GR 154342; (July, 2004) (Digest)
G.R. No. 154342, July 14, 2004
MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC., petitioners, vs. E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC., respondents.
FACTS
Respondent E. & J. Gallo Winery, a foreign corporation, is the owner of the registered “GALLO” trademark for wines in the Philippines since 1971. Its wines are distributed locally by co-respondent The Andresons Group, Inc. Petitioners Mighty Corporation and La Campana Fabrica de Tabaco, Inc. have been using the “GALLO” trademark for cigarettes since 1973, with approvals from the Bureau of Internal Revenue for tax purposes. The cigarette mark was never registered with the Intellectual Property Office, though a copyright was obtained for its label.
In 1993, respondents filed a complaint for trademark infringement and unfair competition against petitioners before the Regional Trial Court (RTC) of Makati. Respondents alleged that petitioners’ use of “GALLO” for cigarettes was intended to ride on the worldwide reputation of Gallo Winery’s wine trademarks, causing confusion among the public. The RTC ruled in favor of respondents, a decision affirmed by the Court of Appeals (CA). The CA held petitioners liable for trademark infringement and unfair competition, issuing a permanent injunction and awarding damages. Petitioners sought review by the Supreme Court.
ISSUE
Whether petitioners are liable for trademark infringement and unfair competition for using the “GALLO” mark on cigarettes, which are unrelated goods to the wines of the respondents.
RULING
The Supreme Court REVERSED the CA decision and ruled in favor of petitioners, dismissing the complaint. The Court held there was no trademark infringement. Under Section 22 of the Trademark Law (R.A. 166), infringement requires a registered mark and the use of a similar mark likely to cause confusion. The Court applied the “dominancy test,” focusing on the visual and aural impressions of the marks. It found the marks dissimilar: the wine labels prominently featured the words “ERNEST & JULIO GALLO” or “GALLO” in script, while the cigarette labels displayed a rooster device with “GALLO” in block letters alongside the manufacturer’s name, “MIGHTY CORPORATION.”
Crucially, the Court ruled there was no likelihood of confusion. The products were unrelated—wines versus cigarettes—sold through different channels to different classes of consumers. Wines are luxury items for middle-to-high-income buyers, while the cigarettes are low-cost items for low-income workers. The absence of competitive proximity negated any deception. The Court also found no unfair competition under Section 29, as there was no evidence petitioners passed off their goods as those of respondents or employed deceptive means. The mere use of a similar mark on non-competing goods, without more, does not constitute unfair competition.