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MCDONALDS CORPORATION and G.R. No.

143993
MCGEORGE FOOD INDUSTRIES, INC.,
Petitioners,
Present:
Davide, Jr., C.J.,
Chairman,
- versus - Quisumbing,
Ynares-Santiago,
Carpio, and
Azcuna, JJ.
L.C. BIG MAK BURGER, INC.,
FRANCIS B. DY, EDNA A. DY,
RENE B. DY, WILLIAM B. DY,
JESUS AYCARDO, ARACELI Promulgated:
AYCARDO, and GRACE HUERTO,
Respondents. August 18, 2004
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DECISION
CARPIO, J.:
The Case
This is a petition for review[1] of the Decision dated 26 November 1999 of
the Court of Appeals[2] finding respondent L.C. Big Mak Burger, Inc. not
liable for trademark infringement and unfair competition and ordering
petitioners to pay respondents P1,900,000 in damages, and of its
Resolution dated 11 July 2000 denying reconsideration. The Court of
Appeals Decision reversed the 5 September 1994 Decision[3]of the
Regional Trial Court of Makati, Branch 137, finding respondent L.C. Big
Mak Burger, Inc. liable for trademark infringement and unfair competition.

The Facts
Petitioner McDonalds Corporation (McDonalds) is a corporation organized
under the laws of Delaware, United States. McDonalds operates, by itself or
through its franchisees, a global chain of fast-food restaurants.
McDonalds[4] owns a family of marks[5] including the Big Mac mark for its
double-decker hamburger sandwich.[6] McDonalds registered this
trademark with the United States Trademark Registry on 16 October 1979.
[7] Based on this Home Registration, McDonalds applied for the registration
of the same mark in the Principal Register of the then Philippine Bureau of
Patents, Trademarks and Technology (PBPTT), now the Intellectual
Property Office (IPO). Pending approval of its application, McDonalds
introduced its Big Mac hamburger sandwiches in the Philippine market in
September 1981. On 18 July 1985, the PBPTT allowed registration of the
Big Mac mark in the Principal Register based on its Home Registration in
the United States.
Like its other marks, McDonalds displays the Big Mac mark in items[8] and
paraphernalia[9] in its restaurants, and in its outdoor and indoor signages.
From 1982 to 1990, McDonalds spent P10.5 million in advertisement for
Big Mac hamburger sandwiches alone.[10]
Petitioner McGeorge Food Industries (petitioner McGeorge), a domestic
corporation, is McDonalds Philippine franchisee.[11]
Respondent L.C. Big Mak Burger, Inc. (respondent corporation) is a
domestic corporation which operates fast-food outlets and snack vans in
Metro Manila and nearby provinces.[12] Respondent corporations menu
includes hamburger sandwiches and other food items.[13] Respondents
Francis B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo,
Araceli Aycardo, and Grace Huerto (private respondents) are the
incorporators, stockholders and directors of respondent corporation.[14]
The Issues
The issues are:
1. Procedurally, whether the questions raised in this petition are proper for a

petition for review under Rule 45.


2. On the merits, (a) whether respondents used the words Big Mak not only
as part of the corporate name L.C. Big Mak Burger, Inc. but also as a
trademark for their hamburger products, and (b) whether respondent
corporation is liable for trademark infringement and unfair competition.[23]
RULLING
On the Issue of Trademark Infringement
Section 22 (Section 22) of Republic Act No. 166, as amended (RA 166),
the law applicable to this case,[32] defines trademark infringement as
follows:
Infringement, what constitutes. Any person who [1] shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or [2] reproduce, counterfeit, copy, or
colorably imitate any such mark or trade-name and apply such
reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used
upon or in connection with such goods, business or services, shall be liable
to a civil action by the registrant for any or all of the remedies herein
provided.[33]
Petitioners base their cause of action under the first part of Section 22, i.e.
respondents allegedly used, without petitioners consent, a colorable
imitation of the Big Mac mark in advertising and selling respondents
hamburger sandwiches. This likely caused confusion in the mind of the
purchasing public on the source of the hamburgers or the identity of the
business.
To establish trademark infringement, the following elements must be

shown: (1) the validity of plaintiffs mark; (2) the plaintiffs ownership of the
mark; and (3) the use of the mark or its colorable imitation by the alleged
infringer results in likelihood of confusion.[34] Of these, it is the element of
likelihood of confusion that is the gravamen of trademark infringement.[35]
On the Validity of the Big MacMark
and McDonalds Ownership of such Mark
A mark is valid if it is distinctive and thus not barred from
registration under Section 4[36] of RA 166 (Section 4). However, once
registered, not only the marks validity but also the registrants ownership of
the mark is prima facie presumed.[37]
Respondents contend that of the two words in the Big Mac mark, it is only
the word Mac that is valid because the word Big is generic and descriptive
(proscribed under Section 4[e]), and thus incapable of exclusive
appropriation.[38]
The Court also finds that petitioners have duly established McDonalds
exclusive ownership of the Big Mac mark. Although Topacio and the Isaiyas
Group registered the Big Mac mark ahead of McDonalds, Topacio, as
petitioners disclosed, had already assigned his rights to McDonalds. The
Isaiyas Group, on the other hand, registered its trademark only in the
Supplemental Register. A mark which is not registered in the Principal
Register, and thus not distinctive, has no real protection.[47] Indeed, we
have held that registration in the Supplemental Register is not even a prima
facie evidence of the validity of the registrants exclusive right to use the
mark on the goods specified in the certificate.[48]
On Types of Confusion
Section 22 covers two types of confusion arising from the use of similar or
colorable imitation marks, namely, confusion of goods (product confusion)
and confusion of business (source or origin confusion). InSterling Products
International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et
al.,[49] the Court distinguished these two types of confusion, thus:

[Rudolf] Callman notes two types of confusion. The first is the confusion of
goods in which event the ordinarily prudent purchaser would be induced to
purchase one product in the belief that he was purchasing the other. xxx
The other is the confusion of business: Here though the goods of the
parties are different, the defendants product is such as might reasonably be
assumed to originate with the plaintiff, and the public would then be
deceived either into that belief or into the belief that there is some
connection between the plaintiff and defendant which, in fact, does not
exist.
Under Act No. 666,[50] the first trademark law, infringement was limited to
confusion of goods only, when the infringing mark is used on goods of a
similar kind.[51] Thus, no relief was afforded to the party whose registered
mark or its colorable imitation is used on different although related goods.
To remedy this situation, Congress enacted RA 166 on 20 June 1947. In
defining trademark infringement, Section 22 of RA 166 deleted the
requirement in question and expanded its scope to include such use of the
mark or its colorable imitation that is likely to result in confusion on the
source or origin of such goods or services, or identity of such business.[52]
Thus, while there is confusion of goods when the products are competing,
confusion of business exists when the products are non-competing but
related enough to produce confusion of affiliation.[53]

FIRST DIVISION
McDONALDS CORPORATION,
Petitioner,

- versus -

MACJOY FASTFOOD CORPORATION,


Respondent. G.R. No. 166115
Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA,
GARCIA, JJ.
Promulgated:
February 2, 2007
On 14 March 1991, respondent MacJoy Fastfood Corporation, a domestic
corporation engaged in the sale of fast food products in Cebu City, filed with
the then Bureau of Patents, Trademarks and Technology Transfer (BPTT),
now the Intellectual Property Office (IPO), an application, thereat identified
as Application Serial No. 75274, for the registration of the trademark
MACJOY & DEVICE for fried chicken, chicken barbeque, burgers, fries,
spaghetti, palabok, tacos, sandwiches, halo-halo and steaks under classes
29 and 30 of the International Classification of Goods.
Petitioner McDonalds Corporation, a corporation duly organized and
existing under the laws of the State of Delaware, USA, filed a verified
Notice of Opposition[3] against the respondents application claiming that
the trademark MACJOY & DEVICE so resembles its corporate logo,
otherwise known as the Golden Arches or M design, and its marks
McDonalds, McChicken, MacFries, BigMac, McDo, McSpaghetti, McSnack,
and Mc, (hereinafter collectively known as the MCDONALDS marks) such
that when used on identical or related goods, the trademark applied for
would confuse or deceive purchasers into believing that the goods originate
from the same source or origin. Likewise, the petitioner alleged that the
respondents use and adoption in bad faith of the MACJOY & DEVICE mark
would falsely tend to suggest a connection or affiliation with petitioners
restaurant services and food products, thus, constituting a fraud upon the

general public and further cause the dilution of the distinctiveness of


petitioners registered and internationally recognized MCDONALDS marks
to its prejudice and irreparable damage. The application and the opposition
thereto was docketed as Inter Partes Case No. 3861.
Respondent denied the aforementioned allegations of the petitioner and
averred that it has used the mark MACJOY for the past many years in good
faith and has spent considerable sums of money for said marks extensive
promotion in tri-media, especially in Cebu City where it has been doing
business long before the petitioner opened its outlet thereat sometime in
1992; and that its use of said mark would not confuse affiliation with the
petitioners restaurant services and food products because of the
differences in the design and detail of the two (2) marks.
In a decision[4] dated December 28, 1998, the IPO, ratiocinating that the
predominance of the letter M, and the prefixes Mac/Mc in both the MACJOY
and the MCDONALDS marks lead to the conclusion that there is confusing
similarity between them especially since both are used on almost the same
products falling under classes 29 and 30 of the International Classification
of Goods, i.e., food and ingredients of food, sustained the petitioners
opposition and rejected the respondents application, viz:
WHEREFORE, the Opposition to the registration of the mark MACJOY &
DEVICE for use in fried chicken and chicken barbecue, burgers, fries,
spaghetti, palabok, tacos, sandwiches, halo-halo, and steaks is, as it is
hereby, SUSTAINED. Accordingly, Application Serial No. 75274 of the
herein Respondent-Applicant is REJECTED.
SO ORDERED.
In time, the respondent moved for a reconsideration but the IPO denied the
motion in its Order[5] of January 14, 2000.
Therefrom, the respondent went to the CA via a Petition for Review with
prayer for Preliminary Injunction[6] under Rule 43 of the Rules of Court,
whereat its appellate recourse was docketed as CA-G.R. SP No. 57247.

Here, the IPO used the dominancy test in concluding that there was
confusing similarity between the two (2) trademarks in question as it took
note of the appearance of the predominant features M, Mc and/or Mac in
both the marks. In reversing the conclusion reached by the IPO, the CA,
while seemingly applying the dominancy test, in fact actually applied the
holistic test. The appellate court ruled in this wise:
In trademark cases, particularly in ascertaining whether one trademark is
confusingly similar to another, no set rules can be deduced because each
case must be decided on its merits.[19] In such cases, even more than in
any other litigation, precedent must be studied in the light of the facts of the
particular case.[20] That is the reason why in trademark cases,
jurisprudential precedents should be applied only to a case if they are
specifically in point.[21]
This Court, xxx, has relied on the dominancy test rather than the holistic
test. The dominancy test considers the dominant features in the competing
marks in determining whether they are confusingly similar. Under the
dominancy test, courts give greater weight to the similarity of the
appearance of the product arising from the adoption of the dominant
features of the registered mark, disregarding minor differences. Courts will
consider more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality, sales outlets
and market segments.
Applying the dominancy test to the instant case, the Court finds that herein
petitioners MCDONALDS and respondents MACJOY marks are confusingly
similar with each other such that an ordinary purchaser can conclude an
association or relation between the marks.
To begin with, both marks use the corporate M design logo and the prefixes
Mc and/or Mac as dominant features. The first letter M in both marks puts
emphasis on the prefixes Mc and/or Mac by the similar way in which they

are depicted i.e. in an arch-like, capitalized and stylized manner.[25]


In the case at bar, the predominant features such as the M, Mc, and Mac
appearing in both McDonalds marks and the MACJOY & DEVICE easily
attract the attention of would-be customers. Even non-regular customers of
their fastfood restaurants would readily notice the predominance of the M
design, Mc/Mac prefixes shown in both marks. Such that the common
awareness or perception of customers that the trademarks McDonalds
mark and MACJOY & DEVICE are one and the same, or an affiliate, or
under the sponsorship of the other is not far-fetched.
The differences and variations in styles as the device depicting a head of
chicken with cap and bowtie and wings sprouting on both sides of the
chicken head, the heart-shaped M, and the stylistic letters in MACJOY &
DEVICE; in contrast to the arch-like M and the one-styled gothic letters in
McDonalds marks are of no moment. These minuscule variations are
overshadowed by the appearance of the predominant features mentioned
hereinabove.
With the existence of confusing similarity between the subject trademarks,
the resulting issue to be resolved is who, as between the parties, has the
rightful claim of ownership over the said marks.
A mark is valid if it is distinctive and hence not barred from registration
under the Trademark Law. However, once registered, not only the marks
validity but also the registrants ownership thereof isprima facie presumed.
[26]
On the other hand, it is not disputed that the respondents application for
registration of its trademark MACJOY & DEVICE was filed only on March
14, 1991 albeit the date of first use in the Philippineswas December 7,
1987.[32]
Hence, from the evidence on record, it is clear that the petitioner has duly
established its ownership of the mark/s.

Respondents contention that it was the first user of the mark in the
Philippines having used MACJOY & DEVICE on its restaurant business and
food products since December, 1987 at Cebu City while the first McDonalds
outlet of the petitioner thereat was opened only in 1992, is downright
unmeritorious. For the requirement of actual use in commerce x x x in the
Philippines before one may register a trademark, trade-name and service
mark under the Trademark Law[33] pertains to the territorial jurisdiction of
the Philippines and is not only confined to a certain region, province, city or
barangay.
Likewise wanting in merit is the respondents claim that the petitioner cannot
acquire ownership of the word Mac because it is a personal name which
may not be monopolized as a trademark as against others of the same
name or surname. As stated earlier, once a trademark has been registered,
the validity of the mark is prima facie presumed. In this case, the
respondent failed to overcome such presumption.We agree with the
observations of the petitioner regarding the respondents explanation that
the word MACJOY is based on the name of its presidents niece, Scarlett Yu
Carcell. In the words of the petitioner:
When one applies for the registration of a trademark or label which is
almost the same or very closely resembles one already used and
registered by another, the application should be rejected and dismissed
outright, even without any opposition on the part of the owner and user of a
previously registered label or trademark, this not only to avoid confusion on
the part of the public, but also to protect an already used and registered
trademark and an established goodwill.
WHEREFORE, the instant petition is GRANTED. Accordingly, the assailed
Decision and Resolution of the Court of Appeals in CA-G.R. SP NO. 57247,
are REVERSED and SET ASIDE and the Decision of the Intellectual
Property Office in Inter Partes Case No. 3861 is REINSTATED.
No pronouncement as to costs.