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DIWATA NOTES LIP

ATTY. ALARILLA

QUESTIONS ANSWER
1. How is a mark registered? Start by conducting a Trademark Search to determine if your
trademark is registrable. It is always advisable to check if the
trademark is registrable, mainly to see if there is already
someone who filed for the same trademark ahead of time.
The rule in trademark registration is "First-to-File" has
priority. (In order to not waste money on government filing
fees if it will later on be denied registration simply because
there is already a registered trademark.)

Once determined that the mark is registrable, the application


will then be filed before the Intellectual Property Office.

Upon receipt of your trademark application, the Intellectual


Property Office will assign it to an examiner for processing.

The examiner will determine if your trademark is registrable.


Most of the time, the examiner will issue a letter, which
requires a response. The applicant will respond, to answer or
clarify questions the examiner may have, and will strongly
represent your application to ensure maximum protection for
your trademark.

Once the examiner is satisfied, the trademark application is


"Published For Opposition". This is a 30-day period by which
anybody can go to the examiner and oppose your trademark
application (most of the time, the reason being that the
person opposing is claiming ownership over the same
trademark).

If there is no opposition, your trademark application is


considered registered and we wait for the Intellectual
Property Office to issue your Certificate of Registration.
2. What happens after trademark
application is reserved?
3. What is the purpose of the Publication in the Official Gazette signifies the end of
publication? jurisdiction of the examiner. An application for
registration is subject to opposition proceedings before the
issuance of the certificate of registration. Thus, after
examination or re-examination of an application for
registration, if it should appear to the examiner that the
applicant is entitled to have his mark registered, the mark
will, upon recommendation of said Examiner, be ordered by
the Director to be published in the IPO Gazette for
opposition, and the applicant is notified of such action.

Publication does not mean approval of the application.


4. Assuming there is no opposition, When the period of filing an opposition has expired or when
what will happen? an opposition was denied, the Office upon payment of the
required fee, shall issue the certificate of registration.
Upon issuance of certificate of registration, notice thereof
making reference to the publication of the application shall
be published in the IPO Gazette. (Section 136)
5. What is the meaning for a need of The declaration must pertain to the actual use in the
DAU (Declaration of Actual Use)? Philippines.

The Office will not require any proof of use in commerce in


the processing of trademark applications. However, without
need of any notice from the Office, all applicants or
registrants shall file a declaration of actual use of the mark
with evidence to that effect within three years, without
possibility of extension, from the filing date of the
application. Otherwise, the application shall be refused or

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the mark shall be removed from the register by the Director


motu proprio. (Rule 204)

Note that the declaration of actual use, alone, without


proof of actual use, would not be sufficient to establish
actual use. A declaration of actual use shall also be filed
within 1 year from the fifth anniversary of the date of
the registration; otherwise the Office shall remove it from
the Register.
6. What is the effect of the issuance The certificate of registration of a mark shall be prima facie
of the certificate of registration? evidence of the validity of the registration, the
registrants exclusive right to use the same in
connection with the goods or services and those that are
related thereto specified in the certificate.

Inconclusive evidence of ownership; only prima facie


evidence of validity of registration, ownership and exclusive
right
7. Is the right limited only to those No. The registrant shall also have the right to exclusive use
goods or services declared in the in connection with goods or services and those that are
application? related thereto.
8. What is the Related Goods Goods, although not specified in the certificate of
Doctrine? registration, but are related to the goods specified in the
certificate of registration would be covered by trademark
protection extended for that certificate of registration.
(Section 123.1 (d), Section 138, Section 147.1)
9. Reason for Related Goods In certain cases, trademark protection may be extended to
Doctrine? related goods to guard against numerous evils such as
consumer confusion. This is referred to as the related goods
doctrine. As is the case in determining trademark
infringement of competitive goods, the modern rule of law on
related goods gives the trademark owner protection against
use of its mark on any product or service, which would
reasonably confuse the buying public as to the source of the
product, or service.
10. When are goods related to each The factors identified are:
other? The business (and its location) to which the goods
belong
The class of product to which the goods belong
The products quality, quantity, or size, including the
nature of the package, wrapper or container
The nature and cost of the articles
The descriptive properties, physical attributes or
essential characteristics with reference to their form,
composition, texture, or quality
The purpose of the goods
The fields of manufacture
The conditions under which the article is usually
purchased

The test of whether or not the goods are related to each


other is the similarity of the products involved, and not
the arbitrary classification or general description of their
properties or characteristics.
11. When do you file for an opposition? Any person who believes that he would be damaged by the
registration of a mark may, upon payment of the required fee
and within thirty (30) days after the publication
referred to in Subsection 133.2, file with the Office an
opposition to the application. Such opposition shall be in
writing and verified by the oppositor or by any person on his
behalf who knows the facts, and shall specify the grounds on
which it is based and include a statement of the facts relied
upon. Copies of certificates of registration of marks

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registered in other countries or other supporting documents


mentioned in the opposition shall be filed therewith, together
with the translation in English, if not in the English language.
For good cause shown and upon payment of the required
surcharge, the time for filing an opposition may be extended
by the Director of Legal Affairs, who shall notify the applicant
of such extension. The Regulations shall fix the maximum
period of time within which to file the opposition. (Section
134)
12. What happens when there is an Upon the filing of an opposition, the Office shall serve
opposition? notice of the filing on the applicant, and of the date of
the hearing thereof upon the applicant and the
oppositor and all other persons having any right, title or
interest in the mark covered by the application, as appear of
record in the Office. (Section 135)
13. In the event of the denial of the Appeal to the Court of Appeals by Petition for Review
opposition, what will be the under Rule 43. Thereafter, an adverse decision may be
remedy? brought to the Supreme Court by petition for review on
certiorari under Rule 45.

While, as a general rule, the Supreme Court is not a trier of


facts, there are recognized exceptions, such as grave abuse
of discretion in the finding of facts. Thus, it may be pointed
out that the findings of facts by the appellate court was
tainted by mistake, absurdity, speculation, conjectures, and
conflicts, or that the conclusions were contrary to the finding
by the court of origin. Thus, the conflicting findings of facts
by the IPO and the CA would justify the SCs review of the
facts.

Findings of facts by Director General of IPO is binding upon


the courts in the absence of grave abuse of discretion and is
supported by substantial evidence. There must also be
exhaustion of administrative remedies before judicial
remedies.
14. Is there a need for a motion for
reconsideration?
15. If the Director General denies,
what happens next?
16. Why Court of Appeals, not RTC? Findings of Quasi Judicial bodies are appealable to the Court
of Appeals. (Rules of Court)
17. Assuming there is an opposition, Upon the filing of an opposition, the Office shall serve notice
what will happen? of the filing on the applicant, and of the date of the hearing
thereof upon the applicant and the oppositor and all other
persons having any right, title or interest in the mark covered
by the application, as appear of record in the Office.
18. When is petition for cancellation A petition to cancel a registration of a mark under this Act
filed? may be filed with the Bureau of Legal Affairs by any person
who believes that he is or will be damaged by the
registration of a mark under this Act as follows:

Within five (5) years from the date of the


registration of the mark under this Act.
At any time, if the registered mark becomes the
generic name for the goods or services, or a
portion thereof, for which it is registered, or has
been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of this Act,
or if the registered mark is being used by, or with
the permission of, the registrant so as to
misrepresent the source of the goods or services on
or in connection with which the mark is used. If the
registered mark becomes the generic name for less
than all of the goods or services for which it is

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registered, a petition to cancel the registration for


only those goods or services may be filed. A
registered mark shall not be deemed to be the
generic name of goods or services solely because
such mark is also used as a name of or to identify a
unique product or service. The primary significance
of the registered mark to the relevant public rather
than purchaser motivation shall be the test for
determining whether the registered mark has
become the generic name of goods or services on or
in connection with which it has been used.
At any time, if the registered owner of the mark
without legitimate reason fails to use the mark
within the Philippines, or to cause it to be used in
the Philippines by virtue of a license during an
uninterrupted period of three (3) years or longer.
19. What will happen if a DAU is not Rule 204 of the Trademark Regulations provides that, in case
filed? of non-filing of the Declaration of Actual Use, the application
shall be refused or the mark shall be removed from the
register by the Director motu proprio.
20. Renewal of Registration A certificate of registration may be renewed for periods
of ten years at its expiration upon payment of the
prescribed fee and upon filing of a request. The request shall
contain the following indications:

a) An indication that renewal is sought;


b) The name and address of the registrant or his
successor-in-interest, hereafter referred to as the
right holder;
c) The registration number of the registration
concerned;
d) The filing date of the application which resulted in
the registration concerned to be renewed;
e) Where the right holder has a representative, the
name and address of that representative;
f) The names of the recorded goods or services for
which the renewal is requested or the names of the
recorded goods or services for which the renewal is
not requested, grouped according to the classes of
the Nice Classification to which that group of goods
or services belongs and presented in the order of the
classes of the said Classifications;
g) A signature by the right holder or his representative;
and
h) In case there has been material variation in the
manner of display, five sets of the new labels must
be submitted with the application.
21. When can renewal be done? Such request shall be in Filipino or English and may be made
at any time within six months before the expiration of
the period for which the registration was issued or
renewed, or it may be made within six months after such
expiration on payment of the additional fee herein
prescribed. (Rule 918, Trademark Regulations)
22. Is the pendency of a cancellation
of a trademark prejudicial question
to a case of infringement?
23. Shangri-la International vs. CA Facts: On June 21, 1988, the Shangri-La International Hotel
Management, Ltd., Shangri-La Properties, Inc., Makati
Shangri-La Hotel and Resort, Inc. and Kuok Philippine
Properties, Inc., filed with the Bureau of Patents, Trademarks
and Technology Transfer (BPTTT) a petition praying for the
cancellation of the registration of the Shangri-La mark and
S device/logo issued to the Developers Group of
Companies Inc., on the ground that the same was illegally

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and fraudulently obtained and appropriated for the latters


restaurant business. The Shangri-La Group alleged that it is
the legal and beneficial owners of the subject mark and logo;
that it has been using the said mark and logo for its
corporate affairs and business since March 1962 and caused
the same to be specially designed for their international
hotels in 1975, much earlier than the alleged first use by the
Developers Group in 1982.
Likewise, the Shangri-La Group filed with the BPTTT its own
application for registration of the subject mark and logo. The
Developers Group filed an opposition to the application.

Almost three (3) years later, the Developers Group instituted


with the RTC a complaint for infringement and damages with
prayer for injunction. When the Shangri-La Group moved for
the suspension of the proceedings, the trial court denied
such in a Resolution.

The Shangri-La Group filed a petition for certiorari before the


CA but the CA dismissed the petition for certiorari. Hence,
the instant petition.

Issue: Whether or not the infringement case should be


dismissed or at least suspended

Held: There can be no denying that the infringement case is


validly pass upon the right of registration. Section 161 of
Republic Act No. 8293 provides to wit:

SEC. 161. Authority to Determine Right to


Registration In any action involving a registered
mark the court may determine the right to
registration, order the cancellation of the
registration, in whole or in part, and otherwise
rectify the register with respect to the registration of
any party to the action in the exercise of this.
Judgement and orders shall be certified by the court
to the Director, who shall make appropriate entry
upon the records of the Bureau, and shall be
controlled thereby. (Sec. 25, R.A. No. 166a).
(Emphasis provided)

To provide a judicious resolution of the issues at hand, the


Court find it apropos to order the suspension of the
proceedings before the Bureau pending final determination
of the infringement case, where the issue of the validity of
the registration of the subject trademark and logo in the
name of Developers Group was passed upon.
24. Grounds for cancellation The trademark becomes generic
The trademark is abandoned
Its registration was obtained fraudulently or contrary
to the Code
The trademark is being used to misrepresent the
source of the goods or services
Non-use
25. What do you mean by a mark A registered mark shall not be deemed to be the generic
becoming a generic word? name of goods or services solely because such mark is also
used as a name of or to identify a unique product or service.
The primary significance of the registered mark to the
relevant public rather than purchaser motivation shall
be the test for determining whether the registered
mark has become the generic name of goods or
services on or in connection with which it has been
used.

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26. Superior Commercial vs. The Court found that there was fraudulent registration of the
Kunnan trademarks Kennex, Kennex and Devise, PRO Kennex,
(REGISTRATION WAS OBTAINED by a mere distributor who was not the lawful owner of the
FRAUDULENTLY) marks.

The Court found that the President of Superior Commercial


misled Kunnans officers into believing that Kunnan was not
qualified to hold the trademarks due to the many
requirements set by the Philippine Patent Office that Kunnan
could not meet. Superior also deceived Kunnan into
assigning its application for registration of the PRO Kennex
trademark in favor of Superior through an Assignment
Agreement.
27. Allowable grounds for non-use? Sec. 152. None-use of a Mark When Excused

152.1. Non-use of a mark may be excused if caused by


circumstances arising independently of the will of the
trademark owner. Lack of funds shall not excuse non-use of a
mark.

152.2. The use of the mark in a form different from the form
in which it is registered, which does not alter its distinctive
character, shall not be ground for cancellation or removal of
the mark and shall not diminish the protection granted to the
mark.

152.3. The use of a mark in connection with one or more of


the goods or services belonging to the class in respect of
which the mark is registered shall prevent its cancellation or
removal in respect of all other goods or services of the same
class.

152.4. The use of a mark by a company related with the


registrant or applicant shall inure to the latters benefit, and
such use shall not affect the validity of such mark or of its
registration: Provided, That such mark is not used in such
manner as to deceive the public. If use of a mark by a person
is controlled by the registrant or applicant with respect to the
nature and quality of the goods or services, such use shall
inure to the benefit of the registrant or applicant.
28. Trademark Regulation Provisions in RULE 802. Non-use of a Mark When Excused.
relation to Non-Use of a Mark
(a) Non-use of a mark may be excused if
caused by circumstances arising
independently of the will of the trademark
owner. Lack of funds shall not excuse non-
use of a mark.
(b) The special circumstances to excuse non-
use in affidavits of non-use shall not be
accepted unless they are clearly beyond the
control of the registrant such as the
prohibition of sale imposed by government
regulation.

RULE 803. Use of a Mark in a different form. The use


of the mark in a form different from the form in which it is
registered, which does not alter its distinctive character, shall
not be ground for cancellation or removal of the mark and
shall not diminish the protection granted to the mark.

RULE 804. Use of a Mark for goods belonging to the


class registered. The use of a mark in connection with
one or more of the goods or services belonging to the class
in respect of which the mark is registered shall prevent its
cancellation or removal in respect of all other goods or

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services of the same class.

RULE 805. Use of a Mark by Related Company. The


use of a mark by a company related with the registrant or
applicant shall inure to the latter's benefit, and such use shall
not affect the validity of such mark or of its registration:
Provided, That such mark is not used in such manner as to
deceive the public. If use of a mark by a person is controlled
by the registrant or applicant with respect to the nature and
quality of the goods or services, such use shall inure to the
benefit of the registrant or applicant.

RULE 806. Certificates of Registration; Records and


copies in registered cases. A certificate of registration
of a mark shall be prima facie evidence of the validity of the
registration, the registrants ownership of the mark, and of
the registrants exclusive right to use the same in connection
with the goods or services and those that are related thereto
specified in the certificate. After a mark or trade name or
name or other mark of ownership has been registered, the
statement, the drawings, and all documents relating to the
case are subject to general inspection, and copies will be
furnished upon payment of the required fees.

RULE 807. Contents of Certificate of Registration.


The certificate of registration of a mark shall include a
reproduction of the mark and shall mention its number, the
name and address of the registered owner and, if the
registered owners address is outside the country, his
address for service within the country; the dates of
application and registration; if priority is claimed, an
indication of this fact, and the number, date and country of
the application, basis of the priority claims; the list of goods
or services in respect of which registration has been granted,
with the indication of the corresponding class or classes; and
such other data as the Regulations may prescribe from time
to time.

RULE 808. Use of indications by Third Parties for


Purposes Other than those for which the Mark is Used.
Registration of the mark shall not confer on the registered
owner the right to preclude third parties from using bona fide
their names, addresses, pseudonyms, a
geographical name, or exact indications concerning the kind,
quality, quantity, destination, value, place of origin, or time
of production or of supply, of their goods or services:
Provided, that such use is confined to the purposes of mere
identification or information and cannot mislead the public as
to the source of the goods or services.
29. Statutory Definition of Sec. 155. Remedies; Infringement
Infringement and its Remedies
Any person who shall, without the consent of the owner
of the registered mark:

155.1. Use in commerce any reproduction,


counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant
feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including
other preparatory steps necessary to carry out the sale of
any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or to
deceive; or

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155.2. Reproduce, counterfeit, copy or colorably


imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be
used in commerce upon or in connection with the sale,
offering for sale, distribution, or advertising of goods
or services on or in connection with which such use is
likely to cause confusion, or to cause mistake, or to
deceive, shall be liable in a civil action for infringement by
the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment
any of the acts stated in Subsection 155.1 or this subsection
are committed regardless of whether there is actual sale of
goods or services using the infringing material.
30. Elements of Infringement Validity of the plaintiffs mark
(McDonalds Corp. vs. LC Big The plaintiffs ownership of the mark
Mak Burger) The use of the mark or its colorable imitation
by the alleged infringer results to likelihood of
confusion
31. Who can file a case for Only the registrant can file a case for infringement.
infringement? Consequently, upon the finality of an order of cancellation of
a mark, the right of a registrant to file a case for
infringement terminates. Title to the trademark is
indispensable to a valid cause of action and its certificate of
registration shows such title.
32. Is there infringement in case of a No. There can be no infringement of a word mark which
unregistrable trademark? cannot be registered or appropriated exclusively.
33. Actions and Damages, and Sec. 156. Actions, and Damages and Injunction for
Injunction for Infringement Infringement

156.1. The owner of a registered mark may recover


damages from any person who infringes his rights, and the
measure of the damages suffered shall be either the
reasonable profit which the complaining party would have
made, had the defendant not infringed his rights, or the
profit which the defendant actually made out of the
infringement, or in the event such measure of damages
cannot be readily ascertained with reasonable certainty, then
the court may award as damages a reasonable percentage
based upon the amount of gross sales of the defendant or
the value of the services in connection with which the mark
or trade name was used in the infringement of the rights of
the complaining party. (Sec. 23, first par., R.A. No. 166a)

156.2. On application of the complainant, the court may


impound during the pendency of the action, sales invoices
and other documents evidencing sales. (n)

156.3. In cases where actual intent to mislead the public or


to defraud the complainant is shown, in the discretion of the
court, the damages may be doubled. (Sec. 23, first par., R.A.
No. 166)

156.4. The complainant, upon proper showing, may also be


granted injunction.
34. Converse Rubber Corp. vs. in cases of unfair competition, while the requisite degree of
Jacinto Rubber resemblance or similarity between the names, brands, or
other indicia is not capable of exact definition, it may be
FACTS: stated generally that the similarity must be such, but need
only be such, as is likely to mislead purchasers of ordinary
This is an action for unfair competition. caution and prudence: or in other words, the ordinary buyer,
Plaintiff Converse Rubber Corporation, (is) into the belief that the goods or wares are those, or that the
an American Corporation, manufacturer (of) name or business is that, of another producer or tradesman.

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canvas rubber shoes under the trade name It is not necessary in either case that the resemblance be
"Converse Chuck Taylor All Star"; in the sufficient to deceive experts, dealers, or other persons
Philippines, it has an exclusive licensee, specially familiar with the trademark or goods involved. Nor
plaintiff Edwardson Manufacturing is it material that a critical inspection and comparison would
Corporation, for the manufacture and sale disclose differences, or that persons seeing the trademarks
in the Philippines of its product. Plaintiff or articles side by side would not be deceived' (52 Am. Jur.
Converse is the owner of trademarks and pp. 600-601)." (Brief for Plaintiffs as Appellees, pp. 28-29, p.
patent, registered with United States Patent 71, Record.)
Office, covering the words. "All Star", the
representation and design of a five-pointed Indeed, the very text of the law on unfair competition in this
star, and the design of the sole. The country is clear enough. It is found in Chapter VI of Republic
trademark "Chuck Taylor" was registered Act 166 reading thus:
by plaintiff Converse with the Philippines
Patent Office on March 3, 1966. Since 1946, "SEC. 29. Unfair competition, rights and remedies.
"Chuck Taylor" is being sold in the A person who has identified in the mind of the public
Philippines. It has been used exclusively by the goods he manufactures or deals in, his business
Philippine basketball teams competing in or services from those of others, whether or not a
international competitions. It is also mark or trade name is employed, has a property right
popular among players in various in the goodwill of the said goods, business or services
basketball leagues, like the MICAA and the so identified, which will be protected in the same
NCAA, because of its high quality and manner as other property rights. Such a person shall
attractive style. "Chuck Taylor" currently have the remedies provided in section twenty-three,
retails at P46.00 per pair. Chapter V hereof.

Defendant Jacinto Rubber & Plastics "Any person who shall employ deception or any other means
Company, Inc., a local corporation, contrary to good faith by which he shall pass off the goods
likewise, manufactures and sells manufactured by him or in which he deals, or his business, or
canvas rubber shoes. It sells its services of those of the one having established such
product under the trade names goodwill, or who shall commit any acts calculated to produce
"Custombuilt Viscount", "Custombuilt said result, shall be guilty of unfair competition, and shall be
Challenger", and "Custombuilt subject to an action therefor.
Jayson's". Its trademark "Custombuilt
Jayson's" was registered by the Philippines "IN PARTICULAR, AND WITHOUT IN ANY WAY LIMITING
Patent Office on November 29, 1957. The THE SCOPE OF UNFAIR COMPETITION, THE FOLLOWING
gross sales from 1962 to 1965 of SHALL BE DEEMED GUILTY OF UNFAIR COMPETITION:
"Custombuilt" shoes total
P16,474,103.76."Custombuilt" is retailed at a) Any person, who in selling his goods shall give
P11.00. them the general appearance of goods of
another manufacturer or dealer, either as to the
In 1963, plaintiff Converse and goods themselves or in the wrapping of the
defendant Jacinto entered into packages in which they are contained, or the devices
protracted negotiations for a licensing or words thereon, or in any other feature of their
agreement whereby defendant Jacinto appearance, which would be likely to influence
would be the exclusive license of purchasers to believe that the goods offered are
plaintiff Converse in the Philippines those of a manufacturer or dealer other than the
for the manufacture and sale of actual manufacturer or dealer, or who otherwise
"Chuck Taylor" shoes but with the clothes the goods with such appearance as shall
right to continue manufacturing and deceive the public and defraud another of his
selling its own products. One of the legitimate trade, or any subsequent vendor of such
points taken up by parties was the design goods or any agent of any vendor engaged in selling
and general appearance of "Custombuilt" such goods with a like purpose;
shoes. Plaintiff Converse insisted on
the condition that defendant Jacinto b) Any person who by any artifice, or device, or
change the design of "Custombuilt" who employs any other means calculated to
shoes so as to give "Custombuilt" a induce the false belief that such person is
general appearance different from offering the services of another who has
"Chuck Taylor." After an extensive identified such services in the mind of the public; or
discussion, defendant Jacinto gave into to
the demand of plaintiff Converse; it c) Any person who shall make any false statement
submitted to plaintiff Converse for the in the course of trade or who shall commit any
latter's approval a sketch of a new design other act contrary to good faith of a nature
for "Custombuilt". This design was calculated to discredit the goods, business or
accepted by plaintiff Converse. Defendant services of another."
Jacinto Rubber then proposed that the
licensing agreement be made in favor of its "In no uncertain terms, the statute on unfair competition

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affiliates, defendant Ace Rubber. On extends protection to the goodwill of a manufacturer


January 22, 1965, defendant Ace Rubber or dealer. It attaches no fetish to the word 'competition'. IN
signed the licensing agreement while PLAIN LANGUAGE IT DECLARES THAT A 'PERSON WHO
defendant Jacinto Rubber and Arturo Jacinto HAS IDENTIFIED IN THE PUBLIC THE GOODS HE
signed the guarantee agreement to secure MANUFACTURES OR DEALS IN, HIS BUSINESS OR
the performance by defendant Ace Rubber SERVICES FROM THOSE OF OTHERS, WHETHER OR
of its obligations under the licensing NOT A RIGHT IN THE GOODWILL OF THE SAID GOODS,
agreement. BUSINESS OR SERVICES SO IDENTIFIED, WHICH WILL
BE PROTECTED IN THE SAME MANNER AS OTHER
However, the licensing agreement did not PROPERTY RIGHTS.' It denominates as 'unfair competition'
materialize, because Hermogenes Jacinto 'any acts' calculated to result in the passing off of other
refused to sign the guarantee. goods 'for those of the one having established such goodwill.'
Singularly absent is a requirement that the goodwill sought
Plaintiff Converse and plaintiff to be protected in an action for unfair competition must have
Edwardson then executed licensing been established in an actual competitive situation. Nor does
agreement, making plaintiff the law require that the deception or other means contrary to
Edwardson the exclusive Philippine good faith or any acts calculated to pass off other goods for
licensee for the manufacture and sale those of one who has established a goodwill must have been
of "Chuck Taylor." On June 18, 1966, committed in an actual competitive situation.
plaintiffs sent a written demand to
defendants to stop manufacturing and "To read such conditions, as defendants-appellants seek to
selling "Custombuilt" shoes of do, in the plain prescription of the law is to re-construct it.
Identical appearance as "Chuck Indeed, goodwill established in other than a competitive
Taylor". Defendants did not reply to milieu is no less a property right that deserves protection
plaintiffs' letter. Hence, this suit. from unjust appropriation or injury. This, to us, is precisely
the clear sense of the law when it declares without
Plaintiffs contend that "Custombuilt" shoes equivocation that a 'person who has identified in the
are Identical in design and General mind of the public the goods he manufactures or
appearance to "Chuck Taylor" and, claiming deals in, his business or services from those of others,
prior Identification of "Chuck Taylor" in the has a property right in the goodwill of the said goods,
mind of the buying public in the Philippines, business or services so identified, which will be
they contend that defendants are guilty of protected in the same manner as other property
unfair competition by selling "Custombuilt" rights.'
of the design and with the general
appearance of "Chuck Taylor". "Plaintiffs-appellees have a established goodwill. This
goodwill, the trial court found, defendants-appellants have
pirated in clear bad faith to their unjust enrichment. It is
strange that defendants-appellants now say that they should
be spared from the penalty of the law, because they were
not really in competition with plaintiffs-appellees."
35. Del Monte Corp. vs Court of ISSUE: Whether SSMI committed infringement against
Appeals Del Monte in the use of its logos and bottles?

FACTS: Petitioner Del Monte Corporation Yes. In determining whether two trademarks are confusingly
(Del Monte), through its local distributor similar, the two marks in their entirety as they appear
and manufacturer, PhilPack filed an in the respective labels must be considered in relation
infringement of copyright complaint to the goods to which they are attached; the discerning
against respondent Sunshine Sauce eye of the observer must focus not only on the precognizant
Manufacturing Industries (SSMI), also a words but also on the other features appearing on both
maker of catsup and other kitchen sauces. labels. It has been correctly held that side-by-side
In its complaint, Del Monte alleged that comparison is not the final test of similarity. In determining
SSMI are using bottles and logos identical whether a trademark has been infringed, we must
to the petitioner, to which is deceiving and consider the mark as a whole and not as dissected.
misleading to the public.
The Court is agreed that are indeed distinctions, but
In its answer, Sunshine alleged that it had similarities holds a greater weight in this case .
ceased to use the Del Monte bottle and
that its logo was substantially different THE SUNSHINE LABEL IS A COLORABLE IMITATION OF
from the Del Monte logo and would not THE DEL MONTE TRADEMARK. WHAT IS UNDENIABLE
confuse the buying public to the detriment IS THE FACT THAT WHEN A MANUFACTURER PREPARES
of the petitioners. TO PACKAGE HIS PRODUCT, HE HAS BEFORE HIM A
BOUNDLESS CHOICE OF WORDS, PHRASES, COLORS
The Regional Trial Court of Makati AND SYMBOLS SUFFICIENT TO DISTINGUISH HIS
dismissed the complaint. It held that there PRODUCT FROM THE OTHERS. SUNSHINE CHOSE,
were substantial differences between the WITHOUT A REASONABLE EXPLANATION, TO USE THE

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logos or trademarks of the parties nor on SAME COLORS AND LETTERS AS THOSE USED BY DEL
the continued use of Del Monte bottles. MONTE THOUGH THE FIELD OF ITS SELECTION WAS SO
The decision was affirmed in toto by the BROAD, THE INEVITABLE CONCLUSION IS THAT IT WAS
Court of Appeals. DONE DELIBERATELY TO DECEIVE.

With regard to the bottle use, Sunshine despite the many


choices available to it and notwithstanding that the caution
"Del Monte Corporation, Not to be Refilled" was embossed on
the bottle, still opted to use the petitioners' bottle to market
a product which Philpack also produces. This clearly shows
the private respondent's bad faith and its intention to
capitalize on the latter's reputation and goodwill and pass off
its own product as that of Del Monte.
36. Bristol Myers vs. Director of ISSUE: whether or not, considering all the factors
Patents involved, in both trademarks as the parties would
(BIOFERIN AND BUFFERIN) discuss in their memoranda, there will be such
confusing similarity between the two trademarks as
FACTS: A petition for registration in the will be likely to deceive the purchasing public.
Principal Register of the Patent Office of the
trademark IN DETERMINING WHETHER TWO TRADEMARKS ARE
"BIOFERIN" was filed on October 21, 1957 CONFUSINGLY SIMILAR, THE TEST IS NOT SIMPLY TO
by United American Pharmaceuticals, Inc. TAKE THEIR WORDS AND COMPARE THE SPELLING AND
Said PRONUNCIATION OF SAID WORDS. RATHER, IT IS TO
domestic corporation first used the CONSIDER THE TWO MARKS IN THEIR ENTIRETY, AS
aforestated trademark in the Philippines on THEY APPEAR IN THE RESPECTIVE LABELS, IN
August 13, 1957. RELATION TO THE GOODS TO WHICH THEY ARE
It covers "a medicinal preparation of ATTACHED
antihistamic, analgesic, antipyritic with
vitamin C and The Court ruled that there was a striking difference as to
Bioflavenoid used in the treatment of shape, size of label, color of label, color background of word
common colds, influenza and other febrile mark, overall layout, form of product, and prescription
diseases with requirement of the trademarks Bioferin and Bufferin,
capillary hemmorrhagic tendencies." The both classified under the same class of medicines and
product falls under Class 6 of the official pharmaceutical preparations.
classification, that is, "Medicines and
Pharmaceutical Preparations". Bioferin to be dispensed only by a physician
Bufferin no such statement
Bristol Myers Co., a corporation of the State
of Delaware, U.S.A., filed on January 6, Accordingly, taken as they will appear to a prospective
1959 an customer, the trademark in question are not apt to confuse.
opposition to the application. Said Furthermore, the product of the applicant is expressly
oppositor is the owner in the Philippines of stated as dispensable only upon doctor's prescription,
the trademark while that of oppositor does not require the same. The
"BUFFERIN" under Certificate of chances of being confused into purchasing one for the other
Registration No. 4578 issued by the are therefore all the more rendered negligible.
Philippine Patent Office on March 3, 1954.
Its trademark is also registered in the Although oppositor avers that some drugstores sell
United States under Certificate of "BIOFERIN" without asking for a doctor's prescription, the
Registration No. 566190 issued on same if true would be an irregularity not attributable
November 4, 1952. It was first used in the to the applicant, who has already clearly stated the
Philippines on May 13, 1953. The product requirement of a doctor's prescription upon the face
covered by "BUFFERIN" also belongs to of the label of its product.
Class 6, Medicines and Pharmaceutical
Preparations. Designated as "Antacid Wherefore, the decision of the Director of Patents appealed
analgesic", it is intended for relief in cases from is hereby affirmed without costs.
of "simple headaches, neuralgia, colds,
menstrual pain and minor muscular aches."

The thrust of oppositor's contention was


that the registration of the applicant's
trademark
"BIOFERIN would violate its rights and
interests in its registered trademark
"BUFFERIN" as well
as mislead and confuse the public as to the

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source and origin of the goods covered by


the respective marks, in view of the
allegedly practically the same spelling,
pronunciation and lettertype design of the
two trademarks covering goods of the
same class.
37. McDonalds Corp. vs. LC Big 1ST ISSUE: W/N RESPONDENT CORPORATION IS
Mak Burger LIABLE FOR TRADEMARK INFRINGEMENT AND
UNFAIR COMPETITION.
FACTS: Petitioner McDonald's Corporation
("McDonald's") is a US corporation that To establish trademark infringement, the following elements
operates a global chain of fast-food must be shown: (1) the validity of plaintiff's mark; (2) the
restaurants, with Petitioner McGeorge Food plaintiff's ownership of the mark; and (3) the use of the mark
Industries ("McGeorge"), as the Philippine or its colorable imitation by the alleged infringer results in
franchisee. "likelihood of confusion." Of these, it is the element of
likelihood of confusion that is the gravamen of trademark
McDonald's owns the "Big Mac" mark for its infringement.
"double-decker hamburger sandwich." with
the US Trademark Registry on 16 October 1ST ELEMENT: A MARK IS VALID IF IT IS DISTINCTIVE
1979. AND NOT MERELY GENERIC AND DESCRIPTIVE.

Based on this Home Registration, The "Big Mac" mark, which should be treated in its entirety
McDonald's applied for the registration of and not dissected word for word, is neither generic nor
the same mark in the Principal Register of descriptive. Generic marks are commonly used as the name
the then Philippine Bureau of Patents, or description of a kind of goods, such as "Lite" for beer.
Trademarks and Technology ("PBPTT") (now Descriptive marks, on the other hand, convey the
IPO). On 18 July 1985, the PBPTT allowed characteristics, functions, qualities or ingredients of a
registration of the "Big Mac." product to one who has never seen it or does not know it
exists, such as "Arthriticare" for arthritis medication. On the
Respondent L.C. Big Mak Burger, Inc. is a contrary, "Big Mac" falls under the class of fanciful or
domestic corporation which operates fast- arbitrary marks as it bears no logical relation to the actual
food outlets and snack vans in Metro characteristics of the product it represents. As such, it is
Manila and nearby provinces. Respondent highly distinctive and thus valid.
corporation's menu includes hamburger
sandwiches and other food items. 2ND ELEMENT: PLAINTIFFS OWNERSHIP OF THE MARK

On 21 October 1988, respondent Petitioners have duly established McDonald's exclusive


corporation applied with the PBPTT for the ownership of the "Big Mac" mark. Prior valid registrants of
registration of the "Big Mak" mark for its the said mark had already assigned his rights to McDonald's.
hamburger sandwiches, which was 3RD ELEMENT: THE USE OF THE MARK OR ITS
opposed by McDonald's. McDonald's also COLORABLE IMITATION BY THE ALLEGED INFRINGER
informed LC Big Mak chairman of its RESULTS IN "LIKELIHOOD OF CONFUSION."
exclusive right to the "Big Mac" mark and
requested him to desist from using the "Big Section 22 covers two types of confusion arising from the use
Mac" mark or any similar mark. of similar or colorable imitation marks, namely, confusion of
goods (confusion in which the ordinarily prudent purchaser
Having received no reply, petitioners sued would be induced to purchase one product in the belief that
L.C. Big Mak Burger, Inc. and its directors he was purchasing the other) and confusion of business
before Makati RTC Branch 137 ("RTC"), for (though the goods of the parties are different, the
trademark infringement and unfair defendant's product is such as might reasonably be assumed
competition. to originate with the plaintiff, and the public would then be
deceived either into that belief or into the belief that there is
RTC rendered a Decision finding respondent some connection between the plaintiff and defendant which,
corporation liable for trademark in fact, does not exist).
infringement and unfair competition. CA
reversed RTC's decision on appeal. There is confusion of goods in this case since
respondents used the "Big Mak" mark on the same
goods, i.e. hamburger sandwiches, that petitioners'
"Big Mac" mark is used.

There is also confusion of business due to


Respondents' use of the "Big Mak" mark in the sale of
hamburgers, the same business that petitioners are
engaged in, also results in confusion of business. The
registered trademark owner may use his mark on the

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same or similar products, in different segments of the


market, and at different price levels depending on
variations of the products for specific segments of the
market. The registered trademark owner enjoys
protection in product and market areas that are the
normal potential expansion of his business.

Furthermore, In determining likelihood of confusion, the SC


has relied on the dominancy test (similarity of the prevalent
features of the competing trademarks that might cause
confusion) over the holistic test (consideration of the entirety
of the marks as applied to the products, including the labels
and packaging).

Applying the dominancy test, Respondents' use of the


"Big Mak" mark results in likelihood of confusion.
Aurally the two marks are the same, with the first word of
both marks phonetically the same, and the second word of
both marks also phonetically the same. Visually, the two
marks have both two words and six letters, with the first
word of both marks having the same letters and the second
word having the same first two letters.

Lastly, since Section 22 only requires the less stringent


standard of "likelihood of confusion," Petitioners' failure to
present proof of actual confusion does not negate their claim
of trademark infringement.

2ND ISSUE: W/N RESPONDENTS COMMITTED


UNFAIR COMPETITION

Section 29 ("Section 29")73 of RA 166 defines unfair


competition, thus:

Any person who will employ deception or any other means


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

THE ESSENTIAL ELEMENTS OF AN ACTION FOR UNFAIR


COMPETITION ARE (1) CONFUSING SIMILARITY IN THE
GENERAL APPEARANCE OF THE GOODS, AND (2)
INTENT TO DECEIVE THE PUBLIC AND DEFRAUD A
COMPETITOR.

In the case at bar, Respondents have applied on their plastic


wrappers and bags almost the same words that petitioners
use on their styrofoam box. Further, Respondents' goods are
hamburgers which are also the goods of petitioners.
Moreover, there is actually no notice to the public that the
"Big Mak" hamburgers are products of "L.C. Big Mak Burger,
Inc." This clearly shows respondents' intent to deceive the
public.
38. Mirpuri vs. Court of Appeals Petitioner brings this action claiming that "Barbizon" products
and Barbizon Corporation (US have been sold in the Philippines since 1970. Petitioner
CORP) developed this market by working long hours and spending
BARBIZON and BEE DESIGN on considerable sums of money on advertisements and
wearing apparel, robes, promotion of the trademark and its products. Now, almost
pajamas, lingeres, nightgowns, thirty years later, private respondent, a foreign corporation,
slips "swaggers into the country like a conquering hero," usurps
the trademark and invades petitioner's market. Justice and
FACTS: Lolita Escobar applied with the fairness dictate that private respondent be prevented from

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DIWATA NOTES LIP
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Bureau of Patents for the registration of the appropriating what is not its own. Legally, at the same time,
trademark Barbizon, alleging that she private respondent is barred from questioning petitioner's
had been manufacturing and selling ownership of the trademark because of res judicata
these products since 1970.
1st ISSUE: WHETHER OR NOT THE DECISION OF
Private respondent Barbizon Corp opposed THE DIRECTOR OF PATENTS IN INTER PARTES
the application in IPC No. 686. The Bureau CASE NO. 686 RENDERED ON JUNE 18, 1974,
granted the application and a certificate of ANNEX C HEREOF, CONSTITUTED RES JUDICATA
registration was issued for the trademark IN SO FAR AS THE CASE BEFORE THE DIRECTOR
Barbizon. OF PATENTS IS CONCERNED

Escobar later assigned all her rights Literally, res judicata means a matter adjudged, a thing
and interest over the trademark to judicially acted upon or decided; a thing or matter settled by
petitioner Mirpuri. judgment. In res judicata, the judgment in the first action is
considered conclusive as to every matter offered and
In 1979, Escobar failed to file with the received therein, as to any other admissible matter which
Bureau the Affidavit of Use of the might have been offered for that purpose, and all other
trademark. Due to his failure, the Bureau matters that could have been adjudged therein.
cancelled the certificate of registration.
Escobar reapplied and Mirpuri also Res judicata is an absolute bar to a subsequent action
applied and this application was also for the same cause; and its requisites are: (a) the
opposed by private respondent in IPC former judgment or order must be final; (b) the
No. 2049, claiming that it adopted said judgment or order must be one on the merits; (c) it
trademark in 1933 and has been using it. It must have been rendered by a court having
obtained a certificate from the US Patent jurisdiction over the subject matter and parties; (d)
Office in 1934. Then in 1991, DTI cancelled there must be between the first and second actions,
petitioners registration and declared identity of parties, of subject matter and of causes of
private respondent the owner and prior action.
user of the business name Barbizon
International. The Solicitor General, on behalf of respondent Director of
Patents, has joined cause with petitioner. Both claim that all
OPPOSITION OF BARBIZON CONTAINS: the four elements of res judicata have been complied with:
that the judgment in IPC No. 686 was final and was rendered
In IPC No. 2049, private respondent's by the Director of Patents who had jurisdiction over the
opposition set forth several issues subject matter and parties; that the judgment in IPC No. 686
summarized as follows: was on the merits; and that the lack of a hearing was
immaterial because substantial issues were raised by the
(a) as early as 1933, it adopted the word parties and passed upon by the Director of Patents.
"BARBIZON" as trademark on its products
such as robes, pajamas, lingerie, The judgment in IPC No. 686 being on the merits,
nightgowns and slips; petitioner and the Solicitor General allege that IPC No.
686 and IPC No. 2049 also comply with the fourth
(b) that the trademark "BARBIZON" was requisite of res judicata, i.e., they involve the same
registered with the United States Patent parties and the same subject matter, and have
Office in 1934 and 1949; and that identical causes of action.
variations of the same trademark, i.e.,
"BARBIZON" with Bee design and Undisputedly, IPC No. 686 and IPC No. 2049 involve the same
"BARBIZON" with the representation of a parties and the same subject matter. Petitioner herein is the
woman were also registered with the U.S. assignee of Escobar while private respondent is the same
Patent Office in 1961 and 1976; American corporation in the first case. The subject matter of
both cases is the trademark "Barbizon." Private respondent
(c) that these marks have been in use in counter-argues, however, that the two cases do not have
the Philippines and in many countries all identical causes of action. New causes of action were
over the world for over forty years. allegedly introduced in IPC No. 2049, such as the prior use
"Barbizon" products have been advertised and registration of the trademark in the United States and
in international publications and the marks other countries worldwide, prior use in the Philippines, and
registered in 36 countries worldwide; the fraudulent registration of the mark in violation of Article
189 of the Revised Penal Code. Private respondent also cited
(d) Escobar's registration of the similar protection of the trademark under the Convention of Paris for
trademark "BARBIZON" in 1974 was based the Protection of Industrial Property, specifically Article 6bis
on fraud; and this fraudulent registration thereof, and the implementation of Article 6bis by two
was cancelled in 1979, stripping Escobar of Memoranda dated November 20, 1980 and October 25, 1983
whatsoever right she had to the said mark; of the Minister of Trade and Industry to the Director of
Patents, as well as Executive Order (E.O.) No. 913.
(e) Private respondent's trademark is

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entitled to protection as a well-known mark SUPREME COURT:


under Article 6bis of the Paris Convention,
Executive Order No. 913, and the two In the instant case, the issue of ownership of the
Memoranda dated November 20, 1980 and trademark "Barbizon" was not raised in IPC No. 686.
October 25, 1983 of the Minister of Trade Private respondent's opposition therein was merely
and Industry to the Director of Patents; anchored on:

(f) Escobar's trademark is identical to a) "confusing similarity" of its trademark with


private respondent's and its use on the that of Escobar's;
same class of goods as the latter's b) That the registration of Escobar's similar
amounts to a violation of the Trademark trademark will cause damage to private
Law and Article 189 of the Revised Penal respondent's business reputation and
Code. goodwill; and
c) That Escobar's use of the trademark amounts
REPLYING TO PRIVATE RESPONDENT'S to an unlawful appropriation of a mark
OPPOSITION, PETITIONER RAISED THE previously used in the Philippines which act is
DEFENSE OF RES JUDICATA. penalized under Section 4 (d) of the Trademark
Law.
On March 2, 1982, Escobar assigned to
petitioner the use of the business name In IPC No. 2049, private respondent's opposition set
"Barbizon International." Petitioner forth several issues summarized as follows:
registered the name with the Department
of Trade and Industry (DTI) for which a a) As early as 1933, it adopted the word "BARBIZON"
certificate of registration was issued in as trademark on its products such as robes,
1987. pajamas, lingerie, nightgowns and slips;
b) That the trademark "BARBIZON" was registered with
Forthwith, private respondent filed before the United States Patent Office in 1934 and 1949;
the Office of Legal Affairs of the DTI a and that variations of the same trademark, i.e.,
petition for cancellation of petitioner's "BARBIZON" with Bee design and "BARBIZON" with
business name. the representation of a woman were also registered
with the U.S. Patent Office in 1961 and 1976;
On November 26, 1991, the DTI, Office of c) That these marks have been in use in the Philippines
Legal Affairs, cancelled petitioner's and in many countries all over the world for over
certificate of registration, and declared forty years. "Barbizon" products have been
private respondent the owner and prior advertised in international publications and the
user of the business name "Barbizon marks registered in 36 countries worldwide;
International." d) Escobar's registration of the similar trademark
"BARBIZON" in 1974 was based on fraud; and this
fraudulent registration was cancelled in 1979,
stripping Escobar of whatsoever right she had to the
said mark;
e) Private respondent's trademark is entitled to
protection as a well-known mark under Article 6bis
of the Paris Convention, Executive Order No. 913,
and the two Memoranda dated November 20, 1980
and October 25, 1983 of the Minister of Trade and
Industry to the Director of Patents;
f) Escobar's trademark is identical to private
respondent's and its use on the same class of goods
as the latter's amounts to a violation of the
Trademark Law and Article 189 of the Revised Penal
Code.

IPC No. 2049 raised the issue of ownership of the trademark,


the first registration and use of the trademark in the United
States and other countries, and the international recognition
and reputation of the trademark established by extensive
use and advertisement of private respondent's products for
over forty years here and abroad. These are different from
the issues of confusing similarity and damage in IPC No. 686.
The issue of prior use may have been raised in IPC No. 686
but this claim was limited to prior use in the Philippines only.
Prior use in IPC No. 2049 stems from private respondent's
claim as originator of the word and symbol "Barbizon," as the
first and registered user of the mark attached to its products

15
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which have been sold and advertised worldwide for a


considerable number of years prior to petitioner's first
application for registration of her trademark in the
Philippines. Indeed, these are substantial allegations that
raised new issues and necessarily gave private respondent a
new cause of action. Res judicata does not apply to
rights, claims or demands, although growing out of
the same subject matter, which constitute separate or
distinct causes of action and were not put in issue in
the former action.

Respondent corporation also introduced in the second case a


fact that did not exist at the time the first case was filed and
terminated. The cancellation of petitioner's certificate of
registration for failure to file the affidavit of use arose only
after IPC No. 686. It did not and could not have occurred in
the first case, and this gave respondent another cause to
oppose the second application. Res judicata extends only to
facts and conditions, as they existed at the time judgment
was rendered and to the legal rights and relations of the
parties fixed by the facts so determined. When new facts
or conditions intervene before the second suit,
furnishing a new basis for the claims and defenses of
the parties, the issues are no longer the same, and
the former judgment cannot be pleaded as a bar to
the subsequent action.

It is also noted that the oppositions in the first and second


cases are based on different laws. The opposition in IPC No.
686 was based on specific provisions of the Trademark Law,
i.e., Section 4 (d) on confusing similarity of trademarks and
Section 8 on the requisite damage to file an opposition to a
petition for registration. The opposition in IPC No. 2049
invoked the Paris Convention, particularly Article 6bis
thereof, E.O. No. 913 and the two Memoranda of the Minister
of Trade and Industry. This opposition also invoked Article
189 of the Revised Penal Code which is a statute totally
different from the Trademark Law. CAUSES OF ACTION
WHICH ARE DISTINCT AND INDEPENDENT FROM EACH
OTHER, ALTHOUGH ARISING OUT OF THE SAME
CONTRACT, TRANSACTION, OR STATE OF FACTS, MAY
BE SUED ON SEPARATELY, RECOVERY ON ONE BEING
NO BAR TO SUBSEQUENT ACTIONS ON OTHERS. THE
MERE FACT THAT THE SAME RELIEF IS SOUGHT IN THE
SUBSEQUENT ACTION WILL NOT RENDER THE
JUDGMENT IN THE PRIOR ACTION OPERATIVE AS RES
JUDICATA, SUCH AS WHERE THE TWO ACTIONS ARE
BASED ON DIFFERENT STATUTES. RES JUDICATA
THEREFORE DOES NOT APPLY TO THE INSTANT CASE
AND RESPONDENT COURT OF APPEALS DID NOT ERR
IN SO RULING.
39. Superior Commercial Trademark; right to file action for infringement.
Enterprises vs. Kunnan
Enterprises Section 22 of RA 166 states that only a registrant of a mark
can file a case for infringement. Corollary to this, Section 19
FACTS: On February 23, 1993, SUPERIOR of RA 166 provides that any right conferred upon the
filed a complaint for trademark registrant under the provisions of RA 166 terminates when
infringement and unfair competition with the judgment or order of cancellation has become final. The
preliminary injunction against KUNNAN and cancellation of registration of a trademark has the effect of
SPORTS CONCEPT depriving the registrant of protection from infringement from
the moment judgment or order of cancellation has become
final.

In the present case, by operation of law, specifically


Section 19 of RA 166, the trademark infringement aspect of

16
DIWATA NOTES LIP
ATTY. ALARILLA

SUPERIORs case has been rendered moot and academic in


view of the finality of the decision in the Registration
Cancellation Case. In short, SUPERIOR is left without any
cause of action for trademark infringement since the
cancellation of registration of a trademark deprived it
of protection from infringement from the moment
judgment or order of cancellation became final. To be
sure, in a trademark infringement, title to the
trademark is indispensable to a valid cause of action
and such title is shown by its certificate of
registration. With its certificates of registration over the
disputed trademarks effectively cancelled with finality,
SUPERIORs case for trademark infringement lost its legal
basis and no longer presented a valid cause of action.
40. Emerald Garment Issue: Whether or not the CA erred in ruling that the defense
Manufacturing vs. CA of estoppels by laches must be raised in the proceedings
(STYLISTIC MR. LEE; TEST OF before the Bureau of Patents, trademarks and technology
DOMINANCY) transfer.

FACTS: On September 18, 198, private Held: Premises considered, the questioned decision and
respondent H.D. Lee Co., Inc, a foreign resolution are reversed and set aside.
corporation organized under the laws of
Delaware, USA filed with the Bureau of For lack of adequate proof of actual use of its trademark in
Patents, Trademarks & Technology a the Philippines prior to petitioner's use of its own mark and
Petition for Cancellation of Registraion No. for failure to establish confusing similarity between said
SR 5054 for the trademark Stylistic Mr. Lee trademarks, private respondent's action for infringement
used on skirts, jeans, blouses, socks, briefs, must necessarily fail.
jackets, jogging suits, dresses, shorts,
shirts and lingerie under Class 25, issued IN THE CASE AT BENCH, HOWEVER, WE REVERSE THE
on October 27 1980 in the name of FINDINGS OF THE DIRECTOR OF PATENTS AND THE
petitioner Emerald Garment Manufacturing COURT OF APPEALS. AFTER A METICULOUS STUDY OF
Corporation, a domestic corporation THE RECORDS, WE OBSERVE THAT THE DIRECTOR OF
organized and existing under Philippine PATENTS AND THE COURT OF APPEALS RELIED MAINLY
laws. ON THE REGISTRATION CERTIFICATES AS PROOF OF
USE BY PRIVATE RESPONDENT OF THE TRADEMARK
Private respondent invoking Sec 37 of RA "LEE" WHICH, AS WE HAVE PREVIOUSLY DISCUSSED
No. 166 (Trademark Law) and Art VIII of the ARE NOT SUFFICIENT. WE CANNOT GIVE CREDENCE TO
Paris Convention for the Protection of PRIVATE RESPONDENT'S CLAIM THAT ITS "LEE" MARK
Industrial Property, averred that FIRST REACHED THE PHILIPPINES IN THE 1960'S
petitioners trademark so closely THROUGH LOCAL SALES BY THE POST EXCHANGES OF
resembled its own trademark, LEE as THE U.S. MILITARY BASES IN THE PHILIPPINES BASED
previously registered and used in the AS IT WAS SOLELY ON THE SELF-SERVING STATEMENTS
Philippines, and not abandoned, as to be OF MR. EDWARD POSTE, GENERAL MANAGER OF LEE
likely, when applied to or used in (PHILS.), INC., A WHOLLY OWNED SUBSIDIARY OF THE
connection with petitioners goods, to H.D. LEE, CO., INC., U.S.A., HEREIN PRIVATE
cause confusion, mistake and deception on RESPONDENT.
the part of the purchasing public as to the
origin of the goods. The determination as to who is the prior user of the
trademark is a question of fact and it is this Court's working
Petitioner contended that its trademark principle not to disturb the findings of the Director of Patents
was entirely and unmistakably different on this issue in the absence of any showing of grave abuse of
from that of private respondent and that its discretion. The findings of facts of the Director of Patents are
certificate of registration was legally and conclusive upon the Supreme Court provided they are
validly granted. supported by substantial evidence.

Petitioner caused the publication of its


application for registration of the
trademark STYLISTIC MR. LEE in the
Principal Register.

Private respondent filed a notice of


opposition to petitioners application for
registration also on grounds that
petitioners trademark was confusingly
similar to its LEE trademark.

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DIWATA NOTES LIP
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The Director of Patents rendered a decision


granting private respondents petitioner for
cancellation and opposition to registration.

Moreover, the Director of Patents, using the


test of dominancy, declared that
petitioners trademark was confusingly
similar to private respondents mark
because it is the word Lee which draws
the attention of the buyer and leads him to
conclude that the goods originated from
the same manufacturer. It is undeniably the
dominant feature of the mark.

Petitioner appealed to the CA and on


August 8, 1988, it filed with the BPTTT a
Motion to Stay Execution of the 19 July
1988 decision of the Director of Patents on
grounds that the same would cause it great
and irreparable damage and injury. Private
respondent submitted its opposition on
August 22, 1988.

The CA promulgated its decision affirming


the decision of the Director of Patents.
Petitioner filed a motion for
reconsideration. The CA issued a resolution
rejecting petitioners motion for
reconsideration.

41. Skechers USA vs. Interpacific ISSUE: DID THE ACCUSED COMMIT TRADEMARK
Industrial Trading Corp. INFRINGEMENT?

Skechers filed a criminal case for Yes, the accused is guilty of trademark infringement.
trademark infringement against several
store-owners that were selling shoes Under the IP Code (RA No. 8293), trademark infringement is
branded as Strong and bearing a similar committed when:
S logo. The Regional Trial Court (RTC) Remedies; Infringement. Any person who shall, without the
issued search warrants, allowing the consent of the owner of the registered mark:
National Bureau of Investigation (NBI) to
raid the stores and confiscate 6,000 pairs 155.1. Use in commerce any reproduction, counterfeit, copy, or
of shoes. colorable imitation of a registered mark or the same container or
a dominant feature thereof in connection with the sale, offering
for sale, distribution, advertising of any goods or services
The accused moved to quash the warrants,
including other preparatory steps necessary to carry out the sale
saying that there was no confusing of any goods or services on or in connection with which such use
similarity between the Skechers and the is likely to cause confusion, or to cause mistake, or to deceive;
Strong brands. or

The RTC granted the motion to quash and 155.2. Reproduce, counterfeit, copy or colorably imitate a
ordered the NBI to return the seized goods. registered mark or a dominant feature thereof and apply such
The court said that the two brands had reproduction, counterfeit, copy or colorable imitation to labels,
glaring differences and that an ordinary signs, prints, packages, wrappers, receptacles or advertisements
prudent consumer would not mistake one intended to be used in commerce upon or in connection with the
for the other. sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to
On certiorari, the Court of Appeals (CA) cause confusion, or to cause mistake, or to deceive, shall be
affirmed the RTC ruling. liable in a civil action for infringement by the registrant for the
remedies hereinafter set forth: Provided, That the infringement
The matter was elevated to the Supreme takes place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of whether
Court (SC).
there is actual sale of goods or services using the infringing

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material. (emphasis supplied)

There is trademark infringement when the second


mark used is likely to cause confusion. There are two
tests to determine this:

1. Dominancy Test the court focuses on the


similarity of the dominant features of the
marks that might cause confusion in the mind
of the consumer. Duplication or imitation is not
necessary. Even accidental confusion may be
cause for trademark infringement. More
consideration is given to the aural and visual
impressions created by the marks on the
buyers and less weight is given to factors like
price, quality, sales outlets and market
segments.

Applied to this case: The SC found that the use of the S


symbol by Strong rubber shoes infringes on the registered
Skechers trademark. It is the most dominant feature of the
mark -- one that catches the buyers eye first. Even if the
accused claims that there was a difference because the S
used by Skechers is found inside an oval, the fact that the
accused used the dominant S symbol already constitutes
trademark infringement.

The SC disagreed with the CA reasoning that the S symbol


is already used for many things, including the Superman
symbol. Even if this is true, the fact that Strong used same
stylized S symbol as that of the Skechers brand makes this
a case of trademark infringement. The same font and style
was used in this case. The Superman S symbol is clearly
different from the S in this case.

2. Holistic or Totality Test the court looks at the


entirety of the marks as applied to the
products, including the labels and packaging.
You must not only look at the dominant
features but all other features appearing on
both marks.

Applied to this case: Both RTC and CA used the


Holistic Test to rule that there was no infringement.
Both courts argued the following differences:
The mark S found in Strong Shoes is not
enclosed in an oval design.
The word Strong is conspicuously placed at
the backside and insoles.
The hang tags and labels attached to the
shoes bears the word Strong for respondent
and Skechers U.S.A. for private
complainant;
Strong shoes are modestly priced compared to
the costs of Skechers Shoes.

Also using the Holistic Test, the SC corrected the


lower courts and ruled that the striking similarities
between the products outweigh the differences
argued by the respondents:
a) Same color scheme of blue, white and gray;
b) Same wave-like pattern on the midsole and the
outer sole;
c) Same elongated designs at the side of the midsole

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near the heel;


d) Same number of ridges on the outer soles (five at
the back and six in front);
e) Same location of the stylized S symbol;
f) The words "Skechers Sport Trail" at the back of the
Skechers shoes and "Strong Sport Trail" at the back
of the Strong shoes, using the same font, color, size,
direction and orientation;
g) Same two grayish-white semi-transparent circles on
top of the heel collars.
h) The features and overall design of the two products
are so similar that there is a high likelihood of
confusion.
i) Two products do not need to be identical, they just
need to be similar enough to confuse the ordinary
buyer in order to constitute trademark infringement
(Converse Rubber Corporation v. Jacinto Rubber &
Plastic Co., 186 Phil. 85 [1980]). Also, the difference
in price cannot be a defense in a case for trademark
infringement (McDonalds Corporation v. L.C. Big
Mak Burger, Inc., 480 Phil. 402, 434 [2004]).

There are two types of confusion:


Product Confusion where the ordinary prudent purchaser
would be induced to purchase on product in the belief that
he was buying another.

Source or Origin Confusion although the goods are


different, the use of the mark causes the consumer to
assume that both products originate from the same source.

Trademark law protects the owner not only from product


confusion but also from source confusion. Protection is not
limited to the same or similar products but extends to
all cases where:
The consumer is misled into thinking that the
trademark owner extended his business into a new
field;
The consumer is misled into thinking that the
trademark owner is in any way connected to the
infringers activities; or
The infringement forestalls the normal potential
expansion of the trademark owners business.

Trademark law does not only protect the owners


reputation and goodwill, it also protects the
consumers from fraud and confusion.
In this case, it is clear that there was an attempt to
copy the trademark owners mark and product design.
In trademark infringement cases, you do not need to
copy another's mark or product exactly. Colorable
imitation is enough.

Republic of the Philippines


Supreme Court
Baguio City

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SECOND DIVISION

SUPERIOR COMMERCIAL ENTERPRISES, INC.,


Petitioner,

- versus -

KUNNAN ENTERPRISES LTD. AND SPORTS CONCEPT & DISTRIBUTOR, INC.,


Respondents. -- -
G.R. No. 169974

Present:

CARPIO, J., Chairperson,


BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.

Promulgated:
April 20, 2010

x-----------------------------------------------------------------------------------------x

DECISION

BRION, J.:

We review in this petition for review on certiorari[1] the (1) decision[2] of the Court of
Appeals (CA) in CA-G.R. CV No. 60777 that reversed the ruling of the Regional Trial Court of
Quezon City, Branch 85 (RTC),[3] and dismissed the petitioner Superior Commercial
Enterprises, Inc.s (SUPERIOR) complaint for trademark infringement and unfair competition
(with prayer for preliminary injunction) against the respondents Kunnan Enterprises Ltd.
(KUNNAN) and Sports Concept and Distributor, Inc. (SPORTS CONCEPT); and (2) the CA
resolution[4] that denied SUPERIORs subsequent motion for reconsideration. The RTC
decision that the CA reversed found the respondents liable for trademark infringement and
unfair competition, and ordered them to pay SUPERIOR P2,000,000.00 in damages,
P500,000.00 as attorneys fees, and costs of the suit.

THE FACTUAL ANTECEDENTS

On February 23, 1993, SUPERIOR[5] filed a complaint for trademark infringement and unfair
competition with preliminary injunction against KUNNAN[6] and SPORTS CONCEPT[7] with
the RTC, docketed as Civil Case No. Q-93014888.

In support of its complaint, SUPERIOR first claimed to be the owner of the trademarks,
trading styles, company names and business names[8] KENNEX,[9] KENNEX & DEVICE,[10]
PRO KENNEX[11] and PRO-KENNEX (disputed trademarks).[12] Second, it also asserted its

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prior use of these trademarks, presenting as evidence of ownership the Principal and
Supplemental Registrations of these trademarks in its name. Third, SUPERIOR also alleged
that it extensively sold and advertised sporting goods and products covered by its
trademark registrations. Finally, SUPERIOR presented as evidence of its ownership of the
disputed trademarks the preambular clause of the Distributorship Agreement dated October
1, 1982 (Distributorship Agreement) it executed with KUNNAN, which states:

Whereas, KUNNAN intends to acquire the ownership of KENNEX trademark registered by the
[sic] Superior in the Philippines. Whereas, the [sic] Superior is desirous of having been
appointed [sic] as the sole distributor by KUNNAN in the territory of the Philippines.
[Emphasis supplied.][13]

In its defense, KUNNAN disputed SUPERIORs claim of ownership and maintained that
SUPERIOR as mere distributor from October 6, 1982 until December 31, 1991 fraudulently
registered the trademarks in its name. KUNNAN alleged that it was incorporated in 1972,
under the name KENNEX Sports Corporation for the purpose of manufacturing and selling
sportswear and sports equipment; it commercially marketed its products in different
countries, including the Philippines since 1972.[14] It created and first used PRO KENNEX,
derived from its original corporate name, as a distinctive trademark for its products in 1976.
KUNNAN also alleged that it registered the PRO KENNEX trademark not only in the
Philippines but also in 31 other countries, and widely promoted the KENNEX and PRO
KENNEX trademarks through worldwide advertisements in print media and sponsorships of
known tennis players.

On October 1, 1982, after the expiration of its initial distributorship agreement with another
company,[15] KUNNAN appointed SUPERIOR as its exclusive distributor in the Philippines
under a Distributorship Agreement whose pertinent provisions state:[16]

Whereas, KUNNAN intends to acquire ownership of KENNEX trademark registered by the


Superior in the Philippines. Whereas, the Superior is desirous of having been appointed [sic]
as the sole distributor by KUNNAN in the territory of the Philippines.

Now, therefore, the parties hereto agree as follows:

1. KUNNAN in accordance with this Agreement, will appoint the sole distributorship right
to Superior in the Philippines, and this Agreement could be renewed with the consent of
both parties upon the time of expiration.

2. The Superior, in accordance with this Agreement, shall assign the ownership of
KENNEX trademark, under the registration of Patent Certificate No. 4730 dated 23 May 1980
to KUNNAN on the effects [sic] of its ten (10) years contract of distributorship, and it is
required that the ownership of the said trademark shall be genuine, complete as a whole
and without any defects.

3. KUNNAN will guarantee to the Superior that no other third parties will be permitted to
supply the KENNEX PRODUCTS in the Philippines except only to the Superior. If KUNNAN
violates this stipulation, the transfer of the KENNEX trademark shall be null and void.

4. If there is a necessity, the Superior will be appointed, for the protection of interest of
both parties, as the agent in the Philippines with full power to exercise and granted the
power of attorney, to pursue any case of Pirating, Infringement and Counterfeiting the [sic]
KENNEX trade mark in the Philippine territory.

5. The Superior will be granted from [sic] KUNNANs approval before making and selling
any KENNEX products made in the Philippines and the other countries, and if this is the
situation, KUNNAN is entitled to have a royalty of 5%-8% of FOB as the right.

6. Without KUNNANs permission, the Superior cannot procure other goods supply under
KENNEX brand of which are not available to supply [sic] by KUNNAN. However, in connection

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DIWATA NOTES LIP
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with the sporting goods, it is permitted that the Superior can procure them under KENNEX
brand of which are not available to be supplied by KUNNAN. [Emphasis supplied.]

Even though this Agreement clearly stated that SUPERIOR was obligated to assign the
ownership of the KENNEX trademark to KUNNAN, the latter claimed that the Certificate of
Registration for the KENNEX trademark remained with SUPERIOR because Mariano Tan Bon
Diong (Mr. Tan Bon Diong), SUPERIORs President and General Manager, misled KUNNANs
officers into believing that KUNNAN was not qualified to hold the same due to the many
requirements set by the Philippine Patent Office that KUNNAN could not meet.[17] KUNNAN
further asserted that SUPERIOR deceived it into assigning its applications for registration of
the PRO KENNEX trademark in favor of SUPERIOR, through an Assignment Agreement dated
June 14, 1983 whose pertinent provisions state:[18]

1. In consideration of the distributorship relationship between KUNNAN and


Superior, KUNNAN, who is the seller in the distributorship relationship, agrees to assign the
following trademark applications owned by itself in the Philippines to Superior who is the
buyer in the distributorship relationship.

Trademark Application Number Class

PROKENNEX 49999 28
PROKENNEX 49998 25
PROKENNEX 49997 18

2. Superior shall acknowledge that KUNNAN is still the real and truthful owner of
the abovementioned trademarks, and shall agree that it will not use the right of the
abovementioned trademarks to do anything which is unfavourable or harmful to KUNNAN.

3. Superior agrees that it will return back the abovementioned trademarks to


KUNNAN without hesitation at the request of KUNNAN at any time. KUNNAN agrees that the
cost for the concerned assignment of the abovementioned trademarks shall be
compensated by KUNNAN.

4. Superior agrees that the abovementioned trademarks when requested by


KUNNAN shall be clean and without any incumbency.

5. Superior agrees that after the assignment of the abovementioned trademarks,


it shall have no right to reassign or license the said trademarks to any other parties except
KUNNAN. [Emphasis supplied]

Prior to and during the pendency of the infringement and unfair competition case before the
RTC, KUNNAN filed with the now defunct Bureau of Patents, Trademarks and Technology
Transfer[19] separate Petitions for the Cancellation of Registration Trademark Nos. 41032,
SR 6663, 40326, 39254, 4730 and 49998, docketed as Inter Partes Cases Nos. 3709, 3710,
3811, 3812, 3813 and 3814, as well as Opposition to Application Serial Nos. 84565 and
84566, docketed as Inter Partes Cases Nos. 4101 and 4102 (Consolidated Petitions for
Cancellation) involving the KENNEX and PRO KENNEX trademarks.[20] In essence, KUNNAN
filed the Petition for Cancellation and Opposition on the ground that SUPERIOR fraudulently
registered and appropriated the disputed trademarks; as mere distributor and not as lawful
owner, it obtained the registrations and assignments of the disputed trademarks in violation
of the terms of the Distributorship Agreement and Sections 2-A and 17 of Republic Act No.
166, as amended.[21]
On December 3, 1991, upon the termination of its distributorship agreement with
SUPERIOR, KUNNAN appointed SPORTS CONCEPT as its new distributor. Subsequently,
KUNNAN also caused the publication of a Notice and Warning in the Manila Bulletins January
29, 1993 issue, stating that (1) it is the owner of the disputed trademarks; (2) it terminated
its Distributorship Agreement with SUPERIOR; and (3) it appointed SPORTS CONCEPT as its
exclusive distributor. This notice prompted SUPERIOR to file its Complaint for Infringement of
Trademark and Unfair Competition with Preliminary Injunction against KUNNAN.[22]

The RTC Ruling

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On March 31, 1998, the RTC issued its decision[23] holding KUNNAN liable for trademark
infringement and unfair competition. The RTC also issued a writ of preliminary injunction
enjoining KUNNAN and SPORTS CONCEPT from using the disputed trademarks.

The RTC found that SUPERIOR sufficiently proved that it was the first user and owner of the
disputed trademarks in the Philippines, based on the findings of the Director of Patents in
Inter Partes Case No. 1709 and 1734 that SUPERIOR was rightfully entitled to register the
mark KENNEX as user and owner thereof. It also considered the Whereas clause of the
Distributorship Agreement, which categorically stated that KUNNAN intends to acquire
ownership of [the] KENNEX trademark registered by SUPERIOR in the Philippines. According
to the RTC, this clause amounts to KUNNANs express recognition of SUPERIORs ownership of
the KENNEX trademarks.[24]
KUNNAN and SPORTS CONCEPT appealed the RTCs decision to the CA where the appeal was
docketed as CA-G.R. CV No. 60777. KUNNAN maintained that SUPERIOR was merely its
distributor and could not be the owner of the disputed trademarks. SUPERIOR, for its part,
claimed ownership based on its prior use and numerous valid registrations.

Intervening Developments:
The IPO and CA Rulings

In the course of its appeal to the CA, KUNNAN filed on December 19, 2003 a Manifestation
and Motion praying that the decision of the Bureau of Legal Affairs (BLA) of the Intellectual
Property Office (IPO), dated October 30, 2003, in the Consolidated Petitions for Cancellation
be made of record and be considered by the CA in resolving the case.[25] The BLA ruled in
this decision

In the case at bar, Petitioner-Opposer (Kunnan) has overwhelmingly and convincingly


established its rights to the mark PRO KENNEX. It was proven that actual use by
Respondent-Registrant is not in the concept of an owner but as a mere distributor (Exhibits
I, S to S-1, P and P-1 and Q and Q-2) and as enunciated in the case of Crisanta Y. Gabriel vs.
Dr. Jose R. Perez, 50 SCRA 406, a mere distributor of a product bearing a trademark, even if
permitted to use said trademark has no right to and cannot register the said trademark.

WHEREFORE, there being sufficient evidence to prove that the Petitioner-Opposer (KUNNAN)
is the prior user and owner of the trademark PRO-KENNEX, the consolidated Petitions for
Cancellation and the Notices of Opposition are hereby GRANTED. Consequently, the
trademark PRO-KENNEX bearing Registration Nos. 41032, 40326, 39254, 4730, 49998 for
the mark PRO-KENNEX issued in favor of Superior Commercial Enterprises, Inc., herein
Respondent-Registrant under the Principal Register and SR No. 6663 are hereby
CANCELLED. Accordingly, trademark application Nos. 84565 and 84566, likewise for the
registration of the mark PRO-KENNEX are hereby REJECTED.

Let the file wrappers of PRO-KENNEX subject matter of these cases be forwarded to the
Administrative Finance and Human Resources Development Services Bureau (AFHRDSB) for
appropriate action in accordance with this Decision and a copy thereof be furnished the
Bureau of Trademarks (BOT) for information and update of its record.[26]

On February 4, 2005, KUNNAN again filed another Manifestation requesting that the IPO
Director Generals decision on appeal dated December 8, 2004, denying SUPERIORs appeal,
be given weight in the disposition of the case.[27] The dispositive portion of the decision
reads:[28]

WHEREFORE, premises considered, there is no cogent reason to disturb Decision No. 2003-
35 dated 30 October 2003 rendered by the Director of the Bureau of Legal Affairs.
Accordingly, the instant appeal is DENIED and the appealed decision is hereby AFFIRMED.

We take judicial notice that SUPERIOR questioned the IPO Director Generals ruling before
the Court of Appeals on a petition for review under Rule 43 of the Rules of Court, docketed

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DIWATA NOTES LIP
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as CAG.R. SP No. 87928 (Registration Cancellation Case). On August 30, 2007, the CA
rendered its decision dismissing SUPERIORs petition.[29] On December 3, 2007, the CA
decision was declared final and executory and entry of judgment was accordingly made.
Hence, SUPERIORs registration of the disputed trademarks now stands effectively cancelled.
The CA Ruling

On June 22, 2005, the CA issued its decision in CA-G.R. CV No. 60777, reversing and setting
aside the RTCs decision of March 31, 1998.[30] It dismissed SUPERIORs Complaint for
Infringement of Trademark and Unfair Competition with Preliminary Injunction on the ground
that SUPERIOR failed to establish by preponderance of evidence its claim of ownership over
the KENNEX and PRO KENNEX trademarks. The CA found the Certificates of Principal and
Supplemental Registrations and the whereas clause of the Distributorship Agreement
insufficient to support SUPERIORs claim of ownership over the disputed trademarks.

The CA stressed that SUPERIORs possession of the aforementioned Certificates of Principal


Registration does not conclusively establish its ownership of the disputed trademarks as
dominion over trademarks is not acquired by the fact of registration alone;[31] at best,
registration merely raises a presumption of ownership that can be rebutted by contrary
evidence.[32] The CA further emphasized that the Certificates of Supplemental Registration
issued in SUPERIORs name do not even enjoy the presumption of ownership accorded to
registration in the principal register; it does not amount to a prima facie evidence of the
validity of registration or of the registrants exclusive right to use the trademarks in
connection with the goods, business, or services specified in the certificate.[33]
In contrast with the failure of SUPERIORs evidence, the CA found that KUNNAN presented
sufficient evidence to rebut SUPERIORs presumption of ownership over the trademarks.
KUNNAN established that SUPERIOR, far from being the rightful owner of the disputed
trademarks, was merely KUNNANs exclusive distributor. This conclusion was based on three
pieces of evidence that, to the CA, clearly established that SUPERIOR had no proprietary
interest over the disputed trademarks.

First, the CA found that the Distributorship Agreement, considered in its entirety, positively
confirmed that SUPERIOR sought to be the KUNNANs exclusive distributor. The CA based this
conclusion on the following provisions of the Distributorship Agreement:

(1) that SUPERIOR was desirous of [being] appointed as the sole distributor by KUNNAN in
the territory of the Philippines;

(2) that KUNNAN will appoint the sole distributorship right to Superior in the Philippines; and

(3) that no third parties will be permitted to supply KENNEX PRODUCTS in the Philippines
except only to Superior.

The CA thus emphasized that the RTC erred in unduly relying on the first whereas clause,
which states that KUNNAN intends to acquire ownership of [the] KENNEX trademark
registered by SUPERIOR in the Philippines without considering the entirety of the
Distributorship Agreement indicating that SUPERIOR had been merely appointed by KUNNAN
as its distributor.
Second, the CA also noted that SUPERIOR made the express undertaking in the Assignment
Agreement to acknowledge that KUNNAN is still the real and truthful owner of the [PRO
KENNEX] trademarks, and that it shall agree that it will not use the right of the
abovementioned trademarks to do anything which is unfavourable or harmful to KUNNAN. To
the CA, these provisions are clearly inconsistent with SUPERIORs claim of ownership of the
disputed trademarks. The CA also observed that although the Assignment Agreement was a
private document, its authenticity and due execution was proven by the similarity of Mr. Tan
Bon Diongs signature in the Distributorship Agreement and the Assignment Agreement.

Third, the CA also took note of SUPERIORs Letter dated November 12, 1986 addressed to
Brig. Gen. Jose Almonte, identifying itself as the sole and exclusive licensee and distributor
in the Philippines of all its KENNEX and PRO-KENNEX products. Attached to the letter was an
agreement with KUNNAN, identifying the latter as the foreign manufacturer of all KENNEX
products. The CA concluded that in this letter, SUPERIOR acknowledged its status as a
distributor in its dealings with KUNNAN, and even in its transactions with third persons.

25
DIWATA NOTES LIP
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Based on these reasons, the CA ruled that SUPERIOR was a mere distributor and had no
right to the registration of the disputed trademarks since the right to register a trademark is
based on ownership. Citing Section 4 of Republic Act No. 166[34] and established
jurisprudence,[35] the CA held that SUPERIOR as an exclusive distributor did not acquire any
proprietary interest in the principals (KUNNANs) trademark.

The CA denied SUPERIORs motion for reconsideration for lack of merit in its Resolution
dated October 4, 2005.

THE PETITION

In the present petition, SUPERIOR raises the following issues:

I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER SUPERIOR
IS NOT THE TRUE AND RIGHTFUL OWNER OF THE TRADEMARKS KENNEX AND PRO-KENNEX
IN THE PHILIPPINES

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT


PETITIONER SUPERIOR IS A MERE DISTRIBUTOR OF RESPONDENT KUNNAN IN THE
PHILIPPINES

III.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN REVERSING AND


SETTING ASIDE THE DECISION OF THE REGIONAL TRIAL COURT OF QUEZON CITY IN CIVIL
CASE NO. Q-93-14888, LIFTING THE PRELIMINARY INJUNCTION ISSUED AGAINST
RESPONDENTS KUNNAN AND SPORTS CONCEPT AND DISMISSING THE COMPLAINT FOR
INFRINGEMENT OF TRADEMARK AND UNFAIR COMPETITION WITH PRELIMINARY INJUNCTION

THE COURTS RULING

We do not find the petition meritorious.

On the Issue of Trademark Infringement

We first consider the effect of the final and executory decision in the Registration
Cancellation Case on the present case. This decision - rendered after the CA decision for
trademark infringement and unfair competition in CA-G.R. CV No. 60777 (root of the present
case) - states:
As to whether respondent Kunnan was able to overcome the presumption of ownership in
favor of Superior, the former sufficiently established the fraudulent registration of the
questioned trademarks by Superior. The Certificates of Registration No. SR-4730
(Supplemental Register) and 33487 (Principal Register) for the KENNEX trademark were
fraudulently obtained by petitioner Superior. Even before PROKENNEX products were
imported by Superior into the Philippines, the same already enjoyed popularity in various
countries and had been distributed worldwide, particularly among the sports and tennis
enthusiasts since 1976. Riding on the said popularity, Superior caused the registration
thereof in the Philippines under its name when it knew fully well that it did not own nor did it
manufacture the PROKENNEX products. Superior claimed ownership of the subject marks
and failed to disclose in its application with the IPO that it was merely a distributor of
KENNEX and PROKENNEX products in the Philippines.

26
DIWATA NOTES LIP
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While Superior accepted the obligation to assign Certificates of Registration Nos. SR-4730
and 33487 to Kunnan in exchange for the appointment by the latter as its exclusive
distributor, Superior however breached its obligation and failed to assign the same to
Kunnan. In a letter dated 13 February 1987, Superior, through Mr. Tan Bon Diong,
misrepresented to Kunnan that the latter cannot own trademarks in the Philippines. Thus,
Kunnan was misled into assigning to Superior its (Kunnans) own application for the disputed
trademarks. In the same assignment document, however. Superior was bound to ensure
that the PROKENNEX trademarks under Registration Nos. 40326, 39254, and 49998 shall be
returned to Kunnan clean and without any incumbency when requested by the latter.

In fine, We see no error in the decision of the Director General of the IPO which affirmed the
decision of the Director of the Bureau of Legal Affairs canceling the registration of the
questioned marks in the name of petitioner Superior and denying its new application for
registration, upon a finding that Superior is not the rightful owner of the subject marks.

WHEREFORE, the foregoing considered, the petition is DISMISSED.


The CA decided that the registration of the KENNEX and PRO KENNEX trademarks should be
cancelled because SUPERIOR was not the owner of, and could not in the first place have
validly registered these trademarks. Thus, as of the finality of the CA decision on December
3, 2007, these trademark registrations were effectively cancelled and SUPERIOR was no
longer the registrant of the disputed trademarks.

Section 22 of Republic Act No. 166, as amended (RA 166),[36] the law applicable to this
case, defines trademark infringement as follows:

Section 22. 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. [Emphasis supplied]

Essentially, Section 22 of RA 166 states that only a registrant of a mark can file a case for
infringement. Corollary to this, Section 19 of RA 166 provides that any right conferred upon
the registrant under the provisions of RA 166[37] terminates when the judgment or order of
cancellation has become final, viz:
Section 19. Cancellation of registration. - If the Director finds that a case for cancellation has
been made out he shall order the cancellation of the registration. The order shall not
become effective until the period for appeal has elapsed, or if appeal is taken, until the
judgment on appeal becomes final. When the order or judgment becomes final, any right
conferred by such registration upon the registrant or any person in interest of record shall
terminate. Notice of cancellation shall be published in the Official Gazette. [Emphasis
supplied.]

Thus, we have previously held that the cancellation of registration of a trademark has the
effect of depriving the registrant of protection from infringement from the moment
judgment or order of cancellation has become final.[38]

In the present case, by operation of law, specifically Section 19 of RA 166, the trademark
infringement aspect of SUPERIORs case has been rendered moot and academic in view of
the finality of the decision in the Registration Cancellation Case. In short, SUPERIOR is left
without any cause of action for trademark infringement since the cancellation of registration
of a trademark deprived it of protection from infringement from the moment judgment or
order of cancellation became final. To be sure, in a trademark infringement, title to the
trademark is indispensable to a valid cause of action and such title is shown by its
certificate of registration.[39] With its certificates of registration over the disputed

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trademarks effectively cancelled with finality, SUPERIORs case for trademark infringement
lost its legal basis and no longer presented a valid cause of action.

Even assuming that SUPERIORs case for trademark infringement had not been rendered
moot and academic, there can be no infringement committed by KUNNAN who was
adjudged with finality to be the rightful owner of the disputed trademarks in the Registration
Cancellation Case. Even prior to the cancellation of the registration of the disputed
trademarks, SUPERIOR as a mere distributor and not the owner cannot assert any protection
from trademark infringement as it had no right in the first place to the registration of the
disputed trademarks. In fact, jurisprudence holds that in the absence of any inequitable
conduct on the part of the manufacturer, an exclusive distributor who employs the
trademark of the manufacturer does not acquire proprietary rights of the manufacturer, and
a registration of the trademark by the distributor as such belongs to the manufacturer,
provided the fiduciary relationship does not terminate before application for registration is
filed.[40] Thus, the CA in the Registration Cancellation Case correctly held:

As a mere distributor, petitioner Superior undoubtedly had no right to register the


questioned mark in its name. Well-entrenched in our jurisdiction is the rule that the right to
register a trademark should be based on ownership. When the applicant is not the owner of
the trademark being applied for, he has no right to apply for the registration of the same.
Under the Trademark Law, only the owner of the trademark, trade name or service mark
used to distinguish his goods, business or service from the goods, business or service of
others is entitled to register the same. An exclusive distributor does not acquire any
proprietary interest in the principals trademark and cannot register it in his own name
unless it is has been validly assigned to him.

In addition, we also note that the doctrine of res judicata bars SUPERIORs present case for
trademark infringement. The doctrine of res judicata embraces two (2) concepts: the first is
"bar by prior judgment" under paragraph (b) of Rule 39, Section 47, and the second is
"conclusiveness of judgment" under paragraph (c) thereof.

In the present case, the second concept conclusiveness of judgment applies. Under the
concept of res judicata by conclusiveness of judgment, a final judgment or decree on the
merits by a court of competent jurisdiction is conclusive of the rights of the parties or their
privies in all later suits on points and matters determined in the former suit.[41] Stated
differently, facts and issues actually and directly resolved in a former suit cannot again be
raised in any future case between the same parties, even if the latter suit may involve a
different cause of action.[42] This second branch of the principle of res judicata bars the re-
litigation of particular facts or issues in another litigation between the same parties on a
different claim or cause of action.[43]

Because the Registration Cancellation Case and the present case involve the same parties,
litigating with respect to and disputing the same trademarks, we are bound to examine how
one case would affect the other. In the present case, even if the causes of action of the
Registration Cancellation Case (the cancellation of trademark registration) differs from that
of the present case (the improper or unauthorized use of trademarks), the final judgment in
the Registration Cancellation Case is nevertheless conclusive on the particular facts and
issues that are determinative of the present case.

To establish trademark infringement, the following elements must be proven: (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.[44]

Based on these elements, we find it immediately obvious that the second element the
plaintiffs ownership of the mark was what the Registration Cancellation Case decided with
finality. On this element depended the validity of the registrations that, on their own, only
gave rise to the presumption of, but was not conclusive on, the issue of ownership.[45]
In no uncertain terms, the appellate court in the Registration Cancellation Case ruled that
SUPERIOR was a mere distributor and could not have been the owner, and was thus an
invalid registrant of the disputed trademarks. Significantly, these are the exact terms of the
ruling the CA arrived at in the present petition now under our review. Thus, whether with
one or the other, the ruling on the issue of ownership of the trademarks is the same. Given,

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however, the final and executory ruling in the Registration Cancellation Case on the issue of
ownership that binds us and the parties, any further discussion and review of the issue of
ownership although the current CA ruling is legally correct and can stand on its own merits
becomes a pointless academic discussion.

On the Issue of Unfair Competition

Our review of the records shows that the neither the RTC nor the CA made any factual
findings with respect to the issue of unfair competition. In its Complaint, SUPERIOR alleged
that:[46]

17. In January 1993, the plaintiff learned that the defendant Kunnan Enterprises, Ltd., is
intending to appoint the defendant Sports Concept and Distributors, Inc. as its alleged
distributor for sportswear and sporting goods bearing the trademark PRO-KENNEX. For this
reason, on January 20, 1993, the plaintiff, through counsel, wrote the defendant Sports
Concept and Distributors Inc. advising said defendant that the trademark PRO-KENNEX was
registered and owned by the plaintiff herein.

18. The above information was affirmed by an announcement made by the defendants in
The Manila Bulletin issue of January 29, 1993, informing the public that defendant Kunnan
Enterprises, Ltd. has appointed the defendant Sports Concept and Distributors, Inc. as its
alleged distributor of sportswear and sporting goods and equipment bearing the trademarks
KENNEX and PRO-KENNEX which trademarks are owned by and registered in the name of
plaintiff herein as alleged hereinabove.
xxx
27. The acts of defendants, as previously complained herein, were designed to and are of
the nature so as to create confusion with the commercial activities of plaintiff in the
Philippines and is liable to mislead the public as to the nature and suitability for their
purposes of plaintiffs business and the defendants acts are likely to discredit the commercial
activities and future growth of plaintiffs business.

From jurisprudence, unfair competition has been defined as the passing off (or palming off)
or attempting to pass off upon the public of the goods or business of one person as the
goods or business of another with the end and probable effect of deceiving the public. The
essential elements of unfair competition[47] are (1) confusing similarity in the general
appearance of the goods; and (2) intent to deceive the public and defraud a competitor.[48]

Jurisprudence also formulated the following true test of unfair competition: whether the acts
of the defendant have the intent of deceiving or are calculated to deceive the ordinary
buyer making his purchases under the ordinary conditions of the particular trade to which
the controversy relates. One of the essential requisites in an action to restrain unfair
competition is proof of fraud; the intent to deceive, actual or probable must be shown
before the right to recover can exist.[49]

In the present case, no evidence exists showing that KUNNAN ever attempted to pass off
the goods it sold (i.e. sportswear, sporting goods and equipment) as those of SUPERIOR. In
addition, there is no evidence of bad faith or fraud imputable to KUNNAN in using the
disputed trademarks. Specifically, SUPERIOR failed to adduce any evidence to show that
KUNNAN by the above-cited acts intended to deceive the public as to the identity of the
goods sold or of the manufacturer of the goods sold. In McDonalds Corporation v. L.C. Big
Mak Burger, Inc.,[50] we held that there can be trademark infringement without unfair
competition such as when the infringer discloses on the labels containing the mark that he
manufactures the goods, thus preventing the public from being deceived that the goods
originate from the trademark owner. In this case, no issue of confusion arises because the
same manufactured products are sold; only the ownership of the trademarks is at issue.
Furthermore, KUNNANs January 29, 1993 notice by its terms prevents the public from being
deceived that the goods originated from SUPERIOR since the notice clearly indicated that
KUNNAN is the manufacturer of the goods bearing the trademarks KENNEX and PRO
KENNEX. This notice states in full:[51]

NOTICE AND WARNING

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Kunnan Enterprises Ltd. is the owner and first user of the internationally-renowned
trademarks KENNEX and PRO KENNEX for sportswear and sporting goods and equipment.
Kunnan Enterprises Ltd. has registered the trademarks KENNEX and PRO KENNEX in the
industrial property offices of at least 31 countries worldwide where KUNNAN Enterprises Ltd.
has been selling its sportswear and sporting goods and equipment bearing the KENNEX and
PRO KENNEX trademarks.

Kunnan Enterprises Ltd. further informs the public that it had terminated its Distributorship
Agreement with Superior Commercial Enterprises, Inc. on December 31, 1991. As a result,
Superior Commercial Enterprises, Inc. is no longer authorized to sell sportswear and
sporting goods and equipment manufactured by Kunnan Enterprises Ltd. and bearing the
trademarks KENNEX and PRO KENNEX.

In its place, KUNNAN has appointed SPORTS CONCEPT AND DISTRIBUTORS, INC. as its
exclusive Philippine distributor of sportswear and sporting goods and equipment bearing the
trademarks KENNEX and PRO KENNEX. The public is advised to buy sporting goods and
equipment bearing these trademarks only from SPORTS CONCEPT AND DISTRIBUTORS, INC.
to ensure that the products they are buying are manufactured by Kunnan Enterprises Ltd.
[Emphasis supplied.]

Finally, with the established ruling that KUNNAN is the rightful owner of the trademarks of
the goods that SUPERIOR asserts are being unfairly sold by KUNNAN under trademarks
registered in SUPERIORs name, the latter is left with no effective right to make a claim. In
other words, with the CAs final ruling in the Registration Cancellation Case, SUPERIORs case
no longer presents a valid cause of action. For this reason, the unfair competition aspect of
the SUPERIORs case likewise falls.

WHEREFORE, premises considered, we DENY Superior Commercial Enterprises, Inc.s petition


for review on certiorari for lack of merit. Cost against petitioner Superior Commercial
Enterprises, Inc.
SO ORDERED.

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