Del Monte Corporation vs. Court of Appeals

A trademark registered only in the Supplemental Register does not confer an exclusive right of use and cannot support an action for infringement, but its deliberate use to trade on another’s goodwill may still constitute unfair competition if accompanied by fraudulent intent. Infringement of a label must be assessed by the general impression of the causal, hurried purchaser — applying the mark as a whole and considering factors such as the cost and nature of the goods — not by side‑by‑side dissection.

Del Monte Corporation, a United States corporation not doing business in the Philippines, owned the trademarks “DEL MONTE” and its logo, both registered in the Principal Register in 1972. It also held Certificate of Trademark Registration No. SR-913 under the Supplemental Register for the configuration of its catsup bottle. Philippine Packing Corporation (Philpack), a domestic corporation, was granted by Del Monte the right to manufacture, distribute, and sell catsup and other products under the Del Monte mark and logo. Both the Philippines and the United States were signatories to the Paris Convention, entitling Del Monte to the same rights and advantages as Philippine nationals for the repression of infringement and unfair competition. Sunshine Sauce Manufacturing Industries later entered the market with its own “Sunshine Fruit Catsup,” packaged in a label that the petitioners claimed was confusingly similar to theirs, and it filled its product into recycled Del Monte bottles obtained from junk shops.

The Parties and Their Trademarks: Petitioner Del Monte Corporation is a US‑based company, not doing business in the Philippines. Petitioner Philpack is a domestic corporation that, since 11 April 1969, held a license from Del Monte to manufacture, distribute, and sell catsup and other agricultural products under the “DEL MONTE” trademark and logo. On 27 October 1965, Del Monte authorized Philpack to register the Del Monte catsup bottle configuration with the Philippine Patent Office; registration was granted under Certificate of Trademark Registration No. SR-913 in the Supplemental Register. On 20 November 1972, Del Monte obtained two registration certificates in the Principal Register for its word mark “DEL MONTE” and for its logo.

Sunshine’s Entry and Registration: Respondent Sunshine Sauce Manufacturing Industries received a Certificate of Registration from the Bureau of Domestic Trade on 17 April 1980 to manufacture and sell various sauces under the logo “Sunshine Fruit Catsup.” That logo was registered in the Supplemental Register on 20 September 1983 under Certificate No. SR-6310. For its product, Sunshine used different bottles, including empty Del Monte bottles purchased from junk shops, which bore the embossed caution “Del Monte Corporation, Not to be Refilled.”

Warning and Complaint: Having received reports that Sunshine was using its exclusively designed bottles and a logo confusingly similar to Del Monte’s, Philpack sent a warning letter demanding desistance. Claiming the demand was ignored, Del Monte and Philpack filed a complaint for infringement of trademark and unfair competition with damages and a prayer for preliminary injunction. Sunshine answered that it had long ceased using the Del Monte bottle and that its logo was substantially different and would not confuse the buying public.

Lower Court Findings: The trial court dismissed the complaint, finding: (a) substantial differences between the parties’ logos upon side‑by‑side comparison, such as differences in shape, color, lettering, and the presence of specific manufacturer names; (b) that the defendant had ceased using the petitioners’ bottles and became the owner thereof by purchase from junk yards; and (c) that malice or bad faith, an essential element of unfair competition, had not been established. The Court of Appeals affirmed in toto, citing the test that requires both marks in their entirety to be considered in relation to the goods, but applying a detailed dissection of the labels.

• Colorable Imitation and Confusing Similarity: Petitioners argued that Sunshine’s label was a colorable imitation of the Del Monte trademark, employing the same predominant colors (green and red‑orange) and the same white lettering style for the word “catsup,” while presenting a figure that approximated a tomato. The field of available choices was so broad that Sunshine’s selection of similar elements could only be explained as a deliberate attempt to deceive.
• Unfair Competition through Use of Bottles: Petitioners maintained that Sunshine’s continued use of Del Monte bottles, despite the embossed warning and the availability of other containers, constituted unfair competition because it capitalized on Del Monte’s goodwill and passed off its own product as that of Del Monte.
• Improper Test for Infringement: Petitioners contended that the lower courts erred in applying a painstaking side‑by‑side comparison instead of the holistic test based on the general impression of the ordinary hurried purchaser.
• Distinction from the Shell Case: Petitioners asserted that the Court of Appeals’ reliance on Shell Co. v. Insular Petroleum was misplaced because, unlike in Shell, Sunshine made no effort to obliterate the identifying marks on the bottles, used multiple bottles, and sold directly to ultimate consumers rather than dealers.

• No Confusing Similarity: Respondent countered that its logo was entirely different in shape, used different color combinations, bore distinct lettering and manufacturer information, and would not deceive the ordinary buyer. The lower courts correctly found substantial differences after a detailed inspection.
• Ownership and Cessation of Use: Respondent argued it had long ceased using the Del Monte bottles after purchasing them from junk shops, and that in any event it had become the owner of those bottles and had the right to reuse them.
• Absence of Bad Faith: Respondent maintained that malice or bad faith, an essential element of unfair competition, was not proven. The registration of its own label with the Bureau of Patents was invoked as proof that the trademark authority had presumably examined existing marks and found no conflict, negating any fraudulent intent.
• Applicability of Shell Co. Precedent: Respondent relied on Shell Co. v. Insular Petroleum, where the Supreme Court held that selling oil in containers of another with the original marks erased, in the absence of intent to deceive, was not unfair competition.

• Confusing Similarity of Labels: Whether the private respondent’s label constituted a colorable imitation of the petitioners’ registered trademark, thus entitling petitioners to relief for infringement under Section 22 of Republic Act No. 166.
• Use of Bottle Configuration Registered in the Supplemental Register: Whether the private respondent’s use of Del Monte bottles, whose configuration was registered only in the Supplemental Register, amounted to trademark infringement.
• Unfair Competition: Whether the private respondent’s acts — using a similar label and especially employing the petitioners’ distinctive bottles without obliterating the embossed marks — constituted unfair competition under Section 29 of the Trademark Law, requiring a showing of fraudulent intent.
• Damages: Whether the petitioners were entitled to damages and, if so, the proper measure.

• Confusing Similarity of Labels: Infringement was established. The lower courts’ side‑by‑side dissection was legally erroneous; the proper test is the general impression created upon the casual, unsuspecting purchaser who normally buys in haste, relying on recollection rather than detailed scrutiny. Considering the low‑cost nature of catsup, the hurried conditions of purchase, and the holistic similarity — the same predominant colors (green and red‑orange), identical white lettering style for “catsup,” and a label figure approximating a tomato — the Sunshine label was a colorable imitation likely to cause confusion. Sunshine had an almost boundless field of choices and yet deliberately adopted elements used by Del Monte, raising the inference of a design to deceive. As between the established mark and the newcomer, doubt is resolved against the latter.
• Use of Bottle Configuration Registered in the Supplemental Register: No trademark infringement occurred. Applying Lorenzana v. Macagba, a registration in the Supplemental Register is merely proof of actual use and notice of appropriation; it does not create a presumption of validity, ownership, or exclusive right, and cannot serve as a basis for an infringement action. Because the Del Monte bottle configuration was registered solely in the Supplemental Register, the petitioners could not claim exclusive use and thus no infringement of that registered mark arose from the reuse of the bottles.
• Unfair Competition: Unfair competition was committed. Even though the bottle configuration could not support an infringement claim, Sunshine’s deliberate and sustained use of multiple Del Monte bottles — retaining the embossed “Not to be Refilled” warning — demonstrated fraudulent intent to pass off its catsup as that of Del Monte and to trade on the latter’s reputation and goodwill. The Shell Co. case was inapplicable because there the defendant had obliterated the original marks on almost all containers and only a single isolated transaction was involved, with sales made to experienced dealers rather than unwary final consumers. Here, Sunshine sold directly to ordinary purchasers and made no effort to erase the embossed identifier, thereby deceiving the public to the petitioners’ detriment.
• Damages: Actual damages were not awarded because the petitioners failed to adduce evidence of the amount of lost profits or of the defendant’s gains. Nevertheless, a property right had been invaded, entitling petitioners to nominal damages of ₱1,000 under Article 2222 of the Civil Code.

• Test for Confusing Similarity in Trademark Infringement — The marks must be considered as a whole as they appear in the labels; the ordinary purchaser’s general impression from a casual glance, not side‑by‑side comparative dissection, governs. The court must be guided by its first impression and account for the nature and cost of the goods, the conditions of purchase, and the fact that the buyer usually depends on memory. For inexpensive, mass‑market products like catsup, the buyer exercises less care, and confusing similarity will be found if the total effect induces the belief that the goods emanate from the same source.
• Distinction between Principal and Supplemental Registers — Registration in the Principal Register creates a presumption of validity, ownership, and the exclusive right to use the mark, and serves as a basis for an infringement action. Registration in the Supplemental Register only proves actual use and gives notice that the registrant has adopted the mark; it does not vest an exclusive right and cannot ground an action for infringement (citing Lorenzana v. Macagba, 154 SCRA 723).
• Infringement versus Unfair Competition — Infringement is the unauthorized use of a registered trademark; fraudulent intent is unnecessary. Unfair competition is the passing off of one’s goods as those of another; fraudulent intent is essential. Prior registration is required only for infringement, not for unfair competition.
• Colorable Imitation and the Newcomer Rule — A newcomer who adopts a mark similar to a well‑known one, when an almost unlimited array of alternative words, phrases, colors, and symbols is available, is presumed to have acted with a design to deceive. In cases of doubt, the balance is resolved against the newcomer because it had everything to gain by confusion, while the established party had nothing to lose.
• Unfair Competition via Use of Another’s Distinctive Container — Deliberately using a competitor’s identified containers without obliterating distinguishing marks, and with intent to capitalize on the competitor’s goodwill, constitutes unfair competition. The controlling perspective is that of the ultimate consumer, who is more readily deceived than an experienced dealer. The fact that the container design is not a registered trademark on the Principal Register does not legitimize the passing‑off scheme if fraud is present.

• “The most successful form of copying is to employ enough points of similarity to confuse the public with enough points of difference to confuse the courts.” — This passage crystallizes the rationale for eschewing a minute label dissection and instead applying the holistic, first‑impression test.
• “The question is not whether the two articles are distinguishable by their label when set side by side but whether the general confusion made by the article upon the eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result in his confounding it with the original.” — This excerpt defines the controlling standard for deceptive similarity in Philippine trademark law.
• “As between a newcomer who by the confusion has nothing to lose and everything to gain and one who by honest dealing has already achieved favor with the public, any doubt should be resolved against the newcomer inasmuch as the field from which he can select a desirable trademark to indicate the origin of his product is obviously a large one.” — This statement justifies the allocation of the risk of doubt against the later entrant who can easily avoid the similarity.
• “Registration in the Principal Register is a basis for an action for infringement while registration in the Supplemental Register is not.” — This succinct distinction, drawn from Lorenzana v. Macagba, directly governs the bottle‑configuration issue.

• Lorenzana v. Macagba, 154 SCRA 723 — Followed. Laid down the controlling distinctions between the Principal and Supplemental Registers; held that registration in the Supplemental Register cannot support an infringement suit.
• Shell Co. v. Insular Petroleum, 11 SCRA 436 — Distinguished. There, the defendant erased original marks in all but one isolated transaction and sold to dealers; here, Sunshine used multiple bottles without obliteration and sold to final consumers, which supported a finding of fraudulent intent.
• Mead Johnson Co. v. N.V.J. Von Dorp, Ltd., 7 SCRA 768 — Cited. Established the rule that the two marks in their entirety as they appear in the labels, in relation to the goods, must be considered to determine confusing similarity.
• Bristol Myers Co. v. Director of Patents, 17 SCRA 128 — Cited as additional authority for the holistic comparison test.
• United States cases such as McLean v. Fleming, Stuart v. F.G. Stewart Co., and William Waltke & Co. v. Geo. H. Schafer & Co. — Relied upon for the principles that first impression guides the inquiry, that similarity need not be identity, and that doubts are resolved against the newcomer.

• Section 22, Republic Act No. 166 (Trademark Law) — Defines trademark infringement as the unauthorized use of a reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale of goods in a manner likely to cause confusion or mistake as to source. Applied to find that Sunshine’s label was a colorable imitation of Del Monte’s registered trademark.
• Section 29, Republic Act No. 166 (Trademark Law) — Defines unfair competition and enumerates acts constituting it, including giving goods the general appearance of another’s goods or employing deception to pass off goods. Applied to declare Sunshine’s use of Del Monte bottles without obliteration an act of unfair competition, fraudulent intent having been established.
• Article 2222, Civil Code of the Philippines — Allows the award of nominal damages in every case where a property right has been invaded, even in the absence of proof of actual loss. Applied to grant ₱1,000 nominal damages to petitioners for the invasion of their trademark rights.

Narvasa, Gancayco, Griño-Aquino, and Medialdea, JJ., concurred.