9.

McDONALDS CORPORATION,
Petitioner,
- versus -
MACJOY FASTFOOD CORPORATION,
Respondent.

G.R. No. 166115

Present:

PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA,
GARCIA, JJ.
Promulgated:

February 2, 2007
x----------------------------------------------------------------------------------------x
DECISION
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, herein
petitioner McDonalds Corporation seeks the reversal and setting aside of the
following issuances of the Court of Appeals (CA) in CA-G.R. SP No. 57247, to wit:

1. Decision dated 29 July 2004[1] reversing an earlier decision of the Intellectual

Property Office (IPO) which rejected herein respondent MacJoy FastFood
Corporations application for registration of the trademark MACJOY & DEVICE; and

2. Resolution dated 12 November 2004[2] denying the petitioners motion for

reconsideration.

As culled from the record, the facts are as follows:

On 14 March 1991, respondent MacJoy Fastfood Corporation, a domestic

corporation engaged in the sale of fast food products in Cebu City, filed with the
then Bureau of Patents, Trademarks and Technology Transfer (BPTT), now the
Intellectual Property Office (IPO), an application, thereat identified as Application
Serial No. 75274, for the registration of the trademark MACJOY & DEVICE for fried
chicken, chicken barbeque, burgers, fries, spaghetti, palabok, tacos, sandwiches,
halo-halo and steaks under classes 29 and 30 of the International Classification
of Goods.

Petitioner McDonalds Corporation, a corporation duly organized and existing

under the laws of the State of Delaware, USA, filed a verified Notice of
Opposition[3] against the respondents application claiming that the trademark
MACJOY & DEVICE so resembles its corporate logo, otherwise known as the
Golden Arches or M design, and its marks McDonalds, McChicken, MacFries,
BigMac, McDo, McSpaghetti, McSnack, and Mc, (hereinafter collectively known as
the MCDONALDS marks) such that when used on identical or related goods, the
trademark applied for would confuse or deceive purchasers into believing that
the goods originate from the same source or origin. Likewise, the petitioner
alleged that the respondents use and adoption in bad faith of the MACJOY &
DEVICE mark would falsely tend to suggest a connection or affiliation with
petitioners restaurant services and food products, thus, constituting a fraud upon
the general public and further cause the dilution of the distinctiveness of
petitioners registered and internationally recognized MCDONALDS marks to its
prejudice and irreparable damage. The application and the opposition thereto
was docketed as Inter Partes Case No. 3861.

Respondent denied the aforementioned allegations of the petitioner and averred

that it has used the mark MACJOY for the past many years in good faith and has
spent considerable sums of money for said marks extensive promotion in tri-
media, especially in Cebu City where it has been doing business long before the
petitioner opened its outlet thereat sometime in 1992; and that its use of said
mark would not confuse affiliation with the petitioners restaurant services and
food products because of the differences in the design and detail of the two (2)
marks.

In a decision[4] dated December 28, 1998, the IPO, ratiocinating that the
predominance of the letter M, and the prefixes Mac/Mc in both the MACJOY and
the MCDONALDS marks lead to the conclusion that there is confusing similarity
between them especially since both are used on almost the same products
falling under classes 29 and 30 of the International Classification of Goods, i.e.,
food and ingredients of food, sustained the petitioners opposition and rejected
the respondents application, viz:
WHEREFORE, the Opposition to the registration of the mark MACJOY & DEVICE for
use in fried chicken and chicken barbecue, burgers, fries, spaghetti, palabok,
tacos, sandwiches, halo-halo, and steaks is, as it is hereby, SUSTAINED.
Accordingly, Application Serial No. 75274 of the herein Respondent-Applicant is
REJECTED.

Let the filewrapper of MACJOY subject matter of this case be sent to the
Administrative, Financial and Human Resources Development Bureau for
appropriate action in accordance with this Decision, with a copy to be furnished
the Bureau of Trademarks for information and to update its record.

SO ORDERED.

In time, the respondent moved for a reconsideration but the IPO denied the
motion in its Order[5] of January 14, 2000.

Therefrom, the respondent went to the CA via a Petition for Review with prayer
for Preliminary Injunction[6] under Rule 43 of the Rules of Court, whereat its
appellate recourse was docketed as CA-G.R. SP No. 57247.

Finding no confusing similarity between the marks MACJOY and MCDONALDS, the
CA, in its herein assailed Decision[7] dated July 29, 2004, reversed and set aside
the appealed IPO decision and order, thus:

WHEREFORE, in view of the foregoing, judgment is hereby rendered by us

REVERSING and SETTING ASIDE the Decision of the IPO dated 28 December 1998
and its Order dated 14 January 2000 and ORDERING the IPO to give due course
to petitioners Application Serial No. 75274.

SO ORDERED.
Explains the CA in its decision:

xxx, it is clear that the IPO brushed aside and rendered useless the glaring and
drastic differences and variations in style of the two trademarks and even
decreed that these pronounced differences are miniscule and considered them to
have been overshadowed by the appearance of the predominant features such
as M, Mc, and Mac appearing in both MCDONALDS and MACJOY marks. Instead of
taking into account these differences, the IPO unreasonably shrugged off these
differences in the device, letters and marks in the trademark sought to be
registered. The IPO brushed aside and ignored the following irrefutable facts and
circumstances showing differences between the marks of MACJOY and
MCDONALDS. They are, as averred by the petitioner [now respondent]:

1. The word MacJoy is written in round script while the word McDonalds is written
in single stroke gothic;

2. The word MacJoy comes with the picture of a chicken head with cap and
bowtie and wings sprouting on both sides, while the word McDonalds comes with
an arches M in gold colors, and absolutely without any picture of a chicken;

3. The word MacJoy is set in deep pink and white color scheme while McDonalds
is written in red, yellow and black color combination;

4. The faade of the respective stores of the parties are entirely different. Exhibits
1 and 1-A, show that [respondents] restaurant is set also in the same bold,
brilliant and noticeable color scheme as that of its wrappers, containers, cups,
etc., while [petitioners] restaurant is in yellow and red colors, and with the
mascot of Ronald McDonald being prominently displayed therein. (Words in
brackets supplied.)

Petitioner promptly filed a motion for reconsideration. However, in its similarly

challenged Resolution[8] of November 12, 2004, the CA denied the motion, as it
further held:

Whether a mark or label of a competitor resembles another is to be determined

by an inspection of the points of difference and resemblance as a whole, and not
merely the points of resemblance. The articles and trademarks employed and
used by the [respondent] Macjoy Fastfood Corporation are so different and
distinct as to preclude any probability or likelihood of confusion or deception on
the part of the public to the injury of the trade or business of the [petitioner]
McDonalds Corporation. The Macjoy & Device mark is dissimilar in color, design,
spelling, size, concept and appearance to the McDonalds marks. (Words in
brackets supplied.)

Hence, the petitioners present recourse on the following grounds:

I.

THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS MACJOY &

DEVICE MARK IS NOT CONFUSINGLY SIMILAR TO PETITIONERS McDONALDS
MARKS. IT FAILED TO CORRECTLY APPLY THE DOMINANCY TEST WHICH HAS BEEN
CONSISTENTLY APPLIED BY THIS HONORABLE COURT IN DETERMINING THE
EXISTENCE OF CONFUSING SIMILARITY BETWEEN COMPETING MARKS.

A. The McDonalds Marks belong to a well-known and established family of marks

distinguished by the use of the prefix Mc and/or Mac and the corporate M logo
design.

B. The prefix Mc and/or Mac is the dominant portion of both Petitioners

McDonalds Marks and the Respondents Macjoy & Device mark. As such, the
marks are confusingly similar under the Dominancy Test.

C. Petitioners McDonalds Marks are well-known and world-famous marks which

must be protected under the Paris Convention.

II.

THE COURT OF APPEALS ERRED IN RULING THAT THE DECISION OF THE IPO
DATED 28 DECEMBER 1998 AND ITS ORDER DATED 14 JANUARY 2000 WERE NOT
BASED ON SUBSTANTIAL EVIDENCE.

In its Comment,[9] the respondent asserts that the petition should be dismissed
outright for being procedurally defective: first, because the person who signed
the certification against forum shopping in behalf of the petitioner was not
specifically authorized to do so, and second, because the petition does not
present a reviewable issue as what it challenges are the factual findings of the
CA. In any event, the respondent insists that the CA committed no reversible
error in finding no confusing similarity between the trademarks in question.

The petition is impressed with merit.

Contrary to respondents claim, the petitioners Managing Counsel, Sheila Lehr,

was specifically authorized to sign on behalf of the petitioner the Verification and
Certification[10] attached to the petition. As can be gleaned from the petitioners
Board of Directors Resolution dated December 5, 2002, as embodied in the
Certificate of the Assistant Secretary dated December 21, 2004,[11] Sheila Lehr
was one of those authorized and empowered to execute and deliver for and on
behalf of [the petitioner] all documents as may be required in connection with x
x x the protection and maintenance of any foreign patents, trademarks, trade-
names, and copyrights owned now or hereafter by [the petitioner], including, but
not limited to, x x x documents required to institute opposition or cancellation
proceedings against conflicting trademarks, and to do such other acts and things
and to execute such other documents as may be necessary and appropriate to
effect and carry out the intent of this resolution. Indeed, the afore-stated
authority given to Lehr necessarily includes the authority to execute and sign the
mandatorily required certification of non-forum shopping to support the instant
petition for review which stemmed from the opposition proceedings lodged by
the petitioner before the IPO. Considering that the person who executed and
signed the certification against forum shopping has the authority to do so, the
petition, therefore, is not procedurally defective.
As regards the respondents argument that the petition raises only questions of
fact which are not proper in a petition for review, suffice it to say that the
contradictory findings of the IPO and the CA constrain us to give due course to
the petition, this being one of the recognized exceptions to Section 1, Rule 45 of
the Rules of Court. True, this Court is not the proper venue to consider factual
issues as it is not a trier of facts.[12] Nevertheless, when the factual findings of
the appellate court are mistaken, absurd, speculative, conjectural, conflicting,
tainted with grave abuse of discretion, or contrary to the findings culled by the
court of origin,[13] as here, this Court will review them.

The old Trademark Law, Republic Act (R.A.) No. 166, as amended, defines a
trademark as 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.[14]

Under the same law, the registration of a trademark is subject to the provisions
of Section 4 thereof, paragraph (d) of which is pertinent to this case. The
provision reads:

Section 4. Registration of trademarks, trade-names and service-marks on the

principal register. There is hereby established a register of trademarks,
tradenames and service-marks which shall be known as the principal register.
The owner of the trade-mark, trade-name or service-mark used to distinguish his
goods, business or services of others shall have the right to register the same on
the principal register, unless it:

xxx xxx xxx

(d) Consists of or comprises a mark or trade-name which so resembles a mark or

trade-name registered in the Philippines or a mark or trade-name previously
used in the Philippines by another and not abandoned, as to be likely, when
applied to or used in connection with the goods, business or services of the
applicant, to cause confusion or mistake or to deceive purchasers;

xxx xxx xxx

Essentially, the issue here is whether there is a confusing similarity between the
MCDONALDS marks of the petitioner and the respondents MACJOY & DEVICE
trademark when applied to Classes 29 and 30 of the International Classification
of Goods, i.e., food and ingredients of food.

In determining similarity and likelihood of confusion, jurisprudence has

developed two tests, the dominancy test and the holistic test.[15] The
dominancy test focuses on the similarity of the prevalent features of the
competing trademarks that might cause confusion or deception.[16] In contrast,
the holistic test requires the court to consider the entirety of the marks as
applied to the products, including the labels and packaging, in determining
confusing similarity.[17] Under the latter test, a comparison of the words is not
the only determinant factor.[18]

Here, the IPO used the dominancy test in concluding that there was confusing
similarity between the two (2) trademarks in question as it took note of the
appearance of the predominant features M, Mc and/or Mac in both the marks. In
reversing the conclusion reached by the IPO, the CA, while seemingly applying
the dominancy test, in fact actually applied the holistic test. The appellate court
ruled in this wise:
Applying the Dominancy test to the present case, the IPO should have taken into
consideration the entirety of the two marks instead of simply fixing its gaze on
the single letter M or on the combinations Mc or Mac. A mere cursory look of the
subject marks will reveal that, save for the letters M and c, no other similarity
exists in the subject marks.

We agree with the [respondent] that it is entirely unwarranted for the IPO to
consider the prefix Mac as the predominant feature and the rest of the designs in
[respondents] mark as details. Taking into account such paramount factors as
color, designs, spelling, sound, concept, sizes and audio and visual effects, the
prefix Mc will appear to be the only similarity in the two completely different
marks; and it is the prefix Mc that would thus appear as the miniscule detail.
When pitted against each other, the two marks reflect a distinct and disparate
visual impression that negates any possible confusing similarity in the mind of
the buying public. (Words in brackets supplied.)

Petitioner now vigorously points out that the dominancy test should be the one
applied in this case.

We agree.

In trademark cases, particularly in ascertaining whether one trademark is

confusingly similar to another, no set rules can be deduced because each case
must be decided on its merits.[19] In such cases, even more than in any other
litigation, precedent must be studied in the light of the facts of the particular
case.[20] That is the reason why in trademark cases, jurisprudential precedents
should be applied only to a case if they are specifically in point.[21]

While we agree with the CAs detailed enumeration of differences between the
two (2) competing trademarks herein involved, we believe that the holistic test is
not the one applicable in this case, the dominancy test being the one more
suitable. In recent cases with a similar factual milieu as here, the Court has
consistently used and applied the dominancy test in determining confusing
similarity or likelihood of confusion between competing trademarks.[22]

Notably, in McDonalds Corp. v. LC Big Mak Burger, Inc.,[23] a case where the
trademark Big Mak was found to be confusingly similar with the Big Mac mark of
the herein the petitioner, the Court explicitly held:

This Court, xxx, has relied on the dominancy test rather than the holistic test.
The dominancy test considers the dominant features in the competing marks in
determining whether they are confusingly similar. Under the dominancy test,
courts give greater weight to the similarity of the appearance of the product
arising from the adoption of the dominant features of the registered mark,
disregarding minor differences. Courts will consider more the aural and visual
impressions created by the marks in the public mind, giving little weight to
factors like prices, quality, sales outlets and market segments.

Moreover, in Societe Des Produits Nestle, S.A. v. CA[24] the Court, applying the
dominancy test, concluded that the use by the respondent therein of the word
MASTER for its coffee product FLAVOR MASTER was likely to cause confusion with
therein petitioners coffee products MASTER ROAST and MASTER BLEND and
further ruled:

xxx, the totality or holistic test is contrary to the elementary postulate of the law
on trademarks and unfair competition that confusing similarity is to be
determined on the basis of visual, aural, connotative comparisons and overall
impressions engendered by the marks in controversy as they are encountered in
the marketplace. The totality or holistic test only relies on visual comparisons
between two trademarks whereas the dominancy test relies not only on the
visual but also on the aural and connotative comparisons and overall impressions
between the two trademarks.

Applying the dominancy test to the instant case, the Court finds that herein
petitioners MCDONALDS and respondents MACJOY marks are confusingly similar
with each other such that an ordinary purchaser can conclude an association or
relation between the marks.
To begin with, both marks use the corporate M design logo and the prefixes Mc
and/or Mac as dominant features. The first letter M in both marks puts emphasis
on the prefixes Mc and/or Mac by the similar way in which they are depicted i.e.
in an arch-like, capitalized and stylized manner.[25]

For sure, it is the prefix Mc, an abbreviation of Mac, which visually and aurally
catches the attention of the consuming public. Verily, the word MACJOY attracts
attention the same way as did McDonalds, MacFries, McSpaghetti, McDo, Big Mac
and the rest of the MCDONALDS marks which all use the prefixes Mc and/or Mac.

Besides and most importantly, both trademarks are used in the sale of fastfood
products. Indisputably, the respondents trademark application for the MACJOY &
DEVICE trademark covers goods under Classes 29 and 30 of the International
Classification of Goods, namely, fried chicken, chicken barbeque, burgers, fries,
spaghetti, etc. Likewise, the petitioners trademark registration for the
MCDONALDS marks in the Philippines covers goods which are similar if not
identical to those covered by the respondents application.
Thus, we concur with the IPOs findings that:

In the case at bar, the predominant features such as the M, Mc, and Mac
appearing in both McDonalds marks and the MACJOY & DEVICE easily attract the
attention of would-be customers. Even non-regular customers of their fastfood
restaurants would readily notice the predominance of the M design, Mc/Mac
prefixes shown in both marks. Such that the common awareness or perception of
customers that the trademarks McDonalds mark and MACJOY & DEVICE are one
and the same, or an affiliate, or under the sponsorship of the other is not far-
fetched.

The differences and variations in styles as the device depicting a head of chicken
with cap and bowtie and wings sprouting on both sides of the chicken head, the
heart-shaped M, and the stylistic letters in MACJOY & DEVICE; in contrast to the
arch-like M and the one-styled gothic letters in McDonalds marks are of no
moment. These minuscule variations are overshadowed by the appearance of
the predominant features mentioned hereinabove.

Thus, with the predominance of the letter M, and prefixes Mac/Mc found in both
marks, the inevitable conclusion is there is confusing similarity between the
trademarks Mc Donalds marks and MACJOY AND DEVICE especially considering
the fact that both marks are being used on almost the same products falling
under Classes 29 and 30 of the International Classification of Goods i.e. Food and
ingredients of food.

With the existence of confusing similarity between the subject trademarks, the
resulting issue to be resolved is who, as between the parties, has the rightful
claim of ownership over the said marks.

We rule for the petitioner.

A mark is valid if it is distinctive and hence not barred from registration under the
Trademark Law. However, once registered, not only the marks validity but also
the registrants ownership thereof is prima facie presumed.[26]

Pursuant to Section 37[27] of R.A. No. 166, as amended, as well as the provision
regarding the protection of industrial property of foreign nationals in this country
as embodied in the Paris Convention[28] under which the Philippines and the
petitioners domicile, the United States, are adherent-members, the petitioner
was able to register its MCDONALDS marks successively, i.e., McDonalds in 04
October, 1971[29]; the corporate logo which is the M or the golden arches design
and the McDonalds with the M or golden arches design both in 30 June 1977[30];
and so on and so forth.[31]

On the other hand, it is not disputed that the respondents application for
registration of its trademark MACJOY & DEVICE was filed only on March 14, 1991
albeit the date of first use in the Philippines was December 7, 1987.[32]

Hence, from the evidence on record, it is clear that the petitioner has duly
established its ownership of the mark/s.
Respondents contention that it was the first user of the mark in the Philippines
having used MACJOY & DEVICE on its restaurant business and food products
since December, 1987 at Cebu City while the first McDonalds outlet of the
petitioner thereat was opened only in 1992, is downright unmeritorious. For the
requirement of actual use in commerce x x x in the Philippines before one may
register a trademark, trade-name and service mark under the Trademark
Law[33] pertains to the territorial jurisdiction of the Philippines and is not only
confined to a certain region, province, city or barangay.

Likewise wanting in merit is the respondents claim that the petitioner cannot
acquire ownership of the word Mac because it is a personal name which may not
be monopolized as a trademark as against others of the same name or surname.
As stated earlier, once a trademark has been registered, the validity of the mark
is prima facie presumed. In this case, the respondent failed to overcome such
presumption. We agree with the observations of the petitioner regarding the
respondents explanation that the word MACJOY is based on the name of its
presidents niece, Scarlett Yu Carcell. In the words of the petitioner:

First of all, Respondent failed to present evidence to support the foregoing claim
which, at best, is a mere self-serving assertion. Secondly, it cannot be denied
that there is absolutely no connection between the name Scarlett Yu Carcel and
MacJoy to merit the coinage of the latter word. Even assuming that the word
MacJoy was chosen as a term of endearment, fondness and affection for a certain
Scarlett Yu Carcel, allegedly the niece of Respondents president, as well as to
supposedly bring good luck to Respondents business, one cannot help but
wonder why out of all the possible letters or combinations of letters available to
Respondent, its president had to choose and adopt a mark with the prefix Mac as
the dominant feature thereof. A more plausible explanation perhaps is that the
niece of Respondents president was fond of the food products and services of the
Respondent, but that is beside the point. [34]

By reason of the respondents implausible and insufficient explanation as to how

and why out of the many choices of words it could have used for its trade-name
and/or trademark, it chose the word MACJOY, the only logical conclusion
deducible therefrom is that the respondent would want to ride high on the
established reputation and goodwill of the MCDONALDs marks, which, as applied
to petitioners restaurant business and food products, is undoubtedly beyond
question.
Thus, the IPO was correct in rejecting and denying the respondents application
for registration of the trademark MACJOY & DEVICE. As this Court ruled in
Faberge Inc. v. IAC,[35] citing Chuanchow Soy & Canning Co. v. Dir. of Patents
and Villapanta:[36]

When one applies for the registration of a trademark or label which is almost the
same or very closely resembles one already used and registered by another, the
application should be rejected and dismissed outright, even without any
opposition on the part of the owner and user of a previously registered label or
trademark, this not only to avoid confusion on the part of the public, but also to
protect an already used and registered trademark and an established goodwill.
WHEREFORE, the instant petition is GRANTED. Accordingly, the assailed Decision
and Resolution of the Court of Appeals in CA-G.R. SP NO. 57247, are REVERSED
and SET ASIDE and the Decision of the Intellectual Property Office in Inter Partes
Case No. 3861 is REINSTATED.
No pronouncement as to costs.

SO ORDERED.