PRIBHDAS J. MIRPURI vs. COURT OF APPEALS, DIRECTOR OF PATENTS and the BARBIZON CORPORATION

Facts:

Petitioner's claims: "Barbizon" products have been sold in the Philippines since 1970. Petitioner developed this market by working long hours and spending considerable sums of money on advertisements and promotion of the trademark and its products. Almost 30 years later, private respondent, a foreign corporation usurps the trademark and invades petitioner's market. Justice and fairness dictate that private respondent be prevented from appropriating what is not its own. Legally, at the same time, private respondent is barred from questioning petitioner's ownership of the trademark because of res judicata in view of IPC No. 686.

Respondent's claims: The Opposer's goods bearing the trademark BARBIZON have been used in many countries, including the Philippines, for at least 40 years and has enjoyed international reputation and good will for their quality. Their trademarks qualify as well-known trademarks entitled to protection under Article 6bis of the Convention of Paris for the Protection of Industrial Property

Issues:

1. Whether IPC No. 2049 is barred on the ground of res judicata

2. Whether a treaty affords protection to a foreign corporation against a Philippine applicant for the registration of a similar trademark.

Ruling:

1. IPC No. 2049 raised the issue of ownership of the trademark and the international recognition and reputation of the trademark for over 40 years here and abroad, different from the issues of confusing similarity and damage in IPC No. 686. There was also a new cause of action arising from the cancellation of petitioner's certificate of registration for failure to file the affidavit of use. Also, the first and second cases are based on different laws, one on Trademark Law and the other on the Paris Convention, E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. Thus, res judicata  does not apply to the instant case.

2. The WTO is a common institutional framework for the conduct of trade relations among its members in matters related to the multilateral and plurilateral trade agreements annexed to the WTO Agreement, one of which is the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPs. Members to this Agreement have agreed to adhere to minimum standards of protection set by several Conventions,

including the Paris Convention. The Philippines and the US have acceded to the WTO Agreement. Conformably, the State must reaffirm its commitment to the global community and take part in evolving a new international economic order at the dawn of the new millenium. The petition is denied.

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE TABAC REUNIES, S.A., (now known as PHILIP MORRIS PRODUCTS S.A.), Petitioners,

vs. FORTUNE TOBACCO CORPORATION, Respondent.

Facts:

Petitioner Philip Morris, Inc., a corporation organized under the laws of the State of Virginia, United States of America, is, per Certificate of Registration No. 18723 issued on April 26, 1973 by the Philippine Patents Office (PPO), the registered owner of the trademark “MARK VII” for cigarettes. Similarly, petitioner Benson & Hedges (Canada), Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the trademark “MARK TEN” for cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as can be seen in Trademark Certificate of Registration No. 19053, another subsidiary of Philip Morris, Inc., the Swiss company Fabriques de Tabac Reunies, S.A., is the assignee of the trademark “LARK,” which was originally registered in 1964 by Ligget and Myers Tobacco Company. On the other hand, respondent Fortune Tobacco Corporation, a company organized in the Philippines, manufactures and sells cigarettes using the trademark “MARK.”

The legal dispute between the parties started when the herein petitioners, on the claim that an infringement of their respective trademarks had been committed, filed, on August 18, 1982, a Complaint for Infringement of Trademark and Damages against respondent Fortune Tobacco Corporation, docketed as Civil Case No. 47374 of the RTC of Pasig.

Petitioners claimed that the respondent, without any previous consent from any of the petitioners, manufactured and sold cigarettes bearing the identical and/or confusingly similar trademark “MARK” Accordingly, they argued that respondent’s use of the trademark “MARK” in its cigarette products have caused and is likely to cause confusion or mistake, or would deceive purchasers and the public in general into buying these products under the impression and mistaken belief that they are buying petitioners’ products.

RTC- ruled in favor of respondents; dismissed petitioner’s complaintCA- ruled that petitioner has legal standing to sue but found that there was no infringementHence this petition

Issue: Whether or not the fact that Petitioner has a Certificate of Registration issued by the Philippine Patents Office entitles them to protection in the PH?

Held: No. The Certificate of Registration is merely a prima facie evidence of validity of registration.

The registration of a trademark gives the registrant, such as petitioners, advantages denied non-registrants or ordinary users, like respondent. But while petitioners enjoy the statutory presumptions arising from such registration i.e., as to the validity of the registration, ownership and the exclusive right to use the registered marks, they may not successfully sue on the basis alone of their respective certificates of registration of trademarks. For, petitioners are still foreign corporations. As such, they ought, as a condition to availment of the rights and privileges vis-à-vis their trademarks in this country, to show proof that, on top of Philippine registration, their country grants substantially similar rights and privileges to Filipino citizens pursuant to Section 21-A[20] of R.A. No. 166. The registration of trademark cannot be deemed conclusive as to the actual use of such trademark in local commerce. As it were, registration does not confer upon the registrant an absolute right to the registered mark. The certificate of registration merely constitutes prima facie evidence that the registrant is the owner of the registered mark. Evidence of non-usage of the mark rebuts the presumption of trademark ownership, as what happened here when petitioners no less admitted not doing business in this country.

Registration in the Philippines of trademarks does not ipso facto convey an absolute right or exclusive ownership thereof. To borrow from Shangri-La International Hotel Management, Ltd. v. Development Group of Companies, Inc, trademark is a creation of use and, therefore, actual use is a pre-requisite to exclusive ownership; registration is only an administrative confirmation of the existence of the right of ownership of the mark, but does not perfect such right; actual use thereof is the perfecting ingredient.

True, the Philippines’ adherence to the Paris Convention effectively obligates the country to honor and enforce its provisions as regards the protection of industrial property of foreign nationals in this country. However, any protection accorded has to be made subject to the limitations of Philippine laws. Hence, despite Article 2 of the Paris Convention which substantially provides that (1) nationals of member-countries shall have in this country rights specially provided by the Convention as are consistent with Philippine laws, and enjoy the privileges that Philippine laws now grant or may hereafter grant to its nationals, and (2) while no domicile requirement in the country where protection is claimed shall be required of persons entitled to the benefits of the Union for the enjoyment of any industrial property rights, foreign nationals must still observe and comply with the conditions imposed by Philippine law on its nationals.

Considering that R.A. No. 166, as amended, specifically Sections 2and 2-A thereof, mandates actual use of the marks and/or emblems in local commerce and trade before they may be registered and ownership thereof acquired, the petitioners cannot, therefore, dispense with the element of actual use. Their being nationals of member-countries of the Paris Union does not alter the legal situation.

PROSOURCE INTERNATIONAL, INC., vs. HORPHAG RESEARCH MANAGEMENT

FACTS:

Horphag Research Management SA is a corporation duly organized and existing under the laws of Switzerland and the owner of trademark PYCNOGENOL, a food supplement sold and distributed by Zuellig Pharma Corporation. Horphag later discovered that Prosource International, Inc. was also distributing a similar food supplement using the mark PCO-GENOLS since 1996. This prompted respondent to demand that petitioner cease and desist from using the aforesaid mark.

On June 19, 2000, Without notifying respondent, Prosource discontinued the use of, and withdrew from the market, the products under the name PCO-GENOLS and changed its mark from PCO-GENOLS to PCO-PLUS.

On August 22, 2000, Horphag filed a Complaint for Infringement of Trademark with Prayer for Preliminary Injunction against Prosource, praying that the latter cease and desist from using the brand PCO-GENOLS for being confusingly similar with respondent’s trademark PYCNOGENOL.

Prosource contended that Horphag could not file the infringement case considering that the latter is not the registered owner of the trademark PYCNOGENOL, but one Horphag Research Limited. It, likewise, claimed that the two marks were not confusingly similar. Finally, it denied liability, since it discontinued the use of the mark prior to the institution of the infringement case. Petitioner thus prayed for the dismissal of the complaint.

ISSUE:

Whether Prosource committed infringement.

RULING

YES, Prosource committed infringement.

It is the element of "likelihood of confusion" that is the gravamen of trademark infringement. But "likelihood of confusion" is a relative concept. The particular, and sometimes peculiar, circumstances of each case are determinative of its existence. Thus, in trademark infringement cases, precedents must be evaluated in the light of each particular case.

In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the Dominancy Test and the Holistic or Totality 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 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 to deceive purchasers. Courts will consider more the aural and visual impressions created by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets, and market segments.

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

The trial and appellate courts applied the Dominancy Test in determining whether there was a confusing similarity between the marks PYCNOGENOL and PCO-GENOL. Applying the test, the trial court found, and the CA affirmed, that:

Both the word[s] PYCNOGENOL and PCO-GENOLS have the same suffix "GENOL" which on evidence, appears to be merely descriptive and furnish no indication of the origin of the article and hence, open for trademark registration by the plaintiff thru combination with another word or phrase such as PYCNOGENOL, Exhibits "A" to "A-3." Furthermore, although the letters "Y" between P and C, "N" between O and C and "S" after L are missing in the [petitioner’s] mark PCO-GENOLS, nevertheless, when the two words are pronounced, the sound effects are confusingly similar not to mention that they are both described by their manufacturers as a food supplement and thus, identified as such by their public consumers. And although there were dissimilarities in the trademark due to the type of letters used as well as the size, color and design employed on their individual packages/bottles, still the close relationship of the competing products’ name in sounds as they were pronounced, clearly indicates that purchasers could be misled into believing that they are the same and/or originates from a common source and manufacturer.29

We find no cogent reason to depart from such conclusion.

This is not the first time that the Court takes into account the aural effects of the words and letters contained in the marks in determining the issue of confusing similarity. In Marvex Commercial Co., Inc. v. Petra Hawpia & Co., et al.,30 cited in McDonald’s Corporation v. L.C. Big Mak Burger, Inc.,31 the Court held:

The following random list of confusingly similar sounds in the matter of trademarks, will reinforce our view that "SALONPAS" and "LIONPAS" are confusingly similar in sound: "Gold Dust" and "Gold Drop"; "Jantzen" and "Jass-Sea"; etc.

COFFEE PARTNERS, INC vs SAN FRANCISCO COFFEE & ROASTERY

Petitioner Coffee Partners is a local corp that has a franchise to put up coffee shops in the Phils using Coffee Partners Ltd British Islands' trademarks such as San Francisco Coffee, registered with the SEC. Respondent San Francisco Coffee and Roastery is a local coffee supplier of coffee shops such as Figaro Company, Tagaytay Highlands, Fat Willy’s, and other coffee companies, registered with the DTI. 

Respondent formed a joint venture with Boyd Coffee Co. Phils. and conducted a project study on setting up coffee carts in malls and other commercial establishments in Metro Manila. When respondent learned that petitioner will open a coffee shop in Libis, they demanded for petitioner to stop using the name “San Francisco Coffee” as it causes confusion to the minds of the public. A complaint was also filed by respondents before the Bureau of Legal Affairs of the Intellectual Property Office for infringement and unfair competition with claims for damages. Petitioners contend that there are distinct differences in the appearance of their trademark and that respondent abandoned the use of their trademark when it joined venture with Boyd Coffee USA. The Bureau of Legal Affairs of the IPO held that petitioner’s trademark infringed on the respondent’s trade name as it registered its business name first with the DTI in 1995 while petitioner only registered its trademark in 2001. Furthermore, it ruled that the respondent did not abandon the use of its trade name upon its joint venture with Boyd Coffee USA since in order for abandonment to exist it must be permanent, intentional and voluntary. It also held that petitioner’s use of the trademark "SAN FRANCISCO COFFEE" will likely cause confusion because of the exact similarity in sound, spelling, pronunciation, and commercial impression of the words "SAN FRANCISCO" which is the dominant portion of respondent’s trade name and petitioner’s trademark. Upon appeal before the office of the Director General of the IPO, the decision of its legal affairs was reversed declaring there was no infringement. The Court of Appeals however set aside its decision and reinstated the IPO legal affairs’ decision. Petitioner contends that the respondent’s trade name is not registered therefore a suit for infringement is not available.

Issue: WON there was infringement

Held: YES

 Registration of a trademark before the IPO is no longer a requirement to file an action for infringement as provided in Section 165.2 of RA 8293. All that is

required is that the trade name is previously used in trade or commerce in the Philippines. There is no showing that respondent abandoned the use of its trade name as it continues to embark to conduct research on retailing coffee, import and sell coffee machines as among the services for which the use of the business name has been registered.

The court also laid down two tests to determine similarity and likelihood of confusion. The dominancy test focuses on similarity of the prevalent features of the trademarks that could cause deception and confusion that constitutes infringement. 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. 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.15 The discerning eye of the observer must focus not only on the predominant words but also on the other 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, petitioner’s "SAN FRANCISCO COFFEE" trademark is a clear infringement of respondent’s "SAN FRANCISCO COFFEE & ROASTERY, INC." trade name. The descriptive words "SAN FRANCISCO COFFEE" are precisely the dominant features of respondent’s trade name. And because both are involved in coffee business there is always the high chance that the public will get confused of the source of the coffee sold by the petitioner. Respondent has acquired an exclusive right to the use of the trade name "SAN FRANCISCO COFFEE & ROASTERY, INC." since the registration of the business name with the DTI in 1995.

DE LA RAMA STEAMSHIP COMPANY vs. NATIONAL DEVELOPMENT COMPANY

This case is the outcome of an agreement entered into on October 26, 1949 between the De la Rama Steamship Co. Inc. (hereinafter referred to as De la Rama) and the National Development Company (hereinafter referred to as NDC) whereby De la Rama undertook the management of the three vessels known as "Doña Aurora," "Doña Nati" and "Doña Alicia" which had been purchased by the Philippine Government from Japan with the advise and technical supervision of De la Rama. In the management contract it was provided that De la Rama had the option to buy the vessels at the fifth year following the purchase and delivery of each of the vessels at a price which is to consist of the cost price of each vessel.

The first time that this case came up to this Court was in G.R. No. L-8784, decided on May 21, 1956, which involved the principal question regarding the right granted by the management contract to NDC to cancel upon one

year's notice the general agency granted Dela Rama. The NDC decided to cancel the contract but was opposed by De la Rama, which alleged that it had been granted the option to purchase the vessels and that in 1952 it exercised that right of option. In the decision in G.R. No. L-8784 this Court upheld the right of NDC to cancel the management contract, and the option of De la Rama to purchase the vessels was declared ineffective.

The right of NDC to cancel the management contract having been upheld by the Court and De la Rama's right to exercise the option to purchase the vessels could not thereby be exercised, De la Rama filed on August 21, 1956 a "Supplemental Pleading" in Civil Case No. 25161 then pending in the Court of First Instance of Manila. This supplemental pleading, in the nature of a supplemental complaint gave rise to the proceeding which later brought Civil Case No. 25161 to this Court for the second time in G.R. No. L-25659.1 Under the first cause of action of the "Supplemental Pleading," De la Rama demanded that NDC refrain from using the names "Doña Aurora," "Doña Nati" and "Doña Alicia" on the three vessels subject of the original action, claiming that it had acquired exclusive property right to the use of said names of the three vessels as trade names; under the second cause of action.

In its answer to De la Rama's supplemental pleading, NDC denied De la Rama's exclusive right to use the names "Doña Aurora," "Doña Nati" and "Doña Alicia" on the vessels upon the ground that said names (except Doña Nati) represented names of wives of former Presidents of the Philippines and could not be approriated by a private individual.

In its reply to NDC's answer, and in its answer to NDC's counterclaim, De la Rama alleged that the names "Doña Aurora," "Doña Nati" and "Doña Alicia" were its property, having used the name "Doña" on its vessels in its shipping business even before the last war and had acquired a vested right on that trade name, that the claim for reimbursement and/or payment of advances and/or expenses made, and commissions earned by virtue and pursuant to the management contract matured after the filing of the amended complaint; that true and correct accounting of the operations of the vessels had always been submitted to NDC.

On March 20, 1957, the trial court, in consonance with its order given in open court on March 8, 1957, considering that the case involved mainly accounting, issued an order appointing a Board of Accountants to make an examination of the accounts submitted by De la Rama to determine what amount is due De la Rama, and what amount is due NDC, and to make such recommendations as, in its opinion, are proper.

HELD:

In support of the fifth assignment of error, that the lower court erred in holding that De la Rama is entitled to the preferential right to the use of the "Doña" names and enjoining and restraining NDC perpetually from using the "Doña" names on any of its vessels, NDC argues that as owner of the vessels it had registered the "Doña" names in the Bureau of Customs with full knowledge and consent of De la Rama which, therefore, is now estopped from questioning the right, or from denying the ownership, of NDC over the "Doña" names (Art. 1431, Civil Code). De la Rama, on the other hand maintains that the findings and conclusion of the lower court on this matter, quoting the pertinent portion of the lower court's decision, are well founded.

In the amendatory decision, dated March 18, 1966, the lower court found that De la Rama had been in the shipping business since 1933 and had adopted, prior to the war in 1941, the word "Doña" in designating its vessels; that the three ocean-going vessels that it operated under the management contract were named "Doña Nati" after the wife of the late Don Esteban de la Rama, who was founder of the steamship company; "Doña Alicia" after the late wife of former President Elpidio Quirino; and "Doña Aurora" after the late widow of President Manuel Quezon; that there is unrebutted testimony that in the shipping business, goodwill and reputation are inevitably acquired by the names given to a vessel.

NDC's contention, in its answer, that De la Rama, a private firm, could not appropriate said names ("except Doña Nati") on the ground that those are names of wives of former Presidents, does not have a legal basis. Under Section 4(c) of Rep. Act No. 166 as amended, which apparently is the basis of the contention of NDC, what is prohibited from being appropriated and being registered are trade-names consisting of, or comprising, a name identifying a particular living individual, or the name of a deceased President of the Philippines. The names of deceased wives of Presidents are not included in the prohibition. Moreover, Section 4(f) of said Act does not prohibit the registration, and hence appropriation, of a trade-name that has become distinctive and the substantial and exclusive use of a trade-name for five years accepted as prima facie proof that the trade-name has become distinctive. And this Court has said, in Ang vs. Teodoro, that even a name or phrase not capable of appropriation as a trade name may, by long and exclusive use by a business with reference thereto of to its products, acquire a proprietary connotation, such that, to the purchasing public, the name or phrase becomes associated with the service or the products of the business, and so it is entitled to protection against unfair competition.

Neither is the claim of estoppel, allegedly based on acquiescence, in that NDC had registered with full knowledge and/or consent of De la Rama the "Doña" names in the Bureau of Customs, tenable. A reading of Sections 1166 to 1176 of the Revised Administrative Code, under which the "Doña" vessels were presumably registered, would show that the principally purpose of the registration is to determine the ownership of the vessel, although for registration it is necessary that the vessel should have a name as a prerequisite under the provision of Section 1170. De la Rama certainly could not, and had no right, to oppose the registration of the vessels by NDC because the vessels were in fact owned by NDC. Neither could De la Rama then oppose the registration of the "Doña" names of the vessels for it was De la Rama itself that gave those names when it operated the vessels, and it had also expectant right to become owners of said vessels. De la Rama's consent to the registration of the vessels as owned by NDC did not necessarily imply that it also consented to NDC's appropriation of the "Doña" names, for almost immediately after the right of NDC to cancel the management contract had been upheld by this Court in G.R. No. L-8784, decided on May 21, 1956, De la Rama formally notified, on August 10, 1956 NDC or its agent to refrain from using, announcing or in any manner referring to the three vessels here in question as the 'Doña Aurora,' 'Doña Nati' or 'Doña Alicia'." From these facts if cannot reasonably be urged that De la Rama is estopped from preventing NDC to use the "Doña" names on its vessels. Anent this matter, it has been held that:.

... an estoppel will not ordinarily arise from a consent given under an excusable misapprehension of facts... likewise, the estoppel will not be given effect beyond the precise thing consented to and matters which are necessarily, or at least, reasonably, to be implied therefrom. (28 Am Jur 2d, pp. 662-663.)

And even if it be assumed, gratia argumenti, that De la Rama acquiesced to the registration of the "Doña" names of the vessels, as NDC contends, that acquiescence could not necessarily estop De la Rama to claim its right to said names, after the conditions had changed, that is when the management contract had been cancelled by NDC. Regarding this matter it has been held that:.

Acquiescence in the past does not necessarily estop a party from changing his course of conduct as to the future, especially where there has been a change in conditions. (28 Am Jur 2d p. 675.)

NDC does not dispute the fact that the "Doña" names had been originally used by De la Rama, 32 and according to the lower court De la Rama had been using the "Doña" names even before the war, and that said names have acquired goodwill and reputation. Goodwill is protected by the law on unfair competition. Goodwill is easily damaged, and is easily vulnerable to assault, through the brand which symbolizes it. When a person has established a trade or business in which he has used a name or device to designate his goods, he will be protected in the use of the name or device. "Such person has a right to complain when another adopts this symbol or manner of making of his goods so as to mislead the public into purchasing the same as and for the goods of the complainant."

The goodwill in business is a valuable asset, and in modern commercial life it is frequently built upon a trade-name. Any trade-mark or name ... which has become of a pecuniary value or a business advantage, becomes a property right, and, as such, is entitled to the protection afforded by the courts (American Agricultural Chemical Co. v. Moore, 17 F (2d) 196, 199.)

In Ang v. Teodoro this Court said:.

The owner of a trade-mark or trade-name has a property right in which he is entitled to protection, since there is damage to him from confusion of reputation or goodwill in the mind of the public as well as confusion of goods. The modern trend is to give emphasis to the unfairness of the acts and to treat the issue as a fraud.

To permit NDC to continue using the "Doña" names would be to countenance the unlawful appropriation of the benefit of a goodwill which De la Rama has acquired as a result of continued usage and large expense; it would be tantamount to permitting NDC to grab the reputation or goodwill of the business of another. 35 We find that the decision of the trial court on this matter is in accordance with the law on unfair competition.

Esso Standard vs. Court of Appeals

Facts of the Case: 

The petitioner Esso Standard is a foreign corporation duly licensed to do business in the Philippines. It is engaged in the sale of petroleum products which are identified by the trademarl 'Esso'. Esso is a successor of Standard Vacuum Oil Co, it registered as a business name with the Bureau of Commerce in 1962. United Cigarette is a domestic corporation engaged in the manufacture and sale of cigarettes. it acquired the business from La Oriental Tobacco Corp including patent rights, once of which is the use of 'Esso' on its cigarettes.

The petitioner filed a trademark infringement case alleging that it acquired goodwill to such an extent that the buying public would be deceived as ti the quality and origin of the said products to the detriment and disadvantage of its own products. The lower court found United Cigarette guilty of infringement. Upon appeal, the Court of Appeals ruled that there was no infringment in this case.

Issue: Is there infringement committed?

Ruling: NONE. Infringement is defined by law as the use without the consent of the trademark owner of any reproduction, counterfeit, copy or colorable imitation of any registered mark or tradename which would likely cause confusion or mistake or deceive purchasers or others as to the source or origin of such goods.

The products of both parties (Petroleum and cigarettes) are non-competing. But as to whether trademark infringement exists depend on whether or not the goods are so related that the public may be or is actually deceived and misled that they come from the same maker. Under the Related Goods Theory, goods are related when they belong to the same class or have the same descriptive properties or when they have same physical attributes. In these case, the goods are absolutely different and are so foreign from each other it would be unlikely for purchasers to think that they came from the same source. Moreover, the goods flow from different channels of trade and are evidently different in kind and nature.

PHILIPPINE REFINING CO., INC. vs. NG SAM G.R. No. L-26676. July 30, 1982

Facts:

Private respondent filed with the Philippine Patent Office an application for registration of the trademark "CAMIA" for his product, ham, which falls under Class 47 (Foods and Ingredients of Food).

Petitioner opposed the application claiming that it first used said trademark on his products: lard, butter, cooking oil, abrasive detergents, polishing materials and soap of all kinds, some of which are likewise classified under Class 47.

The trademark "CAMIA" was first used in the Philippines by petitioner on its products in 1922 and registered the same in 1949

On November 25, 1960, respondent Ng Sam, a Chinese citizen residing in Iloilo City, filed an application with the Philippine Patent Office for registration of the identical trademark "CAMIA" for his product, ham, which likewise falls under Class 47. Alleged date of first use of the trademark by respondent was on February 10, 1959.

Director of Patents rendered a decision allowing registration of the trademark "CAMIA" in favor of Ng Sam finding that `the goods of the parties are not of a character which purchasers would be likely to attribute to a common origin.

Issue/Answer:

WON the product of respondent Ng Sam, which is ham, and those of petitioner consisting of lard, butter, cooking oil and soap are so related that the use of the same trademark "CAMIA'' on said goods would likely result in confusion as to their source Atty. Eric Recalde or origin./ negative

Ratio Decidendi:

The right to a trademark is a limited one, in the sense that others may use the same mark on unrelated goods.

The mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others on articles of a different description.

Where no confusion is likely to arise, as in this case, registration of a similar or even identical mark may be allowed.

The term "CAMIA" is descriptive of a whole genus of garden plants with fragrant white flowers.

A trademark is designed to identify the user. But it should be so distinctive and sufficiently original as to enable those who come into contact with it to recognize instantly the identity of the user. "It must be affirmative and definite, significant and distinctive, capable to indicate origin.

If a mark is so commonplace that it cannot be readily distinguished from others, then it is apparent that it cannot identify a particular business; and he who first adopted it cannot be injured by any subsequent appropriation or imitation by others, and the public will not be deceived."]

While ham and some of the products of petitioner are classified under Class 47 (Foods and Ingredients of Food), this alone cannot serve as the decisive factor in the resolution of whether or not they are related goods.

Emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics.

Opposer's products are ordinary day-to-day household items whereas ham is not necessarily so. Thus, the goods of the parties are not of a character which purchasers would be likely to attribute to a common origin."

The business of the parties are noncompetitive and their products so unrelated that the use of identical trademarks is not likely to give rise to confusion, much less cause damage to petitioner.

provision:Section 4(d) of Trademark law "a mark which consists of or comprises a mark or trade name which so resembles a mark or trade name registered in the Philippines or a mark or trade name previously used in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection with the goods, business services of the applicant, to cause confusion or mistake or to deceive purchasers."

IN-N-OUT BURGER, INC., petitioner, vs. SEHWANI, INCORPORATED AND/OR BENITA’S FRITES, INC., re-spondents. (G.R. No. 179127 December 24, 2008)

Facts:

Petitioner IN-N-OUT BURGER, INC is a business entity incorporated under the laws of California, USA, which is a signatory to the Convention of Paris on Protection of Industrial Property and the TRIPS Agree -ment. Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations organized in the Philippines.

On 2 June 1997, petitioner filed trademark and service mark applications with the Bureau of Trademarks (BOT) of the IPO for "IN-N-OUT" and "IN-N-OUT Burger & Arrow Design." Petitioner later found out that Sehwani had already obtained Trademark Registration for the mark "IN N OUT (the inside of the letter "O" formed like a star)." By virtue of a licensing agreement, Benita Frites, Inc. was able to use the registered mark of respondent Sehwani, Incorporated.

Petitioner filed on 4 June 2001 before the Bureau of Legal Affairs of the IPO an administrative complaint against respondents for unfair competition and cancellation of trademark registration. Petitioner averred in its complaint that it is the owner of the trade name IN-N-OUT and the following trademarks: (1) "IN-N-OUT"; (2) "IN-N-OUT Burger & Arrow Design"; and (3) "IN-N-OUT Burger Logo." These trademarks are registered with the Trademark Office of the US and in various parts of the world, are internationally well-known, and have become distinctive of its business and goods through its long and exclusive commercial use. Petitioner pointed out that its internationally well-known trademarks and the mark of the respondents are all registered for the restaurant business and are clearly identical and confusingly similar. Petitioner claimed that respondents are making it appear that their goods and services are those of the petitioner, thus, misleading ordinary and unsuspecting consumers that they are purchasing petitioner’s products.

Respondents In its Answer with Counterclaim asserted that they had been using the mark "IN N OUT" in the Philippines since 15 October 1982. On 15 November 1991, respondent Sehwani, Incorporated filed with the then Bureau of Patents, Trademarks and Technology Transfer (BPTTT) an application for the registration of the mark "IN N OUT (the inside of the letter "O" formed like a star)" and was issued a certificate of registration on 17 December 1993.

Respondents asserted that respondent Sehwani, Incorporated, being the registered owner of the mark "IN N OUT," should be accorded the presumption of a valid registration of its mark with the exclusive right to use the same

The Bureau of Legal Affairs ordered the cancellation of Sehwani’s certificate of registration.The Director General of IPO dismissed Sehwani’s appeal for being filed out of time and found respondent guilty of unfair competition. CA affirmed the Director General’s decision. Hence this petition.

Issue: 1. Whether or not IPO Director General correctly found respondents guilty of unfair competition?

2. Whether or not IPO has jurisdiction over the administrative proceedings to rule on issue of unfair competition?

Held: 1. Yes.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

The evidence on record shows that repondents were not using their registered trademark but that of the petitioner. SEHWANI, INC. was issued a Certificate of Registration for IN N OUT (with the Inside of the Letter "O" Formed like a Star) for restaurant business in 1993. The restaurant opened only in 2000 but under the name IN-N-OUT BURGER. Apparently, the respondents started constructing the restaurant only after the [petitioner] demanded that the latter desist from claiming ownership of the mark IN-N-OUT and voluntarily cancel their trademark registration. Moreover, respondents are also using [petitioner’s] registered mark Double-Double for use on hamburger products. In fact, the burger wrappers and the French fries receptacles the respondents are using do not bear the mark registered by the respondent, but the petitioner’s IN-N-OUT Burger’s name and trademark IN-N-OUT with Arrow design.

There is no evidence that the respondents were authorized by the petitioner to use the latter’s marks in the business. Respondents’ explanation that they are not using their own registered trademark due to the difficulty in printing the "star" does not justify the unauthorized use of the [petitioner’s] trademark instead.

Further, respondents are giving their products the general appearance that would likely influence purchasers to believe that these products are those of the petitioner. The intention to deceive may be inferred from the similarity of the goods as packed and offered for sale, and, thus, action will lie to restrain such unfair competition.

Respondents’ use of IN-N-OUT BURGER in business signages reveals fraudulent intent to deceive purchasers. Exhibit "GG," which shows the business establishment of respondents illustrates the imitation of petitioner’s corporate name IN-N-OUT and signage IN-N-OUT BURGER.

2. Yes, as expressly provide for by Section 10 of the Intellectual Property Code.

PETRONILO DEL ROSARIO vs. VICENTE QUIOGUE

FACTS:

Petronilo del Rosario conducted an undertaker's establishment as "La Funeraria Paz," on the Calzada de Bilibid, for nine years previous to the entry or registration of said name in the registry on the 14th of January, 1909. The old premises, near Calzada Bilibid, were occupied by Vicente Quiogue, operating a similar undertaker's establishment, under the same "La Nueva Funeraria Paz," with a sign bearing the said name placed in a most conspicuous spot, which name he also used in his advertisements in the local papers.

The name being almost the same, and the establishment being situated in the same place where "La Funeraria Paz" had been located and known for nine years, these facts have actually de-ceived those who, intending to send their orders to "La Funeraria Paz" of Petronilo del Rosario, inadvertently employed "La Nueva Funeraria Paz" of Vicente Quiogue, and the said establish-ment thus succeeded in obtaining benefits which should have gone to the real establishment whose services were sought.

Petronilo del Rosario prayed the Court of First Instance of Manila to issue a preliminary injunc-tion and another final one, prohibiting Vicente Quiogue from using the name "Funeraria Paz" and asked that the latter for losses and damages, and the costs.

CFI granted the injunction. QUIOGUE appealed.

ISSUE:

Whether Quioque should be stopped from using Funeraria Paz

RULING:

YES.The trial court is correct in granting injnction.

"Paz" is a name which has been used by the plaintiff to designate his establishment, not necessar-ily taken from the name of the street on which it is situated at the present time, since the name of "Paz" was in use when the establishment was located on the Calzada de Bilibid; and while lo-cated at the latter place he registered the name and the place became so known in his business papers the word "Paz" is also applied to his establishments situated on Calle Ilaya in Tondo, and on Calle Alix in Sampaloc, and is still so used.

From all of the foregoing conclusions, the trial court concluded that the use of the words "Funer-aria Paz" answered no other purpose than that of making it easy to mistake the defendant's estab-lishment for that of the plaintiff formerly located in the same place, or so that it might be consid-ered as its successor; that the addition of "La Nueva" was nothing more than a tick employed by the defendant in order to covertly appropriate the trade name of the plaintiff; that the very fact of adding "La Nueva" to the prominent words "Funeraria Paz" on the sign shows how fully con-vinced he was that, without such an addition, he could not use the said sign which he now con-

siders as a "generic name of the place of production or origin" referred to in said Act No. 666; that the lowering of rates, together with all the circumstances set forth, tended to establish a com-petition in bad faith; and that the results are as shown by the defendant in his claim for damages by reason of the preliminary injunction, which prevented him for obtaining such beneficial re-sults.

Hence, the word "Paz" — as concluded in the judgment appealed from — added to the word "Funeraria" on the sign of the defendant's establishment, although preceded by the words "La Nueva," is what attracted clients to the establishment, and not the lower rates charged for ser-vices. (B. of E., 14.)

MASSO HERMANOS vs. DIRECTOR OF PATENTS

Facts: Masso Hermanos is a registered owner of the trademark composed of the word “Cosmopolite” used on canned fish. After 30 years, it applied for the renewal of said trademark. However, the trademark examiner denied the petition on the ground that the word "Cosmopolite", as a trademark for canned fish is descriptive of said goods and, therefore, could not have been legally registered as a trademark. Petitioner appealed from said ruling to the Director of Patents on the ground that the examining officer was not authorized to re-examine certificates which were originally issued under Act No. 666 and surrendered for re-registration. The Director of Patents affirmed said ruling.

Issue: Whether the word Cosmopolite is descriptive and therefore cannot be registered as a trademark

Held: No. The word "Cosmopolite" does not give the name, quality or description of the canned fish for which it is used. It does not even describe the place of origin, for it  does not indicate the country or place where the canned fish was manufactured. The court is, therefore, of the opinion that the registration of the trademark "Cosmopolite" under Act No. 666 was valid and is subsisting. In view of the foregoing, the ruling of the respondent Director of Patents is set aside and he is ordered to issue to the petitioner a new certificate of registration of the trademark in exchange for the old one No. 1881 surrendered to him on June 18, 1948.

ETEPHA, A.G. vs. DIRECTOR OF PATENTS

To the question: May trademark ATUSSIN be registered, given the fact that PERTUSSIN, another trademark, had been previously registered in the Patent Office? — the Director of Patents answered affirmatively. Hence this appeal.

On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of trademark "Atussin" placed on its "medicinal preparation of expectorant

antihistaminic, bronchodilator sedative, ascorbic acid (Vitamin C) used in the treatment of cough". The trademark is used exclusively in the Philippines since January 21, 1959.1

Petitioner, Etepha, A. G., a Liechtenstin corporation, objected. Petitioner claims that it will be damaged because Atussin is so confusedly similar to its Pertussin (Registration No. 6089, issued on September 25, 1957) used on a preparation for the treatment of coughs, that the buying public will be misled into believing that Westmont's product is that of petitioner's which allegedly enjoys goodwill.

HELD:

The validity of a cause for infringement is predicated upon colorable imitation. The phrase "colorable imitation" denotes such a "close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance 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."

"Tussin" is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the goods; it is open for appropriation by anyone. It is accordingly barred from registration as trademark. With jurisprudence holding the line, we feel safe in making the statement that any other conclusion would result in "appellant having practically a monopoly"7 of the word "tussin" in a trademark.

While "tussin" by itself cannot thus be used exclusively to identify one's goods, it may properly become the subject of a trademark "by combination with another word or phrase". And this union of words is reflected in petitioner's Pertussin and respondent's Atussin, the first with prefix "Per" and the second with Prefix "A".

Confusion is likely between trademarks, however, only if their over-all presentations in any of the particulars of sound, appearance, or meaning are such as would lead the purchasing public into believing that the products to which the marks are applied emanated from the same source.

We now consider exclusively the two words — Pertussin and Atussin — as they appear on the respective labels. As previously adverted to, these words are presented to the public in different styles of writing and methods of design. The horizontal plain, block letters of Atussin and the diagonally and artistically upward writing of Pertussin leave distinct visual impressions. One look is enough to denude the mind of that illuminating similarity so essential for a trademark infringement case to prosper.

As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that the two words do not sound alike — when pronounced. There is not much phonetic similarity between the two. The Solicitor General well-observed that in Pertussin the pronunciation of the prefix "Per", whether correct or incorrect, includes a combination of three letters P, e and r; whereas, in

Atussin the whole starts with the single letter A added to suffix "tussin". Appeals to the ear are disimilar. And this, because in a word combination, the part that comes first is the most pronounced. An expositor of the applicable rule here is the decision in the Syrocol-Cheracol controversy. There, the ruling is that trademark Syrocol (a cough medicine preparation) is not confusedly similar to trademark Cheracol (also a cough medicine preparation). Reason: the two words "do not look or sound enough alike to justify a holding of trademark infringement", and the "only similarity is in the last syllable, and that is not uncommon in names given drug compounds".

December 22, 1966

MARVEX COMMERCIAL CO., INC., petitioner, vs.PETRA HAWPIA and CO., and THE DIRECTOR OF PATENTS, respondents.

Facts of the Case: Petra Hawpia & Co., a partnership duly organized under the laws of the Philippines filed a petition for the registration of the trademark "LIONPAS" used on medicated plaster, with the Philippine Patent Office, asserting its continuous use in the Philippines since June 9, 1958. The Marvex Commercial Co., Inc., a corporation also duly organized under the laws of the Philippines, on July 24, 1959 filed an opposition thereto, alleging that the registration of such trademark would violate its right to and in-terest in the trademark "SALONPAS" used on another medicated plaster, which is regis-tered its name under Certificate of Registration 5486, issued by the Director of Patents on September 29, 1956, and that both trademarks when used on medicated plaster would mislead the public as they are confusingly similar.

The Director of Patents dismissed the opposition and gave due course to the petition, stating in part that "confusion, mistake, or deception among the purchasers will not likely and reasonably occur" when both trademarks are applied to medicated plaster.

Issues:

(1) Is the applicant the owner of the trademark "LIONPAS"?;

(2) Is the trademark "LIONPAS" confusingly similar to the trademark "SALONPAS"?

Held: Is the applicant the owner of the trademark "LIONPAS?"

On the 1st issue:

The assignment must be in writing, acknowledged before a notary public or other officer authorized to administer oaths or perform other notarial acts and certified under the hand and official seal of the notary or other officer. (Sec. 31, par. 2)

In this case, although a sheet of paper is attached to exh. 6, on which is typewritten a certification that the signatures of the presidents of the two named companies (referring to the signatures in exh. 6) "have been duly written by themselves", this sheet is un-marked, unpaged, unsigned, undated and unsealed. We have thumbed the record in quest of any definitive evidence that it is a correct translation of the Japanese charac-ters found on another unmarked and unpaged sheet, and have found none.

The documents are legally insufficient to prove that the applicant is the owner of the trademark in question. As a matter of fact, the other evidence on record states that the applicant is merely the "exclusive distributor" in the Philippines of the "LIONPAS" pene-trative plaster; describes the applicant as the "Philippine sole distributor" of "LIONPAS"; exh. B simply states that "LIONPAS" is "manufactured exclusively for Petra Hawpia & Co. for distribution in the Philippines." Not being the owner of the trademark "LIONPAS" but being merely an importer and/or distributor of the said penetrative plaster, the appli-cant is not entitled under the law to register it in its name.

On the 2nd issue:

The trademarks "SALONPAS" and "LIONPAS" are confusingly similar in sound. Both these words have the same suffix, "PAS", which is used to denote a plaster that ad-heres to the body with curative powers. "Pas, being merely descriptive, furnishes no in-dication of the origin of the article and therefore is open for appropriation by anyone (Ethepa vs. Director of Patents, L-20635, March 31, 1966) and may properly become the subject of a trademark by combination with another word or phrase.

Two letters of "SALONPAS" are missing in "LIONPAS"; the first letter a and the letter s. Be that as it may, when the two words are pronounced, the sound effects are confus-ingly similar. And where goods are advertised over the radio, similarity in sound is of es-pecial significance (Co Tiong Sa vs. Director of Patents, 95 Phil. 1 citing Nims, The Law of Unfair Competition and Trademarks, 4th ed., vol. 2, pp. 678-679). "The importance of this rule is emphasized by the increase of radio advertising in which we are deprived of help of our eyes and must depend entirely on the ear" (Operators, Inc. vs. Director of Patents, supra).

In the case at bar, "SALONPAS" and "LIONPAS", when spoken, sound very much alike. Similarity of sound is sufficient ground for this Court to rule that the two marks are con-fusingly similar when applied to merchandise of the same descriptive properties (see Celanese Corporation of America vs. E. I. Du Pont, 154 F. 2d. 146, 148).

The registration of "LIONPAS" cannot therefore be given due course.

Decision of the respondent Director of Patents is set aside, and the petition of the re-spondent Petra Hawpia & Co. is hereby dismissed.

Asia Brewery vs Court of Appeals and San Miguel Corporation

Facts:

In September 1988, San Miguel Corporation (SMC) sued Asia Brewery Inc. for allegedly infringing upon their trademark on their beer product popularly known as “San Miguel Pale Pilsen”; that Asia Brewery’s “Beer na Beer” product, by infringing upon SMC’s trademark has committed unfair competition as “Beer na Beer” creates confusion between the two products. The RTC ruled in favor of Asia Brewery but the Court of Appeals reversed the RTC.

Issue:

Whether or not Asia Brewery infringed upon the trademark of SMC.

Held:

No. Both products are manufactured using amber colored steinie bottles of 320 ml. Both were labeled in a rectangular fashion using white color paint. But other than these similarities, there are salient differences between the two. As found by the Supreme Court, among others they are the following:

1. The dominant feature of SMC’s trademark are the words “San Miguel Pale Pilsen” while that of Asia Brewery’s trademark is the word “Beer”. Nowhere in SMC’s product can be seen the word “Beer” nor in Asia Brewery’s product can be seen the words “San Miguel Pale Pilsen”. Surely, someone buying “Beer na Beer” cannot mistake it as “San Miguel Pale Pilsen” beer.

2. The bottle designs are different. SMC’s bottles have slender tapered neck while that of “Beer na Beer” are fat. Though both beer products use steinie bottles, SMC cannot claim that Asia Brewery copied the idea from SMC. SMC did not invent but merely borrowed the steinie bottle from abroad and SMC does not have any patent or trademark to protect the steinie bottle shape and design.

3. In SMC bottles, the words “pale pilsen” are written diagonally while in “Beer na Beer”, the words “pale pilsen” are written horizontally. Further, the words “pale pilsen” cannot

be said to be copied from SMC for “pale pilsen” are generic words which originated from Pilsen, Czechoslovakia. “Pilsen” is a geographically descriptive word and is non-registrable.

4. SMC bottles have no slogans written on them while Asia Brewery’s bottles have a copyrighted slogan written on them that is “Beer na Beer”.

5. In SMC bottles, it is expressly labeled as manufactured by SMC. In Asia Brewery beer products, it is likewise expressly labeled as manufactured by Asia Brewery. Surely, there is no intention on the part of Asia Brewery to confuse the public and make it appear that “Beer na Beer” is a product of SMC, a long-established and more popular brand.

6.

Justice Cruz Dissenting:

A number of courts have held that to determine whether a trademark has been infringed, we must consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the marks as a totality, not usually to any part of it. The court therefore should be guided by its first impression, for a buyer acts quickly and is governed by a casual glance, the value of which may be dissipated as soon as the court assumes to analyze carefully the respective features of the mark.

ANG SI HENG and SALUSTIANA DEE, vs. WELLINGTON DEPARTMENT STORE, INC., BENJAMIN CHUA, S.R. MENDINUETO, and FELIMON COSIO

Facts:

The plaintiffs-appellants are engaged in the business of manufacturing shirts, pants, drawers, and other articles of wear for men, women, and children. They have been in that business since the year 1938, having obtained the registration for the said articles the trademark of "Welling-ton." In the year 1940 they registered the business name "Wellington Company," and this regis-tration of the name was renewed on June 11, 1946. Their invoices, stationery, and signboard bear the trade name "Wellington Company," and in newspaper advertisements they described their business as "Wellington Shirt Factory." It does not appear, however, that their trademark for their articles of wear was again registered after August 27, 1938, nor their trade name regis -tered after 1946.

Defendant Benjamin Chua applied for the registration of the business name "Wellington De-partment Store" on May 7, 1946. His application was approved by the Bureau of Commerce, and a certificate issued in his favor. On June 8, 1946, this business name was transferred to Wellington Department Store, Inc., of which he is the president. It does not appear, however, that his application with the Bureau of Commerce for the registration of the business name "Wellington Department Store" has been renewed, and neither does it appear that the business name "Wellington Company" applied for by plaintiffs-appellants has also been renewed.

The plaintiffs allege that the use of the words "Wellington Department Store" as a business name and as a corporate name by the defendant deceives the public into buying defendant cor-poration's goods under the mistaken belief that the names are the plaintiff's or have the same source as plaintiffs' goods, thereby resulting in damage to them. They, therefore, pray that the defendant corporation be enjoined from using the business name "Wellington Department Store" and the corporate name "Wellington Department Store, Inc"; that the Director of Com-merce be ordered to cancel the registration of said business name, and the Securities and Ex -change Commissioner be also ordered to cancel the corporate name "Wellington Department Store, Inc."

In their answer, defendants allege that the plaintiffs are engaged in the manufacture or produc-tion of shirts, pants, drawers, and other articles of wear for men, women, and children, and keep a dry goods store for the sale of the same, whereas they are not engaged in the same business or in the manufacture or sale of articles with the trademark "Wellington," and that they are keeping a store for articles such as shoes, hats, toys, perfumes, bags, apparels, and the like, most of which are different from those manufactured and sold by plaintiffs-appellants.

Issue: Whether or not “Wellington” is registrable as a trademark/name

Held: NO

The term "Wellington" is either a geographical name or the surname of a person. But mere geo-graphical names are ordinarily regarded as common property, and it is a general rule that the same cannot be appropriated as the subject of an exclusive trademark or trade name . Even if Wellington were a surname, which is not even that of the plaintiffs-appellants, it cannot also be validly registered as a trade name. As the term cannot be appropriated as a trademark or a trade name, no action for violation thereof can be maintained, as none is granted by the statute in such cases. The right to damages and for an injunction for infringement of a trademark or a trade name is granted only to those entitled to the exclusive use of a registered trademark or trade name. It is evident, therefore, that no action may lie in favor of the plaintiffs-appellants herein for damages or injunctive relief for the use by the defendants-appellees of the name "Wellington."

In order to determine whether defendants are liable in this respect and have deceived the pub-lic into believing that the goods they sell are of plaintiffs' manufacture or proceed from the same source as plaintiffs' goods, all the surrounding circumstances must be taken into account, especially the identity or similarity of their business, how far the names are a true description of the kind and quality of the articles manufactured or the business carried on, the extent of the confusion which may be created or produced, the distance between the place of business of one and the other party, etc.

While there is similarity between the trademark or trade name "Wellington Department Store," no confusion or deception can possibly result or arise from such similarity because the latter is a "department store," while the former does purport to be so. The name "Wellington" is ad-

mittedly the name of the trademark on the shirts, pants, drawers, and other articles of wear for men, women and children, whereas the name used by the defendant indicates not these manu-factured articles or any similar merchandise, but a department store.

(Exception to the general rule): Even a name or phrase not capable of appropriation as trade-mark or trade name may, by long and exclusive use by a business with reference thereto or to its products, acquire a proprietary connotation, such that the name or phrase to the purchasing public becomes associated with the business or the products and entitled to protection against unfair competition.

But in the case at bar, the principle therein enunciated cannot be made to apply because the evidence submitted by the appellants did not prove that their business has continued for so long a time that it has become of consequence and acquired a goodwill of considerable value, such that its articles and products have acquired a well-known reputation and confusion will result by the use of the disputed name by the defendants' department store.

E.Y. INDUSTRIAL SALES vs. SHEN DAR ELECTRICITY

EYIS is a domestic corporation engaged in the production, distribution and sale of air compres-sors and other industrial tools and equipment. Engracio Yap is the Chairman of the Board of Di-rectors of EYIS.

Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture of air compressors.

Both companies claimed to have the right to register the trademark "VESPA" for air compres-sors.

FACTS:

- From 1997 to 2004, EYIS imported air compressors from Shen Dar through sales con-tracts. In the corresponding Bill of Ladings, the items were described merely as air com-pressors. There is no documentary evidence to show that such air compressors were marked "VESPA."

- On June 9, 1997, Shen Dar filed Trademark Application with the IPO for the mark "VESPA, Chinese Characters and Device" for use on air compressors and welding ma-chines.

- On July 28, 1999, EYIS filed Trademark Application also for the mark "VESPA," for use on air compressors.

- On January 18, 2004, the IPO issued in favor of EYIS a COR. Thereafter, on February 8, 2007, Shen Dar was also issued a COR

- Shen Dar filed a Petition for Cancellation of EYIS’ COR with the BLA

- In the Petition, Shen Dar primarily argued that the issuance of the COR in favor of EYIS violated the IP CODE having first filed an application for the mark. Shen Dar further alleged that EYIS was a mere distributor of air compressors bearing the mark "VESPA" which it imported from Shen Dar. Shen Dar also argued that it had prior and exclusive right to the use and registration of the mark "VESPA" in the Philippines under the provisions of the Paris Convention.

- EYIS and Yap denied the claim of Shen Dar to be the true owners of the mark "VESPA" being the sole assembler and fabricator of air compressors since the early 1990s. They further alleged that the air compressors that Shen Dar allegedly supplied them bore the mark "SD" for Shen Dar and not "VESPA." Moreover, EYIS argued that Shen Dar, not being the owner of the mark, could not seek protection from the provisions of the Paris Convention or the IP Code.

- BLA: granted VESPA in favour of EY Industrial

- IPO upheld BLO and cancelled registration of Shen Dar

ISSUE:

1) Whether the IPO Director General can validly cancel Shen Dar’s Certificate of Reg-istration

Shen Dar challenges the propriety of such cancellation on the ground that there was no pe-tition for cancellation as required under Sec. 151 of RA 8293.

Office Order No. 79, Series of 2005, provides under its Sec. 5 that:

Section 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases.¾The rules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases. The Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict technical rules of procedure and evidence but may adopt, in the absence of any applicable rule herein, such mode of proceedings which is consistent with the requirements of fair play and conducive to the just, speedy and inexpensive disposition of cases, and which will give the Bu-reau the greatest possibility to focus on the contentious issues before it. (Emphasis supplied.)

The above rule reflects the oft-repeated legal principle that quasi-judicial and administrative bod-ies are not bound by technical rules of procedure. Such principle, however, is tempered by funda-mental evidentiary rules, including due process. Thus, we ruled in Aya-ay, Sr. v. Arpaphil Ship-ping Corp.:

It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the techni-cal rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules.

This was later reiterated in Lepanto Consolidated Mining Company v. Dumapis:29

While it is true that administrative or quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases, this procedural rule should not be con-strued as a license to disregard certain fundamental evidentiary rules. The evidence presented must at least have a modicum of admissibility for it to have probative value. Not only must there be some evidence to support a finding or conclusion, but the evidence must be substantial. Sub-stantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Thus, even though technical rules of evi-dence are not strictly complied with before the LA and the NLRC, their decision must be based on evidence that must, at the very least, be substantial.

The fact that no petition for cancellation was filed against the COR issued to Shen Dar does not preclude the cancellation of Shen Dar’s COR. It must be emphasized that, during the hearing for the cancellation of EYIS’ COR before the BLA, Shen Dar tried to establish that it, not EYIS, was the true owner of the mark "VESPA" and, thus, entitled to have it regis-tered. Shen Dar had more than sufficient opportunity to present its evidence and argue its case, and it did. It was given its day in court and its right to due process was respected. The IPO Director General’s disregard of the procedure for the cancellation of a registered mark was a valid exercise of his discretion.

BLUE CROSS INSURANCE, INC. vs. BLUE CROSS and BLUE SHIELD ASSOCIATION

Petitioner-appellants Blue Cross Insurance, Inc. and Blue Cross Health Care, Inc. filed a Petition for Cancellation seeking the cancellation of Certificate of Registration No. 35780 of the service mark “BLUE CROSS” for distribution of hospital care on pre-payment financing basis issued in the name of respondents-appellee Blue Cross and Blue Shield Association.

In their petition for cancellation, herein petitioner-appellants alleged that: on July 21, 1986 Blue Cross Insurance, Inc. was registered as a business name with the Bureau of Domestic Trade, Department of Trade and Industry (DTI); that its certificate of registration of business name was renewed on August 22, 1991; that as early as June 25, 1986 Blue Cross Insurance, Inc. had adopted and commercially used the mark “Blue Cross” as part of its corporate name/trade name; that to address the public demand for health care maintenance services, the incorporators of Blue Cross Insurance, Inc. formed Blue Cross Health Care, Inc. which was registered with the Securities and Exchange Commission (SEC) on July 22, 1987 and registered as a business name with the DTI on August 25, 1987; that BlueCross Health Care, Inc. continued to commercially use the mark “BLUECROSS” as part of its corporate name/trade name since its registration with the DTI on July 22, 1987 up to the present; that by virtue of their prior adoption and commercial use of the mark “BLUE CROSS”, Blue CrossInsurance, Inc. and Blue Cross Health Care, Inc. had the exclusive title to, and interest in the said service mark or trade name.

In their Amended Answer7, respondent-appellee Blue Cross and Blue Shield Association raised, by way of affirmative and/or special defenses that: its predecessor-in-interest, the American Hospital Association, was already the owner of the mark “Blue Cross” which was registered in the Philippines on August 27, 1959 under Certificate of Registration No. 7619; that on February 5, 1952 the respondent-appellee obtained United States patent and Trademark Office service mark registration number 554,488 for the mark BLUE CROSS which registration was valid for 20 years or until February 5, 1972; that registration number 554,488 was renewed for another 10 years or until February 5, 1992; that on July 22, 1986 it was

granted a new Certificate of Registration No. 35780 by the Patents Office for the said service mark; that during the fifty (50) years that it has been used, the service mark “BLUE CROSS” has achieved goodwill, fame and favorable reputation worldwide; that the use by Blue Cross Insurance, Inc. and Blue Cross Health Care, Inc. of the said service mark was without the consent and authorization of the respondent-appellee; and that on March 26, 1992 it had filed a Petition with the SEC for the cancellation of the servicename “BLUE CROSS” from the corporate name of Blue Cross Insurance, Inc. and Blue Cross Health Care, Inc.

On 28 December 2007, Hon. Estrellita B. Abelardo, the Director of the Bureau of Legal Affairs, IPO, rendered the assailed Decision denying the petitioner-appellant’s petition for cancellation. The Director held that the validity of Certificate of Registration No. 35780 which was issued on July 22, 1985 enjoys the presumption of validity. The IPO ruled that while Certificate of Registration No. 7619 (which was registered in the Philippines on August 27, 1959) had lapsed on August 27, 1979, the respondent appellee’s continued use of the mark “BLUE CROSS” preserved its trademark rights. Finally, that the respondent-appellee’s use of the mark “BLUE CROSS” precedes that of herein petitioner-appellants, and that the respondent-appellee’s trademarks rights were acquired by it even previous to petitioner-appellants’ use of it from 1987 and years thereafter.

HELD:

The petitioner-appellants underscore the need for actual use of the subject service mark as a prerequisite, aside from registration, to the acquisition of the right of ownership over it.

Against the evidence presented by the petitioners-appellants, the respondent-appellee, aside from being a prior registrant, in fact presented satisfactory proof of actual commercial use. These proofs were correctly appreciated, identified and stated in the assailed Decision. Along this point, we adopt the findings and conclusion of Hon. Estrellita Beltran-Abelardo, ratiocinated in this wise:

“On the other hand, a perusal of the evidence show that respondent-registrant's Certificate of Trademark Registration No. 35780 was issued on July 22, 1985. By virtue of its issuance, the registrant enjoys in its favor the presumption of validity of registration and ownership over the mark “Blue Cross”. Section 20 provides:

'Section 20. Certificate of registration prima facie evidence of validity. - A certificate of registration of a mark or trade-name shall be prima facie evidence of the validity of the registration, the registrant's ownership of the mark or trade- name, and of the registrant's exclusive right to use the same in connection with the goods, business or services specified in the certificate, subject to any conditions and limitations stated therein.'

In addition to this, petitioner's own evidence reveal that prior to July 22, 1985, “Blue Cross” was already registered in the name of American Hospital Association (Respondent registrant's predecessor-in-interest) under Certificate of Registration No. 7916 issued in August 27, 1959 for distribution of hospital case on a pre-payment financing basis. This fact was contained in a certification by the Bureau of Patents Trademarks and Technology Transfer Bureau, (BPTTT) dated 27 May 1992. (Exhibit “H”). The certification signed by Rogelio Pulido, also disclosed that Registration No. 7619 had lapsed on August 27, 1979. Thereafter, the “Blue Cross”mark was registered under the name of Blue Cross and Blue Shield Association 22 July 1986 under Registration No. 35780 (now subject of this petition for cancellation).

In this regard, the rights of an owner of a mark is maintained even if it fails to renew registration and will not be prejudiced on account of one who attempts to register a mark that does not belong to that person. The law provides:

'Section 16. Effect of Failure to Renew registration. Mere failure to renew any registration shall not affect the right of the registrant to apply for and obtain a new registration under the provision of this Act, nor such failure entitle any other person to register a mark or trade-name unless he is entitled thereto in accordance with the provisions of this Act.'

Preceding therefrom, even if the respondent-registrant earlier registration of the Blue Cross mark lapsed after August 27, 1979, its continuous use preserves its trademark rights which have been earlier acquired.

Moreover, respondent-registrant's use of the mark “Blue Cross” precedes that of the petitioner. A certification signed by Dr. Nimfa Concepcion, dated May 12, 1994 proves that Blue Cross and Shields cards were recognized and honored as early as 1966. Her testimony was used to prove that that Blue Cross and Blue Shield cards were used by Filipinos and Americans in the Philippines. Evidence consisting of an actual Blue Cross Blue Shield card of respondent-registrant through the testimony of one Veneranda P. Lorente. Health Benefits claim form and Overseas claim form was offered in evidence to prove the use of the mark in the Philippines. The same witness identified a Subscribed Explanation of Benefits form containing the name St. Luke's which referred to St. Luke's Hospital to prove that respondent-registrant's card was recognized by a Philippine hospital.

Respondent-registrant also offered evidence of the registrations it secured for its marks BLUE CROSS in countries all over the world.

The acquisition of rights to a trademark under the old law may be through lawful, commercial use in the Philippines. The law is clear and explicit on this point.

Applying the law, this Bureau finds that respondent registrant has shown its actual adoption, use and ownership of the Blue Cross mark not only through registration, but through the availability and usage of its card for medical insurance in the Philippines. The use in commerce since 1966 proves that it is the owner of the BLUE CROSS mark and is entitled to secure registration for the same on the basis of the aforequoted provisions of Sec. 2 and Sec. 2-A of the old Trademark law.

Inspite of the fact that petitioner was able to show continuous use of the mark from 1987 and years thereafter, this cannot defeat respondent-resgistrant's trademarks rights already acquired previous to this period. Therefore, its petition must necessarily fail.