SC Resolves IP Dispute Between Lechon Makers

June 28, 2021

The makers of ELARS Lechon which has been in the lechon business since the 70s, won its battle for its name.     

This after the Supreme Court denied for lack of merit the petition of Emzee, Inc. (Emzee) against Elarfoods, Inc. (Elarfoods), the makers of ELARS Lechon, thus resolving the long-standing dispute between them. Emzee and Elarfoods use substantially identical names for their lechon products.

ELARS Lechon was established and marketed in 1970 by spouses Jose and Leonor Lontoc (spouses Lontoc). In 1989, the spouses Lontoc incorporated their food business. Elarfoods was granted a Certificate of Registration by the Securities and Exchange Commission. Since then, the spouses Lontoc actively managed and used Elarfoods as its business name and marketed its roasted pig products as “ELARS LECHON ON A BAMBOO TRAY,” popularly known by the public as “Elar’s Lechon.”

However, without Elarfoods’ knowledge and permission, Emzee sold and distributed roasted pigs using the marks “ELARZ LECHON” “ELAR LECHON” “PIG DEVICE” and “ON A BAMBOO TRAY” making it appear that petitioner Emzee was a branch or franchisee of the respondent Elarfoods. Emzee’s officers and incorporators were former Elarfoods employees.

The SC First Division found that Emzee’s use of the marks “ELARZ LECHON,” “ELAR LECHON,” “PIG DEVICE,” and “ON A BAMBOO TRAY,” were substantially identical to Elarfoods’ marks, thus, constituted unfair competition.

Through the ponencia of Justice Samuel H. Gaerlan, the Court, applying the dominancy test to the case at bar, held that it was “very obvious that the [Emzee’s] marks ‘ELARZ LECHON’ and ‘ELAR LECHON’ bear an indubitable likeness with [Elarfoods’] ‘ELARS LECHON.’”

The Court stressed that both marks use the essential and dominant word “ELAR” and that the only difference between the Emzee’s mark from that of Elarfoods’ were the last letters Z and S, respectively. However, the letters Z and S sound similar when pronounced. Thus, both marks are not only visually similar, but are phonetically and aurally similar as well. Both marks are used in selling lechon products.

Hence, the Court affirmed the March 27, 2015 Decision and the September 11, 2015 Resolution of the Court of Appeals (CA), with the modification that in addition to the payment of exemplary damages and attorney’s fees to Elarfoods, Emzee was also ordered to cease and desist from using “ELARZ LECHON,” “ELAR LECHON,” “PIG DEVICE,” and “ON A BAMBOO TRAY” on its products.

“In fine, petitioner’s use of marks similar to those of the respondent’s constitutes a violation of the latter’s intellectual property rights. It is high time for petitioner to desist from conveniently latching on to the good will and reputation built by the respondent over the years. To fully protect the respondent’s rights, it is imperative to order the petitioner to cease and desist from using the former’s marks,” ruled the Court.

The Court further ruled that Emzee’s officers “acted in bad faith” noting that its president and incorporators were former employees of Elarfoods. It stressed that Emzee clearly had knowledge that the subject trademarks belong to Elarfoods, which have consistently and continuously used the same since 1989.

The Court noted that Elarfoods had filed applications for the registration of the subject trademarks. Recognizing their ownership of the said marks, the Intellectual Property Office granted it a Certificate of Registration. Furthermore, it noted that even prior to the registration of the subject trademarks, Elarfoods has been consistently using the said marks since its incorporation in 1989.

“A business is remembered and revered by its goodwill and reputation. Hence, for a business, its mark is not simply a random, meaningless combination of letters, phrases, or symbols. Rather these emblems embody the quality of the goods and services offered by the entity. For these reasons, the law steps in to protect its intellectual property rights,” the Court said.

(G.R. No. 220558, Emzee Foods, Inc. v. Elarfoods, Inc., February 17, 2021) READ FULL TEXT: https://sc.judiciary.gov.ph/19506/