ASIA BREWERY, INC., PETITIONER, VS. THE HON. COURT OF APPEALS AND SAN MIGUEL CORPORATION, RESPONDENTS.

On September 15, 1988, San Miguel Corporation (SMC) filed a
complaint against Asia Brewery Inc. (ABI) for infringement of trademark
and unfair competition on account of the latter’s BEER PALE PILSEN or BEER
NA BEER product which has been competing with SMC’s SAN MIGUEL PALE
PILSEN for a share of the local beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ. Case No.
56390, RTC Branch 166, Pasig, Metro Mani­la.)

On August 27, 1990, a decision was rendered by the trial Court,
presided over by Judge Jesus O. Bersamira, dismissing SMC’s complaint because ABI
“has not committed trademark infringement or unfair competition
against” SMC (p. 189, Rollo).

SMC appealed to the Court of Appeals (C.A.-G.R. CV No.
28104). On September 30, 1991, the
Court of Appeals (Sixth Division composed of Justice Jose C. Campos, Jr.,
chairman and ponente, and Justices Venancio D. Aldecoa Jr. and Filemon
H. Mendoza, as members) reversed the trial court. The dispositive part of the decision reads as follows:

“In the light of the foregoing analysis and under the plain
language of the applicable rule and principle on the matter, We find the
defendant Asia Brewery Incorporated GUILTY of infringement of trademark and
unfair competition. The decision of the
trial court is hereby REVERSED, and a new judgment entered in favor of the plaintiff
and against the defendant as follows:

“(1)    The defendant Asia Brewery Inc. its
officers, agents, servants and employees are hereby permanently enjoined and
restrained from manufacturing, putting up, selling, advertising, offering or
announcing for sale, or supplying Beer Pale Pilsen, or any similar preparation,
manufacture or beer in bottles and under labels substan­tially identical with
or like the said bottles and labels of plaintiff San Miguel Corporation
employed for that purpose, or substantially identical with or like the bottles
and labels now employed by the defendant for that purpose, or in bottles or
under labels which are calculated to deceive purchasers and consumers into the
belief that the beer is the product of the plaintiff or which will enable
others to substitute, sell or palm off the said beer of the defendant as and
for the beer of the plaintiff-com­plainant.

“(2)    The defendant Asia Brewery Inc. is hereby
ordered to render an accounting and pay the San Miguel Corporation double any and
all the payments derived by defend­ant from operations of its business and sale
of goods bearing the mark ‘Beer Pale Pilsen’ estimated at approximately Five
Million Pesos (P5,000,000.00); to recall all its products bearing the mark
‘Beer Pale Pilsen’ from its retailers and deliver these as well as all labels,
signs, prints, packages, wrappers, receptacles and advertisements bearing the
infringing mark and all plates, molds, materials and other means of making the
same to the Court authorized to execute this judgment for destruction.

“(3)    The defendant is hereby ordered to pay
plaintiff the sum of Two Million Pesos (P2,000,000.00) as moral damages and
Half a Million Pesos (P5,000,000.00) by way of exemplary damages.

“(4)    The defendant is further ordered to pay the
plaintiff attorney’s fees in the amount of P250,000.00 plus costs of this
suit.” (p. 90, Rollo.)

Upon a motion for reconsideration filed by ABI, the above
dispositive part of the decision, was modified by the separate opinions of the
Special Sixth Division^[1]
so that it should read thus:

In the light of the foregoing analysis and under the plain language
of the applicable rule and principle on the matter, We find the defendant Asia
Brewery Incorporated GUILTY of infringement of trademark
and unfair competition. The deci­sion of the trial court is hereby REVERSED, and a new judgment
entered in favor of the plaintiff and against the defendant as follows:

(1)  The defendant Asia Brew­ery Inc., its
officers, agents, servants and employees are hereby permanently enjoined and
restrained from manufacturing, putting up, selling, advertising, offering or
announcing for sale, or supplying Beer Pale Pilsen, or any similar
preparation, manufacture or beer in bottles and under labels substan­tially
identical with or like the said bottles and labels of plaintiff San Miguel
Corporation employed for that purpose, or substantially identical with or like
the bottles and labels now employed by the defendant for that purpose, or in
bottles or under labels which are calculated to deceive purchasers and
consumers into the belief that the beer is the product of the plaintiff or
which will enable others to substitute, sell or palm off the said beer of the
defendant as and for the beer of the plaintiff-com­plainant.

(2)  The defendant Asia Brew­ery Inc. is hereby
ordered^[2]
to recall all its products bearing the mark Beer Pale Pilsen from its
retailers and deliver these as well as all labels, signs, prints, pack­ages,
wrappers, receptacles and advertisements bearing the infring­ing mark and all
plates, molds, materials and other means of making the same to the Court
authorized to execute this judgment for destruc­tion.

(3)  The defendant is hereby ordered to pay
plaintiff the sum of Two Million Pesos (P2,000,000.00) as moral damages and
Half a Million Pesos (P500,000.00) by way of exem­plary damages.

(4)  The
defendant is further ordered to pay the plaintiff attorney’s fees in the amount
of P250,000.00 plus costs of this suit.

In due time, ABI appealed to this Court by a petition for certiorari
under Rule 45 of the Rules of Court. The lone issue in this appeal is whether ABI infringes SMC’s
trademark: San Miguel Pale Pilsen
with Rectangular Hops and Malt Design, and thereby commits unfair
competition against the latter. It is a
factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575)
and as a general rule, the findings of the Court of Appeals upon factual
questions are conclusive and ought not to be disturbed by us. However, there are exceptions to this
general rule, and they are:

(1)      When the conclusion is grounded entirely on speculation,
surmises and conjectures;

(2)      When the inference of the Court of Appeals from its findings of
fact is manifestly mistaken, absurd and impossible;

(3)      Where there is grave abuse of discretion;

(4)      When the judgment is based on a misapprehension of facts;

(5)      When the appellate court, in making its
findings, went beyond the issues of the case, and the same are contrary to the
admissions of both the appellant and the appellee;

(6)      When the findings of said court are contrary to those of the
trial court;

(7)      When the findings are without citation of specific evidence on
which they are based;

(8)      When the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the respondents; and

(9)      When the findings of facts of the Court of
Appeals are premised on the absence of evidence and are contradicted on
record. (Reynolds Philippine
Corporation vs. Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs. Court
of Ap­peals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA 238; Sacay
vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139 SCRA 576; Casanayan vs.
Court of Appeals, 198 SCRA 333, 336; also Apex Invest­ment and Financing Corp.
vs. IAC, 166 SCRA 458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS Stock Brokerage,
Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. vs. CA, 133 SCRA
88].)

Under any of these exceptions, the Court has to review the
evidence in order to arrive at the correct findings based on the record (Roman
Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of
the Court of Appeals and trial court are contrary to each other, the Supreme
Court may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.)

The present case is one of the exceptions because there is no
concurrence between the trial court and the Court of Appeals on the lone
factual issue of whether ABI, by manufacturing and selling its BEER PALE
PILSEN in amber colored steinie bottles of 320 ml. capacity with a white
painted rectangular label has committed trademark infringement and unfair
competition against SMC.

Infringement of trademark is a form of unfair competition (Clarke
vs. Manila Candy Co., 36 Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law,
defines what constitutes infringement:

Sec. 22. Infringement, what constitutes. — Any person who
shall use, without the consent of the registrant, any reproduction, coun­terfeit,
copy or colorable imitation of any registered mark or trade-name in
connection with the sale, offer­ing for sale, or advertising of any goods,
business or services on or in connection with which such use is likely to cause
confusion or mistake or to deceive purchasers or others as to the source or
origin of such goods or services, or identity of such business; or reproduce,
coun­terfeit, copy or colorably imitate any such mark or trade-name and apply
such reproduction, counter­feit, copy, or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertise­ments intended to be used
upon or in connection with such goods, business or services, shall be liable to
a civil action by the registrant for any or all of the remedies herein
provided. (Underscoring supplied.)

This definition implies that only registered trademarks,
trade names and service marks are protected against infringement or
unauthorized use by another or others. The use of someone else’s registered trademark, trade name or service
mark is unauthorized, hence, ac­tionable, if it is done “without the
consent of the registrant.” (Ibid.)

The registered trademark of SMC for its pale pilsen beer is:

“San Miguel Pale Pilsen With Rectangular Hops and Malt
Design. (Philippine Bureau of Patents, Trademarks and Technology Transfer
Trademark Certificate of Registra­tion No. 36103, dated 23 Oct. 1986,” (p.
174, Rollo.)

As described by the trial court in its decision (Page 177,
Rollo):

“x x x a rectangular design [is] bordered by what appears to
be minute grains arranged in rows of three
in which there appear in each corner
hop designs. At the top
is a phrase written in small print ‘Reg. Phil. Pat. Off.’ and at the bottom ‘Net
Contents: 320 Ml.’ The domi­nant feature is the phrase ‘San Miguel’
written horizontally at the upper portion. Below are the words ‘Pale Pilsen’ written diagonally across the middle
of the rectangular design. In between is a coat of arms and the phrase
‘Expertly Brewed.’ The ‘S’ in ‘San’ and the ‘M’ of ‘Miguel,’ ‘P’ of ‘Pale’ and
‘Pilsen’ are written in Gothic let­ters with fine strokes of serifs, the kind
that first appeared in the 1780s in England and used for print­ing German as
distinguished from Roman and Italic. Below ‘Pale Pilsen’ is the statement ‘And Bottled by’ (first line, ‘San
Miguel Brewery’ (second line), and ‘Philippines’ (third line).” (p. 177,
Rollo; Underscoring supplied.)

On the other hand, ABI’s trademark, as described by the trial
court, consists of:

“x x x a rectangular design bordered by what appear to be buds
of flowers with leaves. The domi­nant feature is ‘Beer‘ written across the upper
portion of the rectangular design. The phrase ‘Pale Pilsen’ appears immediately
below in smaller block letters. To the
left is a hop design and to the right, written in small prints, is the phrase
‘Net Contents 320 ml.’ Immediately below ‘Pale Pilsen’ is the statement written
in three lines ‘Especially brewed and bottled by’ (first line), ‘Asia Brewery
Incorporated’ (second line), and ‘Philippines’ (third line).” (p. 177,
Rollo; Underscoring supplied.)

Does ABI’s BEER PALE PILSEN label or “design”
infringe upon SMC’s SAN MIGUEL PALE PILSEN WITH RECTAN­GULAR MALT AND HOPS
DESIGN? The answer is
“No.”

Infringement is determined by the “test of domi­nancy”
rather than by differences or variations in the details of one trademark and of
another. The rule was formulated in Co
Tiong Sa vs. Director of Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa
vs. Director of Patents, 100 Phil. 214, 216-217 (1956), thus:

“It has been consistently held that the question of
infringement of a trademark is to be determined by the test of dominancy. Similarity in size, form and color, while
relevant, is not conclusive. If the
competing trademark contains the main or essential or dominant fea­tures
of another, and confusion and deception
is likely to result, infringement takes place. Duplica­tion or imitation is not necessary; nor it is necessary that the
in­fringing label should suggest an effort to imitate. [C. Neilman Brewing Co. vs. Independent
Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC) 180
Fed. 579]. The question at issue in
cases of infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the public or
deceive purchasers. (Auburn Rubber
Corporation vs. Hon-over Rubber Co., 107 F. 2d 588; x x x.)” (Underscoring
supplied.)

In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272,
275), the test was similarity or “resemblance between the two (trademarks)
such as would be likely to cause the one mark to be mistaken for the other. x x
x [But] this is not such similitude as amounts to identity.”

In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575,
the court was more specific: the test
is “similarity in the dominant features of the trademarks.”

What are the dominant features of the competing trademarks before
us?

There is hardly any dispute that the dominant feature of SMC’s
trademark is the name of the product: SAN MIGUEL PALE PILSEN, written in
white Gothic letters with elaborate serifs at the beginning and end of the
letters “S” and “M” on an amber background across the upper
portion of the rectangular design.

On the other hand, the dominant feature of ABI’s trademark is the
name: BEER PALE PILSEN, with the word “Beer” written in large
amber letters, larger than any of the letters found in the SMC label.

The trial court perceptively observed that the word “BEER”
does not appear in SMC’s trademark, just as the words “SAN MIGUEL”
do not appear in ABI’s trademark. Hence, there is absolutely no similarity in the dominant features of
both trademarks.

Neither in sound, spelling or appearance can BEER PALE PILSEN
be said to be confusingly similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN
can possibly be deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC
proving otherwise.

Besides the dissimilarity in their names, the following other
dissimilarities in the trade dress or appearance of the competing products
abound:

(1)    The SAN MIGUEL PALE PILSEN bottle has
a slender tapered neck.

The BEER PALE PILSEN bottle has a fat, bulging neck.

(2)    The words “pale pilsen” on SMC’s
label are printed in bold and laced letters along a diagonal band,
whereas the words “pale pilsen” on ABI’s bottle are half the size and
printed in slender block letters on a straight horizontal band. (See Exhibit “8-a”.)

(3)    The
names of the manufacturers are prominently printed on their respective bottles.

SAN MIGUEL PALE PILSEN is “Bottled by the San Miguel
Brewery, Philippines,” whereas BEER PALE PILSEN is “Especially
brewed and bottled by Asia Brewery Incor­porated, Philippines.”

(4)    On the back of ABI’s bottle is printed in
big, bold letters, under a row of flower buds and leaves, its copyrighted
slogan:

“BEER NA BEER!”

Whereas SMC’s bottle carries no slogan.

(5)    The back of the SAN MIGUEL PALE PILSEN
bottle carries the SMC logo, whereas the BEER PALE PILSEN bottle has no
logo.

(6) The SAN MIGUEL PALE PILSEN bottle
cap is stamped with a coat of arms and the words “San Miguel Brewery
Philippines” encircling the same.

The BEER PALE PILSEN bottle cap is stamped with the name
“BEER” in the center, surrounded by the words “Asia Brewery
Incorporated Philippines.”

(7) Finally, there is a substantial price differ­ence
between BEER PALE PILSEN (currently at P4.25 per bottle) and SAN
MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only P4.25 for a bottle of beer
cannot expect to receive San Miguel Pale Pilsen from the storekeeper or
bartender.

The fact that the words pale pilsen are part of
ABI’s trademark does not constitute an infringement of SMC’s trademark: SAN
MIGUEL PALE PILSEN, for “pale pilsen” are generic words descriptive of the
color (“pale”), of a type of beer (“pilsen”), which is a
light bohemian beer with a strong hops flavor that originated in the City of
Pilsen in Czechoslovakia and became famous in the Middle Ages. (Webster’s Third New Inter­national
Dictionary of the English Language, Unabridged. Edited by Philip Babcock Gove. Springfield, Mass.: G & C
Merriam Co., c) 1976, page 1716.) “Pilsen” is a “primarily
geographically descriptive word,” (Sec. 4, subpar. [e] Republic Act No.
166, as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and not
appro­priable by any beer manufacturer. The Trademark Law provides:

“Sec. 4. x x x. The owner of trade-mark, trade-name or
service-mark used to distinguish his goods, business or services from the goods, business or services of others shall
have the right to register the same [on the principal register], unless it:

“xxx                             xxx                                 xxx.

“(e) Consists of a mark or trade-name which, when applied to
or used in connection with the goods, business or services of the appli­cant is
merely descriptive or decep­tively misdescriptive
of them, or when applied to or used in connec­tion with the
goods, business or services of the applicant is pri­marily geographically
descriptive or deceptively misdescriptive of them, or is primarily
merely a surname.” (Underscoring
supplied.)

The words “pale pilsen” may not be appropriated by SMC
for its exclusive use even if they are part of its registered trademark: SAN
MIGUEL PALE PILSEN, any more than such descriptive words as
“evaporated milk,” “tomato ketchup,” “cheddar
cheese,” “corn flakes” and “cooking oil” may be appropriated by any single manufac­turer
of these food products, for no other reason than that he was the first to use
them in his registered trademark. In
Masso Hermanos, S. A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it was
held that a dealer in shoes cannot register “Leather Shoes” as his
trademark because that would be merely descriptive and it would be unjust to
deprive other dealers in leather shoes of the right to use the same words with
reference to their merchandise. No one
may appropriate generic or descriptive words. They belong to the public domain (Ong Ai Gui vs. Director of Patents, 96
Phil. 673, 676 [1955]):

“A word or a combination of words which is merely descriptive
of an article of trade, or of its composition, characteristics, or qualities,
cannot be appropriated and protected as a trademark to the exclusion of its use
by others. x x x inasmuch as all persons have an equal right to produce and vend
similar articles, they also have the right to describe them properly and to use
any appropriate language or words for that purpose, and no person
can appropriate to himself exclusively any
word or expression, properly descriptive
of the article, its qualities, ingredients
or char­acteristics, and thus limit other persons in the use of
language appropriate to the description of their manufactures, the right
to the use of such language being
common to all. This rule excluding descrip­tive terms has also been held to apply to
trade-names. As to whether words
employed fall within this prohibition, it is said that the true test is not
whether they are exhaustively descriptive of the article designated, but
whether in themselves, and as they are commonly used by those who understand
their meaning, they are reasonably indica­tive and descriptive of the thing
intended. If they are thus descrip­tive,
and not arbitrary, they cannot be appropriated from general use and become the
exclusive property of anyone. (52 Am.
Jur. 542-543.)

“x x x. Others may use
the same or similar descriptive word in connection with their own wares,
provided they take proper steps to prevent the public being deceived. (Richmond Remedies Co. vs. Dr. Miles Medical
Co., 16 E. [2d] 598.)

“x x x. A descriptive
word may be admittedly distinctive, especially if the user is the first creator
of the article. It will, however, be
denied protection, not because it lacks distinctiveness, but rather because
others are equal­ly entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. 869-870.)”
(Underscoring sup­plied.)

The circumstance that the manufacturer of BEER PALE PILSEN,
Asia Brewery Incorporated, has printed its name all over the bottle of its beer
product: on the label, on the back of
the bottle, as well as on the bottle cap, disproves SMC’s charge that ABI
dishonestly and fraudulently intends to palm off its BEER PALE PILSEN as
SMC’s product. In view of the visible
differ­ences between the two products, the Court believes it is quite unlikely
that a customer of average intelli­gence would mistake a bottle of BEER PALE
PILSEN for SAN MIGUEL PALE PILSEN.

The fact that BEER PALE PILSEN like SAN MIGUEL PALE
PILSEN is bottled in amber-colored steinie bottles of 320 ml. capacity and
is also advertised in print, broadcast, and television media, does not
necessarily constitute unfair competition.

Unfair competition is the employment of deception or any other
means contrary to good faith by which a person shall pass off the goods
manufactured by him or in which he deals, or his business, or services, for
those of another who has already established goodwill for his similar goods,
business or services, or any acts calculated to produce the same result. (Sec.
29, Repub­lic Act No. 166, as amended.) The law further enumer­ates the more
common ways of committing unfair competi­tion, thus:

“Sec. 29. x x x.

“In particular, and without in any way limiting the scope of
unfair competition, the following shall be deemed guilty of unfair competition:

“(a) Any person, who in sell­ing his goods shall
give them the general appearance of goods of another manufacturer or dealer,
either as to the goods themselves or in the wrapping of the packages in which
they are contained, or the devices or words thereon, or in any other feature of
their appearance, which would be likely to influence purchasers to believe that
the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the public and defraud
another of his legitimate trade, or any subsequent vendor of such goods or any
agent of any vendor engaged in selling such goods with a like purpose.

“(b) Any person who by any artifice, or device,
or who employs any other means calculated to induce the false belief that such
person is offering the services of another who has identified such services in
the mind of the public; or

“(c) Any person who shall make any false
statement in the course of trade or who shall commit any other act contrary to
good faith of a nature calculated to discredit the goods, business or services
of another.”

In this case, the question to be determined is whether ABI is
using a name or mark for its beer that has previously come to designate SMC’s
beer, or whether ABI is passing off its BEER PALE PILSEN as SMC’s SAN
MIGUEL PALE PILSEN.

“x x x. The universal
test question is whether the public is likely to be deceived. Nothing less than conduct tending to pass
off one man’s goods or business as that of another will constitute unfair competition. Actual or probable deception and confusion on the part of the customers
by reason of defendant’s practices must always appear.” (Shell Co. of the
Philippines, Ltd. vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil.
434, 439.)

The use by ABI of the steinie bottle, similar but not identical
to the SAN MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABI’s counsel, SMC did not
invent but merely borrowed the steinie bottle from abroad and it claims neither
patent nor trademark pro­tection for that bottle shape and design. (See rollo, page 55.) The Cerveza Especial
and the Efes Pale Pilsen use the “steinie” bottle. (See Exhibits 57-D, 57-E.) The trial court
found no infringement of SMC’s bottle–

“The court agrees with defend­ant that there is no
infringement of plaintiff’s bottle, firstly, because according to plaintiff’s’
witness Deogracias Villadolid, it is a standard
type of bottle called steinie, and to witness Jose Antonio Garcia, it is not a
San Miguel Corporation design but a design originally developed in the United
States by the Glass Container Manu­facturer’s Institute and therefore lacks
exclusivity. Secondly, the shape was
never registered as a trademark. Exhibit ‘C’ is not a registration of a beer bottle design required under
Rep. Act 165 but the registration of the name and other marks of ownership
stamped on con­tainers as required by Rep. Act 623. Thirdly, the neck of defendant’s bottle is much larger and has a
distinct bulge in its uppermost part.” (p. 186, Rollo.)

The petitioner’s contention that bottle size, shape and color may
not be the exclusive property of any one beer manufacturer is well taken. SMC’s being the first to use the steinie
bottle does not give SMC a vested right to use it to the exclusion of everyone
else. Being of functional or common
use, and not the exclusive invention of any one, it is available to all who
might need to use it within the industry. Nobody can acquire any exclusive right to market articles supplying
simple human needs in containers or wrappers of the general form, size and character
commonly and immediately used in marketing such articles (Dy Buncio vs. Tan
Tiao Bok, 42 Phil. 190, 194-195.)

“xxx protection against imitation should be properly confined
to nonfunctional features. Even if
purely functional elements are slavishly copied, the resem­blance will not
support an action for unfair competition, and the first user cannot claim
secondary meaning protection. Nor can
the first user predicate his claim to protection on the argument that his
business was established in reliance on
any such unpatented nonfunctional feature, even ‘at large expenditure of
money.’ (Callman Unfair Competition, Trademarks and Monopolies, Sec. 19.33 [4th
Ed.].)” (Petition for Review, p.
28.)

ABI does not use SMC’s steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which has a fat bulging neck to
differentiate it from SMC’s bottle. The
amber color is a functional feature of the beer bottle. As pointed out by ABI, all bottled beer
produced in the Philippines is contained and sold in amber-colored bottles
because amber is the most effec­tive color in preventing transmission of light
and provides the maximum protection to beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and
Candy Co., 38 F2d 885, a merchant cannot be en­joined from using a type or
color of bottle where the same has the useful purpose of protecting the
contents from the deleterious effects of light rays. Moreover, no one may have a monopoly of any color. Not only beer, but most medicines, whether
in liquid or tablet form, are sold in amber-colored bottles.

That the ABI bottle has a 320 ml. capacity is not due to a desire
to imitate SMC’s bottle but because that bottle capacity is the standard
prescribed under Metrication Circular No. 778, dated 4 December 1979, of the
Department of Trade, Metric System Board.

With regard to the white label of both beer bot­tles, ABI
explained that it used the color white for its label because white presents the
strongest contrast to the amber color of ABI’s bottle; it is also the most
economical to use on labels, and the easiest to “bake” in the furnace
(p. 16, TSN of September 20, 1988). No
one can have a monopoly of the color amber for bottles, nor of white for
labels, nor of the rectangular shape which is the usual configuration of
labels. Needless to say, the shape of
the bottle and of the label is unimportant. What is all important is the name of the product written on the label of
the bottle for that is how one beer may be distinguished from the others.

In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-­197, where two
competing tea products were both labelled as Formosan tea, both sold in 5-ounce
packages made of ordinary wrapping paper of conventional color, both with
labels containing designs drawn in green ink and Chinese characters written in
red ink, one label showing a double-decked jar in the center, the other, a
flower pot, this court found that the resemblances between the designs were not
sufficient to mislead the ordinary intelligent buyer, hence, there was no
unfair competi­tion. The Court held:

“x x x. In order that there may be deception of the buying
public in the sense necessary to constitute unfair competition, it is necessary
to suppose a public accus­tomed to buy, and therefore to some extent familiar
with, the goods in question. The test of fraudulent simulation is to be
found in the likelihood of the deception of persons in some measure acquainted
with an established design and desirous of purchasing the commodity with which
that design has been associated. The
test is not found in the deception, or possibility of the deception, of the
person who knows nothing about the design which has been counterfeited, and who
must be indifferent as between that and the other. The simulation, in order to be objectionable, must be such as
appears likely to mislead the ordi­narily intelligent buyer who has a need to
supply and is familiar with the article that he seeks to pur­chase.”

The main thrust of SMC’s complaint is not in­fringement of its
trademark, but unfair competition arising from the allegedly “confusing
similarity” in the general appearance or trade dress of ABI’s BEER PALE
PILSEN beside SMC’s SAN MIGUEL PALE PILSEN (p. 209, Rollo).

SMC claims that the “trade dress” of BEER PALE
PILSEN is “confusingly similar” to its SAN MIGUEL PALE PILSEN
because both are bottled in 320 ml. steinie type, amber-colored bottles with
white rectangular labels.

However, when as in this case, the names of the competing
products are clearly different and their respective sources are prominently
printed on the label and on other parts of the bottle, mere similarity in the
shape and size of the container and label, does not constitute unfair
competition. The steinie bottle is a
standard bottle for beer and is universally used. SMC did not invent it nor patent it. The fact that SMC’s bottle is registered under R.A. No. 623 (as
amended by RA 5700, An Act to Regulate the Use of Duly Stamped or Marked
Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers) simply
prohibits manufacturers of other foodstuffs from the unauthorized use of SMC’s
bottles by refilling these with their products. It was not uncommon then for products such as patis (fish
sauce) and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE
PILSEN bottles. Registration of
SMC’s beer bottles did not give SMC a patent on the steinie or on bottles of
similar size, shape or color.

Most containers are standardized because they are usually made by
the same manufacturer. Milk, whether in
powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard ketchup or vinegar bottle
with its familiar elongated neck. Many
other grocery items such as coffee, mayonnaise, pickles and peanut butter are
sold in standard glass jars. The
manufacturers of these foodstuffs have equal right to use these standard tins,
bottles and jars for their products. Only their respective labels distinguish them from each other. Just as no milk producer may sue the others
for unfair competition because they sell their milk in the same size and shape
of milk can which he uses, neither may SMC claim unfair competition arising
from the fact that ABI’s BEER PALE PILSEN is sold, like SMC’s SAN
MIGUEL PALE PILSEN in amber steinie bottles.

The record does not bear out SMC’s apprehension that BEER PALE
PILSEN is being passed off as SAN MIGUEL PALE PILSEN. This is
unlikely to happen for consumers or buyers of beer generally order their beer
by brand. As pointed out by ABI’s
counsel, in supermarkets and tiendas, beer is ordered by brand, and the
customer surrenders his empty replacement bottles or pays a deposit to
guarantee the return of the empties. If
his empties are SAN MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE
PILSEN as replacement. In sari-sari
stores, beer is also ordered from the tindera by brand. The same is true in restaurants, pubs and
beer gardens–beer is ordered from the waiters by brand. (Op. cit. page 50.)

Considering further that SAN MIGUEL PALE PILSEN has
virtually monopolized the domestic beer market for the past hundred years,
those who have been drinking no other beer but SAN MIGUEL PALE PILSEN
these many years certainly know their beer too well to be deceived by a
newcomer in the market. If they
gravitate to ABI’s cheaper beer, it will not be because they are confused or
deceived, but because they find the competing product to their taste.

Our decision in this case will not diminish our ruling in
“Del Monte Corporation vs. Court of Appeals and Sunshine Sauce
Manufacturing Industries,” 181 SCRA 410, 419,^[3]
that:

“x x x to determine whether a trademark has been infringed, we
must consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable
to the marks as a totality, not usually to any part of it.”

That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving
cases of infringement and unfair competition, the courts should “take into
consideration several factors which would affect its conclusion, to wit: the age, training and education of the usual
purchaser, the nature and cost of the article, whether the article is bought
for immediate consumption and also the conditions under which it is usually
purchased” (181 SCRA 410, 418-419).

The Del Monte case involved catsup, a common household
item which is bought off the store shelves by housewives and house help who, if
they are illiterate and cannot identify the product by name or brand, would
very likely identify it by mere recollection of its appearance. Since the competitor, Sunshine Sauce Mfg.
Industries, not only used recycled Del Monte bottles for its catsup (despite
the warning embossed on the bottles: “Del Monte Corporation. Not
to be refilled.”) but also used labels which were “a colorable
imitation” of Del Monte’s label, we held that there was infringement of
Del Monte’s trademark and unfair competition by Sunshine.

Our ruling in Del Monte would not apply to beer which is not
usually picked up from a store shelf but ordered by brand by the
beer drinker himself from the storekeeper or waiter in a pub or restaurant.

Moreover, SMC’s brand or trademark: “SAN MIGUEL PALE PILSEN” is not infringed by ABI’s
mark: “BEER NA BEER” or
“BEER PALE PILSEN.” ABI makes its own bottle with a bulging neck to
differentiate it from SMC’s bottle, and prints ABI’s name in three (3) places
on said bottle (front, back and bottle cap) to prove that it has no intention
to pass off its “BEER” as “SAN MIGUEL.”

There is no confusing similarity between the competing beers for
the name of one is “SAN MIGUEL” while the competitor is plain
“BEER” and the points of dissimilarity between the two outnumber
their points of similarity.

Petitioner ABI has neither infringed SMC’s trade­mark nor
committed unfair competition with the latter’s SAN MIGUEL PALE PILSEN
product. While its BEER PALE PILSEN
admittedly competes with the latter in the open market, that competition is
neither unfair nor fraudu­lent. Hence,
we must deny SMC’s prayer to suppress it.

WHEREFORE, finding the petition for review merito­rious,
the same is hereby granted. The
decision and resolution of the Court of Appeals in CA-G.R. CV No. 28104 are
hereby set aside and that of the trial court is REINSTATED and AFFIRMED. Costs against the private respondent.

SO ORDERED.

Narvasa, C.J., (Chairman), Bidin, Regalado, Romero, Nocon,
Bellosillo, and Melo, JJ., concur.

Cruz, J., see dissent.

Feliciano, J., No part, one
party represented by former firm.

Padilla, J., No part, in view
of substantial interest in SMC.

Davide, Jr., J., joins Justice
Cruz in his dissent.

Quiason, J., no part.

---

^[1]
Composed of Justice Jose C. Campos, Jr. as chair­man, and Justices Ricardo
Francisco, fully concurring, Ricardo Pronove, partly concurring, Filemon H.
Mendoza and Oscar Herrera, both dissenting. Justice Aldecoa, who had written a separate dissenting opinion, retired
before a resolution on the motion for reconsideration was promulgated. He was
substituted by Justice Oscar M. Herrera.

^[2]
This portion of Justice Campos’
original decision ordering ABI to render an accounting to SMC and pay estimated
damages of P5,000,000.00 did not carry enough votes to become a decision as
only Justice Ricardo Francisco concurred fully with him. Justice Ricardo Pronove, although concurring
partially with Justice Campos’ decision, excepted from the portion ordering an
accounting and payment of P5 million damages.

^[3]
Cited in Justice R. Francisco’s
concurring opin­ion, p. 107, Rollo.

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