MCDONALD'S CORPORATION vs. L.C. BIG MAK BURGER, INC.

Back in the 90s you know I've learned power chords actually from a girl. Dig that she's so cool. Co'z actually I was more succumbed to guitar licks and rock leads I didn't know power chords were that amazing.

So  I brought my electric guitar to their house and had one to one session with her. Barbie Almalbis' 'Dahilan' was our first practice piece.

"Kunin mo lang lage yun dalawang heavy strings. Index finger mo dito.. ring finger mo dito.. ganun lang ang porma, tapos move move mo lang follow mo yung chord progression and let it slide" "Ganyan?" "O yan.. tira"... "Ang sarap pala ng power chords grabe" "Sabe sayo eh". 

She took a break, went inside. And after 5 minutes I figured it was taking her so long, so I went in.. found her at the dining table.. nagtitimpla ng Milo. "Nu 'gawa mo?"  "Nagtitimpla ng Milo.. 'tu mo? timpla kita" "Titimpla?" "Helloo?" (she took a drink) "Ang Milo kinakaen yan di yan iniinom... sinasayang mo lang eh!". And she bursted laughing while drinking.. lumabas yung Milo sa ilong hahahaha!. Damn it I was laughing like an hyena on my way out.

Alright. Here's the case.

MCDONALD'S CORPORATION, Petitioner here of course as we all know is a US corporation that operates a global chain of fast-food restaurants. 

Gosh.. If you don't know Ronald McDonald you'd probably take out a stun gun and freeze him or get a club and wack him on the head if he suddenly comes out from the bushes.  

McDonald's owns the "Big Mac"? their trademark for its "double-decker hamburger sandwich." It's actually registered with the US Trademark Registry since 1979. 

So based on this Home Registration, McDonald's applied for the registration of the same mark in the Principal Register of the then PHILIPPINE BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY ("PBPTT") (that's now IPO, Intellectual Property Office). Which was approved of course.

Now here comes the Pinoy ingenuity..

Respondent L.C. BIG MAK BURGER, INC. (LOL) a domestic corporation which operates fast-food outlets and snack vans in Metro Manila and nearby provinces comes out with a menu. Respondent corporation's menu includes hamburger sandwiches and other food items. (natatawa na ako)

Snack van pala ah.. naalala ko yung mga Jollijeep sa Makati... minsan kumakaen ako dun when I used to work at Ayala. Sarap kase kumaen ng nakatayo, presko, and nagdadaldalan kayo habang kumakaen, ang lalakas pa ng tawa nyo kahet nka corporate attire kayo.

So eto na nga si Big Mak..

On  October 1988, respondent corporation L.C. Big Mak Inc. applied with the PBPTT for the registration of the "Big Mak"  mark for its hamburger sandwiches. 

Pasok si Juan de la Cruz.. "ah 'Big Mac ah'??.. meron din kami nyan 'Big Mak' "  ahahaha..

And.. well of course the registration was opposed by Mr. Ronald McDonald's. McDonald's also informed LC Big Mak chairman of its exclusive right to the "Big Mac" mark and requested him to desist from using the "Big Mac" mark or any similar mark.

Pinoy talaga patawa no? "Register naten, register naten dali". 

Having received no reply, petitioners sued L.C. Big Mak Burger, Inc. and its directors before Makati RTC   for TRADEMARK INFRINGEMENT and UNFAIR COMPETITION. 

So.. 'Big Mac' sued 'Big Mak'..

RTC rendered  Decision finding respondent corporation LIABLE FOR TRADEMARK INFRINGEMENT and UNFAIR COMPETITION. 

Here's the thing...

CA reversed the RTC ruling.

ISSUE:  

Is respondent corporation liable for TRADEMARK INFRINGEMENT? 

RULING:    

Yes.

Section 22 of Republic Act No. 166, as amended, defines trademark infringement as follows: 

Infringement, what constitutes. - Any person who 

1. 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  

2. 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.

To establish trademark infringement, the following elements must be shown: 

(1) the validity of plaintiff's mark; 

(2) the plaintiff's ownership of the mark; and 

(3) the use of the mark or its colorable imitation by the alleged infringer results in "likelihood of confusion." 

Court said it is the element of likelihood of confusion that is the gravamen of trademark infringement.

1st element:  

A mark is valid if it is distinctive and not merely generic and descriptive. 

The "Big Mac" mark, which should be treated in its entirety and not dissected word for word, is neither generic nor descriptive. Generic marks are commonly used as the name or description of a kind of goods, such as "Lite" for beer. Descriptive marks, on the other hand, convey the characteristics, functions, qualities or ingredients of a product to one who has never seen it or does not know it exists, such as "Arthriticare" for arthritis medication. On the contrary, "Big Mac" falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual characteristics of the product it represents. As such, it is highly distinctive and thus valid. 

2nd element:  

Petitioners have duly established McDonald's exclusive ownership of the "Big Mac" mark. Prior valid registrants of the said mark had already assigned his rights to McDonald's. 

So the court finds that there is confusion of goods in this case since RESPONDENTS USED THE "BIG MAK" MARK ON THE SAME GOODS, I.E. HAMBURGER SANDWICHES, THAT PETITIONERS' "BIG MAC" MARK IS USED.

Ayoown..

There is also confusion of business due to Respondents' use of the "Big Mak" mark in the sale of hamburgers, the same business that petitioners are engaged in, also results in confusion of business. The registered trademark owner may use his mark on the same or similar products, in different segments of the market, and at different price levels depending on variations of the products for specific segments of the market. The registered trademark owner enjoys protection in product and market areas that are the normal potential expansion of his business. 

Here's the Dominancy Test Theory.. 

Furthermore, IN DETERMINING LIKELIHOOD OF CONFUSION, THE SC HAS RELIED ON THE DOMINANCY TEST (the similarity of the prevalent features of the competing trademarks that might cause confusion) over the so called HOLISTIC TEST (the consideration of the entirety of the marks as applied to the products, including the labels and packaging).

Applying the dominancy test, Respondents' use of the "Big Mak" mark results in likelihood of confusion. Aurally the two marks are the same, with the first word of both marks phonetically the same, and the second word of both marks also phonetically the same. Visually, the two marks have both two words and six letters, with the first word of both marks having the same letters and the second word having the same first two letters. 

So of course Mr. Ronald McDonald wins this case.