246 Corporation v. Daway (G.R. No. 157216)

Facts:

Respondents Montres Rolex and Rolex Centre Phil., owners/proprietors of Rolex and Crown Device, filed a complaint for trademark infringement alleging petitioner adopted and used without authority the mark ‘Rolex’ in its business name ‘Rolex Music Lounge.’ Petitioner argued that there is no trademark infringement since no confusion would arise by the use of ‘Rolex’ considering that its entertainment business is totally unrelated to respondent’s business or products such as watches, clocks, etc.

Issue:

Whether or not likelihood of confusion would arise from the use of identical marks over unrelated goods/business.

Ruling: YES.

Under the old Trademark Law where the goods for which the identical marks are used are unrelated, there can be no likelihood of confusion and there is therefore no infringement in the use by the junior user of the registered mark on the entirely different goods. This ruling, however, has been to some extent, modified by Section 123.1(f) of the Intellectual Property Code.

A junior user of a well-known mark on goods or services which are not similar to the goods or services, and are therefore unrelated, to those specified in the certificate of registration of the well-known mark is precluded from using the same on the entirely unrelated goods or services, subject to the following requisites, to wit:

  1. The mark is well-known internationally and in the Philippines.
  2. The use of the well-known mark on the entirely unrelated goods or services would indicate a connection between such unrelated goods or services and those goods or services specified in the certificate of registration in the well known mark. This requirement refers to the likelihood of confusion of origin or business or some business connection or relationship between the registrant and the user of the mark.
  3. The interests of the owner of the well-known mark are likely to be damaged. For instance, if the registrant will be precluded from expanding its business to those unrelated good or services, or if the interests of the registrant of the well-known mark will be damaged because of the inferior quality of the good or services of the user.

*Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely unrelated to respondents’ business involving watches, clocks, bracelets, etc. However, the Court cannot yet resolve the merits of the present controversy considering that the requisites for the application of Section 123.1(f), which constitute the kernel issue at bar, clearly require determination facts of which need to be resolved at the trial court.

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