Courts reject holistic approach

01-12-2010

Eunice Hyacinth L. Tan

In determining whether a likelihood of confusion exists between competing trademarks, the Philippine Supreme Court relies on two principal tests: the dominancy test and the holistic test.

The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. In contrast, the holistic test considers the entirety of the marks as applied to the products, including labels and packaging.

The case of Dermaline, Inc. v. Myra Pharmaceuticals, Inc., decided on August 16, 2010, is the latest pronouncement by the court following a string of earlier decisions applying the dominancy test: Societe des Produits Nestle v. Court of Appeals (2001), McDonald’s Corporation v. L.C. Big Mak Burger (2004), McDonald’s Corporation v. MagJoy Fastfood Corporation (2007), Prosource International, Inc. v. Horphag Research Management SA (2009) and Societe des Produits Nestle v. Martin T. Dy Jr. (2010).

In Dermaline, petitioner Dermaline applied to register its ‘Dermaline, Dermaline Inc’ trademark in international class 44 for various skin treatments before the Intellectual Property Office (IPO). Respondent Myra Pharmaceuticals, Inc, the owner of an earlier registration for ‘Dermalin’ in international class 5 for pharmaceutical products, opposed Dermaline’s application.

In its opposition, Myra argued that Dermaline’s ‘Dermaline, Dermaline Inc’ mark so resembled its trademark ‘Dermalin’ that its registration would likely confuse and deceive the purchasing public. In response, Dermaline pointed out that, applying the holistic test, the subject trademarks bore entirely different features.

After the IPO and the Court of Appeals sustained Myra’s opposition, Dermaline appealed.

“The court concluded that the registered trademark owner may use his mark on the same or similar products, in different segments of the market and at different price levels, depending on market variations, as he enjoys protection in products and market areas that are in the normal potential expansion of his business.”

The Supreme Court affirmed the IPO’s application of the dominancy test. While noting the differences between the competing marks—Dermaline’s mark is written with the first ‘Dermaline’ in script going upwards from left to right, with an upper class ‘D’ followed by the rest of the letters in lower case, and the portion ‘Dermaline, Inc’ is written in upper case letters, below and smaller than the other section; Myra’s mark ‘Dermalin’ is written in upright font with a capital ‘D’ followed by lower case letters—the court nevertheless found likelihood of confusion.

The court noticed that the two word marks were identically spelled except that Dermaline’s mark ended with the letter ‘E’. In addition, the marks were practically pronounced similarly in three syllables, with the last letter ‘E’ of Dermaline’s mark pronounced silently. The court also pointed out that when an ordinary purchaser hears an advertisement of Dermaline’s trademark over the radio, chances are, the said purchaser will associate it with Myra’s registered mark.

In defending its right to register the Dermaline Dermaline, Inc mark, Dermaline raised another important issue. It argued that no relation existed between the goods, as its trademark for health and beauty services was distinct from Myra’s trademark registered covering medicinal goods against skin disorders.

In disagreeing with Dermaline, the court explained that while Dermaline’s products did belong to a separate and different classification, that did not forestall the possibility of confusion, especially since both marks denote products dedicated to treating the skin.

The court concluded that the registered trademark owner may use his mark on the same or similar products, in different segments of the market and at different price levels, depending on market variations, as he enjoys protection in products and market areas that are in the normal potential expansion of his business.

The court added: “Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to guarding his goods or business from actual market competition with identical or similar products of the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining party has extended his business into the field or is in any way connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business.”

Eunice Hyacinth L. Tan is an associate at Sapalo Velez Bundang & Bulilan. She can be contacted at: info@sapalovelez.com

Philippine Supreme Court, holistic test