CASE DIGEST, COMMERCIAL LAW REVIEW UNDER ATTY.

FAJARDO

(INTELLECTUAL PROPERTY LAW)

AIR PHILIPPINES CORPORATION vs. PENNSWELL, INC. G.R. No. 172835

Facts:

Respondent delivered and sold to petitioner sundry goods in trade. Under the contracts, petitioners
total outstanding obligation amounted to P449,864.98 with interest at 14% per annum until the amount
would be fully paid. For failure of the petitioner to comply with its obligation under said contracts,
respondent filed a Complaint for a Sum of Money with the RTC. In its Answer, petitioner contended that
its refusal to pay was not without valid and justifiable reasons. Petitioner alleged that it was defrauded
by respondent for its previous sale of four items. Said items were misrepresented by respondent as
belonging to a new line, but were in truth and in fact, identical with products petitioner had previously
purchased from respondent. Petitioner asserted that it was deceived by respondent which merely
altered the names and labels of such goods. During the pendency of the trial, petitioner filed a Motion
to Compel respondent to give a detailed list of the ingredients and chemical components of the
products. The RTC rendered an Order granting the petitioners motion and directed Pennswell, Inc. to
give Air Philippines Corporation, a detailed list of the ingredients or chemical components of the
chemical products. Respondent sought reconsideration of the foregoing Order, contending that it
cannot be compelled to disclose the chemical components sought because the matter is confidential. It
argued that what petitioner endeavored to inquire upon constituted a trade secret which respondent
cannot be forced to divulge. The RTC reversed itself and issued an Order, finding that the chemical
components are respondents trade secrets and are privileged in character. Alleging grave abuse of
discretion on the part of the RTC, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of
Court with the CA, which denied the Petition and affirmed the Order of the RTC.

Issue:

Whether or not the chemical components of respondents products are privileged in character.

Ruling:

Section 24 of Rule 130 draws the types of disqualification by reason of privileged communication, to wit:
(a) communication between husband and wife; (b) communication between attorney and client; (c)
communication between physician and patient; (d) communication between priest and penitent; and (e)
public officers and public interest. There are, however, other privileged matters that are not mentioned
by Rule 130. Among them are the following: (a) editors may not be compelled to disclose the source of
published news; (b) voters may not be compelled to disclose for whom they voted; (c) trade secrets; (d)
information contained in tax census returns; and (d) bank deposits. The Court, ruled against the
petitioner and affirmed the ruling of the CA which upheld the finding of the RTC that there is substantial
basis for respondent to seek protection of the law for its proprietary rights over the detailed chemical
composition of its products. December 13, 2007
 COCA-COLA BOTTLERS PHILS. NAGA PLANT V. GOMEZ (G.R. NO. 154491)

Facts:

Petitioner Coca-Cola applied for a search warrant against Pepsi for hoarding empty Coke bottles in
Pepsis yard, an act allegedly penalized as unfair competition under the IP Code. MTC issued the search
warrants and the local police seized the goods. Later, a complaint against respondents was filed for
violation of the IP Code. Respondent contended that the hoarding of empty Coke bottles did not involve
fraud and deceit for them to be liable for unfair competition. MTC upheld the validity of the warrants.
RTC voided the warrant for lack of probable cause of the commission of unfair competition.

Issue:

Whether or not respondents hoarding of Coke bottles constitute unfair competition.

Ruling: NO.

From jurisprudence, unfair competition has been defined as the passing off (or palming off) or
attempting to pass off upon the public the goods or business of one person as the goods or business of
another with the end and probable effect of deceiving the public. One of the essential requisites in an
action to restrain unfair competition is proof of fraud; the intent to deceive must be shown before the
right to recover can exist. The advent of the IP Code has not significantly changed these rulings as they
are fully in accord with what Section 168 of the Code in its entirety provides. Deception, passing
off and fraud upon the public are still the key elements that must be present for unfair competition to
exist.

As basis for this interpretative analysis, we note that Section 168.1 speaks of a person who has earned
goodwill with respect to his goods and services and who is entitled to protection under the Code, with
or without a registered mark. Section 168.2, as previously discussed, refers to the general definition of
unfair competition. Section 168.3, on the other hand, refers to the specific instances of unfair
competition, with Section 168.3(a) referring to the sale of goods given the appearance of the goods of
another; Section 168.3(b), to the inducement of belief that his or her goods or services are that of
another who has earned goodwill; while the disputed Section 168.3(c) being a catch all clause whose
coverage the parties now dispute.

Under all the above approaches, we conclude that the hoarding as defined and charged by the
petitioner does not fall within the coverage of the IP Code and of Section 168 in particular. It does not
relate to any patent, trademark, trade name or service mark that the respondents have invaded,
intruded into or used without proper authority from the petitioner. Nor are the respondents alleged to
be fraudulently passing off their products or services as those of the petitioner. The respondents are
not also alleged to be undertaking any representation or misrepresentation that would confuse or tend
to confuse the goods of the petitioner with those of the respondents, or vice versa. What in fact the
petitioner alleges is an act foreign to the Code, to the concepts it embodies and to the acts it regulates;
as alleged, hoarding inflicts unfairness by seeking to limit the oppositions sales by depriving it of the
bottles it can use for these sales. In this light, hoarding for purposes of destruction is closer to what
another law, R.A. No. 623 covers.
 Elidad Kho vs Court of Appeals GR 115758 March 19,2002

Facts:

Elidad Kho is the owner of KEC Cosmetics Laboratory and she was also the holder of copyrights over Chin
Chun Su and its Oval Facial Cream Container/Case. She also bought the patent rights over the Chin Chun
Su & Device and Chin Chun Su for medicated cream from one Quintin Cheng, who was the assignee of
Shun Yi Factory a Taiwanese factory actually manufacturing Chin Chun Su products.

Kho filed a petition for injunction against Summerville General Merchandising and Company to enjoin
the latter from advertising and selling Chin Chun Su products, in similar containers as that of Kho, for
this is misleading the public and causing Kho to lose income; the petition is also to enjoin Summerville
from infringing upon Khos copyrights.

Summerville in their defense alleged that they are the exclusive and authorized importer, re-packer and
distributor of Chin Chun Su products; that Shun Yi even authorized Summerville to register its trade
name Chin Chun Su Medicated Cream with the Philippine Patent Office; that Quintin Cheng, from whom
Kho acquired her patent rights, had been terminated (her services) by Shun Yi.

Issue:

Whether or not Kho has the exclusive right to use the trade name and its container.

Ruliing: No

Kho has no right to support her claim for the exclusive use of the subject trade name and its container.
The name and container of a beauty cream product are proper subjects of a trademark (not copyright like
what she registered for) inasmuch as the same falls squarely within its definition. In order to be entitled
to exclusively use the same in the sale of the beauty cream product, the user must sufficiently prove that
she registered or used it before anybody else did. Khos copyright and patent registration of the name and
container would not guarantee her the right to the exclusive use of the same for the reason that they are
not appropriate subjects of the said intellectual rights. Consequently, a preliminary injunction order
cannot be issued for the reason that the petitioner has not proven that she has a clear right over the said
name and container to the exclusion of others, not having proven that she has registered a trademark
thereto or used the same before anyone did.

Pearl and Dean vs. Shoemart GR 148222 August 15, 2013

Facts:

Pearl and Dean is a corporation engaged in the manufacture of advertising display units referred to as
light boxes and these light boxes were marketed under the trademark Poster Ads. Pearl and Dean
entered into a contract with Shoemart, Inc. for the lease and installation of the light boxes in SM North
Edsa. However, due to construction constraints, Shoemart, Inc offered as an alternative SM Makati and
SM Cubao.

After Pearl and Deans contract was rescinded, exact copies of its light boxes were installed in various
SM malls, fabricated by Metro Industrial Services and later by EYD Rainbow Advertising Corporation.
Pearl and Dean sent a letter to Shoemart and its sister company, North Edsa Marketing to cease using
the light boxes and to remove them from the malls, and demanded the discontinued used of the
trademark Poster Ads.

Unsatisfied with the compliance of its demands, Pearl and Dean sued Shoemart which was ruled by the
trial court in their favor. On appeal, however, the Court of Appeals reversed the trial courts decision.

Issue:

Whether Pearl and Deans copyright registration for its light boxes and the trademark registration of
Poster Ads preclude Shoemart and North Edsa Marketing from using the same.

Ruling: No

Pearl and Dean secured its copyright under the classification class o work. This being so, its protection
extended only to the technical drawings and not to the light box itself. Pearl and Dean cannot exclude
others from the manufacture, sale and commercial use over the light boxes on the sole basis of its
copyright, certificated over the technical drawings. It cannot be the intention of the law that the right of
exclusivity would be granted for a longer time through the simplified procedure of copyright registration
with the National Library, without the rigor of defending the patentability of its invention before the
IPO and the public.

On the other hand, there has been no evidence that Pearl and Deans use of Poster Ads was distinctive
or well known. Poster Ads was too generic a name to identify it to a specific company or entity.
Poster Ads was generic and incapable of being used as a trademark because it was used in the field of
poster advertising, the very business engaged by Pearl and Dean. Furthermore, Pearl and Deans
exclusive right to the use of Poster Ads is limited to what is written in its certificate of registration.
Shoemart cannot be held liable for the infringement of the trademark.

MIRPURI V. CA 318 SCRA 516G.R. NO. 114508

Facts:

Lolita Escobar applied for the registration of the trademark Barbizon for her products such as
brassieres and ladies undergarments. Respondent Barbizon Corporation, an American corporation,
opposed alleging that petitioners mark is confusingly similar to its own trademark Barbizon. Escobars
application was given due course and her trademark was registered. Later, Escobar assigned all her
rights to petitioner Mirpuri who failed to file an Affidavit of Use resulting in the cancellation of the
trademark. Petitioner then applied for registration of the trademark to which respondent Barbizon again
opposed, now invoking the protection under Article 6bis of the Paris Convention. The Director of Patents
declaring respondents opposition was already barred, petitioners application was given due course. CA
reversed the judgment.

Issue:

Whether or not respondent may invoke the protection under Article 6bis of the Paris Convention.
Ruling: YES.

The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris
Convention, is a multilateral treaty that seeks to protect industrial property consisting of patents, utility
models, industrial designs, trademarks, service marks, trade names and indications of source or
appellations of origin, and at the same time aims to repress unfair competition. The Convention is
essentially a compact among various countries which, as members of the Union, have pledged to accord
to citizens of the other member countries trademark and other rights comparable to those accorded
their own citizens by their domestic laws for an effective protection against unfair competition. Art.
6bis is a self-executing provision and does not require legislative enactment to give it effect in the
member country. It may be applied directly by the tribunals and officials of each member country by the
mere publication or proclamation of the Convention, after its ratification according to the public law of
each state and the order for its execution.

The Philippines and the United States of America have acceded to the WTO Agreement. Conformably,
the State must reaffirm its commitment to the global community and take part in evolving a new
international economic order at the dawn of the new millennium.

Emerald Garment Manufacturing Corporation vs CA 251 SCRA 600 (G.R. No. 100098)

Fact

In 1981, H.D Lee Co., Inc., a foreign company, filed an opposition against the trademark application of
Emerald Garment. Allegedly, the trademark Stylistic Mr. Lee sought to be applied for by Emerald
Garment is too confusingly similar with the brand Lee which has for its variations Lee Riders, Lee
Sures, and Lee Leens. The Director of Patents as well as the Court of Appeals ruled in favor of H.D.
Lee Co.

Issue:

Whether or not the decision of the Court of Appeals is correct.

Ruling: NO.

The Supreme Court considered that the trademarks involved as a whole and ruled that Emerald
Garments STYLISTIC MR. LEE is not confusingly similar to H.D. Lees LEE trademark. The trademark
Stylistic Mr. Lee, although on its label the word LEE is prominent, the trademark should be
considered as a whole and not piecemeal. The dissimilarities between the two marks become
conspicuous, noticeable and substantial enough to matter especially in the light of the following
variables that must be factored in.

First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not your
ordinary household items like catsup, soysauce or soap which are of minimal cost. Maong pants or jeans
are not inexpensive. Accordingly, the casual buyer is predisposed to be more cautious and discriminating
in and would prefer to mull over his purchase. Confusion and deception, then, is less likely.
Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does not ask
the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even an Armani. He is,
therefore, more or less knowledgeable and familiar with his preference and will not easily be distracted.

Finally, in line with the foregoing discussions, more credit should be given to the ordinary purchaser.
Cast in this particular controversy, the ordinary purchaser is not the completely unwary consumer but
is the ordinarily intelligent buyer considering the type of product involved.

There is no cause for the Court of Appeals apprehension that Emerald Garments products might be
mistaken as another variation or line of garments under H.D. Lees LEE trademark. As one would
readily observe, H.D. Lees variation follows a standard format LEERIDERS, LEESURES and
LEELEENS. It is, therefore, improbable that the public would immediately and naturally conclude that
petitioners STYLISTIC MR. LEE is but another variation under H.D. Lees LEE mark.

The issue of confusing similarity between trademarks is resolved by considering the distinct
characteristics of each case. In the present controversy, taking into account these unique factors, we
conclude that the similarities in the trademarks in question are not sufficient as to likely cause deception
and confusion tantamount to infringement.

Further, H.D. Lee failed to prove in court that it had prior actual commercial use of its LEE trademark
in the Philippines. H.D. Lee did show certificates of registrations for its brand but registration is not
sufficient. Actual use in commerce in the Philippines is an essential prerequisite for the acquisition of
ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine Trademark Law (R.A. No. 166).

A rule widely accepted and firmly entrenched because it has come down through the years is that actual
use in commerce or business is a prerequisite in the acquisition of the right of ownership over a
trademark.

It would seem quite clear that adoption alone of a trademark would not give exclusive right thereto.
Such right grows out of their actual use. Adoption is not use. One may make advertisements, issue
circulars, give out price lists on certain goods; but these alone would not give exclusive right of use. For
trademark is a creation of use. The underlying reason for all these is that purchasers have come to
understand the mark as indicating the origin of the wares. Flowing from this is the traders right to
protection in the trade he has built up and the goodwill he has accumulated from use of the trademark.
Registration of a trademark, of course, has value: it is an administrative act declaratory of a pre-existing
right. Registration does not, however, perfect a trademark right.

Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc. G.R. No. 167715, 17 November 2010

Facts:

Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin. It is marketed under the
brand name Unasyn. Sometime in January and February 2003, Pfizer discovered that Pharmawealth
submitted bids for the supply of Sulbactam Ampicillin to several hospitals without the Pfizers consent.
Pfizer then demanded that the hospitals cease and desist from accepting such bids. Pfizer also
demanded that Pharmawealth immediately withdraw its bids to supply Sulbactam Ampicillin.
Pharmawealth and the hospitals ignored the demands.
Pfizer then filed a complaint for patent infringement with a prayer for permanent injunction and
forfeiture of the infringing products. A preliminary injunction effective for 90 days was granted by the
IPOs Bureau of Legal Affairs (IPO-BLA). Upon expiration, a motion for extension filed by Pfizer was
denied. Pfizer filed a Special Civil Action for Certiorari in the Court of Appeals (CA) assailing the denial.

While the case was pending in the CA, Pfizer filed with the Regional Trial Court of Makati (RTC) a
complaint for infringement and unfair competition, with a prayer for injunction. The RTC issued a
temporary restraining order, and then a preliminary injunction.

Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum shopping.
Nevertheless, the CA issued a temporary restraining order. Pharmawealth again filed a motion to
dismiss, alleging that the patent, the main basis of the case, had already lapsed, thus making the case
moot, and that the CA had no jurisdiction to review the order of the IPO-BLA because this was granted
to the Director General. The CA denied all the motions. Pharmawealth filed a petition for review on
Certiorari with the Supreme Court.

Issues:

a) Can an injunctive relief be issued based on an action of patent infringement when the patent
allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the
Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly different causes of action
and yet pray for the same relief?

Ruling:

a) No. The provision of R.A. 165, from which the Pfizers patent was based, clearly states that "[the]
patentee shall have the exclusive right to make, use and sell the patented machine, article or product,
and to use the patented process for the purpose of industry or commerce, throughout the territory of
the Philippines for the term of the patent; and such making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent."

Clearly, the patentees exclusive rights exist only during the term of the patent. Since the patent was
registered on 16 July 1987, it expired, in accordance with the provisions of R.A. 165, after 17 years, or 16
July 2004. Thus, after 16 July 2004, Pfizer no longer possessed the exclusive right to make, use, and sell
the products covered by their patent. The CA was wrong in issuing a temporary restraining order after
the cut-off date.

b) According to IP Code, the Director General of the IPO exercises exclusive jurisdiction over decisions of
the IPO-BLA. The question in the CA concerns an interlocutory order, and not a decision. Since the IP
Code and the Rules and Regulations are bereft of any remedy regarding interlocutory orders of the IPO-
BLA, the only remedy available to Pfizer is to apply the Rules and Regulations suppletorily. Under the
Rules, a petition for certiorari to the CA is the proper remedy. This is consistent with the Rules of Court.
Thus, the CA had jurisdiction.
c) Yes. Forum shopping is defined as the act of a party against whom an adverse judgment has been
rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other
than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one or the other court would make a
favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such parties that represent the
same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being
founded on the same facts; (c) identity of the two preceding particulars, such that any judgment
rendered in the other action will, regardless of which party is successful, amount to res judicata in the
action under consideration. This instance meets these elements.

The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the rights allegedly
violated and the acts allegedly violative of such rights are identical, regardless of whether the patents on
which the complaints were based are different. In both cases, the ultimate objective of Pfizer was to ask
for damages and to permanently prevent Pharmawealth from selling the contested products.
Relevantly, the Supreme Court has decided that the filing of two actions with the same objective, as in
this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a decision in one
case will necessarily amount to res judicata in the other action.

CHING V. SALINAS, SR. (G.R. NO. 161295)

Facts:

Petitioner Ching is a maker and manufacturer of a utility model, Leaf Spring Eye Bushing for Automobile,
for which he holds certificates of copyright registration. Petitioners request to the NBI to apprehend
and prosecute illegal manufacturers of his work led to the issuance of search warrants against
respondent Salinas, alleged to be reproducing and distributing said models in violation of the IP Code.
Respondent moved to quash the warrants on the ground that petitioners work is not artistic in nature
and is a proper subject of a patent, not copyright. Petitioner insists that the IP Code protects a work
from the moment of its creation regardless of its nature or purpose. The trial court quashed the
warrants. Petitioner argues that the copyright certificates over the model are prima facie evidence of its
validity. CA affirmed the trial courts decision.

Issues:

(1) Whether or not petitioners model is an artistic work subject to copyright protection.

(2) Whether or not petitioner is entitled to copyright protection on the basis of the certificates of
registration issued to it.
Ruling:

(1) NO. As gleaned from the specifications appended to the application for a copyright certificate filed by
the petitioner, the said Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion are merely
utility models. As gleaned from the description of the models and their objectives, these articles are
useful articles which are defined as one having an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information. Plainly, these are not literary or artistic
works. They are not intellectual creations in the literary and artistic domain, or works of applied art.
They are certainly not ornamental designs or one having decorative quality or value. Indeed, while
works of applied art, original intellectual, literary and artistic works are copyrightable, useful articles and
works of industrial design are not. A useful article may be copyrightable only if and only to the extent
that such design incorporates pictorial, graphic, or sculptural features that can be identified separately
from, and are capable of existing independently of the utilitarian aspects of the article. In this case, the
bushing and cushion are not works of art. They are, as the petitioner himself admitted, utility models
which may be the subject of a patent.

(2) NO. No copyright granted by law can be said to arise in favor of the petitioner despite the issuance
of the certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle
Bearing Cushion. Indeed, in Joaquin, Jr. v.Drilon and Pearl & Dean (Phil.), Incorporated v. Shoemart,
Incorporated, the Court ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a pre-existing right regulated by it. Being a statutory grant, the
rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the statute. Accordingly, it can
cover only the works falling within the statutory enumeration or description.

Ownership of copyrighted material is shown by proof of originality and copyrightability. To discharge his
burden, the applicant may present the certificate of registration covering the work or, in its absence,
other evidence. A copyright certificate provides prima facie evidence of originality which is one element
of copyright validity. It constitutes prima facie evidence of both validity and ownership and the validity
of the facts stated in the certificate.

Roberto Del Rosario vs Court of Appeals 255 SCRA 152 G.R. No. 115106 March 15, 1996

Facts:

Roberto Del Rosario was granted a patent for his innovation called the Minus One karaoke. The patent
was issued in June 1988 for five years and was renewed in November 1991 for another five years as
there were improvement introduced to his minus one karaoke. In 1993, while the patent was still
effective, Del Rosario sued Janito Corporation, a Japanese company owned by Janito Cua, for allegedly
infringing upon the patent of Del Rosario. Del Rosario alleged that Janito was manufacturing a sing-along
system under the brand miyata karaoke which is substantially, if not identical, the same to his minus
one karaoke. The lower court ruled in favor of Del Rosario but the Court of Appeals ruled that there
was no infringement because the karaoke system was a universal product manufactured, advertised,
and marketed all over the world long before Del Rosario was issued his patents.

Issue:

Whether or not the Court of Appeals erred in its ruling.

Ruling: YES

The Patent Law expressly acknowledges that any new model of implements or tools of any industrial
product even if not possessed of the quality of invention but which is of practical utility is entitled to a
patent for utility model. Here, there is no dispute that the letters patent issued to Del Rosario are for
utility models of audio equipment. It is elementary that a patent may be infringed where the essential or
substantial features of the patented invention are taken or appropriated, or the device, machine or
other subject matter alleged to infringe is substantially identical with the patented invention. In order to
infringe a patent, a machine or device must perform the same function, or accomplish the same result
by identical or substantially identical means and the principle or mode of operation must be
substantially the same. In the case at bar, miyata karaoke was proven to have substantial if not identical
functionality as that of the minus one karaoke which was covered by the second patent issued to Del
Rosario. Further, Janito failed to present competent evidence that will show that Del Rosarios
innovation is not new.

Manzano vs. CA 278 SCRA 688

Facts:

Angelita Manzano filed PPO an action for the cancellation of Letters Patent for agas burner registered in
the name of respondent Melecia Madolaria who subsequently assigned the letters patent to New
United Foundry and Manufacturing Corporation (UNITED FOUNDRY, for brevity). Petitioner alleged
that (a) the utility model covered by the letters patent, in this case, an LPG gas burner, was not
inventive, new or useful; (b)the specification of the letters patent did not comply with the requirements
of Sec. 14,RA No. 165, as amended; (c) respondent Melecia Madolaria was not the original, true and
actual inventor nor did she derive her rights from the original, true and actual inventor of the utility
model covered by the letters patent; and, (d) the letters patent was secured by means of fraud or
misrepresentation.

Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a helper in the
UNITED FOUNDRY where respondent Melecia Madolaria used to be affiliated with from 1965 to 1970;
that Ong helped in the casting of an LPG burner which was the same utility model of a burner and that
after her husbands separation from the shop she organized Besco Metal Manufacturing (BESCO METAL,
for brevity) for the casting of LPG burners one of which had the configuration, form and component
parts similar to those being manufactured by UNITED FOUNDRY. Petitioner presented two (2) other
witnesses, namely, her husband Ong Bun Tua and Fidel Francisco. Private respondent, on the other
hand, presented only one witness, Rolando Madolaria, who testified, among others, that he was the
General Supervisor of the UNITED FOUNDRY. Director of Patents Cesar C. Sandiego denied the petition
for cancellation and holding that the evidence of petitioner was not able to establish convincingly that
the patented utility model of private respondent was anticipated.

Petitioner elevated the decision of the Director of Patents to the Court of Appeals which affirmed the
decision of the Director of Patents. Hence, this petition for review on certiorari.

Issue:

Whether the dismissal is proper where the patent applied for has no substantial difference between
the model to be patented and those sold by petitioner.

Ruling:

The element of novelty is an essential requisite of the patentability of an invention or discovery. If a

device or process has been known or used by others prior to its invention or discovery by the applicant,
an application for a patent therefor should be denied; and if the application has been granted, the court,
in a judicial proceeding in which the validity of the patent is drawn in question, will hold it void and
ineffective. It has been repeatedly held that an invention must possess the essential elements of
novelty, originality and precedence, and for the patentee to be entitled to the protection the invention
must be new to the world.

However, the validity of the patent issued by the Philippine Patent Office in favor of private respondent
and the question over the inventiveness, novelty and usefulness of the improved model of the LPG
burner are matters which are better determined by the Patent Office. The technical staff of the
Philippine Patent Office composed of experts in their field has by the issuance of the patent in question
accepted private respondents model of gas burner as a discovery. There is a presumption that the
Office has correctly determined the patentability of the model and such action must not be interfered
with in the absence of competent evidence to the contrary. The rule is settled that the findings of fact of
the Director of Patents, especially when affirmed by the Court of Appeals, are conclusive on this Court
when supported by substantial evidence. Petitioner has failed to show compelling grounds for a
reversal of the findings and conclusions of the Patent Office and the Court of Appeals.

NOTE: The primary purpose of the patent system is not the reward of the individual but the
advancement of the arts and sciences. The function of a patent is to add to the sum of useful
knowledge and one of the purposes of the patent system is to encourage dissemination of
information concerning discoveries and inventions.

Maguan Vs. CA 146 SCRA 107

Facts:

Petitioner is doing business under the firm and style of SWAN MANUFACTURING" while private
respondent is likewise doing business under the firm name and style of "SUSANA LUCHAN POWDER
PUFFMANUFACTURING. And holder petitioner informed private respondent that the powder puffs the
latter is manufacturing and selling to various enterprises particularly those in the cosmetics industry,
resemble Identical or substantially Identical powder puffs of which the former is a patent holder under
Registration Certification Nos. Extension UM-109, ExtensionUM-110 and Utility Model No. 1184;
petitioner explained such production and sale constitute infringement of saidpatents and therefore its
immediate discontinuance is demanded, otherwise it will be compelled to take judicial action

Private respondent replied stating that her products are different and countered that petitioner's
patents are void because the utility models applied for were not new and patentable and the person to
whom the patents were issued was not the true and actual author nor were her rights derived from such
author. Petitioner filed a complaint for damages with injunction and preliminary injunction against
private respondent with the then Court of First Instance of Rizal, the trial court issued an Order granting
the preliminary injunction prayed for by petitioner. Consequently, the corresponding writ was
subsequently issued. In challenging these Orders private respondent filed a petition for certiorari with
the respondent court but was denied. Hence this petition.

Issues:

a) Whether or not in an action for infringement the Court aquo had jurisdiction to determine the
invalidity of the patents at issue which invalidity was still pending consideration in the patent office.

b) Whether or not the Court a quo committed grave abuse of discretion in the issuance of a writ of
preliminary injunction.

c) Whether or not certiorari is the proper remedy

Ruling:

a) The first issue has been laid to rest in a number of cases where the Court ruled that "When a
patent is sought to enforced, the questions of invention, novelty or prior use, and each of them,
are open to judicial examination.
"Under the present Patent Law, there is even less reason to doubt that the trial court has
jurisdiction to declare the patents in question invalid. A patentee shall have the exclusive right
to make, use and sell the patented article or product and the making, using, or selling by any
person without the authorization of the patentee constitutes infringement of the patent (Sec.
37, R.A. 165). Any patentee whose rights have been infringed upon may bring an action before
the proper CFI now (RTC) and to secure an injunction for the protection of his rights

b) The burden of proof to substantiate a charge of infringement is with the plaintiff. But where the
plaintiff introduces the patent in evidence, and the same is in due form, there is created a
prima facie presumption of its correctness and validity. The decision of the Commissioner (now
Director) of Patent in granting the patent is presumed to be correct. The burden of going
forward with the evidence (burden of evidence) then shifts to the defendant to overcome by
competent evidence this legal presumption. The question then in the instant case is whether or
not the evidence introduced by private respondent herein is sufficient to overcome that
presumption.
 After a careful review of the evidence consisting of 64 exhibits and oral testimonies of five
witnesses presented by private respondents before the Court of First Instance before the Order
of preliminary injunction was issued as well as those presented by the petitioner, respondent
Court of Appeals was satisfied that there is a prima facie showing of a fair question of invalidity
of petitioner's patents on the ground of lack of novelty. As pointed out by said appellate court
said evidence appeared not to have been considered at all by the court a quo for alleged lack of
jurisdiction, on the mistaken notion that such question in within the exclusive jurisdiction of the
patent office. It has been repeatedly held that an invention must possess the essential elements
of novelty, originality and precedence and for the patentee to be entitled to protection, the
invention must be new to the world. Accordingly, a single instance of public use of the invention
by a patentee for more than two years (now for more than one year only under Sec. 9 of the
Patent Law) before the date of his application for his patent, will be fatal to, the validity of the
patent when issued.

It will be noted that the validity of petitioner's patents is in question for want of novelty. Private
respondent contends that powder puffs Identical in appearance with that covered by
petitioner's patents existed and were publicly known and used as early as 1963long before
petitioner was issued the patents in question. (List of Exhibits, Rollo, pp. 194-199). As correctly
observedby respondent Court of Appeals, "since sufficient proofs have been introduced in
evidence showing a fair question of the invalidity of the patents issued for such models, it is but
right that the evidence be looked into, evaluated and determined on the merits so that the
matter of whether the patents issued were in fact valid or not may be resolved."(Rollo, pp. 286-
287).

All these notwithstanding, the trial court nonetheless issued the writ of preliminary injunction
which under the circumstances should be denied.

For failure to determine first the validity of the patents before aforesaid issuance of the writ, the
trial court failed to satisfy the two requisites necessary if an injunction is to issue, namely: the
existence of the right to be protected and the violation of said right. (Buayan Cattle Co.,Inc. v.
Quintillan, 128 SCRA 276)

c) Under the above established principles, it appears obvious that the trial court committed
a grave abuse of discretion which makes certiorari the appropriate remedy.
As found by respondent Court of Appeals, theinjunctive order of the trial court is of so general a
tenor thatpetitioner may be totally barred from the sale of any kind of powder puff. Under the
circumstances, respondent appellatecourt is of the view that ordinary appeal is obviously
inadequate.

Godines vs. CA (G.R. NO. 97343)

Facts:
Respondent SV-Agro Industries acquired a letter patent issued to one Magdalena Villaruz which covers a
utility model for hand tractor or power tiller by virtue of a deed of assignment executed by the latter in
its favor. Respondent after suffering a decline in sales of the patented power tillers, investigated and
discovered that petitioner Godines was manufacturing the same power tillers as they have. Respondent
thus filed a complaint for patent infringement and unfair competition against petitioner Godines. The
trial court held petitioner liable for infringement. CA affirmed.

Issue:

Whether or not petitioners products infringe upon the patent of respondent SV-Agro.

Ruling: YES.

Tests have been established to determine infringement. These are (a) literal infringement; and (b) the
doctrine of equivalents. In using literal infringement as a test, . . . resort must be had, in the first
instance, to the words of the claim. If accused matter clearly falls within the claim, infringement is made
out and that is the end of it. To determine whether the particular item falls within the literal meaning
of the patent claims, the court must juxtapose the claims of the patent and the accused product within
the overall context of the claims and specifications, to determine whether there is exact identity of all
material elements. It appears from the observation of the trial court that these claims of the patent and
the features of the patented utility model were copied by petitioner: In appearance and form, both the
floating power tillers of the defendant and the turtle power tiller of the plaintiff are virtually the same.
Viewed from any perspective or angle, the power tiller of the defendant is identical and similar to that of
the turtle power tiller of plaintiff in form, configuration, design and appearance. The parts or
components thereof are virtually the same. In operation, the floating power tiller of the defendant
operates also in similar manner as the turtle power tiller of plaintiff.

Petitioners argument that his power tillers were different from private respondents is that of a
drowning man clutching at straws. Recognizing that the logical fallback position of one in the place of
defendant is to aver that his product is different from the patented one, courts have adopted the
doctrine of equivalents. Thus, according to this doctrine, (a)n infringement also occurs when a device
appropriates a prior invention by incorporating its innovative concept and, albeit with some
modification and change, performs substantially the same function in substantially the same way to
achieve substantially the same result. In this case, the trial court observed: But a careful examination
between the two power tillers will show that they will operate on the same fundamental principles.

Smith Kline Beckman Corporation vs Court of Appeals 409 SCRA 33 G. R. No. 126627 August 14,
2003

Facts

Smith Kline is a US corporation licensed to do business in the Philippines. In 1981, a patent was issued to
it for its invention entitled Methods and Compositions for Producing Biphasic Parasiticide Activity Using
Methyl 5 Propylthio-2-Benzimidazole Carbamate. The invention is a means to fight off gastrointestinal
parasites from various cattles and pet animals.

Tryco Pharma is a local corporation engaged in the same business as Smith Kline.
Smith Kline sued Tryco Pharma because the latter was selling a veterinary product called Impregon
which contains a drug called Albendazole which fights off gastro-intestinal roundworms, lungworms,
tapeworms and fluke infestation in carabaos, cattle and goats.

Smith Kline is claiming that Albendazole is covered in their patent because it is substantially the same as
methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since both of them are meant to
combat worm or parasite infestation in animals. And that Albendazole is actually patented under Smith
Kline in the US.

Tryco Pharma averred that nowhere in Smith Klines patent does it mention that Albendazole is present
but even if it were, the same is unpatentable.

Smith Kline thus invoked the doctrine of equivalents, which implies that the two substances
substantially do the same function in substantially the same way to achieve the same results, thereby
making them truly identical for in spite of the fact that the word Albendazole does not appear in Tryco
Paharmas letters of patent, it has ably shown by evidence its sameness with methyl 5 propylthio-2-
benzimidazole carbamate.

Issue:

Whether or not there is patent infringement in this cas

Ruling: NO

Smith Kline failed to prove that Albendazole is a compound inherent in the patented invention.
Nowhere in the patent is the word Albendazole found. When the language of its claims is clear and
distinct, the patentee is bound thereby and may not claim anything beyond them. Further, there was a
separate patent for Albendazole given by the US which implies that Albendazole is indeed separate and
distinct from the patented compound here.

A scrutiny of Smith Klines evidence fails to prove the substantial sameness of the patented compound
and Albendazole. While both compounds have the effect of neutralizing parasites in animals, identity of
result does not amount to infringement of patent unless Albendazole operates in substantially the same
way or by substantially the same means as the patented compound, even though it performs the same
function and achieves the same result. In other words, the principle or mode of operation must be the
same or substantially the same.

The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the
patentee having the burden to show that all three components of such equivalency test are met.

Creser Precision Systems Inc. v CA and Floro International Co. GR NO. 118708, February 2, 1998

Facts:

Respondent was granted by the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) a
Letter of patent for its aerial fuze on January 23, 1990. Sometime in 1993, respondent discovered that
the petitioner submitted samples of its patented aerial fuze to the AFP for testing claiming to be his
own. To protect its right, respondent sent letter of warning to petitioner on a possible court action
should it proceed its testing by the AFP. In response the petitioner filed a complaint for injunction and
damages arising from alleged infringement before the RTC asserting that it is the true and actual
inventor of the aerial fuze which it developed on 1981 under the Self Reliance Defense Posture Program
of the AFP. It has been supplying the military of the aerial fuze since then and that the fuze of the
respondent is similar as that of the petitioner. Petitioner prayed for restraining order and injunction
from marketing, manufacturing and profiting from the said invention by the respondent. The trial court
ruled in favor of the petitioner citing the fact that it was the first to develop the aerial fuze since
1981 thsu it concludes that it is the petitioners aerial fuze that was copied by the respondent.
Moreover, the claim of respondent is solely based on its letter of patent which validity is being
questioned. On appeal, respondent argued that the petitioner has no cause of action since he has no
right to assert there being no patent issued to his aerial fuze. The Court of Appeals reversed the decision
of the trial court dismissing the complaint of the petitioner. It was the contention of the petitioner that
it can file under Section 42 of the Patent Law an action for infringement not as a patentee but as an
entity in possession of a right, title or interest to the patented invention. It theorizes that while the
absence of a patent prevents one from lawfully suing another for infringement of said patent, such
absence does not bar the true and actual inventor of the patented invention from suing another in the
same nature as a civil action for infringement.

Issue:

Whether or not the petitioner has the right to assail the validity of the patented work of the
respondent?

Ruling: No.

The court finds the argument of the petitioner untenable. Section 42 of the Law on Patent (RA 165)
provides that only the patentee or his successors-in-interest may file an action against infringement.
What the law contemplates in the phrase anyone possessing any right, title or interest in and to the
patented invention refers only to the patentees successors-in-interest, assignees or grantees since the
action on patent infringement may be brought only in the name of the person granted with the patent.
There can be no infringement of a patent until a patent has been issued since the right one has over the
invention covered by the patent arises from the grant of the patent alone. Therefore, a person who has
not been granted letter of patent over an invention has not acquired right or title over the invention and
thus has no cause of action for infringement. Petitioner admitted to have no patent over his
invention. Respondents aerial fuze is covered by letter of patent issued by the Bureau of Patents thus it
has in his favor not only the presumption of validity of its patent but that of a legal and factual first and
true inventor of the invention.

Roberto Del Rosario vs Court of Appeals 255 SCRA 152 G.R. No. 115106 March 15, 1996
 (Who can file for infringement)

COPYRIGHT

Bayanihan Music vs. BMG GR 166337 march 7,2005

Facts

Chan entered into a contract with Bayanihan, assigning all his rights, interests and participation to
Bayanihan for his song Can We Just Stop and Talk a While and after that, for the song Afraid for Love
to Fade. On the basis of such assignment, Bayanihan applied for and was granted by the National
Library a Certificate of Copyright Registration for each of the 2 musical compositions. Chan authorized
BMG Records to record and distribute both compositions in a then recently released album of Lea
Salonga without the knowledge of Bayanihan. Bayanihan informed Chan and BMG of its existing
copyrights over the songs and the alleged violation of such rights by the respondents, demanding to
settle the matter but no settlement was made.

Bayanihan filed before the Quezon City RTC a complaint against Chan and BMG for violation of Sec. 216,
RA 8293parying for the issuance of a TRO and/or writ of preliminary injunction enjoining BMG from
further recording an distributing the subject musical compositions in whatever form or musical
products, and Chan from further granting any authority to record and distribute the same musical
compositions.

BMG countered that the acts of recording and publication has been done and a TRO or injunction would
be moot and that there is no clear showing that Bayanihan will be greatly damaged by the refusal of the
prayer for TRO/injunction. BMG also pleaded a cross-claim against Chan for violation of his warranty
that his compositions are free from claims of third persons and counterclaim for damages against
Bayanihan.

Chan alleged that he never intended to divest himself of all his rights and interest over the musical
composition; that the contracts entered into with Bayanihan were mere music publications giving
Bayanihan as Assignees, the power to administer his copyright over his 2 songs and act as the exclusive
publisher; that he was not cognizant of application and grant of copyright certification over his 2 songs
to Bayanihan; and that Bayanihan was remiss of its obligations under the contract because it failed to
effectively advertise the songs for almost 20 years. Hence, the rescission of the contracts in 1997. Chan
also filed a counterclaim for damages against Bayanihan. RTC denied the TRO as well as the injunction.
CA affirmed RTC ruling.

Issue:

When is the creator entitled to copyright protection?

Ruling:
Unquestionably, Chan being the composer and author of the lyrics of the 2 songs is protected by the
mere fact alone that he is the creator thereof, conformably with RA 8293, Sec. 172.2: Works are
protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as
of their content and quality and purpose.

Also, as provided in the contracts Chan entered into with Bayanihan was the agreement that in the
event the publisher fails to use in any manner within 2 years any of the compositions covered by the
contract, the composition may be released in favor of the writer and excluded from the contract. The
publisher shall execute the necessary release in writing in favor of the writer upon the request of the
writer. It appears that the 2 contracts already expired, there being no allegation or proof that Bayanihan
ever made use of the compositions within the 20year period agreed upon.

Anent the copyrights obtained on the basis of the contracts, suffice it to say that such purported
copyrights are not presumed to subsist in accordance with Sec. 218, RA 8293 because Chan had put in
issue the existence thereof.

Unilever Philippines, Inc. vs. CA and Procter and Gamble Philippines GR 119280 August 10,2006

Facts:

On August 24, 1994, private respondent Procter and Gamble Phils., Inc. filed a complaint for injunction
with damages and a prayer for temporary restraining order and/or writ of preliminary injunction against
petitioner Unilever, alleging that

As early as 1982, a P&G subsidiary in Italy used a key visual in the advertisement of its laundry detergent
and bleaching products. This key visual known as the "double-tug" or "tac-tac" demonstration shows the
fabric being held by both hands and stretched sideways.The "tac-tac" was conceptualized for P&G by
the advertising agency Milano and Grayof Italy in 1982. The "tac-tac" was used in the same year in an
advertisement entitled "All aperto" to demostrate the effect on fabrics of one of P&GPs products, a
liquid bleach called "Ace."

Since then, P&G has used the "tac-tac" key visual in the advertisement of its products. In fact, in 1986, in
Italy, the "tac-tac" key visual was used in the television commercial for "Ace" entitled "Kite.

P&G has used the same distinctive "tac-tac" key visual to local consumers in the Philippines.

Substantially and materially imitating the aforesaid "tac-tac" key visual of P&GP and in blatant disregard
of P&GPs intellectual property rights, Unilever on 24 July 1993 started airing a 60 second television
commercial "TVC" of its "Breeze Powerwhite" laundry product called "Porky." The said TVC included a
stretching visual presentation and sound effects almost [identical] or substantially similar to P&GPs
"tac-tac" key visual.

On July 15, 1994, P&GP aired in the Philippines, the same "Kite" television advertisement it used in Italy
in 1986, merely dubbing the Italian language with Filipino for the same produce "Ace" bleaching liquid
which P&GPnow markets in the Philippines.
On August 1, 1994, Unilever filed a Complaint with the Advertising Board of the Philippines to prevent
P&GP from airing the "Kite" television advertisement.

On August 26, 1994, Judge Gorospe issued an order granting a temporary restraining order and setting it
for hearing on September 2, 1994 for Unilever to showcause why the writ of preliminary injunction
should not issue. During the hearing on September 2, 1994, P&GP received Unilevers answer with
opposition to preliminary injunction. P&GP filed its reply to Unilevers opposition to a preliminary
injunction on September 6, 1994.

On September 19, 1994, P&GP received a copy of the order dated September 16, 1994 ordering the
issuance of a writ of preliminary injunction and fixing a bond of P100,000. On the same date, P&GP filed
the required bond issued by Prudential Guarantee and Assurance, Inc. Petitioner appealed to the CA.
the CA rendered its decision finding that Judge Gorospe did not act with grave abuse of discretion in
issuing the disputed order. The petition for certiorari was thus dismissed for lack of merit.

HELD: After a careful perusal of the records, we agree with the CA and affirm its decision in toto:

Petitioner does not deny that the questioned TV advertisements are substantially similar to P&GPs
"double tug" or "tac-tac" key visual. However, it submits that P&GPis not entitled to the relief
demanded, which is to enjoin petitioner from airing said TV advertisements, for the reason that
petitioner has Certificates of Copyright Registration for which advertisements while P&GP has none with
respect to its "double-tug" or "tac-tac" key visual. In other words, it is petitioners contention that P&GP
is not entitled to any protection because it has not registered with the National Library the very TV
commercials which it claims have been infringed by petitioner. is not entitled to any protection because
it has not registered with the National Library the very TV commercials which it claims have been
infringed by petitioner.

We disagree. Section 2 of PD 49 stipulates that the copyright for a work or intellectualcreation subsists
from the moment of its creation. Accordingly, the creator acquires copyright for his work right upon its
creation. Contrary to petitioners contention, theintellectual creators exercise and enjoyment of
copyright for his work and the protection given by law to him is not contingent or dependent on any
formality or registration. Therefore, taking the material allegations of paragraphs 1.3 to 1.5 of P&GPs
verified Complaint in the context of PD 49, it cannot be seriously doubted that at least, for purposes of
determining whether preliminary injunction should issue during the pendency of the case, P&GP is
entitled to the injunctive relief prayed for in its Complaint.

The third ground is patently unmeritorious. As alleged in the Complaint P&GP is a subsidiary of Procter
and Gamble Company (P&G) for which the "double tug" or "tac-tac" key visual was conceptualized or
created. In that capacity, P&GP used the said TV advertisement in the Philippines to promote its
products. As such subsidiary, P&GP is definitely within the protective mantle of the statute (Sec. 6, PD
49).

ABS-CBN vs Gozon GR 195956 March 11, 2015

Facts:
On August 13, 2004, petitioner ABS-CBN filed a criminal complaint against respondent GMA for (alleged)
act of copyright infringement under Sections 177 and 211 of the Intellectual Property Code (RA 8293, as
amended), because the respondent aired footage of the arrival and homecoming of OFW Angelo dela
Cruz at NAIA from Iraq without the petitioner's consent. ABS-CBN stated that it has an agreement with
Reuter's that the petition will contribute news and content that it owns and makes to Reuters in
exchange of the latter's news and video material, and Reuters will ensure that ABS-CBN's materials
cannot be aired in the country.

The respondent was a subscriber of Reuter's and CNN live feeds. After it received the live feed of Angelo
Dela Cruz's arrival and homecoming from Reuter's, it immediately aired the video from that news feed.
The respondent alleged that its news staff was not aware that there was (a news embargo) agreement
between ABSCBN and Reuters. Respondent alleged that it was not also aware that it aired petitioner's
footage.

Assistant City Prosecutor Dindo Venturanza issued resolution on 3 December 2004 which found
probable cause to indict Dela Pea-Reyes and Manalastas. The respondents appealed the Prosccutor's
resolution before DOJ. DOJ Secretary Raul M. Gonzalez ruled in favor of respondents in his resolution
dated 1 August 2005 and held that good faith may be raised as a defense in the case.

Meanwhile, DOJ Acting Secretary Alberto C. Agra issued a resolution on 29 June 2010 which reversed
Sec. Gonzalez's resolution and found probable cause to charge Dela Pea-Reyes, Manalastas, as well as
to indict Gozon, Duavit, Jr., Flores, and Soho for violation of the Intellectual Property Code (due to
copyright infringement).

The Court of Appeals rendered a decision on 9 November 2010, which granted the Petition for Certiorari
to reverse and set aside DOJ Sec. Alberto Agra's resolution and a prayer for issuance of a temporary
restraining order and/or Writ of Preliminary Injunction.

Issue

Is there probable cause to find respondents to be held liable criminally for the case of copyright
infringement under the Intellectual Property Law (RA 8293, as amended)?

Ruling:

The Supreme Court PARTIALLY GRANTED ABS-CBNs petition and ordered RTC Q.C. Branch 93 to
continue with the criminal proceedings against Grace Dela PeaReyes and John Oliver Manalastas due
to copyright infringement.

The other respondents, Atty. Felipe Gozon, Gilberto Duavit Jr., Marissa L. Flores, and Jessica A. Soho
were held not liable for the (criminal) act of copyright infringement. The Court held that their mere
membership in GMA7's Board of Directors does not mean that they have knowledge, approval, or
participation in the criminal act of copyright infringement., as there is a need for their direct/active
participation in such act. Also, there was lack of proof that they actively participated or exercised moral
ascendancy over Manalastas and Dela Cruz-Pena.

Contrary to GMAs contention, the Supreme Court deemed GMA's mere act of rebroadcast of ABS-CBNs
news footage (arrival and homecoming of OFW Angelo dela Cruz at NAIA from Iraq last 22 July 2004) for
2 mins and 40 secs.without the latter's authority creates probable cause to find GMA's news personnel
Manalastas and Dela Pea-Reyes criminally liable for violating provisions of Intellectual Property Code
(Section 216-217 of RA 8293, as amended) that imposes strict liability for copyright infringement, since
they have not been diligent in their functions to prevent that footage from being aired on television.
They knew that there would be consequences in carrying ABS-CBNs footage in their broadcast which
is why they allegedly cut the feed from Reuters upon seeing ABS-CBNs logo and reporter.

The difference of an act mala in se and mala prohibita was stated in the present case. Acts mala in se
requires presence of criminal intent and the person's knowledge of the nature of his/her act, while in
acts mala prohibita, presence of criminal intent and the person's knowledge is not necessary. The Court
also stated that Philippine laws on copyright infringement does not require criminal intent (mens rea)
and does not support good faith as a defense. Thus, the act of infringement and not the intent is the one
that causes the damage.

It held that ABS-CBN's video footage is copyrightable because it is under audiovisual works and
cinematographic works and works produced by a process analogous to cinematography or any process
for making audiovisual recordings. It also stated that news or the event itself is not copyrightable. The
Court differentiated idea and expression idea meant as a form, the look or appearance of a thing
while expression is its reality or the external, perceptible world of articulate sounds and visible written
symbols that others can understand. Thus, the Supreme Court stated that only the expression of an
idea is protected by copyright, not the idea itself, citing the US Supreme Court's decision in Baker vs
Selden (101 U.S. 99). In the present case, expression applies to the event captured and presented in a
specific medium via cinematography or processes analogous to it.

The Court also gave the four-fold test under the Fair Use Doctrine (stated in section 185 of RA 8293 or
the Intellectual Property Code, as amended) to determine fair use:

a. The purpose and character of the use, including whether such use is of a commercial
nature or is for non-profit educational purposes;

b. The nature of the copyrighted work;

c. The amount and substantiality of the portion used in relation to the copyrighted work as
a whole; and

d. The effect of the use upon the potential market for or value of the copyrighted work.

Fair use, which is an exception to copyright owners monopoly of the work's usage, was defined by the
Supreme Court as privilege to use the copyrighted material in a reasonable manner without the
copyright owner's consent or by copying the material's theme or idea rather than its expression.

It also said that determination of whether the Angelo dela Cruz footage is subject to fair use is better left
to the trial court where the proceedings are currently pending.

Francisco Joaquin, Jr. vs Franklin Drilon 302 SCRA 225 GR 108946 January 28,1999

Facts:
BJ Productions Inc. (BJPI) was the holder of copyright over the show Rhoda and Me. It holds rights over
the shows format and style of presentation. In 1991, BJPIs president Francisco Joaquin saw on TV
RPN 9s show Its a Date, a show which is basically the same as Rhoda and Me. He eventually sued
Gabriel Zosa, the manager of the show Its a Date. The investigating prosecutor found probable cause
against Zosa. Zosa later sought a review of the prosecutors resolution before the Secretary of Justice
(Franklin Drilon). Drilon reversed the findings of the fiscal and directed him to dismiss the case against
Zosa.

Issues:

Whether or not the order of Drilon finding no probable cause is valid.

Ruling: YES

Yes. The essence of copyright infringement is the copying, in whole or in part, of copyrightable materials
as defined and enumerated in Section 2 of PD. No. 49 (Copyright Law). Apart from the manner in which it
is actually expressed, however, the idea of a dating game show is a non-copyrightable material. Ideas,
concepts, formats, or schemes in their abstract form clearly do not fall within the class of works or
materials susceptible of copyright registration as provided in PD. No. 49. What is covered by BJPIs
copyright is the specific episodes of the show Rhoda and Me.
Further, BJPI should have presented the master videotape of the show in order to show the linkage
between the copyright show (Rhoda and Me) and the infringing show (Its a Date). This is based on the
ruling in 20th Century Fox vs CA (though this has been qualified by Columbia Pictures vs CA, this is still good
law). Though BJPI did provide a lot of written evidence and description to show the linkage between the
shows, the same were not enough. A television show includes more than mere words can describe
because it involves a whole spectrum of visuals and effects, video and audio, such that no similarity or
dissimilarity may be found by merely describing the general copyright/format of both dating game shows.

ABSCBN vs. Philippine Multi-Media GR 175760-70 January 19,2009

Facts:
Philippine Multi-Media System, Inc. (PMSI) is a signal provider which has cable and satellite services. It is
providing its satellite services through Dream Broadcasting System. PMSI has its Free TV and Premium
Channels. The Free TV includes ABS-CBN, GMA-7, and other local networks. The premium channels
include AXN, Jack TV, etc which were paid by subscribers before such channels can be transmitted as feeds
to a subscribers TV set which has been installed with a Dream satellite.
ABS-CBN is a television and broadcasting corporation. It broadcasts television programs by wireless means
to Metro Manila and nearby provinces, and by satellite to provincial stations through Channel 2 and
Channel 23. The programs aired over Channels 2 and 23 are either produced by ABS-CBN or purchased
from or licensed by other producers. ABS-CBN also owns regional television stations which pattern their
programming in accordance with perceived demands of the region. Thus, television programs shown in
Metro Manila and nearby provinces are not necessarily shown in other provinces.
In May 2002, ABS-CBN sued PMSI for allegedly engaging in rebroadcasting and thereby infringing on ABS-
CBNs copyrights; that the transmission of Channels 2 and 23 to the provinces where these two channels
are not usually shown altered ABS-CBNs programming for the said provinces. PMSI argued that it is not
infringing upon ABS-CBNs copyrights because it is operating under the Must-Carry Rule outlined in NTC
(National Telecommunications Commission) Circular No. 4-08-88.
Issue:
Whether or not PMSI infringed upon the copyrights of ABS-CBN.
Ruling: NO

The Must-Carry Rule under NTC Circular No. 4-08-88 falls under the limitations on copyright. The
Filipino people must be given wider access to more sources of news, information, education, sports
event and entertainment programs other than those provided for by mass media and afforded television
programs to attain a well informed, well-versed and culturally refined citizenry and enhance their socio-
economic growth. The very intent and spirit of the NTC Circular will prevent a situation whereby station
owners and a few networks would have unfettered power to make time available only to the highest
bidders, to communicate only their own views on public issues, people, and to permit on the air only
those with whom they agreed contrary to the state policy that the (franchise) grantee like ABS-CBN,
and other TV station owners and even the likes of PMSI, shall provide at all times sound and balanced
programming and assist in the functions of public information and education.

PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which
similarly states that it shall provide adequate public service time to enable the government, through
the said broadcasting stations, to reach the population on important public issues; provide at all times
sound and balanced programming; promote public participation such as in community programming;
assist in the functions of public information and education.

The Must-Carry Rule favors both broadcasting organizations and the public. It prevents cable
television companies from excluding broadcasting organization especially in those places not reached by
signal. Also, the rule prevents cable television companies from depriving viewers in far-flung areas the
enjoyment of programs available to city viewers.

Columbia Pictures vs. CA GR 110318 August 28,1996

Facts:

In 1986, the Videogram Regulatory Board (VRB) applied for a warrant against Jose Jinco (Jingco), owner
of Showtime Enterprises for allegedly pirating movies produced and owned by Columbia Pictures and
other motion picture companies. Jingco filed a motion to quash the search warrant but the same was
denied in 1987. Subsequently, Jinco filed an Urgent Motion to Lift the Search Warrant and Return the
Articles Seized. In 1989, the RTC judge granted the motion. The judge ruled that based on the ruling in
the 1988 case of 20th Century Fox Film Corporation vs CA, before a search warrant could be issued in
copyright cases, the master copy of the films alleged to be pirated must be attached in the application
for warrant.

Issue:

Whether or not the 20th Century Fox ruling may be applied retroactively in this case.
Ruling: No

In 1986, obviously the 1988 case of 20th Century Fox was not yet promulgated. The lower court could
not possibly have expected more evidence from the VRB and Columbia Pictures in their application for a
search warrant other than what the law and jurisprudence, then existing and judicially accepted,
required with respect to the finding of probable cause.

The Supreme Court also revisited and clarified the ruling in the 20th Century Fox Case. It is evidently
incorrect to suggest, as the ruling in 20th Century Fox may appear to do, that in copyright infringement
cases, the presentation of master tapes of the copyright films is always necessary to meet the
requirement of probable cause for the issuance of a search warrant. It is true that such master tapes are
object evidence, with the merit that in this class of evidence the ascertainment of the controverted fact
is made through demonstration involving the direct use of the senses of the presiding magistrate. Such
auxiliary procedure, however, does not rule out the use of testimonial or documentary evidence,
depositions, admissions or other classes of evidence tending to prove the factum probandum, especially
where the production in court of object evidence would result in delay, inconvenience or expenses out
of proportion to is evidentiary value.

In fine, the supposed pronouncement in said case regarding the necessity for the presentation of the
master tapes of the copy-righted films for the validity of search warrants should at most be understood
to merely serve as a guidepost in determining the existence of probable cause in copy-right
infringement cases where there is doubt as to the true nexus between the master tape and the pirated
copies. An objective and careful reading of the decision in said case could lead to no other conclusion
than that said directive was hardly intended to be a sweeping and inflexible requirement in all or similar
copyright infringement cases.

Habana vs. Robles Gr 131522 July 19, 1999

Facts:

Pacita Habana and two others were the authors of College English for Today Series 1 and 2 (CET). While
they were researching for books to assist them in updating their own book, they chanced upon the book
of Felicidad Robles entitled Developing English Proficiency Books 1 and 2 (DEP). They discovered further
that the book of Robles was strikingly similar to the contents, scheme of presentation, illustrations and
illustrative examples of CET. They then sued Robles and her publisher (Goodwill Trading Co.) for
infringement and/or unfair competition with damages.

Robles, in her defense, alleged that her sources were from foreign books; that in their field, similarity in
styles cannot be avoided since they come from the same background and orientation. The trial court as
well as the Court of Appeals ruled in favor of Robles.

Issue:

Whether or not the Court of Appeals is correct.

Ruling: No
A perusal of the records yields several pages of the book DEP that are similar if not identical with the
text of CET. In several other pages the treatment and manner of presentation of the topics of DEP are
similar if not a rehash of that contained in CET. The similarities in examples and material contents are so
obviously present in this case. How can similar/identical examples not be considered as a mark of
copying? Robles act of lifting from the book of Habana et al substantial portions of discussions and
examples, and her failure to acknowledge the same in her book is an infringement of Habana et als
copyrights.

The Supreme Court also elucidated that in determining the question of infringement, the amount of
matter copied from the copyrighted work is an important consideration. To constitute infringement, it is
not necessary that the whole or even a large portion of the work shall have been copied. If so much is
taken that the value of the original is sensibly diminished, or the labors of the original author are
substantially and to an injurious extent appropriated by another, that is sufficient in point of law to
constitute piracy.

CHING V. SALINAS, SR. (G.R. NO. 161295)

Facts:

Ching is a maker and manufacturer of a utility model, Leaf Spring Eye Bushing for Automobile, for which
he holds certificates of copyright registration. Petitioners request to the NBI to apprehend and
prosecute illegal manufacturers of his work led to the issuance of search warrants against respondent
Salinas, alleged to be reproducing and distributing said models in violation of the IP Code. Respondent
moved to quash the warrants on the ground that petitioners work is not artistic in nature and is a
proper subject of a patent, not copyright. Petitioner insists that the IP Code protects a work from the
moment of its creation regardless of its nature or purpose. The trial court quashed the warrants.
Petitioner argues that the copyright certificates over the model are prima facie evidence of its validity.
CA affirmed the trial courts decision.

Issues:

(1) Whether or not petitioners model is an artistic work subject to copyright protection.

(2) Whether or not petitioner is entitled to copyright protection on the basis of the certificates of
registration issued to it.

Ruling:

(1) NO. As gleaned from the specifications appended to the application for a copyright certificate filed by
the petitioner, the said Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion are merely
utility models. As gleaned from the description of the models and their objectives, these articles are
useful articles which are defined as one having an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information. Plainly, these are not literary or artistic
works. They are not intellectual creations in the literary and artistic domain, or works of applied art.
They are certainly not ornamental designs or one having decorative quality or value. Indeed, while
works of applied art, original intellectual, literary and artistic works are copyrightable, useful articles and
works of industrial design are not. A useful article may be copyrightable only if and only to the extent
that such design incorporates pictorial, graphic, or sculptural features that can be identified separately
from, and are capable of existing independently of the utilitarian aspects of the article. In this case, the
bushing and cushion are not works of art. They are, as the petitioner himself admitted, utility models
which may be the subject of a patent.

(2) NO. No copyright granted by law can be said to arise in favor of the petitioner despite the issuance
of the certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle
Bearing Cushion. Indeed, in Joaquin, Jr. v. Drilon and Pearl & Dean (Phil.), Incorporated v. Shoemart,
Incorporated, the Court ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a pre-existing right regulated by it. Being a statutory grant, the
rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the statute. Accordingly, it can
cover only the works falling within the statutory enumeration or description.

Ownership of copyrighted material is shown by proof of originality and copyrightability. To discharge his
burden, the applicant may present the certificate of registration covering the work or, in its absence,
other evidence. A copyright certificate provides prima facie evidence of originality which is one element
of copyright validity. It constitutes prima facie evidence of both validity and ownership and the validity
of the facts stated in the certificate.

Pearl & Dean vs. Shoemart GR 148222 August 15, 2003

Facts:

Pearl & Dean (Phil), Inc. is a corporation engaged in the manufacture of advertising display units called
light boxes. In January 1981, Pearl & Dean was able to acquire copyrights over the designs of the display
units. In 1988, their trademark application for Poster Ads was approved; they used the same
trademark to advertise their light boxes.

In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SM) so that the former may be contracted to
install light boxes in the ad spaces of SM. Eventually, SM rejected Pearl & Deans proposal.

Two years later, Pearl & Dean received report that light boxes, exactly the same as theirs, were being
used by SM in their ad spaces. They demanded SM to stop using the light boxes and at the same time
asked for damages amounting to P20 M. SM refused to pay damages though they removed the light
boxes. Pearl & Dean eventually sued SM. SM argued that it did not infringe on Pearl & Deans trademark
because Pearl & Deans trademark is only applicable to envelopes and stationeries and not to the type
of ad spaces owned by SM. SM also averred that Poster Ads is a generic term hence it is not subject to
trademark registration. SM also averred that the actual light boxes are not copyrightable. The RTC ruled
in favor of Pearl & Dean. But the Court of Appeals ruled in favor of SM.

Issue:

Whether or not the Court of Appeals is correct.

Ruling: YES

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; what was copyrighted were the technical drawings only, and not the light
boxes themselves. In other cases, it was held that there is no copyright infringement when
one who, without being authorized, uses a copyrighted architectural plan to construct a
structure. This is because the copyright does not extend to the structures themselves.
On the trademark infringement allegation, 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, Pearl & Deans exclusive right to the
use of Poster Ads is limited to what is written in its certificate of registration, namely,
stationeries.

NBI-Mircosoft vs Lotus Development & Judy Hwang GR 147043 June 21, 2005

Facts

In May 1993, Microsoft Corporation and Beltron Computer Philippines, Inc. entered into a Licensing
Agreement. Under Section 2(a) of the Agreement, Microsoft authorized Beltron, for a fee, to:
1. Reproduce and install no more than one copy of Windows on each Customer System hard disk;
2. Distribute directly or indirectly and license copies of Windows (reproduced as per Section 2 of the
Agreement and/or acquired from an Authorized Replicator or Authorized Distributor.
Their agreement allowed either party to terminate if one fails to comply with their respective obligations.
Microsoft terminated the Agreement in June 1995 by reason of Beltrons non-payment of royalties. Later,
Microsoft learned that Beltron was illegally copying and selling copies of Windows. Microsoft then sought
the assistance of the National Bureau of Investigation. NBI agents made some purchase from Beltron
where they acquired a computer unit pre-installed with Windows, 12 windows installer CDs packed as
Microsoft products. The agents were not given the end-user license agreements, user manuals, and
certificates of authenticity for the products purchased. They were given a receipt which has a header of
T.M.T.C. (Phils) Inc. BELTRON COMPUTER. TMTC stands for Taiwan Machinery Display and Trade Center.
A search warrant was subsequently issued where 2,831 CDs of Windows installers, among others, were
seized. Based on the items seized from Beltron, Microsoft filed a case of copyright infringement against
Beltron and TMTC as well as their officers (Judy Hwang et al) before the Department of Justice (DOJ).
Beltron, in its counter-affidavit, argued the following:
1. That Microsofts issue with Beltron was really just to have leverage in forcing Beltron to pay the unpaid
royalties; and that Microsoft should have filed a collection suit.
2. That the computer unit allegedly purchased by the NBI agents from them cannot be decisively traced
as coming from Beltron because the receipt issued to the agents did not list the computer unit as one of
the items bought.
3. That the 12 installers purchased by the agents which are actually listed in the receipt were not
manufactured by Beltron but rather they were genuine copies purchased by TMTC from an authorized
Microsoft seller in Singapore.
4. That the 2,831 installers seized from them were not a property of Beltron but rather they were left to
them by someone for safekeeping.
The DOJ secretary agreed with Beltron and dismissed the case. The Secretary ruled that the issue of the
authority of Beltron to copy and sell Microsoft products should first be resolved in a civil suit. Microsoft
appealed the decision of the DOJ secretary before the Supreme Court. Meanwhile, Beltron filed a motion
to quash the search warrant before the RTC that issued the same. The RTC partially granted the quashal.
The Court of Appeals reversed the RTC. Hwang et al did not appeal the CA decision.

Issue:

Whether or not the DOJ Secretary is correct

Ruling: No

Section 5 of Presidential Decree 49 enumerates the rights vested exclusively on the copyright owner.
Contrary to the DOJs ruling, the gravamen of copyright infringement is not merely the unauthorized
manufacturing of intellectual works but rather the unauthorized performance of any of the acts covered
by Section 5. Hence, any person who performs any of the acts under Section 5 without obtaining the
copyright owners prior consent renders himself civilly and criminally liable for copyright infringement.
Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the
copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the
copyright.
Being the copyright and trademark owner of Microsoft software, Microsoft acted well within its rights in
filing the complaint before DOJ on the incriminating evidence obtained from Beltron. Hence, it was highly
irregular for the DOJ to hold that Microsoft sought the issuance of the search warrants and the filing of
the complaint merely to pressure Beltron to pay its overdue royalties to Microsoft.
There is no basis for the DOJ to rule that Microsoft must await a prior resolution from the proper court
of whether or not the Agreement is still binding between the parties. Beltron has not filed any suit to
question Microsofts termination of the Agreement. Microsoft can neither be expected nor compelled to
wait until Beltron decides to sue before Microsoft can seek remedies for violation of its intellectual
property rights.
Furthermore, the articles seized from Beltron are counterfeit per se because Microsoft does not (and
could not have authorized anyone to) produce such CD installers The copying of the genuine Microsoft
software to produce these fake CDs and their distribution are illegal even if the copier or distributor is a
Microsoft licensee. As far as these installer CD-ROMs are concerned, the Agreement (and the alleged
question on the validity of its termination) is immaterial to the determination of Beltrons liability for
copyright infringement and unfair competition. Beltrons defense that the box of CD installers found in
their possession was only left to them for safekeeping is not tenable.

MGM vs. Grokster 04-480 545 US 913 2005

Facts:

Grokster, LTD and StreamCast Network distributed fee software that allowed the sharing of files in a
peer to peer network. This avoided the need for central servers and costly server storage and works
faster. Since files can go from computer to computer and not through the server it is safer and cost
efficient. This program was used by universities, government agencies, corporations, libraries and then
private users. Private users began sharing copyrighted music and video files without authorization.
Grokster used technology called FastTrack and Stream Cast used Gnutella. The files shared do not go to
a central location so Grokster and StreamCast did not know when the files were being copied but if they
had searched there software they would see the type of files being shared. It was shown that
StreamCast gave software called OpenNap labeled the best alternative to Napster in the hopes to take
all the Napster users that had to stop using that software after Napster was sued. Grokster had a
program called OpenNap that allowed users to search for Napster files. Grokster and StreamCast
received revenues from posting advertising all over its program software. MGM was able to show that
some 90 percent of the files being shared where copyrighted files. Also there is no evidence that either
company tried to filter or stop copyright infringement. The district court granted summary judgment in
favor of Grokster and Stream Case because although users of the software did infringe MGMs property
there was no proof there the distributors had actual knowledge of specific acts of infringement. MGM
appealed.

Issue:

Whether a distributor of a product that is capable of lawful and unlawful use is liable for copyright
infringement by a 3rd party using that product.

Ruling: Yes

The appeals court stated that since these distributors did not have actual knowledge, did not partake in,
or monitor the file sharing they are not directly liable for the infringement. However the court erred in
finding they were not secondarily liable for the actions of the users of its products. There is a balance
between growing technologies and copyright protection, but to not make distributors liable will make
copyright protections meaningless. The lower court looked to the commerce doctrine now codified
which states that a product must be capable of commercially significant noninfridging uses and if so, no
secondary liability would follow. This court finds that interpretation too narrow. Here this court
considers the doctrine of inducement to also be relevant. When a distributor promotes using its device
to infringe copyright material, shown by affirmative steps to foster infringement this is inducement and
the distributor will be liable for 3rd party infringement. All the actions of the companies is enough to
show a genuine issue of material fact, thus the court reversed the summary judgment ruling and
remanded the case upon those findings.

Dissent. Justice Breyer states this case is no different from Sony where time-shifting was the main
purpose of users copying shows by VCRS (so they could watch later). The court did not find Sony
responsible there. Also there is such a major market for non-infringement uses for this software that
they shouldnt be stopped from distributing the software. The standard in Sony should not be adapted
as we did it here to add inducement.

Discussion. When a distributor takes affirmative steps to foster infringement through the use of its
product, the distributor will be liable for that infringement.

Synopsis of Rule of Law. When a distributor takes affirmative steps to foster infringement through the
use of its product, the distributor will be liable for that infringement conducted by 3rd parties.

Sony Corp. Of America vs. Universal City Studios, Inc. 464 US 417 1984

Facts:

Sony Corp. (Sony) (Defendant) marketed Betamax videocassette recorders (VCRs or VTRs), which
allowed home recording of televised programs. Several movie studios (Plaintiff), holders of copyrights
on televised movies and other televised programs, brought an action for contributory copyright
infringement on the theory that Defendant was contributorily liable for infringement by consumers of
VTRs of the studios (Plaintiff) copyrighted works on the basis of Sonys (Defendant) marketing and
distribution of the VTRs. The district court, finding, inter alia, that no Sony (Defendant) employee had
either direct involvement with the allegedly infringing activity or direct contact with purchasers of
Betamax who recorded copyrighted works off-the-air, and that there was no evidence that any of the
copies made by individuals were influenced or encouraged by Defendants advertisements, held that
Defendant was not liable for direct or contributory copyright infringement. The court of appeals
reversed. The United States Supreme Court granted certeriori.

Issue:

Is one who supplies the way to accomplish an infringing activity and encourages that activity through
advertisement liable for copyright infringement?

Ruling: No

One who supplies the way to accomplish an infringing activity and encourages that activity through
advertisement is not liable for copyright infringement. The protection given to copyrights is wholly
statutory, and, in a case like this, in which Congress has not plainly marked the course to be followed by
the judiciary, the Court must be circumspect in construing the scope of rights created by a statute that
never contemplated such a calculus of interests based on technological advances. In proceeding, the
Court must balance the encouraging and rewarding of authors to create new works with the public
good. This case does not fall in the category of those in which it is manifestly just to impose vicarious
liability because the contributory infringer was in a position to control the use of copyrighted works by
others and had authorized the use without permission from the copyright owner. In this case, the only
contact between Defendant and the users of the VTRs occurred at the moment of sale. However, there
is no precedent for imposing vicarious liability on the theory that Sony (Defendant) sold the VTRs with
constructive knowledge that its customers might use the equipment to make unauthorized copies of
copyrighted material. The sale of copying equipment, like the sale of other articles of commerce, does
not constitute contributory infringement if the product is widely used for legitimate, unobjectionable
purposes, or actually, is merely capable of substantial noninfringing uses. In this case, a large portion of
the publics use of VTRs does not implicate copyright at all, and also time-shifting, the most common use
for the Betama, constitutes a fair use. Reversed.

Discussion. Justice Blackmun, in a dissent, faulted the majority for deferring to congressional action in
the face of major technological advancements, saying that the Court was thereby evad[ing] the hard
issues when they arise in the area of copyright law. He proposed instead a test for indirect liability for
copyright infringement based on whether the primary use of technology is infringing. Even under this
test, however, Sony (Defendant) would have prevailed given the determination of the majority that the
predominant use of VTRs (time-shifting) constituted fair use.

Synopsis of Rule of Law. One who supplies the way to accomplish an infringing activity and encourages
that activity through advertisement is not liable for copyright infringement

In Re: Plagiarism Charges Against Justice Mariano Del Castillo AM 10-7-17-SC February 8, 2011

Facts:

The Malaya Lolas received an adverse decision in the case Vinuya vs Romulo decided by the Supreme
Court on April 28, 2010. The Malaya Lolas sought the annulment of said decision due to the alleged
irregularity in the writing of the text of the decision. Allegedly, the ponente of said case, Justice Mariano
del Castillo copied verbatim portions of the decision laid down in said case from three works by three
foreign authors without acknowledging said authors hence an overt act of plagiarism which is highly
reprehensible.

Plagiarism as defined by Blacks Law Dictionary is the deliberate and knowing presentation of another
persons original ideas or creative expressions as ones own.

Issue:

Is plagiarism applicable to decisions promulgated by the Supreme Court.

Ruling: No.

No. It has been a long standing practice in this jurisdiction not to cite or acknowledge the originators of
passages and views found in the Supreme Courts decisions. These omissions are true for many of the
decisions that have been penned and are being penned daily by magistrates from the Court of Appeals,
the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Courts nationwide and with them, the
municipal trial courts and other first level courts. Never in the judiciarys more than 100 years of history
has the lack of attribution been regarded and demeaned as plagiarism.

As put by one author (this time acknowledged by the Court), Joyce C. George from her Judicial Opinion
Writing Handbook:

A judge writing to resolve a dispute, whether trial or appellate, is exempted from a charge of
plagiarism even if ideas, words or phrases from a law review article, novel thoughts published in a
legal periodical or language from a partys brief are used without giving attribution. Thus judges are
free to use whatever sources they deem appropriate to resolve the matter before them, without fear
of reprisal. This exemption applies to judicial writings intended to decide cases for two reasons: the
judge is not writing a literary work and, more importantly, the purpose of the writing is to resolve a
dispute. As a result, judges adjudicating cases are not subject to a claim of legal plagiarism.

Further, as found by the Supreme Court, the omission of the acknowledgment by Justice del Castillo of
the three foreign authors arose from a clerical error. It was shown before the Supreme Court that the
researcher who finalized the draft written by Justice del Castillo accidentally deleted the
citations/acknowledgements; that in all, there is still an intent to acknowledge and not take such
passages as that of Justice del Castillos own.

ABSCBN vs. Philippine Multi-Media GR 175760-70 January 19,2009

Facts:
Philippine Multi-Media System, Inc. (PMSI) is a signal provider which has cable and satellite services. It is
providing its satellite services through Dream Broadcasting System. PMSI has its Free TV and Premium
Channels. The Free TV includes ABS-CBN, GMA-7, and other local networks. The premium channels
include AXN, Jack TV, etc which were paid by subscribers before such channels can be transmitted as feeds
to a subscribers TV set which has been installed with a Dream satellite.
ABS-CBN is a television and broadcasting corporation. It broadcasts television programs by wireless means
to Metro Manila and nearby provinces, and by satellite to provincial stations through Channel 2 and
Channel 23. The programs aired over Channels 2 and 23 are either produced by ABS-CBN or purchased
from or licensed by other producers. ABS-CBN also owns regional television stations which pattern their
programming in accordance with perceived demands of the region. Thus, television programs shown in
Metro Manila and nearby provinces are not necessarily shown in other provinces.
In May 2002, ABS-CBN sued PMSI for allegedly engaging in rebroadcasting and thereby infringing on ABS-
CBNs copyrights; that the transmission of Channels 2 and 23 to the provinces where these two channels
are not usually shown altered ABS-CBNs programming for the said provinces. PMSI argued that it is not
infringing upon ABS-CBNs copyrights because it is operating under the Must-Carry Rule outlined in NTC
(National Telecommunications Commission) Circular No. 4-08-88.
Issue:
Whether or not PMSI infringed upon the copyrights of ABS-CBN.
Ruling: NO

The Must-Carry Rule under NTC Circular No. 4-08-88 falls under the limitations on copyright. The
Filipino people must be given wider access to more sources of news, information, education, sports
event and entertainment programs other than those provided for by mass media and afforded television
programs to attain a well informed, well-versed and culturally refined citizenry and enhance their socio-
economic growth. The very intent and spirit of the NTC Circular will prevent a situation whereby station
owners and a few networks would have unfettered power to make time available only to the highest
bidders, to communicate only their own views on public issues, people, and to permit on the air only
those with whom they agreed contrary to the state policy that the (franchise) grantee like ABS-CBN,
and other TV station owners and even the likes of PMSI, shall provide at all times sound and balanced
programming and assist in the functions of public information and education.

PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which
similarly states that it shall provide adequate public service time to enable the government, through
the said broadcasting stations, to reach the population on important public issues; provide at all times
sound and balanced programming; promote public participation such as in community programming;
assist in the functions of public information and education.

The Must-Carry Rule favors both broadcasting organizations and the public. It prevents cable
television companies from excluding broadcasting organization especially in those places not reached by
signal. Also, the rule prevents cable television companies from depriving viewers in far-flung areas the
enjoyment of programs available to city viewers.

Converse Rubber Corporation vs Universal Rubber Products, Inc. GR L-27906 January 8,1987

Facts:

Converse Rubber Corporation is an American corporation while Universal Rubber Products, Inc. is a
corporation licensed to do business in the country. Converse has been operating since 1946. Universal
Rubber has been operating since 1963. Later, Universal Rubber filed an application for the trademark
Universal Converse and Device before the Philippine Patent Office. Converse Rubber opposed as it
averred that the word Converse which is part of its corporate name cannot be granted as part of
Universal Rubbers trademark or trade name because it will likely deceive purchasers of Universal
Rubbers products as it may be mistaken by unwary customers to be manufactured by Converse Rubber.
The Director of Patents did not grant the opposition by Converse Rubber.

Issue:

Whether or not the decision of the Director of Patents is correct.

Ruling: No.

From a cursory appreciation of the Converse Rubbers corporate name CONVERSE RUBBER
CORPORATION it is evident that the word CONVERSE is the dominant word which identifies Converse
Rubber from other corporations engaged in similar business. Universal Rubber, in the stipulation of
facts, admitted Converse Rubbers existence since 1946 as a duly organized foreign corporation engaged
in the manufacture of rubber shoes. This admission necessarily betrays its knowledge of the reputation
and business of petitioner even before it applied for registration of the trademark in question. Knowing,
therefore, that the word CONVERSE belongs to and is being used by Converse Rubber, and is in fact
the dominant word in its corporate name, Universal Rubber has no right to appropriate the same for use
on its products which are similar to those being produced by Converse Rubber.

Philips Export BV vs. CA GR 96161 February 21, 1992

Facts:

Philips Export B.V. (PEBV), a foreign corporation organized under the laws of the Netherlands, although
not engaged in business here, is the registered owner of the trademarks PHILIPS and PHILIPS SHIELD
EMBLEM. Philips Electrical Lamps, Inc. (Philips Electrical, for brevity) and Philips Industrial
Developments, Inc. (Philips Industrial, for short), authorized users of the trademarks PHILIPS and PHILIPS
SHIELD EMBLEM, were incorporated on 29 August 1956 and 25 May 1956, respectively. All
suchcorporations belong to the PHILIPS Group of Companies.

Standard Philips Corporation (Standard Philips), on the other hand, was issued a Certificate of
Registration by SEC on 19 May 1982. PEBV filed a letter complaint with the SEC asking for the
cancellation of the word "PHILIPS" from Standard Philips corporate name in view of the prior
registration with the Bureau of Patents of the trademark "PHILIPS" and the logo "PHILIPS

SHIELD EMBLEM" in the name of PEBV and the previous registration of Philips Electrical and Philips
Industrial with the SEC.

Standard Philips refused to amend its Articles of Incorporation. PEBV filed with the SECa Petition praying
for the issuance of a Writ of Preliminary Injunction claiming that the use of the word PHILIPS amounts
to infringement and clear violation of PEBVs exclusive right to use the same considering that both
parties engage in the same business. The SEC Hearing Officer ruled against the issuance of the writ as
there is no confusing similarity between PEBVs and Standard Philips' corporate names as those of the
PEBV contain at least two words different from that of the Standard Philips. SEC en banc affirmed the
dismissal. The CA dismissed PEBVs petition ruling that Standard Philips' products consisting of chain
rollers, belts, bearings and cutting saw are unrelated and non-competing with PEBVs
products i.e. electrical lamps. Hence, this petition.

Issue:

Should Standard Philips change its corporate name given that PEBV acquired exclusive right over the
word PHILIPS, hence, there is confusing similarity, if not infringement, between the two corporate
names?

Ruling: Yes
As early as Western Equipment and Supply Co. v. Reyes (1927), the Court declared that a corporation's
right to use its corporate and trade name is a property right, a right in rem, which it may assert and
protect against the world in the same manner as it may protect its tangible property, real or personal,
against trespass or conversion. It is regarded, to a certain extent, as a property right and one which
cannot be impaired or defeated by subsequent appropriation by another corporation in the same field.

Sec. 18 of the Corporation Code cannot be any clearer. To come within its scope, two requisites must be
proven, namely:

(1) that the complainant corporation acquired a prior right over the use of such corporate name; and

(2) the proposed name is either:

(a) identical; or

(b) deceptively or confusingly similar

to that of any existing corporation or to any other name already protected by law; or

(c) patently deceptive, confusing or contrary to existing law.

The right to the exclusive use of a corporate name with freedom from infringement by similarity is
determined by priority of adoption. In this regard, there is no doubt with respect to PEBVs prior
adoption of' the name ''PHILIPS" as part of its corporate name. Philips Electrical and Philips Industrial
were incorporated on 29 August 1956 and 25 May 1956, respectively, while Standard Philips was issued
a Certificate of Registration on 12 April 1982, 26 years later.

In determining the existence of confusing similarity in corporate names, the test is whether the
similarity is such as to mislead a person, using ordinary care and discrimination. In so doing, the Court
must look to the record as well as the names themselves. While the corporate names of PEBV and
Standard Philips are not identical, a reading of PEBV's corporate names inevitably leads one to conclude
that "PHILIPS" is, indeed, the dominant word in that all the companies affiliated or associated with the
principal corporation, PEBV, are known in the Philippines and abroad as the PHILIPS Group of
Companies.

Given Standard Philips primary purpose (i.e. electrical wiring devices, electrical component parts,
and/or complement), nothing could prevent it from dealing in the same line of business of electrical
devices, products or supplies which fall under its primary purposes. Besides, there is showing that
Standard Philips not only manufactured and sold ballasts for fluorescent lamps with their corporate
name printed thereon but also advertised the same as, among others, Standard Philips. Standard Philips
choice of "PHILIPS" as part of its corporate name [STANDARD PHILIPS CORPORATION] tends to show
Standard Philips intention to ride on the popularity and established goodwill of said PEBVs business
throughout the world. The subsequent appropriator of the name or one confusingly similar thereto
usually seeks an unfair advantage, a free ride of another's goodwill.

PHILIPS is a trademark or trade name which was registered as far back as 1922. PEBV, therefore, have
the exclusive right to its use which must be free from any infringement by similarity. Such principle
proceeds upon the theory that it is a fraud on the corporation which has acquired a right to that name
and perhaps carried on its business thereunder, that another should attempt to use the same name, or
the same name with a slight variation in such a way as to induce persons to deal with it in the belief that
they are dealing with the corporation which has given a reputation to the name. Notably, too, Standard
Philips name actually contains only a single word, that is, "STANDARD", different from that of PEBV
inasmuch as the inclusion of the term "Corporation" or "Corp." merely serves the Purpose of
distinguishing the corporation from partnerships and other business organizations.

The fact that there are other companies engaged in other lines of business using the word "PHILIPS" as
part of their corporate names is no defense and does not warrant the use by Standard Philips of such
word which constitutes an essential feature of PEBVs corporate name previously adopted and
registered and-having acquired the status of a well-known mark in the Philippines and internationally as
well.

WHEREFORE, the Decision of the Court of Appeals dated 31 July 1990, and its Resolution dated 20
November 1990, are SET ASIDE and a new one entered ENJOINING private respondent from using
"PHILIPS" as a feature of its corporate name, and ORDERING the Securities and Exchange Commission to
amend private respondent's Articles of Incorporation by deleting the word PHILIPS from the corporate
name of private respondent.

Sehwani vs. In-N-Out Burger GR 171053 October 15, 2007

Facts:

Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated under the laws of California. It is a
signatory to the Convention of Paris on Protection of Industrial Property and the TRIPS Agreement. It is
engaged mainly in the restaurant business, but it has never engaged in business in the Philippines.

Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations organized in the Philippines.
Sometime in 1991, Sehwani filed with the BPTTT an application for the registration of the mark IN N
OUT (the inside of the letter O formed like a star). Its application was approved and a certificate of
registration was issued in its name on 1993. In 2000, Sehwani, Incorporated and Benita Frites, Inc.
entered into a Licensing Agreement, wherein the former entitled the latter to use its registered mark,
IN N OUT.

Sometime in 1997, In-N-Out Burger filed trademark and service mark applications with the Bureau of
Trademarks for the IN-N-OUT and IN-N-OUT Burger & Arrow Design. In 2000, In-N-Out Burger found
out that Sehwani, Incorporated had already obtained Trademark Registration for the mark IN N OUT
(the inside of the letter O formed like a star). Also in 2000, In-N-Out Burger sent a demand letter
directing Sehwani, Inc. to cease and desist from claiming ownership of the mark IN-N-OUT and to
voluntarily cancel its trademark registration. Sehwani Inc. did not accede to In-N-Out Burgers demand
but it expressed its willingness to surrender its registration for a consideration.

In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative complaint against the
Sehwani, Inc. and Benita Frites, Inc. for unfair competition and cancellation of trademark registration.

Issues:

a) Whether or not the Intellectual Property Office (an administrative body) have jurisdiction of
cases involving provisions of the IPC (e.g. unfair competition).
b) Whether or not there was unfair competition.

Ruling:

FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases involving provisions of the
IPC (e.g. unfair competition) due to the following reasons:

Section 10 of the Intellectual Property Code specifically identifies the functions of the Bureau
of Legal Affairs, thus:

Section 10. The Bureau of Legal Affairs.The Bureau of Legal Affairs shall have the following functions:

10.1 Hear and decide opposition to the application for registration of marks; cancellation of
trademarks; subject to the provisions of Section 64, cancellation of patents and utility models, and
industrial designs; and petitions for compulsory licensing of patents;

10.2 (a) Exercise original jurisdiction in administrative complaints for violations of laws involving
intellectual property rights; Provided, That its jurisdiction is limited to complaints where the total
damages claimed are not less than Two hundred thousand pesos (P200,000): Provided, futher, That
availment of the provisional remedies may be granted in accordance with the Rules of Court. Xxx

Xxx

(vi) The cancellation of any permit, license, authority, or registration which may have been granted by
the Office, or the suspension of the validity thereof for such period of time as the Director of Legal
Affairs may deem reasonable which shall not exceed one (1) year;

Xxx

(viii) The assessment of damages;

Unquestionably, petitioners complaint, which seeks the cancellation of the disputed mark in the
name of respondent Sehwani, Incorporated, and damages for violation of petitioners intellectual
property rights, falls within the jurisdiction of the IPO Director of Legal Affairs.
 While Section 163 thereof vests in civil courts jurisdiction over cases of unfair competition,
nothing in the said section states that the regular courts have sole jurisdiction over unfair
competition cases, to the exclusion of administrative bodies.
Sections 160 and 170, which are also found under Part III of the Intellectual Property Code,
recognize the concurrent jurisdiction of civil courts and the IPO over unfair competition cases.

These two provisions read:

Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement
Action. Any foreign national or juridical person who meets the requirements of Section 3 of this Act and
does not engage in business in the Philippines may bring a civil or administrative action hereunder for
opposition, cancellation, infringement, unfair competition, or false designation of origin and false
description, whether or not it is licensed to do business in the Philippines under existing laws.

Section 170. Penalties. Independent of the civil and administrative sanctions imposed by law, a criminal
penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand
pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any person who is
found guilty of committing any of the acts mentioned in Section 155, Section168, and Subsection169.1.

Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction to decide the
petitioners administrative case against respondents and the IPO Director General had exclusive
jurisdiction over the appeal of the judgment of the IPO Director of Legal Affairs.

SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and Benita Frites were not using
their registered trademark but that of In-n-Out Burger. Sehwani and Benita Frites are also giving their
products the general appearance that would likely influence the purchasers to believe that their
products are that of In-N-Out Burger. The intention to deceive may be inferred from the similarity of the
goods as packed and offered for sale, and, thus, an action will lie to restrain unfair competition. The
respondents frauduulent intention to deceive purchasers is also apparent in their use of the In-N-Out
Burger in business signages.

The essential elements of an action for unfair competition are (1) confusing similarity in the general
appearance of the goods and (2) intent to deceive the public and defraud a competitor. The confusing
similarity may or may not result from similarity in the marks, but may result from other external factors
in the packaging or presentation of the goods. The intent to deceive and defraud may be inferred from
the similarity of the appearance of the goods as offered for sale to the public. Actual fraudulent intent
need not be shown.

IPO Director of Legal Affairs decision

In-N-Out Burger has legal capacity to sue in the Philippines because the latter is a signatory of
the Convention of Paris on Protection of Industrial Property.
IN-N-OUT Burger, Inc. right to use its tradename and mark to the exclusion of the others
 Respondents use of the petitioners mark was made in good faith and therefore they are not
guilty of unfair competition.

IPO Director Generals Decision

Respondents are guilty of unfair competition.
The following are ordered to be paid to In-N-Out Burger, inc.
Damages in the amount of PHP 212, 574.28
Exemplary damages in the amount of PHP 500,000
Attorneys fees and expenses of litigation in the amount of PHP 500,000

CA Decision
Regular courts, and not the BLA-IPO, have sole jurisdiction to hear and decide cases involving
provisions of the IPC.

Developers Group of Companies, Inc vs. CA GR 114802 June 21, 2001

Facts:

Petitioner Developers Group of Companies filed an infringement case against respondent Shangri-La
alleging that it was the registered owner of the trademark Shangri-La and S logo for its restaurant
services which respondent herein was illegally using to the prejudice of petitioner. Petitioner also
moved to enjoin respondent from using the said mark and logo. Respondent Shangri-La claimed that it
was the legal owner of the mark and it had already filed an administrative case for the cancellation of
the mark even before petitioner has filed its complaint. The trial court found for petitioner and issued
the injunction. CA set aside the order of the trial court.

Issue:

Whether or not the petitioner was entitled to the writ of preliminary injunction issued by the trial court.

Ruling: NO.

The conflicting claims of the parties to the subject service mark and logo give us the impression that the
right claimed by the plaintiff as its basis for asking for injunctive relief is far from clear. The prima facie
validity of its registration has been put into serious question by the above-stated cases filed by Shangri-
La in the Bureau of Patents three years ahead of the complaint. While it is not required that Developers
claimed right be conclusively established at this stage, it is nevertheless necessary to show, at least
tentatively, that it exists and is not vitiated by any substantial challenge or contradiction, such as has
been made by the private respondent. In our view, the petitioner has failed to comply with this
requirement. As for the alleged damages, we find that Developers has not adduced any evidence of
injury, either actual or imminent, resulting from the acts complained of against Shangri-La. There was no
finding of the trial court affirming the claim for damages nor is there any support for it in the record. Our
conclusion is that Developers has not justified the issuance of the writ of preliminary injunction by
proving that it has a legal right to the disputed mark and logo and that it has sustained injury as a result
of the use thereof by Shangri-La.
 COFFEE PARTNERS V. SAN FRANCISCO COFFEE & ROASTERY (G.R. NO. 169504)

Facts:

Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd. to operate coffee
shops in the country using the trademark San Francisco Coffee. Respondent on the other hand, is a local
corporation engaged in the wholesale and retail sale of coffee and uses the business name San Francisco
Coffee & Roastery registered with the DTI. Later, respondent filed an infringement and/or unfair
competition complaint against petitioner alleging that the latter was about to open a coffee shop under
the name San Francisco Coffee causing confusion in the minds of the public as it bore a similar name and
is engaged also in selling of coffee. Petitioner contended no infringement would arise because
respondents tradename was not registered.
Issue:

Whether or not petitioners trademark would infringe respondents tradename.

Ruling: YES.

In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down what
constitutes infringement of an unregistered trade name, thus:
(1) The trademark being infringed is registered in the Intellectual Property Office; however, in
infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the
infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising
of any goods, business or services; or the infringing mark or trade name is applied to labels, signs, prints,
packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such
goods, business, or services;
(4) The use or application of the infringing mark or trade name is likely to cause confusion or mistake or
to deceive purchasers or others as to the goods or services themselves or as to the source or origin of
such goods or services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.
RA 8293, which took effect on 1 January 1998, has dispensed with the registration requirement. Section
165.2 of RA 8293 categorically states that trade names shall be protected, even prior to or without
registration with the IPO, against any unlawful act including any subsequent use of the trade name by a
third party, whether as a trade name or a trademark likely to mislead the public.

It is the likelihood of confusion that is the gravamen of infringement. Applying the dominancy test or the
holistic test, petitioners SAN FRANCISCO COFFEE trademark is a clear infringement of respondents
SAN FRANCISCO COFFEE & ROASTERY, INC. trade name. The descriptive words SAN FRANCISCO
COFFEE are precisely the dominant features of respondents trade name. Petitioner and respondent are
engaged in the same business of selling coffee, whether wholesale or retail. The likelihood of confusion is
higher in cases where the business of one corporation is the same or substantially the same as that of
another corporation. In this case, the consuming public will likely be confused as to the source of the
coffee being sold at petitioners coffee shops.
 CANON KABUSHIKI KAISHA V. CA (G.R. NO. 120900)

Facts:

Respondent NSR Rubber filed an application for registration of the mark CANON for sandals. Petitioner
Canon, a Japanese corporation, opposed alleging it will be damaged by the registration. Petitioner
presented evidence that it was the owner of the mark CANON in various countries and in the Philippines
for goods such as paints, chemical products, toner and dye stuff. BPTTT dismissed the opposition and
gave due course to respondents application. CA affirmed. Petitioner invokes Article 8 of the Paris
Convention which affords protection to a tradename whether or not it forms part of a trademark.

Issue:

Whether or not petitioner may be afforded protection of its trade name.

Ruling: NO.

The term trademark is defined by RA 166, the Trademark Law, as including any word, name, symbol,
emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to
identify his goods and distinguish them for those manufactured, sold or dealt in by others. Tradename
is defined by the same law as including individual names and surnames, firm names, tradenames,
devices or words used by manufacturers, industrialists, merchants, agriculturists, and others to identify
their business, vocations, or occupations; the names or titles lawfully adopted and used by natural or
juridical persons, unions, and any manufacturing, industrial, commercial, agricultural or other
organizations engaged in trade or commerce. Simply put, a trade name refers to the business and its
goodwill; a trademark refers to the goods.

The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris
Convention, of which both the Philippines and Japan, the country of petitioner, are signatories, is a
multilateral treaty that seeks to protect industrial property consisting of patents, utility models,
industrial designs, trademarks, service marks, trade names and indications of source or appellations of
origin, and at the same time aims to repress unfair competition. We agree with public respondents that
the controlling doctrine with respect to the applicability of Article 8 of the Paris Convention is that
established in Kabushi Kaisha Isetan vs. IAC.As pointed out by the BPTTT: Regarding the applicability of
Article 8 of the Paris Convention, this Office believes that there is no automatic protection afforded an
entity whose tradename is alleged to have been infringed through the use of that name as a
trademark by a local entity. To illustrate if a taxicab or bus company in a town in the United Kingdom
or India happens to use the tradename Rapid Transportation, it does not necessarily follow that
Rapid can no longer be registered in Uganda, Fiji, or the Philippines.
 SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT V. DEVELOPERS GROUP OF COMPANIES (G.R.
NO. 159938)

Facts:

Respondent DGCI applied for and was granted registration of the Shangri-La mark and S logo in its
restaurant business. Petitioner Shangri-La, chain of hotels and establishments owned by the Kuok family
worldwide, moved to cancel the registration of the mark on the ground that it was illegally and
fraudulently obtained and appropriated by respondents. Petitioner also moved to register the mark and
logo in its own name. Later, respondent DGCI filed before the trial court a complaint for infringement
against petitioner alleging that DGCI had been the prior exclusive user and the registered owner in the
Philippines of said mark and logo. Petitioner Shangri-La argued that respondent had no right to apply for
the registration because it did not have prior actual commercial use thereof. The trial court found for
respondent. CA affirmed.

Issue:

Whether or not respondents prior use of the mark is a requirement for its registration.

Ruling: YES.

While the present law on trademarks has dispensed with the requirement of prior actual use at the time
of registration, the law in force at the time of registration must be applied. Under the provisions of the
former trademark law, R.A. No. 166, as amended, hence, the law in force at the time of respondents
application for registration of trademark, the root of ownership of a trademark is actual use in
commerce. Section 2 of said law requires that before a trademark can be registered, it must have been
actually used in commerce and service for not less than two months in the Philippines prior to the filing
of an application for its registration. Trademark is a creation of use and therefore actual use is a pre-
requisite to exclusive ownership and its registration with the Philippine Patent Office is a mere
administrative confirmation of the existence of such right.

While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a registrant, neither did
respondent DGCI, since the latter also failed to fulfill the 2-month actual use requirement. What is
worse, DGCI was not even the owner of the mark. For it to have been the owner, the mark must not
have been already appropriated (i.e., used) by someone else. At the time of respondent DGCIs
registration of the mark, the same was already being used by the petitioners, albeit abroad, of which
DGCIs president was fully aware.

PHILIP MORRIS V. CA (G.R. NO. 91332)

Facts:

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

Issues:

(1) Whether or not petitioners mark may be afforded protection under said laws;

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

Ruling:

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

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

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

ARCE SONS AND COMPANY V. SELECTA BISCUIT COMPANY (G.R. NO. L-14761)

Facts:

Respondent Selecta Biscuit Company applied for the registration of the word SELECTA to be used in its
bakery products. Petitioner Arce Sons opposed on the ground it had continuously used the mark
SELECTA and that it has already become identified with petitioners name and business. Petitioner
further contends that the marks are confusingly similar. Petitioner then filed before the court a
complaint of unfair competition against respondent which ruled in its favor. On the other hand, the
Director of Patents dismissed petitioners opposition.

Issue:

Whether or not petitioners mark has acquired secondary meaning in its favor.

Ruling: YES.

The word SELECTA, it is true, may be an ordinary or common word in the sense that may be used or
employed by any one in promoting his business or enterprise, but once adopted or coined in connection
with ones business as an emblem, sign or device to characterize its products, or as a badge of
authenticity, it may acquire a secondary meaning as to be exclusively associated with its products and
business. In this sense, its use by another may lead to confusion in trade and cause damage to its
business. And this is the situation of petitioner when it used the word SELECTA as a trade-mark. In this
sense, the law gives its protection and guarantees its use to the exclusion of all others.

The term SELECTA may be placed at par with the words Ang Tibay which this Court has considered
not merely as a descriptive term within the meaning of the Trade-mark Law but as a fanciful or coined
phrase, or a trade-mark. And holding that respondent was entitled to protection in the use of that trade-
mark, this Court made the following comment:

Even if Ang Tibay, therefore, were not capable of exclusive appropriation as a trade-mark, the
application of the doctrine of secondary meaning could nevertheless be fully sustained because, in any
event, by respondents long and exclusive appropriation with reference to an article on the market,
because geographically or otherwise descriptive, might nevertheless have been used so long and
exclusively by one producer with reference to his article that, in that trade and to that branch of the
purchasing public, the word or phrase has come to mean that article was his product. (Ang v.
Teodoro, supra.)

The rationale in the Ang Tibay case applies on all fours to the case of petitioner.
 ANG TIBAY V. TEODORO (G.R. NO. L-48226)

Facts:

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

Issues:

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

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

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

Ruling:

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

(2) NO. In view of the conclusion we have reached upon the first assignment of error, it is unnecessary
to apply here the doctrine of secondary meaning in trade-mark parlance. This doctrine is to the effect
that a word or phrase originally incapable of exclusive appropriation with reference to an article of the
market, because geographically or otherwise descriptive, might nevertheless have been used so long
and so exclusively by one producer with reference to his article that, in that trade and to that branch of
the purchasing public, the word or phrase has come to mean that the article was his product. We have
said that the phrase Ang Tibay, being neither geographic nor descriptive, was originally capable of
exclusive appropriation as a trade-mark. But were it not so, the application of the doctrine of secondary
meaning made by the Court of Appeals could nevertheless be fully sustained because, in any event, by
respondents long and exclusive use of said phrase with reference to his products and his business, it has
acquired a proprietary connotation.
(3) YES. In the present state of development of the law on Trade-Marks, Unfair Competition, and Unfair
Trading, the test employed by the courts to determine whether noncompeting goods are or are not of
the same class is confusion as to the origin of the goods of the second user. Although two noncompeting
articles may be classified under two different classes by the Patent Office because they are deemed not
to possess the same descriptive properties, they would, nevertheless, be held by the courts to belong to
the same class if the simultaneous use on them of identical or closely similar trade-marks would be likely
to cause confusion as to the origin, or personal source, of the second users 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 users goods. The
Court of Appeals found in this case that by uninterrupted and exclusive use since 1910 of respondents
registered trade-mark on slippers and shoes manufactured by him, it has come to indicate the origin and
ownership of said goods. It is certainly not farfetched to surmise that the selection by petitioner of the
same trade-mark for pants and shirts was motivated by a desire to get a free ride on the reputation and
selling power it has acquired at the hands of the respondent.

Del Monte vs Court of Appeals and Sunshine Sauce G.R. No. 78325 January 25, 1990

Facts:

Del Monte Corporation is an American corporation which is not engaged in business in the Philippines.
Though not engaging business here, it has given authority to Philippine Packing Corporation (Philpack)
the right to manufacture, distribute and sell in the Philippines various agricultural products, including
catsup, under the Del Monte trademark and logo. In 1965, Del Monte also authorized Philpack to
register with the Patent Office the Del Monte catsup bottle configuration. Philpack was issued a
certificate of trademark registration under the Supplemental Register.

Later, Del Monte and Philpack learned that Sunshine Sauce Manufacturing was using Del Monte bottles
in selling its products and that Sunshine Sauces logo is similar to that of Del Monte. The RTC of Makati
as well as the Court of Appeals ruled that there was no infringement because the trademarks used
between the two are different in designs and that the use of Del Monte bottles by Sunshine Sauce does
not constitute unfair competition because as ruled in Shell Company vs Insular Petroleum: selling oil in
containers of another with markings erased, without intent to deceive, was not unfair competition.

Issue:

Whether or not there is unfair competition and infringement in the case at bar.

Ruling: Yes

The Supreme Court recognizes that there really are distinctions between the designs of the logos or
trademarks of Del Monte and Sunshine Sauce. However, it has been that side by side comparison is not
the final test of similarity. Sunshine Sauces logo is a colorable imitation of Del Montes trademark. The
word catsup in both bottles is printed in white and the style of the print/letter is the same. Although
the logo of Sunshine is not a tomato, the figure nevertheless approximates that of a tomato. The person
who infringes a trade mark does not normally copy out but only makes colorable changes, employing
enough points of similarity to confuse the public with enough points of differences to confuse the
courts. What is undeniable is the fact that when a manufacturer prepares to package his product, he has
before him a boundless choice of words, phrases, colors and symbols sufficient to distinguish his product
from the others. When as in this case, Sunshine chose, without a reasonable explanation, to use the
same colors and letters as those used by Del Monte though the field of its selection was so broad, the
inevitable conclusion is that it was done deliberately to deceive.

The Supreme Court also ruled that Del Monte does not have the exclusive right to use Del Monte bottles
in the Philippines because Philpacks patent was only registered under the Supplemental Register and
not with the Principal Register. Under the law, registration under the Supplemental Register is not a
basis for a case of infringement because unlike registration under the Principal Register, it does not
grant exclusive use of the patent. However, the bottles of Del Monte do say in embossed letters: Del
Monte Corporation, Not to be Refilled. And yet Sunshine Sauce refilled these bottles with its catsup
products. This clearly shows the Sunshine Sauces bad faith and its intention to capitalize on the Del
Montes reputation and goodwill and pass off its own product as that of Del Monte.

Hickok v. CA GR L-44707 August 31, 1982

Facts:

Petitioner is a foreign corporation and all its products are manufactures by Quality House Inc. The latter
pays royalty to the petitioner. Hickok registered the trademark 'Hickok' earlier and used it in the sale of
leather wallets, key cases, money folds, belts, mens underwear, neckties, hankies, and men's socks.
While Sam Bun Liong used the same trademark in the sale of Marikina shoes. Both products have
different channels of trade. The Patent Office did not grant the registration, but the Court of Appeals
reversed the PPO decision.

Issue:

Is there infringement in this case?

Ruling: No.

Emphasis should be on the similarity of the products involves and not on the arbitrary classification or
the general description of their properties or characteristics. Also, the mere fact that one person has
adopted and used a trademark on his goods does not prevent the adoption and use of the same by
others on unrelated articles of different kind.

There is a different design and coloring of the trademark itself. The 'Hickok' trademark is in red with
white background in the middle of 2 branches of laurel (in light gold) while the one used by Sam Bun
Liong is the word 'Hickok ' in white with gold background between 2 branches of laurel in red with the
word 'shoes' also in red placed below the word 'Hickok'.
 Faberge v IAC Digest G.R. No. 71189, November 4, 1992

Facts:

Co Beng Kay applied for the registration of the trademark 'BRUTE' to be used it its underwear (briefs)
products. The petitioner opposed on the ground that there is similarity with their own symbol (BRUT,
Brut33 & Device) used on its aftershave, deodorant, cream shave, hairspray and hair shampoo/soaps
and that it would cause injury to their business reputation. It must be noted that the petitioner never
applied for registration of said trademark for its brief products. The Patent Office allowed Co Beng Kay
the registration and this was further affirmed by the Court of Appeals.

Issue:

Is there confusing similarity between the challenged marks and that its use would likely cause confusion
on the part of the purchasers?

Ruling: No.

Beng Kay may rightly appropriate the mark. In this case Sec. 20 (Philippine Intellectual Property Law) is
controlling. The certificate of registration issued confers the exclusive right to use its own symbol only to
those goods specified by the first user in the certificate, subject to any conditions or limitations stated
therein. Moreover, the two products are so dissimilar that a purchaser of one (a brief) would not be
misled or mistaken into buying the other (such as an aftershave).

Asia Brewery, Inc. vs Court of Appeals GR 103543 July 5, 1993

Facts:

In September 1988, San Miguel Corporation (SMC) sued Asia Brewery Inc. for allegedly infringing upon
their trademark on their beer product popularly known as San Miguel Pale Pilsen; that Asia Brewerys
Beer na Beer product, by infringing upon SMCs trademark has committed unfair competition as Beer
na Beer creates confusion between the two products. The RTC ruled in favor of Asia Brewery but the
Court of Appeals reversed the RTC.

ISSUE:

Whether or not Asia Brewery infringed upon the trademark of SMC.

HELD: No.

Both products are manufactured using amber colored steinie bottles of 320 ml. Both were labeled in a
rectangular fashion using white color paint. But other than these similarities, there are salient
differences between the two. As found by the Supreme Court, among others they are the following:
1. The dominant feature of SMCs trademark are the words San Miguel Pale Pilsen while that of Asia
Brewerys trademark is the word Beer. Nowhere in SMCs product can be seen the word Beer nor in
Asia Brewerys product can be seen the words San Miguel Pale Pilsen. Surely, someone buying Beer
na Beer cannot mistake it as San Miguel Pale Pilsen beer.

2. The bottle designs are different. SMCs bottles have slender tapered neck while that of Beer na Beer
are fat. Though both beer products use steinie bottles, SMC cannot claim that Asia Brewery copied the
idea from SMC. SMC did not invent but merely borrowed the steinie bottle from abroad and SMC does
not have any patent or trademark to protect the steinie bottle shape and design.

3. In SMC bottles, the words pale pilsen are written diagonally while in Beer na Beer, the words
pale pilsen are written horizontally. Further, the words pale pilsen cannot be said to be copied from
SMC for pale pilsen are generic words which originated from Pilsen, Czechoslovakia. Pilsen is a
geographically descriptive word and is non-registrable.

4. SMC bottles have no slogans written on them while Asia Brewerys bottles have a copyrighted slogan
written on them that is Beer na Beer.

5. In SMC bottles, it is expressly labeled as manufactured by SMC. In Asia Brewery beer products, it is
likewise expressly labeled as manufactured by Asia Brewery. Surely, there is no intention on the part of
Asia Brewery to confuse the public and make it appear that Beer na Beer is a product of SMC, a long-
established and more popular brand.

Justice Cruz Dissenting:

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 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.

MCDONALDS CORPORATION V. L.C. BIG MAK BURGER (G.R. NO. 143993)

Facts:

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

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

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

(3) Whether or not there is unfair competition.

Ruling:

(1) YES. A mark is valid if it is distinctive and thus not barred from registration under Section 4 of RA
166. However, once registered, not only the marks validity but also the registrants ownership of the
mark is prima facie presumed. The Big Mac mark, which should be treated in its entirety and not
dissected word for word, is neither generic nor descriptive. Generic marks are commonly used as the
name or description of a kind of goods, such as Lite for beer or Chocolate Fudge for chocolate soda
drink. Descriptive marks, on the other hand, convey the characteristics, functions, qualities or
ingredients of a product to one who has never seen it or does not know it exists, such as Arthriticare
for arthritis medication. On the contrary, Big Mac falls under the class of fanciful or arbitrary marks as
it bears no logical relation to the actual characteristics of the product it represents. As such, it is highly
distinctive and thus valid. Significantly, the trademark Little Debbie for snack cakes was found
arbitrary or fanciful.

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

Applying the dominancy test, the Court finds that respondents use of the Big Mak mark results in
likelihood of confusion. Aurally the two marks are the same, with the first word of both marks
phonetically the same, and the second word of both marks also phonetically the same. Visually, the two
marks have both two words and six letters, with the first word of both marks having the same letters
and the second word having the same first two letters. In spelling, considering the Filipino language,
even the last letters of both marks are the same. Clearly, respondents have adopted in Big Mak not
only the dominant but also almost all the features of Big Mac. Applied to the same food product of
hamburgers, the two marks will likely result in confusion in the public mind. Certainly, Big Mac and
Big Mak for hamburgers create even greater confusion, not only aurally but also visually. Indeed, a
person cannot distinguish Big Mac from Big Mak by their sound. When one hears a Big Mac or Big
Mak hamburger advertisement over the radio, one would not know whether the Mac or Mak ends
with a c or a k.
(3) YES. The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods, and (2) intent to deceive the public and defraud a competitor. The
confusing similarity may or may not result from similarity in the marks, but may result from other
external factors in the packaging or presentation of the goods. The intent to deceive and defraud may
be inferred from the similarity of the appearance of the goods as offered for sale to the public. Actual
fraudulent intent need not be shown. Unfair competition is broader than trademark infringement and
includes passing off goods with or without trademark infringement. Trademark infringement is a form of
unfair competition. Trademark infringement constitutes unfair competition when there is not merely
likelihood of confusion, but also actual or probable deception on the public because of the general
appearance of the goods. There can be trademark infringement without unfair competition as when the
infringer discloses on the labels containing the mark that he manufactures the goods, thus preventing
the public from being deceived that the goods originate from the trademark owner.

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

MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. vs. E.J. GALLO WINERY and THE
ANDRESONS GROUP, INC. GR 154342 July 14, 2004

FACTS:

On March 12, 1993, respondents sued petitioners in the RTC-Makati for trademark and trade name
infringement and unfair competition, with a prayer for damages and preliminary injunction.

They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winerys and Gallo and
Ernest & Julio Gallo trademarks established reputation and popularity, thus causing confusion,
deception and mistake on the part of the purchasing public who had always associated Gallo and Ernest
and Julio & Gallo trademarks with Gallo Winerys wines.

In their answer, petitioners alleged, among other affirmative defenses that: petitioners Gallo cigarettes
and Gallo Winerys wine were totally unrelated products. To wit:

1. Gallo Winerys GALLO trademark registration certificates covered wines only, and not cigarettes;

2. GALLO cigarettes and GALLO wines were sold through different channels of trade;

3. the target market of Gallo Winerys wines was the middle or high-income bracket while Gallo
cigarette buyers were farmers, fishermen, laborers and other low-income workers;
4. the dominant feature of the Gallo cigarette was the rooster device with the manufacturers name
clearly indicated as MIGHTY CORPORATION, while in the case of Gallo Winerys wines, it was the full
names of the founders-owners ERNEST & JULIO GALLO or just their surname GALLO;

On April 21, 1993, the Makati RTC denied, for lack of merit, respondents prayer for the issuance of a
writ of preliminary injunction.

On August 19, 1993, respondents motion for reconsideration was denied.

On February 20, 1995, the CA likewise dismissed respondents petition for review on certiorari.

After the trial on the merits, however, the Makati RTC, on November 26, 1998, held petitioners liable
for, permanently enjoined from committing trademark infringement and unfair competition with
respect to the GALLO trademark.

On appeal, the CA affirmed the Makati RTCs decision and subsequently denied petitioners motion for
reconsideration.

ISSUE:

Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for the reason
alone that they were purportedly forms of vice.

HELD:

Wines and cigarettes are not identical, similar, competing or related goods. In resolving whether goods
are related, several factors come into play:

the business (and its location) to which the goods belong

the class of product to which the good belong

the products quality, quantity, or size, including the nature of the package, wrapper or container

the nature and cost of the articles

the descriptive properties, physical attributes or essential characteristics with reference to their form,
composition, texture or quality

the purpose of the goods

whether the article is bought for immediate consumption, that is, day-to-day household items

the field of manufacture

 the conditions under which the article is usually purchased and

the articles of the trade through which the goods flow, how they are distributed, marketed,
displayed and sold.

The test of fraudulent simulation is to the likelihood of the deception of some persons in some measure
acquainted with an established design and desirous of purchasing the commodity with which that design
has been associated. The simulation, in order to be objectionable, must be as appears likely to mislead
the ordinary intelligent buyer who has a need to supply and is familiar with the article that he seeks to
purchase.

The petitioners are not liable for trademark infringement, unfair competition or damages.

GREAT WHITE SHARK ENTERPRISES, INC. v. DANILO M. CARALDE, JR. . G.R. No. 192294 . November 21,
2012

FACTS:

On July 31, 2002, Caralde filed before the Bureau of Legal Affairs (BLA), IPO a trademark application
seeking to register the mark "SHARK & LOGO" for his manufactured goods under Class 25, such as
slippers, shoes and sandals. Petitioner, a foreign corporation domiciled in Florida, USA, opposed the
application claiming to be the owner of the mark consisting of a representation of a shark in color. It
alleged that the mark pending registration is confusingly similar with theirs which is likely to confuse the
public.

Caralde averred that the subject marks are distinctively different from one another and easily
distinguishable.

The BLA Director ruled in favor of petitioners citing that the shark logo was both a dominant feature and
are similar and that both trademarks belong to the same class. The Director General of the IPO affirmed
this decision. The CA, however, reversed the decision citing that there were no confusing similarity.

ISSUE: Whether there is confusing similarity between the trademarks.

RULING: No.

A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily and is capable of

identifying and distinguishing the goods of one manufacturer or seller from those of another. Apart from
its commercial utility, the benchmark of trademark registrability is distinctiveness. Thus, a generic figure,
as that of a shark in this case, if employed and designed in a distinctive manner, can be a registrable
trademark device, subject to the provisions of the IP Code.
Irrespective of the Holistic and Dominancy tests, the Court finds no confusing similarity between the
subject marks. While both marks use the shape of a shark, the Court noted distinct visual and aural
differences between them.

As may be gleaned from the foregoing, the visual dissimilarities between the two (2) marks are evident
and significant, negating the possibility of confusion in the minds of the ordinary purchaser, especially
considering the distinct aural difference between the marks.

Finally, there being no confusing similarity between the subject marks, the matter of whether Great
White Sharks mark has gained recognition and acquired becomes unnecessary.

Dermaline, Inc. vs. Myra Pharmaceuticals, Inc., GR No. 190065, August 16, 2010

Facts:

Dermaline filed with the IPO an application to register the trademark Dermaline. Myra opposed this
alleging that the trademark resembles its trademark Dermalin and will cause confusion, mistake and
deception to the purchasing public. Dermalin was registered way back 1986 and was commercially
used since 1977. Myra claims that despite attempts of Dermaline to differentiate its mark, the dominant
feature is the term Dermaline to which the first 8 letters were identical to that of Dermalin. The
pronunciation for both is also identical. Further, both have 3 syllables each with identical sound and
appearance.

Issue:

Should the IPO allow the registration of the trademark Dermaline.

As Myra correctly posits, it has the right under Section 147 of R.A. No. 8293 to prevent third parties from
using a trademark, or similar signs or containers for goods or services, without its consent, identical or
similar to its registered trademark, where such use would result in a likelihood of confusion. In
determining confusion, case law has developed two (2) tests, the Dominancy Test and the Holistic or
Totality Test.

The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks
that might cause confusion or deception. Duplication or imitation is not even required; neither is it
necessary that the label of the applied mark for registration should suggest an effort to imitate. Relative
to the question on confusion of marks and trade names, jurisprudence noted two (2) types of confusion,
viz: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was purchasing the other; and (2) confusion of
business (source or origin confusion), where, although the goods of the parties are different, the
product, the mark of which registration is applied for by one party, is such as might reasonably be
assumed to originate with the registrant of an earlier product, and the public would then be deceived
either into that belief or into the belief that there is some connection between the two parties, though
inexistent.
Using this test, the IPO declared that both confusion of goods and service and confusion of business or
of origin were apparent in both trademarks. While it is true that the two marks are presented
differently, they are almost spelled in the same way, except for Dermalines mark which ends with the
letter "E," and they are pronounced practically in the same manner in three (3) syllables, with the ending
letter "E" in Dermalines mark pronounced silently. Thus, when an ordinary purchaser, for example,
hears an advertisement of Dermalines applied trademark over the radio, chances are he will associate it
with Myras. When one applies for the registration of a trademark or label which is almost the same or
that very closely resembles one already used and registered by another, the application should be
rejected and dismissed outright, even without any opposition on the part of the owner and user of a
previously registered label or trademark.

Further, Dermalines stance that its product belongs to a separate and different classification from
Myras products with the registered trademark does not eradicate the possibility of mistake on the part
of the purchasing public to associate the former with the latter, especially considering that both
classifications pertain to treatments for the skin.

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

Facts:

Levi Strauss Philippines, Inc. (Levis Philippines) is a licensee of Levis. After receiving information that
Diaz was selling counterfeit LEVIS 501 jeans in his tailoring shops in Almanza and Talon, Las Pias City,
Levis Philippines hired a private investigation group to verify the information. Surveillance and the
purchase of jeans from the tailoring shops of Diaz established that the jeans bought from the tailoring
shops of Diaz were counterfeit or imitations of LEVIS 501. Armed with search warrants, NBI agents
searched the tailoring shops of Diaz and seized several fake LEVIS 501 jeans from them. Levis
Philippines claimed that it did not authorize the making and selling of the seized jeans; that each of the
jeans were mere imitations of genuine LEVIS 501 jeans by each of them bearing the registered
trademarks, like the arcuate design, the tab, and the leather patch; and that the seized jeans could be
mistaken for original LEVIS 501 jeans due to the placement of the arcuate, tab, and two-horse leather
patch.

On his part, Diaz admitted being the owner of the shops searched, but he denied any criminal liability.
Diaz stated that he did not manufacture Levis jeans, and that he used the label LS Jeans Tailoring in
the jeans that he made and sold; that the label LS Jeans Tailoring was registered with the Intellectual
Property Office; that his shops received clothes for sewing or repair; that his shops offered made-to-
order jeans, whose styles or designs were done in accordance with instructions of the customers; that
since the time his shops began operating in 1992, he had received no notice or warning regarding his
operations; that the jeans he produced were easily recognizable because the label LS Jeans Tailoring,
and the names of the customers were placed inside the pockets, and each of the jeans had an LSJT red
tab; that LS stood for Latest Style; and that the leather patch on his jeans had two buffaloes, not two
horses.

Issue:
Whether there exists a likelihood of confusion between the trademarks of Levis and Diaz.

Ruling: No.

The Court held, through the application of the holistic test, that there was no likelihood of confusion
between the trademarks involved. Accordingly, the jeans trademarks of Levis Philippines and Diaz must
be considered as a whole in determining the likelihood of confusion between them. The maongpants or
jeans made and sold by Levis Philippines, which included LEVIS 501, were very popular in the
Philippines. The consuming public knew that the original LEVIS 501 jeans were under a foreign brand
and quite expensive. Such jeans could be purchased only in malls or boutiques as ready-to-wear items,
and were not available in tailoring shops like those of Diazs as well as not acquired on a made-to-
order basis. Under the circumstances, the consuming public could easily discern if the jeans were
original or fake LEVIS 501, or were manufactured by other brands of jeans.

Diaz used the trademark LS JEANS TAILORING for the jeans he produced and sold in his tailoring shops.
His trademark was visually and aurally different from the trademark LEVI STRAUSS & CO appearing on
the patch of original jeans under the trademark LEVIS 501. The word LS could not be confused as a
derivative from LEVI STRAUSS by virtue of the LS being connected to the word TAILORING, thereby
openly suggesting that the jeans bearing the trademark LS JEANS TAILORINGcame or were bought
from the tailoring shops of Diaz, not from the malls or boutiques selling original LEVIS 501 jeans to the
consuming public.

The prosecution also alleged that the accused copied the two horse design of the petitioner-private
complainant but the evidence will show that there was no such design in the seized jeans. Instead, what
is shown is buffalo design. Again, a horse and a buffalo are two different animals which an ordinary
customer can easily distinguish.

The prosecution further alleged that the red tab was copied by the accused. However, evidence will
show that the red tab used by the private complainant indicates the word LEVIS while that of the
accused indicates the letters LSJT which means LS JEANS TAILORING. Again, even an ordinary
customer can distinguish the word LEVIS from the letters LSJT.

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

Manuel C. Espiritu, Jr. vs Petron Corporation and Carmen J. Doloiras, doing business under the name
Kristina Patricia Enterprises GR No. 170981, November 4, 2009

Facts:
Petron Corporation sold and distributed LPG in cylinder tanks that carried its trademark GASUL and
Carmen Dolorias owned and operated Kristina Patricia Enterprises, the exclusive distributor of Gasul LPG
in the whole Sorsogon.

On the hand, Bicol Gas was also in the business of selling and distributing LPG in Sorsogon but theirs
carried the trademark Bicol Savers Gas.

In the course of trade and competition, any given distributor of LPGs at times acquired possession of
LPG cylinder tanks belonging to other distributors operating in the same area. They called these
captured cylinders. What KPE is doing is that they swap the cylinder tanks with Bicol Gas involving 30
tanks of Gasul with the permission of the Bicol Gas owners. While doing such transaction, KPEs
Manager noticed that Bicol Gas still has a number of Gasul tanks in its yard. It requested that those
tanks be returned. But the latter refused because those tanks will be sent to Batangas.

However, during the day to day delivery of Bicol Gas in the town of Sorsogon, KPEs Manager noticed
that the truck carrying mostly of Bicol Savers LPG tanks has one unsealed 50-kg Gasul and one 50-kg
Shellane tank. When Jose, KPEs Manager, inquired, the driver said that it was empty but when it was
checked, it was not. As a result, Petron and KPE filed a complaint for violation of RA 623 (illegally filing
up registered cylinder tanks) , section 155 (infringement of trademarks) and section 169.1 (unfair
competition) of the Intellectual Property Code.

Issues:

Whether or not the facts of the case warranted the filing of charges against the Bicol Gas people for:

a) Filing up the LPG tanks registered to another manufacturer without the latters consent in
violation of RA 623 as amended

b) Trademark infringement consisting in Bicol Gas use of trademark that is confusingly similar to
Petrons registered Gasul trademark in violation of Section 155 of RA 8293

c) Unfair competition consisting in passing off Bicol Gas- produced LPGs fro Petron produced
Gasul LPG in violation of Section 168.3 of RA 8293

Ruling:

a) The complaint adduced at the preliminary investigation shows that one 50 kg Petron Gasul LPG
found in the Bicol Gas truck belonged to their customer who had the same filled up by Bicol Gas. RA 623
as amended punishes any person who without the written consent of the manufacturer or seller of
gases contained in duly registered steel cylinder tanks, fills the steel cylinder or tanks for the purpose of
sale, disposal or trafficking, other than the purpose for which the manufacturer or seller registered the
same. Consequently, they may be prosecuted for that purpose.

b) But as for the crime of trademark infringement, section 155 of RA 8293 provides its
enumeration. However, KPE and Petron failed to prove that Bicol Gas painted on its own tanks Petrons
Gasul trademark or confusingly similar version to deceive its customers and cheat Petron.
c) As for the charge of unfair competition under section 168.3 of RA 8293, there is no showing that
Bicol has been giving its LPG tanks the general appearance of the tanks of Petrons Gasul. As already
stated, the truck full of Bicol Gas tank that the KPE manager apprehended on the road in Sorsogon just
have mixed up with the one authentic Gasul tank that belong to Petron.

Lastly, Bicol Gas is a Corporation. It is an entity separate and distinct from persons of its officer, directors
and stockholders. It has been held however, that corporate officers and employees through whose act,
default or omission of the crime, they will be held answerable for the crime but respondents failed to
show that Bicol Gas officers and stockholders participated in the crime.

Soceite Des Produits Nestle, S.A. Vs. Martin T. Dy, Jr., GR No. 172276, August 8, 2010

FACTS:

Petitioner is a foreign corporation organized under the laws of Switzerland and manufactures food
products and beverages. A Certificate of Registration was issued on April 7, 1969 by the BPTTT which as
a result Nestle owns the NAN trademark for its line of infant powdered milk (PRE-NAN, NAN-H.A.,
NAN-1, and NAN-2). It is classified under Class-6, diactetic preparations for infant feeding. Nestle sells
its NAN products throughout the Philippines and invested substantial amount of resources for its
marketing.

Respondent owns 5M Enterprises which imports Sunny Boy powdered milk from Australia, and repacks
the milk into plastic bags bearing the name NANNY, and is also classified as Class-6 full cream milk for
adults. Respondent sells the milk in parts of Mindanao.

In 1985, petitioner requested respondent to refrain from using NANNY and to stop infringing the NAN
trademark. Respondent did not act which forced Nestle to file in March 1, 1990 in the RTC of
Dumaguete, a complaint against respondent. The case was transferred to the RTC of Cebu (special court
for intellectual property rights). The RTC held that respondent was guilty of infringement. The trial court
stated that if determination of infringement shall only be limited on whether or not the mark used
would likely cause confusion, it would highly unlikely to happen in the instant case, as a comparison of
the plaintiffs NAN and defendants NANNY products are different. Thus the dominancy test cannot be
used because the deceptive tendency of the mark NANNY is not apparent from the essential features of
the registered trademark NAN. The RTC invoked however the case of Esso Standard Eastern vs. CA
where the SC said that as to whether trademark infringement exists depends upon for the most part
upon whether or not the goods are so related that the public may be, or is actually, deceived and misled
that they came from the same maker or manufacturer. For non-competing goods may be those which,
though they are not in actual competition, are so related to each other that it might reasonably be
assumed that they originate from one manufacturer, or from a common source. The trial court justified
that goods may become related for purposes of infringement when they belong to the same class, or
have same descriptive properties; when they possess the same physical attributes or essential
characteristics with reference to their form, composition, texture or quality. They also be related
because they serve the same purpose or are sold in grocery stores.
The RTC stated that considering that NANNY belongs to the same class as that of NAN because both are
food products, the defendants unregistered trade mark NANNY should be held an infringement to
plaintiffs registered trademark NAN because defendants use of NANNY would imply that it came from
the manufacturer of NAN.

The Court of Appeals reversed the TCs decision and found respondent not liable for infringement,
stating that the TCs application of the doctrine laid down by the SC in the Esso Standard case is
misplaced as the goods of the two contending parties bear similar marks or labels. In the instant case,
two dissimilar marks are involved. The CA stated that while it is true that both NAN and NANNY are milk
products and that the word NAN is contained in the word NANNY, there are more glaring dissimilarities
in the entirety of their trademarks as they appear in their respective labels and also in relation to the
goods to which they are attached. The discerning eye of the observer must focus not only on the
predominant words but also on the other features appearing in both labels. NAN products, which
consist of Pre-NAN, NAN-H-A, NAN-1 and NAN-2, are all infant preparations, while NANNY is a full cream
milk for adults in [sic] all ages. NAN milk products are sold in tin cans and hence, far expensive than the
full cream milk NANNY sold in three (3) plastic packs containing 80, 180 and 450 grams and worth P8.90,
P17.50 and P39.90 per milk pack. The labels of NAN products are of the colours blue and white and have
at the bottom portion an elliptical shaped figure containing inside it a drawing of nestling birds, which is
overlapped by the trade-name "Nestle." On the other hand, the plastic packs NANNY have a drawing of
milking cows lazing on a vast green field, back-dropped with snow-capped mountains and using the
predominant colours of blue and green. The word NAN are all in large, formal and conservative-like
block letters, while the word NANNY are all in small and irregular style of letters with curved ends. With
these material differences apparent in the packaging of both milk products, NANNY full cream milk
cannot possibly be an infringement of NAN infant milk.

ISSUE:

Whether or not respondent is liable for infringement

HELD Yes.

In Prosource International, Inc. vs. Horphag Research Management SA, the SC laid down the elements of
infringement under R.A. No. 166, and 8293:

For Section 22 of R.A. No. 166, the following constitute the elements of TM infringement:

A TM actually used in commerce and registered in the principal register of the PPO

Used by another person in connection with the sale of goods or services 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

TM is used for identical or similar goods

Such act is done without the consent of the TM registrant.

The elements of infringement under R.A. No. 8293 are:

The TM infringed is registered in the IPO, in trade name, the same need not be registered

The TM or Trade name is not reproduced, counterfeited, copied, or colorably imitated by the infringer

The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of
any goods; or the infringing mark or trade name is applied to labels, signs, prints, intended to be used
upon or in connection with such goods, business, or services;

The use or application of the infringing mark or trade name is likely to cause confusion or mistake or to
deceive purchasers or others as to the goods or services themselves or as to the source or origin of such
goods or services or the identity of such business

Without the consent of the trademark or trade name owner or assignee

Among the elements, the element of likelihood of confusion is the gravamen of trademark infringement,
and there are to types, confusion of goods which in the event the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was purchasing the other. And the other is
confusion of business which though the goods of the parties are different, the defendants product is
such as might reasonably be assumed to originate with the plaintiff, and the public would then be
deceived either into that belief or into the belief that there is some connection between the plaintiff and
defendant which, in fact does not exist.

There are two tests to determine the likelihood of confusion: the dominancy test and holistic test. In
light of the facts of the present case, the Court holds that the dominancy test is applicable.

The test of dominancy is in fact explicitly incorporated into law in Section 155.1 of the IPC which defines
infringement as the colourable imitation of a registered mark...or a dominant feature thereof. While
the SC agrees with the CAs enumeration of differences between the respective trademarks, the SC does
not agree that the holistic test is not the one applicable in the case as it is contrary to the elementary
postulate of the law on trademarks and unfair competition that that confusing similarity is to be
determined on the basis of visual, aural, connotative comparisons and overall impressions engendered
by the marks in controversy as they are encountered in the realities of the marketplace. The totality or
holistic test only relies on visual comparison whereas the dominancy test relies also on the aural and
connotative comparisons and overall impressions between the two trademarks.

Applying such test in the present case the SC finds that NANNY is confusingly similar to NAN as it is the
prevalent feature of petitioners infant powdered milk (PRE-NAN, NAN-H.A.., NAN-1 and NAN-2). NANNY
contains the prevalent feature NAN, and the first three letters of NANNY are exactly the same as the
letters of NAN. The aural effect is confusingly similar.

The decision of the RTC is reinstated.

Societe Des Produits Nestle, S.A. vs Court of Appeals G.R. No. 112012 April 4, 2001
Facts:

In 1984, CFC Corporation filed with the Bureau of Patents, Trademarks, and Technology Transfers an
application for the registration of its trademark Flavor Master an instant coffee. Nestle opposed the
application as it alleged that Flavor Master is confusingly similar to Nestle coffee products like Master
Blend and Master Roast. Nestle alleged that in promoting their products, the word Master has been
used so frequently so much so that when one hears the word Master it connotes to a Nestle product.
They provided as examples the fact that theyve been using Robert Jaworski and Ric Puno Jr. as their
commercial advertisers; and that in those commercials Jaworski is a master of basketball and that Puno
is a master of talk shows; that the brand of coffee equitable or fit to them is Master Blend and Master
Roast. CFC Corporation on the other hand alleged that the word Master is a generic and a descriptive
term, hence not subject to trademark. The Director of Patents ruled in favor of Nestle but the Court of
Appeals, using the Holistic Test, reversed the said decision.

ISSUE:

Whether or not the Court of Appeals is correct.

HELD: No.

The proper test that should have been used is the Dominancy Test. The application of the totality or
holistic test is improper since the ordinary purchaser would not be inclined to notice the specific
features, similarities or dissimilarities, considering that the product is an inexpensive and common
household item. The use of the word Master by Nestle in its products and commercials has made Nestle
acquire a connotation that if its a Master product it is a Nestle product. As such, the use by CFC of the
term MASTER in the trademark for its coffee product FLAVOR MASTER is likely to cause confusion or
mistake or even to deceive the ordinary purchasers.

In addition, the word MASTER is neither a generic nor a descriptive term. As such, said term can not
be invalidated as a trademark and, therefore, may be legally protected.

Generic terms are those which constitute the common descriptive name of an article or substance, or
comprise the genus of which the particular product is a species, or are commonly used as the name
or description of a kind of goods, or imply reference to every member of a genus and the exclusion of
individuating characters, or refer to the basic nature of the wares or services provided rather than to
the more idiosyncratic characteristics of a particular product, and are not legally protectable.

On the other hand, a term is descriptive and therefore invalid as a trademark if, as understood in its
normal and natural sense, it forthwith conveys the characteristics, functions, qualities or ingredients of
a product to one who has never seen it and does not know what it is, or if it forthwith conveys an
immediate idea of the ingredients, qualities or characteristics of the goods, or if it clearly denotes what
goods or services are provided in such a way that the consumer does not have to exercise powers of
perception or imagination.

Rather, the term MASTER is a suggestive term brought about by the advertising scheme of Nestle.
Suggestive terms are those which, in the phraseology of one court, require imagination, thought and
perception to reach a conclusion as to the nature of the goods. Such terms, which subtly connote
something about the product, are eligible for protection in the absence of secondary meaning. While
suggestive marks are capable of shedding some light upon certain characteristics of the goods or
services in dispute, they nevertheless involve an element of incongruity, figurativeness, or
imaginative effort on the part of the observer.