Faberge, Inc. vs. IAC

A certificate of trademark registration confers an exclusive right only over the goods specified in the certificate; an identical or similar mark may be registered by another for non-competing, unrelated goods if there is no likelihood of confusion, mistake, or deception of the purchasing public.

Faberge, Incorporated manufactured and sold a line of men’s cosmetics and toiletries under the trademark “BRUT,” registered for after-shave lotion, shaving cream, deodorant, talcum powder, and toilet soap. During the pendency of Faberge’s application for the mark “BRUT 33 and DEVICE” for additional personal care products, Co Beng Kay, doing business under Webengton Garments Manufacturing, sought registration of “BRUTE” for men’s briefs. Faberge opposed on the ground of confusing similarity and potential injury to its established goodwill.

• Prior Trademark Registration and Use: Faberge registered the trademark “BRUT” for after-shave lotion, shaving cream, deodorant, talcum powder, and toilet soap. It was also prosecuting an application for “BRUT 33 and DEVICE” covering antiperspirant, personal deodorant, cream shave, after shave/shower lotion, hair spray, and hair shampoo. The mark “BRUT” as shown on its product containers was predominantly green with a blue and white band, bearing the name “FABERGE” and a notation “Creme Shave.”

• The Opposed Application: Co Beng Kay applied to register “BRUTE” solely for men’s briefs. The sample label prominently featured the representation of a muscular man, the word “BRUTE,” and the notation “Bikini Brief,” together with pictorial representations of briefs.

• The Alleged Expansion Application: Faberge claimed it had a pending application to register “BRUT 33 and DEVICE” for briefs, which it argued demonstrated an intent to expand the brand into the same product category. Private respondent belied this, asserting the supposed application was not among the documents on file with the Patent Office.

• Physical Attributes of the Marks: The Director of Patents found the overall appearances of the two marks “grossly different.” Faberge’s “BRUT” container was predominantly green with a blue and white band, while Co Beng Kay’s “BRUTE” packaging displayed a muscular man and brief illustrations that unequivocally suggested a product of men’s underwear. The bare word “BRUT” meant “dry” or “to browse,” whereas “BRUTE” connoted “ferocious, sensual” and, in Latin, “heavy.”

• Confusing Similarity: Petitioner argued that the marks “BRUT,” “BRUT 33,” and “BRUTE” are similar in appearance, sound, and style of presentation, sufficient to cause confusion, mistake, and deception among buyers as to the source of the goods.

• Likelihood of Confusion in Common Outlets: Petitioner contended that both briefs and men’s cosmetics are sold in the same retail outlets, such as department stores and haberdasheries, and may be placed side by side in a “Men’s Accessories” section, making confusion likely.

• Goodwill and Unfair Advantage: Petitioner maintained that allowing “BRUTE” on briefs would enable private respondent to cash in on the immense goodwill Faberge had built over a long period, and that inferior quality briefs could damage Faberge’s business reputation.

• Inapplicability of ESSO and PRC Cases: Petitioner asserted that the Intermediate Appellate Court could not rely on the ESSO and PRC rulings because the same court had earlier distinguished those cases from the facts at bar. Petitioner further urged that the proper rule was that in Ang v. Teodoro and Sta. Ana v. Maliwat, where relief was granted even for non-competing goods if the junior user’s goods were not remote from any product the senior user would be likely to make or sell.

• Repeal of Related-Goods Requirement: Petitioner argued that the repeal of Republic Act No. 166 (which contained the related-goods phrase) by Republic Act No. 666 removed the requirement of substantial descriptive similarity and underscored that unfair competition can exist even between non-competing goods under Ang v. Teodoro.

• Expansion of Brand: Petitioner claimed it had a pending application for “BRUT 33 DEVICE” for briefs, evidencing an intent to expand its mark to wearing apparel, thereby bringing the case within the Sta. Ana doctrine on natural expansion.

• Physical Dissimilarity of Marks: Private respondent stressed that, viewed in their entirety as they appear on the packages, the marks are grossly different; a would-be purchaser could easily distinguish BRUTE briefs from BRUT after shave lotion.

• Non-Competing and Unrelated Goods: Private respondent maintained that briefs and cosmetics do not belong to the same class, do not possess the same descriptive properties, and are entirely unrelated; thus, no likelihood of confusion existed as to the source of the goods.

• Limitation of Exclusive Right: Respondent argued that the certificate of registration limits a registrant’s exclusive right to the goods specified therein, and since Faberge never registered or used its marks for briefs, it could not prevent registration of “BRUTE” for that product.

• Controlling Precedents: Respondent relied on Hickok Manufacturing Co. v. Court of Appeals, Philippine Refining Co. v. Ng Sam, and ESSO Standard Eastern, Inc. v. Court of Appeals for the rule that identical trademarks may be used by different manufacturers for non-competing, unrelated products.

• Rejection of Expansion Claim: Respondent belied petitioner’s assertion of a pending application for briefs, pointing out that no such application appeared in the Patent Office records.

• Confusing Similarity and Likelihood of Confusion: Whether the use of the trademark “BRUTE” on men’s briefs is likely to cause confusion, mistake, or deception among purchasers as to the source of the goods, given Faberge’s prior registration of “BRUT” for cosmetics and toiletries.

• Relatedness of Goods: Whether briefs and the cosmetic/toiletry items covered by Faberge’s registration are related or competing goods such that the likelihood of confusion is enhanced.

• Scope of Exclusive Right under Section 20: Whether Section 20 of the Trademark Law limits the exclusive right of a registrant to the goods enumerated in the certificate, precluding the registrant from opposing registration of a similar mark for goods not specified therein.

• Reconciliation of Section 4(d) and Section 20: How the apparent conflict between Section 4(d) — which does not require that the goods be related — and Section 20 — which limits exclusive rights to specified goods — should be resolved.

• Applicability of Ang v. Teodoro and Sta. Ana v. Maliwat: Whether the principles in Ang v. Teodoro (on related goods under the old law) and Sta. Ana v. Maliwat (on natural expansion) should control, or whether the later doctrines in the ESSO and PRC cases apply.

• Evidentiary Value of Alleged Expansion Application: Whether petitioner’s claim of a pending application for “BRUT 33” for briefs, even if proven, suffices to establish an exclusive right or a zone of potential expansion that bars registration of “BRUTE” for the same goods.

• Confusing Similarity and Likelihood of Confusion: The marks were not confusingly similar when considered in their entireties as they appear on the respective labels. The “BRUTE” label featured a muscular man and brief illustrations that unmistakably indicated underwear, whereas Faberge’s “BRUT” container was predominantly green with the “FABERGE” name and a notation for shaving cream. A purchaser seeking briefs would not be misled into buying after-shave lotion or deodorant. The bare words also differed in meaning: “BRUT” suggested “dry,” while “BRUTE” connoted “ferocious, sensual,” further negating any likelihood of confusion.

• Relatedness of Goods: Briefs and the cosmetics/toiletries covered by Faberge’s registration are non-competing and entirely unrelated. They do not share the same descriptive properties or fall within the same class of merchandise. The mere possibility that both products might be displayed in a “Men’s Accessories” section of a department store did not make them related enough to generate a likelihood of confusion as to source, given the patent differences in the goods themselves.

• Scope of Exclusive Right under Section 20: Section 20 of the Trademark Law (R.A. 166, as amended) limits the registrant’s exclusive right to use the mark “in connection with the goods, business or services specified in the certificate.” Faberge’s certificate did not include briefs; thus, it could not prevent Co Beng Kay from registering “BRUTE” for that product. A certificate is not an omnibus registration covering all goods the registrant might later conceive.

• Reconciliation of Section 4(d) and Section 20: Section 20, which embodies the later and more specific provision, controls over the broader language of Section 4(d). Under the rule that a later clause expresses the latest and dominant purpose, Section 20’s limitation prevails, meaning that even if Section 4(d) does not explicitly require relatedness, the registrant’s exclusive right is confined to the goods enumerated in the certificate.

• Applicability of Ang v. Teodoro and Sta. Ana v. Maliwat: Ang v. Teodoro involved related goods (shirts and shoes) under the old Trademark Law and a finding of confusing similarity; it was distinguished on both the factual milieu and the applicable statutory framework. Sta. Ana v. Maliwat likewise involved marks that were concededly confusingly similar and goods that were not remote from the senior user’s probable expansion; here, the marks were not confusingly similar and petitioner failed to prove actual expansion or a registrable interest in briefs. The controlling precedents were Philippine Refining Co. v. Ng Sam, ESSO Standard Eastern, Inc. v. CA, and Hickok Manufacturing Co. v. CA, which allowed identical marks for non-competing, unrelated products.

• Evidentiary Value of Alleged Expansion Application: Even assuming petitioner had a pending application for “BRUT 33 and DEVICE” for briefs, a mere application does not vest an exclusive right that can be protected under the Trademark Law. It does not, by itself, enlarge the scope of the certificate or create a zone of natural expansion precluding another’s registration. The protection afforded by Section 20 attaches only upon issuance of a certificate specifying the goods.

• Exclusive Right Confined to Goods Specified in Certificate — Section 20 of Republic Act No. 166, as amended, explicitly limits the registrant’s exclusive right to use the mark to the goods, business, or services listed in the certificate of registration. A trademark registration does not operate as an omnibus reservation for all conceivable products; the registrant cannot object to the use of the same or a similar mark on goods outside the certificate’s specification, so long as no likelihood of confusion arises.

• Non-Competing, Unrelated Goods Doctrine — Where the goods of the prior registrant and the junior applicant are non-competing and entirely unrelated, the adoption of an identical or similar mark does not constitute infringement or a bar to registration, because there is no likelihood that the purchasing public will be confused as to the source or origin of the goods. This doctrine was applied following Philippine Refining Co. v. Ng Sam, ESSO Standard Eastern, Inc. v. CA, and Hickok Manufacturing Co. v. CA.

• Test of Confusing Similarity: Entirety of the Marks as They Appear — The likelihood of confusion must be determined by examining the marks in their entirety as they appear on the actual labels or packaging, considering the overall visual impression, accompanying words, devices, color schemes, and descriptive matter. Where the total presentations are “grossly different,” confusion is unlikely even if the bare word marks share some phonetic similarity.

• Rule of Statutory Construction: Later Clause Prevails — When two provisions of a statute appear to conflict, the clause that comes later in the text is presumed to express the latest and dominant legislative intent and shall be given paramount significance. Applying this rule, Section 20’s limitation on the scope of exclusive rights controls over the broader language of Section 4(d) of the same law.

• “[T]he certificate of registration issued by the Director of Patents can confer upon petitioner the exclusive right to use its own symbol only to those goods specified in the certificate, subject to any conditions and limitations stated therein.” — This passage encapsulates the ratio that registration does not confer rights beyond the enumerated goods.

• “Really, if the certificate of registration were to be deemed as including goods not specified therein, then a situation may arise whereby an applicant may be tempted to register a trademark on any and all goods which his mind may conceive even if he had never intended to use the trademark for the said goods. We believe that such omnibus registration is not contemplated by our Trademark Law.” (Quoting Sterling Products International Inc. v. Farbenfabriken Bayer, 27 SCRA 1214 [1969]) — The Court reiterated this policy rationale to reject any suggestion that the exclusive right extends beyond the certificate.

• “The mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others on unrelated articles of a different kind.” (Quoting American Foundries v. Robertson, 269 U.S. 372) — This principle underlies the ruling that Faberge could not monopolize the “BRUT” name for all goods.

• Philippine Refining Co., Inc. v. Ng Sam, 115 SCRA 472 (1982) — Followed. The Court upheld the registration of “CAMIA” for ham despite prior use of the same mark for lard, butter, cooking oil, and soap, on the ground that the goods were non-competing and unrelated, and the mere classification under the same food class did not make them related.

• Esso Standard Eastern, Inc. v. Court of Appeals, 116 SCRA 336 (1982) — Followed. Registration of “ESSO” for cigarettes was allowed notwithstanding its prior use for petroleum products, because the goods were wholly unrelated and the public would not associate cigarettes with a petroleum company.

• Hickok Manufacturing Co., Inc. v. Court of Appeals, 116 SCRA 378 (1982) — Followed. Recognized the rule that a trademark may be used by another for products of a different description, where no competition or relationship exists.

• Sterling Products International Inc. v. Farbenfabriken Bayer, 27 SCRA 1214 (1969) — Cited with approval for the statement that a certificate of registration does not cover goods not specified, to prevent abusive omnibus registrations.

• Ang v. Teodoro, 74 Phil. 50 (1942) — Distinguished. The case involved pants and shirts vis-à-vis shoes and slippers, which were found to be related goods under the old Trademark Act; its factual and legal milieu differed from the non-competing goods at hand.

• Sta. Ana v. Maliwat, 24 SCRA 1018 (1968) — Distinguished. The marks were concededly confusingly similar and the junior user’s goods were not remote from the senior user’s probable expansion; here, similarities were not present and no actual expansion into briefs was proven.

• Section 20, Republic Act No. 166, as amended — The certificate of registration is prima facie evidence of the registrant’s exclusive right to use the mark “in connection with the goods, business or services specified in the certificate.” This provision was held to limit Faberge’s right to the cosmetic and toiletry items listed, foreclosing any objection to registration of “BRUTE” for briefs.

• Section 4(d), Republic Act No. 166, as amended — Prohibits registration of a mark that so resembles a previously registered mark as to be likely, when applied to the applicant’s goods, to cause confusion or mistake or to deceive purchasers. The Court interpreted this in light of Section 20, holding that the exclusive right is still confined to specified goods, and that no likelihood of confusion existed given the unrelatedness of the products and the overall dissimilarity of the marks.

• Article 522, Civil Code — Provides that trademarks and trade names are governed by special laws. This merely referenced the applicability of the Trademark Law.

Gutierrez, Jr., Bidin, Davide, Jr., and Romero, JJ., concurred.