Updates on Intellectual Property Law (Part I)

By Atty. Juris Bernadette M. Tomboc

This contribution contains updates on topics in Intellectual Property Law in a question and answer format. The author is grateful to Fr. Ranhilio C. Aquino, Ph.D., J.D., Dean of the San Beda Graduate School of Law, for providing the questions and hypothetical cases that serve as vehicle for the discussions.

1. Criss-cross, a motor company, produces a highly efficient motor that runs on ethanol. It obtains patent for this motor in the United States. Ramiro, a Filipino living in San Francisco, bought one of these motors and had it shipped to the Philippines. A local Philippine motor corporation, Tipid Ka Corp., offered to buy the motor for a hefty sum. Would it be legal for Ramiro to sell the motor?

ANSWER: No. Section 71 (a) of Republic Act No. 8293 confers upon the owner of a product patent the exclusive right “to restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing that product.” There is a possibility of infringement considering that the potential buyer is engaged in a competing business.

Selling covers transactions for the transfer, against a price, of a patented product. It includes acts of selling without making, for instance, by a person who purchases and resells a patented product, or by a person who imports it. Importing covers the introduction of the patented product into the country where protection is conferred even if done for non-commercial purposes or free of cost (IPRS 2004).

In some jurisdictions in the United States it has been held that the importation amounts to infringement of a patent only when the person deals with the patented invention in the course of trade or for purposes of profit. In the United States, importing a patented product has not been deemed alone an infringement but any subsequent sale or use of the product could infringe (IPRS 2004).

References:

IPRS (2004)
http://www.iprsonline.org/unctadictsd/docs/
RB2.5_Patents_2.5.6_update.pdf

Olsen v. Lambert (G.R. 15745, January 11, 1922)
http://www.lawphil.net/judjuris/juri1922/jan1922/gr_l-15745_1922.html

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

2. A prophylactic drug for dengue fever was developed by a company in the United Kingdom after years of intensive research. It has been used successfully in several African countries, but the company has not yet made the drug available in the Philippines, since it does not consider the Philippines as a promising market. What may the Department of Health do to make the drug available?

ANSWER: If the drug has been patented in the Philippines, the Department of Health may petition the Intellectual Property Office (IPO) to issue a compulsory license over the drug for dengue. Section 93.2 of Republic Act No. 8293 provides that the IPO may grant a license to exploit a patented invention, even without the agreement of the patent owner, in favor of any person who has shown his capability to exploit the invention “where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the Government so requires” subject to conditions including prior negotiation for voluntary licensing and payment of adequate remuneration to the patent owner.

However, the IPO cannot issue a compulsory license if the drug has not yet been patented in the Philippines. The problem was partially resolved on August 30, 2003 when the General Council on the TRIPS Agreement decided to allow generic copies of drugs made under compulsory licenses to be exported to countries that lack production capacity. However, the supplying country must first issue a compulsory license to export a generic copy of a medicine that is patented in that country.

Cases:

Barry John Price v. United Laboratories (G.R. No. L-82542, September 29, 1988)
http://www.lawphil.net/judjuris/
juri1988/sep1988/gr_82542_1988.html

Smith Kline v. Court of Appeals (G.R. No. 121267, October 23, 2001)
http://www.supremecourt.gov.ph/jurisprudence/2001/
oct2001/121267.htm

References:

Compulsory Licensing of Pharmaceuticals and TRIPS
http://www.wto.org/english/tratop_e/
trips_e/public_health_faq_e.htm

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

The Economic Times (India Times)
http://economictimes.indiatimes.com/
articleshow/1273522.cms

The Hindu
http://www.hindu.com/thehindu/
holnus/002200510250310.htm

Wikipedia
http://en.wikipedia.org/wiki/Compulsory_licensing

3. Sebastian discovered a process of cubing bagoong. Since his discovery, he has exhibited the product, talked about it on television shows and distributed the same to friends without applying for patent protection. As a result, he was barred from applying for patent registration. He has, however, continued with cubing bagoong and using it in his chain of restaurants all throughout Cagayan and Isabela. Knorr Corporation currently holds the patent to process. It brought suit against Sebastian for damages and prayed for injunction? What will the result be? What would happen if Sebastian decides to sell his entire business?

ANSWER: Sebastian has the right to continue using the process of cubing bagoong that he discovered since he may be considered as a prior user. Section 73 of Republic Act No. 8293 provides that “any prior user, who, in good faith was using the invention or has undertaken serious preparations to use the invention in his enterprise or business, before the filing date or priority date of the application on which a paten is granted, shall have the right to continue the use thereof as envisaged in such preparations within the territory where the patent produces effect.”

As explained in by Karriel (1996) in an article entitled “Prior User’s Rights in a First-to-Invent Patent System: Why Not?” –

“Being "first," however, does not automatically entitle an inventor to a patent. In certain instances a subsequent independent inventor may receive a patent. In other instances, the first inventor may receive the patent after a subsequent independent inventor has already commercially used, or taken substantial steps to commercially use, the invention before the filing date of the first inventor/patentee. It is in these situations that the concept of prior user rights is relevant. These rights would provide a limited defense for any party who independently develops or uses the subsequently patented invention, in good faith, before the patentee's filing date, who continues such development or use after the patent issues, and who is sued by the patentee for infringement. In this situation, the party (the prior user) could claim a prior user right and legally continue to exploit the invention in a manner that normally would constitute infringement.

Prior user rights would not be a reward, certainly not in the sense that a patent is a reward granting its holder exclusive rights to the invention. Rather, they would merely ensure that the pre-filing status quo between the patentee and the prior user is maintained, and allow, under restricted circumstances, continuation of a domestic commercial enterprise. This allowance recognizes and adheres to a traditional notion of economic justice that those who exercise diligence and hard work should be able to reap the rewards of their efforts. The conduct most Americans praise in the marketplace is that which is productive. Prior user rights would safeguard productivity by allowing prior users to use their inventions and profit from their efforts.”

The right of Sebastian as prior user over the process of cubing bagoong may be sold together with his entire business. Under Section 73.2 of Republic Act No. 8293, the right of a prior user may only be transferred or assigned together with his enterprise or business, or with that part of his enterprise or business in which the use or preparations for use have been made (Section 40, Republic Act No. 165a).

References:

Harriel, K. (1996). Prior User’s Rights in a First-to-Invent Patent System: Why Not? http://72.14.203.104/search?q=cache:rZRuCvnT8ugJ:www.idea.piercelaw.edu/
articles/36/36_3/12.Harriel.pdf+prior+user&hl=en

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

4. Pfizer Laboratories licenses Pascual Laboratories to manufacture the drug-cocktail used by AIDS patients. The licensing agreement stipulates on the price at which Pascual may sell the drugs. Is the stipulation valid? Can Pfizer license Pharma at the same time to manufacture and sell the drug? Is arbitration compulsory in case of a dispute?

ANSWER: The stipulation on the price at which Pascual is to sell the drugs is invalid. Section 87.1 of Republic Act No. 8293 prohibits the inclusion of a provision in a voluntary licensing agreement “pursuant to which the licensor reserves the right to fix the sale or resale prices of the products manufactured on the basis of the license” and that the same “shall be deemed prima facie to have an adverse effect on competition and trade.”

Pfizer can license Pharma at the same time to manufacture and sell the drug if the same is not prohibited by the terms of the former’s voluntary license agreement with Pascual.

Submission of disputes to arbitration is not a mandatory provision in technology transfer arrangements. However, Section 88.3 of Republic Act No. 8293, provides that “[i]n the event the technology transfer arrangement shall provide for arbitration, the Procedure of Arbitration of the Arbitration Law of the Philippines or the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) or the Rules on Conciliation and Arbitration of the International Chamber of Commerce (ICC) shall apply and the venue of arbitration shall be the Philippines or any neutral country.”

References:

CPTech Statement on Pharmacia Voluntary License for Delavirden
http://lists.essential.org/pipermail/ip-health/2003-January/004130.html

Kaisernetwork.org
http://www.kaisernetwork.org/daily_reports/
rep_index.cfm?hint=1&DR_ID=24507

Philippine Intellectual Property Office
http://ipophil.gov.ph/page_details.asp?sr=82

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

5. “Dreamworks”, an American studio, produces “Moonbeams”, an action-thriller that was released in the United States but not in the Philippines. Candy, a Filipino overseas contract worker, brought home three copies of the DVD version of “Moonbeams”. She kept one copy, gave the second copy to her brother, and rented out the third copy to her friends. Was there any violation of law?

ANSWER: Yes, renting out of the DVD constitutes a violation of the law. Republic Act No. 8293 provides that the owner of the copyright or economic rights shall have the exclusive right to carry out, authorize or prevent “[r]ental of the original or a copy or an audiovisual or cinematographic work, a work embodied in a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental.”

Transfer of ownership of the second copy of the DVD does not constitute a violation of the copyright. Private use of a copyrighted work likewise does not constitute infringement. Section 184 (2) of Republic Act No. 8293 provides that “[t]he recitation or performance of a work; once it has lawfully been made accessible to the public, if done privately and free of charge or if made strictly for a charitable or religious institution or society” shall not constitute infringement of copyright.

Reference:

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

6. Gary Valenciano authorized ABS-CBN television network to record his telecast live concert at the Araneta coliseum. Two months later, upon popular demand and with the promise of a high rating for the television channel, ABS-CBN once more airs the same concert on prime time but without prior authority from Gary Valenciano. Was ABS-CBN’s act legal? May Gary Valenciano successfully prosecute a claim?

ANSWER: No. Gary Valenciano will have no further rights in relation to the re-broadcasting (or reproduction for the same purpose) of his live telecast performance after he has given permission for its recording, unless he made an express limitation on use at the time of recording. An exception, however, would be the use of the recording as a soundtrack for a film to which the performer’s consent must first be obtained.

Article 7 of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (or the “Rome Convention) provides minimum protection for performers as follows:

“1. The protection provided for performers by this Convention shall include the possibility of preventing:

(a) the broadcasting and the communication to the public, without their consent, of their performance, except where the performance used in the broadcasting or the public communication is itself already a broadcast performance or is made from a fixation;

(b) the fixation, without their consent, of their unfixed performance;

(c) the reproduction, without their consent, of a fixation of their performance:

(i) if the original fixation itself was made without their consent;

(ii) if the reproduction is made for purposes different from those for which the performers gave their consent;

(iii) if the original fixation was made in accordance with the provisions of Article 15, and the reproduction is made for purposes different from those referred to in those provisions.

2.

(1) If broadcasting was consented to by the performers, it shall be a matter for the domestic law of the Contracting State where protection is claimed to regulate the protection against re-broadcasting, fixation for broadcasting purposes and the reproduction of such fixation for broadcasting purposes.

(2) The terms and conditions governing the use by broadcasting organisations of fixations made for broadcasting purposes shall be determined in accordance with the domestic law of the Contracting State where protection is claimed.

(3) However, the domestic law referred to in sub–paragraphs (1) and (2) of this paragraph shall not operate to deprive performers of the ability to control, by contract, their relations with broadcasting organisations.”

References:

International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome Convention)
http://www.wipo.int/treaties/en/
ip/rome/trtdocs_wo024.html

Performer’s Rights
http://www.artslaw.com.au/
LegalInformation/PerformersRights.asp

Queensland Government (2005). Department of Education Manual.
http://education.qld.gov.au/corporate/doem/legalleg/ll-04000/copyright/1_18_performers_rights.html

7. Regine Velasquez’s scheduled on GMA 7 television network promised to be a special performance. You therefore connected a recording device to your television set and recorded the entire performance. You produced several copies of your recording and sent them to your relatives in the United States. Did you commit any violation of intellectual property law?

ANSWER: Yes, the reproduction and distribution of an unauthorized fixation of a performance constitutes a violation of the performer’s rights under Article 7 of the Rome Convention. The use of a recording of a broadcast made in domestic premises must be solely for private and domestic use for viewing at a more convenient time.

References:

Intellectual Property (UK)
http://www.intellectual-property.gov.uk/std/faq/copyright/ex_private_use.htm

Intellectual Property and Copyright in the Digital Environment
http://www.caret.cam.ac.uk/copyright/Page157.html

8. Judge Bernardo Ponferrada was commissioned by the Philippine Judicial Academy to write a manual for mediators. He was paid the amount of Php 250,000.00 for writing the manual. The Academy published the manual but did not acknowledge Judge Ponferrada as author. Who owns copyright? May Judge Ponferrada insist that he be acknowledged as the author of the manual?

ANSWER: Judge Ponferrada as the owner of the copyright has the right to be acknowledged as the author of his work. Section 148.4 of Republic Act No. 8293 provides that in case of a work commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary.

9. To secure a loan obtained at Metrobank, Justice Cardozo mortgaged his copyright. Is this possible?

ANSWER: Yes, Section 180 of Republic Act No. 8293 provides that a copyright may be assigned in whole or in part. Within the scope of the assignment, the assignee shall be entitled to all the rights and remedies that the assignor had with respect to the copyright.

References:
Assign or License: A Choice for Writers
http://www.alcs.co.uk/copy/main.asp?tablename=copy_assign

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

10. A Cebuano couple is engaged in the garments industry in Manila. Their shop is popular and they designed to register “Si-Nina” (the Cebuano word for “clothes” is “sinina”) as their mark. May this be allowed?

ANSWER: The use of “Si-nina” as the trademark for their product may not be allowed since it the word is commonly used to designate garments and may not be appropriated by anyone to his or her own exclusive use. Section 123 (h) of Republic Act No. 8293 provides that a mark cannot be registered if it consists exclusively of signs that are generic for the goods or services that they seek to identify.

References:

East Pacific v. Director of Patent. G. R. No. L-14377 [December 29, 1960.]
http://www.lawphil.net/judjuris/
juri1960/dec1960/gr_l-14377_1960.html

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

11. Would it be correct for the Intellectual Property Office to allow registration of the name Yamaha for tool kits that are locally produced by a Philippine tool manufacturer?

ANSWER: No. Section 123 (d) of Republic Act No. 8293 provides that a mark may not be registered if it is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of: (a) the same goods or services; (b) closely related goods or services; of (c) if it nearly resembles such a mark as to be likely to deceive or cause confusion. Further, Section 123 (g) provides that a mark may not be registered if it is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services.

Yamaha is an internationally known mark covering a whole range of consumer electronics, automobiles, motorcycles, and marine products. Yamaha’s products and services include musical instruments, music production, professional audio, consumer audio and video, computer peripherals, semiconductors, and software. Its marine products include powerboats, marine engines, snow mobiles, racing karts, snow throwers.

Considering that nature of Yamaha’s products, the company would also be likely selling tool kits separately or as accessories to its consumer electronics, automobiles, motorcycles and marine products. Thus, the registration of the name Yamaha for tool kits manufactured by a local too manufacture is likely to mislead, deceive, or cause confusion as to their nature, quality, characteristics or geographical origin.

References:

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

Welcome to the World of Yamaha!
http://www.yamaha.com/

Yamaha Global Gateway
http://www.global.yamaha.com/

12. You are drawn to a boutique that has rows of perfume bottles and boxes that look exactly like Tommy Hilfiger products. However, when you examined them closer, the bottles and the boxes read “Our version of TOMMY HILFIGER.” Was there any violation?

ANSWER: Yes. In cases involving infringement of trademarks, it has been held that there is infringement when the use of the mark involved would likely cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source of the commodity (Philippine Nut Industry v. Standard Brands G.R. L-23035 [July 31, 1975]). Section 155 of Republic Act No. 8293 provides, viz.:

“Remedies: Infringement. – Any person who shall, without the consent of the owner of the registered mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection in connection with the sale, offering for sale, distribution, advertising or any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth xxx”

Whether or not a trademark causes confusion and likely to deceive the public is a question of fact which is to be resolved by applying the "test of dominancy" meaning if the competing trademark contains the main or essential or dominant features of another by reason of which confusion and deception are likely to result, then infringement there is infringement. Duplication or imitation is not necessary. A similarity of the dominant features of the trademark would be sufficient. (Philippine Nut Industry v. Standard Brands G.R. L-23035 [July 31, 1975])

For example, an ordinary word like PLANTERS may be considered as the dominant and striking mark of a label where it is used not merely to describe the nature of the product but the source thereof, it is so printed across the label in bold letters that it easily catches the eye of the ordinary consumer, and it is that word and none other that sticks in his mind when he thinks of the product (Philippine Nut Industry v. Standard Brands G.R. L-23035 [July 31, 1975]).

In cases involving infringement of trademarks, there is no better evidence as to the dominant feature of a label and as to whether there is a confusing similarity in the contesting trademarks than the labels themselves. A visual and graphic presentation of the labels will constitute the best argument for one or the other (Philippine Nut Industry v. Standard Brands G.R. L-23035 [July 31, 1975]).

Infringement is determined by the "test of dominancy" rather than by differences or variations in the details of one trademark and of another. The rule was formulated in Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217 (1956), thus:

"It has been consistently held that the question of infringement of a trademark is to be determined by the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor it is necessary that the infringing label should suggest an effort to imitate. [C. Neilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle While Lead Co., vs. Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement of trademarks is whether the use of the marks involved would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588) In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275), the test was similarity or "resemblance between the two (trademarks) such as would be likely to cause the one mark to be mistaken for the other. xxx [But] this is not such similitude as amounts to identity." (Asia Brewery v. Court of Appeals. G.R. No. 103543. [July 5, 1993])

References:

American Cyanamid v. Director of Patents. G.R. No. L-23954. [April 29, 1977]
http://www.lawphil.net/judjuris/
juri1977/apr1977/gr_23954_1977.html

Asia Brewery v. Court of Appeals. G.R. No. 103543. [July 5, 1993]
http://www.lawphil.net/judjuris/
juri1993/jul1993/gr_103543_1993.html

Del Monte v. Court of Appeals. G.R. No. 78325. [January 25, 1990]
http://www.lawphil.net/judjuris/
juri1990/jan1990/gr_l_78325_1990.html

Philippine Nut Industry, Inc. v. Standard Brands, Inc. G.R. No. L-23035. [July 31, 1975]
http://www.lawphil.net/judjuris/
juri1975/jul1975/gr_l_23035_1975.html

13. Is the trade name “Aida’s Lechon” registrable for Aling Aida’s lechon products?

ANSWER: No. In any case, registration by itself will not afford her much protection since her trade name is not inherently distinctive being merely a simple combination of a common and a descriptive word, i.e., “Aida” being a name is common and “lechon” is descriptive of a class of goods to which her product belongs.

However, Aling Aida’s trademark may be protected if it has become distinctive through long use. Section 123.2 of Republic Act No. 8293 provides, viz.:

“As regards signs or devices mentioned in paragraphs (j), (k), and (l), nothing shall prevent the registration of any such sign or device which has become distinctive in relation to the goods for which registration is requested as a result of the use that have been made of it in commerce in the Philippines. The Office may accept as prima facie evidence that the mark has become distinctive, as used in connection with the applicant’s goods or services in commerce, proof of substantially exclusive and continuous use thereof by the applicant in commerce in the Philippines for five (5) years before the date on which the claim of distinctiveness is claimed (emphasis supplied).”

The Court explained the doctrine of secondary meaning in Philippine Nut Industry v. Standard Brands, Inc. (G.R. No. L-23035, July 31, 1975), viz.:

"xxx a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product."

Section 123.1 (j), (k) and (l) mentioned in the above-quoted provision states the general rule that a mark cannot be registered if it:

“(j) Consists exclusively of signs or indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services;

(k) Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value;

(l) Consists of color alone, unless defined by a given form; xxx”

Thus:

“The law does not afford much protection to trademarks that consist of common or ordinary words because they are not inherently distinctive. Examples of trademarks that might receive little protection include a person’s name, geographical terms, and descriptive terms, i.e. terms used to describe the product or service. Nevertheless, such marks can be protected if they gain distinctive recognition through long use and marketing (Legal Database).”

“Trademarks cannot be protected on marks that are not used, or abandoned, on generic terms describing a type of good or service, a mark that is very similar to another mark – so much so that it causes confusion – weak trademarks, and functional features of a product (Legal Database).”

“Marks that describe a feature of the product, or that are based upon a person's name or geographical location, are generally unprotectable. However, once the owner can demonstrate public awareness of the mark through advertising, product sales or other means, then it develops a "secondary meaning" and may be registered. Examples include (emphasis supplied):

· people's names (Ben & Jerry's, Calvin Klein, Procter & Gamble)
· geographic terms (Bank of America, New York Life)
· words that describe the product or service - (Burger King, Jiffy Lube)
· slogans - "Just do it" (Nike), "We do chicken right" (KFC), "Quality is job 1" (Ford)” (About.com 2005).

An exception to the exception is when a subsequent user (not the original Aling Aida) employs bona fide her name or pseudonym to indicate the origin of her lechon product, even when there has been a similar prior registered mark. In that event, however, the subsequent use of the registered name should be limited to mere identification or information and should not be misleading to the public that the product is the same as the earlier registered trademark. Section 148 of Republic Act No. 8293 provides, viz.:

“Use of Indications by Third Parties for Purposes Other than those for which the Mark is Used. – Registration of the mark shall not confer on the registered owner the right to preclude third parties from using bona fide their names, addresses, pseudonyms, a geographical name, or exact indications concerning the kind, quality, quantity, destination, value, place of origin, or time of production or of supply, of their goods or services: Provided, That such use is confined for the purposes of mere identification or information and cannot mislead the public as to the source of the goods or services.”

The subsequent user may not be allowed to secure registration if there has been an earlier registration of a similar mark since the former will no longer be able to claim priority based on earlier use.

References:

Genericized Trademark
http://www.reference.com/browse/wiki/Genericized_trademark

Legal Database: Trademark Protection (2005)
http://www.legal-database.com/trademark-protection.htm

Lyceum v. Court of Appeals (G.R. No. 101897, March 5, 1993)
http://www.lawphil.net/judjuris/juri1993/
mar1993/gr_101897_1993.html

Philippine Nut Industry v. Standard Brands, Inc. (G.R. No. L-23035, July 31, 1975)
http://www.lawphil.net/judjuris/juri1975/
jul1975/gr_l_23035_1975.html

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

Trademarks & Generic Names
http://www.genericnamesonline.com/pages/530382/index.htm

Trademarks and Service Marks 101
http://entrepreneurs.about.com/od/intellectualproperty/
a/trademark101.htm

14. Octagon, Inc. registered “Zenith” as the trademark of its computers. Later, it decided to market, in addition to computers, automatic voltage regulators, flash disks, floppy disks, and Web cams. May Octagon, Inc. likewise employ “Zenith” as the trademark for the new products?

ANSWER: Yes. Trademark protection extends to goods and services belonging to the same class in respect of which the mark is registered. As the Court explained in the case of McDonald’s Corporation v. Big Mak Burger (G.R. No. 143993, August 18, 2004):

“Respondents further claim that petitioners use the “Big Mac” mark only on petitioners’ double-decker hamburgers, while respondents use the “Big Mak” mark on hamburgers and other products like siopao, noodles and pizza. Respondents also point out that petitioners sell their Big Mac double-deckers in a styrofoam box with the “McDonald’s” logo and trademark in red, block letters at a price more expensive than the hamburgers of respondents. In contrast, respondents sell their Big Mak hamburgers in plastic wrappers and plastic bags. Respondents further point out that petitioners’ restaurants are air-conditioned buildings with drive-thru service, compared to respondents’ mobile vans.”

“These and other factors respondents cite cannot negate the undisputed fact that respondents use their “Big Mak” mark on hamburgers, the same food product that petitioners’ sell with the use of their registered mark “Big Mac.” Whether a hamburger is single, double or triple-decker, and whether wrapped in plastic or styrofoam, it remains the same hamburger food product. Even respondents’ use of the “Big Mak” mark on non-hamburger food products cannot excuse their infringement of petitioners’ registered mark, otherwise registered marks will lose their protection under the law.”

“The registered trademark owner may use his mark on the same or similar products, in different segments of the market, and at different price levels depending on variations of the products for specific segments of the market. The Court has recognized that the registered trademark owner enjoys protection in product and market areas that are the normal potential expansion of his business. Thus, the Court has declared:

“Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to guarding his goods or business from actual market competition with identical or similar products of the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining party has extended his business into the field (see 148 ALR 56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).””

Further, although the mark “Zenith” may be considered as descriptive its registration and continued use by Octagon, Inc. may enable the mark to acquire a secondary meaning and thus be registered for use on other products from the same origin such as automatic voltage regulators, flash disks, floppy disks, and Web cams, aside from computers. Section 123.2 of Republic Act No. 8293 allows the registration of a trademark that has acquired a secondary meaning.

The doctrine of secondary meaning may be explained, thus:

“If a mark is not a coined or arbitrary mark and is either highly suggestive or descriptive of the goods on which it is used, it must develop secondary meaning if it is to be protectable.

Secondary meaning attaches to a trademark when a majority of the public considers a term or logo to be an indicator of source and quality of a product, rather than merely descriptive of that product.

Secondary meaning develops after long, continuous, and exclusive use. It takes significant amounts of advertising and promotion to develop and maintain public awareness of brand or trademark identity in a descriptive mark. This is why descriptive marks are costly to develop, maintain, and protect (This is Dow About Dow).”

Philippine Supreme Court decided cases involving the doctrine of secondary meaning include Societe des Produits Nestle v. Court of Appeals (G.R. No. 112012, April 4, 2001), Pearl & Dean (Phil.) v. Shoemart (G.R. No. 148222, August 15, 2003), Asia Brewery v. Court of Appeals (G.R. No. 103543, July 5, 1993), and Lyceum v. Court of Appeals (G.R. No. 101897, March 5, 1993).

Cases:

Asia Brewery v. Court of Appeals (G.R. No. 103543, July 5, 1993)
http://lawphil.net/judjuris/juri1993/
jul1993/gr_103543_1993.html

Lyceum v. Court of Appeals (G.R. No. 101897, March 5, 1993)
http://www.lawphil.net/judjuris/
juri1993/mar1993/gr_101897_1993.html

McDonald’s Corporation v. Big Mak Burger (G.R. No. 143993, August 18, 2004)
http://www.supremecourt.gov.ph/
jurisprudence/2004/aug2004/143993.htm

Pearl & Dean (Phil.) v. Shoemart (G.R. No. 148222, August 15, 2003)
http://www.supremecourt.gov.ph/jurisprudence/
2003/aug2003/148222.htm

Societe des Produits Nestle v. Court of Appeals (G.R. No. 112012, April 4, 2001)
http://www.supremecourt.gov.ph/jurisprudence/
2001/apr2001/112012.htm

References:

Republic Act No. 8293
http://www.chanrobles.com/legal7code.htm

This is Dow About Dow
http://www.dow.com/about/trade/tr07.htm

15. Mr. Bean is a beloved character of different movies. He is the character in “Johnny English” the story of a detective who bangled his detective work and yet managed to get away with his mistakes and receive credit for the job in the end. A movie producer produced an animated version of “Mr. Bean” in a storyline that is new and unlike any other earlier movie of Mr. Bean but with the same characteristics and mannerisms are those of the original character.

Which of the following propositions is the best legal position to take?

a. There is infringement, because the entire character of Mr. Bean is copyright-protected by the same protection that protects the movies.

b. There is infringement because difference in medium does not negate infringement.

c. There is no infringement because the law does not protect a person’s characteristics and mannerisms.

d. There is no infringement because the storyline is different.

Do not explain your choice. Just choose.

ANSWER: B. There is infringement because difference in medium does not negate infringement.

References:

Ethical and Legal Use of Digital Media
http://www.psu.edu/policies/digitalmedia/dmfaq.html#Q9

Hoffman, I. The Protection of Fictional Characters.
http://www.ivanhoffman.com/characters.html

Republic Act No. 8293 (Section 177.2)
http://www.chanrobles.com/legal7code.htm

United Feature Syndicate v. Munsingwear Creation (G.R. No. 76193, November 9, 1989)
http://www.lawphil.net/judjuris/juri1989/
nov1989/gr_76193_1989.html

16. Registration was sought in the Philippines of a set of characters written in Aramaic a language spoken in the time of Jesus but now no longer used or spoken. It is the classical Hebrew translation of “Omega” and the applicant sought to apply the same to its fountain pens that have digital clocks in them. Which of the following is the most convincing legal position to take:

a. “Omega” is a well-known mark that is registered in this jurisdiction for watches. Pens with digital clocks are similar products. The Hebrew markings are a translation and, therefore, not subject to registration.

b. Pens with digital clocks are sufficiently distinct from the watches that are the sole product of “Omega.” Further, considering that the trademark is in Hebrew characters there should be no objection to registration.

c. Since the language is no longer spoken or written, the writings no longer constitute a “translation” and can, therefore, be registered.

d. The doctrine of dilution will apply. The application should be denied.

ANSWER: D. The doctrine of dilution will apply. The application should be denied. Although it can be argued that the Aramaic language is no longer used or spoken, it is still possible that it may cause confusion in the minds of consumers and thus cause dilution of the famous or well-known “Omega” mark.

The owner of a well-known mark has the right or prevent its use in ways that may result in the diminution of the value of the mark, although they may not be competitive with the owner’s rights or may not likely cause confusion in the minds of the public. The diminution of the value of the mark is referred to as “dilution”. (Hoffman, I.)

“Dilution” may involve: (a) “blurring” when the use of the mark in products that are unrelated to the products that the mark has become associated with, such as when the mark “Tiffany” is used for a restaurant since it may lead customers to associate both the jewelry manufacturer and the restaurant with the name, (b) “tarnishing” when the mark is used in a manner that takes away from the value of the mark, such as if the mark “Tiffany” were used in association with a “striptease joint,” and (c) “free riding” off of the marketing of the mark by the owner, i.e., although the customers of the restaurant may have heard of the mark, they would not likely be customers of the jewelry company and thus the mark would not have been “tarnished” or “blurred” (Hoffman, I.). Thus:

“The purpose of a trademark is to have the owner obtain the full value of such a mark and all the marketing and promotion associated with it and to allow others to obtain this free ride reduces the value of its efforts to the mark’s owner. It thus reduces the incentive to market and promote the mark.”

It is significant to note that some countries such as Australia and Malaysia require the submission of an official English translation of a mark for which registration is being sought evidently to avoid dilution.

The Philippine Supreme Court recently promulgated Levi Strauss v. Clinton Apparelle, Inc. (G.R. No. 138900, on September 20, 2005) involving the issue of trademark dilution.

References:

Hoffman "Beanies": Dilution and Generic Legal Issues
http://www.ivanhoffman.com/beanies.html

Kaizen Secretaries Limited (Australia)
http://www.bycpa.com/info/tm/aust.htm

Kaizen Secretaries Limited (Malaysia)
http://www.bycpa.com/info/tm/malay.htm

Law and the Media, the
http://www.webster.edu/~badenl/exam2.html

Levi Strauss v. Clinton Apparelle, Inc. (G.R. No. 138900, on September 20, 2005)
http://www.supremecourt.gov.ph/jurisprudence/2005/
sep2005/138900.htm

17. On which of the following may a patent on human stem cells issue?

a. The culture of stem cells in laboratory conditions outside the human body
b. The harvesting of stem cells
c. The use of stem cells for the treatment of Alzheimer’s disease
d. A device for the identification of stem cells

ANSWER: All of the above. A patent may be registered for a device for identification (iv above) and harvesting (ii above) of stem cells as long as they will not be taken from human embryos. According to Paragraph 3(d) of Schedule A2 to the United Kingdom Patents Act 1977 uses of human embryos for industrial or commercial purposes are not patentable inventions. Thus, the United Kingdom Patent Office will not grant patents for processes of obtaining stem cells from human embryos. (Also EPC Rule 23d(c))

Human totipotent cells have the potential to develop into an entire human body. Thus, such cells are not patentable because the human body at the various stages of its formation and development is excluded from patentability by Paragraph 3(a) of Schedule A2 to the United Kingdom Patents Act 1977. The United Kingdom Patent Office will therefore not grant patents for human totipotent cells. (Also Article 5(1) (EPC Rule 23e(1))

Human embryonic pluripotent stem cells, which arise from further division of totipotent cells, do not have the potential to develop into an entire human body. Moreover, although there is some opposition in the United Kingdom to research involving embryonic stem cells, a number of reports from influential political, medical and scientific bodies in recent years has emphasised the enormous potential of stem cell research, including embryonic stem cell research, to deliver new treatments for a wide range of serious diseases. This indicates that on balance the commercial exploitation of inventions concerning human embryonic pluripotent stem cells would not be contrary to public policy or morality in the United Kingdom. Thus, the United Kingdom Patent Office may grant patents for inventions involving such cells provided they satisfy the normal requirements for patentability.

In the United States, a patent was issued to Geron Corporation in 2001 covering basic undifferentiated human embryonic stem cells, techniques required to optimize cell production (i above), and the differentiated cell populations that they manufacture the stem cells from. A similar patent was given to Aastrom Biosciences for technology for growing or multiplying human stem cells that are found in adult bone marrow outside the body.

An invention that would use stem cells for the treatment of Alzheimer’s disease may undoubtedly be cited for novelty since such form of treatment has not yet been discovered to date. The decisions of the EPO Enlarged Board of Appeal in G 05/83 and the Patents Court in John Wyeth’s and Schering’s Applications established that the use of a substance for a "new and inventive therapeutic application" can be protected by a Swiss-type claim. Provided that the use of the substance in the treatment of the specified disease is not known, such claim can be considered to be novel.

References:

Aastrom Biosciences Receives Patent for Adult Bone Marrow Stem Cells
http://www.prnewswire.com/cgi-bin/
stories.pl?ACCT=104&STORY=/
www/story/02-27-2002/0001677066&EDATE

Geron Reports Issuance of U.S. Patent for Human Embryonic Stem Cells
http://www.geron.com/pressview.asp?id=400

Examination Guidelines for Patent Applications relating to Medical Inventions in the UK Patent Office (March 2004).
http://www.patent.gov.uk/patent/reference/
mediguidlines/second.htm#90

Oxford, the (2003). Patenting Stem Cells in Europe.
http://www.oxtrust.org.uk/pooled/articles/BF_NEWSART/
view.asp?Q=BF_NEWSART_81298

UK Patent Office, The (October 2004). Inventions Involving Human Embryonic Stem Cells.
http://www.patent.gov.uk/patent/notices/practice/stemcells.htm

18. May a finding of unfair competition be arrived at in the absence of intent to “pass off”?

ANSWER: Yes. Section 168.1 of Republic Act No. 8293 provides the general rule that a person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights.

Further, although Article 189 of the Revised Penal Code requires proof of actual intent to deceive the public or defraud a competitor as an element of unfair competition, the same has been repealed by Republic Act No. 8293. Section 168.3 of Republic Act No. 8293 no longer requires the element of intent to deceive in a finding of unfair competition. Further, the list of what are considered as unfair competition under Section 168.3 is not exclusive. In other words, there can be a finding of unfair competition as long as the act comes within the broad scope of protection against unfair competition as set out under Section 168.1.

Thus, the Court elucidated on the distinction between unfair competition and trademark infringement in Mighty Corp. v. Gallo Winery (G. R. No. 154342, July 14, 2004), viz.:

“Although the laws on trademark infringement and unfair competition have a common conception at their root, that is, a person shall not be permitted to misrepresent his goods or his business as the goods or business of another, the law on unfair competition is broader and more inclusive than the law on trademark infringement. The latter is more limited but it recognizes a more exclusive right derived from the trademark adoption and registration by the person whose goods or business is first associated with it. The law on trademarks is thus a specialized subject distinct from the law on unfair competition, although the two subjects are entwined with each other and are dealt with together in the Trademark Law (now, both are covered by the IP Code). Hence, even if one fails to establish his exclusive property right to a trademark, he may still obtain relief on the ground of his competitor's unfairness or fraud. Conduct constitutes unfair competition if the effect is to pass off on the public the goods of one man as the goods of another. It is not necessary that any particular means should be used to this end.”

KAT Video Productions v. KKCT-FM Radio (1997 ND 21, Civil No. 960184) illustrates the point, viz.:

“If Kat Country had intended to pass off its product as one of KAT Productions', this factor would weigh heavily in finding a likelihood of confusion. However, the evidence does not suggest an intent to confuse consumers in the marketplace. Each party claimed it selected the use of the word "KAT" and the feline logo without knowledge of the other company's use of the word or logo. Neither party has charged the other party with bad faith. It is therefore undisputed that Kat Country did not intend to confuse the public. However, the fact Kat Country did not adopt the name in bad faith or with the intent to pass off its product as the product of KAT Productions does not decrease the likelihood of confusion. Intent to deceive or confuse is not required for the imposition of liability. Mutual of Omaha, 836 F.2d at 400. The likelihood of confusion focuses on the consequences of a defendant's conduct, not on a defendant's motives. Although intent to pass off its goods may, without more, prove infringement, lack of intent does not preclude liability. Fuji Photo Film v. Shinohara Shoji Kabushiki Kaisha , 754 F.2d 591, 596-97 (5th Cir. 1985).” (Emphasis supplied.)

References:

KAT Video Productions v. KKCT-FM Radio (1997 ND 21, Civil No. 960184)
http://caselaw.lp.findlaw.com/scripts/
getcase.pl?court=nd&vol=960184&invol=1

Mighty Corp. v. Gallo Winery (G. R. No. 154342, July 14, 2004)
http://www.supremecourt.gov.ph/
jurisprudence/2004/jul2004/154342.htm

Republic Act No. 8293 (Section 177.2)
http://www.chanrobles.com/legal7code.htm

19. Toyota produces cars marked “Altis”.

a. May Toyota sell its rights to use the mark “Altis” to Suzuki for use on Suzuki’s “multi-cabs”?

ANSWER: Yes. Section 149.1 of Republic Act No. 8293 provides that an application for registration of a mark, or its registration, may be assigned or transferred with or without the transfer of the business using the mark.

b. May Suzuki use the mark on its cars that are fabricated in a similar fashion as the Toyota “Altis” cars?

ANSWER: No. Section 149.2 of Republic Act No. 8293 states that the assignment or transfer of the application for registration of a mark, or its registration shall, however, be null and void if it is liable to mislead the public, particularly as regards the nature, source, manufacturing process, characteristics or suitability for their purpose, of the goods or services to which the mark is applied.

c. In case of a merger between Toyota and Suzuki where the latter is the surviving corporation, will Suzuki obtain the right to use the mark “Altis”?

ANSWER: Yes. Section 149.1 of Republic Act No. 8293 provides that an application for registration of a mark, or its registration, may be assigned or transferred with or without the transfer of the business using the mark. On the other hand, the transfer of the business using the mark necessarily transfers the mark if it is included among the properties of the business (See Vicente Cu v. Court of Appeals, G.R. No. 75504, April 2, 1991.). However, under Section 149.5 assignments and transfers shall have no effect against third parties until they have been recorded at the Intellectual Property Office.

References:

Republic Act No. 8293 (Section 177.2)
http://www.chanrobles.com/legal7code.htm

Vicente Cu v. Court of Appeals (G.R. No. 75504, April 2, 1991)
http://www.lawphil.net/judjuris/juri1991/
apr1991/gr_75504_1991.html

20. A license contract was executed between Red Ribbon Bake Shop and Crown Cake Shop in Tuguegarao City. Under the contract, Crown Cake Shop may attach the mark “Red Ribbon” to its Sans Rival cakes and use the “Red Ribbon” packaging including the latter’s mark and symbol. The contract further provides that Crown shall pay “Red Ribbon” a twenty-five percent royalty for every cake sold. However, there is no provision for any form of control by Red Ribbon Bake Shop over Crown Cake Shop. Is their contract valid?

ANSWER: No. Section 150.1 of Republic Act No. 8293 provides that any license contract concerning the registration of a mark, or application therefore, shall provide for effective control by the licensor of the quality of the goods or services of the licensee in connection with which the mark is used. If the license contract does not provide for such quality control, or if such quality control is not effectively carried out, the license contract shall not be valid.

References:

Licensing of IPR
http://www.1000ventures.com/business_guide/ipr/
sme_guide_licensing_bywipo.html

Republic Act No. 8293 (Section 177.2)
http://www.chanrobles.com/legal7code.htm

21. A clothes manufacturer applied for and obtained registration of “Elephant Song” for T-shirts. However, from 2001 to 2004 the mark was only used for children’s short pants. No T-shirts were ever produced. The holder of the mark “White Elephant” for bags and purses petitioned for the cancellation of “Elephant Song” due to non-use. Should the petition be granted?

ANSWER: No. Section 152.3 of Republic Act No. 8293 provides that the use of a mark in connection with one or more of the goods or services belonging to the class in respect of which the mark is registered shall prevent its cancellation or removal in respect of all other goods or services of the same class.

Trademark protection extends to goods and services belonging to the same class in respect of which the mark is registered. As the Court explained in the case of McDonald’s Corporation v. Big Mak Burger (G.R. No. 143993, August 18, 2004):

“Respondents further claim that petitioners use the “Big Mac” mark only on petitioners’ double-decker hamburgers, while respondents use the “Big Mak” mark on hamburgers and other products like siopao, noodles and pizza. Respondents also point out that petitioners sell their Big Mac double-deckers in a styrofoam box with the “McDonald’s” logo and trademark in red, block letters at a price more expensive than the hamburgers of respondents. In contrast, respondents sell their Big Mak hamburgers in plastic wrappers and plastic bags. Respondents further point out that petitioners’ restaurants are air-conditioned buildings with drive-thru service, compared to respondents’ mobile vans.”

“These and other factors respondents cite cannot negate the undisputed fact that respondents use their “Big Mak” mark on hamburgers, the same food product that petitioners’ sell with the use of their registered mark “Big Mac.” Whether a hamburger is single, double or triple-decker, and whether wrapped in plastic or styrofoam, it remains the same hamburger food product. Even respondents’ use of the “Big Mak” mark on non-hamburger food products cannot excuse their infringement of petitioners’ registered mark, otherwise registered marks will lose their protection under the law.”

“The registered trademark owner may use his mark on the same or similar products, in different segments of the market, and at different price levels depending on variations of the products for specific segments of the market. The Court has recognized that the registered trademark owner enjoys protection in product and market areas that are the normal potential expansion of his business. Thus, the Court has declared:

“Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to guarding his goods or business from actual market competition with identical or similar products of the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining party has extended his business into the field (see 148 ALR 56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577).””

References:

McDonald’s Corporation v. Big Mak Burger (G.R. No. 143993, August 18, 2004)
http://www.supremecourt.gov.ph/jurisprudence/2004/
aug2004/143993.htm

Republic Act No. 8293 (Section 177.2)
http://www.chanrobles.com/legal7code.htm