Coffee Partners v. San Francisco Coffee & Roastery (G.R. No. 169504)

Facts:

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:

Whether or not petitioner’s trademark would infringe respondent’s tradename.

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.

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