Coffee Partners, Inc. vs. San Francisco Coffee and Roastery, Inc. G.R. No. 169504, March 3, 2010

Facts:

The petitioner holds a business in maintaining coffee shops in the Philippines. It is registered with the Securities and Exchange Commission in January 2001. In its franchise agreement with Coffee Partners Ltd, it carries the trademark “San Francisco Coffee.” Respondent is engaged in the wholesale and retail sale of coffee that was registered in SEC in May 1995 under a registered business name of “San Francisco Coffee &Roastery, Inc.” It entered into a joint venture with Boyd Coffee USA to study coffee carts in malls.

When respondent learned that petitioner will open a coffee shop in Libis, Q.C. they sent a letter to the petitioner demanding them to stop using the name “San Francisco Coffee” as it causes confusion to the minds of the public. A complaint was also filed by respondents before the Bureau of Legal Affairs of the Intellectual Property Office for infringement and unfair competition with claims for damages. Petitioners contend that there are distinct differences in the appearance of their trademark and that respondent abandoned the use of their trademark when it joined venture with Boyd Coffee USA. The Bureau of Legal Affairs of the IPO held that petitioner’s trademark infringed on the respondent’s trade name as it registered its business name first with the DTI in 1995 while petitioner only registered its trademark in 2001. 

Furthermore, it ruled that the respondent did not abandon the use of its trade name upon its joint venture with Boyd Coffee USA since in order for abandonment to exist it must be permanent, intentional and voluntary. It also held that petitioner’s use of the trademark "SAN FRANCISCO COFFEE" will likely cause confusion because of the exact similarity in sound, spelling, pronunciation, and commercial impression of the words "SAN FRANCISCO" which is the dominant portion of respondent’s trade name and petitioner’s trademark. Upon appeal before the office of the Director General of the IPO, the decision of its legal affairs was reversed declaring there was no infringement. The Court of Appeals however set aside its decision and reinstated the IPO legal affairs’ decision. Petitioner contends that the respondent’s trade name is not registered therefore a suit for infringement is not available.

Issue:

Whether or not the petitioner’s use of the trademark "SAN FRANCISCO COFFEE" constitutes infringement of respondent’s trade name "SAN FRANCISCO COFFEE & ROASTERY, INC.," even if the trade name is not registered with the Intellectual Property Office (IPO).

Ruling:

Registration of a trademark before the IPO is no longer a requirement to file an action for infringement as provided in Section 165.2 of RA 8293. All that is required is that the trade name is previously used in trade or commerce in the Philippines. There is no showing that respondent abandoned the use of its trade name as it continues to embark to conduct research on retailing coffee, import and sell coffee machines as among the services for which the use of the business name has been registered.

The court also laid down two tests to determine similarity and likelihood of confusion. The dominancy test focuses on similarity of the prevalent features of the trademarks that could cause deception and confusion that constitutes infringement. Exact duplication or imitation is not required. The question is whether the use of the marks involved is likely to cause confusion or mistake in the mind of the public or to deceive consumers. the holistic test entails a consideration of the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity.¹⁵ The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing on both marks in order that the observer may draw his conclusion whether one is confusingly similar to the other. Applying either the dominancy test or the holistic test, petitioner’s "SAN FRANCISCO COFFEE" trademark is a clear infringement of respondent’s "SAN FRANCISCO COFFEE & ROASTERY, INC." trade name. The descriptive words "SAN FRANCISCO COFFEE" are precisely the dominant features of respondent’s trade name. And because both are involved in coffee business there is always the high chance that the public will get confused of the source of the coffee sold by the petitioner. Respondent has acquired an exclusive right to the use of the trade name "SAN FRANCISCO COFFEE & ROASTERY, INC." since the registration of the business name with the DTI in 1995.