1

LAW ON COPYRIGHT
Term of Protection in General
Term of Protection
SEC. 213. Term of Protection.
213.1. Subject to the provisions of Subsections 213.2 to 213.5, the copyright in works under Sections 172 and 173 shall be protected
during the life of the author and for fifty (50) years after his death. This rule also applies to posthumous works.

Atty Q: We initially discussed few meetings back that the term of protection for copyright is during the lifetime of the author and for 50
years after death. So, the term of protection for copyright is longer. With respect to patent, the period is 20 years. In a trademark, the
term is 10 years. If you recall, an effective statute pertaining to intellectual property protection should have a term limit. It should be part
of the basic principles, acceptable in international law. Why is there a term limit? What happens after the term expires? The work,
technically, the term is, it becomes forfeited - the exclusive rights of the copyright owner are forfeited. And the copyright is now forming
part of the public domain. That is in keeping with the primary purpose. Information, ideas all types of intellectual properties are meant to
be shared. No one should have a perpetual right. Thats the basic policy. That is why there is need a need to set a period for exclusivity.

We have learned so far that the characteristic of your right involving copyright has a term.

What about joint authorship? More than one copyright owners.

Joint Authorship
213.2. In case of works of joint authorship, the economic rights shall be protected during the life of the last surviving author and
for fifty (50) years after his death.

Anonymous or Pseudonymous Works

213.3. In case of anonymous or pseudonymous works, the copyright shall be protected for fifty (50) years from the date on which
the work was first lawfully published: Provided, That where, before the expiration of the said period, the author's identity is
revealed or is no longer in doubt, the provisions of Subsections 213.1 and 213.2 shall apply, as the case may be: Provided,
further, That such works if not published before shall be protected for fifty (50) years counted from the making of the work.

Atty Q: In case of anonymous or pseudonymous, why is it not based on the lifetime of the author? Its understandable that it should be
based on the date of publication. You cannot base it on the author because we dont know who the author is. Provided, the qualifying
phrase or clause. That where, before the expiration of the said period, the author's identity is revealed or is no longer in doubt. Then
you apply the general rule, either 213.1 or 213.2. Provided, further, That such works if not published before shall be protected for fifty
(50) years counted from the making of the work. So how would you determine when the work was created, that is when your certificate
of registration becomes helpful. If you recall on the form, there is the entry that you should fill-up.the date when the work was created.
Its different from the date of publication.

What about works of applied art?

Works of Applied Art
213.4. In case of works of applied art the protection shall be for a period of twenty-five (25) years from the date of making.

What about photographic works?

Photographic Works
213.5. In case of photographic works, the protection shall be for fifty (50) years from publication of the work and, if unpublished,
fifty (50) years from the making.

Atty Q: You can see now the value of the certificate of registration. That is to establish clearly the date.

In case of audiovisual works? Its the same as photographic works.

Audio-visual works
213.6. In case of audio-visual works including those produced by process analogous to photography or any process for making
audio-visual recordings, the term shall be fifty (50) years from date of publication and, if unpublished, from the date of making.

How do you calculate the term of protection? Based on the law, will you base it from the date of the death of the author?
Calculation of Term
SEC. 214. Calculation of Term. - The term of protection subsequent to the death of the author provided in the preceding Section
shall run from the date of his death or of publication, but such terms shall always be deemed to begin on the first day of January
of the year following the event which gave rise to them.
 2

Atty. Q: So, how would you compute after the death of the author? On the first day of January. In the case of Prince, when will you start
counting the 50 year period? He died sometime in June. So will you start counting from June? No. You start counting on January 2017.

What about term of protection for the neighboring rights? Neighboring rights or related rights pertains to performers, producers of some
recordings, etc. Why does the law give them protection? Even though they are not technically considered as authors, nevertheless the
law gives accord them protection, because of their contribution to the work itself. There are certain types of works that are best
expressed through persons who are equipped with respect to skill or talent. Oftentimes, the songs being interpreted, the interpretation
is better than the original. The classic example is Whitney Houston. Whitney Houston is not the original interpreter of the song, I Will
Always Love You. The original artist is Dolly Parton. Im just making a point that performers, those who are under neighboring rights,
are essential especially on how it is being expressed. That is why they are afforded certain rights. Without them, the work will not be as
popular more than what the author originally rendition. We also cannot discount that sometimes, the interpretation are worse than the
original. What are terms of protection for performers?

Term of Protection for Performers, Producers and Broadcasting Organizations

SEC. 215. Term of Protection for Performers, Producers and Broadcasting Organizations.
215.1. The rights granted to performers and producers of sound recordings under this law shall expire:
(a) For performances not incorporated in recordings, fifty (50) years from the end of the year in which the performance took place; and
(b) For sound or image and sound recordings and for performances incorporated therein, fifty (50) years from the end of the year in
which the recording took place.

215.2. In case of broadcasts, the term shall be twenty (20) years from the date the broadcast took place. The extended term shall be
applied only to old works with subsisting protection under the prior law.

Atty Q: If you recall in the case Habana vs. Robles, the court already explained what infringement is. So what did the Supreme Court
say? How was it being defined? Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the
copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous term in this connection,
consists in the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred
by statute on the owner of the copyright.

How do you consider a specific act to fall under infringement? In other words, what are the guidelines that you should consider? Does
the law gives us the definition of infringement? The law only provides several acts that are considered as infringement acts. The
exclusive rights of the copyright owner are economic rights and moral rights. If you violate any of those rights automatic it becomes an
act of infringement. You violate it when you perform it without consent. If your acts fall under the limitations, such as, fair use. If it does
not falls under the limitations and it does not have consent, then it becomes an infringement.

The new terms introduced under the amendment law, are:

171.12. Technological measure means any technology, device or component that, in the normal course of its operation, restricts acts
in respect of a work, performance or sound recording, which are not authorized by the authors, performers or producers of sound
recordings concerned or permitted by law;

Atty Q: This is very relevant when it becomes to digital works. When you buy a computer software, you are provided by a code, or a
password. But your authorization is only limited to one. Any reproduction more than that, you can no longer download or copy. That is
an example of technological measure. The owner only limits a certain number of reproduction. Why is it important to understand this?
Because the law says that if you circumvent this technological measure, youre liability is greater. If you will analyze carefully, when you
say restrict, probably, your authorization is only to view and not to download.

What is rights management information?

171.13. Rights management information means information which identifies the work, sound recording or performance; the author of
the work, producer of the sound recording or performer of the performance; the owner of any right in the work, sound recording or
performance; or information about the terms and conditions of the use of the work, sound recording or performance; and any number or
code that represent such information, when any of these items is attached to a copy of the work, sound recording or fixation of
performance or appears in conjunction with the communication to the public of a work, sound recording or performance.

In effect, it is a notice to the user of the very important information pertaining to the work, namely the author of the work to notify any
potential user that this work is copyrighted. And how it is considered as a rights management information? It should be attached to the
work itself.
 3
Infringement
How committed
SEC. 216. Infringement. Any person infringes a right protected under this Act when one:
(a) Directly commits an infringement;
(b) Benefits from the infringing activity of another person who commits an infringement if the person benefiting has been given notice
of the infringing activity and has the right and ability to control the activities of the other person;
(c) With knowledge of infringing activity, induces, causes or materially contributes to the infringing conduct of another.

MICROSOFT CORP. vs. HWANG

G.R. No. 147043, June 21, 2005

FACTS: Microsoft Corporation ("Microsoft"), a Delaware, United States Corporation, owns the copyright and trademark to several
computer software. Beltron Computer Philippines, Inc. ("Beltron") and Taiwan Machinery Display & Trade Center, Inc. ("TMTC") are
domestic corporations. In May 1993, Microsoft and Beltron entered into a Licensing Agreement ("Agreement"). Under Section 2(a) of
the Agreement, as amended in January 1994, Microsoft authorized Beltron, for a fee, to:
(1) reproduce and install no more than one (1) copy of Microsoft software on each Customer System hard disk or Read Only Memory
("ROM")
(2) distribute directly or indirectly and license copies of the Product in object code form to end users

The Agreement also authorized Microsoft and Beltron to terminate the contract if the other fails to comply with any of the Agreements
provisions. Microsoft terminated the Agreement effective 22 June 1995 for Beltons non-payment of royalties. Afterwards, Microsoft
learned that Beltron were illegally copying and selling Microsoft software. Consequently, Microsoft, through its Philippine agent, hired
the services of Pinkerton Consulting Services ("PCS"), a private investigative firm. Microsoft also sought the assistance of the National
Bureau of Investigation ("NBI"). On 10 November 1995, a PCS employee and an NBI agent posing as representatives of a computer
shop, bought computer hardware (central processing unit ("CPU") and computer monitor) and software (12 computer disks ("CDs") in
read-only memory ("ROM") format) from Beltron. The CPU contained pre-installed Microsoft Windows 3.1 and MS-DOS software. The
12 CD-ROMs, encased in plastic containers with Microsoft packaging, also contained Microsoft software. At least two of the CD-ROMs
were "installers," so-called because they contain several software (Microsoft only or both Microsoft and nonMicrosoft). The PCS
employee and the NBI agent were not given the Microsoft end-user license agreements, users manuals, registration cards or
certificates of authenticity for the articles they purchased. The receipt issued to them for the CPU and monitor bore the heading
"T.M.T.C. (PHILS.) INC. BELTRON COMPUTER." The NBI searched the premises of Beltron and TMTC and seized several computer-
related hardware, software, accessories, and paraphernalia based on the search warrant applied by Microsoft. Based on the articles
obtained from Beltron and TMC, Microsoft and a certain Lotus Development Corporation ("Lotus Corporation") charged Beltron and
TMC before the Department of Justice ("DOJ") with copyright infringement under Section 5(A) in relation to Section 29 of Presidential
Decree No. 49, as amended, ("PD 49") and with unfair competition under Article 189(1) of the Revised Penal Code. Microsoft alleged
that respondents illegally copied and sold Microsoft software.

ISSUE: Whether or not Beltron and TMC are liable for copyright infringement and unfair competition?

HELD: The gravamen of copyright infringement is not merely the unauthorized "manufacturing" of intellectual works but rather the
unauthorized performance of any of the acts covered by Section 5. Hence, any person who performs any of the acts under Section 5
without obtaining the copyright owners prior consent renders himself civilly and criminally liable for copyright infringement. Infringement
of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law,
and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person, without the
consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright.
Significantly, under Section 5(A), a copyright owner is vested with the exclusive right to "copy, distribute, multiply, [and] sell" his
intellectual works.

The elements of unfair competition under Article 189(1)43 of the Revised Penal Code are:
(a) That the offender gives his goods the general appearance of the goods of another manufacturer or dealer;
(b) That the general appearance is shown in the:
(1) goods themselves, or in the
(2) wrapping of their packages, or in the
(3) device or words therein, or in
(4) any other feature of their appearance
(c) That the offender offers to sell or sells those goods or gives other persons a chance or opportunity to do the same with a like
purpose
(d) [; and] That there is actual intent to deceive the public or defraud a competitor.
 4

MICROSOFT CORP. vs. MAXICORP INC.

438 SCRA 224

FACTS: In 1996, Dominador Samiano, Jr., an agent of the National Bureau of Investigation (NBI) conducted a surveillance against
Maxicorp, Inc. He observed that Microsoft Softwares (Windows Operating Systems) were being produced and packaged within the
premises of Maxicorp. Samiano, together with a civilian witness (John Benedict Sacriz) then bought a computer unit from Maxicorp. The
unit was pre-installed with a pirated copy of Windows. For their purchase, they were issued a receipt, however, the receipt was in the
name of a certain Joel Diaz. Subsequently, Samiano applied for a search warrant before the RTC. He brought with him Sacriz as
witness. He also brought the computer unit they bought as evidence as well as the receipt. He even added an additional witness
(Felixberto Pante), a computer technician, who showed the judge that the software in the computer unit bought by Samiano from
Maxicorp was pirated. The RTC judge, convinced that there is a probable cause for a case of copyright infringement and unfair
competition committed by Maxicorp, issued the corresponding warrant. Maxicorp assailed the legality of the warrant before the Court of
Appeals. The Court of Appeals ruled in favor of Maxicorp and in its decision it highlighted the fact that the receipt issued was not in
Samianos or Sacriz name hence the proceeding in the trial court was infirm from the onset.

ISSUE:
a.) Whether or not the Court of Appeals is correct
b.) Whether or not Maxicorp committed copyright infringement and unfair competition.

HELD:
a.) No. The testimonies of the two witnesses, coupled with the object and documentary evidence they presented, are sufficient to
establish the existence of probable cause. From what they have witnessed, there is reason to believe that Maxicorp engaged in
copyright infringement and unfair competition to the prejudice of Microsoft. Both NBI Agent Samiano and Sacriz were clear and insistent
that the counterfeit software were not only displayed and sold within Maxicorps premises, they were also produced, packaged and in
some cases, installed there.

The fact that the receipt issued was not in Samianos name nor was it in Sacriz name does not render the issuance of the warrant void.
No law or rule states that probable cause requires a specific kind of evidence. No formula or fixed rule for its determination exists.
Probable cause is determined in the light of conditions obtaining in a given situation. Thus, it was improper for the Court of Appeals to
reverse the RTCs findings simply because the sales receipt evidencing NBI Agent Samianos purchase of counterfeit goods is not in
his name.

b.) Copyright infringement and unfair competition are not limited to the act of selling counterfeited goods. They cover a whole range of
acts, from copying, assembling, packaging to marketing, including the mere offering for sale of the counterfeit goods.

Remedies for Infringement

216.1. Remedies for Infringement Any person infringing a right protected under this law shall be liable:
(a) To an injunction restraining such infringement. The court may also order the defendant to desist from an infringement, among
others, to prevent the entry into the channels of commerce of imported goods that involve an infringement, immediately after
customs clearance of such goods.
(b) To pay to the copyright proprietor or his assigns or heirs such actual damages, including legal costs and other expenses, as he
may have
(i) Circumvents effective technological measures; or
(ii) Having reasonable grounds to know that it will induce, enable, facilitate or conceal the infringement, remove or alter any
electronic rights management information from a copy of a work, sound recording, or fixation of a performance, or
distribute, import for distribution, broadcast, or communicate to the public works or copies of works without authority,
knowing that electronic rights management information has been removed or altered without authority.

(c) Deliver under oath, for impounding during the pendency of the action, upon such terms and conditions as the court may prescribe,
sales invoices and other documents evidencing sales, all articles and their packaging alleged to infringe a copyright and
implements for making them.
(d) Deliver under oath for destruction without any compensation all infringing copies or devices, as well as all plates, molds, or other
means for making such infringing copies as the court may order.
(e) Such other terms and conditions, including the payment of moral and exemplary damages, which the court may deem proper, wise
and equitable and the destruction of infringing copies of the work even in the event of acquittal in a criminal case.
 5
The copyright owner may elect, at any time before final judgment is rendered, to recover instead of actual damages and profits, an
award of statutory damages for all infringements involved in an action in a sum equivalent to the filing fee of the infringement action but
not less than Fifty thousand pesos (Php50,000.00). In awarding statutory damages, the court may consider the following factors:
(1) The nature and purpose of the infringing act;
(2) The flagrancy of the infringement;
(3) Whether the defendant acted in bad faith;
(4) The need for deterrence;
(5) Any loss that the plaintiff has suffered or is likely to suffer by reason of the infringement; and
(6) Any benefit shown to have accrued to the defendant by reason of the infringement.

In case the infringer was not aware and had no reason to believe that his acts constitute an infringement of copyright, the court in its
discretion may reduce the award of statutory damages to a sum of not more than Ten thousand pesos (Php10,000.00): Provided, That
the amount of damages to be awarded shall be doubled against any person who:
(i) Circumvents effective technological measures; or
(ii) Having reasonable grounds to know that it will induce, enable, facilitate or conceal the infringement, remove or alter any
electronic rights management information from a copy of a work, sound recording, or fixation of a performance, or distribute,
import for distribution, broadcast, or communicate to the public works or copies of works without authority, knowing that
electronic rights management information has been removed or altered without authority.

216.2. In an infringement action, the court shall also have the power to order the seizure and impounding of any article which may serve
as evidence in the court proceedings, in accordance with the rules on search and seizure involving violations of intellectual property
rights issued by the Supreme Court.

The foregoing shall not preclude an independent suit for relief by the injured party by way of damages, injunction, accounts or
otherwise.

HABANA vs. ROBLES

310 SCRA 522 (1999)

FACTS: Habana is the author of the copyrighted book entitled College English for Today (CET). Robles and Goodwill is the author and
publisher of the book entitled Developing English Proficiency (DEP). When Habana et al. try to revise their work they encountered by
chance that the work of Robles (DEP) is similar of the contents, scheme of presentation, illustrations and illustrative examples in their
own book. After an itemized examination and comparison of the two books (CET and DEP), Habana found that several pages of the
Robles book are similar, if not all together a copy of Habanas book, which is a case of plagiarism and copyright infringement. Habana
then made demands for damages against respondents and also demanded that they cease and desist from further selling and
distributing to the general public the infringed copies of Robles works. However, Robles ignored the demands, hence, Habana et al.
filed with the Regional Trial Court, Makati, a complaint for Infringement and/or unfair competition with damages against private
respondents.

ISSUE: Whether or not, despite the apparent textual, thematic and sequential similarity between DEP and CET, Robles committed no
copyright infringement?

HELD: No, Robles still committed copyright infringement. Robles act of lifting from the book of petitioners substantial portions of
discussions and examples, and her failure to acknowledge the same in her book is an infringement of petitioners copyrights. In cases
of infringement, copying alone is not what is prohibited. The copying must produce an injurious effect. Here, the injury consists in that
Robles lifted from Habanas book materials that were the result of the latters research work and compilation and misrepresented them
as her own. She circulated the book DEP for commercial use and did not acknowledge Habana as her source.
Hence, there is a clear case of appropriation of copyrighted work for her benefit that Robles committed. Habanas work as authors is
the product of their long and assiduous research and for another to represent it as her own is injury enough. In copyrighting books the
purpose is to give protection to the intellectual product of an author. This is precisely what the law on copyright protected, under Section
184.1 (b). Quotations from a published work if they are compatible with fair use and only to the extent justified by the purpose, including
quotations from newspaper articles and periodicals in the form of press summaries are allowed provided that the source and the name
of the author, if appearing on the work, are mentioned.

COLUMBIA PICTURES INC. vs. CA

262 SCRA 219
 6
FACTS: In 1986, the Videogram Regulatory Board (VRB) applied for a warrant against Jose Jinco (Jingco), owner of Showtime
Enterprises for allegedly pirating movies produced and owned by Columbia Pictures and other motion picture companies. Jingco filed a
motion to quash the search warrant but the same was denied in 1987. Subsequently, Jinco filed an Urgent Motion to Lift the Search
Warrant and Return the Articles Seized. In 1989, the RTC judge granted the motion. The judge ruled that based on the ruling in the
1988 case of 20th Century Fox Film Corporation vs CA, before a search warrant could be issued in copyright cases, the master copy of
the films alleged to be pirated must be attached in the application for warrant.

ISSUE: Whether or not the 20th Century Fox ruling may be applied retroactively in this case.

HELD: No. In 1986, obviously the 1988 case of 20th Century Fox was not yet promulgated. The lower court could not possibly have
expected more evidence from the VRB and Columbia Pictures in their application for a search warrant other than what the law and
jurisprudence, then existing and judicially accepted, required with respect to the finding of probable cause.

The Supreme Court also revisited and clarified the ruling in the 20th Century Fox Case. It is evidently incorrect to suggest, as the ruling
in 20th Century Fox may appear to do, that in copyright infringement cases, the presentation of master tapes of the copyright films is
always necessary to meet the requirement of probable cause for the issuance of a search warrant. It is true that such master tapes are
object evidence, with the merit that in this class of evidence the ascertainment of the controverted fact is made through demonstration
involving the direct use of the senses of the presiding magistrate. Such auxiliary procedure, however, does not rule out the use of
testimonial or documentary evidence, depositions, admissions or other classes of evidence tending to prove the factum probandum,
especially where the production in court of object evidence would result in delay, inconvenience or expenses out of proportion to is
evidentiary value.

In fine, the supposed pronouncement in said case regarding the necessity for the presentation of the master tapes of the copy-righted
films for the validity of search warrants should at most be understood to merely serve as a guidepost in determining the existence of
probable cause in copy-right infringement cases where there is doubt as to the true nexus between the master tape and the pirated
copies. An objective and careful reading of the decision in said case could lead to no other conclusion than that said directive was
hardly intended to be a sweeping and inflexible requirement in all or similar copyright infringement cases.

Criminal Penalties
SEC. 217. Criminal Penalties.
217.1. Any person infringing any right secured by provisions of Part IV of this Act or aiding or abetting such infringement shall be guilty
of a crime punishable by:
(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000) to One hundred fifty
thousand pesos (P150,000) for the first offense.
(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred fifty thousand pesos
(P150,000) to Five hundred thousand pesos (P500,000) for the second offense.
(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from Five hundred thousand pesos (P500,000)
to One million five hundred thousand pesos (P1,500,000) for the third and subsequent offenses.
(d) In all cases, subsidiary imprisonment in cases of insolvency.

217.2. In determining the number of years of imprisonment and the amount of fine, the court shall consider the value of the infringing
materials that the defendant has produced or manufactured and the damage that the copyright owner has suffered by reason of the
infringement: Provided, That the respective maximum penalty stated in Section 217.1. (a), (b) and (c) herein for the first, second, third
and subsequent offense, shall be imposed when the infringement is committed by:
(a) The circumvention of effective technological measures;
(b) The removal or alteration of any electronic rights management information from a copy of a work, sound recording, or fixation of a
performance, by a person, knowingly and without authority; or
(c) The distribution, importation for distribution, broadcast, or communication to the public of works or copies of works, by a person
without authority, knowing that electronic rights management information has been removed or altered without authority.

217.3. Any person who at the time when copyright subsists in a work has in his possession an article which he knows, or ought to
know, to be an infringing copy of the work for the purpose of:
(a) Selling, letting for hire, or by way of trade offering or exposing for sale, or hire, the article;
(b) Distributing the article for purpose of trade, or for any other purpose to an extent that will prejudice the rights of the copyright owner
in the work; or
(c) Trade exhibit of the article in public, shall be guilty of an offense and shall be liable on conviction to imprisonment and fine as
above mentioned.
 7
Atty Q: Last time, we discussed about the affidavit evidence. Affidavit evidence is very important because it will afford the complaining
part the presumption. What are the items that are presumed by the law to be true? Now the presumption applies only if the defendant
does not contest it. So theres no need to establish, because once you have the affidavit evidence, it becomes a proof. But not a
conclusive proof, only disputable proof.

Affidavit Evidence
SEC. 218. Affidavit Evidence
218.1. In an action under this Chapter, an affidavit made before a notary public by or on behalf of the owner of the copyright in any work
or other subject matter and stating that:
(a) At the time specified therein, copyright subsisted in the work or other subject matter;
(b) He or the person named therein is the owner of the copyright; and
(c) The copy of the work or other subject matter annexed thereto is a true copy thereof.

The affidavit shall be admitted in evidence in any proceedings under this Chapter and shall be prima facie proof of the matters therein
stated until the contrary is proved, and the court before which such affidavit is produced shall assume that the affidavit was made by or
on behalf of the owner of the copyright.

218.2. In an action under this Chapter:

(a) Copyright shall be presumed to subsist in the work or other subject matter to which the action relates if the defendant does not put
in issue the question whether copyright subsists in the work or other subject matter; and
(b) Where the subsistence of the copyright is established, the plaintiff shall be presumed to be the owner of the copyright if he claims
to be the owner of the copyright and the defendant does not put in issue the question of his ownership.
(c) Where the defendant, without good faith, puts in issue the questions of whether copyright subsists in a work or other subject matter
to which the action relates, or the ownership of copyright in such work or subject matter, thereby occasioning unnecessary costs or
delay in the proceedings, the court may direct that any costs to the defendant in respect of the action shall not be allowed by him
and that any costs occasioned by the defendant to other parties shall be paid by him to such other parties.

Atty. Q: The law also covers a situation wherein the defendant may not have a plausible defense. For the sake of question in the
subsistence of ownership of the copyright, he can do that. So the rule on disputable presumption will not apply. So the law already
covers the situation wherein the defendant will oppose for the purpose of opposing. What will happen if it is proven that he did not
substantiate his claims pertaining to subsistence of copyright and ownership? The law says, where the defendant, without good faith,
puts in issue the questions of whether copyright subsists in a work or other subject matter to which the action relates, or the ownership
of copyright in such work or subject matter, thereby occasioning unnecessary costs or delay in the proceedings, the court may direct
that any costs to the defendant in respect of the action shall not be allowed by him and that any costs occasioned by the defendant to
other parties shall be paid by him to such other parties.

Presumption of Authorship
SEC. 219. Presumption of Authorship.
219.1. The natural person whose name is indicated on a work in the usual manner as the author shall, in the absence of proof to the
contrary, be presumed to be the author of the work. This provision shall be applicable even if the name is a pseudonym, where the
pseudonym leaves no doubt as to the identity of the author.

219.2. The person or body corporate whose name appears on an audiovisual work in the usual manner shall, in the absence of proof to
the contrary, be presumed to be the maker of said work.

BAYANIHAN MUSIC PHILS., INC. vs. BMG RECORDS

G.R. No. 166337, March 7, 2005

FACTS: Jose Mari Chan (Chan) entered into a contract with Bayanihan Music Philippines, Inc. (Bayanihan), where under the former
assigned to the latter all his rights, interests and participation over his musical composition "Can We Just Stop and Talk A While". Three
years after the parties entered into a similar contract over Chan's other musical composition entitled "Afraid For Love To Fade". On the
strength of the abovementioned contracts, Bayanihan applied for and was granted by the National Library a Certificate of Copyright
Registration for each of the two musical compositions. Apparently, without the knowledge and consent of petitioner Bayanihan, Chan
authorized BMG Records (BMG) to record and distribute the aforementioned musical compositions in a then recently released album of
singer Lea Salonga. Bayanihan informed Chan and BMG of its existing copyrights over the subject musical compositions and the
alleged violation of such right by the two. Demands were made on both to settle the matter with Bayanihan. However no settlement was
reached by the parties. Hence, Bayanihan filed a against Chan and BMG for violation of Section 216 of Republic Act No. 8293,
otherwise known as the Intellectual Property Code of the Philippines, with a prayer for the issuance of Temporary Restraining Order
 8
(TRO) and/or writ of preliminary injunction, enjoining respondent BMG from further recording and distributing the subject musical
compositions in whatever form of musical products, and Chan from further granting any authority to record and distribute the same
musical compositions.

BMG Arguments: (1) the acts of recording and publication sought to be enjoined had already been consummated, thereby rendering
moot Bayanihan's prayer for TRO and/or preliminary injunction; (2) there is no clear showing that petitioner Bayanihan would be greatly
damaged by the refusal of the prayed for TRO and/or preliminary injunction.

Chan Arguments: (1) it was never his intention to divest himself of all his rights and interest over the musical compositions in question;
(2) the contracts he entered into with Bayanihan are mere music publication agreements giving Bayanihan, as assignee, the power to
administer his copyright over his two songs and to act as the exclusive publisher thereof; (3) he was not cognizant of the application
made by and the subsequent grant of copyrights to Bayanihan; (4) Bayanihan was remiss in its obligations under the contracts because
it failed to effectively advertise his musical compositions for almost twenty (20) years, hence, he caused the rescission of said contracts
in 1997.

ISSUES: Whether or not Bayanihan as assignee of the copyrights over the musical compositions in question has a clear legal right to a
writ of preliminary injunction?

HELD: No, Bayanihan has no right for right for injunction over the subject musical compositions.
The issuance of an injunctive writ if the following requisites provided for by law are: (1) there must be a right in esse or the existence of
a right to be protected; (2) the act against which the injunction is to be directed is a violation of such right, the trial court threaded the
correct path in denying petitioner's prayer therefor.
Chan, the composer and author of the lyrics of the two (2) songs, is protected by the mere fact alone that he is the creator thereof,
conformably with Republic Act No. 8293, otherwise known as the Intellectual Property Code, Section 172.2 of which reads:
172.2. Works are protected by the sole fact of their creation, irrespective of their mode or form
of expression, as well as of their content, quality and purpose.

The copyrights obtained by Bayanihan on the basis of the selfsame two (2) contracts, suffice it to say 'that such purported copyrights
are not presumed to subsist in accordance with Section 218[a] and [b], of the Intellectual Property Code, because respondent Chan had
put in issue the existence thereof.

International Registration of Works

SEC. 220. International Registration of Works. - A statement concerning a work, recorded in an international register in accordance with
an international treaty to which the Philippines is or may become a party, shall be construed as true until the contrary is proved except:

220.1. Where the statement cannot be valid under this Act or any other law concerning intellectual property.

220.2. Where the statement is contradicted by another statement recorded in the international register.

Disclosure of Information
SEC. 220A. Disclosure of Information. - Where any article or its packaging or an implement for making it is seized or detained under a
valid search and seizure under this Act is, or is reasonably suspected to be, by an authorized enforcement officer, in violation of this
Act, the said officer shall, wherever reasonably practicable, notify the owner of the copyright in question or his authorized agent of the
seizure or detention, as the case may be.

Points of Attachment of Rights

Atty. Q: The scope of application particularly the forms of attachment has something to do with territorial jurisdiction. This probably sets
an issue in personality to sue in Philippine courts. If you remember, Sec. 3:
SEC. 3. International Conventions and Reciprocity. - Any person who is a national or who is domiciled or has a real and effective
industrial establishment in a country which is a party to any convention, treaty or agreement relating to intellectual property rights or the
repression of unfair competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of the Philippines by
law, shall be entitled to benefits to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in
addition to the rights to which any owner of an intellectual property right is otherwise entitled by this Act.

Atty. Q: However, we have to make it more refined. When can we avail? What are the instances? The law says you provide points of
attachment. Meaning, it establishes its right in Philippine Courts.

For Literary and Artistic Works and Derivative Works

 9
SEC. 221. Points of Attachment for Works under Sections 172 and 173.

221.1. The protection afforded by this Act to copyrightable works under Sections 172 and 173 shall apply to:
(a) Works of authors who are nationals of, or have their habitual residence in, the Philippines;
(b) Audio-visual works the producer of which has his headquarters or habitual residence in the Philippines;
(c) Works of architecture erected in the Philippines or other artistic works incorporated in a building or other structure located in the
Philippines;
(d) Works first published in the Philippines; and
(e) Works first published in another country but also published in the Philippines within thirty days, irrespective of the nationality or
residence of the authors.

221.2. The provisions of this Act shall also apply to works that are to be protected by virtue of and in accordance with any international
convention or other international agreement to which the Philippines is a party.

For Performers
SEC. 222. Points of Attachment for Performers. - The provisions of this Act on the protection of performers shall apply to:
222.1. Performers who are nationals of the Philippines;
222.2. Performers who are not nationals of the Philippines but whose performances: (a) Take place in the Philippines; or (b) Are
incorporated in sound recordings that are protected under this Act; or (c) Which has not been fixed in sound recording but
are carried by broadcast qualifying for protection under this Act.

Of Sound Recording
SEC. 223. Points of Attachment for Sound Recordings. - The provisions of this Act on the protection of sound recordings shall apply to:
223.1. sound recordings the producers of which are nationals of the Philippines; and
223.2. sound recordings that were first published in the Philippines.

For Broadcast
SEC. 224. Points of Attachment for Broadcasts.
224.1. The provisions of this Act on the protection of broadcasts shall apply to:
(a) Broadcasts of broadcasting organizations the headquarters of which are situated in the Philippines; and
(b) Broadcasts transmitted from transmitters situated in the Philippines.
224.2. The provisions of this Act shall also apply to performers who, and to producers of sound recordings and broadcasting
organizations which, are to be protected by virtue of and in accordance with any international convention or other
international agreement to which the Philippines is a party.
 10
Law on Trademarks, Service Marks and Trade Names
What is a mark?
First lets consider the definition of terms of a mark, so what is the legal definition of a trademark? Technically it should be referred to as
a mark because a mark can be two kinds When it can relates to goods, we call them trademarks and if they relate to services we call it
service mark. Collectively and customarily they are referred to as trademarks.

121.1. "Mark" 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)
This brings us to another interesting subject matter in intellectual property rights. Internationally it is one of the very important industrial
properties. It is a tool moves by business men and entrepreneurs thats why the definition provides it must be used in an enterprise so it
is an implication that it must be used in trade or business. So there must be a business involved in this endeavor unlike copyright which
is identified as purely an intellectual property, trademark is categorized as an industrial property together with patents. Although in
copyright, it is unavoidable more importantly in the discussion of in economic rights that there must be some economic motivation thats
why we call it economic expectation so you earn money from this endeavor but unlike in trademark wherein in the latter trademark or
marks are used for principally for business. So were talking about an industrial for business property a device a tool used by business
persons or trade persons in conducting their business. What role does a mark play in the business of a businessman? How important is
a mark? Lets take it a closer to home by the time that you decided to buy something, what was the last item that we purchased or what
was the last item that you used before coming here? What were the procedures that were used in buying that item? First we have to go
to the supermarket. If you already have an item or a specific product in mind, you already have an idea on why you chose it be it on
past experience because you had tried the product before. That is a good important consideration in buying the product, because you
had used the product before or first times user ka, because of the advertisement, because of the past experiences of others who
relayed the information to you you should try this brand because it will make your teeth whiter or your breath smell good longer. So
these are the things that we consider. What is your behavior as the consumer? If it is expensive it is, thats an implication or there is a
consideration that it has to be in certain standard of quality. So based on your personal experience, in order to appreciate the value of a
trademark, or in mark of that matter, we consider past experiences advertisements, because a famous personality has endorsed it and
that famous personality is your idol. So what do you think is the motivation of the trademark owner, when we say trademark owner the
one who is selling the product. What do you think is the motivation of the owner in using that mark? Because they want to create an
image, an identity. To distinguish from other brands. To set it apart for it to stand out.
What are the two key elements of a mark? We have to be very careful that this definition only applies to the Philippines.
First the definition says it must be visible, what do you mean by visible? Can be perceived by our sense of sight so we are only
limited to marks that our visible. In other jurisdiction, it is not limited to visible signs but they also allow sounds. Thats why we
have sound marks in other jurisdiction like the very famous sound mark of Intel. Have you heard it? Or in our case the famous
ice cream brand. So can it be considered a mark in the Philippines? Unfortunately no, because our definition only confines it
to visible signs. So is it only limited to words? The term used is signs so it could be words, figures, shapes or a combination of
words, figures and shapes. Thats the first element. It should be visible always remember this class because other persons
would consider other types of mark to be a protectable mark in Philippines unfortunately you are related to visible.
The next key element of a mark based on definition. It must be distinctive, must be capable of distinction.

What are tools or aids that you must use in choosing a mark?
The two very fundamental elements are number one is visible and distinctive you mention earlier that you want your brand to
be unique it must stand out so this gives us another character hack another way of understanding the term distinctiveness so when we
say, I want to buy or I want to sell a particular product, milk what word or term or symbol would we use to make your mark distinctive.
Are you allowed to use the word milk? *NO* why not? Coz its generic. How about full cream milk? Is full cream generic? So what word
would use if you intend to sell it? Please be more imaginative because we want our brand to stand out. Actually the choices are
limitless. You can choose any word actually, it can be fancy or arbitrary. From the famous brands, what are the marks that are fanciful?
Yeah bear brand.. Chippy?
Does it have to be connected to your brand?
No, because the advise is it can be as fanciful as you can for your product to stand out. You can also be very creative like a funeral
homes named Libing Things. From that definition, I will not get tired of emphasizing the two elements: visible and distinctive. If it is not
distinctive as what youve said its generic it cannot be registered. Can you use it? There is no law prohibiting you from using it but can
you register it? Thats another story. Because were talking about marks that can either be used or registered. For registration
purposes, the requirements are very clear it must be visible and distinctive. Now if you are a businessman trying to sell your product or
promote your product you want to have a wider market or demographic thats what we call it.

Discussion on Collective Marks

So you want to communicate to the consumers through your product which bears the mark. Now to add to the attractiveness of your
products you want an accreditation that your product is tested and proven to be of high quality. Thats why we have toothbrushes tested
by known organizations such as the Philippine Dental Association. Thats why we always a see tooth brush with a mark of approved by
 11
the PDA . If you are selling a meat product and your process follows a distinct standard. You also need the mark of Halal but you
need the authorization of the owner of the mark. These are what we call collective marks as provided in section 121.2.
121.2. "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)
So the owner of the mark is different from the owner of the products. It is a group or association that uses the mark to aid in the brand
name of your products. For example the word champagne is a place in France so they use the word champagne it implies that it is
source of that specific area in France or any other common characteristics including the quality of goods or services of different
enterprises which uses the sign under the control of the registered owner of the collective mark. When we say HALAL, it must undergo
a specific procedure.

Trade name vs Trademark

Lets go to trade name and how is it different from trademark.
121.3. "Trade name" means the name or designation identifying or distinguishing an enterprise; (Sec. 38, R.A. No. 166a)
In conducting business, if you have acquired a certain popularity because in the past you have sold or promoted quality goods or your
goods become popular so your business would become popular too. People would curious as to who the manufacturer or producer of
this product. The consumer would associate the business as a business that produces certain quality of products in a certain quality. In
a way, the business or enterprise has a acquired a reputation more specifically a good reputation. What do you mean by good
reputation? We can equate it to a good will. It has acquired a good will in the business sector or in the consuming public. Now does the
business owner have a right over the mark that he has? A business owner has a property right over the mark. Does he have the same
right over trade name? The trade name is defined as the name or designation identifying or distinguishing an enterprise. If the name of
the business owner has acquired a good business reputation or a good will, then it has acquired a certain property rights. Before going
any further, lets take up how the Supreme Court has applied the principle of acquiring a property right over the mark. How did the
Supreme Court justify that the business owner has property right over his mark.

Philip Morris vs. Fortune Tobacco

Facts:
This is a petition for review under Rule 45 of the Rules of Court, to seek the reversal and setting aside of the following issuances of the
Court of Appeals (CA).
Philip Morris, Inc. and two other petitioners are ascribing whimsical exercise of the faculty conferred upon magistrates by Section 6,
Rule 58 of the Revised Rules of Court when respondent Court of Appeals lifted the writ of preliminary injunction it earlier had issued
against Fortune Tobacco Corporation, from manufacturing and selling MARK cigarettes in the local market. Banking on the thesis that
petitioners respective symbols MARK VII, MARK TEN, and MARK, also for cigarettes, must be protected against unauthorized
appropriation.
All petitioners are not doing business in the Philippines but are suing on an isolated transaction, They Invoked provisions of the Paris
Convention for the Protection of Industrial and Intellectual Property. As corporate nationals of member-countries of the Paris Union,
they can sue before Philippine courts for infringement of trademarks, or for unfair competition, without need of obtaining registration or a
license to do business in the Philippines, and without necessity of actually doing business in the Philippines.
Philip Morris and its subsidiaries filed the complaint for infringement and damages against Fortune Tobacco before the Pasig Regional
Trial Court (RTC) for manufacturing and selling cigarettes bearing the trademark Mark which is identical and confusingly similar to
Philip Morris trademarks. The said act was dismissed. Hence, this petition at bar.
Issue/s:
Whether or not there has been an invasion of plaintiffs right of property to such trademark or trade name.
Ruling/s:
No. There is no proof that any of petitioners products which they seek to protect from any adverse effect of the trademark applied for by
defendant, is in actual use and available for commercial purposes anywhere in the Philippines.
A fundamental principle of Philippine Trademark Law is that actual use in commerce in the Philippines is a pre-requisite to the
acquisition of ownership over a trademark or a trade name.
In view of the explicit representation of petitioners in the complaint that they are not engaged in business in the Philippines, it inevitably
follows that no conceivable damage can be suffered by them not to mention the foremost consideration heretofore discussed on the
absence of their right to be protected.
Following universal acquiescence and comity, our municipal law on trademarks regarding the requirement of actual use in the
Philippines must subordinate an international agreement inasmuch as the apparent clash is being decided by a municipal tribunal.
Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of
international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of
international law are given a standing equal, not superior, to national legislative enactments
Further Discussion:
In the case of Philip Morris versus Fortune, the Supreme Court approached it in a philosophical manner saying the law protects the
mark because the law recognizes that a mark has a very important function. What function is that? It is the function of symbols. Why do
we relate mark to symbols? Most of human activities rely on symbols. The very mundane task of navigating through Cebu traffic
requires us to rely on symbol. Once the light is red what does it mean? Stop. When it is green, move and when its yellow go faster.
We rely on symbols. So symbols play a vital role in our daily activities. A trademark is characterized as a merchandising shortcut which
induces purchasers to select what he wants. Thats why most of the brands are colored red because we are attracted to red
 12
consciously or unconsciously. The owner exploits that human tendency or propensity by making every effort to impregnate the
atmosphere of the market with the drawing power of a congenial symbol.
Whatever the means employed, the end is the same; to convey through the mark with the minds of customers the desirability of the
products. Once he achieves the desirability or the drawing power of his mark, he has something of value. Therefore its proper for the
law to protect him
Did you know that coca cola brand is valued at sixty million dollars only the brand itself. The term brand is wider in scope. Mark is part
of a bigger genus which is brand. So you can consider a trade name as part of the brand. Thats why if we go back to definition, it is not
only limited to the stamped portion of the product but also the container. Thats why a coca cola bottle is already part of the brand and
in our definition its part of the definition of mark. The container itself can be considered as a mark and we can have it registered. So
once a trademark owner has achieved that objective of attracting consumers to his brand, it is valuable. It is a property right. Now if
another person tries to copy that drawing that symbol, then he is considered to have poached upon the commercial magnetism of the
symbol. Therefore since there is a trespass to his exclusives rights then the owner can obtain legal redress. This is the basic principle
of trademark protection. Mark is capable of protection because of this.

MIRPURI vs. CA G.R. No. 114508, November 19, 1999

FACTS
Lolita Escobar applied with the Bureau of Patents for the registration of the trademark Barbizon, alleging that she had
been manufacturing and selling these products since 1970. private respondent Barbizon Corp opposed the application in IPC No. 686.
The Bureau granted the application and a certificate of registration was issued for the trademark Barbizon. Escobar later assigned all
her rights and interest over the trademark to petitioner Mirpuri. In 1979, Escobar failed to file with the Bureau the Affidavit of Use of the
trademark. Due to his failure, the Bureau cancelled the certificate of registration. Escobar reapplied and Mirpuri also applied and this
application was also opposed by private respondent in IPC No. 2049, claiming that it adopted said trademark in 1933 and has been
using it. It obtained a certificate from the US Patent Office in 1934. Then in 1991, DTI cancelled petitioners registration and declared
private respondent the owner and prior user of the business name Barbizon International.

ISSUE
Whether or not the treaty (Paris Convention) affords protection to a foreign corporation against a Philippine applicant for
the registration of a similar trademark.

HELD
The Court held in the affirmative. RA 8293 defines trademark as any visible sign capable of distinguishing goods. The
Paris Convention is a multilateral treaty that seeks to protect industrial property consisting of patents, utility models, industrial designs,
trademarks, service marks, trade names and indications of source or appellations of origin, and at the same time aims to repress unfair
competition. In short, foreign nationals are to be given the same treatment in each of the member countries as that country makes
available to its own citizens. Nationals of the various member nations are thus assured of a certain minimum of international protection
of their industrial property.

Further Discussion:

If you remember in the Philip Morris case, the court did not sustain foreign corporation. Why? But the question is, are we using their
mark in the Philippines? No, even if you cite the Paris Convention affording foreign nationals the right to sue in Philippine courts. But
still you have to comply with municipal law. What is the domestic law that requires the right to sue over your mark? There must be a
qualification that you are in actual use of that mark which they failed to prove. The general rule rather is a foreign national cannot invoke
his rights based on a foreign registration because we follow that territoriality principle. So your mark cannot be recognized in the
Philippines.
What we have learned in Philip Morris is even if you have the personality to sue, you still have to comply with the provisions under our
laws. We apply that in the case of Mipuri. What is the basis for their opposition? Their foreign registration but more importantly the court
considered whether a mark is well known internationally. That is the exception. Even if your mark is not registered here in the
Philippines but your mark is well known internationally, then you can have the right to sue.
What are the requirements for your mark to be considered well-known? Theres no hard and fast rule but theres a guideline provided
in the implementing rules and regulations.
Who is the competent authority that will declare a mark internationally well-known? Based on this ruling, it is the Minister of Trade and
Industry but under our new guidelines, it is the director general of the IPO.
As a rule, a foreign registration cannot be honored here so even if it is already used in the US, you can have it registered here by
another person. If that same person or national entity would seek registration here in the Philippines, he can do so under section 3. He
can do so if his country is a member of an international treaty. But you cannot enforce your right to your mark if you have not registered
your mark here in the Philippines. Just like what happened in the case of Mipuri. But why did the court sustain the foreign corporation?
It is because of the exemption that a mark is internationally well-known. Now in this case, the Supreme Court also provided us with the
3 functions of a mark.
Functions of a Mark
They indicate the origin or ownership of the article storage they are attached. This is the old function used in the past.
They guarantee that those article come up to a certain standard of quality.
 13
They advertise the articles they symbolize.

CANON KABUSHIKI KAISHA vs. COURT OF APPEALS

G.R. No. 120900, July 20, 2000

FACTS:
On January 15, 1985, private respondent NSR Rubber Corporation filed an application for registration of the mark CANON for
sandals in the Bureau of Patents, Trademarks, and Technology Transfer (BPTTT). Canon Kabushiki Kaisha filed a Verified Notice of
Opposition alleging that it will be damaged by the registration of the trademark CANON in the name of private respondent since they
were using the same trademark for their footwear line of products. The private respondent will also use the name Canon for its
footwear products.
Based on the records, the evidence presented by petitioner consisted of its certificates of registration for the mark CANON in
various countries covering goods belonging to class 2, paints, chemical products, toner, and dye stuff. Petitioner also submitted in
evidence its Philippine Trademark Registration No. 39398, showing its ownership over the trademark CANON.
The BPTTT, on November 10, 1992, issued its decision dismissing the opposition of petitioner and giving due course to NSR's
application for the registration of the trademark CANON. Canon Kabushiki Kaisha filed an appeal with the Court of Appeals that
eventually affirmed the decision of the BPTTT.

ISSUE:
Is the use of trademark, CANON, by the private respondent affects the business of Canon Kabushiki Kaisha who has an
existing ownership of a trademark also known as CANON?

HELD:
The Supreme Court says that ordinarily, the ownership of a trademark or trade name is a property right that the owner is
entitled to protect as mandated by the Trademark Law. However, when a trademark is used by a party for a product in which the other
party does not deal, the use of the same trademark on the latter's product cannot be validly objected to.
The BPTTT correctly ruled that since the certificate of registration of petitioner for the trademark CANON covers class 2
(paints, chemical products, toner, dyestuff), private respondent can use the trademark CANON for its goods classified as class 25
(sandals). Clearly, there is a world of difference between the paints, chemical products, toner, and dyestuff of petitioner and the sandals
of private respondent.

Further Discussion:

The Supreme Court introduced us to a new principle in trademark law. No omnibus registration is allowed. When you apply for
registration and when you indicate in your registration where you will use your mark on certain products it should set a limit to where
you use your mark. Thats why we have in our registration form we have to indicate what are the classes of products that we intend to
use on which classes of products you intend to use your mark. In the application process, you are not limited to only one class. You can
include several classes. Thats why I mentioned earlier in Mc Donalds they covered a lot of classes of products not only limited to fast
food but also to merchandise to other products. The law does not give you a limit but once you file a registration or applied for
registration you yourself has limited the scope of your use and the court says you only limit to your registration because the law will not
anticipate what you are planning in the future so when you say I will apply it for a chemical products now but in the back of my mind I
really intend to apply it to sandals. From the time that you file, you indicate right away what you intend to include in your registration.
The law will not anticipate your future plans. So if ever you intend to use it in some other products then you file another registration.
Why wait for somebody else to file an application?
If you compare this to copyright, we know already that in copyright no registration is required but when it comes to trademark,
registration is a requirement. So if you want to ask for protection from the State, you will have to comply with the requirements. One of
the important requirements is registration. No registration, no protection. But that is not the absolute rule because in some instances if it
even if theres no registration you can still acquire certain degree of protection. Another important element in the trademark registration
process is the element of use. Thats what we discussed in Philip Morris. You can register your mark but after it is part of registration
process you have to maintain your mark. Have you used your mark in business? If you cannot prove that, your mark will be cancelled
or revoked.
Societe Des Produits Nestle v. CA (G.R. No. 112012)

Facts:
Respondent filed an application for the registration of the trademark FLAVOR MASTER for instant coffee and was published.
Petitioners, a Swiss company registered under Swiss laws and domiciled in Switzerland, and a Philippine corporation and licensee of
Societe, respectively, filed an opposition claiming that the trademark of Respondents product is confusingly similar to its trademarks for
coffee and coffee extracts: MASTER ROAST and MASTER BLEND, and its registration would likely cause confusion in trade; or
deceive purchasers and would falsely suggest to the purchasing public a connection, as the dominant word present in the 3 trademarks
is MASTER; or that the goods of Respondent might be mistaken as having originated from Petitioners.
BPTTT denied Respondents application, to which the latter appealed to the CA.
CA ordered the approval of Respondents application holding that the glaring dissimilarities far outweigh the similarities thus; there can
be no likelihood of confusion.

Issue:
 14
Whether or not the word MASTER is a generic or descriptive term not capable of registration.

Ruling:
The petition is impressed with merit.In addition, the word MASTER is neither a generic nor a descriptive term. As such, said term
cannot be invalidated as a trademark and, therefore, may be legally protected. Generic terms are those which constitute the common
descriptive name of an article or substance, or comprise the genus of which the particular product is a species, or are commonly
used as the name or description of a kind of goods, or imply reference to every member of a genus and the exclusion of individuating
characters, or refer to the basic nature of the wares or services provided rather than to the more idiosyncratic characteristics of a
particular product, and are not legally protectable. On the other hand, a term is descriptive and therefore invalid as a trademark if, as
understood in its normal and natural sense, it forthwith conveys the characteristics, functions, qualities or ingredients of a product to
one who has never seen it and does not know what it is, or if it forthwith conveys an immediate idea of the ingredients, qualities or
characteristics of the goods, or if it clearly denotes what goods or services are provided in such a way that the consumer does not
have to exercise powers of perception or imagination.
Rather, the term MASTER is a suggestive term brought about by the advertising scheme of Nestle. Suggestive terms are those which,
in the phraseology of one court, require imagination, thought and perception to reach a conclusion as to the nature of the goods. Such
terms, which subtly connote something about the product, are eligible for protection in the absence of secondary meaning. While
suggestive marks are capable of shedding some light upon certain characteristics of the goods or services in dispute, they
nevertheless involve an element of incongruity, figurativeness, or imaginative effort on the part of the observer.
In associating its coffee products with the term MASTER and thereby impressing them with the attributes of said term x x x
The term MASTER, therefore, has acquired a certain connotation to mean the coffee products MASTER ROAST and MASTER
BLEND produced by Nestle. As such, the use by CFC of the term MASTER in the trademark for its coffee product FLAVOR MASTER
is likely to cause confusion or mistake or even to deceive the ordinary purchasers.

WHEREFORE, in view of the foregoing, the decision of the CA is REVERSED and SET ASIDE and the decision of the BPTTT is
REINSTATED.

Further Discussion:

In other words, what the Supreme Court teaches us aside from generic terms, descriptive terms cannot also be registered. Based on
the definition of a generic or descriptive term, can you classify master as either generic or descriptive? How did the court define
generic? It is a common term. Is the term common for coffee? No. Is it descriptive? When you say descriptive, is the consumer who is
not familiar with the product, have an idea what the product is all about? No, because it does not give us a description or a
characteristic. The term master is too broad to only be confined with coffee products so the court said it is not neither generic nor
descriptive but it can be classified as a suggestive name or suggestive mark. The court said you cannot register generic and descriptive
terms cannot be registered but suggestive names can be. Im pointing out the term suggestive mark because as what Ive discussed
earlier, what word would you use to make your mark as distinctive as possible for it to stand out. What I mentioned earlier it has to be
fanciful. It has to be arbitrary. What are the examples of fanciful? You use the term that has no relation to that product. What are
examples? Apple Products and Cherry Mobile. That is one side of the spectrum of registrability. On the other side is katong dili gyud
pwede ma register are generic and descriptive marks. Now right in the middle or not necessarily middle but more dire nga spectrum
nga generic and descriptive is the term suggestive marks. Although it cannot be considered as totally arbitrary or fanciful, it is used by
the product owner to suggest to the consumer who is not familiar with the product what his product is all about so it is a suggestive
mark because it requires for the consumer to exercise imagination. It becomes a figurative term although not directly conveying what
the product is but somehow gives us a subtle description of what the product is. Example the term Ivory is used for soap. It is a
considered as a suggestive mark because it implies to the consumer that if you use that soap your skin will be light like color ivory. But
it is neither generic or descriptive because Ivory in its common term or common use is a shade or a color. The consumer if not familiar
with the product would have no way of knowing that it relates to a soap but because the term Ivory was use the consumer gives us the
consumer the chance to exercise imagination about the product. Another suggestive term is Globe. What is the suggestion of the term
(Globe) in relation to telecommunication? There is the suggestion there that when you use globe, we have a connection to any person
or anywhere in the globe. Thats the idea lang because thats not the reality. Thats a another term that is introduced to us by Supreme
Court in the case of nestle versus CFC so suggestive marks can be used and can be registered.
Principle of Secondary Meaning
The product has become so popular that for a long period of time, the consumer has attached a different meaning to the brand. For
example, Xerox is used instead of photocopying, Frigidaire for refrigerators, Kodak for picture-taking.If it has acquired a secondary
meaning, then this time it can be registered and exclusively used. To be discussed further

Nature of a Trademark Right

ARCE SONS AND CO. VS. SELECTS BISCUITS

1SCRA 253 (1961)
FACTS: Respondent (R) filed for registration of the word SELECTA as trade-mark to be use in its bakery products. The examiner (E)
found that the trade-mark sought to be registered resembles the word SELECTA used by the Petitioner (P) in its milk and ice cream
products so that its use by R will cause confusion as to the origin of their respective goods, recommending then that the application be
refused. Upon reconsideration, Patent Office (PO) ordered the publication.
 15
P filed its opposition thereto on several grounds, among which are: that the mark SELECTA had been continuously used by P in the
manufacture and sale of its products, including cakes, bakery products, milk and ice cream from the time of its organization and even
prior thereto by its predecessor-in-interest, Ramon Arce; that the mark SELECTA has already become identified with name of the P
and its business; that the mark to which the application of R refers has striking resemblance, both in appearance and meaning, to Ps
mark as to be mistaken therefor by the public and cause Rs goods to be sold as Ps; P actually filed a complaint for UC asking for
damages and for the issuance of a WI.

CFI rendered decision perpetually enjoining R from using the name SELECTA and ordering it to pay P by way of damages. R
appealed this to the CA.

Meanwhile, the DP dismissed Ps opposition. Hence, P interposed the present petition for review. The two cases are now before the SC
for consolidated decision.

ISSUE: Whether or not the tradename SELECTA has acquired secondary meaning in favor of petitioner.

HELD: The word SELECTA, it is true, may be an ordinary or common word in the sense that may be used or employed by anyone in
promoting his business or enterprise, but once adopted or coined in connection with ones business as an emblem, sign or device to
characterize its products, or as a badge of authenticity, it may acquire a secondary meaning as to be exclusively associated with its
products and business. In this sense, its use by another may lead to confusion in trade and cause damage to its business. And this is
the situation of petitioner when it used the word SELECTA as a trade-mark. In this sense, the law gives its protection and guarantees
its use to the exclusion of all others. And it is also in the sense that the law postulates that The ownership or possession of a
trademark,. . . shall be recognized and protected in the same manner and to the same extent, as are other property rights known to the
law, thereby giving to any person entitled to the exclusive use of such trade-mark the right to recover damages in a civil action from
any person who may have sold goods of similar kind bearing such trade-mark (Sections 2-A and 23, Republic Act No. 166, as
amended).

The term SELECTA may be placed at par with the words Ang Tibay which this Court has considered not merely as a descriptive term
within the meaning of the Trade-mark Law but as a fanciful or coined phrase, or a trade-mark. In that case, this Court found that
respondent has constantly used the term Ang Tibay, both as a trade-mark and a trade-name, in the manufacture and sale of slippers,
shoes and indoor baseballs for twenty-two years before petitioner registered it as a trade-name for pants and shirts so that it has
performed during that period the function of a trade-mark to point distinctively, or by its own meaning or by association, to the origin or
ownership of the wares to which it applies.

The rationale in the Ang Tibay case applies on all fours to the case of petitioner.

In view of the foregoing, we hold that the DP committed an error in dismissing the Ps opposition, and consequently, we hereby reverse
his decision. Consistently with this finding, we hereby affirm the decision of the court a quo.

Atty Q: How did the supreme court discuss the nature of a trademark right in issuing this ruling of Arce sons?

It is a property right. What kind of property right? The Supreme Court said that this right gives protection and guarantees its use to the
exclusion of all others. So its an exclusive right. The law also says that its ownership or possession shall be recognized and protected
in the same manner and to the same extent as our other property rights known to the law thereby giving to the person entitled to the
exclusive use of such trademark and its consequential the right also includes the right to recover damages in civil action from any
action from any person who may have sold goods of similar kind bearing such trademark. This was discussed in this case because the
court said property right is bestowed upon the owner the word selecta, who is the rightful owner? Arce sons and company being the
rightful owner / successor in interest of the mark that was formerly owned by a private individual their father ramon arce. Initially they
use it for dairy products. Milk and then in order to establish a brand they used it in their business primarily selling baked goods so they
have been using this mark since prior to 1942. So it has established a goodwill in this particular business, the dairy business. Now here
comes another entity, Selecta Biscuits company who uses the word Selecta in their cookies. The court discussed the nature of that
right. The owner has the right to use to the exclusion of others.

It even discussed whats the basis for using the word Selecta, they even justified the use of the name Selecta as the English
translation of the chinese term which is selected. It would only lead one to conclude that they wanted to ride on the popularity of
Selecta. The word Selecta has already acquired secondary meaning. The court discussed that when a person adopts a trademark it
intends for the public to understand the term though initially it is a common term it becomes a term associated to his goods or services.
So in a way all marks they are really intending for the term to have s econdary meaning and in this case of arce sons it would have
been successful because the public will already associate the product to those of arce sons. Thats why there was enough basis to
favor the arguments of arce sons company.

Trademark vs. Trade name

Tradename means the name or designation identifying or distinguishing an enterprise. Is it protectable property even if not registered?
The law does not include registration of a trade name however there are certain statutes requiring registration. If you are a corporate
entity you have to register it with SEC but the law says regardless of registration, a trade name can still be protected.
We go now to sec 165
 16

SEC. 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, that is likely to mislead the public shall be deemed unlawful.

The law says even if there is no registration, if the use of that corporate or trade name would likely mislead the public, it shall
be considered as unlawful. So the owner of a trade name also has a right to prevent others from using their trade name as anothers
trade name or trademark because thats what happened in Converse Rubber vs Universal Rubber.

CONVERSE RUBBER VS. UNIVERSAL RUBBER

G.R. NO. L-26676, JULY 30, 1982

FACTS: Converse Rubber Corporation is an American corporation while Universal Rubber Products, Inc. is a corporation licensed to do
business in the country. Converse has been operating since 1946. Universal Rubber has been operating since 1963. Later, Universal
Rubber filed an application for the trademark Universal Converse and Device before the Philippine Patent Office. Converse Rubber
opposed as it averred that the word Converse which is part of its corporate name cannot be granted as part of Universal Rubbers
trademark or trade name because it will likely deceive purchasers of Universal Rubbers products as it may be mistaken by unwary
customers to be manufactured by Converse Rubber. The Director of Patents did not grant the opposition by Converse Rubber.

ISSUE: Whether or not the decision of the Director of Patents is correct.

HELD: No. From a cursory appreciation of the Converse Rubbers corporate name CONVERSE RUBBER CORPORATION it is
evident that the word CONVERSE is the dominant word which identifies Converse Rubber from other corporations engaged in similar
business. Universal Rubber, in the stipulation of facts, admitted Converse Rubbers existence since 1946 as a duly organized foreign
corporation engaged in the manufacture of rubber shoes. This admission necessarily betrays its knowledge of the reputation and
business of petitioner even before it applied for registration of the trademark in question. Knowing, therefore, that the word
CONVERSE belongs to and is being used by Converse Rubber, and is in fact the dominant word in its corporate name, Universal
Rubber has no right to appropriate the same for use on its products which are similar to those being produced by Converse Rubber.

Atty Q: The Court explained that the term Converse was adopted by Converse Rubber as its selling point as its dominant feature in
their labels. They have several trademarks, they have Converse Chuck Taylor, Converse All Star. In all of these trademarks one word
only appears, the term Converse and because of the popularity of the brand although they are not doing business here in the
Philippines, it is well established. The Court said the most convincing proof of use they were able to establish use of a mark here in the
Philippines even if they dont do business. From sales invoices it provides the best proof that there is use of the products in this country.
The most convincing proof of use of a mark in commerce is testimony of such witnesses as customers or the orders of the buyers
during a certain period, it has already gained popularity. The same with the case of Puma. What is the basis of your right? What is your
personality to sue here in the Philippines? Puma presented the paris convention. It also cited an earlier ruling in La Chemise Lacoste.
Meaning the Philippines being a signatory to a treaty which is the universal protection of industrial rights which covers trademarks cites
that the Philippines shall afford the same rights as Filipino citizens but you have to prove that your product has been sold and became
popular here in the Philippines even if you are not doing business. Going back to converse, there is a basis for protection, because the
use of the word converse by Universal Converse for the same type of products rubber shoes and rubber sandals was done to cause
confusion to the consuming public. The protection is primarily in favor of the owner of the mark but the protection is looking out for the
consumers so that the consumers will not be deceived into purchasing something believing that what they are buying is the quality that
they are expecting. Because relying on the mark they paidsomething of value expecting to get a product of a certain standard or quality
only to find out that what they are buying is a fake. It gives rise to a right to protect the owner not only trademark but also tradename if
not registered as provided 165 in the present law ra8090. The court explained further the reason for protection is also to prevent a
damage not only from the confusion of goods but also confusion of reputation. The consumers would think that what they bought is the
product of converse rubber when they are only buying the product of universal rubber. Theyll have a negative impression of the rest of
the product of converse rubber. That is the damage that is sought to be prevented in allowing converse rubber to sue here in the
Philippines. The court said it is a property right a right in rem which you may assert and protect against in all the world, even in
jurisdictions where it does not transact business just the same as it may protect its tangible property real or personal against trespass or
convention.

But we must point out also that, going back to the case of Mirpuri, the personality to sue is one thing but to be able to establish your
claim is another because you have to comply with municipal law, in mirpuri it was merely pointed out that they had the personality to
sue but they have to prove that they have a well-known brand.

Basis of the Right to a Mark

MARVEX COMMERCIAL CO., INC. VS. PETRA HAWPIA & CO.

L-16297, DEC. 22, 1926
 17

FACTS: Petra Hawpia & Co. filed a petition for the registration of the trademark
"LIONPAS" used on medicated plaster. Marvex Commercial Co., Inc. filed an opposition thereto, alleging that the registration of such
trademark would violate its right to and interest in the
trademark "SALONPAS" used on another medicated plaster, which is registered in its name and that both trademarks when used on
medicated plaster would mislead the public as they are confusingly similar.

RULING: It is our considered view that the trade mark "SALONPAS" and "LIONPAS" are confusingly similar in sound. Both these words
have the same suffix, "PAS", which is used to denote a plaster that adheres to the body with curative power; Two letters of
"SALONPAS" are missing in "LIONPAS"; the first letter a and the letter s. Be that as it may, when the two words are pronounced, the
sound effects are confusingly similar. And where goods are advertised over the radio, similarity in sound is of special significance "The
importance of this rule is emphasized by the increase of radio advertising in which we are deprived of the help of our eyes and must
depend entirely on the ear" In the case at bar, "SALONPAS" and "LIONPAS", when spoken, sound very much alike. Similarity of sound
is sufficient ground for this Court to rule that the two marks are confusingly similar when applied to merchandise of the same descriptive
properties. The registration of "LIONPAS" cannot therefore be given due course.

Atty Q: This case tells us that the basis of the right to a mark is ownership right? Hawpia was not able to prove ownership. They
presented a letter from a representative from Osaka Boyki who is not actually the owner of the makr the owner is asunaro
pharmaceutical. They were not able to clearly establish that asunaro assigned the right to the mark to petra hawpia in the Philippines.

GABRIEL VS. PEREZ

G.R. NO. L-24075, JAN. 31, 1974

Lesson that we learn in the case of Gabriel vs Perez who has a right to a mark? The person who created, the originator. So it was
istablished in this case that it was Dr. Perez. It so happened that they had a joint venture agreement with Dr. Perez because at the time
the product was being promoted Perez had no sufficient capital it so happened that CY Gabriel had sufficient capital and personnel he
were able to make the product including the packaging and designing so it was CY Gabriel who infused capital to create the product
and distributing it and promoting it so to her she felt that she had a right to the mark. But they had a falling out because after the 5 year
term of the joint venture probably at that time Perez had a lot of money already so Perez did not renew the agreement between them so
Perez applied for registration of the mark and this time as the user and owner of the mark. In the case of Marvex, the court said. the
right to a mark is based on ownership and in the case of Gabriel vs Perez the court said a mere distributor cannot be classified as the
owne.r In the case of Uno vs General Milling the court said a mere importer of the mark cannot be considered as the owner of the mark
or has the right to a mark.

Prior to the enactment of RA8293 we had the former trademark law RA 166, in that old provision pertaining to registration, the law
requires for the applicant to prove that he has used the mark in commerce before his registration may be accepted. That is no longer
acceptable in the present law. In the old law prior use was required before application was accepted in the present law even if you have
not used the mark in commerce yet you can already apply for the registration that makes a lot of difference. But the thing is use is still
important to be able to acquire a right over the mark. It is still a requirement, why?

SECTION 142.2. 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.

Sir: The one that you submitted is the trademark application, because aside from the form we have the declaration of actual use. When
you file your trademark application form, the law does not require you to present proof of use. However, there is a requirement under
the law that within 3 years from the filing date of the application you will file a declaration of actual use of the mark with evidence to that
effect. What is the consequence if you fail to file. Your application shall be refused so it means that it is an important requirement for
registration that you have to file actual use. What do you think is the reason here? Because the law says the basis of your right is
ownership, how will you prove ownership? Actual use. So meaning to say it is actual use that will give you the right to a mark.

If you adopt a mark, you even promoted your mark but did not use it in business it would not give rise to an exlcusive right. Here comes
another person adopting the same mark but also using it in business between the two of you the latter person has the right. In section
124.2 Its a very short provision but very important. The other provision is 145

What is the term of trademark protection?

SEC. 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).

Prior to registration the law says you have to file within 3 years so that your mark will be registered now once your mark is registered
th
you are guaranteed a protection of 10 years but in order to maintain your mark you have to file a declaration of actual use within the 6
 18
year when your mark is registered. Failure to do so your mark shall be removed from the registered patents. After ten years the law
says you can renew your registration as many renewals as you want as long as you are still using it in commerce.

We follow the first to file rule, whoever has the first filing date shall have the right to the mark. If you establish your filing date the others
with the later filing date will be excluded as long as you can prove later on that you are actually using it.

Marks can only be protected when registered. Because anyone can use it and if the other person registers it first he will have a better
right than you. Exception you can have a protection even without registration if your mark has obtained a good business reputation. If
another person uses your mark and you havent registered, can you sue? No it can only be done if it is based in a registered mark but if
you have an very well known and established business (goodwill/ mark is very popular) you can sue for unfair competition.

Once you discontinue using your mark in commerce, you are deemed to have abandoned your mark and it is up for grabs unless your
mark has gained popularity. Unless if you have acquired good business reputation then you can claim unfair competition.

Exception of non-use. 152 is mentioned.

SEC. 152. Non-use of a Mark When Excused.

152.1. Non-use of a mark may be excused if caused by circumstances arising independently of the will of the trademark owner. Lack of
funds shall not excuse non-use of a mark.

Circumstances:

Government regulation: if you remember there was this product from china that was banned. Non-use was because of Government
regulation independent of the control of the trademark owner

Hostilities or war

Second:

152.2. The use of the mark in a form different from the form in which it is registered, which does not alter its distinctive character, shall
not be ground for cancellation or removal of the mark and shall not diminish the protection granted to the mark.

Sometimes the trademark owner will make some improvement on the mark, so they repackage and it will make some alteratins in the
mark however, if its distinctive character ris retained it will not be considered as non-use.

Third,

152.3. The use of a mark in connection with one or more of the goods or services belonging to the class in respect of which the mark is
registered shall prevent its cancellation or removal in respect of all other goods or services of the same class.
If the mark is no longer being used for a specific group belonging to the same class it will not prevent it from being used to other goods
falling in the same class.

152.4. The use of a mark by a company related with the registrant or applicant shall inure to the latters benefit, and such use shall not
affect the validity of such mark or of its registration: Provided, That such mark is not used in such manner as to deceive the public. If
use of a mark by a person is controlled by the registrant or applicant with respect to the nature and quality of the goods or services,
such use shall inure to the benefit of the registrant or applicant.

So these are the exceptions to the requirement of use.

Section 138 I want you to take note of this, this is very important.

SEC. 138. Certificates of Registration. - A certificate of registration of a mark shall be prima facie evidence of the validity of the
registration, the registrants ownership of the mark, and of the registrants 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)

But is it absolute proof? No, only prima facie evidence. What are prima facie evidence? Registration is valid, registrant is the owner and
he has the exclusive right to the mark. Validity, ownership and the right. So when you present this proof automatic it becomes prima
facia evidence you no longer have the burden to prove these stipulations but subject to contrary evidence. So if there is proof that the
registration is not valid, you are not the owner and you dont have the right then it is open to question it becomes one of the issues.

So lets go to section 123.

Which marks can be registered? The answer is all marks maybe registered except those that are enumerated under the law specifically
section 123.

SEC. 123. Registrability.

 19
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.

FREDCO MANUFACTURING CORPORATION VS. PRESIDENT AND FELLOWS OF HARVARD COLLEGE (HARVARD
UNIVERSITY)
GR. NO 185917, JUNE 1, 2011

FACTS: Petitioner Fredco Manufacturing Corporation filed a Petition for Cancellation of Registration No. 56561 against respondent
President and Fellows of Harvard College (Harvard University). Fredco alleged that Registration No. 56561 was issued to Harvard
University on 25 November 1993 for the mark "Harvard Veritas Shield Symbol" under Classes 16, 18, 21, 25 and 28. Fredco also
alleged that the mark "Harvard" was first issued by its predecessor-in-interest New York Garments on 2 January 1982 and was granted
a Certificate of Registrationon 12 December 1988 for a period of 20 years registration under Class 25. It is also alleged that the
registration was cancelled on 30 July 1988 when New York Garment inadvertently failed to file an Affidavit of Use/Non-Use on the fifth
anniversary of the registration but the right to the mark remained with its predecessor and now with Fredco. Harvard University, on the
other hand, alleged that it is the lawful owner of the name and mark "Harvard" in numerous countries worldwide, including the
Philippines. The BLA, IPO cancelled the registration of the mark "Harvard" under Class 25 but was reversed by the Director General,
IPO rationing that more than the use of the trademark, the application must be the owner of the mark sought tobe registered. The CA
affirmed the Director General.

ISSUE: Whether or not Registration No. 56561 Class 25 must be cancelled

RULING: No. While Harvard University had actual prior use of its marks abroad for a long time, it did not have actual prior use in the
Philippines. However, Harvard University's registration of the name "Harvard" is based on home registration which is allowed under
Section 37 of RA 166. Also, under Section 239.2 of RA 8293, "marks registered under RA 166 shall remain in force but shall be
deemed to have been granted under this Actxxx" which does not require actual prior use of the mark in the Philippines. In addition,
Article 8 of the Paris Convention, to which both the Philippines and the US are signatories, has been incorporated in Section 37 of RA
166; thus, under Philippine laws, a trade name of national of a State that is a party to the Paris Convention, whether or not the trade
name forms part of a trademark, is protected without the obligation of filing or registration. Be it noted that Fredco's registration was
already cancelled when it failed to file the required Affidavit of Use/Non-Use for the fifth anniversary of the mark's registration. Hence, at
the time of the filing of the Petition for Cancellation, Fredco was no longer the registrant or presumptive owner of the mark "Harvard.
 20

Registration is different from use, these enumerated cannot be registered but in so far as use, there is not provision in this law
prohibiting you from the use.

For letter c. the law says that if you have a written consent you may use the name.

For letter d, what are the terms used? If it is identical with a registered mark. Is identical synonymous to similar? When you say similar
its nto really identical, when you call identical it is the exact copy. Thats why I want you to take not of this term and the last part (iii).
This particular item in my opinion is misplaced. When you say identical it is a copy, when it resembles only then it is only similar. This
part talks about confusingly similar marks. Highlight that.

The topic has had inconsistent precendce but when you talk about confusingly similar marks in the case of emerald, it is a relative
concept. The courts have to examine the mark as it appears on the label not as described by the parties so its really up to the courts to
determine whether or not it is confusingly similar.

Back to paragraph d. We have tot ake note that we cannot have it registered if it is identical to another mark that is registered. When
you say registered it does not mean those that have already been granted with registration, it includes those already filed the
application.

Filing date vs. Priority date

Filing date is the day of actual filing of application. Priority date is earlier than the filing date. Section 131

Take note of section 3

SEC. 3. International Conventions and Reciprocity. - Any person who is a national or who is domiciled or has a real and effective
industrial establishment in a country which is a party to any convention, treaty or agreement relating to intellectual property rights or the
repression of unfair
competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of the Philippines by law, shall be entitled
to benefits to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to
which any owner of an intellectual property right is otherwise entitled by this Act.

SEC. 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.

In order to avail of the priority date, you have to have an application here in the Philippines. An application by person referred to in
section 3. Technically your filing date will not be the date of your application but the date of your prior foreign application. Lets say you
file an application in the Philippines august 30, then you also indicated that you filed in US who is a signatory of the tripps agreement or
paris agreement on June 30. So two months prior you already have a foreign application. On july 30 there was another person who filed
the same application over the same mark as the one you also applied for, the question here is who has the right to the mark? There are
two local applications, yours on august 30 and another on july 30 so yours was filed later but in your local application you claimed
priority right under 131. Your foreign application has an earlier date so you have the better right because you have priority date.

You cannot register a mark identical to a one already registered. But does it apply to all types of goods? The law is very specific, you
cannot register a mark that is identical pertaining to paragraph 1 the same goods or services. When you say same goods meaning they
are competing goods. Sabon and sabon Paragraph 2 closely related goods or services. Shampoo and sabon.

What about shampoo and soy sauce? In a case we discussed, Tamiya used for ham and edible oil, are they the same goods or
services? No, are they closely related? The court said maybe because they fall under the same class but you have to examine their
characteristics and properties although the classification is a guide but it is not a determining factor, ham is different from edible oil
because edible oil is a common household item ham is a more expensive good which you buy only in special occasions.

Pertaining to medicines the court said there is no likelihood of confusion. The room for mistake is very slim. It is also dispensed by a
pharmacist who is also very familiar of the product.

Closely related goods and services.

ESSO STANDARD EASTERN INC. VS CA

G.R. No. L-26676, AUGUST 31, 1982
FACTS: The petitioner Esso Standard is a foreign corporation duly licensed to do business in the philippines. it is engaged in the sale of
petroleum products which are identified by the trademarl 'Esso'. Esso is a successor of Standard Vacuum Oil Co, it registered as a
business name with the Bureau of Commerce in 1962. United Cigarette is a domestic corporation engaged in the manufacture and sale
 21
of cigarettes. it acquired the business from La Oriental Tobacco Corp including patent rights, once of which is the use of 'Esso' on its
cigarettes.
The petitioner filed a trademark infringement case alleging that it acquired goodwill to such an extent that the buying public would be
deceived as ti the quality and origin of the said products to the detriment and disadvantage of its own products. The lower court found
United Cigarette guilty of infringement. Upon appeal, the Court of Appeals ruled that there was no infringment in this case.
ISSUE: Is there infringement committed?
RULING: NONE. Infringement is defined by law as the use without the consent of the trademark owner of any reproduction, counterfeit,
copy or colorable imitation of any registered mark or tradename which would likely cause confusion or mistake or deceive purchasers or
others as to the source or origin of such goods.
The products of both parties (Petroleum and cigarettes) are non-competing. But as to whether trademark infringement exists depend on
whether or not the goods are so related that the public may be or is actually deceived and misled that they come from the same maker.
Under the Related Goods Theory, goods are related when they belong to the same class or have the same descriptive properties or
when they have same physical attributes. In these case, the goods are absolutely different and are so foreign from each other it would
be unlikely for purchasers to think that they came from the same source. Moreover, the goods flow from different channels of trade and
are evidently different in kind and nature.

ACOJE MINING CO., INC., vs. THE DIRECTOR OF PATENTS

G.R. No. L-28744. April 29, 1971

FACTS: On September 14, 1965, Acoje Mining Co., Inc. a domestic corporation, filed an application for registration of the trademark
LOTUS, used on Soy Sauce, Class 47. Use in commerce in the Philippines since June 1, 1965 is asserted.
The Chief Trademark Examiner finally rejected the application by reason of confusing similarity with the trademark LOTUS registered
and issued in favor of Philippine Refining Co., Inc., another domestic corporation. The cited mark is being used on edible oil, Class 47."
The matter was then elevated to respondent Director of Patents who upheld the view of the Chief Trademark Examiner and rejected the
application of petitioner on the ground that while there is a difference between soy sauce and edible oil and there were dissimilarities in
the trademarks due to type of letters used as well as in the size, color and design employed, still the close relationship of the products,
soy sauce and edible oil, is such "that purchasers would be misled into believing that they have a common source."

ISSUE: May petitioner register for the purpose of advertising its product, soy sauce, the trademark LOTUS, there being already in
existence one such registered in favor of respondent for its product, edible oil, it being further shown that the trademark applied for is in
smaller type, colored differently, set on a background which is dissimilar as to yield a distinct appearance?

RULING: Yes. The determinative factor in a contest involving registration of trade mark is not whether the challenging mark would
actually cause confusion or deception of the purchasers but whether the use of such mark would likely cause confusion or mistake on
the part of the buying public.
In this case, there is quite a difference between soy sauce and edible oil. If one is in the market for the former, he is not likely to
purchase the latter just because of the trademark. LOTUS. Even on the rare occasions that a mistake does occur, it can easily be
rectified, Moreover, there is no denying that the possibility of confusion is remote considering the difference in the type used, the
coloring, the petitioner's trademark being in yellow and red while that of the Philippine Refining Company being in green and yellow,
and the much smaller size of petitioner's trademark. Decision of respondent Director of Patents is reversed and petitioner's application
for registration of its trademark LOTUS granted.

Cigarettes are usually being sold in groceries or supermarket while petroleum products are sold in gasoline stations however, there are
some instances wherein the court said that these goods are not confusingly similar.

HICKOCK MANUFACTURING VS. CA

GR No L-44707, AUG. 31, 1982

FACTS: Hickok Manufacturing Co., Inc., a foreign corporation duly registered in the Philippines, had earlier registered the trademark
Hickok for its products namely: handkerchiefs, underwear and briefs. Private respondent, Lim Bun Liong, later registered for his
products, Marikina shoes, the same trade name Hickok. The former filed a petition with the patent director to cancel private
respondents registration of the trademark Hickok. The petition was granted and private respondents registration of the trademark was
cancelled. The Court of Appeals reversed the decision of the patent director and instead dismissed petitioners petition to cancel private
respondents registration of the trademark of Hickok for its shoes. Hence this petition for review.

RULING: "It is a established doctrine that emphasis should be on the similarity of the products involved and not on the arbitrary
classification or general description of their properties or characteristics" (Phil. Refining Co. v. Ng Sam G.R. No. L-26676) and that "The
mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption
and use of the same trademark by others on unrelated articles of a different kind" (Esso Standard Eastern Inc., v. Court of Appeals,
G.R. No. L-29971 Aug. 31, 1982). Taking into account the facts of record that petitioner, a foreign corporation registered the trademark
for its diverse articles of mens wear such as wallets, belts, and mens briefs which are all manufactured here in the Philippines by
 22
licensee Quality House, Inc., but are so labelled as to give the misimpression that said goods are of foreign manufacture and that
respondent secured its trademark registration exclusively for shoes and which are clearly labelled in block letters as made in Marikina,
Rizal, Philippines, no error can be attributed to the appellate court in upholding respondents registration of the same trademark for his
unrelated and non-competing product of Marikina shoes.

Emerald Garments vs CA

DEL MONTE CORP. VS. CA

181 SCRA 410 (1990)

FACTS: Del Monte authorized Philpack to register with the Philippine Patent Office the Del Monte catsup bottle configuration which was
granted. On November 20, 1972, Del Monte also obtained two registration certificates for its trademark "DEL MONTE" and its logo.
Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration by the Bureau of Domestic Trade to
engage in the manufacture, packing, distribution and sale of various kinds of sauce, identified by the logo Sunshine Fruit Catsup which
was registered. The product itself was contained in various kinds of bottles, including the Del Monte bottle, which the respondent
bought from the junk shops for recycling.

ISSUE: 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

RULING: It has been held that in making purchases, the consumer must depend upon his recollection of the appearance of the product
which he intends to purchase. The buyer having in mind the mark/label of the respondent must rely upon his memory of the petitioner's
mark. Unlike the judge who has ample time to minutely examine the labels in question in the comfort of his sala, the ordinary shopper
does not enjoy the same opportunity. What essentially determines the attitude of the purchaser, specifically his inclination to be
cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not exercise as much care as one who buys an
expensive watch. As a general rule, an ordinary buyer does not exercise as much prudence in buying an article for which he pays a few
centavos as he does in purchasing a more valuable thing. Expensive and valuable items are normally bought only after deliberate,
comparative and analytical investigation. But mass products, low priced articles in wide use, and matters of everyday purchase
requiring frequent replacement are bought by the casual consumer without great care. In this latter category is catsup. At that, even if
the labels were analyzed together it is not difficult to see that the Sunshine label is a colorable imitation of the Del Monte trademark.
The predominant colors used in the Del Monte label are green and red-orange, the same with Sunshine. The word "catsup" in both
bottles is printed in white and the style of the print/letter is the same. Although the logo of Sunshine is not a tomato, the figure
nevertheless approximates that of a tomato. In this case, Sunshine chose, without a reasonable explanation, to use the same colors
and letters as those used by Del Monte though the field of its selection was so broad, the inevitable conclusion is that it was done
deliberately to deceive.

Registrability of a Mark
SEC. 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 wellknown, 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;
 23
(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.

123.2. As regards signs or devices mentioned in paragraphs (j), (k), and (l),
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 applicants 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.

123.3. The nature of the goods to which the mark is applied will not constitute an obstacle to registration.

Atty. Q: What are the requirements for the Registrability pertaining to identical marks?
If a mark is identical to another mark used by another person or owner which is formerly registered, you cannot use it on the same
goods or services, or closely-related goods or services. The same rules for services if they are competing products.

What if they are not competing products? How will you determine whether they are closely-related goods or services?
Based on the different rulings of the Supreme Court, there are several standards or factors that must be considered. In the case of Phil.
Refining Company vs Ng Sam, the Supreme Court said that: It is not the classification that is controlling, it is actually the properties
of the goods. Because in this case, the pork products belong to the same class. Unlike in the case of Canon Kabushiki Kaisha vs CA
and NSR Rubber Company, the Court pointed out that the parties involved both belong to the same class. In the case of Esso
Standard Eastern Inc. vs CA, the Court said, you have to determine whether they belong to the same or different class. Take note of
these requirements as developed in our jurisprudence. This is just one way of guiding you to determine whether these are closely-
related or not.

The same principles can be applied even if the marks are not identical. Look at item 3 (Sec. 123.1 (d) (iii), it says: if it nearly
resembles such a mark as to be likely to deceive or cause confusion.

What is the threshold in determining whether a mark is similar so as to not be eligible for registration?
Our jurisprudence says when it is confusingly similar.

Is there a need that an actual confusion must exist?

No, only a likelihood of confusion.

Who is to be confused?
The consumers.

How do you now then characterize that consumer?

The Ordinary purchaser.
But do not be confused in term used which is ordinary.

What is the opposite of ordinary?

Extraordinary.

You have to make reference as to the attitude of the buyer with respect to the goods. For what is considered an ordinary purchaser for
that product, may not be considered an ordinary purchaser for another product. In the case of Etepha vs Director of Patents, the
Court said: an ordinary purchaser is considered as one who is careful. Why was he careful? Because here, we are talking about
medicines. The purchaser cannot afford to be negligent or careless in buying the product. In fact, the Supreme Court even detailed the
st
entire process of purchasing. 1 step, he has to go to the Doctor. The Doctor will be the one wholl give the prescription, and likely the
Doctor is qualified in the field. Hence the chances of getting mistakes is very small because the Doctor is already very familiar with the
 24
product. At the same time, when the consumer actually buys the product, he does not go to any regular store. He has to go to the
pharmacy. The one who dispenses the product is also an expert- the Pharmacist. So the chances of confusion is very unlikely.

Why was this highlighted in this case?

Because if we examine then disregard the type of product that the mark is used, chances are youll be confused because the words
sound alike. On one hand it is Atussin, on the other there is Pertussin. So the likelihood of confusion if you examine the mark as they
are, youll most likely to get confused. BUT you have to check if it gives the controlling factor as to the tendency of the purchaser
to be confused.

Another thing which will be considered is the value of the goods that is going to be purchased. In the case of Emerald Garments
Mfg. Corp. vs. CA, there is no likelihood of confusion. What are the marks involved? Stylistic Mr. Lee and the Lee marks. There is
no likelihood of confusion because : What is the attitude of the buyer? In startng to buy, he is already has a history of what the product
is. He is very familiar and at the same time, he has already mulled over the decision before buying. Firstly because, it is not an
inexpensive item, it is of value. So there is no likelihood of confusion.

EMERALD GARMENTS MFG. CORP. VS CA

G.R. NO. 100098

FACTS: In 1981, H.D Lee Co., Inc., a foreign company, filed an opposition against the trademark application of Emerald Garment.
Allegedly, the trademark Stylistic Mr. Lee sought to be applied for by Emerald Garment is too confusingly similar with the brand Lee
which has for its variations Lee Riders, Lee Sures, and Lee Leens. The Director of Patents as well as the Court of Appeals ruled in
favor of H.D. Lee Co.

ISSUE: Whether or not Emeralds Stylistic Mr. Lee creates confusing similarity with Lee

HELD: No. The Supreme Court considered that the trademarks involved as a whole and ruled that Emerald Garments STYLISTIC
MR. LEE is not confusingly similar to H.D. Lees LEE trademark. The trademark Stylistic Mr. Lee, although on its label the word
LEE is prominent, the trademark should be considered as a whole and not piecemeal. The dissimilarities between the two marks
become conspicuous, noticeable and substantial enough to matter especially in the light of the following variables that must be factored
in.

First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not your ordinary household items like
catsup, soy sauce or soap which are of minimal cost. Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is
predisposed to be more cautious and discriminating in and would prefer to mull over his purchase. Confusion and deception, then, is
less likely.

Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does not ask the sales clerk for generic
jeans but for, say, a Levis, Guess, Wrangler or even an Armani. He is, therefore, more or less knowledgeable and familiar with his
preference and will not easily be distracted.

Finally, in line with the foregoing discussions, more credit should be given to the ordinary purchaser. Cast in this particular
controversy, the ordinary purchaser is not the completely unwary consumer but is the ordinarily intelligent buyer considering the type
of product involved.

The issue of confusing similarity between trademarks is resolved by considering the distinct characteristics of each case. In the present
controversy, taking into account these unique factors, we conclude that the similarities in the trademarks in question are not sufficient
as to likely cause deception and confusion tantamount to infringement.

Identical with Prior Marks

ESSO STANDARD EASTERN INC. VS CA
G.R. No. L-29971

FACTS: The petitioner Esso Standard is a foreign corporation licensed to do business in the Philippines. It is engaged in the sale of
"petroleum products which are identified by the trademark Esso. Esso is a successor of Standard Vacuum Oil Co., it registered as a
business name with the Bureau of Commerce in 1962. United Cigarette is a domestic corporation engaged in the manufacture and sale
of cigarettes. It acquired the business from La Oriental Tobacco Corp. Including patent rights, one of which is the use of Esso on its
cigarettes.
 25
The petitioner filed with a trademark infringement case alleging that it acquired goodwill to such an extent that the buying public would
be deceived as to the quality and origin of the said products to the detriment and disadvantage of its own products. The lower court
found United Cigarette guilty of infringement. Upon appeal, the Court of Appeals ruled that there was no infringement in this case.

ISSUE: Is there infringement committed?

HELD: None. Infringement is defined by law as the use without the consent of trademark owner of any reproduction, counterfeit, copy
or colorable imitation pf any registered mark or tradename which would likely cause confusion or mistake or deceive purchasers or
others as to the source or origin of such goods.
The products of both parties (petroleum and cigarettes) are non-competing. But as to whether trademark infringement exists depend on
whether or not the goods are so related that the public may be or is actually deceived and misled that they come from the same maker.
Under the Related Goods Theory, goods are related when they belong to the same class or have the same descriptive properties or
when they have same physical attributes. In this case, the goods are absolutely different and are so foreign from each other it would be
unlikely for purchasers to think that they came from the same source. Moreover, the goods flow from different channels of trade and are
evidently different in kind and nature.

Compare the case of Emerald Garments Mfg. Crp. vs CA with Del Monte Corp. vs CA. In Del Monte, the mark involved is DEL
MONTE CATSUP. The other brand is SUNSHINE FRUIT CATSUP. So if you will not examine the mark as they appear in their
respective products, there is no identity nor similarity. But the Court said: We have to consider other products. How do they appear
in their respective products or labels? The Court enumerated the comparison between the two, and there were a lot similarities: the
color scheme, the shape of the logo, and the over-all appearance of the label. Another determining factor is the use of the bottle. It was
revealed in this case that Sunshine Sauce Manufacturing used recycled bottles of Del Monte Corporation which has stamped marks of
the latter. (For SIr) This is the pivotal point of the ruling. BUT, the item involved here (as regards the attitude of the buyer) is different in
the case of Emerald, because in this case the item is a common household item. One can buy it in a regular basis. Purchasers can
afford to be negligent.

DEL MONTE CORP. VS CA

181 SCRA 410 (1990)

FACTS: Del Monte granted Philippine Packing corp. the right to manufacture, distribute and sell in the Philippine various products
under the Del Monte trademark and logo. Del Monte was able to quire certificate of registration for its marks del monte and its logo;
besides the Del Monte catsup bottle configuration. Years later, Sunshine Sauce Manufacturing acquired certificate of registration for the
logo of its Sunshine Fruit Catsup. Sunshines product is contained in various bottles, including Del Monte bottles. Having received
reports that Sunshine was using its exclusively designed bottles and a logo confusingly similar to Del Montes PhilPack warned
sunshine to desist from doing so. Ignored, PhilPack and Del Montesued. The trial court ruled in favor of sunshine. The Court of Appeals
affirmed the decision. Hence, the petition for certiorari.

ISSUE: Whether the Sunshine label is a colorable imitation of the Del Monte trademark.

HELD: Yes. The predominant colors used in both labels are green and red orange. The word catsup in both bottles is printed in white
and the print/letter style is the same. Although the logo of sunshine is not a tomato, it approximates that of a tomato. The person who
infringes a trademark does not normally copy out but only makes colorable changes, employing enough points of similarity to confuse
the public and enough points of differences to confuse the courts.
When a manufacturer prepares to package his product, he has before him a boundless choice of words, phrases, color and symbols
sufficient to distinguish his product from others. When sunshine chose, without reasonable explanation, to use the same colors and
letters as used by Del Monte, when the field of selection is so broad, the inevitable conclusion is that it was done deliberately to
deceive.
Further, despite the many choices available to it, Sunshine opted to use Del Montes bottle to market a product which PhilPack also
produces, notwithstanding the caution Del Monte Corporation, not to be refilled. This shows Sunshines bad faith and its intention to
capitalize3 on the reputation of Del Monte, and pass off its product as that of the latter.

Ordinary Purchaser
FRUIT OF THE LOOM VS CA
GR L-32747, 29 November 1984
 26
FACTS: Fruit of the Loom is the registrant of the trademark Fruit of the Loom, while General Garments Corp.is the registrant of the
trademark Fruit for Eve. Both trademarks cover clothing. In 1976, Fruit of the Loom filed with the trial court a complaint for
infringement and unfair competition against General Garments. Petitioner filed a complaint for infringement of trademark and unfair
competition against private respondent, alleging that:
1. The latters trademark is confusingly similar to the formers, both trademarks being used in womens panties and other textile product.
2. That the hang tags used by private respondent is a colorable imitation of those of the petitioner.

Petitioner respondent alleged that there was no confusing similarity between the trademarks. At the pre-trial, the following admissions
were made:
1. That the registered trademark Fruit for Eve bears the notice Reg. Phil. Pat. Off. While that of Fruit of the Loom does not.
2. That at the time of its registration, the plaintiff filed no opposition thereto.

The trial court ruled in favor of Fruit of the Loom. General Garments appealed. The appellate court reversed the trial courts
decision. Hence, the petition for review on certiorari.

ISSUE: Whether there was an infringement of the trademark of Fruit of the Loom.

HELD: No. The trademarks Fruit of the Loom and Fruit for Eve do not resemble each other as to confuse or deceive an
ordinary purchaser. No confusion would arise in the pronunciation of the two marks. Further,the similarities of the competing
trademarks are completely lost in the substantial difference in the design and general appearance of their respective hang tags. For one
to be confusingly similar to another, the discerning eye of the observer must focus not only on the predominant words but also on the
other features appearing in the labels.

Atty. Q: How did the Supreme Court describe the word Fruit? Is it considered generic?
A word is only considered generic in reference to the goods. We say milk, if it refers to milk. But the word apple is only considered
generic if it refers to the fruit. But if its used for another goods such as computers, its no longer generic. It now becomes fanciful or
arbitrary.

Attitude of the Buyer

When we say, Ordinary Purchaser, this should be regarded with a modicum of intelligence or a degree of discernment. Not just the
negligent type. You have to qualify.

In the case of Lim Hoa vs Director of Patents, the Court ruled that there is likelihood of confusion notwithstanding the fact that the
marks involved in this case are quite different. The marks used are both chicken but in one party has two fighting roosters while the
other one is a hen. They are different in sexes and the other mark used two midget roosters with the word Bantam.

But why did the SC rule that the marks are confusingly similar?
They highlighted the attitude of the purchaser.

Who are the usual persons that would purchase the said products?
They are the housewives and the house helps who are sometimes not equipped with a certain degree of intelligence. Overall, they can
afford to be negligent. They have no time to distinguish one from the other. As long as there is chicken on their mark, they will mistake
that product as the one they would intend to buy. One must consider these products as to how the purchasers will regard these
products and the label they have and the ways they appear.

LIM HOA VS DIRECTOR OF PATENTS

G.R. NO. L-8072, OCT. 31, 1956

FACTS: The Petitioner, Lim Hoa, filed with the Patent Office an application for the registration of a trademark, consisting of a
representation of two midget roosters in an attitude of combat with the word Bantam printed above them, he claiming that he had used
said trademark on a food seasoning product since April 25 of that year.
The Agricom Development Co., Inc., a domestic corporation, opposed the application on several grounds, among others, that the
trademark sought to be registered was confusingly similar to its register mark, consisting of a pictorial representation of a hen with the
words Hen Brand and Marca Manok, which mark or brand was also used on a food seasoning product, before the use of the
trademark by the applicant since the year 1946.

ISSUE: Whether or not the trademark of Lim Hoa comprising of two midget roosters is confusingly similar to Agricoms trademark which
depicts a hen.
 27

HELD: YES. After a careful examination of the facts above mentioned, and after comparing the two brands, we do not hesitate to say
and to hold that there is such similarity between the two brands as to cause confusion in the mind of the public that buys the food
seasoning product on the strength and on the indication of the trademark or brand identifying or distinguishing the same.

It has been consistently held that the question of infringement of a trademark is to be determined by the test of dominancy. Similarity in
size, form, and color, while relevant, is not conclusive. If the competing trademark contains the main or essential or dominant features
of another, and confusion and deception is likely to result, infringement takes place.

The danger of confusion in trademarks and brands which are similar may not be so great in the case of commodities or articles of
relatively great value, such as, radio and television sets for the prospective buyer, generally the head of the family or a businessman,
before making the purchase, reads the pamphlets and all literature available, describing the article he is planning to buy, and perhaps
even makes comparisons with similar articles in the market. He is not likely to be deceived by similarity in the trademarks because he
makes a more or less thorough study of the same.

But in the sale of a food seasoning product, a kitchen article of everyday consumption, the circumstances are far different. Said product
is generally purchased by cooks and household help, sometimes illiterate who are guided by pictorial representations and the sound of
the word descriptive of said representation. The two roosters appearing in the trademark of the applicant and the hen appearing on the
trademark of the Oppositor, although of different sexes, belong to the same family of chicken, known as manok in all the principal
dialects of the Philippines, and when a cook or a household help or even a housewife buys a food seasoning product for the kitchen the
brand of Manok or Marca Manok would most likely be upper most in her mind and would influence her in selecting the product,
regardless of whether the brand pictures a hen or a rooster or two roosters. To her, they are all manok. Therein lies the confusion, even
deception.

ASIA BREWERY, INC. vs. THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION
G.R. 103543 July 5, 1993

FACTS: San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark and unfair
competition on account of the latter's BEER PALE PILSEN or BEER NA BEER product which has been competing with SMC's SAN
MIGUEL PALE PILSEN for a share of the local beer market.

The trial court dismissed SMC's complaint because ABI "has not committed trademark infringement or unfair competition against" SMC.

In appeal by SMC, the Court of Appeals reversed the decision rendered by the trial court, finding the defendant Asia Brewery
Incorporated GUILTY of infringement of trademark and unfair competition. ABI then filed a petition for certiorari.

ISSUE: Are the words PALE PILSEN as part of ABIs trademark constitute infringement of SMCs trademark?

HELD: NO. Infringement is determined by a test of dominancy. If the competing trademark contains the main or essential or dominant
features of another and confusion and deception is likely to result, infringement takes place. A closer look at the trademark of both
companies will show that the dominant features of each absolutely bear no similarity to each other. SMCs dominant trademark is the
name of the product, San Miguel Pale Pilsen written in white Gothic letters with elaborate serifs at the beginning and end of the letters
S and M on an amber background while ABIs is the name Beer Pale Pilsen with the word Beer written in large amber letters, larger
than any of the letter found in SMC label.

The word pale pilsen on ABIs trademark does not constitute trademark infringement for it is a generic word descriptive of the color of
a type of beer. No one may appropriate generic or descriptive words for they belong to the public domain.

ABI is likewise not guilty of unfair competition for unfair competition is the employment of deception or any other means contrary to
good faith by which a person shall pass off the goods manufactured by him for those of another who has already established goodwill
for his similar goods. The universal test for this is whether the public is likely to be deceived. Actual or probable deception and
confusion on the part of the customers by reason of defendants practices must appear. However, this is unlikely to happen in the case
at bar for consumers generally order beer by brand. Also, the fact that ABI also uses amber-colored steinie bottles cannot constitute
unfair competition for ABI did not copy SMCs bottle. SMC did not invent but merely borrowed the steinie bottle from abroad. Likewise,
amber is the most effective color in preventing transmission of light thus providing maximum protection to beer. 320 ml is likewise the
standard prescribed under Metrication Circular No. 778. The fact that it is the first to use the steinie bottle does not give SMC a vested
 28
right to use it to the exclusion of everyone else. Nobody can acquire any exclusive right to market articles supplying the simple human
needs in containers or wrappers of the general form, size and character commonly and immediately used in marketing such articles.

There is no confusing similarity between the competing beers therefore ABI neither infringed SMCs trademark nor did it commit unfair
competition.

Atty. Q: With these cases, the Court considers the definition of ordinary purchaser as that it depends on the type of use of that
purchaser. This is also a guideline in determining whether a mark is confusingly similar or not.

Doctrine of Colorable Imitation

ETEPHA VS DIRECTOR OF PATENTS
16 SCRA 495 (1966)
FACTS: On April 23, 1959, private respondent Westmont Pharmaceuticals, Inc. sought registration of trademark Atussin This was
objected to by petitioner Etepha, A.G. alleging that it will be detrimental on their part as it is confusingly similar to its Pertussin. Both
products deal with the treatment of cough.

ISSUE: Whether or not Attusin may be registered as a trademark.

HELD: Yes. x x x 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.

While tussin by itself cannot thus be used exclusively to identify ones goods, it may properly become the subject of a trademark by
combination with another word or phrase.
The two labels are entirely different in colors, contents, arrangement of words thereon, sizes, shapes and general appearance. The
contrasts in pictorial effects and appeals to the eye is so pronounced that the label of one cannot be mistaken for that of the other, not
even by persons unfamiliar with the two trademarks.

We cannot escape notice of the fact that the two words do not sound alike when pronounced.

Atty. Q: What is the relevance of the filing of action based on colorable imitation in so far as the issue of infringement?
Colorable imitation likely causes the ordinary purchasers to be deceived due to it having close or ingenious imitation of the other mark.

The terms is close and ingenious imitation. But the underlying principle is that: the Law does not require one to have a malicious
intent. It is different from unfair competition because in the latter, there really is an intent to thrive on the popularity of the other product
or mark. Whereas in infringement, the fact of using or registering a mark that is similar or identical, is already considered as an act
violating the right of the trademark owner, regardless of your intent. Even is there is no malice, the fact that your mark is confusingly
similar or identical would be a ground for non-registration or a finding of guilt in a trademark infringement suit.

Should there be a requirement of proof to show intention to imitate?

NO. The mere fact that the mark is confusingly similar will already suffice or support your position that the mark should not be
registered or should be considered as an infringing mark as the case may be. Intention here is not relevant.

How do you determine the presence of colorable imitation?

Only judging the mark as they appear in the products, by comparison. You dont have to prove that the manufacturer of the goods using
the alleged infringing mark intended to ride on the popularity of another. It is not relevant. As long as the mark (as they appear on the
goods) will be considered confusingly similar, and the means employed is in close and ingenious imitation, that will be sufficient that the
mark should not be accepted for application or that the mark should be considered as an infringing mark, as the case may be.

Why did the law state it this way, that there needs to proving of intent to imitate?
This so because no intention to imitate has always been used as defense by defendants in infringement cases.
Ex: Its just a coincidence that I adopted a part similar to another.
I do not have any idea of the mark of that person who sue. I do not even know the goods he is selling.

Doctrine of Inexplicable Use

 29
ARCE SONS AND COMPANY VS SELECTA BISCUIT COMPANY, INC.
(G.R. No. L-14761 and G.R. No. 17981)
FACTS: R filed for registration of the word SELECTA as trade-mark to be use in its bakery products. The E found that the trade-mark
sought to be registered resembles the word SELECTA used by the P in its milk and ice cream products so that its use by R will cause
confusion as to the origin of their respective goods, recommending then that the application be refused. Upon reconsideration, PO
ordered the publication.
P filed its opposition thereto on several grounds, among which are: that the mark SELECTA had been continuously used by P in the
manufacture and sale of its products, including cakes, bakery products, milk and ice cream from the time of its organization and even
prior thereto by its predecessor-in-interest, Ramon Arce; that the mark SELECTA has already become identified with name of the P
and its business; that the mark to which the application of R refers has striking resemblance, both in appearance and meaning, to Ps
mark as to be mistaken therefor by the public and cause Rs goods to be sold as Ps; P actually filed a complaint for UC asking for
damages and for the issuance of a WI.
CFI rendered decision perpetually enjoining R from using the name SELECTA and ordering it to pay P by way of damages. R
appealed this to the CA.
Meanwhile, the DP dismissed Ps opposition. Hence, P interposed the present petition for review. The two cases are now before the SC
for consolidated decision.

ISSUE: Whether or not the tradename SELECTA has acquired secondary meaning in favor of petitioner.

HELD: YES. The word SELECTA, it is true, may be an ordinary or common word in the sense that may be used or employed by
anyone in promoting his business or enterprise, but once adopted or coined in connection with ones business as an emblem, sign or
device to characterize its products, or as a badge of authenticity, it may acquire a secondary meaning as to be exclusively associated
with its products and business. In this sense, its use by another may lead to confusion in trade and cause damage to its business. And
this is the situation of petitioner when it used the word SELECTA as a trade-mark. In this sense, the law gives its protection and
guarantees its use to the exclusion of all others. And it is also in the sense that the law postulates that The ownership or possession of
a trademark,. . . shall be recognized and protected in the same manner and to the same extent, as are other property rights known to
the law, thereby giving to any person entitled to the exclusive use of such trade-mark the right to recover damages in a civil action from
any person who may have sold goods of similar kind bearing such trade-mark (Sections 2-A and 23, Republic Act No. 166, as
amended).

The term SELECTA may be placed at par with the words Ang Tibay which this Court has considered not merely as a descriptive term
within the meaning of the Trade-mark Law but as a fanciful or coined phrase, or a trade-mark. In that case, this Court found that
respondent has constantly used the term Ang Tibay, both as a trade-mark and a trade-name, in the manufacture and sale of slippers,
shoes and indoor baseballs for twenty-two years before petitioner registered it as a trade-name for pants and shirts so that it has
performed during that period the function of a trade-mark to point distinctively, or by its own meaning or by association, to the origin or
ownership of the wares to which it applies.

The rationale in the Ang Tibay case applies on all fours to the case of petitioner.

In view of the foregoing, we hold that the DP committed an error in dismissing the Ps opposition, and consequently, we hereby reverse
his decision. Consistently with this finding, we hereby affirm the decision of the court a quo.

Atty. Q: This is very relevant if there is an opposition to your application or in an infringement case.
Why? Because, of course, an oppositor will oppose to your application because it is prejudicial to their prior registered mark, or in an
infringement suit, it will be prejudicial to their business because it will deprive them of expected income. These are the allegations of the
oppositors.

Now, in the case, the defendant has to burden of showing that the above-mentioned is established. The one that was used was
Selecta. The defendant has to explain why they used the word Selecta. It must be a plausible explanation as to the reason why,
because the rule is: When you decide to use a mark, you have with you a boundless choice of words, letters, symbols, and others to
choose from. Yet you choose the word that is very similar to a popular product. Hence, you have to explain why you chose it. Just like
in Lim Hoa vs Director of Patents, of all the animals available, why did you choose chicken?

So if you cannot explain that sufficiently and if you cannot convince the Court as to why you adopted that part, then the implication is
that you only want to ride on the popularity of the registered trademark. This is the DOCTRINE OF THE INEXPLICABLE USE. By the
term itself- inexplicable, one cannot explain why he chose certain work because it is already implied that once he decided to apply the
mark, you have the choice of boundless words, symbols, logos, etc.
 30

Shin Min-A: Sir, does this also include the issue in McDonalds Corp. vs L.C. Big Mak wherein the new applicant has nothing to lose
versus an old one who is already established as such. Then the SC favored the old one (McDo) because the new one (L.C. Big Mak)
would have chosen a different name?

Atty. Q: Yes, this is similar with that. There are several rulings of the court that adopted this doctrine but they just phrased it differently.
But the more prominent one is the case of Arce Sons and Company vs Selecta Biscuit Company, Inc.

In the case, the SC even asked Why did you use the word Selecta- which was a Spanish term of the Chinese term Ching Suan
which means Selected. Why not use Selected then? But Selecta Biscuits was not able to explain it thus it is implied that they used
such term to ride on the popularity of the Arce Sons and Companys product.

Doctrine of Confusion of Goods vs. Confusion of Business

MCDONALDS CORP. VS L.C. BIG MAK
G.R. NO. 143993, AUGUST 18, 2004
FACTS: P is a corporation organized under the laws of US and operates, by itself or through its franchisees, a global chain of fast-food
restaurants, and owns a family of marks including the BIG MAC mark for its double-decker hamburger sandwich. P applied for the
registration of the same trademark (which was later approved) and pending approval, introduced its Big Mac hamburger sandwiches.

R is a domestic corporation which operates fast-food outlets and snack vans in MM and nearby provinces, which menu includes
hamburger sandwiches and other food items.

R applied for the registration of the BIG MAK mark for its hamburger sandwiches. P opposed on the ground that Big Mak is a
colorable imitation of its registered Big Mac mark for the same food products.

P filed TMI/UC against R with the RTC, which found the latter liable but dismissed the complaint for lack of merit and insufficiency of
evidence. R appealed to the CA. CA reversed RTC Decision and found R not liable. CA denied Ps MR.

ISSUES:
(1) Whether or not the word BIGis incapable of exclusive appropriation;
(2) Whether or not Rs BIG MAK is confusingly similar with Ps BIG MAC trademark that will constitute trademark infringement; and
(3) Whether or not there is Unfair Competition.

HELD:
(1) The contention has no merit. The Big Mac mark, which should be treated in its entirety and not dissected word for word, is neither
generic nor descriptive. Generic marks are commonly used as the name or description of a kind of goods, such as Lite for beer or
Chocolate Fudge for chocolate soda drink. Descriptive marks, on the other hand, convey the characteristics, functions, qualities or
ingredients of a product to one who has never seen it or does not know it exists, such as Arthriticare for arthritis medication. On the
contrary, Big Mac falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual characteristics of the
product it represents. As such, it is highly distinctive and thus valid.

(2) In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test and the holistic test. The
dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion. 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.

This Court, however, 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.

Applying the dominancy test, the Court finds that respondents use of the Big Mak mark results in likelihood of confusion. First, Big
Mak sounds exactly the same as Big Mac. Second, the first word in Big Mak is 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.
 31
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, considering the Filipino language, even the last
letters of both marks are the same. Clearly, respondents have adopted in Big Mak not only the dominant but also almost all the
features of Big Mac. Applied to the same food product of hamburgers, the two marks will likely result in confusion in the public mind.

Certainly, Big Mac and Big Mak for hamburgers create even greater confusion, not only aurally but also visually. Indeed, a person
cannot distinguish Big Mac from Big Mak by their sound. When one hears a Big Mac or Big Mak hamburger advertisement over
the radio, one would not know whether the Mac or Mak ends with a c or a k.

Petitioners aggressive promotion of the Big Mac mark, as borne by their advertisement expenses, has built goodwill and reputation
for such mark making it one of the easily recognizable marks in the market today. This increases the likelihood that consumers will
mistakenly associate petitioners hamburgers and business with those of respondents.
Thus, we hold that confusion is likely to result in the public mind. We sustain petitioners claim of trademark infringement.

(3) 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 goods as offered for sale to the public. Actual fraudulent intent need not be shown.

Unfair competition is broader than trademark infringement and includes passing off goods with or without trademark infringement.
Trademark infringement is a form of unfair competition. Trademark infringement constitutes unfair competition when there is not merely
likelihood of confusion, but also actual or probable deception on the public because of the general appearance of the goods. There can
be trademark infringement without unfair competition as when the infringer discloses on the labels containing the mark that he
manufactures the goods, thus preventing the public from being deceived that the goods originate from the trademark owner.

Passing off (or palming off) takes place where the defendant, by imitative devices on the general appearance of the goods, misleads
prospective purchasers into buying his merchandise under the impression that they are buying that of his competitors. Thus, the
defendant gives his goods the general appearance of the goods of his competitor with the intention of deceiving the public that the
goods are those of his competitor.

The dissimilarities in the packaging are minor compared to the stark similarities in the words that give respondents Big Mak
hamburgers the general appearance of petitioners Big Mac hamburgers. Section 29(a) expressly provides that the similarity in the
general appearance of the goods may be in the devices or words used on the wrappings. Respondents have applied on their plastic
wrappers and bags almost the same words that petitioners use on their Styrofoam box. What attracts the attention of the buying public
are the words Big Mak which are almost the same, aurally and visually, as the words Big Mac. The dissimilarities in the material and
other devices are insignificant compared to the glaring similarity in the words used in the wrappings.

Section 29(a) also provides that the defendant gives his goods the general appearance of goods of another manufacturer.
Respondents goods are hamburgers are also the goods of If respondents sold egg sandwiches only instead of hamburger sandwiches,
their use of the Big Mak mark would not give their goods the general appearance of petitioners Big Mac hamburgers. In such case,
there is only trademark infringement but no unfair competition. However, since respondents chose to apply the Big Mak mark on
hamburgers, just like petitioners use of the Big Mac mark on hamburgers, respondents have obviously clothed their goods with the
general appearance of petitioners goods.
Moreover, there is no notice to the public that the Big Mak hamburgers are products of L.C. Big Mak Burger, Inc.

Thus, there is actually no notice to the public that the Big Mak hamburgers are products of L.C. Big Mak Burger, Inc. and not those
of petitioners who have the exclusive right to the Big Mac mark. This clearly shows respondents intent to deceive the public. Had
respondents placed a notice on their plastic wrappers and bags that the hamburgers are sold by L.C. Big Mak Burger, Inc., then they
could validly claim that they did not intend to deceive the public. In such case, there is only trademark infringement but no unfair
competition. Respondents, however, did not give such notice.

We hold that as found by the RTC, respondent corporation is liable for unfair competition.

WHEREFORE, we GRANT the instant petition. We SET ASIDE the CA Decision and Resolution and REINSTATE the RTC Decision,
finding R liable for TMI/UC.
 32
Mellissa Ricks: In this case, the SC ruled that LC Big Mak is guilty of infringement. How do you execute that ruling, Sir? Because up
until now its still subsisting.
Atty. Q: Thats the question I was about to ask. Cause up until now indeed, LC Big Mak is still in the market. I would just assume, that
probably they entered into a concession because otherwise, McDonalds would have to enforce their right, just like what happened with
My Joy which was formerly called MacJoy.

Bogart The Explorer: Kanang JollyAnt, Sir?

Atty. Q: These are matters that maybe brought to the attention of the officers of Jollibee, its their prerogative whether they would file a
case or not. Would be practical to file a case? Thats left on the judgment of the management of Jollibee.

In the Doctrine of Confusion of Goods vs Confusion of Business, this has practically expanded the coverage of the issue of
confusing similarity because in the law, we only have confusion of goods- whether closely related or competing goods.
Somehow, it has expanded the coverage because now, our jurisprudence has said that protection is not only limited to competing
goods or closely-related goods but also the type of goods that will be considered by consumer as the logical expansion of the business.
In the case of McDonalds Corp. vs L.C. Big Mak, the SC said that it is not far-fetched that McDonalds would venture into low-end
products or low class consumers. Thats the reason why they came up with this ruling preventing L.C. Big Mak from using the word
Mak or Mc. it has something to do with the type of business that is used.

But this was explained better in Sterling Products International, Inc. vs Farbenfabriken Bayer Aktiengersellschaft.

STERLING PRODUCTS INTERNATIONAL INC. VS FARBENFABRIKEN BAYER AKTIENGESELLSCHAFT

GR L-19906, 30 April 1969

FACTS: The Bayer Cross in circle trademark was registered in Germany in 1904 to Farbenfabriken vorm.Friedr. Bayer (FFB),
successor to the original Friedr. Bauyer et. Comp., and predecessor to FarbenfabrikenBayer Aktiengesselschaft (FB2). The Bayer, and
Bayer Cross in circle trademarks were acquired by SterlingDrug Inc. when it acquired FFBs subsidiary Bayer Co. of New York as a
result of the sequestration of its assets by the US Alien Property Custodian during World War I.

Bayer products have been known in Philippines by the close of the 19thcentury. Sterling Drugs, Inc., however, owns the trademarks
Bayer in relation to medicine. FBA attempted to register its chemical products with the Bayer Cross in circletrademarks. Sterling
Products International and FBA seek to exclude each other from use of the trademarks in the Philippines.

The trial court sustained SPIs right to use the Bayer trademark for medicines and directed BA to add distinctive word(s) in their mark to
indicate their products come from Germany. Both appealed.

ISSUE: Whether SPIs ownership of the trademarks extends to products not related to medicine.

HELD: No. SPIs certificates of registration as to the Bayer trademarks registered in the Philippines cover medicines only. Nothing in
the certificates include chemicals or insecticides. SPI thus may not claim first use of the trademarks prior to the registrations thereof
on any product other than medicines. For if otherwise held, a situation may arise whereby an applicant may be tempted to register a
trademark on any and all goods which his mind may conceive even if he had never intended to use the trademark for the said goods.

Omnibus registration is not contemplated by the Trademark Law. The net result of the decision is that SPI may hold on its Bayer
trademark for medicines and FBA may continue using the same trademarks for insecticide and other chemicals, not medicine.The
formula fashioned by the lower court avoids the mischief of confusion of origin, and does not visit FBA with re-probation and
condemnation. A statement that its product came from Germany anyhow is but a statement of fact.

Atty. Q: The products involved are medicines and the other one are chemicals. The mark involved is: Bayer Cross in circle. It is a
very popular mark. A German company is the originator of the mark. But with the events in World War II, the company that used the
trademark in USA, still a German company which is a subsidiary of the parent company of Germany, was considered as an enemy
company that was seized by the US authorities. It was later sold to a US company and that US company engaged its business here in
the Philippines. But prior to that, before coming to the Philippines, the German company was already selling chemicals prior to World
War II. The term Bayer is already familiar to the consumers in so far as the chemicals are concerned.

After World War II, the Bayer mark was also associated with the American company used for medicines. Here comes the problem.
There is now confusion as to who really is entitled to use the term Bayer Cross in circle.
 33
The Court acknowledged the fact that the term Bayer has been regarded by the consumers as having a German origin, and the
consumers had associated German products as having high standard quality. So the Court said, they can continue using the word
Bayer in medicines, in so far as the tradename is concerned- Sterling Products is concerned, and Bayer for chemicals, pesticides
(insecticides) to be specific, but they have to add a distinctive feature in so far as the defendant is concerned, in order to prevent
confusion of business. In fact, in this ruling, the Court said, the person who is the originator is entitled to protection. The right to a mark
stems from use. Adoption is not use. You really have to use it in the market. Why? Because what gives rise to your right in a mark is
its use.

What is the underlying reason behind?

When you use the mark in the marker or in commerce, the consumers will associate your mark to the goods they are buying. That is the
real reason why use is very important.

It so happened that Sterling Products International, Inc. Although the legitimate owner of the Bayer Cross in circle, is not really the
originator of the mark. However, they are the owners of a certificate of registration, which is only for a specific type of product -
medicines. The Court provided us with another doctrine- the Omnibus mark rule: The law prohibits an omnibus registration.
This is because the law cannot anticipate the intention of the user other than what he registered as goods. That is why, in the trademark
registration, you have to indicate the class of goods that you intend to use your mark for. And this is only limited to what your
registration states, just like what was discussed in the case of Canon Kabushiki Kaisha vs CA. Do not expect the law to provide you
with protection on something that you just realized later, like saying Ah, I will use this mark with a different type of goods. NO. The law
is very clear, there should be no omnibus registration. This was adopted in Sterling case, thats why Sterling Products Inc. Cannot
prevent the German company from using the term Bayer to be used in their insecticide products.

Melissa Ricks: Sir, for example you have registered a certain logo for this particular kind of goods. But years later, for some reason,
your company thought that maybe you need a new look, hence you decided to change that logo. Can you just ride on the old one for
the revision or do you need to register for another trade mark?
Atty. Q: The law allows you to make revisions as long as the distinctiveness will remain.
Melissa Ricks: Sir, just like in Aboitiz, they completely changed their logo. Do they have to register again?

Bogart the Explorer: And same with Smart and PLDT Sir, they really revamped their logos.
Atty. Q: So if it is entirely different, then you have to register. If you will use a totally different mark, then, register again. The law only
allows revision as long as the distinctive feature will not be lost. The new application will also be considered an original registration.

Bogart the Explorer: Sir, in certain companies, they have alternate logo Sir but they just use distinctive fonts. Do you have to apply for
the registration of both logos separately?
Atty. Q: Yes. You have to apply for each trademark that you intend to use because the law on trademark (especially in infringement),
the protection is only limited to what the registration includes. Because no intent is necessary to be proven or no malicious intent is the
malum prohibitum in the prosecution in trademark infringement. So, you have to register your mark if you adopt several marks for one
product. If you accuse someone of using your mark but you did not include it in your registration, then there will be no trademark
infringement. But you can also move for a case of unfair competition because of the use.

Other Non-Registrable Marks:

Confusingly Similar With Well-Known Marks Internationally and in the Philippines (Sec. 123.1 (f))
Atty. Q: Can well-known marks be protected here in the Philippines even if they are not registered here? Can the owners of these well-
known marks sue in Philippine courts even if they are not doing business here in the Philippines?

One of the requirements in Procedural law for foreign companies or entities is that they have to establish that they are doing business in
the Philippines. The foreign companies or entities not doing business in the Philippines have no personality to sue in courts. Exception:
internationally well-known marks. Because the protection of international well-known makrs has no boundaries, as long as
you prove that your mark is indeed well-known. Hence the standards here is: the mark should be well known internationally- and
in the Philippines.

Melissa Ricks: Sir, is it okay to sue even if your mark is not yet internationally well-known but you are a signatory to the Paris
Convention?
Atty. Q: No. If the issue of the personality to sue is to be resolved, then you must comply with certain requirements under the law.

Who determines whether the mark is well-known internationally and in the Philippines?
The law says: by competent authority. So the Director General of IPO.
 34
Whether or not it is registered here (Sec. 123.1 (e)
Regardless of registration, it cannot be registered if it is identical, confusingly similar or if it constitutes a translation of a mark.

The major factor of whether or not the mark is well-known internationally and in the Philippines:
The knowledge of the relevant sector, rather than the public at large. You have to take into account the goods for which the mark is
used.

What is the difference between paragraphs e and f?

Par. E: whether or not registered in the Philippines
Par. F: registered in the Philippines

So what if the internationally well-known mark is registered?

It is also deemed protected and entails a bigger scope of protection. Paragraph f covers not only similar or identical goods but also
those that are not similar to the goods 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. Moreover, if the interests of the owner of the registered mark
are likely to be damaged because of the said use. Hence, as long as that internationally well-known mark is registered, no one can
register another mark in relation thereof.

Misleading Marks
Section 123.1 (g) (A mark cannot be registered if it):
Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services;

Atty. Q.: This is what you call as MISLEADING MARKS.

We learned that we can choose any mark for a product. It is better to use a fanciful or arbitrary mark for it to be distinctive. But we must
note if such mark would mislead the public, because if so, it will not be allowed registration.

Generic Marks
Section 123.1 (h) (A mark cannot be registered if it):
Consists exclusively of signs that are generic for the goods or services that they seek to identify;

Atty. Q: Generic marks cannot be used for registration because they belong to the public domain for appropriation.

Customary Marks
Section 123.1 (i) (A mark cannot be registered if it):
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;

Atty. Q.: So it has been very usual that when you photocopy, youd say Pa-Xeroxi ko. In reality you are referring to the machines
brand. These are exclusive marks supposedly (Ex. Scotchtape, cellophane, elevator, escalator, Fridged Aire, Kodak, Pampers,
Tupperware). However it became customary for them to be called this way. When a mark becomes customary, it can no longer be
registered.

Descriptive Marks
Section 123.1 (j) (A mark cannot be registered if it):

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;

Shapes that are used in Technical Factors

Section 123.1 (k) (A mark cannot be registered if it):
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;

Colors Alone
Section 123.1 (l) (A mark cannot be registered if it):
Consists of color alone, unless defined by a given form

Atty. Q: In our jurisdiction, colors alone cannot be registered. But in other jurisdiction, they allowed it, like the Ferrari red.
 35

Contrary to Public Order or Morality

Section 123.1 (m) (A mark cannot be registered if it):
Is contrary to public order or morality.

Doctrine of Secondary Meaning

Sec 123.2. As regards signs or devices mentioned in paragraphs (j), (k), and (l), 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 applicants 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.

Atty. Q: This is an exception the rule that generic or descriptive marks cannot be registered. It means that the word or term is already
understood in its secondary sense, not in its original sense. Leading case:

ANA L. ANG VS. TORIBIO TEODORO

FACTS: Toribio Teodoro has continuously used AngTibay" both as a trademark and trade name, in
he manufacture and sale of slippers, shoes and indoor baseballs since 1910. He formally registered it as trademark on September
1915 and as a trade name in 1933. Petitioner registered the same trademark Ang Tibay" for pants and shirts in 1932. Petitioner now
assails the validity of respondents trademark and contends that the phrase Ang Tibay is a descriptive term and therefore, cannot be
subject of a trademark registration. Petitioner claims also that respondent committed infringement with regard to the trademark Ang
Tibay."

ISSUE: Whether the trademark is registrable.

HELD: Yes. Ang Tibay is not a descriptive term within the meaning of the trademark Law but rather a fanciful or coined phrase which
may properly be appropriated as a trademark. And it must be noted that it was the respondent who first used the term AngTibay" and
in fact it has already acquired a secondary meaning in a proprietary connotations with regard to the infringement, it is proper to say
that there is no infringement as the goods sold by the parties are not the same, In fact, it is more correct to conclude that the selection
by petitioner of the same trademark for pants and shirts was motivated by a desire to get a free ride or the reputation and selling power
it has acquired at the expense of the respondents.

Atty. Q: When you hear the word Ang Tibay, does it give you any idea about what the product is?
No.

What have you learned of Descriptive terms?

These consist 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.
Ex. Del Monte Banana Catsup/Ketchup. The term Ketchup is generic while the term banana is descriptive- for it gives us an
idea as to what is contained in that product.
Sun-Dried Raisins. Raisin = generic term; Sun dried = process of making the goods
Honey-baked Ham It tells us how it was prepared, that it was baked in honey. Honey is descriptive, it is not registrable.

Now can you classify the words Ang Tibay as descriptive?

It was argued that Ang Tibay is really descriptive. It merely gives an idea to the consumer as to the quality, not to the characteristics.
In fact, if you interpret it literally, the words Ang Tibay is an expression itself, and exclamation of how the product is as it was used.
Ang Tibay- durable.

However, the Court said that granting that the words Ang Tibay are indeed descriptive, still it can be registered as it already acquired
a secondary meaning. Actually, the doctrine of secondary meaning is an exception to the rule that generic or descriptive marks
cannot be registered. Hence, it is erroneous to say that generic or descriptive marks can never be registered because such marks can
later be owned for exclusive use if such acquired secondary meaning.

Nonetheless, you still have to prove that such term has become distinctive because we are now applying the exception to the rule that
generic or descriptive marks cannot be registered. You are now saying that your mark can be registered, and can therefore be
exclusively used.

What are the requirements in proving that the term has become distinctive?
 36
The law states exclusive and continuous use in commerce in the Philippines for five (5) years.

Thats why in the case of Asia Brewery Inc. vs CA I really believe that Pale Pilsen of Asia Brewery Inc. Constitutes trademark
infringement because such terms already acquired secondary meaning. San Miguel said that it had been using the terms Pale pilsen
for more than a hundred years while Asia Brewery just came into the picture just recently. According to the Court, the words pale
pilsen are descriptive, for the word pale describes the type of liquor and pilsen is the word used relating the origin of the goods,
being located in Pilsen, Czechoslovakia.
However, for me, Pale Pilsen already acquired secondary meaning. It had already been used to be understood as referring to this
type of beer- San Miguel Beer. San Miguel has been selling this beer beer in the market for a very long time, perhaps without any
competition. And for me, ruling otherwise would be unfair on the part of San Miguel not to have exclusive use of Pale Pilsen because
they were the ones responsible for introducing this beer product in the Philippines. And the reason why this type of beer became
popular was because of San Miguel.

Blake Shelton: Sir, isnt that considered a classification? Because in the use of I.P.A. (Indiana Pale Ale), it was still popularly used for
several brands of beer.
Atty. Q: Yeah, there is no argument that these terms can be used in a way to be considered as descriptive terms. However there is the
doctrine of secondary meaning, stating that there are descriptive terms that have acquired secondary meaning. Hence, in my opinion
only, the ruling in Asia Brewery Inc. vs CA is an erroneous ruling.

Kitkat: Sir, is the doctrine of secondary meaning only exclusive to the jurisdiction of the Philippines? Like as to where that product had
acquired such meaning?
Atty. Q: Yes, because we need to follow the territoriality principle, as what was explained in the case of Sterling Products
International Inc. vs FBA.

Bogart the Explorer: Sir, it was argued that Pale Pilsen was supposedly exclusively used by San Miguel. But since we are following
the territoriality principle, will it be correct to say that San Miguel will be forced to shed such terms if other companies from other
jurisdiction would use such in their own products?
Atty. Q: Yes, because that is the logical consequence if you do not have the exclusive use of such terms. Thats precisely the reason
why San Miguel Corp. moved for the exclusivity of Pale Pilsen. They firmly believe that they are entitled to exclusive use of these
terms as they were the ones responsible for introducing these terms in the Philippines and they have been in the market for a long
period of time. Thats the idea of trademark registration. This is the main reason why we need to apply for registration: to have
exclusivity of the mark. Hence, I really find it unfair for San Miguel to be given such ruling. Despite having established their name for a
very long time as compared to Asia Brewery Inc. who just recently started in commerce, still, they did not gain the exclusivity of use for
pale pilsen. The Court could have adopted the doctrine of secondary meaning.

Nature of the Goods to which the Mark is Applied

Sec. 123.3. The nature of the goods to which the mark is applied will not constitute an obstacle to registration. (Sec. 4, R.A.
No. 166a)

Atty Q: In other words, the application of registration will only limit to the mark, not to the type of goods. Especially if the product
involved is highly- questionable, you only focus on the mark.

Atty. Q: Are you familiar with the mark Aunt Annie? The store whose product is pretzels.
EH 405 : (Confused and everybodyyy) AUNTIE ANNES!!!
Atty. Q: Aw. Sorry. :D Anyway, we have a current pending application that used the mark Ana Tita for clothes and claims that he has
no idea of Auntie Annes (mehhh)

So would it be wise to proceed with the application?

I dont think so. Although one can search in the IPO website the several registered marks, but here the similarity is so striking, Tita is
the translation of Auntie. I dont think it will pass the requirements for registration. This is a practical example applying all the principles
that we have discussed so far.

Would you consider this as a confusingly similar mark?

Hmm. It could be. So Id rather advise my client to change the mark rather than face the risk of getting an opposition afterwards.

Melissa Ricks: Sir, in filing an opposition, do you have to pay fees? Will there be a financial burden on the part of the oppositor?
 37
Atty. Q: Yes, because it now becomes adversarial. It expanded the procedure in the registration. Supposedly, it is just between the
examiner and the applicant. But once it is filed with an opposition, it now then becomes adversarial, it will now be referred to the
Bureau of Legal Affairs.
Melissa Ricks: Is it really like filing a case in court, Sir?
Atty. Q: Yes, although it is not really like a trial in court as how you imagined it to be, but it will be a trial on pleadings, just like labor
cases.

The SC has made several pronouncements relating to marks that are confusingly similar and they serve as guides in determining
whether a mark is confusingly similar. The test is to determine whether there is colorable imitation.

Is there a need to establish intent? No.

Is there a requirement to establish actual confusion? No, because the requirement is only the likelihood of confusion. But take note, as
provided by the law itself, when a mark that is identified is also used in identical goods and services, remember this, there arises a
prima facie presumption of confusing similarity. That is provided by the law itself, Always remember that. When it comes to identical
marks used in identical goods or services, there is a presumption of likelihood of confusion or confusing similarity.

In judging whether there is colorable imitation, our jurisprudence have developed 2 types of tests, the holistic test and dominancy
test. But there is also guide in identifying confusing similarity, we call it phonetic similarity test. It will be used as a guide whether a mark
is confusingly similar when they sound alike, phonetic similarities. This is not the only thing that must be considered, whether or not
they sound alike, you have to judge the mark as they appear in their respective goods. Why was the phonetic similarity test applied in
Marvex? Take note that this was promulgated in the 1920s. The dominant medium of advertisement that time was the radio. More the
preculiar part of that case was that the parties were not able to present samples of their marks. The court only had to rely on the
phonetic similarities. Nevertheless, what is more applicable are the two tests, holistic test and dominancy test.

How would one discern which part of the mark is the dominant feature?
Before we go to a conclusion that it is confusingly similar, the initial step is to determine what is the dominant feature as a basis for
comparing the competing mark. Like in the case of Philippine Nut Industy v Standard, why was the word Planters considered as the
dominant feature? It is the most associated feature, it catches the eye or the buyers. What about in Asia Brewery v CA? The words
San Miguel Pale Pilsen, which were in white gothic, letter and were more elaborate and prominent.

In the case of Nestle, the word Master was considered as the dominant feature. Aside from the fact that it is the one that is more
prominent, it was also established that the owners consciously used Master as the selling point of the mark, conveying to the
consumers that their product is of premium quality. It was masterfully made. The manner of advertisement, the commercial attraction
was of the several personalities who were considered as masters of their respective fields. They were banking heavily on the term
Master.

Of the two tests, which is more reliable?

The law tends to favor 1 test, the Dominancy Test.

SEC. 155. Remedies; Infringement. - Any person who shall, without the consent of the owner of the registered mark:
155.1. 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, 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 in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive;

This does not mean that the holistic test cannot be applied anymore because of the principle that trademark infringement is a relative
concept.
Trademark Infringement Is A Relative Concept:
Canon Kabushiki Kaisha v CA
The likelihood of confusion of goods or business is a relative concept, to be determined only according to the particular, and sometimes
peculiar, circumstances of each case. Indeed, in trademark law cases, even more than in other litigation, precedent must be studied in
the light of the facts of the particular case.

Formal Requirement for application of registration

*Discussion on the Trademark Application Form*
All items included in the form are based on the provisions. Please study the provision and the form together. (Please refer to Sec 124-
146 kay I think mao na mga provi gipang discuss. I only included the provisions he mentioned gyud in the recording.)
 38

SEC. 124. Requirements of Application. - 124.1. The application for the registration of the mark shall be in Filipino or in English and
shall contain the following:
(a) A request for registration;
(b) The name and address of the applicant;
(c) The name of a State of which the applicant is a national or where he has domicile; and the name of a State in which the applicant
has a real and effective industrial or commercial establishment, if any;
(d) Where the applicant is a juridical entity, the law under which it is organized and existing;
(e) The appointment of an agent or representative, if the applicant is not domiciled in the Philippines;

(proof: SPA authorizing the person to represent the applicant in the entire application process. All communications and processes will
be sent to the representative. It is costly to send official communications to the applicant in his home country.)

(f) Where the applicant claims the priority of an earlier application, an indication of:
i) The name of the State with whose national office the earlier application was filed or if filed with an office other than a national
office, the name of that office,
ii) The date on which the earlier application was filed, and
iii) Where available, the application number of the earlier application;
(g) Where the applicant claims color as a distinctive feature of the mark, a statement to that effect as well as the name or names of the
color or colors claimed and an indication, in respect of each color, of the principal parts of the mark which are in that color;
(h) Where the mark is a three-dimensional mark, a statement to that effect;
(i) One or more reproductions of the mark, as prescribed in the
Regulations;
(j) A transliteration or translation of the mark or of some parts of the mark, as prescribed in the Regulations;
(k) The names of the goods or services for which the registration is sought, grouped according to the classes of the Nice Classification,
together with the number of the class of the said Classification to which each group of goods or services belongs; and

(http://ipophil.gov.ph/services/trademark/nice-classification-9th-edition)

(l) A signature by, or other self-identification of, the applicant or his representative.

Composite Mark:
A combination of words and figures. (eg Tipsy Pops and Device)
Word Mark: Only the words.

DISCLAIMER: You would want your mark to be as distinctive as possible. You also want to attach your make to a more popular term.
San Miguel Pale Pilsen for example. San Miguel cannot exclusively own the words Pale Pilsen because they cannot be registered as
they are distinctive terms. And yet, you may include it in your registration as only a component of your mark. The law allows you to do it,
such as Del Monte Banana Ketchup as the entire registered mark but the words banana and ketchup cannot be exclusively owned
because they are descriptive and generic terms, respectively. If you intend to include in your mark a component that cannot be
registered, the law allows you, however you are required to give a disclaimer.

SEC. 126. Disclaimers. - The Office may allow or require the applicant to disclaim an unregistrable component of an otherwise
registrable mark but such disclaimer shall not prejudice or affect the applicants or owners rights then existing or thereafter arising in
the disclaimed matter, nor such shall disclaimer prejudice or affect the applicants or owners right on another application of later date if
the disclaimed matter became distinctive of the applicants or owners goods, business or services.

Nice Classification:
What is the importance of indicating clearly the classes? To determine the scope of your contention because youre only entitled to the
contention in the same class or similar goods or services beyond that, no more. In the case of Canon, their protection only covers class
number 2, it does not include footwear which is class 35. In the case Phil Refining Company, they belong to the same class, ham and
edible oil, class 29. However, the court allowed the use of the word camia for ham even if they belong to the same class. The court
ruled that it is not the only factor that must be considered; you must consider the properties and the cost of the goods. The Nice
Classification only serves as the guide not the ultimate or the only factor that must be considered. But very important because the court
also said that it will not allow omnibus registration. In the case of Canon, and Sterling, these are very important rulings of the court. It
says, the law does not anticipate whether you intend to use the marks because you are only limited to what the certificate provides.

Priority Right of a Foreign Applicant

 39
Right of Priority/Priority Right
if you dont invoke the right of priority, your filing date will be the date when you submitted the requirements. If you intend to invoke the
right of priority, your foreign application will be considered as your local application because we follow the first to file rule. Whoever has
the earliest filing date acquires a right to the mark, subject to approval of your registration. What is also important to remember when
ivoking such, you must see to it that your foreign application will be granted because sec. 131.2.

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.

When you submit, you must pay the filing fee. Failure to pay the filing fee you will not be afforded a filing date. We all know that a filing
date is very important to be afforded the protection.

Where will you file? Bureau of Trademarks. It will then be assigned to a particular examiner. After filing, the examiner will examine the
formal requirements, whether your application is complete.

What is the purpose of this examination apart from the formalities? To examine whether a mark is registrable under sec 133.

SEC. 133. Examination and Publication. - 133.1. Once the application meets the filing requirements of Section 127, the Office shall
examine whether the application meets the requirements of Section 124 and the mark as defined in Section 121 is registrable under
Section 123.

What are the two element of a valid mark? Visible and Distinct.

After the formality examination, the examiner will issue an order of allowance, allowing the application for a publication. Since there
is publication, there is publication fee. What is the reason for publication? To give notice to third parties, an invitation for them to
oppose. But not just for the purpose of filing an opposition, they have to indicate or substantiate that their rights will be prejudiced
because of the application. Prior to opposition, the nature of the proceedings is ex parte. It will be prosecuted without an adverse party.
The only adversary is the examiner who will see to it that the requirements of the law are followed. Even if there is no opposition, the
examiner even before publication, will order you to amend your application. When that happens, you either act on the proposal for
amendment or not. If not, your application is deemed abandoned within a period of 3 months.

Where is it published? IPO Official Gazette. Once other parties files their oppositions, it ceases to be an ex parte proceeding, it now
becomes an inter partes proceedings. Where will the oppositor file his opposition? Bureau of Legal Affairs. It becomes an
administrative proceeding. It is inter partes, it is adversarial. The bureau will assign a particular person known as the hearing officer. He
will now notify the applicant to file its answer to the opposition. The proceedings will ensue between the parties. If there is no
opposition, we proceed to the issuance of the certificate of registration.

After filing, you will wait for your registration pending the approval, you have upto 3 years to file the Declaration of Actual Use.

Value of a certificate of registration: prima facie evidence of the validity of the registration, the ownership or the mark, and the
exclusive right to use. It may be disputed by contrary evidence.

SEC. 138. Certificates of Registration. - A certificate of registration of a mark shall be prima facie evidence of the validity of the
registration, the registrants ownership of the mark, and of the registrants exclusive right to use the same in connection with the goods
or services and those that are related thereto specified in the certificate.

What is the duration of the certificate of registration?

SEC. 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.
How do you maintain your mark during the lifetime of the registration? Filing of the Declaration of Actual Use. If pending application, you
th
must do it within 3 years from the time of filing. If there is already a certificate issued, you have to do it within 1 year from the 5
anniversary. (refer to the Declaration of Actual Use form).

After the expiration of the 10 year period, you have the option to renew. How many renewals are allowed? No limit as long as used in
commerce.
 40

What are the rights conferred to the registered owner of the mark? You have the right to prevent un authorized use.

Rights conferred with registration

SEC. 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 owners 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.

There shall be no infringement of trademarks or tradenames of imported or sold patented 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, under Section 155 of this Code.

On the second paragraph of Sec 147: the exemption only applies to the act of imporation and sale, and it is only applicable to drugs
and medicines. Because it happens that there are local distributors, and they are the ones using the mark in commerce here in the
Philippines.

Assignment and Transfer of Application and Registration

SEC. 149. Assignment and Transfer of Application and Registration. - 149.1. An application for registration of a mark, or its registration,
may be assigned or transferred with or without the transfer of the business using the mark.

149.2. Such assignment or transfer shall, however, be null and void if it is liable to mislead the public, particularly as regards the nature,
source, manufacturing process, characteristics, or suitability for their purpose, of the goods or services to which the mark is applied.

149.3. The assignment of the application for registration of a mark, or of its registration, shall be in writing and require the signatures of
the contracting parties. Transfers by mergers or other forms of succession may be made by any document supporting such transfer.

149.4. Assignments and transfers of registration of marks shall be recorded at the Office on payment of the prescribed fee; assignment
and transfers of applications for registration shall, on payment of the same fee, be provisionally recorded, and the mark, when
registered, shall be in the name of the assignee or transferee.

149.5. Assignments and transfers shall have no effect against third parties until they are recorded at the Office.

Since it is akin to personal property, it may be subject to assignment, transfer of application, and registration. For an assignment or
transfer to be valid, it must recorded in the Intellectual Property Office.

Once you are issued a certificate of registration, is your right to the mark guaranteed? No, because you have to maintain your mark.
You require with the post registration requirements, otherwise known as maintenance of a mark. There is still no guarantee because it
is still subject to cancellation even if you have ungone the proceedings and observed the procedure.

Cancellation of Registration
SEC. 151. Cancellation. - 151.1. A petition to cancel a registration of a mark under this Act may be filed with the Bureau of Legal Affairs
by any person who believes that he is or will be damaged by the registration of a mark under this Act as follows:
(a) Within five (5) years from the date of the registration of the mark under this Act.
(b) At any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is
registered, or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions of this Act, or if the
registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on
or in connection with which the mark is used. If the registered mark becomes the generic name for less than all of the goods or services
for which it is registered, a petition to cancel the registration for only those goods or services may be filed. A registered mark shall not
be deemed to be the generic name of goods or services solely because such mark is also used as a name of or to identify a unique
product or service. The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the
test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it
has been used. (n)
(c) At any time, if the registered owner of the mark without legitimate reason fails to use the mark within the Philippines, or to cause it to
be used in the Philippines by virtue of a license during an uninterrupted period of three (3) years or longer.

Where will the cancellation be filed? Bureau of Legal Affairs

 41
Who can file? Any person who believes that he will be damaged by the registration.
Grounds? Any ground. But you have a prescriptive period in par. a, 5 years from the date of registration. But in par b, you can file
anytime but only with respect to specific grounds: 1. If the mark becomes generic for the goods or services 2. Abandonment etc..
If you have included several classifications, a cancellation can be allowed to a certain classes of goods, that is a case of partial
cancellation. With respect to the other goods that were not included in the petition, it may be used by the registrant.

Sec 151.2, applied in the case of Shangri-la v CA and Conrad and Co v CA,

151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and adjudicate
any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said
mark may be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the proper court or agency
shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the
other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that
must be resolved before an action to enforce the rights to same registered mark may be decided.

SEC. 10. The Bureau of Legal Affairs. - The Bureau of Legal Affairs shall have the following functions:
10.1. Hear and decide opposition to the application for registration of marks; cancellation of trademarks; subject to the provisions of
Section 64, cancellation of patents, utility models, and industrial designs; and petitions for compulsory licensing of patents;

Does the BLA have the exclusive jurisdiction for cancellation? With respect to registered mark, and the registered mark owner files a
case of infringement against a person who uses without authority- ordinary courts (RTC). What if the defendant places the issue of
fraud, raises the issue of ownership of the mark. Can the court not have jurisdiction to determine whether the registration is null and
void, thereby cancelling the registration? Or do they have to refer it to the Bureau of Legal Affairs? It is vital because you are now
claiming infringement of a mark but if the main defense is that it infringement can no longer be filed because registration was null and
void. That is why we have sec 151.2.

151.2. Notwithstanding the foregoing provisions,

(provisions pertaining to cancellation)

the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered
mark
(meaning there is an infringement case because it is an act of enforcement)

shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act.

The law therefore vests jurisdiction on regular courts pertaining to issues of cancellation of the mark especially when the issue of
validity of the registration is raised as a defense in the proceeding to enforce the right to a registered mark. Therefore, the courts can
acquire jurisdiction. The only problem is when there is a pending action for cancellation before the filing of the infringement case. What
if the filing of the infringement case in the regular court is just a reaction to the petition for cancellation in the BLA. There is still a
pending petition for cancellation at the BLA. As a reaction to the filing the petition for cancellation, the registered mark owner files an
infringement case against the petitioner, assuming that he is using it also in commerce. Can he file it, while the petition in the BLA still
pending? Yes.
What if it were the other way around. The infringement case was filed first of the petition to cancel.

The filing of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from
assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to
cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be resolved before an action to
enforce the rights to same registered mark may be decided.

If the infringement suit was filed ahead, it acquires the exclusive jurisdiction to decide on this particular issue. So the subsequent filing
for the petition for cancellation should be denied by the BLA. What it the petition was filed ahead of the infringement suit? No prejudicial
question. Therefore, proceedings with the regular courts should proceed notwithstanding the tendency of cancellation proceedings.

Different ways that the person can commit Infringement

SEC. 155. Remedies; Infringement. - Any person who shall, without the consent of the owner of the registered mark:
 42
155.1. 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, 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 in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or

The case of Pro Line Sports Center v. CA & Universal Athletics, G.R. No. 118192, October 23, 1997, gives an attempt to describe the
coverage of other preparatory steps. The Supreme Court said that the act of preparatory steps cover those that are necessary for the
sale that is why it was considered in establishing a probable cause to issue a search warrant and the seizure of the goods i.e.,
basketballs were seized in the warehouse. Was it necessary for the person to carry out the sale? The court said No, it is sufficient that it
covers other preparatory steps.

Types of Infringement
1. Acts of using a mark identical, similar, confusingly similar, counterfeit copy or even a colorable imitation would be enough. But always
remember that the act of infringement is always against a mark that is previously registered.

What if the mark is not registered, can you sue the person for infringement? No.
But is there another remedy? Yes, file a case for unfair competition.

2. Acts of reproducing, counterfeiting, copying, or colorably imitating 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 (Section 155.2)

Can you only sue for civil action? You can also institute a criminal case based on section 170.

SEC. 170. Penalties. - Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from
two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred thousand pesos (P200,000),
shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 (talks about
unfair competition) and Subsection 169.1. (Arts. 188 and 189, Revised Penal Code): 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)

What criminal acts are punishable?

1. Trademark Infringement
2. Unfair completion
3. False designation of origin or false description or representation

1. Trademark Infringement
Elements of trademark infringement:
(a) A trademark actually used in commerce in the Philippines and registered in the principal register of the Philippine Patent
Office
(b) It is used by another person in connection with the sale, offering for sale, or advertising of any goods, business or services
or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the
source or origin of such goods or services, or identity of such business; or such trademark is reproduced, counterfeited, copied
or colorably imitated by another person and such reproduction, counterfeit, copy or colorable imitation is applied to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods,
business or services as to likely cause confusion or mistake or to deceive purchasers
(c) The trademark is used for identical or similar goods; and
(d) Such act is done without the consent of the trademark registrant or assignee.

Elements of infringement under R.A. No. 8293:

(1) The trademark being infringed is registered in the Intellectual Property Office; however, in infringement of trade name, the
same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods,
business or services; or the infringing mark or trade name is applied to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used upon or in connection with such goods, business or services;
(4) The use or application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive purchasers
or others as to the goods or services themselves or as to the source or origin of such goods or services or the identity of such
business; and
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.

All elements must be present. Always remember the phrase likely to cause confusion.
 43

In what instance is likelihood to cause confusion presumed? In case of the use of an identical sign for identical goods or services, a
likelihood of confusion shall be presume (Section 147).

When do we say it applies to identical goods and services? It is not enough that they are of the same class, they must be competing
goods or services. Because one class covers different goods so it is no enough that they are of the same class.

Remedies for Infringment

1. Action for damages

SEC. 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.

Relate Section 156 with section 158:

SEC. 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.

Registration serves as a constructive notice to any person. No need for personal notice. If you display on your label or your
advertisement that the mark you are using is the registered mark, it serves as a constructive notice to any person who knows of that
mark and later on use a mark that is confusingly similar or tend to cause mistake to the buyers then it is a prerequisite. It is a
requirement for the claim for damages.

2. What is the other remedy available to a plaintiff in an infringement suit aside from damages? He can also move that the court
impound sales invoices.

Another important matter is that there is no need to establish intent to deceive as long as the mark can slightly confuse the public, it is
enough to maintain a suite for infringement. However, if you can still establish an intent to deceive and the likelihood of the sign of the
perpetrator to deceive the public then it is the right of the plaintiff to double his claim for damages as provided in Section 156.3.

SEC 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)

3. Another remedy upon proper showing, the court can issue injunction against infringing materials.

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

Four Limitations to Actions for Infringement

The owner of a registered mark can maintain a suit against persons using his mark or identical or confusingly similar mark if it would
cause confusion or there is likelihood to cause confusion. But the following cases will not entitle him to file a case:

1. Prior user in good faith The use of that person must be prior the filing date because even if he is in good faith but his use is
after the filing date, the provision will not applicable.

SEC 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.

For purpose of his business or enterprise, it will not be considered as an act of infringement. So, as a prior user in good faith, is he
allowed to transfer his interests or rights over his mark to another? Yes, the law allows as long as he also transfers his enterprise or
business.

2. Innocent Infringer a printer who does not know that the mark is an infringing mark is not liable. He is only liable for an action for
injunction against future printing.

SEC 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.

3. Persons engagement in the trade of advertisement, newspaper, magazine, or other similar periodical remedy is only with
respect to injunction against future presentation of such advertising in future issues. No liability to recall such issues prior to injunction.
 44
SEC 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. The limitations of this subparagraph shall apply only to innocent infringers: Provided,
That such injunctive relief shall not be available to the owner of the right infringed with respect to an issue of a newspaper, magazine, or
other similar periodical or an electronic communication containing infringing matter where restraining the dissemination of such
infringing matter in any particular issue of such periodical or in an electronic communication would delay the delivery of such issue or
transmission of such electronic communication is customarily conducted in accordance with the sound business practice, and not due
to any method or device adopted to evade this section or to prevent or delay the issuance of an injunction or restraining order with
respect to such infringing matter;

4. Imported drugs and medicines when drugs and medicines are imported, the local distributor who is the registered mark owner
has no right to file a case for infringement as it is sanctioned by the government under Section 72.1.

SEC 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

Can foreign corporations maintain action here in the Philippines? Yes, under Section 3 especially when it talks about well-known marks.
The property rights of an owner of a well-known mark does not recognize any boundary.

SEC. 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement Action. - Any foreign national or
juridical person who meets the requirements of Section 3 of this Act and does not engage in business in the Philippines may
bring a civil or administrative action hereunder for opposition, cancellation, infringement, unfair competition, or false designation
of origin and false description, whether or not it is licensed to do business in the Philippines under existing laws. (Sec. 21-A, R.A.
No. 166a)

General Rule: the principal characteristic of trademark right is that it is limited to a given territory, such as in the Philippines, the
registration is only within the Philippine territory. So if an owner of a trademark is registered abroad, he cannot enforce his foreign
registration in the Philippines. He has to apply and register here.

Exception: With respect to well-known marks.

This right to sue had been recognized in several cases. The most notable one is the case of La Chemise Lacoste v. Fernandez where
the Supreme Court held that a foreign corporation which has never done any business in the Philippines and which is unlicensed and
unregistered to do business here, but is widely and favorably known in the Philippines through the use therein of its products bearing its
corporate and tradename, has a legal right to maintain an action in the Philippines to restrain the residents and inhabitants thereof from
organizing a corporation therein bearing the same name as the foreign corporation, when it appears that they have personal knowledge
of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is to deal and
trade in the same goods as those of the foreign corporation.

Prejudicial Question

SEC 151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and
adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration
of said mark may be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the proper court or
agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark.
On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial
question that must be resolved before an action to enforce the rights to same registered mark may be decide.

If there is a pending cancellation proceedings in the Bureau of Legal Affairs and thereafter an infringement suit is filed by the registered
owner, can the defendant rightfully ask for the suspension of proceedings in civil court owing to the pendency of the proceedings with
the BLA? No, because it is not considered as a prejudicial question.

What if it is the other way around, the infringement suit is filed prior to the cancellation proceedings with the BLA? The BLA should not
make no cognizance because it has no jurisdiction anymore.

What if the BLA will accept the petition? The owner of the registered mark should move for dismissal for lack of jurisdiction.

Does the registered owner have the right to sue in the first place? No, because the petition is not cognizable with the Bureau of Legal
Affairs. This is clear in Section 151.2 states that the filing of a suit to enforce the registered mark with the proper court or agency shall
exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark.

What is the basis of this procedure? Can be traced in Section 161.

 45

SEC. 161. Authority to Determine Right to Registration. - In any action involving a registered mark, the court may determine the right to
registration, order the cancellation of a registration, in whole or in part, and otherwise rectify the register with respect to the registration
of any party to the action in the exercise of this. Judgment and orders shall be certified by the court to the Director, who shall make
appropriate entry upon the records of the Bureau, and shall be controlled thereby. (Sec. 25, R.A. No. 166a)

What is the applicant, in the registration process or procedure, has procured a mark by false or fraudulent declaration or
representation?

SEC. 162. Action for False or Fraudulent Declaration. - Any person who shall procure registration in the Office of a mark by a false or
fraudulent declaration or representation, whether oral or in writing, or by any false means, shall be liable in a civil action by any person
injured thereby for any damages sustained in consequence thereof. (Sec. 26, R.A.
No. 166)

Can he be liable criminally? No, because it is not covered in Section 170.

2. Unfair Competition
The plaintiff to a suit in unfair competition is 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 mark or trade name is employed (Section 29, Chapter VI of Republic
Act 166).

What gives rise to his right to file a case for unfair competition, is it through registration? No, because states whether or not a
mark or trade name is employed.

So what is the basis for his cause of action for unfair competition? Prior use. But generally speaking is when he has acquired a
property right over a mark whether registered or not.

How did he acquire such property right? When he has been successful in building a good business reputation. If he has been in
business for a considerable number of years so as to establish a goodwill. In most cases, plaintiffs in unfair competition claim a property
right they have already built a good business reputation.

How is an act of unfair competition committed?

Section 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.

The key word is when he passes off or presents the goods that he manufacture as that of another. Are we talking about marks here?
This is not limited to marks. Because the law states any other means contrary to good faith as long as his purpose is to pass off his
good as of that of another, usually a more popular brand or product.

Is there any specific act that is enumerated? Yes there are, but it does serve to limit the scope. The scope is very broad such that
you can conclude that infringement may be an act of unfair competition. However, an act of unfair competition is not necessary an act
of infringement. Because unfair competition is very broad, it covers an act of infringement. An act of infringement is only one mode of
committing unfair competition but it is imperative to distinguish one from the other.

Three basic distinctions between infringement of trademark and unfair competition:

(1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the passing off of one's goods as
those of another.
(2) In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a prerequisite to the action, whereas in unfair competition
registration is not necessary.
In determining whether two trademarks are confusingly similar, the two marks in their entirety as they appear in the respective labels
must be considered in relation to the goods to which they are attached; the discerning eye of the observer must focus not only on the
predorninant words but also on the other features appearing on both labels (Del Monte v. CA, Sunshine)
Is one liable for unfair competition also considered liable for infringement? Not necessarily. Because, in unfair competition, it involves a
mark whether registered or not. In infringement, it has to be registered.

The law enumerates some form of unfair competition but there is a caveat that it does not limit the scope

Section 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
 46
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;

(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.

This is why, in advertisements here in the Philippines, it is unlawful to discredit the products or goods of another unlike in the United
States. Here, it is considered unfair competition. It is a prohibited act, even a criminal act.

3. False Designation
SEC. 169. False Designations of Origin; False Description or Representation. - 169.1. Any person who, on or in connection with any
goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof,
or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which:

(a) Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with
another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person;
or

(b) In commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or
another persons goods, services, or commercial activities, shall be liable to a civil action for damages and injunction provided in
Sections 156 and 157 of this Act by any person who believes that he or she is or likely to be damaged by such act.

As previously discussed, it is illegal to use marks that would cause misrepresentation. Example: when the use the mark lapis for a
pen. This is deceptive and can cause confusion.

This applies to false designation of origin, such as claiming your goods to be coming from a specific source because its popularity. For
instance, the best coffee in the Philippines can be found in Batanggas. So you represent your coffee to be coming from that part of
country when, in fact, it is not. That is deceptive, false designation of a mark. This covers any false description or representation. This
is a criminal offense included in Section 170.

But when we talk about commercial advertisements or promotions, as mentioned in paragraph b of Section 169, misrepresenting the
nature, characteristics, qualities, or geographic origin of the goods or services is also considered as contrary to law.

Law on Patents Utility Models and Industrial Designs

Between copyright and trademark, patent is the most technical one. The registration process in patents is very stringent compared to
copyright wherein no registration is need, and trademark where there is registration but not as stringent.

When we talk about patents, we usually talk about inventions. But technically, it is not just about inventions because there are actually
three types involved.

There are three types of patents:

1. Inventions
2. Utility models
3. Industrial designs

You have to specify and indicate whether it is a patent for invention, for utility model or industrial design.

The term patent is understood in two ways:

1. Right - refers to the right to the property, right to exercise attributes of ownership.
2. Title This is usually referred as letters patent, this your proof for your right of redemption.

So how do we understand the word patent? It is considered as a privilege given to a person.

As a rule, all ideas and concepts belongs to the public domain. But in order to promote the growth of knowledge and inspire persons,
specifically inventors in this case, the State must provide an effective patent system. It must provide an atmosphere where inventors will
be inspired to share their inventions and creations. So how will the State inspire them to share their ideas? To afford them protection, to
 47
give them exclusive rights and to give them the right to monopolize BUT only for a given period, which is a good thing for the inventor
and the general public.

What is the term of protection of a patent? Twenty (20) years from the filing date. The term is absolute, there is no renewal allowed.
After the period, the invention becomes a part of public domain. But similar to the law on trademark, patents also follow the first to file
rule so the filing date is also very relevant when it comes to protecting a patent.

Definition
Section. 21. Patentable Inventions. - Any technical solution of a problem in any field of human activity which is new, involves an
inventive step and is industrially applicable shall be patentable. It may be, or may relate to, a product, or process, or an improvement of
any of the foregoing. (Sec. 7, R.A. No.165a)

Three Elements:
1. New or novel
2. Inventive step
3. Industrially applicable
4. Technical in character

Statutory classes:
1. Product
2. Process
3. Improvement of a product or process

Relate this with:

Rule 201. Statutory Classes of Patentable Inventions. A patentable invention may be or may relate to:
(a) A product, such as a machine, a device, an article of manufacture, a composition of matter, a microorganism;
(b) A process, such as a method of use, a method of manufacturing, a non-biological process, a microbiological process;
(c) Computer-related inventions; and
(d) An improvement of any of the foregoing.
(Source: Revised Implement rules and Regulations for Patents, Utility Models and Industrial Designs)

Patents only deal with matters which are technical in character. There must be a problem and the invention is a solution to a problem.
Necessity is the mother of all inventions. So if it only provides a theory and not really an actual solution, then it is not technical.

Does it cover any type of problem? No, the law is broad because Section 21 states, in any field of human activity. So one can patent
an invention that is useful to one person but not useful to the general public. For example, Michael Jackson is a holder of a patent of a
particular shoe that can defy his center of gravity as seen in one of his dance moves in the song smooth criminal. It is not useful for
everyone, unless one is a dancer.

First Element
1. New or novel unlike in copyright, novelty is not a requirement because it only requires originality even if the work is not new as
long as it original and came from the mind of the creator it is enough. But in patent, you must invent something new to the whole world.
This includes improvement of the product or process.

Take note that SEC 23 of the law states that An invention shall not be considered new if it forms part of a prior art. So it is very
practical before developing the product or even before starting with your experimentation, you must see to it that the item or product
you are developing is new.

So how will you be assured that your product is new not only in the Philippines but to the whole world? It is important to what
forms a prior art.

SEC 24. Prior Art. - Prior art shall consist of:

24.1. Everything which has been made available to the public anywhere in the world, before the filing date or the priority date of the
application claiming the invention; and

Note that the coverage only contemplates anything that is made available to the public. Meaning, the public can freely access the
information anywhere in the world. When? Before the filing date or the priority date of the application of a particular invention. So, an
inventor must conduct a research.

24.2. The whole contents of an application for a patent, utility model, or industrial design registration, published in accordance with this
Act, filed or effective in the Philippines, with a filing or priority date that is earlier than the filing or priority date of the application:
Provided, That the application which has validly claimed the filing date of an earlier application under Section 31 of this Act, shall be
 48
prior art with effect as of the filing date of such earlier application: Provided further, That the applicant or the inventor identified in both
applications are not one and the same. (Sec. 9, R.A. No. 165a)

So if there is a previously filed application involving the same invention, it is covered under the term prior art already even if it is not
yet granted. Because patent also follows the first to file rule, whoever has the earliest filing or priority date will be given the right to the
patent.

What is the most efficient way of conducting a search for prior art? Conduct a prior art search. The IPO website has a database. But
that is not enough and not very reliable, you must go to prior art search providers. The USC has one which aid in researching prior art
for a cost. This is usually done through services of a registered patent agent, not necessarily a patent lawyer.

So what forms part of the prior art? Everything or any information made available to the public. If it is still private, it will not form a prior
art. A thesis submitted by a student is still considered private unless it is catalogued in a library wherein the public can gain access.

What about a product that is being used in the market already, does it form a prior art already? Public information is one thing, public
use is another. When it comes to public use, what is relevant is that the use is only limited in the Philippines. If it is used elsewhere,
there must be an information to supplement it. If not, then public use will not be sufficient to form part of prior art.

What are the examples of materials available to the public? Textbook, newspapers, publications, even lectures, even marketing
brochures, everything whether oral or written, is considered prior art material.

So what type of information is needed for one to be considered as prior art? It must contain an enabling disclosure. The
information must be sufficient enough for a person skilled in the art to be able to duplicate it. Take note that it is not just any person or
the general public but to a person who is skilled in that specific art to be able to replicate the product. The information must be enough
that it is no longer required of him to conduct an experimentation, it is enough that he follow the details and he will be able to duplicate
the product process. If it is insufficient then it does not qualify as an information forming part of prior art. Products presented in the
movies are not enabling disclosures because they do not contain enough information to make the art.

What about use in the Philippines, as previously mentioned, how do we consider it forming part of prior art? When there is
public use and any person can gain access to the relevant information relating to such use.

What about products that are used in certain businesses or companies only in the manufacture of their business? The gauge
there is whether or not the person, employee or person operating that machine or product is bound by an agreement pertaining to
confidentiality? If not, then it becomes public use.

What about products used in the government especially in the military? They are bound by confidentiality or secrecy so they are
not considered as public use. So as long as the public can gain access to relevant information then that type of use can be considered
as public or not.

Non-Prejudicial Disclosure
SEC 25. Non-Prejudicial Disclosure. - 25.1. The disclosure of information contained in the application during the twelve (12) months
preceding the filing date or the priority date of the application shall not prejudice the applicant on the ground of lack of novelty if such
disclosure was made by:
(a) The inventor;
(b) A patent office and the information was contained (a) in another application filed by the inventor and should not have been disclosed
by the office, or (b) in an application filed without the knowledge or consent of the inventor by a third party which obtained the
information directly or indirectly from the inventor; or
(c) A third party which obtained the information directly or indirectly from the inventor.

25.2. For the purposes of Subsection 25.1, "inventor" also means any person who, at the filing date of application, had the right to the
patent.

If the inventor demonstrates his invention, will it already form part of prior art? No, because disclosure is considered non-
prejudicial. It will not prejudice his novelty. The law states that if the disclosure is made within the twelve (12) months preceding the
filing date or the priority date of the application, it will not prejudice the applicant on the ground of lack of novelty. So if one joins an
exhibit, he must apply for registration within 12 months.

Who can make that non-prejudicial disclosure?

1. Inventor
2. Patent office
3. Third party which obtained the information directly or indirectly from the inventor

Right of Priority
 49

SEC. 31. Right of Priority. - An application for patent filed by any person who has previously applied for the same invention in another
country which by treaty, convention, or law affords similar privileges to Filipino citizens, shall be considered as filed as of the date of
filing the foreign application: Provided, That: (a) the local application expressly claims priority; (b) it is filed within twelve (12) months
from the date the earliest foreign application was filed; and (c) a certified copy of the foreign application together with an English
translation is filed within six (6) months from the date of filing in the Philippines. (Sec. 15, R.A. No. 165a)

This is the same concept with the right of priority in trademark registration. But he must comly with some requirements:
1. Local application expressly claims priority
2. File within twelve (12) months from the date the earliest foreign application was filed
3. Certified copy of the foreign application together with an English translation is filed within six (6) months from the date of filing in the
Philippines.

Second Element
2. Inventive step otherwise known as the non-obviousness test. The invention must not be obvious to the person who is skilled in
the art.

SEC. 26. Inventive Step. - 26.1 An invention involves an inventive step if, having regard to prior art, it is not obvious to a person skilled
in the art at the time of the filing date or priority date of the application claiming the invention.

26.2 In the case of drugs and medicines, there is no inventive step if the invention results from the mere discovery of a new form or new
property of a known substance which does not result in the enhancement of the known efficacy of that substance, or the mere
discovery of any new property or new use for a known substance, or the mere use of a known process unless such known process
results in a new product that employs at least one new reactant.

Who is the person skilled in the art? A technical person, not necessarily highly skilled, but a person who is considered an ordinary
practitioner aware of what is common or general knowledge of the art in his relevant field. He is presumed to have common general
knowledge of all references that are sufficiently related of all arts reasonably pertinent to the particular problems with which the inventor
was involved. He has kept himself updated with the existing trends of his field.

What role does he claim in the second element?

Because if it is obvious to him, it is not an invention. If not obvious to him, then it is an invention and compliant with the non-
obviousness test. He must be in awe of the invention and consider the invention as something that is innovative to him.

Graham v. John Deere Co of Kansas City

383 U.S. 519 (1966)

FACTS: Graham (Plaintiff) filed suit against Defendant claiming patent infringement on a device which consisted of old mechanical
elements that absorbed shock from plow shanks as they plowed through rocky soil. In a prior case, The Fifth Circuit held that a patent
was valid, ruling that a combination was eligible for patent when it produced an "old result in a cheaper and otherwise more
advantageous way." The Eighth Circuit said the patent was invalid in the present case as there was no new result or combination.
Plaintiff petitioned for certiorari, and the Supreme Court granted the request in order to resolve the conflict.

ISSUE: Is a case-by-case analysis required of the scope and content of the prior art, the differences between the prior art and the
claims at issue, as well as the level of ordinary skill in the applicable art to determine the non-obviousness of a claimed invention as to
prior art?

RULING: Yes. A case-by-case analysis of the scope and content of the prior art, the differences between the prior art and the claims at
issue, as well as the level of ordinary skill in the applicable art are required to determine the non-obviousness of a claimed invention as
to a prior art.

The statutory non-obviousness requirement was added by the Patent Act of 1952. However, this was just a codification of the judicial
precedent set forth in Hotchkiss v. Greenwood, 11 How. 248 (1851). Although the term "non-obviousness" is used instead of
"invention," in SEC. 103 of the Act, the general level of improvement and originality needed in order to sustain a patent did not
change. In order to determine whether an invention is eligible for patent or is only an obvious improvement to a prior art requires a
case-by-case analysis of the criteria listed above. Commercial success, long-felt but unsolved needs, and the failure of others are
secondary considerations that may also be relevant in considering the obviousness of an invention. Regarding the patent at issue in
these cases, the differences between the patented invention and prior art would have been obvious to one reasonably skilled in the
art. The patent is therefore invalid. Affirmed.

Purpose of Patent
 50
The primary purpose of the patent system is not the reward of the individual but the advancement of the arts and sciences. The function
of a patent is to add to the sum of useful knowledge and one of the purposes of the patent system is to encourage dissemination of
information concerning discoveries and inventions.

Manzano v CA, Madolaria, & New United Foundry

G.R. No. 113388. September 5, 1997

FACTS: Angelita Manzano filed PPO an action for the cancellation of Letters Patent for a gas burner registered in the name of
respondent Melecia Madolaria who subsequently assigned the letters patent to New United Foundry and Manufacturing Corporation.

Petitioner alleged that (a) the utility model covered by the letters patent, in this case, an LPG gas burner, was not inventive, new or
useful; (b) the specification of the letters patent did not comply with the requirements of Sec. 14, RA No. 165, as amended; (c)
respondent Melecia Madolaria was not the original, true and actual inventor nor did she derive her rights from the original, true and
actual inventor of the utility model covered by the letters patent; and, (d) the letters patent was secured by means of fraud or
misrepresentation.

Petitioner presented the following documents which she correspondingly marked as exhibits: (a) affidavit of petitioner alleging the
existence of prior art (b) a brochure distributed by Manila Gas Corporation disclosing a pictorial representation of Ransome Burner
made by Ransome Torch and Burner Company, USA, and, (c) a brochure distributed by Esso Gasul or Esso Standard Eastern, Inc., of
the Philippines showing a picture of another similar burner with top elevation view and another perspective view of the same burner.

Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a helper in the UNITED FOUNDRY where
respondent Melecia Madolaria used to b affiliated with from 1965 to 1970; that Ong helped in the casting of an LPG burner which was
the same utility model of a burner and that after her husbands separation from the shop she organized Besco Metal Manufacturing for
the casting of LPG burners one of which had the configuration, form and component parts similar to those being manufactured by
UNITED FOUNDRY. Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua and Fidel Francisco.

Private respondent, on the other hand, presented only one witness, Rolando Madolaria, who testified, among others, that he was the
General Supervisor of the UNITED FOUNDRY.

Director of Patents Cesar C. Sandiego denied the petition for cancellation and holding that the evidence of petitioner was not able to
establish convincingly that the patented utility model of private respondent was anticipated.

Not one of the various pictorial representations of business clearly and convincingly showed that the devices presented by petitioner
was identical or substantially identical with the utility model of the respondent. The decision also stated that even assuming that the
brochures depicted clearly each and every element of the patented gas burner device so that the prior art and patented device became
identical although in truth they were not, they could not serve as anticipatory bars for the reason that they were undated. The dates
when they were distributed to the public were not indicated and, therefore, were useless prior art references. The records and evidence
also do not support the petitioners contention that Letters Patent No. UM-4609 was obtained by means of fraud and/or
misrepresentation. No evidence whatsoever was presented by petitioner to show that the then applicant Melecia Madolaria withheld
with intent to deceive material facts which, if disclosed, would have resulted in the refusal by the Philippine Patent Office to issue the
Letters Patent under inquiry

Petitioner elevated the decision of the Director of Patents to the Court of Appeals which affirmed the decision of the Director of Patents.
Hence, this petition for review on certiorari.

ISSUE: Whether the dismissal is proper where the patent applied for has no substantial difference between the model to be patented
and those sold by petitioner?

RULING: The element of novelty is an essential requisite of the patentability of an invention or discovery. If a device or process has
been known or used by others prior to its invention or discovery by the applicant, an application for a patent therefor should be denied;
and if the application has been granted, the court, in a judicial proceeding in which the validity of the patent is drawn in question, will
hold it void and ineffective. It has been repeatedly held that an invention must possess the essential elements of novelty, originality and
precedence, and for the patentee to be entitled to the protection the invention must be new to the world.

However, the validity of the patent issued by the Philippine Patent Office in favor of private respondent and the question over the
inventiveness, novelty and usefulness of the improved model of the LPG burner are matters which are better determined by the Patent
Office. The technical staff of the Philippine Patent Office composed of experts in their field has by the issuance of the patent in question
accepted private respondents model of gas burner as a discovery. There is a presumption that the Office has correctly determined the
patentability of the model and such action must not be interfered with in the absence of competent evidence to the contrary.

The rule is settled that the findings of fact of the Director of Patents, especially when affirmed by the Court of Appeals, are conclusive
on this Court when supported by substantial evidence. Petitioner has failed to show compelling grounds for a reversal of the findings
and conclusions of the Patent Office and the Court of Appeals.
 51
Maguan v CA & Luchan
G.R. L-45101 November 28, 1986

FACTS: Petitioner is doing business under the firm name and style of SWAN MANUFACTURING" while private respondent is likewise
doing business under the firm name and style of "SUSANA LUCHAN POWDER PUFF MANUFACTURING.

Holder petitioner informed private respondent that the powder puffs the latter is manufacturing and selling to various enterprises
particularly those in the cosmetics industry, resemble Identical or substantially Identical powder puffs of which the former is a patent
holder under Registration Certification Nos. Extension UM-109, Extension UM-110 and Utility Model No. 1184; petitioner explained
such production and sale constitute infringement of said patents and therefore its immediate discontinuance is demanded, otherwise it
will be compelled to take judicial action.

Private respondent replied stating that her products are different and countered that petitioner's patents are void because the utility
models applied for were not new and patentable and the person to whom the patents were issued was not the true and actual author
nor were her rights derived from such author.

Petitioner filed a complaint for damages with injunction and preliminary injunction against private respondent with the then Court of First
Instance of Rizal

The trial court issued an Order granting the preliminary injunction prayed for by petitioner. Consequently, the corresponding writ was
subsequently issued.

In challenging these Orders private respondent filed a petition for certiorari with the respondent court but was denied. Hence this
petition.

ISSUES:
(1) Whether or not in an action for infringement the Court a quo had jurisdiction to determine the invalidity of the patents at issue which
invalidity was still pending consideration in the patent office?

(2) Whether or not the Court a quo committed grave abuse of discretion in the issuance of a writ of preliminary injunction?
(3) Whether or not certiorari is the proper remedy?

RULING:
1) The first issue has been laid to rest in a number of cases where the Court ruled that "When a patent is sought to be enforced, the
questions of invention, novelty or prior use, and each of them, are open to judicial examination."

Under the present Patent Law, there is even less reason to doubt that the trial court has jurisdiction to declare the patents in question
invalid. A patentee shall have the exclusive right to make, use and sell the patented article or product and the making, using, or selling
by any person without the authorization of the patentee constitutes infringement of the patent (Sec. 37, R.A. 165).

Any patentee whose rights have been infringed upon may bring an action before the proper CFI now (RTC) and to secure an injunction
for the protection of his rights.

2) The burden of proof to substantiate a charge of infringement is with the plaintiff. But where the plaintiff introduces the patent in
evidence, and the same is in due form, there is created a prima facie presumption of its correctness and validity. The decision of the
Commissioner (now Director) of Patent in granting the patent is presumed to be correct. The burden of going forward with the evidence
(burden of evidence) then shifts to the defendant to overcome by competent evidence this legal presumption.

Under American Law from which our Patent Law was derived (Vargas v. F.M. Yaptico & Co.) it is generally held that in patent cases a
preliminary injunction will not issue for patent infringement unless the validity of the patent is clear and beyond question. The issuance
of letters patent, standing alone, is not sufficient to support such drastic relief. In cases of infringement of patent no preliminary
injunction will be granted unless the patent is valid and infringed beyond question and the record conclusively proves the defense is
sham.

In the same manner, under our jurisprudence, as a general rule because of the injurious consequences a writ of injunction may bring,
the right to the relief demanded must be clear and unmistakable and the dissolution of the writ is proper where applicant has doubtful
title to the disputed property.

The question then in the instant case is whether or not the evidence introduced by private respondent herein is sufficient to overcome
said presumption.

After a careful review of the evidence consisting of 64 exhibits and oral testimonies of five witnesses presented by private respondents
before the Court of First Instance before the Order of preliminary injunction was issued as well as those presented by the petitioner,
respondent Court of Appeals was satisfied that there is a prima facie showing of a fair question of invalidity of petitioner's patents on the
ground of lack of novelty.
 52
As pointed out by said appellate court said evidence appeared not to have been considered at all by the court a quo for alleged lack of
jurisdiction, on the mistaken notion that such question in within the exclusive jurisdiction of the patent office.
It has been repeatedly held that an invention must possess the essential elements of novelty, originality and precedence and for the
patentee to be entitled to protection, the invention must be new to the world.

Accordingly, a single instance of public use of the invention by a patentee for more than two years (now for more than one year only
under Sec. 9 of the Patent Law) before the date of his application for his patent, will be fatal to, the validity of the patent when issued.

It will be noted that the validity of petitioner's patents is in question for want of novelty. Private respondent contends that powder puffs
Identical in appearance with that covered by petitioner's patents existed and were publicly known and used as early as 1963 long
before petitioner was issued the patents in question.

As correctly observed by respondent Court of Appeals, "since sufficient proofs have been introduced in evidence showing a fair
question of the invalidity of the patents issued for such models, it is but right that the evidence be looked into, evaluated and determined
on the merits so that the matter of whether the patents issued were in fact valid or not may be resolved." (Rollo, pp. 286-287).

All these notwithstanding, the trial court nonetheless issued the writ of preliminary injunction which under the circumstances should be
denied. For failure to determine first the validity of the patents before aforesaid issuance of the writ, the trial court failed to satisfy the
two requisites necessary if an injunction is to issue, namely: the existence of the right to be protected and the violation of said right.
(Buayan Cattle Co., Inc. v. Quintillan, 128 SCRA 276).

Under the above established principles, it appears obvious that the trial court committed a grave abuse of discretion which makes
certiorari the appropriate remedy.

As found by respondent Court of Appeals, the injunctive order of the trial court is of so general a tenor that petitioner may be totally
barred from the sale of any kind of powder puff. Under the circumstances, respondent appellate court is of the view that ordinary appeal
is obviously inadequate.

Resolutions of the Court of Appeals are hereby AFFIRMED.

Creser Precision Systems Inc. v CA & Floro International Co.

G.R. NO. 118708, February 2, 1998

FACTS: Private respondent is a domestic corporation engaged in the manufacture, production, distribution and sale of military
armaments, munitions, airmunitions and other similar materials. In 1990, respondent was granted by the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) a Letter of patent for its aerial fuze on January 23, 1990.
Sometime in 1993, respondent discovered that the petitioner submitted samples of its patented aerial fuze to the AFP for testing
claiming to be his own. To protect its right, respondent sent letter of warning to petitioner on a possible court action should it proceed its
testing by the AFP.
In response, the petitioner filed a complaint for injunction and damages arising from alleged infringement before the RTC asserting that
it is the true and actual inventor of the aerial fuze which it developed on 1981 under the Self Reliance Defense Posture Program of the
AFP. It has been supplying the military of the aerial fuze since then and that the fuzeof the respondent is similar as that of the petitioner.
Petitioner prayed for restraining order and injunction from marketing, manufacturing and profiting from the said invention by the
respondent.
Private respondent alleged that petitioner has no cause of action to file a complaint of infringement against it since it has no patent for
the aerial fuze which it claims to have invented; that petitioners available remedy is to file a petition for cancellation of patent before the
Bureau of Patents; that private respondent as the patent holder cannot be stripped of its property right over the patented aerial
fuze consisting of the exclusive right to manufacture, use and sell the same and that it stands to suffer irreparable damage and injury if
it is enjoined from the exercise of its property right over its patent.
The trial court issued an Order granting the issuance of a writ of preliminary injunction against private respondent
The trial court ruled in favor of the petitioner citing the fact that it was the first to develop the aerial fuze since 1981 thus it concludes
that it is the petitioners aerial fuze that was copied by the respondent in 1987. Moreover, the claim of respondent is solely based on its
letter of patent which validity is being questioned.
On appeal, respondent argued that the petitioner has no cause of action since he has no right to assert there being no patent issued to
his aerial fuze. The Court of Appeals reversed the decision of the trial court dismissing the complaint of the petitioner.
It was the contention of the petitioner that it can file under Section 42 of the Patent Law an action for infringement not as a patentee but
as an entity in possession of a right, title or interest to the patented invention. It theorizes that while the absence of a patent prevents
one from lawfully suing another for infringement of said patent, such absence does not bar the true and actual inventor of the patented
invention from suing another in the same nature as a civil action for infringement.
ISSUE: Whether or not the petitioner has the right to assail the validity of the patented work of the respondent?

RULING: The court finds the argument of the petitioner untenable. Section 42 of the Law on Patent (RA 165) provides that only the
patentee or his successors-in-interest may file an action against infringement. What the law contemplates in the phrase anyone
 53
possessing any right, title or interest in and to the patented invention refers only to the patentees successors-in-interest, assignees or
grantees since the action on patent infringement may be brought only in the name of the person granted with the patent.
There can be no infringement of a patent until a patent has been issued since the right one has over the invention covered by the
patent arises from the grant of the patent alone. Therefore, a person who has not been granted letter of patent over an invention has
not acquired right or title over the invention and thus has no cause of action for infringement. Petitioner admitted to have no patent over
his invention. Respondents aerial fuze is covered by letter of patent issued by the Bureau of Patents thus it has in his favor not only the
presumption of validity of its patent but that of a legal and factual first and true inventor of the invention.
Further, the remedy of declaratory judgment or injunctive suit on patent invalidity relied upon by petitioner cannot be likened to the civil
action for infringement under Section 42 of the Patent Law. The reason for this is that the said remedy is available only to the patent
holder or his successors-in-interest. Thus, anyone who has no patent over an invention but claims to have a right or interest thereto
cannot file an action for declaratory judgment or injunctive suit which is not recognized in this jurisdiction.
Said person, however, is not left without any remedy. He can, under Section 28 of the aforementioned law, file a petition for cancellation
of the patent within three (3) years from the publication of said patent with the Director of Patents and raise as ground therefor that the
person to whom the patent was issued is not the true and actual inventor. Hence, petitioners remedy is not to file an action for injunction
or infringement but to file a petition for cancellation of private respondent patent. Petitioner however failed to do so. As such, it cannot
now assail or impugn the validity of the private respondents letters patent by claiming that it is the true and actual inventor of the aerial
fuze.
The validity of the patent issued by the Philippine Patent Office in favor of the private respondent and the question over the
investments, novelty and usefulness of the improved process therein specified and described are matters which are better determined
by the Philippines patent Office, composed of experts in their field, have, by the issuance of the patent in question, accepted the
thinness of the private respondents new tiles as a discovery. There is a presumption that the Philippine Patent Office has correctly
determined the patentability of the improvement by the private respondent of the process in question. Since the petitioner is the
patentee of the disputed invention embraced by letters of patent UM No. 6938 issued to it on January 23, 1990 by the Bureau of
Patents, it has in its favor not only the presumption of validity of its patent, but that of a legal and factual first and true inventor of the
invention.
There is also a presumption that the Philippine Patent Office has correctly determined the patentability of the improvement by the
private respondent of the process in question.
Decision of the Court of Appeals is hereby AFFIRMED.

Right to Patent
Right to Patent
SEC. 28. Right to a Patent. - The right to a patent belongs to the inventor, his heirs, or assigns. When two (2) or more persons have
jointly made an invention, the right to a patent shall belong to them jointly.

First to File rule

SEC. 29. First to File Rule. - If two (2) or more persons have made the invention separately and independently of each other, the right
to the patent shall belong to the person who filed an application for such invention, or where two or more applications are filed for the
same invention, to the applicant who has the earliest filing date or, the earliest priority date. (3rd sentence, Sec. 10, R.A. No. 165a.)

Inventions Created Pursuant to Commission

SEC. 30. Inventions Created Pursuant to a Commission.
30.1. The person who commissions the work shall own the patent, unless otherwise provided in the contract.
30.2. In case the employee made the invention in the course of his employment contract, the patent shall belong to:
(a) The employee, if the inventive activity is not a part of his regular duties even if the employee uses the time, facilities and materials
of the employer.
(b) The employer, if the invention is the result of the performance of his regularly-assigned duties, unless there is an agreement,
express or implied, to the contrary.

Right of Priority
SEC. 31. Right of Priority. - An application for patent filed by any person who has previously applied for the same invention in another
country which by treaty, convention, or law affords similar privileges to Filipino citizens, shall be considered as filed as of the date of
filing the foreign application: Provided, That: (a) the local application expressly claims priority; (b) it is filed within twelve (12) months
from the date the earliest foreign application was filed; and (c) a certified copy of the foreign application together with an English
translation is filed within six (6) months from the date of filing in the Philippines.

Patent Application
Application
SEC. 32. The Application.
32.1. The patent application shall be in Filipino or English and shall contain the following:
(a) A request for the grant of a patent;
 54
(b) A description of the invention;
(c) Drawings necessary for the understanding of the invention;
(d) One or more claims; and
(e) An abstract.

32.2. No patent may be granted unless the application identifies the inventor. If the applicant is not the inventor, the Office may require
him to submit said authority.

SEC. 33. Appointment of Agent or Representative. - An applicant who is not a resident of the Philippines must appoint and maintain a
resident agent or representative in the Philippines upon whom notice or process for judicial or administrative procedure relating to the
application for patent or the patent may be served.

Disclosure and Description of Invention

SEC. 35. Disclosure and Description of the Invention.
35.1. Disclosure. - The application shall disclose the invention in a manner sufficiently clear and complete for it to be carried out by a
person skilled in the art. Where the application concerns a microbiological process or the product thereof and involves the use of a
micro-organism which cannot be sufficiently disclosed in the application in such a way as to enable the invention to be carried out by a
person skilled in the art, and such material is not available to the public, the application shall be supplemented by a deposit of such
material with an international depository institution.

35.2. Description. - The Regulations shall prescribe the contents of the description and the order of presentation.
Unity of Invention. SEC. 38. Unity of Invention.
38.1. The application shall relate to one invention only or to a group of inventions forming a single general inventive concept.
38.2. If several independent inventions which do not form a single general inventive concept are claimed in one application, the
Director may require that the application be restricted to a single invention. A later application filed for an invention divided out
shall be considered as having been filed on the same day as the first application: Provided, That the later application is filed
within four (4) months after the requirement to divide becomes final, or within such additional time, not exceeding four (4)
months, as may be granted: Provided further, That each divisional application shall not go beyond the disclosure in the initial
application.
38.3. The fact that a patent has been granted on an application that did not comply with the requirement of unity of invention
shall not be a ground to cancel the patent.

Procedure for Grant of Patent

Filing Date Requirement
SEC. 40. Filing Date Requirements
40.1. The filing date of a patent application shall be the date of receipt by the Office of at least the following elements:
(a) An express or implicit indication that a Philippine patent is sought;
(b) Information identifying the applicant; and
(c) Description of the invention and one (1) or more claims in Filipino or English.

40.2. If any of these elements is not submitted within the period set by the Regulations, the application shall be considered withdrawn.

Examination Process
SEC. 42. Formality Examination
42.1. After the patent application has been accorded a filing date and the required fees have been paid on time in accordance with the
Regulations, the applicant shall comply with the formal requirements specified by Section 32 and the Regulations within the prescribed
period, otherwise the application shall be considered withdrawn.

42.2. The Regulations shall determine the procedure for the reexamination and revival of an application as well as the appeal to the
Director of Patents from any final action by the examiner.

SEC. 43. Classification and Search. - An application that has complied with the formal requirement shall be classified and a search
conducted to determine the prior art.

SEC. 44. Publication of Patent Application.

44.1. The patent application shall be published in the IPO Gazette together with a search document established by or on behalf of the
Office citing any documents that reflect prior art, after the expiration of eighteen (18) months from the filing date or priority date.
 55
44.2. After publication of a patent application, any interested party may inspect the application documents filed with the Office.

44.3. The Director General, subject to the approval of the Secretary of Trade and Industry, may prohibit or restrict the publication of an
application, if in his opinion, to do so would be prejudicial to the national security and interests of the Republic of the Philippines.

SEC. 45. Confidentiality Before Publication. - A patent application, which has not yet been published, and all related documents, shall
not be made available for inspection without the consent of the applicant.

SEC. 46. Rights Conferred by a Patent Application After Publication. - The applicant shall have all the rights of a patentee under
Section 76 against any person who, without his authorization, exercised any of the rights conferred under Section 71 of this Act in
relation to the invention claimed in the published patent application, as if a patent had been granted for that invention: Provided, That
the said person had:

46.1. Actual knowledge that the invention that he was using was the subject matter of a published application; or

46.2. Received written notice that the invention that he was using was the subject matter of a published application being identified in
the said notice by its serial number: Provided, That the action may not be filed until after the grant of a patent on the published
application and within four (4) years from the commission of the acts complained of.

SEC. 47. Observation by Third Parties. - Following the publication of the patent application, any person may present observations in
writing concerning the patentability of the invention. Such observations shall be communicated to the applicant who may comment on
them. The Office shall acknowledge and put such observations and comment in the file of the application to which it relates.

SEC. 48. Request for Substantive Examination.

48.1. The application shall be deemed withdrawn unless within six (6) months from the date of publication under Section 41, a written
request to determine whether a patent application meets the requirements of Sections 21 to 27 and Sections 32 to 39 and the fees
have been paid on time.
48.2. Withdrawal of the request for examination shall be irrevocable and shall not authorize the refund of any fee.

Publication and Search

SEC. 44. Publication of Patent Application.
44.1. The patent application shall be published in the IPO Gazette together with a search document established by or on behalf of the
Office citing any documents that reflect prior art, after the expiration of eighteen (18) months from the filing date or priority date.

Confidentiality Before Publication. SEC. 45. Confidentiality Before Publication. - A patent application, which has not yet been
published, and all related documents, shall not be made available for inspection without the consent of the applicant.

Rights Conferred by Patent Application after Publication

SEC. 46. Rights Conferred by a Patent Application After Publication. - The applicant shall have all the rights of a patentee under
Section 76 against any person who, without his authorization, exercised any of the rights conferred under Section 71 of this Act in
relation to the invention claimed in the published patent application, as if a patent had been granted for that invention: Provided, That
the said person had:
46.1. Actual knowledge that the invention that he was using was the subject matter of a published application; or
46.2. Received written notice that the invention that he was using was the subject matter of a published application being identified in
the said notice by its serial number: Provided, That the action may not be filed until after the grant of a patent on the published
application and within four (4) years from the commission of the acts complained of.

Grant of Patent
SEC. 50.3. A patent shall take effect on the date of the publication of the grant of the patent in the IPO Gazette.

SEC. 52. Publication Upon Grant of Patent.

52.1. The grant of the patent together with other related information shall be published in the IPO Gazette within the time prescribed by
the Regulations.

52.2. Any interested party may inspect the complete description, claims, and drawings of the patent on file with the Office.

Annual Fees
SEC. 55. Annual Fees.
 56
55.1. To maintain the patent application or patent, an annual fee shall be paid upon the expiration of four (4) years from the date the
application was published pursuant to Section 44 hereof, and on each subsequent anniversary of such date. Payment may be made
within three (3) months before the due date. The obligation to pay the annual fees shall terminate should the application be withdrawn,
refused, or cancelled.

55.2. If the annual fee is not paid, the patent application shall be deemed withdrawn or the patent considered as lapsed from the day
following the expiration of the period within which the annual fees were due. A notice that the application is deemed withdrawn or the
lapse of a patent for non-payment of any annual fee shall be published in the IPO Gazette and the lapse shall be recorded in the
Register of the Office.

Cancellation of Patents; Substitution of Patentee

Cancellation of Patents
SEC. 61. Cancellation of Patents.
61.1. Any interested person may, upon payment of the required fee, petition to cancel the patent or any claim thereof, or parts of the
claim, on any of the following grounds:
(a) That what is claimed as the invention is not new or patentable;
(b) That the patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by any person
skilled in the art; or
(c) That the patent is contrary to public order or morality.

61.2. Where the grounds for cancellation relate to some of the claims or parts o the claim, cancellation may be effected to such extent
only.

Effect of Cancellation
SEC. 66. Effect of Cancellation of Patent or Claim. - The rights conferred by the patent or any specified claim or claims cancelled shall
terminate. Notice of the cancellation shall be published in the IPO Gazette. Unless restrained by the Director General, the decision or
order to cancel by Director of Legal Affairs shall be immediately executory even pending appeal.

Remedies of Person with Patent

Application by Persons Not Having Right to Patent
SEC. 67. Patent Application by Persons Not Having the Right to a Patent
67.1. If a person referred to in Section 29 other than the applicant, is declared by final court order or decision as having the right to the
patent, such person may, within three (3) months after the decision has become final: (a) Prosecute the application as his own
application in place of the applicant; (b) File a new patent application in respect of the same invention; (c) Request that the application
be refused; or (d) Seek cancellation of the patent, if one has already been issued.

67.2. The provisions of Subsection 38.2 shall apply mutatis mutandis to a new application filed under Subsection 67.1(b).

Remedies of True and Actual Inventor

SEC. 68. Remedies of the True and Actual Inventor. - If a person, who was deprived of the patent without his consent or through fraud
is declared by final court order or decision to be the true and actual inventor, the court shall order for his substitution as patentee, or at
the option of the true inventor, cancel the patent, and award actual and other damages in his favor if warranted by the circumstances.

SEC. 70. Time to File Action in Court. - The actions indicated in Sections 67 and 68 shall be filed within one (1) year from the date of
publication made in accordance with Sections 44 and 51, respectively.

Rights of Patentees and Infringement of Patents

Rights Conferred by Patent
SEC. 71. Rights Conferred by Patent.
71.1. A patent shall confer on its owner the following exclusive rights:
(a) Where the subject matter of a patent is a product, to restrain, prohibit and prevent any unauthorized person or entity from making,
using, offering for sale, selling or importing that product;
(b) Where the subject matter of a patent is a process, to restrain, prevent or prohibit any unauthorized person or entity from using the
process, and from manufacturing, dealing in, using, selling or offering for sale, or importing any product obtained directly or
indirectly from such process.

71.2. Patent owners shall also have the right to assign, or transfer by succession the patent, and to conclude licensing contracts for the
same.
 57

103.2. Inventions and any right, title or interest in and to patents and inventions covered thereby, may be assigned or transmitted by
inheritance or bequest or may be the subject of a license contract.

Where Patent covers Product

Where Patent is Process

Assign and Transfer

Form of Assignment - SEC. 104. Assignment of Inventions. - An assignment may be of the entire right, title or interest in and to
the patent and the invention covered thereby, or of an undivided share of the entire patent and invention, in which event the
parties become joint owners thereof. An assignment may be limited to a specified territory.

Recording - SEC. 106.2. Such instruments shall be void as against any subsequent purchaser or mortgagee for valuable
consideration and without notice, unless, it is so recorded in the Office, within three (3) months from the date of said instrument,
or prior to the subsequent purchase or mortgage.

Rights of Joint Owners - SEC. 107. Rights of Joint Owners. - If two (2) or more persons jointly own a patent and the invention
covered thereby, either by the issuance of the patent in their joint favor or by reason of the assignment of an undivided share in
the patent and invention or by reason of the succession in title to such share, each of the joint owners shall be entitled to
personally make, use, sell, or import the invention for his own profit: Provided, however, That neither of the joint owners shall be
entitled to grant licenses or to assign his right, title or interest or part thereof without the consent of the other owner or owners, or
without proportionally dividing the proceeds with such other owner or owners.

Doctrine of Equivalents
Limitation of Patent Rights
SEC. 72. Limitations of Patent Rights. - The owner of a patent has no right to prevent third parties from performing, without his
authorization, the acts referred to in Section 71 hereof in the following circumstances:
72.1. Using a patented product which has been put on the market in the Philippines by the owner of the product, or with his express
consent, insofar as such use is performed after that product has been so put on the said market: Provided, That with regard to drugs
and medicines, the limitation on patent rights shall apply after a drug or medicine has been introduced in the Philippines or anywhere
else in the world by the patent owner, or by any party authorized to use the invention: Provided, further, That the right to import the
drugs and medicines contemplated in this section shall be available to any government agency or any private third party;

72.2. Where the act is done privately and on a non-commercial scale or for a non-commercial purpose: Provided, That it does not
significantly prejudice the economic interests of the owner of the patent;

72.3. Where the act consists of making or using exclusively for experimental use of the invention for scientific purposes or educational
purposes and such other activities directly related to such scientific or educational experimental use;

72.4. In the case of drugs and medicines, where the act includes testing, using, making or selling the invention including any data
related thereto, solely for purposes reasonably related to the development and submission of information and issuance of approvals by
government regulatory agencies required under any law of the Philippines or of another country that regulates the manufacture,
construction, use or sale of any product: Provided, That, in order to protect the data submitted by the original patent holder from unfair
commercial use provided in Article 39.3 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement),
the Intellectual Property Office, in consultation with the appropriate government agencies, shall issue the appropriate rules and
regulations necessary therein not later than one hundred twenty (120) days after the enactment of this law;

72.5. Where the act consists of the preparation for individual cases, in a pharmacy or by a medical professional, of a medicine in
accordance with a medical prescription or acts concerning the medicine so prepared; and

72.6. Where the invention is used in any ship, vessel, aircraft, or land vehicle of any other country entering the territory of the
Philippines temporarily or accidentally: Provided, That such invention is used exclusively for the needs of the ship, vessel, aircraft, or
land vehicle and not used for the manufacturing of anything to be sold within the Philippines.

Prior User
SEC. 73. Prior User.
 58
73.1. Notwithstanding Section 72 hereof, any prior user, who, in good faith was using the invention or has undertaken serious
preparations to use the invention in his enterprise or business, before the filing date or priority date of the application on which a patent
is granted, shall have the right to continue the use thereof as envisaged in such preparations within the territory where the patent
produces its effect.
73.2. The right of the prior user may only be transferred or assigned together with his enterprise or business, or with that part of his
enterprise or business in which the use or preparations for use have been made.

Civil Action for Infringement

SEC. 76. Civil Action for Infringement.
76.1. The making, using, offering for sale, selling, or importing a patented product or a product obtained directly or indirectly from a
patented process, or the use of a patented process without the authorization of the patentee constitutes patent infringement. Provided,
That, this shall not apply to instances covered by Sections 72.1 and 72.4 (Limitations of Patent Rights); Section 74 (Use of Invention by
Government); Section 93.6 (Compulsory Licensing); and Section 93-A (Procedures on Issuance of a Special Compulsory License
under the TRIPS Agreement) of this Code.

76.2. Any patentee, or anyone possessing any right, title or interest in and to the patented invention, whose rights have been infringed,
may bring a civil action before a court of competent jurisdiction, to recover from the infringer such damages sustained thereby, plus
attorneys fees and other expenses of litigation, and to secure an injunction for the protection of his rights.

76.3. If the damages are inadequate or cannot be readily ascertained with reasonable certainty, the court may award by way of
damages a sum equivalent to reasonable royalty.

76.4. The court may, according to the circumstances of the case, award damages in a sum above the amount found as actual damages
sustained: Provided, That the award does not exceed three (3) times the amount of such actual damages.

76.5. The court may, in its discretion, order that the infringing goods, materials and implements predominantly used in the infringement
be disposed of outside the channels of commerce or destroyed, without compensation; and

76.6. Anyone who actively induces the infringement of a patent or provides the infringer with a component of a patented product or of a
product produced because of a patented process knowing it to be especially adopted for infringing the patented invention and not
suitable for substantial non-infringing use shall be liable as a contributory infringer and shall be jointly and severally liable with the
infringer.

Limitation of Action for Damages

SEC. 79. Limitation of Action for Damages. - No damages can be recovered for acts of infringement committed more than four (4) years
before the institution of the action for infringement.

Damages; Requirement of Notice

SEC. 80. Damages; Requirement of Notice. - Damages cannot be recovered for acts of infringement committed before the infringer had
known, or had reasonable grounds to know of the patent. It is presumed that the infringer had known of the patent if on the patented
product, or on the container or package in which the article is supplied to the public, or on the advertising material relating to the
patented product or process, are placed the words "Philippine Patent" with the number of the patent.

Infringement Action by Foreign National

SEC. 77. Infringement Action by a Foreign National. - Any foreign national or juridical entity who meets the requirements of Section 3
and not engaged in business in the Philippines, to which a patent has been granted or assigned under this Act, may bring an action for
infringement of patent, whether or not it is licensed to do business in the Philippines under existing law.

Defenses in Action for Infringement

SEC. 81. Defenses in Action for Infringement. - In an action for infringement, the defendant, in addition to other defenses available to
him, may show the invalidity of the patent, or any claim thereof, on any of the grounds on which a petition of cancellation can be
brought under Section 61 hereof.

Patent Found Invalid for Infringement. SEC. 82. Patent Found Invalid May be Cancelled. - In an action for infringement, if the
court shall find the patent or any claim to be invalid, it shall cancel the same, and the Director of Legal Affairs upon receipt of the
final judgment of cancellation by the court, shall record that fact in the register of the Office and shall publish a notice to that
effect in the IPO Gazette.
 59
Criminal Action for Repetition of Infringement
SEC. 84. Criminal Action for Repetition of Infringement. - If infringement is repeated by the infringer or by anyone in connivance with
him after finality of the judgment of the court against the infringer, the offenders shall, without prejudice to the institution of a civil action
for damages, be criminally liable therefor and, upon conviction, shall suffer imprisonment for the period of not less than six (6) months
but not more than three (3) years and/or a fine of not less than One hundred thousand pesos (PhP 100,000) but not more than Three
hundred thousand pesos (Php 300,000), at the discretion of the court. The criminal action herein provided shall prescribed in three (3)
years from date of the commission of the crime.

Voluntary Licensing
Voluntary License Control
SEC. 85. Voluntary License Contract. - To encourage the transfer and dissemination of technology, prevent or control practices and
conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition and
trade, all technology transfer arrangements shall comply with the provisions of this Chapter.

Technology Transfer Arrangements Sec 4.2. The term "technology transfer arrangements" refers to contracts or agreements
involving the transfer of systematic knowledge for the manufacture of a product, the application of a process, or rendering of a
service including management contracts; and the transfer, assignment or licensing of all forms of intellectual property rights,
including licensing of computer software except computer software developed for mass market

Prohibited Clauses
SEC. 87. Prohibited Clauses. - Except in cases under Section 91, the following provisions shall be deemed prima facie to have an
adverse effect on competition and trade:

87.1. Those which impose upon the licensee the obligation to acquire from a specific source capital goods, intermediate products, raw
materials, and other technologies, or of permanently employing personnel indicated by the licensor;

87.2. Those pursuant to which the licensor reserves the right to fix the sale or resale prices of the products manufactured on the basis
of the license;

87.3. Those that contain restrictions regarding the volume and structure of production;

87.4. Those that prohibit the use of competitive technologies in a nonexclusive technology transfer agreement;

87.5. Those that establish a full or partial purchase option in favor of the licensor;

87.6. Those that obligate the licensee to transfer for free to the licensor the inventions or improvements that may be obtained through
the use of the licensed technology;

87.7. Those that require payment of royalties to the owners of patents for patents which are not used;

87.8. Those that prohibit the licensee to export the licensed product unless justified for the protection of the legitimate interest of the
licensor such as exports to countries where exclusive licenses to manufacture and/or distribute the licensed product(s) have already
been granted;

87.9. Those which restrict the use of the technology supplied after the expiration of the technology transfer arrangement, except in
cases of early termination of the technology transfer arrangement due to reason(s) attributable to the licensee;

87.10. Those which require payments for patents and other industrial property rights after their expiration, termination arrangement;

87.11. Those which require that the technology recipient shall not contest the validity of any of the patents of the technology supplier;

87.12. Those which restrict the research and development activities of the licensee designed to absorb and adapt the transferred
technology to local conditions or to initiate research and development programs in connection with new products, processes or
equipment;

87.13. Those which prevent the licensee from adapting the imported technology to local conditions, or introducing innovation to it, as
long as it does not impair the quality standards prescribed by the licensor;
 60
87.14. Those which exempt the licensor for liability for nonfulfillment of his responsibilities under the technology transfer arrangement
and/or liability arising from third party suits brought about by the use of the licensed product or the licensed technology; and 87.15.
Other clauses with equivalent effects.

Mandatory Provisions
SEC. 88. Mandatory Provisions. - The following provisions shall be included in voluntary license contracts:
88.1. That the laws of the Philippines shall govern the interpretation of the same and in the event of litigation, the venue shall be the
proper court in the place where the licensee has its principal office;

88.2. Continued access to improvements in techniques and processes related to the technology shall be made available during the
period of the technology transfer arrangement;

88.3. In the event the technology transfer arrangement shall provide for arbitration, the Procedure of Arbitration of the Arbitration Law of
the Philippines or the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) or the Rules of
Conciliation and Arbitration of the International Chamber of Commerce (ICC) shall apply and the venue of arbitration shall be the
Philippines or any neutral country; and

88.4. The Philippine taxes on all payments relating to the technology transfer arrangement shall be borne by the licensor.

Rights of Licensor
SEC. 89. Rights of Licensor. - In the absence of any provision to the contrary in the technology transfer arrangement, the grant of a
license shall not prevent the licensor from granting further licenses to third person nor from exploiting the subject matter of the
technology transfer arrangement himself.

Rights of Licensee
SEC. 90. Rights of Licensee. - The licensee shall be entitled to exploit the subject matter of the technology transfer arrangement during
the whole term of the technology transfer arrangement.

Exceptional Cases
SEC. 91. Exceptional Cases. - In exceptional or meritorious cases where substantial benefits will accrue to the economy, such as high
technology content, increase in foreign exchange earnings, employment generation, regional dispersal of industries and/or substitution
with or use of local raw materials, or in the case of Board of Investments, registered companies with pioneer status, exemption from any
of the above requirements may be allowed by the Documentation, Information and Technology Transfer Bureau after evaluation thereof
on a case by case
basis.

Non-Registration
SEC. 92. Non-Registration with the Documentation, Information and Technology Transfer Bureau. - Technology transfer arrangements
that conform with the provisions of Sections 86 and 87 need not be registered with the Documentation, Information and Technology
Transfer Bureau. Non-conformance with any of the provisions of Sections 87 and 88, however, shall automatically render the
technology transfer arrangement unenforceable, unless said technology transfer arrangement is approved and registered with the
Documentation, Information and Technology Transfer Bureau under the provisions of Section 91 on exceptional cases.

Compulsory Licensing
Grounds for Compulsory Licensing
SEC. 93. Grounds for Compulsory Licensing. - The Director General of the Intellectual Property Office may grant a license to exploit a
patented invention, even without the agreement of the patent owner, in favor of any person who has shown his capability to exploit the
invention, under any of the following circumstances:

93.1. National emergency or other circumstances of extreme urgency;

93.2. Where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national
economy as determined by the appropriate agency of the Government, so requires; or

93.3. Where a judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee
is anticompetitive; or

93.4. In case of public non-commercial use of the patent by the patentee, without satisfactory reason;
 61

93.5. If the patented invention is not being worked in the Philippines on a commercial scale, although capable of being worked, without
satisfactory reason: Provided, That the importation of the patented article shall constitute working or using the patent, and

93.6. Where the demand for patented drugs and medicines is not being met to an adequate extent and on reasonable terms, as
determined by the Secretary of the Department of Health.

SEC. 93-A. Procedures on Issuance of a Special Compulsory License under the TRIPS Agreement.
93-A.1. The Director General of the Intellectual Property Office, upon the written recommendation of the Secretary of the Department of
Health, shall, upon filing of a petition, grant a special compulsory license for the importation of patented drugs and medicines. The
special compulsory license for the importation contemplated under this provision shall be an additional special alternative procedure to
ensure access to quality affordable medicines and shall be primarily for domestic consumption: Prouided, That adequate remuneration
shall be paid to the patent owner either by the exporting or importing country. The compulsory license shall also contain a provision
directing the grantee the license to exercise reasonable measures to prevent the re-exportation of the products imported under this
provision.
The grant of a special compulsory license under this provision shall be an exception to Sections 100.4 and 100.6 of Republic Act No.
8293 and shall be immediately executory.
No court, except the Supreme Court of the Philippines, shall issue any temporary restraining order or preliminary injunction or such
other provisional remedies that will prevent the grant of the special compulsory license.

93-A.2. A compulsory license shall also be available for the manufacture and export of drugs and medicines to any country having
insufficient or no manufacturing capacity in the pharmaceutical sector to address public health problems: Provided, That, a compulsory
license has been granted by such country or such country has, by notification or otherwise, allowed importation into its jurisdiction of the
patented drugs and medicines from the Philippines in compliance with the TRIPS Agreement.

93-A.3. The right to grant a special compulsory license under this section shall not limit or prejudice the rights, obligations and
flexibilities provided under the TRIPS Agreement and under Philippine laws, particularly Section 72.1 and Section 74 of the Intellectual
Property Code, as amended under this Act. It is also without prejudice to the extent to which drugs and medicines produced under a
compulsory license can be exported as allowed in the TRIPS Agreement and applicable laws.

Period for Filing a Petition for Compulsory License

SEC. 94. Period for Filing a Petition for a Compulsory License.
94.1. A compulsory license may not be applied for on the ground stated in Subsection 93.5 before the expiration of a period of four (4)
years from the date of filing of the application or three (3) years from the date of the patent whichever period expires last.

94.2. A compulsory license which is applied for on any of the grounds stated in Subsections 93.2, 93.3, 93.4 and 93.6 and Section 97
may be applied for at any time after the grant of the patent.

Requirement to Obtain License on Reasonable Commercial Terms

SEC. 95. Requirement to Obtain a License on Reasonable Commercial Terms.
95.1. The license will only be granted after the petitioner has made efforts to obtain authorization from the patent owner on reasonable
commercial terms and conditions but such efforts have not been successful within a reasonable period of time.

95.2. The requirement under Subsection 95.1 shall not apply in any of the following cases:
(a) Where the petition for compulsory license seeks to remedy a practice determined after judicial or administrative process to be
anticompetitive;
(b) In situations of national emergency or other circumstances of extreme urgency;
(c) In cases of public non-commercial use; and
(d) In cases where the demand for the patented drugs and medicines in the Philippines is not being met to an adequate extent and on
reasonable terms, as determined by the Secretary of the Department of Health.
95.3. In situations of national emergency or other circumstances of extreme urgency, the right holder shall be notified as soon as
reasonably practicable.
95.4. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has
demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed
promptly.
95.5. Where the demand for the patented drugs and medicines in the Philippines is not being met to an adequate extent and on
reasonable terms, as determined by the Secretary of the Department of Health, the right holder shall be informed promptly.
 62
Compulsory Licensing on Semi-Conductor Technology
SEC. 96. Compulsory Licensing of Patents Involving Semi-Conductor Technology. - In the case of compulsory licensing of patents
involving semi-conductor technology, the license may only be granted in case of public non-commercial use or to remedy a practice
determined after judicial or administrative process to be anti-competitive.

Compulsory License Based on Interdependence of Patents

SEC. 97. Compulsory License Based on Interdependence of Patents.- If the invention protected by a patent, hereafter referred to as the
"second patent," within the country cannot be worked without infringing another patent, hereafter referred to as the "first patent,"
granted on a prior application or benefiting from an earlier priority, a compulsory license may be granted to the owner of the second
patent to the extent necessary for the working of his invention, subject to the following conditions:

97.1. The invention claimed in the second patent involves an important technical advance of considerable economic significance in
relation to the first patent;

97.2. The owner of the first patent shall be entitled to a cross-license on reasonable terms to use the invention claimed in the second
patent;

97.3. The use authorized in respect of the first patent shall be nonassignable except with the assignment of the second patent; and

97.4. The terms and conditions of Sections 95, 96 and 98 to 100 of this Act.

Terms and Conditions of Compulsory License

SEC. 100. Terms and Conditions of Compulsory License. - The basic terms and conditions including the rate of royalties of a
compulsory license shall be fixed by the Director of Legal Affairs subject to the following conditions:

100.1. The scope and duration of such license shall be limited to the purpose for which it was authorized;

100.2. The license shall be non-exclusive;

100.3. The license shall be non-assignable, except with that part of the enterprise or business with which the invention is being
exploited;

100.4. Use of the subject matter of the license shall be devoted predominantly for the supply of the Philippine market: Provided, That
this limitation shall not apply where the grant of the license is based on the ground that the patentees manner of exploiting the patent is
determined by judicial or administrative process, to be anti-competitive.

100.5. The license may be terminated upon proper showing that circumstances which led to its grant have ceased to exist and are
unlikely to recur: Provided, That adequate protection shall be afforded to the legitimate interest of the licensee; and

100.6. The patentee shall be paid adequate remuneration taking into account the economic value of the grant or authorization, except
that in cases where the license was granted to remedy a practice which was determined after judicial or administrative process, to be
anti-competitive, the need to correct the anti-competitive practice may be taken into account in fixing the amount of remuneration.

Amendment, Cancellation, Surrender of Compulsory License

SEC. 101. Amendment, Cancellation, Surrender of Compulsory License.
101.1. Upon the request of the patentee or the licensee, the Director of Legal Affairs may amend the decision granting the compulsory
license, upon proper showing of new facts or circumstances justifying such amendment.

101.2. Upon the request of the patentee, the said Director may cancel the compulsory license:
(a) If the ground for the grant of the compulsory license no longer exists and is unlikely to recur;
(b) if the licensee has neither begun to supply the domestic market nor made serious preparation therefor;
(c) if the licensee has not complied with the prescribed terms of the license;

101.3. The licensee may surrender the license by a written declaration submitted to the Office.

101.4. The said Director shall cause the amendment, surrender, or cancellation in the Register, notify the patentee, and/or the licensee,
and cause notice thereof to be published in the IPO Gazette.
 63

Licensees Exemption from Liability

SEC. 102. Licensees Exemption from Liability. - Any person who works a patented product, substance and/or process under a license
granted under this Chapter, shall be free from any liability for infringement: Provided however, That in the case of voluntary licensing,
no collusion with the licensor is proven. This is without prejudice to the right of the rightful owner of the patent to recover from the
licensor whatever he may have received as royalties under the license.

Registration of Utility Models

Applicability of Provisions Relating to Patents
SEC. 108. Applicability of Provisions Relating to Patents.
108.1. Subject to Section 109, the provisions governing patents shall apply, mutatis mutandis, to the registration of utility models.

108.2. Where the right to a patent conflicts with the right to a utility model registration in the case referred to in Section 29, the said
provision shall apply as if the word "patent" were replaced by the words "patent or utility model registration."

SEC. 109. Special Provisions Relating to Utility Models.

109.1 (a) An invention qualifies for registration as a utility model if it is new and industrially applicable. b) Section 21, "Patentable
Inventions", shall apply except the reference to inventive step as a condition of protection.

Patentable Inventions SEC. 109.3. A utility model registration shall expire, without any possibility of renewal, at the end of the
seventh year after the date of the filing of the application.

Conversion of Patent Application for Utility Model Registration

SEC. 110. Conversion of Patent Applications or Applications for Utility Model Registration.
110.1. At any time before the grant or refusal of a patent, an applicant for a patent may, upon payment of the prescribed fee, convert his
application into an application for registration of a utility model, which shall be accorded the filing date of the initial application. An
application may be converted only once.

110.2. At any time before the grant or refusal of a utility model registration, an applicant for a utility model registration may, upon
payment of the prescribed fee, convert his application into a patent application, which shall be accorded the filing date of the initial
application.

Industrial Designs
SEC. 111. Prohibition against Filing of Parallel Applications. - An applicant may not file two (2) applications for the same subject, one
for utility model registration and the other for the grant of a patent whether simultaneously or consecutively.

Industrial Design
SEC. 112.1. An Industrial Design is any composition of lines or colors or any three-dimensional form, whether or not associated with
lines or colors: Provided, That such composition or form gives a special appearance to and can serve as pattern for an industrial
product or handicraft.

Integrated Circuit
SEC 112.2. Integrated Circuit means a product, in its final form, or an intermediate form, in which the elements, at least one of which is
an active element and some or all of the interconnections are integrally formed in and/or on a piece of material, and which is intended to
perform an electronic function; and

Lay-out Design
112.3. Layout-Design is synonymous with 'Topography' and means the three-dimensional disposition, however expressed, of the
elements, at least one of which is an active element, and of some or all of the interconnections of an integrated circuit, or such a three-
dimensional disposition prepared for an integrated circuit intended for manufacture.

Substantial Conditions for Protection

SEC. 113. Substantive Conditions for Protection.
113.1. Only industrial designs that are new or ornamental shall benefit from protection under this Act.

113.3. Only layout-designs of integrated circuits that are original shall benefit from protection under this Act. A layout-design shall be
considered original if it is the result of its creator's own intellectual effort and is not commonplace among creators of layout-designs and
manufacturers of integrated circuits at the time of its creation.
 64

113.4. A layout-design consisting of a combination of elements and interconnections that are commonplace shall be protected only if
the combination, taken as a whole, is original.

113.2. Industrial designs dictated essentially by technical or functional considerations to obtain a technical result or those that are
contrary to public order, health or morals shall not be protected.

Term of Industrial Design Registration

SEC. 118. The Term of Industrial Design or Layout-Design Registration.
118.1. The registration of an industrial design shall be for a period of five (5) years from the filing date of the application.

118.2. The registration of an industrial design may be renewed for not more than two (2) consecutive periods of five (5) years each, by
paying the renewal fee.

118.3. The renewal fee shall be paid within twelve (12) months preceding the expiration of the period of registration. However, a grace
period of six (6) months shall be granted for payment of the fees after such expiration, upon payment of a surcharge.

118.4. The Regulations shall fix the amount of renewal fee, the surcharge and other requirements regarding the recording of renewals
of registration.

118.5. Registration of a layout-design shall be valid for a period of ten (10) years, without renewal, and such validity to be counted from
the date of commencement of the protection accorded to the layout-design. The protection of a layout-design under this Act shall
commence: a) on the date of the first commercial exploitation, anywhere in the world, of the layout-design by or with the consent of the
right holder: Provided, That an application for registration is filed with the Intellectual Property Office within two (2) years from such date
of first commercial exploitation; or b) on the filing date accorded to the application for the registration of the layout-design if the layout-
design has not been previously exploited commercially anywhere in the world.

Rights Conferred to Owner of Layout Design Registration

119.4. Rights Conferred to the Owner of a Layout-Design Registration. - The owner of a layout-design registration shall enjoy the
following rights:
(a) to reproduce, whether by incorporation in an integrated circuit or otherwise, the registered layout-design in its entirety or any part
thereof, except the act of reproducing any part that does not comply with the requirement of originality; and
(b) to sell or otherwise distribute for commercial purposes the registered layout-design, an article or an integrated circuit in which the
registered layout-design is incorporated.

119.5. Limitations of Layout Rights. - The owner of a layout design has no right to prevent third parties from reproducing, selling or
otherwise distributing for commercial purposes the registered layout-design in the following circumstances:
(1) Reproduction of the registered layout-design for private purposes or for the sole purpose of evaluation, analysis, research or
teaching;
(2) Where the act is performed in respect of a layout-design created on the basis of such analysis or evaluation and which is itself
original in the meaning as provided herein;
(3) Where the act is performed in respect of a registered lay-out design, or in respect of an integrated circuit in which such a layout-
design is incorporated, that has been put on the market by or with the consent of the right holder;
(4) In respect of an integrated circuit where the person performing or ordering such an act did not know and had no reasonable ground
to know when acquiring the integrated circuit or the article incorporating such an integrated circuit, that it incorporated an unlawfully
reproduced layout design: Provided, however, That after the time that such person has received sufficient notice that the layout-
design was unlawfully reproduced, that person may perform any of the said acts only with respect to the stock on hand or ordered
before such time and shall be liable to pay to the right holder a sum equivalent to at least 5% of net sales or such other reasonable
royalty as would be payable under a freely negotiated license in respect of such layout-design; or
(5) Where the act is performed in respect of an identical layout-design which is original and has been created independently by a third
party.