2
(d) the nature and cost of the articles98
(e) the descriptive properties, physical attributes or essential characteristics with reference to their form, composition,
texture or quality
(f) the purpose of the goods99
(g) whether the article is bought for immediate consumption,100 that is, day-to-day household items101
(h) the fields of manufacture102
(i) the conditions under which the article is usually purchased103 and
(j) the channels of trade through which the goods flow,104 how they are distributed, marketed, displayed and sold.105
The wisdom of this approach is its recognition that each trademark infringement case presents its own unique set of
facts. No single factor is preeminent, nor can the presence or absence of one determine, without analysis of the others,
the outcome of an infringement suit. Rather, the court is required to sift the evidence relevant to each of the criteria. This
requires that the entire panoply of elements constituting the relevant factual landscape be comprehensively
examined.106 It is a weighing and balancing process. With reference to this ultimate question, and from a balancing of
the determinations reached on all of the factors, a conclusion is reached whether the parties have a right to the relief
sought.107
A very important circumstance though is whether there exists a likelihood that an appreciable number of ordinarily
prudent purchasers will be misled, or simply confused, as to the source of the goods in question.108 The "purchaser" is
not the "completely unwary consumer" but is the "ordinarily intelligent buyer" considering the type of product involved.109
He is "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 some 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 the possibility of deception, of the person who knows nothing about the design which has
been counterfeited, and who must be indifferent between that and the other. The simulation, in order to be objectionable,
must be such as appears likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar with the
article that he seeks to purchase."110
Hence, in the adjudication of trademark infringement, we give due regard to the goods’ usual purchaser’s character,
attitude, habits, age, training and education. 111
Applying these legal precepts to the present case, petitioner’s use of the GALLO cigarette trademark is not likely to cause
confusion or mistake, or to deceive the "ordinarily intelligent buyer" of either wines or cigarettes or both as to the identity
of the goods, their source and origin, or identity of the business of petitioners and respondents.
Obviously, wines and cigarettes are not identical or competing products. Neither do they belong to the same class of
goods. Respondents’ GALLO wines belong to Class 33 under Rule 84[a] Chapter III, Part II of the Rules of Practice in
Trademark Cases while petitioners’ GALLO cigarettes fall under Class 34.
We are mindful that product classification alone cannot serve as the decisive factor in the resolution of whether or not
wines and cigarettes are related goods. Emphasis should be on the similarity of the products involved and not on the
arbitrary classification or general description of their properties or characteristics. But the mere fact that one person has
adopted and used a particular trademark for his goods does not prevent the adoption and use of the same trademark by
others on articles of a different description. 112
Both the Makati RTC and the CA held that wines and cigarettes are related products because: (1) "they are related forms
of vice, harmful when taken in excess, and used for pleasure and relaxation" and (2) "they are grouped or classified in
the same section of supermarkets and groceries."
We find these premises patently insufficient and too arbitrary to support the legal conclusion that wines and cigarettes
are related products within the contemplation of the Trademark Law and the Paris Convention.
First, anything –- not only wines and cigarettes ― can be used for pleasure and relaxation and can be harmful when
taken in excess. Indeed, it would be a grave abuse of discretion to treat wines and cigarettes as similar or related products
likely to cause confusion just because they are pleasure-giving, relaxing or potentially harmful. Such reasoning makes
no sense.
Second, it is common knowledge that supermarkets sell an infinite variety of wholly unrelated products and the goods
here involved, wines and cigarettes, have nothing whatsoever in common with respect to their essential characteristics,
quality, quantity, size, including the nature of their packages, wrappers or containers.113
Accordingly, the U.S. patent office and courts have consistently held that the mere fact that goods are sold in one store
under the same roof does not automatically mean that buyers are likely to be confused as to the goods’ respective
sources, connections or sponsorships. The fact that different products are available in the same store is an insufficient
standard, in and of itself, to warrant a finding of likelihood of confusion.114
In this regard, we adopted the Director of Patents’ finding in Philippine Refining Co., Inc. vs. Ng Sam and the Director of
Patents:115
In his decision, the Director of Patents enumerated the factors that set respondent’s products apart from the
goods of petitioner. He opined and we quote:
"I have taken into account such factors as probable purchaser attitude and habits, marketing
activities, retail outlets, and commercial impression likely to be conveyed by the trademarks if
used in conjunction with the respective goods of the parties, I believe that ham on one hand,
and lard, butter, oil, and soap on the other are products that would not move in the same
manner through the same channels of trade. They pertain to unrelated fields of
manufacture, might be distributed and marketed under dissimilar conditions, and are
displayed separately even though they frequently may be sold through the same retail
food establishments. Opposer’s products are ordinary day-to-day household items whereas
ham is not necessarily so. Thus, the goods of the parties are not of a character which purchasers
would likely attribute to a common origin.
The observations and conclusion of the Director of Patents are correct. The particular goods of the parties
are so unrelated that consumers, would not, in any probability mistake one as the source of origin of the
product of the other. (Emphasis supplied).
The same is true in the present case. Wines and cigarettes are non-competing and are totally unrelated products not
likely to cause confusion vis-à-vis the goods or the business of the petitioners and respondents.
Wines are bottled and consumed by drinking while cigarettes are packed in cartons or packages and smoked. There is
a whale of a difference between their descriptive properties, physical attributes or essential characteristics like form,
composition, texture and quality.
GALLO cigarettes are inexpensive items while GALLO wines are not. GALLO wines are patronized by middle-to-high-
income earners while GALLO cigarettes appeal only to simple folks like farmers, fishermen, laborers and other low-
income workers.116 Indeed, the big price difference of these two products is an important factor in proving that they are
in fact unrelated and that they travel in different channels of trade. There is a distinct price segmentation based on vastly
different social classes of purchasers.117
GALLO cigarettes and GALLO wines are not sold through the same channels of trade. GALLO cigarettes are Philippine-
made and petitioners neither claim nor pass off their goods as imported or emanating from Gallo Winery. GALLO
cigarettes are distributed, marketed and sold through ambulant and sidewalk vendors, small local sari-sari stores and
grocery stores in Philippine rural areas, mainly in Misamis Oriental, Pangasinan, Bohol, and Cebu.118 On the other
hand, GALLO wines are imported, distributed and sold in the Philippines through Gallo Winery’s exclusive contracts with
a domestic entity, which is currently Andresons. By respondents’ own testimonial evidence, GALLO wines are sold in
hotels, expensive bars and restaurants, and high-end grocery stores and supermarkets, not through sari-sari stores or
ambulant vendors.119
Furthermore, the Makati RTC and the CA erred in relying on Carling Brewing Company vs. Philip Morris, Inc.120 to
support its finding that GALLO wines and GALLO cigarettes are related goods. The courts a quo should have taken into
consideration the subsequent case of IDV North America, Inc. and R & A Bailey Co. Limited vs. S & M Brands, Inc.:121
IDV correctly acknowledges, however, that there is no per se rule that the use of the same mark on alcohol
and tobacco products always will result in a likelihood of confusion. Nonetheless, IDV relies heavily on the
decision in John Walker & Sons, Ltd. vs. Tampa Cigar Co., 124 F. Supp. 254, 256 (S.D. Fla. 1954), aff’d,
222 F. 2d 460 (5th Cir. 1955), wherein the court enjoined the use of the mark "JOHNNIE WALKER" on cigars
because the fame of the plaintiff’s mark for scotch whiskey and because the plaintiff advertised its scotch
whiskey on, or in connection with tobacco products. The court, in John Walker & Sons, placed great
significance on the finding that the infringers use was a deliberate attempt to capitalize on the senior
marks’ fame. Id. At 256. IDV also relies on Carling Brewing Co. v. Philip Morris, Inc., 297 F. Supp.
1330, 1338 (N.D. Ga. 1968), in which the court enjoined the defendant’s use of the mark "BLACK
LABEL" for cigarettes because it was likely to cause confusion with the plaintiff’s well-known mark
"BLACK LABEL" for beer.
xxx xxx xxx
Those decisions, however, must be considered in perspective of the principle that tobacco products
and alcohol products should be considered related only in cases involving special circumstances.
Schenley Distillers, Inc. v. General Cigar Co., 57C.C.P.A. 1213, 427 F. 2d 783, 785 (1970). The presence
of special circumstances has been found to exist where there is a finding of unfair competition or
where a ‘famous’ or ‘well-known mark’ is involved and there is a demonstrated intent to capitalize
on that mark. For example, in John Walker & Sons, the court was persuaded to find a relationship between
products, and hence a likelihood of confusion, because of the plaintiff’s long use and extensive advertising
of its mark and placed great emphasis on the fact that the defendant used the trademark ‘Johnnie Walker
with full knowledge of its fame and reputation and with the intention of taking advantage thereof.’ John