TRADEMARK CASES

IPC Sections 161-170

Submitted to:

PROS. MA. ELENA HOFILEÑA-GEROCHI

Submitted by:

Group 4

SORIANO, Carissa
SUMAGUIO, Bill Stephen
SUPETRAN, Hanna
TUNGALA, Garry Nee
VILLALOBOS, Rhoda Crisnelle
ZARAGOZA, Lordjena
COFFEE PARTNERS, INC., Petitioner, v. SAN FRANCISCO COFFEE & ROASTERY,
INC.,Respondent.

G.R. No. 169504: March 3, 2010

FACTS:

Petitioner Coffee Partners, Inc (CPI). is a local corporation engaged in the business of
establishing and maintaining coffee shops in the country. It registered with the Securities and
Exchange Commission (SEC) in January 2001. It has a franchise agreement with Coffee
Partners Ltd., a business entity organized and existing under the laws of British Virgin Islands,
for a non-exclusive right to operate coffee shops in the Philippines using trademarks designed
by CPL such as “SAN FRANCISCO COFFEE”. On the other hand, respondent is a local
corporation engaged in the wholesale and retail sale of coffee. It is registered with the SEC in
May 1995. It registered the business name "SAN FRANCISCO COFFEE & ROASTERY, INC
(SFCRI)." with the Department of Trade and Industry (DTI) in June 1995.

In June 2001, respondent SFCRI discovered that petitioner CPI was about to open a coffee
shop under the name "SAN FRANCISCO COFFEE" in Libis, Quezon City. According to
respondent, petitioners shop caused confusion in the minds of the public as it bore a similar
name and it also engaged in the business of selling coffee. However, petitioner points out that
respondent’s registration of its business name (trade name) with the DTI expired on 16 June
2000 and it was only in 2001 when petitioner opened a coffee shop in Libis, Quezon City that
respondent made a belated effort to seek the renewal of its business name registration.
Petitioner stresses respondent’s failure to continue the use of its trade name to designate its
goods negates any allegation of infringement.

ISSUE:

Whether or not CPI’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 Intellectual Property Office (IPO).

RULING:

YES. A trade name need not be registered with the IPO before an infringement suit may be filed
by its owner against the owner of an infringing trademark. All that is required is that the trade
name is previously used in trade or commerce in the Philippines. It is the likelihood of confusion
that is the gravamen of infringement. In determining similarity and likelihood of confusion, our
jurisprudence has developed two tests: the dominancy test and the holistic test.

The dominancy test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion and deception, thus constituting infringement. If the
competing trademark contains the main, essential, and dominant features of another, and
confusion or deception is likely to result, infringement occurs. Exact duplication or imitation is
not required. The question is whether the use of the marks involved is likely to cause confusion
or mistake in the mind of the public or to deceive consumers.

In contrast, the holistic test entails 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

Digested by: Garry Nee G Tungala JD-3A

features appearing on both marks in order that the observer may draw his conclusion whether
one is confusingly similar to the other.

Applying either the dominancy test or the holistic test, petitioners "SAN FRANCISCO COFFEE"
trademark is a clear infringement of respondents "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 petitioners coffee shops.

Digested by: Garry Nee G Tungala JD-3A

MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. Petitioners, vs.
E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC. Respondents

G.R. No. 154342: July 14, 2004

FACTS:

Gallo Winery, producer of wines and brandy products which is based in California, U.S.A.,
registered its GALLO wine trademark in the Philippines in 1971. Gallo Winery produces different
kinds of wines and brandy products and sells them in many countries under different registered
trademarks, including the GALLO and ERNEST & JULIO GALLO wine trademarks.
On the other hand, petitioners Mighty Corporation and La Campana and their sister company,
Tobacco Industries of the Philippines (Tobacco Industries), are engaged in the cultivation,
manufacture, distribution and sale of tobacco products for which they have been using the
GALLO cigarette trademark since 1973.
In May 1984, Tobacco Industries assigned the GALLO cigarette trademark to La Campana
which, on July 16, 1985, applied for trademark registration in the Philippine Patent Office. On
July 17, 1985, the National Library issued Certificate of Copyright Registration No. 5834 for La
Campana lifetime copyright claim over GALLO cigarette labels.
Subsequently, La Campana authorized Mighty Corporation to manufacture and sell cigarettes
bearing the GALLO trademark.BIR approved Mighty Corporations use of GALLO 100s cigarette
brand, under licensing agreement with Tobacco Industries, on May 18, 1988, and GALLO
SPECIAL MENTHOL 100s cigarette brand on April 3, 1989.

ISSUE:

Whether or not Mighty Corporation, et al. are liable for trademark infringement.

RULING:

The Supreme Court ruled that Mighty Corporation, et al. are not liable for trademark
infringement or unfair competition and reaffirmed the doctrine that the use of an identical mark
does not, by itself, lead to a legal conclusion that there is trademark infringement. A crucial
issue in any trademark infringement case is the likelihood of confusion, mistake or deceit as to
the identity, source or origin of the goods, or identity of the business as a consequence of using
a certain mark.

In determining likelihood of confusion, the Supreme Court considered the following factors: [a]
the resemblance between the trademarks; [b] the similarity of the goods to which the
trademarks are attached; [c] the likely effect on the purchaser; and [d] the registrant's express or
implied consent and other fair and equitable considerations.

The Supreme Court distinguished between GALLO wines and GALLO cigarettes as follows: (1)
wines are bottled and consumed by drinking while cigarettes are packed in cartons or packages
and smoked; (2) there is a whale of a difference between their descriptive properties, physical
attributes or essential characteristics like form, composition, texture and quality; (3) GALLO
cigarettes are inexpensive items that appeal only to simple folks like farmers, fishermen,
laborers and other low-income workers while GALLO wines are patronized by middle-to-high-
income earners; and (4) GALLO cigarettes are distributed through sidewalk vendors, sari-sari
stores and grocery stores in rural areas, mainly in Misamis Oriental, Pangasinan, Bohol, and

Digested by: Garry Nee G Tungala JD-3A

Cebu, whereas GALLO wines are imported and exclusively distributed by a local entity and sold
in hotels, expensive bars and restaurants, and high-end grocery stores and supermarkets.

Based on these distinctions, the High Tribunal declared that wines and cigarettes are non-
competing and totally unrelated products which are not likely to cause confusion vis-à-vis the
goods or business of Gallo Winery and Mighty Corporation, et al. Thus, even though similar
marks are used, there is no trademark infringement if the public does not expect the plaintiff to
make or sell the same class of goods as those made or sold by the defendant.

Digested by: Garry Nee G Tungala JD-3A

JUNO BATISTIS, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

G.R. No. 181571: December 16, 2009

FACTS:

Allied Domecq Philippines, Inc., a Philippine corporation exclusively authorized to distribute

Fundador brandy products imported from Spain wholly in finished form, initiated a case against
Juno Batistis for violation of Section 155 (infringement of trademark) of the Intellectual Property
Code (Republic Act No. 8293).

The RTC found Batistis guilty beyond reasonable doubt for infringement of trademark under
Section 155 of the Intellectual Property Code and hereby sentences him to suffer the penalty of
imprisonment of TWO (2) YEARS and to pay a fine of FIFTY THOUSAND (P50,000.00)
PESOS. The CA affirmed the decision of the trial court.

ISSUE:

Whether or not the penalty imposed against Batistis in relation to Sec.170 of the Intellectual
Property Code is correct.

RULING:

NO. The penalty thus fixed was contrary to the Indeterminate Sentence Law, as amended by
Act No. 4225. Section 1 of the Indeterminate Sentence Law, as amended, provides:

Section 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised
Penal Code, or its amendments, the court shall sentence the accused to an indeterminate
sentence the maximum term of which shall be that which, in view of the attending
circumstances, could be properly imposed under the rules of the said Code, and the minimum
which shall be within the range of the penalty next lower to that prescribed by the Code for the
offense; and if the offense is punished by any other law, the court shall sentence the
accused to an indeterminate sentence, the maximum term of which shall not exceed the
maximum fixed by said law and the minimum shall not be less than the minimum term
prescribed by the same.

The straight penalty the CA imposed was contrary to the Indeterminate Sentence Law, whose
Section 1 requires that the penalty of imprisonment should be an indeterminate sentence.
According to Spouses Bacar v. Judge de Guzman,Jr.,the imposition of an indeterminate
sentence with maximum and minimum periods in criminal cases not excepted from the
coverage of the Indeterminate Sentence Law pursuant to its Section 228 is mandatory.

The need for specifying the minimum and maximum periods of the indeterminate sentence is to
prevent the unnecessary and excessive deprivation of liberty and to enhance the economic
usefulness of the accused, since he may be exempted from serving the entire sentence,
depending upon his behavior and his physical, mental, and moral record. The requirement of
imposing an indeterminate sentence in all criminal offenses whether punishable by the Revised
Penal Code or by special laws, with definite minimum and maximum terms, as the Court deems

Digested by: Garry Nee G Tungala JD-3A

proper within the legal range of the penalty specified by the law must, therefore, be deemed
mandatory.

Therefor, the Supreme Court affirm the decision dated September 13, 2007 rendered in C.A.-
G.R. CR No. 30392 entitled People of the Philippines v. Juno Batistis, but modify the penalty
to imprisonment ranging from two (2) years, as minimum, to three (3) years, as
maximum, and a fine of ₱50,000.00.

Digested by: Garry Nee G Tungala JD-3A

SAN MIGUEL PURE FOODS COMPANY INC., Petitioner
vs
FOODSPHERE, Respondent,

GR No. 217781: Jun 20, 2018

Facts:

The parties herein are both engaged in the business of the manufacture, sale, and distribution
of food products, with SMPFCI owning the trademark "PUREFOODS FIESTA HAM" while
Foodsphere, Inc. products (Foodsphere) bear the "CDO" brand. On November 4, 2010,
SMPFCI filed a Complaint3 for trademark infringement and unfair competition with prayer for
preliminary injunction and temporary restraining order against Foodsphere before the Bureau of
Legal Affairs (BLA) of the Intellectual Property Office (IPO) pursuant to Sections 155 and 168 of
Republic Act (R.A.) No. 8293, otherwise known as the Intellectual Property Code (IP Code), for
using, in commerce, a colorable imitation of its registered trademark in connection with the sale,
offering for sale, and advertising of goods that are confusingly similar to that of its registered
trademark. Nevertheless SMPFCI, alleged that its “FIESTA” ham was already sold in the market
since 1980 gaining its popularity as a sumptuous ham of great taste to the populace specially
during the holiday season.

In the year 2006 Foodsphere introduced their own “PISTA” ham. The two corporations have
been vigorous in terms of promoting their respective ham products. SMPFCI alleged that
Foodsphere is guilty of unfair competition. This is because there is confusing similarity in the
general appearance of the goods of the parties and intent on the part of Foodsphere, to deceive
the public and defraud SMPFCL According to SMPFCI, there is confusing similarity because the
display panel of both products have a picture of a partly sliced ham served on a plate of fruits,
while the back panel features other ham varieties offered, both "FIESTA" and "PISTA" are
printed in white bold stylized font, and the product packaging for both "FIESTA" and "PISTA".
Foodsphere similarly denied the allegation that it is guilty of unfair competition or passing off its
product as that of SMPFCI. As mentioned, the "PISTA" and "FIESTA" labels are substantially
different in the manner of presentation, carrying their respective house marks. Moreover, its
paper ham bags are labeled with their respective house marks and are given to consumers only
after purchase, hence, they do not factor in when the choice of ham is being made. Also,
Foodsphere claims to have been using the red color for its boxes and it was SMPFCI, by its own
admission that switched colors from green to red in 2009 for its own ham bags.

Issue: Whether or not Foodsphere is guilty of unfair competition under Section 168 of the
Intellectual property code.

Ruling:

Yes, Foodsphere is indeed guilty of unfair completion under Section 168 of the Intellectual
Property Code. The Court has held that unfair competition consists of 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 other words, 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," therefore, of

Digested by: Hanna Supetran JD-3A

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."

Thus, the essential elements of an action for unfair competition are: (1) confusing similarity in
the general appearance of the goods; and (2) intent to deceive the public and defraud a
competitor. The confusing similarity may or may not result from similarity in the marks, but may
result from other external factors in the packaging or presentation of the goods. The intent to
deceive and defraud may be inferred from the similarity of the appearance of the goods as
offered for sale to the public. Actual fraudulent intent need not be shown. Provided further,
Foodsphere's intent to deceive the public, to defraud its competitor, and to ride on the goodwill
of SMPFCI's products is evidenced by the fact that not only did Foodsphere switch from its old
box packaging to the same paper ham bag packaging as that used by SMPFCI, it also used the
same layout design printed on the same. As the Director General observed, why, of the millions
of terms and combinations of letters, designs, and packaging available, Foodsphere had to
choose those so closely similar to SMPFCI's if there was no intent to pass off upon the public
the ham of SMPFCI as its own with the end and probable effect of deceiving the public.

Digested by: Hanna Supetran JD-3A

WILLAWARE PRODUCTS CORPORATION, Petitioner,
vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent,

G.R. No. 195549: September 3, 2014

Facts:
Jesichris Manufacturing Company filed this present complaint for damages for unfair
competition with prayer for permanent injunction to enjoin Willaware Products Corporation
manufacturing and distributing plastic-made automotive parts similar to those of Jesichris.
Jesichris alleged that it is a duly registered partnership engaged in the manufacture and
distribution of plastic and metal products
Jesichris further alleged that in view of the physical proximity of Willaware office to Jesichris
office, and in view of the fact that some of Jesichris employees had transferred to Willaware.
Willare had developed familiarity with Jesichris’s products, especially its plastic-made
automotive parts.
That sometime in November 2000, Jesichris discovered that Willaware 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 Jesichris’s plastic-made automotive parts and
to the same customers.

Issue:

Whether or not Jesichris violated Section 168 of the Intellectual Property Code.

Ruling:

The concept of "unfair competition" under Article 28 is very much broader than that covered by
intellectual property laws. Under the present article, which follows the extended concept of
"unfair competition" in American jurisdictions, the term covers even cases of discovery of...
trade secrets of a competitor, bribery of his employees, misrepresentation of all kinds,
interference with the fulfillment of a competitor's contracts, or any malicious interference with the
latter's business.

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."
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.

Digested by: Hanna Supetran JD-3A

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.
As aptly observed by the court a quo, the testimony of petitioner's witnesses indicate that it
acted in bad faith in competing with the business of respondent, to wit:
In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
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.

Digested by: Hanna Supetran JD-3A

PEARL AND DEAN INC., Petitioner,
vs
SHOEMART INC., Respondent

G.R. No. 148222: August 15, 2003

FACTS:

Pearl and Dean (Phil.), Inc. (PDI) is engaged in the manufacture of advertising display units
simply referred to as light boxes. PDI was able to secure a Certificate of Copyright Registration,
the advertising light boxes were marketed under the trademark “Poster Ads”.

In 1985, PDI negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in certain SM Makati and SM Cubao. PDI submitted for signature
the contracts covering both stores, but only the contract for SM Makati, however, was returned
signed. Eventually, SMI’s informed PDI that it was rescinding the contract for SM Makati due to
non-performance of the terms thereof.

Years later, PDI found out that exact copies of its light boxes were installed at different SM
stores. It was further discovered that SMI’s sister company North Edsa Marketing Inc. (NEMI),
sells advertising space in lighted display units located in SMI’s different branches.

PDI sent a letter to both SMI and NEMI enjoining them to cease using the subject light boxes,
remove the same from SMI’s establishments and to discontinue the use of the trademark
“Poster Ads,” as well as the payment of compensatory damages.

Claiming that both SMI and NEMI failed to meet all its demands, PDI filed this instant case for
infringement of trademark and copyright, unfair competition and damages.

SMI maintained that it independently developed its poster panels using commonly known
techniques and available technology, without notice of or reference to PDI’s copyright. SMI
noted that the registration of the mark “Poster Ads” was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word “Poster Ads” is a
generic term which cannot be appropriated as a trademark, and, as such, registration of such
mark is invalid. On this basis, SMI, aside from praying for the dismissal of the case, also
counterclaimed for moral, actual and exemplary damages and for the cancellation of PDI’s
Certification of Copyright Registration, and Certificate of Trademark Registration.

Issue:
Whether the owner of a registered trademark legally prevent others from using such trademark
if it is a mere abbreviation of a term descriptive of his goods, services or business.

Ruling:

On the issue of trademark infringement, the petitioner’s president said “Poster Ads” was a
contraction of “poster advertising.” P & D was able to secure a trademark certificate for it, but
one where the goods specified were “stationeries such as letterheads, envelopes, calling cards

Digested by: Hanna Supetran JD-3A

and newsletters. ”Petitioner admitted it did not commercially engage in or market these goods.
On the contrary, it dealt in electrically operated backlit advertising units which, however, were
not at all specified in the trademark certificate.

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

There was no evidence that P & D’s use of “Poster Ads” was distinctive or well-known. As noted
by the Court of Appeals, petitioner’s expert witnesses himself had testified that ‘Poster Ads’ was
too generic a name. So it was difficult to identify it with any company, honestly speaking. ”This
crucial admission that “Poster Ads” could not be associated with P & D showed that, in the mind
of the public, the goods and services carrying the trademark “Poster Ads” could not be
distinguished from the goods and services of other entities.

“Poster Ads” was generic and incapable of being used as a trademark because it was used in
the field of poster advertising, the very business engaged in by petitioner. “Secondary meaning”
means that a word or phrase originally incapable of exclusive appropriation with reference to an
article in the market might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of the purchasing
public, the word or phrase has come to mean that the article was his property.

Digested by: Hanna Supetran JD-3A

MCDONALD'S CORPORATION, Petitioner,
vs
L.C. BIG MAK BURGER, INC., Respondent

G.R. No. 143993, August 18, 2004

Facts:

Petitioner McDonald’s Corporation (“McDonald’s”) is a corporation organized under the laws of

Delaware, United States. McDonald’s operates a global chain of fast-food restaurants.
McDonald’s own a family of marks including the “Big Mac” mark for its double-decker
hamburger sandwich. McDonald’s registered this trademark with the United States Trademark
Registry on October 16, 1979. Based on this Home Registration, McDonald’s applied for the
registration of the same mark in the Principal Register of then then Philippine Bureau of Patents,
Trademarks and Technology (PBPTT) – now the Intellectual Property Office (IPO).

Pending approval of its application, McDonald’s introduced its “Big Mac” hamburger sandwiches
in the Philippine market in September 1981. On July 18, 1985, the PBPTT allowed registration
of the “Big Mac” mark in the Philippine Register based on its Home Registration in the United
States. From 1982 to 1990, McDonald’s spent P10.5 million in advertisement for “Big Mac”
hamburger sandwiches alone.

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food
outlets and snack vans in Metro Manila and nearby provinces. Its menu includes hamburger
sandwiches and other food items.

On October 21, 1988, respondent corporation applied with the PBPTT for the registration of the
“Big Mak” mark for its hamburger sandwiches. McDonald’s opposed respondent corporation’s
application on the ground that “Big Mak” was a colorable imitation of its registered “Big Mac”
mark for the same food products. On June 6, 1990, petitioners sued respondents in the
Regional Trial Court of Makati, Branch 137 ("RTC"), for trademark infringement and unfair
competition.

Issues: Whether respondent corporation is liable for (1) trademark infringement and (2) unfair
competition.

Ruling: YES.

1. On the Issue of Trademark Infringement

Republic Act No. 166, Section 22 defines trademark infringement as “any person who [1] shall
use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection with which such use is likely
to cause confusion or mistake or to deceive purchasers or others as to the source or origin of
such goods or services, or identity of such business; or [2] reproduce, counterfeit, copy, or
colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy,
or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods, business or services, shall be liable
to a civil action by the registrant for any or all of the remedies herein provided.”

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

To establish trademark infringement, the following elements must be shown: (1) the validity of
plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its
colorable imitation by the alleged infringer results in "likelihood of confusion." Of these, it is the
element of likelihood of confusion that is the gravamen of trademark infringement.

1st element:

A mark is valid if it is distinctive and not merely generic and descriptive.

The "Big Mac" mark, which should be treated in its entirety and not dissected word for word, is
neither generic nor descriptive. Generic marks are commonly used as the name or description
of a kind of goods, such as "Lite" for beer. Descriptive marks, on the other hand, convey the
characteristics, functions, qualities or ingredients of a product to one who has never seen it or
does not know it exists, such as "Arthriticare" for arthritis medication. On the contrary, "Big Mac"
falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual
characteristics of the product it represents. As such, it is highly distinctive and thus valid.

2nd element:

Petitioners have duly established McDonald's exclusive ownership of the "Big Mac" mark. Prior
valid registrants of the said mark had already assigned his rights to McDonald's.

3rd element:

Section 22 covers two types of confusion arising from the use of similar or colorable imitation
marks, namely, confusion of goods (confusion in which the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he was purchasing the other) and
confusion of business (though the goods of the parties are different, the defendant's product is
such as might reasonably be assumed to originate with the plaintiff, and the public would then
be deceived either into that belief or into the belief that there is some connection between the
plaintiff and defendant which, in fact, does not exist).

There is confusion of goods in this case since respondents used the "Big Mak" mark on the
same goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used.

There is also confusion of business due to Respondents' use of the "Big Mak" mark in the sale
of hamburgers, the same business that petitioners are engaged in, also results in confusion of
business. The registered trademark owner may use his mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market. The registered trademark owner enjoys protection
in product and market areas that are the normal potential expansion of his business.

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

Applying the dominancy test, Respondents' use of the "Big Mak" mark results in likelihood of
confusion. Aurally the two marks are the same, with the first word of both marks phonetically the
same, and the second word of both marks also phonetically the same. Visually, the two marks

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

have both two words and six letters, with the first word of both marks having the same letters
and the second word having the same first two letters.

2. On the Issue of Unfair Competition

Section 29 of RA 166 defines unfair competition as, “any person who will employ deception or
any other means contrary to good faith by which he shall pass off the goods manufactured by
him or in which he deals, or his business, or services for those of the one having established
such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of
unfair competition, and shall be subject to an action therefor.”

The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods, and (2) intent to deceive the public and defraud a competitor.

Unfair competition is broader than trademark infringement and includes passing off goods with
or without trademark infringement. Trademark infringement is a form of unfair competition.
Trademark infringement constitutes unfair competition when there is not merely likelihood of
confusion, but also actual or probable deception on the public because of the general
appearance of the goods.

The mark "B[ig] M[ac]" is used by plaintiff McDonald's to identify its double decker hamburger
sandwich. The packaging material is a styrofoam box with the McDonald's logo and trademark
in red with block capital letters printed on it. All letters of the "B[ig] M[ac]" mark are also in red
and block capital letters. On the other hand, defendants' "B[ig] M[ak]" script print is in orange
with only the letter "B" and "M" being capitalized and the packaging material is plastic wrapper.
xxxx Further, plaintiffs' logo and mascot are the umbrella "M" and "Ronald McDonald's",
respectively, compared to the mascot of defendant Corporation which is a chubby boy called
"Macky" displayed or printed between the words "Big" and "Mak."

Moreover, there is no notice to the public that the "Big Mak" hamburgers are products of "L.C.
Big Mak Burger, Inc." Respondents introduced during the trial plastic wrappers and bags with
the words "L.C. Big Mak Burger, Inc." to inform the public of the name of the seller of the
hamburgers. However, petitioners introduced during the injunctive hearings plastic wrappers
and bags with the "Big Mak" mark without the name "L.C. Big Mak Burger, Inc." Respondents'
belated presentation of plastic wrappers and bags bearing the name of "L.C. Big Mak Burger,
Inc." as the seller of the hamburgers is an after-thought designed to exculpate them from their
unfair business conduct. As earlier stated, we cannot consider respondents' evidence since
petitioners' complaint was based on facts existing before and during the injunctive hearings.

Thus, there is actually no notice to the public that the "Big Mak" hamburgers are products of
"L.C. Big Mak Burger, Inc." and not those of petitioners who have the exclusive right to the "Big
Mac" mark. This clearly shows respondents' intent to deceive the public. We hold that as found
by the RTC, respondent corporation is liable for unfair competition.

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

DEL MONTE CORPORATION, Petitioner, vs
COURT OF APPEALS, Respondent

G.R. No. L-78325, January 25, 1990

Facts:

Petitioner Del Monte Corporation is a foreign company organized under the laws of the United
States and not engaged in business in the Philippines.

Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized

under the laws of the Philippines. On April 11, 1969, Del Monte granted Philpack the right to
manufacture, distribute and sell in the Philippines various agricultural products, including catsup,
under the Del Monte trademark and logo.

On October 27, 1965, Del Monte authorized Philpack to register with the Philippine Patent
Office the Del Monte catsup bottle configuration, for which it was granted Certificate of
Trademark Registration No. SR-913. On November 20, 1972, Del Monte also obtained two
registration certificates for its trademark "DEL MONTE" and its logo.

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration

by the Bureau of Domestic Trade on April 17, 1980, to engage in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. The
product itself was contained in various kinds of bottles, including the Del Monte bottle, which the
private respondent bought from the junk shops for recycling.

Having received reports that the private respondent was using its exclusively designed bottles
and a logo confusingly similar to Del Monte's, Philpack warned it to desist from doing so on pain
of legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte
filed a complaint against the private respondent for infringement of trademark and unfair
competition, with a prayer for damages and the issuance of a writ of preliminary injunction.

Issue: Whether respondent is guilty of infringement and unfair competition.

Ruling: YES.

Section 22 of Republic Act No. 166 defines trademark infringement as “any person who [1] shall
use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale, offering for sale, or
advertising of any goods, business or services on or in connection with which such use is likely
to cause confusion or mistake or to deceive purchasers or others as to the source or origin of
such goods or services, or identity of such business; or [2] reproduce, counterfeit, copy, or
colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy,
or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods, business or services, shall be liable
to a civil action by the registrant for any or all of the remedies herein provided.”

Section 29 of RA 166 defines unfair competition as, “any person who will employ deception or
any other means contrary to good faith by which he shall pass off the goods manufactured by
him or in which he deals, or his business, or services for those of the one having established

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of
unfair competition, and shall be subject to an action therefor.”

The Supreme Court recognizes that there are really distinctions between the designs of the
logos or trademarks of Del Monte and Sunshine Sauce. However, it has been correctly held that
side-by-side comparison is not the final test of similarity. Even if the labels were analyzed
together it is not difficult to see that the Sunshine label is a colorable imitation of the Del Monte
trademark. The predominant colors used in the Del Monte label are green and red-orange, the
same with Sunshine. The word "catsup" in both bottles is printed in white and the style of the
print/letter is the same. Although the logo of Sunshine is not a tomato, the figure nevertheless
approximates that of a tomato.

As previously stated, the person who infringes a trade mark does not normally copy out but only
makes colorable changes, employing enough points of similarity to confuse the public with
enough points of differences to confuse the courts. What is undeniable is the fact that when a
manufacturer prepares to package his product, he has before him a boundless choice of words,
phrases, colors and symbols sufficient to distinguish his product from the others. When as in
this case, Sunshine chose, without a reasonable explanation, to use the same colors and letters
as those used by Del Monte though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive.

Digested by: Rhoda Crisnelle C. Villalobos JD-3A

CATERPILLAR, INC., Petitioner, vs MANOLO P. SAMSON, Respondent

G.R. No. 205972, November 9, 2016

Facts:

Caterpillar is a foreign corporation engaged in the manufacture and distribution of footwear,

clothing and related items, among others. Its products are known for six core trademarks,
namely, "CATERPILLAR", "CAT" "CATERPILLAR & DESIGN" "CAT AND DESIGN", "WALKING
MACHINES" and "TRACK-TYPE TRACTOR & DESIGN (Core Marks), all of which are alleged
as internationally known.

On the other hand, Samson, doing business under the names and styles of Itti Shoes
Corporation, Kolm's Manufacturing Corporation and Caterpillar Boutique and General
Merchandise, is the proprietor of various retail outlets in the Philippines selling footwear, bags,
clothing, and related items under the trademark "CATERPILLAR", registered in 1997 under
Trademark Registration No. 64705 issued by the Intellectual Property Office (IPO).

Caterpillar filed both civil and criminal cases against Samson for violation of unfair competition
provided under Section 168.3(a), in relation to Sections 131.3, 123(e) and 170 of R.A. 8293,
otherwise known as the Intellectual Property Code.

Issue: Whether a criminal complaint for unfair competition can proceed independently of, and
simultaneous with, the civil case for the same.

Ruling: YES.

The civil case filed by Caterpillar was for unfair competition, damages and cancellation of
trademark, while the criminal cases were the criminal prosecution of Samson for unfair
competition. A common element of all such cases for unfair competition - civil and criminal - was
fraud.

Under Article 33 of the Civil Code, a civil action entirely separate and distinct from the criminal
action may be brought by the injured party in cases of fraud, and such civil action shall proceed
independently of the criminal prosecution. In view of its being an independent civil action did not
operate as a prejudicial question that justified the suspension of the proceedings in criminal
cases.

An action for the cancellation of trademark is a remedy available to a person who believes that
he is or will be damaged by the registration of a mark. On the other hand, the criminal actions
for unfair competition involved the determination of whether or not Samson had given his goods
the general appearance of the goods of Caterpillar, with the intent to deceive the public or
defraud Caterpillar as his competitor. In the suit for the cancellation of trademark, the issue of
lawful registration should necessarily be determined, but registration was not a consideration
necessary in unfair competition. Indeed, unfair competition is committed if the effect of the act is
"to pass off to the public the goods of one man as the goods of another;" it is independent of
registration. As fittingly put in R.F. & Alexander & Co. v. Ang, "one may be declared unfair
competitor even if his competing trademark is registered." Clearly, the determination of the
lawful ownership of the trademark in the civil action was not determinative of whether or not the
criminal actions for unfair competition shall proceed against Samson.

Digested by: Rhoda Crisnelle C. Villalobos JD-3A