GR 169504; (March, 2010) (Digest)
G.R. No. 169504; March 3, 2010
COFFEE PARTNERS, INC., Petitioner, vs. SAN FRANCISCO COFFEE & ROASTERY, INC., Respondent.
FACTS
Petitioner Coffee Partners, Inc., registered with the SEC in January 2001, operates coffee shops under a franchise agreement with Coffee Partners Ltd. (CPL), using trademarks like “SAN FRANCISCO COFFEE.” Respondent San Francisco Coffee & Roastery, Inc., registered with the SEC in May 1995 and with the DTI in June 1995, is engaged in the wholesale and retail sale of coffee. In 1998, respondent formed a joint venture, Boyd Coffee Company Philippines, Inc. (BCCPI), for processing and roasting coffee. In June 2001, respondent discovered petitioner was about to open a coffee shop under the name “SAN FRANCISCO COFFEE” in Quezon City, causing confusion. Respondent demanded petitioner cease using the name and filed a complaint for infringement and/or unfair competition with the BLA-IPO. Petitioner denied infringement, claiming it had filed applications for the mark “SAN FRANCISCO COFFEE & DEVICE” with the IPO in 1999 and 2000, and argued respondent had stopped using its trade name after the joint venture. The BLA-IPO ruled petitioner’s trademark infringed respondent’s trade name, finding no abandonment by respondent, but absolved petitioner of unfair competition and denied actual damages, awarding only attorney’s fees. The ODG-IPO reversed, finding no infringement as respondent had stopped using its trade name. The Court of Appeals set aside the ODG-IPO decision and reinstated the BLA-IPO’s finding of infringement.
ISSUE
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).
RULING
Yes. The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that infringement of an unregistered trade name is actionable under Section 165 of Republic Act No. 8293 (The Intellectual Property Code), which protects trade names even without registration with the IPO, provided they are previously used in trade or commerce in the Philippines. The Court found that respondent had continuously used its trade name since 1995 and had not abandoned it, as it continued planning for coffee retailing and selling coffee machines. The Court also ruled that petitioner’s trademark is confusingly similar to respondent’s trade name, as the dominant portion “SAN FRANCISCO” is identical, and both parties are engaged in the coffee business, making confusion likely among ordinarily prudent consumers. The Court emphasized that a corporation has an exclusive right to its name, and using a similar name constitutes a fraud that diverts business. Thus, petitioner is liable for infringement.