Supreme Court stubs out Tabacalera's infringement claims

In Compania General de Tabacos de Filipinas v Tabaqueria de Filipinas Inc (Case 16151, July 23 2009), the Supreme Court of the Philippines has held that consumers were unlikely to confuse Compania General de Tabacos de Filipinas's cigars with those of Tabaqueria de Filipinas Inc.

Compania General de Tabacos de Filipinas (better known as Tabacalera) is a tobacco company organized and existing under the laws of Spain. Tabacalera has registered 24 trademarks with the Bureau of Patents, Trademarks and Technology Transfer of the Philippine Department of Trade and Industry.
Respondent Gabriel Ripoll was an employee of Tabacalera for 28 years. In 1993 Ripoll organized Tabaqueria, a domestic corporation also engaged in the manufacture of tobacco products. Ripoll is the managing director of Tabaqueria.

Tabacalera filed an action with the Securities and Exchange Commission for the cancellation of the corporate name Tabaqueria. Tabacalera argued that the relevant public would be confused into believing that:
  • Tabaqueria was operated and managed by Tabacalera; or
  • Tabaqueria's business was approved, sponsored by or affiliated with Tabacalera.
Tabacalera also filed a criminal action for trademark infringement and unfair competition against Ripoll with the Department of Justice's Anti-piracy Taskforce. Tabacalera alleged that Tabaqueria had deliberately copied its trademarks so as to confuse the public into believing that Tabaqueria's cigars were the same as, or were somehow connected to, Tabacalera's products.
Tabacalera sought a preliminary injunction preventing Tabaqueria and Ripoll from manufacturing, distributing and/or selling their products. The trial court denied the injunction, holding that Tabacalera’s unfair competition claim was unsubstantiated and that the latter had failed to meet the requirements for a preliminary injunction - namely:

  • the infringement of plaintiff's rights is material and substantial;
  • the plaintiff's rights are clear and unmistakable; and
  • the plaintiff will suffer serious damage if the injunction is not granted.
In the criminal proceedings, the Department of Justice issued a resolution recommending that the unfair competition and trademark infringement claims be dismissed due to insufficiency of evidence.

In addition, the Department of Trade and Industry issued an order declaring that:

  • the overall appearance of the parties' products was not similar; and
  • consumers would not be confused into believing that Tabaqueria's cigars were somehow connected with Tabacalera.
In particular, the department pointed out that the TABACALERA mark is written in large white Roman letters on a red rectangular background with an inverted 'Z' design. The 'Z' design is used repeatedly so that it forms a chain surrounding the red rectangle. In contrast, Tabaqueria’s cigars are sold under the trademark FLOR DE MANILA, which is written in red letters on a white rectangular background. The white rectangle is itself set in a gold background surrounded by a red design that looks like a repetition of the letter 'P'. 
The case made its way to the Supreme Court. The court found that the products at issue were readily distinguishable due to the fact that:

  • they were sold under different trademarks (TABACALERA and FLOR DE MANILA);
  • the logos appearing on the products were different (Tabacalera’s logo was large and ornate, while Tabaqueria’s was small and simple); and 
  • the seals of guarantee on the products were different (Tabacalera’s seal was green and white and displayed horizontally, while that of Tabaqueria was gold and red and displayed vertically).
Furthermore, the court stated that cigar smokers would not be confused by the packaging of the goods - especially those who have been using Tabacalera products for a long time. Consequently, the court concluded that consumers were unlikely to be misled, deceived or confused into buying Tabaqueria’s products instead of Tabacalera's.
Vicente B Amador, Sycip Salazar Hernandez & Gatmaitan, Manila  

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