GALLO marks for wine and cigarettes to coexist, rules court

In Mighty Corporation v E & J Gallo Winery, the Supreme Court of the Philippines has struck a blow against the owners of internationally well-known marks by holding that the use of the mark GALLO for tobacco products does not infringe the GALLO mark for wine (Case GR 154342, July 14 2004).

E & J Gallo Winery (Gallo) is a Californian producer of wines and brandy products, which it sells across the world under the GALLO and ERNEST & JULIO GALLO trademarks. Gallo registered the GALLO trademark in the Philippines on November 16 1971, and used it for the first time in that country in 1974 within the US military facilities and outside the bases in 1979.

Mighty Corporation manufactures and sells tobacco products for which it has used the GALLO mark since 1973. However, it has not registered the mark.

After years of peaceful coexistence between the marks, Gallo filed a lawsuit claiming that Mighty's trademark infringed its GALLO mark for wine. The trial court upheld the claim, as did the appellate court.

On further appeal, the Supreme Court reversed. It ruled that the following factors should be taken into account when considering an infringement claim:

• the resemblance between the marks;
  
  
• the similarity of the goods to which the trademarks apply;
  
  
• the likely effect of concurrent use of the marks on the purchaser; and
  
  
• the plaintiff's express or implied consent (where relevant), and other fair and equitable considerations.

The court found that the dominant feature of the cigarette trademark was the device of a large rooster facing left ('gallo' meaning rooster in Spanish), outlined in black against a gold background with the word element written in bold characters. In contrast, the wine trademark is a word only mark depicted in different fonts, sizes and styles, and used on different labels. The court also pointed out that the wine labels included the phrase "vinted and bottled by Ernest & Julio Gallo, Modesto, California", while the cigarette packs carried the words "made by Mighty Corporation".

The court also held that other features, such as the colour schemes and artwork meant that the overall impression given by the marks was sufficiently different to avoid any likelihood of confusion. It also pointed out that in relation to the wine mark, the word 'Gallo' referred to the surname of the producers of the wine while in relation to the cigarette mark it referred to the Spanish word for rooster.

Using 10 different criteria, including the nature and cost of the goods, and the goods' quality and nature of their packaging, the court concluded that there was no likelihood of confusion between the two parties' goods. From there, the court concluded that the mark GALLO for wine was not protected under Article 6 of the Paris Convention for the Protection of Industrial Property as the guidelines implementing Article 6 in the Philippines (Minister of Trade and Industry Memorandum of October 25 1983) require that the marks at issue be used on identical or similar goods.

Lastly, the court invoked equitable considerations. In view of the fact that the rival marks had coexisted peacefully for over 20 years, Gallo's delay in enforcing its rights tipped the balance of equity, justice and fairness in favour of Mighty.

Gallo has moved for reconsideration.

Llewellyn L Llanillo, SyCip Salazar Hernandez & Gatmaitan, Manila