Diaz v Levi Strauss

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Diaz v Levi Strauss


Victorio P. Diaz vs People of the Philippines and Levi Strauss [Phils.], Inc.G.R. No. 180677 February 18, 2003

Facts: Levi Strauss Philippines, Inc. (Levis Philippines) is a licensee of Levis. After receiving information that Diaz was selling counterfeit LEVIS 501 jeans in his tailoring shops in Almanza and Talon, Las Pias City, Levis Philippines hired a private investigation group to verify the information. Surveillance and the purchase of jeans from the tailoring shops of Diaz 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 the jeans were mere imitations of genuine LEVIS 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 the label LS Jeans Tailoring in the jeans that he made and sold; that the label LS Jeans Tailoring 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 or designs were done in accordance with instructions of the customers; that since the time his shops 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 Jeans Tailoring, and the names of the customers were 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 trademarks of Levis and Diaz.

Held: The Court held, through the application of the holistic test, that there was no likelihood of confusion 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 public knew 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-to-order basis. Under the circumstances, 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 his tailoring shops. His trademark was visually and aurally different from the trademark LEVI STRAUSS & 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 the LS being connected to the word TAILORING, thereby openly suggesting that the jeans bearing 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 distinguish the word LEVIS from the letters LSJT.

In terms of classes of customers and channels of trade, the jeans products of the private complainant and the accused cater to different classes of customers and flow through the different channels of trade. The customers of the private complainant are mall goers belonging to class A and B market group while that of the accused are those who belong to class D and E market who can only afford Php 300 for a pair of made-to-order pants.

2. Chester Uyco, Winston Uychiyong and Cherry Uyco-Ong v Vicente LoG.R. No. 202423, January 28, 2013

Facts:Petitioners in this case are the officers of Wintrade Industrial Sales Corp (WINTRADE), seller of kerosene burners in the Philippines. Vicente Lo, on the other hand, claims to be the asssignee of the disputed marks "HIPOLITO & SEA HORSE & TRIANGULAR DEVICE," "FAMA," and other related marks, service marks and trade names Casa Hipolito S.A. Portugal, to be used in kerosene burners as well.

Lo further alleged that the ultimate owner of said marks is the Portuguese Company GASIREL and that the latter executed a deed of assignment in favor of Lo to use the marks in all countries except Europe and America. Lo subsequently authorized his agent Philippine Burners Manufacturing Corporation (PBMC) to manufacture burners with the aforementioned marks and tradename Casa Hipolito S.A. Portugal.

During a test buy, Lo was able to purchase a burner with marked "Made in Portugal" and "Original Portugal". He noted that such burners were manufactured by WINTRADE. As such, Lo filed a complaint on the ground that the kerosene burners sold by WINTRADE have caused confusion, mistake and deception on the part of the buying public as to the origin of goods.

WINTRADE and its officers contend that the marks "Made in Portugal" and "Original Portugal" refer to origin of the design and not origin of the goods and that they have certificates of registration with the IPO for use of marks, derived their authority to use from WONDER, their predecessor-in-interest and that PBMCs licensing agreement with Lo is ineffective for being unnotarized, among others.

Issue: Whether or not WINTRADE and its officers are liable for violation of the law on trademarks, tradenames and false designation of origin?

Held:Yes. WINTRADE and its officers are liable for violation of the law on trademarks and tradenames and for false designation of origin. They placed the words "Made in Portugal" and "Original Portugal" with the disputed marks knowing fully well because of their previous dealings with the Portuguese company that these were the marks used in the products of another. More importantly, they used the marks without any authority from the owner notwithstanding that their products are, in reality, produced in the Philippines, not in Portugal. Hence, probable cause exists to charge the petitioners with false designation of origin. Had they intended to refer to the source of the design or the history of the manufacture, they should have explicitly said so in their packaging.The Supreme Court emphasized that the law on trademarks and trade names precisely precludes a person from profiting from the business reputation built by another and from deceiving the public as to the origin of products.

3. In-n-out Burger Inc. vs Sehwani, Incorporated and/or Benitas FritesG.R. No. 179127, December 24, 2008

Facts:On2 June 1997, petitioner filed trademark and service mark applications with the Bureau of Trademarks of the IPO for IN-N-OUT and IN-N-OUT Burger & Arrow Design.Petitioner later found out that respondentSehwani, Incorporated had already obtained Trademark Registration for the mark IN N OUT (the inside of the letter O formed like a star). By virtue of a licensing agreement, BenitaFrites, Inc. was able to use the registered mark of respondentSehwani, Incorporated.Petitioner filed an administrative complaint against respondents for unfair competition and cancellation of trademark registration.Petitioner averred that it is the owner of the trade name IN-N-OUT. Petitioner claimed that respondents are making it appear that their goods and services are those of the petitioner, thus, misleading ordinary and unsuspecting consumers that they are purchasing petitioners products. Petitioner then sent a demand letter directing respondents to cease and desist from claiming ownership of the mark IN-N-OUT and to voluntarily cancel its trademark registration.The respondents refused to accede to petitioners demand, but expressed willingness to surrender the registration of respondentSehwani, Incorporated of the IN N OUT trademark for a fair and reasonable consideration.

Respondents, on the other hand, asserted that they had been using the mark IN N OUT in thePhilippinessince15 October 1982.On 15 November 1991, respondentSehwani, Incorporated filed with the then Bureau of Patents, Trademarks and Technology Transfer (BPTTT) an application for the registration of the mark IN N OUT (the inside of the letter O formed like a star).Upon approval of its application, a certificate of registration of the said mark was issued in the name of respondentSehwani, Incorporated on17 December 1993.

Issue:Whether respondent Sehwani Incorporated is liable for unfair competition.

Held:Yes. The essentialelements ofan 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 intent to deceive and defraud may be inferred from the similari