CHUA CHE, PETITIONER, VS. PHILIPPINE PATENT OFFICE AND SY TUO, RESPONDENTS.

This is a petition to review the decision of the Director of Patents, in
Inter Partes Case No. 161, denying the application of petitioner Chua Che for
the registration of “T.M. X-7” for use on soap Class 51, being manufactured by
said Chua Che, upon the opposition of respondent Sy Tuo.

Under date of October 30, 1958, Chua Che presented with the Philippines
Patent Office a petition praying ior tho registration in his favor the trade
name of “X-7” the petition, states:

“The undersigned Chua Che, a citizen of China, a resident of 2804 Limay St.,
Tondo, Manila, and doing business at same address, has adopted and used the
trademark “X-7”, shown in the accompanying Drawing.

“ln accordance with the requirements of law, the undersigned declares that
this trademark—

1. Was first used by him on June 10, 1957.

2. Was first used by him in commerce in or with the Philippines on June 10,
1957.

3. Has been continously used by him in trade in or with the Philippines for
more than one year.

4.  Is, on the date of this application, actually used by himon the following
goods, classified according to the Official Classification of Goods (Rule 82): 
                               

Class 51—Soap

5.  Is applied to the goods or to the packages containing the same, by
placing thereon a printed label on which the trademark is shown, or by directly
impressing the mark to the goods.”

The corresponding declaration, which was under oath, contained, among others,
the following:

“3. That he believes himself to be the lawful owner of the trademark sought
to be registered.

4.  That the said trademark is in actual use in Commerce in or with the
Philippines not less than two months before this application is filed.

5.  That no other person, partnership, corporation, or association, to the
best of his knowledge and belief, has the right to use said trademark in the
Philippines, either in the identical form or in any such near resemblance
thereto; as might be calculated to deceive.                                   

Under date of July 6, 1959, an examiner of the Department of Commerce and
Industry, submitted a report, recommending the allowance of the application,
which report was approved by the Supervising TM Examiner. After the notice of
allowance was published in the Official Gazette, as required, respondent Sy Tuo
presented a “Notice of Opposition,” dated October 15, 1959, anchoring said
opposition on the following allegations:

1. The registration of the trademark “X-7” as applied for by CHUA CHE will
not only violate the rights and interests of the Oppositor over his registered
trademark “X-7 covered by Certificate of Registration No. 5,000, issued on April
21, 1951, but will also tend to mislead the purchasing public and make it
convenient for unscrupulous dealers to pass oil Hie poods of the applicant CHUA
CHE for those of the oppositor of SY TUO, to the injury of both the oppositor
and the public.

2. The registration of the said trademark “X-7” fn the name of CHUA QHE will
be in violation of, and will run counter to, Section 4{d), of Republic Act No.
166, as amended, because it is confusingly similar to the trademark “X-7”
covered by Registration No. 5,000 previously registered to, and being used by
the oppositor and is not abandoned.

The Oppositor Sy Tuo, doing business as Western Cosmetic Laboratory will rely
on the following facts:

(a)   Oppositor has prior  use of the trademark “X-7” as he has been using it
extensively   and continuously since July 31, 1953, while the applicant, Chua 
Che, allegedly used his trademark only since June 10, 1957.

(b)   expositor’s mark “X-7” is distinctive and his invented mark and not
merely an ordinary, common and weak mark.

(c)   The oppositor and the applicant use the trademark “X-7” for allied and
closely related products.

(d) The oppositor has spent a huge amount by way of advertising and
popularizing his “X-7” brand.

(e)   The oppositor has spent a big amount in expanding his business for the
manufacture of toilet soap and crystal laundry soap with his already popular
“X-7” brand.

(f)   The trademark applied for by the applicant Chua Che consists of the
trademark “X-7” and anyone is likely to be mislead as to the source or origin by
the close resemblance or identity with the trademark “X-7″ of the
oppositor.”

Attached to the Opposition were labels (samples) being used by oppositor on
his products, which clearly show “X-7”.

Petitioner herein presented an Answer to Notice of Oppositions, claiming
among others that the grounds of opposition are not correct, since although it
is admitted that “X-7” is registered in the name of oppositor, said trademark is
not being used on soap, but purely toilet Articles. After the presentation of
the Answer the case was heard, wherein the parties presented their respective
evidcnce, both testimonial and documentary. In the memoranda of the contenders,
they limited the principal, thus—

The registration of the trademark “X-7” in the name of applicant CHUA CHE will likely mislead the public so as to make them believe that said goods are
manufactured or sponsored by or in some way in trade associated with opposer.
Applicant CHUA CHE—

In Inter Partes proceedings, the principal issue is “priority of adoption and
use.” Since opposer has not yet used “X-7” mark on soap, but will still use it,
applicant should be entitled to the registration of the same.

The Director of Patents rendered judgment on January 18, 1961, the pertinent
portions of which read:

“Based on these facts there is no question that opposer’s first use of the
trademark X-7 on July 31, 1053, is prior to applicant’s nrst use of the mark on
June 10, 1957. The only question then in this case is whether cr not purchasers
of X-7 perfume, lipstick and nail polish would likely upon seeing X-7 laundry
soap, attribute common origin to the products or assume that there existed some
kind of trade connection between applicant and opposer.

“Opposer’s record shows that he has been using since July 31, 1953 the
trademark X-7 on perfume, lipstick and nail polish; that he has spent
substantial amount of money in building up tiie goodwill of this trademark
through advertisements in all kinds of media—through newspapers of general
circulation, by means of billboards in various places in the Philippines, and
also over the radio and television, in these advertisements opposer spent about
P120,000.00. There is no question that opposor enjoys a valuable goodwill in the
trademark X-7.

“The products of the parties, while specifically different, are products
intended for use in the homo and usually have common purchasers. Furthermore,
the use of X-7 for laundry soap is but a natural expansion of business of the
opposer. In fact, heren opposer in 1957, prior to the alleged date of first use
by respondent-applicant of the trademark X-7 for laundry soap on June 10, 1957
had made steps in expanding the use of this trademark to granulated soap. Under
these circumstances, it is concluded that the average purchasers are likely to
associate X-7 laundry soap with X-7 perfume, lipstick and nail polish or to
think that the products have common origin or sponsorship.

“In view of the above findings, the opposition in this case should be as it
is hereby sustained and consequently Application Serial No. 6941, of Chu Che, is
also hereby rejected.

“OPPOSITION SUSTAINED.”

The above judgment is now before Us, applicant-appellant claiming that it was
error for the Director to conclude that opposer SY TUO had priority to use the
trademark in question, and that the use by appellant of the trademark “X-7” on
granulated soap to be manufactured and sold by him, would likely mislead
purchasers.

At the very outset, We would like to state that in cases of the nature of the
one at bar, (only questions of law should be raised, and the only exception to
this rule, meaning that findings of facts may be reviewed, is when such findings
are not supported by substantial evidence (Sec. 2, Rule 44, Revised Rules). The
finding of the Director of Patents Office to the effect that opposer-appelle
Sy Tuo had priority of use and adoption of the trademark “X-7”, is for all
intents and purposes, one of fact. This being the case, such finding becomes
conclusive to this Court. Even on this sole issue alone, the petition for review
must fall.

However, there are other matters which must be clarified. For instance, the
fact that appellee has not yet used the trademark “X-7” on granulated soap, the
product on which appellant wants to use the said trademark. The circumstance of
non-actual use of the mark “X-7” on granulated soap by appellee, does not
detract, from the fact that he has already a right to such a trademark and
should, therefore, be protected. The observation of the Director of Patents to
the effect that “the average purchasers are likely to associate X-7 laundry soap
with X-7 perfume, lipstick and nail polish or to think that the products have
common origin or sponsorship,” is indeed well taken. It has been pointed out by
appellant that the product upon which the trademark X-7 will be used (laundry
soap) is different from those of appellee’s, and therefore no infringement and,
or confusion may result. We find no merit in the above contention, for it has
been held that while it is no longer necessary to establish that the goods of
the parties possess the same descriptive properties, as previously required
under the Trade Mark Act of 1905, registration of a trademark should be refused
in cases where there is a likelihood of confusion, mistake, or deception, even
though the goods fall into different categories. (Application of Sylvan Sweets
Co., 205 F. 2nd, 207.) The products of appellee are common household items
now-a-days, in the same manner as laundry soap. The likelihood of purchasers to
associate these products to a common origin is not farfetched. Both from the
standpoint of priority of use and for the protection of the buying public and,
of course, appellee’s rights to the trademark “X-7”, it becomes manifest that
the registration of said trademark in favor of applicant-appellant should be
denied.

Premises considered, the decision sought to be reviewed should be, as it is
hereby affirmed in all respects, with costs against appellant CHUA CHE in both
instances.

Bengzon, C. J., Bautista Angelo, Reyes, J. B. L., Barrera, Dizon, Regala,
Makalintal, Bengzon, J. P. and Zaldivar, JJ.,
concur.