Question Q214

National Group: The Philippines

Title: Protection against the dilution of a trade mark

Contributors: Aleli Angela G. Quirino

John Paul M. Gaba
Maria Isabel M. Llave
Maria Bienvenida Angelica D. Hipolito
Kurt Glen T. Yeung

Representative within
Working Committee: [please insert name]

Date: 31 March 2010

Questions

I. Analysis of current law and case law

The Groups are invited to answer the following questions under their national laws:

1. Do the laws of your country provide for protection against dilution of a trademark? If
so, which laws?

Yes. Several provisions in the chapter on Trademark in Republic Act No. 8293, otherwise
known as the Intellectual Property Code (IP Code, for brevity), provide for protection against
dilution of a trademark.1

2. Is there a legal definition of dilution in your legislation or case law?

The IP Code does not categorically define what constitutes trademark dilution. This
notwithstanding, considering that the protection of trademarks against dilution is synonymous
with the protection of the reputation and distinctiveness of a trademark, especially well-known
marks, the following provisions of the IP Code can be used to protect one’s mark against
dilution:

1 The IP Code was enacted in 01 January

1998.

1
 “Section 147. Rights Conferred. – 147.1. The owner of a registered mark shall have
the exclusive right to prevent all third parties not having the owner’s consent from using
in the course of trade identical or similar signs or containers for goods or services which
are identical or similar to those in respect of which the trademark is registered where
such use would result in a likelihood of confusion. In case of the use of an identical
sign for identical goods or services, a likelihood of confusion shall be presumed.

147.2. The exclusive right of the owner of a well-known mark defined in Subsection
123.1(e) which is registered in the Philippines shall extend to goods and services which
are not similar to those in respect of which the mark is registered: Provided, That use of
that mark in relation to those goods or services would indicate a connection between
those goods or services and the owner of the registered mark: Provided, further, That
the interests of the owner and of the registered mark are likely to be damaged by such
use.

Section 168. Unfair Competition, Rights, Regulation and Remedies. – 168.1. A

person who has identified in the mind of the public the goods he manufactures or deals
in, his business or services from those of others, whether or not a registered mark is
employed, has a property right in the goodwill of the said goods, business or services
so identified, which will be protected in the same manner as other property rights.” 2

The aforequoted provision of Subsection 147.2 of the IP Code was adopted from
Article 16(3) of the TRIPS Agreement.3

In the case Levi Strauss & Co. v. Clinton Apparelle, Inc.,4 the Philippine Supreme
Court defined trademark dilution as “the lessening of the capacity of a famous mark to identify
and distinguish goods or services, regardless of the presence or absence of: (1) competition
between the owner of the famous mark and other parties; or (2) likelihood of confusion,
mistake, or deception. The Levi Strauss case is the only local jurisprudence that specifically
defined trademark dilution. In defining trademark dilution in the Levi Strauss case, the
Philippine Supreme Court was quoting the ruling in the U.S. case of Toys “R” Us v.

2 With respect to the aforequoted Subsection 147.2 of the IP Code on well-known marks, Subsection
123.1(e) of the IP Code provides:

“Section 123. – 123.1. A mark cannot be registered if it:

XXX XXX XXX

(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which
is considered by the competent authority of the Philippines to be wellknown
internationally and in the Philippines, whether or not it is registered here, as
being already a mark of a person other than the applicant for registration, and
used for identical or similar goods or services: Provided, That in determining
whether a mark is well-known, account shall be taken of the knowledge of the
relevant sector of the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a result of the
promotion of the mark XXX XXX XXX.”
3
Paragraph 13 of the Working Guidelines recognizes Article 16(3) of the TRIPS Agreement as a
protection against trademark dilution. Article 16(3) of the TRIPS Agreement provides:

“Article 16 – Rights Conferred

XXX XXX XXX

2
 3. Article 6(bis) of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services
which are not similar to those in respect of which a trademark is registered, provided, that use of
that trademark in relation to those goods or services would indicate a connection between those
goods or services and the owner of the registered trademark and provided that the interests of
the owner of the registered trademark are likely to be damaged.”
4
G.R. No. 138900, 20 September 2005.

Akkaoui.2 Moreover, the discussion by the Supreme Court of the concept of trademark
dilution is not the part of the main ruling of the Court, but is merely an obiter dictum.

Notwithstanding the express definition of trademark dilution in the Levi Strauss case, the
Supreme Court had the occasion to discuss the nature or essence of trademark dilution as
early as 1942 in the case of Ang v. Teodoro.3 Unlike the Levi Strauss case, the discussion
on trademark dilution in the Ang case is part of the main ruling of the Supreme Court, albeit
the Court did not explicitly used the term “trademark dilution” but used the term “unfair
competition” and “unfair trading” in their generic sense. In the Ang case, the Supreme Court
made the following discussion on the nature of trademark dilution:

“The courts have come to realize that there can be unfair competition or unfair trading
even if the goods are noncompeting, and that such unfair trading can cause injury or
damage to the first user of the given trademark, first, by prevention of the natural
expansion of his business and, second, by having his business reputation confused
with and put at the mercy of the second user. When noncompetitive products are sold
under the same mark, the gradual whittling away or dispersion of the identity and
hold upon the public mind of the mark created by its first user inevitably results.
The original owner is entitled to the preservation of the valuable link between him
and the public that has been created by his ingenuity and the merit of his wares
or services. Experience has demonstrated that when a well-known trademark is
adopted by another even for a totally different class of goods, it is done to get the
benefit of the reputation and advertisements of the originator of said mark, to
convey to the public a false impression of some supposed connection between
the manufacturer of the article sold under the original mark and the new articles
being tendered to the public under the same or similar mark. XXX XXX XXX
The owner of a trademark or trade name has a property right in which he is
entitled to protection, since there is damage to him from confusion of reputation
or goodwill in the mind of the public as well as from confusion of goods. The
modern trend is to give emphasis to the unfairness of the acts and to classify
and treat the issue as a fraud [underscoring added].”4

3.1. Which trademarks are afforded protection against dilution? What are the eligibility
criteria? (Please only briefly list the eligibility criteria here; more detailed explanations
will be required below).

Generally, a trademark which is determined by a competent authority in the

Philippines as a well-known mark is entitled to protection against dilution. In the Levi Strauss
case, the Supreme Court outlined the following criteria in order that a mark be entitled to
protection against dilution:

1. The trademark sought to be protected is famous and distinctive;

2 40 U.S. P.Q. 2d (BNA) 1836 (N.D. Cal.

1996).
3
6
G.R. No. 48226, 14 December 1942.
47
Ibid.

3
 2. The use by the junior user began after the prior user’s mark became famous;
and

3. Such subsequent use defames prior user’s mark.5

In order that a mark be considered as a famous or well-known mark, Rule 102 of the
Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or
Stamped Containers (Trademark Regulations, for brevity) provides for the following critreria
for determing whether a mark is well-known:

“Rule 102. Criteria for determining whether a mark is well-known. – In determining

whether a mark is well-known, the following criteria or any combination thereof may be
taken into account:

(a) The duration, extent and geographical area of any use of the mark, in
particular, the duration, extent and geographical area of any promotion
of the mark, including advertising or publicity and the presentation, at
fairs or exhibitions, of the goods and/or services to which the mark
applies;

(b) The market share, in the Philippines or in other countries, of the goods
and/or services to which the mark applies;

(c) The degree of the inherent or acquired distinction of the mark;

(d) The quality-image or reputation acquired by the mark;

(e) The extent to which the mark has been registered in the world;

(f) The exclusivity of registration attained by the mark in he world;

(g) The extent to which the mark has been used in the world;

(h) The exclusivity of use attained by the mark in the world;

(i) The commercial value attributed to the mark in the world;

(j) The record of successful protection of the rights in the mark;

(k) The outcome of litigations dealing with the issue of whether a mark is a
well-known mark; and

(l) The presence or absence of identical or similar marks validly registered

for or used on identical or similar goods or services and owned by
persons other than the person claiming that his mark is a well-known
mark.”

3.2. To be eligible for protection against dilution, does a mark need to be distinctive? If so,
does the protection depend upon the mark being inherently distinctive or are marks
that have acquired distinctiveness through use also protected?

5 8 Supra, at
note 4.

4
 Prevaling local laws, regulations, and jurisprudence do not distinguish between a
mark that is inherently distinctive and that which has acquired distinctiveness through use
before it becomes entitled to protection against dilution.

3.3.1 To be eligible for protection against dilution, does a mark need to have a reputation or
be well-known or famous? If so, when does a mark have a reputation, when is it
wellknown or when is it famous? Are the factors mentioned in paragraph 15 and 22
above relevant for determining whether a mark has a reputation, is well known or
famous? For what point in time does this have to be assessed?

As stated in the Levi Strauss case, a mark needs to be famous or well-known before it
becomes eligible for protection against dilution. Under Subsections 123.1(e) and (f) of the IP
Code, a mark shall attain well-known status if so determined and declared by a competent
authority in the Philippines. For purposes of determining whether a mark is well-known, Rule
100(c) of the Trademark Regulations defines “competent authority” as “the Court, the Director
General [of the Intellectual Property Office], the Director of the Bureau of Legal Affairs [of the
Intellectual Property Office], or any administrative agency or office vested with quasi-judicial
or judicial jurisdiction to hear and adjudicate any action to enforce the rights to a mark.”
Generally, the determination of whether a mark has attained a well-known status is made
when such is raised as an issue in a case filed with any of the aforementioned “competent
authorities”, and the latter promulgates a decision declaring that the mark is wellknown.

As discussed in our answer to Question 3.1 above, Rule 102 of the Trademark
Regulations provides for the criteria for determining whether a mark is well-known. The
criteria outlined in said provision are substantially the same as the factors mentioned in
paragraphs 15 and 22 of the Working Guidelines.

3.3.2 For a mark to have a reputation or to be considered well known or famous, must it meet
a certain knowledge or recognition threshold? If so, what is that threshold? What
percentage of population awareness is required? How widespread must the
awareness be across the country? If a mark is well known or famous in one country,
what effect, if any, does this have with regard to other countries?

To be considered well-known, a mark must meet a certain degree of public knowledge

or recognition. Under Sec. 123.1(e) of the IP Code, in determining whether a mark is well-
known, account shall be taken of the knowledge or recognition of the “relevant sector of the
public”, as opposed to the public at large. There is no required percentage of the population
or recognition threshold. The law simply requires that there is recognition of the mark in the
“relevant sector of the public”.

The fact that a mark is well-known or famous in another country shall also be taken
into account in determining whether a mark is well-known in the Philippines. Rule 102 of the
Trademark Regulations considers, among others, the extent of the use and recognition of a
mark in other countries in determining whether a mark is well-known under Philippine laws.
Under said rule, the following criteria consider the status of the mark in other countries:

1. The duration, extent and geographical area of any use or promotion of the
mark;

2. The market share, in the Philippines and in other countries, of the goods
and/or services to which the mark applies;

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 3. The extent of the worldwide registration of the mark;

4. The extent of the worldwide use of the mark;

5. The commercial value attributed to the mark worldwide; and

6. The record of successful protection of the rights in the mark in other countries
and the outcome of cases dealing with the issue of whether the mark is a
wellknown mark in foreign countries.

Applying the foregoing criteria, the Philippine Supreme Court, in the case of Sehwani
v. In-N-Out Burger6 took account of the “registrations in various countries around the world
and its comprehensive advertisements therein” in declaring the mark “In-N-Out Burger“ as a
well-known mark.

3.3.3 What is the relevant population in determining the knowledge, recognition or fame of
the mark, the general public at large or the relevant sector of public? Is recognition or
fame in a limited product market (“niche market”) sufficient?

As mentioned in our answer to Question 3.3.2 above, Subsection 123.1(e) of the IP

Code requires that there is recognition of the mark in the “relevant sector of the public”, as
opposed to the public at large. While our law and jurisprudence do not categorically define
what constitutes the “relevant sector of the public”, guidance may be found in Article 1708 of
the North American Free Trade Agreement, which interprets the foregoing phrase as “that
sector of the public that normally deals with the relevant goods or services”. In light of the
foregoing interpretation, recognition or fame in a limited product or “niche” market is one of
the considerations in determining whether a mark is a well-known mark under our local laws
and jurisprudence.

3.4. To be eligible for protection against dilution, is it required that the mark has been used in,
or that the mark has been registered or that an application for registration of the mark
has been filed in the country where protection is being sought?

To be protected against dilution, there is no requirement that the mark is registered or

that an application for the registration of the mark has been filed with the Intellectual Property
Office (IPO, for brevity). As discussed in our answer to Question 3.1, the Philippine Supreme
Court ruled in the Levi Strauss case7 that to be eligible for protection against dilution, there
has to be a finding that: (1) the trademark sought to be protected is famous and distinctive;
(2) the use by the junior user began after the prior user’s mark became famous; and (3) such
subsequent use defames prior user’s mark.

3.5. Are there any other criteria a mark must comply with to be eligible for protection against
dilution?

6 G.R. No. 171053, 15 October

2007.
7 10 Supra, at
note 4.

6
 Apart from the relevant provisions of the IP Code and the Trademark Regulations and
rulings of the Supreme Court above quoted or discussed, there are no other criteria a mark
must comply before it becomes eligible for protection against dilution.

3.6. Is eligibility for protection against dilution a matter of law or an issue of fact? Who bears
the burden of proof regarding the eligibility criteria? How does one prove that a mark
meets the eligibility criteria? Are sales and advertising figures sufficient or is survey
evidence required? Which evidential standard must this proof satisfy?

As above discussed, for a mark to be entitled for protection against dilution, the mark
must be declared by a competent authority in the Philippines as a well-known mark. The
right to claim protection may be made when the issue of its well-known status is raised in a
case filed with any of the “competent authorities“ in the Philippines as enumerated in Rule
100(c) of the Trademark Regulations.

If a party to a case asserts that his mark is a well-known mark, he must be able to
present proof of its well-known status, following the criteria set out in Rule 102 of the
Trademark Regulations as outlined in our answer to Question 3.1.

Sales and advertising figures or survey evidence would figure under letter (b) of Rule
102 of the Trademark Regulations as quoted in our answer to Question 3.1. Since the list is
not exclusive, ultimately, the question of whether the proof presented would suffice to qualify
a particular mark as a well-known mark would depend on the appreciation of the competent
authority that will examine the submitted proof. The determination of the status of a
wellknown mark is, therefore, an issue of fact. If the issue is presented before any of the
competent authorities under the auspices of the IPO (i.e., the Director General or the Director
of the Bureau of Legal Affairs), the well-known status of the mark is established by
substantial evidence.8

In the Sehwani case,9 the Philippine Supreme Court held that the question of whether
or not the trademark in question is considered “well-known” is factual in nature since it
involves the appreciation of evidence adduced before the IPO’s Bureau of Legal Affairs. It is
a settled rule in Philippine jurisprudence that the factual findings of quasi-judicial agencies,
like the IPO, which have acquired expertise since their jurisdiction is confined to specific
matters, are generally accorded not only respect, but, at times, even finality if such findings
are supported by substantial evidence.

On the other hand, in the event that the issue of well-known status is presented before
a regular court, the party asserting its well known status must be able to establish such status
by a preponderance of evidence.10

3.7. Is there any registry of eligible marks in your country? If so, what is the evidentiary value
of registration? Can it be challenged in litigation?

Currently, there is no registry of marks eligible for protection against dilution (i.e.,
registry of well-known marks) in the Philippines.

8 Rule 134, Section 5, Revised Rules on Evidence.

9 12 Supra, at
note 9.
10 13 Rule 134, Section 1, Revised Rules on
Evidence.

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 However, under the regime of the old trademark law (i.e., Republic Act No. 166, wich
is the predecessor of the current IP Code) and pursuant to our commitments under the Paris
Convention with respect to protection of well-known marks, on 20 November 1980, then
Minister of Trade and Industry Luis Villafuerte issued a Memorandum to the Director of the
then Philippine Patent Office (PPO, for brevity), the predecessor agency of the current IPO.
Said memorandum is more popularly known as the “Villafuerte Memorandum“. The
Villafuerte Memorandum ordered the Director of PPO to reject “all pending applications for
Philippine registration of signature or other world-famous trademarks by applicants other than
its original owners or users”. It enumerated the following marks as well-known marks:

1. “LACOSTE”

2. “JORDACHE”;

3. “VANDERBILT”;

4. “SASSON”;

5. “FILA”;

6. “PIERRE CARDIN”;

7. “GUCCI”;

8. “CHRISTIAN DIOR”;

9. “OSCAR DE LA RENTA”;

10. “CALVIN KLEIN”;

11. “GIVENCHY”;

12. “RALPH LAUREN”;

13. “GEOFFREY BEENE”;

14. “LANVIN”; and

15. “TED LAPIDUS”.

The Villafuerte Memorandum also stated that any registration for the foregoing
wellknown marks that were previously issued by the PPO in favor of local registrants who
were not the true and legitimate owners thereof should be ordered by the PPO to surrender
the registration certificates.

Pursuant to Executive Order No. 913, series of 1983 (issued on 07 October 1983),
which strengthened, among others, the Minister of Trade and Industry’s rule-making and
adjudicatory powers in order to deliver effective solution to problems, such as infringement of
internationally-known marks, then Trade and Industry Minister Roberto Ongpin issued, on 25
October 1983, a Memorandum (known as the Ongpin Memorandum) outlining the guidelines
in determining whether a particular mark was entitled to protection accorded to a well-known
mark in the Philippines. Unlike the Villafuerte Memorandum, the Ongpin Memorandum did
not enumerate specific marks that were considered well-known. The Ongpin Memorandum

8
laid down the following criteria (any combination thereof) in determining whether a mark
enjoys a well-known status:

1. Declaration by the Trade and Industry Minister that the trademark is a

wellknown mark;

2. International use of the trademark;

3. Registration of trademark in other country(ies);

4. Possession of substantial goodwill and international consumer recognition;

and/or

5. Trademark actually belongs to a party claiming ownership and has right to

registration thereof under the provision of the Paris Convention.

The Ongpin Memorandum also ordered the PPO to “refuse all applications for, or
cancel the registration of, trademarks which constitute a reproduction, translation, or imitation
of a trademark owned by a person, natural or corporate, who is a citizen of a country
signatory to the Paris Convention”.

To date, no such list of well-known marks was further issued by the then PPO, the
IPO, or any competent authority in the Philippines. Efforts to establish a registry for
wellknown marks are being exerted by the private sector, led by AIPPI Philippine Group
members.

4. Does your law require the existence of a ‘mental association’ or ‘link’ between the earlier
trademark and the later trademark? If so, in which circumstances does a ‘mental
association’ or ‘link’ between the earlier trademark and the later trademark exist? Are
the factors mentioned in paragraph 27 and 28 above relevant for assessing the
existence of such a ‘mental association’ or ‘link’? Are there other factors to take into
account? Is the assessment of a link a question of fact (so something that can be
established by market surveys), or is it a question of law to be established by the
courts or authorities on the basis of such factors?

As a general rule, the law does not require that there must be a “mental association“
or “link“ between the earlier well-known mark and the later mark, as long as the later mark is
used on goods and/or services that are identical with or similar to the goods and/or services
of the well-known mark. The requirement of “mental association“ between two marks would
come into play if the owner of the earlier well-known mark, which is registered in the
Philippines, is claiming protection against dilution caused by a later mark being used in goods
and/or services not similar to the goods and/or services of the well-known mark. Subsection
147.2 of the IP Code provides that the use of the later mark in relation to goods or services
would indicate a connection between the goods or services and the owner of the registered
well-known mark.

Our IP Code, adopting the relevant provisions of the TRIPS Agreement, provides for a
different scope of protection to well-known marks depending on whether the mark is
registered in the Philippines or not. If the well-known mark is registered in the
Philippines, the protection extends even to dissimilar goods or services, provided that such
goods or services using the later mark would indicate a connection between those goods or
services and the owner of the registered well-known mark. However, if the well-known mark

9
is not registered in the Philippines, the protection only extends to identical or similar goods
or services.

Philippine jurisprudence regarding “mental association“ or “link“ is usually taken in

connection with confusing similarity. In the Ang case (discussed in our answer to Question 2
above), the Supreme Court held that the use of the same mark on non-competing goods
would cause the whittling away of the identity of the mark upon the public mind. Meanwhile,
in the case of McDonald’s Corporation v. MacJoy Fastfood Corporation,11 the Supreme Court
held that similarities in the dominant features of the marks will make ordinary purchasers
conclude an association or relation between the marks.

The factors mentioned in paragraphs 27 and 28 of the Working Guidelines are

relevant. These factors are usually considered to determine the marks’ confusing similarities.
The assessment of “mental association“ or “link“ is a question of fact which must be proven
by relevant evidence.

5. Does such ‘mental association’ or ‘link’ between the earlier trademark and the later
trademark automatically result in detriment to the earlier trademark‘s repute or
distinctive character? Or does detriment have to be proved over and above the
existence of a ‘mental association’ or ‘link’?

Detriment to a well-known mark’s reputation is presumed in instances where the later

mark is used on goods and/or services that are identical with or similar to the goods and/or
services of the well-known mark. However, in the case of a registered well-known mark
where the later mark is used on dissimilar goods and/or services, detriment or damage to the
reputation of the well-known mark is not automatically presumed and must be independently
proven, as provided for in Subsection 147.2 of the IP Code.

6. Are the same factors taken into consideration to assess the existence of detriment as
those already discussed for the link? Are there additional ones?

Philippine jurisprudence has not categorically provided for factors regarding the
assessment of such detriment; petitioner must show proof that he will “likely be damaged“ by
the use of the later mark in dissimilar goods and/or services.

7. Must actual dilution be proved or is a showing of likelihood of dilution sufficient?

Whose burden of proof is it? How does one prove dilution or likelihood of dilution?
Does detriment require evidence of a change in the economic behaviour of the
average consumer or that such change in behaviour is likely? If so, what is a change
in the economic behaviour of the average consumer? Is reduced willingness to buy
goods sold under the earlier mark a change in the economic behaviour? How do you
prove a change in the economic behaviour of the average consumer or likelihood of
such change in behaviour?

Our local laws and regulations are silent on this matter. However, based on the
Supreme Court ruling in the Levi Strauss case,12 it appears that actual dilution must be shown

11 G.R. No. 166115, 02 February

2007.
12 Supra, at note
4.

10
before a mark becomes eligible for protection against dilution. In said case, while there was
no categorical ruling on the arguments put forward by the owner of the well-known mark that
he need not wait until the mark loses its distinctiveness to obtain injunctive relief and that
damage to the trademark owner is not necessary, the Supreme Court held that for a mark to
be protected from dilution, the following elements (discussed in our answer to Question 3.1
above) must be established by the trademark owner seeking such protection: (1) the mark
sought to be protected is famous and distinctive; (2) the use of the later trademark began
after the earlier trademark became famous; and (3) such subsequent use defames the earlier
trademark. In proving dilution, the Supreme Court explained that competition between the
owner of the well-known mark and the owner of the later mark, and likelihood of confusion,
mistake or deception, are immaterial and hence, may not be sufficient to prove dilution.

Philippine courts have not had the opportunity to refer to change in the economic behavior of
the average consumer, or even the likelihood of such change, in its discussion on dilution of
trademarks. Neither do Philippine laws require a change in the economic behavior of the
average consumer to confirm the dilution of a mark.

8. What is the extent of protection afforded to marks which are eligible for dilution
protection? May the owner of the earlier trademark object

• to the registration of a later trademark?

• to the actual use of a later trademark?
• in respect of dissimilar goods only or also in respect of similar goods?

The owner of the earlier well-known trademark may object to the registration of a later
trademark by filing an opposition to the registration thereof. Said owner may also object to
the actual use of a later trademark by seeking injunctive relief or by filing an infringement or
unfair competition case.

Subsection 147.2 of the IP Code provides that the exclusive right of the owner of a well-
known mark which is registered in the Philippines, shall extend to goods and services which
are not similar to those in respect of which the mark is registered, provided that use of that
mark in relation to those goods or services would indicate a connection between those goods
or services and the owner of the registered mark, and that the interests of the owner of the
registered mark are likely to be damaged by such use.

9. What are the legal remedies? May the owner of the earlier trademark file an
opposition and/or a cancellation action? May he ask for injunctive relief or preliminary
injunctive relief? Does your trademark office refuse the registration of a later
trademark on grounds of likelihood of dilution?

Opposition

While the IP Code does not expressly provide for legal remedies against dilution of
trademarks, based on Section 147.2 of the IP Code, the owner of a well-known earlier mark
may file an opposition to the application for registration of the later mark, on the ground that
he will be damaged by the registration of the said later mark. To illustrate, in the case of
McDonald’s Corporation v. MacJoy Fastfood Corporation, 13 therein owner of the registered
mark filed an opposition to the application for registration of the later mark “MACJOY &
DEVICE,” alleging that the use and adoption thereof in bad faith would falsely tend to suggest
13 Supra, at note
14.

11
a connection or affiliation with the well-known mark used on restaurant services and food
products, thus, constituting a fraud upon the general public and further cause the dilution of
the distinctiveness of the registered and internationally recognized “MCDONALD’S“ marks to
its prejudice and irreparable damage.

Injunctive Relief

In the case of Levi Strauss case,14 on the other hand, it was held that a preliminary injunction
will not be issued for the protection of trademarks against dilution unless its issuance is
warranted under Section 3, Rule 58 of the Rules of Court, i.e., there must exist an actual right
and a clear showing by the complainant of the existence of a right that must be protected and
that the acts against which the writ is to be directed are violative of said right. An urgent and
permanent necessity for the injunctive writ to prevent serious damage must likewise be
shown. Hence, there must be a finding that: (1) the mark sought to be protected is famous
and distinctive; (2) the use of the later trademark began after the earlier trademark became
famous or well-known; and (3) such subsequent use defames the earlier trademark.15

Refusal of Registration

Under Subsection 123.1 of the IP Code, a mark which is identical or similar to a wellknown
registered or unregistered mark cannot be registered if it is used for identical or similar goods
or services.16 Moreover, a mark which is identical or similar to a well-known registered mark
cannot be registered even with respect to goods or services which are not similar, provided
that use of the mark in relation to those goods or services would indicate a connection
between those goods or services, and the owner of the registered mark, and that the
interests of the owner of the registered mark are likely to be damaged by such use.17

II. Proposals for adoption of uniform rules

The Groups are invited to put forward proposals for adoption of uniform rules with a view to
protecting trademarks against dilution. More specifically, the Groups are invited to answer
the following questions:

1. Which trademarks should be eligible for protection against dilution? What should the
eligibility criteria be? Should recognition or fame in a limited product market (“niche
market”) be sufficient?

Marks that have been determined to be of well-known status must be eligible for
protection against dilution. The criteria which are currently outlined in Rule 102 of the
Trademark Regulations (discussed in our answer to Question 3.1 above) appear to be a
sufficient guideline in determining whether a mark has the status of a well-known mark, thus
eligible for protection against dilution. It is proposed that the standard of recognition in a
limited product market (or “niche market”) – which is currently being adopted by our local
laws and jurisprudence – be maintained since notoriety in the general public or the public at
large would unduly restrict the application of the protection against trademark dilution.

14 17 Supra, at
note 1.
15 18 As held in the Levi Strauss case, supra at
note 4.
16 Subsection 123.1(e), IP Code; vide note
2.
17 20 Subsection 123.1(f), IP
Code.

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2. Should it be a criteria for being eligible for dilution protection that the mark has been
used in, or that the mark has been registered or that an application for registration of
the mark has been filed in the country?

It is proposed that a well-known mark be eligible for dilution protection regardless of

whether the mark is registered or covered by a pending application in the relevant country.
Moreover, the requirement of actual commercial usage of the mark in the relevant country
(i.e., actual sales and distribution of goods and actual rendering of services) should be
dispensed with. These proposals are in view of the advent of a shrinking global economy
and the developments in the fields of information and communications technology, which
made possible the widespread promotion and dissemination of information on, among others,
products and services worldwide, regardless of whether the product is actually sold or the
service is actually offered in a particular jurisdiction. Nowadays, a brand of a particular
product or service can gain widespread recognition and notoriety in a country even if such
product or service is not actually sold or offered in the market.

3. Should there be a registry of eligible marks? If so, what should the evidentiary value
of registration be? Should it be possible to challenge it in litigation?

There should be a registry of well-known marks. This would address the issue of
uncertain and subjective determination by competent authorities as to whether a particular
mark has attained a well-known status. The registration issued to a well-known mark by the
registry of well-known marks is proposed to be a prima facie evidence of the well-known
status thereof and its eligibility to claim protection against dilution, and such registration can
be assailed on the ground that it was fraudulently secured (e.g., evidence submitted to
support the application for well-known status is fabricated, etc.).

4. Should the existence of a ‘mental association’ or ‘link’ between the earlier trademark
and the later trademark be an independent requirement for a trademark dilution
claim?

The existence of “mental association” or “link” should be an independent requirement

only in instances where the later mark is used on dissimilar goods or services. In cases
where the later mark is used on identical or similar goods or services, the owner of the
wellknown mark need not independently prove the existence of “mental association” or “link”.

5. Should detriment to the distinctive character or reputation of the earlier mark require
evidence of a change in the economic behaviour of the average consumer or that
such change in behaviour is likely?

No. The imposition of this requirement would unduly restrict the application of dilution
protection to well-known marks.

6. What should the remedies be for dilution of a mark?

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 It is proposed that the following legal remedies which are available for infringement
and unfair competition be also extended to cases involving dilution of well-known marks:

1. Opposition against the application for the registration of the later mark;

2. Cancellation against the registration of the later mark;

3. Injunctive relief; and

4. Unfair competition case.

Summary of the Philippine Group Report to Question 214

The developments in information and communications technology has resulted in innovative

ways of product and service marketing, distribution, and delivery. The ease of transborder
flow of information, products, and services has created a shrinking global market. As a
result, product manufacturers and service providers are becoming more competitive and
protective over their products and services. Owners of well-known trademarks are becoming
more zealous in protecting the reputation and goodwill of their products and services against
dilution. A clear, adequate, and uniform legal framework is needed in order to protect
wellknown marks against dilution. Such framework must take into account the current
economic and social environment, cognizant that old or existing legal structures may not be
sufficient to protect the interests of owners of well-known marks. It is proposed that a registry
of wellknown marks be established to address the uncertain determination whether a mark
has attained a well-known status. Thereafter, the criteria for determining eligibility for
protection against dilution should be reasonable so as not to unduly restrict its application.
Moreover, a well-known mark should be eligible for dilution protection regardless of whether
the same is registered or not.

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