Case Summary (G.R. No. 215994)
Factual Background
Petitioners own and extensively advertise the “Big Mac” trademark for hamburger sandwiches. Respondents, operating snack vans and outlets, adopted “Big Maka” for hamburgers and sought its registration. After receiving no response to opposition and cease‐and‐desist demands, petitioners obtained a TRO and preliminary injunction from the RTC. Respondents counterclaimed but failed to secure registration.
Trial Court’s Findings
The RTC held:
- “Big Mac” is a valid, distinctive, registered mark entitled to protection.
- Use of “Big Maka” on identical products (hamburgers) created likelihood of consumer confusion.
- Respondents’ adoption of “Big Maka” constituted unfair competition under Section 29 of RA 166.
- Permanent injunction issued; P400,000 actual, P100,000 exemplary damages, and P100,000 attorney’s fees awarded.
Court of Appeals’ Ruling
The appellate court reversed the RTC, concluding:
- No colorable imitation exists because respondents’ “Big Maka” is part of a broader corporate name, used on varied menu items, displayed in different lettering and packaging, and accompanied by a distinct mascot.
- No unfair competition: similarity in sound alone insufficient absent bad faith; respondents credibly derived “Maka” from founders’ names.
- Awarded respondents P1.6 million actual and P300,000 moral damages against petitioners.
Issues Presented
- Whether questions of fact and law in the petition are reviewable under Rule 45.
- Whether respondents used “Big Maka” merely as corporate name or also as trademark on hamburgers.
- Whether that use constitutes trademark infringement (likelihood of confusion) and unfair competition.
Proper Basis for Review
Despite mixed factual and legal issues, the Supreme Court accepted the petition due to conflicting findings between RTC and Court of Appeals, invoking an exception to Rule 45’s restriction on questions of fact.
Use of “Big Maka” as Trademark
Evidence at injunction hearings showed respondents’ plastic wrappers and invoices bore “Big Mak” prominently, with descriptive terms in smaller type and no corporate identifier. Snack vans displayed the full corporate name, but primary product packaging highlighted “Big Mak” alone.
Trademark Infringement Analysis
Under Section 22 of RA 166, infringement requires a valid mark, registrant’s ownership, and a use likely to cause confusion as to product source or identity.
Validity and Ownership
- “Big Mac” is a fanciful, arbitrary mark—highly distinctive and registrable under Section 4.
- Registrant’s ownership is prima facie established; prior registrations by third parties were either assigned to McDonald’s or on the Supplemental Register (no substantive protection).
Types of Confusion
- Confusion of goods (identical products) and confusion of business (related services) both apply because respondents sold hamburgers under “Big Maka,” the same product line.
Likelihood of Confusion
Applying the dominancy test (focusing on dominant, distinctive features):
- Aural identity: “Big Maka” and “Big Mac” are phonetically identical in English and Filipino.
- Visual similarity: identical first word, same initial letters in second word, nearly identical overall structure.
- Context of use: same product, market, and consumer base.
- Intent inferred: respondents’ implausible origin story for “Maka” suggests deliberate imitation to capitalize on McDonald’s goodwill.
- Actual confusion need not be proved; likelihood suffices.
Conclusion: Respondents’ use of “Big Maka” infringed the “Big Mac” trademark.
Unfair Com
Case Syllabus (G.R. No. 215994)
Nature of the Case
- Petition for review under Rule 45 of the Rules of Civil Procedure challenging the Court of Appeals’ Decision of 26 November 1999 and Resolution of 11 July 2000.
- Seeks reversal of the appellate ruling that absolved L.C. Big Mak Burger, Inc. of liability for trademark infringement and unfair competition.
- Aims to reinstate the Regional Trial Court’s 5 September 1994 Decision holding respondents liable and awarding injunctive relief and damages.
Parties Involved
- Petitioners:
- McDonald’s Corporation (Delaware corporation owning the “Big Mac” mark).
- McGeorge Food Industries, Inc. (domestic franchisee of McDonald’s in the Philippines).
- Respondents:
- L.C. Big Mak Burger, Inc. (domestic fast-food operator of outlets and snack vans).
- Private respondents: Francis B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo, and Grace Huerto (incorporators, stockholders, directors).
Factual Background
- McDonald’s owns and uses the “Big Mac” trademark for a double-decker hamburger globally.
- U.S. registration obtained on 16 October 1979; Philippine registration granted on 18 July 1985 based on the U.S. “home” registration.
- McDonald’s introduced “Big Mac” in the Philippines in September 1981; spent ₱10.5 million on advertising (1982–1990).
- L.C. Big Mak Burger, Inc. operates in Metro Manila and nearby provinces, selling hamburgers and various other food items.
- Private respondents are the corporation’s incorporators, stockholders, and directors.
Application and Opposition
- On 21 October 1988, respondent corporation applied to register the “Big Maka” mark for its hamburgers.
- Petitioners opposed before the Philippine Bureau of Patents, Trademarks and Technology, citing colorable imitation of “Big Mac.”
- Petitioners formally demanded cessation of “Big Mak” use; no reply was received.
Trial Court Proceedings and Injunctive Relief
- Petitioners filed suit for trademark infringement and unfair competition on 6 June 1990 in the Regional Trial Court of Makati, Branch 137.
- RTC issued a Temporary Restraining Order (11 July 1990) followed by a Writ of Preliminary Injunction (16 August 1990), enjoining respondents from using “Big Maka” in NCR.
- Respondents admitted using “Big Mak Burger” but denied infringement and claimed prior right by other registrants; counterclaimed for damages.
Regional Trial Court Decision (5 September 1994)
- Found L.C. Big Mak Burger, Inc. liable for:
- Trademark infringement under Section 22 of R.A. 166.
- Unfair competition under Section 29 of R.A. 166.
- Key holdings:
- “Big Mak” use on signages and packaging likely deceived consumers into believing products originated from McDonald’s.
- Respondents exploited petitioners’ goodwill and popularity in the fast-food market.
- Disposition:
- Made the preliminary injunction permanent.
- Awarded actual damages of ₱400,000; exemplary damages of ₱100,000; attorney’s fees and litigation expenses of ₱100,000.
- Dismissed complaint against private respondents and all counterclaims.
Court of Appeals Decision (26 November 1999)
- Reversed the RTC Decision, holding respondents not liable for trademark infringement or unfair competition.
- Reasoning:
- “Big Mak