PETITIONER v. RESPONDENT (Your Last Name) for the same food products.

McDonald’s also informed respondent Francis

Date | Ponente | G.R. No. Dy (“respondent Dy”), the chairman of the Board of Directors of respondent
Syllabus Topic corporation, of its exclusive right to the “Big Mac” mark and requested him
to desist from using the “Big Mac” mark or any similar mark.
DOCTRINE: 6. Having received no reply from respondent Dy, petitioners on 6 June 1990
 Generic marks - are commonly used as the name or description of a sued respondents in the Regional Trial Court of Makati, Branch 137
kind of goods, such as “Lite” for beer or “Chocolate Fudge” for (“RTC”), for trademark infringement and unfair competition.
chocolate soda drink. RTC Ruling:
1. RTC found that respondent corporation liable for trademark infringement
and unfair competition.
 Descriptive marks - on the other hand, convey the characteristics,
CA:
functions, qualities or ingredients of a product to one who has never seen
1. However upon appeal, the CA held reversed the RTC Decision and ordering
it or does not know it exists, such as “Arthriticare” for arthritis
McDonald’s to pay respondents P1,600,000 as actual and compensatory
medication
damages and P300,000 as moral damages.
2 test to determine Confusion
 Dominancy test - focuses on the similarity of the prevalent features of ISSUES:
the competing trademarks that might cause confusion. 1. Can the petitioner have exclusive ownership of the word Big Mac? (Yes)
2. Is there colorable imitation resulting in likelihood of confusion? (Yes)
 Holistic test - requires the court to consider the entirety of the marks as 3. Whether or not there is unfair competition?(Yes)
applied to the products, including the labels and packaging, in
RULING: ---
determining confusing similarity.
RATIO:
FACTS: First Issue
1. Petitioner McDonald’s Corporation (“McDonald’s”) is a corporation 1. Yes, the petitioners can have exclusive ownership of the word big mac.
organized under the laws of Delaware, United States. McDonald’s operates, 2. A mark is valid if it is “distinctive” and thus not barred from registration
by itself or through its franchisees, a global chain of fast-food restaurants. under Section 4 of RA 166 (“Section 4”). However, once registered, not
McDonald’s owns a family of marks including the “Big Mac” mark for its only the mark’s validity but also the registrant’s ownership of the mark is
“double-decker hamburger sandwich.” McDonald’s registered this prima facie presumed.
trademark with the United States Trademark Registry on 16 October 1979. 3. Respondents contend that of the two words in the “Big Mac” mark, it is
2. Based on this Home Registration, McDonald’s applied for the registration only the word “Mac” that is valid because the word “Big” is generic and
of the same mark in the Principal Register of the then Philippine Bureau of descriptive (proscribed under Section 4[e]), and thus “incapable of
Patents, Trademarks and Technology (“PBPTT”), now the Intellectual exclusive appropriation.”
Property Office (“IPO”). Pending approval of its application, McDonald’s 4. The contention has no merit. The “Big Mac” mark, which should be treated
introduced its “Big Mac” hamburger sandwiches in the Philippine market in in its entirety and not dissected word for word, is neither generic nor
September 1981. descriptive. Generic marks are commonly used as the name or description
3. On 18 July 1985, the PBPTT allowed registration of the “Big Mac” mark in of a kind of goods, such as “Lite” for beer or “Chocolate Fudge” for
the Principal Register based on its Home Registration in the United States. chocolate soda drink. Descriptive marks, on the other hand, convey the
4. Respondent L.C. Big Mak Burger, Inc. (“respondent corporation”) is a characteristics, functions, qualities or ingredients of a product to one who
domestic corporation which operates fast-food outlets and snack vans in has never seen it or does not know it exists, such as “Arthriticare” for
Metro Manila and nearby provinces. Respondent corporation’s menu arthritis medication. On the contrary, “Big Mac” falls under the class of
includes hamburger sandwiches and other food items fanciful or arbitrary marks as it bears no logical relation to the actual
5. On 21 October 1988, respondent corporation applied with the PBPTT for characteristics of the product it represents. As such, it is highly distinctive
the registration of the “Big Mak” mark for its hamburger sandwiches. and thus valid. Significantly, the trademark “Little Debbie” for snack cakes
McDonald’s opposed respondent corporation’s application on the ground was found arbitrary or fanciful.
that “Big Mak” was a colorable imitation of its registered “Big Mac” mark
 5. Therefore the court finds that petitioners have duly established McDonald’s goods as offered for sale to the public. 75 Actual fraudulent intent need not
exclusive ownership of the “Big Mac” mark. be shown.
Second Issue 3. Respondents’ goods are hamburgers which are also the goods of petitioners.
1. Yes, there is coloarable imitation that would result in the confusion of the
If respondents sold egg sandwiches only instead of hamburger sandwiches,
two products
their use of the “Big Mak” mark would not give their goods the general
2. In determining likelihood of confusion, jurisprudence has developed two
appearance of petitioners’ “Big Mac” hamburgers. In such case, there is
tests, the dominancy test and the holistic test. The dominancy test focuses
only trademark infringement but no unfair competition. However, since
on the similarity of the prevalent features of the competing trademarks that
respondents chose to apply the “Big Mak” mark on hamburgers, just like
might cause confusion. In contrast, the holistic test requires the court to
petitioner’s use of the “Big Mac” mark on hamburgers, respondents have
consider the entirety of the marks as applied to the products, including the
obviously clothed their goods with the general appearance of petitioners’
labels and packaging, in determining confusing similarity.
goods.
3. This Court, however, has relied on the dominancy test rather than the
4. There is actually no notice to the public that the “Big Mak” hamburgers are
holistic test. The dominancy test considers the dominant features in the
products of “L.C. Big Mak Burger, Inc.” and not those of petitioners who
competing marks in determining whether they are confusingly similar.
have the exclusive right to the “Big Mac” mark. This clearly shows
Under the dominancy test, courts give greater weight to the similarity of the
respondents’ intent to deceive the public. Had respondents’ placed a notice
appearance of the product arising from the adoption of the dominant
on their plastic wrappers and bags that the hamburgers are sold by “L.C. Big
features of the registered mark, disregarding minor differences. Courts will
Mak Burger, Inc.”, then they could validly claim that they did not intend to
consider more the aural and visual impressions created by the marks in the
deceive the public. In such case, there is only trademark infringement but no
public mind, giving little weight to factors like prices, quality, sales outlets
unfair competition. Respondents, however, did not give such notice. We
and market segments.
hold that as found by the RTC, respondent corporation is liable for unfair
4. Applying the dominancy test, the Court finds that respondents’ use of the
competition.
“Big Mak” mark results in likelihood of confusion. First, “Big Mak” sounds
RELEVANT PROVISIONS:
exactly the same as “Big Mac.” Second, the first word in “Big Mak” is 1. ---
exactly the same as the first word in “Big Mac.” Third, the first two letters
in “Mak” are the same as the first two letters in “Mac.” Fourth, the last
letter in “Mak” while a “k” sounds the same as “c” when the word “Mak” is
pronounced. Fifth, in Filipino, the letter “k” replaces “c” in spelling, thus
“Caloocan” is spelled “Kalookan.”
5. In short, 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. In spelling, con
Third Issue
1. Yes, there was unfair competition.
2. 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. The confusing similarity may or may
not result from similarity in the marks, but may result from other external
factors in the packaging or presentation of the goods. The intent to deceive
and defraud may be inferred from the similarity of the appearance of the