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Omnibus registration is not contemplated by our Trademark Law." (1226).

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for the briefs it manufactures because as aptly remarked by Justice Sanchez in Sterling Products
International Inc. vs. Farbenfabriken Bayer (27 SCRA 1214 [1969]):
"Really, if the certificate of registration were to be deemed as including goods not
specified therein, then a situation may arise whereby an applicant may be tempted to
register a trademark on any and all goods which his mind may conceive even if he had
never intended to use the trademark for the said goods. We believe that such omnibus
registration is not contemplated by our Trademark Law." (1226).
NO LIKELIHOOD OF CONFUSION, MISTAKE
OR DECEIT AS TO THE IDENTITY OR SOURCE
OF PETITIONERS’ AND RESPONDENTS’
GOODS OR BUSINESS
A crucial issue in any trademark infringement case is the likelihood of confusion, mistake or deceit as to the identity,
source or origin of the goods or identity of the business as a consequence of using a certain mark. Likelihood of confusion
is admittedly a relative term, to be determined rigidly according to the particular (and sometimes peculiar) circumstances
of each case. Thus, in trademark cases, more than in other kinds of litigation, precedents must be studied in the light of
each particular case. 65
There are two types of confusion in trademark infringement. The first is "confusion of goods" when an otherwise prudent
purchaser is induced to purchase one product in the belief that he is purchasing another, in which case defendant’s
goods are then bought as the plaintiff’s and its poor quality reflects badly on the plaintiff’s reputation. The other is
"confusion of business" wherein the goods of the parties are different but the defendant’s product can reasonably (though
mistakenly) be assumed to originate from the plaintiff, thus deceiving the public into believing that there is some
connection between the plaintiff and defendant which, in fact, does not exist.66
In determining the likelihood of confusion, the Court must consider: [a] the resemblance between the trademarks; [b] the
similarity of the goods to which the trademarks are attached; [c] the likely effect on the purchaser and [d] the registrant’s
express or implied consent and other fair and equitable considerations.
Petitioners and respondents both use "GALLO" in the labels of their respective cigarette and wine products. But, as held
in the following cases, the use of an identical mark does not, by itself, lead to a legal conclusion that there is trademark
infringement:
(a) in Acoje Mining Co., Inc. vs. Director of Patent,67 we ordered the approval of Acoje Mining’s application
for registration of the trademark LOTUS for its soy sauce even though Philippine Refining Company had
prior registration and use of such identical mark for its edible oil which, like soy sauce, also belonged to
Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents,68 we upheld the Patent Director’s
registration of the same trademark CAMIA for Ng Sam’s ham under Class 47, despite Philippine Refining
Company’s prior trademark registration and actual use of such mark on its lard, butter, cooking oil (all of
which belonged to Class 47), abrasive detergents, polishing materials and soaps;
(c) in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun Liong,69 we dismissed
Hickok’s petition to cancel private respondent’s HICKOK trademark registration for its Marikina shoes as
against petitioner’s earlier registration of the same trademark for handkerchiefs, briefs, belts and wallets;
(d) in Shell Company of the Philippines vs. Court of Appeals,70 in a minute resolution, we dismissed the
petition for review for lack of merit and affirmed the Patent Office’s registration of the trademark SHELL used
in the cigarettes manufactured by respondent Fortune Tobacco Corporation, notwithstanding Shell
Company’s opposition as the prior registrant of the same trademark for its gasoline and other petroleum
products;
(e) in Esso Standard Eastern, Inc. vs. Court of Appeals,71 we dismissed ESSO’s complaint for trademark
infringement against United Cigarette Corporation and allowed the latter to use the trademark ESSO for its
cigarettes, the same trademark used by ESSO for its petroleum products, and
(f) in Canon Kabushiki Kaisha vs. Court of Appeals and NSR Rubber Corporation,72 we affirmed the rulings
of the Patent Office and the CA that NSR Rubber Corporation could use the trademark CANON for its
sandals (Class 25) despite Canon Kabushiki Kaisha’s prior registration and use of the same trademark for
its paints, chemical products, toner and dyestuff (Class 2).
Whether a trademark causes confusion and is likely to deceive the public hinges on "colorable imitation"73 which has
been defined as "such similarity in form, content, words, sound, meaning, special arrangement or general appearance
of the trademark or tradename in their overall presentation or in their essential and substantive and distinctive parts as
would likely mislead or confuse persons in the ordinary course of purchasing the genuine article."74
Jurisprudence has developed two tests in determining similarity and likelihood of confusion in trademark resemblance:75
(a) the Dominancy Test applied in Asia Brewery, Inc. vs. Court of Appeals76 and other cases,77 and
(b) the Holistic or Totality Test used in Del Monte Corporation vs. Court of Appeals78 and its preceding
cases.79
The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks which might cause
confusion or deception, and thus infringement. If the competing trademark contains the main, essential or dominant
features of another, and confusion or deception is likely to result, infringement takes place. Duplication or imitation is not
necessary; nor is it necessary that the infringing label should suggest an effort to imitate. The question is whether the
use of the marks involved is likely to cause confusion or mistake in the mind of the public or deceive purchasers.80
On the other hand, the Holistic Test requires that the entirety of the marks in question be considered in resolving
confusing similarity. Comparison of words is not the only determining factor. The trademarks in their entirety as they
appear in their respective labels or hang tags must also be considered in relation to the goods to which they are attached.
The discerning eye of the observer must focus not only on the predominant words but also on the other features
appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to the other.81
In comparing the resemblance or colorable imitation of marks, various factors have been considered, such as the
dominant color, style, size, form, meaning of letters, words, designs and emblems used, the likelihood of deception of
the mark or name's tendency to confuse82 and the commercial impression likely to be conveyed by the trademarks if
used in conjunction with the respective goods of the parties.83
Applying the Dominancy and Holistic Tests, we find that the dominant feature of the GALLO cigarette trademark is the
device of a large rooster facing left, outlined in black against a gold background. The rooster’s color is either green or
red green for GALLO menthols and red for GALLO filters. Directly below the large rooster device is the word GALLO.
The rooster device is given prominence in the GALLO cigarette packs in terms of size and location on the labels.84
The GALLO mark appears to be a fanciful and arbitrary mark for the cigarettes as it has no relation at all to the product
but was chosen merely as a trademark due to the fondness for fighting cocks of the son of petitioners’ president.
Furthermore, petitioners adopted GALLO, the Spanish word for rooster, as a cigarette trademark to appeal to one of their
target markets, the sabungeros (cockfight aficionados).85
Also, as admitted by respondents themselves,86 on the side of the GALLO cigarette packs are the words "MADE BY
MIGHTY CORPORATION," thus clearly informing the public as to the identity of the manufacturer of the cigarettes.
On the other hand, GALLO Winery’s wine and brandy labels are diverse. In many of them, the labels are embellished
with sketches of buildings and trees, vineyards or a bunch of grapes while in a few, one or two small roosters facing right
or facing each other (atop the EJG crest, surrounded by leaves or ribbons), with additional designs in green, red and
yellow colors, appear as minor features thereof.87 Directly below or above these sketches is the entire printed name of
the founder-owners, "ERNEST & JULIO GALLO" or just their surname "GALLO,"88 which appears in different fonts,
sizes, styles and labels, unlike petitioners’ uniform casque-font bold-lettered GALLO mark.
Moreover, on the labels of Gallo Winery’s wines are printed the words "VINTED AND BOTTLED BY ERNEST & JULIO
GALLO, MODESTO, CALIFORNIA."89
The many different features like color schemes, art works and other markings of both products drown out the similarity
between them the use of the word “GALLO” ― a family surname for the Gallo Winery’s wines and a Spanish word for
rooster for petitioners’ cigarettes.
WINES AND CIGARETTES ARE NOT
IDENTICAL, SIMILAR, COMPETING OR
RELATED GOODS
Confusion of goods is evident where the litigants are actually in competition; but confusion of business may arise between
non-competing interests as well.90
Thus, apart from the strict application of Section 20 of the Trademark Law and Article 6bis of the Paris Convention which
proscribe trademark infringement not only of goods specified in the certificate of registration but also of identical or similar
goods, we have also uniformly recognized and applied the modern concept of "related goods."91 Simply stated, when
goods are so related that the public may be, or is actually, deceived and misled that they come from the same maker or
manufacturer, trademark infringement occurs.92
Non-competing goods may be those which, though they are not in actual competition, are so related to each other that
it can reasonably be assumed that they originate from one manufacturer, in which case, confusion of business can arise
out of the use of similar marks.93 They may also be those which, being entirely unrelated, cannot be assumed to have
a common source; hence, there is no confusion of business, even though similar marks are used.94 Thus, there is no
trademark infringement if the public does not expect the plaintiff to make or sell the same class of goods as those made
or sold by the defendant.95
In resolving whether goods are related,96 several factors come into play:
(a) the business (and its location) to which the goods belong
(b) the class of product to which the goods belong
(c) the product's quality, quantity, or size, including the nature of the package, wrapper or container 97

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(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

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for the briefs it manufactures because as aptly remarked by Justice Sanchez in Sterling Products International Inc. vs. Farbenfabriken Bayer (27 SCRA 1214 [1969]): "Really, if the certificate of registration were to be deemed as including goods not specified therein, then a situation may arise whereby an applicant may be tempted to register a trademark on any and all goods which his mind may conceive even if he had never intended to use the trademark for the said goods. We believe that such omnibus registration is not contemplated by our Trademark Law." (1226). NO LIKELIHOOD OF CONFUSION, MISTAKE OR DECEIT AS TO THE IDENTITY OR SOURCE OF PETITIONERS’ AND RESPONDENTS’ GOODS OR BUSINESS A crucial issue in any trademark infringement case is the likelihood of confusion, mistake or deceit as to the identity, source or origin of the goods or identity of the business as a consequence of using a certain mark. Likelihood of confusion is admittedly a relative term, to be determined rigidly according to the particular (and sometimes peculiar) circumstances of each case. Thus, in trademark cases, more than in other kinds of litigation, precedents must be studied in the light of each particular case. 65 There are two types of confusion in trademark infringement. The first is "confusion of goods" when an otherwise prudent purchaser is induced to purchase one product in the belief that he is purchasing another, in which case defendant’s goods are then bought as the plaintiff’s an ...
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