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Transcript of MIDTERMS-Media Law: Copyright Cases
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Ang vs Teodoro 9/10/2011 7:26:00 AM
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-48226 December 14, 1942 ANA L. ANG, petitioner,
vs.
TORIBIO TEODORO, respondent.
Cirilo Lim for petitioner.
Marcial P. Lichauco and Manuel M. Mejia for respondent.
OZAETA, J.:
Petitioner has appealed to this Court by certiorari to reverse the judgment of
the Court of Appeals reversing that of the Court of First Instance of Manila
and directing the Director of Commerce to cancel the registration of the
trade-mark "Ang Tibay" in favor of said petitioner, and perpetually enjoining
the latter from using said trade-mark on goods manufactured and sold by
her.
Respondent Toribio Teodoro, at first in partnership with Juan Katindig and
later as sole proprietor, has continuously used "Ang Tibay," both as a trade-
mark and as a trade-name, in the manufacture and sale of slippers, shoes,
and indoor baseballs since 1910. He formally registered it as trade-mark onSeptember 29, 1915, and as trade-name on January 3, 1933. The growth of
his business is a thrilling epic of Filipino industry and business capacity.
Starting in an obscure shop in 1910 with a modest capital of P210 but with
tireless industry and unlimited perseverance, Toribio Teodoro, then an
unknown young man making slippers with his own hands but now a
prominent business magnate and manufacturer with a large factory operated
with modern machinery by a great number of employees, has steadily grown
with his business to which he has dedicated the best years of his life and
which he has expanded to such proportions that his gross sales from 1918 to
1938 aggregated P8,787,025.65. His sales in 1937 amounted to
P1,299,343.10 and in 1938, P1,133,165.77. His expenses for advertisement
from 1919 to 1938 aggregated P210,641.56.
Petitioner (defendant below) registered the same trade-mark "Ang Tibay" for
pants and shirts on April 11, 1932, and established a factory for the
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manufacture of said articles in the year 1937. In the following year (1938)
her gross sales amounted to P422,682.09. Neither the decision of the trial
court nor that of the Court of Appeals shows how much petitioner has spent
or advertisement. But respondent in his brief says that petitioner "was
unable to prove that she had spent a single centavo advertising "Ang Tibay"shirts and pants prior to 1938. In that year she advertised the factory which
she had just built and it was when this was brought to the attention of the
appellee that he consulted his attorneys and eventually brought the present
suit."
The trial court (Judge Quirico Abeto) presiding absolved the defendant from
the complaint, with costs against the plaintiff, on the grounds that the two
trademarks are dissimilar and are used on different and non-competing
goods; that there had been no exclusive use of the trade-mark by the
plaintiff; and that there had been no fraud in the use of the said trade-mark
by the defendant because the goods on which it is used are essentially
different from those of the plaintiff. The second division of the Court of
Appeals, composed of Justices Bengson, Padilla, Lopez Vito, Tuason, and
Alex Reyes, with Justice Padilla as ponente, reversed that judgment, holding
that by uninterrupted an exclusive use since 191 in the manufacture of
slippers and shoes, respondent's trade-mark has acquired a secondary
meaning; that the goods or articles on which the two trade-marks are used
are similar or belong to the same class; and that the use by petitioner of said trade-mark constitutes a violation of sections 3 and 7 of Act No. 666.
The defendant Director of Commerce did not appeal from the decision of the
Court of Appeals.
First . Counsel for the petitioner, in a well-written brief, makes a frontal
sledge-hammer attack on the validity of respondent's trade-mark "Ang
Tibay." He contends that the phrase "Ang Tibay" as employed by the
respondent on the articles manufactured by him is a descriptive term
because, "freely translate in English," it means "strong, durable, lasting." He
invokes section 2 of Act No. 666, which provides that words or devices which
related only to the name, quality, or description of the merchandise cannot
be the subject of a trade-mark. He cites among others the case of Baxter vs.
Zuazua (5 Phil., 16), which involved the trade-mark "Agua de Kananga"
used on toilet water, and in which this Court held that the word "Kananga,"
which is the name of a well-known Philippine tree or its flower, could not be
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appropriated as a trade-mark any more than could the words "sugar,"
"tobacco," or "coffee." On the other hand, counsel for the respondent, in an
equally well-prepared and exhaustive brief, contend that the words "Ang
Tibay" are not descriptive but merely suggestive and may properly be
regarded as fanciful or arbitrary in the legal sense. The cite several cases inwhich similar words have been sustained as valid trade-marks, such as
"Holeproof" for hosiery, 1 "ideal for tooth brushes, 2 and "Fashionknit" for
neckties and sweaters. 3
We find it necessary to go into the etymology and meaning of the Tagalog
words "Ang Tibay" to determine whether they are a descriptive term, i.e.,
whether they relate to the quality or description of the merchandise to which
respondent has applied them as a trade-mark. The word "ang" is a definite
article meaning "the" in English. It is also used as an adverb, a contraction
of the word "anong" (what or how). For instance, instead of saying, "Anong
ganda!" ("How beautiful!"), we ordinarily say, "Ang ganda!" Tibay is a root
word from which are derived the verb magpatibay (to strenghten; the
nouns pagkamatibay (strength, durability), katibayan (proof, support,
strength), katibay-tibayan (superior strength); and the adjectives matibay
(strong, durable, lasting), napakatibay (very strong), kasintibay or
magkasintibay (as strong as, or of equal strength). The phrase "Ang Tibay"
is an exclamation denoting administration of strength or durability. For
instance, one who tries hard but fails to break an object exclaims, "Angtibay!" (How strong!") It may also be used in a sentence thus, " Ang tibay ng
sapatos mo!" (How durable your shoes are!") The phrase "ang tibay " is
never used adjectively to define or describe an object. One does not say,
"ang tibay sapatos" or "sapatos ang tibay " is never used adjectively to define
or describe an object. One does not say, "ang tibay sapatos" or "sapatos ang
tibay " to mean "durable shoes," but "matibay na sapatos" or "sapatos na
matibay ."
From all of this we deduce that "Ang Tibay" is not a descriptive term within
the meaning of the Trade-Mark Law but rather a fanciful or coined phrase
which may properly and legally be appropriated as a trade-mark or trade-
name. In this connection we do not fail to note that when the petitioner
herself took the trouble and expense of securing the registration of these
same words as a trademark of her products she or her attorney as well as
the Director of Commerce was undoubtedly convinced that said words (Ang
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Tibay) were not a descriptive term and hence could be legally used and
validly registered as a trade-mark. It seems stultifying and puerile for her
now to contend otherwise, suggestive of the story of sour grapes. Counsel
for the petitioner says that the function of a trade-mark is to point
distinctively, either by its own meaning or by association, to the origin orownership of the wares to which it is applied. That is correct, and we find
that "Ang Tibay," as used by the respondent to designate his wares, had
exactly performed that function for twenty-two years before the petitioner
adopted it as a trade-mark in her own business. Ang Tibay shoes and
slippers are, by association, known throughout the Philippines as products of
the Ang Tibay factory owned and operated by the respondent Toribio
Teodoro.
Second . In her second assignment of error petitioner contends that the
Court of Appeals erred in holding that the words "Ang Tibay" had acquired a
secondary meaning. In view of the conclusion we have reached upon the
first assignment of error, it is unnecessary to apply here the doctrine of
"secondary meaning" in trade-mark parlance. This doctrine is to the effect
that a word or phrase originally incapable of exclusive appropriation with
reference to an article of the market, because geographically or otherwise
descriptive, might nevertheless have been used so long and so exclusively
by one producer with reference to his article that, in that trade and to that
branch of the purchasing public, the word or phrase has come to mean thatthe article was his product. (G. & C. Merriam Co. vs. Salfield, 198 F., 369,
373.) We have said that the phrase "Ang Tibay," being neither geographic
nor descriptive, was originally capable of exclusive appropriation as a trade-
mark. But were it not so, the application of the doctrine of secondary
meaning made by the Court of Appeals could nevertheless be fully sustained
because, in any event, by respondent's long and exclusive use of said phrase
with reference to his products and his business, it has acquired a proprietary
connotation. (Landers, Frary, and Clark vs. Universal Cooler Corporation, 85
F. [2d], 46.)
Third . Petitioner's third assignment of error is, that the Court of Appeals
erred in holding that pants and shirts are goods similar to shoes and slippers
within the meaning of sections 3 and 7 of Act No. 666. She also contends
under her fourth assignment of error (which we deem convenient to pass
upon together with the third) that there can neither be infringement of
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trade-mark under section 3 nor unfair competition under section 7 through
her use of the words "Ang Tibay" in connection with pants and shirts,
because those articles do not belong to the same class of merchandise as
shoes and slippers.
The question raised by petitioner involve the scope and application of sections 3,7, 11, 13, and 20 of the Trade-Mark Law (Act No. 666.) Section 3
provides that "any person entitled to the exclusive use of a trade-mark to
designate the origin or ownership of goods he has made or deals in, may
recover damages in a civil actions from any person who has sold goods of a
similar kind, bearing such trade-mark . . . The complaining party . . . may
have a preliminary injunction, . . . and such injunction upon final hearing, if
the complainant's property in the trade-mark and the defendant's violation
thereof shall be fully established, shall be made perpetual, and this
injunction shall be part of the judgment for damages to be rendered in the
same cause." Section 7 provides that any person who, in selling his goods,
shall give them the general appearance of the goods of another either in the
wrapping of the packages, or in the devices or words thereon, or in any
other feature of their appearance, which would be likely to influence
purchasers to believe that the goods offered are those of the complainant,
shall be guilty of unfair competition, and shall be liable to an action for
damages and to an injunction, as in the cases of trade-mark infringement
under section 3. Section 11 requires the applicant for registration of a trade-mark to state, among others, "the general class of merchandise to which the
trade-mark claimed has been appropriated." Section 13 provides that no
alleged trade-mark or trade name shall be registered which is identical with
a registered or known trade-mark owned by another and appropriate to
the same class of merchandise, or which to nearly resembles another
person's lawful trade-mark or trade-name as to be likely to cause confusion
or mistake in the mind of the public, or to deceive purchasers. And section 2
authorizes the Director of Commerce to establish classes of merchandise for
the purpose of the registration of trade-marks and to determine the
particular description of articles included in each class; it also provides that
"an application for registration of a trade-mark shall be registered only for
one class of articles and only for the particular description of articles
mentioned in said application."
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We have underlined the key words used in the statute: "goods of a similar
kin," "general class of merchandise," "same class of merchandise," "classes
of merchandise," and "class of articles," because it is upon their implications
that the result of the case hinges. These phrases, which refer to the same
thing, have the same meaning as the phrase "merchandise of the samedescriptive properties" used in the statutes and jurisprudence of other
jurisdictions.
The burden of petitioner's argument is that under sections 11 and 20 the
registration by respondent of the trade-mark "Ang Tibay" for shoes and
slippers is no safe-guard against its being used by petitioner for pants and
shirts because the latter do not belong to the same class of merchandise or
articles as the former; that she cannot be held guilty of infringement of
trade-mark under section 3 because respondent's mark is not a valid trade-
mark, nor has it acquired a secondary meaning; that pants and shirts do not
possess the same descriptive properties as shoes and slippers; that neither
can she be held guilty of unfair competition under section 7 because the use
by her of the trade-mark "Ang Tibay" upon pants and shirts is not likely to
mislead the general public as to their origin or ownership; and that there is
now showing that she in unfairly or fraudulently using that mark "Ang Tibay"
against the respondent. If we were interpreting the statute for the first time
and in the first decade of the twentieth century, when it was enacted, and
were to construe it strictly and literally, we might uphold petitioner'scontentions. But law and jurisprudence must keep abreast with the progress
of mankind, and the courts must breathe life into the statutes if they are to
serve their purpose. Our Trade-mark Law, enacted nearly forty years ago,
has grown in its implications and practical application, like a constitution, in
virtue of the life continually breathed into it. It is not of merely local
application; it has its counterpart in other jurisdictions of the civilized world
from whose jurisprudence it has also received vitalizing nourishment. We
have to apply this law as it has grown and not as it was born. Its growth or
development abreast with that of sister statutes and jurisprudence in other
jurisdictions is reflected in the following observation of a well-known author:
This fundamental change in attitude first manifested itself in the year 1915-
1917. Until about then, the courts had proceeded on the theory that the
same trade-mark, used on un-like goods, could not cause confusion in trade
and that, therefore, there could be no objection to the use and registration
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of a well-known mark by a third party for a different class of goods. Since
1916 however, a growing sentiment began to arise that in the selection of a
famous mark by a third party, there was generally the hidden intention to
"have a free ride" on the trade-mark owner's reputation and good will.
(Derenberg, Trade-Mark Protection & Unfair Trading, 1936 edition, p. 409.)In the present state of development of the law on Trade-Marks, Unfair
Competition, and Unfair Trading, the test employed by the courts to
determine whether noncompeting goods are or are not of the same class is
confusion as to the origin of the goods of the second user. Although two
noncompeting articles may be classified under two different classes by the
Patent Office because they are deemed not to possess the same descriptive
properties, they would, nevertheless, be held by the courts to belong to the
same class if the simultaneous use on them of identical or closely similar
trade-marks would be likely to cause confusion as to the origin, or personal
source, of the second user's goods. They would be considered as not falling
under the same class only if they are so dissimilar or so foreign to each
other as to make it unlikely that the purchaser would think the first user
made the second user's goods.
Such construction of the law is induced by cogent reasons of equity and fair
dealing. The courts have come to realize that there can be unfair
competition or unfair trading even if the goods are non-competing, and that
such unfair trading can cause injury or damage to the first user of a giventrade-mark, first, by prevention of the natural expansion of his business and,
second, by having his business reputation confused with and put at the
mercy of the second user. Then noncompetitive products are sold under the
same mark, the gradual whittling away or dispersion of the identity and hold
upon the public mind of the mark created by its first user, inevitably results.
The original owner is entitled to the preservation of the valuable link
between him and the public that has been created by his ingenuity and the
merit of his wares or services. Experience has demonstrated that when a
well-known trade-mark is adopted by another even for a totally different
class of goods, it is done to get the benefit of the reputation and
advertisements of the originator of said mark, to convey to the public a false
impression of some supposed connection between the manufacturer of the
article sold under the original mark and the new articles being tendered to
the public under the same or similar mark. As trade has developed and
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commercial changes have come about, the law of unfair competition has
expanded to keep pace with the times and the element of strict competition
in itself has ceased to be the determining factor. The owner of a trade-mark
or trade-name has a property right in which he is entitled to protection,
since there is damage to him from confusion of reputation or goodwill in themind of the public as well as from confusion of goods. The modern trend is
to give emphasis to the unfairness of the acts and to classify and treat the
issue as a fraud.
A few of the numerous cases in which the foregoing doctrines have been laid
down in one form or another will now be cited: (1) In Teodoro Kalaw Ng Khe
vs. Level Brothers Company (G.R. No. 46817), decided by this Court on April
18, 1941, the respondent company (plaintiff below) was granted injunctive
relief against the use by the petitioner of the trade-mark "Lux" and
"Lifebuoy" for hair pomade, they having been originally used by the
respondent for soap; The Court held in effect that although said articles are
noncompetitive, they are similar or belong to the same class. (2) In Lincoln
Motor Co. vs. Lincoln Automobile Co. (44 F. [2d], 812), the manufacturer of
the well-known Lincoln automobile was granted injunctive relief against the
use of the word "Lincoln" by another company as part of its firm name. (3)
The case of Aunt Jemima Mills Co. vs. Rigney & Co. (247 F., 407), involved
the trade-mark "Aunt Jemima," originally used on flour, which the defendant
attempted to use on syrup, and there the court held that the goods, thoughdifferent, are so related as to fall within the mischief which equity should
prevent. (4) In Tiffany & Co., vs. Tiffany Productions, Inc. (264 N.Y.S., 459;
23 Trade-mark Reporter, 183), the plaintiff, a jewelry concern, was granted
injunctive relief against the defendant, a manufacturer of motion pictures,
from using the name "Tiffany." Other famous cases cited on the margin,
wherein the courts granted injunctive relief, involved the following trade-
marks or trade-names: "Kodak," for cameras and photographic supplies,
against its use for bicycles. 4 "Penslar," for medicines and toilet articles,
against its use for cigars; 5 "Rolls-Royce," for automobiles. against its use for
radio tubes; 6 "Vogue," as the name of a magazine, against its use for
hats; 7"Kotex," for sanitary napkins, against the use of "Rotex" for vaginal
syringes; 8 "Sun-Maid," for raisins, against its use for flour; 9 "Yale," for locks
and keys, against its use for electric flashlights; 10 and "Waterman," for
fountain pens, against its use for razor blades. 11lawphil.net
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Against this array of famous cases, the industry of counsel for the petitioner
has enabled him to cite on this point only the following cases: (1) Mohawk
Milk Products vs. General Distilleries Corporation (95 F. [2d], 334), wherein
the court held that gin and canned milk and cream do not belong to the
same class; (2) Fawcett Publications, Inc. vs. Popular Mechanics Co. (80 F.[2d], 194), wherein the court held that the words "Popular Mechanics" used
as the title of a magazine and duly registered as a trade-mark were not
infringed by defendant's use of the words "Modern Mechanics and
Inventions" on a competitive magazine, because the word "mechanics" is
merely a descriptive name; and (3) Oxford Book Co. vs. College Entrance
Book Co. (98 F. [2d], 688), wherein the plaintiff unsuccessfully attempted to
enjoin the defendant from using the word "Visualized" in connection with
history books, the court holding that said word is merely descriptive. These
cases cites and relied upon by petitioner are obviously of no decisive
application to the case at bar.
We think reasonable men may not disagree that shoes and shirts are not as
unrelated as fountain pens and razor blades, for instance. The mere relation
or association of the articles is not controlling. As may readily be noted from
what we have heretofore said, the proprietary connotation that a trade-mark
or trade-name has acquired is of more paramount consideration. The Court
of Appeals found in this case that by uninterrupted and exclusive use since
1910 of respondent's registered trade-mark on slippers and shoesmanufactured by him, it has come to indicate the origin and ownership of
said goods. It is certainly not farfetched to surmise that the selection by
petitioner of the same trade-mark for pants and shirts was motivated by a
desire to get a free ride on the reputation and selling power it has acquired
at the hands of the respondent. As observed in another case, 12 the field
from which a person may select a trade-mark is practically unlimited, and
hence there is no excuse for impinging upon or even closely approaching the
mark of a business rival. In the unlimited field of choice, what could have
been petitioner's purpose in selecting "Ang Tibay" if not for its fame?
Lastly, in her fifth assignment of error petitioner seems to make a frantic
effort to retain the use of the mark "Ang Tibay." Her counsel suggests that
instead of enjoining her from using it, she may be required to state in her
labels affixed to her products the inscription: "Not manufactured by Toribio
Teodoro." We think such practice would be unethical and unworthy of a
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reputable businessman. To the suggestion of petitioner, respondent may
say, not without justice though with a tinge of bitterness: "Why offer a
perpetual apology or explanation as to the origin of your products in order to
use my trade-mark instead of creating one of your own?" On our part may
we add, without meaning to be harsh, that a self-respecting person does notremain in the shelter of another but builds one of his own.
The judgment of the Court of Appeals is affirmed, with costs against the
petitioner in the three instances. So ordered.
Yulo, C.J., Moran, Paras and Bocobo, JJ., concur.
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Asia Brewery vs CA 9/10/2011 7:26:00 AM
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 103543 July 5, 1993
ASIA BREWERY, INC., petitioner,
vs.
THE HON. COURT OF APPEALS and SAN MIGUEL
CORPORATION, respondents.
Abad Santos & Associates and Sycip, Salazar, Hernandez & Gatmaitan for
petitioner.
Roco, Bunag, Kapunan Law Office for private respondent.
GRIÑO-AQUINO, J.:
On September 15, 1988, 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. (San Miguel Corporation vs. Asia Brewery
Inc., Civ. Case. No. 56390, RTC Branch 166, Pasig, Metro Manila.).
On August 27, 1990, a decision was rendered by the trial Court, presidedover by Judge Jesus O. Bersamira, dismissing SMC's complaint because ABI
"has not committed trademark infringement or unfair competition against"
SMC (p. 189, Rollo).
SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On
September 30, 1991, the Court of Appeals (Sixth Division composed of
Justice Jose C. Campos, Jr., chairman and ponente, and Justices Venancio D.
Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial court.
The dispositive part of the decision reads as follows:
In the light of the foregoing analysis and under the plain language of the
applicable rule and principle on the matter, We find the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new
judgment entered in favor of the plaintiff and against the defendant as
follows:
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(1) The defendant Asia Brewery Inc. its officers, agents, servants and
employees are hereby permanently enjoined and restrained from
manufacturing, putting up, selling, advertising, offering or announcing for
sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture
or beer in bottles and under labels substantially identical with or like the saidbottles and labels of plaintiff San Miguel Corporation employed for that
purpose, or substantially identical with or like the bottles and labels now
employed by the defendant for that purpose, or in bottles or under labels
which are calculated to deceive purchasers and consumers into the belief
that the beer is the product of the plaintiff or which will enable others to
substitute, sell or palm off the said beer of the defendant as and for the beer
of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered to render an
accounting and pay the San Miguel Corporation double any and all the
payments derived by defendant from operations of its business and the sale
of goods bearing the mark "Beer Pale Pilsen" estimated at approximately
Five Million Pesos (P5,000,000.00); to recall all its products bearing the
mark "Beer Pale Pilsen" from its retailers and deliver these as well as all
labels, signs, prints, packages, wrappers, receptacles and advertisements
bearing the infringing mark and all plates, molds, materials and other means
of making the same to the Court authorized to execute this judgment for
destruction.(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million
Pesos (P2,000,000.00) as moral damages and Half a Million Pesos
(P5,000,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney's fees in
the amount of P250,000.00 plus costs to this suit. (p. 90, Rollo.)
Upon a motion for reconsideration filed by ABI, the above dispositive part of
the decision, was modified by the separate opinions of the Special Sixth
Division 1 so that it should read thus:
In the light of the foregoing analysis and under the plain language of the
applicable rule and principle on the matter, We find the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark and unfair
competition. The decision of the trial court is hereby REVERSED, and a new
judgment entered in favor of the plaintiff and against the defendant as
follows:
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(1) The defendant Asia Brewery Inc., its officers, agents, servants and
employees are hereby permanently enjoined and restrained from
manufacturing, putting up, selling, advertising, offering or announcing for
sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture
or beer in bottles and under labels substantially identical with or like the saidbottles and labels of plaintiff San Miguel Corporation employed for that
purpose, or substantially identical with or like the bottles and labels now
employed by the defendant for that purpose, or in bottles or under labels
which are calculated to deceive purchasers and consumers into the belief
that the beer if the product of the plaintiff or which will enable others to
substitute, sell or palm off the said beer of the defendant as and for the beer
of the plaintiff-complainant.
(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its
products bearing the mark Beer Pale Pilsen from its retailers and deliver
these as well as all labels, signs, prints, packages, wrappers, receptacles and
advertisements bearing the infringing mark and all plates, molds, materials
and other means of making the same to the Court authorized to execute this
judgment for destruction.
(3) The defendant is hereby ordered to pay plaintiff the sum of Two Million
Pesos (P2,000,000.00) as moral damages and Half a Million Pesos
(P500,000.00) by way of exemplary damages.
(4) The defendant is further ordered to pay the plaintiff attorney's fees inthe amount of P250,000.00 plus costs of this suit.
In due time, ABI appealed to this Court by a petition for certiorari under Rule
45 of the Rules of Court. The lone issue in this appeal is whether ABI
infringes SMC's trademark: San Miguel Pale Pilsen with Rectangular Hops
and Malt Design, and thereby commits unfair competition against the latter.
It is a factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA
575) and as a general rule, the findings of the Court of Appeals upon factual
questions are conclusive and ought not to be disturbed by us. However,
there are exceptions to this general rule, and they are:
(1) When the conclusion is grounded entirely on speculation, surmises and
conjectures;
(2) When the inference of the Court of Appeals from its findings of fact is
manifestly mistaken, absurd and impossible;
(3) Where there is grave abuse of discretion;
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(4) When the judgment is based on a misapprehension of facts;
(5) When the appellate court, in making its findings, went beyond the issues
of the case, and the same are contrary to the admissions of both the
appellant and the appellee;
(6) When the findings of said court are contrary to those of the trial court;(7) When the findings are without citation of specific evidence on which they
are based;
(8) When the facts set forth in the petition as well as in the petitioner's main
and reply briefs are not disputed by the respondents; and
(9) When the findings of facts of the Court of Appeals are premised on the
absence of evidence and are contradicted on record. (Reynolds Philippine
Corporation vs. Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs.
Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA
238; Sacay vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139
SCRA 576; Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex
Investment and Financing Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs.
De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS Stock Brokerage,
Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. vs. CA,
133 SCRA 88].)
Under any of these exceptions, the Court has to review the evidence in order
to arrive at the correct findings based on the record (Roman Catholic Bishop
of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of the Court of Appeals and trial court are contrary to each other, the Supreme Court may
scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)
The present case is one of the exceptions because there is no concurrence
between the trial court and the Court of Appeals on the lone factual issue of
whether ABI, by manufacturing and selling its BEER PALE PILSEN in amber
colored steinie bottles of 320 ml. capacity with a white painted rectangular
label has committed trademark infringement and unfair competition against
SMC.
Infringement of trademark is a form of unfair competition (Clarke vs. Manila
Candy Co., 36 Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise
known as the Trademark Law, defines what constitutes infringement:
Sec. 22. Infringement, what constitutes. — Any person who shall use,
without the consent of the registrant, any reproduction, counterfeit, copy or
colorable imitation of any registered mark or trade-name in connection with
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the sale, offering for sale, or advertising of any goods, business or services
on 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 reproduce, counterfeit,
copy or colorably imitate any such mark or trade-name and apply suchreproduction, counterfeit, copy, or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used
upon or in connection with such goods, business or services, shall be liable
to a civil action by the registrant for any or all of the remedies herein
provided. (Emphasis supplied.)
This definition implies that only registered trade marks, trade names and
service marks are protected against infringement or unauthorized use by
another or others. The use of someone else's registered trademark, trade
name or service mark is unauthorized, hence, actionable, if it is done
"without the consent of the registrant." (Ibid .)
The registered trademark of SMC for its pale pilsen beer is:
San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine
Bureau of Patents, Trademarks and Technology Transfer Trademark
Certificate of Registration No. 36103, dated 23 Oct. 1986,
(p. 174, Rollo.)
As described by the trial court in its decision (Page 177, Rollo):
. . . . a rectangular design [is] bordered by what appears to be minutegrains arranged in rows of three in which there appear in each corner hop
designs. At the top is a phrase written in small print "Reg. Phil. Pat. Off."
and at the bottom "Net Contents: 320 Ml." The dominant feature is the
phrase "San Miguel " written horizontally at the upper portion. Below are the
words "Pale Pilsen" written diagonally across the middle of the rectangular
design. In between is a coat of arms and the phrase "Expertly Brewed." The
"S" in "San" and the "M" of "Miguel," "P" of "Pale" and "Pilsen" are written in
Gothic letters with fine strokes of serifs, the kind that first appeared in the
1780s in England and used for printing German as distinguished from Roman
and Italic. Below "Pale Pilsen" is the statement "And Bottled by" (first line,
"San Miguel Brewery" (second line), and "Philippines" (third line). (p.
177, Rollo; Emphasis supplied.)
On the other hand, ABI's trademark, as described by the trial court, consists
of:
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. . . a rectangular design bordered by what appear to be buds of flowers with
leaves. The dominant feature is "Beer " written across the upper portion of
the rectangular design. The phrase "Pale Pilsen" appears immediately below
in smaller block letters. To the left is a hop design and to the right, written
in small prints, is the phrase "Net Contents 320 ml." Immediately below"Pale Pilsen" is the statement written in three lines "Especially brewed and
bottled by" (first line), "Asia Brewery Incorporated" (second line), and
"Philippines" (third line), (p. 177, Rollo; Emphasis supplied.)
Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN
MIGUEL PALE PILSEN WITH RECTANGULAR MALT AND HOPS DESIGN? The
answer is "No."
Infringement is determined by the "test of dominancy" rather than by
differences or variations in the details of one trademark and of another. The
rule was formulated in Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4
(1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217
(1956), thus:
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.
Duplication or imitation is not necessary; nor it is necessary that theinfringing label should suggest an effort to imitate. [C. Neilman Brewing Co.
vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co.,
vs. Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement
of trademarks is whether the use of the marks involved would be likely
to cause confusion or mistakes in the mind of the public or deceive
purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d
588; . . . .) (Emphasis supplied.)
In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was
similarity or "resemblance between the two (trademarks) such as would be
likely to cause the one mark to be mistaken for the other. . . . [But] this is
not such similitude as amounts to identity."
In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court
was more specific: the test is "similarity in the dominant features of the
trademarks."
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What are the dominant features of the competing trademarks before us?
There is hardly any dispute that the dominant feature of SMC's 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 across the upper portion of the rectangulardesign.
On the other hand, the dominant feature of ABI's trademark is the name:
BEER PALE PILSEN, with the word "Beer" written in large amber letters,
larger than any of the letters found in the SMC label.
The trial court perceptively observed that the word "BEER" does not appear
in SMC's trademark, just as the words "SAN MIGUEL" do not appear in ABI's
trademark. Hence, there is absolutely no similarity in the dominant features
of both trademarks.
Neither in sound, spelling or appearance can BEER PALE PILSEN be said to
be confusingly similar to SAN MIGUEL PALE PILSEN. No one who purchases
BEER PALE PILSEN can possibly be deceived that it is SAN MIGUEL PALE
PILSEN. No evidence whatsoever was presented by SMC proving otherwise.
Besides the dissimilarity in their names, the following other dissimilarities in
the trade dress or appearance of the competing products abound:
(1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck.
The BEER PALE PILSEN bottle has a fat, bulging neck.
(2) The words "pale pilsen" on SMC's label are printed in bold and lacedletters along a diagonal band, whereas the words "pale pilsen" on ABI's
bottle are half the size and printed in slender block letters on a
straight horizontal band. (See Exhibit "8-a".).
(3) The names of the manufacturers are prominently printed on their
respective bottles.
SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery,
Philippines," whereas BEER PALE PILSEN is "Especially brewed and bottled
by Asia Brewery Incorporated, Philippines."
(4) On the back of ABI's bottle is printed in big, bold letters, under a row of
flower buds and leaves, its copyrighted slogan:
"BEER NA BEER!"
Whereas SMC's bottle carries no slogan.
(5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo,
whereas the BEER PALE PILSEN bottle has no logo.
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(6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms
and the words "San Miguel Brewery Philippines" encircling the same.
The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the
center, surrounded by the words "Asia Brewery Incorporated Philippines."
(7) Finally, there is a substantial price difference between BEER PALE PILSEN(currently at P4.25 per bottle) and SAN MIGUEL PALE PILSEN (currently at
P7.00 per bottle). One who pays only P4.25 for a bottle of beer cannot
expect to receive San Miguel Pale Pilsen from the storekeeper or bartender.
The fact that the words pale pilsen are part of ABI's trademark does not
constitute an infringement of SMC's trademark: SAN MIGUEL PALE PILSEN,
for "pale pilsen" are generic words descriptive of the color ("pale"), of a type
of beer ("pilsen"), which is a light bohemian beer with a strong hops flavor
that originated in the City of Pilsen in Czechoslovakia and became famous in
the Middle Ages. (Webster's Third New International Dictionary of the
English Language, Unabridged. Edited by Philip Babcock Gove. Springfield,
Mass.: G & C Merriam Co., [c] 1976, page 1716.) "Pilsen" is a "primarily
geographically descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166,
as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and not
appropriable by any beer manufacturer. The Trademark Law provides:
Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to
distinguish his goods, business or services from the goods, business or
services of others shall have the right to register the same [on the principalregister], unless it:
xxx xxx xxx
(e) Consists of a mark or trade-name which, when applied to or used in
connection with the goods, business or services of the applicant is merely
descriptive or deceptively misdescriptive of them, or when applied to or used
in connection with the goods, business or services of the applicant
is primarily geographically descriptive or deceptively misdescriptive of them,
or is primarily merely a surname." (Emphasis supplied.)
The words "pale pilsen" may not be appropriated by SMC for its exclusive
use even if they are part of its registered trademark: SAN MIGUEL PALE
PILSEN, any more than such descriptive words as "evaporated milk,"
"tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be
appropriated by any single manufacturer of these food products, for no other
reason than that he was the first to use them in his registered trademark.
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InMasso Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it
was held that a dealer in shoes cannot register "Leather Shoes" as his
trademark because that would be merely descriptive and it would be unjust
to deprive other dealers in leather shoes of the right to use the same words
with reference to their merchandise. No one may appropriate generic ordescriptive words. They belong to the public domain (Ong Ai Gui vs. Director
of Patents, 96 Phil. 673, 676 [1955]):
A word or a combination of words which is merely descriptive of an article of
trade, or of its composition, characteristics, or qualities, cannot be
appropriated and protected as a trademark to the exclusion of its use by
others. . . . inasmuch as all persons have an equal right to produce and vend
similar articles, they also have the right to describe them properly and to
use any appropriate language or words for that purpose, and no person can
appropriate to himself exclusively any word or expression, properly
descriptive of the article, its qualities, ingredients or characteristics, and thus
limit other persons in the use of language appropriate to the description of
their manufactures, the right to the use of such language being common to
all . This rule excluding descriptive terms has also been held to apply to
trade-names. As to whether words employed fall within this prohibition, it is
said that the true test is not whether they are exhaustively descriptive of the
article designated, but whether in themselves, and as they are commonly
used by those who understand their meaning, they are reasonably indicativeand descriptive of the thing intended. If they are thus descriptive, and not
arbitrary, they cannot be appropriated from general use and become the
exclusive property of anyone. (52 Am. Jur. 542-543.)
. . . . Others may use the same or similar descriptive word in connection
with their own wares, provided they take proper steps to prevent the public
being deceived. (Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E.
[2d] 598.)
. . . . A descriptive word may be admittedly distinctive, especially if the user
is the first creator of the article. It will, however, be denied protection, not
because it lacks distinctiveness, but rather because others are equally
entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. 869-
870.)" (Emphasis supplied.)
The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery
Incorporated, has printed its name all over the bottle of its beer product: on
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the label, on the back of the bottle, as well as on the bottle cap, disproves
SMC's charge that ABI dishonestly and fraudulently intends to palm off its
BEER PALE PILSEN as SMC's product. In view of the visible differences
between the two products, the Court believes it is quite unlikely that a
customer of average intelligence would mistake a bottle of BEER PALEPILSEN for SAN MIGUEL PALE PILSEN.
The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in
amber-colored steinie bottles of 320 ml. capacity and is also advertised in
print, broadcast, and television media, does not necessarily constitute unfair
competition.
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 or in which he deals, or his business, or services, for
those of another who has already established goodwill for his similar goods,
business or services, or any acts calculated to produce the same result.
(Sec. 29, Republic Act No. 166, as amended.) The law further enumerates
the more common ways of committing unfair competition, thus:
Sec. 29. . . .
In particular, and without in any way limiting the scope of unfair
competition, the following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either as to thegoods themselves or in the wrapping of the packages in which they are
contained, or the devices or words thereon, or in any 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; or
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(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.
In this case, the question to be determined is whether ABI is using a name
or mark for its beer that has previously come to designate SMC's beer, orwhether ABI is passing off its BEER PALE PILSEN as SMC's SAN MIGUEL PALE
PILSEN.
. . ..The universal test question is whether the public is likely to be deceived.
Nothing less than conduct tending to pass off one man's goods or business
as that of another will constitute unfair competition. Actual or probable
deception and confusion on the part of the customers by reason of
defendant's practices must always appear. (Shell Co., of the Philippines, Ltd.
vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil. 434, 439.)
The use of ABI of the steinie bottle, similar but not identical to the SAN
MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABI's
counsel, SMC did not invent but merely borrowed the steinie bottle from
abroad and it claims neither patent nor trademark protection for that bottle
shape and design. (See rollo, page 55.) The Cerveza Especial and the Efes
Pale Pilsen use the "steinie" bottle. (See Exhibits 57-D, 57-E.) The trial court
found no infringement of SMC's bottle —
The court agrees with defendant that there is no infringement of plaintiff's
bottle, firstly, because according to plaintiff's witness Deogracias Villadolid, itis a standard type of bottle called steinie, and to witness Jose Antonio
Garcia, it is not a San Miguel Corporation design but a design originally
developed in the United States by the Glass Container Manufacturer's
Institute and therefore lacks exclusivity. Secondly, the shape was never
registered as a trademark. Exhibit "C" is not a registration of a beer bottle
design required under Rep. Act 165 but the registration of the name and
other marks of ownership stamped on containers as required by Rep. Act
623. Thirdly, the neck of defendant's bottle is much larger and has a distinct
bulge in its uppermost part. (p. 186, Rollo.)
The petitioner's contention that bottle size, shape and color may not be the
exclusive property of any one beer manufacturer is well taken. SMC's being
the first to use the steinie bottle does not give SMC a vested right to use it
to the exclusion of everyone else. Being of functional or common use, and
not the exclusive invention of any one, it is available to all who might need
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to use it within the industry. Nobody can acquire any exclusive right to
market articles supplying simple human needs in containers or wrappers of
the general form, size and character commonly and immediately used in
marketing such articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)
. . . protection against imitation should be properly confined to nonfunctionalfeatures. Even if purely functional elements are slavishly copied, the
resemblance will not support an action for unfair competition, and the first
user cannot claim secondary meaning protection. Nor can the first user
predicate his claim to protection on the argument that his business was
established in reliance on any such unpatented nonfunctional feature, even
"at large expenditure of money." (Callman Unfair Competition, Trademarks
and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.)
ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its
own steinie bottle which has a fat bulging neck to differentiate it from SMC's
bottle. The amber color is a functional feature of the beer bottle. As pointed
out by ABI, all bottled beer produced in the Philippines is contained and sold
in amber-colored bottles because amber is the most effective color in
preventing transmission of light and provides the maximum protection to
beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and
Candy Co., 38 F2d 885, a merchant cannot be enjoined from using a type or
color of bottle where the same has the useful purpose of protecting the
contents from the deleterious effects of light rays. Moreover, no one mayhave a monopoly of any color. Not only beer, but most medicines, whether
in liquid or tablet form, are sold in amber-colored bottles.
That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate
SMC's bottle because that bottle capacity is the standard prescribed under
Metrication Circular No. 778, dated 4 December 1979, of the Department of
Trade, Metric System Board.
With regard to the white label of both beer bottles, ABI explained that it
used the color white for its label because white presents the strongest
contrast to the amber color of ABI's bottle; it is also the most economical to
use on labels, and the easiest to "bake" in the furnace (p. 16, TSN of
September 20, 1988). No one can have a monopoly of the color amber for
bottles, nor of white for labels, nor of the rectangular shape which is the
usual configuration of labels. Needless to say, the shape of the bottle and of
the label is unimportant. What is all important is the name of the product
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written on the label of the bottle for that is how one beer may be
distinguished form the others.
In Dy Buncio v. Tan Tiao Bok , 42 Phil. 190, 196-197, where two competing
tea products were both labelled as Formosan tea, both sold in 5-ounce
packages made of ordinary wrapping paper of conventional color, both withlabels containing designs drawn in green ink and Chinese characters written
in red ink, one label showing a double-decked jar in the center, the other, a
flower pot, this court found that the resemblances between the designs were
not sufficient to mislead the ordinary intelligent buyer, hence, there was no
unfair competition. The Court held:
. . . . In order that there may be deception of the buying public in the sense
necessary to constitute unfair competition, it is necessary to suppose a
public accustomed to buy, and therefore to some extent familiar with, the
goods in question. The test of fraudulent simulation is to be found in the
likelihood of the deception of persons in some measure acquainted with an
established design and desirous of purchasing the commodity with which
that design has been associated. The test is not found in the deception, or
possibility of the deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent as
between that and the other. The simulation, in order to be objectionable,
must be such as appears likely to mislead the ordinarily intelligent buyer
who has a need to supply and is familiar with the article that he seeks topurchase.
The main thrust of SMC's complaint if not infringement of its trademark, but
unfair competition arising form the allegedly "confusing similarity" in the
general appearance or trade dress of ABI's BEER PALE PILSEN beside SMC's
SAN MIGUEL PALE PILSEN (p. 209, Rollo)
SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly
similar" to its SAN MIGUEL PALE PILSEN because both are bottled in 320 ml.
steinie type, amber-colored bottles with white rectangular labels.
However, when as in this case, the names of the competing products are
clearly different and their respective sources are prominently printed on the
label and on other parts of the bottle, mere similarity in the shape and size
of the container and label, does not constitute unfair competition. The steinie
bottle is a standard bottle for beer and is universally used. SMC did not
invent it nor patent it. The fact that SMC's bottle is registered under R.A. No.
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623 (as amended by RA 5700, An Act to Regulate the Use of Duly Stamped
or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar
Containers) simply prohibits manufacturers of other foodstuffs from the
unauthorized use of SMC's bottles by refilling these with their products. It
was not uncommon then for products such as patis (fish sauce)and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN
bottles. Registration of SMC's beer bottles did not give SMC a patent on the
steinie or on bottles of similar size, shape or color.
Most containers are standardized because they are usually made by the
same manufacturer. Milk, whether in powdered or liquid form, is sold in
uniform tin cans. The same can be said of the standard ketchup or vinegar
bottle with its familiar elongated neck. Many other grocery items such as
coffee, mayonnaise, pickles and peanut butter are sold in standard glass
jars. The manufacturers of these foodstuffs have equal right to use these
standards tins, bottles and jars for their products. Only their respective
labels distinguish them from each other. Just as no milk producer may sue
the others for unfair competition because they sell their milk in the same
size and shape of milk can which he uses, neither may SMC claim unfair
competition arising from the fact that ABI's BEER PALE PILSEN is sold, like
SMC's SAN MIGUEL PALE PILSEN in amber steinie bottles.
The record does not bear out SMC's apprehension that BEER PALE PILSEN is
being passed off as SAN MIGUEL PALE PILSEN. This is unlikely to happen forconsumers or buyers of beer generally order their beer by brand. As pointed
out by ABI's counsel, in supermarkets and tiendas, beer is ordered by brand,
and the customer surrenders his empty replacement bottles or pays a
deposit to guarantee the return of the empties. If his empties are SAN
MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE PILSEN as replacement.
In sari-sari stores, beer is also ordered from the tindera by brand. The same
is true in restaurants, pubs and beer gardens — beer is ordered from the
waiters by brand. (Op. cit . page 50.)
Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized
the domestic beer market for the past hundred years, those who have been
drinking no other beer but SAN MIGUEL PALE PILSEN these many years
certainly know their beer too well to be deceived by a newcomer in the
market. If they gravitate to ABI's cheaper beer, it will not be because they
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are confused or deceived, but because they find the competing product to
their taste.
Our decision in this case will not diminish our ruling in "Del Monte
Corporation vs. Court of Appeals and Sunshine Sauce Manufacturing
Industries," 181 SCRA 410, 419, 3 that:. . . to determine whether a trademark has been infringed, we must consider
the mark as a whole and not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to any part of it.
That ruling may not apply to all kinds of products. The Court itself cautioned
that in resolving cases of infringement and unfair competition, the courts
should "take into consideration several factors which would affect its
conclusion, to wit: the age, training and education of the usual purchaser,
the nature and cost of the article, whether the article is bought for
immediate consumption and also the conditions under which it is usually
purchased" (181 SCRA 410, 418-419).
The Del Monte case involved catsup, a common household item which is
bought off the store shelves by housewives and house help who, if they are
illiterate and cannot identify the product by name or brand, would very likely
identify it by mere recollection of its appearance. Since the competitor,
Sunshine Sauce Mfg. Industries, not only used recycled Del Monte bottles for
its catsup (despite the warning embossed on the bottles: "Del Monte
Corporation. Not to be refilled.") but also used labels which were "a colorableimitation" of Del Monte's label, we held that there was infringement of Del
Monte's trademark and unfair competition by Sunshine.
Our ruling in Del Monte would not apply to beer which is not usually picked
from a store shelf but ordered by brand by the beer drinker himself from the
storekeeper or waiter in a pub or restaurant.
Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not
infringed by ABI's mark: "BEER NA BEER" or "BEER PALE PILSEN." ABI
makes its own bottle with a bulging neck to differentiate it from SMC's
bottle, and prints ABI's name in three (3) places on said bottle (front, back
and bottle cap) to prove that it has no intention to pass of its "BEER" as
"SAN MIGUEL."
There is no confusing similarity between the competing beers for the name
of one is "SAN MIGUEL" while the competitor is plain "BEER" and the points
of dissimilarity between the two outnumber their points of similarity.
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Petitioner ABI has neither infringed SMC's trademark nor committed unfair
competition with the latter's SAN MIGUEL PALE PILSEN product. While its
BEER PALE PILSEN admittedly competes with the latter in the open market,
that competition is neither unfair nor fraudulent. Hence, we must deny
SMC's prayer to suppress it.WHEREFORE, finding the petition for review meritorious, the same is hereby
granted. The decision and resolution of the Court of Appeals in CA-G.R. CV
No. 28104 are hereby set aside and that of the trial court is REINSTATED
and AFFIRMED. Costs against the private respondent.
SO ORDERED.
Narvasa, C.J., Bidin, Regalado, Romero, Nocon, Bellosillo and Melo, JJ.,
concur.
Feliciano, J., took no part.
Separate Opinions
CRUZ, J., dissenting:
The present ponencia stresses the specific similarities and differences of the
two products to support the conclusion that there is no infringement of trade
marks or unfair competition. That test was rejected in my own ponencia inDel Monte Corporation vs. Court of Appeals, 181 SCRA 410, concurred in by
Justices Narvasa, Gancayco, Griño-Aquino and Medialdea, where we
declared:
While the Court does recognize these distinctions, it does not agree with the
conclusion that there was no infringement or unfair competition. It seems to
us that the lower courts have been so preoccupied with the details that they
have not seen the total picture.
It has been correctly held that side-by-side comparison is not the final test
of similarity. Such comparison requires a careful scrutiny to determine in
what points the labels of the products differ, as was done by the trial judge.
The ordinary buyer does not usually make such scrutiny nor does he usually
have the time to do so. The average shopper is usually in a hurry and does
not inspect every product on the shelf as if he were browsing in a library.
Where the housewife has to return home as soon as possible to her baby or
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the working woman has to make quick purchases during her off hours, she is
apt to be confused by similar labels even if they do have minute differences.
The male shopper is worse as he usually does not bother about such
distinctions.
The question is not whether the two articles are distinguishable by theirlabels when set aside by side but 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. As
observed in several cases, the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the
attention such purchasers usually give in buying that class of goods, is the
touchstone.
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.
A number of courts have held that to determine whether a trademark has
been infringed, we must consider the mark as a whole and not as dissected.
If the buyer is deceived, it is attributable to the marks as a totality, not
usually to any part of it. The court therefore should be guided by its firstimpression, for a buyer acts quickly and is governed by a casual glance, the
value of which may be dissipated as soon as the court assumes to analyze
carefully the respective features of the mark.
It has also been held that it is not the function of the court in cases of
infringement and unfair competition to educate purchasers but rather to take
their carelessness for granted, and to be ever conscious of the fact that
marks need not be identical. A confusing similarity will justify the
intervention of equity. The judge must also be aware of the fact that usually
a defendant in cases of infringement does not normally copy but makes only
colorable changes. Well has it been said that the most successful form of
copying is to employ enough points of similarity to confuse the public with
enough points of difference to confuse the courts.
For the above reasons, and the other arguments stated in Del Monte, I
dissent.
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# Separate Opinions
CRUZ, J., dissenting:
The present ponencia stresses the specific similarities and differences of the
two products to support the conclusion that there is no infringement of trademarks or unfair competition. That test was rejected in my own ponencia in
Del Monte Corporation vs. Court of Appeals, 181 SCRA 410, concurred in by
Justices Narvasa, Gancayco, Griño-Aquino and Medialdea, where we
declared:
While the Court does recognize these distinctions, it does not agree with the
conclusion that there was no infringement or unfair competition. It seems to
us that the lower courts have been so preoccupied with the details that they
have not seen the total picture.
It has been correctly held that side-by-side comparison is not the final test
of similarity. Such comparison requires a careful scrutiny to determine in
what points the labels of the products differ, as was done by the trial judge.
The ordinary buyer does not usually make such scrutiny nor does he usually
have the time to do so. The average shopper is usually in a hurry and does
not inspect every product on the shelf as if he were browsing in a library.
Where the housewife has to return home as soon as possible to her baby or
the working woman has to make quick purchases during her off hours, she is
apt to be confused by similar labels even if they do have minute differences.The male shopper is worse as he usually does not bother about such
distinctions.
The question is not whether the two articles are distinguishable by their
labels when set aside by side but 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. As
observed in several cases, the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the
attention such purchasers usually give in buying that class of goods, is the
touchstone.
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
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ample time to minutely examine the labels in question in the comfort of his
sala, the ordinary shopper does not enjoy the same opportunity.
A number of courts have held that to determine whether a trademark has
been infringed, we must consider the mark as a whole and not as dissected.
If the buyer is deceived, it is attributable to the marks as a totality, notusually to any part of it. The court therefore should be guided by its first
impression, for a buyer acts quickly and is governed by a casual glance, the
value of which may be dissipated as soon as the court assumes to analyze
carefully the respective features of the mark.
It has also been held that it is not the function of the court in cases of
infringement and unfair competition to educate purchasers but rather to take
their carelessness for granted, and to be ever conscious of the fact that
marks need not be identical. A confusing similarity will justify the
intervention of equity. The judge must also be aware of the fact that usually
a defendant in cases of infringement does not normally copy but makes only
colorable changes. Well has it been said that the most successful form of
copying is to employ enough points of similarity to confuse the public with
enough points of difference to confuse the courts.
For the above reasons, and the other arguments stated in Del Monte, I
dissent.
# Footnotes1 Composed of Justice Jose C. Campos, Jr. as chairman, and Justices Ricardo
Francisco, fully concurring, Ricardo Pronove, partly concurring, Filemon H.
Mendoza and Oscar Herrera, both dissenting. Justice Aldecoa, who had
written a separate dissenting opinion, retired before a resolution on the
motion for reconsideration was promulgated. He was substituted by Justice
Oscar M. Herrera.
2 This portion of Justice Campos' original decision ordering ABI to render an
accounting to SMC and pay estimated damages of P5,000,000.00 did not
carry enough votes to become a decision as only Justice Ricardo Francisco
concurred fully with him. Justice Ricardo Pronove, although concurring
partially with Justice Campos' decision, excepted from the portion ordering
an accounting and payment of P5 million damages.
3 Cited in Justice R. Francisco's concurring opinion, p. 107, Rollo.
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Del monte Corp vs CA 9/10/2011 7:26:00 AM
DEL MONTE CORPORATION VS. COURT OF APPEALS
181 SCRA 410, JANUARY 25, 1990
Republic of the Philippines
CASE: Colorable imitation by Sunshine Tomato catsup of the Del Monte
Trademark due to prominent similarities in general design. Unfair
competition committed by Sunshine Sauce Manufacturing Industries
by using Del Monte catsup bottles despite warning. Sanctions
imposed on Sunshine Sauce Manufacturing Industries for violation of
R.A. No. 166 otherwise known as Trademark Law.
KEY WORDS:
Colorable imitation of trademark; bad faith in using Del Montecatsup bottles despite warnings; side by side comparison not final
test of similarity.
REFERENCE:
Supreme Court Reports Annotated, January 25, 1990 Decision,
Volume 181, pages 410-423
INDUSTRIES:
Del Monte Corporation and Sunshine Sauce Manufacturing Industries
RELEVANT LAWS:
R.A. No. 166 - Trademark Law
Arts. 2222 and 1157 of the New Civil Code
SUMMARY:
Petitioner Philippine Packing Corporation was granted by Del Monte
Corporation the right to manufacture, distribute and sell in the
Philippines various agricultural products, including catsup, under the
Del Monte trademark and logo. Respondent Sunshine Sauce
Manufacturing Industries is engaged in the manufacture, packing,
distribution and sale of various kinds of sauce, identified by the logoSunshine Fruit Catsup. Having received reports that the respondent
was using its exclusively designed bottles and a logo confusingly
similar to Del Monte's, Philpack warned it to desist from doing so on
pain of legal action. Thereafter, claiming that the demand had been
ignored, Philpack and Del Monte filed a complaint against the
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respondent for infringement of trademark and unfair competition
with prayer for damages and the issuance of a writ of preliminary
injunction. Sunshine alleged that its logo was substantially different
from the Del Monte logo and would not confuse the buying public to
the detriment of the petitioners.
The issue here is whether there is infringement of trademark and
unfair competition committed by the private respondent, and if so, is
damages recoverable.
The court decided that there is infringement since the logo of the
respondent creates confusion upon the eye of the casual purchaser
who is unsuspicious, that the same is that of the petitioner Del
Monte Corporation. Since Sunshine's label is an infringement of the
Del Monte trademark, law and equity call for the cancellation of theprivate respondent's registration and withdrawal of all its products
bearing the questioned label from the market. With regard to the
use of Del Monte's bottle, the same constitutes unfair competition;
hence, the respondent should be permanently enjoined from the use
of such bottles. As to the amount of damages, the court ruled that
damages cannot be granted since there was no proof presented as
evidence to prove the amount thereof. The court only awarded
nominal damages to the petitioner.
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Filipino society of Composers vs Tan 9/10/2011 7:26:00 AM
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. L-36402 March 16, 1987
FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS,INC., plaintiff-appellant,
vs.
BENJAMIN TAN, defendant-appellee.
Lichauco, Picazo & Agcaoili Law Office for plaintiff-appellant.
Ramon A. Nieves for defendant-appellee.
PARAS, J.:
An appeal was made to the Court of Appeals docketed as CA-G.R. No.
46373-R * entitled Filipino Society of Composers, Authors, Publishers, Inc.,
Plaintiff-Appellant v. Benjamin Tan, Defendant-Appellee, from the decision of
the Court of First Instance of Manila, Branch VII in Civil Case No.
71222 ** "Filipino Society of Composers, Authors and Publishers, Inc.,
Plaintiff v. Benjamin Tan, Defendant," which had dismissed plaintiffs'
complaint without special pronouncement as to costs.
The Court of Appeals, finding that the case involves pure questions of law,
certified the same to the Supreme Court for final determination (Resolution,
CA-G.R. No. 46373-R, Rollo, p. 36; Resolution of the Supreme Court of February 16, 1973 in L-36402, Rollo, p. 38).
The undisputed facts of this case are as follows:
Plaintiff-appellant is a non-profit association of authors, composers and
publishers duly organized under the Corporation Law of the Philippines and
registered with the Securities and Exchange Commission. Said association is
the owner of certain musical compositions among which are the songs
entitled: "Dahil Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao
Lamang" and "The Nearness Of You."
On the other hand, defendant-appellee is the operator of a restaurant known
as "Alex Soda Foundation and Restaurant" where a combo with professional
singers, hired to play and sing musical compositions to entertain and amuse
customers therein, were playing and singing the above-mentioned
compositions without any license or permission from the appellant to play or
sing the same. Accordingly, appellant demanded from the appellee payment
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of the necessary license fee for the playing and singing of aforesaid
compositions but the demand was ignored.
Hence, on November 7, 1967, appellant filed a complaint with the lower
court for infringement of copyright against defendant-appellee for allowing
the playing in defendant-appellee's restaurant of said songs copyrighted inthe name of the former.
Defendant-appellee, in his answer, countered that the complaint states no
cause of action. While not denying the playing of said copyrighted
compositions in his establishment, appellee maintains that the mere singing
and playing of songs and popular tunes even if they are copyrighted do not
constitute an infringement (Record on Appeal, p. 11; Resolution, CA-G.R.
NO. 46373-R, Rollo, pp. 32-36) under the provisions of Section 3 of the
Copyright Law (Act 3134 of the Philippine Legislature).
The lower court, finding for the defendant, dismissed the complaint (Record
on Appeal, p. 25).
Plaintiff appealed to the Court of Appeals which as already stated certified
the case to the Supreme Court for adjudication on the legal question
involved. (Resolution, Court of Appeals, Rollo, p. 36; Resolution of the
Supreme Court of February 18, 1973, Rollo, p. 38).
In its brief in the Court of Appeals, appellant raised the following Assignment
of Errors:
ITHE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL
COMPOSITIONS OF THE APPELLANT WERE IN THE NATURE OF PUBLIC
PROPERTY WHEN THEY WERE COPYRIGHTED OR REGISTERED.
II
THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL
COMPOSITIONS OF THE APPELLANT WERE PLAYED AND SUNG IN THE SODA
FOUNTAIN AND RESTAURANT OF THE APPELLEE BY INDEPENDENT
CONTRACTORS AND ONLY UPON THE REQUEST OF CUSTOMERS.
III
THE LOWER COURT ERRED IN HOLDING THAT THE PLAYING AND SINGING
OF COPYRIGHTED MUSICAL COMPOSITIONS IN THE SODA FOUNTAIN AND
RESTAURANT OF THE APPELLEE ARE NOT PUBLIC PERFORMANCES FOR
PROFIT OF THE SAID COMPOSITIONS WITHIN THE MEANING AND
CONTEMPLATION OF THE COPYRIGHT LAW.
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IV
THE LOWER COURT ERRED IN NOT HOLDING THAT THE APPELLEE IS LIABLE
TO THE APPELLANT FOR FOUR (4) SEPARATE INFRINGEMENTS. (Brief for
Appellant, pp. A and B).
The petition is devoid of merit.The principal issues in this case are whether or not the playing and signing
of musical compositions which have been copyrighted under the provisions
of the Copyright Law (Act 3134) inside the establishment of the defendant-
appellee constitute a public performance for profit within the meaning and
contemplation of the Copyright Law of the Philippines; and assuming that
there were indeed public performances for profit, whether or not appellee
can be held liable therefor.
Appellant anchors its claim on Section 3(c) of the Copyright Law which
provides:
SEC. 3. The proprietor of a copyright or his heirs or assigns shall have the
exclusive right:
xxx xxx xxx
(c) To exhibit, perform, represent, produce, or reproduce the copyrighted
work in any manner or by any method whatever for profit or otherwise; if
not reproduced in copies for sale, to sell any manuscripts or any record
whatsoever thereof;
xxx xxx xxxIt maintains that playing or singing a musical composition is universally
accepted as performing the musical composition and that playing and
singing of copyrighted music in the soda fountain and restaurant of the
appellee for the entertainment of the customers although the latter do not
pay for the music but only for the food and drink constitute performance for
profit under the Copyright Law (Brief for the Appellant, pp. 19-25).
We concede that indeed there were "public performances for profit. "
The word "perform" as used in the Act has been applied to "One who plays a
musical composition on a piano, thereby producing in the air sound waves
which are heard as music ... and if the instrument he plays on is a piano plus
a broadcasting apparatus, so that waves are thrown out, not only upon the
air, but upon the other, then also he is performing the musical composition."
(Buck, et al. v. Duncan, et al.; Same Jewell La Salle Realty Co., 32F. 2d.
Series 367).
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In relation thereto, it has been held that "The playing of music in dine and
dance establishment which was paid for by the public in purchases of food
and drink constituted "performance for profit" within a Copyright Law."
(Buck, et al. v. Russon No. 4489 25 F. Supp. 317). Thus, it has been
explained that while it is possible in such establishments for the patrons topurchase their food and drinks and at the same time dance to the music of
the orchestra, the music is furnished and used by the orchestra for the
purpose of inducing the public to patronize the establishment and pay for
the entertainment in the purchase of food and drinks. The defendant
conducts his place of business for profit, and it is public; and the music is
performed for profit (Ibid , p. 319). In a similar case, the Court ruled that
"The Performance in a restaurant or hotel dining room, by persons employed
by the proprietor, of a copyrighted musical composition, for the
entertainment of patrons, without charge for admission to hear it, infringes
the exclusive right of the owner of the copyright." (Herbert v. Shanley Co.;
John Church Co. v. Hillard Hotel Co., et al., 242 U.S. 590-591). In delivering
the opinion of the Court in said two cases, Justice Holmes elaborated thus:
If the rights under the copyright are infringed only by a performance where
money is taken at the door, they are very imperfectly protected.
Performances not different in kind from those of the defendants could be
given that might compete with and even destroy the success of the
monopoly that the law intends the plaintiffs to have. It is enough to say thatthere is no need to construe the statute so narrowly. The defendants'
performances are not eleemosynary. They are part of a total for which the
public pays, and the fact that the price of the whole is attributed to a
particular item which those present are expected to order is not important.
It is true that the music is not the sole object, but neither is the food, which
probably could be got cheaper elsewhere. The object is a repast in
surroundings that to people having limited power of conversation or disliking
the rival noise, give a luxurious pleasure not to be had from eating a silent
meal. If music did not pay, it would be given up. If it pays, it pays out of the
public's pocket. Whether it pays or not, the purpose of employing it is profit,
and that is enough. (Ibid ., p. 594).
In the case at bar, it is admitted that the patrons of the restaurant in
question pay only for the food and drinks and apparently not for listening to
the music. As found by the trial court, the music provided is for the purpose
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of entertaining and amusing the customers in order to make the
establishment more attractive and desirable (Record on Appeal, p. 21). It
will be noted that for the playing and singing the musical compositions
involved, the combo was paid as independent contractors by the appellant
(Record on Appeal, p. 24). It is therefore obvious that the expenses entailedthereby are added to the overhead of the restaurant which are either
eventually charged in the price of the food and drinks or to the overall total
of additional income produced by the bigger volume of business which the
entertainment was programmed to attract. Consequently, it is beyond
question that the playing and singing of the combo in defendant-appellee's
restaurant constituted performance for profit contemplated by the Copyright
Law. (Act 3134 amended by P.D. No. 49, as amended).
Nevertheless, appellee cannot be said to have infringed upon the Copyright
Law. Appellee's allegation that the composers of the contested musical
compositions waived their right in favor of the general public when they
allowed their intellectual creations to become property of the public domain
before applying for the corresponding copyrights for the same (Brief for
Defendant-Appellee, pp. 14-15) is correct.
The Supreme Court has ruled that "Paragraph 33 of Patent Office
Administrative Order No. 3 (as amended, dated September 18, 1947)
entitled 'Rules of Practice in the Philippines Patent Office relating to the
Registration of Copyright Claims' promulgated pursuant to Republic Act 165,provides among other things that an intellectual creation should be
copyrighted thirty (30) days after its publication, if made in Manila, or within
the (60) days if made elsewhere, failure of which renders such creation
public property." (Santos v. McCullough Printing Company, 12 SCRA 324-
325 [1964]. Indeed, if the general public has made use of the object sought
to be copyrighted for thirty (30) days prior to the copyright application the
law deems the object to have been donated to the public domain and the
same can no longer be copyrighted.
A careful study of the records reveals that the song "Dahil Sa Iyo" which was
registered on April 20, 1956 (Brief for Appellant, p. 10) became popular in
radios, juke boxes, etc. long before registration (TSN, May 28, 1968, pp. 3-
5; 25) while the song "The Nearness Of You" registered on January 14, 1955
(Brief for Appellant, p. 10) had become popular twenty five (25) years prior
to 1968, (the year of the hearing) or from 1943 (TSN, May 28, 1968, p. 27)
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and the songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao
Lamang" both registered on July 10, 1966, appear to have been known and
sang by the witnesses as early as 1965 or three years before the hearing in
1968. The testimonies of the witnesses at the hearing of this case on this
subject were unrebutted by the appellant. (Ibid, pp. 28; 29 and 30).Under the circumstances, it is clear that the musical compositions in
question had long become public property, and are therefore beyond the
protection of the Copyright Law.
PREMISES CONSIDERED, the appealed decision of the Court of First Instance
of Manila in Civil Case No. 71222 is hereby AFFIRMED.
SO ORDERED.
Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes, JJ., concur.
Alampay, J., took no part.
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Pearl & Dean vs SM 9/10/2011 7:26:00 AM
[G.R. No. 148222. August 15, 2003]
PEARL & DEAN (PHIL.), INCORPORATED, petitioner , vs. SHOEMART,
INCORPORATED, and NORTH EDSA
MARKETING, INCORPORATED,respondents.
D E C I S I O NCORONA, J .:
In the instant petition for review on certiorari under Rule 45 of the Rules of
Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001
decision[1] of the Court of Appeals reversing the October 31, 1996
decision[2] of the Regional Trial Court of Makati, Branch 133, in Civil Case
No. 92-516 which declared private respondents Shoemart Inc. (SMI) and
North Edsa Marketing Inc. (NEMI) liable for infringement of trademark and
copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals[3] contained a summary
of this dispute:
―Plaintiff -appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in
the manufacture of advertising display units simply referred to as light
boxes. These units utilize specially printed posters sandwiched between
plastic sheets and illuminated with back lights. Pearl and Dean was able to
secure a Certificate of Copyright Registration dated January 20, 1981 over
these illuminated display units. The advertising light boxes were marketedunder the trademark ―Poster Ads‖. The application for registration of the
trademark was filed with the Bureau of Patents, Trademarks and Technology
Transfer on June 20, 1983, but was approved only on September 12, 1988,
per Registration No. 41165. From 1981 to about 1988, Pearl and Dean
employed the services of Metro Industrial Services to manufacture its
advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant
Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM
City North Edsa. Since SM City North Edsa was under construction at that
time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl
and Dean agreed. On September 11, 1985, Pearl and Dean‘s General
Manager, Rodolfo Vergara, submitted for signature the contracts covering
SM Cubao and SM Makati to SMI‘s Advertising Promotions and Publicity
Division Manager, Ramonlito Abano. Only the contract for SM Makati,
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however, was returned signed. On October 4, 1985, Vergara wrote Abano
inquiring about the other contract and reminding him that their agreement
for installation of light boxes was not only for its SM Makati branch, but also
for SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMI‘s house counsel informedPearl and Dean that it was rescinding the contract for SM Makati due to non-
performance of the terms thereof. In his reply dated February 17, 1986,
Vergara protested the unilateral action of SMI, saying it was without
basis. In the same letter, he pushed for the signing of the contract for SM
Cubao.
Two years later, Metro Industrial Services, the company formerly contracted
by Pearl and Dean to fabricate its display units, offered to construct light
boxes for Shoemart‘s chain of stores. SMI approved the proposal and ten
(10) light boxes were subsequently fabricated by Metro Industrial for
SMI. After its contract with Metro Industrial was terminated, SMI engaged
the services of EYD Rainbow Advertising Corporation to make the light
boxes. Some 300 units were fabricated in 1991. These were delivered on a
staggered basis and installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its
light boxes were installed at SM City and in the fastfood section of SM
Cubao. Upon investigation, Pearl and Dean found out that aside from the
two (2) reported SM branches, light boxes similar to those it manufactureswere also installed in two (2) other SM stores. It further discovered that
defendant-appellant North Edsa Marketing Inc. (NEMI), through its
marketing arm, Prime Spots Marketing Services, was set up primarily to sell
advertising space in lighted display units located in SMI‘s different
branches. Pearl and Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December
11, 1991 to both SMI and NEMI enjoining them to cease using the subject
light boxes and to remove the same from SMI‘s establishments. It also
demanded the discontinued use of the trademark ―Poster Ads,‖ and the
payment to Pearl and Dean of compensatory damages in the amount of
Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two
hundred twenty-four (224) light boxes and NEMI took down its
advertisements for ―Poster Ads‖ from the lighted display units in SMI‘s
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stores. Claiming that both SMI and NEMI failed to meet all its demands,
Pearl and Dean filed this instant case for infringement of trademark and
copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it
independently developed its poster panels using commonly knowntechniques and available technology, without notice of or reference to Pearl
and Dean‘s copyright. SMI noted that the registration of the mark ―Poster
Ads‖ was only for stationeries such as letterheads, envelopes, and the
like. Besides, according to SMI, the word ―Poster Ads‖ is a generic term
which cannot be appropriated as a trademark, and, as such, registration of
such mark is invalid. It also stressed that Pearl and Dean is not entitled to
the reliefs prayed for in its complaint since its advertising display units
contained no copyright notice, in violation of Section 27 of P.D. 49. SMI
alleged that Pearl and Dean had no cause of action against it and that the
suit was purely intended to malign SMI‘s good name. On this basis, SMI,
aside from praying for the dismissal of the case, also counterclaimed for
moral, actual and exemplary damages and for the cancellation of Pearl and
Dean‘s Certification of Copyright Registration No. PD-R-2558 dated January
20, 1981 and Certificate of Trademark Registration No. 4165 dated
September 12, 1988.
NEMI, for its part, denied having manufactured, installed or used any
advertising display units, nor having engaged in the business of advertising. It repleaded SMI‘s averments, admissions and denials and
prayed for similar reliefs and counterclaims as SMI.‖
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable
for infringement of copyright under Section 2 of PD 49, as amended, and
infringement of trademark under Section 22 of RA No. 166, as amended,
and are hereby penalized under Section 28 of PD 49, as amended, and
Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are
hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - P16,600,000.00,
representing profits
derived by defendants
as a result of infringe-
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ment of plaintiff‘s copyright
from 1991 to 1992
(b) moral damages - P1,000.000.00
(c) exemplary damages - P1,000,000.00
(d) attorney‘s fees - P1,000,000.00plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light
boxes of SMI which were fabricated by Metro Industrial Services and EYD
Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using
the trademark ―Poster Ads‖, for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiff ‘s light
boxes and its trademark ―Poster Ads‖.
Defendants‘ counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED.[4]
On appeal, however, the Court of Appeals reversed the trial court:
Since the light boxes cannot, by any stretch of the imagination, be
considered as either prints, pictorial illustrations, advertising copies, labels,
tags or box wraps, to be properly classified as a copyrightable class ―O‖
work, we have to agree with SMI when it posited that what was copyrighted
were the technical drawings only, and not the light boxes themselves, thus:42. When a drawing is technical and depicts a utilitarian object, a copyright
over the drawings like plaintiff-appellant‘s will not extend to the actual
object. It has so been held under jurisprudence, of which the leading case
isBaker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained
a copyright protection for a book entitled ―Selden‘s Condensed Ledger or
Bookkeeping Simplified‖ which purported to explain a new system of
bookkeeping. Included as part of the book were blank forms and illustrations
consisting of ruled lines and headings, specially designed for use in
connection with the system explained in the work. These forms showed the
entire operation of a day or a week or a month on a single page, or on two
pages following each other. The defendant Baker then produced forms which
were similar to the forms illustrated in Selden‘s copyrighted books. The
Court held that exclusivity to the actual forms is not extended by a
copyright. The reason was that ―to grant a monopoly in the underlying art
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when no examination of its novelty has ever been made would be a surprise
and a fraud upon the public; that is the province of letters patent, not of
copyright.‖ And that is precisely the point. No doubt aware that its alleged
original design would never pass the rigorous examination of a patent
application, plaintiff-appellant fought to foist a fraudulent monopoly on thepublic by conveniently resorting to a copyright registration which merely
employs a recordal system without the benefit of an in-depth examination of
novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs.
Triborough Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case,
Muller had obtained a copyright over an unpublished drawing entitled
―Bridge Approach – the drawing showed a novel bridge approach to unsnarl
traffic congestion‖. The defendant constructed a bridge approach which was
alleged to be an infringement of the new design illustrated in plaintiff‘s
drawings. In this case it was held that protection of the drawing does not
extend to the unauthorized duplication of the object drawn because
copyright extends only to the description or expression of the object and not
to the object itself. It does not prevent one from using the drawings to
construct the object portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont , 458 F. 2d 895
and Scholtz Homes, Inc. v. Maddox , 379 F. 2d 84, it was held that there is
no copyright infringement when one who, without being authorized, uses acopyrighted architectural plan to construct a structure. This is because the
copyright does not extend to the structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Dean‘s copyright
over the technical drawings of the latter‘s advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs.
Intermediate Appellate Court that the protective mantle of the Trademark
Law extends only to the goods used by the first user as specified in the
certificate of registration, following the clear mandate conveyed by Section
20 of Republic Act 166, as amended, otherwise known as the Trademark
Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity .- A
certificate of registration of a mark or trade-name shall be prima
facie evidence of the validity of the registration, the registrant‘s ownership of
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the mark or trade-name, and of the registrant‘s exclusive right to use the
same in connection with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated therein.‖
(underscoring supplied )
The records show that on June 20, 1983, Pearl and Dean applied for theregistration of the trademark ―Poster Ads‖ with the Bureau of Patents,
Trademarks, and Technology Transfer. Said trademark was recorded in the
Principal Register on September 12, 1988 under Registration No. 41165
covering the following products: stationeries such as letterheads, envelopes
and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability
on the part of the defendants-appellants for their use of the words ―Poster
Ads‖, in the advertising display units in suit. Jurisprudence has interpreted
Section 20 of the Trademark Law as ―an implicit permission to a
manufacturer to venture into the production of goods and allow that
producer to appropriate the brand name of the senior registrant on goods
other than those stated in the certificate of registration.‖ The Supreme
Court further emphasized the restrictive meaning of Section 20 when it
stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods
not specified therein, then a situation may arise whereby an applicant may
be tempted to register a trademark on any and all goods which his mindmay conceive even if he had never intended to use the trademark for the
said goods. We believe that such omnibus registration is not contemplated
by our Trademark Law.
While we do not discount the striking similarity between Pearl and Dean‘s
registered trademark and defendants-appellants‘ ―Poster Ads‖ design, as
well as the parallel use by which said words were used in the parties‘
respective advertising copies, we cannot find defendants-appellants liable for
infringement of trademark. ―Poster Ads‖ was registered by Pearl and Dean
for specific use in its stationeries, in contrast to defendants-appellants who
used the same words in their advertising display units. Why Pearl and Dean
limited the use of its trademark to stationeries is simply beyond us. But,
having already done so, it must stand by the consequence of the registration
which it had caused.
xxx xxx xxx
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We are constrained to adopt the view of defendants-appellants that the
words ―Poster Ads‖ are a simple contraction of the generic term poster
advertising. In the absence of any convincing proof that ―Poster Ads‖ has
acquired a secondary meaning in this jurisdiction, we find that Pearl and
Dean‘s exclusive right to the use of ―Poster Ads‖ is limited to what is writtenin its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the
trademark ―Poster Ads‖.
There being no finding of either copyright or trademark infringement on the
part of SMI and NEMI, the monetary award granted by the lower court to
Pearl and Dean has no leg to stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and
SET ASIDE, and another is rendered DISMISSING the complaint and
counterclaims in the above-entitled case for lack of merit.[5]
Dissatisfied with the above decision, petitioner P & D filed the instant
petition assigning the following errors for the Court‘s consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND
NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
INFRINGEMENT OF PEARL & DEAN‘S TRADEMARK ―POSTER ADS‖ WASCOMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
AWARD OF THE TRIAL COURT, DESPITE THE LATTER‘S FINDING, NOT
DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS GUILTY
OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH
PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL,
MORAL & EXEMPLARY DAMAGES, ATTORNEY‘S FEES AND COSTS OF SUIT.[6]
ISSUES
In resolving this very interesting case, we are challenged once again to put
into proper perspective four main concerns of intellectual property law —
patents, copyrights, trademarks and unfair competition arising from
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infringement of any of the first three. We shall focus then on the following
issues:
(1) if the engineering or technical drawings of an advertising display unit
(light box) are granted copyright protection (copyright certificate of
registration) by the National Library, is the light box depicted in suchengineering drawings ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a
patent issued by the Bureau of Patents Trademarks and Technology Transfer
(now Intellectual Property Office) — in addition to the copyright of the
engineering drawings?
(3) can the owner of a registered trademark legally prevent others from
using such trademark if it is a mere abbreviation of a term descriptive of his
goods, services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & D‘s complaint was that SMI infringed on its copyright over the
light boxes when SMI had the units manufactured by Metro and EYD
Rainbow Advertising for its own account. Obviously, petitioner‘s position was
premised on its belief that its copyright over the engineering drawings
extended ipso facto to the light boxes depicted or illustrated in said
drawings. In ruling that there was no copyright infringement, the Court of
Appeals held that the copyright was limited to the drawings alone and not to
the light box itself. We agree with the appellate court.First, petitioner‘s application for a copyright certificate — as well as
Copyright Certificate No. PD-R2588 issued by the National Library on
January 20, 1981 — clearly stated that it was for a class ―O‖ work under
Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the
statute then prevailing. Said Section 2 expressly enumerated the works
subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following works:
x x x x x x x x x
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box
wraps;
x x x x x x x x x
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Although petitioner‘s copyright certificate was entitled ―Advertising Display
Units‖ (which depicted the box-type electrical devices), its claim of copyright
infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a
mere statutory grant, the rights are limited to what the statute confers. Itmay be obtained and enjoyed only with respect to the subjects and by the
persons, and on terms and conditions specified in the
statute.[7] Accordingly, it can cover only the works falling within the
statutory enumeration or description.[8]
P & D secured its copyright under the classification class “O” work. This
being so, petitioner‘s copyright protection extended only to the technical
drawings and not to the light box itself because the latter was not at all in
the category of ―prints, pictorial illustrations, advertising copies, labels, tags
and box wraps.‖ Stated otherwise, even as we find that P & D indeed owned
a valid copyright, the same could have referred only to the technical
drawings within the category of ―pictorial illustrations.‖ It could not have
possibly stretched out to include the underlying light box. The strict
application[9] of the law‘s enumeration in Section 2 prevents us from giving
petitioner even a little leeway, that is, even if its copyright certificate was
entitled ―Advertising Display Units.‖ What the law does not include, it
excludes, and for the good reason: the light box was not a literary or artistic
piece which could be copyrighted under the copyright law. And no lessclearly, neither could the lack of statutory authority to make the light box
copyrightable be remedied by the simplistic act of entitling the copyright
certificate issued by the National Library as ―Advertising Display Units.‖
In fine, if SMI and NEMI reprinted P & D‘s technical drawings for sale to the
public without license from P & D, then no doubt they would have been
guilty of copyright infringement. But this was not the case. SMI‘s and
NEMI‘s acts complained of by P & D were to have units similar or identical to
the light box illustrated in the technical drawings manufactured by Metro and
EYD Rainbow Advertising, for leasing out to different advertisers. Was this
an infringement of petitioner‘s copyright over the technical drawings? We do
not think so.
During the trial, the president of P & D himself admitted that the light box
was neither a literary not an artistic work but an ―engineering or marketing
invention.‖ [10] Obviously, there appeared to be some confusion regarding
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what ought or ought not to be the proper subjects of copyrights, patents and
trademarks. In the leading case of Kho vs. Court of Appeals ,[11] we ruled
that these three legal rights are completely distinct and separate from one
another, and the protection afforded by one cannot be used interchangeably
to cover items or works that exclusively pertain to the others:Trademark, copyright and patents are different intellectual property rights
that cannot be interchanged with one another. A trademark is 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. In relation thereto, a trade name means the name or designation
identifying or distinguishing an enterprise. Meanwhile, the scope of a
copyright is confined to literary and artistic works which are original
intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other hand, refer to
any technical solution of a problem in any field of human activity which is
new, involves an inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial
use of the light boxes without license from petitioner, private respondents
cannot be held legally liable for infringement of P & D‘s copyright over
its technical drawings of the said light boxes, should they be liable instead
for infringement of patent? We do not think so either.For some reason or another, petitioner never secured a patent for the light
boxes. It therefore acquired no patent rights which could have protected its
invention, if in fact it really was. And because it had no patent, petitioner
could not legally prevent anyone from manufacturing or commercially using
the contraption. In Creser Precision Systems, Inc. vs. Court of
Appeals ,[12] we held that ―there can be no infringement of a patent until a
patent has been issued, since whatever right one has to the invention
covered by the patent arises alone from the grant of patent . x x x (A)n
inventor has no common law right to a monopoly of his invention. He has
the right to make use of and vend his invention, but if he voluntarily
discloses it, such as by offering it for sale, the world is free to copy and use
it with impunity. A patent, however, gives the inventor the right to exclude
all others. As a patentee, he has the exclusive right of making, selling or
using the invention.[13] On the assumption that petitioner‘s advertising units
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were patentable inventions, petitioner revealed them fully to the public by
submitting the engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and
profiting from the invention, a patent is a primordial requirement. No
patent, no protection. The ultimate goal of a patent system is to bring newdesigns and technologies into the public domain through
disclosure.[14] Ideas, once disclosed to the public without the protection of a
valid patent, are subject to appropriation without significant restraint.[15]
On one side of the coin is the public which will benefit from new ideas; on
the other are the inventors who must be protected. As held in Bauer & Cie
vs. O’Donnel ,[16] ―The act secured to the inventor the exclusive right to make
use, and vend the thing patented, and consequently to prevent others from
exercising like privileges without the consent of the patentee. It was passed
for the purpose of encouraging useful invention and promoting new and
useful inventions by the protection and stimulation given to inventive genius,
and was intended to secure to the public, after the lapse of the exclusive
privileges granted the benefit of such inventions and improvements.‖
The law attempts to strike an ideal balance between the two interests:
―(The p)atent system thus embodies a carefully crafted bargain for
encouraging the creation and disclosure of new useful and non-obvious
advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep hisinvention secret and reap its fruits indefinitely. In consideration of its
disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon
the expiration of that period, the knowledge of the invention inures to the
people, who are thus enabled to practice it and prof it by its use.‖ [17]
The patent law has a three-fold purpose: ―first, patent law seeks to foster
and reward invention; second, it promotes disclosures of inventions to
stimulate further innovation and to permit the public to practice the
invention once the patent expires; third, the stringent requirements for
patent protection seek to ensure that ideas in the public domain remain
there for the free use of the public.‖ [18]
It is only after an exhaustive examination by the patent office that a patent
is issued. Such an in-depth investigation is required because ―in rewarding a
useful invention, the rights and welfare of the community must be fairly
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dealt with and effectively guarded. To that end, the prerequisites to
obtaining a patent are strictly observed and when a patent is issued, the
limitations on its exercise are equally strictly enforced. To begin with, a
genuine invention or discovery must be demonstrated lest in the constant
demand for new appliances, the heavy hand of tribute be laid on each slighttechnological advance in art.‖ [19]
There is no such scrutiny in the case of copyrights nor any notice published
before its grant to the effect that a person is claiming the creation of a
work. The law confers the copyright from the moment of creation[20] and the
copyright certificate is issued upon registration with the National Library of a
sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents,
the petitioner cannot exclude others from the manufacture, sale or
commercial use of the light boxes on the sole basis of its copyright certificate
over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any
opportunity for the patent office (IPO) to scrutinize the light box‘s eligibility
as a patentable invention. The irony here is that, had petitioner secured a
patent instead, its exclusivity would have been for 17 years only. But
through the simplified procedure of copyright-registration with the National
Library — without undergoing the rigor of defending the patentability of its
invention before the IPO and the public — the petitioner would be protectedfor 50 years. This situation could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden[21], the United States Supreme
Court held that only the expression of an idea is protected by copyright, not
the idea itself . In that case, the plaintiff held the copyright of a book which
expounded on a new accounting system he had developed. The publication
illustrated blank forms of ledgers utilized in such a system. The defendant
reproduced forms similar to those illustrated in the plaintiff‘s copyrighted
book. The US Supreme Court ruled that:
―There is no doubt that a work on the subject of book-keeping, though only
explanatory of well known systems, may be the subject of a copyright; but,
then, it is claimed only as a book. x x x. But there is a clear distinction
between the books, as such, and the art, which it is, intended to
illustrate. The mere statement of the proposition is so evident that it
requires hardly any argument to support it. The same distinction may be
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predicated of every other art as well as that of bookkeeping. A treatise on
the composition and use of medicines, be they old or new; on the
construction and use of ploughs or watches or churns; or on the mixture and
application of colors for painting or dyeing; or on the mode of drawing lines
to produce the effect of perspective, would be the subject of copyright; butno one would contend that the copyright of the treatise would give the
exclusive right to the art or manufacture described therein. The copyright
of the book, if not pirated from other works, would be valid without regard
to the novelty or want of novelty of its subject matter. The novelty of the
art or thing described or explained has nothing to do with the validity of the
copyright. To give to the author of the book an exclusive property in
the art described therein, when no examination of its novelty has
ever been officially made, would be a surprise and a fraud upon the
public. That is the province of letters patent, not of copyright. The
claim to an invention of discovery of an art or manufacture must be
subjected to the examination of the Patent Office before an
exclusive right therein can be obtained; and a patent from the
government can only secure it.
The difference between the two things, letters patent and copyright, may be
illustrated by reference to the subjects just enumerated. Take the case of
medicines. Certain mixtures are found to be of great value in the healing
art. If the discoverer writes and publishes a book on the subject (asregular physicians generally do), he gains no exclusive right to the
manufacture and sale of the medicine; he gives that to the public. If
he desires to acquire such exclusive right, he must obtain a patent
for the mixture as a new art, manufacture or composition of
matter. He may copyright his book, if he pleases; but that only
secures to him the exclusive right of printing and publishing his
book. So of all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and
illustrations it may contain, gives no exclusive right to the modes of drawing
described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to
the public.
x x x
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Now, whilst no one has a right to print or publish his book, or any material
part thereof, as a book intended to convey instruction in the art, any person
may practice and use the art itself which he has described and illustrated
therein. The use of the art is a totally different thing from a
publication of the book explaining it. The copyright of a book onbookkeeping cannot secure the exclusive right to make, sell and use account
books prepared upon the plan set forth in such book. Whether the art might
or might not have been patented, is a question, which is not before us. It
was not patented, and is open and free to the use of the public. And, of
course, in using the art, the ruled lines and headings of accounts must
necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case
arises from a confusion of ideas produced by the peculiar nature of the art
described in the books, which have been made the subject of copyright. In
describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the
operator who uses the art. x x x The description of the art in a book,
though entitled to the benefit of copyright, lays no foundation for an
exclusive claim to the art itself. The object of the one is explanation;
the object of the other is use. The former may be secured by
copyright. The latter can only be secured, if it can be secured at all,
by letters patent.” (underscoring supplied)ON THE ISSUE OF TRADEMARK INFRINGEMENTThis issue concerns the use by respondents of the mark ―Poster Ads‖ which
petitioner‘s president said was a contraction of ―poster advertising.‖ P & D
was able to secure a trademark certificate for it, but one where the goods
specified were ―stationeries such as letterheads, envelopes, calling cards and
newsletters.‖ [22] Petitioner admitted it did not commercially engage in or
market these goods. On the contrary, it dealt in electrically operated backlit
advertising units and the sale of advertising spaces thereon, which,
however, were not at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc.
vs. Intermediate Appellate Court ,[23] where we, invoking Section 20 of the
old Trademark Law, ruled that ―the certificate of registration issued by the
Director of Patents can confer (upon petitioner) the exclusive right to use its
own symbol only to those goods specified in the certificate, subject to any
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conditions and limitations specified in the certificate x x x. One who has
adopted and used a trademark on his goods does not prevent the adoption
and use of the same trademark by others for products which are of a
different description.‖ [24] Faberge, Inc. was correct and was in fact recently
reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.[25] Assuming arguendo that ―Poster Ads‖ could validly qualify as a trademark,
the failure of P & D to secure a trademark registration for specific use on the
light boxes meant that there could not have been any trademark
infringement since registration was an essential element thereof.
ON THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a
situation which was possible even if P & D had no registration.[26] However,
while the petitioner‘s complaint in the RTC also cited unfair competition, the
trial court did not find private respondents liable therefor. Petitioner
did not appeal this particular point; hence, it cannot now revive its claim of
unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold
respondents guilty of unfair competition.
By the nature of things, there can be no unfair competition under the law on
copyrights although it is applicable to disputes over the use of trademarks.
Even a name or phrase incapable of appropriation as a trademark or
tradename may, by long and exclusive use by a business (such that thename or phrase becomes associated with the business or product in the
mind of the purchasing public), be entitled to protection against unfair
competition.[27] In this case, there was no evidence that P & D‘s use of
―Poster Ads‖ was distinctive or well-known. As noted by the Court of
Appeals, petitioner‘s expert witnesses himself had testified that ― ‗Poster
Ads‘ was too generic a name. So it was difficult to identify it with any
company, honestly speaking.‖ [28] This crucial admission by its own expert
witness that ―Poster Ads‖ could not be associated with P & D showed that, in
the mind of the public, the goods and services carrying the trademark
―Poster Ads‖ could not be distinguished from the goods and services of other
entities.
This fact also prevented the application of the doctrine of secondary
meaning. ―Poster Ads‖ was generic and incapable of being used as a
trademark because it was used in the field of poster advertising, the very
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business engaged in by petitioner. ―Secondary meaning‖ means that a word
or phrase originally incapable of exclusive appropriation with reference to an
article in the market (because it is geographically or otherwise descriptive)
might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of the purchasing public, the word or phrase has come to mean that the article
was his property.[29] The admission by petitioner‘s own expert witness that
he himself could not associate ―Poster Ads‖ with petitioner P & D because it
was ―too generic‖ definitely precluded the application of this exception.
Having discussed the most important and critical issues, we see no need to
belabor the rest.
All told, the Court finds no reversible error committed by the Court of
Appeals when it reversed the Regional Trial Court of Makati City.
WHEREFORE, the petition is hereby DENIED and the decision of the Court
of Appeals dated May 22, 2001 is AFFIRMED in toto.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales,
JJ., concur.
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Sambar vs Levis 9/10/2011 7:26:00 AM
[G.R. No. 132604. March 6, 2002]
VENANCIO SAMBAR, doing business under the name and style of CVS
Garment Enterprises, petitioner , vs. LEVI STRAUSS & CO., and LEVI
STRAUSS (PHIL.), INC., respondents.
D E C I S I O NQUISUMBING, J .:
This petition for review on certiorari prays for the reversal of the decision
dated January 30, 1998, of the Court of Appeals in CA-G.R. CV No.
51553. That decision affirmed the decision in Civil Case No. 88-2220 of the
Regional Trial Court, Branch 66, Makati City, making permanent the writ of
preliminary injunction, ordering CVS Garment and Industrial Company
(CVSGIC) and petitioner Venancio Sambar to pay private respondents jointly
and solidarily the sum of P50,000 as temperate and nominal
damages, P10,000 as exemplary damages, and P25,000 as attorney‘s fees
and litigation costs, and ordering the Director of the National Library to
cancel Copyright Registration No. 1-1998 in the name of Venancio Sambar.
The facts are as follows:
On September 28, 1987, private respondents, through a letter from their
legal officer, demanded that CVS Garment Enterprises (CVSGE) desist from
using their stitched arcuate design on the Europress jeans which CVSGE
advertised in the Manila Bulletin.
Atty. Benjamin Gruba, counsel of CVSGE, replied that the arcuate design onthe back pockets of Europress jeans was different from the design on the
back pockets of Levi‘s jeans. He further asserted that his client had a
copyright on the design it was using.
Thereafter, private respondents filed a complaint against Sambar, doing
business under the name and style of CVSGE. Private respondents also
impleaded the Director of the National Library. Summons was sent to
Sambar in his business address at 161-B Iriga corner Retiro, La Loma,
Quezon City.
Atty. Gruba claimed that he erroneously received the original summons as
he mistook it as addressed to his client, CVSGIC. He returned the summons
and the pleadings and manifested in court that CVSGE, which was formerly
doing business in the premises, already stopped operation and CVSGIC took
over CVSGE‘s occupation of the premises. He also claimed he did not know
the whereabouts of Sambar, the alleged owner of CVSGE.
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Thereafter, private respondents amended their complaint to include
CVSGIC. When private respondents learned the whereabouts of Sambar and
CVSGE, the case was revived.
Private respondents alleged in their complaint that Levi Strauss and Co.
(LS&Co.), an internationally known clothing manufacturer, owns the arcuatedesign trademark which was registered under U.S. Trademark Registration
No. 404, 248 on November 16, 1943, and in the Principal Register of
trademarks with the Philippine Patent Office under Certificate of Registration
No. 20240 issued on October 8, 1973; that through a Trademark Technical
Data and Technical Assistance Agreement with Levi Strauss (Phil.) Inc.
(LSPI) in 1972, LS&Co. granted LSPI a non-exclusive license to use the
arcuate trademark in its manufacture and sale of Levi‘s pants, jackets and
shirts in the Philippines; that in 1983, LS&Co. also appointed LSPI as its
agent and attorney-in-fact to protect its trademark in the Philippines; and
that sometime in 1987, CVSGIC and Venancio Sambar, without the consent
and authority of private respondents and in infringement and unfair
competition, sold and advertised, and despite demands to cease and desist,
continued to manufacture, sell and advertise denim pants under the brand
name ―Europress‖ with back pockets bearing a design similar to the a rcuate
trademark of private respondents, thereby causing confusion on the buying
public, prejudicial to private respondents‘ goodwill and property right.
In its answer, CVSGIC admitted it manufactured, sold and advertised andwas still manufacturing and selling denim pants under the brand name of
―Europress‖, bearing a back pocket design of two double arcs meeting in the
middle. However, it denied that there was infringement or unfair
competition because the display rooms of department stores where Levi‘s
and Europress jeans were sold, were distinctively segregated by billboards
and other modes of advertisement. CVSGIC avers that the public would not
be confused on the ownership of such known trademark as Levi‘s, Jag,
Europress, etc.. Also, CVSGIC claimed that it had its own original arcuate
design, as evidenced by Copyright Registration No. 1-1998, which was very
different and distinct from Levi‘s design. CVSGIC prayed for actual, moral
and exemplary damages by way of counterclaim.
Petitioner Venancio Sambar filed a separate answer. He denied he was
connected with CVSGIC. He admitted that Copyright Registration No. 1-
1998 was issued to him, but he denied using it. He also said he did not
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authorize anyone to use the copyrighted design. He counterclaimed for
moral and exemplary damages and payment of attorney‘s fees.
After hearing, the trial court issued a writ of preliminary injunction enjoining
CVSGIC and petitioner from manufacturing, advertising and selling pants
with the arcuate design on their back pockets. CVSGIC and petitioner didnot appear during the October 13 and 27, 1993 hearings, when they were to
present evidence. Consequently, the trial court ruled that they waived their
right to present evidence.
On May 3, 1995, the trial court rendered its decision. The dispositive portion
reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:
a) making the writ of preliminary injunction permanent;
b) ordering the defendants CVS Garment and Industrial Company and
Venancio Sambar to pay the plaintiffs jointly and solidarily the sum of
P50,000.00 as temperate and nominal damages, the sum of P10,000.00 as
exemplary damages, and the sum of P25,000.00 as attorney‘s fees and
litigation expenses and to pay the costs.
SO ORDERED.[1]
Private respondents moved for a reconsideration praying for the cancellation
of petitioner‘s copyright registration. The trial court granted reconsideration
in its July 14, 1995 order, thus:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:a) making the writ of preliminary injunction permanent;
b) ordering the defendants CVS Garment and Industrial Company and
Venancio Sambar to pay the plaintiffs jointly and solidarily the sum of
P50,000.00 as temperate and nominal damages, the sum of P10,000.00 as
exemplary damages, and the sum of P25,000.00 as attorney‘s fees and
litigation expenses and to pay the costs;
c) ordering the Director of the National Library to cancel the Copyright
Registration No. 1-1998 issued in the name of Venancio Sambar.[2]
Petitioner appealed to the Court of Appeals which on January 30, 1998
decided in favor of private respondents as follows:
WHEREFORE, the judgment appealed from is AFFIRMED in toto.
SO ORDERED.[3]
In this instant petition, petitioner avers that the Court of Appeals erred in:
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I. ...RULING THAT THERE WAS AN INFRINGEMENT OF RESPONDENT‘S
ARCUATE MARK.
II. ...RULING THAT PETITIONER IS JOINTLY AND SOLIDARILY LIABLE WITH
CVS GARMENTS INDUSTRIAL CORPORATION FOR INFRINGEMENT OF
RESPONDENT‘S ARCUATE MARK.III. ...IN ORDERING, THERE BEING NO INFRINGEMENT OR UNFAIR
COMPETITION, THE AWARD OF DAMAGES AND CANCELLATION OF
COPYRIGHT REGISTRATION NO. 1-1998 ISSUED IN THE NAME OF
PETITIONER.[4]
Briefly, we are asked to resolve the following issues:
1. Did petitioner infringe on private respondents‘ arcuate design?
2. Must we hold petitioner solidarily liable with CVS Garments Industrial
Corporation?
3. Are private respondents entitled to nominal, temperate and exemplary
damages and cancellation of petitioner‘s copyright?
On the first issue, petitioner claims that he did not infringe on private
respondents‘ arcuate design because there was no colorable imitation which
deceived or confused the public. He cites Emerald Garment Manufacturing
Corporation vs. Court of Appeals, G.R. No. 100098, 251 SCRA 600 (1995),
as authority. He disagreed with the Court of Appeals that there were
confusing similarities between Levi‘s and Europress‘ arcuate designs, despite
the trial court‘s observation of differences in them. Petitioner maintains thatalthough the backpocket designs had similarities, the public was not
confused because Levi‘s jeans had other marks not found in Europress
jeans. Further, he says Levi‘s long history and popularity made its
trademark easily identifiable by the public.
In its comment, private respondents aver that the Court of Appeals did not
err in ruling that there was infringement in this case. The backpocket design
of Europress jeans, a double arc intersecting in the middle was the same as
Levi‘s‘ mark, also a double arc intersecting at the center. Although the trial
court found differences in the two designs, these differences were not
noticeable. Further, private respondents said, infringement of trademark did
not require exact similarity. Colorable imitation enough to cause confusion
among the public, was sufficient for a trademark to be infringed. Private
respondents explained that in a market research they conducted with 600
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respondents, the result showed that the public was confused by Europress
trademark vis the Levi‘s trademark.
We find that the first issue raised by petitioner is factual. The basic rule is
that factual questions are beyond the province of this Court in a petition for
review. Although there are exceptions to this rule, this case is not one of them.[5] Hence, we find no reason to disturb the findings of the Court of
Appeals that Europress‘ use of the arcuate design was an infringement of the
Levi‘s design.
On the second issue, petitioner claims that private respondents did not show
that he was connected with CVSGIC, nor did they prove his specific acts of
infringement to make him liable for damages. Again, this is a factual matter
and factual findings of the trial court, concurred in by the Court of Appeals,
are final and binding on this Court.[6] Both the courts below found that
petitioner had a copyright over Europress‘ arcuate design and that he
consented to the use of said design by CVSGIC. We are bound by this
finding, especially in the absence of a showing that it was tainted with
arbitrariness or palpable error.[7] It must be stressed that it was immaterial
whether or not petitioner was connected with CVSGIC. What is relevant is
that petitioner had a copyright over the design and that he allowed the use
of the same by CVSGIC.
Petitioner also contends that the Court of Appeals erred when it said that he
had the burden to prove that he was not connected with CVSGIC and that hedid not authorize anyone to use his copyrighted design. According to
petitioner, these are important elements of private respondents‘ cause of
action against him, hence, private respondents had the ultimate burden of
proof.
Pertinent is Section 1, Rule 131 of the Rules of Court[8] which provides that
the burden of proof is the duty of a party to prove the truth of his claim or
defense, or any fact in issue by the amount of evidence required by law. In
civil cases, the burden of proof may be on either the plaintiff or the
defendant. It is on the latter, if in his answer he alleges an affirmative
defense, which is not a denial of an essential ingredient in the plaintiff‘s
cause of action, but is one which, if established, will be a good defense –
i.e., an ―avoidance‖ of the claim, which prima facie, the plaintiff already has
because of the defendant‘s own admissions in the pleadings.[9]
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Petitioner‘s defense in this case was an affirmative defense. He did not deny
that private respondents owned the arcuate trademark nor that CVSGIC
used on its products a similar arcuate design. What he averred was that
although he owned the copyright on the Europress arcuate design, he did
not allow CVSGIC to use it. He also said he was not connected withCVSGIC. These were not alleged by private respondents in their pleadings,
and petitioner therefore had the burden to prove these.
Lastly, are private respondents entitled to nominal, temperate and
exemplary damages and cancellation of petitioner‘s copyright?
Petitioner insists that he had not infringed on the arcuate trademark, hence,
there was no basis for nominal and temperate damages. Also, an award of
nominal damages precludes an award of temperate damages. He
cites Ventanilla vs. Centeno, G.R. No. L-14333, 1 SCRA 215 (1961) on
this. Thus, he contends, assuming arguendo that there was infringement,
the Court of Appeals still erred in awarding both nominal and temperate
damages.
Petitioner likewise said that the grant of exemplary damages was
inconsistent with the trial court‘s finding that the design of Europress jeans
was not similar to Levi‘s design and that no pecuniary loss was suffered by
respondents to entitle them to such damages.
Lastly, petitioner maintains that as Europress‘ arcuate design is not a copy
of that of Levi‘s, citing the trial court‘s findings that although there aresimilarities, there are also differences in the two designs, cancellation of his
copyright was not justified.
On this matter, private respondents assert that the lower courts found that
there was infringement and Levi‘s was entitled to damages based on
Sections 22 and 23 of RA No. 166 otherwise known as the Trade Mark
Law,[10] as amended, which was the law then governing. Said sections
define infringement and prescribe the remedies therefor. Further, private
respondents aver it was misleading for petitioner to claim that the trial court
ruled that private respondents did not suffer pecuniary loss, suggesting that
the award of damages was improper. According to the private respondents,
the trial court did not make any such ruling. It simply stated that there was
no evidence that Levi‘s had suffered decline in its sales because of the use of
the arcuate design by Europress jeans. They offer that while there may be
no direct proof that they suffered a decline in sales, damages may still be
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measured based on a reasonable percentage of the gross sales of the
respondents, pursuant to Section 23 of the Trademark law.[11]
Finally, regarding the cancellation of petitioner‘s copyright, private
respondents deny that the trial court ruled that the arcuate design of
Europress jeans was not the same as Levi‘s arcuate design jeans. On thecontrary, the trial court expressly ruled that there was similarity. The
cancellation of petitioner‘s copyright was justified because petitioner‘s
copyright can not prevail over respondents‘ registration in the Principal
Register of Bureau of Patents, Trademarks, and Technology
Transfer. According to private respondents, the essence of copyright
registration is originality and a copied design is inherently non-
copyrightable. They insist that registration does not confer originality upon
a copycat version of a prior design.
From the foregoing discussion, it is clear that the matters raised by
petitioner in relation to the last issue are purely factual, except the matter of
nominal and temperate damages. Petitioner claims that damages are not
due private respondents and his copyright should not be cancelled because
he had not infringed on Levi‘s trademark. Both the trial court and the Court
of Appeals found there was infringement. Thus, the award of damages and
cancellation of petitioner‘s copyright are appropriate.[12] Award of damages
is clearly provided in Section 23,[13] while cancellation of petitioner‘s
copyright finds basis on the fact that the design was a mere copy of that of private respondents‘ trademark. To be entitled to copyright, the thing being
copyrighted must be original, created by the author through his own skill,
labor and judgment, without directly copying or evasively imitating the work
of another.[14]
However, we agree with petitioner that it was error for the Court of Appeals
to affirm the award of nominal damages combined with temperate
damages[15] by the Regional Trial Court of Makati. What respondents are
entitled to is an award for temperate damages, not nominal damages. For
although the exact amount of damage or loss can not be determined with
reasonable certainty, the fact that there was infringement means they
suffered losses for which they are entitled to moderate damages.[16] We find
that the award of P50,000.00 as temperate damages fair and reasonable,
considering the circumstances herein as well as the global coverage and
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reputation of private respondents Levi Strauss & Company and Levi Strauss
(Phil.), Inc.
WHEREFORE, the decision dated January 30, 1998, of the Court of Appeals,
in CA-G.R. CV No. 51553 AFFIRMING the judgment of the Regional Trial
Court of Makati, Branch 66, dated July 14, 1995, is hereby MODIFIED sothat nominal damages are deleted but the amount of P50,000 is hereby
awarded only as TEMPERATE DAMAGES. In all other respects, said
judgment is hereby AFFIRMED, to wit:
a) the writ of preliminary injunction is made permanent;
b) the defendants CVS Garment and Industrial Company and Venancio
Sambar are ordered also to pay the plaintiffs jointly and solidarily the sum
of P10,000.00 as exemplary damages, and the sum of P25,000.00 as
attorney‘s fees and litigation expenses, and to pay the costs; and
c) the Director of the National Library is ordered to cancel the Copyright
Registration No. 1-1998 issued in the name of Venancio Sambar.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.