Bar Q and A #45

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1.) In intellectual property cases, fraudulent intent is not an element of the cause of action except in cases involving: a. Trademark infringement b. Copyright infringement c. Patent infringement d. Unfair competition

a. Trademark infringement.

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2.) What is the distinction between trademark infringement and unfair competition?

The distinctions between infringement and unfair competition are the following:
1. Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the passing off of one's goods as those of another.

2. In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition fraudulent intent is essential.

3. In infringement of trademark the prior registration of the trademark is a prerequisite to the action, whereas in unfair competition registration is not necessary. (Del Monte Corp. vs. CA, G.R. No. L-78325, January 25, 1990)

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3.) K-9 Corporation, a foreign corporation alleging itself to be the registered owner of trademark “K-9” and logo “K”, filed an Inter Partes case with the Intellectual Property Office against Kanin Corporation for the cancellation of the latter’s mark “K-9” and logo “K.” During the pendency of the case before the IPO, Kanin Corporation brought suit against K-9 Corporation before the RTC for infringement and damages. Could the action before the RTC prosper? Why?

YES, the action before the RTC can prosper. According to Sec. 151.2 of the IPC, the filing of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. The issues raised before the different the IPO and the RTC are different. The issue raised before the IPO is whether or not the cancellation of the subsequent trademark is proper because of the prior ownership of the disputed mark by K-9. While the issue raised before the RTC pertains to infringement. Furthermore, an action for infringement or unfair competition, as well as the remedy of injunction and relief for damages, is explicitly and unquestionably within the competence and jurisdiction of ordinary courts. (Shangri-la International Hotel Management v. Makati Shangri-la Hotel and Resort Inc., G.R. No. 111580. June 21, 2001)

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4.) After disposing of his last opponent in only two rounds in Las Vegas, the renowned boxer Sonny Bachao arrived at the NAIA met by thousands of hero-worshipping fans and hundreds of media photographers. The following day, a colored photograph of Sonny wearing a black polo short embroidered with the 2-inch Lacoste crocodile logo appeared on the front page of every Philippine newspaper. Lacoste International, the French firm that manufactures Lacoste apparel and owns the Lacoste trademark, decided to cash in on the universal popularity of the boxing icon. It reprinted the photographs, with the permission of the newspaper publishers, and went on a world-wide blitz of print commercials in which Sonny is shown wearing a Lacoste shirt alongside the phrase “Sonny Bachao just loves Lacoste”. When Sonny sees the Lacoste advertisements, he hires you as a lawyer and asks you to sue Lacoste International before a Philippine court: a. For trademark infringement in the Philippines because Lacoste International used his image without his permission. b. For copyright infringement because of the unauthorized use of the published photographs. c. For injunction in order to stop Lacoste International from featuring him in their commercials. Will these actions prosper?

a. Sonny Bachao cannot sue for infringement of trademark. The photographs showing him wearing a Lacoste shirt were not registered as a trademark.

b. Sonny Bachao cannot sue for infringement of copyright for the unauthorized use of the photographs showing him wearing a Lacoste shirt. The copyright to the photographs belong to the newspaper which published them inasmuch as the photographs were the result of the performance of the regular duties of the photographers. Moreover, the newspaper publishers authorized the reproduction of the photographs.

c. The complaint for injunction to stop Lacoste International from featuring him in its advertisements will prosper. This is a violation of subsection 123.4(c) of the IPC and Art. 169 in relation to Article 170 of the RPC.

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5.) Can Lacoste International validly invoke the defense that it is not a Philippine company and, therefore, Philippine courts have no jurisdiction? Explain.

NO. Philippine courts have jurisdiction over it, if it is doing business in the Philippines. Moreover, under Section 133 of the Corporation Code, while a foreign corporation doing business in the Philippines without license to do business, cannot sue or intervene in any action, it may be sued or proceeded against before our courts or administrative tribunal.

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6.) Define Unfair Competition.

Unfair competition is the passing off or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. Passing off takes place where a person, by imitative devices on the general appearance of the goods, misleads prospective purchasers into buying his merchandise under the impression that they are buying that of his competitors. (Republic Gas Corporation v. Petron Corporation, G.R. No. 194062, June 17, 2013)

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7.) In what ways would a case for infringement of trademark be different from a case for unfair competition?

1. In infringement of trademark, prior registration of the trademark is a prerequisite to the action, whereas in unfair competition, trademark registration is not necessary.

2. Trademark infringement is the unauthorized use of the registered trademark, while unfair competition is the passing off of one’s goods as those of another.

3. In infringement of trademark, fraudulent intent is unnecessary, whereas in unfair competition, fraudulent intent is essential.

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8.) In what way is an infringement of a trademark similar to that which pertains to unfair competition?

The similarity lies in both their ability to disrupt fair competition amongst business enterprises and other businesses. They can also create confusion, mistake, and deception as to the minds of the consumers with regard to the source or identity of their products or services due to its similarity in appearance or packaging.

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9.) N Corporation manufactures rubber shoes under the trademark “Jordann” which hit the Philippine Market in 1985, and registered its trademark with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) in 1990. PK Company also manufactures rubber shoes with the trademark “Javorski” which it registered with the BPTTT in 1978. In 1992, PK Company adopted and copied the design of N Corporation’s “Jordann” rubber shoes, both as to shape and color, but retained the trademark “Javorski” on its products. May PK Company be held liable to N Corporation? Explain.

PK may be held liable for unfairly competing against N Corporation. By copying the design, shape and color of N’s “Jordann” rubber shoes and using the same in its rubber shoes trademarked “Javorski”, PK is obviously trying to pass off its shoes for those of N. It is of no moment that the trademark “Javorski” was registered ahead of the trademark “Jordann”. Priority in registration is not material in an action for infringement of trademark. The basis of an action for unfair competition is confusing and misleading similarly in general appearance, not similarity of trademarks.

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10.) X, a dealer of low grade oil, to save on expenses, uses the containers of different companies. Before marketing to the public his low grade oil, X totally obliterates and erases the brands or marks stenciled on the containers. Y brings an action against X for unfair competition upon its discovery that its containers have been used by X for his low grade oil. Is there unfair competition? State briefly your reasons.

There is no unfair competition, unfair competition is passing off of one’s goods as those of another and requires fraudulent intent on the part of the user. These elements are not present in the problem.

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