Case Summary (G.R. No. 93262)
Procedural History (concise chronology)
- Petitioner’s registration SR No. 5054 (supplemental register) for “STYLISTIC MR. LEE” was issued and published on October 27, 1980.
- H.D. Lee Co., Inc. filed a petition for cancellation on September 18, 1981 (Inter Partes Case No. 1558).
- Petitioner published its application for registration in the principal register on February 20, 1984; H.D. Lee filed opposition on July 27, 1984 (Inter Partes Case No. 1860).
- The Director of Patents consolidated the two cases and, on July 19, 1988, granted cancellation and opposition, finding confusing similarity under the dominancy test.
- BPTTT issued a stay subject to limited resale and a prohibition on further production (September 23, 1988).
- Court of Appeals affirmed the Director of Patents on November 29, 1990. Motion for reconsideration was denied on May 17, 1991. Petitioner elevated the case to the Supreme Court.
Applicable Law and Legal Basis
Governing statute: Republic Act No. 166 (Trademark Law), including provisions cited and applied in the decision (Secs. 2, 2-A, 4(e), 9-A, 19-A, 20, 21-A, 22). International instrument cited: the Paris Convention for the Protection of Industrial Property. Constitutional basis: the 1987 Philippine Constitution applies (decision date is after 1990), and municipal trademark law provisions and incorporated treaty principles were treated within that legal framework by the tribunal.
Issues Presented to the Supreme Court
- Whether petitioner’s “STYLISTIC MR. LEE” is confusingly similar to private respondent’s earlier “LEE” trademarks (including “LEE RIDERS,” “LEESURES,” “LEE-LEENS”), such that infringement exists.
- Whether private respondent’s delay in filing cancellation/opposition bars relief by estoppel or laches.
- Whether private respondent proved prior actual commercial use of its “LEE” mark in the Philippines prior to petitioner’s use/registration, as required under R.A. No. 166.
Parties’ Principal Contentions
- Petitioner: Its mark is distinct in whole (“STYLISTIC MR. LEE”), it is the prior user (since May 1, 1975), its supplemental-registration certificate is valid, and equitable defenses (laches, estoppel, unclean hands) bar private respondent’s challenge.
- Private respondent: It is the prior registrant and user of the “LEE” mark in the Philippines; petitioner’s mark is confusingly similar because the dominant and attention-drawing element is “LEE”; it relied on statutory protection and Paris Convention principles.
Director of Patents and Court of Appeals Findings (domincancy approach)
The Director of Patents and, subsequently, the Court of Appeals applied the dominancy test: where the dominant or essential feature of one mark appears in another, likelihood of confusion may be found even without literal duplication. They found “LEE” to be the dominant, conspicuous element on petitioner’s label (large, bold letters) and concluded ordinary purchasers would be guided by that dominant element and likely conclude common origin. The CA emphasized that the relevant inquiry is likelihood of confusion, judged by the dominant features and the ordinary purchaser’s reaction, not requiring proof of actual confusion.
Supreme Court’s approach to laches and the supplemental register
The Court rejected petitioner’s laches/estoppel argument. It emphasized the nature and function of the supplemental register under Sec. 19-A R.A. No. 166: supplemental-register registrations are published on registration (Official Gazette), and cancellation may be sought anytime by a person who believes he will be damaged by registration. Because petitioner’s supplemental registration was published and issued on October 27, 1980, the Court treated that publication/issuance—not petitioner’s asserted first use in 1975—as the point when private respondent was officially on notice. H.D. Lee’s cancellation filed on September 18, 1981 and opposition filed five months after publication of petitioner’s principal-register application (published February 20, 1984; opposition July 27, 1984) were held not to constitute inexcusable delay sufficient to establish laches.
Supreme Court’s analysis on confusing similarity: holistic test and contextual factors
The Supreme Court rejected the dominancy-only conclusion and instead analyzed the marks holistically, considering the entirety of petitioner’s mark (“STYLISTIC MR. LEE”), the nature and price of the goods (jeans and other garments), and the profile of the ordinary purchaser. The Court articulated that:
- Trademark similarity must be assessed on a case-by-case basis; both dominancy and holistic tests have jurisprudential support.
- The holistic approach requires consideration of the marks in their overall presentation (words, design, relative prominence, labels, hang tags) and the particular market circumstances.
- Because jeans are relatively higher-priced, brand-conscious purchases in which buyers exercise more care, the average buyer is an “ordinarily intelligent buyer” familiar with brands and less likely to be deceived by superficial resemblance.
- Petitioner’s mark, taken as a whole, contains dissimilarities that are “conspicuous, noticeable and substantial enough” to reduce the likelihood of confusion; petitioner’s label as an entire unit is distinct from private respondent’s standard “LEE” variations.
Surname issue and registrability under Sec. 4(e)
The Court noted that “LEE” is primarily a surname and that, under Sec. 4(e) R.A. No. 166, a personal name or surname is not monopolizable as a trademark against others bearing the same name—absent contract, fraud, or estoppel. Thus private respondent could not claim absolute exclusivity over the surname “LEE” merely by registration. This doctrine weighed against finding an exclusive appropriation of the term irrespective of other evidence.
Actual use requirement and the evidentiary weight of registrations
The Court stressed that registration, especially in the supplemental register, is only prima facie evidence of ownership when in the princ
Case Syllabus (G.R. No. 93262)
Caption and Procedural Posture
- Supreme Court decision reported at 321 Phil. 1001, First Division, G.R. No. 100098, December 29, 1995.
- Petition for review on certiorari under Rule 45 filed by Emerald Garment Manufacturing Corporation (petitioner) seeking annulment of:
- Court of Appeals decision dated 29 November 1990 in CA-G.R. SP No. 15266, which affirmed the Director of Patents’ decision finding petitioner’s trademark confusingly similar to private respondent’s mark; and
- Court of Appeals resolution dated 17 May 1991 denying petitioner’s motion for reconsideration.
- Respondents: Hon. Court of Appeals, Bureau of Patents, Trademarks & Technology Transfer (BPTTT), and H.D. Lee Co., Inc. (private respondent).
Antecedent Facts
- 27 October 1980: Certificate of Registration No. SR 5054 (Supplemental Register) for the trademark “STYLISTIC MR. LEE” issued in the name of petitioner Emerald Garment Manufacturing Corporation for goods in Class 25 (skirts, jeans, blouses, socks, briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie).
- 18 September 1981: Private respondent H.D. Lee Co., Inc. filed with the BPTTT a Petition for Cancellation of Registration No. SR 5054; docketed as Inter Partes Case No. 1558.
- Private respondent’s plea: invoking Sec. 37 of R.A. No. 166 and Art. VIII of the Paris Convention, averred that petitioner’s trademark closely resembled its own previously registered and used “LEE” trademark, likely to cause confusion, mistake and deception among purchasers.
- 23 March 1982: Petitioner filed an answer denying confusing similarity and asserting the registration was legally and validly granted.
- 20 February 1984: Petitioner published its application for registration of “STYLISTIC MR. LEE” in the Principal Register.
- 27 July 1984: Private respondent filed a notice of opposition to petitioner’s Principal Register application; docketed as Inter Partes Case No. 1860.
- 21 June 1985: Director of Patents consolidated Inter Partes Cases Nos. 1558 and 1860, citing a common question of law.
Administrative Determination by Director of Patents (19 July 1988)
- Director of Patents rendered a decision granting private respondent’s petition for cancellation and opposition to registration.
- Findings by Director:
- Private respondent was the prior registrant of the trademark “LEE” in the Philippines and had been using the mark in the Philippines.
- Applying the test of dominancy, the Director concluded petitioner’s trademark was confusingly similar to private respondent’s mark, because the word “Lee” is the dominant element that draws the buyer’s attention and leads him to conclude common origin.
- Petitioner appealed the Director’s decision to the Court of Appeals on 3 August 1988.
BPTTT Interim Relief (Resolution No. 88-33, 23 September 1988)
- BPTTT granted petitioner’s Motion to Stay Execution of the Director’s 19 July 1988 decision subject to conditions:
- Respondent-Registrant (petitioner) authorized only to dispose of current stock bearing “STYLISTIC MR. LEE”;
- Strict prohibition on further production of the mark (regardless of mode and source) beyond current stock;
- Relief order to cease automatically upon resolution of the appeal by the Court of Appeals; if appeal lost, goods bearing the mark to be removed from market or seized in accordance with law.
Court of Appeals Decision (29 November 1990)
- Court of Appeals affirmed the Director of Patents’ decision in all respects.
- CA reasoning (summary of key points and quoted reasoning):
- Whether a trademark causes confusion is a question of fact resolved by applying the “test of dominancy”: if the competing trademark contains the main, essential or dominant features of another, confusion likely results; duplication or literal imitation is unnecessary.
- The word “LEE” is the most prominent and distinctive feature of petitioner’s label and all of private respondent’s “LEE” trademarks; it draws buyer attention and leads to the belief of common manufacturer.
- The word “STYLISTIC,” printed in small letters above “LEE,” is not conspicuous enough to offset dominance of “LEE”; differences are too insubstantial to be noticeable to ordinary buyers.
- Even if “STYLISTIC” were conspicuous, goods could be mistaken as a variation under private respondent’s “LEE” lines (e.g., LEE RIDERS, LEESURES, LEE LEENS).
- Both parties operate in the same line of business, increasing likelihood of confusion.
- Determinative inquiry is likelihood of confusion, not actual confusion.
Motion for Reconsideration at the Court of Appeals (19 December 1990; resolution 17 May 1991)
- Petitioner’s motion for reconsideration raised defenses allegedly not previously presented: laches/estoppel and claim that private respondent approximated petitioner’s style when registering its “LEE” mark.
- Private respondent opposed on grounds that those issues were not raised below and constituted a change of theory on appeal.
- CA resolution (17 May 1991) rejecting motion for reconsideration: articulated rule that issues not raised in trial court cannot be raised on appeal; change of theory on appeal is barred by estoppel; party must present all issues to lower court to allow fair opportunity for other party to meet them; petitioner offered no reason for not invoking defenses earlier.
Issues and Assignments of Error Presented to the Supreme Court
- Petitioner’s assignments of error (as presented):
- I. CA erred in not finding that private respondent caused issuance of a fourth “LEE” trademark imitating petitioner’s mark on May 5, 1989 (more than eight months after the Director’s decision).
- II. CA erred in ruling that defense of estoppel by laches must be raised before the BPTTT.
- III. CA erred when it considered private respondent’s prior registration and disregarded that private respondent failed to prove commercial use before filing application for registration.
- Petitioner’s reiterated issues (as raised in CA and repeated to the Supreme Court):
- Whether petitioner’s trademark “STYLISTIC MR. LEE” is confusingly similar with respondent’s “LEE” or variants (LEE RIDERS, LEE-LEENS, LEE-SURES).
- Whether petitioner’s evidence establishes prior use and distinctiveness.
- Whether petitioner’s registration is prima facie evidence of good faith.
- Whether “STYLISTIC MR. LEE” can be confused with respondent’s “LEE” trademark.
Petitioner’s Contentions
- Petitioner argued:
- Its mark “STYLISTIC MR. LEE” is entirely and unmistakably different from private respondent’s “LEE” marks.
- It has been using “STYLISTIC MR. LEE” since 1 May 1975; private respondent’s petition to cancel was filed only on 18 September 1981, constituting laches/estoppel.
- Its registration is legally and validly granted; registration in supplemental/principal register merits protection and evidentiary weight.
Private Respondent’s Contentions
- Private respondent argued:
- Petitioner was barred from raising new issues on appeal; the sole contention before the trademark tribunal was confusing similarity.
- Petitioner’s mark is confusingly similar because the dominant