G.R. No. 103543 July 5, 1993
ASIA BREWERY, INC., petitioner, vs. THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents.

FACTS

On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark and unfair competition regarding ABI’s “BEER PALE PILSEN” or “BEER NA BEER” product, which competes with SMC’s “SAN MIGUEL PALE PILSEN.” The Regional Trial Court dismissed SMC’s complaint. The Court of Appeals reversed the trial court, finding ABI guilty of infringement and unfair competition, and issued an injunction, ordered the recall and destruction of infringing materials, and awarded damages. Upon ABI’s motion for reconsideration, the Court of Appeals modified its decision, removing the order for ABI to render an accounting and pay estimated damages of P5,000,000. ABI appealed to the Supreme Court via a petition for certiorari.

ISSUE

Whether ABI infringes SMC’s trademark “San Miguel Pale Pilsen with Rectangular Hops and Malt Design” and thereby commits unfair competition.

RULING

The Supreme Court found that ABI did not commit trademark infringement or unfair competition. The Court held that for infringement, the trademark must be registered, and the unauthorized use must be likely to cause confusion. The Court compared the marks: SMC’s label is dominated by the words “San Miguel” in Gothic letters, with “Pale Pilsen” written diagonally, a coat of arms, and a rectangular border of minute grains. ABI’s label is dominated by the word “Beer,” with “Pale Pilsen” in smaller block letters, and a rectangular border of flower buds and leaves. The Court concluded the marks are distinct and dissimilar. For unfair competition, the Court found no evidence that ABI intended to deceive the public or passed off its goods as SMC’s, noting differences in taste, color, and alcohol content. The Court reversed the decision of the Court of Appeals and reinstated the trial court’s dismissal of the complaint.