MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. vs. E.J.

GALLO WINERY and THE ANDRESONS GROUP, INC.

FACTS:

On March 12, 1993, respondents sued petitioners in the RTC-Makati for

trademark and trade name infringement and unfair competition, with a prayer for damages
and preliminary injunction.

They claimed that petitioners adopted the Gallo trademark to ride on Gallo
Winery’s and Gallo and Ernest & Julio Gallo trademark’s established reputation and
popularity, thus causing confusion, deception and mistake on the part of the purchasing
public who had always associated Gallo and Ernest and Julio & Gallo trademarks with
Gallo Winery’s wines.

In their answer, petitioners alleged, among other affirmative defenses that:

petitioners Gallo cigarettes and Gallo Winery’s wine were totally unrelated products. To
wit:
1. Gallo Winery’s GALLO trademark registration certificates covered wines only, and not
cigarettes;
2. GALLO cigarettes and GALLO wines were sold through different channels of trade;
3. the target market of Gallo Winery’s wines was the middle or high-income bracket while
Gallo cigarette buyers were farmers, fishermen, laborers and other low-income workers;
4. the dominant feature of the Gallo cigarette was the rooster device with the manufacturer’s
name clearly indicated as MIGHTY CORPORATION, while in the case of Gallo Winery’s
wines, it was the full names of the founders-owners ERNEST & JULIO GALLO or just
their surname GALLO;

On April 21, 1993, the Makati RTC denied, for lack of merit, respondent’s prayer
for the issuance of a writ of preliminary injunction.

On August 19, 1993, respondent’s motion for reconsideration was denied.

On February 20, 1995, the CA likewise dismissed respondent’s petition for review
on certiorari.

After the trial on the merits, however, the Makati RTC, on November 26, 1998, held
petitioners liable for, permanently enjoined from committing trademark infringement and
unfair competition with respect to the GALLO trademark.

On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied
petitioner’s motion for reconsideration.

ISSUE:
 Whether GALLO cigarettes and GALLO wines were identical, similar or related
goods for the reason alone that they were purportedly forms of vice.

HELD:

Wines and cigarettes are not identical, similar, competing or related goods.

In resolving whether goods are related, several factors come into play:

 the business (and its location) to which the goods belong

 the class of product to which the good belong
 the product’s 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
 whether the article is bought for immediate consumption, that is, day-to-day household
items
 the field of manufacture
 the conditions under which the article is usually purchased and
 the articles of the trade through which the goods flow, how they are distributed, marketed,
displayed and sold.

The test of fraudulent simulation is to the likelihood of the deception of some

persons in some measure acquainted with an established design and desirous of
purchasing the commodity with which that design has been associated. The simulation,
in order to be objectionable, must be as appears likely to mislead the ordinary intelligent
buyer who has a need to supply and is familiar with the article that he seeks to purchase.

The petitioners are not liable for trademark infringement, unfair competition or
damages.

WHEREFORE, petition is granted.

Pearl & Dean (Phil), Inc. vs Shoemart, Inc.

Pearl & Dean (Phil), Inc. is a corporation engaged in the manufacture of advertising display units
called light boxes. In January 1981, Pearl & Dean was able to acquire copyrights over the
designs of the display units. In 1988, their trademark application for “Poster Ads” was approved;
they used the same trademark to advertise their light boxes.
In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SM) so that the former may be contracted
to install light boxes in the ad spaces of SM. Eventually, SM rejected Pearl & Dean’s proposal.

Two years later, Pearl & Dean received report that light boxes, exactly the same as theirs, were
being used by SM in their ad spaces. They demanded SM to stop using the light boxes and at the
same time asked for damages amounting to P20 M. SM refused to pay damages though they
removed the light boxes. Pearl & Dean eventually sued SM. SM argued that it did not infringe on
Pearl & Dean’s trademark because Pearl & Dean’s trademark is only applicable to envelopes and
stationeries and not to the type of ad spaces owned by SM. SM also averred that “Poster Ads” is
a generic term hence it is not subject to trademark registration. SM also averred that the actual
light boxes are not copyrightable. The RTC ruled in favor of Pearl & Dean. But the Court of
Appeals ruled in favor of SM.

ISSUE: Whether or not the Court of Appeals is correct.

HELD: Yes. The light boxes cannot, by any stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly
classified as a copyrightable; what was copyrighted were the technical drawings only, and not
the light boxes themselves. In other cases, it was held that there is no copyright infringement
when one who, without being authorized, uses a copyrighted architectural plan to construct a
structure. This is because the copyright does not extend to the structures themselves.

On the trademark infringement allegation, the words “Poster Ads” are a simple contraction of the
generic term poster advertising. In the absence of any convincing proof that “Poster Ads” has
acquired a secondary meaning in this jurisdiction, Pearl & Dean’s exclusive right to the use of
“Poster Ads” is limited to what is written in its certificate of registration, namely, stationeries.

Pearl & Dean (Phil), Inc. is a corporation engaged in the manufacture of advertising display
units called light boxes. In January 1981, Pearl & Dean was able to acquire copyrights over the
designs of the display units. In 1988, their trademark application for “Poster Ads” was approved;
they used the same trademark to advertise their light boxes.

In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SM) so that the former may be contracted
to install light boxes in the ad spaces of SM. Eventually, SM rejected Pearl & Dean’s proposal.

Two years later, Pearl & Dean received report that light boxes, exactly the same as theirs, were
being used by SM in their ad spaces. They demanded SM to stop using the light boxes and at the
same time asked for damages amounting to P20 M. SM refused to pay damages though they
removed the light boxes. Pearl & Dean eventually sued SM. SM argued that it did not infringe on
Pearl & Dean’s trademark because Pearl & Dean’s trademark is only applicable to envelopes and
stationeries and not to the type of ad spaces owned by SM. SM also averred that “Poster Ads” is
a generic term hence it is not subject to trademark registration. SM also averred that the actual
light boxes are not copyrightable. The RTC ruled in favor of Pearl & Dean. But the Court of
Appeals ruled in favor of SM.

ISSUE: Whether or not the Court of Appeals is correct.

HELD: Yes. The light boxes cannot, by any stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly
classified as a copyrightable; what was copyrighted were the technical drawings only, and not
the light boxes themselves. In other cases, it was held that there is no copyright infringement
when one who, without being authorized, uses a copyrighted architectural plan to construct a
structure. This is because the copyright does not extend to the structures themselves.

On the trademark infringement allegation, the words “Poster Ads” are a simple contraction of the
generic term poster advertising. In the absence of any convincing proof that “Poster Ads” has
acquired a secondary meaning in this jurisdiction, Pearl & Dean’s exclusive right to the use of
“Poster Ads” is limited to what is written in its certificate of registration, namely, stationeries.