Conviction overturned in JOLLIBEE Case

Philippines
The Court of Appeal has overturned a 2007 decision in which it had affirmed the conviction of Richard Chua for violation of the Intellectual Property Code.
 
Jollibee Food Corporation, the owner of the JOLLIBEE mark and bee logo, brought a criminal action against Chua under Section 170 of the code for using the trademark JOLILBEE and bee logo on his footwear products.
 
The Court of Appeals not only affirmed the 2004 conviction of Chua, but also increased the two-year prison term imposed by the Manila Regional Trial Court to a sentence of two to five years. The lower court had also ordered that:
  • more than 2,000 pairs of shoes bearing the trademark JOLILBEE be destroyed; and
  • Chua pay a fine of Ps100,000. 
In its first decision, the Court of Appeals held that Chua's JOLILBEE mark was almost identical to the JOLLIBEE mark, since the one-letter difference between the marks was clearly insufficient to avoid confusion.
 
Chua argued that there was no likelihood of confusion between the marks, since:
  • Jollibee was engaged in the food business, while he was in the business of selling shoes; and
  • Jollibee’s food products were sold at Jollibee outlets, while his footwear products were sold at his store in Binondo, Manila.
The Court of Appeals relied on the Supreme Court decision in McDonald’s Corporation v LC Big Mak Burger Inc (Case GR 143993, August 18 2004), in which the court held that a party will be liable for infringement if it uses the dominant feature of a registered trademark without the consent of the trademark owner. Based on the ‘dominant feature’ test, the court held that the logo used on Chua’s footwear was the same as that used by Jollibee.  
 
The court also pointed out that Jollibee had exclusive rights in its mark and logo under the code. Since Chua did not obtain Jollibee’s consent to use his mark, the court held that he was liable for trademark infringement (for further details please see "Stiff prison term imposed for imitating JOLLIBEE logo").
 
Chua filed a motion for reconsideration of the decision, which was assigned to another division of the court. The court reversed Chua’s conviction on the grounds that since Jollibee’s products did not compete with Chua’s footwear, use of the JOLILBEE mark by Chua was unlikely to mislead consumers into thinking that Chua’s footwear originated from Jollibee.
 
The court may have relied on the Supreme Court decision in Canon Kabushiki Kaisha v NSR Rubber Corporation (Case GR 120900, July 20 2000), in which the court held that use of the trademark CANNON for rubber sandals was unlikely to cause confusion with the CANON mark for paint, chemical products, toner and dyestuff.
 
Jollibee could have argued that the Court of Appeals itself held that the JOLLIBEE mark and bee logo are well known. Under the code, a well-known mark which is registered in the Philippines may be infringed by the use of an identical or similar mark for non-similar goods. Therefore, the issue was not whether there was a likelihood of confusion between the marks. Under Section 123(1) of the code, the test is whether:
"use of the mark in relation to those goods or services indicates a connection between those goods or services and the owner of the registered mark, and the interests of the trademark owner are likely to be damaged by such use."
Vicente B Amador, Sycip Salazar Hernandez & Gatmaitan, Manila

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