IPL Class Atty. Vera, Assignments for September 30 and August 7,
2014: Assignment for September 30 and October 7, 2014
ASSIGNMENT FOR SEPTEMBER 30, 2014
Continuation of Trademarks
False Designation
Sec. 169
Espiritu, et. al. vs. Petron Corporation, G.R. No. 170891,
November 24, 2009
Criminal Penalties
Sec. 170
Manolo Samson vs. Caterpillar, G.R. No. 169882, August 12,
2007
Levis Strauss vs. Tony Lim, G.R. No. 162311, December 4,
2008
Sketchers, USA vs. Inter Pacific Industrial, G.R. NO. 164321,
March 23, 2011
PATENTS
Definitions
Sec. 20 & 21
Restrictions
Sec. 22
Patentability
Subject Matter
Diamond vs. Chakrabarty, 447 US 303 LINK
Novelty
Sec. 23
Rosaire vs. National Lead Co., 218 F.2d 72 LINK
Inventive Step
Sec 26
Aguas vs. De Leon, G.R. No. L-32160, January 30, 1982
Industrial Applicability
Sec. 27
Brenner vs. Manson, 383 US 519 LINK
Juicy Whip vs. Orange Bang, 185 F.3d 1364 LINK
Enablement
Priority
Sec. 31
Application
Secs. 32 to 39
Duration
Sec. 54
Cancellation
Sec. 61
Manzano vs. CA & Madolaria, G.R. No. G.R. No. 113388.
September 5, 1997
SECOND DIVISIONMANUEL C. ESPIRITU, JR., AUDIEG.R. No.
170891LLONA, FREIDA F. ESPIRITU,CARLO F. ESPIRITU, RAFAEL
F.ESPIRITU, ROLANDO M. MIRABUNA,HERMILYN A. MIRABUNA, KIMROLAND A.
MIRABUNA, KAYEANN A. MIRABUNA, KEN RYAN A.MIRABUNA, JUANITO P.
DECASTRO, GERONIMA A. ALMONITEand MANUEL C. DEE, who are
theofficers and directors of BICOL GASREFILLING PLANT
CORPORATION,Petitioners,Present:
Carpio,J., Chairperson,
- versus -Leonardo-De Castro,Brion,Del Castillo,
andAbad,JJ.PETRON CORPORATION andCARMEN J. DOLOIRAS, doingbusiness
under the name KRISTINAPromulgated:PATRICIA
ENTERPRISES,Respondents.November 24, 2009x
----------------------------------------------------------------------------------------
xDECISIONABAD,J.:
This case is about the offense or offenses that arise from the
reloading of the liquefied petroleum gas cylinder container of one
brand with the liquefied petroleum gas of another brand.The Facts
and the CaseRespondent Petron Corporation (Petron) sold and
distributed liquefied petroleum gas (LPG) in cylinder tanks that
carried its trademark Gasul.[1]Respondent Carmen J. Doloiras owned
and operated Kristina Patricia Enterprises (KPE), the exclusive
distributor of Gasul LPGs in the whole of Sorsogon.[2]Jose Nelson
Doloiras (Jose) served as KPEs manager.Bicol Gas Refilling Plant
Corporation (Bicol Gas) was also in the business of selling and
distributing LPGs in Sorsogon but theirs carried the trademark
Bicol Savers Gas.Petitioner Audie Llona managed Bicol Gas.In the
course of trade and competition, any given distributor of LPGs at
times acquired possession of LPG cylinder tanks belonging to other
distributors operating in the same area.They called these captured
cylinders.According to Jose, KPEs manager, in April 2001 Bicol Gas
agreed with KPE for the swapping of captured cylinders since one
distributor could not refill captured cylinders with its own brand
of LPG.At one time, in the course of implementing this arrangement,
KPEs Jose visited the Bicol Gas refilling plant.While there, he
noticed several Gasul tanks in Bicol Gas possession.He requested a
swap but Audie Llona of Bicol Gas replied that he first needed to
ask the permission of the Bicol Gas owners.That permission was
given and they had a swap involving around 30 Gasul tanks held by
Bicol Gas in exchange for assorted tanks held by KPE.KPEs Jose
noticed, however, that Bicol Gas still had a number of Gasul tanks
in its yard.He offered to make a swap for these but Llona declined,
saying the Bicol Gas owners wanted to send those tanks to
Batangas.Later Bicol Gas told Jose that it had no more Gasul tanks
left in its possession.Jose observed on almost a daily basis,
however, that Bicol Gas trucks which plied the streets of the
province carried a load of Gasul tanks.He noted that KPEs volume of
sales dropped significantly from June to July 2001.On August 4,
2001 KPEs Jose saw a particular Bicol Gas truck on theMaharlika
Highway.While the truck carried mostly Bicol Savers LPG tanks, it
had on it one unsealed 50-kg Gasul tank and one 50-kg Shellane
tank.Jose followed the truck and when it stopped at a store, he
asked the driver, Jun Leorena, and the Bicol Gas sales
representative, Jerome Misal, about the Gasul tank in their
truck.They said it was empty but, when Jose turned open its valve,
he noted that it was not.Misal and Leorena then admitted that the
Gasul and Shellane tanks on their truck belonged to a customer who
had them filled up by Bicol Gas.Misal then mentioned that his
manager was a certain Rolly Mirabena.Because of the above incident,
KPE filed a complaint[3]for violations of Republic Act (R.A.) 623
(illegally filling up registered cylinder tanks), as amended, and
Sections 155 (infringement of trade marks) and 169.1 (unfair
competition) of the Intellectual Property Code (R.A. 8293).The
complaint charged the following: Jerome Misal, Jun Leorena, Rolly
Mirabena, Audie Llona, and several John and Jane Does, described as
the directors, officers, and stockholders of Bicol Gas.These
directors, officers, and stockholders were eventually identified
during the preliminary investigation.Subsequently, the provincial
prosecutor ruled that there was probable cause only for violation
of R.A. 623 (unlawfully filling up registered tanks) and that only
the four Bicol Gas employees, Mirabena, Misal, Leorena, and
petitioner Llona, could be charged.The charge against the other
petitioners who were the stockholders and directors of the company
was dismissed.Dissatisfied, Petron and KPE filed a petition for
review with the Office of the Regional State Prosecutor, Region V,
which initially denied the petition but partially granted it on
motion for reconsideration.The Office of the Regional State
Prosecutor ordered the filing of additional informations against
the four employees of Bicol Gas for unfair competition.It ruled,
however, that no case for trademark infringement was present.The
Secretary of Justice denied the appeal of Petron and KPE and their
motion for reconsideration.Undaunted, Petron and KPE filed a
special civil action forcertiorariwith the Court of Appeals[4]but
the Bicol Gas employees and stockholders concerned opposed it,
assailing the inadequacy in its certificate of non-forum shopping,
given that only Atty. Joel Angelo C. Cruz signed it on behalf of
Petron.In its Decision[5]dated October 17, 2005, the Court of
Appeals ruled, however, that Atty. Cruzs certification constituted
sufficient compliance.As to the substantive aspect of the case, the
Court of Appeals reversed the Secretary of Justices ruling.It held
that unfair competition does not necessarily absorb trademark
infringement.Consequently, the court ordered the filing of
additional charges of trademark infringement against the concerned
Bicol Gas employees as well.Since the Bicol Gas employees
presumably acted under the direct order and control of its owners,
the Court of Appeals also ordered the inclusion of the stockholders
of Bicol Gas in the various charges, bringing to 16 the number of
persons to be charged, now including petitioners Manuel C.
Espiritu, Jr., Freida F. Espiritu, Carlo F. Espiritu, Rafael F.
Espiritu, Rolando M. Mirabuna, Hermilyn A. Mirabuna, Kim Roland A.
Mirabuna, Kaye Ann A. Mirabuna, Ken Ryan A. Mirabuna, Juanito P. de
Castro, Geronima A. Almonite, and Manuel C. Dee (together with
Audie Llona), collectively, petitioners Espiritu,et al.The court
denied the motion for reconsideration of these employees and
stockholders in its Resolution dated January 6, 2006, hence, the
present petition for review[6]before this Court.The Issues
PresentedThe petition presents the following issues:1.Whether or
not the certificate of non-forum shopping that accompanied the
petition filed with the Court of Appeals, signed only by Atty. Cruz
on behalf of Petron, complied with what the rules require;2.Whether
or not the facts of the case warranted the filing of charges
against the Bicol Gas people for:a)Filling up the LPG tanks
registered to another manufacturer without the latters consent in
violation of R.A. 623, as amended;b)Trademark infringement
consisting in Bicol Gas use of a trademark that is confusingly
similar to Petrons registered Gasul trademark in violation of
section 155 also of R.A. 8293; andc)Unfair competition consisting
in passing off Bicol Gas-produced LPGs for Petron-produced Gasul
LPG in violation of Section 168.3 of R.A. 8293.The Courts
RulingsFirst.Petitioners Espiritu,et al. point out that the
certificate of non-forum shopping that respondents KPE and Petron
attached to the petition they filed with the Court of Appeals was
inadequate, having been signed only by Petron, through Atty.
Cruz.But, while procedural requirements such as that of submittal
of a certificate of non-forum shopping cannot be totally
disregarded, they may be deemed substantially complied with under
justifiable circumstances.[7]One of these circumstances is where
the petitioners filed a collective action in which they share a
common interest in its subject matter or raise a common cause of
action.In such a case, the certification by one of the petitioners
may be deemed sufficient.[8]Here, KPE and Petron shared a common
cause of action against petitioners Espiritu,et al., namely, the
violation of their proprietary rights with respect to the use of
Gasul tanks and trademark.Furthermore, Atty. Cruz said in his
certification that he was executing it for and on behalf of the
Corporation, and co-petitioner Carmen J. Doloiras.[9]Thus, the
object of the requirement to ensure that a party takes no recourse
to multiple forums was substantially achieved.Besides, the failure
of KPE to sign the certificate of non-forum shopping does not
render the petition defective with respect to Petron which signed
it through Atty. Cruz.[10]The Court of Appeals, therefore, acted
correctly in giving due course to the petition before it.Second.The
Court of Appeals held that under the facts of the case, there is
probable cause that petitioners Espiritu,et al. committed all three
crimes: (a) illegally filling up an LPG tank registered to Petron
without the latters consent in violation of R.A. 623, as amended;
(b) trademark infringement which consists in Bicol Gas use of a
trademark that is confusingly similar to Petrons registered Gasul
trademark in violation of Section 155 of R.A. 8293; and (c) unfair
competition which consists in petitioners Espiritu,et al. passing
off Bicol Gas-produced LPGs for Petron-produced Gasul LPG in
violation of Section 168.3 of R.A. 8293.Here, the complaint adduced
at the preliminary investigation shows that the one 50-kg Petron
Gasul LPG tank found on the Bicol Gas truck belonged to [a Bicol
Gas] customer who had the same filled up by BICOL GAS.[11]In other
words, the customer had that one Gasul LPG tank brought to Bicol
Gas for refilling and the latter obliged.R.A. 623, as
amended,[12]punishes any person who, without the written consent of
the manufacturer or seller of gases contained in duly registered
steel cylinders or tanks, fills the steel cylinder or tank, for the
purpose of sale, disposal or trafficking, other than the purpose
for which the manufacturer or seller registered the same.This was
what happened in this case, assuming the allegations of KPEs
manager to be true.Bicol Gas employees filled up with their firms
gas the tank registered to Petron and bearing its mark without the
latters written authority.Consequently, they may be prosecuted for
that offense.But, as for the crime of trademark infringement,
Section 155 of R.A. 8293 (in relation to Section 170[13]) provides
that it is committed by any person who shall, without the consent
of the owner of the registered mark:1.Use in commerce any
reproduction, counterfeit, copy or colorable imitation of a
registered mark or the same container or a dominant feature thereof
in connection with the sale, offering for sale, distribution,
advertising of any goods or services including other preparatory
steps necessary to carry out the sale of any goods or services on
or in connection with which such use is likely to cause confusion,
or to cause mistake, or to deceive; or2.Reproduce, counterfeit,
copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles
or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or
advertising of goods or services on or in connection with which
such use is likely to cause confusion, or to cause mistake, or to
deceive.KPE and Petron have to show that the alleged infringer, the
responsible officers and staff of Bicol Gas, used Petrons Gasul
trademark or a confusingly similar trademark on Bicol Gas tanks
with intent to deceive the public and defraud its competitor as to
what it is selling.[14]Examples of this would be the acts of an
underground shoe manufacturer in Malabon producing Nike branded
rubber shoes or the acts of a local shirt company with no
connection to La Coste, producing and selling shirts that bear the
stitched logos of an open-jawed alligator.Here, however, the
allegations in the complaint do not show that Bicol Gas painted on
its own tanks Petrons Gasul trademark or a confusingly similar
version of the same to deceive its customers and cheat
Petron.Indeed, in this case, the one tank bearing the mark of
Petron Gasul found in a truck full of Bicol Gas tanks was a genuine
Petron Gasul tank, more of a captured cylinder belonging to
competition.No proof has been shown that Bicol Gas has gone into
the business of distributing imitation Petron Gasul LPGs.As to the
charge of unfair competition, Section 168.3 (a) of R.A. 8293 (also
in relation to Section 170) describes the acts constituting the
offense as follows:168.3.In particular, and without in any way
limiting the scope of protection against unfair competition, the
following shall be deemed guilty of unfair competition:
(a)Any person, who is selling his goods and gives them the
general appearance of goods of another manufacturer or dealer,
either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words
thereon, or in any 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;
Essentially, what the law punishes is the act of giving ones
goods the general appearance of the goods of another, which would
likely mislead the buyer into believing that such goods belong to
the latter.Examples of this would be the act of manufacturing or
selling shirts bearing the logo of an alligator, similar in design
to the open-jawed alligator in La Coste shirts, except that the jaw
of the alligator in the former is closed, or the act of a producer
or seller of tea bags with red tags showing the shadow of a black
dog when his competitor is producing or selling popular tea bags
with red tags showing the shadow of a black cat.Here, there is no
showing that Bicol Gas has been giving its LPG tanks the general
appearance of the tanks of Petrons Gasul.As already stated, the
truckfull of Bicol Gas tanks that the KPE manager arrested on a
road in Sorsogon just happened to have mixed up with them one
authentic Gasul tank that belonged to Petron.The only point left is
the question of the liability of the stockholders and members of
the board of directors of Bicol Gas with respect to the charge of
unlawfully filling up a steel cylinder or tank that belonged to
Petron.The Court of Appeals ruled that they should be charged along
with the Bicol Gas employees who were pointed to as directly
involved in overt acts constituting the offense.Bicol Gas is a
corporation.As such, it is an entity separate and distinct from the
persons of its officers, directors, and stockholders.It has been
held, however, that corporate officers or employees, through whose
act, default or omission the corporation commits a crime, may
themselves be individually held answerable for the crime.[15]Jose
claimed in his affidavit that, when he negotiated the swapping of
captured cylinders with Bicol Gas, its manager, petitioner Audie
Llona, claimed that he would be consulting with the owners of Bicol
Gas about it.Subsequently, Bicol Gas declined the offer to swap
cylinders for the reason that the owners wanted to send their
captured cylinders to Batangas.The Court of Appeals seized on this
as evidence that the employees of Bicol Gas acted under the direct
orders of its owners and that the owners of Bicol Gas have full
control of the operations of the business.[16]The owners of a
corporate organization are its stockholders and they are to be
distinguished from its directors and officers.The petitioners here,
with the exception of Audie Llona, are being charged in their
capacities as stockholders of Bicol Gas.But the Court of Appeals
forgets that in a corporation, the management of its business is
generally vested in its board of directors, not its
stockholders.[17]Stockholders are basically investors in a
corporation.They do not have a hand in running the day-to-day
business operations of the corporation unless they are at the same
time directors or officers of the corporation.Before a stockholder
may be held criminally liable for acts committed by the
corporation, therefore, it must be shown that he had knowledge of
the criminal act committed in the name of the corporation and that
he took part in the same or gave his consent to its commission,
whether by action or inaction.The finding of the Court of Appeals
that the employees could not have committed the crimes without the
consent, [abetment], permission, or participation of the owners of
Bicol Gas[18]is a sweeping speculation especially since, as
demonstrated above, what was involved was just one Petron Gasul
tank found in a truck filled with Bicol Gas tanks.Although the KPE
manager heard petitioner Llona say that he was going to consult the
owners of Bicol Gas regarding the offer to swap additional captured
cylinders, no indication was given as to which Bicol Gas
stockholders Llona consulted.It would be unfair to charge all the
stockholders involved, some of whom were proved to be minors.[19]No
evidence was presented establishing the names of the stockholders
who were charged with running the operations of Bicol Gas.The
complaint even failed to allege who among the stockholders sat in
the board of directors of the company or served as its officers.The
Court of Appeals of course specifically mentioned petitioner
stockholder Manuel C. Espiritu, Jr. as the registered owner of the
truck that the KPE manager brought to the police for investigation
because that truck carried a tank of Petron Gasul.But the act that
R.A. 623 punishes is the unlawful filling up of registered tanks of
another.It does not punish the act of transporting such tanks.And
the complaint did not allege that the truck owner connived with
those responsible for filling up that Gasul tank with Bicol Gas
LPG.WHEREFORE, the CourtREVERSES and SETS ASIDEthe Decision of the
Court of Appeals in CA-G.R. SP 87711 dated October 17, 2005 as well
as its Resolution dated January 6, 2006, the Resolutions of the
Secretary of Justice dated March 11, 2004 and August 31, 2004, and
the Order of the Office of the Regional State Prosecutor, Region V,
dated February 19, 2003.The CourtREINSTATESthe Resolution of the
Office of the Provincial Prosecutor of Sorsogon in I.S. 2001-9231
(inadvertently referred in the Resolution itself as I.S.
2001-9234), dated February 26, 2002.The names of petitioners Manuel
C. Espiritu, Jr., Freida F. Espititu, Carlo F. Espiritu, Rafael F.
Espiritu, Rolando M. Mirabuna, Hermilyn A. Mirabuna, Kim Roland A.
Mirabuna, Kaye Ann A. Mirabuna, Ken Ryan A. Mirabuna, Juanito P. De
Castro, Geronima A. Almonite and Manuel C. Dee areORDEREDexcluded
from the charge.SO ORDERED.THIRD DIVISIONMANOLO P.
SAMSON,Petitioner,-versus-CATERPILLAR, INC.,Respondent.G.R. No.
169882
Present:YNARES-SANTIAGO,J.,Chairperson,AUSTRIA-MARTINEZ,CHICO-NAZARIO,NACHURA,
andREYES,JJ.Promulgated:September 12, 2007
x - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - -
- - - - - - - - - - - - - - - - - xD E C I S I O
NCHICO-NAZARIO,J.:This is a Petition for Review onCertiorariunder
Rule 45 of the Rules of Court, assailing the Amended
Decision[1]dated 8 August 2005, rendered by the Court of Appeals in
CA-G.R. SP No. 80532, (1) reversing its Decision,[2]dated 13
December 2004, in which it set aside the Order dated 31 January
2003 of Branch 211 of theMandaluyongRegional Trial Court (RTC),
dismissing Criminal Case No. MC02-5019 filed against
petitionerManoloP. Samson (Samson) for violation of Republic Act
No. 8293, otherwise known as the Intellectual Property Code of the
Philippines, specifically Section 168.3(a) on Unfair Competition,
Section 123.1 (e) and Section 131.3 on registration of trademarks,
in relation to Section 170 thereof; and (2) directing
theMandaluyongRTC to conduct an independent assessment of whether
the Motion to Withdraw Information filed by the state prosecutor is
warranted.Samson is the owner of retail outlets within
thePhilippines, which sell, among other things, footwear, clothing,
bags and other similar items, bearing the mark Caterpillar and
Cat.Samson registered the aforementioned marks for shoes, slippers,
sandals and boots with the Bureau of Patents, Trademarks &
Technology Transfer (whose functions are presently exercised by
Intellectual Property Office) in 1997.[3]Caterpillar is a foreign
corporation, primarily in the business of manufacturing equipment
used in construction, mining, road building and agricultural
industries.Since the 1960s, however, it had expanded its product
line to clothing and, since 1988, to footwear.Caterpillar alleges
that it is a widely known brand name and that its products are
being internationally distributed.[4]As early as26 July 2000,
Branch 56 of theMakatiRTC,issued Search Warrants No. 00-022 to No.
00-032 against establishments owned by Samson.This led to the
seizure of various retail items such as footwear, clothing,
accessories, andleatherwarefor Unfair Competition under the
Intellectual Property Code.Caterpillar filed criminal complaints
before the Department of Justice (DOJ).In addition, Caterpillar
filed a civil action on31 July 2000, heard before Branch 90 of
theQuezonCity RTC for Unfair Competition, Damages and Cancellation
of Trademark with an Application for a Temporary Restraining Order
and/or Writ of Preliminary Injunction docketed as Civil Case
No.Q-00-41445.[5]Since Samson allegedly continued to sell and
distribute merchandise which bore the disputed Caterpillar marks,
Caterpillar sought the issuance of another set of search warrants
against Samson.On18 December 2000, Branch 172 of the Valenzuela RTC
in Search Warrants No. 12-V-00 to No. 37-V-00 issued 26 writs of
search warrants under which various clothing items were seized by
National Bureau of Investigation (NBI) agents as evidence of
violations of the law on unfair competition.On23 January 2001,
Caterpillar, through its legal counsel, filed 26 criminal
complaints against Samson before the DOJ, for alleged violations of
Section 168.3(a) on Unfair Competition, Section 123.1(e) and
Section 131.3 on registration of trademarks, in relation to Section
170 of the Intellectual Property Code.[6]The complaints were
docketed as I.S. Nos. 2001-42 to 2001-67 and assigned to State
ProsecutorZenaidaLim of the Task Force on Anti-Intellectual
Property Piracy.But before the determination by the DOJ on whether
Samson should be criminally charged with Unfair Competition,the
Valenzuela RTC already issued an Order, dated26 June 2001, quashing
the search warrants issued in Search Warrants No. 12-V-00 to No.
37-V-00.[7]The DOJ, through State Prosecutor Lim, subsequently
issued a Joint Resolution, dated 28 September 2001, recommending
that Samson be criminally charged with unfair competition under
Section 168.3(a), in relation to Section 131.1, 123.1 and 170 of
the Intellectual Property Code.Resulting from the said Resolution,
Criminal Case No.MC02-5019 was filed with
theMandaluyongRTC.[8]Samson filed a Petition for Review of the
foregoing Joint Resolution, with the Secretary of Justice.His
petition was granted.In a Resolution dated13 January 2003, the
Acting Secretary of Justice,MerceditasGutierrez, recommended the
withdrawal of the criminalinformationsfiled against Samson before
various courts on the ground that there was lack of probable
cause.Caterpillar filed a Motion for Reconsideration, which was
denied by Acting Secretary of Justice Gutierrez on25 September
2003.An appeal questioning the DOJ Resolution dated13 January
2003of Acting Secretary of Justice Gutierrez was filed by
Caterpillar before the Court of Appeals docketed as CA-G.R. No.
79937.[9]Meanwhile, pursuant to the Resolution dated13 January
2003of Acting Secretary of Justice Gutierrez, State Prosecutor Lim
filed anExParteMotion to Withdraw Information in Criminal Case
No.MC02-5019 before theMandaluyongRTC.On31 January 2003,
theMandaluyongRTC issued an Order granting the withdrawal of the
Information against Samson.[10]The entire text of the said Decision
reads:
This refers to the Ex-ParteMotion to Withdraw Information filed
onJanuary 31, 2003by State ProsecutionZenaidaM. Lim of the
Department of Justice in connection with Resolution No. 011, Series
of 2003,datedJanuary 13, 2003of the Acting Secretary of Justice
Ma.MerceditasN. Gutierrez reversing and setting aside the
resolution of said state prosecutor and directed the Chief State
ProsecutorJovencitoR.Zuoto withdraw theinformationsfiled in this
court againstManoloSamson.
WHEREFORE, finding the said motion to be in order and it
appearing that accused has not yet been arraigned and therefore the
court has not yet acquired jurisdiction over the subject accused,
the court hereby grants the withdrawal of the information in the
above-entitled case as it is hereby ordered withdrawn form the
record files of the court.[11]Caterpillar filed a Motion for
Reconsideration, which was denied by theMandaluyongRTC in an Order
dated27 August 2003:For resolution is a Motion for Reconsideration
of the order of the court datedJanuary 31, 2003granting the
withdrawal of the information from the record files of the court,
filed onFebruary 21, 2003, by the plaintiff in the above-entitled
case.
Hearing on the motion together with the opposition thereto was
held after which, the same was submitted for resolution.
After the court examined with great care the bases advanced by
both parties in the aforesaid motion, the court was unable to find
any cogent justification to overturn or set aside its previous
order, there being no new issues raised and the same are rehash of
its previous pleadings.
WHEREFORE, premises considered, plaintiffs Motion for
Reconsideration is hereby DENIED.[12]
Caterpillar filed with the Court of Appeals a Petition
forCertiorariunder Rule 65 of the Rules of Court, assailing the
Order dated31 January 2003of theMandaluyongRTC, docketed as CA-G.R.
SP No. 80532.The Court of Appeals, in a Decision dated13 December
2004, dismissed the Petition on the ground that Caterpillar lacked
the legal standing to question the proceedings involving the
criminal aspect of the case, and that its participation is limited
only to the recovery of civil liability.The appellate court also
took into account the denial by the Acting Secretary of Justice
Gutierrez of Caterpillars Motion for Reconsideration of her order
to withdraw theInformationsagainst Samson and, thus, ruled that
this rendered the case moot and academic.[13]Caterpillar filed a
Motion for Reconsideration of the aforementioned Decision rendered
by the Court of Appeals.In its Amended Decision dated 8 August
2005, the Court of Appeals reversed its earlier ruling and declared
that theMandaluyongRTC gravely abused its discretion when it merely
relied on the Resolution, dated 13 January 2003 of Acting Secretary
of Justice Gutierrez in ordering the withdrawal of the information
filed before it without making an independent assessment of the
case.[14]In thedispositiveportion of its Amended Decision, the
Court of Appeals ruled that:
WHEREFORE, in view [of] the foregoingrationications, the
petitioners Motion for Reconsideration is hereby GRANTED.The
decision of this Court dated 13 December 2004, as well as the
assailed orders of the respondent court dated 31 January 2003 and
27 August 2003 are hereby REVERSED and SET ASIDE.
The respondent court is hereby ordered to CONDUCT an independent
assessment of whether the motion to withdraw information filed by
the state prosecutor is warranted under the circumstances obtaining
in the case.[15]
Samson filed with the Court of Appeals a Motion for
Reconsideration of the Amended Decision, dated8 August 2005, which
was denied on27 September 2005.Hence, the present Petition, where
he is raising thefollowing issues:I
THE COURT OF APPEALS GROSSLY ERRED IN RULING THAT THE RESPONDENT
JUDGE IN CA-G.R. NO. SP 80532 FAILED IN HER BOUNDEN DUTY TO
DETERMINE THE MERITS OF THE PROSECUTIONS EX-PARTE MOTION TO
WITHDRAW; and
II
THE COURT OF APPEALS LIKEWISE ERRED IN IGNORING ITS OWN DECISION
FINDING RESPONDENT CATERPILLAR, INC., AS PRIVATE COMPLAINANT,
BEREFT OF AUTHORITY TO ASSAIL THE STATE PROSECUTORS EX-PARTE MOTION
TO WITHDRAW THE INFORMATION BECAUSE THE CRIMINAL ASPECT OF A
CRIMINAL CASE IS UNDER THE DIRECTION AND CONTROL OF THE PROSECUTION
AND, CONSEQUENTLY, PRIVATE COMPLAINANT HAS NO BUSINESS WHATSEOEVER
IN THE PROCEEDINGS.[16]
Before discussing the merits of the Petition at bar, this Court
notes that on15 February 2005, the Court of Appeals rendered a
Decision in CA-G.R. SP No. 79937 in favor of Caterpillar.To recall,
this was the petition filed by Caterpillar to assail the Resolution
of Acting Secretary of Justice Gutierrez dated13 January 2003,
directing the Chief State Prosecutor to cause the withdrawal
ofInformationsagainst Samson.The appellate court reversed said
Resolution and pronounced that sufficient probable cause existed to
justify the filing ofInformationsagainst Samson.Thus, it ordered
the re-filing of theInformationsbefore the proper trial
courts.[17]In its Decision in CA-G.R. SP No. 79937, the Court of
Appeals held that the withdrawal of theInformationsagainst Samson,
predicated on thequashalof the search warrants, was a manifest
error.Consistent with the doctrine laid out inSolid Triangle Sales
Corporation v. The Sheriff of RTC,QuezonCity, Branch 93,[18]the
appellate court ruled that the earlier finding of probable cause
against Samson was not affected by thequashalof the warrants since
independent evidence gathered by the NBI from the 24 test-buy
operations it conducted in 1999 is sufficient to support such
finding.It reiterated the findings of State Prosecutor
Lim:Respondents use of depictions of heavy machinery and equipment,
such as tractors, to market his products, would verily show that he
is passing off his products as those of Caterpillars xxx.
Meanwhile, the similarity in the appearance of the goods
manufactured or sold by respondent with those of Caterpillars
footwear products would demonstrate that he is passing off his
product as those of genuine Caterpillar footwear
products.Accordingly, where the similarity in the appearance of the
goods as packed and offered for sale is so striking, this fact
shows intent on the part of defendant to deceive the public and
defraud plaintiff out of his trade.The intent to deceive may be
inferred from the similarity of the goods as packed and offered for
sale, and an action will lie to restrain such unfair competition
and for damages. xxx[19].
On appeal docketed as G.R. No. 169199, this Court ruled that the
Court of Appeals did not commit any reversible error.By sustaining
the Decision of the Court of Appeals in said case, this Court, in a
Resolution dated17 October 2005, had already ruled that probable
cause exists for the re-filing of a criminal case against Samson
for unfair competition under the Intellectual Property Code.Samson
filed a Motion for Reconsideration of this Courts Resolution, which
was denied with finality on20 March 2006.Entry of judgment was
already made in said case on18 April 2006; hence, rendering said
judgment final andexecutory.The repeated confirmation of the
finding of probable cause against Samson, which this Court cannot
now overturn, effectively and decisively determines the issues in
this petition.The findings of the Court of Appeals in CA-G.R. SP
No. 79937, affirmed by this Court in G.R. No. 169199, have rendered
the present petition moot and academic.It is a rule that is
unanimously observed that courts of justice will take cognizance
only ofjusticiablecontroversies wherein actual and not merely
hypothetical issues are involved.[20]A case becomes moot and
academic when there is no more actual controversy between the
parties and no useful purpose can be served in passing upon the
merits.[21]Since this Court, in affirming the said Decision of the
Court of Appeals, already found it imperative for the Chief State
Prosecutor to re-file theInformationsagainst Samson for unfair
competition, Criminal Case No. MC02-5019 should be re-opened and
heard by theMandaluyongRTC.The rendering of a decision on the
merits of this case would be of no practical value.Hence, this case
is dismissible.[22]IN VIEW OF THE FOREGOING, the instant Petition
isDENIEDand the assailed Amended Decision of the Court of Appeals
in CA-G.R. SP No. 80532, promulgated on8 August 2005, isAFFIRMED
WITH MODIFICATION.The Order of the Court of Appeals in C.A.-G.R. SP
No. 80532 directing Branch 211 of theMandaluyongRegional Trial
Court to conduct an independent assessment is REVERSED.This
CourtORDERSBranch 211 of theMandaluyongRegional Trial Court to
re-open and hear Criminal Case No.MC02-5019.Costs against the
petitioner.SO ORDERED.Republic of thePhilippinesSupreme
CourtManilaTHIRD DIVISIONLEVI STRAUSS (PHILS.), INC.,G.R. No.
162311Petitioner,Present:YNARES-SANTIAGO,J.,Chairperson,-versus-AUSTRIA-MARTINEZ,CHICO-NAZARIO,NACHURA,
andREYES,JJ.Promulgated:TONY LIM,Respondent.December 4, 2008x - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - xD E C I S I O NREYES, R.T.,J.:THE remedy
of a party desiring to elevate to the appellate court an adverse
resolution of the Secretary of Justice is a petition
forcertiorariunder Rule 65.A Rule 43 petition for review is a wrong
mode of appeal.[1]During preliminary investigation, the prosecutor
is vested with authority and discretion to determine if there is
sufficient evidence to justify the filing of an information.If he
finds probable cause to indict the respondent for a criminal
offense, it is his duty to file the corresponding information in
court.However, it is equally his duty not to prosecute when after
an investigation, the evidence adduced is not sufficient to
establish aprima faciecase.[2]Before the Court is a petition for
review oncertiorari[3]of the Decision[4]and Resolution[5]of the
Court of Appeals (CA), affirming the resolutions of the Department
of Justice (DOJ) finding that there is no probable cause to indict
respondent Tony Lim, a.k.a. Antonio Guevarra, for unfair
competition.The FactsPetitioner Levi Strauss (Phils.), Inc. is a
duly-registered domestic corporation.It is a wholly-owned
subsidiary of Levi Strauss & Co. (LS & Co.)
aDelaware,USAcompany.In 1972, LS & Co. granted petitioner a
non-exclusive license to use its registered trademarks and trade
names[6]for the manufacture and sale of various garment products,
primarily pants, jackets, and shirts, in the
Philippines.[7]Presently, it is the only company that has authority
to manufacture, distribute, and sell products bearing the LEVIS
trademarks or to use such trademarks in thePhilippines.These
trademarks are registered
in over 130 countries, including thePhilippines,[8]and were
first used in commerce in thePhilippinesin 1946.[9]Sometime in
1995, petitioner lodged a complaint[10]before the Inter-Agency
Committee on Intellectual Property Rights, allegingthatacertain
establishment in Metro Manila was manufacturing garments using
colorable imitations of the LEVIS trademarks.[11]Thus, surveillance
was conducted on the premises of respondent Tony Lim, doing
business under the name Vogue Traders Clothing Company.[12]The
investigation revealed that respondent was engaged in the
manufacture, sale, and distribution of products similar to those of
petitioner and under the brand name LIVES.[13]OnDecember 13, 1995,
operatives of the Philippine National Police (PNP) Criminal
Investigation Unit[14]served search warrants[15]on respondents
premises at 1042 and1082 Carmen Planas Street, Tondo,Manila.As a
result, several items[16]were seized from the
premises.[17]ThePNPCriminal Investigation Command (PNPCIC) then
filed a complaint[18]against respondent before the DOJ for unfair
competition[19]under the old Article 189 of the Revised Penal Code,
prior to its repeal by Section 239 of Republic Act (RA) No.
8293.[20]ThePNPCIC claimed that a confusing similarity could be
noted between petitioners LEVIs jeans and respondents LIVES denim
jeans and pants.In his counter-affidavit,[21]respondent alleged,
among others, that(1) his products bearing the LIVES brand name are
not fake LEVIS garments; (2) LIVES is a registered
trademark,[22]while the patch pocket design for LIVES pants has
copyright registration,[23]thus conferring legal protection on his
own intellectual property rights, which stand on equal footing as
LEVIS; (3) confusing similarity, the central issue in the trademark
cancellation proceedings[24]lodged by petitioner, is a prejudicial
question that complainant, the police, and the court that issued
the search warrants cannot determine without denial of due process
or encroachment on the jurisdiction of the agencies concerned; and
(4) his goods are not clothed with an appearance which is likely to
deceive the ordinary purchaser exercising ordinary care.[25]In its
reply-affidavit, petitioner maintained that there is likelihood of
confusion between the competing products because: (1) a slavish
imitation of petitioners arcuate trademark has been stitched on the
backpocket of LIVES jeans; (2) the appearance of the mark 105 on
respondents product is obviously a play on petitioners 501
trademark; (3) the appearance of the word/phrase LIVES and LIVES
ORIGINAL JEANS is confusingly similar to petitioners LEVIS
trademark; (4) a red tab, made of fabric, attached at the left seam
of the right backpocket of petitioners standard five-pocket jeans,
also appears at the same place on LIVES jeans; (5) the patch used
on LIVES jeans (depicting three men on each side attempting to pull
apart a pair of jeans) obviously thrives on petitioners own patch
showing two horses being whipped by two men in an attempt to tear
apart a pair of jeans; and (6) LEVIS jeans are packaged and sold
with carton tickets, which are slavishly copied by respondent in
his own carton ticket bearing the marks LIVES, 105, the horse mark,
and basic features of petitioners ticket designs, such as two red
arrows curving and pointing outward, the arcuate stitching pattern,
and a rectangular portion with intricate border orientation.[26]DOJ
RulingsOnOctober 8, 1996, Prosecution Attorney Florencio D. Dela
Cruz recommended the dismissal[27]of the complaint.The prosecutor
agreed with respondent that his products are not clothed with an
appearance which is likely to deceive the ordinary purchaser
exercising ordinary care.The recommendation was approved by
Assistant Chief State Prosecutor Lualhati R. Buenafe.On appeal,
then DOJ Secretary Teofisto Guingona affirmed the prosecutors
dismissalofthecomplaint onJanuary 9, 1998.[28]Prescinding from the
basic rule that to be found guilty of unfair competition, a person
shall, by imitation or any unfair device, induce the public to
believe that his goods are those of another, Secretary Guingona
stated:In the case at bar, complainant has not shown that anyone
was actually deceived by respondent.Respondents product, which
bears the trademark LIVEs, has an entirelydifferent spelling and
meaningwith the trademark owned by complainant which is LEVIs.
Complainants trademark comes from a Jewish name while that of
respondent is merely an adjective word. Both, when read and
pronounced, would resonate different sounds. While respondents
LIVEs trademark may appear similar, such could not have been
intended by the respondent to deceive since he had the same
registered with the appropriate government agencies.
Grantingarguendo, that respondents trademark or products possessed
similar characteristics with the trademark and products of
complainant, on that score alone, without evidence or proof that
such was a device of respondent to deceive the public to the damage
of complainant no unfair competition is committed.[29]OnFebruary
13, 1998, petitioner filed a motion for reconsideration of
Secretary Guingonas resolution, alleging, among others, that only a
likelihood of confusion is required to sustain a charge of unfair
competition.It also submitted the results of a consumer
survey[30]involving a comparison of petitioners and respondents
products.OnJune 5, 1998, Justice Secretary Silvestre BelloIII,
Guingonas successor, granted petitioners motion and directed the
filing of an information against respondent.[31]WHEREFORE, our
resolution dated9 January 1998is hereby reversed and set aside. You
are directed to file an information for unfair competition under
Article 189 of the Revised Penal Code, as amended, against
respondent Tony Lim. Report the action taken thereon within ten
(10) days from receipt hereof.[32]Secretary Bello reasoned that
under Article 189 of the Revised Penal Code, as amended, exact
similarity of the competing products is not required.However,
Justice Guingonas resolutionincorrectly dweltonthe specific
differences in the details of the products.[33]Secretary Bellos own
factual findings revealed:x x x [I]t is not difficult to discern
that respondent gave his products the general appearance as that of
the product of the complainant.This was established by the
respondents use of the complainants arcuate backpocket design
trademark; the 105 mark which apparently is a spin-off of the 501
mark of the complainant; the patch which was clearly patterned
after that of the complainants two horse patch design trademark;
the red tab on the right backpocket; the wordings which were
crafted to look similar with the Levis trademark of the
complainant; and even the packaging.In appropriating himself the
general appearance of the product of the complainant, the
respondent clearly intended to deceive the buying public. Verily,
any person who shall employ deception or any other means contrary
to good faith by which he shall pass of the goods manufactured by
him or in which he deals, or his business, or services for those of
the one having established good will shall guilty of unfair
competition.
Respondents registration of his trademark can not afford him any
remedy. Unfair competition may still be prosecuted despite such
registration.[34](Citation omitted)
Respondent then filed his own motion for reconsideration of
theBelloresolution. OnMay 7, 1999, new DOJ Secretary Serafin Cuevas
granted respondents motion and ordered the dismissal of the charges
against him.[35]CA DispositionDissatisfied with the DOJ rulings,
petitioner sought recourse with the CA via a petition for review
under Rule 43 of the 1997 Rules of Civil Procedure.OnOctober 17,
2003, the appellate court affirmed the dismissal of the unfair
competition complaint.WHEREFORE, premises considered, the petition
for review is DENIED and is accordingly DISMISSED for lack of
merit.
SO ORDERED.[36]The CA pointed out that to determine the
likelihood of confusion, mistake or deception, all relevant factors
and circumstances should be taken into consideration, such as the
circumstances under which the goods are
sold, the class of purchasers, and the actual occurrence or
absence of confusion.[37]Thus, the
existenceofsomesimilaritiesbetweenLIVES jeans and LEVIS garments
would notipso factoequate to fraudulent intent on the part of
respondent. The CA noted that respondent used affirmative and
precautionary distinguishing features in his products for
differentiation.The appellate court considered the spelling and
pronunciation of the marks; the difference in the designs of the
back pockets; the dissimilarity between the carton tickets; and the
pricing and sale of petitioners products in upscale exclusive
specialty shops.The CA also disregarded the theory of post-sale
confusion propounded by petitioner, relying instead on the view
that the probability of deception must be determined at the point
of sale.[38]IssuesPetitioner submits that the CA committed the
following errors:I.
THE COURT OF APPEALS GRAVELY ERREDIN RULING THAT ACTUAL
CONFUSION IS NECESSARYTO SUSTAIN A CHARGE OF UNFAIR
COMPETITION,ANDTHAT THERE MUST BE DIRECT EVIDENCE OR PROOF OF
INTENT TO DECEIVE THE PUBLIC.
II.
THE COURT OF APPEALS GRAVELY ERREDIN RULING THAT RESPONDENTS
LIVES JEANS DO NOT UNFAIRLY COMPETEWITH LEVIS JEANSAND/OR THAT
THERE IS NO POSSIBILITY THAT THE FORMER WILL BE CONFUSED FOR THE
LATTER, CONSIDERING THAT RESPONDENTS LIVES JEANS BLATANTLYCOPYOR
COLORABLY IMITATE NO LESS THAN SIX (6) TRADEMARKS OF LEVIS
JEANS.
III.
THE COURT OF APPEALS GRAVELY ERREDIN DISREGARDING THE EVIDENCE
ON RECORD, CONSISTING OF THE SCIENTIFICALLY CONDUCTED MARKET
SURVEYANDTHE AFFIDAVIT OF THE EXPERT WITNESS ON THE RESULTS
THEREOF, WHICHSHOWTHAT RESPONDENTS LIVES JEANSARE, INFACT, BEING
CONFUSED FOR LEVIS JEANS.
IV.
THE COURT OF APPEALS GRAVELY ERREDIN RULING THAT THE ISSUE OF
CONFUSION SHOULD ONLY BE DETERMINED AT THE POINT OFSALE.
V.
THE COURT OF APPEALS GRAVELY ERREDIN FAILING TO DIRECT THE
SECRETARY OF JUSTICE TO CAUSE THE FILINGOF THE APPROPRIATE
INFORMATION IN COURT AGAINST THE RESPONDENT.[39](Underscoring
supplied)
Our RulingIn essence, petitioner asks this Court to determine if
probable cause exists to charge respondent with the crime of unfair
competition under Article 189(1) of the Revised Penal Code, prior
to its repeal by Section 239 of RA No. 8293.However, that is a
factual issue[40]the resolution of which is improper in a Rule 45
petition.[41]The only legal issue left for the Court to determine
is whether the issue of confusion
shouldbedeterminedonlyatthepointof sale.Nonetheless, there is
sufficient reason for this Court to dismiss this petition merely by
looking at the procedural avenue petitioner used to have the DOJ
resolutions reviewed by the CA.Petitioner filed with the CA a
petition for review under Rule 43 of the 1997 Rules of Civil
Procedure.[42]Rule 43 governs all appeals from [the Court of Tax
Appeals and] quasi-judicial bodies to the CA.Its Section 1
provides:Section 1.Scope.This Rule shall apply to appeals from
[judgments or final orders of the Court of Tax Appeals and from]
awards, judgments, final orders or resolutions of or authorized by
any quasi-judicial agency in the exercise of its quasi-judicial
functions. Among these agencies are the Civil Service Commission,
Central Board of Assessment Appeals, Securities and Exchange
Commission,OfficeofthePresident, Land Registration Authority,
Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National
Electrification Administration, Energy Regulatory Board, National
Telecommunications Commission, Department of Agrarian Reform under
Republic Act No. 6657, Government Service Insurance System,
Employees Compensation Commission, Agricultural Inventions Board,
Insurance Commission, Philippine Atomic Energy Commission, Board of
Investments, Construction Industry Arbitration Commission, and
voluntary arbitrators authorized by law.[43]Clearly, the DOJ is not
one of the agencies enumerated in Section 1 of Rule 43 whose
awards, judgments, final orders, or resolutions may be appealed to
the CA.The Court has consistently ruled that thefiling with the CA
of a petition for review under Rule 43to question the Justice
Secretarys resolution regarding the determination of probable
causeis an improper remedy.[44]Under the 1993 Revised Rules on
Appeals from Resolutions in Preliminary Investigations or
Reinvestigations,[45]the resolution of the investigating prosecutor
is subject to appeal to the Justice Secretary[46]who, under the
Revised Administrative Code, exercises the power of control and
supervision over said Investigating Prosecutor; and who may affirm,
nullify, reverse, or modify the ruling of such prosecutor.[47]If
the appeal is dismissed, and after the subsequent motion for
reconsideration is resolved, a party has no more appeal or other
remedy available in the ordinary course of law.[48]Thus, the
Resolution of the Justice Secretary affirming, modifying or
reversing the resolution of the Investigating Prosecutor is
final.[49]There being no more appeal or other remedy available in
the ordinary course of law, the remedy of the aggrieved party is to
file a petition forcertiorariunder Rule 65.Thus, while theCAmay
review the resolution of the Justice Secretary, itmay do
soonlyinapetitionforcertiorariunder Rule 65 of the 1997 Rules of
Civil Procedure,solelyon the ground that the Secretary of Justice
committed grave abuse of discretion amounting to excess or lack of
jurisdiction.[50]Verily, when respondent filed a petition for
review under Rule 43 instead of a petition forcertiorariunder Rule
65, the CA should have dismisseditoutright.However, the appellate
court chose to determine if DOJ Secretaries Guingona and Cuevas
correctly determined the absence of probable cause.Now, even if We
brush aside technicalities and consider the petition for review
filed with the CA as one under Rule 65, the petition must fail just
the same.While the resolution of the Justice Secretary may be
reviewed by the Court, it is not empowered to substitute its
judgment for that of the executive branchwhen there is no grave
abuse of discretion.[51]Courts are without power to directly decide
matters over which full discretionary authority has been delegated
to the legislative or executive branch of the government.[52]The
determination of probable cause is one
such matter because that authority has been given to the
executive branch, through the DOJ.[53]It bears stressing that the
main function of a government prosecutor is to determine the
existence of probable cause and to file the corresponding
information should he find it to be so.[54]Thus, the decision
whether or not to dismiss the criminal complaint against respondent
is necessarily dependent on the sound discretion of the
investigating prosecutor and ultimately, that of the Secretary of
Justice.[55]A prosecutor, by the nature of his office, is under no
compulsion to file a particular criminal information where he is
not convinced that he has evidence to prop up its averments, or
that the evidence at hand points to a different conclusion. This is
not to discount the possibility of the commission of abuses on the
part of the prosecutor.But this Court must recognize that a
prosecutor should not be unduly compelled to work against his
conviction.Although the power and prerogative of the prosecutor to
determine whether or not the evidence at hand is sufficient to form
a reasonable belief that a person committed an offense is not
absolute but subject to judicial review, it would be embarrassing
for him to be compelled to prosecute a case when he is in no
position to do so, because in his opinion he does not have the
necessary evidence to secure a conviction, or he is not convinced
of the merits of the case.[56]In finding that respondents goods
were not clothed with an appearance which is likely to deceive the
ordinary purchaser exercising ordinary care, the investigating
prosecutor exercised the discretion lodged in him by law.He found
that:First,theLIVES mark of the respondents goods is spelled and
pronounced differently from the LEVIS mark of the complainant.
Second, the backpocket design allegedly copied by the respondent
from the registered arcuate design of the complainant, appears to
be different in view of the longer curved arms that stretch deep
downward to a point of convergence where the stitches form a
rectangle. The arcuate design for complainant LEVIs jeans form a
diamond instead. And assumingarguendothat there is similarity in
the design of backpockets between the respondents goods and that of
the complainant, this alone does not establish that respondents
jeans were intended to copy the complainants goods and pass them
off as the latters products as this design is simple and may not be
said to be strikingly distinct absent the other LEVIS trademark
such as the prints on the button, rivets, tags and the like. x x x
Further, the presence of accessories bearing Levis trademark was
not established as there were no such accessories seized from the
respondent and instead genuine LIVES hangtags, button and patches
were confiscated during the search of latters premises.
Second, the design of the patches attached to the backpockets of
the respondents goods depicts three men on either side of a pair of
jeans attempting to pull apart said jeans, while the goods
manufactured by complainant with patches also attached at the right
backpockets depicts two horses being whipped by two men in an
attempt to tear apart a pair of jeans.It is very clear therefore
that the design of the backpocket patches by the respondent is
different from that of the complainant, in the former the men were
trying to pull apart the pants while in the latter horses are the
ones doing the job.Obviously, there is a great difference between a
man and a horse and this will naturally not escape the eyes of an
ordinary purchaser.
Third, the manner by which Levis jeans are packed and sold with
carton tickets attached to the products cannot be appropriated
solely by complainant to the exclusion of all other manufacturers
of same class.It frequently happens that goods of a particular
class are labeled by all manufacturer[s] in a common manner. In
cases of that sort, no manufacturer may appropriate for himself the
method of labeling or packaging [of] his merchandise and then
enjoin other merchants from using it. x x x.
Fourth, evidence shows that there is a copyright registration
issued by the National Library over the backpocket design of the
respondent. And this copyright registration gives the respondent
the right to use the same in his goods x x x.[57]The determination
of probable cause is part of the discretion granted to the
investigating prosecutor and ultimately, the Secretary of
Justice.Courts are not empowered to substitute their own judgment
for that of the executive branch.[58]The courts duty in an
appropriate case is confined to a determination of whether the
assailed executive or judicial determination of probable cause was
done without or in excess of jurisdiction or with grave abuse of
discretion amounting to want of jurisdiction.[59]For grave abuse of
discretion to prosper as a ground forcertiorari, it must be
demonstrated that the lower court or tribunal has exercised its
power in an arbitrary and despotic manner, by reason of passion or
personal hostility, and it must be patent and gross as would amount
to an evasion or to a unilateral refusal to perform the duty
enjoined or to act in contemplation of law.[60]In the case at bar,
no grave abuse of discretion on the part of the DOJ was
shown.Petitioner merely harps on the error committed by the DOJ and
the CA in arriving at their factual finding that there is no
confusing similarity between petitioners and respondents products.
While it is possible that the investigating prosecutor and
Secretaries Guingona and Cuevaserroneouslyexercised their
discretion when they found that unfair competition was not
committed, this by itself does not render their acts amenable to
correction and annulment by the extraordinary remedy
ofcertiorari.There must be a showing ofgrave abuseof discretion
amounting to lack or excess of jurisdiction.[61]We are disinclined
to find that grave of abuse of discretion was committed when
records show that the finding of no probable cause is supported by
the evidence, law, and jurisprudence.Generally, unfair competition
consists in employing deception or any other means contrary to good
faith by which any person shall pass off the goods manufactured by
him or in which he deals, or his business, or services
for those of the one having established goodwill, or committing
any acts calculated to produce such result.[62]The elements of
unfair competition under Article 189(1)[63]of the Revised Penal
Code are:(a)That the offender gives his goods the general
appearance of the goods of another manufacturer or dealer;
(b)That the general appearance is shown in the (1) goods
themselves, or in the (2) wrapping of their packages, or in the (3)
device or words therein, or in (4) any other feature of their
appearance;
(c)That the offender offers to sell or sells those goods or
gives other persons a chance or opportunity to do the same with a
like purpose; and
(d)That there is actual intent to deceive the public or defraud
a competitor.[64]All these elements must be proven.[65]In finding
that probable cause for unfair competition does not exist, the
investigating prosecutor and Secretaries Guingona and Cuevas
arrived at the same conclusion that there is insufficient evidence
to prove all the elements of the crime that would allow them to
secure a conviction.Secretary Guingona discounted the element of
actual intent to deceive by taking into consideration the
differences in spelling, meaning, and phonetics between LIVES and
LEVIS, aswellasthefactthat respondent had registered his own
mark.[66]While it is true that there may be unfair competition even
if the competing mark is registered in the Intellectual Property
Office, it is equally true that the same may showprima faciegood
faith.[67]Indeed,registrationdoesnotnegate unfair competition where
the goods are packed or offered for sale and passed off as those of
complainant.[68]However, the marks registration, coupled with the
stark differences between the competing marks, negate the existence
of actual intent to deceive, in this particular case.For his part,
Justice Cuevas failed to find the possibility of confusion and of
intent to deceive the public, relying onEmerald Garment
Manufacturing Corporation v. Court of Appeals.[69]InEmerald, the
Court explained that sincemaongpantsorjeansarenotinexpensive, the
casual buyer is more cautious and discerning and would prefer to
mull over his purchase, making confusion and deception less
likely.We cannot subscribe to petitioners stance thatEmerald
Garmentcannot apply because there was only one point of comparison,
i.e., LEE as it appears in Emerald Garments STYLISTIC
MR.LEE.Emerald Garmentis instructive in explaining the attitude of
the buyer when it comes to products that are not inexpensive, such
as jeans.In fact, theEmerald Garmentrationale is supported byDel
Monte Corporation v. Court of Appeals,[70]where the Court explained
that the attitude of the purchaser is determined by the cost of the
goods.There is no reason not to apply the rationale in those cases
here even if only by analogy.The rule laid down inEmerald
GarmentandDel Monteis consistent withAsia Brewery, Inc. v. Court of
Appeals,[71]where the Court held that in resolving cases of
infringement and unfair competition, the courts should take into
considerationseveralfactors 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.[72]Petitioner argues that the element of intent
to deceive may be inferred from the similarity of the goods or
their appearance.[73]The argument is specious on two fronts.First,
where the similarity in the appearance of the goods as packed and
offered for sale is sostriking,intent to deceive may be
inferred.[74]However, as found by the investigating prosecutor and
the DOJ Secretaries, striking similarity between the competing
goods is not present.Second, the confusing similarity of the goods
was precisely in issue during the preliminary investigation.As
such, the element of intent to
deceivecouldnotarisewithouttheinvestigating prosecutors or the DOJ
Secretarysfindingthatsuchconfusing similarity exists.Since
confusing similarity was not found, the element of fraud or
deception could not be inferred.We cannot sustain Secretary Bellos
opinion that to establish probable cause, it is enough that the
respondent gave to his product the general appearance of the
product[75]of petitioner.It bears stressing that that is only one
element of unfair competition.All others must be shown to
exist.More importantly, the likelihood of confusion exists not only
if there is confusing similarity.It should also be likely to cause
confusion or mistake or deceive purchasers.[76]Thus, the CA
correctly ruled that the mere fact that some resemblance can be
pointed out between the marks used does not in itself prove unfair
competition.[77]To reiterate, the resemblance must be such as is
likely to deceive the ordinary purchaser exercising ordinary
care.[78]The consumer survey alone does not equate to actual
confusion.We note that the survey was made by showing the
interviewees actual samples of petitioners and respondents
respective products,approximately five feet awayfrom
them.Fromthatdistance, they were asked to identify the jeans brand
andstate the reasons for thinking so.[79]This method discounted the
possibility that the ordinary intelligent buyer would be able to
closely scrutinize, and even fit, the jeans to determine if they
were LEVIS or not.It also ignored that a consumer would consider
the price of the competing goods when choosing a brand of jeans.It
is undisputed that LIVES jeans are priced much lower than LEVIS.The
Courts observations inEmerald Garmentare illuminating on this
score:First, the products involved in the case at bar are, in the
main, various kinds of jeans. x x xMaong pants or jeans are not
inexpensive.Accordingly, the casual buyer is predisposed to be more
cautious and discriminating in and would prefer to mull over his
purchase.Confusion and deception, then, is less likely.InDel Monte
Corporation v. Court of Appeals,we noted that:
Among these, what essentially determines the attitudes of the
purchaser, specifically his inclination to be cautious, is the cost
of the goods.To be sure, a person who buys a box of candies will
not exercise as much care as one who buys an expensive watch. As a
general rule, an ordinary buyer does not exercise as much prudence
in buying an article for which he pays a few centavos as he does in
purchasing a more valuable thing.Expensive and valuable items are
normally bought only after deliberate, comparative and analytical
investigation.But mass products, low priced articles in wide use,
and matters of everyday purchase requiring frequent replacement are
bought by the casual consumer without great care.[80](Emphasis
supplied)
We find no reason to go beyond the point of sale to determine if
there is probable cause for unfair competition. The CA observations
along this line are worth restating:We also find no basis to give
weight to petitioners contention that the post sale confusion that
might be triggered by the perceived similarities between the two
products must be considered in the action for unfair competition
against respondent.
No inflexible rule can be laid down as to what will constitute
unfair competition.Each case is, inthemeasure, a law unto itself.
Unfair competition is always a question of fact.The question to be
determined in every case is whether or not, asa matter of fact, the
name or mark used by the defendant has previously cometoindicate
and designate plaintiffs goods, or, to state it in another way,
whether defendant, as a matter of fact, is, by his conduct, passing
off defendants goods as plaintiffs goods or his business as
plaintiffsbusiness.The universal test question is whether the
public is likely to be deceived.
Inthecase before us, we are of the view that the probability of
deception must be tested at the point of sale since it is at this
point that the ordinary purchaser mulls upon the product and is
likely to buy the same under the belief that he is buying another.
The test of fraudulent simulation is to be found in the likelihood
of deception, or the possibility of deception of some persons in
some measure acquainted with an established design and desirous of
purchasing the commodity with which that design has been
associated.[81]In sum, absent a grave abuse of discretion on the
part of the executive branch tasked with the determination of
probable cause during preliminary investigation, We cannot nullify
acts done in the exercise of the executive officers discretion.
Otherwise, We shall violate the principle that the purpose of a
preliminary investigation is to secure the innocent against hasty,
malicious and oppressive prosecution, and to protect him from an
open and public accusation of crime, from the trouble, expense and
anxiety of a public trial, and also to protect the State from
useless and expensive trials.[82]WHEREFORE, the petition
isDENIEDand the appealed Decision of the Court of
AppealsAFFIRMED.SO ORDERED.Republic of the PhilippinesSUPREME
COURTBaguio City
SECOND DIVISION
G.R. No. 164321 March 23, 2011SKECHERS, U.S.A.,
INC.,Petitioner,vs.INTER PACIFIC INDUSTRIAL TRADING CORP., and/or
INTER PACIFIC TRADING CORP. and/or STRONG SPORTS GEAR CO., LTD.,
and/or STRONGSHOES WAREHOUSE and/or STRONG FASHION SHOES TRADING
and/or TAN TUAN HONG and/or VIOLETA T. MAGAYAGA and/or JEFFREY R.
MORALES and/or any of its other proprietor/s, directors, officers,
employees and/or occupants of its premises located at S-7, Ed &
Joe's Commercial Arcade, No. 153 Quirino Avenue, Paraaque
City,Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
TRENDWORKS INTERNATIONAL
CORPORATION,Petitioner-Intervenor,vs.INTER PACIFIC INDUSTRIAL
TRADING CORP. and/or INTER PACIFIC TRADING CORP. and/or STRONG
SPORTS GEAR CO., LTD., and/or STRONGSHOES WAREHOUSE and/or STRONG
FASHION SHOES TRADING and/or TAN TUAN HONG and/or VIOLETA T.
MAGAYAGA and/or JEFFREY R. MORALES and/or any of its other
proprietor/s, directors, officers, employees and/or occupants of
its premises located at S-7, Ed & Joe's Commercial Arcade, No.
153 Quirino Avenue, Paraaque City,Respondents.
R E S O L U T I O N
PERALTA,J.:For resolution are the twin Motions for
Reconsideration1filed by petitioner and petitioner-intervenor from
the Decision rendered in favor of respondents, dated November 30,
2006.
At the outset, a brief narration of the factual and procedural
antecedents that transpired and led to the filing of the motions is
in order.
The present controversy arose when petitioner filed with Branch
24 of the Regional Trial Court (RTC) of Manila an application for
the issuance of search warrants against an outlet and warehouse
operated by respondents for infringement of trademark under Section
155, in relation to Section 170 of Republic Act No. 8293, otherwise
known as the Intellectual Property Code of the Philippines.2In the
course of its business, petitioner has registered the trademark
"SKECHERS"3and the trademark "S" (within an oval design)4with the
Intellectual Property Office (IPO).
Two search warrants5were issued by the RTC and were served on
the premises of respondents. As a result of the raid, more than
6,000 pairs of shoes bearing the "S" logo were seized.
Later, respondents moved to quash the search warrants, arguing
that there was no confusing similarity between petitioners
"Skechers" rubber shoes and its "Strong" rubber shoes.
On November 7, 2002, the RTC issued an Order6quashing the search
warrants and directing the NBI to return the seized goods. The RTC
agreed with respondents view that Skechers rubber shoes and Strong
rubber shoes have glaring differences such that an ordinary prudent
purchaser would not likely be misled or confused in purchasing the
wrong article.
Aggrieved, petitioner filed a petition for certiorari7with the
Court of Appeals (CA) assailing the RTC Order. On November 17,
2003, the CA issued a Decision8affirming the ruling of the RTC.
Subsequently, petitioner filed the present petition9before this
Court which puts forth the following assignment of errors:
A. WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION IN CONSIDERING MATTERS OF DEFENSE IN A CRIMINAL TRIAL
FOR TRADEMARK INFRINGEMENT IN PASSING UPON THE VALIDITY OF THE
SEARCH WARRANT WHEN IT SHOULD HAVE LIMITED ITSELF TO A
DETERMINATION OF WHETHER THE TRIAL COURT COMMITTED GRAVE ABUSE OF
DISCRETION IN QUASHING THE SEARCH WARRANTS.
B. WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION IN FINDING THAT RESPONDENTS ARE NOT GUILTY OF TRADEMARK
INFRINGEMENT IN THE CASE WHERE THE SOLE TRIABLE ISSUE IS THE
EXISTENCE OF PROBABLE CAUSE TO ISSUE A SEARCH WARRANT.10In the
meantime, petitioner-intervenor filed a
Petition-in-Intervention11with this Court claiming to be the sole
licensed distributor of Skechers products here in the
Philippines.
On November 30, 2006, this Court rendered a Decision12dismissing
the petition.
Both petitioner and petitioner-intervenor filed separate motions
for reconsideration.
In petitioners motion for reconsideration, petitioner moved for
a reconsideration of the earlier decision on the following
grounds:
(a) THIS HONORABLE COURT MUST RE-EXAMINE THE FACTS OF THIS CASE
DUE TO THE SIGNIFICANCE AND REPERCUSSIONS OF ITS DECISION.
(b) COMMERCIAL QUANTITIES OF THE SEIZED ITEMS WITH THE
UNAUTHORIZED REPRODUCTIONS OF THE "S" TRADEMARK OWNED BY PETITIONER
WERE INTENDED FOR DISTRIBUTION IN THE PHILIPPINE MARKET TO THE
DETRIMENT OF PETITIONER RETURNING THE GOODS TO RESPONDENTS WILL
ADVERSELY AFFECT THE GOODWILL AND REPUTATION OF PETITIONER.
(c) THE SEARCH WARRANT COURT AND THE COURT OF APPEALS BOTH ACTED
WITH GRAVE ABUSE OF DISCRETION.
(d) THE SEARCH WARRANT COURT DID NOT PROPERLY RE-EVALUATE THE
EVIDENCE PRESENTED DURING THE SEARCH WARRANT APPLICATION
PROCEEDINGS.
(e) THE SOLID TRIANGLE CASE IS NOT APPLICABLE IN THIS CASE, AS
IT IS BASED ON A DIFFERENT FACTUAL MILIEU. PRELIMINARY FINDING OF
GUILT (OR ABSENCE THEREOF) MADE BY THE SEARCH WARRANT COURT AND THE
COURT OF APPEALS WAS IMPROPER.
(f) THE SEARCH WARRANT COURT OVERSTEPPED ITS DISCRETION. THE LAW
IS CLEAR. THE DOMINANCY TEST SHOULD BE USED.
(g) THE COURT OF APPEALS COMMITTED ERRORS OF JURISDICTION.13On
the other hand, petitioner-intervenors motion for reconsideration
raises the following errors for this Courts consideration, to
wit:
(a) THE COURT OF APPEALS AND THE SEARCH WARRANT COURT ACTED
CONTRARY TO LAW AND JURISPRUDENCE IN ADOPTING THE ALREADY-REJECTED
HOLISTIC TEST IN DETERMINING THE ISSUE OF CONFUSING SIMILARITY;
(b) THE COURT OF APPEALS AND THE SEARCH WARRANT COURT ACTED
CONTRARY TO LAW IN HOLDING THAT THERE IS NO PROBABLE CAUSE FOR
TRADEMARK INFRINGEMENT; AND
(c) THE COURT OF APPEALS SANCTIONED THE TRIAL COURTS DEPARTURE
FROM THE USUAL AND ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHEN IT
UPHELD THE QUASHAL OF THE SEARCH WARRANT ON THE BASIS SOLELY OF A
FINDING THAT THERE IS NO CONFUSING SIMILARITY.14A perusal of the
motions submitted by petitioner and petitioner-intervenor would
show that the primary issue posed by them dwells on the issue of
whether or not respondent is guilty of trademark infringement.
After a thorough review of the arguments raised herein, this
Court reconsiders its earlier decision.
The basic law on trademark, infringement, and unfair competition
is Republic Act (R.A.) No. 8293. Specifically, Section 155 of R.A.
No. 8293 states:
Remedies; Infringement. Any person who shall, without the
consent of the owner of the registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark or the same container or a
dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including
other preparatory steps necessary to carry out the sale of any
goods or services on or in connection with which such use is likely
to cause confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a
registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in connection with the
sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be liable in a
civil action for infringement by the registrant for the remedies
hereinafter set forth: Provided, That the infringement takes place
at the moment any of the acts stated in Subsection 155.1 or this
subsection are committed regardless of whether there is actual sale
of goods or services using the infringing material.15The essential
element of infringement under R.A. No. 8293 is that the infringing
mark is likely to cause confusion. In determining similarity and
likelihood of confusion, jurisprudence has developed tests the
Dominancy Test and the Holistic or Totality Test. The Dominancy
Test focuses on the similarity of the prevalent or dominant
features of the competing trademarks that might cause confusion,
mistake, and deception in the mind of the purchasing public.
Duplication or imitation is not necessary; neither is it required
that the mark sought to be registered suggests an effort to
imitate. Given more consideration are the aural and visual
impressions created by the marks on the buyers of goods, giving
little weight to factors like prices, quality, sales outlets, and
market segments.16In contrast, the Holistic or Totality Test
necessitates a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in
determining confusing similarity. The discerning eye of the
observer must focus not only on the predominant words, but also on
the other features appearing on both labels so that the observer
may draw conclusion on whether one is confusingly similar to the
other.17Relative to the question on confusion of marks and trade
names, jurisprudence has noted two (2) types of confusion, viz.:
(1) confusion of goods (product confusion), where the ordinarily
prudent purchaser would be induced to purchase one product in the
belief that he was purchasing the other; and (2) confusion of
business (source or origin confusion), where, although the goods of
the parties are different, the product, the mark of which
registration is applied for by one party, is such as might
reasonably be assumed to originate with the registrant of an
earlier product, and the public would then be deceived either into
that belief or into the belief that there is some connection
between the two parties, though inexistent.18Applying the Dominancy
Test to the case at bar, this Court finds that the use of the
stylized "S" by respondent in its Strong rubber shoes infringes on
the mark already registered by petitioner with the IPO. While it is
undisputed that petitioners stylized "S" is within an oval design,
to this Courts mind, the dominant feature of the trademark is the
stylized "S," as it is precisely the stylized "S" which catches the
eye of the purchaser. Thus, even if respondent did not use an oval
design, the mere fact that it used the same stylized "S", the same
being the dominant feature of petitioners trademark, already
constitutes infringement under the Dominancy Test.
This Court cannot agree with the observation of the CA that the
use of the letter "S" could hardly be considered as highly
identifiable to the products of petitioner alone. The CA even
supported its conclusion by stating that the letter "S" has been
used in so many existing trademarks, the most popular of which is
the trademark "S" enclosed by an inverted triangle, which the CA
says is identifiable to Superman. Such reasoning, however, misses
the entire point, which is that respondent had used astylized"S,"
which is the samestylized"S" which petitioner has a registered
trademark for. The letter "S" used in the Superman logo, on the
other hand, has a block-like tip on the upper portion and a round
elongated tip on the lower portion. Accordingly, the comparison
made by the CA of the letter "S" used in the Superman trademark
with petitioners stylized "S" is not appropriate to the case at
bar.
Furthermore, respondent did not simply use the letter "S," but
it appears to this Court that based on the font and the size of the
lettering, the stylized "S" utilized by respondent is the very same
stylized "S" used by petitioner; a stylized "S" which is unique and
distinguishes petitioners trademark. Indubitably, the likelihood of
confusion is present as purchasers will associate the respondents
use of the stylized "S" as having been authorized by petitioner or
that respondents product is connected with petitioners
business.
Both the RTC and the CA applied the Holistic Test in ruling that
respondent had not infringed petitioners trademark. For its part,
the RTC noted the following supposed dissimilarities between the
shoes, to wit:
1. The mark "S" found in Strong Shoes is not enclosed in an
"oval design."
2. The word "Strong" is conspicuously placed at the backside and
insoles.
3. The hang tags and labels attached to the shoes bears the word
"Strong" for respondent and "Skechers U.S.A." for private
complainant;
4. Strong shoes are modestly priced compared to the costs of
Skechers Shoes.19While there may be dissimilarities between the
appearances of the shoes, to this Courts mind such dissimilarities
do not outweigh the stark and blatant similarities in their general
features. As can be readily observed by simply comparing
petitioners Energy20model and respondents Strong21rubber shoes,
respondent also used the color scheme of blue, white and gray
utilized by petitioner. Even the design and "wavelike" pattern of
the midsole and outer sole of respondents shoes are very similar to
petitioners shoes, if not exact patterns thereof. At the side of
the midsole near the heel of both shoes are two elongated designs
in practically the same location. Even the outer soles of both
shoes have the same number of ridges, five at the back and six in
front. On the side of respondents shoes, near the upper part,
appears the stylized "S," placed in the exact location as that of
the stylized "S" on petitioners shoes. On top of the "tongue" of
both shoes appears the stylized "S" in practically the same
location and size. Moreover, at the back of petitioners shoes, near
the heel counter, appears "Skechers Sport Trail" written in white
lettering. However, on respondents shoes appears "Strong Sport
Trail" noticeably written in the same white lettering, font size,
direction and orientation as that of petitioners shoes. On top of
the heel collar of petitioners shoes are two grayish-white
semi-transparent circles. Not surprisingly, respondents shoes also
have two grayish-white semi-transparent circles in the exact same
location.lihpwa1Based on the foregoing, this Court is at a loss as
to how the RTC and the CA, in applying the holistic test, ruled
that there was no colorable imitation, when it cannot be any more
clear and apparent to this Court that there is colorable imitation.
The dissimilarities between the shoes are too trifling and
frivolous that it is indubitable that respondents products will
cause confusion and mistake in the eyes of the public. Respondents
shoes may not be an exact replica of petitioners shoes, but the
features and overall design are so similar and alike that confusion
is highly likely.1avvphi1In Converse Rubber Corporation v. Jacinto
Rubber & Plastic Co., Inc.,22this Court, in a case for unfair
competition, had opined that even if not all the details are
identical, as long as the general appearance of the two products
are such that any ordinary purchaser would be deceived, the
imitator should be liable, to wit:
From said examination, We find the shoes manufactured by
defendants to contain, as found by the trial court, practically all
the features of those of the plaintiff Converse Rubber Corporation
and manufactured, sold or marketed by plaintiff Edwardson
Manufacturing Corporation, except for their respective brands, of
course. We fully agree with the trial court that "the respective
designs, shapes, the colors of the ankle patches, the bands, the
toe patch and the soles of the two products are exactly the same
... (such that) at a distance of a few meters, it is impossible to
distinguish "Custombuilt" from "Chuck Taylor." These elements are
more than sufficient to serve as basis for a charge of unfair
competition. Even if not all the details just mentioned were
identical, with the general appearances alone of the two products,
any ordinary, or even perhaps even a not too perceptive and
discriminating customer could be deceived, and, therefore,
Custombuilt could easily be passed off for Chuck Taylor.
Jurisprudence supports the view that under such circumstances, the
imitator must be held liable. x x x23Neither can the difference in
price be a complete defense in trademark infringement. In McDonalds
Corporation v. L.C. Big Mak Burger. Inc.,24this Court held:
Modern law recognizes that the protection to which the owner of
a trademark is entitled is not limited to guarding his goods or
business from actual market competition with identical or similar
products of the parties, but extends to all cases in which the use
by a junior appropriator of a trade-mark or trade-name is likely to
lead to a confusion of source, as where prospective purchasers
would be misled into thinking that the complaining party has
extended his business into the field (see 148 ALR 56 et seq; 53 Am.
Jur. 576) or is in any way connected with the activities of the
infringer; or when it forestalls the normal potential expansion of
his business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577). x x
x25Indeed, the registered trademark owner may use its mark on the
same or similar products, in different segments of the market, and
at different price levels depending on variations of the products
for specific segments of the market.26The purchasing public might
be mistaken in thinking that petitioner had ventured into a lower
market segment such that it is not inconceivable for the public to
think that Strong or Strong Sport Trail might be associated or
connected with petitioners brand, which scenario is plausible
especially since both petitioner and respondent manufacture rubber
shoes.
Withal, the protection of trademarks as intellectual property is
intended not only to preserve the goodwill and reputation of the
business established on the goods bearing the mark through actual
use over a period of time, but also to safeguard the public as
consumers against confusion on these goods.27While respondents
shoes contain some dissimilarities with petitioners shoes, this
Court cannot close its eye to the fact that for all intents and
purpose, respondent had deliberately attempted to copy petitioners
mark and overall design and features of the shoes. Let it be
remembered, that defendants in cases of infringement do not
normally copy but only make colorable changes.28The 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.29WHEREFORE, premises considered, the Motion for
Reconsideration is GRANTED. The Decision dated November 30, 2006 is
RECONSIDERED and SET ASIDE.
SO ORDERED.
U.S. Supreme Court
DIAMOND v. CHAKRABARTY, 447 U.S. 303 (1980)
447 U.S. 303DIAMOND, COMMISSIONER OF PATENTS AND TRADEMARKS v.
CHAKRABARTY.CERTIORARI TO THE UNITED STATES COURT OF CUSTOMS AND
PATENT APPEALS.
No. 79-136.
Argued March 17, 1980.Decided June 16, 1980.Title 35 U.S.C. 101
provides for the issuance of a patent to a person who invents or
discovers "any" new and useful "manufacture" or "composition of
matter." Respondent filed a patent application relating to his
invention of a human-made, genetically engineered bacterium capable
of breaking down crude oil, a property which is possessed by no
naturally occurring bacteria. A patent examiner's rejection of the
patent application's claims for the new bacteria was affirmed by
the Patent Office Board of Appeals on the ground that living things
are not patentable subject matter under 101. The Court of Customs
and Patent Appeals reversed, concluding that the fact that
micro-organisms are alive is without legal significance for
purposes of the patent law.
Held:A live, human-made micro-organism is patentable subject
matter under 101. Respondent's micro-organism constitutes a
"manufacture" or "composition of matter" within that statute. Pp.
308-318.
(a) In choosing such expansive terms as "manufacture" and
"composition of matter," modified by the comprehensive "any,"
Congress contemplated that the patent laws should be given wide
scope, and the relevant legislative history also supports a broad
construction. While laws of nature, physical phenomena, and
abstract ideas are not patentable, respondent's claim is not to a
hitherto unknown natural phenomenon, but to a nonnaturally
occurring manufacture or composition of matter - a product of human
ingenuity "having a distinctive name, character [and] use."
Hartranft v. Wiegmann,121 U.S. 609, 615. Funk Brothers Seed Co. v.
Kalo Inoculant Co.,333 U.S. 127, distinguished. Pp. 308-310.
(b) The passage of the 1930 Plant Patent Act, which afforded
patent protection to certain asexually reproduced plants, and the
1970 Plant Variety Protection Act, which authorized protection for
certain sexually reproduced plants but excluded bacteria from its
protection, does not evidence congressional understanding that the
terms "manufacture" or "composition of matter" in 101 do not
include living things. Pp. 310-314.[447 U.S. 303, 304](c) Nor does
the fact that genetic technology was unforeseen when Congress
enacted 101 require the conclusion that micro-organisms cannot
qualify as patentable subject matter until Congress expressly
authorizes such protection. The unambiguous language of 101 fairly
embraces respondent's invention. Arguments against patentability
under 101, based on potential hazards that may be generated by
genetic research, should be addressed to the Congress and the
Executive, not to the Judiciary. Pp. 314-318.
596 F.2d 952, affirmed.BURGER, C. J., delivered the opinion of
the Court, in which STEWART, BLACKMUN, REHNQUIST, and STEVENS, JJ.,
joined. BRENNAN, J., filed a dissenting opinion, in which WHITE,
MARSHALL, and POWELL, JJ., joined, post, p. 318.
Deputy Solicitor General Wallace argued the cause for
petitioner. With him on the brief were Solicitor General McCree,
Assistant Attorney General Shenefield, Harriet S. Shapiro, Robert
B. Nicholson, Frederic Freilicher, and Joseph F. Nakamura.
Edward F. McKie, Jr., argued the cause for respondent. With him
on the brief were Leo I. MaLossi, William E. Schuyler, Jr., and
Dale H. Hoscheit.*
[Footnote *] Leonard S. Rubenstein filed a brief for the Peoples
Business Commission as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed by George W.
Whitney, Bruce M. Collins, and Karl F. Jorda for the American
Patent Law Association, Inc.; by Thomas D. Kiley for Genentech,
Inc.; by Jerome G. Lee, William F. Dudine, Jr., and Paul H. Heller
for the New York Patent Law Association, Inc.; by Peter R. Taft,
Joseph A. Keyes, Jr., and Sheldon Elloit Steinbach for Dr. Leroy E.
Hood et al.; and by Lorance L. Greenlee for Dr. George
Pieczenik.
Briefs of amici curiae were filed by William I. Althen for the
American Society for Microbiology; by Donald R. Dunner for the
Pharmaceutical Manufacturers Association; by Edward S. Irons, Mary
Helen Sears, and Donald Reidhaar for the Regents of the University
of California; and by Cornell D. Cornish, pro se.[447 U.S. 303,
305]MR. CHIEF JUSTICE BURGER delivered the opinion of the
Court.
We granted certiorari to determine whether a live,
human-made