Trademarks, Unfair Competition and Trade Secrets
Ateneo Law School, Summer 2015
Atty. Antonio Ray Ortiguera
TRADEMARKS
I. CONCEPT AND HISTORY OF TRADEMARKS AND
TRADEMARK PROTECTION
A. What is a Trademark?
SEC. 121. Definitions. – As used in Part III, the following
terms have the following meanings:
121.1. "Mark" means any visible sign capable of
distinguishing the goods (trademark) or services (service mark)
of an enterprise and shall include a stamped or marked
container of goods
Class notes:
Things that may be trademarked:
• words, slogans, people’s names, symbols
• combination of words and logo
• dress (design of a product or package)
• sound, scent, color, atmosphere – does not yet apply
in PH
• certification marks – certifies the nature or origin of
the goods or services to which it has been applied.
This includes, for example, region or location or origin
of materials of construction, method or mode of
manufacture or provision, quality assurance, quality
of the goods
• collective mark – means any visible sign designated
as such in the application for registration and capable
of distinguishing the origin or any other common
characteristic, including the quality of goods or
services of different enterprises which use the sign
under the control of the registered owner of the
collective mark.
Important characteristics of trademark:
1. must be visible
2. must be distinctive
3. must have been used
A.1. DISTILLERIA WASHINGTON V. CA, G.R. NO.
120961, OCTOBER 17, 1996 AND OCTOBER 2, 1997
Gin bottles case. Gin bottles with blown-in marks of La
Tondena and San Miguel Gin were acquired by Distelleria
Washington through junk shops and filled in with Gin Seven.
La Tondena sued for recovery of 18,157 empty white flint
bottles bottles, citing RA 623 which requires written consent of
the registered manufacturer before use or possession of the
bottles with registered marks.
• Incorporeal right is separate and distinct from the
material object it is attached to.
ADL
• A trademark is “[A]n intellectual creation that
is susceptible to ownership and ... gives rise to
its own elements of jus posidendi, jus utendi,
jus fruendi, jus disponendi, and jus abutendi,
along with the applicable jus lex..
• The incorporeal right... is distinct from the
property in the material object subject to it.
Ownership in one does not necessarily vest
ownership in the other... [T]he transfer or
assignment of the intellectual property will not
necessarily constitute a conveyance of the
thing it covers, nor would a conveyance of the
latter imply the transfer or assignment of the
intellectual right.”
A.2. HANOVER STAR MILLING CO. V. METCALF, 240
U.S. 403 (1916) – ‘Tea Rose’ flour case
The Hanover Star Milling Company, an Illinois corporation
engaged in the manufacture of flour in that state, filed a bill in
equity in the United States district court for the middle district
of Alabama, against Metcalf, a citizen of the state of Alabama
and a merchant engaged in the business of selling flour at
Greenville, Butler county, in that state, to restrain alleged
trademark infringement and unfair competition.
Trademarks are to be classified as property rights, but
trademark is just an instrument, what you are
protecting is the goodwill.
Held:
• The trademark is treated as merely a protection for
the good will, and not the subject of property
except in connection with an existing business.
• The redress that is accorded in trademark cases is based
upon the party's right to be protected in the good will
of a trade or business. The primary and proper function of
a trademark is to identify the origin or ownership of
the article to which it is affixed.
• Common-law trademarks, and the right to their exclusive
use, are, of course, to be classed among property
rights, but only in the sense that a man's right to the
continued enjoyment of his trade reputation and the
good will that flows from it, free from unwarranted
interference by others, is a property right, for the
protection of which a trademark is an instrumentality.
• The redress that is accorded in trademark cases is
based upon the party's right to be protected in the
good will of a trade or business. The primary and
proper function of a trademark is to identify the
origin or ownership of the article to which it is
affixed.
o Where a party has been in the habit of labeling
his goods with a distinctive mark, so that
purchasers recognize goods thus marked as
being of his production, others are debarred from
applying the same mark to goods of the same
description, because to do so would in effect
represent their goods to be of his production and
would tend to deprive him of the profit he might
make through the sale of the goods which the
purchaser intended to buy. Courts afford
Page 1
 redress or relief upon the ground that a
party has a valuable interest in the good
will of his trade or business, and in the
trademarks adopted to maintain and
extend it.
• THE RIGHT GROWS OUT OF USE, NOT MERE
ADOPTION.
o He has no property in that mark per se, any
more than in any other fanciful
denomination he may assume for his own
private use, otherwise than with reference
to his trade. If he does not carry on a trade in
iron, but carries on a trade in linen, and stamps a
lion on his linen, another person may stamp a
lion on iron; but when he has appropriated a
mark to a particular species of goods, and
caused his goods to circulate with this
mark upon them, the court has said that no
one shall be at liberty to defraud that man
by using that mark, and passing off goods of
his manufacture as being the goods of the owner
of that mark.'
Class notes:
• This case establishes the principle that the TM
must be used. You cannot associate a mark with goods
or products unless you have used it; prior use is the
determination; a person has no rights over the mark until
he has used it.
• The trademark is treated as merely a protection
for the good will, and not the subject of property
except in connection with an existing business
o you don't have rights on TM on itself, your rights
depend on using it
o protection is only up to where you are
using your trademark
o example: whopper on burger and whopper on
chocolates - your rights are limited to where/the
goods you use the mark
• THERE IS NO SUCH THING AS A TRADEMARK IN
GROSS - you cannot claim trademark rights on the
trademark itself; thus it should be considered
whether there will be confusion arising from the
use
o As compared to copyrights and patent, rights are
not dependent on use. you have rights on the
patents/copyrights themselves
A.3. CHAMPION SPARK PLUG CO. V. SANDERS, 331 U.S.
125 (1947)
Champion Spark Plug is a manufacturer of spark plugs which it
sells under the trademark ‘Cham pion.’ Respondents collect
the used plugs, repair and recondition them, and resell them.
Respondents retain the word Champion' on the repaired or
reconditioned plugs. The outside box or carton in which the
plugs are packed has stamped on it the word 'Champion,'
together with the letter and figure denoting the particular style
or type. They also have printed on them 'Perfect Process Spark
Plugs Guaranteed Dependable' and 'Perfect Process Renewed
Spark Plugs’. Each carton contains smaller boxes in which the
plugs are individually packed. These inside boxes also carry
legends indicating that the plug has been renew ed. But
respondent company's business name or address is not printed
on the cartons. Champion filed a suit for trademark
infringement and unfair competition against respondents in the
District Court.
Held:
• There was TM infringement and unfair competition, but
issue is the adequacy of relief granted, specifically the
refusal of the CA to remove the word ‘Champion’ from the
repaired or reconditioned plugs which they resell.
• We are dealing here with second-hand goods. The spark
plugs, though used, are nevertheless Champion
plugs and not those of another make. There is
evidence to support what one would suspect, that a used
spark plug which has been repaired or reconditioned does
not measure up to the specifications of a new one. But the
same would be true of a second-hand Ford or Chevrolet
car. And we would not suppose that one could be
enjoined from selling a car whose valves had been
reground and whose piston rings had been replaced
unless he removed the name Ford or Chevrolet.
• A trade-mark only gives the right to prohibit the
use of it so far as to protect the owner's good will
against the sale of another's product as his. When
the mark is used in a way that does not deceive the
public we see no such sanctity in the word as to
prevent its being used to tell the truth. It is not
taboo.
Differentiate Washington v. Champion
Difference is the goodwill. In Washington, the alleged
infringement affected the goodwill of the trademark owner. In
the case of Champion, the goodwill was not affected since the
alleged infringer did not represent that they were selling
Champion sparkplugs, only that they were reselling refurbished
sparkplugs.
B. History, Evolution and Purpose of
Trademarks and Trademark Law
B.1. THE HISTORICAL DEVELOPMENT OF TRADEMARKS
BY SIDNEY A. DIAMOND
1. Antiquity
• First kind of marking was the branding of cattle
• Brand – means to burn
• Pottery jars – maker’s name placed on the handle
• Porcelain had date marks, identifying the emperor
during whose reign the object was made, and
sometimes the maker’s name, place of manufacture
or of the destination specified for the particular piece
• The apparent reason for this use of marks in ancient
times was a response to the expansion of trade.
Goods traveled to comparatively distant markets,
which represented a substantial change in the
customary method of doing business directly with an
artisan in his shop. Although the suppliers were
individuals rather than enterprises, the need for
source identification evidently was recognized
because of demands from remote consumers
for repeat orders for goods whose quality had
proved satisfactory. Quite clearly, such marks
performed the same basic functions as the modern
trademark.
2. Medieval Times
• Beginning about 500 A.D. and continuing for almost a
 thousand years, western mankind lived through a
time known as the Dark Ages, which was
characterized by a decline of learning. During this
period, the use of marks virtually disappeared.
Artisans were unable to read or write even the
simplest types of inscriptions. Markings on swords
and other weapons seem to have been the only kind
that survived at all.
• 14th to 16th century - marks tended to be restricted to
designs or crude monograms. In the mediaeval period
the use of marks proliferated to such an extent that it
becomes possible to identify various types and to
categorize them.
o First were the personal marks, which
identified individuals. These included coats
of arms and signets or seals.
o Another type of personal mark was the
house mark, literally affixed to a house,
which identified the family living there. If the
householder became an innkeeper or a
shopkeeper, the house mark naturally found
its way on to the sign that was put out to
attract customers. And if the householder
was an artisan the house mark also would be
applied to his goods, especially when he
began to sell them to customers other than
his close neighbors.
o Second were the proprietary marks, which
were used to indicate the ownership of
goods. In many instances, the proprietary
mark was derived from the house mark; the
same symbol that appeared on the house
would be applied to tools and other articles
to identify them with their owner and permit
him to claim them if they were lost or taken
away. Similarly, house marks became the
basis for cattle brands.
o Still another kind of mark was the
appellation of geographical origin.
Typical were the tapestries of continental
Europe. These were marked with the place
of origin. In addition, tapestries sometimes
bore an official stamp of guarantee certifying
their quality.
• Artists' signatures became common during the
mediaeval period. These, of course, are a kind of
indication of the origin of the goods-in a very personal
sense. Some artists used monograms as symbols.
• Since there was no concept of copyright at the time,
the book trade was characterized by rivalry among
printers for the most accurate version of a particular
work. This led to the use of the mark as an
identification of origin.
• The great feature of the mediaeval period was the
rise of the guilds, starting around the fourteenth
century. Typically, the members of the guild were
required to use a compulsory production mark, the
principal purpose of which was to fix the responsibility
for poor quality merchandise. Guild marks also were
used to enforce control of the industry, especially
territorial trade barriers.
3. Industrial Revolution
• Increased production capacity, needed to develop
ADL
methods of distribution to get the goods to the
consumer, which resulted in the use of advertising.
Increased advertising resulted in increased use of
trademarks as identifiers of the sources of the goods.
4. Development of Modern Trademarks
• The beginning of legal protection for
trademarks as such generally is traced to a
1783 dictum in an English case, stating that an
action for damages would lie based upon fraud.
The shift to an equitable remedy based upon the
invasion of a property right did not come until the
nineteenth century. The first record of an injunction
against trademark infringement is an English case
decided in 1838.
B.2. THE RATIONAL BASIS OF TRADEMARK
PROTECTION BY FRANK I. SCHECHTER
• Primary and proper function of a trademark
(Hanover case): to identify the origin or
ownership of the goods to which it is affixed.
o The "origin or ownership" so designated by a
trademark must be the "personal origin or
ownership."
• Owing to the ramifications of modern trade and the
national and international distribution of goods from
the manufacturer through the jobber or importer and
the retailer to the consumer, the source or origin of
the goods bearing a well-known trademark is seldom
known to the consumer.
• It indicates, not that the article in question
comes from a definite or particular source, the
characteristics of which or the personalities connected
with which are specifically known to the consumer,
but merely that the goods in connection with
which it is used emanate from the same-
possibly anonymous-source or have reached
the consumer through the same channels as
certain other goods that have already given the
consumer satisfaction, and that bore the same
trademark
• The true functions of the trademark are, then,
to identify a product as satisfactory and
thereby to stimulate further purchases by the
consuming public.
• Today the trademark is not merely the symbol
of good will but often the most effective agent
for the creation of good will, imprinting upon
the public mind an anonymous and impersonal
guaranty of satisfaction, creating a desire for
further satisfactions. The mark actually sells the
goods. And, self-evidently, the more distinctive the
mark, the more effective is its selling power.
o To describe a trademark merely as a symbol
of good will, without recognizing in it an
agency for the actual creation and
perpetuation of good will, ignores the most
potent aspect of the nature of a trademark
and that phase most in need of protection.
o To say that a trademark "is merely the
visible manifestation of the more important
business good will, which is the 'property' to
be protected against invasion" or that "the
Page 3
 good-will is the substance, the trade-mark
merely the shadow," does not accurately
state the function of a trademark today and
obscures the problem of its adequate
protection.
• The protection of trademarks originated as a police
measure to prevent "the grievous deceit of the
people" by the sale of defective goods, and to
safeguard the collective good will and monopoly of
the gild.
• Common law TM action is based on deceit.
Equity acted in aid of a legal right to protect plaintiff’s
title (proprietary)
o However, subsequent decisions of the equity
side indicated a shifting from the proprietary
aspect of trademark protection to practically
the same basis as that of the common law
o A man is not to sell his own goods under the
pretence that they are the goods of another
man .... " Equity did not continue the
unqualified protection of trademarks in aid of
a definite legal right of property but acted
under the doctrine of "passing off' in
England, or of unfair competition in the
United States, which was in itself but "a
development of the law of fraud.
o "The diversion of custom" is the gravamen of
the action in either "passing off' or "unfair
competition." The Supreme Court has held:
"The essence of the wrong consists in the
sale of the goods of one manufacturer or
vendor for those of another. . .. This
essential element is the same in trade-mark
cases as in cases of unfair competition
unaccompanied with trade-mark
infringement."
• No necessity or justification for the protection of
marks on non-competing goods is seen except (1)
where, while there is no actual diversion of trade,
there is a likelihood of confusion as to the source of
the infringing goods; (2) where the use of the
infringing mark or name may work some discredit and
financial liability or other similar concrete injury on
the plaintiff.
o This conclusion that "no wrong is done" is
based upon an archaic notion of the function
of a trademark as solely indicating "source or
origin."
o It ignores the fact that the creation and
retention of custom, rather than the
designation of source, is the primary
purpose of the trademark today, and
that the preservation of the uniqueness or
individuality of the trademark is of
paramount importance to its owner.
• The history of important trademark litigation within
recent years shows that the use of similar marks on
non-competing goods is perhaps the normal rather
than the exceptional case of infringement.
• The real injury in all such cases can only be gauged in
the light of what has been said concerning the
function of a trademark. It is the gradual whittling
away or dispersion of the identity and hold upon the
public mind of the mark or name by its use upon non-
competing goods. The more distinctive or unique the
mark, the deeper is its impress upon the public
consciousness, and the greater its need for protection
against vitiation or dissociation from the particular
product in connection with which it has been used.
• In short:
1. that the value of the modern trademark lies in
its selling power;
2. that this selling power depends for its
psychological hold upon the public, not
merely upon the merit of the goods upon which it
is used, but equally upon its own uniqueness
and singularity;
3. that such uniqueness or singularity is vitiated or
impaired by its use upon either related or non-
related goods; and
4. that the degree of its protection depends in
turn upon the extent to which, through the
efforts or ingenuity of its owner, it is actually
unique and different from other marks
B.3. TRADEMARK LAW: AN ECONOMIC PERSPECTIVE,
“THE ECON OM I C STRUCTURE OF I N TELLECTUAL
PROPERTY ,” LANDES AND POSER
1. Benefits of TMs
• To perform its economizing function a trademark or
brand name (these are rough synonyms) must not be
duplicated.
• The failure to enforce trademarks would impose two
distinct costs--one in the market for trademarked
goods and the other in the distinct (and
unconventional) market in language.
The Market for Trademarked Goods
• The benefits of trademarks in reducing consumer
search costs require that the producer of a trademarked
good maintain a consistent quality over time and
across consumers. Hence trademark protection
encourages expenditures on quality.
• The value of a trademark is the saving in search costs
made possible by the information or reputation that the
trademark conveys or embodies about the brand (or the
firm that produces the brand).
o Once the reputation is created, the firm will
obtain greater profits because repeat purchases
and word-of-mouth references will generate
higher sales and because consumers will be
willing to pay higher prices for lower search costs
and greater assurance of consistent quality.
• The trademark is a shorthand way of telling the
consumer that the attributes of the product
bearing the same trademark are the same as that
he enjoyed earlier.
• The consumer may find it less costly to search by
identifying the relevant trademark and purchasing the
corresponding brand. For this strategy to be efficient,
however, not only must it be cheaper to search for the
right trademark than for the desired attributes of the
good, but also past experience must be a good predictor
of the likely outcome of current consumption choices-that
is, the brand must exhibit consistent quality.
• Trademarks have a self-enforcing feature. They are
valuable because they denote consistent quality,
and a firm has an incentive to develop a trademark
only if it is able to maintain consistent quality.
The Costs of Legally Enforceable Trademarks
• Since the mark "goes with" the brand, the transfer of the
mark is automatically effected by a transfer of the rights
to make the branded product, as by a sale, or licensing, of
production rights or assets.
• A proper trademark is not a public good; it has social
value only when used to designate a single brand.
• We have assumed that a trademark induces its owner to
invest in maintaining uniform product quality, but another
interpretation is that it induces the owner to spend money
on creating, through advertising and promotion, a
spurious image of high quality that enables monopoly
rents to be obtained by deflecting consumers from lower-
price substitutes of equal or even higher quality.
Class notes:
Petron v. Spouses: [W]ith the use of its trade name and
trademark, petitioner and the dealer inform and guarantee to
the public that the products and services are of a
particular standard or quality..... As far as the public is
concerned, it is enough that the establishment carries
exclusively the name and products of petitioner to assume that
the latter is liable for acts done within the premises
Even if the source is unknown - consumers do not care
specifically about the source, they care more about the
qualities and characteristics that they have come to
associate with goods or services emanating from that source.
Purpose of trademarks:
1. Economizing function - Identifying origin and quality
will stimulate further purchases. It will lower search
costs and foster quality control
2. Captures goodwill - imprinting upon the public mind
an anonymous and impersonal guarantee of
satisfaction, creating a desire for further satisfaction
B.4. MIRPURI V. COURT OF APPEALS, G.R. NO. 114508,
NOVEMBER 19, 1999
Lolita Escobar filed an application with the Bureau of Patents
for the registration of the trademark "Barbizon." Private
respondent Barbizon Corporation, a corporation organized and
doing business under the laws of New York, U.S.A. filed an
opposition thereto claiming that the mark BARBIZON of the
applicant is confusingly similar to the trademark BARBIZON
which opposer owns and has not abandoned. The Director of
Patents rendered judgment dismissing the opposition and
giving due course to Escobar's application. The decision
became final, and Escobar was issued a certificate of
registration.
Held:
History of Trademark
• In Philippine jurisprudence, the function of a trademark is:
1. to point out distinctly the origin or ownership of
the goods to which it is affixed;
2. to secure to him, who has been instrumental in
bringing into the market a superior article of
merchandise, the fruit of his industry and skill;
3. to assure the public that they are procuring the
genuine article;
4. to prevent fraud and imposition; and
5. to protect the manufacturer against
ADL
substitution and sale of an inferior and
different article as his product.
• Modern authorities on trademark law view trademarks as
performing three distinct functions (MODERN
TRADEMARK FUNCTIONS)
1. they indicate origin or ownership of the articles to
which they are attached;
2. they guarantee that those articles come up to a
certain standard of quality; and
3. they advertise the articles they symbolize.
• As early as 5,000 B.C., markings on pottery have been
found by archaeologists. Cave drawings in southwestern
Europe show bison with symbols on their flanks.
Archaeological discoveries of ancient Greek and Roman
inscriptions on sculptural works, paintings, vases, precious
stones, glassworks, bricks, etc. reveal some features
which are thought to be marks or symbols. These marks
were affixed by the creator or maker of the article, or by
public authorities as indicators for the payment of tax, for
disclosing state monopoly, or devices for the settlement of
accounts between an entrepreneur and his workmen.
• In the Middle Ages, the use of many kinds of marks on a
variety of goods was commonplace. Fifteenth century
England saw the compulsory use of identifying marks in
certain trades. There were the baker's mark on bread,
bottlemaker's marks, smith's marks, tanner's marks,
watermarks on paper, etc. Every guild had its own mark
and every master belonging to it had a special mark of his
own. The marks were not trademarks but police marks
compulsorily imposed by the sovereign to let the public
know that the goods were not "foreign" goods smuggled
into an area where the guild had a monopoly, as well as to
aid in tracing defective work or poor craftsmanship to the
artisan.
• For a similar reason, merchants also used merchants'
marks. Merchants dealt in goods acquired from many
sources and the marks enabled them to identify and
reclaim their goods upon recovery after shipwreck or
piracy.
• With constant use, the mark acquired popularity and
became voluntarily adopted. It was not intended to create
or continue monopoly but to give the customer an index
or guarantee of quality.
• Industrial Revolution: trademarks did not merely identify
the goods; they also indicated the goods to be of
satisfactory quality, and thereby stimulated further
purchases by the consuming public. Eventually, they
came to symbolize the goodwill and business
reputation of the owner of the product and became
a property right protected by law.
• Today, the trademark is not merely a symbol of origin
and goodwill; it is often the most effective agent for the
actual creation and protection of goodwill.
o It imprints upon the public mind an anonymous
and impersonal guaranty of satisfaction,
creating a desire for further satisfaction.
o In other words, the mark actually sells the
goods.
o The mark has become the "silent salesman," the
conduit through which direct contact between the
trademark owner and the consumer is assured.
Trademarks deal with the psychological function of symbols
and the effect of these symbols on the public at large.
Page 5
Class Notes:
Modern trademark functions:
1. Indication of origin or ownership
2. Indication of quality
3. Advertise
• Before, indicators of taxes, disclosing state monopoly,
settlement of accounts
• Police marks – limit territory
• Merchant marks – limit territory
• Trademarks acquired their function as source identifier
because of use in commerce
• Trademarks were born out of necessity, because trade
was expanded – to help those who were illiterate to
identify the goods
• For example, if you are in a foreign country and all you
see are Chinese characters, marks help you identify the
goods (example golden arches of mcdonalds)
• Increase advertising
• Old forms of trademarks:
1. Personal marks
2. House marks
3. Proprietary marks - property
4. Marks to indicate origin
5. Production marks
• Purpose of trademarks:
o Economizing function – identifying origin and
quality will stimulate purchases. It will lower
search costs and foster quality control; for people
to continue to trust the brand, the manufacturer
must maintain quality
o Captures goodwill – imprinting upon the public
mind an anonymous and impersonal guarantee of
satisfaction, creating a desire for further
satisfaction.
• The mark sells the goods
o How is quality related to a mark? HIGH
QUALITY MAKES STRONG MARKS.
o Two factors that affect the value of marks:
Quality and Consistency
1. Quality of the product determines value of
the mark
2. Consistency determines if the mark will
have value at all – you rely on the mark
because of the experience you’ve had with
the product; if past experience cannot be
relied on because product is inconsistent,
mark will not identify quality
o High quality increases the value; low quality
lowers value; consistency makes the mark
worthless
• Trademarks are source identifiers
o Even if the source is unknown, the consumer can
still rely on the mark as indicating a superior
quality
o Brand names mean something. Consumers rely
on them to know what they’re getting. They
know the company isn’t going to try to fool them
with an inferior product. Consumers do not know
the source/chairperson but the brand itself
guarantees quality
• In short, trademark laws protect three things:
1. Protects consumers
2. Protects the goodwill in a trademark
3. Protects the trademark owner
C. Differences with other IP Rights
Unfair Competition
Sections 155, 168 and 169, IP Code
SEC. 155. REMEDIES; INFRINGEMENT. - Any person who shall,
without the consent of the owner of the registered mark:
155.1. Use in commerce any (RCCC) reproduction,
counterfeit, copy, or colorable imitation of:
a. a registered mark or
b. the same container or
c. a dominant feature thereof
- in connection with the sale, offering for sale,
distribution, advertising of any goods or services
including other preparatory steps necessary to
carry out the sale of any goods or services on or
- in connection with which such use is likely to
cause confusion, or
- to cause mistake, or
- to deceive; or
155.2. Reproduce, counterfeit, copy or colorably
imitate:
a. a registered mark or
b. a dominant feature thereof
and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be
used in commerce upon or in connection with:
a. the sale, offering for sale, distribution, or advertising
of goods or services on or
b. in connection with which such use is likely to cause
confusion, or
c. to cause mistake, or
d. to deceive,
shall be liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the
moment any of the acts stated in Subsection 155.1
or this subsection are committed regardless of
whether there is actual sale of goods or services
using the infringing material.
SEC. 168. UNFAIR COMPETITION, RIGHTS, REGULATION AND
REMEDIES. –
168.1. A person who has identified in the mind of the
public:
a. the goods he manufactures or deals in,
b. his business or
c. services
- from those of others
- whether or not a registered mark is employed
- has a property right in the goodwill of the
said goods, business or services so identified,
which will be protected in the same manner as
other property rights.

168.2. Any person:
1. who shall employ deception or any other means
contrary to good faith
- by which he shall pass off the goods
manufactured by him or in which he deals, or
his business, or services for those of the one
having established such goodwill, or
2. who shall commit any acts calculated to produce
said result
shall be guilty of unfair competition, and shall be subject to
an action therefor.
168.3. In particular, and without in any way limiting the scope
of protection against unfair competition, the following shall be
deemed guilty of unfair competition:
[goods]
(a) Any person:
1. who is selling his goods and gives them the
general appearance of goods of another
manufacturer or dealer, either as to:
i. the goods themselves or
ii. in the wrapping of the packages in which
they are contained, or
iii. the devices or words thereon, or
iv. in any other feature of their appearance
which would be likely to influence purchasers to
believe that the goods offered are those of a
manufacturer or dealer, other than the actual
manufacturer or dealer, or
2. who otherwise clothes the goods with such
appearance as shall deceive the public and
defraud another of his legitimate trade, or
3. any subsequent vendor of such goods or
4. any agent of any vendor engaged in selling such
goods with a like purpose;
[services]
(b) Any person who by any artifice, or device, or who
employs any other means calculated to induce
the false belief that such person is offering the
services of another who has identified such services
in the mind of the public; or
[false statement/act contrary to GF to discredit GBS of
another]
(c) Any person who shall make any false statement in the
course of trade or who shall commit any other act contrary
to good faith of a nature calculated to discredit the goods,
business or services of another.
168.4. The remedies provided by Sections 156, 157 and 161
shall apply mutatis mutandis.
SEC. 169. FALSE DESIGNATIONS OF ORIGIN; FALSE DESCRIPTION
OR REPRESENTATION. –
169.1. Any person who, on or in connection with:
a. any goods or
b. services, or
c. any container for goods
uses in commerce any word, term, name, symbol, or
device, or any combination thereof, or any false
designation of origin, false or misleading description of
ADL
fact, or false or misleading representation of fact, which:
(a) Is likely to cause confusion, or to cause mistake,
or to deceive:
i. as to the [ACA] affiliation, connection,
or association of such person with another
person, or
ii. [OSA] as to the origin, sponsorship, or
approval of his or her goods, services, or
commercial activities by another person; or
(b) In commercial advertising or promotion,
misrepresents the nature, characteristics, qualities, or
geographic origin of his or her or another person's goods,
services, or commercial activities, shall be liable to a civil
action for damages and injunction provided in Sections
156 and 157 of this Act by any person who believes that
he or she is or is likely to be damaged by such act.
169.2. Any goods marked or labelled in contravention of the
provisions of this Sec. shall not be imported into the
Philippines or admitted entry at any customhouse of the
Philippines. The owner, importer, or consignee of goods
refused entry at any customhouse under this section may have
any recourse under the customs revenue laws or may have the
remedy given by this Act in cases involving goods refused
entry or seized.
C.1. E. SPINNER V. NEUSS HESSLEIN, G.R. NO. 31380,
JANUARY 13, 1930
Wigan Khakis case; wigan as a standard of quality (plaintiff)
and wigan as color (defendant). E. Spinner exports khaki to
the Philippines, including the brand "Wigan." the different
grades of khaki are under a common trademark registered in
the Bureau of Patents, Copyrights and Trademark. In 1924, E.
Spinner discovered that Neuss Hesslein (defendant) was selling
khaki in the Philippines with the word "Wigan." Neuss Hesslein
is enjoined from using Wigan as it constitutes unfair
competition and trademark infringement.
Held: Defendant is liable for unfair competition and trademark
infringement.
Unfair Competition
The representation that the khaki sold by the defendant is of
the kind known to the trade as "Wigan" directly tends to
deceive the purchaser and, therefore, constitutes unfair
competition as against the plaintiff.
It is no doubt true that the adoption of the word "Wigan" by
the defendant does not deceive merchants or tailors buying
from the defendant. But the person most to be considered in
this connection is the consumer, and when the word "Wigan"
is found upon a bolt of khaki, the ultimate buyer, or consumer,
would naturally be led to suppose that the goods sold under
this name is the goods sold by the plaintiff.
In the action to enjoin unfair competition, the fraudulent
intention on the part of the defendant may be inferred
from the similarity of the goods offered for sale by him to
the goods of the plaintiff (Act No. 666, sec. 7, end). In the
case before us the use of the word "Wigan," stamped
by the defendant upon the bolts of khaki sold by it,
Page 7
sufficiently discloses an intention to mislead the of unfair competition is that a competitor in
consumer. business cannot be permitted to do acts which
have deceived, or are reasonably designed to
Trademark Infringement deceive, the public into buying his goods as those
With respect to the question of infringement of trademark of another.
right, it is clear that the appropriation by the defendant of the
word "Wigan" for use in the sale of its khaki did not constitute Class notes:
a violation of trademark prior to April, 1925, when the word • Unfair competition involves misrepresentation as to
"Wigan" was first incorporated in the plaintiff's registered the origin/manufacturer of the goods
trademark; but after that date it was certainly illegal for the • There is also misrepresentation in trademark
defendant to use the word "Wigan" stamped upon the khaki infringement but UC is broader
sold by it; and this act was an infringement of trademark right. o Not restricted to the trademark itself
o In a trademark infringement case, you
Although "Wigan," being the name of a town, was an original protect the mark; in UC you protect the
geographical term, it is not used upon the plaintiff's khaki to product, etc.
indicate the geographical
If the defendant were manufacturing its khaki in the town of Trademark Unfair
"Wigan," it would be entitled to use that name to indicate the Competitition
place of manufacture of its goods. But such is not the case Involves Misrepresentation to Same
here. the public
Range Limited range but Broader
Unfair Competition v. Trademark Infringement has a more
Though the law concerning infringement of trade-marks and recognized exclusive
that concerning unfair competition have a common conception right
at their root, which is that one person shall not be Protected Property – against Against any form
permitted to misrepresent that his goods or his using a trademark as of deceptive
business are the goods or the business of another: defined under the practice
• the law concerning unfair competition is broader law
and more inclusive. Type of injury Tort (special) Tort (generic)
• On the other hand, the law concerning the Wrong Invasion of property Fraud
infringement of trade-mark is of more limited range, Committed right
but within its narrower range recognizes a more Development More developed;
exclusive right derived from the adoption and under the law more recognized and
registration of the trademark by the person whose protected by the
goods or business are first associated therewith. courts
o One who has identified a peculiar Remedies Damages, injunction, same
symbol or mark with his goods thereby criminal penalties
acquires a property right in such
Violations Infringement also UC does not
symbol or mark, and if another covered means there was UC; mean there was
infringes the trademark he thereby
Restricted to its infringement; all
invades this property right. technical meaning wrongful acts of
• Unfair competition cannot be placed on the plane
competition not
of invasion of property right. The tort is strictly one necessarily
of fraud. involving TM
• Of late years, however, the term "trade-mark" has been rights
restricted to its proper technical meaning and the term
Fraudulent Intent Not required Required but may
"unfair competition" is used to include wrongful
be inferred
acts of competition not involving any violation of
trademark right proper.
• As the tort of unfair competition is broader than
C.2. DEL MONTE CORP. V. CA, G.R. NO. 78325,
the wrong involved in the infringement of a trade-
JANUARY 25, 1990
mark, one who fails to establish the exclusive
property right which is essential to the validity of a
Del Monte and Philpack filed a case against Sunshine for
trademark, may yet frequently obtain relief on the ground
Infringement of Trademark and Unfair Competition because
of his competitor's unfairness or fraud.
Sunshine, which manufactures various kinds of sauces, uses a
• Any conduct may be said to constitute unfair
logo similar to Del Monte and uses Del Monte’s bottles bought
competition if the effect is to pass off on the public
by it from junk shops.
the goods of one man as the goods of another.
o It is not necessary that any particular means
Held: Sunshine guilty of trademark infringement and unfair
should be used to this end. The most usual
competition.
devices are the simulation of labels and the
reproduction of the form, color and general
Trademark Unfair
appearance of the package used by the pioneer
Infringement Competition
manufacturer or dealer.
o But unfair competition is not limited to these Definition Unauthorized use Passing off of
forms. The general principle underlying the law of a trademark one’s goods as
 those of another (unfair competition), La Tondena could have won.
Intent Unnecessary Required but may
be inferred Trademark infringement is part of the broader law of unfair
Registration Prior registration Registration is not competition. But unfair competition does not equate with
of the trademark necessary trademark infringement.
is a prerequisite to
the action
C.3. CO V. KENG HUAN, G.R. NO. 212701, SEPTEMBER
10, 2014
Trademark Infringement
• Sunshine guilty of colorable imitation. The ordinary buyer Greenstone Pharmaceutical manufactures Greenstone
does not usually make such scrutiny nor does he usually Medicated Oil. Petitioners filed a case against defendants for
have the time to do so. The average shopper is usually in allegedly conspiring in the sale of counterfeit greenstone
a hurry and does not inspect every product on the shelf as products to the public.
if he were browsing in a library.
• To determine whether a trademark has been infringed, we Held:
must consider the mark as a whole and not as dissected. Co conspired with the Laus in the sale/distribution of
If the buyer is deceived, it is attributable to the marks as a counterfeit Greenstone products to the public, which were
totality, not usually to any part of it. even packaged in bottles identical to that of the original,
• Well has it been said that the most successful form of thereby giving rise to the presumption of fraudulent intent. n
copying is to employ enough points of similarity to confuse light of the foregoing definition, it is thus clear that Co,
the public with enough points of difference to confuse the together with the Laus, committed unfair competition, and
courts. should, consequently, be held liable therefor.
o Lower court failed to take into consideration several
factors which should have affected its conclusion, to Although liable for unfair competition, the Court deems it apt
wit: age, training and education of the usual to clarify that Co was properly exculpated from the charge of
purchaser, the nature and cost of the article, whether trademark infringement considering that the registration of
the article is bought for immediate consumption and the trademark "Greenstone" — essential as it is in a
also the conditions under which it is usually trademark infringement case — was not proven to have
purchased. Among these, what essentially determines existed during the time the acts complained of were
the attitude of the purchaser, specifically his committed.
inclination to be cautious, is the cost of the goods.
Class notes:
Unfair Competition There was no trademark infringement as the mark was not
• Sunshine not guilty of infringement for using the registered but there was unfair competition.
Del Monte bottle; it constitutes unfair competition. Which is easier to prove? Trademark infringement; fraud is
The reason is that the configuration of the said bottle was difficult to prove
merely registered in the Supplemental Register.
• Although Del Monte has actual use of the bottle's Patent, Copyright and Trade Name
configuration, the petitioners cannot claim exclusive use
thereof because it has not been registered in the Principal C.3. THE MAKING OF MODERN INTELLECTUAL
Register. PROPERTY LAW BY SHERMAN & BENTLY
• However, we find that Sunshine, despite the many choices
available to it and notwithstanding that the caution "Del Class notes:
Monte Corporation, Not to be Refilled" was embossed on Should trademark law be associated with copyrights and
the bottle, still opted to use the petitioners' bottle to patents?
market a product which Philpack also produces. This PROs CONs
clearly shows the private respondent's bad faith and its Copyrights and patents No creation of works
intention to capitalize on the latter's reputation and were used to develop TM
goodwill and pass off its own product as that of Del doctrines
Monte. Similar subject matter – Copyright and Patents
embodied in the are concerned with the
Class notes: personality of the owner creation and its
Infringement of tm – use of mark protection (non-
Unfair competition – use of bottles interference with a
Test of dominancy property right), whereas
No infringement on the bottles TM is concerned with
forgery and fraud
What’s the difference between this case and the distilleria
case? Both used bottles of another company Two objections to inclusion of TM to intellectual property law:
In Distilliria case, what was involved was ownership/possession 1. Creativity - While the rights granted by design,
because the action is replevin. In this case, the focus is not on patents and copyright could be excused (and
the material object but on the incorporeal right. Had the justified) because they were only granted for new
Distilleria case been filed under the same cause of action creations (and as such nothing was therefore being

ADL Page 9
 taken away from the public), this was not the case registration and actual inventive step
with trade marks which in many cases dealt with pre- use and
existing subject matter. usefulness
• With trade marks, however, 'we create Notice “®” or © or “Philippine
nothing new, but provide only a new mode “Registered “Copyright” Patent” or
of defending the right that we acknowledge'. Mark” or “Reg.IPOPHL”
2. Whereas copyright, patents and designs were “Reg.IPOPHL”
primarily concerned with the creation and protection Term of 20 years, but Author’s 20 years from
of property, trade marks were more concerned with Rights as long as lifetime plus filing date
forgery or fraud. used 50 years
• There was this important difference registration
between patents and trademarks, that may be
copying or infringing the latter was renewed
really analogous to forgery, while the Infringement Registration Registration Registration
infringement of a patent was merely prerequisites required not required required
interfering with a private right of Infringement Likelihood of Unauthorized Unauthorized
property. standard confusion copying manufacture,
use or sale
Trademark Copyright Patent
Definition any visible confined to refer to any
sign capable literary and technical C.4. KHO V. COURT OF APPEALS, G.R. NO. 115758,
of artistic works solution of a MARCH 19, 2002
distinguishing which are problem in
the goods original any field of
(trademark) intellectual human The petitioner applied for the issuance of a preliminary
or services creations in activity which injunctive order on the ground that she is entitled to the use of
(service the literary is new, the trademark Chin Chun Su and its container based on her
mark) of an and artistic involves an copyright and patent over the same. The issue is whether the
enterprise domain inventive step copyright and patent over the name and container of a beauty
and shall protected and is cream product would entitle the registrant to the use and
include a from the industrially ownership over the same to the exclusion of others.
stamped or moment of applicable
marked their Held:
container of creation Trademark, copyright and patents are different intellectual
goods. A property rights that cannot be interchanged with one another.
Trade name • A trademark is any visible sign capable of distinguishing
means the the goods (trademark) or services (service mark) of an
name or enterprise and shall include a stamped or marked container
designation of goods.
identifying or • In relation thereto, a trade name means the name or
distinguishing designation identifying or distinguishing an enterprise.
an enterprise • Meanwhile, the scope of a copyright is confined to literary
Nature Source Original Inventions and artistic works which are original intellectual creations
identification literary and and designs in the literary and artistic domain protected from the
of goods or artistic moment of their creation.
services expressions • Patentable inventions, on the other hand, refer to any
Scope Protect Protect Excludes technical solution of a problem in any field of human activity
against against others from which is new, involves an inventive step and is industrially
likelihood of unauthorized making, using applicable.
confusion copying or selling the
invention • Petitioner has no right to support her claim for the exclusive
Purpose Protects Encourages Encourage use of the subject trade name and its container. The name
owners and and rewards and rewards and container of a beauty cream product are proper
public from creative innovation subjects of a trademark inasmuch as the same falls
unfair expression squarely within its definition. In order to be entitled to
competition exclusively use the same in the sale of the beauty cream
How to Registration Creation Registration product, the user must sufficiently prove that she registered
obtain rights or used it before anybody else did.
Principal Prima facie Prima facie Gives rise to • The petitioner's copyright and patent registration of the
Advantages evidence of evidence of patent rights name and container would not guarantee her the right to
of validity and ownership the exclusive use of the same for the reason that they are
Registration ownership; not appropriate subjects of the said intellectual
gives rise to rights. Consequently, a preliminary injunction order cannot
TM rights be issued for the reason that the petitioner has not proven
Basis for Ownership Originality Novelty, 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.
Class notes:.
Example of a good that has all three: iphone
• What’s the purpose of trademark? To
distinguish the good
• Copyright? To protect the intellectual
property
• Patent? To protect din
C.5. TRADEMARK CASES, 100 U.S. 82 (1879)
• ISSUE: Whether the act of Congress on the subject of
trademarks founded on any rightful authority in the
Constitution of the United States. Held: unconstitutional
• 8th clause of first article of the Constitution: “to promote
the progress of science and useful arts, by securing for
limited times, to authors and inventors, the exclusive right
to their respective writings and discoveries.”
• The ordinary trademark has no necessary relation
to invention or discovery. The trademark recognized
by the common law is generally the growth of a
considerable period of use, rather than a sudden
invention.
o It is often the result of accident, rather
than design, and when under the act of
Congress it is sought to establish it by
registration, neither originality, invention,
discovery, science, nor art is in any way essential
to the right conferred by that act.
o And while the word writings may be liberally
construed, as it has been, to include original
designs for engravings, prints, &c., it is only such
as are original and are founded in the
creative powers of the mind. The writings
which are to be protected are the fruits of
intellectual labor, embodied in the form of books,
prints, engravings, and the like.
• The trademark may be, and generally is, the adoption of
something already in existence as the distinctive
symbol of the party using it. At common law, the
exclusive right to it grows out of its use, and not its
mere adoption.
o By the act of Congress, this exclusive right
attaches upon registration. But in neither case
does it depend upon novelty, invention,
discovery, or any work of the brain. It requires
no fancy or imagination, no genius, no laborious
thought. It is simply founded on priority of
appropriation.
• The other clause of the Constitution supposed to confer
the requisite authority on Congress is the third of the
same section, which read in connection with the granting
clause, is as follows: "The Congress shall have power to
regulate commerce with foreign nations, and among
the several states, and with the Indian tribes."
o The power of regulation there conferred on
Congress is limited to commerce with foreign
nations, commerce among the states, and
commerce with the Indian tribes.
o When, therefore, Congress undertakes to enact a
law which can only be valid as a regulation of
ADL
commerce, it is reasonable to expect to find on
the face of the law or from its essential nature
that it is a regulation of commerce with foreign
nations or among the several states or with the
Indian tribes. If not so limited, it is in excess of
the power of Congress.
o It is not within the judicial province to give to the
words used by Congress a narrower meaning
than they are manifestly intended to bear in
order that crimes may be punished which are not
described in language that brings them within the
constitutional power of that body.
Class notes:
• Trademark law was being assailed – congress does
not have the power to create the law
• Two clauses:
1. Clause 8 – secure writings and discoveries –
Court said that trademarks are not inventions or
creations (like patents and copyrights);
trademarks are already in existence; purpose is
not to foster creativity but to foster commerce
• There was trademark protection already
under common law
2. 8th clause – commerce clause; but the commerce
clause was only limited to inter-state commerce;
trademark law did not make qualification
• Trademark – to protect commerce; copyright – to
foster creativity; trademark – cannot be in gross,
must be attached to use, copyright – right in itself
• Philippine Constitution is different from US
constitution
o US constitution has two separate provisions
for trademarks on the one hand and
patents/copyrights on the other
o In PH, they are lumped together – they are
viewed as property which should be
protected
• Protection: from strongest to weakest: patents, copyright,
trademark
• Trademark – the same mark can be used in another kind
of good as long as there is no confusion
• Patent – whether or not there is confusion, there is
protection, as long as parehas
• Copyright is in the middle because there is independent
creation defense – if someone came up with the same
kind of work there is no infringement
C.6. Section 121.2, IP Code
121.2. "Collective mark" means any visible sign
designated as such in the application for registration and
capable of distinguishing the origin or any other
common characteristic, including the quality of goods or
services of different enterprises which use the sign under the
control of the registered owner of the collective mark;
Collective Mark
C.7. Sections 121.3, 167, IP Code
121.3. "Trade name" means the name or designation
Page 11
identifying or distinguishing an enterprise;
Section 167. Collective Marks. –
167.1. Subject to Subsections 167.2 and 167.3, Sections 122
to 164 and 166 shall apply to collective marks, except that
references therein to "mark" shall be read as "collective mark".
167.2.
(a) An application for registration of a collective mark shall
designate the mark as a collective mark and shall be
accompanied by a copy of the agreement, if any, governing
the use of the collective mark.
(b) The registered owner of a collective mark shall notify the
Director of any changes made in respect of the agreement
referred to in paragraph (a).
167.3. In addition to the grounds provided in Section 149, the
Court shall cancel the registration of a collective mark if the
person requesting the cancellation proves:
1. that only the registered owner uses the mark, or
2. that he uses or permits its use in contravention of the
agreements referred to in Subsection 166.2 or
3. that he uses or permits its use in a manner liable to
deceive trade circles or the public as to the origin or
any other common characteristics of the goods or
services concerned.
167.4. The registration of a collective mark, or an application
therefor shall not be the subject of a license contract.
D. Sources of Trademark Protection
Class notes:
PH Consti
Paris Convention
TRIPS agreement
Madrid protocol
IP Code
• trademark regulations
• Madrid protocol regulations
SECTION 13, ARTICLE XIV, PHILIPPINE
CONSTITUTION
Section 13. The State shall protect and secure the exclusive
rights of scientists, inventors, artists, and other gifted citizens
to their intellectual property and creations, particularly when
beneficial to the people, for such period as may be provided by
law.
PARIS CONVENTION ON TRADEMARKS
The Paris Convention for the Protection of Industrial Property
(1883) contains various important provisions for trademarks.
The most important one is a priority right. This means that
one can apply for a trademark in one country that is a member
to the Paris Convention, and then within six months file
subsequent applications in other member countries
and claim the priority date. The later registrations will
then receive the registration date of the first
registration. This can be a great benefit if in the mean time
someone else had filed for the same trademark in those other
countries.
Further, trademarks duly registered in the country of origin
shall be accepted for filing and protected as is in the other
countries of the Union. The only reasons under which the
trademark offices of those other countries may refuse the
registration is when the trademark infringes rights acquired by
third parties in those countries, where the trademark is devoid
of any distinctive character, or when the trademark is contrary
to morality or public order or may deceive the public.
Special protection is given to so-called well-known marks.
The registration or use of a trademark which constitutes a
reproduction, an imitation, or a translation liable to create
confusion, of a mark considered to be well known in a country
is prohibited. If the holder of the well known mark finds that
such an other mark has been registered, he can request a
cancellation of that registration within 5 years. If the
registration of the other mark was done in bad faith, there is
no restriction on the time in which the holder of the famous
mark can request cancellation.
ARTICLE 15 – 21, WORLD TRADE ORGANIZATION’S
AGREEMENT ON TRADE-RELATED ASPECTS OF
INTELLECTUAL PROPERTY RIGHTS (TRIPS
AGREEMENT)
Article 15. Protectable Subject Matter
1. Any sign, or any combination of signs, capable of
distinguishing the goods or services of one undertaking
from those of other undertakings, shall be capable of
constituting a trademark. Such signs, in particular words
including personal names, letters, numerals, figurative
elements and combinations of colours as well as any
combination of such signs, shall be eligible for registration
as trademarks. Where signs are not inherently capable of
distinguishing the relevant goods or services, Members
may make registrability depend on distinctiveness
acquired through use. Members may require, as a
condition of registration, that signs be visually perceptible.
2. Paragraph 1 shall not be understood to prevent a Member
from denying registration of a trademark on other
grounds, provided that they do not derogate from the
provisions of the Paris Convention (1967).
3. Members may make registrability depend on use.
However, actual use of a trademark shall not be a
condition for filing an application for registration.
An application shall not be refused solely on the
ground that intended use has not taken place
before the expiry of a period of three years from
the date of application.
4. The nature of the goods or services to which a trademark
is to be applied shall in no case form an obstacle to
registration of the trademark.
5. Members shall publish each trademark either before it is
registered or promptly after it is registered and shall afford
a reasonable opportunity for petitions to cancel the
registration. In addition, Members may afford an
opportunity for the registration of a trademark to be
opposed.
Article 16 Rights Conferred
1. The owner of a registered trademark shall have the
exclusive right to prevent all third parties not
 having the owner’s consent from using in the
course of trade identical or similar signs for goods
or services which are identical or similar to those in
respect of which the trademark is registered where such
use would result in a likelihood of confusion. In case
of the use of an identical sign for identical goods or
services, a likelihood of confusion shall be
presumed. The rights described above shall not prejudice
any existing prior rights, nor shall they affect the
possibility of Members making rights available on the basis
of use.
2. Article 6bis of the Paris Convention (1967) shall apply,
mutatis mutandis, to services. In determining whether a
trademark is well-known, Members shall take account of
the knowledge of the trademark in the relevant sector of
the public, including knowledge in the Member concerned
which has been obtained as a result of the promotion of
the trademark.
3. Article 6bis of the Paris Convention (1967) shall
apply, mutatis mutandis, to goods or services
which are not similar to those in respect of which a
trademark is registered, provided that use of that
trademark in relation to those goods or services would
indicate a connection between those goods or
services and the owner of the registered trademark
and provided that the interests of the owner of the
registered trademark are likely to be damaged by
such use.
Article 17 Exceptions
Members may provide limited exceptions to the rights
conferred by a trademark, such as fair use of descriptive
terms, provided that such exceptions take account of the
legitimate interests of the owner of the trademark and of third
parties.
Article 18 Term of Protection
Initial registration, and each renewal of registration, of a
trademark shall be for a term of no less than seven years. The
registration of a trademark shall be renewable indefinitely.
Article 19 Requirement of Use
1. If use is required to maintain a registration, the
registration may be cancelled only after an
uninterrupted period of at least three years of non-
use, unless valid reasons based on the existence of
obstacles to such use are shown by the trademark
owner. Circumstances arising independently of the
will of the owner of the trademark which constitute an
obstacle to the use of the trademark, such as import
restrictions on or other government requirements
for goods or services protected by the trademark,
shall be recognized as valid reasons for non-use.
2. When subject to the control of its owner, use of a
trademark by another person shall be recognized
as use of the trademark for the purpose of
maintaining the registration.
Article 20 Other Requirements
The use of a trademark in the course of trade shall not
be unjustifiably encumbered by special requirements,
such as:
• use with another trademark
• use in a special form or
ADL
• use in a manner detrimental to its capability to
distinguish the goods or services of one undertaking
from those of other undertakings.
This will not preclude a requirement prescribing the use of the
trademark identifying the undertaking producing the goods or
services along with, but without linking it to, the trademark
distinguishing the specific goods or services in question of that
undertaking.
Article 21 Licensing and Assignment
Members may determine conditions on the licensing and
assignment of trademarks, it being understood that the
compulsory licensing of trademarks shall not be
permitted and that the owner of a registered trademark shall
have the right to assign the trademark with or without
the transfer of the business to which the trademark
belongs.
INTERNATIONAL LAW (MADRID PROTOCOL)
The Madrid Agreement concerning the International
Registration of Marks (1891) is a special treaty designed to
ease the acquisition of trademark rights in various countries.
After an initial registration in his own country, an
applicant for a trademark can make a so-called
international registration at the International Bureau
(IB) of the WIPO in Geneva, indicating the member
countries in which he would like to have trademark
protection. The IB then makes the registration and passes it
on to all the designated member countries of the Madrid
Agreement. These then have one year in which to refuse
the registration in their country. The registrations that are
a result of the international registration can be annulled if the
original national registration is refused, annulled or
dropped in the first five year after the first registration
date. An annulment resulting from a legal action started
after the original registration is more than 5 years old
cannot affect the international registration. So, if you
want to get rid of an international mark established under the
Madrid Agreement, you should try to get the original national
registration annulled by starting a legal procedure to that end
within five years after the first registration. This is known as a
central attack on the international registration. The
additional protocol made it possible to count a Community
Trademark, such as in the European Union, count as first
registration.
IP Code and Rules and Regulation on Trademarks,
Service Marks, Trade Names and Marked or Stamped
Containers (Trademark Regulations)
Page 13
 - E.g. “Coppertone” with regard to sun tanning
II. Types of Trademarks products
• If a term is suggestive, it is entitled to registration
without proof of secondary meaning. Moreover, as
A. Classification by Distinctiveness (Spectrum of
held in the Season-All case, the decision of the Patent
Distinctiveness) (Generic, Descriptive, Suggestive,
Office to register a mark without requiring proof of
Arbitrary and Fanciful)
secondary meaning affords a rebuttable presumption
that the mark is suggestive or arbitrary or fanciful
A.1. ABERCROMBIE & FITCH CO. V. HUNTING WORLD,
rather than merely descriptive.
INC., 537 F.2D 4 (2D CIR. 1976)
d. Fanciful or arbitrary - It need hardly be added that
fanciful or arbitrary terms enjoy all the rights accorded to
Abercrombie & Fitch Company (A&F) sued Hunting World, Inc.
suggestive terms as marks without the need of debating
(HW) for using the mark "Safari" which is registered in the
whether the term is "merely descriptive" and with ease of
Patent Office. A&F spent heavily in advertisements and
establishing infringement.
promotions of "Safari." HW sold sporting apparel which uses
- E.g. “Kodak” with regard to photographic
"Safari." HW alleged that "safari" is "an ordinary, common,
supplies, “Ivory” as applied to soap
descriptive, geographic, and generic word which is commonly
used and understood by the public to mean and refer to a
ITC: We have reached the following conclusions: (1) applied to
journey or expedition, especially for hunting or exploring in
specific types of clothing 'safari' has become a generic term
East Africa, and to the hunters, guides, men, animals, and
and 'minisafari' may be used for a smaller brim hat; (2) 'safari'
equipment forming such an expedition and is not subject to
has not, however, become a generic term for boots or shoes; it
exclusive appropriation as a trademark."
is either "suggestive" or "merely descriptive" and is a valid
trademark even if " merely descriptive" since it has become
Held: The Court held that "Safari" has become a generic term
incontestable under the Lanham Act; but (3) in light of the
for specific clothing and hats. However, it is not a generic term
justified finding below that 'Camel Safari,' 'Hippo Safari' and
for boots or shoes.
'Safari Chukka' were devoted by HW to a purely descriptive use
on its boots, HW has a defense against a charge of
Four different categories of trademark regarding trademark
infringement with respect to these on the basis of "fair use."
protection:
a. Generic – A generic term is one that refers, or has come
What is perhaps less obvious is that a word may have more
to be understood as referring, to the genus of which the
than one generic use. The word 'Safari' has become part of a
particular product is a species.
family of generic terms which, although deriving no doubt from
- A generic term connotes the basic nature of
the original use of the word and reminiscent of its milieu, have
articles or services rather than the more
come to be understood not as having to do with hunting in
individualized characteristics of a particular
Africa, but as terms within the language referring to
product (Zantarain v. Old Grove Smokehouse)
contemporary American fashion apparel. These terms name
- E.g. aspirin, cellophane
the components of the safari outfit well-known to the clothing
b. Descriptive – conveys an immediate idea of the
industry and its customers: the 'Safari hat', a broad flat-
ingredients, qualities, or characteristics of the goods; the
brimmed hat with a single, large band; the 'Safari jacket', a
distinction between descriptive and generic terms is one of
belted bush jacket with patch pockets and a buttoned shoulder
degree
loop; when the jacket is accompanied by pants, the
- e.g. color, odor, function, dimensions (Zantarain
combination is called the 'Safari suit'. Typically these items are
v. Old Grove Smokehouse)
khaki-colored.
- - e.g. “Alo” with reference to products containing
o many stores have advertised these items despite
gel of the aloe vera plant, “vision center” in
A&F's attempts to police its mark. In contrast, a
reference to a business offering optical goods
search of the voluminous exhibits fails to disclose
and services
a single example of the use of 'Safari', by anyone
o the Lanham Act makes an important exception
other than A&F and HW, on merchandise for
with respect to those merely descriptive terms
which A&F has registered 'Safari' except for the
which have acquired secondary meaning, it
safari outfit and its components as described
offers no such exception for generic marks.
above.
o This means that even proof of secondary
o A&F also was not entitled to an injunction against
meaning, by virtue of which some "merely
HW's use of the word in advertising goods of the
descriptive" marks may be registered,
kind included in the safari outfit as described
cannot transform a generic term into a
above. And if HW may advertise a hat of the kind
subject for trademark.
worn on safaris as a safari hat, it may also
o when a suggestive or fanciful term has become
advertise a similar hat with a smaller brim as a
generic as a result of a manufacturer's own
minisafari.
advertising efforts, trademark protection will be
• the principle against giving trademark protection to a
denied save for those markets where the term
generic term also sustains the denial of an injunction
still has not become generic and a secondary
against HW's use of 'Safariland' as a name of a
meaning has been shown to continue.
portion of its store devoted at least in part to the sale
c. Suggestive - requires imagination, thought and
of clothing as to which the term 'Safari' has become
perception to reach a conclusion as to the nature of
generic.
goods; suggests, rather than describes, some particular
• A&F stands on stronger ground with respect to HW's
characteristic of the goods or services to which it applies
use of 'Camel Safari', 'Hippo Safari' and Chukka
 'Safari' as names for boots imported from Africa. As
already indicated, there is no evidence that 'Safari'
has become a generic term for boots.
Class notes:
in an ascending order roughly reflecting the protection:
1. generic - genus of which the particular product is a species
- e.g. lite beer, car, apples, restaurant
2. descriptive
- describes qualities, ingredients or characteristics
- tapsilog, coca cola
3. suggestive - requires imagination, thought and perception
to reach a conclusion as to the nature of goods
- as compared to descriptive: descriptive conveys an
immediate idea of the ingredients, qualities or characteristics
of the goods
e.g. v8 versus mustang
coppertone - conveys an idea of what a product can do
ivory - white, clean, pure
wrangler - cowboy
7 eleven - open from 7am to 11pm
4. arbitrary - common word used in a fanciful sense or
applied in an unfamiliar way
e.g. apple – generic/descriptive when used in fruits but
arbitrary when applied to computers
5. fanciful - word coined or invented solely for their use as
trademarks
A.2. Filipino Yellow Pages, I nc. v. Asian Journal
Publications, I nc., 198 F.3d. 1143 (1999)
Oriel and Jornacion were business partners in the publication
of the Filipino Directory of California. Subsequently, they
terminated their business, which resulted to Jornacion being
required to abide by non-compete clause for 3 years.
Meanwhile, the spouses Oriel put up Asian Journal Publications
(AJP). After 3 years, Jornacion put up Filipino Yellow Pages,
Inc. (FYP), which published Filipino Yellow Pages. Publications
of AJP and FYP are now competitors. Because AJP sometimes
used the term “Filipino Yellow Pages,” FYP filed a complaint for
trademark infringement with the district court. Before the suit,
FYP applied for registration of "Filipino Yellow Pages" with the
Patent and Trademark Office ("PTO"). PTO refused registration
of “Filipino Yellow Pages” because the proposed trademark
only describes the goods and the nature and intended
audience for the goods (ie, it was generic). AJP likewise
argued that the term “Filipino Yellow Pages” is generic and as
such incapable of trademark protection.
Held: Filipino Yellow Pages is generic; thus it cannot be the
subject of trademark protection under any circumstances, even
with a showing of secondary meaning.
Case law recognizes "four different categories of terms with
respect to trademark protection: (1) generic, (2) descriptive,
(3) suggestive, and (4) arbitrary or fanciful.
• A `generic' term is one that refers, or has come to be
understood as referring, to the genus of which the
ADL
particular product or service is a species. It cannot
become a trademark under any circumstances. Courts
sometimes refer to generic terms as "common
descriptive" names, the language used in the Lanham
Act for terms incapable of becoming trademarks.
• A descriptive term, unlike a generic term, can be a
subject for trademark protection under appropriate
circumstances. Although descriptive terms generally do
not enjoy trademark protection, a descriptive term can
be protected provided that it has acquired
"secondary meaning" in the minds of consumers, i.e., it
has "become distinctive of the[trademark] applicant's
goods in commerce." Courts sometimes refer to
descriptive terms as "merely descriptive" terms (as
opposed to generic or "common descriptive" terms).
• In determining whether a term is generic, we have often
relied upon the "WHO-ARE-YOU/WHAT-ARE-YOU"
TEST:
o "A mark answers the buyer's questions `Who are
you?'`Where do you come from?' `Who vouches
for you?'
o But the [generic] name of the product answers
the question `What are you?'
• Under this test, "[i]f the primary significance of the
trademark is to describe the type of product rather
than the producer, the trademark [is] a generic
term and [cannot be] a valid trademark."
• Here the parties do not dispute that "Filipino" and "yellow
pages" are generic terms.
o The word "Filipino" is a clearly generic term used
to refer to "a native of the Philippine islands" or
"a citizen of the Republic of the Philippines."
o The term "yellow pages" has been found to be a
generic term for "a local business telephone
directory alphabetized by product or service."
• The issue then becomes whether combining the
generic terms "Filipino" and "yellow pages" to form
the composite term "Filipino Yellow Pages" creates
a generic or a descriptive term.
o AJP argues, and the district court concluded, that
"Filipino Yellow Pages" is generic based on this
court's analysis in Surgicenters of America, Inc.
v. Medical Dental Surgeries Co., In Surgicenters,
we held that the term "surgicenter" was generic
and that the plaintiff's registered service mark
had to be removed from the trademark register -
"surgicenter," created by combining the generic
terms "surgery " and "center," retained the
generic quality of its components - the
combination of terms in "surgicenter" did not
constitute a "deviation from normal usage" or an
"unusual unitary combination."
o Nowhere in Surgicenters did we hold,
however, that a composite term made up of
generic components is automatically
generic unless the combination constitutes
a "deviation from normal usage" or an
"unusual unitary combination."
o "[w]hile not determinative, dictionary definitions
are relevant and often persuasive in determining
how a term is understood by the consuming
public, the ultimate test of whether a trademark
Page 15
 is generic."
Note: Dictionary definitions are not
determinative and the ultimate test
of genericness is how a term is
understood by the consuming
public.
• The Circuit Court rejected the “generic plus generic
equals generic” approach to evaluating composite
terms.
• The mark at issue in this case, in contrast, is not
registered; thus FYP, as trademark plaintiff, must prove
that "Filipino Yellow Pages" is not generic. It does not
appear that FYP has offered evidence of nongenericness
sufficient to rebut even the fairly modest evidence of
genericness offered by AJP
• No showing of secondary meaning: FYP's evidence of
secondary meaning was inadmissible, lacking in
substantial probative value (as emanating from a far-from-
objective source), or both. The district court did not err in
concluding that FYP had failed to establish secondary
meaning for "Filipino Yellow Pages." Thus "Filipino Yellow
Pages," even if descriptive rather than generic, is not a
valid and protectible trademark with respect to a
telephone directory for the Filipino-American community.
Class notes:
Determining whether a mark is generic or not
who are you what are you test - who are you (source
identifier) what are you (product)
example mcdonalds vs. hamburger
Filipino yellow pages - individually they are generic or
descriptive
it doesn't add up that generic plus generic = generic
you have to look at the entire mark
e.g. international school manila - not generic
B. Secondary Meaning
Sections 123.1(j) and 123.2, IP Code
SECTION 123. REGISTRABILITY.
123.1. A mark cannot be registered if it:
(j) Consists exclusively of signs or of indications that may
serve in trade to designate the:
i. Kind
ii. Quality
iii. Quantity
iv. intended purpose
v. value
vi. geographical origin,
vii. time or
viii. production of the goods or rendering of the services,
or
ix. other characteristics of the goods or services;
(k) Consists of shapes that may be necessitated by technical
factors or by the nature of the goods themselves or factors
that affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form;
123.2. As regards signs or devices mentioned in paragraphs
(j), (k), and (l), nothing shall prevent the registration of any
such sign or device which has become distinctive in relation
to the goods for which registration is requested as a
result of the use that have been made of it in commerce in the
Philippines. The Office may accept as prima facie evidence
that the mark has become distinctive, as used in connection
with the applicant's goods or services in commerce, proof of
[SECU] substantially exclusive and continuous use
thereof by the applicant in commerce in the Philippines for five
(5) years before the date on which the claim of distinctiveness
is made.
Class notes:
Secondary meaning – the primary significance is not the
product but the producer
How do you determine secondary meaning?
evidence:
1. consumers' testimony and surveys
2. usage as to how long you have been using the name
3. advertising and volume of sales
Secondary meaning does not connote a subordinate or rare
meaning. It refers to a SUBSEQUENT SIGNIFICANCE
added to the original meaning. It exists when a significant
number of purchasers understand the term not merely in its
original sense, but also as an indication of association
with a particular entity.
B.1. INTERNATIONAL KENNEL CLUB OF CHICAGO V.
MIGHTY STAR, 846 F.2D. 1079 (1988)
International Kennel Club sponsors dog shows in Chicago. IKC
has huge advertising expenditures to reach canine enthusiasts.
Defendants released a line of stuffed animals (dogs) using
“International Kennel Club.” They utilized a marketing strategy
whereby purchasers could register their dogs with the
“International Kennel Club” and receive an official membership
and certificate. IKC filed a case for trademark infringement
against defendant.
Held: The first step in determining whether an unregistered
mark or name is entitled to the protection of the trademark
laws is to categorize the name according to the nature of the
term itself. Trademarks that are fanciful, arbitrary [i.e. made-
up terms like "Kodak"] or suggestive are fully protected, while
"descriptive words (e.g. "bubbly" champagne) may be
trademarked only if they have acquired secondary meaning,
that is, only if most consumers have come to think of the word
not as descriptive at all but as the name of the product.
• Hence, although a term's "primary" meaning is merely
descriptive, if through use the public has come to identify
the term with a plaintiff's product or service, the words
have acquired a "secondary meaning" and would become
a protectible trademark. ‘Secondary meaning' denotes
an association in the mind of the consumer
between the trade dress [or name] of a product
and a particular producer."
• Evidence: "The factors which this court has indicated it
 will consider on the issue of secondary meaning include:
1. '[t]he amount and manner of advertising,
2. volume of sales
3. the length and manner of use,
4. direct consumer testimony, and consumer surveys.'
• Consumer testimony and consumer surveys
are the only direct evidence on this
question ... [t]he other factors are relevant
in a more circumstantial fashion."
• But absence of a consumer survey is not per se
fatal to an action for preliminary injunction.
• ITC: IKC are descriptive words in that they specifically
describe a characteristic or ingredient of an article or
service.
• the International Kennel Club of Chicago "has acquired a
secondary meaning like that among a small but very well-
defined group of people in Chicago and elsewhere."
• In particular, the "amount and manner of advertising" and
the "length and manner of use" of the International
Kennel Club name yields a better than negligible chance of
establishing secondary meaning.
o Advertising and PR expenses have amounted to
almost 60,000 dollars, or more than 42% of the
club’s administrative and operating expenses.
o Plaintiff has operated under and advertised the
IKC name for over 50 years.
Dissenting:
Although the defendant's mark bears a high degree of
similarity to the plaintiff's name, their respective products and
services do not compete and are related only by their
connection to the broad theme of "dogs." Further, evidence of
actual consumer confusion about the origin of the toy dogs is,
in the words of the district court, "hardly overwhelming."
B.2. PHILIPPINE NUT INDUSTRY V. STANDARD
BRANDS, G.R. NO. L-23035, JULY 31, 1975
The Director of Patents ordered the cancellation of petitioner’s
certificate of registration for the trademark “Philippine Planters
Cordial Peanuts” upon complaint of respondent, owner of the
trademark “Planters Cocktail Peanuts.” The Director of Patents
ruled that the dominant word in the two marks is “Planters”
and that there is a confusing similarity between the two.
According to petitioner, PLANTERS cannot be considered as
the dominant feature of the trademarks in question because it
is a mere descriptive term, an ordinary word which is defined
in Webster International Dictionary as "one who or that which
plants or sows, a farmer or an agriculturist." Further, petitioner
argues that it was error for respondent Director to have
enjoined it from using PLANTERS in the absence of evidence
showing that the term has acquired secondary meaning.
Petitioner, invoking American jurisprudence, asserts that the
first user of a tradename composed of common words is given
no special preference unless it is shown that such words have
acquired secondary meaning. The use of the mark was
interrupted during the Japanese occupation and was
discontinued when the importation of peanuts was prohibited,
hence it cannot be presumed that it has acquired secondary
meaning.
Held:
• While it is true that PLANTERS is an ordinary word,
nevertheless it is used in the labels not to describe
ADL
the nature of the product, but to project the source
or origin of the salted peanuts contained in the
cans. The word PLANTERS printed across the upper
portion of the label in bold letters easily attracts and
catches the eye of the ordinary consumer and it is that
word and none other that sticks in his mind when he
thinks of salted peanuts.
• Admittedly, no producer or manufacturer may have a
monopoly of any color scheme or form of words in a label.
But when a competitor adopts a distinctive or dominant
mark or feature of another's trademark and with it makes
use of the same color ensemble, employs similar words
written in a style, type and size of lettering almost
identical with those found in the other trademark, the
intent to pass to the public his product as that of the other
is quite obvious.
On Secondary Meaning
• The doctrine is to the effect that a word or phrase
originally incapable of exclusive appropriation with
reference to an article on 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.
• There is oral and documentary evidence (invoices
covering the sale of Planters Cocktail Peanuts) showing
that the word PLANTERS has been used by and closely
associated with Standard Brands for its canned salted
peanuts since 1938 in this country.
On importation restrictions
Non-use of a trademark on an article of merchandize due to
legal restrictions or circumstances beyond one's control is not
to be considered as an abandonment.
B.3. ZANTARAIN’S INC. V. OAK GROVE SMOKEHOUSE,
INC., 698 F.2D 786 (1983)
Zatarain’s is the manufacturer and distributor of “Fish-Fri” and
“Chick-Fri,” coatings or batter mixes used to fry foods. Fish-Fri
has been used by petitioner since 1950 and Chick-Fri since
1968. Oak Grove began manufacturing coating mixes bearing
the words “Fish Fry” and “Chicken Fry.” Petitioner sued
defendant for trademark infringement.
Held:
• Descriptive terms are ordinarily not protectable as
trademarks. They may be protected, however, if they
have acquired a secondary meaning for the
consuming public.
• The concept of secondary meaning recognizes that words
with an ordinary and primary meaning of their own "may
by long use with a particular product, come to be known
by the public as specifically designating that product.
• In order to establish a secondary meaning for a term, a
plaintiff "must show that the primary significance
of the term in the minds of the consuming public is
not the product but the producer."
• BURDEN OF PROOF: The burden of proof to
Page 17
 establish secondary meaning rests at all times with
the plaintiff; this burden is not an easy one to
satisfy, for '[a] high degree of proof is necessary to
establish secondary meaning for a descriptive
term.'
• TESTS FOR DETERMINING WHETHER A MARK IS
DESCRIPTIVE:
1. Dictionary Test: A suitable starting place is the
dictionary, for "[t]he dictionary definition of the
word is an appropriate and relevant indication 'of the
ordinary significance and meaning of words' to
the public."
2. Imagination Test: This test seeks to measure the
relationship between the actual words of the mark
and the product to which they are applied. If a term
"requires imagination, thought and perception to
reach a conclusion as to the nature of goods.”
3. Whether competitors would be likely to need
the terms used in the trademark in describing
their product: A descriptive term generally relates
so closely and directly to a product or service that
other merchants marketing similar goods would find
the term useful in identifying their own goods.
4. Extent to which a term actually has been used
by others marketing a similar service or
product
• The fact that a term is not the only or even the most
common name for a product is not determinative, for
there is no legal foundation that a product can be
described in only one fashion.
ITC:
• Defendants argue that the marks are merely descriptive of
the characteristics/function of the product.
• Tests:
1. Dictionary – fish fry refers to the preparation and
consumption of fish. Descriptive.
2. Imagination - mere observation compels the
conclusion that a product branded "Fish-Fri" is a
prepackaged coating or batter mix applied to fish
prior to cooking. Descriptive.
3. Competitor test - Common sense indicates that in this
case merchants other than Zatarain's might find the
term "fish fry" useful in describing their own particular
batter mixes.
4. A number of companies other than petitioner have
chosen the word combination “fish fry” to identify
their batter mixes.
Fish fri has acquired secondary meaning in the New Orleans
area:
• Huge advertising expenditure
• Increase in the number of sales
• Consumer surveys – the most direct and persuasive
way of establishing secondary meaning
Chick fri has not acquired secondary meaning:
• Recent usage (not as long as fish fri)
• Advertising expenditures were minimal
• Survey evidence – focused on fish friers’ perceptions
about products used for frying chicken and is
insiffucient
Class notes:
Examination of Descriptive v. Suggestive
1. dictionary definition
2. the imagination test (does the term require imagination,
thought and perception?)
3. competitive need (would competitors find the term useful to
describe their similar products?)
4. third-party uses (how it has been used by others)
if mark is descriptive - apply the national kennel test, whether
it has acquired secondary meaning
example: generic - condiment; descriptive - ketchup;
or generic - ketchup, descriptive – tomato
Summary:
• Generic test: What are you/who are you (Filipino Yellow
Pages case)
• Descriptive v. Suggestive (Zantarain v. Old Grove
Smokehouse):
1. dictionary definition
2. the imagination test (does the term require
imagination, thought and perception?)
3. competitive need (would competitors find the term
useful to describe their similar products?)
4. third-party uses (how it has been used by others)
• Determining if descriptive mark has acquired secondary
meaning/acquired distinctiveness:
o Used so long and so exclusively; proof of
substantially exclusive and continuous use;
testimonial and documentary (invoices)
(Philippine Nut Industry case)
o Evidence to prove secondary meaning
(International kennel club):
1. Consumers’ testimony and surveys
2. Usage as to how long you have been using
the name
3. Advertising and volume of sales - the
question is not the extent of the promotional
efforts, but their effectiveness in altering the
meaning of [the term] to the consuming
public. (Zatarain)
Ang v. Teodoro
- sir did not assign this case
e.g. monobloc chair - generic or descriptive? descriptive. may
registration!
C. Trade Dress
Sections 123.1(k) and 121.1, IP Code
SECTION 123. REGISTRABILITY.
123.1. A mark cannot be registered if it:
(k) Consists of shapes that may be necessitated:
i. by technical factors or
ii. by the nature of the goods themselves or
iii. factors that affect their intrinsic value;
121.1. "Mark" means any visible sign capable of
distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or marked
container of goods;
Class notes:
Trade dress – total image of a business
 - refers to the distinctive features of a product’s
packaging or the product configuration itself.
- “the total image of a product and may include
features such as size, shape, color or color
combination, texture, graphics, or even particular
sales techniques.”
C.1. Tw o Pesos, I nc v. Taco Cabana, I nc., 505 U.S. 763
(1992)
Respondent, the operator of a chain of Mexican restaurants,
sued petitioner for trade dress infringement (under the unfair
competition/false designation of origin provision of the Lanham
Act). The lower court ruled for the respondent, holding that
respondent’s trade dress is inherently distinctive but has not
acquired secondary meaning. The CA held that a finding of no
secondary meaning did not contradict a finding of inherent
distinctiveness.
Held: Trade dress that is inherently distinctive and non-
functional is protectable under § 43(a) without a
showing that it has acquired secondary meaning, since
such trade dress itself is capable of identifying products or
services as coming from a specific source. This is the rule
generally applicable to trademarks, and the protection of
trademarks and of trade dress under § 43(a) serves the same
statutory purpose of preventing deception and unfair
competition. There is no textual basis for applying different
analysis to the two.
• The general rule regarding distinctiveness is clear: An
identifying mark is distinctive and capable of being
protected if it either (1) is inherently distinctive or
(2) has acquired distinctiveness through secondary
meaning.
• There is no persuasive reason to apply to trade dress a
general requirement of secondary meaning which is at
odds with the principles generally applicable to
infringement suits under § 43(a).
Class notes:
• Trade dress is the total image of a business (e.g. shape
and general appearance of the exterior of a restaurant,
identifying sign, interior kitchen floor plan, décor, menu,
equipment used to serve the food, the servers’ uniforms
and other features reflecting on the total image of the
restaurant)
• if trade dress inherently distinctive, no need for secondary
meaning
• what is the trade dress here? how the restaurant looked
like, etc.
• inherently distinctive trade dress may be protected,
without proof that the trade dress has secondary
meaning, because:
1. recovery for trademark infringement was generally
available without proof of secondary meaning
2. there was no persuasive reason to apply different
principles to trade dress, since:
a. the protections of trademarks and trade dress
were both for the purpose of preventing
deception,
b. no textual basis for different treatment - Where
secondary meaning does appear in the statute, it
is a requirement that applies only to merely
ADL
descriptive marks and not to inherently distinctive
ones., and
c. requiring a secondary meaning for inherently
distinctive trade dress would undermine the
purposes of the law (securing the goodwill of the
owner of the mark) and could have
anticompetitive effects (creates burdens on
startup companies) - Denying protection for
inherently distinctive nonfunctional trade dress
until after secondary meaning has been
established would allow a competitor, which has
not adopted a distinctive trade dress of its own,
to appropriate the originator’s dress in other
markets and to deter the originator from
expanding into and competing in these areas.
• example: yellow cab
C.2. WAL-MART STORES V. SAMARA BROTHERS, 529
U.S. 205 (2000)
Samara Brothers, Inc., designs and manufactures a line of
children’s clothing. Petitioner Wal-Mart Stores, Inc., contracted
with a supplier to manufacture outfits based on photographs of
Samara garments. After discovering that Wal-Mart and other
retailers were selling the so-called knockoffs, Samara brought
this action for, inter alia, infringement of unregistered trade
dress under § 43(a) of the Trademark Act of 1946 (Lanham
Act).
Held:
• The Lanham Act, in § 43(a), gives a producer a cause of
action for the use by any person of “any . . . symbo[l] or
device . . . likely to cause confusion . . . as to the origin . .
. of his or her goods.” The breadth of the confusion-
producing elements actionable under § 43(a) has been
held to embrace not just word marks and symbol marks,
but also “trade dress”—a category that originally
included only the packaging, or “dressing,” of a
product, but in recent years has been expanded by
many Courts of Appeals to encompass the
product’s design. These courts have correctly assumed
that trade dress constitutes a “symbol” or “device” for
Lanham Act purposes.
• Although § 43(a) does not explicitly require a producer to
show that its trade dress is distinctive, courts have
universally imposed that requirement, since without
distinctiveness the trade dress would not “cause confusion
. . . as to . . . origin,” as § 43(a) requires.
o The general principles qualifying a mark for
registration under § 2 of the Lanham Act are for
the most part applicable in determining whether
an unregistered mark is entitled to protection
under § 43(a).”
• Color can never be inherently distinctive, although they
can be protected upon a showing of secondary meaning.
• Design, like color, is not inherently distinctive.
o The attribution of inherent distinctiveness to
certain categories of word marks and product
packaging derives from the fact that the very
purpose of attaching a particular word to a
product, or encasing it in a distinctive packaging,
is most often to identify the source of the
product.
Page 19
 o With product design, as with color,
consumers are aware of the reality that,
almost invariably, that feature is intended
not to identify the source, but to render the
product itself more useful or more
appealing. Consumer predisposition to
equate the feature with the source does
not exist.
• Com pared w ith Tw o Pesos Case; PRODUCT
PACKAGI N G V. P RODUCT DESI GN: What was involved
in that case was product packaging or else tertium
quid that is akin to product packaging, not product
design. Hence, the non-applicability of secondary
meaning requirement for inherently distinctive marks, as
held in Two Pesos, does not apply in this case.

Class notes:
• Product packaging can be inherently distinctive;
product design cannot be inherently distinctive and
requires proof of secondary meaning
• In this case, the trade dress is the product itself, in the
taco cabana case it is the service. here the clothes are the
trade dress
• not inherently distinctive, hence you have to prove
secondary meaning
• a product design is not inherently distinctive and
therefore needs secondary meaning to be
protectable (see section 123.1(k))
• product designs can be very common -does not serve the
source identifying function

III. Acquisition of Ownership and Rights
SECTIONS 9, 122, 124.2, 124.4, 138, 145, 146, 147,
158 AND 165, IP CODE
Section 9. The Bureau of Trademarks. - The Bureau of
Trademarks shall have the following functions:
9.1. Search and examination of the applications for the
registration of marks, geographic indications and other marks
of ownership and the issuance of the certificates of
registration; and
9.2. Conduct studies and researches in the field of trademarks
in order to assist the Director General in formulating policies
on the administration and examination of trademarks.
Section 122. How Marks are Acquired. - The rights in a mark
shall be acquired through registration made validly in
accordance with the provisions of this law.
Section 124. Requirements of Application.
124.2. The applicant or the registrant shall file a declaration
of actual use of the mark with evidence to that effect,
as prescribed by the Regulations WITHIN THREE (3) YEARS
FROM THE FILING DATE OF THE APPLICATION.
Otherwise, the application shall be refused or the mark shall be
removed from the Register by the Director.
124.4. If during the examination of the application, the Office
finds factual basis to reasonably doubt the veracity of any
indication or element in the application, it may require the
applicant to submit sufficient evidence to remove the doubt.
Section 138. Certificates of Registration. - A certificate of
registration of a mark shall be prima facie evidence of:
1. the validity of the registration,
2. the registrant's ownership of the mark, and
3. of the registrant's exclusive right to use the same
in connection with the goods or services and those
that are related thereto specified in the certificate.
Section 145. Duration. - A certificate of registration shall
remain in force for ten (10) years: Provided, That the
registrant shall file a declaration of actual use and
evidence to that effect, or shall show valid reasons based
on the existence of obstacles to such use, as prescribed by the
Regulations, WITHIN ONE (1) YEAR FROM THE FIFTH
ANNIVERSARY OF THE DATE OF THE REGISTRATION of
the mark. Otherwise, the mark shall be removed from the
Register by the Office.
Section 146. Renewal. - 146.1. A certificate of registration
may be renewed for periods of ten (10) years at its
expiration upon payment of the prescribed fee and upon
filing of a request. The request shall contain the following
indications:
(a) An indication that renewal is sought;
(b) The name and address of the registrant or his successor-
in-interest, hereafter referred to as the "right holder";
(c) The registration number of the registration concerned;
(d) The filing date of the application which resulted in the
registration concerned to be renewed;
(e) Where the right holder has a representative, the name and
ADL
address of that representative;
(f) The names of the recorded goods or services for which the
renewal is requested or the names of the recorded goods or
services for which the renewal is not requested, grouped
according to the classes of the Nice Classification to which that
group of goods or services belongs and presented in the order
of the classes of the said Classification; and
(g) A signature by the right holder or his representative.
146.2. Such request shall be in Filipino or English and may be
made at any time within six (6) months before the
expiration of the period for which the registration was
issued or renewed, or it may be made within six (6)
months after such expiration on payment of the additional
fee herein prescribed.
146.3. If the Office refuses to renew the registration, it shall
notify the registrant of his refusal and the reasons therefor.
146.4. An applicant for renewal not domiciled in the Philippines
shall be subject to and comply with the requirements of this
Act.
Section 147. Rights Conferred. - 147.1. Except in cases of
importation of drugs and medicines allowed under Section 72.1
of this Act and of off-patent drugs and medicines, the owner of
a registered mark shall have the exclusive right to prevent all
third parties not having the owner's consent:
• from using in the course of trade
• identical or similar signs or containers
• for goods or services which are identical or
similar to those in respect of which the trademark is
registered
• where such use would result in a likelihood of
confusion.
In case of the use of an identical sign for identical goods
or services, a likelihood of confusion shall be presumed.
147.2. The exclusive right of the owner of a well-known
mark defined in Subsection 123.1(e) 1 which is registered in
the Philippines, shall extend to goods and services which
are not similar to those in respect of which the mark is
registered:
• Provided, That use of that mark in relation to those
goods or services would indicate a connection
between those goods or services and the owner of
the registered mark:
• Provided further, That the interests of the owner of
the registered mark are likely to be damaged by
such use.
Section 158. Damages; Requirement of Notice. - In any suit
for infringement, the owner of the registered mark shall not
be entitled to recover profits or damages unless the acts
have been committed WITH KNOWLEDGE that such
imitation is likely to cause confusion, or to cause
mistake, or to deceive. Such knowledge is presumed if the
registrant gives notice that his mark is registered by
displaying with the mark the words '"Registered Mark" or the
letter R within a circle or if the defendant had otherwise actual
notice of the registration.
1
Protection of well-known marks against identical, confusingly
similar, or translation of the mark used for identical or similar goods
Page 21

Note: Declaration of actual use shall be filed:
1. within 3 years from the filing date of the
application
2. within 1 year from the 5th anniversary of the
registration of the mark
Otherwise, the application shall be refused (1) or the mark
shall be removed (1 and 2) from the register.
Why is there a 3 year period from filing date? instead of prior?
takes into account the reality of commerce. it takes time to
launch a product and develop it prior to actual launch. if you
apply the old law, you will be exposing yourself to people who
may copy your mark, you're unprotected
Section 165. Trade Names or Business Names. - 165.1. A
name or designation may not be used as a trade name if:
• by its nature or
• the use to which such name or designation may be
put,
1. it is contrary to public order or morals and
2. if, in particular, it is liable to deceive trade circles or
the public as to the nature of the enterprise identified
by that name.
165.2.(a) Notwithstanding any laws or regulations providing
for any obligation to register trade names, such names shall be
protected, even prior to or without registration, against
any unlawful act committed by third parties.
(b) In particular, any subsequent use of the trade name
by a third party, whether as a trade name or a mark or
collective mark, or any such use of a similar trade name
or mark, likely to mislead the public, shall be deemed
unlawful.
165.3. The remedies provided for in Sections 153 to 156 and
Sections 166 and 167 shall apply mutatis mutandis.
165.4. Any change in the ownership of a trade name
shall be made with the transfer of the enterprise or
part thereof identified by that name. The provisions of
Subsections 149.2 to 149.4 shall apply mutatis mutandis.
IPO OFFICE ORDER NO. 187 SERIES OF 2010
The registrant of a trademark ... shall give notice that the
same is registered by displaying with the mark the words
“Registered Mark” or the letter R within a circle or
“Reg.IPOPHL”...
ARTICLE 8, PARIS CONVENTION
Article 8 Trade Names - A trade name shall be protected in all
the countries of the Union without the obligation of filing
or registration, whether or not it forms part of a trademark.
A. OWNERSHIP AND USE OF TRADEMARK AND
TRADE NAME
Class notes:
• Registration is not a mode of acquiring ownership. It
is merely prima facie proof of ownership.
• Ownership is acquired by adoption AND use.
• Trademark rights are not created by sporadic,
casual, and nom inal shipm ents of goods bearing
a mark. There must be a trade in goods sold under
the mark or at least an active and public attem pt
to establish such a trade.”- P&G v. Johnson &
Johnson (485 F.Supp. 1185)
Summary of rulings:
Trademark Trade Name
Shangri-La Use can be
outside PH (old
law)
Isetan Use must be in Use must be in
PH (old law) PH (old law)
Harvard Use can be Use can be
outside PH for outside PH
well-known (new law)
marks (new
law)
A.1. SHANGRI-LA INTERNATIONAL V. DEVELOPERS
GROUP, G.R. 159938, MARCH 31, 2006
Shangri-la (petitioner) uses the Shangri-La (trade name) and S
mark for its hotels. It had prior use outside PH. Respondent
uses the same marks for its business in PH, claiming that it has
prior use in PH. Petitioners filed a petition for cancellation of
respondent’s marks on the ground that the same were illegally
and fraudulently obtained and appropriated. After petitioner’s
establishment of its hotel business in PH, respondent filed an
action for infringement against petitioner.
Held:
• Under the old trademark law, 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 registration.
• Registration, without more, does not confer upon the
registrant an absolute right to the registered mark.
o By itself, registration is not a mode of
acquiring ownership. When the applicant is
not the owner of the trademark being applied for,
he has no right to apply for registration of the
same. Registration merely creates a prima facie
presumption of the validity of the registration, of
the registrant's ownership of the trademark and
of the exclusive right to the use thereof.
• The certificate of registration is merely a prima facie proof
that the registrant is the owner of the registered mark or
trade name. Evidence of prior and continuous use of
the mark or trade name by another can overcome
the presumptive ownership of the registrant and
may very well entitle the former to be declared
owner in an appropriate case.
• As between actual use of a mark without
registration, and registration of the mark without
actual use thereof, the former prevails over the
latter.
ITC:
• Respondent did not establish prior use of the mark,
hence registration is void.
• There was bad faith – president was a guest at
petitioner’s hotel before he caused the registration of
the mark and logo, and surmised that he must have
 copied the idea there. Priority is of no avail to the bad
faith plaintiff.
• Petitioners had prior widespread use of the mark and
logo abroad.
• Difference between section 2, which requires use in
the PH, and section 2-A, which has no such
requirement:
o Section 2 provides what is registrable. Under
Section 2, in order to register a trademark,
one must be the owner thereof and must
have actually used the mark in commerce in
the Philippines for 2 months prior to the
application for registration. Since ownership
of the trademark is required for registration,
Section 2A of the same law sets out to
define how one goes about acquiring
ownership thereof.
o Section 2-A sets out how ownership is
acquired. These are two distinct concepts.
Under Section 2A, it is clear that actual use
in commerce is also the test of ownership
but the provision went further by saying that
the mark must not have been so
appropriated by another. Additionally, it is
significant to note that Section 2A does not
require that the actual use of a trademark
must be within the Philippines.
• Hence, under R.A. No. 166, as amended, one may be
an owner of a mark due to actual use thereof but not
yet have the right to register such ownership here
due to failure to use it within the Philippines for two
months.
• 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 2month 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 DGCI's registration of the
mark, the same was already being used by the
petitioners, albeit abroad, of which DGCIs president
was fully aware.
Class notes:
• compare section 2 versus section 2-A as to use
o section 2 provides for what is registrable (use
in PH)
o section 2-A sets out how ownership is
acquired (use in commerce)
• registration is not a mode of acquiring ownership. merely
prima facie proof of ownership. Ownership is acquired
by adoption and use, which can overcome a prior
registration
• shangrila hotel was the first to use abroad - so where do
you consider use? in the philippines or abroad? why did
they consider the use abroad?
• SC declared that for one to apply for registration
there must be actual use in the Philippines, but in
the second paragraph, the "in the Philippines"
phrase is missing. Thus through actual use outside
the philippines, ownership can be acquired -
compare with next case
ADL
• now, we dont have section 2-A anymore
• there is no discussion as to whether shangrila is a well-
known mark
• but there was another issue on bad faith - president went
to shangrila. but even without the admission, you can see
the similarity on the logo - Bad Faith Registration
• Sir: he would have stopped at bad faith registration, no
need to go into statutory construction
A.2. E.Y. INDUSTRIAL SALES V. SHEN DAR
ELECTRICITY, G.R. NO. 184850, OCTOBER 20, 2010
EYIS, a domestic corporation, imports air compressors from
ShenDar, a foreign corporation. ShenDar registered the mark
“Vespa” for use on air compressors and welding machines in
PH. Subsequently, EYIS also filed an application for the mark
“Vespa” for use on air compressors. Certificate of registration
was first issued to EYIS in 2004, then to ShenDar in 2007.
ShenDar filed a petition for caancellation of EYIS’s registration,
arguing that it was the first to file an application for the mark
and that EYIS was a mere distributor.
Held:
• First to file rule: Section 123.1(d) of the IP code
provides the first-to-file rule: a mark cannot be registered
if it is identical with a registered mark belonging to a
different proprietor or a mark with an earlier filing or
priority date, in respect of: (a) the same goods or
services; (b) closely related goods or services; or (c) if it
nearly resembles such a mark as to be likely to deceive or
cause confustion.
• First to file rule not controlling: Under this provision,
the registration of a mark is prevented with the filing of an
earlier application for registration. This must not,
however, be interpreted to mean that ownership
should be based upon an earlier filing date.
o While RA 8293 removed the previous
requirement of proof of actual use prior to the
filing of an application for registration of a mark,
proof of prior and continuous use is
necessary to establish ownership of a
mark. Such ownership constitutes sufficient
evidence to oppose the registration of a mark.
• Prior registrant is ONLY presumptive owner and it
has been ruled that the prior and continuous use of a
mark may even overcome the presumptive
ownership of the registrant and be held as the owner
of the mark.
• By itself, registration is not a mode of acquiring
ownership. When the applicant is not the owner of the
trademark being applied for, he has no right to apply for
registration of the same.
ITC:
• Prior use by EYIS established by evidence consisting of
sales invoices. Sales invoices antedate ShenDar’s date of
first use indicated in its trademark application as well as
that indicated in its declaration of actual use.
• IT has sold the air compressors bearing the “VESPA” to
various locations in the Philippines, as far as Mindanao
and the Visayas since the early 1990’s.
• Shendar failed to refute petitioner’s evidence.
Class notes:
Page 23
• Case said: Under RA 8293, the prior and continuous use is
necessary to establish ownership
• Can use be outside the Philippines? here, use is in the
Philippines
• Unlike in Shangrila, the court merely looked at sales
invoice in the Philippines, court did not pay attention to
sales outside the philippines
A.3. KABUSHI KAISHA ISETAN, V. IAC, G.R. NO. 75420,
NOVEMBER 15, 1991
Isetan (Japan) filed a case against Isetann (Philippines) for
cancellation of the latter’s trademark/tradename and SEC
registration. Isetan alleges that there was intent on the part of
Isetann to cash in on the reputation and goodwill of the former
since it was an internationally known brand from Japan.
Held:
• A fundamental principle of Philippine Trademark Law is
that actual use in commerce in the Philippines is a pre-
requisite to the acquisition of ownership over a trademark
or a tradename.
• Adoption is not use. One way 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 records show that the petitioner has never
conducted any business in the Philippines. It has
never promoted its tradename or trademark in the
Philippines. It has absolutely no business goodwill in the
Philippines. It is unknown to Filipinos except the very few
who may have noticed it while travelling abroad. It has
never paid a single centavo of tax to the Philippine
government. Under the law, it has no right to the remedy
it seeks.
• Any goodwill, reputation, or knowledge regarding the
name Isetann is purely the work of the private
respondent. Evidence was introduced on the extensive
promotional activities of the private respondent.
• The PRINCIPLE OF TERRITORIALITY OF
TRADEMARK LAW has been recognized in the
Philippines (hence, use must be in the Philippines).
• It might be pertinent at this point to stress that
what is involved in this case is not so much a
trademark as a tradename. Isetann Department Store,
Inc. is the name of a store and not of product sold in
various parts of the country. This case must be
differentiated from cases involving products
bearing such familiar names as "colgate", "Singer".
"Toyota", or "Sony" where the products are marketed
widely in the Philippines. There is no product with the
name "Isetann" popularized with that brand name in the
Philippines. Unless one goes to the store called Isetann in
Manila, he would never know what the name means.
Similarly, until a Filipino buyer steps inside a store called
"Isetan" in Tokyo or Hongkong, that name would be
completely alien to him. The records show that among
Filipinos, the name cannot claim to be internationally well-
known.
Paris Convention
• The Paris Convention for the Protection of
Industrial Property does not automatically exclude
all countries of the world which have signed it from
using a tradename which happens to be used in
one country.
o 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.
• APPLICATION OF WELL-KNOWN MARK
REQUISITES TO TRADE NAMES: Indeed, the
Philippines is a signatory to this Treaty and, hence, we
must honor our obligation thereunder on matters
concerning internationally known or well known marks.
However, this Treaty provision clearly indicated the
conditions which must exist before any trademark
owner can claim and be afforded rights such as the
Petitioner herein seeks and those conditions are that:
a. the mark must be internationally known or well
known;
b. the subject of the right must be a trademark, not
a patent or copyright or anything else;
c. the mark must be for use in the same or similar
kinds of goods; and
d. the person claiming must be the owner of the
mark
• There is no showing that the Japanese firm’s
registration in Japan or Hongkong has any influence
whatsoever on the Filipino buying public.
Class notes:
• Actual use in commerce should be in the Philippines. why?
Japanese company was not doing business in the
Philippines. and the trade name is used for the business, a
store, not a product
• compare with shangri-la case where the court ruled that
use abroad qualifies (but that was with an element of bad
faith)
o example: a-venue in singapore and a-venue in
philippines
A.4. CANON KABUSHIKI KAISHA VS. COURT OF
APPEALS, G.R. NO. 120900, JULY 20, 2000
Respondent NSR Rubber filed an application for registration of
the mark CANON for sandals. Petitioner, a foreign corporation,
opposed, alleging that it has registered the mark CANON in
various countries covering goods belonging to class 2 (paints,
chemical products, toner, and dyestuff). Petitioner also
registered CANON in the Philippines. Petitioner asserts that it
has the exclusive right to the mark CANAON because it forms
part of its corporate name or tradename, protected by Article 8
of the Paris Convention.
Held:
On similarity of goods
• When the trademark is used by a party for a product in
which the other party does not deal, the use of the same
trademark on the latter’s product cannot be validly
objected to.
o Paints, chemical products, toner and dye stuff are
different from the sandals of respondent.
o Petitioner failed to attach evidence that it has
also embarked in the production of footwear
products.
• The certificate of registration confers upon the
trademark owner the exclusive right to use its own
symbol only to those goods specified in the
 certificate, subject to the conditions and limitations
stated therein.
• In cases of confusion of business or origin, the question
that usually arises is whether the respective goods or
services of the senior user and the junior user are
so related as to likely cause confusion of business
or origin, and thereby render the trademark or
tradenames confusingly similar.
o Goods are related when:
they belong to the same class or have
the same descriptive properties;
when they possess the same physical
attributes or essential characteristics
with reference to their form,
composition, texture or quality;
they serve the same purpose or are sold
in grocery stores.
On Paris Convention’s protection of trade names
• The controlling doctrine with respect to the applicability of
Article 8 of the Paris Convention is that established in
Kabushi Kaisha Isetan vs. Intermediate Appellate Court:
"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."
• The Paris Convention for the Protection of
Industrial Property does not automatically exclude
all countries of the world which have signed it from
using a tradename which happens to be used in
one country.
• Petitioner assails the application of the case of Kabushi
Kaisha Isetan vs. Intermediate Appellate Court to this
case. Petitioner points out that in the case of Kabushi
Kaisha Isetan vs. Intermediate Appellate Court, petitioner
therein was found to have never at all conducted its
business in the Philippines unlike herein petitioner who
has extensively conducted its business here and also had
its trademark registered in this country.
• The court applied the principles on well-known
marks in the protection of trade names:
o One of the requisites to be entitled to protection
under the Paris Convention is that the mark must
be used in the same or similar kinds of goods.
o Petitioner failed to comply with this requirement.
• The ruling in Kabuki Kaisha was made independent of
the factual finding that petitioner in said case had
not conducted its business in this country.
A.5. FREDCO MANUFACTURING V. HARVARD
UNIVERSITY, G.R. NO. 185917, JUNE 1, 2011
Fredco filed a petition for cancellation against Harvard
University. Harvard University is the registered owner of the
mark HARVARD VERITAS SHIELD SYMBOL used for decals,
tote bags, serving trays, sweatshirts, tshirts, hats and flying
discs. Fredco alleged prior use and prior registration in the
Philippines of the mark on the same class of goods. While
Harvard University had actual prior use of its marks abroad for
a long time, it did not have actual prior use in the Philippines
of the mark “Harvard Veritas Shield Symbol” before its
application for registration of the mark “Harvard.”
ADL
Held:
• Fredco’s registration of the mark “Harvard” and its
identification of origin as “Cambridge, Massachusetts”
falsely suggest that Fredco or its goods are connected
with Harvard University, which uses the same mark
“Harvard” and is also located in Cambridge,
Massachusetts.
• The Philippines and the United States of America are both
signatories to the Paris Convention for the Protection of
Industrial Property (Paris Convention).
o Thus, this Court has ruled that the Philippines is
obligated to assure nationals of countries of the
Paris Convention that they are afforded an
effective protection against violation of their
intellectual property rights in the Philippines in
the same way that their own countries are
obligated to accord similar protection to
Philippine nationals.
o Thus, under Philippine law, a trade name of
a national of a State that is a party to the
Paris Convention, whether or not the trade
name forms part of a trademark, is
protected “without the obligation of filing
or registration.”
o “Harvard” is the trade name of the world
famous Harvard University, and it is also a
trademark of Harvard University. Under
Article 8 of the Paris Convention, as well as
Section 37 of R.A. No. 166, Harvard University is
entitled to protection in the Philippines of its
trade name “Harvard” even without registration
of such trade name in the Philippines. This
means that no educational entity in the
Philippines can use the trade name “Harvard”
without the consent of Harvard University.
Likewise, no entity in the Philippines can claim,
expressly or impliedly through the use of the
name and mark “Harvard,” that its products or
services are authorized, approved, or licensed by,
or sourced from, Harvard University without the
latter’s consent.
• Harvard is a well-known mark. An internationally well-
known mark need not be registered or used in the
Philippines. All that is required is that the mark is well-
known internationally and in the Philippines for identical or
similar goods, whether or not the mark is registered or
used in the Philippines.
• While under the TERRITORIALITY PRINCIPLE a
mark must be used in commerce in the Philippines
to be entitled to protection, INTERNATIONALLY
WELLKNOWN MARKS ARE THE EXCEPTIONS TO
THIS RULE.
• Even before Harvard University applied for registration of
the mark “Harvard” in the Philippines, the mark was
already protected under Article 6bis and Article 8 of the
Paris Convention.
o Again, even without applying the Paris
Convention, Harvard University can invoke
Section 4(a) of R.A. No. 166 which prohibits the
registration of a mark “which may disparage or
falsely suggest a connection with persons, living
or dead, institutions, beliefs
Class notes:
Page 25
 • difference with shangrila: here the issue involves a
well-known mark
• under the paris convention we have to recognize well
known marks
• well known marks need not be registered and used to
be protected in the Philippines
• prima facie evidence that if you create a mark that is
a well-known mark, you are in bad faith
A.6. BIRKENSTOCK V. PHILIPPINE SHOE EXPO, G.R.
NO. 194307, NOVEMBER 20, 2013
Petitioner, a foreign corporation, applied for various trademark
registrations before the IPO for the family of Birkenstock
marks. At that time, there was an existing registration of the
mark Birkenstock in favor of Shoe Town, predecessor of
respondent. Birkenstock filed a petition for cancellation of the
registration alleging that it is the lawful and rightful owner of
the Birkenstock marks. During the pendency of the case,
respondent failed to file the required Declaration of Actual Use,
resulting in the cancellation of the mark.
Held: Petitioner is entitled to the registration of the mark.
Respondent failed to file the Declaration of Actual Use. Also,
petitioner is the true and lawful owner of the mark.
• Section 2A does not require that the actual use of a
trademark must be within the Philippines. Thus, under RA
166, one may be an owner of a mark due to its actual use
but may not yet have the right to register such ownership
here due to the owner’s failure to use the same in the
Philippines for two (2) months prior to registration.40 It
must be emphasized.
• Registration of a trademark, by itself, is not a mode of
acquiring ownership. If the applicant is not the owner of
the trademark, he has no right to apply for its registration.
Registration merely creates a prima facie presumption of
the validity of the registration, of the registrant’s
ownership of the trademark, and of the exclusive right to
the use thereof.
• It is not the application or registration of a trademark that
vests ownership thereof, but it is the ownership of a
trademark that confers the right to register the same.
• Petitioner was able to establish prior use of the mark
outside the Philippines. Respondent merely presented
copies of sales invoices and advertisements, which
are not conclusive evidence of its claim of
ownership of the mark as these merely show the
transactions made by respondent involving the
same.
Class notes:
decided under the old law
reiterated shangri-la ruling
actual use need not be in the Philippines
A.7. ECOLE DE CUISINE MANILLE V. LE CORDON BLEU
INT'L., G.R. NO. 185830, JUNE 5, 2013
Respondent, a foreign partnership, filed an application to
register the mark “Le Cordon Bleu.” Petitioner, a domestic
corporation, filed an opposition claiming that it is the owner of
the mark as it was the first entity to use the mark in the
Philippines.
Held: Under Section 2A, it is clear that actual use in commerce
is also the test of ownership but the provision went further by
saying that the mark must not have been so appropriated by
another. Additionally, it is significant to note that Section 2A
does not require that the actual use of a trademark must be
within the Philippines.
• The Philippines and France, Cointreau’s country of origin,
are both signatories to the Paris Convention for the
Protection of Industrial Property (Paris Convention)
• Under Philippine law, a trade name of a national of a
State that is a party to the Paris Convention,
whether or not the trade name forms part of a
trademark, is protected “without the obligation of
filing or registration.
ITC:
• Respondent has been using the mark in France prior to
Ecole’s averred first use of the same in the Philippines.
The directress of petitioner trained in respondent’s
culinary school in Paris, France.
• Even if Ecole was the first to use the mark in the
Philippines, it cannot be said to have validly appropriated
the same. At the time Ecole started using the subject
mark, the same was already being used by Contreau,
albeit abroad, of which Ecole’s directress was fully aware,
being an alumna of the latter’s culinary school.
• In any case, the present law on trademarks,
Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, as
amended, has already dispensed with the
requirement of prior actual use at the time of
registration. Thus, there is more reason to allow the
registration of the subject mark under the name of
Cointreau as its true and lawful owner.
Class notes:
• reiterated shangri-la ruling
• actual use for well-known marks need not be in the
Philippines
• For well-known marks - apply Paris Convention - use
outside Philippines counts
• For non-well-known marks, what is the rule?
• Similarity between Ecole and Shangrila:
1. Bad faith test
2. Prior use outside PH
Unassigned case; Mother’s restaurant v. mother’s other kitchen
• Prior use outside US does not create property rights
within US
B. REGISTRATION AND RIGHTS CONFERRED
B.1. BERRIS AGRICULTURAL CO., V. ABYADANG, G.R.
NO. 183404, OCTOBER 13, 2010
Respondent filed an application for the mark “NS D-10 PLUS”
for use on fungicides. Petitioner filed an opposition, alleging
that “NS D-10 PLUS” is similar and/or confusingly similar to its
registered trademark “D-10 80 WP”
Held:
• The ownership of a trademark is acquired by its
registration and its actual use by the
manufacturer or distributor of the goods made
available to the purchasing public.
• A certificate of registration of a mark, once issued,
constitutes prima facie evidence of the validity of
the registration, of the registrant’s ownership of the
mark, and of the registrant’s exclusive right to use the
 same in connection with the goods or services and
those that are related thereto specified in the
certificate.
• R.A. No. 8293, however, requires the applicant for
registration or the registrant to file a
declaration of actual use (DAU) of the mark,
with evidence to that effect, within three (3)
years from the filing of the application for
registration; otherwise, the application shall be
refused or the mark shall be removed from the
register.
• GROUNDS TO IMPUGN VALIDITY OF THE MARK:
1. Nullity of registration
2. Non-use
3. Prior use by another
• In other words, the prima facie presumption
brought about by the registration of a mark
may be challenged and overcome, in an
appropriate action, by proof of the nullity of the
registration or of nonuse of the mark, except
when excused.
• Moreover, the presumption may likewise be defeated
by evidence of prior use by another person, i.e., it
will controvert a claim of legal appropriation or of
ownership based on registration by a subsequent
user.
Proof of use
The determination of priority of use of a mark is a question of
fact. Adoption of the mark alone does not suffice.
• One may make advertisements, issue circulars, distribute
price lists on certain goods, but these alone will not inure
to the claim of ownership of the mark until the goods
bearing the mark are sold to the public in the market
• Accordingly, receipts, sales invoices, and testimonies
of witnesses as customers, or orders of buyers,
best prove the actual use of a mark in trade and
commerce during a certain period of time.
ITC:
• Berris established prior use and prior registration. It was
using its mark even before it filed for its registration with
the IPO as shown by the DAU and the sales invoices and
official receipts.
o The DAU, being a notarized document, especially
when received in due course by the IPO, is
evidence of the facts it stated and has the
presumption of regularity, entitled to full faith
and credit upon its face.
o As such, Berris has in its favor the rights
conferred by Section 147 of the IP Code.
• The marks are confusingly similar.
o According to Section 123.1(d) of R.A. No. 8293, a
mark cannot be registered if it is identical with a
registered mark belonging to a different
proprietor with an earlier filing or priority date,
with respect to: (1) the same goods or services;
(2) closely related goods or services; or (3) near
resemblance of such mark as to likely deceive or
cause confusion.
o Applying the dominancy test, D-10, the dominant
feature, appears in both marks. Both marks
pertain to the same types of goods. The
likelihood of confusion is present.
ADL
o Applying the holistic test, the marks are
confusingly similar. Both use the same type of
packaging material and have identical color
schemes.
B.2. COFFEE PARTNERS, INC. V. SAN FRANCISCO
COFFEE, G.R. NO. 169504, MARCH 3, 2010
Coffee Partners, a domestic corporation, was engaged in the
business of operating coffee shops in the country and was the
owner of the mark SAN FRANCISCO COFFEE. Respondent, a
domestic corporation engaged in the wholesale and retail of
coffee, registered the business name SAN FRANCISCO COFFEE
& ROASTERY. The issue is whether petitioner’s use of the
trademark SAN FRANCISCO COFFEE constitutes infringement
of respondent’s trade name SAN FRANCISCO COFFEE &
ROASTERY INC.
Held:
• 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.
• Clearly, a trade name need not be registered with
the IPO before an infringement suit may be filed by
its owner against the owner of an infringing
trademark. All that is required is that the trade
name is previously used in trade or commerce in
the Philippines. 2
ITC:
• Petitioner’s trademark is a clear infringement of
respondent’s trade name. The descriptive words SAN
FRANCISCO COFFEE are the dominant features of
respondent’s 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.
• The consuming public will likely be confused as to the
2
Old TM law, RA 166, required registration of a trade name as a
condition for the institution of an infringement suit.
Page 27
 source of the coffee being sold at petitioner’s coffee
shops.
• Geographic or generic words are not, per se, subject to
exclusive appropriation. It is only the combination of the
words “SAN FRANCISCO COFFEE,” which is respondent’s
trade name in its coffee business, that is protected against
infringement on matters related to the coffee business to
avoid confusing or deceiving the public.
Class notes:
• In this case trade name was not registered but was
already being used
• there are different definitions between trade names
and trademarks
o trade name - name of the enterprise
• how is a trade name protected? it appears in this case
that the trade name need not be registered for one to
sue for trade name infringement
o See section 165.2 - unregistered trade names
can claim protection by suing for infringement
even without registration
o There is no provision in the IP code saying that
well-known marks can sue under the IP Code -
so in short mas maganda pa yung status ng
trade names sa well-known marks - All that is
required is that the trade name is previously used
in trade or commerce in the Philippines
o Compare with Harvard case? Even before
Harvard University applied for registration of the
mark Harvard in the Philippines, the mark was
already protected under Article 6bis and Article 8
of the Paris Convention
Note: See Section 159.1 – user in good faith
• In fact, prior user should claim ownership because
trademark ownership is acquired by actual use
• This section can be interpreted as recognizing use
outside the Philippines
• Can apply in a situation where first user did not apply
for registration prior to second user’s use of the mark
IV. WELL-KNOWN MARKS
SECTIONS 123 (E) AND (F), 147.2, IP CODE
Section 123. Registrability. 123.1. A mark cannot be registered
if it:
(e) Is identical with, or confusingly similar to, or
constitutes a translation of a mark which is considered by
the competent authority of the Philippines to be WELL-
KNOWN INTERNATIONALLY AND IN THE PHILIPPINES,
whether or not it is registered here, as being already the
mark of a person other than the applicant for registration, and
used for IDENTICAL OR SIMILAR GOODS OR SERVICES:
Provided, That in determining whether a mark is well-known,
account shall be taken of the knowledge of the relevant
sector of the public, rather than of the public at large,
including knowledge in the Philippines which has been
obtained as a result of the promotion of the mark;
(f) Is identical with, or confusingly similar to, or
constitutes a translation of a mark considered well-known
in accordance with the preceding paragraph, which is
REGISTERED in the Philippines with respect to goods or
services which are NOT SIMILAR to those with respect to
which registration is applied for: Provided, That use of the
mark in relation to those goods or services would indicate a
connection between those goods or services, and the
owner of the registered mark: Provided further, That the
interests of the owner of the registered mark are likely
to be damaged by such use;
Section 147. Rights Conferred. 147.2. The exclusive right of
the owner of a well-known mark defined in Subsection
123.1(e) which is registered in the Philippines, shall extend to
goods and services which are not similar to those in
respect of which the mark is registered: Provided, That use of
that mark in relation to those goods or services would indicate
a connection between those goods or services and the owner
of the registered mark: Provided further, That the interests of
the owner of the registered mark are likely to be damaged
by such use.
SECTION 2 RULE 18 A.M. NO. 10-3-10-SC
SEC. 2. Well-known mark. — In determining whether a mark is
well-known, account shall be taken of the knowledge of the
relevant sector of the public, rather than of the public at
large, including knowledge in the Philippines which has been
obtained as a result of the promotion of the mark. The
following criteria or any combination thereof may be taken
into account in determining whether a mark is well-known:
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 the 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 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 or 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.
Provided, further, that the mark is well-known both
internationally and in the Philippines.
RULE 102, TRADEMARK REGULATIONS
Rule 102. Criteria for determining whether a mark is well-
known. 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 the 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 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 or absence of identical or similar marks
validly registered for or used on identical or services and
owned by persons other than the person claiming that his
mark is a well-known mark.
ARTICLE 6BIS, PARIS CONVENTION
Article 6bis
Marks: W ell-Know n M arks
(1) The countries of the Union undertake, ex officio if their
legislation so permits, or at the request of an interested party,
to refuse or to cancel the registration, and to prohibit the use,
of a trademark which constitutes a reproduction, an imitation,
or a translation, liable to create confusion, of a mark
considered by the competent authority of the country of
registration or use to be well known in that country as being
already the mark of a person entitled to the benefits of this
Convention and used for identical or similar goods. These
provisions shall also apply when the essential part of the mark
constitutes a reproduction of any such well-known mark or an
imitation liable to create confusion therewith.
(2) A period of at least five years from the date of registration
shall be allowed for requesting the cancellation of such a mark.
The countries of the Union may provide for a period within
which the prohibition of use must be requested.
(3) No time limit shall be fixed for requesting the cancellation
or the prohibition of the use of marks registered or used in bad
faith.
Class notes:
• mark cannot be registered if it is identical or similar to a
mark which is well known internationally or in the
Philippines regardless of whether it is registered in the PH
Sec 123 (e) - unregistered well known
Sec 123 (f) - registered well known
Difference between well-known marks that are registered and
ADL
those which are unregistered?
• Registered marks – protection extends to unrelated
goods and services (provided two other requisites are
met: connection and likelihood of injury) – See Sec.
147.2
• Unregistered marks – protection extends only to
similar goods or services
Section 100: Competent authority to determine whether a
mark is well-known;
1. director general
2. director of legal affairs
3. courts
1. SEHWANI, INC. V. IN-N-OUT BURGER, INC., G.R. NO.
171053, OCTOBER 15, 2007
Respondent IN-N-OUT Burger, a foreign corporation not doing
business in the Philippines, wanted to register its trademark
and tradename “IN-N-OUT” but found out that Sehwani
already had a Certificate of Registration for “IN-N-OUT.”
Respondent sought the cancellation of this Certificate of
Registration.
Held:
On Capacity to Sue
• Contrary to petitioners’ argument, respondent has the
legal capacity to sue for the protection of its trademarks,
albeit it is not doing business in the Philippines. Section
160 in relation to Section 3 of R.A. No. 8293, provides:
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 3 thereof provides:
SECTION 3. International Conventions and Reciprocity.—
Any person who is a national or who is domiciled or has a
real and effective industrial establishment in a country
which is a party to any convention, treaty or agreement
relating to intellectual property rights or the repression of
unfair competition, to which the Philippines is also a party,
or extends reciprocal rights to nationals of the Philippines
by law, shall be entitled to benefits to the extent
necessary to give effect to any provision of such
convention, treaty or reciprocal law, in addition to the
rights to which any owner of an intellectual property right
is otherwise entitled by this Act.
• Respondent’s COA is based on Article 6bis and 8 of the
Paris Convention, wherein both the United States and the
Philippines are signatories.
• Article 6bis which governs the protection of well-known
trademarks, is a self-executing provision and does not
require legislative enactment to give it effect in the
member country.
• The essential requirement under this Article is that the
trademark to be protected must be “well-known” in the
country where protection is sought. The power to
Page 29
 determine whether a trademark is well-known lies in the
“competent authority of the country of registration or
use.” This competent authority would be either the
registering authority if it has the power to decide this,
or the courts of the country in question if the issue
comes before a court.
On Being Well-Known
• In N Out is an internationally well-known mark as
evidenced by the following:
o Extent of registration – Various TM registrations
in the US and around the world
o Previous decisions of the IPO
o Advertisements
o Magazines, newspapers, and printouts of internet
website, interviews
• In N Out met two of the criteria: extent, duration and
geographical area of the mark, and the quality image or
reputation acquired by the mark
On cancellation
• Misrepresenting source of the goods or services is a
ground for cancellation.
• The evidence on record shows that not only did the
petitioners use the INNOUT Burger trademark for the
name of their restaurant, but they also used identical
or confusingly similar mark for their hamburger
wrappers and frenchfries receptacles, thereby
effectively misrepresenting the source of the goods
and services.
• Section 151(b) of R.A. No. 8293 specifically provides
that a petition to cancel the registration of a mark
which is registered contrary to the provisions thereof,
or which is used to misrepresent the source of the
goods or services, may be filed at any time.
2. FREDCO MANUFACTURING V. HARVARD
UNIVERSITY, G.R. NO. 185917, JUNE 1, 2011
V. BARS TO REGISTRATION
SECTION 123, IP CODE AND SECTION 4, R.A. 166
Section 123. Registrability. - 123.1. A mark cannot be
registered if it:
(a) Consists of immoral, deceptive or scandalous matter, or
matter which may disparage or falsely suggest a connection
with persons, living or dead, institutions, beliefs, or national
symbols, or bring them into contempt or disrepute;
(b) Consists of the flag or coat of arms or other insignia of the
Philippines or any of its political subdivisions, or of any foreign
nation, or any simulation thereof;
(c) Consists of a name, portrait or signature identifying a
particular living individual except by his written consent, or the
name, signature, or portrait of a deceased President of the
Philippines, during the life of his widow, if any, except by
written consent of the widow;
(d) Is identical with a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date, in
respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely
to deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or constitutes a
translation of a mark which is considered by the competent
authority of the Philippines to be well-known internationally
and in the Philippines, whether or not it is registered here, as
being already the mark of a person other than the applicant for
registration, and used for identical or similar goods or services:
Provided, That in determining whether a mark is well-known,
account shall be taken of the knowledge of the relevant sector
of the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a
result of the promotion of the mark;
(f) Is identical with, or confusingly similar to, or constitutes a
translation of a mark considered well-known in accordance
with the preceding paragraph, which is registered in the
Philippines with respect to goods or services which are not
similar to those with respect to which registration is applied
for: Provided, That use of the mark in relation to those goods
or services would indicate a connection between those goods
or services, and the owner of the registered mark: Provided
further, That the interests of the owner of the registered mark
are likely to be damaged by such use;
(g) Is likely to mislead the public, particularly as to the nature,
quality, characteristics or geographical origin of the goods or
services;
(h) Consists exclusively of signs that are generic for the goods
or services that they seek to identify;
(i) Consists exclusively of signs or of indications that have
become customary or usual to designate the goods or services
in everyday language or in bona fide and established trade
practice;
(j) Consists exclusively of signs or of indications that may serve
in trade to designate the kind, quality, quantity, intended
purpose, value, geographical origin, time or production of the
goods or rendering of the services, or other characteristics of
the goods or services;
(k) Consists of shapes that may be necessitated by technical
factors or by the nature of the goods themselves or factors
that affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form; or
(m) Is contrary to public order or morality.
A. GENERIC AND MERELY DESCRIPTIVE MARKS
[(h), (i), and (j)]
Class notes:
Generic factors:
1. Dictionary meaning
2. Generic use by claimant and competitors
3. Generic use in the media
4. Consumer survey
A.1. KELLOGG V. NATIONAL BISCUIT, 305 U.S. 111
(1938)
National Biscuit Company sued Kellogg Company to enjoin
alleged unfair competition by the manufacture and sale of the
breakfast food commonly known as shredded wheat. The
competition was alleged to be unfair mainly because Kellogg
Company uses, like the plaintiff, the name shredded wheat
and, like the plaintiff, produces its biscuit in pillow-shaped
form. Shredded wheat was previously covered by a patent
which has already expired.
Held:
On the name Shredded Wheat
• The plaintiff has no exclusive right to the use of the term
"Shredded Wheat" as a tradename. For that is the
generic term of the article, which describes it with
a fair degree of accuracy, and is the term by which
the biscuit in pillow-shaped form is generally
known by the public. Since the term is generic, the
original maker of the product acquired no exclusive right
to use it.
• As Kellogg Company had the right to make the article, it
had also the right to use the term by which the public
knows it.
• Moreover, the name "Shredded Wheat," as well as the
product, the process, and the machinery employed in
making it has been dedicated to the public. The basic
patent for the product and for the process of making it,
and many other patents for special machinery to be used
in making the article, has already expired.
• Since, during the life of the patents, "Shredded Wheat"
was the general designation of the patented product,
there passed to the public upon the expiration of
the patent not only the right to make the article as
it was made during the patent period, but also the right
to apply thereto the name by which it had become
known.
On the pillow form
• The plaintiff has not the exclusive right to sell shredded
wheat in the form of a pillow-shaped biscuit -- the form in
which the article became known to the public. That is the
form in which shredded wheat was made under the basic
patent: “on the termination of the patent, there passes to
the public the right to make the machine in the form in
which it was constructed during the patent.”
• Where an article may be manufactured by all, a particular
manufacturer can no more assert exclusive rights in a
form in which the public has become accustomed to see
the article and which, in the minds of the public, is
primarily associated with the article, rather than a
particular producer, than it can in the case of a name with
similar connections in the public mind.
• It is urged that all possibility of deception or confusion
would be removed if Kellogg Company should refrain from
using the name "Shredded Wheat" and adopt some form
other than the pillow-shape. But the name and form
are integral parts of the goodwill of the article. To
share fully in the goodwill, it must use the name and the
pillow shape. And in the goodwill Kellogg Company is as
free to share as the plaintiff.
• The evidence is persuasive that this form is functional --
that the cost of the biscuit would be increased and its high
quality lessened if some other form were substituted for
the pillow-shape.
• Sharing in the goodwill of an article unprotected by patent
ADL
or trademark is the exercise of a right possessed by all,
and in the free exercise of which the consuming public is
deeply interested.
No likelihood of confusion
Each company sells its biscuits only in cartons. The standard
Kellogg carton contains fifteen biscuits; the plaintiff's twelve.
The Kellogg cartons are distinctive. They do not resemble
those used by the plaintiff either in size, form, or color. And
the difference in the labels is striking.
Class notes:
first issue: shredded wheat
shredded wheat was descriptive and generic
no proof of secondary meaning
patent had already expired - nasa public domain na
second issue: pillow shape form
national biscuit did not have the exclusive right over the pillow
form
what should they have done? they should have a distinctive
word to the phrase "shredded wheat"
B. IMMORAL OR SCANDALOUS; PUBLIC ORDER
OR MORALITY [(a) and (m)]
Class notes:
• Standard is contemporary immorality
• Rationales for prohibiting scandalous and immoral marks:
o Not an attempt to legislate morality but to avoid using
government time, services and money for such marks
(Free Speech issue?)
o Not to give government stamp of approval
o Protect consumer sensibilities
Test:
1. what is the meaning of the mark? (in the context of
the marketplace as applied to the goods; not just per
se)
- sometimes di nagaapply, kunwari kapag vulgar word
2. is the meaning scandalous to the substantial
composite of the general public? (in the context of
contemporary attitudes; not just target consumers) -
target consumers have highest standard of immorality
e.g. milf
sex rod
pussy
B.1. IN RE BAD FROG BREWERY, INC. 1999 WL 149819
Bad Frog brewery sought to register a mark featuring a
realistic frog with its right arm raised in a gesture similar to the
“middle finger." Registration was denied on the ground that
applicant’s marks are scandalous and immoral, citing the
possibility of consumers interpreting it as an offensive gesture.
Held: First, the Examining Attorney has failed to prove that in
viewing either of applicant's two marks by themselves,
consumers would perceive the frog as flipping the bird.
Second, even assuming for the sake of argument that
consumers viewing applicant's marks by themselves would
perceive the frog as flipping the bird, the Examining Attorney
has failed to establish that said gesture -- when done by a
realistic looking animal (and not a human) and when directed
Page 31
to no particular person or group -- would be perceived as
scandalous and immoral.
B.2. IN RE OLD GLORY CONDOM CORP., 26 U.S.P.Q.2D
1216 (T.T.A.B. 1993)
Old Glory Condom’s registration of its mark was denied on the
ground that the mark consists of immoral or scandalous
matter. The design feature of applicant's mark consists of a
pictorial representation of a condom decorated with stars and
stripes in a manner to suggest the American flag. While the
American flag design appears as a feature of applicant's
trademark for condoms, the flag design is not applied to the
condoms themselves. The examining attorney found that the
use of the American flag as part of applicant's mark for
condoms was scandalous because it was likely to offend "a
substantial composite of the general public."
Held:
• Whether a mark is scandalous is to be determined from
the standpoint of a substantial composite of the
general public.
• Ordinary and common meaning of “scandalous:” shocking
to the sense of ... propriety, that which gives offense to
the conscience or moral feelings" and "giving offense to
the conscience or moral feelings; exciting reprobation,
calling out condemnation ... disgraceful to reputation and
"shocking to the sense of truth, decency, or propriety;
disgraceful, offensive; disreputable”
• In deciding whether a mark is scandalous under Section
2(a), we must consider that mark in the context of
contemporary attitudes.
• Whether applicant's mark would be likely to offend must
be judged not in isolation but in the entire context of
the mark's use.
• Seriousness of purpose is a factor to be taken into
account in assessing whether the mark is offensive or
shocking.
ITC: applicant markets its condoms in packaging which
emphasizes applicant's commitment to the sale of high quality
condoms as a means of promoting safer sex and eliminating
AIDS and its belief that the use of condoms is a patriotic act.
Although we know that not everyone would share applicant's
view that the use of condoms is a patriotic act, the seriousness
of purpose surrounding the use of applicant's mark--a
seriousness of purpose made manifest to purchasers on the
packaging for applicant's goods--is a factor to be taken into
account in assessing whether the mark is offensive or
shocking.
C. DISPARAGING [(a)]
C.1. PRO-FOOTBALL, INC. V. HARJO, 284 F.SUPP.2D 96
(2003)
Pro-Football holds six trademarks containing the word
“redskins.” Several Native Americans filed a petition to cancel
the trademarks, arguing that the use of the word “redskins”
may disparage Native Americans and may cast Native
Americans into contempt or disrepute in violation of the
Lanham Act.
Held:
• The trademarks may disparage if they may "dishonor
by comparison with what is inferior, slight, deprecate,
degrade, or affect or injure by unjust comparison."
• Unlike the inquiry into whether a trademark is scandalous,
in deciding whether the matter may be disparaging we
look, not to American society as a whole, but to the
views of the referenced group.
o The views of the referenced group, the Board
concluded, are "reasonably determined by the
views of a substantial composite thereof."
• The addition of the term "may" before the word
"disparage" in the Lanham Act was to "avoid an
interpretation of this provision which would require
an intent to disparage."
• The question of disparagement must be considered in
relation to the goods or services identified by the
mark in the context of the marketplace (not just
dictionary definitions)
• TEST (TWO-STEP PROCESS):
1. What is the meaning of the matter in question, as it
appears in the marks and as those marks are used
in connection with the services identified in the
registrations?
2. Is this meaning one that may disparage Native
Americans?
• As previously stated, both questions are to be
answered as of the dates of registration of the
m arks herein.
ITC:
• Since the oldest trademark in this case was issued in
1967 and the newest was issued in 1990, the Board
"focus[ed its] determination of the issue of
disparagement on the time periods, between 1967
and 1990, when the subject registrations issued
• TEST:
1. Meaning of the matter in question
• Redskins' clearly both refers to respondent's
professional football team and carries the
allusion to Native Americans inherent in the
original definition of that word.
2. Whether the matter in question may disparage native
Americans
• No direct evidence that mark may disparage
native Americans
• The survey did not test the participants' view
of the term "redskin(s)" in the context of
Pro-Football's services and it did not
measure the attitudes of the survey
participants as they were held during the
relevant time periods
• Inferences were made based on the
perceptions of the general public, not the
referenced group
• No basis for considering dictionary
definitions of “redskins” – dictionary
evidence only states that the term is often
offensive, which means that in certain
contexts the term was not considered
offensive. Disparaging and offensive are
two different things.
• There is no evidence to support the
conclusion that the drop-off of the use of the
term "redskin(s)" as a reference for Native
Americans is correlative with a finding that
the term is pejorative.
• No analysis of how the use of the mark in
connection with Pro-Football’s services
disparage native Americans.
Class notes:
Test:
1. What is the meaning of the mark? (in the context of
the marketplace as applied to the goods; not just per
se)
2. Is the meaning scandalous to the substantial
composite of the general public (in the context of
contemporary attitudes; not just target consumers)
e.g. Leche, gaga, gago.
Difference with scandalous marks
• Scandalous pertains to the mark, not to the goods. The
goods may be immoral or scandalous, but the mark may
not be (e.g blue magic, vivid)
• Scandalous to the public, not to the target market. e.g.
target market are pedophiles, high standard
determine if disparaging:
1. determine meaning as it appears on the mark and used on
the goods
2. determine the targeted hroup
- usually the group of people complaining about the mark
3. could the mark disparage a substantial composite of the
referenced group? Not majority. no particular percentage but
here 30% was considered substantial composite
• At what time frame did they determine whether it is
disparaging? At the time of registration.
• What would happen if the mark was not disparaging when
it was registered but eventually became disparaging?
D. DECEPTIVE AND DECEPTIVELY
MISDESCRIPTIVE [(a) and (g)]
Class notes:
• Classification into deceptive, misleading, merely
descriptive, deceptively misdescriptive, primarily
geographically descriptive and primarily geographically
misdescriptive found in old law (RA 166).
• Berris v. Abdayang: R.A. No. 8293 did not expressly repeal
in its entirety R.A. No. 166, but merely provided in Section
239.1 that Acts and parts of Acts inconsistent with it were
repealed. In other words, only in the instances where a
substantial and irreconcilable conflict is found between the
provisions of R.A. No. 8293 and of R.A. No. 166 would the
provisions of the latter be deemed repealed.
Issues:
• Is misleading the same as deceptive, deceptive,
deceptively misdescriptive, geographically deceptively
misdescriptive
• Personal names v merely a surname
• Do we require secondary meaning?
D.1. GOLD SEAL COMPANY V. WEEKS, 129 F. SUPP. 928
(1955)
Plaintiff used the mark Glass Wax for use on glass cleaner and
polish products. The product contains no wax. Is the mark
deceptive? Deceptively misdescriptive?
Held:
Not deceptive
• Test for deception:
ADL
Deception is found when an ESSENTIAL AND
MATERIAL ELEMENT IS MISREPRESENTED, is
DISTINCTLY FALSE, and is the VERY ELEMENT UPON
WHICH THE CUSTOMER REASONABLY RELIES IN
PURCHASING ONE PRODUCT OVER ANOTHER.
• When, as here, the product contains an element which
can only be known exactly by rigid scientific analysis, and
such element does not appear as determinative in leading
customers to buy the product, the mark is not deceptive.
• It would be of little or no interest to the average customer
who uses the products that the product does not contain
wax, for the ordinary customer knows nothing of the
chemical composition of a can of wax and cares less so
long as the product satisfies his need.
• The absence of wax does not automatically make the
mark deceptive for the purposes of registration. The
evidence does not establish that customers have
been misled. To the contrary, it appears that the
product satisfies the needs of the customers; that
the average or ordinary customer cares little about, and
knows little about, the scientific composition of the
product.
Descriptive
• The mark is not descriptive. What it describes is a wax for
glass. It does not describe a cleaner and polisher for metal
as well as for glass, which is the true nature of the
product.
Deceptively Misdescriptive
• Deceptiveness may be overcome by a showing of
distinctiveness (secondary meaning)
• Mark is deceptively misdescriptive and cannot be
registered unless it acquires secondary meaning:
o The product contains either no wax, or wax in
insufficient quantity to justify use of the word.
o Customers might justifiably believe it does
contain the element wax, whether or not it
was significant to them in purchasing the
product.
o It is sold in association with other wax
products
o Other glass and metal cleaners do contain wax
and have an appearance not basically dissimilar
to plaintiff's product.
Class notes:
Elements (deceptive):
1. When an essential and material element is
misrepresented, is distinctly false
2. And is the very element upon which the consumer
relies in making the purchase decision
Descriptive or deceptively misdescriptive
1. What is the meaning of the mark? Glass wax
2. What is the product? The product is a glass cleaner; it does
not contain wax
Conclusion: deceptively misdescriptive
• Mark is not deceptive/misleading if the consumer
cares little about it
• Do we require secondary meaning? Old IP code pwede.
New IP code no mention on deceptively misdescriptive
• This case used the term deceptive and misleading
Page 33
 synonymously. So section 123(a) and (g) may mean the
same thing.
D.2. IN RE BUDGE MANUFACTURING CO., INC., 857
F.2D 773 (1988)
Budge applied to register the mark LOVEE LAMB for use on
automotive seat covers. Application was denied on the ground
that the term LAMB is deceptive matter as the seat covers are
not made of lamb skin, but are made wholly from synthetic
fibers.
Held:
• The proscription of section 2(a) (consists of or comprises
decetive matter) is not against misdescriptive terms
unless they are also deceptive."
• Thus, that a mark or part of a mark may be inapt or
misdescriptive as applied to an applicant's goods
does not make it "deceptive."
• TEST WHETHER A MARK IS DECEPTIVE:
1. Whether the term is misdescriptive as applied to
the goods (character, quality, function, composition,
or use).
2. If so, whether anyone would be likely to believe the
misrepresentation.
3. Whether the misrepresentation would materially
affect a potential purchaser’s decision to buy the
goods.
• Advertising text is material separate and apart from any
trademark significance. It is the word of the mark, not the
statement of an advertising circular, which applicant seeks
to register.
ITC:
• Mark is deceptive:
1. Misdescriptive – seat covers are not made from lamb
or sheep
2. Likelihood of belief – there are other seat covers
which are made from natural lambskin and sheepskin.
Applicant makes these kinds of covers. Purchasers are
likely to believe the misrepresentation
3. Materiality – sheepskin and lambskin is more
expensive than simulated skins and natural and
synthetic skins have different characteristics.
Class notes:
1. Is the term misdescriptive of the character, quality,
function, composition or use of the goods? Yes.
2. If so, are prospective purchasers likely to believe the
misdescription? yes.
3. If so, is the misdescription likely to affect the decision
to buy?
Result: If yes to all, mark is deceptive.
• If not all requisites are satisfied:
o yes to 1 and 2 – mark is deceptively
misdescriptive
o Answer to 1 is yes and 2 and 3 are no?
Misdescriptive; mark is arbitrary. consumers
unlikely to believe and misdescription unlikely to
affect the
Example apple for computers; ivory for
soap
Summary:
1 out of 3 - arbitrary
2 out of 3 - deceptively misdescriptive
3 out of 3 - deceptive
E. PRIMARILY GEOGRAPHICALLY DESCRIPTIVE
OR DECEPTIVELY MISDESCRIPTIVE MARKS [(g) and
(g) ]
Class notes:
1. 123(g) - Likely to mislead as to the geographical origin –
m isleading/ deceptive; goods do not come from the place
2. 123(j) designates the geographical origin – descriptive -
tells the truth but is descriptive
• W hich is registrable? Number 2 provided the mark
has already acquired secondary meaning
• First one - miksleading - di pwede iregister. No provision
for secondary meaning
G.1. IN RE NANTUCKET, INC., 677 F.2D 95 (1982)
Nantucket Inc sought to register the mark Nantucket for use
on men’s shirts. Registration was refused on the ground that
the mark is primarily geographically deceptively misdescriptive.
Nantucket is an island in the Atlantic Ocean south of
Massachussetts. The shirts do not originate from said island.
Held:
• A mark is primarily geographical if it "is the name of a
place which has general renown to the public at
large and which is a place from which goods and
services are known to emanate as a result of
commercial activity."
• GOODS-PLACE ASSOCIATION: In determining
whether or not a geographical term is primarily
geographically descriptive of a product, of primary
consideration is whether or not there is an
association in the public mind of the product with
the particular geographical area, as for example
perfumes and wines with France, potatoes with Idaho,
rum with Puerto Rico, and beef with Argentina.
o The mark must be judged on the basis of its role
in the marketplace.
o If the goods do not come from the place named,
and the public makes no goods-place association,
the public is not deceived and the mark is not
geographically deceptively misdescriptive.
• The word 'primarily' should not be overlooked, for it is not
the intent of the federal statute to refuse registration of a
mark where the geographic meaning is minor, obscure,
remote, or unconnected with the goods." Thus, if there be
no connection of the geographical meaning of the mark
with the goods in the public mind, that is, if the mark is
arbitrary when applied to the goods, registration should
not be refused under § 2(e) (2).
• Test applied (no goods-place association):
1. whether the term conveys to consumers primarily or
immediately a geographical connotation, i.e., whether
it conveys a readily recognizable geographical
significance to the average consumer
- if not, the mark is registrable
2. if so, whether the applicant's goods or services do in
fact come from the place so named
• if they do, the term is primarily geographically
descriptive;
 • if they do not, it is primarily geographically
deceptively misdescriptive; and
3. if the term conveys primarily a geographical
connotation and the goods or services of the
applicant do not come from the place so
named, whether the use of the term is calculated, by
plan, design, or implication, to deceive the public as
to the geographical origin of the goods bearing the
mark
• if so, the mark is deceptively misdescriptive and
falls within the absolute prohibition of Section
2(a).
ITC:
• No goods-place association between Nanctucket and
men’s shirts.
Class notes:
What is the meaning of Nantucket?
Does Nantucket have a geographic significance? What is
missing in the examination of the court?
• What is missing - did not fulfill the third test - no goods-
place association test - would the public associate
the goods with the place as the place of geographic
source?
Sir:
TEST FOR DETERMING GEOGRAPHICAL
DESCRIPTIVENESS
1. Is the primary significance of the mark a generally known
geographic location?
2. If so, is there a goods-place association?
3. If so, do the goods come from the place?
- if yes, descriptive
- if no, deceptively misdescriptive
TEST FOR DETERMINING GEOGRAPHICALLY
DECEPTIVE MARKS:
1. Is the primary significance of the mark a generally-known
geographic location?
2. If so, do the goods or services not come from that place?
3. If so, would purchasers be likely to believe that they
originate there?
4. If so, would the representation be a relative factor in a
significant portion of the purchasers’ decision to buy?
Example accra, capital of gana
G.2. IN RE CALIFORNIA INNOVATIONS, 329 F.3D 1334
(2003)
California Innovations sought to register the mark CALIFORNIA
INNOVATIONS for use on automobile accessories and bags.
Registration was refused on the ground that the mark was
primarily geographically deceptively misdescriptive.
Held:
• Former categories of geographical marks under the
Lanham Act:
a. Geographically deceptive marks – (1) the mark
misdescribes the goods; (2) the public would likely
believe the misrepresentation; (3) the
misrepresentation would materially affect the public’s
decision to purchase the goods
b. Primarily Geographically Descriptive
ADL
c. Primarily Geographically Deceptively Misdescriptive –
last two marks are treated similarly, registrable upon
showing of secondary meaning
• NAFTA obliterated the disctinction between geographically
deceptive and geographically deceptively misdescriptive
marks
• Geographically deceptively misdescriptive marks can no
longer acquire secondary meaning and are permanently
denied registration. NAFTA also elevated the standards for
determining whether a mark is deceptively misdescriptive
with the imposition of the requirement of materiality in the
purchasers’ decision.
Class notes:
Thus, due to the NAFTA changes in the Lanham Act, the PTO
must deny registration under § 1052(e)(3) if:
1. the primary significance of the mark is a generally known
geographic location
2. the consuming public is likely to believe the place identified
by the mark indicates the origin of the goods bearing the
mark, when in fact the goods do not come from that place,
and
3. the misrepresentation was a material factor in the
consumer's decision.
• Why is it important to know whether the buyer was
misled?
• What is the change here? NAFTA.
• What made NAFTA relevant to this case? NAFTA removed
the distinction between the geographically deceptive and
the primarily geographically deceptively misdescriptive
• What's the difference between the two as to registration?
o Deceptive - cannot be registered even in the
presence of secondary meaning;
o deceptively misdescriptive - pwede iregister basta
may secondary meaning.
o But NAFTA abolished the distinction.
Sir: Because of the obliteration of the distinction, what are the
elements?
1. Is the primary significance of the mark a generally known
geographic location?
2. If so, do the goods or services not come from that place?
3. If so, would purchasers be likely to believe that they
originate there?
4. If so, would the representation be a material factor in the
purchaser's decision to buy?
NOTE:
Should we equate misleading (Section 123(g)):
1. With deceptive, or
2. With deceptively misdescriptive and geographically
deceptively misdescriptive?
3. If yes to 2, do we require secondary meaning?
• If berris would be applied, follow california case. As long
as deceptive, no secondary meaning. Kapag deceptively
misdescriptive and geographically deceptively
misdescriptive lang pwede secondary meaning
G.3. SHANG PROPERTIES V. ST. FRANCIS DEV’T CORP.,
G.R. NO. 190706, JULY 21, 2014
Respondent, developer of the St. Francis Commercial Center,
filed complaints against petitioner for unfair competition and
an opposition against petitioner’s application to register the
Page 35
marks St. Francis Towers and St. Francis Shangri-la Place.
Respondent claims that it has used St. Francis to identify its
property development projects at Ortigas Center and that said
mark has acquired secondary meaning.
Held:
• St. Francis mark is geographically descriptive and cannot
be appropriated in the absence of secondary meaning.
• Descriptive geographical terms are in the ‘public
domain’ in the sense that every seller should have the
right to inform customers of the geographical origin of his
goods.
• A ‘geographically descriptive term’ is any noun or
adjective that designates geographical location and
would tend to be regarded by buyers as descriptive
of the geographic location or origin of the goods or
services. A geographically descriptive term can indicate
any geographic location on earth.
• TEST: In order to determine whether or not the
geographic term in question is descriptively used,
the following question is relevant: (1) Is the mark the
name of the place or region from which the goods
actually come? If the answer is yes, then the geographic
term is probably used in a descriptive sense, and
secondary meaning is required for protection.”
Secondary meaning
• Secondary meaning is established when a descriptive
mark no longer causes the public to associate the
goods with a particular place, but to associate the
goods with a particular source.
• Under Section 123.234 of the IP Code, specific
requirements have to be met in order to conclude that a
geographically descriptive mark has acquired secondary
meaning, to wit:
a. the secondary meaning must have arisen as a
result of substantial commercial use of a mark in
the Philippines;
b. such use must result in the distinctiveness of
the mark insofar as the goods or the products are
concerned; and
c. proof of substantially exclusive and continuous
commercial use in the Philippines for five (5)
years before the date on which the claim of
distinctiveness is made.
• Unless secondary meaning has been established, a
geographically descriptive mark, due to its general
public domain classification, is perceptibly disqualified
from trademark registration.
ITC:
• St. Francis has not acquired secondary meaning:
o Projects confined within Ortigas Center and
limited to a certain locality – there was no
substantial commercial use recognized all
throughout the country
o No association with source
Class notes:
• Descriptive mark, no secondary meaning
• Goods-place association - sa cinite sa case - association sa
source, not sa place
• In BurkeParsonsBowlby Corporation v. Appalachian Log
Homes, Inc., it was held that secondary m eaning is
established w hen a descriptive m ark no longer
causes the public to associate the goods w ith a
particular place, but to associate the goods w ith a
particular SOURCE. I n other w ords, it is not enough
that a geographically descriptive m ark partakes of
the nam e of a place know n generally to the public
to be denied registration as it is also necessary to
show that the public w ould m ake a goods/ place
association — that is, to believe that the goods for
w hich the m ark is sought to be registered originate
in that place. To hold such a belief, it is necessary, of
course, that the purchasers perceive the mark as a place
name, from which the question of obscurity or remoteness
then comes to the fore.
• If we follow the ruling in this case, it would be contrary to
the previous case - dun sa isa sa place lang, ito refers to
the source
• Why did the court not find a secondary meaning? What
was lacking?
o Verily, records would reveal that while it is true
that respondent had been using the mark “ST.
FRANCIS” since 1992, its use thereof has been
merely confined to its realty projects within the
Ortigas Center, as specifically mentioned. As its
use of the mark is clearly lim ited to a certain
locality, it cannot be said that there w as
substantial com m ercial use of the sam e
recognized all throughout the country.
• Sir: What is peculiar about this statement? May ads
naman e. Nationwide naman yun. Why is this a factor in
determining distinctiveness when most businesses become
famous even if they operate only in one place? Especially
kapag geographical marks. Syempre dun lang sila sa area
na yun magooperate.
Distinguish with geographical indications
Separate form of protection. More geographically popular
areas. Like cognac, swiss watches. Wala pang IPO rules sa
geographical indications
F. FALSELY SUGGESTS A CONNECTION [(a)]
E.1. FREDCO MANUFACTURING V. HARVARD
UNIVERSITY, G.R. NO. 185917, JUNE 1, 2011
(see digest above)
Held:
• Fredco’s (1) registration of the mark “Harvard” and its (2)
identification of origin as “Cambridge, Massachusetts”
falsely suggest that Fredco or its goods are connected
with Harvard University, which uses the same mark
“Harvard” and is also located in Cambridge,
Massachusetts.
• Fredco’s registration should not have been allowed
because Section 4(a)1 of R.A. No. 166 prohibits the
registration of a mark “which may disparage or falsely
suggest a connection with persons, living or dead,
institutions, beliefs.
o Fredco does not have any affiliation or
connection with Harvard University, or even with
Cambridge, Massachusetts. Fredco or its
predecessor New York Garments was not
established in 1936, or in the U.S.A. as indicated
by Fredco in its oblong logo.
 o Fredco offered no explanation to the Court of
Appeals or to the IPO why it used the mark
“Harvard” on its oblong logo with the words
“Cambridge, Massachusetts,” “Established in
1936,” and “USA.”
• Purpose of provision: These provisions are intended
to protect the right of publicity of famous
individuals and institutions from commercial
exploitation of their goodwill by others.
Class notes:
• What right is being violated? Publicity right
• Example bonifacio global city Is it in violaltion of
section 123 A?
• No. Just because the mark pertains to a name of a
dead or living person does not mean that the
prohibition automatically comes into play. If the
name does not provide association, the mark is
registrable.
• Example da vinci. Wala ng falsely suggest a
connection. The public will not associate the mark
with the person. So checheck mo pa din yung
association. Kung ancient or historical figure,
doesnt follow na.
• Pangalan ng heroes sa alak - rizal gomburza etc – no
• KFC - colonel sanders, Ronald mcdonald - the
person has to be real. Artificial persons lang to.
G. FLAG AND NAMES [(b)]
R.A. 8491, FLAG LAW
Section 34. It shall be prohibited:
(b) to use the flag (6) as trademarks or for industrial,
commercial or agricultural labels or designs.
d) To display the flag
f) To add any word, figure, mark, picture, design, drawings,
advertisement, or imprint of any nature on the flag;
i) To use, display or be part of any advertisement or
infomercial;
Class notes:
• True representation of simulation: gives appearance,
effect or characteristics of the original
• A design should be perceived by the public as a flag,
regardless of whether other matter appears with or on the
flag - kapag pattern lang not necessarily.
• Must depict the flag, not the characteristics of the
flag
Paragraph c (consists of name, portrait or signature
identifying a particular living individual or the name,
signature or portrait of a deceased President of the
Philippines)
• Does not deal with rights of publicity, more of the right to
privacy
• To protect rights of privacy and publicity that living
persons have in the designations that identify them
• Does not have to be full name
o Applies also to first names, surnames, stage
ADL
names, titles or nicknames, if there is evidence
that the name identifies a specific living individual
• Example PNOY pajama - sa spelling, it identifies the
president. Kung may i, hindi prohibited
H. PRIOR USE AND REGISTRATION (TO BE
DISCUSSED WITH CONFUSION) [(d)]
I. COLOR [(l)]
Class notes:
Consists of color alone, unless defined by a given form
o Ano ibig sabihin ng unless defined by a given form?
Trademark logo which you cannot see in any other color
o Example: only yellow and red – mcdo
o Yun yung example ng unless defined by a given form
- yellow color would be in the form of M - golden
arches
Mercury logo is in red
When you apply for registration, normally black and white,
pero pwede mo gawing colored yung mark.
Do we need secondary meaning if the color is in a given form?
No.
When do we need secondary meaning?
I.1. QUALITEX CO. V. JACOBSON PRODS. CO., 514 U.S.
159 (1995)
Qualitex uses the green-gold color on its cleaning pads.
Respondent began selling its own pads which have a similar
color. Qualitex registered the green-gold color on press pads
as a trademark and sued respondent for trademark
infringement.
Held:
• Both the language of the Act and the basic underlying
principles of trademark law would seem to include color
within the universe of things that can qualify as a
trademark.
• Color qualifies as a symbol or device.
• A color can acquire secondary meaning: True, a product's
color is unlike "fanciful," "arbitrary," or "suggestive" words
or designs, which almost automatically tell a customer that
they refer to a brand. so. But, over time, customers may
come to treat a particular color on a product or its
packaging (say, a color that in context seems unusual,
such as pink on a firm's insulating material or red on the
head of a large industrial bolt) as signifying a brand. And,
if so, that color would have come to identify and
distinguish the goods - i.e. "to "indicate" their "source" -
much in the way that descriptive words on product.
• Functionality not a bar to using color alone as a mark:
Although sometimes color plays an important role in
making a product more desirable, sometimes it does not.
ITC:
• The color has become distinctive of applicant’s goods
in commerce.
Class notes:
• Issue was whether the color - without the form - can
be registered? Yes. Nonfunctional color. Walang
connect sa use nung product
• Example fatigue, functional so di pwede iregister
Page 37
 because it would not have secondary meaning
• Colors registered as trademarks: UPS brown color,
tiffany color
• Kapag colors per se kailangan ng secondary
meaning
Note: for composite marks with generic words
In actual practice, usually combined words
DISCLAIMER
• Rule 608 - examiners may require unregistrable matter to
be disclaimed to make of record that an element of the
mark is not being exclusively appropriated apart from the
composite mark
J. FUNCTIONALITY [(k)]
Class notes:
• Functionality is determined by utility
• Kinds of Functionality:
1. De facto functionality – Have some utilitarian
purpose. Every part serves a functional purpose
2. De jure functionality – Utility that it constitutes a
superior design which is used to compete
• Example car grill - function is to cool the engine - does not
prevent you from making designs to enable it to have a
source identifying function
J.1. DALLAS COWBOYS CHEERLEADERS INC V.
PUSSYCAT CINEMA LTD, 604 F. 2D 200 (1979)
Pussycat Cinema used the uniform of the Dallas Cheerleaders
for one of its films. Plaintiff asserts that it has a trademark in
its uniform and that defendants infringed and diluted the
trademark in advertising and exhibiting “Debbie Does Dallas.”
Defendants argue that the uniform is a purely functional item
necessary for the performance of cheerleading routines and
that it therefore is not capable of becoming a trademark.
Held:
• If the design of an item is nonfunctional and has
acquired secondary meaning, the design may
become a trademark even if the item itself is
functional.
• Moreover, when a feature of the construction of the item
is arbitrary, the feature may become a trademark even
though it serves a useful purpose.
ITC:
• The combination of the white boots, white shorts,
blue blouse, and white star-studded vest and belt is
an arbitrary design which makes the otherwise
functional uniform trademarkable.
J.2. TRAFFIX DEVICES, INC. V. MARKETING DISPLAYS,
INC., 532 U.S. 23 (2001)
MDI holds expired utility patents for a dual spring mechanism
that keeps temporary road and outdoor signs upright in
adverse wind conditions. Traffix began marketing similar
devices after the expiration of the patent. MDI sued Traffix for
trade dress infringement. The District Court ruled against MDI
holding that MDI failed to prove secondary meaning and that
there could be no trade dress protection for the design
because it was functional.
Held:
• The trade dress is functional.
• AN EXPIRED UTILITY PATENT HAS VITAL
SIGNIFICANCE in resolving a trade dress claim,
for a utility patent is strong evidence that the
features therein claimed are functional.
o Where the expired patent claimed the
features in question, one who seeks to
establish trade dress protection must carry
the heavy burden of showing that the
feature is not functional, for instance by
showing that it is merely an ornamental,
incidental, or arbitrary aspect of the
device.
o The inquiry into whether such features,
asserted to be trade dress, are functional by
reason of their inclusion in the claims of an
expired utility patent could be aided by going
beyond the claims and examining the patent
and its prosecution history to see if the
feature in question is shown as a useful part
of the invention.
• ‘In general terms a product feature is
functional,’ and cannot serve as a trademark, ‘if it
is essential to the use or purpose of the article
or if it affects the cost or quality of the article.’
Kinds of functionality:
1. DE FACTO - a feature is also functional when it is
essential to the use or purpose of the device or when
it affects the cost or quality of the device.
2. DE JURE - A functional feature is one the “exclusive
use of [which] would put competitors at a significant
NONREPUTATION-RELATED DISADVANTAGE.”
• it is proper to inquire into a “significant
nonreputation-related disadvantage” in cases of
esthetic functionality, like that involved in
Qualitex.
• Where the design is functional under the Inwood
formulation (de facto functional), there is no
need to proceed further to consider if there is a
competitive necessity for the feature.
• The person who asserts trade dress protection has
the burden of proving that the matter sought to be
protected is not functional.” This burden of proof
gives force to the well-established rule that trade
dress protection may not be claimed for product
features that are functional.
ITC:
• The design serves the important purpose of keeping
the sign upright in heavy wind conditions, and
statements in the expired patent applications indicate
that it does so in a unique and useful manner and at
a cost advantage over alternative designs.
• Functionality having been established, whether the
design has acquired secondary meaning need not be
considered.
J.3. IN RE MORTON-NORWICH PRODUCTS, INC., 671
F.2D 1332 (1982)
Appellant seeks to register its container for spray products.
Registration was refused on the ground that the design was
merely functional. This is not a configuration of goods case but
a configuration of the container for the goods case.
Held:
Kinds of functionality:
1. De facto – use of functional in the lay sense,
indicating that although the design of a product, a
container or a feature is directed to performance of a
function, it may be legally recognized as an indication
of source
• has some utilitarian purpose. Every part serves a
functional purpose
2. De jure – not registrable
• utility that it constitutes a “superior” design which
competitors must use to compete effectively
• A discussion of "functionality" is always in reference to the
design of the thing under consideration (in the sense of
its appearance) and not the thing itself.
• It is the “utilitarian” design of a “utilitarian” object with
which we are concerned.
• “Utilitarian” means “superior in function (de facto) or
economy of manufacture,” which superiority is determined
in light of competitive necessity to copy.
• Factors to consider in determining whether a
design is functional:
1. Existence of expired patent which disclosed the
utilitarian advantage of the design
2. Advertising – whether the originator of the design
touts its utilitarian advantages through advertising
3. Effect upon competition – availability of other
alternatives
4. Design results from a comparatively simple or cheap
method of manufacturing the article
ITC:
• The bottle is highly useful but that is not enough to render
the design of the spray bottle functional.
• A molded plastic bottle can have an infinite variety of
forms or designs and still function to hold liquid. No one
form is necessary or appears to be "superior."
• As to the appearance of the spray top, the evidence of
record shows that it too can take a number of diverse
forms, all of which are equally suitable as housings for the
pump and spray mechanisms.
• The design was not dictated by functional considerations
and did not result in a functionally or economically
superior design of such a container.
J.4. IN RE BABIES BEAT INC., 13 U.S.P.Q.2D 1729
(1990)
Babies Beat sought to register a configuration for baby bottles.
Registration was denied on the groun of de jure and de facto
functionality.
Held:
• In determining whether applicant's design is entitled to
trademark protection, our task is not to ascertain "the
mere existence of utility," but rather to ascertain "the
degree of design utility.
• The bottle configuration is de jure functional.
o The competitive product lacks grippers which
applicant’s product has.
o However, even assuming arguendo that the
competitive product could be held as easily and
as securely as applicant's product, it appears that
the competitive baby bottle design would be
ADL
more difficult to clean than would applicant's
baby bottle design. A standard baby bottle brush
may not fit into the competitive product (as it can
into applicant's product).
o Even if a standard baby bottle brush could fit into
the competitive product, it still may not reach the
center portion of the lower half of the bottle.
o Obviously, the ability to thoroughly clean and
sterilize a baby bottle is of great importance.
Indeed, applicant touts its baby bottle design as
being: "Easiest to Clean--No hard to reach
areas."
J.5. IN RE WEBER-STEPHEN PRODUCTS CO., 3
U.S.P.Q.2D 1659 (1987)
Weber-Stephen Products sought to register certain designs for
barbecue grills (the kettle body and legs design). Registration
was refused on the ground that the design was de jure
functional.
Held:
• If the design of a product or a container for a
product is so utilitarian as to constitute a superior
design which others in the field need to be able to copy
in order to compete effectively, it is DE JURE
FUNCTIONAL (FUNCTIONAL IN LAW) and, as such, is
precluded from registration for reasons of public policy.
ITC:
• Kettble body and legs design is not de jure functional.
• Application of tests in Morton:
1. Patent – nothing in the patent discloses any utilitarian
advantages of this design
2. Promotional materials - we cannot say that these
statements necessarily indicate that the shape of
applicant's involved grill bowl is functionally superior
to other grill bowls which are round but which
nevertheless have shapes which differ from the shape
of applicant's grill bowl, as, for example, round bowls
which are not as deep as applicant's, or bowls which
are circular with a flat bottom.
3. Availability of alternative designs - A wide variety of
alternative barbecue grill designs, including other
covered round designs, is available to applicant's
competitors, and that applicant's covered round
design is not superior, in cooking performance, to any
of the other covered designs, be they round, square,
rectangular, or whatever.
4. Comparative manufacturing cost of applicant’s design
– a round grill was more economical for applicant to
make because of the presses, tooling, etc. that
applicant already had on hand. It does not serve to
establish that a round design is necessarily cheaper
for all manufacturers, much less that applicant's
round grill configuration sought to be registered is
cheaper to manufacture than other round grill
designs. Mr. Karwacky, the
VI. LOSS OF RIGHTS
Genericism and abandonment are defenses
Page 39
A. GENERICISM
A.1. BAYER CO. V. UNITED DRUG CO., 272 F. 505
(1921)
Bayer filed suit against United Drug alleging that United Drug
infringed Bayer's trademark "Aspirin." Bayer’s patent over the
drug “acetyl salicylic acid” has just expired. United Drug was
selling the same compound under the name Aspirin.
Held:
• There are two classes of buyers involved:
1. Manufacturing chemists, physicians, and retail
druggists – familiar that the mark Aspirin belongs to
Bayer
2. General consuming public - These buyers did NOT
understand by the word anything more than a kind of
drug to which they had become habituated; these
buyers did NOT understand by the word anything
more than a kind of drug to which they had become
habituated
• The mark Aspirin has become generic:
o the drug was sold in bottles labeled 'Aspirin' with
some indication of the name of the tablet maker,
but none of Bayer
o Bayer used the word 'Aspirin' as though it was a
general term: Bayer’s label reads Bayer – Tablets
of Aspirin
o While this did not show any abandonment of the
name, which there has never been, it did show
how Bayer itself recognized the meaning which
the word had acquired, because the phrase most
properly means that these tablets were
Bayer's make of the drug known as
'Aspirin.
• Bayer should have insisted the tablet makers to market
the drug in small boxes BEARING BAYER’s NAME, or take
over the sales of the drug.
Class notes:
• They should have educated the public that aspirin is not a
generic name but a trademark
• If the mark has become generic, can it be revived?
o A mark that is originally generic can never be a
trademark
o A mark that has subsequently become generic
but used to be non-generic can be revived by
educating the public as to the mark - source
identifying function
• Examples of marks na naging generic na: Singer,
Goodyear, Thermos
o Coleman can use thermos by using the word
thermos to describe its products because
thermos has already attained a dual usage - one
referring to the trademark and one referring to
the generic sense of the word
A.2. AMERICA ONLINE, INC. V AT&T CORP., 243 F.3D
812 (2001)
America Online (AOL) sued AT&T for using the phrases "Buddy
List," "You have mail" and "IM." AOL has been using this
phrases in servicing their customers: "Buddy List" as a list of
friends who you could have a chat with, "You have mail" for
AOL's email service, and "IM'" as a real time chat, short for
instant message. AOL has a registered patent with "Buddy List"
only.
Held:
You have mail
• "You Have Mail" has been used to inform computer users
since the 1970s, a decade before AOL came into
existence, that they have electronic mail in their electronic
"mailboxes."
• The phrase has a functional nature.
o Rather than describing a service that AOL
offers - and indicating that it is describing such
a service -AOL simply uses "You Have Mail"
when the subscriber in fact has mail in the
electronic mailbox.
o AOL's use of the phrase, conditioned on whether mail
is present, does not describe AOL's e-mail service, but
rather simply informs subscribers, employing common
words to express their commonly used meaning, of
the ordinary fact that they have new electronic mail in
their mailboxes.
• You Have Mail is generic
o When words are used in a context that
suggests only their common meaning, they
are generic and may not be appropriated as
exclusive property.
o The farther a would-be mark falls from the
heartland of common meaning and usage, the
more "distinctive" the would-be mark can
become.
• De Facto Secondary Meaning
o A portion of the public associates You Have Mail
with AOL, the most widespread user of the
phrase. But this usage does not distinguish AOL
from other service providers because the phrase
is used in its commonly understood way.
o The repeated use of ordinary words functioning
within the heartland of their ordinary meaning,
and not distinctively, cannot give AOL a
proprietary right over those words, even if an
association develops between the words and
AOL.
A.3. HARLEY DAVIDSON V. GROTTANELLI, 164 F.3D
806 (1999)
Harley wants to prohibit Grottanelli from using the word “hog”
to identify the latter’s motorcycle repair shop business. Two
sets of Harley-Davidson's marks are at issue in this case: the
word "hog," used either to refer to its motorcycles or to an
officially sponsored bikers association, and its bar-and-shield
logo.
Held:
• The word “hog” is generic.
• No manufacturer can take out of the language a word,
even a slang term, that has generic meaning as to a
category of products and appropriate it for its own
trademark use.
• The term referred to motorcycles (or motorcyclists)
generally.
• Though not conclusive, dictionary definitions of a
word to denote a category of products are
significant evidence of genericness because they
usually reflect the public's perception of a word's meaning
and its contemporary usage.
• Newspaper and magazine use of a word in a
generic sense is "a strong indication of the general
public's perception" that the word is generic.
• Even the presumption of validity arising from federal
 registration cannot protect a mark that is shown on strong
evidence to be generic as to the relevant category of
products prior to the proprietor's trademark use and
registration.
• DUAL USAGE TERMS
o "Dual usage" in trademark law refers to a mark
that starts out as proprietary and gradually
become generic as to some segments of the
public. If such a mark "retains" trademark
significance, injunctive relief must be carefully
tailored to protect only the limited trademark use
and not to bar the generic use.
o Our case, however, concerns a mark that starts
out generic and is sought to be given trademark
significance by a manufacturer. That is what
Abercrombie and other cases forbid.
B. ABANDONMENT
SECTIONS 145, 146, 149, 150, 151 (C) AND 152 IP
CODE
Section 145. Duration. - A certificate of registration shall
remain in force for ten (10) years: Provided, That the
registrant shall file a declaration of actual use and
evidence to that effect, or shall show valid reasons based
on the existence of obstacles to such use, as prescribed
by the Regulations, within one (1) year from the fifth
anniversary of the date of the registration of the mark.
Otherwise, the mark shall be removed from the Register by the
Office. (Sec. 12, R.A. No. 166a)
Section 146. Renewal. - 146.1. A certificate of registration
may be renewed for periods of ten (10) years at its
expiration upon payment of the prescribed fee and upon filing
of a request. The request shall contain the following
indications:
(a) An indication that renewal is sought;
(b) The name and address of the registrant or his successor-
in-interest, hereafter referred to as the "right holder";
(c) The registration number of the registration concerned;
(d) The filing date of the application which resulted in the
registration concerned to be renewed;
(e) Where the right holder has a representative, the name and
address of that representative;
(f) The names of the recorded goods or services for which the
renewal is requested or the names of the recorded goods or
services for which the renewal is not requested, grouped
according to the classes of the Nice Classification to which that
group of goods or services belongs and presented in the order
of the classes of the said Classification; and
(g) A signature by the right holder or his representative.
146.2. Such request shall be in Filipino or English and may be
made at any time within six (6) months before the
expiration of the period for which the registration was
issued or renewed, or it may be made within six (6)
months after such expiration on payment of the
additional fee herein prescribed.
146.3. If the Office refuses to renew the registration, it shall
notify the registrant of his refusal and the reasons therefor.
ADL
146.4. An applicant for renewal not domiciled in the Philippines
shall be subject to and comply with the requirements of this
Act. (Sec. 15, R.A. No. 166a)
Section 149. Assignment and Transfer of Application and
Registration. - 149.1. An application for registration of a mark,
or its registration, may be assigned or transferred with or
without the transfer of the business using the mark. (n)
149.2. Such assignment or transfer shall, however, be null
and void if it is liable to mislead the public, particularly as
regards the nature, source, manufacturing process,
characteristics, or suitability for their purpose, of the goods or
services to which the mark is applied.
149.3. The assignment of the application for registration of a
mark, or of its registration, shall be in writing and require the
signatures of the contracting parties. Transfers by
mergers or other forms of succession may be made by any
document supporting such transfer.
149.4. Assignments and transfers of registrations of marks
shall be recorded at the Office on payment of the prescribed
fee; assignment and transfers of applications for registration
shall, on payment of the same fee, be provisionally recorded,
and the mark, when registered, shall be in the name of the
assignee or transferee.
149.5. Assignments and transfers shall have no effect against
third parties until they are recorded at the Office. (Sec. 31,
R.A. No. 166a)
Section 150. License Contracts. - 150.1. Any license contract
concerning the registration of a mark, or an application
therefor, shall provide for EFFECTIVE CONTROL by the
licensor of the QUALITY of the goods or services of the
licensee in connection with which the mark is used. If the
license contract does not provide for such quality
control, or if such quality control is not effectively
carried out, the license contract shall not be valid.
150.2. A license contract shall be submitted to the Office which
shall keep its contents confidential but shall record it and
publish a reference thereto. A license contract shall have
no effect against third parties until such recording is
effected. The Regulations shall fix the procedure for the
recording of the license contract. (n)
Section 151. Cancellation. - 151.1. A petition to cancel a
registration of a mark under this Act may be filed with the
Bureau of Legal Affairs by any person who believes that he is
or will be damaged by the registration of a mark under this Act
as follows:
(c) At any time, if the registered owner of the mark without
legitimate reason fails to use the mark within the
Philippines, or to cause it to be used in the Philippines
by virtue of a license during an uninterrupted period of
three (3) years or longer.
Section 152. Non-use of a Mark When Excused. - 152.1. Non-
use of a mark may be excused if caused by circumstances
arising independently of the will of the trademark
owner. Lack of funds shall not excuse non-use of a
Page 41
mark.
152.2. The use of the mark in a form different from the
form in which it is registered, which does not alter its
distinctive character, shall not be ground for cancellation or
removal of the mark and shall not diminish the protection
granted to the mark.
152.3. The use of a mark in connection with one or more of
the goods or services belonging to the class in respect of which
the mark is registered shall prevent its cancellation or removal
in respect of all other goods or services of the same class.
152.4. The use of a mark by a company related with the
registrant or applicant shall inure to the latter's
benefit, and such use shall not affect the validity of such
mark or of its registration: Provided, That such mark is not
used in such manner as to deceive the public. If use of a
mark by a person is controlled by the registrant or applicant
with respect to the nature and quality of the goods or
services, such use shall inure to the benefit of the
registrant or applicant. (n)
1. ACTUAL (NON-USE)
B.1. MATTEL V. FRANCISCO, G.R. NO. 166886, JULY 30,
2008
Jimmy Uy filed for a trademark application with the Bureau of
Patents for the registration of the trademark BARBIE for use in
confectionary products, such as milk, chocolate, candies, etc.
Mattel opposed this on the ground that it was confusingly
similar to its trademark on dolls, doll clothes and doll
accessories. However, IPO granted Uy’s application for the
trademark. Mattel filed a motion for new trial on the ground
that there was newly discovered evidence because there is an
alleged new application in the IPO with the Barbie trademark
under confectionaries. But, Uy argues that he has not filed any
Declaration of Actual Use. Therefore, the case is moot and
academic.
Held:
• Uy is deemed to have abandoned his application for the
trademark Barbie by failing to file his Declaration of
Actual Use. Hence, the case is moot and academic.
• Section 124.2 of RA 8293 requires that the applicant or
registrant shall file a declaration of actual use of the mark
with evidence to that effect as prescribed by the Rules
within 3 years from the filing date of the
application. Otherwise, the applicant shall be refused
registration or the marks shall be removed from the
Register.
• Likewise, the rules also provide that without any need of
notice from the Office, all applicants and registrants shall
file a DAU within 3 years without possibility of extension
form the filing date of the application. Otherwise, it shall
be refused or the mark shall be removed from the register
by the Director.
Class notes:
• Tacking - tack on the ownership of the person who bought
it
• Example sir bought san miguel, he gets superior rights
over the mark. Buyer can tack the time during which the
assignor used the mark.
• Assignment in gross (without the business) - this
requirement has been made lenient (see Section 149)
B.2. ANDRES ROMERO VS. MAIDEN FORM BRASSIERE
CO., INC., L-18289, MARCH 31, 1964
Maiden is engaged in the manufacture of brassieres one of
which is under the trademark “Adagio”. Andres seeks to cancel
the trademark as it is a common descriptive name of which the
patent has expired and Andres has been using the term Adagio
after Maiden has abandoned the same. Maiden Form stopped
using the mark during the period of time that the Government
imposed restrictions on importation of Maiden Form’s brassiere
bearing the trademark. Issue is whether or not Maiden
abandoned the mark.
Held:
• Maiden Form’s long and continuous use of the trademark
“Adagio” has not rendered it merely descriptive of the
product. Widespread dissemination does not justify the
defendants in the use of this trademark. Arbitrary
trademarks cannot become generic in this way.
• Abandonment: Temporary non-use did not affect
the rights of appellee because it was occasioned by
government restrictions and was not PERMANENT,
INTENTIONAL, AND VOLUNTARY.
• To work an abandonment, the disuse must be
permanent and not ephemeral; it must be
intentional and voluntary, and not involuntary or even
compulsory. There must be a thorough-going
discontinuance of any trade-mark use of the mark
in question.
• To establish the defense of abandonment, it is necessary
to show not only acts indicating a practical abandonment,
but an actual intention to abandon.
• Non-use because of legal restrictions is not
evidence of an intent to abandon. Abandonment will
not be inferred from a disuse over a period of years
occasioned by statutory restrictions on the name of liquor.
2. CONSTRUCTIVE
• ASSIGNMENT IN GROSS
• NAKED LICENSING
• FAILURE TO POLICE
• LACHES
• ESTOPPEL
• ACQUIESCE AND UNCLEAN HANDS
B.3. PEPSICO, INC. V. GRAPETTE CO., 416 F.2D 285
(1969)
PepsiCo, Inc., a holding company of several subsidiaries
including Pepsi Cola Co., a national soft drink bottle, sought an
injunction against Grapette-Aristocrat, Inc. and its holding
company Grapette Co. (Grapette) on the alleged infringement
of its trademark "Pepsi." In 1965 Grapette purchased the mark
"Peppy" and intended to bottle a soft "pepper" drink with that
name. The purchase of the trademark did not carry with it the
seller’s physical assets or plant, inventory, customer lists,
formulas, etc.
Held:
• The transfer of the trademark was invalid because
it was an assignment in gross. 3
3
Section 1060 of the Lanham Act provides:
• A trademark could only be transferred "in
connection with the assignment of the particular
business in which it has been used, with its good
will, and for continued use upon the same articles
or class of articles.
o There is no property in a trade-mark except as a
right appurtenant to an established business or
trade, when it becomes an element of good will.
o The necessity to assign more than the naked
mark was premised upon the primary object of
the trademark "to indicate by its meaning or
association the origin of the article to which it is
affixed.
• "A trademark or tradename is not itself an independent
object of property, nor is the right to use such mark or
name. The designation is only a means of identifying
particular goods, services, or a business associated with a
particular commercial source, whether known or
anonymous. * * * Goodwill is property, and since it is
transferable the symbol of the property is transferable
along with it."
o Strict application of the rule undoubtedly fails to
recognize the function of the trademark as
representing as well (1) a guaranty of the
product and (2) the inherent advertising value of
the mark itself.
Same Class
• Grapette urges that it intends to use the trademark
"Peppy" on a product of the same general "classification"
as Fox, its assignor.
• "Class" of product may mean one thing for
registration purposes, have a completely different
connotation in trademark infringement cases, and
yet have a distinctive meaning when considering
use upon assignments.
o The meaning of "class" in infringement cases
tends to be more inclusive. There "class" may be
broadly defined as: "`[T]he word class * * *
means broadly a genus including as species
any goods upon which the use of the same
mark, when the goods are exposed side by
side, would tend to mislead the purchasing
public.'"
o For assignment and transfers, the two products
must have the same descriptive qualities.
• Where a transferred trademark is to be used on a new
and different product, any goodwill which the mark itself
might represent cannot legally be assigned. "The
"A registered mark or a mark for which application to register has
been filed shall be assignable with the goodwill of the business in
which the mark is used, or with that part of the goodwill of the
business connected with the use of and symbolized by the mark,
and in any such assignment it shall not be necessary to include the
goodwill of the business connected with the use of and symbolized
by any other mark used in the business or by the name or style under
which the business is conducted.
(See Section 149 of the IP Code wherein a mark may be transferred
with or without the goodwill of the business provided that it is not
likely to mislead the public and Section 159.1 of the IP Code [rule
on prior user in good faith] wherein the right to the mark may only
be transferred or assigned together with the enterprise or business or
with that part of the enterprise or business in which the mark is used).
ADL
trademark owner does not have the right to a particular
word but to the use of the word as the symbol of
particular goods."
• When one considers that Grapette did not acquire any of
the assets of Fox, did not acquire any formula or process
by which the Fox syrup was made, and then changed
the type of beverage altogether, the assignment on
its face must be considered void.
B.4. YOCUM V. COVINGTON, 216 U.S.P.Q. 210 (1982)
Clark Yocum is a musician and part of the vocal group called
“PIED PIPERS”. As the sole survivor of the group, he acquired
100% title to the tradename as per agreement. As Yocum
became physically incapable of performing, he still retained
ownership over the tradename and received royalties from
previous recordings as to which he was a performer. PIED
PIPERS continued to exist (members were replaced from time
to time) with Yocum as owner-manager or licensor. Covington,
after working with the PIED PIPERS group, organized his own
PIED PIPERS to enhance his own orchestra. After adopting the
“PIED PIPERS” name in 1973, Covington retained legal
assistance and applied for registration of the service mark
“PIED PIPERS”. Yocum nows files a petition to cancel his
registration claiming ownership over the mark. Covington
claims abandonment.
Held:
• Plaintiff abandoned the mark because of unsupervised
“licensing in gross,” ”, i.e., agreements to allow use of
the name without adequate supervision and quality
control, and which led to an interruption of the continuous
use that petitioner must show to establish priority over
registrant.
• Abandonment because of uncontrolled licensing is
purely an INVOLUNTARY FORFEITURE of
trademark rights, for the mark owner probably has no
subjective intent to abandon the mark. Uncontrolled
licensing causes a symbol to lose its meaning as a
trademark.
• LACK OF INTENT NOT A DEFENSE IN
UNCONTROLLED LICENSING/INVOLUNTARY
FORFEITURE: While lack of intent to abandon would be
relevant to voluntary relinquishment of the mark, it is not
a sufficient defense against applicant's naked licensing
activity.
ITC:
• Two incidents exemplifying unsupervised licensing:
1. Intrusion into recording session of the ad hoc Pied
Pipers group and making no inquiry as to what was
being recorded, what arrangements were used, and
no request was made to monitor the sessions.
2. Agreement with one of the former members of Pied
Pipers where petitioner allowed the latter to record its
songs under the Pied Pipers name without
supervision, quality control or performance standards.
Class notes:
Naked licensing - like assignment in gross
Rationale: If a trademark owner allows licensees to depart
from his quality standards, the public will be misled and the
trademark will cease to have utility as an informational device.
Page 43
Laches
A. Claimant unreasonably delayed
B. As a result of the delay, defendant suffered prejudice
B.5. PAGASA V. COURT OF APPEALS, G.R. NO. L-54158,
AUGUST 31, 1984 AND NOVEMBER 19, 1982
Pagasa Industrial Corp. and private respondent Yoshida Kogyo
Kabushiki Kaisha had conflicting claims for the trademark YKK
for zippers. Yoshida was first to register in 1950, but due to
the fact that the examiner “miserably overlooked” the prior
registration of Yoshida, Pagasa was granted its application for
the YKK trademark. Yoshida sought for this to be cancelled
seven years after the registration was granted to Pag-asa. Pag-
asa claims that Yoshida’s claim is barred by laches and that
Yoshida never acquired ownership of the trademark
considering that the latter had no proof of actual commercial
use of the trademark in the Philippines.
1982 Case
Non-use
• The Trademark Law is very clear. It requires actual
commercial use of the mark prior to its registration. There
is no dispute that respondent corporation was the first
registrant, yet it failed to fully substantiate its claim that it
used in trade or business in the Philippines the subject
mark; it did not present proof to invest it with
exclusive, continuous adoption of the trademark
which should consist among others, of considerable
sales since its first use.
• The invoices submitted by respondent which were dated
way back in 1957 show that the zippers sent to the
Philippines were to be used as “samples” and “of no
commercial value.” “Samples” are not for sale and
therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent
to the “use” contemplated by the law. Respondent
did not expect income from such samples.
• There were no receipts to establish sale, and no proof
were presented to show that they were subsequently sold
in the Philippines.
• The evidence of respondent showing that it had advertised
in magazines such as Life and Time, cannot be considered
as compliance with the law, for it is of general knowledge
that said magazines are not published in the Philippines,
nor was there any showing that the product so advertised
was ever sold here.
Laches
• Further, it was only after more than seven years when
respondent sought the cancellation of the trademark.
• There is a presumption of neglect already
amounting to “abandonment” of a right after a party
had remained silent for quite a long time during which
petitioner had been openly using the trademark in
question. Such inaction on the part of respondent
entitles petitioner to the equitable principle of
laches.
1984 (Second MR)
• The Director of Patents sensibly and correctly cancelled
the registration in favor of Pagasa which has not shown
any semblance of justification for usurping the trademark
YKK. The registration in favor of Pagasa was admitted by
the Director to be a mistake.
• Pagasa cannot rely on equity because he who comes into
equity must come with clean hands. Equity refuses to lend
its aid in any manner to one seeking its active
interposition who has been guilty of unlawful or
inequitable conduct in the matter with relation to which he
seeks relief
• "Registration is sufficient prim a-facie proof that all
acts necessary to entitle the mark to registration
were duly performed." Obviously, Yoshida's prior
registration is superior and must prevail.
B.6. SEHWANI, INC. V. IN-N-OUT BURGER, INC., G.R.
NO. 171053, OCTOBER 15, 2007
(laches)
Held:
• Section 151(b) of R.A. No. 8293 specifically provides that
a petition to cancel the registration of a mark
which is registered contrary to the provisions
thereof, or which is used to misrepresent the source
of the goods or services, MAY BE FILED AT ANY
TIME.
• Moreover, laches may not prevail against a specific
provision of law, since equity, which has been defined
as ‘justice outside legality’ is applied in the absence
of and not against statutory law or rules of
procedure.
• Aside from the specific provisions of R.A. No. 8293, the
Paris Convention and the WIPO Joint Recommendation
have the force and effect of law (Section 2, Article II of
the Constitution).
B.7. BIRKENSTOCK, V. PHILIPPINE SHOE EXPO
MARKETING CORPORATION, G.R. NO. 194307,
NOVEMBER 20, 2013.
Held:
• Failure to file the DAU within the requisite period results in
the automatic cancellation of registration of a
trademark. In turn, such failure is tantamount to the
abandonment or withdrawal of any RIGHT OR
INTEREST the registrant has over his trademark.
Class notes:
• Failure to file DAU results in cancellation.
• ALSO registrant is considered to have abandoned his right
or interest over the mark
o How does one acquire trademark ownership?
Through actual use
o Registration confers only prima facie evidence of
validity
o Ownership is not acquired through registration
o But birkentock holds that if you fail to file
the DAU you not only lose registration but
also your OWNERSHIP over the mark -
contrary to its previous rulings that
registration is not a mode of acquiring
ownership but merely serves as prima facie
evidence of ownership
Sir: you only lose your registration but not your
ownership, you only lose ownership through non-use
VII. JURISDICTION, INFRINGEMENT AND
REMEDIES
SECTIONS 10, 151.2, 155, 156, 157, 158, 160, 170,
161, 163 AND 165.2, IP CODE

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, 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 further, That
availment of the provisional remedies may be granted in
accordance with the Rules of Court. The Director of Legal
Affairs shall have the power to hold and punish for contempt
all those who disregard orders or writs issued in the course of
the proceedings. (n)
(b) After formal investigation, the Director for Legal Affairs
may impose one (1) or more of the following administrative
penalties:
(i) The issuance of a cease and desist order which
shall specify the acts that the respondent shall cease
and desist from and shall require him to submit a
compliance report within a reasonable time which
shall be fixed in the order;
(ii) The acceptance of a voluntary assurance of
compliance or discontinuance as may be imposed.
Such voluntary assurance may include one or more of
the following:
(1) An assurance to comply with the
provisions of the intellectual property law
violated;
(2) An assurance to refrain from engaging in
unlawful and unfair acts and practices
subject of the formal investigation;
(3) An assurance to recall, replace, repair, or
refund the money value of defective goods
distributed in commerce; and
(4) An assurance to reimburse the
complainant the expenses and costs incurred
in prosecuting the case in the Bureau of
Legal Affairs.
The Director of Legal Affairs may also
require the respondent to submit periodic
compliance reports and file a bond to
guarantee compliance of his undertaking;
(iii) The condemnation or seizure of products which
are subject of the offense. The goods seized
hereunder shall be disposed of in such manner as
may be deemed appropriate by the Director of Legal
Affairs, such as by sale, donation to distressed local
governments or to charitable or relief institutions,
exportation, recycling into other goods, or any
combination thereof, under such guidelines as he may
provide;
(iv) The forfeiture of paraphernalia and all real and
ADL
personal properties which have been used in the
commission of the offense;
(v) The imposition of administrative fines in such
amount as deemed reasonable by the Director of
Legal Affairs, which shall in no case be less than Five
thousand pesos (P5,000) nor more than One hundred
fifty thousand pesos (P150,000). In addition, an
additional fine of not more than One thousand pesos
(P1,000) shall be imposed for each day of continuing
violation;
(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;
(vii) The withholding of any permit, license, authority,
or registration which is being secured by the
respondent from the Office;
(viii) The assessment of damages;
(ix) Censure; and
(x) Other analogous penalties or sanctions. (Secs. 6,
7, 8, and 9, Executive Order No. 913 [1983]a)
10.3. The Director General may by Regulations establish the
procedure to govern the implementation of this Section. (n)
Section 151. Cancellation.
151.2. Notwithstanding the foregoing provisions, the court or
the administrative agency vested with jurisdiction to hear
and adjudicate any ACTION TO ENFORCE THE RIGHTS TO
A REGISTERED MARK shall likewise exercise jurisdiction to
determine whether the registration of said mark may
be cancelled in accordance with this Act.
• The filing of a suit to enforce the registered mark
with the proper court or agency shall EXCLUDE any
other court or agency from assuming jurisdiction
over a subsequently filed petition to cancel the
same mark.
• On the other hand, the earlier filing of petition to
cancel the mark with the Bureau of Legal Affairs shall
not constitute a prejudicial question that must
be resolved before an action to enforce the rights to
same registered mark may be decided. (Sec. 17, R.A.
No. 166a)
Section 155. Remedies; Infringement. - Any person who
shall, without the consent of the owner of the registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy,
or colorable imitation of a registered mark or the same
container or a dominant feature thereof in connection with the
sale, offering for sale, distribution, advertising of any goods or
services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with
which such use is likely to cause confusion, or to cause
mistake, or to deceive; or
Page 45
155.2. Reproduce, counterfeit, copy or colorably imitate a
registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or
advertising of goods or services on or in connection with which
such use is likely to cause confusion, or to cause mistake, or to
deceive, shall be liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth: Provided,
That the infringement takes place at the moment any of the
acts stated in Subsection 155.1 or this subsection are
committed regardless of whether there is actual sale of goods
or services using the infringing material. (Sec. 22, R.A. No
166a)
Section 156. Actions, and Damages and Injunction for
Infringement. - 156.1. The owner of a registered mark may
recover damages from any person who infringes his rights, and
the measure of the damages suffered shall be either the
reasonable profit which the complaining party would have
made, had the defendant not infringed his rights, or the profit
which the defendant actually made out of the infringement, or
in the event such measure of damages cannot be readily
ascertained with reasonable certainty, then the court may
award as damages a reasonable percentage based upon the
amount of gross sales of the defendant or the value of the
services in connection with which the mark or trade name was
used in the infringement of the rights of the complaining party.
(Sec. 23, first par., R.A. No. 166a)
156.2. On application of the complainant, the court may
impound during the pendency of the action, sales invoices and
other documents evidencing sales. (n)
156.3. In cases where actual intent to mislead the public or to
defraud the complainant is shown, in the discretion of the
court, the damages may be doubled. (Sec. 23, first par., R.A.
No. 166)
156.4. The complainant, upon proper showing, may also be
granted injunction. (Sec. 23, second par., R.A. No. 166a)
Section 157. Power of Court to Order Infringing Material
Destroyed. - 157.1 In any action arising under this Act, in
which a violation of any right of the owner of the registered
mark is established, the court may order that goods found to
be infringing be, without compensation of any sort, disposed of
outside the channels of commerce in such a manner as to
avoid any harm caused to the right holder, or destroyed; and
all labels, signs, prints, packages, wrappers, receptacles and
advertisements in the possession of the defendant, bearing the
registered mark or trade name or any reproduction,
counterfeit, copy or colorable imitation thereof, all plates,
molds, matrices and other means of making the same, shall be
delivered up and destroyed.
157.2. In regard to counterfeit goods, the simple removal of
the trademark affixed shall not be sufficient other than in
exceptional cases which shall be determined by the
Regulations, to permit the release of the goods into the
channels of commerce. (Sec. 24, R.A. No. 166a)
Section 158. Damages; Requirement of Notice. - In any suit
for infringement, the owner of the registered mark shall not be
entitled to recover profits or damages unless the acts have
been committed with knowledge that such imitation is likely to
cause confusion, or to cause mistake, or to deceive. Such
knowledge is presumed if the registrant gives notice that his
mark is registered by displaying with the mark the words
'"Registered Mark" or the letter R within a circle or if the
defendant had otherwise actual notice of the registration. (Sec.
21, R.A. No. 166a)
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, Section 168 and Subsection 169.1.
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.
(Sec. 21-A, R.A. No. 166a)
Section 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 a
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. Judgment 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.
Section 163. Jurisdiction of Court. - All actions under Sections
150, 155, 164, and 166 to 169 shall be brought before the
proper courts with appropriate jurisdiction under existing laws.
Section 165. Trade Names or Business Names.
165.2.(a) Notwithstanding any laws or regulations providing
for any obligation to register trade names, such names shall be
protected, even prior to or without registration, against any
unlawful act committed by third parties.
(b) In particular, any subsequent use of the trade name by a
third party, whether as a trade name or a mark or collective
mark, or any such use of a similar trade name or mark, likely
to mislead the public, shall be deemed unlawful.
A.M. NO. 03-03-03-SC 2003-06-17
3. Upon the effectivity of this Resolution, all IP cases shall be
transferred to the designated Special Commercial Courts
except those which have undergone the pretrial stage in civil
cases or those where any of the accused has been arraigned in
criminal cases which shall be retained by the court previously
assigned to try them;
A.M. NO. 10-3-10-SC RULE 1 AND 2
SEC. 4. Executory nature of orders. — Any order issued by the
court under these Rules is immediately executory unless
restrained by a superior court.

SEC. 5. Verification and supporting documents. — Any

pleading, motion, opposition, defense or claim filed by any
interested party shall be supported by verified statements that
the affiant has read the same and that the factual allegations
therein are true and correct of his personal knowledge or
based on authentic records, and shall contain as annexes such
documents as may be deemed by the party submitting the
same as supportive of the allegations in the affidavits.

SEC. 6. Duty of the clerk of court. — It shall be the duty of the

branch clerk of court to notify in writing the Director-General
of the intellectual Property Office (IPO) of any action, suit or
proceeding involving a copyright, trademark, service mark,
patent, industrial design, utility model, undisclosed information
and technology transfer agreement. Such notice shall set forth:
the names and addresses of the litigants and the copyright, JURISDICTION
trademark, service mark, patent or design registrations • Registration
involved and, where applicable, the numbers of their o bureau of trademarks (Section 9)
certificates of registration. The notice shall be submitted within • Opposition
one (1) month after the filing thereof. o bureau of legal affairs (Section 10.1)
• Cancellation and infringement
RULE 2: NATURE OF PROCEEDINGS o bureau of legal affairs (Section 10.1)
SEC. 2. Special Commercial Courts in the National Capital o regular courts (Sections 151.2 and 161)
Judicial Region with authority to issue writs of search and
seizure enforceable nationwide. — Special Commercial BUREAU OF LEGAL SPECIAL
Courts in Quezon City, Manila, Makati, and Pasig shall AFFAIRS (IPO) COMMERCIAL
have authority to act on applications for the issuance COURTS
of writs of search and seizure in civil actions for Section 10: Section 155
violations of the Intellectual Property Code, which • hear and decide Civil action for
writs shall be enforceable nationwide. The issuance of opposition to infringement
these writs shall be governed by the rules prescribed in Re: applications a. use in
Proposed Rule on Search and Seizure in Civil Actions for • cancellation of TMs commerce of
Infringement of Intellectual Property Rights (A.M. No. 02-1-06- RCCC
SC, which took effect on February 15, 2002). Within their b. RCCC
respective territorial jurisdictions, the Special Commercial Section 10: Section 156:
Courts in the judicial regions where the violation of intellectual • original jurisdiction • damages
property rights occurred shall have concurrent jurisdiction to in administrative • impound sales
issue writs of search and seizure. complaints for invoices and other
violations of laws documents
involving IP rights evidencing sales
Class notes: where the total • injunction
Right of foreign corp to sue damages claimed are
Allege: not less than 200k
1. Foreign corp Section 10: Section 157:
2. Has standing to sue • impose • order infringing
administrative material to be
Registration of trademark: penalties: destroyed without
1. Application 1. cease and desist compensation
2. Examination order
- looks for 2 things: 2. voluntary
a. Inherent registrability of the mark assurance of
b. Look for confusingly similar marks compliance or
- rejection – file opinion and/or amendment – discontinuance
if rejection reversed, allowance for 3. condemnation
publication ulit, allowance for publication or seizure of
products subject
3. Allowance for publication of the offense
4. approved - issuance of certificate 4. forfeiture
- Minsan hindi issuance agad - minsan may 5. administrative
opposition so magkakaroon ng opposition fines (5k to 15k
proceedings - most of the time based on and 1k per day
confusing similarity of continuing

ADL Page 47
 violation) cigarettes, but are not manufactured or used in the Philippines.
6. cancellation of Respondent Fortune meanwhile manufactures and sells
permit, license, cigarettes “MARK” whose registration is pending but was
authority or allowed by the BIR to use the name in the meantime. Thus,
registration or petitioners instituted a case and likewise applied for a
suspension of preliminary injunction.
validity
7. withholding of Held:
permit or license • It is not sufficient for a foreign corporation suing under
8. assessment of Section 21A to simply allege its alien origin. Rather, it
damages must additionally allege its personality to sue.
9. censure Relative to this condition precedent, it may be observed
10. analogous that petitioners were not remiss in averring their
penalties or personality to lodge a complaint for infringement
sanctions especially so when they asserted that the main action
Section 151: Section 151.2: for infringement is anchored on an isolated
Cancellation Cancellation – in any transaction.
action to enforce the • Foreign corporations not engaged in business in
rights to a registered the Philippines may maintain a cause of action for
mark infringement primarily because of Section 21A of the
Section 161: Trademark Law when the legal standing to sue is
• determine right to alleged, which petitioners have done in the case at hand.
registration
• order cancellation of On requirement of use in the Philippines (old law requires 2
registration months of prior use before registration)
• rectify register • Following universal acquiescence and comity, our
with respect to the municipal law on trademarks regarding the requirement of
registration of ANY actual use in the Philippines must subordinate an
PARTY international agreement inasmuch as the apparent clash is
Section 163 being decided by a municipal tribunal (2 month prior use
(Jurisdiction) requirement under the old law applied).
• 150 – license • Petitioners may have the capacity to sue for
contracts infringement irrespective of lack of business
• 155 - infringement activity in the Philippines on account of Section 21-
• 164 - A of the Trademark Law but the question of whether
• 166 – imported they have an exclusive right over their symbol as to
goods bearing justify issuance of the controversial writ will depend
infringing marks on actual use of their trademarks in the Philippines in
• 167 – collective line with Sections 2 and 2A of the same law.
marks • Such a foreign corporation may have the
• 168 – unfair personality to file a suit for infringement but it may
competition not necessarily be entitled to protection due to
• 169 – false absence of actual use of the emblem in the local
designations of market.
origin; false • NOTE: ALLEGE SECTIONS 160 AND SECTION 3 OF
description or THE IP CODE AS BASIS FOR CAPACITY TO SUE
representation
Injunction
• To be entitled to an injunctive writ, petitioner must
INFRINGEMENT (can be administrative, civil, or show that there exists a right to be protected and
criminal) that the facts against which injunction is directed are
• Infringement filed first with court (civil or criminal case) or violative of said right.
BLA (administrative case) • Not doing business in the Philippines is inconsistent
- Excludes others with any pretense of a right which can be breached.
- brought not by the registrant • In view of the explicit representation of petitioners in
• Cancellation filed first with BLA the complaint that they are not engaged in business
- Does not exclude the filing of infringement in in the Philippines, it inevitably follows that no
court and will not be considered a prejudicial conceivable damage can be suffered by them not to
question mention the foremost consideration heretofore
- when there is a registered mark already discussed on the absence of their “right” to be
protected.
1. PHILIP MORRIS, INC., VS. COURT OF APPEALS, G.R.
NO. 91332, JULY 16, 1993 2. TAN V. BAUSCH & LOMB, G.R. NO. 148420,
Petitioners, foreign corporations, are registered owners in the DECEMBER 15, 2005
Philippines of “MARK VII” “MARK TEN” and “LARK” which are A criminal case was filed against petitioners in the RTC of Cebu
for allegedly selling counterfeit Ray Ban sunglasses. The
petitioners filed a motion to quash the information on the
ground that the RTC had no jurisdiction over the defense, as
the penalty provided by the RPC for the crime was within the
jurisdiction of the MTCC. The lower court ruled that the
Administrative Orders issued by the Supreme Court
transferring the jurisdiction of IP cases to RTCs cannot prevail
over BP 129.
Held:
• Section 5 (5) of the 1987 Constitution empowers the
Supreme Court to promulgate rules concerning pleading,
practice and procedure in all courts. The limitations to this
rulemaking power are the following: the rules must (a)
provide a simplified and inexpensive procedure for the
speedy disposition of cases; (b) be uniform for all courts
of the same grade and (c) not diminish, increase or
modify substantive rights.
o As long as these limits are met, the argument
used by petitioners that the Supreme Court,
through A.O. Nos. 11395 and 10496,
transgressed on Congress’ sole power to
legislate, cannot be sustained.
• A.O. No. 11395 designated special intellectual
property courts to promote the efficient administration
of justice and to ensure the speedy disposition of
intellectual property cases.
• A.O. No. 10496, on the other hand, was issued pursuant
to Section 23 of BP 12925 which transferred the
jurisdiction over such crimes from the MTC and
MTCC to the RTC and which furthermore gave the
Supreme Court the authority to designate certain
branches of the RTC to exclusively handle special
cases in the interest of the speedy and efficient
administration of justice.
• Accordingly, the RTC was vested with the exclusive
and original jurisdiction to try and decide
intellectual property cases. The transfer of jurisdiction
from the MTC and MTCC to the RTC did not in any way
affect the substantive rights of petitioners.
• UPDATE: AM 03-03-03-SC consolidated the IP court
and the SEC courts in one RTC branch. The RTC
branch so designated will try and decide cases
involving violations of IP rights. These courts are
designated as special commercial courts.
3. LEVI STRAUSS, V. VOGUE TRADERS, G.R. NO.
132993, JUNE 29, 2005
• Levi’s filed two cases before the BPTT for cancellation of
respondent’s TM registrations.
• Levi’s then filed an application for issuance of a search
w arrant with the RTC of Manila. RTC issued the search
warrants pursuant to a violation of Article 189 of the RPC.
• Criminal case against respondent was dismissed.
• Respondent filed a com plaint for dam ages in the RTC
of Manila against Levi’s.
o Levi’s filed a counterclaim, seeking the
cancellation of respondent’s marks and an
injunction.
o In the damages case, the RTC ruled in favor of
Levi’s and issued an injunction.
Held:
On whether the doctrine of primary jurisdiction operates to
suspend proceedings in the civil case, particularly the ability of
ADL
the RTC to issue a preliminary injunction.
• Section 27 of the IP Code provides that the proper RTC
shall have jurisdiction over damage suits.
• While an administrative cancellation of a registered
trademark, on any of the grounds under Section 17 of
R.A. No. 166, is within the ambit of the BPTTT, an action
for infringement or any other incidental remedy
(unfair competition, injunction, damages) sought is
within the jurisdiction of the ordinary courts.
• The passage of Republic Act No. 8293, otherwise known
as the “Intellectual Property Code of the Philippines,”
expanded the rights accorded to an owner of a registered
trademark (See Sections 151(2), 156, and 161).
• Sections 155 (2), 156, and 163 of the said law further
provide for the remedy of an owner of a registered mark
to institute an action for infringement or damages against
• An action for infringement or unfair competition,
including the available remedies of injunction and
damages, in the regular courts can proceed
independently or simultaneously with an action for
the administrative cancellation of a registered
trademark in the BPTTT.
ITC:
As applied to the present case, petitioner’s prior filing of two
inter partes cases against the respondent before the BPTTT for
the cancellation of the latter’s trademark registrations, namely,
“LIVE’S” and “LIVE’S Label Mark,” does not preclude
petitioner’s right (as a defendant) to include in its answer
counterclaim for infringement with a prayer for the issuance of
a writ of preliminary injunction.
4. COFFEE PARTNERS, INC. V. SAN FRANCISCO
COFFEE, G.R. NO. 169504, MARCH 3, 2010
HELD:
• What constitutes infringement of trade name:
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
infri
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
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.
• A trade name need not be registered with the IPO
before an infringement suit may be filed by its
owner against the owner of an infringing
trademark. All that is required is that the trade
name is previously used in trade or commerce in
the Philippines.
Page 49
 registered if it:
VIII. CONFUSION
(d) Is identical with a registered mark belonging to a
different proprietor or a mark with an earlier filing or priority
A. TYPES AND TESTS OF CONFUSION
date, in respect of:
(i) The same goods or services, or
Class notes:
(ii) Closely related goods or services, or
Likelihood of confusion
(iii) If it nearly resembles such a mark as to be
- More than just the possibility of confusion; probability
likely to deceive or cause confusion;
- Can be as to product or as to source
- Case to case basis
(e) Is identical with, or confusingly similar to, or constitutes a
- Same as confusingly similar
translation of a mark which is considered by the competent
- Basis for opposition or cancellation, infringement and/or
authority of the Philippines to be well-known internationally
unfair competition (Sections 123, 147 and 155)
and in the Philippines, whether or not it is registered here, as
being already the mark of a person other than the applicant for
Colorable Imitation
registration, and used for identical or similar goods or services:
“Colorable imitation” denotes such a “close or ingenious
Provided, That in determining whether a mark is well-known,
imitation as to be calculated to deceive ordinary persons,
account shall be taken of the knowledge of the relevant sector
or such a resemblance to the original as to deceive an
of the public, rather than of the public at large, including
ordinary purchaser, giving such attention as a purchaser
knowledge in the Philippines which has been obtained as a
usually gives, and to cause him to purchase the one supposing
result of the promotion of the mark;
it to be the other.
(f) Is identical with, or confusingly similar to, or constitutes a
Examination on 3 levels:
translation of a mark considered well-known in accordance
1. Visual similarity
with the preceding paragraph, which is registered in the
2. Phonetic similarity
Philippines with respect to goods or services which are not
3. Conceptual similarity - meaning
similar to those with respect to which registration is applied
for: Provided, That use of the mark in relation to those goods
STEPS IN DETERMINING LIKELIHOOD OF CONFUSION:
or services would indicate a connection between those goods
1. Determine which test to apply - holistic or dominancy
or services, and the owner of the registered mark: Provided
test
further, That the interests of the owner of the registered mark
2. APPLY TRILOGY TEST - visual, phonetic, conceptual
are likely to be damaged by such use;
3. Consider class of goods and buyers
Section 147. Rights Conferred. - 147.1. The owner of a
DOMINANCY – focuses on similarity of the prevalent
registered mark shall have the exclusive right:
features of the competing marks
• to prevent all third parties
• When a person sees an object, a central or dominant
• not having the owner's consent
idea or picture thereof is formed in his mind. This
• from using in the course of trade
dominant picture or idea is retained in the mind, and the
• identical or similar signs or containers
decorations or details are forgotten.
• for goods or services which are identical or
• He may notice some variations, but he will ignore
similar to those in respect of which the
these, believing that they are variations of the same
trademark is registered
trademark to distinguish one kind or quality of goods from
• where such use would result in a likelihood of
another.
confusion.
• Duplication or imitation is not necessary; nor is it
In case of the use of an identical sign for identical goods
necessary that the infringing label should suggest an
or services, a likelihood of confusion shall be presumed.
effort to imitate.
• One feature of the mark may be more significant, which
147.2. The exclusive right of the owner of a well-known mark
buyer would be more likely to remember
defined in Subsection 123.1(e) which is registered in the
Philippines, shall extend to goods and services which are not
similar to those in respect of which the mark is registered:
Provided, That use of that mark in relation to those goods or
services would indicate a connection between those goods or
• If you’re handling a case, apply both tests then prove your
services and the owner of the registered mark: Provided
case using both tests
further, That the interests of the owner of the registered mark
• Consumers normally do not encounter marks side by side.
are likely to be damaged by such use. (n)
So wag mag-side by side test
A.1. ETHEPA V. DIRECTOR OF PATENTS, G.R. NO. L-
20635, MARCH 31, 1966
HOLISTIC – entirety of the marks in question must be
considered as they appear in their respective labels or
Holistic Test applied
hang tags
Phonetic Sim ilarity
Westmont sought registration of trademark “Atussin” to which
SECTIONS 123(D)(E)(F), 147, 155, IP CODE
Etepha objected claiming that it is confusingly similar with its
product “Pertussin.”
Section 123. Registrability . - 123.1. A mark cannot be
Held:
• The phrase "colorable imitation" denotes such a "close or
ingenious imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to
deceive an ordinary purchaser, giving such attention as a
purchaser usually gives, and to cause him to purchase the
one supposing it to be the other."
o it is "the common practice in the drug and
pharmaceutical industries to 'fabricate' marks by
using syllables or words suggestive of the
ailments for which they are intended and adding
thereto distinctive prefixes or suffixes"
o tussin" (in Pertussin and Atussin) was derived
from the Latin root-word "tussis" meaning cough.
Tussin is merely descriptive; it is generic.
o While "tussin" by itself cannot thus be used
exclusively to identify one's goods, it may
properly become the subject of a
trademark "by combination with another
word or phrase".
Similarity or Dissimilarity
• A practical approach to the problem of similarity or
dissimilarity is to go into the whole of the two trademarks
pictured in their manner of display.
• Inspection should be undertaken from the viewpoint of a
prospective buyer.
• The trademark complained of should be compared and
contrasted with the purchaser's memory (not in
juxtaposition) of the trademark said to be infringed.
• Some such factors as "sound; appearance; form, style,
shape, size or format; color; ideas connoted by marks; the
meaning, spelling, and pronunciation, of words used; and
the setting in which the words appear" may be
considered. For, indeed, trademark infringement is a form
of unfair competition.
ITC: no confusing similarity
• Labels, packaging, font are dissimilar
• No phonetic similarity – in a word combination, the
part that comes first is the most pronounced (per v.
A)
• Not an article of everyday use and only dispensed upon
medical presciption
A.2. CO TIONG SA VS. DIRECTOR OF PATENTS, G.R. NO.
L-5378, MAY 24, 1954
Dom inancy Test applied
Conceptual Sim ilarity
Involved in this case are the trademarks Freedom (petitioner)
and Freeman (oppositor). The issue was whether the marks
are confusingly similar.
Held:
• There is no question that if the details of the two
trademarks are to be considered, many differences would
be noted that would enable a careful and scrutinizing eye
to distinguish one trademark from the other.
• But differences of variations in the details of one
trademark and of another are not the legally
accepted tests of similarity in trademarks.
• It has been consistently held that the question of
infringement of a trademark is to be determined by
ADL
the test of dominancy. Similarity in size, form, and
color, while relevant, is not conclusive.
• In order to constitute infringement, it is not necessary that
the trademark be literally copied. Neither is it necessary
that every word be appropriated. There may be
infringement where the substantial and distinctive
part of the trademark is copied or imitated.
ITC: There was confusing similarity – CONCEPTUAL
SIMILARITY
• Dominant feature is the word FREEMAN written in a
peculiar print, slightly slanting to the right. These
dominant features are imitated in applicant’s trademark.
• The word FREEDOM conveys a similar idea as the word
FREEMAN
• The styles are similar
• Print and slant of letters similar
• An ordinary purchaser or an unsuspecting customer who
has seen the oppositor's label sometime before will not
recognize the difference between that label and
applicant's label. He may notice some variations, but he
will ignore these, believing that they are variations of the
same trademark to distinguish one kind or quality of
goods from another.
A.3. EMERALD GARMENT MANUFACTURING V. COURT
OF APPEALS, G.R. NO. 100098, 29 DECEMBER 1995
Holistic Test
HD Lee, a foreign corp., sought to cancel the registration of
Emerald Garment’s, a domestic corp., registration of
“STYLISTIC MR. LEE” claiming that it was confusingly similar to
its (HD Lee) trademark, “LEE.”
Held:
• The essential element of infringement is colorable
imitation.
• This term has been defined as “such a close or ingenious
imitation as to be calculated to deceive ordinary
purchasers, or such resemblance of the infringing mark to
the original as to deceive an ordinary purchaser giving
such attention as a purchaser usually gives, and to cause
him to purchase the one supposing it to be the other.
TWO TESTS:
• Dominancy – similarity of prevalent features of the
competing trademarks which might cause confusion or
deception and thus constitute infringement;
o Duplication or imitation not necessary; nor is it
necessary that the infringing label should suggest an
effort to imitate
• Holistic test – entirety of the marks in question must be
considered in determining confusing similarity
o The trademarks in their entirety as they appear
in their respective labels or hang tags must also
be considered in relation to the goods to which
they are attached.
ITC: marks are not confusingly similar
• Product involved: 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.
Page 51
 o What essentially determines the
attitudes of the purchaser, specifically
his inclination to be cautious, is the
cost of the goods.
• Like beer, the average Filipino buys his jeans by
brand.
• Test of consumer deception: The ordinary
purchaser is not the “completely unwary
consumer” but is the “ordinarily intelligent
buyer” considering the type of product
involved; one accustomed to buy, and therefore
to some extent familiar with, the goods in
question.
A.4. SOCIETE DES PRODUITS NESTLE V. COURT OF
APPEALS, G.R. NO. 112012, APRIL 4, 2001
Dom inancy Test applied
CFC filed an application for the registration of the trademark
“FLAVOR MASTER” for its instant coffee to which Nestle
opposed. Nestle owns the marks MASTER ROAST AND
MASTER BLEND.
Held:
• The determination of whether two trademarks are indeed
confusingly similar must be taken from the viewpoint of
the ordinary purchasers who are, in general,
undiscerningly rash in buying the more common and less
expensive household products like coffee, and are
therefore less inclined to closely examine specific details of
similarities and dissimilarities between competing
products.
• 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.
Dominancy versus Holistic Test
• Totality or holistic test only relies on visual comparison
between two trademarks whereas the dominancy test
relies not only on the visual but also on the aural and
connotative comparisons and overall impressions
between the two trademarks
ITC:
• Master is the dominant feature in Nestle’s mark. It has
always been given emphasis in ads.
• Thus when one looks at the label bearing the trademark
FLAVOR MASTER, one’s attention is easily attracted to the
word MASTER, rather than to the dissimilarities that exist
A.5. SOCIETE DES PRODUITS NESTLE V. DY, JR., G.R.
NO. 172276, AUGUST 9, 2010
Dom inancy Test applied
Societe Des Produits Nestle, S.A. (Nestle) owns the registered
trademark “NAN” for its line of infant products. “NAN” is
classified under Class 6 – “diatetic preparations for infant
feeding.” Dy, Jr. owns 5M enterprises which imports Sunny
Boy powdered milk from Australia and he repacks it bearing
the name “NANNY” which is also classified under Class 6 – “full
cream milk for adults.”
Held:
Types of confusion
• The element of likelihood of confusion is the gravamen of
trademark infringement. There are two types of confusion
in trademark infringement: [1] confusion of goods and [2]
confusion of business
o Confusion of goods is “in which event the
ordinarily prudent purchaser would be induced to
purchase one product in the belief that he was
purchasing the other.”
o Confusion of business: “here though the
goods of the parties are different, the
defendant’s products 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."
Types of tests:
• Dominancy Test – focuses on the similarity of the main,
prevalent or essential features of the competing
trademarks that might cause confusion. The question is
whether the use of marks is likely to cause confusion or
deceive purchasers.
- Courts will consider more the aural and visual im pres
sions created by the marks in the public mind, giving little
weight to factors like prices, quality, sales outlets and
market segments (McDonald’s Corp v. L.C. Big Mak)
• Holistic Test – considers the entirety of the marks,
including labels and packaging in determining confusing
similarity. The focus in is not only on predominant words
but also on the other features appearing on the labels.
Aural effect
• In determining the issue of confusing similarity,
the Court takes into account the aural effect of the
letters contained in the marks
Scope of protection
• The scope of protection afforded to registered
trademark owners is not limited to protection from
infringers with identical goods. The scope of
protection extends to protection from infringers
with related goods, and to market areas that are
the normal expansion of business of the registered
trademark owners.
• In Mighty Corporation v. E. & J. Gallo Winery, the Court
held that, “Noncompeting goods may be those
which, though they are not in actual competition,
are so related to each other that it can reasonably be
assumed that they originate from one manufacturer, in
which case, confusion of business can arise out of the use
of similar marks.”
• In that case, the Court enumerated factors in determining
whether goods are related:
(1) classification of the goods;
(2) nature of the goods;
(3) descriptive properties, physical attributes or
essential characteristics of the goods, with
reference to their form, composition, texture or
quality; and
(4) style of distribution and marketing of the goods,
including how the goods are displayed and sold.
ITC:
• NAN is the dominant word.
• When NAN and NANNY is pronounced, the aural effect is
similar.
• As the registered owner of the “NAN” mark, Nestle should
be free to use its mark on similar products, in different
segments of the market, and at different price levels.
A.6. SKECHERS, U.S.A. V. INTER PACIFIC INDUSTRIAL,
G.R. NO. 164321. MARCH 28, 2011
Dom inancy Test
Skechers filed a trademark infringement case against Inter
Pacific. The RTC issued search warrants, which resulted to the
raiding of 6,000 pairs of shoes. Later, the warrants were
ordered quashed by the RTC and the NBI was ordered to
return the seized shoes. CA affirmed the ruling. Skechers
appealed before the SC. Meanwhile, Tradeworks filed a
petition-for-intervention, arguing that it is the sole distributor
of Skechers in the Philippines. SC dimissed both petitions.
Skechers and Tradeworks both filed MR’s, which were granted
by the SC, effectively reversing its earlier decision. It now
considers Inter Pacific guilty of committing trademark
infringement.
Held:
Tests
• The essential element of infringement under R.A. No.
8293 is that the infringing mark is likely to cause
confusion.
• In determining similarity and likelihood of confusion,
jurisprudence has developed tests – the Dominancy Test
and the Holistic or Totality Test.
• The Dominancy Test focuses on the similarity of the
prevalent or dominant features of the competing
trademarks that might cause confusion, mistake, and
deception in the mind of the purchasing public.
o Duplication or imitation is not necessary; neither
is it required that the mark sought to be
registered suggests an effort to imitate.
o Given more consideration are the aural and
visual impressions created by the marks on
the buyers of goods, giving little weight to
factors like prices, quality, sales outlets,
and market segments
• Holistic or Totality Test necessitates a consideration of
the entirety of the marks as applied to the products,
including the labels and packaging, in determining
confusing similarity.
o The discerning eye of the observer must focus
not only on the predominant words, but also on
the other features appearing on both labels so
that the observer may draw conclusion on
whether one is confusingly similar to the other.
• Converse Rubber Corporation v. Jacinto Rubber & Plastic
Co., Inc. - a case for unfair competition, had opined that
even if not all the details are identical, as long as the
general appearance of the two products are such
that any ordinary purchaser would be deceived, the
imitator should be liable.
• McDonald’s Corporation v. L.C. Big Mak Burger. Inc -
Neither can the difference in price be a complete
defense in trademark infringement
• Indeed, the registered trademark owner may use
its mark on the same or similar products, in
different segments of the market, and at different
ADL
price levels depending on variations of the
products for specific segments of the market. The
purchasing public might be mistaken in thinking that
petitioner had ventured into a lower market segment such
that it is not inconceivable for the public to think that
Strong or Strong Sport Trail might be associated or
connected with petitioner’s brand, which scenario is
plausible especially since both petitioner and respondent
manufacture rubber shoes.
• The most successful form of copying is to employ
enough points of similarity to confuse the public,
with enough points of difference to confuse the
courts.
ITC:
• Use of stylized “S” – the dominant feature – infringes
petitioner’s mark.
• While there may be dissimilarities between the
appearances of the shoes, to this Court’s mind such
dissimilarities do not outweigh the stark and blatant
similarities in their general features.
A.7. GREAT WHITE SHARK, INC, V. CARALDE, JR., G.R.
NO. 192294, NOVEMBER 21, 2012
Caralde filed before the IPO a trademark application to register
the mark “shark and logo”. Great White Shark opposed the
application due to the confusing similarity that it has with its
“greg norman logo," BLA director and IPO director general
rejected the application.
Held:
• Irrespective of both 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.
• There being no confusing similarity between the subject
marks, the matter of whether Great White Shark’s mark
has gained recognition and acquired becomes unnecessary
A.8. DERMALINE, INC. VS. MYRA PHARMACEUTICALS,
INC., G.R. NO. 190065, AUGUST 16, 2010
Dom inancy Test
In 2003 Dermaline, Inc. applied for the trademark
“DERMALINE” which was not granted for being confusingly
similar to “DERMALIN” of Myra. In 2006, “DERMALINE, INC.” is
now being sought for trademark registration by Dermaline.
Held:
• What is the dominant feature: While there are no set
rules that can be deduced as what constitutes a dominant
feature with respect to trademarks applied for
registration; usually, what are taken into account are
signs, color, design, peculiar shape or name, or
some special, easily remembered earmarks of the
brand that readily attracts and catches the attention
of the ordinary consumer.
Argument that the product belongs to a separate and different
classification from Myra’s products; SCOPE OF PROTECTION
• Both classifications pertain to skin treatments.
• The registered trademark owner may use its mark on the
same or similar products, in different segments of
the market, and at different price levels depending
Page 53
 on variations of the products for specific segments of the
market. The Court is cognizant that the registered
trademark owner enjoys protection in product and
market areas that are the NORMAL POTENTIAL
EXPANSION of his business.
• Modern law recognizes that the protection to which the
owner of a trademark is entitled is not limited to
guarding his goods or business from actual market
competition with identical or similar products of the
parties, but EXTENDS TO ALL CASES IN WHICH THE
USE BY A JUNIOR APPROPRIATOR OF A
TRADEMARK OR TRADENAME IS LIKELY TO LEAD
TO A CONFUSION OF SOURCE, as where prospective
purchasers would be misled into thinking that the
complaining party has extended his business into the field.
ITC:
• Two marks are presented differently but the likelihood of
confusion is still apparent.
• The marks are almost spelled in the same way and
are pronounced practically in the same manner in
three syllables, with the ending letter “E” in
Dermaline’s mark pronounced silently.
• the public may mistakenly think that Dermaline is
connected to or associated with Myra, such that,
considering the current proliferation of health and beauty
products in the market, the purchasers would likely be
misled that Myra has already expanded its business
through Dermaline from merely carrying pharmaceutical
topical applications for the skin to health and beauty
services.
A.9. DIAZ V. PEOPLE OF THE PHILIPPINES AND LEVI
STRAUSS, G.R. NO. 180677, FEBRUARY 18, 2013
Holistic Test
Diaz makes made-to-order jeans using the mark LS Jenas
Tailoring. Levi’s applied for a search warrant, alleging that Diaz
sells counterfeit Levi’s jeans.
Held:
• elements of TM infringement:
1. The trademark being infringed is registered in the
Intellectual Property Office;
2. The trademark is reproduced, counterfeited, copied, or
colorably imitated by the infringer;
3. The infringing mark is used in connection with the sale,
offering for sale, or advertising of any goods, business or
services; or the infringing mark 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 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. The use or application of the infringing mark is without
the consent of the trademark owner or the assignee
thereof.
• As can be seen, the likelihood of confusion is the
gravamen of the offense of trademark
infringement.
• Emerald Garment v. CA (Lee case): also involved jeans;
SC applied holistic test
o These are not your ordinary household
items like catsup, soy sauce 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.
o Del Monte Corporation v. CA: Among these,
what essentially determines the attitudes
of the purchaser, specifically his inclination
to be cautious, is the cost of the goods. To
be sure, a person who buys a box of candies will
not exercise as much care as one who buys an
expensive watch. As a general rule, an
ordinary buyer does not exercise as much
prudence in buying an article for which he
pays a few centavos as he does in
purchasing a more valuable thing.
Expensive and valuable items are normally
bought only after deliberate, comparative
and analytical investigation. But mass
products, low priced articles in wide use, and
matters of everyday purchase requiring frequent
replacement are bought by the casual consumer
without great care.
• The holistic test is applicable here considering that
the herein criminal cases also involved trademark
infringement in relation to jeans products.
Accordingly, the jeans trademarks of Levi’s Philippines and
Diaz must be considered as a whole in determining the
likelihood of confusion between them.
ITC:
• The maong pants or jeans made and sold by Levi’s
Philippines, which included LEVI’S 501, were very popular
in the Philippines.
• The consuming public knew that the original LEVI’S 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 Diaz’s as well as not acquired on a
“made-to-order” basis.
• Petitioner’s mark was visually and aurally different from
Levi’s (LS Jeans Tailoring v. Levi’s). Tailoring suggests that
the jeans were bought from a tailoring shop.
• Buffalo design v. horse design
B. FACTORS TO DETERMINE LIKELIHOOD OF
CONFUSION
A.M. NO. 10-3-10-SC RULE 18
RULE 18
EVIDENCE IN TRADEMARK INFRINGEMENT AND
UNFAIR COMPETITION CASES
SECTION 1. Certificate of registration. — A certificate of
registration of a mark shall be prima facie evidence of:
a. the validity of the registration;
b. the registrant's ownership of the mark; and
c. the registrant's exclusive right to use the same in
 connection with the goods or services and those
that are related thereto specified in the
certificate.
SEC. 2. Well-known mark. — In determining whether a mark is
well-known, account shall be taken of the knowledge of the
relevant sector of the public, rather than of the public at large,
including knowledge in the Philippines which has been
obtained as a result of the promotion of the mark. The
following criteria or any combination thereof may be taken into
account in determining whether a mark is well-known:
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
the 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 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 or 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. Provided, further,
that the mark is well-known both internationally
and in the Philippines.
SEC. 3. Presum ption of likelihood of confusion. —
Likelihood of confusion shall be presumed in case an
identical sign or mark is used for identical goods or
services.
SEC. 4. Likelihood of confusion in other cases. — In
determining whether one trademark is confusingly
similar to or is a colorable imitation of another, the court
must consider:
• the general impression of the ordinary purchaser,
• buying under the normally prevalent conditions in
trade
• and giving the attention such purchasers usually
give in buying that class of goods.
VISUAL, AURAL, CONNOTATIVE COMPARISONS AND
OVERALL IMPRESSIONS engendered by the marks in
controversy as they are encountered in the realities of
ADL
the marketplace must be taken into account. Where there
are both similarities and differences in the marks, these must
be weighed against one another to see which predominates.
In determining likelihood of confusion between marks
used on NON-IDENTICAL GOODS OR SERVICES, several
factors may be taken into account, such as, but not limited to:
i. the strength of plaintiff’s mark;
ii. the degree of similarity between the plaintiffs and
the defendant's marks;
iii. the proximity of the products or services;
iv. the likelihood that the plaintiff will bridge the
gap;
v. evidence of actual confusion;
vi. the defendant's good faith in adopting the mark;
vii. the quality of defendant's product or service;
and/or
viii. the sophistication of the buyers.
"Colorable imitation" denotes such a close or ingenious
imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to
deceive an ordinary purchaser giving such attention as
a purchaser usually gives, as to cause him to purchase
the one supposing it to be the other.
SEC. 5. Determination of similar and dissimilar goods or
services. — Goods or services may not be considered as
being similar or dissimilar to each other on the ground
that, in any registration or publication by the Office, they
appear in different classes of the Nice Classification.
SEC. 6. Intent to defraud or deceive. — In an action for unfair
competition, the intent to defraud or deceive the public shall
be presumed:
a. when the defendant passes off a product as
his by using imitative devices, signs or
marks on the general appearance of the goods,
which misleads prospective purchasers into
buying his merchandise under the impression
that they are buying that of his competitors;
b. when the defendant makes any false
statement in the course of trade to discredit the
goods and business of another; or
c. where the similarity in the appearance of
the goods as packed and offered for sale is
so striking.
SEC. 7. Generic marks. — A registered mark shall not be
deemed to be the generic name of goods or services solely
because such mark is also used as a name of or to
identify a unique product or service. THE TEST FOR
DETERMINING WHETHER THE MARK IS OR HAS
BECOME THE GENERIC NAME OF GOODS OR SERVICES
on or in connection with which it has been used shall be the
PRIMARY SIGNIFICANCE OF THE MARK TO THE
RELEVANT PUBLIC rather than purchaser motivation.
RULE 416, TRADEMARK REGULATIONS
(see NICE Classification)
Class notes:
Page 55
• likelihood of confusion presumed in case of identical sign
or mark used for identical goods or services - normally
inaapply sa counterfeit goods
• Kapag nonidentical marks/goods – Section 4
o Section 4 parang kinopya yung US antidissection
rule - look at marks in their entirety
o Section 4 provides a different test from
dominancy or holistic test
o Section 4 applies when there are same, similar or
closely related goods but the marks are not
identical. If the marks are identical, apply section
3.
SCOPE OF PROTECTION
• Non-competing goods may be those which, though
they are not in actual competition, are so related to
each other that it can reasonably be assumed that they
originate from the manufacturer, in which case, confusion
of business can arise out of the use of similar marks.
B.1. POLAROID CORP. V. POLARAD ELECTRONICS
CORP., 287 F. 2D 492 (1961)
Plaintiff Polaroid Corporation is the owner of the trademark
Polaroid and holder of 22 United States registrations thereof
granted between 1936 and 1956 and of a New York
registration granted in 1950. It brought this action, alleging
that defendant's use of the name Polarad as a trademark and
as part of defendant's corporate title infringed plaintiff's
Federal and state trademarks and constituted unfair
competition. It sought an injunction. Defendant's answer, in
addition to denying the allegations of the complaint, sought a
declaratory judgment establishing their right to use Polarad in
the business in which defendant was engaged, an injunction
against plaintiff's use of Polaroid in the television and
electronics fields, and other relief.
Held:
• Where the products are different, the prior owner's chance
of success is a function of many variables: the strength of
his mark, the degree of similarity between the two marks,
the proximity of the products, the likelihood that the prior
owner will bridge the gap, actual confusion, and the
reciprocal of defendant's good faith in adopting its own
mark, the quality of defendant's product, and the
sophistication of the buyers. Even this extensive catalogue
does not exhaust the possibilities — the court may have to
take still other variables into account.
ITC:
• Here plaintiff's mark is a strong one and the similarity
between the two names is great, but the evidence of
actual confusion, when analyzed, is not impressive.
o The filter seems to be the only case where
defendant has sold, but not manufactured, a
product serving a function similar to any of
plaintiff's, and plaintiff's sales of this item have
been highly irregular, varying, in amount in
different years.
Class notes:
Each circuit applies their own tests but in essence they are just
the same
PH followed polaroid factors
Multi-factoring balancing test
Guideline lang, not a scorecard
B.2. QUALITY INNS INTERNATIONAL V. MCDONALD’S
CORP., 695 F.SUPP. 198 (D.MD. 1988)
Quality Inns marketed a new chain of economy hotels under
the name McSleep Inn. McDonalds now claims trademark
infringement in line with McLanguage being a family of
McDonalds family of marks. The issue is w/n McSleep results in
confusion.
Held:
1. Strength of the mark – mcdonald’s is a popular mark
2. Evidence of confusion – survey results confirm
evidence of confusion; 16.3% of respondents
o It is true THAT MERE ASSOCIATION MAY
NOT AMOUNT TO CONFUSION. It is one thing
to say that a use brings McDonald's to mind, but
without confusion that McDonald's is behind the
product or service, and quite another to conclude
that an appreciable number of typical consumers
are likely to become actually confused. In the
former case, there will be no trademark
violation since trademark law does not
protect words alone. Unlike a copyright,
MERE REPRODUCTION OF A TRADEMARK
IS NOT AN INFRINGEMENT. Thus, a non-
confusing parody of a famous mark ("Jordache"
vs. "Lardashe") would not be trademark
infringement because the owner of the mark
"does not own in gross the customer awareness
of the name.
o Trademark does not confer a right to prohibit
the use of the words. It is not a copyright.
3. Similarity of the context of the marks – in the absence
of the name McSleep Inn, confusion is not likely to
result; although the Court agrees that the logos in
design, color and shape, as well as the facilities, are
not confusingly similar, it is the use of the name
McSleep Inn that suggests an ownership,
sponsorship, or association with McDonald's.
o The confusion caused by the name is not
mitigated to an acceptable level by the
distinctive uses of the logo, facilities and
advertising. Even use of the clarifying
language "by Quality International" and
the substantial use of its corporate
signature does not avoid the likelihood of
confusion in this case.
4. Relatedness of the products – fastfood an motel
business were related. Some motels actually provide
food in competition with fast food businesses, as
shown by the franchise agreement which prohibits
franchisees from using the name McSleep Inn or
variation of it in the food business.
o The boundaries of enforceability of a mark
are defined by where and in what markets
an appreciable number of the public are
confused. Here the confusion in a different,
but related market, entitles McDonald's to
enforce its marks in that market.
5. Intent – Quality International knew of the risk but
elected to proceed. There is a universe of names to
select from but it combined “Mc” plus the generic
word “sleep,” a combination that it knew Mcdonald’s
invented and which had no meaning except to
associate a product or service with McDonald’s.
 o Intent of the infringing user to confuse is
not necessary to establish a likelihood of
confusion. On the other hand, the existence of an
intent to confuse is "strong evidence
establishing likelihood of confusion, since one
intending to profit from another's reputation
generally attempts to make his signs,
advertisements, etc., to resemble the other's so
as deliberately to induce confusion."
o In the absence of evidence of actual
confusion, a Court may conclude, therefore,
that the intended infringement would hit
its target; certainly the infringer should not
be the one to complain that it did not.
B.3. E&J GALLO WINERY V. CONSORZIO DEL GALLO
NERO, 782 F. SUPP. 457 (1991)
An action for trademark infringement and dilution was filed by
E. & J. Gallo Winery (“Gallo”) against Consorzio del Gallo Nero
(“Gallo Nero”). Gallo is a US-based brand that features the
“Gallo” trademark and is the owner of several registrations of
the “Gallo” mark, and has been using the same since 1933.
Gallo Nero is an Italian brand.
Held:
1. Strength of plaintiff’s mark
- A registered mark is "presumed to be distinctive
and should be afforded the utmost protection."
- Gallo has virtually universal recognition as a trademark for
wine. It is a strong mark.
- "[e]vidence of other unrelated potential infringers is
irrelevant to claims of trademark infringement," and Gallo
Nero has not shown that these third-party uses are in any
way connected to the production, promotion, and sale of
wine, much less that any of these uses has achieved
significant consumer recognition.
- a family name is entitled to protection as a mark so
long as it has acquired a recognized "secondary
meaning" through use, advertising, and public
recognition.
2. Similarity of marks used
- Similarity of marks is judged by their sound,
appearance, and meaning.
- Consumers are accustomed to seeing the "Gallo" mark
used in conjunction with other terms or surrounded by
other words.
- "Gallo" is the single "dominant" or "substantive" term used
by plaintiff on all its products, the two terms are
significantly similar for purposes of a finding of a likelihood
of confusion between the two uses.
3. Similarity of goods sold
- "When the goods produced by the alleged infringer
compete for sales with those of the trademark
owner, infringement usually will be found if the
marks are sufficiently similar that confusion can be
expected."
- Both parties are involved in the sale of wine.
4. Similarity of marketing channels used
- Both market their products through retail establishments
like wine shops and liquor stores.
ADL
5. Degree of care exercised by purchasers
- Confusion between marks is generally more likely
where the goods at issue involve relatively
inexpensive, "impulse" products to which the
average, "unsophisticated" consumer does not
devote a great deal of care and consideration in
purchasing.
- Taylor Wine Co. v. Bully Hill Vineyards: Wine has been
deemed an "impulse" product, and certainly so with
respect to the average consumer, effectively compelling
the consumer's reliance "on faith in the maker."
6. Actual confusion
- The failure to prove instances of actual confusion is
not dispositive'" of an infringement claim.
- Evidence of actual confusion "is merely one factor to be
considered and it is not determinative" if it is not shown.
- Only likelihood of confusion is required.
- SIDE BY SIDE: The proper test for likelihood of
confusion is not whether consumers would be
confused in a side-by-side comparison of the
products, but whether confusion is likely when a
consumer, familiar with the one party's mark, is
presented with the other party's goods alone.
7. Intent in adopting the name
- Just as with actual confusion, a showing of intent is not
necessary to support a finding of a likelihood of confusion.
- However, where an infringer adopts a particular
name with knowledge of plaintiff's mark, courts
presume that there was an intent to copy the mark.
- AMF, Inc. v. Sleekcraft Boats: one who adopts the
mark of another for similar goods acts at his own
peril and any doubt concerning the similarity of the mark
must be resolved against him.
- Gallo Nero was aware of the Gallo mark prior to beginning
its US campaign
C. TRADE DRESS CONFUSION
C.1. ASIA BREWERY, INC. VS. COURT OF APPEALS AND
SAN MIGUEL, G.R. NO. 103543, JULY 5, 1993
San Miguel Corp. (SMC) filed a complaint against Asia Brewery
Inc. (ABI) for infringement of trademark and unfair
competition. RTC dismissed the complaint. The CA reversed
the decision finding that ABI is guilty of trademark
infringement and unfair competition thus the case at bar. The
main thrust of SMC’s complaint arises from the allegedly
“confusing similarity” in the general appearance or trade dress
of ABI’s BEER PALE PILSEN and SMC’S SAN MIGUEL PALE
PILSEN.
Held:
• No trade dress confusion when sources are
prominently printed on the label and on other parts
of the bottle: However, when as in this case, the names
of the competing products are clearly different and their
respective sources are prominently printed on the label
and on other parts of the bottle, mere similarity in the
shape and size of the container and label, does not
constitute unfair competition.
o The steinie bottle is a standard bottle for beer
and is universally used. SMC did not invent it nor
patent it. The fact that SMC's bottle is registered
Page 57
 under R.A. No. 623 simply prohibits
manufacturers of other foodstuffs from the
unauthorized use of SMC's bottles by refilling
these with their products.
o Registration of SMC's beer bottles did not give
SMC a patent on the steinie or on bottles of
similar size, shape or color.
• Dominancy Test applied
o Difference in dominant marks: San Miguel Pale
Pilsen v. Beer Pale Pilsen.
o There is no similarity in the dominant features of
both TMs. Neither in sound, spelling or
appearance can BEER PALE PILSEN be
confusingly similar to SAN MIGUEL PALE PILSEN.
• There are many differences in the trade dress or
appearance of the products: shape of neck, print, bottle
cap, price.
o SMC's being the first to use the steinie bottle
does not give SMC a vested right to use it to the
exclusion of everyone else. Being of functional or
common use, and not the exclusive invention of
any one, it is available to all who might need to
use it within the industry. o Nobody can acquire
any exclusive right to market.
o The amber color is a functional feature of the
beer bottle – most effective color in preventing
transmission of light
• Pilsen is a primarily geographically descriptive word hence
non-registrable. Pale pilsen are generic words.
• The Doctrine “consider the mark as a whole and
not as dissected (to determine existence of
infringement) NOT applicable in ALL situations
such as case at bar
• Del Monte:
o 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.
o in resolving cases of infringement and unfair
competition, the courts should "take into
consideration several factors which would affect
is conclusion, to wit: the age, training and
education of the usual purchaser, the nature and
cost of the article, whether the article is bought
for immediate consumption and also the
conditions under which it is usually purchased.
• Del Monte v. this case: Catsup is bought off the shelf;
beer is not usually picked up from a store shelf but
ordered by brand by the beer drinker himself from the
storekeeper or waiter in a pub or restaurant.
D. SECONDARY CONFUSION/POST SALE
CONFUSION
D.1. MASTERCRAFTERS V. VACHERON&CONSTANTIN-
LE COULTRE, 221 F.2D 464, 350 U.S. 832 (1995)
Mastercrafters launched production and distribution of its
MODEL 308 CLOCK. Defendant Vacheron wired Mastercrafters
and its customer-distributors that the said model was a
counterfeit of the distinctive appearance and configuration of
the ATMOS CLOCK, distributed by Vacheron. Vacheron
commenced state-court suits against several Mastercrafters’
distributors for damages and injunction Mastercrafters
countered by bringing the present action seeking declaratory
judgment that its model 308 does not unfairly compete with
Vacheron. Plaintiff’s clock is way cheaper than that of
defendant’s.
Held:
• While a customer examining plaintiff’s clock would see
from the electric cord that it was not an atmospheric
clock, plaintiff copied the design of the Atmos because it
wanted to attract purchasers who wanted a ‘luxury
design’ clock.
• This goes to show at least that some customers
would buy plaintiff's cheaper clock for the
PURPOSE OF ACQUIRING THE PRESTIGE gained by
displaying what many visitors at the customers' homes
would regard as a prestigious article.
• PLAINTIFF'S WRONG THUS CONSISTED OF THE
FACT THAT SUCH A VISITOR WOULD BE LIKELY TO
ASSUME THAT THE CLOCK WAS AN ATMOS CLOCK.
Neither the electric cord attached to, nor the plaintiff's
name on, its clock would be likely to come to the attention
of such a visitor; the likelihood of such confusion suffices
to render plaintiff's conduct actionable.
• If the copying is unlawful, it gives rise to a powerful
inference that confusion is likely, and puts on the alleged
infringer the burden of going forward with proof that it is
not.
• Plaintiff is guilty of unfair competition.
E. REVERSE CONFUSION
E.1. DREAMWERKS PRODUCTION GROUP, INC. V. SKG
STUDIO, 142 F.3D 1127 (1998)
This is an unusual case wherein the junior mark is more
famous than the senior mark. Dreamwerks was established in
1984 and registered its trademark in 1992 and has been
organizing Trekkie Conventions. DreamWorks (say SKG na
lang) was established in 1994 and has given us a whole bunch
of great movies. So now Dreamwerks is saying that SKG
infringed on its mark, and is eating up its goodwill because
people get mad when they realize they’re dealing with
Dreamwerks and not SKG.
Held:
• In a reverse infringement case, like ours, there is
no question of palming off, since neither junior nor
senior user wishes to siphon off the other's goodwill. The
question in such cases is whether consumers doing
business with the senior user might mistakenly
believe that they are dealing with the junior user.
More specifically, the question here is whether a
reasonable consumer attending a Dreamwerks-
sponsored convention might do so believing that it
is a convention sponsored by DreamWorks.
• if this were an ordinary trademark case rather than a
reverse infringement case--in other words if DreamWorks
had been there first and Dreamwerks later opened up a
business running entertainment-related conventions--there
would be little doubt that DreamWorks would have stated
a case for infringement sufficient to survive summary
judgment.
• Three of the Sleekcraft factors are pivotal here: (1)
arbitrariness of the mark; (2) similarity of sight, sound and
meaning; and (3) relatedness of the goods.
• While it is somewhat unusual for a famous mark to
defend its very existence against a much lesser
known mark, DreamWorks is in no different a
position than any other new company which must
ensure that its proposed mark will not infringe on
the rights of existing trademark holders. Counsel for
DreamWorks conducted a diligent search and discovered
the Dreamwerks mark, yet failed to make
accommodations or select a different mark.
• Dreamwerks is an arbitrary mark. There is similarity of
sound and meaning. There is also similarity of goods –
movies and sci-fi merchandise are now complementary.
• Court remanded the case for trial.

ADL Page 59

IX. OTHER DEFENSES
SECTIONS 148, 159, IP CODE
Section 148. Use of Indications by Third Parties for
Purposes Other than those for w hich the M ark is Used .
- Registration of the mark shall not confer on the registered
owner the right to preclude third parties from using
bona fide:
i. their names,
ii. addresses,
iii. pseudonyms,
iv. a geographical name, or
v. exact indications concerning the kind, quality,
quantity, destination, value, place of origin, or time of
production or of supply, of their goods or services:
Provided:
a. That such use is confined to the purposes of
mere IDENTIFICATION OR INFORMATION and
b. cannot mislead the public as to the source of the
goods or services. (n)
Section 159. Limitations to Actions for Infringement. -
Notwithstanding any other provision of this Act, the remedies
given to the owner of a right infringed under this Act shall be
limited as follows:
[prior user in good faith]
159.1. Notwithstanding the provisions of Section 155 hereof, a
registered mark shall have no effect against any person
who, in good faith, before the filing date or the priority
date, was using the mark for the purposes of his business
or enterprise: Provided, That his right may only be
transferred or assigned together with his enterprise or
business or with that part of his enterprise or business in
which the mark is used.
[innocent infringer – printer; limited to injunction]
159.2. Where an infringer who is engaged solely in the
business of printing the mark or other infringing materials for
others is an innocent infringer, the owner of the right
infringed shall be entitled as against such infringer only to an
injunction against future printing.
[innocent infringer – publisher or distributor; limited to
injunction; except where delay would result]
159.3. Where the infringement complained of is contained in
or is part of paid advertisement in a newspaper, magazine,
or other similar periodical or in an electronic communication,
the remedies of the owner of the right infringed as against the
publisher or distributor of such newspaper, magazine, or
other similar periodical or electronic communication shall be
limited to an injunction against the presentation of such
advertising matter in future issues of such newspapers,
magazines, or other similar periodicals or in future
transmissions of such electronic communications. The
limitations of this subparagraph shall apply only to innocent
infringers: Provided, That such injunctive relief shall
not be available to the owner of the right infringed with
respect to an issue of a newspaper, magazine, or other similar
periodical or an electronic communication containing infringing
matter where restraining the dissemination of such infringing
matter in any particular issue of such periodical or in an
electronic communication would delay the delivery of such
issue or transmission of such electronic communication
is customarily conducted in accordance with the sound
business practice, and not due to any method or device
adopted to evade this section or to prevent or delay the
issuance of an injunction or restraining order with respect to
such infringing matter. (n)
A. FAIR USE
Class notes:
- Slogans while not copyrightable, can be the subject of
trademark
- Classic/traditional fair use - descriptive sense
- Nominal fair use - as a trademark
A.1. SUNMARK, INC. V. OCEAN SPRAY CRANBERRIES,
64 F.3D 1055, 1058 (7TH CIR. 1995)
Sunmark (producer of a candy), through an injunction,
contested the use of Ocean Spray (producer of cranberry juice)
of the words “sweet-tarts” claiming that it has a trademark on
“SweeTARTS”. Sunmark anchors its case on the wide use of
the words in its advertisements both on TV and print.
Held:
• Although an earlier litigation called the predecessor
"Sweetarts" mark "uncommon, arbitrary, and distinct"
(Sweetarts v. Sunline, Inc), the question in this litigation is
not whether "sweet-tart" or the Swee TARTS logo is an
arbitrary mark when used to describe Sunmark's candy.
The question is whether Ocean Spray has used
"sweet-tart" descriptively, for a drink that has
elements of both sweetness (it is sugared) and
tartness (it is based on cranberries).
• Both sweet and tart are words of description in
ordinary English.
• That SweeTARTS is an incontestable mark for sugar
candy does not make Sunmark the gatekeeper of
these words for the whole food industry.
When is a word descriptive
• For a word to be considered descriptive, it merely
needs to refer to a characteristic of the product.
• The use of a similar name by another to truthfully
describe his own product does not constitute a
legal or moral wrong, even if its effect be to cause the
public to mistake the origin of the product.
• USE OF WORD OTHERWISE THAN AS A MARK: When
the products involved are similar, "likelihood of confusion"
may amount to using a word in a "misleading" way,
violating 15 U.S.C. Sec. 1125(a)(1)--not because the
likelihood of confusion makes the use nondescriptive, but
because the confusion about the product's source
shows that the words are being used, de facto, as a
mark. And the defense is available only to one who
uses the words of description "otherwise than as a
mark".
ITC:
• Ocean Spray is not using “sweet-tart” as a mark.
• The "sweet-tart of a deal" language strikes us as a play on
words, a device that does not identify the goods' origin
and that anyone may use.
A.2. UNITED STATES SHOE CORP. V. BROWN GROUP
INC., 740 F.SUPP. 196
Plaintiff U.S. Shoe asserts trademark violation and unfair
competition against Brown Group, Inc., in connection with the
advertising and sale of women's dress shoes. Plaintiff
advertises its women's dress pumps under the slogan and
musical jingle, "Looks Like a Pump, Feels Like a Sneaker."
Defendant has launched an advertising campaign that
compares its pump to a sneaker and asserts that it "feels like a
sneaker." The issue is whether or not defendant Brown
Group’s use of the words “feels like a sneaker” falls squarely
within the “fair use” defense in the Lanham Act and hence
valid defense to a trademark infringement claim.
Held:
• Defendant's use of the words "feels like a sneaker" falls
squarely within the "fair use" defense codified in Section
33(b)(4) of the Lanham Act.
• The fair use doctrine provides a statutory defense to a
trademark infringement claim when "the use of the
name, term, or device charged to be an
infringement is a use, otherwise than as a trade or
service mark, ... of a term or device which is
descriptive of and used fairly and in good faith only
to describe to users the goods or services of such party,
or their geographic origin."
ITC:
• The defendant uses the phrase "feels like a sneaker" in a
descriptive sense, claiming a virtue of the product.
Defendant uses the phrase otherwise than as a trade or
service mark.
• Moreover, defendant is not using the phrase as an
identifier or trademark to indicate origin or source.
• That function is performed in defendant's ad by the
NaturalSport logo, which is prominently displayed, and by
the slogan, "Walk our Way ... From Naturalizer."
• Defendant's use of the words "feels like a sneaker" is not
even as a caption or slogan, but as a fragment of a
sentence in small print.
A.3.CAR-FRESHNER CORP. V. S.C. JOHNSON & SON
INC., 70 F.3D 267 (1995)
Car-Freshner Corporation sued S.C. Johnson for trademark
nfringement on the latter’s air freshners called “Plug-ins,”
which are shaped like pine trees. The District Court rejected
Johnson’s defense of fair use because according to them, the
defense only applies to descriptive marks. However, it ruled
that the products were sufficiently dissimilar thus, there was
no likelihood of confusion.
Held:
The fair use defense applies even to marks that are not
descriptive.
• It is true that the doctrine can apply only to marks
consisting of terms or images with descriptive
qualities. That is because only such terms or images are
capable of being used by others in their primary
descriptive sense.
• But it should make no difference whether the
plaintiff's mark is to be classed on the descriptive
tier of the trademark ladder (where protection is
unavailable except on a showing of secondary meaning).
• What matters is whether the defendant is using the
protected word or image descriptively, and not as a
mark.
ADL
o Whether the mark is classed as descriptive (and
thus ineligible for protection without secondary
meaning) depends on the relationship between
the mark and the product described.
• Regardless whether the protected mark is
descriptive, suggestive, arbitrary, or fanciful as
used in connection with the product or service
covered by the mark, the public's right to use
descriptive words or images in good faith in their ordinary
descriptive sense must prevail over the exclusivity claims
of the trademark owner.
ITC:
• Johnson's use of the pine-tree shape describes two
aspects of its product. The pine tree refers to the pine
scent of its air freshening agent. Furthermore, as a
Christmas tree is traditionally a pine tree, the use of the
pine-tree shape refers to the Christmas season, during
which Johnson sells this item.
• Johnson did not use the pine tree shape as a mark.
• As Johnson was fully entitled to use a pine-tree shape
descriptively notwithstanding Car-Freshener's use of a tree
shape as a mark, the fact that it did so without consulting
counsel has no tendency to show bad faith.
A.4. NEW KIDS ON THE BLOCK V. NEWS AMERICA
PUBLISHING, 971 F.2D 302 (9TH CIR. 1992)
New Kids on the Block is a popular performing group. There
are several products and services rendered bearing the group’s
name. One of the services is the 900 area code numbers (fans
can call and listen to New Kids). Two newspapers published
polls on the New Kids and also used the 900 area code
numbers to get answers to the polls. People who decide to
answer by calling would be charged some 50-95 cents. Block
filed complaint for trademark infringement. (N ote: this case
involves nom inative fair use, w here the m ark is used to
describe plaintiff’s ow n product and not defendant’s).
Held:
• "The 'fair- use' defense, in essence, forbids a trademark
registrant to appropriate a descriptive term for his
exclusive use and so prevent others from accurately
describing a characteristic of their goods."
• It is often virtually impossible to refer to a
particular product for purposes of comparison,
criticism, point of reference or any other such
purpose without using the mark.
o E.g. Volkswagenwerk was allowed to be used by
an automobile repair shop specializing in
Volkswagaen
o Cases like these are best understood as involving
a non-trademark use of a mark--a use to which
the infringement laws simply do not apply.
• SUCH NOMINATIVE USE OF A MARK--where the only
word reasonably available to describe a particular
thing is pressed into service--lies outside the strictures
of trademark law: Because it does not implicate the
source-identification function that is the purpose of
trademark, it does not constitute unfair competition; such
use is fair because it does not imply sponsorship or
endorsement by the trademark holder.
Not a classic fair use case (test to be applied w here m ark
is used to describe m ark holder’s ow n product) :
Page 61
• To be sure, this is not the classic fair use case where the
defendant has used the plaintiff's mark to describe the
defendant's own product. Here, the New Kids
trademark is used to refer to the New Kids
themselves.
• If the defendant's use of the plaintiff's trademark refers
to something other than the plaintiff's product, the
traditional fair use inquiry will continue to govern.
• But, where the defendant uses a trademark to
describe the plaintiff's product, rather than its own,
we hold that a commercial user is entitled to a
NOMINATIVE FAIR USE DEFENSE provided he meets
the following three requirements:
1. First, the product or service in question must be one not
readily identifiable without use of the trademark;
2. second, only so much of the mark or marks may be
used as is reasonably necessary to identify the
product or service; and
3. third, the user must do nothing that would, in
conjunction with the mark, suggest sponsorship or
endorsement by the trademark holder.
ITC:
1. New Kids are not readily identifiable without using the
mark - While plaintiffs' trademark certainly deserves
protection against copycats and those who falsely
claim that the New Kids have endorsed or sponsored
them, such protection does not extend to rendering
newspaper articles, conversations, polls and
comparative advertising impossible. The first
nominative use requirement is therefore met.
2. Only to the extent necessary to identify them as the
subject of the polls, they do not use the New Kids'
distinctive logo or anything else that isn't needed to
make the announcements intelligible to readers.
3. Finally, nothing in the announcements suggests joint
sponsorship or endorsement by the New Kids.
Competitive use
• plaintiffs argue that a nominative fair use defense is
inapplicable where the use in question competes directly
with that of the trademark holder.
• We reject this argument. While the New Kids have a
limited property right in their name, that right does not
entitle them to control their fans' use of their own
money. Where, as here, the use does not imply
sponsorship or endorsement, the fact that it is carried
on for profit and in competition with the trademark
holder's business is beside the point.
B. PARODY
Class notes:
Parody by itself is not a defense but goes into the factor test
on whether there is confusion
B.1. MATTEL V. MCA, 296 F.3D 894 (2002)
Mattel produced Barbie, the doll, in the early 1950s. Barbie is
the symbol of American girlhood, a public figure and a cultural
icon. Aqua, a Danish band, produced a song called Barbie girl
in 1997, wherein one band member impersonates Barbie while
another band member, who impersonates Ken, invites her to
go party. Mattel filed a case against the music companies who
produced, marketed, and sold Barbie Girl. The district court
held that Barbie Girl is a parody of Barbie and a nominative fair
use. Also, MCA’s use of the term Barbie is not likely to confuse
consumers as to Mattel’s affiliation with Barbie Girl.
Held:
• The trademark owner does not have the right to
control public discourse whenever the public
imbues his mark with a meaning beyond its source-
identifying function.
o "[t]rademark rights do not entitle the owner to
quash an unauthorized use of the mark by
another who is communicating ideas or
expressing points of view."
Use in the title
• The title should describe the underlying work, and Barbie
Girl does just that.
• A title is designed to catch the eye and to promote the
value of the underlying work. Consumers expect a title to
communicate a message about the book or movie, but
they do not expect it to identify the publisher or producer.
• Literary titles do not violate the Lanham Act
"unless the title:
1. has no artistic relevance to the underlying work
whatsoever, or,
2. if it has some artistic relevance, unless the title
explicitly misleads as to the source or the content
of the work."
• The song does not rely on the Barbie mark to poke fun at
another subject but targets Barbie herself.
o MCA’s use of Barbie is not an infringement of
Mattel’s trademark
1. The use of Barbie has artistic relevance to
the underlying work – the song is bout
Barbie and the values Aqua claims she
represents
2. The song title does not mislead as to the
source of the work; it does not suggest that
it was produced by Mattel
o NOTE: a parodist whose expressive work aims its
parodic commentary at a trademark is given
considerable leeway, but a claimed parodic
use that makes no comment on the mark is
not a permitted trademark parody use.
Dilution
• MCA’s use is dilutive – association both as to the doll and
the song.
• Three exceptions for dilution
1. Comparative advertising
2. News reporting and commentary
3. Noncommercial use
- Noncommercial use" refers to a use that consists
entirely of noncommercial, or fully constitutionally
protected, speech.
- this exemption "is intended to prevent the courts from
enjoining speech that has been recognized to be
[fully] constitutionally protected," "such as parodies"
- core notion of commercial speech is that it does no
more than propose a commercial transaction
ITC:
• Barbie Girl is not purely commercial speech, and is
therefore fully protected. To be sure, MCA used
Barbie's name to sell copies of the song. However, as
we've already observed, see pp. 901-02 supra, the
 song also lampoons the Barbie image and comments
humorously on the cultural values Aqua claims she
represents. Use of the Barbie mark in the song Barbie
Girl therefore falls within the noncommercial use
exemption to the FTDA.
B.2. ELVIS PRESLEY V. CAPECE, 141 F.3D 188 (1998)
EPE is the assignee and registrant of all trademarks etc
belonging to the Elvis Presley estate. Without its consent,
Capece registered the service mark “The Velvet Elvis” and
opened a bar of the same name, with a concept of “60’s
lifestyle parody.” The bar not only had designs and decorations
etc which depict such lifestyle, it also contained references to
Elvis Presley (statuettes, painting, even the menu). EPE filed
an infringement suit against Capece. The district court found
no infringement in EPE’s marks since the bar was presented as
a 60’s parody.
Held:
Parody not a defense
• Parody is not a defense to trademark infringement,
but rather another factor to be considered, which
weighs against a finding of a likelihood of confusion.
o Some parodies will constitute
infringement, some will not. But the cry
of "parody!" does not magically fend off
otherwise legitimate claims of trademark
infringement or dilution.
o There are confusing parodies and non-
confusing parodies. All they have in
common is an attempt at humor through the
use of someone else's trademark. A non-
infringing parody is merely amusing,
not confusing.
• JUSTIFICATION: A parody derives its need and
justification to mimic the original from its targeting
of the original for comment or ridicule.
o IF THE ORIGINAL IS NOT A TARGET OF
THE PARODY, the need to "conjure up" the
original decreases as the parody's aim moves
away from the original.
o Even though it portrays the original, it
also sends the message that it is not
the original and is a parody, thereby
lessening any potential confusion.
ITC:
• Here, there is a direct parody of society that does not
even attempt to parody the celebrity. Thus, the
necessity to use the marks significantly decreases and
does not justify the use.
• Without the necessity to use Elvis's name, parody
does not weigh against a likelihood of confusion in
relation to EPE's marks. It is simply irrelevant. As an
irrelevant factor, parody does not weigh against or in
favor of a likelihood of confusion, and the district
court erred in relying upon parody in its determination
of the likelihood of confusion.
Class notes:
Initial interest confusion - compare with secondary confusion
B.3. LOUIS VUITTON V. HAUTE DIGGITY DOG, 507 F.3D
252 (4TH CIR. 2007)
ADL
Louis Vuitton Malletier S.A. (LVM), a French corporation
located in Paris, that manufactures luxury luggage, handbags,
and accessories, commenced this action against Haute Diggity
Dog, LLC (HDD), a Nevada corporation that manufactures and
sells pet products nationally, alleging trademark infringement,
trademark dilution, copyright infringement, and related
statutory and common law violations. HDD manufactures,
among other things, plush toys on which dogs can chew,
which, it claims, parody famous trademarks on luxury
products, specifically LVM. HDD makes a chew toy labeled
"Chewy Vuiton" which mimics LVM's Louis Vuitton handbags.
Held:
Definition and nature of parody
• "[a] 'parody' is defined as a simple form of entertainment
conveyed by juxtaposing:
1. the irreverent representation of the trademark
2. with the idealized image created by the mark's
owner."
• A parody must convey two simultaneous -- and
contradictory -- messages: that it is the original,
but also that it is not the original and is instead a
parody."
o This second message must not only
differentiate the alleged parody from the original
but must also communicate some articulable
element of satire, ridicule, joking, or
amusement.
ITC:
• Dog toys are successful parodies of LVM handbags and
LVM marks.
1. Pet chew toy is an irreverent representation of an
LVM handbag – design plus print is LV’s
2. Dog toy is not the idealized image created by LVM –
difference in spelling; designs are crude; inexpensive;
bought at pet supply stores;
• Juxtaposition of the two – the toys, being something to be
chewed by a dog, pokes fun at the elegance and
expensiveness of an LV handbag which must not be
chewed by a dog
• The dog toy is a comment on the rich and famous, on the
LOUIS VUITTON name and related marks, and on
conspicuous consumption in general.
Strong marks
• While it is true that finding a mark to be strong and
famous usually favors the plaintiff in a trademark
infringement case, the opposite may be true when
a legitimate claim of parody is involved.
• The strength of a famous mark allows consumers
immediately to perceive the target of the parody, while
simultaneously allowing them to recognize the changes to
the mark that make the parody funny or biting.
C. COMPARATIVE ADVERTISING
SECTION 2, ARTICLE IV, “STANDARDS OF
ADVERTISING OF THE ADVERTISING STANDARDS
COUNCIL”
(too long to paste here)
C1. SMITH V. CHANEL, INC., 402 F.2D 562 (1968)
Smith advertises a fragrance called “Ta’Ron’s Second Chance”
Page 63
as a duplicate of appellee’s “Chanel No. 5” at a fraction of the
latter’s price. That being so, Chanel was granted a preliminary
injunction prohibiting any reference to Chanel No. 5 in the
promotion or sale of the product. The action herein rests upon
a single advertisement published in “Specialty Salesmen” which
offered the “Ta’Ron Line of Perfumes” for sale. In the said
advertisement, Chanel was one of the scents mentioned that it
copied. Chanel, in this case, raises the principal question of
whether one who has copied an unpatented product sold
under a trademark may use the trademark in his advertising to
identify the product he has copied.
Held:
• Use of another's trademark to identify the
trademark owner's product in comparative
advertising is not prohibited by either statutory or
common law, absent misrepresentation regarding
the products or confusion as to their source or
sponsorship. The rule rests upon the traditionally
accepted premise that the only legally relevant function of
a trademark is to impart information as to the source or
sponsorship of the product.
• The Lanham Act does not prohibit a commercial rival's
truthfully denominating his goods a copy of a design in
the public domain, though he uses the name of the
designer to do so.
• Protection of trademark values other than source
identification would create serious anti-competitive
consequences with little compensating public benefit.
• To prohibit use of a competitor's trademark for the
sole purpose of identifying the competitor's
product would bar effective communication of
claims of equivalence.
o The practical effect of such a rule would be
to extend the monopoly of the trademark
to a monopoly of the product.
ITC:
• Since appellees' perfume was unpatented, appellants had
a right to copy it, as appellees concede. There was a
strong public interest in their doing so, 'for imitation is the
life blood of competition.
D. PROMOTIONAL GOODS
D.1. BOSTON ATHLETIC V. SULLIVAN, 867 F.2D 22
(1989)
Boston Athletic organizes the Boston Marathon. Respondents
printed shirts bearing BAA’s service marks “Boston Marathon,”
“BAA Marathon” and its unicorn logo. case. Defendants are
using the Boston Marathon sponsored and operated by the
BAA to promote the sale of goods which are adorned so as to
capitalize on the race.
Held:
• Involved here are promotional goods – goods bearing
Boston’s service marks so as to capitalize on the race.
• Under the promotional goods issue, the likelihood of
confusion inquiry focuses on whether the purchasing
public is likely to believe that the sponsor of the Boston
Marathon produces, licenses, or otherwise endorses
defendant’s shirts.
o Whether or not purchasers happen to know that
the sponsor of the Boston Marathan is an
organization called the "Boston Athletic
Association" is irrelevant to this "likelihood of
confusion" analysis.
• In order to establish infringement in a promotional goods
case, it has traditionally been the plaintiff's burden to
show that prospective purchasers are in fact likely to be
confused or misled into thinking that the defendant's
product was produced, licensed, or otherwise sponsored
by the plaintiff.
o But plaintiff need not prove that members of the
public will actually conclude that defendants’
products was officially sponsored by the
Marathon’s sponsor. Only a few people can
venture an informed opinion on whether
someone using the logo of the sponsor of a
sporting event is required to have the permission
of the event’s sponsor.
• In case of intentional copying, the second comer is
generally “presumed ot have intended a confusing
similarity of appearance and to have succeeded in
doing so.”
• In the present case, we adopt a similar
presumption. Given the undisputed facts that (1)
defendants intentionally referred to the Boston Marathon
on its shirts, and (2) purchasers were likely to buy the
shirts precisely because of that reference, we think it fair
to presume that purchasers are likely to be confused
about the shirt's source or sponsorship. We presume that,
at the least, a sufficient number of purchasers would be
likely to assume--mistakenly--that defendants' shirts had
some connection with the official sponsors of the Boston
Marathon.
ITC:
• Defendants' shirts are clearly designed to take advantage
of the Boston Marathon and to benefit from the good will
associated with its promotion by plaintiffs. Defendants
thus obtain a "free ride" at plaintiffs' expense.
X. CANCELLATION
SECTION 151, IP CODE
Section 151. Cancellation. - 151.1. A petition to cancel a
registration of a mark under this Act may be filed with the
Bureau of Legal Affairs by any person who believes that he
is or will be damaged by the registration of a mark under this
Act as follows:
(a) Within five (5) years from the date of the
registration of the mark under this Act.
(b) At any time, if the registered mark:
• becomes the generic name for the goods or services, or
a portion thereof, for which it is registered, or
• has been abandoned, or
• its registration was obtained fraudulently or contrary
to the provisions of this Act, or
• if the registered mark is being used by, or with the
permission of, the registrant so as to misrepresent the
source of the goods or services on or in connection with
which the mark is used.
If the registered mark becomes the generic name for less than
all of the goods or services for which it is registered, a petition
to cancel the registration for only those goods or services may
be filed. A registered mark shall not be deemed to be the
generic name of goods or services solely because such mark is
also used as a name of or to identify a unique product or
service. The primary significance of the registered mark to the
relevant public rather than purchaser motivation shall be the
test for determining whether the registered mark has become
the generic name of goods or services on or in connection with
which it has been used. (n)
(c) At any time, if the registered owner of the mark without
legitimate reason fails to use the mark within the
Philippines, or to cause it to be used in the Philippines
by virtue of a license during AN UNINTERRUPTED PERIOD
OF THREE (3) YEARS OR LONGER.
151.2. Notwithstanding the foregoing provisions, the court or
the administrative agency vested with jurisdiction to hear and
adjudicate any action to enforce the rights to a registered
mark shall likewise exercise jurisdiction to determine whether
the registration of said mark may be cancelled in accordance
with this Act. The filing of a suit to enforce the registered mark
with the proper court or agency shall exclude any other court
or agency from assuming jurisdiction over a subsequently filed
petition to cancel the same mark. On the other hand, the
earlier filing of petition to cancel the mark with the Bureau of
Legal Affairs shall not constitute a prejudicial question that
must be resolved before an action to enforce the rights to
same registered mark may be decided. (Sec. 17, R.A. No.
166a)
Class notes:
• Section 151 has a catch all provision wherein a mark may
be cancelled AT ANY TIME if registration has been
obtained contrary to the provisions of the IP Code.
o No specific provision was mentioned, unlike in
the US where there are only specific violations for
which the mark may be cancelled at any
time/after more than 5 years.
o This technically renders the 5 year period
useless. You can file a petition to cancel the mark
anytime provided that you prove a violation of
the IP code.
XI. DILUTION
Class notes:
• Dilution does not really protect the mark but the
goodwill
• Does not seek to prevent consumer confusion and
deception
• To protect strong trademark, as a form of property,
against appropriation
Levi case
• Peculiar about this case is that SC created a new law –
dilution
• In the US there is a statute
• Question is whether the concept of dilution, which
required a federal statute in US, can be implemented in
the PH through the SC
• We have case law on dilution but there is no statute on
ADL
dilution
• Enough ba to raise in subsequent cases to raise dilution?
Famous is not defined - see US trademark dilution act
TWO KINDS OF DILUTION:
1. Dilution by blurring
• impairs the distinctiveness
• "whittling away of an established trademark's selling
power through use on dissimilar products"
• example. Use of levi's on cars, coffee, restaurants
2. Dilution by tarnishment
• harms the reputation
• linked to products of shoddy quality or portrayed in
an unsavory context
• example use of levi's in cigarettes or adult material
Note:
By contrast to trademark infringement, THE INJURY FROM
DILUTION USUALLY OCCURS WHEN CONSUMERS
AREN'T CONFUSED ABOUT THE SOURCE OF A
PRODUCT: Even if no one suspects that the maker of
analgesics has entered into the snowboard business, the
Tylenol mark will now bring to mind two products, not one.
Whereas trademark law targets "interference with the source
signaling function" of trademarks, dilution protects owners
"from an appropriation of or free riding on" the substantial
investment that they have made in their marks. I.P. Lund
Trading ApS v. Kohler Co., 163 F.3d 27, 50 (1st Cir.1998).
LEVI STRAUSS V. CLINTON APPARELLE, G.R. NO.
138900, SEPTEMBER 20, 2005
Levi Strauss is the owner of the Dockers and Design
trademark, used on various clothing apparel. This trademark is
registered in PH. Apparelle was selling Paddocks (pants) which
allegedly bears a similar appearance to the Dockers logo. Levi
prays for an injunction based on the need to protect its mark
from dilution.
Held:
• Trademark dilution is the lessening of the capacity
of a famous mark to identify and distinguish goods
or services, regardless of the presence or absence of:
1. competition between the owner of the famous mark
and other parties; or
2. likelihood of confusion, mistake or deception.
• Subject to the principles of equity, the owner of a famous
mark is entitled to an injunction “against another
person’s commercial use in commerce of a mark or
trade name, if such use begins after the mark has
become famous and causes dilution of the
distinctive quality of the mark.”
• This is intended to protect famous marks from subsequent
uses that blur distinctiveness of the mark or tarnish or
disparage it.
• To be eligible for protection from dilution, there has to be
a finding that:
1. the trademark sought to be protected is famous and
distinctive;
Page 65
2. the use by respondent of “Paddocks and Design”
began after the petitioners’ mark became
famous; and
3. such subsequent use defames petitioners’ mark.
In the case at bar, petitioners have yet to establish
whether “Dockers and Design” has acquired a strong
degree of distinctiveness and whether the other two
elements are present for their cause to fall within the
ambit of the invoked protection.
 2. Discredit a competitor
UNFAIR COMPETITION 3. Mislead the public

I. CONCEPT OF UNFAIR COMPETITION

B. COPYRIGHT, PATENT & TRADEMARK
COMPARED WITH UNFAIR COMPETITION
A. BASIS AND THEORY OF UNFAIR ACTS
CHAPTER 1 (PART I. INTRODUCTION), UNFAIR
B.1. INTERNATIONAL NEWS SERVICE V. ASSOCIATED
COMPETITION, MCCARTHY
PRESS, 248 US 215 (1918)
BREAKFAST WITH BATMAN, JESSICA LITMAN
Two competing United States news services were in the
(see articles)
business of reporting in the US. Their business hinged on
getting fast and accurate reports published. International News
ARTICLE 10BIS PARIS CONVENTION
Service gained access to Associated Press news through
bribery, news bulletin boards and early editions of newspapers.
Article 10bis
INS members would rewrite the news and publish it as their
Unfair Competition
own, without attribution. The AP brought an action seeking to
1. The countries of the Union are bound to assure to
enjoin INS from copying news.
nationals of such countries effective protection against
unfair competition.
Held:
2. Any act of competition contrary to honest practices in
• The question here is not so much the rights of either party
industrial or commercial matters constitutes an act of
as against the public, but their rights as between
unfair competition.
themselves. And, although we may and do assume that
3. The following in particular shall be prohibited:
neither party has any remaining property interest as
i. all acts of such a nature as to create confusion
against the public in uncopyrighted news matter after the
by any means whatever with the establishment,
moment of its first publication, it by no means follows
the goods, or the industrial or commercial
that there is no remaining property interest in it as
activities, of a competitor;
between themselves. For, to both of them alike,
ii. false allegations in the course of trade of
news matter, however little susceptible of
such a nature as to discredit the establishment,
ownership or dominion is stock in trade, to be
the goods, or the industrial or commercial
gathered at the cost of the enterprise, organization, skill,
activities, of a competitor;
labor, and money, and to be distributed and sold to those
iii. indications or allegations the use of which in the
who will pay money for it, as for any other merchandise.
course of trade is liable to mislead the public as
o As between the parties, news is regarded as
to the nature, the manufacturing process, the
quasi-property, irrespective of the rights as
characteristics, the suitability for their purpose, or
against the public.
the quantity, of the goods.
o The news has an exchange value to one who can
misappropriate it.
• The right to acquire property by honest labor or the
Class notes:
conduct of a lawful business is as much entitled to
Benefits of competition
protection as the right to guard property already acquired.
• For the seller? More consumers
It is this right that furnishes the basis of the jurisdiction in
• For the buyer? More options
the ordinary case of unfair competition.
• Is monopoly bad? How about monopoly obtained through
your own efforts - not bad! But this does not mean that
• ABSENCE OF PALMING OFF: Unfair competition is not
competition is gone, this shows that you are winning the
confined to that class of cases.
competition
• Regarding news matter as the mere material from which
• Imitation is the life blood of competition
these two competing parties are endeavoring to make
• In competition, copying/sharing is the rule and intellectual
money, and treating it therefore as quasi-property for
property rights are the exception
the purposes of their business because they are
o Example: Loubotin - lower court ruled against
both selling it as such, defendant's conduct differs from
monopoly over the red sole
the ordinary case of unfair competition in trade principally
in this -- that, instead of selling its own goods as
What we are looking for is the unrestrained interaction of
those of complainant, IT SUBSTITUTES
competitive forces
MISAPPROPRIATION IN THE PLACE OF
MISREPRESENTATION, AND SELLS
Normal arguments
COMPLAINANT'S GOODS AS ITS OWN.
• IP owner - junior developers free ride, imitate
• There are also elements of imitation and of false
• Second comer - encourage competition, not limit
pretense in defendant’s practices.
consumer choice
ITC:
Unfair competition is a commercial tort (Article 10bis of
• Acts of defendant constitute unlawful interference with the
Paris Convention)
normal operation of complainant’s business precisely at
3 kinds of unfair competition:
the point where profit is to be reaped.
1. Confusion as to source
• the view we adopt does not result in giving to complainant

ADL Page 67
 the right to monopolize either the gathering or the Competition
distribution of the news, or, without complying with the Grant Monopoly to Does not grant a
copyright act, to prevent the reproduction of its news reward and monopoly
articles, but only postpones participation by encourage
complainant's competitor in the processes of investors
distribution and reproduction of news that it has Right Right to exclude, Against confusing
not gathered, and only to the extent necessary to not the right to consumers
prevent that competitor from reaping the fruits of make
complainant's efforts and expenditure, to the partial Enforceable The public Competitors
exclusion of complainant. and in violation of the principle against
that underlies the maxim "sic utere tuo," etc. Obtaining In accordance with Own efforts
• Defendant is "not entitled to take one word of the protection the requirements
information previously published without Term Limited No expiration
independently working out the matter for himself,
so as to arrive at the same result from the same
common sources of information, and the only use
that he can legitimately make of a previous B.3. REVIEW LA INSULAR CIGAR V. B.E. JAO OGE, G.R.
publication is to verify his own calculations and NO. 16588 (1921)
results when obtained."
Held:
•The essential elements of unfair competition
Class notes: are,
Filed several cases - one was copyright infringement, then
(1) that the person complained of shall have given
unfair competition
to his goods the general appearance of the
Copyright infringement claim failed
goods of the complaining party, either in
Copyright Unfair Competition
(a) the wrapping of the packages in which they
are contained, or the devices or words
Subject matter Literary and artistic Fruits of one’s efforts
thereon
expression
Right against Anyone, the public Between competitors
(b) or in any other feature of their appearance
which would be likely to influence
Issue to be Whether or not Whether the actions
purchasers to believe that the goods offered
determined copyrighted were unfair, does not
are those of the complaining party;
depend on any
property right but
(2) that the person complained of should have
clothed the goods with such appearance for the
more on the actions
purpose of deceiving the public and defrauding
the complaining party of his legitimate trade.
B.2. SEARS, ROEBUCK & CO. V. STIFEL CO., 376 US 225 • SC: the complaint before us exhibits both of those
(1964) elements with all necessary precision.
Stiffel secured design and mechanical patents for its “pole (1) we have the allegation that the label which the
lamp”. Sears then copied such design and put in the market a defendant is using on his packages of cigarettes
substantially identical lamp that consumers are confused as to closely imitates the label and mark of the plaintiff
its source. Stiffel then filed an action for unfair competition. (2) and the further allegation that the defendant is
The pole lamp is not covered by a patent. giving his cigarettes the appearance of the cigarettes
manufactured and offered for sale by the plaintiff.
Held:
• An unpatentable article, like an article on which the Trademark Unfair
patent has expired, is in the public domain, and Infringement Competition
may be made and sold by whoever chooses to do The common element in all of these
so. wrongs consists of the false
• What Sears did was to copy Stiffel's design and to sell representation to the public, by
lamps almost identical to those sold by Stiffel. This it had means of words, names, pictures or
every right to do under the federal patent laws. symbols, that the goods or business of
• That Stiffel originated the pole lamp and made it one man are the goods or business of
popular is immaterial. another.
• "Sharing in the goodwill of an unprotected by remedies - an award of damages, or double
patent or trademark is the exercise of a right damages
possessed by all -- and in the free exercise of which the - a perpetual injunction against the
consuming public is deeply interested." continuance of the injury
- prosecution of the offending party in
Class notes: a criminal action and its appropriate
• You can copy the product but you cannot pass off - penalty, which is somewhat heavier
specify mo yung origin in the case of infringement of a
trade-mark or trade-name than in
Patents Unfair case of unfair competition.
Registration Ownership and use means contrary to good faith by which he shall pass off
of the trademark the goods manufactured by him or in which he deals, or his
Intent No intent required Intent to deceive business, or services for those of the one having established
the public or such goodwill, or who shall commit any acts calculated to
defraud the produce said result, shall be guilty of unfair competition, and
competitor shall be subject to an action therefor.
required
168.3. In particular, and without in any way limiting the scope
of protection against unfair competition, the following shall be
B.4. REVIEW E. SPINNER & CO. V. NEUSS HESSLEIN deemed guilty of unfair competition:
CORP., 54 PHIL. 224 (1930)
(a) Any person, who is selling his goods and
B.5. REVIEW DEL MONTE V. COURT OF APPEALS, G.R. gives them the general appearance of
NO. 78325 (1990) goods of another manufacturer or dealer,
Del Monte and Philpack filed a case against Sunshine for either as to the goods themselves or in the
Infringement of Trademark and Unfair Competition because wrapping of the packages in which they are
Sunshine, which manufactures various kinds of sauces, uses a contained, or the devices or words
logo similar to Del Monte and uses Del Monte’s bottles bought thereon, or in any other feature of their
by it from junk shops. appearance, which would be likely to
influence purchasers to believe that the
TM infringement Unfair goods offered are those of a manufacturer
Competition or dealer, other than the actual
Wrong Unauthorized use Passing off of manufacturer or dealer, or who otherwise
committed of a mark one’s goods as clothes the goods with such appearance as
those of another shall deceive the public and defraud
Intent Fraudulent intent Fraudulent intent another of his legitimate trade, or any
is not necessary necessary subsequent vendor of such goods or any
Registration Prior registration a Registration is not agent of any vendor engaged in selling such
prerequisite necessary goods with a like purpose;
(b) Any person who by any artifice, or device, or
who employs any other means calculated to
induce the false belief that such person is
II. PHILIPPINE CASE LAW ON UNFAIR
offering the services of another who has
COMPETITION
identified such services in the mind of the
public; or
Class notes: (c) Any person who shall make any false
• Unfair Competition 168 and 169 statement in the course of trade or who
• Alhambra - 168 - passing off upon the public your shall commit any other act contrary to
goods as that of another good faith of a nature calculated to
• MA CLarke - UC and TM infringement can be filed discredit the goods, business or services of
simultaneously another.
• Dy Buncio - Should mislead the ordinary intelligent
buyer 168.4. The remedies provided by Sections 156, 157 and 161
• Ang Lieng - it is important to establish the acquisition shall apply mutatis mutandis. (Sec. 29, R.A. No. 166a)
of goodwill (difference with TM)

Act 666 of US Law 1. ALHAMBRA CIGAR V. MOJICA, 27 PHIL. 266 (1914)

Republic Act 166 compare with IP Code - almost the same
two kinds:
1. False designation of origin
2. False association
SECTION 168, IP CODE
Section 168. Unfair Competition, Rights, Regulation and
Remedies. - 168.1. A person who has identified in the mind
of the public the goods he manufactures or deals in, his
business or services from those of others, whether or not a
registered mark is employed, has a property right in the
goodwill of the said goods, business or services so identified,
which will be protected in the same manner as other property
rights.
168.2. Any person who shall employ deception or any other
Petitioner accused respondent of unfair competition in the sale
of cigars. The lower court said there was no unfair
competition and the SC agreed. Petitioner’s contention rest on
the use of the word Especiales, the fact that the cigars are
brown and of a similar shape and that it comes in a box and
that the cigars have bands around them.
Held:
• Unfair competition consists in passing off or
attempting to pass off upon the public the goods or
business of one person as and for the goods or
business of another.
• Any conduct the end and probable effect of which is
to deceive the public or pass off the goods or
business of one person as and for that of another,
constitutes actionable unfair competition.
• Unfair competition is a tort and a fraud.

ADL Page 69
• The basic principle is that no one has a right to dress up
his goods or otherwise represent them in such a manner
as to deceive an intending purchaser and induce him to
believe he is buying the goods of another.
• Actual or probable deception and confusion on the
part of customers by reason of defendant's
practices must always appear.
• Relief against unfair competition is properly afforded upon
the ground that one who has built up a good will and
reputation for his goods or business is entitled to
all the benefits therefrom. Such good will is
property and, like other property, is protected against
invasion.
• ACTUAL DECEPTION NOT REQUIRED: In order to
make it a case of unfair competition it is not necessary to
show that any person has been actually deceived by
defendant's conduct and lead to purchase his goods in the
belief that they are the goods of plaintiff, or to deal with
defendant thinking that he was dealing with plaintiff. It is
sufficient to show that such deception will be the
natural and probable result of defendant's acts.
• TRUE TEST OF UNFAIR COMPETITION: The true test
of unfair competition is whether the acts of defendant are
such as are calculated to deceive the ordinary buyer
making his purchases under the ordinary
conditions which prevail in the particular trade to
which the controversy relates.
• BUYERS: The class of purchasers who buy the particular
kind of article manufactured must be considered by
determining the question of probable deception.
• FRAUDULENT INTENT NEED NOT BE SHOWN WHEN
THE PROBABLE AND NECESSARY TENDENCY OF
CONDUCT IS TO DECEIVE: It is often said that a
fraudulent intent on the part of defendant to pass off his
goods or business as or for that of plaintiff is necessary to
constitute unfair competition. We think the better view is,
however, that an actual f raudulent intent need not be
shown where the necessary and probable tendency of
defendant's conduct is to deceive the public and pass off
his goods or business as and for that of another.
o Even if resemblance is accidental and not
intentional, plaintiff is entitled to
protection against its injurious results to
trade.
2. M.A. CLARKE VS. MANILA CANDY CO., 36 PHIL. 100
(1917)
MA Clarke filed a complaint against Manila Candy for technical
trademark infringement and unfair competition. MA Clarke
alleged that it has been using its trademark (a rooster) on it
candy products as early as 1905. Manila Candy, whose two
directors came from MA Clarke, has used the same mark (but
used two roosters) in its products which are candies as well.
Plaintiff applied for a temporary injunction from the court,
having as basis both infringement of trademark and unfair
competition.
Held:
• COMPLAINT CAN BE BASED BOTH ON TM
INFRINGEMENT AND UNFAIR COMPETITION: A
prayer for an injunction forbidding the use of a
specific emblem or design and for damages for its
use may properly rest upon allegations of a
technical infringement of a trademark united in the
same complaint with allegations of unfair
competition.
o Cases may well arise wherein the conduct
complained of constitutes a wrong under either
theory, or wherein the complainant may be
satisfied that he can establish his right to relief
under one or the other theory, though he is in
doubt as to which theory will prove acceptable to
the court.
• Plaintiff may set forth in his complaint as many
distinct causes of action as he may deem proper.
• Alhambra: a clear distinction must be drawn under our
statute between actions for infringement and actions for
unfair competition, in that under our statute, evidence
sufficient to justify relief upon one or the other theory
necessitates the grant of relief upon that theory and
precludes the grant of relief under the other;
o SC: But this does not mean that the
plaintiff, in cases of this kind, may not
allege in support of his prayer for relief
facts which he believes will establish his
claim that there has been either an
infringement or unfair competition.
o This section (unfair competition) applies in cases
where the deceitful appearance of the goods,
misleading as to origin or ownership, is effected
not by means of technical trademarks,
emblems, signs, or devices, but by the
GENERAL APPEARANCE OF THE PACKAGE
containing the goods, or by the DEVICES OR
WORDS THEREON, even though such
packages, devices, or words are not by law
capable of appropriation as trademarks."
ITC:
• No proof that plaintiff’s candy has become known to the
trade as Manoc candy, or that defendant is selling its
candy as Manoc candy, or that its candies are sold in retail
under that name. Thus, there is no technical
infringement (devices are dissimilar in so many
respects as to preclude a finding that the device of
the defendant is a reproduction or a colorable
imitation of plaintiff’s trademark).
• But there is unfair competition:
o Two of defendant’s employees were former
employees of petitioner.
o With all the birds in the air, and all the fishes in
the sea, and all the animals on the face of the
earth to choose f rom, the def endant company
selected two roosters as its trademark, although
its directors and managers must have been well
aware of the longcontinued use of a rooster by
the plaintiff.
o Defendant knew that the use of a single rooster
would be prohibited as a technical infringement
of plaintiff's trademark, but it hoped that it could
avoid that danger by the use of two roosters;
and at the same time get such advantage as it
must have believed it could secure from the use
of a design on the containers of its goods, not
absolutely identical with that used by the
plaintiff, but so similar in the dominant idea as to
confuse or mislead the purchasers.
o The predominant idea conveyed to the
mind by use of the trademark (two
roosters) is substantially identical with that
conveyed to the mind by the use of the
 single rooster by the plaintiff as his
trademark.
The fact that defendant used two
roosters, and that these roosters, unlike
the rooster in plaintiff's trademark, are
highly colored, and the further fact that
the words "Manila Candy Co., Ltd." are
used in connection with defendant's
trademark, are wholly insufficient to
relieve the design used by the
defendant.
3. DY BUNCIO V. TAN TIAO BOK, 42 PHIL. 190 (1921)
Dy Buncio, a tea merchant, filed a case to enjoin defendant
from selling tea in this market in packages and with wrappers
of a design allegedly similar or closely resembling those sold by
plaintiff.
Held:
• Some resemblance there undoubtedly is, but in our
opinion it is not such as would naturally lead intending
purchasers to believe that the goods offered by the
defendant are the same as are sold by the plaintiff. The
only individual who in our opinion would be likely
to take notice of these resemblances, on having his
attention directed to the packages, is the one who
is unfamiliar with either.
• TEST OF FRAUDULENT SIMULATION: The test of
fraudulent simulation is to be found in the likelihood of
the deception of persons in some measure
acquainted with an established design and desirous
of purchasing the commodity with which that design
has been associated.
o The test is not found in the deception, or
possibility of the deception, of the person who
knows nothing about the design which has
been counterfeited, and who must be indifferent
as between that and the other.
o The simulation, in order to be objectionable,
must be such as appears likely to mislead the
ordinarily intelligent buyer who has a need
to supply and is familiar with the article
that he seeks to purchase.
• Conventional style and size of the package adopted
by tea merchants generally – same as all other
merchants
• Articles supplying the simplest human needs, such
as matches, cigarettes, and certain foodstuffs, are
marketed in conventional containers of appropriate
size and of a design made almost uniform.
ITC:
• No unfair competition.
• In the case under consideration, the resemblances that
have been pointed out between the designs of the two
litigants in this case are not in our opinion sufficient to
mislead a person acquainted with plaintiff’s design.
• Escolta.
4. ANG SI HENG V. WELLINGTON DEPT. STORE, 92
PHIL. 448 (1953)
Wellington is engaged in the business of manufacturing articles
of clothing with a trademark registration “Wellington.” It was
ADL
not proved however that it was renewed after 1938 nor their
trade name after 1946. In 1946, Chua was able to register his
business name “Wellington Department Store.” Wellington filed
a case for unfair competition alleging that public is deceived
into buying Chua’s goods believing it was his. The issue is
WON there is unfair competition.
Held:
• In order to determine whether defendants are liable in this
respect and have deceived the public into believing that
the goods they sell are of plaintiffs' manufacture or
proceed from the same source as plaintiffs' goods, all the
surrounding circumstances must be taken into account,
especially the identity or similarity of names, the identity
or similarity of their business, how far the names are a
true description of the kind and quality of the articles
manufactured or the business carried on, the extent of the
confusion which may be created or produced, the distance
between the place of business of one and the other party,
etc.
• Even a name or phrase not capable of appropriation
as trademark or tradename may, by long and
exclusive use by a business with reference thereto or
to its products, acquire a proprietary connotation, such
that the name or phrase to the purchasing public becomes
associated with the business or the products and entitled
to protection against unfair competition.
o The evidence submitted by the appellants did
not prove that their business has continued
for so long a time that it has become of
consequence and acquired a goodwill of
considerable value, such that its articles and
products have acquired a well-known reputation,
and confusion will result by the use of the
disputed name by the defendants' department
store.
o It is not, however, competition that the law
seeks to prevent, but unfair competition,
wherein a newcomer in business tries to
grab or steal away the reputation or
goodwill of the business of another.
ITC:
• While there is similarity between the trademark or
tradename "Wellington Company" and that of "Wellington
Department Store," no confusion or deception can possibly
result or arise from such similarity because the latter is a
"department store," while the former does not purport to
be so.
• Neither can the public be said to be deceived into the
belief that the goods being sold in defendant's store
originate from the plaintiffs, because the evidence shows
that defendant's store sells no shirts or wear bear ing the
trademark "Wellington," but other trademarks.
• Neither could such deception be by any possibility
produced because defendant's store is situated on the
Escolta, while plaintiffs' store or place of business is
located in another business district far away from the
Class notes:
Do you need goodwill for there to be confusion? Yes. You need
to establish goodwill.
Page 71
5. SHELL COMPANY V. INSULAR PETROLEUM, G.R. NO.
L-19441 (1964)
Shell is an oil corporation. Insular processes lubricating oil and
sells low-grade oil. In selling, Insular uses containers of other
oil companies. In normal transactions, the name of the original
company (origin of container) is erased. In this isolated
transaction, the name of Shell was not removed. The issue is
whether there is unfair competition.
Held:
• To hold a defendant guilty of unfair competition, no less
than satisfactory and convincing evidence is essential,
showing that the defendant has
Class notes:
• To hold a defendant guilty of unfair competition, no less
than satisfactory and convincing evidence is essential,
showing that the defendant has passed of or attempted to
pass off his own goods as those of another and that the
customer was deceived with respect to the origin of the
goods. In other words, the inherent element of unfair
competition is fraud or deceit.
• Not just because a manufacturer used a container still
bearing a competitor's marking in the sale of one's
products, IRRESPECTIVE OF TO WHOM AND HOW
THE SALE IS MADE, can there be a conclusion that the
buying public has been misled or will be misled, and,
therefore, unfair competition is born.
o In all transactions of the low-grade oil, except
the present one, all the marks and brands on the
containers used were erased or obliterated.
o The drum did not reach the buying public. It
was merely a Shell dealer who purchased
the drum not to be resold to the public, but to
be sold to petitioner with the view of obtaining
evidence against defendant.
o No representation was made that defendant was
selling Shell oil, as evidenced by the receipt
issued.
o In all other cases involving containers,
wrappers, etc., the containers, wrappers,
etc. reached the hands of the ultimate
consumer, so battled, wrapped, packaged
or marked.
o It is the form in which the wares or
products come to the ultimate consumer
that was significant.
• If petitioner's dealers pass off Insoil oil as Shell oil, that is
their responsibility. If there was any such effort to deceive
the public, the dealers to whom the defendant
(respondent) sold its products and not the latter, were
legally responsible f or such deception.
6. REPUBLIC GAS V. PETRON CORPORATION, G.R. NO.
194062, JUNE 17, 2013
Petron and Shell were producers of LPG (Gasul and Shellane).
Petron and Shell sued Republic Gas, an entity engaged in the
business of refilling, buying, and selling LPG, for trademark
infringement and unfair competition, on the ground that
Republic is engaged in refilling LPG cylinders bearing the
registered trademarks and tradenames of Petron and Shell.
Held:
Trademark Infringement
• The mere unauthorized use of a container bearing a
registered trademark in connection with the sale,
distribution or advertising of goods or services which is
likely to cause confusion, mistake or deception
among the buyers or consumers can be considered as
trademark infringement.
o Here, petitioners have actually committed
trademark infringement when they refilled,
without the respondents’ consent, the LPG
containers bearing the registered marks of the
respondents.
o Petitioners’ acts will inevitably confuse the
consuming public, since they have no way of
knowing that the gas contained in the LPG tanks
bearing respondents’ marks is in reality not the
latter’s LPG product after the same had been
illegally refilled. The public will then be led to
believe that petitioners are authorized refillers
and distributors of respondents’ LPG products,
considering that they are accepting empty
containers of respondents and refilling them for
resale.
Unfair Competition
• Passing off or palming off takes place where the
defendant, by imitative devices on the GENERAL
APPEARANCE of the goods, misleads prospective
purchasers into buying his merchandise under the
impression that they are buying that of his competitors.
o By refilling and selling LPG cylinders bearing their
registered marks, petitioners are selling goods by
giving them the general appearance of goods of
another manufacturer.
o Mere use of LPG cylinders bearing the TMs will
give the LPGs sold by REGASCO the general
appearance of the products of the petitioners.
7. MCDONALD’S CORP. V. L.C. BIG MAK, 480 PHIL. 402
(2004)
Mcdo is a corporation which owns a family of marks including
“BIC MAC” for its sandwiches. LC Big Mak is a domestic
corporation also in the fastfood business which applied for the
registration of “BIG MAK”. This was opposed by Mcdo but
receiving no reply therefrom, Mcdo filed a case with the RTC
for trademark infringement and unfair competition. The trial
court ruled that there is trademark infringement and unfair
competition on the ground that the choice of mark by
defendant herein is not merely for sentimental reasons but was
clearly to take advantage of the reputation, popularity and the
established goodwill of McDo. CA reversed the judgment on
the ground that there is no colorable imitation as it is not
sufficient that a similarity exists in both names but more
importantly, the overall presentation or in their essential,
substantive and distinctive parts.
Held:
Confusion of business and confusion of goods
• Respondents assert that their Big Mak hamburgers cater
mainly to the low-income group while petitioners’ Big Mac
hamburgers cater to the middle and upper income groups.
Even if this is true, the likelihood of confusion of business
remains, since the low-income group might be led to
believe that the Big Mak hamburgers are the low-end
hamburgers marketed by petitioners.
• The registered trademark owner may use his mark on the
same or similar products, in different segments of the
 market, and at different price levels depending on
variations of the products for specific segments of the
market. The Court has recognized that the registered
trademark owner enjoys protection in product and market
areas that are normal potential expansion of his business.
Dominancy Test
• Applying the dominancy test, the Court finds that 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 letter, 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.
Unfair Competition
• The essential elements of an action for unfair competition
are:
a. Confusing similarity in the general
appearance of the goods
i. May or may not result from the
similarity in the marks, but may
result from OTHER EXTERNAL
FACTORS in the packaging or
presentation of the goods
b. Intent to deceive the public and
defraud a competitor
i. 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 our 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.
ITC:
• The dissimilarities in the packaging are minor compared to
the stark similarities in the words that give LC’s Big Mak
hamburgers the general appearance of McDo’s Big Mac
hamburgers.
• Section 29(a) expressly provides that the similarity in the
general appearance of the goods may be in the “devices
or words” used on the wrappings.
o Respondents have applied on their plastic
wrappers and bags almost the same words that
petitioners use on their styrofoam box. What
attracts the attention of the buying public are the
words “Big Mak” which are almost the same,
ADL
aurally and visually, as the words “Big Mac.”
The dissimilarities in the material and other
devices are insignificant compared to the
glaring similarity in the words used in the
wrappings.
• Respondents’ goods are hamburgers which are also
the goods of petitioners. If respondents sold egg
sandwiches only instead of hamburger sandwiches, their
use of the “Big Mak” mark would not give their goods the
general appearance of petitioners’ “Big Mac” hamburgers.
o In such case, there is only trademark
infringement but no unfair competition.
o However, since respondents chose to apply
the “Big Mak” mark on hamburgers, just like
petitioner’s use of the “Big Mac” mark on
hamburgers, respondents have obviously clothed
their goods with the general appearance of
petitioners’ goods.
o there is no notice to the public that the “Big Mak”
hamburgers are products of “L.C. Big Mak
Burger, Inc.” - petitioners introduced during the
injunctive hearings plastic wrappers and bags
with the “Big Mak” mark without the name “L.C.
Big Mak Burger, Inc.”
o Had respondents’ placed a notice on their
plastic wrappers and bags that the
hamburgers are sold by “L.C. Big Mak
Burger, Inc.”, then they could validly claim
that they did not intend to deceive the
public. In such case, there is only
trademark infringement but no unfair
competition.
8. COCA-COLA BOTTLERS V. GOMEZ, G.R. NO. 154491
(2008)
Coca-cola applied for a search w arrant against Pepsi for
hoarding empty Coke bottles. Coca-cola cited Section
168.3(c) 4 as the specific offense imputed against the
respondents. M TC granted the application and
subsequently issued a search warrant. Local police then
confiscated and seized the items. Respondents filed a motion
for the return of Pepsi’s confiscated shells, and (more
importantly) a motion to quash the search warrant. RTC held
that the search w arrant is void for lack of probable
cause and the non-com m ission of the crim e of unfair
com petition. The issue in this case is whether or not the
issuance of the search warrant is valid, taking into
consideration that its application effectively charged an offense
for violation of Sec. 168.3(c) of the IP Code (sim ply put, is
hoarding em pty bottles considered an offense under
the I P Code?).
Held:
• The law does NOT cover every unfair act committed
in the course of business; it covers only acts
characterized by "deception or any other means contrary
to good faith" in the passing off of goods and services as
those of another who has established goodwill in relation
with these goods or services, or any other act calculated
4
(c) Any person who shall make any false statement in the
course of trade or who shall commit any other act contrary to
good faith of a nature calculated to discredit the goods,
business or services of another.
Page 73
 to produce the same result.
• "True Test" of unfair competition: whether the acts of
defendant are such as are calculated to deceive the
ordinary buyer making his purchases under the ordinary
conditions which prevail in the particular trade to which
the controversy relates
o In short, deception, passing off and fraud upon
the public are still the key elements that must
be present for unfair competition to exist.
• Critical question is not the intrinsic unfairness of the act of
hoarding BUT if the hoarding, as charged, "is of a
nature calculated to discredit the goods, business or
services" of Coca-Cola
• Hoarding as defined by Coca-cola is NOT even an
act within the contemplation of the IP Code.
• TESTS WHETHER OR NOT A MATTER IS COVERED
BY THE IP CODE
1. WON it refers to an intellectual property as
defined in the Code. 5 If it does not, then coverage by
the Code may be negated
2. WON it falls under the general "unfair
competition" concept and definition under
Sections 168.1 and 168.2 of the Code. (whether
there is "deception" or any other similar act in
"passing off" of goods or services to be those of
another who enjoys established goodwill)
ANALYSIS OF THE DIFFERENT SECTIONS INVOLVING
UNFAIR COMPETITION
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 refers to the general definition of unfair
competition
Section 168.3 refers to the specific instances of unfair
competition, with Section 168.1 referring to the sale of
goods given the appearance of the goods of another
Section 168.2 refers to the inducement of belief that his or
her goods or services are that of another who has earned
goodwill
Section 168.3 being a "catch all" clause whose coverage the
parties now dispute
• Hoarding does not fall within the coverage of the ip
code and of sec. 168
o 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 Coca-Cola.
o The respondents are not fraudulently
"passing off" their products or services as
those of the Coca-Cola.
o 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.
o Matter is more properly covered by RA 623 (AN
ACT TO REGULATE THE USE OF DULY STAMPED
5
a) Copyright and Related Rights; b) Trademarks and Service
Marks; c) Geographic Indications; d) Industrial Designs; e)
Patents; f) Layout-Designs (Topographies) of Integrated
Circuits; and g) Protection of Undisclosed Information
OR MARKED BOTTLES, BOXES, CASKS, KEGS,
BARRELS AND OTHER SIMILAR CONTAINERS)
under its Section 2, it speaks specifically
of unlawful use of containers and even
of the unlawfulness of their wanton
destruction - a matter that escapes the
IP Code's generalities unless linked with
the concepts of "deception" and
"passing off"
Class notes:
• Limited to IP-related unfair competition, not every unfair
act
• But in the paris convention there are three types of unfair
competition
9. SUPERIOR COMMERCIAL ENTERPRISES V. KUNNAN,
G.R. NO. 169974 (2010)
Superior sued Kunnan for trademark infringement and unfair
competition on the trademark “KENNEX”, “KENNEX & DEVICE”,
“PRO KENNEX” and “PRO-KENNEX”. Superior is the registered
owner of the trademarks but Kunnan disputed the ownership
due to fraud by Superior. Kunnan was deceived that it was not
qualified to hold the trademarks. The two parties entered into
a distributorship agreement wherein Superior will be the
exclusive distributor of Kunnan products. It was stipulated that
Superior will assign the trademark “Kennex” in favor of
Kunnan. Superior did not comply and Kunnan appointed Sports
Concept as distributor.
Held:
Unfair Competition
• Essential element:
1. Confusing similarity in the general appearance of the
goods;
2. Intent to deceive the public and defraud a competitor
• TRUE TEST: whether the acts of the defendant have the
intent of deceiving or are calculated to deceive the
ordinary buyer making his purchases under the ordinary
conditions of the particular trade to which the controversy
relates.
• One of the essential requisites in an action to
restrain unfair competition is PROOF OF FRAUD;
THE INTENT TO DECEIVE, ACTUAL OR PROBABLE
MUST BE SHOWN BEFORE THE RIGHT TO RECOVER
CAN EXIST.
Trademark infringement without unfair competition
• There can be trademark infringement without
unfair competition such 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.
o In this case, no issue of confusion arises because
the same manufactured products are sold; only
the ownership of the trademarks is at
issue.
ITC:
• No evidence of attempt to pass off goods.
• No evidence of bad faith or fraud.
Infringement
• Superior, being a mere distributor, is not the owner of
 the mark and cannot assert any protection from
trademark infringement as it had no right in the first
place to the registration of the disputed trademark.
• Registration of the trademark by the distributor as
such belongs to the manufacturer, provided the
fiduciary relationship does not terminate before
application for registration is filed.

10. SHANG PROPERTIES V. ST. FRANCIS DEV’T CORP.,

G.R. NO. 190706, JULY 21, 2014

Held:
• The element of fraud is wanting. Hence, there can be no
unfair competition.
• Petitioner had not established goodwill for the mark
ST. FRANCIS.
• Respondents did not give their goods/services the
general appearance that it was respondent which
was offering the same to the public.

ADL Page 75

III. OTHER TYPES OF UNFAIR COMPETITION
A. SECTION 169 (A), IP CODE
• PASSING-OFF
• FALSE ENDORCEMENT AND RIGHT OF PUBLICITY
Section 169. False Designations of Origin; False Description
or Representation. - 169.1. Any person who:
• on or in connection with any goods or services, or any
container for goods,
• uses in commerce
• any word, term, name, symbol, or device, or any
combination thereof, or any false designation of
origin, false or misleading description of fact, or false
or misleading representation of fact, which:
(a) Is likely to cause confusion, or to cause mistake, or to
deceive as to the [ACA] affiliation, connection, or association
of such person with another person, or as to the [OSA] origin,
sponsorship, or approval of his or her goods, services, or
commercial activities by another person;
PASSING-OFF
A.1. FEDERAL-MOGUL-BOWER BEARINGS, INC.
AZOFF, 313 F.2D 405 (1963)
Plaintiff, engaged in the business of manufacturing engine
bearings, alleged that defendant sold and distributed the
latter’s products in packages and containers similar to those
used by the former. The trial court ruled that there is no
misrepresentation as to origin because origin merely pertains
to geographical origin.
Held:
• The word “origin” in the Act does not merely refer
to geographical origin, but also to origin of source
or manufacture.
• The allegations (1) that appellees sold, transported
products in packages and containers which imitate those
of the appellant’s as to falsely represent them to be the
appellant’s goods and (2) that appellees deliberately
adopted the imitative packages and containers with an
intent to deceive the trade and public into confusing the
goods with those of appellant, and (3) that they falsely
represented that their (appellees’) goods were those of
appellants, are allegations, which in the Court’s opinion
charge a false description or misrepresentation, as those
terms are used in the statute
• "The intent of Congress in passing the Act is set forth in
the final paragraph of Section 1127. Only one phrase of
that paragraph fails to use the word `mark'. And that
phrase (`to protect persons engaged in such
commerce against unfair competition') must in
such a context be construed to refer not to any
competitive practice which in the broad meaning of
the words might be called unfair, but to that `unfair
competition' which has been closely associated
with the misuse of trademarks, i. e., the passing off
of one's goods as those of a competitor.
o the primary purpose of the Act was to eliminate
deceitful practices in interstate commerce
involving the misuse of trade-marks, but along
with this it sought to eliminate other forms of
misrepresentations which are of the same
general character even though they do not
involve any use of what can technically be called
a trademark.
A.2. L’AIGLON APPAREL, INC. V. LANA LOBELL, INC.,
214 F.2D 649 (1954)
Plaintiff, a manufacturer, and defendant, a retailer, are both in
the dress industry. The case started when defendant
advertised its goods using a picture of plaintiff’s dress.
Defendant’s dress is different in appearance costs much lower
than that produced by plaintiff. Plaintiff filed a case of unfair
competition. The defendant sought to dismiss the case on the
ground that there was no cause of action, which is also the
issue in the case.
Held:
• No limitation appears on the face of Section 43(a) and
none can properly be imposed which would make the
present complaint an insufficient statement of a cause of
action under that section.
• Unfair competition cases under the Lanham Act is not
limited to cases where misrepresentations about goods
were actionable only if they had led or were likely to lead
customers, through confusion of defendant's and plaintiff's
goods, to buy the former under the misapprehension that
V. they were the latter.
• Traditional concept of “palming off” has been expanded by
the current definition.
Class notes:
• what was missing was the likelihood of confusion with
respect to the ACTUAL DRESS
• passing off must be made on the good itself
• this case would not be upheld under sec 168 of IP
Code (Angel: Pwede siguro Sec 169 (b) under false
advertising
A.3. DASTAR CORP. V. TWENTIETH CENTURY FOX FILM
CORP., 539 U.S. 23 (2003)
Doubleday published Eisenhower’s Crusade in Europe and
granted television rights to respondent 20th Century Fox.
Respondent arranged for Time to produce a television series
based on the book. The book’s copyright was renewed but the
copyright on the television series expired and was not
renewed. Petitioner Dastar released television tapes made
from the tapes of the original version of the Crusade television
series and sold as its own product for substantially less than
the original videoset. Respondents sued petitioner for “reverse
passing off.” 6
Held:
• Section 43(a) 7 of the Lanham Act does not prevent the
unaccredited copying of an uncopyrighted work.
• Respondents’ claim that Dastar has made a “false
designation of origin, false or misleading description of
6
“Passing off” occurs when a producer misrepresents his own
goods or services as someone else’s. “Reverse passing off” is
the opposite: the producer misrepresents someone else’s goods
or services as his own.
7
Creates a cause of action for traditional trademark
infringement of unregistered marks.
 fact, or false or misleading representation of fact, which . .
. is likely to cause confusion . . . as to the origin . . . of
[its] goods” would undoubtedly be sustained if
Dastar had bought some of New Line’s Crusade
videotapes and merely repackaged them as its
own.
o However, Dastar has instead taken a creative
work in the public domain, copied it, made
modifications (arguably minor), and
produced its very own series of videotapes.
Origin
• If “origin” refers only to the manufacturer or
producer of the physical “good” that is made available
to the public (here, the videotapes), Dastar was the
origin. If, however, “origin” includes the creator of the
underlying work that Dastar copied, then someone else
(perhaps Fox) was the origin of “goods.”
o The phrase “origin of goods” is in our view
incapable of connoting the person or entity that
originated the ideas or communications that
“goods” embody or contain.
• Because Dastar was the “origin” of the physical
products it sold as its own, respondents cannot
prevail on their Lanham Act claim.
• As dictionary definitions affirm, the most natural
understanding of the “origin” of “goods”—the
source of wares—is the producer of the tangible
product sold in the marketplace, here Dastar’s
Campaigns videotape. The phrase “origin of goods” in the
Lanham Act is incapable of connoting the person or entity
that originated the ideas that “goods” embody or contain.
• Had Fox renewed the copyright in the Crusade television
series, it would have had an easy claim of copyright
infringement.
FALSE ENDORSEMENT AND RIGHT OF PUBLICITY
A.4. SECTIONS 46-49, U.S. RESTATEMENT OF THE LAW
(THIRD), UNFAIR COMPETITION
Topic 3. Right Of Publicity
§ 46. Appropriation Of The Commercial Value Of A
Person's Identity: The Right Of Publicity
One who appropriates the commercial value of a person's
identity by using without consent the person's name, likeness,
or other indicia of identity for purposes of trade is subject to
liability for the relief appropriate under the rules stated in §§
48 and 49.
§ 47. Use For Purposes Of Trade
The name, likeness, and other indicia of a person's identity are
used “for purposes of trade” under the rule stated in § 46 if
they are used in advertising the user's goods or services,
or are placed on merchandise marketed by the user, or are
used in connection with services rendered by the user.
However, use “for purposes of trade” does not ordinarily
include the use of a person's identity in news reporting,
commentary, entertainment, works of fiction or
nonfiction, or in advertising that is incidental to such
uses.
§ 48. Injunctions: Appropriation Of The Commercial
Value Of A Person's Identity
ADL
(1) If appropriate under the rule stated in Subsection (2),
injunctive relief may be awarded to prevent a continuing or
threatened appropriation of the commercial value of another's
identity by one who is subject to liability under the rule stated
in § 46.
(2) The appropriateness and scope of injunctive relief depend
upon a comparative appraisal of all the factors of the case,
including the following primary factors:
a. the nature of the interest to be protected;
b. the nature and extent of the appropriation;
c. the relative adequacy to the plaintiff of an injunction
and of other remedies;
d. the relative harm likely to result to the legitimate
interests of the defendant if an injunction is granted
and to the legitimate interests of the plaintiff if an
injunction is denied;
e. the interests of third persons and of the public;
f. any unreasonable delay by the plaintiff in bringing
suit or otherwise asserting his or her rights;
g. any related misconduct on the part of the plaintiff;
and
h. the practicality of framing and enforcing the
injunction.
§ 49. Monetary Relief: Appropriation Of The
Commercial Value Of A Person's Identity
(1) One who is liable for an appropriation of the commercial
value of another's identity under the rule stated in § 46 is
liable for the pecuniary loss to the other caused by the
appropriation or for the actor's own pecuniary gain resulting
from the appropriation, whichever is greater, unless such relief
is precluded by an applicable statute or is otherwise
inappropriate under the rule stated in Subsection (2).
(2) Whether an award of monetary relief is appropriate and
the appropriate method of measuring such relief depend upon
a comparative appraisal of all the factors of the case, including
the following primary factors:
a. the degree of certainty with which the plaintiff has
established the fact and extent of the pecuniary loss or
the actor's pecuniary gain resulting from the
appropriation;
b. the nature and extent of the appropriation;
c. the relative adequacy to the plaintiff of other remedies;
d. the intent of the actor and whether the actor knew or
should have known that the conduct was unlawful;
e. any unreasonable delay by the plaintiff in bringing suit or
otherwise asserting his or her rights; and
f. any related misconduct on the part of the plaintiff.
Class notes:
• Why do courts not utilize 169? 169 is broader. Courts have
used 168 ever since
RIGHT OF PUBLICITY AND FALSE ENDOSEMENT
• violates also right to privacy
• right of publicity and right to privacy are opposites but the
right of publicity stemmed from the right to privacy
o famous people matatalo when they sue to
enforce right to privacy because they are
famous! private individuals mas may chance
o the cause of action of celebrities - right of
publicity - yan yung source nyan
Page 77
• "every human being has the inherent right to control the
commercial use of his identity"
• See US Restatement of Law of Unfair Competition
o there must be commercial value for the purpose
of trade
right of publicity elements:
1. valid persona that has value
2. defendant used the persona commercially
3. use is likely to damage the commercial value of the
persona
False Endorsement (Sec 169 of IP Code)
• False endorsement occurs when a celebrity's identity
is connected with a product
• IN FALSE ENDORSEMENT, THE ADVERTISING MUST
BE FALSE / THERE MUST BE FALSITY
o E.g. if someone puts kris aquino’s face on a mcdo
ad without Mcdo’s permission, BUT KRIS AQUINO
IS ACTUALLY ENDORSING MCDO, there would be
no false endorsement because there was no false
advertising – kris Aquino is an endorser of mcdo
o If kris aquino’s face is put on a Jollibee ad, there
would be false endorsement
• is that a requirement under the right to publicity? falsity
is not an element of right to publcity
Publicity
• persona
• no need for prior use
• whether it identifies the persona
• We dont have a statute on the right to publicity
o what statute can you use? false
endorsement - but there must be
falsity
o you can also sue for unjust enrichment
- civil case, better than nothing!
A.5. ALLEN V. NATIONAL VIDEO, INC., 610 F. SUPP.
612 (SDNY 1985)
Plaintiff sues over an advertisement for defendant National
Video (National) in which a guy named Boroff, allegedly
masquerading as the plaintiff (famous guy Woody Allen),
portrays a satisfied holder of National's movie rental V.I.P.
Card. Plaintiff Allen asserts that the advertisem ent
appropriates his face and im plies his endorsem ent, and
that it therefore violates his statutory right to privacy, his
right to publicity, and the federal Lanham Act's
prohibition of m isleading advertising. Defendants, while
conceding that Boroff looks remarkably like plaintiff, deny that
the advertisement appropriates plaintiff's likeness or that it
poses a likelihood of consumer confusion.
Held:
• The unauthorized use of a person’s name or
photograph in a manner that creates the false
impression that the party has endorsed a product
or service violates the Lanham Act.
o A celebrity has a similar commercial
investment in the "drawing power" of his
or her name and face in endorsing products
and in marketing a career. The celebrity's
investment depends upon the good will of the
public, and infringement of the celebrity's rights
also implicates the public's interest in being free
from deception when it relies on a public
figure's endorsement in an advertisement.
• Likelihood of confusion standard applied: This
inquiry requires the court to consider whether the look-
alike employed is sufficiently similar to plaintiff to create
such a likelihood—an inquiry much like that made in
cases involving similar, but not identical, trademarks.
• In order to be confused, a consumer need not
believe that the owner of the mark actually
produced the item and placed it on the market. The
public’s belief that the mark’s owner sponsored or
otherwise approved the use satisfies the confusion
requirement.
Likelihood of confusion
• In Standard and Poor's, the Second Circuit suggested six
factors for a court to consider in deciding the issue of
likelihood of confusion:
1. the strength of plaintiff's marks and name
2. the similarity of plaintiff's and defendant's
marks;
3. the proximity of plaintiff's and defendant's
products;
4. evidence of actual confusion as to source or
sponsorship;
5. sophistication of the defendant's audience; and
6. defendant's good or bad faith.
Disclaimer
• To be effective, a disclaimer would have to be bolder and
make clear that plaintiff in no way endorses National, its
products, or its services.
ITC:
There is a likelihood of confusion over plaintiff’s endorsement
or involvement.
1. strength – plaintiff’s name and likeness are well-
known
2. similarity – there is a resemblance between plaintiff
and the look-a-like
3. proximity of products – while plaintiff does not own a
video rental chain, he is involved in producing and
distributing his own motion pictures, and he is
strongly identified with movies in the public mind; the
audience of National Video’s ads is the same audience
to which plaintiff’s own commercial efforts are
directed
4. actual confusion – no evidence
5. sophistication of the relevant sector of the consuming
public – sophistication does not eliminate all likelihood
of confusion
6. good faith or bad faith – defendant aware of risk of
consumer confusion; no disclaimer on other ads;
disclaimer in one ad was so small and is unlikely to be
noticed by readers and disclaimer does not dispel the
impression that petitioner is involved with National’s
product or services
A.6. MIDLER V. FORD MOTORS, 849 F.2D 460 (1988)
Y&M, an advertising agency, together with Ford Motor
Company had 30 or 60 second tv commercials called the
Yuppie Campaign. Midler, a known singer, did not want to
participate in the said commercial so what Y&M did was to
enlist a sound alike to perform her song in the commercial.
After the commercial was aired Midler was told by "a number
of people" that it "sounded exactly" like her record of "Do You
Want To Dance." It is important to note that a voice is not
copyrightable as the sounds are not "fixed," that is why Midler
is suing for appropriation of her voice instead. Also, Midler is
not suing to prevent defendants from using the song, but only
from using what sounds like her voice.
Held:
Purpose of use
• The purpose of the media's use of a person's identity is
central.
o If the purpose is "informative or cultural" the use
is immune;
o "if it serves no such function but merely exploits
the individual portrayed, immunity will not be
granted."
No unfair competition
• One-minute commercials of the sort the defendants put on
would not have saturated Midler’s audience and curtailed
her market. Midler did not do television commercials. The
defendants were not in competition with her.
Voice
• The value of Midler’s voice is what the market would have
paid for Midler to have sung the commercial in person.
• A voice is as distinctive and personal as a face.
• A singer manifests herself in a song. To
impersonate her voice is to pirate her identity.
• When a distinctive voice of a professional singer is
widely known and is deliberately imitated in order to
sell a product, the sellers have appropriated what is
not theirs and have committed a tort.
A.7. WHITE V. SAMSUNG ELECTRONICS, 971 F.2D 1395
(1992)
Samsung ran an advertisement featuring a robotized Vanna
White in a Wheel of Fortune set. The ads were made without
White’s permission. White argues that the Samsung ads used
her “likeness.” White sued Samsung asseting her common law
right of publicity and under Section 43 (false endorsement) of
the Lanham Act.
Held:
• The common law right of publicity cause of action "may be
pleaded by alleging (1) the defendant's use of the
plaintiff's identity; (2) the appropriation of plaintiff's name
or likeness to defendant's advantage, commercially or
otherwise; (3) lack of consent; and (4) resulting injury.
• The common law right of publicity is not limited to
an appropriation of name or likeness.
o There may be appropriation of the
plaintiff’s identity, as by IMPERSONATION,
WITHOUT THE USE OF HIS/HER NAME OR
LIKENESS.
• The right of publicity does not require that
appropriations of identity be accomplished through
particular means to be actionable.
ITC:
• The ad meant to depict White.
ADL
• The robot is standing on what looks to be the Wheel of
Fortune game show set. Vanna White dresses like this,
turns letters, and does this on the Wheel of Fortune game
show. She is the only one. Indeed, defendants themselves
referred to their ad as the "Vanna White" ad.
Kozinski, dissenting
• Under the majority's opinion, it's now a tort for
advertisers to remind the public of a celebrity.
Not to use a celebrity's name, voice, signature or
likeness; not to imply the celebrity endorses a
product; but simply to evoke the celebrity's image in
the public's mind.
• The majority isn't, in fact, preventing the
"evisceration" of Vanna White's existing rights; it's
creating a new and much broader property right, a
right unknown in California law.
• Instead of having an exclusive right in her name,
likeness, signature or voice, every famous person
now has an exclusive right to anything that
reminds the viewer of her.
• It’s the Wheel of Fortune set, not the robot’s face or
dress or jewelry that evokes White’s image. The panel
is giving White an exclusive right not in what she
looks like or who she is, but in what she does for a
living.
Class notes:
• Unlike in Allen and Midler where consumers may be
confused, here clear yung differences
• Dissent: confusion/impression lies not in what she
looks but in what she does for a living
A.8. WENDT V. HOST INTERNATIONAL, INC., 125 F.3D
806 (1997) AND 197 F.3D 1284 (1999)
Host operated airport restaurants and bars. In such bars they
used robots resembling characters from CHEERS, (Norm and
Cliff). The actors who played the parts sued saying their right
to publicity was violated. Host, on the other hand, argued that
it already got licenses to make use of the characters
(Paramount owned the copyright rights to the characters
“Norm” and “Cliff,” which is distinct from the actors).
Held:
• A common law cause of action for appropriation of name
or likeness may be pleaded by alleging 1) the defendant's
use of the plaintiff's identity; 2) the appropriation of
plaintiff's name or likeness to defendant's advantage,
commercially or otherwise; 3) lack of consent; and 4)
resulting injury.
• While it is true that appellants' fame arose in large
part through their participation in Cheers, an actor
or actress does not lose the right to control the
commercial exploitation of his or her likeness by
portraying a fictional character.
Kozinski (dissenting):
• The conflict in White was hypothetical, since the
defendant (Samsung) did not have a license from the
Wheel of Fortune copyright holder. Here it is concrete:
The panel holds that licensed animatronic figures based
on the copyrighted Cheers characters Norm and Cliff
infringe on the rights of the actors who portrayed them.
• This case, unlike White, pits actor against copyright
Page 79
 holder.
• The presentation of the robots in the Cheers bars is a
derivative work, just like a TV clip, promotion,
photograph, poster, sequel or dramatic rendering of an
episode. Thus, under federal law, Host has the
unconditional right to present robots that resemble Norm
and Cliff.
• The right of publicity, as defined by the state courts, is
limited to using a celebrity's name, voice, face or
signature.
Class notes:
Difference with White: In white, the person portrayed is White.
here, the ones portrayed are characters. the defendant did not
copy the actors themselves
A.9. ROGERS V. GRIMALDI, 875 F.2D 994 (1989)
The issue in this case is whether Rogers can prevent the use of
the title “Ginger and Fred” for a fictional movie that only
obliquely relates to Rogers and Astaire. Petitioner sued
defendants alleging that the latter created a false impression
that the film was about her or that she sponsored, endorsed,
or was otherwise involved in the film and that the latter
violated her right of publicity.
Held:
• Titles, like the artistic works they identify, are of a hybrid
nature, combining artistic expression and commercial
promotion.
• Consumers of artistic works thus have a dual interest:
They have an interest in not being misled and they also
have an interest in enjoying the results of the author's
freedom of expression. For all these reasons, the
expressive element of titles requires more protection than
the labeling of ordinary commercial products.
• “no alternative means” of expressing what the work is
about standard – rejected by the court in this case –
provides insufficient leeway for literary expression.
• RULES:
o A misleading title with no artistic relevance
cannot be justified by a free expression interest.
o Titles with at least minimal artistic relevance
to the work may include explicit statements
about the content of the work that are seriously
misleading. work. As to such titles, the
consumer interest in avoiding deception is too
slight to warrant application of the Lanham Act.
Though consumers frequently look to the title of
a work to determine what it is about, they do not
regard titles of artistic works in the same way as
the names of ordinary commercial products.
o Where a title with at least some artistic
relevance to the work is not explicitly
misleading as to the content of the work, it
is not false advertising under the Lanham
Act.
Right of publicity
• Courts have balanced the right with First Amendment
concerns. Courts have refused to extend the right of
publicity to bar the use of a celebrity's name in the
title and text of a fictional or semi-fictional book or
movie.
• As long as the use of a celebrity's name was not
"wholly unrelated" to the individual nor used to
promote or endorse a collateral commercial
product, the right of publicity did not apply.
• The right of publicity did not bar the use of a celebrity's
name in a title so long as the item was a literary
work and not "simply a disguised commercial
advertisement for the sale of goods or services."
ITC:
• The title surpasses the minimum threshold of artistic
relevance.
• The title "Ginger and Fred" contains no explicit indication
that Rogers endorsed the film or had a role in producing
it.
Class notes:
example two actresses and the title is star wars
artistic relevance in choosing the title, does not indicate false
sponsorship or endorsement
some movies repeat their titles
NO COPYRIGHT ON TITLES
A.10. CARDTOONS, L.C. V. MAJOR LEAGUE BASEBALL
PLAYERS ASSOCIATION, 95 F.3D 959 (1996)
Cardtoons took steps to produce parody baseball trading cards
which contained images of major league baseball players. The
cards included seventy-one (71) players, twenty (20) Big Bank
Buck and ten (10) Spectra cards, part of its “Baseball Parody
Cards” set which depicted the likenesses and parody names of
active Major League Baseball players and some humorous
commentary on the players’ careers. Major League Baseball
Players Association on the other hand, is the official licensee of
all related paraphernalia relating to major league baseball,
including, but not limited to displaying the likeliness of Major
League players. Cardtoons sought to prevent MLBPA from
successfully stopping its production of the cards, invoking
protection under the First Amendment “right” to parody. 8
Held:
• A parody of a celebrity does not merely lampoon the
celebrity, but exposes the weakness of the idea or value
that the celebrity symbolizes in society.
• In order to effectively criticize society, parodists need
access to images that mean something to people,
and thus celebrity parodies are a valuable
communicative resource. Restricting the use of
celebrity identities restricts the communication of
ideas.
Justifications for the right of publicity
1. Economic
a. Provides an incentive for creativity and achievement
o Most sports and entertainment celebrities with
commercially valuable identities engage in
activities that themselves generate a significant
amount of income; the commercial value of their
identities is merely a by-product of their
performance values.
o The analogy to the incentive effect of other
intellectual property protections is strained
because "[a]bolition of the right of publicity
would leave entirely unimpaired a celebrity's
ability to earn a living from the activities that
8
Oklahoma's right of publicity statute, however, does not
provide a similar accommodation for parody as trademark and
copyright.
 have generated his commercially marketable B. SECTION 169 (B), IP CODE
fame." • FALSE AND MISLEADING ADVERTISING
o The argument that publicity rights provide • COMMERCIAL DISPARAGEMENT
valuable incentives is even less compelling in the • PUFFERY
context of celebrity parodies. Since celebrities • RIGHT OF ATTRIBUTION
will seldom give permission for their
identities to be parodied, granting them
control over the parodic use of their Section 169. False Designations of Origin; False Description
identities would not directly provide them or Representation. - 169.1. Any person who, on or in
with any additional income. connection with any goods or services, or any container for
b. Promotes the efficient allocation of resources (prevents goods, uses in commerce any word, term, name, symbol, or
exploitation of identities until the marginal value id zero; device, or any combination thereof, or any false designation of
preserves the value of the celebrity to advertisers) origin, false or misleading description of fact, or false or
• This argument is most persuasive in the context misleading representation of fact, which:
of advertising, where repeated use of a
celebrity's likeness to sell products may (b) In commercial advertising or promotion,
eventually diminish its commercial value misrepresents:
• The argument is not as persuasive, however, • the nature,
when applied to nonadvertising uses. • characteristics,
• Indeed, the value of the likeness may increase • qualities, or geographic origin
precisely because "everybody's got one." of his or her or another person's goods, services, or
2. Non-economic commercial activities, shall be liable to a civil action for
a. Natural rights damages and injunction provided in Sections 156 and 157 of
b. Allows celebrities to enjoy the fruits of their labors this Act by any person who believes that he or she is or is
• Celebrities, however, are often not fully likely to be damaged by such act.
responsible for their fame. Indeed, in the
entertainment industry, a celebrity's fame may ARTICLE 110-115 CONSUMER ACT OF THE
largely be the creation of the media or the PHILIPPINES
audience. (too long to paste here)
c. Prevention of unjust enrichment
• No social purpose is served by allowing others to ARTICLES II, IV AND V, “STANDARDS OF ADVERTISING
freely appropriate it. OF THE ADVERTISING STANDARDS COUNCIL”
• Cardtoons, however, is not merely hitching its (too long to paste here)
wagon to a star. As in all celebrity parodies,
Cardtoons added a significant creative
component of its own to the celebrity identity
FALSE AND MISLEADING ADVERTISING
and created an entirely new product.
d. Prevents emotional injuries
Class notes:
• Laws preventing unfair competition, such as the
Uses a false or misleading:
Lanham Act, and laws prohibiting the intentional
a. description of fact or
infliction of emotional distress adequately cover
b. representation of fact
that ground.
2. in commerce
3. in connection with goods or services
ITC:
• Cardtoons' expression requires use of player identities
Difference between false advertising and commercial
because, in addition to parodying the institution of
disparagement -
baseball, the cards also lampoon individual players.
• False advertising
• Further, Cardtoons' use of the trading card format is an
o occurs on your own goods or services
essential component of the parody because baseball cards
• Commercial disparagement
have traditionally been used to celebrate baseball players
o on your competitor's goods or services
and their accomplishments. Cardtoons expresses ideas
through the use of major league baseball player identities,
See Consumer Act and Standards of the Advertising Standards
and MLBPA's attempts to enjoin the parody thus goes to
Council
the content of the speech, not merely to its time, place, or
- separate provision on false advertising
manner.
• The application of the Oklahoma publicity rights statute to
B.1. COCA-COLA V. TROPICANA, 690 F.2D 312 (1982)
Cardtoons' trading cards presents a classic case of
Tropicana aired a TV commercial wherein Jenner, a popular
overprotection. Little is to be gained, and much lost, by
athlete, was seen squeezing an orange while stating that the
protecting MLBPA's right to control the use of its members'
pure, pasteurized juice comes from an orange and that the
identities in parody trading cards. The justifications for the
juice is not made from concentrate and water. Coke, who is in
right of publicity are not nearly as compelling as those
direct competition with Tropicana, filed suit against the latter
offered for other forms of intellectual property, and are
for false advertising. Coke claimed the commercial is false
particularly unpersuasive in the case of celebrity parodies.
because it incorrectly represents that Premium Pack contains

ADL Page 81
unprocessed, fresh-squeezed juice when in fact the juice is
pasteurized (heated) and sometimes frozen prior to packaging.
Held:
Irreparable injury
• Perhaps the most difficult element to demonstrate when
seeking an injunction against false advertising is the
likelihood that one will suffer irreparable harm if the
injunction does not issue.
• It is virtually impossible to prove that so much of
one's sales will be lost or that one's goodwill will
be damaged as a direct result of a competitor's
advertisement. Too many market variables enter into
the advertising-sales equation.
o A Lanham Act plaintiff who can prove actual lost
sales may obtain an injunction even if most of his
sales decline is attributable to factors other than
a competitor's false advertising.
o The Lanham Act plaintiff must, however, offer
something more than a mere subjective belief
that he is likely to be injured as a result of the
false advertising; he must submit proof which
provides a reasonable basis for that belief.
• Vidal Sassoon and Johnson & Johnson cases; Sales of the
plaintiffs' products would probably be harmed if the
competing products' advertising tended to mislead
consumers in the manner alleged.
o Market studies were used as proof that
consumers were misled.
o ITC, if consumers are misled by Tropicana's
commercial, Coca-Cola probably would suffer
irreparable injury. Tropicana and Coca-Cola are
the leading national competitors for the chilled
(ready-to-serve) orange juice market.
Consumer reaction survey confirmed
this.
False description or representation; explicit v. implicit falsity
• When a merchandising statement or representation is
LITERALLY OR EXPLICITLY FALSE, the court may
grant relief without reference to the advertisement's
impact on the buying public.
• When the challenged advertisement is IMPLICITLY
rather than explicitly false, its tendency to violate the
Lanham Act by misleading, confusing or deceiving
should be tested by public reaction.
ITC:
• Tropicana’s commercial is explicitly false. The claim that
the juice contains only freshly-squeezed, unprocessed
juice is clearly a misrepresentation as to the
product’s inherent quality or characteristic.
• The visual component of the ad makes an explicit
representation that Premium Pack is produced by
squeezing oranges and pouring the freshly-squeezed juice
directly into the carton. This is not a true
representation of how the product is prepared.
o Premium Pack juice is heated and sometimes
frozen prior to packaging.
• Additionally, the simultaneous audio component of the ad
states that Premium Pack is "pasteurized juice as it comes
from the orange."
o This statement is blatantly false-pasteurized
juice does not come from oranges.
Pasteurization entails heating the juice to
approximately 200 Fahrenheit to kill certain
natural enzymes and microorganisms which
cause spoilage.
• Moreover, even if the addition of the word "pasteurized"
somehow made sense and effectively qualified the visual
image, Tropicana's commercial nevertheless represented
that the juice is only squeezed, heated and packaged
when in fact it may actually also be frozen.
B.2 PERNOD RICARD V. BACARDI, US COURT OF
APPEALS 3RD CIRCUIT NO. 10-2354 (2011)
Pernod filed a false advertising suit under Section 43(a)(1)(B)
of the Lanham Act, asserting that the labeling of Bacardi’s
bottle, particularly the use of the words “Havana Club,”
misleads consumers to believe that the rum is produced in
Cuba. The District Court ruled in favor of Bacardi. In this
appeal, the U.S. Court of Appeals agrees with the District Court
that the consumer survey presented by Pernod was necessarily
irrelevant since the Havana Club label, taken as a whole, could
not mislead any reasonable consumer about where Bacardi’s
rum is made. Here, there is a factually accurate, unambiguous
statement of the geographic origin of Havana Club rum. The
label clearly states on the front that the liquor is “Puerto Rican
Rum” and, on the back, that it is “distilled and crafted in
Puerto Rico.”
Held:
• To establish a false advertising claim under the Lanham
Act, a plaintiff must prove:
1. that the defendant has made false or misleading
statements as to his own product [or another’s];
2. that there is actual deception or at least a
tendency to deceive a substantial portion of the
intended audience;
Actual deception or a tendency to
deceive is presumed if a plaintiff
proves that an advertisement is
unambiguous and literally false.
If the message conveyed by an
advertisement is literally true or
ambiguous, however, the plaintiff must
prove actual deception or a tendency to
deceive, and it may do so with a
properly conducted consumer survey.
3. that the deception is material in that it is likely to
influence purchasing decisions;
4. that the advertised goods traveled in interstate
commerce; and
5. that there is a likelihood of injury to the plaintiff
in terms of declining sales, loss of good will, etc.
• The issue in false advertising cases is whether an
advertisement, like Bacardi’s label, implies an inaccurate
message.
Need for consumer survey
• There are circumstances under which the meaning
of a factually accurate and facially unambiguous
statement is not open to attack through a
consumer survey.
o In other words, there may be cases, and this is
one, in which a court can properly say that no
reasonable person could be misled by the
advertisement in question.
ITC:
• Here, there is a factually accurate, unambiguous
statement of the geographic origin of Havana Club rum.
The label clearly states on the front that the liquor is
“Puerto Rican Rum” and, on the back, that it is “distilled
and crafted in Puerto Rico.” No reasonable consumer
could be misled by those statements, and the rest of the
label does not put those statements in doubt.
• Pernod argues that the words Havana Club are misleading
as to the geographic origin of the rum.
o Court: If we were dealing with those words in
isolation, we might agree.
o But, as we have already emphasized, we
are not dealing with those words in
isolation. This is not a trademark case, and
certainly not one addressing trademark
registration.
o We are obligated in this false advertising
case to look at the words “Havana Club” in
the context of the entire accused
advertisement, the label of the rum.
o Viewed in that context, any thought a consumer
might have that the words “Havana Club”
indicate the geographic origin of the rum must
certainly be dispelled by the plain and explicit
statements of geographic origin on the label.
Class notes:
• Difference with a trademark case
o false advertising - examination - whole bottle
o trademark - look merely at the words
• court ruled only on the false advertising issue and not
on the trademark issue
RELEVANCE OF SURVEYS
• even if there are consumer surveys, you must
still prove the requirement that the ad is
explicitly or implicitly false (to be determined
by the judge)
o if explicitly false, consumer surveys would
not be relevant
o if implicitly false, consumer surveys would be
relevant
Elements:
1. False or misleading statements as to one’s own product or
another’s
2. Actual deception
3. Material - likely to influence purchasing decision
4. Likelihood of injury to plaintiff
3 and 4 likelihood lang
False or misleading
1. determine first the message being conveyed
2. determine if false or misleading
o mere puffery not actionable
3. determine if literally false or explicitly false
o explicit falsity does not require evidence of impact on
consumers
COMMERCIAL DISPARAGEMENT
ADL
B.3. S.C. JOHNSON & SON, INC. V. CLOROX CO., 241
F.3D 232 (2D CIR. 2001)
Clorox produced Goldfish Commercial I. It was enjoined by the
District Court for being literally false. Due to this, it produced
substantially the same kind of commercial and print ad, with
minor changes (Goldfish II). The District Court permanently
enjoined it because it was literally false again. The ads showed
that SC Johnson’s ziplocks had leakage when turned upside-
down.
Held:
• To establish a false advertising claim under Section 43(a),
the plaintiff must demonstrate that the statement in
the challenged advertisement is false.
• Falsity may be established by proving that:
(1) the advertising is literally false as a factual
matter (explicit falsity), or
(2) although the advertisement is literally true, it
is likely to deceive or confuse customers
(implicit falsity)
• "Where the advertising claim is shown to be literally false,
the court may enjoin the use of the claim 'without
reference to the advertisement's impact on the
buying public.
• Text must yield to context.
ITC:
• Goldfish II television commercial and print advertisement
are literally false as a factual matter.
• As in Coca-Cola, the Goldfish II advertisement depicts a
literal falsity that requires no proof by extrinsic evidence:
that Slide-Loc bags always leak when filled with water and
held upside down.
• The evidence presented at trial clearly indicates that, as
the court found, only slightly more than one out of ten
Slide-Loc bags tested dripped at a rate of one drop per
second or faster, while more than one-third of the Slide-
Loc bags tested leaked at a rate of less than one drop per
five seconds.
• The Goldfish II television commercial shows a drop
forming immediately and then falling from the Slide-Loc
bag, all over a period of approximately two seconds.
• Accordingly, the commercial falsely depicts the risk
of leakage for the vast majority of Slide-Loc bags tested.
B.4. P&G V. HAUGEN, 222 F.3D 1262 (2000)
Amway is a competitor in the same industry as P&G. Haugen is
distributor of Amway. Haugen released the subject message
associating P&G with Satan. P&G filed a suit saying the
message caused it to lose consumers who were concerned
with the association of the brand with Satan. The lower court
denied plaintiff’s Lanham Act claim on the ground that the
message, although identifying P&G products, did not contain
false representations about the qualities or characteristics of
those products, and so did not relate to a product within the
meaning of the Lanham Act.
Held:
False representation about commercial activities 9
• Although Congress did not define the term "commercial
activities" in the Act, the plain language meaning of
9
“Commercial activities” was included in the Trademark Law
Revision Act of 1988.
Page 83
 that term encompasses "commercial transactions"
or all activities surrounding the peculiar
"commerce" of a company, defined as "the exchange
or buying and selling of commodities."
• The subject message linking P&G to Beelzebub
clearly concerned the "nature, characteristics, [or]
qualities of P&G's commercial activities," under the
plain meaning of that phrase.
o In particular, the subject message asserted that
"a large portion of the profits from P&G products
go to support [the church of Satan."
o Given the common association of Satan and
immorality, a direct affiliation with the church of
Satan could certainly undermine a corporation's
reputation and goodwill by suggesting the
corporation conducts its commercial activities in
an unethical or immoral manner.
o There can be little doubt that products are often
marketed and purchased not only on the basis of
their inherent utility, but also for the images
they project and the values they promote.
• The term “commercial activities” was intended to
denote something other than mere “goods or
services.”
• The term “commercial activities” encompasses
P&G’s use of the profits from the sale of its goods.
Commercial advertising or promotion
• In order for representations to constitute "commercial
advertising or promotion" under Section 43(a)(1)(B), they
must be:
(1) commercial speech;
(2) by a defendant who is in commercial competition
with plaintiff;
(3) for the purpose of influencing consumers to buy
defendant's goods or services.
(4) While the representations need not be made in a
"classic advertising campaign," but may consist
instead of mere informal types of “promotion,”
the representations must be disseminated
sufficiently to the relevant purchasing public.
• To begin with, a representation is not necessarily
commercial speech merely because--by way of example--it
is contained in an advertisement, made with an economic
motive, or refers to a specific product, although the
combination of those characteristics strongly supports
classification as commercial speech.
• Rather, the difference between commercial speech and
noncommercial speech "is a matter of degree."
• The bare fact that the subject message contains a
"theological" component is insufficient to transform it into
noncommercial speech.
o The message unambiguously urges recipients to
eschew purchasing P&G products in favor of
Amway products.
• While economic motivation or reference to a specific brand
name and products, when viewed in isolation, might not
render a message commercial speech, we conclude that
those factors taken together with the instant message's
promotion of Amway products at the expense of P&G
products support the characterization of the subject
message as commercial speech
PUFFERY
B.5. VERIZON DIRECTORIES CORP. V. YELLOW BOOK
USA, 309 F. SUPP. 2D 401 (E.D.N.Y. 2004)
YB USA publishes the Yellow Book which competes with
Verizon’s SuperPages. Verizon alleges that YB USA’s
commercials falsely represent that more people use the Yellow
Book than the SuperPages. It specifies 3 TV commercials: the
Senior Focus Group, the Apartment Lobby, and the Wind
Tunnel commercials. YB USA moved to dismiss on the ground
that the commercials constitute puffery, which is
nonactionable.
Held:
• Elements of false representation:
1. the defendant made false or misleading
representations regarding the nature,
characteristics, or quality of the plaintiff's services
or commercial activities;
2. the representations were used in commerce;
3. the representations were made in the context
of commercial advertising or promotion;
and
4. the defendant's actions made the plaintiff believe
it would be damaged by the representations.
• False representations of fact are distinguished from
puffery.
• Puffery is "an exaggeration or overstatement
expressed in broad, vague, and commendatory
language;" a general claim of superiority over
comparable products that is so vague that it can be
understood as nothing more than a mere expression of
opinion.
o Puffery is not actionable because it cannot
be proven either true or false.
ITC:
• A viewing of YB USA's commercials in toto and with
consideration of their visual imagery as well as their sound
suggests that they might be interpreted by consumers to
mean that more people use the Yellow Book than use the
Verizon SuperPages.
• They are skillfully crafted and shown at great expense to
subtly but firmly communicate an idea — that the
Yellow Book is preferred by users to Verizon's book
and that, more to the point, advertisers will reach
more potential consumers if they put their names and
money in the former rather than the latter.
RIGHTS OF ATTRIBUTION
B.6. GILLIAM V. AMERICAN BROADCASTING CO., INC.
538 F.2D 14 (1976)
ABC entered into an agreement with Time-Life (via right to
distribute from BBC) to broadcast episodes of Monty Python.
The contract between Monty Python and BBC specified that the
episodes were only to be broadcast in their entirety. However,
when Monty saw what ABC first aired, Monty was allegedly
appalled at the discontinuity and mutilation that had resulted
from the editing. Monty sued for an injunction to prevent ABC
from broadcasting the edited version and for damages.
Held:
• Lanham Act has been invoked to prevent
misrepresentations that may injure plaintiff’s business or
personal reputation, even where no registered trademark
is concerned.
• It is sufficient to violate the Act that a representation of a
 product, although technically true, creates a false
impression of the product's origin.
• This case cannot be distinguished from the situation in
which a television network broadcasts a program properly
designated as having been written and performed by a
group, but which has been edited, without the writer's
consent, into a form that departs substantially from the
original work.
• To deform his work is to present him to the public
as the creator of a work not his own, and thus
makes him subject to criticism for work he has not
done."
o In such a case, it is the writer or performer,
rather than the network, who suffers the
consequences of the mutilation, for the public will
have only the final product by which to evaluate
the work.
o Thus, an allegation that a defendant has
presented to the public a " garbled," distorted
version of plaintiff's work seeks to redress the
very rights sought to be protected by the Lanham
Act.
Concurring:
• I believe that this is the first case in which a federal
appellate court has held that there may be a violation of
Section 43(a) of the Lanham Act with respect to a
common-law copyright. The Lanham Act is a trademark
statute, not a copyright statute.
• An obligation to mention the name of the author carries
the implied duty,
• however, as a matter of contract, not to make such
changes in the work as would render the credit line a false
attribution of authorship.
• The misdescription of origin can be dealt with, as Judge
Lasker did below, by devising an appropriate legend to
indicate that the plaintiffs had not approved the editing of
the ABC version. With such a legend, there is no
conceivable violation of the Lanham Act.
• If plaintiffs complain that their artistic integrity is still
compromised by the distorted version, their claim does not
lie under the Lanham Act, which does not protect the
copyrighted work itself but protects only against the
misdescription or mislabelling.
IV. UNFAIR COMPETITION IN OTHER LAWS
ARTICLE 28, CIVIL CODE
Art. 28. Unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force,
intimidation, deceit, machination or any other unjust,
oppressive or highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
ARTICLE 186, REVISED PENAL CODE
Art. 186. M onopolies and com binations in restraint of
trade. — The penalty of prision correccional in its minimum
period or a fine ranging from 200 to 6,000 pesos, or both, shall
be imposed upon:
1. Any person who shall enter into any contract or agreement
ADL
or shall take part in any conspiracy or combination in the form
of a trust or otherwise, in restraint of trade or commerce or to
prevent by artificial means free competition in the market;
2. Any person who shall monopolize any merchandise or object
of trade or commerce, or shall combine with any other person
or persons to monopolize and merchandise or object in order
to alter the price thereof by spreading false rumors or making
use of any other article to restrain free competition in the
market;
3. Any person who, being a manufacturer, producer, or
processor of any merchandise or object of commerce or an
importer of any merchandise or object of commerce from any
foreign country, either as principal or agent, wholesaler or
retailer, shall combine, conspire or agree in any manner with
any person likewise engaged in the manufacture, production,
processing, assembling or importation of such merchandise or
object of commerce or with any other persons not so similarly
engaged for the purpose of making transactions prejudicial to
lawful commerce, or of increasing the market price in any part
of the Philippines, of any such merchandise or object of
commerce manufactured, produced, processed, assembled in
or imported into the Philippines, or of any article in the
manufacture of which such manufactured, produced, or
imported merchandise or object of commerce is used.
If the offense mentioned in this article affects any food
substance, motor fuel or lubricants, or other articles of prime
necessity, the penalty shall be that of prision mayor in its
maximum and medium periods it being sufficient for the
imposition thereof that the initial steps have been taken
toward carrying out the purposes of the combination.
Any property possessed under any contract or by any
combination mentioned in the preceding paragraphs, and
being the subject thereof, shall be forfeited to the Government
of the Philippines.
Whenever any of the offenses described above is committed
by a corporation or association, the president and each one of
its agents or representatives in the Philippines in case of a
foreign corporation or association, who shall have knowingly
permitted or failed to prevent the commission of such offense,
shall be held liable as principals thereof.
TITLE III, REPUBLIC ACT NO. 7394 CONSUMER ACT OF
THE PHILIPPINES
(too long to paste)
REPUBLIC ACT. 7581 “PRICE ACT”
(too long to paste)
V. PARALLEL IMPORTATION
SECTION 166, IP CODE
Section 166. Goods Bearing Infringing Marks or Trade
Names. - No article of imported merchandise:
a. which shall copy or simulate the name of any
domestic product, or manufacturer, or dealer, or
b. which shall copy or simulate a mark
registered in accordance with the provisions of
this Act, or
Page 85
 c. shall bear a mark or trade name calculated
to induce the public to believe that the article is
manufactured in the Philippines, or that it is
manufactured in any foreign country or
locality other than the country or locality
where it is in fact manufactured,
shall be admitted to entry at any customhouse of the
Philippines. In order to aid the officers of the customs service
in enforcing this prohibition, any person who is entitled to the
benefits of this Act, may require that his name and residence,
and the name of the locality in which his goods are
manufactured, a copy of the certificate of registration of his
mark or trade name, to be recorded in books which shall be
kept for this purpose in the Bureau of Customs, under such
regulations as the Collector of Customs with the approval of
the Secretary of Finance shall prescribe, and may furnish to
the said Bureau facsimiles of his name, the name of the
locality in which his goods are manufactured, or his registered
mark or trade name, and thereupon the Collector of Customs
shall cause one (1) or more copies of the same to be
transmitted to each collector or to other proper officer of the
Bureau of Customs.
Class notes:
Sec 166 applies only to infringing products, not to genuine
products
YU V. COURT OF APPEALS, G.R. NO. 86683, JANUARY
21, 1993
Yu is the exclusive distributor of Mayfair in the Philippines.
Unisia was a dealer of Yu. Unisia imported the same goods via
FNF and sold the same in the Philippines. Yu sought to enjoin
the sale and distribution of the goods. Yu moved for
preliminary injunction but it was denied by the RTC and CA
because Unisia is not privy to the distributorship contract of Yu
and Mayfair. SC reversed and ordered the RTC to grant the
preliminary injunction because injunction is the appropriate
remedy to prevent wrongful interference with contracts by
strangers. Unisia’s accountability is “an independent act
generative of civil liability.”
Held:
• The right to perform an exclusive distributorship
agreement and to reap the profits resulting from
such performance are proprietary rights which a
party may protect, which may otherwise not be
diminished, nay, rendered illusory by the expedient act of
utilizing or interposing a person or firm to obtain goods
from the supplier to defeat the very purpose for which the
exclusive distributorship was conceptualized, at the
expense of the sole authorized distributor
• ITC: The House of Mayfair in England was duped into
believing that the goods ordered through the FNF Trading
were to be shipped to Nigeria only, but the goods were
actually sent to and sold in the Philippines.
• A ploy of this character is akin to the scenario of a third
person who induces a party to renege on or violate
his undertaking under a contract, thereby entitling
the other contracting party to relief therefrom
(Article 1314, New Civil Code).
• Remedy: injunction is the appropriate remedy to prevent a
wrongful interference with contracts by strangers to such
contracts where the legal remedy is insufficient and the
resulting injury is irreparable.
Class notes:
• Yu would be the basis for stopping someone to import
genuine products - no relief under trademark.
• Civil code lang - art 1314, tortious interference:
Art. 1314. Any third person who induces another to
violate his contract shall be liable for damages to the
other contracting party.
SOLID TRIANGLE SALE CORP. V. SHERIFF OF RTC QC,
G.R. NO. 144309 (2001)
Both Sanly and Solid Triangle sell genuine Mitsubishi products.
Solid Triangle acquires its goods from Japan on the basis of its
exclusive distributorship with Mitsubishi Corporation. While
Sanly buys its goods from Hongkong, claiming it is a parallel
importer, not an unfair competitor. Petitioners submit that the
importation of even genuine goods can constitute a crime
under the Intellectual Property Code so long as fraud or deceit
is present.
Held:
• A parallel importer is one which imports, distributes,
and sells genuine products in the market, independently
of an exclusive distributorship or agency
agreement with the manufacturer.
ITC:
• The real dispute is actually between Solid Triangle and the
manufacturer Mitsubishi. If Solid Triangle feels aggrieved,
it should sue Mitsubishi for damages, if at all for breach of
its distributorship.
• No probable cause to justify issuance of search warrant
based on a criminal action for unfair competition. Sanly is
a parallel importer of genuine photo paper.
• Sanly Corporation did not pass off the goods as that of
another.
SOCIETE DES PRODUITS NESTLE, S.A., V. CASA
HELVETIA, INC., 982 F.2D 633 (1992)
Casa Helvetica used to be the distributor of Perugina
chocolates (Nestle’s product; Italian version) in Puerto Rico.
Nestle Puerto Rico was thereafter appointed by Nestle as its
exclusive Puerto Rican distributor. Case Helvetica began to
purchase Perugina chocolates (Venezuelan version) from the
Venezuelan distributor of Nestle and imported the chocolates
in Puerto Rico. Nestle alleged that because the PERUGINA
name in Puerto Rico is associated with Italian-made
chocolates, the importation of materially different Venezuelan
chocolates threatened to erode "the integrity of the PERUGINA
trademarks as symbols of consistent quality and goodwill in
Puerto Rico." The issue in this case involves the protection to
be afforded to gray goods – trademarked goods manufactured
abroad under a valid license but brought into this country in
derogation of arrangements lawfully made by the trademark
holder to ensure territorial exclusivity.
Held:
• In general, trademark rights are congruent with the
boundaries of the sovereign that registers (or recognizes)
the mark. Such territoriality reinforces the basic goals of
trademark law. Because products are often tailored to
specific national conditions, a trademark's reputation (and,
hence, its goodwill) often differs from nation to nation.
• The importation of goods properly trademarked abroad
 but not intended for sale locally may confuse consumers
and may well threaten the local mark owner's goodwill.
• Territorial protection kicks in under the Lanham Act where
two merchants sell physically different products in the
same market and under the same name.
• Where material differences exist between similarly
marked goods, the Lanham Trademark Act honors the
important linkage between trademark law and geography.
o The unauthorized importation and sale of
materially different merchandise violates Lanham
Trade-Mark Act section 32 because a difference
in products bearing the same name confuses
consumers and impinges on the local trademark
holder's goodwill.
o Unauthorized importation may turn an
otherwise “genuine” product into a
“counterfeit” one.
o Elements: (1) products were not authorized
for sale in the territory and (2) differed
materially from the authorized version.
o No violation: (1) when a product identical to
a domestic product is imported under the same
mark; (2) using the mark on two blatantly
different products
The probability of confusion is great,
however, when the same mark is
displayed on goods that are not identical
but that nonetheless bear strong
similarities in appearance or function.
Gray goods often fall within this
category.
• False designation of origin as to source,
sponsorship or affiliation
o The statutory prohibition against false
designation of origin encompasses more than
deceptions as to geographic origin; it extends, as
well, to "origin of source, sponsorship or
affiliation."
o In short, the use of a mark may be deceptive
and, thus, violative of section 43(a), in light of
the overall appearance of the package,
despite the existence of fine print
identifying the true origin; that is, such a
package may falsely convey the impression that
the domestic mark holder intended the
importation of the good into the local market.
ITC:
• There were differences as to quality control, configuration
(variety), packaging, and price. These are material
differences.
LEVER BROS. CO. V. U.S., 877 F.2D 101 (1989)
Lever US and Lever UK sells through third party retailers and
distributors its “SHIELD AND SUNLIGHT” soap and
dishwashing liquid. The products are different in some of their
qualities. Lever US wanted the Customs Service to block the
entry of the UK Products. Lever US and UK are affiliate
companies. And for this reason, the Customs Service interprets
Sec. 42 of the Lanham Act as an exception applicable in this
case.
Held:
• The reenactment has no mention of the situation
ADL
presented here, where a third party imports foreign
goods bearing a valid foreign trademark identical
to a US trademark but covering physically different
goods.
• Other cases of parallel importation cover goods produced
by a foreign licensee rather than an affiliate. The consent
here (to import) was inferred from affiliation.
• A trademark holder cannot infringe its own mark.
Thus, if a US markholder itself imports goods (or licenses
another to do so), the markholder's conduct of or
authorization of the importation makes the goods
authentic, whether they are better, worse, or the same as
the US markholder's domestic products.
• To the extent that the affiliate exception extends this
principle to goods imported into the US by companies
affiliated with the US markholder, it does nothing more
than treat the two companies as being
constructively one for infringement purposes.
• BUT the natural, virtually inevitable reading of Sec. 42 is
that it bars foreign goods bearing a trademark
identical to a valid US trademark but physically
different, regardless of the trademarks' genuine
character abroad or affiliation between the producing
firms. On its face the section appears to aim at deceit and
consumer confusion.
ROMA DRUG V. RTC PAMPANGA, G.R. NO. 149907,
APRIL 16, 2009
SmithKline is the local distributor of pharmaceutical products
manufactured by its parent London-based corporation.
SmithKline applied for a search warrant against petitioner to
seize medicine which were manufactured by SmithKline and
imported directly from abroad (not purchased through the local
SmithKline, the authorized PH distributor). The NBI
subsequently filed a complaint against Rodriguez for violation
of Section 4 (in relation to Sections 3 and 5) of Republic Act
No. 8203, also known as the Special Law on Counterfeit Drugs
(SLCD), with the Office of the Provincial Prosecutor in San
Fernando, Pampanga. The section prohibits the sale of
counterfeit drugs, which under Section 3(b)(3), includes an
unregistered imported drug product. In this case, there is no
doubt that the subject seized drugs are identical in content
with their Philippineregistered counterparts. There is no claim
that they were adulterated in any way or mislabeled at least.
Their classification as counterfeit is based solely on the fact
that they were imported from abroad and not purchased from
the Philippineregistered owner of the patent or trademark of
the drugs.
Held:
• Section 7 of Rep. Act No. 9502 amends Section 72 of the
Intellectual Property Code in that the later law
unequivocally grants third persons the right to import
drugs or medicines whose patent were registered in the
Philippines by the owner of the product.
• The SLCOs classification of unregistered imported drugs as
counterfeit drugs, and of corresponding criminal penalties
therefore are irreconcilably in the imposition conflict with
Rep. Act No. 9502 since the latter indubitably grants
private third persons the unqualified right to import or
otherwise use such drugs.
Page 87
TRADE SECRET PROTECTION
I. NATURE OF TRADE SECRET PROTECTION
SECTION 4.1, IP CODE
Section 4.1, IP Code Section 4. Definitions. - 4.1. The term
"intellectual property rights" consists of:
a) Copyright and Related Rights;
b) Trademarks and Service Marks;
c) Geographic Indications
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information (n, TRIPS).
ARTICLE 39 (2) TRIPS AGREEMENT
Article 39 2. Natural and legal persons shall have the possibility
of preventing information lawfully within their control
from being [DAU] disclosed to, acquired by, or used by others
without their consent in a manner contrary to honest
commercial practices so long as such information:
a. is secret in the sense that it is not, as a body or in
the precise configuration and assembly of its
components, generally known among or readily
accessible to persons within the circles that normally
deal with the kind of information in question;
b. has commercial value because it is secret; and
c. has been subject to reasonable steps under the
circumstances, by the person lawfully in control of the
information, to keep it secret.
RULE 1 (O) IPO RULES AND REGULATIONS ON
VOLUNTARY LICENSING
PART 1 Definitions
Definition of Terms. Unless otherwise specified, the
following terms shall have the meaning provided in this Rule:
(o) “Undisclosed Information” shall mean information
which:
i. Is secret in the sense that it is not, as a body or in
the precise configuration and assembly of its
components, generally known among or readily
accessible to persons within the circles that normally
deal with the kind of information in question;
ii. has commercial value because it is secret; and
iii. has been subject to reasonable steps under the
circumstances to keep it secret, by the person lawfully
in control of the information.
Class notes:
1. Provides incentive to create new, valuable information
2. Discourages certain improper conducts in the market place -
imposes minimum standards of morality
• Trade secrets are protected under sec4(g)
II. THEORIES BEHIND TRADE SECRET
PROTECTION
E.I. DUPONT DE NEMOURS POWDER CO. V. MASLAND,
244 U.S. 100 (1917)
Held:
Relationship Theory of Trade Secret Protection
• Whether the plaintiffs have any valuable secret or not the
defendant knows the facts, whatever they are, through a
special confidence that he accepted. The property
may be denied, but the confidence cannot be.
• Therefore the starting point for the present matter is not
property or due process of law, but that the defendant
stood in confidential relations with the plaintiffs, or
one of them.
VAN PRODUCTS CO. V. GEN. WELDING &
FABRICATING, 419 PA. 248, (1965)
Van was engaged in the sale of deliquescent desiccant air
driers. These driers involve a secret chemical compound to be
known as “Dryolite” used as a desiccant which Van was able to
get from Norton. Van employed Rapp and during the course of
the employment Rapp was thoroughly imbued, through his
industrious application, with all the problems, processes and
advantages involved in the production, sale, and maintenance
of this type of drier. He learned everything there was to know
about Van's drier, except the composition of the desiccant
itself. Rapp and General then became introduced to each other
as General was the one making the parts for Van’s drier.
Fearing for Rapp’s loyalty, Van terminated Rapp’s employment.
Rapp then was employed by General and was able to produce
his own desiccant. Van now claims misappropriation of
confidential material by Rapp. Court denies Van’s claims. Court
explained first that general knowledge acquired through
employment cannot be classified as trade secret. This
generalized knowledge in the field of deliquescent desiccant air
driers was a labor asset which Rapp was privileged to carry
with him to his new employer. The court also that it was only
the composition of the desiccant which was secret and such
was not made known to Rapp. It was only Rapp's
industriousness which enabled him to come up with an
acceptable formula for a desiccant to use in the drier which he
was privileged to construct.
Held:
• Definition of trade secret: "a trade secret may consist of
any formula, pattern, device or compilation of information
which is used in one's business, and which gives him an
opportunity to obtain an advantage over competitors who
do not know or use it."
• Elements: To be entitled to equitable relief [in a trade
secret case the employer must] show:
1. that there was a trade secret, or, as in the case
at bar, a secret process of manufacture;
2. that it was of value to the employer and
important in the conduct of his business;
3. that by reason of discovery or ownership the
employer had the right to the use and
enjoyment of the secret; and,
4. that the secret was communicated to [the
employee] while he was employed in a position
of trust and confidence under such
circumstances as to make it inequitable and
unjust for him to disclose it to others, or to make
use of it himself, to the prejudice of his
employer.
• Not covered by trade secrets: The employee, upon
terminating his employment relationship with his
employer, is entitled to take with him "the experience,
knowledge, memory, and skill, which he gained while
there employed.
 o "the intimate knowledge of the need, use and involved were appropriate subjects for consideration under a
demand" for this product could not be a trade federal patent, but having been in commercial use for over a
secret. It is something that would be learned in year, were no longer eligible for patent protection. The
any productive industry, as are the "material Supreme Court ruled that there is no such conflict. The
sources and costs", "labor costs", the "suppliers objectives behind the two laws are in harmony with one
and accounts payable", "customers and accounts another, the patent laws do not prohibit the existence of trade
receivable", and "advertising methods and secret protection laws – those with inventions that are
material.” patentable will obviously not choose trade secret protection as
o As with any other trade secret, for customer the latter is weaker, and abolition of trade secret protection
information to be protectible it must be a will lead to a number of disadvantages to owners of trade
particular secret of the business, of value to the secrets that are either clearly not patentable or of dubious
employer and wrongfully appropriated by the patentability.
employee. In the present case, the actual lists
were merely distillations of commercial lists Held:
created from the very general knowledge that Patent Trade Secret
users of compressed air are potential customers Goals Incentivize Maintenance of
for air driers. invention standards of
• Other circumstances militating against the existence of a commercial ethics
trade secret: and
o Existence of patent publication - the very nature encouragement of
of the patent publication have been consistently invention
interpreted to work a destruction of any trade Subject matter A trade secret may The subject matter
secret disclosed therein consist of any of a patent is
o These air driers were sold on the open market formula, pattern, limited to a
and described and covered extensively in the device or "process, machine,
trade literature and Van's own advertising media. compilation of manufacture, or
o Public sale of the article in question or the information which composition of
description thereof in literature available to the is used in one's matter, or
public will destroy any trade secret which the business (matters improvement
inventor might have had. which would not thereof.
o While recognizing that limited publication and be proper subjects
experimental usages are not incompatible with for patent
secrecy, we feel that the widespread publication protection).
and advertising in this case and the public sale of
the air driers destroyed Van's right to maintain a Defense The law also Fair and honest
cause of action upon a breach of duty not to protects the holder means of discovery
disclose its "trade secrets". of a trade secret not a defense
against disclosure against patent
Property theory or use when the claims.
• The starting point in every case of this sort is not whether knowledge is
there was a confidential relationship, but whether, in fact, gained not by
there was a trade secret to be misappropriated. the owner's
volition, but by
Class notes: some "improper
Theories of trade secret protection: means." A trade
1. Breach of duty - dupont secret law,
2. Property - van products however, does
not offer
COMPARED WITH OTHER IP REGIMES protection
KEWANEE OIL CO. V. BICRON CORP., 416 U. S. 470 against
(1974) discovery by fair
Harshaw Chemical Co. is the leading manufacturer of a certain and honest
type of crystal useful in the detection of ionizing radiation. means, such as
After spending over a million dollars on research, they were by independent
able to grow a 17-inch crystal. Their employees each signed an invention,
agreement not to disclose trade secrets obtained from accidental
Harshaw. However, some of their employees eventually disclosure, or by
formed or joined Bicron, a rival company, which, not long so-called
thereafter, grew a similar 17-inch crystal. Petitioner filed a reverse
diversity action for the misappropriation of trade secrets. The engineering.
District Court, applying the Ohio Trade Secret Law, granted a
permanent injunction against the respondents. The Court of Novelty Novelty not Novelty required
Appeals, however, reversed the DC, saying that said law is in required in trade for patents.
conflict with US patent laws, because the subject matter secrets. Discovery

ADL Page 89
 is something less
than invention.
However, some
novelty will be
required, if merely
because that which
does not possess
novelty is usually
known; secrecy, in
the context of
trade secrets, thus
implies at least
minimal novelty.
Benefits of trade secret laws:
o Greater variety of business methods - Abolition of trade
secret protection would, therefore, not result in increased
disclosure to the public of discoveries in the area of
nonpatentable subject matter. Also it is hard to see how
the public would be benefited by disclosure of customer
lists or advertising campaigns; in fact, keeping such items
secret encourages businesses to initiate new and
individualized plans of operation, and constructive
competition results.
Three categories of trade secrets (reasons why trade secret
laws should not be abolished):
1. the trade secret believed by its owner to constitute a
validly patentable invention;
o Trade secret law provides far weaker protection in
many respects than the patent law. While trade secret
law does not forbid the discovery of the trade secret
by fair and honest means, e.g., independent creation
or reverse engineering, patent law operates "against
the world," forbidding any use of the invention for
whatever purpose for a significant length of time.
o If the invention, though still a trade secret, is put into
public use, the competition is alerted to the existence
of the inventor's solution to the problem, and may be
encouraged to make an extra effort to independently
find the solution thus known to be possible.
2. the trade secret known to its owner not to be so
patentable; and
o Trade secret law will encourage invention in areas
where patent law does not reach, and will prompt the
independent innovator to proceed with the discovery
and exploitation of his invention
o A problem that would arise if state trade secret
protection were precluded is in the area of licensing
others to exploit secret processes. The holder of a
trade secret would not likely share his secret with a
manufacturer who cannot be placed under binding
legal obligation to pay a license fee or to protect the
secret. The result would be to hoard, rather
than disseminate, knowledge.
o increased costs for protection from burglary,
wiretapping, bribery, and the other means used to
misappropriate trade secrets, there is the inevitable
cost to the basic decency of society when one firm
steals from another.
3. the trade secret whose valid patentability is considered
dubious.
o The risk of eventual patent invalidity by the courts
and the costs associated with that risk may well impel
some with a good faith doubt as to patentability not
to take the trouble to seek to obtain and defend
patent protection for their discoveries.
o an invalid patent was so serious a threat to the free
use of ideas already in the public domain. More of
those patents would likely issue if trade secret law
were abolished.
Class notes:
• What would make you choose trade secrets over patents?
o Patents require novelty - if di magpass trade
secret na lang
o If product is easily copied - patent mo na lang
o Trade secret protection is indefinite, as long as
you keep it secret
Ethics/commercial morality
Encouraging invention and investment in research
Discouraging hoarding/exploitation of knowledge, disseminates
information
Privacy
Avoids extra costs for security
COMPUTER ASSOCIATES INTERNATIONAL V. ALTAI,
982 F.2D 693 (1992)
Computer Associates "CA" sued Altai for copyright infringement
of CA's ADAPTER program by Altai's OSCAR program. The
program was an operating system compatibility component. A
former CA employee (Arney) went to work for Altai and was
the developer of OSCAR. About 30% of OSCAR was taken from
ADAPTER. Once Altai learned of this misappropriation, the
stolen code was purged and a team of programmers rewrote
the offending portions of OSCAR. CA sued Altai (not
impleading Arney) for copyright infringement and trade secret
misappropriation.
Held:
• Precisely because trade secret doctrine protects the
discovery of ideas, processes, and systems which are
explicitly precluded from coverage under copyright
law, courts and commentators alike consider it a
necessary and integral part of the intellectual property
protection extended to computer programs.
• Trade secret claims often are grounded upon a
defendant's breach of a duty of trust or confidence
to the plaintiff through improper disclosure of
confidential material.
o The defendant's breach of duty is the gravamen
of such trade secret claims, and supplies the
"extra element" that qualitatively distinguishes
such trade secret causes of action from claims
for copyright infringement that are based
solely upon copying.
• Under a wrongful acquisition theory, 10 Altai may be liable
for violating CA’s right of confidentiality
• Altai may be held liable under a constructive notice
theory or an actual notice theory.
o By virtue of Williams' close relationship with Arney,
10
One who discloses or uses another's trade secret, without a
privilege to do so, is liable to another if.... (c) he learned the
secret from a third person with notice of the fact that it
was a secret and that the third person discovered it by
improper means or that the third person's disclosure of it was
otherwise a breach of his duty to the other....
 Williams' general familiarity with CA's programs constitute the sum total of the advantages which
(having once been employed by CA himself), and the the result of the experience or individual aptitude
fact that Arney used the ADAPTER program in an and ability of the man or men by whom the
office at Altai adjacent to Williams during a period in business has been built up. Failure or success
which he had frequent contact with Williams may depend upon the possession of these
regarding the OSCAR/VSE project, Williams (and intangible but all important assets, and it is
through him Altai) may well have been on natural that their possessor should seek to keep
constructive notice of Arney's breach of his duty. them from falling into the hands of his
o While we agree with the district court that OSCAR 3.5 competitors.
did not contain any expression protected by o It is with this object in view that such restrictions
copyright, it may nevertheless still have embodied as that now under consideration are written into
many of CA's trade secrets that Arney brought with contracts of employment. Their purpose is the
him to Altai. Since Altai's rewrite was conducted with protection of the employer, and if they do not go
full knowledge of Arney's prior misappropriation, in beyond what is reasonably necessary to
breach of his duty of confidentiality, it follows that effectuate this purpose they should be upheld.
OSCAR 3.5 was created with actual knowledge of
trade secret violations. A.2. AIR PHILIPPINES V. PENNSWELL, INC., G.R.
172835 (2007)
AirPhil bought a bunch of lubricants from Pennswell. However,
III. DEFINITION OF TRADE SECRET they found that some of the chemicals served the exact same
purpose. So AirPhil asked for a refund. Pennswell agreed but
A. PHILIPPINE CASE LAW
failed to pay. So AirPhil filed a Collection for a Sum of Money
case. AirPhil availed of modes of discovery to compel Penswell
A.1. WILLIAM OLLENDORF V. IRA ABRAHAMSON, G.R.
to give the ingredients list of its products so AirPhil could show
NO. 13228 (1918)
that that it deserved the refund. This was denied, hence this
Plaintiff sued defendant for injunction on the basis of an
appeal.
employment contract prohibiting the latter from engaging,
directly or indirectly, from any similar trade or business to that
Held:
of the Plaintiff’s. The plaintiff exports underwear with
• A trade secret is defined as a plan or process, tool,
embroidery design. Defendant was hired and the contract
mechanism or compound known only to its owner and
enjoined him from engaging in the same business 5 years from
those of his employees to whom it is necessary to
the date of the contract. A year after the contract, defendant
confide it.
left the company for the US for health reasons. A few months
o The definition also extends to a secret formula or
later, he came back as manager of a competitor company.
process not patented, but known only to
Thus, plaintiff sued for injunction on the basis of the contract
certain individuals using it in compounding
which imposed a negative obligation (“not to do”). The lower
some article of trade having a commercial
court granted the petition.
value.
• A trade secret may consist of any formula, pattern,
Held:
device, or compilation of information that:
• When two concerns operate in the same field, produce
(1) is used in one's business; and
the same class of goods and dispose them in the same
(2) (2) gives the employer an opportunity to obtain
market, their businesses are of necessity competitive.
an advantage over competitors who do not
o Defendant having engaged in the Philippine
possess the information.
Islands in a business directly competitive with
• USE REQUIREMENT: Generally, a trade secret is a
that of plaintiff, within five years from the date of
process or device intended for continuous use in
his contract of employment by plaintiff, under the
the operation of the business, for example, a machine
terms of which he expressly agreed that he
or formula, but can be a price list or catalogue or
would refrain from doing that very thing, his
specialized customer list.
conduct constitutes a breach of that agreement.
• It is indubitable that trade secrets constitute
• Contract not an unreasonable restraint of trade.
proprietary rights.
o We adopt the modern rule that the validity of
o The inventor, discoverer, or possessor of a
restraints upon trade or employment is to be
trade secret or similar innovation has rights
determined by the intrinsic reasonableness of
therein which may be treated as property,
restriction in each case, rather than by any fixed
and ordinarily an injunction will be granted
rule, and that such restrictions may be upheld
to prevent the disclosure of the trade
when not contrary to afford a fair and reasonable
secret by one who obtained the
protection to the party in whose favor it is
information "in confidence" or through
imposed.
a "confidential relationship."
o A business enterprise may and often does
o in accordance with our statutory laws, this
depend for its success upon the owner's relations
Court has declared that intellectual and
with other dealers, his skill in establishing
industrial property rights cases are not
favorable connections, his methods of buying and
simple property cases. [36] Without limiting
selling a multitude of details, none vital if
such industrial property rights to trademarks
considered alone, but which in the aggregate
and trade names, this Court has ruled that

ADL Page 91
 all agreements concerning intellectual
property are intimately connected with
economic development.
• American jurisprudence has utilized the following factors
to determine if an information is a trade secret, to wit:
(1) the extent to which the information is known
outside of the employer's business;
(2) the extent to which the information is known by
employees and others involved in the business;
(3) the extent of measures taken by the employer
to guard the secrecy of the information;
(4) the value of the information to the employer
and to competitors;
(5) the amount of effort or money expended by the
company in developing the information; and
(6) the extent to which the information could be
easily or readily obtained through an
independent source.
• Rule 27 sets an unequivocal proviso that the documents,
papers, books, accounts, letters, photographs, objects or
tangible things that may be produced and inspected
should not be privileged.
• There are 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.
Laws with trade secret provisions:
1. Interim rules of procedure on government rehabilitation -
the court may issue an order to protect trade secrets or
other confidential research, development, or commercial
information belonging to the debtor (Section 4, Rule 3)
2. Securities Regulation Code - the Securities and Exchange
Commission is not required or authorized to require the
revelation of trade secrets or processes in any application,
report or document filed with the Commission (Section
66.2)
3. Revised Penal Code:
Art. 291. Revealing secrets with abuse of office. The
penalty of arresto mayor and a fine not exceeding 500
pesos shall be imposed upon any manager, employee or
servant who, in such capacity, shall learn the secrets of
his principal or master and shall reveal such secrets.
Art. 292. Revelation of industrial secrets. The penalty of
prision correccional in its minimum and medium periods
and a fine not exceeding 500 pesos shall be imposed upon
the person in charge, employee or workman of any
manufacturing or industrial establishment who, to the
prejudice of the owner thereof, shall reveal the secrets of
the industry of the latter.
4. National Internal Revenue Code (penalizing the revelation
thereof by internal revenue officers or employees):
SECTION 278. Procuring Unlawful Divulgence of Trade
Secrets. Any person who causes or procures an officer or
employee of the Bureau of Internal Revenue to divulge
any confidential information regarding the business,
income or inheritance of any taxpayer, knowledge of
which was acquired by him in the discharge of his official
duties, and which it is unlawful for him to reveal, and any
person who publishes or prints in any manner whatever,
not provided by law, any income, profit, loss or
expenditure appearing in any income tax return, shall be
punished by a fine of not more than two thousand pesos
(P2,000), or suffer imprisonment of not less than six (6)
months nor more than five (5) years, or both.
5. RA 6969, Toxic Substances and Hazardous and Nuclear
Wastes Control Act of 1990: limits the right of the public
to have access to records, reports or information
concerning chemical substances and mixtures including
safety data submitted and data on emission or discharge
into the environment, if the matter is confidential such
that it would divulge trade secrets, production or sales
figures; or methods, production or processes unique to
such manufacturer, processor or distributor; or would
otherwise tend to affect adversely the competitive position
of such manufacturer, processor or distributor. [35
ITC:
• The chemical composition, formulation, and ingredients of
respondents special lubricants are trade secrets within the
contemplation of the law.
• It is unmistakable to our minds that the manufacture and
production of respondents products proceed from a
formulation of a secret list of ingredients. In the creation
of its lubricants, respondent expended efforts, skills,
research, and resources.
• By and large, the value of the information to respondent is
crystal clear.
• No doubt, the information is also valuable to respondents
competitors. To compel its disclosure is to cripple
respondents business, and to place it at an undue
disadvantage.
• Our conclusion is that the detailed ingredients sought to
be revealed have a commercial value to respondent. Not
only do we acknowledge the fact that the information
grants it a competitive advantage; we also find that there
is clearly a glaring intent on the part of respondent to
keep the information confidential and not available to the
prying public.
• Section 77 of Consumer Act does not apply – refers to
goods which are primarily for personal, family, household,
or agricultural purposes – goods in this case are for
industrial use
Class notes:
• what is the definition of a trade secret? see this case
• we protect trade secrets, but what exactly are we
protecting?
• sources of trade secret law:
1. first restatement of torts
• broad - covers any information
• applies tort theory
• required that secret be used in one's business
• six factors to determine existence of trade secret
2. uniform trade secrets act
3. third restatement of unfair competition
differences
1. restatement
- requires secret to be used in one's business
- efforts to maintain secrecy a factor
- tort rule
2. USTA
- does not need to be used; can be actual or potential
(singular/ephemeral information, negative information, no
longer used, never been used)
- property rule
• pensswell case followed restatement
• trips agreement follows USTA
• that's an issue: what definition of trade secret do we
follow?
B. SOURCES OF TRADE SECRET LAW IN THE U.S.
SECTION 757 AND COMMENT B, 1939 RESTATEMENT
(FIRST) OF TORTS
SECTION 757. LIABILITY FOR DISCLOSURE OR USE OF
ANOTHER' S TRADE SECRET GENERAL PRINCIPLE. One who
discloses or uses another's trade secret, without a privilege to
do so, is liable to the other if
a. he discovered the secret by improper means, or
b. his disclosure or use constitutes a breach of
confidence reposed in him by the other in disclosing
the secret to him, or
c. he learned the secret from a third person with
notice of the facts that it was a secret and that the
third person discovered it by improper means or that
the third person's disclosure of it was otherwise a
breach of his duty to the other, or
d. he learned the secret with notice of the facts that it
was a secret and that its disclosure was made to
him by mistake.
Note: This follows the tort rule/relationship theory
U.S. UNIFORM TRADE SECRETS ACT
(too long to paste)
SECTIONS 38-45, RESTATEMENT OF THE LAW (THIRD),
UNFAIR COMPETITION
Topic 1.
Misappropriation
§ 38. Appropriation Of Trade Values
One who causes harm to the commercial relations of another
by appropriating the other's intangible trade values is subject
to liability to the other for such harm only if:
(a) the actor is subject to liability for an appropriation of the
other's trade secret under the rules stated in §§ 39-45; or
(b) the actor is subject to liability for an appropriation of the
commercial value of the other's identity under the rules stated
in §§ 46-49; or
(c) the appropriation is actionable by the other under federal
or state statutes or international agreements, or is actionable
as a breach of contract, or as an infringement of common law
copyright as preserved under federal copyright law.
Topic 2. Trade Secrets
§ 39. Definition Of Trade Secret
A trade secret is any information that can be used in the
operation of a business or other enterprise and that is
sufficiently valuable and secret to afford an actual or
potential economic advantage over others.
ADL
§ 40. Appropriation Of Trade Secrets
One is subject to liability for the appropriation of another's
trade secret if:
a. the actor acquires by means that are improper under
the rule stated in § 43 information that the actor
knows or has reason to know is the other's trade
secret; or
b. the actor uses or discloses the other's trade secret
without the other's consent and, at the time of the
use or disclosure,
(1) the actor knows or has reason to know that the
information is a trade secret that the actor acquired
under circumstances creating a duty of confidence
owed by the actor to the other under the rule stated
in § 41; or
(2) the actor knows or has reason to know that the
information is a trade secret that the actor acquired
by means that are improper under the rule stated in
§ 43; or
(3) the actor knows or has reason to know that the
information is a trade secret that the actor acquired
from or through a person who acquired it by
means that are improper under the rule stated in
§ 43 or whose disclosure of the trade secret
constituted a breach of a duty of confidence owed
to the other under the rule stated in § 41; or
(4) the actor knows or has reason to know that the
information is a trade secret that the actor acquired
through an accident or mistake, unless the acquisition
was the result of the other's failure to take reasonable
precautions to maintain the secrecy of the
information.
§ 41. Duty Of Confidence
A person to whom a trade secret has been disclosed owes a
duty of confidence to the owner of the trade secret for
purposes of the rule stated in § 40 if:
(a) the person made an express promise of confidentiality
prior to the disclosure of the trade secret; or
(b) the trade secret was disclosed to the person under
circumstances in which the relationship between the parties
to the disclosure or the other facts surrounding the disclosure
justify the conclusions that, at the time of the disclosure,
(1) the person knew or had reason to know that the
disclosure was intended to be in confidence, and
(2) the other party to the disclosure was reasonable in
inferring that the person consented to an obligation of
confidentiality.
§ 42. Breach Of Confidence By Employees
An employee or former employee who uses or discloses a
trade secret owned by the employer or former employer in
breach of a duty of confidence is subject to liability for
appropriation of the trade secret under the rule stated in § 40.
§ 43. Improper Acquisition Of Trade Secrets
“Improper” means of acquiring another's trade secret under
the rule stated in § 40 include theft, fraud, unauthorized
interception of communications, inducement of or knowing
participation in a breach of confidence, and other means either
wrongful in themselves or wrongful under the circumstances of
the case. Independent discovery and analysis of publicly
available products or information are not improper
Page 93
means of acquisition.
§ 44. Injunctions: Appropriation Of Trade Secrets
(1) If appropriate under the rule stated in Subsection (2),
injunctive relief may be awarded to prevent a continuing or
threatened appropriation of another's trade secret by one who
is subject to liability under the rule stated in § 40.
(2) The appropriateness and scope of injunctive relief depend
upon a comparative appraisal of all the factors of the case,
including the following primary factors:
(a) the nature of the interest to be protected;
(b) the nature and extent of the appropriation;
(c) the relative adequacy to the plaintiff of an injunction and of
other remedies;
(d) the relative harm likely to result to the legitimate interests
of the defendant if an injunction is granted and to the
legitimate interests of the plaintiff if an injunction is denied;
(e) the interests of third persons and of the public;
(f) any unreasonable delay by the plaintiff in bringing suit or
otherwise asserting its rights;
(g) any related misconduct on the part of the plaintiff; and
(h) the practicality of framing and enforcing the injunction.
(3) The duration of injunctive relief in trade secret actions
should be limited to the time necessary to protect the plaintiff
from any harm attributable to the appropriation and to deprive
the defendant of any economic advantage attributable to the
appropriation.
§ 45. Monetary Relief: Appropriation Of Trade Secrets
(1) One who is liable to another for an appropriation of the
other's trade secret under the rule stated in § 40 is liable for
the pecuniary loss to the other caused by the appropriation or
for the actor's own pecuniary gain resulting from the
appropriation, whichever is greater, unless such relief is
inappropriate under the rule stated in Subsection (2).
(2) Whether an award of monetary relief is appropriate and
the appropriate method of measuring such relief depend upon
a comparative appraisal of all the factors of the case, including
the following primary factors: (a) the degree of certainty with
which the plaintiff has established the fact and extent of the
pecuniary loss or the actor's pecuniary gain resulting from the
appropriation; (b) the nature and extent of the appropriation;
(c) the relative adequacy to the plaintiff of other remedies; (d)
the intent and knowledge of the actor and the nature and
extent of any good faith reliance by the actor; (e) any
unreasonable delay by the plaintiff in bringing suit or otherwise
asserting its rights; and (f) any related misconduct on the part
of the plaintiff.
D. SUBJECT MATTER OF PROTECTION
Class notes:
what can be a trade secret?
1. information – chemical formula, algorithm, recipes
2. pattern – drawings to make a machine
3. compilation - customer lists, marketing data, etc.
4. program - computer
5. device - design of a machine
6. method, technique or process – way of doing
two categories
- technical
- business
C.1. COCOLAND V. NLRC, G.R. NO. 98458 (1996)
Mago works as a field supervisor for Cocoland, he is an
agriculturist by profession. He was charged by the company
that he was imparting company technology in coffee
propagation techniques to outsiders (farm owners) thus
violated the policy against unauthorized disclosure of trade
secrets. Mago explained that he did in fact gave consultancy
service for a fee, however, the technology he was sharing was
no longer a secret since it has been learned by other parties
since 1986. Besides, he wasn’t the first person from the
company to provide consultancy to third parties (there was this
Seña person). Cocoland, through Dela Cruz, asked Mago to
explain and when he offered his explanation, the same was
not found satisfactory thus he was terminated from service.
Cocoland alleges that it has the power to determine what a
trade secret is.
Held:
• Any determination by management as to the
confidential nature of technologies, processes,
formulae or other so-called trade secrets must
have a substantial factual basis which can pass
judicial scrutiny.
o This is but an ineludible corollary of the time-
tested principle that "the rules, instructions or
commands in order to be a ground for discharge
on the score of disobedience, must be reasonable
and lawful, must be known to the employee, and
must pertain to the duties which the employees
have been engaged to discharge”.
o A fictitious or non-existent "secret" (or a publicly
known one as in the instant case) can in no wise
be the basis of a reasonable and lawful rule or
company policy regarding confidentiality.
• As observed by the Solicitor General, such a stand is
contrary to the State's policy of affording protection to
labor. Sustaining such contention would permit an
employer to label almost anything a trade secret,
and thereby create a weapon with which he/it may
arbitrarily dismiss an employee on the pre-text that
the latter somehow disclosed a trade secret, even if
in fact there be none at all to speak of.
• ITC: Had Cocoland successfully established by competent
evidence the existence of such company policy as well as
the confidential nature of its technology, perhaps things
might have turned out differently.
Class notes:
judicial prerogative
it's the court that determines what is a trade secret
C.2. CAPITAL ASSET RESEARCH V. FINNEGAN, 160 F.3D
683 (1998)
CARC and Breen are competitors engaged in the business of
purchasing tax liens from the government and purchasing tax
deeds at bargain rates. CARC filed a case against Breen and its
former employee Finnegan, alleging breach of contract and
violation of Georgia Trade Secrets Act of 1990. It alleged that
Finnegan, now an agent of Breen, acquired twenty-four
properties at a public auction as a result of Finnegan's
misappropriation of trade secret information from CARC
(comprised mostly of information used to come up with
valuations and maximum bids for properties). 11 The district
11
court ruled in favor of CARC, awarded damages in its favor,
and enjoined Finnegan from having any dealings for one year
with the properties involved.
Held:
• CARC's method--assembling public information about the
value of a property and deciding what bid amount
represents the permissible financial risk--is simply not a
trade secret. It is something that any sufficiently
informed and experienced bidder can and would do.
o Not unique combinations affording their
possessor a competitive advantage.
• The bulk of the information CARC uses in this process is
available to the public or that the method utilized by
CARC is the same basic method by which any informed
buyer would prepare to submit an intelligent bid at any
auction.
o Some are matters of public record.
o CARC's Vice-President admitted that CARC
does not have an exclusive relationship with
its institutional lenders and that a
competitor, like Breen, could have "access
to the very same lending criteria."
• CARC failed to explain how a competitor, armed with its
own information about the value of the underlying
properties and its own financial considerations, could
reap economic value from knowledge of CARC's "bid
guidelines."
C.3. AMP, INC. V. FLEISCHHACKER, 823 F.2D 1199
(1987)
The plaintiff, AMP Incorporated, brought this action against a
former employee, James Fleischhacker, and one of its
competitors, Molex, alleging unfair competition and
misappropriation of trade secrets. Fleischhacker was pirated by
Molex from AMP to be the Director of Marketing. AMP alleged
that Fleischhacker was bound by a restrictive covenant
especially so because he held trade secrets.
Held:
No restrictive covenant
• Mr. Fleischhacker was not bound by a valid and
enforceable restrictive covenant. But he, however, signed
a confidentiality agreement.
• The language of this confidentiality agreement purports to
prohibit Mr. Fleischhacker from disclosing to any non-
AMP personnel any information relating to AMP
and its operations forever.
• The Illinois courts have held unenforceable nearly
identical provisions in confidentiality agreements
because (1) they contain no limitation on the duration
of the nondisclosure provision, instead restricting
the assessed value of the property; the valuation reports on
the property produced by third-party real-estate information
database services; the attributes of the property and the
neighborhood based on "drive-bys" of the site by CARC
employees; and a prediction of the property owner's likelihood
of redeeming the tax liens and making interest payments based
on the specific owner's payment record and CARC's
national averages of tax redemption behavior.
ADL
disclosure "during and subsequent to the period of said
employment," and (2) they contain no geographical
limitation or other kind of limit on the parties to
whom the employee is prohibited from disclosing
information.
• Confidentiality agreements without such
limitations (duration, geographical, parties)
constitute unreasonable restraint of trade.
No particular trade secret
• AMP contends that it has protectible trade secrets in a
host of confidential information to which Mr. Fleischhacker
had access during the course of his employment.
However, AMP has consistently failed throughout
this litigation to identify any particularized trade
secrets actually at risk. 12
Employee’s skills
• An employee is free to take with him general skills
and knowledge acquired during his tenure with his
former employer, especially if he did not take the
form of written records, compilations or analyses.
o General confidential information identified by
AMP cannot constitute protectible business
secrets.
o the hiring of a close competitor's executives
is a usual and permissible practice in any
industry
Effect of restrictive convenants on what matters may not be
disclosed
• Where the parties have entered into a restrictive
covenant not to compete, the scope of protection
afforded a former employer is quite broad and may
extend to the type of generalized confidential
business information to which AMP points.
• Absent such a covenant, however, the plaintiff
must demonstrate the existence of a genuine trade
secret to obtain injunctive relief.
o the "right to impose contractual restraints does
not render the same knowledge 'trade secrets' in
the absence of such restraints.
Class notes:
o plaintif failed to identify the particular trade secret
involved, general lang
o amp did not protect its interests with a reasonable
restrictive covenant not to compete. it cannot now use
trade secret law to accomplish this purpose
o trade secret must be specific - does not include
employee's general skill
o employee is free to take with him that which is comprised
of general skill and knowledge even if acquired in the
12
This information, it alleges, includes: business and strategic
planning information for the Components & Assemblies
Division; new product development information;
manufacturing information, including equipment, processes,
cost and capacity information; financial information, including
product-line profit-margin, sales, and budget information; and
marketing and customer information
Page 95
 course of employment
C.4. DYNAMICS RESEARCH CORPORATION V.
ANALYTIC SCIENCES CORP., 9 MASS. APP. CT. 254
1980)
Bicknell was formely employed by DRC. He worked on the
TIRAS project. When he resigned from employment, he
worked with Analytic wherein he developed projects somewhat
similar to what he did with DRC. DRC filed a case against
Bicknell and Analytic, stating that there was a misappropriation
of trade secret.
Held:
a. The trade secret should be unique.
• In this case, the uniqueness alleged by DRC was not
proven. DRC had the burden of proving it.
b. It was difficult to separate “trade secret” from skills
developed by Bicknell in DRC from his talents derived from
extensive experience that he had even before being
employed by DRC.
• Bicknell graduated from good schools and had
technical knowledge from previous experience;
c. The non-disclosure agreement was not clear on the “trade
secrets” that DRC aimed to protect.
Held:
• Here again we find a jargonization of the obvious,
which comes down to nothing more than
gathering information sufficiently comprehensive
to aid in the solution of whatever problems the
customer wishes to be in a position to solve should
they arise, limited, however, by considerations of the
costs of gathering the data.
o Use of collected information, threaded
lists are common concepts.
• While customers may be attracted to the plaintiff's
system by the role of the TIRAS engineers and the
detailed nature of the data collected, it was clearly
not the secrecy of these publicized features
applying obvious notions which gave the
plaintiff its competitive advantage.
• The plaintiff's capability to provide the type of service
described in part 2 of this opinion derives from its
ability and willingness to marshal the resources
and talent necessary for this very complex
task.
• DRC is not entitled to protection of a monopoly
created by its unique capability. Uniqueness
without more is not commensurate with
possession of a trade secret.
• No measures to retain secrecy: Nor is there a finding
or evidence that the plaintiff "pursued an active
course of conduct designed to" bring home to Bicknell
or any other employee that any aspect of TIRAS was
to be kept secret.
o In the circumstances of this case, the
nondisclosure agreement which Bicknell
signed on entering DRC's employ cannot
be said to have put Bicknell on notice,
either when he signed it or at any time
thereafter, that the obvious notions with
which he was working were trade
secrets.
o A nondisclosure agreement which
seeks to restrict the employee's
right to use an alleged trade secret
which is not such in fact or in law is
unenforceable as against public
policy.
Class notes:
• jargonization of the obvious
o does not matter if the information is unique.
dressing up the description to cover what really is
skill generally known and decorates with words
that are designed for incomprehension
o e.g. the technique of pulling out and collecting a
detailed life history of the object - in short
gathering informtion lang
SUMMARY:
A trade secret:
1. must be complete, specific, not general areas of
information
2. excludes employee's general skill, knowledge and
training even if acquired or enhanced through resources
of former employer
3. USTA - no requirement relating to the use of
information
a. can be a single event (secret bid) - not in continuous use
- example Smartmatic bid
b. capable of continuous use or operation
c. can be not in use in business - ordinary investor, religious
organization
d. not in positive use (negative info) - those that will not
work
e. not yet in use - still the subject of research and
development
D. VALUE
D.1. RELIGIOUS TECHNOLOGY CENTER V.
WOLLERSHEIM, 796 F.2D 1076 (1986)
The Church of the New Civilization (New Church) is a splinter
from the Church of Scientology (Church). The Church alleged
that certain scriptural materials offered by the New Church
were copies of materials stolen from the Church. Recognizing
federal jurisdiction under the Racketeer Influenced and Corrupt
Organization Act (RICO), the district court held that the
Church’s materials constituted a trade secret and granted the
Church a preliminary injunction ordering the New Church to
desist from using or disseminating the disputed materials.
Held:
• To be protectible as a trade secret, the confidential
material must convey an actual or potential
commercial advantage, presumably measurable in
dollar terms.
• We do not accept that a trade secret can be based
on the spiritual advantage the Church believes its
adherents acquire over non-adherents by using the
materials in the prescribed manner.
• Former Restatement Sec. 757 defines trade secrets as
information which is "used in one's business, and which
gives him an opportunity to obtain an advantage over
competitors who do not know or use it."
o “Derives independent economic value,
actual or potential, from not being
generally known to the public or to other
 persons who can obtain economic value
from its disclosure or use;”
o This statutory element carries forward the
common law requirement of competitive
advantage.
• Information that can have no commercial value cannot be
the subject of trade secret protection.
• If an outsider would obtain a valuable share of the market
by gaining certain information, then that information may
be a trade secret if it is not known or readily
ascertainable.
• The value of the confidential materials is thus
spiritual not commercial, and the materials cannot
be said to have the "independent economic value"
necessary to qualify as a protectible trade secret.
ITC:
• The injury inflicted on the Church by the new church's
misappropriation of its "secret" is the "religious harm.”
• The value of the confidential materials is thus spiritual not
commercial, and the materials cannot be said to have the
"independent economic value" necessary to qualify as a
protectible trade secret.
Class notes:
• documents that have significant religious value
• religious value is not the value that defines the
trade secret; must be commercial value
SUMMARY: value
1. independent and economic
• information itself gives an advantage, need not be great
as long as it gives an advantage
2. actual or potential value
- negative know-how has value - saves time, money, leads to
better results
E. SECRECY
E.1. RIVENDELL FOREST PRODS. V. GEORGIA-PACIFIC
CORP., 28 F.3D 1042 (10TH CIR. 1994)
Rivendell, an entity engaged in the lumber business, alleged
that Georgia-Pacific misappropriated its trade secrets,
particularly its computer software system. It asserts that this
system enabled Rivendell to provide its customers with special
service, and to manage its distribution centers as no
competitor could do. This was a computer system which
enabled Rivendell employees to give immediate answers to
customers' questions and phone inquiries as to prices,
quantities, places, and delivery time as to various lumber sizes
and types without any computations which required a delay
and a call back to the customer. It asserted that at the
pertinent time no other wholesaler could provide such service
and management, and this gave Rivendell a large advantage
over its competitors including G.P.
The lower court required that the software system be
examined bit by bit with the further requirement that Rivendell
demonstrate protectability of its elements or some of them
rather than the protectability of the software system as a
whole.
Held:
• A trade secret can exist in a combination of
ADL
characteristics and components, each of which, by
itself, is in the public domain, but the unified
process, design and operation of which, in unique
combination, affords a competitive advantage and is
a protectable secret."
• A trade secret can include a system where the elements
are in the public domain, but there has been accomplished
an effective, successful and valuable integration of
the public domain elements and the trade secret gave the
claimant a competitive advantage which is protected
from misappropriation.
ITC:
• The software is a protectable trade secret.
• We must disagree with the trial court's first statement
above that Rivendell had not shown it had a protectable
methodology.
o The record establishes the production by
Rivendell's software system of immediate
final pricing by the integration of the many
computations as to size of lumber, type of
lumber, location of the lumber, size of
bundles, freight charges, time of delivery,
and other factors to permit the immediate
quotation of a total price.
o It was the only system in the industry which
could accomplish this.
• The evidence as to the quick development (four months)
after Cornwell went to work for G.P. with the affidavits
that the G.P. employees used Cornwell's ideas and the fact
that Cornwell had never seen G.P.'s scattered systems
before he developed G.P.'s Quick Quote integrated system
were important because they demonstrated that he and
G.P. relied entirely on Rivendell's system.
Class notes:
• trade secret can include a system where the elements
are in the public domain, but there has been
accomplished an effective, successful and valuable
integration of the public domain elements and the trade
secret gave the claimant a competitive advantage
which is protected from misappropriation
E.2. ROHM AND HAAS CP., V. ADCO CHEMICAL CO., 689
F.2D 424 (1982)
Plaintiff manufactures “second generation” latex paint which is
made through a process claimed as a trade secret. Defendant
was able to replicate the process and develop a similar kind of
product by hiring a former employee of the plaintiff who has
direct knowledge of the process. The lower court held that
plaintiff failed to establish the existence of a trade secret
because most, if not all, of the elements of plaintiff’s process
were long and widely known in trade. 13
Held:
13
The law of both Pennsylvania and New Jersey establish five
basic elements of the claim: (1) the existence of a trade secret,
(2) communicated in confidence by the plaintiff to the
employee, (3) disclosed by the employee in breach of that
confidence, (4) acquired by the competitor with knowledge of
the breach of confidence, and (5) used by the competitor to the
detriment of the plaintiff.
Page 97
• Even though each and every element of plaintiff's Process
is known to the industry, the combination of those
elements may be a trade secret if it "produces a product
superior to that of competitors."
ITC: there was a protectable trade secret
• Plaintiff's proof that the Process was its secret consisted of
demonstrating by the realities of the marketplace that this
valuable method of producing latex paint vehicles was
unknown to its competitors. Apart from defendants,
plaintiff was the only manufacturer to use the Process and
as a result it could offer four superior products. Other
competitors had tried and failed to put competing
products on the market.
• Defendants' expert admitted that the publications claimed
to reveal the elements of the Process were unknown both
to defendants and to him prior to this lawsuit.
• Under both New Jersey and Pennsylvania law, these facts
were sufficient to establish that the alleged secret is in
fact the secret of a particular employer, and not a matter
of general knowledge within the industry.
• The district court did not find as a fact that the Process
was part of Harvey's general knowledge, skill or
experience. Harvey himself admitted that his process was
based on his recollection of plaintiff’s process.
Class notes:
combination of elements may be a trade secret if it produces a
product superior to that of competitors
E.3. BARNETT V, SHIDLER, 338 F.3D 1125 (2003)
Plaintiffs Harvey Barnett, Inc. and Infant Swimming Research,
Inc. (collectively, "ISR") filed a complaint against three former
employees, alleging misappropriation of trade secrets. The
employees signed a "Nondisclosure and Confidentiality
Agreement" and a license agreement containing a further
"Confidentiality of Information" provision as well as a
"Covenant Not to Compete." Notwithstanding these
agreements, on leaving ISR in 2000, the three former
employees started Infant Aquatic Survival ("IAS"), a new
company devoted to teaching infant and child swimming in
Colorado. Defendants’ program is allegedly similar to plaintiff’s
in that it utilizes the same "swim, float, swim" method,
implements some of the same safety protocols, uses a Daily
Health Data Sheet similar to the BUDS sheet, uses a
comparable registration form, and distributes a comparable
parent resource book to parents of children enrolled in the IAS
program. The lower court found that ISR’s program is part of
the public domain. 14
Held:
• In Rivendell, this Court held, consistent with Colorado law,
14
the district court determined that (1) "[v]ariations of the
swim, float, swim method are known both inside and outside
the children's aquatic business," (2) ISR did not take
precautions to guard the secrecy of its information "until at
least 1996, after hundreds of instructors had been trained and
thousands of students taught," (3) "[p]arents and bystanders
were allowed to watch and videotape lessons," and (4) "a
variation on ISR's methods could be created through a perusal
of commercially available child psychology, child health, and
swimming instruction books.”
that information can be a trade secret notwithstanding the
fact that some of its components are well-known
• "[A] trade secret can exist in a combination of
characteristics and components each of which, by itself, is
in the public domain, but the unified process, design and
operation of which, in unique combination, affords a
competitive advantage and is a protectable secret."
o The district court improperly looked at
components of the ISR program in isolation,
rather than as a whole, in determining that
ISR does not possess a trade secret.
ITC: ISR program is a trade secret.
• Dr. Barnett's program was the only program which offered
a behavioral approach to pediatric drowning prevention
• the ISR program is "unique unto itself" and "not capable
of being copied simply by watching from poolside."
• he knows of no other aquatic program whose specific goal
is to certify instructors, in a five-week time frame, to teach
infants and toddlers aquatic survival skills.
• Measures to guard secrecy – franchise and license
agreements with confidentiality restrictions.
Class notes:
• secrecy is required
• you cannot steal something that is already in the public
domain
SUMMARY (SECRECY):
1. must not be generally known
• referring to others to whom the information has potential
economic value
• reflects a certain novelty
2. secrecy need not be absolute
• not all disclosures destroy secrecy - e.g. licensing
agreements, disclosure to employees
• if disclosure to others is made in the furtherance of an
economic benefit
- patent application - you make it public
- marketed products - unapparent and apparent
- government-compelled disclosures, e.g. in cheaper medicines
act, consumer protection act
- inadvertent or improper disclosure as long as not
made to the general public
3. but must not be readily ascertainable
• would be difficult, costly or time consuming to get
• may be shown by:
1. security measures taken
2. willingness of licensees to pay
3. unsuccessful attempts to duplicate
4. resort to improper means
- examples: a. duplication in 8 to ten hours - not a trade
secret; b. 3 to 4 months to reverse engineer - can be
considered a trade secret
F. REASONABLE EFFORTS TO MAINTAIN SECRECY
Class notes:
• policy: self-help, sufficiently important to sue defendant,
• plaintiff should have given adequate care and protection
 to that which he asks the court for assistance
F.1. ROCKWELL GRAPHIC SYSTEMS, INC. V. DEV
INDUSTRIES, 925 F.2D 174 (1991)
Rockwell Graphic Systems, a manufacturer of printing presses
and replacement parts used by newspapers, and of parts for
those presses, brought the suit against DEV Industries, a
competing manufacturer, and against the president of DEV,
who used to be employed by Rockwell. Rockwell subcontracts
the manufacturing of some parts to independent machine
shops, providing the latter with piece part drawings indicating
dimensions, details, etc. of the parts. Rockwell keeps all its
engineering drawings, including both piece part and assembly
drawings, in a vault. Access not only to the vault, but also to
the building in which it is located, is limited to authorized
employees who display identification. Respondent was able to
procure copies of these piece parts.
Held:
• The requirement of reasonable efforts to maintain
secrecy has both evidentiary and remedial
significance:
1. Gives a remedy to a firm deprived of a
competitively valuable secret as the result of an
independent legal wrong.
o The first emphasizes the desirability of
deterring efforts that have as their sole
purpose and effect the redistribution of
wealth from one firm to another.
o the plaintiff must prove that the defendant
obtained the plaintiff's trade secret by a
wrongful act
o The greater the precautions that Rockwell
took to maintain the secrecy of the piece
part drawings, the lower the probability that
DEV obtained them properly and the higher
the probability that it obtained them through
a wrongful act; the owner had taken pains to
prevent them from being obtained
otherwise.
2. Trade secrets are socially valuable information that
the law should protect even against
nontrespassory or other lawful conduct.
o The second emphasizes the desirability of
encouraging inventive activity by protecting
its fruits from efforts at appropriation that
are, indeed, sterile wealth-redistributive--not
productive--activities.
o The owner's precautions still have
evidentiary significance, but now primarily as
evidence that the secret has real value. For
the precise means by which the defendant
acquired it is less important under the
second theory.
o The information contained in the drawings
cannot have been worth much if Rockwell
did not think it worthwhile to make serious
efforts to keep the information secret.
ITC:
• The mere fact that Rockwell gave piece part
drawings to vendors--that is, disclosed its trade
secrets to "a limited number of outsiders for a
particular purpose"--did not forfeit trade secret
ADL
protection.
o On the contrary, such disclosure, which is
often necessary to the efficient exploitation
of a trade secret, imposes a duty of
confidentiality on the part of the person to
whom the disclosure is made.
• Obviously Rockwell took some precautions, both physical
(the vault security, the security guards--one of whom
apprehended Peloso in flagrante delicto ) and contractual,
to maintain the confidentiality of its piece part drawings.
Obviously it could have taken more precautions. But at a
cost, and the question is whether the additional benefit in
security would have exceeded that cost.
Class notes:
2 different conceptions of trade secret protection
(1) remedy for deprivation of property - tort
• existence of measures to maintain secrecy
prove that the trade secret was acquired
using unlawful means
(2) socially valuable property – property
• existence of trade secret measures prove
value of trade secret
• reasonable is the key word
F.2. METALLURGICAL INDUSTRIES V. FOURTEK 790
F.2D 1195(1986)
Metallurgical contracted Them-O-Vac through its
representative Bielefeldt to construct the first furnace for the
carbide reclamation process. It was dissatisfied and made
modifications. Consarc was shown the modified furnace to
construct the second one. But Consarc admitted that it cannot
build it. Metallurgical ended having Therm-O-Vac create its
second furnace. Metallurgical went bankcrupt. Bielefeldt and
three former employees of Metallurgical formed Fourtek.
Fourtek constructed furnace for Smith. Metallurgical sued
Fortek for trade secret misappropriation. Defendant argues
that plaintiff’s disclosure to other parties vitiated the secret to
obtain legal protection.
Held:
• Plaintiff’s particular modification efforts can be considered
as trade secrets.
• Although the law requires secrecy, it NEED NOT BE
ABSOLUTE. Public revelation would, of course, dispel all
secrecy, but the holder of a secret need not remain totally
silent:
1. He may, without losing his protection, communicate it to
employees involved in its use.
2. He may likewise communicate it to others pledged to
secrecy
• Nevertheless, a substantial element of secrecy
must exist, so that except by the use of improper
means, there would be difficulty in acquiring the
information.
• LIMITED DISCLOSURE: We conclude that a holder
may divulge his information to a limited extent
without destroying its status as a trade secret. To
hold otherwise would greatly limit the holder's
ability to profit from his secret.
Page 99
ITC:
• Blum testified that he noted security measures taken to
conceal the furnaces from all but authorized personnel.
• The furnaces were in areas hidden from public view, while
signs warned all about restricted access.
• Company policy, moreover, required everyone authorized
to see the furnace to sign a non-disclosure agreement.
• Metallurgical's disclosures to others are limited and
therefore insufficient to extinguish the secrecy
Metallurgical's other evidence has suggested.
o First, the disclosures were not public
announcements; rather, Metallurgical
divulged its information to only two
businesses with whom it was dealing.
o Second, the disclosures were made to
further Metallurgical's economic
interests. Metallurgical revealed its
discoveries as part of business transactions
by which it expected to profit.
Disclosure to Consarc was made
with the hope that Consarc could
build the second furnace. A
longstanding agreement gave La
Floridienne the right, as a licensee,
to the information in exchange for
royalty payments.
• Metallurgical's case would have been stronger had it also
presented evidence of confidential relationships with these
two companies, but we are unwilling to regard this failure
as conclusively disproving the limited nature of the
disclosures.
o Confidentiality is not a requisite, it is
merely a factor to consider.
F.3. IVAN PARAMANANDAM, ET AL. V. VICTORIA
HERRMANN, ET AL. 827 N.E. 2D 1173 (2005)
Victoria hired petitioner to develop a website for Dynamic
Scales’ online retail store. Defendants gave petitioner the
password to make changes to the website. Hundreds of
domain names, among them Mall88.com, direct potential
customers to Dynamic Scales’ website. After Ivan and
petitioners terminated their business relationship, Ivan
constructed a website which was practically identical in both
content and appearance to Dynamic Scales’ website. Ivan
appropriated the Mall88.com domain for his own business.
Dynamic Scales sued Ivan, alleging that the information
contained on its website and the domain names were trade
secrets.
Held:
• The record indicates that the only relevant information
that did not appear on Dynamic Scales’ website was the
price of its products, which Appellants are not alleged to
have misappropriated.
• As for the domain names, there is simply no evidence that
Dynamic Scales made any efforts to keep them secret. In
fact, the record indicates that Dynamic Scales intended or
the domain names to be readily available to potential
customers searching the internet as a means of directing
them to its online retail store. Petitioner’s sole proprietor
testified that they chose not the secretive.
ITC: Dynamic Scales failed to establish any efforts to maintain
secrecy. Dynamic Scales made no efforts to maintain secrecy
of the information contained on its website or its domain
names
• Appellants might well have tampered with or infringed
certain proprietary interests regarding Dynamic Scales’
website and domain names, but any recovery must be
pursued under a different legal theory (unfair
competition).
Class notes:
• they chose not to be secretive.
• details were posted on the website for everyone to see.
• dynamic scales made no efforts to maintain secrecy
F.4. E.I. DUPONT DENEMOURS & CO. V. CHRISTOPHER,
431 F.2D 1012 (1971)
Defendants-appellants, Rolfe and Gary Christopher, are
photographers in Beaumont, Texas. The Christophers were
hired by an unknown third party to take aerial photographs of
new construction at the Beaumont plant of E. I. duPont
deNemours & Company, Inc. Sixteen photographs of the
DuPont facility were taken from the air. DuPont subsequently
filed suit against the Christophers, alleging that the
Christophers had wrongfully obtained photographs revealing
DuPont's trade secrets which they then sold to the undisclosed
third party. DuPont contended that it had developed a highly
secret but unpatented process for producing methanol. The
area photographed by the Christophers was the plant designed
to produce methanol by this secret process, and because the
plant was still under construction parts of the process were
exposed to view from directly above the construction area.
Photographs of that area, DuPont alleged, would enable a
skilled person to deduce the secret process for making
methanol.
Held:
Requirement of trespass or other illegal conduct
• Although the previous cases have dealt with a breach of a
confidential relationship, a trespass, or other illegal
conduct, the rule is much broader than the cases
heretofore encountered. Not limiting itself to specific
wrongs, Texas adopted subsection (a) of the Restatement
which recognizes a cause of action for the discovery of a
trade secret by any 'improper' means.
• Aerial photography of plant construction is an
improper means of obtaining another’s trade
secret.
o Having concluded that aerial photography,
from whatever altitude, is an improper
method of discovering the trade secrets
exposed during construction of the DuPont
plant, we need not worry about whether the
flight pattern chosen by the Christophers
violated any federal aviation regulations.
Regardless of whether the flight was
legal or illegal in that sense, the
espionage was an improper means of
discovering DuPont's trade secret.
o One may use his competitor's secret process
if he discovers the process by reverse
engineering or independent research; but
one may not avoid these labors by taking the
process from the discoverer without his
permission at a time when he is taking
reasonable precautions to maintain its
secrecy.

On reasonable measures to protect secrecy
• We should not require a person or corporation
to take unreasonable precautions to prevent
another from doing that which he ought not do
in the first place.
• Our tolerance of the espionage game must cease
when the protections required to prevent another's
spying cost so much that the spirit of inventiveness is
dampened.
• Commercial privacy must be protected from
espionage which could not have been
reasonably anticipated or prevented.
• Perhaps ordinary fences and roofs must be
built to shut out incursive eyes, but we need
not require the discoverer of a trade secret to
guard against the unanticipated, the
undetectable, or the unpreventable methods of
espionage now available.
o To require DuPont to put a roof over the
unfinished plant to guard its secret would
impose an enormous expense to prevent
nothing more than a school boy's trick.
Class notes:
• it was not reasonable to expect plaintiffs to protect trade
secret chemical process from aerial photography
a. we dont want super expensive self-help
b. need to provide legal means of redress
• even if what defendant did was not illegal, plaintiff can
still obtain relief if through those means he obtained a
trade secret - follows property theory not tort theory
of trade secret protection
G. DEFENSES
REVERSE ENGINEERING
G.1. CHICAGO LOCK CO., V. FANBERG, 676 F.2D 400
(1982)
Chicago Lock Co. (“the company”) manufactures high quality
tubular locks, the popularity of which was said to be due to the
secrecy and difficulty of reproduction associated with said
keys. Fanberg, on the other hand, is a locksmith. He realized
there are no available manuals for tubular lock key codes in
the market yet, so he thought it was a good idea to come up
with one. To achieve this feat, he requested other locksmiths
to transmit to him serial number-key code correlations in
exchange for a copy of the compilation. A good number of
locksmiths happily contributed. At the time the company
brought a suit against Fanberg for allegedly acquiring trade
secrets through improper means, about 350 copies have
already been sold at $49.95 each. District Court ruled in favor
of the company but this was reversed by the circuit court.
Held:
• Trade secrets are protected, therefore, in a manner akin
to private property, but only when they are disclosed
or used through improper means.
• Trade secrets do not enjoy the absolute monopoly
protection afforded patented processes, for example,
and trade secrets will lose their character as private
property when the owner divulges them or when
they are discovered through proper means.
ADL
o Thus, it is the employment of improper
means to procure the trade secret, rather
than mere copying or use, which is the
basis of liability.
• "It is well recognized that a trade secret does not offer
protection against discovery by fair and honest means
such as by:
(1) independent invention
(2) accidental disclosure or
(3) by so-called reverse engineering, that is,
starting with the known product and working
backward to divine the process."
• A lock purchaser's own reverse-engineering of
his own lock, and subsequent publication of the
serial number-key code correlation, is an
example of the independent invention and
reverse engineering expressly allowed by trade
secret doctrine.
• Imposing an obligation of nondisclosure on lock
owners here would frustrate the intent of California
courts to disallow protection to trade secrets
discovered through "fair and honest means.
ITC: Trade secret not acquired by improper means
• Fanbergs' procurement of these individual locksmiths'
reverse engineering data is an "improper means" with
respect to appellee Chicago Lock Company.
• In their fiduciary relationship with lock owners, individual
locksmiths are reposed with a confidence and trust by
their customers, of which disclosure of the customers' key
codes would certainly be a breach. This duty, however,
could give rise only to an action by "injured" lock
owners against the individual locksmiths, not by
the Company against the locksmiths or against the
Fanbergs.
Class notes:
• reverse engineering is allowed in ascertaining what is a
trade secret
a. analysis of publicly available product
b. owner has no right to prevent reverse engineering
proper means of acquisition
reverse engineering
independent discovery
observations made
inevitable disclosure doctrine
- pepsi co v. redmund
- applicable only if the law allows relief for "actual or
threatened misappropiration" of a trade secret
we dont have trade secret law in PH but we have a definition
under jurisprudence then apply protection through laws
• NIRC
• Sec reg
• corp rehabilitation
• tort law
instances of existing obligations
contract law - through confidentiality agreement or non-
disclosure agreement - this is the next best thing to a trade
secret law
Page 101
 necessary to afford a fair and reasonable protection
IV. ENFORCEMENT BY CONTRACT to the party in whose favor it is imposed.
• contracts requiring exclusivity are not per se void.
Each contract must be viewed vis-à-vis all the
Class notes: circumstances surrounding such agreement in
PH appears to give wide latitude to contract provisions deciding whether a restrictive practice should be
- duncan and avon case prohibited as imposing an unreasonable restraint on
competition.
• no fixed rule to detemrine the validity or enforceability of • Only those arrangements whose probable effect is to
a non-compete clause foreclose competition in a substantial share of the line
of commerce affected can be considered as void for
factors to consider: being against public policy.
1. duties of employee which gave him access
2. nature of employer's business, amount of investment ITC:
3. agreement must specify the type of trade that the • Prohibition is not directed to eliminate competition.
employee will be prohibited from employing in Therefore, it is not void for being against public
4. limited in space and time policy.

• unlike non-compete clauses, non-disclosure SECTION 87 AND 88, IP CODE

agreements can be enforced perpetually
XII. TRADEMARKS IN THE INTERNET
1. DUNCAN ASSOCIATION OF DETAILMAN-PTGWO V. REPUBLIC ACT (R.A.) 10175, THE CYBERCRIME
GLAXO WELLCOME PHILS., 481 PHIL. 687 (2004) PREVENTION ACT OF 2012
At issue in this case is a company policy of respondent which 1. PANAVISION INTERNATIONAL V. TOEPPEN, 141
prohibits its employees from marrying employees of competitor F.3D 1316 (1998)
companies 2. PLANNED PARENTHOOD FEDERATION V. BUCCI, 152
F.3D 920
Held: 4. WIPO RECOMMENDATION CONCERNING THE
• Glaxo has a right to guard its trade secrets, especially so PROTECTION OF MARKS, AND OTHER INDUSTRIAL
that it and Astra are rival companies in the highly PROPERTY RIGHTS IN SIGNS, ON THE INTERNET
competitive pharmaceutical industry. 5. PRIVATE INTERNATIONAL ASPECTS OF THE
• The prohibition against personal or marital relationships PROTECTION OF TRADEMARKS, GRAEME B.
with employees of competitor companies is reasonable DINWOODIE
under the circumstances because relationships of that
nature might compromise the interests of the company.
o Glaxo did not impose an absolute prohibition
against relationships between its employees and
those of competitor companies. Its employees
are free to cultivate relationships with and marry
persons of their own choosing.
o What the company merely seeks to avoid is a
conflict of interest between the employee and the
company that may arise out of such
relationships.
o The policy is not a policy against marriage.
• In laying down the assailed company policy, Glaxo only
aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and
procedures.
• As held in a Georgia, U.S.A case, it is a legitimate business
practice to guard business confidentiality and protect a
competitive position by even-handedly disqualifying from
jobs male and female applicants or employees who are
married to a competitor.

2. AVON COSMETICS INCORPORATED, ET. AL V.

LETICIA H. LUNA, G.R. NO. 153674, DECEMBER 20,
2006

Held:
• Exclusivity clauses are agreements which prohibit the
obligor from engaging in business in competition with
the obligee.
• Thus, restrictions upon trade may be upheld when
not contrary to public welfare and not greater than is