PHILIP MORRIS, INC. VS.

FORTUNE TOBACCO CORPORATION (Equal Standing of International Law and Municipal

Law)

Penned by: GARCIA, J.:

Petition for review under Rule 45 of the Rules of Court, petitioners Philip Morris, Inc., Benson & Hedges (Canada) Inc., and
Fabriques de Tabac Reunies, S.A. (now Philip Morris Products S.A.) seek the reversal and setting aside of the following issuances
of the Court of Appeals (CA) in CA-G.R. CV No. 66619: PETITION DENIED

1. Decision dated January 21, 20031 affirming an earlier decision of the Regional Trial Court of Pasig City, Branch 166, in its Civil
Case No. 47374
 Dismissed the complaint for trademark infringement and damages thereat commenced by the petitioners against
respondent Fortune Tobacco Corporation; and
2. Resolution dated May 30, 20032 denying petitioners’ motion for reconsideration.

FACTS OF THE CASE:

 Petitioner Philip Morris, Inc., a corporation (State of Virginia, U.S.A), is the registered owner of the trademark “MARK
VII” for cigarettes. (per Certificate of Registration No. 18723 issued on April 26, 1973 by the Philippine Patents Office
(PPO)
 Similarly, petitioner Benson & Hedges (Canada), Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the
trademark “MARK TEN” for cigarettes (PPO Certificate of Registration No. 11147)
 Fabriques de Tabac Reunies, S.A. (Swiss company), another subsidiary of Philip Morris, Inc., is the assignee of the
trademark “LARK,” (Trademark Certificate of Registration No. 19053) (originally registered in 1964 by Ligget and Myers
Tobacco Company)
 Respondent Fortune Tobacco Corporation, a company organized in the Philippines, manufactures and sells cigarettes
using the trademark “MARK.”

 Petitioners, on the claim that an infringement of their respective trademarks had been committed, filed, on August 18, 1982, a
Complaint for Infringement of Trademark and Damages against respondent Fortune Tobacco Corporation, docketed as
Civil Case No. 47374 of the Regional Trial Court of Pasig, Branch 166.
The decision under review summarized what happened next, as follows:
o Prayer for the issuance of a preliminary injunction, [petitioners] alleged that they are foreign corporations not doing
business in the Philippines and are suing on an isolated transaction.
o Countries in which they are domiciled grant to corporate or juristic persons of the Philippines the privilege to bring
action for infringement, without need of a license to do business in those countries.
o [Petitioners] likewise manifested [being registered owners of the trademark “MARK VII” and “MARK TEN”
o registered the trademarks in their respective countries of origin
 by virtue of the long and extensive usage of the same, these trademarks have already gained international
fame and acceptance
 [respondent], without any previous consent from any of the [petitioners], manufactured and sold cigarettes
bearing the identical and/or confusingly similar trademark “MARK”
 have caused and is likely to cause confusion or mistake, or would deceive purchasers and the public in
general into buying these products under the impression and mistaken belief that they are buying
[petitioners’] products.
o Invoked provisions of the Paris Convention for the Protection of Industrial and Intellectual Property (Paris
Convention)
o Philippines is a signatory, [petitioners] pointed out that upon the request of an interested party, a country of the
Union may prohibit the use of a trademark which constitutes a reproduction, imitation, or translation of a mark
already belonging to a person entitled to the benefits of the said Convention. In accordance with Section 21-A in
relation to Section 23 of Republic Act 166, as amended, they are entitled to relief in the form of damages [and] the
issuance of a writ of preliminary injunction which should be made permanent.
o [Respondent] filed its Answer denying [petitioners’] material allegations and averred [among other things] that
“MARK” is a common word, which cannot particularly identify a product to be the product of the [petitioners]
o After the termination of the trial on the merits trial court rendered its Decision dated November 3, 1999 dismissing the
complaint and counterclaim after making a finding that the [respondent] did not commit trademark infringement against the
[petitioners].
o The issue of whether or not there was infringement of the [petitioners’] trademarks by the [respondent] was
likewise answered in the negative. It expounded that “in order for a name, symbol or device to constitute a trademark, it
must, either by itself or by association, point distinctly to the origin or ownership of the article to which it is applied and be of
such nature as to permit an exclusive appropriation by one person”.
  Maintaining to have the standing to sue in the local forum and that respondent has committed trademark infringement,
petitioners went on appeal to the CA. (Appellate recourse docket CA-G.R. CV No. 66619)
o CA decision on January 21, 2003 (while ruling for petitioners on the matter of their legal capacity to sue in this
country for trademark infringement) affirmed the trial court’s decision on the underlying issue of respondent’s
liability for infringement.
 Motion for reconsideration denied by the CA (Resolution of May 30, 2003)

ISSUES
 Petitioners seek petition for review (Court of Appeals):
o (1) whether or not petitioners, as Philippine registrants of trademarks, are entitled to enforce trademark
rights in this country;
o (2) whether or not respondent has committed trademark infringement against petitioners by its use of the mark
“MARK” for its cigarettes, hence liable for damages.

 Respondent: issue the propriety of the petition as it allegedly raises questions of fact.
 The petition is bereft of merit.
 Petition raises both questions of fact and law
o question of law exists when the doubt or difference arises as to what the law is on a certain state of facts
o question of fact when the doubt or difference arises as to the truth or falsity of alleged facts
 Court is not the proper venue to consider factual issues as it is not a trier of facts
 Unless the factual findings of the appellate court are mistaken, absurd, speculative, conflicting, tainted with
grave abuse of discretion, or contrary to the findings culled by the court of origin, we will not disturb them
 Petitioners: contentions should be treated as purely legal since they are assailing erroneous conclusions deduced from a set
of undisputed facts

 A “trademark” is any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof adopted and
used by a manufacturer or merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt in
by others.
o A trademark deserves protection.

PETITIONER:
 Petitioners assert that, as corporate nationals of member-countries of the Paris Union, they can sue before Philippine
courts for infringement of trademarks, or for unfair competition, without need of obtaining registration or a license to do
business in the Philippines, and without necessity of actually doing business in the Philippines.
o Right and mechanism are accorded by
 Section 21-A of Republic Act (R.A.) No. 166 or the Trademark Law, as amended
 Article 2 of the Paris Convention for the Protection of Industrial Property, aka Paris Convention.
 Not doing business in the Philippines does not mean that cigarettes bearing their trademarks are not available and sold
locally. Citing Converse Rubber Corporation v. Universal Rubber Products, Inc., such availability and sale may be
effected through the acts of importers and distributors.
 Entitlement to protection even in the absence of actual use of trademarks in the country
o Philippines’ adherence to the Trade Related Aspects of Intellectual Property Rights or the TRIPS Agreement
o enactment of R.A. No. 8293, or the Intellectual Property Code (“IP Code”)
o fame of a trademark may be acquired through promotion or advertising with no explicit requirement of actual use in
local trade or commerce

 Before discussing petitioners’ claimed entitlement to enforce trademark rights in the Philippines, it must be emphasized that
their standing to sue in Philippine courts had been recognized, and rightly so, by the CA
o such right to sue does not necessarily mean protection of their registered marks in the absence of actual use in
the Philippines.

Thus clarified, what petitioners now harp about is their entitlement to protection on the strength of registration of their
trademarks in the Philippines.

HELD/RATIO:

As we ruled in G.R. No. 91332,18 :

1. RECIPROCITY REQUIREMENT
  Registration of a trademark gives the registrant (petitioners) advantages denied non-registrants or ordinary users
(respondent)
o validity of the registration
o ownership and the exclusive right to use the registered marks
 they may not successfully sue on the basis alone of their respective certificates of registration of trademarks.
o Petitioners: still foreign corporations
o condition to availment of the rights and privileges & their trademarks in this country:
 On top of Philippine registration, their country grants substantially similar rights and privileges to
Filipino citizens pursuant to Section 21-A20 of R.A. No. 166.
 In Leviton Industries v. Salvador
o Court: reciprocity requirement is a condition sine qua non to filing a suit by a foreign corporation
 Unless alleged in the complaint, would justify dismissal
o complainant is a national of a Paris Convention- adhering country, its allegation that it is suing under said
Section 21-A would suffice, because the reciprocal agreement between the two countries is embodied and
supplied by the Paris Convention
 being considered part of Philippine municipal laws, can be taken judicial notice of in infringement
suits.

2. REGISTRATION VERSUS ACUAL USE!!

 members of the Paris Union does not automatically entitle petitioners to the protection of their trademarks in this
country ABSENT ACTUAL USE OF THE MARKS IN LOCAL COMMERCE AND TRADE.

 Philippines’ adherence to the Paris Convention effectively obligates the country to honor and enforce its provisions( as
regards the protection of industrial property of foreign nationals in this country)
o However, any protection accorded has to be made subject to the limitations of Philippine laws.
o Hence, despite Article 2 of the Paris Convention which substantially provides that:
 (1) nationals of member-countries shall have in this country rights specially provided by the Convention as
are consistent with Philippine laws, and enjoy the privileges that Philippine laws now grant or may
hereafter grant to its national
 (2) while no domicile requirement in the country where protection is claimed shall be required of persons
entitled to the benefits of the Union for the enjoyment of any industrial property rights
 foreign nationals must still observe and comply with the conditions imposed by Philippine law on its
nationals.

 R.A. No. 166 (as amended, specifically Sections 228 and 2-A29), mandates actual use of the marks and/or emblems in
local commerce and trade before they may be registered and ownership thereof acquired
o the petitioners cannot, therefore, dispense with the element of actual use.
o Their being nationals of member-countries of the Paris Union does not alter the legal situation.

 In Emerald Garment Mfg. Corporation v. Court of Appeals, the Court reiterated its rulings in Sterling Products International,
Inc. v. Farbenfabriken Bayer Aktiengesellschaft, Kabushi Kaisha Isetan v. Intermediate Appellate Court, and Philip Morris v.
Court of Appeals and Fortune Tobacco Corporation on the importance of ACTUAL COMMERCIAL USE OF A
TRADEMARK in the Philippines notwithstanding the Paris Convention:
o The provisions of the 1965 Paris Convention … relied upon by private respondent and Sec. 21-A of the
Trademark Law were sufficiently expounded upon and qualified in the recent case of Philip Morris, Inc., et. al.
vs. Court of Appeals:
 Following universal acquiescence and comity, our municipal law on trademarks regarding the requirements
of actual use in the Philippines must subordinate an international agreement inasmuch as the apparent
clash is being decided by a municipal tribunal.
 Withal, the fact that international law has been made part of the law of the land does NOT by any means
imply the primacy of international law over national law in the municipal sphere.
 Under the DOCTRINE OF INCORPORATION as applied in most countries, rules of International
Law are given a standing EQUAL, not superior, to national legislative enactments.
 A foreign corporation) may have the capacity to sue for infringement … but whether they have an exclusive
right over their symbol as to justify issuance of the controversial writ will depend on actual use of their
trademarks in the Philippines in line with Sections 2 and 2-A of the same law.
 It is thus incongruous for petitioners to claim that when a foreign corporation not licensed to do business
in the Philippines files a complaint for infringement, the entity need not be actually using its trademark in
commerce in the Philippines.
  Such a foreign corporation may have the personality to file a suit for infringement but it may not
necessarily be entitled to protection due to absence of actual use of the emblem in the local market.

 Registration of trademark cannot be deemed conclusive as to the actual use of such trademark in local commerce.
o registration does not confer upon the registrant an absolute right to the registered mark.
o merely constitutes prima facie evidence that the registrant is the owner of the registered mark.
o Evidence of non-usage of the mark rebuts the presumption of trademark ownership
 We stress that registration in the Philippines of trademarks does not ipso facto convey an absolute right or exclusive
ownership thereof.
o Shangri-La International Hotel Management, Ltd. v. Development Group of Companies, Inc.
 Trademark is a creation of use
 Actual use is a pre-requisite to exclusive ownership
 Registration is only an administrative confirmation of the existence of the right of ownership of the mark
 does not perfect such right; actual use thereof is the perfecting ingredient.

 Petitioners’ reliance on Converse Rubber Corporation is quite misplaced

o different factual milieu
o foreign owner of a Philippine trademark, albeit not licensed to do, and not so engaged in, business in the
Philippines, may actually earn reputation or goodwill for its goods in the country.
o But unlike in the instant case, evidence of actual sales of Converse rubber shoes, such as sales invoices, receipts
and the testimony of a legitimate trader, was presented in Converse.
 This Court also finds the IP Code and the TRIPS Agreement to be inapplicable
o the infringement complaint filed in August 1982 and tried under the aegis of R.A. No. 166, as amended.
o The IP Code (January 1, 1998) no provision on retroactivity; TRIPS Agreement (December 16, 1994)
 registration of a trademark unaccompanied by actual use thereof in the country accords the registrant only the standing
to sue for infringement in Philippine courts. Entitlement to protection of such trademark in the country is entirely a
different matter.

ETEPHA, A.G., petitioner, vs. DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC.,
respondents .
(G.R. No. L-20635, March 31, 1966)

FACTS:
Respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of trademark "Atussin" placed on
its "medicinal preparation of expectorant antihistaminic, bronchodilator sedative, ascorbic acid (Vitamin C) used in the
treatment of cough". The trademark is used exclusively in the Philippines since January 21, 1959.
Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected claiming that it will be damaged because Atussin
is so confusedly similar to its Pertussin used on a preparation for the treatment of coughs, that the buying public will be
misled into believing that Westmont's product is that of petitioner's which allegedly enjoys goodwill.
The Director of Patents ruled that the trademark ATUSSIN may be registered even though PERTUSSIN had been previously
registered from the same office, hence, this appeal.

ISSUE: Whether or not ATUSSIN may be registered?

HELD:
We are to be guided by the rule that the validity of a cause for infringement is predicated upon colorable imitation. The
phrase "colorable imitation" denotes such a "close or ingenious imitation as to be calculated to deceive ordinary persons, or
such a resemblance to the original as to deceive an ordinary purchaser, giving such attention as a purchaser usually gives, and
to cause him to purchase the one supposing it to be the other.
A practical approach to the problem of similarity or dissimilarity is to go into the whole of the two trademarks pictured in
their manner of display. Inspection should be undertaken from the viewpoint of a prospective buyer. Confusion is likely
between trademarks, however, only if their over-all presentations in any of the particulars of sound, appearance, or meaning
are such as would lead the purchasing public into believing that the products to which the marks are applied emanated from
the same source.
We concede the possibility that buyers might be able to obtain Pertussin or Attusin without prescription. When this happens,
then the buyer must be one thoroughly familiar with what he intends to get, else he would not have the temerity to ask for a
medicine — specifically needed to cure a given ailment. In which case, the more improbable it will be to palm off one for the
other. For a person who purchases with open eyes is hardly the man to be deceived.
For the reasons given, the appealed decision of the respondent Director of Patents — giving due course to the application for
the registration of trademark ATTUSIN is hereby affirmed. Cost against petitioner. So ordered.
Asia Brewery, Inc. v. Court of Appeals, G.R. No. 103543, 5 July 1993

ASIA BREWERY, INC. vs. THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION
G.R. 103543 July 5, 1993

Facts:

San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark and unfair
competition on account of the latter's BEER PALE PILSEN or BEER NA BEER product which has been competing with
SMC's SAN MIGUEL PALE PILSEN for a share of the local beer market.

The trial court dismissed SMC's complaint because ABI "has not committed trademark infringement or unfair competition
against" SMC

On appeal by SMC, the Court of Appeals reversed the decision rendered by the trial court, finding the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark and unfair competition. ABI then filed a petition for certiorari.

Issue:

Are the words PALE PILSEN as part of ABI’s trademark constitute infringement of SMC’s trademark?

Ruling:

No. The Supreme Court said it does not constitute an infringement as the words PALE PILSEN, which are part of ABI’s
trademark, are generic words descriptive of the color (“pale“), of a type of beer (“pilsen”), which is a light bohemian beer
with a strong hops flavor that originated in the City of Pilsen, Czechislovakia and became famous in the Middle Ages.

The Supreme Court further said that the words "pale pilsen" may not be appropriated by SMC for its exclusive use even if
they are part of its registered trademark. No one may appropriate generic or descriptive words. They belong to the public
domain.

Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with the latter's SAN MIGUEL
PALE PILSEN product.

Societe des produits Nestle, S.A. V Court of Appeals; GR No. 112012; April 4, 2001

In 1984, CFC Corporation filed with the Bureau of Patents, Trademarks, and Technology Transfers an
application for the registration of its trademark “Flavor Master” – an instant coffee. Nestle opposed the
application as it alleged that “Flavor Master” is confusingly similar to Nestle coffee products like
Master Blend and Master Roast. Nestle alleged that in promoting their products, the word Master has
been used so frequently so much so that when one hears the word Master it connotes to a Nestle
product. They provided as examples the fact that they’ve been using Robert Jaworski and Ric Puno
Jr. as their commercial advertisers; and that in those commercials Jaworski is a master of basketball
and that Puno is a master of talk shows; that the brand of coffee equitable or fit to them is Master
Blend and Master Roast. CFC Corporation on the other hand alleged that the word “Master” is a
generic and a descriptive term, hence not subject to trademark. The Director of Patents ruled in favor
of Nestle but the Court of Appeals, using the Holistic Test, reversed the said decision.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. The proper test that should have been used is the Dominancy Test. The application of the
totality or holistic test is improper since the ordinary purchaser would not be inclined to notice the
specific features, similarities or dissimilarities, considering that the product is an inexpensive and
common household item. The use of the word Master by Nestle in its products and commercials has
made Nestle acquire a connotation that if it’s a Master product it is a Nestle product. As such, the use
by CFC of the term “MASTER” in the trademark for its coffee product FLAVOR MASTER is likely to
cause confusion or mistake or even to deceive the ordinary purchasers.
In addition, the word “MASTER” is neither a generic nor a descriptive term. As such, said term can
not be invalidated as a trademark and, therefore, may be legally protected.
Generic terms are those which constitute “the common descriptive name of an article or substance,”
or comprise the “genus of which the particular product is a species,” or are “commonly used as the
name or description of a kind of goods,” or “imply reference to every member of a genus and the
exclusion of individuating characters,” or “refer to the basic nature of the wares or services provided
rather than to the more idiosyncratic characteristics of a particular product,” and are not legally
protectable.
On the other hand, a term is descriptive and therefore invalid as a trademark if, as understood in its
normal and natural sense, it “forthwith conveys the characteristics, functions, qualities or ingredients
of a product to one who has never seen it and does not know what it is,” or “if it forthwith conveys an
immediate idea of the ingredients, qualities or characteristics of the goods,” or if it clearly denotes
what goods or services are provided in such a way that the consumer does not have to exercise
powers of perception or imagination.
Rather, the term “MASTER” is a suggestive term brought about by the advertising scheme of Nestle.
Suggestive terms are those which, in the phraseology of one court, require “imagination, thought and
perception to reach a conclusion as to the nature of the goods.” Such terms, “which subtly connote
something about the product,” are eligible for protection in the absence of secondary meaning. While
suggestive marks are capable of shedding “some light” upon certain characteristics of the goods or
services in dispute, they nevertheless involve “an element of incongruity,” “figurativeness,” or ”
imaginative effort on the part of the observer.”

McDonald's Corporation v. L.C. Big Mak Burger, Inc.

MCDONALD'S CORPORATION and MCGEORGE FOOD INDUSTRIES, INC., petitioners, vs. L.C. BIG MAK
BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B. DY, WILLIAM B. DY, JESUS AYCARDO, ARACELI
AYCARDO, and GRACE HUERTO, respondents.

G.R. No. 143993, August 18, 2004.

CARPIO, J.:

Petitioner McDonald's Corporation ("McDonald's") is a US corporation that operates a global chain of fast-food
restaurants, with Petitioner McGeorge Food Industries ("McGeorge"), as the Philippine franchisee.

McDonald's owns the "Big Mac" mark for its "double-decker hamburger sandwich." with the US Trademark Registry
on 16 October 1979.

Based on this Home Registration, McDonald's applied for the registration of the same mark in the Principal Register
of the then Philippine Bureau of Patents, Trademarks and Technology ("PBPTT") (now IPO). On 18 July 1985, the
PBPTT allowed registration of the "Big Mac."

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food outlets and snack vans in
Metro Manila and nearby provinces. Respondent corporation's menu includes hamburger sandwiches and other
food items.

On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the "Big Mak" mark for
its hamburger sandwiches, which was opposed by McDonald's. McDonald's also informed LC Big Mak chairman of
its exclusive right to the "Big Mac" mark and requested him to desist from using the "Big Mac" mark or any similar
mark.

Having received no reply, petitioners sued L.C. Big Mak Burger, Inc. and its directors before Makati RTC Branch 137
("RTC"), for trademark infringement and unfair competition.

RTC rendered a Decision finding respondent corporation liable for trademark infringement and unfair competition.
CA reversed RTC's decision on appeal.

1ST ISSUE:W/N respondent corporation is liable for trademark infringement and unfair competition.

Ruling: Yes
Section 22 of Republic Act No. 166, as amended, defines trademark infringement as follows:
Infringement, what constitutes. - Any person who [1] shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in connection with the
sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is
likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or [2] reproduce, counterfeit, copy, or colorably imitate any such mark or
trade-name and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or
services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided.
To establish trademark infringement, the following elements must be shown: (1) the validity of plaintiff's mark; (2) the
plaintiff's ownership of the mark; and (3) the use of the mark or its colorable imitation by the alleged infringer results
in "likelihood of confusion." Of these, it is the element of likelihood of confusion that is the gravamen of trademark
infringement.

1st element:

A mark is valid if it is distinctive and not merely generic and descriptive.

The "Big Mac" mark, which should be treated in its entirety and not dissected word for word, is neither generic nor
descriptive. Generic marks are commonly used as the name or description of a kind of goods, such as "Lite" for
beer. Descriptive marks, on the other hand, convey the characteristics, functions, qualities or ingredients of a
product to one who has never seen it or does not know it exists, such as "Arthriticare" for arthritis medication. On the
contrary, "Big Mac" falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual
characteristics of the product it represents. As such, it is highly distinctive and thus valid.

2nd element:

Petitioners have duly established McDonald's exclusive ownership of the "Big Mac" mark. Prior valid registrants of
the said mark had already assigned his rights to McDonald's.

3rd element:

Section 22 covers two types of confusion arising from the use of similar or colorable imitation marks, namely,
confusion of goods (confusion in which the ordinarily prudent purchaser would be induced to purchase one product
in the belief that he was purchasing the other) and confusion of business (though the goods of the parties are
different, the defendant's product is such as might reasonably be assumed to originate with the plaintiff, and the
public would then be deceived either into that belief or into the belief that there is some connection between the
plaintiff and defendant which, in fact, does not exist).

There is confusion of goods in this case since respondents used the "Big Mak" mark on the same goods, i.e.
hamburger sandwiches, that petitioners' "Big Mac" mark is used.

There is also confusion of business due to Respondents' use of the "Big Mak" mark in the sale of hamburgers, the
same business that petitioners are engaged in, also results in confusion of business. The registered trademark
owner may use his mark on the same or similar products, in different segments of the market, and at different price
levels depending on variations of the products for specific segments of the market. The registered trademark owner
enjoys protection in product and market areas that are the normal potential expansion of his business.

Furthermore, In determining likelihood of confusion, the SC has relied on the dominancy test (similarity of the
prevalent features of the competing trademarks that might cause confusion) over the holistic test (consideration of
the entirety of the marks as applied to the products, including the labels and packaging).

Applying the dominancy test, Respondents' use of the "Big Mak" mark results in likelihood of confusion. Aurally the
two marks are the same, with the first word of both marks phonetically the same, and the second word of both
marks also phonetically the same. Visually, the two marks have both two words and six letters, with the first word of
both marks having the same letters and the second word having the same first two letters.

Lastly, since Section 22 only requires the less stringent standard of "likelihood of confusion," Petitioners' failure to
present proof of actual confusion does not negate their claim of trademark infringement.

2ND ISSUE: W/N Respondents committed Unfair Competition

Ruling: Yes.
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
Any person who will employ deception or any other means contrary to good faith by which he shall pass off the
goods manufactured by him or in which he deals, or his business, or services for those of the one having
established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
The essential elements of an action for unfair competition are (1) confusing similarity in the general appearance of
the goods, and (2) intent to deceive the public and defraud a competitor.

In the case at bar, Respondents have applied on their plastic wrappers and bags almost the same words that
petitioners use on their styrofoam box. Further, Respondents' goods are hamburgers which are also the goods of
petitioners. Moreover, there is actually no notice to the public that the "Big Mak" hamburgers are products of "L.C.
Big Mak Burger, Inc." This clearly shows respondents' intent to deceive the public.

LYCEUM OF THE PHILIPPINES, INC., petitioner, vs. COURT OF APPEALS, ET. AL., respondents.

FACTS:

Petitioner is an educational institution duly registered with the Securities and Exchange Commission ("SEC"). When it first registered
with the SEC on 21 September 1950, it used the corporate name Lyceum of the Philippines, Inc. and has used that name ever since.

On 24 February 1984, petitioner instituted proceedings before the SEC to compel the private respondents, which are also educational
institutions, to delete the word "Lyceum" from their corporate names and permanently to enjoin them from using "Lyceum" as part
of their respective names.

Petitioner had sometime before commenced in the SEC a proceeding (SEC-Case No. 1241) against the Lyceum of Baguio, Inc. to
require it to change its corporate name and to adopt another name not "similar [to] or identical" with that of petitioner. In an Order
dated 20 April 1977, Associate Commissioner Julio Sulit held that the corporate name of petitioner and that of the Lyceum of Baguio,
Inc. were substantially identical because of the presence of a "dominant" word, i.e., "Lyceum," the name of the geographical location
of the campus being the only word which distinguished one from the other corporate name. The SEC also noted that petitioner had
registered as a corporation ahead of the Lyceum of Baguio, Inc. in point of time, 1 and ordered the latter to change its name to
another name "not similar or identical [with]" the names of previously registered entities.

The Lyceum of Baguio, Inc. assailed the Order of the SEC before the Supreme Court in a case docketed as G.R. No. L-46595. In a
Minute Resolution dated 14 September 1977, the Court denied the Petition for Review for lack of merit. Entry of judgment in that
case was made on 21 October 1977.

With the Resolution of the Court in G.R. No. L-46595, petitioner then wrote all the educational institutions it could find using the
word "Lyceum" as part of their corporate name, and advised them to discontinue such use of "Lyceum." When, with the passage of
time, it became clear that this recourse had failed, petitioner instituted before the SEC SEC-Case No. 2579 to enforce what petitioner
claims as its proprietary right to the word "Lyceum." The SEC hearing officer rendered a decision sustaining petitioner's claim to an
exclusive right to use the word "Lyceum." The hearing officer relied upon the SEC ruling in the Lyceum of Baguio, Inc. case (SEC-Case
No. 1241) and held that the word "Lyceum" was capable of appropriation and that petitioner had acquired an enforceable exclusive
right to the use of that word.
On appeal, however, by private respondents to the SEC En Banc, the decision of the hearing officer was reversed and set aside. The
SEC En Banc did not consider the word "Lyceum" to have become so identified with petitioner as to render use thereof by other
institutions as productive of confusion about the identity of the schools concerned in the mind of the general public. Unlike its
hearing officer, the SEC En Banc held that the attaching of geographical names to the word "Lyceum" served sufficiently to distinguish
the schools from one another, especially in view of the fact that the campuses of petitioner and those of the private respondents
were physically quite remote from each other.

Petitioner then went on appeal to the Court of Appeals. In its Decision dated 28 June 1991, however, the Court of Appeals affirmed
the questioned Orders of the SEC En Banc. 4 Petitioner filed a motion for reconsideration.

ISSUE:

1. The Court of Appeals erred in holding that the word Lyceum has not acquired a secondary meaning in favor of petitioner.

RULING:

"SECTION 18. Corporate name. — No corporate name may be allowed by the Securities and Exchange Commission if the proposed
name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by
law or is patently deceptive, confusing or contrary to existing laws. When a change in the corporate name is approved, the
Commission shall issue an amended certificate of incorporation under the amended name." (Emphasis supplied)

The policy underlying the prohibition in Section 18 against the registration of a corporate name which is "identical or deceptively or
confusingly similar" to that of any existing corporation or which is "patently deceptive" or "patently confusing" or "contrary to
existing laws," is the avoidance of fraud upon the public which would have occasion to deal with the entity concerned, the evasion of
legal obligations and duties, and the reduction of difficulties of administration and supervision over corporations.

Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive appropriation with reference to an
article in the market, because geographical or otherwise descriptive might nevertheless have been used so long and so exclusively by
one producer with reference to this article that, in that trade and to that group of the purchasing public, the word or phrase has
come to mean that the article was his produce (Ana Ang vs. ToribioTeodoro, 74 Phil. 56). This circumstance has been referred to as
the distinctiveness into which the name or phrase has evolved through the substantial and exclusive use of the same for a
considerable period of time. Consequently, the same doctrine or principle cannot be made to apply where the evidence did not
prove that the business (of the plaintiff) has continued for so long a time that it has become of consequence and acquired a good will
of considerable value such that its articles and produce have acquired a well-known reputation, and confusion will result by the use
of the disputed name (by the defendant) .

We conclude and so hold that petitioner institution is not entitled to a legally enforceable exclusive right to use the word "Lyceum" in
its corporate name and that other institutions may use "Lyceum" as part of their corporate names. To determine whether a given
corporate name is "identical" or "confusingly or deceptively similar" with another entity's corporate name, it is not enough to
ascertain the presence of "Lyceum" or "Liceo" in both names. One must evaluate corporate names in their entirety and when the
name of petitioner is juxtaposed with the names of private respondents, they are not reasonably regarded as "identical" or
"confusingly or deceptively similar" with each other.

The decision of the Court of Appeals is affirmed and the petition for review is DENIED for lack of merit.

ANG V. TEODORO (G.R. NO. L-48226)

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

Issues:
(1) Whether or not ‘ANG TIBAY’ is a descriptive term not registrable.
(2) Whether or not the trademark ‘ANG TIBAY’ has acquired a secondary meaning.
(3) Whether or not there is trademark infringement and/or unfair competition between unrelated goods.

Ruling:
(1) NO. The phrase “Ang Tibay” is an exclamation denoting administration of strength or durability. For instance, one who
tries hard but fails to break an object exclaims, “Ang tibay!” (How strong!”) The phrase “ang tibay” is never used adjectively
to define or describe an object. One does not say, “ang tibay sapatos” or “sapatos ang tibay” is never used adjectively to
define or describe an object. One does not say, “ang tibay sapatos” or “sapatos ang tibay” to mean “durable shoes,” but
“matibay na sapatos” or “sapatos na matibay.” From all of this we deduce that “Ang Tibay” is not a descriptive term within
the meaning of the Trade-Mark Law but rather a fanciful or coined phrase which may properly and legally be appropriated as
a trademark or tradename. In this connection we do not fail to note that when the petitioner herself took the trouble and
expense of securing the registration of these same words as a trademark of her products she or her attorney as well as the
Director of Commerce was undoubtedly convinced that said words (Ang Tibay) were not a descriptive term and hence could
be legally used and validly registered as a trademark.
(2) NO. In view of the conclusion we have reached upon the first assignment of error, it is unnecessary to apply here the
doctrine of “secondary meaning” in trade-mark parlance. This doctrine is to the effect that a word or phrase originally
incapable of exclusive appropriation with reference to an article of the market, because geographically or otherwise
descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that,
in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product.
We have said that the phrase “Ang Tibay,” being neither geographic nor descriptive, was originally capable of exclusive
appropriation as a trade-mark. But were it not so, the application of the doctrine of secondary meaning made by the Court of
Appeals could nevertheless be fully sustained because, in any event, by respondent’s long and exclusive use of said phrase
with reference to his products and his business, it has acquired a proprietary connotation.
(3) YES. In the present state of development of the law on Trade-Marks, Unfair Competition, and Unfair Trading, the test
employed by the courts to determine whether noncompeting goods are or are not of the same class is confusion as to the
origin of the goods of the second user. Although two noncompeting articles may be classified under two different classes by
the Patent Office because they are deemed not to possess the same descriptive properties, they would, nevertheless, be held
by the courts to belong to the same class if the simultaneous use on them of identical or closely similar trade-marks would be
likely to cause confusion as to the origin, or personal source, of the second user’s goods. They would be considered as not
falling under the same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the purchaser
would think the first user made the second user’s goods. The Court of Appeals found in this case that by uninterrupted and
exclusive use since 1910 of respondent’s registered trade-mark on slippers and shoes manufactured by him, it has come to
indicate the origin and ownership of said goods. It is certainly not farfetched to surmise that the selection by petitioner of the
same trade-mark for pants and shirts was motivated by a desire to get a free ride on the reputation and selling power it has
acquired at the hands of the respondent.
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