[G.R. No. L-29971. August 31, 1982.]
ESSO STANDARD EASTERN, INC., petitioner,
vs. THE HONORABLE COURT OF APPEALS and UNITED CIGARETTE CORPORATION,
respondents.
D E C I S I O N
The Court affirms on the basis of controlling doctrine the
appealed decision of the Court of Appeals reversing that of the Court of First
Instance of Manila and dismissing the complaint filed by herein petitioner
against private respondent for trade infringement for using petitioner's
trademark ESSO, since it clearly appears that the goods on which the trademark
ESSO is used by respondent is non-competing and entirely unrelated to the
products of petitioner so that there is no likelihood of confusion or deception
on the part of the purchasing public as to the origin or source of the goods.
Petitioner Esso Standard Eastern, Inc., then a foreign corporation
duly licensed to do business in the Philippines, is engaged in the sale of
petroleum products which are identified with its trademark ESSO (which as
successor of the defunct Standard Vacuum Oil Co. it registered as a business
name with the Bureaus of Commerce and Internal Revenue in April and May, 1962).
Private respondent in turn is a domestic corporation then engaged in the
manufacture and sale of cigarettes, after it acquired in November, 1963 the
business, factory and patent rights of its predecessor La Oriental Tobacco
Corporation, one of the rights thus acquired having been the use of the
trademark ESSO on its cigarettes, for which a permit had been duly granted by
the Bureau of Internal Revenue.
Barely had respondent as such successor started manufacturing
cigarettes with the trademark ESSO, when petitioner commenced a case for
trademark infringement in the Court of First Instance of Manila. The complaint
alleged that the petitioner had been for many years engaged in the sale of
petroleum products and its trademark ESSO had acquired a considerable goodwill
to such an extent that the buying public had always taken the trademark ESSO as
equivalent to high quality petroleum products. Petitioner asserted that the
continued use by private respondent of the same trademark ESSO on its
cigarettes was being carried out for the purpose of deceiving the public as to
its quality and origin to the detriment and disadvantage of its own products.
In its answer, respondent admitted that it used the trademark ESSO
on its own product of cigarettes, which was not identical to those produced and
sold by petitioner and therefore did not in any way infringe on or imitate
petitioner's trademark. Respondent contended that in order that there may be
trademark infringement, it is indispensable that the mark must be used by one
person in connection or competition with goods of the same kind as the
complainant's.
The trial court, relying on the old cases of Ang vs. Teodoro
and Arce & Sons, Inc. vs. Selecta Biscuit Company, referring
to related products, decided in favor of petitioner and ruled that respondent
was guilty of infringement of trademark.
On appeal, respondent Court of Appeals found that there was no
trademark infringement and dismissed the complaint. Reconsideration of the
decision having been denied, petitioner appealed to this Court by way of
certiorari to reverse the decision of the Court of Appeals and to reinstate the
decision of the Court of First Instance of Manila. The Court finds no ground
for granting the petition.
The law defines infringement as the use without consent of the
trademark owner of any "reproduction, counterfeit, copy or colorable
imitation of any registered mark or tradename in connection with the sale,
offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy or colorably
imitate any 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." Implicit in this definition is the
concept that the goods must be so related that there is a likelihood
either of confusion of goods or business. But likelihood of confusion is a
relative concept; to be determined only according to the particular, and
sometimes peculiar, circumstances of each case. It is unquestionably true that,
as stated in Coburn vs. Puritan Mills, Inc.: "In trademark
cases, even more than in other litigation, precedent must be studied in the
light of the facts of the particular case."
It is undisputed that the goods on which petitioner uses the
trademark ESSO, petroleum products, and the product of respondent, cigarettes,
are non-competing. But as to whether trademark infringement exists depends for
the most part upon whether or not the goods are so related that the
public may be, or is actually, deceived and misled that they came from the same
maker or manufacturer. For non-competing goods may be those which, though they
are not in actual competition, are so related to each other that it might
reasonably be assumed that they originate from one manufacturer. Non-competing
goods may also be those which, being entirely unrelated, could not
reasonably be assumed to have a common source. In the former case of related
goods, confusion of business could arise out of the use of similar marks; in
the latter case of non-related goods, it could not. The vast majority of courts
today follow the modern theory or concept of "related goods" which
the Court has likewise adopted and uniformly recognized and applied.
Goods are related when they belong to the same class or have the
same descriptive properties; when they possess the same physical attributes or
essential characteristics with reference to their form, composition, texture or
quality. They may also be related because they serve the same purpose or are
sold in grocery stores. Thus, biscuits were held related to milk because they
are both food products. Soap and perfume, lipstick and nail polish are
similarly related because they are common household items nowadays. The
trademark "Ang Tibay" for shoes and slippers was disallowed to be
used for shirts and pants because they belong to the same general class of
goods. Soap and pomade, although non-competitive, were held to be similar or to
belong to the same class, since both are toilet articles. But no confusion or
deception can possibly result or arise when the name "Wellington"
which is the trademark for shirts, pants, drawers and other articles of wear
for men, women and children is used as a name of a department store.
Thus, in Acoje Mining Co., Inc. vs. Director of
Patents, the Court, through now Chief Justice Fernando, reversed the
patent director's decision on the question of "May petitioner Acoje Mining
Company register for the purpose of advertising its product, soy sauce,
the trademark LOTUS, there being already in existence one such registered in
favor of the Philippine Refining Company for its product, edible oil, it
being further shown that the trademark applied for is in smaller type, colored
differently, set on a background which is dissimilar as to yield a distinct
appearance?" and ordered the granting of petitioner's application for
registration ruling that "there is quite a difference between soy sauce
and edible oil. If one is in the market for the former, he is not likely to
purchase the latter just because of the trademark "LOTUS" and
"when regard is had for the principle that the two trademarks in their
entirety as they appear in their respective labels should be considered in relation
to the goods advertised before registration could be denied, the conclusion is
inescapable that respondent Director ought to have reached a different
conclusion."
By the same token, in the recent case of Philippine Refining Co.,
Inc. vs. Ng Sam and Director of Patents, the Court upheld the
patent director's registration of the same trademark CAMIA for herein
respondent's product of ham notwithstanding is already being used by herein
petitioner for a wide range of products: lard, butter, cooking oil, abrasive
detergents, polishing materials and soap of all kinds. The Court, after noting
that the same CAMIA trademark had been registered by two other companies,
Everbright Development Company and F. E. Zuellig, Inc. for their respective
products of thread and yarn (for the former) and textiles, embroideries and
laces (for the latter) ruled that "while ham and some of the products of
petitioner are classified under Class 47 (Foods and Ingredients of Food), this
alone cannot serve as the decisive factor in the resolution of whether or not
they are related goods. Emphasis should be on the similarity of the products
involved and not on the arbitrary classification or general description of
their properties or characteristics." The Court, therefore, concluded that
"In fine, We hold that the businesses of the parties are noncompetitive
and their products so unrelated that the use of identical trademarks is
not likely to give rise to confusion, much less cause damage to
petitioner."
In the situation before us, the goods are obviously different from
each other — with "absolutely no iota of similitude" as stressed in
respondent court's judgment. They are so foreign to each other as to make it
unlikely that purchasers would think that petitioner is the manufacturer of
respondent's goods. The mere fact that one person has adopted and used a
trademark on his goods does not prevent the adoption and use of the same
trademark by others on unrelated articles of a different kind.
Petitioner uses the trademark ESSO and holds certificate of
registration of the trademark for petroleum products, including aviation
gasoline, grease, cigarette lighter fluid and other various products such as
plastics, chemicals, synthetics, gasoline solvents, kerosene, automotive and
industrial fuel, bunker fuel, lubricating oil, fertilizers, gas, alcohol,
insecticides and the "ESSO Gasul" burner, while respondent's business
is solely for the manufacture and sale of the unrelated product of cigarettes.
The public knows too well that petitioner deals solely with petroleum products
that there is no possibility that cigarettes with ESSO brand will be associated
with whatever good name petitioner's ESSO trademark may have generated.
Although petitioner's products are numerous, they are of the same class or line
of merchandise which are noncompeting with respondent's product of cigarettes,
which as pointed out in the appealed judgment is beyond petitioner's
"zone of potential or natural and logical expansion." When a
trademark is used by a party for a product in which the other party does not
deal, the use of the same trademark on the latter's product
cannot be validly objected to.
Another factor that shows that the goods involved are
non-competitive and non-related is the appellate court's finding that they flow
through different channels of trade, thus: "The products of each party
move along and are disposed through different channels of distribution. The
(petitioner's) products are distributed principally through gasoline service
and lubrication stations, automotive shops and hardware stores. On the other
hand, the (respondent's) cigarettes are sold in sari-sari stores, grocery stores,
and other small distributor outlets. (Respondent's) cigarettes are even peddled
in the streets while (petitioner's) 'gasul' burners are not. Finally, there is
a marked distinction between oil and tobacco, as well as between petroleum and
cigarettes. Evidently, in kind and nature, the products of (respondent) and of
(petitioner) are poles apart."
Respondent court correctly ruled that considering the general
appearances of each mark as a whole, the possibility of any confusion is
unlikely. A comparison of the labels of the samples of the goods submitted by
the parties shows a great many differences on the trademarks used. As pointed
out by respondent court in its appealed decision, "(A) witness for the
plaintiff, Mr. Buhay, admitted that the color of the 'ESSO' used by the
plaintiff for the oval design where the blue word ESSO contained is the distinct
and unique kind of blue. In his answer to the trial court's question, Mr. Buhay
informed the court that the plaintiff never used its trademarks on any product
where the combination of colors is similar to the label of the Esso
cigarettes," and "Another witness for the plaintiff, Mr. Tengco,
testified that generally, the plaintiff's trademark comes all in either red,
white, blue or any combination of the three colors. It is to be pointed out
that not even a shade of these colors appears on the trademark of the
appellant's cigarette. The only color that the appellant uses in its trademark
is green."
Even the lower court, which ruled initially for petitioner, found
that a "noticeable difference between the brand ESSO being used by the
defendants and the trademark ESSO of the plaintiff is that the former has a
rectangular background, while in that of the plaintiff the word ESSO is enclosed
in an oval background."
In point of fact and time, the Court's dismissal of the petition
at bar was presaged by its Resolution of May 21, 1979 dismissing by minute
resolution the petition for review for lack of merit in the identical case of Shell
Company of the Philippines, Ltd. vs. Court of Appeals, wherein
the Court thereby affirmed the patent office's registration of the trademark
SHELL as used in the cigarettes manufactured by therein respondent Fortune
Tobacco Corporation notwithstanding the therein petitioner Shell Company's
opposition thereto as the prior registrant of the same trademark for its
gasoline and other petroleum trademarks, on the strength of the controlling
authority of Acoje Mining Co. vs. Director of Patents, supra,
and the same rationale that "(I)n the Philippines, where buyers of
appellee's (Fortune Corp.'s) cigarettes, which are low cost articles, can be
more numerous compared to buyers of the higher priced petroleum and chemical
products of appellant (Shell Co.) and where appellant (Shell) is known to be in
the business of selling petroleum and petroleum-based chemical products, and no
others, it is difficult to conceive of confusion in the minds of the buying
public in the sense it can be thought that appellant (Shell) is the
manufacturer of appellee's (Fortune's) cigarettes, or that appellee (Fortune)
is the manufacturer or processor of appellant's (Shell's) petroleum and
chemical products."
ACCORDINGLY, the petition is dismissed and the decision of
respondent Court of Appeals is hereby affirmed.