MIDTERMS-Media Law: Copyright Cases

7/31/2019 MIDTERMS-Media Law: Copyright Cases

http://slidepdf.com/reader/full/midterms-media-law-copyright-cases 1/62

Ang vs Teodoro 9/10/2011 7:26:00 AM

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-48226 December 14, 1942 ANA L. ANG, petitioner,

vs.

TORIBIO TEODORO, respondent.

Cirilo Lim for petitioner.

Marcial P. Lichauco and Manuel M. Mejia for respondent.

OZAETA, J.:

Petitioner has appealed to this Court by certiorari to reverse the judgment of

the Court of Appeals reversing that of the Court of First Instance of Manila

and directing the Director of Commerce to cancel the registration of the

trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining

the latter from using said trade-mark on goods manufactured and sold by

her.

Respondent Toribio Teodoro, at first in partnership with Juan Katindig and

later as sole proprietor, has continuously used "Ang Tibay," both as a trade-

mark and as a trade-name, in the manufacture and sale of slippers, shoes,

and indoor baseballs since 1910. He formally registered it as trade-mark onSeptember 29, 1915, and as trade-name on January 3, 1933. The growth of

his business is a thrilling epic of Filipino industry and business capacity.

Starting in an obscure shop in 1910 with a modest capital of P210 but with

tireless industry and unlimited perseverance, Toribio Teodoro, then an

unknown young man making slippers with his own hands but now a

prominent business magnate and manufacturer with a large factory operated

with modern machinery by a great number of employees, has steadily grown

with his business to which he has dedicated the best years of his life and

which he has expanded to such proportions that his gross sales from 1918 to

1938 aggregated P8,787,025.65. His sales in 1937 amounted to

P1,299,343.10 and in 1938, P1,133,165.77. His expenses for advertisement

from 1919 to 1938 aggregated P210,641.56.

Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for

pants and shirts on April 11, 1932, and established a factory for the



manufacture of said articles in the year 1937. In the following year (1938)

her gross sales amounted to P422,682.09. Neither the decision of the trial

court nor that of the Court of Appeals shows how much petitioner has spent

or advertisement. But respondent in his brief says that petitioner "was

unable to prove that she had spent a single centavo advertising "Ang Tibay"shirts and pants prior to 1938. In that year she advertised the factory which

she had just built and it was when this was brought to the attention of the

appellee that he consulted his attorneys and eventually brought the present

suit."

The trial court (Judge Quirico Abeto) presiding absolved the defendant from

the complaint, with costs against the plaintiff, on the grounds that the two

trademarks are dissimilar and are used on different and non-competing

goods; that there had been no exclusive use of the trade-mark by the

plaintiff; and that there had been no fraud in the use of the said trade-mark

by the defendant because the goods on which it is used are essentially

different from those of the plaintiff. The second division of the Court of

Appeals, composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and

Alex Reyes, with Justice Padilla as ponente, reversed that judgment, holding

that by uninterrupted an exclusive use since 191 in the manufacture of

slippers and shoes, respondent's trade-mark has acquired a secondary

meaning; that the goods or articles on which the two trade-marks are used

are similar or belong to the same class; and that the use by petitioner of said trade-mark constitutes a violation of sections 3 and 7 of Act No. 666.

The defendant Director of Commerce did not appeal from the decision of the

Court of Appeals.

First . Counsel for the petitioner, in a well-written brief, makes a frontal

sledge-hammer attack on the validity of respondent's trade-mark "Ang

Tibay." He contends that the phrase "Ang Tibay" as employed by the

respondent on the articles manufactured by him is a descriptive term

because, "freely translate in English," it means "strong, durable, lasting." He

invokes section 2 of Act No. 666, which provides that words or devices which

related only to the name, quality, or description of the merchandise cannot

be the subject of a trade-mark. He cites among others the case of Baxter vs.

Zuazua (5 Phil., 16), which involved the trade-mark "Agua de Kananga"

used on toilet water, and in which this Court held that the word "Kananga,"

which is the name of a well-known Philippine tree or its flower, could not be



appropriated as a trade-mark any more than could the words "sugar,"

"tobacco," or "coffee." On the other hand, counsel for the respondent, in an

equally well-prepared and exhaustive brief, contend that the words "Ang

Tibay" are not descriptive but merely suggestive and may properly be

regarded as fanciful or arbitrary in the legal sense. The cite several cases inwhich similar words have been sustained as valid trade-marks, such as

"Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and "Fashionknit" for

neckties and sweaters. 3

We find it necessary to go into the etymology and meaning of the Tagalog

words "Ang Tibay" to determine whether they are a descriptive term, i.e.,

whether they relate to the quality or description of the merchandise to which

respondent has applied them as a trade-mark. The word "ang" is a definite

article meaning "the" in English. It is also used as an adverb, a contraction

of the word "anong" (what or how). For instance, instead of saying, "Anong

ganda!" ("How beautiful!"), we ordinarily say, "Ang ganda!" Tibay is a root

word from which are derived the verb magpatibay (to strenghten; the

nouns pagkamatibay (strength, durability), katibayan (proof, support,

strength), katibay-tibayan (superior strength); and the adjectives matibay

(strong, durable, lasting), napakatibay (very strong), kasintibay or

magkasintibay (as strong as, or of equal strength). 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, "Angtibay!" (How strong!") It may also be used in a sentence thus, " Ang tibay ng

sapatos mo!" (How durable your shoes are!") 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 trade-mark or trade-

name. 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 trade-mark. It seems stultifying and puerile for her

now to contend otherwise, suggestive of the story of sour grapes. Counsel

for the petitioner says that the function of a trade-mark is to point

distinctively, either by its own meaning or by association, to the origin orownership of the wares to which it is applied. That is correct, and we find

that "Ang Tibay," as used by the respondent to designate his wares, had

exactly performed that function for twenty-two years before the petitioner

adopted it as a trade-mark in her own business. Ang Tibay shoes and

slippers are, by association, known throughout the Philippines as products of

the Ang Tibay factory owned and operated by the respondent Toribio

Teodoro.

Second . In her second assignment of error petitioner contends that the

Court of Appeals erred in holding that the words "Ang Tibay" had acquired a

secondary meaning. 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 thatthe article was his product. (G. & C. Merriam Co. vs. Salfield, 198 F., 369,

373.) 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. (Landers, Frary, and Clark vs. Universal Cooler Corporation, 85

F. [2d], 46.)

Third . Petitioner's third assignment of error is, that the Court of Appeals

erred in holding that pants and shirts are goods similar to shoes and slippers

within the meaning of sections 3 and 7 of Act No. 666. She also contends

under her fourth assignment of error (which we deem convenient to pass

upon together with the third) that there can neither be infringement of



trade-mark under section 3 nor unfair competition under section 7 through

her use of the words "Ang Tibay" in connection with pants and shirts,

because those articles do not belong to the same class of merchandise as

shoes and slippers.

The question raised by petitioner involve the scope and application of sections 3,7, 11, 13, and 20 of the Trade-Mark Law (Act No. 666.) Section 3

provides that "any person entitled to the exclusive use of a trade-mark to

designate the origin or ownership of goods he has made or deals in, may

recover damages in a civil actions from any person who has sold goods of a

similar kind, bearing such trade-mark . . . The complaining party . . . may

have a preliminary injunction, . . . and such injunction upon final hearing, if

the complainant's property in the trade-mark and the defendant's violation

thereof shall be fully established, shall be made perpetual, and this

injunction shall be part of the judgment for damages to be rendered in the

same cause." Section 7 provides that any person who, in selling his goods,

shall give them the general appearance of the goods of another either in the

wrapping of the packages, or in the devices or words thereon, or in any

other feature of their appearance, which would be likely to influence

purchasers to believe that the goods offered are those of the complainant,

shall be guilty of unfair competition, and shall be liable to an action for

damages and to an injunction, as in the cases of trade-mark infringement

under section 3. Section 11 requires the applicant for registration of a trade-mark to state, among others, "the general class of merchandise to which the

trade-mark claimed has been appropriated." Section 13 provides that no

alleged trade-mark or trade name shall be registered which is identical with

a registered or known trade-mark owned by another and appropriate to

the same class of merchandise, or which to nearly resembles another

person's lawful trade-mark or trade-name as to be likely to cause confusion

or mistake in the mind of the public, or to deceive purchasers. And section 2

authorizes the Director of Commerce to establish classes of merchandise for

the purpose of the registration of trade-marks and to determine the

particular description of articles included in each class; it also provides that

"an application for registration of a trade-mark shall be registered only for

one class of articles and only for the particular description of articles

mentioned in said application."



We have underlined the key words used in the statute: "goods of a similar

kin," "general class of merchandise," "same class of merchandise," "classes

of merchandise," and "class of articles," because it is upon their implications

that the result of the case hinges. These phrases, which refer to the same

thing, have the same meaning as the phrase "merchandise of the samedescriptive properties" used in the statutes and jurisprudence of other

jurisdictions.

The burden of petitioner's argument is that under sections 11 and 20 the

registration by respondent of the trade-mark "Ang Tibay" for shoes and

slippers is no safe-guard against its being used by petitioner for pants and

shirts because the latter do not belong to the same class of merchandise or

articles as the former; that she cannot be held guilty of infringement of

trade-mark under section 3 because respondent's mark is not a valid trade-

mark, nor has it acquired a secondary meaning; that pants and shirts do not

possess the same descriptive properties as shoes and slippers; that neither

can she be held guilty of unfair competition under section 7 because the use

by her of the trade-mark "Ang Tibay" upon pants and shirts is not likely to

mislead the general public as to their origin or ownership; and that there is

now showing that she in unfairly or fraudulently using that mark "Ang Tibay"

against the respondent. If we were interpreting the statute for the first time

and in the first decade of the twentieth century, when it was enacted, and

were to construe it strictly and literally, we might uphold petitioner'scontentions. But law and jurisprudence must keep abreast with the progress

of mankind, and the courts must breathe life into the statutes if they are to

serve their purpose. Our Trade-mark Law, enacted nearly forty years ago,

has grown in its implications and practical application, like a constitution, in

virtue of the life continually breathed into it. It is not of merely local

application; it has its counterpart in other jurisdictions of the civilized world

from whose jurisprudence it has also received vitalizing nourishment. We

have to apply this law as it has grown and not as it was born. Its growth or

development abreast with that of sister statutes and jurisprudence in other

jurisdictions is reflected in the following observation of a well-known author:

This fundamental change in attitude first manifested itself in the year 1915-

1917. Until about then, the courts had proceeded on the theory that the

same trade-mark, used on un-like goods, could not cause confusion in trade

and that, therefore, there could be no objection to the use and registration



of a well-known mark by a third party for a different class of goods. Since

1916 however, a growing sentiment began to arise that in the selection of a

famous mark by a third party, there was generally the hidden intention to

"have a free ride" on the trade-mark owner's reputation and good will.

(Derenberg, Trade-Mark Protection & Unfair Trading, 1936 edition, p. 409.)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.

Such construction of the law is induced by cogent reasons of equity and fair

dealing. The courts have come to realize that there can be unfair

competition or unfair trading even if the goods are non-competing, and that

such unfair trading can cause injury or damage to the first user of a giventrade-mark, first, by prevention of the natural expansion of his business and,

second, by having his business reputation confused with and put at the

mercy of the second user. Then noncompetitive products are sold under the

same mark, the gradual whittling away or dispersion of the identity and hold

upon the public mind of the mark created by its first user, inevitably results.

The original owner is entitled to the preservation of the valuable link

between him and the public that has been created by his ingenuity and the

merit of his wares or services. Experience has demonstrated that when a

well-known trade-mark is adopted by another even for a totally different

class of goods, it is done to get the benefit of the reputation and

advertisements of the originator of said mark, to convey to the public a false

impression of some supposed connection between the manufacturer of the

article sold under the original mark and the new articles being tendered to

the public under the same or similar mark. As trade has developed and



commercial changes have come about, the law of unfair competition has

expanded to keep pace with the times and the element of strict competition

in itself has ceased to be the determining factor. The owner of a trade-mark

or trade-name has a property right in which he is entitled to protection,

since there is damage to him from confusion of reputation or goodwill in themind of the public as well as from confusion of goods. The modern trend is

to give emphasis to the unfairness of the acts and to classify and treat the

issue as a fraud.

A few of the numerous cases in which the foregoing doctrines have been laid

down in one form or another will now be cited: (1) In Teodoro Kalaw Ng Khe

vs. Level Brothers Company (G.R. No. 46817), decided by this Court on April

18, 1941, the respondent company (plaintiff below) was granted injunctive

relief against the use by the petitioner of the trade-mark "Lux" and

"Lifebuoy" for hair pomade, they having been originally used by the

respondent for soap; The Court held in effect that although said articles are

noncompetitive, they are similar or belong to the same class. (2) In Lincoln

Motor Co. vs. Lincoln Automobile Co. (44 F. [2d], 812), the manufacturer of

the well-known Lincoln automobile was granted injunctive relief against the

use of the word "Lincoln" by another company as part of its firm name. (3)

The case of Aunt Jemima Mills Co. vs. Rigney & Co. (247 F., 407), involved

the trade-mark "Aunt Jemima," originally used on flour, which the defendant

attempted to use on syrup, and there the court held that the goods, thoughdifferent, are so related as to fall within the mischief which equity should

prevent. (4) In Tiffany & Co., vs. Tiffany Productions, Inc. (264 N.Y.S., 459;

23 Trade-mark Reporter, 183), the plaintiff, a jewelry concern, was granted

injunctive relief against the defendant, a manufacturer of motion pictures,

from using the name "Tiffany." Other famous cases cited on the margin,

wherein the courts granted injunctive relief, involved the following trade-

marks or trade-names: "Kodak," for cameras and photographic supplies,

against its use for bicycles. 4 "Penslar," for medicines and toilet articles,

against its use for cigars; 5 "Rolls-Royce," for automobiles. against its use for

radio tubes; 6 "Vogue," as the name of a magazine, against its use for

hats; 7"Kotex," for sanitary napkins, against the use of "Rotex" for vaginal

syringes; 8 "Sun-Maid," for raisins, against its use for flour; 9 "Yale," for locks

and keys, against its use for electric flashlights; 10 and "Waterman," for

fountain pens, against its use for razor blades. 11lawphil.net



Against this array of famous cases, the industry of counsel for the petitioner

has enabled him to cite on this point only the following cases: (1) Mohawk

Milk Products vs. General Distilleries Corporation (95 F. [2d], 334), wherein

the court held that gin and canned milk and cream do not belong to the

same class; (2) Fawcett Publications, Inc. vs. Popular Mechanics Co. (80 F.[2d], 194), wherein the court held that the words "Popular Mechanics" used

as the title of a magazine and duly registered as a trade-mark were not

infringed by defendant's use of the words "Modern Mechanics and

Inventions" on a competitive magazine, because the word "mechanics" is

merely a descriptive name; and (3) Oxford Book Co. vs. College Entrance

Book Co. (98 F. [2d], 688), wherein the plaintiff unsuccessfully attempted to

enjoin the defendant from using the word "Visualized" in connection with

history books, the court holding that said word is merely descriptive. These

cases cites and relied upon by petitioner are obviously of no decisive

application to the case at bar.

We think reasonable men may not disagree that shoes and shirts are not as

unrelated as fountain pens and razor blades, for instance. The mere relation

or association of the articles is not controlling. As may readily be noted from

what we have heretofore said, the proprietary connotation that a trade-mark

or trade-name has acquired is of more paramount consideration. 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 shoesmanufactured 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. As observed in another case, 12 the field

from which a person may select a trade-mark is practically unlimited, and

hence there is no excuse for impinging upon or even closely approaching the

mark of a business rival. In the unlimited field of choice, what could have

been petitioner's purpose in selecting "Ang Tibay" if not for its fame?

Lastly, in her fifth assignment of error petitioner seems to make a frantic

effort to retain the use of the mark "Ang Tibay." Her counsel suggests that

instead of enjoining her from using it, she may be required to state in her

labels affixed to her products the inscription: "Not manufactured by Toribio

Teodoro." We think such practice would be unethical and unworthy of a



reputable businessman. To the suggestion of petitioner, respondent may

say, not without justice though with a tinge of bitterness: "Why offer a

perpetual apology or explanation as to the origin of your products in order to

use my trade-mark instead of creating one of your own?" On our part may

we add, without meaning to be harsh, that a self-respecting person does notremain in the shelter of another but builds one of his own.

The judgment of the Court of Appeals is affirmed, with costs against the

petitioner in the three instances. So ordered.

Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.



Asia Brewery vs CA 9/10/2011 7:26:00 AM


SUPREME COURT

Manila

EN BANC

G.R. No. 103543 July 5, 1993

ASIA BREWERY, INC., petitioner,

vs.

THE HON. COURT OF APPEALS and SAN MIGUEL

CORPORATION, respondents.

Abad Santos & Associates and Sycip, Salazar, Hernandez & Gatmaitan for

petitioner.

Roco, Bunag, Kapunan Law Office for private respondent.

GRIÑO-AQUINO, J.:

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint

against Asia Brewery Inc. (ABI) for infringement of trademark and unfair

competition on account of the latter's BEER PALE PILSEN or BEER NA BEER

product which has been competing with SMC's SAN MIGUEL PALE PILSEN for

a share of the local beer market. (San Miguel Corporation vs. Asia Brewery

Inc., Civ. Case. No. 56390, RTC Branch 166, Pasig, Metro Manila.).

On August 27, 1990, a decision was rendered by the trial Court, presidedover by Judge Jesus O. Bersamira, dismissing SMC's complaint because ABI

"has not committed trademark infringement or unfair competition against"

SMC (p. 189, Rollo).

SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On

September 30, 1991, the Court of Appeals (Sixth Division composed of

Justice Jose C. Campos, Jr., chairman and ponente, and Justices Venancio D.

Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial court.

The dispositive part of the decision reads as follows:

In the light of the foregoing analysis and under the plain language of the

applicable rule and principle on the matter, We find the defendant Asia

Brewery Incorporated GUILTY of infringement of trademark and unfair

competition. The decision of the trial court is hereby REVERSED, and a new

judgment entered in favor of the plaintiff and against the defendant as

follows:



(1) The defendant Asia Brewery Inc. its officers, agents, servants and

employees are hereby permanently enjoined and restrained from

manufacturing, putting up, selling, advertising, offering or announcing for

sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture

or beer in bottles and under labels substantially identical with or like the saidbottles and labels of plaintiff San Miguel Corporation employed for that

purpose, or substantially identical with or like the bottles and labels now

employed by the defendant for that purpose, or in bottles or under labels

which are calculated to deceive purchasers and consumers into the belief

that the beer is the product of the plaintiff or which will enable others to

substitute, sell or palm off the said beer of the defendant as and for the beer

of the plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered to render an

accounting and pay the San Miguel Corporation double any and all the

payments derived by defendant from operations of its business and the sale

of goods bearing the mark "Beer Pale Pilsen" estimated at approximately

Five Million Pesos (P5,000,000.00); to recall all its products bearing the

mark "Beer Pale Pilsen" from its retailers and deliver these as well as all

labels, signs, prints, packages, wrappers, receptacles and advertisements

bearing the infringing mark and all plates, molds, materials and other means

of making the same to the Court authorized to execute this judgment for

destruction.(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million

Pesos (P2,000,000.00) as moral damages and Half a Million Pesos

(P5,000,000.00) by way of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorney's fees in

the amount of P250,000.00 plus costs to this suit. (p. 90, Rollo.)

Upon a motion for reconsideration filed by ABI, the above dispositive part of

the decision, was modified by the separate opinions of the Special Sixth

Division 1 so that it should read thus:

In the light of the foregoing analysis and under the plain language of the

applicable rule and principle on the matter, We find the defendant Asia

Brewery Incorporated GUILTY of infringement of trademark and unfair

competition. The decision of the trial court is hereby REVERSED, and a new

judgment entered in favor of the plaintiff and against the defendant as

follows:



(1) The defendant Asia Brewery Inc., its officers, agents, servants and

employees are hereby permanently enjoined and restrained from

manufacturing, putting up, selling, advertising, offering or announcing for

sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture

or beer in bottles and under labels substantially identical with or like the saidbottles and labels of plaintiff San Miguel Corporation employed for that

purpose, or substantially identical with or like the bottles and labels now

employed by the defendant for that purpose, or in bottles or under labels

which are calculated to deceive purchasers and consumers into the belief

that the beer if the product of the plaintiff or which will enable others to

substitute, sell or palm off the said beer of the defendant as and for the beer

of the plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its

products bearing the mark Beer Pale Pilsen from its retailers and deliver

these as well as all labels, signs, prints, packages, wrappers, receptacles and

advertisements bearing the infringing mark and all plates, molds, materials

and other means of making the same to the Court authorized to execute this

judgment for destruction.

(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million

Pesos (P2,000,000.00) as moral damages and Half a Million Pesos

(P500,000.00) by way of exemplary damages.

(4) The defendant is further ordered to pay the plaintiff attorney's fees inthe amount of P250,000.00 plus costs of this suit.

In due time, ABI appealed to this Court by a petition for certiorari under Rule

45 of the Rules of Court. The lone issue in this appeal is whether ABI

infringes SMC's trademark: San Miguel Pale Pilsen with Rectangular Hops

and Malt Design, and thereby commits unfair competition against the latter.

It is a factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA

575) and as a general rule, the findings of the Court of Appeals upon factual

questions are conclusive and ought not to be disturbed by us. However,

there are exceptions to this general rule, and they are:

(1) When the conclusion is grounded entirely on speculation, surmises and

conjectures;

(2) When the inference of the Court of Appeals from its findings of fact is

manifestly mistaken, absurd and impossible;

(3) Where there is grave abuse of discretion;



(4) When the judgment is based on a misapprehension of facts;

(5) When the appellate court, in making its findings, went beyond the issues

of the case, and the same are contrary to the admissions of both the

appellant and the appellee;

(6) When the findings of said court are contrary to those of the trial court;(7) When the findings are without citation of specific evidence on which they

are based;

(8) When the facts set forth in the petition as well as in the petitioner's main

and reply briefs are not disputed by the respondents; and

(9) When the findings of facts of the Court of Appeals are premised on the

absence of evidence and are contradicted on record. (Reynolds Philippine

Corporation vs. Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs.

Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA

238; Sacay vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139

SCRA 576; Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex

Investment and Financing Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs.

De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS Stock Brokerage,

Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. vs. CA,

133 SCRA 88].)

Under any of these exceptions, the Court has to review the evidence in order

to arrive at the correct findings based on the record (Roman Catholic Bishop

of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of the Court of Appeals and trial court are contrary to each other, the Supreme Court may

scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)

The present case is one of the exceptions because there is no concurrence

between the trial court and the Court of Appeals on the lone factual issue of

whether ABI, by manufacturing and selling its BEER PALE PILSEN in amber

colored steinie bottles of 320 ml. capacity with a white painted rectangular

label has committed trademark infringement and unfair competition against

SMC.

Infringement of trademark is a form of unfair competition (Clarke vs. Manila

Candy Co., 36 Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise

known as the Trademark Law, defines what constitutes infringement:

Sec. 22. Infringement, what constitutes. — Any person who shall use,

without the consent of the registrant, any reproduction, counterfeit, copy or

colorable imitation of any registered mark or trade-name in connection with



the sale, offering for sale, or advertising of any goods, business or services

on or in connection with which such use is likely to cause confusion or

mistake or to deceive purchasers or others as to the source or origin of such

goods or services, or identity of such business; or reproduce, counterfeit,

copy or colorably imitate any such mark or trade-name and apply suchreproduction, counterfeit, copy, or colorable imitation to labels, signs, prints,

packages, wrappers, receptacles or advertisements intended to be used

upon or in connection with such goods, business or services, shall be liable

to a civil action by the registrant for any or all of the remedies herein

provided. (Emphasis supplied.)

This definition implies that only registered trade marks, trade names and

service marks are protected against infringement or unauthorized use by

another or others. The use of someone else's registered trademark, trade

name or service mark is unauthorized, hence, actionable, if it is done

"without the consent of the registrant." (Ibid .)

The registered trademark of SMC for its pale pilsen beer is:

San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine

Bureau of Patents, Trademarks and Technology Transfer Trademark

Certificate of Registration No. 36103, dated 23 Oct. 1986,

(p. 174, Rollo.)

As described by the trial court in its decision (Page 177, Rollo):

. . . . a rectangular design [is] bordered by what appears to be minutegrains arranged in rows of three in which there appear in each corner hop

designs. At the top is a phrase written in small print "Reg. Phil. Pat. Off."

and at the bottom "Net Contents: 320 Ml." The dominant feature is the

phrase "San Miguel " written horizontally at the upper portion. Below are the

words "Pale Pilsen" written diagonally across the middle of the rectangular

design. In between is a coat of arms and the phrase "Expertly Brewed." The

"S" in "San" and the "M" of "Miguel," "P" of "Pale" and "Pilsen" are written in

Gothic letters with fine strokes of serifs, the kind that first appeared in the

1780s in England and used for printing German as distinguished from Roman

and Italic. Below "Pale Pilsen" is the statement "And Bottled by" (first line,

"San Miguel Brewery" (second line), and "Philippines" (third line). (p.

177, Rollo; Emphasis supplied.)

On the other hand, ABI's trademark, as described by the trial court, consists

of:



. . . a rectangular design bordered by what appear to be buds of flowers with

leaves. The dominant feature is "Beer " written across the upper portion of

the rectangular design. The phrase "Pale Pilsen" appears immediately below

in smaller block letters. To the left is a hop design and to the right, written

in small prints, is the phrase "Net Contents 320 ml." Immediately below"Pale Pilsen" is the statement written in three lines "Especially brewed and

bottled by" (first line), "Asia Brewery Incorporated" (second line), and

"Philippines" (third line), (p. 177, Rollo; Emphasis supplied.)

Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN

MIGUEL PALE PILSEN WITH RECTANGULAR MALT AND HOPS DESIGN? The

answer is "No."

Infringement is determined by the "test of dominancy" rather than by

differences or variations in the details of one trademark and of another. The

rule was formulated in Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4

(1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217

(1956), thus:

It has been consistently held that the question of infringement of a

trademark is to be determined by the test of dominancy . Similarity in size,

form and color, while relevant, is not conclusive. If the competing trademark

contains the main or essential or dominant features of another, and

confusion and deception is likely to result, infringement takes place.

Duplication or imitation is not necessary; nor it is necessary that theinfringing label should suggest an effort to imitate. [C. Neilman Brewing Co.

vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co.,

vs. Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement

of trademarks is whether the use of the marks involved would be likely

to cause confusion or mistakes in the mind of the public or deceive

purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d

588; . . . .) (Emphasis supplied.)

In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was

similarity or "resemblance between the two (trademarks) such as would be

likely to cause the one mark to be mistaken for the other. . . . [But] this is

not such similitude as amounts to identity."

In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court

was more specific: the test is "similarity in the dominant features of the

trademarks."



What are the dominant features of the competing trademarks before us?

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 rectangulardesign.

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.

Besides the dissimilarity in their names, the following other dissimilarities in

the trade dress or appearance of the competing products abound:

(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.

The BEER PALE PILSEN bottle has a fat, bulging neck.

(2) The words "pale pilsen" on SMC's label are printed in bold and lacedletters along a diagonal band, whereas the words "pale pilsen" on ABI's

bottle are half the size and printed in slender block letters on a

straight horizontal band. (See Exhibit "8-a".).

(3) The names of the manufacturers are prominently printed on their

respective bottles.

SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery,

Philippines," whereas BEER PALE PILSEN is "Especially brewed and bottled

by Asia Brewery Incorporated, Philippines."

(4) On the back of ABI's bottle is printed in big, bold letters, under a row of

flower buds and leaves, its copyrighted slogan:

"BEER NA BEER!"

Whereas SMC's bottle carries no slogan.

(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo,

whereas the BEER PALE PILSEN bottle has no logo.



(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms

and the words "San Miguel Brewery Philippines" encircling the same.

The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the

center, surrounded by the words "Asia Brewery Incorporated Philippines."

(7) Finally, there is a substantial price difference between BEER PALE PILSEN(currently at P4.25 per bottle) and SAN MIGUEL PALE PILSEN (currently at

P7.00 per bottle). One who pays only P4.25 for a bottle of beer cannot

expect to receive San Miguel Pale Pilsen from the storekeeper or bartender.

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. (Webster's Third New International Dictionary of the

English Language, Unabridged. Edited by Philip Babcock Gove. Springfield,

Mass.: G & C Merriam Co., [c] 1976, page 1716.) "Pilsen" is a "primarily

geographically descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166,

as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and not

appropriable by any beer manufacturer. The Trademark Law provides:

Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to

distinguish his goods, business or services from the goods, business or

services of others shall have the right to register the same [on the principalregister], unless it:

xxx xxx xxx

(e) Consists of a mark or trade-name which, when applied to or used in

connection with the goods, business or services of the applicant is merely

descriptive or deceptively misdescriptive of them, or when applied to or used

in connection with the goods, business or services of the applicant

is primarily geographically descriptive or deceptively misdescriptive of them,

or is primarily merely a surname." (Emphasis supplied.)

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, any more than such descriptive words as "evaporated milk,"

"tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be

appropriated by any single manufacturer of these food products, for no other

reason than that he was the first to use them in his registered trademark.



InMasso Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it

was held that a dealer in shoes cannot register "Leather Shoes" as his

trademark because that would be merely descriptive and it would be unjust

to deprive other dealers in leather shoes of the right to use the same words

with reference to their merchandise. No one may appropriate generic ordescriptive words. They belong to the public domain (Ong Ai Gui vs. Director

of Patents, 96 Phil. 673, 676 [1955]):

A word or a combination of words which is merely descriptive of an article of

trade, or of its composition, characteristics, or qualities, cannot be

appropriated and protected as a trademark to the exclusion of its use by

others. . . . inasmuch as all persons have an equal right to produce and vend

similar articles, they also have the right to describe them properly and to

use any appropriate language or words for that purpose, and no person can

appropriate to himself exclusively any word or expression, properly

descriptive of the article, its qualities, ingredients or characteristics, and thus

limit other persons in the use of language appropriate to the description of

their manufactures, the right to the use of such language being common to

all . This rule excluding descriptive terms has also been held to apply to

trade-names. As to whether words employed fall within this prohibition, it is

said that the true test is not whether they are exhaustively descriptive of the

article designated, but whether in themselves, and as they are commonly

used by those who understand their meaning, they are reasonably indicativeand descriptive of the thing intended. If they are thus descriptive, and not

arbitrary, they cannot be appropriated from general use and become the

exclusive property of anyone. (52 Am. Jur. 542-543.)

. . . . Others may use the same or similar descriptive word in connection

with their own wares, provided they take proper steps to prevent the public

being deceived. (Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E.

[2d] 598.)

. . . . A descriptive word may be admittedly distinctive, especially if the user

is the first creator of the article. It will, however, be denied protection, not

because it lacks distinctiveness, but rather because others are equally

entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. 869-

870.)" (Emphasis supplied.)

The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery

Incorporated, has printed its name all over the bottle of its beer product: on



the label, on the back of the bottle, as well as on the bottle cap, disproves

SMC's charge that ABI dishonestly and fraudulently intends to palm off its

BEER PALE PILSEN as SMC's product. In view of the visible differences

between the two products, the Court believes it is quite unlikely that a

customer of average intelligence would mistake a bottle of BEER PALEPILSEN for SAN MIGUEL PALE PILSEN.

The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in

amber-colored steinie bottles of 320 ml. capacity and is also advertised in

print, broadcast, and television media, does not necessarily constitute unfair

competition.

Unfair competition is the employment of deception or any other means

contrary to good faith by which a person shall pass off the goods

manufactured by him or in which he deals, or his business, or services, for

those of another who has already established goodwill for his similar goods,

business or services, or any acts calculated to produce the same result.

(Sec. 29, Republic Act No. 166, as amended.) The law further enumerates

the more common ways of committing unfair competition, thus:

Sec. 29. . . .

In particular, and without in any way limiting the scope of unfair

competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general

appearance of goods of another manufacturer or dealer, either as to thegoods themselves or in the wrapping of the packages in which they are

contained, or the devices or words thereon, or in any other feature of their

appearance, which would be likely to influence purchasers to believe that the

goods offered are those of a manufacturer or dealer other than the actual

manufacturer or dealer, or who otherwise clothes the goods with such

appearance as shall deceive the public and defraud another of his legitimate

trade, or any subsequent vendor of such goods or any agent of any vendor

engaged in selling such goods with a like purpose.

(b) Any person who by any artifice, or device, or who employs any other

means calculated to induce the false belief that such person is offering the

services of another who has identified such services in the mind of the

public; or



(c) Any person who shall make any false statement in the course of trade or

who shall commit any other act contrary to good faith of a nature calculated

to discredit the goods, business or services of another.

In this case, the question to be determined is whether ABI is using a name

or mark for its beer that has previously come to designate SMC's beer, orwhether ABI is passing off its BEER PALE PILSEN as SMC's SAN MIGUEL PALE

PILSEN.

. . ..The universal test question is whether the public is likely to be deceived.

Nothing less than conduct tending to pass off one man's goods or business

as that of another will constitute unfair competition. Actual or probable

deception and confusion on the part of the customers by reason of

defendant's practices must always appear. (Shell Co., of the Philippines, Ltd.

vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil. 434, 439.)

The use of ABI of the steinie bottle, similar but not identical to the SAN

MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABI's

counsel, SMC did not invent but merely borrowed the steinie bottle from

abroad and it claims neither patent nor trademark protection for that bottle

shape and design. (See rollo, page 55.) The Cerveza Especial and the Efes

Pale Pilsen use the "steinie" bottle. (See Exhibits 57-D, 57-E.) The trial court

found no infringement of SMC's bottle —

The court agrees with defendant that there is no infringement of plaintiff's

bottle, firstly, because according to plaintiff's witness Deogracias Villadolid, itis a standard type of bottle called steinie, and to witness Jose Antonio

Garcia, it is not a San Miguel Corporation design but a design originally

developed in the United States by the Glass Container Manufacturer's

Institute and therefore lacks exclusivity. Secondly, the shape was never

registered as a trademark. Exhibit "C" is not a registration of a beer bottle

design required under Rep. Act 165 but the registration of the name and

other marks of ownership stamped on containers as required by Rep. Act

623. Thirdly, the neck of defendant's bottle is much larger and has a distinct

bulge in its uppermost part. (p. 186, Rollo.)

The petitioner's contention that bottle size, shape and color may not be the

exclusive property of any one beer manufacturer is well taken. SMC's being

the first to use the steinie bottle does not give SMC a vested right to use it

to the exclusion of everyone else. Being of functional or common use, and

not the exclusive invention of any one, it is available to all who might need



to use it within the industry. Nobody can acquire any exclusive right to

market articles supplying simple human needs in containers or wrappers of

the general form, size and character commonly and immediately used in

marketing such articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)

. . . protection against imitation should be properly confined to nonfunctionalfeatures. Even if purely functional elements are slavishly copied, the

resemblance will not support an action for unfair competition, and the first

user cannot claim secondary meaning protection. Nor can the first user

predicate his claim to protection on the argument that his business was

established in reliance on any such unpatented nonfunctional feature, even

"at large expenditure of money." (Callman Unfair Competition, Trademarks

and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.)

ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its

own steinie bottle which has a fat bulging neck to differentiate it from SMC's

bottle. The amber color is a functional feature of the beer bottle. As pointed

out by ABI, all bottled beer produced in the Philippines is contained and sold

in amber-colored bottles because amber is the most effective color in

preventing transmission of light and provides the maximum protection to

beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and

Candy Co., 38 F2d 885, a merchant cannot be enjoined from using a type or

color of bottle where the same has the useful purpose of protecting the

contents from the deleterious effects of light rays. Moreover, no one mayhave a monopoly of any color. Not only beer, but most medicines, whether

in liquid or tablet form, are sold in amber-colored bottles.

That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate

SMC's bottle because that bottle capacity is the standard prescribed under

Metrication Circular No. 778, dated 4 December 1979, of the Department of

Trade, Metric System Board.

With regard to the white label of both beer bottles, ABI explained that it

used the color white for its label because white presents the strongest

contrast to the amber color of ABI's bottle; it is also the most economical to

use on labels, and the easiest to "bake" in the furnace (p. 16, TSN of

September 20, 1988). No one can have a monopoly of the color amber for

bottles, nor of white for labels, nor of the rectangular shape which is the

usual configuration of labels. Needless to say, the shape of the bottle and of

the label is unimportant. What is all important is the name of the product



written on the label of the bottle for that is how one beer may be

distinguished form the others.

In Dy Buncio v. Tan Tiao Bok , 42 Phil. 190, 196-197, where two competing

tea products were both labelled as Formosan tea, both sold in 5-ounce

packages made of ordinary wrapping paper of conventional color, both withlabels containing designs drawn in green ink and Chinese characters written

in red ink, one label showing a double-decked jar in the center, the other, a

flower pot, this court found that the resemblances between the designs were

not sufficient to mislead the ordinary intelligent buyer, hence, there was no

unfair competition. The Court held:

. . . . In order that there may be deception of the buying public in the sense

necessary to constitute unfair competition, it is necessary to suppose a

public accustomed to buy, and therefore to some extent familiar with, the

goods in question. The test of fraudulent simulation is to be found in the

likelihood of the deception of persons in some measure acquainted with an

established design and desirous of purchasing the commodity with which

that design has been associated. The test is not found in the deception, or

possibility of the deception, of the person who knows nothing about the

design which has been counterfeited, and who must be indifferent as

between that and the other. The simulation, in order to be objectionable,

must be such as appears likely to mislead the ordinarily intelligent buyer

who has a need to supply and is familiar with the article that he seeks topurchase.

The main thrust of SMC's complaint if not infringement of its trademark, but

unfair competition arising form the allegedly "confusing similarity" in the

general appearance or trade dress of ABI's BEER PALE PILSEN beside SMC's

SAN MIGUEL PALE PILSEN (p. 209, Rollo)

SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly

similar" to its SAN MIGUEL PALE PILSEN because both are bottled in 320 ml.

steinie type, amber-colored bottles with white rectangular labels.

However, when as in this case, the names of the competing products are

clearly different and their respective sources are prominently printed on the

label and on other parts of the bottle, mere similarity in the shape and size

of the container and label, does not constitute unfair competition. The steinie

bottle is a standard bottle for beer and is universally used. SMC did not

invent it nor patent it. The fact that SMC's bottle is registered under R.A. No.



623 (as amended by RA 5700, An Act to Regulate the Use of Duly Stamped

or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar

Containers) simply prohibits manufacturers of other foodstuffs from the

unauthorized use of SMC's bottles by refilling these with their products. It

was not uncommon then for products such as patis (fish sauce)and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN

bottles. Registration of SMC's beer bottles did not give SMC a patent on the

steinie or on bottles of similar size, shape or color.

Most containers are standardized because they are usually made by the

same manufacturer. Milk, whether in powdered or liquid form, is sold in

uniform tin cans. The same can be said of the standard ketchup or vinegar

bottle with its familiar elongated neck. Many other grocery items such as

coffee, mayonnaise, pickles and peanut butter are sold in standard glass

jars. The manufacturers of these foodstuffs have equal right to use these

standards tins, bottles and jars for their products. Only their respective

labels distinguish them from each other. Just as no milk producer may sue

the others for unfair competition because they sell their milk in the same

size and shape of milk can which he uses, neither may SMC claim unfair

competition arising from the fact that ABI's BEER PALE PILSEN is sold, like

SMC's SAN MIGUEL PALE PILSEN in amber steinie bottles.

The record does not bear out SMC's apprehension that BEER PALE PILSEN is

being passed off as SAN MIGUEL PALE PILSEN. This is unlikely to happen forconsumers or buyers of beer generally order their beer by brand. As pointed

out by ABI's counsel, in supermarkets and tiendas, beer is ordered by brand,

and the customer surrenders his empty replacement bottles or pays a

deposit to guarantee the return of the empties. If his empties are SAN

MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE PILSEN as replacement.

In sari-sari stores, beer is also ordered from the tindera by brand. The same

is true in restaurants, pubs and beer gardens — beer is ordered from the

waiters by brand. (Op. cit . page 50.)

Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized

the domestic beer market for the past hundred years, those who have been

drinking no other beer but SAN MIGUEL PALE PILSEN these many years

certainly know their beer too well to be deceived by a newcomer in the

market. If they gravitate to ABI's cheaper beer, it will not be because they



are confused or deceived, but because they find the competing product to

their taste.

Our decision in this case will not diminish our ruling in "Del Monte

Corporation vs. Court of Appeals and Sunshine Sauce Manufacturing

Industries," 181 SCRA 410, 419, 3 that:. . . to determine whether a trademark has been infringed, we must consider

the mark as a whole and not as dissected. If the buyer is deceived, it is

attributable to the marks as a totality, not usually to any part of it.

That ruling may not apply to all kinds of products. The Court itself cautioned

that in resolving cases of infringement and unfair competition, the courts

should "take into consideration several factors which would affect its

conclusion, to wit: the age, training and education of the usual purchaser,

the nature and cost of the article, whether the article is bought for

immediate consumption and also the conditions under which it is usually

purchased" (181 SCRA 410, 418-419).

The Del Monte case involved catsup, a common household item which is

bought off the store shelves by housewives and house help who, if they are

illiterate and cannot identify the product by name or brand, would very likely

identify it by mere recollection of its appearance. Since the competitor,

Sunshine Sauce Mfg. Industries, not only used recycled Del Monte bottles for

its catsup (despite the warning embossed on the bottles: "Del Monte

Corporation. Not to be refilled.") but also used labels which were "a colorableimitation" of Del Monte's label, we held that there was infringement of Del

Monte's trademark and unfair competition by Sunshine.

Our ruling in Del Monte would not apply to beer which is not usually picked

from a store shelf but ordered by brand by the beer drinker himself from the

storekeeper or waiter in a pub or restaurant.

Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not

infringed by ABI's mark: "BEER NA BEER" or "BEER PALE PILSEN." ABI

makes its own bottle with a bulging neck to differentiate it from SMC's

bottle, and prints ABI's name in three (3) places on said bottle (front, back

and bottle cap) to prove that it has no intention to pass of its "BEER" as

"SAN MIGUEL."

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.



Petitioner ABI has neither infringed SMC's trademark nor committed unfair

competition with the latter's SAN MIGUEL PALE PILSEN product. While its

BEER PALE PILSEN admittedly competes with the latter in the open market,

that competition is neither unfair nor fraudulent. Hence, we must deny

SMC's prayer to suppress it.WHEREFORE, finding the petition for review meritorious, the same is hereby

granted. The decision and resolution of the Court of Appeals in CA-G.R. CV

No. 28104 are hereby set aside and that of the trial court is REINSTATED

and AFFIRMED. Costs against the private respondent.

SO ORDERED.

Narvasa, C.J., Bidin, Regalado, Romero, Nocon, Bellosillo and Melo, JJ.,

concur.

Feliciano, J., took no part.

Separate Opinions

CRUZ, J., dissenting:

The present ponencia stresses the specific similarities and differences of the

two products to support the conclusion that there is no infringement of trade

marks or unfair competition. That test was rejected in my own ponencia inDel Monte Corporation vs. Court of Appeals, 181 SCRA 410, concurred in by

Justices Narvasa, Gancayco, Griño-Aquino and Medialdea, where we

declared:

While the Court does recognize these distinctions, it does not agree with the

conclusion that there was no infringement or unfair competition. It seems to

us that the lower courts have been so preoccupied with the details that they

have not seen the total picture.

It has been correctly held that side-by-side comparison is not the final test

of similarity. Such comparison requires a careful scrutiny to determine in

what points the labels of the products differ, as was done by the trial judge.

The ordinary buyer does not usually make such scrutiny nor does he usually

have the time to do so. The average shopper is usually in a hurry and does

not inspect every product on the shelf as if he were browsing in a library.

Where the housewife has to return home as soon as possible to her baby or



the working woman has to make quick purchases during her off hours, she is

apt to be confused by similar labels even if they do have minute differences.

The male shopper is worse as he usually does not bother about such

distinctions.

The question is not whether the two articles are distinguishable by theirlabels when set aside by side but whether the general confusion made by

the article upon the eye of the casual purchaser who is unsuspicious and off

his guard, is such as to likely result in his confounding it with the original. As

observed in several cases, the general impression of the ordinary purchaser,

buying under the normally prevalent conditions in trade and giving the

attention such purchasers usually give in buying that class of goods, is the

touchstone.

It has been held that in making purchases, the consumer must depend upon

his recollection of the appearance of the product which he intends to

purchase. The buyer having in mind the mark/label of the respondent must

rely upon his memory of the petitioner's mark. Unlike the judge who has

ample time to minutely examine the labels in question in the comfort of his

sala, the ordinary shopper does not enjoy the same opportunity.

A number of courts have held that to determine whether a trademark has

been infringed, we must consider the mark as a whole and not as dissected.

If the buyer is deceived, it is attributable to the marks as a totality, not

usually to any part of it. The court therefore should be guided by its firstimpression, for a buyer acts quickly and is governed by a casual glance, the

value of which may be dissipated as soon as the court assumes to analyze

carefully the respective features of the mark.

It has also been held that it is not the function of the court in cases of

infringement and unfair competition to educate purchasers but rather to take

their carelessness for granted, and to be ever conscious of the fact that

marks need not be identical. A confusing similarity will justify the

intervention of equity. The judge must also be aware of the fact that usually

a defendant in cases of infringement does not normally copy but makes only

colorable changes. Well has it been said that the most successful form of

copying is to employ enough points of similarity to confuse the public with

enough points of difference to confuse the courts.

For the above reasons, and the other arguments stated in Del Monte, I

dissent.



# Separate Opinions

CRUZ, J., dissenting:

The present ponencia stresses the specific similarities and differences of the

two products to support the conclusion that there is no infringement of trademarks or unfair competition. That test was rejected in my own ponencia in

Del Monte Corporation vs. Court of Appeals, 181 SCRA 410, concurred in by

Justices Narvasa, Gancayco, Griño-Aquino and Medialdea, where we

declared:

While the Court does recognize these distinctions, it does not agree with the

conclusion that there was no infringement or unfair competition. It seems to

us that the lower courts have been so preoccupied with the details that they

have not seen the total picture.

It has been correctly held that side-by-side comparison is not the final test

of similarity. Such comparison requires a careful scrutiny to determine in

what points the labels of the products differ, as was done by the trial judge.

The ordinary buyer does not usually make such scrutiny nor does he usually

have the time to do so. The average shopper is usually in a hurry and does

not inspect every product on the shelf as if he were browsing in a library.

Where the housewife has to return home as soon as possible to her baby or

the working woman has to make quick purchases during her off hours, she is

apt to be confused by similar labels even if they do have minute differences.The male shopper is worse as he usually does not bother about such

distinctions.

The question is not whether the two articles are distinguishable by their

labels when set aside by side but whether the general confusion made by

the article upon the eye of the casual purchaser who is unsuspicious and off

his guard, is such as to likely result in his confounding it with the original. As

observed in several cases, the general impression of the ordinary purchaser,

buying under the normally prevalent conditions in trade and giving the

attention such purchasers usually give in buying that class of goods, is the

touchstone.

It has been held that in making purchases, the consumer must depend upon

his recollection of the appearance of the product which he intends to

purchase. The buyer having in mind the mark/label of the respondent must

rely upon his memory of the petitioner's mark. Unlike the judge who has



ample time to minutely examine the labels in question in the comfort of his

sala, the ordinary shopper does not enjoy the same opportunity.

A number of courts have held that to determine whether a trademark has

been infringed, we must consider the mark as a whole and not as dissected.

If the buyer is deceived, it is attributable to the marks as a totality, notusually to any part of it. The court therefore should be guided by its first

impression, for a buyer acts quickly and is governed by a casual glance, the

value of which may be dissipated as soon as the court assumes to analyze

carefully the respective features of the mark.

It has also been held that it is not the function of the court in cases of

infringement and unfair competition to educate purchasers but rather to take

their carelessness for granted, and to be ever conscious of the fact that

marks need not be identical. A confusing similarity will justify the

intervention of equity. The judge must also be aware of the fact that usually

a defendant in cases of infringement does not normally copy but makes only

colorable changes. Well has it been said that the most successful form of

copying is to employ enough points of similarity to confuse the public with

enough points of difference to confuse the courts.

For the above reasons, and the other arguments stated in Del Monte, I

dissent.

# Footnotes1 Composed of Justice Jose C. Campos, Jr. as chairman, and Justices Ricardo

Francisco, fully concurring, Ricardo Pronove, partly concurring, Filemon H.

Mendoza and Oscar Herrera, both dissenting. Justice Aldecoa, who had

written a separate dissenting opinion, retired before a resolution on the

motion for reconsideration was promulgated. He was substituted by Justice

Oscar M. Herrera.

2 This portion of Justice Campos' original decision ordering ABI to render an

accounting to SMC and pay estimated damages of P5,000,000.00 did not

carry enough votes to become a decision as only Justice Ricardo Francisco

concurred fully with him. Justice Ricardo Pronove, although concurring

partially with Justice Campos' decision, excepted from the portion ordering

an accounting and payment of P5 million damages.

3 Cited in Justice R. Francisco's concurring opinion, p. 107, Rollo.





Del monte Corp vs CA 9/10/2011 7:26:00 AM

DEL MONTE CORPORATION VS. COURT OF APPEALS

181 SCRA 410, JANUARY 25, 1990


CASE: Colorable imitation by Sunshine Tomato catsup of the Del Monte

Trademark due to prominent similarities in general design. Unfair

competition committed by Sunshine Sauce Manufacturing Industries

by using Del Monte catsup bottles despite warning. Sanctions

imposed on Sunshine Sauce Manufacturing Industries for violation of

R.A. No. 166 otherwise known as Trademark Law.

KEY WORDS:

Colorable imitation of trademark; bad faith in using Del Montecatsup bottles despite warnings; side by side comparison not final

test of similarity.

REFERENCE:

Supreme Court Reports Annotated, January 25, 1990 Decision,

Volume 181, pages 410-423

INDUSTRIES:

Del Monte Corporation and Sunshine Sauce Manufacturing Industries

RELEVANT LAWS:

R.A. No. 166 - Trademark Law

Arts. 2222 and 1157 of the New Civil Code

SUMMARY:

Petitioner Philippine Packing Corporation was granted by Del Monte

Corporation the right to manufacture, distribute and sell in the

Philippines various agricultural products, including catsup, under the

Del Monte trademark and logo. Respondent Sunshine Sauce

Manufacturing Industries is engaged in the manufacture, packing,

distribution and sale of various kinds of sauce, identified by the logoSunshine Fruit Catsup. Having received reports that the respondent

was using its exclusively designed bottles and a logo confusingly

similar to Del Monte's, Philpack warned it to desist from doing so on

pain of legal action. Thereafter, claiming that the demand had been

ignored, Philpack and Del Monte filed a complaint against the



respondent for infringement of trademark and unfair competition

with prayer for damages and the issuance of a writ of preliminary

injunction. Sunshine alleged that its logo was substantially different

from the Del Monte logo and would not confuse the buying public to

the detriment of the petitioners.

The issue here is whether there is infringement of trademark and

unfair competition committed by the private respondent, and if so, is

damages recoverable.

The court decided that there is infringement since the logo of the

respondent creates confusion upon the eye of the casual purchaser

who is unsuspicious, that the same is that of the petitioner Del

Monte Corporation. Since Sunshine's label is an infringement of the

Del Monte trademark, law and equity call for the cancellation of theprivate respondent's registration and withdrawal of all its products

bearing the questioned label from the market. With regard to the

use of Del Monte's bottle, the same constitutes unfair competition;

hence, the respondent should be permanently enjoined from the use

of such bottles. As to the amount of damages, the court ruled that

damages cannot be granted since there was no proof presented as

evidence to prove the amount thereof. The court only awarded

nominal damages to the petitioner.



Filipino society of Composers vs Tan 9/10/2011 7:26:00 AM


SUPREME COURT

Manila

G.R. No. L-36402 March 16, 1987

FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS,INC., plaintiff-appellant,

vs.

BENJAMIN TAN, defendant-appellee.

Lichauco, Picazo & Agcaoili Law Office for plaintiff-appellant.

Ramon A. Nieves for defendant-appellee.

PARAS, J.:

An appeal was made to the Court of Appeals docketed as CA-G.R. No.

46373-R * entitled Filipino Society of Composers, Authors, Publishers, Inc.,

Plaintiff-Appellant v. Benjamin Tan, Defendant-Appellee, from the decision of

the Court of First Instance of Manila, Branch VII in Civil Case No.

71222 ** "Filipino Society of Composers, Authors and Publishers, Inc.,

Plaintiff v. Benjamin Tan, Defendant," which had dismissed plaintiffs'

complaint without special pronouncement as to costs.

The Court of Appeals, finding that the case involves pure questions of law,

certified the same to the Supreme Court for final determination (Resolution,

CA-G.R. No. 46373-R, Rollo, p. 36; Resolution of the Supreme Court of February 16, 1973 in L-36402, Rollo, p. 38).

The undisputed facts of this case are as follows:

Plaintiff-appellant is a non-profit association of authors, composers and

publishers duly organized under the Corporation Law of the Philippines and

registered with the Securities and Exchange Commission. Said association is

the owner of certain musical compositions among which are the songs

entitled: "Dahil Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao

Lamang" and "The Nearness Of You."

On the other hand, defendant-appellee is the operator of a restaurant known

as "Alex Soda Foundation and Restaurant" where a combo with professional

singers, hired to play and sing musical compositions to entertain and amuse

customers therein, were playing and singing the above-mentioned

compositions without any license or permission from the appellant to play or

sing the same. Accordingly, appellant demanded from the appellee payment



of the necessary license fee for the playing and singing of aforesaid

compositions but the demand was ignored.

Hence, on November 7, 1967, appellant filed a complaint with the lower

court for infringement of copyright against defendant-appellee for allowing

the playing in defendant-appellee's restaurant of said songs copyrighted inthe name of the former.

Defendant-appellee, in his answer, countered that the complaint states no

cause of action. While not denying the playing of said copyrighted

compositions in his establishment, appellee maintains that the mere singing

and playing of songs and popular tunes even if they are copyrighted do not

constitute an infringement (Record on Appeal, p. 11; Resolution, CA-G.R.

NO. 46373-R, Rollo, pp. 32-36) under the provisions of Section 3 of the

Copyright Law (Act 3134 of the Philippine Legislature).

The lower court, finding for the defendant, dismissed the complaint (Record

on Appeal, p. 25).

Plaintiff appealed to the Court of Appeals which as already stated certified

the case to the Supreme Court for adjudication on the legal question

involved. (Resolution, Court of Appeals, Rollo, p. 36; Resolution of the

Supreme Court of February 18, 1973, Rollo, p. 38).

In its brief in the Court of Appeals, appellant raised the following Assignment

of Errors:

ITHE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL

COMPOSITIONS OF THE APPELLANT WERE IN THE NATURE OF PUBLIC

PROPERTY WHEN THEY WERE COPYRIGHTED OR REGISTERED.

II

THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL

COMPOSITIONS OF THE APPELLANT WERE PLAYED AND SUNG IN THE SODA

FOUNTAIN AND RESTAURANT OF THE APPELLEE BY INDEPENDENT

CONTRACTORS AND ONLY UPON THE REQUEST OF CUSTOMERS.

III

THE LOWER COURT ERRED IN HOLDING THAT THE PLAYING AND SINGING

OF COPYRIGHTED MUSICAL COMPOSITIONS IN THE SODA FOUNTAIN AND

RESTAURANT OF THE APPELLEE ARE NOT PUBLIC PERFORMANCES FOR

PROFIT OF THE SAID COMPOSITIONS WITHIN THE MEANING AND

CONTEMPLATION OF THE COPYRIGHT LAW.



IV

THE LOWER COURT ERRED IN NOT HOLDING THAT THE APPELLEE IS LIABLE

TO THE APPELLANT FOR FOUR (4) SEPARATE INFRINGEMENTS. (Brief for

Appellant, pp. A and B).

The petition is devoid of merit.The principal issues in this case are whether or not the playing and signing

of musical compositions which have been copyrighted under the provisions

of the Copyright Law (Act 3134) inside the establishment of the defendant-

appellee constitute a public performance for profit within the meaning and

contemplation of the Copyright Law of the Philippines; and assuming that

there were indeed public performances for profit, whether or not appellee

can be held liable therefor.

Appellant anchors its claim on Section 3(c) of the Copyright Law which

provides:

SEC. 3. The proprietor of a copyright or his heirs or assigns shall have the

exclusive right:

xxx xxx xxx

(c) To exhibit, perform, represent, produce, or reproduce the copyrighted

work in any manner or by any method whatever for profit or otherwise; if

not reproduced in copies for sale, to sell any manuscripts or any record

whatsoever thereof;

xxx xxx xxxIt maintains that playing or singing a musical composition is universally

accepted as performing the musical composition and that playing and

singing of copyrighted music in the soda fountain and restaurant of the

appellee for the entertainment of the customers although the latter do not

pay for the music but only for the food and drink constitute performance for

profit under the Copyright Law (Brief for the Appellant, pp. 19-25).

We concede that indeed there were "public performances for profit. "

The word "perform" as used in the Act has been applied to "One who plays a

musical composition on a piano, thereby producing in the air sound waves

which are heard as music ... and if the instrument he plays on is a piano plus

a broadcasting apparatus, so that waves are thrown out, not only upon the

air, but upon the other, then also he is performing the musical composition."

(Buck, et al. v. Duncan, et al.; Same Jewell La Salle Realty Co., 32F. 2d.

Series 367).



In relation thereto, it has been held that "The playing of music in dine and

dance establishment which was paid for by the public in purchases of food

and drink constituted "performance for profit" within a Copyright Law."

(Buck, et al. v. Russon No. 4489 25 F. Supp. 317). Thus, it has been

explained that while it is possible in such establishments for the patrons topurchase their food and drinks and at the same time dance to the music of

the orchestra, the music is furnished and used by the orchestra for the

purpose of inducing the public to patronize the establishment and pay for

the entertainment in the purchase of food and drinks. The defendant

conducts his place of business for profit, and it is public; and the music is

performed for profit (Ibid , p. 319). In a similar case, the Court ruled that

"The Performance in a restaurant or hotel dining room, by persons employed

by the proprietor, of a copyrighted musical composition, for the

entertainment of patrons, without charge for admission to hear it, infringes

the exclusive right of the owner of the copyright." (Herbert v. Shanley Co.;

John Church Co. v. Hillard Hotel Co., et al., 242 U.S. 590-591). In delivering

the opinion of the Court in said two cases, Justice Holmes elaborated thus:

If the rights under the copyright are infringed only by a performance where

money is taken at the door, they are very imperfectly protected.

Performances not different in kind from those of the defendants could be

given that might compete with and even destroy the success of the

monopoly that the law intends the plaintiffs to have. It is enough to say thatthere is no need to construe the statute so narrowly. The defendants'

performances are not eleemosynary. They are part of a total for which the

public pays, and the fact that the price of the whole is attributed to a

particular item which those present are expected to order is not important.

It is true that the music is not the sole object, but neither is the food, which

probably could be got cheaper elsewhere. The object is a repast in

surroundings that to people having limited power of conversation or disliking

the rival noise, give a luxurious pleasure not to be had from eating a silent

meal. If music did not pay, it would be given up. If it pays, it pays out of the

public's pocket. Whether it pays or not, the purpose of employing it is profit,

and that is enough. (Ibid ., p. 594).

In the case at bar, it is admitted that the patrons of the restaurant in

question pay only for the food and drinks and apparently not for listening to

the music. As found by the trial court, the music provided is for the purpose



of entertaining and amusing the customers in order to make the

establishment more attractive and desirable (Record on Appeal, p. 21). It

will be noted that for the playing and singing the musical compositions

involved, the combo was paid as independent contractors by the appellant

(Record on Appeal, p. 24). It is therefore obvious that the expenses entailedthereby are added to the overhead of the restaurant which are either

eventually charged in the price of the food and drinks or to the overall total

of additional income produced by the bigger volume of business which the

entertainment was programmed to attract. Consequently, it is beyond

question that the playing and singing of the combo in defendant-appellee's

restaurant constituted performance for profit contemplated by the Copyright

Law. (Act 3134 amended by P.D. No. 49, as amended).

Nevertheless, appellee cannot be said to have infringed upon the Copyright

Law. Appellee's allegation that the composers of the contested musical

compositions waived their right in favor of the general public when they

allowed their intellectual creations to become property of the public domain

before applying for the corresponding copyrights for the same (Brief for

Defendant-Appellee, pp. 14-15) is correct.

The Supreme Court has ruled that "Paragraph 33 of Patent Office

Administrative Order No. 3 (as amended, dated September 18, 1947)

entitled 'Rules of Practice in the Philippines Patent Office relating to the

Registration of Copyright Claims' promulgated pursuant to Republic Act 165,provides among other things that an intellectual creation should be

copyrighted thirty (30) days after its publication, if made in Manila, or within

the (60) days if made elsewhere, failure of which renders such creation

public property." (Santos v. McCullough Printing Company, 12 SCRA 324-

325 [1964]. Indeed, if the general public has made use of the object sought

to be copyrighted for thirty (30) days prior to the copyright application the

law deems the object to have been donated to the public domain and the

same can no longer be copyrighted.

A careful study of the records reveals that the song "Dahil Sa Iyo" which was

registered on April 20, 1956 (Brief for Appellant, p. 10) became popular in

radios, juke boxes, etc. long before registration (TSN, May 28, 1968, pp. 3-

5; 25) while the song "The Nearness Of You" registered on January 14, 1955

(Brief for Appellant, p. 10) had become popular twenty five (25) years prior

to 1968, (the year of the hearing) or from 1943 (TSN, May 28, 1968, p. 27)



and the songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao

Lamang" both registered on July 10, 1966, appear to have been known and

sang by the witnesses as early as 1965 or three years before the hearing in

1968. The testimonies of the witnesses at the hearing of this case on this

subject were unrebutted by the appellant. (Ibid, pp. 28; 29 and 30).Under the circumstances, it is clear that the musical compositions in

question had long become public property, and are therefore beyond the

protection of the Copyright Law.

PREMISES CONSIDERED, the appealed decision of the Court of First Instance

of Manila in Civil Case No. 71222 is hereby AFFIRMED.

SO ORDERED.

Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes, JJ., concur.

Alampay, J., took no part.



Pearl & Dean vs SM 9/10/2011 7:26:00 AM

[G.R. No. 148222. August 15, 2003]

PEARL & DEAN (PHIL.), INCORPORATED, petitioner , vs. SHOEMART,

INCORPORATED, and NORTH EDSA

MARKETING, INCORPORATED,respondents.

D E C I S I O NCORONA, J .:

In the instant petition for review on certiorari under Rule 45 of the Rules of

Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001

decision[1] of the Court of Appeals reversing the October 31, 1996

decision[2] of the Regional Trial Court of Makati, Branch 133, in Civil Case

No. 92-516 which declared private respondents Shoemart Inc. (SMI) and

North Edsa Marketing Inc. (NEMI) liable for infringement of trademark and

copyright, and unfair competition.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals[3] contained a summary

of this dispute:

―Plaintiff -appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in

the manufacture of advertising display units simply referred to as light

boxes. These units utilize specially printed posters sandwiched between

plastic sheets and illuminated with back lights. Pearl and Dean was able to

secure a Certificate of Copyright Registration dated January 20, 1981 over

these illuminated display units. The advertising light boxes were marketedunder the trademark ―Poster Ads‖. The application for registration of the

trademark was filed with the Bureau of Patents, Trademarks and Technology

Transfer on June 20, 1983, but was approved only on September 12, 1988,

per Registration No. 41165. From 1981 to about 1988, Pearl and Dean

employed the services of Metro Industrial Services to manufacture its

advertising displays.

Sometime in 1985, Pearl and Dean negotiated with defendant-appellant

Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM

City North Edsa. Since SM City North Edsa was under construction at that

time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl

and Dean agreed. On September 11, 1985, Pearl and Dean‘s General

Manager, Rodolfo Vergara, submitted for signature the contracts covering

SM Cubao and SM Makati to SMI‘s Advertising Promotions and Publicity

Division Manager, Ramonlito Abano. Only the contract for SM Makati,

http://sc.judiciary.gov.ph/jurisprudence/2003/aug2003/148222.htm#_ftn1











however, was returned signed. On October 4, 1985, Vergara wrote Abano

inquiring about the other contract and reminding him that their agreement

for installation of light boxes was not only for its SM Makati branch, but also

for SM Cubao. SMI did not bother to reply.

Instead, in a letter dated January 14, 1986, SMI‘s house counsel informedPearl and Dean that it was rescinding the contract for SM Makati due to non-

performance of the terms thereof. In his reply dated February 17, 1986,

Vergara protested the unilateral action of SMI, saying it was without

basis. In the same letter, he pushed for the signing of the contract for SM

Cubao.

Two years later, Metro Industrial Services, the company formerly contracted

by Pearl and Dean to fabricate its display units, offered to construct light

boxes for Shoemart‘s chain of stores. SMI approved the proposal and ten

(10) light boxes were subsequently fabricated by Metro Industrial for

SMI. After its contract with Metro Industrial was terminated, SMI engaged

the services of EYD Rainbow Advertising Corporation to make the light

boxes. Some 300 units were fabricated in 1991. These were delivered on a

staggered basis and installed at SM Megamall and SM City.

Sometime in 1989, Pearl and Dean, received reports that exact copies of its

light boxes were installed at SM City and in the fastfood section of SM

Cubao. Upon investigation, Pearl and Dean found out that aside from the

two (2) reported SM branches, light boxes similar to those it manufactureswere also installed in two (2) other SM stores. It further discovered that

defendant-appellant North Edsa Marketing Inc. (NEMI), through its

marketing arm, Prime Spots Marketing Services, was set up primarily to sell

advertising space in lighted display units located in SMI‘s different

branches. Pearl and Dean noted that NEMI is a sister company of SMI.

In the light of its discoveries, Pearl and Dean sent a letter dated December

11, 1991 to both SMI and NEMI enjoining them to cease using the subject

light boxes and to remove the same from SMI‘s establishments. It also

demanded the discontinued use of the trademark ―Poster Ads,‖ and the

payment to Pearl and Dean of compensatory damages in the amount of

Twenty Million Pesos (P20,000,000.00).

Upon receipt of the demand letter, SMI suspended the leasing of two

hundred twenty-four (224) light boxes and NEMI took down its

advertisements for ―Poster Ads‖ from the lighted display units in SMI‘s



stores. Claiming that both SMI and NEMI failed to meet all its demands,

Pearl and Dean filed this instant case for infringement of trademark and

copyright, unfair competition and damages.

In denying the charges hurled against it, SMI maintained that it

independently developed its poster panels using commonly knowntechniques and available technology, without notice of or reference to Pearl

and Dean‘s copyright. SMI noted that the registration of the mark ―Poster

Ads‖ was only for stationeries such as letterheads, envelopes, and the

like. Besides, according to SMI, the word ―Poster Ads‖ is a generic term

which cannot be appropriated as a trademark, and, as such, registration of

such mark is invalid. It also stressed that Pearl and Dean is not entitled to

the reliefs prayed for in its complaint since its advertising display units

contained no copyright notice, in violation of Section 27 of P.D. 49. SMI

alleged that Pearl and Dean had no cause of action against it and that the

suit was purely intended to malign SMI‘s good name. On this basis, SMI,

aside from praying for the dismissal of the case, also counterclaimed for

moral, actual and exemplary damages and for the cancellation of Pearl and

Dean‘s Certification of Copyright Registration No. PD-R-2558 dated January

20, 1981 and Certificate of Trademark Registration No. 4165 dated

September 12, 1988.

NEMI, for its part, denied having manufactured, installed or used any

advertising display units, nor having engaged in the business of advertising. It repleaded SMI‘s averments, admissions and denials and

prayed for similar reliefs and counterclaims as SMI.‖

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally liable

for infringement of copyright under Section 2 of PD 49, as amended, and

infringement of trademark under Section 22 of RA No. 166, as amended,

and are hereby penalized under Section 28 of PD 49, as amended, and

Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are

hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,

representing profits

derived by defendants

as a result of infringe-



ment of plaintiff‘s copyright

from 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00

(d) attorney‘s fees - P1,000,000.00plus

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all light

boxes of SMI which were fabricated by Metro Industrial Services and EYD

Rainbow Advertising Corporation;

(3) to deliver, under oath, to the National Library, all filler-posters using

the trademark ―Poster Ads‖, for destruction; and

(4) to permanently refrain from infringing the copyright on plaintiff ‘s light

boxes and its trademark ―Poster Ads‖.

Defendants‘ counterclaims are hereby ordered dismissed for lack of merit.

SO ORDERED.[4]

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be

considered as either prints, pictorial illustrations, advertising copies, labels,

tags or box wraps, to be properly classified as a copyrightable class ―O‖

work, we have to agree with SMI when it posited that what was copyrighted

were the technical drawings only, and not the light boxes themselves, thus:42. When a drawing is technical and depicts a utilitarian object, a copyright

over the drawings like plaintiff-appellant‘s will not extend to the actual

object. It has so been held under jurisprudence, of which the leading case

isBaker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained

a copyright protection for a book entitled ―Selden‘s Condensed Ledger or

Bookkeeping Simplified‖ which purported to explain a new system of

bookkeeping. Included as part of the book were blank forms and illustrations

consisting of ruled lines and headings, specially designed for use in

connection with the system explained in the work. These forms showed the

entire operation of a day or a week or a month on a single page, or on two

pages following each other. The defendant Baker then produced forms which

were similar to the forms illustrated in Selden‘s copyrighted books. The

Court held that exclusivity to the actual forms is not extended by a

copyright. The reason was that ―to grant a monopoly in the underlying art







when no examination of its novelty has ever been made would be a surprise

and a fraud upon the public; that is the province of letters patent, not of

copyright.‖ And that is precisely the point. No doubt aware that its alleged

original design would never pass the rigorous examination of a patent

application, plaintiff-appellant fought to foist a fraudulent monopoly on thepublic by conveniently resorting to a copyright registration which merely

employs a recordal system without the benefit of an in-depth examination of

novelty.

The principle in Baker vs. Selden was likewise applied in Muller vs.

Triborough Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case,

Muller had obtained a copyright over an unpublished drawing entitled

―Bridge Approach – the drawing showed a novel bridge approach to unsnarl

traffic congestion‖. The defendant constructed a bridge approach which was

alleged to be an infringement of the new design illustrated in plaintiff‘s

drawings. In this case it was held that protection of the drawing does not

extend to the unauthorized duplication of the object drawn because

copyright extends only to the description or expression of the object and not

to the object itself. It does not prevent one from using the drawings to

construct the object portrayed in the drawing.

In two other cases, Imperial Homes Corp. v. Lamont , 458 F. 2d 895

and Scholtz Homes, Inc. v. Maddox , 379 F. 2d 84, it was held that there is

no copyright infringement when one who, without being authorized, uses acopyrighted architectural plan to construct a structure. This is because the

copyright does not extend to the structures themselves.

In fine, we cannot find SMI liable for infringing Pearl and Dean‘s copyright

over the technical drawings of the latter‘s advertising display units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs.

Intermediate Appellate Court that the protective mantle of the Trademark

Law extends only to the goods used by the first user as specified in the

certificate of registration, following the clear mandate conveyed by Section

20 of Republic Act 166, as amended, otherwise known as the Trademark

Law, which reads:

SEC. 20. Certification of registration prima facie evidence of validity .- A

certificate of registration of a mark or trade-name shall be prima

facie evidence of the validity of the registration, the registrant‘s ownership of



the mark or trade-name, and of the registrant‘s exclusive right to use the

same in connection with the goods, business or services specified in the

certificate, subject to any conditions and limitations stated therein.‖

(underscoring supplied )

The records show that on June 20, 1983, Pearl and Dean applied for theregistration of the trademark ―Poster Ads‖ with the Bureau of Patents,

Trademarks, and Technology Transfer. Said trademark was recorded in the

Principal Register on September 12, 1988 under Registration No. 41165

covering the following products: stationeries such as letterheads, envelopes

and calling cards and newsletters.

With this as factual backdrop, we see no legal basis to the finding of liability

on the part of the defendants-appellants for their use of the words ―Poster

Ads‖, in the advertising display units in suit. Jurisprudence has interpreted

Section 20 of the Trademark Law as ―an implicit permission to a

manufacturer to venture into the production of goods and allow that

producer to appropriate the brand name of the senior registrant on goods

other than those stated in the certificate of registration.‖ The Supreme

Court further emphasized the restrictive meaning of Section 20 when it

stated, through Justice Conrado V. Sanchez, that:

Really, if the certificate of registration were to be deemed as including goods

not specified therein, then a situation may arise whereby an applicant may

be tempted to register a trademark on any and all goods which his mindmay conceive even if he had never intended to use the trademark for the

said goods. We believe that such omnibus registration is not contemplated

by our Trademark Law.

While we do not discount the striking similarity between Pearl and Dean‘s

registered trademark and defendants-appellants‘ ―Poster Ads‖ design, as

well as the parallel use by which said words were used in the parties‘

respective advertising copies, we cannot find defendants-appellants liable for

infringement of trademark. ―Poster Ads‖ was registered by Pearl and Dean

for specific use in its stationeries, in contrast to defendants-appellants who

used the same words in their advertising display units. Why Pearl and Dean

limited the use of its trademark to stationeries is simply beyond us. But,

having already done so, it must stand by the consequence of the registration

which it had caused.

xxx xxx xxx



We are constrained to adopt the view of defendants-appellants that the

words ―Poster Ads‖ are a simple contraction of the generic term poster

advertising. In the absence of any convincing proof that ―Poster Ads‖ has

acquired a secondary meaning in this jurisdiction, we find that Pearl and

Dean‘s exclusive right to the use of ―Poster Ads‖ is limited to what is writtenin its certificate of registration, namely, stationeries.

Defendants-appellants cannot thus be held liable for infringement of the

trademark ―Poster Ads‖.

There being no finding of either copyright or trademark infringement on the

part of SMI and NEMI, the monetary award granted by the lower court to

Pearl and Dean has no leg to stand on.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is REVERSED and

SET ASIDE, and another is rendered DISMISSING the complaint and

counterclaims in the above-entitled case for lack of merit.[5]

Dissatisfied with the above decision, petitioner P & D filed the instant

petition assigning the following errors for the Court‘s consideration:

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND

NEMI;

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

INFRINGEMENT OF PEARL & DEAN‘S TRADEMARK ―POSTER ADS‖ WASCOMMITTED BY RESPONDENTS SM AND NEMI;

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE

AWARD OF THE TRIAL COURT, DESPITE THE LATTER‘S FINDING, NOT

DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS GUILTY

OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH

PEARL & DEAN.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING

RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL,

MORAL & EXEMPLARY DAMAGES, ATTORNEY‘S FEES AND COSTS OF SUIT.[6]

ISSUES

In resolving this very interesting case, we are challenged once again to put

into proper perspective four main concerns of intellectual property law —

patents, copyrights, trademarks and unfair competition arising from











infringement of any of the first three. We shall focus then on the following

issues:

(1) if the engineering or technical drawings of an advertising display unit

(light box) are granted copyright protection (copyright certificate of

registration) by the National Library, is the light box depicted in suchengineering drawings ipso facto also protected by such copyright?

(2) or should the light box be registered separately and protected by a

patent issued by the Bureau of Patents Trademarks and Technology Transfer

(now Intellectual Property Office) — in addition to the copyright of the

engineering drawings?

(3) can the owner of a registered trademark legally prevent others from

using such trademark if it is a mere abbreviation of a term descriptive of his

goods, services or business?

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & D‘s complaint was that SMI infringed on its copyright over the

light boxes when SMI had the units manufactured by Metro and EYD

Rainbow Advertising for its own account. Obviously, petitioner‘s position was

premised on its belief that its copyright over the engineering drawings

extended ipso facto to the light boxes depicted or illustrated in said

drawings. In ruling that there was no copyright infringement, the Court of

Appeals held that the copyright was limited to the drawings alone and not to

the light box itself. We agree with the appellate court.First, petitioner‘s application for a copyright certificate — as well as

Copyright Certificate No. PD-R2588 issued by the National Library on

January 20, 1981 — clearly stated that it was for a class ―O‖ work under

Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the

statute then prevailing. Said Section 2 expressly enumerated the works

subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of

creation, subsist with respect to any of the following works:

x x x x x x x x x

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box

wraps;

x x x x x x x x x



Although petitioner‘s copyright certificate was entitled ―Advertising Display

Units‖ (which depicted the box-type electrical devices), its claim of copyright

infringement cannot be sustained.

Copyright, in the strict sense of the term, is purely a statutory right. Being a

mere statutory grant, the rights are limited to what the statute confers. Itmay be obtained and enjoyed only with respect to the subjects and by the

persons, and on terms and conditions specified in the

statute.[7] Accordingly, it can cover only the works falling within the

statutory enumeration or description.[8]

P & D secured its copyright under the classification class “O” work. This

being so, petitioner‘s copyright protection extended only to the technical

drawings and not to the light box itself because the latter was not at all in

the category of ―prints, pictorial illustrations, advertising copies, labels, tags

and box wraps.‖ Stated otherwise, even as we find that P & D indeed owned

a valid copyright, the same could have referred only to the technical

drawings within the category of ―pictorial illustrations.‖ It could not have

possibly stretched out to include the underlying light box. The strict

application[9] of the law‘s enumeration in Section 2 prevents us from giving

petitioner even a little leeway, that is, even if its copyright certificate was

entitled ―Advertising Display Units.‖ What the law does not include, it

excludes, and for the good reason: the light box was not a literary or artistic

piece which could be copyrighted under the copyright law. And no lessclearly, neither could the lack of statutory authority to make the light box

copyrightable be remedied by the simplistic act of entitling the copyright

certificate issued by the National Library as ―Advertising Display Units.‖

In fine, if SMI and NEMI reprinted P & D‘s technical drawings for sale to the

public without license from P & D, then no doubt they would have been

guilty of copyright infringement. But this was not the case. SMI‘s and

NEMI‘s acts complained of by P & D were to have units similar or identical to

the light box illustrated in the technical drawings manufactured by Metro and

EYD Rainbow Advertising, for leasing out to different advertisers. Was this

an infringement of petitioner‘s copyright over the technical drawings? We do

not think so.

During the trial, the president of P & D himself admitted that the light box

was neither a literary not an artistic work but an ―engineering or marketing

invention.‖ [10] Obviously, there appeared to be some confusion regarding

















what ought or ought not to be the proper subjects of copyrights, patents and

trademarks. In the leading case of Kho vs. Court of Appeals ,[11] we ruled

that these three legal rights are completely distinct and separate from one

another, and the protection afforded by one cannot be used interchangeably

to cover items or works that exclusively pertain to the others:Trademark, copyright and patents are different intellectual property rights

that cannot be interchanged with one another. A trademark is any visible

sign capable of distinguishing the goods (trademark) or services (service

mark) of an enterprise and shall include a stamped or marked container of

goods. In relation thereto, a trade name means the name or designation

identifying or distinguishing an enterprise. Meanwhile, the scope of a

copyright is confined to literary and artistic works which are original

intellectual creations in the literary and artistic domain protected from the

moment of their creation. Patentable inventions, on the other hand, refer to

any technical solution of a problem in any field of human activity which is

new, involves an inventive step and is industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and commercial

use of the light boxes without license from petitioner, private respondents

cannot be held legally liable for infringement of P & D‘s copyright over

its technical drawings of the said light boxes, should they be liable instead

for infringement of patent? We do not think so either.For some reason or another, petitioner never secured a patent for the light

boxes. It therefore acquired no patent rights which could have protected its

invention, if in fact it really was. And because it had no patent, petitioner

could not legally prevent anyone from manufacturing or commercially using

the contraption. In Creser Precision Systems, Inc. vs. Court of

Appeals ,[12] we held that ―there can be no infringement of a patent until a

patent has been issued, since whatever right one has to the invention

covered by the patent arises alone from the grant of patent . x x x (A)n

inventor has no common law right to a monopoly of his invention. He has

the right to make use of and vend his invention, but if he voluntarily

discloses it, such as by offering it for sale, the world is free to copy and use

it with impunity. A patent, however, gives the inventor the right to exclude

all others. As a patentee, he has the exclusive right of making, selling or

using the invention.[13] On the assumption that petitioner‘s advertising units

http://sc.judiciary.gov.ph/jurisprudence/2002/mar2002/115758.htm





http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/118708.htm

















were patentable inventions, petitioner revealed them fully to the public by

submitting the engineering drawings thereof to the National Library.

To be able to effectively and legally preclude others from copying and

profiting from the invention, a patent is a primordial requirement. No

patent, no protection. The ultimate goal of a patent system is to bring newdesigns and technologies into the public domain through

disclosure.[14] Ideas, once disclosed to the public without the protection of a

valid patent, are subject to appropriation without significant restraint.[15]

On one side of the coin is the public which will benefit from new ideas; on

the other are the inventors who must be protected. As held in Bauer & Cie

vs. O’Donnel ,[16] ―The act secured to the inventor the exclusive right to make

use, and vend the thing patented, and consequently to prevent others from

exercising like privileges without the consent of the patentee. It was passed

for the purpose of encouraging useful invention and promoting new and

useful inventions by the protection and stimulation given to inventive genius,

and was intended to secure to the public, after the lapse of the exclusive

privileges granted the benefit of such inventions and improvements.‖

The law attempts to strike an ideal balance between the two interests:

―(The p)atent system thus embodies a carefully crafted bargain for

encouraging the creation and disclosure of new useful and non-obvious

advances in technology and design, in return for the exclusive right to

practice the invention for a number of years. The inventor may keep hisinvention secret and reap its fruits indefinitely. In consideration of its

disclosure and the consequent benefit to the community, the patent is

granted. An exclusive enjoyment is guaranteed him for 17 years, but upon

the expiration of that period, the knowledge of the invention inures to the

people, who are thus enabled to practice it and prof it by its use.‖ [17]

The patent law has a three-fold purpose: ―first, patent law seeks to foster

and reward invention; second, it promotes disclosures of inventions to

stimulate further innovation and to permit the public to practice the

invention once the patent expires; third, the stringent requirements for

patent protection seek to ensure that ideas in the public domain remain

there for the free use of the public.‖ [18]

It is only after an exhaustive examination by the patent office that a patent

is issued. Such an in-depth investigation is required because ―in rewarding a

useful invention, the rights and welfare of the community must be fairly























dealt with and effectively guarded. To that end, the prerequisites to

obtaining a patent are strictly observed and when a patent is issued, the

limitations on its exercise are equally strictly enforced. To begin with, a

genuine invention or discovery must be demonstrated lest in the constant

demand for new appliances, the heavy hand of tribute be laid on each slighttechnological advance in art.‖ [19]

There is no such scrutiny in the case of copyrights nor any notice published

before its grant to the effect that a person is claiming the creation of a

work. The law confers the copyright from the moment of creation[20] and the

copyright certificate is issued upon registration with the National Library of a

sworn ex-parte claim of creation.

Therefore, not having gone through the arduous examination for patents,

the petitioner cannot exclude others from the manufacture, sale or

commercial use of the light boxes on the sole basis of its copyright certificate

over the technical drawings.

Stated otherwise, what petitioner seeks is exclusivity without any

opportunity for the patent office (IPO) to scrutinize the light box‘s eligibility

as a patentable invention. The irony here is that, had petitioner secured a

patent instead, its exclusivity would have been for 17 years only. But

through the simplified procedure of copyright-registration with the National

Library — without undergoing the rigor of defending the patentability of its

invention before the IPO and the public — the petitioner would be protectedfor 50 years. This situation could not have been the intention of the law.

In the oft-cited case of Baker vs. Selden[21], the United States Supreme

Court held that only the expression of an idea is protected by copyright, not

the idea itself . In that case, the plaintiff held the copyright of a book which

expounded on a new accounting system he had developed. The publication

illustrated blank forms of ledgers utilized in such a system. The defendant

reproduced forms similar to those illustrated in the plaintiff‘s copyrighted

book. The US Supreme Court ruled that:

―There is no doubt that a work on the subject of book-keeping, though only

explanatory of well known systems, may be the subject of a copyright; but,

then, it is claimed only as a book. x x x. But there is a clear distinction

between the books, as such, and the art, which it is, intended to

illustrate. The mere statement of the proposition is so evident that it

requires hardly any argument to support it. The same distinction may be













predicated of every other art as well as that of bookkeeping. A treatise on

the composition and use of medicines, be they old or new; on the

construction and use of ploughs or watches or churns; or on the mixture and

application of colors for painting or dyeing; or on the mode of drawing lines

to produce the effect of perspective, would be the subject of copyright; butno one would contend that the copyright of the treatise would give the

exclusive right to the art or manufacture described therein. The copyright

of the book, if not pirated from other works, would be valid without regard

to the novelty or want of novelty of its subject matter. The novelty of the

art or thing described or explained has nothing to do with the validity of the

copyright. To give to the author of the book an exclusive property in

the art described therein, when no examination of its novelty has

ever been officially made, would be a surprise and a fraud upon the

public. That is the province of letters patent, not of copyright. The

claim to an invention of discovery of an art or manufacture must be

subjected to the examination of the Patent Office before an

exclusive right therein can be obtained; and a patent from the

government can only secure it.

The difference between the two things, letters patent and copyright, may be

illustrated by reference to the subjects just enumerated. Take the case of

medicines. Certain mixtures are found to be of great value in the healing

art. If the discoverer writes and publishes a book on the subject (asregular physicians generally do), he gains no exclusive right to the

manufacture and sale of the medicine; he gives that to the public. If

he desires to acquire such exclusive right, he must obtain a patent

for the mixture as a new art, manufacture or composition of

matter. He may copyright his book, if he pleases; but that only

secures to him the exclusive right of printing and publishing his

book. So of all other inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings and

illustrations it may contain, gives no exclusive right to the modes of drawing

described, though they may never have been known or used before. By

publishing the book without getting a patent for the art, the latter is given to

the public.

x x x



Now, whilst no one has a right to print or publish his book, or any material

part thereof, as a book intended to convey instruction in the art, any person

may practice and use the art itself which he has described and illustrated

therein. The use of the art is a totally different thing from a

publication of the book explaining it. The copyright of a book onbookkeeping cannot secure the exclusive right to make, sell and use account

books prepared upon the plan set forth in such book. Whether the art might

or might not have been patented, is a question, which is not before us. It

was not patented, and is open and free to the use of the public. And, of

course, in using the art, the ruled lines and headings of accounts must

necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case

arises from a confusion of ideas produced by the peculiar nature of the art

described in the books, which have been made the subject of copyright. In

describing the art, the illustrations and diagrams employed happened to

correspond more closely than usual with the actual work performed by the

operator who uses the art. x x x The description of the art in a book,

though entitled to the benefit of copyright, lays no foundation for an

exclusive claim to the art itself. The object of the one is explanation;

the object of the other is use. The former may be secured by

copyright. The latter can only be secured, if it can be secured at all,

by letters patent.” (underscoring supplied)ON THE ISSUE OF TRADEMARK INFRINGEMENTThis issue concerns the use by respondents of the mark ―Poster Ads‖ which

petitioner‘s president said was a contraction of ―poster advertising.‖ P & D

was able to secure a trademark certificate for it, but one where the goods

specified were ―stationeries such as letterheads, envelopes, calling cards and

newsletters.‖ [22] Petitioner admitted it did not commercially engage in or

market these goods. On the contrary, it dealt in electrically operated backlit

advertising units and the sale of advertising spaces thereon, which,

however, were not at all specified in the trademark certificate.

Under the circumstances, the Court of Appeals correctly cited Faberge Inc.

vs. Intermediate Appellate Court ,[23] where we, invoking Section 20 of the

old Trademark Law, ruled that ―the certificate of registration issued by the

Director of Patents can confer (upon petitioner) the exclusive right to use its

own symbol only to those goods specified in the certificate, subject to any











conditions and limitations specified in the certificate x x x. One who has

adopted and used a trademark on his goods does not prevent the adoption

and use of the same trademark by others for products which are of a

different description.‖ [24] Faberge, Inc. was correct and was in fact recently

reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.[25] Assuming arguendo that ―Poster Ads‖ could validly qualify as a trademark,

the failure of P & D to secure a trademark registration for specific use on the

light boxes meant that there could not have been any trademark

infringement since registration was an essential element thereof.

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a

situation which was possible even if P & D had no registration.[26] However,

while the petitioner‘s complaint in the RTC also cited unfair competition, the

trial court did not find private respondents liable therefor. Petitioner

did not appeal this particular point; hence, it cannot now revive its claim of

unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold

respondents guilty of unfair competition.

By the nature of things, there can be no unfair competition under the law on

copyrights although it is applicable to disputes over the use of trademarks.

Even a name or phrase incapable of appropriation as a trademark or

tradename may, by long and exclusive use by a business (such that thename or phrase becomes associated with the business or product in the

mind of the purchasing public), be entitled to protection against unfair

competition.[27] In this case, there was no evidence that P & D‘s use of

―Poster Ads‖ was distinctive or well-known. As noted by the Court of

Appeals, petitioner‘s expert witnesses himself had testified that ― ‗Poster

Ads‘ was too generic a name. So it was difficult to identify it with any

company, honestly speaking.‖ [28] This crucial admission by its own expert

witness that ―Poster Ads‖ could not be associated with P & D showed that, in

the mind of the public, the goods and services carrying the trademark

―Poster Ads‖ could not be distinguished from the goods and services of other

entities.

This fact also prevented the application of the doctrine of secondary

meaning. ―Poster Ads‖ was generic and incapable of being used as a

trademark because it was used in the field of poster advertising, the very




http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/120900.htm





















business engaged in by petitioner. ―Secondary meaning‖ means that a word

or phrase originally incapable of exclusive appropriation with reference to an

article in the market (because it is geographically or otherwise descriptive)

might nevertheless have been used for so long and so exclusively by one

producer with reference to his article that, in the trade and to that branch of the purchasing public, the word or phrase has come to mean that the article

was his property.[29] The admission by petitioner‘s own expert witness that

he himself could not associate ―Poster Ads‖ with petitioner P & D because it

was ―too generic‖ definitely precluded the application of this exception.

Having discussed the most important and critical issues, we see no need to

belabor the rest.

All told, the Court finds no reversible error committed by the Court of

Appeals when it reversed the Regional Trial Court of Makati City.

WHEREFORE, the petition is hereby DENIED and the decision of the Court

of Appeals dated May 22, 2001 is AFFIRMED in toto.

SO ORDERED.

Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales,

JJ., concur.







Sambar vs Levis 9/10/2011 7:26:00 AM

[G.R. No. 132604. March 6, 2002]

VENANCIO SAMBAR, doing business under the name and style of CVS

Garment Enterprises, petitioner , vs. LEVI STRAUSS & CO., and LEVI

STRAUSS (PHIL.), INC., respondents.

D E C I S I O NQUISUMBING, J .:

This petition for review on certiorari prays for the reversal of the decision

dated January 30, 1998, of the Court of Appeals in CA-G.R. CV No.

51553. That decision affirmed the decision in Civil Case No. 88-2220 of the

Regional Trial Court, Branch 66, Makati City, making permanent the writ of

preliminary injunction, ordering CVS Garment and Industrial Company

(CVSGIC) and petitioner Venancio Sambar to pay private respondents jointly

and solidarily the sum of P50,000 as temperate and nominal

damages, P10,000 as exemplary damages, and P25,000 as attorney‘s fees

and litigation costs, and ordering the Director of the National Library to

cancel Copyright Registration No. 1-1998 in the name of Venancio Sambar.

The facts are as follows:

On September 28, 1987, private respondents, through a letter from their

legal officer, demanded that CVS Garment Enterprises (CVSGE) desist from

using their stitched arcuate design on the Europress jeans which CVSGE

advertised in the Manila Bulletin.

Atty. Benjamin Gruba, counsel of CVSGE, replied that the arcuate design onthe back pockets of Europress jeans was different from the design on the

back pockets of Levi‘s jeans. He further asserted that his client had a

copyright on the design it was using.

Thereafter, private respondents filed a complaint against Sambar, doing

business under the name and style of CVSGE. Private respondents also

impleaded the Director of the National Library. Summons was sent to

Sambar in his business address at 161-B Iriga corner Retiro, La Loma,

Quezon City.

Atty. Gruba claimed that he erroneously received the original summons as

he mistook it as addressed to his client, CVSGIC. He returned the summons

and the pleadings and manifested in court that CVSGE, which was formerly

doing business in the premises, already stopped operation and CVSGIC took

over CVSGE‘s occupation of the premises. He also claimed he did not know

the whereabouts of Sambar, the alleged owner of CVSGE.



Thereafter, private respondents amended their complaint to include

CVSGIC. When private respondents learned the whereabouts of Sambar and

CVSGE, the case was revived.

Private respondents alleged in their complaint that Levi Strauss and Co.

(LS&Co.), an internationally known clothing manufacturer, owns the arcuatedesign trademark which was registered under U.S. Trademark Registration

No. 404, 248 on November 16, 1943, and in the Principal Register of

trademarks with the Philippine Patent Office under Certificate of Registration

No. 20240 issued on October 8, 1973; that through a Trademark Technical

Data and Technical Assistance Agreement with Levi Strauss (Phil.) Inc.

(LSPI) in 1972, LS&Co. granted LSPI a non-exclusive license to use the

arcuate trademark in its manufacture and sale of Levi‘s pants, jackets and

shirts in the Philippines; that in 1983, LS&Co. also appointed LSPI as its

agent and attorney-in-fact to protect its trademark in the Philippines; and

that sometime in 1987, CVSGIC and Venancio Sambar, without the consent

and authority of private respondents and in infringement and unfair

competition, sold and advertised, and despite demands to cease and desist,

continued to manufacture, sell and advertise denim pants under the brand

name ―Europress‖ with back pockets bearing a design similar to the a rcuate

trademark of private respondents, thereby causing confusion on the buying

public, prejudicial to private respondents‘ goodwill and property right.

In its answer, CVSGIC admitted it manufactured, sold and advertised andwas still manufacturing and selling denim pants under the brand name of

―Europress‖, bearing a back pocket design of two double arcs meeting in the

middle. However, it denied that there was infringement or unfair

competition because the display rooms of department stores where Levi‘s

and Europress jeans were sold, were distinctively segregated by billboards

and other modes of advertisement. CVSGIC avers that the public would not

be confused on the ownership of such known trademark as Levi‘s, Jag,

Europress, etc.. Also, CVSGIC claimed that it had its own original arcuate

design, as evidenced by Copyright Registration No. 1-1998, which was very

different and distinct from Levi‘s design. CVSGIC prayed for actual, moral

and exemplary damages by way of counterclaim.

Petitioner Venancio Sambar filed a separate answer. He denied he was

connected with CVSGIC. He admitted that Copyright Registration No. 1-

1998 was issued to him, but he denied using it. He also said he did not



authorize anyone to use the copyrighted design. He counterclaimed for

moral and exemplary damages and payment of attorney‘s fees.

After hearing, the trial court issued a writ of preliminary injunction enjoining

CVSGIC and petitioner from manufacturing, advertising and selling pants

with the arcuate design on their back pockets. CVSGIC and petitioner didnot appear during the October 13 and 27, 1993 hearings, when they were to

present evidence. Consequently, the trial court ruled that they waived their

right to present evidence.

On May 3, 1995, the trial court rendered its decision. The dispositive portion

reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

a) making the writ of preliminary injunction permanent;

b) ordering the defendants CVS Garment and Industrial Company and

Venancio Sambar to pay the plaintiffs jointly and solidarily the sum of

P50,000.00 as temperate and nominal damages, the sum of P10,000.00 as

exemplary damages, and the sum of P25,000.00 as attorney‘s fees and

litigation expenses and to pay the costs.

SO ORDERED.[1]

Private respondents moved for a reconsideration praying for the cancellation

of petitioner‘s copyright registration. The trial court granted reconsideration

in its July 14, 1995 order, thus:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:a) making the writ of preliminary injunction permanent;

b) ordering the defendants CVS Garment and Industrial Company and

Venancio Sambar to pay the plaintiffs jointly and solidarily the sum of

P50,000.00 as temperate and nominal damages, the sum of P10,000.00 as

exemplary damages, and the sum of P25,000.00 as attorney‘s fees and

litigation expenses and to pay the costs;

c) ordering the Director of the National Library to cancel the Copyright

Registration No. 1-1998 issued in the name of Venancio Sambar.[2]

Petitioner appealed to the Court of Appeals which on January 30, 1998

decided in favor of private respondents as follows:

WHEREFORE, the judgment appealed from is AFFIRMED in toto.

SO ORDERED.[3]

In this instant petition, petitioner avers that the Court of Appeals erred in:

http://sc.judiciary.gov.ph/jurisprudence/2002/mar2002/132604.htm#_edn1














I. ...RULING THAT THERE WAS AN INFRINGEMENT OF RESPONDENT‘S

ARCUATE MARK.

II. ...RULING THAT PETITIONER IS JOINTLY AND SOLIDARILY LIABLE WITH

CVS GARMENTS INDUSTRIAL CORPORATION FOR INFRINGEMENT OF

RESPONDENT‘S ARCUATE MARK.III. ...IN ORDERING, THERE BEING NO INFRINGEMENT OR UNFAIR

COMPETITION, THE AWARD OF DAMAGES AND CANCELLATION OF

COPYRIGHT REGISTRATION NO. 1-1998 ISSUED IN THE NAME OF

PETITIONER.[4]

Briefly, we are asked to resolve the following issues:

1. Did petitioner infringe on private respondents‘ arcuate design?

2. Must we hold petitioner solidarily liable with CVS Garments Industrial

Corporation?

3. Are private respondents entitled to nominal, temperate and exemplary

damages and cancellation of petitioner‘s copyright?

On the first issue, petitioner claims that he did not infringe on private

respondents‘ arcuate design because there was no colorable imitation which

deceived or confused the public. He cites Emerald Garment Manufacturing

Corporation vs. Court of Appeals, G.R. No. 100098, 251 SCRA 600 (1995),

as authority. He disagreed with the Court of Appeals that there were

confusing similarities between Levi‘s and Europress‘ arcuate designs, despite

the trial court‘s observation of differences in them. Petitioner maintains thatalthough the backpocket designs had similarities, the public was not

confused because Levi‘s jeans had other marks not found in Europress

jeans. Further, he says Levi‘s long history and popularity made its

trademark easily identifiable by the public.

In its comment, private respondents aver that the Court of Appeals did not

err in ruling that there was infringement in this case. The backpocket design

of Europress jeans, a double arc intersecting in the middle was the same as

Levi‘s‘ mark, also a double arc intersecting at the center. Although the trial

court found differences in the two designs, these differences were not

noticeable. Further, private respondents said, infringement of trademark did

not require exact similarity. Colorable imitation enough to cause confusion

among the public, was sufficient for a trademark to be infringed. Private

respondents explained that in a market research they conducted with 600







respondents, the result showed that the public was confused by Europress

trademark vis the Levi‘s trademark.

We find that the first issue raised by petitioner is factual. The basic rule is

that factual questions are beyond the province of this Court in a petition for

review. Although there are exceptions to this rule, this case is not one of them.[5] Hence, we find no reason to disturb the findings of the Court of

Appeals that Europress‘ use of the arcuate design was an infringement of the

Levi‘s design.

On the second issue, petitioner claims that private respondents did not show

that he was connected with CVSGIC, nor did they prove his specific acts of

infringement to make him liable for damages. Again, this is a factual matter

and factual findings of the trial court, concurred in by the Court of Appeals,

are final and binding on this Court.[6] Both the courts below found that

petitioner had a copyright over Europress‘ arcuate design and that he

consented to the use of said design by CVSGIC. We are bound by this

finding, especially in the absence of a showing that it was tainted with

arbitrariness or palpable error.[7] It must be stressed that it was immaterial

whether or not petitioner was connected with CVSGIC. What is relevant is

that petitioner had a copyright over the design and that he allowed the use

of the same by CVSGIC.

Petitioner also contends that the Court of Appeals erred when it said that he

had the burden to prove that he was not connected with CVSGIC and that hedid not authorize anyone to use his copyrighted design. According to

petitioner, these are important elements of private respondents‘ cause of

action against him, hence, private respondents had the ultimate burden of

proof.

Pertinent is Section 1, Rule 131 of the Rules of Court[8] which provides that

the burden of proof is the duty of a party to prove the truth of his claim or

defense, or any fact in issue by the amount of evidence required by law. In

civil cases, the burden of proof may be on either the plaintiff or the

defendant. It is on the latter, if in his answer he alleges an affirmative

defense, which is not a denial of an essential ingredient in the plaintiff‘s

cause of action, but is one which, if established, will be a good defense –

i.e., an ―avoidance‖ of the claim, which prima facie, the plaintiff already has

because of the defendant‘s own admissions in the pleadings.[9]






















Petitioner‘s defense in this case was an affirmative defense. He did not deny

that private respondents owned the arcuate trademark nor that CVSGIC

used on its products a similar arcuate design. What he averred was that

although he owned the copyright on the Europress arcuate design, he did

not allow CVSGIC to use it. He also said he was not connected withCVSGIC. These were not alleged by private respondents in their pleadings,

and petitioner therefore had the burden to prove these.

Lastly, are private respondents entitled to nominal, temperate and

exemplary damages and cancellation of petitioner‘s copyright?

Petitioner insists that he had not infringed on the arcuate trademark, hence,

there was no basis for nominal and temperate damages. Also, an award of

nominal damages precludes an award of temperate damages. He

cites Ventanilla vs. Centeno, G.R. No. L-14333, 1 SCRA 215 (1961) on

this. Thus, he contends, assuming arguendo that there was infringement,

the Court of Appeals still erred in awarding both nominal and temperate

damages.

Petitioner likewise said that the grant of exemplary damages was

inconsistent with the trial court‘s finding that the design of Europress jeans

was not similar to Levi‘s design and that no pecuniary loss was suffered by

respondents to entitle them to such damages.

Lastly, petitioner maintains that as Europress‘ arcuate design is not a copy

of that of Levi‘s, citing the trial court‘s findings that although there aresimilarities, there are also differences in the two designs, cancellation of his

copyright was not justified.

On this matter, private respondents assert that the lower courts found that

there was infringement and Levi‘s was entitled to damages based on

Sections 22 and 23 of RA No. 166 otherwise known as the Trade Mark

Law,[10] as amended, which was the law then governing. Said sections

define infringement and prescribe the remedies therefor. Further, private

respondents aver it was misleading for petitioner to claim that the trial court

ruled that private respondents did not suffer pecuniary loss, suggesting that

the award of damages was improper. According to the private respondents,

the trial court did not make any such ruling. It simply stated that there was

no evidence that Levi‘s had suffered decline in its sales because of the use of

the arcuate design by Europress jeans. They offer that while there may be

no direct proof that they suffered a decline in sales, damages may still be







measured based on a reasonable percentage of the gross sales of the

respondents, pursuant to Section 23 of the Trademark law.[11]

Finally, regarding the cancellation of petitioner‘s copyright, private

respondents deny that the trial court ruled that the arcuate design of

Europress jeans was not the same as Levi‘s arcuate design jeans. On thecontrary, the trial court expressly ruled that there was similarity. The

cancellation of petitioner‘s copyright was justified because petitioner‘s

copyright can not prevail over respondents‘ registration in the Principal

Register of Bureau of Patents, Trademarks, and Technology

Transfer. According to private respondents, the essence of copyright

registration is originality and a copied design is inherently non-

copyrightable. They insist that registration does not confer originality upon

a copycat version of a prior design.

From the foregoing discussion, it is clear that the matters raised by

petitioner in relation to the last issue are purely factual, except the matter of

nominal and temperate damages. Petitioner claims that damages are not

due private respondents and his copyright should not be cancelled because

he had not infringed on Levi‘s trademark. Both the trial court and the Court

of Appeals found there was infringement. Thus, the award of damages and

cancellation of petitioner‘s copyright are appropriate.[12] Award of damages

is clearly provided in Section 23,[13] while cancellation of petitioner‘s

copyright finds basis on the fact that the design was a mere copy of that of private respondents‘ trademark. To be entitled to copyright, the thing being

copyrighted must be original, created by the author through his own skill,

labor and judgment, without directly copying or evasively imitating the work

of another.[14]

However, we agree with petitioner that it was error for the Court of Appeals

to affirm the award of nominal damages combined with temperate

damages[15] by the Regional Trial Court of Makati. What respondents are

entitled to is an award for temperate damages, not nominal damages. For

although the exact amount of damage or loss can not be determined with

reasonable certainty, the fact that there was infringement means they

suffered losses for which they are entitled to moderate damages.[16] We find

that the award of P50,000.00 as temperate damages fair and reasonable,

considering the circumstances herein as well as the global coverage and


























reputation of private respondents Levi Strauss & Company and Levi Strauss

(Phil.), Inc.

WHEREFORE, the decision dated January 30, 1998, of the Court of Appeals,

in CA-G.R. CV No. 51553 AFFIRMING the judgment of the Regional Trial

Court of Makati, Branch 66, dated July 14, 1995, is hereby MODIFIED sothat nominal damages are deleted but the amount of P50,000 is hereby

awarded only as TEMPERATE DAMAGES. In all other respects, said

judgment is hereby AFFIRMED, to wit:

a) the writ of preliminary injunction is made permanent;

b) the defendants CVS Garment and Industrial Company and Venancio

Sambar are ordered also to pay the plaintiffs jointly and solidarily the sum

of P10,000.00 as exemplary damages, and the sum of P25,000.00 as

attorney‘s fees and litigation expenses, and to pay the costs; and

c) the Director of the National Library is ordered to cancel the Copyright

Registration No. 1-1998 issued in the name of Venancio Sambar.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

Documents

MIDTERMS-Media Law: Copyright Cases