NOTES ON IPC (RA 8293) – THE LAW ON TRADEMARKS

PART III - (SECTIONS 121 – 170)

The Law on Trademarks, Service Marks and Trade Names

What is a trademark?

Trademark means any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods; (Sec.
38, R.A. No. 166a)

In relation thereto, a trade name means the name or designation identifying or distinguishing an
enterprise (Kho vs. CA).

Thus, the basic requirements are:

1. There must be a visible sign. It can be words, acronyms, logos, slogans, designs, figures,
pictographs or portraits.
2. It must be capable of distinguishing the goods of an enterprise. (distinctiveness)

Collective mark - means any visible sign designated as such in the application for registration
and capable of distinguishing the origin or any other common characteristic, including the
quality of goods or services of different enterprises which use the sign under the control of the
registered owner of the collective mark; (Sec. 40, R.A. No. 166a)

What are the functions of trademarks?

1. To indicate the origin of the goods to which they are attached.
2. To guarantee the standard of the goods.
3. To advertise the goods (Mirpuri vs. CA).

How are marks acquired?

SECTION 122. How Marks are Acquired. — The rights in a mark shall be acquired through
registration made validly in accordance with the provisions of this law. (Sec. 2-A, R.A. No.
166a)
Prior use in the Philippines is not required before registration. However, there must be
actual use after registration.

124.2. The applicant or the registrant shall file a declaration of actual use of the mark with
evidence to that effect, as prescribed by the Regulations within three (3) years from the filing
date of the application. Otherwise, the application shall be refused or the mark shall be
removed from the Register by the Director.

SECTION 125. Representation; Address for Service. - If the applicant is not domiciled or has no
real and effective commercial establishment in the Philippines, he shall designate by a written
document filed in the Office, the name and address of a Philippine resident who may be served
notices or process in proceedings affecting the mark.

When the law states that the right is acquired from date of registration, it is actually
referring to the filing date of application.

SECTION 127. Filing Date. - 127.1. Requirements. - The filing date of an application shall be
the date on which the Office received the following indications and elements in English or
Filipino:

(a) An express or implicit indication that the registration of a mark is sought;

(b) The identity of the applicant;

(c) Indications sufficient to contact the applicant or his representative, if any;

(d) A reproduction of the mark whose registration is sought; and

(e) The list of the goods or services for which the registration is sought.

127.2. No filing date shall be accorded until the required fee is paid.

However, the right is also protected from the priority date when subject to the rules of
reciprocity.

SECTION 131. Priority Right. - 131.1. An application for registration of a mark filed in the
Philippines by a person referred to in Section 3, and who previously duly filed an application
for registration of the same mark in one of those countries, shall be considered as filed as of
the day the application was first filed in the foreign country.
131.2. No registration of a mark in the Philippines by a person described in this section shall be
granted until such mark has been registered in the country of origin of the applicant.

What are the rights conferred by registration?

SECTION 138. Certificates of Registration. - A certificate of registration of a mark shall be

prima facie evidence of the validity of the registration, the registrant’s ownership of the
mark, and of the registrant’s exclusive right to use the same in connection with the goods or
services and those that are related thereto specified in the certificate. (Sec. 20, R.A. No. 165)

Note:

1. The right to the mark is separate and distinct from the business using such mark (Sec.149,
IPC).
2. 2. The right of registration belongs to the owner of the mark (Unno Commercial
Enterprises, Inc. vs. General Milling Corp., G.R. No. L-28554, Feb. 28, 1983

SECTION 147. Rights Conferred. - 147.1. Except in cases of importation of drugs and medicines
allowed under Section 72.1 of this Act and of off-patent drugs and medicines, the owner of a
registered mark shall have the exclusive right to prevent all third parties not having the
owner’s consent from using in the course of trade identical or similar signs or containers
for goods or services which are identical or similar to those in respect of which the
trademark is registered where such use would result in a likelihood of confusion. In case of the
use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed.

Section 147.2. The exclusive right of the owner of a well-known mark defined in Subsection
123.1(e) which is registered in the Philippines, shall extend to goods and services which are
not similar to those in respect of which the mark is registered: Provided, That use of that
mark in relation to those goods or services would indicate a connection between those goods or
services and the owner of the registered mark: Provided, further, That the interests of the owner
of the registered mark are likely to be damaged by such use. (n)

What is the duration of the certificate of registration?

SECTION 145. Duration. - A certificate of registration shall remain in force for ten (10) years:
Provided, That the registrant shall file a declaration of actual use and evidence to that effect, or
shall show valid reasons based on the existence of obstacles to such use, as prescribed by the
Regulations, within one (1) year from the fifth anniversary of the date of the registration of
the mark. Otherwise, the mark shall be removed from the Register by the Office. (Sec. 12, R.A.
No. 166a)
SECTION 146. Renewal. - 146.1. A certificate of registration may be renewed for periods of
ten (10) years at its expiration upon payment of the prescribed fee and upon filing of a
request.

What are the marks that cannot be registered?

SECTION 123. Registrability. - 123.1. A mark cannot be registered if it:

(a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or
falsely suggest a connection with persons, living or dead, institutions, beliefs, or national
symbols, or bring them into contempt or disrepute;

(b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its political
subdivisions, or of any foreign nation, or any simulation thereof;

(c) Consists of a name, portrait or signature identifying a particular living individual except by
his written consent, or the name, signature, or portrait of a deceased President of the Philippines,
during the life of his widow, if any, except by written consent of the widow;

(d) Is identical with a registered mark belonging to a different proprietor or a mark with an
earlier filing or priority date, in respect of:

(i) The same goods or services, or

(ii) Closely related goods or services, or

(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is
considered by the competent authority of the Philippines to be well-known internationally and in
the Philippines, whether or not it is registered here, as being already the mark of a person other
than the applicant for registration, and used for identical or similar goods or services: Provided,
That in determining whether a mark is well-known, account shall be taken of the knowledge of
the relevant sector of the public, rather than of the public at large, including knowledge in the
Philippines which has been obtained as a result of the promotion of the mark;

(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered
well-known in accordance with the preceding paragraph, which is registered in the Philippines
with respect to goods or services which are not similar to those with respect to which registration
is applied for: Provided, That use of the mark in relation to those goods or services would
indicate a connection between those goods or services, and the owner of the registered mark:
Provided, further, That the interests of the owner of the registered mark are likely to be damaged
by such use;
(g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or
geographical origin of the goods or services;

(h) Consists exclusively of signs that are generic for the goods or services that they seek to
identify;

(i) Consists exclusively of signs or of indications that have become customary or usual to
designate the goods or services in everyday language or in bona fide and established trade
practice;

(j) Consists exclusively of signs or of indications that may serve in trade to designate the kind,
quality, quantity, intended purpose, value, geographical origin, time or production of the goods
or rendering of the services, or other characteristics of the goods or services;

(k) Consists of shapes that may be necessitated by technical factors or by the nature of the goods
themselves or factors that affect their intrinsic value;

(l) Consists of color alone, unless defined by a given form; or

(m) Is contrary to public order or morality.

GENERAL RULE: Descriptive name, word or phrase of the character, qualities or

composition of an article cannot be registered as trademark or tradename. (Example: Pale
Pilsen for beer) (Asia Brewery, Inc. vs. CA, G.R. NO. 103543, July 5, 1993).

EXCEPTIONS:

1. If used in an arbitrary or fanciful manner and with no relation to the product it

identifies:
a. Arbitrary mark – it is utilized as a device having a common meaning that has no
relation to the goods or services being sold.
Examples – “Dutch Boy” for paints; “Pride” for laundry soaps;
b. Fanciful Mark – It is invented for the sole purpose of functioning as a trademark and
have no other meaning than acting as a mark.
Examples: “Xerox” for photocopying machines; “Colgate” for toothpaste

2. If used as part of Contractions or Coined mark

Marks may be registered even if they are contractions of or coined from generic and
descriptive terms.
Examples: “Starbrite” for metal polish is a coined term for “star bright”

3. If used as part of a composite mark

Composite mark – they are marks consisting of two or more elements or combination of
words, phrases, designs, symbols or color schemes. Although they cannot be registered
 by themselves, together they may be a part of a composite mark as long as they may
provide a disclaimer. The person who registers them as part of a mark will not acquire
ownership thereon.
Example: “20th Century Nylon Shirts Factory” must be required to disclaim “nylon” and
“shirts factory”) (Ong Ai Gui vs.The Director of the Phil. Patent Office,G.R.NO. L-6235,
March 28, 1995).

4. If it acquired a secondary meaning.

Doctrine of secondary meaning – While as a general rule, generic, indicative or

descriptive marks are non-registrable, nothing shall prevent the registration of any such
sign or device which has become distinctive in relation to the goods for which
registration is requested as a result of the use that have been made of it in commerce in
the Philippines. The Office may accept as prima facie evidence that the mark has become
distinctive, as used in connection with the applicant’s goods or services in commerce,
proof of substantially exclusive and continuous use thereof by the applicant in
commerce in the Philippines for five (5) years before the date on which the claim of
distinctiveness is made.
Examples: “Ang Tibay” for shoes (Ang vs. Teodoro 74 Phil 50)
“Selecta” for bakery products (Arce & Sons vs. Selecta Biscuit Co.Inc. 110 Phil 858)

What is the rule to internationally well-known marks?

The persons who may question the mark (that is, oppose registration, petition for the cancellation
thereof, sue for unfair competition) include persons whose internationally well-known mark,
whether or not registered is identical with or confusingly similar to or constitutes a translation
of a mark that is sought to be registered or is actually registered. (Secs. 123(3) and 131.3, IPC).

Provided, That in determining whether a mark is well-known, account shall be taken of the
knowledge of the relevant sector of the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a result of the promotion of the mark.
(Section 123, IPC)

Section 147.2. The exclusive right of the owner of a well-known mark defined in Subsection
123.1(e) which is registered in the Philippines, shall extend to goods and services which are
not similar to those in respect of which the mark is registered: Provided, That use of that
mark in relation to those goods or services would indicate a connection between those goods or
services and the owner of the registered mark: Provided, further, That the interests of the owner
of the registered mark are likely to be damaged by such use. (n)

PROTECTION OF TRADE NAME

A tradename or business identifier means the name or designation identifying or
distinguishing an enterprise; any individual name or surname, first name or device or words used
by manufacturers, industrialists, merchants, and others to identify their businesses, vocations or
occupations (Converse Rubber Corp vs. Universal Rubber Products, Inc., G.R. NO. L-27906,
Jan.8, 1987).

A tradename need not be registered with the IPO before an infringement suit may be filed by
its owner against the owner of an infringing trademark. All that is required is that the trade name
is previously used in trade and commerce in the Philippines (Coffee Partners, Inc, vs. San
Francisco Coffee and Roastery, Inc., G.R. NO. 169504, March 3, 2010).

Trademark distinguished from Tradename

1. Trademark designates the goods or services offered by a person or enterprise while

tradename identifies an enterprise.

2. Trademark is registered in the Intellectual Property Office while tradename is registered

in the Department of Trade and Industry.

SECTION 165. Trade Names or Business Names. - 165.1. A name or designation may not be
used as a trade name if by its nature or the use to which such name or designation may be put, it
is contrary to public order or morals and if, in particular, it is liable to deceive trade circles or the
public as to the nature of the enterprise identified by that name.

165.2. (a) Notwithstanding any laws or regulations providing for any obligation to register trade
names, such names shall be protected, even prior to or without registration, against any
unlawful act committed by third parties.

(b) In particular, any subsequent use of the trade name by a third party, whether as a trade
name or a mark or collective mark, or any such use of a similar trade name or mark, likely
to mislead the public, shall be deemed unlawful.

165.4. Any change in the ownership of a trade name shall be made with the transfer of the
enterprise or part thereof identified by that name.

INFRINGEMENT

How is infringement of trademarks committed?

SECTION 155. Remedies; Infringement. - Any person who shall, without the consent of the
owner of the registered mark:
155.1. (i)Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant feature thereof in connection with the sale,
(ii) offering for sale, distribution, advertising of any goods or services including other
preparatory steps necessary to carry out the sale of any goods or services on or (iii) in connection
with which such use is likely to cause confusion, or to cause mistake, or to deceive.

155.2. (iv) Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant
feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce
upon or in connection with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for
the remedies hereinafter set forth: Provided, That the infringement takes place at the moment any
of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether
there is actual sale of goods or services using the infringing material. (Sec. 22, R.A. No. 166a)

Who can file an action for infringement?

Only a registrant of a mark can file a case for infringement. Upon the finality of an order of
cancellation of a mark, the right of a registrant to file a case for infringement terminates.

Jurisprudence has developed two tests in determining similarity and likelihood of confusion in
trademark resemblance:

1. Dominancy test
(i) Focuses on the similarity of the main, essential, dominant or prevalent features of
a mark.
(ii) Relies on visual, aural and connotative comparisons and overall impressions
between the two trademarks
(iii) The TEST is whether there is similarity of the prevalent features of the
competing trademarks which might cause confusion or deception and thus
constitute infringement (Societe Des Produits Nestle, SA vs. CA, G.R. NO.
112012, April 4, 2001).
(iv) Aural effects/Idem Sonans Rule. – in dominancy test, what are taken into
account are signs, color, design, peculiar shape or name, or some special, easily
remembered earmarks of the brand that readily attracts and catches the attention
 of the ordinary consumer (Dermaline, Inc. vs. Myra Pharmaceuticals, Inc., G.R.
NO. 190065, Aug. 16, 2010.
In addition, the aural effects of the words and letters contained in the marks
should be considered in determining the issue of confusing similarity.

Examples :
“Dermaline” is confusingly similar to “Dermalin” ( Dermaline, Inc. vs. Myra
Pharmaceuticals, Inc.
“NANNY” is confusingly similar to “NAN” ; “NAN” is the prevalent feature
(Societe Des Produits Nestle, S.A. vs. Martin Dy, Jr.).

2. Holistic or Totality test

(i) Mandates that the entirety of the marks in question must be considered in
determining confusing similarity
(ii) Relies only on visual comparison
(iii) The TEST is whether the general confusion made by the article upon the eye of
the casual purchaser who is unsuspicious and off his guard, is such as to likely
result in his confounding it with the original (Del Monte Corp. vs. CA, G.R. NO.
L-78325, January 25, 1990).

What are the Types of Confusion?

1. Confusion of Goods – when an otherwise prudent purchaser is induced to purchase one

product in the belief that he is purchasing another, in which case defendant’s goods are
then bought as the plaintiff’s and its poor quality reflects badly on the plaintiff’s
reputation (Mighty Corporation v. E & J Gallo, 434 SCRA 73).

2. Confusion of business – wherein the goods of the parties are different but the
defendant’s product can reasonably (though mistakenly) be assumed to originate from the
plaintiff, thus deceiving the public into believing that there is some connection between
the defendant, which , in fact, does not exist (Ibid).

What are the remedies available in case of infringement?

SECTION 156. Actions, and Damages and Injunction for Infringement. - 156.1. The owner of a
registered mark may recover damages from any person who infringes his rights, and the measure
of the damages suffered shall be either the reasonable profit which the complaining party would
have made, had the defendant not infringed his rights, or the profit which the defendant actually
made out of the infringement, or in the event such measure of damages cannot be readily
ascertained with reasonable certainty, then the court may award as damages a reasonable
percentage based upon the amount of gross sales of the defendant or the value of the services in
connection with which the mark or trade name was used in the infringement of the rights of the
complaining party. (Sec. 23, first par., R.A. No. 166a)
156.2. On application of the complainant, the court may impound during the pendency of the
action, sales invoices and other documents evidencing sales. (n)

156.3. In cases where actual intent to mislead the public or to defraud the complainant is shown,
in the discretion of the court, the damages may be doubled. (Sec. 23, first par., R.A. No. 166)

156.4. The complainant, upon proper showing, may also be granted injunction.

SECTION 157. Power of Court to Order Infringing Material Destroyed. - 157.1 In any action
arising under this Act, in which a violation of any right of the owner of the registered mark is
established, the court may order that goods found to be infringing be, without compensation of
any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm
caused to the right holder, or destroyed; and all labels, signs, prints, packages, wrappers,
receptacles and advertisements in the possession of the defendant, bearing the registered mark or
trade name or any reproduction, counterfeit, copy or colorable imitation thereof, all plates,
molds, matrices and other means of making the same, shall be delivered up and destroyed.

157.2. In regard to counterfeit goods, the simple removal of the trademark affixed shall not be
sufficient other than in exceptional cases which shall be determined by the Regulations, to permit
the release of the goods into the channels of commerce. (Sec. 24, R.A. No. 166a)

SECTION 158. Damages; Requirement of Notice. - In any suit for infringement, the owner of
the registered mark shall not be entitled to recover profits or damages unless the acts have been
committed with knowledge that such imitation is likely to cause confusion, or to cause mistake,
or to deceive. Such knowledge is presumed if the registrant gives notice that his mark is
registered by displaying with the mark the words ‘”Registered Mark” or the letter R within a
circle or if the defendant had otherwise actual notice of the registration. (Sec. 21, R.A. No. 166a)

What are the limitations to actions for infringement?

SECTION 159. Limitations to Actions for Infringement. - Notwithstanding any other provision
of this Act, the remedies given to the owner of a right infringed under this Act shall be limited as
follows:

159.1. Notwithstanding the provisions of Section 155 hereof, a registered mark shall have no
effect against any person who, in good faith, before the filing date or the priority date, was
using the mark for the purposes of his business or enterprise: Provided, That his right may only
be transferred or assigned together with his enterprise or business or with that part of his
enterprise or business in which the mark is used.

159.2. Where an infringer who is engaged solely in the business of printing the mark or other
infringing materials for others is an innocent infringer, the owner of the right infringed shall be
entitled as against such infringer only to an injunction against future printing.
159.3. Where the infringement complained of is contained in or is part of paid advertisement
in a newspaper, magazine, or other similar periodical or in an electronic communication, the
remedies of the owner of the right infringed as against the publisher or distributor of such
newspaper, magazine, or other similar periodical or electronic communication shall be limited to
an injunction against the presentation of such advertising matter in future issues of such
newspapers, magazines, or other similar periodicals or in future transmissions of such electronic
communications.

159.4 There shall be no infringement of trademarks or tradenames of imported or sold drugs

and medicines allowed under Section 72.1 of this Act, as well as imported or sold off-patent
drugs and medicines: Provided, That said drugs and medicines bear the registered marks that
have not been tampered, unlawfully modified, or infringed upon as defined under Section 155 of
this Code.

UNFAIR COMPETITION

What is unfair competition?

SECTION 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A person who
has identified in the mind of the public the goods he manufactures or deals in, his business or
services from those of others, whether or not a registered mark is employed, has a property right
in the goodwill of the said goods, business or services so identified, which will be protected in
the same manner as other property rights.

168.2. Any person who shall employ deception or any other 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.

168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of
another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words thereon, or in any other feature
of their appearance, which would be likely to influence purchasers to believe that the goods
offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or
who otherwise clothes the goods with such appearance as shall deceive the public and defraud
another of his legitimate trade, or any subsequent vendor of such goods or any agent of any
vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means calculated to
induce the false belief that such person is offering the services of another who has identified such
services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who shall commit
any other act contrary to good faith of a nature calculated to discredit the goods, business or
services of another.

What are the distinctions between infringement of trademark from unfair competition?

1. In infringement of trademark, there is unauthorized use of a trademark, while unfair

competition under the IPC involves passing off of one’s goods as those of another and
giving one’s goods the appearance of that of another.

2. It is not necessary to establish fraudulent intent in a case of infringement of trademark

while it is necessary to establish fraudulent intent in unfair competition.

3. Registration of a trademark is necessary for filing an action for infringement of trademark

while prior registration of a trademark is not necessary in unfair competition.

4. Unfair competition is broader as it includes cases not only covered by the IPC but also by
Article 27 of the New Civil Code ( Del Monte Corp,.et.al. vs. CA, 181 SCRA 410).