PHILIP MORRIS et al vs. CA and FORTUNE TOBACCO CORPORATION G.R. No. 9133 !"l# 1$% 1993
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Philip Philip Morris Inc. is a corporation corporation organized organized in Virgini Virginia, a, USA and is the &e'(ste&ed o)ne& o* t&ade+a&, -MAR /II0 for cigarettes. Benson & Hedges (Canada Inc., a corporation organized in Canada and a s"s(d(a&# o* P2(l( Mo&&(s Mo& &(s 4 &e'(ste&ed &e'(ste &ed o)ne& o* t&ade+a&, t&ad e+a&, -MAR - MAR TEN0 for cigarettes. !a"ri#$es de %a"c e$nies (S'iss copan), anot2e& s"s(d(a&# o* P2(l( Mo&&(s 4 &e'(ste&ed o)ne& o* t&ade+a&, -LAR0. -LAR0 . espondent espondent (Fo&t"ne Toa55o Toa55o Co&o&at(on6, Co&o&at(on6 , a doestic doestic copan), coenced coenced the an$fact$ring and selling in the Philippines cigarettes $nder the "rand nae -MAR0. -MAR0. It also *led an application for registration of +MA- as a tradear for cigarettes "efore the Philippine Patent /0ce. Petitio etitioner ners s *led *led a Co+la(nt Co+la(nt *o& In*&(n'e+en In*&(n'e+entt o* T&ade+a&, &ade+a&, and 7a+a'es 7a+a'es "efore the %C against !ort$ne %o"acco on the clai that an infringeent of their respe respecti cti1e 1e trade tradear ars s had "een "een coit coitted ted ") espond espondent ent Corpor Corporat ation ion.. T2e# asse&ted t2at &esondent 2ad no &('2t to +an"*a5t"&e and sell 5('a&ettes ea&(n ea&(n' ' alle'ed alle'edl# l# (dent( (dent(5al 5al o& 5on*" 5on*"s(n s(n'l# 'l# s(+(la s(+(la& & t&ade+ t&ade+a&, a&, -MAR0 -MAR0 (n 5ont&avent(on o* Se5. o* t2e T&ade+a&, T&ade+a&, La). Petitioners also aintained that since their tradears are entitled to protection ") treat) o"ligation $nder A&t(5le o* t2e t2e Pa&(s a&(s Conv Conven ent( t(on on OF 8HIC 8HICH H THE THE PHIL PHILIP IPPI PINE NES S IS a MEMB MEMBER ER SIGNATOR: therefor SIGNATOR: therefore e it shall ha1e the force force and e2ect of la' $nder $nder Sec 34, Article 5VII of the Constit$tion. o
P6%I%I/768S A9UM67%S: Although they were “not doing business in the Philippines” they had the right and capacity to bring the suit since they were suing on an ISOL ISOLA ATE TED D TR TRAN ANSA SACT CTIO ION: N: the the coun countr tries ies in which which they they are are domi domici cile led d gran grantt to corp corpor orat ate e or uri urist stic ic pers person ons s o! the the "hili "hilipp ppin ines es the the right right to #rin #ring g an acti action on !or !or in!ri in!ring ngem emen ent t without need o! a license to do #usiness in those countries$
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%he) also anifested as "eing "eing registered registered o'ners of tradears +MA +MA VIIII- and +MA A %6767-; regi regist ster ered ed thei their r trade tradema mar% r%s s in thei their r resp respec ecti ti&e &e coun countr trie ies s o! orig origin in'' #y &irt &irtue ue o! the the long long and and e(tensi&e usage o! the same) these trademar%s ha&e already gained international !ame and acceptance$ %he an$fact$re an$fact$re and selling of prod$cts ") respondent respondent $nder a conf$singl conf$singl) ) siilar siilar tradear tradear +MA+MA- ha1e ca$sed ca$sed and is liel) liel) to ca$se ca$se conf$s conf$sion ion or ista istae, e, or 'o$ld 'o$ld decei1 decei1e e p$rcha p$rchaser sers s and and the p$"lic in general into "$)ing these prod$cts $nder the ipression and istaen "elief the) are "$)ing petitioner8s prod$cts.
espondent espondent on the other had alleged that it has "een a$thorized to an$fact$re and sell cigarettes "earing the tradear +MA+MA- and that t hat -MAR0 (s a 5o++on )o&d
)2(52 5annot e e;5l"s(vel# a&o&(ated. espondent also asserted that SINCE PETITIONERS ARE *not doing #usiness in the "hilippines+ co$pled ") the fact that the 7(&e5to& o* Patents 2as not den(ed t2e(& end(n' al(5at(on *o& &e'(st&at(on o* (ts t&ade+a&,
%C disissed petitioners8 coplaint rel)ing on the gro$nd that: Pet(t(one&s )e&e *o&e('n 5o&o&at(ons not do(n' "s(ness (n t2e o P2(l((nes et(t(one&s 5o"ld not e sa(d to 2ave s"=e&ed -(&&ea&ale da+a'e0 )(t2(n t2e P2(l((nes # t2e sa+e o* (ts o
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T2at Fo&t"ne Toa55o?s al(5at(on *o& &e'(st&at(on o* t&ade+a&, )as t2en end(n' e*o&e t2e P2(l((ne Patent O@5e t2e&e*o&e t2e '&ant o* &el(+(na&# (n"n5t(on )as &e+at"&e> Pet(t(one&s 2ad not s2o)n t2at t2e &od"5ts t2e# so"'2t to &ote5t *&o+ Fo&t"ne?s -MAR0 )e&e (n -a5t"al "se and ava(lale *o& 5o++e&5(al "&oses an#)2e&e (n t2e P2(l((nes0.
CA ('hile r$ling for petitioners8 on the atter of their legal capacity to sue in the Philippines !or tradear infringeent, it a0red the decision of the %C that respondent 'as not lia"le for tradear infringeent.
RULING
3. Do petitioners (foreign companies not engaged in business in the Philippines) have the right to sue for trademark infringement in the Philippines?
:ES% *o&e('n 5o&o&at(on not en'a'ed (n "s(ness (n t2e P2(l((ne +a# +a(nta(n a 5a"se o* a5t(on *o& (n*&(n'e+ent &(+a&(l# e5a"se o* Se5. 1A o* t2e T&ade+a&, La) )2en t2e le'al stand(n' to s"e (s alle'ed% )2(52 et(t(one&s 2ave done (n t2e 5ase at 2and. RECIPROCIT: REUIREMENTD A condition to a1ail of the rights and pri1ileges & their tradears in this co$ntr) (on top of their Philippine registration is that t2e(& 5o"nt&# '&ants s"stant(all# s(+(la& &('2ts and &(v(le'es to F(l((no 5(t(ens p$rs$ant to Sec. 43=A of A 7o. 3>> (%radear ?a'. I* 5o+la(nant (s a nat(onal o* a Pa&(s Convent(onad2e&(n' 5o"nt&#% (ts alle'at(on t2at (t (s s"(n' "nde& Se5. 1A )o"ld s"@5e "eca$se the reciprocal agreeent "et'een the 4 co$ntries is e"odied and s$pplied ") the Con1ention; e(n' 5ons(de&ed a&t o* t2e P2(l((ne +"n(5(al la)s% 5an e ta,en "d(5(al not(5e o* (n (n*&(n'e+ent s"(ts.
4. Are petitioners (foreign companies) that are Philippine registrants of trademarks entitled to enforce trademark rights in the Philippines?
NO. A foreign corporation a) ha1e the personalit) to *le a s$it for infringeent "$t (t +a# not ne5essa&(l# e ent(tled to &ote5t(on d"e to ABSENCE OF ACTUAL USE o* t2e e+le+ (n t2e lo5al +a&,et. REGISTRATION vs. ACTUAL USE
Actual use in commerce in the "hilippines is a pre,re-uisite to the ac-uisition o! ownership o&er a trademar% or a tradename$ Altho$gh petitioners clai that +act$al $se- of their tradears in Philippine coercial dealings is not an indispensa"le eleent $nder Article 4 of the Paris Con1ention, t2e ne5ess(t# o* a5t"al 5o++e&5(al "se o* t2e t&ade+a&, (n t2e lo5al *o&"+ (s &e"(&ed "nde& Se5s. and A o* RA 1$$. !ollo'ing $ni1ersal ac#$iescence and coit), o$r $nicipal la' on tradears regarding the re#$ireent of act$al $se in the Philippines $st s$"ordinate an international agreeent inas$ch as the apparent clash is "eing decided ") a $nicipal tri"$nal. @ithal,
the fact that international la' has "een ade part of the la' of the land does not ") an) eans ipl) the priac) of international la' o1er national la' in the $nicipal sphere. Under the do5t&(ne o* (n5o&o&at(on as applied in ost co$ntries, r$les of international la' are gi1en a standing e#$al, not s$perior, to national legislati1e enactents.
Ale(t et(t(one&s a&e 2olde&s o* 5e&t(5ate o* &e'(st&at(on (n t2e P2(l((nes of their s)"ols as aditted ") pri1ate respondent, the fact of ecl$si1e o'nership cannot "e ade to rest solel) on these doc$ents since do+(n(on ove& t&ade+a&,s (s not a5"(&ed # t2e +e&e *a5t o* &e'(st&at(on alone and does not perfect a tradear right. In other 'ords, petitioners a) ha1e the capacit) to s$e for infringeent irrespecti1e of lac of "$siness acti1it) in the Philippines on acco$nt of Section 43=A of the %radear ?a' "$t the #$estion of 'hether the) ha1e an ecl$si1e right o1er their s)"ols as to <$stif) iss$ance of the contro1ersial 'rit 'ill depend on act$al $se of their tradears in the
I ti st h usi nc o ng r uo usf o r pe t i t i o ne r st oc l a i mt ha twhe naf o r e i gnc o r po r a t i o nno tl i c e ns e dt odob us i ne s si nt hePhi l i ppi ne s fil e sac o mpl a i ntf o ri nf r i ng e me nt ,t hee nt i t yne e dno tb ea c t ua l l yus i ngi t st r a de ma r ki n c o mme r c ei nt h ePh i l i p pi ne s .uch a foreign corporation may have the personality to !le a Philippines in line 'ith Sections 4 and 4=A of the sae la'.
suit for infringement but it may not necessarily be entitled to protection due to absence of actual use of the emblem in the local market" In 1ie' of the eplicit representation of petitioners in the coplaint that the) are not engaged in "$siness in the Philippines, (t (nev(tal# *ollo)s t2at no 5on5e(vale da+a'e 5an e s"=e&ed # t2e+ not to +ent(on t2e *o&e+ost 5ons(de&at(on 2e&eto*o&e d(s5"ssed on t2e asen5e o* t2e(& &('2t to e &ote5ted.
7ISSENTING OPINIOND .$ /eliciano
Did #ortune $obacco (respondent) commit trademark infringement against petitioners by its use of the trademark “%A&'” for its cigarettes?
:ES. Fo&t"ne Toa55o?s -MAR0 (n*&(n'es "on t2e &e'(ste&ed t&ade+a&,s o* et(t(one&s.
It sho$ld "e noted that MA and ?A, 'hen read or prono$nced orall),
constit$te ide sonansin striing degree. !$rther, MA has taen o1er the doinant 'ord in MA VII and MA %67. %hese circ$stances, co$pled 'ith pri1ate respondents fail$re to eplain ho' or 'h) it chose, o$t of all the 'ords in the 6nglish lang$age, the 'ord ar to refer to its cigarettes lead to the s$"ission that there is a prima facie "asis for holding that respondent8s +MA- infringes $pon petitioners8 registered ars.
ince petitioners were not licensed to do business in the Philippines does it mean that they have not complied with the reuirement of “actual use”?
NO. T2at et(t(one&s a&e not do(n' "s(ness and a&e not l(5ensed to do "s(ness (n t2e P2(l((nes% does not # an# +eans +ean e(t2e& t2at et(t(one&s 2ave not 5o+l(ed )(t2 t2e &e"(&e+ents o* Se5t(on 1 o* R.A. No. 1$$ &elat(n' to a@dav(ts o* 5ont(n"ed "se% o& t2at et(t(one&s t&ade+a&,s a&e not (n *a5t "sed (n t&ade and 5o++e&5e (n t2e P2(l((nes.
c i g ar e t t e sbe a r i ng pe t i t i one r s 't r a de ma r ksma yi nf a c tbei mpo r t e di nt oa nd b e a v ai l a bl ef ors a l ei nt hePhi l i ppi ne st hr ough t hea c t sofi mpor t e r sordi s t r i but or s . !or
Petitioners ha1e stated that their Mar VII, Mar %en and ?ar cigarettes are in fact "ro$ght into the co$ntr) and a1aila"le for sale here in, e.g., d$t)=free shops, tho$gh not iported into or sold in the Philippines ") petitioners thesel1es. %here is no legal
re#$ireent that the foreign registrant itself an$fact$re and sell its prod$cts here. All the stat$te re#$ires is the $se in trade and coerce in the Philippines, and that can "e carried o$t ") third part) an$fact$rers operating $nder license granted ") the foreign registrant or ") the iportation and distri"$tion of *nished prod$cts ") independent iporters or traders. %he $se of the tradear in s$ch instances ") the independent third parties constit$tes $se of the foreign registrants tradears to the "ene*t of the foreign registrant.
Did petitioners su*er irreparable damage by the manufacture and sale of cigarettes under the trademark “%A&'” of respondent?
:ES. T2at et(t(one&s a&e not do(n' "s(ness and a&e not l(5ensed to do "s(ness (n t2e P2(l((nes% does not ne5essa&(l# +ean t2at et(t(one&s a&e not (n a os(t(on to s"sta(n% and do not (n *a5t s"sta(n% da+a'e t2&o"'2 t&ade+a&, (n*&(n'e+ent on t2e a&t o* a lo5al ente&&(se. S$ch tradear infringeent ") a local copan) a), for one thing, a2ect the 1ol$e of iportation into the Philippines of cigarettes "earing petitioners tradears ") independent or third part) traders.
THREE 7ISTINCT FUNCTIONS OF TRA7EMARSD 1. T2e# (nd(5ate ORIGIN o& O8NERSHIP o* t2e a&t(5les to )2(52 t2e# a&e atta52ed . T2e# GUARANTEE t2at t2ose a&t(5les 5o+e " to a 5e&ta(n STAN7AR7 OF UALIT: 3. T2e# A7/ERTISE t2e a&t(5les t2e# s#+ol(e
%he &st t)o J6 *"n5t(ons ha1e long "een recognized in tradear la' 'hich
characterizes the good'ill or "$siness rep$tation s)"olized ") a tradear as a propert) right protected ") la' . %h$s, the o'ner of a tradear is held entitled to ecl$de others fro the $se of the sae, or of a conf$singl) siilar, ar 'here conf$sion res$lts in di1ersion of trade or *nancial in<$r). At the sae tie, tradears 'arn against the iitation or faing of prod$cts and pre1ent the iposition of fra$d $pon the p$"lic. %he t2(&d o& adve&t(se+ent *"n5t(on of tradear has "ecoe of especial iportance gi1en the odern technolog) of co$nication and transportation and the gro'th of international trade. %hro$gh ad1ertiseent in the "roadcast and print edia, the
o'ner of the tradear is a"le to esta"lish a ne$s "et'een its tradear prod$cts and the p$"lic in regions 'here the o'ner does not itself an$fact$re or sell its o'n prod$cts. %hro$gh ad1ertiseent, a 'ell=esta"lished and 'ell=earned rep$tation a) "e gained in co$ntries 'here the tradear o'ner has itself no esta"lished "$siness connection. 9ood'ill a) th$s "e seen to "e $ch less closel) con*ned territoriall) than, sa), a h$ndred or *ft) )ears ago. It is no longer tr$e that a tradear of itself cannot tra1el to arets 'here there is no article to 'ear the "adge and no trader to o2er the article. Ad1ertiseent of tradears is geared to'ards the prootion of $se of the ared article and the attraction of potential "$)ers and $sers; ") *ing the identit) of the ared article in the p$"lic ind, it prepares the 'a) for gro'th in s$ch coerce 'hether the coerce "e handled ") the tradear o'ner itself or ") its licensees or independent traders. %hat a registered tradear has 1al$e in itself apart fro the trade ph)sicall) accopan)ing its $se. Petitioners did not tr) to p$t a peso *g$re on their claied daage arising
fro the erosion and possi"le e1ent$al destr$ction of the s)"olic 1al$e of their tradear. S"52 da+a'e% )2(le not eas(l# "ant(ale% (s nonet2eless &eal and e=e5t(ve. I s$"it, 'ith respect, that s$ch contin$ing daage falls clearl) 'ithin the concept of irrepara"le daage or in<$r).
