Bar Q and A #44

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1.) CHEN, Inc., a Taiwanese company, is a manufacturer of tires with the mark Light Year. From 2009 to 2014, Clark Enterprises, a Philippine-registered corporation, imported tires from CHEN, Inc. under several sales contracts and sold them herein the Philippines. In 2015, CHEN, Inc. filed a trademark application with the Intellectual Property Office (IPO) for the mark Light Year to be used for tires. The IPO issued CHEN, Inc. a certificate of registration (COR) for said mark. Clark Enterprises sought the cancellation of the COR and claimed it had a better right to register the mark Light Year. CHEN, Inc. asserted that it was the owner of the mark and Clark Enterprises was a mere distributor. Clark Enterprises argued that there was no evidence on record that the tires it imported from CHEN, Inc. bore the mark Light Year and Clark Enterprises was able to prove that it was the first to use the mark here in the Philippines. Decide the case.

While RA 8293 removed the previous requirement of proof of actual use prior to the filing of an application for registration of a mark, proof of prior and continuous use is necessary to establish ownership of trademark. Such ownership of the trademark confers the right to register the trademark. Since Chen owns the trademark as evidenced by its actual and continuous use prior to the Clark Enterprises, then it is the one entitled to the registration of the trademark. The fact that Clark was the first one to use the mark here in the Philippines will not matter. Chen’s prior actual use of the trademark even in another country bars Clark from applying for the registration of the same trademark. Also, a mere distributor does not own the trademark to the goods he distributes and his right over the trademark cannot prevail over the owner. (E.Y Industrial Sales v. Shien Dar Electricity and Machinery, GR no. 184850, Oct. 20, 2010; Ecole de Cuisine Manille v. Renaud Cointreau, GR 185830, June 5, 2013)

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2.) A distinctive-tasting pastillas is well-known throughout the country as having been developed within a close-knit women's group in Barangay San Ysmael which is located along a very busy national highway. Its popularity has encouraged the setting up of several shops selling similar delicacies, with the most famous product being the pastillas of "Barangay San Ysmael." Eventually, the pastillas of Aling Voling under the brand name "Ysmaellas" began to attract national distinction. Aling Voling therefore registered it as a copyright with the National Library. Her neighbor, Aling Yasmin, realizing the commercial value of the brand, started using the term "Ysmaellas" for her pastillas but used different colors. Aling Yasmin registered the brand name "Ysmaellas" with the Intellectual Property Office (IPO). a. Can Aling Voling successfully obtain court relief to prohibit Aling Yasmin from using the brand name "Ysmaellas" in her products on the basis of her (Aling Yoling's) copyright? What is the difference between registration as a copyright and registration as a trade or brand name? b. Can Aling Yasmin seek injunctive relief against Aling Yoling from using the brand name “Ysmaellas,” the latter relying on the doctrine of “prior use” as evidenced by her prior copyright registration?

Aling Yoling cannot successfully obtain court relief to prohibit Aling Yasmin from using the brand name “Ysmaellas“ in her product on the basis of Aling Yoling’s copyright. The brand name “ Ysmaellas “ is proper subject of trademark, not copyright. They can not be interchanged. The copyright on a trade name or mark does not guarantee her the right to the exclusive use of the same for the reason that it is not a proper subject of said intellectual right. (Kho v. Court of Appeals, G.R. No. 115758, March 19, 2002; Juan v. Juan, G.R. No. 221372, August 23, 2017)
The registration of a copyright is only a proof of the recording of the copyright but not a condition precedent for the copyright to subsist and for copyright infringement suit to prosper; whereas, registration of a trademark is an indispensable requisite for any trademark infringement suit.
b. Aling Yasmien can seek injunctive relief against Aling Yoling from using the brand name “Ysmaellas” because of the doctrine of prior use. It is ownership of the trademark that confers the right to register. Registration does not confer ownership. Since Aling Yasmin was the first one to use the brand or trade name in commerce, then she is considered the owner thereof. (EY Industrial Sales v. Shen Dar 634 SCRA 363, 2010)

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3.) What is the “test of dominancy”?

The test of dominancy requires that if the competing trademark contains the main or essential features of another and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate. Similarity in size, form and color, while relevant, is not conclusive.

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4.) Skechers Corporation sued Inter-Pacific for trademark infringement claiming that Inter-Pacific used Skechers’ registered “S” logo mark on Inter- Pacific’s shoe products without its consent. Skechers has registered the trademark “SKECHERS” and the trademark “S” (with an oval design) with the Intellectual Property Office (IPO). In its complaint, Skechers points out the following similarities: the color scheme of the blue, white and gray utilized by Skechers. Even the design and “wave-like” pattern of the mid-sole and outer sole of Inter-Pacific’s shoes are very similar to Skechers’ shoes, if not exact patterns thereof. On the side of Inter-Pacific’s shoes, near the upper part, appears the stylized “S” placed in the exact location as that of the stylized “S” the Skechers shoes. On top of the “tongue” of both shoes, appears the stylized “S” in practically the same location and size. In its defense, Inter-Pacific claims that under the Holistic Test, the following dissimilarities are present: the mark “S” found in Strong shoes is not enclosed in an “oval design”; the word “Strong” is conspicuously placed at the backside and insoles; the hang tags labels attached to the shoes bear the word “Strong” for Inter- Pacific and Skeckers U.S.A.” for Skechers; and, Strong shoes modestly priced compared to the cost of Skechers shoes. Under the foregoing circumstances, which is the proper test to be applied—Holistic or Dominancy Test? Decide.

The proper test to be applied is the dominancy test. Applying the dominancy test, there is a confusing similarity “Skechers” rubber shoes and “Strong” rubber shoes. The use of the stylized “S” by Inter-Pacific in its Strong Shoes infringes on the trademark “Skechers” already registered by Skechers U.S.A. with the IPO. While it is undisputed that Skechers U.S.A. stylized “S” is within an oval design, the dominant feature of the trademark is stylized “S” as it is precisely the stylized “S” which catches the eye of the purchaser. (Skechers, USA, Inc. v. Inter-Pacific Industrial Trading, Nov. 30, 2006)

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5.) S Development Corporation sued Shangrila Corporation for using the “S” logo and the tradename “Shangrila.” The former claims that it was the first to register the logo and the tradename in the Philippines and that it had been using the same in its restaurant business. Shangrila Corporation counters that it is an affiliate of an international organization which has been using such logo and tradename “Shangrila” for over 20 years. However, Shangrila Corporation registered the tradename and logo in the Philippines only after the suit was filed. a. Which of the two corporations has a better right to use the logo and the tradename? Explain. b. How does the international affiliation of Shangrila Corporation affect the outcome of the dispute? Explain.

a. S Corporation. Sec. 122 of the IPC provides that the rights in a trademark are acquired through valid registration. Actual prior use in commerce in the Philippines has been abolished as a condition for the registration of a trademark. (Record of the Senate, Vol. II, No. 29, 8 Oct.1996; Journal of the House of Representatives, No. 35. 12 Nov. 1996, 34)

b. Shangrila’s international affiliation shall result in a decision favorable to it. The Paris Convention mandates that protection should be afforded to internationally known marks as signatory to the Paris Convention, without regard as to whether the foreign corporation is registered, licensed or doing business in the Philippines. Shangrila’s separate personalities from their mother corporation cannot be an obstacle in the enforcement of their rights as part of the Kuok Group of Companies and as official repository, manager and operator of the subject mark and logo. Besides, R.A. No. 166 did not require the party seeking relief to be the owner of the mark but "any person who believes that he is or will be damaged by the registration of a mark or trade name." (Shangri-la International Hotel Management v. Developers Group of Companies, Inc. G.R. No. 159938)

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6.) A distinctive-tasting pastillas is well-known throughout the country as having been developed within a close-knit women's group in Barangay San Ysmael which is located along a very busy national highway. Its popularity has encouraged the setting up of several shops selling similar delicacies, with the most famous product being the pastillas of "Barangay San Ysmael." Eventually, the pastillas of Aling Voling under the brand name "Ysmaellas" began to attract national distinction. Aling Voling therefore registered it as a copyright with the National Library. Her neighbor, Aling Yasmin, realizing the commercial value of the brand, started using the term "Ysmaellas" for her pastillas but used different colors. Aling Yasmin registered the brand name "Ysmaellas" with the Intellectual Property Office (IPO). Can Aling Yoling seek the cancellation of Aling Yasmin’s trademark registration of the brand name “Ysmaellas” on the ground of “Well Known Brand” clearly evidenced by her (Aling Yoling’s) prior copyright registration, actual use of the brand, and several magazine coverages?

NO, Aling Yoling can not seek the cancellation of Aling Yasmin’s trademark registration of the brand name “ Ysmaellas on the ground of well-known brand, because the well- known mark rule only applies to a mark which is well-known internationally and in the Philippines [Section 123 ( E ) of the Intellectual Property Code]. She, however, can seek the cancellation of the trademark for being the prior user even though the mark is not well-known.

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7.) For years, Y has been engaged in the parallel importation of famous brands, including shoes carrying the foreign brand MAGIC. Exclusive distributor X demands that Y cease importation because of his appointment as exclusive distributor of MAGIC shoes in the Philippines. Y countered that the trademark MAGIC is not registered with the Intellectual Property Office as a trademark and therefore no one has the right to prevent its parallel importation. Who is correct? Why?

X is correct. His rights under his exclusive distributorship agreement are property rights entitled to protection. The importation and sale by Y of MAGIC shoes constitutes unfair competition. Registration of the trademark is not necessary in case of an action for unfair competition.

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8.) Laberge, Inc. manufactures and markets after-shave lotion, shaving cream, deodorant, talcum powder and toilet soap, using the trademark “PRUT”, which is registered with the Philippine Patent Office. Laberge does not manufacture briefs and underwear and these items are not specified in the certificate of registration. JG, who manufactures briefs and underwear, wants to know whether, under our laws, he can use and register the trademark “PRUTE” for his merchandise. What is your advice?

YES. The trademark registered in the name of Laberge, Inc. covers only after-shave lotion, shaving cream, deodorant, talcum powder and toilet soap. It does not cover briefs and underwear.

The limit of the trademark is stated in the certificate issued to Laberge, Inc. It does include briefs and underwear which are different products protected by Laberge’s trademark.

JG can register the trademark “PRUTE” to cover its briefs and underwear.

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9.) SONY is a registered trademark for TV, stereo, radio, cameras, betamax and other electronic products. A local company, Best Manufacturing, Inc., produced electric fans which it sold under the trademark’s SONY without the consent of SONY. SONY sued Best Manufacturing for infringement. Decide the case.

In order that a case for infringement of trademark can prosper, the products on which the trademark is used must be of the same kind. The electric fans produced by Best Manufacturing cannot be said to be similar to such products as TV, stereo and radio sets or cameras or betamax products of SONY.

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10.) While vacationing in Boracay, Valentino surreptitiously took photographs of his girlfriend Monaliza in her skimpy bikini. 2 weeks later, her photograph appeared in the Internet and in a national celebrity magazine. Monaliza found out that Valentino had sold the photograph to the magazine and, adding insult to injury, uploaded them to his personal blog on the Internet. a. Monaliza filed a complaint against Valentino for damages based on, among other grounds, violation of her intellectual property rights. Does she have any cause of action? Explain. b. Valentino’s friend Francesco stole the photographs and duplicated them and sold them to a magazine publication. Valentino sued Francesco for infringement and damages. Does Valentino have any cause of action? Explain. c. Does Monaliza have any cause of action against Franceso? Explain.

a. NO. Monaliza cannot sue Valentino for violation of her intellectual property rights, because she was not the one who took the pictures. She may sue Valentino instead for violation of her right to privacy. He surreptitiously took photographs of her and then sold the photographs to a magazine and uploaded them to his personal blog in the Internet.

b. NO. Valentino cannot sue Francesco for infringement, because he has already sold the photographs to a magazine.

c. YES. Monaliza can also sue Francesco for violation of her right to privacy.

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