CASE DIGEST: United Airlines vs. Commissioner of Internal Revenue (Gross Philippine Billings)

G.R. No. 178788

United Airlines vs. Commissioner of Internal Revenue

September 29, 2010

Facts:

International airline, petitioner United Airlines, filed a claim for income tax refund. Petitioner sought to be refunded the erroneously collected income tax from in the amount of P5,028,813.23 on passenger revenue from tickets sold in the Philippines, the uplifts of which did not originate in the Philippines, arguing that it cannot be considered as income from sources within the philipppines. The airlines ceased operation originating form the Philippines since February 21, 1998.

Court of tAx appeals ruled the petitioner is not entitled to a refund because under the NIRC, income tax on GPB also includes gross revenue from carriage of cargoes from the Philippines. And upon assessment by the CTA, it was found out that petitioner deducted items from its cargo revenues which should have entitled the government to an amount of P 31.43 million, which is obviously higher than the amount the petitioner prayed to be refunded.

Petitioner argued that the petitioner’s supposed underpayment cannot offset his claim to a refund as established by well-settled jurisprudence.

Issue:

Whether or not petitioner is entitled to a refund for its erroneously paid GPB  tax.

HELD:

IS PETITIONER SUBJECT TO GPB?

No, not anymore inasmuch as it ceased operations originating from the Philippines since 1998. 

If an international air carrier maintains flights to and from the Philippines, it shall be taxed at the rate of 2% of its GPB, while international air carriers that do not have flights to and from the Philippines but nonetheless earn income from other activities in the country will be taxed at the rate of 32% of such income.

IS PETITIONER ENTITLED TO REFUND?

NO.

Petitioner was correct in averring that offsetting his claim of refund with his alleged tax deficiency is unavailing in Article 1279 of the Civil Code. However, in citing Sec 72, Chapter XI of the NIRC (as was applied in the case of CIR vs CTA, it was Sec 82 then in the 1977 Tax Code), the grant of refund is founded on the assumption that the return is valid, that is, the facts stated therein are true and correct.

"The finding of the CTA that petitioner, although not liable under Sec. 28(A)(3)(a) of the 1997 NIRC, is liable under Sec. 28(A)(1), the correctness of the return filed by petitioner is now put in doubt. " It's a basic principle in taxation that tax refunds, like tax exemptions, are construed strictly against the taxpayer and liberally in favor of the taxing authority. Having underpaid the GPB tax due, petitioner is not entitled to a refund.

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Case Digest: Ong vs. CA and Robles

G.R. no. 97347

Jaime Ong vs. Court of Appeals and Robles couple

July 6, 1999

Facts:

Petitioner Jaime Ong and respondents, Robles couple executed an “Agreement of Purchase and Sale” with regard to 2 parcels of land, on which a rice mill and a piggery were found and thus included.  The terms and conditions of the contract included an initial payment, payment for the loan of the sellers including interest, and the balance to be satisfied in 4 equal quarterly installments.

As agreed, petitioner took possession of the subject property and everything else thereon upon satisfaction of the initial payment. However, petitioner failed to comply with the payment for the loan. Plus, the checks that the petitioner issued to the couple as payment for the balance were dishonored due to insufficient funds. To avoid foreclosure, the respondent couple sold the ricemill with the knowledge and conformity of petitioner.

Respondents sought for the rescission of the properties due to the latter’s failure to comply with the terms and conditions on the contract.

RTC ruled in favor of the Robles couple and ordered the restitution of the properties. The couple were also ordered to return an amount, as determined by the court, to Ong.

CA affirmed the decision in contemplation of Article 1191 of The New Civil Code

Issue:

(1) whether the contract entered into by the parties may be validly rescinded under Article 1191 of the New Civil Code as distinguished to Article 1383 of the same.

 (2) whether the parties had novated their original contract as to the time and manner of payment.

HELD:

The Contract entered into by the parties was a “Contract to Sell” which means that the payment of the purchase price is a positive suspensive condition, the failure of which is not a breach, casual or serious, but a situation that prevents the obligation of the vendor to convey title from acquiring an obligatory force.

Respondents bound themselves to deliver a deed of absolute sale and clean title covering the two parcels of land upon full payment by the buyer of the purchase price of P2,000,000.00 subject to the fulfillment of the suspensive condition of full payment of the purchase price by the petitioner. Petitioner, however, failed to complete payment of the purchase price. The non-fulfillment of the condition of full payment rendered the contract to sell ineffective and without force and effect.

As to the issue on novation, in order for novation to take place, the concurrence of the following requisites is indispensable: (1) there must be a previous valid obligation; (2) there must be an agreement of the parties concerned to a new contract; (3) there must be the extinguishment of the old contract; and (4) there must be the validity of the new contract. ²⁵ The aforesaid requisites are not found in the case at bench.

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Case Digest: Go-tan vs. Tan

Sharica Mari Go-Tan vs. Spouses Perfecto and Juanita Tan

G.R. No. 168852

September 30, 2008

Facts:

Petitioner Sharica filed a Petition with Prayer for the Issuance of a Temporary Protective Order (TPO) against her husband,Steven, and her parents-in-law, Spouses Perfecto C. Tan and Juanita L. Tan (respondents) in violation of Section 5, paragraphs (e)(2)(3)(4), (h)(5), and (i) of Republic Act (R.A.) No. 9262, otherwise known as the "Anti-Violence Against Women and Their Children Act of 2004."

Respondents contend that they cannot be included in the charge since they are not among the personalities liable as enumerated under the said law by virtue of “expresio unius est exclusion alterius.”

Ruling:

The Court ruled in favor of petitioner with regard to the inclusion of the respondent spouses.

A provision of the said law expressly provides for the suppletory application of the RPC (Section 47 of R.A. No. 9262), which allowed legal principles developed in the RPC may be applied in a supplementary capacity to crimes punished under special laws, such as R.A. 9262.

Citing jurisprudence, the court held that the “principle of conspiracy under Article 8 of the RPC may be applied suppletorily to R.A. No. 9262 because of the express provision of Section 47 that the RPC shall be supplementary to said law. Thus, general provisions of the RPC, which by their nature, are necessarily applicable, may be applied suppletorily. Thus, the principle of conspiracy may be applied to R.A. No. 9262. For once conspiracy or action in concert to achieve a criminal design is shown, the act of one is the act of all the conspirators”.

Furthermore, Section 5 of R.A. 9262 recognizes the acts of violence against women and their children may be committed by an offender through another

The maxim "expressio unios est exclusio alterius" finds no application in the case at bar since it is only an

"ancillary rule of statutory construction” and not of universal application nor is it conclusive. It should be applied only as a means of discovering legislative intent when not plainly indicated.

However, proving conspiracy is a matter of evidence and can be best decided after fullblown trial on the merits.

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Case Digest: People vs. Siera

Robert Siera vs. People

G.R. No. 182941

July 3, 2009

Facts:

Petitioner was found guilty of qualified rape.

Ruling:

In the case bar, the issue is no longer with regard to petitioner’s guilt but on his entitlement of exemption from criminal liability under R.A. 9344 since petitioner’s act of invoking such entitlement carried with it the admission of guilt.

The Court held that petitioner’s minority during the commission of the crime and his not being a habitual criminal entitled him to the retroactive provisions of the said Act.

The Court held that the burden of proving the minority of the accused relied not on the prosecution but to him who sought to benefit from such proof. In assessing the records, the court appreciated the testimonies by petitioner and CCC, his mother, as sufficient proof of establishing petitioner’s age in lieu of  the required birth certificate as provided in Rule 30-A of the Rules and Regulations Implementing R.A. No. 9344. There was also no showing of the prosecution’s objection nor was there a presentation of evidence to contradict said testimonies.

The petitioner, having been granted criminal liability exemption, was nevertheless civilly liable. The Court ordered the payment of civil damages to victim following the characterization of the crime of simple rape, for failure of the prosecution to establish the age of the victim to hold petitioner guilty of qualified rape.

Case against petitioner was dismissed without prejudice to the civil liability. The Court ordered his immediate release and referral to the appropriate local social welfare and development officer who shall proceed in accordance with the provisions of R.A. No. 9344. 

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Case Digest: People vs. Lalli

People vs. Lalli, et al

G.R. No 195419

October 12, 2011

Facts:

The respondents were found guilty in the consolidated case for Illegal Recruitment (Criminal Case no. 21930) and Trafficking in Persons.

Ruling:

The Court ruled against respondents with respect to Criminal Case no. 21930 for Illegal recruitment, reasoning that the inconsistency of the testimonies of respondents was more substantive than that of Lolita’s which involved only minor discrepancies. The victim’s inconsistency was held to be indicative of her candidness which meant that her statements were not rehearsed. Conspiracy under Article 8 was also appreciated by the court in determining the liabilities incurred by respondents. In addition, the Court stated that the mere referral of one respondents of the victim to the other respondent is classified as an act of recruitment under Art 13(b) of the Labor Code.

In Criminal Case No 21908, charging respondents for the violation of RA 9208 or The Anti-trafficking in persons Act, the court likewise ruled against them. The Court gave no credence to the claims of respondents and their witnesses against victim. Furthermore, provided that their statements were true, such statements were immaterial in this case since the crime of Trafficking in Persons can exist even with the victim’s consent or knowledge under Section 3(a) of RA 9208.

Respondents were found guilty of the crime of Qualified Trafficking in Persons committed by a syndicate under RA 9208 because the crime of recruitment for prostitution also constitutes trafficking.

The prohibition of double jeopardy was inapplicable in the case since there were several offenses to which they were punished and had not been done so repeatedly for the same offense.

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Case Digest: People vs. Jacinto

G.R. No. 182239, March 16, 2011

PEOPLE OF THE PHILIPPINES VS. HERMIE M. JACINTO,

Facts:

Appellant Hermie Jacinto was found guilty beyond reasonable doubt for the rape of the then 5-year-old victim. The crime was committed when appellant was only 17; Judgment was rendered when appellant was already 25.

Issue:

Whether or not, appellant may benefit from the provisions of RA9344 regarding criminal liability of an accused who was a minor during the commission of the crime and the suspension of sentence of one who is no longer a minor during the pronouncement of verdict.

Held:

The Court sustained the conviction of the appellant in view of the straightforward testimony of the victim and the inconsistencies of the testimonies of the defense witnesses.

The Court did not exempt accused of his criminal liability although he was only 17 during the commission of the crime since, in view of the circumstances to which accused committed the felony, it was proved that he acted with discernment. (Sec 6, RA 9344). There was showing that the accused understood the consequences of his action.

Applying,  the provision of RA 9346, the accused was meted with reclusion perpetua instead of the death penalty.

As to the civil liability of accused, his minority also had no bearing to the decision of the Court, ordering accused to pay the victim for damages.

However, the Court afforded the accused the benefit of the suspension of his sentence provided in Section38 of RA 9344, which made no distinction to an accused found guilty of a capital offense. The Court stated that what was important was the intent of the Act to uphold the welfare of a child in conflict with the law. What was to be considered was the fact that accused committed the crime at a tender age.

The Court held that accused may be confined in an agricultural camp or any training facility in accordance with Sec 51 of RA 9344. The case was remanded to the court of origin to take appropriate action in accordance to the said provision.

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Caase Digest: DEL MONTE CORPORATION-USA, PAUL E. DERBY, JR., DANIEL COLLINS and LUIS HIDALGO, vs. MONTEBUENO MARKETING, INC., LIONG LIONG C. SY and SABROSA FOODS, INC.

G.R. No. 136154        February 7, 2001
DEL MONTE CORPORATION-USA, PAUL E. DERBY, JR., DANIEL COLLINS and LUIS HIDALGO,  vs.
MONTEBUENO MARKETING, INC., LIONG LIONG C. SY and SABROSA FOODS, INC.

RULING:

The Court ruled the validity of the arbitration clause in the Contract between the contracting parties. However, the Court held that provisions in a contract are binding only between the contracting parties, their assigns and heirs. In the present case, arbitration as provided in the contract can therefore be called for only as to petitioners DMC-USA, Paul Derby and respondents MMI and Lily Sy, and not to other parties. Only the assigns and heirs can have the right to arbitrate.

Citing the case of Salas Jr. vs. Laperal RealtyCorporation, the splitting of the proceedings to arbitration as to some of the parties on one hand and trial for the others cannot be allowed. Otherwise, it would result in a multiplicity of suits, duplicitous procedure and unnecessary delay.

To effect a speedy and efficient resolution of the issues and claims of the parties, a full blown trial must be had. Only then can the interest of justice be served.

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Case Digest: Sea-land Service, Inc. vs. Court of Appeals

SEA-LAND SERVICE, INC., vs.

COURT OF APPEALS, A.P. MOLLER/MAERSK LINE and MAERSK-TABACALERA SHIPPING AGENCY (FILIPINAS), INC.

[G.R. No. 126212. March 2, 2000]

FACTS AND RULING:

Florex was suing in its complaint under the provisions of the bill of lading issued to it by the principal carrier (AMML) and not the bill of lading issued by petitioner as containership operator. Florex, therefore had a proper cause of action against AMML.

The Co-operation in the Pacific contract entered into by the parties provide, nevertheless, that the principal carrier, in case of suits, can seek damages and/or indemnity from petitioner as Containership Operator for whatever final judgment may be adjudged against it under the Complaint of Florex(clause 16.3 of the Agreement).

However, the court held that it is only through arbitration that the liability of the containership operator may be determined pursuant to the provision in the Agreement. The third party complaint by AMML thus cannot proceed without first going through arbitration. 

It was right for the Court to grant the petition and dismiss the third party complaint by AMML.

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Case Digest: HEIRS OF AUGUSTO L. SALAS, JR vs, LAPERAL REALTY CORPORATION, et al

[G.R. NO. 135362.  December 13, 1999]

HEIRS OF AUGUSTO L. SALAS, JR vs, LAPERAL REALTY CORPORATION, et al

RULING:

The Court granted the petition by petitioners regarding the dismissal of the latter’s complaint for rescission of several sale transactions.

The court held that rescission is an arbitrable issue, thus arbitration was necessary before a suit could be filed in court. The Court likewise held that the respondents other than Laperal Realty Corporation were not bound by the Agreement (Owner-Contractor Agreement), the respondent lot buyers not being those contemplated as assignees of the rights of respondent Laperal Realty.  The respondent lot buyers where therefore not vested with the right to arbitrate. However, to impose that arbitration be had between petitioners and Laperal Realty and a trial for respondent lot buyers would result in multiplicity of suits, duplicitous procedure and unnecessary delay.

The Court therefore set aside the dismissal of the petitioner’s complaint and directed that the case proceed in the interest of justice.

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Case Digest: BF Corporation vs. CA

G.R. No. 120105 March 27, 1998

BF CORPORATION vs. COURT OF APPEALS, SHANGRI-LA PROPERTIES, INC., RUFO B. COLAYCO, ALFREDO C. RAMOS, MAXIMO G. LICAUCO III and BENJAMIN C. RAMOS

RULING:

The court sustained the Court of Appeals decision against petitioner, BF Corporation. The court upheld the propriety of the filing of the special civil action of certiorari by respondent, reasoning that what was in question was the alleged premature assumption of jurisdiction by the trial court. In settling the issue, another had to be first determined: the existence of an ‘arbitration clause’.

As opposed to petitioner’s contention that there was no valid ‘Arbitration Clause’ in the contract with respondent because said contract only contained initials of the former’s representatives and none of the latter’s, the court held that failure of the respondents to affix their initial in the “Conditions of Contract” containing the arbitration clause did not affect the compliance with the formal requirements (RA 876, Sec4) for arbitration agreements. The Court held that the subject portion of the covenant between the parties was included by reference in the Articles of Agreement.

The Court also noted the attempt of respondent in pursuing arbitration through the July 12-conference and that the lapse of time from said conference to the day the respondent’s invoked the ‘arbitration clause’ was ‘reasonable’.

The Court therefore denied the petition for certiorari by BF Corporation.

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Case Digest: ABS-CBN Broadcasting Corporation vs. World Interactive Network Systems (WINS) Japan Cp., Ltd.

G.R. No. 169332

ABS-CBN Broadcasting Corporation vs. World Interactive Network Systems (WINS) Japan Cp., Ltd.

FACTS:

ABS-CBN filed a petition for review an arbitrator’s decision in the Court of Appeals. Respondent, on the other hand, filed a petition for confirmation in the RTC.

RULING:

It is the Regional Trial Court (formerly Court of First Instance) that has jurisdiction over questions relating to arbitration, including that of a petition to vacate an arbitral award provided the ground of its appeal fall under those which are enumerated under Section 24 of RA876. In cases other than that, a petition for review under Rule 43(questions of fact, of law, or mixed questions of fact and law) or a petition for certiorari under Rule 65 (should the arbitrator have acted without or in excess of his jurisdiction or with grave abuse of discretion amounting to lack or excess of  jurisdiction) may be availed of in the Court of Appeals.

The Court, however, ruled that the petitioner cannot avail of the remedies alternatively or simultaneously. Otherwise, the petition should be dismissed outright.

The Court added that although petitioner’s position on the judicial remedies available was correct, the latter’s attempt to avail of two remedies---that under Rule 43 and Rule 65--- is impermissible. It is not the duty of the Court to identify which rule the petition should fall.

The Court dismissed the petition.

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Case Digest: Del Monte vs. CA

Del Monte vs. CA

G.R. L-78325

FACTS:

Del Monte sued respondent Sunshine Fruits Catsup for infringement, alleging that the latter was using a label having colorable similarity to petitioner’s label. Petitioner also assails the use of its bottles by respondent.

RULING:

The Court found Sunshine Fruits Catsup guilty of infringement, ruling that the Sunshine label is a colorable imitation of the Del Monte trademark. The Court stressed that what is of utmost consideration is not the side-by-side comparison of the two products with respect to every detail of similarity and difference but rather the general appearance of the products in the eyes of an average consumer. So much so that the imitation of the infringer might deceive a casual purchaser to believe that the two products are the same upon a simple glance. The Court ruled that the label used by the respondent would give such effect. Furthermore, facts of the case lead to the court’s conclusion that the usage of respondents of the bottles by petitioner gave rise to unfair competition. The fact that there was an inscription on the bottles not to be refilled showed bad faith on the part of respondents.

The Court also ruled that since Sunshine’s label was registered not in the Principal Register but only in the Supplemental Register where the presumption of the validity of the trademark, the registrant's ownership of the mark and his right to its exclusive use are all absent.

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Case Digest: Philippine Refining co vs. Ng Sam and Director of Patents

Philippine Refining co vs. Ng Sam and Director of Patents

G.R. No. L-26676 July 30, 1982

FACTS:

The sole issue raised in this petition for review of the decision of the Director of patents is whether or not the product of respondent, Ng Sam, which is ham, and those of petitioner consisting of lard, butter, cooking oil and soap are so related that the use of the same trademark "CAMIA" on said goods would likely result in confusion as to their source or origin.

RULING:

The Court held that the businesses of the parties are non-competitive and their products so unrelated that the identical use of the mark ‘Camia” was not likely to give rise to confusion, much less cause damage to petitioner. The particular goods of the parties are so unrelated that consumers would not in any probability mistake one as the source or origin of the product of the other. Petitioner’s goods are basically derived from vegetable oil and animal fats, while the product of respondent is processed from pig's legs.Furthermore, respondent had on his product the business name "SAM'S HAM AND BACON FACTORY" which would place no question on the origin of the product.

The Court also held that the term subject to the case is not uncommon in view of the fact that there were two others distinct businesses bearing the same name. A trademark must be affirmative and definite, significant and distinctive, capable to indicate origin. It was held that if a mark is so commonplace that it cannot be readily distinguished from others, then he who first adopted it cannot be injured by any subsequent appropriation or imitation by others, and the public will not be deceived. What then is to be reckoned with is the similarity of the products under the mark. The similarity is not on the classification of the property or character of the product but on the sameness of the actual product sold or manufactured. Such similarity is wanting in this case.

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Case Digest: Alexander & Co. vs Ang

Alexander & co vs. Ang

G.R. L-6706

May 31, 1955

 RULING:

The Court found respondents guilty of unfair competition for selling products (Aurora, Agatonica and Mayflower threads) which were, upon examination, similar in appearance to petitioner’s product (Alexander thread).

Citing jurisprudence, the court held that to rule ‘unfair competition’, the names need not use the same words. What is to be borne is the use of similar trademark presented in a similar manner so as to deceive innocent casual or average purchasers. The Court added that although respondents were not the manufacturers of the products, they were nonetheless punishable since Sec 29 punishes the selling of the same. Further, the Court held such as in many preceding cases, that one may be declared an unfair competitor even if he had the label registered. The registration might in some way minimize damages against the seller as showing good faith prima facie. But surely it does not preclude unfair competitive actions.

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Case Digest: PHILIPPINE REFINING CO., INC. vs. NG SAM and THE DIRECTOR OF PATENTS

RULING:

G.R. No. L-26676 July 30, 1982

PHILIPPINE REFINING CO., INC. vs. NG SAM and THE DIRECTOR OF PATENTS

FACTS:

The sole issue raised in this petition for review of the decision of the Director of patents is whether or not the product of respondent, Ng Sam, which is ham, and those of petitioner consisting of lard, butter, cooking oil and soap are so related that the use of the same trademark "CAMIA" on said goods would likely result in confusion as to their source or origin.

RULING:

The mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others on articles of a different description. In fine, the Court hold that the business of the parties are non-competitive and their products so unrelated that the use of identical trademarks is not likely to give rise to confusion,much less cause damage to petitioner.

The records of this case disclose that the term "CAMIA" has been registered as a trademark notonly by petitioner but by two (2) other concerns.

The trademark "CAMIA" is used by petitioner on a wide range of products: lard, butter, cooking oil, abrasive detergents, polishing materials and soap of all kinds. Respondent desires to use the same on his product, ham. While ham and some of the products of petitioner are classified under Class 47 (Foods and Ingredients of Food), this alone cannot serve as the decisive factor in the resolution of whether or not they are related goods. Emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics.

The observation and conclusion of the Director of Patents are correct. The particular goods of the parties are so unrelated that consumers would not in any probability mistake one as thesource or origin of the product of the other. "Ham" is not a daily food fare for the average consumer. One purchasing ham would exercise a more cautious inspection of what he buys onaccount of it price. Seldom, if ever, is the purchase of said food product delegated to householdhelps, except perhaps to those who, like the cooks, are expected to know their business.Besides, there can be no likelihood for the consumer of respondent's ham to confuse its sourceas anyone but respondent. The facsimile of the label attached by him on his product, his business name "SAM'S HAM AND BACON FACTORY" written in bold white letters against a reddish orange background, is certain to catch the eye of the class of consumers to which he caters.

In addition, the goods of petitioners are basically derived from vegetable oil and animal fats,while the product of respondent is processed from pig's legs. A consumer would not reasonably assume that, petitioner has so diversified its business as to include the product of respondent.

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Case Digest: Kho vs. CA

Kho vs CA 

[G.R. No. 115758. March 19, 2002]

FACTS:

 In the case at bar, the petitioner applied for the issuance of a preliminary injunctive order on the ground that she is entitled to the use of the trademark on Chin Chun Su and its container based on her copyright and patent over the same. The respondents, on the other hand, alleged as their defense that Summerville is 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 Issue: WON Petitioner has the right to support her claim for the exclusive use of the subject trade name and its container.

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.

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 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 petitioner’s copyright and patent registration of the name and container would not guarantee her the 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.

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Case Digest: 246 Corporation (Rolex Music Lounge) vs. Daway

G.R. No. 157216             November 20, 2003

246 CORPORATION, doing business under the name and style of ROLEX MUSIC LOUNGE

vs.

HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge of Branch 90 of the Regional Trial Court of Quezon City, MONTRES ROLEX S.A. and ROLEX CENTRE PHIL. LIMITED

FACTS:

Respondents sued Petitioner for violation of the Trademark Law, contending that the use of the mark “Rolex” in “Rolex Music Lounge” by 246 Corporation was an infringement on the rights of respondents to the mark. Petitioner’s defense state that there could be no infringement since respondent and petitioner dealt with goods and services entirely different from one another, thus, confusion to consumers and injury to respondent would unlikely occur.

RULING:

The Court noted the veracity of the claim of petitioner that there is no infringement in the use of a ‘junior user of the registered mark on the entirely different goods as stated in Sec 123.1 (f) of RA 8293. The court however stressed the limitation of the provision such as when the mark used is one that is internationally well-known or is attributable to a well-known licensee or registrant of the said mark. So much so that the use of it by another would affect the reputation of the registrant or its products and/or services due to association by mark usage to junior user. The Court however held that before Sec 123.1 and its limitation are applied in the present case, the criteria to determine whether mark is well-known must first be proven to have been met. The Court said that for such to be established, a full-blown hearing on the merits must first be had. 

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Case Digest: Developers Group of Companies, Inc. vs. Shangri-la International Hotel Management, Inc

Developers Group of Companies, Inc. vs. Shangri-la International Hotel Management, Inc. et. al. CA- G. R. CVNo. 53351

FACTS:

Petitioner was the owner of the “Shangri-La” and the “S” Logo since 1962 and is internationally well-known but is not doing business in the Philippines since early 1980s. Respondent, on the other hand, was the registered owner of the Shangri-la and S logo since 1983 and is using them since then. Petitioner prayed for the granting of its application for registration in the Philippines while respondent filed for infringement against petitioner.

RULING: 

Since IPC of 1988 (RA 8293) did not provide for retroactive application, the Court held that petitioner cannot claim protection under the Paris Convention and ruled that provisions under RA 166 should be applied. Thus, for not meeting the requirement of actual use of commerce in the Philippines(Sec 2, RA 166, requirement for registration), petitioner’s registration cannot be granted.

The Court also ruled that respondent also failed to meet the same requirement when it had the marks registered. Not only that, respondent could not even be deemed the owner of the mark since ownership under Sec 2-A of RA 166 require that the name or mark used must not be appropriated to another and it does not require actual use of a trademark within the Philippines in contradistinction to Sec2. Petitioner was proven to be the owner and originator of the marks even if petitioner failed to comply with Sec2 since it had been using said marks earlier and longer than respondent; such fact respondent knew. Petitioner could not, therefore, be guilty of infringement for a mark which originally came from it.

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Case Digest: Philip Morris v. Court of Appeals and Fortune Tobacco corporation

G.R. No. 91332 July 16, 1993

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., AND FABRIQUES OF TABAC REUNIES, S.A.,petitioners 

vs.

THE COURT OF APPEALS AND FORTUNE TOBACCO CORPORATION

Philip Morris v. Court of Appeals and Fortune Tobacco corporation 

[GR 91332. July 16, 1993]

FACTS:

Respondent contends that petitioner was not in danger of sustaining irreparable damage by the usage of the former of the product name “MARK”, same as that of petitioner’s product, since petitioner was not doing business in the Philippines.

RULING:

Court ruled that petitioner, although not doing business in the Philippines, has the legal right to sue for infringement anyone who uses their duly registered mark. Sec 2 of RA 166 provides that foreign corporations and corporations domiciled in a foreign country are not disabled from bringing suit in Philippine courts to protect their rights as holders of trademarks registered in the Philippines. It was further reinforced by the Paris convention which affords foreign signatories to the said treaty the advantages and protections which Philippine law grants to Philippine nationals. There is no legal requirement that the foreign registrant itself manufacture and sell its products here. All the statute requires is the use in trade and commerce in the Philippines. 

The trademark infringement by a local company may, for one thing, affect the volume of importation into the Philippines of cigarettes bearing petitioners' trademarks by independent or third party traders. The Court was led to believe there was a prima facie basis for holding, as the Patent Office had held and as the Court of Appeals did originally hold, that private respondent's "MARK" infringes upon petitioners' registered trademarks in view of the fact that out of all the words in the English language, respondents chose the word "mark" to refer to its cigarettes. 

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Case Digest: Asia Brewery vs. Court of Appeals

Asia Brewery vs. CA

GR 103543, 5 July 1993

FACTS:

San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark and unfair competition on account of the latter's BEER PALE PILSEN or BEER NA BEER product which has been competing with SMC's SAN MIGUEL PALE PILSEN for a share of the local beer market. 

RULING:

The Court ruled that petitioner ABI was guilty of neither infringement nor unfair comepetition. The Court reasoned that neither the sound, spelling or appearance of Beer Pale Pilsen be said to be confusingly similar to San Miguel Pale Pilsen. The dominant feature of SMC’s trademark is “San Miguel Pale Pilsen” while ABI’s is “Beer Pale Pilsen”. The word “Beer” does not appear in SMC’s product, nor the words “San Miguel” appear in ABI’s product. The difference outweigh the similarity, which the court believed could not possibly create confusion in consumers. The words “Beer”, “pale” and “pilsen” are generic and/or descriptive words, which could not be exclusively attributable to one company(Sec4(e), IPR).

The Court also ruled that ABI did not sell its products, passing them off as though they were from respondent company. There was no showing that ABI’s Beer Pale Pilsen was sold so as to deceive its consumers as to its origin. Therefore, ABI could not be guilty of unfair competition.

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Case Digest: Mcdonalds vs L.C. Big Mak Burger

Mcdonald’s Corporation et.al. vs. L.C. Big Mak Burger, Inc., et. al., G.R. No. 143993, August 18, 2004

FACTS:

The court ruled that the use of the respondents of the “Big Mak” mark infringed the trademark of that of petitioner McDonald’s “Big Mac”. Using the dominancy test, the court reasoned that both marks are closely similar (visually and orally). The law prohibits usage of marks which might cause confusion and mistake or might deceive/mislead consumers as to the origin, general appearance, nature, and kind, among others, of their products and/or services (Sec 155.1, ICP).

RULING:

The court not only ruled on the confusion of similar goods but also on the issue of confusion of business. The Court found that petitioners have duly established McDonald's exclusive ownership of the "Big Mac" mark and that usage of respondents of the “Big Mak” mark has unjustly created the impression that its business is approved and sponsored by, or affiliated with petitioners.

The court also found respondents guilty of unfair competition, reasoning that respondents passed off their products as though they were of petitioner’s. Had respondents gave due notice as to who clearly sells the products, they would have only been guilty of infringement.

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Case Digest: Ong Ai Gui vs. the Director of Patent Office, E.I. Du Pont De Nemours and Company

G.R. No. L-6235             March 28, 1955

ONG AI GUI alias TAN AI GUI, applicant-petitioner, 

vs.the Director of the Philippines Patent Office, respondent. 

E. I. DU PONT DE NEMOURS AND COMPANY, intervenor.

FACTS:

Applicant-petitionerTan Ai gui filed an application with the Director of Patents for the registration of the following tradename: "20th Century Nylon Shirts Factory, which the latter denied.

RULING: 

The Court upheld the Director of Patents reasoning that a word or a combination of words, in this case “nylon” and “shirt factory”, which is merely descriptive of an article of trade, or of its composition, characteristics, or qualities, cannot be appropriated and protected as a trademark to the exclusion of its use by others. 

Furthermore, the use of the term "nylon" in the tradename is both "descriptive" and "deceptively and misdescriptive" of the applicant-appellant's business, for apparently he does not use nylon in the manufacture of the articles he produces and sells. Not to mention, the word “nylon” is a general term which is not distinctive and, thus, cannot be afforded secondary meaning attributable petitioner’s business so as to permit registration.

Applicant petitioner was not entitled to the exclusive use of the terms

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EXECUTIVE ORDER NO. 28: REGULATION AND CONTROL OF THE USE OF FIRECRACKERS AND PYROTECHNIC DEVICES

source: Manila Bulletin

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