Professional Documents
Culture Documents
4. MATAL, INTERIM DIRECTOR, UNITED STATES PATENT AND TRADEMARK OFFICE v. TAM
certiorari to the united states court of appeals for the federal circuit
No. 15–1293. Argued January 18, 2017—Decided June 19, 2017
Simon Tam, lead singer of the rock group “The Slants,” chose this moniker in order to “reclaim” the term and drain its denigrating force as a derogatory term for Asian persons. Tam sought federal
registration of the mark “THE SLANTS.” The Patent and Trademark Office (PTO) denied the application under a Lanham Act provision prohibiting the registration of trademarks that may “disparage
. . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” 15 U. S. C. §1052(a). Tam contested the denial of registration through the administrative appeals process, to no avail. He
then took the case to federal court, where the en banc Federal Circuit ultimately found the disparagement clause facially unconstitutional under the First Amendment’s Free Speech Clause.
Held: The judgment is affirmed.
808 F. 3d 1321, affirmed.
Justice Alito delivered the opinion of the Court with respect to Parts I, II, and III–A, concluding:
1. The disparagement clause applies to marks that disparage the members of a racial or ethnic group. Tam’s view, that the clause applies only to natural or juristic persons, is refuted by the plain terms
of the clause, which uses the word “persons.” A mark that disparages a “substantial” percentage of the members of a racial or ethnic group necessarily disparages many “persons,” namely, members of
that group. Tam’s narrow reading also clashes with the breadth of the disparagement clause, which by its terms applies not just to “persons,” but also to “institutions” and “beliefs.” §1052(a). Had
Congress wanted to confine the reach of the clause, it could have used the phrase “particular living individual,” which it used in neighboring §1052(c). Tam contends that his interpretation is
supported by legislative history and by the PTO’s practice for many years of registering marks that plainly denigrated certain groups. But an inquiry into the meaning of the statute’s text ceases when,
as here, “the statutory language is unambiguous and the statutory scheme is coherent and consistent.” Barnhart v. Sigmon Coal Co., 534 U. S. 438 (internal quotation marks omitted). Even if resort to
legislative history and early enforcement practice were appropriate, Tam has presented nothing showing a congressional intent to adopt his interpretation, and the PTO’s practice in the years following
the disparagement clause’s enactment is unenlightening. Pp. 8–12.
2. The disparagement clause violates the First Amendment’s Free Speech Clause. Contrary to the Government’s contention, trademarks are private, not government speech. Because the “Free Speech
Clause . . . does not regulate government speech,” Pleasant Grove City v. Summum, 555 U. S. 460 , the government is not required to maintain viewpoint neutrality on its own speech. This Court
exercises great caution in extending its government-speech precedents, for if private speech could be passed off as government speech by simply affixing a government seal of approval, government
could silence or muffle the expression of disfavored viewpoints.
The Federal Government does not dream up the trademarks registered by the PTO. Except as required by §1052(a), an examiner may not reject a mark based on the viewpoint that it appears to
express. If the mark meets the Lanham Act’s viewpoint-neutral requirements, registration is mandatory. And once a mark is registered, the PTO is not authorized to remove it from the register unless a
party moves for cancellation, the registration expires, or the Federal Trade Commission initiates proceedings based on certain grounds. It is thus far-fetched to suggest that the content of a registered
mark is government speech, especially given the fact that if trademarks become government speech when they are registered, the Federal Government is babbling prodigiously and incoherently. And
none of this Court’s government-speech cases supports the idea that registered trademarks are government speech. Johanns v. Livestock Marketing Assn., 544 U. S. 550 ; Pleasant Grove
City v. Summum, 555 U. S. 460 ; and Walker v. Texas Div., Sons of Confederate Veterans, Inc., 576 U. S. ___, distinguished. Holding that the registration of a trademark converts the mark into
government speech would constitute a huge and dangerous extension of the government-speech doctrine, for other systems of government registration (such as copyright) could easily be characterized
in the same way. Pp. 12–18.
Justice Alito, joined by The Chief Justice, Justice Thomas, and Justice Breyer, concluded in Parts III–B, III–C, and IV:
(a) The Government’s argument that this case is governed by the Court’s subsidized-speech cases is unpersuasive. Those cases all involved cash subsidies or their equivalent, e.g., funds to private
parties for family planning services in Rust v. Sullivan, 500 U. S. 173 , and cash grants to artists in National Endowment for Arts v. Finley, 524 U. S. 569 . The federal registration of a trademark is
nothing like these programs. The PTO does not pay money to parties seeking registration of a mark; it requires the payment of fees to file an application and to maintain the registration once it is
granted. The Government responds that registration provides valuable non-monetary benefits traceable to the Government’s resources devoted to registering the marks, but nearly every government
service requires the expenditure of government funds. This is true of services that benefit everyone, like police and fire protection, as well as services that are utilized by only some, e.g., the
adjudication of private lawsuits and the use of public parks and highways. Pp. 18–20.
(b) Also unpersuasive is the Government’s claim that the disparagement clause is constitutional under a “government-program” doctrine, an argument which is based on a merger of this Court’s
government-speech cases and subsidy cases. It points to two cases involving a public employer’s collection of union dues from its employees, Davenport v. Washington Ed. Assn., 551 U. S. 177 ,
and Ysursa v. Pocatello Ed. Assn., 555 U. S. 353 , but these cases occupy a special area of First Amendment case law that is far removed from the registration of trademarks. Cases in which
government creates a limited public forum for private speech, thus allowing for some content- and speaker-based restrictions, see, e.g., Good News Club v. Milford Central School, 533 U. S. 98 –
107; Rosenberger v. Rector and Visitors of Univ. of Va., 515 U. S. 819 , are potentially more analogous. But even in those cases, viewpoint discrimination is forbidden. The disparagement clause
denies registration to any mark that is offensive to a substantial percentage of the members of any group. That is viewpoint discrimination in the sense relevant here: Giving offense is a viewpoint. The
“public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.”Street v. New York, 394 U. S. 576 . Pp. 20–23.
(c) The dispute between the parties over whether trademarks are commercial speech subject to the relaxed scrutiny outlined in Central Hudson Gas & Elect. v. Public Serv. Comm’n of N. Y., 447 U. S.
557 , need not be resolved here because the disparagement clause cannot withstand even Central Hudson review. Under Central Hudson, a restriction of speech must serve “a substantial interest” and
be “narrowly drawn.” Id., at 564–565 (internal quotation marks omitted). One purported interest is in preventing speech expressing ideas that offend, but that idea strikes at the heart of the First
Amendment. The second interest asserted is protecting the orderly flow of commerce from disruption caused by trademarks that support invidious discrimination; but the clause, which reaches any
trademark that disparages any person, group, or institution, is not narrowly drawn. Pp. 23–26.
Justice Kennedy, joined by Justice Ginsburg, Justice Sotomayor, and Justice Kagan, agreed that 15 U. S. C. §1052(a) constitutes viewpoint discrimination, concluding:
(a) With few narrow exceptions, a fundamental principle of the First Amendment is that the government may not punish or suppress speech based on disapproval of the ideas or perspectives the
speech conveys. See Rosenberger v. Rector and Visitors of Univ. of Va., 515 U. S. 819 –829. The test for viewpoint discrimination is whether—within the relevant subject category—the government
has singled out a subset of messages for disfavor based on the views expressed. Here, the disparagement clause identifies the relevant subject as “persons, living or dead, institutions, beliefs, or
national symbols,” §1052(a); and within that category, an applicant may register a positive or benign mark but not a derogatory one. The law thus reflects the Government’s disapproval of a subset of
messages it finds offensive, the essence of viewpoint discrimination. The Government’s arguments in defense of the statute are unpersuasive. Pp. 2–5.
(b) Regardless of whether trademarks are commercial speech, the viewpoint based discrimination here necessarily invokes heightened scrutiny. See Sorrell v. IMS Health Inc., 564 U. S. 552 . To the
extent trademarks qualify as commercial speech, they are an example of why that category does not serve as a blanket exemption from the First Amendment’s requirement of viewpoint neutrality. In
the realm of trademarks, the metaphorical marketplace of ideas becomes a tangible, powerful reality. To permit viewpoint discrimination in this context is to permit Government censorship. Pp. 5–7.
Alito, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III–A, in which Roberts, C. J., and Kennedy, Ginsburg, Breyer, Sotomayor, and
Kagan, JJ., joined, and in which Thomas, J., joined except for Part II, and an opinion with respect to Parts III–B, III–C, and IV, in which Roberts, C. J., and Thomas and Breyer, JJ., joined. Kennedy,
J., filed an opinion concurring in part and concurring in the judgment, in which Ginsburg, Sotomayor, and Kagan, JJ., joined. Thomas, J., filed an opinion concurring in part and concurring in the
judgment. Gorsuch, J., took no part in the consideration or decision of the case.
Facts of the case
Simon Tam and his band, The Slants, sought to register the band’s name with the U.S. Trademark Office. The Office denied the application because it found that the name would likely be disparaging
towards “persons of Asian descent.” The office cited the Disparagement Clause of the Lanham Act of 1946, which prohibits trademarks that “[consist] of or [comprise] immoral, deceptive, or
scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”
Tam appealed the trademark officer’s decision, and the name was refused a second time by a board comprised of members of the office. Tam appealed to a panel of judges on the U.S. Court of
Appeals for the Federal Circuit, which found that the trademark officials were within their rights to refuse the trademark application under the Disparagement Clause. The appellate court then
reviewed the case en banc and found that the trademark office was incorrect in refusing the trademark application and that the Disparagement Clause violated the First Amendment.
Question
Is the Disparagement Clause invalid under the First Amendment?
Conclusion
The Disparagement Clause prohibits trademarks that disparage the members of a racial or ethnic group and violates the Free Speech Clause of the First Amendment. Justice Samuel A. Alito, Jr.
delivered the opinion for the 8-0 majority. The Court held that, the plain meaning of the text clearly indicated that the Disparagement Clause applied to racial and ethnic groups, and therefore the
Clause applied to the mark at issue in this case. The Clause also facially discriminated based on viewpoint, as giving offense constitutes a viewpoint. Because the PTO simply approved trademarks,
they were not government speech--to which the First Amendment prohibitions on viewpoint regulation did not apply--and holding otherwise would constitute a massive and unwise expansion of the
government speech doctrine. Similarly, PTO approval of a trademark did not constitute government-provided subsidy, an area of cases in which viewpoint discrimination was sometimes determined to
be constitutional. The Disparagement Clause was also not a permissible regulation of commercial speech because it was not narrowly drawn to serve a substantial interest. Any asserted interest of
avoiding offense clearly contravened the purpose of the First Amendment’s protection of free speech, and the Clause was too broad to serve the government’s other stated interest of protecting the
orderly flow of commerce.
Justice Anthony M. Kennedy wrote an opinion concurring in part and concurring in the judgment in which he argued that the First Amendment’s protections against viewpoint discrimination clearly
applied in this case. There are very narrow and specific categories in which the government may regulate speech--such as fraud, defamation, and incitement--and the trademark at issue here did not
fall within these categories. Instead, the Disparagement Clause specifically singled out a subset of messages that the government determined to be offensive and prohibits them, which was plainly
unconstitutional viewpoint discrimination. Justice Kennedy also wrote that the majority opinion does not govern how any other provisions of the Lanham Act should be interpreted under the First
Amendment, nor was the government speech doctrine at issue in this case. Justice Ruth Bader Ginsburg, Justice Sonia Sotomayor, and Justice Elena Kagan joined in the opinion concurring in part and
concurring in the judgment. In his separate opinion concurring in part and concurring in the judgment, Justice Clarence Thomas wrote that all government regulation of commercial speech should be
analyzed under the strict scrutiny standard.
Justice Neil Gorsuch did not participate in the discussion or decision of this case.
ISSUE:
Did the District Court err in dismissing plaintiff’s trademark infringement complaint against defendant?
ANSWER:
No.
CONCLUSION:
The Court ruled that although plaintiff for many years had used the mark "Safari" on articles of clothing sold, defendant established its rights to use similar derivations of the term in selling its own
line of sporting apparel. Specifically, the Court held that: (1) "Safari" had become a generic term and "Minisafari" could be used for a smaller brim hat; (2) "Safari" had not, however, become a
generic term for boots or shoes; it was either suggestive or merely descriptive and was a valid trademark even if merely descriptive because it had become incontestable under the Lanham Act; but (3)
in light of the justified finding that "Camel Safari," "Hippo Safari" and "Safari Chukka" were devoted by defendant to a purely descriptive use on its boots, defendant had a defense against a charge of
infringement on the basis of fair use.
Facts:
Plaintiff used the "Safari" registered trademark for almost 60 years quite successfully and formerly prosecuted cases successfully on it. Defendant also used the term for its clothing, so plaintiff sued.
Defendant counterclaimed.
Procedural History:
District court dismissed plaintiff's complaint and cancelled all of plaintiff's "Safari" trademarks.
Issue:
What class of terms do plaintiff's "Safari" trademarks fall under and can it enforce them against defendant?
Defendant's Argument:
The word "safari" is a generic, descriptive word understood by the public and is therefore not subject to the exclusivity of a trademark.
Rules:
• There are four classes of terms in regards to trademark protection. In order of ascending protection, they are:
1. Generic
▪ This means that it is the "common descriptive name" and affords no exclusive right to the mark.
2. Descriptive
▪ This means that it is "merely descriptive" and allows registration if there is "proof of substantially exclusive and continuous use of the mark applied to the applicant’s goods
for five years preceding the application". (If it acquires a secondary meaning.)
3. Suggestive
▪ This means that it "requires imagination, thought, and perception to reach a conclusion as to the nature of goods" and is entitled to registration without proof of secondary
meaning.
4. Arbitrary/Fanciful
• Generic terms referring to the type of product rather than the product cannot be trademarked, even if they acquire secondary meanings.
• Marks can shift between classes as language changes. If they become the common descriptive name of an article or substance, the trademark can be cancelled.
Reasoning:
"Safari" has become a generic term for certain clothing items. "Safariland" is permissible because of its focus on selling these genericized goods. This is not the case for footwear, where it is either
"suggestive" or "merely descriptive" and therefore incontestable. However, defendant had longer names for its footwear, like "Camel Safari" or "Hippo Safari." As defendant's parent company
embarks on African safaris, this could be justified fair use by being named such to associate it with the trips.
Holding:
Some of plaintiff's trademarks were generic and some were suggestive. Regardless, it cannot enforce them against defendant. Affirmed and modified.
6. Zatarains vs oakgrove
Brief Fact Summary. Zatarain’s (Plaintiff) claimed that its trademark was a “suggestive†term and that Oak Grove Smokehouse, Inc. (Defendant) should be liable for infringing it, but Oak Grove
(Defendant) claimed it was a “descriptive†term subject to a fair use exception.
Synopsis of Rule of Law. Descriptive terms are not protected by trademark without a showing of secondary meaning in the minds of the public.
Facts. Zatarain’s (Plaintiff) manufactured and distributed food products. It registered the terms “Fish-Fri†and “Chick-Fri†as trademarks for its batter mixes used to fry foods. Oak Grove
Smokehouse, Inc. (Defendant) began marketing a “fish fry†and a “chicken fry†in packages similar to those used by Plaintiff. Plaintiff brought suit for trademark infringement and unfair
competition under the Lanham Act. The district court held that Zatarain’s (Plaintiff) trademark “Fish-Fri†was a descriptive term with an established secondary meaning, but held that the alleged
infringers had a fair use defense to any asserted infringement of the term and that the registration of the term “Chick-Fri†should be canceled because it was a descriptive term that lacked any
secondary meaning. Plaintiff appealed, claiming that its trademark “Fish-Fri†was a suggestive term that was automatically protected upon registration and therefore not subject to the “fair
use†defense.
Issue. Are descriptive terms protected by trademark without a showing of secondary meaning in the minds of the public?
Held. (Goldberg, J.) No. Descriptive terms are not protected by trademark without a showing of secondary meaning in the minds of the public. The district court was correct in applying the four
prevailing tests of descriptiveness: 1) the dictionary definition, 2) the imagination test; usefulness of the term to competitors, and 4) actual use of the term by other merchants, in finding that “Fish-
Fri†was a descriptive term identifying a function of the product being sold. Proof of secondary meaning is an issue only with respect to descriptive marks, and the burden of proof rests at all times
with the plaintiff to establish such a meaning. The district court found that Plaintiff’s evidence established a secondary meaning for the term in the New Orleans area. However, Plaintiff has no legal
claim to an exclusive right in the original, descriptive sense of the term. Therefore, Defendant is still free to use the words “fish fry†in the ordinary, descriptive sense, so long as such use will not
tend to confuse customers as to the source of the goods. The record contains plenty of evidence to support the district court’s determination that Oak grove’s (Defendant) use of the term was fair and
in good faith. Affirmed.
Discussion. The trademark “fair use†defense is different from the copyright law fair use doctrine. In the trademark law, a junior user is not liable of infringement of a senior user’s established
trademark meaning if the mark is being used in its descriptive sense. This defense is only available to infringers of “descriptive†marks.
RULE:
A descriptive term identifies a characteristic or quality of an article or service, such as its color, odor, function, dimensions, or ingredients. Descriptive terms ordinarily are not protectable as
trademarks, § 2(e)(1) of the Lanham Act, 15 U.S.C.S. § 1052(e)(1); they may become valid marks, however, by acquiring a secondary meaning in the minds of the consuming public. §§ 1052(e)(1)
and (f). The distinction has important practical consequences, however; while a descriptive term may be elevated to trademark status with proof of secondary meaning, a generic term may never
achieve trademark protection. A suggestive term suggests, rather than describes, some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the
imagination in order to draw a conclusion as to the nature of the goods and services. A suggestive mark is protected without the necessity for proof of secondary meaning. Arbitrary or fanciful terms
bear no relationship to the products or services to which they are applied. Like suggestive terms, arbitrary and fanciful marks are protectable without proof of secondary meaning.
FACTS:
Zatarain’s (Plaintiff) manufactured and distributed food products. It registered the terms “Fish-Fri” and “Chick-Fri” as trademarks for its batter mixes used to fry foods. Oak Grove Smokehouse, Inc.
(Defendant) began marketing a “fish fry” and a “chicken fry” in packages similar to those used by Plaintiff. Plaintiff brought suit for trademark infringement and unfair competition under the Lanham
Act. The district court held that Zatarain’s (Plaintiff) trademark “Fish-Fri” was a descriptive term with an established secondary meaning, but held that the alleged infringers had a fair use defense to
any asserted infringement of the term and that the registration of the term “Chick-Fri” should be canceled because it was a descriptive term that lacked any secondary meaning. Plaintiff appealed,
claiming that its trademark “Fish-Fri” was a suggestive term that was automatically protected upon registration and therefore not subject to the “fair use” defense.
ISSUE: Are descriptive terms protected by trademark without a showing of secondary meaning in the minds of the public?
ANSWER:
No.
CONCLUSION:
Descriptive terms are not protected by trademark without a showing of secondary meaning in the minds of the public. The district court was correct in applying the four prevailing tests of
descriptiveness: 1) the dictionary definition, 2) the imagination test; usefulness of the term to competitors, and 4) actual use of the term by other merchants, in finding that “Fish-Fri”was a descriptive
term identifying a function of the product being sold. Proof of secondary meaning is an issue only with respect to descriptive marks, and the burden of proof rests at all times with the plaintiff to
establish such a meaning. The district court found that Plaintiff’s evidence established a secondary meaning for the term in the New Orleans area. However, Plaintiff has no legal claim to an exclusive
right in the original, descriptive sense of the term. Therefore, Defendant is still free to use the words “fish fry” in the ordinary, descriptive sense, so long as such use will not tend to confuse customers
as to the source of the goods. The record contains plenty of evidence to support the district court’s determination that Oak grove’s (Defendant) use of the term was fair and in good faith. Affirmed.
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 pre-requisite 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 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 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 General’s disregard of the
procedure for the cancellation of a registered mark was a valid exercise of his discretion.
Remember, EY’s application was the one granted, and it is Shen Dar’s 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 Dar’s trademark that should not have been issued with registration, even it is the plaintiff.
9. Nestle vs ca gr 112012
FACTS:
CFC corporation filed with Bureau of Patents a registration of the Trademark “FLAVOR MASTER”for instant coffee. Petitioner Societe Des Produits Nestle filed an unverified Notice of Opposition,
claiming that the trademark of respondent’s product is confusingly similar to its Trademarks for coffee: “MASTER ROAST AND MASTER BLEND”. Nestle Philippines also filed notice of
opposition against the registration Petitioners argued that it would cause confusion in trade, or deceive purchasers and would falsely suggest to the public a connection between the two marks.
ISSUE: Is the TM, FLAVOR MASTER, a colorable imitation of the TMs MASTER ROAST and MASTER BLEND?
RULING:
YES. The TM sought to be registered is likely to cause confusion.
A trademark has been generally defined as any word, name, symbol, or device adopted and used by a merchant to identify his goods and distinguish them from those sold by others. Such is entitled to
protection
Under the Philippine Trademark Law, the owner of a TM cannot register if it resembles a mark or trade-name registered in the Philippines or a mark previously used and not abandoned WHICH IS
LIKELY TO CAUSE CONFUSION OR MISTAKE OR TO DECEIVE PURCHASERS.
The law prescribes a stringent standard proscribes registration if it causes confusing similarity, and if it is likely to cause confusion or mistake or deceive purchasers. Colorable imitation denotes a
close imitation as to be calculated to deceive ordinary persons as to cause him to purchase the one supposing it to be the other
In determining colorable imitation there are two tests: Dominancy Test and Holistic Test.
The test of dominancy focuses on the similarity of the prevalent features of the competing trademarks; the holistic test mandates the entirety of the marks in question must be considered in
determining confusing similarity
The Dominancy test should be applied as it relies not only on the visual but also on the aural and connotative comparisons and overall impressions between the two TMs.
· The word MASTER is the dominant feature which is neither a generic nor a descriptive term. As such said term cannot be invalidated as a trademark and therefore, may be protected.
· Generic terms are those which constitute the common descriptive name of an article or substance and are not legally protectable.
· The term MASTER is a suggestive which require imagination, thought, and perception to reach a conclusion as to the nature of the goods.
The term MASTER has acquired a certain connotation to mean the coffee products MASTER ROAST and Master Blend produced by NESTLE. AS SUCH the use of CFC of the term “MASTER” is
likely to cause confusion or mistake.
Facts:
Respondent CFC Corporation filed an application for the registration of the trademark FLAVOR MASTER for instant coffee. Petitioners, a Swiss company and a domestic corporation licensee of
Societe, opposed on the ground that it is confusingly similar to its trademark for coffee and coffee extracts: MASTER ROAST and MASTER BLEND. Petitioners contend that the dominant word
MASTER is present in the 3 trademarks. Respondent CFC argued that the word MASTER cannot be exclusively appropriated being a descriptive or generic term. BPTTT denied CFC’s application.
CA held otherwise.
Issue:
Whether or not the word MASTER is descriptive or generic term incapable of exclusive appropriation.
Ruling: NO.
The word “MASTER” is neither a generic nor a descriptive term. As such, said term cannot 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.” The term “MASTER”, therefore, has acquired a certain connotation to mean the coffee products MASTER ROAST and MASTER BLEND
produced by Nestle. 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.
10. Emerald vs ca gr 100098
FACTS:
On 18 September 1981, private respondent H.D. Lee Co., Inc. filed with the Bureau of Patents, Trademarks & Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR
5054 for the trademark "STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks, briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie under Class 25, issued on 27 October 1980 in the
name of petitioner Emerald Garment Manufacturing Corporation.
Private respondent averred that petitioner's trademark "so closely resembled its own trademark, 'LEE' as previously registered and used in the Philippines cause confusion, mistake and deception on
the part of the purchasing public as to the origin of the goods.
On 19 July 1988, the Director of Patents rendered a decision granting private respondent's petition for cancellation and opposition to registration. The Director of Patents, using the test of dominancy,
declared that petitioner's trademark was confusingly similar to private respondent's mark because "it is the word 'Lee' which draws the attention of the buyer and leads him to conclude that the goods
originated from the same manufacturer. It is undeniably the dominant feature of the mark.
ISSUE:
Whether or not a trademark causes confusion and is likely to deceive the public is a question of fact which is to be resolved by applying the "test of dominancy", meaning, if the competing
trademark contains the main or essential or dominant features of another by reason of which confusion and deception are likely to result.
HELD:
The word "LEE" is the most prominent and distinctive feature of the appellant's trademark and all of the appellee's "LEE" trademarks. It is the mark which draws the attention of the buyer and
leads him to conclude that the goods originated from the same manufacturer. The alleged difference is too insubstantial to be noticeable. The likelihood of confusion is further made more probable by
the fact that both parties are engaged in the same line of business.
Although the Court decided in favor of the respondent, the appellee has sufficiently established its right to prior use and registration of the trademark "LEE" in the Philippines and is thus entitled to
protection from any infringement upon the same. The dissenting opinion of Justice Padilla is more acceptable.
La chemise Lacoste is a French corporation and the actual owner of the trademarks “Lacoste,” “Chemise Lacoste,” “Crocodile Device” and a composite mark consisting of the word “Lacoste” and a
representation of a crocodile/alligator, used on clothings and other goods sold in many parts of the world and which has been marketed in the Philippines (notably by Rustans) since 1964.
In 1975 and 1977, Hemandas Q. Co. was issued certificate of registration for the trademark “Chemise Lacoste and Q Crocodile Device” both in the supplemental and Principal Registry. In 1980, La
Chemise Lacoste SA filed for the registration of the “Crocodile device” and “Lacoste”.
Games and Garments (Gobindram Hemandas, assignee of Hemandas Q.Co.) opposed the registration of “Lacoste.” In 1983, La Chemise Lacoste filed with the NBI a letter-complaint alleging acts of
unfair competition committed by Hemandas and requesting the agency’s assistance.
A search warrant was issued by the trial court. Various goods and articles were seized upon the execution of the warrants. Hemandas filed motion to quash the warrants, which the court granted. The
search warrants were recalled, and the goods ordered to be returned. La Chemise Lacoste filed a petition for certiorari.
Issue:
Whether or not petitioner’s trademark is a well-known mark protected under the Paris Convention.
Ruling: YES.
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.
Pursuant to this obligation, the Ministry of Trade issued a memorandum addressed to the Director of the Patents Office directing the latter to reject all pending applications for Philippine registration
of signature and other world famous trademarks by applicants other than its original owners or users. The conflicting claims over internationally known trademarks involve such name brands as
Lacoste, et. al. 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 Intermediate Appellate Court, in the La Chemise Lacoste S.A. v. Sadhwanidecision which we cite with approval sustained the power of the Minister of Trade to issue the implementing
memorandum and declared La Chemise Lacoste S.A. the owner of the disputed trademark, stating: “In the case at bar, the Minister of Trade, as ‘the competent authority of the country of registration,’
has found that among other well-known trademarks ‘Lacoste’ is the subject of conflicting claims. For this reason, applications for its registration must be rejected or refused, pursuant to the treaty
obligation of the Philippines.”
Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations organized in the Philippines. Sometime in 1991, Sehwani filed with the BPTTT an application for the registration of the
mark “IN N OUT (the inside of the letter “O” formed like a star). Its application was approved and a certificate of registration was issued in its name on 1993. In 2000, Sehwani, Incorporated and
Benita Frites, Inc. entered into a Licensing Agreement, wherein the former entitled the latter to use its registered mark, “IN N OUT.”
Sometime in 1997, In-N-Out Burger filed trademark and service mark applications with the Bureau of Trademarks for the “IN-N-OUT” and “IN-N-OUT Burger & Arrow Design. In 2000, In-N-Out
Burger found out that Sehwani, Incorporated had already obtained Trademark Registration for the mark “IN N OUT (the inside of the letter “O” formed like a star).” Also in 2000, In-N-Out Burger
sent a demand letter directing Sehwani, Inc. to cease and desist from claiming ownership of the mark “IN-N-OUT” and to voluntarily cancel its trademark registration. Sehwani Inc. did not accede to
In-N-Out Burger’s demand but it expressed its willingness to surrender its registration for a consideration.
In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative complaint against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition and cancellation of trademark
registration.
Issues:
• Whether or not the Intellectual Property Office (an administrative body) have jurisdiction of cases involving provisions of the IPC (e.g. unfair competition).[1]
• Whether or not there was unfair competition.
Held:
FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases involving provisions of the IPC (e.g. unfair competition) due to the following reasons:
• Section 10 of the Intellectual Property Code specifically identifies the functions of the Bureau of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.“The Bureau of Legal Affairs shall have the following functions:
10.1 Hear and decide opposition to the application for registration of marks; cancellation of trademarks; subject to the provisions of Section 64, cancellation of patents and utility models, and
industrial designs; and petitions for compulsory licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative complaints for violations of laws involving intellectual property rights; Provided, That its jurisdiction is limited to complaints where
the total damages claimed are not less than Two hundred thousand pesos (P200,000): Provided, futher, That availment of the provisional remedies may be granted in accordance with the
Rules of Court. Xxx
Xxx
(vi) The cancellation of any permit, license, authority, or registration which may have been granted by the Office, or the suspension of the validity thereof for such period of time as the Director
of Legal Affairs may deem reasonable which shall not exceed one (1) year;
Xxx
• While Section 163 thereof vests in civil courts jurisdiction over cases of unfair competition, nothing in the said section states that the regular courts have sole jurisdiction over unfair
competition cases, to the exclusion of administrative bodies.
• Sections 160 and 170, which are also found under Part III of the Intellectual Property Code, recognize the concurrent jurisdiction of civil courts and the IPO over unfair competition
cases.
These two provisions read:
Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement Action. Any foreign national or juridical person who meets the requirements of Section 3 of this Act
and does not engage in business in the Philippines may bring a civil or administrative action hereunder for opposition, cancellation, infringement, unfair competition, or false designation of origin
and false description, whether or not it is licensed to do business in the Philippines under existing laws.
Section 170. Penalties. Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155, Section168, and
Subsection169.1.
Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction to decide the petitioner’s administrative case against respondents and the IPO Director General had
exclusive jurisdiction over the appeal of the judgment of the IPO Director of Legal Affairs.
SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and Benita Frites were not using their registered trademark but that of In-n-Out Burger. Sehwani and Benita Frites are also
giving their products the general appearance that would likely influence the purchasers to believe that their products are that of In-N-Out Burger. The intention to deceive may be inferred from the
similarity of the goods as packed and offered for sale, and, thus, an action will lie to restrain unfair competition. The respondents’ frauduulent intention to deceive purchasers is also apparent in their
use of the In-N-Out Burger in business signages.
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.
Facts:
Petitioner Developers Group of Companies filed an infringement case against respondent Shangri-La alleging that it was the registered owner of the trademark ‘Shangri-La’ and ‘S’ logo for its
restaurant services which respondent herein was illegally using to the prejudice of petitioner. Petitioner also moved to enjoin respondent from using the said mark and logo. Respondent Shangri-La
claimed that it was the legal owner of the mark and it had already filed an administrative case for the cancellation of the mark even before petitioner has filed its complaint. The trial court found for
petitioner and issued the injunction. CA set aside the order of the trial court.
Issue:
Whether or not the petitioner was entitled to the writ of preliminary injunction issued by the trial court.
Ruling: NO.
The conflicting claims of the parties to the subject service mark and logo give us the impression that the right claimed by the plaintiff as its basis for asking for injunctive relief is far from clear. The
prima facie validity of its registration has been put into serious question by the above-stated cases filed by Shangri-La in the Bureau of Patents three years ahead of the complaint. While it is not
required that Developer’s claimed right be conclusively established at this stage, it is nevertheless necessary to show, at least tentatively, that it exists and is not vitiated by any substantial challenge or
contradiction, such as has been made by the private respondent. In our view, the petitioner has failed to comply with this requirement. As for the alleged damages, we find that Developers has not
adduced any evidence of injury, either actual or imminent, resulting from the acts complained of against Shangri-La. There was no finding of the trial court affirming the claim for damages nor is there
any support for it in the record. Our conclusion is that Developers has not justified the issuance of the writ of preliminary injunction by proving that it has a legal right to the disputed mark and logo
and that it has sustained injury as a result of the use thereof by Shangri-La.
Respondents point to these dissimilarities as proof that they did not give their hamburgers the general appearance of petitioners’ “Big Mac” hamburgers.
The dissimilarities in the packaging are minor compared to the stark similarities in the words that give respondents’ “Big Mak” hamburgers the general appearance of petitioners’ “Big
Mac”hamburgers. Section 29(a) expressly provides that the similarity in the general appearance of the goods may be in the “devices or words” used on the wrappings. Respondents have applied on
their plastic wrappers and bags almost the same words that petitioners use on their styrofoam box. What attracts the attention of the buying public are the words “Big Mak” which are almost the same,
aurally and visually, as the words “Big Mac.” The dissimilarities in the material and other devices are insignificant compared to the glaring similarity in the words used in the wrappings.
YES.
A mark is valid if it is “distinctive” and thus not barred from registration under Section 4 of RA 166. However, once registered, not only the mark’s validity but also the registrant’s ownership of the
mark is prima facie presumed.
Respondents contend that of the two words in the “Big Mac” mark, it is only the word “Mac” that is valid because the word “Big” is generic and descriptive (proscribed under Section 4[e]), and
thus “incapable of exclusive appropriation.”
The contention has no merit. The “Big Mac” mark, which should be treated in its entirety and not dissected word for word,is neither generic nor descriptive.
19. KENNETH ROY SAVAGE/K ANGELIN EXPORT TRADING, owned and managed by GEMMA DEMORAL-SAVAGE vs. JUDGE APRONIANO B. TAYPIN, Presiding
Judge, RTC-BR. 12, Cebu City, CEBU PROVINCIAL PROSECUTOR'S OFFICE, NATIONAL BUREAU OF INVESTIGATION, Region VII, Cebu City, JUANITA NG
MENDOZA, MENDCO DEVELOPMENT CORPORATION, ALFREDO SABJON and DANTE SOSMEÑA
G.R. No. 134217, May 11, 2000
FACTS: Petitioners Savage, seek to nullify the search warrant issued by respondent Judge Aproniano B. Taypin of the Regional Trial Court, Br. 12 Cebu City, which resulted in the seizure of certain
pieces of wrought iron furniture from the factory of petitioners located in Biasong, Talisay, Cebu.
The complaint was lodged by private respondent Eric Ng Mendoza, president and general manager of Mendco Development Corporation (MENDCO), alleging that Savage’s products are the object of
unfair competition involving design patents, punishable under Art. 189 of the Revised Penal Code as amended. Savage contends however, that there was no existence of offense leading to the issuance
of a search warrant and eventual seizure of its products.
ISSUE: Whether or not unfair competition involving design patents are punishable under Article 189 of the Revised Penal Code.
HELD: To provide a clear view, the Intellectual Property Code took effect on January 1, 1998. The repealing clause of the IPC provides that Articles 188 and 189 of the Revised Penal Code (RPC),
Presidential Decree No. 49, are hereby repealed The issue involving the existence of "unfair competition" as a felony involving design patents, referred to in Art. 189 of the Revised Penal Code, has
been rendered moot and academic by the repeal of the article. Hence, the search warrant cannot even be issued by virtue of a possible violation of the IPR Code.
There is no mention of any crime of "unfair competition" involving design patents in the controlling provisions on Unfair Competition of the RPC. It is therefore unclear whether the crime exists at
all, for the enactment of RA 8293 did not result in the reenactment of Art. 189 of the Revised Penal Code.
The court is are prevented from applying these principles, along with the new provisions on Unfair Competition found in the IPR Code, to the alleged acts of the petitioners, for such acts constitute
patent infringement as defined by the same Code
Although the case traces its origins to the year 1997 or before the enactment of the IPR Code, Article 22 of the Revised Penal Code provides that penal laws shall be applied retrospectively, if such
application would be beneficial to the accused. Since the IPR Code effectively obliterates the possibility of any criminal liability attaching to the acts alleged, then RPC provisions must be applied.
Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd. to operate coffee shops in the country using the trademark ‘San Francisco Coffee.’ Respondent on the other
hand, is a local corporation engaged in the wholesale and retail sale of coffee and uses the business name ‘San Francisco Coffee & Roastery’ registered with the DTI. Later, respondent filed an
infringement and/or unfair competition complaint against petitioner alleging that the latter was about to open a coffee shop under the name ‘San Francisco Coffee’ causing confusion in the minds of
the public as it bore a similar name and is engaged also in selling of coffee. Petitioner contended no infringement would arise because respondent’s tradename was not registered.
Issue:
Ruling: YES.
In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down what constitutes infringement of an unregistered trade name, thus:
(1) The trademark being infringed is registered in the Intellectual Property Office; however, in infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or the infringing mark or trade name is applied to labels,
signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services;
(4) 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; and
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.
RA 8293, which took effect on 1 January 1998, has dispensed with the registration requirement. Section 165.2 of RA 8293 categorically states that trade names shall be protected, even prior to or
without registration with the IPO, against any unlawful act including any subsequent use of the trade name by a third party, whether as a trade name or a trademark likely to mislead the public.
It is the likelihood of confusion that is the gravamen of infringement. Applying 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.
Petitioner and respondent are engaged in the same business of selling coffee, whether wholesale or retail. The likelihood of confusion is higher in cases where the business of one corporation is the
same or substantially the same as that of another corporation. In this case, the consuming public will likely be confused as to the source of the coffee being sold at petitioner’s coffee shops.
FACTS:
The petitioner holds a business in maintaining coffee shops in the Philippines. It is registered with the Securities and Exchange Commission in January 2001. In its franchise agreement with Coffee
Partners Ltd, it carries the trademark “San Francisco Coffee.” Respondent is engaged in the wholesale and retail sale of coffee that was registered in SEC in May 1995 under a registered business
name of “San Francisco Coffee & Roastery, Inc.” It entered into a joint venture with Boyd Coffee USA to study coffee carts in malls.
When respondent learned that petitioner will open a coffee shop in Libis, Q.C. they sent a letter to the petitioner demanding them 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:
Whether or not the petitioner’s use of the trademark "SAN FRANCISCO COFFEE" constitutes infringement of respondent’s trade name "SAN FRANCISCO COFFEE & ROASTERY, INC." even if
the trade name is not registered with the Intellectual Property Office (IPO).
HELD:
Petition denied. 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 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 "SANFRANCISCO 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.
19