Asia Brewery v. CA (G.R. No. 103543)

Facts:

Respondent San Miguel Corporation filed a complaint against petitioner Asia Brewery for trademark infringement and unfair competition on account of the latter’s BEER PALE PILSEN or BEER NA BEER product which has been competing with petitioner’s SAN MIGUEL PALE PILSEN for a share of the local beer market. The trial court dismissed the complaint. On appeal, CA found petitioner guilty of trademark infringement.

Issues:

(1) Whether or not the words ‘pale pilsen’ may be exclusively appropriated and used by SMC;

(2) Whether or not there is confusing similarity between the two trademarks.

Ruling:

(1) NO. The fact that the words ‘pale pilsen’ are part of ABI’s trademark does not constitute an infringement of SMC’s trademark: SAN MIGUEL PALE PILSEN, for “pale pilsen” are generic words descriptive of the color (“pale”), of a type of beer (“pilsen”), which is a light bohemian beer with a strong hops flavor that originated in the City of Pilsen in Czechoslovakia and became famous in the Middle Ages. “Pilsen” is a “primarily geographically descriptive word,” hence, non-registrable and not appropriable by any beer manufacturer. The words “pale pilsen” may not be appropriated by SMC for its exclusive use even if they are part of its registered trademark: SAN MIGUEL PALE PILSEN. No one may appropriate generic or descriptive words. They belong to the public domain.

(2) NO. There is hardly any dispute that the dominant feature of SMC’s trademark is the name of the product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end of the letters “S” and “M” on an amber background across the upper portion of the rectangular design. On the other hand, the dominant feature of ABI’s trademark is the name: BEER PALE PILSEN, with the word “Beer” written in large amber letters, larger than any of the letters found in the SMC label.

The trial court perceptively observed that the word “BEER” does not appear in SMC’s trademark, just as the words “SAN MIGUEL” do not appear in ABI’s trademark. Hence, there is absolutely no similarity in the dominant features of both trademarks. Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC proving otherwise. There is no confusing similarity between the competing beers for the name of one is “SAN MIGUEL” while the competitor is plain “BEER” and the points of dissimilarity between the two outnumber their points of similarity.

McDonald’s Corporation v. L.C. Big Mak Burger (G.R. No. 143993)

Facts:

Petitioner McDonald’s, an American corporation operating a global chain of fast-food restaurants, is the owner of the ‘Big Mac’ mark for its double-decker hamburger sandwich here and in the US. Meanwhile, respondent L.C., a domestic corporation which operates fast-food outlets and snack vans applied for the registration of the ‘Big Mak’ mark for its hamburger sandwiches. Petitioner opposed on the ground that ‘Big Mak’ was a colorable imitation of its registered ‘Big Mac’ mark for the same food products. Respondents denied there is colorable imitation and argued that petitioner cannot exclusively appropriate the mark ‘Big Mac’ because the word ‘Big’ is a generic and descriptive term. Petitioner filed a complaint for trademark infringement and unfair competition. The trial court found for petitioners. CA held otherwise.

Issues:

(1) Whether or not the word ‘Big Mac’ can be exclusively appropriated by petitioner;

(2) Whether or not there is colorable imitation resulting in likelihood of confusion;

(3) Whether or not there is unfair competition.

Ruling:

(1) 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. The “Big Mac” mark, which should be treated in its entirety and not dissected word for word, is neither generic nor descriptive. Generic marks are commonly used as the name or description of a kind of goods, such as “Lite” for beer or “Chocolate Fudge” for chocolate soda drink. Descriptive marks, on the other hand, convey the characteristics, functions, qualities or ingredients of a product to one who has never seen it or does not know it exists, such as “Arthriticare” for arthritis medication. On the contrary, “Big Mac” falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual characteristics of the product it represents. As such, it is highly distinctive and thus valid. Significantly, the trademark “Little Debbie” for snack cakes was found arbitrary or fanciful.

(2) YES. In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test and the holistic test. The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion. In contrast, the holistic test requires the court to consider the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. This Court, however, has relied on the dominancy test rather than the holistic test. The test of dominancy is now explicitly incorporated into law in Section 155.1 of the Intellectual Property Code which defines infringement as the “colorable imitation of a registered mark xxx or a dominant feature thereof.”

Applying the dominancy test, the Court finds that respondents’ use of the “Big Mak” mark results in likelihood of confusion. Aurally the two marks are the same, with the first word of both marks phonetically the same, and the second word of both marks also phonetically the same. Visually, the two marks have both two words and six letters, with the first word of both marks having the same letters and the second word having the same first two letters. In spelling, considering the Filipino language, even the last letters of both marks are the same. Clearly, respondents have adopted in “Big Mak” not only the dominant but also almost all the features of “Big Mac.” Applied to the same food product of hamburgers, the two marks will likely result in confusion in the public mind. Certainly, “Big Mac” and “Big Mak” for hamburgers create even greater confusion, not only aurally but also visually. Indeed, a person cannot distinguish “Big Mac” from “Big Mak” by their sound. When one hears a “Big Mac” or “Big Mak” hamburger advertisement over the radio, one would not know whether the “Mac” or “Mak” ends with a “c” or a “k.”

(3) YES.  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. Unfair competition is broader than trademark infringement and includes passing off goods with or without trademark infringement. Trademark infringement is a form of unfair competition. Trademark infringement constitutes unfair competition when there is not merely likelihood of confusion, but also actual or probable deception on the public because of the general appearance of the goods. There can be trademark infringement without unfair competition as when the infringer discloses on the labels containing the mark that he manufactures the goods, thus preventing the public from being deceived that the goods originate from the trademark owner.

Respondents’ goods are hamburgers which are also the goods of petitioners. Since respondents chose to apply the “Big Mak” mark on hamburgers, just like petitioner’s use of the “Big Mac” mark on hamburgers, respondents have obviously clothed their goods with the general appearance of petitioners’ goods. There is actually no notice to the public that the “Big Mak” hamburgers are products of “L.C. Big Mak Burger, Inc.” and not those of petitioners who have the exclusive right to the “Big Mac” mark. This clearly shows respondents’ intent to deceive the public. We hold that as found by the RTC, respondent corporation is liable for unfair competition.

Lyceum of the Philippines v. CA (G.R. No. 101897)

Facts:

Petitioner Lyceum of the Philippines had commenced before the SEC a proceeding against the Lyceum of Baguio to change its corporate name alleging that the 2 names are substantially identical because of the word ‘Lyceum’. SEC found for petitioner and the SC denied the consequent appeal of Lyceum of Baguio in a resolution. Petitioner then basing its ground on the resolution, wrote to all educational institutions which made use of the word ‘Lyceum’ as part of their corporate name to discontinue their use. When this recourse failed, petitioner moved before the SEC to enforce its exclusive use of the word ‘Lyceum.’ Petitioner further claimed that the word ‘Lyceum’ has acquired a secondary meaning in its favor. The SEC Hearing Officer found for petitioner. Both SEC En Banc and CA ruled otherwise.

Issues:

(1) Whether or not ‘Lyceum’ is a generic word which cannot be appropriated by petitioner to the exclusion of others.

(2) Whether or not the word ‘Lyceum’ has acquired a secondary meaning in favor of petitioner.

(3) Whether or not petitioner is infringed by respondent institutions’ corporate names.

Ruling:

(1) YES. “Lyceum” is in fact as generic in character as the word “university.” In the name of the petitioner, “Lyceum” appears to be a substitute for “university;” in other places, however, “Lyceum,” or “Liceo” or “Lycee” frequently denotes a secondary school or a college. It may be that the use of the word “Lyceum” may not yet be as widespread as the use of “university,” but it is clear that a not inconsiderable number of educational institutions have adopted “Lyceum” or “Liceo” as part of their corporate names. Since “Lyceum” or “Liceo” denotes a school or institution of learning, it is not unnatural to use this word to designate an entity which is organized and operating as an educational institution.

(2) NO. Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive appropriation with reference to an article in the market, because geographical or otherwise descriptive might nevertheless have been used so long and so exclusively by one producer with reference to this article that, in that trade and to that group of the purchasing public, the word or phrase has come to mean that the article was his produce. With the foregoing as a yardstick, [we] believe the appellant failed to satisfy the aforementioned requisites. While the appellant may have proved that it had been using the word ‘Lyceum’ for a long period of time, this fact alone did not amount to mean that the said word had acquired secondary meaning in its favor because the appellant failed to prove that it had been using the same word all by itself to the exclusion of others. More so, there was no evidence presented to prove that confusion will surely arise if the same word were to be used by other educational institutions.

(3) NO. We do not consider that the corporate names of private respondent institutions are “identical with, or deceptively or confusingly similar” to that of the petitioner institution. True enough, the corporate names of private respondent entities all carry the word “Lyceum” but confusion and deception are effectively precluded by the appending of geographic names to the word “Lyceum.” Thus, we do not believe that the “Lyceum of Aparri” can be mistaken by the general public for the Lyceum of the Philippines, or that the “Lyceum of Camalaniugan” would be confused with the Lyceum of the Philippines.  We conclude and so hold that petitioner institution is not entitled to a legally enforceable exclusive right to use the word “Lyceum” in its corporate name and that other institutions may use “Lyceum” as part of their corporate names.

Ang v. Teodoro (G.R. No. L-48226)

Facts:

Respondent Teodoro has long been using ‘Ang Tibay’ both as trademark and tradename in the manufacture and sale of its slippers, shoes and indoor baseballs when he formally registered it. Meanwhile, petitioner Ang registered the same trademark ‘Ang Tibay’ for its products of pants and shirts. Respondent moved to cancel the registration of petitioner’s mark. The trial court found for petitioner Ang. CA reversed the judgment.  Petitioner argues the validity of the mark being descriptive; that it had not acquired secondary meaning in favor of respondent; and that there can be no infringement/unfair competition because the goods are not similar.

Issues:

(1) Whether or not ‘ANG TIBAY’ is a descriptive term not registrable.

(2) Whether or not the trademark ‘ANG TIBAY’ has acquired a secondary meaning.

(3) Whether or not there is trademark infringement and/or unfair competition between unrelated goods.

Ruling:                              

(1) NO. The phrase “Ang Tibay” is an exclamation denoting administration of strength or durability. For instance, one who tries hard but fails to break an object exclaims, “Ang tibay!” (How strong!”) The phrase “ang tibay” is never used adjectively to define or describe an object. One does not say, “ang tibay sapatos” or “sapatos ang tibay” is never used adjectively to define or describe an object. One does not say, “ang tibay sapatos” or “sapatos ang tibay” to mean “durable shoes,” but “matibay na sapatos” or “sapatos na matibay.” From all of this we deduce that “Ang Tibay” is not a descriptive term within the meaning of the Trade-Mark Law but rather a fanciful or coined phrase which may properly and legally be appropriated as a trademark or tradename. In this connection we do not fail to note that when the petitioner herself took the trouble and expense of securing the registration of these same words as a trademark of her products she or her attorney as well as the Director of Commerce was undoubtedly convinced that said words (Ang Tibay) were not a descriptive term and hence could be legally used and validly registered as a trademark.

(2) NO. In view of the conclusion we have reached upon the first assignment of error, it is unnecessary to apply here the doctrine of “secondary meaning” in trade-mark parlance. This doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article of the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product. We have said that the phrase “Ang Tibay,” being neither geographic nor descriptive, was originally capable of exclusive appropriation as a trade-mark. But were it not so, the application of the doctrine of secondary meaning made by the Court of Appeals could nevertheless be fully sustained because, in any event, by respondent’s long and exclusive use of said phrase with reference to his products and his business, it has acquired a proprietary connotation.

(3) YES. In the present state of development of the law on Trade-Marks, Unfair Competition, and Unfair Trading, the test employed by the courts to determine whether noncompeting goods are or are not of the same class is confusion as to the origin of the goods of the second user. Although two noncompeting articles may be classified under two different classes by the Patent Office because they are deemed not to possess the same descriptive properties, they would, nevertheless, be held by the courts to belong to the same class if the simultaneous use on them of identical or closely similar trade-marks would be likely to cause confusion as to the origin, or personal source, of the second user’s goods. They would be considered as not falling under the same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the purchaser would think the first user made the second user’s goods. The Court of Appeals found in this case that by uninterrupted and exclusive use since 1910 of respondent’s registered trade-mark on slippers and shoes manufactured by him, it has come to indicate the origin and ownership of said goods. It is certainly not farfetched to surmise that the selection by petitioner of the same trade-mark for pants and shirts was motivated by a desire to get a free ride on the reputation and selling power it has acquired at the hands of the respondent.

Philip Morris v. CA (G.R. No. 91332)

Facts:

Petitioners are foreign corporations organized under US laws not doing business in the Philippines and registered owners of symbols ‘MARK VII,’ ‘MARK TEN,’ and ‘LARK’ used in their cigarette products. Petitioners moved to enjoin respondent Fortune Tobacco from manufacturing and selling cigarettes bearing the symbol ‘MARK’ asserting that it is identical or confusingly similar with their trademarks. Petitioners relied on Section 21-A of the Trademark Law to bring their suit and the Paris Convention to protect their trademarks. The court denied the prayer for injunction stating that since petitioners are not doing business in the Philippines, respondent’s cigarettes would not cause irreparable damage to petitioner. CA granted the injunction but on a subsequent motion, dissolved the writ.

Issues:

(1) Whether or not petitioner’s mark may be afforded protection under said laws;

(2) Whether or not petitioner may be granted injunctive relief.

Ruling:

(1) NO. Yet, insofar as this discourse is concerned, there is no necessity to treat the matter with an extensive response because adherence of the Philippines to the 1965 international covenant due to pact sunt servanda had been acknowledged in La Chemise. Given these confluence of existing laws amidst the cases involving trademarks, there can be no disagreement to the guiding principle in commercial law that foreign corporations not engaged in business in the Philippines may maintain a cause of action for infringement primarily because of Section 21-A of the Trademark Law when the legal standing to sue is alleged, which petitioners have done in the case at hand.

Petitioners may have the capacity to sue for infringement irrespective of lack of business activity in the Philippines on account of Section 21-A of the Trademark Law but the question whether they have an exclusive right over their symbol as to justify issuance of the controversial writ will depend on actual use of their trademarks in the Philippines in line with Sections 2 and 2-A of the same law. It is thus incongruous for petitioners to claim that when a foreign corporation not licensed to do business in Philippines files a complaint for infringement, the entity need not be actually using its trademark in commerce in the Philippines. Such a foreign corporation may have the personality to file a suit for infringement but it may not necessarily be entitled to protection due to absence of actual use of the emblem in the local market.

(2) NO.  More telling are the allegations of petitioners in their complaint as well as in the very petition filed with this Court indicating that they are not doing business in the Philippines, for these frank representations are inconsistent and incongruent with any pretense of a right which can breached. Indeed, to be entitled to an injunctive writ, petitioner must show that there exists a right to be protected and that the facts against which injunction is directed are violative of said right. On the economic repercussion of this case, we are extremely bothered by the thought of having to participate in throwing into the streets Filipino workers engaged in the manufacture and sale of private respondent’s “MARK” cigarettes who might be retrenched and forced to join the ranks of the many unemployed and unproductive as a result of the issuance of a simple writ of preliminary injunction and this, during the pendency of the case before the trial court, not to mention the diminution of tax revenues represented to be close to a quarter million pesos annually. On the other hand, if the status quo is maintained, there will be no damage that would be suffered by petitioners inasmuch as they are not doing business in the Philippines. In view of the explicit representation of petitioners in the complaint that they are not engaged in business in the Philippines, it inevitably follows that no conceivable damage can be suffered by them not to mention the foremost consideration heretofore discussed on the absence of their “right” to be protected.