G.R. No. 158589; June 27, 2006
PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE TABAC REUNIES, S.A., Petitioners, vs. FORTUNE TOBACCO CORPORATION, Respondent.

FACTS

Petitioners, foreign corporations (Philip Morris, Inc., et al.), are registered owners in the Philippines of the trademarks “MARK VII,” “MARK TEN,” and “LARK” for cigarettes. They filed a complaint for trademark infringement and damages against respondent Fortune Tobacco Corporation, a domestic company manufacturing cigarettes under the trademark “MARK.” Petitioners alleged that respondent’s use of “MARK” constituted a reproduction or imitation of their registered marks, likely to cause confusion among consumers. They invoked protection under the Paris Convention, claiming their marks had gained international fame. Respondent countered that “MARK” is a common word incapable of exclusively identifying petitioners’ products and denied any infringement.
The Regional Trial Court dismissed the complaint. It first ruled that petitioners lacked legal capacity to sue, having failed to prove that their home countries grant reciprocal privileges to Philippine corporations, as required for foreign corporations not licensed to do business in the Philippines. Alternatively, the trial court found no trademark infringement, holding that “MARK” is a generic term and that petitioners’ marks, taken in their entirety, were not confusingly similar to respondent’s “MARK.” The Court of Appeals affirmed this decision.

ISSUE

The primary issue is whether respondent Fortune Tobacco Corporation committed trademark infringement against petitioners.

RULING

The Supreme Court denied the petition and affirmed the dismissal. On the substantive issue of infringement, the Court applied the dominancy test, which focuses on the similarity of the prevalent features of the competing marks that might cause confusion. The Court held that no infringement occurred. Petitioners’ marks (“MARK VII,” “MARK TEN,” “LARK”) and respondent’s mark (“MARK”) are distinct in their entirety. The word “MARK” alone is a common, generic term that cannot be appropriated as a trademark to the exclusion of others. The Court emphasized that the trademarks must be considered in their totality, including logos and design, not just isolated words. Here, the additional elements in petitioners’ marks (the numerals “VII” and “TEN,” and the distinct word “LARK”) sufficiently distinguished them from respondent’s plain “MARK.” The Court found no likelihood of confusion, as the overall presentation of the marks in commerce was different. Consequently, the essential element of infringement—the likelihood of deceiving the public—was absent. The Court did not find it necessary to definitively resolve the procedural issue of capacity to sue, having disposed of the case on the merits of the infringement claim.