CHING VS SALINAS

G.R. No. 161295

June 29, 2005

FACTS:
Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing
Co., the maker and manufacturer of a Utility Model, described as "Leaf Spring
Eye Bushing for Automobile" made up of plastic.
On September 4, 2001, Ching and Joseph Yu were issued by the National
Library Certificates of Copyright Registration and Deposit of the said work
described therein as "Leaf Spring Eye Bushing for Automobile."4
After due investigation, the NBI filed applications for search warrants in the
RTC of Manila against William Salinas, Sr. and the officers and members of
the Board of Directors of Wilaware Product Corporation. It was alleged that
the respondents therein reproduced and distributed the said models
penalized under Sections 177.1 and 177.3 of Republic Act (R.A.) No. 8293.
The respondents averred that the works covered by the certificates issued by
the National Library are not artistic in nature; they are considered
automotive spare parts and pertain to technology. They aver that the models
are not original, and as such are the proper subject of a patent, not
copyright.

ISSUE: WON the Leaf Spring Eye Bushing for Automobile is a work of art

HELD: No copyright granted by law can be said to arise in favor of the

petitioner despite the issuance of the certificates of copyright registration
and the deposit of the Leaf Spring Eye Bushing and Vehicle Bearing Cushion.
RATIO RECIDENDI:
We agree with the contention of the petitioner (citing Section 171.10 of R.A.
No. 8293), that the authors intellectual creation, regardless of whether it is a
creation with utilitarian functions or incorporated in a useful article produced
on an industrial scale, is protected by copyright law. However, the law refers
to a "work of applied art which is an artistic creation." It bears stressing that
there is no copyright protection for works of applied art or industrial design
which have aesthetic or artistic features that cannot be identified separately
from the utilitarian aspects of the article.36 Functional components of useful
articles, no matter how artistically designed, have generally been denied
copyright protection unless they are separable from the useful article.37

In this case, the petitioners models are not works of applied art, nor artistic
works. They are utility models, useful articles, albeit with no artistic design or
value.
A utility model is a technical solution to a problem in any field of human
activity which is new and industrially applicable. It may be, or may relate to,
a product, or process, or an improvement of any of the aforesaid. Essentially,
a utility model refers to an invention in the mechanical field. This is the
reason why its object is sometimes described as a device or useful object. A
utility model varies from an invention, for which a patent for invention is,
likewise, available, on at least three aspects: first, the requisite of "inventive
step" in a patent for invention is not required; second, the maximum term of
protection is only seven years compared to a patent which is twenty
years, both reckoned from the date of the application; and third, the
provisions on utility model dispense with its substantive examination and
prefer for a less complicated system.
Being plain automotive spare parts that must conform to the original
structural design of the components they seek to replace, the Leaf Spring
Eye Bushing and Vehicle Bearing Cushion are not ornamental. They lack the
decorative quality or value that must characterize authentic works of applied
art. They are not even artistic creations with incidental utilitarian functions or
works incorporated in a useful article. In actuality, the personal properties
described in the search warrants are mechanical works, the principal function
of which is utility sans any aesthetic embellishment.

EY Industrial vs. Shen Dar

Tuesday, February 3, 2015
Facts:

EY Industrial Sales is a domestic corporation engaged in the production,

distribution and sale of air compressors.
Shen Dar is a Taiwan-based foreign corporation engaged in the manufacture
of compressors.
From 1997-2004, EY Industrial imported air compressors from Shen Dar.

In 1997, Shen Dar filed a Trademark Application with the Intellectual Property
Office (IPO) for the mark Vespa for the use of air compressors. It was
approved in 2007.
In 1999, EY Industrial filed a Trademark Application also for the mark VESPA
for the use of air compressors. It was approved in 2004.
Shen Dar filed a Petition for Cancellation of the Industrials EYES COR with
the Bureau of Legal Affairs contending that: a. there was a violation of
Section 123.1 (D) of the Intellectual Property Code which provides that: A
mark cannot be registered if it is identical to a mark with an earlier filing or
priority date. b. EY Industrial is only a distributor of the air compressors
On the other hand, EY Industrial alleged that it is the sole assembler and
fabricator of VESPA air compressors since the early 1990s and that Shen Dar
supplied them air compressors with the mark SD and not VESPA

Issues:
1. Who between EY Industrial and Shen Dar is entitled to the trademark
VESPA. EY INDUSTRIAL SALES
2. WON the Bureau of Legal Affairs has the power to cancel the application of
Shen Dar even if it is Shen Dar who filed the case? YES

Held:

1st: EY INDUSTRIAL has the right to the trademark.

Based on the evidence, EYIS owns the VESPA trademark; it has prior use,
as shown by various sales invoices.

Ownership of a mark or trade name may be acquired not necessarily by

registration but by adoption and use in trade or commerce. As between
actual use of a mark without registration, and registration of the mark
without actual use thereof, the former prevails over the latter.

For a rule widely accepted and firmly entrenched, because it has come down
through the years, is that actual use in commerce or business is a prerequisite to the acquisition of the right of ownership. It is non sequitur to hold
that porque EYIS is a distributor, it is no longer the owner.

FIRST-TO-FILE RULE

Under Section 123.1 of IPO provision, the registration of a mark is prevented

with the filing of an earlier application for registration.

This must not, however, be interpreted to mean that ownership should be

based upon an earlier filing date. While RA 8293 (IPC) removed the previous
requirement of proof of actual use prior to the filing of an application for
registration of a mark, proof of prior and continuous use is necessary to
establish ownership of a mark. Such ownership constitutes sufficient
evidence to oppose the registration of a mark.

When we talk about trademark, we are just talking about the mark. It does
not include the product. Shen Dar is the manufacturer of the product, but
they did not name the product as VESPA. It was EY that named the VESPA,
and used the VESPA, even though they were only the distributors. It was EY
that actually used the trademark through the use of receipts, and other
documents.

The first to file rule According to the SC that Shen Dar filed under the old
IPC where prior use is the one applied.

2nd: BLA has the power to cancel the application.

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

The IPO Director General stated that, despite the fact that the instant case
was for the cancellation of the COR issued in favor of EYIS, the interests of

justice dictate, and in view of its findings, that the COR of Shen Dar must be
cancelled.

The above rule reflects the oft-repeated legal principle that quasi-judicial and
administrative bodies are not bound by technical rules of procedure. Such
principle, however, is tempered by fundamental evidentiary rules, including
due process.

The fact that no petition for cancellation was filed against the COR issued to
Shen Dar does not preclude the cancellation of Shen Dars 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 registered. 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 Generals disregard of the procedure for the
cancellation of a registered mark was a valid exercise of his discretion.

Remember, EYs application was the one granted, and it is Shen Dars
application that was cancelled. It does not mean that even you were the one
who filed, it your application cannot be cancelled. The BLA, who has
jurisdiction over the case, were able to determine that it is Shen Dars
trademark that should not have been issued with registration, even it is the
plaintiff.

SUPERIOR COMMERCIAL ENTERPRISES INC. V. KUNNAN ENTERPRISES LTD.

AND SPORTS CONCEPT & DISTRBUTOR, INC.
G.R. No. 16974, 20 April 2010; Brion, J.
FACTS:

Kunnan appointed Superior as its exclusive distributor in the

Philippines under a Distributorship Agreement which states that
Kunnan intends to acquire ownership of the Kennex Trademark
registered by Superior Commercial in the Philippines. Superior
Commercial is desirous of being appointed as the sole distributor of
Kunnan products in the Philippines. Superiors President and General
Manager misled Kunnans Officers into believing that Kunnan could not
acquire trademark rights in the Philippines. Thus, Kunnan decided to

assign its applications to register Pro Kennex as a trademark to

Superior, on condition that Superior acknowledged that Kunnan was
still the real owner of the mark and agreed to return to it to Kunnan on
request. Upon termination of distributorship agreement with Superior,
Kunnan appointedSports Concept as its new distributor. Kunnan
caused the publication of a Notice and Warning in the Manila Bulletins
issue, stating that (1) it is the owner of the disputed trademarks; (2) it
terminated its Distributorship Agreement with Superior; and (3) it
appointed Sports Concept as its exclusive distributor. This notice
prompted Superior to file its Complaint for Infringement of Trademark
and Unfair Competition against Kunnan. Prior to and during the
pendency of the infringement and unfair competition case before the
RTC, Kunnan filed with the Bureau of Patents, Trademarks and
Technology Transfer separate Petitions for the Cancellation of
Registration Trademarks involving the Kennex and Pro Kennex
trademarks. Kunna filed the petition on the ground that Superior
fraudulently registered and appropriated the disputed trademarks as
mere distributor and not as lawful owner. Both the trial court and
the Court of Appeals ruled in favor of Kunnan.
ISSUES: WON Superior, as a distributor, has true ownership over the
trademarks.

RULING: No. An exclusive distributor does not acquire any proprietary

interest in the principals trademark and cannot register it, unless the owner
has assigned the right.
1. To establish trademark infringement, the following elements must
be proven:
a. The validity of the plaintiffs mark;
b. The plaintiffs ownership of the mark; and
c. The use of the mark or its colorable imitation by the alleged
infringer results in likelihood confusion.
Based on these elements, the Court found it immediately obvious that
the second element was what the Registration Cancellation Case decided
with finality. On this element depended the validity of the registrations that,
on their own, only gave rise to the presumption of, but was not conclusive
on, the issue of ownership. In no certain terms, the appellate court in
the Registration Cancellation Case ruled that Superior was a mere distributor

and could not have been the owner, and was thus an invalid registrant of the
disputed trademarks. The right to register a trademark is based on
ownership, and therefore only the owner can register it.
2. Unfair competition has been defined as the passing off or attempting to
pass off upon the public of the goods and business of one person as the
goods or business of another with the end and probable effect of deceiving
the public. The essential elements of unfair competition are:
a. Confusing similarity in the general appearance of the goods; and
b. Intent to deceive the public and defraud the competitor.
The True Test of Unfair Competition
: Whether the acts of the defendant have the intent of deceiving or are
calculated to deceive the ordinary buyer making his purchases under the
ordinary conditions of the particular trade to which the controversy relates.
In the hereby case, no evidence exist showing that Kunnan ever
attempted to pass off goods it sold as those of Superior and that there is no
bad faith or fraudimputable to Kunnan in using the disputed trademarks.
Superior failed to adduce any evidence to show that Kunnan by the abovecited acts intended to deceive the public as to the identity of the goods sold
or of the manufacturer of the goods sold

BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly BIRKENSTOCK

ORTHOPAEDIE GMBH), v.PHILIPPINE SHOE EXPO MARKETING
CORPORATIONG.R. No. 194307 promulgated on November 20, 2013
Birkenstock Orthopaedie GMBH (Birkenstock Orthopaedie) applied for the
trademark registration of BIRKENSTOCK with the IPO. Philippine Shoe Expo
opposed the application on account of prior use for more than 16 years and
registration of the mark BIRKENSTOCK AND DEVICE. The Bureau of legal
Affairs (BLA) sustained the opposition because: (i) the competing marks are
confusingly similar and are used on the same and related goods; (ii)
Birkenstock Orthopaedie failed to prove actual use of the mark in trade and
business in the Philippines; (iii) prior right over the mark was not lost even
though the registration of BIRKENSTOCK AND DEVICE was cancelled, as
there was proof of the marks continuous and uninterrupted use in commerce
in the Philippines; and (iv) BIRKENSTOCK is not well -known in the
Philippines and internationally. The IPO Director General set aside the BLAs
ruling. The IPO Director General found Birkenstock Orthopaedie to be the
true and lawful owner and prior user of the BIRKENSTOCK marks. The IPO
Director General further held that BIRKENSTOCK AND DEVICE is no longer

an impediment to the registration of BIRKENSTOCK as the formers

registration had been cancelled on account of the registrants failure to file
the 10th year Declaration of Use. The Court of Appeals reinstated the
decision of the BLA.

The Supreme Court ruled in favor of Birkenstock Orthopaedie for the

following reasons: (i) under the former trademark law, Republic Act 166,
failure to file the Declaration of Use results in the automatic cancellation of
the trademark which in turn is tantamount to the abandonment or
withdrawal of the registrants right or interest over the trade mark. Applying
this rule, the registrant is deemed to have abandoned its right or interest
over the mark BIRKENSTOCK AND DEVICE on account of its failure to file
the 10th year Declaration of Use; and (ii) Birkenstock Orthopaedie proved its
true and lawful ownership of the mark Birkenstock. Evidence was
submitted on (i) the use of the mark in Europe since 1774, when its inventor,
Johann Birkenstock, used the mark on his line of quality footwear, which use
was continued by numerous generations of his kin; and (ii) the worldwide
registration of the mark BIRKENSTOCK. The Supreme Court did not find
credible the evidence of Philippine Shoe Expo as it was able to submit only
copies of sales invoices and advertisements, which showed merely its
transactions involving the same. The Supreme Court found the registration of
BIRKENSTOCK AND DEVICE to have been done in bad faith and found it
highly incredible that Philippine Shoe Expo came up on its own with the mark
BIRKENSTOCK, obviously of German origin and a highly distinct and
arbitrary mark. The Supreme Court pointed out that Philippine Shoe Expo
obviously knew of the existence of BIRKENSTOCK and its use by
Birkenstock Orthopaedie and that it clearly intended to take advantage of
the goodwill generated by the BIRKENSTOCK mark.

Finally, the Supreme Court reiterated the principle that registration of the
trademark merely creates a prima facie presumption of ownership which
yields to superior evidence of actual and real ownership of a trademark. In
the words of the Supreme Court:

Clearly, it is not the application or registration of a trademark that vests

ownership thereof, but it is the ownership of a trademark that confers the
right to register the same. A trademark is an industrial property over which
its owner is entitled to property rightswhich cannot be appropriated by
unscrupulous entities that, in one way or another, happen to register such

trademark ahead of its true and lawful owner. The presumption of ownership
accorded to a registrant must then necessarily yield to superior evidence of
actual and real ownership of a trademark.
BERRIS AGRICULTURAL CO., INC. vs. NORVY ABYADANG. G.R. No. 183404.
October 13, 2010
FACTS:

Abyadang filed a trademark application with the IPO for the mark "NS D-10
PLUS" for use in connection with Fungicide. Berris Agricultural Co., Inc. filed
an opposition against the trademark citing that it is confusingly similar with
their trademark, "D-10 80 WP" which is also used for Fungicide also with the
same active ingredient.

The IPO ruled in favor of Berries but on appeal with the CA, the CA ruled in
favor of Abyadang.

ISSUE: Whether there is confusing similarity between the trademarks.

RULING:

Yes. The SC found that both products have the component D-10 as their
ingredient and that it is the dominant feature in both their marks. Applying
the Dominancy Test, Abyadang's product is similar to Berris' and that
confusion may likely to occur especially that both in the same type of goods.
Also using the Holistic Test, it was more obvious that there is likelihood of
confusion in their packaging and color schemes of the marks. The SC states
that buyers would think that Abyadang's product is an upgrade of Berris'.

PROSOURCE INTERNATIONAL, INC. v. HORPHAG RESEARCH MANAGEMENT SA.

G.R. No. 180073. November 25, 2009
FACTS:

Respondent is a corporation and owner of trademark PYCNOGENOL, a food.

Respondent later discovered that petitioner 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.

Respondent filed a Complaint for Infringement of Trademark with Prayer for

Preliminary Injunction against petitioner, in using the name PCO-GENOLS for
being confusingly similar. Petitioner appealed otherwise.

The RTC decided in favor of respondent. It observed that PYCNOGENOL and

PCO-GENOLS have the same suffix "GENOL" which appears to be merely
descriptive and thus open for trademark registration by combining it with
other words and concluded that the marks, when read, sound similar, and
thus confusingly similar especially since they both refer to food supplements.

On appeal to the CA, petitioner failed to obtain a favorable decision. The

appellate court explained that under the Dominancy or the Holistic Test,
PCO-GENOLS is deceptively similar to PYCNOGENOL.

ISSUE: Whether the names are confusingly similar.

RULING:

Yes. There is confusing similarity and the petition is denied. Jurisprudence

developed two test to prove such.

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.

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. Not only on the predominant words should be the focus
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.

SC applied the Dominancy Test.Both the words 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 through combination with another word or
phrase. 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.

Dermaline, Inc. vs. Myra Pharmaceuticals, Inc., GR No. 190065, August 16,
2010
Post under case digests, Commercial Law at Friday, December 16,
2011 Posted by Schizophrenic Mind
HAD8J5EKCNKC
Facts: Dermaline filed with the IPO an application to register the trademark
Dermaline. Myra opposed this alleging that the trademark resembles its
trademark Dermalin and will cause confusion, mistake and deception to the
purchasing public. Dermalin was registered way back 1986 and was
commercially used since 1977. Myra claims that despite attempts of
Dermaline to differentiate its mark, the dominant feature is the term
Dermaline to which the first 8 letters were identical to that of Dermalin.

Thepronunciation for both is also identical. Further, both have 3 syllables

each with identical sound and appearance.
Issue: W/N the IPO should allow the registration of the trademark
Dermaline. NO
Held: As Myra correctly posits, it has the right under Section 147 of R.A. No.
8293 to prevent third parties from using a trademark, or similar signs or
containers for goods or services, without its consent, identical or similar to
its registered trademark, where such use would result in a likelihood of
confusion. In determining confusion, case law has developed two (2) 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 or deception. Duplication
or imitation is not even required; neither is it necessary that the label of the
applied mark for registration should suggest an effort to imitate. Relative to
the question on confusion of marks and trade names, jurisprudence noted
two (2) types of confusion, viz: (1) confusion of goods (product confusion),
where the ordinarily prudent purchaser would be induced to purchase one
product in the belief that he was purchasing the other; and (2) confusion of
business (source or origin confusion), where, although the goods of the
parties are different, the product, the mark of which registration is applied for
by one party, is such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be deceived either
into that belief or into the belief that there is some connection between the
two parties, though inexistent.
Using this test, the IPO declared that both confusion of goods and service
and confusion of business or of origin were apparent in both trademarks.
While it is true that the two marks are presented differently, they are almost
spelled in the same way, except for Dermalines mark which ends with the
letter "E," and they are pronounced practically in the same manner in three
(3) syllables, with the ending letter "E" in Dermalines mark pronounced
silently. Thus, when an ordinary purchaser, for example, hears an
advertisement of Dermalines applied trademark over the radio, chances are
he will associate it with Myras. When one applies for the registration of a
trademark or label which is almost the same or that very closely resembles
one already used and registered by another, the application should be
rejected and dismissed outright, even without any opposition on the part of
the owner and user of a previously registered label or trademark.

Further, Dermalines stance that its product belongs to a separate and

different classification from Myras products with the registeredtrademark
does not eradicate the possibility of mistake on the part of the purchasing
public to associate the former with the latter, especially considering that
both classifications pertain to treatments for the skin.

Soceite Des Produits Nestle, S.A. Vs. Martin T. Dy, Jr., GR No. 172276, August
8, 2010
Post under case digests, Commercial Law at Friday, December 16,
2011 Posted by Schizophrenic Mind
HAD8J5EKCNKC
FACTS: Petitioner is a foreign corporation organized under the laws of
Switzerland and manufactures food products and beverages. ACertificate of
Registration was issued on April 7, 1969 by the BPTTT which as a
result Nestle owns the NAN trademark for its line of infant powdered milk
(PRE-NAN, NAN-H.A., NAN-1, and NAN-2). It is classified under Class-6,
diactetic preparations for infant feeding.Nestle sells its NAN products
throughout the Philippines and invested substantial amount of resources for
its marketing.
Respondent owns 5M Enterprises which imports Sunny Boy powdered milk
from Australia, and repacks the milk into plastic bags bearing the name
NANNY, and is also classified as Class-6 full cream milk for adults.
Respondent sells the milk in parts of Mindanao.
In 1985, petitioner requested respondent to refrain from using NANNY and to
stop infringing the NAN trademark. Respondent did not act which
forced Nestle to file in March 1, 1990 in the RTC of Dumaguete, a complaint
against respondent. The case was transferred to the RTC of Cebu (special
court for intellectual property rights). The RTC held that respondent was
guilty of infringement. The trial court stated that if determination of
infringement shall only be limited on whether or not the mark used would
likely cause confusion, it would highly unlikely to happen in the instant case,
as a comparison of the plaintiffs NAN and defendants NANNY products are
different. Thus the dominancy test cannot be used because the deceptive
tendency of the mark NANNY is not apparent from the essential features of
the registered trademark NAN. The RTC invoked however the case of Esso
Standard Eastern vs. CA where the SC said that as to whether trademark
infringement exists depends upon for the most part upon whether or not the
goods are so related that the public may be, or is actually, deceived and

misled that they came from the same maker or manufacturer. For noncompeting goods may be those which, though they are not in actual
competition, are so related to each other that it might reasonably be
assumed that they originate from one manufacturer, or from a common
source. The trial court justified that goods may become related for purposes
of infringement when they belong to the same class, or have same
descriptive properties; when they possess the same physical attributes or
essential characteristics with referenceto their form, composition, texture or
quality. They also be related because they serve the same purpose or are
sold in grocery stores.
The RTC stated that considering that NANNY belongs to the same class as
that of NAN because both are food products, the defendants unregistered
trade mark NANNY should be held an infringement to
plaintiffs registered trademark NAN because defendants use of NANNY
would imply that it came from the manufacturer of NAN.
The Court of Appeals reversed the TCs decision and found respondent not
liable for infringement, stating that the TCs application of the doctrine laid
down by the SC in the Esso Standard case is misplaced as the goods of the
two contending parties bear similar marks or labels. In the instant case, two
dissimilar marks are involved. The CA stated that while it is true that both
NAN and NANNY are milk products and that the word NAN is contained in the
word NANNY, there are more glaring dissimilarities in the entirety of their
trademarks as they appear in their respective labels and also in relation to
the goods to which they are attached. The discerning eye of the observer
must focus not only on the predominant words but also on the other features
appearing in both labels. NAN products, which consist of Pre-NAN, NAN-H-A,
NAN-1 and NAN-2, are all infant preparations, while NANNY is a full cream
milk for adults in [sic] all ages. NAN milk products are sold in tin cans and
hence, far expensive than the full cream milk NANNY sold in three (3) plastic
packs containing 80, 180 and 450 grams and worth P8.90, P17.50 and
P39.90 per milk pack. The labels of NAN products are of the colours blue and
white and have at the bottom portion an elliptical shaped figure containing
inside it a drawing of nestling birds, which is overlapped by the trade-name
"Nestle." On the other hand, the plastic packs NANNY have a drawing of
milking cows lazing on a vast green field, back-dropped with snow-capped
mountains and using the predominant colours of blue and green. The word
NAN are all in large, formal and conservative-like block letters, while the
word NANNY are all in small and irregular style of letters with curved ends.
With these material differences apparent in the packaging of both milk
products, NANNY full cream milk cannot possibly be an infringement of NAN

infant milk.
ISSUE: Whether or not respondent is liable for infringement
HELD Yes. In Prosource International, Inc. vs. Horphag Research Management
SA, the SC laid down the elements of infringement under R.A. No. 166, and
8293:
For Section 22 of R.A. No. 166, the following constitute the elements of TM
infringement:
A TM actually used in commerce and registered in the principal register of
the PPO
Used by another person in connection with the sale of goods or services or in
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business
TM is used for identical or similar goods
Such act is done without the consent of the TM registrant.
The elements of infringement under R.A. No. 8293 are:
The TM infringed is registered in the IPO, in trade name, the same need not
be registered
The TM or Trade name is not reproduced, counterfeited, copied, or colorably
imitated by the infringer
The infringing mark or trade name is used in connection with the sale,
offering for sale, or advertising of any goods; or the infringing mark or trade
name is applied to labels, signs, prints, intended to be used upon or in
connection with such goods, business, or services;
The use or application of the infringing mark or trade name is likely to cause
confusion or mistake or to deceive purchasers or others as to the goods or
services themselves or as to the source or origin of such goods or services or
the identity of such business
Without the consent of the trademark or trade name owner or assignee

Among the elements, the element of likelihood of confusion is the gravamen

of trademark infringement, and there are to types, confusion of goods which
in the event the ordinarily prudent purchaser would be induced to purchase
one product in the belief that he was purchasing the other. And the other is
confusion of business which though the goods of the parties are different, the
defendants product is such as might reasonably be assumed to originate
with the plaintiff, and the public would then be deceived either into that
belief or into the belief that there is some connection between the plaintiff
and defendant which, in fact does not exist.
There are two tests to determine the likelihood of confusion: the dominancy
test and holistic test. In light of the facts of the present case, the Court holds
that the dominancy test is applicable.
The test of dominancy is in fact explicitly incorporated into law in Section
155.1 of the IPC which defines infringement as the colourable imitation of
a registered mark...or a dominant feature thereof. While the SC agrees with
the CAs enumeration of differences between the respective trademarks, the
SC does not agree that the holistic test is not the one applicable in the case
as it is contrary to the elementary postulate of the law on trademarks and
unfair competition that that confusing similarity is to be determined on the
basis of visual, aural, connotative comparisons and overall impressions
engendered by the marks in controversy as they are encountered in the
realities of the marketplace. The totality or holistic test only relies on visual
comparison whereas the dominancy test relies also on the aural and
connotative comparisons and overall impressions between the two
trademarks.
Applying such test in the present case the SC finds that NANNY is confusingly
similar to NAN as it is the prevalent feature of petitioners infant powdered
milk (PRE-NAN, NAN-H.A.., NAN-1 and NAN-2). NANNY contains the prevalent
feature NAN, and the first three letters of NANNY are exactly the same as the
letters of NAN. The aural effect is confusingly similar.
The decision of the RTC is reinstated.

Skechers, USA, Inc. v. Inter Pacific Industrial Trading Corp.

G.R. No. 164321 (2011)

Skechers, USA Inc. is the owner of the registered trademarks Skechers and
S within an oval logo.

Skechers filed a criminal case for trademark infringement against several

store-owners that were selling shoes branded as Strong and bearing a
similar S logo. The Regional Trial Court (RTC) issued search warrants,
allowing the National Bureau of Investigation (NBI) to raid the stores and
confiscate 6,000 pairs of shoes.
The accused moved to quash the warrants, saying that there was no
confusing similarity between the Skechers and the Strong brands.
The RTC granted the motion to quash and ordered the NBI to return the
seized goods. The court said that the two brands had glaring differences and
that an ordinary prudent consumer would not mistake one for the other.
On certiorari, the Court of Appeals (CA) affirmed the RTC ruling.
The matter was elevated to the Supreme Court (SC).

Issue: Did the accused commit trademark infringement?

Yes, the accused is guilty of trademark infringement.

Under the IP Code (RA No. 8293), trademark infringement is committed
when:

Remedies; Infringement. Any person who shall, without the consent of the
owner of the registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark or the same container or a dominant feature
thereof in connection with the sale, offering for sale, distribution, advertising
of any goods or services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with which such use
is likely to cause confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or
a dominant feature thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used in commerce upon or in connection
with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with whichsuch use is likely to cause confusion,
or to cause mistake, or to deceive, shall be liable in a civil action for
infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts
stated in Subsection 155.1 or this subsection are committed regardless of
whether there is actual sale of goods or services using the infringing
material. (emphasis supplied)

There is trademark infringement when the second mark used is likely to

cause confusion. There are two tests to determine this:
1. Dominancy Test the court focuses on the similarity of the dominant
features of the marks that might cause confusion in the mind of the
consumer. Duplication or imitation is not necessary. Even accidental
confusion may be cause for trademark infringement. More consideration is
given to the aural and visual impressions created by the marks on the buyers
and less weight is given to factors like price, quality, sales outlets and
market segments.
Applied to this case: The SC found that the use of the S symbol
by Strong rubber shoes infringes on the registered Skechers trademark. It is
the most dominant feature of the mark -- one that catches the buyers eye
first. Even if the accused claims that there was a difference because the S
used by Skechers is found inside an oval, the fact that the accused used the
dominant S symbol already constitutes trademark infringement.
The SC disagreed with the CA reasoning that the S symbol is already used
for many things, including the Superman symbol. Even if this is true, the fact
that Strong used same stylized S symbol as that of theSkechers brand

makes this a case of trademark infringement. The same font and style was
used in this case. The Superman S symbol is clearly different from the S
in this case.
2. Holistic or Totality Test the court looks at the entirety of the marks as
applied to the products, including the labels and packaging. You must not
only look at the dominant features but all other features appearing on both
marks.
Applied to this case: Both RTC and CA used the Holistic Test to rule that there
was no infringement. Both courts argued the following differences:
The mark S found in Strong Shoes is not enclosed in an oval design.
The word Strong is conspicuously placed at the backside and insoles.
The hang tags and labels attached to the shoes bears the word Strong for
respondent and Skechers U.S.A. for private complainant;
Strong shoes are modestly priced compared to the costs of Skechers Shoes.

Also using the Holistic Test, the SC corrected the lower courts and ruled that
the striking similarities between the products outweigh the differences
argued by the respondents:
Same color scheme of blue, white and gray;
Same wave-like pattern on the midsole and the outer sole;
Same elongated designs at the side of the midsole near the heel;
Same number of ridges on the outer soles (five at the back and six in front);
Same location of the stylized S symbol;
The words "Skechers Sport Trail" at the back of the Skechers shoes and
"Strong Sport Trail" at the back of the Strong shoes, using the same font,
color, size, direction and orientation;
Same two grayish-white semi-transparent circles on top of the heel collars.
The features and overall design of the two products are so similar that there
is a high likelihood of confusion.
Two products do not need to be identical, they just need to be similar enough
to confuse the ordinary buyer in order to constitute trademark infringement
(Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., 186 Phil. 85
[1980]). Also, the difference in price cannot be a defense in a case for

trademark infringement (McDonalds Corporation v. L.C. Big Mak Burger, Inc.,

480 Phil. 402, 434 [2004]).

There are two types of confusion:

Product Confusion where the ordinary prudent purchaser would be induced
to purchase on product in the belief that he was buying another.
Source or Origin Confusion although the goods are different, the use of the
mark causes the consumer to assume that both products originate from the
same source.
Trademark law protects the owner not only from product confusion but also
from source confusion. Protection is not limited to the same or similar
products but extends to all cases where:
The consumer is misled into thinking that the trademark owner extended his
business into a new field;
The consumer is misled into thinking that the trademark owner is in any way
connected to the infringers activities; or
The infringement forestalls the normal potential expansion of the trademark
owners business.

Trademark law does not only protect the owners reputation and goodwill, it
also protects the consumers from fraud and confusion.
In this case, it is clear that there was an attempt to copy the trademark
owners mark and product design. In trademark infringement cases, you do
not need to copy another's mark or product exactly. Colorable imitation is
enough.

Victorio P. Diaz vs People of the Philippines and Levi Strauss [Phils.], Inc.G.R.
No. 180677 February 18, 2003Facts:
Levi Strauss Philippines, Inc. (Levis Philippines) is a licensee of Levis. After
receivinginformation that Diaz was selling counterfeit LEVIS 501 jeans in his
tailoring shops inAlmanza and Talon, Las Pias City, Levis Philippines hired a
private inve

stigation group toverify the information. Surveillance and the purchase of

jeans from the tailoring shops ofDiaz established that the jeans bought from
the tailoring shops of Diaz were counterfeit or
imitations of LEVIS 501. Armed with search warrants,
NBI agents searched the tailoring
shops of Diaz and seized several fake LEVIS 501 jeans from them. Levis
Philippines
claimed that it did not authorize the making and selling of the seized jeans;
that each of thejeans were mere imitations of genuine LEVI
S 501 jeans by each of them bearing the
registered trademarks, like the arcuate design, the tab, and the leather
patch; and that the
seized jeans could be mistaken for original LEVIS 501 jeans due to the
placement of the
arcuate, tab, and two-horse leather patch.On his part, Diaz admitted being
the owner of the shops searched, but he denied any
criminal liability. Diaz stated that he did not manufacture Levis jeans, and
that he used thelabel LS Jeans Tailoring in the jeans that he made and sold;
that the label LS JeansTailoring was registered with the Intellectual Property
Office; that his shops received
clothes for sewing or repair; that his shops offered made-to-order jeans,
whose styles ordesigns were done in accordance with instructions of the
customers; that since the time hisshops began operating in 1992, he had
received no notice or warning regarding his
operations; that the jeans he produced were easily recognizable because the
label LS JeansTailoring, and the names of the customers we
re placed inside the pockets, and each of the
jeans had an LSJT red tab; that LS stood for Latest Style; and that the
leather patch on
his jeans had two buffaloes, not two horses.
Issue:
Whether there exists a likelihood of confusion between the tr
ademarks of Levis and Diaz.

Held:
The Court held, through the application of the holistic test, that there was no
likelihood ofconfusion between the trademarks involved.
Accordingly, the jeans trademarks of Levis
Philippines and Diaz must be considered as a whole in determining the
likelihood of
confusion between them. The maongpants or jeans made and sold by Levis
Philippines,which included LEVIS 501, were very popular in the Philippines.
The consuming publicknew that the original LEVIS 501 jeans
were under a foreign brand and quite expensive.Such jeans could be
purchased only in malls or boutiques as ready-to-wear items, and were
not available in tailoring shops like those of Diazs as well as not acquired on
a made
-toorder basis. Under the c
ircumstances, the consuming public could easily discern if the
jeans were original or fake LEVIS 501, or were manufactured by other brands
of jeans.

Diaz used the trademark LS JEANS TAILORING for the jeans he produced
and sold in histailoring shops. His trademark was visually and aurally
different from the trademark LEVISTRAUSS & CO appearing on the patch of
original jeans under the trademark LEVIS 501.The word LS could not be
confused as a derivative from LEVI STRAUSS by virtue of theLS being
connected to the word TAILORING, thereby openly suggesting that the
jeansbearing the trademark LS JEANS TAILORINGcame or were bought from
the
tailoring
shops of Diaz, not from the malls or boutiques selling original LEVIS 501
jeans to the

consuming public.
The prosecution also alleged that the accused copied the two horse design
of the
petitioner-private complainant but the evidence will show that there was no
such design in
the seized jeans. Instead, what is shown is buffalo design. Again, a horse
and a buffalo are
two different animals which an ordinary customer can easily distinguish.The
prosecution further alleged that the red tab was copied by the accused.
However,evidence will show that the red tab used by the private complainant
indicates the word
LEVIS while that of the accused indicates the letters LSJT which means
LS JEANS
TAILORING. Again, even an ordinary customer can di
stinguish the word LEVIS from the
letters LSJT.In terms of classes of customers and channels of trade, the jeans
products of the privatecomplainant and the accused cater to different classes
of customers and flow through thedifferent channels of trade. The customers
of the private complainant are mall goersbelonging to class A and B market
group

while that of the accused are those who belongto class D and E market who
can only afford Php 300 for a pair of made-to-order pants.

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 respondents 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 petitioners complaint
CA- ruled that petitioner has legal standing to sue but found that there was
no infringement
Hence 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--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 prerequisite 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.
THIRD DIVISION
WILLIAM C. YAO, SR vs People
G.R. No. 168306
MARTINEZ, NazaRIO, nACHURA

DOCTRINE: corporation is an entity separate and distinct from its

stockholders, directors or officers. However, when the notion of legal entity is
used to defeat public convenience, justify wrong, protect fraud, or defend
crime, the law will regard the corporation as an association of persons, or in
the case of two corporations merge them into one. Where the separate
corporate entity is disregarded, the corporation will be treated merely as an
association of persons and the stockholders or members will be considered
as the corporation, that is, liability will attach personally or directly to the
officers and stockholders.
FACTS:
Petitioners are incorporators and officers of MASAGANA GAS CORPORATION
(MASAGANA), an entity engaged in the refilling, sale and distribution of LPG
products. Private respondents Petron Corporation (Petron) and Pilipinas Shell
Petroleum Corporation (Pilipinas Shell) are two of the largest bulk suppliers
and producers of LPG in the Philippines. Petron is the registered owner in
the Philippines of the trademarks GASUL and GASUL cylinders used for its
LPG products. It is the sole entity in the Philippines authorized to
allow refillers and distributors to refill, use, sell, and distribute GASUL LPG
containers, products and its trademarks. Pilipinas Shell, on the other hand, is
the authorized user in the Philippines of the tradename, trademarks,
symbols, or designs of its principal, Shell International Petroleum Company
Limited (Shell International), including the marks SHELLANE and SHELL
device in connection with the production, sale and distribution of
SHELLANE LPGs. It is the only corporation in the Philippinesauthorized to
allow refillers and distributors to refill, use, sell and distribute SHELLANE LPG
containers
and
products.
On
3
April
2003,
(NBI)
agent Ritche N. Oblanca (Oblanca) filed two applications for search warrant
with the RTC, Cavite City, against petitioners and other occupants of the
MASAGANA compound for alleged violation of Section 155, in relation to
Section 170 of The Intellectual Property Code of the Philippines. The two
applications for search warrant uniformly alleged that per information, belief,
and personal verification of Oblanca, the petitioners are actually producing,
selling, offering for sale and/or distributing LPG products using steel cylinders
owned by, and bearing the tradenames, trademarks, and devices
of Petron and Pilipinas Shell, without authority and in violation of the rights of
the said entities. MASAGANA, as third party claimant, filed with the RTC a
Motion for the Return of Motor Compressor and LPG Refilling Machine. [15] It
claimed that it is the owner of the said motor compressor and LPG refilling
machine; that these items were used in the operation of its legitimate
business; and that their seizure will jeopardize its business interests. RTC
resolved that MASAGANA cannot be considered a third party claimant whose

rights were violated as a result of the seizure since the evidence disclosed
that petitioners are stockholders of MASAGANA and that they conduct their
business through the same juridical entity. CA affirmed RTCs decision
Issue:
Whether or not CA ERRED IN RULING THAT THE COMPLAINT IS DIRECTED
AGAINST MASAGANA GAS CORPORATION, ACTING THROUGH ITS OFFICERS
AND DIRECTORS, HENCE MASAGANA GAS CORPORATION MAY NOT BE
CONSIDERED AS THIRD PARTY CLAIMANT WHOSE RIGHTS WERE VIOLATED AS
A RESULT OF THE SEIZURE
Held:
No. It is an elementary and fundamental principle of corporation law that a
corporation is an entity separate and distinct from its stockholders, directors
or officers. However, when the notion of legal entity is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, the law will
regard the corporation as an association of persons, or in the case of two
corporations merge them into one. [46] In other words, the law will not
recognize the separate corporate existence if the corporation is being used
pursuant to the foregoing unlawful objectives. This non-recognition is
sometimes referred to as the doctrine of piercing the veil of corporate entity
or disregarding the fiction of corporate entity. Where the separate corporate
entity is disregarded, the corporation will be treated merely as an association
of persons and the stockholders or members will be considered as the
corporation, that is, liability will attach personally or directly to the officers
and stockholders. As we now find, the petitioners, as directors/officers of
MASAGANA, are utilizing the latter in violating the intellectual property rights
ofPetron and Pilipinas Shell. Thus, petitioners collectively and MASAGANA
should be considered as one and the same person for liability purposes.
Consequently, MASAGANAs third party claim serves no refuge for
petitioners. The law does not require that the property to be seized should be
owned by the person against whom the search warrants is directed.
Ownership, therefore, is of no consequence, and it is sufficient that the
person against whom the warrant is directed has control or possession of the
property sought to be seized. Hence, even if, as petitioners claimed, the
properties seized belong to MASAGANA as a separate entity, their seizure
pursuant to the search warrants is still valid.
Further, it is apparent that the motor compressor, LPG refilling machine and
the GASUL and SHELL LPG cylinders seized were the corpusdelicti, the body
or substance of the crime, or the evidence of the commission of trademark
infringement. These were the very instruments used or intended to be used
by the petitioners in trademark infringement. It is possible that, if returned to

MASAGANA, these items will be used again in violating the intellectual

property rights of Petron and Pilipinas Shell