CASE DIGEST: Etepha A.G. vs.

Director of Patents 16 SCRA 495 (1966)

FACTS: On April 23, 1959, private respondent Westmont Pharmaceuticals, Inc. sought registration of trademark Atussin This was objected to by petitioner Etepha, A.G. alleging that it will be detrimental on their part as it is confusingly similar to its Pertussin. Both products deal with the treatment of cough.

ISSUE: Whether or not Attusin may be registered as a trademark.

HELD: Yes. x x x The validity of a cause for infringment is predicated upon colorable imitation. The phrase colorable imitaion 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.

While tussin by itself cannot thus be used exclusively to identify ones goods, it may properly become the subject of a trademark by combination with another word or phrase.

The two labels are entirely different in colors, contents, arrangement of words theeon, sizes, shapes and general appearance. The contrasts in pictorial effects and appeals to the eye is so pronounced that the label of one cannot be mistaken for that of the other, not even by persons unfamiliar with the two trademarks.

We cannot escape notice of the fact that the two words do not sound alike when pronounced.

LA CHEMISE LACOSTE, S. A., vs. HON. OSCAR C. FERNANDEZ, Facts: The petitioner is a foreign corporation, organized and existing under the laws of France and not doing business in the Philippines, It is undeniable from the records that it is the actual owner of the abovementioned trademarks used on clothings and other goods specifically sporting apparels sold in many parts of the world and which have been marketed in the Philippines since 1964, The main basis of the private respondent's case is its claim of alleged prior registration. In 1975, Hemandas & Co., a duly licensed domestic firm applied for and was issued Reg. No. SR-2225 (SR stands for 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. Two years later, it applied for the registration of the same trademark under the Principal Register. The Patent Office eventually issued an order which allowed the application under contest. Thereafter, Hemandas & Co. assigned to respondent Gobindram Hemandas all rights, title, and interest in the trademark "CHEMISE LACOSTE & DEVICE". On November 21, 1980, the petitioner filed its application for registration of the trademark "Crocodile Device" (Application Serial No. 43242) and "Lacoste" (Application Serial No. 43241).The former was approved for publication while the latter was opposed by Games and Garments in Inter Partes Case No. 1658. In 1982, the petitioner filed a Petition for the Cancellation of Reg. No. SR-2225 docketed as Inter Partes Case No. 1689. Both cases have now been considered by this Court in Hemandas v. Hon. Roberto Ongpin (G.R. No. 65659). On March 21, 1983, the petitioner filed with NBI a letter-complaint alleging therein the acts of unfair competition being committed by Hemandas and requesting their assistance in his apprehension and prosecution. The NBI conducted an investigation and subsequently filed with the respondent court two applications for the issuance of search warrants which would authorize the search of the premises used and occupied by the Lacoste Sports Center and Games and Garments both owned and operated by Hemandas. The respondent court issued search warrants Search Warrantfor violation of Article 189 and the NBI agents executed the two search warrants and as a result of the search found and seized various goods and articles described in the warrants. Hemandas filed a motion to quash the search warrants alleging that the trademark used by him was different from petitioner's trademark and that pending the resolution of IPC No. 1658 before the Patent Office, any criminal or civil action on the same subject matter and between the same parties would be premature. The petitioner filed its opposition to the motion arguing that the motion to quash was fatally defective as it cited no valid ground for the quashal of the search warrants and that the grounds alleged in the motion were absolutely without merit. The State Prosecutor likewise filed his opposition on the grounds that the goods seized were instrument of a crime and necessary for the

resolution of the case on preliminary investigation and that the release of the said goods would be fatal to the case of the People should prosecution follow in court. The respondent court was, however, convinced that there was no probable cause to justify the issuance of the search warrants. Thus, in its order dated March 22, 1983, the search warrants were recalled and set aside and the NBI agents or officers in custody of the seized items were ordered to return the same to Hemandas. Issue: Whether or not the petitioner, a foreign corporation not doing business in the Philippines, sue before Philippine Courts Held. Yes, it can sure before Philippine courts. As early as 1927, this Court was, and it still is, of the view that a foreign corporation not doing business in the Philippines needs no license to sue before Philippine courts for infringement of trademark and unfair competition. Thus, in Western Equipment and Supply Co. v. Reyes (51 Phil. 115), this Court held that a foreign corporation which has never done any business in the Philippines and which is unlicensed and unregistered to do business here, but is widely and favorably known in the Philippines through the use therein of its products bearing its corporate and tradename, has a legal right to maintain an action in the Philippines to restrain the residents and inhabitants thereof from organizing a corporation therein bearing the same name as the foreign corporation, when it appears that they have personal knowledge of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is to deal and trade in the same goods as those of the foreign corporation. We further held: xxx xxx xxx ... That company is not here seeking to enforce any legal or control rights arising from, or growing out of, any business which it has transacted in the Philippine Islands. The sole purpose of the action: Is to protect its reputation, its corporate name, its goodwill, whenever that reputation, corporate name or goodwill have, through the natural development of its trade, established themselves.' And it contends that its rights to the use of its corporate and trade name: Is a property right, a right in rem, which it may assert and protect against all the world, in any of the courts of the world-even in jurisdictions where it does not transact business-just the same as it may protect its tangible property, real or personal, against trespass, or conversion. Citing sec. 10, Nims on Unfair Competition and TradeMarks and cases cited; secs. 21-22, Hopkins on

TradeMarks, Trade Names and Unfair Competition and cases cited.' That point is sustained by the authorities, and is well stated in Hanover Star Mining Co. v. Allen and Wheeler Co. (208 Fed., 513). in which the syllabus says: Since it is the trade and not the mark that is to be protected, a trade-mark acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where the trader's goods have become known and Identified by the use of the mark. Our recognizing the capacity of the petitioner to sue is not by any means novel or precedent setting. Our jurisprudence is replete with cases illustrating instances when foreign corporations not doing business in the Philippines may nonetheless sue in our courts. In East Board Navigation Ltd, v. Ysmael and Co., Inc. (102 Phil. 1), we recognized a right of foreign corporation to sue on isolated transactions. In General Garments Corp. v. Director of Patents (41 SCRA 50), we sustained the right of Puritan Sportswear Corp., a foreign corporation not licensed to do and not doing business in the Philippines, to file a petition for cancellation of a trademark before the Patent Office. In upholding the right of the petitioner to maintain the present suit before our courts for unfair competition or infringement of trademarks of a foreign corporation, we are moreover recognizing our duties and the rights of foreign states under the Paris Convention for the Protection of Industrial Property to which the Philippines and France are parties. We are simply interpreting and enforcing a solemn international commitment of the Philippines embodied in a multilateral treaty to which we are a party and which we entered into because it is in our national interest to do so. Article 1, 2, 6, 8, 10 and 17 of the Paris Convention provides that members thereof should ensure that nationals of members of the Union, shall as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals, without prejudice to the rights specially provided by the present Convention. Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided they observe the conditions and formalities imposed upon national. Also that A trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark. And (1) The countries of the Union are bound to assure to persons entitled to the benefits of the Union effective protection against unfair competition. xxx xxx xxx In Vanity Fair Mills, Inc. v. T Eaton Co. (234 F. 2d 633) the United States Circuit Court of Appeals had occasion to comment on the extraterritorial application of the Paris Convention It said that: [11] The International Convention is essentially a compact between the various member countries to accord in their own countries to citizens of the other contracting parties trademark and other rights comparable to those accorded their own citizens by their domestic law. The underlying principle is that foreign nationals should be given the same treatment in each of the member countries as that country makes available to its own citizens. In addition, the

Convention sought to create uniformity in certain respects by obligating each member nation 'to assure to nationals of countries of the Union an effective protection against unfair competition.' [12] The Convention is not premised upon the Idea that the trade-mark and related laws of each member nation shall be given extra-territorial application, but on exactly the converse principle that each nation's law shall have only territorial application. Thus a foreign national of a member nation using his trademark in commerce in the United States is accorded extensive protection here against infringement and other types of unfair competition by virtue of United States membership in the Convention. But that protection has its source in, and is subject to the limitations of, American law, not the law of the foreign national's own country. ... By the same token, the petitioner should be given the same treatment in the Philippines as we make available to our own citizens. We are obligated to assure to nationals of "countries of the Union" an effective protection against unfair competition in the same way that they are obligated to similarly protect Filipino citizens and firms. Pursuant to this obligation, the Ministry of Trade on November 20, 1980 issued a memorandum addressed to the Director of the Patents Office directing the latter: xxx xxx xxx ... to reject all pending applications for Philippine registration of signature and other world famous trademarks by applicants other than its original owners or users. It is further directed that, in cases where warranted, Philippine registrants of such trademarks should be asked to surrender their certificates of registration, if any, to avoid suits for damages and other legal action by the trademarks' foreign or local owners or original users. The memorandum is a clear manifestation of our avowed adherence to a policy of cooperation and amity with all nations. It is not, as wrongly alleged by the private respondent, a personal policy of Minister Luis Villafuerte which expires once he leaves the Ministry of Trade. For a treaty or convention is not a mere moral obligation to be enforced or not at the whims of an incumbent head of a Ministry. It creates a legally binding obligation on the parties founded on the generally accepted principle of international law of pacta sunt servanda which has been adopted as part of the law of our land. (Constitution, Art. II, Sec. 3). The memorandum reminds the Director of Patents of his legal duty to obey both law and treaty. It must also be obeyed.

SEHWANI, INCORPORATED VS. INN-OUT BURGER, INC. 536 SCRA 225 Facts: In this case, respondent filed on June 2, 1997 an application for registration of its trademark InN-Out Burger & Arrow Design and device mark In-N-Out. In the course of its prosecution of

said application, respondent discovered that petitioner had successfully registered In-N-Out (the inside of the letter O formed like a star) with Trademark Registration No. 56666, on December 17, 1993. After respondents demand for petitioner to cease and desist from claiming ownership and to voluntarily cancel the latters trademark registration was refused, respondent filed a petition for cancellation of petitioners Trademark Registration No. 56666. Issue: The principal substantive issue for resolution by the Philippine Supreme Court is whether or not respondents In-N-Out trademark for burgers is a well-known mark entitling respondent to cause the cancellation of petitioners registered mark In-N-Out (the inside of the letter O formed like a star). Ruling: Respondents cause is meritorious per the Supreme Court, sustaining the finding of the wellknown status of respondents mark by the Intellectual Property Office (IPO) based on Article 6 of the Paris Convention (to which the US, home country of respondent and the Philippines are signatories) which provides: Article 6 (1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of the registration or use to be well-known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith. xxxx The underpinning of IPOs finding of well-known status for respondents mark was respondents registrations in various countries around the world and its comprehensive advertisements therein. The Supreme Court not only affirmed the said finding but also made the following pronouncement:

The fact that respondents marks are neither registered nor used in the Philippines is of no moment. This pronouncement is based on the expanded interpretation of Article 6 of the Paris Convention by the 1997 Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks by the World Intellectual Property Organization (WIPO) and the Paris Union, Part 1, Article 2 (3) of which provides: (3) [Factors Which Shall Not Be Required] (a) A Member State shall 3not require, as a condition for determining whether a mark is well-known mark: (i) that the mark has been used in, or that the mark has been registered or that an application for registration of the mark has been filed or in respect of, the Member State; (ii) that the mark is well known in, or that the mark has been registered or that an application for registration of the mark has been filed in or in respect of, any jurisdiction other than the Member State; or (iii) that the mark is well known by the public at large in the Member State.

Said pronouncement, however, seems controversial because it appears to fly in the face of the express provisions of the Intellectual Property Code, which in Section 123.1 (e) states: 123.1. A mark cannot be registered if it: xxxx (e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the Philippines, whether or not it is registered here, as being already the mark of a person other than the applicant for registration, and used for identical or similar goods or services: Provided, That in determining whether a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including knowledge in the Philippines which has been obtained as a result of the promotion of the mark; xxxx

There is no evidence on record that respondents marks are well-known to the relevant sector in the Philippines and there is a definitive finding that they are not used in the Philippines. Either factor could have rendered respondents standing to seek relief questionable. Nevertheless, it is difficult to believe that petitioner did not copy respondents fanciful trademark for burgers, In-N-Out, considering the unlimited range of marks available to him.

Nestle vs Court of Appeals and CFC Intellectual Property Law Law on Trademarks, Service Marks and Trade Names Generic Term In 1984, CFC Corporation filed with the Bureau of Patents, Trademarks, and Technology Transfers an application for the registration of its trademark Flavor Master an instant coffee. Nestle opposed the application as it alleged that Flavor Master is confusingly similar to Nestle coffee products like Master Blend and Master Roast. Nestle alleged that in promoting their products, the word Master has been used so frequently so much so that when one hears the word Master it connotes to a Nestle product. They provided as examples the fact that theyve been using Robert Jaworski and Ric Puno Jr. as their commercial advertisers; and that in those commercials Jaworski is a master of basketball and that Puno is a master of talk shows; that the brand of coffee equitable or fit to them is Master Blend and Master Roast. CFC Corporation on the other hand alleged that the word Master is a generic and a descriptive term, hence not subject to trademark. The Director of Patents ruled in favor of Nestle but the Court of Appeals, using the Holistic Test, reversed the said decision. ISSUE: Whether or not the Court of Appeals is correct. HELD: No. The proper test that should have been used is the Dominancy Test. The application of the totality or holistic test is improper since the ordinary purchaser would not be inclined to notice the specific features, similarities or dissimilarities, considering that the product is an inexpensive and common household item. The use of the word Master by Nestle in its products and commercials has made Nestle acquire a connotation that if its a Master product it is a Nestle product. As such, the use by CFC of the term MASTER in the trademark for its coffee product FLAVOR MASTER is likely to cause confusion or mistake or even to deceive the ordinary purchasers. In addition, the word MASTER is neither a generic nor a descriptive term. As such, said term can not be invalidated as a trademark and, therefore, may be legally protected.

Generic terms are those which constitute the common descriptive name of an article or substance, or comprise the genus of which the particular product is a species, or are commonly used as the name or description of a kind of goods, or imply reference to every member of a genus and the exclusion of individuating characters, or refer to the basic nature of the wares or services provided rather than to the more idiosyncratic characteristics of a particular product, and are not legally protectable. On the other hand, a term is descriptive and therefore invalid as a trademark if, as understood in its normal and natural sense, it forthwith conveys the characteristics, functions, qualities or ingredients of a product to one who has never seen it and does not know what it is, or if it forthwith conveys an immediate idea of the ingredients, qualities or characteristics of the goods, or if it clearly denotes what goods or services are provided in such a way that the consumer does not have to exercise powers of perception or imagination. Rather, the term MASTER is a suggestive term brought about by the advertising scheme of Nestle. Suggestive terms are those which, in the phraseology of one court, require imagination, thought and perception to reach a conclusion as to the nature of the goods. Such terms, which subtly connote something about the product, are eligible for protection in the absence of secondary meaning. While suggestive marks are capable of shedding some light upon certain characteristics of the goods or services in dispute, they nevertheless involve an element of incongruity, figurativeness, or imaginative effort on the part of the observer.

Phil. Refining Co. v. Ng Sam and Director of Patents G.R. No. L-26676, July 30, 1982 Facts of the Case: The petitioner Philippine Refining Co. first used'Camia' as trademark for its products in 1922. In 1949, it caused the registration of the said trademark for its lard, butter, cooking oil, detergents, polishing materials and soap products. In 1960, Ng Sam filed an application for 'Camia' for its ham product (Class 47), alleging its first use in 1959. The petitioner opposed the said application but the Patent Office allowed the registration of Ng Sam. Issue: Is the product of Ng Sam (Ham) and those of the petitioner so related that the use of the trademark 'Camia' on said goods would result to confusion as to their origin? HELD: NO. The businesses of the parties are non-competitive and the products are so unrelated that the use of the same trademark will not give rise to confusion nor cause damage to the petitioner. The right to a trademark is a limited one, hence, others may use the same mark on unrelated goods if no confusion would arise. A trademark is designed to identify the user, hence, it should be so distinctive and sufficiently original so as to enable those who see it to recognize instantly its source or origin. A trademark must be affirmative and definite, significant and distinctive and capable of indicating origin.

'Camia' as a trademark is far from being distinctive, It in itself does not identify the petitioner as the manufacturer of producer of the goods upon which said mark is used. If a mark is so commonplace, it is apparent that it can't identify a particular business and he who adopted it first cannot be injured by any subsequent appropriation or imitation by others and the public will not be deceived. Mere classification of the goods cannot serve as the decisive factor in the resolution of whether or not the goods a related. Emphasis should be on the similarity of products involved and not on arbitrary classification of general description of their properties or characteristics.

ANDRES ROMERO vs. MAIDEN FORM BRASSIERE CO., INC., and THE DIRECTOR OF PATENTS Facts: On February 12, 1957, respondent company, a foreign corporation, filed with respondent Director of Patents an application for registration (pursuant to Republic Act No. 166) of the trademark "Adagio" for the brassieres manufactured by it. In its application, respondent company alleged that said trademark was first used by it in the United States on October 26, 1937, and in the Philippines on August 31, 1946; that it had been continuously used by it in trade in, or with the Philippines for over 10 years; that said trademark "is on the date of this application, actually used by respondent company on the following goods, classified according to the official classification of goods (Rule 82) - Brassieres, Class 40"; and that said trademark is applied or affixed by respondent to the goods by placing thereon a woven label on which the trademark is shown. Acting on said application, respondent Director, on August 13, 1957, approved for publication in the Official Gazette said trademark of respondent company, in accordance with Section 7 of Republic Act No. 166 (Trademark Law), having found, inter alia, that said trademark is "a fanciful and arbitrary use of a foreign word adopted by applicant as a trademark for its product; that it is neither a surname nor a geographical term, nor any that comes within the purview of Section 4 of Republic Act No. 166; and that the mark as used by respondent company convincingly shows that it identifies and distinguishes respondent company's goods from others." On October 17, 1957, respondent Director issued to respondent company a certificate of registration of with, trademark "Adagio". On February 26, 1958, petitioner filed with respondent Director a petition for cancellation of said trademark, on the grounds that it is a common descriptive name of an article or substance on which the patent has expired; that its registration was obtained fraudulently or contrary to the provisions of Section 4, Chapter II of Republic Act No. 166; and that the application for its registration was not filed in accordance with the provisions of Section 37, Chapter XI of the same Act. Petitioner also alleged that said trademark has not become distinctive of respondent

company's goods or business; that it has been used by respondent company to classify the goods (the brassieres) manufactured by it, in the same manner as petitioner uses the same; that said trademark has been used by petitioner for almost 6 years; that it has become a common descriptive name; and that it is not registered in accordance with the requirements of Section 37(a), Chapter XI of Republic Act No. 166. Issues:
1. Whether or not the trademark "Adagio" has become a common descriptive name of a

particular style of brassiere and is, therefore, unregistrable. (It is urged that said trademark had been used by local brassiere manufacturers since 1948, without objection on the part of respondent company.). 2. Whether or not respondent Director erred in registering the trademark in question, despite appellee's non-compliance with Section 37, paragraphs 1 and 4 (a) of Republic Act No. 166. 3. Whether or not the registration the trademark in question was fraudulent or contrary Section 4 of Republic Act No. 166. 4. Whether or not respondent Director erred in declaring illegal the appropriation in the Philippines of the trademark in question by appellant.

Held: 1. This claim is without basis in fact. The evidence shows that the trademark "Adagio" is a musical term, which means slowly or in an easy manner, and was used as a trademark by the owners thereof (the Rosenthals of Maiden Form Co., New York) because they are musically inclined. Being a musical term, it is used in an arbitrary (fanciful) sense as a trademark for brassieres manufactured by respondent company. It also appears that respondent company has, likewise, adopted other musical terms such as "Etude", "Chansonette" "Prelude" "Over-ture", and "Concerto", to identify, as a trademark, the different styles or types of its brassieres. As respondent Director pointed out, "the fact that said mark is used also to designate a particular style of brassiere, does not affect its registrability as a trademark" It is not true that respondent company did not object to the use of said trademark by petitioner and other local brassiere manufacturers. The records show that respondent company's agent, Mr. Schwartz, warned the Valleson Department Store to desist from the sale of the "Adagio" Royal Form brassieres manufactured by petitioner, and even placed an advertisement in the local newspapers (Manila Daily Bulletin, Manila Times, Fookien Times, and others) warning the public against unlawful use of said trademark. Respondent company's long and continuous use of the trademark "Adagio" has not rendered it merely descriptive of the product. In Winthrop Chemical Co. v. Blackman (268 NYS 653), it was held that widespread dissemination does not justify the defendants in the use of the trademark.

Brassieres are usually of different types or styles, and appellee has used different trademarks for every type as shown by its labels, Exhibits W-2 (Etude), W-3 (Chansonette), W-4 (Prelude), W-5 (Maidenette), and W-6, (Overture). The mere fact that appellee uses "Adagio" for one type or style, does not affect the validity of such word as a trademark. 2. This contention flows from a misconception of the application for registration of trademark of respondent. As we see it, respondent's application was filed under the provisions of Section 2 of Republic Act No. 166 as amended by Section 1 of Republic Act 865 which reads as follows: "SEC. 2. What are registrable Trademarks, ... own by persons, corporations, partnerships or associations domiciled ... in any foreign country may be registered in accordance with the provisions of this Act: Provided, That said trademarks, trade-names, or service marks are actually in use in commerce and services not less than two months in the Philippines before the time the applications for registration are filed: ..." Section 37 of Republic Act No. 166 can be availed of only where the Philippines is a party to an international convention or treaty relating to trademarks, in which the trade-mark sought to be registered need not be use in the Philippines. 3. There is no evidence to show that the registration of the trademark "Adagio" was obtained fraudulently by appellee. The evidence record shows, on the other hand, that the trademark "Adagio" was first exclusively in the Philippines by a appellee in the year 1932. There being no evidence of use of the mark by others before 1932, or that appellee abandoned use thereof, the registration of the mark was made in accordance with the Trademark Law. Granting that appellant used the mark when appellee stopped using it during the period of time that the Government imposed restrictions on importation of respondent's brassiere bearing the trademark, such temporary non-use did not affect the rights of appellee because it was occasioned by government restrictions and was not permanent, intentional, and voluntary. 4. Appellant urges that its appropriation of the trademark in question cannot be considered illegal under Philippine laws, because of non-compliance by appellee of Section 37 of Republic Act No. 166. But we have already shown that Section 37 is not the provision invoked by respondent because the Philippines is not as yet a party to any international convention or treaty relating to trademarks. The case of United Drug Co. v. Rectanus, 248 U.S. 90, 39 S. Ct. 48, 63 L. Ed. 141, cited by appellant, is not applicable to the present case, as the records show that appellee was the first user of the trademark in the Philippines, whereas appellant was the later user. Granting that appellant used the trade-mark at the time appellee stopped using it due to government restrictions on certain importations, such fact did not, as heretofore stated, constitute abandonment of the trademark as to entitle anyone to its free use.