FRANCO, Joseph Gavier M.

Castillo-Taleon

Atty. Risel

GREAT WHITE SHARK ENTERPRISES, INC., vs. DANILO M. CARALDE, JR

November 21, 2012 G.R. No. 192294
Facts:
Before the Court this Petition for Review on Certiorari on the Decision
of the Court of Appeals, which reversed and set aside the Intellectual
Property Office (IPO), and directed him to grant the application for the
mark "SHARK & LOGO" filed by respondent Danilo M. Caralde, Jr.
(Caralde). Caralde filed before the Bureau of Legal Affairs (BLA), IPO a
trademark application seeking to register the mark "SHARK & LOGO" for
his manufactured goods under Class 25, such as slippers, shoes and
sandals. Petitioner Great White Shark Enterprises, Inc. (Great White Shark),
a foreign corporation domiciled in Florida, USA, opposed the application
claiming to be the owner of the mark consisting of a representation of a
shark in color, known as "GREG NORMAN LOGO" (associated with apparel
worn and promoted by Australian golfer Greg Norman).
The BLA Director rendered a Decision rejecting Caralde's application.
The BLA Director, however, found no merit in Great White Shark's claim
that its mark was famous and well-known for insufficiency of evidence. On
appeal, the IPO Director General affirmed the final rejection of Caralde's
application, ruling that the competing marks are indeed confusingly similar.
Great White Shark's mark is used in clothing and footwear, among others,
while Caralde's mark is used on similar goods like shoes and slippers.
Nonetheless, while Great White Shark submitted evidence of the
registration of its mark in several other countries, the IPO Director General
considered its mark as not well-known for failing to meet the other criteria
laid down under the Rules and Regulations on Trademarks, Service Marks,
Trade Names and Marked or Stamped Containers.
However, on petition for review, the CA reversed and set aside the
foregoing Decision and directed the IPO to grant Caralde's application for
registration of the mark "SHARK & LOGO." The CA found no confusing
similarity between the subject marks notwithstanding that both contained
the shape of a shark as their dominant feature. It observed that Caralde's
mark is more fanciful and colorful, and contains several elements which are
easily distinguishable from that of the Great White Shark. It further opined
that considering their price disparity, there is no likelihood of confusion as
they travel in different channels of trade.
Issues:

Whether the respondents mark subject of the application being

opposed by the petitioner is not confusingly similar to petitioners
registered mark.
Held:
A trademark device is susceptible to registration if it is crafted
fancifully or arbitrarily and is capable of identifying and distinguishing the
goods of one manufacturer or seller from those of another. Apart from its
commercial utility, the benchmark of trademark registrability is
distinctiveness. Thus, a generic figure, as that of a shark in this case, if
employed and designed in a distinctive manner, can be a registrable
trademark device, subject to the provisions of the IP Code.
Corollarily, Section 123.1(d) of the IP Code provides that a mark
cannot be registered if it is identical with a registered mark belonging to a
different proprietor with an earlier filing or priority date, with respect to the
same or closely related goods or services, or has a near resemblance to
such mark as to likely deceive or cause confusion.
In determining similarity and likelihood of confusion, case law has
developed the Dominancy Test and the Holistic or Totality Test. The
Dominancy Test focuses on the similarity of the dominant features of the
competing trademarks that might cause confusion, mistake, and deception
in the mind of the ordinary purchaser, and gives more consideration to the
aural and visual impressions created by the marks on the buyers of goods,
giving little weight to factors like prices, quality, sales outlets, and market
segments. In contrast, the Holistic or Totality Test considers the entirety of
the marks as applied to the products, including the labels and packaging,
and focuses not only on the predominant words but also on the other
features appearing on both labels to determine whether one is confusingly
similar to the other as to mislead the ordinary purchaser. The "ordinary
purchaser" refers to one "accustomed to buy, and therefore to some extent
familiar with, the goods in question."
Irrespective of both tests, the Court finds no confusing similarity
between the subject marks. While both marks use the shape of a shark, the
Court noted distinct visual and aural differences between them. In Great
White Shark's "GREG NORMAN LOGO," there is an outline of a shark
formed with the use of green, yellow, blue and red lines/strokes, to wit:
As may be gleaned from the foregoing, the visual dissimilarities
between the two (2) marks are evident and significant, negating the
possibility of confusion in the minds of the ordinary purchaser, especially
considering the distinct aural difference between the marks. Finally, there
being no confusing similarity between the subject marks, the matter of

whether Great White Sharks mark has gained recognition and acquired
becomes unnecessary.
WHEREFORE, the Court resolves to DENY the instant petition and
AFFIRM the assailed Decision of the Court of Appeals (CA) for failure to
show that the CA committed reversible error in setting aside the Decision of
the IPO Director General and allowing the registration of the mark "SHARK
& LOGO" by respondent Danilo M. Caralde, Jr. SO ORDERED.

Case Analysis for GREAT WHITE SHARK ENTERPRISES, INC., vs. DANILO
M. CARALDE, JR
In the said case the Supreme Court maintained the precedents with
regard the confusing similarity of trademarks. The petitioner filed a case in
against the respondent for the alleged visual similarities with regard their
competing trademarks. A cursory examination of the said trademarks would
reveal the same. However the Supreme Court had decided otherwise, ruling
that there are visual dissimilarities that cannot be ignored.
The decision of the Court can be analyzed in two points:
distinctiveness and the application of the Holistic and Dominancy Tests.
On the matter of the first point, the Supreme Court affirmed the
principle that generic figures can be a registrable trademark device, subject
to the provisions of the law. In this case, no deviation was made from the
well-established precedents in case law and statute.
On the matter of the second point, the Supreme Court used the wellestablished, Holistic and Dominancy Tests. The Court used the two tests in
decisively determining the issue of confusingly similarity between the

competing trademarks. What this shows is the continued adherence to the

settled jurisprudential standards adopted by the Court in gauging the
similarity of two or more competing trademarks.

FRANCO, Joseph Gavier M.

Castillo-Taleon

Atty. Risel

SHIRLEY F. TORRES, vs. IMELDA PEREZ and RODRIGO PEREZ,

November 28, 2012 G.R. No. 198728
November 28, 2012 G.R. No. 188225
Facts:
Before the Court are Petitions for Review on Certiorari. The petition
assails the Decision of the Court of Appeals (CA) which nullified the Orders
of the Regional Trial Court (RTC) which had denied the Motion to Dismiss
and/or Withdraw Information filed against respondents for unfair
competition under (Intellectual Property Code of the Philippines).

Respondents Imelda and Rodrigo are spouses who own RGP Footwear
Manufacturing (RGP), which supplies ladies' shoes to Shoe Mart (SM).
Sasay's Closet Co. (SCC), was engaged in the supply, trading, retailing of
garments such as underwear, children's wear, women's and men's wear, and
other incidental activities related thereto. For its products, SCC used the
trademark "Naturals with Design," which it filed with the Intellectual
Property Office on 24 August 2005 and registered on 26 February 2007.
These products were primarily supplied to SM, which assigned to them the
vendor code "190501" for purposes of identification. Respondent Imelda
took over Sunshine's responsibilities in the partnership.
Respondent Imelda then informed petitioner of the former's decision
to dissolve the partnership. Despite the objections of petitioner to the
dissolution of SCC, various amounts were paid to her by respondents from
January to April 2006 representing her share in the partnership assets.
Meanwhile, on 27 March 2006, petitioner established Tezares Enterprise, a
sole proprietorship engaged in supplying and trading of clothing and
accessories except footwear. Also in March 2006, she discovered that
underwear products bearing the brand "Naturals" were being sold in SM
with vendor code "180195." This code was registered to RGP, a fact
confirmed by test buys conducted by her lawyers on 13 and 14 May 2006.
On 5 June 2006, a search warrant for unfair competition under
Section 168 in relation to Section 170 of R.A. 8293 was issued by the RTC of
Manila, Branch 24, against respondents at their address. However, it was
quashed by the same court on 20 October 2006 upon motion of
respondents. On 9 June 2006, petitioner filed a criminal complaint for unfair
competition against respondents and Sunshine before the City Prosecution
Office. Assistant City Prosecutor Imelda P. Saulog found probable cause to
indict respondents for unfair competition. The indictment was raffled to
RTC Makati City, Branch 149. On 23 October 2006, it issued an Order
finding probable cause for the issuance of a warrant of arrest against
respondents.
Respondents filed a petition for review of the prosecutor's resolution
before the Department of Justice (DOJ), which on 13 December 2006 issued
its own Resolution reversing the finding of existence of probable cause
against them. The DOJ denied the motion for reconsideration filed by
petitioner on 28 March 2007. Hence, she filed a petition for certiorari
before the CA, where it was docketed as CA-G.R. SP No. 98861. In her
petition, she questioned the DOJ Resolution, but later withdrew the same on
6 December 2007 for an unknown reason.
Following the directive of the DOJ, the prosecutor filed before the RTC
of Makati City, Branch 149, a Motion to Dismiss and/or Withdraw
Information on 3 April 2007. The trial court denied the motion in an Order

dated 12 February 2008. Respondents moved for reconsideration, but their

motion was denied by the RTC. Aggrieved, they filed a Petition for Certiorari
(with Prayer for the Issuance of a Temporary Restraining Order and
thereafter a Preliminary Injunction) before the CA. In the first assailed
Decision of the CA dated 11 March 2009, the CA granted the petition. The
CA sustained the position of respondents that the finding of probable cause
for the filing of an information is an executive function lodged with the
prosecutor.
Petitioner moved for reconsideration of the CA Decision, but the
motion was denied. She then brought the matter before this Court via a
Petition for Review on Certiorari filed under Rule 45 of the Rules of Court.
Without giving due course to the petition, the Court required respondents to
comment thereon. Upon their compliance, petitioner was required to file a
reply, which was later received on 11 December 2009. On 19 May 2011, she
filed her Memorandum.
Meanwhile, following the promulgation of the Decision in CA,
respondents filed an Urgent Motion to Dismiss the criminal complaint for
unfair competition before the RTC on 1 April 2009. The motion was duly
opposed by petitioner, arguing that the CA Decision had not yet attained
finality in view of her pending petition before this Court; thus, the motion
was premature. The RTC denied the motion to dismiss for lack of merit.
However, upon motion for reconsideration filed by respondents, it issued
the Order dated 29 July 2009 ordering the quashal of the Information
against them. The trial court issued another Order on 19 October 2009
denying petitioner's Motion for Reconsideration. Petitioner filed a Petition
for Certiorari before the CA on the ground that the trial judge committed
grave abuse of discretion amounting to lack or excess of jurisdiction when
he quashed the Information against respondents based on a CA Decision
that was not yet final and executory, being the subject of a petition still
pending before this Court. On 29 September 2011, the CA issued the
second assailed Decision in CA-G.R. SP No. 111903 affirming the RTC
Orders dated 29 July 2009 and 19 October 2009. Opting not to file a motion
for reconsideration, petitioner again comes before us on a Petition for
Review on Certiorari questioning the Decision in CA.
Issue:
Whether there exists probable cause to indict respondents for unfair
competition (violation of Section 168 in relation to Section 170) under R.A.
8293.
Held:

We now rule on the issue of probable cause. Probable cause, for

purposes of filing a criminal information, is described as "such facts as are
sufficient to engender a well-founded belief that a crime has been
committed and the respondent is probably guilty thereof, and should be
held for trial." Thus, the determination of the existence of probable cause
necessitates the prior determination of whether a crime or an offense was
committed in the first place. Here, we find that there was no probable cause
to indict respondents, because the crime of unfair competition was not
committed. In positing that respondents were guilty of unfair competition,
petitioner makes a lot of the fact that they used the vendor code of RGP in
marketing the "Naturals" products. She argues that they passed off the
"Naturals" products, which they marketed under RGP, as those of SCC; thus,
they allegedly prejudiced the rights of SCC as owner of the trademark. She
also claims that she has the personality to prosecute respondents for unfair
competition on behalf of SCC.
When Judge Untalan denied the Motion to Dismiss and/or Withdraw
Information filed by the prosecution and thereby sustained the position of
petitioner, his error lay in the fact that his focus on the crime of unfair
competition was unwarranted. In this case, much more important than the
issue of protection of intellectual property is the change of ownership of
SCC. The arguments of petitioner have no basis, because respondents are
the exclusive owners of SCC, of which she is no longer a partner.
Based on the findings of fact of the CA and the DOJ, respondents have
completed the payments of the share of petitioner in the partnership affairs.
Having bought her out of SCC, respondents were already its exclusive
owners who, as such, had the right to use the "Naturals" brand. The use of
the vendor code of RGP was resorted to only for the practical purpose of
ensuring that SM's payments for the "Naturals" products would go to
respondents, who were the actual suppliers.
Furthermore, even if we were to assume that the issue of protection of
intellectual property is paramount in this case, the criminal complaint for
unfair competition against respondents cannot prosper, for the elements of
the crime were not present. We have enunciated in CCBPI v. Gomez that the
key elements of unfair competition are "deception, passing off and fraud
upon the public." No deception can be imagined to have been foisted on the
public through different vendor codes, which are used by SM only for the
identification of suppliers' products.
WHEREFORE, the Decisions of the CA finding lack of probable cause
for respondents' alleged violation of Section 168 in relation to Section 170
of Republic Act No. 8293 (unfair competition), are AFFIRMED. The
Information against respondents for unfair competition is DISMISSED. SO
ORDERED.

Case Analysis for SHIRLEY F. TORRES, vs. IMELDA PEREZ and RODRIGO
PEREZ
In this case the probable cause for the criminal aspect of the crime of
Unfair Competition was affirmed by the Supreme Court. In this regard the
intent to "deception, passing off and fraud upon the public." was ruled by
the Court as a requisite before the charge can be filed before the RTC.
Change of ownership of the company or proprietorship, while
relevant, is not absolutely determinative of the crime of Unfair Competition.
Not all usages of the vendor code fall under Unfair Competition. As stated
by the Court, usage of vendor codes for practical purposes is not Unfair
Competition.
Though the act of unfair competition can be analyzed between the
civil and criminal aspects; divergence can be noticed between the civil and
criminal aspects of the case. In the civil case, the protection of intellectual
property rights is paramount. The criminal aspect of the case however is the
prohibition on "deception, passing off and fraud upon the public." Though
arising from the same act, the gravamen of the civil and criminal aspects
are different.