G.R. No.

120961 October 17, 1996

DISTILLERIA WASHINGTON, INC. or WASHINGTON DISTILLERY, INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS and LA TONDEÑA DISTILLERS, INC.,
respondents.

FACTS : La Tondeña Distillers , Inc. (LTDI) filed a case against Distilleria Washington for the
seizure of 18,157 empty bottles bearing the blown-in marks of La Tondeña Inc. and Ginebra
San Miguel. Said bottles were being used by Washington for its own products without the
consent of LTDI.

LTDI asserted that as the owner of the bottles they were entitled for the protection extended
by RA no. 623 (An Act to regulate the use of duly stamped or marked bottles, boxes, kegs,
barrels and other similar containers). Washington countered that RA no. 623 should not
apply to alcoholic beverages and the ownership of the bottles were lawfully transferred to the
buyer upon the sale of the gin and the containers at a single price.

The trial court rendered a decision favoring Washington and ordered LTDI for the return of
the seized bottles. LTDI appealed the decision to the Court of Appeals. The appellate court
reversed the court a quo and ruled against Washington.

ISSUE : Whether or not ownership of the empty bottles was transferred to Washington?

HELD : The fact of the matter is that R.A. 623, as amended, in affording trademark protection
to the registrant, has additionally expressed a prima facie presumption of illegal use by a
possessor whenever such use or possession is without the written permission of the
registered manufacturer, a provision that is neither arbitrary nor without appropriate
rationale.

The above-quoted provisions grant protection to a qualified manufacturer who successfully

registered with the Philippine Patent Office its duly stamped or marked bottles, boxes, casks
and other similar containers. The mere use of registered bottles or containers without the
written consent of the manufacturer is prohibited, the only exceptions being when they are
used as containers for "sisi," "bagoong," "patis" and similar native products.

It is to be pointed out that a trademark refers to a word, name, symbol, emblem, sign or
device or any combination thereof adopted and used by a merchant to identify, and
distinguish from others, his goods of commerce. It is basically an intellectual creation that is
susceptible to ownership 7 and, consistently therewith, gives rise to its own elements of jus
posidendi, jus utendi, jus fruendi, jus disponendi, and jus abutendi, along with the applicable
jus lex, comprising that ownership. The incorporeal right, however, is distinct from the
property in the material object subject to it. Ownership in one does not necessarily vest
ownership in the other. Thus, the transfer or assignment of the intellectual property will not
necessarily constitute a conveyance of the thing it covers, nor would a conveyance of the
latter imply the transfer or assignment of the intellectual right. 8

G.R. No. L-48226 December 14, 1942

ANA L. ANG, petitioner,
vs.
TORIBIO TEODORO, respondent.

FACTS : Petitioner has continuously used “Ang Tibay” both as trademark and tradename in
manufacture and sale of slippers, shoes and indoor baseballs since 1910 and paid for
advertising expense for such. Respondent registered the same for pants and shirts on 1932
without expending for advertisement. For such reason petitioner eventually filed a case.

The trial court ruled in favor of the respondent on the grounds that the two trademarks are
dissimilar and are used on different noncompeting goods.

ISSUE: Whether or not respondent is guilty of infringement?

HELD : The courts have come to realize that there can be unfair competition or unfair
trading even if the goods are non-competing, and that such unfair trading can cause
injury or damage to the first user of a given trade-mark, first, by prevention of the
natural expansion of his business and, second, by having his business reputation
confused with and put at the mercy of the second user. Then noncompetitive products
are sold under the same mark, the gradual whittling away or dispersion of the identity and
hold upon the public mind of the mark created by its first user, inevitably results. The original
owner is entitled to the preservation of the valuable link between him and the public that has
been created by his ingenuity and the merit of his wares or services. Experience has
demonstrated that when a well-known trade-mark is adopted by another even for a totally
different class of goods, it is done to get the benefit of the reputation and advertisements of
the originator of said mark, to convey to the public a false impression of some supposed
connection between the manufacturer of the article sold under the original mark and the new
articles being tendered to the public under the same or similar mark. As trade has developed
and commercial changes have come about, the law of unfair competition has expanded to
keep pace with the times and the element of strict competition in itself has ceased to be the
determining factor. The owner of a trade-mark or trade-name has a property right in which he
is entitled to protection, since there is damage to him from confusion of reputation or goodwill
in the mind of the public as well as from confusion of goods. The modern trend is to give
emphasis to the unfairness of the acts and to classify and treat the issue as a fraud.

The doctrine of "secondary meaning" in trade-mark 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.

G.R. No. L-20635 March 31, 1966

ETEPHA, A.G., petitioner,

vs.
DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC., respondents.

FACTS : On April 23, 1959, 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,
1959.1

Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected. Petitioner claims

that it will be damaged because Atussin is so confusedly similar to its Pertussin (Registration
No. 6089, issued on September 25, 1957) 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.

To the question: May trademark ATUSSIN be registered, given the fact that PERTUSSIN,
another trademark, had been previously registered in the Patent Office? — the Director of
Patents answered affirmatively. 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. The trademark complained of should be compared and
contrasted with the purchaser's memory (not in juxtaposition) of the trademark said to be
infringed. 10 Some such factors as "sound; appearance; form, style, shape, size or format;
color; ideas connoted by marks; the meaning, spelling, and pronunciation, of words used;
and the setting in which the words appear" may be considered. 11 For, indeed, trademark
infringement is a form of unfair competition.

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. In testing this issue, fixed legal rules exist — if not in harmony, certainly in
abundance — but, in the final analysis, the application of these rules in any given situation
necessarily reflects a matter of individual judgment largely predicated on opinion. There is,
however, and can be no disagreement with the rule that the purchaser is confused, if at all,
by the marks as a whole.

As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that
the two words do not sound alike — when pronounced. There is not much phonetic similarity
between the two. The Solicitor General well-observed that in Pertussin the pronunciation of
the prefix "Per", whether correct or incorrect, includes a combination of three letters P, e and
r; whereas, in Atussin the whole starts with the single letter A added to suffix "tussin".
Appeals to the ear are disimilar. And this, because in a word combination, the part that
comes first is the most pronounced. An expositor of the applicable rule here is the decision in
the Syrocol-Cheracol controversy. 15 There, the ruling is that trademark Syrocol (a cough
medicine preparation) is not confusedly similar to trademark Cheracol (also a cough
medicine preparation). Reason: the two words "do not look or sound enough alike to justify a
holding of trademark infringement", and the "only similarity is in the last syllable, and that is
not uncommon in names given drug compounds".
G.R. No. L-28554 February 28, 1983

UNNO COMMERCIAL ENTERPRISES, INCORPORATED, petitioner,

vs.
GENERAL MILLING CORPORATION and TIBURCIO S. EVALLE, in his capacity as
Director of Patents, respondents.

FACTS : The Court affirms respondent Director of Patent's decision declaring respondent
General Milling Corporation as the prior user of the trademark "All Montana" on wheat flour in
the Philippines and ordering the cancellation of the certificate of registration for the same
trademark previously issued in favor of petitioner Unno Commercial Enterprises,
Incorporated, it appearing that Unno Commercial Enterprises, Inc. merely acted as exclusive
distributor of All Montana wheat flour in the Philippines. Only the owner of a trademark, trade
name or service mark may apply for its registration and an importer, broker, indentor or
distributor acquires no rights to the trademark of the goods he is dealing with in the absence
of a valid transfer or assignment of the trade mark.

On December 11, 1962, respondent General Milling Corporation filed an application for the
registration of the trademark "All Montana" to be used in the sale of wheat flour. In view of
the fact that the same trademark was previously, registered in favor of petitioner Unno
Commercial Enterprises, Inc.. Respondent General Milling Corporation, in its application for
registration, alleged that it started using the trademark "All Montana" on August 31, 1955 and
subsequently was licensed to use the same by Centennial Mills, Inc. by virtue of a deed of
assignment executed on September 20, 1962. On the other hand petitioner Unno
Commercial Enterprises, Inc. argued that the same trademark had been registered in its
favor on March 8, 1962 asserting that it started using the trademark on June 30, 1956, as
indentor or broker for S.H. Huang Bros. & Co., a local firm.

The Director of Patents, after hearing, ruled in favor of respondent General Milling
Corporation. and rendered its decision as follows:

ISSUE : Whether or not director of patents can issue cancellation of the certification of
registration?

HELD : The Court finds without merit petitioner's argument that the Director of Patents could
not order the cancellation of' its certificate of registration in an interference proceeding and
that the question of whether or not a certificate of registration is to be cancelled should have
been brought in cancellation proceedings. Under Rule 178 of the Rules of the Patent Office
in Trademark Cases, 14 the Director of Patents is expressly authorized to order the
cancellation of a registered mark or trade name or name or other mark of ownership in an
inter partes case, such as the interference proceeding at bar.

The right to register trademark is based on ownership. 4 When the applicant is not the owner
of the trademark being applied for, he has no right to apply for the registration of the same. 5
Under the Trademark Law only the owner of the trademark, trade name or service mark used
to distinguish his goods, business or service from the goods, business or service of others is
entitled to register the same. 6

The term owner does not include the importer of the goods bearing the trademark, trade
name, service mark, or other mark of ownership, unless such importer is actually the owner
thereof in the country from which the goods are imported. A local importer, however, may
make application for the registration of a foreign trademark, trade name or service mark if he
is duly authorized by the actual owner of the name or other mark of ownership. 7

Thus, petitioner's contention that it is the owner of the mark "All Montana" because of its
certificate of registration issued by the Director of Patents, must fail, since ownership of a
trademark is not acquired by the mere fact of registration alone. 9 Registration merely creates
a prima facie presumption of the validity of the registration, of the registrant's ownership of
the trademark and of the exclusive right to the use thereof. 10 Registration does not perfect a
trademark right. 11 As conceded itself by petitioner, evidence may be presented to overcome
the presumption. Prior use by one will controvert a claim of legal appropriation, by
subsequent users. In the case at bar, the Director of Patents found that "ample evidence was
presented in the record that Centennial Mills, Inc. was the owner and prior user in the
Philippines of the trademark 'All Montana' through a local importer and broker. Use of a
trademark by a mere importer, indentor or exporter (the Senior Party herein) inures to the
benefit of the foreign manufacturer whose goods are Identified by the trademark. The Junior
Party has hereby established a continuous chain of title and, consequently, prior adoption
and use" and ruled that "based on the facts established, it is safe to conclude that the Junior
Party has satisfactorily discharged the burden of proving priority of adoption and use and is
entitled to registration." It is well-settled that we are precluded from making further inquiry,
since the findings of fact of the Director of Patents in the absence of any showing that there
was grave abuse of discretion is binding on us 12 and the findings of facts by the Director of
Patents are deemed conclusive in the Supreme Court provided that they are supported by
substantial evidence. 13 Petitioner has failed to show that the findings of fact of the Director of
Patents are not substantially supported by evidence nor that any grave abuse of discretion
was committed.