylon" is also disclaimed. The grounds for the disapproval of
the application were as follows:
"Nylon" is merely descriptive of the business of shirt-making if the shirts are made of
nylon. It is deceptively misdescriptive of said business, if the shirts are not made of
nylon. In either case, its registration in the Principal Register as a trade-name, or as a
part of a trade-name, is expressly forbidden by subsection (e) of Section 4 of
Republic Act No. 166, as amended by Section 2 of Republic Act No. 638.
xxx

xxx

xxx

But even if the trade-name here in question were applied for under the said
subsection (f), "Nylon" would still have to be disclaimed. Used in connection with
shirt-making, "Nylon" can never become distinctive, can never acquire secondary
meaning, because it is a generic term, like cotton, silk, linen, or ramie. Just as no
length of use and no amount of advertising will make "cotton," "silk," "linen," or
"ramie," distinctive of shirts or of the business of making them, so no length of use
and no amount of advertising will make "nylon" distinctive of shirts or of the business
of manufacturing them."
Again the above decision applicant has filed an appeal to this Court. During the pendency of
this appeal, E. I. Du Pont de Nemours and Co. filed a petition to intervene, which petition was
granted. It has also, through counsel, filed a brief answering the arguments of the applicantappellant and supporting the decision appealed from.

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There are two main questions raised in the appeal, one legal and the other procedural. The
legal question is put up by the claim of the applicant-appellant that while he admits that the
term "nylon" is by itself alone descriptive and generic, what he desires to register is not the
said word alone but the whole combination of "20th Century Nylon Shirts Factory." It is to be
noted in answer to this contention that the Director of Patents has not completely denied the
registration of the whole trade-name. He has made a conditional denial only, permitting the
registration of the name but with the disclaimer of the terms "shirt factory" and "nylon." The
import of the decision is that the trade-name may be registered, but applicant-appellant may
not be entitled to the exclusive use of the terms "shirts factory" and "nylon" as against any
other who may subsequently use the said terms, juris publici, incapable of appropriation by
any single individual to the exclusion of others. This is supported by reason and authority.
A word or a combination of words which is merely descriptive of an article of trade, or
of its composition, characteristics, or qualities, cannot be appropriated and protected
as a trademark to the exclusion of its use by others. The reason for this is that
inasmuch as all persons have an equal right to produce and vend similar articles,
they also have the right to describe them properly and to use any appropriate to
himself exclusively any word or expression, properly descriptive of the article, its
qualities, ingredients, or characteristics, and thus limit other persons in the use of
language appropriate to the description of their manufactures, the right to the use of
such language being common to all. This rule excluding descriptive terms has also
been held to apply to trade-names. As to whether words employed fall within this
prohibition, it is said that the true test is not whether they are exhaustively descriptive
of the article designated, but whether in themselves, and as they are commonly used
by those who understand their meaning, they are reasonably indicative and
descriptive of the thing intended. If they are thus descriptive, and not arbitrary, they
cannot be appropriated from general use and become the exclusive property of
anyone. (52 Am. Jur. 542-543.) .
. . . If the trade-name consists of a descriptive word, no monopoly of the right to use
the same can be acquired. This is but a corollary of the proposition that a descriptive
word cannot be the subject of a trade mark. G. & C. Merriam Co. vs. Salfield (C. C.
A.) 198, 369. Other may use the same or similar descriptive word in connection with
their own wares, provided they take proper steps to prevent the public being
deceived. . . . (Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. (sd) 598.)
. . . The so-called descriptive terms, which may be used to described the product
adequately, can not be monopolized by a single user and are available to all. It is only
natural that the trade will prefer those marks which bear some reference to the article
itself. Therefore, even those descriptive marks which are distinctive by themselves
can be appropriated by others with impunity. A descriptive word may be admittedly
distinctive, especially if the user is the first creator of the article. It will, however, be
denied protection, not because it lacks distinctiveness, but rather because others are
equally entitled to its use. . . (2 Callman. Unfair Competition and Trade Marks, pp.
869-870.)
The claim that a combination of words may be registered as a trade-name is no justification
for not applying the rules or principles hereinabove mentioned. The use of a generic term in a
trade-name is always conditional, i. e., subject to the limitation that the registrant does not
acquire the exclusive right to the descriptive or generic term or word.
. . . A combination of marks or words may constitute a valid trademark or (in the case
of words) a tradename even though some of the constituent portions thereof would
not be subject, separately, to exclusive appropriation as such. Thus, although a word
may be descriptive and not subject to exclusive use as a trademark, it may properly
become the subject of a trademark by combination with another word or term which is
nondescriptive, although no exclusive right to then descriptive word or term id created
. . . (52 Am. Jur. 553.)

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The citation of appellant himself supports the decision thus: ". . . although perhaps not entitled
to protection against infringement by the use of the descriptive matter by another." (Frost vs.
Rindskopt, 42 Fed. 408.)
It must also be noted that no claim is made in the application that the trade-name sought to
be registered has acquired what is known as a secondary meaning within the provisions of
paragraph (f) of section 4 of Republic Act No. 166. All that the applicant declares in his
statement accompanying his application is that the said trade-name has been continuously
used by it in business in the Philippines for about seven years, without allegation or proof that
the trade-name has become distinctive of the applicant's business or services. Furthermore,
the use of the term "nylon" in the trade-name is both "descriptive" and "deceptively and
misdescriptive" of the applicant-appellant's business, for apparently he does not use nylon in
the manufacture of the shirts, pants and wears that he produces and sells. How can a
secondary meaning be acquired if appellant's products are not made of nylon? Certainly no
exclusive right can be acquired by deception of fraud.
The procedural question arises from the fact that after the Director had ordered publication
and notwithstanding dismissal of an opposition, the Director nevertheless conditionally denied
the application after its publication and failed to give applicant opportunity for a hearing, as
specifically required by section 7 of Republic Act No. 166.
It is argued that after approval of the findings of the commissioner to whom the application id
referred and giving of the order of publication, it becomes the ministerial duty of the Director
to issue the corresponding certificate of registration and that his power is confined to this
issuance alone. The answer to this argument is the fact that the law allows oppositions to be
filed after publication, thus:
Sec. 8. Opposition. Any person who believes that he would be damaged by the
registration of a mark or trade-name may, upon payment of the required fee and
within thirty days after the publication under the first paragraph of section seven
hereof, file with the Director an opposition to the application. Such opposition shall be
in writing and verified by the oppositor, or by any person on his behalf who knows the
facts, and shall specify the grounds on which it is based and include a statement of
the facts relied upon. Copies of certificates of registration of marks or trade-names
registered in other countries or other supporting documents mentioned in the
opposition shall be filed therewith, together with the translation thereof into English, if
not in the English language. For good cause shown and upon payment of the
required surcharge, the time for filing an opposition may be extended for an additional
thirty days by the Director, who shall notify the applicant of such extension. (Republic
Act No. 166.)
Of what use is the period given to oppositors to register their oppositions if such oppositions
are not to be given consideration at all, because the Director has only the ministerial duty
after publication to issue the certificate of registration; the first is that conducted in the Office
of the Director and taking place prior to publication, and the second, that conducted after
publication, in which the public is given the opportunity to contest the application. In the first,
the application is referred to an examiner, who, after study and investigation makes a report
and recommendation to the Director who, upon finding that applicant is entitled to registration,
orders publication of the publication. (Sec. 7, Rep. Act No. 166.) If he finds that applicant is
not entitled to registration, he may then and there dismiss the application. In the second,
opportunity is offered the public or any interested party to come in and object to the petition
(Sec. 8, Id.), giving proofs and reasons for the objection, applicant being given opportunity
also to submit proofs or arguments in support of the application. (Sec. 9, Id.) It is the decision
of the Director, given after this hearing, or opportunity to every interested party to be heard,
that finally terminates the proceedings and in which the registration is finally approved or
disapproved. Thereafter, notice of the issuance of the certificate of registration is published.
(Sec. 10, Id.)

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It is evident that the decision of the Director after the first step, ordering publication, can not
have any finality. Of what use is the second step in the proceedings, if the Director is bound
by his first decision, giving course to the publication? His first decision is merely provisional, in
the sense that the application appears to be meritorious and is entitled to be given course
leading to the more formal and important second step of hearing and trial, where the public
and interested parties are allowed to take part.
The argument that the Director failed to comply with paragraph 2 of section 7, Republic Act
No. 166 cannot be raised in the case at bar, because the Director did not find that the
applicant is not entitled to registration. He actually found that he is entitled to registration and
that is why an order for the publication of the application was issued. How can the Director
comply with the provisions of said paragraph 2 if he did not disapprove the applicant's petition
for registration?
We, therefore, find that the errors assigned in the appeal have not been committed id hereby
respondent Director of Patents. His decision is hereby affirmed, with costs against the
applicant-appellant.

[G.R. No. L-8072. October 31, 1956.]


LIM HOA, Petitioner, vs. DIRECTOR OF PATENTS, Respondent.
DECISION
MONTEMAYOR, J.:
On April 26, 1949, the Petitioner, Lim Hoa, filed with the Patent Office an application for the
registration of a trademark, consisting of a representation of two midget roosters in an attitude
of combat with the word Bantam printed above them, he claiming that he had used said
trademark on a food seasoning product since April 25 of that year. The application was
published in the Official Gazette in its issue of February, 1953, released for circulation on April
18, of the same year. On April 30, 1953, the Agricom Development Co., Inc., a domestic
corporation, opposed the application on several grounds, among others, that the trademark
sought to be registered was confusingly similar to its register mark, consisting of a pictorial
representation of a hen with the words Hen Brand and Marca Manok, which mark or brand
was also used on a food seasoning product, before the use of the trademark by the applicant.
It is a fact that the family of C. Javier Advincula, since the year 1946, had adopted and used
as a trademark of said food seasoning product manufactured by it, the pictorial representation
of a hen. In 1947, the members of the Advincula family organized the Agricom Development
Co., Inc., the Oppositor in this case, and said corporation took over the manufacture of the
same food product of the Advincula family, including the use of the brand of the pictorial
representation of a hen but adding to it the word Hen. In the year 1948, an addition was
made to the brand with the words Ve-Tsin, Hen Brand and Marca Manok, and since then,
on its food seasoning product at different times, labels were used, in different colors but
bearing the representation of a hen and the words just mentioned. So that the application to
register applicants brand, consisting of two roosters is an attitude of combat, with the word
Bantam printed above them, came along after the use and registration of the mark or brand
of the Oppositor corporation and its predecessor, the Advincula family.
After considering the application and the opposition thereto, and after comparing the two
brands, the Director of Patents issued his order dated June 26, 1954, wherein he found and
held that to allow the registration of the applicants trademark would likely cause confusion or
mistake or deceive purchasers, and he refused registration of said trademark, under Rule 178
of the Revised Rules of Practice in Trademark Cases, 1953. The Petitioner is now appealling
said order.
After a careful examination of the facts above mentioned, and after comparing the two
brands, we do not hesitate to say and to hold that there is such similarity between the two

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28

brands as to cause confusion in the mind of the public that buys the food seasoning product
on the strength and on the indication of the trademark or brand identifying or distinguishing
the same. In the case of Go Tiong Sa vs. Director of Patents, (95 Phil., 1), we had occasion to
say the following:chanroblesvirtuallawlibrary
cralaw It has been consistently held that the question of infringement of a trademark is to be
determined by the test of dominancy. Similarity in size, form, and color, while relevant, is not
conclusive. If the competing trademark contains the main or essential or dominant features of
another, and confusion and deception is likely to result, infringement takes place. Duplication
or imitation is not necessary; chan roblesvirtualawlibrarynor it is necessary that the infringing
label should suggest an effort to imitate. (C. Neilman Brewing Co. vs. Independent Brewing
Co., 191 F. 489, 495, citing Eagle White Lead Co. v. Pflugh (CC) 180 Fed. 579). The question
at issue in cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the public or deceive
purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F 2d 588, 590, citing
Procter and Gamble Co. vs. J. L. Prescot Co., 49 F 2d 959, 18 CCPA, Patents, 1433; chan
roblesvirtualawlibraryPepsodent Co. vs. Comfort Manufacturing Co., 83 F 2d 906; chan
roblesvirtualawlibrary23 CCPA, Patents, 124)
The danger of confusion in trademarks and brands which are similar may not be so great in
the case of commodities or articles of relatively great value, such as, radio and television sets,
air conditioning units, machinery, etc., for the prospective buyer, generally the head of the
family or a businessman, before making the purchase, reads the pamphlets and all literature
available, describing the article he is planning to buy, and perhaps even makes comparisons
with similar articles in the market. He is not likely to be deceived by similarity in the
trademarks because he makes a more or less thorough study of the same and may even
consult his friends about the relative merit and performance of the article or machinery, as
compared to others also for sale. But in the sale of a food seasoning product, a kitchen article
of everyday consumption, the circumstances are far different. Said product is generally
purchased by cooks and household help, sometimes illiterate who are guided by pictorial
representations and the sound of the word descriptive of said representation. The two
roosters appearing in the trademark of the applicant and the hen appearing on the trademark
of the Oppositor, although of different sexes, belong to the same family of chicken, known as
manok in all the principal dialects of the Philippines, and when a cook or a household help or
even a housewife buys a food seasoning product for the kitchen the brand of Manok or
Marca Manok would most likely be upper most in her mind and would influence her in
selecting the product, regardless of whether the brand pictures a hen or a rooster or two
roosters. To her, they are all manok. Therein lies the confusion, even deception.
We do not see why applicant could not have stretched his imagination even a little and
extended his choice to other members of the animal kingdom, as a brand to differentiate his
product from similar products in the market. In a similar case decided by this Tribunal
wherein, although one brand consisting of the representation of a rooster was already being
used by one party, another party wanted to register a similar brand, consisting of two roosters
on a similar product, namely, candy, this Court said:chanroblesvirtuallawlibrary
Counsel for Defendant insists that there is no real resemblance between a picture of one
rooster and a picture of two roosters; chan roblesvirtualawlibrarythat no person could or would
be deceived by the use by theDefendant of a trade-mark wholly distinct from that of
the Plaintiff; chan roblesvirtualawlibrarythat the fact that theDefendant used two roosters as
its trademark clearly discloses its innocence of any intent to deceive, since a comparison of
the trade-mark of the Plaintiff with that of the Defendant makes apparent at once that was not
intended to be an imitation of the other.
We ask, however, why, with all the birds in the air, and all the fishes in the sea, and all the
animals on the face of the earth to chose from, the Defendant company selected two roosters
as its trade- mark, although its directors, and managers must have been well aware of the
long-continued use of a rooster by the Plaintiff in connection with the sale and advertisement
of his goods?
There is nothing in the picture of one or more roosters which in itself is descriptive of the
goods sold by the Plaintiff or by the Defendant corporation, or suggestive of the quality of
these goods. A cat, or dog, a carabao, a shark, or an eagle stamped upon the container in

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29

which candies are sold would serve as well as a rooster for purposes of identification as the
product of Defendants factory. Why did Defendant select two roosters as its trade-mark? We
cannot doubt that it was because the Plaintiffs candies had acquired a certain reputation
under the trade-mark of a rooster, and the Defendant corporation hoped to profit unjustly by
that reputation. Defendantknew that the use of a single rooster would be prohibited as a
technical infringement of Plaintiffs trade-mark, but it hoped that it could avoid that danger by
the use of two roosters; chan roblesvirtualawlibraryand at the same time get such advantage
as it must have believed it could secure from the use of a design on the containers of its
goods, not absolutely identical with that used by the Plaintiff, but so similar in the dominant
idea as to confuse or mislead the purchasers cralaw . (Clarke vs. Manila Candy Co., 100
Phil. 36)
In view of the foregoing, the order appealed from is hereby affirmed, with costs. We do not
deem it necessary to discuss and rule upon the other questions raised in the appeal.

G.R. No. L-19297

December 22, 1966

MARVEX COMMERCIAL CO., INC., petitioner,


vs.
PETRA HAWPIA and CO., and THE DIRECTOR OF PATENTS, respondents.
Sta. Ana and Lasam for petitioner.
A.S. Donato for respondent Petra Hawpia and Co.
Office of the Solicitor General for respondent Director of Patents.
CASTRO, J.:
Petra Hawpia & Co., a partnership duly organized under the laws of the Philippines and doing
business at 543 M. de Santos (Botica Divisoria), Manila (hereinafter referred to as the
applicant), on October 14, 1958 filed a petition for the registration of the trademark
"LIONPAS" used on medicated plaster, with the Philippine Patent Office, asserting its
continuous use in the Philippines since June 9, 1958. 1 The Marvex Commercial Co., Inc., a
corporation also duly organized under the laws of the Philippines (hereinafter referred to as
the oppositor), on July 24, 1959 filed an opposition thereto, alleging that the registration of
such trademark would violate its right to and interest in the trademark "SALONPAS" used on
another medicated plaster, which is registered in its name under Certificate of Registration
5486, issued by the Director of Patents on September 29, 1956, and that both trademarks
when used on medicated plaster would mislead the public as they are confusingly similar.
After due hearing, the Director of Patents in his decision of August 18, 1961 dismissed the
opposition and gave due course to the petition, stating in part that "confusion, mistake, or
deception among the purchasers will not likely and reasonably occur" when both trademarks
are applied to medicated plaster. The oppositor moved to have the decision reconsidered.
This motion was denied in a resolution of November 27, 1961. The oppositor then interposed
the present appeal.
The issues stated by the Director of Patents in his decision are the same ones now tendered
by the oppositor for resolution, namely, (1) Is the applicant the owner of the trademark
"LIONPAS"?; (2) Should the application be rejected on the ground that the applicant made
false representations in placing the phrase "Reg. Phil. Pat. Off." below the trademark
"LIONPAS" on its cartons?, and (3) Is the trademark "LIONPAS" confusingly similar to the
trademark "SALONPAS"?
We do not consider the second issue of any importance; we will thus proceed to resolve the
first and third issues.

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30

Is the applicant the owner of the trademark "LIONPAS?"


Under sections 2 and 2-A of the Trade Mark Law, as amended, the right to register
trademarks, tradenames and service marks by any person, corporation, partnership or
association domiciled in the Philippines or in any foreign country, is based on ownership, and
the burden is upon the applicant to prove such ownership (Operators, Inc. vs. The Director of
Patents, et al., L-17901, Oct. 29, 1965).
The Director of Patents found, on the strength of exhibits 5 and 6 for the applicant, that the
latter has "satisfactorily shown" its ownership of the trademark sought to be registered. Exhibit
5 is a letter dated June 20, 1958, sent by "OSAKA BOEKI KAISHA, LTD." to the applicant
which tends to show that the former, for a $1 consideration, has assigned, ceded, and
conveyed all its "rights, interests and goodwill in the tradename LIONPAS Medicated
Plaster . . ." in favor of the latter. Exhibit 6 is a joint "SWORN STATEMENT" which appears to
have been executed by the presidents of "OSAKA BOEKI KAISHA, LTD." and "ASUNARO
PHARMACEUTICAL INDUSTRY CO.", and tends to confirm the contents of exhibit 5.
A careful scrutiny of exh. 5 will reveal, however, that the sender of the letter, "OSAKA BOEKI
KAISHA LTD.", and which appears to be the seller, is merely a representative of the
manufacturer "ASUNARO PHARMACEUTICAL INDUSTRY CO." There is no proof that as
such representative, the former has been authorized by the latter to sell the trademark in
question. Moreover, exh. 5 on its face appears to have been signed only by someone whose
position in the company's "Sundries Dept." is not described; the signature is not legible. It is
even contradicted by exh. 6. While exh. 5 shows that "OSAKA BOEKI KAISHA, LTD." is a
representative of "ASUNARO PHARMACEUTICAL INDUSTRY CO."; exh. 6 asserts that the
former is not a representative of the latter, but that it is the owner of the trademark "LIONPAS"
(par. 2, exh. 6). At all events, neither averment can be accorded the weight of an assignment
of ownership of the trademark in question under the Trade Mark Law. Exh. 5 is not
acknowledged. Exh. 6 does not bear the acknowledgment contemplated by the aforesaid law,
particularly by the last paragraph of section 37 and paragraph 2 of section 31 of R.A. 166, as
amended, which provide as follows:
The registration of a mark under the provisions of this section shall be independent of
the registration in the country of origin and the duration, validity or transfer in the
Philippines of such registration shall be governed by the provisions of this Act. (Sec.
37, last par.) (Emphasis ours)
The assignment must be in writing, acknowledged before a notary public or other
officer authorized to administer oaths or perform other notarial acts and certified
under the hand and official seal of the notary or other officer. (Sec. 31, par. 2)
In this case, although a sheet of paper is attached to exh. 6, on which is typewritten a
certification that the signatures of the presidents of the two named companies (referring to the
signatures in exh. 6) "have been duly written by themselves", this sheet is unmarked,
unpaged, unsigned, undated and unsealed. We have thumbed the record in quest of any
definitive evidence that it is a correct translation of the Japanese characters found on another
unmarked and unpaged sheet, and have found none.
It follows from the above disquisition that exhs. 5 and 6 are legally insufficient to prove that
the applicant is the owner of the trademark in question.
As a matter of fact, the other evidence on record conclusively belies the import of exh. 6.
Thus exh. A states that the applicant is merely the "exclusive distributor" in the Philippines of
the "LIONPAS" penetrative plaster; exh. A-1 describes the applicant as the "Philippine sole
distributor" of "LIONPAS"; exh. B simply states that "LIONPAS" is "manufactured exclusively
for Petra Hawpia & Co. for distribution in the Philippines."

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31

Not being the owner of the trademark "LIONPAS" but being merely an importer and/or
distributor of the said penetrative plaster, the applicant is not entitled under the law to register
it in its name (Operators, Inc. vs. Director of Patents, supra).
Upon the third issue, the applicant preliminarily asserts that there is no justification for this
Court to disturb any finding made by the Director of Patents on appeal. This assertion is not
tenable. Although the Director of Patents is the official vested by law with the power to
administer the registration of trademarks and tradenames, his opinion on the matter of
similarity or dissimilarity of trademarks and tradenames is not conclusive upon this Court
which may pass upon such determination.
The "SALONPAS" mark is not before this Court. Our meticulous examination of the entire
record has failed to yield a sample of such mark. We have therefore proceeded to analyze the
two marks, vis-a-vis each other, on the basis of what we can derive from the record for a
comparative study. And our conclusion, in disagreement with that of the Director of Patents, is
not based on a comparison of the appearance, form, style, shape, size or format of the
trademarks, which we can not make because, as we have already observed, the
"SALONPAS" mark is not before us, but on a comparison of the spelling, sound and
pronunciation of the two words.
It is our considered view that the trademarks "SALONPAS" and "LIONPAS" are confusingly
similar in sound.
Both these words have the same suffix, "PAS", which is used to denote a plaster that adheres
to the body with curative powers. "Pas, being merely descriptive, furnishes no indication of the
origin of the article and therefore is open for appropriation by anyone (Ethepa vs. Director of
Patents, L-20635, March 31, 1966) and may properly become the subject of a trademark by
combination with another word or phrase.
Two letters of "SALONPAS" are missing in "LIONPAS"; the first letter a and the letter s. Be
that as it may, when the two words are pronounced, the sound effects are confusingly similar.
And where goods are advertised over the radio, similarity in sound is of especial significance
(Co Tiong Sa vs. Director of Patents, 95 Phil. 1 citing Nims, The Law of Unfair Competition
and Trademarks, 4th ed., vol. 2, pp. 678-679). "The importance of this rule is emphasized by
the increase of radio advertising in which we are deprived of help of our eyes and must
depend entirely on the ear" (Operators, Inc. vs. Director of Patents, supra).
The following random list of confusingly similar sounds in the matter of trademarks, culled
from Nims, Unfair Competition and Trade Marks, 1947, vol. 1, will reinforce our view that
"SALONPAS" and "LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop";
"Jantzen" and "Jazz-Sea"; "Silver Flash" and "Supper-Flash"; "Cascarete" and "Celborite";
"Celluloid" and "Cellonite"; "Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe"
and "Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo". Leon Amdur, in his book
"TradeMark Law and Practice", pp. 419-421, cites, as coming within the purview of
the idem sonans rule, "Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos", and
"Seven-Up" and "Lemon-Up". In Co Tiong vs. Director of Patents, this Court unequivocally
said that "Celdura" and "Cordura" are confusingly similar in sound; this Court held in Sapolin
Co. vs. Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement of the trademark
"Sapolin", as the sound of the two names is almost the same.
In the case at bar, "SALONPAS" and "LIONPAS", when spoken, sound very much alike.
Similarity of sound is sufficient ground for this Court to rule that the two marks are confusingly
similar when applied to merchandise of the same descriptive properties (see Celanese
Corporation of America vs. E. I. Du Pont, 154 F. 2d. 146, 148).
The registration of "LIONPAS" cannot therefore be given due course.

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32

ACCORDINGLY, the decision of the respondent Director of Patents is set aside, and the
petition below of the respondent Petra Hawpia & Co. is hereby dismissed, at the cost of the
latter respondent.

G.R. No. L-23023

August 31, 1968

JOSE P. STA. ANA, petitioner,


vs.
FLORENTINO MALIWAT and TIBURCIO S. EVALLE, in his capacity as Director of
Patents, respondents.
Rodolfo A. Francisco for petitioner.
Catalino S. Maravilla for respondent Florentino Maliwat.
Office of the Solicitor General for respondent Tiburcio S. Evalle.
REYES, J.B.L., J.:
Petition for review of the decision of the respondent Director of Patents in an interference
proceeding1 (Inter Partes Case No. 291), finding for the senior party applicant, Florentino
Maliwat, the herein private respondent, and against the junior party applicant 2 Jose P. Sta.
Ana, the herein petitioner.
On 21 June 1962, Florentino Maliwat filed with the Patent Office an application for registration
of the trademark FLORMANN, which is used on shirts, pants, jackets and shoes for ladies,
men, and children, claiming first use in commerce of the said mark on 15 January 1962. The
claim of first use was subsequently amended to 6 July 1955.
On 18 September 1962, Jose P. Sta. Ana filed an application for the registration of the
tradename FLORMEN SHOE MANUFACTURERS (SHOE MANUFACTURERS
disclaimed),3 which is used in the business of manufacturing ladies' and children's shoes. His
claim of first use in commerce of the said tradename is 8 April 1959.
In view of the admittedly confusing similarity between the trademark FLORMANN and the
tradename FLORMEN, the Director of Patents declared an interference. After trial, the
respondent Director gave due course to Maliwat's application and denied that of Sta. Ana.
The latter, not satisfied with the decision, appealed to this Court.
The petitioner assigned the following errors:
I. The Director of Patents erred in not finding that respondent (senior party-applicant)
failed to establish by clear and convincing evidence earlier date of use of his mark
FLORMANN than that alleged in his application for registration, hence, respondent is
not entitled to carry back the date of first use to a prior date.
II. The Director erred in holding that respondent is the prior adopter and user of his
mark and in concluding that this is strengthened with documentary evidence that
respondent has been using his mark since 1953 as tailor and haberdasher.
III. The Director of Patents erred in not finding false and fabricated respondent's
testimonial and documentary evidence and Director should have applied the rule
"Falsus in uno, falsus in omnibus" and should have disregarded them.
IV. The Director of Patents erred in declaring that Maliwat has the prior right to the
use of his trademark on shoes and such right may be carried back to the year 1953

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33

when respondent started his tailoring and haberdashery business and in holding that
the manufacture of shoes is within the scope of natural expansion of the business of
a tailor and haberdasher.
V. The Director of Patents erred in failing to apply the stricture that parties should
confine use of their respective marks to their corresponding fields of business, and
should have allowed the concurrent use of tradename FLORMEN SHOE
MANUFACTURERS and the trademark FLORMANN provided it is not used on shoes.
The findings of the Director that Maliwat was the prior adopter and user of the mark can not
be contradicted, since his findings were based on facts stipulated in the course of the trial in
the interference proceedings. The recorded stipulation is as follows:
ATTY. FRANCISCO: Your Honor please, with the mutual understanding of the
counsel for the Junior Party and the counsel for the Senior Party in their desire to
shorten the proceedings of this case, especially on matters that are admitted and not
controverted by both parties, they have agreed and admitted that Mr. Jose P. Sta.
Ana, the Junior Party Applicant in this case, is engaged solely in the manufacture of
shoes under the firm name FLORMEN SHOE MANUFACTURERS since April 1959;
that the name FLORMEN SHOE MANUFACTURERS is registered with the Bureau of
Commerce on April 8, 1959, as shown by Exhibits "A" and "A-2". That Mr. Florentino
Maliwat has been engaged in the manufacture and sale of menswear shirts, polo
shirts, and pants, since 1953, using FLORMANN as its trademark. That Mr. Florentino
Maliwat began using the trademark FLORMANN on shoes on January 1962 and the
firm name FLORMANN SHOES under which these shoes with the trademark
FLORMANN were manufactured and sold was first used on January 1962, having
also been registered with the Bureau of Commerce on January 1962 and with other
departments of the government, like the Bureau of Labor, the Social Security System
and the Workmen's Compensation in 1962.
ATTY. MARAVILLA: On behalf of the Senior Party Applicant, represented by this
humble representation, I respectfully concur and admit all those stipulations above
mentioned.
HEARING OFFICER: The court reserves the resolution on those stipulations. We can
proceed now with the redirect examination. (T.s.n., 9 August 1963, pp. 33-34).
And the Rules of Court provide:1wph1.t
Sec. 2. Judicial admissions. Admission made by the parties in the pleadings, or in
the course of the trial or other proceedings do not require proof and can not be
contradicted unless previously shown to have been made through palpable mistake."
(Rule 129, Revised Rules of Court).
Since the aforequoted stipulation of facts has not been shown to have been made through
palpable mistake, it is vain for the petitioner to allege that the evidence for respondent Maliwat
is false, fabricated, inconsistent, indefinite, contradictory, unclear, unconvincing, and
unsubstantial.
The rule on judicial admissions was not found or provided for in the old Rules but can be
culled from rulings laid down by this Court previous to its revision (Irlanda v. Pitargue, 22 Phil.
383; 5 Moran 57-59, 1963 Ed.). It was the law, then and now, being an application of the law
on estoppel.
To be true, petitioner Sta. Ana, through counsel, filed with this Court, on 24 December 1964, a
motion entitled "MOTION TO ORDER STENOGRAPHER TO PRODUCE STENOGRAPHIC
NOTES AND TO CORRECT TRANSCRIPT OF STENOGRAPHIC NOTES; TO ALLOW
PETITIONER TO WITHDRAW FROM STIPULATION OF FACTS AND BE ALLOWED TO

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PRESENT ADDITIONAL EVIDENCE; AND TO SUSPEND PERIOD FOR FILING


PETITIONER'S BRIEF." The reason given was that "counsel for Mr. Jose P. Sta. Ana does not
recall making any stipulation or agreement of facts with the counsel of Mr. Florentino Maliwat
on 9 August 1963." Opposition thereto was filed by Maliwat, asserting that the stenographer
took down notes on those things which were stated and uttered by the parties; that movant
should have moved for reconsideration in the Patent Office, instead of here in the Supreme
Court, which is both untimely and unhonorable.
Upon requirement by this Court, stenographer Cleofe Rosales commented on petitioner's
motion that what she had taken down were actually uttered by counsel for Sta. Ana, no more,
no less; that it was practically and highly impossible for her to have intercalated into the
records the questioned stipulation of facts because of the length of counsel's manifestations
and the different subject matters of his statements, aside from the concurrence of Maliwat's
counsel and the reservation on the resolution made by the hearing officer; and that despite
her length of service, since 1958, as stenographic reporter, there had been no complaint
against her, except this one.
Counsel for Sta. Ana replied to the foregoing comments, alleging, among others, that after his
receipt of the decision, after 5 May 1964, he bought the transcript and requested the
stenographer to verify the contents of pages 33 and 34 of her transcript but, despite several
requests, and for a period of seven (7) months, for her to produce the stenographic notes, she
has failed to produce said notes.
On 2 April 1965, stenographer Rosales sent to the clerk of this Court the transcript of
stenographic notes.
This Court, on 2 February 1965, denied, for being late the motion to present additional
testimonial and documentary evidence, and, on 8 April 1965, deferred action on the objection
to a portion of the transcript until after hearing.
We find no substantiation of the charge that the stipulation of facts appearing on pages 33 to
34 of the transcript of stenographic notes taken on 9 August 1963 had been intercalated;
hence, the presumption that the stenographer regularly performed her duty stands. The
integrity of the record being intact, the petitioner is bound by it. We can not overlook that even
if his charges were true, it was plain and inexcusable negligence on his part not to discover
earlier the defect he now complains of, if any, and in not taking steps to correct it before the
records were elevated to this Court.
An application for registration is not bound by the date of first use as stated by him in his
application, but is entitled to carry back said stated date of first use to a prior date by proper
evidence; but in order to show an earlier date of use, he is then under a heavy burden, and
his proof must be clear and convincing (Anchor Trading Co., Inc. vs. The Director of Patents,
et al., L-8004, 30 May 1956; Chung Te vs. Ng Kian Giab, et al.,
L-23791, 23 November 1966). In the case at bar, the proof of date of first use (1953), earlier
than that alleged in respondent Maliwat's application (1962), can be no less than clear and
convincing because the fact was stipulated and no proof was needed.
Petitioner would confine the respondent to the use of the mark FLORMANN to tailoring and
haberdashery only, but not on shoes, on the ground that petitioner had used the name
FLORMEN on shoes since 1959, while the respondent used his mark on shoes only in 1962;
but the Director ruled:
. . . I believe that it is now the common practice among local tailors and haberdashers
to branch out into articles of manufacture which have, one way or another, some
direct relationship with or appurtenance to garments or attire to complete one's
wardrobe such as belts, shoes, handkerchiefs, and the like, . . . It goes without saying
that shoes on one hand and shirts, pants and jackets on the other, have the same
descriptive properties for purposes of our Trademark Law.

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35

Modern law recognizes that the protection to which the owner of a trademark mark is entitled
is not limited to guarding his goods or business from actual market competition with identical
or similar products of the parties, but extends to all cases in which the use by a junior
appropriator of a trademark or tradename is likely to lead to a confusion of source, as where
prospective purchasers would be misled into thinking that the complaining party has extended
his business into the field (see 148 ALR 56 et seq; 52 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it forestalls the normal potential
expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577). It is on this basis that
the respondent Director of Patents adverted to the practice "among local tailors and
haberdashers to branch out into articles of manufacture which have some direct relationship" .
. . "to garments or attire to complete one's wardrobe". Mere dissimilarity of goods should not
preclude relief where the junior user's goods are not too different or remote from any that the
owner would be likely to make or sell; and in the present case, wearing apparel is not so far
removed from shoes as to preclude relief, any more than the pancake flour is from syrup or
sugar cream (Aunt Jemima Mills Co. vs. Rigney & Co., LRA 1918 C 1039), or baking powder
from baking soda (Layton Pure Food Co. vs. Church & Co., 182 Fed. 35), or cosmetics and
toilet goods from ladies' wearing apparel and costume jewelry (Lady Esther Ltd. vs. Lady
Esther Corset Shoppe, 148 ALR 6). More specifically, manufacturers of men's clothing were
declared entitled to protection against the use of their trademark in the sale of hats and caps
[Rosenberg Bros. vs. Elliott, 7 Fed. (2d) 962] and of ladies shoes (Forsythe & Co. vs.
Forsythe Shoe Corp., 254 NYS 584). In all these cases, the courts declared the owner of a
trademark from the first named goods entitled to exclude use of its trademark on the related
class of goods above-referred to.
It may be that previously the respondent drew a closer distinction among kinds of goods to
which the use of similar marks could be applied; but it can not be said that the present ruling
under appeal is so devoid of basis in law as to amount to grave abuse of discretion warranting
reversal.
Republic Act No. 166, as amended, provides:
Sec. 4. . . . The owner of a trademark, tradename or service-mark used to distinguish
his goods, business or services from the goods, business or services of others shall
have the right to register the same on the principal register, unless it:
xxx

xxx

xxx

xxx

xxx

xxx

(d) Consists of or comprises a mark or tradename which resembles a mark or


tradename registered in the Philippines or a mark or tradename previously used in
the Philippines by another and not abandoned, as to be likely, when applied to or
used in connection with the goods, business or services of the applicant, to cause
confusion or mistake or to deceive purchasers;
xxx

xxx

xxx

Note that the provision does not require that the articles of manufacture of the previous user
and the late user of the mark should possess the same descriptive properties or should fall
into the same categories as to bar the latter from registering his mark in the principal register
(Chua Che vs. Phil. Patent Office, et al., L-18337, 30 Jan. 1965. 4 citing Application of Sylvan
Sweets Co., 205 F. 2nd, 207).5 Therefore, whether or not shirts and shoes have the same
descriptive properties, or whether or not it is the prevailing practice or the tendency of tailors
and haberdashers to expand their business into shoes making, are not controlling. The meat
of the matter is the likelihood of confusion, mistake or deception upon purchasers of the
goods of the junior user of the mark and the goods manufactured by the previous user. Here,
the resemblance or similarity of the mark FLORMANN and the name FLORMEN and the

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36

likelihood of confusion, one to the other, is admitted; therefore, the prior adopter, respondent
Maliwat, has the better right to the use of the mark.
FOR THE FOREGOING REASONS, the appealed decision is hereby affirmed, with costs
against the petitioner.

G.R. No. L-28744 April 29, 1971


ACOJE MINING CO., INC., petitioner-applicant,
vs.
THE DIRECTOR OF PATENTS, respondent.
Manuel M. Antonio and Roman G. Pacia for petitioner.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Frine' C.
Zaballero, Solicitor Antonio M. Martinez and Attorney Amado L. Marquez for respondent.

FERNANDO, J.:
The issue before us is simple and uncomplicated. May petitioner Acoje Mining Company
register for the purpose of advertising its product, soy sauce, the trademark LOTUS, there
being already in existence one such registered in favor of the Philippine Refining Company for
its product, edible oil, it being further shown that the trademark applied for is in smaller type,
colored differently, set on a background which is dissimilar as to yield a distinct appearance?
The answer of the Director of Patents was in the negative. Hence this appeal which we
sustain in the light of the controlling norm as set forth in the American Wire & Cable Co.
care. 1 The facts as set forth in the appealed decision follow: "On September 14, 1965, Acoje
Mining Co., Inc. a domestic corporation, filed an application for registration of the trademark
LOTUS, used on Soy Sauce, Class 47. Use in commerce in the Philippines since June 1,
1965 is asserted. The Chief trademark Examiner finally rejected the application by reason of
confusing similarity with the trademark LOTUS registered in this Office under Certificate of
Registration No. 12476 issued in favor of Philippine Refining CO., Inc., another domestic
corporation. The cited mark is being used on edible oil, Class 47." 2 The matter was then
elevated to respondent Director of Patents who, on January 31, 1968, upheld the view of the
Chief Trademark Examiner and rejected the application of Petitioner on the ground that while
there is a difference between soy sauce and edible oil and there were dissimilarities in the
trademarks due to type of letters used as well as in the size, color and design employed, still
the close relationship of the products, soy sauce and edible oil, is such "that purchasers
would be misled into believing that they have a common source." 3
This petition for its review was filed with this Court on March 6, 1968. After the submission of
the briefs on behalf of petitioner and respondent, the case was deemed submitted. As set
forth at the outset the decision of respondent Director of Patents is reversed.
The decisive test as to whether an application for a trademark should be affirmatively acted
upon or not is clearly set forth in the decision already referred to, promulgated barely a year
ago. In the language of Justice J. B. L. Reyes, who spoke for the Court in American Wire &
Cable Co. v. Director of Patents: 4 "It is clear from the above-quoted provision that the
determinative factor in a contest involving registration of trade mark is not whether the
challenging mark would actually cause confusion or deception of the purchasers but whether
the use of such mark would likely cause confusion or mistake on the part of the buying public.
In short, to constitute an infringement of an existing trade-mark patent and warrant a denial of
an application for registration, the law does not require that the competing trademarks must

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be so identical as to produce actual error or mistake; it would be sufficient, for purposes of the
law, that the similarity between the two labels, is such that there is a possibility or likelihood of
the purchaser of the older brand mistaking the newer brand for it." 5
Can it be said then that petitioner's application would be likely to cause confusion or mistake
on the part of the buying public? The answer should be in the negative. It does not defy
common sense to assert that a purchaser would be cognizant of the product he is buying.
There is quite difference between soy sauce and edible oil. If one is in the market for the
former, he is not likely to purchase the latter just because of the trademark LOTUS. Even on
the rare occasions that a mistake does occur, it can easily be rectified. Moreover, there is no
denying that the possibility of confusion is remote considering the difference in the type used,
the coloring, the petitioner's trademark being in yellow and red while that of the Philippine
Refining Company being in green and yellow, and the much smaller size of petitioner's
trademark. When regard is had for the principle that the two trademarks in their entirety as
they appear in their respective labels should be considered in relation to the goods advertised
before registration could be denied, the conclusion is inescapable that respondent Director
ought to have reached a different conclusion. Petitioner has successfully made out a case for
registration. 6
WHEREFORE, the decision of respondent Director of Patents of January 31, 1968 is
reversed and petitioner's application for registration of its trademark LOTUS granted. Without
costs.

G.R. No. L-29971 August 31, 1982


ESSO STANDARD EASTERN, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS ** and UNITED CIGARETTE
CORPORATION, respondents.
&
TEEHANKEE, J.:1wph1.t
The Court affirms on the basis of controlling doctrine the appealed decision of the Court of
Appeals reversing that of the Court of First Instance of Manila and dismissing the complaint
filed by herein petitioner against private respondent for trade infringement for using
petitioner's trademark ESSO, since it clearly appears that the goods on which the trademark
ESSO is used by respondent is non-competing and entirely unrelated to the products of
petitioner so that there is no likelihood of confusion or deception on the part of the purchasing
public as to the origin or source of the goods.
Petitioner Esso Standard Eastern, Inc., 1 then a foreign corporation duly licensed to do
business in the Philippines, is engaged in the sale of petroleum products which are Identified
with its trademark ESSO (which as successor of the defunct Standard Vacuum Oil Co. it
registered as a business name with the Bureaus of Commerce and Internal Revenue in April
and May, 1962). Private respondent in turn is a domestic corporation then engaged in the
manufacture and sale of cigarettes, after it acquired in November, 1963 the business, factory
and patent rights of its predecessor La Oriental Tobacco Corporation, one of the rights thus
acquired having been the use of the trademark ESSO on its cigarettes, for which a permit had
been duly granted by the Bureau of Internal Revenue.
Barely had respondent as such successor started manufacturing cigarettes with the
trademark ESSO, when petitioner commenced a case for trademark infringement in the Court
of First Instance of Manila. The complaint alleged that the petitioner had been for many years
engaged in the sale of petroleum products and its trademark ESSO had acquired a

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considerable goodwill to such an extent that the buying public had always taken the
trademark ESSO as equivalent to high quality petroleum products. Petitioner asserted that the
continued use by private respondent of the same trademark ESSO on its cigarettes was being
carried out for the purpose of deceiving the public as to its quality and origin to the detriment
and disadvantage of its own products.
In its answer, respondent admitted that it used the trademark ESSO on its own product of
cigarettes, which was not Identical to those produced and sold by petitioner and therefore did
not in any way infringe on or imitate petitioner's trademark. Respondent contended that in
order that there may be trademark infringement, it is indispensable that the mark must be
used by one person in connection or competition with goods of the same kind as the
complainant's.
The trial court, relying on the old cases of Ang vs. Teodoro 2 and Arce & Sons, Inc. vs.
Selecta Biscuit Company, 3referring to related products, decided in favor of petitioner and
ruled that respondent was guilty of infringement of trademark.
On appeal, respondent Court of Appeals found that there was no trademark infringement and
dismissed the complaint. Reconsideration of the decision having been denied, petitioner
appealed to this Court by way of certiorari to reverse the decision of the Court of Appeals and
to reinstate the decision of the Court of First Instance of Manila. The Court finds no ground for
granting the petition.
The law defines infringement as the use without consent of the trademark owner of any
"reproduction, counterfeit, copy or colorable limitation of any registered mark or tradename in
connection with the sale, offering for sale, or advertising of any goods, business or services
on or in connection with which such use is likely to cause confusion or mistake or to deceive
purchasers or others as to the source or origin of such goods or services, or Identity of such
business; or reproduce, counterfeit, copy or colorably imitate any such mark or tradename
and apply such reproduction, counterfeit, copy or colorable limitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services." 4 Implicit in this definition is the concept
that the goods must be so related that there is a likelihood either of confusion of goods or
business. 5But likelihood of confusion is a relative concept; to be determined only according to
the particular, and sometimes peculiar, circumstances of each case. 6 It is unquestionably true
that, as stated in Coburn vs. Puritan Mills, Inc. 7 "In trademark cases, even more than in other
litigation, precedent must be studied in the light of the facts of the particular case.
It is undisputed that the goods on which petitioner uses the trademark ESSO, petroleum
products, and the product of respondent, cigarettes, are non-competing. But as to whether
trademark infringement exists depends for the most part upon whether or not the goods are
so related that the public may be, or is actually, deceived and misled that they came from the
same maker or manufacturer. For non-competing goods may be those which, though they are
not in actual competition, are so related to each other that it might reasonably be assumed
that they originate from one manufacturer. Non-competing goods may also be those which,
being entirely unrelated, could not reasonably be assumed to have a common source. in the
former case of related goods, confusion of business could arise out of the use of similar
marks; in the latter case of non-related goods, it could not. 8 The vast majority of courts today
follow the modern theory or concept of "related goods" 9 which the Court has likewise adopted
and uniformly recognized and applied. 10
Goods are related when they belong to the same class or have the same descriptive
properties; when they possess the same physical attributes or essential characteristics with
reference to their form, composition, texture or quality. They may also be related because
they serve the same purpose or are sold in grocery stores. 11 Thus, biscuits were held related
to milk because they are both food products. 12 Soap and perfume, lipstick and nail polish are
similarly related because they are common household items now a days. 13 The trademark
"Ang Tibay" for shoes and slippers was disallowed to be used for shirts and pants because
they belong to the same general class of goods. 14 Soap and pomade although non-

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competitive, were held to be similar or to belong to the same class, since both are toilet
articles. 15 But no confusion or deception can possibly result or arise when the name
"Wellington" which is the trademark for shirts, pants, drawers and other articles of wear for
men, women and children is used as a name of a department store. 16
Thus, in Acoje Mining Co., Inc. vs. Director of Patents, 17 the Court, through now Chief Justice
Fernando, reversed the patent director's decision on the question of "May petitioner Acoje
Mining Company register for the purpose of advertising its product, soy sauce, the trademark
LOTUS, there being already in existence one such registered in favor of the Philippine
Refining Company for its product, edible oil, it being further shown that the trademark applied
for is in smaller type, colored differently, set on a background which is dissimilar as to yield a
distinct appearance?" and ordered the granting of petitioner's application for registration ruling
that "there is quite a difference between soy sauce and edible oil. If one is in the market for
the former, he is not likely to purchase the latter just because of the trademark LOTUS" and
"when regard is had for the principle that the two trademarks in their entirety as they appear in
their respective labels should be considered in relation to the goods advertised before
registration could be denied, the conclusion is inescapable that respondent Director ought to
have reached a different conclusion. "
By the same token, in the recent case of Philippine Refining Co., Inc. vs. Ng Sam and
Director of Patents, 18 the Court upheld the patent director's registration of the same
trademark CAMIA for therein respondent's product of ham notwithstanding its already being
used by therein petitioner for a wide range of products: lard butter, cooking oil, abrasive
detergents, polishing materials and soap of all kinds. The Court, after noting that the same
CAMIA trademark had been registered by two other companies, Everbright Development
Company and F. E. Zuellig, Inc. for their respective products of thread and yarn (for the
former) and textiles, embroideries and laces (for the latter) ruled that "while ham and some of
the products of petitioner are classified under Class 47 (Foods and Ingredients of Food), this
alone cannot serve as the decisive factor in the resolution of whether or not they are related
goods. Emphasis should be on the similarity of the products involved and not on the arbitrary
classification or general description of their properties or characteristics." The Court,
therefore, concluded that "In fine, We hold that the businesses of the parties are noncompetitive and their products sounrelated that the use of Identical trademarks is not likely to
give rise to confusion, much less cause damage to petitioner."
In the situation before us, the goods are obviously different from each other with "absolutely
no iota of similitude" 19as stressed in respondent court's judgment. They are so foreign to
each other as to make it unlikely that purchasers would think that petitioner is the
manufacturer of respondent's goods.t@lF The mere fact that one person has adopted and
used a trademark on his goods does not prevent the adoption and use of the same trademark
by others on unrelated articles of a different kind. 20
Petitioner uses the trademark ESSO and holds certificate of registration of the trademark for
petroleum products, including aviation gasoline, grease, cigarette lighter fluid and other
various products such as plastics, chemicals, synthetics, gasoline solvents, kerosene,
automotive and industrial fuel, bunker fuel, lubricating oil, fertilizers, gas, alcohol, insecticides
and the ESSO Gasul" burner, while respondent's business is solely for the manufacture and
sale of the unrelated product of cigarettes. The public knows too well that petitioner deals
solely with petroleum products that there is no possibility that cigarettes with ESSO brand will
be associated with whatever good name petitioner's ESSO trademark may have generated.
Although petitioner's products are numerous, they are of the same class or line of
merchandise which are non-competing with respondent's product of cigarettes, which as
pointed out in the appealed judgment is beyond petitioner's "zone of potential or natural and
logical expansion" 21When a trademark is used by a party for a product in which the other
party does not deal, the use of the same trademark on the latter's product cannot be validly
objected to. 22
Another factor that shows that the goods involved are non-competitive and non-related is the
appellate court's finding that they flow through different channels of trade, thus: "The products

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of each party move along and are disposed through different channels of distribution. The
(petitioner's) products are distributed principally through gasoline service and lubrication
stations, automotive shops and hardware stores. On the other hand, the (respondent's)
cigarettes are sold in sari-sari stores, grocery stores, and other small distributor outlets.
(Respondent's) cigarettes are even peddled in the streets while (petitioner's) 'gasul' burners
are not. Finally, there is a marked distinction between oil and tobacco, as well as between
petroleum and cigarettes. Evidently, in kind and nature the products of (respondent) and of
(petitioner) are poles apart." 23
Respondent court correctly ruled that considering the general appearances of each mark as a
whole, the possibility of any confusion is unlikely. A comparison of the labels of the samples of
the goods submitted by the parties shows a great many differences on the trademarks used.
As pointed out by respondent court in its appealed decision, "(A) witness for the plaintiff, Mr.
Buhay, admitted that the color of the "ESSO" used by the plaintiff for the oval design where
the blue word ESSO is contained is the distinct and unique kind of blue. In his answer to the
trial court's question, Mr. Buhay informed the court that the plaintiff never used its trademark
on any product where the combination of colors is similar to the label of the Esso cigarettes,"
and "Another witness for the plaintiff, Mr. Tengco, testified that generally, the plaintiff's
trademark comes all in either red, white, blue or any combination of the three colors. It is to be
pointed out that not even a shade of these colors appears on the trademark of the appellant's
cigarette. The only color that the appellant uses in its trademark is green." 24
Even the lower court, which ruled initially for petitioner, found that a "noticeable difference
between the brand ESSO being used by the defendants and the trademark ESSO of the
plaintiff is that the former has a rectangular background, while in that of the plaintiff the word
ESSO is enclosed in an oval background."
In point of fact and time, the Court's dismissal of the petition at bar was presaged by its
Resolution of May 21, 1979 dismissing by minute resolution the petition for review for lack of
merit in the Identical case of Shell Company of the Philippines, Ltd vs. Court of Appeals 25,
wherein the Court thereby affirmed the patent office's registration of the trademark SHELL as
used in the cigarettes manufactured by therein respondent Fortune Tobacco Corporation
notwithstanding the therein petitioner Shell Company's opposition thereto as the prior
registrant of the same trademark for its gasoline and other petroleum trademarks, on the
strength of the controlling authority of Acoje Mining Co. vs. Director of Patents, Supra, and the
same rationale that "(I)n the Philippines, where buyers of appellee's (Fortune Corp.'s)
cigarettes, which are low cost articles, can be more numerous compared to buyers of the
higher priced petroleum and chemical products of appellant (Shell Co.) and where appellant
(Shell) is known to be in the business of selling petroleum and petroleum-based chemical
products, and no others, it is difficult to conceive of confusion in the minds of the buying public
in the sense it can be thought that appellant (Shell) is the manufacturer of appellee's
(Fortune's) cigarettes, or that appellee (Fortune) is the manufacturer or processor of
appellant's (Shell's) petroleum and chemical products." 26
ACCORDINGLY, the petition is dismissed and the decision of respondent Court of Appeals is
hereby affirmed.

G.R. No. L-19906

April 30, 1969

STERLING PRODUCTS INTERNATIONAL, INCORPORATED, plaintiff-appellant,


vs.
FARBENFABRIKEN BAYER AKTIENGESELLSCHAFT, and ALLIED MANUFACTURING
AND TRADING CO., INC., defendant-appellants.
SANCHEZ, J.:

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In this, a case for trademark infringement and unfair competition, each of the principal suitors,
namely, plaintiff Sterling Products International, Inc., 1 and defendant Farbenfabriken Bayer
Aktiengesellschaft,2 seeks to exclude the other from use in the Philippines of the trademarks
BAYER and BAYER CROSS IN CIRCLE. SPI asks this Court to strike down FBA's
registration of BAYER CROSS IN CIRCLE covering industrial and agricultural products
insecticides and other chemicals, not medicines from the supplemental register. FBA, for
its part, prays for the cancellation from the principal register of SPI's certificates of registration
of the trademarks aforesaid for medicines.
Contending parties are doing business in the Philippines. SPI markets Bayer Aspirin, Aspirin
for Children and Cafiaspirina. The BAYER and BAYER CROSS IN CIRCLE are being used by
SPI in the Philippines only for said products Bayer Aspirin, Cafiaspirina and Bayer Aspirin
for Children. On the containers (bottles or printed celophane strips, which, in turn, are placed
in cardboard boxes) of Bayer Aspirin, Aspirin for Children and Cafiaspirina, SPI features the
trademarks BAYER and BAYER CROSS IN CIRCLE. FBA thru Allied Manufacturing & Trading
Co., Inc.3 distributes "Folidol" and other industrial and agricultural chemicals. FBA's "Folidol"
(in steel or fiber drums or aluminum containers) displays a replica of SPI's trademark BAYER
CROSS IN CIRCLE; on the tin cap and label of the container.
The conflict apparent, suit followed.
The trial court declared itself "in favor of the solution that favors division of the market rather
than monopoly." But to avoid confusion, it directed defendants "to add a distinctive word, or
words in their mark to indicate that their products come from Germany." The judgment below
reads:
IN VIEW WHEREOF, both complaint and counterclaim are dismissed without costs; the Court
sustains plaintiff's right to use the Bayer trademark for its medicines, and defendants' right to
use it for chemicals, insecticides, and other products not medicines, but the Court orders
defendants to add a distinctive word or words in their mark to indicate that their products
come from Germany.4
Both parties appealed: Plaintiff, insofar as the judgment "dismisses plaintiff's complaint and
sustains defendants' right to use the BAYER trademark for their chemicals, insecticides, and
other products not medicines";5 and defendants, from the portions of the aforementioned
decision particularly those which dismiss the counterclaim of the defendants for the
cancellation of the registrations by the plaintiff of the trademarks Bayer and Bayer Cross and
which allow the plaintiff "to continue using the Bayer trademarks for medicines." 6
And now to the facts.
The word BAYER was the surname of Friedrich Bayer, a German, who, on August 1, 1868,
organized a drug company bearing his name Friedr Bayer et comp. at Barmen,
Germany. The company was at first engaged in the manufacture and sale of chemicals. At
about the year 1888 it started to manufacture pharmaceutical preparations also. A change of
name from Friedr Bayer to Farbenfabriken vorm. Friedr. Bayer & Co. (FFB, for short) effective
July 1, 1881 was followed in 1912 by a change of principal place of business from Elberfeld to
Luverkusen, Germany.7 Its products came to be known outside Germany. With the discovery
in 1899 of the Bayer Aspirin, the mark BAYER acquired prestige. The time was ripe to register
the trademarks. The record, however, does not clearly show when the word BAYER was
registered as a trademark in Germany. The BAYER CROSS IN CIRCLE trademark was
registered in Germany on January 6, 1904 No. 65777. 8 It was intended to be used on
"medicines for human beings and animals, disinfectants preservatives, tar dyestuffs and
chemical preparations for dyes and for photographic purposes." 9 This registered trademark
consists of the BAYER CROSS encircled by the company's name Farbenfabriken vorm.
Friedr. Bayer & Co. Elberfeld.

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When the company was merged with other German companies in 1925 to form the I.G.
Farbenindustrie, the name of the former company was deleted from the trademark and what
remained was the present BAYER CROSS IN CIRCLE. A new registration was effected on
June 17, 1929 in Germany and for which it was issued a certificate with serial no. 404341.
The trademark BAYER CROSS IN CIRCLE was registered by FFB and its subsidiaries in
other parts of the world, viz, in Norway, England, Denmark, and Argentina in 1904; in Japan
and the United States in 1908; in Spain in 1911; in Peru in 1913.
Sometime in 1895, FFB established a subsidiary in New York, United States. It was named
Farbenfabriken of Elberfeld Co. Its purpose was to sell FFB's products in the United States
and Canada. It was this subsidiary that registered the trademarks BAYER and BAYER
CROSS IN CIRCLE in the United States between the years 1907-1908.
Sometime in 1913, FFB organized another subsidiary The Bayer Co., Inc. of New York.
This new subsidiary was authorized by FFB to negotiate for and acquire the trademarks,
goodwill, assets and property of Farbenfabriken of Elberfeld Co. By an agreement dated June
12, 1913 (Exh. 106) Bayer of New York purchased for the sum of US $750,000.00
Farbenfabriken of Elberfeld Co.'s "right for the sale in the United States and Canada of the
drugs, chemicals, pharmaceuticals and any and all other products and articles manufactured
and (or) controlled by Leverkusen" (FFB) and its "trademarks, good will and other assets and
property."
On April 6, 1917,10 the United States declared war on Germany. Pursuant to the provisions of
the Trading with the Enemy Act, the Alien Property Custodian classified The Bayer Co., Inc. of
New York as an enemy-controlled corporation. Hence, the Alien Property Custodian seized its
assets about the early part of 1918. Between December 1918 and January 1919, all the
assets of The Bayer Co., Inc. of New York were sold by the Alien Property Custodian to
Sterling Drug, Inc. for the sum of US $5,310,000.00. The Bayer Co., Inc. of New York then
became a subsidiary of Sterling Drug, Inc. Winthrop Chemical Co., Inc. was later organized
as a new subsidiary of Sterling Drug, Inc. to manufacture and sell the physicians' drugs which
had been acquired" by the purchase of the Bayer Co., Inc. Winthrop's operation was evidently
hampered because 'the Germans had kept manufacturing processes secret, so that the
manufacture of physicians' drugs on a commercial scale became an almost insoluble
problem.11
Sterling Drug, Inc. secured registrations of the BAYER trademarks in different countries of the
world.12
It would appear that the trademark BAYER for medicines was known in the Philippines about
the close of the 19th century. This appears on page 88 of the Revista Farmaceutica de
Filipinos Ao I, Numero 7, 3 de Julio de 1893. Before World War I, BAYER products entering
the Philippines came from Germany.
In 1922, a worldwide conflict of interests occurred between Farbenfabriken vorm. Friedrich
Bayer & Co. and The Bayer Co., Inc. of New York, in reference to the trademarks BAYER and
BAYER CROSS IN CIRCLE as they were applied to various products.
Two agreements resolved this conflict, both executed on April 9, 1923 in London, England:
one, between FFB and Winthrop Chemical Co., Inc. (Exh. 66), and the other between FFB
and Bayer New York (Exh. WWW). Under the terms of the agreement with Winthrop Chemical
Co., Inc., FFB stipulated, amongst others: (1) not to contest anymore Winthrop's right over the
trademarks BAYER and BAYER CROSS IN CIRCLE; (2) to discontinue the use of said
trademarks in the United States which was understood to include the Philippines under par.
16 of said agreement; and (3) to disclose all secrets of other processes relating to the
manufacture of pharmaceuticals.
Paragraph 26 of the FFB Bayer New York agreement reads

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26. NEW YORK (The Bayer Company, Inc. of New York) agree that they will not sell or offer
for sale any goods other than hereunder or those they may market for Winthrop as
hereinbefore provided and other than Aspirin and compounds of Aspirin which New York shall
continue to market for their own account in the United States of America, Puerto Rico, the
Philippines and Hawaiian Islands and the Panama Zone. 13
In 1925, Farbenfabriken vorm. Friedrich Bayer & Co. became I.G. Farbenindustrie, AG. This
necessitated a new agreement incorporating Exh. 66 with modifications. Said new agreement
was signed on November 15, 1926 between I.G. Farbenindustrie and Winthrop.
On September 5, 1941, in the anti-trust suits against Sterling Drug, Inc., Winthrop Chemicals
Co. and The Bayer Co., of New York, two consent decrees [Exh. 68 (No. 15-363) and Exh.
69: (No. 15-364)] were promulgated by the U.S. District Court for Southern New York. Said
consent decrees declared the April 9 1923, cartel agreements violative of the U.S. anti-trust
laws. One reason given is that the German company, FFB (later I.G. Farbenindustrie)
FBA's predecessors was excluded from the U.S. pharmaceutical market. The sentence,
however, contains a saving clause, thus
The Bayer contract of 1923, the Bayer contract of 1926, and any and all amendments or
supplements thereto are declared and adjudged to be unlawful under the Anti-Trust Laws of
the United States, and the defendants Bayer and Sterling, and their respective successors an
subsidiaries, or any of them, be and they are hereby enjoined and restrained from carrying
out or enforcing any of the aforesaid contracts, or any supplements, amendments or
modifications thereof, or from paying to I.G. Farben, its subsidiaries, successors, or assigns,
any royalties or share of profits pursuant to said contracts with respect to sales following the
effective date of this decree.
Provided, however, that nothing herein contained in this Sec. III shall:lawphi1.nt
xxx

xxx

xxx

Affect in any way the rights or title of the defendant Bayer, its successors, subsidiaries or
assigns, in or to the name "Bayer" and the "Bayer Cross" mark or registrations thereof, or
Affect or diminish any right, title or interest of said defendants, their successor subsidiaries or
assigns, in or to or under any heretofore acquired and presently existing patents, patent
applications, patent licenses, trade-marks, trade-names (such as the name "Bayer" and the
"Bayer Cross" mark and registrations thereof), processes or formulae relating to the
manufacturing, processing, use or sale of aspirin, aspirin compounds, pharmaceutical or other
drug or chemical products, or impair any rights or remedies of said defendants, their
successors, subsidiaries or assigns, provided by statute or convention, and by suits for
damages, injunction or other remedy with respect to any such patents, patent applications,
patent licenses or trademarks....14
Meanwhile, in 1935, plaintiff Sterling Products International, Inc. (SPI) a Delaware
corporation, a subsidiary of Sterling Drug, Inc. of New York, was issued a license to do
business in the Philippines.15 The trademarks BAYER and BAYER CROSS IN CIRCLE were
then registered in the Philippines under the old Trademark Law (Act 666) by The Bayer Co.,
Inc.; the BAYER CROSS IN CIRCLE trademark on April 18, 1939 for which it was issued
Certificate of Registration No. 13081; the BAYER trademark on April 22, 1939 for which it was
issued Registration Certificate No. 13089. These trademark rights were assigned to SPI on
December 30, 1942 and the assignment was recorded in the Philippines Patent Office on
March 5, 1947. With the passage of Republic Act 166 repealing the old Trademark Law (Act
666), SPI was issued by the Philippines Patent Office on June 18, 1948 two new certificates
of registration: No. 1260-S for BAYER CROSS IN CIRCLE; No. 1262-S for BAYER. The
registration of these trademarks was only for "Medicines".

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Came World War II. I.G. Farbenindustrie AG. was seized by the allied powers. In 1945, after
World War II, I.G. Farbenindustrie AG. was decartelized by the Allied High Commission. The
unit known as Farbenfabriken Bayer was transferred in 1953 to Farbenfabriken Bayer
Aktiengesellschaft (FBA), one of the defendants in this case, which was organized in 1951.
Sometime in 1958, defendant Allied Manufacturing & Trading Co., Inc. (AMATCO) started
selling FBA's products especially "Folidol" a chemical insecticide which bears the BAYER
CROSS IN CIRCLE trademark.16
On November 18, 1959, FBA applied for the registration of the BAYER CROSS IN CIRCLE
trademark with the Philippines Patent Office for animal and plant destroying agents. The
examiner's report dated December 17, 1959 stated that the subject mark appears to be
similar to SPI's registered BAYER trademarks as covered by Certificates of Registration Nos.
1260-S and 1262-S. He concluded that "[r]egistration of applicant's mark is proscribed by
Section 4-d of the Statute because it would cause confusion or mistake or [to] deceive
purchasers."17 This action of the Philippines Patent Office drew a reply from FBA. In its letter
dated February 1, 1960 applicant FBA, thru counsel, said that it "offers no question or
objection to the assertion of the Examiner that the registrant's mark and that of the applicant
are similar to each other. It emphasized the fact that it was seeking registration in the
Supplemental Register. Its concluding statement runs thus:.
Being aware of the duties and obligations of a trademark user in the Philippines and the
penalties provided for in the pertinent law on tradermarks and being aware also that
Supplemental Registration is not a prima facie evidence of ownership of mark but merely a
recordation of the use as in fact the mark is actually being used by the applicant in the
Philippines, it is respectfully urged that this [application] be given due course. 18
On February 25, 1960, FBA was issued a certificate of registration in the Supplemental
Register, SR-304.
We now grapple with the problems raised in the separate appeals.
1. A rule widely accepted and firmly entrenched because it has come down through the years
is that actual use in commerce or business is a prerequisite to the acquisition of the right of
ownership over a trademark. This rule is spelled out in our. Trademark Law thus:
SEC. 2-A. Ownership of trade-marks, trademark names and service-mark; how acquired.
Anyone who lawfully produces or deals in merchandise of any kind or who engages in any
lawful business, or who renders any lawful service in commerce, by actual use thereof in
manufacture or trade, in business, and in the service rendered, may appropriate to his,
exclusive use a trademark, a trade-name, or a service-mark not so appropriated by another,
to distinguish his merchandise, business, or service from the merchandise, business or
service of others. The ownership or possession of a trademark, trade-name, service mark,
heretofore or hereafter appropriated, as in this section provided, shall be recognized and
protected in the same manner and to the same extent as are other property rights known to
the law. (As inserted by Section 1 of Republic Act 638)
It would seem quite clear that adoption alone of a trademark would not give exclusive right
thereto. Such right grows out of their actual use." 19 Adoption is not use. One may make
advertisements, issue circulars, give out price lists on certain goods; but these alone would
not give exclusive right of use. For trademark is a creation of use. The underlying reason for
all these is that Purchasers have come to understand the mark as indicating the origin of the
wares.20 Flowing from this is the trader's right to protection in the trade he has built up and the
goodwill he has accumulated from use of the trademark. Registration of a trademark, of
course, has value: it is an administrative act declaratory of a pre-existing right. Registration
does not, however, perfect a trademark right.

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The BAYER trademarks registered in the Philippines to which plaintiff SPI may lay claim, as
correctly stated in the decision below, are those which cover medicines only. For, it was on
said goods that the BAYER trademarks were actually used by it in the Philippines. Therefore,
the certificates of registration for medicines issued by the Director of Patents upon which the
protection is enjoyed are only for medicines. Nothing in those certificates recited would
include chemical or insecticides.
But plaintiff insists that the statement of the applicant (The Bayer Co., Inc.) in its registrations
of the BAYER marks states that "the merchandise for which the trademark is appropriated is
d. Chemicals, Medicines and Pharmaceutical Preparations." Plaintiff's position is that such
statement determines the goods for which said marks had been registered. Validity does not
attach to this proposition. First, the statement itself admits that "the particular description of
the articles comprised in said class (d) on which the trademark is used is Medicines." 21 It is
not used for chemicals.
Then, Section 11 of the Trademark Law requires that the certificate of registration state "the
particular goods . . . for which it is registered." This is controlling. Under Section 11 aforesaid,
likewise to be entered in the certificate of registration is "the date of the first use in commerce
or business. SPI may not claim "first use" of the trademarks prior to the registrations thereof
on any product other than medicines.
Besides, Section 7 of the same Trademark Act directs that upon the filing of the application
and the payment of the required fee, the "Director [of Patents] shall cause an examination of
the application" for registration of the trademark "to be made, and, if on such
examination it shall appear that the applicant is entitled to registration, the Director . . . shall
cause the mark . . . to be published in the Official Gazette." This examination, it would seem
to us, is necessary in order that the Director of Patents may be satisfied that the application
conforms to the requirement of actual use in commerce of the trademark in Section 2 and 2-A
of the Trademark Law; and that the statement in said application as to the "first use"
thereof and "the goods . . . in connection with which the mark . . . is used" (Section 5) is
true.
Really, if the certificate of registration were to be deemed as including goods not specified
therein, then a situation may arise whereby an applicant may be tempted to register a
trademark on any and all goods which his mind may conceive even if he had never intended
to use the trademark for the said goods. We believe that such omnibus registration is not
contemplated by our Trademark Law.
Because of this and of the fact that the Bayer trademarks were never used in the Philippines
by plaintiff except for medicines Aspirin, Aspirin for Children and Cafiaspirina we find
ourselves unwilling to draw a hard and fast rule which would absolutely and under all
circumstances give unqualified protection to plaintiff against the use of said trademarks by all
others on goods other than medicines.
2. Neither will the 1927 registration in the United States of the BAYER trademark for
insecticides serve plaintiff any. The United States is not the Philippines. Registration in the
United States is not registration in the Philippines. At the time of the United States registration
in 1927, we had our own Trademark Law, Act No. 666 aforesaid of the Philippine
Commission, which provided for registration here of trademarks owned by persons domiciled
in the United States.
What is to be secured from unfair competition in a given territory is the trade which one has in
that particular territory. There is where his business is carried on; where the goodwill
symbolized by the trademark has immediate value; where the infringer may profit by
infringement.
There is nothing new in what we now say. Plaintiff itself concedes 22 that the principle of
territoriality of the Trademark Law has been recognized in the Philippines, citing Ingenohl vs.

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Walter E. Olsen, 71 L. ed. 762. As Callmann puts it, the law of trademarks "rests upon the
doctrine of nationality or territoriality."23
Accordingly, the 1927 registration in the United States of the BAYER trademark would not of
itself afford plaintiff protection for the use by defendants in the Philippines of the same
trademark for the same or different products.
3. A question basic in the field of trademarks and unfair competition is the extent to which a
registrant of a trademark covering one product may invoke the right to protection against the
use by other(s) of the same trademark to identify merchandise different from those for which
the trademark has been appropriated.
Plaintiff's trenchant claim is that it should not be turned away because its case comes within
the protection of theconfusion of origin rule. Callmann 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 plaintiff's, and the poorer quality of the former
reflects adversely on the plaintiff's 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." 24
A judicial test giving the scope of the rule of confusion of origin is Ang vs. Teodoro (December
14, 1942), 74 Phil. 50. Briefly, the facts of the just cited case are as follows: Toribio Teodoro,
at first in partnership with Juan Katindig and later as sole proprietor, had continuously used
"Ang Tibay" both as trademark and as tradename in the manufacture and sale of slippers,
shoes and indoor baseballs since 1910. He formally registered it as a trademark on
September 29, 1915 and as a tradename on January 3, 1933. Ana L. Ang registered the
same trademark "Ang Tibay" for pants and shirts on April 11, 1932 and established a factory
for the manufacture of said articles in 1937. Suit was lodged by Teodoro against Ang to cancel
the latter's registration of the trademark "Ang Tibay" and to perpetually enjoin her from using
the said trademark on goods manufactured and sold by her. The judgment of the trial court
absolved defendant (Ana L. Ang) from the complaint with costs against the plaintiff. The Court
of Appeals reversed. On appeal by certiorari, we affirmed the judgment of the Court of
Appeals. We there said:
"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 trademarks 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.
Such construction of the law is induced by cogent reasons of equity and fair dealing. The
courts have come to realize that there can be unfair competition or unfair trading even if the
goods are noncompeting, and that such unfair trading can cause injury or damage to the first
user of a given trademark, 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. When noncompetitive products are sold under the 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 vauable 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 trademark is adopted by
another even for a totally different class of goods, it is done to get the benefit of the reputation

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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. As
trade has developed and commercial changes have come about, the law of unfair competition
has expanded to keep pace with the times and the element of strict competition in itself has
ceased to be the determining factor. The owner of a trademark 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.25
The thoughts expressed in Ang Tibay command respect Conduct of business should conform
to ethical business standards. Unfairness is proscribed. The invocation of equity is bottomed
upon the injunction that no one should "reap where he has not sown." 26
Nonetheless, "[i]t has been emphasized that each case presents a unique problem which
must be answered by weighing the conflicting interests of the litigants." 27 With this in mind, we
are convinced that the case before us is not to be analogized with Ang Tibay. The factual
setting is different. His Honor, Judge Magno S. Gatmaitan (now Associate Justice of the Court
of Appeals), the trial judge, so found. He reached a conclusion likewise different. And the
reasons, so well stated by His Honor, are these:
1st). It was not plaintiff's predecessor but defendant's namely Farbenfabriken or
Bayer Germany that first introduced the medical products into the Philippine market
and household with the Bayer mark half a century ago; this is what the Court gathers
from the testimony of Frederick Umbreit and this is the implication even of Exhs. 48,
49, 66 and as already shown a few pages back;28
2nd). There is thus reason plausible enough for defendant' plea that as Sterling
was not the "originator" of the Bayer mark, the rule in Ang vs. Teodoro, supra, is not
applicable; and this is correct notwithstanding Exhs. 106 and 63 and even giving unto
these documents full force and virtue, because purchase of the assets of Elberfeld,
defendants' previous affiliate in New York, by Bayer of New York, even if that were to
be held to include purchase of the Bayer mark, did not make the purchaser Bayer of
New York the originator of the mark; especially since Bayer of New York was only
another subsidiary of Bayer Germany or Farbenfabriken which was the real
originator;
3rd). The Court is also impelled to believe that the evidence establishes that
among the common people of the Philippines the "Bayer" medicines come from
Germany; this the Court deduces from the testimony of witness Florisa Pestano who
only reproduced the belief of her grandmother; the Court might as well say that
plaintiff itself has not discouraged that belief because the drug and its literature that
came from the plaintiff and its affiliate would show that it represented its medicines to
have come from defendant29 and were manufactured in Germany with that Bayer
mark; thus Exh. 7030 which is the price list of 1928 of Botica de Sta. Cruz on page 6
indicates that Winthrop Chemical Company of New York, plaintiff's subsidiary
was a distributor of I.G. Farbenindustrie, A.G. Leverkusen Germany; Exh. 80 31 which
is a medical diary published by Winthrop for 1934 on page 148 manifested that the
journal, "Practical Therapeutics" was published by I.G. Farbenindustrie
Aktiengesellachaft for Winthrop Chemical Company, Inc.; "with particular reference to
the pharmacological products, sera and vaccines originated and prepared in the
laboratories of the I.G. Farbenindustrie A.G."; and Exh. 79 a, b, c, d and e which are
prospectuses for the medicines, Mitigal, Afridol, Aspirins, Novalgina and MySalvarsan32 showed that these products were manufactured for Winthrop by I.G.
Farbenindustrie; and then Exh. 81 the Revista Boie of 1928 would show that
Winthrop represented itself as the distributor of the products of Bayer of Germany
otherwise known as I.G. Farbenindustrie, "segun la alta calidad de la marca
original";33 the Court being also impelled to add in this connection that it has to take

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judicial notice of a belief of long standing common among the people in the
Philippines that German products are of very high quality and it is only natural for a
distributor or a retailer to take advantage of that, and as it is not debated that "Bayer"
is a German surname, (see plaintiff's rebuttal Exh. QQQQ, see also p. 7 plaintiff's
reply memorandum wherein it is said that this surname is a "pretty common one
among members of the Germany race") it is all so very easy to associate the Bayer
trademark with products that come from Germany and to believe that they are of high
quality;
4th). The rationale of the doctrine in Ang vs. Teodoro, supra being that:
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. 74 Phil. 55-56;
and the Court having found out that the 'first user' was Bayer Germany and it was this that
had built up the Bayer mark and plaintiff apparently having itself encouraged that belief even
after it had acquired the Bayer mark in America, thru forced sale, of defendant's subsidiary
there in 1918, Exhs. 79, 80, 81, to apply the Ang Tibay rule in the manner advocated by
Sterling would, the Court fears, produce the reverse result and the consequence would be not
equity but injustice.34
It would seem to us that the fact that plaintiff rode on the German reputation in the Bayer
trademark has diluted the rationally of its exclusionary claim. Not that the free ride in the
name of defendant's German predecessor was sporadic. It is continuing. Proof of this is the
label on the box used by plaintiff (Exhibit U) in the distribution of Bayer Aspirin. This box bears
prominently on the front part the legend "Genuine" in red color and two arrows: the first
pointing to BAYER CROSS IN CIRCLE, and the second, to BAYER Aspirin. At the back
thereof in big letters are the words "BAYER ASPIRIN", followed in small letters "Used since
1900" and down below the small words "Mfd. in the Phil. by Winthrop Stearns, Inc. for
STERLING PRODUCTS INTERNATIONAL, INCORPORATED." In plaintiff's prospectus
(Exhibit 1) found in the box of Bayer Aspirin tablets, children's size, there is the significant
statement: "GENUINE BAYER Each Children's Size Bayer Aspirin tablet is stamped with
the Bayer Cross, the trademark of the genuine Bayer product. This means that your child is
getting the same gentle-to-the-system Bayer Aspirin that has been used for over 50 years by
millions of normal people without ill effect."
With the background of prior use in the Philippines of the word BAYER by FBA's German
predecessor and the prior representations that plaintiff's medicines sold in the Philippines
were manufactured in Germany, the facts just recited hammer on the mind of the public that
the Aspirin. Cafiaspirina and Aspirin for Children being marketed for plaintiff in the Philippines
come from the same source the German source and in use since 1900. That this view is
far from far-fetched, is illustrated by the testimony of plaintiff's own witness, Dr. Antonio
Vasquez, viz:
Q. Have you ever heard of a pharmaceutical company of Bayer of Germany, or a
company in Germany named Bayer?
A. Yes, sir.
Q. Since when have you heard of this pharmaceutical company in Germany with the
name Bayer, since when have you heard of that?
A. I have always taken the name Bayer as associated with Winthrop & Stearns.
Q. But, you said a while ago....

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Witness.
.... Yes .....
xxx

xxx

xxx

Q. ... that you have heard of a pharmaceutical company with the name of Bayer in
Germany?
A. Yes, sir.
Q. Do you know if this Winthrop & Stearns you mentioned has ever been connected
with Bayer Company of Germany?
A. I have always understood that they were distributing drugs of Bayer & Company.35
4. The Ang Tibay doctrine, we believe, is not to be read as shunting aside the time-honored
teaching that he who comes into equity must do so with clean hands. 36 Plaintiff cannot now
say that the present worth of its BAYER trademarks it owes solely to its own efforts; it is not
insulated from the charge that as it marketed its medicines it did so with an eye to the
goodwill as to quality that defendants' predecessor had established.
There is no whittling away of the identity of plaintiff's trademarks. Plaintiff is not the first user
thereof in the Philippines. The trademarks do not necessarily link plaintiff with the public.
Plaintiff must show injury; it has not. On the contrary, representations as to the place of
manufacture of plaintiff's medicines were untrue, misleading. Plaintiff could still be tagged with
the same deception "which (it) complains of in the defendant(s)." 37 Appropriate it is to recall
here our observation in the Ang Tibay opinion, viz: "On our part may we add, without meaning
to be harsh, that a self-respecting person does not remain in the shelter of another but builds
one of his own."38
Plaintiff, the owner in this country of the trademarks BAYER for medicines, has thus forfeited
its right to protection from the use of the same trademarks by defendants for products
different therefrom insecticides and other chemicals.
5. But defendants ask us to delist plaintiff's BAYER trademarks for medicines from the
Principal Register, claiming right thereto for said use. Said trademarks had been registered
since 1939 by plaintiff's predecessor. The Bayer Co., Inc.
Defendants' claim is stale; it suffers from the defect of non-use. 39 While it is conceded that
FBA's predecessors first introduced medical products with the BAYER trademarks in the
Philippine market, it is equally true that, after World War I, no definite evidence there is that
defendants or their professors traded in the Philippines in medicines with the BAYER
trademarks thereafter. FBA did not seasonably voice its objection. Lack of protest thereto
connoted acquiescence. And this; notwithstanding the fact that the 1923 and 1926
agreements were set aside in the anti-trust suits. Defendants did use the marks; but it was
much later, i.e., in 1958 and on chemicals and insecticides not on medicines. FBA only
bestirred itself and challenged plaintiff's right to the trademarks on medicines when this suit
was filed. Vigilantibus non dormientibus equitas subvenit. 40
The net result is that, as the trial court aptly observed, plaintiff may hold on to its BAYER
trademarks for medicines. And defendants may continue using the same trademarks for
insecticides and other chemicals, not medicines.
6. Defendants balk at the ruling below which directs them "to add a distinctive word or words
in their mark to indicate that their products come from Germany." 41

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We are left under no doubt as to the reasonableness of the formula thus fashioned. It avoids
the mischief of confusion of origin defendant FBA's product would not be mistaken for
those of plaintiff. It reduces friction. We perceive of no prejudice to defendants. The order
does not visit defendant FBA with reprobation or condemnation. Rather, said defendant would
be enhancing the value of and would be sponsoring its own products. Anyway, a statement
that its products come from Germany is but a statement of fact.
FOR THE REASONS GIVEN, the judgment under review is hereby affirmed. No costs. So
ordered.

[G.R. No. 157216. November 20, 2003]


246 CORPORATION, doing business under the name and style of ROLEX MUSIC
LOUNGE, petitioner, vs. HON. REYNALDO B. DAWAY, in his capacity as
Presiding Judge of Branch 90 of the Regional Trial Court of Quezon City,
MONTRES ROLEX S.A. and ROLEX CENTRE PHIL. LIMITED, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure assailing the November 28, 2002 Decision [1] of the Court of Appeals in CA-G.R. SP
No. 64660 which dismissed the petition for certiorari filed by petitioner, as well as the
Resolution[2] dated February 13, 2003 denying its motion for reconsideration.
The undisputed facts show that on November 26, 1998, respondents Montres Rolex S.A.
and Rolex Centre Phil., Limited, owners/proprietors of Rolex and Crown Device, filed against
petitioner 246 Corporation the instant suit for trademark infringement and damages with
prayer for the issuance of a restraining order or writ of preliminary injunction [3] before the
Regional Trial Court of Quezon City, Branch 90. Respondents alleged that sometime in July
1996, petitioner adopted and, since then, has been using without authority the mark Rolex in
its business name Rolex Music Lounge as well as in its newspaper advertisements as Rolex
Music Lounge, KTV, Disco & Party Club.
In its answer raising special affirmative defenses, petitioner argued that respondents
have no cause of action because no trademark infringement exist; that no confusion would
arise from the use by petitioner of the mark Rolex considering that its entertainment business
is totally unrelated to the items catered by respondents such as watches, clocks, bracelets
and parts thereof. It also contended that the complaint was not properly verified and certified
against forum shopping considering that Atty. Alonzo Ancheta, the counsel of record of
respondents who signed the verification and certification, was not authorized to represent
respondents.[4]
On July 21, 2000, petitioner filed a motion for preliminary hearing on its affirmative
defenses.[5] Subsequently, on motion of petitioner, the trial court issued a
subpoena adtestificandum requiring Atty. Alonzo Ancheta to appear at the preliminary
hearing.[6] Respondents, in the meantime, filed a Comment and Opposition [7] to the motion for
preliminary hearing and a motion to quash the subpoena ad testificandum.
In an Order dated October 27, 2000, the trial court quashed the
subpoena ad testificandum and denied petitioners motion for preliminary hearing on
affirmative defenses with motion to dismiss.[8]

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With the denial of the motion for reconsideration on March 16, 2001, petitioner filed a
petition for certiorari with the Court of Appeals contending that the trial court gravely abused
its discretion in issuing the October 27, 2000 and March 16, 2001 orders.
On November 28, 2002, the Court of Appeals dismissed the petition. The motion for
reconsideration filed by petitioner was denied. Hence, the instant petition anchored on the
following grounds:
I
IN ISSUING THE ASSAILED DECISIONS, THE HONORABLE COURT OF
APPEALS PERFUNCTORILY BRUSHED ASIDE THE CONTROLLING
PRECEDENTS LAID DOWN BY THIS HONORABLE COURT IN ESSO
STANDARD EASTERN, INC. VS. COURT OF APPEALS AND UNITED
CIGARETTE CORPORATION AND OTHER COMPANION CASES HOLDING
THAT NO TRADEMARK INFRINGEMENT CAN POSSIBLY OCCUR WHERE THE
CONTENDING PARTIES DEAL WITH GOODS AND SERVICES THAT ARE
TOTALLY UNRELATED AND NON-COMPETING WITH EACH OTHER.
II
IN ARBITRARILY AND CAPRICIOUSLY RULING THAT THE ISSUES RAISED IN
PETITIONERS CERTIORARI PETITION ARE QUESTIONS OF FACT, THE
HONORABLE COURT OF APPEALS VIOLATED NOT ONLY PETITIONERS
SUBSTANTIVE DUE PROCESS RIGHTS BUT ALSO THE WELL-SETTLED RULE
THAT THE ALLEGATIONS OF THE COMPLAINT IS HYPOTHETICALLY
ADMITTED WHEN THE MOTION TO DISMISS IS GROUNDED UPON LACK OF
CAUSE OF ACTION. MOREOVER, INDEPENDENT OF THE HYPOTHETICALLY
ADMITTED FACTS EMBODIED IN THE COMPLAINT A QUO, THERE ARE SELFEVIDENT FACTS AND IMPLIEDLY ADMITTED FACTS CONTAINED IN PRIVATE
RESPONDENTS PLEADINGS THAT WOULD CLEARLY AND UNMISTAKABLY
SHOW PRIVATE RESPONDENTS LACK OF CAUSE OF ACTION AGAINST
HEREIN PETITIONER.
III
THE HONORABLE COURT OF APPEALS VIOLATED PETITIONERS RIGHT TO
SUBSTANTIVE DUE PROCESS WHEN IT ARBITRARILY AND CAPRICIOUSLY
RULED THAT WHAT WAS SPECIFICALLY DENIED IN THE ASSAILED OCTOBER
20, 2000 ORDER IS PETITIONERS MOTION FOR PRELIMINARY HEARING ON
DEFENDANTS AFFIRMATIVE DEFENSES AND NOT PETITIONERS MOTION TO
DISMISS PER SE CONSIDERING THAT:
A. THERE IS ABSOLUTELY NOTHING IN THE ORDER DATED OCTOBER 20, 2000 OF
RESPONDENT JUDGE WHICH SUGGESTS THAT THE RESOLUTION OF PETITIONERS
MOTION TO DISMISS PER SE WAS HELD IN ABEYANCE BY THE RESPONDENT
JUDGE. HENCE THE SAID ORDER DATED OCTOBER 20, 2000 ALSO CONSTITUTES A
DENIAL ON THE MERITS OF PETITIONERS MOTION TO DISMISS PER SE AND NOT
MERELY OF PETITIONERS MOTION FOR PRELIMINARY HEARING THEREON.
B. PRIVATE RESPONDENTS COMMENT AND OPPOSITION DATED 11 AUGUST 2000, WHICH
WAS CITED AND SUSTAINED BY RESPONDENT JUDGE, CLEARLY TRAVERSED THE
MERITS OF THE GROUNDS FOR PETITIONERS MOTION TO DISMISS PER SE. HENCE,
THE SAID 20 OCTOBER 2000 ORDERS DENIAL OF PETITIONERS MOTION IS NOT
LIMITED TO THE MOTION FOR PRELIMINARY HEARING BUT ALSO CONSTITUTES A
DENIAL OF PETITIONERS MOTION TO DISMISS PER SE.
IV

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IN ARBITRARILY AND CAPRICIOUSLY RULING THAT ATTY. ALONZO ANCHETA


PROPERLY VERIFIED AND CERTIFIED PRIVATE RESPONDENTS COMPLAINT
A QUO, THE HONORABLE COURT OF APPEALS VIOLATED NOT ONLY
PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO THE
DOCTRINE OF SEPARATE CORPORATE PERSONALITY; CONSIDERING THAT
THE RECORDS OF THIS CASE IS (sic) COMPLETELY BEREFT AND DEVOID OF
ANY DULY EXECUTED SPECIAL POWER OF ATTORNEY, EMANATING FROM
PRIVATE RESPONDENTS, WHICH EXPLICITLY AND SPECIFICALLY
AUTHORIZES ATTY. ALONZO ANCHETA TO REPRESENT PRIVATE
RESPONDENTS MONTRES ROLEX S.A. IN THE FILING OF THE COMPLAINT A
QUO. BY REASON THEREOF, PRIVATE RESPONDENTS COULD NOT BE
DEEMED TO HAVE VOLUNTARILY APPEARED BEFORE THE RESPONDENT
JUDGE; CONSEQUENTLY, THE TRIAL COURT COULD NOT HAVE VALIDLY
ACQUIRED JURISDICTION OVER THE PERSON OF PRIVATE RESPONDENTS.
V
IN ARBITRARILY AND CAPRICIOUSLY AFFIRMING RESPONDENT JUDGES
QUASHAL OF THE SUBPOENA DATED 14 AUGUST 2000 DIRECTED AGAINST
ATTY. ALONZO ANCHETA, THE HONORABLE COURT OF APPEALS VIOLATED
NOT ONLY PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO
SECTION 9, RULE 132 AND SECTION 7 RULE 133 OF THE 1989 REVISED
RULES ON EVIDENCE, AND THE RULING OF THIS HONORABLE COURT IN
THE CASE OF PEOPLE VS. RIVERA.[9]
Simply put, the issues are as follows (1) whether the trial court denied not only
petitioners motion for preliminary hearing on its affirmative defenses but its motion to dismiss
as well; (2) if the answer is in the affirmative, whether or not the trial court gravely abused its
discretion in denying said motions; and (3) whether the trial court gravely abused its discretion
in quashing the subpoena ad testificandum issued against Atty. Ancheta.
Anent the first issue, we find that what was denied in the order dated October 27, 2000
was not only the motion for preliminary hearing but the motion to dismiss as well. A reading of
the dispositive portion of said order shows that the trial court neither qualified its denial nor
held in abeyance the ruling on petitioners motion to dismiss thus
IN VIEW OF THE FOREGOING, the aforecited Motion To Quash Subpoena
Ad Testificandum is granted; and the aforecited Motion For Preliminary Hearing On
Defendants Affirmative Defenses With Motion To dismiss The Instant Complaint Based
On Said Affirmative Defenses is denied.[10] (Emphasis supplied)
In issuing the assailed order, the trial court ruled on the merits of petitioners Motion to
Dismiss vis--vis respondents Comment and Opposition which clearly traversed the affirmative
defenses raised by petitioner, to wit:
After carefully going over the pleadings, this Court finds, on the first motion that the
arguments raised in the said motion and the reply filed in connection thereto appear to be
meritorious; and on the second motion, that the arguments raised in the comments and
opposition and the rejoinder filed by the plaintiffs likewise appear to be meritorious. [11]
Moreover, it is presumed that all matters within an issue raised in a case were passed
upon by the court. In the absence of evidence to the contrary, the presumption is that the
court a quo discharged its task properly.[12]
In Municipality of Bian Laguna v. Court of Appeals,[13] decided under the old Rules of Civil
Procedure, it was held that a preliminary hearing permitted under Rule 16, Section 5, is not
mandatory even when the same is prayed for. It rests largely on the sound discretion of the
trial court, thus

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SEC. 5. Pleading grounds as affirmative defenses. Any of the grounds for dismissal provided
for in this Rule, except improper venue, may be pleaded as an affirmative defense, and
a preliminary hearing may be had thereon as if a motion to dismiss had been filed. (Emphasis
supplied)
The use of the word "may" in the aforequoted provision shows that such a hearing is not a
matter of right demandable from the trial court; it is not mandatory but discretionary.May is an
auxiliary verb indicating liberty, opportunity, permission and possibility.[14] Such interpretation is
specifically stated under the 1997 Rules of Civil Procedure. Rule 16, Section 6, now provides
that a grant of a preliminary hearing rests on the sound discretion of the court, to wit
SEC. 6. Pleading grounds as affirmative defenses. If no motion to dismiss has been filed,
any of the grounds for dismissal provided for in this Rule may be pleaded as an affirmative
defense in the answer and, in the discretion of the court, a preliminary hearing may be
had thereon as if a motion to dismiss had been filed. (Emphasis supplied)
In the case at bar, the Court of Appeals did not err in finding that no abuse of discretion
could be ascribed to the trial courts denial of petitioners motion for preliminary hearing on its
affirmative defenses with motion to dismiss. The issue of whether or not a trademark
infringement exists, is a question of fact that could best be determined by the trial court.
Under the old Trademark Law[15] where the goods for which the identical marks are used
are unrelated, there can be no likelihood of confusion and there is therefore no infringement in
the use by the junior user of the registered mark on the entirely different goods. [16] This ruling,
however, has been to some extent, modified by Section 123.1(f) of the Intellectual Property
Code (Republic Act No. 8293), which took effect on January 1, 1998. The said section reads:
Sec. 123. Registrability. 123.1. A mark cannot be registered if it:
xxxxxxxxx
(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered
well-known in accordance with the preceding paragraph, which is registered in the Philippines
with respect to goods or services which are not similar to those with respect to which
registration is applied for: Provided, That use of the mark in relation to those goods or
services would indicate a connection between those goods or services, and the owner of the
registered mark: Provided, further, That the interest of the owner of the registered mark are
likely to be damaged by such use; (Emphasis supplied)
A junior user of a well-known mark on goods or services which are not similar to the
goods or services, and are therefore unrelated, to those specified in the certificate of
registration of the well-known mark is precluded from using the same on the entirely unrelated
goods or services, subject to the following requisites, to wit:
1. The mark is well-known internationally and in the Philippines. Under Rule 102 of the Rules
and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped
Containers,[17] 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 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;

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(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 the 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 of 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.
2. The use of the well-known mark on the entirely unrelated goods or services would indicate
a connection between such unrelated goods or services and those goods or services
specified in the certificate of registration in the well known mark. This requirement refers to
the likelihood of confusion of origin or business or some business connection or relationship
between the registrant and the user of the mark.
3. The interests of the owner of the well-known mark are likely to be damaged. For instance, if
the registrant will be precluded from expanding its business to those unrelated good or
services, or if the interests of the registrant of the well-known mark will be damaged because
of the inferior quality of the good or services of the user.[18]
Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely
unrelated to respondents business involving watches, clocks, bracelets, etc. However, the
Court cannot yet resolve the merits of the present controversy considering that the requisites
for the application of Section 123.1(f), which constitute the kernel issue at bar, clearly require
determination facts of which need to be resolved at the trial court. The existence or absence
of these requisites should be addressed in a full blown hearing and not on a mere preliminary
hearing. The respondent must be given ample opportunity to prove its claim, and the
petitioner to debunk the same.
The same is true with respect to the issue of whether Atty. Alonzo Ancheta was properly
authorized to sign the verification and certification against forum shopping in behalf of
respondents. This could be properly resolved during the trial together with the substantive
issues raised by petitioner.
Considering that the trial court correctly denied petitioners motion for preliminary hearing
on its affirmative defenses with motion to dismiss, there exists no reason to compel
Atty. Ancheta to testify. Hence, no abuse of discretion was committed by the trial court in
quashing the subpoena ad testificandum issued against Atty. Ancheta.
Grave abuse of discretion implies such capricious and whimsical exercise of judgment as
equivalent to lack of jurisdiction, or, in other words, where the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and it must be so
patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform
the duty enjoined or to act at all in contemplation of law. None of these was committed by the
trial court; hence, the Court of Appeals correctly dismissed the petition.

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WHEREFORE, in view of all the foregoing, the petition for review on certiorari filed by
petitioner is DENIED. The November 28, 2002 Decision and the February 13, 2003
Resolution of the Court of Appeals in CA-G.R. SP No. 64660 which dismissed the petition for
certiorari filed by petitioner are AFFIRMED.
SO ORDERED.

G.R. No. 185917

June 1, 2011

FREDCO MANUFACTURING CORPORATION Petitioner,


vs.
PRESIDENT AND FELLOWS OF HARVARD COLLEGE (HARVARD
UNIVERSITY), Respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the 24 October 2008 Decision2 and 8
January 2009 Resolution3of the Court of Appeals in CA-G.R. SP No. 103394.
The Antecedent Facts
On 10 August 2005, petitioner Fredco Manufacturing Corporation (Fredco), a corporation
organized and existing under the laws of the Philippines, filed a Petition for Cancellation of
Registration No. 56561 before the Bureau of Legal Affairs of the Intellectual Property Office
(IPO) against respondents President and Fellows of Harvard College (Harvard University), a
corporation organized and existing under the laws of Massachusetts, United States of
America. The case was docketed as Inter Partes Case No. 14-2005-00094.
Fredco alleged that Registration No. 56561 was issued to Harvard University on 25
November 1993 for the mark "Harvard Veritas Shield Symbol" for decals, tote bags, serving
trays, sweatshirts, t-shirts, hats and flying discs under Classes 16, 18, 21, 25 and 28 of the
Nice International Classification of Goods and Services. Fredco alleged that the mark
"Harvard" for t-shirts, polo shirts, sandos, briefs, jackets and slacks was first used in the
Philippines on 2 January 1982 by New York Garments Manufacturing & Export Co., Inc. (New
York Garments), a domestic corporation and Fredcos predecessor-in-interest. On 24 January
1985, New York Garments filed for trademark registration of the mark "Harvard" for goods
under Class 25. The application matured into a registration and a Certificate of Registration
was issued on 12 December 1988, with a 20-year term subject to renewal at the end of the
term. The registration was later assigned to Romeo Chuateco, a member of the family that
owned New York Garments.
Fredco alleged that it was formed and registered with the Securities and Exchange
Commission on 9 November 1995 and had since then handled the manufacture, promotion
and marketing of "Harvard" clothing articles. Fredco alleged that at the time of issuance of
Registration No. 56561 to Harvard University, New York Garments had already registered the
mark "Harvard" for goods under Class 25. Fredco alleged that the registration was cancelled
on 30 July 1998 when New York Garments inadvertently failed to file an affidavit of use/nonuse on the fifth anniversary of the registration but the right to the mark "Harvard" remained
with its predecessor New York Garments and now with Fredco.

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Harvard University, on the other hand, alleged that it is the lawful owner of the name and
mark "Harvard" in numerous countries worldwide, including the Philippines. Among the
countries where Harvard University has registered its name and mark "Harvard" are:
1. Argentina

26. South Korea

2. Benelux4

27. Malaysia

3. Brazil

28. Mexico

4. Canada

29. New Zealand

5. Chile

30. Norway

6. China P.R.

31. Peru

7. Colombia

32. Philippines

8. Costa Rica

33. Poland

9. Cyprus

34. Portugal

10. Czech Republic

35. Russia

11. Denmark

36. South Africa

12. Ecuador

37. Switzerland

13. Egypt

38. Singapore

14. Finland

39. Slovak Republic

15. France

40. Spain

16. Great Britain

41. Sweden

17. Germany

42. Taiwan

18. Greece

43. Thailand

19. Hong Kong

44. Turkey

20. India

45. United Arab Emirates

21. Indonesia

46. Uruguay

22. Ireland

47. United States of America

23. Israel

48. Venezuela

24. Italy

49. Zimbabwe

25. Japan

50. European Community5

The name and mark "Harvard" was adopted in 1639 as the name of Harvard College 6 of
Cambridge, Massachusetts, U.S.A. The name and mark "Harvard" was allegedly used in
commerce as early as 1872. Harvard University is over 350 years old and is a highly regarded
institution of higher learning in the United States and throughout the world. Harvard University
promotes, uses, and advertises its name "Harvard" through various publications, services,
and products in foreign countries, including the Philippines. Harvard University further alleged
that the name and the mark have been rated as one of the most famous brands in the world,
valued between US $750,000,000 and US $1,000,000,000.

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Harvard University alleged that in March 2002, it discovered, through its international
trademark watch program, 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." On 20 April 2004, Harvard University
filed an administrative complaint against Fredco before the IPO for trademark infringement
and/or unfair competition with damages.lawphi1
Harvard University alleged that its valid and existing certificates of trademark registration in
the Philippines are:
1. Trademark Registration No. 56561 issued on 25 November 1993 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;
2. Trademark Registration No. 57526 issued on 24 March 1994 for "Harvard Veritas
Shield Symbol" for services in Class 41; Trademark Registration No. 56539 issued on
25 November 1998 for "Harvard" for services in Class 41; and
3. Trademark Registration No. 66677 issued on 8 December 1998 for "Harvard
Graphics" for goods in Class 9. Harvard University further alleged that it filed the
requisite affidavits of use for the mark "Harvard Veritas Shield Symbol" with the IPO.
Further, on 7 May 2003 Harvard University filed Trademark Application No. 4-2003-04090 for
"Harvard Medical International & Shield Design" for services in Classes 41 and 44. In 1989,
Harvard University established the Harvard Trademark Licensing Program, operated by the
Office for Technology and Trademark Licensing, to oversee and manage the worldwide
licensing of the "Harvard" name and trademarks for various goods and services. Harvard
University stated that it never authorized or licensed any person to use its name and mark
"Harvard" in connection with any goods or services in the Philippines.
In a Decision7 dated 22 December 2006, Director Estrellita Beltran-Abelardo of the Bureau of
Legal Affairs, IPO cancelled Harvard Universitys registration of the mark "Harvard" under
Class 25, as follows:
WHEREFORE, premises considered, the Petition for Cancellation is hereby GRANTED.
Consequently, Trademark Registration Number 56561 for the trademark "HARVARD VE RI
TAS SHIELD SYMBOL" issued on November 25, 1993 to PRESIDENT AND FELLOWS OF
HARVARD COLLEGE (HARVARD UNIVERSITY) should be CANCELLED only with respect
to goods falling under Class 25. On the other hand, considering that the goods of
Respondent-Registrant falling under Classes 16, 18, 21 and 28 are not confusingly similar
with the Petitioners goods, the Respondent-Registrant has acquired vested right over the
same and therefore, should not be cancelled.
Let the filewrapper of the Trademark Registration No. 56561 issued on November 25, 1993
for the trademark "HARVARD VE RI TAS SHIELD SYMBOL", subject matter of this case
together with a copy of this Decision be forwarded to the Bureau of Trademarks (BOT) for
appropriate action.
SO ORDERED.8
Harvard University filed an appeal before the Office of the Director General of the IPO. In a
Decision9 dated 21 April 2008, the Office of the Director General, IPO reversed the decision of
the Bureau of Legal Affairs, IPO.
The Director General ruled that more than the use of the trademark in the Philippines, the
applicant must be the owner of the mark sought to be registered. The Director General ruled

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that the right to register a trademark is based on ownership and when the applicant is not the
owner, he has no right to register the mark. The Director General noted that the mark covered
by Harvard Universitys Registration No. 56561 is not only the word "Harvard" but also the
logo, emblem or symbol of Harvard University. The Director General ruled that Fredco failed
to explain how its predecessor New York Garments came up with the mark "Harvard." In
addition, there was no evidence that Fredco or New York Garments was licensed or
authorized by Harvard University to use its name in commerce or for any other use.
The dispositive portion of the decision of the Office of the Director General, IPO reads:
WHEREFORE, premises considered, the instant appeal is GRANTED. The appealed decision
is hereby REVERSED and SET ASIDE. Let a copy of this Decision as well as the trademark
application and records be furnished and returned to the Director of Bureau of Legal Affairs
for appropriate action. Further, let also the Directors of the Bureau of Trademarks and the
Administrative, Financial and Human Resources Development Services Bureau, and 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.10
Fredco filed a petition for review before the Court of Appeals assailing the decision of the
Director General.
The Decision of the Court of Appeals
In its assailed decision, the Court of Appeals affirmed the decision of the Office of the Director
General of the IPO.
The Court of Appeals adopted the findings of the Office of the Director General and ruled that
the latter correctly set aside the cancellation by the Director of the Bureau of Legal Affairs of
Harvard Universitys trademark registration under Class 25. The Court of Appeals 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. The Court of Appeals also ruled that the records failed to disclose any
explanation for Fredcos use of the name and mark "Harvard" and the words "USA,"
"Established 1936," and "Cambridge, Massachusetts" within an oblong device, "US Legend"
and "Europes No. 1 Brand." Citing Shangri-La International Hotel Management, Ltd. v.
Developers Group of Companies, Inc.,11 the Court of Appeals ruled:
One who has imitated the trademark of another cannot bring an action for infringement,
particularly against the true owner of the mark, because he would be coming to court with
unclean hands. Priority is of no avail to the bad faith plaintiff. Good faith is required in order to
ensure that a second user may not merely take advantage of the goodwill established by the
true owner.12
The dispositive portion of the decision of the Court of Appeals reads:
WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated
April 21, 2008 of the Director General of the IPO in Appeal No. 14-07-09 Inter Partes Case
No. 14-2005-00094 is hereby AFFIRMED.
SO ORDERED.13
Fredco filed a motion for reconsideration.
In its Resolution promulgated on 8 January 2009, the Court of Appeals denied the motion for
lack of merit.

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Hence, this petition before the Court.


The Issue
The issue in this case is whether the Court of Appeals committed a reversible error in
affirming the decision of the Office of the Director General of the IPO.
The Ruling of this Court
The petition has no merit.
There is no dispute that the mark "Harvard" used by Fredco is the same as the mark
"Harvard" in the "Harvard Veritas Shield Symbol" of Harvard University. It is also not disputed
that Harvard University was named Harvard College in 1639 and that then, as now, Harvard
University is located in Cambridge, Massachusetts, U.S.A. It is also unrefuted that Harvard
University has been using the mark "Harvard" in commerce since 1872. It is also established
that Harvard University has been using the marks "Harvard" and "Harvard Veritas Shield
Symbol" for Class 25 goods in the United States since 1953. Further, there is no dispute that
Harvard University has registered the name and mark "Harvard" in at least 50 countries.
On the other hand, Fredcos predecessor-in-interest, New York Garments, started using the
mark "Harvard" in the Philippines only in 1982. New York Garments filed an application with
the Philippine Patent Office in 1985 to register the mark "Harvard," which application was
approved in 1988. Fredco insists that the date of actual use in the Philippines should prevail
on the issue of who has the better right to register the marks.
Under Section 2 of Republic Act No. 166,14 as amended (R.A. No. 166), before a trademark
can be registered, it must have been actually used in commerce for not less than two months
in the Philippines prior to the filing of an application for its registration. While Harvard
University had actual prior use of its marks abroad for a long time, it did not have actual prior
use in the Philippines of the mark "Harvard Veritas Shield Symbol" before its application for
registration of the mark "Harvard" with the then Philippine Patents Office. However, Harvard
Universitys registration of the name "Harvard" is based on home registration which is allowed
under Section 37 of R.A. No. 166.15 As pointed out by Harvard University in its Comment:
Although Section 2 of the Trademark law (R.A. 166) requires for the registration of trademark
that the applicant thereof must prove that the same has been actually in use in commerce or
services for not less than two (2) months in the Philippines before the application for
registration is filed, where the trademark sought to be registered has already been registered
in a foreign country that is a member of the Paris Convention, the requirement of proof of use
in the commerce in the Philippines for the said period is not necessary. An applicant for
registration based on home certificate of registration need not even have used the mark or
trade name in this country.16
Indeed, in its Petition for Cancellation of Registration No. 56561, Fredco alleged that Harvard
Universitys registration "is based on home registration for the mark Harvard Veritas Shield
for Class 25."17
In any event, under Section 239.2 of Republic Act No. 8293 (R.A. No. 8293), 18 "[m]arks
registered under Republic Act No. 166 shall remain in force but shall be deemed to have
been granted under this Act x x x," which does not require actual prior use of the mark in
the Philippines. Since the mark "Harvard Veritas Shield Symbol" is now deemed granted
under R.A. No. 8293, any alleged defect arising from the absence of actual prior use in the
Philippines has been cured by Section 239.2.19 In addition, Fredcos registration was already
cancelled on 30 July 1998 when it failed to file the required affidavit of use/non-use for the
fifth anniversary of the marks registration. Hence, at the time of Fredcos filing of the Petition
for Cancellation before the Bureau of Legal Affairs of the IPO, Fredco was no longer the
registrant or presumptive owner of the mark "Harvard."

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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." Section 4(a)
of R.A. No. 166 provides:
Section 4. Registration of trade-marks, trade-names and service- marks on the principal
register. There is hereby established a register of trade-mark, trade-names and servicemarks which shall be known as the principal register. The owner of a trade-mark, a tradename or service-mark used to distinguish his goods, business or services from the goods,
business or services of others shall have the right to register the same on the principal
register, unless it:
(a) Consists of or comprises immoral, deceptive or scandalous manner, or matter which may
disparage or falsely suggest a connection with persons, living or dead, institutions,
beliefs, or national symbols, or bring them into contempt or disrepute;
(b) x x x (emphasis supplied)
Fredcos use of the mark "Harvard," coupled with its claimed origin in Cambridge,
Massachusetts, obviously suggests a false connection with Harvard University. On this
ground alone, Fredcos registration of the mark "Harvard" should have been disallowed.
Indisputably, Fredco does not have any affiliation or connection with Harvard University, or
even with Cambridge, Massachusetts. Fredco or its predecessor New York Garments was not
established in 1936, or in the U.S.A. as indicated by Fredco in its oblong logo. 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.
Section 4(a) of R.A. No. 166 is identical to Section 2(a) of the Lanham Act, 20 the trademark
law of the United States. These provisions are intended to protect the right of publicity of
famous individuals and institutions from commercial exploitation of their goodwill by
others.21 What Fredco has done in using the mark "Harvard" and the words "Cambridge,
Massachusetts," "USA" to evoke a "desirable aura" to its products is precisely to exploit
commercially the goodwill of Harvard University without the latters consent. This is a clear
violation of Section 4(a) of R.A. No. 166. Under Section 17(c) 22 of R.A. No. 166, such violation
is a ground for cancellation of Fredcos registration of the mark "Harvard" because the
registration was obtained in violation of Section 4 of R.A. No. 166.
Second, the Philippines and the United States of America are both signatories to the Paris
Convention for the Protection of Industrial Property (Paris Convention). The Philippines
became a signatory to the Paris Convention on 27 September 1965. Articles 6bis and 8 of the
Paris Convention state:
ARTICLE 6bis

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(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)
Thus, this Court has ruled that 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. 23
Article 8 of the Paris Convention has been incorporated in Section 37 of R.A. No. 166, as
follows:
Section 37. Rights of foreign registrants. Persons who are nationals of, domiciled in, or
have a bona fide or effective business or commercial establishment in any foreign country,
which is a party to any international convention or treaty relating to marks or trade-names, or
the repression of unfair competition to which the Philippines may be a party, shall be entitled
to the benefits and subject to the provisions of this Act to the extent and under the conditions
essential to give effect to any such convention and treaties so long as the Philippines shall
continue to be a party thereto, except as provided in the following paragraphs of this section.
xxxx
Trade-names of persons described in the first paragraph of this section shall be
protected without the obligation of filing or registration whether or not they form parts
of marks.24
x x x x (Emphasis supplied)
Thus, under Philippine law, a trade name of a national of a State that is a party to the Paris
Convention, whether or not the trade name forms part of 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.
Article 6bis of the Paris Convention has been administratively implemented in the Philippines
through two directives of the then Ministry (now Department) of Trade, which directives were
upheld by this Court in several cases.25 On 20 November 1980, then Minister of Trade
Secretary Luis Villafuerte issued a Memorandum directing the Director of Patents to reject,
pursuant to the Paris Convention, all pending applications for Philippine registration of
signature and other world-famous trademarks by applicants other than their original
owners.26 The Memorandum states:

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Pursuant to the Paris Convention for the Protection of Industrial Property to which the
Philippines is a signatory, you are hereby directed to reject all pending applications for
Philippine registration of signature and other world-famous trademarks by applicants other
than its original owners or users.
The conflicting claims over internationally known trademarks involve such name brands as
Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la
Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.
It is further directed that, in cases where warranted, Philippine registrants of such trademarks
should be asked to surrender their certificates of registration, if any, to avoid suits for
damages and other legal action by the trademarks foreign or local owners or original users.
You are also required to submit to the undersigned a progress report on the matter.
For immediate compliance.27
In a Memorandum dated 25 October 1983, then Minister of Trade and Industry Roberto
Ongpin affirmed the earlier Memorandum of Minister Villafuerte. Minister Ongpin directed the
Director of Patents to implement measures necessary to comply with the Philippines
obligations under the Paris Convention, thus:
1. Whether the trademark under consideration is well-known in the Philippines or is a
mark already belonging to a person entitled to the benefits of the CONVENTION, this
should be established, pursuant to Philippine Patent Office procedures in inter partes
and ex parte cases, according to any of the following criteria or any combination
thereof:
(a) a declaration by the Minister of Trade and Industry that the trademark
being considered is already well-known in the Philippines such that
permission for its use by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce internationally, supported by proof
that goods bearing the trademark are sold on an international scale,
advertisements, the establishment of factories, sales offices, distributorships,
and the like, in different countries, including volume or other measure of
international trade and commerce;
(c) that the trademark is duly registered in the industrial property
office(s) of another country or countries, taking into consideration the
dates of such registration;
(d) that the trademark has been long established and obtained goodwill and
general international consumer recognition as belonging to one owner or
source;
(e) that the trademark actually belongs to a party claiming ownership and has
the right to registration under the provisions of the aforestated PARIS
CONVENTION.
2. The word trademark, as used in this MEMORANDUM, shall include
tradenames, service marks, logos, signs, emblems, insignia or other similar
devices used for identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications for, or cancel the
registration of, trademarks which constitute a reproduction, translation or imitation of

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a trademark owned by a person, natural or corporate, who is a citizen of a country


signatory to the PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL
PROPERTY.
x x x x28 (Emphasis supplied)
In Mirpuri, 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.29 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. 30 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.31
To be protected under the two directives of the Ministry of Trade, an internationally well-known
mark need not be registered or used in the Philippines. 32 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. The Court ruled in Sehwani, Incorporated v.
In-N-Out Burger, Inc.:33
The fact that respondents marks are neither registered nor used in the Philippines is
of no moment. The scope of protection initially afforded by Article 6bis of the Paris
Convention has been expanded in the 1999 Joint Recommendation Concerning Provisions
on the Protection of Well-Known Marks, wherein the World Intellectual Property Organization
(WIPO) General Assembly and the Paris Union agreed to a nonbinding recommendation thata
well-known mark should be protected in a country even if the mark is neither
registered nor used in that country. Part I, Article 2(3) thereof provides:
(3) [Factors Which Shall Not Be Required] (a) A Member State shall not require, as a
condition for determining whether a mark is a well-known mark:
(i) that the mark has been used in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, the Member
State:
(ii) that the mark is well known in, or that the mark has been registered or that an
application for registration of the mark has been filed in or in respect of, any
jurisdiction other than the Member State; or
(iii) that the mark is well known by the public at large in the Member State. 34 (Italics in
the original decision; boldface supplied)
Indeed, 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.
Moreover, 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;

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(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 wellknown 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)
Since "any combination" of the foregoing criteria is sufficient to determine that a mark is
well-known, it is clearly not necessary that the mark be used in commerce in the Philippines.
Thus, 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 the assailed Decision of the Office of the Director General dated 21 April 2008, the Director
General found that:
Traced to its roots or origin, HARVARD is not an ordinary word. It refers to no other than
Harvard University, a recognized and respected institution of higher learning located in
Cambridge, Massachusetts, U.S.A. Initially referred to simply as "the new college," the
institution was named "Harvard College" on 13 March 1639, after its first principal donor, a
young clergyman named John Harvard. A graduate of Emmanuel College, Cambridge in
England, John Harvard bequeathed about four hundred books in his will to form the basis of
the college library collection, along with half his personal wealth worth several hundred
pounds. The earliest known official reference to Harvard as a "university" rather than "college"
occurred in the new Massachusetts Constitution of 1780.
Records also show that the first use of the name HARVARD was in 1638 for educational
services, policy courses of instructions and training at the university level. It has a Charter. Its
first commercial use of the name or mark HARVARD for Class 25 was on 31 December 1953
covered by UPTON Reg. No. 2,119,339 and 2,101,295. Assuming in arguendo, that the
Appellate may have used the mark HARVARD in the Philippines ahead of the Appellant, it still
cannot be denied that the Appellants use thereof was decades, even centuries, ahead of the
Appellees. More importantly, the name HARVARD was the name of a person whose deeds
were considered to be a cornerstone of the university. The Appellants logos, emblems or
symbols are owned by Harvard University. The name HARVARD and the logos, emblems or
symbols are endemic and cannot be separated from the institution. 35
Finally, in its assailed Decision, the Court of Appeals ruled:

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Records show that Harvard University is the oldest and one of the foremost educational
institutions in the United States, it being established in 1636. It is located primarily in
Cambridge, Massachusetts and was named after John Harvard, a puritan minister who left to
the college his books and half of his estate.
The mark "Harvard College" was first used in commerce in the United States in 1638 for
educational services, specifically, providing courses of instruction and training at the university
level (Class 41). Its application for registration with the United States Patent and Trademark
Office was filed on September 20, 2000 and it was registered on October 16, 2001. The
marks "Harvard" and "Harvard Ve ri tas Shield Symbol" were first used in commerce in the
the United States on December 31, 1953 for athletic uniforms, boxer shorts, briefs, caps,
coats, leather coats, sports coats, gym shorts, infant jackets, leather jackets, night shirts,
shirts, socks, sweat pants, sweatshirts, sweaters and underwear (Class 25). The applications
for registration with the USPTO were filed on September 9, 1996, the mark "Harvard" was
registered on December 9, 1997 and the mark "Harvard Ve ri tas Shield Symbol" was
registered on September 30, 1997.36
We also note that in a Decision37 dated 18 December 2008 involving a separate case
between Harvard University and Streetward International, Inc., 38 the Bureau of Legal Affairs of
the IPO ruled that the mark "Harvard" is a "well-known mark." This Decision, which cites
among others the numerous trademark registrations of Harvard University in various
countries, has become final and executory.
There is no question then, and this Court so declares, that "Harvard" is a well-known name
and mark not only in the United States but also internationally, including the Philippines. The
mark "Harvard" is rated as one of the most famous marks in the world. It has been registered
in at least 50 countries. It has been used and promoted extensively in numerous publications
worldwide. It has established a considerable goodwill worldwide since the founding of Harvard
University more than 350 years ago. It is easily recognizable as the trade name and mark of
Harvard University of Cambridge, Massachusetts, U.S.A., internationally known as one of the
leading educational institutions in the world. As such, even before Harvard University applied
for registration of the mark "Harvard" in the Philippines, the mark was already protected under
Article 6bis and Article 8 of the Paris Convention. Again, even without applying the Paris
Convention, Harvard University can invoke Section 4(a) of R.A. No. 166 which prohibits the
registration of a mark "which may disparage or falsely suggest a connection with persons,
living or dead,institutions, beliefs x x x."
WHEREFORE, we DENY the petition. We AFFIRM the 24 October 2008 Decision and 8
January 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 103394.

G.R. No. 180073

November 25, 2009

PROSOURCE INTERNATIONAL, INC., Petitioner,


vs.
HORPHAG RESEARCH MANAGEMENT SA, Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
reverse and set aside the Court of Appeals (CA) Decision 1 dated July 27, 2007 and
Resolution2 dated October 15, 2007 in CA-G.R. CV No. 87556. The assailed decision affirmed
the Regional Trial Court (RTC)3 Decision4 dated January 16, 2006 and Order5 dated May 3,
2006 in Civil Case No. 68048; while the assailed resolution denied petitioners motion for
reconsideration.

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The facts are as follows:


Respondent Horphag Research Management SA is a corporation duly organized and existing
under the laws of Switzerland and the owner6 of trademark PYCNOGENOL, a food
supplement sold and distributed by Zuellig Pharma Corporation. Respondent later discovered
that petitioner Prosource International, Inc. was also distributing a similar food supplement
using the mark PCO-GENOLS since 1996.7 This prompted respondent to demand that
petitioner cease and desist from using the aforesaid mark. 8
Without notifying respondent, petitioner discontinued the use of, and withdrew from the
market, the products under the name PCO-GENOLS as of June 19, 2000. It, likewise,
changed its mark from PCO-GENOLS to PCO-PLUS.9
On August 22, 2000, respondent filed a Complaint10 for Infringement of Trademark with Prayer
for Preliminary Injunction against petitioner, praying that the latter cease and desist from using
the brand PCO-GENOLS for being confusingly similar with respondents trademark
PYCNOGENOL. It, likewise, prayed for actual and nominal damages, as well as attorneys
fees.11
In its Answer,12 petitioner contended that respondent could not file the infringement case
considering that the latter is not the registered owner of the trademark PYCNOGENOL, but
one Horphag Research Limited. It, likewise, claimed that the two marks were not confusingly
similar. Finally, it denied liability, since it discontinued the use of the mark prior to the
institution of the infringement case. Petitioner thus prayed for the dismissal of the complaint.
By way of counterclaim, petitioner prayed that respondent be directed to pay exemplary
damages and attorneys fees.13
During the pre-trial, the parties admitted the following:
1. Defendant [petitioner] is a corporation duly organized and existing under the laws
of the Republic of the Philippines with business address at No. 7 Annapolis Street,
Greenhills, San Juan, Metro Manila;
2. The trademark PYCNOGENOL of the plaintiff is duly registered with the Intellectual
Property Office but not with the Bureau of Food and Drug (BFAD).
3. The defendants product PCO-GENOLS is duly registered with the BFAD but not
with the Intellectual Property Office (IPO).
4. The defendant corporation discontinued the use of and had withdrawn from the
market the products under the name of PCO-GENOLS as of June 19, 2000, with its
trademark changed from PCO-GENOLS to PCO-PLUS.
5. Plaintiff corporation sent a demand letter to the defendant dated 02 June 2000. 14
On January 16, 2006, the RTC decided in favor of respondent. It observed that
PYCNOGENOL and PCO-GENOLS have the same suffix "GENOL" which appears to be
merely descriptive and thus open for trademark registration by combining it with other words.
The trial court, likewise, concluded that the marks, when read, sound similar, and thus
confusingly similar especially since they both refer to food supplements. The court added that
petitioners liability was not negated by its act of pulling out of the market the products bearing
the questioned mark since the fact remains that from 1996 until June 2000, petitioner had
infringed respondents product by using the trademark PCO-GENOLS. As respondent
manifested that it was no longer interested in recovering actual damages, petitioner was
made to answer only for attorneys fees amounting to P50,000.00.15 For lack of sufficient
factual and legal basis, the court dismissed petitioners counterclaim. Petitioners motion for
reconsideration was likewise denied.

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On appeal to the CA, petitioner failed to obtain a favorable decision. The appellate court
explained that under the Dominancy or the Holistic Test, PCO-GENOLS is deceptively similar
to PYCNOGENOL. It also found just and equitable the award of attorneys fees especially
since respondent was compelled to litigate.16
Hence, this petition, assigning the following errors:
I. THAT THE COURT OF APPEALS ERRED IN AFFRIMING THE RULING OF THE
LOWER [COURT] THAT RESPONDENTS TRADEMARK P[YC]NOGENOLS (SIC)
WAS INFRINGED BY PETITIONERS PCO-GENOLS.
II. THAT THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF
ATTORNEYS FEES IN FAVOR OF RESPONDENT HORPHAG RESEARCH
MANAGEMENT S.A. IN THE AMOUNT OF Php50,000.00.17
The petition is without merit.
It must be recalled that respondent filed a complaint for trademark infringement against
petitioner for the latters use of the mark PCO-GENOLS which the former claimed to be
confusingly similar to its trademark PYCNOGENOL. Petitioners use of the questioned mark
started in 1996 and ended in June 2000. The instant case should thus be decided in light of
the provisions of Republic Act (R.A.) No. 16618 for the acts committed until December 31,
1997, and R.A. No. 829319 for those committed from January 1, 1998 until June 19, 2000.
A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any
combination thereof, adopted and used by a manufacturer or merchant on his goods to
identify and distinguish them from those manufactured, sold, or dealt by others. Inarguably, a
trademark deserves protection.20
Section 22 of R.A. No. 166, as amended, and Section 155 of R.A. No. 8293 define what
constitutes trademark infringement, as follows:
Sec. 22. Infringement, what constitutes. Any person who shall use, without the consent of
the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark
or tradename in connection with the sale, offering for sale, or advertising of any goods,
business or services on or in connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy of colorably imitate any
such mark or tradename and apply such reproduction, counterfeit, copy or colorable imitation
to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be
used upon or in connection with such goods, business, or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.
Sec. 155. Remedies; Infringement. Any person who shall, without the consent of the owner
of the registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant feature thereof in connection with the
sale, offering for sale, distribution, advertising of any goods or services including other
preparatory steps necessary to carry out the sale of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant
feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be used in
commerce upon or in connection with the sale, offering for sale, distribution, or advertising of
goods or services on or in connection with which such use is likely to cause confusion, or to
cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant

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for the remedies hereinafter set forth: Provided, That infringement takes place at the moment
any of the acts stated in Subsection 155.1 or this subsection are committed regardless of
whether there is actual sale of goods or services using the infringing material.
In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-A, and 20
thereof, the following constitute the elements of trademark infringement:
(a) A trademark actually used in commerce in the Philippines and registered in the
principal register of the Philippine Patent Office[;]
(b) [It] is used by another person in connection with the sale, offering for sale, or
advertising of any goods, business or services or in connection with which such use
is likely to cause confusion or mistake or to deceive purchasers or others as to the
source or origin of such goods or services, or identity of such business; or such
trademark is reproduced, counterfeited, copied or colorably imitated by another
person and such reproduction, counterfeit, copy or colorable imitation is applied to
labels, signs, prints, packages, wrappers, receptacles or advertisements intended to
be used upon or in connection with such goods, business or services as to likely
cause confusion or mistake or to deceive purchasers[;]
(c) [T]he trademark is used for identical or similar goods[;] and
(d) [S]uch act is done without the consent of the trademark registrant or assignee. 21
On the other hand, the elements of infringement under R.A. No. 8293 are as follows:
(1) The trademark being infringed is registered in the Intellectual Property Office;
however, in infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably
imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for
sale, or advertising of any goods, business or services; or the infringing mark or trade
name is applied to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods, business
or services;
(4) The use or application of the infringing mark or trade name is likely to cause
confusion or mistake or to deceive purchasers or others as to the goods or services
themselves or as to the source or origin of such goods or services or the identity of
such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee
thereof.22
In the foregoing enumeration, it is the element of "likelihood of confusion" that is the
gravamen of trademark infringement. But "likelihood of confusion" is a relative concept. The
particular, and sometimes peculiar, circumstances of each case are determinative of its
existence. Thus, in trademark infringement cases, precedents must be evaluated in the light
of each particular case.23
In determining similarity and likelihood of confusion, jurisprudence has developed two tests:
the Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the
similarity of the prevalent features of the competing trademarks that might cause confusion
and deception, thus constituting infringement.24 If the competing trademark contains the main,
essential and dominant features of another, and confusion or deception is likely to result,

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infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the
infringing label should suggest an effort to imitate. The question is whether the use of the
marks involved is likely to cause confusion or mistake in the mind of the public or to deceive
purchasers.25 Courts will consider more the aural and visual impressions created by the
marks in the public mind, giving little weight to factors like prices, quality, sales outlets, and
market segments.26
In contrast, the Holistic Test entails a consideration of the entirety of the marks as applied to
the products, including the labels and packaging, in determining confusing similarity.27 The
discerning eye of the observer must focus not only on the predominant words but also on the
other features appearing on both labels in order that the observer may draw his conclusion
whether one is confusingly similar to the other.28
The trial and appellate courts applied the Dominancy Test in determining whether there was a
confusing similarity between the marks PYCNOGENOL and PCO-GENOL. Applying the test,
the trial court found, and the CA affirmed, that:
Both the word[s] PYCNOGENOL and PCO-GENOLS have the same suffix "GENOL" which
on evidence, appears to be merely descriptive and furnish no indication of the origin of the
article and hence, open for trademark registration by the plaintiff thru combination with
another word or phrase such as PYCNOGENOL, Exhibits "A" to "A-3." Furthermore, although
the letters "Y" between P and C, "N" between O and C and "S" after L are missing in the
[petitioners] mark PCO-GENOLS, nevertheless, when the two words are pronounced, the
sound effects are confusingly similar not to mention that they are both described by their
manufacturers as a food supplement and thus, identified as such by their public consumers.
And although there were dissimilarities in the trademark due to the type of letters used as well
as the size, color and design employed on their individual packages/bottles, still the close
relationship of the competing products name in sounds as they were pronounced, clearly
indicates that purchasers could be misled into believing that they are the same and/or
originates from a common source and manufacturer.29
We find no cogent reason to depart from such conclusion.
This is not the first time that the Court takes into account the aural effects of the words and
letters contained in the marks in determining the issue of confusing similarity. In Marvex
Commercial Co., Inc. v. Petra Hawpia & Co., et al., 30 cited in McDonalds Corporation v. L.C.
Big Mak Burger, Inc.,31 the Court held:
The following random list of confusingly similar sounds in the matter of trademarks, culled
from Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will reinforce our view that
"SALONPAS" and "LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop";
"Jantzen" and "Jass-Sea"; "Silver Flash" and "Supper Flash"; "Cascarete" and "Celborite";
"Celluloid" and "Cellonite"; "Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean"; "Hebe"
and "Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo." Leon Amdur, in his book "TradeMark Law and Practice," pp. 419-421, cities, as coming within the purview of the idem
sonans rule, "Yusea" and "U-C-A," "Steinway Pianos" and "Steinberg Pianos," and "SevenUp" and "Lemon-Up." In Co Tiong vs. Director of Patents, this Court unequivocally said that
"Celdura" and "Cordura" are confusingly similar in sound; this Court held in Sapolin Co. vs.
Balmaceda, 67 Phil. 795 that the name "Lusolin" is an infringement of the trademark
"Sapolin," as the sound of the two names is almost the same. 32
Finally, we reiterate that the issue of trademark infringement is factual, with both the trial and
appellate courts finding the allegations of infringement to be meritorious. As we have
consistently held, factual determinations of the trial court, concurred in by the CA, are final
and binding on this Court.33 Hence, petitioner is liable for trademark infringement.
We, likewise, sustain the award of attorneys fees in favor of respondent. Article 2208 of the
Civil Code enumerates the instances when attorneys fees are awarded, viz.:

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Art. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:
1. When exemplary damages are awarded;
2. When the defendants act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;
3. In criminal cases of malicious prosecution against the plaintiff;
4. In case of a clearly unfounded civil action or proceeding against the plaintiff;
5. Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff"s plainly valid, just and demandable claim;
6. In actions for legal support;
7. In actions for the recovery of wages of household helpers, laborers and skilled
workers;
8. In actions for indemnity under workmens compensation and employers liability
laws;
9. In a separate civil action to recover civil liability arising from a crime;
10. When at least double judicial costs are awarded;
11. In any other case where the court deems it just and equitable that attorneys fees
and expenses of litigation should be recovered.
In all cases, the attorneys fees and expenses of litigation must be reasonable.
As a rule, an award of attorneys fees should be deleted where the award of moral and
exemplary damages is not granted.34 Nonetheless, attorneys fees may be awarded where the
court deems it just and equitable even if moral and exemplary damages are unavailing. 35 In
the instant case, we find no reversible error in the grant of attorneys fees by the CA.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of
Appeals Decision dated July 27, 2007 and its Resolution dated October 15, 2007 in CA-G.R.
CV No. 87556 are AFFIRMED.
SO ORDERED.