Case Digest: Sehwani, Incorporated and/or Benita’s Fries, Inc. vs. In-n-out Burger, Inc.

Petitioner’s Claims:

Petitioners alleged that the Respondent lack the legal capacity to sue because it was not doing business in the Philippines and that it has no cause of action because its mark is not registered or used in the Philippines.  Sehwani, Inc. also claimed that as the registered owner of the “IN N OUT” mark, it enjoys the presumption that the same was validly acquired and that it has the exclusive right to use the mark.  Moreover, petitioners argued that other than the bare allegation of fraud in the registration of the mark, respondent failed to show the existence of any grounds of cancellation thereof under Section 151 of the IP Code of the Philippines.  It also alleged that the action is barred by laches.

Respondent’s Claims:

Respondent, In-n-out Burger, Inc.,  alleged that it is the owner of the tradename “IN-N-OUT” and trademarks “IN-N-OUT,” “IN-N-OUT Burger & Arrow Design” and “IN-N-OUT Burger Logo” which are used in its business since 1948 up to the present.  These tradename and trademarks were registered in the United States as well as in other parts of the world.  Petitioner Sehwani allegedly had obtained a trademark registration for the mark “IN N OUT” (with the inside letter O formed like a star) without its authority.

Issue/s:

• Whether or not the Respondent has the legal capacity to sue for the protection of its trademarks albeit it is not doing business in the Philippines
• Whether or not a ground exists for the cancellation of the Petitioners’ registration

Ruling:

•  Yes. Section 160 RA No. 8293 provides for the right of foreign corporations to sue in trademark or service mark enforcement action, provided that it meets the requirements under Section 3 thereof, which are:

a.       Any convention, treaty or agreement relation to intellectual property right or the repression of unfair competition wherein Philippines is also a party; and

b.      An extension therein of reciprocal rights.

Moreoever, Article 6bis of The Paris Convention, which governs the protection of well-known trademarks, is a self-executing provision and does not require legislative enactment to give it effect in the member country.  The essential requirement therein is that the trademark must be well-known in the country where protection is sought.  In this case, Director Beltran-Abelardo found that In-n-out Burger and Arrow Design is an internationally well0known mark as evidenced by its trademark registrations around the world and its comprehensive advertisements therein.

• Yes. Section 151(b) of RA 8293 provides that a petition to cancel a registration of a mark may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the registration of a mark at any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or has been abandoned, or its registration was fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by or with the permission of, the registrant so as to misrepresent the source of goods or services on or in connection with which the mark is used.  The evidence showed that not only did the petitioners use the IN-N-OUT Burger trademark for the name of their restaurant, but they also used identical or confusingly similar mark for their hamburger wrappers and French-fries receptacles, thereby effectively misrepresenting the source of the goods and services.

Case Digest: Compania General de Tabacos de Filipinas and La Flor de la Isabela, Inc. vs. Hon. Virgilio A. Sevandal, et al.

Petitioners’ Claims:

Petitioners claimed in its Letter-Complaint to the SEC that Tabaqueria, owned by its former General Manager, Gabriel Ripoll, cannot be allowed to continue said name because it will confuse and deceive the public into believing that Tabaqueria is operated and managed by, and part of Tabacalera. Compania General, being a Spain-based company, operated under La Flor de la Isabela in the Philippines. Petitioners filed with the DOJ and the DTI a Complaint for Infringement and Unfair Competition.  Petitioners alleged that Tabaqueria deliberately sought to adopt the Tabacalera trademarks to confuse the public that the Tabaqueria cigars are the same or are somehow connected with the Tabacalera products.  As such, the Petitioners filed for a Motion to grant Cease and Desist Order in order to enjoin Tabaqueria from further producing cigars.

Respondents’ Claims:

Ripoll, now the Directing Manager of Tabaqueria, alleged that there is insufficient evidence to issue a Cease and Desist Order against him on the ground of unfair competition and infringement of trademark.  Moreover, they moved to dismiss the case on the ground of forum shopping.  Further, the Office of Legal Affairs of the DTI ruled that there was no similarity in the general appearance of the products of the parties and consumers would not be misled.  DTI further found that the competing products, in their totality, are easily distinguishable through their brand and logos. “TABACALERA” is the brand of the Tabacalera products, while “FLOR DE MANILA” is the brand of the Petitioners.  In fact, per Certification of BIR in 1994, “Flor de Manila” is the brand registered by the latter with said bureau.  As per inspection, none of their boxes even show the word “TABAQUERIA”.

Issue:

Whether or not there is substantial similarity between the two parties as to amount to unfair competition and trademark infringement, and are therefore entitled to a writ of preliminary injunction.

Ruling:

No.  The Supreme Court upheld the decision of the Court of Appeals and the DTI.  Injunctive relief may only be issued when the right of the complainant is clear and unmistakable; when the invasion of the right sought to be protected is material and substantial; and there is an urgent and paramount necessity for the writ to prevent serious damage.  The Court found that there is no urgent and paramount necessity for the writ.  The Petitioners has not shown, at least tentatively, that there exists a fraudulent and malicious entry into the market and as a result thereby, their sales dropped by 25%.

Case Digest: Mattel, Inc. vs. Emma Francisco, et al.

Petitioner’s Claims:

Mattel, Inc. alleges that Uy’s “Barbie” trademark of confectionary products was confusingly similar to its trademark on dolls, doll clothes and doll accessories.  Mattel argues that its products are items related to Uy’s products; hence, identical trademarks should not be used where the possibility of confusion as to source or origin of the products is certain and that by adopting an exactly identical mark, in spelling and style, Uy should be presumed to have intended to cash in or ride on the goodwill and widespread recognition enjoyed by Mattel’s mark.

Respondents’ Claims:

Jimmy Uy contends that there is no similarity between the two goods.  Emma Francisco, the Director General of IPO, stated that there was no proof on record that Mattel had ventured into the production of chocolates and confectionary products under the trademark “Barbie” to enable it to prevent Uy from using an identical “Barbie” trademark on said goods.  On the other hand, Uy submits that the case has become moot and academic since the records of the IPO will show that no DAU was filed on or before 01 December 2001; thus he is deemed to have abandoned his trademark application.

Issue:

Whether or not the case has become moot and academic

Ruling:

Yes. According to Section 124.2 of RA 8293, the applicant shall file a declaration of actual use of the mark with evidence to that effect with three years from filing date of the application.  Otherwise, the applicant shall be refused.  Moreover, the issues in the present case call for an appraisal of factual considerations which are peculiar only to the transactions and parties involved in the controversy.  The issues raised in this case do not call for a clarification unlike in the cases of David vs. Arroyo, Constantino vs. Sandiganbayan and others.  In the latter cases, moot and academic issues were still decided for these pertain to important and transcendental constitutional issues, which are not in line with this case.