G.R. No. L-14761 - Arce Sons and Co. vs. Selecta Biscuit Company

On August 31, 1955, Selecta Biscuit Company, Inc. (respondent) filed a petition with the Philippine Patent Office to register "SELECTA" as a trademark for bakery products, claiming prior use for not less than two months and exclusive right to the mark in the Philippines.
The Philippine Patent Office examiner initially found that the trademark resembled the "SELECTA" mark used by Arce Sons and Company (petitioner) on milk and ice cream products and recommended refusal to register due to likely confusion.
Upon reconsideration, the Patent Office ordered publication of the application for opposition purposes.

Continuous use of "SELECTA" on milk, ice cream, bakery and other products by petitioner and its predecessor Ramon Arce since 1933.
The mark "SELECTA" had become identified exclusively with petitioner’s business.
Petitioner had warned respondent against use, but respondent ignored it.
Respondent’s use constitutes unfair competition causing confusion.
The marks are strikingly similar, potentially causing deception of the public.
Petitioner had filed a separate suit for unfair competition in the Court of First Instance (CFI) of Manila.

On September 28, 1958, the CFI ruled in favor of petitioner, perpetually enjoining respondent from using "SELECTA" and awarding damages plus attorney’s fees and costs.
Respondent appealed to the Court of Appeals (CA), docketed as CA-G.R. No. 24017-R.
Issues and evidence in both cases were substantially identical; parties consented to submit the CFI evidence to the Patent Office.
On December 7, 1958, the Director of Patents dismissed petitioner’s opposition and allowed registration, finding no likelihood of confusion or injury to petitioner.

Ramon Arce began using "SELECTA" in 1933 for milk business in Novaliches, Rizal, selling fresh milk in bottles bearing "SELECTA FRESH MILK."
Expanded business with a store on Lepanto Street offering milk, ice cream, sandwiches, and later bakery products such as bread, cakes, cookies, packaged with the trademark "SELECTA."
Use of delivery trucks and containers prominently marking "SELECTA."
Business survived war interruptions; post-war expansion included more bakery and dairy products.
In 1950, Ramon Arce leased rights and transferred the business to his sons’ partnership, Arce Sons & Company, which continued under "SELECTA."
Operated establishments known as “Selecta Dewey Boulevard,” serviced customers widely inside and outside Manila including delivery trucks bearing the mark.

Selecta Biscuit Company, Inc. was incorporated March 2, 1955, began operations June 20, 1955 as a biscuit factory.
The word "SELECTA" was chosen by its Chinese citizen organizers as a translation of the Chinese word "Ching Suan" meaning “mapili” or “selected.”
Registered business name and corporate name with Bureau of Commerce and Internal Revenue, followed by filing application for trademark registration with the Philippine Patent Office.
Factory located in Malabon, Rizal, with building signboards and delivery trucks displaying "SELECTA BISCUIT COMPANY, INC."
Respondent claimed it was a wholesaler with products (biscuits, crackers, cookies) having longer shelf-life, sold nationwide to over 600 stores.
Advertising included radio broadcasts and visible signage nationwide.
Respondent asserted no complaint from petitioner until business growth prompted action.
Claimed differences in products, markets, business scale, capital, and sales area negate confusion.

CFI found petitioner’s prior use and goodwill in "SELECTA" as a trademark for dairy and bakery products, granting injunction and damages against respondent for unfair competition.
Director of Patents held that petitioner’s "SELECTA" was a trade-name indicating business location and respondent’s use was distinct in nature and territorial scope, so no confusion existed.
Core issue: whether respondent’s registration of "SELECTA" infringes on petitioner’s prior rights and causes unfair competition and confusion.

Whether the word "SELECTA" as used by petitioner constitutes a valid, protectable trademark that has acquired secondary meaning and goodwill.
Whether the respondent’s use and registration of the "SELECTA" trademark for bakery products constitutes trademark infringement and unfair competition against petitioner.
Whether the decision of the Director of Patents allowing registration of the trademark by respondent was erroneous.
Whether differences in product nature, business scale, and distribution channels prevent likelihood of confusion and damages to petitioner.