Case Summary (G.R. No. 195297)
Petitioner and Respondent
Petitioner: Nutri-Asia, Inc. (now merged with UFC Philippines, Inc.), owner of registered marks “PAPA,” “PAPA LABEL DESIGN,” and “PAPA KETSARAP.”
Respondent: Fiesta Barrio Manufacturing Corporation, applicant for “PAPA BOY & DEVICE” for lechon sauce under Class 30.
Key Dates
• April 4, 2002 – Respondent files trademark Application No. 4-2002-002757 for “PAPA BOY & DEVICE.”
• September 8, 2006 – IPO e-Gazette publication.
• December 11, 2006 – Petitioner files Verified Notice of Opposition.
• March 26, 2008 – IPO-BLA sustains opposition; rejects respondent’s application.
• January 29, 2009 – IPO Director General dismisses respondent’s appeal.
• June 23, 2011 – Court of Appeals reverses IPO decisions.
• October 4, 2011 – Court of Appeals resolution denies motion for reconsideration.
• January 20, 2016 – Supreme Court issues final decision.
Applicable Law
• 1987 Philippine Constitution (post-1990 cases).
• Republic Act No. 8293 (Intellectual Property Code of 1998), particularly Sections 123.1(d), 138, 147, 155.1, and 168.
• A.M. No. 10-3-10-SC, Rule 18, Rules of Procedure for Intellectual Property Rights Cases.
Trademark Applications and Opposition Proceedings
Respondent’s “PAPA BOY & DEVICE” mark was applied to lechon (liver) sauce. Petitioner opposed on grounds that the dominant word “PAPA” in respondent’s mark is identical or confusingly similar to petitioner’s existing “PAPA” family of marks, all covering sauce products under Class 30. Petitioner relied on the dominancy test under Section 155.1 to show likelihood of confusion, while respondent argued for the holistic test and stressed differences in design, additional words, and product type (banana catsup vs. lechon sauce).
Decisions of the Intellectual Property Office
The IPO-Bureau of Legal Affairs (March 26, 2008) and the IPO Director General (January 29, 2009) applied the dominancy test and concluded that:
- The word “PAPA” is the dominant element in both parties’ marks.
- Both marks cover closely related goods (condiments under Class 30).
- Confusion of goods and confusion of business is likely.
They therefore sustained petitioner’s opposition and rejected respondent’s application.
Court of Appeals Ruling
The Court of Appeals reversed the IPO, applying the holistic test. It held that:
• Respondent’s expired “PAPA” registrations could not bar its own mark. Only “PAPA KETSARAP” remained valid.
• “PAPA BOY & DEVICE” and “PAPA KETSARAP” differ conspicuously in overall appearance, including design elements and product labeling.
• Distinct product types and visible bottle differences render confusion unlikely.
Issues on Appeal
Nutri-Asia sought Supreme Court review on whether:
- The dominancy test should apply rather than the holistic test.
- Confusion of business exists despite distinct sauce types.
- The word “PAPA” is an arbitrary mark entitling exclusive use.
Supreme Court’s Analysis on Dominancy vs. Holistic Tests
The Court reaffirmed that under the Intellectual Property Code and Rule 18, likelihood of confusion is assessed by both visual, aural, and connotative impressions. Jurisprudence differentiates:
• Dominancy Test – focuses on the main, essential features of marks (Section 155.1).
• Holistic Test – considers the marks as a whole.
For cases involving common household condiments where the purchaser does not scrutinize minor design details, the dominancy test is more appropriate.
Application of Dominancy Test and Likelihood of Confusion
The Supreme Court held:
• “PAPA” is the dominant feature of both marks despite design differences.
• Both marks co-exist in Class 30 and may travel the same trade channels.
• Ordinary purchasers could believe that a “PAPA BOY” lechon sauce is an extension of the “PAPA” sauce family.
• Confusion of business arises from the possibility that petitioner might expand into lechon sauce, reinforcing the likelihood of source confusion.
Concept of Confusion of Business and Product Confusion
The Court emphasized two confusi
Case Syllabus (G.R. No. 195297)
Procedural Posture
- Petition for review on certiorari under Rule 45 filed by petitioner seeking to annul and set aside:
• IPO-BLA Decision (March 26, 2008) and
• IPO Director General Decision (January 29, 2009),
both upholding opposition to respondent’s mark. - Court of Appeals reversed and set aside those decisions in CA-G.R. SP No. 107570 by Decision (June 23, 2011) and Resolution (October 4, 2011).
- Supreme Court granted certiorari to resolve conflict over confusing similarity and proper test to apply.
Parties and Subject Mark
- Petitioner: Nutri-Asia, Inc. (surviving entity after merger with UFC Philippines, Inc.), owner of a family of “PAPA” marks registered for Class 29 and 30 goods since 1954.
- Respondent: Fiesta Barrio Manufacturing Corporation, sole applicant of Application No. 4-2002-002757 filed April 4, 2002, for the mark “PAPA BOY & DEVICE” for lechon sauce (Class 30).
Petitioner’s Ownership and Use of “PAPA” Marks
- First use: 1954 by Neri Papa for “PAPA” on banana catsup; subsequently assigned to Hernan D. Reyes.
- Certificate of Registration No. 32416 granted 1983, re-registered under Application No. 4-2005-010788 (Classes 29 & 30).
- Supplemental Register Certificate No. SR-6282 for “PAPA BANANA CATSUP Label” issued August 11, 1983, re-registered under Application No. 4-2006-012346.
- Certificate of Registration No. 34681 for “PAPA KETSARAP” (banana sauce, Class 30) issued August 23, 1985; renewed August 23, 2005.
- Continuous use and significant goodwill established through sister companies (e.g., Southeast Asia Food, Inc., “Mang Tomas” line).
Grounds for Opposition by Petitioner
- “PAPA BOY & DEVICE” is confusingly similar to dominant feature “PAPA” in petitioner’s registered marks.
- Both marks cover goods under Class 30 (banana catsup, lechon sauce) and share channels of trade.
- Likelihood of confusion of goods and confusion of business (source/origin) among ordinary purchasers.
- Allegations of bad faith, fraud in application, and irreparable damage to petitioner’s exclusive rights.
Respondent’s Defenses and Counter-Arguments
- Expiration of certain petitioner registrations (“PAPA” No. 32416 and SR-6282) and lack of protection