含羞草社区

Filing a trademark infringement case is not just about proving the copying of the mark. Another important task for the trademark or brand owner is persuading the court, or the Intellectual Property Office of the Philippines (IPOPHL) in administrative cases, that the copying caused harm and that the trademark owner is entitled to damages.

This is where new practitioners in the field, and even foreign stakeholders unfamiliar with local enforcement, need guidance. The owner of the registered mark must lay a clear narrative and connect the harm to the infringement in a way that the court or the IPOPHL can quantify.

The IP Code of the Philippines gives several ways to frame the claim for damages. Section 156 allows the complainant to claim the profits it would have earned had the infringement not happened or the profits the infringer made from the infringement.

The brand owner’s missed profits can be shown through audited sales records, financial statements, or market data showing a dip in its sales when the infringing product was launched. Social media analytics and website traffic reports can also be used to demonstrate how the infringing product diverted attention in the marketplace.

If one is claiming the infringer’s profits, evidence may come from their sales invoices, importation records, or filings with the Securities and Exchange Commission that show the income tied to the infringing mark. The Rules of Court allow the issuance of a subpoena duces tecum (for production of tangible evidence) to compel the defendant or third parties to produce these records. Enforcement raids conducted by the National Bureau of Investigation may also uncover invoices or sales ledgers from the infringer’s premises, which can then be presented as evidence.

If neither the owner’s lost profits nor the infringer’s gains can be clearly established, the IP Code allows the use of a reasonable percentage of the defendant’s gross sales, or the value of services linked to the use of the complainant’s mark. An infringer cannot avoid liability simply because the exact figures are unclear.

Section 158 of the IP Code states that the owner of a registered mark cannot recover damages unless the infringing acts were committed with knowledge that the copying was likely to cause confusion, mistake or deception. This draws the line between innocent use and culpable infringement. Hence, prior to the filing of the infringement complaint, the brand owner must ensure that the infringer has been notified of its unauthorised use.

This requirement is usually met by sending a cease and desist letter to the infringer as soon as its use is discovered. However, there is no need for a separate notice if the words “registered mark” or the encircled letter R is displayed next to the registered mark. The law presumes that the defendant had knowledge of the registration in such cases. Without these, even a finding of trademark infringement may result without monetary compensation.

The complainant may hope for double damages. Section 156.3 of the IP Code authorises the court, at its discretion, to double the award if there is intent to mislead the public or defraud the brand owner. This intent may be shown, such as the use of an identical mark for the same goods, ignoring demand letters, selling goods in the same trade channels where the infringer could not plausibly be unaware of the owner’s brand, and/or copying the owner’s trade dress.

If the complainant suffered pecuniary loss but the exact amount cannot be determined with accuracy, temperate damages may be awarded instead of actual damages. Meanwhile, moral damages cover intangible injuries such as mental anguish, wounded feelings and reputational damage.

Since corporations are artificial entities without emotions, they are generally not entitled to moral damages. An individual brand owner would be able to recover moral damages, while a corporation’s claim will usually be limited to actual, temperate or exemplary damages.

Exemplary damages may be awarded to set an example for the public and to deter future acts of infringement. Under article 2233 of the Civil Code, however, they cannot be demanded as a matter of right. Article 2234 adds that the complainant must first establish that it is entitled to compensatory or temperate, and moral damages before the court can even consider granting exemplary damages (San Miguel Pure Foods Company, Inc v Foodsphere, Inc, 20 June 2018).

Claiming damages in a trademark infringement case is not guesswork. It requires evidence and a clear link between the act and the harm suffered by the brand owner. By laying out the figures, the brand owner can secure compensation and not just prove that its mark has been copied.

Ernest Luigi A Manzanares is an associate at Federis & Associates Law Offices