Intellectual Property Law

Submitted by: Kristine P. Pastores

2008-0315

Digest_Shangri-La International Hotel Management Ltd., v The Court of Appeals

GR No. 111580 June 21, 2001

Facts: On June 21, 1988, the Shangri-La International Hotel Management, Ltd., Shangri-
La Properties, Inc., Makati Shangri-La Hotel and Resort, Inc. and Kuok Philippine
Properties, Inc., filed with the Bureau of Patents, Trademarks and Technology Transfer
(BPTTT) a petition praying for the cancellation of the registration of the Shangri-La mark
and “S” device/logo issued to the Developers Group of Companies Inc., on the ground
that the same was illegally and fraudulently obtained and appropriated for the latter’s
restaurant business. The Shangri-La Group alleged that it is the legal and beneficial
owners of the subject mark and logo; that it has been using the said mark and logo for its
corporate affairs and business since March 1962 and caused the same to be specially
designed for their international hotels in 1975, much earlier than the alleged first use by
the Developers Group in 1982.

Likewise, the Shangri-La Group filed with the BPTTT its own application for registration
of the subject mark and logo. The Developers Group filed an opposition to the application.

Almost three (3) years later, the Developers Group instituted with the RTC a complaint
for infringement and damages with prayer for injunction. When the Shangri-La Group
moved for the suspension of the proceedings, the trial court denied such in a Resolution.

The Shangri-La Group filed a petition for certiorari before the CA but the CA dismissed
the petition for certiorari. Hence, the instant petition.

Issue: Whether or not the infringement case should be dismissed or at least suspended

Held: There can be no denying that the infringement case is validly pass upon the right
of registration. Section 161 of Republic Act No. 8293 provides to wit:

SEC. 161. Authority to Determine Right to Registration – In any action involving a

registered mark the court may determine the right to registration, order the
cancellation of the registration, in whole or in part, and otherwise rectify the
register with respect to the registration of any party to the action in the exercise
of this. Judgement and orders shall be certified by the court to the Director, who shall
make appropriate entry upon the records of the Bureau, and shall be controlled thereby.
(Sec. 25, R.A. No. 166a). (Emphasis provided)

To provide a judicious resolution of the issues at hand, the Court find it apropos to order
the suspension of the proceedings before the Bureau pending final determination of the
infringement case, where the issue of the validity of the registration of the subject
trademark and logo in the name of Developers Group was passed upon.

Case Digest_Asia Brewery v Court of Appeals, 224 SCRA 437

Facts: SMC filed a case against petitioner for infringement of trademark. It alleged that
the bottles used by Asia Brewery were confusingly similar to those used by SMC in the
packaging of its beer. The trial court held in favor of Asia Brewery but was reversed in the
appellate court.

Issue: Whether or not there was infringement

Held: Using the holistic test, wherein all circumstances were given consideration, there
was no infringement committed by petitioner. There are two tests available for colorable
imitation. One is the dominancy test. If the form, marks, contents, words of other special
arrangement or general appearance of the two marks or devices are such as would likely
mislead persons in the ordinary course of purchasing the genuine article, then the
similarity is such as would entitle the oppose to equitable protection.

Under the holistic test, on the other hand, the opposing trademarks are compared in their
entirety to determine confusing similarity.

Fruit of the Loom v CA, 133 SCRA 405

Facts: Petitioner is a corporation duly organized and existing under the laws of the State
of Rhode Island, USA. It is the registrant of the trademark Fruit of the Loom in the
Philippine Patent Office and was issued two Certificates of Registration, one of which was
in 1957 and the other in 1958.

Private respondent, a domestic corporation, is the registrant of the trademark Fruit for
Eve in the Philippine Patent Office. Both are involved in the merchandise of garments.

Petitioner filed a complaint for infringement of trademark and unfair competition against
private respondent, alleging that:

 The latter’s trademark is confusingly similar to the former’s, both trademarks being
used in women’s panties and other textile products
 That the hang tags used by private respondent is a colorable imitation of those of
the petitioner

Petitioner respondent alleged that there was no confusing similarity between the
trademarks. At the pre-trial, the following admissions were made:

 That the registered trademark Fruit for Eve bears the notice “Reg. Phil. Pat. Off.”
While that of Fruit of the Loom does not
 That at the time of its registration, the plaintiff filed no opposition thereto.

The lower court rendered a decision in favor of the petitioner, permanently enjoining
private respondent from using the trademark Fruit for Eve.

Both parties appealed to the Court of Appeals wherein the petitioner questioned the lower
court’s failure to award damages in its favor and private respondent sought the reversal
of the lower court’s decision.

The Court of Appeals rendered a decision reversing the lower court’s decision and
dismissing the petitioner’s complaint. The petitioner’s motion for reconsideration was
denied.

Issue: Whether or not there was infringement of trademark

Held: In cases involving infringement of trademark brought before this Court, it has been
consistently held that there is infringement of trademark when the use of the mark
involved would be likely to cause confusion or mistake in the mind of the public or to
deceive purchasers as to the origin or source of the commodity. The discerning eye of
the observer must focus not only on the predominant words but also on the other features
appearing in both labels in order that he may draw his conclusion where one is confusingly
similar to the other. The similarities of the competing trademarks in this case are
completely lost in the substantial differences in the design and general appearance of
their respective hangs tags. We have examined the two trademarks as they appear in
the hang tags submitted by the parties and we are impressed more by the dissimilarities
than by the similarities appearing therein. We hold that the trademarks Fruit of the Loom
and Fruit for Eve do not resemble each other as to confuse or deceive an ordinary
purchaser. The ordinary purchaser must be thought of as having, and credited with, at
least a modicum of intelligence to be able to see the obvious differences between the two
trademarks in question.

Case Digest_Francisco Joaquin Jr vs Franklin Drilon GR No. 108946, January 28,

1999
Facts: Petitioner BJ Productions Inc is the holder/grantee of Certificate of Copyright No.
M922 of Rhoda and Me, a dating game show aired from 1970 to 1977.

On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its
certificate of copyright specifying the show’s format and style of presentation. On July 14,
1991 while watching television, petitioner saw on RPN Channel 9 an episode of It’s a
Date, which was produced by IXL Productions Inc. On July 18, 1991, he wrote a letter to
private respondent Gabriel M. Zosa, president and general manager of IXL, informing
Zosa that BJPI had a copyright to Rhoda and Me and demanding that IXL discontinue
airing It’s a Date.

Private respondent apologized to petitioner and requested a meeting to discuss a

possible settlement. IXL, however, continued airing It’s a Date, prompting petitioner
Joaquin to send a second letter in which he reiterated his demand and warned that if IXL
did not comply, he would endorse the matter to his attorneys for proper legal action.

Meanwhile, private respondent sought to register IXL’s copyright to the first episode of
It’s a Date for which it was issued by the National Library a certificate of copyright on
August 14, 1991.

Upon complaint of petitioners, an information for violation of PD No. 49 was filed against
private respondent Zosa together with certain officers of RPN Channel 9. However,
private respondent Zosa sought a review of the resolution of the Assistant City Prosecutor
before the Department of Justice.

On August 12, 1992, respondent Secretary of Justice Franklin Drilon reversed the
Assistant City Prosecutor’s findings and directed him to move for the dismissal of the case
against private respondents. Petitioner filed a motion for reconsideration but his motion
was denied by respondent Secretary of Justice. Hence, this petition.

Issue: Whether or not public respondent committed grave abuse of discretion when he
invoked non-presentation of the master tape as being fatal to the existence of probable
cause to prove infringement, despite the fact that private respondents never raised the
same as controverted issue; and whether or not public respondent committed grave
abuse of discretion when he arrogated unto himself the determination of what is
copyrightable.

Held: The petition is denied. In fine, the supposed pronunciamento in said case regarding
the necessity for the presentation of the master tapes of the copyrighted 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 copyright 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.

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
the statute. Since copyright in published work is purely a statutory creation, a copyright
may be obtained only for a work falling within the statutory enumeration or description.
P.D. No. 49, section 2, in enumerating what are subject to copyright, refers to finished
works and not to concepts. The copyright does not extend to an idea, procedure, process,
system, method of operation, concept, principle or discovery regardless of the form in
which it is described, explained, illustrated, or embodied in such work.
Case Digest_La Chemise Lacoste SA vs Hon. Oscar Fernandez
GR No. L-63796
Facts: The petitioner is a foreign corporation, organized and existing under the laws of
France and not doing business in the Philippines, It is undeniable from the records that it
is the actual owner of the trademarks used on clothings and other goods specifically
sporting apparels sold in many parts of the world and which have been marketed in the
Philippines since 1964. The main basis of the private respondent’s case is its claim of
alleged prior registration.

Petitioner filed its application for registration of the trademark “Crocodile Device” and
“Lacoste”. The former was approved for publication while the latter was opposed by
Games and Garments in Inter Partes Case No. 1658. Petitioner filed a petition for the
Cancellation of registration.

On March 21, 1983, the petitioner filed with the National Bureau of Investigation (NBI) a
letter-complaint alleging the acts of unfair competition being committed by Hemandas and
requesting their assistance in his apprehension and prosecution. The NBI conducted an
investigation and subsequently filed with the respondent court two applications for the
issuance of search warrants which would authorize the search of the premises used and
occupied by the Lacoste Sports Center and Games and Garments both owned and
operated by Hemandas.

The respondent court issued search warrant for violation of Article 189 of the Revised
Penal Code. The NBI agents executed the two search warrants and as a result of the
search found and seized various goods and articles described in the warrants. Hemandas
filed a motion to quash the search warrants alleging that the trademark used by him was
different from petitioner’s trademark and that pending resolution before the Patent Office,
any criminal or civil action on the same subject matter and between the same parties
would be premature.

The petitioner filed its opposition to the motion arguing that the motion to quash was fatally
defective as it cited no valid ground for the quashal of the search warrants and that the
grounds alleged in the motion were absolutely without merit. The State Prosecutor
likewise filed his opposition on the grounds that the goods seized were instrument of a
crime and necessary for the resolution of the case on preliminary investigation and that
the release of the said goods would be fatal to the case of the People should prosecution
follow in court.

The respondent court was, however, convinced that there was no probable cause to
justify the issuance of the search warrants. Thus, in its order, the search warrants were
recalled and set aside and the NBI agents or officers in custody of the seized items were
ordered to return the same to Hemandas.

Issue: Whether or not the judge committed grave abuse of discretion amounting to lack
of jurisdiction in finding that the issuance of the search warrants is premature in the face
of the fact that Lacoste’s registration of the subject trademark is still pending with the
Patent Office with opposition from Hemandas and the subject trademarks had been
earlier registered by Hemandas in his name in the Supplemental Register of the Philippine
Patent Office.

Held: In complying with the order to decide without delay the cases specified in the
memorandum, the Director of Patents shall limit himself to the ascertainment of facts in
issues not resolved by this decision and apply the law as expounded by this Court to
those facts.

One final point, it is essential that we stress our concern at the seeming inability of law
enforcement officials to stem the tide of fake and counterfeit consumer items flooding the
Philippine market or exported abroad from our country. The greater victim is not so much
the manufacturer whose product is being faked but the Filipino consuming public and in
the case of exportations, our image abroad. No less than the President, in issuing
Executive Order No. 913 dated October 7, 1983 to strengthen the powers of the Minister
of Trade and Industry for the protection of consumers, stated that, among other acts, the
dumping of substandard, imitated, hazardous, and cheap goods, the infringement of
internationally known tradenames and trademarks, and the unfair trade practices of
business firms has reached such proportions as to constitute economic sabotage. We
buy a kitchen appliance, a household tool, perfume, face powder, other toilet articles,
watches, brandy or whisky, and items of clothing like jeans, T-shirts, neck, ties, etc. —
the list is quite length — and pay good money relying on the brand name as guarantee of
its quality and genuine nature only to explode in bitter frustration and genuine nature on
helpless anger because the purchased item turns out to be a shoddy imitation, albeit a
clever looking counterfeit, of the quality product. Judges all over the country are well
advised to remember that court processes should not be used as instruments to,
unwittingly or otherwise, aid counterfeiters and intellectual pirates, tie the hands of the
law as it seeks to protect the Filipino consuming public and frustrate executive and
administrative implementation of solemn commitments pursuant to international
conventions and treaties.

Case Digest_Del Monte Corporation vs CA 181 SCRA 410

Facts: Petitioner filed a case for trademark infringement and unfair competition against
Sunshine Sauce. The latter for a time used the bottles of Del Monte in packaging their
own catsup sauce. It also used bottles which were similar to those of petitioner.

Issue: Whether or not trademark infringement and unfair competition are present

Held: There is a distinction between infringement of trademark and unfair competition:

1. Infringement is the unauthorized use of a trademark while unfair competition is the

passing off of one’s goods as that of another
2. In infringement, fraudulent intent is unnecessary while it is otherwise for unfair
competition
3. In infringement, prior registration of the trademark is needed whereas in unfair
competition, registration is not necessary.

In assessing the two trademarks, side-by-side comparison is not the final test of similarity
because average buyers don’t make minute scrutiny of
label details.

Also, in testing if there has been prior registration, registration in the supplemental register
isn’t what the law contemplates.

Case Digest_Corporation, doing business under the name and style of ROLEX
MUSIC LOUNGE vs Hon. Reynaldo B. Daway
Facts: On January 26, 1998, respondents Montres Rolex S.A. and Rolex Centre Phil.
Limited, owners/proprietors of Rolex and Crown Device filed against petitioner 246
Corporation the instant suit for trademark infringement and damages with prayer for the
issuance of a restraining order or writ of preliminary injunction before RTC of Quezon
City. Respondents alleged that sometime in July 1996, petitioner adopted and since then,
has been using without authority the mark Rolex in its business name Rolex Music
Lounge as well as in its newspaper advertisements as Rolex Music Lounge, KTV, Disco
and Party Club.

Petitioner argued that respondents have no cause of action because no trademark

infringement exist, that no confusion would arise from the use by petitioner of the mark
Rolex considering that its entertainment business is totally unrelated to the items catered
by respondents such as watches, clocks, bracelets and parts thereof. It also contended
that the complaint was not properly verified and certified against forum shopping
considering that Atty. Alonzo Ancheta, the counsel of record of respondents who signed
the verification and certification, was not authorized to represent respondents.

Petitioner filed a motion for preliminary hearing on its affirmative defenses. Subsequently,
on motion of petitioner, the trial court issued a subpoena ad testificandum requiring Atty.
Alonzo Ancheta to appear at the preliminary hearing. Respondents, in the meantime, filed
a Comment and Opposition to the motion for preliminary hearing and a motion to quash
the subpoena ad testificandum.

With the denial of the motion for reconsideration on March 16, 2001, petitioner filed a
petition for certiorari with the Court of Appeals contending that the trial court gravely
abused its discretion in issuing the orders.

On November 28, 2002, the CA dismissed the petition. The motion for reconsideration
filed by petitioner was denied. Hence, this instant petition.

Issue: Whether or not: a. the trial court denied not only petitioner’s motion for preliminary
hearing on its affirmative defenses but its motion to dismiss as well; b. if the answer is in
the affirmative, whether or not the trial court gravely abused its discretion in denying said
motions; c. whether the trial court gravely abused its discretion in quashing the subpoena
ad testificandum issued against Atty. Ancheta.

Held: the petition filed by petitioner is denied.

In the case at bar, the Court of Appeals did not err in finding that no abuse of discretion
could be ascribed to the trial court’s denial of petitioner’s motion for preliminary hearing
on its affirmative defenses with motion to dismiss. The issue of whether or not a trademark
infringement exists, is a question of fact that could best be determined by the trial court.

Under the old Trademark Law where the goods for which the identical marks are used
are unrelated, there can be no likelihood of confusion and there is therefore no
infringement in the use by the junior user of the registered mark on the entirely different
goods. This ruling, however, has been to some extent, modified by Section 123.1(f) of the
Intellectual Property Code (Republic Act No. 8293), which took effect on January 1, 1998.

A junior user of a well-known mark on goods or services which are not similar to the goods
or services, and are therefore unrelated, to those specified in the certificate of registration
of the well-known mark is precluded from using the same on the entirely unrelated goods
or services, subject to the following requisites, to wit:
1. The mark is well-known internationally and in the Philippines. Under Rule
102 of the Rules and Regulations on Trademarks, Service Marks, Trade
Names and Marked or Stamped Containers,17 in determining whether a
mark is well known, the following criteria or any combination thereof may be
taken into account:

(a) the duration, extent and geographical area of any use of the mark,
in particular, the duration, extent and geographical area of any
promotion of the mark, including advertising or publicity and
presentation, at fairs or exhibitions, of the goods and/or services to
which the mark applies;

(b) the market share in the Philippines and in other countries, of the
goods and/or services to which the mark applies;

(c) the degree of the inherent or acquired distinction of the mark;

(d) the quality-image or reputation acquired by the mark;

(e) the extent to which the mark has been registered in the world;

(f) the exclusivity of the registration attained by the mark in the world;

(g) the extent to which the mark has been used in the world;

(h) the exclusivity of use attained by the mark in the world;

(i) the commercial value attributed to the mark in the world;

(j) the record of successful protection of the rights in the mark;

(k) the outcome of litigations dealing with the issue of whether the
mark is a well-known mark; and

(l) the presence of absence of identical or similar marks validly

registered for or used on identical or similar goods or services and
owned by persons other than the person claiming that his mark is a
well-known mark.

(b) the market share in the Philippines and in other countries, of the
goods and/or services to which the mark applies;

(c) the degree of the inherent or acquired distinction of the mark;

(d) the quality-image or reputation acquired by the mark;

(e) the extent to which the mark has been registered in the world;

(f) the exclusivity of the registration attained by the mark in the world;

(g) the extent to which the mark has been used in the world;

(h) the exclusivity of use attained by the mark in the world;

(i) the commercial value attributed to the mark in the world;

(j) the record of successful protection of the rights in the mark;

 (k) the outcome of litigations dealing with the issue of whether the
mark is a well-known mark; and

(l) the presence of absence of identical or similar marks validly

registered for or used on identical or similar goods or services and
owned by persons other than the person claiming that his mark is a
well-known mark.

2. The use of the well-known mark on the entirely unrelated goods or

services would indicate a connection between such unrelated goods or
services and those goods or services specified in the certificate of
registration in the well known mark. This requirement refers to the likelihood
of confusion of origin or business or some business connection or
relationship between the registrant and the user of the mark.

3. The interests of the owner of the well-known mark are likely to be damaged. For
instance, if the registrant will be precluded from expanding its business to those unrelated
good or services, or if the interests of the registrant of the well-known mark will be
damaged because of the inferior quality of the good or services of the user.

Case Digest_Emerald Garment Manufacturing Corporation vs Hon. Court of

Appeals

Facts: On September 18, 198, private respondent H.D. Lee Co., Inc, a foreign
corporation organized under the laws of Delaware, USA filed with the Bureau of Patents,
Trademarks & Technology a Petition for Cancellation of Registraion No. SR 5054 for the
trademark Stylistic Mr. Lee used on skirts, jeans, blouses, socks, briefs, jackets, jogging
suits, dresses, shorts, shirts and lingerie under Class 25, issued on October 27 1980 in
the name of petitioner Emerald Garment Manufacturing Corporation, a domestic
corporation organized and existing under Philippine laws.

Private respondent invoking Sec 37 of RA No. 166 (Trademark Law) and Art VIII of the
Paris Convention for the Protection of Industrial Property, averred that petitioner’s
trademark “so closely resembled its own trademark, LEE as previously registered and
used in the Philippines, and not abandoned, as to be likely, when applied to or used in
connection with petitioner’s goods, to cause confusion, mistake and deception on the part
of the purchasing public as to the origin of the goods.”

Petitioner contended that its trademark was entirely and unmistakably different from that
of private respondent and that its certificate of registration was legally and validly granted.

Petitioner caused the publication of its application for registration of the trademark
“STYLISTIC MR. LEE” in the Principal Register.

Private respondent filed a notice of opposition to petitioner’s application for registration

also on grounds that petitioner’s trademark was confusingly similar to its “LEE” trademark.

The Director of Patents rendered a decision granting private respondent’s petitioner for
cancellation and opposition to registration.

Moreover, the Director of Patents, using the test of dominancy, declared that petitioner’s
trademark was confusingly similar to private respondent’s mark because “it is the word
Lee which draws the attention of the buyer and leads him to conclude that the goods
originated from the same manufacturer. It is undeniably the dominant feature of the mark.

Petitioner appealed to the CA and on August 8, 1988, it filed with the BPTTT a Motion to
Stay Execution of the 19 July 1988 decision of the Director of Patents on grounds that the
same would cause it great and irreparable damage and injury. Private respondent
submitted its opposition on August 22, 1988.

The CA promulgated its decision affirming the decision of the Director of Patents.
Petitioner filed a motion for reconsideration. The CA issued a resolution rejecting
petitioner’s motion for reconsideration.

Issue: Whether or not the CA erred in ruling that the defense of estoppels by laches must
be raised in the proceedings before the Bureau of Patents, trademarks and technology
transfer.

Held: Premises considered, the questioned decision and resolution are reversed and set
aside.

For lack of adequate proof of actual use of its trademark in the Philippines prior to
petitioner's use of its own mark and for failure to establish confusing similarity between
said trademarks, private respondent's action for infringement must necessarily fail.

In the case at bench, however, we reverse the findings of the Director of Patents and the
Court of Appeals. After a meticulous study of the records, we observe that the Director of
Patents and the Court of Appeals relied mainly on the registration certificates as proof of
use by private respondent of the trademark "LEE" which, as we have previously discussed
are not sufficient. We cannot give credence to private respondent's claim that its "LEE"
mark first reached the Philippines in the 1960's through local sales by the Post Exchanges
of the U.S. Military Bases in the Philippines based as it was solely on the self-serving
statements of Mr. Edward Poste, General Manager of Lee (Phils.), Inc., a wholly owned
subsidiary of the H.D. Lee, Co., Inc., U.S.A., herein private respondent.

The determination as to who is the prior user of the trademark is a question of fact and it
is this Court's working principle not to disturb the findings of the Director of Patents on
this issue in the absence of any showing of grave abuse of discretion. The findings of
facts of the Director of Patents are conclusive upon the Supreme Court provided they are
supported by substantial evidence.

Case Digest_Pacita Habana v Felicidad Robles, GR No. 131522, July 19, 1999

Facts: Petitioner are authors and copyright owners of duly issued certificates of copyright
registration covering their published works, produced through their combined resources
and efforts, entitled College English for Today, Books 1 and 2, and Workbook for College
Freshman English, Series 1.

Respondent Robles and Goodwill Trading Co., Inc are the author/publisher and
distributor/seller of another published work entitled Developing English proficiency, books
1 and 2 (1985 edition) which book was covered by copyrights issued to them.

In the course of revising their published works, petitioners scouted and looked around
various bookstores to check on other textbooks dealing with the same subject matter. By
chance they came upon the book of respondent Robles and upon perusal of said book
they were surprised to see that the book was strikingly similar to the contents, scheme of
presentation, illustrations and illustrative examples in their own book, CET.

After an itemized examination and comparison of the two books, petitioners found that
several pages of the respondent’s book are similar, if not all together a copy of petitioners’
book, which is a case of plagiarism and copyright infringement.

Petitioners then made demands for damages against respondents and also demanded
that they cease and desist from further selling and distributing to the general public the
infringed copies of respondent Robles’ works.

However, respondents ignored the demands, hence, petitioners filed with the RTC a
complaint for Infringement and/or unfair competition with damages against private
respondents.

Respondent Robles was impleaded in the suit because she authored and directly
committed the acts of infringement complained of, while respondent Goodwill was
impleaded as the publisher and joint c-owner of the copyright certificates of registration
covering the two books authored and caused to be published by respondent Robles with
obvious connivance with one another.

Robles filed a motion for a bill of particulars which the trial court approved. Petitioners
complied with the desired particularization, and furnished respondent Robles the specific
portions inclusive of pages and lines of the published and copyrighted books of the
petitioners which were transposed, lifted, copied, and plagiarized and/or otherwise found
their way into respondent’s book.

After the trial on the merits, the trial court rendered its judgment in favor of the respondent.
The petitioners filed their notice of appeal with the trial court. The CA rendered its
decision in favor of respondents Robles and Goodwill. Hence, this petition.

Issue: Whether or not there was copyright infringement

Held: The petition is granted. In cases of infringement, copying alone is not what is
prohibited. The copying must produce an injurious effect. Here, the injury consists in that
respondent Robles lifted from petitioners’ book materials what were the result of the
latter’s research work and compilation and misrepresented them as her own. She
circulated the book DEP for commercial use and did not acknowledge petitioners as her
source.
Hence, there is a clear case of appropriation of copyrighted work for her benefit that
respondent Robles committed. Petitioners’ work as authors is the product of their long
and assiduous research and for another to represent it as her own is injury enough. In
copyrighting books the purpose is to give protection to the intellectual product of an
author. This is precisely what the law on copyright protected, under Section 184.1 (b).
Quotations from a published work if they are compatible with fair use and only to the
extent justified by the purpose, including quotations from newspaper articles and
periodicals in the form of press summaries are allowed provided that the source and the
name of the author, if appearing on the work, are mentioned.
In the case at bar, the least that respondent Robles could have done was to acknowledge
petitioners Habana et. al. as the source of the portions of DEP. The final product of an
author’s toil is her book. To allow another to copy the book without appropriate
acknowledgment is injury enough.
Case Digest_Pearl & Dean (Phil.), Incorporated v Shoemart Incorporated
GR No. 148222 August 15, 2003

Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units
referred to as light boxes. These units utilize specially printed posters sandwiched
between plastic sheets and illuminated with backlights. It was able to secure registration
over these illuminated display units. The advertising light boxes were marketed under the
trademark “Poster Ads”.

In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in SM North Edsa. However, since SM North Edsa was
under construction, SMI offered as alternative SM Makati and Cubao. During the signing
of the Contract, SMI only returned the Contract with SM Makati. Manager of petitioner
reminded SMI that their agreement includes SM Cubao. However, SMI did not bother to
reply. Instead, respondent informed petitioner that they are rescinding the contract for SM
Makati due to non-performance.

Two years later, SMI engaged the services of EYD Rainbow Advertising to make the light
boxes. These were delivered in a staggered basis and installed at SM Megamall and SM
City. In 1989, petitioner received reports that exact copy of its light boxes was installed
by SMI. It further discovered that North Edsa Marketing Inc. (NEMI), sister company of
SMI, was set up primarily to sell advertising space in lighted display units located in SMI’s
different branches. Petitioner sent letters to respondents asking them to cease using the
light boxes and the discontinued use of the trademark “Poster Ads”.

Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for
infringement of trademark and copy right, unfair competition and damages. SMI
maintained that it independently developed its poster panels using commonly known
techniques and available technology without notice of or reference to P&D’s copyright. In
addition, it said that registration of “Poster Ads” obtained by petitioner was only for
stationeries such as letterheads, envelopes and the like. “Poster Ads” is a generic term
which cannot be appropriated as trademark, and, as such, registration of such mark is
invalid. It also stressed that P&D is not entitled to the reliefs sought because the
advertising display units contained no copyright notice as provided for by law.

RTC found SMI and NEMI jointly and severally liable for infringement of copyright and
trademark. CA reversed saying that it agreed with SMI that what was copyrighted was the
technical drawings only and not the light boxes. Light boxes cannot be considered as
either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be
properly classified as copyrightable class “O” work. In addition, CA stressed that the
protective mantle of the Trademark Law extends only to the goods used by the first user
as specified in its certificate of registration. The registration of the trademark “Poster Ads”
covers only stationeries such as letterheads, envelopes and calling cards and newsletter.

Issue: (1) If the engineering or technical drawings of an advertising display unit are
granted copyright protection is the light box depicted in such drawings ipso facto also
protected by such copyright? (2) Should the light box be registered separately? (3) Can
the owner of the registered trademark legally prevent others from using such mark if it is
mere abbreviation of a term descriptive of his goods, services or business?

Held: 1. No. Copyright is purely statutory. As such, the rights are limited to what the
statute confers. It may be obtained and enjoyed only with respect to the subjects and by
the persons, and on the terms and conditions specified in the statute. Accordingly, it can
cover only the works falling within the statutory enumeration or description. Petitioner
secured copyright under classification class “O” work. Thus, copyright protection
extended only to the technical drawings and not to the light box itself because the latter
was not at all in the category of “prints, pictorial illustrations, advertising copies, labels,
tags and box wraps. What the law does not include, it excludes, and for the good reason:
the light box was not a literary or artistic piece which could be copyrighted under the
copyright law. And no less clearly, neither could the lack of statutory authority to make
the light box copyrightable be remedied by the simplistic act of entitling the copyright
certificate issued by the National Library as “Advertising Display Units”. It must be noted
that copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation.

2. Yes. Petitioner never secured a patent for the light boxes. It therefore acquired no
patent rights which could have protected its invention, if in fact it really was. And because
it had no patent, petitioner could not legally prevent anyone from manufacturing or
commercially using the contraption. To be able to effectively and legally preclude others
from copying and profiting from the invention, a patent is a primordial requirement. No
patent, no protection. The ultimate goal of a patent system is to bring new designs and
technologies into the public through disclosure. Ideas, once, disclosed to the public
without protection of a valid patent, are subject to appropriation without significant
restraint. The Patent Law has a three-fold purpose: first, patent law seeks to foster and
reward invention; second, it promotes disclosures of inventions to stimulate further
innovation and to permit the public to practice the invention
once the patent expires; third, the stringent requirements for patent protection seek to
ensure that ideas in the public domain remain there for the free use of the public. It is only
after an exhaustive examination by the patent office that patent is issued. Therefore, not
having gone through the arduous examination for patents, petitioner cannot exclude other
s from the manufacture, sale or commercial use of the light boxes on the sole basis of its
copyright certificate over the technical drawings.

3. Court agrees with CA that the certificate of registration issued by the Director of Patents
can confer the exclusive right to use its own symbol only to those goods specified in the
certificate, subject to any conditions and limitations specified in the certificate. One who
has adopted and used a trademark on his goods does not prevent the adoption and use
of the same trademark by others for products which are of a different description.
Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of
petitioner to secure a trademark registration for specific use on the light boxes meant that
there could not have been any trademark infringement since registration was an essential
element thereof.

There is no evidence that petitioner’s use of “poster Ads” was distinctive or well-known.
As noted by CA, petitioner’s expert witness himself had testified that “Poster Ads” was
not too generic a name. SO it was difficult to identify it with any company. This fact also
prevented the application of the doctrine of secondary meaning. “Poster Ads” was generic
and incapable of being used as a trademark because it was used in the field of poster
advertising the very business engaged in by petitioner. Secondary meaning means that
a word or phrase originally incapable of exclusive appropriation with reference to an
article in the market might nevertheless have been used for so long and so exclusively
by one producer with reference to his article that , in the trade and to that branch of the
purchasing public, the word or phrase has come to mean that the article was his property.
PETITION WAS DENIED

Case Digest_McDonald’s Corporation v Macjoy Fastfood Corporation, GR No.

166115 February 2, 2007

Facts: On 14 March 1991, respondent MacJoy Fastfood Corporation, a domestic

corporation engaged in the sale of fast food products in Cebu City, filed with the then
Bureau of Patents, Trademarks and Technology Transfer (BPTT), now the Intellectual
Property Office (IPO), an application for the registration of the trademark "MACJOY &
DEVICE" for fried chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos,
sandwiches, halo-halo and steaks under classes 29 and 30 of the International
Classification of Goods.

Petitioner McDonald’s Corporation, filed a verified Notice of Opposition against the

respondent’s application claiming that the trademark "MACJOY & DEVICE" so resembles
its corporate logo, otherwise known as the Golden Arches or "M" design, and its marks
"McDonalds," McChicken," "MacFries," etc. (hereinafter MCDONALD’S marks) such that
when used on identical or related goods, the trademark applied for would confuse or
deceive purchasers into believing that the goods originate from the same source or origin.

Also, petitioner alleged that the respondent’s use and adoption in bad faith of the
"MACJOY & DEVICE" mark would falsely tend to suggest a connection or affiliation with
petitioner’s restaurant services and food products, thus, constituting a fraud upon the
general public and further cause the dilution of the distinctiveness of petitioner’s
registered and internationally recognized MCDONALD’S marks to its prejudice and
irreparable damage.

IPO ruled that the predominance of the letter "M," and the prefixes "Mac/Mc" in both the
"MACJOY" and the "MCDONALDS" marks lead to the conclusion that there is confusing
similarity between them especially since both are used on almost the same products
falling under classes 29 and 30 of the International Classification of Goods, i.e., food and
ingredients of food, sustained the petitioner’s opposition and rejected the respondent’s
application. (IPO used the dominancy test).

IPO denied MR. CA reversed the IPO decision, ruling that there was no confusing
similarity between the marks "MACJOY" and "MCDONALD’S," for the ff. reasons:

1. The word "MacJoy" is written in round script while the word "McDonald’s" is written
in single stroke gothic;
2. The word "MacJoy" comes with the picture of a chicken head with cap and bowtie
and wings sprouting on both sides, while the word "McDonald’s" comes with an
arches "M" in gold colors, and absolutely without any picture of a chicken;
3. The word "MacJoy" is set in deep pink and white color scheme while "McDonald’s"
is written in red, yellow and black color combination;
4. The façade of the respective stores of the parties are entirely different.
Respondent’s restaurant is set also in the same bold, brilliant and noticeable color
scheme as that of its wrappers, containers, cups, etc., while Petitioner’s restaurant
is in yellow and red colors, and with the mascot of "Ronald McDonald" being
prominently displayed therein."

Issue: 1. Whether or not the dominancy test should be applied, instead of the holistic test.
2. Whether or not there is a confusing similarity between MACJOY and MCDONALDS
trademarks as to justify the IPO’s rejection of Macjoy’s trademark application.

Held:

1. YES. In determining similarity and 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 or deception. 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. In recent cases with a similar factual milieu as here, the
Court has consistently used and applied the dominancy test in determining confusing
similarity or likelihood of confusion between competing trademarks. Under the dominancy
test, courts give greater weight to the similarity of the appearance of the product arising
from the adoption of the dominant features of the registered mark, disregarding minor
differences. Courts will consider more the aural and visual impressions created by the
marks in the public
mind, giving little weight to factors like prices, quality, sales outlets and market segments.
Applying the dominancy test to the instant case, the Court finds that herein petitioner’s
"MCDONALD’S" and respondent’s "MACJOY" marks are confusingly similar with each
other such that an ordinary purchaser can conclude an association or relation between
the marks.

2. YES. Both marks use the corporate "M" design logo and the prefixes "Mc" and/or "Mac"
as dominant features. The first letter "M" in both marks puts emphasis on the prefixes
"Mc" and/or "Mac" by the similar way in which they are depicted i.e. in an arch like,
capitalized and stylized manner. It is the prefix "Mc," an abbreviation of "Mac," which
visually and aurally catches the attention of the consuming public. Both trademarks are
used in the sale of fastfood products. Indisputably, the respondent’s trademark application
for the "MACJOY & DEVICE" trademark covers goods under Classes 29 and 30 of the
International Classification of Goods, namely, fried chicken, chicken barbeque, burgers,
fries, spaghetti, etc. McDonald’s registered trademark covers goods similar if not identical
to those covered by the respondent’s application. Predominant features such as the "M,"
"Mc," and "Mac" appearing in both McDonald’s marks and the MACJOY & DEVICE" easily
attract the attention of would-be customers. Even non-regular customers of their fastfood
restaurants would readily notice the predominance of the "M" design, "Mc/Mac" prefixes
shown in both marks. Such that the common awareness or perception of customers that
the trademarks McDonalds mark and MACJOY & DEVICE are one and the same, or an
affiliate, or under the sponsorship of the other is not far-fetched. By reason of the
respondent’s implausible and insufficient explanation as to how and why out of the many
choices of words it could have used for its tradename and/or trademark, it chose the word
"MACJOY," the only logical conclusion deducible therefrom is that the respondent would
want to ride high on the established reputation and goodwill of the MCDONALD’s marks,
which, as applied to petitioner’s restaurant business and food products, is undoubtedly
beyond question. When one applies for the registration of a trademark or label which is
almost the same or 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, this not only
to avoid confusion on the part of the public, but also to protect an already used and
registered trademark and an established goodwill. WHEREFORE, the instant petition is
GRANTED. Accordingly, the assailed Decision and Resolution of the Court of Appeals in
CA-G.R. SP NO. 57247, are REVERSED and SET ASIDE and the Decision of the
Intellectual Property Office in Inter Partes Case No. 3861 is REINSTATED.