G.R. No. L-29971 August 31, 1982
ESSO STANDARD EASTERN, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS and UNITED CIGARETTE CORPORATION, respondents.

FACTS

Petitioner Esso Standard Eastern, Inc., a foreign corporation licensed to do business in the Philippines, is engaged in the sale of petroleum products under its registered trademark “ESSO.” Private respondent United Cigarette Corporation is a domestic corporation engaged in the manufacture and sale of cigarettes. Respondent acquired the business and patent rights of its predecessor, including the use of the trademark “ESSO” on cigarettes, for which a permit had been granted by the Bureau of Internal Revenue.
Petitioner filed a complaint for trademark infringement in the Court of First Instance of Manila, alleging that its “ESSO” mark had acquired considerable goodwill for high-quality petroleum products. Petitioner asserted that respondent’s use of the same mark on cigarettes was intended to deceive the public as to the quality and origin of the goods, to petitioner’s detriment. Respondent countered that there was no infringement because the goods—petroleum products and cigarettes—were non-competing and entirely unrelated.

ISSUE

Whether the respondent’s use of the trademark “ESSO” on its cigarettes constitutes trademark infringement, given that the goods are non-competing with the petitioner’s petroleum products.

RULING

The Supreme Court affirmed the decision of the Court of Appeals dismissing the complaint, finding no trademark infringement. The legal logic centers on the statutory definition of infringement under the Trademark Law, which requires that the unauthorized use of a registered mark be “likely to cause confusion or mistake or to deceive purchasers… as to the source or origin of such goods or services.” The Court emphasized that likelihood of confusion is a relative concept, determined by the particular circumstances of each case.
The Court applied the modern “related goods” doctrine. For infringement to exist, the goods must be so related that the public might reasonably assume they originate from the same manufacturer. Here, petroleum products and cigarettes are non-competing and entirely unrelated. They belong to different classes, serve different purposes, and possess different physical attributes and essential characteristics. There is no reasonable basis to assume that cigarettes bearing the “ESSO” mark originate from a petroleum company, or vice-versa. Consequently, there is no likelihood of confusion or deception among the purchasing public regarding the source or origin of the goods. The Court cited its consistent jurisprudence, including the Shell vs. Fortune case, which held that where a company is known for a specific line of products (like petroleum), the public is not likely to be confused into thinking it manufactures an entirely different, unrelated product (like cigarettes).