Canon Kabushiki Kaisha vs. Court of Appeals

A certificate of trademark registration confers upon the owner the exclusive right to use the mark only on those goods specified in the certificate, subject to any conditions and limitations stated therein. An opposition to the registration of an identical mark for a wholly dissimilar product cannot be sustained on the ground of likelihood of confusion or of forestalling the normal expansion of the opposer’s business when the opposer has neither a registration covering that product nor evidence of actual use or a concrete intent to expand into that line. Article 8 of the Paris Convention does not automatically preclude the local registration of a foreign corporation’s tradename as a trademark for goods that are not similar to those in which the foreign corporation deals.

On January 15, 1985, NSR Rubber Corporation filed an application with the Bureau of Patents, Trademarks, and Technology Transfer to register the mark CANON for sandals. Canon Kabushiki Kaisha, a corporation organized under Japanese law, opposed the application, claiming it would be damaged by the registration. Canon’s trademark CANON was registered in the Philippines and in several other countries for goods belonging to Class 2—paints, chemical products, toner, and dyestuff. The opposition rested both on Canon’s trademark rights and on the claim that CANON formed part of its corporate tradename, which it used globally on a wide array of goods, allegedly including footwear.

• The Application and Opposition: NSR Rubber Corporation, a domestic entity, sought to register the mark CANON for sandals (Class 25). Canon Kabushiki Kaisha, a Japanese corporation, opposed, asserting ownership of the identical mark used on a variety of goods globally and locally. NSR Rubber Corporation was subsequently declared in default, and Canon presented its evidence ex-parte.
• Canon’s Evidence of Trademark Registration: Canon introduced certificates of registration for CANON from various countries and its Philippine Trademark Registration No. 39398—all covering goods in Class 2, specifically paints, chemical products, toner, and dyestuff. No certificate of registration or other documentary proof was presented to show that Canon’s registrations covered sandals or any other kind of footwear.
• Canon’s Claim of Diversified Use and Business Expansion: Canon contended that its trademark CANON had been used on a wide range of products worldwide, including footwear, shoe polisher, and polishing agents. It argued that allowing NSR Rubber Corporation to register the same mark for sandals would prevent Canon from undertaking a normal expansion of its business into that product line and would create a likelihood of confusion of goods, business, or origin.
• The BPTTT and Court of Appeals Findings: The BPTTT dismissed the opposition on the ground that the products were unrelated, noting that Canon’s goods were sold through special chemical stores while sandals were sold in grocery and department stores. The Court of Appeals affirmed, adding that Canon’s Trademark Principal Register did not list sandals and that there was no showing of any intent to venture into sandal production; its listed products included chemical products, dyestuffs, pigments, toner developing preparation, shoe polisher, and polishing agent.

• Exclusive Right and Prior Use on Footwear: Petitioner maintained that it held the exclusive right to the mark CANON because it was its trademark and had been earlier used worldwide on a diverse range of goods, including footwear. It argued that such prior use should preclude private respondent from registering the identical mark for sandals.
• Forestalling Normal Business Expansion: Petitioner contended that permitting registration would prevent it from using CANON for various kinds of footwear, contrary to the principle that a trademark owner is protected against uses that impede the normal expansion of its business.
• Likelihood of Confusion: Petitioner argued that the diversity of its products and its global presence made it plausible that the public would be misled into believing that private respondent’s sandals were connected with petitioner, resulting in confusion of goods and confusion of business. It invoked Sta. Ana v. Maliwat, Ang v. Teodoro, and Converse Rubber Corporation v. Universal Rubber Products, Inc.
• Protection of Tradename under Article 8 of the Paris Convention: Petitioner asserted that CANON constituted part of its corporate name and tradename, which was entitled to protection under Article 8 of the Paris Convention without any requirement of similarity of goods. It argued that the BPTTT and the Court of Appeals erred in applying the Ongpin Memorandum—which implements Article 6bis concerning well-known trademarks—because Article 8 dealing with tradenames does not impose a similarity-of-goods condition. Petitioner insisted that the appropriate directive was the Villafuerte Memorandum directing the rejection of applications for world-famous trademarks by non-owners.

• Scope of Trademark Protection: Whether Canon’s exclusive right over the trademark CANON for Class 2 goods (paints, chemicals, toner, dyestuff) extended to bar NSR Rubber Corporation’s registration of the identical mark for sandals (Class 25).
• Normal Expansion of Business Doctrine: Whether NSR Rubber Corporation’s application should have been rejected on the ground that it would forestall the normal expansion of Canon’s business into footwear, despite the absence of evidence that Canon actually produced or intended to produce sandals.
• Likelihood of Confusion: Whether the use of CANON on paints, chemical products, toner, and dyestuff, on one hand, and on sandals, on the other, was likely to cause confusion of goods or confusion of business or origin.
• Tradename Protection under the Paris Convention: Whether Article 8 of the Paris Convention automatically protected Canon’s tradename “Canon” such that NSR Rubber Corporation could not register it as a trademark for sandals, irrespective of the dissimilarity of goods and without Canon having to satisfy the well-known mark and similarity-of-goods requirements of Article 6bis.

• Scope of Trademark Protection: The exclusive right conferred by a certificate of registration is strictly confined to the goods specified therein. Canon’s registrations covered only Class 2 products, not sandals. A trademark owner cannot validly object to the use of the same mark on a product in which it does not deal. Accordingly, the registration of CANON for sandals was properly allowed.
• Normal Expansion of Business Doctrine: The opposition could not be sustained on the ground of forestalling normal business expansion. Canon presented no evidence that it had actually ventured into the production of sandals or had any concrete intention to do so. Its Trademark Principal Register listed goods such as chemical products, dyestuffs, pigments, toner, shoe polisher, and polishing agents. To assert that the production of sandals was a natural or normal expansion of those operations strained credibility. The ruling in Faberge, Incorporated v. Intermediate Appellate Court—that a senior user who had not listed briefs in its registration could not claim that a junior user invaded its exclusive domain—was applied.
• Likelihood of Confusion: No likelihood of confusion of goods or business was present. The goods were entirely unrelated: paints, chemicals, toner, and dyestuff are physically and functionally distinct from sandals. They belong to different classes, possess different descriptive properties, and are sold through different channels of trade—Canon’s products through special chemical stores, private respondent’s sandals through grocery stores, sari-sari stores, and department stores. The disparity rendered unfounded any apprehension of confusion, consistent with Esso Standard Eastern, Inc. v. Court of Appeals. The cases cited by petitioner were inapplicable because they involved goods that were confusingly similar or identical.
• Tradename Protection under the Paris Convention: Article 8 of the Paris Convention does not automatically confer protection upon a tradename so as to bar the local registration of an identical mark as a trademark for dissimilar goods. The controlling doctrine established in Kabushiki Kaisha Isetan v. Intermediate Appellate Court held that the Convention does not automatically exclude all signatory countries from using a tradename that happens to be used in one country. The factual distinction that petitioner Isetan had not conducted business in the Philippines did not alter this legal principle. The BPTTT correctly applied the Ongpin Memorandum implementing Article 6bis, which requires, among other conditions, that the mark be for use in the same or similar kinds of goods. Because Canon’s mark was used only for Class 2 products, it failed to satisfy this requirement, and its claim under the Paris Convention was properly rejected.

• Exclusive Right Limited to Goods Specified in Certificate — A certificate of trademark registration is prima facie evidence of the registrant’s ownership and exclusive right to use the mark only in connection with the goods, business, or services specified in the certificate, subject to any conditions and limitations stated therein. A trademark owner cannot validly object to the use of the same mark by another on a product in which the owner does not deal. Applied: Canon’s registrations covered only Class 2 goods; its exclusive right did not extend to sandals.
• Test for Relatedness of Goods — Goods are related (and thus capable of causing confusion) when they belong to the same class or share the same descriptive properties; possess the same physical attributes or essential characteristics in form, composition, texture, or quality; serve the same purpose; or are sold through the same retail outlets. Goods that move along different channels of trade are strongly indicative of dissimilarity. Applied: Paints, chemicals, toner, and dyestuff sold in specialized chemical stores were held unrelated to sandals sold in grocery and department stores.
• Normal Expansion of Business — Evidentiary Requirement — To invoke the “normal expansion” doctrine against a junior user, the senior user must present evidence of actual use of the mark on the conflicting goods or a concrete intention to expand into that specific line. Bare assertions are insufficient. Applied: Canon’s failure to present any evidence of actual or intended production of sandals was fatal.
• Paris Convention, Article 8 — No Automatic Tradename Protection — Article 8 of the Paris Convention, which mandates protection of tradenames without the obligation of filing or registration, does not automatically preclude the registration of an identical mark as a trademark by a local entity. The guidelines in the Ongpin Memorandum implementing Article 6bis apply, requiring, among others, that the mark be used for the same or similar kinds of goods. A foreign corporation’s tradename does not enjoy blanket protection that dispenses with the similarity-of-goods requirement. Applied: Canon’s argument that Article 8 granted automatic protection irrespective of dissimilarity of goods was rejected.

• “Ordinarily, the ownership of a trademark or tradename is a property right that the owner is entitled to protect as mandated by the Trademark Law. However, 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.”
• “The certificate of registration confers upon the trademark owner the exclusive right to use its own symbol only to those goods specified in the certificate, subject to the conditions and limitations stated therein.”
• “The products of each party move along and are disposed through different channels of distribution. … Evidently, in kind and nature the products of respondent and of petitioner are poles apart.” — applying the Esso doctrine.
• “The Paris Convention for the Protection of Industrial Property does not automatically exclude all countries of the world which have signed it from using a tradename which happens to be used in one country.” — from Kabushiki Kaisha Isetan v. Intermediate Appellate Court, which the Court affirmed as the controlling principle on Article 8.

• Esso Standard Eastern, Inc. v. Court of Appeals, 116 SCRA 336 (1982) — Followed. Established that unrelated products moving through different trade channels do not create a likelihood of confusion; applied to hold that paints and chemicals are poles apart from sandals.
• Faberge, Incorporated v. Intermediate Appellate Court, 215 SCRA 326 (1992) — Followed. Held that the exclusive right to a mark is limited to the goods specified in the certificate and that a senior user who has not ventured into the product line cannot claim invasion of its exclusive domain; applied to reject Canon’s normal expansion argument.
• Kabushiki Kaisha Isetan v. Intermediate Appellate Court, 203 SCRA 583 (1991) — Controlling. Ruled that Article 8 of the Paris Convention does not automatically exclude signatory countries from using a tradename that happens to be used in one country; applied to deny Canon’s claim of automatic tradename protection.
• Sta. Ana v. Maliwat, 24 SCRA 1018 (1968); Ang v. Teodoro, 74 Phil. 50 (1942); Converse Rubber Corporation v. Universal Rubber Products, Inc., 147 SCRA 154 (1987) — Distinguished. These cases involved confusingly similar or identical goods, unlike the wholly unrelated products in the present case.

• Section 20, Republic Act No. 166 (Trademark Law) — Provides that a certificate of registration is prima facie evidence of the registrant’s ownership and exclusive right to use the mark in connection with the goods specified in the certificate, subject to any conditions and limitations stated therein. Applied to limit Canon’s exclusive right to Class 2 goods.
• Section 38, Republic Act No. 166 — Defines “trademark” and “tradename.” Used to distinguish the two concepts: a trademark identifies goods; a tradename identifies the business and its goodwill.
• Articles 6bis and 8, Paris Convention for the Protection of Industrial Property — Article 6bis obliges member countries to refuse or cancel registration of a well-known mark used for identical or similar goods. Article 8 provides that tradenames shall be protected without the obligation of filing or registration. The Court applied Article 6bis via the Ongpin Memorandum and held that Article 8 did not grant automatic protection that overrides the similarity-of-goods requirement.
• Ongpin Memorandum (25 October 1983) — Issued by the Minister of Trade and Industry, setting guidelines for implementing Article 6bis: the mark must be internationally known; the subject must be a trademark; the mark must be for use in the same or similar class of goods; and the person claiming must be the owner. Canon failed to satisfy the third requirement.

Melo (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.