1.

Ubeda vs Zialcita

Facts:
Patricio Ubeda, owner of the registered trade-mark "Ginebra Tres Companas," claims and alleges loss and damages
by reason of the imitation of his trade-mark by the def endant, who has been selling gin in bottles bearing said
trademark, and using a label design that greatly resembles his; that the only difference between them is that of the
defendant, instead of bearing the words "Ginebra Tres Campanas," reads "Ginebra de Dos Campanas," and in the
center thereof, instead of "PatricioUbeda," it reads "Gavino Barreto;" that the remainder of the trade-mark is a copy
of his own.

The plaintiffs contention was that he obtained less sales due to imitation of the trademark. He prayed that the
defendant be ordered to account for all sales made by him of gin put up in bottles bearing the trade-mark, design,
or any of the distinctive marks belonging to the plaintiff, and that, after the extent of such sales has been ascertained,
the said defendant be ordered to pay the plaintiff double the amount thereof as indemnity for loss and damages;
that the defendant be forever prohibited from using the device or trade-mark of the plaintiff, or any other trademark
or design bearing any resemblance to those of the plaintiff, and that he be sentenced to pay the costs of the
proceeding.

The defendant, Agapito Zialcita, opposed the demand for various reasons which he advanced as a special denial to
the complaint

The plaintiff furthermore contended that he is the owner of a trade-mark described in the case. That said mark
was registered at the office of the late Direccin General de Administracin Civil of the Spanish Government that on
July 31, 1905, the plaintiff cautioned the defendant to stop using a mark similar to his own, but, notwithstanding the
warning, the defendant continued to -use said mark; that the defendant, in addition to a general denial in his answer,
alleged as a special defense: : (1) That no similarity or resemblance exists between the trade-marks used by him and
those of the plaintiff; (2) that long prior to 1880, the distinctive device or trade-mark "Ginebra de la Campana" of
Van Den Bergh & Co. was entered and registered in the old Direccin General de Administracin Civil, at present the
division of patents, copyrights, and trade-marks of the Executive Bureau, which trade-mark is similar to or greatly
resembles the one described by the plaintiff in his complaint; and (3) that the device now used by the plaintiff, which
is different from that registered by him, is also another falsification of that of Van Den Bergh & Co., and which he
managed to register by taking advantage of the first days of the American occupation of the city of Manila; said
plaintiff has been using both marks, one after the other, for the purpose of defrauding and deceiving the public as
to the nature, origin, and properties of his gin, mixing it with that of Van Den Bergh & Co., and thus selling a cheap
product at the same price as the gin of Van Den Bergh & Co., which, for the reason that it is imported from Europe,
costs more than his.

2. Laktaw vs Paglinawan

1. Laktaw vs. Paglinawan

44 Phil. 855 (1918)
Facts:

- Laktaw is the registered owner and author 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.
- Paglinawan without the consent of Laktaw, reproduced 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 Pagliwanan is a violation of article 7 of the Law of January 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 (4) that the damages occasioned to him by the publication of Paglinawan's work amounted
to $10,000. Laktaw prayed the court to order the Paglinawan to withdraw from sale all stock of
the work of Paglinawan to pay him the sum of $10,000, with costs.
- Paglinawan in his answer denied generally each and every allegation of the complaint and prayed
the court to absolve him from the complaint.

Law:

Article 7 of the Law of January 10, 1879, on Intellectual Property:

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.

Issue:

- Whether or not Paglinawan violated Article 7 of the Intellectual Property Law (1879)?

Ruling:

- Yes, Paglinawan violated Article 7 of Intellectual Property Law.

- It is not necessary that a work should be an improper copy of another work previously published.
It is enough that another's work has been reproduced without the consent of the owner, even
though it be only to annotate, add something to it, or improve any edition thereof.

(c) Published Edition of Work

Sec. 174

Section 174. Published Edition of Work. - In addition to the right to publish granted by the author, his
heirs, or assigns, the publisher shall have a copyright consisting merely of the right of reproduction of the
typographical arrangement of the published edition of the work. (n)

Note: Separate right of the publisher exclusively on typographical arrangement.

(5)Works Not Protected

Sec. 175
(a)Unprotected Subject Matter

Sec. 175

Section 175. Unprotected Subject Matter. - Notwithstanding the provisions of Sections 172 and 173, no
protection shall extend, under this law, to any idea, procedure, system, method or operation, concept,
principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied
in a work; news of the day and other miscellaneous facts having the character of mere items of press
information; or any official text of a legislative, administrative or legal nature, as well as any official
translation thereof (n)

3. Tanada vs Angara
I. THE FACTS

Petitioners Senators Taada, et al. questioned the constitutionality of the concurrence by the
Philippine Senate of the Presidents ratification of the international Agreement establishing the World
Trade Organization (WTO). They argued that the WTO Agreement violates the mandate of the 1987
Constitution to develop a self-reliant and independent national economy effectively controlled by
Filipinos . . . (to) give preference to qualified Filipinos (and to) promote the preferential use of Filipino
labor, domestic materials and locally produced goods. Further, they contended that the national
treatment and parity provisions of the WTO Agreement place nationals and products of member
countries on the same footing as Filipinos and local products, in contravention of the Filipino First
policy of our Constitution, and render meaningless the phrase effectively controlled by Filipinos.

II. THE ISSUE

Does the 1987 Constitution prohibit our country from participating in worldwide trade
liberalization and economic globalization and from integrating into a global economy that is liberalized,
deregulated and privatized?

III. THE RULING

[The Court DISMISSED the petition. It sustained the concurrence of the Philippine Senate of
the Presidents ratification of the Agreement establishing the WTO.]

NO, the 1987 Constitution DOES NOT prohibit our country from participating in
worldwide trade liberalization and economic globalization and from integrating into a global
economy that is liberalized, deregulated and privatized.

There are enough balancing provisions in the Constitution to allow the Senate to ratify the
Philippine concurrence in the WTO Agreement.

[W]hile the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and
enterprises, at the same time, it recognizes the need for business exchange with the rest of the world
on the bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign
competition and trade practices that are unfair. In other words, the Constitution did not intend to pursue
an isolationist policy. It did not shut out foreign investments, goods and services in the development
of the Philippine economy. While the Constitution does not encourage the unlimited entry of foreign
goods, services and investments into the country, it does not prohibit them [Link] fact, it allows an
exchange on the basis of equality and reciprocity, frowning only on foreign competition that is unfair.

xxx xxx xxx

[T]he constitutional policy of a self-reliant and independent national economy does not
necessarily rule out the entry of foreign investments, goods and services. It contemplates neither
economic seclusion nor mendicancy in the international community. As explained by Constitutional
Commissioner Bernardo Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly aware of
overdependence on external assistance for even its most basic needs. It does not mean autarky or
economic seclusion; rather, it means avoiding mendicancy in the international community.
Independence refers to the freedom from undue foreign control of the national economy, especially in
such strategic industries as in the development of natural resources and public utilities.

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 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.

xxx xxx xxx

It is true, as alleged by petitioners, that broad constitutional principles require the State to
develop an independent national economy effectively controlled by Filipinos; and to protect and/or
prefer Filipino labor, products, domestic materials and locally produced goods. But it is equally true
that such principles while serving as judicial and legislative guides are not in themselves sources
of causes of action. Moreover, there are other equally fundamental constitutional principles relied upon
by the Senate which mandate the pursuit of a trade policy that serves the general welfare and utilizes
all forms and arrangements of exchange on the basis of equality and reciprocity and the promotion
of industries which are competitive in both domestic and foreign markets, thereby justifying its
acceptance of said treaty. So too, the alleged impairment of sovereignty in the exercise of legislative
and judicial powers is balanced by the adoption of the generally accepted principles of international
law as part of the law of the land and the adherence of the Constitution to the policy of cooperation
and amity with all nations.

That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent
to the WTO Agreement thereby making it a part of the law of the land is a legitimate exercise of its
sovereign duty and power. We find no patent and gross arbitrariness or despotism by reason of
passion or personal hostility in such exercise. It is not impossible to surmise that this Court, or at least
some of its members, may even agree with petitioners that it is more advantageous to the national
interest to strike down Senate Resolution No. 97. But that is not a legal reason to attribute grave abuse
of discretion to the Senate and to nullify its decision. To do so would constitute grave abuse in the
exercise of our own judicial power and duty. Ineludibly, what the Senate did was a valid exercise of its
authority. As to whether such exercise was wise, beneficial or viable is outside the realm of judicial
inquiry and review. That is a matter between the elected policy makers and the people. As to whether
the nation should join the worldwide march toward trade liberalization and economic globalization is a
matter that our people should determine in electing their policy makers. After all, the WTO Agreement
allows withdrawal of membership, should this be the political desire of a member.
4. Mirpuri vs CA

Facts:
On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J.
Mirpuri, filed an application with the Bureau of Patents for the registration of the trademark
"Barbizon" for use in brassieres and ladies undergarments. Barbizon Corporation, the
private respondent of the case at bar opposed the application on the ground that the mark
Barbizon of the applicant is confusingly similar to the trademark Barbizon of which the
opposer has not abandoned. Furthermore, it was alleged by the opposer that it shall suffer
damage by the registration of the mark Barbizon and its business reputation and goodwill
will suffer great and irreparable injury, and that the use by the applicant by the said mark
which resembles the trademark used and owned by oppose constitutes an unlawful
appropriation of a mark previously used in the Philippines and not abandoned therefore a
statutory violation of Sec 4 (d) of Republic Act No. 166, as amended. The opposition was
dismissed and Escobar was issued a certificate of registration for the trademark Barbizon,
and subsequently Escobar assigned all her rights and interest over the trademark to
petitioner Pribhdas J. Mirpuri. However, Escobar failed to file an Affidavit of Use of the
trademark so Escobars certificate of registration was cancelled. Consequently, she reapplied
for the registration of the cancelled trademark. Opposer's BARBIZON as well as its
BARBIZON and Bee Design and BARBIZON and Representation of a Woman trademarks are
deemed to qualify as well-known trademarks.

Issue:
Whether or not the Convention of Paris for the Protection of Industrial Property affords
protection to a foreign corporation against a Philippine applicant for the registration of a
similar trademark

Held:
On record, there can be no doubt that respondent-applicant's sought-to-be-registered
trademark BARBIZON is similar, in fact obviously identical, to opposer's alleged trademark
BARBIZON, in spelling and pronunciation. The only appreciable but very negligible
difference lies in their respective appearances or manner of presentation. Respondent-
applicant's trademark is in bold letters (set against a black background), while that of the
opposer is offered in stylish script letters.

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. In short, foreign
nationals are to be given the same treatment in each of the member countries as that country
makes available to its own citizens. Nationals of the various member nations are thus
assured of a certain minimum of international protection of their industrial property.

The main argument is embedded on Art 6 of the Paris Convention which governs the
protection of well-known marks. The essential requirement of the said article is that the
trademark to be protected must be "well-known" in the country where protection is
sought. The power to determine whether a trademark is well-known lies in the "competent
authority of the country of registration or use." This competent authority would be either
the registering authority if it has the power to decide this, or the courts of the country in
question if the issue comes before a court

5. Mighty Corporation vs E & J Gallo

Facts:
Respondent Gallo Winery is a foreign corporation not doing business in the Philippines, but
organized under the laws of California, USA. It uses the GALLO and ERNEST & JULIO GALLO
wine trademarks. Andresons has been Gallo Winerys exclusive wine importer and
distributor in the Philippines. GALLO wine trademark was registered in the Philippine Patent
Office on November 16, 1971.

Mighty Corporation and La Campana are engaged in the cultivation, manufacture, and sale of
tobacco products which they have been using the GALLO cigarette trademark since 1973.
GALLO cigarette trademark was registered on 1985 in the Philippine Patent Office.

Respondents sued petitioner for trademark and trade name infringement and unfair
competition

Petitioners alleged that the cigarettes and wines were totally unrelated products and that
Gallo Winerys GALLO trademarks only covers wine and does not cover cigarettes, and that
the wines and cigarettes were sold through different channel of trade, that the GALLO
cigarettes were low-cost items.

Issue:
Whether or not there is infringement and/or unfair competition

Held:
No. Petitioners and respondents both use "GALLO" in the labels of their respective cigarette
and wine products. But, as held in many cases, the use of an identical mark does not, by itself,
lead to a legal conclusion that there is trademark infringement.

First, there is difference in the features of the marks used by the petitioners and the
respondent:
The dominant feature of the GALLO cigarette trademark is the device of a large rooster facing
left, outlined in black against a gold background. The roosters color is either green or red
green for GALLO menthols and red for GALLO filters. Directly below the large rooster device
is the word GALLO. The rooster device is given prominence in the GALLO cigarette packs in
terms of size and location on the labels. Also, as admitted by respondents themselves, on the
side of the GALLO cigarette packs are the words "MADE BY MIGHTY CORPORATION," thus
clearly informing the public as to the identity of the manufacturer of the cigarettes.
On the other hand, GALLO Winerys wine and brandy labels are diverse. In many of them, the
labels are embellished with sketches of buildings and trees, vineyards or a bunch of grapes
while in a few, one or two small roosters facing right or facing each other (atop the EJG crest,
surrounded by leaves or ribbons), with additional designs in green, red and yellow colors,
appear as minor features thereof. Directly below or above these sketches is the entire
printed name of the founder-owners, "ERNEST & JULIO GALLO" or just their surname
"GALLO," which appears in different fonts, sizes, styles and labels, unlike petitioners uniform
casque-font bold-lettered GALLO mark. Moreover, on the labels of Gallo Winerys wines are
printed the words "VINTED AND BOTTLED BY ERNEST & JULIO GALLO, MODESTO,
CALIFORNIA."

Second, the products are not sold in the same channels of trade.
GALLO cigarettes are inexpensive items while GALLO wines are not. GALLO wines are
patronized by middle-to-high-income earners while GALLO cigarettes appeal only to simple
folks like farmers, fishermen, laborers and other low-income workers. Indeed, the big price
difference of these two products is an important factor in proving that they are in fact
unrelated and that they travel in different channels of trade. There is a distinct price
segmentation based on vastly different social classes of purchasers.

GALLO cigarettes and GALLO wines are not sold through the same channels of trade. GALLO
cigarettes are Philippine-made and petitioners neither claim nor pass off their goods as
imported or emanating from Gallo Winery. GALLO cigarettes are distributed, marketed and
sold through ambulant and sidewalk vendors, small local sari-sari stores and grocery stores
in Philippine rural areas, mainly in Misamis Oriental, Pangasinan, Bohol, and Cebu. On the
other hand, GALLO wines are imported, distributed and sold in the Philippines through Gallo
Winerys exclusive contracts with a domestic entity, which is currently Andresons. By
respondents own testimonial evidence, GALLO wines are sold in hotels, expensive bars and
restaurants, and high-end grocery stores and supermarkets, not through sari-sari stores or
ambulant vendors.

Petitioners are not liable for trademark infringement or unfair competition because the
petitioners never attempted to pass off their cigarettes as those of respondents. There is no
evidence of bad faith or fraud imputable to petitioners in using their GALLO cigarette vmark.

6. Philip Morris vs Fortune

PHILIP MORRIS, INC. VS. FORTUNE TOBACCO CORPORATION (Equal Standing of International Law and
Municipal Law)

Penned by: GARCIA, J.:

Petition for review under Rule 45 of the Rules of Court, petitioners Philip Morris, Inc., Benson & Hedges
(Canada) Inc., and Fabriques de Tabac Reunies, S.A. (now Philip Morris Products S.A.) seek the reversal
and setting aside of the following issuances of the Court of Appeals (CA) in CA-G.R. CV No. 66619:
PETITION DENIED

1. Decision dated January 21, 20031 affirming an earlier decision of the Regional Trial Court of Pasig
City, Branch 166, in its Civil Case No. 47374
Dismissed the complaint for trademark infringement and damages thereat commenced by the
petitioners against respondent Fortune Tobacco Corporation; and
2. Resolution dated May 30, 20032 denying petitioners motion for reconsideration.

FACTS OF THE CASE:

Petitioner Philip Morris, Inc., a corporation (State of Virginia, U.S.A), is the registered owner of
the trademark MARK VII for cigarettes. (per Certificate of Registration No. 18723 issued on
April 26, 1973 by the Philippine Patents Office (PPO)
Similarly, petitioner Benson & Hedges (Canada), Inc., a subsidiary of Philip Morris, Inc., is the
registered owner of the trademark MARK TEN for cigarettes (PPO Certificate of Registration
No. 11147)
Fabriques de Tabac Reunies, S.A. (Swiss company), another subsidiary of Philip Morris, Inc., is
the assignee of the trademark LARK, (Trademark Certificate of Registration No. 19053)
(originally registered in 1964 by Ligget and Myers Tobacco Company)
Respondent Fortune Tobacco Corporation, a company organized in the Philippines,
manufactures and sells cigarettes using the trademark MARK.

Petitioners, on the claim that an infringement of their respective trademarks had been
committed, filed, on August 18, 1982, a Complaint for Infringement of Trademark and
Damages against respondent Fortune Tobacco Corporation, docketed as Civil Case No. 47374 of
the Regional Trial Court of Pasig, Branch 166.
The decision under review summarized what happened next, as follows:
o Prayer for the issuance of a preliminary injunction, [petitioners] alleged that they are foreign corporations not doing business in the
Philippines and are suing on an isolated transaction.
o Countries in which they are domiciled grant to corporate or juristic persons of the Philippines the privilege to bring action
for infringement, without need of a license to do business in those countries.
o [Petitioners] likewise manifested [being registered owners of the trademark MARK VII and MARK TEN
o registered the trademarks in their respective countries of origin
by virtue of the long and extensive usage of the same, these trademarks have already gained international
fame and acceptance
[respondent], without any previous consent from any of the [petitioners], manufactured and sold cigarettes
bearing the identical and/or confusingly similar trademark MARK
have caused and is likely to cause confusion or mistake, or would deceive purchasers and the public in general
into buying these products under the impression and mistaken belief that they are buying [petitioners]
products.
o Invoked provisions of the Paris Convention for the Protection of Industrial and Intellectual Property (Paris Convention)
o Philippines is a signatory, [petitioners] pointed out that upon the request of an interested party, a country of the Union
may prohibit the use of a trademark which constitutes a reproduction, imitation, or translation of a mark already
belonging to a person entitled to the benefits of the said Convention. In accordance with Section 21-A in relation to
Section 23 of Republic Act 166, as amended, they are entitled to relief in the form of damages [and] the issuance of a
writ of preliminary injunction which should be made permanent.
o [Respondent] filed its Answer denying [petitioners] material allegations and averred [among other things] that MARK
is a common word, which cannot particularly identify a product to be the product of the [petitioners]
o After the termination of the trial on the merits trial court rendered its Decision dated November 3, 1999 dismissing the complaint
and counterclaim after making a finding that the [respondent] did not commit trademark infringement against the [petitioners].
o The issue of whether or not there was infringement of the [petitioners] trademarks by the [respondent] was likewise
answered in the negative. It expounded that in order for a name, symbol or device to constitute a trademark, it must, either by
itself or by association, point distinctly to the origin or ownership of the article to which it is applied and be of such nature as to
permit an exclusive appropriation by one person.
 Maintaining to have the standing to sue in the local forum and that respondent has committed
trademark infringement, petitioners went on appeal to the CA. (Appellate recourse docket CA-
G.R. CV No. 66619)
o CA decision on January 21, 2003 (while ruling for petitioners on the matter of their legal
capacity to sue in this country for trademark infringement) affirmed the trial courts
decision on the underlying issue of respondents liability for infringement.
Motion for reconsideration denied by the CA (Resolution of May 30, 2003)

ISSUES
Petitioners seek petition for review (Court of Appeals):
o (1) whether or not petitioners, as Philippine registrants of trademarks, are entitled to
enforce trademark rights in this country;
o (2) whether or not respondent has committed trademark infringement against
petitioners by its use of the mark MARK for its cigarettes, hence liable for damages.

Respondent: issue the propriety of the petition as it allegedly raises questions of fact.
The petition is bereft of merit.
Petition raises both questions of fact and law
o question of law exists when the doubt or difference arises as to what the law is on a certain state of facts
o question of fact when the doubt or difference arises as to the truth or falsity of alleged facts
Court is not the proper venue to consider factual issues as it is not a trier of facts
Unless the factual findings of the appellate court are mistaken, absurd, speculative, conflicting,
tainted with grave abuse of discretion, or contrary to the findings culled by the court of origin, we
will not disturb them
Petitioners: contentions should be treated as purely legal since they are assailing erroneous conclusions deduced
from a set of undisputed facts

A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any
combination thereof adopted and used by a manufacturer or merchant on his goods to identify
and distinguish them from those manufactured, sold, or dealt in by others.
o A trademark deserves protection.

PETITIONER:
Petitioners assert that, as corporate nationals of member-countries of the Paris Union, they
can sue before Philippine courts for infringement of trademarks, or for unfair competition,
without need of obtaining registration or a license to do business in the Philippines, and
without necessity of actually doing business in the Philippines.
o Right and mechanism are accorded by
Section 21-A of Republic Act (R.A.) No. 166 or the Trademark Law, as amended
Article 2 of the Paris Convention for the Protection of Industrial Property, aka
Paris Convention.
Not doing business in the Philippines does not mean that cigarettes bearing their trademarks are
not available and sold locally. Citing Converse Rubber Corporation v. Universal Rubber
Products, Inc., such availability and sale may be effected through the acts of importers and
distributors.
Entitlement to protection even in the absence of actual use of trademarks in the country
 o Philippines adherence to the Trade Related Aspects of Intellectual Property Rights or
the TRIPS Agreement
o enactment of R.A. No. 8293, or the Intellectual Property Code (IP Code)
o fame of a trademark may be acquired through promotion or advertising with no explicit
requirement of actual use in local trade or commerce

Before discussing petitioners claimed entitlement to enforce trademark rights in the

Philippines, it must be emphasized that their standing to sue in Philippine courts had been
recognized, and rightly so, by the CA
o such right to sue does not necessarily mean protection of their registered marks in the
absence of actual use in the Philippines.

Thus clarified, what petitioners now harp about is their entitlement to protection on the strength of
registration of their trademarks in the Philippines.

HELD/RATIO:
As we ruled in G.R. No. 91332,18 :

1. RECIPROCITY REQUIREMENT
Registration of a trademark gives the registrant (petitioners) advantages denied non-
registrants or ordinary users (respondent)
o validity of the registration
o ownership and the exclusive right to use the registered marks
they may not successfully sue on the basis alone of their respective certificates of registration
of trademarks.
o Petitioners: still foreign corporations
o condition to availment of the rights and privileges & their trademarks in this country:
On top of Philippine registration, their country grants substantially similar
rights and privileges to Filipino citizens pursuant to Section 21-A20 of R.A. No.
166.
In Leviton Industries v. Salvador
o Court: reciprocity requirement is a condition sine qua non to filing a suit by a foreign
corporation
Unless alleged in the complaint, would justify dismissal
o complainant is a national of a Paris Convention- adhering country, its allegation that it
is suing under said Section 21-A would suffice, because the reciprocal agreement
between the two countries is embodied and supplied by the Paris Convention
being considered part of Philippine municipal laws, can be taken judicial
notice of in infringement suits.

2. REGISTRATION VERSUS ACUAL USE!!

members of the Paris Union does not automatically entitle petitioners to the protection of
their trademarks in this country ABSENT ACTUAL USE OF THE MARKS IN LOCAL COMMERCE
AND TRADE.
 Philippines adherence to the Paris Convention effectively obligates the country to honor and
enforce its provisions( as regards the protection of industrial property of foreign nationals in
this country)
o However, any protection accorded has to be made subject to the limitations of
Philippine laws.
o Hence, despite Article 2 of the Paris Convention which substantially provides that:
(1) nationals of member-countries shall have in this country rights specially
provided by the Convention as are consistent with Philippine laws, and enjoy
the privileges that Philippine laws now grant or may hereafter grant to its
national
(2) while no domicile requirement in the country where protection is claimed
shall be required of persons entitled to the benefits of the Union for the
enjoyment of any industrial property rights
foreign nationals must still observe and comply with the conditions
imposed by Philippine law on its nationals.

R.A. No. 166 (as amended, specifically Sections 228 and 2-A29), mandates actual use of the
marks and/or emblems in local commerce and trade before they may be registered and
ownership thereof acquired
o the petitioners cannot, therefore, dispense with the element of actual use.
o Their being nationals of member-countries of the Paris Union does not alter the legal
situation.

In Emerald Garment Mfg. Corporation v. Court of Appeals, the Court reiterated its rulings in
Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, Kabushi Kaisha
Isetan v. Intermediate Appellate Court, and Philip Morris v. Court of Appeals and Fortune
Tobacco Corporation on the importance of ACTUAL COMMERCIAL USE OF A
TRADEMARK in the Philippines notwithstanding the Paris Convention:
o The provisions of the 1965 Paris Convention relied upon by private
respondent and Sec. 21-A of the Trademark Law were sufficiently expounded
upon and qualified in the recent case of Philip Morris, Inc., et. al. vs. Court of
Appeals:
Following universal acquiescence and comity, our municipal law on
trademarks regarding the requirements of actual use in the Philippines
must subordinate an international agreement inasmuch as the apparent
clash is being decided by a municipal tribunal.
Withal, the fact that international law has been made part of the law of
the land does NOT by any means imply the primacy of international law
over national law in the municipal sphere.
Under the DOCTRINE OF INCORPORATION as applied in most
countries, rules of International Law are given a standing EQUAL,
not superior, to national legislative enactments.
A foreign corporation) may have the capacity to sue for infringement
but whether they have an exclusive right over their symbol as to justify
issuance of the controversial writ will depend on actual use of their
 trademarks in the Philippines in line with Sections 2 and 2-A of the same
law.
It is thus incongruous for petitioners to claim that when a foreign
corporation not licensed to do business in the Philippines files a
complaint for infringement, the entity need not be actually using its
trademark in commerce in the Philippines.
Such a foreign corporation may have the personality to file a suit for
infringement but it may not necessarily be entitled to protection due to
absence of actual use of the emblem in the local market.

Registration of trademark cannot be deemed conclusive as to the actual use of such trademark
in local commerce.
o registration does not confer upon the registrant an absolute right to the registered
mark.
o merely constitutes prima facie evidence that the registrant is the owner of the
registered mark.
o Evidence of non-usage of the mark rebuts the presumption of trademark ownership
We stress that registration in the Philippines of trademarks does not ipso facto convey an
absolute right or exclusive ownership thereof.
o Shangri-La International Hotel Management, Ltd. v. Development Group of
Companies, Inc.
Trademark is a creation of use
Actual use is a pre-requisite to exclusive ownership
Registration is only an administrative confirmation of the existence of the right
of ownership of the mark
does not perfect such right; actual use thereof is the perfecting
ingredient.

Petitioners reliance on Converse Rubber Corporation is quite misplaced

o different factual milieu
o foreign owner of a Philippine trademark, albeit not licensed to do, and not so engaged in,
business in the Philippines, may actually earn reputation or goodwill for its goods in the country.
o But unlike in the instant case, evidence of actual sales of Converse rubber shoes, such as sales
invoices, receipts and the testimony of a legitimate trader, was presented in Converse.
This Court also finds the IP Code and the TRIPS Agreement to be inapplicable
o the infringement complaint filed in August 1982 and tried under the aegis of R.A. No.
166, as amended.
o The IP Code (January 1, 1998) no provision on retroactivity; TRIPS Agreement
(December 16, 1994)
registration of a trademark unaccompanied by actual use thereof in the country accords the
registrant only the standing to sue for infringement in Philippine courts. Entitlement to
protection of such trademark in the country is entirely a different matter.

7. PHAP vs Duque

Pharmaceutical and Health Care Association of the Philippines vs. Duque III
(Austria-Martinez, October 9, 2007)

Nature: Special Civil Action in the Supreme Court. Certiorari

Petitioner: Pharmaceutical and Healthcare Association of the Philippines

Respondents: DOH Sec. Francisco Duque III, DOH Undersecretaries Dr. Ethelyn Nieto, Dr. Margarita Galon, Atty. Alexander Padilla
and Dr. Jade Del Mundo; and Asst. Secretaries Dr. Mario Villaverde, Dr. David Lozada and Dr. Nemesio Gako

Facts:

- Executive Order No. 51 (The Milk Code - TMC) was issued by Pres. Aquino on Oct. 28, 1986 by virtue of the legislative powers
granted to her under the Freedom Constitution.
(1) One of the preambular clauses of TMC the law seeks to give effect to Article 11 of the International Code of Marketing
of Breastmilk Substituttes (ICMBS), a code adopted by the WHA (World Health Assembly) in 1981.
- In 1990, the Philippine ratified the International Convention on the Rights of the Child. Art. 24 of the instrument mandates that
States should take measure to diminish infant mortality and should ensure that all segments of society are informed of the
advantages of breastfeeding.
- From 1982 2006, the WHA adopted several resolutions to the effect that breastfeeding should be supported, promoted and
protected, hence, it should be ensured that nutrition and health claims are not permitted for breastmilk substitutes.
- May 15, 2006 DOH issues the assailed RIRR (Revised Implementing Rules and Regulations of E.O. 51 or A.O. No. 2006-0012)
which was to take effect on July 7, 2006. The RIRR imposes a ban on all advertisements of breastmilk substitutes
- June 28, 2006 Petitioner filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a TRO or Writ
of Preliminary injunction.
- August 15, 2006 the Court issued a Resolution granting the TRO, enjoining the respondents from implementing the assailed
RIRR.
- Petitioner assails the RIRR for going beyond the provisions of TMC thereby amending and expanding the coverage of the said
law.
- DOH meanwhile contends that the RIRR implements not only TMC but also various international instruments regarding infant
and young child nutrition. They posit that the said international instruments are deemed part of the law of the land and
therefore may be implemented by the DOH in the RIRR.

Issue: W/n the RIRR is unconstitutional?

Sub-issue(s): W/n the RIRR is in accord with TMC? W/n pertinent international agreements entered into by the Philippines are part
of the law of the land and may thus be implemented through an RIRR, if so, is the RIRR in accord with such international agreements?

Note: I focused on the parts on international law. The other matters (in case maam asks) are at the bottom of the digest.

Held: No. However what may be implemented is the RIRR based on the Milk Code which in turn is based on the ICMBS as this is
deemed part of the law of the land. The other WHA Resolutions however cannot be imposed as they are not deemed part of the law
of the land.

Ratio:

1. Are the international instruments referred to by the respondents part of the law of the land?
- The various international instruments invoked by respondents are:
(1) The UN Conventions on the Rights of the Child
 (2) The International Convenant on Economic, Social, and Cultural Rights
(3) Convention on the Elimination of All Forms of Discrimination Against Women
- These instruments only provide general terms of the steps that States must take to prevent child mortality. Hence, they do not
have anything about the use and marketing of breastmilk substitutes

- The ICMBS and other WHA Resolutions however, are the international instruments which have specific provisions on breastmilk
substitutes
- Under the 1987 Constitution, international law can become part of domestic law in 2 ways:
(1) Transformation an international law is transformed into a domestic law through a constitutional mechanism such as local
legislation
Treaties become part of law of the land through this method, pursuant to Art 7, Sec 21 wherein no treaty or
international agreement shall be valid.. unless concurred by at least 2/3 of Senate
The ICMBS and WHA Resolutions are NOT treaties as they havent been concurred in by the required 2/3 vote.
HOWEVER, the ICMBS has been transformed into domestic law through local legislation that is TMC.
Therefore, it is not the ICMBS per se that has the force of law but its TMC.
o While TMC is almost a verbatim reproduction of the ICMBS, it did not adopt the latters provision on the
absolute prohibition on advertising of products within the scope of the ICMBS. Instead the MC provides
that advertising promotion or other marketing materials may be allowed if such materials are approved by
a committee.
(2) Incorporation by mere constitutional declaration, international law is deemed to have the force of domestic law
This is found under Art 2, Sec 2 The Philippines adopts generally accepted principles of international law as part
of the law of the land
In Mihares v. Ranada: International law becomes customary rules accepted as binding as a result of two elements:
1.) Established, widespread, and consistent practice on part of the state
2.) Opinion juris sive necessitates (opinion as to law or necessity.
Generally accepted principles of international law refer to norms of general or customary international law which are
binding on all states, valid through all kinds of human societies, and basic to legal systems generally
Fr. Bernas has a definition similar to the one above. Customary international law has two factors:
1.) Material factor how states behave
The consistency and the generality of the practice
2.) Psychological or subjective factor why they behave the way they do
Once state practice has been established, now determine why they behave they do. Is it ouor of courtesy
or opinio juris (the belief that a certain type of behavior is obligatory)
When a law satisfies the two factors it becomes part of customary international law which is then incorporated into
our domestic system

2. Since the WHA Resolutions have not been embodied in any local legislation, have they attained the status of customary law and
hence part of our law of the land?
- The World Health Organization (WHO) is one of the international specialized agencies of the UN.
- According to the WHO Constitution, its the WHA which determines the policies of the WHO, the former also has the power to
adopt regulations concerning advertising and labeling of pharmaceutical and similar products and to make recommendations
to members on any matter within the Organizations competence
- Note that the legal effect of a regulation as opposed to recommendation is quite different
(1) Regulations which are duly adopted by the WHA are binding on member states
(2) On the other hand, recommendations of the WHA do not come into force for its members unlike regulations. Rather, they
carry moral and political weight as they constitute the judgment on a health issue of the collective membership of the
highest body in the field of health.
- The WHA resolution adopting the ICMBS and the subsequent WHA resolutions urging states to implement the ICMBS are
merely recommendatory and legally non-binding.
- Hence, unlike the ICMBS which has become TMC through legislative enactment, the subsequent WHA Resolutions, which
provide for exclusive breastfeeding and prohibition on advertisements and promotions of breastmilk have not been adopted as
domestic law.
 - WHA Resolutions have been viewed to constitute soft law or non-binding norms, which influence state behavior. Soft law has
been noted to be a rapid means of norm creation, in order to reflect and respond to the changing needs and demands of
constituents (of the UN.)
- As previously discussed, for an international rule to be considered customary law, it must be established that such rule is
followed by states because it is considered obligatory (opinio juris).
- In the case at bar, respondents have not presented any evidence to prove that the WHA Resolutions are in fact enforced or
practice by member states. Further, they failed to establish that provisions of pertinent WHA Resolutions are customary
international law that may be deemed part of law of the land.
- Hence, legislation is necessary to transform the WHA resolutions into domestic law. They cannot thus be implemented by
executive agencies without the need of a law to be enacted by legislature.

On other issues:
W/n the petitioner is the real party in interest? Yes.
- An association has standing to file suit for its workers despite its lack of direct interest of its members are affected by the
action. An organization has standing to assert the concerns of its constituents. (Exec Sec vs CA)
- The Court has rules that an association has the legal personality to represent its members because the results of the case will
affect their vital interests. (Purok Bagong Silang Association Inc. vs. Yuipco)
- In the petitioners Amended Articles of Incorporation, it states that the association is formed to represent directly or through
approved representatives the pharmaceutical and health care industry before the Philippine Government and any of its
agencies, the medical professions and the general public.
- Therefore, the petitioner, as an organization, has an interest in fulfilling its avowed purpose of representing members who are
part of the pharmaceutical and health care industry. Petitioner is duly authorized to bring to the attention of the government
agencies and courts any grievance suffered by its members which are directly affected by the assailed RIRR.
- The petitioner, whose legal identity is deemed fused with its members, should be considered as a legal party-in-interest which
stands to be benefited or injured by any judgment in the case.

W/n the DOH has the power to implement the WHA Resolutions under the Revised Administrative Code even in the absence of a
domestic law? Only the provisions of the Milk Code. (as per the discussion above)

- Section 3, Chapter 1, Title IX of the RAC of 1987 provides that the DOH shall define the national health policy and can issue
orders and regulations concerning the implementation of established health policies.
- A.O. No 2005 -0014 which provides the national policy on infant and young child feeding, does not declare that as part of its
policy, the advertisement or promotion of breastmilk substitutes should be absolutely prohibited.
- Only the provisions of the Milk Code, but not those of the subsequent WHA Resolutions, can be validly implemented by the
DOH through the subject RIRR.

W/n the provisions of the RIRR being in accordance with the Milk Code? Not all of them

- Assailed provisions: [1] extending the coverage to young children; [2] imposing exclusive breastfeeding for infants from 0-6
months; [3] imposes an absolute ban on advertising and promotion for breastmilk substitutes; [4] requiring additional labeling
requirements; [5] prohibits the dissemination of information on infant formula; [6] forbids milk manufacturers and distributors
to extend assistance in research and continuing education Although the DOH has the power under the Milk Code to control
information regarding breastmilk vis--vis breastmilk substitutes, this power is not absolute because it has no power to impose
an absolute prohibition in the marketing, promotion and advertising of breastmilk substitutes. Several provisions of the Milk
Code attest to the fact that such power to control information is not absolute.
- Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code because such provisions impose an absolute prohibition
on advertising, promotion and marketing of breastmilk substitutes, which is not provided for in the Milk Code. Section 46 is
violative of the Milk Code because the DOH has exceeded its authority in imposing such fines or sanctions when the Milk Code
does not do so. Other assailed provisions are in accordance with the Milk Code.

W/n Section 13 of the RIRR providing a sufficient standard? Yes.

 - Questioned provision, in addition to Section 26 of Rule VII provide labeling requirements for breastmilk substitutes found to
be in consonance with the Milk Code
- The provisions in question provide reasonable means of enforcing related provisions in the Milk Code.

W/n Section 57 of the RIRR repeals existing laws?

- Section in question only repeals orders, issuances and rules and regulations, not laws. The provision is valid as it is within the
DOHs rule-making power.
- An administrative agency has quasi-legislative or rule-making power. However, such power is limited to making rules and
regulation subjected to the boundaries set by the granting statute and the Constitution. The power is also subject to the
doctrine of non-delegability and separability of powers. The power, which includes amending, revising, altering or repealing,
is granted to allow for flexibility in the implementation of the laws.

W/n On Section 4, 5(w), 11, 22, 32, 47 and 52 violates the due process clause of the Constitution (Article III Section 1)?

- Despite the fact that the present Constitution enshrines free enterprise as a policy, it nonetheless reserves to the government
the power to intervene whenever necessary to promote the general welfare free enterprise does not call for the removal of
protective regulations. It must be clearly explained and proven by competent evidence just exactly how such protective
regulation would result in the restraint of trade.
- Section 4 proscription of milk manufacturers participation in any policymaking body; Section 22 classes and seminars for
women and children; Section 32 giving of assistance, support and logistics or training; Section 52 giving of donations
- In the instant case, petitioner failed to show how the aforementioned sections hamper the trade of breastmilk substitutes.
They also failed to establish that these activities are essential and indispensable to their trade.

Disposition: The Petition is Partially Granted. Only sections 4(f), 11 and 46 of A.O. 2006-0014 are declared null and
void for being ultra vires. The TRO is lifted insofar as the rest of the provisions of A.O. 2006-0012 is concerned.

8. Elidad Kho vs CA

Facts Kho is doing business under the name and style of KEC Cosmetics Laboratory, the registered owner
of the copyrights Chin Chun Su and Oval Facial Cream Container/Case, that she also has patent rights on
Chin Chun Su & Device and Chin Chun Su for medicated cream after purchasing the same from Quintin
Cheng, the registered owner thereof in the Supplemental Register of the Philippine Patent Office.
Summerville advertised and sold Khos cream products under the brand name Chin Chun Su, in similar
containers that Kho uses, thereby misleading the public, and resulting in the decline in the Khos business
sales and income; and, that the Summerville should be enjoined from allegedly infringing on the
copyrights and patents of the Kho. Summerville on the other hand, alleged as their defense that they are
the exclusive and authorized importer, re-packer and distributor of Chin Chun Su products manufactured
by Shun Yi Factory of Taiwan; that the said Taiwanese manufacturing company authorized Summerville to
register its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office and other
appropriate governmental agencies; that KEC Cosmetics Laboratory of the of Kho obtained the copyrights
through misrepresentation and falsification; and, 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 been terminated by the said Taiwanese Manufacturing Company. On December 20, 1991, Elidad
C. Kho filed a complaint for injunction and damages with a prayer for the issuance of a writ of preliminary
injunction, against the Summerville General Merchandising and Company (Summerville, for brevity) and
Ang Tiam Chay.
Issues Whether the copyright and patent over the name and container of a beauty cream product would
entitle the registrant to the use and ownership over the same to the exclusion of others?

Held Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a stamped or marked container
of goods. In relation thereto, a trade name means the name or designation identifying or distinguishing
an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic works which are
original intellectual creations in the literary and artistic domain protected from the moment of their
creation. Patentable inventions, on the other hand, refer to any technical solution of a problem in any
field of human activity which is new, involves an inventive step and is industrially applicable. Kho 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 inasmuch 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 product, the user must sufficiently prove that she registered or used it before anybody else did.
The petitioners copyright and patent registration of the name and container would not guarantee her
right to the 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.
9. Levis Strauss vs Sehwani

Facts:
Petitioner Levi Strauss Phils. is a grantee of license by its US-based principal
to use LEVIS trademark in the manufacturing and sale of its clothing and other
goods. Later, petitioner discovered the existence of respondents trademark
LIVES which in its view was confusingly similar to its trademark. Thus,
petitioner instituted an administrative case for its cancellation. Respondent on
the other hand, filed a civil action for damages against petitioner. Petitioner
counterclaimed that its trademark is infringed and moved to enjoin respondent
from using said confusingly similar mark. Trial court ruled for petitioner. CA
ordered the trial court to desist from proceeding with the civil case until the
pending administrative action has been resolved.
Issue:
Whether or not the administrative action to cancel the trademark registration
can proceed independently from an action of infringement or unfair
competition.
Ruling: YES.
The passage of Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines, expanded the rights accorded to an owner
of a registered trademark. Sections 151 (2) thereof state:
Section 151.2. Notwithstanding the foregoing provisions, the court or the
administrative agency vested with jurisdiction to hear and adjudicate any
action to enforce the rights to a registered mark shall likewise exercise
jurisdiction to determine whether the registration of said mark may be
cancelled in accordance with this Act. The filing of a suit to enforce the
registered mark with the proper court or agency shall exclude any other court
or agency from assuming jurisdiction over a subsequently filed petition to
cancel the same mark. On the other hand, the earlier filing of petition to cancel
the mark with the Bureau of Legal Affairs {formerly BPTTT] shall not
constitute a prejudicial question that must be resolved before an action to
enforce the rights to same registered mark may be decided.
It bears stressing that an action for infringement or unfair competition,
including the available remedies of injunction and damages, in the regular
courts can proceed independently or simultaneously with an action for the
administrative cancellation of a registered trademark in the BPTTT. As applied
to the present case, petitioners prior filing of two inter partes cases against the
respondent before the BPTTT for the cancellation of the latters trademark
registrations, namely, LIVES and LIVES Label Mark, does not preclude
petitioners right (as a defendant) to include in its answer (to respondents
complaint for damages in Civil Case No. No. 96-76944) a counterclaim for
infringement with a prayer for the issuance of a writ of preliminary injunction.

10. In-N-Out Burger vs Sehwani

Facts:
On 2 June 1997, petitioner filed trademark and service mark applications with the Bureau of
Trademarks of the IPO for IN-N-OUT and IN-N-OUT Burger & Arrow Design. Petitioner
later found out that respondent Sehwani, Incorporated had already obtained Trademark
Registration for the mark IN N OUT (the inside of the letter O formed like a star). By virtue
of a licensing agreement, Benita Frites, Inc. was able to use the registered mark of
respondent Sehwani, Incorporated.

Petitioner filed an administrative complaint against respondents for unfair competition and
cancellation of trademark registration. Petitioner averred that it is the owner of the trade
name IN-N-OUT. Petitioner claimed that respondents are making it appear that their goods
and services are those of the petitioner, thus, misleading ordinary and unsuspecting
consumers that they are purchasing petitioners products. Petitioner then sent a demand
letter directing respondents to cease and desist from claiming ownership of the mark IN-N-
OUT and to voluntarily cancel its trademark registration. The respondents refused to accede
to petitioners demand, but expressed willingness to surrender the registration of
respondent Sehwani, Incorporated of the IN N OUT trademark for a fair and reasonable
consideration.

Respondents, on the other hand, asserted that they had been using the mark IN N OUT in
the Philippines since 15 October 1982. On 15 November 1991, respondent Sehwani,
Incorporated filed with the then Bureau of Patents, Trademarks and Technology Transfer
(BPTTT) an application for the registration of the mark IN N OUT (the inside of the letter
O formed like a star). Upon approval of its application, a certificate of registration of the
said mark was issued in the name of respondent Sehwani, Incorporated on 17 December
1993.

Issue:
Whether respondent Sehwani Incorporated is liable for unfair competition.

Held:
Yes. 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
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.

The evidence on record shows that the respondents were not using their registered trademark but
that of the petitioner. Respondent was issued a Certificate of Registration for IN N OUT (with the
Inside of the Letter O Formed like a Star) for restaurant business in 1993. The restaurant opened
only in 2000 but under the name IN-N-OUT BURGER. Apparently, the respondents started
constructing the restaurant only after the petitioner demanded that the latter desist from claiming
ownership of the mark IN-N-OUT and voluntarily cancel their trademark registration.

11. Manzano vs CA

FACTS:

The petitioner filed an action for the cancellation of Letters of Patent covering a gas
burner registered in the name of responded Melecia Madolaria who subsequently assigned the
letter of patent to United Foundry. Petitioner alleged that the private respondent was not the
original, true and actual inventor nor did she derive her rights from the original, true and actual
inventor of the utility model covered by the letter of patent; further alleged that the utility model
covered by the subject letter of patent had been known or used by others in the Philippines for
than one (1) year before she filed her application for letter of patent on Dec 1979. For failure to
present substantive proof of her allegations, the lower court and Court of Appeals denied the
action for cancellation. Hence, the present petition.
ISSUE:

Whether or not the respondent court wrongfully denied the cancellation of letter of
patent registered under the private respondent.

HELD:

No. 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. Clearly enough, the petitioner
failed to present clear and satisfactory proof to overcome every reasonable doubt to afford the
cancellation of the patent to the private respondent.

12. Pearl and Dean vs Shoemart

- Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising display
units simply referred to as light boxes. These units utilize specially printed posters sandwiched
between plastic sheets and illuminated with back lights. Pearl and Dean was able to secure a
Certificate of Copyright Registration over these illuminated display units. The advertising light
boxes were marketed under the trademark Poster Ads. From 1981 to about 1988, Pearl and
Dean employed the services of Metro Industrial Services to manufacture its advertising displays.
- Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to
fabricate its display units, offered to construct light boxes for Shoemarts chain of stores. SMI
approved the proposal and ten (10) light boxes were subsequently fabricated by Metro Industrial
for SMI. After, Pearl and Dean, received reports that exact copies of its light boxes were installed
at SM malls.
- In the light of its discoveries, Pearl and Dean sent a letter to both SMI and NEMI enjoining them
to cease using the subject light boxes and to remove the same from SMIs establishments. It also
demanded the discontinued use of the trademark Poster Ads, and the payment to Pearl and
Dean of compensatory damages in the amount of P20million.
- Upon receipt of the demand letter, SMI suspended the leasing of light boxes and NEMI took
down its advertisements for Poster Ads from the lighted display units in SMIs stores. Claiming
that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed this instant case for
infringement of trademark and copyright, unfair competition and damages.

Issue:

- Whether the engineering or technical drawings of an advertising display unit (light box) are
granted copyright protection (copyright certificate of registration), is the light box depicted in
such engineering drawings ipso facto also protected by such copyright?

Ruling:
 - NO. Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes
when SMI had the units manufactured by Metro and EYD Rainbow Advertising for its own
account. Obviously, petitioners position was premised on its belief that its copyright over the
engineering drawings extended ipso facto to the light boxes depicted or illustrated in said
drawings
- First, petitioners application for a copyright certificate clearly stated that it was for a class O
work under Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute then
prevailing. Said Section 2 expressly enumerated the works subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any
of the following works:

xxx xxx xxx

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

xxx xxx xxx

- Although petitioners copyright certificate was entitled Advertising Display Units (which
depicted the box-type electrical devices), its claim of copyright infringement cannot be sustained.
- Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant,
the rights are limited to what the statute confers. It 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.
- P & D secured its copyright under the classification class O work. This being so, petitioners
copyright protection extended only to the technical drawings and not to the light box itself
because the latter was not at all in the category of prints, pictorial illustrations, advertising
copies, labels, tags and box wraps. Stated otherwise, even as we find that P & D indeed owned a
valid copyright, the same could have referred- only to the technical drawings within the category
of pictorial illustrations. It could not have possibly stretched out to include the underlying light
box. The strict application1[9] of the laws enumeration in Section 2 prevents us from giving
petitioner even a little leeway, that is, even if its copyright certificate was entitled Advertising
Display Units. What the law does not include, it excludes, and for the good reason: the light box
was not a literary or artistic piece which could be copyrighted under the copyright law. And no
less clearly, neither could the lack of statutory authority to make the light box copyrightable be
remedied by the simplistic act of entitling the copyright certificate issued by the National Library
as Advertising Display Units.
- In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public without license
from P & D, then no doubt they would have been guilty of copyright infringement. But this was
not the case. SMIs and NEMIs acts complained of by P & D were to have units similar or
identical to the light box illustrated in the technical drawings manufactured by Metro and EYD
Rainbow Advertising, for leasing out to different advertisers. Was this an infringement of
petitioners copyright over the technical drawings? We do not think so.