CASE DIGESTS

PATENT; TRADEMARK;
AND COPYRIGHT LAW

COPYRIGHT AND
INTELLECTUAL
PROPERTY

Submitted to:
Atty. Aurelio A. Galacgac
Submitted by:
Juan Miguel VI Alberto
Rebecca Arrojo
Waylan Basungit
Noreen Bragas
Angelica Grace Calica
Germa Dumayag
Mae Laguinday
Karl Thomas Olivar
Amarra Robles
PATENT CASES
INTELLECTUAL PROPERTY ASSOCIATION OF THE
PHILIPPINES, Petitioner, vs. HON. PAQUITO OCHOA, ET AL.
G.R. No. 204605 (July 19, 2016)

NOTE:

The Madrid Protocol does not amend or modify the IP Code on the
acquisition of trademark rights considering that the applications under the
Madrid Protocol are still examined according to the relevant national law,
In that regard, the IPOPHL will only grant protection to a mark that meets
the local registration requirements.

FACTS:

Petitioners, Intellectual Property Association of the Philippines

(IPAP), an association of more than 100 law firms and individual
practitioners in Intellectual Property Law, seeks to declare the accession of
the Philippines to the Protocol Relating to the Madrid Agreement
Concerning the International Registration of Marks (Madrid Protocol)
unconstitutional.

The Madrid System for the International Registration of Marks

(Madrid System), a centralized system for registering and managing marks
worldwide, allows the trademark owner to file one application in one
language, and to pay one set of fees to protect his mark in the territories of
up to 97 member-states. The Madrid System was governed by the Madrid
Agreement and then by the Madrid Protocol.

The Madrid Protocol, which was adopted in order to remove the

challenges deterring some countries from acceding to the Madrid
Agreement, has two objectives, namely: (1) to facilitate securing protection
for marks; and (2) to make the management of the registered marks easier
in different countries.
 The Intellectual Property Office of the Philippines (IPOPHL), the
government agency mandated to administer the intellectual property system
of the country and to implement the state policies on intellectual property;
began considering the country's accession to the Madrid Protocol; and
recommended to the Department of Foreign Affairs (DFA) that the
Philippines should accede to the Madrid Protocol.

DFA endorsed to the President the country's accession to the Madrid

Protocol. Conformably with its express authority under Section 9 of
Executive Order No. 459 (Providing for the Guidelines in the Negotiation of
International Agreements and its Ratification) dated November 25, 1997, the
DFA determined that the Madrid Protocol was an executive agreement. The
same was concurred by the IPOPHL, DOST, and DTI.

President Aquino ratified the Madrid Protocol through an instrument

of accession. The instrument of accession was deposited with the Director
General of the World Intellectual Property Organization (WIPO), and the
Madrid Protocol entered into force in the Philippines.

The IPAP alleged that the Madrid Protocol is a treaty, not an executive
agreement; and being a treaty, Madrid Protocol should have been approved
by the Senate with accordance to the Constitution. Hence, respondent DFA
Secretary Albert Del Rosario acted with grave abuse of discretion in
determining the Madrid Protocol as an executive agreement.

They also alleged that in the implementation of the accession to the

Madrid Protocol, it would conflict with the implementation of the IP Code of
the Philippines.

ISSUE:

Whether or not the Madrid Protocol is in conflict of the IP Code of the

Philippines.
HELD:

No.

The IPAP contended that the Madrid Protocol does away with the
requirement of a resident agent under Section 125 of the IP Code, and that
the Madrid Protocol is unconstitutional for being in conflict with the local
law, which it cannot modify.

The IPAP's contentions stand on a faulty premise. The method of

registration through the IPOPHL, as laid down by the IP Code, is distinct and
separate from the method of registration through the WIPO, as set in the
Madrid Protocol. Comparing the two methods of registration despite their
being governed by two separate systems of registration is thus misplaced.

In arguing that the Madrid Protocol conflicts with Section 125 of the IP
Code, the IPAP highlights the importance of the requirement for the
designation of a resident agent. It underscores that the requirement is
intended to ensure that non-resident entities seeking protection or privileges
under Philippine Intellectual Property Laws will be subjected to the country's
jurisdiction. It submits that without such resident agent, there will be a need
to resort to costly, time consuming and cumbersome extraterritorial service
of writs and processes.

The IPAP misapprehends the procedure for examination under the

Madrid Protocol, The difficulty, which the IPAP illustrates, is minimal, if not
altogether inexistent. The IPOPHL actually requires the designation of the
resident agent when it refuses the registration of a mark. Local
representation is further required in the submission of the Declaration of
Actual Use, as well as in the submission of the license contract. The Madrid
Protocol accords with the intent and spirit of the IP Code, particularly on the
subject of the registration of trademarks. The Madrid Protocol does not
amend or modify the IP Code on the acquisition of trademark rights
considering that the applications under the Madrid Protocol are still
examined according to the relevant national law, In that regard, the IPOPHL
will only grant protection to a mark that meets the local registration
requirements.
E.I. DUPONT DE NEMOURS AND CO. vs. DIRECTOR EMMA C.
FRANCISCO, et al.
G.R. No. 174379 (August 31, 2016)

NOTES:

A. Patent may still be revived within a period of four months from the
date of abandonment.
B. The four (4)-month period for revival is not counted from actual
notice of abandonment but from mailing of the notice.
C. The right of priority does not immediately entitle a patent applicant
the grant of a patent. A right of priority is not equivalent to a patent.

FACTS:

E.I. Dupont Nemours and Company (E.I. Dupont Nemours) is an

American corporation organized under Delaware State laws. It applied for
Philippine Patent Application No. 35526 before the Bureau of Patents,
Trademarks, and Technology Transfer for the Angiotensin II Receptor
Blocking Imidazole (losartan), an invention related to the treatment of
hypertension and congestive heart failure.

Their patent application was mostly handled by Atty. Nicanor Mapili,

a resident agent.

Atty. Mapili passed away, and E.I. Dupont Nemours’ new counsel,
Ortega, Del Castillo, Bacorro, Odullo, Calma, and Carbonell, sent the IPO a
letter requesting that an office action be issued on their patent application.

In response, Patent Examiner Precila Bulihan an office action stating

an official revocation of Power of Attorney of the former counsel and the
appointment of the present by the applicant would required.

E.I. Dupont Nemours replied to the office by submitting a Power of

Attorney, authorizing the succeeding counsel to prosecute and handle its
present applications. On the same day, it also filed a Petition for Revival with
Cost for their Patent Application No. 35526.

The Director of Patents denied the Petition for Revival for having been
filed out of time. E.I. Dupont Nemours appealed the denial to the Director-
General of IPO, but the same was denied. Petitioner filed for Petition for
Review before CA, and was eventually granted.

OSG, on behalf of IPO, moved to reconsider. In the interim, E.I.

Dupont Nemours’ competitor Therapharma, Inc., moved for leave to
intervene and argue that the decision affects its vested rights to sell its own
product.

ISSUES:

1. Whether CA erred in denying Petitioner’s appeal for the revival of its

patent.
2. Whether negligence of the patent applicant’s counsel binds the
applicant.
3. Whether the invention had already been part of the public domain.

HELD:

1. No. Petition for Revival filed beyond allowable period

Sec. 133.4 of the IPC, Rule 930 of the Rules and Regulations on
Inventions, and Rule 929 of the Revised Implementing Rules and
Regulations for Patents, Utility Models and Industrial Design prescribe that
a patent may still be revived within a period of four months from the date of
abandonment. The Intellectual Property Code even provides for a shorter
period of three (3) months within which to file for revival.

An application not revived in accordance with this Rule shall be

deemed forfeited. Even if delay was unavoidable, or the failure to prosecute
was due to fraud, accident, mistake, or excusable negligence, or the Petition
was accompanied by a complete proposed response, or all fees were paid, the
Petition would still be denied since these regulations only provide a four (4)-
month period within which to file for the revival of the application. The rules
do not provide any exception that could extend this four (4)-month period to
13 years.

2. Yes. Petitioner was negligent in the prosecution of their patent

Petitioner's resident agent, Atty. Mapili, was undoubtedly negligent in

failing to respond to the Office Action sent by the Bureau of Patents,
Trademarks, and Technology Transfer. Because of his negligence,
petitioner's patent application was declared abandoned. He was again
negligent when he failed to revive the abandoned application within four (4)
months from the date of abandonment.

Petitioner tries to disown Atty. Mapili's conduct by arguing that it was

not informed of the abandonment of its patent application or of Atty. Mapili's
death. By its own evidence, however, petitioner requested a status update
from Atty. Mapili only eight (8) years after the filing of its application. It
alleged that it only found out about Atty. Mapili's death sometime in March
1996, as a result of its senior patent attorney's visit to the Philippines.
Although it was in petitioner's discretion as a foreign client to put its
complete trust and confidence on its local resident agent, there was a
correlative duty on its part to be diligent in keeping itself updated on the
progress of its patent applications. Its failure to be informed of the
abandonment of its patent application was caused by its own lack of
prudence.

In Bernardo vs. Court of Appeals, "[n]o prudent party will leave the
fate of his case entirely to his lawyer . . . . It is the duty of a party-litigant to
be in contact with his counsel from time to time in order to be informed of
the progress of his case."

Even if Atty. Mapili's death prevented petitioner from submitting a

petition for revival on time, it was clearly negligent when it subsequently
failed to immediately apprise itself of the status of its patent application.
 The doctrine in Schuartz vs. Court of Appeals applies. In this case,
several foreign inventors seeking to file patent applications in the Philippines
hired the law firm Siguion Reyna, Montecillo and Ongsiako to process their
applications. The Bureau of Patents, Trademarks, and Technology Transfer
mailed the law firm several notices of abandonment on its patent
applications from June 1987 to September 1987. The law firm only found out
about this in December 1987, after it dismissed two (2) of its employees in
charge of handling correspondences from the Bureau.152 The law firm filed
petitions for revival of its patent applications from March 1988, all of which
were denied by the Director of the Bureau of Patents for being filed out of
time.153 An appeal was subsequently filed before the Court of Appeals but
was dismissed for being filed beyond the reglementary period.

This Court found that although the Court of Appeals may have erred in
counting the period for appeal, it could not grant the Petition. This Court
stated:
[Petitioners lost sight of the fact that the petition could not be granted
because of laches. Prior to the filing of the petition for revival of the patent
application with the Bureau of Patents, an unreasonable period of time had
lapsed due to the negligence of petitioners' counsel. By such inaction,
petitioners were deemed to have forfeited their right to revive their
applications for patent.

Facts show that the patent attorneys appointed to follow up the

applications for patent registration had been negligent in complying with the
rules of practice prescribed by the Bureau of Patents. The firm had been
notified about the abandonment as early as June 1987, but it was only after
December 7, 1987, when their employees Bangkas and Rosas had been
dismissed, that they came to know about it. This clearly showed that
petitioners' counsel had been remiss in the handling of their clients'
applications.
 "A lawyer's fidelity to the cause of his client requires him to be ever
mindful of the responsibilities that should be expected of him. A lawyer shall
not neglect a legal matter entrusted to him." In the instant case, petitioners'
patent attorneys not only failed to take notice of the notices of abandonment,
but they failed to revive the application within the four-month period, as
provided in the rules of practice in patent cases. These applications are
deemed forfeited upon the lapse of such period.

Petitioner attempts to distinguish itself from Schuartz by arguing that

the petitioners in Schuartz had actual notice of abandonment while
petitioner here was only able to have actual notice when it received Paper No.
2.

The four (4)-month period, however, is not counted from actual notice
of abandonment but from mailing of the notice. Since it appears from the
Intellectual Property Office's records that a notice of abandonment was
mailed to petitioner's resident agent on July 19, 1988, the time for taking
action is counted from this period. Petitioner's patent application cannot be
revived simply because the period for revival has already lapsed and no
extension of this period is provided for by the 1962 Revised Rules of Practice.
3. No. Right of Priority not a defense for the revival of patent

Petitioner argues that its patent application was filed within 12 months
from the prior filing of a US patent application. It argues that it is protected
from becoming part of the public domain because of convention priority
under the Paris Convention for the Protection of Industrial Property and
Section 9 of Republic Act No. 165.

Intervenor Therapharma, Inc. argues that a mere patent application

does not vest any right in the applicant before the issuance of the patent. It
argues that the "priority date" argued by petitioner is only relevant in
determining who has a better right to the patent among the other applicants
who subsequently apply for the same invention.
 Since both the US and the Philippines are signatories to the Paris
Convention for the Protection of Industrial Property, an applicant who has
filed a patent application in the United States may have a right of priority
over the same invention in a patent application in the Philippines. However,
this right of priority does not immediately entitle a patent applicant the grant
of a patent. A right of priority is not equivalent to a patent. Otherwise, a
patent holder of any member-state of the Paris Convention need not apply
for patents in other countries where it wishes to exercise its patent.

It is inaccurate for petitioner to argue that its prior patent application

in the United States removed the invention from the public domain in the
Philippines. This argument is only relevant if Therapharma, Inc. had a
conflicting patent application with the Intellectual Property Office. A right of
priority has no bearing in a case for revival of an abandoned patent
application.
The purpose of patent laws
The grant of a patent is to provide protection to any inventor from any
patent infringement. Once an invention is disclosed to the public, only the
patent holder has the exclusive right to manufacture, utilize, and market
the invention.

The grant of a patent provides protection to the patent holder from the
indiscriminate use of the invention. However, its mandatory publication also
has the correlative effect of bringing new ideas into the public consciousness.
After the publication of the patent, any person may examine the invention
and develop it into something further than what the original patent holder
may have envisioned. After the lapse of 20 years, the invention becomes part
of the public domain and is free for the public to use. In Pearl and Dean vs.
Shoemart, Inc.:

To be able to effectively and legally preclude others from copying and

profiting from the invention, a patent is a primordial requirement. No
patent, no protection. The ultimate goal of a patent system is to bring new
designs and technologies into the public domain through disclosure. Ideas,
once disclosed to the public without the protection of a valid patent, are
subject to appropriation without significant restraint.

On one side of the coin is the public which will benefit from new ideas;
on the other are the inventors who must be protected. The law attempts to
strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully fted bargain for
encouraging the creation and disclosure of new useful and non-obvious
advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep his
invention secret and reap its fruits indefinitely. In consideration of its
disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon
the expiration of that period, the knowledge of the invention inures to the
people, who are thus enabled to practice it and profit by its use."

The patent law has a three-fold purpose: "first, patent law seeks to
foster and reward invention; second, it promotes disclosures of inventions to
stimulate further innovation and to permit the public to practice the
invention once the patent expires; third, the stringent requirements for
patent protection, seek to ensure that ideas in the public domain remain
therefor the free use of the public."

It is only after an exhaustive examination by the patent office that a

patent is issued. Such an in-depth investigation is required because "in
rewarding a useful invention, the rights and welfare of the community must
be fairly dealt with and effectively guarded. To that end, the prerequisites
to obtaining a patent are strictly observed and when a patent is issued, the
limitations on its exercise are equally strictly enforced. To begin with, a
genuine invention or discovery must be demonstrated lest in the constant
demand for new appliances, the heavy hand of tribute be laid on each slight
technological advance in art."
 In addition, a patent holder of inventions relating to food or medicine
does not enjoy absolute monopoly over the patent. Both RA 165 and the
Intellectual Property Code provide for compulsory licensing. Compulsory
licensing is defined in the Intellectual Property Code as the "grant a license
to exploit a patented invention, even without the agreement of the patent
owner." Therapharma, Inc.'s products been recommended as cheaper
alternative losartan medication, since they were priced "50 percent less than
foreign brands.”

Public interest will be prejudiced if, despite petitioner's inexcusable

negligence, its Petition for Revival is granted. Even without a pending patent
application and the absence of any exception to extend the period for revival,
petitioner was already threatening to pursue legal action against respondent
Therapharma, Inc. if it continued to develop and market its losartan product,
Lifezar. Once petitioner is granted a patent for its losartan products, Cozaar
and Hyzaar, the loss of competition in the market for losartan products may
result in higher prices. For the protection of public interest, Philippine Patent
Application No. 35526 should be considered a forfeited patent application.
BISHOP BRODERICK S. PABILLO, DD, PABLO R. MANALASTAS,
JR., PHD, MARIA CORAZON AKOL, CONCEPCION B.
REGALADO, HECTOR A. BARRIOS, LEO Y. QUERUBIN,
AUGUSTO C. LAGMAN, FELIX P. MUGA, II, PHD, ATTY.
GREGORIO T. FABROS, EVITA L. JIMENEZ, AND JAIME DL
CARO, PHD, Petitioners, v. COMMISSION ON ELECTIONS, EN
BANC, REPRESENTED BY ACTING CHAIRPERSON CHRISTIAN
ROBERT S. LIM, AND SMARTMATIC-TIM CORPORATION,
REPRESENTED BY SMARTMATIC ASIA-PACIFIC PRESIDENT
CESAR FLORES, Respondents. [G.R. NO. 216562] INTEGRATED
BAR OF THE PHILIPPINES, Petitioner, v. COMMISSION ON
ELECTIONS, REPRESENTED BY ITS ACTING CHAIRPERSON
ROBERT S. LIM, AND SMARTMATIC-TIM CORPORATION,
Respondent.
EN BANC G.R. No. 216098, April 21, 2015 (Consolidated case)
NOTE:
Patent and Copyright owned by Smartmatic-TIM Corporation only
includes that of the PCOS Machine and the software program but their right
does pertain to the to the refurbishment, maintenance, diagnostics, and
repair of the PCOS machines.

FACTS:

Consolidated petitions for certiorari and prohibition assailing

respondent the Commission on Elections’ (COMELEC) Resolution No. 9922
dated December 23, 2014, which approved a direct contracting arrangement
with respondent Smartmatic-TIM Corporation (Smartmatic-TIM) for the
diagnostics, maintenance, repair, and replacement of the COMELEC’s
Precinct Count Optical Scan (PCOS) machines, as well as the resulting
contract thereof, the Extended Warranty Contract (Program 1) dated
January 30, 2015.

Among the issues raised in relation to Intellectual Property Law is with

respect to the repairing or refurbishment of the product in case of need or
the procurement of critical plant components. In the Deed of Sale there is a
warranty provision which states that all intellectual property rights in or
related to the Goods and/or Services, including but not limited to patents
and other know-how and copyright, both registered and unregistered, owned
and/or otherwise used by the PROVIDER, and all goodwill related thereto
are, and shall remain at all times, the exclusive property of SMARTMATIC;
and COMELEC acknowledges the same, and shall not exploit, reproduce or
use the same except as expressly provided in this Contract.

Under Section 50 (a), Article XVI of the GPRA, direct contracting may
be allowed when the procurement involves goods of proprietary nature,
which can be obtained only from the proprietary source – that is, when
patents, trade secrets, and copyrights prohibit others from manufacturing
the same item. Petitioners contend that the “goods” sought to be procured in
these cases refer to the refurbishment, maintenance, diagnostics, and repair
of the PCOS machines, which are not protected by patents, trade secrets, and
copyrights owned by Smartmatic-TIM. Thus, they may be contracted out
from other service providers. On the other hand, respondents maintain that
the goods sought to be procured by the COMELEC are of proprietary nature
which may only be obtained from the proprietary source, in this case
Smartmatic-TIM, which owns the intellectual property rights over such
goods.

Taken together is the provision with regard to direct contracting under

Section 50 (b), Article XVI of the Government Program Reform Act (GPRA).
Said provision cites instances which would justify a resort to direct
contracting and the second condition is when the procurement of critical
components from a specific manufacturer, supplier or distributor is a
condition precedent to hold a contractor to guarantee its project
performance, in accordance with provisions of the contract with
SMARTMATIC.

Respondents are of the view that the direct contracting arrangement

falls under this second condition. In this regard, the COMELEC claims that
Smartmatic-TIM will not take responsibility for malfunctioning machines if
they are tampered with by other entities as per the warranty provisions of the
2009 AES Contract, which were incorporated in the 2012 Deed of Sale. Thus,
the engagement of Smartmatic-TIM constitutes a critical component or a
condition precedent if the COMELEC were to hold it for its existing
warranties. Petitioners counter that the COMELEC failed to show that
Smartmatic-TIM is the sole entity which can provide the subject services. As
such, it cannot be inferred that the latter is the only entity that has the
technical expertise in refurbishment, maintenance, diagnostics, and repair
of the PCOS machines.

ISSUE:

Whether or not the “goods” which pertain to the to the refurbishment,

maintenance, diagnostics, and repair of the PCOS machines are protected by
patents, trade secrets, and copyrights owned by Smartmatic-TIM and
therefor shall solely be serviced by Smartmatic-TIM alone and cannot be
contracted out from other service providers.

HELD:

No.

Goods are considered to be of “proprietary nature” when they are

owned by a person who has a protectable interest in them or an interest
protected by intellectual property laws. Here, it has not been seriously
disputed that Smartmatic-TIM has intellectual property rights over the SAES
1800 AES, comprised of the PCOS machines, as well as the software program
used to run the technology. In support thereof, Smartmatic-TIM has drawn
attention to United States (US) Patent Application Publication No. US
2012/0259681 A1 dated October 11, 2012 for the invention called “Appending
Audit Mark Image” (US Patent App. No. US 2012/0259681 A1)and US
Copyright Registration No. TX 7-921-024 dated October 16, 2014 for the
work entitled “Democracy Suite Election Management System Software
version 4.14” (US Copyright Reg. No. TX 7-921-024), both in the name of
Dominion Voting Systems, Inc., which – as Smartmatic-TIM alleges in a
letter dated November 25, 2014 to the COMELEC – has already granted to it
the Perpetual License to use the Dominion “licensed technology” embodied
in the existing machines, the transfer of PCOS and Election Management
System (EMS) Intellectual Property Rights, and the exclusive rights to
manufacture and sell the PCOS and EMS in the Philippines. However, it is at
once apparent that the “goods” subject of these cases neither pertain to the
PCOS machines nor the software program aforementioned, but rather to the
services for the machines’ repair and refurbishment, which in itself
constitutes a distinct contract object that is susceptible to government
procurement through competitive public bidding. As defined in Section 5 (h),
Article I of the GPRA, “services such as the repair and maintenance of
equipment” are included within the ambit of the term “goods” as applied
within the context of the procurement law. A perusal of the
aforementioned patent and copyright documents reveals that
Smartmatic-TIM’s existing intellectual property rights do not
cover the services subject of these cases. No evidence has been
presented to show that it possessed intellectual property rights over the
method, process, system, program, or work of servicing the said PCOS
machines for their repair and refurbishment. Accordingly, Smartmatic-TIM
cannot be said to be the services’ proprietary source, thus, negating its
purported exclusivity as the COMELEC claims. At any rate, even if it is
assumed that Smartmatic-TIM is the proprietary source of the services or
that the intended repair and refurbishment would necessarily entail a
modification of the PCOS hardware and software of which its existing
intellectual property rights cover, the COMELEC is still not bound to engage
Smartmatic-TIM on an exclusive basis. Based on the 2009 AES Contract,
Smartmatic-TIM would grant the COMELEC a perpetual, but non-exclusive
license to use, modify, and customize the PCOS systems and software,
including the right to alter and modify the source code itself, for all future
elections, when the latter exercises its option to purchase. Indeed, the license
granted is but a natural incident of the COMELEC’s exercise of the OTP, by
which it had acquired ownership over the PCOS machines; hence, the
COMELEC should already be able to freely exploit them for the purpose that
they were purchased. The only limitations, as may be above-gleaned, are on
their commercialization as such would be clearly foreign to the contract’s
objective. It would be both absurd and unfair if the COMELEC’s ability to
effectively operate the machines would remain solely dependent on
Smartmatic-TIM notwithstanding its acquired ownership over the same.
While the intellectual property rights of Smartmatic-TIM were
acknowledged by the COMELEC, by no means was it precluded – as it should
not be precluded – from the complete utilization of the machines as long as
it advances election-related purposes.
ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS
ARAIN, M.D. DBA ZUNECA PHARMACEUTICAL, Petitioners, v.
NATRAPHARM, INC., Respondent.
G.R. No. 197802, November 11, 2015

NOTE:

Injunction as ancillary remedy of one claiming exclusive rights over

a patentable product.

FACTS:

Respondent is an all-Filipino pharmaceutical company which

manufactures and sells a medicine bearing the generic name "CITICOLINE,"
which is indicated for heart and stroke patients. The said medicine is
marketed by respondent under its registered trademark "ZYNAPSE," which
respondent obtained from the Intellectual Property Office (IPO) on
September 24, 2007 under Certificate of Trademark Registration No. 4-
2007-005596. With its registration, the trademark "ZYNAPSE" enjoys
protection for a term of 10 years from September 24, 2007. In addition,
respondent obtained from the Bureau of Food and Drugs (BFAD) all
necessary permits and licenses to register, list and sell its "ZYNAPSE"
medicine in its various forms and dosages.

Allegedly unknown to respondent, since 2003 or even as early as 2001,

petitioners have been selling a medicine imported from Lahore, Pakistan
bearing the generic name "CARBAMAZEPINE," an anti-convulsant
indicated for epilepsy, under the brand name "ZYNAPS," which trademark is
however not registered with the IPO. "ZYNAPS" is pronounced exactly like
"ZYNAPSE."

On October 30, 2007, respondent sent petitioners a cease-and-desist

demand letter.
 Petitioners refused to heed the above demand, claiming that they had
prior use of the name "ZYNAPS" since year 2003, having been issued by the
BFAD a Certificate of Product Registration (CPR) on April 15, 2003, which
allowed them to sell CARBAMAZEPINE under the brand name "ZYNAPS."

On November 29, 2007, respondent filed a complaint against

petitioners for trademark infringement for violation of Republic Act (R.A.)
No. 8293, or the Intellectual Property Code of the Philippines (IPC), with
prayer for a temporary restraining order (TRO) and/or writ of preliminary
injunction. To justify the TRO/writ of preliminary injunction, respondent
cited Section 12211 of R.A. No. 8293, under which the registration of
"ZYNAPSE" gives it the exclusive right to use the said name as well as to
exclude others from using the same. In addition, respondent argued that
under Sections 13813 and 147.114 of the IPC, certificates of registration are
prima facie evidence of the registrant's ownership of the mark and of the
registrant's exclusive right to use the same.

In its December 21, 2007 Order,21 the Regional Trial Court (RTC)
denied respondent's application for a TRO, ruling that even if respondent
was able to first register its mark "ZYNAPSE" with the IPO in 2007, it is
nevertheless defeated by the prior actual use by petitioners of "ZYNAPS" in
2003.

On June 17, 2008, the CA issued a Resolution denying respondent's

application for TRO and/or preliminary injunction for lack of merit.

However, contrary to its earlier resolutions denying the application for

a TRO/preliminary injunction, the CA, in its April 18, 2011 Decision, upheld
the allegations of respondent that it is entitled to injunctive relief on the basis
of its IPO registration and permanently enjoined petitioners from the
commercial use of "ZYNAPS."

Thus the petition for review before the SC.

 However, On December 2, 2011, the RTC rendered a Decision on the
merits of the case. It found petitioners liable to respondent for damages.
Moreover, it enjoined the petitioners from using "ZYNAPS" and ordered all
materials related to it be disposed outside the channel of commerce or
destroyed without compensation.

ISSUE:

Whether or not respondent is entitled to the injunctive writ.

HELD:

In this Court's objective evaluation, neither party is, at this point,

entitled to any injunctive solace. Plaintiff, while admittedly the holder of a
registered trademark under the IPC, may not invoke ascendancy or
superiority of its CTR [certificate of trademark registration] over the CPR
[certificate of product registration of the BFAD] of the defendants, as the
latter certificate is, in the Court's opinion, evidence of its "prior use".
Parenthetically, the plaintiff would have been entitled to an injunction as
against any or all third persons in respect of its registered mark under normal
conditions, that is, in the event wherein Section 159.1 would not be invoked
by such third person. Such is the case however in this litigation. Section 159
of the IPC explicitly curtails the registrant's rights by providing for
limitations on those rights as against a "prior user" under Section 159.1 xxx.

But with the RTC's December 2, 2011 Decision on the case for
"Injunction, Trademark Infringement, Damages and Destruction," the issues
raised in the instant petition have been rendered moot and academic. We
note that the case brought to the CA on a petition for certiorari merely
involved the RTC's denial of respondent's application for a writ of
preliminary injunction, a mere ancillary writ. Since a decision on the merits
has already been rendered and which includes in its disposition a permanent
injunction, the proper remedy is an appeal from the decision in the main
case.
TRADEMARK CASES
SUPERIOR COMMERCIAL ENTERPRISES INC. vs. KUNNAN
ENTERPRISES LTD.
G.R. No. 169974 | April 20, 2010

NOTE:

The right to register a trademark is based on ownership, and

therefore only the owner can register it. An exclusive distributor does not
acquire any proprietary interest in the principal’s trademark and cannot
register it, unless the owner has assigned the right.

FACTS:

Kunnan appointed Superior as its exclusive distributor in the

Philippines under an agreement providing that: “Kunnan intends to acquire
ownership of the Kennex trademark registered by Superior Commercial in
the Philippines. Superior Commercial is desirous of being appointed as the
sole distributor of Kunnan products in the Philippines.”

On the basis of Superior’s erroneous advice that it could not acquire

trademark rights in the Philippines, Kunnan assigned its applications to
register ‘Pro Kennex’ as a trademark to Superior, on condition that Superior
acknowledged that Kunnan was still the real owner of the mark and agreed
to return it to Kunnan on request. Upon termination of the parties’
distributorship agreement, Kunnan published a notice in a newspaper
stating that it owned the Kennex and Pro Kennex marks. Superior then filed
a civil complaint for trademark infringement and unfair competition against
Kunnan.

Prior to and during the infringement and unfair competition case,

Kunnan filed petitions for the cancellation of registration and oppositions to
applications for trademark registrations involving Kennex and Pro Kennex
with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT).
It claimed that Superior had fraudulently registered and appropriated these
trademarks.
ISSUE:

Whether or not Superior, as a distributor, is the true owner of the

trademarks.

HELD:

No.

Superior had no right to register Kennex and Pro Kennex in its name.
The right to register a trademark is based on ownership, and therefore only
the owner can register it. An exclusive distributor does not acquire any
proprietary interest in the principal’s trademark and cannot register it,
unless the owner has assigned the right.

In the case of Gabriel v. Perez, the Supreme Court declared that in the
absence of any inequitable conduct on the part of the manufacturer, an
exclusive distributor that employs the trademark of the manufacturer does
not acquire proprietary rights to the mark, and a registration of the
trademark by the distributor belongs to the manufacturer.

On the issue of unfair competition, Section 29 of the Trademark Law

states the essential elements of unfair competition: (1) Confusing similarity
in the general appearance of the goods; and (2)Intent to deceive the public
and defraud a competitor.

The jurisprudential ‘true test’ is to determine whether the defendant

intends to deceive the ordinary buyer making purchases under ordinary
conditions of the trade. Proof of fraud is essential. Intent to deceive, actual
or probable, has to be shown. In this case, there was no evidence that Kunnan
had attempted to pass off its goods as those of Superior or intended to
deceive the public. Kunnan’s published notice clearly indicated that it had
made known to the public that it was the manufacturer of the goods bearing
the Kennex and Pro Kennex marks. Given that Kunnan was the rightful
owner of the trademarks, the unfair competition aspect of Superior’s case
likewise failed.
DERMALINE INC. V. MYRA PHARMACEUTICALS
G.R. NO. 190065; AUGUST 16, 2010

NOTE:

Dominancy Test determines whether there is a kind of confusion,

wherein the public would be deceived into the belief that there is some
connection between the two parties

FACTS:

Dermaline applied for registration of the trademark “Dermaline,

Dermaline Inc.” It was opposed by Myra for such trademark closely
resembles its registered trademark “Dermalin.”

The contention of Dermaline was that it cannot result to confusion,

mistake or deception of the purchasing public because there were striking
dissimilarities and that Dermaline is engaged in health and beauty services
while Myra is under medicine goods against skin disorders.

On the other hand, the contention of Myra was that both marks have
three syllables each, with each syllable identical in sound and appearance.
Such similarities will cause the public into believing that Dermaline is
connected with Myra.

The Intellectual Property Office (IPO) rejected the application which

the Court of Appeals affirmed.

ISSUE:

Whether or not Dermaline’s application for registration was correctly

denied.
HELD:

Yes.

To determine the likelihood of confusion, the Court used the

Dominancy Test. This test is applied when the trademark sought to be
registered contains the main, essential and dominant features of the earlier
registered trademark and confusion or deception is likely to result. The
confusion may be of the goods (production confusion), where the ordinarily
prudent purchaser would be induced to purchase one product in the belief
that he was purchasing the other and it may be confusion of business (source
or origin confusion), where although the foods of the parties are different,
the mark of the product of which registration is applied for by one party is
such as might reasonably be assumed to originate with the registrant of an
earlier product. In the latter kind of confusion, the public would be deceived
into the belief that there is some connection between the two parties.

It is apparent that both trademarks will cause confusion of goods and

confusion of business. An ordinary purchaser who hears an advertisement of
Dermaline’s applied trademark over the radio will likely associate it with
Myra’s registered mark. Even the contention that the products belong to
separate and different classifications was without merit because both
classifications pertain to treatment of the skin.

Dermaline’s application was rejected.

UYCO, et al. vs LO
G.R. No. 202423; January 28, 2013

NOTE:

The law on trademarks and trade names precisely precludes a person

from profiting from the business reputation built by another and from
deceiving the public as to the origins of products.

FACTS:

Respondent Vicente Lo and Philippine Burners Manufacturing

Corporation (PBMC) filed a complaint against the officers of Wintrade
Industrial Sales Corporation (Wintrade), including petitioners Chester Uyco,
Winston Uychiyong and Cherry Uyco-Ong, and of National Hardware,
including Mario Sy Chua, for violation of Section 169.1, in relation to Section
170, of RA 8293.

The disputed marks in this case are the "HIPOLITO & SEA HORSE &
TRIANGULAR DEVICE," "FAMA," and other related marks, service marks
and trade names of Casa Hipolito S.A. Portugal appearing in kerosene
burners.

Lo claimed in his complaint that Gasirel-Industria de Comercio e

Componentes para Gass, Lda. (Gasirel), the owner of the disputed marks,
executed a deed of assignment transferring these marks in his favor, to be
used in all countries except for those in Europe and America.

Lo purchased from National Hardware kerosene burners with the

subject marks and the designations "Made in Portugal" and "Original
Portugal" in the wrappers. These products were manufactured by Wintrade.
Lo claimed that as the assignee for the trademarks, he had not authorized
Wintrade to use these marks, nor had Casa Hipolito S.A. Portugal. While a
prior authority was given to Wintrade’s predecessor-in-interest, Wonder
Project & Development Corporation (Wonder), Casa Hipolito S.A. Portugal
had already revoked this authority through a letter of cancellation dated May
31, 1993.

Lo stated that the real and genuine burners are those manufactured by
its agent, PBMC.

Petitioners answered that Wintrade owns the subject trademarks and

their variants. To prove this assertion, they submitted as evidence the
certificates of registration with the Intellectual Property Office. They alleged
that Gasirel, not Lo, was the real party-in-interest. They allegedly derived
their authority to use the marks from Casa Hipolito S.A. Portugal through
Wonder, their predecessor-in-interest; that PBMC had already ceased to be
a corporation and, thus, the licensing agreement between PBMC and Lo
could not be given effect, particularly because the agreement was not
notarized and did not contain the provisions required by Section 87 of RA
8293. They pointed out that Lo failed to sufficiently prove that the burners
bought from National Hardware were those that they manufactured. But at
the same time, they also argued that the marks "Made in Portugal" and
"Original Portugal" are merely descriptive and refer to the source of the
design and the history of manufacture.

In a separate Answer, Chua admitted that he had dealt with Wintrade

for several years and had sold its products. He had not been aware that
Wintrade had lost the authority to manufacture, distribute, and deal with
products containing the subject marks, and he was never informed of
Wintrades loss of authority. Thus, he could have not been part of any
conspiracy.

Petitioners were found in violation of Section 169.1, in relation with

Section 170, of RA 8293. On appeal, DOJ affirmed the decision and CA found
no grave abuse of discretion.
ISSUE:

Whether or not the appellate courts were wrong in affirming decision

finding Petitioners in violation of RA 8293.

HELD:

Courts found no reversible error on the part of the DOJ and the CA.

The petitioners again try to convince the Court that they have not
manufactured the products bearing the marks "Made in Portugal" and
"Original Portugal" that were bought during the test buy. However their own
admission given by Chua bears considerable weight.

The admission in the petitioners Joint Affidavit is not in any way

hypothetical, as they would have us believe. They narrate incidents that have
happened. They refer to Wintrades former association with Casa Hipolito
S.A. Portugal; to their decision to produce the burners in the Philippines; to
their use of the disputed marks; and to their justification for their use. It
reads as follows:

24. As earlier mentioned, the predecessor-in-interest of Wintrade was

the former exclusive licensee of Casa Hipolito SA of Portugal since the
1970s, and that Wintrade purchased all the rights on the said trademarks
prior to the closure of said company. Indeed, the burners sold by Wintrade
used to be imported from Portugal, but Wintrade later on discovered the
possibility of obtaining these burners from other sources or of
manufacturing the same in the Philippines.

Wintrades decision to procure these burners from sources other than

Portugal is certainly its management prerogative. The presence of the words
"made in Portugal" and "original Portugal" on the wrappings of the burners
and on the burners themselves which are manufactured by Wintrade is an
allusion to the fact that the origin of the design of said burners can be traced
back to Casa Hipolito SA of Portugal, and that the history of the manufacture
of said burners are rooted in Portugal. These words were not intended to
deceive or cause mistake and confusion in the minds of the buying public.

Chua, the owner of National Hardware the place where the test buy was
conducted admits that Wintrade has been furnishing it with kerosene
burners with the markings "Made in Portugal" for the past 20 years, to wit:

5. I hereby manifests (sic) that I had been dealing with Wintrade

Industrial Sales Corporation (WINTRADE for brevity) for around 20 years
now by buying products from it. I am not however aware that WINTRADE
was no longer authorized to deal, distribute or sell kerosene burner bearing
the mark HIPOLITO and SEA HORSE Device, with markings "Made in
Portugal" on the wrapper as I was never informed of such by WINTRADE
nor was ever made aware of any notices posted in the newspapers
informing me of such fact. Had I been informed, I would have surely
stopped dealing with WINTRADE.

Thus, the evidence shows that petitioners, who are officers of

Wintrade, placed the words "Made in Portugal" and "Original Portugal" with
the disputed marks knowing fully well because of their previous dealings
with the Portuguese company that these were the marks used in the products
of Casa Hipolito S.A. Portugal. More importantly, the products that Wintrade
sold were admittedly produced in the Philippines, with no authority from
Casa Hipolito S.A. Portugal. The law on trademarks and trade names
precisely precludes a person from profiting from the business reputation
built by another and from deceiving the public as to the origins of products.
These facts support the consistent findings of the State Prosecutor, the DOJ
and the CA that probable cause exists to charge the petitioners with false
designation of origin. The fact that the evidence did not come from Lo, but
had been given by the petitioners, is of no significance.

The argument that the words "Made in Portugal" and "Original

Portugal" refer to the origin of the design and not to the origin of the goods
does not negate the finding of probable cause; at the same time, it is an
argument that the petitioners are not barred by this Resolution from raising
as a defense during the hearing of the case.
MANG INASAL PHILIPPINES, INC., Petitioner vs. IFP
MANUFACTURING CORPORATION, Respondent
G.R. No. 221717; June 19, 2017

NOTE:

Application of the Dominancy Test in similarities between

trademarks.

FACTS:

On May 26, 2011, respondent filed with the Intellectual Property Office
(IPO) an application for the registration of the mark "OK Hotdog Inasal
Cheese Hotdog Flavor Mark" in connection with goods under Class 30 of the
Nice Classification 4. This application was, however, opposed by petitioner
Mang Inasal Philippines, Inc.

Petitioner is a domestic fast food company and the owner of the mark
"Mang Inasal, Home of Real Pinoy Style Barbeque and Device." The said
mark, which was registered with the IPO in 2006, has been used by petitioner
for its chain of restaurants since 2003.

Petitioner argued that the OK Hotdog Inasal mark and the Mang Inasal
mark share similarities, both as to their appearance and as to the goods or
services that they represent which tend to suggest a false connection or
association between the said marks and, in that regard, would likely cause
confusion on the part of the public, citing Section 123 (d)(iii) of Republic Act
No. (RA) 8293 which provides:
SECTION 123. Registrability. –
123. 1. A mark cannot be registered if it:
xxxx
d. iii. ... nearly resembles [a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date] as to be likely
to deceive or cause confusion.
 Petitioner’s case was later forwarded to the Bureau of Legal Affairs
(BLA) of the Intellectual Property Office, and upon denial of the petition, to
the Director General of the Intellectual Property Office. However, the DG of
the IPO was also not convinced the OK Hotdog Inasal Mark is confusingly
similar to the Mang Inasal Mark, stating that the only similarity between the
two marks is the word "INASAL."

In addition, petitioner cannot prevent the application of the word

"INASAL" in the OK Hotdog Inasal mark. No person or entity can claim
exclusive right to use the word "INASAL" because it is merely a generic or
descriptive word that means barbeque or barbeque products.

Neither can the underlying goods and services of the two marks be
considered as closely related. The products represented by the two marks are
not competitive and are sold in different channels of trade.
An appeal was then later filed with the Court of Appeals but was denied.

ISSUE:

Whether the “OK Hotdog Inasal mark” is so confusingly similar to the

“Mang Inasal mark” to deny respondent of his trademark application for said
mark.

HELD:

The respondent’s OK Hotdog Inasal Mark is confusingly similar to the

Mang Inasal Mark and is likely to cause confusion and deception to the
public. Jurisprudence, particularly in the case of Skechers U.S.A., Inc. v.
Trendworks International Corporation, the Court has noted two (2) types
of confusion:

(1) confusion of goods (product confusion), where the ordinarily

prudent purchaser would be induced to purchase one product in the belief
that he was purchasing the other; and
 (2) confusion of business (source or origin confusion), where, although
the goods of the parties are different, the product, the mark of which
registration is applied for by one party, is such as might reasonably be
assumed to originate with the registrant of an earlier product, and the public
would then be deceived either into that belief or into the belief that there is
some connection between the two parties, though inexistent.
Confusion, in either of its forms, is, thus, only possible when the goods or
services covered by allegedly similar marks are identical, similar or related
in some manner.

To fall under the ambit of Sec. 123. l(d)(iii) and be regarded as likely to
deceive or cause confusion upon the purchasing public, a prospective mark
must be shown to meet two (2) minimum conditions:
1. The prospective mark must nearly resemble or be similar to an
earlier mark; and
2. The prospective mark must pertain to goods or services that are
either identical, similar or related to the goods or services represented by the
earlier mark.

The first condition of the proscription requires resemblance or

similarity between a prospective mark and an earlier mark. To be regarded
as similar to an earlier mark, it is enough that a prospective mark be a
colorable imitation of the former. Colorable imitation denotes such likeness
in form, content, words, sound, meaning, special arrangement or general
appearance of one mark with respect to another as would likely mislead an
average buyer in the ordinary course of purchase.

In determining whether there is similarity or colorable imitation

between two marks, authorities employ either the dominancy test or the
holistic test. In Mighty Corporation v. E. & J. Gallo Winery, the court
distinguished between the two tests as follows:

The Dominancy Test focuses on the similarity of the prevalent features

of the competing trademarks which might cause confusion or deception, and
thus infringement. If the competing trademark contains the main, essential
or dominant features of another, and confusion or deception is likely to
result, infringement takes place. Duplication or imitation is not necessary;
nor is it necessary that the infringing label should suggest an effort to imitate.
The question is whether the use of the marks involved is likely to cause
confusion or mistake in the mind of the public or deceive purchasers.

On the other hand, the Holistic Test requires that the entirety of the
marks in question be considered in resolving confusing similarity.
Comparison of words is not the only determining factor. The trademarks in
their entirety as they appear in their respective labels or hang tags must also
be considered in relation to the goods to which they are attached. The
discerning eye of the observer must focus not only on the predominant words
but also on the other features appearing in both labels in order that he may
draw his conclusion whether one is confusingly similar to the other.

The petitioner's Mang Inasal mark has a single dominant feature-the

word "INASAL" written in a bold red typeface against a black outline and
yellow background with staggered design. The other perceptible elements of
the mark-such as the word "MANG" written in black colored font at the upper
left side of the mark and the phrase "HOME OF REAL PINOY STYLE
BARBEQUE' written in a black colored stylized font at the lower portion of
the mark-are not as visually outstanding as the mentioned feature.

Being the sole dominant element, the word "INASAL," as stylized in

the Mang Inasal mark, is also the most distinctive and recognizable feature
of the said mark.

The respondent's OK Hotdog Inasal mark, on the other hand, has three
(3) dominant features: (a) the word "INASAL" written in a bold red typeface
against a black and yellow outline with staggered design; (b) the word
"HOTDOG" written in green colored font; and (c) a picture of three pieces of
curls. Though there are other observable elements in the mark-such as the
word "OK'' written in red colored font at the upper left side of the mark, the
small red banner overlaying the picture of the curls with the words "CHEESE
HOTDOG FLAVOR" written on it, and the image of a block of cheese beside
the picture of the curls-none of those are as prevalent as the two features
aforementioned.

The dominant element "INASAL" in the OK Hotdog Inasal mark is

exactly the same as the dominant element "INASAL" in the Mang Inasal
mark. Both elements in both marks are printed using the exact same red
colored font, against the exact same black outline and yellow background and
is arranged in the exact same staggered format.

Given the foregoing premises, and applying the dominancy test, it was
held that the OK Hotdog Inasal mark is a colorable imitation of the Mang
Inasal mark.
ECOLE DE CUISINE MANILLE (CORDON BLEU OF THE
PHILIPPINES), INC., vs. RENAUD COINTREAU & CIE and LE
CORDON BLEU INT'L., B.V.
G.R NO. 185830; JUNE 5, 2013

NOTE:

In order to register a trademark, one must be the owner thereof and

must have actually used the mark in commerce in the Philippines for two
(2) months prior to the application for registration. However, it does not
require that the actual use of a trademark must be within the Philippines.

FACTS:

Cointreau, a partnership registered under the laws of France, filed

before the (now defunct) Bureau of Patents, Trademarks, and Technology
Transfer (BPTTT) a trademark application for the mark "LE CORDON BLEU
& DEVICE." Petitioner filed an opposition to the subject application,
averring that it is the owner of the mark "LE CORDON BLEU, ECOLE DE
CUISINE MANILLE," which it has been using since 1948 in cooking and
other culinary activities, including in its restaurant business. Cointreau filed
its answer claiming to be the true and lawful owner of the subject mark. It
averred that it has filed applications for the subject mark’s registration in
various jurisdictions, including the Philippines. It added that Le Cordon Bleu
is a culinary school of worldwide acclaim which was established in Paris,
France in 1895 and has trained students from more than eighty (80)
nationalities, including Ecole’s directress, Ms. Lourdes L. Dayrit.

The Bureau of Legal Affairs sustained Ecole. The IPO Director General
however ruled in favor of Cointreau. He held that while Section 2 of R.A. No.
166 requires actual use of the subject mark in commerce in the Philippines
for at least two (2) months before the filing date of the application, only the
owner thereof has the right to register the same and does not require actual
use in the Philippines to be able to acquire ownership of a mark.
 CA affirmed. Hence, this petition.

ISSUE:

Whether or not Cointreau is the true and lawful owner of the subject
mark and thus, entitled to have the same registered under its name.

HELD:

Yes.

Under Section 2 of R.A. No. 166, in order to register a trademark, one

must be the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the application for
registration. However, it does not require that the actual use of a trademark
must be within the Philippines.

The Philippines and France, Cointreau’s country of origin, are both

signatories to the Paris Convention for the Protection of Industrial Property
(Paris Convention). Thus, under Philippine law, a trade name of a national
of a State that is a party to the Paris Convention, whether or not the trade
name forms part of a trademark, is protected without the obligation of filing
or registration.

It is undisputed that Cointreau has been using the subject mark in

France since 1895, prior to Ecole’s averred first use of the same in the
Philippines in 1948, of which the latter was fully aware thereof. In fact,
Ecole’s present directress, Ms. Lourdes L. Dayrit (and even its foundress, Pat
Limjuco Dayrit), had trained in Cointreau’s Le Cordon Bleu culinary school
in Paris, France. On the other hand, Ecole has no certificate of registration
over the subject mark but only a pending application covering services
limited to Class 41 of the Nice Classification, referring to the operation of a
culinary school. Its application was filed only on February 24, 1992, or after
Cointreau filed its trademark application for goods and services falling under
different classes in 1990. Even if Ecole was the first to use the mark in the
Philippines, it cannot be said to have validly appropriated the same. Hence,
Ecole cannot claim any tinge of ownership whatsoever over the subject mark
as Cointreau is the true and lawful owner thereof.

In any case, the present law on trademarks, Republic Act No. 8293,
otherwise known as the Intellectual Property Code of the Philippines, as
amended, has already dispensed with the requirement of prior actual use at
the time of registration. Thus, there is more reason to allow the registration
of the subject mark under the name of Cointreau as its true and lawful owner.

The function of a trademark is to point out distinctly the origin or

ownership of the goods (or services) to which it is affixed; to secure to him,
who has been instrumental in bringing into the market a superior article of
merchandise, the fruit of his industry and skill; to assure the public that they
are procuring the genuine article; to prevent fraud and imposition; and to
protect the manufacturer against substitution and sale of an inferior and
different article as his product."

The petition is denied.

COFFEE PARTNERS INC. vs. SAN FRANCISCO COFFEE &
ROASTERY INC.
G.R. No. 169504 | March 3, 2010

NOTE:

RA 8293 has dispensed with the registration requirement. Section

165.2 of RA 8293 states that trade names shall be protected, even prior to
or without registration with the IPO, against any unlawful act including
any subsequent use of the trade name by a third party, whether as a trade
name or a trademark likely to mislead the public.

FACTS:

San Francisco Coffee & Roastery Inc. (SFCRI) is a corporation engaged

in the wholesale and retail sale of coffee. It registered the business name
“SAN FRANCISCO COFFEE & ROASTERY, INC.” with the DTI in June 1995.
SFCRI discovered that petitioner Coffee Partners was about to open a coffee
shop under the name “SAN FRANCISCO COFFEE”. For SFCRI, the shop’s
name caused confusion in the minds of the public, because of its similarity
to its trade name. SFCRI demanded that Coffee Partners stop using “SAN
FRANCISCO COFFEE”, and thereafter filed a complaint for infringement
and/or unfair competition.

Coffee Partners, however, contend that no infringement would arise

because SFCRI’s tradename was not registered with the IPO. It added that
there are distinct differences in the appearance of their trademark and that
it already filed IPO applications for the registration of the mark ”San
Francisco Coffee & Device” for class 42 in 1999 and for class 35 in 2000.

ISSUE:

Whether or not the Coffee Partner’s use of the trademark "SAN

FRANCISCO COFFEE" constitutes infringement of SFCRI’s trade name
"SAN FRANCISCO COFFEE & ROASTERY, INC." even if the trade name is
not registered with the IPO.

HELD:

Yes.

RA 8293 has dispensed with the registration requirement. Section

165.2 of RA 8293 states that trade names shall be protected, even prior to or
without registration with the IPO, against any unlawful act including any
subsequent use of the trade name by a third party, whether as a trade name
or a trademark likely to mislead the public.

It is the likelihood of confusion that is the gravamen of infringement.

The two tests in determining the likelihood of confusion are the dominancy
and the holistic test. The dominancy test focuses on the similarity of the
prevalent features of the competing trademarks that might cause confusion
or deception. Exact duplication or imitation is not required. In contrast the
holistic test entails a consideration of the entirety of the marks as applied to
the products, including the labels and packaging. Focus is made not only on
the predominant words but also on the other features appearing on both
marks that are confusingly similar to the other.

Applying both tests, Coffee Partner’s “SAN FRANCISCO COFFEE”

trademark is a clear infringement of SFCRI’s “SAN FRANCISCO COFFEE &
ROASTERY, INC.” trade name. The descriptive words “SAN FRANCISCO
COFFEE” are precisely the dominant features of respondent’s trade name.
Petitioner and respondent are engaged in the same business of selling coffee,
whether wholesale or retail. The likelihood of confusion is higher in cases
where the business of one corporation is the same or substantially the same
as that of another corporation. In this case, the consuming public will likely
be confused as to the source of the coffee being sold at petitioner’s coffee
shops.
 In Prosource International, Inc. v. Horphag Research Management
SA, the Supreme Court laid down what constitutes infringement of an
unregistered trade name:

(1) The trademark being infringed is registered in the IPO; however, in

infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied,
or colorably imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the
sale, offering for sale, or advertising of any goods, business or services;
or the infringing mark or trade name is applied to labels, signs, prints,
packages, wrappers, receptacles, or advertisements intended to be
used upon or in connection with such goods, business, or services;
(4) The use or application of the infringing mark or trade name is likely
to cause confusion or mistake or to deceive purchasers or others as to
the goods or services themselves or as to the source or origin of such
goods or services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or
the assignee thereof.
BERRIS AGRI V. ABYADANG
G.R. NO. 183404; OCTOBER 13, 2010

NOTES:

A. The prima facie presumption brought about by registration of a mark

may be challenged and overcome by prior user of the trademark.

B. Holistic test necessitates a consideration of the entirety of the marks

as applied to the products, including the labels and packaging, in
determining confusing similarity.

FACTS:

Abyadang filed a trademark application for the mark “NS D-10 PLUS”
for use in connection with a Fungicide (Class 5) with active ingredient 80%
Mancozeb. Berris opposed because “NS D-10 PLUS” is similar and/or
confusingly similar to its registered trademark “D-10 80 WP” also used for
Fungicide (Class 5) with active ingredient 80% Mancozeb.

The contention of Abyadang was that Berris could not have legally used
the mark in the sale of the goods way back June 2002 because it registered
the product with the Fertilizer and Pesticide Authority (FPA) only on
November 12, 2004. Thus, it cannot be protected as a prior user and prior
registrant. Also, Abyadang emphasized that the trademarks were totally
different from each other.

Berris firmly held that it has complied with the requisite of R.A. No.
8293 to file a declaration of actual use (DAU) of the mark within three years
from the filing of the application for registration. Thus, it should be given
protection as a prior user and that the registration of Abyadang must be
rejected due to the possibility of confusion.
 Intellectual Property Office rejected the application. However, the
Court of Appeals reversed the decision and stated that there were no
similarities between the two trademarks.

ISSUES:

1. Whether or not Berris is a prior user of the trademark.

2. Whether or not NS D-10 PLUS is confusingly similar to D-10 80 WP.

HELD:

1. Yes.

A trademark being a special property and a creation of use belongs to

the one who first used it in trade and commerce. Valid registration with the
IPO must also be combined with the filing of DAU of the mark; otherwise,
the application shall be refused or the mark shall be removed from the
register. In other words, the prima facie presumption brought about by
registration of a mark may be challenged and overcome, by proof of the
nullity of the registration or of non-use of the mark, except when caused by
circumstances arising independently of the will of the trademark owner.
Moreover, the presumption may also be defeated by evidence of prior use by
another person.

Berris sufficiently established that it was using its mark since June 20,
2002 as shown by the completed DAU, sales invoices and official receipts of
goods bearing the mark.

2. Yes.

The Holistic test necessitates a consideration of the entirety of the

marks as applied to the products, including the labels and packaging, in
determining confusing similarity. The discerning eye of the observer must
focus not only on the predominant words but also on the other features
appearing on both labels so that the observer may draw conclusion on
whether one is confusingly similar to the other.

The Court taking into consideration the packaging, for both use the
same type of material (foil type) and have identical color schemes, and have
the same phrase “BROAD SPECTRUM FUNGICIDE” written underneath,
confusion and mistake will likely to occur. Buyers, mainly farmers, may even
be misled into thinking that “NS D-10 PLUS” could be an upgraded
formulation of the “D-10 80 WP.”

Application for trademark registration rejected.

BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly
BIRKENSTOCK ORTHOPAEDIE GMBH),Petitioner,
vs. PHILIPPINE SHOE EXPO MARKETING
CORPORATION, Respondent.

NOTES:

Each certificate of registration shall remain in force for twenty years:

Provided, That registrations under the provisions of this Act shall be
cancelled by the Director, unless within one year following the fifth, tenth
and fifteenth anniversaries of the date of issue of the certificate of
registration, the registrant shall file in the Patent Office an affidavit
showing that the mark or trade-name is still in use or showing that its non-
use is due to special circumstance which excuse such non-use and is not due
to any intention to abandon the same, and pay the required fee.

FACTS:

Petitioner(BIRKENSTOCK), applied for various trademark

registrations before the IPO, namely:

(a) "BIRKENSTOCK" (b) "BIRKENSTOCK BAD HONNEF -RHEIN &

DEVICE COMPRISING OF ROUND COMPANY SEAL AND
REPRESENTATION OF A FOOT, CROSS AND SUNBEA M"; and (c)
"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF
ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS
AND SUNBEAM".

However, registration proceedings of the subject applications were

suspended in view of an existing registration of the mark "BIRKENSTOCK
AND DEVICE" under Registration No. 56334 dated October 21, 1993
(Registration No. 56334) in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent
(Philippine Shoe Expo Marketing Corporation). During its pendency,
however, respondent and/or its predecessor-in-interest failed to file the
required 10th Year Declaration of Actual Use (10th Year DAU) for
Registration No. 56334 on or before October 21, 2004, thereby resulting in
the cancellation of such mark.

ISSUES:

1.Whether or not the registration of respondent is cancelled.

2. Whether or not the subject marks should be allowed registration in

the name of petitioner.

HELD:

1. Yes. Respondents registration of trademark is cancelled because it

failed to file the required 10th Year Declaration of Actual Use

Under Republic Act No. (RA) 166, Section 12. Duration. – Each
certificate of registration shall remain in force for twenty years: Provided,
That registrations under the provisions of this Act shall be cancelled by the
Director, unless within one year following the fifth, tenth and fifteenth
anniversaries of the date of issue of the certificate of registration, the
registrant shall file in the Patent Office an affidavit showing that the mark or
trade-name is still in use or showing that its non-use is due to special
circumstance which excuse such non-use and is not due to any intention to
abandon the same, and pay the required fee.

The aforementioned provision clearly reveals that failure to file the

DAU within the requisite period results in the automatic cancellation of
registration of a trademark. In turn, such failure is tantamount to the
abandonment or withdrawal of any right or interest the registrant has over
his trademark.

Here, respondent failed to file the 10th Year DAU for Registration No.
56334 within the requisite period. As a consequence, it was deemed to have
abandoned or withdrawn any right or interest over the mark
"BIRKENSTOCK."
 2. Yes. Petitioner has duly established its true and lawful ownership of
the mark "BIRKENSTOCK."

Under RA 166, one may be an owner of a mark due to its actual use but
may not yet have the right to register such ownership here due to the owner’s
failure to use the same in the Philippines for two (2) months prior to
registration.

Registration of a trademark, by itself, is not a mode of acquiring

ownership. Registration merely creates a prima facie presumption of the
validity of the registration, of the registrant’s ownership of the trademark,
and of the exclusive right to the use thereof. Such presumption is rebuttable
and must give way to evidence to the contrary.

The Court’s pronouncement in Berris Agricultural Co., Inc. v.

Abyadang is instructive on this point:

By evidence of prior use by another person, it will controvert a claim of

legal appropriation or of ownership based on registration by a subsequent
user. This is because a trademark is a creation of use and belongs to one who
first used it in trade or commerce.

A trademark cannot be appropriated by unscrupulous entities that, in

one way or another, happen to register such trademark ahead of its true and
lawful owner. The presumption of ownership accorded to a registrant must
then necessarily yield to superior evidence of actual and real ownership of a
trademark.

Here, petitioner established that it is the owner of the mark

"BIRKENSTOCK. The evidence shows the origin and history of
"BIRKENSTOCK" and its use in commerce long before respondent was able
to register the same here in the Philippines. It proved that "BIRKENSTOCK"
was first adopted in Europe in 1774 by its inventor, Johann Birkenstock, a
shoemaker, on his line of quality footwear and thereafter, numerous
generations of his kin continuously engaged in the manufacture and sale of
shoes and sandals bearing the mark "BIRKENSTOCK" until it became the
entity now known as the petitioner. Petitioner also submitted various
certificates of registration of the mark "BIRKENSTOCK" in various countries
and that it has used such mark in different countries worldwide, including
the Philippines.

BIRKENSTOCK, obviously of German origin, is a highly distinct and

arbitrary mark. It is very remote that two persons did coin the same or
identical marks. The unanswered riddle is why, of the millions of terms and
combinations of letters and designs available, [respondent] had to come up
with a mark identical or so closely similar to the [petitioner’s] if there was no
intent to take advantage of the goodwill generated by the [petitioner’s] mark.
Being on the same line of business, it is highly probable that the [respondent]
knew of the existence of BIRKENSTOCK and its use by the [petitioner],
before [respondent] appropriated the same mark and had it registered in its
name.
VICTORIO P. DIAZ vs. PEOPLE OF THE PHILIPPINES AND LEVI
STRAUSS [PHILS.], INC.,
G.R. No. 180677; February 18, 2013

NOTE:

The likelihood of confusion is the gravamen of the offense of

trademark infringement.

FACTS:

Levi Strauss and Company (Levi’s), a foreign corporation based in the

U.S., is the owner of trademarks and designs of Levi’s jeans like LEVI’S 501.
Levi Strauss Philippines, Inc. (Levi’s Philippines) is a licensee of Levi’s. Levi’s
Philippines discovered that Diaz was selling counterfeit LEVI’S 501 jeans in
his tailoring shops. Diaz admitted being the owner of the shops searched, but
stated that he did not manufacture Levi’s jeans, and that he used the label
"LS Jeans Tailoring" in the jeans that he made and sold; that the label "LS
Jeans Tailoring" was registered with the Intellectual Property Office; that his
shops received clothes for sewing or repair; that his shops offered made-to-
order jeans, whose styles or designs were done in accordance with
instructions of the customers; that since the time his shops began operating
in 1992, he had received no notice or warning regarding his operations; that
the jeans he produced were easily recognizable because the label "LS Jeans
Tailoring," and the names of the customers were placed inside the pockets,
and each of the jeans had an "LSJT" red tab; that "LS" stood for "Latest
Style;" and that the leather patch on his jeans had two buffaloes, not two
horses.

RTC and CA ruled in favor of Respondent. Hence, this petition.

ISSUE:

Whether or not petitioner is liable for infringement.

HELD:

No.

The elements of the offense of trademark infringement under

the Intellectual Property Code are, therefore, the following:

1. The trademark being infringed is registered in the Intellectual

Property Office;
2. The trademark is reproduced, counterfeited, copied, or colorably
imitated by the infringer;
3. The infringing mark is used in connection with the sale, offering for
sale, or advertising of any goods, business or services; or the infringing
mark is applied to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used upon or in connection with such
goods, business or services;
4. The use or application of the infringing mark is likely to cause
confusion or mistake or to deceive purchasers or others as to the goods
or services themselves or as to the source or origin of such goods or
services or the identity of such business; and
5. The use or application of the infringing mark is without the consent
of the trademark owner or the assignee thereof.

As can be seen, the likelihood of confusion is the gravamen of the

offense of trademark infringement. There are two tests to determine
likelihood of confusion, namely: the dominancy test, and the holistic test.
The dominancy test focuses on the similarity of the main, prevalent or
essential features of the competing trademarks that might cause confusion.
The holistic test considers the entirety of the marks, including labels and
packaging, in determining confusing similarity.

The holistic test is applicable here considering that the herein criminal
cases also involved trademark infringement in relation to jeans products.
The maong pants or jeans made and sold by Levi’s Philippines, which
included LEVI’S 501, were very popular in the Philippines. The consuming
public knew that the original LEVI’S 501 jeans were under a foreign brand
and quite expensive. Under the circumstances, the consuming public could
easily discern if the jeans were original or fake LEVI’S 501, or were
manufactured by other brands of jeans.

Dy Buncio v. Tan Tiao Bok defines "ordinary purchaser" as one

"accustomed to buy, and therefore to some extent familiar with, the
goods in question. The test of fraudulent simulation is to be found in the
likelihood of the deception of 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 such 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.

Diaz used the trademark "LS JEANS TAILORING" for the jeans he
produced and sold in his tailoring shops. The word "LS" could not be
confused as a derivative from "LEVI STRAUSS" by virtue of the "LS" being
connected to the word "TAILORING", thereby openly suggesting that the
jeans bearing the trademark "LS JEANS TAILORING" came or were bought
from the tailoring shops of Diaz, not from the malls or boutiques selling
original LEVI’S 501 jeans to the consuming public.

There were other remarkable differences between the two trademarks

that the consuming public would easily perceive. Diaz aptly noted such
differences such as the "two horse design." Instead, what is shown is
"buffalo design." Again, a horse and a buffalo are two different animals
which an ordinary customer can easily distinguish. As to the red tab, the red
tab used by the private complainant indicates the word "LEVI’S" while that
of the accused indicates the letters "LSJT" which means LS JEANS
TAILORING. Again, even an ordinary customer can distinguish the word
LEVI’S from the letters LSJT.

Moreover, based on the certificate issued by the Intellectual Property

Office, "LS JEANS TAILORING" was a registered trademark of Diaz. He had
registered his trademark prior to the filing of the present cases. The
Intellectual Property Office would certainly not have allowed the registration
had Diaz’s trademark been confusingly similar with the registered trademark
for LEVI’S 501 jeans.

Wherefore, Diaz is acquitted.

SKECHERS, USA INC. V. INTER PACIFIC INDUSTRIAL
G.R. NO. 164321; MARCH 28, 2011

NOTE:

The essential element of infringement under R.A. No. 8293 is that the
infringing mark is likely to cause confusion.

FACTS:

Skechers applied for the issuance of search warrants against the

respondent for infringement of trademarks. It alleged that it has registered
the trademark “SKECHERS” and the trademark “S” (with an oval design)
with the Intellectual Property Office (IPO). More than 6,000 pairs of shoes
bearing the “S” logo were seized. However, the Regional Trial Court quashed
the warrants and directed the NBI to return the goods upon motion of the
respondent. The latter alleged, on the other hand, that there was no
confusing similarity between the “SKECHERS” rubbers shoes and its
“STRONG” rubber shoes.

ISSUE:

Whether or not respondent is guilty of trademark infringement.

HELD:

Yes.

The essential element of infringement under R.A. NO. 8293 is that the
infringing mark is likely to cause confusion. Applying the Dominancy Test,
the Court found that the use of the stylized “S” by the respondent in its Strong
rubber shoes infringes in the registered mark of Skechers. Even if the stylized
“S” is within an oval design, the dominant feature of the trademark is the
stylized “S”, as it is precisely the stylized “S” which catches the eye of the
purchaser. Thus, even if the respondent did not use an oval design, the mere
fact that it used the same stylized “S,” the same being dominant feature of
the petitioner’s trademark already constitutes infringement under the
Dominancy Test.

Even using the Holistic Test would show that respondent is guilty of
infringing the trademark of Skechers. Upon careful examination, the
dissimilarities between the shoes are too trifling that it is indubitable to cause
confusion and mistake in the eyes of the public. The Court emphasized that
even if not all the details are identical, as long as the general appearance of
two products are such that any ordinary purchaser would be deceived, the
imitator should be liable. Respondent’s shoes may not be an exact replica of
the petitioner’s shoes, but the features and overall design are so similar and
alike that confusion is highly likely.
SERI SOMBOONSAKDIKUL, Petitioner vs. ORLANE S.A.,
Respondent
G.R. No. 188996; Febuary 1, 2017

NOTE:

Colorable Imitation in Trademark Infringement

FACTS:

On September 23, 2003, petitioner filed an application for registration

of the mark “LOLANE” with the IPO for gloods classified as “Personal Care
Products” under the International Classification of Goods and Services for
the Purposes of the Registration of Marks. Orlane S.A. (respondent) opposed
the application, on the ground that the mark “LOLANE” was similar to
“ORLANE” in presentation, general appearance and pronunciation, and thus
would amount to an infringement of its mark while under the same
classification of goods and products.

Respondent adds that by promotion, worldwide registration,

widespread and high standard use, the mark had acquired distinction,
goodwill, superior quality image and reputation and was now well-known,
and since LOLANE became known only later on, it acted in bad fath.

In his answer, petition denied that the LOLANE mark was confusingly
similar to the mark ORLANE as the latter was in plain block upper case
letters while the mark LOLANE was printed in stylized word with the second
letter L and the letter A co-joined. Furthermore, the similarity in one syllable
would not automatically result in confusion even if used in the same class of
goods since his products always appear with Thai characters while those of
ORLANE always had the name Paris on it. The two marks are also
pronounced differently.

The Bureau of Legal Affairs (BLA) rejected petitioner's application in

a, finding that respondent's application was filed, and its mark registered,
much earlier. The BLA ruled that there was likelihood of confusion based on
the following observations: (1) ORLANE and LOLANE both consisted of six
letters with the same last four letters - LANE; (2) both were used as label for
similar products; (3) both marks were in two syllables and that there was
only a slight difference in the first syllable; and (4) both marks had the same
last syllable so that if these marks were read aloud, a sound of strong
similarity would be produced and such would likely deceive or cause
confusion to the public as to the two trademarks.

Petitioner filed a motion for reconsideration but this was denied by the
Director of the BLA. By application of the Dominancy Test, it found that the
dominant feature in both marks was the word LANE; and that the marks had
a strong visual and aural resemblance that could cause confusion to the
buying public. This resemblance was amplified by the relatedness of the
goods.

On appeal, the Director General of the IPO affirmed the Decision of the
BLA Director.

A petition for review was later filed with the CA, but the latter only
affirmed the decision of the DLA Director. The CA ruled that since the only
difference is the first letters of the mark, the words would likely cause
confusion to the public since, when pronounced, the two marks produce
similar sounds. The CA did not heed petitioner's contention that since the
mark ORLANE is of French origin, the same is pronounced as "ORLAN."
Filipinos would invariably pronounce it as "OR-LEYN." The CA also noted
that the trademark ORLANE is a fanciful name and petitioner was not able
to explain why he chose the word LOLANE as trademark for his personal
care products. Thus, the only logical conclusion is that he would want to
benefit from the established reputation and goodwill of the ORLANE mark.

ISSUE:

Whether or not there is confusing similarity between ORLANE and

LOLANE which would bar the registration of LOLANE before the IPO.
HELD:

No.

There is no colorable imitation between the marks LOLANE and

ORLANE which would lead to any likelihood of confusion to the ordinary
purchasers. A trademark is defined under Section 121.1 of RA 8293 as any
visible sign capable of distinguishing the goods. It is susceptible to
registration if it is crafted fancifully or arbitrarily and is capable of identifying
and distinguishing the goods of one manufacturer or seller from those of
another.

The most essential requirement for the determination of likelihood of

confusion is the existence of colorable imitation. Jurisprudence has defined
Colorable Imitation as "such similarity in form, content, words, sound,
meaning, special arrangement or general appearance of the trademark or
trade name in their overall presentation or in their essential and substantive
and distinctive parts as would likely mislead or confuse persons in the
ordinary course of purchasing the genuine article. Absent such
resemblance, there can be no infringement.

The Court disagreed with the CA the suffix LANE is the dominant
feature of petitioner’s mark. Neither can it be considered as the dominant
feature of ORLANE which would make the two marks confusingly similar.
While there are no set rules as what constitutes a dominant feature with
respect to trademarks applied for registration, usually, what are taken into
account are signs, color, design, peculiar shape or name, or some special,
easily remembered earmarks of the brand that readily attracts and catches
the attention of the ordinary consumer.

As correctly argued by petitioner in his answer before the BLA, there

are visual differences between LOLANE and ORLANE since the mark
ORLANE is in plain block upper case letters while the mark LOLANE was
rendered in stylized word with the second letter L and the letter A co-joined.
 Second, as to the aural aspect of the marks, LOLANE and ORLANE do
not sound alike. As the proper pronunciation of the last syllable LANE-
"LEYN" for LOLANE and "LAN" for ORLANE, being of French origin, also
differ. The Court found no basis in the statement of the Director General,
which was affirmed by the CA, that Filipinos would invariably pronounce
ORLANE as "ORLEYN."

Further, respondent failed to show proof that the suffix “LANE” has
registered in the mind of consumers that such suffix is exclusively or even
predominantly associated with ORLANE products. Hence, colorable
imitation by LO LANE of the mark ORLANE, is absent in this case.
Resemblance between the marks is a separate requirement from, and must
not be confused with, the requirement of a similarity of the goods to which
the trademarks are attached.

The basic rule in trademarks that confusing similarity is determined by

the aural, visual and connotative and overall impressions created by the
marks. Finding that the mark of the goods were not confusingly similar,
LOLANE is entitled to registration.
REPUBLIC GAS CORPORATION vs. PETRON
G.R. No. 194062; June 17, 2013

NOTE:

The mere unauthorized use of a container bearing a registered

trademark in connection with the sale, distribution or advertising of goods
or services which is likely to cause confusion, mistake or deception among
the buyers or consumers can be considered as trademark infringement.

FACTS:

LPG Dealers Associations received reports that certain entities were

engaged in the unauthorized refilling, sale and distribution of LPG cylinders
bearing the registered tradenames and trademarks of Petron and Shell. The
investigation revealed that REGASCO LPG Refilling Plant in Malabon was
engaged in the refilling and sale of LPG cylinders bearing the registered
marks of the respondents without authority from the latter. NBI
cooperatives conducted a test-buy operation. They brought with them four
(4) empty LPG cylinders bearing the trademarks of SHELLANE and GASUL
and included the same with the purchase of J&S, a REGASCO’s regular
customer. Inside REGASCO’s refilling plant, they witnessed that REGASCO’s
employees carried the empty LPG cylinders to a refilling station and refilled
the LPG empty cylinders. Money was then given as payment for the refilling
of the J&S’s empty cylinders which included the four LPG cylinders. Upon
application of a search warrant, they were able to seize several empty and
filled Shellane and Gasul cylinders as well as other allied paraphernalia.

The Secretary of the Department of Justice affirmed the prosecutor’s

dismissal of the complaint but CA granted the petition of the respondents.

ISSUE:

Whether or not probable cause exists to hold petitioners liable for the
crimes of trademark infringement and unfair competition.
HELD:

Yes.

The Court, in a very similar case, made it categorically clear that the
mere unauthorized use of a container bearing a registered trademark in
connection with the sale, distribution or advertising of goods or services
which is likely to cause confusion, mistake or deception among the buyers or
consumers can be considered as trademark infringement. Here, petitioners
have actually committed trademark infringement when they refilled, without
the respondents’ consent, the LPG containers bearing the registered marks
of the respondents. As noted by respondents, petitioners’ acts will inevitably
confuse the consuming public, since they have no way of knowing that the
gas contained in the LPG tanks bearing respondents’ marks is in reality not
the latter’s LPG product after the same had been illegally refilled.

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. Passing off (or palming off)
takes place where the defendant, by imitative devices on the general
appearance of the goods, misleads prospective purchasers into buying his
merchandise under the impression that they are buying that of his
competitors.

In the present case, respondents pertinently observed that by refilling

and selling LPG cylinders bearing their registered marks, petitioners are
selling goods by giving them the general appearance of goods of another
manufacturer.

Wherefore, petition denied.

ARNEL TY, MARIE TY, JASON ONG, WILLY DY, and ALVIN TY,
vs. NBI SUPERVISING AGENT MARVIN E. DE JEMIL, PETRON
GASUL DEALERS ASSOCIATION, and TOTALGAZ DEALERS
ASSOCIATION
G.R. No. 182147 | December 15, 2010

NOTE:

Mere unauthorized use of a container bearing a registered trademark

in connection with the sale, distribution or advertising of goods or services
which is likely to cause confusion, mistake or deception among the
buyers/consumers can be considered as trademark infringement.

FACTS:

The NBI conducted surveillance operations on the premises of Omni

Gas Corporation (Omni). Omni was suspected of underfilling LPG cylinders
and engaging in illegal trading of underfilled LPG cylinders in violation of
B.P. 33. After a test-buy, it was found that the LPG cylinders were without
valve seals and one of the cylinders was actually underfilled. The NBI also
seized several LPG cylinders bearing the embossed brand names of Shellane,
Gasul, and Totalgaz but were marked as Omnigas.

Petitioner Omnigas contends that the branded LPG cylinders are

owned by end-user customers and not by the major petroleum companies,
i.e., Petron, Shell and Total. Omni further argues that granting Petron, Total
and Shell still own their respective branded LPG cylinders already sold to
consumers, such fact will not bind third persons, like Omni, who is not privy
to the agreement between the buying consumers and said major petroleum
companies. Thus, a subsequent transfer by the customers of Petron, Total
and Shell of the duly marked or stamped LPG cylinders through swapping,
for example, will effectively transfer ownership of the LPG cylinders to the
transferee, like Omni.
 Respondents on the other hand contend that even if the branded LPG
cylinders were indeed owned by customers, such fact does not authorize
Omni to refill these branded LPG cylinders without written authorization
from the brand owners Shell, Petron and Total.

ISSUE:

Whether or not there is infringement of property rights involving

unauthorized sale and refilling of LPG cylinders.

HELD:

Yes.

In Yao, Sr. v. People, a case involving criminal infringement of

property rights under Sec. 155 of RA 8293, the Supreme Court held that from
Sec. 155.1 of RA 8293—mere unauthorized use of a container bearing a
registered trademark in connection with the sale, distribution or advertising
of goods or services which is likely to cause confusion, mistake or deception
among the buyers/consumers can be considered as trademark infringement.

Pursuant to the Intellectual Property Code of the Philippines, brand

owners are deemed owners of their duly embossed, stamped and marked
LPG cylinders even if these are possessed by customers or consumers.

Also, the pernicious practice of tampering or changing the appearance

of a branded LPG cylinder to look like another brand violates the brand
owner’s property rights as infringement under Sec. 155.1 of RA 8293.
TORRES V. PEREZ
G.R. NO. 188225; NOVEMBER 28, 2011

NOTE:

The key elements of unfair competition are “deception, passing off

and fraud upon the public.”

FACTS:

Spouses Perez own RGP Footwear Manufacturing (RGP), which

supplies ladies’ shoes to Shoe Mart. When they met Torres, they urged her to
form a partnership with their daughter, Sasay. Petitioner and Sasay formed
the Sasay’s Closet Co. (SCC) which was engaged in supplying and retailing of
garments such as underwear. SCC used the trademark, “Naturals” and their
products were supplied to SM with a vendor code “190501” for identification.

The partnership turned sour between the petitioner and Sasay so the
mother, Imelda, took over the responsibilities of Sasay. However,
misunderstanding between the parties ensued which led to the dissolution of
the partnership. The petitioner, later on, discovered that underwear products
bearing the brand “Natural” were still being sold in SM but under the vendor
code of the RGP.

Torres alleged that the spouses are guilty for unfair competition
because they had deceived the public that the brand owner was SCC when in
fact the vendor code being used was that of the RGP.

The contention of the spouses was that there was no unfair competition
because the use of the vendor code was to make certain that SM will pay them
and not the petitioner.

ISSUE:

Whether or not guilty of unfair competition.

HELD:

No.

The elements of the crime were not present. The key elements of unfair
competition are “deception, passing off and fraud upon the public.” No
deception can be imagined to have been caused on the public through
different vendor codes, which are used by SM only for the identification of
suppliers’ products. What the law punishes is the act of giving one’s goods
the general appearance of the goods of another which would likely mislead
the buyer into believing that such goods belong to the latter.

Petition dismissed.
ROBERTO CO V. KENG HUAN JERRY YEUNG AND EMMA
YEUNG
G.R. NO. 212705; SEPTEMBER 10, 2014

NOTE:

Unfair competition is 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.

FACTS:

On July 27, 2000, Sps. Yeung filed a civil complaint for trademark
infringement and unfair competition before the RTC against Ling Na Lau,
her sister Pinky Lau (the Laus), and Co for allegedly conspiring in the sale of
counterfeit Greenstone products to the public.

In the complaint, Sps. Yeung averred that on April 24, 2000, Emma
yeung’s brother, Jose Ruivivar III (Ruivivar), bought a bottle of Greenstone
from Royal Chinese Drug Store (Royal) in Binondo, Manila, owned by Ling
Na Lau. However, when he used the product, Ruivivar doubted its
authenticity considering that it had a different smell, and the heat it
produced was not as strong as the original Greenstone he frequently used.
Having been informed by Ruivivar of the same, Yeung, together with his son,
John Philip, went to Royal on May 4, 2000 to investigate the matter, and,
there, found seven (7) bottles of counterfeit Greenstone on display for sale.

Meanwhile, the Laus denied selling Greenstone and claimed that the
seven (7) items of Tienchi were left by an unidentified male person at the
counter of their drug store and that when Yeung came and threatened to
report the matter to the authorities, the items were surrendered to him. The
RTC Ruling

RTC ruled in favor of Sps. Yeung.

 It found that the Sps. Yeung committed unfair competition through
their conspiracy to sell counterfeit Greenstone products that resulted in
confusion and deception not only to the ordinary purchaser, like Ruivivar,
but also to the public. It, however, did not find the Laus and Co liable for
trademark infringement as there was no showing that the trademark
"Greenstone" was registered at the time the acts complained of occurred, i.e.,
in May 2000. Dissatisfied, the Laus and Co appealed to the CA.

The CA affirmed the RTC Decision.

ISSUE:

Whether or not the CA correctly upheld Co’s liability for unfair

competition.

HELD:

Yes.

Unfair competition is 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. This takes place where the defendant gives his goods
the general appearance of the goods of his competitor with the intention of
deceiving the public that the goods are those of his competitor.

Here, it has been established that Co conspired with the Laus in the
sale/distribution of counterfeit Greenstone products to the public, which
were even packaged in bottles identical to that of the original, thereby giving
rise to the presumption of fraudulent intent. In light of the foregoing
definition, it is thus clear that Co, together with the Laus, committed unfair
competition, and should, consequently, be held liable therefor. Although
liable for unfair competition, the Court deems it apt to clarify that Co was
properly exculpated from the charge of trademark infringement
considering that the registration of the trademark "Greenstone" –
essential as it is in a trademark infringement case – was not proven to
have existed during the time the acts complained of were committed, i.e.,
in May 2000.

In this relation, the distinctions between suits for trademark

infringement and unfair competition prove useful: (a) the former is the
unauthorized use of a trademark, whereas the latter is the passing off
of one's goods as those of another; (b) fraudulent intent is unnecessary in
the former, while it is essential in the latter; and (c) in the former, prior
registration of the trademark is a pre-requisite to the action, while it is
not necessary in the latter.
SHANG PROPERTIES REALTY CORPORATION (formerly THE
SHANG GRAND TOWER CORPORATION) and SHANG
PROPERTIES, INC. (formerly EDSA PROPERTIES HOLDINGS,
INC.), vs. ST. FRANCIS DEVELOPMENT CORPORATION.
G.R. No. 190706 July 21, 2014

NOTE:

The "true test" of unfair competition has thus been "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."

FACTS:

Respondent St. Francis Square Commercial Center filed separate

complaints against petitioners before the IPO - Bureau of Legal Affairs
(BLA), namely:

(a) an intellectual property violation case for unfair competition,

false or fraudulent declaration, and damages arising from petitioners’ use
and filing of applications for the registration of the marks "THE ST.
FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-LA PLACE,"; and

Respondent added that as a result of its continuous use of the

mark "ST. FRANCIS" in its real estate business,it has gained substantial
goodwill with the public that consumers and traders closely identify the
said mark with its property development projects.

Petitioners claims that they contended that respondent is barred

from claiming ownership and exclusive use of the mark "ST. FRANCIS"
because the same is geographically descriptive ofthe goods or
services for which it is intended to be used.7 This is because respondent’s as
well as petitioners’ real estate development projects are located along the
streets bearing the name "St. Francis," particularly, St. Francis Avenue and
St. Francis Street (now known as Bank Drive),8 both within the vicinity of the
Ortigas Center.
ISSUE:

Whether or not petitioners are guilty of unfair competition in using the

marks "THE ST. FRANCIS TOWERS" and "THE ST. FRANCIS SHANGRI-
LA PLACE."

HELD:

No.

PETITIONER SHANG PROPERTIES REALTY CORPORATION is not

guilty of unfair competition.

In the case of Republic Gas Corporation v. Petron Corporation, the

Court has ruled that unfair competition presupposes that the defendant gives
his goods the general appearance of the goods of his competitor with the
intention of deceiving the public that the goods are those of his competitor."
The "true test" of unfair competition has thus been "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." Based on the foregoing, it
is therefore essential to prove the existence of fraud, or the intent to deceive,
actual or probable, determined through a judicious scrutiny of the s of the
case.

HERE, there is no showing that petitioners gave their goods/services

the general appearance that it was respondent which was offering the
same to the public. Neither did petitioners employ any means to induce
the public towards a false belief that it was offering respondent’s
goods/services. Nor did petitioners make any false statement or commit acts
tending to discredit the goods/services offered by respondent. Accordingly,
the element of fraud which is the core of unfair competition had not been
established.

The Court finds the element of fraud to be wanting; hence, there

can be no unfair competition. The CA’s contrary conclusion was faultily
premised on its impression that respondent had the right to the exclusive
use of the mark "ST. FRANCIS," for which the latter had purportedly
established considerable goodwill. The CA disregarded the
geographically descriptive nature of the mark "ST. FRANCIS" which
thus bars its exclusive appropriability, unless a secondary meaning
is acquired. Thus, the respondent cannot appropriate the word "ST.
FRANCIS".

The reason why the respondent cannot acquire it is under:

SEC. 123. Registrability. –

123.1 A mark cannot be registered if it:

(j) Consists exclusively of signs or of indications that may serve in trade

to designate the kind, quality, quantity, intended purpose, value,
geographical origin, time or production of the goods or rendering of the
services, or other characteristics of the goods or services.
AS TO THE DECISION OF THE ISSUE WHETHER OR NOT THE
RESPONDENT GAINED substantial goodwill regarding the mark st
francis.

Section 168.2proceeds to the core of the provision, describing

forthwith who may be found guilty of and subject to an action of unfair
competition – that is, "[a]ny person who shall 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.

HERE, the Court disagrees with the CA that petitioners committed

unfair competition due to the mistaken notion that petitioner had
established goodwill for the mark "ST. FRANCIS" precisely because said
circumstance, by and of itself, does not equate to fraud under the parameters
of Section 168 of the IP Code as above-cited.
CENTURY CHINESE MEDICINE CO., MING SENG CHINESE
DRUGSTORE, XIANG JIAN CHINESE DRUG STORE, TEK SAN
CHINESE DRUG STORE, SIM SIM CHINESE DRUG STORE, BAN
SHIONG TAY CHINESE DRUG STORE and/or WILCENDO TAN
MENDEZ, SHUANG YING CHINESE DRUGSTORE, and
BACLARAN CHINESE DRUG STORE, Petitioners, vs. PEOPLE OF
THE PHILIPPINES and LING NA LAU, Respondents.
G.R. No. 188526; November 11, 2013

NOTE:

Applicability of search warrant for violations of unfair competition and

infringement.

FACTS:

Respondent Ling Na Lau, doing business under the name and style
Worldwide Pharmacy, is the sole distributor and registered trademark owner
of TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap as shown by
Certificate of Registration 4-2000-009881 issued to her by the Intellectual
Property Office (IPO) for a period of ten years from August 24, 2003.

On November 7, 2005, her representative, Ping Na Lau, (Ping) wrote a

letter addressed to National Bureau of Investigation (NBI) requesting
assistance for an investigation on several drugstores which were selling
counterfeit whitening papaya soaps bearing the general appearance of their
products.

On November 21, 2005, Agent Furing applied for the issuance of search
warrants before the Regional Trial Court (RTC), Branch 143, Makati City,
against petitioners and other establishments for violations of unfair
competition and trademark infringement.

On November 23, 2005, after conducting searching questions upon

Agent Furing and his witnesses, the RTC granted the applications and issued
3 Search Warrants for unfair competition and 5 Search Warrants for
trademark infringement against petitioners. Later, petitioners applied for
the quashal of the search warrants on the ground of prejudicial question as
respondent filed a criminal case against the former.

Then the parties entered into a compromise with petitioners

acknowledging the rights of respondents and that from then, they will have
to cease and desist from making use of their products.

Thereafter, the RTC issued its Order sustaining the Motion to Quash
the Search Warrants for lack of probable cause.

CA reversed the decision of RTC in quashing the warrants the CA found

that the search warrants were in anticipation of criminal actions which are
to be instituted against petitioners; thus, Rule 126 of the Rules of Criminal
Procedure was applicable. It also ruled that the basis for the applications for
issuance of the search warrants on grounds of trademarks infringement and
unfair competition was the trademark TOP GEL T.G. & DEVICE OF A LEAF;
that respondent was the registered owner of the said trademark, which gave
her the right to enforce and protect her intellectual property rights over it by
seeking assistance from the NBI.

ISSUE:

Whether or not the RTC in issuing the assailed search warrants.

HELD:

Yes.

The applications for the issuance of the assailed search warrants were
for violations of Sections 155 and 168, both in relation to Section 170 of
Republic Act (RA) No. 8293, otherwise known as the Intellectual Property
Code of the Philippines. Section 155, in relation to Section 170, punishes
trademark infringement; while Section 168, in relation to Section 170,
penalizes unfair competition.

However, A.M. No. 02-1-06-SC, which provides for the Rules on the
Issuance of the Search and Seizure in Civil Actions for Infringement of
Intellectual Property Rights, is not applicable in this case as the search
warrants were not applied based thereon, but in anticipation of criminal
actions for violation of intellectual property rights under RA 8293. Hence,
Rule 126 of the Rules of Criminal Procedure applies. Rule 126 of the Revised
Rules of Court, which governs the issuance of the assailed Search Warrants.

It is clear that the requisites for the issuance of the search warrants had
been complied with and that there is probable cause to believe that an offense
had been committed and that the objects sought in connection with the
offense were in the places to be searched. The offense pertains to the alleged
violations committed by respondents-appellees upon the intellectual
property rights of herein private complainant-appellant, as holder of the
trademark TOP GEL T.G. & DEVICE OF A LEAF under Certificate of
Registration No. 4-2000-009881, issued on August 24, 2003 by the
Intellectual Property Office. Hence, it appears that there is no more
controversy as to who is the rightful holder of the trademark TOP GEL T.G.
& DEVICE OF A LEAF. Therefore, respondent, as owner of such registered
trademark has the right to the issuance of the search warrants.
WILLAWARE PRODUCTS CORPORATION, Petitioner, vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.
G.R. No. 195549; September 3, 2014

NOTE:

Unfair competition under Article 28 of the Civil Code.

FACTS:

Sometime in November 2000, [respondent] discovered that

[petitioner] had been manufacturing and distributing the same automotive
parts with exactly similar design, same material and colors but was selling
these products at a lower price as [respondent’s] plastic-made automotive
parts and to the same customers.

As its Affirmative Defenses, [petitioner] claims that there can be no

unfair competition as the plastic-made automotive parts are mere
reproductions of original parts and their construction and composition
merely conforms to the specifications of the original parts of motor vehicles
they intend to replace. Thus, [respondent] cannot claim that it "originated"
the use of plastic for these automotive parts. Even assuming for the sake of
argument that [respondent] indeed originated the use of these plastic
automotive parts, it still has no exclusive right to use, manufacture and sell
these as it has no patent over these products. Furthermore, [respondent] is
not the only exclusive manufacturer of these plastic-made automotive parts
as there are other establishments which were already openly selling them to
the public. After trial on the merits, the RTC ruled in favor of respondent. It
ruled that petitioner clearly invaded the rights or interest of respondent by
deliberately copying and performing acts amounting to unfair competition
and ordered them to pay damages.

CA affirmed the ruling of the lower court.

ISSUE:

Whether or not petitioner committed acts amounting to unfair

competition under Article 28 of the Civil Code.

HELD:

Yes.

This instant case falls under Article 28 of the Civil Code on human
relations, and not unfair competition under Republic Act No. 8293, as the
present suit is a damage suit and the products are not covered by patent
registration. A fortiori, the existence of patent registration is immaterial in
the present case.

The concept of "unfair competition" under Article 28 is very much

broader than that covered by intellectual property laws.

Article 28 of the Civil Code provides that "unfair competition in

agricultural, commercial or industrial enterprises or in labor through the use
of force, intimidation, deceit, machination or any other unjust, oppressive or
high-handed method shall give rise to a right of action by the person who
thereby suffers damage."

From the foregoing, it is clear that what is being sought to be prevented

is not competition per se but the use of unjust, oppressive or high- handed
methods which may deprive others of a fair chance to engage in business or
to earn a living. Plainly, what the law prohibits is unfair competition and not
competition where the means used are fair and legitimate.

In order to qualify the competition as "unfair," it must have two

characteristics: (1) it must involve an injury to a competitor or trade rival,
and (2) it must involve acts which are characterized as "contrary to good
conscience," or "shocking to judicial sensibilities," or otherwise unlawful; in
the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The
public injury or interest is a minor factor; the essence of the matter appears
to be a private wrong perpetrated by unconscionable means.

Here, both characteristics are present. First, both parties are

competitors or trade rivals, both being engaged in the manufacture of plastic-
made automotive parts. Second, the acts of the petitioner were clearly
"contrary to good conscience" as petitioner admitted having employed
respondent’s former employees, deliberately copied respondent’s products
and even went to the extent of selling these products to respondent’s
customers.

To bolster this point, the CA correctly pointed out that petitioner’s

hiring of the former employees of respondent and petitioner’s act of copying
the subject plastic parts of respondent were tantamount to unfair
competition.
COPYRIGHT CASES
ABS-CBN CORPORATION, Petitioner,vs. FELIPE GOZON,
GILBERTO R. DUAVIT, JR., MARISSA L. FLORES, JESSICA A.
SORO, GRACE DELA PENA-REYES, JOHN OLIVER T.
MANALASTAS, JOHN DOES AND JANE DOES, Respondents. G.R.
No. 195956 March 11, 2015

NOTES:

A. Under the Code, "works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of their
content, quality and purpose." These include "[a]udiovisual works
and cinematographic works and works produced by a process
analogous to cinematography or any process for making audiovisual
recordings." Thus, the news footage is copyrightable.
B. In determining fair use, several factors are considered, including the
nature of the copyrighted work, and the amount and substantiality of
the person used in relation to the copyrighted work as a whole.
C. Infringement under the Intellectual Property Code is malum
prohibitum. The Intellectual Property Code is a special law. Thus,
good faith is not a defense.

FACTS:

Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi

militants and as a condition for his release, a demand was made for the
withdrawal of Filipino troops in Iraq. After negotiations, he was released by
his captors and was scheduled to return to the country in the afternoon of 22
July 2004.

ABS-CBN conducted live audio-video coverage of and broadcasted the

arrival of Angelo dela Cruz at the Ninoy Aquino International Airport (NAIA)
and the subsequent press conference." ABS-CBN allowed Reuters Television
Service (Reuters) to air the footages it had taken earlier under a special
embargo agreement.
 ABS-CBN alleged that under the special embargo agreement, any of the
footages it took would be for the "use of Reuter’s international subscribers
only, and shall be considered and treated by Reuters under ‘embargo’ against
use by other subscribers in the Philippines. . . . [N]o other Philippine
subscriber of Reuters would be allowed to use ABS-CBN footage without the
latter’s consent."

GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela Peña-Reyes,

and Manalastas are officers, "assigned and stationed news reporters and
technical men at the NAIA for its live broadcast and non-live news coverage
of the arrival of dela Cruz." GMA-7 subscribes to both Reuters and Cable
News Network (CNN). It received a live video feed of the coverage of Angelo
dela Cruz’s arrival from Reuters.

GMA-7 immediately carried the live news feed in its program "Flash
Report," together with its live broadcast. Allegedly, GMA-7 did not receive
any notice or was not aware that Reuters was airing footages of ABS-CBN.
GMA-7’s news control room staff saw neither the "No Access Philippines"
notice nor a notice that the video feed was under embargo in favor of ABS-
CBN.

On August 13, 2004, ABS-CBN filed the Complaint for copyright

infringement under Sections 177 and 211 of the Intellectual Property Code.

Respondent’s contention: a) The said event footage is not

copyrightable, thus, copyright infringement cannot be committed and b)
good faith may be raised as a defense in the case.

ISSUES:

1. Whether or not news footage is copyrightable under the law;

2. Whether or not there was fair use of the broadcast material; and,
 3. Whether or not good faith is a defense in a criminal prosecution for
violation of the Intellectual Property Code.

HELD:

1. Yes. The news footage is copyrightable.

Under the Code, "works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of their content,
quality and purpose." These include "[a]udiovisual works and
cinematographic works and works produced by a process analogous to
cinematography or any process for making audiovisual recordings."

To be clear, it is the event itself or the arrival of Angelo dela Cruz which
is not copyrightable because that is the newsworthy event. However, any
footage created from the event itself, in this case the arrival of Angelo dela
Cruz, are intellectual creations which are copyrightable. Thus, the footage
created by ABS-CBN during the arrival of Angelo dela Cruz, which includes
the statements of Dindo Amparo, are copyrightable and protected by the laws
on copyright.

It is true that under Section 175 of the Intellectual Property Code,

"news of the day and other miscellaneous facts having the character of mere
items of press information" are considered unprotected subject
matter. However, the Code does not state that expression of the news of the
day, particularly when it underwent a creative process, is not entitled to
protection.

The copyright does not extend to an idea, procedure, process, system,

method of operation, concept, principle, or discovery, regardless of the form
in which it is described, explained, illustrated, or embodied in such work.
“An idea must be spoken to a little before it will explain itself."
 In the oft-cited case of Baker vs. Selden, the United States Supreme
Court held that only the expression of an idea is protected by copyright, not
the idea itself.

2. No. The Angelo dela Cruz footage does not fall under the rule on
Section 212.4 and 212.2 of the Intellectual Property Code on fair use of the
broadcast.

Furthermore, the footage used does not fall under the contemplation
of Section 212.2 of the Intellectual Property Code. Section 212 refers to
copyrighted material which are short portions of an artist’s performance
under Section 203, or a producer’s sound recordings under Sections 208 and
209. Section 212 does not refer to actual use of video footage of another as
its own.

The footage used by [respondents] was not a short excerpt, as it was

aired over one and a half minutes. Since the broad cast was not short, thus,
fair use does not apply

In determining fair use, several factors are considered, including the

nature of the copyrighted work, and the amount and substantiality of the
person used in relation to the copyrighted work as a whole.

Given that a substantial portion of the Angelo dela Cruz footage was
utilized by GMA-7 for its own, its use can hardly be classified as fair use.
Hence, [respondents] did not use the Angelo dela Cruz [footage] following
the provisions on fair use.

The Court of Appeals seem to contradict itself when it relied on the

provisions of fair use in its assailed rulings considering that it found that the
Angelo dela Cruz footage is not copyrightable, given that the fair use
presupposes an existing copyright. Thus, it is apparent that the findings of
the Honorable Court of Appeals are erroneous and based on wrong
assumptions.
 3. No. Respondents cannot invoke the defense of good faith to
argue that no probable cause exists.

Infringement under the Intellectual Property Code is malum

prohibitum. The Intellectual Property Code is a special law. Copyright is a
statutory creation: Crimes mala prohibita do not require knowledge or
criminal intent.

Respondents are involved and experienced in the broadcasting

business. They knew that there would be consequences in carrying ABS-
CBN’s footage in their broadcast. That is why GMA-7 allegedly cut the feed
from Reuters upon seeing ABS-CBN’s logo and reporter.

Petitioners, being corporate officers and/or directors may themselves

be individually held answerable for the crime. . . . The existence of the
corporate entity does not shield from prosecution the corporate agent who
knowingly and intentionally caused the corporation to commit a crime. Thus,
petitioners cannot hide behind the cloak of the separate corporate
personality of the corporation to escape criminal liability.
IN THE MATTER OF THE CHARGES OF PLAGIARISM, ETC.
AGAINST ASSOCIATE JUSTICE MARIANO C. DEL CASTILLO
A.M. No. 10-7-17-SC

NOTE:

In writing judicial decisions, a judge should make the proper

attribution in copying passages from any judicial decision, statute,
regulation, or other Works of the Government. However, the failure to
make such attribution does not violate the Law on Copyright.

FACTS:

An administrative disciplinary case was filed against Supreme Court

Justice Mariano C. Del Castillo for plagiarism charges on the Vinuya, et al.
v. Executive Secretary decision. By a 10-2 vote, the SC resolved to dismiss
the plagiarism charges against Justice del Castillo. Malicious intent was
viewed as an essential element, as “plagiarism is essentially a form of fraud
where intent to deceive is inherent”. Justice del Castillo never intended to
claim as the original author of the passages. The Court, thus, declared that
“only errors [of judges] tainted with fraud, corruption, or malice are subject
of disciplinary action” and these were not present in Justice del Castillo’s
case; the failure was not attended by any malicious intent not to attribute the
lifted passages to the foreign authors.

J. CARPIO’S DISSENTING OPINION:

The Judge Must Follow the Law on Copyright

a. Copying from Works of the Government

In writing judicial decisions, a judge should make the proper

attribution in copying passages from any judicial decision, statute,
regulation, or other Works of the Government. However, the failure to make
such attribution does not violate the Law on Copyright. The law expressly
provides that Works of the Government are not subject to copyright. But,
misquoting or twisting, with or without attribution, any judicial decision,
statute, regulation or other Works of the Government in judicial writing, if
done to mislead the parties or the public, is actionable.

b. Copying from Pleadings of Parties

In writing judicial decisions, the judge may copy passages from the
pleadings of the parties with proper attribution to the author of the pleading.
However, the failure to make the proper attribution is not actionable. Still,
misquoting or twisting, with or without attribution, any passage from the
pleadings of the parties, if done to mislead the parties or the public, is
actionable.

c. Copying from Textbooks, Journals and other Non-

Government Works

The judge may copy passages from textbooks, journals and other non-
government works with proper attribution. However, whether the failure to
make the proper attribution is actionable or not depends on the nature of the
passages copied.

If the work copied without proper attribution is copyrighted, the failure

to make such attribution violates Section 193 of the IP Code, which requires
proper attribution to show respect for the moral rights of the author. The
moral rights under Section 193 arise only if the work of an author is
copyrighted. If the work is not copyrighted, then there are no moral rights to
the work. In contrast, Section 184(k) of the IP Code clearly authorizes a judge
to copy copyrighted works for "any use" in judicial proceedings, which means
the judge, in writing his decision, can copy passages beyond the quantitative
limitations of "fair-use" under Section 184(b). Section 184(k) is silent on the
obligation of the judge to make the proper attribution, unlike Section 184(b)
on fair-use by the public which expressly requires a proper attribution.
 However, while the author has no right to demand economic
compensation from the judge or the government for the unlimited and public
use of his work in a judicial decision, the law requires that "the authorship of
the works be attributed to him x x x in connection with the public use of his
work." In short, the judge is legally obligated to make the proper attribution
because Section 193 protects the moral rights of the author.

The moral rights of an author are independent of the author’s

economic rights to his work in the sense that even if the author assigns his
work, the moral rights to the work remain with him, being inalienable. Any
violation of an author’s moral rights entitles him to the same remedies as a
violation of the economic rights to the work, whether such economic rights
are still with him or have been assigned to another party. Thus, while called
"moral rights," these rights are legally enforceable.

Two essential elements of an author’s moral rights are:

i. The right to attribution - the right to attribution or paternity is
the right of the author to be recognized as the originator or father
of his work, a right expressly recognized in Section 193.1 of the
Intellectual Property Code.
ii. The right to integrity - the right of the author to prevent any
distortion or misrepresentation of his work, a right expressly
recognized in Section 193.3 of the Code.

J. SERENO’S DISSENTING OPINION:

Distinctions between the effect of appropriating copyrighted

works and works in the public domain:

1. The infringement of copyright necessitates a framework for

characterizing the expression of ideas as property. It poses a question
of whether there exists harm in a form which is economically
quantifiable. Plagiarism, on the other hand, covers a much wider range
of acts.
2. An action for violation of copyright – which may take on either a
criminal and a civil aspect, or even both – does not sufficiently remedy
the broader injury inherent in plagiarism.

3. Plagiarism is not necessarily copyright infringement, and vice versa. In

some ways plagiarism is broader than infringement, in that it can
include the copying of ideas, or of expression not protected by
copyright, that would not constitute infringement, and it can include
the copying of small amounts of material that copyright law would
disregard.

4. Plagiarism, with its lack of attribution, severs the connection between

the original author's name and the work. A plagiarist, by falsely
claiming authorship of someone else's material, directly assaults the
author's interest in receiving credit. In contrast, attribution is largely
irrelevant to a claim of copyright infringement. Infringement can occur
even when a work is properly attributed if the copying is not
authorized–for example, a pirated edition of a book produced by
someone who does not own the publication rights.

5. The recognition of plagiarism as an offense that can stand

independently of copyright infringement allows a recognition that acts
of plagiarism are subject to reproof irrespective of whether the work is
copyrighted or not.
RAPPLER, INC. V. ANDRES D. BAUTISTA
G.R. NO. 222702; APRIL 5, 2006

NOTE:

‘Limitations on copyright under Section 184.1 (c) of the Intellectual

Property Code”

FACTS:

Petitioner Rappler, Inc. filed a petition for certiorari and prohibition

against Andres D. Bautista (respondent), in his capacity as Chairman of the
Commission on Elections (COMELEC).

The MOA in issue revolves around the 2016 Presidential and Vise-
Presidential Debates and was executed by the COMELEC through its
Chairperson, Andres D. Bautista, and the Kapisanan ng mga Brodkaster ng
Pilipinas (KBP), and various media networks, including the petitioner

In a meeting organized by the respondent on September 21, 2015, over

the upcoming "PiliPinas 2016 Debates," respondent proposed that petitioner
and Google, Inc. be in charge of online and social media engagement in which
petitioner therafter sent proposed guidelines and conduct for the debates.
However, in a meeting held 19 October 2015, petitioner and Google's
participation were dropped in favor of the online outlets owned by the Lead
Networks via a draft made by the COMELEC although it was decided that the
lone vice-presidential debate will be sponsored by CNN, Business Mirror,
and petitioner. Petitioner alleged that the draft MOA permitted online
streaming, provided proper attribution is given the Lead Network.

Petitioner communicated with respondent its concerns regarding

certain provisions of the MOA particularly regarding the coverage and online
streaming of the presidential debates. Respondent assured petitioner that its
concerns will be addressed afterwards, but it has to sign the MOA because
time was of the essence. Petitioner signed the MOA believing in good faith
that the issues will be resolved by the respondent.

Several attempts to contact the respondent were made but all proved
to be futile. The petition seeks to nullify certain provisions of a Memorandum
of Agreement (MOA) on the 2016 presidential and vice-presidential debates,
in which petitioner is discriminated particularly as regards the MOA
provisions on live audio broadcast via online streaming. Petitioner argues
that the MOA grants radio stations the right to simultaneously broadcast live
the audio of the debates, even if the radio stations are not obliged to perform
any obligation under the MOA. Yet, this right to broadcast by live streaming
online the audio of the debates is denied petitioner who is a signatory to the
MOA, and other online media entities, which also have the capacity to live
stream the audio of the debates.

ISSUE:

Whether the debates should be allowed to be broadcasted on other

websites, including petitioners without infringement of copyright.

HELD:

Respondent should implement Part VI (C), paragraph 19 and Part VI

(D), paragraph 20 of the MOA, which reads:
xxxxx
D. ONLINE STREAMING

17. Live broadcast the debates produced by the Lead Networks on their
respective web sites and social media sites for free viewing by the public;
18. Maintain a copy of the debate produced by the Lead Network on its on-
line site(s) for free viewing by the public during the period of elections or
longer;
19. Subject to copyright conditions or separate negotiations with the Lead
Networks, allow the debates they have produced to be shown or streamed
on other websites;
 The MOA allows the live streaming of the debates subject only to
compliance with the "copyright conditions." Once petitioner complies with
the copyright conditions, petitioner can exercise the right to live stream the
audio of the debates as expressly allowed by the MOA. The "copyright
conditions" refer to the limitations on copyright as provided under Section
184.1 (c) of the Intellectual Property Code which provides that:

“The reproduction or communication to the public by mass media of

articles on current political, social, economic, scientific or religious topic,
lectures, addresses and other works of the same nature, which are delivered
in public if such use is for information purposes and has not been expressly
reserved; Provided, That the source is clearly indicated”

Once the conditions imposed under Section 184.1 (c) of the IPC are
complied with, the information - in this case the live audio of the debates -
now forms part of the public domain. There is now freedom of the press to
report or publicly disseminate the live audio of the debates. The freedom of
the press to report and disseminate the live audio of the debates, subject to
compliance with Section 184. l (c) of the IPC, can no longer be infringed or
subject to prior restraint.

The presidential and vice-presidential debates are held primarily for

the benefit of the electorate to assist the electorate in making informed
choices on election day. Under the Intellectual Property Code, the debates
fall under "addresses and other works of the same nature.”

In the case at bar, all conditions are present.

MICROSOFT CORPORATION vs. MANANSALA
G.R. No. 166391; October 21, 2015

NOTE:

The mere sale of the illicit copies of the software programs was
enough by itself to show the existence of probable cause for copyright
infringement. There was no need for the petitioner to still prove who copied,
replicated or reproduced the software programs.

FACTS:

Respondent Manansala, without authority from petitioner, was

engaged in distributing and selling Microsoft computer software programs.

Private investigator Sacriz, accompanied by an agent from NBI, was

able to purchase six CD-ROMs containing various computer programs
belonging to Petitioner. Search Warrant was issued against the premises of
the private respondent, and the search yielded several illegal copies of
Microsoft programs.

Petitioner, through counsel, tiled an Affidavit-Complaint in the DOJ

based on the results of the search and seizure operation conducted on private
respondent's premises. However, State Prosecutor dismissed the charge
against private respondent for violation of Sec. 29 of PD 49, stating that no
there is proof that respondent was the one who really printed or copied the
products of complainant for sale in his store. CA affirmed the decision on
appeal.

Petitioner files a Petition for Review on Certiorari, insisting that

printing or copying was not essential in the commission of the crime of
copyright infringement under Section 29 of Presidential Decree No. 49;
hence, contrary to the holding of the DOJ, as upheld by the CA, the mere
selling of pirated computer software constituted copyright infringement.
ISSUE:

Whether or not Respondent is guilty of copyright infringement.

HELD:

Court agreed with the Petitioners and found the Respondents guilty of
copyright infringement.

Section 5. Copyright shall consist in the exclusive right;

(A) To print, reprint, publish, copy, distribute, multiply, sell, and make
photographs, photo-engravings, and pictorial illustrations of the
works;

(B) To make any translation or other version or extracts or arrangements

or adaptations thereof; to dramatize it if it be a non-dramatic work; to
convert it into a non-dramatic work if it be a drama; to complete or
execute if it be a model or design;

(C) To exhibit, perform, represent, produce, or reproduce, the work in any

manner or by any method whatever for profit or otherwise; it not
reproduced in copies for sale, to sell any manuscript or any record
whatsoever thereof;

(D) To make any other use or disposition of the work consistent with the
laws of the land.

Accordingly, the commission of any of the acts mentioned in Sec. 5 of

PD 49 without the copyright owner's consent constituted actionable
copyright infringement.

In Columbia Pictures, Inc. v. Court of Appeals, the Court has

emphatically declared:
 Infringement of a copyright is a trespass on a private domain owned
and occupied by the owner of the copyright, and, therefore, protected by
law, and infringement of copyright, or piracy, which is a synonymous term
in this connection, consists in the doing by any person, without the consent
of the owner of the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.

The "gravamen of copyright infringement," according to NBI-

Microsoft Corporation v. Hwang: … is not merely the unauthorized
manufacturing of intellectual works but rather the unauthorized
performance of any of the acts covered by Section 5. Hence, any person who
performs any of the acts under Section 5 without obtaining the copyright
owners prior consent renders himself civilly and criminally liable for
copyright infringement.

The assailed decision of the CA ruled in favor of the Respondent, based

on the construction of the term “and” in the Sec.5(a) of PD 49. The Court
corrects this by stating that the conjunctive "and" should not be taken in its
ordinary acceptation, but should be construed like the disjunctive "or" if the
literal interpretation of the law would pervert or obscure the legislative
intent. To accept the CA's reading and interpretation is to accept absurd
results because the violations listed in Sec. 5(a) of PD 49 - "To print, reprint,
publish, copy, distribute, multiply, sell, and make photographs, photo-
engravings, and pictorial illustrations of the works" — cannot be carried out
on all of the classes of works enumerated in Sec. 2 of PD 49, viz.:

Section 2. - The Rights granted by this Decree shall, from the moment
of creation, subsist with respect to any of the following classes of works:

(A) Books, including composite and encyclopedic works, manuscripts,

directories, and gazetteers;

(B) Periodicals, including pamphlets and newspapers;

(C) Lectures, sermons, addresses, dissertations prepared for oral
delivery;

(D) Letters;

(E) Dramatic or dramatico-musical compositions; choreographic works

and entertainments in dumb shows, the acting form of which is fixed
in writing or otherwise;

(F) Musical compositions, with or without words;

(G) Works of drawing, painting, architecture, sculpture, engraving,

lithography, and other works of art; models or designs for works of
art;

(H) Reproductions of a work of art;

(I) Original ornamental designs or models for articles of manufacture,

whether or not patentable, and other works of applied art;

(J) Maps, plans, sketches, and charts;

(K) Drawings, or plastic works of a scientific or technical character;

(L) Photographic works and works produced by a process analogous to

photography; lantern slides;

(M) Cinematographic works and works produced by a process analogous

to cinematography or any process for making audio-visual recordings;

(N) Computer programs;

(O) Prints, pictorial, illustration, advertising copies, labels, tags, and box
wraps;
 (P) Dramatization, translations, adaptations, abridgements,
arrangements and other alterations of literary, musical or artistic
works or of works of the Philippine Government as herein defined,
which shall be protected as provided in Section 8 of this Decree.

(Q) Collection of literary, scholarly, or artistic works or of works referred

to in Section 9 of this Decree which by reason of the selection and
arrangement of their contents constitute intellectual creations, the
same to be protected as such in accordance with Section 8 of this
Decree.

(R) Other literary, scholarly, scientific and artistic works.

PD 49 thereby already acknowledged the existence of computer

programs as works or creations protected by copyright. To hold, as the CA
incorrectly did, that the legislative intent was to require that the computer
programs be first photographed, photo-engraved, or pictorially illustrated as
a condition for the commission of copyright infringement invites ridicule.
Such interpretation of Sec. 5(a) defied logic and common sense because it
focused on terms like "copy," "multiply," and "sell," but blatantly ignored
terms like "photographs," "photo-engravings," and "pictorial illustrations."
Had the CA taken the latter words into proper account, it would have quickly
seen the absurdity of its interpretation.

The mere sale of the illicit copies of the software programs was enough
by itself to show the existence of probable cause for copyright infringement.
There was no need for the petitioner to still prove who copied, replicated or
reproduced the software programs. Indeed, the public prosecutor and the
DOJ gravely abused their discretion in dismissing the petitioner's charge for
copyright infringement against the respondents for lack of evidence. There
was grave abuse of discretion because the public prosecutor and the DOJ
acted whimsically or arbitrarily in disregarding the settled jurisprudential
rules on finding the existence of probable cause to charge the offender in
court.