FACTS:
Petitioner, McDonalds Corporation (McDonalds) is a corporation organized under the laws of Delaware, US. It operates, by itself or through its franchisees, a global chain of fast food restaurants. It owns a family of marks including the “Big Mac” mark for its “double decker hamburger sandwich.” McDonalds registered his trademark with the US trademark registry sometime 1979. Based on home registration, McDonalds applied for registration of the same mark in principal registry of the then Philippine Bureau of Patents, Trademark and Technology (PBPTT), now the Intellectual Property Office (IPO). Pending approval of this application, McDonalds introduced its “Big Mac” hamburger sandwiches in the Philippine market in 1981. On 1985, the PBPTT, allowed registration of the “Big Mac” mark in the Philippine registry based on its home registration in the US.
Like its other marks, McDonalds display the Big Mac mark in its item and paraphernalia in its restaurant, and its outdoor and indoor signages. From 1982 to 1990, McDonalds spent millions in advertisement for big mac hamburger sandwich alone.
Petitioner McGeorge Food Industries (Petitioner McGeorge) a domestic corporation, is McDonalds Philippine franchisee.
Respondent, LC Big Mak burger inc. is a domestic corporation which operates fast food outlets and snack vans in metro manila and nearby provinces. Respondents corporation’s menu includes hamburger sandwiches and other food items. Respondent Francis B. Dy, Edna A. Dy, Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo, and Grace Huero are the incoporators, stockholders and directors of respondent corporation.
On 1988, respondent corporation applied with the PBPTT for the registration of the Big Mak mark for its hamburger sandwiches. McDonalds opposed respondent corporation’s application on the ground that Big Mak was colorable imitation of its registered Big Mac mark for the same food products. McDonalds also informed respondent Francis Dy, the chairman of the board of directors of the respondent corporation, of its exclusive right to the Big Mac mark and requested him to desist from using the Big Mak mark or any similar mark.
Having received no reply from respondent Dy, petitioners sued respondents in the RTC Makati for trademark infringement and unfair competition. RTC issued a temporary restraining order against respondents enjoinining them from using the Big Mak mark in the operation of their business in the NCR. On 1990, RTC issued a writ of preliminary injunction replacing the TRO.
In their answer, respondents admitted that they have been using the Big Mak burger for their fast food business. Respondents claimed, however, that McDonalds does not have an exclusive right to the Big Mac mark or to any other similar marks. Respondents point out that the Isaiyas group of corporations registered the same mark for hamburger sandwiches with the PBOTT on 1979. One Rodolfo Topacio similarly registered the same mark on 1983, prior to McDonalds registration on 1985. Alternatively, respondents claimed that they are not liable for trademark infringement and unfair competition, as the Big Mak mark they sought to register does not constitute a colorable imitation of the Big Mac mark. Respondents asserted that they did not fraudulently pass off their hamburger sandwiches as those of petitioners Big Mak hamburgers. Respondents sought damages in their counterclaim.
In their reply, petitioners denied respondents claim that McDonalds is not the exclusive owner of the Big Mac mark. Petitioners asserted that while the Isaiyas group and Topacio did register the Big Mac mark ahead of them, the Isaiyas group did so only in the supplemental register of PBPTT and such registration does not provide any protection. McDonalds disclosed that it had acquired Topacio’s rights to his registration in a deed of assignment.
ISSUE:
Did the same acts of defendants in using the name Big Mak as a trademark or trade name in their signages, or in causing the name Big Mak to be printed on the wrappers and containers of their food products also constitute an act of unfair competition under section 29 of the trademark law?
RULING:
Yes. The provision of the law concerning unfair competition is broader and more inclusive than that the law concerning the infringement of trademark, which is more limited range, but within its narrower range recognizes a more exclusive right derived by the adoption and registration of the trademark by the person whose goods or services are first associated therewith. Notwithstanding the distinction between an action for trademark infringement and an action for unfair competition, however, the law extends substantially the same relief to the injured party for both cases.
Any conduct may be said to constitute unfair competition if the effect is to pass off on the public the goods of one man as the goods of another. The choice of Big Mak as trade name by defendant corporation is not merely for sentimental reasons but was clearly made to take advantage of the reputation, popularity and the established goodwill of plaintiff McDonalds. For as stated in Section 29, a person is guilty of unfair competition who in selling his goods shall give them the general appearance, of goods of another manufacturer or dealer, either as goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would likely influence purchasers to believe that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer. Thus, plaintiffs have established their valid cause of action against the defendants for trademark infringement and unfair competition and for damages.
Digest by: Don D. Ballesteros
Editing by: JMaminta
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