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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the passing off of one’s goods as those of another.
In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition fraudulent intent is essential.
In infringement of trademark the prior registration of the trademark is a prerequisite to the action, whereas in unfair competition registration is not necessary.
(Del Monte Corporation and Philippine Packing Corporation v. Court of Appeals, G.R. No. L-78325, January 25, 1990)
As held in the case of Mighty Corporation and La Campana Fabrica de Tabao, Inc. v. E. & J. Gallo Winery and The Andersons Group, Inc. (G.R. No. 154342, July 14, 2004), a person shall not be permitted to misrepresent his goods or his business as the goods or business of another. This principle is the basis of the creation of the laws on trademark infringement and unfair competition.
What is trademark infringement?
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.” (McDonald’s Corp. v. L.C. Big Mak Burger, G.R. No. 143993, August 18, 2004)
Republic Act No. 8293 or the Intellectual Property Code provides that:
“Any person who shall, without the consent of the owner of the registered mark:
(1) Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or
(2) Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth; xxx” (Section 155, Part III, Intellectual Property Code)
What is unfair competition?
Unfair competition has been defined as the act of any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result. (Section 1(t), Rule I, IRR on Administrative Complaints for Violations of Laws Involving Intellectual Property Rights)
The Intellectual Property Code provides that:
“Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.” (Section 168.2, Part III, Intellectual Property Code)
Distinctions between trademark infringement and unfair competition
In the case of Del Monte Corporation and Philippine Packing Corporation v. Court of Appeals (G.R. No. L-78325, January 25, 1990), the Supreme Court provided the distinctions between infringement of trademark and unfair competition. These distinctions are:
(1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the passing off of one’s goods as those of another.
(2) In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition fraudulent intent is essential.
(3) In infringement of trademark the prior registration of the trademark is a prerequisite to the action, whereas in unfair competition registration is not necessary.
Trademark infringement or unfair competition?
In the case of McDonald’s Corp. v. L.C. Big Mak Burger (G.R. No. 143993, August 18, 2004), it has been held that trademark infringement is a form of unfair competition. It constitutes unfair competition when there is not merely a likelihood of confusion, but also actual or probable deception on the public because of the general appearance of the goods.
It must be noted that there can be trademark infringement without unfair competition when the infringer discloses on the labels containing the mark that he manufactures the goods, thus preventing the public from being deceived that the goods originate from the trademark owner.
The law on unfair competition is held to be broader and more inclusive than the law on trademark infringement. Trademark infringement is more limited but it recognizes a more exclusive right derived from the trademark adoption and registration by the person whose goods or business is first associated with it.
Hence, even if one fails to establish his exclusive property right to a trademark, he may still obtain relief on the ground of his competitor’s unfairness of fraud. (Mighty Corporation and La Campana Fabrica de Tabao, Inc. v. E. & J. Gallo Winery and The Andersons Group, Inc., G.R. No. 154342, July 14, 2004)
Read also: How is the ownership of trademark acquired?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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