Facts of the Case:

The petitioner Esso Standard is a foreign corporation duly licensed to do business in the
philippines. it is engaged in the sale of petroleum products which are identified by the trademarl
'Esso'. Esso is a successor of Standard Vacuum Oil Co, it registered as a business name with
the Bureau of Commerce in 1962. United Cigarette is a domestic corporation engaged in the
manufacture and sale of cigarettes. it acquired the business from La Oriental Tobacco Corp
including patent rights, once of which is the use of 'Esso' on its cigarettes.
The petitioner filed a trademark infringement case alleging that it acquired goodwill to such an
extent that the buying public would be deceived as ti the quality and origin of the said products to
the detriment and disadvantage of its own products. The lower court found United Cigarette guilty
of infringement. Upon appeal, the Court of Appeals ruled that there was no infringment in this
case.
Issue: Is there infringement committed?

Ruling: NONE. Infringement is defined by law as the use without the consent of the trademark
owner of any reproduction, counterfeit, copy or colorable imitation of any registered mark or
tradename which would likely cause confusion or mistake or deceive purchasers or others as to
the source or origin of such goods.
The products of both parties (Petroleum and cigarettes) are non-competing. But as to whether
trademark infringement exists depend on whether or not the goods are so related that the public
may be or is actually deceived and misled that they come from the same maker. Under the
Related Goods Theory, goods are related when they belong to the same class or have the same
descriptive properties or when they have same physical attributes. In these case, the goods are
absolutely different and are so foreign from each other it would be unlikely for purchasers to think
that they came from the same source. Moreover, the goods flow from different channels of trade
and are evidently different in kind and nature.

Republic of the Philippines

SUPREME COURT
Manila

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.

&

TEEHANKEE, J.: 1äwph ï1.ñët

The Court affirms 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 filed
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 non-competing 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.
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 Identified 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, 3referring 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 defines infringement as the use without consent of the trademark owner of any
"reproduction, counterfeit, copy or colorable limitation of any registered mark or tradename in
connection with the sale, offering 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 limitation 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 definition 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 now a days. 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 non- competitive, were held to be similar or to belong to the
same class, since both are toilet articles. 15 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 Refining Company for its
product, edible oil, it being further shown that the trademark applied for is in smaller type, colored
differently, 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 difference 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
therein respondent's product of ham notwithstanding its already being used by therein 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 classified 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
classification or general description of their properties or characteristics." The Court, therefore,
concluded that "In fine, We hold that the businesses of the parties are non-competitive 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 different 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
ït¢@lFº

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 certificate of registration of the trademark for
petroleum products, including aviation gasoline, grease, cigarette lighter fluid 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
non-competing 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" 21When 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 non-related is the
appellate court's finding that they flow through different channels of trade, thus: "The products of
each party move along and are disposed through different 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 sari-sari 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 differences on the trademarks used. As
pointed out by respondent court in its appealed decision, "(A) witness for the plaintiff, Mr. Buhay,
admitted that the color of the "ESSO" used by the plaintiff for the oval design where the blue
word ESSO is 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 plaintiff never used its trademark on any product
where the combination of colors is similar to the label of the Esso cigarettes," and "Another
witness for the plaintiff, Mr. Tengco, testified that generally, the plaintiff'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 difference
between the brand ESSO being used by the defendants and the trademark ESSO of the plaintiff
is that the former has a rectangular background, while in that of the plaintiff the word ESSO is
enclosed in an oval background."

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 affirmed the patent office'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 difficult 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. 1äwphï1.ñët

Makasiar, J., is on leave.

Vasquez, J., took no part.

&

Footnotes 1äwphï1.ñ ët

* First Division then cmposed 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 consequence 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
Office, 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.