G.R. No. 158589 - Philip Morris, Inc. vs. Fortune Tobacco Corp.

August 18, 1982: Petitioners file complaint for trademark infringement and damages (RTC Pasig, Civil Case No. 47374)
March 28, 1983: RTC denies preliminary injunction
November 3, 1999: RTC dismisses complaint for lack of capacity to sue and finds no infringement
January 21, 2003: Court of Appeals (CA) affirms RTC’s no-infringement ruling but holds petitioners have standing
May 30, 2003: CA denies petitioners’ motion for reconsideration
June 27, 2006: Supreme Court denies petition for review under Rule 45

Constitution: 1987 Philippine Constitution (decision post-1990)
Republic Act No. 166, as amended (Trademark Law in force during trial)
Paris Convention for the Protection of Industrial Property (Philippines signatory)
TRIPS Agreement and R.A. No. 8293 (Intellectual Property Code) held inapplicable to pre-1998 filings

Section 21-A, RA 166: foreign registrant may sue if home country grants reciprocal privileges to Philippine entities
Paris Convention: grants procedural standing but does not override Philippine requirement of actual local use
Petitioners failed to prove reciprocity and admitted no business or local use in the Philippines
SC confirms registration alone confers standing but not entitlement to protection absent actual Philippine use

“MARK VII” (registered April 1973 under Sec. 37, RA 166)
“MARK TEN” (registered on basis of two-month local use under Sec. 2A and Sec. 5(a))
“LARK” (assigned registration)
Registration creates a prima facie presumption of ownership and exclusive rights, rebuttable by non-use

Infringement (Sec. 22, RA 166): unauthorized use of a registered mark likely to cause confusion as to origin
Dominancy test: assesses similarity of dominant elements of marks
Holistic test: compares overall appearance, packaging, and context

No evidence of consumer confusion or mistaken purchase of respondent’s “MARK” as petitioners’ products
Holistic comparison of labels shows significant differences in design, wording, and packaging
Ordinary cigarette buyers are brand-aware

Petitioners filed a petition for review under Rule 45 seeking reversal of:
• CA Decision (Jan. 21, 2003) affirming RTC Pasig’s dismissal of Civil Case No. 47374 for trademark infringement and damages
• CA Resolution (May 30, 2003) denying their motion for reconsideration
RTC Pasig Branch 166 had dismissed the complaint on Nov. 3, 1999
SC docketed the petition as G.R. No. 158589, decision rendered June 27, 2006

Philip Morris, Inc. (Virginia, USA) – registered owner of “MARK VII” under PPO Cert. No. 18723
Benson & Hedges (Canada), Inc. (subsidiary of Philip Morris) – registered owner of “MARK TEN” under PPO Cert. No. 11147
Fabriques de Tabac Reunies, S.A. (Swiss subsidiary, now Philip Morris Products S.A.) – assignee of “LARK” under PPO Cert. No. 19053
Fortune Tobacco Corporation (Philippine corporation) – manufacturer and seller of cigarettes under the mark “MARK”

Complaint for infringement and damages filed August 18, 1982 (RTC Pasig Civil Case No. 47374)
Allegations by petitioners:
• Long use and international fame of their marks (“MARK VII,” “MARK TEN,” “LARK”)
• Unauthorized manufacture and sale by respondent of cigarettes bearing the mark “MARK”
• Likelihood of confusion under R.A. 166 (Trademark Law) and Paris Convention
• Prayer for preliminary and permanent injunction, damages
Respondent’s defense:
• Denied material allegations; asserted “MARK” is a common word not distinctive of petitioners
RTC denied preliminary injunction (Mar. 28, 1993) and later, after trial on merits, dismissed complaint and counterclaim

Capacity to sue: petitioners failed to prove reciprocity or license to do business in PH; barred under Corp. Code § 133
Infringement:
• Words “MARK,” “TEN,” “LARK,” “VII” lack distinctiveness to point to origin/ownership
• No evidence of actual confusion by ordinary purchasers or of secondary meaning in local market
• Petitioners failed to prove actual use or local pr