IPL| August 31| 1

G.R. No. L-18337

January 30, 1965

The corresponding declaration, which was under oath, contained, among others, the
following:

CHUA
vs.
PHILIPPINES PATENT OFFICE and SY TUO, respondents.
Chipeco
&
Alcaraz,
Perfecto E. de Vera for respondents.

Jr.

CHE, petitioner,
3. That he believes himself to be the lawful owner of the trademark sought to
be registered.
for

petitioner.

PAREDES, J.:
This is a petition to review the decision of the Director of Patents, in Inter Partes Case
No. 161, denying the application of petitioner Chua Che for the registration of "T.M. X7" for use on soap Class 51, being manufactured by said Chua Che, upon the
opposition of respondent Sy Tuo.
Under date of October 30, 1958, Chua Che presented with the Philippines Patent Office
a petition praying for the registration in his favor the trade name "X-7". The petition,
states:
The undersigned CHUA CHE, a citizen of China, a resident of 2804 Limay St.,
Tondo, Manila, and doing business at same address, has adopted and used the
trademark "X-7" shown in the accompanying Drawing.
In accordance with the requirements of law, the undersigned declares that
this trademark
1. Was first used by him on June 10, 1957.
2. Was first used by him in commerce in or with the Philippines on June 10,
1957.
3. Has been continuously used by him in trade in or with the Philippines for
more than one year.
4. Is, on the date of this application, actually used by him on the following
goods, classified according to the Official Classification of Goods (Rule 82):
Class 51 Soap
5. Is applied to the goods or to the packages containing the same, by placing
thereon a printed label on which the trademark is shown, or by directly
impressing the mark to the goods.

4. That the said trademark is in actual use in commerce in or with the

Philippines not less than two months before this application is filed.
5. That no other person, partnership, corporation, or association, to the best
of his knowledge and belief, has the right to use said trademark in the
Philippines, either in the identical form or in any such near resemblance
thereto as might be calculated to deceive.
Under date of July 6, 1959, an Examiner of the Department of Commerce and
Industry, submitted a report recommending the allowance of the application, which
report was approved by the Supervising TM Examiner. After the Notice of allowance
was published in the Official Gazette, as required, respondent Sy Tuo presented a
"Notice of Opposition," dated October 15, 1959, anchoring said opposition on the
following allegations:
1. The registration of the trademark "X-7" as applied for by CHUA CHE will not
only violate the rights and interests of the Oppositor over his registered
trademark "X-7" covered by Certificate of Registration No. 5,000, issued April
21, 1951, but will also tend to mislead the purchasing public and make it
convenient for unscrupulous dealers to pass off the goods of the applicant
CHUA CHE, for those of the oppositor SY TUO, to the injury of both the
oppositor and the public.
2. The registration of the said trademark "X-7" in the name of CHUA CHE will
be in violation of, and will run counter to, Section 4 (d) of Republic Act No.
166, as amended, because it is confusingly similar to the trademark "X-7"
covered by Registration No. 5,000 previously registered to, and being used by
the oppositor and is not abandoned.
The Oppositor SY TUO, doing business as the Western Cosmetic Laboratory
will rely on the following facts:
(a) Oppositor has prior use of the trademark "X-7" as he has been
using it extensively and continuously since July 31, 1952, while the
applicant, Chua Che, allegedly used his trademark only since June
10, 1957.1wph1.t

IPL| August 31| 2

(b) Oppositor's mark "X-7" is distinctive and his invented mark and
not merely an ordinary, common and weak mark.
(c) The oppositor and the applicant use the trademark "X-7" for allied
and closely related products.
(d) The oppositor has spent a huge amount by way of advertising
and advertising his "X-7" brand.
(e) The oppositor has spent a big amount in expanding his business
for the manufacture of toilet soap and crystal laundry soap with his
already popular "X-7" brand.
(f) The trademark applied for by the applicant Chua Che consists of
the trademark "X-7" and anyone is likely to be misled as to the
source or origin by the close resemblance or identity with the
trademark "X-7" of the oppositor.
Attached to the Opposition were labels (samples) being used by oppositor on his
products, which clearly show "X-7".
Petitioner herein presented an Answer to Notice of Opposition, claiming among others
that the grounds of opposition are not correct, since although it is admitted that "X-7"
is registered in the name of oppositor, said trademark is not being used on soap, but
purely toilet articles. After the presentation of the Answer the case was heard, wherein
the parties presented their respective evidence, both testimonial and documentary. In
the memoranda of the contenders, they limited the principal issues, thus

Based on those facts there is no question that opposer's first use of the
trademark X-7 on July 31, 1953, is prior to applicant's first use of the mark on
June 10, 1957. The only question then in this case is whether or not
purchasers of X-7 perfume, lipstick and nail polish would likely upon seeing X7 laundry soap, attribute common origin to the products or assume that there
existed some kind of trade connection between applicant and opposer.
Opposer's record shows that he has been using since July 31, 1953 the
trademark X-7 on perfume, lipstick and nail polish; that he has spent
substantial amounts of money in building upon the goodwill of this trademark
through advertisements in all kinds of media through newspapers of
general circulation, by means of billboards in various places in the Philippines,
and also over the radio and television. In these advertisements opposer has
spent about P120,000.00. There is no question that opposer enjoys a valuable
goodwill in the trademark X-7.
The products of the parties, while specifically different, are products intended
for use in the home and usually have common purchasers. Furthermore, the
use of X-7 for laundry soap is but a natural expansion of business of the
opposer. In fact, herein opposer in 1956, prior to the alleged date of first use
by respondent-applicant of the trademark X-7 for laundry soap on June 10,
1957, had made steps in expanding the use of this trademark to granulated
soap. Under these circumstances, it is concluded that the average purchasers
are likely to associate X-7 laundry soap with X-7 perfume, lipstick and nail
polish or to think that the products have common origin or sponsorship.
IN VIEW OF THE ABOVE FINDINGS, the opposition in this case should be as it
is hereby sustained and consequently Application Serial No. 6941, of Chua
Che, is also hereby rejected.

Oppositor SY TUO
OPPOSITION SUSTAINED
The registration of the trademark "X-7" in the name of applicant CHUA CHE
will likely mislead the public so as to make them believe that said goods are
manufactured or sponsored by or in some way in trade associated with
opposer.

The above judgment is now before Us, applicant-appellant claiming that it was error for
the Director to conclude that opposer SY TUO had priority to use the trademark in
question, and that the use by appellant of the trademark "X-7" on granulated soap to
be manufactured and sold by him, would likely mislead purchasers.

Applicant CHUA CHE

In Inter Partes proceedings, the principal issue is "priority of adoption and
use." Since opposer has not yet used "X-7" mark on soap, but will still use it,
applicant should be entitled to the registration of the same.
The Director of Patents rendered judgment on January 18, 1961, the pertinent portions
of which read:

At the very outset, we would like to state that in cases of the nature of the one at bar,
only questions of law should be raised, and the only exception to this rule, meaning
that findings of facts may be reviewed, is when such findings are not supported by
substantial evidence (Sec. 2, Rule 44, Revised Rules). The finding of the Director of
Patents Office to the effect that opposer-appellee Sy Tuo had priority of use and
adoption of the trademark "X-7", is for all intents and purposes, one of fact. This being
the case, such finding becomes conclusive to this Court. Even on this sole issue alone,
the petition for review must fall.

IPL| August 31| 3

However, there are other matters which must be clarified. For instance, the fact that
appellee has not yet used the trademark "X-7" on granulated soap, the product on
which appellant wants to use the said trademark. The circumstance of non-actual use
of the mark on granulated soap by appellee, does not detract from the fact that he has
already a right to such a trademark and should, therefore, be protected. The
observation of the Director of Patents to the effect that "the average purchasers are
likely to associate X-7 laundry soap with X-7 perfume, lipstick and nail polish or to
think that the products have common origin or sponsorship," is indeed well taken. It
has been pointed out by appellant that the product upon which the trademark X-7 will
be used (laundry soap) is different from those of appellee's, and therefore no
infringement and/or confusion may result. We find no merit in the above contention,
for it has been held that while it is no longer necessary to establish that the goods of
the parties possess the same descriptive properties, as previously required under the
Trade Mark Act of 1905, registration of a trademark should be refused in cases where
there is a likelihood of confusion, mistake, or deception, even though the goods fall
into different categories. (Application of Sylvan Sweets Co., 205 F. 2nd, 207.) The
products of appellee are common household items nowadays, in the same manner as
laundry soap. The likelihood of purchasers to associate those products to a common
origin is not far-fetched. Both from the standpoint of priority of use and for the
protection of the buying public and, of course, appellee's rights to the trademark "X-7",
it becomes manifest that the registration of said trademark in favor of applicantappellant should be denied.
PREMISES CONSIDERED, the decision sought to be reviewed should be, as it is hereby
affirmed in all respects, with costs against appellant CHUA CHE in both instances.

IPL| August 31| 4

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 partyapplicant) 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.

G.R. No. L-23023

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.

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
Catalino
S.
Maravilla
for
respondent
Florentino
Office of the Solicitor General for respondent Tiburcio S. Evalle.

petitioner.
Maliwat.

REYES, J.B.L., J.:

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 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.

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 applicant2 Jose P. Sta. Ana, the herein petitioner.

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.

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.

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:

IPL| August 31| 5

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 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

IPL| August 31| 6

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.

entitled to exclude use of its trademark on the related class of goods above-referred
to.

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:

Republic Act No. 166, as amended, provides:

. . . 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.
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

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.

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
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.

IPL| August 31| 7

G.R. No. L-26676 July 30, 1982

PHILIPPINE
REFINING
CO.,
vs.
NG SAM and THE DIRECTOR OF PATENTS, respondents.

INC., petitioner,

Ponce Enrile, Siguion Reyna, Montecillo & Bello and Associates for petitioner.
Primitivo C. Bucasas for respondents.

ESCOLIN, J.:
The sole issue raised in this petition for review of the decision of the Director of patents
is whether or not the product of respondent, Ng Sam, which is ham, and those of
petitioner consisting of lard, butter, cooking oil and soap are so related that the use of
the same trademark "CAMIA" on said goods would likely result in confusion as to their
source or origin.
The trademark "CAMIA" was first used ill the Philippines by petitioner on its products in
1922. In 1949, petitioner caused the registration of said trademark with the Philippine
Patent Office under certificates of registration Nos. 1352-S and 1353-S, both issued on
May 3, 1949. Certificate of Registration No. 1352-S covers vegetable and animal fats,
particularly lard, butter and cooking oil, all classified under Class 47 (Foods and
Ingredients of Food) of the Rules of Practice of the Patent Office, while certificate of
registration No. 1353-S applies to abrasive detergents, polishing materials and soap of
all kinds (Class 4).
On November 25, 1960, respondent Ng Sam, a citizen residing in Iloilo City, filed an
application with the Philippine Patent office for registration of the Identical trademark
"CAMIA" for his product, ham, which likewise falls under Class 47. Alleged date of first
use of the trademark by respondent was on February 10, 1959.

IPL| August 31| 8

After due publication of the application, petitioner filed an opposition, in accordance
with Section 8 of Republic Act No. 166, otherwise known as the Trademark Law, as
amended. Basis of petitioner's opposition was Section 4(d) of said law, which provides
as unregistrable:

1. CAMIA Application No. 280 Registration No. SR-320 Date

Registered May 26, 1960 Owner Everbright Development
Company Business Address 310 M. H. del Pilar Grace Park,
Caloocan City Class 4 Thread and Yarn

a mark which consists of or comprises a mark or tradename which so

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 services of the applicant, to cause confusion
or mistake or to deceive purchasers.

2. CAMIA and Representation Application No. 538 Date Filed

August 10, 1945 Date Registered - April 20, 1946 Owner F.E.
Zuellig, Inc. Business Address 55 Rosario St., Manila Class 43
Particular Good on which mark is used: Textiles, Embroideries laces,
etc.

The parties submitted the case for decision without presenting any evidence:
thereafter the Director of patents rendered a decision allowing registration of the
trademark "CAMIA" in favor of Ng Sam.
Petitioner moved for a reconsideration, but the same was denied.
Hence, this petition.
A rudimentary precept in trademark protection is that "the right to a trademark is a
limited one, in the sense that others may used the same mark on unrelated
goods." 1 Thus, as pronounced by the United States Supreme Court in the case
of American Foundries vs. Robertson 2, "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 articles of a different description."
Such restricted right over a trademark is likewise reflected in our Trademark law.
Under Section 4(d) of the law, registration of a trademark which so resembles another
already registered or in use should be denied, where to allow such registration could
likely result in confusion, mistake or deception to the consumers. Conversely, where no
confusion is likely to arise, as in this case, registration of a similar or even Identical
mark may be allowed.
The term "CAMIA" is descriptive of a whole genus of garden plants with fragrant white
flowers. Some people call the "CAMIA" the "white ginger plant" because of its tuberous
roots, while children refer to it as the butterfly flower because of its shape. Being a
generic and common term, its appropriation as a trademark, albeit in a fanciful manner
in that it bears no relation to the product it Identifies, is valid. However, the degree of
exclusiveness accorded to each user is closely restricted. 3
The records of this case disclose that the term "CAMIA" has been registered as a
trademark not only by petitioner but by two (2) other concerns, as follows:

A trademark is designed to Identify the user. But it should be so distinctive and

sufficiently original as to enable those who come into contact with it to recognize
instantly the Identity of the user. " It must be affirmative and definite, significant and
distinctive, capable to indicate origin." 4
It is evident that "CAMIA" as a trademark is far from being distinctive. By itself, it does
not Identify petitioner as the manufacturer or producer of the goods upon which said
mark is used, as contra-distinguished to trademarks derived from coined words such as
"Rolex", "Kodak" or "Kotex". It has been held that if a mark is so commonplace that it
cannot be readily distinguished from others, then it is apparent that it cannot Identify a
particular business; and he who first adopted it cannot be injured by any subsequent
appropriation or imitation by others, and the public will not be deceived." 5
The trademark "CAMIA" is used by petitioner on a wide range of products: lard, butter,
cooking oil, abrasive detergents, polishing materials and soap of all kinds. Respondent
desires to use the same on his product, ham. 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.
In his decision, the Director of Patents enumerated the factors that set respondent's
product apart from the goods of petitioner. He opined and We quote:
I have taken into account such factors as probable purchaser attitude
and habits, marketing activities, retail outlets, and commercial
impression likely to be conveyed by the trademarks if used in
conjunction with the respective goods of the parties. I believe that
ham on one hand, and lard, butter, oil, and soap on the other are
products that would not move in the same manner through the same
channels of trade. They pertain to unrelated fields of manufacture,
might be distributed and marketed under dissimilar conditions, and
are displayed separately even though they frequently may be sold
through the same retail food establishments. Opposer's products are

IPL| August 31| 9

ordinary day-to-day household items whereas ham is not necessarily
so. Thus, the goods of the parties are not of a character which
purchasers would be likely to attribute to a common origin. (p. 23,
Rollo).

SO ORDERED.

The observation and conclusion of the Director of Patents are correct. The particular
goods of the parties are so unrelated that consumers would not in any probability
mistake one as the source or origin of the product of the other. "Ham" is not a daily
food fare for the average consumer. One purchasing ham would exercise a more
cautious inspection of what he buys on account of it price. Seldom, if ever, is the
purchase of said food product delegated to household helps, except perhaps to those
who, like the cooks, are expected to know their business. Besides, there can be no
likelihood for the consumer of respondent's ham to confuse its source as anyone but
respondent. The facsimile of the label attached by him on his product, his business
name "SAM'S HAM AND BACON FACTORY" written in bold white letters against a
reddish orange background 6, is certain to catch the eye of the class of consumers to
which he caters.
In addition, the goods of petitioners are basically derived from vegetable oil and animal
fats, while the product of respondent is processed from pig's legs. A consumer would
not reasonably assume that, petitioner has so diversified its business as to include the
product of respondent.
Mr. Runolf Callman, in Section 80.3, VOL. I, p. 1121 of his book, Unfair Competition
and Trade Marks, declare:
While confusion of goods can only be evident, where the litigants are
actually in competition, confusion of business may arise between
non-competitive interests as well. This is true whether or not the
trademarks are registered. Sec. 16 of the Trademark Act, in referring
to 'merchandise of substantially the same descriptive properties,
embraces
competitive
and
non-competitive
trademark
infringement but it is not so extensive as to be applicable to cases
where the public would not reasonably expect the plaintiff to make or
sell the same class of goods as those made or sold by the defendant.
(Emphasis supplied).
In fine, We hold that the businesss of the parties are non-competitive and their
products so unrelated that the use of Identical trademarks is not likely to give rise to
confusion, much less cause damage to petitioner.

G.R. No. L-44707 August 31, 1982

HICKOK
MANUFACTURING
CO.,
INC., petitioner,
vs.
COURT OF APPEALS ** and SANTOS LIM BUN LIONG, respondents.
Sycip, Salazar, Feliciano, Hernandez & Castillo Law Offices for petitioner.
Taada, Sanchez, Tafiada & Tanada Law Offices and George R. Arbolario for
respondents.
&

WHEREFORE, the instant petition is hereby dismissed and the decision of the Director
of Patents in Inter Partes Case No. 231 affirmed in toto. Costs against petitioner.

TEEHANKEE, J.:1wph1.t

IPL| August 31| 10

The Court affirms on the strength of controlling doctrine as reaffirmed in the
companion case of Esso Standard Eastern Inc. vs. Court of Appeals 1 promulgated also
on this date and the recent case of Philippine Refining Co., Inc. vs. Ng Sam and
Director of Parents 2 the appealed decision of the Court of Appeals reversing the patent
director's decision and instead dismissing petitioner's petition to cancel private
respondent's registration of the trademark of HICKOK for its Marikina shoes as against
petitioner's earlier registration of the same trademark for its other non-competing
products.
On the basis of the applicable reasons and considerations extensively set forth in the
above-cited controlling precedents and the leading case of Acoje Mining Co., Inc. vs.
Director of Patents 3 on which the appellate court anchored its decision at bar, said
decision must stand affirmed, as follows: 1wph1.t
An examination of the trademark of petitioner-appellee and that of
registrant-appellant convinces us that there is a difference in the
design and the coloring of, as well as in the words on the ribbons, the
two trademarks.
In petitioner-appellee's trademark for handkerchiefs (Exhibit 'Q'), the
word 'HICKOK' is in red with white background in the middle of two
branches of laurel in light gold. At the lower part thereof is a ribbon
on which are the words 'POSITIVELY FINER' in light gold. In the
trademark for underwear (Exhibit 'R'), the word 'HICKOK' is also in
red with white background in the middle of two branches of laurel in
dark gold with similar ribbons and the words 'POSITIVELY FINER' in
dark gold. And in the trademark for briefs (Exhibit 'S'), the word
'HICKOK' is in white but with red background in the middle of two
branches of laurel, the leaves being in dark gold with white edges,
and with similar ribbon and words 'POSITIVELY FINER' in dark gold.
In contrast, in respondent-appellant's trademark (Exhibit 'J'), the
word 'HICKOK' is in white with gold background between the two
branches of laurel in red, with the word 'SHOES' also in red below the
word 'HICKOK'.t@lF The ribbon is in red with the words 'QUALITY
AT YOUR FEET,' likewise in red.
While the law does not require that the competing trademarks be
Identical, the two marks must be considered in their entirety, as they
appear in the respective labels, in relation to the goods to which they
are attached.
The case of H.E. Heacock Co. vs. American Trading Co., 56 Phil. 763,
cited by petitioner - appellee, is hardly applicable here, because the
defendant in that case imported and sold merchandise which are

very similar to, and precisely of the same designs as, that imported
and sold by the plaintiff. ...
In the recent case of Acoje Mining Co., Inc. vs. Director of Patents,
38 SCRA 480, 482-483, the Supreme Court stated - 1wph1.t
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 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 on the trademark LOTUS.
Even on the rare occasion that a mistake does
occur, it can easily be rectified. Moreover, there is
no denying that the possibility of confusion is
remote considering 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.
From the statements of the Supreme Court in the two cases
aforementioned, we gather that there must be not only resemblance
between the trademark of the plaintiff and that of the defendant, but
also similarity of the goods to which the two trademarks are
respectively attached.
Since in this case the trademark of petitioner-appellee is used in the
sale of leather wallets, key cases, money folds made of leather, belts,
men's briefs, neckties, handkerchiefs and men's socks, and the
trademark of registrant-appellant is used in the sale of shoes, which
have different channels of trade, the Director of Patents, as in the
case of Acoje Mining Co., Inc. vs. Director of Patents, supra, 'ought
to have reached a different conclusion.

IPL| August 31| 11

It is established doctrine, as held in the above-cited cases, that "emphasis should be
on the similarity of the products involved and not on the arbitrary classification or
general description of their properties or characteristics" 4 and that "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." 5 Taking into account the facts of record that petitioner, a foreign corporation
registered the trademark for its diverse articles of men's wear such as wallets, belts
and men's briefs which are all manufactured here in the Philippines by a licensee
Quality House, Inc. (which pays a royalty of 1-1/2 % of the annual net sales) but are
so labelled as to give the misimpression that the said goods are of foreign (stateside)
manufacture and that respondent secured its trademark registration exclusively for
shoes (which neither petitioner nor the licensee ever manufactured or traded in) and
which are clearly labelled in block letters as "Made in Marikina, Rizal, Philippines," no
error can be attributed to the appellate court in upholding respondent's registration of
the same trademark for his unrelated and non-competing product of Marikina shoes. 6
ACCORDINGLY, the petition is dismissed and the appealed judgment of the Court of
Appeals is hereby affirmed.

IPL| August 31| 12

G.R. No. 148222

August 15, 2003

PEARL
&
DEAN
vs.
SHOEMART,
INCORPORATED,
INCORPORATED, Respondents.

(PHIL.),
and

INCORPORATED, Petitioner,
NORTH

EDSA

MARKETING,

DECISION
CORONA, J.:
In the instant petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision 1 of the
Court of Appeals reversing the October 31, 1996 decision 2of the Regional Trial Court of
Makati, Branch 133, in Civil Case No. 92-516 which declared private respondents
Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable for infringement of
trademark and copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals 3 contained a summary of this
dispute:
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the
manufacture of advertising display units simply referred to as light boxes. These units
utilize specially printed posters sandwiched between plastic sheets and illuminated with
back lights. Pearl and Dean was able to secure a Certificate of Copyright Registration
dated January 20, 1981 over these illuminated display units. The advertising light
boxes were marketed under the trademark "Poster Ads". The application for
registration of the trademark was filed with the Bureau of Patents, Trademarks and
Technology Transfer on June 20, 1983, but was approved only on September 12, 1988,
per Registration No. 41165. From 1981 to about 1988, Pearl and Dean employed the
services of Metro Industrial Services to manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc.
(SMI) for the lease and installation of the light boxes in SM City North Edsa. Since SM
City North Edsa was under construction at that time, SMI offered as an alternative, SM
Makati and SM Cubao, to which Pearl and Dean agreed. On September 11, 1985, Pearl
and Deans General Manager, Rodolfo Vergara, submitted for signature the contracts
covering SM Cubao and SM Makati to SMIs Advertising Promotions and Publicity
Division Manager, Ramonlito Abano. Only the contract for SM Makati, however, was
returned signed. On October 4, 1985, Vergara wrote Abano inquiring about the other
contract and reminding him that their agreement for installation of light boxes was not
only for its SM Makati branch, but also for SM Cubao. SMI did not bother to reply.

Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl and
Dean that it was rescinding the contract for SM Makati due to non-performance of the
terms thereof. In his reply dated February 17, 1986, Vergara protested the unilateral
action of SMI, saying it was without basis. In the same letter, he pushed for the signing
of the contract for SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted by Pearl
and Dean to fabricate its display units, offered to construct light boxes for Shoemarts
chain of stores. SMI approved the proposal and ten (10) light boxes were subsequently
fabricated by Metro Industrial for SMI. After its contract with Metro Industrial was
terminated, SMI engaged the services of EYD Rainbow Advertising Corporation to make
the light boxes. Some 300 units were fabricated in 1991. These were delivered on a
staggered basis and installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes
were installed at SM City and in the fastfood section of SM Cubao. Upon investigation,
Pearl and Dean found out that aside from the two (2) reported SM branches, light
boxes similar to those it manufactures were also installed in two (2) other SM stores. It
further discovered that defendant-appellant North Edsa Marketing Inc. (NEMI), through
its marketing arm, Prime Spots Marketing Services, was set up primarily to sell
advertising space in lighted display units located in SMIs different branches. Pearl and
Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to
both SMI and NEMI enjoining them to cease using the subject light boxes and to
remove the same from SMIs establishments. It also demanded the discontinued use of
the trademark "Poster Ads," and the payment to Pearl and Dean of compensatory
damages in the amount of Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twentyfour (224) light boxes and NEMI took down its advertisements for "Poster Ads" from
the lighted display units in SMIs stores. Claiming that both SMI and NEMI failed to
meet all its demands, Pearl and Dean filed this instant case for infringement of
trademark and copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently
developed its poster panels using commonly known techniques and available
technology, without notice of or reference to Pearl and Deans copyright. SMI noted
that the registration of the mark "Poster Ads" was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word "Poster Ads"
is a generic term which cannot be appropriated as a trademark, and, as such,
registration of such mark is invalid. It also stressed that Pearl and Dean is not entitled
to the reliefs prayed for in its complaint since its advertising display units contained no
copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that Pearl and Dean
had no cause of action against it and that the suit was purely intended to malign SMIs

IPL| August 31| 13

good name. On this basis, SMI, aside from praying for the dismissal of the case, also
counterclaimed for moral, actual and exemplary damages and for the cancellation of
Pearl and Deans Certification of Copyright Registration No. PD-R-2558 dated January
20, 1981 and Certificate of Trademark Registration No. 4165 dated September 12,
1988.
NEMI, for its part, denied having manufactured, installed or used any advertising
display units, nor having engaged in the business of advertising. It repleaded SMIs
averments, admissions and denials and prayed for similar reliefs and counterclaims as
SMI."

(4) to permanently refrain from infringing the copyright on plaintiffs light

boxes and its trademark "Poster Ads".
Defendants counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED.4
On appeal, however, the Court of Appeals reversed the trial court:

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally liable for
infringement of copyright under Section 2 of PD 49, as amended, and infringement of
trademark under Section 22 of RA No. 166, as amended, and are hereby penalized
under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA 166, as
amended. Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a)
actual
representing
derived
as
a
ment
of
from 1991 to 1992

(3) to deliver, under oath, to the National Library, all filler-posters using the
trademark "Poster Ads", for destruction; and

damages
by
result

of
plaintiffs

- P16,600,000.00,
profits
defendants
infringecopyright

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00
(d) attorneys fees - P1,000,000.00
plus

Since the light boxes cannot, by any stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be
properly classified as a copyrightable class "O" work, we have to agree with SMI when
it posited that what was copyrighted were the technical drawings only, and not the light
boxes themselves, thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright over the
drawings like plaintiff-appellants will not extend to the actual object. It has so been
held under jurisprudence, of which the leading case is Baker vs. Selden (101 U.S. 841
(1879). In that case, Selden had obtained a copyright protection for a book entitled
"Seldens Condensed Ledger or Bookkeeping Simplified" which purported to explain a
new system of bookkeeping. Included as part of the book were blank forms and
illustrations consisting of ruled lines and headings, specially designed for use in
connection with the system explained in the work. These forms showed the entire
operation of a day or a week or a month on a single page, or on two pages following
each other. The defendant Baker then produced forms which were similar to the forms
illustrated in Seldens copyrighted books. The Court held that exclusivity to the actual
forms is not extended by a copyright. The reason was that "to grant a monopoly in the
underlying art when no examination of its novelty has ever been made would be a
surprise and a fraud upon the public; that is the province of letters patent, not of
copyright." And that is precisely the point. No doubt aware that its alleged original
design would never pass the rigorous examination of a patent application, plaintiffappellant fought to foist a fraudulent monopoly on the public by conveniently resorting
to a copyright registration which merely employs a recordal system without the benefit
of an in-depth examination of novelty.

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all light
boxes of SMI which were fabricated by Metro Industrial Services and EYD
Rainbow Advertising Corporation;

The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge
Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a
copyright over an unpublished drawing entitled "Bridge Approach the drawing
showed a novel bridge approach to unsnarl traffic congestion". The defendant
constructed a bridge approach which was alleged to be an infringement of the new
design illustrated in plaintiffs drawings. In this case it was held that protection of the

IPL| August 31| 14

drawing does not extend to the unauthorized duplication of the object drawn because
copyright extends only to the description or expression of the object and not to the
object itself. It does not prevent one from using the drawings to construct the object
portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz
Homes, Inc. v. Maddox, 379 F. 2d 84, it was held that there is no copyright
infringement when one who, without being authorized, uses a copyrighted architectural
plan to construct a structure. This is because the copyright does not extend to the
structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over the
technical drawings of the latters advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate
Appellate Court that the protective mantle of the Trademark Law extends only to the
goods used by the first user as specified in the certificate of registration, following the
clear mandate conveyed by Section 20 of Republic Act 166, as amended, otherwise
known as the Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of
registration of a mark or trade-name shall be prima facie evidence of the validity of the
registration, the registrants ownership of the mark or trade-name, and of the
registrants 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." (underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration of
the trademark "Poster Ads" with the Bureau of Patents, Trademarks, and Technology
Transfer. Said trademark was recorded in the Principal Register on September 12, 1988
under Registration No. 41165 covering the following products: stationeries such as
letterheads, envelopes and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the
part of the defendants-appellants for their use of the words "Poster Ads", in the
advertising display units in suit. Jurisprudence has interpreted Section 20 of the
Trademark Law as "an implicit permission to a manufacturer to venture into the
production of goods and allow that producer to appropriate the brand name of the
senior registrant on goods other than those stated in the certificate of registration."
The Supreme Court further emphasized the restrictive meaning of Section 20 when it
stated, through Justice Conrado V. Sanchez, that:

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.
While we do not discount the striking similarity between Pearl and Deans registered
trademark and defendants-appellants "Poster Ads" design, as well as the parallel use
by which said words were used in the parties respective advertising copies, we cannot
find defendants-appellants liable for infringement of trademark. "Poster Ads" was
registered by Pearl and Dean for specific use in its stationeries, in contrast to
defendants-appellants who used the same words in their advertising display units. Why
Pearl and Dean limited the use of its trademark to stationeries is simply beyond us.
But, having already done so, it must stand by the consequence of the registration
which it had caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words "Poster
Ads" are a simple contraction of the generic term poster advertising. In the absence of
any convincing proof that "Poster Ads" has acquired a secondary meaning in this
jurisdiction, we find that Pearl and Deans exclusive right to the use of "Poster Ads" is
limited to what is written in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark
"Poster Ads".
There being no finding of either copyright or trademark infringement on the part of
SMI and NEMI, the monetary award granted by the lower court to Pearl and Dean has
no leg to stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE,
and another is rendered DISMISSING the complaint and counterclaims in the aboveentitled case for lack of merit.5
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning
the following errors for the Courts consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND
NEMI;

IPL| August 31| 15

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
INFRINGEMENT OF PEARL & DEANS TRADEMARK "POSTER ADS" WAS
COMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD
OF THE TRIAL COURT, DESPITE THE LATTERS FINDING, NOT DISPUTED BY
THE HONORABLE COURT OF APPEALS, THAT SM WAS GUILTY OF BAD FAITH
IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL
& EXEMPLARY DAMAGES, ATTORNEYS FEES AND COSTS OF SUIT.6

First, petitioners application for a copyright certificate as well as Copyright

Certificate No. PD-R2588 issued by the National Library on January 20, 1981 clearly
stated that it was for a class "O" work under Section 2 (O) of PD 49 (The Intellectual
Property Decree) which was the statute then prevailing. Said Section 2 expressly
enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist
with respect to any of the following works:
xxx

xxx

xxx

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

ISSUES

xxx

In resolving this very interesting case, we are challenged once again to put into proper
perspective four main concerns of intellectual property law patents, copyrights,
trademarks and unfair competition arising from infringement of any of the first three.
We shall focus then on the following issues:

Although petitioners copyright certificate was entitled "Advertising Display Units"

(which depicted the box-type electrical devices), its claim of copyright infringement
cannot be sustained.

(1) if the engineering or technical drawings of an advertising display unit (light

box) are granted copyright protection (copyright certificate of registration) by
the National Library, is the light box depicted in such engineering drawings
ipso facto also protected by such copyright?

Copyright, in the strict sense of the term, is purely a statutory right. Being a mere
statutory grant, the rights are limited to what the statute confers. It may be obtained
and enjoyed only with respect to the subjects and by the persons, and on terms and
conditions specified in the statute. 7 Accordingly, it can cover only the works falling
within the statutory enumeration or description.8

(2) or should the light box be registered separately and protected by a patent
issued by the Bureau of Patents Trademarks and Technology Transfer (now
Intellectual Property Office) in addition to the copyright of the engineering
drawings?
(3) can the owner of a registered trademark legally prevent others from using
such trademark if it is a mere abbreviation of a term descriptive of his goods,
services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes
when SMI had the units manufactured by Metro and EYD Rainbow Advertising for its
own account. Obviously, petitioners position was premised on its belief that its
copyright over the engineering drawings extended ipso facto to the light boxes
depicted or illustrated in said drawings. In ruling that there was no copyright
infringement, the Court of Appeals held that the copyright was limited to the drawings
alone and not to the light box itself. We agree with the appellate court.

xxx

xxx

P & D secured its copyright under the classification class "O" work. This being so,
petitioners copyright protection extended only to the technical drawings and not to the
light box itself because the latter was not at all in the category of "prints, pictorial
illustrations, advertising copies, labels, tags and box wraps." Stated otherwise, even as
we find that P & D indeed owned a valid copyright, the same could have referred only
to the technical drawings within the category of "pictorial illustrations." It could not
have possibly stretched out to include the underlying light box. The strict
application9 of the laws enumeration in Section 2 prevents us from giving petitioner
even a little leeway, that is, even if its copyright certificate was entitled "Advertising
Display Units." What the law does not include, it excludes, and for the good reason:
the light box was not a literary or artistic piece which could be copyrighted under the
copyright law. And no less clearly, neither could the lack of statutory authority to make
the light box copyrightable be remedied by the simplistic act of entitling the copyright
certificate issued by the National Library as "Advertising Display Units."
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public
without license from P & D, then no doubt they would have been guilty of copyright
infringement. But this was not the case. SMIs and NEMIs acts complained of by P & D
were to have units similar or identical to the light box illustrated in the technical

IPL| August 31| 16

drawings manufactured by Metro and EYD Rainbow Advertising, for leasing out to
different advertisers. Was this an infringement of petitioners copyright over the
technical drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither
a literary not an artistic work but an "engineering or marketing invention." 10 Obviously,
there appeared to be some confusion regarding what ought or ought not to be the
proper subjects of copyrights, patents and trademarks. In the leading case of Kho vs.
Court of Appeals,11 we ruled that these three legal rights are completely distinct and
separate from one another, and the protection afforded by one cannot be used
interchangeably to cover items or works that exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that cannot
be interchanged with one another. A trademark is any visible sign capable of
distinguishing the goods (trademark) or services (service mark) of an enterprise and
shall include a stamped or marked container of goods. In relation thereto, a trade
name means the name or designation identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic works which are
original intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other hand, refer to any
technical solution of a problem in any field of human activity which is new, involves an
inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of
the light boxes without license from petitioner, private respondents cannot be held
legally liable for infringement of P & Ds copyright over itstechnical drawings of the said
light boxes, should they be liable instead for infringement of patent? We do not think
so either.
For some reason or another, petitioner never secured a patent for the light boxes. It
therefore acquired no patent rights which could have protected its invention, if in fact it
really was. And because it had no patent, petitioner could not legally prevent anyone
from manufacturing or commercially using the contraption. In Creser Precision
Systems, Inc. vs. Court of Appeals,12 we held that "there can be no infringement of a
patent until a patent has been issued, since whatever right one has to the invention
covered by the patent arises alone from the grant of patent. x x x (A)n inventor has no
common law right to a monopoly of his invention. He has the right to make use of and
vend his invention, but if he voluntarily discloses it, such as by offering it for sale, the
world is free to copy and use it with impunity. A patent, however, gives the inventor
the right to exclude all others. As a patentee, he has the exclusive right of making,
selling or using the invention.13 On the assumption that petitioners advertising units
were patentable inventions, petitioner revealed them fully to the public by submitting
the engineering drawings thereof to the National Library.

To be able to effectively and legally preclude others from copying and profiting from
the invention, a patent is a primordial requirement. No patent, no protection. The
ultimate goal of a patent system is to bring new designs and technologies into the
public domain through disclosure. 14 Ideas, once disclosed to the public without the
protection of a valid patent, are subject to appropriation without significant restraint. 15
On one side of the coin is the public which will benefit from new ideas; on the other are
the inventors who must be protected. As held in Bauer & Cie vs. ODonnel,16 "The act
secured to the inventor the exclusive right to make use, and vend the thing patented,
and consequently to prevent others from exercising like privileges without the consent
of the patentee. It was passed for the purpose of encouraging useful invention and
promoting new and useful inventions by the protection and stimulation given to
inventive genius, and was intended to secure to the public, after the lapse of the
exclusive privileges granted the benefit of such inventions and improvements."
The law attempts to strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the
creation and disclosure of new useful and non-obvious advances in technology and
design, in return for the exclusive right to practice the invention for a number of years.
The inventor may keep his invention secret and reap its fruits indefinitely. In
consideration of its disclosure and the consequent benefit to the community, the patent
is granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the
expiration of that period, the knowledge of the invention inures to the people, who are
thus enabled to practice it and profit by its use." 17
The patent law has a three-fold purpose: "first, patent law seeks to foster and reward
invention; second, it promotes disclosures of inventions to stimulate further innovation
and to permit the public to practice the invention once the patent expires; third, the
stringent requirements for patent protection seek to ensure that ideas in the public
domain remain there for the free use of the public." 18
It is only after an exhaustive examination by the patent office that a patent is issued.
Such an in-depth investigation is required because "in rewarding a useful invention, the
rights and welfare of the community must be fairly dealt with and effectively guarded.
To that end, the prerequisites to obtaining a patent are strictly observed and when a
patent is issued, the limitations on its exercise are equally strictly enforced. To begin
with, a genuine invention or discovery must be demonstrated lest in the constant
demand for new appliances, the heavy hand of tribute be laid on each slight
technological advance in art."19
There is no such scrutiny in the case of copyrights nor any notice published before its
grant to the effect that a person is claiming the creation of a work. The law confers the
copyright from the moment of creation 20 and the copyright certificate is issued upon
registration with the National Library of a sworn ex-parte claim of creation.

IPL| August 31| 17

Therefore, not having gone through the arduous examination for patents, the
petitioner cannot exclude others from the manufacture, sale or commercial use of the
light boxes on the sole basis of its copyright certificate over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the
patent office (IPO) to scrutinize the light boxs eligibility as a patentable invention. The
irony here is that, had petitioner secured a patent instead, its exclusivity would have
been for 17 years only. But through the simplified procedure of copyright-registration
with the National Library without undergoing the rigor of defending the patentability
of its invention before the IPO and the public the petitioner would be protected for
50 years. This situation could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden 21, the United States Supreme Court held
that only the expression of an idea is protected by copyright, not the idea itself. In that
case, the plaintiff held the copyright of a book which expounded on a new accounting
system he had developed. The publication illustrated blank forms of ledgers utilized in
such a system. The defendant reproduced forms similar to those illustrated in the
plaintiffs copyrighted book. The US Supreme Court ruled that:
"There is no doubt that a work on the subject of book-keeping, though only
explanatory of well known systems, may be the subject of a copyright; but, then, it is
claimed only as a book. x x x. But there is a clear distinction between the books, as
such, and the art, which it is, intended to illustrate. The mere statement of the
proposition is so evident that it requires hardly any argument to support it. The same
distinction may be predicated of every other art as well as that of bookkeeping. A
treatise on the composition and use of medicines, be they old or new; on the
construction and use of ploughs or watches or churns; or on the mixture and
application of colors for painting or dyeing; or on the mode of drawing lines to produce
the effect of perspective, would be the subject of copyright; but no one would contend
that the copyright of the treatise would give the exclusive right to the art or
manufacture described therein. The copyright of the book, if not pirated from other
works, would be valid without regard to the novelty or want of novelty of its subject
matter. The novelty of the art or thing described or explained has nothing to do with
the validity of the copyright. To give to the author of the book an exclusive
property in the art described therein, when no examination of its novelty has
ever been officially made, would be asurprise and a fraud upon the public.
That is the province of letters patent, not of copyright. The claim to an
invention of discovery of an art or manufacture must be subjected to the
examination of the Patent Office before an exclusive right therein can be
obtained; and a patent from the government can only secure it.
The difference between the two things, letters patent and copyright, may be illustrated
by reference to the subjects just enumerated. Take the case of medicines. Certain
mixtures are found to be of great value in the healing art. If the discoverer writes
and publishes a book on the subject (as regular physicians generally do), he

gains no exclusive right to the manufacture and sale of the medicine; he gives
that to the public. If he desires to acquire such exclusive right, he must obtain
a patent for the mixture as a new art, manufacture or composition of matter.
He may copyright his book, if he pleases; but that only secures to him the
exclusive right of printing and publishing his book. So of all other inventions
or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations
it may contain, gives no exclusive right to the modes of drawing described, though
they may never have been known or used before. By publishing the book without
getting a patent for the art, the latter is given to the public.
xxx
Now, whilst no one has a right to print or publish his book, or any material part
thereof, as a book intended to convey instruction in the art, any person may practice
and use the art itself which he has described and illustrated therein. The use of the
art is a totally different thing from a publication of the book explaining it. The
copyright of a book on bookkeeping cannot secure the exclusive right to make, sell and
use account books prepared upon the plan set forth in such book. Whether the art
might or might not have been patented, is a question, which is not before us. It was
not patented, and is open and free to the use of the public. And, of course, in using the
art, the ruled lines and headings of accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a
confusion of ideas produced by the peculiar nature of the art described in the books,
which have been made the subject of copyright. In describing the art, the illustrations
and diagrams employed happened to correspond more closely than usual with the
actual work performed by the operator who uses the art. x x x The description of the
art in a book, though entitled to the benefit of copyright, lays no foundation
for an exclusive claim to the art itself. The object of the one is explanation;
the object of the other is use. The former may be secured by copyright. The
latter can only be secured, if it can be secured at all, by letters
patent." (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which petitioners
president said was a contraction of "poster advertising." P & D was able to secure a
trademark certificate for it, but one where the goods specified were "stationeries such
as letterheads, envelopes, calling cards and newsletters." 22 Petitioner admitted it did
not commercially engage in or market these goods. On the contrary, it dealt in
electrically operated backlit advertising units and the sale of advertising spaces
thereon, which, however, were not at all specified in the trademark certificate.

IPL| August 31| 18

Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs.
Intermediate Appellate Court,23where we, invoking Section 20 of the old Trademark
Law, ruled that "the certificate of registration issued by the Director of Patents can
confer (upon petitioner) the exclusive right to use its own symbol only to those goods
specified in the certificate, subject to any conditions and limitations specified in the
certificate x x x. One who has adopted and used a trademark on his goods does not
prevent the adoption and use of the same trademark by others for products which are
of a different description."24 Faberge, Inc. was correct and was in fact recently
reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.25

descriptive) might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of the
purchasing public, the word or phrase has come to mean that the article was his
property.29 The admission by petitioners own expert witness that he himself could not
associate "Poster Ads" with petitioner P & D because it was "too generic" definitely
precluded the application of this exception.

Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure
of P & D to secure a trademark registration for specific use on the light boxes meant
that there could not have been any trademark infringement since registration was an
essential element thereof.1wphi1

All told, the Court finds no reversible error committed by the Court of Appeals when it
reversed the Regional Trial Court of Makati City.

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a situation which
was possible even if P & D had no registration. 26 However, while the petitioners
complaint in the RTC also cited unfair competition, the trial court did not find private
respondents liable therefor. Petitioner did not appeal this particular point; hence, it
cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents
guilty of unfair competition.
By the nature of things, there can be no unfair competition under the law on copyrights
although it is applicable to disputes over the use of trademarks. Even a name or
phrase incapable of appropriation as a trademark or tradename may, by long and
exclusive use by a business (such that the name or phrase becomes associated with
the business or product in the mind of the purchasing public), be entitled to protection
against unfair competition.27 In this case, there was no evidence that P & Ds use of
"Poster Ads" was distinctive or well-known. As noted by the Court of Appeals,
petitioners expert witnesses himself had testified that " Poster Ads was too generic a
name. So it was difficult to identify it with any company, honestly speaking." 28 This
crucial admission by its own expert witness that "Poster Ads" could not be associated
with P & D showed that, in the mind of the public, the goods and services carrying the
trademark "Poster Ads" could not be distinguished from the goods and services of
other entities.
This fact also prevented the application of the doctrine of secondary meaning. "Poster
Ads" was generic and incapable of being used as a trademark because it was used in
the field of poster advertising, the very business engaged in by petitioner. "Secondary
meaning" means that a word or phrase originally incapable of exclusive appropriation
with reference to an article in the market (because it is geographically or otherwise

Having discussed the most important and critical issues, we see no need to belabor the
rest.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals
dated May 22, 2001 is AFFIRMED in toto.
SO ORDERED.

IPL| August 31| 19

G.R. No. 112012

April 4, 2001

SOCIETE DES PRODUITS NESTLE, S.A. and NESTLE

INC., petitioners,
vs.
COURT OF APPEALS and CFC CORPORATION., respondents.

PHILIPPINES,

YNARES-SANTIAGO, J.:
This is a petition for review assailing the Decision of the Court of Appeals in CA-G.R. SP
No. 24101,1 reversing and setting aside the decision of the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT), 2 which denied private respondents
application for registration of the trade-mark, FLAVOR MASTER.
On January 18, 1984, private respondent CFC Corporation filed with the BPTTT an
application for the registration of the trademark "FLAVOR MASTER" for instant coffee,
under Serial No. 52994. The application, as a matter of due course, was published in
the July 18, 1988 issue of the BPTTTs Official Gazette.
Petitioner Societe Des Produits Nestle, S.A., a Swiss company registered under Swiss
laws and domiciled in Switzerland, filed an unverified Notice of Opposition, 3 claiming
that the trademark of private respondents product is "confusingly similar to its
trademarks for coffee and coffee extracts, to wit: MASTER ROAST and MASTER
BLEND."
Likewise, a verified Notice of Opposition was filed by Nestle Philippines, Inc., a
Philippine corporation and a licensee of Societe Des Produits Nestle S.A., against CFCs
application for registration of the trademark FLAVOR MASTER. 4 Nestle claimed that the
use, if any, by CFC of the trademark FLAVOR MASTER and its registration would likely

IPL| August 31| 20

cause confusion in the trade; or deceive purchasers and would falsely suggest to the
purchasing public a connection in the business of Nestle, as the dominant word present
in the three (3) trademarks is "MASTER"; or that the goods of CFC might be mistaken
as having originated from the latter.
In answer to the two oppositions, CFC argued that its trademark, FLAVOR MASTER, is
not confusingly similar with the formers trademarks, MASTER ROAST and MASTER
BLEND, alleging that, "except for the word MASTER (which cannot be exclusively
appropriated by any person for being a descriptive or generic name), the other words
that are used respectively with said word in the three trademarks are very different
from each other in meaning, spelling, pronunciation, and sound". CFC further argued
that its trademark, FLAVOR MASTER, "is clearly very different from any of Nestles
alleged trademarks MASTER ROAST and MASTER BLEND, especially when the marks
are viewed in their entirety, by considering their pictorial representations, color
schemes and the letters of their respective labels."
In its Decision No. 90-47 dated December 27, 1990, the BPTTT denied CFCs
application for registration.5 CFC elevated the matter to the Court of Appeals, where it
was docketed as CA-G.R. SP No. 24101.
The Court of Appeals defined the issue thus: "Does appellant CFCs trade dress bear a
striking resemblance with appellees trademarks as to create in the purchasing publics
mind the mistaken impression that both coffee products come from one and the same
source?"
As stated above, the Court of Appeals, in the assailed decision dated September 23,
1993, reversed Decision No. 90-47 of the BPTTT and ordered the Director of Patents to
approve CFCs application. The Court of Appeals ruled:
Were We to take even a lackadaisical glance at the overall appearance of the
contending marks, the physical discrepancies between appellant CFCs and
appellees respective logos are so ostensible that the casual purchaser cannot
likely mistake one for the other. Appellant CFCs label (Exhibit "4") is
predominantly a blend of dark and lighter shade of orange where the words
"FLAVOR MASTER", "FLAVOR" appearing on top of "MASTER", shaded in
mocha with thin white inner and outer sidings per letter and identically
lettered except for the slightly protruding bottom curve of the letter "S"
adjoining the bottom tip of the letter "A" in the word "MASTER", are printed
across the top of a simmering red coffee cup. Underneath "FLAVOR MASTER"
appears "Premium Instant Coffee" printed in white, slim and slanted letters.
Appellees "MASTER ROAST" label (Exhibit "7"), however, is almost double the
width of appellant CFCs. At the top is printed in brown color the word
"NESCAFE" against a white backdrop. Occupying the center is a squareshaped configuration shaded with dark brown and picturing a heap of coffee
beans, where the word "MASTER" is inscribed in the middle. "MASTER" in

appellees label is printed in taller capital letters, with the letter "M" further
capitalized. The letters are shaded with red and bounded with thin goldcolored inner and outer sidings. Just above the word "MASTER" is a red
window like portrait of what appears to be a coffee shrub clad in gold. Below
the "MASTER" appears the word "ROAST" impressed in smaller, white print.
And further below are the inscriptions in white: "A selection of prime Arabica
and Robusta coffee." With regard to appellees "MASTER BLEND" label (Exhibit
"6") of which only a xeroxed copy is submitted, the letters are bolder and
taller as compared to appellant CFCs and the word "MASTER" appears on top
of the word "BLEND" and below it are the words "100% pure instant coffee"
printed in small letters.
From the foregoing description, while the contending marks depict the same
product, the glaring dissimilarities in their presentation far outweigh and
dispel any aspect of similitude. To borrow the words of the Supreme Court in
American Cyanamid Co. v. Director of Patents (76 SCRA 568), appellant CFCs
and appellees labels are entirely different in size, background, colors,
contents and pictorial arrangement; in short, the general appearances of the
labels bearing the respective trademarks are so distinct from each other that
appellees cannot assert that the dominant features, if any, of its trademarks
were used or appropriated in appellant CFCs own. The distinctions are so
well-defined so as to foreclose any probability or likelihood of confusion or
deception on the part of the normally intelligent buyer when he or she
encounters both coffee products at the grocery shelf. The answer therefore to
the query is a clear-cut NO.6
Petitioners are now before this Court on the following assignment of errors:
1. RESPONDENT COURT GRAVELY ERRED IN REVERSING AND SETTING ASIDE
THE DECISION (NO. 90-47) OF THE DIRECTOR OF THE BUREAU OF PATENTS,
TRADEMARKS AND TECHNOLOGY TRANSFER (BPTTT) DATED DECEMBER 27,
1990.
2. RESPONDENT COURT ERRED IN FINDING THAT APPELLANT CFCS TRADE
DRESS IS BEYOND THE SCOPE OF THE PROSCRIPTION LAID DOWN BY
JURISPRUDENCE AND THE TRADEMARK LAW.
3. RESPONDENT COURT ERRED IN HOLDING THAT THE TOTALITY RULE,
RATHER THAN THE TEST OF DOMINANCY, APPLIES TO THE CASE.
4. RESPONDENT COURT ERRED IN INVOKING THE TOTALITY RULE APPLIED IN
THE CASES OF BRISTOL MYERS V. DIRECTOR OF PATENTS, ET AL. (17 SCRA
128), MEAD JOHNSON & CO. V. NVJ VAN DORF LTD., (7 SCRA 768) AND
AMERICAN CYANAMID CO. V. DIRECTOR OF PATENTS (76 SCRA 568).

IPL| August 31| 21

The petition is impressed with merit.
A trademark has been generally defined as "any word, name, symbol or device
adopted and used by a manufacturer or merchant to identify his goods and distinguish
them from those manufactured and sold by others."7
A manufacturers trademark is entitled to protection. As Mr. Justice Frankfurter
observed in the case ofMishawaka Mfg. Co. v. Kresge Co.:8
The protection of trade-marks is the laws recognition of the psychological
function of symbols. If it is true that we live by symbols, it is no less true that
we purchase goods by them. A trade-mark is a merchandising short-cut which
induces a purchaser to select what he wants, or what he has been led to
believe he wants. The owner of a mark exploits this human propensity by
making every effort to impregnate the atmosphere of the market with the
drawing power of a congenial symbol. Whatever the means employed, the aim
is the same --- to convey through the mark, in the minds of potential
customers, the desirability of the commodity upon which it appears. Once this
is attained, the trade-mark owner has something of value. If another poaches
upon the commercial magnetism of the symbol he has created, the owner can
obtain legal redress.

The law prescribes a more stringent standard in that there should not only be
confusing similarity but that it should not likely cause confusion or mistake or deceive
purchasers.
Hence, the question in this case is whether there is a likelihood that the trademark
FLAVOR MASTER may cause confusion or mistake or may deceive purchasers that said
product is the same or is manufactured by the same company. In other words, the
issue is whether the trademark FLAVOR MASTER is a colorable imitation of the
trademarks MASTER ROAST and MASTER BLEND.
Colorable imitation denotes such a close or ingenious imitation as to be calculated to
deceive ordinary persons, or such a resemblance to the original as to deceive an
ordinary purchaser giving such attention as a purchaser usually gives, as to cause him
to purchase the one supposing it to be the other.9 In determining if colorable imitation
exists, jurisprudence has developed two kinds of tests - the Dominancy Test and the
Holistic Test.10 The test of dominancy focuses on the similarity of the prevalent features
of the competing trademarks which might cause confusion or deception and thus
constitute infringement. 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.11
In the case at bar, the Court of Appeals held that:

Section 4 (d) of Republic Act No. 166 or the Trademark Law, as amended, which was in
force at the time, provides thus:
Registration of trade-marks, trade-names and service-marks on the principal
register. - There is hereby established a register of trade-marks, trade-names
and service marks which shall be known as the principal register. The owner of
a 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

(d) Consists of or comprises a mark or trade-name which so resembles a

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

xxx

(Emphasis supplied)

xxx

The determination of whether two trademarks are indeed confusingly similar

must be taken from the viewpoint of the ordinary purchasers who are, in
general, undiscerningly rash in buying the more common and less expensive
household products like coffee, and are therefore less inclined to closely
examine specific details of similarities and dissimilarities between competing
products. The Supreme Court in Del Monte Corporation v. CA, 181 SCRA 410,
held that:
"The question is not whether the two articles are distinguishable by
their labels when set side by side but whether the general confusion
made by the article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely result in his
confounding it with the original. As observed in several cases, the
general impression of the ordinary purchaser, buying under the
normally prevalent conditions in trade and giving the attention such
purchasers usually give in buying that class of goods, is the
touchstone."
From this perspective, the test of similarity is to consider the two marks in
their entirety, as they appear in the respective labels, in relation to the goods
to which they are attached (Bristol Myers Company v. Director of Patents, et
al., 17 SCRA 128, citing Mead Johnson & Co. v. NVJ Van Dorp, Ltd., et al., 7

IPL| August 31| 22

SCRA 768). The mark must be considered 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 (Del Monte Corp. v. CA, supra), as what appellees would want
it to be when they essentially argue that much of the confusion springs from
appellant CFCs use of the word "MASTER" which appellees claim to be the
dominant feature of their own trademarks that captivates the prospective
consumers. Be it further emphasized that 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 (Mead Johnson & Co. v. NVJ Van Dorp,
Ltd., supra).12
The Court of Appeals applied some judicial precedents which are not on all fours with
this case. It must be emphasized that in infringement or 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. 13 In Esso Standard, Inc. v. Court of Appeals,14 we ruled that
the likelihood of confusion is a relative concept; to be determined only according to the
particular, and sometimes peculiar, circumstances of each case. In trademark cases,
even more than in any other litigation, precedent must be studied in light of the facts
of the particular case. The wisdom of the likelihood of confusion test lies in its
recognition that each trademark infringement case presents its own unique set of facts.
Indeed, the complexities attendant to an accurate assessment of likelihood of
confusion require that the entire panoply of elements constituting the relevant factual
landscape be comprehensively examined.15
The Court of Appeals application of the case of Del Monte Corporation v. Court of
Appeals16 is, therefore, misplaced. In Del Monte, the issue was about the alleged
similarity of Del Montes logo with that of Sunshine Sauce Manufacturing Industries.
Both corporations market the catsup product which is an inexpensive and common
household item.
Since Del Monte alleged that Sunshines logo was confusingly similar to or was a
colorable imitation of the formers logo, there was a need to go into the details of the
two logos as well as the shapes of the labels or marks, the brands printed on the
labels, the words or lettering on the labels or marks and the shapes and colors of the
labels or marks. The same criteria, however, cannot be applied in the instant petition
as the facts and circumstances herein are peculiarly different from those in the Del
Monte case.
In the same manner, the Court of Appeals erred in applying the totality rule as defined
in the cases of Bristol Myers v. Director of Patents;17 Mead Johnson & Co. v. NVJ Van
Dorf Ltd.;18 and American Cyanamid Co. v. Director of Patents.19 The totality rule states
that "the test is not simply to take their words and compare the spelling and
pronunciation of said words. In determining whether two trademarks are confusingly

similar, the two marks in their entirety as they appear in the respective labels must 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 on both labels."20
As this Court has often declared, each case must be studied according to the peculiar
circumstances of each case. That is the reason why in trademark cases, jurisprudential
precedents should be applied only to a case if they are specifically in point.
In the above cases cited by the Court of Appeals to justify the application of the totality
or holistic test to this instant case, the factual circumstances are substantially different.
In the Bristol Myers case, this Court held that although both BIOFERIN and BUFFERIN
are primarily used for the relief of pains such as headaches and colds, and their names
are practically the same in spelling and pronunciation, both labels have strikingly
different backgrounds and surroundings. In addition, one is dispensable only upon
doctors prescription, while the other may be purchased over-the-counter.
In the Mead Johnson case, the differences between ALACTA and ALASKA are glaring
and striking to the eye. Also, ALACTA refers to "Pharmaceutical Preparations which
Supply Nutritional Needs," falling under Class 6 of the official classification of Medicines
and Pharmaceutical Preparations to be used as prescribed by physicians. On the other
hand, ALASKA refers to "Foods and Ingredients of Foods" falling under Class 47, and
does not require medical prescription.
In the American Cyanamid case, the word SULMET is distinguishable from the word
SULMETINE, as the former is derived from a combination of the syllables "SUL" which
is derived from sulfa and "MET" from methyl, both of which are chemical compounds
present in the article manufactured by the contending parties. This Court held that the
addition of the syllable "INE" in respondents label is sufficient to distinguish
respondents product or trademark from that of petitioner. Also, both products are for
medicinal veterinary use and the buyer will be more wary of the nature of the product
he is buying. In any case, both products are not identical as SULMETs label indicates
that it is used in a drinking water solution while that of SULMETINE indicates that they
are tablets.
It cannot also be said that the products in the above cases can be bought off the shelf
except, perhaps, for ALASKA. The said products are not the usual "common and
inexpensive" household items which an "undiscerningly rash" buyer would unthinkingly
buy.In the case at bar, other than the fact that both Nestles and CFCs products are
inexpensive and common household items, the similarity ends there. What is being
questioned here is the use by CFC of the trademark MASTER. In view of the difficulty of
applying jurisprudential precedents to trademark cases due to the peculiarity of each
case, judicial fora should not readily apply a certain test or standard just because of
seeming similarities. As this Court has pointed above, there could be more telling
differences than similarities as to make a jurisprudential precedent inapplicable.

IPL| August 31| 23

Nestle points out that the dominancy test should have been applied to determine
whether there is a confusing similarity between CFCs FLAVOR MASTER and Nestles
MASTER ROAST and MASTER BLEND.

While this Court agrees with the Court of Appeals detailed enumeration of differences
between the respective trademarks of the two coffee products, this Court cannot agree
that totality test is the one applicable in this case. Rather, this Court believes that the
dominancy test is more suitable to this case in light of its peculiar factual milieu.

We agree.
As the Court of Appeals itself has stated, "[t]he determination of whether two
trademarks are indeed confusingly similar must be taken from the viewpoint of the
ordinary purchasers who are, in general, undiscerningly rash in buying the more
common and less expensive household products like coffee, and are therefore less
inclined to closely examine specific details of similarities and dissimilarities between
competing products."21
The basis for the Court of Appeals application of the totality or holistic test is the
"ordinary purchaser" buying the product under "normally prevalent conditions in trade"
and the attention such products normally elicit from said ordinary purchaser. An
ordinary purchaser or buyer does not usually make such scrutiny nor does he usually
have the time to do so. The average shopper is usually in a hurry and does not inspect
every product on the shelf as if he were browsing in a library.22
The Court of Appeals held that the test to be applied should be the totality or holistic
test reasoning, since what is of paramount consideration is the ordinary purchaser who
is, in general, undiscerningly rash in buying the more common and less expensive
household products like coffee, and is therefore less inclined to closely examine specific
details of similarities and dissimilarities between competing products.
This Court cannot agree with the above reasoning. If the ordinary purchaser is
"undiscerningly rash" in buying such common and inexpensive household products as
instant coffee, and would therefore be "less inclined to closely examine specific details
of similarities and dissimilarities" between the two competing products, then it would
be less likely for the ordinary purchaser to notice that CFCs trademark FLAVOR
MASTER carries the colors orange and mocha while that of Nestles uses red and
brown. The application of the totality or holistic test is improper since the ordinary
purchaser would not be inclined to notice the specific features, similarities or
dissimilarities, considering that the product is an inexpensive and common household
item.
It must be emphasized that the products bearing the trademarks in question are
"inexpensive and common" household items bought off the shelf by "undiscerningly
rash" purchasers. As such, if the ordinary purchaser is "undiscerningly rash", then he
would not have the time nor the inclination to make a keen and perceptive examination
of the physical discrepancies in the trademarks of the products in order to exercise his
choice.

Moreover, the totality or holistic test is contrary to the elementary postulate of the law
on trademarks and unfair competition that confusing similarity is to be determined on
the basis of visual, aural, connotative comparisons and overall impressions engendered
by the marks in controversy as they are encountered in the realities of the
marketplace.23 The totality or holistic test only relies on visual comparison between two
trademarks whereas the dominancy test relies not only on the visual but also on the
aural and connotative comparisons and overall impressions between the two
trademarks.
For this reason, this Court agrees with the BPTTT when it applied the test of dominancy
and held that:
From the evidence at hand, it is sufficiently established that the word MASTER
is the dominant feature of opposers mark. The word MASTER is printed across
the middle portion of the label in bold letters almost twice the size of the
printed word ROAST. Further, the word MASTER has always been given
emphasis in the TV and radio commercials and other advertisements made in
promoting the product. This can be gleaned from the fact that Robert Jaworski
and Atty. Ric Puno Jr.., the personalities engaged to promote the product, are
given the titles Master of the Game and Master of the Talk Show, respectively.
In due time, because of these advertising schemes the mind of the buying
public had come to learn to associate the word MASTER with the opposers
goods.
x x x. It is the observation of this Office that much of the dominance which
the word MASTER has acquired through Opposers advertising schemes is
carried over when the same is incorporated into respondent-applicants
trademark FLAVOR MASTER. Thus, when one looks at the label bearing the
trademark FLAVOR MASTER (Exh. 4) ones attention is easily attracted to the
word MASTER, rather than to the dissimilarities that exist. Therefore, the
possibility of confusion as to the goods which bear the competing marks or as
to the origins thereof is not farfetched. x x x.24
In addition, the word "MASTER" is neither a generic nor a descriptive term. As such,
said term can not be invalidated as a trademark and, therefore, may be legally
protected. Generic terms25 are those which constitute "the common descriptive name
of an article or substance," or comprise the "genus of which the particular product is a
species," or are "commonly used as the name or description of a kind of goods," or
"imply reference to every member of a genus and the exclusion of individuating
characters," or "refer to the basic nature of the wares or services provided rather than

IPL| August 31| 24

to the more idiosyncratic characteristics of a particular product," and are not legally
protectable. On the other hand, a term is descriptive 26 and therefore invalid as a
trademark if, as understood in its normal and natural sense, it "forthwith conveys the
characteristics, functions, qualities or ingredients of a product to one who has never
seen it and does not know what it is," or "if it forthwith conveys an immediate idea of
the ingredients, qualities or characteristics of the goods," or if it clearly denotes what
goods or services are provided in such a way that the consumer does not have to
exercise powers of perception or imagination.
Rather, the term "MASTER" is a suggestive term brought about by the advertising
scheme of Nestle. Suggestive terms27 are those which, in the phraseology of one court,
require "imagination, thought and perception to reach a conclusion as to the nature of
the goods." Such terms, "which subtly connote something about the product," are
eligible for protection in the absence of secondary meaning. While suggestive marks
are capable of shedding "some light" upon certain characteristics of the goods or
services in dispute, they nevertheless involve "an element of incongruity,"
"figurativeness," or " imaginative effort on the part of the observer."

The term "MASTER", therefore, has acquired a certain connotation to mean the coffee
products MASTER ROAST and MASTER BLEND produced by Nestle. As such, the use by
CFC of the term "MASTER" in the trademark for its coffee product FLAVOR MASTER is
likely to cause confusion or mistake or even to deceive the ordinary purchasers.
In closing, it may not be amiss to quote the case of American Chicle Co. v. Topps
Chewing Gum, Inc.,30 to wit:
Why it should have chosen a mark that had long been employed by [plaintiff]
and had become known to the trade instead of adopting some other means of
identifying its goods is hard to see unless there was a deliberate purpose to
obtain some advantage from the trade that [plaintiff] had built up. Indeed, it
is generally true that, as soon as we see that a second comer in a market has,
for no reason that he can assign, plagiarized the "make-up" of an earlier
comer, we need no more; . . . [W]e feel bound to compel him to exercise his
ingenuity in quarters further afield.

This is evident from the advertising scheme adopted by Nestle in promoting its coffee
products. In this case, Nestle has, over time, promoted its products as "coffee
perfection worthy of masters like Robert Jaworski and Ric Puno Jr."

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R.
SP No. 24101 is REVERSED and SET ASIDE and the decision of the Bureau of Patents,
Trademarks and Technology Transfer in Inter Partes Cases Nos. 3200 and 3202 is
REINSTATED.

In associating its coffee products with the term "MASTER" and thereby impressing
them with the attributes of said term, Nestle advertised its products thus:

SO ORDERED.

Robert Jaworski. Living Legend. A true hard court hero. Fast on his feet. Sure
in every shot he makes. A master strategist. In one word, unmatched.
MASTER ROAST. Equally unmatched. Rich and deeply satisfying. Made from a
unique combination of the best coffee beans - Arabica for superior taste and
aroma, Robusta for strength and body. A masterpiece only NESCAFE, the
worlds coffee masters, can create.
MASTER ROAST. Coffee perfection worthy of masters like Robert Jaworski. 28
In the art of conversation, Ric Puno Jr. is master. Witty. Well-informed.
Confident.
In the art of coffee-making, nothing equals Master Roast, the coffee
masterpiece from Nescafe, the worlds coffee masters. A unique combination
of the best coffee beans - Arabica for superior taste and aroma, Robusta for
strength and body. Truly distinctive and rich in flavor.
Master Roast. Coffee perfection worthy of masters like Ric Puno Jr.29

IPL| August 31| 25

is the owner by prior adoption and use since 1986 of the internationally famous
"Dockers and Design" trademark. This ownership is evidenced by its valid and existing
registrations in various member countries of the Paris Convention. In the Philippines, it
has a Certificate of Registration No. 46619 in the Principal Register for use of said
trademark on pants, shirts, blouses, skirts, shorts, sweatshirts and jackets under Class
25.9
The "Dockers and Design" trademark was first used in the Philippines in or about May
1988, by LSPI, a domestic corporation engaged in the manufacture, sale and
distribution of various products bearing trademarks owned by LS & Co. To date, LSPI
continues to manufacture and sell Dockers Pants with the "Dockers and Design"
trademark.10

G.R. No. 138900 September 20, 2005

LEVI STRAUSS & CO., & LEVI STRAUSS
vs.
CLINTON APPARELLE, INC., Respondent.

(PHILS.),

INC., Petitioners,

DECISION
Tinga, J.:
Before us is a petition for review on certiorari 1 under Rule 45 of the 1997 Rules of Civil
Procedure filed by Levi Strauss & Co. (LS & Co.) and Levi Strauss (Philippines), Inc.
(LSPI) assailing the Court of Appeals Decision2 andResolution3 respectively dated 21
December 1998 and 10 May 1999. The questioned Decision granted respondents
prayer for a writ of preliminary injunction in its Petition4 and set aside the trial courts
orders dated 15 May 19985 and 4 June 19986 which respectively granted petitioners
prayer for the issuance of a temporary restraining order (TRO) and application for the
issuance of a writ of preliminary injunction.
This case stemmed from the Complaint7 for Trademark Infringement, Injunction and
Damages filed by petitioners LS & Co. and LSPI against respondent Clinton Apparelle,
Inc.* (Clinton Aparelle) together with an alternative defendant, Olympian Garments,
Inc. (Olympian Garments), before the Regional Trial Court of Quezon City, Branch
90.8 The Complaint was docketed as Civil Case No. Q-98-34252, entitled "Levi Strauss
& Co. and Levi Strauss (Phils.), Inc. v. Clinton Aparelle, Inc. and/or Olympian
Garments, Inc."
The Complaint alleged that LS & Co., a foreign corporation duly organized and existing
under the laws of the State of Delaware, U.S.A., and engaged in the apparel business,

LS & Co. and LSPI further alleged that they discovered the presence in the local market
of jeans under the brand name "Paddocks" using a device which is substantially, if not
exactly, similar to the "Dockers and Design" trademark owned by and registered in the
name of LS & Co., without its consent. Based on their information and belief, they
added, Clinton Apparelle manufactured and continues to manufacture such "Paddocks"
jeans and other apparel.
However, since LS & Co. and LSPI are unsure if both, or just one of impleaded
defendants are behind the manufacture and sale of the "Paddocks" jeans complained
of, they brought this suit under Section 13, Rule 3 11 of the 1997 Rules of Civil
Procedure.12
The Complaint contained a prayer that reads as follows:
1. That upon the filing of this complaint, a temporary restraining order be immediately
issued restraining defendants, their officers, employees, agents, representatives,
dealers, retailers or assigns from committing the acts herein complained of, and,
specifically, for the defendants, their officers, employees, agents, representatives,
dealers and retailers or assigns, to cease and desist from manufacturing, distributing,
selling, offering for sale, advertising, or otherwise using denims, jeans or pants with
the design herein complained of as substantially, if not exactly similar, to plaintiffs
"Dockers and Design" trademark.
2. That after notice and hearing, and pending trial on the merits, a writ of preliminary
injunction be issued enjoining defendants, their officers, employees, agents, dealers,
retailers, or assigns from manufacturing, distributing, selling, offering for sale,
advertising, jeans the design herein complained of as substantially, if not exactly
similar, to plaintiffs "Dockers and Design" trademark.
3. That after trial on the merits, judgment be rendered as follows:

IPL| August 31| 26

a. Affirming and making permanent the writ of preliminary injunction;
b. Ordering that all infringing jeans in the possession of either or both defendants as
the evidence may warrant, their officers, employees, agents, retailers, dealers or
assigns, be delivered to the Honorable Court of plaintiffs, and be accordingly
destroyed;13
Acting on the prayer for the issuance of a TRO, the trial court issued an Order14 setting
it for hearing on 5 May 1998. On said date, as respondent failed to appear despite
notice and the other defendant, Olympian Garments, had yet to be notified, the
hearing was re-scheduled on 14 May 1998.15
On 14 May 1998, neither Clinton Apparelle nor Olympian Garments appeared. Clinton
Apparelle claimed that it was not notified of such hearing. Only Olympian Garments
allegedly had been issued with summons. Despite the absence of the defendants, the
hearing on the application for the issuance of a TRO continued.16
The following day, the trial court issued an Order17 granting the TRO applied for, the
pertinent portions of which state:
Considering the absence of counsel/s for the defendant/s during the summary
hearing scheduled on May 5, 1998 and also during the re-scheduled summary hearing
held on May 14, 1998 set for the purpose of determining whether or not a Temporary
Restraining Order shall be issued, this Court allowed the counsel for the plaintiffs to
present on May 14, 1998 their arguments/evidences in support of their application.
After hearing the arguments presented by the counsel for the plaintiffs during the
summary hearing, this Court is of the considered and humble view that grave injustice
and irreparable injury to the plaintiffs would arise before the matter of whether or not
the application for the issuance of a Writ of Preliminary Injunction can be heard, and
that, in the interest of justice, and in the meantime, a Temporary Restraining Order be
issued.
WHEREFORE, let this Temporary Restraining Order be issued restraining the
defendants, their officers, employees, agents, representatives, dealers, retailers or
assigns from committing the acts complained of in the verified Complaint, and
specifically, for the defendants, their officers, employees, agents, representatives,
dealers and retailers or assigns, to cease and desist from manufacturing, distributing,
selling, offering for sale, advertising or otherwise using denims, jeans or pants with the
design complained of in the verified Complaint as substantially, if not exactly similar, to
plaintiffs "Dockers and Design" trademark; until after the application/prayer for the
issuance of a Writ of Preliminary Injunction is heard/resolved, or until further orders
from this Court.

The hearing on the application for the issuance of a Writ of Preliminary Injunction as
embodied in the verified Complaint is set on May 26, 1998 (Tuesday) at 2:00 P.M.
which setting is intransferable in character considering that the lifetime of this
Temporary Restraining Order is twenty (20) days from date hereof.18
On 4 June 1998, the trial court issued another Order19 granting the writ of preliminary
injunction, to wit:
ORDER
This resolves the plaintiffs application or prayer for the issuance of a writ of
preliminary injunction as embodied in the verified complaint in this case.
Parenthetically, this Court earlier issued a temporary restraining order. (seeOrder dated
May 15, 1998; see also Order dated May 26, 1998)
After a careful perusal of the contents of the pleadings and documents on record
insofar as they are pertinent to the issue under consideration, this Court finds that at
this point in time, the plaintiffs appear to be entitled to the relief prayed for and this
Court is of the considered belief and humble view that, without necessarily delving on
the merits, the paramount interest of justice will be better served if
the status quo shall be maintained and that an injunction bond of P2,500,000.00
appears to be in order. (see Sections 3 and 4, Rule 58, 1997 Rules of Civil Procedure)
IN VIEW OF THE FOREGOING, the plaintiffs prayer for the issuance of a writ of
preliminary injunction is GRANTED. Accordingly, upon the plaintiffs filing, within ten
(10) days from their receipt hereof, an injunction bond of P2,500,000.00 executed to
the defendants to the effect that the plaintiffs will pay all damages the defendants may
sustain by reason of this injunction in case the Court should finally decide that the
plaintiffs are not entitled thereto, let a writ of preliminary injunction issue enjoining or
restraining the commission of the acts complained of in the verified Complaint in this
case, and specifically, for the defendants, their officers, employees, agents,
representatives, dealers and retailers or assigns or persons acting in their behalf to
cease and desist from manufacturing, distributing, selling, offering for sale,
advertising, or otherwise using, denims, jeans or pants with the design complained of
in the verified Complaint in this case, which is substantially, if not exactly, similar to
plaintiffs "DOCKERS and DESIGN" trademark or logo as covered by the Bureau of
Patents, Trademarks and Technology Transfer Certificate of Registration No. 46619,
until after this case shall have been decided on the merits and/or until further orders
from this Court.20
The evidence considered by the trial court in granting injunctive relief were as follows:
(1) a certified true copy of the certificate of trademark registration for "Dockers and
Design"; (2) a pair of DOCKERS pants bearing the "Dockers and Design" trademark;
(3) a pair of "Paddocks" pants bearing respondents assailed logo; (4) the Trends MBL
Survey Report purportedly proving that there was confusing similarity between two

IPL| August 31| 27

marks; (5) the affidavit of one Bernabe Alajar which recounted petitioners prior
adoption, use and registration of the "Dockers and Design" trademark; and (6) the
affidavit of one Mercedes Abad of Trends MBL, Inc. which detailed the methodology and
procedure used in their survey and the results thereof.21
Clinton Apparelle thereafter filed a Motion to Dismiss22 and a Motion for
Reconsideration23 of the Order granting the writ of preliminary injunction. Meantime,
the trial court issued an Order24 approving the bond filed by petitioners.
On 22 June 1998, the trial court required 25 the parties to file their "respective citation
of authorities/ jurisprudence/Supreme Court decisions" on whether or not the trial
court may issue the writ of preliminary injunction pending the resolution of the Motion
for Reconsideration and the Motion to Dismiss filed by respondent.
On 2 October 1998, the trial court denied Clinton Apparelles Motion to
Dismiss and Motion for Reconsideration in an Omnibus Order,26 the pertinent portions
of which provide:
After carefully going over the contents of the pleadings in relation to pertinent portions
of the records, this Court is of the considered and humble view that:
On the first motion, the arguments raised in the plaintiffs aforecited Consolidated
Opposition appears to be meritorious. Be that as it may, this Court would like to
emphasize, among other things, that the complaint states a cause of action as
provided under paragraphs 1 to 18 thereof.
On the second motion, the arguments raised in the plaintiffs aforecited Consolidated
Opposition likewise appear to be impressed with merit. Besides, there appears to be no
strong and cogent reason to reconsider and set aside this Courts Order dated June 4,
1998 as it has been shown so far that the trademark or logo of defendants is
substantially, if not exactly, similar to plaintiffs "DOCKERS and DESIGN" trademark or
logo as covered by BPTTT Certificate of Registration No. 46619 even as the BPTTT
Certificate of Registration No. 49579 of Clinton Apparelle, Inc. is only for the mark or
word "PADDOCKS" (see Records, p. 377) In any event, this Court had issued an Order
dated June 18, 1998 for the issuance of the writ of preliminary injunction after the
plaintiffs filed the required bond of P2,500,000.00.
IN VIEW OF THE FOREGOING, the aforecited Motion To Dismiss and Motion For
Reconsideration are both DENIED for lack of merit, and accordingly, this Courts Order
dated June 18, 1998 for the issuance of the writ of preliminary injunction is
REITERATED so the writ of preliminary injunction could be implemented unless the
implementation thereof is restrained by the Honorable Court of Appeals or Supreme
Court.

The writ of preliminary injunction was thereafter issued on 8 October 1998. 27

Thus, Clinton Apparelle filed with the Court of Appeals a Petition28 for certiorari,
prohibition and mandamus with prayer for the issuance of a temporary restraining
order and/or writ of preliminary injunction, assailing the orders of the trial court dated
15 May 1998, 4 June 1998 and 2 October 1998.
On 20 October 1998, the Court of Appeals issued a Resolution29 requiring herein
petitioners to file their comment on the Petition and at the same time issued the
prayed-for temporary restraining order.
The appellate court rendered on 21 December 1998 its now assailed Decision granting
Clinton Apparelles petition. The Court of Appeals held that the trial court did not follow
the procedure required by law for the issuance of a temporary restraining order as
Clinton Apparelle was not duly notified of the date of the summary hearing for its
issuance. Thus, the Court of Appeals ruled that the TRO had been improperly issued. 30
The Court of Appeals also held that the issuance of the writ of preliminary injunction is
questionable. In its opinion, herein petitioners failed to sufficiently establish its
material and substantial right to have the writ issued. Secondly, the Court of Appeals
observed that the survey presented by petitioners to support their contentions was
commissioned by petitioners. The Court of Appeals remarked that affidavits taken exparte are generally considered to be inferior to testimony given in open court. The
appellate court also considered that the injury petitioners have suffered or are
currently suffering may be compensated in terms of monetary consideration, if after
trial, a final judgment shall be rendered in their favor.31
In addition, the Court of Appeals strongly believed that the implementation of the
questioned writ would effectively shut down respondents business, which in its opinion
should not be sanctioned. The Court of Appeals thus set aside the orders of the trial
court dated 15 May 1998 and 4 June 1998, respectively issuing a temporary restraining
order and granting the issuance of a writ of preliminary injunction.
With the denial of their Motion for Reconsideration,32 petitioners are now before this
Court seeking a review of the appellate courts Decision and Resolution. LS & Co. and
LSPI claim that the Court of Appeals committed serious error in: (1) disregarding the
well-defined limits of the writ of certiorari that questions on the sufficiency of evidence
are not to be resolved in such a petition; (2) in holding that there was no confusion
between the two marks; (3) in ruling that the erosion of petitioners trademark is not
protectable by injunction; (4) in ignoring the procedure previously agreed on by the
parties and which was adopted by the trial court; and (5) in declaring that the
preliminary injunction issued by the trial court will lead to the closure of respondents
business.

IPL| August 31| 28

In its Comment,33 Clinton Apparelle maintains that only questions of law may be raised
in an appeal by certiorari under Rule 45 of the Rules of Court. It asserts that the
question of whether the Court of Appeals erred in: (1) disregarding the survey
evidence; (2) ruling that there was no confusion between the two marks; and (c)
finding that the erosion of petitioners trademark may not be protected by injunction,
are issues not within the ambit of a petition for review on certiorari under Rule 45.
Clinton Apparelle also contends that the Court of Appeals acted correctly when it
overturned the writ of preliminary injunction issued by the trial court. It believes that
the issued writ in effect disturbed the status quo and disposed of the main case
without trial.
There is no merit in the petition.
At issue is whether the issuance of the writ of preliminary injunction by the trial court
was proper and whether the Court of Appeals erred in setting aside the orders of the
trial court.
Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an order
granted at any stage of an action prior to the judgment or final order requiring a party
or a court, agency or a person to refrain from a particular act or acts. Injunction is
accepted as the strong arm of equity or a transcendent remedy to be used cautiously
as it affects the respective rights of the parties, and only upon full conviction on the
part of the court of its extreme necessity. An extraordinary remedy, injunction is
designed to preserve or maintain the status quo of things and is generally availed of to
prevent actual or threatened acts until the merits of the case can be heard. 34It may be
resorted to only by a litigant for the preservation or protection of his rights or interests
and for no other purpose during the pendency of the principal action. 35 It is resorted to
only when there is a pressing necessity to avoid injurious consequences, which cannot
be remedied under any standard compensation. The resolution of an application for a
writ of preliminary injunction rests upon the existence of an emergency or of a special
recourse before the main case can be heard in due course of proceedings. 36

(b) That the commission, continuance, or non-performance of the act or acts

complained of during the litigation would probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of the
rights of the applicant respecting the subject of the action or proceeding, and tending
to render the judgment ineffectual.
Under the cited provision, a clear and positive right especially calling for judicial
protection must be shown. Injunction is not a remedy to protect or enforce contingent,
abstract, or future rights; it will not issue to protect a right not in esse and which may
never arise, or to restrain an act which does not give rise to a cause of action. There
must exist an actual right.37 There must be a patent showing by the complaint that
there exists a right to be protected and that the acts against which the writ is to be
directed are violative of said right.38
There are generally two kinds of preliminary injunction: (1) a prohibitory injunction
which commands a party to refrain from doing a particular act; and (2) a mandatory
injunction which commands the performance of some positive act to correct a wrong in
the past.39
The Court of Appeals did not err in reviewing proof adduced by petitioners to support
its application for the issuance of the writ. While the matter of the issuance of a writ of
preliminary injunction is addressed to the sound discretion of the trial court, this
discretion must be exercised based upon the grounds and in the manner provided by
law. The exercise of discretion by the trial court in injunctive matters is generally not
interfered with save in cases of manifest abuse. 40 And to determine whether there was
abuse of discretion, a scrutiny must be made of the bases, if any, considered by the
trial court in granting injunctive relief. Be it stressed that injunction is the strong arm
of equity which must be issued with great caution and deliberation, and only in cases
of great injury where there is no commensurate remedy in damages. 41

Section 3, Rule 58, of the Rules of Court enumerates the grounds for the issuance of a
preliminary injunction:

In the present case, we find that there was scant justification for the issuance of the
writ of preliminary injunction.

SEC. 3. Grounds for issuance of preliminary injunction. A preliminary injunction may

be granted when it is established:

Petitioners anchor their legal right to "Dockers and Design" trademark on the
Certificate of Registration issued in their favor by the Bureau of Patents, Trademarks
and Technology Transfer.* According to Section 138 of Republic Act No. 8293, 42 this
Certificate of Registration is prima facie evidence of the validity of the registration, the
registrants ownership of the mark and of the exclusive right to use the same in
connection with the goods or services and those that are related thereto specified in
the certificate. Section 147.1 of said law likewise grants the owner of the registered
mark the exclusive right to prevent all third parties not having the owners consent
from using in the course of trade identical or similar signs for goods or services which

(a) That the applicant is entitled to the relief demanded, and the whole or part of such
relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;

IPL| August 31| 29

are identical or similar to those in respect of which the trademark is registered if such
use results in a likelihood of confusion.
However, attention should be given to the fact that petitioners registered trademark
consists of two elements: (1) the word mark "Dockers" and (2) the wing-shaped
design or logo. Notably, there is only one registration for both features of the
trademark giving the impression that the two should be considered as a single unit.
Clinton Apparelles trademark, on the other hand, uses the "Paddocks" word mark on
top of a logo which according to petitioners is a slavish imitation of the "Dockers"
design. The two trademarks apparently differ in their word marks ("Dockers" and
"Paddocks"), but again according to petitioners, they employ similar or identical logos.
It could thus be said that respondent only "appropriates" petitioners logo and not the
word mark "Dockers"; it uses only a portion of the registered trademark and not the
whole.
Given the single registration of the trademark "Dockers and Design" and considering
that respondent only uses the assailed device but a different word mark, the right to
prevent the latter from using the challenged "Paddocks" device is far from clear. Stated
otherwise, it is not evident whether the single registration of the trademark "Dockers
and Design" confers on the owner the right to prevent the use of a fraction thereof in
the course of trade. It is also unclear whether the use without the owners consent of a
portion of a trademark registered in its entirety constitutes material or substantial
invasion of the owners right.
It is likewise not settled whether the wing-shaped logo, as opposed to the word mark,
is the dominant or central feature of petitioners trademarkthe feature that prevails
or is retained in the minds of the publican imitation of which creates the likelihood of
deceiving the public and constitutes trademark infringement. 43 In sum, there are vital
matters which have yet and may only be established through a full-blown trial.
From the above discussion, we find that petitioners right to injunctive relief has not
been clearly and unmistakably demonstrated. The right has yet to be determined.
Petitioners also failed to show proof that there is material and substantial invasion of
their right to warrant the issuance of an injunctive writ. Neither were petitioners able
to show any urgent and permanent necessity for the writ to prevent serious damage.
Petitioners wish to impress upon the Court the urgent necessity for injunctive relief,
urging that the erosion or dilution of their trademark is protectable. They assert that a
trademark owner does not have to wait until the mark loses its distinctiveness to
obtain injunctive relief, and that the mere use by an infringer of a registered mark is
already actionable even if he has not yet profited thereby or has damaged the
trademark owner.
Trademark dilution is the lessening of the capacity of a famous mark to identify and
distinguish goods or services, regardless of the presence or absence of: (1)

competition between the owner of the famous mark and other parties; or (2) likelihood
of confusion, mistake or deception. Subject to the principles of equity, the owner of a
famous mark is entitled to an injunction "against another persons commercial use in
commerce of a mark or trade name, if such use begins after the mark has become
famous and causes dilution of the distinctive quality of the mark." This is intended to
protect famous marks from subsequent uses that blur distinctiveness of the mark or
tarnish or disparage it.44
Based on the foregoing, to be eligible for protection from dilution, there has to be a
finding that: (1) the trademark sought to be protected is famous and distinctive; (2)
the use by respondent of "Paddocks and Design" began after the petitioners mark
became famous; and (3) such subsequent use defames petitioners mark. In the case
at bar, petitioners have yet to establish whether "Dockers and Design" has acquired a
strong degree of distinctiveness and whether the other two elements are present for
their cause to fall within the ambit of the invoked protection. The Trends MBL Survey
Report which petitioners presented in a bid to establish that there was confusing
similarity between two marks is not sufficient proof of any dilution that the trial court
must enjoin.
The Court also finds that the trial courts order granting the writ did not adequately
detail the reasons for the grant, contrary to our ruling in University of the Philippines v.
Hon. Catungal Jr., 45 wherein we held that:
The trial court must state its own findings of fact and cite particular law to justify grant
of preliminary injunction. Utmost care in this regard is demanded. 46
The trial court in granting the injunctive relief tersely ratiocinated that "the plaintiffs
appear to be entitled to the relief prayed for and this Court is of the considered belief
and humble view that, without necessarily delving on the merits, the paramount
interest of justice will be better served if the status quo shall be maintained." Clearly,
this statement falls short of the requirement laid down by the above-quoted case.
Similarly, in Developers Group of Companies, Inc. v. Court of Appeals,47 we held that it
was "not enough" for the trial court, in its order granting the writ, to simply say that it
appeared "after hearing that plaintiff is entitled to the relief prayed for."
In addition, we agree with the Court of Appeals in its holding that the damages the
petitioners had suffered or continue to suffer may be compensated in terms of
monetary consideration. As held in Government Service Insurance System v.
Florendo:48
a writ of injunction should never have been issued when an action for damages would
adequately compensate the injuries caused. The very foundation of the jurisdiction to
issue the writ of injunction rests in the probability of irreparable injury, inadequacy of
pecuniary estimation and the prevention of the multiplicity of suits, and where facts

IPL| August 31| 30

are not shown to bring the case within these conditions, the relief of injunction should
be refused.49
We also believe that the issued injunctive writ, if allowed, would dispose of the case on
the merits as it would effectively enjoin the use of the "Paddocks" device without proof
that there is basis for such action. The prevailing rule is that courts should avoid
issuing a writ of preliminary injunction that would in effect dispose of the main case
without trial.50 There would be a prejudgment of the main case and a reversal of the
rule on the burden of proof since it would assume the proposition which petitioners are
inceptively bound to prove.51
Parenthetically, we find no flaw in the Court of Appeals disquisition on the
consequences of the issued injunction. An exercise of caution, we believe that such
reflection is necessary to weigh the alleged entitlement to the writ vis--vis its possible
effects. The injunction issued in the instant case is of a serious nature as it tends to do
more than to maintain the status quo. In fact, the assailed injunction if sustained
would bring about the result desired by petitioners without a trial on the merits.
Then again, we believe the Court of Appeals overstepped its authority when it declared
that the "alleged similarity as to the two logos is hardly confusing to the public." The
only issue brought before the Court of Appeals through respondents Petition under
Rule 65 of the Rules of Court involved the grave abuse of discretion allegedly
committed by the trial court in granting the TRO and the writ of preliminary injunction.
The appellate court in making such a statement went beyond that issue and touched
on the merits of the infringement case, which remains to be decided by the trial court.
In our view, it was premature for the Court of Appeals to declare that there is no
confusion between the two devices or logos. That matter remains to be decided on by
the trial court.

Finally, we have no contention against the procedure adopted by the trial court in
resolving the application for an injunctive writ and we believe that respondent was
accorded due process. Due process, in essence, is simply an opportunity to be heard.
And in applications for preliminary injunction, the requirement of hearing and prior
notice before injunction may issue has been relaxed to the point that not all petitions
for preliminary injunction must undergo a trial-type hearing, it being a hornbook
doctrine that a formal or trial-type hearing is not at all times and in all instances
essential to due process. Due process simply means giving every contending party the
opportunity to be heard and the court to consider every piece of evidence presented in
their favor. Accordingly, this Court has in the case of Co v. Calimag, Jr.,52 rejected a
claim of denial of due process where such claimant was given the opportunity to be
heard, having submitted his counter-affidavit and memorandum in support of his
position.53
After a careful consideration of the facts and arguments of the parties, the Court finds
that petitioners did not adequately prove their entitlement to the injunctive writ. In the
absence of proof of a legal right and the injury sustained by the applicant, an order of
the trial court granting the issuance of an injunctive writ will be set aside for having
been issued with grave abuse of discretion.54 Conformably, the Court of Appeals was
correct in setting aside the assailed orders of the trial court.
WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals
dated 21 December 1998 and its Resolution dated 10 May 1999 are AFFIRMED. Costs
against petitioners.
SO ORDERED.