G.R. No. L-46638 - Araneta vs. Court of Appeals

Petitioner Esso Standard Eastern, Inc., originally a foreign corporation licensed to do business in the Philippines, engaged in selling petroleum products under the registered trademark ESSO. The trademark ESSO was registered as a business name with the Bureaus of Commerce and Internal Revenue in 1962.
Private respondent, United Cigarette Corporation, a domestic corporation, manufactured and sold cigarettes. In November 1963, it acquired the business, factory, and patent rights of La Oriental Tobacco Corporation, including the right to use the trademark ESSO on cigarettes, with proper permits from the Bureau of Internal Revenue.

Soon after respondent began using the ESSO trademark on cigarettes, petitioner filed a complaint for trademark infringement in the Court of First Instance of Manila. Petitioner claimed exclusive rights to the ESSO trademark and alleged that respondent’s use of the same trademark on cigarettes was intended to deceive the public and damage its goodwill.
Respondent admitted using the trademark ESSO on its cigarettes but argued that its products were not identical nor in competition with petitioner’s petroleum products. It contended that infringement requires marks to be used on goods of the same kind or those in competition.
The trial court ruled in favor of petitioner, relying on precedents involving related products, and found trademark infringement.
On appeal, the Court of Appeals reversed the trial court, dismissing the complaint for lack of trademark infringement, holding that the goods were unrelated and non-competing. Petitioner’s motion for reconsideration was denied.
Petitioner brought the case to the Supreme Court via certiorari to reverse the Court of Appeals decision and reinstate the trial court ruling.

Petitioner’s goods under the ESSO mark included petroleum products such as gasoline, grease, solvents, kerosene, fuel, lubricating oil, fertilizers, and other related products.
Respondent’s goods bore the ESSO mark on cigarettes, an entirely different product category.

Petitioner’s products were distributed through gasoline service and lubrication stations, automotive shops, and hardware stores.
Respondent’s cigarettes were sold in sari-sari stores, grocery stores, small distributor outlets, and also via street peddling.

Whether or not there was trademark infringement by respondent in using the trademark ESSO on cigarettes, despite petitioner’s prior registration and use of the ESSO trademark on petroleum products.
Whether the use of identical trademarks on unrelated, non-competing goods can constitute trademark infringement and cause confusion or deception among the public.