FIRST DIVISION

[G.R. No. L-29971. August 31, 1982.]

ESSO STANDARD
EASTERN, INC., petitioner,
vs. THE
**
HONORABLE COURT OF APPEALS
and UNITED CIGARETTE
CORPORATION, respondents.

Gonzalo W . Gonzales and Associates for petitioner.

The Solicitor General for respondents.

SYNOPSIS
Petitioner led a case against private respondent in the Court of First Instance of
Manila for trademark infringement alleging that after the latter had acquired in
November, 1963 the business, factory and patent rights of La Oriental Tobacco
Corporation, it began to use the trademark ESSO on its cigarettes, the same
trademark used by petitioner in its quality petroleum products which was likely to
cause confusion or deception on the part of the purchasing public as to its origin or
source, to the detriment of its own products. In its answer, private respondent
admitted the use of the trademark ESSO on its own product of cigarettes but
claimed that these were not identical to those produced and sold by the petitioner.
The trial court found private respondent guilty of infringement of trademark. On
appeal, the judgment was reversed and the complaint was dismissed. Hence, this
petition.
On certiorari, the Supreme Court armed the appellate court's decision ruling that
the goods are obviously dierent from each other as to make it unlikely that
purchasers would think that petitioner is the manufacturer of respondent's goods.
The mere fact that one person has adopted and used a trademark on his goods does
not prevent the adoption and use of the same trademark by others on unrelated
articles of a different kind.
Judgment affirmed.
SYLLABUS
1.
COMMERCIAL LAW; PATENTS; INFRINGEMENT OF TRADEMARKS; MEANING
OF. The law denes infringement as the use without consent of the trademark
owner of any "reproduction, counterfeit, copy or colorable imitation of any
registered mark or trademark in connection with the sale, oering 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 tradename and
apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs,
prints, package, wrappers, receptacles, or advertisement intended to be used upon
or in connection with such goods, business or services." Implicit in this denition is
the concept that the goods must be so related that there is a likelihood either of
confusion of goods or business (Sec. 22 Trademark Law; 2 Callman, Unfair
Competition and Trademarks, p. 1324).
2.
ID.; ID.; ID.; NOT A CASE OF. In the situation before Us, the goods are
obviously dierent from each other with absolutely no iota of similitude. They are
so foreign to each other as to make it unlikely that the purchasers would think that
petitioner is the manufacturer of respondent's goods. The mere fact that one person
has adopted and used a trademark on his goods does not prevent the adoption and
use of the same trademark by others on unrelated articles of a dierent kind,
(American Foundries vs. Robertson, 269 US 372, 381.)
DECISION
TEEHANKEE, J :
p

The Court arms on the basis of controlling doctrine the appealed decision of the
Court of Appeals reversing that of the Court of First Instance of Manila and
dismissing the complaint led by herein petitioner against private respondent for
trade infringement for using petitioner's trademark ESSO, since it clearly appears
that the goods on which the trademark ESSO is used by respondent is noncompeting and entirely unrelated to the products of petitioner so that there is no
likelihood of confusion or deception on the part of the purchasing public as to the
origin or source of the goods.
cdasoa

Petitioner Esso Standard Eastern, Inc., 1 then a foreign corporation duly licensed to
do business in the Philippines, is engaged in the sale of petroleum products which
are identied with its trademark ESSO (which as successor of the defunct Standard
Vacuum Oil Co. it registered as a business name with the Bureaus of Commerce and
Internal Revenue in April and May, 1962). Private respondent in turn is a domestic
corporation then engaged in the manufacture and sale of cigarettes, after it
acquired in November, 1963 the business, factory and patent rights of its
predecessor La Oriental Tobacco Corporation, one of the rights thus acquired having
been the use of the trademark ESSO on its cigarettes, for which a permit had been
duly granted by the Bureau of Internal Revenue.
Barely had respondent as such successor started manufacturing cigarettes with the
trademark ESSO, when petitioner commenced a case for trademark infringement in
the Court of First Instance of Manila. The complaint alleged that the petitioner had
been for many years engaged in the sale of petroleum products and its trademark
ESSO had acquired a considerable goodwill to such an extent that the buying public

had always taken the trademark ESSO as equivalent to high quality petroleum
products. Petitioner asserted that the continued use by private respondent of the
same trademark ESSO on its cigarettes was being carried out for the purpose of
deceiving the public as to its quality and origin to the detriment and disadvantage of
its own products.
In its answer, respondent admitted that it used the trademark ESSO on its own
product of cigarettes, which was not identical to those produced and sold by
petitioner and therefore did not in any way infringe on or imitate petitioner's
trademark. Respondent contended that in order that there may be trademark
infringement, it is indispensable that the mark must be used by one person in
connection or competition with goods of the same kind as the complainant's.
The trial court, relying on the old cases of Ang vs. Teodoro 2 and Arce & Sons, Inc. vs.
Selecta Biscuit Company, 3 referring to related products, decided in favor of
petitioner and ruled that respondent was guilty of infringement of trademark.
On appeal, respondent Court of Appeals found that there was no trademark
infringement and dismissed the complaint. Reconsideration of the decision having
been denied, petitioner appealed to this Court by way of certiorari to reverse the
decision of the Court of Appeals and to reinstate the decision of the Court of First
Instance of Manila. The Court finds no ground for granting the petition.
The law denes infringement as the use without consent of the trademark owner of
any "reproduction, counterfeit, copy or colorable imitation of any registered mark or
tradename in connection with the sale, oering 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 tradename 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." 4 Implicit in this denition is the concept that the goods
must be so related that there is a likelihood either of confusion of goods or business.
5 But likelihood of confusion is a relative concept; to be determined only according
to the particular, and sometimes peculiar, circumstances of each case. 6 It is
unquestionably true that, as stated in Coburn vs. Puritan Mills, Inc.: 7 "In trademark
cases, even more than in other litigation, precedent must be studied in the light of
the facts of the particular case."
It is undisputed that the goods on which petitioner uses the trademark ESSO,
petroleum products, and the product of respondent, cigarettes, are non-competing.
But as to whether trademark infringement exists depends for the most part upon
whether or not the goods are so related that the public may be, or is actually,
deceived and misled that they came from the same maker or manufacturer. For
non-competing goods may be those which, though they are not in actual
competition, are so related to each other that it might reasonably be assumed that
they originate from one manufacturer. Non-competing goods may also be those

which, being entirely unrelated, could not reasonably be assumed to have a

common source. In the former case of related goods, confusion of business could
arise out of the use of similar marks; in the latter case of non-related goods, it could
not. 8 The vast majority of courts today follow the modern theory or concept of
"related goods" 9 which the Court has likewise adopted and uniformly recognized
and applied. 10
Goods are related when they belong to the same class or have the same descriptive
properties; when they possess the same physical attributes or essential
characteristics with reference to their form, composition, texture or quality. They
may also be related because they serve the same purpose or are sold in grocery
stores. 11 Thus, biscuits were held related to milk because they are both food
products. 12 Soap and perfume, lipstick and nail polish are similarly related because
they are common household items nowadays. 13 The trademark "Ang Tibay" for
shoes and slippers was disallowed to be used for shirts and pants because they
belong to the same general class of goods. 14 Soap and pomade, although noncompetitive, were held to be similar or to belong to the same class, since both are
toilet articles. 5 But no confusion or deception can possibly result or arise when the
name "Wellington" which is the trademark for shirts, pants, drawers and other
articles of wear for men, women and children is used as a name of a department
store. 16

Thus, in Acoje Mining Co., Inc. vs. Director of Patents, 17 the Court, through now
Chief Justice Fernando, reversed the patent director's decision on the question of
"May petitioner Acoje Mining Company register for the purpose of advertising its
product, soy sauce, the trademark LOTUS, there being already in existence one such
registered in favor of the Philippine Rening Company for its product, edible oil, it
being further shown that the trademark applied for is in smaller type, colored
dierently, set on a background which is dissimilar as to yield a distinct
appearance?" and ordered the granting of petitioner's application for registration
ruling that "there is quite a dierence between soy sauce and edible oil. If one is in
the market for the former, he is not likely to purchase the latter just because of the
trademark "LOTUS" and "when regard is had for the principle that the two
trademarks in their entirety as they appear in their respective labels should be
considered in relation to the goods advertised before registration could be denied,
the conclusion is inescapable that respondent Director ought to have reached a
different conclusion."
By the same token, in the recent case of Philippine Refining Co., Inc. vs. Ng Sam and
Director of Patents, 18 the Court upheld the patent director's registration of the
same trademark CAMIA for herein respondent's product of ham notwithstanding is
already being used by herein petitioner for a wide range of products: lard, butter,
cooking oil, abrasive detergents, polishing materials and soap of all kinds. The Court,
after noting that the same CAMIA trademark had been registered by two other
companies, Everbright Development Company and F. E. Zuellig, Inc. for their
respective products of thread and yarn (for the former) and textiles, embroideries

and laces (for the latter) ruled that "while ham and some of the products of
petitioner are classied under Class 47 (Foods and Ingredients of Food), this alone
cannot serve as the decisive factor in the resolution of whether or not they are
related goods. Emphasis should be on the similarity of the products involved and not
on the arbitrary classication or general description of their properties or
characteristics." The Court, therefore, concluded that "In ne, We hold that the
businesses of the parties are noncompetitive and their products so unrelated that
the use of identical trademarks is not likely to give rise to confusion, much less
cause damage to petitioner."
In the situation before us, the goods are obviously dierent from each other with
"absolutely no iota of similitude" 19 as stressed in respondent court's judgment.
They are so foreign to each other as to make it unlikely that purchasers would think
that petitioner is the manufacturer of respondent's goods. The mere fact that one
person has adopted and used a trademark on his goods does not prevent the
adoption and use of the same trademark by others on unrelated articles of a
different kind. 20
Petitioner uses the trademark ESSO and holds certicate of registration of the
trademark for petroleum products, including aviation gasoline, grease, cigarette
lighter uid and other various products such as plastics, chemicals, synthetics,
gasoline solvents, kerosene, automotive and industrial fuel, bunker fuel, lubricating
oil, fertilizers, gas, alcohol, insecticides and the "ESSO Gasul" burner, while
respondent's business is solely for the manufacture and sale of the unrelated
product of cigarettes. The public knows too well that petitioner deals solely with
petroleum products that there is no possibility that cigarettes with ESSO brand will
be associated with whatever good name petitioner's ESSO trademark may have
generated. Although petitioner's products are numerous, they are of the same class
or line of merchandise which are noncompeting with respondent's product of
cigarettes, which as pointed out in the appealed judgment is beyond petitioner's
"zone of potential or natural and logical expansion." 21 When a trademark is used by
a party for a product in which the other party does not deal, the use of the same
trademark on the latter's product cannot be validly objected to. 22
Another factor that shows that the goods involved are non-competitive and nonrelated is the appellate court's nding that they ow through dierent channels of
trade, thus: "The products of each party move along and are disposed through
dierent channels of distribution. The (petitioner's) products are distributed
principally through gasoline service and lubrication stations, automotive shops and
hardware stores. On the other hand, the (respondent's) cigarettes are sold in sarisari stores, grocery stores, and other small distributor outlets. (Respondent's)
cigarettes are even peddled in the streets while (petitioner's) 'gasul' burners are
not. Finally, there is a marked distinction between oil and tobacco, as well as
between petroleum and cigarettes. Evidently, in kind and nature, the products of
(respondent) and of (petitioner) are poles apart." 23
Respondent court correctly ruled that considering the general appearances of each
mark as a whole, the possibility of any confusion is unlikely. A comparison of the

labels of the samples of the goods submitted by the parties shows a great many
dierences on the trademarks used. As pointed out by respondent court in its
appealed decision, "(A) witness for the plainti, Mr. Buhay, admitted that the color
of the 'ESSO' used by the plainti for the oval design where the blue word ESSO
contained is the distinct and unique kind of blue. In his answer to the trial court's
question, Mr. Buhay informed the court that the plainti never used its trademarks
on any product where the combination of colors is similar to the label of the Esso
cigarettes," and "Another witness for the plainti, Mr. Tengco, testied that
generally, the plainti's trademark comes all in either red, white, blue or any
combination of the three colors. It is to be pointed out that not even a shade of
these colors appears on the trademark of the appellant's cigarette. The only color
that the appellant uses in its trademark is green." 24
Even the lower court, which ruled initially for petitioner, found that a "noticeable
dierence between the brand ESSO being used by the defendants and the
trademark ESSO of the plainti is that the former has a rectangular background,
while in that of the plaintiff the word ESSO is enclosed in an oval background."
cdtai

In point of fact and time, the Court's dismissal of the petition at bar was presaged
by its Resolution of May 21, 1979 dismissing by minute resolution the petition for
review for lack of merit in the identical case of Shell Company of the Philippines,
Ltd. vs. Court of Appeals, 25 wherein the Court thereby armed the patent oce's
registration of the trademark SHELL as used in the cigarettes manufactured by
therein respondent Fortune Tobacco Corporation notwithstanding the therein
petitioner Shell Company's opposition thereto as the prior registrant of the same
trademark for its gasoline and other petroleum trademarks, on the strength of the
controlling authority of Acoje Mining Co. vs. Director of Patents, supra, and the same
rationale that "(I)n the Philippines, where buyers of appellee's (Fortune Corp.'s)
cigarettes, which are low cost articles, can be more numerous compared to buyers of
the higher priced petroleum and chemical products of appellant (Shell Co.) and
where appellant (Shell) is known to be in the business of selling petroleum and
petroleum-based chemical products, and no others, it is dicult to conceive of
confusion in the minds of the buying public in the sense it can be thought that
appellant (Shell) is the manufacturer of appellee's (Fortune's) cigarettes, or that
appellee (Fortune) is the manufacturer or processor of appellant's (Shell's)
petroleum and chemical products." 26
ACCORDINGLY, the petition is dismissed and the decision of respondent Court of
Appeals is hereby affirmed.

Melencio-Herrera Plana, Relova and Gutierrez, Jr., JJ ., concur.

Makasiar, J ., is on official leave.
Vasquez, J ., took no part.
Footnotes
**

First Division then composed of Villamor, Presiding Justice, ponente, Concepcion,

Jr. and Mojica, JJ.

1.

On December 31, 1969, by virtue of an "Agreement of Exchange and Transfer,"

the businesses, properties and other assets in the Philippines of Esso Standard
Eastern, Inc. were transferred to Esso Philippines, Inc. Its petition to be
substituted by Esso Philippines, Inc. as party petitioner was denied in a resolution
of this Court dated April 7, 1970, pursuant to the then Solicitor General's
opposition "because of the possible legal consequences that may arise under the
provisions of the Laurel-Langley Act and other related laws."

2.

74 Phil. 50.

3.

1 SCRA 253.

4.

Sec. 22, Trademark Law.

5.

2 Callman, Unfair Competition and Trademarks, p. 1324.

6.

Ibid, p. 1123.

7.

108 F. 2d 377, 378.

8.

2 Callman, Unfair Competition and Trademarks, p. 1336.

9.

2 McCarthy, Trademarks and Unfair Competition, p. 119.

10.

Vide: Arce vs. Selecta, 1 SCRA 253 (1961); Chua Che vs. Phil. Patents Oce, 13
SCRA 67 (1965); Ang vs. Teodoro, 74 Phil. 50; Khe vs. Lever Bros. Co., 49 O.G.
3891 (1941); Ang Si Heng & Dee vs. Wellington Dept. Store, 92 Phil. 448; Acoje
Mining Co., Inc. vs. Director of Patents, 38 SCRA 480 (1971).

11.

2 Callman, Unfair Competition & Trade Marks, p. 1257.

12.

Arce vs. Selecta, supra.

13.

Chua Che vs. Phils. Patent Office, supra.

14.

Ang vs. Teodoro, supra.

15.

Khe vs. Lever Bros. Co., supra.

16.

Ang Si Heng & Dee vs. Wellington Department Store, supra.

17.

38 SCRA 480 (1971).

18.

G.R. No. L-26676, July 30, 1982 (2nd Division); see also Leviton Industries vs.
Salvador, G.R. L-40163, June 19, 1982.

19.

Record, p. 128.

20.

American Foundries vs. Robertson, 269 US 372, 381.

21.

Record at page 138.

22.

George W. Luft Co., Inc. vs. Ngo Guan, 18 SCRA 944 (1966).

23.

Record at pages 135-136.

24.

Record at pages 137-138.

25.

G.R. No. L-49145, petition for review denied May 21, 1979 and judgment entered
June 28, 1979.

26.

Idem, separate opinion of Court of Appeals Justice Corazon Juliano Agrava;

Record at page 77.