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SECOND DIVISION[G.R. No. 158589. June 27, 2006.]PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE TABAC REUNIES, S.A., ( now known as PHILIPMORRIS PRODUCTS S.A.), petitioners, vs. FORTUNE TOBACCO CORPORATION, respondent.D E C I S I O NGARCIA, J p:

Via this petition for review under Rule 45 of the Rules of Court, herein petitioners Philip Morris, Inc., Benson & Hedges (Ca nada) Inc., andFabriques de Tabac Reunies, S.A. (now Philip Morris Products S.A.) seek the reversal and setting aside of the following issuances of theCourt of Appeals (CA) in CA-G.R. CV No. 66619, to wit: ESTDIA

1. Decision dated January 21, 2003 1 affirming an earlier decision of the Regional Trial Court of Pasig City, Branch 166, in its Civil CaseNo. 47374, which dismissed the complaint for trademark infringement and damages thereat c ommenced by the petitioners againstrespondent Fortune Tobacco Corporation; and

2. Resolution dated May 30, 2003 2 denying petitioners' motion for reconsideration.

Petitioner Philip Morris, Inc., a corporation organized under the laws of t he State of Virginia, United States of America, is, per Certificate ofRegistration No. 18723 issued on April 26, 1973 by the Philippine Patents Office (PPO), the registered owner of the trademark "MARK VII"for cigarettes. Similarly, petitioner Benson & Hedges (Canada), Inc., a subsidiary of Philip Morris, Inc., is the registered owner of thetrademark "MARK TEN" for cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as can be seen in TrademarkCertificate of Registration No. 19053, another subsidiary of Philip Morris, Inc., t he Swiss company Fabriques de Tabac Reunies, S.A., is theassignee of the trademark "LARK," which was originally registered in 1964 by Ligget and Myers Tobacco Company. On the other hand,respondent Fortune Tobacco Corporation, a company organized in the Philippines, manufactures and sells cigarettes using the trademark"MARK."

The legal dispute between the parties started when the herein petitioners, on the claim that an infringement of t heir respective trademarkshad been committed, filed, on August 18, 1982, a Complaint for Infringement of Trademark and Damages against respondent Fortu neTobacco Corporation, docketed as Civil Case No. 47374 of the Regional Trial Court of Pasig, Branch 166. DCHIAS

The decision under review summarized what happened next, as follows:

In the Complaint . . . with prayer for the issuance of a preliminary injunction, [petitioners] alleged that they are foreign corporations not doingbusiness in the Philippines and are suing on an isolated transaction. . . . they averred that the countries in which they are domiciled grant . .. to corporate or juristic persons of the Philippines the privilege to bring action for infringement, . . . without need of a license to do businessin those countries. [Petitioners] likewise manifested [being registered owners of the trademark " MARK VII" and "MARK TEN" for cigarettesas evidenced by the corresponding certificates of registration and an applicant for the registration of the trademark "LARK MILDS"]. . . . .[Petitioners] claimed that they have registered the aforementioned trademarks in t heir respective countries of origin and that, by virtue ofthe long and extensive usage of the same, these trademarks have already gained international fame and acceptance. Imputing bad faith onthe part of the [ respondent], petitioners claimed that the [respondent], without any previous consent from any of the [petitioners],manufactured and sold cigarettes bearing the identical and/or confusingly similar trademark "MARK" . . . Accordingly, they argued that[respondent's] use of the trademark "MARK" in its cigarette products have caused and is likely to cause confusion or mistake, or woulddeceive purchasers and the public in general into buying these products under the impression and mistaken belief that they are buying[petitioners'] products.

Invoking the provisions of the Paris Convention for the Protection of Industrial and Intellectual Property (Paris Convention, for brevity), towhich the Philippines is a signatory . . ., [petitioners] pointed out that upon the request of an interested party, a country of the Union mayprohibit the use of a trademark which constitutes a reproduction, imitation, or translation of a mark already belonging to a person entitled tothe benefits of the said Convention. They likewise argued that, in accordance with Section 21-A in relation to Section 23 of Republic Act

166, as amended, they are entitled to relief in the form of damages . . . [ and] the issuance of a writ of preliminary injunction which should bemade permanent to enjoin perpetually the [respondent] from violating [petitioners'] right to the exclusive use of their aforem entionedtrademarks. ITAaCc

[Respondent] filed its Answer . . . denying [petitioners'] material allegations and . . . averred [ among other things] . . . that "MARK" is acommon word, which cannot particularly identify a product to be the product of the [petitioners] . . .

xxx xxx xxx

Meanwhile, after the [respondent] filed its Opposition (Records, Vo. I, p. 26), the matter of the [petitioners'] prayer for t he issuanceof preliminary injunction was negatively resolved by the court in an Order . . . dated March 28, 1973. [The incidental issue of the pran injunction would eventually be elevated to the CA and would finally be resolved by the Supreme Court in its Decision dated Jul1993 in G.R. No. 91332]. . . . .

xxx xxx xxx

After the termination of the trial on the merits . . . trial court rendered its Decision . . . dated November 3, 1999 dismissing the comcounterclaim after making a finding that the [respondent] did not commit trademark infringement against the [petitioners]. Resolvinissue of whether or not [petitioners] have capacity t o institute the instant action, the trial court opined that [petitioners'] failure to preevidence to support their allegation that their respective countries indeed grant Philippine corporations reciprocal or similar privileg. . . justifies the dismissal of the complaint . . . . It added that the testimonies of [petitioners'] witnesses . . . essentially declared tha[petitioners] are in fact doing business in the Philippines, but [petitioners] failed to establish that they are doing so in accordance w

legal requirement of first securing a license. Hence, the court declared that [petitioners] are barred from maintaining any action in courts pursuant to Section 133 of the Corporation Code.

The issue of whether or not there was infringement of the [petitioners'] trademarks by the [respondent] was likewise answered . . . negative. It expounded that "in order for a name, symbol or device to constitute a trademark, it must, either by itself or by associatdistinctly to the origin or ownership of the article t o which it is applied and be of such nature as to permit an exclusive appropriationperson". Applying such principle to the instant case, the trial court was of the opinion that the words "MARK", "TEN", "LARK" and tRoman Numerals "VII", either alone or in combination of each other do not by themselves or by association point distinctly to the oownership of the cigarettes to which they refer, s uch that the buying public could not be deceived into believing that [ respondent'scigarettes originated either from the USA, Canada, or Switzerland.

Emphasizing that the test in an infringement case is the likelihood of confusion or deception, the trial court stated t hat the general that an infringement exists if the resemblance is so close that it deceives or is likely to deceive a customer exercising ordinary caudealings and induces him to purchase the goods of one manufacturer in the belief that they are those of another. . . . . The trial c othat the [petitioners] failed to pass these tests as it neither presented witnesses or purchasers att esting that they have bought[respondent's] product believing that they bought [petitioners'] "MARK VII", "MARK TEN" or "LARK", and have also failed to introduevidence a specific magazine or periodical circulated locally, which promotes and popularizes their products in the Philippines. It, melucidated that the words consisting of the trademarks allegedly infringed by [respondent] failed to show that they have acquired a

secondary meaning as to identify them as [petitioners'] products. Hence, t he court ruled that the [petitioners] cannot avail themselvdoctrine of secondary meaning. DAEICc

As to the issue of damages, the trial court deemed it just not to award any to either party stating that, since the [petitioners] filed thin the belief that they were aggrieved by what t hey perceived to be an infringement of their trademark, no wrongful act or omissionattributed to them. . . . . 3 (Words in brackets supplied)

Maintaining to have the standing to sue in the local f orum and that respondent has committed tr ademark infringement, petitioners appeal to the CA whereat their appellate recourse was docketed as CA-G.R. CV No. 66619.

Eventually, the CA, in its Decision dated January 21, 2003, while ruling for petitioners on t he matter of their legal capacity to sue incountry for trademark infringement, nevertheless affirmed the t rial court's decision on the underlying issue of respondent's liability infringement as it found that:

. . . the appellants' [petitioners'] trademarks, i.e., "MARK VII", "MARK TEN" and "LARK", do not qualify as well-known marks entitleprotection even without the benefit of actual use in the local market and that the similarities in the trademarks in question are insufto cause deception or confusion tantamount to infringement. Consequently, as regards t he third issue, there is likewise no basis fo

award of damages prayed for by the appellants herein. 4 (Word in bracket supplied)

With their motion for reconsideration having been denied by the CA in its equally challenged Resolution of May 30, 2003, petitionenow with this Court via this petition for review essentially raising the following issues: (1) whether or not petitioners, as Philippine rof trademarks, are entitled to enforce trademark rights in this country; and ( 2) whether or not respondent has committed t rademarkinfringement against petitioners by its use of the mark "MARK" for its cigarettes, hence liable for damages.

In its Comment, 5 respondent, aside from asserting the correctness of the CA's finding on its liability for t rademark infringement andamages, also puts in issue the propriety of t he petition as it allegedly raises questions of fact.

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The petition is bereft of merit.

Dealing first with the procedural matter interposed by respondent, we find that the petition raises both questions of f act and law contrary tothe prescription against raising factual questions in a petition for review on cer tiorari filed before the Court. A question of law exists whenthe doubt or difference arises as to what the law is on a certain state of facts; there is a question of fact when the doubt or difference arisesas to the truth or falsity of alleged facts. 6

Indeed, the Court is not the proper venue to consider factual issues as it is not a trier of facts. 7 Unless the factual findings of the appellatecourt are mistaken, absurd, speculative, conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the court oforigin, 8 we will not disturb them. SCETHa

It is petitioners' posture, however, that t heir contentions should be treated as purely legal since they are assailing erroneous conclusionsdeduced from a set of undisputed facts.

Concededly, when the facts are undisputed, the question of whether or not the conclusion drawn therefrom by the CA is correct is one oflaw. 9 But, even if we consider and accept as pure questions of law the issues raised in this petition, still, the Court is not inclined to disturbthe conclusions reached by the appellate court, the established rule being that all doubts shall be resolved in favor of the correctness ofsuch conclusions. 10

Be that as it may, we shall deal with the issues tendered and determine whether the CA ruled in accordance with law and establishedjurisprudence in arriving at its assailed decision.

A "trademark" is any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof adopted and used by amanufacturer or merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt in by others. 11 Inarguably,a trademark deserves protection. For, as Mr. Justice Frankfurter observed in Mishawaka Mfg. Co. v. Kresge Co.: 12

The protection of trademarks is the law's recognition of the psychological function of symbols. If it is true that we live by symbols, it is noless true that we purchase goods by t hem. A trade-mark is a m erchandising short-cut which induces a purchaser to select what he wants,or what he has been led to believe what he wants. The owner of a mark exploits this human propensity by making every effort toimpregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the means employed, the aim is thesameto convey through the m ark, in the minds of potential customers, the desirability of the commodity upon which it appears. Oncethis is attained, the trade-mark owner has something of value. If another poaches upon the commercial magnetism of the symbol he hascreated, the owner can obtain legal redress.

It is thus understandable for petitioners to invoke in this recourse their entitlement to enforce t rademark rights in this country, specifically,the right to sue for trademark infringement in Philippine courts and be accorded protection against unauthorized use of their Philippine-registered trademarks.

In support of their contention respecting their right of action, petitioners assert that, as corporate nationals of member-countries of the ParisUnion, they can sue before Philippine courts for infringement of t rademarks, or for unfair competition, without need of obtaining registrationor a license to do business in the Philippines, and without necessity of act ually doing business in the Philippines. To petitioners, thesegrievance right and mechanism are accorded not only by Section 21-A of Republic Act (R.A.) No. 166, as amended, or the Trademark Law,but also by Article 2 of the Paris Convention for the Protection of Industrial Property, otherwise known as the Paris Convention.

In any event, petitioners point out that there is actual use of their trademarks in the Philippines as evidenced by the certificates ofregistration of their trademarks. The marks "MARK TEN" and "LARK" were registered on the basis of actual use in accordance withSections 2-A 13 and 5(a) 14 of R.A. No. 166, as amended, providing for a 2-month pre-registration use in local commerce and trade whilethe registration of "MARK VII" was on t he basis of registration in the foreign country of origin pursuant to Section 37 of the same law

wherein it is explicitly provided that prior use in commerce need not be alleged. 15

Besides, petitioners argue that their not doing business in the Philippines, if that be the case, does not mean t hat cigarettes bearing theirtrademarks are not available and sold locally. Citing Converse Rubber Corporation v. Universal Rubber Products, Inc., 16 peti tioners statethat such availability and sale may be effected through the acts of importers and distributors. ITCHSa

Finally, petitioners would press on their entitlement to protection even in the absence of actual use of trademarks in the co untry in view ofthe Philippines' adherence to the Trade Related Aspects of Intellectual Property Rights or the TRIPS Agreement and the enactment of R.A.

No. 8293, or the Intellectual Property Code (hereinafter the " IP Code"), both of which provide that the fame of a trademark m ay bethrough promotion or advertising with no explicit requirement of actual use in local trade or commerce.

Before discussing petitioners' claimed entitlement to enforce trademark rights in the Philippines, it must be emphasized that their sto sue in Philippine courts had been recognized, and rightly so, by t he CA. It ought to be pointed out, however, that the appellate cqualified its holding with a statement, following G.R. No. 91332, entitled Philip Morris, Inc., et al. v. The Court of Appeals and FortuTobacco Corporation, 17 that such right to sue does not necessarily mean protection of their registered marks in the absence of ain the Philippines.

Thus clarified, what petitioners now harp about is their entitlement to protection on the strength of registration of their trademarks iPhilippines.

As we ruled in G.R. No. 91332, 18 supra, so it must be here.

Admittedly, the registration of a trademark gives the registrant, such as petitioners, advantages denied non-registrants or ordinarylike respondent. But while petitioners enjoy the statutory presumptions arising from such registration, 19 i.e., as to the validity of thregistration, ownership and the exclusive right to use the registered marks, they may not successfully sue on the basis alone of therespective certificates of registration of trademarks. For, petitioners are still foreign corporations. As such, they ought, as a conditioavailment of the rights and privileges vis--vis their trademarks in this c ountry, to show proof that, on top of Philippine registration,country grants substantially similar rights and privileges to Filipino citizens pursuant to Section 21-A 20 of R.A. No. 166.

In Leviton Industries v. Salvador, 21 the Court further held that the aforementioned reciprocity requirement is a condition sine qua filing a suit by a foreign corporation which, unless alleged in the complaint, would justify dismissal thereof, a mere allegation that thbeing pursued under Section 21-A of R.A. No. 166 not being sufficient. In a subsequent case, 22 however, t he Court held that whecomplainant is a national of a Paris Convention- adhering country, its allegation that it is suing under said Section 21-A would suffbecause the reciprocal agreement between the two countries is embodied and supplied by the Paris Convention which, being conpart of Philippine municipal laws, can be taken judicial notice of in infringement suits. 23

As well, the fact that their respective home countries, namely, the United States, Switzerland and Canada, are, together with thePhilippines, members of the Paris Union does not automatically entitle petitioners to the protection of their trademarks in this counactual use of the marks in local commerce and trade. CaDSHE

True, the Philippines' adherence to the Paris Convention 24 effectively obligates the country to honor and enforce its provisions 25regards the protection of industrial property of f oreign nationals in this country. However, any protection accorded has to b e madethe limitations of Philippine laws. 26 Hence, despite Article 2 of the Paris Convention which substantially provides that (1) nationalsmember-countries shall have in this country rights specially provided by the Convention as are consistent with Philippine laws, andthe privileges that Philippine laws now grant or may hereafter grant to its nationals, and (2) while no domicile requirement in the cowhere protection is claimed shall be required of persons entitled to the benefits of the Union for the enjoyment of any industrial prorights, 27 foreign nationals must still observe and comply with the conditions imposed by Philippine law on its nationals.

Considering that R.A. No. 166, as amended, specifically Sections 2 28 and 2- A 29 thereof, mandates actual use of the marks and/emblems in local commerce and trade before they may be registered and ownership thereof acquired, the petitioners cannot, therdispense with the element of actual use. Their being nationals of member-countries of the Paris Union does not alter the legal situ

In Emerald Garment Mfg. Corporation v. Court of Appeals, 30 the Court reiterated its rulings in Sterling Products International, IncFarbenfabriken Bayer Aktiengesellschaft, 31 Kabushi Kaisha Isetan v. Intermediate Appellate Court, 32 and Philip Morris v. Court Appeals and Fortune Tobacco Corporation 33 on the importance of actual commercial use of a trademark in the Philippines notwitthe Paris Convention:

The provisions of the 1965 Paris Convention . . . relied upon by private respondent and Sec. 21-A of the Trademark Law were suffexpounded upon and qualified in the recent case of Philip Morris, Inc., et al. vs. Court of Appeals:

xxx xxx xxx

Following universal acquiescence and comity, our municipal law on trademarks regarding t he requirements of actual use in the Phmust subordinate an international agreement inasmuch as the apparent clash is being decided by a m unicipal tribunal. . . . . Withathat international law has been made part of the law of the land does not by any means imply the primacy of international law over

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law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of International Law are given a st andingequal, not superior, to national legislative enactments.

xxx xxx xxx

In other words, (a foreign corporation) may have the capacity to sue for infringement . . . but the question of whether they have an exclusiveright over their symbol as to justify issuance of the controversial writ will depend on actual use of their trademarks in the Philippines in linewith Sections 2 and 2-A of the same law. It is thus incongruous for petitioners to claim that when a foreign corporation not licensed to dobusiness in the Philippines files a complaint for infringement, the entity need not be actually using its trademark in commerce in thePhilippines. Such a foreign corporation may have the personality to file a suit for infringement but it may not necessarily be entitled toprotection due to absence of actual use of the emblem in the local market.

Contrary to what petitioners suggest, the registration of trademark cannot be deemed conclusive as to the actual use of such trademark in

local commerce. As it were, registration does not confer upon the registrant an absolute right to the registered mark. The certificate ofregistration merely constitutes prima facie evidence that the registrant is the owner of the registered m ark. Evidence of non-usage of themark rebuts the presumption of tr ademark ownership, 34 as what happened here when petitioners no less admitted not doing business inthis country. 35

Most importantly, we stress that registr ation in the Philippines of trademarks does not ipso facto convey an absolute right or exclusiveownership thereof. To borrow from Shangri-La International Hotel Management, Ltd. v . Development Group of Companies, Inc. 36trademark is a creation of use and, therefore, actual use is a pre- requisite to exclusive ownership; registration is only an administrativeconfirmation of the existence of the right of ownership of the mark, but does not perfect such right; actual use thereof is the perfectingingredient. 37

Petitioners' reliance on Converse Rubber Corporation 38 is quite misplaced, that case being cast in a different factual milieu. There, weruled that a foreign owner of a Philippine trademark, albeit not licensed to do, and not so engaged in, business in the Philippines, mayactually earn reputation or goodwill for its goods in the country. But unlike in the instant case, evidence of actual sales of Converse rubbershoes, such as sales invoices, receipts and the testimony of a legitimate trader, was presented in Converse. HScaCT

This Court also finds the IP Code and the TRIPS Agreement to be inapplicable, the infringement complaint herein having been filed inAugust 1982 and tried under the aegis of R.A. No. 166, as amended. The IP Code, however, took effect only on January 1, 1998 without a

provision as to its retroactivity. 39 In the same vein, the TRIPS Agreement was inexistent when the suit for infringement was filed, thePhilippines having adhered thereto only on December 16, 1994.

With the foregoing perspective, it may be stat ed right off that the registration of a trademark unaccompanied by actual use thereof in thecountry accords the registrant only the standing to sue for infringement in Philippine courts. Entitlement to protection of such trademark inthe country is entirely a different matter.

This brings us to the principal issue of infringement.

Section 22 of R.A. No. 166, as amended, defines what constitutes trademark infringement, as follows:

Sec. 22. Infringement, what constitutes.Any person who shall use, without the consent of the registrant, any reproduction,counterfeit, copy or colorable imitation of any registered mark or tradename in connection with the sale, offering for sale, or advertising ofany goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers orothers as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy of color ably imitateany such mark or tradename and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages,wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business, or services, shall be liable

to a civil action by the registrant for any or all of the remedies herein provided.

Petitioners would insist on their thesis of infringement since respondent's mark "MARK" for cigarettes is confusingly or deceptively similarwith their duly registered "MARK VII," "MARK TEN" and "LARK" marks likewise for cigarettes. To them, the word "MARK" would likelycause confusion in the trade, or deceive purchasers, particularly as to the source or origin of respondent's cigarettes.

The "likelihood of confusion" is the gravamen of trademark infringement. 40 But likelihood of confusion is a relative concept, the particular,and sometimes peculiar, circumstances of each case being determinative of its existence. Thus, in trademark infringement cases, morethan in other kinds of litigation, precedents must be evaluated in the light of each particular case. 41

In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the dominancy test and the holistic tedominancy test 43 sets sight on the similarity of the prevalent features of the competing tr ademarks that might cause confusion andeception, thus constitutes infringement. Under this norm, the question at issue turns on whether the use of the marks involved wolikely to cause confusion or mistake in the mind of the public or deceive purchasers. 44

In contrast, the holistic test 45 entails a consideration of the entirety of the marks as applied to the products, including t he labels apackaging, in determining confusing similarity. AaITCS

Upon consideration of the foregoing in the light of the peculiarity of this case, we rule against the likelihood of confusion resulting iinfringement arising from the respondent's use of the trademark "MARK" for its particular cigarette product.

For one, as rightly concluded by the CA after c omparing the trademarks involved in their entirety as they appear on the products, 4striking dissimilarities are significant enough to warn any purchaser that one is different f rom the other. Indeed, although the perce

offending word "MARK" is itself prominent in petitioners' trademarks "MARK VII" and "MARK TEN," the entire marking system shoconsidered as a whole and not dissected, because a discerning eye would focus not only on the predominant word but also on thefeatures appearing in the labels. Only then would such discerning observer draw his conclusion whether one mark would be confusimilar to the other and whether or not sufficient differences existed between the marks. 47

This said, the CA then, in finding that respondent's goods cannot be m istaken as any of the three cigarette brands of the petitionercorrectly relied on the holistic test.

But, even if the dominancy test were t o be used, as urged by the petitioners, but bearing in mind that a t rademark serves as a toolout distinctly the origin or ownership of the goods to which it is affixed, 48 the likelihood of confusion tantamount to infringement apbe farfetched. The reason for the origin and/or ownership angle is that unless the words or devices do s o point out the origin or owthe person who first adopted them cannot be injured by any appropriation or imitation of them by others, nor can the public be dec

Since the word "MARK," be it alone or in combination with the word "TEN" and the Roman numeral "VII," does not point to the origownership of the cigarettes to which they apply, the local buying public could not possibly be confused or deceived that responden"MARK" is the product of petitioners and/or originated from t he U.S.A., Canada or Switzerland. And lest it be overlooked, no actuacommercial use of petitioners' marks in local commerce was proven. There can thus be no occasion for the public in t his country,

in the first place with petitioners' marks, to be confused.

For another, a comparison of the tr ademarks as they appear on the goods is just one of the appreciable circumstances in determinlikelihood of confusion. Del Monte Corp. v. CA 50 dealt with another, where we instructed to give due regard to the "ordinary purchthus:

The question is not whether the two articles are distinguishable by their label when set side by side but whether the general confusmade by the article upon the eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result in hisconfounding it with the original. As observed in several cases, the general impression of t he ordinary purchaser, buying under the prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods is the touchstone.

When we spoke of an "ordinary purchaser," the reference was not to the "completely unwary customer" but to the "ordinarily intellibuyer" considering the type of product involved. 51

It cannot be over-emphasized that the products involved are addicting cigarettes purchased mainly by those who are already predto a certain brand. Accordingly, the ordinary buyer thereof would be all too familiar with his brand and discriminating as well. We, tconcur with the CA when it held, citing a definition found in Dy Buncio v. Tan Tiao Bok, 52 that the "ordinary purchaser" in this cas

"one accustomed to buy, and therefore t o some extent familiar with, the goods in question."

Pressing on with their contention respecting the commission of trademark infringement, petitioners finally point to Section 22 of R.A166, as amended. As argued, actual use of trademarks in local commerce is, under said section, not a requisite before an aggrievtrademark owner can restrain the use of his trademark upon goods manufactured or dealt in by another, it being sufficient that he registered the trademark or trade-name with the IP Office. In fine, petitioners submit t hat respondent is liable for infringement, havmanufactured and sold cigarettes with the trademark "MARK" which, as it were, are identical and/or confusingly similar with their dregistered trademarks "MARK VII," "MARK TEN" and "LARK".

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This Court is not persuaded.

In Mighty Corporation v. E & J Gallo Winery, 53 the Court held that the following constitute the elements of trademark infringement inaccordance not only with Section 22 of R.A. No. 166, as amended, but also Sections 2, 2-A, 9-A 54 and 20 thereof:

(a) a trademark actually used in commerce in the Philippines and registered in the principal register of the Philippine Patent Office,aASEcH

(b) is used by another person in connection with the sale, offering for sale, or advertising of any goods, business or services or inconnection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of suchgoods or services, or identity of such business; or such trademark is reproduced, counterfeited, copied or colorably imitated by anotherperson and such reproduction, counterfeit, copy or colorable imitation is applied to labels, signs, prints, packages, wrappers, receptacles oradvertisements intended to be used upon or in connection with such goods, business or services as to likely cause confusion or mistake or

to deceive purchasers,

(c) the trademark is used for identical or similar goods, and

(d) such act is done without the consent of the trademark registrant or assignee.

As already found herein, while petitioners have registered the trademarks "MARK VII," "MARK TEN" and "LARK" for cigarettes in thePhilippines, prior actual commercial use thereof had not been proven. In f act, petitioners' judicial admission of not doing business in thiscountry effectively belies any pretension to the contrary.

Likewise, we note that petitioners even failed to support their claim that their respective marks are well-known and/or have acquiredgoodwill in the Philippines so as to be entitled to protection even without actual use in this country in accordance with Article 6bis 55 of theParis Convention. As correctly found by the CA, affirming that of the trial court:

. . . t he records are bereft of evidence to establish that the appellants' [petitioners'] products are indeed well-known in the Philippines, eitherthrough actual sale of the product or through different forms of advertising. This finding is supported by the fact that appellants admit in theirComplaint that they are not doing business in the Philippines, hence, admitting that t heir products are not being sold in the local market. Welikewise see no cogent reason to disturb the trial court's f inding that the appellants failed to establish that their products are widely knownby local purchasers as "(n)o specific magazine or periodical published in the Philippines, or in other countries but circulated locally" havebeen presented by the appellants during trial. The appellants also were not able to show the length of time or the extent of the promotion oradvertisement made to popularize their products in the Philippines. 56

Last, but not least, we m ust reiterate that the issue of trademark infringement is factual, with both the trial and appellate courts havingperemptorily found allegations of infringement on the part of respondent t o be without basis. As we said time and time again, factualdeterminations of the trial court, concurred in by the CA, are final and binding on this Court. 57

For lack of convincing proof on the part of the petitioners of actual use of their registered trademarks prior to respondent's use of its markand for petitioners' failure to demonstrate confusing similarity between said trademarks, t he dismissal of their basic complaint forinfringement and the concomitant plea for damages must be affirmed. The law, the surrounding circumstances and the equities of thesituation call for this disposition.

WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed decision and resolution of the Court of Appeals are AFFIRMED.

Costs against the petitioners. AEITDH

SO ORDERED.

Puno, Sandoval-Gutierrez, Corona and Azcuna, JJ., concur.

SPECIAL FORMER SECOND DIVISION

[G.R. No. 75420. November 15, 1991.]

KABUSHI KAISHA ISETAN, also known and trading as ISETAN CO., LTD., petitioner, vs. THE INTERMEDIATE APPELLATE

COURT, THE DIRECTOR OF PATENTS, and ISETANN DEPARTMENT STORE, INC. respondents.

Agcaoili & Associates for petitioner.

Cruz, Durian, Agabin, Atienza, Alday & Tuason for private respondent.

SYLLABUS

1. REMEDIAL LAW; ACTIONS; APPEALS; STRINGENT APPLICATION OF PERIOD OF APPEAL APPLIED IN THE ABSENCCOMPELLING EQUITABLE CONSIDERATIONS FOR RELAXATION OF RULE; CASE AT BAR. The Court dismissed the petitresolution dated July 8, 1987, on the ground t hat it was filed fourteen (14) days later. However, on motion for reconsideration, whepetitioner appealed to this Court on equitable grounds stating that it has a strong and meritorious case, the petition was given duea resolution dated May 19, 1988 to enable us to examine more fully any possible denial of substantive justice. The parties were threquired to submit their memoranda. After carefully considering the records of this case, we reiterate our July 8, 1987 resolution dthe petition. There are no compelling equitable considerations which call for the application of the rule enunciated in Serrano v. CoAppeals (139 SCRA 179 [1985]) and Orata v. Intermediate Appellate Court, et al. (185 SCRA 148 [1990]) that considerations of sjustice manifest in the petition may relax the stringent application of technical rules so as not to defeat an exceptionally meritoriou

2. ID.; EVIDENCE; FINDINGS OF FACT OF THE PATENT OFFICE, UPHELD ON APPEAL.Regarding the petitioner's claimsubstantial justice which led us to give due course, we decline to disturb the rulings of the Patent Office and the Court of Appeals.is that the findings of facts of the Director of patents are conclusive on the Supreme Court, provided they are supported by substaevidence.

3. MERCANTILE LAW; TRADEMARKS; ACTUAL USE, PREREQUISITE TO ACQUISITION OF OWNERSHIP.A fundamenprinciple of Philippine Trademarks Law is that actual use in commerce in the Philippines is a pre-requisite to the acquisition of ownover a trademark or a tradename.

4. ID.; ID.; ID.; PRIOR REGISTRANT CANNOT CLAIM EXCLUSIVE USE OF TRADENAME.A prior registrant cannot claimexclusive use of the trademark unless it uses it in commerce.

5. ID.; ID.; ID.; MERE ADOPTION OF A PARTICULAR TRADENAME WITHOUT ACTUAL USE THEREOF, INSUFFICIENT; CBAR.The records show that the petitioner has never conducted any business in the Philippines. It has never promoted its tradetrademark in the Philippines. It has absolutely no business goodwill in the Philippines. It is unknown to Filipinos except the ver y fewmay have noticed it while travelling abroad. It has never paid a single centavo of tax to the Philippine government. Under the law, right to the remedy it seeks. There can be no question from the records that the petitioner has never used its tradename or trademthe Philippines. The mere origination or adoption of a particular tradename without actual use thereof in the market is insufficient any exclusive right to its use (Johnson Mfg, Co. v. Leader Filling Stations Corp. 196 N.E. 852, 291 Mass. 394), even though such a

is publicly declared, such as by use of the name in advertisements, circulars, price lists, and on signs and stationery. ( ConsumersPetroleum Co. v. Consumers Co. of Ill. 169 F 2d 153).

6. ID.; PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY; DOES NOT AUTOMATICALLY EXCLOTHER COUNTRIES FROM USING A TRADENAME USED IN ONE COUNTRY. The Paris Convention for the Protection of InProperty does not automatically exclude all countries of the world have signed it fr om using a tradename which happens to be usecountry.

D E C I S I O N

GUTIERREZ, JR., J p:

This is a petition for review on certiorari which seeks to set aside(1) the decision of t he Court of Appeals dated June 2, 1986 inSP No. 008873 entitled "Kabushi Kaisha Isetan, also known and trading as Isetan Company Limited v. Isetann Department Store, dismissing the petitioner's appeal from the decision of the Director of Patents; and (2) the Resolution dated July 11, 1986 d enyingpetitioner's motion for reconsideration.

As gathered from the records, the facts are as follows:

Petitioner Kabushi Kaisha Isetan is a foreign corporation organized and existing under the laws of Japan with business address atShinjuku, 3-Chrome, Shinjuku, Tokyo, Japan. It is the owner of t he trademark "Isetan" and the "Young Leaves Design".

The petitioner alleges that it first used the t rademark Isetan on November 5, 1936. It states that the trademark is a combination of taken from "Iseya" the first name of the rice dealer in Kondo, Tok yo in which the establishment was first located and "Tan" which wfrom "Tanji Kosuge the First". The petitioner claims to have expanded its line of business internationally from 1936 to 1974. The t r"Isetan" and "Young Leaves Design" were registered in Japan covering more than 34 classes of goods. On October 3, 1983, the p

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applied for the registration of "Isetan" and " Young Leaves Design" with the Philippine Patent Office under Permanent Serial Nos. 52422 and52423 respectively, (Rollo, p. 43)

Private respondent, Isetann Department Store, on the ot her hand, is a domestic corporation organized and existing under the laws of thePhilippines with business address at 423-430 Rizal Avenue, Sta. Cruz, Manila, Philippines. LLjur

It claims that it used the word "Isetann" as part of its corporated name and on its products particularly on shirts in Joymart DepartmentStore sometime in January 1979. The suffix "Tann" means an altar, the place of offering in Chinese and this was adopted to harmonize thecorporate name and the corporate logo of two hands in cup that symbolizes the act of offering to the Supreme Being for business blessing.

On May 30, 1980 and May 20, 1980, the private respondent registered "Isetann Department Store, Inc." and Isetann and Flower Design inthe Philippine Patent Office under SR. Reg. Nos. 4701 and 4714, respectively, as well as with the Bureau of Domestic Trade underCertificate of Registration No. 32020. (Rollo, pp. 43-44)

On November 28, 1980, the petitioner filed with the Phil. Patent Office two (2) petitions for the cancellation of Certificates of SupplementalRegistration Nos. SR-4717 and SR-4701 stating among others that:

" . . . except for the additional letter 'N' in the word "Isetan", the mark registered by the registrant is exactly the same as the trademarkISETAN owned by the petitioner and that the young leaves registered by the registrant is exactly the same as the young leaves designowned by the petitioner."

The petitioner further alleged that private respondent's act of registering a trademark which is exactly the same as its trade mark andadopting a corporate name similar to that of the petitioner were with the illegal and immoral intention of cashing in on t he long establishedgoodwill and popularity of the petitioner's reputation, thereby causing great and irreparable injury and damage to it (Rollo, p. 521). It argue dthat both the petitioner's and respondent's goods move in the same channels of trade, and ordinary people will be misled to b elieve that theproducts of the private respondent originated or emanated f rom, are associated with, or are manufactured or sold, or sponsored by thepetitioner by reason of the use of the challenged trademark.

The petitioner also invoked the Convention of Paris of March 20, 1883 for the Protection of Industrial Property of which the Philippines andJapan are both members, The petitioner stressed that the Philippines' adherence to the Paris Convention committed the government to t heprotection of trademarks belonging not only to Filipino citizens but also to t hose belonging to nationals of other member countries who may

seek protection in the Philippines. (Rollo, p. 522)

The petition was docketed as Inter Partes Cases Nos. 1460 and 1461 (Rollo, p. 514).

Meanwhile, the petitioner also filed with the Securities and Exchange Commission (SEC) a petition to cancel the mark "ISETAN" as part ofthe registered corporate name of Isetann Department Store, Inc. which petition was docketed as SEC Case No. 2051 ( Rollo, p. 524). OnMay 17, 1985, this petition was denied in a decision rendered by SEC's Hearing Officer, Atty. Joaquin C. Garaygay. prcd

On appeal, the Commission reversed the decision of the Hearing Officer on February 25, 1986. It directed the private respondent to amendits Articles of Incorporation within 30 days from f inality of the decision.

On April 15, 1986, however, respondent Isetann Department Store filed a motion for reconsideration. (Rollo, pp. 325-353). And onSeptember 10, 1987, the Commission reversed its earlier decision dated February 25, 1986 thereby affirming the decision rendered by theHearing Officer on May 17, 1985. The Commission stated that since the petitioner's trademark and tradename have never been used incommerce on the petitioner's products marketed in the Philippines, the trademark or tradename have not acquired a reputation andgoodwill deserving of protection from usurpation by local competitors. (Rollo, p. 392)

This SEC decision which denied and dismissed the petition to cancel was submitted to the Director of Patents as part of t he evidence forthe private respondent.

On January 24, 1986, the Director of Patents after notice and hearing rendered a joint decision in Inter Partes Cases Nos. 1460 and 1461,the dispositive portion of which reads:

"WHEREFORE, all the foregoing considered, this Office is constrained to hold that the herein Petitioner has not successfully made out acase of cancellation. Accordingly, Inter Partes Cases Nos. 1460 and 1461 are, as they are hereby, DISMISSED. Hence, Respondent'sCertificate of Supplemental Registration No. 4717 issued on May 20, 1980 covering the tradename 'ISETANN DEPT. STORE, INC. &

FLOWER DESIGN' are, as they are hereby ordered to remain in full force and effect for the duration of their term unless sooner oterminated by law.

The corresponding application for registration in the Principal Register of the Trademark and of t he tradename aforesaid are herebdue course.

Let the records of these cases be transmitted to the Trademark Examining Division for appropriate action in accordance with this D

On February 21, 1986, Isetan Company Limited moved for t he reconsideration of said decision but the motion was denied on Apri(Rollo, pp. 355-359).

From this adverse decision of the Director of Patents, the petitioner appealed to the Intermediate Appellate Court (now Court of Ap

On June 2, 1986, the IAC dismissed the appeal on t he ground that it was filed out of time.

The petitioner's motion for reconsideration was likewise denied in a resolution dated July 11, 1986.

Hence, this petition.

Initially, the Court dismissed the petition in a resolution dated July 8, 1987, on the ground that it was filed fourteen (14) days later. on motion for reconsideration, whereby the petitioner appealed to this Court on equitable grounds stating that it has a strong andmeritorious case, the petition was given due course in a resolution dated May 19, 1988 to enable us to examine more fully any posdenial of substantive justice. The parties were then required to submit t heir memoranda. (Rollo, pp. 2-28; Resolution, pp. 271; 453

After carefully considering the records of this case, we reiterate our July 8, 1987 resolution dismissing the petition. There are no cequitable considerations which call for the application of the rule enunciated in Serrano v. Court of Appeals (139 SCRA 179 [1985Orata v. Intermediate Appellate Court, et al. ( 185 SCRA 148 [1990]) that considerations of substantial justice manifest in the petitirelax the stringent application of technical rules so as not to defeat an exceptionally meritorious petition. llcd

There is no dispute and the petitioner does not question t he fact that the appeal was filed out of time.

Not only was the appeal filed late in the Court of Appeals, the petition for review was also filed late with us. In common parlance, tpetitioner's case is "twice dead" and may no longer be reviewed.

The Court of Appeals correctly rejected the appeal on the s ole ground of late filing when it ruled:

"Perfection of an appeal within the time provided by law is jurisdictional, and failure to observe the period is fatal.

The decision sought to be appealed is one rendered by the Philippine Patent Office, a quasi-judicial body. Consequently, under Se23(c) of the Interim Rules of Court, the appeal shall be governed by the provisions of Republic Act No. 5434, which provides in its 2;

SECTION 2. Appeals to Court of Appeals.Appeals to the Court of Appeals shall be filed within fifteen (15) days from noticeruling, award, order, decision or judgment or from t he date of its last publication, if publication is required by law for its effectivity; oa motion for reconsideration is filed within that period of fifteen (15) days, then within ten (10) days from notice or publication, wheby law, of the resolution denying the motion for reconsideration. No more than one motion for reconsideration shall be allowed anyno appeal is filed within the periods here fixed, the ruling, award, order, decision or judgment shall become final and may be execuprovided by existing law.

Attention is invited to that portion of Section 2 which states that in case a motion for reconsideration is filed, an appeal should be ften (10) days from notice of the resolution denying the motion for reconsideration."

The petitioner received a copy of the Court of Appeals' resolution denying its motion for reconsideration on July 17, 1986. It had oAugust 1, 1986 to file a petition for review with us. The present petition was posted on August 2, 1986 and received by us on Augu1986. There is no question that it was again, f iled late because the petitioner filed an ex-parte motion for admission explaining the

The decision of the Patent Office has long become final and executory. So has the Court of Appeals decision.

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Regarding the petitioner's claims of substantial justice which led us to give due course, we decline to disturb the rulings of the Patent Officeand the Court of Appeals.

A fundamental principle of Philippine Trademarks Law is that actual use in commerce in the Philippines is a pre-requisite to the acquisitionof ownership over a trademark or a tradename. cdphil

The Trademark Law, Republic Act No. 166, as amended, under which this case was heard and decided provides:

"SECTION 2. What are registrable.Trademarks, tradenames and service marks owned by persons, corporation, partnerships orassociations domiciled in the Philippines and by persons, corporations, partnerships or associations domiciled in any foreign country maybe registered in accordance with the provisions of this Act: Provided, That said trademarks, tradenames, or service marks are actually inuse in commerce and services not less than t wo months in the Philippines before the time the applications for registration are filed: Andprovided, further, That the country of which the applicant for registration is a citizen grants by law substantially similar privileges to citizens

of the Philippines, and such fact is officially certified, with a c ertified true copy of the foreign law tra nslated into the English language, by thegovernment of the foreign country to the Government of the Republic of the Philippines. (As amended by R.A. No. 865).

SECTION 2-A. Ownership of trademarks, tradenames and service marks; how acquired.Anyone who lawfully produces or deals inmerchandise of any kind or who engages in any lawful business, or who renders any lawful service in commerce, by actual use thereof inmanufacture or trade, in business, and in t he service rendered, may appropriate to his exclusive use a t rademark, a tradename, or aservice mark not so appropriated by another, to distinguish his merchandise, business or service from the merchandise, business or serviceof others. The ownership or possession of a tr ademark, tradename, service mark, heretofore or hereafter appropriated, as in this sectionprovided, shall be recognized and protected in the same manner and t o the same extent as are other property rights known to this law. (Asamended by R.A. No. 638)"

These provisions have been interpreted in Sterling Products International, Inc. v. Farbenfabriken Bayer Actiengesellschaft (27 SCRA 1214[1969]) in this way:

"A rule widely accepted and firmly entrenched because it has come down through t he years is that actual use in commerce or business is aprerequisite to the acquisition of the right of ownership over a trademark.

xxx xxx xxx

" . . . Adoption alone of a trademark would not give exclusive right thereto. Such right grows out of their actual use. Adoption is not use.One may make advertisements, issue circulars, give out price lists on certain goods; but these alone would not give exclusive right of use.For trademark is a creation of use. The underlying reason for all these is that purchasers have come to understand the mark a s indicatingthe origin of the wares. Flowing from this is the trader's right to protection in the trade he has built up and the goodwill he has accumulatedfrom use of the trademark. . . . ."

In fact, a prior r egistrant cannot claim exclusive use of the trademark unless it uses it in commerce.

We rule in Pagasa Industrial Corporation v. Court of Appeals (118 SCRA 526 [ 1982]):

"3. The Trademark law is very clear. It requires actual commercial use of the mark prior to its registration. There is no dispute thatrespondent corporation was the first registrant, yet it failed to fully substantiate its claim that it used in trade or business in the Philippinesthe subject mark; it did not present proof to invest it with exclusive, continuous adoption of t he trademark which should consist amongothers, of considerable sales since its first use. The invoices (Exhibits 7, 7-a, and 8-b) submitted by respondent which were dated way backin 1957 show that the zippers sent to the Philippines were to be used as 'samples' and 'of no commercial value'. The evidence forrespondent must be clear, definite and free f rom inconsistencies. (Sy Ching v. Gaw Lui, 44 SCRA 148-149) 'Samples' are not for sale and

therefore, the fact of exporting them; to the Philippines cannot be considered to be equivalent to t he 'use' contemplated by the law.Respondent did not expect income from such 'samples'. There were no receipts to establish sale, and no proof were presented to show thatthey were subsequently sold in the Philippines." (Pagasa Industrial Corp. v. Court of Appeals, 118 SCRA 526 [1982]; Emphasis Supplied)

The records show that the petitioner has never conducted any business in the Philippines. It has never promoted its tr adename ortrademark in the Philippines. It has absolutely no business goodwill in the Philippines. It is unknown to Filipinos except the very few whomay have noticed it while travelling abroad. It has never paid a single centavo of tax to the Philippine government. Under the law, it has noright to the remedy it seeks. LexLib

There can be no question from the r ecords that the petitioner has never used it s tradename or trademark in t he Philippines.

The petitioner's witnesses, Mr. Mayumi Takayama and Mr. Hieoya Murakami, admitted that:

1) The petitioner's company is not licensed to do business in the Philippines;

2) The petitioner's trademark is not registered under Philippine law; and

3) The petitioner's trademark is not being used on products in trade, manufacture, or business in the Philippines.

It was also established from the testimony of Atty. Villasanta, petitioner's witness, that the petitioner has never engaged in promotactivities in the Philippines to popularize its trademark because not being engaged in business in the Philippines, there is no need advertising. The claim of the petitioner that millions of dollars have been spent in advertising the petitioner's products, refers to adv

in Japan or other foreign places. No promotional activities have been undertaken in the Philippines, by the petitioner's own admiss

Any goodwill, reputation, or knowledge regarding the name Isetann is purely the work of the private respondent. Evidence was inton the extensive promotional activities of the private respondent.

It might be pertinent at t his point to stress that what is involved in this case is not so much a trademark as a tradename. Is etannDepartment Store, Inc. is the name of a store and not of products sold in various parts of the country. This case must be differenticases involving products bearing such familiar names as "Colgate", "Singer", "Toyota", or "Sony" where the products are marketedthe Philippines. There is no product with the name "Isetann" popularized with that brand name in the Philippines. Unless one goesstore called Isetann in Manila, he would never know what the name means. Similarly, until a Filipino buyer steps inside a store cal"Isetan" in Tokyo or Hongkong, that name would be completely alien to him. The records show that among Filipinos, the name canto be internationally well-known.

The rule is that the findings of fact s of the Director of Patents are conclusive on the Supreme Court, provided they are supported bsubstantial evidence. (Chua Che v. Phil. Patent Office, 13 SCRA 67 [1965]; Chung Te v. Ng Kian Giab, 18 SCRA 747 [1966]; MarvCommercial Co., Inc. v. Petra Hawpia & Co., 18 SCRA 1178 [1966]; Lim Kiah v. Kaynee, Co. 25 SCRA 485 [1968]; Kee Boc v. DirPatents, 34 SCRA 570 [1970].

The conclusions of the Director of Patents are likewise based on applicable law and jurisprudence:

"What is to be secured from unfair competition in a given territory is the t rade which one has in that particular territory. There is whbusiness is carried on where the goodwill symbolized by the trademark has immediate value; where the infringer m ay profit by infrLLphil

There is nothing new in what we now say. Plaintiff itself concedes (Brief f or Plaintiff-Appellant, p. 88) that the principle of territorialTrademark law has been recognized in the Philippines, citing Ingenohl v. Walter E. Olsen, 71 L. ed. 762. As Callmann puts it, the trademarks 'rests upon the doctrine of nationality or t erritoriality." (2 Callmann, Unfair Competition and Trademarks, 1945, ed., p. 1(Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellachaft, 27 SCRA 1214 [1969]; Emphasis supplied)

The mere origination or adoption of a particular tradename without actual use t hereof in the market is insufficient to give any excluto its use (Johnson Mfg, Co. v. Leader Filling Stations Corp. 196 N.E. 852, 291 Mass. 394), even though such adoption is publicly such as by use of the name in advertisements, circulars, price lists, and on signs and stationery. (Consumers Petroleum Co. v. CoCo. of Ill. 169 F 2d 153).

The Paris Convention for the Protection of Industrial Property does not automatically exclude all countries of the world have signed

using a tradename which happens to be used in one country. To illustrateIf a taxicab or bus company in a town in the United Kor India happens to use the tradename "Rapid Transportation", it does not necessarily follow that "Rapid" can no longer be registeUganda, Fiji, or the Philippines.

As stated by the Director of Patents

"Indeed, the Philippines is a signatory to this Treaty and, hence, we must honor our obligation thereunder on matters concerninginternationally known or well known marks. However, this Treaty provision clearly indicated the conditions which must exist beforetrademark owner can claim and be afforded rights such as the Petitioner herein seeks and those conditions are that:

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a) the mark must be internationally known or well known;

b) the subject of the right must be a trademark, not a patent or copyright or anything else;

c) the mark must be for use in the same or similar kinds of goods, and

d) the person claiming must be the owner of the mark (The Parties Convention Commentary on the Paris Convention. Article by Dr.Bogach, Director General of the World Intellectual Property Organization, Geneva, Switzerland, 1985)".

The respondent registered its trademark in 1979. It has continuously used that name in commerce. It has established a goodwill throughextensive advertising. The people who buy at Isetann Store do so because of Isetann's efforts. There is no showing that the Japanesefirm's registration in Japan or Hongkong has any influence whatsoever on the Filipino buying public. cdrep

WHEREFORE, premises considered, the petition is hereby DIS MISSED.

SO ORDERED.

Fernan, C.J., Paras and Bidin, JJ., concur.

Separate Opinion

PADILLA, J ., concurring:

It appears that on 28 November 1980, petitioner filed with the Philippine Patent Office two (2) petitions for cancellation of Certificates ofSupplemental Registration Nos. SR-4717 and SR-4701, docketed therein as Inter Partes Cases Nos. 1460 and 1461.

On 24 January 1986, the Director of Patents rendered a joint decision dismissing the petitions in the aforesaid cases.

Petitioner moved for reconsideration on 21 February 1986 but the motion was denied on 2 April 1986. LLpr

Petitioner appealed to the Intermediate Appellate Court (now Court of Appeals), t he appeal docketed therein as AC-G.R. SP NO. 08873.On 2 June 1986, the appellate court rendered a decision dismissing the appeal for having been filed out of time. It held:

"In the case at bar, appellant admits that it received on April 11, 1986, a copy of the Resolution dated April 2, 1986, denying its motion forreconsideration. Under the law, therefore, appellant had only up to April 21, 1986 within which to file its notice of appeal to this Court. Uponthese premises, it becomes all but too obvious that the notice of appeal which was filed only on May 5, 1986, was filed when the decisionsought to be appealed had already become final. The notice of appeal was in fact filed 24 days after receipt of the Resolution denyingappellant's motion for reconsideration, which period is beyond the original period of 15 days provided for under S ection 2 of Republic ActNo. 5434 and, of course, also of the 15 days provided under Batas Pambansa Bilang 129."

Petitioner moved for reconsideration but its motion was denied in the resolution of the Court of Appeals dated 11 July 1986.

Hence, the present petition for review on certiorari.

In Bello vs. Fernando, G.R. No. L-16970, 30 January 1962, 4 SCRA 135, the Court speaking thru Mr. Justice J.B.L. Reyes held:

"'The right to appeal is not a natural right nor a part of due process; it is merely a statutory privilege, and may be exercised only in themanner and in accordance with the provisions of the law (Aguila v. Navarro, 55 Phil. 898; Santiago v. Valenzuela, 78 Phil. 397). . . . ; and

compliance with the (this) period for appeal is considered absolutely indispensable for the prevention of needless delays and t o the orderlyand speedy discharge of judicial business (Altavas Conlu v. C.A., L-14027, January 29, 1960) so that if said period is not complied with, thejudgment becomes final and executory and the appellate court does not acquire jurisdiction over the appeal (Layda v. Legaspi, 38 Phil. 83;Pampolina v. Suiza, 12 Phil. 99; Caisip v. Cabangon, L-14684, Aug. 26, 1960). cdrep

"Indeed, this Court has ruled, time and again, that compliance with the reglementary period for perfecting an appeal is not merelymandatory, but jurisdictional." (Aguilar vs. Blanco, G.R. No. L-32392, 31 August 1988, 165 SCRA 180).

The perfection of an appeal within the reglementary period is not, therefore, a mere technicality but mandatory and jurisdictional. Spetitioner's appeal to the Court of Appeals from the decision of the Director of Patents was admittedly filed out of time, and there wcompelling reason given as to why the appeal was filed out of time, the appellate court acquired no jurisdiction over said appeal andecision of the Director of Patents had become final and executory. I see, therefore, no need or reason to go into t he merits of theappeal.

The decision of the Court of Appeals dismissing the petitioner's appeal should, therefore, be AFFIRMED and the present petition sDISMISSED.

FIRST DIVISION[G.R. No. L-28554. February 28, 1983.]UNNO COMMERCIAL ENTERPRISES, INCORPORATED, petitioner, vs. GENERAL MILLING CORPORATION and TIBURCIOEVALLE, in his capacity as Director of Patents, respondents.Salem & Dionisio Law Office for petitioner.

Siquion Reyna, Montecillo, Bello & Ongsiako for private respondent.SYLLABUS1. MERCANTILE LAW; TRADEMARK; RIGHT TO REGISTER IT, BASED ON OWNERSHIP.When the applicant is not the the trademark being applied for, he has no right to apply for the registration of the same. Under the Trademark Law only the ownetrademark, trade name or service mark used to distinguish his goods, business or service from the goods, business or service of oentitled to register the same. A local importer, however, may make application for the registration of a foreign trademark, trade namother mark of ownership.

2. ID.; ID.; OWNER; SCOPE UNDER THE TRADEMARK LAW.The term owner does not include the importer of the goods the trademark, trade name, service mark, or other mark of ownership, unless such importer is actually the owner thereof in the couwhich the goods are imported. Thus this Court, has on several occasions ruled that where the applicant's alleged ownership is notany notarial document and the applicant appears to be merely an importer or distributor of the merchandise covered by said tradeapplication cannot be granted.

3. ID.; ID.; DEED OF ASSIGNMENT; PROOF OF OWNERSHIP.The Director of Patents correctly found t hat ample evidencpresented that Centennial Mills, Inc. was the owner and prior user in the Philippines of the trademark "All Montana" through a locaand broker. The Deed of Assignment itself constitutes sufficient proof of its ownership of the tr ademark "All Montana, "showing thaCentennial Mills was a corporation duly organized and existing under and by virtue of the laws of the State of Oregon, U.S.A. with

place and business at Portland, Oregon, U.S.A. and the absolute and registered o wner of several trademarks for wheat flour, i.e. (White Lily, Duck, General, Swan, White Horse, Vinta, El Paro, Baker's Joy, Choice, Red Bowl, All Montana and Dollar) all of whichassigned by it to respondent General Milling Corporation.

4. ID.; ID.; OWNERSHIP NOT ACQUIRED BY REGISTRATION ALONE.Petitioner's contention that it is the owner of the mMontana'' because of its certificate of registration issued by the Director of Patents, must fail, since ownership of a trademark is noacquired by the mere fact of registration alone. Registration merely creates a prima facie presumption of the validity of the registrathe registrant's ownership of the trademark and of the exclusive right to the use thereof. Registration does not perfect a trademarkconceded itself by petitioner, evidence may be presented to overcome the presumption. Prior use by one will controvert a claim ofappropriation by subsequent users.

5. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT BY THE DIRECTOR OF PATENTS; CONCLUSIVE IF SUPPORTED BSUBSTANTIAL EVIDENCE.It is well-settled that we are precluded from making further inquiry, since the f indings of fact of the of Patents in the absence of any showing that there was grave abuse of discretion is binding on us and the findings of facts by theof Patents are deemed conclusive in the Supreme Court provided that they are supported by substantial evidence. Petitioner has fshow that the findings of fact of the Director of Patents are not substantially supported by evidence nor that any grave abuse of diswas committed.

6. MERCANTILE LAW; DIRECTOR OF PATENTS; AUTHORITY TO ORDER CANCELLATION OF A REGISTERED MARK OTRADENAME IN AN INTER PARTES CASE.Finally, the Court finds without merit petitioner's argument t hat the Director of Patcould not order the cancellation of its certificate of registration in an interference proceeding and that the question of whether or nocertificate of registration is to be cancelled should have been brought in cancellation proceedings. Under Rule 178 of the Rules of Patent Office in Trademark Cases, the Director of Patents is expressly authorized to order the cancellation of a registered m ark orname or name or other mark of ownership in an inter partes case, such as the interference proceeding at bar.

D E C I S I O N

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TEEHANKEE, J p:

The Court affirms respondent Director of Patent's decision declaring respondent General Milling Corporation as the prior user of thetrademark "All Montana" on wheat flour in the Philippines and ordering the cancellation of the certificate of registration for t he sametrademark previously issued in favor of petitioner Unno Commercial Enterprises, Incorporated, it appearing that Unno CommercialEnterprises, Inc. merely acted as exclusive distributor of All Montana wheat flour in the Philippines. Only the owner of a tr ademark, tradename or service mark may apply for its registration and an importer, broker, indentor or distributor acquires no rights to the trademark of thegoods he is dealing with in the absence of a valid t ransfer or assignment of the trade mark .

On December 11, 1962, respondent General Milling Corporation filed an application for the registration of the trademark "All Montana" to beused in the sale of wheat flour. In view of the fact, that the same trademark was previously registered in favor of petitioner UnnoCommercial Enterprises, Inc., the Chief Trademark Examiner of the Philippines Patent Office declared an interference proceeding 1between respondent corporation's application (Serial No. 9732), as Junior/Party-Applicant, and petitioner company's registration(Registration No. 9589), as Senior Party-Applicant, docketed in the Philippines Patent Office as Inter Partes Case No. 313, to determinewhich party has previously adopted and used the trademark "All Montana".

Respondent General Milling Corporation, in its application for registration, alleged that it started using the trademark "All Montana" onAugust 31, 1955 and subsequently was licensed to use the same by Centennial Mills, Inc. by virtue of a deed of assignment executed onSeptember 20, 1962. On the other hand, petitioner Unno Commercial Enterprises, Inc. argued that the same trademark had beenregistered in its favor on March 8, 1962 asserting that it started using the trademark on June 30, 1956, as indentor or broker for S.H. HuangBros. & Co., a local firm. LLpr

The Director of Patents, after hearing, ruled in favor of respondent General Milling Corporation and rendered its decision as follows:

"However, there is testimony in the record (t. s.n., pp. 11-12, Jan. 17, 1967, testimony of Jose Uy) t o the effect that, indispensable, "ALLMONTANA" wheat flour is a premium flour produced from premium wheat coming fro m the State of Montana, U.S.A. It is apparent that thetrademark is primarily geographically descriptive of the goods. It is t herefore a matter overlooked by the Trademark Examiner, and it isincumbent upon him to determine if the applicant should claim and is qualified to claim distinctiveness under Section 4(f) of the TrademarkStatute. Otherwise, it is registrable on the Supplemental Register and should thus be re gistered therein.

"WHEREFORE, the Junior Party-Applicant is adjudged prior user of the trademark ALL MONTANA, but because it is primarily

geographically descriptive, the application is herein remanded to the Chief Trademark Examiner for proper proceeding before issuance ofthe certificate of registration.

"The certificate of registration issued to the Senior Part y is ordered cancelled.

"IT IS SO ORDERED."

After its motion for reconsideration was denied, petitioner brought the instant petition seeking the reversal of the decision and praying that itbe declared the owner and prior user of the trademark "All Montana" on wheat flour.

Petitioner based its claim of ownership over the trademark in question by the fact that it acted as an indentor or broker for S. H. HuangBros. & Co., a local importer of wheat flour, offering as evidence the various shipments, documents, invoices and other correspondence ofCentennial Mills, Inc., shipping thousand of bags of wheat flour bearing the trademark "All Montana" to the Philippines. Petitioner arguedthat these documents, invoices and correspondence proved the fact that it has been using the t rademark "All Montana" as early as 1955 inthe concept of an owner and maintained that anyone, whether he is only an importer, broker or indentor can appropriate, use and own aparticular mark of its own choice although he is not the manufacturer of the goods he deals with. Relying on the provisions of Section 2-A ofthe Trademarks Law 2 (Republic Act 166), petitioner insists that "the appropriation and ownership of a particular trademark is not merely

confined to producers or manufacturers but likewise to anyone who lawfully deals in merchandise who renders any lawful service incommerce, like petitioner in the case at bar." 3

The right to register trademark is based on ownership. 4 When the applicant is not the owner of the trademark being applied for, he has noright to apply for the registration of the same. 5 Under the Trademark Law only the owner of the trademark, trade name or service markused to distinguish his goods, business or service from the goods, business or service of others is entitled to register the same. 6

The term owner does not include the importer of the goods bearing the trademark, trade name, service mark, or other mark of ownership,unless such importer is actually the owner thereof in t he country from which the goods are imported. A local importer, however, may make

application for the registration of a foreign trademark, trade name or service mark if he is duly authorized by the actual owner of thor other mark of ownership. 7

Thus, this Court, has on several occasions ruled that where the applicant's alleged ownership is not shown in any notarial documethe applicant appears to be merely an importer or distributor of the merchandise covered by said trademark, its application cannotgranted. 8

Moreover, the provision relied upon by petitioner (Sec. 2-A, Rep. Act No. 166) allows one "who lawfully produces or deals in merc. . or who engages in any lawful business or who renders any lawful service in commerce, by actual use thereof . . . (to) appropriatexclusive use a trademark, or a service mark not so appropriated by another." In t he case at bar, the evidence showed that the tra"All Montana" was owned and registered in the name of Centennial Mills, Inc. which later transferred it to respondent General MilliCorporation by way of a deed of assignment. I t is undisputed that way back in March, 1955, Centennial Mills, Inc. under the tradenWenatchee Milling Co., exported flour to the Philippines, through its distributor, herein petitioner Unno Commercial Enterprises, Incacted as indentor or broker for the firm S. H. Huang Bros. & Co. However, because of increased taxes and subsidies, Centennial Mdiscontinued shipments of flour in the Philippines and eventually sold its brands for wheat flour, including "All Montana" brand to reGeneral Milling Corporation in consideration of 1,000 shares of stock of respondent corporation with a par value of P100.00 per shtotal of P100,000.00. Respondent General Milling Corporation, since the start of the operation in 1961 of its flour mills located in LaCity, Cebu has been manufacturing and selling "All Montana" flour in the Philippines. LLpr

As against petitioner's argument that respondent failed to establish convincingly the ownership of the trademark "All Montana" by assignor Centennial Mills, Inc., the Director of Patents correctly found t hat ample evidence was presented that Centennial Mills, Inthe owner and prior user in the Philippines of the trademark "All Montana" through a local importer and broker. The Deed of Assigitself constitutes sufficient proof of its ownership of the trademark "All Montana," showing that Centennial Mills was a corporation dorganized and existing under and by virtue of the laws of the State of Oregon, U.S.A. with principal place and business at Portla ndU.S.A. and the absolute and registered owner of several trademarks for wheat flour, i.e. (Imperial, W hite Lily, Duck, General, SwaHorse, Vinta, El Paro, Baker's Joy, Choice, Red Bowl, All Montana and Dollar) all of which were assigned by it to respondent GenMilling Corporation. The deed of assignment was signed by its president, Dugald MacGregor, duly acknowledged before James Hnotary public for the State of Oregon, accompanied by a certification issued by the Secretary of State of the State of Oregon statinsaid James Hunt is a duly qualified Notary Public with full power and authority to t ake acknowledgments of all oaths and that full facredit should be given to his official acts as notary public.

The Director of Patents likewise correctly rejected petitioner's contention that in a 1954 conference in Manila the ownership and uspetitioner of the brand "All Montana" was agreed upon, on t he contrary finding that "Details of that m eeting were, however, explainDugald MacGregor, President of Centennial Mills, Inc., as the Junior Party's rebuttal witness. Mr. MacGregor confirmed holding suconference in a restaurant in Manila with representatives of the Senior Party, namely; Messrs. Jose Uy, Francisco Gonzales and SHuang, although he could not remember the name of the restaurant. He further explained that his company owned the trademark;had been using the mark in the United States; and that ownership of the mark had never been conferred upon any other companyless the Senior Party"; and "Inasmuch as it was not the owner of the t rademark, the Senior Party could not be regarded as havingadopted it, and had no right to apply for its registration. It acknowledged that it was a mere importer of flour, and a mere importer adistributor acquires no rights in the mark used on t he imported goods by the foreign exporter in the absence of an assignment of a., Trademarks used and adopted on goods manufactured or packed in a foreign country in behalf of a domestic importer, broker, oand distributor are presumed to be owned by t he manufacturer or packer, unless there is a written agreement clearly showing thatownership vests in the importer, broker, indentor or distributor."

Thus, petitioner's contention that it is the owner of the mark "All Montana" because of its c ertificate of registration issued by the DirPatents, must fail, since ownership of a trademark is not acquired by the mere fact of registration alone. 9 Registration merely creprima facie presumption of the validity of the registration, of the registrant's ownership of the t rademark and of the exclusive right tthereof. 10 Registration does not perfect a trademark right. 11 As conceded itself by petitioner, evidence may be presented to ovthe presumption. Prior use by one will controvert a claim o f legal appropriation by subsequent users. In the case at bar, the Directo

Patents found that "ample evidence was presented in the record that Centennial Mills, Inc. was the owner and prior user in the Phof the trademark 'All Montana' through a local importer and broker. Use of a trademark by a mere importer, indentor or exporter (thParty herein) inures to the benefit of the foreign manufacturer whose goods are identified by the tr ademark. The Junior Party has hestablished a continuous chain of title and, consequently, prior adoption and use" and ruled that "based on the facts established, itto conclude that the Junior Party has satisfactorily discharged the burden of proving priority of adoption and use and is ent itled toregistration." It is well-settled that we are precluded from making further inquiry, since the findings of fact of the Director of Patentsabsence of any showing that there was grave abuse of discretion is binding on us 12 and the findings of facts by the Director of Pare deemed conclusive in the Supreme Court provided that they are supported by substantial evidence. 13 Petitioner has failed to

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that the findings of fact of the Director of Patents are not substantially supported by evidence nor that any grave abuse of discretion wascommitted. LexLib

Finally, the Court finds without merit petitioner's argument that the Director of Patents could not order the cancellation of its certificate ofregistration in an interference proceeding and that the question of whether or not a certificate of registration is to be cancelled should havebeen brought in cancellation proceedings. Under Rule 178 of the Rules of the Patent Office in Trademark Cases, 14 the Director of Patentsis expressly authorized to order the cancellation of a registered mark or trade name or name or other mark of ownership in an inter partescase, such as the interference proceeding at bar. 15

WHEREFORE, the appealed decision is hereby affirmed. No costs.

Melencio-Herrera, Plana, Vazquez, Relova and Gutierrez, Jr., JJ., concur.

FIRST DIVISION[G.R. No. L-23035. July 31, 1975.]PHILIPPINE NUT INDUSTRY, INC., petitioner, vs. STANDARD BRANDS INCORPORATED and TIBURCIO S. EVALLE, as Director ofPatents, respondents.Perfecta E. De Vera for petitioner.Paredes, Poblador, Cruz & Nazareno for private respondent.

Solicitor General Arturo A. Alafriz, Acting Assistant Solicitor General Isidro C. Borromeo and Solicitor Francisco J. Bautista for respondentDirector.

SYNOPSIS

Challenged in this petition for review is the decision of respondent Director of Patents which ordered the cancellation of petitioner'scertificate of registration for the t rademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," upon complaint of private respondent, owner ofthe trademark "PLANTERS COCKTAIL PEANUTS." The Director of Patents found t hat in the labels using the two trademarks in question,the dominant part is the word "PLANTERS", displayed "in a very similar manner" so much so that "as to appearance and generalimpression," there is "a very confusing similarity" and concluded that petitioner "was not entitled to register the mark at the time of its filingthe application for registration" as private respondent would be damaged by such registration.

On petition for review, the Supreme Court affirmed t he decision of the Director of Patents with costs against petitioner.

SYLLABUS

1. PATENTS; TRADEMARK; TEST TO DETERMINE INFRINGEMENT.In cases involving infringement of trademarks, it has beenheld that there is infringement when the use of the mark involved would be likely to cause confusion or mistake in the mind of the public orto deceive purchasers as to the origin or source of the commodity; that whether or not a trademark causes confusion and likely t o deceivethe public is a question of fact which is to be resolved by applying the "test of dominancy," meaning, if the competing trademark containsthe main or essential or dominant features of another by reason of which confusion and deception are likely to resu lt, then infringementtakes place; and that duplication or imitation is not necessary, a similarity of the dominant features of the trademark would be sufficient.

2. ID.; ID.; ID.; WHAT CONSTITUTES A DOMINANT FEATURE OF A LABEL.An ordinary word like PLANTERS may be consideredas the dominant and striking mark of a label where it is used not merely to describe the nature of the product, but to project the source ororigin thereof, and it is so printed across the label in bold letters that it easily attracts and catches the eye of the ordinary consumer and it isthat word and none other that sticks in his mind when he thinks of the product.

3. ID.; ID.; ID.; LABELS AS THE BEST EVIDENCE.In cases involving infringement of trademarks, t here can be no better evidence

as to what dominant feature of a label and as to whether there is a confusing similarity in the contesting trademarks than th e labelsthemselves. A visual and graphic presentation of the labels will constitute the best argument for one or the oth er.

4. ID.; ID.; ID.; ADOPTING A DISTINCTIVE OR DOMINANT MARK OF ANOTHER'S TRADEMARK.Admittedly, no producer ormanufacturer may have a monopoly of any color scheme or form of words in a label. But when a competitor adopts a distinctive ordominant mark or feature of another's t rademark and with it makes use of t he same color ensemble, employs similar words written in astyle, type and size of lettering almost identical with those f ound in the other trademark, the intent to pass to the public his product as that ofthe other is quite obvious.

5. ID.; ID.; ID.; DOCTRINE OF SECONDARY MEANING.A word or phrase originally incapable of exclusive appropriation wreference to an article on the market because geographically or otherwise descriptive, might nevertheless have been used so longexclusively by one producer with reference to his article that, in t hat trade and to that branch of the purchasing public, the word or has come to mean that the article was his product. Thus, the word "Selecta" which is a common ordinary term in the sense t hat it mused or employed by any one in promoting his business or enterprise, but which once adopted or coined in connection with one's as an emblem, sign or device or characterize its product or as a badge of authenticity may acquire a secondary meaning as to beexclusively associated with its products and business, so that its use by another may lead to confusion in trade cause damage t o ibusiness.

6. ID.; ID.; ID.; ID.; CASE AT BAR.The doctrine of secondary meaning is applicable to the case at bar it appearing that the tPLANTERS has been used by and closely associated with respondent for its canned salted peanuts since 1938 and said terms habecome a distinctive mark or symbol insofar as salted peanuts are concerned, and by priority of use, respondent has acquired apreferential right to its adoption as its tr ademark warranting protection against its usurpation by another. Ubi Jus ibi remedium. W his a right there is a remedy.

7. ID.; ID.; ID.; ABANDONMENT; NON-USE OF TRADEMARK DUE TO LEGAL RESTRICTION NOT CONSIDERED ASABANDONMENT.The non-use of a t rademark or an article of merchandise due to legal r estrictions or circumstances beyond ocontrol is not to be considered as an abandonment. Said rule was correctly applied to the case at bar where the use of the tr ademinterrupted during the Japanese occupation and in fact was discontinued when the importation of t he product covered by the tr adeprohibited by the Central Bank Regulations.

8. ID.; ID.; ID.; ONE MAY NOT BE ALLOWED TO A FREE RIDE ON SELLING POWER OF PRODUCTS OF ANOTHER.Amust not be allowed to get a free ride on the reputation and selling power of t he products of another, for a self-respecting person oreputable business concern does not remain in the shelter of another's popularity and goodwill.

D E C I S I O N

MUOZ PALMA, J p:

Challenged in this petition for review is the decision of respondent Director of Patents which orders the cancellation of Certificate oRegistration No. SR-416 issued in favor of herein petitioner Philippine Nut Industry, Inc. (hereinafter called Philippine Nut) for the t

"PHILIPPINE PLANTERS CORDIAL PEANUTS," upon complaint of Standard Brands Inc. (h ereinafter to be called Standard Bran

The records of the case show the f ollowing incidents:

Philippine Nut, a domestic corporation, obtained from the Patent Office on August 10, 1961, Certificate of Registration No. SR-416the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," the label used on its product of salted peanuts.

On May 14, 1962, Standard Brands a foreign corporation, 1 filed with the Director of Patents Inter Part es Case No. 268 asking for cancellation of Philippine Nut's certificate of registration on the ground that "the registrant was not entitled to register the mark at thits application for registration thereof" for the reason that it (Standard Brands) is the owner of the trademark "PLANTERS COCKTAPEANUTS" covered by Certificate of Registration No. SR-172, issued by the Patent Office on July 28, 1958. Standard Brands allepetition that Philippine Nut's trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS" closely resembles and is confusingly simitrademark "PLANTERS COCKTAIL PEANUTS" used also on salted peanuts, and that the registration of the former is likely to decbuying public and cause damage to it.

On June 1, 1962, Philippine Nut filed its answer invoking the special defense that its registered label is not confusingly similar to thStandard Brands