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COFFEE PARTNERS v. SAN FRANCISCO COFFEE

FACTS:

This case involves a dispute between petitioner Coffee Partners, Inc., a local corporation engaged in the business of operating coffee shops, and respondent San Francisco Coffee & Roastery, Inc., a local corporation engaged in the wholesale and retail sale of coffee. Petitioner has a franchise agreement with Coffee Partners Ltd. (CPL), a business entity organized under the laws of British Virgin Islands, allowing it to operate coffee shops in the Philippines using trademarks designed by CPL, such as "SAN FRANCISCO COFFEE." Respondent, on the other hand, registered the business name "SAN FRANCISCO COFFEE & ROASTERY, INC." with the Department of Trade and Industry (DTI) in June 1995. In 2001, respondent discovered that petitioner was about to open a coffee shop using the name "SAN FRANCISCO COFFEE." Respondent sent a letter demanding petitioner to stop using the name and filed a complaint for infringement and/or unfair competition with the Bureau of Legal Affairs-Intellectual Property Office (BLA-IPO). Petitioner denied the allegations and argued that its trademark could not be confused with respondent's trade name due to notable distinctions in their appearances. The BLA-IPO ruled in favor of respondent, but the Office of the Director General-Intellectual Property Office (ODG-IPO) reversed the decision. On appeal, the Court of Appeals set aside the decision of the ODG-IPO and reinstated the decision of the BLA-IPO finding infringement. The sole issue in this case is whether petitioner's use of the trademark "SAN FRANCISCO COFFEE" constitutes infringement of respondent's trade name "SAN FRANCISCO COFFEE & ROASTERY, INC.," even if the trade name is not registered with the Intellectual Property Office (IPO).

ISSUES:

  1. Whether or not a trade name needs to be registered with the Intellectual Property Office (IPO) in order to file an infringement suit.

  2. Whether the use of the trademark "SAN FRANCISCO COFFEE" is an infringement of the trade name "SAN FRANCISCO COFFEE & ROASTERY, INC."

  3. Whether the likelihood of confusion exists between the trade name and the trademark.

  4. Whether petitioner can claim that "San Francisco" is a proper name and "coffee" is a generic term.

RULING:

  1. A trade name does not need to be registered with the IPO before an infringement suit may be filed. As long as the trade name is previously used in trade or commerce in the Philippines, it is protected under Republic Act No. 8293 (RA 8293). RA 8293 dispenses with the registration requirement for trade names and categorically states that trade names shall be protected against any unlawful act, even prior to or without registration with the IPO.

  2. The use of the trademark "SAN FRANCISCO COFFEE" is an infringement of the trade name "SAN FRANCISCO COFFEE & ROASTERY, INC."

  3. Likelihood of confusion exists between the trade name and the trademark.

  4. Petitioner cannot claim that "San Francisco" is a proper name and "coffee" is a generic term.

PRINCIPLES:

  • Trade names are protected, even prior to or without registration, against any unlawful act committed by third parties.

  • The likelihood of confusion is the gravamen of infringement.

  • In determining similarity and likelihood of confusion, the dominancy test focuses on the similarity of the prevalent features of the competing trademarks, while the holistic test entails a consideration of the entirety of the marks as applied to the products.

  • A corporation has an exclusive right to the use of its name.

  • The court must consider both the law and equity in determining infringement cases.

  • Geographic or generic words are not subject to exclusive appropriation, but the combination of such words can be protected against infringement to avoid confusion or deception of the public.