2021 / Jul
G.R. No. 226444 KOLIN ELECTRONICS CO., INC., PETITIONER, VS. KOLIN PHILIPPINES INTERNATIONAL, INC., RESPONDENT. July 06, 2021
FIRST DIVISION
[ G.R. No. 226444, July 06, 2021 ]
KOLIN ELECTRONICS CO., INC., PETITIONER, VS. KOLIN PHILIPPINES INTERNATIONAL, INC., RESPONDENT.
DECISION
CAGUIOA, J:
This is a Petition for Review onCertiorari[1](Petition) under Rule 45 of the Rules of Court assailing the Decision[2]dated February 16, 2016 and Resolution[3]dated August 11, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 131918.
The Facts
To contextualize the legal landscape in which this controversy is to be decided, it is important to note that the parties and/or their affiliates here already had previous disputes relating to other marks.
In G.R. No. 228165, entitledKolin Electronics Co., Inc. v. Kolin Philippines International, Inc.[4](en banc Kolin case), the Court summarized the resolved disputes as follows:
To contextualize the legal landscape in which this controversy is to be decided, it is important to note that the parties and/or their affiliates here already had previous disputes relating to other marks.
In G.R. No. 228165, entitledKolin Electronics Co., Inc. v. Kolin Philippines International, Inc.[4](en banc Kolin case), the Court summarized the resolved disputes as follows:
1. The KECI Ownership Case[Taiwan Kolin Co., Ltd. v. Kolin Electronics Co., Inc., CA-G.R. SP No. 80641, July 31, 2006]In the recently decideden banc Kolin case, the Court also resolved another controversy between Kolin Electronics Co., Inc. (KECI) and Kolin Philippines International, Inc. (KPII) — the same parties in this case — involving the following marks:
On August 17, 1993, [the predecessor of petitioner Kolin Electronics Co., Inc. (KECI)] filed with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT; now known as the Intellectual Property Office or IPO) an application for registration of Trademark Application No. 87497 forKOLINcovering the following products under Class 9: automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplifier AC-DC [(KOLIN(Class 9)[5]].
x x x [KECI's predecessor] assigned in favor of KECI all the assets x x including its pending application for registration of the [KOLIN(Class 9)] mark. x x x
On February 29, 1996, Taiwan Kolin Co., Ltd. (TKC)[, an affiliate of respondent Kolin Philippines International, Inc. (KPII),] filed with the BPTTT Trademark Application No. 4-1996-106310 forKOLINinitially covering the following goods: "color television, refrigerator, window-type air conditioner, split-type air conditioner, electric fan, and water dispenser".
x x x TKC filed a verified Notice of Opposition on July 22, 1998 against KECI's trademark application for [KOLIN(Class 9)]. x x x
x x x x
On July 31, 2006, the CA issued a Decision against TKC and in favor of KECI. The CA clarified that the Trademark Law was applicable since it was still in effect at the time of the filing and during the pendency of the trademark applications of both parties. Accordingly, the CA held that there must be actual use thereof in commerce to acquire ownership of a mark. The CA found as undisputed that x x x the predecessor-in-interest of KECI, had been using the [KOLIN(Class 9)] mark in the Philippines since February 17, 1989, prior to the filing of the trademark application for [KOLIN(Class 9)] in 1993. x x x On the issue of priority being claimed by TKC, the CA agreed with fee decision of [the Office of the Director General of the IPO (ODG)] that, whether under the Trademark Law or the Intellectual Property Code (IP Code), TKC's "claim of x x x priority right is unavailing." Accordingly, the CA dismissed TKC's petition for lack of merit. x x x
x x x [O]n September 26, 2007, a Resolution was issued by the Court considering the case "CLOSED and TERMINATED." In an Entry of Judgment, the Resolution was considered final and executory on November 16, 2007 (theKECI ownership case).
Thus, by virtue of theKECI ownership case, KECI is the adjudicated owner of the [KOLINClass 9)] mark under the Trademark Law as against TKC.
2. TheTaiwan Kolin case[(Taiwan Kolin Corp., Ltd. v. Kolin Electronics Co., Inc. G.R. No. 209843, March 25, 2015)[6]]
However, in another case that went up to the Court, the registration of another KOLIN mark not owned by KECI was allowed. In G.R. No. 209843 x x x the Court gave due course to TKC's Trademark Application for KOLIN.
To recall, before filing an opposition case against KECI's application for [KOLIN(Class 9)], TKC had filed on February 29, 1996 Trademark Application No. 4-1996-106310 for KOLINinitially covering the following goods: "color television, refrigerator, window-type air conditioner, split-type air conditioner, electric fan, and water dispenser."
x x x x
KECI filed an opposition against TKC's application with the [IPO-Bureau of Legal Affairs (BLA)] on July 13, 2006 based on the fact that it is the registered owner of the [KOLIN(Class 9)] mark, which it claimed was confusingly similar to TKC's application for KOLIN. x x x
x x x TKC filed an Answer to the Opposition, claiming, among others, that its Trademark Application x x x "later became Trademark Application No. 4-2002-011002filed on [December 27, 2002] when it was re-filed/revived after the handling lawyer delayed the submission of requirements for the first application."
x x x x
It is important to highlight that there werethree (3) marksinvolved in theTaiwan Kolin case(1) KECI's [KOLIN(Class 9)] trademark registration No. 4-1993-087497; (2) TKC's trademark application No. 4-1996-106310, which was opposed by KECI; and (3) TKC's trademark application No. 4-2002-011002, which was allegedly the "revived" version of TKC's application.
For ease of reference, the subject marks are included in the following table:
[(Class 9)]
x x x x
Keeping this in mind, theTaiwan Kolin caseruled in favor of TKC.
x x x x
x x x [The Court] then made a side-by-side comparison of the marks to state that the ordinary intelligent buyer is not likely to be contused. For reference, the side-by-side comparison used in the case is shown below:
x x x [T]he Court's Third Division concluded that KECI's trademark registration not only covers unrelated goods but is also incapable of deceiving the ordinary buyer in relation to TKC's application. Accordingly, TKC's petition was granted, the CA decision was reversed and set aside, and the [ODG] Decision, which gave due course to TKC's Trademark Application No. 4-1996-106310 forKOLIN, was reinstated.[7](Additional emphasis supplied; italics and underscoring in the original)
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The Bureau of Legal Affairs (BLA) and the Office of the Director General (ODG) ruled in favor of KECI and rejected KPII's application forkolin. However, the CA reversed the decision in line with theTaiwan Kolin case. Eventually, the Court reversed and set aside the CA Decision and rejected the registration of KPII'skolinmark because it causes damage to KECI. As will be explained below, the Court's pronouncements in theen banc Kolin caseheavily impact how the Court resolves the instant dispute.
The present controversy started when KPII filed an application for a mark on December 27, 2002, with the following relevant details:
KPII's application was opposed by KECI on April 20, 2006 on the allegation that the latter would be damaged by its registration. KECI alleged that it is the owner of theKOLIN(Class 9) mark, having been the first user thereof under the Trademark Law,[10]and confusion is inevitable because the marks are similar to each other, KPII'sKOLINcovers services which are related to the goods covered byKOLIN(Class 9), and KECI itself manufactures and distributes electronic products.[11]In fact, KECI claims that "some of [its customers] are under the impression that [KPII and KECI] are one and the same company," such that: "[KECI] has received inquiries for products that are manufactured or distributed by [KPII]; [KECI] even received requests for service or maintenance of appliances of [KPII]; [and] x x x to lessen confusion x x x and to protect its reputation, [KECI] was constrained to issue disclaimers to the public."[12]Moreover, KECI claimed that KPII's filing ofKOLINwas in bad faith[13]and even if the services covered byKOLINare not related to the goods covered byKOLIN(Class 9), the registration ofKOLINis still proscribed because it effectively prevents KECI from expanding its business.[14]While not raised in the opposition itself, KECI would later argue that it would be damaged by the registration ofKOLINbecause it is confusingly similar to its own trade name, as will be discussed below.
In response, KPII filed its Answer on August 20, 2006, arguing that its application is for the use and adoption ofKOLINas a trade name, to identify its business[15]and KECI's use ofKOLIN(Class 9) for its goods does not prevent another's adoption of "KOLIN" as a trade name.[16]KPII emphasized that Taiwan Kolin Corp., Ltd. (TKC) had authorized it to registerKOLINin the Philippines in connection with marketing, selling, and distribution of KOLIN-branded products in the Philippines and its filing was not in bad faith because this application was filed on September 14, 1999, re-filed in 2002, and this was only filed to avoid abandonment.[17]Moreover, KPII insisted that the ruling in theKECI ownershipcase is not conclusive here since that case only concerns the application forKOLIN(Class 9), not for the use of KOLIN as a trade name and for its use as a mark for other classes, including Class 11, 21, and 35.[18]Also, KPII argued that there is no likelihood of confusion because the buying public is normally cautious and discriminating.[19]
In a Reply, KECI essentially denied these allegations and repleaded the allegations in its opposition.[20]Among others, KECI pointed out that KPII sought to mislead the IPO by attempting to pass off its application for registration of a mark as an application for registration of a trade name.[21]
Pertinently, the records[22]show that on May 29, 2007, KECI filed an application forKOLIN(Class 35). This was eventually registered on December 22, 2008,after the BLA proceedings and right before the case was submitted for decision in the ODG. The relevant details forKOLIN(Class 35) are included below:
| Mark | KOLIN |
| Application No. | 4-2007-005421 |
| Class | 35 |
| Services covered | For Business of Manufacturing, Importing, Assembling, or Selling Electronic Equipment or Apparatus[23] |
BLA Decision
On June 29, 2007, BLA Director Estrellita Beltran-Abelardo issued Decision No. 2007-83[24]rejecting KPII's application forKOLIN. The BLA did not give credence to KPII's explanation that it had applied for a trade name and clarified that a trade name is different from a trademark,viz.:
As a legal terminology,a trade name is defined differently from a trademark, as provided in [Republic Act No.] 8293[25]or the [IP Code],However, a trademark is almost always confused with a trade name since a word may be used both as a trademark and a trade name. In the old case ofUS vs Kyburz (GR No. 9458, November 24, 1914),the Honorable Supreme Court ruled:As to the marks involved, it is important to note that KECI'sKOLIN(Class 35) was not yet registered, so the BLA's comparison was only between KPII'sKOLINand KECI'sKOLIN(Class 9). In this regard, the BLA found that there is a likelihood of confusion — in particular, confusion of business — between these two marks,viz.:"Trade names have been frequently confused with trademarks and broadly speaking they include names which may constitute trade marks; but accurately speakingtrade names are names which are used in trade to designate a particular business of certain individuals considered somewhat as an entity, or the place at which a business is located, or of a class of goods, but which are not technical trademarks either because not applied or affixed to goods sent into the market, or because not capable of exclusive appropriation by anyone as trademarks".[KPII's] arguments to effect the denial of this instant Opposition, albeit sound, are scant of justification. It must be noted that theBureau of Trademarks of the Intellectual Property Office, where the subject application was filed,has the function of search and examination of the applications for the registration of marks, geographic indications and other marks of ownership and the issuance of the certificates of registration. (Section 9, [IP Code])
The foregoing makes no mention of registration of trade name for business. Verily,the ratiocination of [KPII] that it applied for registration of trade name for business and not for registration of trademark is inconsistent. If the intention of [KPII] is to seek registration of trade name for business, application should have been filed with the Department of Trade and Industry. In this instant case, [KPII] filed its application for trade name with the IPO.[26](Additional emphasis and underscoring supplied)
The fact is thatboth parties use exactly the same or identical word "KOLIN". With respect to their goods, this Bureau has to agree to [KPII] that the contending goods belong to different classes. x x xWhile the BLA did not make any factual finding as to the existence of actual confusion despite KECI's allegations, the BLA decided in favor of KECI in view of its determination that there is likelihood of confusion.
x x x [I]t is not far from clear that purchasers of [KECI's] electronic products will relate [KPII] as its service provider, and vice versa. Furthermore, the purchasers of [KECI's] home appliance and the consumers who avail service of electronic goods are usually the general public, families and domestics, who are not very discriminative since home appliance and electronic goods [nowadays], are considered common household needs. In fact, almost always, these are interchangeably used. Home appliances are related to electronic appliance[s], in the sense that home appliance[s] are electronically operated and are sometimes operated using electronic gadgets such as converter, voltage regulator and transformers.
Similarly,electronic products are also used at home, making them home products although not exactly as home appliance. As decided in a string of trademark cases that in a contest involving registration of trademark,the determinative factor isnot whether the challenged mark would actually cause contusion or deception of the purchasers butwhether the use of the mark wouldlikelycause confusion or mistake on the part of the buying public. The assumption therefore is that they originate from one manufacturer or service provider.
Thus, while it is also true that the consumers of the goods or service are not those who do not exercise discretion, thelikelihood of confusion is still probable because of its identical name or mark and the relatedness of [KECI's] products to [KPII's] products of service.
The element of relatedness is confirmed by the allegation of [KPII] that the products "complement each other."This is the same as saying that one product makes up for the deficiency or supplement the other.[27](Emphasis supplied)
In Resolution No. 2008-15, the BLA denied KPII's motion for reconsideration, so the latter appealed to the ODG.[28]
In its Appeal Memorandum, KPII alleged, among others, that KECI's right toKOLIN(Class 9) does not extend to Class 35; KECI has not shown prior use ofKOLINunder Class 35; there is no evidence of confusion of business between KECI'sKOLIN(Class 9) and KPII'sKOLIN.[29]
KECI filed a Comment/Opposition to KPII's Appeal Memorandum. Apart from reiterating its earlier allegations on the likelihood of confusion and actual consumer confusion between itsKOLIN(Class 9) and KPII's application forKOLIN,[30]KECI posited additional arguments on whyKOLINshould be rejected. For one, KECI claims that Section 236[31]of the IP Code prohibits the registration ofKOLIN.[32]Also, KECI claimed that it was the first one to use KOLIN as a trade name and mark in 1989 and it had a clear right to exclusive use of KOLIN.[33]Thus, KECI argued that, even prior to or without registration of KOLIN as trade name, the KOLIN trade name is protected against any unlawful act committed by third parties.[34]
ODG Decision
In a Decision in Appeal No. 14-08-37[35]dated September 12, 2013, Director General Ricardo R. Blancaflor dismissed KPII's appeal.
Notably, the ODG did not examine the peculiar circumstances and other allegations of KECI in this case, such as KECI's alleged first use of the KOLIN trade name, the applicability of Section 236 of the IP Code in the instant controversy, and the actual confusion among consumers based on the evidence presented. To recall, KECI'sKOLIN(Class 35) was also registeredbeforethe ODG issued its decision but there was no mention how KECI'sKOLIN(Class 35) impacts the likelihood of confusion analysis in the opposition proceedings.
In ruling in favor of KECI, the ODG simply quoted the April 30, 2013 CA Decision (CA-G-R. SP No. 122565; eventually reversed by the Court in theTaiwan Kolin case),[36]which had ruled that TKC's use of "KOLIN" would result to likelihood of confusion, thus:
Dissatisfied, KPII filed a Rule 43 Petition for Review with the CA premised on twin grounds: (1) the ODG gravely erred in sustaining KECI's opposition; and (2) the ODG gravely erred in ruling that the registration of KPII'sKOLINwill result in confusion of business.[38]The issues in this case are the following:Precisely, the interest of justice and fair play requires the resolution of the issue of whether the mark KOLIN x x x can be registered in the name of [KPII].
x x x x
2. Whether the mark KOLIN can be registered in the name of [KPII].
x x x x
On 30 April 2013,the [CA] in a related case between [TKC] and [KECI] held that[:]
x x x x
In this regard,with the decision of the [CA] that the use by [TKC] of KOLIN would lead to confusion in business, [KPII] cannot register this mark. From the words of the [CA], "allowing [TKC's] registration would only confuse consumers as to the origins of the products they intend to purchase."
WHEREFORE, premises considered, [KPII's] appeal is hereby dismissed.[37](Emphasis supplied)
CA Decision
On February 16, 2016, the Thirteenth Division of the CA issued a Decision[39]in CA-G.R. SP No. 131918, which granted KPII's petition. When the CA Decision was issued, theTaiwan Kolin casehad already been promulgated by the Court.
In resolving the issue of whether KPII is entitled to the registration ofKOLIN, the CA substantially quoted theTaiwan Kolin case,viz.:
The primordial issue to be resolved is whether or not petitioner is entitled to its trademark registration of "KOLIN" over its specific [services] under Class 35 x x x.KECI moved to reconsider the decision, but the CA denied the motion for reconsideration for lack of merit in a Resolution[41]dated August 11, 2016.
x x x x
The petition is impressed with merit.
x x x x
Both parties hinge their case on [the CA's] ruling in CA-G.R. SP No. 122565 x x x wherein the [CA] ruled in favor of [KECI] x x x.
The Supreme Court in the [Taiwan Kolin case], settled the issue on the registrability of [TKC's] trademark "KOLIN" in this wise:
x x x x
Prescinding from the foregoing, we find that [KPII's] Application Serial No. 42002-0011003 for [services] falling under Class 35 of the Nice Classification x x x should be given due course.
We reiterate that whether or not the products covered by the trademark sought to be registered by petitioner on the one hand, and those covered by the prior issued certificate of registration in favor of respondent, on the other, fall under the same Nice Classification categories is not the sole and decisive factor in determining a possible violation of the latter's intellectual property right, should petitioner's application be granted. It is hornbook doctrine that emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics. The mere fact that one person has adopted and used a trademark on his goods would not, without more, prevent the adoption and use of the same trademark by others on unrelated articles of a different kind.
In this case, credence is accorded to petitioner's assertions that:In fine, the policy granting factual findings of courts, or in this case quasi-judicial agencies, great respect, if not finality, is not binding where they have overlooked, misunderstood, or misapplied some fact or circumstance of weight and substance. So it must be here; the nature of the products involved materially, affects the outcome of the instant case. A reversal of the IPO Decision then, is in order.[40](Emphasis supplied)
- [KPII's] goods are classified as home appliances as opposed to [KECI's] goods which are power supply and audio equipment accessories;
- The home appliances of [KPII] perform [a] distinct function and purpose from [KECI's] power supply and electronic equipment and accessories;
- [KPII] sells and distributes its various home appliance products 'on wholesale' and to accredited dealers, x x x [whereas KECI's] goods are sold and flow through electrical and hardware stores.
Thus, KECI filed the instant Rule 45 Petition based on the following grounds:
(1) | theTaiwan Kolin caseis not applicable in the present case;[42] |
(2) | KPII cannot registerKOLINfor services under Class 35 since it is identical to KECI's trade name;[43]and |
(3) | the Class 35 services covered by KPII's[44]application for the markKOLINare closely related to the goods and services covered by KECI's existing registrations forKOLIN(Class 9) andKOLIN(Class 35) and is likely to mislead the public.[45] |
In a Comment[46]dated April 11, 2017, KPII argued that (1) the CA did not err in applying theTaiwan Kolin casein the instant dispute based on the doctrine ofstare decisis;[47](2) the goods to which KPII's application relates are not closely related to KECI's goods inKOLIN(Class 9);[48]and (3) KECI is barred from arguing that KPII's trademark may not be registered on account of its being identical to KECI's trade name.[49]
KECI filed its Reply[50]dated August 30,2017, insisting that the principle ofstare decisisis not applicable and the Class 35 services covered byKOLINare closely related to the services covered by KECI'sKOLIN(Class 35) registration, thereby making confusion likely.[51]
To determine whether KPII's application forKOLINshould be granted registration, the Court must resolve the following issues:
- Whether the principle ofstare decisisfinds application here;
- If the principle ofstare decisisis not applicable, whether KECI will be damaged by KPII's registration ofKOLIN.
The Court finds KECI's Petition meritorious. KPII's application forKOLINis rejected.
I.
To recall, in the BLA proceedings, the evidence and allegations of the parties were considered in determining the existence of likelihood of confusion, which justified the rejection of KPII's application forKOLIN. When the case reached the ODG, it no longer considered the other allegations of damage and merely applied the ruling in CA-G.R. SP No. 122565, which ruled in favor of KECI.
The CA also did not look at the relevant aspects of damage alleged by KECI in support of its opposition. Instead, it quoted and applied theTaiwan Kolin case(which reversed CA-G.R. SP No. 122565) in its decision. Moreover, the CA gave credence to KPII's assertions, which are almost similar to the assertions cited in theTaiwan Kolin case, notwithstanding that the marks involved here are different:
Findings of the CA | Findings in theTaiwan Kolin case |
In this case, credence is accorded to petitioner's assertions that: | x x x In this case, credence is accorded to petitioner's assertions that:
|
For its part, KECI argues that theTaiwan Kolin caseis inapplicable because the facts therein are different from the facts here.[54]On the other hand, as mentioned, KPII insists that theTaiwan Kolin caseshould be applied here based on the principle ofstare decisis.
The Court finds KECI's argument meritorious.
The salutary doctrine ofstare decisis et non quieta movere, which means "to adhere to precedents, and not to unsettle things which are established,"[55]is described in this wise:
x x x Under the doctrine, when the Supreme Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same[; regardless of whether the parties and property are the same]. The doctrine ofstare decisisis based upon the legal principle or rule involved and not upon the judgment which results therefrom. In this particular sensestare decisisdiffers fromres judicatawhich is based upon the judgment.To emphasize, theTaiwan Kolin caseinvolved the following marks:
The doctrine ofstare decisisis one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus:"Time and again, the [C]ourt has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same.Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled.Stare decisissimply means that for the sake of certainty, a conclusion reached in one case should be applied to those that follow if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule ofstare decisisis a bar to any attempt to relitigate the same issue."[56](Emphasis supplied; italics in the original)
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In contrast, this controversy involves the following marks:
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Indeed,KOLINandKOLINare also involved here. However, thecoverage of the marks in this controversy are very different, therefore, it is error to consider theTaiwan Kolin caseasstare decisishere for all the questions relating to the existence of likelihood of confusion.
For one, in this case, KECI already has a new registration forKOLIN(Class 35) with a different coverage, and the likelihood of confusion in relation to this mark was alleged as one distinct aspect of damage. This allegation of damage was neither present nor considered in theTaiwan Kolin case.
Moreover, KPII's application doesnothave an identical coverage to TKC'sKOLINcovering "Television and DVD player" products. This means that the Court's finding of non-relatedness of marks inTaiwan Kolin casecannot be made applicable here. Because the Court's comparison in theTaiwan Kolin casewas only limited between KOLIN(Class 9) goods andKOLIN's "Televisions and DVD players," it is error to apply the discussions therein wholesale in this case.
The doctrine ofstare decisisis inapplicable because this controversy involves different facts and circumstances compared to theTaiwan Kolin case. Thus, the CA clearly erred in applyingin a wholesale mannerthe ruling in theTaiwan Kolin case,without considering the peculiar aspects of this controversy,such as the KECI'sKOLIN(Class 35) registration or the existence of actual confusion alleged by KECI.
To clarify, the Court is not declaring thatstare decisiscan never apply in trademark disputes, considering that no two cases will share identical circumstances in all aspects. To be sure, if a case contains circumstances identical or highly similar to the circumstances in the current dispute, the principle ofstare decisiswill apply insofar as the similarity is concerned. To illustrate, if the Court finds here thatKOLIN(Class 9) goods are related to the services inKOLIN's application, the Court's conclusion will surely be applicable to future controversies involving the same goods and services pursuant to the principle ofstare decisisinsofar as the matter ofrelatednessis concerned, andnot the whole conclusion on the existence or nonexistence of likelihood of confusion. Thus, the other factors and circumstances peculiar to those cases will still have to be considered in determining likelihood of confusion.
A more significant point for not considering theTaiwan Kolin caseasstare decisishere is that its manner of determining likelihood of confusion conflicts with the law in force as interpreted by the Court. This exception to the principle ofstare decisiswas aptly discussed in the case ofTan Chong v. Secretary of Labor,[57]viz.:
The principle ofstare decisisdoes not mean blind adherence to precedents. The doctrine or rule laid down, which has been followed for years, no matter how sound it may be, if found to be contrary to law, must be abandoned.The principle ofstare decisisdoes not and should not apply when there is conflict between the precedent and the law.The duty of this Court is to forsake and abandon any doctrine or rule found to be in violation of the law in force.[58](Emphasis supplied; italics in the original)As will be elaborated below, the recently decideden banc Kolin casemade several significant changes on how likelihood of confusion is determined. Since the recent changes made by the Court are in conflict with several points relating to likelihood of confusion in theTaiwan Kolin case, the pronouncements and legal principles enunciated in theTaiwan Kolin caseshould not be applied here using the principle ofstare decisis.
KPII'S APPLICATION IS NOT REGISTRABLE BECAUSE IT CAUSES DAMAGE TO KECI
KECI filed the opposition against KPII's application forKOLINbecause KECI claims it will be damaged by its registration.
Section 134 of the IP Code describes when someone may file an opposition against an application for a mark, thus:
SECTION 134.Opposition. – Any person who believes that he would bedamagedby the registration of a mark may, upon payment of the required fee and within thirty (30) days after the publication referred to in Subsection 133.2, file with the Office an opposition to the application. Such opposition shall be in writing and verified by the oppositor or by any person on his behalf who knows the facts, and shall specify the grounds on which it is based and include a statement of the facts relied upon. Copies of certificates of registration of marks registered in other countries or other supporting documents mentioned in the opposition shall be filed therewith, together with the translation in English, if not in the English language. For good cause shown and upon payment of the required surcharge, the time for filing an opposition may be extended by the Director of Legal Affairs, who shall notify the applicant of such extension. The Regulations shall fix the maximum period of time within which to file the opposition. (Sec. 8, R.A. No. 165a) (Emphasis supplied)The provision broadly uses the word "damage" as a justifiable basis for rejecting an application or as ground for an opposition. Thus, in opposition cases, opposers may allege any and all aspects of damage and these will form the framework for determining whether the application should be rejected. To be sure, anysingle aspect of damage,(e.g., the existence of likelihood of confusion) would already be sufficient basis to reject an application.
As can be gleaned from the records, during the proceedings in the lower court and the IPO, KECI had raised several aspects of damage, which may be summarized as follows:
- Likelihood of confusion between KPII's application forKOLINand KECI'sKOLIN(Class 9) registration.
- Likelihood of confusion between KPII's application forKOLINand KECI'sKOLIN(Class 35) registration.
- KPII'sKOLINis identical to KECI's trade name, KOLIN ELECTRONICS CO., INC.
- Adverse effect of theKOLINregistration to KECI's Trademark Law registration forKOLIN(Class 9).
Thus, even if the CA had found that "[TKC] had authorized KPII to adopt and use [its] mark "KOLIN" in the Philippines and to register the mark in connection with its business dealings," theonly consequence of TKC's authorization is that KPII was given the right to use the exact mark allowed to be registered in theTaiwan Kolin case,not a blanket authority to use — or register, for that matter — any and all figurative or stylized versions of the word "KOLIN". The Court adopts Senior Associate Justice Perlas-Bernabe's insightful disquisition on this point,viz.:In this regard, one important question must be answered: considering that the owner of the registeredKOLINmark (covering "Television and DVD player") has allowed KPII to use the mark,does it automatically mean that the registration ofKOLINcovering a different set of goods/servicesby KPII should be allowed regardless of the effect of registration on other entities?x x x [I]t should be discerned that the CA's application ofres judicatain the concept of conclusiveness of judgment failed to take into account the nature of TKC'sKOLINmark as a mere design mark, which attribution should consequently limit the legal effects of the [Taiwan Kolin case's] final judgment. x x x TKC – having been adjudged as the owner of a mere design mark –could have only assigned to KPII the right to adopt and use its mark under the specific stylization and design ofKOLIN. x x x[59](Emphasis supplied; italics in the original)
The Court answers in the negative. While it is true that KPII possesses the authorization of the owner ofKOLINfor "Television and DVD player", this does not mean that KPII can claim exclusivity over theKOLINmarkfor all other goods/services, regardless of damage to other entities.
Thus, the Court still has to determine whether KECI's allegations of damage are meritorious because the authorization given to KPII does not negate these aspects of damage.
Again, even if only one aspect of damage is deemed to exist, KPII'sKOLINmay already be rejected. Nevertheless, for the comprehensive resolution of this dispute, the Court finds it necessary to discuss all of them.
[First aspect of damage]
Likelihood of confusion between KPII's application forKOLIN
and KECI'sKOLIN(Class 9) registration.
Section 123.1(d) of the IP Code provides that if the registration of a mark causes likelihood of confusion, it should not be registered,viz.:
SECTION 123.Registrability. – 123.1. A mark cannot be registered if it:In 2011, the Court laid down the criteria for determining the existence of likelihood of confusion in theRules of Procedure for Intellectual Property Rights Cases,[60]viz.:
The provision was reproduced in the2020 Revised Rules of Procedure for Intellectual Property Rights Cases,[61]evincing the Court's intent to make this thestandard methodof determining likelihood of confusion.Rule 18 x x x x
SEC. 4.Likelihood of confusion in other cases. — In determining whether one trademark is confusingly similar to or is a colorable imitation of another, the court must consider the general impression of the ordinary purchaser, buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods. Visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace must be taken into account. Where there are both similarities and differences in the marks, these must be weighed against one another to see which predominates.
Indetermining likelihood of confusion between marks used on non-identical goods or services,several factors may be taken into account, such as, but not limited to:
a) the strength of plaintiff's mark;
b) the degree of similarity between the plaintiffs and the defendant's marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.
x x x x (Emphasis supplied; italics in the original)
In theen banc Kolin case, the Court reinforced the use of this standard method, referred to these criteria as themultifactor test,and discussed several significant changes relating to them, thus:
In determining likelihood of confusion—which can manifest in the form of "confusion of goods" and/or "confusion of business" — several factors may be taken into account, such as:Being the standard method for determining likelihood of confusion, the multifactor test is also used in this case because KECI alleges that likelihood of confusion will ensue ifKOLINis registered.
These criteria may be collectively referred to as themultifactor test.Out of these criteria, there are two which are uniformly deemed significant under the Trademark Law and the IP Code: the resemblance of marks (the degree of similarity between the plaintiffs and the defendant's marks) and the relatedness of goods or services (the proximity of products or services). Nevertheless, the other factors also contribute to the finding of likelihood of confusion, as will be discussed.[62](Emphasis in the original)
For ease of reference, the significant changes and pronouncements made relative to the multifactor test criteria in theen banc Kolin caseare summarized below:
Resemblance of marks (the degree of similarity between the plaintiffs and the defendant's marks) |
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Relatedness of goods/services (the proximity of products or services) |
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Actual Confusion |
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Normal Potential Expansion of Business |
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Sophistication of the buyers |
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Strength of the mark |
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Bad faith |
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A review of the records in this controversy allows the consideration of the following factors: resemblance of marks, relatedness of goods/services and normal potential expansion of business, sophistication of buyers, strength of the mark, and bad faith. While actual confusion was also alleged by KECI, the evidence showing this was not submitted to the Court, but only to the CA.[63]Further, the BLA, ODG, and CA made no factual findings regarding the existence of actual confusion here.
Resemblance of marks
Applying the Dominancy Test between KPII'sKOLINand KECI'sKOLIN(Class 9) registration, the Court finds that the marks resemble each other because they both only feature the word "KOLIN". Visually, phonetically, and connotatively, therefore,the marks are identical. Further, as established in theen banc Kolin case,KOLIN(Class 9) is a word mark, which means that the word "KOLIN' is the subject of its protection. Thus, the fact that KPII'sKOLINhas stylized lettering is not enough to distinguish it fromKOLIN(Class 9).
To be sure, the Court is mindful thatKOLIN(Class 9) andKOLINwere also involved in theTaiwan Kolin case, and TKC'sKOLINwas eventually allowed registration for "televisions and DVD players". However, the conclusion of non-resemblance in theTaiwan Kolin casecannot be applied here pursuant tostare decisis.
For one, the finding of non-resemblance in theTaiwan Kolin casedid not result from a comparison ofKOLIN(Class 9) andKOLIN. The relevant discussion in theTaiwan Kolin casemakes it clear that its finding of non-resemblance was arrived at by comparingKOLIN(Class 9)andKOLIN, theothermark involved in theTaiwan Kolin case:
For a clearer perspective and as matter of record, the following image on the left is the trademark applied for by petitioner, while the image juxtaposed to its right is the trademark registered by respondent:KOLINandKOLINare not identical marks. Because the finding of non-resemblance in theTaiwan Kolin casehinged on a comparison ofKOLIN(Class 9) andKOLIN,this conclusion cannot be applied here pursuant tostare decisisbecause the instant case involves a comparison ofKOLIN(Class 9) andKOLIN. Surely, the comparison of one set of marks will not yield the same conclusion when comparing a different set of marks.While both competing marks refer to the word "KOLIN" written in upper case letters and in bold font, the Court at once notes the distinct visual and aural differences between them: Kolin Electronics' mark is italicized and colored blackwhile that of Taiwan Kolin is white in pantone red color background.The differing features between the two, though they may appear minimal, are sufficient to distinguish one brand from the other.[64](Emphasis and underscoring supplied)
Moreover, as stated in theen banc Kolin case, the Holistic Test was used in theTaiwan Kolin caseandthis conflicts with the prevailing method of determining resemblance,viz.:
The inapplicability of theTaiwan Kolin casein the case at bar is thus evident. As correctly pointed out by Associate Justice Leonen, theTaiwan Kolin caseused the Holistic Testin evaluating trademark resemblance. This is improper precedent because the Dominancy Test is what is prescribed under the law.[65](Emphasis and underscoring supplied; italics in the original)As mentioned, the principle ofstare decisisdoes not and should not apply when there is conflict between the precedent and the law. In view of the foregoing, the conclusion of non-resemblance in theTaiwan Kolin casebased on the Holistic Test does not constitutestare decisishere.
Relatedness of goods/services and
normal potential expansion of business
As mentioned, in theen banc Kolin case, the list of factors has been amended to remove one factor. Thus, as it stands, the jurisprudential factors in determining relatedness of goods/services are as follows:
From an examination of the factors above, it can be gleaned that the essential question sought to be answered in analyzing relatedness is whether there is any logical connection between the goods/services involved such that it can reasonably be assumed by consumers to originate from a common source (confusion of business) or that consumers might mistake one for the other (confusion of goods/services), especially if identical/similar marks are used in relation to the goods and services.
Here, KECI'sKOLIN(Class 9) registration and KPII'sKOLINcover the following goods and services:
| vs. |
|
Based on KPII's application, on the other hand, it is apparent that KPII wants to claim exclusivity to useKOLINfor several services. Noteworthy is the fact that theseservices explicitly pertain to goods,such as the "service" ofsellingvarious products, namely "Airconditioning Units, Television Sets, Audio/Video Electronic Equipment, Refrigerators, Electric Fans and Other Electronic Equipment or Product of Similar Nature."
In this regard, the legal relatedness of thegoodscovered byKOLIN(Class 9) and thegoodsinvolved in or associated withKOLIN's covered services is especially significant. If there is a logical connection betweenKOLIN-branded goodsand thegoodsinvolved in or associated with theKOLIN-branded services, consumers will likely assume thatKOLIN-branded goods andKOLIN-branded services originate from the same source.
This phenomenon is illustrated in the case ofMang Inasal Philippines, Inc. v. IFP Manufacturing Corporation.[67]In that case, the Court found that theinasal-flavored "curl snackproducts" (covered by the OK Hotdog Inasal mark) are closely related to the restaurantservices(covered by the Mang Inasal mark),viz.:
Mindful of the foregoing precepts, we hold that the curl snack product for which the registration of the OK Hotdog Inasal mark is sought is related to the restaurant services represented by the Mang Inasal mark, in such a way that may lead to a confusion of business. In holding so, we took into account the specific kind of restaurant business that petitioner is engaged in, the reputation of the petitioner's mark, and the particular type of curls sought to be marketed by the respondent, thus:It is important to emphasize that this is not the first time the Court will determine the relatedness ofKOLIN(Class 9) goods ("Automatic Voltage Regulator, Converter, Recharger, Stereo Booster, AC-DC Regulated Power Supply, Step-Down Transformer, PA Amplified AC-DC") and "Television Sets," which is a good involved in or associated withKOLIN-branded services being claimed by KPII.
First. Petitioner uses the Mang Inasal mark in connection with its restaurant services that is particularly known for its chickeninasal,i.e., grilled chicken doused in a specialinasalmarinade. Theinasalmarinade is different from the typical barbeque marinade and it is what gives the chicken inasal its unique taste and distinct orange color.Inasalrefers to the manner of grilling meat products using aninasalmarinade.
Second. The Mang Inasal mark has been used for petitioner's restaurant business since 2003. The restaurant started in Iloilo but has since expanded its business throughout the country. Currently, the Mang Inasal chain of restaurants has a total of 464 branches scattered throughout the nation's three major islands. It is, thus, fair to say that a sizeable portion of the population is knowledgeable of the Mang Inasal mark.
Third. Respondent, on the other hand, seeks to market under the OK Hotdog Inasal mark curl snack products which it publicizes as having a cheese hotdoginasalflavor.
Accordingly, it is the fact that the underlying goods and services of both marks deal withinasalandinasal-flavored products which ultimately fixes the relations between such goods and services. Given the foregoing circumstancesandthe aforesaid similarity between the marks in controversy, we are convinced that an average buyer who comes across the curls marketed under the OK Hotdog Inasal mark is likely to be confused as to the true source of such curls. To our mind, it is not unlikely that such buyer would be led into the assumption that the curls are of petitioner and that the latter has ventured into snack manufacturing or, if not, that the petitioner has supplied the flavorings for respondent's product. Either way, the reputation of petitioner would be taken advantage of and placed at the mercy of respondent.
All in all, we find that the goods for which the registration of the OK Hotdog Inasal mark is sought are related to the services being represented by the Mang Inasal mark.[68]
In theen banc Kolin case, the goods involved were "Automatic Voltage Regulator, Converter, Recharger, Stereo Booster, AC-DC Regulated Power Supply, Step-Down Transformer, PA Amplified AC-DC" and "Television and DVD player". In finding relatedness between these goods, the Court discussed the applicable jurisprudential factors and the complementarity between them as follows:
The Court finds that the above discussion in theen banc Kolin caseis applicable here insofar as the relatedness between "Automatic Voltage Regulator, Converter, Recharger, Stereo Booster, AC-DC Regulated Power Supply, Step-Down Transformer, PA Amplified AC-DC" and "Television Sets" is concerned. Stated differently,KOLIN-branded goodsare legally related to at least onegoodinvolved or associated in theKOLIN-branded services.
Clearly, the goods x x x are related, and this legal relatedness significantly impacts a finding of likelihood of confusion.
In addition to the factors inMighty Corporation, another ground for finding relatedness of goods/services is their complementarity.
x x x x
x x x [I]t is clear that the goods covered by KECI'sKOLINare complementary to the goods covered by KPII's [mark] and could thus be considered as related. This increases the likelihood that consumers will at least think that the goods come from the same source. In other words, confusion of business will likely arise.[69](Emphasis and italics in in the original)
Because of this legal relatedness, it is not farfetched to imagine that consumers may assume thatKOLIN-branded goods andKOLIN-branded services originate from the same source.
Moreover, to add to the discussion of the jurisprudential factors above, factor (a) —i.e., "the business (and its location) to which the goods belong" — is also applicable here. As seen above, KPII aims to useKOLINon the following service, among others:"business of x x xsellingproducts [such] as x x x audio/video electronic equipment x x x and other electronic equipment or product of similar nature."To be sure, an entity offering this service may reasonably be assumed to also engage in thesellingof "Automatic Voltage Regulator, Converter, Recharger, Stereo Booster, AC-DC Regulated Power Supply, Step-Down Transformer, PA Amplified AC-DC" — the goods covered byKOLIN(Class 9).
In light of the foregoing examination of the applicable jurisprudential factors, the Court agrees with the observation of the BLA "that purchasers of [KECI's] electronic products will relate [to KPII] as [the] service provider, and vice versa."[70]
Pertinently, as admitted by KPII itself in its Answer, the goods "being carried for marketing, sale and distribution in the Philippines by [KPII], and [KECI's] audio and electrical equipment do not actually compete with, butthey complementeach other."[71]Sincecomplementarityis another basis for finding legal relatedness, it cannot be denied thatKOLIN(Class 9) andKOLINcover related goods and services, thereby making confusion likely.
The indubitable relatedness of the goods and services covered by the marks in this dispute thus makes it unnecessary to further discuss how the registration ofKOLINcurtails the normal potential expansion of KECI's business. Since the goods and services are so clearly related, there is no question that the services covered byKOLINfall within the normal expansion of KECI's business since the former is already included in the latter.
Sophistication of buyers
Being a factor concerned with the consumer's attitudes and impressions while purchasing goods or availing services, the sophistication of buyers would depend on the normally prevalent conditions in trade and the attention that purchasers usually give in buying/availing that class of goods/services.
As mentioned above, in theen banc Kolin case, the goods involved were "Automatic Voltage Regulator, Converter, Recharger, Stereo Booster, AC-DC Regulated Power Supply, Step-Down Transformer, PA Amplified AC-PC"and "Televisionand DVD player".
"Normally prevalent conditions in trade" and "the attention that purchasers usually give" are not different here just because KPII now seeks to registerKOLINfor the "service" of selling "Television Sets" in addition to ' other electronic equipment. Thus, the Court finds that the disquisition in the en banc Kolin case on the sophistication of the buyers is also applicable here:
As stated inPhilip Morris, Inc. v. Fortune Tobacco Corporation, "the general impression of the ordinary purchaser,buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods,is the touchstone."Verily, the likelihood of confusion is thus not negated by the sophistication of the buyers in this case. Put simply, even assuming that these sophisticated consumers spend more time examining the goods and the services, the possibility of confusion as to which entity provides these goods and services cannot be gainsaid because of the resemblance of the marks and the relatedness of the goods and services.
The goods x x x are not inexpensive goods and consumers may pay more attention in buying these goods. However, this does not eliminate the possibility of confusion, especially since most consumers likely do not frequently purchase Automatic Voltage Regulators, stereo boosters, TV sets, DVD players, etc. Unless they have jobs or hobbies that allow them to frequently purchase these electronic products, it is not farfetched to suppose that they may only encounter the marks in the marketplace itself once they are about to buy said goods once every five years or so.
Consequently, while consumers may concededly be familiar with these goods to some extent, such familiarity will likely not be an intimate knowledge thereof associated with the frequent and repeated purchase of said goods.
It is not difficult to imagine that ordinary purchasers looking to buy a home entertainment set for their homes would likely not know that the "XYZ"-branded stereo boosters and the "XYZ"-branded televisions they encounter in the store are offered by different companies. If the consumer happens to like the "XYZ" brand for the stereo boosters after seeing it for the first time, said consumer will most likely associate it with the "XYZ" brand for television set and vice versa, especially since these goods are complementary to each other.
Even if sophisticated consumers are making a repeat purchase years after they first bought a "KOLIN" product, confusion is still possible because of the degree of similarity of the subject marks. As mentioned above, KECI'sKOLINmark is a word mark. Stated simply, the goodwill over the products will likely be associated with the "KOLIN" word among consumers' minds, regardless of their sophistication. Thus, these consumers who prefer KECI's products will likely go into stores asking and looking for the "KOLIN" brand, regardless of its stylization or additional figurative features. If they happen to see KPII's "KOLIN"-branded products, they may not readily know that the products come from another source and mistakenly purchase those products thinking that these products are from KECI. Any perceived visual differences between KECI's and KPII's "KOLIN" mark will likely be disregarded, especially considering that it is not unusual for companies to rebrand and overhaul their "brand image", including their logos, every so often.[72](Emphasis and underscoring in the original)
Strength of the plaintiff's mark
The Court has already decided on the strength ofKOLIN(Class 9) in theen banc Kolincase and this conclusion is applicable here since the analysis involves the same mark,viz.:
KECI'sKOLINmark is a fanciful or coined mark. Considering that it is highly distinctive, confusion would be likely if someone else were to be allowed to concurrently use such mark in commerce.[73]Bad faith
Bad faith or fraud is intentionally making false claims to take advantage of another's goodwill thereby causing damage or prejudice to another.[74]As explained inZuneca Pharmaceutical v. Natrapharm, Inc.,[75]"one can have a registration in bad faith only if he applied for the registration of the mark despite knowing that someone else has created, used, or registered that mark."[76]
In theen banc Kolin case, KECI had alleged the issue of KPII's bad faith but there was no explicit ruling on this issue in the decisions of the BLA, ODG, and the CA. Nevertheless, the Court found that the circumstances present therein would lead a reasonable mind to conclude that KPII was in bad faith,viz.:
While KECI had squarely alleged the issue of KPIPs bad faith, there was no explicit finding of bad faith on the part of KPII in the decisions of the [BLA], [ODG], and the CA. After an examination of the records, however, the Court finds that circumstances in this case would lead a reasonable mind to conclude that KPII knew about KECI'sKOLINregistration when it made a trademark application x x x.The Court likewise concludes in this case that there exists relevant evidence on the records and factual findings that a reasonable mind might accept as adequate to support the conclusion that KPII filed the instant application in bad faith.
First, there was a factual finding by the [BLA] that KPII is an instrumentality of TKC and TKC directly participates in the management, supervision, and control of KPII, viz:
x x x x
Second, as found by the CA, KPII was authorized by TKC to use the "KOLIN" mark.
Third, KPII filed a trademark application x x x barely two months after KECI was declared as the owner of theKOLINmark.
Fourth, KECI and KPII may be considered as being in the same line of business and it would have been highly improbable that KPII did not know an existingKOLINmark owned by KECI, especially since it is an affiliate of TKC. Notably, in the case ofBirkenstock Orthopaedie GmbH and Co. KG v. Phil. Shoe Expo Marketing Corp., the Court agreed with the IPO's finding that the party was in bad faith because it was in the same line of business and it was highly improbable for it to not know of the existence of BIRKENSTOCK before it appropriated and registered this "highly distinct" mark.
Thus, there exists relevant evidence and factual findings that a reasonable mind might accept as adequate to support the conclusion that KPII was in bad faith.[77]
First, it has been factually established in theen banc Kolin casethat KPII is an instrumentality of TKC and TKC directly participates in the management, supervision, and control of KPII.
Second, as alleged by KPII, TKC has authorized it to register the "KOLIN" mark:
[TKC] has given its authorization and/or consent to [KPII] to register "KOLIN" in the Philippines for use in business in connection with the marketing, selling and distribution of "all" KOLIN-branded household/home appliances in the Philippines, specifically: Class "9": television sets, air-conditioners; Class "11": refrigerators, electric fans, desk fans, dehumidifiers, microwave ovens, rice cookers, flat irons; and Class "21": water dispensers x x x. Relative to [TKC's] trademark protection in the Philippines for the mark "KOLIN" on its goods or products, they are subject of [TKC's] trademark applications.[78]Third, the records clearly show thatKOLINwas filed by KPII on December 27, 2002, the same day that TKC filed its trademark application forKOLINcovering Class 11 goods.[79]As correctly pointed out by KECI, this was also the day the BLA denied TKC's opposition against KECI's application forKOLIN(Class 9).
Fourth, as stated, KPII seeks to registerKOLINfor services related toKOLIN(Class 9), and it is highly improbable based on the attendant circumstances that KPII did not know that KECI was usingKOLINfor its own business and goods.
All told, using the multifactor test in this dispute strongly indicates that the registration ofKOLINwould cause likelihood of confusion with respect toKOLIN(Class 9). Factors such as the resemblance of the parties' marks, relatedness of the goods/services and normal potential expansion of business, sophistication of buyers, strength of KECI's mark, and KPII's bad faith all indicate the existence of likelihood of confusion if KPII'sKOLINis registered.
[Second aspect of damage]
Likelihood of confusion between KPII's application forKOLIN
and KECI'sKOLIN(Class 35) registration.
As discussed above, the determination of likelihood of confusion necessitates the use of the multifactor test. However, as provided in the2020 Revised Rules of Procedure for Intellectual Property Rights Cases, the existence of likelihood of confusion may be presumed in certain situations:
For ease of reference, the relevant details of the marks being compared in this section are:Rule 18
x x x x
SECTION 4.Presumption of likelihood of confusion. – Likelihood of confusion shall be presumed in case anidentical sign or markis used for identical goods or services. (Emphasis supplied)
| vs. |
|
KOLIN(Class 35) is tiie same mark asKOLIN(Class 9). To recall, in discussing the resemblance betweenKOLINandKOLINabove, the Court finds that, using the Dominancy Test,the marks are identicalvisually, phonetically, and connotatively.
Moreover, a perusal of the coverage ofKOLIN(Class 35) andKOLINwould reveal that they contain an identical service. In particular, both marks cover the "Business of Manufacturing, Importing, Assembling, or Selling x x x Electronic Equipment."
Because an identical mark is being used for identical services here, likelihood of confusion is therefore presumed to exist betweenKOLIN(Class 35) andKOLIN.
[Third aspect of damage]
KPII'sKOLINis identical to KECI's trade name,
KOLINELECTRONICS CO., INC.
KECI argues in its petition that KPII cannot registerKOLINsince it is identical to KECI's trade name, KOLIN ELECTRONICS CO., INC.
On the other hand, KPII insists that, based on the doctrine ofstare decisis, KECI is barred from arguing that KPII'sKOLINmay not be registered based on similarity to KECI's trade name because the following matters have allegedly been ruled with finality in theTaiwan Kolin case:
The Court agrees with KECI's arguments.
There was no pronouncement concerning trade names laid down in theTaiwan Kolin case; thus, the doctrine ofstare decisiscannot bar KECI from raising this issue in the current dispute.
Coffee Partners, Inc. v. San Francisco Coffee & Roastery, Inc.[81]discusses the protection given to trade names and how they are infringed,viz.:
Coming now to the main issue, inProsource International, Inc. v. Horphag Research Management SA, this Court laid down what constitutes infringement of an unregistered trade name, thus:Unlike trademarks or service marks which require registration in good faith to acquire ownership under the IP Code,[83]trade names need not be registered to be protected. Here, based on the records showing the CA's pronouncements in theKECI ownership case, it appears that KECI — or at least its predecessor, Kolin Electronics Industrial Supply[84]— was the first user of "KOLIN" not only as part of its trade name but also as a mark,viz.:(1) The trademark being infringed is registered in the [IPO];however, in infringement of trade name, the same need not be registered;Clearly,a trade name need not be registered with the IPO before an infringement suit may be filed by its owner against the owner of an infringing trademark. All that is required is that the trade name is previously used in trade or commerce in the Philippines.
(2) The trademark ortrade name is reproduced, counterfeited, copicd, or colorably imitated by the infringer;
(3) The infringing mark ortrade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or the infringing mark or trade name is applied to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services;
(4)The use or application of the infringing mark or trade name is likely to cause confusion or mistakeor to deceive purchasers or others as to the goods or services themselves or as to the source or origin of such goods or services or the identity of such business; and
(5) It iswithout the consent of thetrademark or trade name owner or the assignee thereof. x x x
Section 22 of [the Trademark Law], as amended, required registration of a trade name as a condition for the institution of an infringement suit, to wit:"Sec. 22.Infringement, what constitutes. — Any person who shall use,without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of any registered mark or trade name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy, or colorably imitate any such mark or trade name and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services,shall be liable to a civil action by the registrantfor any or all of the remedies herein provided." x x xHowever,[the IP Code], which took effect on 1 January 1998, has dispensed with the registration requirement. Section 165.2 of [the IP Code] categorically states that trade names shall be protected, even prior to or without registration with the IPO, against any unlawful act including any subsequent use of the trade name by a third party, whether as a trade name or a trademark likely to mislead the public.Thus:"SEC. 165.2 (a)Notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties.
(b) In particular,any subsequent use of a trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed unlawful." x x x[82](Additional emphasis supplied; italics in the original)
Undeniably, [KECI's] predecessor Kolin Electronics [Industrial Supply] was then issued by the Department of Trade & Industry withcertificates of registration of business nameusing the subject mark [("KOLIN")] in its business operations in the Philippines since it started using the same in February, 1989. x x x[85](Emphasis supplied)Clearly, KECI has the right to oppose any application based on the likely "damage" it will suffer in relation to its trade name if the opposed mark is registered. Since KPII'sKOLINfeatures the first word in KECI's trade name, confusion is likely among consumers.
[Fourth aspect of damage]
Adverse effect ofKOLINregistration to KECI's Trademark
Law registration forKOLIN(Class 9)
Section 236 of the IP Code protects the rights acquired in good faith prior to the effective date of the said law,viz.:
SECTION 236.Preservation of Existing Rights. — Nothing herein shall adversely affect the rights on the enforcement of rights in patents, utility models, industrial designs, marks and works, acquired in good faith prior to the effective date of this Act. (n)Thus, if an application for a mark under the IP Code adversely affects existing rights, it cannot be registered pursuant to Section 122 of the IP Code, which reads:
SECTION 122.How Marks are Acquired. — The rights in a mark shall be acquired through registrationmade validly in accordance with the provisions of this law.(Sec. 2-A, R.A. No. 166a) (Emphasis supplied)In theen banc Kolin case, the Court discussed the applicability of Section 236 of the IP Code in relation to KECI'sKOLIN(Class 9) mark, which was registered under the Trademark Law. Since this is one of the marks involved in this controversy, the Court finds that the following disquisition therein is likewise applicable here:
It must also be stressed that KECI was already declared as the owner of theKOLIN[(Class 9)] mark under the Trademark Law. Section 236 of the IP Code states that nothing in the IP Code — which, as mentioned, logically includes registrations made pursuant thereto — shall adversely affect the rights of the enforcement of marks acquired in good faith prior to the effective date of said law.To reiterate, opposers may allege and prove any and all aspects of damage in an opposition. If any single aspect of damage is deemed to be meritorious, this is already sufficient basis to reject an application. In the case at bar, KECI is alleging several aspects of damage that will be caused by the registration ofKOLIN. As explained above, the Court finds that the following aspects of damage alleged by KECI areallmeritorious:
As seen above, the existence of likelihood of confusion is already considered as damage that would be sufficient to sustain the opposition and rejection of KPII's trademark application. More than that, however, the Court is likewise cognizant that, by granting this registration, KPII would acquire exclusive rights over the stylized version of KOLIN x x x for a range of goods/services x x x. Owing to the peculiar circumstances of this case, this willeffectively amount to a curtailment of KECI's right to freely use and enforce theKOLINword mark, or any stylized version thereof, for its own range of goods/services, especially against KPII, regardless of the existence of actual confusion. Thus, based on Section 122 vis-à-vis Section 236 of the IP Code, the Court cannot give due course to KPII's trademark application x x x.[86](Additional emphasis supplied)***
- Likelihood of confusion between KPII's application forKOLINand KECI'sKOLIN(Class 9) registration.
- Likelihood of confusion between KPII's application forKOLINand KECI'sKOLIN(Class 35) registration.
- KPII'sKOLINis identical to KECI's trade name, KOLIN ELECTRONICS CO., INC.
- Adverse effect of theKOLINregistration to KECI's Trademark Law registration forKOLIN(Class 9).
Accordingly, Trademark Application Serial No. 4-2002-011003 forKOLINfiled by Kolin Philippines International, Inc. under Class 35 for the "Business of Manufacturing, Importing, Assembling, Selling Products As: Airconditioning Units, Television Sets, Audio/Video Electronic Equipment, Refrigerators, Electric Fans and Other Electronic Equipment or Product of Similar Nature" isREJECTED.
SO ORDERED.
Gesmundo, C.J., (Chairperson), Hernando,*Carandang,andZalameda, JJ.,concur.
*Designated additional member per Raffle dated July 5, 2021 vice Associate Justice Samuel H. Gaerlan.
[1]Rollo, pp. 10-30.
[2]Id. at 34-44. Penned by Associate Justice Ma. Luisa C. Quijano-Padilla, with Associate Justices Normandie B. Pizarro and Samuel H. Gaerlan (now a Member of this Court) concurring.
[3]Id. at 46-47.
[4]G.R. No. 228165, February 9, 2021.
[5]N.B.: KECI's mark is hereinafter referred to asKOLIN(Class 9) in this Decision to distinguish it from KECI's other registered markKOLINfor Class 35, which is also involved in this controversy.
[6]757 Phil. 326 (2015).
[7]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 2-9.
[8]See id. at 10, 25.
[9]Seerollo, p. 35. See also 4/2002/11003 – KOLIN entry in Global Brand Database, Intellectual Property Office of the Philippines, accessed at <https://www3.wipo.int/branddb/ph/en/showData.jsp?ID=PHTM.42002011003>.
[10]See id. at 140.
[11]Id. at 138-142.
[12]Id. at 141.
[13]Id. at 140.
[14]Id. at 141-142.
[15]Id. at 142.
[16]Id.
[17]Id. at 142-144.
[18]Id. at 144.
[19]Id. at 146.
[20]Id. at 147-148.
[21]Id. at 147.
[22]Id. at 192-193; Annex "O" of the Petition, Certified True Copy of Certificate of Registration of 4-2007-005421.
[23]Id. at 193.
[24]Id. at 138-156.
[25]AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES, otherwise known as the "INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES," approved on June 6, 1997.
[26]Rollo, pp. 152-153.
[27]Id. at 154-155.
[28]Id. at 164.
[29]Id.
[30]Id. at 166-167.
[31]SECTION 236.Preservation of Existing Rights. – Nothing herein shall adversely affect the rights on the enforcement of rights in patents, utility models, industrial designs, marks and works, acquired in good faith prior to the effective date of this Act.
[32]Seerollo, p. 166.
[33]Id.
[34]Id.
[35]Id. at 158-169; IPC No. 14-2006-00064.
[36]N.B.: The Court's Decision in theTaiwan Kolin casewas not yet promulgated at the time and the prevailing CA Decision in CA-G.R. SP No. 122565 was in favor of KECI.
[37]Rollo, pp. 167-169.
[38]Id. at 37.
[39]Supra note 2.
[40]Id. at 37-43.
[41]Supra note 3.
[42]Id. at 16-18.
[43]Id. at 18-21.
[44]N.B.: The Petition erroneously indicated that the instant application was made by TKC (Seerollo, p. 21)
[45]Rollo, pp. 21-24.
[46]Id. at 221-236.
[47]Id. at 221.
[48]Id. at 228.
[49]Id. at 233.
[50]Id. at 240-250.
[51]Id. at 240, 243.
[52]Id. at 43.
[53]Taiwan Kolin Corporation, Ltd. v. Kolin Electronics Co., Inc., supra note 9, at 340.
[54]Rollo, p. 16.
[55]Chinese Young Men's Christian Association of the Philippine Islands v. Remington Steel Corporation, G.R. No. 159422, March 28, 2008, 550 SCRA 180, 197.
[56]Id. at 197-198. Citations omitted.
[57]79 Phil. 249 (1947).
[58]Id. at 257.
[59]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 18. Citation omitted.
[60]A.M. No. 10-3-10-SC, October 18, 2011.
[61]A.M. No. 10-3-10-SC, October 6, 2020. Rule 18, Sec. 5 states:
SEC. 5.Likelihood of confusion in other cases. — In determining whether one trademark is confusingly similar to or is a colorable imitation of another, the court must consider the general impression of the ordinary purchaser, buying under the normally prevalent conditions in trade, and giving the attention such purchasers usually give in buying that class of goods. Visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace must be taken into account. Where there are both similarities and differences in the marks, these must be weighed against one another to determine which predominates.[62]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 19-20. Citations omitted.
In determining likelihood of confusion between marks used on non-identical goods or services, several factors may be taken into account, such as, but not limited to:
a) the strength of plaintiffs mark;
b) the degree of similarity between the plaintiffs and the defendant's marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.
"Colorable imitation" denotes such a close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, as to cause him or her to purchase the one supposing it to be the other.
Absolute certainty of confusion or even actual confusion is not required to accord protection to trademarks already registered with the IPO. (Emphasis supplied; italics in the original)
[63]N.B.: KECI alleges in its Petition (seerollo, pp. 23-24) and Reply dated August 30, 2017 that there is evidence of actual confusion (see id. at 245-246). This is also reflected in summaries of KECI's arguments as stated in the decisions of the BLA and ODG. However, as indicated in footnotes in the Petition and Reply, these were only submitted to the CA ("Annexes "I and "J" to "J-71" of Petitioner's Comment"). Notably, the BLA, ODG, and the CA did not rule on the existence of actual confusion. KECI did not submit any evidence regarding its allegation of actual confusion to the Court.
[64]Taiwan Kolin Corp., Ltd v. Kolin Electronics Co., Inc., supra note 9, at 342. Citations omitted.
[65]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 23. Citation omitted.
[66]Id. at 26.
[67]G.R. No. 221717, June 19, 2017, 827 SCRA 461.
[68]Id. at 478-479. Citations omitted.
[69]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 28-29.
[70]Rollo, p. 154.
[71]Id at 146. Emphasis supplied.
[72]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 31-32. Citations omitted.
[73]Id. at 33.
[74]Zuneca Pharmaceutical v. Natrapharm, Inc., G.R. No. 211850, September 8, 2020, p. 29.
[75]Id.
[76]Id. at 32.
[77]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 34-35. Citations omitted.
[78]Rollo, pp. 142-143.
[79]Trademark Application No. 4-2002-011001, see id. at 143.
[80]Rollo, p. 233.
[81]G.R. No. 169504, March 3, 2010, 614 SCRA 113.
[82]Id. at 122-123. Citations omitted.
[83]SeeZuneca Pharmaceutical v. Natrapharm, Inc., supra note 81.
[84]SeeKolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 2 and 4.
[85]Rollo, p. 93. Citation omitted.
[86]Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., supra note 4, at 35-36.