Named respondents in the case filed at the Quezon City Prosecutor’s Office were Anabelle Ching and Victoria Yu.
Zagu Foods Corp. director Edward Lim said the respondents’ use of the trademark "Shago" has a close resemblance to the Zagu trademark. For this, Zagu sued the two Shago incorporators for two criminal counts of infringement of copyright and unfair competition under Sections 216 and 217, and Sections 168 to 170, respectively, of Republic Act No. 8293.
The court suit also noted Shago’s substantial similarities to Zagu’s "interior and exterior features, including the dominant yellow color of its signage, logo and design, equipment and paraphernalia used including cups and tissues, operations procedure, menu, shake flavors and combinations, employee uniform and overall pricing."
Zagu’s complaint also asserted that Shago has unlawfully "appropriated for its benefit and gain" the trade that lawfully belongs to Zagu by "copying, adopting, or simulating" the Zagu marketing strategies.
Pearl shake drinks, ice-blended with tapioca balls or sago have become a booming industry since its introduction in the Philippine market in 1999.
ZaguTM is the pioneer in this industry and has spawned one of the country’s most successful franchising businesses.
Respondent Kerrisdale Food Corporation is a former franchisee of Zagu. In the middle of 2000, however, it stopped operating its Zagu franchise and instead established a similar line of pearl shake outlets bearing the trademark Shago.
In July, Zagu also served a demand letter to Kerrisdale Food Corporation for its outstanding unpaid accounts to Zagu Food Corporation.