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In a 38-page decision published last 15 June 2021, the Supreme Court (SC)of the Philippines, sitting en banc, declared the abandonment of the so-called holistic test in determining the confusing similarity of contending trademarks.

The kolin mark above by Kolin Philippines International, Inc., was the subject of the Supreme Court’s recent landmark decision on trademarks.

The landmark decision involves the long-standing rivalry of two “KOLIN” marks – one by Kolin Philippines International, Inc. (KPII) which filed an application for its “kolin” mark for televisions and DVD players; the other by Kolin Electronics Co., Inc. (KECI) who filed an opposition to KPII’s application based on KECI’s previously registered “KOLIN” mark for AVR, converter, stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-DC.

The Intellectual Property Office of the Philippines (IPOPHL), through its Director General, sustained the opposition and rejected the application for registration of KPII’s “kolin” mark. KPII appealed the IPOPHL’s decision to the Court of Appeals who reversed the ruling and allowed the registration of KPII’s “kolin” mark. Thereafter, the case was appealed, this time by KECI, to the Supreme Court of the Philippines.

In ruling in favor of KECI, the SC summarized its discussion, to wit: (1) there is resemblance between KECI’s “KOLIN“ and KPII’s “kolin” marks; (2) the goods covered by KECI’s “KOLIN“ are related to the goods covered by KPII’s “kolin”; (3) there is evidence of actual confusion between the two marks; (4) the goods covered by KPII’s “kolin” fall within the normal potential expansion of business of KECI; (5) sophistication of buyers is not enough to eliminate confusion; (6) KPII’s adoption of KECI’s coined and fanciful mark would greatly contribute to likelihood of confusion; and (7) KPII applied for “kolin” in bad faith.

More importantly, the SC abandoned the holistic test in determining resemblance to cause the likelihood of confusion between contending marks. “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 Holistic Test in determining resemblance of marks has been abandoned,” the SC stated in the landmark decision. The SC also stressed that the test of dominancy is also now explicitly incorporated into law under Section 155.1 of the Intellectual Property Code.

To the uninitiated, it is well to note that SC decisions previously used two tests in determining the confusing similarity of marks – the holistic test and the dominancy test.  The dominancy test considers the similarity of the prevalent or dominant features of the competing trademarks that might cause confusion, mistake, and deception in the mind of the purchasing public. More consideration is given to the aural and visual impressions created by the marks on the buyers of goods, giving little weight to factors like process, quality, sales outlets, and market segments. On the other hand, the holistic test considers the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. The focus is not only on the predominant words but also on the other features appearing on the labels.

Eventually, applying the dominancy test, the SC ruled that 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, stated the Court.

Read the full text of the decision here: https://sc.judiciary.gov.ph/19346/