LAWONINTELLECTUALPROPERTY ActanddoesnotengageinbusinessinthePhilippinesmaybringa

CourseOutline civil or administrative action hereunder for opposition,

Atty.RiselG.CastilloTaleon cancellation,infringement,unfaircompetition,orfalsedesignation
oforiginandfalsedescription,whetherornotitislicensedtodo
I. INTELLECTUALPROPERTYRIGHTSINGENERAL businessinthePhilippinesunderexistinglaws.(Sec.21A,R.A.
No.166a)
1. IntellectualPropertyRightsSec.4
2. Differences between Copyrights, Trademarks and
Sec.4.Definitions. Patent

4.1.Theterm"intellectualpropertyrights"consistsof: Copyright Trademark Patent

(a) CopyrightandRelatedRights; The scope of a A trademark is any Patentable
copyright is visiblesigncapableof inventionsrefer
(b) TrademarksandServiceMarks;
confined to distinguishing the toanytechnical
(c) GeographicIndications; literary and goods (trademark) or solution of a
(d) IndustrialDesigns; artistic works services (service problem in any
(e) Patents; whichareoriginal mark)ofanenterprise field of human
(f) LayoutDesigns(Topographies)ofIntegratedCircuits;and intellectual and shall include a activity which
(g) ProtectionofUndisclosedInformation(n)[TRIPS]. creations in the stamped or marked isnew,involves
literary and containerofgoods.In an inventive
artistic domain relation thereto, a step and is
4.2. The term"technology transfer arrangements"refers to
protected from tradenamemeansthe industrially
contracts or agreements involving the transfer of systematic
the moment of name or designation applicable.
knowledgeforthemanufactureofaproduct,theapplicationofa
theircreation. identifying or
process,orrenderingofaserviceincludingmanagementcontracts;
distinguishing an
andthetransfer,assignmentorlicensingofallformsofintellectual
enterprise.
property rights, including licensing of computer software except
computersoftwaredevelopedformassmarket.
3. TechnologyTransferArrangements

4.3. The term"Office"refers to the Intellectual Property Office DEFINITION

createdbythisAct.
Technology transfer arrangements refers to contracts or
agreementsinvolvingthetransferofsystematicknowledgeforthe
4.4Theterm"IPOGazette"referstothegazettepublishedbythe manufactureofaproduct,theapplicationofaprocess,orrendering
OfficeunderthisAct.(n) of a service including management contracts; and the transfer,
assignmentorlicensingofallformsofintellectualpropertyrights,
DEFINITION includinglicensingofcomputersoftwareexceptcomputersoftware
Intellectualpropertyrightsconsistsof:[CTGIPLP] developedformassmarket
a) CopyrightsandRelatedRights
b) TrademarksandServiceMarks NATURE
c) GeographicIndications - licensingcontract
d) IndustrialDesigns - contract between an intellectual property right owner
e) Patents (licensor),andasecondparty(licensee)whowasgranted
the authority to commercially exploit the same
f) LayoutDesigns(Topographies)ofintegratedCircuits
intellectual property right under specified terms and
g) ProtectionofUndisclosedInformation
conditions
- regulation of such contracts is necessary to prevent
a. RightofaForeignertoSueforProtectionofIP
practicesthatmayhaveanadverseeffectoncompetition
RightsSections3and160 andtrade

Sec. 3.International Conventions and Reciprocity. Any person REQUIREDANDPROHIBITEDSTIPULATIONS

whoisanationalorwhoisdomiciledorhasarealandeffective
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
Philippinesisalsoaparty,orextendsreciprocalrightstonationals
ofthePhilippinesbylaw,shallbeentitledtobenefitstotheextent
necessarytogiveeffecttoanyprovisionofsuchconvention,treaty
orreciprocallaw,inadditiontotherightstowhichanyownerofan
intellectualpropertyrightisotherwiseentitledbythisAct.(n)
- failure to comply with the mandatory and prohibited
clausesautomaticallyrendertheTTAunenforceable
- Exception: In certain exceptional cases (Sec. 91), the
TTAmaystillbevalidevenifitcontainsaprohibited
clauseoritdoesnotstipulateamandatoryclauseifthe
sameisapprovedandregisteredwiththeDocumentation,
InformationandTechnologyTransferBureau.
a. VoluntaryLicenseContractSec.85,90,91

Sec.160.RightofForeignCorporationtoSueinTrademarkor - grantedbypatentowner
Service Mark Enforcement Action. Any foreign national or
juridicalpersonwhomeetstherequirementsofSection3ofthis
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY 1
Sec.85.VoluntaryLicenseContract.Toencouragethetransfer
anddisseminationoftechnology,preventorcontrolpracticesand
conditions that may in particular cases constitute an abuse of
intellectualpropertyrightshavinganadverseeffectoncompetition
andtrade,alltechnologytransferarrangementsshallcomplywith
theprovisionsofthisChapter.(n)
Sec. 90.Rights of Licensee. The licensee shall be entitled to
exploitthesubjectmatterofthetechnologytransferarrangement
duringthewholetermofthetechnologytransferarrangement.(Sec.
33C(1),R.A.165a)
Sec.91.ExceptionalCases.Inexceptionalormeritoriouscases
wheresubstantialbenefitswillaccruetotheeconomy,suchashigh
technology content, increase in foreign exchange earnings,
employment generation, regional dispersal of industries and/or
substitutionwithoruseoflocalrawmaterials,orinthecaseof
Board of Investments, registered companies with pioneer status,
exemptionfromanyoftheaboverequirementsmaybeallowedby
theDocumentation,InformationandTechnologyTransferBureau
afterevaluationthereofonacasebycasebasis.(n)
VOLUNTARYLICENSECONTRACT
- oneofthewaysbywhichaninventormayreapeconomic
benefits from the invention is by granting authority to
enterprisesthatcancommerciallyexploittheinvention,
eitherby:
o manufacturing
o distribution
o retailselling
- 2objectivesofthelaw:
o encourage transfer and dissemination of
technology
o prevent practices that may have an adverse
effectoncompetitionandtrade
1. ProhibitedClausesSec.87
Sec.87.ProhibitedClauses.ExceptincasesunderSection91,the
following provisions shall be deemed prima facie to have an
adverseoncompetitionandtrade:
87.1. Those which impose upon the licensee the obligation to
acquirefromaspecificsourcecapitalgoods,intermediateproducts,
rawmaterials,andothertechnologies,orofpermanentlyemploying
personnelindicatedbythelicensor;
87.2.Thosepursuanttowhichthelicensorreservestherighttofix
thesaleorresalepricesoftheproductsmanufacturedonthebasis
ofthelicense;
87.3. Those that contain restrictions regarding the volume and
structureofproduction;
87.4Thosethatprohibittheuseofcompetitivetechnologiesina
nonexclusivetechnologytransferagreement;
87.5.Thosethatestablishafullorpartialpurchaseoptioninfavor
ofthelicensor;
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
87.6. Those that obligate the licensee to transfer for free to the
licensor the inventions or improvements that may be obtained
throughtheuseofthelicensedtechnology;
87.7. Those that require payment of royalties to the owners of
patentsforpatentswhicharenotused;
87.8.Thosethatprohibitthelicenseetoexportthelicensedproduct
unlessjustifiedfortheprotectionofthelegitimateinterestofthe
licensorsuchasexportstocountrieswhereexclusivelicensesto
manufactureand/ordistributethelicensedproduct(s)havealready
beengranted;
87.9.Thosewhichrestricttheuseofthetechnologysuppliedafter
the expiration of the technology transfer arrangement, except in
casesofearlyterminationofthetechnologytransferarrangement
duetoreason(s)attributabletothelicensee;
87.10. Those which require payments for patents and other
industrial property rights after their expiration, termination
arrangement;
87.11.Thosewhichrequirethatthetechnologyrecipientshallnot
contestthevalidityofanyofthepatentsofthetechnologysupplier;
87.12.Thosewhichrestricttheresearchanddevelopmentactivities
of the licensee designed to absorb and adapt the transferred
technology to local conditions or to initiate research and
developmentprogramsinconnectionwithnewproducts,processes
orequipment;
87.13. Those which prevent the licensee from adapting the
importedtechnologytolocalconditions,orintroducinginnovation
toit,aslongasitdoesnotimpairthequalitystandardsprescribed
bythelicensor;
87.14. Those which exempt the licensor for liability for non
fulfillment of his responsibilities under the technology transfer
arrangementand/orliabilityarisingfromthirdpartysuitsbrought
aboutbytheuseofthelicensedproductorthelicensedtechnology;
and
87.15.Otherclauseswithequivalenteffects.(Sec.33C[2],R.A.
165a)
Reason:Theyaredeemedprimafacietohaveanadverseeffecton
competitionandtrade.
Exception:IncasesunderSec.91.
2. MandatoryProvisionsSec.88
Sec.88.MandatoryProvisions.Thefollowingprovisionsshallbe
includedinvoluntarylicensecontracts:
88.1. That the laws of the Philippines shall govern the
interpretationofthesameandintheeventoflitigation,thevenue
shallbethepropercourtintheplacewherethelicenseehasits
principaloffice;
2
88.2. Continued access to improvements in techniques and
processesrelatedtothetechnologyshallbemadeavailableduring
theperiodofthetechnologytransferarrangement;
88.3.Intheeventthetechnologytransferarrangementshallprovide
forarbitration,theProcedureofArbitrationoftheArbitrationLaw
ofthePhilippinesortheArbitrationRulesoftheUnitedNations
Commission on International Trade Law (UNCITRAL) or the
RulesofConciliationandArbitrationoftheInternationalChamber
ofCommerce(ICC)shallapplyandthevenueofarbitrationshall
bethePhilippinesoranyneutralcountry;and
88.4. The Philippine taxes on all payments relating to the
technologytransferarrangementshallbebornebythelicensor.(n)
b. CompulsoryLicensing
- grant by the Director of Legal Affairs of a license to
exploitapatentedinventionwithoutthepermissionofthe
patent holder either by manufacturing or parallel
importation
o parallelimportationimportationofdrugsand
medicinesbyagovernmentagencyorbyany
thirdparty
NATURE
- Thiscoverssituationswherelicensesareawardedagainst
thewillofthepatentowner.
JURISDICTION
- Director ofLegal Affairshas originaljurisdiction over
petitionsforcompulsorylicensingofpatents.
1. GroundsSec.93,96,97
Sec. 93.Grounds for Compulsory Licensing. The Director of
LegalAffairsmaygrantalicensetoexploitapatentedinvention,
evenwithouttheagreementofthepatentowner,infavorofany
personwhohasshownhiscapabilitytoexploittheinvention,under
anyofthefollowingcircumstances:
93.1. National emergency or other circumstances of extreme
urgency;
93.2. Where the public interest, in particular, national security,
nutrition,healthorthedevelopmentofothervitalsectorsofthe
nationaleconomyasdeterminedbytheappropriateagencyofthe
Government,sorequires;or
93.3.Whereajudicialoradministrativebodyhasdeterminedthat
the manner of exploitation by the owner of the patent or his
licenseeisanticompetitive;or
93.4.Incaseofpublicnoncommercialuseofthepatentbythe
patentee,withoutsatisfactoryreason;
93.5. If the patented invention is not being worked in the
Philippines on a commercial scale, although capable of being
worked,withoutsatisfactoryreason:Provided,Thattheimportation
of the patented article shall constitute working or using the
patent.(Secs.34,34A,and34B,R.A.No.165a)
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
GROUNDS(EPiC3D)
- National emergency or other circumstances of extreme
urgency;
- Whenpublicinterestsorequires;
- Mannerofexploitationofpatentisanticompetitive;
- Public noncommercial use of the patent without
satisfactoryreason;
- PatentedinventionisnotbeingworkedinthePhilippines
onacommercialscalealthoughcapableofbeingworked;
and
- Wherethedemandforthepatenteddrugsandmedicines
isnotbeingmetatanadequateextentandonreasonable
terms.
Sec. 96.Compulsory Licensing of Patents Involving Semi
Conductor Technology. In the case of compulsory licensing of
patentsinvolvingsemiconductortechnology,thelicensemayonly
begrantedincaseofpublicnoncommercialuseortoremedya
practicedeterminedafterjudicialoradministrativeprocesstobe
anticompetitive.(n)
Sec. 97.Compulsory License Based on Interdependence of
Patents.Iftheinventionprotectedbyapatent,hereafterreferred
to as the "second patent," within the country cannot be worked
withoutinfringinganotherpatent,hereafterreferredtoasthe"first
patent,"grantedonapriorapplicationorbenefitingfromanearlier
priority,acompulsorylicensemaybegrantedtotheownerofthe
second patent to the extent necessary for the working of his
invention,subjecttothefollowingconditions:
97.1. The invention claimed in the second patent involves an
importanttechnicaladvanceofconsiderableeconomicsignificance
inrelationtothefirstpatent;
97.2. The owner of the first patent shall be entitled to a cross
license on reasonable terms to use the invention claimed in the
secondpatent;
97.3.Theuseauthorizedinrespectofthefirstpatentshallbenon
assignableexceptwiththeassignmentofthesecondpatent;and
97.4.ThetermsandconditionsofSections95,96and98to100of
thisAct.(Sec.34C,R.A.No.165a)
VoluntaryLicensing CompulsoryLicensing
AstoGrantor
PatentOwner DirectorofLegalAffairs
AstoGrounds
NoSpecificGrounds Those mentioned under Section 10 of
RepublicAct9502
2. RequirementtoObtainaLicenseSec.95
Sec. 95.Requirement to Obtain a License on Reasonable
CommercialTerms.
95.1.Thelicensewillonlybegrantedafterthepetitionerhasmade
effortstoobtainauthorizationfromthepatentowneronreasonable
commercialtermsandconditionsbutsucheffortshavenotbeen
successfulwithinareasonableperiodoftime.
3
 maybeappliedforatanytimeafterthegrantofthepatent.(Sec.
95.2.TherequirementunderSubsection95.1shallnotapplyinthe 34[1],R.A.No.165)
followingcases:
(a) Wherethepetitionforcompulsorylicenseseekstoremedya PERIODFORFILINGFORACOMPULSORYLICENSE
practicedeterminedafterjudicialoradministrativeprocessto - dependsonthegroundforthepetition
beanticompetitive;
(b) Insituationsofnationalemergencyorothercircumstancesof Ground Period
extremeurgency; Ifthepatentedversionisnotbeingworked Beforetheexpirationofaperiod
(c) Incasesofpublicnoncommercialuse. in thePhilippines ona commercialscale, years from the date of the fili
althoughcapableofbeingworkedwithout applicationorthree(3)yearsfro
satisfactoryreason ofthepatentwhicheverperiodex
95.3.Insituationsofnationalemergencyorothercircumstancesof
extreme urgency, the right holder shall be notified as soon as Seesections93.2,93.3,93.4and97ofthe Anytimeafterthegrantofthepat
reasonablypracticable. IPC

95.4. In the case of public noncommercial use, where the
governmentorcontractor,withoutmakingapatentsearch,knows
orhasdemonstrablegroundstoknowthatavalidpatentisorwill
beusedbyorforthegovernment,therightholdershallbeinformed
promptly.(n)
WHEN
- after the petitioner has made efforts to obtain
authorization from the patent owner on a reasonable
commercialtermsandconditionsbutsucheffortshave
notbeensuccessfulwithinareasonableperiodoftime.
THIS REQUIREMENT SHALL NOT APPLY IN THE
FOLLOWINGCASES
1. Where the petition for compulsory license seeks to
remedy a practice determined after judicial or
administrativeprocesstobeanticompetitive;
2. In situations of national emergency or other
circumstancesofextremeurgency;
o the right holder shall be notified as soon as
reasonablypracticable
3. Incasesofpublicnoncommercialuse;and
o where the government or contractor, without
making a patent search, knows or has
demonstrable grounds to know that a valid
patent is or will be used by or for the
government
the right holder shall be informed
promptly
4. In case where the demand for the patented drugs and
medicines in the Philippines is not being met to an
adequateextentandonreasonableterms,asdetermined
bytheSecretaryoftheDOH.
o therightholdershallbeinformedpromptly
II. PATENTS
NATUREANDDEFINITION
Patentsetofexclusiverightsgrantedbyastatetoaninventoror
hisassigneeforafixedperiodoftimeinexchangeforadisclosure
ofaninvention
- ultimategoal:tobringnewdesignsandtechnologiesinto
thepublicdomainthroughdisclosure
- thelawattemptstostrikeanidealbalancebetweenthe
twointerests:
o publicwhichwillbenefitfromnewideas
o investorswhomustbeprotected
- itistherightgrantedtoaninventorbytheState,orbythe
regionalofficeactingforseveralStates,whichallowsthe
inventor to exclude anyone else from commercially
exploitinghisinventionforalimitedperiod
- it is a statutory monopoly which protects against
unlicenseduseofthepatenteddeviceorprocessevenby
theonewhodiscovereditthroughindependentresearch
- exclusiveenjoymentisguaranteedfor20years,butupon
the expiration of that period, the knowledge of the
inventioninurestothepeople,whoarethusenabledto
practiceitandprofitbyitsuse
THREEFOLDPURPOSEANDULTIMATEGOAL
1. Patentlawseekstofosterandrewardinvention
2. Promotes disclosure of inventions to stimulate further
invention and to permit the public to practice the
inventiononcethepatentexpires
3. Thestringentrequirementsforpatentprotectionseekto
ensurethatideasinthepublicdomainremaintherefor
thefreeuseofthepublic
Ultimategoal:bringnewdesignsandtechnologiesintothepublic
domainthroughdisclosure

c. PeriodtoFileaPetitionSec.94 TERMOFPATENT
The term of patent is 20 years counted from the filing date of
Sec.94.PeriodforFilingaPetitionforaCompulsoryLicense. application.
- upon expiration of that period, the knowledge of the
94.1.Acompulsorylicensemaynotbeappliedforontheground inventioninurestothepeople,whoarethusenabledto
statedinSubsection93.5beforetheexpirationofaperiodoffour practiceitandprofitfromitsuse
(4)yearsfromthedateoffilingoftheapplicationorthree(3)years
fromthedateofthepatentwhicheverperiodexpireslast. 1. PatentableInventionsSec.21,23,24,25,26,27

94.2. A compulsory license which is applied for on any of the Sec. 21.Patentable Inventions. Any technical solution of a
groundsstatedinSubsections93.2,93.3,and93.4andSection97 probleminanyfieldofhumanactivitywhichisnew,involvesan
inventivestepandisindustriallyapplicableshallbepatentable.It

MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY 4
maybe,ormayrelateto,aproduct,orprocess,oranimprovement
ofanyoftheforegoing.(Sec.7,R.A.No.165a)
REQUISITESFORPATENTABILITY(TINIP)
- Any technical solution of a problem in any field of
humanactivity
- Inventivestep
o An invention involves an inventive step if,
havingregardtopriorart,itisnotobvioustoa
personskilledintheartatthetimeofthefiling
dateorprioritydateoftheapplicationclaiming
theinvention.
- Novelty
o Aninventionshallnotbeconsiderednewifit
formspartofapriorart.
- Industrialapplicability
o Aninventionthatcanbeproducedandusedin
anyindustry
- Patentablesubjectmatter
o An invention that does not fall within the
prohibitions of a NonPatentable Invention
underSec.22oftheIPC.
PATENTABLEINVENTIONS
- a product, such as a machine, a device, an article of
manufacture,acompositionofmatter,amicroorganism;
- a process, such as a method of use, a method of
manufacturing, a nonbiological process, a
microbiologicalprocess;
- computerrelatedinventions;and
- animprovementofanyoftheforegoing
Sec.23.Novelty.Aninventionshallnotbeconsiderednewifit
formspartofapriorart.(Sec.9,R.A.No.165a)
Sec.24.PriorArt.Priorartshallconsistof:
24.1. Everything which has been made available to the public
anywhereintheworld,beforethefilingdateortheprioritydateof
theapplicationclaimingtheinvention;and
24.2. The whole contents of an application for a patent, utility
model, or industrial design registration, published in accordance
withthisAct,filedoreffectiveinthePhilippines,withafilingor
prioritydatethatisearlierthanthefilingorprioritydateofthe
application: Provided, That the application which has validly
claimedthefilingdateofanearlierapplicationunderSection31of
thisAct,shallbepriorartwitheffectasofthefilingdateofsuch
earlier application: Provided further, That the applicant or the
inventor identified in both applications are not one and the
same.(Sec.9,R.A.No.165a)
Sec.25.NonPrejudicialDisclosure.
25.1. The disclosure of information contained in the application
during the twelve (12) months preceding the filing date or the
prioritydateoftheapplicationshallnotprejudicetheapplicanton
thegroundoflackofnoveltyifsuchdisclosurewasmadeby:
(a) Theinventor;
(b) A patent office and the information was contained (a) in
anotherapplicationfiledbytheinventorandshouldnothave
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
been disclosed by the office, or (b) in an application filed
withouttheknowledgeorconsentoftheinventorbyathird
party which obtained the information directly or indirectly
fromtheinventor;or
(c) A third party which obtained the information directly or
indirectlyfromtheinventor.
25.2.ForthepurposesofSubsection25.1,"inventor"alsomeans
anypersonwho,atthefilingdateofapplication,hadtherighttothe
patent.(n)
Sec.26.InventiveStep.Aninventioninvolvesaninventivestepif,
havingregardtopriorart,itisnotobvioustoapersonskilledinthe
artatthetimeofthefilingdateorprioritydateoftheapplication
claimingtheinvention.(n)
Sec. 27.Industrial Applicability. An invention that can be
produced and used in any industry shall be industrially
applicable.(n)
2. NonPatentableInventionsSec.22
Sec. 22.NonPatentable Inventions. The following shall be
excludedfrompatentprotection:
22.1.Discoveries,scientifictheoriesandmathematicalmethods;
22.2. Schemes, rules and methods of performing mental acts,
playinggamesordoingbusiness,andprogramsforcomputers;
22.3 Methods for treatment of the human or animal body by
surgeryortherapyanddiagnosticmethodspracticedonthehuman
or animal body. This provision shall not apply to products and
compositionforuseinanyofthesemethods;
22.4. Plant varieties or animal breeds or essentially biological
processfortheproductionofplantsoranimals.Thisprovisionshall
not apply to microorganisms and nonbiological and
microbiologicalprocesses.
Provisions under this subsection shall not preclude Congress to
considertheenactmentofalawprovidingsuigenerisprotectionof
plant varieties and animal breeds and a system of community
intellectualrightsprotection:
22.5.Aestheticcreations;and
22.6.Anythingwhichiscontrarytopublicorderormorality.(Sec.
8,R.A.No.165a)
NONPATENTABLEINVENTIONS(DASM2AAP2)
- Discoveries, scientific theories and mathematical
methods,alawofnature,ascientifictruth,orknowledge
assuch;
- Abstract ideas or theories, fundamental concepts apart
fromthemeansorprocessesforcarryingtheconceptto
produceatechnicaleffect;
- Schemes,rulesandmethodsofperformingmentalacts,
playinggames;
5
 - Methodofdoingbusiness,suchasmethodorsystemfor
transacting business without the technical means for
carryingoutthemethodorsystem;
- Methodsfortreatmentofthehumanoranimalbodyby
surgeryortherapyanddiagnosticmethodspracticedon
the humanor animalbody. The nonpatentabilityshall
notapplytoproductsandcompositionforuseinanyof
thesemethods;
- Anything which is contrary to public order, health,
welfare,ormorality,orprocessforcloningormodifying
thegermlinegeneticidentityofhumansoranimalsor
usesofthehumanembryo;
- Aestheticcreations;
- Programsforcomputers;and
- Plantvarietiesoranimalbreedsoressentiallybiological
process for the production of plants and animals. This
provision shall not apply to microorganisms and non
biologicalandmicrobiologicalprocesses.
3. OwnershipofaPatent
a. RighttoaPatentSec.28
Sec.28.RighttoaPatent.Therighttoapatentbelongstothe Englishtranslationisfiledwithinsix(6)monthsfromthedateof
inventor,hisheirs,orassigns.Whentwo(2)ormorepersonshave
jointlymadeaninvention,therighttoapatentshallbelongtothem
jointly.(Sec.10,R.A.No.165a)
The right to a patent belongs to the inventor. Like any other
property,patentmaybeacquiredthroughsuccessionorassignment.
The rightto apatent mayalso besubject ofjointownership as
whentwoormorepersonshavejointlymadeaninvention.
b. FirsttoFileRuleSec.29
Sec.29.FirsttoFileRule.Iftwo(2)ormorepersonshavemade
theinventionseparatelyandindependentlyofeachother,theright
tothepatentshallbelongtothepersonwhofiledanapplicationfor
suchinvention,orwheretwoormoreapplicationsarefiledforthe
sameinvention,totheapplicantwhohastheearliestfilingdateor,
theearliestprioritydate.(3rdSentence,Sec.10,R.A.No.165a.)
FIRSTTOFILERULE
- theremustbeatleasttwopersonswhohavemadethe
inventionseparatelyandindependentlyofeachother
- itgrantsthepatentrightsofaninventiontotheperson
who first files a patent application for that invention,
whetherornotheistheinventor
c. InventionsCreatedPursuanttoaCommission
Sec.30
Sec.30.InventionsCreatedPursuanttoaCommission.
30.1.Thepersonwhocommissionstheworkshallownthepatent,
unlessotherwiseprovidedinthecontract.
30.2.Incasetheemployeemadetheinventioninthecourseofhis
employmentcontract,thepatentshallbelongto:
(a) The employee, if the inventive activity is not a part of his
regulardutieseveniftheemployeeusesthetime,facilitiesand
materialsoftheemployer.
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
(b) Theemployer,iftheinventionistheresultoftheperformance
ofhisregularlyassignedduties,unlessthereisanagreement,
expressorimplied,tothecontrary.(n)
Whenaninventionismadebyanemployeeinthecourseofhis
employmentcontract,thepatentshallbelongto:
- Employeeiftheinventiveactivityisnotapartofhis
regular duties even if the employee uses the time,
facilitiesandmaterialsoftheemployer
- Employer if the invention is the result of the
performanceofhisregularlyassignedduties,unlessthere
isanagreement,expressorimplied,tothecontrary
d. RightofPrioritySec.31
Sec.31.RightofPriority.Anapplicationforpatentfiledbyany
person who has previously applied for the same invention in
anothercountrywhichbytreaty,convention,orlawaffordssimilar
privilegestoFilipinocitizens,shallbeconsideredasfiledasofthe
dateoffilingtheforeignapplication:Provided,That:(a)thelocal
applicationexpresslyclaimspriority;(b)itisfiledwithintwelve
(12)monthsfromthedatetheearliestforeignapplicationwasfiled;
and(c)acertifiedcopyoftheforeignapplicationtogetherwithan
filinginthePhilippines.(Sec.15,R.A.No.165a)
Anapplicationforpatentfiledbyanypersonwhohaspreviously
appliedforthesameinventioninanothercountrywhichbytreaty,
convention,orlawaffordssimilarprivilegestoFilipinocitizens,
shall be considered as filed as of the date of filing the foreign
application:Provided,That:
(a) thelocalapplicationexpresslyclaimspriority;
(b) itisfiledwithintwelve(12)monthsfromthedatethe
earliestforeignapplicationwasfiled;and
(c) acertifiedcopyoftheforeignapplicationtogetherwith
anEnglishtranslationisfiledwithinsix(6)monthsfrom
thedateoffilinginthePhilippines.
4. GroundsforCancellationofaPatentSec.61
Sec.61.CancellationofPatents.
61.1.Anyinterestedpersonmay,uponpaymentoftherequiredfee,
petitiontocancelthepatentoranyclaimthereof,orpartsofthe
claim,onanyofthefollowinggrounds:
(a) Thatwhatisclaimedastheinventionisnotneworpatentable;
(b) Thatthepatentdoesnotdisclosetheinventioninamanner
sufficientlyclearandcompleteforittobecarriedoutbyany
personskilledintheart;or
(c) Thatthepatentiscontrarytopublicorderormorality.
61.2. Where the grounds for cancellation relate to some of the
claimsorpartsoftheclaim,cancellationmaybeeffectedtosuch
extentonly.(Secs.28and29,R.A.No.165a)
FORMALITIES
Upon petition, noticeand hearingby anyinterested person, and
afterpaymentoftherequiredfee.Thepetitionshallbe:
- inwriting;
- verified;
- specifythegroundsuponwhichitisbased;
- includeastatementoffacts;and
6
 - attach copies of printed publications, or of patents of
other countries, together with their translations in
English.
EFFECT
Terminationofrightsconferredbythepatent.s
GROUNDS
- Theinventionisnotneworpatentable
- Thepatentdoesnotdisclosetheinventioninamanner
sufficientlyclearandcompleteforittobecarriedoutby
anypersonskilledintheart
- Thepatentiscontrarytopublicorderormorality
5. RemedyoftheTrueandActualInventorSec.29,67,
68,70
Sec.29.FirsttoFileRule.Iftwo(2)ormorepersonshavemade
theinventionseparatelyandindependentlyofeachother,theright
tothepatentshallbelongtothepersonwhofiledanapplicationfor
suchinvention,orwheretwoormoreapplicationsarefiledforthe
sameinvention,totheapplicantwhohastheearliestfilingdateor,
theearliestprioritydate.
Sec.67.PatentApplicationbyPersonsNotHavingtheRighttoa
Patent.
67.1.IfapersonreferredtoinSection29otherthantheapplicant,
isdeclaredbyfinalcourtorderordecisionashavingtherighttothe
patent,suchpersonmay,withinthree(3)monthsafterthedecision
hasbecomefinal:
(a) Prosecutetheapplicationashisownapplicationinplaceofthe
applicant;
(b) Fileanewpatentapplicationinrespectofthesameinvention;
(c) Requestthattheapplicationberefused;or
(d) Seekcancellationofthepatent,ifonehasalreadybeenissued.
67.2. The provisions of Subsection 38.2 shall apply mutatis
mutandistoanewapplicationfiledunderSubsection67.1(b).(n)
Sec.68.RemediesoftheTrueandActualInventor.Ifaperson,
who was deprived of the patent without his consent or through
fraudisdeclaredbyfinalcourtorderordecisiontobethetrueand
actualinventor,thecourtshallorderforhissubstitutionaspatentee,
orattheoptionofthetrueinventor,cancelthepatent,andaward
actual and other damages in his favor if warranted by the
circumstances.
Sec.70.TimetoFileActioninCourt.Theactionsindicatedin
Sections67and68shallbefiledwithinone(1)yearfromthedate
of publication made in accordance with Sections 44 and 51,
respectively.
6. RightsConferredbyaPatentSec.71,55
Therightsconferredbyapatentdependonwhetherthesubject
matterisaproductoraprocess.
Sec.71.RightsConferredbyPatent.
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
71.1.Apatentshallconferonitsownerthefollowingexclusive
rights:
(a) Wherethesubjectmatterofapatentisaproduct,torestrain,
prohibitandpreventanyunauthorizedpersonorentityfrom
making, using, offering for sale, selling or importing that
product;
(b) Wherethesubjectmatterofapatentisaprocess,torestrain,
prevent or prohibit any unauthorized person or entity from
usingtheprocess,andfrommanufacturing,dealingin,using,
sellingorofferingforsale,orimportinganyproductobtained
directlyorindirectlyfromsuchprocess.
71.2.Patentownersshallalsohavetherighttoassign,ortransfer
bysuccessionthepatent,andtoconcludelicensingcontractsforthe
same.
Thepatentthusisbroaderwhenitssubjectmatterisaprocesssince
theownerdoesnotonlycontroltheuseoftheprocessbutalso
productsobtainedfromsuchprocess,eventhosethatareobtained
indirectlyfromthesameprocess.
Sec.55.AnnualFees.
55.1.Tomaintainthepatentapplicationorpatent,anannualfee
shallbepaidupontheexpirationoffour(4)yearsfromthedatethe
applicationwaspublishedpursuanttoSection44hereof,andon
eachsubsequentanniversaryofsuchdate.Paymentmaybemade
withinthree(3)monthsbeforetheduedate.Theobligationtopay
the annual fees shall terminate should the application be
withdrawn,refused,orcancelled.
55.2.Iftheannualfeeisnotpaid,thepatentapplicationshallbe
deemedwithdrawnorthepatentconsideredaslapsedfromtheday
followingtheexpirationoftheperiodwithinwhichtheannualfees
weredue.Anoticethattheapplicationisdeemedwithdrawnorthe
lapse of a patent for nonpayment of any annual fee shall be
publishedintheIPOGazetteandthelapseshallberecordedinthe
RegisteroftheOffice.
55.3. Agrace periodof six(6) monthsshall begranted forthe
payment of the annual fee, upon payment of the prescribed
surchargefordelayedpayment.
7. LimitationsofPatentRightsSec.71,72
Sec.71.RightsConferredbyPatent.
71.1.Apatentshallconferonitsownerthefollowingexclusive
rights:
(a) Wherethesubjectmatterofapatentisaproduct,torestrain,
prohibitandpreventanyunauthorizedpersonorentityfrom
making, using, offering for sale, selling or importing that
product;
(b) Wherethesubjectmatterofapatentisaprocess,torestrain,
prevent or prohibit any unauthorized person or entity from
usingtheprocess,andfrommanufacturing,dealingin,using,
sellingorofferingforsale,orimportinganyproductobtained
directlyorindirectlyfromsuchprocess.
7
71.2.Patentownersshallalsohavetherighttoassign,ortransfer
bysuccessionthepatent,andtoconcludelicensingcontractsforthe
same.(Sec.37,R.A.No.165a)
Sec.72.LimitationsofPatentRights.Theownerofapatenthas
no right to prevent third parties from performing, without his
authorization, the acts referred to in Section 71 hereof in the
followingcircumstances:
72.1Usingapatentedproductwhichhasbeenputonthemarketin
thePhilippinesbytheowneroftheproduct,orwithhisexpress
consent, insofar as such use is performed after that product has
beensoputonthesaidmarket;
72.2. Wherethe actis doneprivately andon anoncommercial
scaleorforanoncommercialpurpose:Provided,Thatitdoesnot
significantlyprejudicetheeconomicinterestsoftheownerofthe
patent;
72.3.Wheretheactconsistsofmakingorusingexclusivelyforthe
purpose of experiments that relate to the subject matter of the
patentedinvention;
72.4.Wheretheactconsistsofthepreparationforindividualcases,
in a pharmacy or by a medical professional, of a medicine in
accordance with a medical prescription or acts concerning the
medicinesoprepared;
72.5.Wheretheinventionisusedinanyship,vessel,aircraft,or
land vehicle of any other country entering the territory of the
Philippines temporarily or accidentally:Provided,That such
invention is used exclusively for the needs of the ship, vessel,
aircraft, or land vehicle and not used for the manufacturing of
anythingtobesoldwithinthePhilippines.(Secs.38and39,R.A.
No.165a)
a. PriorUserSec.73
Sec.73.PriorUser.
73.1.NotwithstandingSection72hereof,anyprioruser,who,in
good faith was using the invention or has undertaken serious
preparations to use the invention in his enterprise or business,
beforethefilingdateorprioritydateoftheapplicationonwhicha
patentisgranted,shallhavetherighttocontinuetheusethereofas
envisagedinsuchpreparationswithintheterritorywherethepatent
producesitseffect.
73.2.Therightofthepriorusermayonlybetransferredorassigned
togetherwithhisenterpriseorbusiness, or with that part of his
enterpriseorbusinessinwhichtheuseorpreparationsforusehave
beenmade.
Thepriorusercannotassigntherighttousethepatentedproductor
processwithoutgivingupentirelyhisenterprise.
b. UsebytheGovernmentSec.74
TheGovernmentasageneralruleisboundtorespectthepatent.
Thisissobecausepatentisapropertyinitselfanditisguaranteed
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
inourConstitutionthatnooneshallbedeprivedoflife,libertyor
propertywithoutdueprocessoflaw.
Sec.74.UseofInventionbyGovernment.
74.1. A Government agency or third person authorized by the
Governmentmayexploittheinventionevenwithoutagreementof
thepatentownerwhere:
(a) thepublicinterest,inparticular, nationalsecurity,nutrition,
healthorthedevelopmentofothersectors,asdeterminedby
theappropriateagencyofthegovernment,sorequires;or
(b) A judicial or administrative body has determined that the
manner of exploitation, by the owner of the patent or his
licensee,isanticompetitive.
74.2.TheusebytheGovernment,orthirdpersonauthorizedbythe
Governmentshallbesubject,mutatismutandis,totheconditions
setforthinSections95to97and100to102.
8. PatentInfringementSec.76
Sec.76.CivilActionforInfringement.
76.1.Themaking,using,offeringforsale,selling,orimportinga
patentedproductoraproductobtaineddirectlyorindirectlyfroma
patented process, or the use of a patented process without the
authorizationofthepatenteeconstitutespatentinfringement.
76.2.Anypatentee,oranyonepossessinganyright,titleorinterest
inandtothepatentedinvention,whoserightshavebeeninfringed,
maybringacivilactionbeforeacourtofcompetentjurisdiction,to
recoverfromtheinfringersuchdamagessustainedthereby, plus
attorneysfeesandotherexpensesoflitigation,andtosecurean
injunctionfortheprotectionofhisrights.
76.3.Ifthedamagesareinadequateorcannotbereadilyascertained
withreasonablecertainty,thecourtmayawardbywayofdamages
asumequivalenttoreasonableroyalty.
76.4.Thecourtmay,accordingtothecircumstancesofthecase,
award damages in a sum above the amount found as actual
damagessustained:Provided,Thattheawarddoesnotexceedthree
(3)timestheamountofsuchactualdamages.
76.5. The court may, in its discretion, order that the infringing
goods, materials and implements predominantly used in the
infringementbedisposedofoutsidethechannelsofcommerceor
destroyed,withoutcompensation.
76.6.Anyonewhoactivelyinducestheinfringementofapatentor
providestheinfringerwithacomponentofapatentedproductorof
aproductproducedbecauseofapatentedprocessknowingittobe
especially adopted for infringing the patented invention and not
suitable for substantial noninfringing use shall be liable as a
contributoryinfringerandshallbejointlyandseverallyliablewith
theinfringer.
a. Jurisdiction
i. AMNo.02111SCdatedFeb19,2002
8
 RE:DESIGNATIONOFANINTELLECTUALPROPERTY
JUDGEFORMLA.
ENBANC
Quoted hereunder, for your information, is a resolution of this
CourtdatedFEB192002.
A.M.No.02111SC(Re:DesignationofanIntellectualProperty
JudgeforManila.)
(A)Actingonthememorandumdated15January2002ofDeputy decide cases involving violations of intellectual property rights
CourtAdministratorChristopherO.Lock,favorablyendorsedby
Court Administrator Presbitero J. Velasco, Jr., the Court hereby
designates Branch 24 of the Regional Trial Court of Manila,
presidedoverbyJudgeANTONIOM.EUGENIO,JR.,asSpecial
IntellectualPropertyCourtforManilainsubstitutionofBranch1
ofsaidCourtwhichwasdesignatedSpecialIntellectualProperty
Court,thenpresidedoverbyJudgeRebeccadeGuiaSalvador(now
Associate Justice of the Court of Appeals), pursuant to
AdministrativeOrderNo.11395dated5October1995.
AsjudgeoftheSpecialIntellectualPropertyCourt,JudgeAntonio
M.Eugenio,Jr.shalltryanddecidecasesinvolvingviolationsof
intellectual property rights under the Intellectual Property Code
(R.A.No.8293)committedwithintheCityofManila.
TheearlierdesignationofBranch1oftheRegionalTrialCourtof
Manila as a Special Intellectual Property Court is hereby
REVOKED, and the cases involving violations of intellectual
propertyrightsearlierassignedtosaidBranch1pursuanttoandby
virtueofAdministrativeOrderNo.11395areherebyreassigned
toBranch24ofsaidCourt.
(B) Furthermore, acting on the recommendation of Hon.
AssociateJusticeReynatoS.Puno,ChairmanoftheCommitteeon
Revision of the Rules of Court, and the Office of the Court
Administrator,andinordertoensurespeedydispositionofcases
involving violations of intellectual property rights under the
IntellectualPropertyCode(R.A.No.8293),thefollowingRegional
Trial Courts (RTCs) are hereby designated Special Intellectual
PropertyCourts:
Region1:
1) Hon.AntonioM.Esteves
PresidingJudge,Branch5
RTC,BaguioCity
2) Hon.ManuelL.Argel
PresidingJudge,Branch65
RTC,LaoagCity
Region2:
1) Hon.RolandoR.Velasco
PresidingJudge,Branch6
RTC,Aparri,Cagayan
Region5:
1) Hon.VladimirB.Bruselas
PresidingJudge,Branch6
RTC,LegazpiCity
2) Hon.FilemonB.Montenegro
PresidingJudge,Branch26
RTC,NagaCity
Region8:
1) Hon.FriscoT.Lilagan
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
PresidingJudge,Branch34
RTC,TaclobanCity
Region12:
1) Hon.AlbertB.Abragan
PresidingJudge,Branch3
RTC,IliganCity
The foregoing Special Intellectual Property Courts shall try and
defined under the Intellectual Property Code committed within
theirrespectiveterritorialareas.Sincethereareonlyafewcasesof
violations of intellectual property rights now pending in other
branchesoftheaforementionedRegionalTrialCourts,suchcases
shallremainwithandshallbedecidedbythebranchestowhich
they have been assigned. Only cases hereafter filed may be
assignedtotheabovedesignatedspecialcourts.
(C)Finally,inordertoensureajustandequitabledistributionof
casesamongtheJudgesconcerned,alltheaforementionedSpecial
Intellectual Property Courts shall continue to participate in the
rafflesofothercases:Provided,however,thattheExecutiveJudges
concerned shall adopt a procedure whereby every intellectual
propertyrightcaseassignedtoaSpecialIntellectualPropertyCourt
shouldbeconsideredacaseraffledtoitandbedulycreditedto
suchcourt.
ii. SamsonvCabanos,June28,2005GR161693
SECONDDIVISION
[G.R.No.161693.June28,2005]
MANOLOP.SAMSON,petitioner,vs.HON.VICTORIANOB.
CABANOS,InhiscapacityasActingPresidingJudge,
RegionalTrialCourtofAntipoloCity,Branch71,PEOPLEOF
THEPHILIPPINESandCATERPILLAR,INC.,respondents.
DECISION
PUNO,J.:
PetitionerManoloP.Samsonseeksthereversaloftheorders
dated January 22, 2003 and November 17, 2003 issued by
Presiding Judge Felix S. Caballes and Acting Presiding Judge
VictorianoB.Cabanos,respectively,oftheRegionalTrialCourt
(RTC)ofAntipoloCity,Branch71,inrelationtoCriminalCase
No. 0223183. The assailed orders denied petitioners motion to
quash the information for unfair competition filed against him
before said court.[1]Petitioner also prayed that a temporary
restrainingorderand/orpreliminaryinjunctionbeissuedtoenjoin
respondentjudgefromfurtherproceedingwithCriminalCaseNo.
0223183 until the resolution of the instant petition. The Court
issuedatemporaryrestrainingorderonFebruary18,2004.[2]
Thebackgroundfacts:Petitionerwaschargedwiththecrime
of unfair competition before the RTC of Antipolo City in an
Informationthatstates:
The undersigned Senior State Prosecutor of the Department of
Justice hereby accuses MANOLO P. SAMSON for violation of
Sec.168.3(a)inrelationtoSecs.123.1(e),131.3and170ofRA
8293 otherwise known as the Intellectual Property Code of the
Philippines,committedasfollows:
ThatonoraboutthefirstweekofNovember1999andsometime
prior or subsequent thereto, in Cainta, Rizal, Philippines, and
within the jurisdiction of this Honorable Court, abovenamed
9
accused, owner/proprietor of ITTI Shoes Corporation located at
F.P. Felix Avenue, Cainta, Rizal, did then and there willfully,
unlawfully and feloniously distribute, sell and/or offer for sale
CATERPILLAR products such as footwear, garments, clothing,
bags,accessoriesandparaphernaliawhicharecloselyidenticalto
and/orcolorableimitationsoftheauthenticCaterpillarproductsand
likewiseusingtrademarks,symbolsand/ordesignsaswouldcause
confusion,mistakeordeceptiononthepartofthebuyingpublicto
the damage and prejudice of CATERPILLAR, INC., the prior
adopter, user andowner ofthe followinginternationally famous
marks: CATERPILLAR, CAT, CATERPILLAR, CAT,
CATERPILLAR & DESIGN, CAT AND DESIGN, WALKING
MACHINESandTRACKTYPETRACTOR&DESIGN.
CONTRARYTOLAW.[3]
Petitionermovedtoquashtheinformationonthegroundthat
the court has no jurisdiction over the offense charged in the
Information.HearguedthatSection170ofRepublicAct(R.A.)
No.8293[4]providesthatthepenaltyforviolationofSection168
thereofisimprisonmentfromtwo(2)tofive(5)yearsandafine
ranging from fifty thousand pesos (P50,000.00) to two hundred
thousand pesos (P200,000.00), and R.A. No. 7691[5]amending
Batas Pambansa (B.P.) Blg. 129[6]vested the Metropolitan Trial
Courts (MTC) exclusive original jurisdiction over all offenses
punishable with imprisonment not exceeding six (6) years
irrespectiveoftheamountofthefine. [7]PresidingJudgeFelixS.
Caballes denied the motion for lack of merit in his order dated
January 22, 2003.[8]Petitioner filed a motion for reconsideration
whichwaslikewisedeniedbyActingPresidingJudgeVictoriano
B.Cabanos.[9]
Petitionerfiledtheinstantpetitionforcertioraribeforethis
Courtonpurequestionoflaw:
WhetherornottherespondentRegionalTrialCourthasjurisdiction
over the offenses charged in the subject information where the
penaltythereinrangefromtwo(2)yearstofive(5)years,pursuant
to Section 170 of R.A. 8293, in the light of the enactment of
Republic Act No. 7691, amending B.P. Blg. 129, which vests
exclusive original jurisdiction on the Metropolitan Trial Courts
overalloffensespunishablewithimprisonmentnotexceedingsix
(6)yearsirrespectiveoftheamountoffine,inrelationtoSection
163ofR.A.No.8293.[10]
Petitioner reiterates his argument before the trial court in
supportofhismotiontoquash.HecontendsthatSection170of
R.A.No.8293providesthatthepenaltytobeimposeduponany
personguiltyofviolationofSection168ofthelawisimprisonment
from two (2) to five (5) years and a fine ranging from fifty
thousand pesos (P50,000.00) to two hundred thousand pesos
(P200,000.00). Under Section 2 of R.A. No. 7691, amending
Section32ofB.P.129,theMTCshallexerciseexclusiveoriginal
jurisdiction over all offenses punishable with imprisonment not
exceeding six (6) years irrespective of the fine. As petitioner is
chargedwithanoffensepenalizedbyimprisonmentnotexceeding
six(6)years,thejurisdictiontotrythecaselieswiththeMTCand
nottheRTC.Inaddition,petitionersubmitsthattheoldTrademark
Law,R.A.No.166,conferringjurisdictionontheCourtsofFirst
Instance(nowRTC)overcomplaintsforunfaircompetition,has
beenrepealedbySection239ofR.A.No.8293.HecitestheCourts
decisioninMirpurivs.CourtofAppeals.[11]
Thepetitionmustbedismissed.
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
Itappearsthatpetitionerhadalreadyraisedthesameissue
andargumentbeforethisCourtinthecaseofSamsonvs.Daway,
[12]
decidedonJuly21,2004.Thatcaseinvolvedexactlythesame
factsandissueasinthiscase,exceptthattheinformationforunfair
competitionagainstpetitionerwasfiledbeforetheRTCofQuezon
City.Weheldinthatcase:
The issues posed for resolution are (1) Which court has
jurisdiction over criminal and civil cases for violation of
intellectualpropertyrights?Xxx
UnderSection170ofR.A.No.8293,whichtookeffectonJanuary
1,1998,thecriminalpenaltyforinfringementofregisteredmarks,
unfaircompetition,falsedesignationoforiginandfalsedescription
or representation, isimprisonment from2 to5 yearsand afine
ranging from Fifty Thousand Pesos to Two Hundred Thousand
Pesos,towit:
SEC.170.Penalties.Independentofthecivilandadministrative
sanctionsimposedbylaw,acriminalpenaltyofimprisonmentfrom
two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (P50,000.00) to Two hundred thousand pesos
(P200,000.00)shallbeimposedonanypersonwhoisfoundguilty
of committing any of the acts mentioned in Section 155
[Infringement], Section 168 [Unfair Competition] and Section
169.1 [False Designation of Origin and False Description or
Representation].
Corollarily, Section 163 of the same Code states that actions
(includingcriminalandcivil)underSections150,155,164,166,
167,168and169shallbebroughtbeforethepropercourtswith
appropriatejurisdictionunderexistinglaws,thus
SEC.163.JurisdictionofCourt.AllactionsunderSections150,
155,164and166to169shallbebroughtbeforethepropercourts
with appropriate jurisdiction under existing laws. (Emphasis
supplied)
TheexistinglawreferredtointheforegoingprovisionisSection27
of R.A. No. 166 (The Trademark Law) which provides that
jurisdictionovercasesforinfringementofregisteredmarks,unfair
competition, false designation of origin and false description or
representation, is lodged with the Court of First Instance (now
RegionalTrialCourt)
SEC.27.JurisdictionofCourtofFirstInstance.Allactionsunder
this Chapter [V Infringement] and Chapters VI [Unfair
Competition] and VII [False Designatiion of Origin and False
DescriptionorRepresentation],hereofshallbebroughtbeforethe
CourtofFirstInstance.
WefindnomeritintheclaimofpetitionerthatR.A.No.166was
expresslyrepealedbyR.A.No.8293.TherepealingclauseofR.A.
No.8293,reads
SEC.239.Repeals.239.1.AllActsandpartsofActsinconsistent
herewith, more particularly Republic Act No. 165, as
amended;RepublicActNo.166,asamended;andArticles188and
189 of the Revised Penal Code; Presidential Decree No. 49,
including Presidential Decree No. 285, as amended, are hereby
repealed.(Emphasisadded)
Notably,theaforequotedclausedidnotexpresslyrepealR.A.No.
166initsentirety,otherwise,itwouldnothaveusedthephrases
10
partsofActsandinconsistentherewith;anditwouldhavesimply
statedRepublicActNo.165,asamended;RepublicActNo.166,as
amended;andArticles188and189oftheRevisedPenalCode;
PresidentialDecreeNo.49,includingPresidentialDecreeNo.285,
asamendedareherebyrepealed.Itwouldhaveremovedalldoubts
thatsaidspecificlawshadbeenrenderedwithoutforceandeffect.
TheuseofthephrasespartsofActsandinconsistentherewithonly
means that the repeal pertains only to provisions which are
repugnantornotsusceptibleofharmonizationwithR.A.No.8293.
Section27ofR.A.No.166,however,isconsistentandinharmony
withSection163ofR.A.No.8293.HadR.A.No.8293intendedto
vestjurisdictionoverviolationsofintellectualpropertyrightswith
theMetropolitanTrialCourts, itwouldhaveexpresslystatedso
underSection163thereof.
Moreover,thesettledruleinstatutoryconstructionisthatincaseof
conflictbetweenagenerallawandaspeciallaw,thelattermust
prevail.JurisdictionconferredbyaspeciallawtoRegionalTrial
CourtsmustprevailoverthatgrantedbyagenerallawtoMunicipal
TrialCourts.
Inthecaseatbar,R.A.No.8293andR.A.No.166arespeciallaws
conferringjurisdictionoverviolationsofintellectualpropertyrights
to the Regional Trial Court. They should therefore prevail over
R.A.No.7691,whichisagenerallaw.Hence,jurisdictionoverthe
instantcriminalcaseforunfaircompetitionisproperlylodgedwith
the Regional Trial Court even if the penalty therefor is
imprisonmentoflessthan6years,orfrom2to5yearsandafine
rangingfromP50,000.00toP200,000.00.
Infact,toimplementandensurethespeedydispositionofcases
involvingviolationsofintellectualpropertyrightsunderR.A.No.
8293,theCourtissuedA.M.No.02111SCdatedFebruary19,
2002 designating certain Regional Trial Courts as Intellectual
Property Courts. On June 17, 2003, the Court further issued a
ResolutionconsolidatingjurisdictiontohearanddecideIntellectual
PropertyCodeandSecuritiesandExchangeCommissioncasesin
specificRegionalTrialCourtsdesignatedasSpecialCommercial
Courts.
The case ofMirpuri v. Court of Appeals, invoked by petitioner
findsnoapplicationinthepresentcase.NowhereinMirpurididwe
statethatSection27ofR.A.No.166wasrepealedbyR.A. No.
8293. Neither did we make a categorical ruling therein that
jurisdictionovercasesforviolationofintellectualpropertyrightsis
lodged with the Municipal Trial Courts. The passing remark
inMirpuriontherepealofR.A.No.166byR.A.No.8293was
merelyabackgroundertotheenactmentofthepresentIntellectual
Property Code and cannot thus be construed as a jurisdictional
pronouncementincasesforviolationofintellectualpropertyrights.
Theforegoingrulingisthelawofthecaseandthuslaysto
resttheissueposedbypetitioner.Weseenoreasoninthiscaseto
deviatetherefrom.Itisabasiclegalprinciplethatwhateverisonce
irrevocably established as the controlling legal rule or decision
betweenthesamepartiesinthecasecontinuestobethelawofthe
case,whethercorrectongeneralprinciplesornot,solongasthe
facts on which such decision was predicated continue to be the
factsofthecasebeforethecourt.[13]
IN VIEW WHEREOF, the petition is DISMISSED. The
temporaryrestrainingorderissuedbythisCourtonFebruary18,
2004isherebyLIFTED.
SOORDERED.
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
AustriaMartinez, Callejo, Sr., Tinga,andChicoNazario,
JJ.,concur.
b. CriminalactionforPatentInfringementSec.84
Sec. 84.Criminal Action for Repetition of Infringement. If
infringement is repeated by the infringer or by anyone in
connivance with him after finality of the judgment of the court
againsttheinfringer,theoffendersshall,withoutprejudicetothe
institution of a civil action for damages, be criminally liable
therefor and, upon conviction, shall suffer imprisonment for the
periodofnotlessthansix(6)monthsbutnotmorethanthree(3)
yearsand/orafineofnotlessthanOnehundredthousandpesos
(P100,000) but not more than Three hundred thousand pesos
(P300,000), at the discretion of the court. The criminal action
hereinprovidedshallprescribedinthree(3)yearsfromdateofthe
commissionofthecrime.
Thelawisclearthereforethatcriminalliabilityonlyinureswhen
theinfringementisrepeated.
c. TestsinPatentInfringement
iii. LiteralinfringementSec.75.1
Sec.75.ExtentofProtectionandInterpretationofClaims.
75.1. The extent of protection conferred by the patent shall be
determinedbytheclaims,whicharetobeinterpretedinthelightof
thedescriptionanddrawings.
iv. DoctrineofEquivalentsSec.75.2
75.2. For the purpose of determining the extent of protection
conferred bythe patent, dueaccount shallbe takenof elements
whichareequivalenttotheelementsexpressedintheclaims,so
thataclaimshallbeconsideredtocovernotonlyalltheelements
asexpressedtherein,butalsoequivalents.
d. DefensesinActionforInfringementSec.81
Sec. 81.Defenses in Action for Infringement. In an action for
infringement,thedefendant,inadditiontootherdefensesavailable
tohim,mayshowtheinvalidityofthepatent,oranyclaimthereof,
onanyofthegroundsonwhichapetitionofcancellationcanbe
broughtunderSection61hereof.
e. ContributoryPatentInfringementSec.75.1
Sec.75.ExtentofProtectionandInterpretationofClaims.
75.1. The extent of protection conferred by the patent shall be
determinedbytheclaims,whicharetobeinterpretedinthelightof
thedescriptionanddrawings.
9. Assignment andTransmission ofRights Sec. 103
107
ThereasonwhypatentisanIntellectualPropertyRightisbecause
patent is a property. Even patent application is deemed to be a
property.
11

Sec.103.TransmissionofRights.
103.1Patentsorapplicationsforpatentsandinventiontowhich
theyrelate,shallbeprotectedinthesamewayastherightsofother
propertyundertheCivilCode.
103.2.Inventionsandanyright,titleorinterestinandtopatents
andinventionscoveredthereby,maybeassignedortransmittedby
inheritance or bequest or may be the subject of a license
contract.(Sec.50,R.A.No.165a)
Sec.104.AssignmentofInventions.Anassignmentmaybeofthe
entireright,titleorinterestinandtothepatentandtheinvention
coveredthereby,orofanundividedshareoftheentirepatentand
invention,inwhicheventthepartiesbecomejointownersthereof.
Anassignmentmaybelimitedtoaspecifiedterritory.(Sec.51,R.
A.No.165)
Sec. 105.Form of Assignment. The assignment must be in
writing, acknowledged before a notary public or other officer
authorizedtoadministeroathorperformnotarialacts,andcertified
under the hand and official seal of the notary or such other
officer.(Sec.52,R.A.No.165)
Sec.106.Recording.
106.1. The Office shall record assignments, licenses and other
instrumentsrelatingtothetransmissionofanyright,titleorinterest
in and to inventions, and patents or application for patents or
inventionstowhichtheyrelate,whicharepresentedindueformto
the Office for registration, in books and records kept for the
purpose.Theoriginaldocumentstogetherwithasignedduplicate
thereof shall be filed, and the contents thereof should be kept
confidential.Iftheoriginalisnotavailable,anauthenticatedcopy
thereofinduplicatemaybefiled.Uponrecording,theOfficeshall
retaintheduplicate,returntheoriginalortheauthenticatedcopyto
thepartywhofiledthesameandnoticeoftherecordingshallbe
publishedintheIPOGazette.
106.2.Suchinstrumentsshallbevoidasagainstanysubsequent
purchaser or mortgagee for valuable consideration and without
notice, unless, it is so recorded in the Office, within three (3)
monthsfromthedateofsaidinstrument,orpriortothesubsequent
purchaseormortgage.(Sec.53,R.A.No.165a)
Sec. 107.Rights of Joint Owners. If two (2) or more persons
jointlyownapatentandtheinventioncoveredthereby,eitherby
theissuanceofthepatentintheirjointfavororbyreasonofthe
assignmentofanundividedshareinthepatentandinventionorby
reasonofthesuccessionintitletosuchshare,eachofthejoint
ownersshallbeentitledtopersonallymake,use,sell,orimportthe
inventionforhisownprofit:Provided,however,Thatneitherofthe
jointownersshallbeentitledtograntlicensesortoassignhisright,
title or interest or part thereof without the consent of the other
ownerorowners,orwithoutproportionallydividingtheproceeds
withsuchotherownerorowners.
III. TRADEMARKS
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
1. DefinitionsofMarks,CollectiveMarks,TradeNames,
SolganSec.121
SECTION121.Definitions.AsusedinPartIII,thefollowing
termshavethefollowingmeanings:
121.1."Mark"meansanyvisiblesigncapableofdistinguishingthe
goods(trademark)orservices(servicemark)ofanenterpriseand
shallincludeastampedormarkedcontainerofgoods;(Sec.38,
R.A.No.166a)
121.2."Collectivemark"meansanyvisiblesigndesignatedassuch
intheapplicationforregistrationandcapableofdistinguishingthe
originoranyothercommoncharacteristic,includingthequalityof
goodsorservicesofdifferententerpriseswhichusethesignunder
thecontroloftheregisteredownerofthecollectivemark;(Sec.40,
R.A.No.166a)
121.3."Tradename"meansthenameordesignationidentifyingor
distinguishinganenterprise;(Sec.38,R.A.No.166a)
121.4."Bureau"meanstheBureauofTrademarks;
121.5."Director"meanstheDirectorofTrademarks;
121.6."Regulations"meanstheRulesofPracticeinTrademarks
andServiceMarksformulatedbytheDirectorofTrademarksand
approvedbytheDirectorGeneral;and
121.7."Examiner"meansthetrademarkexaminer.(Sec.38,R.A.
No.166a)
Trademark adistinctivemarkofauthenticitythroughwhichthe
merchandise of a particular producer or manufacturer may be
distinguished form that of others, and its sole function is to
designate distinctively the origin of the products to which it is
attached
- anyword,name,symbolordeviceadoptedandusedbya
manufacturer or merchant to identify his goods and
distinguish them from those manufactured or sold by
others
- audiblesigns(orotherfunctionsasidefromthevisual)
arenotconsideredastrademark
- Functions:
o Toindicatetheoriginofthegoodstowhichtheyare
attached;
o Toguaranteethestandardofqualityofthegoods;
and
o Toadvertisethegoods.
- Duration: 10 years subject to indefinite renewal for
periodsof10yearseach
Mark any visible sign capable of distinguishing the goods
(trademark)orservices(servicemark)ofanenterpriseandshall
includeastampedormarkedcontainerofgoods
Collective Mark any visible sign designated as such in the
applicationforregistrationandcapableofdistinguishingtheorigin
oranyothercommoncharacteristic,includingthequalityofgoods
orservicesofdifferententerpriseswhichusethesignunderthe
controloftheregisteredownerofthecollectivemark
12
 - anapplicationforregistrationofacollectivemarkshall
designate the mark as a collective mark and shall be
accompanied by a copy of the agreement, if any,
governingtheuseofthecollectivemark
Slogan shortwordsorphrasesthatcaptureacompanysbrand,
essence,personality,andpositioning,anddistinguishingthefirm
fromcompetitors
2. AcquisitionofOwnershipofMark
a. Sec.122
SECTION122.HowMarksareAcquired.Therightsinamark
shallbeacquiredthroughregistrationmadevalidlyinaccordance
withtheprovisionsofthislaw.(Sec.2A,R.A.No.166a)
- Let it be remembered that duly registered trademarks are
protected by law as intellectual properties and cannot be
appropriated by others without violating the due process
clause.Aninfringementofintellectualrightsisnolessvicious
and condemnable as theft of material property, whether
personalorreal.
b. BirkenstockGmbHvs.Phil.ShoeMarketing(G.R.
No.194307,Nov.29,2013)
AssailedinthisPetitionforReviewonCertiorari1aretheCourtof
Appeals(CA)Decision2datedJune25,2010andResolution3dated
October27,2010inCAG.R.SPNo.112278whichreversedand
setasidetheIntellectualPropertyOffice(IPO)DirectorGenerals
Decision4datedDecember22,2009thatallowedtheregistrationof
varioustrademarksinfavorofpetitionerBirkenstockOrthopaedie
GmbH&Co.KG.
TheFacts
Petitioner,acorporationdulyorganizedandexistingunderthelaws
ofGermany,appliedforvarioustrademarkregistrationsbeforethe
IPO,namely:(a)"BIRKENSTOCK"underTrademarkApplication
SerialNo.(TASN)41994091508forgoodsfallingunderClass25
of the International Classification of Goods and Services (Nice
Classification) with filing date of March 11, 1994; (b)
"BIRKENSTOCK BAD HONNEF RHEIN & DEVICE
COMPRISING OF ROUND COMPANY SEAL AND
REPRESENTATIONOFAFOOT,CROSSANDSUNBEAM"
underTASN41994091509forgoodsfallingunderClass25of
theNiceClassificationwithfilingdateofMarch11,1994;and(c)
"BIRKENSTOCK BAD HONNEFRHEIN & DEVICE
COMPRISING OF ROUND COMPANY SEAL AND
REPRESENTATION OF A FOOT, CROSS AND SUNBEAM"
underTASN41994095043forgoodsfallingunderClass10of
the Nice Classification with filing date of September 5, 1994
(subjectapplications).5
However,registrationproceedingsofthesubjectapplicationswere
suspended in view of an existing registration of the mark
"BIRKENSTOCKANDDEVICE"underRegistrationNo.56334
datedOctober21,1993(RegistrationNo.56334)inthenameof
Shoe Town International and Industrial Corporation, the
predecessorininterest of respondent Philippine Shoe Expo
MarketingCorporation.6Inthisregard,onMay27,1997petitioner
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
filedapetitionforcancellationofRegistrationNo.56334onthe
groundthatitisthelawfulandrightfulowneroftheBirkenstock
marks (Cancellation Case).7During its pendency, however,
respondent and/or its predecessorininterest failed to file the
required10thYearDeclarationofActualUse(10thYearDAU)for
Registration No. 56334 on or before October 21, 2004,8thereby
resulting in the cancellation of such mark. 9Accordingly, the
cancellationcasewasdismissedforbeingmootandacademic.10
The aforesaid cancellation of Registration No. 56334 paved the
wayforthepublicationofthesubjectapplicationsintheIPOe
GazetteonFebruary2,2007.11Inresponse,respondentfiledthree
(3) separate verified notices of oppositions to the subject
applicationsdocketedasInterPartesCaseNos.14200700108,14
200700115,and14200700116,12claiming,interalia,that:(a)it,
together with its predecessorininterest, has been using
Birkenstock marks in the Philippines for more than 16 years
throughthemark"BIRKENSTOCKANDDEVICE";(b)themarks
coveredbythesubjectapplicationsareidenticaltotheonecovered
byRegistrationNo.56334andthus,petitionerhasnorighttothe
registrationofsuchmarks;(c)onNovember15,1991,respondents
predecessorininterestlikewiseobtainedaCertificateofCopyright
Registration No. 011193 for the word "BIRKENSTOCK" ; (d)
whilerespondentanditspredecessorininterestfailedtofilethe
10thYearDAU,itcontinuedtheuseof"BIRKENSTOCKAND
DEVICE" in lawful commerce; and (e) to record its continued
ownershipandexclusiverighttousethe"BIRKENSTOCK"marks,
ithasfiledTASN42006010273asa"reapplication"ofitsold
registration,RegistrationNo.56334.13OnNovember13,2007,the
BureauofLegalAffairs(BLA)oftheIPOissuedOrderNo.2007
2051consolidatingtheaforesaidinterpartescases(Consolidated
OppositionCases).14
TheRulingoftheBLA
InitsDecision15datedMay28,2008,theBLAoftheIPOsustained
respondentsopposition,thus,orderingtherejectionofthesubject
applications.Itruledthatthecompetingmarksofthepartiesare
confusingly similar since they contained the word
"BIRKENSTOCK"andareusedonthesameandrelatedgoods.It
foundrespondentanditspredecessorininterestastheprioruser
andadopterof"BIRKENSTOCK"inthePhilippines,whileonthe
otherhand,petitionerfailedtopresentevidenceofactualuseinthe
tradeandbusinessinthiscountry.ItopinedthatwhileRegistration
No.56334wascancelled,itdoesnotfollowthatpriorrightoverthe
mark was lost, as proof of continuous and uninterrupted use in
trade and business in the Philippines was presented. The BLA
likewiseopinedthatpetitionersmarksarenotwellknowninthe
Philippinesandinternationallyandthatthevariouscertificatesof
registration submitted by petitioners were all photocopies and,
therefore,notadmissibleasevidence.16
Aggrieved,petitionerappealedtotheIPODirectorGeneral.
TheRulingoftheIPODirectorGeneral
In his Decision17dated December 22, 2009, the IPO Director
GeneralreversedandsetasidetherulingoftheBLA,thusallowing
theregistrationofthesubjectapplications.Heheldthatwiththe
cancellationofRegistrationNo.56334forrespondentsfailureto
file the 10th Year DAU, there is no more reason to reject the
subjectapplicationsonthegroundofpriorregistrationbyanother
13
proprietor.18More importantly, he found that the evidence
presentedprovedthatpetitioneristhetrueandlawfulownerand
prior user of "BIRKENSTOCK" marks and thus, entitled to the
registrationofthemarkscoveredbythesubjectapplications. 19The
IPODirectorGeneralfurtherheldthatrespondentscopyrightfor
theword"BIRKENSTOCK"isofnomomentsincecopyrightand
trademarkaredifferentformsofintellectualpropertythatcannotbe
interchanged.20
Finding the IPO Director Generals reversal of the BLA
unacceptable,respondentfiledapetitionforreviewwiththeCA.
RulingoftheCA
InitsDecision21datedJune25,2010,theCAreversedandsetaside
therulingoftheIPODirectorGeneralandreinstatedthatofthe
BLA.Itdisallowedtheregistrationofthesubjectapplicationson
the ground that the marks covered by such applications "are
confusingly similar, if not outright identical" with respondents
mark.22Itequallyheldthatrespondentsfailuretofilethe10thYear
DAUforRegistrationNo.56334"didnotdeprivepetitionerofits
ownershipoftheBIRKENSTOCKmarksinceithassubmitted
substantial evidence showing its continued use, promotion and
advertisement thereof up to the present."23It opined that when
respondentspredecessorininterestadoptedandstarteditsactual
useof"BIRKENSTOCK,"thereisneitheranexistingregistration
norapendingapplicationforthesameandthus,itcannotbesaid
thatitactedinbadfaithinadoptingandstartingtheuseofsuch
mark.24Finally, the CA agreed with respondent that petitioners
documentaryevidence,beingmerephotocopies,weresubmittedin
violationofSection8.1ofOfficeOrderNo.79,Seriesof2005
(RulesonInterPartesProceedings).
Dissatisfied,petitionerfiledaMotionforReconsideration25dated
July20,2010,whichwas,however,deniedinaResolution 26dated
October27,2010.Hence,thispetition.27
IssuesBeforetheCourt
TheprimordialissueraisedfortheCourtsresolutioniswhetheror
notthesubjectmarksshouldbeallowedregistrationinthenameof
petitioner.
TheCourtsRuling
Thepetitionismeritorious.
A.AdmissibilityofPetitionersDocumentaryEvidence.
InitsComment28datedApril29,2011,respondentassertsthatthe
documentaryevidencesubmittedbypetitionerintheConsolidated
Opposition Cases, which are mere photocopies, are violative of
Section 8.1 of the Rules on Inter Partes Proceedings, which
requirescertifiedtruecopiesofdocumentsandevidencepresented
bypartiesinlieuoforiginals. 29Assuch,theyshouldbedeemed
inadmissible.
TheCourtisnotconvinced.
Itiswellsettledthat"therulesofprocedurearemeretoolsaimedat Theaforementionedprovisionclearlyrevealsthatfailuretofilethe
facilitatingtheattainmentofjustice,ratherthanitsfrustration.A
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
strictandrigidapplicationoftherulesmustalwaysbeeschewed
whenitwouldsubverttheprimaryobjectiveoftherules,thatis,to
enhancefairtrialsandexpeditejustice.Technicalitiesshouldnever
beusedtodefeatthesubstantiverightsoftheotherparty.Every
partylitigant must be afforded the amplest opportunity for the
properandjustdeterminationofhiscause,freefromtheconstraints
of technicalities."30"Indeed, the primordial policy is a faithful
observanceof[proceduralrules],andtheirrelaxationorsuspension
should only be for persuasive reasons and only in meritorious
cases,torelievealitigantofaninjusticenotcommensuratewiththe
degreeofhisthoughtlessnessinnotcomplyingwiththeprocedure
prescribed."31This is especially true with quasijudicial and
administrativebodies, suchastheIPO,whicharenotboundby
technicalrulesofprocedure.32Onthisscore,Section5oftheRules
onInterPartesProceedingsprovides:
Sec.5.RulesofProceduretobefollowedintheconductofhearing
ofInterPartescases. The rules of procedure herein contained
primarilyapplyintheconductofhearingofInterPartescases.The
RulesofCourtmaybeappliedsuppletorily.TheBureaushallnot
beboundbystricttechnicalrulesofprocedureandevidencebut
mayadopt,intheabsenceofanyapplicableruleherein,suchmode
ofproceedingswhichisconsistentwiththerequirementsoffair
playandconducivetothejust,speedyandinexpensivedisposition
ofcases,andwhichwillgivetheBureauthegreatestpossibilityto
focus on the contentious issues before it. (Emphasis and
underscoringsupplied)
Inthecaseatbar,whilepetitionersubmittedmerephotocopiesas
documentary evidence in the Consolidated Opposition Cases, it
shouldbenotedthattheIPOhadalreadyobtainedtheoriginalsof
suchdocumentaryevidenceintherelatedCancellationCaseearlier
filedbeforeit.Underthiscircumstanceandthemeritsoftheinstant
caseaswillbesubsequentlydiscussed,theCourtholdsthattheIPO
DirectorGeneralsrelaxationofprocedurewasavalidexerciseof
hisdiscretionintheinterestofsubstantialjustice.33
Having settled the foregoing procedural matter, the Court now
proceedstoresolvethesubstantiveissues.
B.Registrationandownershipof"BIRKENSTOCK."
RepublicActNo.(RA)166,34thegoverninglawforRegistration
No.56334,requiresthefilingofaDAUonspecifiedperiods, 35to
wit:
Section12.Duration.Eachcertificateofregistrationshallremain
inforcefortwentyyears:Provided, Thatregistrationsunderthe
provisionsofthisActshallbecancelledbytheDirector, unless
withinoneyearfollowingthefifth,tenthandfifteenthanniversaries
ofthedateofissueofthecertificateofregistration,theregistrant
shallfileinthePatentOfficeanaffidavitshowingthatthemarkor
tradename is still in use or showing that its nonuse is due to
specialcircumstancewhichexcusesuchnonuseandisnotdueto
anyintentiontoabandonthesame,andpaytherequiredfee.
The Director shall notify the registrant who files the above
prescribedaffidavitsofhisacceptanceorrefusalthereofand,ifa
refusal,thereasonstherefor.(Emphasisandunderscoringsupplied)
DAU within the requisite period results in the automatic
14
cancellationofregistrationofatrademark.Inturn,suchfailureis
tantamount to the abandonment or withdrawal of any right or
interesttheregistranthasoverhistrademark.36
Inthiscase,respondentadmittedthatitfailedtofilethe10thYear
DAUforRegistrationNo.56334withintherequisiteperiod,oron
orbeforeOctober21,2004.Asaconsequence,itwasdeemedto
haveabandonedorwithdrawnanyrightorinterestoverthemark
"BIRKENSTOCK."NeithercanitinvokeSection23637oftheIP
Codewhichpertainstointellectualpropertyrightsobtainedunder
previousintellectualpropertylaws,e.g.,RA166,preciselybecause
italreadylostanyrightorinterestoverthesaidmark.
Besides, petitioner has duly established its true and lawful
ownershipofthemark"BIRKENSTOCK."
UnderSection238ofRA166,whichisalsothelawgoverningthe
subjectapplications,inordertoregisteratrademark,onemustbe
the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the
applicationforregistration.Section2A39ofthesamelawsetsout
todefinehowonegoesaboutacquiringownershipthereof.Under
thesamesection,itisclearthatactualuseincommerceisalsothe
testofownershipbuttheprovisionwentfurtherbysayingthatthe
markmustnothavebeensoappropriatedbyanother.Significantly,
tobeanowner,Section2Adoesnotrequirethattheactualuseofa
trademarkmustbewithinthePhilippines.Thus,underRA166,one
maybeanownerofamarkduetoitsactualusebutmaynotyet
havetherighttoregistersuchownershiphereduetotheowners
failuretousethesameinthePhilippinesfortwo(2)monthsprior
toregistration.40
Itmustbeemphasizedthatregistrationofatrademark,byitself,is
notamodeofacquiringownership.1wphi1Iftheapplicantisnot
the owner of the trademark, he has no right to apply for its
registration.Registrationmerelycreatesaprimafaciepresumption
ofthevalidityoftheregistration,oftheregistrantsownershipof
thetrademark,andoftheexclusiverighttotheusethereof.Such
presumption, just like the presumptive regularity in the
performanceofofficialfunctions,isrebuttableandmustgiveway
toevidencetothecontrary.41
Clearly,itisnottheapplicationorregistrationofatrademarkthat
vestsownershipthereof,butitistheownershipofatrademarkthat
conferstherighttoregisterthesame.Atrademarkisanindustrial
propertyoverwhichitsownerisentitledtopropertyrightswhich
cannotbeappropriatedbyunscrupulousentitiesthat,inonewayor
another,happentoregistersuchtrademarkaheadofitstrueand
lawful owner. The presumption of ownership accorded to a
registrantmustthennecessarilyyieldtosuperiorevidenceofactual
andrealownershipofatrademark.
The Courts pronouncement in Berris Agricultural Co., Inc. v.
Abyadang42isinstructiveonthispoint:
theretospecifiedinthecertificate.xxxInotherwords,theprima
faciepresumptionbroughtaboutbytheregistrationofamarkmay
be challenged and overcome in an appropriate action, x x x by
evidenceofpriorusebyanotherperson,i.e.,itwillcontroverta
claimoflegalappropriationorofownershipbasedonregistration
byasubsequentuser.Thisisbecauseatrademarkisacreationof
use and belongs to one who first used it in trade or
commerce.43(Emphasisandunderscoringsupplied)
Intheinstantcase,petitionerwasabletoestablishthatitisthe
owner of the mark "BIRKENSTOCK." It submitted evidence
relatingtotheoriginandhistoryof"BIRKENSTOCK"anditsuse
incommercelongbeforerespondentwasabletoregisterthesame
here in the Philippines. It has sufficiently proven that
"BIRKENSTOCK" was first adopted in Europe in 1774 by its
inventor,JohannBirkenstock,ashoemaker,onhislineofquality
footwear and thereafter, numerous generations of his kin
continuously engaged in the manufacture and sale of shoes and
sandalsbearingthemark"BIRKENSTOCK"untilitbecamethe
entity now known as the petitioner. Petitioner also submitted
variouscertificatesofregistrationofthemark"BIRKENSTOCK"
in various countries and that it has used such mark in different
countriesworldwide,includingthePhilippines.44
Ontheotherhand,asidefromRegistrationNo.56334whichhad
beencancelled,respondentonlypresentedcopiesofsalesinvoices
andadvertisements,whicharenotconclusiveevidenceofitsclaim
ofownershipofthemark"BIRKENSTOCK"asthesemerelyshow
thetransactionsmadebyrespondentinvolvingthesame.45
In view of the foregoing circumstances, the Court finds the
petitioner to be the true and lawful owner of the mark
"BIRKENSTOCK" and entitled to its registration, and that
respondentwasinbadfaithinhavingitregisteredinitsname.In
thisregard,theCourtquoteswithapprovalthewordsoftheIPO
DirectorGeneral,viz.:
Thefactsandevidencefailtoshowthat[respondent]wasingood
faith in using and in registering the mark BIRKENSTOCK.
BIRKENSTOCK,obviouslyofGermanorigin,isahighlydistinct
andarbitrarymark.Itisveryremotethattwopersonsdidcointhe
sameoridenticalmarks.Tocomeupwithahighlydistinctand
uncommonmarkpreviouslyappropriatedbyanother,foruseinthe
samelineofbusiness, and without any plausible explanation, is
incredible.Thefieldfromwhichapersonmayselectatrademarkis
practicallyunlimited.Asinallothercasesofcolorableimitations,
the unanswered riddle is why, of the millions of terms and
combinationsoflettersanddesignsavailable,[respondent]hadto
come up with a mark identical or so closely similar to the
[petitioners] if there was no intent to take advantage of the
goodwillgeneratedbythe[petitioners]mark.Beingonthesame
lineofbusiness,itishighlyprobablethatthe[respondent]knewof
theexistenceofBIRKENSTOCKanditsusebythe[petitioner],
before [respondent] appropriated the same mark and had it
registeredinitsname.46

Theownershipofatrademarkisacquiredbyitsregistrationandits WHEREFORE, the petition is GRANTED. The Decision dated

actualusebythemanufacturerordistributorofthegoodsmade
availabletothepurchasingpublic.xxxAcertificateofregistration
of a mark, once issued, constitutes prima facie evidence of the
validity of the registration, of the registrants ownership of the
mark, and of the registrants exclusive right to use the same in
connectionwiththegoodsorservicesandthosethatarerelated
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
June25,2010andResolutiondatedOctober27,2010oftheCourt
ofAppealsinCAG.R.SPNo.112278areREVERSEDandSET
ASIDE.Accordingly,theDecisiondatedDecember22,2009ofthe
IPODirectorGeneralisherebyREINSTATED.
15
 SOORDERED.
3. AcquisitionofOwnershipofTradeNameSec.165
SECTION165.TradeNamesorBusinessNames.
165.1.Anameordesignationmaynotbeusedasatradenameifby
itsnatureortheusetowhichsuchnameordesignationmaybeput,
itiscontrarytopublicorderormoralsandif,inparticular,itis
liabletodeceivetradecirclesorthepublicastothenatureofthe
enterpriseidentifiedbythatname.
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
unlawfulactcommittedbythirdparties.
b. Inparticular,anysubsequentuseofthetradenamebyathird
party,whetherasatradenameoramarkorcollectivemark,or
anysuchuseofasimilartradenameormark,likelytomislead
thepublic,shallbedeemedunlawful.
165.3. The remedies provided for in Sections 153 to 156 and
Sections166and167shallapplymutatismutandis.
165.4.Anychangeintheownershipofatradenameshallbemade
withthetransferoftheenterpriseorpartthereofidentifiedbythat
name. The provisionsof Subsections149.2to 149.4 shallapply
mutatismutandis.
4. NonRegistrableMarks
Marks may be registered as long as it does not fall under any
categorymentionedinSection123.
Section123enumeratesmarksthatcannotberegistered.Manyof
thecasesandtheconfusionarebasedonsomeoftheitemsin
theenumeration.
a. Sec.123
SECTION123.Registrability.
123.1.Amarkcannotberegisteredifit:
a. Consistsofimmoral,deceptiveorscandalousmatter,ormatter
which may disparage or falsely suggest a connection with
persons, living or dead, institutions, beliefs, or national
symbols,orbringthemintocontemptordisrepute;
b. Consistsoftheflagorcoatofarmsorotherinsigniaofthe
Philippines or any of its political subdivisions, or of any
foreignnation,oranysimulationthereof;
c. Consists of a name, portrait or signature identifying a
particularlivingindividualexceptbyhiswrittenconsent,or
thename,signature,orportraitofadeceasedPresidentofthe
Philippines,duringthelifeofhiswidow, ifany,exceptby
writtenconsentofthewidow;
d. Is identical with a registered mark belonging to a different
proprietororamarkwithanearlierfilingorprioritydate,in
respectof:
i. Thesamegoodsorservices,or
ii. Closelyrelatedgoodsorservices,or
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
iii. Ifitnearlyresemblessuchamarkastobelikelytodeceiveor
causeconfusion;
e. Is identicalwith, or confusinglysimilar to, orconstitutes a
translationofamarkwhichisconsideredbythecompetent
authorityofthePhilippinestobewellknowninternationally
andinthePhilippines,whetherornotitisregisteredhere,as
beingalreadythemarkofapersonotherthantheapplicantfor
registration, and used for identical or similar goods or
services: Provided, That in determining whether a mark is
wellknown,accountshallbetakenoftheknowledgeofthe
relevantsectorofthepublic,ratherthanofthepublicatlarge,
including knowledge in the Philippines which has been
obtainedasaresultofthepromotionofthemark;
f. Is identicalwith, or confusinglysimilar to, orconstitutes a
translation of a mark considered wellknown in accordance
with the preceding paragraph, which is registered in the
Philippineswithrespecttogoodsorserviceswhicharenot
similartothosewithrespecttowhichregistrationisapplied
for:Provided,Thatuseofthemarkinrelationtothosegoods
orserviceswouldindicateaconnectionbetweenthosegoods
orservices,andtheowneroftheregisteredmark:Provided
further,Thattheinterestsoftheowneroftheregisteredmark
arelikelytobedamagedbysuchuse;
g. Islikelytomisleadthepublic,particularlyastothenature,
quality,characteristicsorgeographicaloriginofthegoodsor
services;
h. Consistsexclusivelyofsignsthataregenericforthegoodsor
servicesthattheyseektoidentify;
i. Consists exclusively of signs or of indications that have
becomecustomaryorusualtodesignatethegoodsorservices
in everyday language or in bona fide and established trade
practice;
j. Consistsexclusivelyofsignsorofindicationsthatmayserve
in trade to designate the kind, quality, quantity, intended
purpose,value,geographicalorigin,timeorproductionofthe
goodsorrenderingoftheservices,orothercharacteristicsof
thegoodsorservices;
k. Consists of shapes that may be necessitated by technical
factorsorbythenatureofthegoodsthemselvesorfactorsthat
affecttheirintrinsicvalue;
l. Consistsofcoloralone,unlessdefinedbyagivenform;or
m. Iscontrarytopublicorderormorality.
123.2.Asregardssignsordevicesmentionedinparagraphs(j),(k),
and(l),nothingshallpreventtheregistrationofanysuchsignor
devicewhichhasbecomedistinctiveinrelationtothegoodsfor
whichregistrationisrequestedasaresultoftheusethathavebeen
madeofitincommerceinthePhilippines.TheOfficemayaccept
asprimafacieevidencethatthemarkhasbecomedistinctive,as
used in connection with the applicant's goods or services in
commerce, proof of substantially exclusive and continuous use
thereofbytheapplicantincommerceinthePhilippinesforfive(5)
yearsbeforethedateonwhichtheclaimofdistinctivenessismade.
123.3.Thenatureofthegoodstowhichthemarkisappliedwillnot
constituteanobstacletoregistration.(Sec.4,R.A.No.166a)
b. SecondaryMeaning,Sec.123.2
123.2.Asregardssignsordevicesmentionedinparagraphs(j),(k),
and(l),nothingshallpreventtheregistrationofanysuchsignor
devicewhichhasbecomedistinctiveinrelationtothegoodsfor
16
whichregistrationisrequestedasaresultoftheusethathavebeen
madeofitincommerceinthePhilippines.TheOfficemayaccept
asprimafacieevidencethatthemarkhasbecomedistinctive,as
used in connection with the applicant's goods or services in
commerce, proof of substantially exclusive and continuous use
thereofbytheapplicantincommerceinthePhilippinesforfive(5)
yearsbeforethedateonwhichtheclaimofdistinctivenessismade.
Thedoctrineofsecondarymeaningcannotbeappliedwherethe
evidencedidnotprovethatthebusinesshascontinuedforsolonga
timethatithasbecomeofconsequenceandacquiredagoodwillof
considerablevaluesuchthatitsarticlesandproducehaveacquired
a wellknown reputation, and confusion will result by the use.
(LyceumofthePhilippinesvs.CA)
c. Fanciful, Arbitrary, Suggestive, Composite and
CoinedMarks
Thelawdisallowsfalsesuggestionofconnectiontoaperson,an
institution,orabelief.Actualclaimofconnectionisunnecessary.
Also,thepopularitydoesmatterfortheinfringersforthisisthe
rationaleofsuchprohibition,i.e.,thatnoonemayunjustlyrideon
thegoodwillofanother.
FancifulMarkItisinventedforthesolepurposeoffunctioningas
atrademarkandhavenoothermeaningthanactingasamark.
Arbitrary Mark It is utilized as a device having a common
meaningthathasnorelationtothegoodsorservicesbeingsold.
Composite Marks They are marks consisting of two or more
elements orcombination ofwords, phrases, designs, symbols or
colorschemes.Althoughtheycannotberegisteredbythemselves,
togethertheymaybeapartofacompositemarkaslongasthey
provideadisclaimer.Thepersonwhoregistersthemaspartofa
markwillnotacquireownershipthereto.
5. PriorUseofMarkasaRequirementSec.122,152
SECTION122.HowMarksareAcquired.Therightsinamark
shallbeacquiredthroughregistrationmadevalidlyinaccordance
withtheprovisionsofthislaw.(Sec.2A,R.A.No.166a)
SECTION152.NonuseofaMarkWhenExcused.
152.1. Nonuse of a mark may be excused if caused by
circumstancesarisingindependentlyofthewillofthetrademark
owner.Lackoffundsshallnotexcusenonuseofamark.
152.2.Theuseofthemarkinaformdifferentfromtheformin
whichitisregistered,whichdoesnotalteritsdistinctivecharacter,
shallnotbegroundforcancellationorremovalofthemarkand
shallnotdiminishtheprotectiongrantedtothemark.
152.3.Theuseofamarkinconnectionwithoneormoreofthe
goodsorservicesbelongingtotheclassinrespectofwhichthe
mark is registered shall prevent its cancellation or removal in
respectofallothergoodsorservicesofthesameclass.
152.4.Theuseofamarkbyacompanyrelatedwiththeregistrant
orapplicantshallinuretothelatter'sbenefit,andsuchuseshallnot
affectthevalidityofsuchmarkorofitsregistration:Provided,That
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
suchmarkisnotusedinsuchmannerastodeceivethepublic.If
use of a mark by a person is controlled by the registrant or
applicantwithrespecttothenatureandqualityofthegoodsor
services, such use shall inure to the benefit of the registrant or
applicant.(n)
6. Tests to Determine Confusing Similarity Between
Marks
TheSupremeCourtonseveraloccasionsusedbothtestsintheir
decisions. Thus, the use of one does not preclude the use of
another.
Isthereaneedtoproveactualconfusion?
- Petitionersfailuretopresentproofofactualconfusiondoes
notnegatetheirclaimoftrademarkinfringement.Asnotedin
AmericanWire&CableCo.v.DirectorofPatents,Section22
requires the less stringent standard of likelihood of
confusiononly.Whileproofofactualconfusionisthebest
evidence of infringement, its absence is inconsequential.
(McdonaldsCorporationv.L.C.BigMakBurger,Inc.)
a. DominancyTest
The Dominancy Test focuses on the similarity of the prevalent
featuresofthecompetingtrademarkswhichmightcauseconfusion
ordeception, andthusinfringement. Ifthecompetingtrademark
containsthemain,essentialordominantfeaturesofanother,and
confusionordeceptionislikelytoresult,infringementtakesplace.
Duplicationorimitationisnotnecessary;norisitnecessarythatthe
infringinglabelshouldsuggestanefforttoimitate.Thequestionis
whethertheuseofthemarksinvolvedislikelytocauseconfusion
ormistakeinthemindofthepublicordeceivepurchasers.
Neitherisitrequiredthatthemarksoughttoberegisteredsuggests
anefforttoimitate. Given more consideration are the aural and
visualimpressionscreatedbythemarksonthebuyersofgoods,
givinglittleweighttofactorslikeprices,quality,salesoutlets,and
marketsegments.
i. AsiaBrewery,Inc.vs.CourtofAppeals,etal.
(G.R.No.103543)
FACTS:
OnSeptember15,1988,SanMiguelCorporation(SMC)fileda
complaint against Asia Brewery Inc. (ABI) for infringement of
trademarkandunfaircompetitiononaccountofthelatter'sBEER
PALE PILSEN or BEER NA BEER product which has been
competingwithSMC'sSANMIGUELPALEPILSENforashare
ofthelocalbeermarket.
OnAugust27,1990,adecisionwasrenderedbythetrialCourt,
presided over by Judge Jesus O. Bersamira, dismissing SMC's
complaintbecauseABI"hasnotcommittedtrademarkinfringement
orunfaircompetitionagainst"SMC(p.189,Rollo).
SMCappealedtotheCourtofAppeals(C.A.G.R.CVNo.28104).
On September 30, 1991, the Court of Appeals (Sixth Division
composedofJusticeJoseC.Campos,Jr.,chairmanandponente,
andJusticesVenancioD.AldecoaJr.andFilemonH.Mendoza,as
members)reversedthetrialcourt.
In due time, ABI appealed to this Court by a petition
forcertiorariunderRule45oftheRulesofCourt.
17
ISSUE: WhetherornotABIsBeerPalePilseninfringesSMCs
SanMiguelPalePilsenwithRectangularMaltandHopsDesign.
RULING:No.
1. Thereisabsolutelynosimilarityinthedominantfeaturesof
bothtrademarks.Infringementisdeterminedbythe"testof
dominancy" rather than by differences or variations in the
details of one trademark and of another. The rule was
formulatedinCoTiongSavs.DirectorofPatents,95Phil.1,
4(1954);reiteratedinLimHoavs.DirectorofPatents,100
Phil.214,216217(1956),thus:
Ithasbeenconsistentlyheldthatthequestionofinfringement
ofatrademarkistobedeterminedbythetestofdominancy.
Similarity in size, form and color, while relevant, is not
conclusive.Ifthecompetingtrademarkcontainsthemainor
essentialordominantfeaturesofanother,andconfusionand
deception is likely to result, infringement takes place.
Duplicationorimitationisnotnecessary;noritisnecessary
thattheinfringinglabelshouldsuggestanefforttoimitate.[C.
NeilmanBrewingCo.vs.IndependentBrewingCo.,191F.,
489,495,citingEagleWhiteLeadCo.,vs.Pflugh(CC)180
Fed.579].Thequestionatissueincasesofinfringementof
trademarksiswhethertheuseofthemarksinvolvedwouldbe
likelytocauseconfusionormistakesinthemindofthepublic
or deceive purchasers. (Auburn Rubber Corporation vs.
Honover Rubber Co., 107 F. 2d 588; . . . .) (Emphasis
supplied.)
InForbes,Munn&Co.(Ltd.)vs.AngSanTo,40Phil.272,275,
the test was similarity or "resemblance between the two
(trademarks)suchaswouldbelikelytocausetheonemarktobe
mistaken for the other. . . . [But] this is not such similitude as
amountstoidentity."
InPhil.NutIndustryInc.vs.StandardBrandsInc.,65SCRA575,
thecourtwasmorespecific:thetestis"similarityinthedominant
featuresofthetrademarks."
Whatarethedominantfeaturesofthecompetingtrademarksbefore
us?
There ishardly anydispute thatthe dominantfeature ofSMC's
trademark is the name of the product: SAN MIGUEL PALE
PILSEN,writteninwhiteGothicletterswithelaborateserifsatthe
beginning and end of the letters "S" and "M" on an amber
backgroundacrosstheupperportionoftherectangulardesign.
Ontheotherhand,thedominantfeatureofABI'strademarkisthe
name:BEERPALEPILSEN,withtheword"Beer"writteninlarge
amberletters,largerthananyofthelettersfoundintheSMClabel.
Thetrialcourtperceptivelyobservedthattheword"BEER"does
notappearinSMC'strademark,justasthewords"SANMIGUEL"
donotappearinABI'strademark.Hence,thereisabsolutelyno
similarityinthedominantfeaturesofbothtrademarks.
2. Purchaserswillnotbedeceivedgiventhedissimilaritiesofthe
marks. Neither in sound, spelling or appearance can BEER
PALE PILSEN be said to be confusingly similar to SAN
MIGUEL PALE PILSEN. No one who purchases BEER
PALE PILSEN can possibly be deceived that it is SAN
MIGUEL PALE PILSEN. No evidence whatsoever was
presentedbySMCprovingotherwise.
Besides the dissimilarity in their names, the following other
dissimilaritiesinthetradedressorappearanceofthecompeting
productsabound:
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
(1)TheSANMIGUELPALEPILSENbottlehasaslendertapered
neck.
TheBEERPALEPILSENbottlehasafat,bulgingneck.
(2)Thewords"palepilsen"onSMC'slabelareprintedinboldand
laced letters along adiagonalband, whereas the words "pale
pilsen"onABI'sbottlearehalfthesizeandprintedinslenderblock
lettersonastraighthorizontalband.(SeeExhibit"8a".).
(3) The names of the manufacturers are prominently printed on
theirrespectivebottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel
Brewery, Philippines," whereas BEER PALE PILSEN is
"Especially brewed and bottled by Asia Brewery Incorporated,
Philippines."
(4)OnthebackofABI'sbottleisprintedinbig,boldletters,under
arowofflowerbudsandleaves,itscopyrightedslogan:
"BEERNABEER!"
WhereasSMC'sbottlecarriesnoslogan.
(5)ThebackoftheSANMIGUELPALEPILSENbottlecarries
theSMClogo,whereastheBEERPALEPILSENbottlehasno
logo.
(6)TheSANMIGUELPALEPILSENbottlecapisstampedwitha
coat of arms and the words "San Miguel Brewery Philippines"
encirclingthesame.
TheBEERPALEPILSENbottlecapisstampedwiththename
"BEER" in the center, surrounded by the words "Asia Brewery
IncorporatedPhilippines."
(7)Finally,thereisasubstantialpricedifferencebetweenBEER
PALEPILSEN(currentlyatP4.25perbottle)andSANMIGUEL
PALEPILSEN(currentlyatP7.00perbottle).Onewhopaysonly
P4.25forabottleofbeercannotexpecttoreceiveSanMiguelPale
Pilsenfromthestorekeeperorbartender.
ii. Mcdonalds Corporation vs. L.C. Big Mak
Burgers,Inc.(G.R.No.143993)
FACTS:
PetitionerMcDonald'sCorporation("McDonald's")isacorporation
organizedunderthelawsofDelaware,UnitedStates.McDonald's
operates,byitselforthroughitsfranchisees,aglobalchainoffast
foodrestaurants.
McDonald's4owns a family of marks5including the "Big Mac"
mark for its "doubledecker hamburger sandwich." 6McDonald's
registered this trademark with the United States Trademark
Registryon16October1979.7BasedonthisHomeRegistration,
McDonald's applied fortheregistration ofthe same mark in
thePrincipalRegister of the then Philippine Bureau of Patents,
Trademarks and Technology ("PBPTT"),nowthe Intellectual
Property Office ("IPO").Pendingapproval of its application,
McDonald'sintroducedits"BigMac"hamburgersandwichesinthe
PhilippinemarketinSeptember1981.On18July1985,thePBPTT
allowedregistrationofthe"BigMac"markinthePrincipalRegister
basedonitsHomeRegistrationintheUnitedStates.
Likeitsothermarks,McDonald'sdisplaysthe"BigMac"markin
items8andparaphernalia9initsrestaurants,andinitsoutdoorand
18
indoor signages. From 1982 to 1990, McDonald's spentP10.5
million in advertisement for "Big Mac" hamburger sandwiches
alone.
RespondentL.C.BigMakBurger,Inc.("respondentcorporation")
is a domestic corporation which operates fastfood outlets and
snack vansin MetroManila andnearby provinces. 12Respondent
corporation'smenuincludeshamburgersandwichesandotherfood
items.13Respondents Francis B. Dy, Edna A. Dy, Rene B. Dy,
WilliamB.Dy,JesusAycardo,AraceliAycardo,andGraceHuerto
("private respondents") are the incorporators, stockholders and
directorsofrespondentcorporation.14
On 21 October 1988, respondent corporation applied with the
PBPTT fortheregistration ofthe "Big Mak" mark for its
hamburgersandwiches.
McDonald's opposed respondent corporation's application on the
groundthat"BigMak"wasacolorableimitationofitsregistered
"Big Mac" mark for the same food products. McDonald's also
informedrespondentFrancisDy("respondentDy"),thechairman
oftheBoardofDirectorsofrespondentcorporation,ofitsexclusive
righttothe"BigMac"markandrequestedhimtodesistfromusing
the"BigMac"markoranysimilarmark.
Beforethecourt,respondentsadmittedthattheyhavebeenusing
the name "Big Mak Burger" for their fastfood business.
Respondentsclaimed,however,thatMcDonald'sdoesnothavean
exclusiverighttothe"BigMac"markortoanyothersimilarmark.
Respondents point out that the Isaiyas Group of Corporations
("Isaiyas Group") registered the same mark for hamburger
sandwiches with the PBPTT on 31 March 1979. One Rodolfo
Topacio("Topacio")similarlyregisteredthesamemarkon24June
1983,prior toMcDonald's registration on 18 July
1985.Alternatively,respondentsclaimedthattheyarenotliablefor
trademarkinfringementorforunfaircompetition,asthe"BigMak"
mark they sought to register does not constitute a colorable
imitationofthe"BigMac"mark.Respondentsassertedthatthey
didnotfraudulentlypassofftheirhamburgersandwichesasthose
ofpetitioners'BigMachamburgers.17Respondentssoughtdamages
intheircounterclaim.
ISSUE: Whether or not respondent corporation is liable for
trademarkinfringementandunfaircompetition.
RULING:Yes.
1. BigMacmarkisvalidaswellasMcdonaldsownership
overit.Amarkisvalidifitis"distinctive"andthusnotbarred
from registration under Section 436of RA 166 ("Section
4").However,onceregistered,notonlythemark'svaliditybut
also the registrant's ownership of the mark is prima facie
presumed.37
Respondentscontendthatofthetwowordsinthe"BigMac"mark,
itisonlytheword"Mac"thatisvalidbecausetheword"Big"is
genericanddescriptive(proscribedunderSection4[e]),andthus
"incapableofexclusiveappropriation."38
Thecontentionhasnomerit.The"BigMac"mark,whichshouldbe
treatedinitsentiretyandnotdissectedwordforword, 39isneither
genericnordescriptive.Genericmarksarecommonlyusedasthe
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
nameordescriptionofakindofgoods,40suchas"Lite"forbeer 41or
"ChocolateFudge"forchocolatesodadrink.42Descriptivemarks,
ontheotherhand,conveythecharacteristics,functions,qualitiesor
ingredientsofaproducttoonewhohasneverseenitordoesnot
knowitexists,43suchas"Arthriticare"forarthritismedication. 44On
thecontrary,"BigMac"fallsundertheclassoffancifulorarbitrary
marksasitbearsnologicalrelationtotheactualcharacteristicsof
theproductitrepresents.45Assuch,itishighlydistinctiveandthus
valid.Significantly,thetrademark"LittleDebbie"forsnackcakes
wasfoundarbitraryorfanciful.46
2. RespondentsuseofBigMakcausesconfusion.Petitioners
claim that respondents' use of the "Big Mak" mark on
respondents' hamburgers results in confusion of goods,
particularlywith respect topetitioners' hamburgers labeled
"BigMac."
Respondents assert that their "Big Mak" hamburgers
catermainlytothelowincomegroupwhilepetitioners'"BigMac"
hamburgerscatertothemiddleandupperincomegroups.Evenif
thisistrue,thelikelihoodofconfusionofbusinessremains,since
thelowincomegroupmightbeledtobelievethatthe"BigMak"
hamburgersarethelowendhamburgersmarketedbypetitioners.
Afterall,petitionershavetheexclusiverighttousethe"BigMac"
mark.Ontheotherhand,respondentswouldbenefitbyassociating
theirlowendhamburgers,throughtheuseofthe"BigMak"mark,
with petitioners' highend "Big Mac" hamburgers, leading to
likelihoodofconfusionintheidentityofbusiness.
Respondentsfurtherclaimthatpetitionersusethe"BigMac"mark
onlyonpetitioners'doubledeckerhamburgers,whilerespondents
usethe"BigMak"markonhamburgersandotherproductslike
siopao, noodles and pizza. Respondents also point out that
petitionersselltheirBigMacdoubledeckersinastyrofoambox
withthe"McDonald's"logoandtrademarkinred,blocklettersata
price more expensive than the hamburgers of respondents. In
contrast, respondents sell their Big Mak hamburgers in plastic
wrappers and plastic bags. Respondents further point out that
petitioners'restaurantsareairconditionedbuildingswithdrivethru
service,comparedtorespondents'mobilevans.
These and other factors respondents cite cannot negate the
undisputed fact that respondents use their "Big Mak" mark on
hamburgers,thesamefoodproductthatpetitioners'sellwiththe
useoftheirregisteredmark"BigMac."Whetherahamburgeris
single,doubleortripledecker,andwhetherwrappedinplasticor
styrofoam, it remains the same hamburger food product. Even
respondents'useofthe"BigMak"markonnonhamburgerfood
productscannotexcusetheirinfringementofpetitioners'registered
mark,otherwiseregisteredmarkswilllosetheirprotectionunder
thelaw.
Theregisteredtrademarkownermayusehismarkonthesameor
similar products, in different segments of the market, and at
differentpricelevelsdependingonvariationsoftheproductsfor
specificsegmentsofthemarket.TheCourthasrecognizedthatthe
registered trademark owner enjoys protection in product and
market areas that are thenormal potential expansion of his
business.Thus,theCourthasdeclared:
Modernlawrecognizesthattheprotectiontowhichtheowner
ofatrademarkisentitledisnotlimitedtoguardinghisgoods
19
 orbusinessfromactualmarketcompetitionwithidenticalor
similar products of the parties, but extends to all cases in
which the use by a junior appropriator of a trademark or
tradenameislikelytoleadtoaconfusionofsource,aswhere
prospectivepurchaserswouldbemisledintothinkingthatthe
complaining party has extended his business into the field
(see148ALR56etseq;53AmJur.576)orisinanyway
connected with the activities of the infringer; or when it
forestallsthenormalpotentialexpansionofhisbusiness(v.
148 ALR, 77, 84; 52 Am. Jur. 576, 577). 56(Emphasis
supplied)
iii. Societes Des Produits Nestle, S.A., et al. vs.
CourtofAppeals,etal.(G.R.No.112012)
FACTS: In 1984, CFC Corporation filed with the Bureau of
Patents,Trademarks,andTechnologyTransfersanapplicationfor
the registration of its trademark Flavor Master an instant
coffee. Nestle opposedthe applicationas italleged thatFlavor
MasterisconfusinglysimilartoNestlecoffeeproductslikeMaster
Blend and Master Roast. Nestle alleged that in promoting their
products,thewordMasterhasbeenusedsofrequentlysomuchso
that when one hears the word Master it connotes to a Nestle
product. They provided as examples the fact that theyve been
using Robert Jaworski and Ric Puno Jr. as their commercial
advertisers;andthatinthosecommercialsJaworskiisamasterof
basketballandthatPunoisamasteroftalkshows;thatthebrandof
coffeeequitableorfittothemisMasterBlendandMasterRoast.
CFCCorporationontheotherhandallegedthatthewordMaster
isagenericandadescriptiveterm,hencenotsubjecttotrademark.
TheDirectorofPatentsruledinfavorofNestlebuttheCourtof
Appeals,usingtheHolisticTest,reversedthesaiddecision.
ISSUE:WhetherornottheCourtofAppealsiscorrect.
HELD:No. The proper test that should have been used is the
DominancyTest.Theapplicationofthetotalityorholistictestis
improper since the ordinary purchaser would not be inclined to
notice the specific features, similarities or dissimilarities,
considering that the product is an inexpensive and common
household item. The use of the word Master by Nestle in its
productsandcommercialshasmadeNestleacquireaconnotation
thatifitsaMasterproductitisaNestleproduct.Assuch,theuse
byCFCofthetermMASTERinthetrademarkforitscoffee
productFLAVORMASTERislikelytocauseconfusionormistake
oreventodeceivetheordinarypurchasers.
In addition, the word MASTER is neither a generic nor a
descriptiveterm.Assuch,saidtermcannotbeinvalidatedasa
trademarkand,therefore,maybelegallyprotected.
Generictermsarethosewhichconstitutethecommondescriptive
nameofanarticleorsubstance,orcomprisethegenusofwhich
theparticularproductisaspecies,orarecommonlyusedasthe
nameordescriptionofakindofgoods,orimplyreferenceto
every member of a genus and the exclusion of individuating
characters,orrefertothebasicnatureofthewaresorservices
providedratherthantothemoreidiosyncraticcharacteristicsofa
particularproduct,andarenotlegallyprotectable.
Ontheotherhand,atermisdescriptiveandthereforeinvalidasa
trademark if, as understood in its normal and natural sense, it
forthwith conveys the characteristics, functions, qualities or
ingredientsofaproducttoonewhohasneverseenitanddoesnot
knowwhatitis,orifitforthwithconveysanimmediateideaof manufacturer. The alleged difference is too insubstantial to be
theingredients,qualitiesorcharacteristicsofthegoods,orifit
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
clearlydenoteswhatgoodsorservicesareprovidedinsuchaway
thattheconsumerdoesnothavetoexercisepowersofperceptionor
imagination.
Rather,thetermMASTERisasuggestivetermbroughtaboutby
theadvertisingschemeofNestle.Suggestivetermsarethosewhich,
inthephraseologyofonecourt,requireimagination,thoughtand
perceptiontoreachaconclusionastothenatureofthegoods.
Suchterms,whichsubtlyconnotesomethingabouttheproduct,
areeligibleforprotectionintheabsenceofsecondarymeaning.
Whilesuggestivemarksarecapableofsheddingsomelightupon
certain characteristics of the goods or services in dispute, they
neverthelessinvolveanelementofincongruity,figurativeness,
orimaginativeeffortonthepartoftheobserver.
b. HolisticTest
In contrast to Dominancy Test, the Holistic Test entails a
consideration of the entirety of the marks as applied to the
products, including the labels and packaging, in determining
confusingsimilarity.Thediscerningeyeoftheobservermustfocus
notonlyonthepredominantwordsbutalsoontheotherfeatures
appearingonbothlabelsinorderthattheobservermaydrawhis
conclusionwhetheroneisconfusinglysimilartotheother.
i. EmeraldGarmentManufacturingCorp.vs.CA
(G.R.No.100098)
FACTS:On18September1981,privaterespondentH.D.LeeCo.,
Inc.filedwiththeBureauofPatents,Trademarks&Technology
Transfer(BPTTT)aPetitionforCancellationofRegistrationNo.
SR5054forthetrademark"STYLISTICMR.LEE"usedonskirts,
jeans,blouses,socks,briefs,jackets,joggingsuits,dresses,shorts,
shirtsandlingerieunderClass25,issuedon27October1980inthe
nameofpetitionerEmeraldGarmentManufacturingCorporation.
Privaterespondentaverredthatpetitioner'strademark"soclosely
resembleditsowntrademark,'LEE'aspreviouslyregisteredand
usedinthePhilippinescauseconfusion,mistakeanddeceptionon
thepartofthepurchasingpublicastotheoriginofthegoods.
On 19 July 1988, the Director of Patents rendered a decision
granting private respondent's petition for cancellation and
oppositiontoregistration.TheDirectorofPatents,usingthetestof
dominancy, declared that petitioner's trademark was confusingly
similartoprivaterespondent'smarkbecause"itistheword'Lee'
whichdrawstheattentionofthebuyerandleadshimtoconclude
that the goods originated from the same manufacturer. It is
undeniablythedominantfeatureofthemark.
ISSUE:Whetherornotatrademarkcausesconfusionandislikely
todeceivethepublicisaquestionoffactwhichistoberesolvedby
applying the "test of dominancy", meaning, if the competing
trademarkcontainsthemainoressentialordominantfeaturesof
anotherbyreasonofwhichconfusionanddeceptionarelikelyto
result.
HELD:
Theword"LEE"isthemostprominentanddistinctivefeatureof
the appellant's trademark and all of the appellee's "LEE"
trademarks.Itisthemarkwhichdrawstheattentionofthebuyer
andleadshimtoconcludethatthegoodsoriginatedfromthesame
noticeable. The likelihood of confusion is further made more
20
probablebythefactthatbothpartiesareengagedinthesameline "BUFFERIN" are practically the same in spelling and
ofbusiness. pronunciation.
AlthoughtheCourtdecidedinfavoroftherespondent,theappellee Indeterminingwhethertwotrademarksareconfusinglysimilar,the
hassufficientlyestablisheditsrighttoprioruseandregistrationof testisnotsimplytotaketheirwordsandcomparethespellingand
the trademark "LEE" in thePhilippinesand is thus entitled to pronunciationofsaidwords.Rather,itistoconsiderthetwomarks
protectionfromanyinfringementuponthesame.Thedissenting intheirentirety,astheyappearintherespectivelabels,inrelation
opinionofJusticePadillaismoreacceptable. tothegoodstowhichtheyareattached.Saidrulewasenunciated
bythisbythisCourtthroughJusticeFelixBautistaAngeloinMead
ii. BristolMyersCo.vs.Dir.ofPatents&United
Johnson&Co.vs.N.V.JVanDorp,Ltd.,L,17501,April27,1963,
AmericanPharmaceuticals,Inc. (G.R.No.L thus:
21587,May19,1966)
Itistruethatbetweenpetitioner'strademark"ALACTA"
ApetitionforregistrationinthePrincipalRegisterofthePatent and respondent's "ALASKA" there are similarities in
Office of the trademark "BIOFERIN" was filed on October 21, spelling,appearanceandsoundforbotharecomposedof
1957 by United American Pharmaceuticals, Inc. Said domestic sixlettersofthreesyllableseachandeachsyllablehas
corporationfirstusedtheaforestatedtrademarkinthePhilippines the same vowel, but in determining if they are
on August 13, 1957. It covers "a medicinal preparation of confusinglysimilaracomparisonofsaidwordsisnotthe
antihistamic,analgesic,antipyriticwithvitaminCandBioflavenoid only determining factor. The two marksin their
usedinthetreatmentofcommoncolds,influenzaandotherfebrile entiretyastheyappearintherespectivelabelsmustalso
diseases with capillary hemmorrhagic tendencies." The product beconsideredinrelationtothegoodstowhichtheyare
fallsunderClass6oftheofficialclassification,thatis,"Medicines attached.Thediscerningeyeoftheobservermustfocus
andPharmaceuticalPreparations". notonlyonthepredominantwordsbutalsoontheother
features appearing in both labels in order that he may
BristolMyersCo.,acorporationoftheStateofDelaware,U.S.A., drawhisconclusionwhetheroneisconfusinglysimilarto
filed on January 6, 1959 an opposition to the application. Said theother....
oppositor is the owner in the Philippines of the trademark
"BUFFERIN"underCertificateofRegistrationNo.4578issuedby Applyingthistesttothetrademarksinvolvedinthiscase,itisat
thePhilippinePatentOfficeonMarch3,1954.Itstrademarkisalso onceevidentthattheDirectorofPatentsdidnoterrinfindingno
registeredintheUnitedStatesunderCertificateofRegistrationNo. confusing similarity. For though the words "BIOFERIN" and
566190 issued on November 4, 1952. It was first used in the "BUFFERIN"havethesamesuffixandsimilarsoundingprefixes,
Philippines on May 13, 1953. The product covered by they appear in their respective labels with strikingly different
"BUFFERIN" also belongs to Class 6, Medicines and backgroundsandsurroundings,astocolor,sizeanddesign.
PharmaceuticalPreparations.Designatedas"Antacidanalgesic",it Forconveniencewesumupthesedifferences,asfollows:
is intended for relief in cases of "simple headaches, neuralgia,
colds,menstrualpainandminormuscularaches."
Relevant
Thethrustofoppositor'scontentionwasthattheregistrationofthe "BIOFERIN" "BUFFERIN"
Factors
applicant's trademark "BIOFERIN would violate its rights and
interests in its registered trademark "BUFFERIN" as well as
misleadandconfusethepublicastothesourceandoriginofthe
1.Shape& Rectangular, about Rectangular, 3
goodscoveredbytherespectivemarks,inviewoftheallegedly
Size of 33/4"21/4" 3/4"'11/4"
practicallythesamespelling,pronunciationandlettertypedesign
Label
ofthetwotrademarkscoveringgoodsofthesameclass.
The parties thereafter filed on January 18, 1961 a joint petition
stipulatingastothefactsandsubmittingthecaseupontheissueof 2. Color of Predominantly Predominantly
whether or not, considering all the factors involved, in both
Label Yellow White
trademarksasthepartieswoulddiscussintheirmemoranda,
there will be such confusing similarity between the two
trademarksaswillbelikelytodeceivethepurchasingpublic.
3. Color Olivegreen Blue
Aftersubmissionofmemoranda,onJune21,1963theDirectorof background
Patentsrenderedadecisiongrantingthepetitionforregistrationand of Word
dismissingtheopposition,onthegroundthat,allfactorsconsidered mark
thetrademarksinquestionarenotconfusinglysimilar,sothatthe
damagefearedbytheoppositorwillnotresult.
FromsaiddecisiontheoppositorappealedtothisCourtbypetition 4. Overall At the top center Atleftsideoflabel
forreviewfiledonJuly24,1963.Thesoleissueraisedtherebyis: Layout word Woodmark"B
Arethetrademarks"BIOFERIN"and"BUFFERIN",aspresented mark"BIOFERIN" UFFERIN"; with
tothepublicintheirrespectivelabels,confusinglysimilar? ; below it "Bristol Myers
arecontentsof Co., New York,
Appellant contends that confusing similarity will obtain because
medicine, arranged N.Y." below at
both products are primarily used for the relief of pains such as
horizontally; rightside,contents,
headaches and colds; and becausewords"BIOFERIN and
atbottom,center, indications

MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY 21

"United dosageare grouped
Pharmaceuticals, together, printed
Inc." in olivegreen perpendicularly
background.Atleft
side
dosage,printed
perpendicularly; at
right
side,indications,als
o perpendicularly
printed.
5. Form of Capsules Tablets
product label says: "50 label says: "36
capsules" Tablets"
6. Label states: Nosuchstatement
Prescriptio "To be dispensed
n only by or on the
prescription of a
physician"
Accordingly,takenastheywillappeartoaprospectivecustomer,
thetrademarkinquestionarenotapttoconfuse.Furthermore,the
product of the applicant is expressly stated asdispensable only
upondoctor'sprescription,whilethatofoppositordoesnotrequire
thesame.Thechancesofbeingconfusedintopurchasingonefor
theotherarethereforeallthemorerenderednegligible.Although
oppositor avers that some drugstores sell "BIOFERIN" without
asking fora doctor'sprescription, the sameif truewould bean
irregularity not attributable to the applicant, who has already
clearlystatedtherequirementofadoctor'sprescriptionuponthe
faceofthelabelofitsproduct.
Wherefore,thedecisionoftheDirectorofPatentsappealedfromis
herebyaffirmedwithoutcosts.Soordered.
7. WellKnownMarks
a. Sec.123(e)(f)
e. Is identicalwith, or confusinglysimilar to, orconstitutes a
translationofamarkwhichisconsideredbythecompetent
authorityofthePhilippinestobewellknowninternationally
andinthePhilippines,whetherornotitisregisteredhere,as
beingalreadythemarkofapersonotherthantheapplicantfor
registration, and used for identical or similar goods or
services: Provided, That in determining whether a mark is
wellknown,accountshallbetakenoftheknowledgeofthe
relevantsectorofthepublic,ratherthanofthepublicatlarge,
including knowledge in the Philippines which has been
obtainedasaresultofthepromotionofthemark;
f. Is identicalwith, or confusinglysimilar to, orconstitutes a
translation of a mark considered wellknown in accordance
with the preceding paragraph, which is registered in the
Philippineswithrespecttogoodsorserviceswhicharenot
similartothosewithrespecttowhichregistrationisapplied
for:Provided,Thatuseofthemarkinrelationtothosegoods
orserviceswouldindicateaconnectionbetweenthosegoods
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
orservices,andtheowneroftheregisteredmark:Provided
further,Thattheinterestsoftheowneroftheregisteredmark
arelikelytobedamagedbysuchuse;
b. Criteria
AmarkiswellknownaccordingtoSec.123.1(e)ifitisconsidered
by the competent authority of the Philippines to be wellknown
internationally and in the Philippines and that in determining
whether a mark is wellknown, account shall be taken of the
knowledgeoftherelevantsectorofthepublic,ratherthanofthe
publicatlarge,includingknowledgeinthePhilippineswhichhas
beenobtainedasaresultofthepromotionofthemark.Competent
authorityasusedinthissectionincludestheIPOanditsrelevant
officers,theDTIandofcourse,theSC,asthefinalarbiterinthis
country.
Rule 102 of the Rules and Regulations on Trademarks, Service
Marks,TradeNamesandMarkedandStampedContainersprovides
helpindeterminingifamarkiswellknown.
In determining whether a mark is wellknown, the following
criteriaoranycombinationthereofmaybetakenintoaccount:
(a) theduration,extentandgeographicalareaofanyuseofthe
mark,inparticular,theduration,extentandgeographicalarea
of any promotion of the mark, including advertising or
publicityandthepresentation,atfairsorexhibitions,ofthe
goodsand/orservicestowhichthemarkapplies;
(b) themarketshare,inthePhilippinesandinothercountries,of
thegoodsand/orservicestowhichthemarkisapplied;
(c) thedegreeoftheinherentoracquireddistinctionofthemark;
(d) thequalityimageorreputationacquiredbythemark;
(e) theextenttowhichthemarkhasbeenregisteredintheworld;
(f) the exclusivity of registration attained by the mark in the
world;
(g) theextenttowhichthemarkhasbeenusedintheworld;
(h) theexclusivityofuseattainedbythemarkintheworld;
(i) thecommercialvalueattributedtothemarkintheworld;
(j) therecordofsuccessfulprotectionoftherightsinthemark;
(k) theoutcomeoflitigationsdealingwiththeissueofwhether
themarkisawellknownmark;and,
(l) thepresenceorabsenceofidenticalorsimilarmarksvalidly
registeredfororusedonidenticalorsimilargoodsorservices
andownedbypersonsotherthanthepersonclaimingthathis
markisawellknownmark.
8. RightsConferredbyRegistrationSec.147
SECTION147.RightsConferred.
147.1. 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
containersforgoodsorserviceswhichareidenticalorsimilarto
thoseinrespectofwhichthetrademarkisregisteredwheresuch
usewouldresultinalikelihoodofconfusion.Incaseoftheuseof
an identicalsign foridentical goodsor services, alikelihood of
confusionshallbepresumed.
147.2. The exclusive right of the owner of a wellknown 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:
22
Provided, That use of that mark in relation to those goods or
services would indicate a connection between those goods or
servicesandtheowneroftheregisteredmark:Providedfurther,
Thattheinterestsoftheowneroftheregisteredmarkarelikelyto
bedamagedbysuchuse.(n)
9. Use by Third Parties of Names, etc. similar to
RegisteredMarkSec.148
SECTION148.UseofIndicationsbyThirdPartiesforPurposes
OtherthanthoseforwhichtheMarkisUsed.Registrationofthe
markshallnotconferontheregisteredownertherighttopreclude
third parties from using bona fide their names, addresses,
pseudonyms,ageographicalname,orexactindicationsconcerning
thekind,quality,quantity,destination,value,placeoforigin,or
time of production or of supply, of their goods or services:
Provided, That such use is confined to the purposes of mere
identificationorinformationandcannotmisleadthepublicastothe
sourceofthegoodsorservices.(n)
10. InfringementandRemedies
a. TrademarkInfringement
i. Sec.155
SECTION155.Remedies;Infringement.Anypersonwhoshall,
withouttheconsentoftheowneroftheregisteredmark:
155.1. Use in commerce any reproduction, counterfeit, copy, or
colorableimitationofaregisteredmarkorthesamecontainerora
dominantfeaturethereofinconnectionwiththesale,offeringfor
sale, distribution, advertisingofanygoodsorservicesincluding
otherpreparatorystepsnecessarytocarryoutthesaleofanygoods
orservicesonorinconnectionwithwhichsuchuseislikelyto
causeconfusion,ortocausemistake,ortodeceive;or
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
intendedtobeusedincommerceuponorinconnectionwiththe
sale, offering for sale, distribution, or advertising of goods or
servicesonorinconnectionwithwhichsuchuseislikelytocause
confusion,ortocausemistake,ortodeceive,shallbeliableina
civil action for infringement by the registrant for the remedies
hereinaftersetforth:Provided,Thattheinfringementtakesplaceat
the moment any of the acts stated in Subsection 155.1 or this
subsectionarecommittedregardlessofwhetherthereisactualsale
ofgoodsorservicesusingtheinfringingmaterial.(Sec.22,R.A.
No166a)
Mere unauthorized use of a container bearing a registered
trademarkinconnectionwiththesale,distributionoradvertisingof
gods or services which is likely to cause confusion, mistake or
deception among the buyers/consumers can be considered as
trademarkinfringement.
ii. Confusionofgoodsvs.confusionofbusiness
Therearetwotypesofconfusionintrademarkinfringement:
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
1. Confusionofgoodswhenanotherwiseprudentpurchaseris
induced to purchase one product in the belief that he is
purchasinganother,inwhichcasedefendantsgoodsarethen
boughtastheplaintiffsanditspoorqualityreflectsbadlyon
theplaintiffsreputation
2. Confusionofbusiness whenthegoodsofthepartiesare
differentbutthedefendantsproductcanreasonably(though
mistakenly)beassumedtooriginateformtheplaintiff,thus
deceiving the public into believing that there is some
connectionbetweentheplaintiffanddefendantwhich,infact,
doesnotexist
iii. ParallelImportation
b. Damages
i. Sec.156157,179
SECTION 156. Actions, and Damages and Injunction for
Infringement.
156.1.Theownerofaregisteredmarkmayrecoverdamagesfrom
any person who infringes his rights, and the measure of the
damagessufferedshallbeeitherthereasonableprofitwhichthe
complaining party would have made, had the defendant not
infringedhisrights,ortheprofitwhichthedefendantactuallymade
outoftheinfringement,orintheeventsuchmeasureofdamages
cannotbereadilyascertainedwithreasonablecertainty, then the
courtmayawardasdamagesareasonablepercentagebasedupon
the amount of gross sales of the defendant or the value of the
servicesinconnectionwithwhichthemarkortradenamewasused
intheinfringementoftherightsofthecomplainingparty.(Sec.23,
firstpar.,R.A.No.166a)
156.2.Onapplicationofthecomplainant,thecourtmayimpound
during the pendency of the action, sales invoices and other
documentsevidencingsales.(n)
156.3. In cases where actual intent to mislead the public or to
defraudthecomplainantisshown,inthediscretionofthecourt,the
damagesmaybedoubled.(Sec.23,firstpar.,R.A.No.166)
156.4.Thecomplainant,uponpropershowing,mayalsobegranted
injunction.(Sec.23,secondpar.,R.A.No.166a)
SECTION 157. Power of Court to Order Infringing Material
Destroyed.
157.1.InanyactionarisingunderthisAct,inwhichaviolationof
anyrightoftheowneroftheregisteredmarkisestablished,the
court may order that goods found to be infringing be, without
compensation of any sort, disposed of outside the channels of
commerceinsuchamannerastoavoidanyharmcausedtothe
rightholder,ordestroyed;andalllabels,signs,prints,packages,
wrappers,receptaclesandadvertisementsinthepossessionofthe
defendant, bearing the registered mark or trade name or any
reproduction,counterfeit,copyorcolorableimitationthereof,all
plates,molds,matricesandothermeansofmakingthesame,shall
bedeliveredupanddestroyed.
23
157.2.Inregardtocounterfeitgoods,thesimpleremovalofthe PresidingJudge,Branch65
trademarkaffixedshallnotbesufficientotherthaninexceptional RTC,LaoagCity
caseswhichshallbedeterminedbytheRegulations,topermitthe
releaseofthegoodsintothechannelsofcommerce.(Sec.24,R.A. Region2:
No.166a)
1)Hon.RolandoR.Velasco

ii. Civilvs.CriminalInfringement PresidingJudge,Branch6

RTC,Aparri,Cagayan
c. Jurisdiction
Region5:
i. A.M.No.2111SC,Feb.9,2002 1)Hon.VladimirB.Bruselas

[A.M.No.02111SC.February19,2002] PresidingJudge,Branch6
RTC,LegazpiCity
RE:DESIGNATIONOFANINTELLECTUALPROPERTY
JUDGEFORMLA. 2)Hon.FilemonB.Montenegro

ENBANC PresidingJudge,Branch26

Gentlemen: RTC,NagaCity

Quotedhereunder,foryourinformation,isaresolutionofthis Region8:
CourtdatedFEB192002. 1)Hon.FriscoT.Lilagan
A.M.No.02111SC(Re:DesignationofanIntellectualProperty PresidingJudge,Branch34
JudgeforManila.)
RTC,TaclobanCity
(A) Acting on the memorandum dated 15 January 2002 of
Deputy Court Administrator Christopher O. Lock, favorably Region12:
endorsed by Court Administrator Presbitero J. Velasco, Jr., the 1)Hon.AlbertB.Abragan
CourtherebydesignatesBranch24oftheRegionalTrialCourtof
Manila,presidedoverbyJudgeANTONIOM.EUGENIO,JR.,as PresidingJudge,Branch3
SpecialIntellectualPropertyCourtforManilainsubstitutionof
RTC,IliganCity
Branch1ofsaidCourtwhichwasdesignatedSpecialIntellectual
Property Court, then presided over by Judge Rebecca de Guia TheforegoingSpecialIntellectualPropertyCourtsshalltryand
Salvador (now Associate Justice of the Court of Appeals), decide cases involving violations of intellectual property rights
pursuant to Administrative Order No. 11395 dated 5 October defined under the Intellectual Property Code committed within
1995. theirrespectiveterritorialareas.Sincethereareonlyafewcasesof
violations of intellectual property rights now pending in other
AsjudgeoftheSpecialIntellectualPropertyCourt,JudgeAntonio
branchesoftheaforementionedRegionalTrialCourts,suchcases
M.Eugenio,Jr.shalltryanddecidecasesinvolvingviolationsof
shallremainwithandshallbedecidedbythebranchestowhich
intellectual property rights under the Intellectual Property Code
they have been assigned.Only cases hereafter filed may be
(R.A.No.8293)committedwithintheCityofManila.
assignedtotheabovedesignatedspecialcourts.
TheearlierdesignationofBranch1oftheRegionalTrialCourtof
(C)Finally,inordertoensureajustandequitabledistributionof
Manila as a Special Intellectual Property Court is hereby
casesamongtheJudgesconcerned,alltheaforementionedSpecial
REVOKED, and the cases involving violations of intellectual
Intellectual Property Courts shall continue to participate in the
propertyrightsearlierassignedtosaidBranch1pursuanttoandby
rafflesofothercases:Provided,however,thattheExecutiveJudges
virtueofAdministrativeOrderNo.11395areherebyreassigned
concerned shall adopt a procedure whereby every intellectual
toBranch24ofsaidCourt.
property right case assigned to a Special Intellectual Property
(B) Furthermore, acting on the recommendation of Hon. Courtshouldbeconsideredacaseraffledtoitandbedulycredited
AssociateJusticeReynatoS.Puno,ChairmanoftheCommitteeon tosuchcourt.
Revision of the Rules of Court, and the Office of the Court
ThisResolutionshalltakeeffectimmediatelyandtheOfficeofthe
Administrator,andinordertoensurespeedydispositionofcases
CourtAdministratorshallimplementit.
involving violations of intellectual property rights under the
Intellectual Property Code (R.A. No. 8293), the following
Regional Trial Courts (RTCs) are hereby designated Special
IntellectualPropertyCourts:
ii. A.M.No.030303SC,July1,2003
Region1:
1)Hon.AntonioM.Esteves RE: CONSOLIDATION OF INTELLECTUAL PROPERTY
COURTSWITHCOMMERCIALCOURTS
PresidingJudge,Branch5
WHEREAS, to implement the provisions of Section 5.2 of
RTC,BaguioCity RepublicActNo.8799(TheSecuritiesRegulationCode),andin
2)Hon.ManuelL.Argel theinterestofaspeedyandefficientadministrationofjustice,the

MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY 24
SupremeCourtenbane,inthe(a)Resolutiondated21November
2000 (Annex 1), 4 July 2001 (Annex 1a), 12 November 2002
(Annex1b),and9July2002(Annex1c),allissuedinA.M.No.
001103SC;(b)Resolutiondated27August2001inA.M.No.
015298RTC(Annex2);and(c)Resolutiondated8July2002in
A.M.No.0112656RTC(Annex3),resolvedtodesignatecertain
branches of the Regional Trial Courts to try and decide cases
formerlycognizablebytheSecuritiesandExchangeCommission;
WHEREAS, pursuant to the same Resolution, sixtyfive (65)
Regional Trial Courts, distributed in all regions (NCJR and
Regions 112), were designated as SEC courts ("SEC Courts"),
whichcourtshavepresentlyatotalof812pendingSECcases(see
Annex6,Table);chanroblesvirtuallawlibrary
WHEREAS,inA.ONo.11395,dated2October1995,asamended
byA.O.No.10496,dated21October1996,theRegionalTrial
CourtsintheNationalCapitalRegionandRegions3,4,6,7,9,10
and11,withtwentyseven(27)judges,werespeciallydesignatedto
tryanddecidecasesforviolationsofIntellectualPropertyRights
(Annex4),andtoensurethespeedydispositionofcasesinvolving
violations of intellectual property rights under the Intellectual
PropertyCode(Rep.ActNo.8293),theSupremeCourtenbane,in
A.M.No.02111SC,datedFebruary19,2002,designatedthe
RegionalTrialCourtsinRegions1,2,5,8and12,withatotalof 6.
seven(7)judges,andBranch24oftheRegionalTrialCourtof
Manilawithone(1)judge,asSpecialIntellectualPropertyCourts
("SpecialIPCourts")(Annex5)
WHEREAS,pursuanttoA.M.No.02111SCandA.O.No.113
95,theseSpecialIPCourtshaveatotalcaseloadof503cases.Of
this number 434 IP cases are pending in the NCJR (Annex 6,
Table);chanroblesvirtuallawlibrary
WHEREAS,sincetheestablishmentofSpecialIPCourts(except
for the Special IP Courts in Manila), 15 designated courts, in
Regions1,2,3,4,5,6,7,8,9and12havezero(0)IPcases,anddo
not warrant their continued designations as Intellectual Property
Courts(Annex7,Table);chanroblesvirtuallawlibrary
WHEREAS,intellectualpropertycasesarecommercialinnature;
WHEREAS, to streamline the court structure and to promote
expediency and efficiency in handling such special cases, the
jurisdiction to hear and decide IPC and SEC cases are best
consolidatedinonecourt;
NOW,THEREFORE,theCourtResolves:
1. The Regional Courts previously designated as SEC Courts
throughthe:(a)ResolutionsofthisCourtdated21November
2000,4July2001,12November2002,and9July2002,all
issued in A.M. No. 001103SC, (b) Resolution dated 27
August2001inA.M.No.015298RTC;and(c)Resolution
dated 8 July 2002 in A.M. No. 0112656RTC are hereby
DESIGNATEDandshallbeCALLEDasSpecialCommercial
Courts to try and decide cases involving violations of
IntellectualPropertyRightswhichfallwithintheirjurisdiction
and those cases formerly cognizable by the Securities and
ExchangeCommission;chanroblesvirtuallawlibrary
2. The designation of Intellectual Property Courts under
AdministrativeOrderNo. 11395dated2October1995,as
amended by Administrative Order No. 10496 dated 21
October1996andResolutiondated19February2002inA.M.
No. 02111SC, is herebyrevoked. However, the Regional
Trial Court, Branch 24, Manila is hereby designated as an
additionalSpecialCommercialCourtintheCityofManila;
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
3. UpontheeffectivityofthisResolution,allIPcasesshallbe
transferred to the designated Special Commercial Courts
exceptthosewhichhaveundergonethepretrialstageincivil
casesorthosewhereanyoftheaccusedhasbeenarraignedin
criminalcaseswhichshallberetainedbythecourtpreviously
assignedtotrythem;
4. TheSpecialCommercialCourtsshallhavejurisdictionover
casesarisingwithintheirrespectiveterritorialjurisdictionwith
respecttotheNationalCapitalJudicialRegionandwithinthe
respective provinces with respect to the First to Twelfth
JudicialRegions. Thus,casesshallbefiledintheOfficeof
the Clerk of Court in the official station of the designated
SpecialCommercialCourt;chanroblesvirtuallawlibrary
5. IntheeventofinhibitionofthejudgeofadesignatedSpecial
CommercialCourt,thefollowingguidelinesshallbeobserved:
(a)wherethereisonlyone(1)SpecialCommercialCourt,the
caseshallberaffledamongtheotherjudgesinthestation;(b)
where there are two (2) Special Commercial Courts in the
station,theExecutiveJudgeshallimmediatelyassignthecase
to the other Special Commercial Court; and (c) in case of
inhibitionofbothjudgesoftheSpecialCommercialCourts,
theExecutiveJudgeshallrafflethecaseamongthejudgesin
thestation;and
Inordertoensureajustandequitabledistributionofcases,the
designated Special Commercial Courts shall continue to
participate inthe rafflesof othercases. Provided, however,
thattheExecutiveJudgeconcernedshalladoptaprocedure
whereby every IP and SEC case assigned to a Special
CommercialCourtshouldbeconsideredacaseraffledtoit
anddulycreditedtosuchcourt.chanroblesvirtuallawlibrary
This Resolution shall take effect on 1 July 2003 and shall be
publishedintwo(2)newspapersofgeneralcirculation.
17June2003.
iii. Sec.10.2
SECTION10.2.
a. Exerciseoriginaljurisdictioninadministrativecomplaintsfor
violations of laws involving intellectual property rights:
Provided,Thatitsjurisdictionislimitedtocomplaintswhere
the total damages claimed are not less than Two hundred
thousandpesos(P200,000):Providedfurther,Thatavailment
oftheprovisionalremediesmaybegrantedinaccordancewith
theRulesofCourt.TheDirectorofLegalAffairsshallhave
the power to hold and punish for contempt all those who
disregard orders or writs issued in the course of the
proceedings.(n)
b. Afterformalinvestigation,theDirectorforLegalAffairsmay
impose one (1) or more of the following administrative
penalties:
i. The issuance of a cease and desist order which shall
specifytheactsthattherespondentshallceaseanddesist
fromandshallrequirehimtosubmitacompliancereport
within a reasonable time which shall be fixed in the
order;
ii. Theacceptanceofavoluntaryassuranceofcompliance
or discontinuance as may be imposed. Such voluntary
assurancemayincludeoneormoreofthefollowing:
1. Anassurancetocomplywiththeprovisionsofthe
intellectualpropertylawviolated;
25
 3. Anassurancetorefrainfromengaginginunlawful
andunfairactsandpracticessubjectoftheformal
investigation;
4. Anassurancetorecall,replace,repair,orrefundthe
money value of defective goods distributed in
commerce;and
5. An assurance to reimburse the complainant the
expensesandcostsincurredinprosecutingthecase
in the Bureau of Legal Affairs. The Director of
Legal Affairs may also require the respondent to
submitperiodiccompliancereportsandfileabond
toguaranteecomplianceofhisundertaking;
iii. The condemnation or seizure of products which are
subjectoftheoffense.Thegoodsseizedhereundershall
be disposed of in such manner as may be deemed
appropriatebytheDirectorofLegalAffairs,suchasby
sale, donation to distressed local governments or to
charitableorreliefinstitutions,exportation,recyclinginto
other goods, or any combination thereof, under such
guidelinesashemayprovide;
iv. Theforfeitureofparaphernaliaandallrealandpersonal
propertieswhichhavebeenusedinthecommissionofthe
offense;
v. Theimpositionofadministrativefinesinsuchamountas
deemed reasonable by the Director of Legal Affairs,
whichshallinnocasebelessthanFivethousandpesos
(P5,000)normorethanOnehundredfiftythousandpesos
(P150,000).Inaddition,anadditionalfineofnotmore
thanOnethousandpesos(P1,000)shallbeimposedfor
eachdayofcontinuingviolation;
vi. The cancellation of any permit, license, authority, or
registrationwhichmayhavebeengrantedbytheOffice,
orthesuspensionofthevaliditythereofforsuchperiod
of time as the Director of Legal Affairs may deem
reasonablewhichshallnotexceedone(1)year;
vii. The withholding of any permit, license, authority, or
registration which is being secured by the respondent
fromtheOffice;
viii. Theassessmentofdamages;
ix. Censure;and
x. Otheranalogouspenaltiesorsanctions.(Secs.6,7,8,and
9,ExecutiveOrderNo.913[1983]a)
d. RequirementofNotice
Theowneroftheregisteredmarkshallnotbeentitledtorecover Unauthorized use of a
profits or damages unless the acts have been committed with
knowledgethatsuchimitationislikelytocauseconfusion,orto
causemistake,ortodeceive.
Knowledgeispresumedif:(a)markisdisplayedwiththewords
Registered Mark or symbol or (b) if the defendant had Limitedscope
otherwiseactualnoticeoftheregistration.
11. UnfairCompetition
a. Sec.168
SECTION 168. Unfair Competition, Rights, Regulation and
Remedies.
168.1.Apersonwhohasidentifiedinthemindofthepublicthe
goodshemanufacturesordealsin,hisbusinessorservicesfrom
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
thoseofothers,whetherornotaregisteredmarkisemployed,hasa
property right in the goodwill of the said goods, business or
servicessoidentified,whichwillbeprotectedinthesamemanner
asotherpropertyrights.
168.2.Anypersonwhoshallemploydeceptionoranyothermeans
contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or
servicesforthoseoftheonehavingestablishedsuchgoodwill,or
whoshallcommitanyactscalculatedtoproducesaidresult,shall
beguiltyofunfaircompetition,andshallbesubjecttoanaction
therefor.
168.3.Inparticular,andwithoutinanywaylimitingthescopeof
protection against unfair competition, the following shall be
deemedguiltyofunfaircompetition:
a. Any person, who is selling his goods and gives them the
general appearance of goods of another manufacturer or
dealer,eitherastothegoodsthemselvesorinthewrappingof
thepackagesinwhichtheyarecontained,orthedevicesor
words thereon, or in any other feature of their appearance,
whichwouldbelikelytoinfluencepurchaserstobelievethat
thegoodsofferedarethoseofamanufacturerordealer,other
than the actual manufacturer or dealer, or who otherwise
clothesthegoodswithsuchappearanceasshalldeceivethe
public and defraud another of his legitimate trade, or any
subsequentvendorofsuchgoodsoranyagentofanyvendor
engagedinsellingsuchgoodswithalikepurpose;
b. Anypersonwhobyanyartifice,ordevice,orwhoemploys
anyothermeanscalculatedtoinducethefalsebeliefthatsuch
personisofferingtheservicesofanotherwhohasidentified
suchservicesinthemindofthepublic;or
c. Anypersonwhoshallmakeanyfalsestatementinthecourse
oftradeorwhoshallcommitanyotheractcontrarytogood
faithofanaturecalculatedtodiscreditthegoods,businessor
servicesofanother.
168.4.TheremediesprovidedbySections156,157and161shall
applymutatismutandis.(Sec.29,R.A.No.166a)
b. Infringementvs.UnfairCompetition
InfringementofTrademark UnfairCompetition
Passing off of ones goods as
trademark thoseofanother
Fraudulentintentisunnecessary Fraudulentintentisessential
Prior registration of the Registrationisnotnecessary
trademark is a prerequisite to
theaction
Widerscope
Sameclassofgoodsorservices Different classes of goods or
mustbeinvolved. servicesmaybeinvolved.
c. PilipinasShellPetroleum,etal.vs.RomarsIntl
(G.R.No.189669,Feb.16,2015)
PILIPINASSHELLPETROLEUMCORPORATIONAND
PETRONCORPORATION,Petitioners,v.ROMARS
INTERNATIONALGASESCORPORATION,Respondent.
DECISION
26
PERALTA,J.:
ThisdealswiththePetitionforReviewonCertiorariunderRule45
oftheRulesofCourtprayingthattheDecision 1oftheCourtof
Appeals (CA), dated March 13, 2009, and the Resolution 2dated
September 14, 2009, denying petitioner's motion for
reconsideration thereof, be reversed and set aside.
Theantecedentfactsareasfollow:
Petitioners received information that respondent was selling,
offeringforsale,ordistributingliquefiedpetroleumgas(LPG)by
illegallyrefillingthesteelcylindersmanufacturedbyandbearing
the duly registered trademark and device of respondent Petron.
Petronthenobtainedtheservicesofaparalegalinvestigationteam
who sent their people to investigate. The investigators went to
respondent'spremiseslocatedinSanJuan,Baao,CamarinesSur,
bringingalongfouremptycylindersofShellane,Gasul,Totaland
Superkalan and asked that the same be refilled. Respondent's
employees then refilled said empty cylinders at respondent's
refilling station. The refilled cylinders were brought to the
Marketing Coordinator of Petron Gasul who verified that
respondentwasnotauthorizedtodistributeand/orsell,orotherwise
dealwithPetronLPGproducts,and/oruseorimitateanyPetron
trademarks. Petitioners then requested the National Bureau of
Investigation(NBI)toinvestigatesaidactivitiesofrespondentfor
the purpose of apprehending and prosecuting establishments
conducting illegal refilling, distribution and/or sale of LPG
productsusingthesamecontainersofPetronandShell,whichacts
constituteaviolationofSection168,3inrelationtoSection1704of
RepublicAct(R.A.)No.8293,otherwiseknownastheIntellectual
Property Code of the Philippines,and/or Section 25of R.A. No.
623, otherwise known asAn Act To Regulate the Use of Duly
StampedorMarkedBottles,Boxes,Casks,Kegs,BarrelsandOther
SimilarContainers.
TheNBIproceededwiththeirinvestigationandreportedlyfound
commercial quantities of Petron Gasul and Shellane cylinders
stockpiledatrespondent'swarehouse. Theyalsowitnessedtrucks
coming from respondent's refilling facility loaded with Gasul,
Shellane and Marsflame cylinders, which then deposit said
cylindersindifferentplaces, oneofthemastorecalledEdrich
Enterpriseslocatedat272NationalHighway,SanNicolas,Iriga
City.TheinvestigatorsthenboughtShellaneandGasulcylinders
from Edrich Enterprises, for which they were issued an official
receipt.
Thus, the NBI, in behalf of Petron and Shell,filed with the
RegionalTrialCourtofNagaCity(RTCNaga),twoseparate
Applications for Search Warrantfor Violation of Section
155.1,6in relation to Section 1707of R.A. No. 8293 against
respondentand/oritsoccupants. OnOctober23,2002,theRTC
NagaCityissuedanOrdergrantingsaidApplicationsandSearch
WarrantNos.200227and200228wereissued.Onthesameday,
the NBI served the warrants at the respondent's premises in an
orderlyandpeacefulmanner,andarticlesoritemsdescribedinthe
warrantswereseized.
OnNovember4,2002,respondentfiledaMotiontoQuashSearch
WarrantNos.200227and200228,wheretheonlygroundscited
were:(a)therewasnoprobablecause;(b)therehadbeenalapseof
fourweeksfromthedateofthetestbuytothedateofthesearch
andseizureoperations;(c)mostofthecylindersseizedwerenot
owned by respondent but by a third person; and (d) Edrich
EnterprisesisanauthorizedoutletofGasulandMarsflame.Inan
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
OrderdatedFebruary21,2003,theRTCNagadeniedtheMotion
toQuash.
However,onMarch27,2003,respondent'snewcounselfiledan
AppearancewithMotionforReconsideration. Itwasonlyinsaid
motionwhererespondentraisedforthefirsttime,theissueofthe
impropriety of filing the Application for Search Warrant at the
RTCNaga City whenthe alleged crime was committed in a
placewithintheterritorialjurisdictionoftheRTCIrigaCity.
RespondentpointedoutthattheapplicationfiledwiththeRTC
Nagafailedtostateanycompellingreasontojustifythefilingof
thesameinacourtwhichdoesnothaveterritorialjurisdictionover
theplaceofthecommissionofthecrime,asrequiredbySection2
(b), Rule 126 of the Revised Rules of Criminal Procedure.
PetitioneropposedtheMotionforReconsideration,arguingthatit
wasalreadytoolateforrespondenttoraisetheissueregardingthe
venueofthefilingoftheapplicationforsearchwarrant,asthis
wouldbeinviolationoftheOmnibusMotionRule.
InanOrderdatedJuly28,2003,theRTCNagaissuedanOrder
granting respondent's Motion for Reconsideration, thereby
quashing Search Warrant Nos. 200227 and 200228.
PetitionerthenappealedtotheCA,buttheappellatecourt,inits
DecisiondatedMarch13,2009,affirmedtheRTCOrderquashing
thesearchwarrants.Petitioner'smotionforreconsiderationofthe
CADecisionwasdeniedperResolutiondatedSeptember14,2009.
Elevating the matter to this Courtviaa petition for review
oncertiorari,petitionerpresentshereinthefollowingissues:
A.
THE COURT OF APPEALS GRAVELY ERRED IN RULING
THAT VENUE IN AN APPLICATION FOR SEARCH
WARRANT IS JURISDICTIONAL. THIS IS BECAUSE A
SEARCHWARRANTCASEISNOTACRIMINALCASE.
B.
THECOURTOFAPPEALSGRAVELYERREDINRULING
THATRESPONDENT'SMOTIONTOQUASHISNOT
SUBJECTTOTHEOMNIBUSMOTIONRULEANDTHAT
THEISSUEOFLACKOFJURISDICTIONMAYNOTBE
WAIVEDANDMAYEVENBERAISEDFORTHEFIRST
TIMEONAPPEAL.8
Petitioner'sargumentsdeservecloserexamination.
Section2,Rule126oftheRevisedRulesofCriminalProcedure
providesthus:
SEC.2.Courtwhereapplicationsforsearchwarrantshallbefiled.
An application for search warrant shall be filed with the
following:
(a) Any court within whose territorial jurisdiction a crime was
committed.
(b)Forcompellingreasonsstatedintheapplication,anycourt
withinthejudicialregionwherethecrimewascommittedifthe
placeofthecommissionofthecrimeisknown,oranycourt
withinthejudicialregionwherethewarrantshallbeenforced.
However, if the criminal action has already been filed, the
application shall only be made in the court where the criminal
actionispending.(Emphasissupplied)
27
Theaboveprovisionisclearenough.Underparagraph(b)thereof,
theapplicationforsearchwarrantinthiscaseshouldhavestated
compellingreasonswhythesamewasbeingfiledwiththeRTC
NagainsteadoftheRTCIrigaCity,consideringthatitisthelatter
court that has territorial jurisdiction over the place where the
allegedcrimewascommittedandalsotheplacewherethesearch
warrant was enforced. The wordings of the provision is of a
mandatorynature,requiringastatementofcompellingreasonsif
theapplicationisfiledinacourtwhichdoesnothaveterritorial
jurisdiction over the place of commission of the crime. Since
Section2,ArticleIIIofthe1987Constitutionguaranteestheright
ofpersonstobefreefromunreasonablesearchesandseizures,and
searchwarrantsconstitutealimitationonthisright,thenSection2,
Rule126oftheRevisedRulesofCriminalProcedureshouldbe
construedstrictlyagainststateauthoritieswhowouldbeenforcing
thesearchwarrants.Onthispoint,then,petitioner'sapplicationfor
asearchwarrantwasindeedinsufficientforfailingtocomplywith
therequirementtostatethereinthecompellingreasonswhythey
hadtofiletheapplicationinacourtthatdidnothaveterritorial
jurisdictionovertheplacewheretheallegedcrimewascommitted.
Notwithstandingsaidfailuretostatethecompellingreasonsinthe
application,themorepressingquestionthatwoulddeterminethe
outcomeofthecaseis,didtheRTCNagaactproperlyintaking
intoconsiderationtheissueofsaiddefectinresolvingrespondent's
motionforreconsiderationwheretheissuewasraisedforthevery
firsttime? Therecordbearsoutthat,indeed,respondentfailedto
includesaidissueatthefirstinstanceinitsmotiontoquash.Does
theomnibusmotionrulecoveramotiontoquashsearchwarrants?
The omnibus motion rule embodied in Section 8, Rule 15, in
relationtoSection1,Rule9,demandsthatallavailableobjections
beincludedinaparty'smotion,otherwise,saidobjectionsshallbe
deemed waived; and, the only grounds the court could take
cognizanceof,evenifnotpleadedinsaidmotionare:(a)lackof
jurisdiction over the subject matter;(b) existence of another
actionpendingbetweenthesamepartiesforthesamecause;and(c)
barbypriorjudgmentorbystatuteoflimitations. 9 Itshouldbe
stressedherethattheCourthasruledinanumberofcasesthatthe
omnibus motion rule is applicable to motions to quash search
warrants.10 Furthermore, the Court distinctly stated inAbuan v.
People,11thatthemotiontoquashthesearchwarrantwhich
theaccusedmayfileshallbegovernedbytheomnibusmotion
rule,provided,however,thatobjectionsnotavailable,existent
or known during the proceedings for the quashal of the
warrantmayberaisedinthehearingofthemotiontosuppress
x x x.12cralawlawlibrary
In accordancewith theomnibus motionrule, therefore, the trial
courtcouldonlytakecognizanceofanissuethatwasnotraisedin
themotiontoquashif,(1)saidissuewasnotavailableorexistent
whentheyfiledthemotiontoquashthesearchwarrant;or(2)the
issue was one involving jurisdiction over the subject matter.
Obviously,theissueofthedefectintheapplicationwasavailable
andexistentatthetimeoffilingofthemotiontoquash. What
remainstobeansweredthenis,ifthenewlyraisedissueofthe
defect in the application is an issue of jurisdiction.
In resolving whether the issue raised for the first time in
respondent's motion for reconsideration was an issue of
jurisdiction,theCArationcinated,thus:
Itisjurisprudentiallysettledthattheconceptofvenueofactionsin
criminalcases, unlikeincivilcases,isjurisdictional. Theplace
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
wherethecrimewascommitteddeterminesnotonlythevenueof
the action but is an essential element of jurisdiction. It is a
fundamentalrulethatforjurisdictiontobeacquiredbycourtsin
criminalcases,theoffenseshouldhavebeencommittedoranyone
of its essential ingredients should have taken place within the
territorial jurisdiction of the court. Territorial jurisdiction in
criminalcasesistheterritorywherethecourthasjurisdictionto
takecognizanceortotrytheoffenseallegedlycommittedtherein
by the accused. Thus, it cannot take jurisdiction over a person
chargedwithanoffenseallegedlycommittedoutsideofthatlimited
territory.13
Unfortunately,theforegoingreasoningoftheCA,isinceptionally
flawed,becauseaspronouncedbytheCourtinMalaloanv.Court
of Appeals,14and reiterated in the more recentWorldwide Web
Corporationv.PeopleofthePhilippines,15towit:
xxxasweheldinMalaloanv.CourtofAppeals,anapplication
for a search warrant is a special criminal process, rather
thanacriminalaction:
Thebasicflawinthisreasoningisinerroneouslyequatingthe
applicationforandtheobtentionofasearchwarrantwiththe
institutionandprosecutionofacriminalactioninatrialcourt.
Itwouldthuscategorizewhatisonlyaspecialcriminalprocess,
thepowertoissuewhichisinherentinallcourts,asequivalent
to a criminalaction, jurisdiction over which is reposed
inspecificcourtsofindicatedcompetence.Itignoresthefactthat
therequisites,procedureandpurposefortheissuanceofasearch
warrantarecompletelydifferentfromthosefortheinstitutionofa
criminalaction.
For, indeed, a warrant, such as a warrant of arrest or a search
warrant,merelyconstitutesprocess.Asearchwarrantisdefinedin
ourjurisdictionasanorderinwritingissuedinthenameofthe
PeopleofthePhilippinessignedbyajudgeanddirectedtoapeace
officer,commandinghimtosearchforpersonalpropertyandbring
itbeforethecourt.Asearchwarrantisinthenatureofacriminal
process akin to a writ of discovery. It is a special and peculiar
remedy, drastic in its nature, and made necessary because of a
publicnecessity.
InAmericanjurisdictions,fromwhichwehavetakenourjural
concept and provisions on search warrants, such warrant is
definitivelyconsideredmerelyasaprocess,generallyissuedby
acourtintheexerciseofitsancillaryjurisdiction,andnota
criminal action to be entertained by a court pursuant to its
originaljurisdiction.xxx.(Emphasissupplied)
Clearly then, an application for a search warrant is not a
criminalaction.xxx16(Emphasissupplied)
TheforegoingexplanationshowswhytheCAarrivedatthewrong
conclusion. It gravely erred in equating the proceedings for
applicationsforsearchwarrantswithcriminalactionsthemselves.
AselucidatedbytheCourt,proceedingsforsaidapplicationsare
notcriminalinnatureand,thus,therulethatvenueisjurisdictional
does not apply thereto. Evidently, the issue of whether the
applicationshouldhavebeenfiledinRTCIrigaCityorRTCNaga,
isnotone involving jurisdiction because, as stated in the afore
quoted case,the power to issue a special criminal process is
inherentinallcourts.
Inferringfromtheforegoing,theCourtdeemsitimproperforthe
RTCNagatohaveeventakenintoconsiderationanissuewhich
28
respondent failed to raise in its motion to quash, as it did not
involveaquestionofjurisdictionoverthesubjectmatter.Itisquite
clear that the RTCNaga had jurisdiction to issue criminal
processessuchasasearchwarrant.
Moreover,theCourtmustagainemphasizeitspreviousadmonition
inSpousesAnunciacionv.Bocanegra,17that:
We likewise cannot approve the trial court's act of entertaining
supplementalmotionsxxxwhichraisegroundsthatarealready
deemedwaived.Todosowouldencouragelawyersandlitigantsto
file piecemeal objections to a complaint in order to delay or
frustratetheprosecutionoftheplaintiff'scauseofaction.18
WHEREFORE,thepetitionisGRANTED.TheDecisionofthe
CourtofAppeals,datedMarch13,2009,andtheResolutiondated
September14,2009inCAG.R.CVNo.80643areREVERSED.
TheOrderdatedFebruary21,2003issuedbytheRegionalTrial
CourtofNaga,CamarinesSur,Branch24,denyingrespondent's
motiontoquash,isREINSTATED.
SOORDERED.
d. WillawareProductsCorp.vs.JesichrisMfg.Corp.
(G.R.No.195549,Sept.3,2014)
PERALTA,J.:
BeforetheCourtisaPetitionforReviewonCertiorariunderRule
45oftheRulesofCourtseekingtosetasidetheDecision1dated
November24,2010andResolution2datedFebruary10,2011ofthe
CourtofAppeals(CA)inCAG.R.CVNo.86744.
The facts, as found by the Regional Trial Court (RTC), are as
follows:
[Respondent]JesichrisManufacturingCompany([respondent]for
short) filed this present complaint for damages for unfair
competition with prayer for permanent injunction to enjoin
[petitioner]WillawareProductsCorporation([petitioner]forshort)
frommanufacturinganddistributingplasticmadeautomotiveparts
similartothoseof[respondent].
[Respondent]allegedthatitisadulyregisteredpartnershipengaged
inthemanufactureanddistributionofplasticandmetalproducts,
with principal office at No. 100 Mithi Street, Sampalukan,
CaloocanCity.Sinceitsregistrationin1992,[respondent]hasbeen
manufacturinginitsCaloocanplantanddistributingthroughoutthe
Philippinesplasticmadeautomotiveparts.[Petitioner],ontheother
hand, which is engaged in the manufacture and distribution of
kitchenwareitemsmadeofplasticandmetalhasitsofficenearthat
of[respondent].[Respondent]furtherallegedthatinviewofthe
physicalproximityof[petitioners]officeto[respondents]office,
and in view of the fact that some of the [respondents]
employeeshadtransferredto[petitioner],[petitioner]haddeveloped
familiaritywith[respondents]products,especiallyitsplasticmade
automotiveparts.
That sometime in November 2000, [respondent] discovered that
[petitioner] had been manufacturing and distributing the same
automotive parts with exactly similar design, same material and
colors but was selling these products at a lower price as
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
[respondents] plasticmade automotive parts and to the same
customers.
[Respondent] alleged that it had originated the use of plastic in
placeofrubberinthemanufactureofautomotiveunderchassisparts
such as spring eye bushing, stabilizer bushing, shock
absorberbushing, center bearing cushions, among others.
[Petitioners] manufacture of the same automotive parts with
plasticmaterialwastakenfrom[respondents]ideaofusingplastic
for automotive parts. Also, [petitioner] deliberately copied
[respondents] products all of which acts constitute unfair
competition,isandarecontrarytolaw,morals,goodcustomsand
publicpolicyandhavecaused[respondent]damagesintermsoflost
andunrealizedprofitsintheamountofTWOMILLIONPESOSas
ofthedateof[respondents]complaint.
Furthermore, [petitioners] tortuous conduct compelled
[respondent]toinstitutethisactionandtherebytoincurexpensesin
the way of attorneys fees and other litigation expenses in the
amountofFIVEHUNDREDTHOUSANDPESOS(P500,000.00).
In its Answer, [petitioner] denies all the allegations of the
[respondent]exceptforthefollowingfacts:thatitisengagedinthe
manufactureanddistributionofkitchenwareitemsmadeofplastic
and metal and that theres physical proximity of [petitioners]
office to [respondent]s office, and that someof [respondents]
employeeshadtransferredto[petitioner]andthatovertheyears
[petitioner]haddevelopedfamiliaritywith[respondents]products,
especiallyitsplasticmadeautomotiveparts.
AsitsAffirmativeDefenses,[petitioner]claimsthattherecanbeno
unfaircompetitionastheplasticmadeautomotivepartsaremere
reproductions of original parts and their construction and
compositionmerelyconformstothespecificationsoftheoriginal
partsofmotorvehiclestheyintendtoreplace.Thus,[respondent]
cannot claim that it "originated" the use of plastic for these
automotive parts. Even assuming for the sake of argument that
[respondent]indeedoriginatedtheuseoftheseplasticautomotive
parts,itstillhasnoexclusiverighttouse,manufactureandsell
these as it has no patent over these products. Furthermore,
[respondent]isnottheonlyexclusivemanufactureroftheseplastic
made automotive parts as there are other establishments which
werealreadyopenlysellingthemtothepublic.3
Aftertrialonthemerits,theRTCruledinfavorofrespondent.It
ruled that petitioner clearly invaded the rights or interest of
respondentbydeliberatelycopyingandperformingactsamounting
to unfair competition. The RTC further opined that under the
circumstances, in order for respondents property rights to be
preserved,petitionersactsofmanufacturingsimilarplasticmade
automotivepartssuchasthoseofrespondentsandthesellingof
the sameproducts to respondents customers, which it cultivated
overtheyears,willhavetobeenjoined.Thedispositiveportionof
thedecisionreads:
WHEREFORE,premisesconsidered,thecourtfindsthedefendant
liable to plaintiff Two Million (P2,000,000.00) Pesos, as actual
damages, One Hundred Thousand (P100,000.00) Pesos as
attorneysfeesandOneHundredThousand(P100,000.00)Pesos
for exemplarydamages. The courthereby permanently[enjoins]
defendantfrommanufacturingtheplasticmadeautomotivepartsas
thosemanufacturedbyplaintiffs.
29
SOORDERED.4
Thus,petitionerappealedtotheCA.
Onappeal,petitionerassertsthatifthereisnointellectualproperty
protecting a good belonging to another,the copying thereof for
productionandsellingdoesnotadduptounfaircompetitionas
competitionispromotedbylawtobenefitconsumers. Petitioner
furthercontendsthatitdidnotlureawayrespondentsemployees
togettradesecrets.Itpointsoutthattheplasticsparepartssoldby
respondentaretradedinthemarketandthecopyingofthesecanbe
donebysimplybuyingasampleforamoldtobemade.
Conversely, respondent averred that copyright and patent
registrations are immaterial for an unfair competition case to
prosper under Article 28 of the Civil Code. It stresses that the
characteristicsofunfaircompetitionarepresentintheinstantcase
asthepartiesaretraderivalsandpetitionersactsarecontraryto
good conscience for deliberately copying its products and
employingitsformeremployees.
In a Decision dated November 24,2010, the CA affirmed with
modification the ruling of the RTC. Relevant portions of said
decisionread:
DespitetheevidenceshowingthatWillawaretookdishoneststeps
inadvancingitsbusinessinterestagainstJesichris, however, the
CourtfindsnobasisfortheawardbytheRTCofactualdamages.
One is entitled to actual damages as one has duly proven. The
testimonyofQuejada,whowasengagedbyJesichrisin2001to
audit its business, only revealed that there was a discrepancy
betweenthesalesofJesichrisfrom2001to2002.Noamountwas
mentioned.AsforExhibit"Q,"whichisacopyofthecomparative
incomestatementofJesichrisfor19992002,itshowsthedecline
ofthesalesin2002incomparisonwiththosemadein2001butit
doesnotdiscloseifthispertainstothesubjectautomotivepartsor
totheotherproductsofJesichrislikeplates.
Inanyevent,itwasclearlyshownthattherewasunfaircompetition
onthepartofWillawarethatprejudicedJesichris.Itisonlyproper
thatnominaldamagesbeawardedintheamountofTwoHundred
ThousandPesos(P200,000.00)inordertorecognizeandvindicate
Jesichris rights. The RTCs award of attorneys fees and
exemplarydamagesisalsomaintained.
xxxx
WHEREFORE,premisesconsidered,theDecisiondatedApril15,
2003oftheRegionalTrialCourtofCaloocanCity,Branch131,in
CivilCaseNo.C19771isherebyMODIFIED.TheawardofTwo
MillionPesos(P2,000,000.00)actualdamagesisdeletedandinits
place,TwoHundredThousandPesosnominaldamagesisawarded.
SOORDERED.5
Dissatisfied, petitioner moved for reconsideration. However, the
samewasdeniedforlackofmeritbytheCAinaResolutiondated
February10,2011.
Hence,thepresentPetitionforReviewwhereinpetitionerraisesthe
followingissuesforourresolution:
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
(1) Whether or not there is unfair competition under
humanrelationswhenthepartiesarenotcompetitorsand
thereisactuallynodamageonthepartofJesichris?
(2) Consequently, if there is no unfair competition,
shouldtherebemoraldamagesandattorneysfees?
(3)Whetherornottheadditionofnominaldamagesis
properalthoughnorightshavebeenestablished?
(4)IfevertherightofJesichrisreferstoitscopyrighton
automotiveparts,shoulditbeconsideredinthelightof
thesaidcopyrightswereconsideredtobevoidbynoless
thanthisHonorableCourtinSCGRNo.161295?
(5)Iftherightinvolvedis"goodwill"thentheissueis:
whetherornotJesichrishasestablished"goodwill?"6
Inessence,theissueforourresolutionis:whetherornotpetitioner
committedactsamountingtounfaircompetitionunderArticle28of
theCivilCode.
Prefatorily,wewouldliketostressthattheinstantcasefallsunder
Article 28 of the Civil Code on humanrelations, and not unfair
competitionunderRepublicActNo.8293,7asthepresentsuitisa
damagesuitandtheproductsarenotcoveredbypatentregistration.
Afortiori,theexistenceofpatentregistrationisimmaterialinthe
presentcase.
Theconceptof"unfaircompetition"underArticle28isverymuch
broaderthanthatcoveredbyintellectualpropertylaws.Underthe
present article, which follows the extended concept of "unfair
competition"inAmericanjurisdictions,thetermcoversevencases
of discovery of trade secrets of a competitor, bribery of his
employees, misrepresentation of all kinds, interference with the
fulfillment of a competitors contracts, or any malicious
interferencewiththelattersbusiness.8
With that settled, we now come to the issue of whether or not
petitioner committed acts amounting tounfair competition under
Article28oftheCivilCode.
Wefindthepetitionbereftofmerit.
Article28oftheCivilCodeprovidesthat"unfaircompetitionin
agricultural, commercial or industrial enterprises or in labor
throughtheuseofforce,intimidation,deceit,machinationorany
otherunjust,oppressiveorhighhandedmethodshallgiverisetoa
rightofactionbythepersonwhotherebysuffersdamage."
From the foregoing, it is clear thatwhat is being sought to be
preventedisnotcompetitionpersebuttheuseofunjust,oppressive
orhighhandedmethodswhichmaydepriveothersofafairchance
to engage in business or to earn a living. Plainly,what the law
prohibits is unfair competition and not competition where the
meansusedarefairandlegitimate.
Inordertoqualifythecompetitionas"unfair,"itmusthavetwo
characteristics:(1)itmustinvolveaninjurytoacompetitorortrade
rival, and (2) it must involve acts which are characterized as
"contrary to good conscience," or "shocking to judicial
30
sensibilities,"orotherwiseunlawful;inthelanguageofourlaw,
theseincludeforce,intimidation,deceit,machinationoranyother
unjust, oppressive or highhanded method. The public injury or
interestisaminorfactor;theessenceofthematterappearstobea
privatewrongperpetratedbyunconscionablemeans.9
Here,bothcharacteristicsarepresent.
First, both parties are competitors or trade rivals, both being
engaged in the manufacture of plasticmade automotive parts.
Second,theactsofthepetitionerwereclearly"contrarytogood
conscience"aspetitioneradmittedhavingemployedrespondents
formeremployees, deliberately copied respondents products and
evenwenttotheextentofsellingtheseproductstorespondents
customers.10
Tobolsterthispoint,theCAcorrectlypointedoutthatpetitioners
hiringoftheformeremployeesofrespondentandpetitionersactof
copyingthesubjectplasticpartsofrespondentweretantamountto
unfaircompetition,viz.:
Thetestimoniesofthewitnessesindicatethat[petitioner]wasin
bad faith in competing with the business of
[respondent].1wphi1[Petitioners] acts can be characterized as
executed with mischievous subtle calculation. To illustrate, in
addition to the findings of the RTC, the Court observes that
[petitioner] is engaged in the production of plastic kitchenware
previoustoitsmanufacturingofplasticautomotivespareparts,it
engaged the services of the then mold setter and maintenance
operatorof[respondent],DeGuzman,whilehewasemployedby
thelatter.DeGuzmanwashiredby[petitioner]inordertoadjustits
machinery since quality plastic automotive spare parts were not
beingmade.ItbafflestheCourtwhy[petitioner]cannotrelyonits
ownmoldsetterandmaintenanceoperatortoremedyitsproblem.
[Petitioners] engagement of De Guzman indicates that it is
bankingonhisexperiencegainedfromworkingfor[respondent].
Another point we observe is that Yabut, who used to be a
warehouseanddeliverymanof[respondent],wasfiredbecausehe
was blamed of spying in favor of [petitioner]. Despite this
accusation,hedidnotgetangry.Lateron,heappliedforandwas
hired by [petitioner] for the same position he occupied with
[respondent].Thesesequenceofeventsrelatingtohisemployment
by[petitioner]issuspecttoolikethesituationwithDeGuzman.11
Thus,itisevidentthatpetitionerisengagedinunfaircompetitionas
shown by his act of suddenly shifting his business from
manufacturing kitchenwareto plasticmadeautomotive parts;his
luringtheemployeesoftherespondenttotransfertohisemploy
andtryingtodiscoverthetradesecretsoftherespondent.12
Moreover,whenapersonstartsanopposingplaceofbusiness,not
forthesakeofprofittohimself,butregardlessoflossandforthe
solepurposeofdrivinghiscompetitoroutofbusinesssothatlater
onhecantakeadvantageoftheeffectsofhismalevolentpurpose,
heisguiltyofwantonwrong.13Asaptlyobservedbythecourta
quo,thetestimonyofpetitionerswitnessesindicatethatitactedin
bad faith in competing with the business of respondent, to wit:
[Petitioner], thru its General Manager, William Salinas, Jr.,
admittedthatitwasneverengagedinthebusinessofplasticmade
automotivepartsuntilrecently,year2000:
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
Atty. Bautista: The business name of Willaware Product
Corporation is kitchenware, it is (sic) not? Manufacturer of
kitchenwareanddistributorofkitchenware,isitnot?Mr.Salinas:
Yes, sir. Atty. Bautista: And you said you have known the
[respondent]JesichrisManufacturingCo.,youhaveknownittobe
manufacturingplasticautomotiveproducts,isitnot?Mr.Salinas:
Yes, sir. Atty. Bautista: In fact, you have been (sic) physically
becomefamiliarwiththeseproducts,plasticautomotiveproductsof
Jesichris?Mr.Salinas:Yes,sir.
How[petitioner]wasabletomanufacturethesameproducts, in
terms of color, size, shape and composition as those sold by
Jesichris was due largely to the sudden transfer ofJesichris
employeestoWillaware.
Atty.Bautista:SincewhenhaveyoubeenfamiliarwithJesichris
ManufacturingCompany?
Mr.Salinas:Sincetheytransferredthere(sic)ourplace.
Atty.Bautista:Andthatwasinwhatyear?Mr.Salinas:Maybefour
(4)years.Idontknowtheexactdate.
Atty. Bautista: And some of the employees of Jesichris
ManufacturingCo.havetransferredtoyourcompany,isitnot?
Mr.Salinas:Yes,sir.
Atty.Bautista:Howmany,moreorless?
Mr.Salinas:Moreorless,three(3).
Atty.Bautista:Andwhen,inwhatyearormonthdidtheytransfer
toyou?
Mr.Salinas:First,November1.
Atty.Bautista:Year2000?
Mr.Salinas:Yessir.AndthentheothermaybeFebruary,thisyear.
Andtheotherone,justonemonthago.
That[petitioner]wasclearlyouttotake[respondent]outofbusiness
was buttressed by the testimony of [petitioners] witness, Joel
Torres:
Q: Are you familiar with the [petitioner], Willaware Product
Corporation?
A:Yes,sir.
Q:Willyoukindlyinformthiscourtwhereistheofficeofthis
WillawareProductCorporation(sic)?
A:AtMithiStreet,CaloocanCity,sir.
Q:AndMr.Witness,sometimesecondSaturdayofJanuary2001,
willyoukindlyinformthiscourtwhatunusualeven(sic)transpired
betweenyouandMr.Salinasonsaiddate?
31
A:Therewas,sir.
Q:Whatisthat?
A:Sir,Iwaswalkingatthattimetogetherwithmywifegoingto
themarketandthenIpassedbytheplacewheretheywerehavinga
drinkingspree,sir.
Q:Youmentionedthey,whoweretheywhoweredrinkingatthat
time?
A:IknowoneJunMolina,sir.
Q:Andwhoelsewasthere?
A:WilliamSalinas,sir.
Q:Andwillyoukindlyinformuswhathappenedwhenyouspotted
uponthemdrinking?
A:JunMolinacalledme,sir.
Q:Andwhathappenedafterthat?
A:Atthattime,heofferedmeaglassofwineandbeforeIwasable
todrinkthewine,Mr.Salinasutteredsomething,sir.
Q:AndwhatwerethosewordsutteredbyMr.Salinastoyou?
A:"O,anonaapektuhannakayosaginaya(sic)kosainyo?"
Q:Andwhatdidyoudoafterthat,afterhearingthosewords?
A: And he added these words, sir. "sabihin mo sa amo mo,
dalawangtaonnalangpababagsakinkonasiya."
Q: Alright, hearing those words, will you kindly tell this court
whomdidyougathertobereferredtoasyour"amo"?
A:Mr.JessieChing,sir.14
Insum,petitionerisguiltyofunfaircompetitionunderArticle28
oftheCivilCode.
However,sincetheawardofTwoMillionPesos(P2,000,000.00)in
actualdamageshadbeendeletedandinitsplaceTwoHundred
ThousandPesos(P200,000.00)innominaldamagesisawarded,the
attorney'sfeesshouldconcomitantlybemodifiedandloweredto
FiftyThousandPesos(P50,000.00).
MOLAER,AIRISAD.|LAWONINTELLECTUALPROPERTY
WHEREFORE, the instant petition is DENIED. The Decision
datedNovember24,2010andResolutiondatedFebruary10,2011
of the Court of Appeals in CAG.R. CV No. 86744 are hereby
AFFIRMED with MODIFICATION that the award of attorney's
feesbeloweredtoFiftyThousandPesos(P50,000.00).
SOORDERED.
12. TradeNameorBusinessName
Tradenamethenameordesignationidentifyingordistinguishing
anenterprise;itisalsoknownasbusinessidentifier
NamesThatCannotbeUsedasaTradeName
Anameordesignationmaynotbeusedasatradenameifbyits
natureortheusetowhichsuchnameordesignationmaybeput,it
iscontrarytopublicorderormoralsandif,inparticular,itisliable
to deceive trade circles or the public as to the nature of the
enterpriseidentifiedbythatname.
ProtectedEvenWithoutRegistration
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
unlawfulactcommittedbythirdparties.
b. Inparticular,anysubsequentuseofthetradenamebyathird
party,whetherasatradenameoramarkorcollectivemark,or
anysuchuseofasimilartradenameormark,likelytomislead
thepublic,shallbedeemedunlawful.
165.3. The remedies provided for in Sections 153 to 156 and
Sections166and167shallapplymutatismutandis.
165.4.Anychangeintheownershipofatradenameshallbemade
withthetransferoftheenterpriseorpartthereofidentifiedbythat
name. The provisionsof Subsections149.2to 149.4 shallapply
mutatismutandis.
13. CollectiveMarks
Collective mark is also defined by the law as any visible sign
designatedassuchintheapplicationforregistrationandcapableof
distinguishing the origin or any other common characteristic,
includingthequalityofgoodsorservicesofdifferententerprises
whichusethesignunderthecontroloftheregisteredownerofthe
collectivemark.
14. Cases
32