CASE DIGEST

COMMERCIAL LAW 2
TRADEMARK

MCDONALD'S CORPORATION, et al. vs. L.C. BIG MAK BURGER,

FACTS:
Petitioner, Mcdonald's Corporation is a global chain of fast-food
restaurants organized under the laws of Delaware, United States. It
owns “Big Mac” mark for its double-decker hamburger sandwich
registered with the US Trademark Registry in 1979. Also, they applied
for the registration of the same mark in the Principal Register of the
then Philippine Bureau of Patents, Trademarks and Technology
("PBPTT"), now the Intellectual Property Office ("IPO"). Pending
approval of its application, they introduced the “Big Mac” hamburger
sandwich in the Philippine market in 1981. PBPTT allowed registration
of the "Big Mac" mark in the Principal Register in 1985 based on its
Home Registration in the United States. From 1982 -1990, McDonalds
displayed and advertised “Big Mac” mark.
Respondent, L.C. Big Mak Burger is a domestic corporation which
operates fast-food outlets and snack vans in Metro Manila and nearby
provinces. Included in the corporation’s menu are hamburger
sandwiches and other food items.
In 1988, the respondent applied with the PBPTT for the
registration of “Big Mak” mark for its hamburger sandwiches, to which
Mcdonald's Corporation opposed on the ground that "Big Mak" was a
colorable imitation of its registered "Big Mac" mark for the same food
product and informed the respondents that they have the exclusive
right to the “Big Mac” mark and requested the respondent to desist
from using “Big Mac” mark or any similar mark.
The respondent did not respond which prompted the petitioner
to file a case against the respondents with the trial court for trademark
infringement and unfair competition.
In respondent’s Answer, the latter admitted that they used the
name “Big Mak Burger” for their fast-food business and pointed out
that Mc Donalds have no exclusive right with the mark because
another corporation registered the same mark in 1979 prior to its
registration in 1985. On the other hand, petitioner asserted that while
the Isaiyas Group and Topacio did register the "Big Mac" mark ahead
of McDonald's, the Isaiyas Group did so only in the Supplemental
Register of the PBPTT and such registration does not provide any
protection. McDonald's disclosed that it had acquired Topacio's rights
to his registration in a Deed of Assignment.
The RTC ruled in favor of the petitioner. However, the Court of
Appeals reversed and set aside the trial court’s decision.
ISSUE:
Whether or not the respondent corporation is liable for
trademark infringement and unfair competition.

RULING:
To establish trademark infringement, the following elements
must be shown: (1) the validity of plaintiff's mark; (2) the plaintiff's
ownership of the mark; and (3) the use of the mark or its colorable
imitation by the alleged infringer results in "likelihood of confusion." Of
these, it is the element of likelihood of confusion that is the gravamen
of trademark infringement.
The Court finds that petitioners have duly established
McDonald's exclusive ownership of the "Big Mac" mark. Although
Topacio and the Isaiyas Group registered the "Big Mac" mark ahead of
McDonald's, Topacio, as petitioners disclosed, had already assigned his
rights to McDonald's. The Isaiyas Group, on the other hand, registered
its trademark only in the Supplemental Register. A mark which is not
registered in the Principal Register, and thus not distinctive, has no
real protection. The registration in the Supplemental Register is not
even prima facie evidence of the validity of the registrant's exclusive
right to use the mark on the goods specified in the certificate.
It is an undisputed fact that respondents use their "Big Mak"
mark on hamburgers, the same food product that petitioners' sell with
the use of their registered mark "Big Mac." Whether a hamburger is
single, double or triple-decker, and whether wrapped in plastic or
styrofoam, it remains the same hamburger food product. Even
respondents' use of the "Big Mak" mark on non-hamburger food
products cannot excuse their infringement of petitioners' registered
mark, otherwise registered marks will lose their protection under the
law.
Applying the dominancy test, the Court finds that respondents'
use of the "Big Mak" mark results in likelihood of confusion. Aurally the
two marks are the same; phonetically and numbers of letters it
consists. Clearly, respondents have adopted in "Big Mak" not only the
dominant but also almost all the features of "Big Mac." Applied to the
same food product of hamburgers, the two marks will likely result in
confusion in the public mind.
As regards with unfair competition, the essential elements of
an action for unfair competition are (1) confusing similarity in the
general appearance of the goods, and (2) intent to deceive the public
and defraud a competitor. Unfair competition includes the passing
of goods with or without trademark infringement.
In this case, the respondent has no notice to the public that “Big
Mak” hamburger sandwich are product of L.C. Big Mak Burger Inc.
Moreover, they belatedly included in their packaging the name of their
corporation, hence it is only an after-thought designed to exculpate
them from their unfair business conduct. This clearly shows
respondents' intent to deceive the public.
With the foregoing, the Court granted the petition and reinstated
the decision rendered by the trial court.

Doctrine: Trademark infringement occurs when a trademark’s

Notes:
– Trademark infringement involves the use of a colorable
imitation of a registered trademark, without the owner’s consent, likely
to confuse consumers.
– Unfair competition involves passing off one’s goods as those of
another with an intention to deceive.
– Tests in determining LIKELIHOOD CONFUSION:
“dominancy test” focuses on the dominant, similar features of the
trademarks, while “holistic test” requires the court to consider the
entirety of the marks as applied to the products, including the labels
and packaging, in determining confusing similarity.