Facts Adduced by Yellow Cab Food Corporation

Sometime in 1999, the business partners behind Yellow Cab, each of whom separately had around ten (10) years of various interests in other food-related business, such as franchises, decided to establish their own business. The business partners agreed on establishing a pizza restaurant. One of the partners conceptualized the idea of matching a colored taxi with their pizza business around January 2000. The other partners adopted the suggestion and finalized their choice to YELLOW CAB PIZZA CO. Yellow Cabs YELLOW CAB PIZZA CO. is a registered trademark.

Plans for the establishment of the new business were quickly drawn up. Yellow Cab Food Corporation was incorporated early in 2000. In October 2000, Yellow Cab leased an empty lot in Makati Avenue, Makati City and started negotiations with building contractors to erect its flagship restaurant. In April 2001, the first Yellow Cab Pizza Co. restaurant opened its doors to an enthusiastic public. Since then, Yellow Cab has opened fifty-four (54) restaurants all over Metro Manila and outlying provinces, with sixteen (16) more slated to open for business before the end of 2007.

Sometime in March 2004, a director of Yellow Cab, received a telephone call from an unidentified person inquiring about acquiring a Yellow Cab franchise. The caller asked how much it would cost to acquire a Yellow Cab franchise. Upon being told that it was around PhP8,000,000.00 to PhP10,000,000.00 depending on the size and configuration of the proposed establishment, the caller was very surprised and remarked that he thought the Yellow Cab franchise fee was only PhP25,000.00. Around June 2004, the same director of Yellow Cab received another telephone call from an unidentified person inquiring about a Yellow Cab franchise. Again, upon being told that it was around PhP8,000,000.00 to PhP10,000,000.00 depending on the size and configuration of the proposed establishment, the caller was very surprised and remarked that he thought the Yellow Cab franchise fee was only PhP25,000.00.The concerned Yellow Cab director remarked in his Affidavit:

I strongly believe that the callers asking for franchise information were referring to Green Cab and not to Yellow Cab, hence their surprise at the difference in the amount of the franchise fee. It was clear from the callers tone that they were in fact actually confusing Yellow Cab with Green Cab.

Sometime in April 2005, it came to the attention of Yellow Cab that there was a certain pizza restaurant chain operating under the service mark Green Cab Pizza Haus. Upon further investigation, Yellow Cab established that Green Cab was using, and continues to use, what it regarded as a colorable imitation of its registered YELLOW CAB PIZZA CO. mark on identical goods and the checkerboard design in its flyers and advertisements. Yellow Cab theorizes that the similarity of Green Cab Pizzas checkerboard design to Yellow Cabs own design in the flyers is undeniable; a strong indication of Green Cabs desire to imitate complainants designs.

Alarmed by the information that its registered YELLOW CAB PIZZA CO. AND DEVICE service mark was infringed by, and is continuously being infringed by Green Cab, Yellow Cab on 20 April 2005, sent a cease and desist letter to the proprietors of Green Cab, demanding that they immediately refrain from using the Green Cab Pizza Haus mark.

On 27 June 2005, Yellow Cab received a letter dated 20 June 2005 from Green Cabs counsel. Instead of complying with Yellow Cabs demand to stop using the service mark Green Cab Pizza Haus, the letter confirmed that Green Cab had in fact filed an application to register Green Cab Pizza as a service mark with the IPO.

Yellow Cab has registered its YELLOW CAB PIZZA CO. mark with the Intellectual Property Office. Yellow Cab has likewise registered its mark in the United States of America and Hong Kong. Further, Yellow Cab has pending trademark applications in Bahrain and Qatar, among others.

Rodney Bersamina, Yellow Cabs witness, revealed that he was part of a group of scooter-riding enthusiasts known as Scoot 66. Sometime around 2005, Scoot 66 organized and conducted an Amazing Scooter Race to traverse the route from BF Homes, Paranaque to Petron, Tagaytay, via Daang Hari Molino Paliparan Aguinaldo Highway, of which Rodney Bersamina participated. At the start of the Amazing Scooter Race, each of the participants was given a questionnaire to answer which consisted of 35 questions. Each question was assigned a point value of 1, 3, 5 or 10 points. The questionnaire referred to landmarks located along the route of the race. The object of the race was for the participants to try to get as many points as possible by answering the questions correctly.

Questions No. 9 to 12 referred to the second stage of the Amazing Scooter Race from Km. 10 20: Molino Road up to Jollibee, Molino. Question No. 12 of the questionnaire reads as follows: WHAT IS THE TELEPHONE NO. OF THE COUNTERPART OF YELLOW CAB PIZZA?

The organizers were under the impression that Green Cab was actually the counterpart of Yellow Cab. Rodney Bersamina testified that seven (7) of the participants correctly answered the question:

I answered GREEN CAB PIZZA Tel. No. 506-4746. As a participant in the race, I had no difficulty in answering the question, despite the fact that across from Green Cab was another pizza parlor. I have always thought that Green Cab Pizza was related to Yellow Cab Pizza Co. As a matter of fact, seven (7) of the ten (10) participants answered question no. 12 correctly.

Daniel Yaptangco Jr., a disinterested third person, executed an Affidavit which states:

While driving with my wife, I was surprised to find a Green Cab Pizza outlet along Aguinaldo Highway. My first reaction was Green Cab Pizza was an affiliate of Yellow Cab Pizza because of the confusing similarity in name.

Facts Adduced by Green Cab Pizza Haus

Respondent Christopher de Leon Baula was once employed as Store Manager of Dominos Pizza in one of its branches. He has worked his way to being a Manager until such time that he decided to resign from the company and seek for a greener pasture so to speak.

While waiting for calls from the companies where he applied for job, Mr. Baula drove a taxicab on a per boundary basis so as to earn income and be able to support his family.

His wife, Melody Baula, on the other hand, did her part to augment their income by doing some work for her father, Ricardo Dalumpines, in his pizza business, Splits Pizza.

Encouraged by Mr. Dalumpines and armed with some knowledge as to how to operate one from the experience he gained from his employment at Dominos Pizza, Mr. Baula decided to emulate him and likewise ventured in the same pizza business. Thus, sometime in January 2001, Mr. Baula, through the help of his wife and his father-in-law, started his own pizza business and sell their pizza products under the name Green Cab Pizza. Mr. Baula claims that he used Green for being a good luck color as what was told to them after having consulted a feng shui expert taking into account their birthdays and birth years. Likewise, he claims that the use of the word Cab was inspired by his job then as a cab driver.

Initially,the Baula spouses office-cum-pizza or kitchen-cum-pizza store was just their familys house. It was even Mr. Baula who personally made their deliveries to customers. Through sheer hard work and perseverance, however, respondents business grew and flourished and he was able to establish Green Cabs name and established its own niche in the market. Soon thereafter, he was able to open branches and/or outlets in different areas and in fact offered the business for franchising to any interested party.

A year after, or on 17 May 2002, Mr. Baula decided to formalize his business and had his business name successfully registered with the Department of Trade and Industry. For registration purposes with the DTI, he came up with the name Green Cab Pizza Haus adding the word Haus in the original name Green Cab Pizza.

It came as a big surprise to the Baula spouses when Yellow Cab demanded them to stop using the name Green Cab Pizza Haus.