G.R. No. 248021 - Prosel Pharmaceuticals and Distributors, Inc. vs. Tynor Drug House, Inc.

Case Summary (G.R. No. 248021)

Factual Background

Tynor Drug House, Inc. formulated and marketed a children’s multivitamin under the mark CHERIFER and registered a composite mark described as CHERIFER + LOGO with a login of a dunking boy and the slogan “HEIGHT IS MIGHT”; respondent deposited its packaging with the Philippine National Library on July 3, 2002 and obtained a Certificate of Registration for its trademark on July 8, 2004. Prosel Pharmaceuticals & Distributors, Inc. marketed a product called CEEGEEFER, which it described as an improved version of its earlier product Selvon C (BFAD Certificate of Product Registration dated December 3, 1999), and which petitioner said derived its name phonetically from its ingredient Chlorella Growth Factor (CGF).

Prelitigation Correspondence and Parties’ Responses

Respondent sent petitioner a Demand Letter dated March 28, 2007 alleging that CEEGEEFER was confusingly similar to CHERIFER and directing petitioner to stop distribution, recall products, and undertake not to use or imitate respondent’s trademark and design. Petitioner replied on April 13, 2007 denying confusing similarity but undertook to withdraw promotional materials resembling respondent’s trade box, issued an internal memorandum directing field personnel to remove similar materials, and submitted a new trade box design to BFAD for approval.

Trial Court Proceedings and Decision

Respondent filed a Complaint with the Regional Trial Court, Branch 256, Muntinlupa City, docketed as Civil Case No. 07-086, for trademark and copyright infringement, unfair competition, and damages, and sought injunctive relief. A writ of preliminary injunction issued on February 21, 2008. By Decision dated December 23, 2013, the RTC dismissed respondent’s complaint, lifted the writ, and awarded petitioner respondent’s preliminary injunction bond as nominal damages. The RTC applied the idem sonans principle and held that consumers were sufficiently attentive to distinguish CEEGEEFER from CHERIFER, declined broad application of Del Monte, and relied on factors from Asia Brewery, Inc. v. Court of Appeals in assessing similarity. The RTC also found no copyright infringement and concluded respondent failed to prove passing off.

Court of Appeals Ruling

Respondent appealed to the Court of Appeals. The CA reversed the RTC and found petitioner liable for trademark infringement but not for copyright infringement. The CA enjoined petitioner from using CEEGEEFER and the CHERIFER + Logo on any goods, awarded respondent P500,000.00 as nominal damages under Article 2222, and P100,000.00 as attorney’s fees, but denied exemplary damages. The CA emphasized petitioner’s admission of resemblance in its letter-reply, noted petitioner’s unexplained use of the suffix “fer,” and identified visual similarities in packaging: the color combination, a depiction of a boy performing a basketball dunk, an arc slogan, and the use of a ribbon.

Issues Presented to the Supreme Court

Petitioner challenged the CA’s factual and legal findings, maintaining that CEEGEEFER and CHERIFER are not confusingly similar in sound or spelling, that idem sonans did not apply because the only shared element was the suffix “fer,” that CEEGEEFER was derived from CGF and thus descriptive of a component, that the products differ in formulation and target market, and that petitioner’s BFAD registration and the antecedent use of Selvon C justified its packaging and trade dress. Respondent opposed dismissal and defended the CA’s finding of a colorable imitation and the utility of respondent’s registration in demonstrating its protectible rights.

Supreme Court Ruling — Disposition

The Supreme Court denied the petition and affirmed the CA Decision and Resolution with modification. The Court held that CEEGEEFER and CHERIFER create a likelihood of confusion and that petitioner’s mark and packaging constitute a colorable imitation of respondent’s CHERIFER + Logo. The injunction prohibiting petitioner’s use of the CEEGEEFER brand name and the CHERIFER + Logo was affirmed. The Court reduced the award of nominal damages to P100,000.00 and affirmed attorney’s fees in the amount of P100,000.00. The awards shall earn six percent annual legal interest from finality pursuant to Nacar v. Gallery Frames.

Supreme Court Reasoning on Trademark Infringement

The Court found both phonetic and visual similarity. It applied the idem sonans principle and observed precedent recognizing confusing similarity in marks less similar than those at bar. Visually, a side-by-side comparison showed substantially similar depictions: the right profile of a boy in a basketball jersey and cap performing a dunk, an arc-form slogan beginning with letters “H” and “M,” a ribbon device, and the shared use of orange and yellow tones. The Court rejected petitioner’s emphasis on minor differences in the boy’s physique or attire as negligible in the context of deliberate imitation, citing precedent that infringers often make only trivial changes. The Court noted petitioner’s admission of resemblance in internal correspondence and invoked estoppel against taking a contrary position. The Court further observed that both products were over-the-counter children’s growth supplements sold without prescription and even displayed side-by-side in some drugstores, which increased the propensity of consumer confusion and made the classification of CEEGEEFER as a drug immaterial to the trademark inquiry.

Trademark Registration, BFAD Registration, and Agency Competence

The Court observed that petitioner did not prove a valid trademark registration for CEEGEEFER; an IPO search showed petitioner’s application for CEEGEEFER had been abandoned, and another entity later registered the mark in 2014. The Court clarified that BFAD registration (now the Food and Drug Administration under Republic Act No. 9711) pertains to product regulation and does not confer rights or defenses against trademark infringement, which is governed by the Intellectual Property Code and the IPO.

Damages, Attorney’s Fees, and Interest

The Court modified the CA’s nominal damages award downward to P100,000.00, finding that amount reasonable in light of jurisprudence such as San Miguel Pure Foods Company, Inc. v. Foodsphere, Inc. The award of attorney’s fees in the amount of P100,000.00 was affirmed as respondent proved it hired counsel and incurred litigation expenses. The monetary awards were ordered to earn six percent annual legal interest from finality, following Nacar v. Gallery Frames.

Copyright and Unfair Competition Findings

Both the CA and the Supreme Court declined to find copyright infringement by petitioner, concluding that the overall appearances of the products were not substantially identical as copyright-protected works. The CA had earlier found no unfair competition because petitioner identified itself as the manufacturer of CEEGEEFER, negating an intent to deceive the public regarding o

Case Syllabus (G.R. No. 248021)

Parties and Posture

Prosel Pharmaceuticals & Distributors, Inc. was the petitioner before the Supreme Court and the defendant in the trial and appellate courts.
Tynor Drug House, Inc. was the respondent before the Supreme Court and the plaintiff below claiming trademark and copyright infringement, unfair competition, and damages.
The case reached the Supreme Court by a Petition for Review on Certiorari under Rule 45, Rules of Court challenging the Court of Appeals' Decision and Resolution enjoining the petitioner from using the mark CEEGEEFER.

Key Facts

Prosel marketed a product called CEEGEEFER, which it described as an improved version of its earlier product Selvon C, the latter having a BFAD Certificate of Product Registration dated December 3, 1999.
Prosel claimed that the name CEEGEEFER was phonetically derived from the ingredient Chlorella Growth Factor (CGF) and that the initial packaging resembled Selvon C's to expedite BFAD approval.
Tynor marketed CHERIFER + Logo, a children's multivitamin formulated in 1993 and registered with the trademark office under Certificate of Registration No. 4-2002-004546 on July 8, 2004.
Tynor asserted that CEEGEEFER's name and packaging were confusingly similar to CHERIFER and sent a demand letter on March 28, 2007 to cease distribution and recall products.

Registrations and Filings

Tynor secured a Certificate of Copyright Registration and Deposit for its packaging on July 25, 2002.
Tynor obtained a trademark registration for CHERIFER + Logo on July 8, 2004 under Registration No. 4-2002-004546.
Prosel did not show a valid trademark registration for CEEGEEFER, and the Supreme Court noted that Prosel's application was abandoned and that a different entity registered CEEGEEFER in 2014.
Prosel possessed a BFAD (now Food and Drug Administration) certificate for CEEGEEFER but BFAD lacks authority over trademark disputes under Republic Act No. 9711.

Procedural History

Tynor filed a complaint for trademark and copyright infringement, unfair competition, and damages with applications for injunctive relief in the Regional Trial Court (Branch 256, Muntinlupa), docketed Civil Case No. 07-086.
The RTC issued a writ of preliminary injunction on February 21, 2008 and later, in a Decision dated December 23, 2013, dismissed Tynor's complaint and lifted the writ.
Tynor appealed to the Court of Appeals under Rule 41, Rules of Court, which in a Decision dated January 29, 2018 reversed the RTC and found Prosel liable for trademark infringement but not for copyright infringement.
Prosel filed a Motion for Reconsideration which the Court of Appeals denied in a Resolution dated June 21, 2019, prompting the present Rule 45 petition.

Issues Presented

Whether CEEGEEFER is a colorable imitation of CHERIFER resulting in trademark infringement and unfair competition.
Whether there was copyright infringement in the packaging and whether the primo facie enforcement remedies sought were appropriate.
Whether the awards of nominal damages and attorney's fees were proper and, if so, in what amounts.

Parties' Contentions

Prosel maintained that CEEGEEFER and CHERIFER are not confusingly similar in sound or spelling because the likeness is limited to the suffix “fer” and that idem sonans should not apply.
Prosel asserted that CEEGEEFER was named from its ingredient CGF and that differences in logos and product formulations (vitamin C presence) preclude confusion.
Tynor contended that CEEGEEFER was a colorable imitation of the registered CHERIFER + Logo based on phonetic similarity, near-identical pictorial device, color schemes, slogans, ribbon design, and overlapping target market.

RTC Ruling

The RTC dismissed Tynor's complaint and lifted the preliminary injunction, holding that idem sonans did not apply and that consumers would distinguish the names CEEGEEFER and CHERIFER.
The RTC found no copyright infringement because th