Jun 17, 2021 @ 11:36

SC abandons ‘holistic test’ on trademark resemblance, finds ‘kolin’ similar to ‘KOLIN’

The Supreme Court (SC) has abandoned the “holistic test” in evaluating trademark resemblance and emphasized the adoption of the “dominancy test.” In a landmark decision, it rejected the application of Kolin Philippines International, Inc. (KPII), to trademark “kolin”—with a lowercase letter “k” and an italicized orange letter “i”—for its television sets and DVD players because of its similarity to the “KOLIN” mark owned by Kolin Electronics Co., Inc. (KECI).

In a 38-page decision on G.R. No. 228165, the SC en banc unanimously granted the petition for review of KECI, to set aside the April 29, 2016 decision of the Court of Appeals (CA) in favor of KPII’s application for the registration of the “kolin” mark. It reinstated the November 23, 2011 decision of the Intellectual Property Office-Director General (IPO-DG) siding with the opposition of KECI.

Applying the “dominancy test,” the SC stressed that KPII’s “kolin” mark sounded “exactly the same” as KECI’s “KOLIN” mark, even if the former was stylized differently.

The “dominancy test” focuses on the similarity of the prevalent or main features of the competing trademarks which might cause confusion or deception. In other words, infringement already takes place when the use of the marks is likely to cause confusion or mistake in the mind of the public or deceive purchasers. Similarity in just how the marks look and sound would be enough.

Meanwhile, the “holistic test” requires that the entirety of the marks be considered, not just the main features. The minor features would have to be looked at too, before there can be infringement. This would assume that an observer would look at marks with a discerning eye.

The SC noted that Section 155.1 of the Intellectual Property Code explicitly incorporated the “dominancy test,” by defining infringement as the “colorable imitation of a registered mark… or a dominant feature thereof.”

“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,” read the decision penned by Associate Justice Alfredo Benjamin Caguioa.

In the case of KPII’s “kolin” mark, the SC stressed that it resembled KECI’s “KOLIN” mark because the word “KOLIN” was the “prevalent feature of both marks.”

“Surely, the manner of pronouncing the word ‘KOLIN’ does not change just because KPII’s mark is in lowercase and contains an italicized orange letter ‘i.’ In terms of connotation and overall impression, there seems to be no difference between the two marks,” read the decision.

It added that the goods covered by the former were related to those of the latter (automatic voltage, regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, PA amplified AC-DC). KPII’s television sets and DVD players would fall within the normal potential expansion of the business of KECI.

The SC noted that there was already evidence of actual confusion between the two marks as shown by consumer complaints about KPII’s appliances that were sent to KECI. It added that the sophistication of buyers would not be enough to eliminate confusion.

The SC also found bad faith on KPII’s part, especially as it filed its application to register “kolin” barely two months after KECI was declared the owner of the “KOLIN” mark and that the two companies were in the same line of business.

It held that allowing KPII to register the “kolin” mark would “effectively amount to a curtailment of KECI’s right to freely use and enforce the KOLIN word mark, or any stylized version thereof, for its own range of goods/service.”

The SC disagreed with the CA that the former’s March 25, 2015 decision on “Taiwan Kolin Corporation, Ltd. versus Kolin Electronics Co., Inc. (G.R. No. 209843)” amounted to res judicata, or a case or controversy already decided with finality.

It noted that the case of Taiwan Kolin, KPII’s parent company, only ruled that its trademark application for “KOLIN” should be given due course. Meanwhile, KPII’s trademark application for “kolin” was a new application entirely.

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