SC ends trademark confusion

by Mary Ann LL. Reyes (The Philippine Star), 26 Jun 2021

Just recently, the Supreme Court put to an end the long-standing debate on whether the so-called holistic test can still be used by courts in determining whether or not trademark infringement has been committed.

In fact, in the case entitled Kolin Electronics Co., Inc. vs. Kolin Philippines International, Inc. decided last February 9 but posted only on its website last June 15, the Supreme Court deciding en banc admitted that our jurisprudence has not been consistent in saying what test should be used and under what circumstances.

As discussed by the SC, in determining trademark infringement, we have the dominancy test which focuses on the similarity of the prevalent features of the competing trademarks which might cause confusion or deception, and thus infringement. If the competing trademark contains the main, essential or dominant features of another trademark, and confusion or deception is likely to result, then infringement takes place. Duplication or imitation, it said, is not necessary nor is it necessary that the infringing label should suggest and effort to imitate. The question is whether the use of the trademark involved is likely to cause confusion or mistake in the mind of the public or deceive purchasers.

On the other hand, there is the holistic test, which according to the court, requires that the entirety of the trademark in question be considered in determining whether there is confusing similarity. As explained by the High Tribunal, comparison of words is not the only determining factor. The trademarks in their entirety as they appear in their respective labels or hang tags must also be considered in relation to the goods to which they are attached.

If the holistic test is used, the court explained that the discerning eye of the observer must focus not only on the predominant words, but also on the other features appearing on both labels in order that one may draw his conclusion whether one is confusingly similar to the other.

But as explained by Justice Marvic Leonen, there are contradictory lines of jurisprudence advocating the use of the dominancy test alone, the holistic test alone or even both tests. In fact, the SC said, there is at last one case where the court did not use either test.

This, despite the fact that only the dominancy test has been incorporated in the Intellectual Property Code of the Philippines, which defines trademark infringement as the colorable imitation of a registered mark… or a dominant feature thereof.

But in its Feb. 15, 2021 en banc decision, the Supreme Court, through ponente Justice Caguioa, explained that more than an indicator of a mere preference for the dominancy test, it appears that the legislative intent in explicitly adopting the dominancy test was to abandon the holistic test altogether, as can be seen in the legislative deliberations.

The SC said that considering the adoption of the dominancy test and the abandonment of the holistic test as confirmed by the provisions of the IP Code and the legislative deliberations, “the court hereby makes it crystal clear that the use of the holistic test in determining the resemblance of marks has been abandoned.

In the 2021 case, the SC said that using the dominancy test, KPII’s Kolin mark resembles KECI’s Kolin mark because the word “Kolin” is the prevalent feature of both marks. Phonetically or aurally, the marks are exactly the same and as the court explained, the manner of pronouncing the word “Kolin” does not change just because KPII’s mark is in lowercase and contains and italicized orange letter “I.” And in terms of connotation and overall impression, there seems to be no difference between the two marks, it added.

In the same case, the High Court also abandoned the use of product or service classification as a factor in determining relatedness or non-relatedness.

In a previous case entitled Taiwan Kolin Corp. vs Kolin Electronics decided in 2015, the SC held that identical marks may be registered even for products from the same classification.

In this 2015 case, the court explained that while both of their sets of goods belong to Class 9 of the NCL, mere uniformity in categorization by itself does not automatically preclude the registration of what appears to be an identical mark and does not necessarily result in trademark infringement.Emphasis, it said, should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics.

It also noted that while both are electronic products, they are are not ordinary consumable household items and buyers are more cautious and discriminating. Thus, confusion and deception is less likely. And even with a comparison of the general appearance of each mark as a whole, possibility of confusion is unlikely. Their fonts and colors are different even if both marks refer to the word “Kolin.”The SC concluded that petitioner’s trademark registration not only covers unrelated goods, but is also incapable of deceiving the ordinary intelligent buyer.

But now, using the dominancy test, the SC explained that KECI’s Kolin mark is a fanciful or coined mark and that considering that it is highly distinctive, confusion would be likely if someone else were to be allowed to concurrently use such mark in commerce.

With the SC putting an end to this long-standing confusion, businesses can now more comfortably decide on a trademark without worrying whether they can be used for trademark infringement.