BIRKENSTOCK ORTHOPAEDIE GMBH AND CO.

KG (FORMERLY BIRKENSTOCK ORTHOPAEDIE GMBH)

G.R. No. 194307

Nov. 20, 2013

FACTS:

Petitioner applied for various trademark registrations before the Philippine IPO, namely: a)
“BIRKENSTOCK”; b) “BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND
COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM”; c) “BIRKENSTOCK BAD
HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF A
FOOT, CROSS AND SUNBEAM”. However, the registration proceedings were suspended in view of an
existing registration of mark “BIRKENSTOCK AND DEVICE” in the name of Shoe Town International
and Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo
Marketing Corporation. Here, petitioner filed a petition for cancellation of the registration on the
ground that it is the lawful and rightful owner of the Birkenstock marks.

Respondent filed an opposition, alleging that: a) it, together with its predecessor-in-interest, has
been using Birkenstock marks in the Philippines for more than 16 years through the mark
“BIRKENSTOCK AND DEVICE”; b) the marks covered by the subject applications are identical to the
one covered by the registration and thus, petitioner has no right to the registration of such marks; d)
that while respondent failed to file the 10th Year DAU, it continued the use of “BIRKENSTOCK AND
DEVICE” in lawful commerce, among others.

The BLA rejected the petitioner’s application for registration. It ruled that the competing marks of
the parties are confusingly similar since they contained the work “BIRKENSTOCK” and are used on
the same and related goods. It found respondent as the prior user and adopter of “BIRKENSTOCK” in
the Philippines.

IPO Director General reversed BLA’s ruling, and allowed the registration of petitioner’s application.
CA reversed, and reinstated BLA’s ruling.

ISSUE:

Whether or not the subject marks should be allowed registration in the name of petitioner.

HELD:

Yes.

Respondent is deemed to have abandoned the mark when it failed to file the 10th Year DAU for
Registration on or before the lawful period. As a consequence, it was deemed to have abandoned or
withdrawn any right or interest over the mark “BIRKENSTOCK”.

Petitioner has duly established its true and lawful ownership of the mark “BIRKENSTOCK”. Under
Sec. 2 of RA 166, in order to register a trademark, one must be the owner thereof and must have
actually used the mark in commerce in the Philippines for 2 months prior to the application for
registration.

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The registration of a trademark is not a mode of acquiring ownership. If the applicant is not the
owner of the trademark, he has no right to apply for its registration. Registration merely creates a
prima facie presumption of validity of the registration, of the registrant’s ownership of the
trademark, and of the exclusive right to the use thereof. Clearly, it is not the application or
registration of a trademark that vests ownership thereof, but it is the ownership of a trademark that
confers the right to register the same.

Here, petitioner was able to establish that it is the owner of the mark “BIRKENSTOCK”. It has used it
in commerce long before respondent was able to register the same here in the Philippines.

Fredco vs. Harvard

DOCTRINE:

Well-known marks, whether or not it is registered here, cannot be registered by another in the
Philippines. It is not required that the well-known mark be used in commerce in the Philippines but
only that it is well-known.

FACTS:

Since 1982, New York Garments, a domestic corporation and predecessor of FREDCO, has been
using the mark “Harvard for t-shirts, sandos, briefs, and jackets. It applied for registration of the
mark and was granted a certificate of registration in 1988. Fredco was formed and registered in 1995
and since then handled the manufacture, promotion, and marketing of “Harvard” clothing articles.
Its registration was cancelled subsequently on 1998 for failure to file an affidavit of use/non-use on
the fifth anniversary of registration. On the other hand, Harvard acquired registration of the mark
“Harvard Veritas Shield Symbol” in the Philippines in 1993.

PETITIONER’S CONTENTION:

Fredco filed before the Bureau of Legal Affairs of IPO a petition for cancellation of registration
56561 issued to Harvard in 1993 since, at the time of the issuance of such certificate, the mark
“Harvard” had been already registered by New York Garments in 1988.

RESPONDENT’S CONTENTION:

Respondent alleged that it is the owner of the mark “Harvard” in more than 50 countries. Such
name was adopted in 1639 as the name of Harvard College in Cambridge, Massachusetts, U.S.A. it
was used in commerce in 1872. It also alleged that the mark have been rated as one of the most
famous brands in the world. Respondent also alleged that in 2002, it discovered petitioner’s website
which promotes and advertises the brand name “Harvard Jeans USA” without its consent. The main
page of such website shows an oblong logo bearing the mark “Harvard Jeans USA” “Established
1936” and “Cambridge, Massachusetts”.

The Director of Bureau of Legal Affairs ruled in favor of petitioner and ordered the cancellation
of the certificate of registration of the respondent. On appeal, the Director General of the IPO
reversed the decision of Director of Bureau of Legal Affairs of IPO and decided in favor of the
respondent. The Court of Appeals affirmed the decision of the Director General.

ISSUE:

1. Whether or not the CA is correct in affirming the decision of the Director General of IPO.

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RULING: Yes

Fredco’s registration of the mark “Harvard” should not have been allowed because section 4(a) of
R.A. 166 prohibits the registration of mark which may disparage or falsely suggest a connection with
persons, living or dead, institutions, beliefs… Fredco falsely suggests that their goods are connected
with Harvard University when they registered the mark “Harvard” and uses “Cambridge,
Massachusetts” as identification of origin since Harvard University also uses the mark “Harvard” and
is also located in Cambridge, Massachusetts. Fredco does not have any connection with Harvard
University; it was not established in 1936 or in the USA.

Furthermore, both the USA and the Philippines are signatories to the Paris Convention for the
Protection of Industrial Property. Under such convention, a trade name shall be protected in all the
countries of the Union without the obligation of filing or registration, whether or not it forms part of
a trademark. Hence, the tradename “Harvard” of Harvard University is entitled to protection in the
Philippines even without the registration of such trade name in the Philippines. No other entity may
use such tradename without the Harvard University’s consent.

Ang vs. Tiburcio

Facts:

Respondent Toribio Teodoro has continuously used "Ang Tibay," both as a trade-mark and as a
trade-name, in the manufacture and sale of slippers, shoes, and indoor baseballs since 1910. On
September 29, 1915, he formally registered it as trade-mark and as trade-name on January 3, 1933.

Petitioner Ana Ang registered the same trade-mark "Ang Tibay" for pants and shirts on April 11,
1932, and established a factory for the manufacture of said articles in the year 1937.

The Court of First Instance of Manila absolved the defendant (Ms. Ang) on the grounds that the two
trademarks are dissimilar and are used on different and non-competing goods; that there had been
no exclusive use of the trade-mark by the plaintiff; and that there had been no fraud in the use of
the said trade-mark by the defendant because the goods on which it is used are essentially different
from those of the plaintiff.

The Court of Appeals reversed said judgment, directing the Director of Commerce to cancel the
registration of the trade-mark "Ang Tibay" in favor of petitioner, and perpetually enjoining the latter
from using said trade-mark on goods manufactured and sold by her.

Thus, this case, a petition for certiorari.

Issue:

Are the goods or articles or which the two trademarks are used similar or belong to the same class of
merchandise?

Ruling:

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Yes, pants and shirts are goods closely similar to shoes and slippers. They belong to the same class of
merchandise as shoes and slippers. They are closely related goods.

The Supreme Court affirmed the judgment of the Court of Appeals and added that “although two
non-competing articles may be classified under to different classes by the Patent Office because they
are deemed not to possess the same descriptive properties, they would, nevertheless, be held by the
courts to belong to the same class if the simultaneous use on them of identical or closely similar
trademarks would be likely to cause confusion as to the origin, or personal source, of the second
user’s goods. They would be considered as not falling under the same class only if they are so
dissimilar or so foreign to each other as to make it unlikely that the purchaser would think that the
first user made the second user’s goods”.

MANG INASAL v. IFP MANUFACTURING CORPORATION

FACTS:

The Trademark Application and the Opposition Respondent IFP Manufacturing Corporation is a local
manufacturer of snacks and beverages.

On May 26, 2011, respondent filed with the Intellectual Property Office (IPO) an application for the
registration of the mark "OK Hotdog Inasal Cheese Hotdog Flavor Mark"in connection with goods
under Class 30 of the Nice Classification. The said mark, which respondent intends to use on one of
its curl snack products. The application of respondent was opposed by petitioner Mang Inasal
Philippines, Inc. Petitioner is a domestic fast food company and the owner of the mark "Mang Inasal,
Home of Real Pinoy Style Barbeque and Device" (Mang Inasal mark) for services under Class 43 of
the Nice Classification. The said mark, which was registered with the IPO in 2006 and had been used
by petitioner for its chain of restaurants since 2003.

Petitioner, in its opposition, contended that the registration of respondent's OK Hotdog Inasal mark
is prohibited under Section 123.l (d)(iii) of Republic Act No. (RA) 8293. Petitioner averred that the OK
Hotdog Inasal mark and the Mang Inasal mark share similarities-both as to their appearance and as
to the goods or services that they epresent which tend to suggest a false connection or association
between the said marks and, in that regard, would likely cause confusion on the part of the public.
As petitioner explained:

1. The OK Hotdog Inasal mark is similar to the Mang Inasal mark. Both marks feature the same
dominant element-i.e., the word "INASAL"-printed and stylized in the exact same manner, viz:

a. In both marks, the word "INASAL" is spelled using the same font style and red color;

b. In both marks, the word "INASAL" is placed inside the same black outline and yellow background;
and

c. In both marks, the word "INASAL" is arranged in the same staggered format.

2. The goods that the OK Hotdog Inasal mark is intended to identify (i.e., curl snack products) are
also closely related to the services represented by the Mang Inasal mark (i.e., fast food restaurants).
Both marks cover inasal or inasal-flavored food products. Petitioner's opposition was referred to the
Bureau of Legal Affairs (BLA) of the IPO for hearing and disposition.

ISSUE:

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Whether or not the registration of respondent's OK Hotdog Inasal mark is prohibited under Section
123.l (d) (iii) of Republic Act No. (RA) 8293

HELD:

Yes. The OK Hotdog Inasal mark meets the two conditions of the proscription under Sec. 123.l(d)(iii)
of RA 8293. First, it is similar to the Mang Inasal mark, an earlier mark. Second, it pertains to goods
that are related to the services represented by such earlier mark.

The Proscription: Sec. 123.l(d)(iii) of RA 8293 A mark that is similar to a registered mark or a mark
with an earlier filing or priority date (earlier mark) and which is likely to cause confusion on the part
of the public cannot be registered with the IPO. Such is the import of Sec. 123.l(d)(iii) of RA 8293:
SECTION 123. Registrability. – 123. 1. A mark cannot be registered if it:

Verily, to fall under the ambit of Sec. 123. l(d)(iii) and be regarded as likely to deceive or cause
confusion upon the purchasing public, a prospective mark must be shown to meet two (2) minimum
conditions:

1. The prospective mark must nearly resemble or be similar to an earlier mark; and

2. The prospective mark must pertain to goods or services that are either identical, similar or related
to the goods or services represented by the earlier mark.

MCDONALD’S CORPORATION VS. L.C. BIG MAK BURGER, INC.

FACTS:

Petitioner McDonald’s Corporation is a corporation organized under the laws of Delaware, United
States. McDonald’s operates a global chain of fast-food restaurants. McDonald’s own a family of
marks including the “Big Mac” mark for its double-decker hamburger sandwich.

McDonald’s registered this trademark with the United States Trademark Registry on 16 October
1979. Based on this Home Registration, McDonald’s applied for the registration of the same mark in
the Principal Register of then then Philippine Bureau of Patents, Trademarks and Technology (PBPTT)
– now the Intellectual Property Office (IPO).

Pending approval of its application, McDonald’s introduced its “Big Mac” hamburger sandwiches in
the Philippine market in September 1981. On 18 July 1985, the PBPTT allowed registration of the
“Big Mac” mark in the Philippine Register based on its Home Registration in the United States. From
1982 to 1990, McDonald’s spent P10.5 million in advertisement for “Big Mac” hamburger
sandwiches alone.

Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food outlets and
snack vans in Metro Manila and nearby provinces. Its menu includes hamburger sandwiches and
other food items.

On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the “Big
Mak” mark for its hamburger sandwiches.

McDonald’s opposed respondent corporation’s application on the ground that “Big Mak” was a
colorable imitation of its registered “Big Mac” mark for the same food products.

ISSUES:

1. Is the respondent guilty of trademark infringement and unfair competition?

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2. Is the “Big Mac” mark valid and does McDonald’s have rightful ownership to the same?

RULING:

1. YES.

Trademark Infringement

RA 166 defines trademark infringement as “any person who (1) shall use, without the consent of the
registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or
trade-name in connection with the sale, offering for sale, or advertising of any goods, business or
services on or in connection with which use is likely to CAUSE CONFUSION or otherwise mistake or
to deceive purchasers or others as to the source or origin of such goods or services or identity of
such business; or (2) reproduce, counterfeit, copy, or colorably imitate any such mark or trade-name
and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in connection with
such goods, business or services.”

Clearly, there is cause for confusion in the case at bar. By using the “Big Mak” mark on the same
goods, i.e. hamburger sandwiches, that petitioners’ “Big Mac” mark is used, they have unjustly
created the impression that its business is approved and sponsored by, or affiliated with plaintiffs.

Furthermore, using the dominancy test (rather than the holistic test), wherein the dominant features
in the competing marks are considered, Big Mak failed to show that there could be no confusion.
The Court found that respondents’ use of the “Big Mak” mark results in likelihood of confusion. First,
“Big Mak” sounds exactly the same as “Big Mac.” Second, the first word in “Big Mak” is exactly the
same as the first word in “Big Mac.” Third, the first two letters in “Mak” are the same as the first two
letters in “Mac.” Fourth, the last letter in “Mak” while a “k” sounds the same as “c” when the word
“Mak” is pronounced. Fifth, in Filipino, the letter “k” replaces “c” in spelling, thus “Caloocan” is
spelled “Kalookan.” In short, aurally, the two marks are the same.

Unfair Competition

With regard to unfair competition, RA 166, Section 29 defines the same as any person who will
employ deception or any other means contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or services for those of the one having
established such goodwill, or who shall commit any acts calculated to produce said result.

Unfair competition is broader than trademark infringement and includes passing off goods with or
without trademark infringement. Trademark infringement is a form of unfair competition.
Trademark infringement constitutes unfair competition when there is not merely likelihood of
confusion, but also actual or probable deception on the public because of the general appearance of
the goods.

L.C. Big Mak tried to pass off their goods as though it were connected to “Big Mac.” The mark “B[ig]
M[ac]” is used by plaintiff McDonald’s to identify its double decker hamburger sandwich. The
packaging material is a styrofoam box with the McDonald’s logo and trademark in red with block
capital letters printed on it. All letters of the “B[ig] M[ac]” mark are also in red and block capital
letters. On the other hand, defendants’ “B[ig] M[ak]” script print is in orange with only the letter “B”

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and “M” being capitalized and the packaging material is plastic wrapper. x x x x Further, plaintiffs’
logo and mascot are the umbrella “M” and “Ronald McDonald’s,” respectively, compared to the
mascot of defendant Corporation which is a chubby boy called “Macky” displayed or printed
between the words “Big” and “Mak.”(Emphasis supplied)

Respondents point to these dissimilarities as proof that they did not give their hamburgers the
general appearance of petitioners’ “Big Mac” hamburgers.

The dissimilarities in the packaging are minor compared to the stark similarities in the words that
give respondents’ “Big Mak” hamburgers the general appearance of petitioners’ “Big Mac”
hamburgers. Section 29(a) expressly provides that the similarity in the general appearance of the
goods may be in the “devices or words” used on the wrappings. Respondents have applied on their
plastic wrappers and bags almost the same words that petitioners use on their styrofoam box. What
attracts the attention of the buying public are the words “Big Mak” which are almost the same,
aurally and visually, as the words “Big Mac.” The dissimilarities in the material and other devices are
insignificant compared to the glaring similarity in the words used in the wrappings.

YES.

A mark is valid if it is “distinctive” and thus not barred from registration under Section 4 of RA 166.
However, once registered, not only the mark’s validity but also the registrant’s ownership of the
mark is prima facie presumed.

Respondents contend that of the two words in the “Big Mac” mark, it is only the word “Mac” that is
valid because the word “Big” is generic and descriptive (proscribed under Section 4[e]), and thus
“incapable of exclusive appropriation.”

The contention has no merit. The “Big Mac” mark, which should be treated in its entirety and not
dissected word for word,is neither generic nor descriptive.

MCDONALD’S CORP. v. MCJOY

FACTS:

Macjoy Fastfood Corporation (Macjoy), a corporation selling fried chicken, chicken barbeque,
burgers, fries, spaghetti, palabok, tacos, sandwiches, halo-halo and steaks (fastfood products) in
Cebu City filed with the BPTT-IPO an application for the registration of the trademark “MACJOY &
DEVICE”.

McDonald’s Corporation, a corporation organized under the laws of Delaware, USA opposed against
the respondent’s application claiming that such trademark so resembles its corporate logo (Golden
Arches) design and its McDONALD’s marks such that when used on identical or related goods, the
trademark applied for would confuse or deceive purchasers into believing that the goods originated
from the same source or origin.

Macjoy on the other hand averred that the it has used the mark “MACJOY” for tha past many years
in good faith and has spent considerable sums of money for extensive promotions x x x.

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The IPO ratiocinated that the predominance of the letter “M” and the prefixes “Mac/Mc” in both the
Macjoy and McDonald’s marks lead to the conclusion that there is confusing similarity between
them x x x. Therefore, Macjoy’s application was denied.

Upon appeal to the CA it favored with MacJoy and against McDonald’s. The Court of Appeals, in
ruling over the case, actually used the holistic test (which is a test commonly used in infringement
cases). The holistic test looks upon the visual comparisons between the two trademarks. The
justifications are the following:

1. The word “MacJoy” is written in round script while the word “McDonald’s is written in single
stroke gothic;

2. The word “MacJoy” comes with the picture of a chicken head with cap and bowtie and wings
sprouting on both sides, while the word “McDonald’s” comes with an arches “M” in gold colors, and
absolutely without any picture of a chicken;

3. The word “MacJoy” is set in deep pink and white color scheme while the word “McDonald’s” is
written in red, yellow, and black color combination;

4. The facade of the respective stores of the parties, are entirely different.

ISSUE: Whether there is a confusing similarity between the McDonald’s marks of the petitioner and
the respondent’s “MACJOY & DEVICE” trademark when it applied to classes 29 ad 30 of the
International Classification of Goods.

RULING: YES.

The Supreme Court ruled that the proper test to be used is the dominancy test. The dominancy test
not only looks at the visual comparisons between two trademarks but also the aural impressions
created by the marks in the public mind as well as connotative comparisons, giving little weight to
factors like prices, quality, sales outlets and market segments. In the case at bar, the Supreme Court
ruled that “McDonald’s” and “MacJoy” marks are confusingly similar with each other such that an
ordinary purchaser can conclude an association or relation between the marks. To begin with, both
marks use the corporate “M” design logo and the prefixes “Mc” and/or “Mac” as dominant features.
The first letter “M” in both marks puts emphasis on the prefixes “Mc” and/or “Mac” by the similar
way in which they are depicted i.e. in an arch-like, capitalized and stylized manner. For sure, it is the
prefix “Mc,” an abbreviation of “Mac,” which visually and aurally catches the attention of the
consuming public. Verily, the word “MACJOY” attracts attention the same way as did “McDonalds,”
“MacFries,” “McSpaghetti,” “McDo,” “Big Mac” and the rest of the MCDONALD’S marks which all use
the prefixes Mc and/or Mac. Besides and most importantly, both trademarks are used in the sale of
fastfood products.

Further, the owner of MacJoy provided little explanation why in all the available names for a
restaurant he chose the prefix “Mac” to be the dominant feature of the trademark. The prefix “Mac”
and “Macjoy” has no relation or similarity whatsoever to the name Scarlett Yu Carcel, which is the
name of the niece of MacJoy’s president whom he said was the basis of the trademark MacJoy. By
reason of the MacJoy’s implausible and insufficient explanation as to how and why out of the many
choices of words it could have used for its trade-name and/or trademark, it chose the word
“Macjoy,” the only logical conclusion deducible therefrom is that the MacJoy would want to ride
high on the established reputation and goodwill of the McDonald’s marks, which, as applied to its
restaurant business and food products, is undoubtedly beyond question.

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