[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.