Case Summary (G.R. No. L-29971)
Key Dates and Applicable Law
The decision was rendered on August 31, 1982, thus the applicable law is based on the Constitution effective at that time, primarily the 1973 Philippine Constitution, as well as existing trademark law prior to the 1987 Constitution. The key legal provision invoked is Section 22 of the Trademark Law, which defines trademark infringement as the unauthorized use of a registered mark in connection with goods or services likely to cause confusion or deception about their source or origin.
Factual Background and Trial Court Ruling
Petitioner was engaged in petroleum products sales and asserted that its "ESSO" trademark had acquired goodwill synonymous with high quality. Petitioner claimed that respondent’s use of "ESSO" on cigarettes was calculated to deceive the public and damage the petitioner’s interests. Respondent admitted use of the mark on cigarettes but argued the products were not identical or competing, thus no infringement existed. The Court of First Instance ruled in favor of petitioner, applying precedent that protected related goods under trademark law.
Court of Appeals Decision
The Court of Appeals reversed the trial court, finding no trademark infringement since the goods were non-competing and entirely unrelated. The appellate court emphasized that the crucial issue was whether the use of the same trademark on different products was likely to cause confusion or deception among the buying public. Given the distinct nature of petroleum products and cigarettes, the court found no likelihood of confusion or deception.
Legal Standard on Trademark Infringement and Related Goods
Trade infringement necessitates use of the mark in connection or competition with goods of the same or related kind wherein confusion about the source could arise. Likelihood of confusion is a relative, fact-specific concept. The Court reviewed established jurisprudence emphasizing the "related goods" doctrine—goods are related when they belong to the same class, share physical or functional characteristics, or are commonly found in the same commercial channels.
Application of Related Goods Doctrine and Precedents
The Court distinguished between non-competitive yet related goods (which may cause confusion) and non-related goods (which do not). For example, food products like biscuits and milk or toiletries like soap and perfume are related, whereas unrelated products, such as petroleum products and cigarettes, are not. Prior cases consistently support the notion that identical trademarks may coexist for unrelated products without prejudice.
Trademark Characteristics and Channel of Trade Considerations
The Court highlighted significant differences in the nature of the products, the trade channels, and consumer perception. Petitioner’s petroleum products were sold principally through gasoline stations and automotive shops, while respondent’s cigarettes were distributed through sari-sari stores and small outlets. Moreover, the trademarks’ labels and color schemes were markedly different, further reducing chances of confusion.
Distinction in Trademark Appearance
Evidence showed petitioner’s trademark used a distinct blue color in an oval design, whereas respondent displayed the mark in green on a rectangular background. The substantial visual differences contributed to the Court’s determination that confusion was improbable.
Prior Related Decisions Reinforcing the Hol
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Background and Parties Involved
- Petitioner, Esso Standard Eastern, Inc., a foreign corporation licensed to do business in the Philippines, engaged in the sale of petroleum products under the trademark ESSO.
- Petitioner is the successor of the defunct Standard Vacuum Oil Co., having registered the business name ESSO with relevant Philippine agencies in 1962.
- Respondent, United Cigarette Corporation, a domestic corporation, manufactures and sells cigarettes using the ESSO trademark acquired through acquisition of La Oriental Tobacco Corporation’s business and trademark rights in November 1963.
- Respondent possessed a duly granted permit from the Bureau of Internal Revenue to use the trademark ESSO on its cigarettes.
- Petitioner filed a complaint for trademark infringement against respondent before the Court of First Instance of Manila upon respondent's use of the ESSO mark on cigarettes.
Issues and Claims
- Petitioner alleged that it had long established goodwill under the trademark ESSO associated with high-quality petroleum products.
- Petitioner asserted that respondent’s use of the ESSO trademark on cigarettes was intended to deceive the public regarding the quality and origin of respondent’s goods, prejudicing petitioner’s products.
- Respondent admitted use of the ESSO trademark on cigarettes but denied infringement, emphasizing the dissimilarity of goods and the absence of competition or imitation.
- Respondent contended that trademark infringement requires the mark to be used in connection with goods of the same or related kind.
Proceedings and Lower Courts’ Decisions
- The trial court ruled in favor of petitioner, finding respondent guilty of trademark infringement based on precedents involving related products.
- On appeal, the Court of Appeals reversed the trial court’s decision, dismissing the infringement complaint due to lack of likelihood of confusion between the goods.
- Petitioner moved for reconsideration, which was denied, prompting the appeal to the Supreme Court by certiorari.
Supreme Court’s Holding and Rationale
- The Supreme Court affirmed the Court of Appeals decision, dismissing petitioner’s complaint for lack of merit.
- Trademark infringement under Philippine law involves unauthorized use of a mark likely to cause confusion or deceive purchasers as to the source or origin of goods or services.
- Central to infringement is the requirement that goods or services bearing the alleged infringing mark be so related as to cause confusion in trade or origin.
- The concept of “likelihood of con