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VER ANTHONY A. FORTICH

IPL WED. 7:30PM – 9:30PM

MCDONALDS CORPORATION v. MACJOY FASTFOOD CORPORATION G.R. No. 166115, February 2, 2007

FACTS: MacJoy is a domestic corporation engaged in the fast food products in Cebu City. On March 14, 1991, it filed an application with the then Bureau of Patents, Trademarks and Technology Transfer (now Intellectual Property Office/IPO) for the registration of the trademark MACJOY and device. McDonalds Corporation (McDo) filed a verified Notice of Opposition against MacJoy’s application claiming that the trademark MACJOY & DEVICE so resembles its corporate logo (Golden Arches or M design) and its marks McDonalds, Mc (collectively known as MCDONALDS marks) such that when used on identical or related goods, the trademark applied for would confuse or deceive purchasers into believing that the goods originate from the same source or origin. MacJoy denied McDonalds allegations claiming that it has used the mark MACJOY in good faith for the past many years, has spent considerable sums of money for said mark’s extensive promotion in tri-media, has been doing business in Cebu City long before McDonalds opened its outlet, and has pointed out that its use of said mark would not confuse affiliation with McDonalds’ restaurant services and food products due to differences in design and detail of the two (2) marks. The IPO ruled in favor of McDonalds ratiocinating that the predominance of the letter M and the prefixes Mac/Mc in both the MACJOY and MCDONALDS marks lead to confusion and that there is confusing similarity between them especially since both are used on almost the same products. The Court of Appeals (CA) reversed the IPO’s decision explaining the glaring and drastic differences and variations in style of the two trademarks. MacJoy’s restaurant is set in the same bold, brilliant and noticeable color scheme as that of its wrappers, containers, cups, etc., while McDonalds’ restaurant is in yellow and red colors, and with the mascot of Ronald McDonald being prominently displayed therein. ISSUE: Whether there is a confusing similarity between the MCDONALDS marks and the MACJOY & DEVICE trademarks when applied to Classes 29 and 30 of the International Classification of Goods, i.e., food and ingredients of food. HELD: YES. In determining similarity and likelihood of confusion, 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 or deception. In contrast, the holistic test requires the court to consider the entirety of the marks as applied to the products, including the labels and packaging, in determine confusing similarity. Under the holistic test, a comparison of the words is not the only determinant factor. The Supreme Court believes that the dominancy test is more suitable in this case. It finds that McDo and MacJoy marks are confusingly similar with each other such that an ordinary purchaser can conclude an association or relation between the marks. Both marks use the corporate M design logo and the prefixes Mc and/or Mac as dominant features. The first letter M in both marks puts emphasis on the prefixes Mc and/or Mac by the similar way in which they are depicted i.e. in an arch-like, capitalized and stylized manner. It is the prefix Mc, an abbreviation of Mac, which visually and aurally catches the attention of the consuming public. The word MACJOY attracts attention the same way as did McDonalds.

SEHWANI, INC. AND/OR BENITAS FRITES, INC. v. IN-N-OUT BURGER, INC. G.R. No. 171053, October 15, 2007 FACTS: IN-N-OUT Burger, Inc. is a foreign corporation organized under the laws of California, U.S.A. and not doing business in the Philippines. On June 2, 1997, it applied with the IPO for the registration of its trademark IN-N-OUT Burger & Arrow Design and service mark IN-N-OUT. In the course of its application, IN-N-OUT discovered that Sehwani, Inc. had obtained trademark registration for the mark IN N OUT (THE INSIDE OF THE LETTER O FORMED LIKE A STAR) on December 17, 1993 without its authority. It filed an administrative complaint against Sehwani, Inc. for violation of intellectual property rights alleging that it is the owner of the tradename IN-N-OUT and trademarks IN-N-OUT, IN-N-OUT Burger & Arrow Design and IN-N-OUT Burger Logo, which are used in its business since 1948 up to the present and were registered in the United States and in other parts of the world. Sehwani, Inc. alleged that IN-N-OUT lacks the legal capacity to sue for not doing business in the Philippines and it has no cause of action for its mark being not registered or used in the Philippines. The IPO ruled in favor of IN-N-OUT.

ISSUES: (1) Whether Sehwani, Inc.’s contention is correct that IN-N-OUT has no legal capacity to sue for the protection of the latter’s trademark albeit it is not doing business in the Philippines.

(2) Whether IN-N-OUT trademarks are considered well-known.

HELD: (1) NO. Section 160 of RA 8293 provides that any foreign national or juridical person who meets the requirements of Section 3 of the Act and does not engage in business in the Philippines may bring a civil or administrative action for opposition, cancellation, infringement, unfair competition, or false designation of origin and false description, whether or not it is licensed to do business in the Philippines under existing laws. Article 6 of The Convention of Paris for the Protection of Industrial Property which governs the protection of wellknows trademarks is a self-executing provision and does not require legislative enactment to give it effect in the member country. The trademark to be protected under this Article must be “well-known” in the country where protection is sought.

(2) YES. The power to determine whether a trademark is well-known lies in the competent authority of the country of registration or use. This competent authority would be either the registering authority if it has the power to decide this, or the courts of the country in question if the issue comes before the court. The IPO a quasi-judicial agency acquiring expertise on the matter found that the mark IN-N-OUT is an internationally wellknown mark on the basis of registrations in various countries around the world and its comprehensive advertisements therein.

The evidence also revealed that petitioner also used identical or confusingly similar mark for their hamburger wrappers and french-fries receptacles thus misrepresenting the source of the goods and service

SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT LTD., ET AL. v. COURT OF APPEALS, ET AL. G.R. No. 111580, June 21, 2001 FACTS: The Shangri-La Group filed with (BPTTT) a petition for the cancellation of the registration of the Shangri-La mark and S device/logo issued to private respondent Developers Group of Companies, Inc., on the ground that the same was illegally and fraudulently obtained and appropriated for the latter’s restaurant business. It alleged being the legal and beneficial owners of the subject mark and logo, using the same mark and logo for its corporate affairs and business since March 1962 and causing it to be specially designed for their international hotels in 1975, as the first user. It then filed with the BPTTT its own application for registration of the said mark and logo which was opposed by Developers Group. Meanwhile, Developers Group filed with the trial court a complaint for infringement and damages against the Shangri-La Group. The latter moved for suspension of the proceedings in the infringement case on account of the pendency of the administrative proceedings before the BPTTT.

ISSUE: Whether, despite the institution of an Inter Partes case for cancellation of a mark with the BPTTT (now Bureau of Legal Affairs, Intellectual Property Office) by one party, the adverse party can file a subsequent action for infringement with the regular courts of justice in connection with the same registered mark.

HELD: YES. Section 151.2 of Republic Act No. 8293, otherwise known as the Intellectual Property Code, and Rule 8, Section 7 of the Regulations on Inter Partes Proceedings, provide that the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. In this case, the earlier institution of an Inter Partes case by Shangri-La Group for the cancellation of the Shangri-La mark and S device/logo with the BPTTT cannot effectively bar the subsequent filing of an infringement case by registrant Developers Group. The law and the rules are explicit.

The issue raised before the BPTTT is quite different from that raised in the trial court. The former is whether the mark registered by Developers Group is subject to cancellation since the Shangri-La Groups claim prior ownership of the disputed mark. The latter is whether the Shangri-La Group infringed upon the rights of Developers Group within the contemplation of the law.

PHILIP MORRIS, INC., ET AL. v. COURT OF APPEALS AND FORTUNE TOBACCO CORPORATION G.R. No. 91332, July 16, 1993 FACTS: Philip Morris, Inc. is a corporation organized under the laws of the State of Virginia, USA. The two other plaintiff corporations are wholly-owned subsidiaries of Philip Morris and similarly not doing business in the Philippines but are suing on an isolated transaction. As registered owners of “MARK VII”, “MARK TEN”, and “LARK”, petitioners asserted that defendant Fortune Tobacco Corporation has no right to manufacture and sell cigarettes bearing the allegedly identical or confusingly similar trademark “MARK”. For its part, Fortune Tobacco Corporation admitted petitioners’ certificates of registration with the Philippine Patent Office but alleged that it has been authorized by the Bureau of Internal Revenue to manufacture and sell cigarettes bearing the trademark “MARK”, and that “MARK” is a common word which cannot be exclusively appropriated. The Court of Appeals (CA) initially reversed the trial court’s decision but later on issued the writ upon filing of sufficient counter bond. Petitioners relied on Section 21-A of the Trademark Law, as amended, as well as the Paris Convention of 1965, for the successful prosecution of their suit for infringements as foreign corporations not engaged in local commerce.

ISSUE: Whether petitioner-corporations have an exclusive right over their symbol as to justify issuance of writ of preliminary injunction.

HELD: NO. Petitioners may have the capacity to sue for infringement irrespective of lack of business activity in the Philippines on account of Section 21-A of the Trademark Law but the question whether they have an exclusive right over their symbol as to justify issuance of the controversial writ will depend on actual use of their trademarks in the Philippines in line with Sections 2 and 2-A of the same law. It is thus incongruous for petitioners to claim that when a foreign corporation not licensed to do business in Philippines files a complaint for infringement, the entity need not be actually using its trademark in commerce in the Philippines. Such a foreign corporation may have the personality to file a suit for infringement but it may not necessarily be entitled to protection due to absence of actual use of the emblem in the local market. It may be added that albeit petitioners are holders of certificate of registration in the Philippines of their symbols as admitted by private respondent, the fact of exclusive ownership cannot be made to rest solely on these documents since dominion over trademarks is not acquired by the mere fact of registration alone and does not perfect a trademark right.

LA CHEMISE LACOSTE, S.A. v. HON. OSCAR C. FERNANDEZ AND GOBINDRAM HEMANDAS G.R. No. L-63796-97, May 2, 1984

FACTS: Petitioner is a foreign corporation organized and existing under the laws of France and not doing business in the Philippines. It is a well-known European manufacturer of clothing’s and sporting apparels sold in the international market and bearing the trademarks “LACOSTE”, “CHEMISE LACOSTE”, “CROCODILE DEVICE” and a composite mark consisting of the word “LACOSTE” and a representation of a crocodile/alligator. In 1975, Hermandas & Co., a duly licensed domestic firm, applied for and was issued registration in the Supplemental Register for the trademark “CHEMISE LACOSTE & CROCODILE DEVICE” by the Philippine Patent Office for use on T-shirts, sportswear and other garment products of the company. In 1980, petitioner filed an application for registration of the trademark “Crocodile Device” and “Lacoste”. In 1983, petitioner filed with the National Bureau of Investigation (NBI) a letter-complaint alleging acts of unfair competition being committed by Hemandas. A search warrant was then issued by respondent judge which was later recalled and set aside. On the petition for certiorari, Hemandas relied heavily on the argument that it is the holder of a certificate of registration of the trademark “CHEMISE LACOSTE & CROCODILE DEVICE”.

ISSUES: (1) Whether a certificate of registration in the Supplemental Register grants private respondent exclusive right to use the same in connection with the goods, business, or services specified in the certificate.

(2) Whether or not private respondent has the right to continue using the trademark Lacoste as the first registrant in the Supplemental Register. HELD: (1) NO. A certificate of registration in the Supplemental Register is not prima facie evidence of the validity of registration, of the registrant’s exclusive right to use the same in connection with the goods, business, or services specified in the certificate. Such a certificate of registration cannot be filed, with effect, with the Bureau of Customs in order to exclude from the Philippines, foreign goods bearing infringement marks or trade names. Registration in the Supplemental Register, therefore, serves as notice that the registrant is using or has appropriated the trademark. By the very fact that the trademark cannot as yet be entered in the Principal Register, all who deal with it should be on guard that there are certain defects, some obstacles which the user must still overcome before he can claim legal ownership of the mark or ask the courts to vindicate his claims of an exclusive right to the use of the same. (2) NO. The goodwill and reputation of the petitioner’s products bearing the trademark LACOSTE date back even before 1964 when LACOSTE clothing apparels were first marketed in the Philippines. To allow Hemandas to continue using the trademark Lacoste for the simple reason that it was the first registrant in the Supplemental Register of a trademark used in international commerce and not belonging to him is to render nugatory the very essence of the law on trademarks and tradenames. The law on trademarks and tradenames is based on the principle of business integrity and common justice. This law, both in letter and spirit, is laid upon the premise that, while it encourages fair trade in every way and aims to foster, and not to hamper, competition, no one, especially a trader, is justified in damaging or jeopardizing another’s business by fraud, deceit, trickery or unfair methods of any sort. This necessarily precludes the trading by one dealer upon the good name and reputation built up by another.

ROLEX MUSIC LOUNGE v. HON. REYNALDO B. DAWAY, MONTRES ROLEX S.A. AND ROLEX CENTRE PHIL. LIMITED

FACTS: On November 26, 1998, respondents Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of Rolex and Crown Device, filed against petitioner 246 Corporation a suit for trademark infringement and damages with prayer for the issuance of a restraining order or writ of preliminary injunction. In its answer, petitioner argued that respondents have no cause of action because no infringement exist; that no confusion would arise from the use by petitioner of the mark Rolex considering that its entertainment business is totally unrelated to the items catered by respondents such as watches, clocks, bracelets and parts thereof.

ISSUE: Whether petitioner is correct in stating that no likelihood of confusion and therefore no infringement in the use of registered mark on the entirely different goods.

HELD: NO. A junior user of a well-known mark on goods or services which are not similar to the goods or services, and are therefore unrelated, to those specified in the certificate of registration of the well-known mark in precluded from using the same on the entirely unrelated goods or services, subject to the following requisites, to wit:

The use of the well-known mark on the entirely unrelated goods or services would indicate a connection between such unrelated goods or services and those goods or services specified in the certificate of registration in the well-known mark. This requirement refers to the likelihood of confusion of origin or business connection or relationship between the registrant and the user of the mark.

The interest of the owner of the well-known mark are likely to be damaged. For instance, if the registrant will be precluded from expanding its business to those unrelated good or services, of if the interests of the registrant of the well –known mark will be damaged because of the inferior quality of the good or services of the user.

ASIA BREWERY, INC. v. COURT OF APPEALS AND SAN MIGUEL CORPORATION G.R. No. 103543

FACTS: San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark and unfair competition on account of ABI’s BEER PALE PILSEN or BEER NA BEER product which has been competing with SMC’s SAN MIGUEL PALE PILSEN for a share of the local market beer. The trial court dismissed SMC’s complaint concluding that ABI has not committed trademark infringement or unfair competition against SMC. It found that SMC’s pale Pilsen beer is San Miguel Pale Pilsen with Rectangular Hops and Malt Design while that of ABI’s trademark is BEER PALE PILSEN label or “design”. On appeal, SMC was granted relief by the Court of Appeals reversing the decision of the trial court.

ISSUE: Whether ABI’s BEER PALE PILSEN label or “design” infringe upon SMC’s SAN MIGUEL PALE PILSEN WITH RECTANGULAR MALT AND HOPS DESIGN.

HELD: NO. The fact that the words pale Pilsen are part of ABI’s trademark does not constitute an infringement of SMC’s trademark: SAN MIGUEL PALE PILSEN, for “pale Pilsen” are generic words descriptive of the color (“pale”), of a type of beer (“Pilsen”), which is a light bohemian beer with a strong hops flavor that originated in the City of Pilsen in Czechoslovakia and became famous in the Middle Ages. “Pilsen” is a “primarily geographically descriptive word,” hence, non-registerable and not appropriable by any beer manufacturer. The words “pale Pilsen” may not be appropriated by SMC for its exclusive use even if they are part of its registered trademark.

Infringement is determined by the “test of dominancy” rather than by differences or variations in the details of one trademark and of another. The dominant feature of SMC’s trademark is the name of the product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end of the letters “S” and “M” on an amber background across the upper portion of the rectangular design. The dominant feature of ABI’s trademark is the name: BEER PALE PILSEN, with the word “Beer” written in large amber letters, larger than any of the letters found in the SMC label. Unfair competition is the employment of deception or any other means contrary to good faith by which a person shall pass off the goods manufactured by him or in which he deals, or his business, or services, for those of another who has already established goodwill.

DEL MONTE CORPORATION AND PHILIPPINE PACKING Corporation v. COURT OF APPEALS AND SUNSHINE SAUCE MANUFACTURING INDUSTRIES G.R. No. L-78325, January 25, 1990

FACTS: Del Monte is a foreign company organized under the laws of the United States and not engaged in business in the Philippines. Del Monte granted Phil pack the right to manufacture, distribute and sell in the Philippines various agricultural products, including catsup, under the Del Monte trademark and logo. In 1965, Del Monte authorized Phil pack to register with the Philippine Patent Office the Del Monte catsup bottle configuration and was registered in the Supplemental Register. In 1972, Del Monte also obtained two registration certificates for its trademark “DEL MONTE” and its logo. In 1980, respondent Sunshine Sauce Manufacturing Industries (Sunshine) was issued a certificate of registration to engage in the manufacture, packing, distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup. After receiving reports that Sunshine was using its exclusively designed bottles and logo confusingly similar to Del Monte’s, Phil pack warned it to desist from doing so and later filed a complaint for infringement of trademark and unfair competition. In its answer, Sunshine alleged that it had long ceased to use Del Monte bottle and its logo was substantially different from Del Monte logo and would not confuse the buying public to the detriment of Del Monte.

ISSUE: (1) Whether the trial court is correct in ruling that there was no infringement or unfair competition.

(2) Whether Sunshine is guilty of infringement for having used the Del Monte bottle.

HELD: (1) NO. It seems to the Court that the lower courts have been pre-occupied with the details that they have not seen the total picture. It has been correctly held that side-by-side comparison is not the final test of similarity. The ordinary buyer does not usually make such inquiry nor does he usually have the time to do so. The average shopper is usually in a hurry and does not inspect every product on the shelf as if he were browsing in a library. The question is not whether the two articles are distinguishable by their label when set side by side but whether the general confusion made by the article upon the eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result in his confounding it with the original.

(2) NO. Private respondent Sunshine is not guilty of infringement for having used the Del Monte bottle for the reason that the configuration of the said bottle was merely registered in the Supplemental Register. Although Del Monte has actual use of the bottle’s configuration, petitioners cannot claim exclusive use thereof because it has not been registered in the Principal Register.

EMERALD GARMENT MANUFACTURING CORPORATION v. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER AND H.D. LEE COMPANY, INC. G.R. No. 100098, December 29, 1995

FACTS: H.D. Lee Co., Inc., a foreign corporation organized under the laws of Delaware, USA filed with the Bureau of Patents, Trademarks & Technology Transfer (BPTTT) a petition for cancellation of registration for the trademark “STYLISTIC MR. LEE” used on several products of Emerald Garment Manufacturing Corporation, a domestic corporation organized and existing under the Philippine laws. It averred that petitioner’s trademark so closely resembled its own trademark, ‘LEE’ as previously registered and used in the Philippines, and not abandoned, as to be likely, when applied to or used in connection with petitioner’s goods, to cause confusion, mistake and deception on the part of the purchasing public as to the origin of the goods. In 1984, petitioner caused the publication of its application for registration of the trademark “STYLISTIC MR. LEE” in the Principal Register which private respondent filed a notice of opposition thereto on the ground that petitioner’s trademark was confusingly similar to its “LEE” trademark. The Director of Patents found private respondent to be the prior registrant of the trademark “LEE” in the Philippines and it had been using said mark in the Philippines. Using the dominancy test, the Director declared that petitioner’s trademark was confusingly similar to private respondent’s mark because it is the word “Lee” which draws the attention of the buyer and leads him to conclude that the goods originated from the same manufacturer. It is undeniably the dominant feature of the mark.

ISSUE: Whether petitioner’s trademark “STYLISTIC MR. LEE” tends to mislead and confuse the public with that of private respondent’s trademark “LEE” and thus constitutes an infringement of trademark.

HELD: NO. The essential element of infringement is colorable imitation. It is such a close or ingenious imitation as to be calculated to deceive ordinary purchasers, or such resemblance of the infringing mark to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other. In determining whether colorable imitation exists, jurisprudence developed two tests – the Dominancy Test applied in Asia Brewery, Inc. v. Court of Appeals and other cases and the Holistic Test developed in Del Monte Corporation V. Court of Appeals and its proponent cases. The Supreme Court considered the trademarks involved as a whole and rule that petitioner’s “STYLISTIC MR. LEE” is not confusingly similar to private respondent’s “LEE” trademark. Although on its label the word “LEE” is prominent, the trademark should be considered as a whole and not piecemeal. The dissimilarities between the two marks become conspicuous, noticeable and substantial enough to matter especially in the light of the following variables that must be factored in.

First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not your ordinary household items like catsup, soy sauce or soap which are of minimal cost. Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is predisposed to be more cautious and discriminating in and would prefer to mull over his purchase. Confusion and deception, then, is less likely.

Finally, more credit should be given to the “ordinary purchaser.” Cast in this particular controversy, the ordinary purchaser is not the “completely unwary consumer” but is the “ordinarily intelligent buyer” considering the type of product involved.