INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

INTRODUCTION: ESSENTIAL CHARACTERISTICS OF INTELLECTUAL PROPERTY &

GUIDING PRINCIPLES ON INTELLECTUAL PROPERTY CODE

 TWENTIETH CENTURY MUSIC CORP. VS. AIKEN, 422 U.S. 151

FACTS: Petitioners' copyrighted songs were received on the radio in respondent's food
shop from a local broadcasting station, which was licensed by the American Society of
Composers, Authors and Publishers to perform the songs, but respondent had no such
license. Petitioners then sued respondent for copyright infringement. The
District Court granted awards, but the Court of Appeals reversed.

ISSUES: Whether or not the reception of a radio broadcast of a

copyrighted musical composition can constitute copyright infringement when the
copyright owner has licensed the broadcaster to perform the composition publicly for
profit?

HELD: Respondent did not infringe upon petitioners' exclusive right, under the
Copyright Act, "[t]o performs the copyrighted work publicly for profit,” since the radio
reception did not constitute a "performance" of the copyrighted songs.
Fortnightly Corp. v. United Artists, 392 U. S. 390; Teleprompter Corp. v. CBS,415 U. S.
394. To hold that respondent "performed" the copyrighted works would obviously result
in a wholly unenforceable regime of copyright law, and would also be highly inequitable,
since (short of keeping his radio turned off) anyone in respondent's position would be
unable to protect himself from infringement liability. Such a ruling, moreover, would
authorize the sale of an untold number of licenses for what is basically a single rendition
of a copyrighted work, thus conflicting with the balanced purpose of the Copyright Act of
assuring the composer an adequate return for the value of his composition while, at the
same time, protecting the public from oppressive monopolies.

 FEIST PUBLICATIONS, INC. VS. RURAL TELE. SERVS. CO., 499 U.S. 340, 1991
FACTS: Rural Telephone Service Company, Inc. (Plaintiff) provides telephone service to
several communities. Due to a state regulation, it must issue an annual telephone
directory, so it published a directory consisting of white and yellow pages. The yellow
pages have advertisements that generate revenue. Feist Publications, Inc. (Defendant)
is a publishing company whose directory covers a larger range than a typical directory.
Defendant distributes their telephone books free of charge, and they also generate
revenue through the advertising in the yellow pages. Plaintiff refused to give a license to
Defendant for the phone numbers in the area, so Defendant used them without Plaintiff’s
consent. Rural sued for copyright infringement.

ISSUES: Whether or not names, addresses, and phone numbers in a telephone

directory are able to be copyrighted?

HELD: No. Facts cannot be copyrighted; however, compilations of facts can generally
be copyrighted.

Facts are not original. The first person to find and report a particular fact has not created
the fact; he has merely discovered its existence. Facts may not be copyrighted and are
part of the public domain available to every person.

Factual compilations may possess the requisite originality. The author chooses what
facts to include, in what order to place them, and how to arrange the collected date so
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

they may be effectively used by readers. Thus, even a directory that contains no written
expression that could be protected, only facts, meets the constitutional minimum for
copyright protection if it features an original selection or arrangement. But even though
the format is original, the facts themselves do not become original through association.
The copyright on a factual compilation is limited to formatting. The copyright does not
extend to the facts themselves.

To establish copyright infringement, two elements must be proven: ownership of a valid

copyright and copying of constituent elements of the work that are original. The first
element is met in this case because the directory contains some forward text. As to the
second element, the information contains facts, which cannot be copyrighted. They
existed before being reported and would have continued to exist if a telephone directory
had never been published. There is no originality in the formatting, so there is no
copyrightable expression. Thus, there is no copyright infringement.

 DISTILLERIA WASHINGTON, INC. VS. COURT OF APPEALS, G.R. NO. 120961, 17

OCT 1996
FACTS: La Tondeña Distillers, Inc. (LTDI) filed a case against Distilleria Washington for
the seizure of 18,157 empty bottles bearing the blown-in marks of La Tondeña Inc. and
Ginebra San Miguel. Said bottles were being used by Washington for its own products
without the consent of LTDI. LTDI asserted that as the owner of the bottles they were
entitled for the protection extended by RA no. 623 (An Act to regulate the use of duly
stamped or marked bottles, boxes, kegs, barrels and other similar containers).
Washington countered that RA no. 623 should not apply to alcoholic beverages and the
ownership of the bottles were lawfully transferred to the buyer upon the sale of the gin
and the containers at a single price. The trial court rendered a decision favoring
Washington and ordered LTDI for the return of the seized bottles. LTDI appealed the
decision to the Court of Appeals. The appellate court reversed the court a quo and ruled
against Washington.

ISSUE: Whether or not ownership of the empty bottles was transferred to Washington?

HELD: The fact of the matter is that R.A. 623, as amended, in affording trademark
protection to the registrant, has additionally expressed a prima facie presumption of
illegal use by a possessor whenever such use or possession is without the written
permission of the registered manufacturer, a provision that is neither arbitrary nor
without appropriate rationale. The above-quoted provisions grant protection to a qualified
manufacturer who successfully registered with the Philippine Patent Office its duly
stamped or marked bottles, boxes, casks and other similar containers. The mere use of
registered bottles or containers without the written consent of the manufacturer is
prohibited, the only exceptions being when they are used as containers for "sisi,"
"bagoong," "patis" and similar native products. It is to be pointed out that a trademark
refers to a word, name, symbol, emblem, sign or device or any combination thereof
adopted and used by a merchant to identify, and distinguish from others, his goods of
commerce. It is basically an intellectual creation that is susceptible to ownership 7 and,
consistently therewith, gives rise to its own elements of jus posidendi, jus utendi, jus
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

fruendi, jus disponendi, and jus abutendi, along with the applicable jus lex, comprising
that ownership. The incorporeal right, however, is distinct from the property in the
material object subject to it. Ownership in one does not necessarily vest ownership in the
other. Thus, the transfer or assignment of the intellectual property will not necessarily
constitute a conveyance of the thing it covers, nor would a conveyance of the latter imply
the transfer or assignment of the intellectual right.

 AMIGO MANUFACTURING, INC., VS. CLUETT PEABODY CO., INC., G.R. NO.
139300, 14 MAR 2001
FACTS: Respondent Cluett Peabody Co., Inc. filed for cancellation of trademark against
Petitioner Amigo Manufacturing Inc.; claiming exclusive ownership of the subject
trademark and device, as used on men’s socks. Respondent uses the trademark and
device Gold Toe, represented by a sock and magnifying glass on the toe of a sock,
consisting of a plurality of gold-colored lines arranged in parallel relation within a
triangular area of toe of the stocking and spread from each other by lines of contrasting
color of the major part of the stocking. Petitioner, on the other hand, uses the trademark
and device Gold Top, claiming that it cannot be forced to cancel its trademark because it
started actual use of Gold Top trademark before Respondent's Gold Toe.

ISSUES: Whether or not Amigo Manufacturing Inc. can be compelled to cancel the
trademark.

HELD:
1. No. Based on the evidence presented, this Court concurs in the findings of the
Bureau of Patents that respondent had actually used the trademark and the
devices prior to petitioner’s use of its own. Respondent presented Bureau
registrations indicating the dates of first use in the Philippines. The registration of
the above marks by respondent constitutes prima facie evidence, which
petitioner failed to overturn satisfactorily, as provided under Section 20 of R.A.
166 (An Act to Provide for the Registration and Protection of Trademarks, Trade
Names, and Service x x x). Moreover, validity of the Certificates of Registration
was not questioned by petitioner. Petitioner failed to present proof of the date of
alleged first use of the trademark Gold Top. The only registration it could present
was a supplemental register, which the Court holds that such registration gives
no presumption of ownership of the trademark.
2. Idem Sonans Rule. The mark Gold Top was declared by the Court to be similar
with Gold Toe. The difference in sound occurs only in the final letter at the end of
the marks. For the same reason, hardly is there any variance in their
appearance. The court based its conclusion on the totality of the similarities
between the parties’ trademarks and not on their sounds alone. That in
determining whether trademarks are confusingly similar, jurisprudence has
developed two kinds of tests: the dominancy test and the holistic test. Test of
Dominancy focuses on the similarity of the prevalent features. It is held in
jurisprudence that if the competing trademark contains the main or essential or
dominant features of another, and confusion and deception is likely to result,
infringement takes place. Duplication or imitation is not necessary; nor is it
necessary that the infringing label should suggest an effort to imitate. The
controlling question is whether the use of the marks involved would be likely to
cause confusion or mistakes in the mind of the public or deceive purchasers. On
the other hand, the holistic test mandates that the entirety of the marks in
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

question must be considered. Although there are some minor differences

between the two sets of marks. The similarities, however, are of such degree,
number and quality that the overall impression given is that the two brands of
socks are deceptively the same, or at least very similar to each other.

 SMITH KLINE & FRENCH LABORATORIES, LTD., VS. COURT OF APPEALS, G.R.
NO. 121267, 23 OCT 2001
FACTS: Smith Kline & French Laboratories, Ltd. (Smith Kline) is the assignee of Letters
Patent No. 12207 covering the pharmaceutical product Cimetidine. Said patent was
issued by the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) to
Graham John Durant, John Collin Emmett and Robin Genellin on November 29, 1978.

On August 21, 1989, Danlex Research Laboratories, Inc. (Danlex) filed with the BPTTT
a petition for compulsory license to manufacture and produce its own brand of medicines
using Cimetidine. Danlex invoked Section 34(1)(e) of Republic Act No. 165, which states
that an application for the grant of a compulsory license under a particular patent may be
filed with the BPTTT at any time after the lapse of two (2) years from the date of grant of
such patent, if the patented invention or article relates to food or medicine, or
manufactured substances which can be used as food or medicine, or is necessary for
public health or public safety.

Smith Kline opposed the petition for compulsory license, arguing that the Danlex had no
cause of action and failed to allege how it intended to work the patented product.

After both parties were heard, the BPTTT rendered a decision directing the issuance of a
compulsory license to Danlex to use, manufacture and sell in the Philippines its own
brand of pharmaceutical products containing Cimetidine and ordered the payment by
Danlex to Smith Kline of royalties at the rate of 2.5% of net sales in Philippine currency.

On appeal, the CA held that the grant of a compulsory license to Danlex for the
manufacture and use of Cimetidine is in accord with the Patent Law since the patented
product is medicinal in nature, and therefore necessary for the promotion of public health
and safety.

ISSUES:
1. Whether or not the Director of BPTTT exercised its police power arbitrarily; and
2. Whether or not the rate of royalty payments fixed by the Director of the BPTTT at
2.5% of the net wholesale price amounts to expropriation of private property
without just compensation?

HELD:
1. No, the Supreme Court (SC) held that the Director of BPTTT did not exercise its
police power arbitrarily.

According to Smith Kline, the grant of a compulsory license to Danlex is an

invalid exercise of police power since it was not shown that there is an
overwhelming public necessity for such grant, considering that Smith Kline is
able to provide an adequate supply of Cimetidine to satisfy the needs of the
Philippine market. The Court, however, found Smith Kline’s contention untenable.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

The said grant is in accord with Section 34 of the Patent Law, which provides that
any person may apply to the Director for the grant of a license under a particular
patent at any time after the expiration of two years from the date of the grant of
the patent, if the patented invention or article relates to food or medicine or
manufactured substances which can be used as food or medicine, or is
necessary for public health or public safety.

The grant of the compulsory license satisfies the requirements of the foregoing
provision. More than ten years have passed since the patent for Cimetidine was
issued to Smith Kline and its predecessors-in-interest, and the compulsory
license applied for by Danlex is for the use, manufacture and sale of a medicinal
product. Furthermore, both the appellate court and the BPTTT found that Danlex
had the capability to work Cimetidine or to make use thereof in the manufacture
of a useful
product.

Therefore, the Director of BPTTT did not exercise its police power arbitrarily.

2. No, the SC held that the rate of royalty payments fixed by the Director of the
BPTTT at 2.5% of the net wholesale price does not amount to expropriation of
private property without just compensation.

The Court found that the rate of 2.5% of net wholesale price fixed by the Director
of the BPTTT is in accord with the Patent Law. It cited Section 35-B (3), which
states that royalty payments shall not exceed five percent (5%) of the net
wholesale price. In the absence of any agreement between the parties with
respect to a compulsory license, the Director of the BPTTT may fix the terms
thereof, including the rate of the royalty payable to the licensor. The law explicitly
provides that the rate of royalty shall not exceed five percent (5%) of the net
wholesale price.

The SC also reiterated that factual findings of administrative bodies, which are
considered as experts in their respective fields, are accorded not only respect but
even finality if the same are supported by substantial evidence.

Therefore, the rate of royalty payments fixed by the Director of the BPTTT at
2.5% of the net wholesale price does not amount to expropriation of private
property without just compensation.

 AIR PHILIPPINES CORP. VS. PENNSWELL, INC., G.R. NO. 172835, 13 DEC 2007
FACTS: Petitioner is a domestic corporation engaged in the business of air
transportation services. Respondent Pennswell Inc was organized to engage in the
business of manufacturing and selling industrial chemicals, solvents and special
lubricants.

Respondent delivered and sold to petitioner sundry goods in trade. Under the contracts,
petitioner’s obligation amounted to P 449,864.98 until the amount would be fully paid.
For failure to pay comply with its obligations unders said contract.

Respondent then filed a complaint against the petitioner. Petitioner then filed an
ANSWER alleging that the respondent defrauded the former for its previous sale of four
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

items. Said items were misrepresented by respondent as belonging to a new line, but
were in truth and in fact, identical with products petitioner had previously purchased from
respondent.

During the pendency of the trial, petitioner filed a Motion to Compel respondent to give a
detailed list of the ingredients and chemical components of the following products, to wit:
(a) Contact Grease and Connector Grease; (b) Thixohtropic Grease and Di-Electric
Strength Protective Coating; and (c) Dry Lubricant and Anti-Seize Compound.

RTC: Granted the motion then reversed its prior decision. Ruled infavor of the
respondent
CA: Affirmed

ISSUES: WON the court of appeals ruled was correct when it upheld the ruling of the
trial court that the chemical components or ingredients of respondent’s products are
trade secrets or industrial secret that are not subject to compulsory disclosure.

HELD: Yes. A trade secret is defined as a plan or process, tool, mechanism or

compound known only to its owner and those of his employees to whom it is necessary
to confide it.

The chemical composition, formulation, and ingredients of respondent’s special

lubricants are trade secrets within the contemplation of the law. Jurisprudence has
consistently acknowledged that the private character of trade secrets-there is a privilege
not to disclose one’s trade secret.

 MIGHTY CORPORATION VS. E. & J. GALLO WINERY AND THE ANDRESONS

GROUP, INC., G.R. NO. 154342, 14 JUL 2004
FACTS: Respondent Gallo Winery is a foreign corporation not doing business in the
Philippines but organized and existing under the laws of the State of California. Gallo
Winery produces different kinds of wines and brandy products and sells them in many
countries under different registered trademarks, including the GALLO and ERNEST &
JULIO GALLO wine trademarks.

Respondent domestic corporation, Andersons, has been Gallo Winery’s exclusive wine
importer and distributor in the Philippines since 1991, selling these products in its own
name and for its own account.

On the other hand, petitioners Mighty Corporation and La Campana and their sister
company, Tobacco Industries of the Philippines (Tobacco Industries), are engaged in the
cultivation, manufacture, distribution and sale of tobacco products for which they have
been using the GALLO cigarette trademark since 1973.

On March 12, 1993, respondents sued petitioners in the Makati RTC for trademark and
trade name infringement and unfair competition, with a prayer for damages and
preliminary injunction.

Respondents charged petitioners with violating Article 6 of the Paris Convention for the
Protection of Industrial Property (Paris Convention) and RA 166 (Trademark Law),
specifically, Sections 22 and 23 (for trademark infringement), 29 and 30 (for unfair
competition and false designation of origin) and 37 (for trade name).
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

ISSUES: Whether the Trademark Law and the Paris Convention are the applicable laws
and not the Intellectual Property Code.

HELD: The Supreme Court ruled in the affirmative. Respondents sued petitioners on
March 12, 1993 for trademark infringement and unfair competition committed during the
effectivity of the Paris Convention and the Trademark Law.
In the Makati RTC decision of November 26, 1998, petitioners were held liable not only
under the aforesaid governing laws but also under the IP Code which took effect only on
January 1, 1998, or about five years after the filing of the complaint.

The Court of Appeals apparently did not notice the error and affirmed the Makati RTC
decision:

In the light of its finding that appellants’ use of the GALLO trademark on its
cigarettes is likely to create confusion with the GALLO trademark on wines
previously registered and used in the Philippines by appellee E & J Gallo Winery,
the trial court thus did not err in holding that appellants’ acts not only violated the
provisions of our trademark laws but also Article 6 of the Paris Convention.

The Supreme Court therefore ruled that the courts a quo erred in retroactively applying
the IP Code in this case. It is a fundamental principle that the validity and obligatory
force of a law proceed from the fact that it has first been promulgated. A law that is not
yet effective cannot be considered as conclusively known by the populace. To make a
law binding even before it takes effect may lead to the arbitrary exercise of the legislative
power.

The IP Code, repealing the Trademark Law, was approved on June 6, 1997. Section 241
thereof expressly decreed that it was to take effect only on January 1, 1998, without any
provision for retroactive application. Thus, the Makati RTC and the CA should have
limited the consideration of the present case within the parameters of the Trademark
Law and the Paris Convention, the laws in force at the time of the filing of the complaint.

 SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD. VS. DEVELOPERS

GROUP OF COMPANIES, INC., G.R. NO. 159938, 31 MAR 2006
FACTS: Respondent DGCI applied for and was granted registration of the ‘Shangri-La’
mark and ‘S’ logo in its restaurant business. Petitioner Shangri-La, chain of hotels and
establishments owned by the Kuok family worldwide, moved to cancel the registration of
the mark on the ground that it was illegally and fraudulently obtained and appropriated
by respondents. Petitioner also moved to register the mark and logo in its own name.
Later, respondent DGCI filed before the trial court a complaint for infringement against
petitioner alleging that DGCI had been the prior exclusive user and the registered owner
in the Philippines of said mark and logo. Petitioner Shangri-La argued that respondent
had no right to apply for the registration because it did not have prior actual commercial
use thereof. The trial court found for respondent. CA affirmed.

ISSUES: Whether or not respondent’s prior use of the mark is a requirement for its
registration.

HELD: Yes. While the present law on trademarks has dispensed with the requirement of
prior actual use at the time of registration, the law in force at the time of registration must
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

be applied. Under the provisions of the former trademark law, R.A. No. 166, as
amended, hence, the law in force at the time of respondent’s application for registration
of trademark, the root of ownership of a trademark is actual use in commerce. Section 2
of said law requires that before a trademark can be registered, it must have been
actually used in commerce and service for not less than two months in the Philippines
prior to the filing of an application for its registration. Trademark is a creation of use and
therefore actual use is a pre-requisite to exclusive ownership and its registration with the
Philippine Patent Office is a mere administrative confirmation of the existence of such
right.

While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a
registrant, neither did respondent DGCI, since the latter also failed to fulfill the 2-month
actual use requirement. What is worse, DGCI was not even the owner of the mark. For it
to have been the owner, the mark must not have been already appropriated (i.e., used)
by someone else. At the time of respondent DGCI’s registration of the mark, the same
was already being used by the petitioners, albeit abroad, of which DGCI’s president was
fully aware.

 MIRPURI VS. COURT OF APPEALS, G.R. NO. 114508, 19 NOV 1999

FACTS: Lolita Escobar applied for the registration of the trademark ‘Barbizon’ for her
products such as brassieres and ladies’ undergarments. Respondent Barbizon
Corporation, an American corporation, opposed alleging that petitioner’s mark is
confusingly similar to its own trademark ‘Barbizon.’ Escobar’s application was given due
course and her trademark was registered. Later, Escobar assigned all her rights to
petitioner Mirpuri who failed to file an Affidavit of Use resulting in the cancellation of the
trademark. Petitioner then applied for registration of the trademark to which respondent
Barbizon again opposed, now invoking the protection under Article 6bis of the Paris
Convention. The Director of Patents declaring respondent’s opposition was already
barred, petitioner’s application was given due course. CA reversed the judgment.

ISSUES: Whether or not respondent may invoke the protection under Article 6bis of the
Paris Convention.

HELD: The Convention of Paris for the Protection of Industrial Property, otherwise
known as the Paris Convention, is a multilateral treaty that seeks to protect industrial
property consisting of patents, utility models, industrial designs, trademarks, service
marks, trade names and indications of source or appellations of origin, and at the same
time aims to repress unfair competition. The Convention is essentially a compact among
various countries which, as members of the Union, have pledged to accord to citizens of
the other member countries trademark and other rights comparable to those accorded
their own citizens by their domestic laws for an effective protection against unfair
competition. Art. 6bis is a self-executing provision and does not require legislative
enactment to give it effect in the member country. It may be applied directly by the
tribunals and officials of each member country by the mere publication or proclamation
of the Convention, after its ratification according to the public law of each state and the
order for its execution.

The Philippines and the United States of America have acceded to the WTO Agreement.
Conformably, the State must reaffirm its commitment to the global community and take
part in evolving a new international economic order at the dawn of the new millennium.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

 SAMSON VS. DAWAY, G.R. NO. 160054-55, 21 JUL 2004

FACTS: Two information for unfair competition under Section 168.3 (a), in relation to
Section 170, of the Intellectual Property Code (Republic Act No. 8293), similarly worded
save for the dates and places of commission, were filed against petitioner Manolo P.
Samson, the registered owner of ITTI Shoes.

Samson filed a motion to suspend arraignment and other proceedings in view of the
existence of an alleged prejudicial question involved in a civil case for unfair competition
pending with the same branch of the RTC; and also, in view of the pendency of a petition
for review filed with the Secretary of Justice assailing the Chief State Prosecutor’s
resolution finding probable cause to charge petitioner-accused with unfair competition.
The RTC denied the motion to suspend arraignment and other proceedings.

Later, Samson filed a twin motion to quash the information and motion for
reconsideration of the order denying motion to suspend, this time challenging the
jurisdiction of the trial court over the offense charged. He contended that since under
Section 170 of R.A. No. 8293, the penalty of imprisonment for unfair competition does
not exceed six years, the offense is cognizable by the Municipal Trial Courts and not by
the Regional Trial Court, per R.A. No. 7691. Denied. Motion for reconsideration. Also
denied.

ISSUES:
1. Which court has jurisdiction over criminal and civil cases for violation of intellectual
property rights?
2. Did the respondent Judge gravely abuse his discretion in refusing to suspend the
arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44 on the
ground of – (a) the existence of a prejudicial question; and (b) the pendency of a
petition for review with the Secretary of Justice on the finding of probable cause for
unfair competition?

HELD: The petition was dismissed.

Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal
penalty for infringement of registered marks, unfair competition, false designation of
origin and false description or representation, is imprisonment from 2 to 5 years and a
fine ranging from Fifty Thousand Pesos to Two Hundred Thousand Pesos.

Corollarily, Section 163 of the same Code states that actions (including criminal and
civil) under Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the
proper courts with appropriate jurisdiction under existing laws.

RTC'S JURISDICTION: The existing law referred to in the foregoing provision is Section
27 of R.A. No. 166 (The Trademark Law) which provides that jurisdiction over cases for
infringement of registered marks, unfair competition, false designation of origin and false
description or representation, is lodged with the Court of First Instance (now Regional
Trial Court).

 EMERALD GARMENT MANUFACTURING CORPORATION VS. COURT OF

APPEALS, G.R. NO. 100098, 29 DEC 1995
FACTS: On 18 September 1981, private respondent H.D. Lee Co., Inc. filed with the
Bureau of Patents, Trademarks & Technology Transfer (BPTTT) a Petition for
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

Cancellation of Registration No. SR 5054 for the trademark "STYLISTIC MR. LEE" used
on skirts, jeans, blouses, socks, briefs, jackets, jogging suits, dresses, shorts, shirts and
lingerie under Class 25, issued on 27 October 1980 in the name of petitioner Emerald
Garment Manufacturing Corporation.

Private respondent averred that petitioner's trademark "so closely resembled its own
trademark, 'LEE' as previously registered and used in the Philippines cause confusion,
mistake and deception on the part of the purchasing public as to the origin of the goods.

On 19 July 1988, the Director of Patents rendered a decision granting private

respondent's petition for cancellation and opposition to registration. The Director of
Patents, using the test of dominancy, declared that petitioner's trademark was
confusingly similar to private respondent's mark because "it is the word 'Lee' which
draws the attention of the buyer and leads him to conclude that the goods originated
from the same manufacturer. It is undeniably the dominant feature of the mark.

ISSUES: Whether or not a trademark causes confusion and is likely to deceive the
public is a question of fact which is to be resolved by applying the "test of dominancy",
meaning, if the competing trademark contains the main or essential or dominant features
of another by reason of which confusion and deception are likely to result.

HELD: The word "LEE" is the most prominent and distinctive feature of the appellant's
trademark and all of the appellee's "LEE" trademarks. It is the mark which draws the
attention of the buyer and leads him to conclude that the goods originated from the same
manufacturer. The alleged difference is too insubstantial to be noticeable. The likelihood
of confusion is further made more probable by the fact that both parties are engaged in
the same line of business.

Although the Court decided in favor of the respondent, the appellee has sufficiently
established its right to prior use and registration of the trademark "LEE" in the
Philippines and is thus entitled to protection from any infringement upon the same. The
dissenting opinion of Justice Padilla is more acceptable.

 TAÑADA VS. ANGARA, G.R. NO. 118295, 02 MAY 1997

FACTS: Petitioners prayed for the nullification, on constitutional grounds, of the
concurrence of the Philippine Senate in the ratification by the President of the
Philippines of the Agreement Establishing the World Trade Organization (WTO
Agreement, for brevity) and for the prohibition of its implementation and enforcement
through the release and utilization of public funds, the assignment of public officials and
employees, as well as the use of government properties and resources by respondent-
heads of various executive offices concerned therewith.

They contended that WTO agreement violates the mandate of the 1987 Constitution to
“develop a self-reliant and independent national economy effectively controlled by
Filipinos x x x (to) give preference to qualified Filipinos (and to) promote the preferential
use of Filipino labor, domestic materials and locally produced goods” as (1) the WTO
requires the Philippines “to place nationals and products of member-countries on the
same footing as Filipinos and local products” and (2) that the WTO “intrudes, limits
and/or impairs” the constitutional powers of both Congress and the Supreme Court.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

ISSUES: Whether provisions of the Agreement Establishing the World Trade

Organization unduly limit, restrict and impair Philippine sovereignty specifically the
legislative power which, under Sec. 2, Article VI, 1987 Philippine Constitution is ‘vested
in the Congress of the Philippines.

HELD: No, the WTO agreement does not unduly limit, restrict, and impair the Philippine
sovereignty, particularly the legislative power granted by the Philippine Constitution. The
Senate was acting in the proper manner when it concurred with the President’s
ratification of the agreement.

While sovereignty has traditionally been deemed absolute and all-encompassing on the
domestic level, it is however subject to restrictions and limitations voluntarily agreed to
by the Philippines, expressly or impliedly, as a member of the family of nations.
Unquestionably, the Constitution did not envision a hermit-type isolation of the country
from the rest of the world. In its Declaration of Principles and State Policies, the
Constitution “adopts the generally accepted principles of international law as part of the
law of the land, and adheres to the policy of peace, equality, justice, freedom,
cooperation and amity, with all nations.” By the doctrine of incorporation, the country is
bound by generally accepted principles of international law, which are considered to be
automatically part of our own laws. One of the oldest and most fundamental rules in
international law is pacta sunt servanda — international agreements must be performed
in good faith. “A treaty engagement is not a mere moral obligation but creates a legally
binding obligation on the parties x x x. A state which has contracted valid international
obligations is bound to make in its legislations such modifications as may be necessary
to ensure the fulfillment of the obligations undertaken.”

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty.
By their voluntary act, nations may surrender some aspects of their state power in
exchange for greater benefits granted by or derived from a convention or pact. After all,
states, like individuals, live with coequals, and in pursuit of mutually covenanted
objectives and benefits, they also commonly agree to limit the exercise of their otherwise
absolute rights. Thus, treaties have been used to record agreements between States
concerning such widely diverse matters as, for example, the lease of naval bases, the
sale or cession of territory, the termination of war, the regulation of conduct of hostilities,
the formation of alliances, the regulation of commercial relations, the settling of claims,
the laying down of rules governing conduct in peace and the establishment of
international organizations. The sovereignty of a state therefore cannot in fact and in
reality, be considered absolute. Certain restrictions enter into the picture: (1) limitations
imposed by the very nature of membership in the family of nations and (2) limitations
imposed by treaty stipulations. As aptly put by John F. Kennedy, “Today, no nation can
build its destiny alone. The age of self-sufficient nationalism is over. The age of
interdependence is here.”

The WTO reliance on “most favored nation,” “national treatment,” and “trade without
discrimination” cannot be struck down as unconstitutional as in fact they are rules of
equality and reciprocity that apply to all WTO members. Aside from envisioning a trade
policy based on “equality and reciprocity,” the fundamental law encourages industries
that are “competitive in both domestic and foreign markets,” thereby demonstrating a
clear policy against a sheltered domestic trade environment, but one in favor of the
gradual development of robust industries that can compete with the best in the foreign
markets. Indeed, Filipino managers and Filipino enterprises have shown capability and
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

tenacity to compete internationally. And given a free trade environment, Filipino

entrepreneurs and managers in Hongkong have demonstrated the Filipino capacity to
grow and to prosper against the best offered under a policy of laissez faire.

WHEREFORE, the petition is DISMISSED for lack of merit.

 INTELLECTUAL PROPERTY ASSOCIATION OF THE PHILIPPINES VS. OCHOA,

G.R. NO. 204605, 19 JUL 2016
FACTS: The Intellectual Property Office of the Philippines (IPOPHL) recommended to
the Department of Foreign Affairs (DFA) that the Philippines should accede to the
Madrid Protocol.

After its own review, the DFA endorsed to the President the country's accession to the
Madrid Protocol.

The DFA determined that the Madrid Protocol was an executive agreement.

President Benigno C. Aquino III ratified the Madrid Protocol through an instrument of
accession. It entered into force in the Philippines on July 25, 2012.

IPAP, an association of more than 100 law firms and individual practitioners in
Intellectual Property Law to challenge the validity of the President's accession to the
Madrid Protocol without the concurrence of the Senate.

According to the IPAP, the Madrid Protocol is a treaty, not an executive agreement;
hence, respondent DFA Secretary Albert Del Rosario acted with grave abuse of
discretion in determining the Madrid Protocol as an executive agreement.

The IPAP has argued that the implementation of the Madrid Protocol in the Philippines,
specifically the processing of foreign trademark applications, conflicts with the IP Code.
The IPAP has insisted that Article 2 of the Madrid Protocol means that foreign trademark
applicants may file their applications through the International Bureau or the WIPO, and
their applications will be automatically granted trademark protection without the need for
designating their resident agents in the country.

The IPAP has prayed that the implementation of the Madrid Protocol in the Philippines
be restrained in order to prevent future wrongs considering that the IPAP and its
constituency have a clear and unmistakable right not to be deprived of the rights granted
them by the IP Code and existing local laws.

ISSUES:
1. Whether or not the accession to the Madrid Protocol is valid and constitutional;
2. Whether or not the Madrid Protocol is in conflict with the IP Code.

HELD:
1. Accession to the Madrid Protocol was constitutional.

Section 21, Article VII of the Constitution, states that "no treaty or international
agreement shall be valid and effective unless concurred in by at least two-thirds of all the
Members of the Senate."
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

International agreements involving political issues or changes of national policy and

those involving international arrangements of a permanent character usually take the
form of treaties. But international agreements embodying adjustments of detail carrying
out well-established national policies and traditions and those involving arrangements of
a more or less temporary nature usually take the form of executive agreements.

In view of the expression of state policy having been made by the Congress itself, the
IPAP is plainly mistaken in asserting that "there was no Congressional act that
authorized the accession of the Philippines to the Madrid Protocol."

Accordingly, DFA Secretary Del Rosario's determination and treatment of the Madrid
Protocol as an executive agreement, being in apparent contemplation of the express
state policies on intellectual property as well as within his power under Executive Order
No. 459, are upheld.

2. There is no conflict between the Madrid Protocol and the IP Code.

The IPAP also rests its challenge on the supposed conflict between the Madrid Protocol
and the IP Code, contending that the Madrid Protocol does away with the requirement of
a resident agent under Section 125 of the IP Code; and that the Madrid Protocol is
unconstitutional for being in conflict with the local law, which it cannot modify. The
Supreme Court did not agree.

The method of registration through the IPOPHL, as laid down by the IP Code, is distinct
and separate from the method of registration through the WIPO, as set in the Madrid
Protocol. Comparing the two methods of registration despite their being governed by two
separate systems of registration is thus misplaced.

The IPOPHL actually requires the designation of the resident agent when it refuses the
registration of a mark. Local representation is further required in the submission of the
Declaration of Actual Use, as well as in the submission of the license contract.

The Madrid Protocol accords with the intent and spirit of the IP Code, particularly on the
subject of the registration of trademarks. The Madrid Protocol does not amend or modify
the IP Code on the acquisition of trademark rights considering that the applications
under the Madrid Protocol are still examined according to the relevant national law. In
that regard, the IPOPHL will only grant protection to a mark that meets the local
registration requirements.

 MANZANO VS. COURT OF APPEALS, G.R. NO. 113388, 05 SEP 1997

FACTS: Petitioner Manzano filed with Philippine Patent Office (PPO) an action for the
cancellation of Letters Patent for a gas burner registered in the name of private
respondent Melecia Madolaria who subsequently assigned the same to private
respondent United Foundry. Petitioner alleged that the utility model covered by the
letters patent of Madaloria was not inventive, new, or useful, the specification did not
comply with the requirements of R.A. No. 165, and that respondent was not the original,
true, and actual inventor nor did she derive her rights from the same, and that
respondent was guilty of fraud or misrepresentation in applying for the letters patent.

Further, petitioner alleged that the utility model in question had already been in use and
on sale by the petitioner herself being a distributor/seller of the said gas burners in
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

the Philippines for more than one year before the respondent filed for the application;
and presented two undated brochures of two different Gas companies (Manila Gas
Corp. & Esso Gasul) which allegedly depict an identical gas burner as the one covered
in respondent’s letters patent. On the other hand, the respondent presented her husband
as lone witness to testify that respondent, through complaints of customers, devised a
way to solve the defects in the gas burners, and respondent’s innovation is now the
subject of the letters patent.

The Director of Patents denied the petition for cancellation, which was then affirmed by
the CA, on the ground that petitioner was not able to convincingly establish that the
patented utility model was not novel such that the petitioner failed to overcome her
burden and overturn the presumption of legality of the issuance of letters patent and
that respondent withheld material facts with intent to deceive which, if disclosed, would
have resulted in the refusal by the PPO to issue the letters patent.

ISSUES: Whether the CA erred in upholding the decision of the Director of Patents in
denying the petition for cancellation of Letters of Patent.

HELD: The Court ruled no, the CA did not err in affirming the decision of Director of
Patents. In issuing Letters Patent to private respondent Melecia Madolaria for an LPG
Burner, the PPO found her invention to be novel and patentable. The issuance of such
patent creates a presumption which yields only to clear and cogent evidence that the
patentee was the original and first inventor. The burden of proving want of novelty is on
him who avers it and the burden is a heavy one which is met only by clear and
satisfactory proof which overcomes every reasonable doubt.

The Director of Patents found that the standard of evidence sufficient to overcome the
presumption of legality of the issuance of letters patent to private respondent Melecia
Madolaria was not legally met by petitioner in her action for the cancellation of the
patent. The findings and conclusions of the Director of Patent were reiterated and
affirmed by the Court of Appeals.

The rule is settled that the findings of fact of the Director of Patents, especially when
affirmed by the Court of Appeals, are conclusive on this Court when supported by
substantial evidence. Petitioner has failed to show compelling grounds for a reversal of
the findings and conclusions of the Patent Office and the Court of Appeals.

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

 ABS-CBN CORP., VS. GOZON, G.R. NO. 195956, 11 MAR 2015

FACTS: The controversy arose from GMA-7’s news coverage on the homecoming of
Filipino overseas worker and hostage victim Angelo dela Cruz. Respondents are officers
and employees of GMA Network, Inc. (GMA-7). They are: Felipe Gozon (Gozon), GMA-
7 President; Gilberto R. Duavit, Jr. (Duavit, Jr.), Executive Vice-President; Marissa L.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

Flores (Flores), Vice-President for News and Public Affairs; Jessica A. Soho (Soho),
Director for News; Grace Déla Peña-Reyes (Dela Peña-Reyes), Head of News and
Public Affairs; John Oliver Manalastas ‘(Manalastas), Program Manager; and others. As
summarized by the Court of Appeals

Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi militants and as a
condition for his release, a demand was made for the withdrawal of Filipino troops in
Iraq. After negotiations, he was released by his captors and was scheduled to return to
the country in the afternoon. Occasioned by said homecoming and the public interest it
generated, both GMA Network, Inc and [petitioner] made their respective broadcasts and
coverage of the live event.

ABS-CBN “conducted live audio-video coverage of and broadcasted the arrival of

Angelo dela Cruz at the Ninoy Aquino International Airport (NAIA) and the subsequent
press conference.” ABS-CBN allowed Reuters Television Service (Reuters) to air the
footages it had taken earlier under a special embargo agreement.

under the special embargo agreement, no other Philippine subscriber of Reuters would
be allowed to use ABS-CBN footage without the latter’s consent.

GMA-7 subscribes to both Reuters and Cable News Network (CNN). It received a live
video feed of the coverage of Angelo dela Cruz’s arrival from Reuters.

GMA-7 immediately carried the live newsfeed in its program “Flash Report,” together
with its live broadcast. Allegedly, GMA-7 did not receive any notice or was not aware
that Reuters was airing footages of ABS-CBN.14 GMA-7’s news control room staff saw
neither the “No Access Philippines” notice nor a notice that the video feed was under
embargo in favor of ABS-CBN.

Assistant City Prosecutor Dindo Venturanza issued the Resolution finding probable
cause to indict Dela Peña-Reyes and Manalastas. Consequently, the Information for
violation of the Intellectual Property Code was filed.

Respondents filed the Petition for Review before the Department of Justice. Department
of Justice Secretary Raul M. Gonzalez (Secretary Gonzalez) ruled in favor of
respondents and held that good faith may be raised as a defense in the case.

Both parties moved for reconsideration of the Gonzalez Resolution.

Department of Justice Acting Secretary Alberto C. Agra (Secretary Agra) issued the
Resolution (Agra Resolution) that reversed the Gonzalez Resolution and found probable
cause to charge Dela Peña-Reyes and Manalastas for violation of the Intellectual
Property Code

Respondents assailed the Agra Resolution through the Petition for Certiorari with prayer
for issuance of a temporary restraining order and/or Writ of Preliminary Injunction before
the Court of Appeals. In the Resolution, the Court of Appeals granted the temporary
restraining order preventing the Department of Justice from enforcing the Agra
Resolution.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

ABS-CBN’s Motion for Reconsideration was denied. It then filed its Petition for Review
before this court assailing the Decision and Resolution of the Court of Appeals.

ISSUES: Whether news footage is copyrightable under the law

HELD: YES. The Intellectual Property Code is clear about the rights afforded to authors
of various kinds of work. Under the Code, “works are protected by the sole fact of their
creation, irrespective of their mode or form of expression, as well as of their content,
quality and purpose.” These include “[audio-visual works and cinematographic works
and works produced by a process analogous to cinematography or any process for
making audiovisual recordings.”

It is true that under Section 175 of the Intellectual Property Code, “news of the day and
other miscellaneous facts having the character of mere items of press information” are
considered unprotected subject matter. However, the Code does not state that
expression of the news of the day, particularly when it underwent a creative process, is
not entitled to protection

News or the event itself is not copyrightable. However, an event can be captured and
presented in a specific medium. As recognized by this court in Joaquin, television
“involves a whole spectrum of visuals and effects, video and audio.” News coverage in
television involves framing shots, using images, graphics, and sound effects. It involves
creative process and originality. Television news footage is an expression of the news

In this case, respondents admitted that the material under review — which is the subject
of the controversy — is an exact copy of the original. Respondents did not subject ABS-
CBN’s footage to any editing of their own. The news footage did not undergo any
transformation where there is a need to track elements of the original.

 ABS-CBN BROADCASTING CORP. VS. PHILIPPINE MULTI-MEDIA SYSTEM, INC.,

G.R. NO. 175769-70, 19 JAN 2009
FACTS: Petitioner ABS-CBN, a broadcasting corporation, filed a complaint against
respondent PMSI alleging that the latter’s unauthorized rebroadcasting of Channels 2
and 23 infringed on its broadcasting rights and copyright. PMSI posits that it was granted
a franchise to operate a digital direct-to-home satellite service and that the
rebroadcasting was in accordance with the NTC memo to carry television signals of
authorized television broadcast stations, which includes petitioner’s programs. The IPO
Bureau of Legal Affairs found PMSI to have infringed petitioner’s broadcasting rights and
ordered it to permanently desist from rebroadcasting. On appeal, the IPO Director
General found for PMSI. CA affirmed.

ISSUES: Whether or not petitioner’s broadcasting rights and copyright are infringed.

HELD: The Director-General of the IPO correctly found that PMSI is not engaged in
rebroadcasting and thus cannot be considered to have infringed ABS-CBN’s
broadcasting rights and copyright.

Section 202.7 of the IP Code defines broadcasting as “the transmission by wireless

means for the public reception of sounds or of images or of representations thereof;
such transmission by satellite is also ‘broadcasting’ where the means for decrypting are
provided to the public by the broadcasting organization or with its consent.” On the other
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

hand, rebroadcasting as defined in Article 3(g) of the International Convention for the
Protection of Performers, Producers of Phonograms and Broadcasting Organizations,
otherwise known as the 1961 Rome Convention, of which the Republic of the Philippines
is a signatory, is “the simultaneous broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization.” The Working Paper prepared by the
Secretariat of the Standing Committee on Copyright and Related Rights defines
broadcasting organizations as “entities that take the financial and editorial responsibility
for the selection and arrangement of, and investment in, the transmitted content.”
Evidently, PMSI would not qualify as a broadcasting organization because it does not
have the aforementioned responsibilities imposed upon broadcasting organizations,
such as ABS-CBN.

ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which
the viewers receive in its unaltered form. PMSI does not produce, select, or determine
the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off as
the origin or author of such programs. Insofar as Channels 2 and 23 are concerned,
PMSI merely retransmits the same in accordance with Memorandum Circular 04-08-88.
With regard to its premium channels, it buys the channels from content providers and
transmits on an as-is basis to its viewers. Clearly, PMSI does not perform the functions
of a broadcasting organization; thus, it cannot be said that it is engaged in
rebroadcasting Channels 2 and 23.

 KHO VS. CA, G.R. NO. 115758, 19 MAR 2002

FACTS: Petitioner‘s allegations are that they are doing business under the name and
style of KEC Cosmetics Laboratory, registered owner of Chin Chun Su and oval facial
cream container/case, and alleges that she also has patent rights on Chin Chun Su and
Device and Chin Chun Su Medicated Cream after purchasing the same from Quintin
Cheng, the registered owner thereof in the supplemental register of the Philippine Patent
Office and that Summerville advertised and sold petitioner’s cream products under the
brand name Chin Chun Su, in similar containers that petitioner uses, thereby misleading
the public, and resulting in the decline in the petitioner’s business sales and income;
and, that the respondents should be enjoined from allegedly infringing on the copyrights
and patents of the petitioner.

The respondents, on the other hand, alleged as their defense that (1) Summerville is the
exclusive and authorized importer, re-packer and distributor of Chin Chun Su products
manufactured by Shun Yi factory of Taiwan, (2) that the said Taiwanese manufacturing
company authorized Summerville to register its trade name Chin Chun Cu Medicated
Cream with the Philippine Patent office and Other appropriate governmental agencies;
(3) that KEC Cosmetics Laboratory of the petitioner obtained the copyrights through
misrepresentation and falsification; and, (4) that the authority of Quintin Cheng, assignee
of the patent registration certificate, to distribute and market Chin Chun Su products in
the Philippines had already terminated by the said Taiwanese manufacturing company.

ISSUES: Whether or not Kho has the sole right using the package of Chin Chun Su
products.

HELD: Petitioner has no right to support her claim for the exclusive use of the subject
trade name and its container. The name and container of a beauty cream product are
proper subjects of a trademark in as much as the same falls squarely within its definition.
In order to be entitled to exclusively use the same in the sale of the beauty cream
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

product, the user must sufficiently prove that she registered or used it before anybody
else did. The petitioner’s copyright and patent registration of the name and container
would not guarantee her the right to exclusive use of the same for the reason that they
are not appropriate subjects of the said intellectual rights. Consequently, a preliminary
injunction order cannot be issued for the reason that the petitioner has not proven that
she has a clear right over the said name and container to the exclusion of others, not
having proven that she has registered a trademark thereto or used the same before
anyone did.

 PEARL & DEAN (PHIL.), INC. VS. SHOEMART, INC., G.R. NO. 148222, 15 AUG 2003
FACTS: Pearl and Dean is a corporation engaged in the manufacture of advertising
display units referred to as light boxes and these light boxes were marketed under the
trademark Poster Ads. Pearl and Dean entered into a contract with Shoemart, Inc. for
the lease and installation of the light boxes in SM North Edsa. However, due to
construction constraints, Shoemart, Inc offered as an alternative SM Makati and SM
Cubao.

After Pearl and Dean’s contract was rescinded, exact copies of its light boxes were
installed in various SM malls, fabricated by Metro Industrial Services and later by EYD
Rainbow Advertising Corporation. Pearl and Dean sent a letter to Shoemart and its sister
company, North Edsa Marketing to cease using the light boxes and to remove them from
the malls, and demanded the discontinued used of the trademark “Poster Ads”.

Unsatisfied with the compliance of its demands, Pearl and Dean sued Shoemart which
was ruled by the trial court in their favor. On appeal, however, the Court of Appeals
reversed the trial court’s decision.

ISSUES: Whether Pearl and Dean’s copyright registration for its light boxes and the
trademark registration of “Poster Ads” preclude Shoemart and North Edsa Marketing
from using the same.

HELD: No, Pearl and Dean secured its copyright under the classification class “o” work.
This being so, its protection extended only to the technical drawings and not to the light
box itself. Pearl and Dean cannot exclude others from the manufacture, sale and
commercial use over the light boxes on the sole basis of its copyright, certificated over
the technical drawings. It cannot be the intention of the law that the right of exclusivity
would be granted for a longer time through the simplified procedure of copyright
registration with the National Library, without the rigor of defending the patentability of its
“invention” before the IPO and the public.

On the other hand, there has been no evidence that Pearl and Dean’s use of “Poster
Ads” was distinctive or well known. “Poster Ads” was too generic a name to identify it to
a specific company or entity. “Poster Ads” was generic and incapable of being used as a
trademark because it was used in the field of poster advertising, the very business
engaged by Pearl and Dean. Furthermore, Pearl and Dean’s exclusive right to the use of
“Poster Ads” is limited to what is written in its certificate of registration. Shoemart cannot
be held liable for the infringement of the trademark.

INTELLECTUAL PROPERTY OFFICE: STRUCTURE AND ADMINISTRATIVE

JURISDICTION
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

 Pest Management Association of the Philippines vs. Fertilizer and Pesticide Authority,
G.R. No. 156041, 21 Feb 2007
FACTS:
ISSUES:
HELD:

 IN-N-OUT BURGER, INC. VS. SEHWANI, INC., G.R. NO. 179127, 24 DEC 2008
FACTS: Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated under
the laws of California. It is a signatory to the Convention of Paris on Protection of
Industrial Property and the TRIPS Agreement. It is engaged mainly in the restaurant
business, but it has never engaged in business in the Philippines.

Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations organized
in the Philippines. Sometime in 1991, Sehwani filed with the BPTTT an application for
the registration of the mark “IN N OUT (the inside of the letter “O” formed like a star). Its
application was approved and a certificate of registration was issued in its name on
1993. In 2000, Sehwani, Incorporated and Benita Frites, Inc. entered into a Licensing
Agreement, wherein the former entitled the latter to use its registered mark, “IN N OUT.”

Sometime in 1997, In-N-Out Burger filed trademark and service mark applications with
the Bureau of Trademarks for the “IN-N-OUT” and “IN-N-OUT Burger & Arrow Design. In
2000, In-N-Out Burger found out that Sehwani, Incorporated had already obtained
Trademark Registration for the mark “IN N OUT (the inside of the letter “O” formed like a
star).” Also in 2000, In-N-Out Burger sent a demand letter directing Sehwani, Inc. to
cease and desist from claiming ownership of the mark “IN-N-OUT” and to voluntarily
cancel its trademark registration. Sehwani Inc. did not accede to In-N-Out Burger’s
demand but it expressed its willingness to surrender its registration for a consideration.

In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative
complaint against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition and
cancellation of trademark registration.

ISSUES:
1. Whether or not the Intellectual Property Office (an administrative body) have
jurisdiction of cases involving provisions of the IPC (e.g., unfair competition).
2. Whether or not there was unfair competition.
HELD: FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases
involving provisions of the IPC (e.g., unfair competition) due to the following reasons:
Section 10 of the Intellectual Property Code specifically identifies the functions of
the Bureau of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs. “The Bureau of Legal Affairs
shall have the following functions:
10.1 Hear and decide opposition to the application for registration
of marks; cancellation of trademarks; subject to the provisions of
Section 64, cancellation of patents and utility models, and
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

industrial designs; and petitions for compulsory licensing of

patents;
10.2 (a) Exercise original jurisdiction in administrative complaints
for violations of laws involving intellectual property rights;
Provided, that its jurisdiction is limited to complaints where the
total damages claimed are not less than two hundred thousand
pesos (P200,000): Provided, further, that availment of the
provisional remedies may be granted in accordance with the
Rules of Court. Xxx
Xxx
(vi) The cancellation of any permit, license, authority, or
registration which may have been granted by the Office, or the
suspension of the validity thereof for such period of time as the
Director of Legal Affairs may deem reasonable which shall not
exceed one (1) year;
Xxx
(viii) The assessment of damages;
Unquestionably, petitioner’s complaint, which seeks the
cancellation of the disputed mark in the name of respondent
Sehwani, Incorporated, and damages for violation of petitioner’s
intellectual property rights, falls within the jurisdiction of the IPO
Director of Legal Affairs.
While Section 163 thereof vests in civil courts jurisdiction over cases of unfair
competition, nothing in the said section states that the regular courts have sole
jurisdiction over unfair competition cases, to the exclusion of administrative bodies.
Sections 160 and 170, which are also found under Part III of the Intellectual Property
Code, recognize the concurrent jurisdiction of civil courts and the IPO over unfair
competition cases.
These two provisions read:
Section 160. Right of Foreign Corporation to Sue in Trademark or Service
Mark Enforcement Action. Any foreign national or juridical person who
meets the requirements of Section 3 of this Act and does not engage in
business in the Philippines may bring a civil or administrative action
hereunder for opposition, cancellation, infringement, unfair competition, or
false designation of origin and false description, whether or not it is
licensed to do business in the Philippines under existing laws.

Section 170. Penalties. Independent of the civil and administrative

sanctions imposed by law, a criminal penalty of imprisonment from two
(2) years to five (5) years and a fine ranging from Fifty thousand pesos
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

(P50,000) to Two hundred thousand pesos (P200,000), shall be imposed

on any person who is found guilty of committing any of the acts
mentioned in Section 155, Section168, and Subsection169.1.
Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction to
decide the petitioner’s administrative case against respondents and the IPO Director
General had exclusive jurisdiction over the appeal of the judgment of the IPO Director of
Legal Affairs.
SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and Benita
Frites were not using their registered trademark but that of In-n-Out Burger. Sehwani
and Benita Frites are also giving their products the general appearance that would likely
influence the purchasers to believe that their products are that of In-N-Out Burger. The
intention to deceive may be inferred from the similarity of the goods as packed and
offered for sale, and, thus, an action will lie to restrain unfair competition. The
respondents’ fraudulent intention to deceive purchasers is also apparent in their use of
the In-N-Out Burger in business signages.
The essential elements of an action for unfair competition are (1) confusing similarity in
the general appearance of the goods and (2) intent to deceive the public and defraud a
competitor. The confusing similarity may or may not result from similarity in the marks,
but may result from other external factors in the packaging or presentation of the goods.
The intent to deceive and defraud may be inferred from the similarity of the appearance
of the goods as offered for sale to the public. Actual fraudulent intent need not be shown.

 [1] IPO – Director of Legal Affairs decision

 In-N-Out Burger has legal capacity to sue in the Philippines because the
latter is a signatory of the Convention of Paris on Protection of Industrial
Property.
 IN-N-OUT Burger, Inc. – right to use its tradename and mark to the
exclusion of the others
 Respondents’ use of the petitioner’s mark was made in good faith and
therefore they are not guilty of unfair competition.
 IPO – Director General’s Decision
 Respondents are guilty of unfair competition.
 The following are ordered to be paid to In-N-Out Burger, inc.
 Damages in the amount of PHP 212, 574.28
 Exemplary damages in the amount of PHP 500,000
 Attorney’s fees and expenses of litigation in the amount of PHP 500,000
 CA Decision
 Regular courts, and not the BLA-IPO, have sole jurisdiction to hear and
decide cases involving provisions of the IPC.

 PHIL PHARMAWEALTH, INC. VS. PFIZER, INC. G.R. NO. 167715, 17 NOV 2010
FACTS: Pfizer is the registered owner of a Patent which was issued by the BLA-IPO on
July 16, 1987. The patent is valid until July 16, 2004. The claims of this Patent are
directed to a method of increasing the effectiveness of a Beta-lactam antibiotic in a
mammalian subject.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

Pfizer is marketing the product under the patent using the brand name Unasyn. The sole
and exclusive distributor of Unasyn products in the Philippines is Zuellig Pharma
Corporation, pursuant to a Distribution Services Agreement it executed with Pfizer Phils.
on January 23, 2001.

Sometime in January and February 2003, Pfizer came to know that petitioner submitted
bids for the supply of Unasyn to several hospitals without the consent of Pfizer and in
violation of their intellectual property rights.

Pfizer thus wrote to the hospitals and demanded that the latter immediately cease and
desist from accepting bids for the supply of Unasyn or awarding the same to entities
other than respondents. respondents, in the same letters sent through undersigned
counsel, also demanded that petitioner immediately withdraw its bids to supply Unasyn.

However, the demands made was ignored. Hence, Respondents prayed for permanent
injunction, damages and the forfeiture and impounding of the alleged infringing products.
An injunction was issued and effective for 90 days.

While the case was pending before the CA, respondents filed a Complaint with the
Regional Trial Court (RTC) of Makati City for infringement and unfair competition with
damages against herein petitioner. In said case, respondents prayed for the issuance of
a temporary restraining order and preliminary injunction to prevent herein petitioner from
importing, distributing, selling or offering for sale Unasyn products to any entity in the
Philippines. Respondents asked the trial court that, after trial, judgment be rendered
awarding damages in their favor and making the injunction permanent.

RTC directed the issuance of a writ of preliminary injunction prohibiting and restraining
Petitioner, its agents, representatives and assigns from importing, distributing or selling
Sulbactam Ampicillin products to any entity in the Philippines.

ISSUES: WON an injunctive relief be issued based on an action of patent infringement

when the patent allegedly infringed has already lapsed?

HELD: Petitioner argues that respondents’ exclusive right to monopolize the subject
matter of the patent exists only within the term of the patent. Petitioner claims that since
respondents’ patent expired on July 16, 2004, the latter no longer possess any right of
monopoly and, as such, there is no more basis for the issuance of a restraining order or
injunction against petitioner insofar as the disputed patent is concerned.

The Court agrees. Section 37 of Republic Act No. (RA) 165, which was the governing
law at the time of the issuance of respondents’ patent, provides:

Section 37. Rights of patentees. A patentee shall have the exclusive right to make, use
and sell the patented machine, article or product, and to use the patented process for
the purpose of industry or commerce, throughout the territory of the Philippines for the
term of the patent; and such making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent. It is clear from the
above-quoted provision of law that the exclusive right of a patentee to make, use and
sell a patented product, article or process exists only during the term of the patent.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

In the instant case, the patent, which was the basis of respondents in filing their
complaint with the BLA-IPO, was issued on July 16, 1987. This fact was admitted by
respondents themselves in their complaint. They also admitted that the validity of the
said patent is until July 16, 2004, which is in conformity with Section 21 of RA 165,
providing that the term of a patent shall be seventeen (17) years from the date of
issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an admission,
verbal or written, made by a party in the course of the proceedings in the same case,
does not require proof and that the admission may be contradicted only by showing that
it was made through palpable mistake or that no such admission was made. In the
present case, there is no dispute as to respondents’ admission that the term of their
patent expired on July 16, 2004. Neither is their evidence to show that their admission
was made through palpable mistake. Hence, contrary to the pronouncement of the CA,
there is no longer any need to present evidence on the issue of expiration of
respondents’ patent.

On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004,
respondents no longer possess the exclusive right to make, use and sell the articles or
products covered by Philippine Letters Patent No. 21116.

 E.I DUPONT DE NEMOURS AND CO. VS. DIRECTOR FRANCISCO, G.R. NO.
174379, 31 AUG 2016
FACTS: On July 10, 1987, E.I. Dupont Nemours filed Philippine Patent Application No.
35526 before the Bureau of Patents, Trademarks, and Technology Transfer. The
application was for Angiotensin II Receptor Blocking Imidazole (losartan), an invention
related to the treatment of hypertension and congestive heart failure. The product was
produced and marketed by Merck, Sharpe, and Dohme Corporation (Merck), E.I. Dupont
Nemours’ licensee, under the brand names Cozaar and Hyzaar. The patent application
was handled by Atty. Nicanor D. Mapili (Atty. Mapili), a local resident agent who handled
a majority of E.I. Dupont Nemours’ patent applications in the Philippines from 1972 to
1996.9 On December 19, 2000, E.I. Dupont Nemours’ new counsels the Intellectual
Property Office a letter requesting that an office action be issued on Philippine Patent
Application No. 35526.

In its Petition for Revival, E.I. Dupont Nemours argued that its former counsel, Atty.
Mapili, did not inform it about the abandonment of the application, and it was not aware
that Atty. Mapili had already died.

ISSUES: Whether a patent holder of inventions relating to food or medicine enjoys

absolute monopoly over the patent

HELD: The Supreme Court ruled in the negative. A patent holder of inventions relating to
food or medicine does not enjoy absolute monopoly over the patent. Both Republic Act
No. 165 and the Intellectual Property Code provide for compulsory licensing.
Compulsory licensing is defined in the Intellectual Property Code as the “grant a license
to exploit a patented invention, even without the agreement of the patent owner.”
Furthermore, the patent holder’s proprietary right over the patent only lasts for three (3)
years from the grant of the patent, after which any person may be allowed to
manufacture, use, or sell the invention subject to the payment of royalties.

 PALAO VS. FLORENTINO INTERNATIONAL, INC., G.R. NO. 186967, 18 JAN 2017
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

FACTS: On July 30, 2008, Florentino appealed to the Office of the Director General of
the Intellectual Property Office. This appeal's Verification and Certification of Non-Forum
Shopping was signed by Atty. John Labsky P. Maximo (Atty. Maximo) of the firm Balgos
and Perez. However, Florentino failed to attach to its appeal a secretary's certificate or
board resolution authorizing Balgos and Perez to sign the Verification and Certification of
Non-Forum Shopping. Thus, on August 14, 2008, the Office of the Director General
issued the Order requiring Florentino to submit proof that Atty. Maximo or Balgos and
Perez was authorized to sign the Verification and Certification ofNon-Forum Shopping.

In his Order dated September 22, 2008, Intellectual Property Office Director General
Adrian S. Cristobal, Jr. (Director General Cristobal) dismissed Florentino's appeal He
noted that the Secretary's Certificate pertained to an August 14, 2008 Resolution issued
by Florentino' s Board of Directors, and reasoned that the same Certificate failed to
establish the authority of Florentino's counsel to sign the Verification and Certification of
Non-Forum Shopping as of the date of the filing of Florentino's appeal (i.e., on July 30,
2008).

Florentino then filed before the Court of Appeals a Petition for Review under Rule 43 of
the 1997 Rules of Civil Procedure. In its assailed January 8, 2009 Decision,22 the Court
of Appeals faulted Director General Cristobal for an overly strict application of procedural
rules. Thus, it reversed Director General Cristobal's September 22, 2008 Order and
reinstated Florentino' s appeal.

ISSUES: Whether the Court of Appeals erred in reversing the September 22, 2008
Order of Intellectual Property Office Director General Adrian S. Cristobal, Jr., and in
reinstating respondent Florentino III International, Inc.'s appeal.

HELD: The need for a certification of non-forum shopping to be attached to respondent's

appeal before the Office of the Director General of the Intellectual Property Office is
established. Section 3 of the Intellectual Property Office's Uniform Rules on Appeal
specifies the form through which appeals may be taken to the Director General.
These requirements notwithstanding, the Intellectual Property Office's own Regulations
on Inter Partes Proceedings (which governs petitions for cancellations of a mark, patent,
utility model, industrial design, opposition to registration of a mark and compulsory
licensing, and which were in effect when respondent filed its appeal) specify that the
Intellectual Property Office "shall not be bound by the strict technical rules of procedure
and evidence.

Given these premises, it was an error for the Director General of the Intellectual Property
Office to have been so rigid in applying a procedural rule and dismissing respondent's
appeal. It is reasonable, therefore-consistent with the precept of liberally applying
procedural rules in administrative proceedings, and with the room allowed by
jurisprudence for substantial compliance with respect to the rule on certifications of non-
forum shopping-to construe the error committed by respondent as a venial lapse that
should not be fatal to its cause.

 LEVI STRAUSS VS. ATTY. BLANCAFLOR, G.R. NO. 206779, 20 APR 2016
FACTS: Levi's is a corporation registered under the laws of the State of Delaware,
United States of America.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

On October 11, 1999, Levi's filed an application before the Intellectual Property Office
(IPO) to register the mark TAB DEVICE covering various goods.

The TAB DEVICE trademark is described as a small marker or tab of textile material,
appearing on and affixed permanently to the garment's exterior and is visible while the
garment is worn.

On February 17, 2006, the trademark examiner rejected Levi's trademark application
because there is nothing in the subject mark that serves to distinguish Levi's goods;
hence, the tab itself does not function as a trademark. The trademark examiner also
stated that Levi's cannot exclusively appropriate the tab's use because a tab of textile is
customarily used on the products covered by the trademark application.

On July 5, 2006, Levi's appealed the examiner's rejection of the trademark application to
the IPO Director of Trademarks (Director). The Director issued a decision that affirmed
the trademark examiner's findings. On August 22, 2007, Levi's filed a motion for
reconsideration of the Director's decision, which the Director denied for "lack of merit."

On March 24, 2011, Levi's filed its Appeal Memorandum with the respondent IPO
Director-General, Atty. Ricardo R. Blancaflor (Director-General), and provided a list of
certificates of registration in other countries covering "nearly identical TAB DEVICE
trademark registrations."

ISSUES: Whether or not the CA gravely erred in dismissing Levi's CA petition for review
on the ground that Levi's filed the CA petition beyond the extended reglementary period.

HELD: Denied for lack of merit.

The rule is clear that an appeal to the CA must be filed within a period of fifteen (15)
days. While an extension of fifteen (15) days and a further extension of another fifteen
(15) days may be requested, the second extension may be granted at the CA's
discretion and only for the most compelling reason.

Motions for extensions are not granted as a matter of right but in the sound discretion of
the court, and lawyers should never presume that their motions for extensions or
postponement will be granted or that they will be granted the length of time they pray for.
Further, the general rule is that a second motion for extension is not granted, except
when the CA finds a compelling reason to grant the extension.

The CA correctly held that Levi's failed to present a compelling reason to grant the
second motion for extension.

Levi's, by its own admission, only decided to proceed with the filing of the CA petition for
review after the lapse of the first fifteen-day period for filing. Levi's late decision
necessarily delayed the execution and notarization of the SPA and, consequently, the
Philippine Consulate Offices' authentication of the SPA. Levi's cannot excuse its delay
by citing its failure to anticipate the Philippine Consulate Office's closure due to the
observance of the Philippine holidays. Certainly, Levi's own delay is not a compelling
reason for the grant of a second extension to file a CA petition for review.

Levi's cannot also assume that its second motion for extension would be granted since
the CA did not immediately act on the first and second motions for extension.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

Levi's request for the Court to review its case on the merits should be denied as well.
The ruling of the IPO became final and executory after the period to appeal expired
without the perfection of Levi's' appeal. The Court, therefore, may no longer review it.

 SOCIÉTÉ DES PRODUITS NESTLÉ S.A. VS. PUREGOLD PRICE CLUB, INC., G.R.
NO. 217194, 06 SEP 2017
FACTS: Petitioner Societe des Produits Nestle, S.A. (Nestle) is a corporation organized
and existing under the laws of Switzerland which is engaged in the business of
marketing and selling of coffee, ice cream, chocolates, cereals, sauces, soups,
condiment mixes, dairy and non-dairy products, etc. Respondent Puregold Price Club,
Inc. (Puregold) is a corporation organized under Philippine law which is engaged in the
business of trading goods such as consumer goods on wholesale or on retail basis.

On 14 June 2007, Puregold filed an application for the registration of the trademark
“COFFEE MATCH” with the Intellectual Property Office (IPO). The registration was filed
by Puregold for use on coffee, tea, cocoa, sugar, artificial coffee, flour and preparations
made from cereals, bread, pastry and confectionery, and honey under Class 30 of the
International Classification of Goods.

On 5 December 2008, Nestle filed an opposition against Puregold’s application for

registration. Nestle alleged that it is the exclusive owner of the “COFFEE-MATE”
trademark and that there is confusing similarity between the “COFFEE-MATE”
trademark and Puregold’s “COFFEE MATCH” application. Nestle alleged that “COFFEE-
MATE” has been declared an internationally well-known mark and Puregold’s use of
“COFFEE MATCH” would indicate a connection with the goods covered in Nestle’s
“COFFEE-MATE” mark because of its distinct similarity. Nestle claimed that it would
suffer damages if the application were granted since Puregold’s “COFFEE MATCH”
would likely mislead the public that the mark originated from Nestle.

The Decision of the Bureau of Legal Affairs-Intellectual Property Office

In a Decision dated 16 April 2012, the Bureau of Legal Affairs-Intellectual Property Office
(BLA-IPO) dismissed Nestle’s opposition. The BLA-IPO ruled that Nestle’s opposition
was defective because the verification and certification against forum shopping attached
to Nestle’s opposition did not include a board of directors’ resolution or secretary’s
certificate stating Mr. Dennis Jose R. Barot’s (Barot) authority to act on behalf of Nestle.
The BLA-IPO ruled that the defect in Nestle’s opposition was sufficient ground to
dismiss.

ISSUES: Whether or not the case was properly dismissed on the ground of lack of
certification for non-forum shopping.

HELD: YES. Nestle, itself, acknowledged in this petition the absence of a board
resolution or secretary’s certificate issued by the board of directors of Nestle to prove the
authority of Barot to sign the certification against forum shopping on behalf of Nestle, to
wit: “[t]hus, while there is no board resolution and/or secretary’s certificate to prove the
authority of Dennis Jose R. Barot to file the petition and Verification/Certification of Non-
Forum Shopping on behalf of petitioner-corporation, there is a Power of Attorney
evidencing such authority.” The power of attorney submitted by Nestle in favor of Barot
was signed by Céline Jorge. However, the authority of Céline Jorge to sign the power of
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

attorney on behalf of Nestle, allowing Barot to represent Nestle, was not accompanied
by a board resolution or secretary’s certificate from Nestle showing that Céline Jorge
was authorized by the board of directors of Nestle to execute the power of attorney in
favor of Barot.

Accordingly, the CA did not err in ruling that the petition for review should be dismissed
due to the failure of Nestle to comply with the proper execution of the certification
against forum shopping required by Section 5, Rule 7 of the Rules of Court.

THE LAW ON COPYRIGHT & OTHER RELATED RIGHTS

 WILSON ONG CHING KLAN CHUAN VS. COURT OF APPEALS, G.R. NO. 130360,
15 AUG 2001
FACTS: Petitioner imports vermicelli from China National Cereals Oils and Foodstuffs,
based in Beijing, China, under the firm name C.K.C. Trading. He repacks it in
cellophane wrappers with a design of two-dragons and the TOWER trademark on the
uppermost portion.

Ong acquired a Certificate of Copyright Registration from the National Library on June 9,
1993 on the said design.

Ong filed against Tan a verified complaint for infringement of copyright with damages
and prayer for temporary restraining order or writ of preliminary injunction with the RTC-
QC.
 Ong alleged that he was the holder of a Certificate of Copyright Registration over
the cellophane wrapper with the two-dragon design, and that Tan used an
identical wrapper in his business. In his prayer for a preliminary injunction in
addition to damages, he asked that Tan be restrained from using the wrapper.

Tan filed an opposition alleging that Ong was not entitled to an injunction.
 According to Tan, Ong did not have a clear right over the use of the trademark
Pagoda and Lungkow vermicelli as these were registered in the name of
Ceroilfood Shandong, based in Qingdao, China.
 Further, Tan averred that he was the exclusive distributor in the Philippines of the
Pagoda and Lungkow vermicelli and was solely authorized to use said
trademark.
 He added that Ong merely copied the two-dragon design from Ceroilfood
Shandong which had the Certificates of Registration issued by different
countries.
 Private respondent alleges that the trademark PAGODA BRAND was registered
in China on October 31, 1979 while the trademark LUNGKOW VERMICELLI
WITH TWO-DRAGON DEVICE was registered on August 15, 1985.

Trial Court issued a temporary restraining order on the same date the complaint was
filed. It likewise issued the writ in Ong’s favor upon his filing of a P100,000.00 bond.

CA gave due course and granted the petition. The lower court’s orders, as well as the
writ of preliminary injunction, were set aside. Ong filed a MR from which CA modified its
decision and made the injunction permanent.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

ISSUES: W/N the issuance of the writ of preliminary injunction in favor of private
respondent was proper?

HELD: Petition is partially granted. The prayer for a writ of preliminary injunction to
prohibit Tan from using the cellophane wrapper with two-dragon device is denied, but
the finding of the respondent appellate court that Ong’s copyrighted wrapper is a copy of
that of Ceroilfood Shandong is SET ASIDE for being premature. Case was remanded to
RTC.

RATIO:
A person to be entitled to a copyright must be the original creator of the work. He must
have created it by his own skill, labor and judgment without directly copying or evasively
imitating the work of another. The copies of the certificates of copyright registered in the
name of Ceroilfood Shandong sufficiently raise reasonable doubt. With such a doubt,
the preliminary injunction asked by Ong against Tan is unavailing.

To be entitled to an injunctive writ, petitioner must show, inter alia, the existence of a
clear and unmistakable right and an urgent and paramount necessity for the writ to
prevent serious damage. In this case, the Court found that petitioner’s right has not been
clearly and unmistakably demonstrated.

The Court added it was premature for the CA to declare that the design of petitioner’s
wrapper is a copy of the wrapper allegedly registered by Ceroilfood Shandong. The only
issue brought before the CA involved the grave abuse of discretion allegedly committed
by the trial court in granting the writ of preliminary injunction, and not on the merits of the
infringement case. That matter remains for decision after appropriate proceedings at the
trial court.

 SAMBAR VS. LEVI STRAUSS & CO., G.R. NO. 132604, 06 MAR 2002
FACTS: Private respondents alleged in their complaint that Levi Strauss and Co.
(LS&Co.), an internationally known clothing manufacturer, own the arcuate design
trademark which was registered under US Trademark Registration No. 404,248 on
November 16, 1943. That sometime in 1987, CVSGIC and Venancio Sambar, without
the consent and authority of private respondents and in infringement and unfair
competition, sold and advertised, and despite demands to cease and desist, continued
to manufacture, sell and advertise denim, pants under the brand name “Europress” with
back pockets bearing a design similar to the arcuate trademark of private respondents,
thereby causing confusion on the buying public, prejudiced to private respondent’s
goodwill and property right.

Sambar filed a separate answer. He admitted that copyright Registration No. 1-1998 was
issued to him, but he denied using it. He said he did not authorize anyone to use the
copyrighted design.

Trial court issued a writ of preliminary injunction enjoining CVSGIC and petitioner from
manufacturing, advertising and selling pants with the arcuate design on their back
pockets.

Private respondents moved for reconsideration praying for the cancellation of petitioner’s
copyright registration.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

Trial court granted the prayer.

Petitioner appealed to the Court of Appeals which affirmed the ruling of the trial court.

ISSUES: Whether petitioner infringe on private respondent’s arcuate design.

HELD: To be entitled to a copyright, the thing being copyrighted must be original,

created by the author through his own skill, labor and judgment, without directly copying
or evasively imitating the work of another.

Both the trial court and the Court of Appeals found there was infringement.

 UNITED FEATURE SYNDICATE, INC. VS. MUNSINGWEAR CREATION

MANUFACTURING CO., G.R. NO. 76193, 09 NOV 1989
FACTS:
a. On October 2, 1984, the decision sought to be appealed was rendered by the
Philippine Patent Office and a copy thereof was received by counsel for
petitioner-appellant on October 3, 1984 — not October 9, 1984 as stated in the
Notice of Appeal. There can be no doubt about the decision having been
received by petitioner-appellant's counsel on October 3, 1984 for this is clearly
written in the Notice of Decision (p. 61, Original Record), and in point of fact the
date of receipt cannot be October 9, 1984, as declared in the Notice of Appeal (p.
1, Rollo), because in the motion for reconsideration subsequently filed by
petitioner-appellant it was stated that a copy of the decision was received on
October 4, 1984 (p. 80, Original Record).
b. On October 18, 1984 — as shown in the stamp mark of the Philippine Patent
Office (p. 80, Original Record) or on the 15th and last day either for appealing or
for moving for reconsideration, petitioner-appellant filed a motion for
reconsideration.
c. Possibly realizing the fatal defect in its motion for reconsideration, petitioner-
appellant subsequently filed a motion to set for hearing its motion for
reconsideration. This was done, however, only on October 31, 1984 (p. 162,
Original Record).

The motion for reconsideration filed on the last day, fatally failing as it did to
contain a notice of hearing, said pleading did not interrupt the period for
appealing, for the motion was nothing but a piece of scrap paper

This case arose from petition filed by petitioner for the cancellation of the registration of
trademark CHARLIE BROWN in the name of respondent MUNSINGWEAR. According to
petitioner, (1) respondent was not entitled to the registration of the mark HARLIE
BROWN, & DEVICE at the time of application for registration 2) that CHARLIE BROWN
is a character creation or a pictorial illustration, the copyright to which is exclusively
owned worldwide by the petitioner; (3) that as the owner of the pictorial illustration
CHARLIE BROWN, petitioner has since 1950 and continuously up to the present, used
and reproduced the same to the exclusion of others; (4) that the respondent-registrant
has no bona fide use of the trademark in commerce in the Philippines prior to its
application for registration
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

Philippine Patent Office Ruling: that a copyright registration like that of the name and
likeness of CHARLIE BROWN may not provide a cause of action for the cancellation of
a trademark registration

CA Ruling: Denied for lack of date of hearing in their notice of appeal.

ISSUES:
1. Whether the respondent court of appeals acted in excess of jurisdiction and/or
committed grave abuse of discretion when it based its resolution in dismissing its
appeal on strict technical rules of procedure as enunciated in rule 15 of the rules
of court instead of relying on the policy of the Philippine patent office as stressed
in rule 169, as amended, of the rules of practice in trademark cases.
2. Whether the respondent court of appeals committed grave abuse of discretion
amounting to excess of jurisdiction when by dismissing the appeal to it from the
decision of the director of patents, it knowingly disregarded its own decision in
ac-gr. Sp. No. 0342, which was affirmed by this honorable supreme court to the
effect that a copyrighted character may not be appropriated as a trademark by
another under presidential decree no. 49.
3. Whether, assuming arguendo, but only assuming, that the decision of the director
of patents in the case at bar had already become final when it was appealed to
the court of appeals, the latter, by reason of the supervening facts after the
decision appealed from was rendered, should have harmonized the decision with
law, the demands of justice and equity.

HELD:
1. The petitioner is impressed with merit.

Siguenza v. Court of Appeals, Court stressed that the right to appeal should not
be lightly disregarded by a stringent application of rules of procedure especially
where the appeal is on its face meritorious and the interest of substantial justice
would be served by permitting the appeal.

In the case at bar dispensing with such procedural steps would not anyway affect
substantially the merits of their respective claims as held in Velasco v. Court of
Appeals.
2. Petitioners' argument hold water.

The decision of the Philippine Patent office was based on the case of Children's
Television Workshop v. touch of Class. However, when the latter case was
appealed to the then Intermediate Appellate Court, docketed as A.C. G.R. SP
No. 03432, the appellate court reversed the decision of the Director holding said
appealed decision as illegal and contrary to law. this reversal was affirmed by
this Court on August 7, 1985 in G.R. No. 71210 by denying the petition of
respondent Touch of Class.

The Court of Appeals in reversing the Director of Patent's decision in Touch of

Class, Inc. succintly said:

The Patents Office ruled that a trademark, unlike a label, cannot be

copyrighted. The "Cookie Monster" is not, however, a trademark. It is a
character in a TV series entitled "Sesame Street." It was respondent
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

which appropriated the "Cookie Monster" as a trademark, after it has

been copyrighted. We hold that the exclusive right secured by PD 49 to
the petitioner precludes the appropriation of the "Cookie Monster" by the
respondent.

Pertinently, Section 2 of Presidential Decree No. 49, otherwise known as the

"Decree on Intellectual Property", provides:
Section 2. The rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following classes of works:
xxx xxx xxx

(O) Prints, pictorial illustrations, advertising copies, labels, tags and box
wraps. ...
Therefore, since the name "CHARLIE BROWN" and its pictorial
representation were covered by a copyright registration way back in 1950
the same are entitled to protection under PD No. 49.

But;

An examination of the records show that the only appreciable defense of

respondent-registrant is embodied in its answer, which reads:
It uses, the trademark "CHARLIE BROWN" & "DEVICE" on children's
wear such as T- shirts, undershirts, sweaters, brief and sandos, in class
25; whereas "CHARLIE BROWN" is used only by petitioner as character,
in a pictorial illustration used in a comic strip appearing in newspapers
and magazines. It has no trademark significance and therefore
respondent-registrant's use of "CHARLIE BROWN" & "DEVICE" is not in
conflict with the petitioner's use of "CHARLIE BROWN" (Rollo, p. 97 [21]).
3. Yes, decision should be harmonized in favor of justice and equity.

The court is bound to recognize their duty to uphold justice and equity and at the
same time interpreting a solemn international commitment of the Philippines
embodied in a multilateral treaty to which we are a party and which we entered
into because it is in our national interest to do so.

 COLUMBIA PICTURES, INC. VS. COURT OF APPEALS, G.R. NO. 110318, 28 AUG
1996
FACTS: Complainants lodged a formal complaint with the NBI for violation of PD No. 49
and sought its assistance in their anti-film piracy drive. Agents of the NBI and private
researchers made discreet surveillance on various video establishments in Metro Manila
including Sunshine. NBI Senior Agent Lauro C. Reyes applied for a search warrant with
the court a quo against Sunshine seeking the seizure, among others, of pirated video
tapes of copyrighted films all of which were enumerated in a list attached to the
application, and, television sets, video cassettes and/or laser disc recordings equipment
and other machines and paraphernalia used or intended to be used in the unlawful
exhibition, showing, reproduction, sale, lease or disposition of videograms tapes in the
premises above described.

The search warrant was served. The NBI Agents found and seized various video tapes
of duly copyrighted motion pictures/films owned or exclusively distributed by private
complainants, and machines, equipment, television sets, paraphernalia, materials,
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

accessories all of which were included in the receipt for properties accomplished by the
raiding team.

A “Return of Search Warrant” was filed with the Court. A”Motion To Lift the Order of
Search Warrant” was filed but was later denied for lack of merit. A Motion for
reconsideration of the Order of denial was filed. Petitioners appealed to the CA but it
was dismissed as well as the MR was denied.

ISSUES: Whether or not Columbia Pictures as a legal standing maintain a suit in

Philippine Courts

HELD: The obtainment of a license prescribed by Section 125 of the Corporation Code
is not a condition precedent to the maintenance of any kind of action in Philippine courts
by a foreign corporation, However, under the aforequoted provision, no foreign
corporation shall be permitted to transact business in the Philippines, as this phrase is
understood under the Corporation Code, unless it shall have the license required by law,
and until it complies with the law in transacting business here, it shall not be permitted to
maintain any suit in local courts. As thus interpreted, any foreign corporation not doing
business in the Philippines may maintain an action in our courts upon any cause of
action, provided that the subject matter and the defendant are within the jurisdiction of
the court. It is not the absence of the prescribed license but “doing business” in the
Philippines without such license which debars the foreign corporation from access to our
courts. In other words, although a foreign corporation is without license to transact
business in the Philippines, it does not follow that it has no capacity to bring an action.
Such license is not necessary if it is not engaged in business in the Philippines.

No general rule or governing principles can be laid down as to what constitutes “doing”
or “engaging in” or “transacting” business. Each case must be judged in the light of its
own peculiar environmental circumstances. The true tests, however, seem to be whether
the foreign corporation is continuing the body or substance of the business or enterprise
for which it was organized or whether it has substantially retired from it and turned it over
to another.

The Corporation Code does not itself define or categorize what acts constitute doing or
transacting business in the Philippines. Jurisprudence has, however, held that the term
implies a continuity of commercial dealings and arrangements, and contemplates, to that
extent, the performance of acts or works or the exercise of some of the functions
normally incident to or in progressive prosecution of the purpose and subject of its
organization.

 CHING VS. SALINAS, SR., G.R. NO. 161295, 29 JUN 2005

FACTS: Petitioner Ching is a maker and manufacturer of a utility model, Leaf Spring Eye
Bushing for Automobile, for which he holds certificates of copyright registration.
Petitioner’s request to the NBI to apprehend and prosecute illegal manufacturers of his
work led to the issuance of search warrants against respondent Salinas, alleged to be
reproducing and distributing said models in violation of the IP Code. Respondent moved
to quash the warrants on the ground that petitioner’s work is not artistic in nature and is
a proper subject of a patent, not copyright. Petitioner insists that the IP Code protects a
work from the moment of its creation regardless of its nature or purpose. The trial court
quashed the warrants. Petitioner argues that the copyright certificates over the model
are prima facie evidence of its validity. CA affirmed the trial court’s decision.
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

ISSUES:
1. Whether or not petitioner’s model is an artistic work subject to copyright protection.
2. Whether or not petitioner is entitled to copyright protection on the basis of the
certificates of registration issued to it.

HELD:
1. NO. As gleaned from the specifications appended to the application for a copyright
certificate filed by the petitioner, the said Leaf Spring Eye Bushing for Automobile
and Vehicle Bearing Cushion are merely utility models. As gleaned from the
description of the models and their objectives, these articles are useful articles which
are defined as one having an intrinsic utilitarian function that is not merely to portray
the appearance of the article or to convey information. Plainly, these are not literary
or artistic works. They are not intellectual creations in the literary and artistic domain,
or works of applied art. They are certainly not ornamental designs or one having
decorative quality or value. Indeed, while works of applied art, original intellectual,
literary and artistic works are copyrightable, useful articles and works of industrial
design are not. A useful article may be copyrightable only if and only to the extent
that such design incorporates pictorial, graphic, or sculptural features that can be
identified separately from, and are capable of existing independently of the utilitarian
aspects of the article. In this case, the bushing and cushion are not works of art.
They are, as the petitioner himself admitted, utility models which may be the subject
of a patent.
2. NO. No copyright granted by law can be said to arise in favor of the petitioner
despite the issuance of the certificates of copyright registration and the deposit of the
Leaf Spring Eye Bushing and Vehicle Bearing Cushion. Indeed, in Joaquin, Jr. v.
Drilon and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated, the Court
ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or
independent right granted by the statute, and not simply a pre-existing right regulated by
it. Being a statutory grant, the rights are only such as the statute confers, and may be
obtained and enjoyed only with respect to the subjects and by the persons, and on terms
and conditions specified in the statute. Accordingly, it can cover only the works falling
within the statutory enumeration or description.

Ownership of copyrighted material is shown by proof of originality and copyrightability.

To discharge his burden, the applicant may present the certificate of registration
covering the work or, in its absence, other evidence. A copyright certificate provides
prima facie evidence of originality which is one element of copyright validity. It
constitutes prima facie evidence of both validity and ownership and the validity of the
facts stated in the certificate.

 LAKTAW VS. PAGLINAWAN, G.R. NO. L-11937, 01 APR 1918

FACTS: The plaintiff, Pedro Laktaw was, according to the laws regulating literary
properties, the registered owner of a literary work entitled Diccionario Hispano Tagalog
(Spanish-Tagalog Dictionary) published in the City of Manila in 1889 by the printing
establishment La Opinion. The defendant, Mamerto Paglinawan, without consent of the
plaintiff, reproduced the said literary work, improperly copied the greater part thereof in
the work published by him and entitled Diccionariong Kastila-Tagalog (Spanish- Tagalog
Dictionary). The act of Paglinawan, which is a violation of Article 7 of the Law of January
INTELLECTUAL PROPERTY LAWS CASE DIGESTS: Escalona, JM

10, 1879, on Intellectual Property, caused irreparable injuries to Laktaw, who was
surprised when, on publishing his new work entitled Diccionario Tagalog-Hispano
(Tagalog-Spanish Dictionary) he learned of the fact, and that damages occasioned to
the plaintiff by the publication of defendant’s work amounted to $ 10,000.00. Laktaw
prayed the court to order Paglinawan to withdraw from sale all stock of the work and to
pay him the sum of $ 10,000.00 with costs. Paglinawan, in his answer denied generally
each and every allegation of the complaint and prayed the court to absolve him from
complaint.

ISSUES: Whether or not the defendant, Mamerto Paglinawan, violated Article 7 of the
Law of January 10, 1879 on Intellectual Property

HELD: Yes. The defendant, Mamerto Paglinawan violated Article 7 of the Law of
January 10, 1879 on Intellectual Property. The said article states that, “Nobody may
reproduce another person’s work without the owner’s consent, even merely to annotate
or add anything to it, or improve any edition thereof”. It is not necessary that a work
should be an improper copy of another work previously published. The court makes no
special pronouncement as to the costs of this instance.