Trademarks/Trade-name of competitors

 

If the government prohibit the use of competing marks in a corporate sponsored event, will it violate any right? Two or more competing corporation, one of the corporation sponsored an event while the other corporation gives out tickets to the said event on the condition that the recipients will wear the brand of the said corporation for exposure, can the government prohibit such practice?  Firstly, it is unconstitutional for the government to prohibit the practice of giving out tickets on the condition that the recipient will wear something, which bears the brand (tradename or trademark) of the giver. It will be a violation of the liberty rights in general as well as the freedom of speech. Secondly, it will be an invalid exercise of police power if ever the government will adopt the aforementioned prohibition. It lacks a genuine public purpose and the means employed is not reasonable to the purpose it sought. Lastly, it is impracticable to implement such kind of law. It will be highly impossible for the state to supervise the proper imposition of that kind of law and it will open the flood gates for abuse of authority. Basically, the major concept involve in the problem is the use of trademarks or tradenames. It is imperative to clearly define these concepts to carefully examine the given problem.

 

Trademark means, a distinctive mark of authenticity, through which the products of particular manufacturers or the vendible commodities of particular merchants may be distinguished from those of others. It may consist in any symbol or in any form of words, but, as its office is to point out distinctively the origin or ownership of the articles to which it is affixed, it follows that no sign or form of words can be appropriated as a valid trade-mark which, from the nature of the fact conveyed by its primary meaning, others may employ with equal truth and with equal right for the same purpose. A distinctive mark, motto, device, or emblem, which a manufacturer stamps, prints, or otherwise affixes to the goods he produces, so that they may be identified in the market, and their origin be vouched for.[1] “Trade-mark” is created chiefly by use, which must be general, continuous, and exclusive and applied to goods and used in trade under such circumstances of publicity and length of use as to show intention to adopt mark for specific goods. Trade-name means a name used in trade to designate a particular business of certain individuals considered somewhat as an entity, or the place at which a business is located, or of a class of goods, but which is not a technical trade-mark either because not applied or affixed to goods sent into the market or because not capable of exclusive appropriation by anyone as a trade-mark. “Tradenames” may, or may not, be exclusive. Non-exclusive “trade-names” are names that are publicijuris in their primary sense, but which in a secondary sense have come to be understood as indicating the goods or business of a particular trader. “Trade-names” are acquired by adoption and user and belong to one who first used them and gave them a value.[2] Trademarks and trade-names are considered as part of the property right of a person and it is internationally recognized and protected. There are many international treaties governing the use of trademarks and trade-names, there are Multilateral treaties and agreements such as the Paris Convention, the Madrid Agreement and the Madrid Protocol, TRIPS, the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks, the Trademark Law Treaty, the Nice Agreement on International Classification, the Madrid Agreement on Indications of Origin, and the Singapore Treaty on the Law of Trademarks ; Regional agreements formed by countries of one region such as ARIPO and OAPI in Africa, the Andean Pact and Mercosur in South America, NAFTA, the General Inter-American Convention for Trade Mark and Commercial Protection and the European Community Trade Mark; Bilateral treaties and agreements between two countries or between a country and an intergovernmental organization (e.g., the European Union) on such issues as trade and intellectual property rights.

The problem also involves the protection of different rights. It can be submitted that the main purpose of the proposed law in the problem is intended to prevent unjust enrichment by one person against another. It may be argued that the distribution of the ticket in the problem is an act of unjust enrichment in the guise of gratuitous disposition. However, it will still be an unconstitutional law if it will invade some of the fundamental rights of the people guaranteed by the constitution notwithstanding the fact the purpose is the protection of one person’s right. An analysis of the rights involve must be done to determine whether the rights protected by the law and the rights invaded by the imposition of the law is well balanced by the government. The rights involve are the right against unjust enrichment protected under the civil law, liberty rights in general and freedom of speech guaranteed under the 1987 Philippine Constitution.

 

The right against unjust enrichment means a person shall not be allowed to profit or enrich himself inequitably at another’s expense. There is unjust enrichment “when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience.”The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at the expense of another. [3] The main objective of the principle against unjust enrichment is to prevent one from enriching himself at the expense of another without just cause or consideration. [4]  The principle of unjust enrichment is involve in the problem because the exposure of the brand of a company, in an event sponsored by competitors, may constitute retention of benefits of the former at the expense of the latter.

 

The right of liberty in general covers the right of a person to do anything he wants at anytime provided that it is not prohibited by law. The freedom to do anything is inherently vested to any human being. This right covers a wide range of activity and generally a man is by nature free. However, through the evolution of the society and the advent of new laws, this once unlimited right is now a right that can be regulated by the government. Every man may claim the fullest liberty to exercise his faculties, compatible with the possession of like liberty by every other. [5] Liberty is the creature of law, essentially different from that authorized licentiousness that trespasses on right. That authorized licentiousness that trespasses on right. It is a legal and a refined idea, the offspring of high civilization, which the savage never understood, and never can understand. Liberty exists in proportion to wholesome restraint; the more restraint on others to keep off from us, the more liberty we have . . . that man is free who is protected from injury. [6] Liberty consists in the ability to do what one caught to desire and in not being forced to do what one ought not do desire. [7] Even liberty itself, the greatest of all rights, is no unrestricted license to ac according to one’s own will. It is only freedom from restraint under conditions essential to the equal enjoyment of the same right by others.[8]

Another right involve in the problem is the right of freedom of speech. A prohibition to wear something which bears a trademark or trade-name of a corporation may invade this particular freedom. The government must exercise extreme caution in limiting this particular right because this is one of the rights guaranteed and protected by the constitution. The freedom of speech means the Freedom accorded by the constitution or laws of a state to express opinions and facts by word of mouth, uncontrolled by any censorship or restrictions of government. [9] The freedom of speech covers the right to make statements, express opinions and voice out complaints. The people are free to say whatever they want provided that it does not goes out of the boundaries allowed by law.  

 

If the government will impose a law, which prohibits the practice of wearing something, which bears the brand of another corporation, in a corporate sponsored event, such law is unconstitutional. It will run counter against two provisions of the constitution. It will violate the right to liberty in general and it will violate the freedom of speech.  It is well settled in the Philippine legal system that liberty rights cannot be deprived without due process of law. [10] There must exist a clear and present danger which the government must purge in order to limit the said rights of the people. Two theoretical formulas had been devised in the determination of conflicting rights of similar import in an attempt to draw the proper constitutional boundary between freedom of expression and independence of the judiciary. These are the “clear and present danger” rule and the “dangerous tendency” rule. The first as interpreted in a number of cases, means that the evil consequence of the comment or utterance must be “extremely serious and the degree of imminence extremely high” before the utterance can be punished. The danger to be guarded against is the “substantive evil” sought to be prevented. And this evil is primarily the “disorderly and unfair administration of justice.” This test establishes a definite rule in constitutional law. It provides the criterion as to what words maybe published. Under this rule, the advocacy of ideas cannot constitutionally be abridged unless there is a clear and present danger that such advocacy will harm the administration of justice.[11]. A limitation on the freedom of expression may be justified only by a danger of such substantive character that the state has a right to prevent. Unlike in the “dangerous tendency” doctrine, the danger must not only be clear but also present. “Present” refers to the time element; the danger must not only be probable but very likely to be inevitable. The evil sought to be avoided must be so substantive as to justify a clamp over one’s mouth or a restraint of a writing instrument.[12] In the problem, there is no clear and present danger. The possibility of exposure of the brand of the competitor corporation is not clear enough and it does not pose any certainty that there will really be an exposure. Moreover, there is no danger that the state must prevent by the mere exposure of the brand of the other corporation. No evil to be prevented by the imposition of the law. No people will be injured by the exposure of such brand nor will it result to any public disturbance, inconvenience, harm or any other form of damage. Clearly, there is no need for the government to restrict this particular right of the people. Moreover, it will only impair the right of the people to make any statement that they want. The possibility of unjust enrichment on the part of the sponsor is not certain and is not sufficient enough to strike down the fundamental right of the people to freely voice out their opinion and statements. The freedom of speech is one of the most delicate right that the highest law of the land protects. A law cannot easily deprive this particular right without showing that there exists a imminent danger or evil which cannot be avoided and the nature and character of such evil is one which the government must annihilate. Therefore, it can be submitted that this propose law in the problem does not pass the clear and present danger rule to validly limit the liberty right and the freedom of speech of the people.

The propose law is also an invalid exercise of police power. Police power means the power vested in a state to establish laws and ordinances for the regulation and enforcement of its police as above defined. The power vested in the legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same.[13] A valid exercise of the police power of the state requires a public purpose and the means employed must have a reasonable connection with the purpose it sought.  A public purpose or public business has for its objective the promotion of the public health, safety, morals, general welfare, security, prosperity, and contentment of all the inhabitants or residents within a given political division, as, for example, a state, the sovereign powers of which are exercised to promote such public purpose or public business. [14] In the case of Barangay sindalan, San fernando, Pampanga, vs. Court of appeals, the Supreme court held that there is no precise meaning of “public use” and the term is susceptible of myriad meanings depending on diverse situations. The limited meaning attached to “public use” is “use by the public” or “public employment,” that “a duty must devolve on the person or corporation holding property appropriated by right of eminent domain to furnish the public with the use intended, and that there must be a right on the part of the public, or some portion of it, or some public or quasi-public agency on behalf of the public, to use the property after it is condemned.”The more generally accepted view sees “public use” as “public advantage, convenience, or benefit, and that anything which tends to enlarge the resources, increase the industrial energies, and promote the productive power of any considerable number of the inhabitants of a section of the state, or which leads to the growth of towns and the creation of new resources for the employment of capital and labor, [which] contributes to the general welfare and the prosperity of the whole community.” In this jurisdiction, “public use” is defined as “whatever is beneficially employed for the community.[15] In the given problem the proposed law does not have any genuine public purpose and benefit. The people could not expect any benefit or gain from the prohibition of the exposure of brands of competing corporation. There is no legitimate public interest in the said proposal. The people usually would not mind or does not even concern himself from any display of whatever brand in an event. Even if the government prevents such exposure it will not logically result to any improvement or promotion of the welfare of the public in general. Moreover, the means employed does not necessarily result in the promotion of the purpose sought by the propose law.  The propose law seeks to prevent unjust enrichment; however, the prohibition to wear anything bearing the brand of the competitor of the sponsor will not prevent any unjust enrichment. It cannot be submitted that allowing people to wear anything, which the trademark or trade-name of the competitor corporation of the sponsor is printed, will result to unjust enrichment. The means employed does not have any reasonable connection with the purpose that it sought. The purpose also involves the protection of trademark but the trademark of the sponsor is not affected by the fact that other brands are exposed in the said event. It cannot also be said that the value of the trademark or trade-name of the sponsor is diminish by the fact that people attending the event wears other brand exposing the trademark or trade-name of the competitor of the said sponsor. The said exposure does not also amounts to any infringement of the trademark of the sponsor. It cannot also be argue that the prohibition under the propose law will prevent unfair competition. Unfair competition means a term which may be applied generally to all dishonest or fraudulent rivalry in trade and commerce, but is particularly applied in the courts of equity (where it may be restrained by injunction) to the practice of endeavoring to substitute one’s own goods or products in the markets for those of another, having an established reputation and extensive sale, by means of imitating or counterfeiting the name, title, size, shape, or distinctive pecularities of the article, or the shape, color, label, wrapper, or general appearance of the package, or other such simulations, the imitation being carried far enough to mislead the general public or deceive an unwary purchaser, and yet not amounting to an absolute counterfeit or to the infringement of a trade-mark or trade-name.[16] Therefore, it is submitted that the propose law is an invalid exercise of police power for it lacks a public genuine public purpose and the means employed does not have any reasonable connection with the purpose that it sought.

 

 

The propose law is also impractical because it will be very hard for the government to properly implement the same. In order to implement such law, it is necessary to determine what trademarks or trade-names are prohibited, but who will determine such? The next logical question, is prior notice to the audience necessary? Are there other alternatives that the government can take to prevent the alleged purpose that the propose law sought?  

 

Who will determine what a prohibited brand is? Does this mean that officers of the police force or any other agent of the government must be deployed in the sponsored event to check whether the people who enters the event does not wear anything, which bears the trademark or trade-name of the competitor of the sponsor. If this will be the case, the implementation of such policy will unduly burden the government and will cost a lot of its resources. The uncertain benefit that this propose law will bring is not commensurate to the cost of its implementation. Clearly, this will result to waste of the revenue of the government.  However, if such power will be delegated to private person that will amount to an invalid delegation of power, a prohibited practice under the constitution. A valid delegation of police power may arise from express delegation, or be inferred from the mere fact of the creation of the municipal corporation; and as a general rule, municipal corporations may exercise police powers within the fair intent and purpose of their creation which are reasonably proper to give effect to the powers expressly granted, and statutes conferring powers on public corporations have been construed as empowering them to do the things essential to the enjoyment of life and desirable for the safety of the people. An exercise of police power cannot be left to a private person. Therefore, the implementation of this law is absurd as there is no practical way of enforcing this law properly. Moreover, this propose law is also a violation of the over breadth doctrine. In the case of Romualdez vs Sandiganbayan, the Supreme Court held that A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of possible ‘chilling effect’ upon protected speech. The theory is that ‘[w]hen statutes regulate or proscribe speech and no readily apparent construction suggests itself as a vehicle for rehabilitating the statutes in a single prosecution, the transcendent value to all society of constitutionally protected expression is deemed to justify allowing attacks on overly broad statutes with no requirement that the person making the attack demonstrate that his own conduct could not be regulated by a statute drawn with narrow specificity.’ The possible harm to society in permitting some unprotected speech to go unpunished is outweighed by the possibility that the protected speech of others may be deterred and perceived grievances left to fester because of possible inhibitory effects of overly broad statutes.[17] Therefore, the implementation of this law is absurd as there is no practical way of enforcing this law properly

 

In conclusion, it is submitted that the government cannot take actions to prevent a person from wearing anything that he like regardless of the existence of any trademarks or trade-name of the competitor of the sponsor of the event. If the government will attempt to prohibit such practice, it will be invalid and unconstitutional.


[1] Black’s Law dictionary  4th edition page 1665

[2] Black’s Law dictionary 4th edition page 1666

[3] ARTURO SARTE FLORES, Petitioner,  vs. SPOUSES ENRICO L. LINDO, JR. and EDNA C. LINDO, Respondents. G.R. No. 183984               April 13, 2011

[4] P.C. Javier & Sons, Inc. v. Court of Appeals, 500 Phil. 419 (2005).

[5] Spencer, Social Statistics, p. 94.)

[6] (II Webster’s Works, p. 393.)

[7] (Montesque, spirit of the Laws.)

[8] Field, J., in Crowley vs. Christensen [1890], 137 U.S., 86.)

 

[9] Black’s Law dictionary 4th edition page 1065

[10] Section 1, Article III of the 1987 Philippine Constitution.

[11] Cabansag vs Fernandez Oct 18, 1957, GR no. L-8974

[12] ABS-CBN vs Comelec G.R. No. 133486           January 28, 2000

[13] Corn. v. Alger, 7 Cush. (Mass.) 85.

[14] Green v. Frazier, 44 N.D. 395, 176 N.W. 11, 17.

[15] Barangay sindalan, San fernando, Pampanga, vs. Court of appeals  March 22, 2007

[16] Reddaway v. Banham, [1896] App.Cas. 199;

[17] Romuladez vs Sandiganbayan July 29,2004

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