G.R. No. L-14761 January 28, 1961

ARCE SONS AND COMPANY, petitioner, vs.SELECTA BISCUIT COMPANY, INC., ET AL., respondents.

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G.R. No. L-17981 January 28, 1961

ARCE SONS AND COMPANY, plaintiff-appellee, vs.SELECTA BISCUIT COMPANY, INC., defendant-appellant.

Manuel O. Chan and Ramon S. Ereñeta for plaintiff-appellee.E. Voltaire Garcia for defendant-appellant.

BAUTISTA ANGELO, J.:

On August 31, 1955, Selecta Biscuit Company, Inc., hereinafter referred to as respondent, filed with the Philippine Patent Office a petition for the registration of the word "SELECTA" as trade-mark to be use in its bakery products alleging that it is in actual use thereof for not less than two months before said date and that "no other persons, partnership, corporation or association ... has the right to use said trade-mark in the Philippines, either in the identical form or in any such near resemblance thereto, as might be calculated to deceive." Its petition was referred to an examiner for study who found that the trade-mark sought to be registered resembles the word "SELECTA" used by the Acre and Sons and Company, hereinafter referred to as petitioner, in its milk and ice cream products so that its use by respondent will cause confusion as to the origin of their respective goods. Consequently, he recommended that the application be refused. However, upon reconsideration, the Patent Office ordered the publication of the application for purposes of opposition.

In due time, petitioner filed its opposition thereto on several grounds, among which are: (1) that the mark "SELECTA" had been continuously used by petitioner in the manufacture and sale of its products, including cakes, bakery products, milk and ice cream from the time of its organization and even prior thereto by its predecessor-in-interest, Ramon Arce; (2) that the mark "SELECTA" has already become identified with name of the petitioner and its business; (3) that petitioner had warned respondent not to use said mark because it was already being used by the former, but that the latter ignored said warning; (4) that respondent is using the word "SELECTA" as a trade-mark as bakery products in unfair competition with the products of petitioner thus resulting in confusion in trade; (5) that the mark to which the application of respondent refers has striking resemblance, both in appearance and meaning, to petitioner's mark as to be mistaken therefor by the public and cause respondent's goods to be sold as petitioner's; and (6) that actually a complaint has been filed by the petitioner against respondent for unfair competition in the Court of First Instance of Manila asking for damages

and for the issuance of a writ of injunction against respondent enjoining the latter for continuing with the use of said mark.

On September 28, 1958, the Court of First Instance of Manila rendered decision in the unfair competition case perpetually enjoining respondent from using the name "SELECTA" as a trade-mark on the goods manufactured and/or sold by it and ordering it to pay petitioner by way of damages all the profits it may have realized by the use of said name, plus the sum of P5,000.00 as attorney's fee and costs of suit. From this decision, respondent brought the matter on appeal to the Court of Appeals wherein the case was docketed as CA-G.R. No. 24017-R.

Inasmuch as the issues of the facts in the case of unfair competition are substantially identical with those raised before the Patent Office, the parties at the hearing thereof, agreed to submit the evidence they introduced before the Court of First Instance of Manila to said office, and on the strength thereof, the Director of Patents, on December 7, 1958, rendered decision dismissing petitioner's opposition and stating that the registration of the trade-mark "SELECTA" in favor of applicant Selecta Biscuits Company, Inc. will not cause confusion or mistake nor will deceive the purchasers as to the cause damage to petitioner. Hence, petitioner interposed the present petition for review.

On September 7, 1960, this Court issued a resolution of the following tenor:

In G.R. No. L-14761 (Arce Sons and Company vs. Selecta Biscuits Company, Inc., et al.), considering that the issue raised and evidence presented in this appeal are the same as those involved and presented in Civil Case No. 32907, entitled Arce Sons and Company vs. Selecta Biscuit Company, Inc. of the Court of First Instance of Manila, presently pending appeal in the Court of Appeals, docketed as CA-G.R. No. 24017-R, the Court resolved to require the parties, or their counsel, to inform this Court why the appeal pending before the Court of Appeals should not be forwarded to this Court in order that the two cases may be consolidated and jointly decided, to avoid any conflicting decision, pursuant to the provisions of section 17, paragraph 5, of the Judiciary Act of 1948 (Republic Act No. 296).

And having both petitioner and respondent manifested in writing that they do not register any objection that the case they submitted on appeal to the Court of Appeals be certified to this Court so that it may be consolidated with the present case, the two cases are now before us for consolidated decision.

The case for petitioner is narrated in the decision of the court a quo as follows: .

"In 1933, Ramon Arce, predecessor in interest of the plaintiff, started a milk business in Novaliches, Rizal, using the name 'SELECTA' as a trade-name as well as a trade-mark. He begun selling and distributing his products to different residences, restaurants and offices, in bottles on the caps of which were inscribed the words 'SELECTA FRESH MILK.' As his business prospered, he thought of expanding and, in facts, he expanded his business by establishing a store at Nos. 711-713 Lepanto Street. While there, he began to cater, in addition to milk, ice cream, sandwiches

and other food products. As his catering and ice cream business prospered in a big way, he placed a sign signboard in his establishment with the name 'SELECTA' inscribed thereon. This signboard was place right in front of the said store. For the sake of efficiency, the Novaliches place was made the pasteurizing plant and its products were distributed through the Lepanto store. Special containers made of tin cans with the words 'SELECTA' written on their covers and 'embossed or blown' on the bottles themselves were used. Similarly, exclusive bottles for milk products were ordered from Getz Brothers with the word 'SELECTA 'blown on them. The sandwiches which were sold and distributed were wrapped in carton boxes with covers bearing the name 'SELECTA.' To the ordinary cars being used for the delivery of his products to serve outside orders were added to a fleet of five (5) delivery trucks with the word 'SELECTA ' prominently painted on them. Sales were made directly at the Lepanto store or by means of deliveries to specified addresses, restaurants and offices inside Manila and its suburbs and sometimes to customers in the provinces. As time passed, new products were produced for sale, which as cheese (cottage cheese) with special containers especially ordered from the Philippine Education Company with the 'SELECTA ' written on their covers.

The war that broke out on December 8, 1941, did not stop Ramon Arce from continuing with his business. After a brief interruption of about a mouth, that is, during the end of January, 1942, and early February, 1942, he resumed his business using the same trade-name and trade-mark, but this time, on a large scale. He entered the restaurant business. Dairy products ice cream, milk, sandwiches continued to be sold and distributed by him. However, Ramon Arce was again forced to discontinue the business on October, 1944, because time was beginning to be precarious. American planes started to bomb Manila and one of his sons, Eulalio Arce, who was managing the business, was seized by the Japanese. Liberation came and immediately thereafter. Ramon Arce once more resumed his business, even more actively, by adding another store located at the corner of Lepanto and Azcarraga Streets. Continuing to use the name 'Selecta,' he added bakery products to his line of business. With a firewood type of oven, about one-half the size of the courtroom, he made his own bread, cookies, pastries and assorted bakery products. Incidentally, Arce's bakery was transferred to Balintawak, Quezon City — another expansion of his business — where the bakery products are now being baked thru the use of firewood, electric and gas oven. These bakery products, like his other products, are being sold the store itself and /or delivered to people ordering them in Manila and even Baguio. Like the other products, special carton boxes in different sizes, according to the bakery products, with the name 'Selecta' on top of the covers are provided for these bakery products. For the cakes, special boxes and labels reading 'Selecta Cakes for all occasions' are made. For the milk products, special bottle caps and bottles with the colored words 'Quality Always Selecta Fresh Milk, One Pint' inscribed and blown on the sides of the bottles - an innovation from the old bottles and caps used formerly. Similar, special boxes with the name 'Selecta 'are provided for fried chicken sold to customers.

Business being already well established, Ramon Arce decided to retire, so that his children can go on with the business. For this purpose, he transferred and leased to

them all his rights, interest and participations in the business, including the use of the name of 'Selecta,' sometime in the year 1950, at a monthly rental of P10,000.00, later reduced to P6,500.00. He further wrote the Bureau of Commerce letter dated February 10, 1950, requesting cancellation of the business name 'Selecta Restaurant' to give way to the registration of the same 'Selecta' and asked that the same be registered in the name of Arce Sons & Company, a co-partnership entered into by and among his children on February 10, 1950. Said co-partnership was organized, so its articles of co-partnership state, 'conduct a first class restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other dairy and bakery products; and to carry on such other legitimate business as may produce profit'; Arce Sons & Company has thus continued the lucrative business of their predecessor in interest. It is now, and has always been, engaged in the restaurant business, the sale of milk, and the production and sale of cakes, dairy products and bakery products. Arce Sons & Company are now making bakery products like bread rolls, pan de navaro, pan de sal, and other types, of cookies and biscuit of the round, hard and other types, providing thereof special boxes with the same "Selecta'.

Pursuing the policy of expansion adopted by their predecessor, Arce Sons & Company established another store the now famous 'Selecta Dewey Boulevard', with seven (7) delivery trucks with the 'Selecta ' conspicuously painted on them, to serve, deliver, and cater to customers in and outside of Manila." .

The case for respondent on the other hand, is expressed as follows:

Defendant was organized and registered as a corporation under the name and style of Selecta Biscuit Company, Inc. on March 2, 1955 (Exhibit 2-A; p. 3, April 17, 1958) but started operation as a biscuit factory on June 20 1955 (t.s.n. p.3, id). The name 'Selecta' was chosen by the organizers of defendant who are Chinese citizens as a translation of the Chinese word 'Ching Suan' which means 'mapili' in Tagalog, and Selected' in English (t.s.n. p, id.). Thereupon, the Articles of Incorporation of Selecta Biscuit Company, Inc. were registered with the Securities and Exchange Commission (t.s.n. P.5. id.), and at the same time registered as a business name with the Bureau of Commerce which issued certificate of registration No. 55594 (Exhibit 3; Exhibit 3-A). The same name Selecta Biscuit Company, Inc. was also subsequently registered with the Bureau of Internal Revenue which issued Registration Certificate No. 35764 (Exhibit 4, t.s.n., p. id.). Inquiries were also made with the Patent Office of 'Selecta'; after an official of the Patent referred to index cards information was furnished to the effect that defendant could register the name 'Selecta' with the Bureau of Patents (t.s.n. ,p.7, id). Accordingly, the corresponding petition for registration of trade-mark was filed (Exhs. 5,5-A, Exhibit 5-B). Defendant actually operated its business factory on June 20, 1955, while the petition for registration of trade-mark 'Selecta' was filed with the Philippine Patent Office only on September 1, 1955, for the Philippine Patent Office informed the defendant that the name should first be used before registration (t.s.n. p.8 ,id.). The factory of defendant is located at Tuazon Avenue, Northern Hills, Malabon, Rizal, showing plainly on its wall facing the streets the name 'SELECTA BISCUIT COMPANY, INC.' (Exhs. 6, 6-a 6-B, t.s.n., p. 9, id.). It is significant to note that Eulalio

Arce, Managing Partner of the plaintiff resided and resides near the defendant's factory, only around 150 meters away ; in fact, Arce use to pass in front of the factory of defendant while still under construction and up to the present time (t.s.n., pp. 9, 10, id.). Neither Eulalio Arce nor any other person in representation of the plaintiff complained to the defendant about the use of the name 'Selecta Biscuit' until of the present complaint.

There are other factories using 'Selecta as trade-mark for biscuit (t.s.n., p. 12; Exhs. 7, 7-A,7-B; Exhibit 8, 8-A, 8-B; Exhibits Exhibit 9, 9-A, 9-B); defendant in fact uses different kinds of trade-mark (Exhibit 10, 10-A, to 10-W, t.s.n., p. 17).

The biscuits, cookies, and crackers manufactured and sold by defendant are wrapped in cellophane pouches and place inside tin can (Exh. 11; t.s.n. p. 19); the products of defendant are sold through the length and breadth of the Philippines through agents with more than one hundred 600 stores as customers buying on credit (t.s.n.) pp. 19, 20, Exh. 12; t.s.n., p. 10, June 20, 1958). Defendant employs more than one hundred (100) laborers and employees presently although it started with around seventy (70) employees and laborers (t.s.n. p. 24); its present capitalization fully paid is Two Hundred Thirty Four Thousand Pesos (P234,000.00.)additional capitalization's were duly authorized by the Securities and Exchange Commission (Exhs. 13, 13-A) there was no complaint whatsoever from plaintiff saw defendant's business growing bigger and bigger and flourishing (t.s.n., p. 21); when plaintiff filed its complaint.

Defendant advertises its products through radio broadcast and spot announcement (Exhs. 14, 14-A to 14-L; inclusive Exhs. 15, 15-A, 15-B, 15-C; Exh. 16, 16-A, 16-B to 16-E, inclusive; Exhs. 17, 17-B to 17-L, inclusive); the broadcasts scripts announced therein through the radio clearly show, among others, that Selecta Biscuit are manufactured by Selecta Company, Inc. at Tuazon Avenue, Northern Hills, Malabon, Rizal, with Telephone ]No. 2-13-27 (Exhs. 23-A 23-B, 23-D, 23-E, 23-F).

Besides the signboard, 'Selecta Biscuit Company, Inc.' on the building itself, defendant has installed signboard along the highways to indicate the location of the factory of defendant (Exhs. 18, 18-A); delivery trucks defendant are plainly carrying signboards Selecta Biscuit Company, Inc., Tuazon Avenue, Northern Hills Malabon, Rizal, Telephone No. 2-13-27 (Exhs. 19, 19-A, 19-B, 19-C 19-D,19-E,19-F). Defendant is using modern machineries in its biscuit factory (Exhs. 20, 20-A, 20-B, 19-C, 20-D, 20-E). The defendant sells its products thoughout 20-C, 20-D,20-E). The defendant sells its product throughout the Philippines, including Luzon , Visayas, Mindanao; its customers count, among others, 600 stores buying on credit; its stores buying on cash number around 50 (t.s.n.), p. 10). Sales in Manila and suburbs are minimal, (Exh. 12). Defendant is a wholesaler and not a retailer of biscuits, cookies and crackers. This is the nature of the operation of the business of the defendant."

At the outset one cannot but note that in the two cases appealed before us which involve the same parties and the same issues of fact and law, the Court a quo and the Director of Patents

have rendered contradictory decisions. While the former is of the opinion that the word 'SELECTA' has been used by the petitioner, or its predecessor-in-interest, as a trade-mark in the sale and distribution of its dairy and bakery products as early as 1933 to the extent that it has acquired a proprietary connotation so that to allow respondent to use it now as a trade-mark in its business would be an usurpation of petitioner's goodwill and an infringement of its property right, the Director of Patents entertained a contrary opinion. He believes that the word as used by the petitioner functions only to point to the place of business or location of its restaurant while the same word as used by respondent points to the origin of the products its manufactures and sells and he predicates this distinction upon the fact that while the goods of petitioner are only served within its restaurant or sold only on special orders in the City of Manila, respondent's goods are ready-made and are for sale throughout the length and breadth of the country. He is of the opinion that the use of said trade-mark by respondent has not resulted in confusion in trade contrary to the finding of the court a quo. Which of this opinions is correct is the issue now for determination.

It appears that Ramon Arce, predecessor-in-interest of petitioner, started his milk business as early as 1933. He sold his milk products in bottles covered with caps on which the words 'SELECTA FRESH MILK' were inscribed. Expanding his business, he established a store at Lepanto Street, City of Manila, where he sold, in addition to his products, ice cream, sandwiches and other food products, placing right in front of his establishment a signboard with the name 'SELECTA' inscribed thereon. Special containers made of tin cans with the word 'SELECTA' written on their covers were used for his products. Bottle with the same word embossed on their sides were used for his milk products. The sandwiches he sold and distributed were wrapped in carton boxes with covers bearing the same name. He used several cars and trucks for delivery purposes on the sides of which were written the same word. As new products were produced for sale, the same were placed in containers with the same name written on their covers. After the war, he added to his business such items as cakes, bread, cookies, pastries, and assorted bakery products. Then his business was acquired by petitioner, a co-partnership organized by his sons, the purposes of which are "to conduct a first class restaurant business; to engage in the manufacture and sale of ice cream, milk, cakes and other products; and to carry on such other legitimate business as may produce profit."

The foregoing unmistakably show that petitioner, through its predecessor-in-interest, had made use of the word "SELECTA" not only as a trade-name indicative of the location of the restaurant where it manufactures and sells its products, but as trade-mark is used. This is not only in accordance with its general acceptation but with our law on the matter. "

Trade-mark' or trade-name', distinction being highly technical, is sign, device, or mark by which articles produced are dealt in by particular person or organization are distinguished or distinguishable from those produced or dealt in by other." (Church of God v. Tomlinson Church of God, 247 SW 2d, 63,64)"

A 'trade-mark' is a distinctive mark of authenticity through which the merchandise of a particular producer or manufacturer may be distinguished from that of others, and its sole function is to designate distinctively the origin of the products to which it is attached." (Reynolds & Reynolds Co. v. Nordic, et. al., 114F 2d, 278) "

The term 'trade-mark' includes any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others." (Section 38, Republic Act No. 166).

Verily, the word 'SELECTA' has been chosen by petitioner and has been inscribed on all its products to serve not only as a sign or symbol that may indicate that they are manufactured and sold by it but as a mark of authenticity that may distinguish them from the products manufactured and sold by other merchants or businessmen. The Director of Patents, therefore, erred in holding that petitioner made use of that word merely as a trade-name and not as a trade-mark within the meaning of the law.1

The word 'SELECTA', it is true, may be an ordinary or common word in the sense that may be used or employed by any one in promoting his business or enterprise, but once adopted or coined in connection with one's business as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may acquire a secondary meaning as to be exclusively associated with its products and business.2 In this sense, its used by another may lead to confusion in trade and cause damage to its business. And this is the situation of petitioner when it used the word 'SELECTA' as a trade-mark. In this sense, the law gives its protection and guarantees its used to the exclusion of all others a (G. & C. Merriam Co. v. Saalfield, 198 F. 369, 373). And it is also in the sense that the law postulates that "The ownership or possession of a trade-mark, . . . shall be recognized and protected in the same manner and to the same extent, as are other property rights known to the law," thereby giving to any person entitled to the exclusive use of such trade-mark the right to recover damages in a civil action from any person who may have sold goods of similar kind bearing such trade-mark (Sections 2-A and 23, Republic Act No. 166, as amended).

The term 'SELECTA' may be placed at par with the words "Ang Tibay" which this Court has considered not merely as a descriptive term within the meaning of the Trade-mark Law but as a fanciful or coined phrase, or a trade-mark. In that case, this Court found that respondent has constantly used the term "Ang Tibay" , both as a trade-mark and a trade-name, in the manufacture and sale of slippers, shoes and indoor baseballs for twenty-two years before petitioner registered it as a trade-name for pants and shirts so that it has performed during that period the function of a trade-mark to point distinctively, or by its own meaning or by association, to the origin or ownership of the wares to which it applies. And holding that respondent was entitled to protection in the use of that trade-mark, this Court made the following comment:

The function of a trade-mark is to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied. 'Ang Tibay' as used by the respondent to designate his wares, had exactly performed that function for twenty-two years before the petitioner adopted it as a trade-mark in her own business. 'Ang Tibay' shoes and slippers are, by association, known throughout the Philippines as products of the 'Ang Tibay" factory owned and operated by the respondent. Even if 'AngTibay', therefore, were not capable of exclusive appropriation as a trade-mark, the application of the doctrine of secondary meaning could nevertheless be fully sustained because, in any event, by respondent's long and exclusive appropriation with reference to an article on the

market, because geographically or otherwise descriptive, might nevertheless have been used so long and exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that article was his product." (Ang v. Teodoro, supra.).

The rationale in the Ang Tibay case applies on all fours to the case of petitioner.

But respondent claims that it adopted the trade-mark 'SELECTA' in good faith and not precisely to engage in unfair competition with petitioner. It tried to establish that respondent was organized as a corporation under the name of Selecta Biscuit Company, Inc. on March 2, 1955 and started operations as a biscuit factory on June 20, 1955; that the name 'SELECTA' was chosen by the organizers of respondent who are Chinese citizens as a translation of the Chinese word "Ching Suan" which means "mapili" in Tagalog, and "Selected" in English; that , thereupon, it registered its articles of incorporation with the Securities and Exchange Commission and the name 'SELECTA' as a business name with the Bureau of Commerce which issued to it Certificate of Registration No. 55594; and that it also registered the same trade-name with the Bureau of Internal Revenue and took steps to obtain a patent from the Patent Office by filing with it as application for the registration of said trade-name.

The suggestion that the name 'SELECTA' was chosen by the organizers of respondent merely as a translation from a Chinese word "Ching Suan" meaning "mapili" in the dialect is betrayed by the very manner of its selection, for if the only purpose is to make an English translation of that word and not to compete with the business of petitioner, why chose the word 'SELECTA', a Spanish word, and not "Selected", the English equivalent thereof, as was done by other well-known enterprises? In the words of petitioner's counsel, "Why with all the words in the English dictionary and all the words in the Spanish dictionary and all the phrases that could be coined, should defendant-appellant (respondent) choose 'SELECTA' if its purpose was not and is not to fool the people and to damage plaintiff-appellee?" In this respect, we find appropriate the following comment of the trial court:

Eventually, like the plaintiff, one is tempted to ask as to why with the richness in words of the English language and with the affluence of the Spanish vocabulary or, for that matter, of our own dialects, should the defendant choose the controverted word "Selecta", which has already acquired a secondary meaning by virtue of plaintiff's prior and continued use of the same as a trade-mark or trade-name of its products? The explanation given by Sy Hap, manager of the defendant, that the word 'Selecta' was chosen for its bakery products by the organizers of said company from the Chinese word 'Ching Suan' meaning 'mapili', which in English translation , is to say the least, very weak and untenable. Sy Hap himself admitted that he had known Eulalio Arce, the person managing plaintiff's business, since 1954; that since he began to reside at 10th Avenue, Grace Park, he had known the Selecta Restaurant on Azcarraga Street and Dewey Blvd. and that he even had occasion to eat in one of the restaurants of the plaintiff. All of these circumstances tend to conspire in inducing one to doubt defendant's motive for using the same word "Selecta" for its bakery products. To allow the defendant here to use the word "Selecta" in spite of the fact that this word has already been adopted and exploited by Ramon Arce and by his family thru the organization of Arce Sons and Company, for the maintenance of its goodwill, for which said plaintiff and its

predecessor have spent time, effort and fortune, is to permit business pirates and buccaneers to appropriate for themselves and to their profit and advantage the trade names and trade marks of well established merchants with all their attendant good will and commercial benefit. Certainly, this cannot be allowed, and it becomes the duty of the court to protect the legitimate owners of said trade-names and trade-marks, for under the law, the same constitute one kind of property right entitled to the necessary legal protection.

Other points raised by respondent to show that the trial court erred in holding that the adoption by it of the word 'SELECTA' is tantamount to unfair competition are: (1) that its products are biscuits, crackers, and cookies, wrapped in cellophane packages, place in tin containers, and that its products may last a year with out spoilage, while the ice cream, milk, cakes and other bakery products which petitioner manufactures last only for two or three days; (2) that the sale and distribution of petitioner's products are on retail basis, limited to the City of Manila and suburbs, and its place of business is localized at Azcarraga, corner of Lepanto Street and at Dewey Blvd., Manila, while that of respondent is on a wholesale basis, extending throughout the length and breadth of the Philippines; (3) that petitioner's signboard on its place of business reads 'SELECTA' and on its delivery trucks "Selecta, Quality Always, Restaurant and Caterer, Azcarraga, Dewey Blvd., Balintawak and Telephone number," in contrast with respondent's signboard on its factory which reads "Selecta Biscuit Company, Inc.," and on its delivery trucks "Selecta Biscuit Company, Inc., Tuason Avenue, Malabon, Rizal, Telephone No. 2-13-27; (4) that the business name of petitioner is different from the business name of respondent; (5) that petitioner has only a capital investment of P25,000.00 whereas respondent has a fully paid-up stock in the amount of P234,000.00 out of the P500,000.00 authorized capital, (6) that the use of the name 'SELECTA' by respondent cannot lead to confusion in the business operation of the parties.

We have read carefully the reasons advanced in support of the points raised by counsel in an effort to make inroads into the findings of the court a quo on unfair competition, but we believe them to be substantial and untenable. They appear to be well answered and refuted by counsel for petitioner in his brief, which refutation we do not need to repeat here. Suffice it to state that we agree with the authorities and reasons advanced therein which incidentally constitute the best support of the decision of the court a quo.

With regard to the claim that petitioner failed to present sufficient evidence on the contract of lease of the business from its predecessor-in-interest, we find that under the circumstances secondary evidence is admissible.

In view of the foregoing, we hold that the Director of Patents committed an error in dismissing the opposition of petitioner and in holding that the registration of the trade-mark 'SELECTA' in favor of respondent will not cause damage to petitioner, and consequently, we hereby reverse his decision.

Consistently with this finding, we hereby affirm the decision of the court a quo rendered in G.R. No. L-17981. No costs.

Paras, C.J., Bengzon, Labrador, Reyes, J.B.L. Barrera, Gutierrez David, Paredes and Dizon., JJ., concur.Padilla, and Concepcion, JJ., took no part.

G.R. No. L-17501 April 27, 1963

MEAD JOHNSON and COMPANY, petitioner, vs.N. V. J. VAN DORP, LTD., ET AL., respondents.

Ross Selph and Carrascoso for petitioner.Manuel Y. Macias for respondent N. V. J. Van Dorp. Ltd.Office of the Solicitor General for respondent Director of the Patent Office.

BAUTISTA ANGELO, J.:

On June 2, 1956, N. V. J. Van Dorp, Ltd. a corporation organized under the laws of Netherlands, located and doing business at Gouda, Netherlands, filed an application for the registration of the trademark "ALASKA and pictorial representation of a Boy's Head within a rectangular design (ALASKA disclaimed)." The trademark was published in an issue of the Official Gazette which was officially released on June 5, 1956.

Mead Johnson & Company, a corporation organized under the laws of Indiana, U.S.A., being the owner of the trademark "ALACTA" used for powdered half-skim milk, which was registered with the Patent Office on June 12, 1951, filed an opposition on the ground that it will be damaged by the said registration as the trademark "ALASKA" and pictorial representation of a Boy's Head within a rectangular design (ALASKA disclaimed), used for milk, milk products, dairy products and infant's foods, is confusingly similar to its trademark "ALACTA".

In answer to the opposition the applicant alleged that its trademark and product "ALASKA" are entirely different from oppositor's trademark and product "ALACTA", since applicant's product covers milk, milk products, dairy products and infant's foods which fall under Class 47 Foods and Ingredients of Foods, while oppositor's products cover pharmaceutical preparations for nutritional needs which fall under Class 6, which refers to Medicines and Pharmaceutical Preparations.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët

After issues were joined, and after due hearing, the Director of the Patent Office, on August 26, 1960, rendered decision dismissing the opposition and holding that the trademark sought to be registered does not sufficiently resemble oppositor's mark "as to be likely when applied

to the goods of the parties to cause confusion or mistake or to deceive purchasers" even if oppositor's goods, half-skim powdered and powdered whole milk and those of applicant's condensed and evaporated milk are similar as they have the same descriptive properties, both goods being milk products.

Hence, oppositor filed the present petition for review.

Petitioner contends that the Director of the Patent Office erred (1) in holding that the mark which respondent seeks to register does not resemble petitioner's mark as to be likely when applied to the goods to cause confusion or mistake or to deceive purchasers, and (2) in holding that the trademark sought to be registered has become distinctive based on its extensive sales.

Anent the first point, petitioner seems to dispute the finding of the Director of the Patent Office by emphasizing the striking similarities existing between the trademark "ALASKA" which is sought to be registered and that of "ALACTA" which petitioner has long registered for the protection of its products. Thus, it is argued, in appearance and sound the trademarks "ALASKA" and "ALACTA" are sufficiently close. The three vowels are the same in both and the public would pronounce them short accenting on the second syllable. Both marks have the same number of letters and the vowels are placed on the same position. The general form and sound of the words are of marked similarity so as to suggest the likelihood of confusion. While "ALACTA" and "ALASKA" differ entirely in meaning, they are confusingly similar in appearance. The three letter prefixes of both marks are identical. Both marks end with the same letter "A". The only difference lies in the letters "CT" in "ALACTA" and "SK" in "ALASKA". And in support of its contention, petitioner cites the case of Esso Standard Oil Company v. Sun Oil Company, et al., 46 TMR 444, wherein it was held that SUNVIS and UNIVIS are quite different in sound and meaning but in their entireties they are confusingly similar in appearance. Said the Court:

As already noted, it found on the basis of the evidence before it that the two marks are quite different in sound and meaning but that in their entireties the marks are confusingly similar in appearance, because of their having identical suffixes and three letter prefixes with the same two letters UN in the same order.

On the other hand, respondent contends that it is not correct to say that in passing on the question as to whether the two marks are similar only the words "ALASKA" and "ALACTA" should be taken into account since this would be a most arbitrary way of ascertaining whether similarity exists between two marks. Rather, respondent contends, the two marks in their entirety and the goods they cover should be considered and carefully compared to determine whether petitioner's opposition to the registration is capricious or well-taken. In this connection, respondent invokes the following rules of interpretation: (1) appellant's mark is to be compared with all of the oppositor's marks in determining the point of confusion;1 (2) the likelihood of confusion may be determined by a comparison of the marks involved and a consideration of the goods to which they are attached;2 and (3) the court will view the marks with respect to the goods to which they are applied, and from its own observation arrive at a conclusion as to the likelihood of confusion.3

It is true that between petitioner's trademark "ALACTA" and respondent's "ALASKA" there are similarities in spelling, appearance and sound for both are composed of six letters of three syllables each and each syllable has the same vowel, but in determining if they are confusingly similar a comparison of said words is not the only determinant factor. The trademarks in their entirety as they appear in the respective labels must also be considered in relation to the goods to which they are attached. The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to the other. Having this view in mind, we believe that while there are similarities in the two marks there are also differences or dissimilarities which are glaring and striking to the eye as the former. Thus we find the following dissimilarities in the two marks:

(a) The sizes of the containers of the goods of petitioner differ from those of respondent. The goods of petitioner come in one-pound container while those of respondent come in three sizes, to wit: 14-ounce tin of full condensed full cream milk; 14-1/2-ounce tin of evaporated milk; and 6-ounce tin of evaporated milk.

(b) The colors too differ. One of petitioner's containers has one single background color, to wit: light blue; the other has two background colors, pink and white. The containers of respondent's goods have two color bands, yellowish white and red.

(c) Petitioner's mark "ALACTA" has only the first letter capitalized and is written in black. Respondent's mark "ALASKA" has all the letters capitalized written in white except that of the condensed full cream milk which is in red.

Again, coming to the goods covered by the trademarks in question, we also notice the following dissimilarities:

In the petitioner's certificate of registration, it appears that the same covers "Pharmaceutical Preparations which Supply Nutritional Needs" which fall under Class 6 of the official classification as Medicines and Pharmaceutical Preparations", thus indicating that petitioner's products are not foods or ingredients of foods but rather medicinal and pharmaceutical preparations that are to be used as prescribed by physicians. On the other hand, respondent's goods cover "milk, milk products, dairy products and infant's foods" as set forth in its application for registration which fall under an entirely different class, or under Class 47 which refers to "Foods and Ingredients of Foods", and for use of these products there is no need or requirement of a medical prescription.

In view of the above dissimilarities, the Director of the Patent Office overruled petitioner's opposition in the following wise:.

Considering the substantial difference in the marks as displayed on the respective labels of the parties and considering the distinctiveness of the mark of applicant, acquired from its extensive sales, it is concluded that the applicant's mark does not resemble opposer's mark as to be likely when applied to the goods of the parties to cause confusion or mistake or to deceive purchasers.

We have examined the two trademarks as they appear in the labels attached to the containers which both petitioner and respondent display for distribution and sale and we are impressed more by the dissimilarities than by the similarities appearing therein in the same manner as the Director of the Patent Office, and because of this impression we are persuaded that said Director was justified in overruling petitioner's opposition. Hence, we are not prepared to say that said Director has erred in overruling said opposition.

WHEREFORE, the decision appealed from is affirmed, with costs against petitioner.

Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, and Makalintal JJ., concur.

G.R. No. L-18289 March 31, 1964

ANDRES ROMERO, petitioner, vs.MAIDEN FORM BRASSIERE CO., INC., and THE DIRECTOR OF PATENTS, respondents.

Alafriz Law Office for petitioner.Ross, Selph & Carrascoso for respondent Maiden Form Brassiere Co., Inc.Office of the Solicitor General and Tiburcio S. Evalle for respondent Director of Patents.

BARRERA, J.:

From the decision of the Director of Patents (of January 17, 1961) dismissing his petition for cancellation of the registration of the trademark "Adagio" for brassieres manufactured by respondent Maiden Form Brassiere Co., Inc., petitioner Andres Romero, interposed this appeal.

On February 12, 1957, respondent company, a foreign corporation, filed with respondent Director of Patents an application for registration (pursuant to Republic Act No. 166) of the trademark "Adagio" for the brassieres manufactured by it. In its application, respondent company alleged that said trademark was first used by it in the United States on October 26, 1937, and in the Philippines on August 31, 1946; that it had been continuously used by it in trade in, or with the Philippines for over 10 years; that said trademark "is on the date of this application, actually used by respondent company on the following goods, classified according to the official classification of goods (Rule 82) - Brassieres, Class 40"; and that said trademark is applied or affixed by respondent to the goods by placing thereon a woven label on which the trademark is shown.

Acting on said application, respondent Director, on August 13, 1957, approved for publication in the Official Gazette said trademark of respondent company, in accordance with Section 7 of Republic Act No. 166 (Trademark Law), having found, inter alia, that said trademark is "a fanciful and arbitrary use of a foreign word adopted by applicant as a trademark for its product; that it is neither a surname nor a geographical term, nor any that comes within the purview of Section 4 of Republic Act No. 166; and that the mark as used by respondent

company convincingly shows that it identifies and distinguishes respondent company's goods from others."

On October 17, 1957, respondent Director issued to respondent company a certificate of registration of with, trademark "Adagio".

On February 26, 1958, petitioner filed with respondent Director a petition for cancellation of said trademark, on the grounds that it is a common descriptive name of an article or substance on which the patent has expired; that its registration was obtained fraudulently or contrary to the provisions of Section 4, Chapter II of Republic Act No. 166; and that the application for its registration was not filed in accordance with the provisions of Section 37, Chapter XI of the same Act. Petitioner also alleged that said trademark has not become distinctive of respondent company's goods or business; that it has been used by respondent company to classify the goods (the brassieres) manufactured by it, in the same manner as petitioner uses the same; that said trademark has been used by petitioner for almost 6 years; that it has become a common descriptive name; and that it is not registered in accordance with the requirements of Section 37(a), Chapter XI of Republic Act No. 166.

Issues having been joined, the case was heard and, after hearing, respondent Director (on January 17, 1961) rendered the decision above adverted to.

Petitioner filed a motion for reconsideration of said decision, on the grounds that (1) it is contrary to the evidence, and (2) it is contrary to law. Said motion was denied by respondent Director by resolution of March 7, 1961.

Hence, this appeal.

Appellant claims that the trademark "Adagio" has become a common descriptive name of a particular style of brassiere and is, therefore, unregistrable. It is urged that said trademark had been used by local brassiere manufacturers since 1948, without objection on the part of respondent company.

This claim is without basis in fact. The evidence shows that the trademark "Adagio" is a musical term, which means slowly or in an easy manner, and was used as a trademark by the owners thereof (the Rosenthals of Maiden Form Co., New York) because they are musically inclined. Being a musical term, it is used in an arbitrary (fanciful) sense as a trademark for brassieres manufactured by respondent company. It also appears that respondent company has, likewise, adopted other musical terms such as "Etude" (Exh. W-2), "Chansonette" (Exh. W-3), "Prelude" (Exh. W-4), "Over-ture" (Exh. W-6), and "Concerto" (Exh. V), to identify, as a trademark, the different styles or types of its brassieres. As respondent Director pointed out, "the fact that said mark is used also to designate a particular style of brassiere, does not affect its registrability as a trademark" (Kiekhaefer Corp. v. Willys-Overland Motors, Inc., 111 USPQ 105).1äwphï1.ñët

It is not true that respondent company did not object to the use of said trademark by petitioner and other local brassiere manufacturers. The records show that respondent

company's agent, Mr. Schwartz, warned the Valleson Department Store to desist from the sale of the "Adagio" Royal Form brassieres manufactured by petitioner (t.s.n., pp. 27-28, Oct. 7, 1958), and even placed an advertisement (Exhs. 3 & 4) in the local newspapers (Manila Daily Bulletin, Manila Times, Fookien Times, and others) warning the public against unlawful use of said trademark (t.s.n., p. 15, Aug. 17, 1959). The advertisement (Exh. U) in the Manila Times made by respondent company on February 9, 1958, was brought to petitioner's attention (t.s.n., p. 24, Oct. 7, 1958), which must have prompted him to file this present petition for cancellation, on February 26, 1958.

On the other hand, respondent company's long and continuous use of the trademark "Adagio" has not rendered it merely descriptive of the product. In Winthrop Chemical Co. v. Blackman (268 NYS 653), it was held that widespread dissemination does not justify the defendants in the use of the trademark.

Veronal has been widely sold in this country by the plaintiff; over 5,250,000 packages have been sold since 1919. This is a consequence of the long and continued use by the plaintiff of this trademark and is the result of its efforts to inform the profession and the public of its product. This widespread dissemination does not justify the defendants in the use of this trademark. If this argument were sound, then every time a plaintiff obtained the result of having the public purchase its article, that fact of itself would destroy a trademark. Arbitrary trademarks cannot become generic in this way. Jacobs v. Beecham, 221 U.S. 263, 31 S. Ct. 555, 55 L. Ed. 729; Coca-Cola Co. v. Koke Co. of American, 254 U.S. 143, 41 S. Ct. 113, 65 L. Ed. 189. (emphasis supplied.)

Appellant next contends that the trademark "Adagio at the time it was registered (in the Philippines) on October 17, 1957, had long been used by respondent company, only "to designate a particular style or quality of brassiere and, therefore, is unregistrable as a trademark. In support of the contention, he alleges that the sentence "Maidenform bras are packaged for your quick shopping convenience. For other popular Maidenform styles writ for free style booklet to: Maiden Form Brassiere Co., Inc 200 Madison Avenue, New York 16, N.Y." printed on the package (Exh. W), shows that the trademark "Adagio" is used to designate a particular style or quality of brassiere. He also cites portions of the testimonies of his witnesses Bautista and Barro, to the effect that said trademark refers to the style of brassieres sold in the stores of which they are salesmen.

This contention is untenable. Said sentence appearing on the package (Exh. W), standing alone, does not conclusively indicate that the trademark "Adagio" is merely a style of brassiere. The testimony of Mr. Schwartz, witness of respondent company, belies petitioner's claim:

Q. There is a statement at the bottom of Exhibit W which reads, 'There is a Maidenform for every type of figure'. As you stated you are very familiar with these bras manufacture by Maidenform Brassiere Company, what are these types of figures this Exhibit W refer to?

A. This is a product sold primarily in the United States they have cold climate there, and a style to suit the climate and we have different here. This kind of bra very seldom comes here. This type is very expensive and sold primarily in the United States. We do not sell it here; it is very expensive an import restrictions do not allow our dollar allocations for such sort.

As to the testimonies of Bautista and Barro, they are me conclusions of said witnesses. Note that when Bautista was asked why he considered the trademark "Adagio" as a style, he replied that the brand "Adagio" is attached distinguish the style. He stated as follows:

Q. You said that those bras mentioned by you such as Adagio, Prelude, Alloette, are styles, will you please tell us the reason why you said that those are styles?

A. You know his brand like Adagio, Alloette are just attached to the bras just to distinguish the style: It is not the main brand.

Barro, on the other hand, said that "Adagio" is a mark. She declared as follows:

Q. You state that you used to sell brassieres in the store in which you work; when customers come to your store and ask for brassieres, what do they usually ask from you?

A. Well, I tell you there are so many types and certain types of people ask for certain brassiere. There are people who ask for Royal Form Adagio and there are others who ask for Duchess Ideal Form, and so many kinds of marks.

Brassieres are usually of different types or styles, and appellee has used different trademarks for every type as shown by its labels, Exhibits W-2 (Etude), W-3 (Chansonette), W-4 (Prelude), W-5 (Maidenette), and W-6, (Overture). The mere fact that appellee uses "Adagio" for one type or style, does not affect the validity of such word as a trademark. In. the case of Kiekhaefer Corp. v. Willys-Overland Motors, 111 USPQ 105, it was held that the fact that the word "Hurricane" was used to designate only one model of automobile, did not affect the validity of that word as a trademark. In Minnesota Mining Co. V. Motloid Co., 74 USPQ 235, the applicant sought to register the letters "MM" in diagonal relationship within a circle. Applicant admitted that this mark was used only for its medium price and medium quality denture-base materials. The Assistant Commissioner of Patents held:

It clearly appears, however, that the mark serves to indicate origin of applicant's goods; and the fact that it is used on only one of several types or grades does not affect its registrability as a trade mark.

Appellant also claims that respondent Director erred in registering the trademark in question, despite appellee's non-compliance with Section 37, paragraphs 1 and 4 (a) of Republic Act No. 166.

This contention flows from a misconception of the application for registration of trademark of respondent. As we see it, respondent's application was filed under the provisions of Section 2 of Republic Act No. 166 as amended by Section 1 of Republic Act 865 which reads as follows:

"SEC. 2. What are registrable — Trademarks, ... own by persons, corporations, partnerships or associations domiciled ... in any foreign country may be registered in accordance with the provisions of this Act: Provided, That said trademarks, trade-names, or service marks are actually in use in commerce and services not less than two months in the Philippines before the time the applications for registration are filed: ..."

Section 37 of Republic Act No. 166 can be availed of only where the Philippines is a party to an international convention or treaty relating to trademarks, in which the trade-mark sought to be registered need not be use in the Philippines. The applicability of Section 37 has been commented on by the Director of Patents, in this wise:

Trademark rights in the Philippines, without actual use the trademark in this country can, of course, be created artificially by means of a treaty or convention with another country or countries. Section 37 of the present Philippine Trademark Law, Republic Act No. 166 (incorporated as Rule 82 in the Rules of Practice for Registration of Trademarks) envisions the eventual entrance of the Philippines into such convention treaty. It is provided in said section that applications filed thereunder need not allege use in the Philippines of the trade mark sought to be registered. The Philippines has, however not yet entered into any such treaty or convention and, until she does, actual use in the Philippines of the trademark sought to be registered and allegation in the application of such fact, will be required in all applications for original or renewal registration submitted to the Philippine Patent Office. (Circular Release No. 8.)

Appellant, likewise, contends that the registration the trademark in question was fraudulent or contrary Section 4 of Republic Act No. 166. There is no evidence to show that the registration of the trademark "Adagio" was obtained fraudulently by appellee. The evidence record shows, on the other hand, that the trademark "Adagio" was first exclusively in the Philippines by a appellee in the year 1932. There being no evidence of use of the mark by others before 1932, or that appellee abandoned use thereof, the registration of the mark was made in accordance with the Trademark Law. Granting that appellant used the mark when appellee stopped using it during the period of time that the Government imposed restrictions on importation of respondent's brassiere bearing the trademark, such temporary non-use did not affect the rights of appellee because it was occasioned by government restrictions and was not permanent, intentional, and voluntary.

To work an abandonment, the disuse must be permanent and not ephemeral; it must be intentional and voluntary, and not involuntary or even compulsory. There must be a thorough-going discontinuance of any trade-mark use of the mark in question (Callman, Unfair Competition and Trademark, 2nd Ed., p. 1341).

The use of the trademark by other manufacturers did not indicate an intention on the part of appellee to abandon it.

"The instances of the use by others of the term 'Budweiser, cited by the defendant, fail, even when liberally construed, to indicate an intention upon the part of the complainant to abandon its rights to that name. 'To establish the defense of abandonment, it is necessary to show not only acts indicating a practical abandonment, but an actual intention to abandon. Saxlehner v. Eisener & Mendelson Co., 179 U.S. 19, 21 S. Ct. 7 (45 L. Ed. 60). (Anheuser-Busch, Inc. v. Budweiser Malt Products Corp., 287 F. 245.)

Appellant next argues that respondent Director erred in declaring illegal the appropriation in the Philippines of the trademark in question by appellant and, therefore, said appropriation did not affect appellee's right thereto and the subsequent registration thereof. Appellant urges that its appropriation of the trademark in question cannot be considered illegal under Philippine laws, because of non-compliance by appellee of Section 37 of Republic Act No. 166. But we have already shown that Section 37 is not the provision invoked by respondent because the Philippines is not as yet a party to any international convention or treaty relating to trademarks. The case of United Drug Co. v. Rectanus, 248 U.S. 90, 39 S. Ct. 48, 63 L. Ed. 141, cited by appellant, is not applicable to the present case, as the records show that appellee was the first user of the trademark in the Philippines, whereas appellant was the later user. Granting that appellant used the trade-mark at the time appellee stopped using it due to government restrictions on certain importations, such fact did not, as heretofore stated, constitute abandonment of the trademark as to entitle anyone to its free use.

Non-use because of legal restrictions is not evidence of an intent to abandon. Non-use of their ancient trade-mark and the adoption of new marks by the Carthusian Monks after they had been compelled to leave France was consistent with an intention to retain their right to use their old mark. Abandonment will not be inferred from a disuse over a period of years occasioned by statutory restrictions on the name of liquor. (Nims Unfair Competition and Trade-Mark p. 1269.)

IN VIEW OF ALL THE FOREGOING, we are of the opinion and so hold, that respondent Director of Patents did not err in dismissing the present petition for cancellation of the registered trademark of appellee company, and the decision appealed from is therefore hereby affirmed, with costs against the appellant. So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Paredes, Dizon, Regala and Makalintal, JJ., concur.Concepcion, J., took no part.