Professional Documents
Culture Documents
]
M. A. CLARKE, plaintiff and appellant, vs. MANILA CANDY Co. (LTD.), defendant and
appellee.
1.TRADE-MARKS AND TRADE-NAMES; UNFAIR COMPETITION; INJUNCTION.A prayer
for an injunction forbidding the use of a specific emblem or design or 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.
2.ID.; ID.Plaintiff, a candy manufacturer, had for many years made use of a
pictorial representation of a rooster upon the packages and wrappers used in
connection with his business, and in advertising his goods had made continuous use
of a rooster as his trade-mark. Two of his workmen left his employ and organized a
corporation which engaged in the business of manufacturing candy. This corporation
adopted as its trademark an oval panel which has "as its central and predominating
feature two large and highly colored roosters in an attitude of combat" and has
made extensive use of this trade-mark on the packages and containers in which it
puts its candy on the market. Held: That in making such use of this trade-mark the
defendant was guilty of "unfair competition" as defined in Act No. 666.
APPEAL from a judgment of the Court of First Instance of Manila. Ostrand, J.
The facts are stated in the opinion of the court.
D. R. Williams for appellant.
Gilbert, Cohn & Fisher for appellee.
101
"II. That the plaintiff for twelve years last past has been and still is engaged in the
manufacture of a large line of confectionery products including candy of various and
numerous kinds in the said city of Manila.
"III. That ever since the year 1905, the plaintiff has used as a trade-mark to
designate his various candy products the representation of a rooster, and that until
the wrongful and unlawful acts of the defendant hereinafter specified, no other
manufacturer of or dealer in candy in the Philippine Islands has used such
representation in connection with the manufacture and sale of candy in any form.
"IV. That on the 10th day of November, 1911, the plaintiff caused to be duly filed
and registered in the division of archives, patents, copyrights and trade-marks for
the Philippine Islands, said trade-mark, as shown in Exhibit A hereto attached and
made a part of this complaint.
"V. That ever since said registration, and for a considerable time bef ore it, the label
containing said trade-mark has been used extensively by the plaintiff upon all
packages containing the candy of plaintiff.
"VI. That from the year 1905, the plaintiff has used as a wrapper, for individual
pieces of candy, paper bearing said rooster trade-mark in substantially the form
shown on Exhibit B hereto attached and made a part hereof.
"VII. That since July 31, 1911, plaintiff has distributed in connection with the
manufacture and sale of his candy many hundreds of the cards of which Exhibit C
hereto attached and made a part hereof is a sample.
"VIII. That since August, 1911, plaintiff has used as an advertising poster upon
shipping cases and in public places generally throughout the Islands many hundreds
of the
102
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PHILIPPINE REPORTS ANNOTATED
Clarke vs. Manila Candy Co.
labels of which Exhibit D hereto attached and made a part hereof is a sample.
"IX. That since January, 1912, plaintiff has used for various kinds of his candy, paper
boxes, of which Exhibit E hereto attached and made a part hereof, is a sample.
"X. That at various times prior to January 12, 1912, the date of incorporation of the
defendant company, plaintiff advertised his candy products extensively in the local
papers, as shown by Exhibits F and G hereto attached.
"XI. That besides the use, display, and advertising of said mark in the manner above
indicated, plaintiff has during public festivals held in the city of Manila for several
years past, and within the exhibition grounds of said festivals, used paper mach
roosters of large size, carried about said grounds during the exhibition with the
words Clarke's candies written upon said roosters.
"XII. That in consequence of such use, display and advertising of said rooster as the
trade-mark for plaintiff's candies, said candies have for several years last past been
known and are now known to the trade in these Islands, both wholesale and retail,
and to the consumers of candy as the rooster or Manoc brand.
"XIII. That on January 12, 1912, the defendant company was organized as shown by
a copy of the Articles of Incorporation hereto attached and made a part of this
complaint, and that two of the directors of said defendant company are exemployees of the plaintiff and at the time of the organization of said corporation, as
well as long prior thereto, were well aware of the use by plaintiff of the said rooster
or Manoc as a trade-mark in connection with the manufacture and sale of plaintiff's
candy.
"XIV. That notwithstanding the fact that said directors were well aware of the use of
said trade-mark by plaintiff, and that no other manufacturer of or dealer in candy in
these Islands except the plaintiff had ever used such mark in connection with the
manufacture or sale of candy, the said defendant corporation through its said
directors,
103
"XVI. That the said defendants pleaded not guilty to said complaint, and after trial
thereon before the Hon. A. S. Crossfield, presiding in Sala I of this court, were
acquitted in the manner and form shown by the court's decision, a copy of which
accompanies this complaint as Exhibit J.
"XVII. That notwithstanding said criminal prosecution, and notwithstanding the
warning to the defendant company contained in said judgment, the said corporation
defendant has since the rendition of said judgment continued to sell and dispose of
its candy products under the said label Exhibit H as rooster or Manoc candy and that
retail dealers of defendant's candy are also selling and disposing of said candy as
Manoc candy.
"XVIII. That the word Manoc is the generic term for chicken in all the principal native
dialects of these Islands, and that because of the limited number of descriptive
adjectives in each of said dialects, and the limited use of those that do exist, any
representation of a chicken, or chickens, on a label, will naturally and inevitably
become known to all persons who speak and transact business in any of said
dialects as chicken or Manoc brand; that the great majority of persons who buy, sell
or consume candy in the Philippines speak one or more of such native dialects.
"XIX. That the said defendant corporation, through the use of said label Exhibit H, in
selling its goods, has given and is giving said goods the general appearance of the
goods of this plaintiff in such a way as is likely to in
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PHILIPPINE REPORTS ANNOTATED
Clarke vs. Manila Candy Co.
fluence purchasers to believe that the goods offered by the defendant are those of
the plaintiff, and that such appearance has so influenced, and is now influencing
purchasers.
"XX. That such imitation of plaintiff's mark has been done by the defendant for the
purpose of deceiving the public and defrauding the plaintiff of his legitimate trade,
and that the public have been and are being deceived, and this plaintiff has been
and is being defrauded thereby to his great damage.
"Wherefore, plaintiff asks this honorable court that, upon filing and approval of bond
herein, it be ordered:
"(a) That a temporary injunction be issued against the defendant company, its
officers, agents, and employees, restraining them and each of them from any
further use of the said label Exhibit H in the sale or other disposition of candy by
defendant, until further order in this case;
"(b) That after due hearing herein the defendant corporation be directed to render
under oath of its proper officer a true and complete account of profits upon all sales
and other dispositions of its candy products under the said label Exhibit H; and that
judgment be entered in favor of the plaintiff and against defendant for double the
amount thereof; .
"(c) That judgment be entered against the defendant company, its officers, agents,
and employees perpetually enjoining them from using the said label Exhibit H or
any other like imitation of plaintiff's said mark; and
"(d) That the court grant to plaintiff any other remedy that may be proper under the
law, together with the costs herein.
"MANILA, July 11, 1912."
To this complaint the defendant company interposed a general denial and in due
course the case was heard in the Court of First Instance of Manila, and judgment
entered in favor of the defendant. From this judgment plaintiff appealed,' and the
case is now before us on his bill of exceptions.
It will be seen that in support of his prayer for relief,
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PHILIPPINE REPORTS ANNOTATED
Clarke vs. Manila Candy Co.
Civil Procedure, which prescribes that, "if the complaint contains more than one
cause of action, each distinct cause of action must be set forth in a separate
paragraph containing all the facts constituting the particular cause of action."
The infringement of a trade-mark is, in truth, a form of unfair competition. The law,
however, allows relief from the wrong done by a trade-mark infringement under
circumstances and upon proof which would not entitle the plaintiff to relief upon the
theory of unfair competition where it does not appear that there was a technical
infringement of a trade-mark. Plaintiff may be in doubt as to whether he can
establish a technical infringement of a trade-mark to the satisfaction of the court,
and in such a case he may desire to offer additional evidence to support his
contention that, if in the opinion of the court a technical infringement has not been
established, the evidence is sufficient to sustain a charge of unfair competition, by
the use of misleading emblems or designs upon the goods of the defendant. We
know of no reason why he should not be permitted to do so. (Cf. the recent case of
Hamilton-Brown Shoe Co. vs. Wolf Brothers & Co., 240 U. S., 251.)
We are not unmindful of what was said in the case of Compaa General de Tabacos
vs. Alhambra Cigar & Cigarette Manufacturing Co. (33 Phil. Rep., 485). But what was
said there must not be understood as denying the right of a plaintiff to allege as
many distinct causes of action as he may deem proper in support of his prayer for
relief. It was said in the opinion in that case that 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; 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
107
the evidence of record conclusively establish this claim, which, in fact, is not
seriously disputed.
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108
PHILIPPINE REPORTS ANNOTATED
Clarke vs. Manila Candy Co.
Exhibit H is an oval panel which has, in the language of counsel for the defendant,
"as its central and predominating feature, two large and highly colored roosters in
an attitude of combat," with the words "Manila Candy Co., Ltd.," the corporate name
of the defendant company, in large and distinct letters running along the upper
margin, and along the lower margin the words, "Trade-mark, Manila."
Upon the whole record we are of opinion that the evidence of record does not
affirmatively and satisfactorily sustain plaintiff's claim that his candy has actually
become known to the trade as Manoc candy; nor does it sustain his allegations that
the defendant corporation has sold or is selling its candy as Manoc candy, or that its
candies are sold in the retail trade under that name.
The question then which presents itself is whether in the absence of proof of these
allegations, the other evidence of record is sufficient to sustain a finding that there
has been either a technical infringement of plaintiff's unregistered trade-mark, or
unfair competition by the defendant corporation by the use on the containers of
their goods and otherwise of the design set forth in Exhibit H.
We think that the bare statement of the undisputed facts disclosed by the record
leaves no room for reasonable doubt as to the guilt of the defendant corporation of
unfair competition as defined in Act No. 666.
The plaintiff, a candy manufacturer, had for many years made use of a pictorial
representation of a rooster upon the packages and wrappers used in connection
with his business, and in advertising his goods had made continuous use of a
rooster as his trade-mark. Two of his workmen left his employ and organized a
corporation which engaged in the business of manufacturing candy. This corporation
adopted as its trade-mark a pictorial representation of two roosters, and it has made
extensive use of this trade-mark upon the packages and containers in which it put
its candy on the market.
No reason has been suggested for the use of this par109
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PHILIPPINE REPORTS ANNOTATED
rendered the defendant corporation guilty of unfair competition, f or under all the
circumstances of the case, we are of opinion that we are justified in inferring the
intent of the defendant corporation to deceive the public and defraud the plaintiff,
A large number of cases are cited by counsel in their briefs in support of their
respective contentions, and it must be confessed that it is difficult if not wholly
impossible to reconcile the principles upon which some of those cases seem to turn,
though the apparent conflict would seem to arise in most instances f rom the
application by the various courts of recognized principles to the varying facts of
each case.
The truth is, as suggested by counsel for the plaintiff, that there has been a very
marked change in the attitude of the public and of the courts in recent years, in
dealing with the offense known as "unfair competition," which is reflected in the
progress made by the law in developing rules and remedies relating to dishonest
and unfair commercial practices. Our own statute, Act No. 666, is in itself a clear
recognition of the more modern attitude of the lawmaker with relation to these
practices. Mr. Justice Holmes said twenty-five years ago that:
"The law has got to be stated over again. And I venture to say that in fifty years we
shall have it in a form of which no one could have dreamed fifty years ago."
Our statute crystallizing as it does the modern view as to what the law should be on
this subject is a striking realization of that prophecy.
In 1895 a writer in the Harvard Law Review, vol. 13, p. 265 [vol. 10, p. 275]
observed that:
"Unfair competition, as the designation of a legal wrong which the law will
undertake to redress or prevent, has only of late years begun to make its
appearance in the books.
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PHILIPPINE REPORTS ANNOTATED
Clarke vs. Manila Candy Co.
To most lawyers, it is safe to say, the title carries no very definite meaning, for as
yet its use is almost entirely confined to the Reports, and in these it is used only in
the most general way, and always with the facts of the particular case in view, while
it is quite unrecognized in digest, text book, or dictionary."
The following extracts from the introduction to Nim's work on Unfair Business
Competition explain in some sort the tendency of the courts in recent years to hold
to more rigid account those charged with unf air competition:
"There is a maxim as old as the law that there can be no right without a remedy, but
it is equally true that men are constantly acquiring new rights and new kinds of
property almost unknown to the law, and in lawful ways are putting themselves in
new positions, in which they soon suffer wrongs which the court seems powerless to
prevent or to end. It seems, sometimes, as if the progress of the unscrupulous
merchant and manufacturer in inventing new schemes for filching away the trade of
others unfairly, has been far more rapid than that of the courts in finding ways of
protecting the honest business man against such schemes. But whatever has been
the activity of these unscrupulous members of the business community in the last
decade, during this time very marked progress has been made by the law in
developing rules and remedies relating to dishonest and unfair commercial
practices.
"It is but few years since cases involving applications for relief against unfair dealing
were indifferently classed as trade-mark cases or injunction cases, or hidden away
in digests under headings most surprisingly disassociated from ideas conveyed by
the term 'Unfair Competition.' Now we find that phrases 'Passing Off,' in England,
'Concurrence Deloyale,' in France and 'Unfair Competition' in America, are
recognized legal terms, embracing rules of law applicable to cases of this
character."
The citation of authority in the briefs would seem to have for its object the
development of a definition, as disclosed by judicial interpretation, of the illegal acts
now
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PHILIPPINE REPORTS ANNOTATED
Clarke vs. Manila Candy Co.
Finzer, 128 U.S., 184; Bickmore, etc., Co. vs. Karns Mfg. Co., 126 Fed., 573, 574;
Popham vs. Cole, 66 N. Y., 69; Munro vs. Tousey, 129 N. Y., 38; Bulte vs. Igleheart
Bros., 137 Fed. Rep., 492, 502, with which contrast the discussions of "The Owl
Case," No. 3, vol. 8, Bulletin of the U. S. TradeMark Association; "The Teddy Bear
Case," idem; "The Hercules Wrestling Match Case," No. 11, vol. 7, idem; "The Star
Tea Case," No. 10, vol. 7, idem; "The Metropolitan Candy Case," No. 11, vol. 7,
idem.)
But it would seem that the recognition of the wrong complained of in such cases as
a technical trade-mark infringement involves in many instances an undue strain
upon the well-settled rules and principles which have long controlled this branch of
the lawwhile no difficulty presents itself in dealing with abuses of this kind under
the modern doctrine of unfair competition. Certainly, under our statute, all difficulty
can and should be avoided by limiting relief prayed for on the ground of trade-mark
infringement to cases wherein there is an exact or at least a colorable imitation of
the original trade-mark, and in other cases applying the provisions of section 7 of
the statute (Act No. 666) which defines the offense of unfair competition. That
section expressly provides that unfair competition exists when one selling his goods
"gives them the general appearance of goods of another manufacturer or dealer,
either in the wrapping of the packages in which they are contained, or the devices
or words thereon, or in any other feature of their appearance, which would be likely
to influence purchasers to believe that the goods offered are those of a
manufacturer or dealer other than the actual manufacturer or dealer, and who
clothes the goods with such appearance for the purpose of deceiving the public and
defrauding another of his legitimate trade," and it is further provided that "this
section applies in cases where the deceitful appearance of the goods, misleading as
to origin or ownership, is effected not by means of technical trade-marks, emblems,
signs, or devices, but by the general appearance of the package containing the
goods, or by the
115
The judgment entered in the court below denying relief must, therefore, be
reversed, without costs in this instance, and the record returned to the court
wherein it originated, where judgment will be entered in conformity herewith
granting injunctive relief as hereinbefore indicated and making proper provision for
the accounting prayed for in the complaint. So ordered.
Torres, Trent, and Araullo, JJ., concur.
Moreland, J., dissents.
Judgment reversed; case remanded. [Clarke vs. Manila Candy Co., 36 Phil.
100(1917)]
410
SUPREME COURT REPORTS ANNOTATED
Del Monte Corporation vs. Court of Appeals
G.R. No. 78325. January 25, 1990.*
DEL MONTE CORPORATION and PHILIPPINE PACKING CORPORATION, petitioners, vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING INDUSTRIES,
respondents.
Unfair Competition; Tradenames and Trademarks; Distinctions between unfair
competition and infringement of trademark.To arrive at a proper resolution of this
case, it is important to bear in mind the following distinctions between infringement
of trademark and unfair competition: (1) Infringement of trademark is the
unauthorized use of a trademark, whereas unfair competition is the passing off of
ones goods as those of another. (2) In infringement of trademark fraudulent intent
is unnecessary, whereas in unfair competition fraudulent intent is essential. (3) In
infringement of trademark the prior registration of the trademark is a prerequisite to
the action, whereas in unfair competition registration is not necessary.
Same; Same; Side-by-side comparison not final test of similarity because average
buyers do not make minute scrutiny of label details.It has been correctly held that
side-by-side comparison is not the final test of similarity. Such comparison requires
a careful scrutiny to determine in what points the labels of the products differ, as
was done by the trial judge. The ordinary buyer does not usually make such scrutiny
nor does he usually have the time to do so. The average shopper is usually in a
hurry and does not inspect every product on the shelf as if he were browsing in a
library. Where the housewife has to return home as soon as possible to her baby or
the working woman has to make quick purchases during her off hours, she is apt to
be confused by similar labels even if they do have minute differences. The male
shopper is worse as he usually does not bother about such distinctions.
Same; Same; Sunshine Tomato catsup label is a colorable imitation of the Del Monte
trademark due to prominent similarities in general design although there are some
differences.We also note that the respondent court failed to take into
consideration several factors which should have affected its conclusion, to wit: 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. Among these, what
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* FIRST DIVISION.
411
Same; Sunshine Sauce Manufacturing Industries guilty of bad faith in using Del
Monte catsup bottles despite warning; Same constitutes unfair competition.
However, we find that Sunshine, despite the many choices available to it and
notwithstanding that the caution Del Monte Corporation, Not to be Refilled was
embossed on the bottle, still opted to use the petitioners bottle to market a product
which Philpack also produces. This clearly shows the private respondents bad faith
and its intention to capitalize on the latters reputation and goodwill and pass off its
own products as that of Del Monte.
Same; Same; Same.As Sunshines label is an infringement of the Del Montes
trademark, law and equity call for the cancellation of the private respondents
registration and withdrawal of all its products bearing the questioned label from the
market. With regard to the use of Del Montes bottle, the same constitutes unfair
competition; hence, the respondent should be permanently enjoined from the use of
such bottles.
412
412
SUPREME COURT REPORTS ANNOTATED
Del Monte Corporation vs. Court of Appeals
Same; Damages; Evidence; Proof of damages necessary in unfair competition and
trademark infringement; If no proof is submitted, aggrieved party entitled to
nominal damages of P1,000.00.The court must rule, however, that the damage
prayed for cannot be granted because the petitioner has not presented evidence to
prove the amount thereof. x x x Accordingly, the Court can only award to the
petitioners, as it hereby does award, nominal damages in the amount of P1,000.00.
PETITION to review the decision of the Court of Appeals.
The petitioners are questioning the decision of the respondent court upholding the
dismissal by the trial court of their complaint against the private respondent for
infringement of trademark and unfair competition.
Petitioner Del Monte Corporation is a foreign company organized under the laws of
the United States and not engaged in business in the Philippines. Both the
Philippines and the United States are signatories to the Convention of Paris of
September 27, 1965, which grants to the nationals of the parties rights and
advantages which their own nationals enjoy for the repression of acts of
infringement and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly
organized under the laws of the Philippines. On April 11, 1969, Del Monte granted
Philpack the right to manufacture, distribute and sell in the Philippines various
agricultural products, including catsup, under the Del Monte trademark and logo.
On October 27, 1965, Del Monte authorized Philpack to register with the Philippine
Patent Office the Del Monte catsup bottle configuration, for which it was granted
Certificate of Trademark Registration No. SR-913 by the Philippine Patent Office
under the Supplemental Register.1 On November 20, 1972, Del Monte also obtained
two registration certificates for
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Having received reports that the private respondent was using its exclusively
designed bottles and a logo confusingly similar to Del Montes, Philpack warned it to
desist from doing so on pain of legal action. Thereafter, claiming that the demand
had been ignored, Philpack and Del Monte filed a complaint against the private
respondent for infringement of trademark and unfair competition, with a prayer for
damages and the issuance of a writ of preliminary injunction.5
In its answer, Sunshine alleged that it had long ceased to use the Del Monte bottle
and that its logo was substantially different from the Del Monte logo and would not
confuse the buying public to the detriment of the petitioners.6
After trial, the Regional Trial Court of Makati dismissed the complaint. It held that
there were substantial differences between the logos or trademarks of the parties;
that the defendant had ceased using the petitioners bottles; and that in any case
the defendant became the owner of the said bottles upon its purchase thereof from
the junk yards. Furthermore, the complainants had failed to establish the
defendants malice or bad faith, which was an essential element of infringement of
trademark or unfair competition.7
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414
SUPREME COURT REPORTS ANNOTATED
Del Monte Corporation vs. Court of Appeals
This decision was affirmed in toto by the respondent court, which is now faulted in
this petition for certiorari under Rule 45 of the Rules of Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law, provides in part
as follows:
Sec. 22. Infringement, what constitutes.Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation
of any registered mark or trade-name in connection with the sale, offering for sale,
or advertising of any goods, business or services on or in connection with which
such use is likely to cause confusion or mistake or to deceive purchasers or others
as to the source or origin of such goods or services or identity of such business; or
reproduce, counterfeit, copy or colorably imitate any such mark or trade name and
apply such reproduction, counterfeit copy or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be used
upon or in connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.
Sec. 29 of the same law states as follows:
Sec. 29. Unfair competition, rights and remedies.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 mark or trade-name 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.
Such a person shall have the remedies provided in section twenty-three, Chapter V
hereof.
Any person 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
who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in
the wrapping of the packages in which they are contained, or the devices or words
thereon, or in any other
415
8 Jose C. Vitug, Pandect of Commercial Law & Jurisprudence, 1st ed., p. 291 citing
Compania General de Tabacos v. de Aljambra Cigar and Cigarette Manufacturing
Co., 33 Phil 485; Ogura v. Chua, 59 Phil. 471; Parke Davies & Co. v. Kiu Foo & Co., 60
Phil. 928.
416
416
SUPREME COURT REPORTS ANNOTATED
Del Monte Corporation vs. Court of Appeals
nant words but also on the other features appearing on both labels.9
and applying the same, held that there was no colorable imitation of the petitioners
trademark and logo by the private respondent. The respondent court agreed with
the findings of the trial court that:
In order to resolve the said issue, the Court now attempts to make a comparison of
the two products, to wit:
1. As to the shape of label or make:
Del Monte: Semi-rectangular, with a crown or tomato shape design on top of the
rectangle.
Sunshine: Regular rectangle.
2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or mark:
Del Monte: Clearly indicated words packed by Sysu International, Inc., Q.C.,
Philippines.
Sunshine: Sunshine fruit catsup is clearly indicated made in the Philippines by
Sunshine Sauce Manufacturing Industries No. 1 Del Monte Avenue, Malabon, Metro
Manila.
4. As to color of logo:
Del Monte: Combination of yellow and dark red, with words Del Monte Quality
in white.
Sunshine: White, light green and light red, with words Sunshine Brand in
yellow.
5. As to shape of logo:
9 Mead Johnson Co. v. N.V.J. Von Dorp. Ltd., 7 SCRA 768; Bristol Myers Co. v. Director
of Patents, 17 SCRA 128.
417
The question is not whether the two articles are distinguishable by their label when
set side by side but whether the general confusion made by the article upon the eye
of the casual purchaser who is unsuspicious and off his guard, is such as to likely
result in his confounding it with the original.11 As observed in several cases, the
general impression of the ordinary purchaser, buying under the normally prevalent
conditions in trade and giving the attention such purchasers usually give in buying
that class of goods is the touchstone.12
It has been held that in making purchases, the consumer must depend upon his
recollection of the appearance of the product which he intends to purchase.13 The
buyer having in
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418
SUPREME COURT REPORTS ANNOTATED
Del Monte Corporation vs. Court of Appeals
mind the mark/label of the respondent must rely upon his memory of the
petitioners mark.14 Unlike the judge who has ample time to minutely examine the
labels in question in the comfort of his sala, the ordinary shopper does not enjoy the
same opportunity.
A number of courts have held that to determine whether a trademark has been
infringed, we must consider the mark as a whole and not as dissected. If the buyer
is deceived, it is attributable to the marks as a totality, not usually to any part of
it.15 The court therefore should be guided by its first impression,16 for a buyer acts
quickly and is governed by a casual glance, the value of which may be dissipated as
soon as the court assumes to analyze carefully the respective features of the
mark.17
It has also been held that it is not the function of the court in cases of infringement
and unfair competition to educate purchasers but rather to take their carelessness
for granted, and to be ever conscious of the fact that marks need not be identical. A
confusing similarity will justify the intervention of equity.18 The judge must also be
aware of the fact that usually a defendant in cases of infringement does not
normally copy but makes only colorable changes.19 Well has it been said that the
most successful form of copying is to employ enough points of similarity to confuse
the public with enough points of difference to confuse the courts.20
We also note that the respondent court failed to take into consideration several
factors which should have affected its conclusion, to wit: age, training and
education of the usual
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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.22 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.23 In this latter category is catsup.
At that, even if the labels were analyzed together it is not difficult to see that the
Sunshine label is a colorable imitation of the Del Monte trademark. The predominant
colors used in the Del Monte label are green and red-orange, the same with
Sunshine. The word catsup in both bottles is printed in white and the style of the
print/letter is the same. Although the logo of Sunshine is not a tomato, the figure
nevertheless approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not normally copy
out but only makes colorable changes, employing enough points of similarity to
confuse the public with enough points of differences to confuse the courts. What is
undeniable is the fact that when a manufacturer prepares to package his product,
he has before him a boundless choice of words, phrases, colors and symbols
sufficient to distinguish his product from the others. When as in this case, Sunshine
chose, without a reasonable explanation, to use the same colors and letters as
those used by Del Monte though the field of its selection was so broad, the
inevitable conclusion is that it was
_______________
21 11 H.D. Nims, The Law of Unfair Competition and Trademark, 1947, p. 1027.
22 Ibid., p. 1030.
23 11 Rudolf Callman, The Law of Unfair Competition and Trademark, 1945, pp.
1137, 1136.
420
420
SUPREME COURT REPORTS ANNOTATED
Del Monte Corporation vs. Court of Appeals
done deliberately to deceive.24
It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule
that as between a newcomer who by the confusion has nothing to lose and
everything to gain and one who by honest dealing has already achieved favor with
the public, any doubt should be resolved against the newcomer inasmuch as the
field from which he can select a desirable trademark to indicate the origin of his
product is obviously a large one.25
Coming now to the second issue, we find that the private respondent is not guilty of
infringement for having used the Del Monte bottle. The reason is that the
configuration of the said bottle was merely registered in the Supplemental Register.
In the case of Lorenzana v. Macagba,26 we declared that:
(1) Registration in the Principal Register gives rise to a presumption of the validity of
the registration, the registrants ownership of the mark and his right to the exclusive
use thereof. There is no such presumption in the registration in the Supplemental
Register.
(2) Registration in the Principal Register is limited to the actual owner of the
trademark and proceedings therein on the issue of ownership which may be
contested through opposition or interference proceedings or, after registration, in a
petition for cancellation.
Registration in the Principal Register is constructive notice of the registrants claim
of ownership, while registration in the Supplemental Register is merely proof of
actual use of the trademark and notice that the registrant has used or appropriated
it. It is not subject to opposition although it may be cancelled after the issuance.
Corollarily, registration in the Principal Register is a basis for an action for
infringement while registration in the Supplemental Register is not.
(3) In applications for registration in the Principal Register, publication of the
application is necessary. This is not so in applications for registrations in the
Supplemental Register.
It can be inferred from the foregoing that although Del Monte has actual use of the
bottles configuration, the petitioners
________________
24 Ibid., Vol. III, 2nd ed. pp. 1527-1528 cited in Converse Rubber Corporation v.
Universal Rubber Product Inc., 147 SCRA 155.
25 William Waltke & Co. v. Geo. H. Schafer & Co.,49 App. D.C. 294; Standard Oil v.
Michie, 34 F 2d 802.
26 154 SCRA 723.
421
_______________
27 11 SCRA 436.
422
422
SUPREME COURT REPORTS ANNOTATED
Del Monte Corporation vs. Court of Appeals
action. Of the many drums used, there was only one container where the Shell label
was not erased, while in the case at hand, the respondent admitted that it made
use of several Del Monte bottles and without obliterating the embossed warning.
(3) In Shell, the product of respondent was sold to dealers, not to ultimate
consumers. As a general rule, dealers are well acquainted with the manufacturer
from whom they make their purchases and since they are more experienced, they
cannot be so easily deceived like the inexperienced public. There may well be
similarities and imitations which deceive all, but generally the interests of the
dealers are not regarded with the same solicitude as are the interests of the
ordinary consumer. For it is the form in which the wares come to the final buyer that
is of significance.28
As Sunshines label is an infringement of the Del Montes trademark, law and equity
call for the cancellation of the private respondents registration and withdrawal of all
its products bearing the questioned label from the market. With regard to the use of
Del Montes bottle, the same constitutes unfair competition; hence, the respondent
should be permanently enjoined from the use of such bottles.
The court must rule, however, that the damage prayed for cannot be granted
because the petitioner has not presented evidence to prove the amount thereof.
Section 23 of R.A. No. 166 provides:
Sec. 23. Actions and damages and injunction for infringement.Any person entitled
to the exclusive use of a registered mark or trade name may recover damages in a
civil action 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 said 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 the court may
award as damages 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. In
cases where actual intent to mislead the public or to defraud
_______________
28 Supra., p. 1141.
423
give opinions on the alleged similarity or dissimilarity, can not be a ground for a
dismissal of an opposition.
2
2
PHILIPPINE REPORTS ANNOTATED
Co Tiong Sa vs. Director of Patents
APPEAL from a decision of the Director of Patents.
The facts are stated in the opinion of the Court.
Antonio Fa., Quesada, Floro Crisologo. Manuel A. Par and Rizalino L. Favila, for
petitioner.
Eufemio E. de Mesa and E. L. Gonzales for oppositor.
First Assistant Solicitor General Ruperto Kapunan, Jr. and Solicitor Pacifico P. de
Castro for respondent.
LABRADOR, J.:
This is an appeal filed by Co Tiong Sa, applicant for registration of the trademark
"FREEDOM" and its corresponding design, against a decision of the Director of
Patents sustaining the opposition thereto of Saw Woo Chiong & Co., and denying the
application. The applicant in said registration proceeding, now petitioner in this
Court, has used the trademark on undershirts and T-shirts since March, 1947. The
trademark sought to be registered is "FREEDOM". The word "FREEDOM" is in hand
print, with a slight slant to the right. In the facsimiles attached to the original
application, there are no letters, lines, or figures around the word, but in the label,
Exhibit D-1, the said word is preceded by a triangle, with the letter "F" inside and
small letters "H.L." under. A capital letter "L" is on the lower right-hand corner; and
all of these are enclosed in a rectangle of double lines. In Exhibit D-2, the label is
the same word "FREEDOM" with a capital letter "M" above it, a flourish under the
word "FREEDOM" and the words "HIGH QUALITY" thereunder. The label used for
boxes is similar to label Exhibit D-1, except that the rectangle is in a heavy line and
is longer.
The label presented by Saw Woo Chiong & Co., oppositor-respondent herein (Exhibit
D-3), consist of the word "FREEMAN" in hand print, with a right slant, above the
middle of which is a vignette of a man wearing a tophat, which vignette is preceded
by the small word "The" in print and followed by two parallel lines close to each
other, and
3
around. In this mind-picture the slight or minor decorations are lost sight of, and the
central figure only is retained. So is it with a customer or purchaser who sees a
label. He retains in his mind the dominant characteristics or features or central idea
in the label, and does not retain or forgets the attendant decorations, flourishes, or
variations. The ordinary customer does not scrutinize the details of the label; he
forgets or overlooks these, but retains a general impression, or a central figure, or a
dominant characteristic. The reason for the above has been explained in the
following manner:
* * * This rule has a basis in experience. The average person usually will not, and
often can not, take in at a casual glance all, or even a large part of the details of
what he looks at. What part or parts of two trademarks which are alleged to be
similar does the average ordinary buyer see when he looks at them? What features
of them are remembered by the average buyer? We do not really hear all that is
spoken in our hearing. Far from all we see or hear casually is retained sufficiently
clearly or insufficient detail for us to get a lasting impression of it which we can
remember when we encounter the mark again. The importance of this rule is
emphasized by the increase of radio advertising in which we are deprived of the
help of our eyes and must depend entirely on the ear.
The average buyer usually seeks a sign, some special, easily remembered earmarks
of the brand he has in mind. It may be the color, sound, design, or a peculiar shape
or name. Once his eyes see that or his ear hears it, he is satisfied. An unfair
competitor need not copy the entire mark to accomplish his fraudulent purpose. It is
enough if he takes the one feature which the average buyer is likely to remember.
(Nims, The Law of Unfair Competition and Trademarks, 4th ed., Vol. 2, pp. 678-679).
The question of infringement is to be determined by the test of dominancy. The
dissimilarity in size, form and color of the label and the place where applied are not
conclusive. If the competing label contains the trademark of another, and confusion
6
6
PHILIPPINE REPORTS ANNOTATED
Co Tiong Sa vs. Director of Patents
or deception is likely to result, infringement takes place, regardless of the fact that
the accessories are dissimilar. Duplication or exact imitation is not necessary; nor is
it necessary that the infringing label should suggest an effort to imitate. (G. Heilman
Brewing Co. vs. Independent Brewing Co., 191 F., 489, citing Eagle Co. vs. Pflugh
(C.C.) 180 F., 579.)
In this jurisdiction we have held that the name "Lusolin" is an infringement of the
trademark "Sapolin," as the sound of the two names is almost the same, and the
labels of containers being almost the same in respect to color, size, and other
characteristics. (Sapolin Co. vs. Balmeceda and Germann & Co., 67 Phil., 705.)
In the case of La Insular vs. Jao Oge, 47 Phil., 75, plaintiff's label represented an
European female, while defendant's was a Filipino, but both labels exhibited a
matron seated on a platform with a view of Manila Bay looking towards Mariveles at
sunset. In spite of the fact that the posture and coloring were slightly different,
defendant's labels were declared to constitute an infringement of plaintiff's labels.
After a careful study, we find that the dominant characteristic of oppositor's
trademark "FREEMAN" has been imitated in applicants's trademark "FREEDOM,"
such as to confuse the public and unwary customers and purchasers, and to deceive
them into believing that the articles bearing one label are similar or produced by
the same manuf acturer as those carrying the other label. The decision of the
Director of Patents sustaining the opposition and denying the application must,
therefore, be affirmed.
With respect to the fifth assignment of error (first in petitioner's brief), it must be
remembered that the question of similarity or dissimilarity, while it is a question of
opinion, is to be determined by the court mainly on the basis of the facsimiles or
labels or pictures submitted to the Director of Patents. In the case at bar,
innumerable exhibits were presented to show the similarity. Similarity or
dissimilarity can be determined by the Director of Patents, or by this Court on
appeal, by a mere examination
8
Same; Same; Same; Purpose of suit; Right to the use of corporate name or trade
name.The purpose of such a suit is to protect its reputation, corporate name and
goodwill which has been established through the natural development of its trade
for a long period of years, in the doing of which it does not seek to enforce any legal
or contract rights arising from, or growing out of any business which it has
transacted in the Philippine Islands. The right to the use of the corporate or trade
name is a property right, a right in rem, which it may assert and protect in any of
the courts of the worldeven in jurisdictions where it does not transact business
just the same as it may protect its tangible property, real or personal against
trespass or conversion.
Same; Right to use trademark by foreign corporation to the exclusion of others;
Purpose of Trademark Law.In Asari Yoko Co., Ltd. v. Kee Boc (Jan. 20, 1961) 1 SCRA
1, the plaintiff, a Japanese corporation which had acquired prior use in the
Philippines of the trademark RACE for mens shirts and undershirts but which had
not shown prior registration thereof, successfully maintained a suit opposing the
application of the defendant, a local business, to register the same trademark for
similar goods produced by him. This Court said: The lawful entry into the
Philippines of goods bearing the trademark since 1949 should entitle the owner of
the trademark to the right to use the same to the exclusion of others. Modern trade
and commerce demands that depredations on legitimate trademarks of nonnationals should not be countenanced. It may be added here that the law against
such depredations is not only for the protection of the owner of the trademark who
has acquired prior use thereof but also, and more importantly, for the protection of
purchasers from confusion, mistake or deception as to the goods they are buying.
This is clear from a reading of Section 4(d) of the Trademark Law.
Trademark Law; Legislative intention.Parenthetically, it may be stated that the
ruling in the Mentholatum case was subsequently derogated when Congress,
purposely to counteract the effects of said case, enacted Republic Act No. 638,
inserting Section 21-A in the Trademark Law, which allows a foreign corporation or
juristic person to bring an action in the Philippine courts for infringement of a mark
or tradename, for unfair competition, or false designation of origin and false
description, whether or not it has been licensed to do business in the Philippines
under the Corporation Law, at the time it brings complaint.
52
52
SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
Same; Distinction between suit far infringement or unfair competition under Section
21-A and cancellation under Section 17.The first kind of action, it may be stated,
is cognizable by the Courts of First Instance (Sec. 27); the second partakes of an
administrative proceeding before the Patent Office (Sec. 18, in relation to Sec. 8).
And while a suit under Section 21-A requires that the mark or trademark alleged to
have been infringed has been registered or assigned to the suing foreign
corporation, a suit for cancellation of the registration of a mark or tradename under
Section 17 has no such requirement. For such mark or trade-name should not have
been registered in the first place (and consequently may be cancelled if so
registered) if it consists of or comprises a mark or tradename which so resembles a
mark or tradename . . . previously used in the Philippines by another and not
abandoned, as to be likely, when applied to or used in connection with goods,
business or services of the applicant, to cause confusion or mistake or to deceive
purchasers. (Sec. 4d)
Same; Section 37, when operative.Section 37 of the Trademark Law was
incorporated in the law in anticipation of the eventual adherence of the Philippines
to any international convention or treaty for the protection of industrial property. It
speaks of persons who are nationals of, domiciled in, or have a bona fide or
effective business or commercial establishment in any foreign country, which is a
party to any international convention or treaty relating to industrial property to
which the Philippines may be a party. In other words, the provision will be operative
only when the Philippines becomes a party to such convention or treaty. That this
was the intention of Congress is clear from the explanatory note to House Bill No.
1157 (now Republic Act 166), in reference to Section 37, which is the only provision
in Chapter XI of the Trademark Law on Foreign Industrial Property: The necessary
provisions to qualify the Philippines under the international convention for the
protection of industrial property have been specifically incorporated in the Act. In
the meantime, regardless of Section 37, aliens or foreign corporations are accorded
benefits under the law.
PETITION for review of a resolution of the Director of Patents.
53
General Garments Corporation vs. Director of Patents
itor General Pacifico P. de Castro and Solicitor Celso P. Ylagan for respondent
Director of Patents.
Paredes, Poblador, Cruz & Nazareno for respondent Corporation.
MAKALINTAL, J.:
The General Garments Corporation, organized and existing under the laws of the
Philippines, is the owner of the trademark Puritan, under Registration No. 10059
issued on November 15, 1962 by the Philippine Patent Office, for assorted mens
wear, such as sweaters, shirts, jackets, undershirts and briefs.
On March 9, 1964 the Puritan Sportswear Corporation, organized and existing in and
under the laws of the state of Pennsylvania, U.S.A., filed a petition with the
Philippine Patent Office for the cancellation of the trademark Puritan registered in
the name of General Garments Corporation, alleging ownership and prior use in the
Philippines of the said trademark on the same kinds of goods, which use it had not
abandoned; and alleging further that the registration thereof by General Garments
Corporation had been obtained fraudulently and in violation of Section 17(c) of
Republic Act No. 166, as amended, in relation to Section 4(d) thereof.
On March 30, 1964 General Garments Corporation moved to dismiss the petition on
several grounds, all of which may be synthesized in one single issue: whether or not
Puritan Sportswear Corporation, which is a foreign corporation not licensed to do
business and not doing business in the Philippines, has legal capacity to maintain a
suit in the Philippine Patent Office for cancellation of a trademark registered therein.
The Director of Patents denied the motion to dismiss on August 6, 1964, and denied
likewise the motion for reconsideration on March 5, 1965, whereupon General
Garments Corporation, hereinafter referred to as petitioner, filed the instant petition
for review.
54
54
SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
Section 17(c) and Section 4(d) of the Trademark Law provide respectively as follows:
SEC. 17. Grounds for cancellation.Any person, who believes that he is or will be
damaged by the registration of a mark or trade-name, may, upon the payment of
the prescribed fee, apply to cancel said registration upon any of the following
grounds:
x
(c) That the registration was obtained fraudulently or contrary to the provisions of
section four, Chapter II thereof: x x x
SEC. 4. Registration of trade-marks, trade-names and service-marks which shall be
known as the principal register. The owner of a trade-mark, trade-name or servicemark used to distinguish his goods, business or services from the goods, business or
services of others shall have the right to register the same on the principal register,
unless it:
x
Marshall-Wells Co. v. Elser & Co.1 the object of the statute (Secs. 68 and 69,
Corporation Law) was not to prevent the foreign corporation from performing single
acts, but to prevent it from acquiring a domicile for the purpose of business without
taking the steps necessary to render it amenable to suit in the local courts . . . the
implication of the law (being) that it was never the purpose of the legislature to
exclude a foreign corporation which happens to obtain an isolated order for
business from the Philippines, from securing redress in the Philippine Courts. . .
The principle has since then been applied in a number of other cases.2
To recognize respondent as a juridical person, however, does not resolve the issue
in this case. It should be postulated at this point that respondent is not suing in our
courts for the recovery of any debt, claim or demand, for which a license to
transact business in the Philippines is required by Section 69 of the Corporation
Law, subject only to the exception already noted. Respondent went to the Philippine
Patent Office on a petition for cancellation of a trademark registered by petitioner,
invoking Section 17(c) in relation to Section 4(d) of the Trademark Law. A more or
less analogous question arose in Western Equipment & Supply Co. v. Reyes, 51 Phil.
115. The syllabus of the report, which is a correct statement of the doctrine laid
down in the decision, reads as follows:
A foreign corporation which has never done x x x business in the Philippine Islands
and which is unlicensed and unregistered to do business here, but is widely and
favorably known in the Islands through the use therein of its products
_______________
56
SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
bearing its corporate and trade name has a legal right to maintain an action in the
Islands.
The purpose of such a suit is to protect its reputation, corporate name and goodwill
which has been established through the natural development of its trade for a long
period of years, in the doing of which it does not seek to enforce any legal or
contract rights arising from, or growing out of any business which it has transacted
in the Philippine Islands. The right to the use of the corporate or trade name
is a property right, a right in rem, which it may assert and protect in any of the
courts of the worldeven in jurisdictions where it does not transact businessjust
the same as it may protect its tangible property, real or personal against trespass or
conversion.
In Asari Yoko Co., Ltd. v. Kee Boc (Jan. 20, 1961) 1 SCRA 1, the plaintiff, a Japanese
corporation which had acquired prior use in the Philippines of the trademark RACE
for mens shirts and undershirts but which had not shown prior registration thereof,
successfully maintained a suit opposing the application of the defendant, a local
businessman, to register the same trademark for similar goods produced by him.
This Court said: The lawful entry into the Philippines of goods bearing the
trademark since 1949 should entitle the owner of the trademark to the right to use
the same to the exclusion of others. Modern trade and commerce demands that
depredations on legitimate trademarks of non-nationals should not be
countenanced. It may be added here that the law against such depredations is not
only for the protection of the owner of the trademark who has acquired prior use
thereof but also, and more importantly, for the protection of purchasers from
confusion, mistake or deception as to the goods they are buying. This is clear from a
reading of Section 4(d) of the Trademark Law.
Petitioner argues that the ruling in Western Equipment has been superseded by the
later decision of this Court in Mentholatum Co., Inc. v. Mangaliman (1941), 72 Phil.
524, where it was held that inasmuch as Mentholatum Co., Inc. was a foreign
corporation doing business in the Phil57
business in the Philippines, and observed that if it had been so engaged without first
obtaining a license another and a very different question would be presented.
Parenthetically, it may be stated that the ruling in the Mentholatum case was
subsequently derogated when Congress, purposely to counteract the effects of
said case, enacted Republic Act No. 638, inserting Section 21-A in the Trademark
Law, which allows a foreign corporation or juristic person to bring an action in
Philippine courts for infringement of a mark or trade-name, for unfair competition,
or false designation of origin and false description, whether or not it has been
licensed to do business in the Philippines under Act Numbered Fourteen hundred
and fifty-nine, as amended, otherwise known as the Corporation Law, at the time it
brings complaint.
Petitioner argues that Section 21-A militates against respondents capacity to
maintain a suit for cancellation, since it requires, before a foreign corporation may
bring an action, that its trademark or tradename has been registered under the
Trademark Law. The argument misses the essential point in the said provision,
which is that the foreign corporation is allowed thereunder to sue whether or not it
has been licensed to do business in the Philippines pursuant to the Corporation
Law (precisely to counteract the effects of the decision in the Mentholatum case).
In any event, respondent in the present case is not suing for infringement or unfair
competition under Section 21-A, but for cancellation under Section 17, on one of the
grounds enumerated in Section 4. The first kind of action, it may be stated, is
cognizable by the Courts of First Instance (Sec. 27); the second partakes of an
administrative proceeding before the Patent Office (Sec. 18, in relation to Sec. 8).
And while a suit under Section 21-A requires
58
58
SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
that the mark or tradename alleged to have been infringed has been registered or
assigned to the suing foreign corporation, a suit for cancellation of the registration
of a mark or tradename under Section 17 has no such requirement. For such mark
or trade-name should not have been registered in the first place (and consequently
may be cancelled if so registered) if it consists of or comprises a mark or
tradename which so resembles a mark or trade-name . . . previously used in the
Philippines by another and not abandoned, as to be likely, when applied to or used
in connection with goods, business or services of the applicant, to cause confusion
or mistake or to deceive purchasers; . . . (Sec. 4d).
Petitioners last argument Is that under Section 37 of the Trademark Law respondent
is not entitled to the benefits of said law because the Philippines is not a signatory
to any international treaty or convention relating to marks or tradenames or to the
repression of unfair competition. Section 37 reads in part:
SEC. 37. Rights of foreign registrants.Persons who are nationals of, domiciled in,
or have a bona fide or effective business or commercial establishment in any
foreign country, which is a party to any international convention or treaty relating to
marks or trade-names, or the repression of unfair competition to which the
Philippines may be a party, shall be entitled to the benefits and subject to the
provisions of this Act to the extent and under the conditions essential to give effect
to any such convention and treaties so long as the Philippines shall continue to be a
party thereto, except as provided in the following paragraphs of this section.
As correctly pointed out by respondents, this provision was incorporated in the law
in anticipation of the eventual adherence of the Philippines to any international
convention or treaty for the protection of industrial property. It speaks of persons
who are nationals of, domiciled in, or have a bona fide or effective business or
commercial establishment in any foreign country, which is a party to any
international convention or treaty relating to industrial property to which the
Philippines may be a party. In other words, the provision will be operative only when
the Philippines becomes a party to such a convention or treaty.
59
50
SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
No. L-24295. September 30, 1971.
GENERAL GARMENTS CORPORATION, petitioner, vs. THE DIRECTOR OF PATENTS and
PURITAN SPORTSWEAR CORPORATION, respondents.
Corporation law; Juridical personality; Puritan Sportswear Corporation is a juridical
person.That respondent, Puritan Sportswear Corporation, is a juridical person
should be beyond serious dispute. The fact that it may not transact business in the
Philippines unless it has obtained a license for that purpose, nor maintain a suit in
Philippine courts for the recovery of any debt, claim or demand without such license
(Secs. 68 and 69, Corporation Law) does not make respondent any less a juridical
person. Indeed an exception to the license requirement has been recognized in this
jurisdiction, namely, where a foreign corporation sues on an isolated transaction.
Same; Object of the law.The object of the statute (Secs. 68 and 69, Corporation
Law) was not to prevent the foreign corporation from performing single acts, but to
prevent it from requiring a domicile for the purpose of business without taking the
steps necessary to render it amenable to suit in the local courts . . . the implication
of the law (being that it was never the purpose of the legislature to exclude a
foreign corporation which happens to obtain an isolated order for business from the
Philippines, from securing redress in the Philippine Courts. The principle has since
then been applied in a number of other cases.
Same; Foreign corporation; Rights of foreign corporation to maintain action.A
foreign corporation which has never done business in the Philippine Islands and
which is unlicensed and unregistered to do business here, but is widely and
favorably known in the Islands through the use therein of its pro51
not shown prior registration thereof, successfully maintained a suit opposing the
application of the defendant, a local business, to register the same trademark for
similar goods produced by him. This Court said: The lawful entry into the
Philippines of goods bearing the trademark since 1949 should entitle the owner of
the trademark to the right to use the same to the exclusion of others. Modern trade
and commerce demands that depredations on legitimate trademarks of nonnationals should not be countenanced. It may be added here that the law against
such depredations is not only for the protection of the owner of the trademark who
has acquired prior use thereof but also, and more importantly, for the protection of
purchasers from confusion, mistake or deception as to the goods they are buying.
This is clear from a reading of Section 4(d) of the Trademark Law.
Trademark Law; Legislative intention.Parenthetically, it may be stated that the
ruling in the Mentholatum case was subsequently derogated when Congress,
purposely to counteract the effects of said case, enacted Republic Act No. 638,
inserting Section 21-A in the Trademark Law, which allows a foreign corporation or
juristic person to bring an action in the Philippine courts for infringement of a mark
or tradename, for unfair competition, or false designation of origin and false
description, whether or not it has been licensed to do business in the Philippines
under the Corporation Law, at the time it brings complaint.
52
52
SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
Same; Distinction between suit far infringement or unfair competition under Section
21-A and cancellation under Section 17.The first kind of action, it may be stated,
is cognizable by the Courts of First Instance (Sec. 27); the second partakes of an
administrative proceeding before the Patent Office (Sec. 18, in relation to Sec. 8).
And while a suit under Section 21-A requires that the mark or trademark alleged to
have been infringed has been registered or assigned to the suing foreign
corporation, a suit for cancellation of the registration of a mark or tradename under
Section 17 has no such requirement. For such mark or trade-name should not have
been registered in the first place (and consequently may be cancelled if so
registered) if it consists of or comprises a mark or tradename which so resembles a
mark or tradename . . . previously used in the Philippines by another and not
abandoned, as to be likely, when applied to or used in connection with goods,
business or services of the applicant, to cause confusion or mistake or to deceive
purchasers. (Sec. 4d)
The General Garments Corporation, organized and existing under the laws of the
Philippines, is the owner of the trademark Puritan, under Registration No. 10059
issued on November 15, 1962 by the Philippine Patent Office, for assorted mens
wear, such as sweaters, shirts, jackets, undershirts and briefs.
On March 9, 1964 the Puritan Sportswear Corporation, organized and existing in and
under the laws of the state of Pennsylvania, U.S.A., filed a petition with the
Philippine Patent Office for the cancellation of the trademark Puritan registered in
the name of General Garments Corporation, alleging ownership and prior use in the
Philippines of the said trademark on the same kinds of goods, which use it had not
abandoned; and alleging further that the registration thereof by General Garments
Corporation had been obtained fraudulently and in violation of Section 17(c) of
Republic Act No. 166, as amended, in relation to Section 4(d) thereof.
On March 30, 1964 General Garments Corporation moved to dismiss the petition on
several grounds, all of which may be synthesized in one single issue: whether or not
Puritan Sportswear Corporation, which is a foreign corporation not licensed to do
business and not doing business in the Philippines, has legal capacity to maintain a
suit in the Philippine Patent Office for cancellation of a trademark registered therein.
The Director of Patents denied the motion to dismiss on August 6, 1964, and denied
likewise the motion for reconsideration on March 5, 1965, whereupon General
Garments Corporation, hereinafter referred to as petitioner, filed the instant petition
for review.
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SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
Section 17(c) and Section 4(d) of the Trademark Law provide respectively as follows:
SEC. 17. Grounds for cancellation.Any person, who believes that he is or will be
damaged by the registration of a mark or trade-name, may, upon the payment of
the prescribed fee, apply to cancel said registration upon any of the following
grounds:
x
(c) That the registration was obtained fraudulently or contrary to the provisions of
section four, Chapter II thereof: x x x
SEC. 4. Registration of trade-marks, trade-names and service-marks which shall be
known as the principal register. The owner of a trade-mark, trade-name or servicemark used to distinguish his goods, business or services from the goods, business or
services of others shall have the right to register the same on the principal register,
unless it:
x
less analogous question arose in Western Equipment & Supply Co. v. Reyes, 51 Phil.
115. The syllabus of the report, which is a correct statement of the doctrine laid
down in the decision, reads as follows:
A foreign corporation which has never done x x x business in the Philippine Islands
and which is unlicensed and unregistered to do business here, but is widely and
favorably known in the Islands through the use therein of its products
_______________
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SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
bearing its corporate and trade name has a legal right to maintain an action in the
Islands.
x
The purpose of such a suit is to protect its reputation, corporate name and goodwill
which has been established through the natural development of its trade for a long
period of years, in the doing of which it does not seek to enforce any legal or
contract rights arising from, or growing out of any business which it has transacted
in the Philippine Islands. The right to the use of the corporate or trade name
is a property right, a right in rem, which it may assert and protect in any of the
courts of the worldeven in jurisdictions where it does not transact businessjust
the same as it may protect its tangible property, real or personal against trespass or
conversion.
In Asari Yoko Co., Ltd. v. Kee Boc (Jan. 20, 1961) 1 SCRA 1, the plaintiff, a Japanese
corporation which had acquired prior use in the Philippines of the trademark RACE
for mens shirts and undershirts but which had not shown prior registration thereof,
successfully maintained a suit opposing the application of the defendant, a local
businessman, to register the same trademark for similar goods produced by him.
This Court said: The lawful entry into the Philippines of goods bearing the
trademark since 1949 should entitle the owner of the trademark to the right to use
the same to the exclusion of others. Modern trade and commerce demands that
depredations on legitimate trademarks of non-nationals should not be
countenanced. It may be added here that the law against such depredations is not
only for the protection of the owner of the trademark who has acquired prior use
thereof but also, and more importantly, for the protection of purchasers from
confusion, mistake or deception as to the goods they are buying. This is clear from a
reading of Section 4(d) of the Trademark Law.
Petitioner argues that the ruling in Western Equipment has been superseded by the
later decision of this Court in Mentholatum Co., Inc. v. Mangaliman (1941), 72 Phil.
524, where it was held that inasmuch as Mentholatum Co., Inc. was a foreign
corporation doing business in the Phil57
which is that the foreign corporation is allowed thereunder to sue whether or not it
has been licensed to do business in the Philippines pursuant to the Corporation
Law (precisely to counteract the effects of the decision in the Mentholatum case).
In any event, respondent in the present case is not suing for infringement or unfair
competition under Section 21-A, but for cancellation under Section 17, on one of the
grounds enumerated in Section 4. The first kind of action, it may be stated, is
cognizable by the Courts of First Instance (Sec. 27); the second partakes of an
administrative proceeding before the Patent Office (Sec. 18, in relation to Sec. 8).
And while a suit under Section 21-A requires
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SUPREME COURT REPORTS ANNOTATED
General Garments Corporation vs. Director of Patents
that the mark or tradename alleged to have been infringed has been registered or
assigned to the suing foreign corporation, a suit for cancellation of the registration
of a mark or tradename under Section 17 has no such requirement. For such mark
or trade-name should not have been registered in the first place (and consequently
may be cancelled if so registered) if it consists of or comprises a mark or
tradename which so resembles a mark or trade-name . . . previously used in the
Philippines by another and not abandoned, as to be likely, when applied to or used
in connection with goods, business or services of the applicant, to cause confusion
or mistake or to deceive purchasers; . . . (Sec. 4d).
Petitioners last argument Is that under Section 37 of the Trademark Law respondent
is not entitled to the benefits of said law because the Philippines is not a signatory
to any international treaty or convention relating to marks or tradenames or to the
repression of unfair competition. Section 37 reads in part:
SEC. 37. Rights of foreign registrants.Persons who are nationals of, domiciled in,
or have a bona fide or effective business or commercial establishment in any
foreign country, which is a party to any international convention or treaty relating to
marks or trade-names, or the repression of unfair competition to which the
Philippines may be a party, shall be entitled to the benefits and subject to the
provisions of this Act to the extent and under the conditions essential to give effect
to any such convention and treaties so long as the Philippines shall continue to be a
party thereto, except as provided in the following paragraphs of this section.
As correctly pointed out by respondents, this provision was incorporated in the law
in anticipation of the eventual adherence of the Philippines to any international