Case Summary (G.R. No. 259832)
Procedural History
Petitioner filed a trademark infringement complaint in the Court of First Instance of Manila seeking to enjoin respondent’s use of the ESSO trademark on cigarettes. The trial court ruled for petitioner and found infringement. On appeal the Court of Appeals reversed and dismissed the complaint. Petitioner sought relief by certiorari to the Supreme Court; the Supreme Court denied the petition and affirmed the Court of Appeals decision.
Issue Presented
Whether respondent’s use of the trademark ESSO on cigarettes constitutes trademark infringement of petitioner’s registered ESSO mark for petroleum and related products by causing a likelihood of confusion or deception as to the origin or source of the goods.
Applicable Law and Legal Standard
The Court applied the statutory definition of infringement (quoted in the decision) which describes infringement as the unauthorized use of a reproduction, counterfeit, copy or colorable imitation of a registered mark in connection with the sale, offering for sale, or advertising of goods or services in a manner likely to cause confusion or deceive purchasers as to the source of such goods or services. Implicit in this statutory standard is that the goods involved must be so related that confusion as to origin is likely. The Court reiterated that likelihood of confusion is a relative, fact-specific concept to be resolved by examining the particular circumstances of the case.
Analytical Framework — Related Goods and Likelihood of Confusion
The Court relied on the modern “related goods” concept: trademarks on related goods may cause confusion even if not directly competitive, while identical marks on unrelated goods typically will not. Goods are considered related when they belong to the same class or share descriptive properties, physical attributes, essential characteristics, serve the same purpose, or move through similar channels of trade. The Court emphasized precedent holding that identical marks may be registered or used for different, unrelated goods when consumers would not reasonably assume a common source.
Application of Law to Facts — Nature of Goods and Channels of Trade
The Court found the parties’ goods to be non-competing and entirely unrelated: petitioner’s ESSO marks were used on petroleum and petroleum-related products (including gasoline, lubricants, solvents, kerosene, fuels, chemicals and related items), while respondent’s use was limited to cigarettes. The Court accepted the Court of Appeals’ characterization that there was “absolutely no iota of similitude” between the products and that cigarettes were beyond petitioner’s zone of potential or logical expansion. The Court also relied on differing distribution channels: petitioner’s products were distributed through gasoline service and lubrication stations, automotive shops and hardware stores, whereas respondent’s cigarettes were sold through sari-sari stores, grocery stores, small distributors and street peddlers. These differences reduced any realistic prospect that purchasers would believe both product lines came from the same manufacturer.
Application of Law to Facts — Trade Dress and Label Differences
The Court noted significant differences in the marks’ overall appearance and labels. Trial testimony admitted that petitioner’s ESSO oval design used a distinct blue and combinations of red, white and blue, while respondent’s cigarette label used a rectangular background and primarily green coloration; petitioner’s witnesses acknowledged these distinctions. The Court found that, when each mark is considered in its entirety and in the context of its label and packaging, the likelihood of confusion was unlikely.
Precedent and Controlling Authority
The Court applied and relied upon established precedents fav
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Procedural History
- Petition for certiorari to the Supreme Court from a decision of the Court of Appeals which reversed the Court of First Instance of Manila and dismissed petitioner’s complaint for trademark infringement.
- Trial court (Court of First Instance of Manila) ruled in favor of petitioner, finding respondent guilty of trademark infringement; relied on Ang v. Teodoro and Arce & Sons, Inc. v. Selecta Biscuit Company.
- Court of Appeals reversed the trial court and dismissed the complaint for lack of trademark infringement; petitioner’s motion for reconsideration in the Court of Appeals was denied.
- Petitioner appealed to the Supreme Court by certiorari. The Supreme Court affirmed the Court of Appeals’ decision and dismissed the petition.
- Prior related administrative and procedural notations: petitioner Esso Standard Eastern, Inc. registered its business name with the Bureaus of Commerce and Internal Revenue in April and May, 1962. By an Agreement dated December 31, 1969, petitioner’s Philippine businesses were transferred to Esso Philippines, Inc.; petitioner’s attempt to substitute Esso Philippines, Inc. as party petitioner was denied by this Court’s April 7, 1970 resolution.
Parties and Subject Matter
- Petitioner: Esso Standard Eastern, Inc., then a foreign corporation licensed to do business in the Philippines, engaged in the sale of petroleum products identified with the trademark ESSO.
- Private respondent: United Cigarette Corporation, a domestic corporation engaged in the manufacture and sale of cigarettes; it acquired in November 1963 the business, factory and patent rights of La Oriental Tobacco Corporation, including the use of the trademark ESSO on cigarettes, for which a permit had been granted by the Bureau of Internal Revenue.
- Central controversy: whether respondent’s use of the trademark ESSO on cigarettes constitutes trademark infringement against petitioner’s ESSO trademark used on petroleum and related products.
Facts
- Petitioner used the trademark ESSO in connection with petroleum products and had registered the business name as successor of Standard Vacuum Oil Co.
- Respondent, as successor to La Oriental Tobacco Corporation, used the trademark ESSO on cigarettes and had the requisite permit from the Bureau of Internal Revenue.
- Petitioner alleged longstanding sale of petroleum products under ESSO and asserted that ESSO had acquired considerable goodwill and equivalence to high-quality petroleum products; petitioner claimed respondent’s use of ESSO on cigarettes was intended to deceive the public as to quality and origin and would harm petitioner.
- Respondent admitted using ESSO on cigarettes but maintained cigarettes are not identical to petitioner’s petroleum products and contended that trademark infringement requires use in connection with goods of the same kind or in competition with the complainant’s goods.
- Trial court found for petitioner and held respondent guilty of infringement; Court of Appeals found no infringement and dismissed the complaint.
- Evidence and findings recorded by the appellate court: differences in label designs and colors; petitioner’s ESSO oval design with a distinct blue was not similar to respondent’s green-colored cigarette label with a rectangular background; petitioner’s witnesses admitted differences in color combinations and label appearance.
- Distribution channels differed: petitioner’s products distributed principally through gasoline service and lubrication stations, automotive shops and hardware stores; respondent’s cigarettes sold in sari-sari stores, grocery stores, small distributors and even peddled in the streets.
- The Court noted the products were “poles apart” in kind and nature and beyond petitioner’s “zone of potential or natural and logical expansion.”
Legal Issue Presented
- Whether the use by respondent of the identical trademark ESSO on cigarettes constitutes infringement of petitioner’s ESSO trademark used on petroleum and related products, considering the statutory definition of infringement and the relatedness (or lack thereof) of the goods.
Statutory Definition and Legal Standard
- Quoted statutory definition (Sec. 22, Trademark Law): infringement is the use without consent of the trademark owner of any “reproduction, counterfeit, copy or colorable imitation of any registered mark or tradename in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or ser