1. Arce Sons and Company vs Selecta Biscuit Company

8/9/2019 1. Arce Sons and Company vs Selecta Biscuit Company

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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-14761 January 28, 1961

ARCE SONS AN COMPAN!, petitioner,vs.

SELECTA "#SCU#T COMPAN!, #NC., ET AL., respondents.

x---------------------------------------------------------x

G.R. No. L-17981 January 28, 1961

ARCE SONS AN COMPAN!, plaintiff-appellee,vs.

SELECTA "#SCU#T COMPAN!, #NC., defendant-appellant.

Manuel O. Chan and Raon !. Ere"eta for plaintiff-appellee.

E. #oltaire $arcia for defendant-appellant."AUT#STA ANGELO, J .$

On Au%ust &', '()), !electa Biscuit Copan*, +nc., hereinafter referred to as respondent, filed ith thePhilippine Patent Office a petition for the re%istration of the ord !EEC/A as trade-ar0 to be use

in its ba0er* products alle%in% that it is in actual use thereof for not less than to onths before said

date and that no other persons, partnership, corporation or association ... has the ri%ht to use said trade-ar0 in the Philippines, either in the identical for or in an* such near reseblance thereto, as i%ht

be calculated to deceive. +ts petition as referred to an exainer for stud* ho found that the trade-

ar0 sou%ht to be re%istered resebles the ord !EEC/A used b* the Acre and !ons andCopan*, hereinafter referred to as petitioner, in its il0 and ice crea products so that its use b*

respondent ill cause confusion as to the ori%in of their respective %oods. Conse1uentl*, he

recoended that the application be refused. 2oever, upon reconsideration, the Patent Officeordered the publication of the application for purposes of opposition.

+n due tie, petitioner filed its opposition thereto on several %rounds, aon% hich are3 4'5 that the

ar0 !EEC/A had been continuousl* used b* petitioner in the anufacture and sale of its

products, includin% ca0es, ba0er* products, il0 and ice crea fro the tie of its or%ani6ation andeven prior thereto b* its predecessor-in-interest, Raon Arce7 485 that the ar0 !EEC/A has

alread* becoe identified ith nae of the petitioner and its business7 4&5 that petitioner had arned

respondent not to use said ar0 because it as alread* bein% used b* the forer, but that the latter

i%nored said arnin%7 495 that respondent is usin% the ord !EEC/A as a trade-ar0 as ba0er* products in unfair copetition ith the products of petitioner thus resultin% in confusion in trade7 4)5

that the ar0 to hich the application of respondent refers has stri0in% reseblance, both inappearance and eanin%, to petitioner:s ar0 as to be ista0en therefor b* the public and causerespondent:s %oods to be sold as petitioner:s7 and 4;5 that actuall* a coplaint has been filed b* the

petitioner a%ainst respondent for unfair copetition in the Court of <irst +nstance of Manila as0in% for

daa%es and for the issuance of a rit of in=unction a%ainst respondent en=oinin% the latter for continuin% ith the use of said ar0.

On !epteber 8>, '()>, the Court of <irst +nstance of Manila rendered decision in the unfair

copetition case perpetuall* en=oinin% respondent fro usin% the nae !EEC/A as a trade-ar0

on the %oods anufactured and?or sold b* it and orderin% it to pa* petitioner b* a* of daa%es all the



profits it a* have reali6ed b* the use of said nae, plus the su of P),@@@.@@ as attorne*:s fee and

costs of suit. <ro this decision, respondent brou%ht the atter on appeal to the Court of Appeals

herein the case as doc0eted as CA-$.R. No. 89@'-R.

+nasuch as the issues of the facts in the case of unfair copetition are substantiall* identical iththose raised before the Patent Office, the parties at the hearin% thereof, a%reed to subit the evidence

the* introduced before the Court of <irst +nstance of Manila to said office, and on the stren%th thereof,

the irector of Patents, on eceber , '()>, rendered decision disissin% petitioner:s opposition andstatin% that the re%istration of the trade-ar0 !EEC/A in favor of applicant !electa BiscuitsCopan*, +nc. ill not cause confusion or ista0e nor ill deceive the purchasers as to the cause

daa%e to petitioner. 2ence, petitioner interposed the present petition for revie.

On !epteber , '(;@, this Court issued a resolution of the folloin% tenor3

+n $.R. No. -'9;' 4Arce !ons and Copan* vs. !electa Biscuits Copan*, +nc., et al.5,considerin% that the issue raised and evidence presented in this appeal are the sae as those

involved and presented in Civil Case No. &8(@, entitled Arce !ons and Copan* vs. !electa

Biscuit Copan*, +nc. of the Court of <irst +nstance of Manila, presentl* pendin% appeal in the

Court of Appeals, doc0eted as CA-$.R. No. 89@'-R, the Court resolved to re1uire the parties,

or their counsel, to infor this Court h* the appeal pendin% before the Court of Appealsshould not be forarded to this Court in order that the to cases a* be consolidated and

=ointl* decided, to avoid an* conflictin% decision, pursuant to the provisions of section ', para%raph ), of the udiciar* Act of '(9> 4Republic Act No. 8(;5.

And havin% both petitioner and respondent anifested in ritin% that the* do not re%ister an* ob=ection

that the case the* subitted on appeal to the Court of Appeals be certified to this Court so that it a*

be consolidated ith the present case, the to cases are no before us for consolidated decision.

/he case for petitioner is narrated in the decision of the court a quo as follos3 .

+n '(&&, Raon Arce, predecessor in interest of the plaintiff, started a il0 business in

Novaliches, Ri6al, usin% the nae :!EEC/A: as a trade-nae as ell as a trade-ar0. 2e

be%un sellin% and distributin% his products to different residences, restaurants and offices, in bottles on the caps of hich ere inscribed the ords :!EEC/A <RE!2 M+D.: As his business prospered, he thou%ht of expandin% and, in facts, he expanded his business b*

establishin% a store at Nos. ''-'& epanto !treet. hile there, he be%an to cater, in addition

to il0, ice crea, sandiches and other food products. As his caterin% and ice crea business prospered in a bi% a*, he placed a si%n si%nboard in his establishent ith the nae

:!EEC/A: inscribed thereon. /his si%nboard as place ri%ht in front of the said store. <or the

sa0e of efficienc*, the Novaliches place as ade the pasteuri6in% plant and its products eredistributed throu%h the epanto store. !pecial containers ade of tin cans ith the ords

:!EEC/A: ritten on their covers and :ebossed or blon: on the bottles theselves ere

used. !iilarl*, exclusive bottles for il0 products ere ordered fro $et6 Brothers ith the

ord :!EEC/A :blon on the. /he sandiches hich ere sold and distributed ererapped in carton boxes ith covers bearin% the nae :!EEC/A.: /o the ordinar* cars bein%

used for the deliver* of his products to serve outside orders ere added to a fleet of five 4)5

deliver* truc0s ith the ord :!EEC/A : proinentl* painted on the. !ales ere adedirectl* at the epanto store or b* eans of deliveries to specified addresses, restaurants and

offices inside Manila and its suburbs and soeties to custoers in the provinces. As tie

passed, ne products ere produced for sale, hich as cheese 4cotta%e cheese5 ith specialcontainers especiall* ordered fro the Philippine Education Copan* ith the :!EEC/A :

ritten on their covers.



/he ar that bro0e out on eceber >, '(9', did not stop Raon Arce fro continuin% ith

his business. After a brief interruption of about a outh, that is, durin% the end of anuar*, '(98,

and earl* <ebruar*, '(98, he resued his business usin% the sae trade-nae and trade-ar0,

but this tie, on a lar%e scale. 2e entered the restaurant business. air* products ice crea,il0, sandiches continued to be sold and distributed b* hi. 2oever, Raon Arce as a%ain

forced to discontinue the business on October, '(99, because tie as be%innin% to be

precarious. Aerican planes started to bob Manila and one of his sons, Eulalio Arce, ho asana%in% the business, as sei6ed b* the apanese. iberation cae and iediatel*

thereafter. Raon Arce once ore resued his business, even ore activel*, b* addin% another

store located at the corner of epanto and A6carra%a !treets. Continuin% to use the nae:!electa,: he added ba0er* products to his line of business. ith a fireood t*pe of oven, about

one-half the si6e of the courtroo, he ade his on bread, coo0ies, pastries and assorted ba0er*

products. +ncidentall*, Arce:s ba0er* as transferred to Balintaa0, Fue6on Cit* G another expansion of his business G here the ba0er* products are no bein% ba0ed thru the use of

fireood, electric and %as oven. /hese ba0er* products, li0e his other products, are bein% sold

the store itself and ?or delivered to people orderin% the in Manila and even Ba%uio. i0e the

other products, special carton boxes in different si6es, accordin% to the ba0er* products, iththe nae :!electa: on top of the covers are provided for these ba0er* products. <or the ca0es,

special boxes and labels readin% :!electa Ca0es for all occasions: are ade. <or the il0

products, special bottle caps and bottles ith the colored ords :Fualit* Ala*s !electa <reshMil0, One Pint: inscribed and blon on the sides of the bottles - an innovation fro the old

bottles and caps used forerl*. !iilar, special boxes ith the nae :!electa :are provided for

fried chic0en sold to custoers.

Business bein% alread* ell established, Raon Arce decided to retire, so that his children can%o on ith the business. <or this purpose, he transferred and leased to the all his ri%hts,

interest and participations in the business, includin% the use of the nae of :!electa,: soetie

in the *ear '()@, at a onthl* rental of P'@,@@@.@@, later reduced to P;,)@@.@@. 2e further rotethe Bureau of Coerce letter dated <ebruar* '@, '()@, re1uestin% cancellation of the business

nae :!electa Restaurant: to %ive a* to the re%istration of the sae :!electa: and as0ed that thesae be re%istered in the nae of Arce !ons H Copan*, a co-partnership entered into b* and

aon% his children on <ebruar* '@, '()@. !aid co-partnership as or%ani6ed, so its articles of co-partnership state, :conduct a first class restaurant business7 to en%a%e in the anufacture and

sale of ice crea, il0, ca0es and other dair* and ba0er* products7 and to carr* on such other

le%itiate business as a* produce profit:7 Arce !ons H Copan* has thus continued thelucrative business of their predecessor in interest. +t is no, and has ala*s been, en%a%ed in the

restaurant business, the sale of il0, and the production and sale of ca0es, dair* products and

ba0er* products. Arce !ons H Copan* are no a0in% ba0er* products li0e bread rolls, pande navaro, pan de sal, and other t*pes, of coo0ies and biscuit of the round, hard and other t*pes,

providin% thereof special boxes ith the sae !electa:.

Pursuin% the polic* of expansion adopted b* their predecessor, Arce !ons H Copan*established another store the no faous :!electa ee* Boulevard:, ith seven 45 deliver*truc0s ith the :!electa : conspicuousl* painted on the, to serve, deliver, and cater to

custoers in and outside of Manila. .

/he case for respondent on the other hand, is expressed as follos3

efendant as or%ani6ed and re%istered as a corporation under the nae and st*le of !electa

Biscuit Copan*, +nc. on March 8, '()) 4Exhibit 8-A7 p. &, April ', '()>5 but startedoperation as a biscuit factor* on une 8@ '()) 4t.s.n. p.&, id5. /he nae :!electa: as chosen b*



the or%ani6ers of defendant ho are Chinese citi6ens as a translation of the Chinese ord :Chin%

!uan: hich eans :apili: in /a%alo%, and !elected: in En%lish 4t.s.n. p, id.5. /hereupon, the

Articles of +ncorporation of !electa Biscuit Copan*, +nc. ere re%istered ith the !ecurities

and Exchan%e Coission 4t.s.n. P.). id.5, and at the sae tie re%istered as a business naeith the Bureau of Coerce hich issued certificate of re%istration No. )))(9 4Exhibit &7

Exhibit &-A5. /he sae nae !electa Biscuit Copan*, +nc. as also subse1uentl* re%istered

ith the Bureau of +nternal Revenue hich issued Re%istration Certificate No. &);9 4Exhibit9, t.s.n., p. id.5. +n1uiries ere also ade ith the Patent Office of :!electa:7 after an official of

the Patent referred to index cards inforation as furnished to the effect that defendant could

re%ister the nae :!electa: ith the Bureau of Patents 4t.s.n. ,p., id5. Accordin%l*, thecorrespondin% petition for re%istration of trade-ar0 as filed 4Exhs. ),)-A, Exhibit )-B5.

efendant actuall* operated its business factor* on une 8@, '()), hile the petition for

re%istration of trade-ar0 :!electa: as filed ith the Philippine Patent Office onl* on!epteber ', '()), for the Philippine Patent Office infored the defendant that the nae

should first be used before re%istration 4t.s.n. p.> ,id.5. /he factor* of defendant is located at

/ua6on Avenue, Northern 2ills, Malabon, Ri6al, shoin% plainl* on its all facin% the streets

the nae :!EEC/A B+!CI+/ COMPANJ, +NC.: 4Exhs. ;, ;-a ;-B, t.s.n., p. (, id.5. +t issi%nificant to note that Eulalio Arce, Mana%in% Partner of the plaintiff resided and resides near

the defendant:s factor*, onl* around ')@ eters aa* 7 in fact, Arce use to pass in front of the

factor* of defendant hile still under construction and up to the present tie 4t.s.n., pp. (, '@,id.5. Neither Eulalio Arce nor an* other person in representation of the plaintiff coplained to

the defendant about the use of the nae :!electa Biscuit: until of the present coplaint.

/here are other factories usin% :!electa as trade-ar0 for biscuit 4t.s.n., p. '87 Exhs. , -A,-B7

Exhibit >, >-A, >-B7 Exhibits Exhibit (, (-A, (-B57 defendant in fact uses different 0inds of trade-ar0 4Exhibit '@, '@-A, to '@-, t.s.n., p. '5.

/he biscuits, coo0ies, and crac0ers anufactured and sold b* defendant are rapped in

cellophane pouches and place inside tin can 4Exh. ''7 t.s.n. p. '(57 the products of defendant are

sold throu%h the len%th and breadth of the Philippines throu%h a%ents ith ore than one

hundred ;@@ stores as custoers bu*in% on credit 4t.s.n.5 pp. '(, 8@, Exh. '87 t.s.n., p. '@, une8@, '()>5. efendant eplo*s ore than one hundred 4'@@5 laborers and eplo*ees presentl*

althou%h it started ith around sevent* 4@5 eplo*ees and laborers 4t.s.n. p. 8957 its presentcapitali6ation full* paid is /o 2undred /hirt* <our /housand Pesos 4P8&9,@@@.@@.5additional

capitali6ation:s ere dul* authori6ed b* the !ecurities and Exchan%e Coission 4Exhs. '&,

'&-A5 there as no coplaint hatsoever fro plaintiff sa defendant:s business %roin%

bi%%er and bi%%er and flourishin% 4t.s.n., p. 8'57 hen plaintiff filed its coplaint.

efendant advertises its products throu%h radio broadcast and spot announceent 4Exhs. '9,

'9-A to '9-7 inclusive Exhs. '), ')-A, ')-B, ')-C7 Exh. ';, ';-A, ';-B to ';-E, inclusive7

Exhs. ', '-B to '-, inclusive57 the broadcasts scripts announced therein throu%h the radio

clearl* sho, aon% others, that !electa Biscuit are anufactured b* !electa Copan*, +nc. at/ua6on Avenue, Northern 2ills, Malabon, Ri6al, ith /elephone KNo. 8-'&-8 4Exhs. 8&-A 8&-

B, 8&-, 8&-E, 8&-<5.

Besides the si%nboard, :!electa Biscuit Copan*, +nc.: on the buildin% itself, defendant has

installed si%nboard alon% the hi%ha*s to indicate the location of the factor* of defendant4Exhs. '>, '>-A57 deliver* truc0s defendant are plainl* carr*in% si%nboards !electa Biscuit

Copan*, +nc., /ua6on Avenue, Northern 2ills Malabon, Ri6al, /elephone No. 8-'&-8 4Exhs.

'(, '(-A, '(-B, '(-C '(-,'(-E,'(-<5. efendant is usin% odern achineries in its biscuitfactor* 4Exhs. 8@, 8@-A, 8@-B, '(-C, 8@-, 8@-E5. /he defendant sells its products thou%hout



8@-C, 8@-,8@-E5. /he defendant sells its product throu%hout the Philippines, includin% u6on ,

#isa*as, Mindanao7 its custoers count, aon% others, ;@@ stores bu*in% on credit7 its stores

bu*in% on cash nuber around )@ 4t.s.n.5, p. '@5. !ales in Manila and suburbs are inial,

4Exh. '85. efendant is a holesaler and not a retailer of biscuits, coo0ies and crac0ers. /his isthe nature of the operation of the business of the defendant.

At the outset one cannot but note that in the to cases appealed before us hich involve the sae

parties and the sae issues of fact and la, the Court a quo and the irector of Patents have renderedcontradictor* decisions. hile the forer is of the opinion that the ord :!EEC/A: has been used b*the petitioner, or its predecessor-in-interest, as a trade-ar0 in the sale and distribution of its dair* and

ba0er* products as earl* as '(&& to the extent that it has ac1uired a proprietar* connotation so that to

allo respondent to use it no as a trade-ar0 in its business ould be an usurpation of petitioner:s%oodill and an infrin%eent of its propert* ri%ht, the irector of Patents entertained a contrar*

opinion. 2e believes that the ord as used b* the petitioner functions onl* to point to the place of

business or location of its restaurant hile the sae ord as used b* respondent points to the ori%in of the products its anufactures and sells and he predicates this distinction upon the fact that hile the

%oods of petitioner are onl* served ithin its restaurant or sold onl* on special orders in the Cit* of

Manila, respondent:s %oods are read*-ade and are for sale throu%hout the len%th and breadth of the

countr*. 2e is of the opinion that the use of said trade-ar0 b* respondent has not resulted in confusionin trade contrar* to the findin% of the court a quo. hich of this opinions is correct is the issue no for

deterination.

+t appears that Raon Arce, predecessor-in-interest of petitioner, started his il0 business as earl* as'(&&. 2e sold his il0 products in bottles covered ith caps on hich the ords :!EEC/A <RE!2

M+D: ere inscribed. Expandin% his business, he established a store at epanto !treet, Cit* of Manila,

here he sold, in addition to his products, ice crea, sandiches and other food products, placin% ri%ht

in front of his establishent a si%nboard ith the nae :!EEC/A: inscribed thereon. !pecialcontainers ade of tin cans ith the ord :!EEC/A: ritten on their covers ere used for his

products. Bottle ith the sae ord ebossed on their sides ere used for his il0 products. /he

sandiches he sold and distributed ere rapped in carton boxes ith covers bearin% the sae nae.

2e used several cars and truc0s for deliver* purposes on the sides of hich ere ritten the saeord. As ne products ere produced for sale, the sae ere placed in containers ith the sae nae

ritten on their covers. After the ar, he added to his business such ites as ca0es, bread, coo0ies, pastries, and assorted ba0er* products. /hen his business as ac1uired b* petitioner, a co-partnership

or%ani6ed b* his sons, the purposes of hich are to conduct a first class restaurant business7 to en%a%e

in the anufacture and sale of ice crea, il0, ca0es and other products7 and to carr* on such other

le%itiate business as a* produce profit.

/he fore%oin% unista0abl* sho that petitioner, throu%h its predecessor-in-interest, had ade use of

the ord !EEC/A not onl* as a trade-nae indicative of the location of the restaurant here it

anufactures and sells its products, but as trade-ar0 is used. /his is not onl* in accordance ith its

%eneral acceptation but ith our la on the atter. /rade-ar0: or trade-nae:, distinction bein% hi%hl* technical, is si%n, device, or ar0 b* hich

articles produced are dealt in b* particular person or or%ani6ation are distin%uished or

distin%uishable fro those produced or dealt in b* other. 4Church of $od v. /olinson Church

of $od, 89 ! 8d, ;&,;95

A :trade-ar0: is a distinctive ar0 of authenticit* throu%h hich the erchandise of a

particular producer or anufacturer a* be distin%uished fro that of others, and its sole

function is to desi%nate distinctivel* the ori%in of the products to hich it is attached.

4Re*nolds H Re*nolds Co. v. Nordic, et. al., ''9< 8d, 8>5



/he ter :trade-ar0: includes an* ord, nae, s*bol, eble, si%n or device or an*

cobination thereof adopted and used b* a anufacturer or erchant to identif* his %oods and

distin%uish the fro those anufactured, sold or dealt in b* others. 4!ection &>, Republic Act

No. ';;5.

#eril*, the ord :!EEC/A: has been chosen b* petitioner and has been inscribed on all its products to

serve not onl* as a si%n or s*bol that a* indicate that the* are anufactured and sold b* it but as a

ar0 of authenticit* that a* distin%uish the fro the products anufactured and sold b* other erchants or businessen. /he irector of Patents, therefore, erred in holdin% that petitioner ade use

of that ord erel* as a trade-nae and not as a trade-ar0 ithin the eanin% of the la.'

/he ord :!EEC/A:, it is true, a* be an ordinar* or coon ord in the sense that a* be used or eplo*ed b* an* one in prootin% his business or enterprise, but once adopted or coined in connection

ith one:s business as an eble, si%n or device to characteri6e its products, or as a bad%e of

authenticit*, it a* ac1uire a secondar* eanin% as to be exclusivel* associated ith its products and

business.8 +n this sense, its used b* another a* lead to confusion in trade and cause daa%e to its

business. And this is the situation of petitioner hen it used the ord :!EEC/A: as a trade-ar0. +n

this sense, the la %ives its protection and %uarantees its used to the exclusion of all others a 4$. H C.

Merria Co. v. !aalfield, '(> <. &;(, &&5. And it is also in the sense that the la postulates that /heonership or possession of a trade-ar0, . . . shall be reco%ni6ed and protected in the sae anner and

to the sae extent, as are other propert* ri%hts 0non to the la, thereb* %ivin% to an* person entitled

to the exclusive use of such trade-ar0 the ri%ht to recover daa%es in a civil action fro an* personho a* have sold %oods of siilar 0ind bearin% such trade-ar0 4!ections 8-A and 8&, Republic Act

No. ';;, as aended5.

/he ter :!EEC/A: a* be placed at par ith the ords An% /iba* hich this Court has

considered not erel* as a descriptive ter ithin the eanin% of the /rade-ar0 a but as a fancifulor coined phrase, or a trade-ar0. +n that case, this Court found that respondent has constantl* used the

ter An% /iba* , both as a trade-ar0 and a trade-nae, in the anufacture and sale of slippers,

shoes and indoor baseballs for tent*-to *ears before petitioner re%istered it as a trade-nae for pants

and shirts so that it has perfored durin% that period the function of a trade-ar0 to point distinctivel*,or b* its on eanin% or b* association, to the ori%in or onership of the ares to hich it applies.

And holdin% that respondent as entitled to protection in the use of that trade-ar0, this Court adethe folloin% coent3

/he function of a trade-ar0 is to point distinctivel*, either b* its on eanin% or b*

association, to the ori%in or onership of the ares to hich it is applied. :An% /iba*: as used

b* the respondent to desi%nate his ares, had exactl* perfored that function for tent*-to*ears before the petitioner adopted it as a trade-ar0 in her on business. :An% /iba*: shoes and

slippers are, b* association, 0non throu%hout the Philippines as products of the :An% /iba*

factor* oned and operated b* the respondent. Even if :An%/iba*:, therefore, ere not capableof exclusive appropriation as a trade-ar0, the application of the doctrine of secondar* eanin%

could nevertheless be full* sustained because, in an* event, b* respondent:s lon% and exclusiveappropriation ith reference to an article on the ar0et, because %eo%raphicall* or otherise

descriptive, i%ht nevertheless have been used so lon% and exclusivel* b* one producer ithreference to his article that, in that trade and to that branch of the purchasin% public, the ord or

phrase has coe to ean that article as his product. 4An% v. /eodoro, supra.5.

/he rationale in the An% /iba* case applies on all fours to the case of petitioner.

But respondent clais that it adopted the trade-ar0 :!EEC/A: in %ood faith and not precisel* toen%a%e in unfair copetition ith petitioner. +t tried to establish that respondent as or%ani6ed as a



corporation under the nae of !electa Biscuit Copan*, +nc. on March 8, '()) and started operations

as a biscuit factor* on une 8@, '())7 that the nae :!EEC/A: as chosen b* the or%ani6ers of

respondent ho are Chinese citi6ens as a translation of the Chinese ord Chin% !uan hich eans

apili in /a%alo%, and !elected in En%lish7 that , thereupon, it re%istered its articles of incorporation ith the !ecurities and Exchan%e Coission and the nae :!EEC/A: as a business

nae ith the Bureau of Coerce hich issued to it Certificate of Re%istration No. )))(97 and that it

also re%istered the sae trade-nae ith the Bureau of +nternal Revenue and too0 steps to obtain a patent fro the Patent Office b* filin% ith it as application for the re%istration of said trade-nae.

/he su%%estion that the nae :!EEC/A: as chosen b* the or%ani6ers of respondent erel* as a

translation fro a Chinese ord Chin% !uan eanin% apili in the dialect is betra*ed b* the ver*

anner of its selection, for if the onl* purpose is to a0e an En%lish translation of that ord and not tocopete ith the business of petitioner, h* chose the ord :!EEC/A:, a !panish ord, and not

!elected, the En%lish e1uivalent thereof, as as done b* other ell-0non enterprisesL +n the ords

of petitioner:s counsel, h* ith all the ords in the En%lish dictionar* and all the ords in the!panish dictionar* and all the phrases that could be coined, should defendant-appellant 4respondent5

choose :!EEC/A: if its purpose as not and is not to fool the people and to daa%e plaintiff-

appelleeL +n this respect, e find appropriate the folloin% coent of the trial court3

Eventuall*, li0e the plaintiff, one is tepted to as0 as to h* ith the richness in ords of theEn%lish lan%ua%e and ith the affluence of the !panish vocabular* or, for that atter, of our

on dialects, should the defendant choose the controverted ord !electa, hich has alread*

ac1uired a secondar* eanin% b* virtue of plaintiff:s prior and continued use of the sae as atrade-ar0 or trade-nae of its productsL /he explanation %iven b* !* 2ap, ana%er of the

defendant, that the ord :!electa: as chosen for its ba0er* products b* the or%ani6ers of said

copan* fro the Chinese ord :Chin% !uan: eanin% :apili:, hich in En%lish translation , is

to sa* the least, ver* ea0 and untenable. !* 2ap hiself aditted that he had 0non EulalioArce, the person ana%in% plaintiff:s business, since '()97 that since he be%an to reside at '@th

Avenue, $race Par0, he had 0non the !electa Restaurant on A6carra%a !treet and ee* Blvd.

and that he even had occasion to eat in one of the restaurants of the plaintiff. All of these

circustances tend to conspire in inducin% one to doubt defendant:s otive for usin% the saeord !electa for its ba0er* products. /o allo the defendant here to use the ord !electa in

spite of the fact that this ord has alread* been adopted and exploited b* Raon Arce and b*his fail* thru the or%ani6ation of Arce !ons and Copan*, for the aintenance of its %oodill,

for hich said plaintiff and its predecessor have spent tie, effort and fortune, is to perit

business pirates and buccaneers to appropriate for theselves and to their profit and advanta%e

the trade naes and trade ar0s of ell established erchants ith all their attendant %ood illand coercial benefit. Certainl*, this cannot be alloed, and it becoes the dut* of the court

to protect the le%itiate oners of said trade-naes and trade-ar0s, for under the la, the

sae constitute one 0ind of propert* ri%ht entitled to the necessar* le%al protection.

Other points raised b* respondent to sho that the trial court erred in holdin% that the adoption b* it of the ord :!EEC/A: is tantaount to unfair copetition are3 4'5 that its products are biscuits, crac0ers,

and coo0ies, rapped in cellophane pac0a%es, place in tin containers, and that its products a* last a

*ear ith out spoila%e, hile the ice crea, il0, ca0es and other ba0er* products hich petitioner anufactures last onl* for to or three da*s7 485 that the sale and distribution of petitioner:s products

are on retail basis, liited to the Cit* of Manila and suburbs, and its place of business is locali6ed at

A6carra%a, corner of epanto !treet and at ee* Blvd., Manila, hile that of respondent is on aholesale basis, extendin% throu%hout the len%th and breadth of the Philippines7 4&5 that petitioner:s

si%nboard on its place of business reads :!EEC/A: and on its deliver* truc0s !electa, Fualit*



Ala*s, Restaurant and Caterer, A6carra%a, ee* Blvd., Balintaa0 and /elephone nuber, in

contrast ith respondent:s si%nboard on its factor* hich reads !electa Biscuit Copan*, +nc., and on

its deliver* truc0s !electa Biscuit Copan*, +nc., /uason Avenue, Malabon, Ri6al, /elephone No. 8-

'&-87 495 that the business nae of petitioner is different fro the business nae of respondent7 4)5that petitioner has onl* a capital investent of P8),@@@.@@ hereas respondent has a full* paid-up

stoc0 in the aount of P8&9,@@@.@@ out of the P)@@,@@@.@@ authori6ed capital, 4;5 that the use of the

nae :!EEC/A: b* respondent cannot lead to confusion in the business operation of the parties.e have read carefull* the reasons advanced in support of the points raised b* counsel in an effort toa0e inroads into the findin%s of the court a quo on unfair copetition, but e believe the to be

substantial and untenable. /he* appear to be ell ansered and refuted b* counsel for petitioner in his

brief, hich refutation e do not need to repeat here. !uffice it to state that e a%ree ith theauthorities and reasons advanced therein hich incidentall* constitute the best support of the decision

of the court a quo.

ith re%ard to the clai that petitioner failed to present sufficient evidence on the contract of lease of

the business fro its predecessor-in-interest, e find that under the circustances secondar* evidenceis adissible.

+n vie of the fore%oin%, e hold that the irector of Patents coitted an error in disissin% theopposition of petitioner and in holdin% that the re%istration of the trade-ar0 :!EEC/A: in favor of

respondent ill not cause daa%e to petitioner, and conse1uentl*, e hereb* reverse his decision.

Consistentl* ith this findin%, e hereb* affir the decision of the court a quo rendered in $.R. No. -'(>'. No costs.

Paras, C.J., Bengzon, Labrador, Reyes, J.B.L. Barrera, Gutierrez David, Paredes and Dizon., JJ.,

concur.

Padilla, and Concepcion, JJ., too0 no part.

%oo&no&'(

' A trade-ar0 is %enerall* described as a si%n , device, or ar0 b* hich the articles produced

or dealt in b* a particular person or or%ani6ation are distin%uished or distin%uishable fro those produced or dealt in b* others,and ust be affixed to the %oods or articles, hile a trade-nae is

descriptive of the anufacturer or dealer hiself as uch as his on nae is and fre1uentl*

includes the nae of the placehere the business is located7 it involves the individualit* of thea0er or dealer for protection in trade, and to avoid confusion in business, and to secure the

advanta%es of a %ood reputation7 it is ore popularl* applied to the %ood ill of a business,and

need not be affixed to the %oods sold. +n other ords it is not re%arded as a trade-ar0 in thestrict technical sense. )8 A. ur., p. )@, et se1, ;& C.., p.&88, et se1. 4Dat6 ru% Co. #.

Dat6, 8' 8d. 8>;,8>(5

8 /his doctrine is to the effect that a ord or phrase ori%inall* incapable of exclusive

appropriation ith reference to an article on the ar0et, because %eo%raphicall* or otherisedescriptive, i%ht nevertheless have been used so lon% and so exclusivel* b* one producer ith

reference to his article that , in that trade and to that branch of the purchasin% public, the ord

or phrase has coe to ean that the article as his product. 4$H C Merria Co. vs. !aalfield,'(> <. &;(, &&.5 4An% v. /eodoro, 9 Phil. )@, )&5

Documents

1. Arce Sons and Company vs Selecta Biscuit Company