7. Trademark Infringement

A. Trademark Infringement

A person shall be liable for trademark infringement if, without the consent of the owner of the registered mark, he:

• Uses in commerce any reproduction or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services which is likely to cause confusion, or to cause mistake, or to deceive;

Note: This includes other preparatory steps necessary to carry out the sale of any goods or services.

• Reproduces or colorably imitates a registered mark or a dominant feature thereof and applies such reproduction or colorable imitation to signs, packages, 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.

Note: It is immaterial that there was no actual sale of goods or services using the infringing material as long as the acts mentioned were actually committed. (Sec. 155, IP Code)¹

The “likelihood of confusion” is the gravamen of trademark infringement. But likelihood of confusion is a relative concept, the particular, and sometimes peculiar, circumstances of each case being determinative of its existence. Thus, in trademark infringement cases, more than in other kinds of litigation, precedents must be evaluated in the light of each particular case. (Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R. No. 158589, 27 June 2006)²

To establish trademark infringement, the following elements must be shown:

• The validity of plaintiff’s mark;
• The plaintiff’s ownership of the mark; and
• The use of the mark or its colorable imitation by the alleged infringer results in “likelihood of confusion.” (Mcdonald’s Corporation and Mcgeorge Food Industries, Inc. v. L.c. Big Mak Burger, Inc., G.R. No. 143993, 18 August 2004)³

The phrase “colorable imitation” denotes such a “close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other”. (Etepha v. DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC., G.R. No. L-20635, 31 March 1966)⁴

Unauthorized use of a registered mark or its colorable imitation in connection with goods or services constitutes infringement when such use is likely to cause confusion, mistake, or deception. Trademark infringement and unfair competition are distinct causes of action under Secs. 155 and 168, IP Code. (Secs. 155 and 168, IP Code)⁵

The general impression of the ordinary purchaser buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods, is the touchstone. (DEL MONTE CORPORATION and PHILIPPINE PACKING CORPORATION v. COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING INDUSTRIES, G.R. No. L-78325, 25 January 1990)⁶

Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement Action

Any foreign national or juridical person who meets the requirements of Section 3 of the IP Code⁷ and does not engage in business in the Philippines may bring a civil or administrative action hereunder for opposition, cancellation, infringement, unfair competition, or false designation of origin and false description, whether or not it is licensed to do business in the Philippines under existing laws. (Sec. 160, IP Code)⁸

Limitations to Actions for Infringement

• A registered mark shall have no effect against any person who, in good faith, before the filing date or the priority date, was using the mark for the purposes of his business or enterprise.

Note: Such right may only be transferred or assigned together with his enterprise or business or with that part of his enterprise or business in which the mark is used.

Note: cf. (Zuneca Pharmaceutical v. Natrapharm, Inc., G.R. No. 211850, 8 September 2020⁹ - registration generally follows the first-to-file rule, but under Sec. 159.1 of RA 8293, a registered mark has no effect against a person who used it in good faith for their business before the filing or priority date, subject to the limitation on transfer stated above.)

• Where an infringer who is engaged solely in the business of printing the mark or other infringing materials for others is an innocent infringer, the owner of the right infringed shall be entitled as against such infringer only to an injunction against future printing.
• Where the infringement complained of is contained in or is part of paid advertisement in a periodical or in an electronic communication, the remedies of the owner of the right infringed as against the publisher or distributor of periodical or electronic communication shall be limited to an injunction against the presentation of such advertising matter in future issues.

Note: This shall apply only to innocent infringers.

• There shall be no infringement of trademarks or tradenames of imported or sold drugs and medicines as well as imported or sold off-patent drugs and medicines PROVIDED, the marks appearing thereon have been registered marks that have not been tampered or unlawfully modified.

B. Damages

The owner of a registered mark may recover damages from any person who infringes his rights.

The measure of the damages suffered shall be either:

• The reasonable profit which the complaining party would have made had the defendant not infringed his rights, or
• The profit which the defendant actually made out of the infringement.

If the measure of damages cannot be readily ascertained with reasonable certainty, the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party. (Sec. 156.1, IP Code)¹⁰

Note: Where there was actual intent to mislead the public or to defraud the complainant, the court may double the amount of damages to be awarded. (Sec. 156.3, IP Code)¹¹

On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales. (Sec. 156.2, IP Code)¹²

C. Damages; Requirement of Notice

In any suit for infringement, the owner of the registered mark shall not be entitled to recover profits or damages UNLESS the acts have been committed with knowledge that such imitation is likely to cause confusion, or to cause mistake, or to deceive. Such knowledge is presumed if:

• The registrant gives notice that his mark is registered by displaying with the mark the words “Registered Mark” or the letter R within a circle, or
• The defendant had otherwise actual notice of the registration. (Sec. 158, IP Code)¹³

D. Penalties

Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from 2 to 5 years and a fine ranging from P50,000 to P200,000 shall be imposed on any person who is found guilty of committing any of the acts of trademark infringement, unfair competition, or false description or representation. (Sec. 170, IP Code)¹⁴

Power of Court to Order Infringing Material Destroyed

In any action involving a violation of a right of the owner of the registered mark, the court may order that goods found to be infringing be disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder or destroyed without compensation of any sort. (Sec. 157.1, IP Code)¹⁵