Potential trademarks fall into four categories:

Generico "The name of a particular genus or class of which an individual article is a member."o Things like "aspirin" or "thermos" or "cellophane"o These are never trademarkable.o If you could trademark these, it would bar people from marketing competing products.

Descriptiveo "Identifies a characteristic of quality of an article or service."o Things like "Vision Center" or "Raisin Bran"o These are ordinarily not trademarkable, but might become trademarkable if they acquire a

secondary meaning. Suggestive

o Suggests, rather than describes a particular characteristic, but requires the consumer to exercise some imagination in order to draw conclusions about the product.

o Things like "Coppertone" or "Wrangler"o These are trademarkable without proof of secondary meaning.

Arbitrary or Fancifulo Bears no relations to the product or service it refers to.o Fanciful are things like "Kodak" that have no meaning.o Arbitrary are things like "Ivory Soap" that use real words but those words have no connection to

the product.o These are trademarkable without proof of secondary meaning.

Zatarians, Inc. v. Oak Grove Smokehouse, Inc. 698 F.2d 786 (1983)

Zatarians manufactured "Fish-Fri" and "Chick-Fri" batter mixes for frying.

Both terms were registered trademarks for Zatarians.

Oak Grove marketed similar batter mixes, called "Fish Fry" and "Chicken Fry".

The Oak Grove mixes had different ingredients than the Zatarians mixes. A second company, Visko also made a similar product with a similar name.

Zatarians sued Oak Grove and Visko for trademark infringement.

Oak Grove countersued in an attempt to cancel the trademark under 15 U.S.C. §1119 (the Lantham Act).

The Trial Court found for Oak Grove, Zatarians appealed.

The Trial Court found that the trademark "Fish-Fri" was a descriptive term with an established secondary meaning, and so Oak Grove had a right to use it via fair use.

The Court found that "Chick-Fri" was a descriptive term with no secondary meaning and therefore the trademark was canceled.

The Appellate Court affirmed.

The Appellate Court found that "Fish Fri" was a descriptive term, and in order to be trademarkable, there must be an established secondary meaning.

The Court found that in order to show a secondary meaning, Zatarians would have to show that the primary significance of the term in the minds of the consuming public is not the product but the producer.

o The term "Chick-Fri" was a recent Zatarian's trademark, and the public didn't associate the term with Zatarian's specifically, so there is no secondary meaning. Therefore, the trademark is invalid.

o However, the Court found that the public tended to associate the term "Fish Fri" with Zatarians so the term was trademarkable.

The Court found that even if a descriptive trademark has a legitimate trademark based on a secondary meaning, it is still possible for others to use the words, as longs as they only use them in a descriptive manner.

o Although Zatarian's "Fish-Fri" was established in the public's consciousness, Oak Grove and Visko could use it as a descriptive term for their fish frying product. (The term "fish fry" appears in the dictionary.)

o It would be difficult for Oak Grove and Visko to market their product without alerting consumers that it is used to fry fish.

The Court noted that the fact Zatarian's misspelled "fry" doesn't make the term "Fish-Fri" trademarkable.

SHANGRI-LA vs. DEVELOPERS GROUPOF COMPANIES, INC. G.R. No. 159938 March 31, 2006

FACTS: Respondent Developers Group of Companies, Inc.(DGCI) caused the registration of the trademark Shangri-La" mark and "S" logo on October 18, 1982. Petitioner Shangri-la International Hotel Management, Ltd. (SIHM) et.al. contested the said registration in view of its apparent widespread use of the Shangri-La mark and “s” logo on its hotels around the world. SIHM started the use of the mark and the logo since 1969. As far back as 1962, it adopted the name "Shangri-La" as part of the corporate names of all companies organized under the aegis of the Kuok Group of Companies (the Kuok Group). The logo was first used by the Shangri-La Hotel Singapore when it commissioned a Singaporean design artist, a certain Mr.William Lee, to conceptualize and design the logo of the Shangri-La hotels. SIHM begins its hotel business operations in the Philippines only on 1987.On the other hand, DGCI thru its President and Chairman, Ramon Syhunliong reiterated the conception of the mark and the logo as follows: “The ‘S-logo’ was one of two (2) designs given to him in December 1982, scribbled on a piece of paper by a jeepney signboard artist with an office somewhere in Balintawak. The unnamed artist supposedly produced the two designs after about two or three days from the time he (Syhunliong) gave the idea of the design he had in mind.” He also said that he visited one of the SIHM hotels as early as August 1982.In this case, the RTC of Quezon City and the CA upheld the registration of the DGCI before the Bureau of Patents,Trademarks and Technology Transfer (BPTTT). It solely based its decision on the “prior use” and registration of the mark and logo in the Philippines in contrast with the use of the SIHM which is widespread but not in the Philippines not until 1987.

ISSUE: Whether or not the “prior use” and registration should be the sole basis in determining the proper recipient of a trademark. NO.

HELD: Under the provisions of the former trademark law, R.A.No. 166, as amended, which was in effect up to December 31,1997, hence, the law in force at the time of respondent's application for registration of trademark, the root of ownership of a trademark is actual use in commerce. Section 2 of said law requires that before a trademark can be registered, it must have been actually used in commerce and service for not less than two months in the Philippines prior to the filing of an application for its registration. Registration, without more, does not confer upon the registrant an absolute right to the registered mark. The certificate of registration is merely a prima facie proof that the registrant is the owner of the registered mark or tradename. Evidence of prior and continuous use of the mark or trade name by another can overcome the presumptive ownership of the registrant and may very well entitle the former to be declared owner in an appropriate case. Among the effects of registration of a mark, as catalogued by the Court in Lorenzana v. Macagba, are: 1. Registration in the Principal Register gives rise to a presumption of the validity of the registration, the registrant's ownership of the mark, and his right to the exclusive use thereof. x x x 2. Registration in the Principal Register is limited to the actual owner of the trademark and proceedings therein pass on the issue of ownership, which may be contested through opposition or interference proceedings, or, after registration, in a petition for cancellation. Xxx Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption and use in trade or commerce. As between actual use of a mark without registration, and registration of the mark without actual use thereof, the former prevails over the latter. For a rule widely accepted and firmly entrenched, because it has come down through the years, is that actual use in commerce or business is a pre-requisite to the acquisition of the right of ownership. By itself, registration is not a mode of acquiring ownership. When the applicant is not the owner of the trademark being applied for, he has no right to apply for registration of the same. Registration merely creates a prima facie presumption of the validity of the registration, of the registrant's ownership of the trademark and of the exclusive right to the use thereof.20 Such presumption, just like the presumptive regularity in the performance of official functions, is rebuttable and must give way to evidence to the contrary. Here, respondent's own witness, Ramon Syhunliong, testified that a jeepney signboard artist allegedly commissioned to create the mark and logo submitted his designs only in December 1982. This was two-and-a-half months after the filing of the respondent's trademark application on October 18, 1982 with the BPTTT. It was also only in December 1982 when the respondent's restaurant was opened for business. Respondent cannot now claim before the Court that the certificate of registration itself is proof that the two-month prior use requirement was complied with, what with

the fact that its very own witness testified otherwise in the trial court. And because at the time (October 18, 1982) the respondent filed its application for trademark registration of the "Shangri-La" mark and "S" logo, respondent was not using these in the Philippines commercially, the registration is void

SHANGRI-LA vs. DEVELOPERS GROUPOF COMPANIES, INC. G.R. No. 159938 January 22, 2007

Before the Court is this Motion for Reconsideration filed by respondent Developers Group of Companies, Inc. (DGCI) praying for the reversal of this Court's Decision1 of March 31, 2006, the dispositive portion of which reads:

WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals dated May 15, 2003 and September 15, 2003, respectively, and the Decision of the Regional Trial Court of Quezon City dated March 8, 1996 are hereby SET ASIDE. Accordingly, the complaint for infringement in Civil Case No. Q-91-8476 is ordered DISMISSED.

In its motion, respondent-movant DGCI raises the following grounds:

1. The certification of non-forum shopping submitted by petitioners is insufficient;2. The word "Shangri-La" and "S" logo were adopted and used by the Kuok Group as part of their corporate

names and the names of their hotels;3. Petitioners' claim of legal and beneficial ownership of mark and logo is baseless and unwarranted;4. Change of theory from owner to one who may be damaged as entitled to relief is not allowable;5. Finding of registration in patent offices in different countries around the world is inaccurate;6. DGCI's registration of the "Shangri-La" mark and the "S" logo is valid because there was at least two

months’ use thereof prior to application;7. Section 2-A of R.A. No. 166 requires the actual commercial use of trademarks in the Philippines pursuant

to the principle of territoriality applicable to trademarks. Hence, petitioners' use of subject marks outside of Philippine territory did not confer on them any ownership rights thereto under Philippine laws;

8. The Regional Trial Court and the Court of Appeals' failure to find any bad faith on the part of DGCI is conclusive on the Supreme Court;

9. DGCI's use of the subject marks in the Philippines is entitled to protection under the territoriality principle of trademarks.

The bulk of the aforementioned grounds is a mere rehash of movant’s previous arguments. While DGCI is correct in stating that a motion for reconsideration, by its very nature, may tend to dwell on issues already resolved in the decision sought to be reconsidered and that this should not be an obstacle for a reconsideration, the hard reality is that movant has failed to raise matters substantially plausible or compellingly persuasive to warrant the desired course of action.

Considering that the grounds presently raised have been sufficiently considered, if not squarely addressed, in the subject Decision, it behooves movant to convince the Court that certain findings or conclusions in the Decision are contrary to law. As it is, however, the instant motion does not raise any new or substantial legitimate ground or reason to justify the reconsideration sought.

Movant DGCI would make capital on the alleged danger the subject Decision might wreak upon Philippine trademark law, claiming that the decision in question would render nugatory the protection intended by the trademark law to all Philippine trademark registrants. This assertion is a baseless and sweeping statement. The interpretation of Republic Act No. 166 in the Decision does not in any way diminish the protection afforded to valid trademark registrations made under said law. It was glaringly obvious, however, from the testimony of movant’s own witness that DGCI’s registration of the subject mark and logo was void due to the existence of bad faith and the absence of the requisite 2-month prior use. Despite movant's melodramatic imputation of an abandonment of the territoriality principle, the Decision actually upholds the principle but found that respondent DGCI was not

entitled to protection thereunder due to the double infirmity which attended its registration of the subject mark and logo.

Anent DGCI's assertion of a change of theory on the part of the petitioners, suffice it to say that the latter have never budged from seeking relief as rightful, legal and/or beneficial owners of the mark and logo in dispute. The Decision ruled favorably on the veracity of the petitioners' claim:

xxx It would be a great injustice to adjudge the petitioners guilty of infringing a mark when they are actually the originator and creator thereof.

Nor can the petitioners' separate personalities from their mother corporation be an obstacle in the enforcement of their rights as part of the Kuok Group of Companies and as official repository, manager and operator of the subject mark and logo. Besides, R.A. No. 166 did not require the party seeking relief to be the owner of the mark but "any person who believes that he is or will be damaged by the registration of a mark or trade name."

Clearly, from the word "Besides" used in the context of the aforequoted paragraph, all that the Decision says is that even if petitioners were not the owners, they would still have a right of action under the law. There was never an attempt on their part at an eleventh-hour change of theory, as movant DGCI wishes to portray.

WHEREFORE, the instant motion for reconsideration is DENIED for lack of merit.

Two Pesos, Inc. v. Taco Cabana, Inc. 505 U.S. 763 (1992)Facts: Since 1975, Taco Cabana, Inc., (Taco Cabana), operated a chain of fast-food Mexican restaurants in Texas. Its restaurants provide a festive eating atmosphere of interior dining and patio areas decorated with artifacts, bright colors, paintings, and murals. The exterior of its buildings has a vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.

Beginning in 1985, Two Pesos, Inc., (Two Pesos), opened a chain of competing Mexican fast-food restaurants in Texas. When Two Pesos adopted a motif similar to Taco Cabana's, Taco Cabana sued Two Pesos, alleging trade dress infringement in violation of the Lanham Trademark Act. Two Pesos argued that Taco Cabana's trade dress should not be protected because it had not yet acquired a secondary meaning. The court found that although Taco Cabana's trade dress had not yet acquired a secondary meaning, it was nonetheless distinctive and therefore protected. The court of appeals affirmed. Two Pesos appealed to the U.S. Supreme Court.

Issue. Is distinctive trade dress protectable under the Lanham Trademark Act without a showing that it has acquired a secondary meaning?

Held: Trade that is inherently distinctive is protectable under § 43(a) without a showing that it has acquired secondary meaning, since such trade dress itself is capable of identifying products or services as coming from a specific source. This is the rule generally applicable to trademarks, see, e. g., Restatement (Third) of Unfair Competition § 13, pp. 37-38, and the protection of trademarks and of trade dress under § 43(a) serves the same statutory purpose of preventing deception and unfair competition. There is no textual basis for applying different analysis to the two. Section 43(a) mentions neither and does not contain the concept of secondary meaning, and that concept, where it does appear in the Lanham Act, is a requirement that applies only to merely descriptive marks and not to inherently distinctive ones. Engrafting a secondary meaning requirement onto § 43(a) also would make more difficult the identification of a producer with its product and thereby undermine the Lanham Act's purposes of securing to a mark's owner the goodwill of his business and protecting consumers' ability to distinguish among competing producers. Moreover, it could have anticompetitive effects by creating burdens on the startup of small businesses. Petitioner's suggestion that such businesses be protected by briefly dispensing with the secondary meaning requirement at the outset of the trade dress' use is rejected, since there is no basis for such requirement in § 43(a).

Opinion. White, Justice. Trade dress is the total image of the business. Taco Cabana's trade dress may include the shape and general appearance of the exterior restaurant, the identifying sign, the interior kitchen floor plan, the decor, the menu, the equipment used to serve food, the servers' uniforms and other features reflecting on the total image of the restaurant. The trade dress of a product is essentially its total image and overall appearance.

Taco Cabana's trade dress was protected if it either was inherently distinctive or had acquired a secondary meaning. Trademark law requires a demonstration of secondary meaning only when the claimed trademark is not sufficiently distinctive of itself to identify the producer. The legal recognition of an inherently distinctive trademark or trade dress acknowledges the owner's legitimate proprietary interest in its unique and valuable informational device, regardless of whether substantial consumer association yet bestows the additional empirical protection of

secondary meaning. The user of such a trade dress should be able to maintain what competitive position it has and continue to seek wider identification among potential customers.

We see no basis for requiring secondary meaning for inherently distinctive trade dress protection. Adding a secondary meaning requirement could have anticompetitive effects, creating particular burdens on the start-up of small companies. It would present special difficulties for a business, such as Taco Cabana, that seeks to start a new product in a limited area and then expand into new markets. Denying protection for inherently distinctive trade dress until after secondary meaning has been established would allow a competitor, which has not adopted a distinctive trade dress of its own, to appropriate the originator's dress in other markets and to deter the originator from expanding into and competing in these areas.

WAL-MART STORES, INC. v. SAMARA BROTHERS, INC. March 22, 2000

Facts: Respondent Samara Brothers, Inc., designs and manufactures a line of children's clothing. Petitioner Wal-Mart Stores, Inc., contracted with a supplier to manufacture outfits based on photographs of Samara garments. Mter discovering that Wal-Mart and other retailers were selling the so-called knockoffs, Samara brought this action for, inter alia, infringement of unregistered trade dress under §43(a) of the Trademark Act of 1946 (Lanham Act). The jury found for Samara. Wal-Mart then renewed a motion for judgment as a matter of law, claiming that there was insufficient evidence to support a conclusion that Samara's clothing designs could be legally protected as distinctive trade dress for purposes of § 43(a). The District Court denied the motion and awarded Samara relief. The Second Circuit affirmed the denial of the motion.

Issue: Is a product's design is distinctive, and therefore protectible, from "knockoffs" in an action for infringement of unregistered trade dress under section 43(a) of the Trademark Act of 1946?

Held: In a § 43(a) action for infringement of unregistered trade dress, a product's design is distinctive, and therefore protectible, only upon a showing of secondary meaning.

(a) In addition to protecting registered trademarks, the Lanham Act, in § 43(a), gives a producer a cause of action for the use by any person of "any ... symbo[l] or device ... likely to cause confusion ... as to the origin ... of his or her goods." The breadth of the confusion-producing elements actionable under § 43(a) has been held to embrace not just word marks and symbol marks, but also "trade dress"-a category that originally included only the packaging, or "dressing," of a product, but in recent years has been expanded by many Courts of Appeals to encompass the product's design. These courts have correctly assumed that trade dress constitutes a "symbol" or "device" for Lanham Act purposes. Although § 43(a) does not explicitly require a producer to show that its trade dress is distinctive, courts have universally imposed that requirement, since without distinctiveness the trade dress would not "cause confusion ... as to ... origin," as § 43(a) requires. In evaluating distinctiveness, courts have differentiated between marks that are inherently distinctive-i. e., marks whose intrinsic nature serves to identify their particular source-and marks that have acquired distinctiveness through secondary meaning-i. e., marks whose primary significance, in the minds of the public, is to identify the product's source rather than the product itself. This Court has held, however, that applications of at least one category of mark-color-can never be inherently distinctive, although they can be protected upon a showing of secondary meaning.

(b) Design, like color, is not inherently distinctive. The attribution of inherent distinctiveness to certain categories of word marks and product packaging derives from the fact that the very purpose of attaching a particular word to a product, or encasing it in a distinctive package, is most often to identify the product's source. Where it is not reasonable to assume consumer predisposition to take an affixed word or packaging as indication of source, inherent distinctiveness will not be found. With product design, as with color, consumers are aware of the reality

that, almost invariably, that feature is intended not to identify the source, but to render the product itself more useful or more appealing.

(c) Two Pesos, Inc. v. Taco Cabana, Inc., 505 U. S. 763, does not foreclose the Court's conclusion, since the trade dress there at issue was restaurant decor, which does not constitute product design, but rather product packaging or else some tertium quid that is akin to product packaging and has no bearing on the present case. While distinguishing Two Pesos might force courts to draw difficult lines between product-design and product-packaging trade dress, the frequency and difficulty of having to distinguish between the two will be much less than the frequency and difficulty of having to decide when a product design is inherently distinctive. To the extent there are close cases, courts should err on the side of caution and classify ambiguous trade dress as product design, thereby requiring secondary meaning. Reversed and remanded.

Zazu Designs v. L'Oreal, S.A., United States Court of Appeals for the Seventh Circuit, 979 F2d 499 (7th Cir. 1992)

Comair, a United States licensee of L'Oreal in France, wanted to market hair coloring products. L'Oreal hired Wordmark to come up with a name, and it suggested ZAZU. L'Oreal searched and found that Riviera Slacks, Inc. held a federal trademark registration for the name for clothing; L'Oreal paid Riviera Slacks $125,000 for a covenant not to sue if L'Oreal used the name. L'Oreal also found Zazu Hair Designs (here "ZHD"), a hair salon in Hinsdale, Illinois which had registered the trade name as a service name in Illinois. L'Oreal repeatedly called and visited to see if the salon sold hair products; ZHD stated that it did not, but intended to do so. L'Oreal applied for a federal registration on June 12, 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application. Unbeknownst to L'Oreal, ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida. Do ZHD's sale of hair products under the ZAZU name before L'Oreal's registration give it national trademark rights?

Held: Easterbrook: No. "Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated. … But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration. The Lanham Act allows only trademarks 'used in commerce' to be registered. 15 U.S.C. §1051(a)." Here selling a few products to friends in other states was not enough to provide national trademark protection absent registration. Does L'Oreal's knowledge of ZHD's intention to create hair products prevent it from using the ZAZU name?

Held No; to hold otherwise would penalize entities for gathering knowledge and "ignorance would be rewarded." Intent establishes no right to a mark; only use does. "Because the mark was not registered for use in conjunction with hair products, any knowledge L'Oreal may have had of ZHD's plans is irrelevant."

Dissent Cudahay: By ordering lots of bottles and making sales to customers, many of whom came from out of state, ZHD had more than de minimis use. L'Oreal knew of ZHD's intent, so it acted out of bad faith—it paid Riviera Slacks to preclude its acting on its intention, after all, and clothing is a lot farther from hair products than is a hair salon. "A service mark can be infringed by its use on a closely related product."

In re Nantucket, Inc., United States Court of Customs and Patent Appeals, 677 E2d 95 (C. C.PJL 1982)

North Carolina company Nantucket, Inc. tried to register a trademark NANTUCKET for men's shirts. The Trademark Trial and Appeal Board refused the registration under §2(e)(2) of the Lanham Act, 15 U.S.C. §1052(e)(2) which

allows rejection of marks if they are "primarily geographically deceptively misdescriptive." The board determined that, as Nantucket is a place and the shirts don't come from Nantucket, the trademark can be denied. Must the public's association of the geographical designation with the products in question be considered when determining the prescription of the Lanham Act?

Held Markey: Yes. The board ignored the Lanham Act's designation of "deceptively misdescriptive," for if the public does not associate a product with a geographical designation, the "misdescriptive" phrase is not "deceptive." Here the public does not associate shirts with Nantucket (i.e. Nantucket is not particularly known for producing shirts), and hence the mark is not deceptively misdescriptive.

PARK 'N FLY, INC., Petitioner, v. DOLLAR PARK AND FLY, INC.

Facts: Petitioner operates long-term parking lots near airports in St. Louis, Cleveland, Houston, Boston, Memphis, and San Francisco. In 1969, petitioner applied to the United States Patent and Trademark Office to register a service mark consisting of the logo of an airplane and the words "Park 'N Fly." The registration issued in 1971, and nearly six years later petitioner filed an affidavit with the Patent and Trademark Office to establish the incontestable status of the mark under § 33(b) of the Trademark Act of 1946 (Lanham Act), which provides that "registration shall be conclusive evidence of the registrant's exclusive right to use the registered mark," subject to the provisions of § 15 and § 33(b) itself. Respondent provides long-term airport parking services called "Dollar Park and Fly," but only operates in Portland, Ore. Petitioner filed an infringement action in Federal District Court seeking to enjoin respondent from using the words "Park and Fly" in connection with its business. The District Court granted the injunction, rejecting, inter alia, respondent's defense that petitioner's mark is unenforceable because it is merely descriptive. The Court of Appeals reversed, holding that incontestability provides a defense against the cancellation of a mark but may not be used offensively to enjoin another's use, that, under this analysis, petitioner could obtain an injunction only if its mark would be entitled to continued registration without regard to its incontestable status, and that therefore respondent could defend by showing that the mark was merely descriptive. The court then determined that petitioner's mark is merely descriptive and respondent should not be enjoined from using the words "Park and Fly."

Held: Reversed and remanded. The holder of a registered mark may rely on incontestability to enjoin infringement, and an infringement action may not be defended on the grounds that the mark is merely descriptive.

a) The Lanham Act nowhere distinguishes between a registrant's offensive and defensive use of an incontestable mark, but, on the contrary, § 33(b)'s declaration that the registrant has an "exclusive right" to use the mark indicates that incontestable status may be used to enjoin infringement. The Act's language also refutes any conclusion that an incontestable mark may be challenged as merely descriptive.

b) Nothing in the Lanham Act's legislative history supports a departure from the plain language of the provisions concerning incontestability. Indeed, a conclusion that incontestable status may provide the basis for enforcement of the registrant's exclusive right to use a mark promotes the Act's goals in

providing national protection of trademarks in order to secure to the mark's owner the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.

c) There is no merit to respondent's argument that the Court of Appeals' decision should be upheld because trademark registrations are issued after an ex parte proceeding and generally without inquiry into the merits of an application. The facts of this case belie the suggestion that registration is virtually automatic, and respondent is simply wrong to suggest that third parties do not have an opportunity to challenge applications for trademark registration. The power of courts under § 34 of the Lanham Act to grant injunctions "according to principles of equity" does not encompass a substantive challenge to the validity of an incontestable mark on the grounds that it lacks secondary meaning. Otherwise, the meaning of "equity" would be expanded to the point of vitiating the Act's more specific provisions. Similarly, the power of courts to cancel registrations and "otherwise rectify the register" under § 37 of the Act must be subject to the specific provisions concerning incontestability.

d) The Court of Appeals was not justified in relying on its decision in Tillamook County Creamery v. Tillamook Cheese & Dairy Assn., 345 F.2d 158 (9 Cir.1965), cert. denied, 382 U.S. 903, 86 S.Ct. 239, 15 L.Ed.2d 157, for the proposition that a registrant may not rely on incontestability to enjoin the use of a mark

ETEPHA, A.G. vs. DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC.(G.R. No. L-20635, March 31, 1966)

FACTS: Respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of trademark "Atussin" placed on its "medicinal preparation of expectorant antihistaminic, bronchodilator sedative, ascorbic acid (Vitamin C) used in the treatment of cough". The trademark is used exclusively in the Philippines since January 21, 1959.Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected claiming that it will be damaged because Atussin is so confusedly similar to its Pertussin used on a preparation for the treatment of coughs, that the buying public will be misled into believing that Westmont's product is that of petitioner's which allegedly enjoys goodwill. The Director of Patents ruled that the trademark ATUSSIN may be registered even though PERTUSSIN had been previously registered from the same office, hence, this appeal.

ISSUE: Whether or not ATUSSIN may be registered?

HELD: We are to be guided by the rule that the validity of a cause for infringement is predicated upon colorable imitation. The phrase "colorable imitation" denotes such a "close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser, giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other. A practical approach to the problem of similarity or dissimilarity is to go into the whole of the two trademarks pictured in their manner of display. Inspection should be undertaken from the viewpoint of a prospective buyer. Confusion is likely between trademarks, however, only if their over-all presentations in any of the particulars of sound, appearance, or meaning are such as would lead the purchasing public into believing that the products to which the marks are applied emanated from the same source. We concede the possibility that buyers might be able to obtain Pertussin or Attusin without prescription. When this happens, then the buyer must be one thoroughly familiar with what he intends to get, else he would not have the temerity to ask for a medicine

specifically needed to cure a given ailment. In which case, the more improbable it will be to palm off one for the other. For a person who purchases with open eyes is hardly the man to be deceived. For the reasons given, the appealed decision of the respondent Director of Patents giving due course to the application for the registration of trademark ATTUSIN is hereby affirmed. Cost against petitioner. So ordered.

GUILLERMO BAXTER AND G. GAXTER & CO. vs. ZOSIMO ZUAZUA, ET AL.

Guillermo Baxter, the plaintiff in this case, after complying with the necessary formalities, secured from the Government of the Philippine Islands, on the 30th day of August, 1894, the right to use the trade-mark described as "Agua de Kananga", as well as the labels annexed thereto, a facsimile of which was attached to the complaint filed in this case.

On the 23rd day of July, 1901, the said Guillermo Baxter associated himself with certain merchants of the city of Manila for the purpose of organizing a limited partnership for a period of five years, under the firm name and style of "Baxter & Company," the object of which said partnership was the manufacture of toilet water and perfumery. Guillermo Baxter contributed to the partnership, of which he was elected manager and administrator, the business which is now the basis of that carried on by the said partnership; also his title to certain trade-marks, among them the one described as "Agua de Kananga." For this reason the proprietor of the said trade-mark was joined as a party plaintiff with the partnership of Baxter & Co., the firm directly interested in the use and exploitation of the said trade-mark. This trade-mark is actually used by the plaintiffs to designate the ownership and origin of a certain toilet water manufactured and sold by them under the said name of "Agua de Kananga."

The plaintiffs brought this action for unfair competition under section 7 of Act No. 666 of the Philippine Commission. It is alleged that the defendant Zosimo Zuazua, for the purpose of imitating and fraudulently simulating the "Agua de Kananga" manufactured by plaintiffs, placed on the market for sale a certain toilet water under the name and denomination of "Kananga Superior" and "Kanangue", and disposed of the same in bottles with labels similar to those used by the plaintiffs for their own goods. It was further alleged that the other defendants were engaged in retailing to the public the product manufactured by the defendant Zuazua. Certain facsimiles of the labels used by the said Zuazua were also attached to the complaint.

Zuazua admitted that he had manufactured certain toilet water under the denomination of "Kananga Superior" and "Kanangue", and that he had also sold the same in bottles labeled as alleged in the complaint. As to the

bottles, it was stipulated, page 19 of the bill of exceptions, that "those used by the defendant Zuazua, as well as those used by the plaintiffs, were universally used by all persons engaged in the manufacture of toilet water, and that the fact that they were used by the defendant did not, of itself, constitute a violation of the rights of the plaintiffs, nor a fraud or deceit upon the public."

The trial court entered judgment enjoining the defendants from the further manufacture of toilet water under the trade-mark of "Kananga Superior" and "Kananga", and the selling of the same in bottles of the size and form of those introduced in evidence at the trial, labeled as aforesaid, and for costs. The said judgment was based upon the ground that the labels, words, and bottles in question, taken together, were an imitation of those used by the plaintiffs, and tended to deceive the public by making it appear that the toilet water manufactured and sold by the defendants was the same toilet water manufactured by the plaintiffs, and that the use of the said labels, words, and bottles was therefore illegal, and constituted a violation of plaintiff's rights.lawphil.net

The trial court found also, as a conclusion of law, that the grant by the Government of the Philippine Islands did not give the plaintiffs an exclusive right to the use of the word "Kananga," but to the phrase "Agua de Kananga;" that "Kananga" was the name of a well-known tree of the Philippine Islands, and held that, although the plaintiffs had a right to the exclusive use of the phrase "Agua de Kananga," it did not follow that they had an exclusive right to the use of any of the words contained in the said phrase.

The plaintiffs, as well as the defendant Zosimo Zuazua, excepted to the judgment of the trial court, upon different grounds. The defendant moved for a new trial in the Court of First Instance, upon the ground that the judgment was contrary to the weight of evidence.

The main reliance of the defendant is that the labels used on his goods differed from those used by the plaintiffs as to the drawing, color, and general appearance of the design, and he denies emphatically that he had any intention to deceive the public thereby, alleging that the people clearly distinguished the goods of the plaintiffs from those of the defendants, the former being known from the picture on the bottle as the "Payo Brand" and the latter as the "Señorita Brand."

The alleged similarity or resemblance between the labels is a question of fact which can be decided by a mere inspection of the same. After a careful comparison of the labels used by the defendant with those used by the plaintiffs, we have unanimously arrived at the conclusion that there is no identity nor even any similarity whatsoever between them, either in detail or as a whole. The difference between the two is so apparent that it can be readily noticed. We do not believe that the public could have been deceived by the appearance of the labels to the extent of taking the goods of the plaintiffs for those manufactured and sold by the defendant. We make no finding as to the bottles because they were not forwarded to this court for inspection, and, moreover, because it was stipulated by the parties that the said bottles were universally used by all manufacturers of toilet water, and that their particular use by defendant was not, therefore, an act of fraud or deceit practiced by him upon the plaintiffs or the public generally.

Section 7 of Act No. 666 provides in part as follows:

And in order that the action shall lie under this section, actual intent to deceive the public and defraud a competitor shall affirmatively appear on the part of the person sought to be made liable, but such intent may be inferred from similarity in the appearance of the goods as packed or offered for sale to those of the complaining party.

The plaintiffs have not proved, or attempted to prove, the fraudulent intent attributed to the defendant Zuazua by any means other that the alleged similarity between the labels used by him and those used by the defendant to designate his own goods. There being no such similarity between the labels, we find no reason for even inferring that the defendant had any such intention, and therefore the action brought by the plaintiffs in this case can not be maintained under the law. The judgment appealed from should be reversed in so far as it holds that such an action lies in this case.

We agree, however, with the trial court, that the ownership of the trade-mark "Agua de Kananga" did not give the plaintiffs a right to the exclusive use of the word "Kananga."

The defendant alleged in his answer that the word "Kananga" could not be used as a trade-mark because it was the name of a flower. It is stated in the judgment of the court below that the word "Kananga" represents the name of a well-known tree in the Philippines. This finding has not been disputed by the plaintiffs, who simply allege that the spelling of the said word indicates that it is foreign to the Spanish language. This, by the way, would not prove, even though it were true, that the said word was not in fact the name of a flower of the Philippine Islands, as set out in the judgment. It is apparent, therefore, that the said word could not be used exclusively as a trade-mark, any more than could the words "sugar," "tobacco," or "coffee." The law is clear and conclusive upon the subject. "A designation or part of a designation," says section 2 of Act No. 666, "which relates only to the name, quality, or description of the merchandise ... can not be the subject of a trade-mark." This provision is in conformity with the provisions of paragraph 3 of article 5 of the royal decree of the 26th of October, 1888, under which Guillermo Baxter secured the registration of his trade-mark. The said royal decree provided that the denominations generally used in commerce for the purpose of designating a class of goods could not be the subject of labels or trade-marks.

The plaintiffs allege that the defendants did not prove, or even attempt to prove, that the goods manufactured by them had anything to do with the "Kananga" flower. If the goods in question had really nothing to do with the said flower, then it was not lawful for the plaintiffs to sell them to the public under the name of "Agua de Kananga," because the people might be deceived as to the nature of the goods, taking for "Kananga" an article which, as a matter of fact, had nothing to do with the said flower. Both plaintiffs and defendant would be exactly in the same position as one who should sell goods as "coffee" or "tobacco" which were neither one nor the other. Such being the case the plaintiffs could not have maintained this action for unfair competition, because under section 9 of said Act No. 666 such action would not lie "when the trade-mark or designation of its origin, ownership, or manufacture has been used by the claimant for the purpose of deceiving the public as to the nature of the goods in which he deals, his business, profession, or occupation." The law can not and does not permit that trade-marks shall contain indications capable of deceiving the public as to the nature of the goods. This would be exactly the case if under the trade-mark of "Agua de Kananga" the plaintiffs should sell goods that had in fact nothing to do, as they say, with the "Kananga" flower. However the contention of the plaintiffs may be considered, the proof is nevertheless insufficient to show that the word "Kananga," the name of a flower, can be appropriated as the subject of a trade-mark, under the law.

The defendant prays that judgment be entered against the plaintiffs for damages incurred by reason of the preliminary injunction, still in force, issued by the trial court on the 18th day of June, 1903. In his answer the defendant estimates these damages at 800 pesos per month. He did not, however, introduce evidence in support of his allegation, and no order can be made by the court upon this matter. The foregoing disposes of the other questions raised by the parties in their brief in this court.

The judgment appealed from is hereby reversed, and another judgment entered in favor of the defendant and appellant Zosimo Zuazua, dissolving the preliminary injunction heretofore issued by the court below on the 18th of June, 1903. The finding of the court that the plaintiffs have no right to the exclusive use of the word "Kananga" is sustained. Each party shall pay its own costs. After the expiration of ten days from the date hereof let judgment be entered accordingly and the case remanded to the trial court. So ordered.

COMPAÑIA GENERAL DE TABACOS DE FILIPINAS vs. ALHAMBRA CIGAR AND CIGARETTE MANUFACTURING CO.

FACTS: It is admitted that plaintiff’s trade name as evidenced by the certificate issued under the Spanish regime, consists solely of the words “La Flor de la Isabela”. Plaintiff does not claim that the word “Isabela” has been registered by it as a trade name or that it has a title from any source conferring on it the exclusive right to use that word.

Defendant began the manufacture of cigarettes, offering them to the public in packages on the front side of each of which appeared the words “Alhambra Isabelas”. Action is brought to enjoin the defendant from using the word “Isabelas”.

The exclusive right to use this name, plaintiff claim arises from two causes: First, the contraction of the phrase “La Flor de la Isabela” into the word “Isabela” by popular expression and use; and second, the use for more than twenty years of the word “Isabela”. Judgment was for plaintiff and defendant appealed.

ISSUE: Whether defendant’s use of the word “Alhambra Isabela” is an infringement to the use of trade name.

HELD: The statute prohibits the registration of a trade name when the trade name represents the geographical place of production or origin of the products or goods to which the trade name refers, or when it is merely the name, quality or description of the merchandise with respect to which the trade name is to be used. In such cases, therefore, no trade name can exist.

The two claims of the plaintiff are identical; for, there could have been no contraction brought about by popular expression except after long lapse of time. The contraction of the phrase in to the word would create no rights, there being no registration, unless it resulted from long use.

The opinion of the plaintiff must fail. It shows that in not a single instance in the history of the plaintiff corporation, so far as is disclosed by the record, has a package of its cigarettes gone into the market, either at wholesale or retail with the word “Isabela” alone on the package as a separate or distinct word or name.

Even admitting that the word “Isabela” may have been appropriable by plaintiff as a trade name at the time it began to use it, the evidence showing that it had been exclusively appropriated by the plaintiff would have to be very strong to establish the fact of appropriation and the right to exclusive use. The law as it stands and has stood since the Royal Decree of 1888 prohibits the use of a geographical name as a trade name. The judgment appealed from is reversed.

Ana Ang vs. Toribio Teodoro G.R. No. L-48226 December 14, 1942

Facts: Respondent Toribio Teodoro has continuously used "Ang Tibay," both as a trade-mark and as a trade-name, in the manufacture and sale of slippers, shoes, and indoor baseballs since 1910. On September 29, 1915, he formally registered it as trade-mark and as trade-name on January 3, 1933.

Petitioner Ana Ang registered the same trade-mark "Ang Tibay" for pants and shirts on April 11, 1932, and established a factory for the manufacture of said articles in the year 1937.

The Court of First Instance of Manila absolved the defendant (Ms. Ang) on the grounds that the two trademarks are dissimilar and are used on different and non-competing goods; that there had been no exclusive use of the trade-mark by the plaintiff; and that there had been no fraud in the use of the said trade-mark by the defendant because the goods on which it is used are essentially different from those of the plaintiff.

The Court of Appeals reversed said judgment, directing the Director of Commerce to cancel the registration of the trade-mark "Ang Tibay" in favor of petitioner, and perpetually enjoining the latter from using said trade-mark on goods manufactured and sold by her. Thus, this case, a petition for certiorari.

Issue: Are the goods or articles or which the two trademarks are used similar or belong to the same class of merchandise?

Ruling: Yes, pants and shirts are goods closely similar to shoes and slippers. They belong to the same class of merchandise as shoes and slippers. They are closely related goods.

The Supreme Court affirmed the judgment of the Court of Appeals and added that “although two non-competing articles may be classified under to different classes by the Patent Office because they are deemed not to possess the same descriptive properties, they would, nevertheless, be held by the courts to belong to the same class if the simultaneous use on them of identical or closely similar trademarks would be likely to cause confusion as to the origin, or personal source, of the second user’s goods. They would be considered as not falling under the same class only if they are so dissimilar or so foreign to each other as to make it unlikely that the purchaser would think that the first user made the second user’s goods”.

ARCE SONS AND COMPANY, vs. SELECTA BISCUIT COMPANY, INC., ET AL G.R. No. L-14761 January 28, 1961

Facts: Ramon Arce, predecessor-in-interest of herein petitioner, started a milk business in 1933 using the name “SELECTA” as trade-name as well as trade-mark. He sold his milk products in bottles covered with caps on which the words “SELECTA FRESH MILK” were inscribed. For the span of more than 20 years, his business expanded and sold, in addition to his milk product, ice cream, sandwiches and other food products. His products were packaged in a special containers with the word ”SELECTA” written in the packaging. Several new products were eventually added to his line of products such as biscuits, bakery items, and assorted cakes and pastries. The word “SELECTA” was even written on the signboards of his business establishments and upon the vehicles that were used for the delivery of his products. Then his business was acquired by petitioner Arce Sons and Co. which eventually put a

first class restaurant aside from the manufacture of the aforementioned food products. Herein respondent on the other hand, was organized and registered as corporation under the name and style of Selecta Biscuits Co., Inc. The name Selecta was chosen by the Chinese organizers of the corporation as a translation of a Chinese word “Ching Suan.” Its business started as a biscuit factory and its products such as biscuits and crackers were specially wrapped in cellophane pouches and place inside a tin can. Such products of the respondent were sold throughout the Philippines. The respondent filed a petition with the Philippine Patent Office for the registration of the word “SELECTA” as trade-mark to be use in its bakery products. The petition was referred to an examiner for evaluation who found out that the trademark sought to be registered resembles the word “SELECTA” used by the petitioner so that I ts use by the respondent will cause confusion as to the origin of the irrespective goods. So the examiner recommended for the disapproval of the application. However, Patent Office only ordered the publication of the application.

In due time, petitioner filed an opposition to the registration on the ground that the mark “SELECTA” has been continuously used by it from the time of its organization and even prior thereto by Ramon Arce, thus the said mark has already become identified with its name and business. Petitioner also contends that the use of SELECTA by the respondents as trademark constitutes as an unfair competition with its products thus resulting in confusion in trade and that the product of the respondent might be mistaken by the public as its products.

The Director of Patents rendered a decision dismissing petitioner’s opposition stating that the registration of the trade-mark SELECTA in favour of the respondent will not cause confusion or mistake nor will deceive the purchasers as to cause damage to petitioner. Hence, this present petition for review.

Issue: Whether or not the use of the trade-mark “SELECTA” by the respondent will result confusion to the prejudice of Arce Sons and Co.

Held: Yes. Trademark is a distinctive mark of authenticity through which the merchandise of a particular producer or manufacturer may be distinguished from that of others, and its sole function is to designate distinctively the origin of the products to which it is attached.

Verily, the word “SELECTA” has been chosen by petitioner and has been inscribed on all its products to serve not only as a sign or symbol that may indicate that they are manufactured and sold by it but as a mark of authenticity that may distinguish them from the products sold and manufactured by other merchants or businessmen. The word 'SELECTA', it is true, may be an ordinary or common word in the sense that may be used or employed by any one in promoting his business or enterprise, but once adopted or coined in connection with one's business as an emblem, sign or device to characterize its products, or as a badge of authenticity, it may acquire a secondary meaning as to be exclusively associated with its products and business. In this sense, its used by another may lead to confusion in trade and cause damage to its business. And this is the situation of petitioner when it used the word 'SELECTA' as a trade-mark. In this sense, the law gives its protection and guarantees its used to the exclusion of all others. Thus, the Director of Patent committed an error in dismissing the opposition of the petitioner and in holding that the registration of the trademark “SELECTA” in favour of respondent will not cause damage to petitioner. Decision of the Director of Patent office is reversed

Kabushi Kaisha Isetan vs. lAC GR 75420, 15 November 1991

Facts: Kabushi Kaisha Isetan is a Japanese corporation, and owner of the trademark “Isetan” and the “Young leave design”. Isetann Department Store, on the other hand, is a domestic corporation, and owner of the trademark “Isetann” and “flover design.” In 1980, Kabushi Kaisha Isetan field petitions for the cancellationof the supplemental

registration of Isetann with the Philippine Patent Office. It also filed for the cancellation of the mark Isetan from the corporate name of Isetann Department Store with the SEC. Both the SEC and the Director of Patents, eventually, ruled against Kabushi Kaisha Isetan. It appealed to the intermediate Appellate Court, which denied the petition for being filed out of time.

Issue: Whether Kabushi Kaisha Isetan has the right to seek for the cancellation of the word “Isetan” from the corporate name of Isetann Department Store.

Held: No. A Fundamental principle in Trademark Law is that the actual use in commerce in the Philippines is a pre-requisite to the acquisition of ownership over a trademark or a tradename. Kabushi Kaisha Isetan has never conducted any business in the Philippines. It has never promoted its trademark or tradename in the Philippines. It has absolutely no business goodwill in the Philippines. It is unknown to Filipinos except the very few who may have noticed it while traveling abroad. It has never paid a single centavo of tax to the Philippine Government. Under the law, it has no right to the remedy it seeks. Isetann Department Store is entitled to use its trademark in the Philippines.

Asia Brewery vs. CA GR 103543, 5 July 1993;

Facts: In 1988, san Miguel Corporation filed a complaint against Asia Brewery Inc. for infringement of trademark and unfair competition on account of the latter’s Beer Pale Pilsen or Beer na Beer product which has been competing with the former’s San Miguel Pale Pilsen for a share of the local beer market. The trial court ruled in favor of Asia Brewery. The appellate court, however, over turned the trial court’s ruling. Asia Brewery appealed.

Issue: Whether Asia Brewery is guilty of unfair competition, arising from the allegedly “confusing similarity” in the general appearance of ABI’s Beer Pale Pilsen against SMC’s San Miguel Pale Pilsen.

Held: No. The dominant feature of SMC’s trademark is “San Miguel Pale Pilsen” while ABI’s is “Beer Pale Pilsen”. The word “Beer” does not appear in SMC’s product, nor the words “San Miguel” appear in ABI’s product. Neither the sound, spelling or appearance can Beer Pale Pilsen be said to be confusingly similar to San Miguel Pale Pilsen. San Miguel does not have exclusive rights to the generic or descriptive words “pale” and “pilsen”. Neither does it have the exclusive right to use 320 ml. steinie bottle with white rectangular label. The amber color is a functional feature of the beer bottle as the color prevents the transmission of light and provides the maximum protection to beer. The bottle capacity is the standard prescribed by the Metric System Board of the Department of Trade. The white label is the most economical to use and presents the strongest contrast to the bottle. San Miguel cannot claim monopoly to such features as the protection provided by law is confined to non-functional features. Further, Beer Pale Pilsen is not being passed off as San Miguel Beer Pale Pilsen. It does not result to confusion inasmuch as beer is ordered by brand, and is not taken freely from supermarket shelves. The points of dissimilarity of the products outnumber their points of similarity. The appellate court is correct in its finding that Asia Brewery does not infringe upon SMC’s trademark nor does it commit unfair competition.

Emerald Garment v CA GR 100098, 29 December 1995

Facts: HD Lee Co. owns the trademarks “Lee”, “Lee Riders” and “Lee sures” in both the supplementary and principal registers, as early as 1969 to 1973. In 1981, it filed for the cancellation for the registration of the trademark “stylistic Mr. Lee”, applied/owned by Emerald Garment Manufacturing Corp. In 1988, the Director of Patents ruled in favor of HD Lee. In 1990, the Court of Appeals affirmed the decision of the Director of Patents. Hence, the petition for review on certiorari.

Issue: Whether the trademark “stylistic Mr. Lee” is confusingly similar to HD Lee’s trademarks to warrant its cancellation in the supplemental Registry.

Held: No. Stylistic Mr. Lee is not a variation of the Lee mark. HD Lee’s variation follows the format leeriders, “ leesure”, and “leeleens” and thus does not allow the conclusion that “Stylistic Mr. Lee” is another variation under HD Lee’s mark. Although on stylistic Mr. Lee’s label, the word “lee” is prominent, the trademark should be considered as a whole and not piecemeal. Further, “Lee” is a surname. Personal names nor surnames cannot be monopolized as trademarks or tradenames as against others of the same name or surname. Furthermore, inasmuch as Emerald Garment has shown the use of stylistic Mr. Lee since 1975through sales invoice from stores and retailers; and that HD Lee was not able for transactions period to 1981; the Supreme Court allowed the use of stylistic Mr. Lee by Emerald Garment.

Qualitex Co. v. Jacobson Products Co

Facts. Qualitex Company (Petitioner) uses a special shade of green-gold for press pads that it sells to dry cleaning firms. Jacobson Products (Respondent) began to use the same color. Petitioner registered the color as a trademark and then added a trademark infringement count to an unfair competition claim in a lawsuit it had already filed against Petitioner for use of the color. The Lanham Act gives a seller or producer the exclusive right to register a trademark and to prevent competitors from using that trademark.

Issue. Can a color be a trademark?

Held. Yes. The language of the Act and the basic underlying principles of trademark law seem to include color in the realm of what can qualify as a trademark.

A color is also capable of satisfying the requirement that a person use or intend to use the mark to identify and distinguish the goods. Over time, customers may come to treat a particular color as signifying a brand to the extent that it develops a secondary meaning.

There is no objection to the use of color alone as a trademark, when that color has attained a secondary meaning and therefore identifies and distinguishes a particular brand. It is the source-distinguishing ability of a mark, and not its status as a color, that permits it to provide a financial gain to a producer and to provide a distinguishing feature for customers.

There is no objection to the use of color as a mark under the functionality doctrine of trademark law. This doctrine prevents trademark law from inhibiting legitimate competition by allowing a producer to control a useful product feature. A patent may be given for a limited time over new designs or functions, but after it expires, competitors are free to use the innovation. A product feature is functional if exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage. Sometimes color does not play an essential role in the product’s use or purpose and does not affect cost or quality, so the doctrine of functionality does not create an absolute bar to the use of color alone as a mark.

So, color can sometimes meet the basic requirements for use as a trademark. It can be a symbol that distinguishes a company’s goods and identifies their source, without serving any other significant function.

When a color serves as a trademark, other colors will be available for similar use by competitors. If colors become scarce, the functionality doctrine is available to prevent problems.

Discussion. The Lanham Act is broadly construed and so can include within its scope almost anything. The court focuses on what the color represents and how it is viewed by consumers, rather than on its status as a color.

Christian Louboutin, S.A vs Yves Saint Laurent America Holding, Inc.

FACTS Christian Louboutin, S.A. (“Louboutin”), a renowned French designer of high-fashion footwear and accessories, appealed a decision from the U.S. District Court for the Southern District of New York denying its motion to preliminarily enjoin Yves Saint Laurent America Holding, Inc. (“YSL”), a venerated French fashion institution, from selling red shoes with red soles as one color in a monochromatic-colored shoe collection launched early last year. Louboutin originally brought its action against YSL in April 2011, asserting claims under the Lanham Act for trademark infringement and counterfeiting, false designation of origin, unfair competition, and trademark dilution based on its federal registration for the color red for lacquered soles on footwear (the “Red Sole Mark” or “Mark”). In response, YSL asserted counterclaims to cancel Louboutin’s Red Sole Mark, contending that the Mark lacked distinctiveness and/or was merely ornamental or functional. After a limited and expedited discovery process, the district court denied the injunction, holding that Louboutin had not shown a likelihood of success on the merits of its claims because single-color marks in the fashion industry are inherently “functional,” and, therefore, Louboutin’s registered trademark would likely be held invalid. On appeal, the Second Circuit reversed the order of the district court insofar as it held that the fashion industry was “excepted” from the Supreme Court’s holding on the protectability of a single color and thereby denied trademark protection to Louboutin’s use of the Red Sole Mark for contrasting red lacquered soles. The Second Circuit affirmed the district court’s denial to enjoin YSL from selling monochrome red shoes with red soles.

ANALYSIS The Second Circuit first focused its review on whether YSL’s affirmative defense of functionality rendered the Red Sole Mark incapable of trademark protection because of the fundamental principle that functional features of goods may only be protected through the patent system. Citing Qualitex Co. v. Jacobson Products Co., 514 U.S. 159 (1995), the Second Circuit noted that the Supreme Court specifically forbade the implementation of a per se rule that would deny protection for the use of a single color as a trademark in a particular industry—including the fashion industry—because an analysis of functionality necessarily requires an individualized fact-based inquiry into the nature of the trademark.

Next, the Second Circuit turned its review toward whether the Red Sole Mark merited protection as a distinctive mark that had acquired secondary meaning. The appeals court was quick to quash the notion of inherent distinctiveness as applying to the Red Sole Mark, reasoning that under Qualitex, a single color, standing alone, could almost never be inherently distinctive because such marks do not automatically tell a customer that it refers to a brand, but rather, over time, customers come to treat a particular product color as signifying a unique source. In analyzing secondary meaning, the Second Circuit considered several types of evidence, including consumer surveys from both parties, as well as Louboutin’s extensive evidence of its advertising expenditures, media coverage, and worldwide sales success from over twenty years of commercial use of the lacquered red color for soles as its signature in women’s high-fashion footwear, to determine that the Red Sole Mark had indeed acquired secondary meaning. Despite finding secondary meaning, the appeals court pointed to Louboutin’s failure to show that the secondary meaning of its Red Sole Mark extended to uses in which the sole did not contrast with the upper part of a shoe (i.e., on monochromatic red shoes). For example, of the hundreds of pictures of Louboutin shoes submitted to the district court, only four were monochrome red. YSL, on the other hand, had produced evidence of its sale of monochromatic red shoes, as well as other monochromatic colored shoes since the 1970s. Based on this evidence, the Second Circuit ordered the PTO to limit Louboutin’s Red Sole Mark to only those situations in which the red lacquered outsole contrasts in color with the adjoining “upper” of the shoe, finding that the Red Sole Mark was valid and enforceable only as modified. This limitation to Louboutin’s registration also disposed of the Lanham Act claims brought by both parties in one clean sweep because the red sole on YSL’s monochrome shoes was neither a use of, nor confusingly similar to, the Red Sole Mark as modified.

CONCLUSION This case is one of the few appellate court decisions addressing whether a single color is capable of functioning as a trademark, and more specifically how fashion-industry participants may protect the distinctive features of their designs by establishing secondary meaning, even if the distinguishing feature is just one color.

LYCEUM OF THE PHILIPPINES vs. CA

FACTS: Petitioner is an educational institution duly registered with the SEC since Sept 1950. Before the case at bar, Petitioner commenced a proceeding against Lyceum of Baguio with the SEC to require it to change its corporate name and adopt a new one not similar or identical to the Petitioner. SEC granted noting that there was substantial because of the dominant word “Lyceum”. CA and SC affirmed. Petitioner filed similar complaint against other schools and obtain a favorable decision from the hearing officer. On appeal, SEC En banc reversed the decision and held that the word Lyceum have not become so identified with the petitioner and that the use thereof will cause confusion to the general public.

ISSUE:

a) Whether or not the corporate names of the private respondents are identical with or deceptively similar to that of the petitioner.

b) Whether or not the use by the petitioner of Lyceum in its corporate name has been for such length of time and with such exclusivity as to have become associated or identified with the petitioner institution in the mind of the general public (Doctrine of Secondary meaning).

RULING: NO to both. Under the corporation code, no corporate name may be allowed by the SEC if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or contrary to existing laws. The policy behind this provision is to avoid fraud upon the public, which would have the occasion to deal with the entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties of administration and supervision over corporations. True enough, the corporate names of the parties carry the word “Lyceum” but confusion and deception are precluded by the appending of geographic names. Lyceum generally refers to a school or an institution of learning and it is natural to use this word to designate an entity which is organized and operating as an educational institution.

Doctrine of Secondary meaning is a word of phrase originally incapable of exclusive appropriation, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product.

Lyceum of the Philippines has not gained exclusive use of “Lyceum” by long passage of time. The number alone of the private respondents suggests strongly that the use of Lyceum has not been attended with the exclusivity essential for the applicability of the doctrine. It may be noted that one of the respondents – Western Pangasinan Lyceum used such term 17 years before the petitioner registered with the SEC. Moreover, there may be other schools using the name but not registered with the SEC because they have not adopted the corporate form of organization.

Dermaline, Inc. vs. Myra Pharmaceuticals, Inc., GR No. 190065, August 16, 2010

Facts: Dermaline filed with the IPO an application to register the trademark “Dermaline.” Myra opposed this alleging that the trademark resembles its trademark “Dermalin” and will cause confusion, mistake and deception to the purchasing public. “Dermalin” was registered way back 1986 and was commercially used since 1977. Myra claims that despite attempts of Dermaline to differentiate its mark, the dominant feature is the term “Dermaline” to which the first 8 letters were identical to that of “Dermalin.” The pronunciation for both is also identical. Further, both have 3 syllables each with identical sound and appearance.

Issue: W/N the IPO should allow the registration of the trademark “Dermaline.” NO

Held: As Myra correctly posits, it has the right under Section 147 of R.A. No. 8293 to prevent third parties from using a trademark, or similar signs or containers for goods or services, without its consent, identical or similar to its registered trademark, where such use would result in a likelihood of confusion. In determining confusion, case law has developed two (2) tests, the Dominancy Test and the Holistic or Totality Test.

The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. Duplication or imitation is not even required; neither is it necessary that the label of the applied mark for registration should suggest an effort to imitate. Relative to the question on confusion of marks and trade names, jurisprudence noted two (2) types of confusion, viz: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other; and (2) confusion of business (source or origin confusion), where, although the goods of the parties are different, the product, the mark of which registration is applied for by one party, is such as might reasonably be assumed to originate with the registrant of an earlier product, and the public would then be deceived either into that belief or into the belief that there is some connection between the two parties, though inexistent.

Using this test, the IPO declared that both confusion of goods and service and confusion of business or of origin were apparent in both trademarks. While it is true that the two marks are presented differently, they are almost spelled in the same way, except for Dermaline’s mark which ends with the letter "E," and they are pronounced practically in the same manner in three (3) syllables, with the ending letter "E" in Dermaline’s mark pronounced silently. Thus, when an ordinary purchaser, for example, hears an advertisement of Dermaline’s applied trademark over the radio, chances are he will associate it with Myra’s. When one applies for the registration of a trademark or label which is almost the same or that very closely resembles one already used and registered by another, the application should be rejected and dismissed outright, even without any opposition on the part of the owner and user of a previously registered label or trademark.

Further, Dermaline’s stance that its product belongs to a separate and different classification from Myra’s products with the registered trademark does not eradicate the possibility of mistake on the part of the purchasing public to associate the former with the latter, especially considering that both classifications pertain to treatments for the skin.