Asia IP

Embroiled in a bitter struggle for control over a mark are two preeminent corporations in the Philippines. One would like to retain exclusive right over a mark that it has used since 1834 on its gin products, while the other would like to break that monopoly and use the same mark for its own gin products. The mark being fought over is the word “Ginebra.”

Ginebra San Miguel (San Miguel) produces gin labeled as “Ginebra San Miguel.” This gin product is ubiquitously referred to by Filipinos simply as “Ginebra.” Through the years, ginebra, which is the Spanish word for gin, has become a popular by-word among Filipino consumers as referring to the gin produced by San Miguel since, until recently, they have known of no other gin manufacturer that uses this Spanish term.

In 2002, Tanduay Distilleries (Tanduay) attempted to enter the gin market by developing its own product and naming it “Ginebra Kapitan.” Reckoning that Tanduay’s use of the word “Ginebra” for its gin products threatens the popularity and goodwill of San Miguel’s own gin products, the latter filed a complaint against the former for trademark infringement, unfair competition and damages.

Before hearing the merits of the case, the trial court granted San Miguel’s application for a writ of preliminary injunction and enjoined Tanduay from using the mark “Ginebra.” The trial court ruled that San Miguel and its predecessors have continuously used “Ginebra” as the dominant feature of its gin products since 1834, so much so that the word has become closely associated with San Miguel’s gin products. Consequently, there is a high probability that confusion is likely to occur since one would inevitably be led to conclude that both products are affiliated with San Miguel.

Tanduay immediately appealed the ruling to the Court of Appeals. The appellate court, however, upheld the trial court’s ruling and affirmed the injunction order. Having lost before the trial court and the Court Appeals, Tanduay elevated the injunction issue to the Supreme Court.

The Supreme Court declared void the order of preliminary injunction issued against Tanduay. It found that the existence of San Miguel’s right had not been clearly demonstrated.

San Miguel asserted the right to the exclusive use of the word “Ginebra,” but the Supreme Court ruled that to determine whether such right exists, the trial court must resolve whether the word “Ginebra” is a generic mark that is incapable of appropriation or can acquire a secondary meaning for gin products. San Miguel’s claim that the word “Ginebra” has become distinctive of its products through years of continuous use is still in dispute because of Tanduay’s claim that it has, as others have, also registered the word for its own gin products. This issue can be resolved only after a full-blown trial.

All three courts were in agreement that to obtain a preliminary injunction it is essential that the applicant show a clear and unmistakable right to be protected. But opinion diverged on whether a right has indeed been established.

The trial and appellate courts found that such right existed by virtue of San Miguel’s 175 years of extensive and continuous use of the word “Ginebra” and that, as such, gin drinkers in the Philippines would confuse San Miguel to be the manufacturer of “Ginebra Kapitan.”

The Supreme Court, on the other hand, was of the view that long and continuous use of a mark and likelihood of consumer confusion do not establish a right thereto if there are questions regarding the mark’s inherent registrability.

It would appear that the lack of registration for the word “Ginebra” alone may have spelled the difference in the case. San Miguel presented applications and registrations for composite marks that contain the word “Ginebra”; Tanduay, in contrast, presented evidence that other entities have registrations that contain the word “Ginebra” and that these entities, including San Miguel, were required to disclaim this word. The disclaimers lessened the probative value of the composite registrations, enough to put doubt on San Miguel’s exclusive right to the mark “Ginebra.”

Had San Miguel been able to present a registration for the simple word “Ginebra,” the outcome might have been in its favor. Since a certificate of registration is prima facie evidence of validity of registration, San Miguel will be able to bank on the presumption that the word “Ginebra” is registrable, and claim exclusive right to the same. The burden will then be on Tanduay to prove that the registration was of a generic mark and, therefore, invalid. But, in the meantime, San Miguel can rely on its prima facie validity as a basis for obtaining an injunction.

It must be remembered that the Supreme Court decision only touched upon the issue of preliminary injunction, but did not rule on the merits of the case.

The decision effectively allowed Tanduay to resume selling its gin products under the “Ginebra Kapitan” mark, which had been interrupted by the trial court’s injunction.

However, the court battle continues for San Miguel and Tanduay. It will be interesting to see how the case will be decided since it will, without a doubt, affect future Philippine trademark cases in years to come. It will also be interesting to know whether the Spanish word will ultimately be controlled by one entity or available to all.

Angara Abello Concepcion Regala & Cruz Law Offices

ACCRA Building, 122 Gamboa Street

Legaspi Village, 0770 Makati City,

Metro Manila, Philippines

T: +63 2 830 8000

F: +63 2 816 0119

E: accra@accralaw.com

W: www.accralaw.com

About the Author

Antonio Ray A Ortiguera is a senior associate in the intellectual property department of Angara Abello Concepcion Regala & Cruz Law Offices. He specializes in all aspects of intellectual property rights, protection including the registration and maintenance of patents, trademarks, copyrights and internet domain names; the recordation of intellectual property rights with the Bureau of Customs; and intellectual property rights enforcement and litigation. Ortiguera obtained his Bachelor of Science from the University of the Philippines; his Juris Doctor from the Ateneo De Manila; and his Master of Laws from Columbia University.