G.R. No. L-14761 and L-17981; January 28, 1961
ARCE SONS AND COMPANY, petitioner, vs. SELECTA BISCUIT COMPANY, INC., ET AL., respondents. (Consolidated Cases)

FACTS

Selecta Biscuit Company, Inc. (respondent) filed an application with the Philippine Patent Office to register the word “SELECTA” as a trademark for its bakery products. Arce Sons and Company (petitioner) opposed the registration, asserting prior and continuous use of the identical mark “SELECTA” for its milk, ice cream, and related food products since 1933 through its predecessor, Ramon Arce. Petitioner argued that the mark had become identified with its business, and that respondent’s use would cause confusion and constitute unfair competition. Concurrently, petitioner had filed an unfair competition case against respondent in the Court of First Instance of Manila.
The trial court in the unfair competition case ruled in favor of petitioner, perpetually enjoining respondent from using the “SELECTA” mark and awarding damages. Respondent appealed this decision to the Court of Appeals. Meanwhile, based on evidence submitted from the trial court case, the Director of Patents dismissed petitioner’s opposition, holding that registration by respondent would not cause confusion or damage. Petitioner sought review of this Patent Office decision. This Court consolidated the trademark registration appeal (G.R. No. L-14761) with the pending unfair competition appeal (G.R. No. L-17981) to avoid conflicting rulings.

ISSUE

Whether the Director of Patents erred in dismissing the opposition and allowing the registration of the trademark “SELECTA” by respondent, and whether respondent’s use of the mark constitutes unfair competition against petitioner.

RULING

The Supreme Court reversed the decision of the Director of Patents and affirmed the trial court’s judgment in the unfair competition case. The legal logic centers on the principles of trademark protection and unfair competition. The Court found that petitioner established prior use of the “SELECTA” mark, which had acquired a secondary meaning, identifying its products in the public mind. The doctrine of secondary meaning applies where a geographically or otherwise descriptive term, through long and exclusive use, comes to signify a particular producer’s goods.
The Court held that the concurrent use of the identical mark “SELECTA” on related food products—bakery items by respondent and milk, ice cream, and sandwiches by petitioner—was likely to cause confusion among purchasers as to the origin of the goods. This likelihood of confusion is the central test for both trademark infringement and unfair competition. The Director of Patents’ finding of no confusion was erroneous, as it disregarded the established evidence of petitioner’s longstanding business reputation and the related nature of the goods, which are often sold through the same channels (e.g., restaurants, stores). Respondent’s use was therefore an infringement on petitioner’s established trade name and mark. Consequently, respondent’s registration was disallowed, and its use of the mark was enjoined as an act of unfair competition.