May 30, 2017

The Philippine Supreme Court has handed down to giant Dutch company, Koninklijke Philips Electronics N.V.  (KPENV), a win in the latter’s long battle to keep a local businessman from getting a registration for the trademark PHILITES and P Device.

PHILIPS has been a leading brand in lighting products and has had presence in the Philippines for many years.  In 2006, a business establishment operating as Philites Electronic and Lighting Products (PELP) applied to register PHILITES & P Device in connection with fluorescent bulbs and related products under Class 11.  KPENV opposed claiming that PHILITES is barred from registration under Section 123.1(d) of the IP Code because it is confusingly similar to PHILIPS, a trademark that as been previously registered and used in the Philippines. KPENV claimed that PHILIPS has been officially declared as a well-known trademark and is therefore protected against the copying of any parts or elements in the mark.

KPENV has separately filed a criminal complaint for trademark infringement and unfair competition against the same applicant.

To prove that the registration of PHILITES would confuse the consumers and consequently damage KPENV, KPENV presented evidence proving that while the drawing page of the opposed application depicted only the letter P Device and the word PHILITES, the applicant actually used the PHILITES trademark on its packaging and wrappers which are nearly identical to the packaging of PHILIPS.

In its opposition, KPENV documented the similarities of the PHILITES packaging to that of the PHILIPS light bulbs, pointing out the use of identical font and letter style, design, color and unique arrangement of different elements in the packaging of the competing products.  The uncanny similarities in the product packaging, according to KPENV, will not only lead to consumer confusion and deception, but also do great damage to KPENV.

The Supreme Court framed the issues thus – 1) whether PHILIPS is well-known and is the prior registrant in the Philippines, and 2) whether PHILITES and P Device is considered identical or confusingly similar to PHILIPS – and ruled in favor of KPENV.

Citing the ruling in an earlier Supreme Court case, Philips Export B.V. v. CA, Chief Justice Sereno confirmed that PHILIPS is registered and well-known internationally and in the Philippines.

As to the issue of confusing similarity, the Court applied both the dominancy and holistic tests. The dominancy test, as defined in the earlier case of Sketchers USA v. Inter Pacific Industrial Trading Corp., focuses on the prevalent or dominant features of the competing trademarks to determine the likelihood of confusion in the mind of the purchasing public.  This test requires looking at the mark submitted with the application, and determining how its visual and aural impressions can affect the minds of the buyers.  In applying this test, the Court agreed with the Court of Appeals’ finding that the opposed mark’s first five letters, “P- H – I – L – I”, which were taken from “PHILIPS”, “visually catch the attention of the consuming public” thereby creating confusion and deception.

The Supreme Court also said that the confusing similarity becomes prominent when one compares the vast discrepancy in the manner in which the applicant used PHILITES on its product packaging and how PHILITES is presented in the application’s drawing page.

To strengthen its findings, the Court also applied the holistic test. Unlike the dominancy test, the holistic test entails a consideration of the entirety of the mark as applied to the product, including the labels and packaging of the goods.  Affirming the Court of Appeals’ conclusion, it pronounced that the differences in the parties’ packaging is negligible, and the marks as depicted in the actual packaging shows “a strong similitude and likeness between the two trademarks that will likely cause deception and confusion to the purchasing public.”

The Court’s ratio in this case reveals that the two tests are used with equal weight and prominence to arrive at the conclusion that PHILITES and PHILIPS are confusingly similar.  While in earlier cases, the Supreme Court found it sufficient to use only one of the two tests, the Chief Justice welded the two tests in a perfect logical fashion.

Notably, in finding confusing similarity between the marks, the Court used the dominancy test by comparing the letters used in both marks. “PHILI,” which is present in both marks, played as the dominant or prevalent portion of the marks. It is “PHILI”, according to the Court, which will catch the attention of the purchasing public who normally have little time to consider the phonetic sounds of the marks.

At the same time, the Court also used the holistic test by looking at how the marks are actually presented on the product packaging. Considering the product packaging or wrappers and the manner by the trademarks are displayed, It found that PHILITES  device has an “uncanny resemblance” to PHILIPS, and such will cause confusion to the “ordinary purchase with a modicum of ‘intelligence’.

There is no mistake that the holistic test was intended to be used with equal importance, especially in cases wherein an applicant, like the owner of PHILITES & P device, conceals his/her malicious intention to imitate a well-known mark by submitting a seemingly different mark in its application, but later on actually uses or displays its mark on a packaging that closely resembles the overall presentation of a registered mark, like PHILIPS.