UPDATES ON TRADEMARK LAW AND PRACTICE IN THE PHILPPINES

Transcription

1 UPDATES ON TRADEMARK LAW AND PRACTICE IN THE PHILPPINES A. LEGISLATIVE UPDATES (1) Statutes Our legislature has not passed any laws relating to trademark law and practice since the last update. No bills relating to trademarks were filed under the 14 th Congress which concluded its session on May 2010, and no bills relating to trademarks have been filed under the 15 th Congress which commenced its session only last July (2) Administrative Regulations a. Proposed Rules of Procedure for IPO Mediation Proceedings The Intellectual Property Office ( IPO ) is set to implement mandatory mediation in proceedings involving opposition to the application for registration of trademarks, cancellation of trademark registrations, violation of intellectual property rights and unfair competition, among others, filed before the said office. Under the proposed IPO Rules of Mediation, all cases filed before the Bureau of Legal Affairs or the Documentation, Information and Technology Transfer Bureau as well as appeals made before the Office of the Director General shall be referred to the IPO Mediation Office within a period of three (3) days from filing of the case. Failure of the party who initiated the case to appear for mediation is a ground for the dismissal of the case. Meanwhile, if the respondent fails to appear, he/she may be declared in default. If the mediation is successful, the mediator shall, within five (5) days from the parties submission of their compromise agreement, refer the agreement to the head of the originating office. Within three (3) days from receipt, the originating office shall approve the compromise agreement, unless the same is found to be contrary to law, morals, or good customs. An approved Compromise Agreement shall have the effect of a decision of judgment on the case and shall be enforced in accordance with the pertinent rules of the IPO and the Rules of Court. If, however, no settlement was reached within a period of sixty (60) days from referral of the case to the Mediation Office, the mediator shall declare the mediation unsuccessful and forthwith terminate the proceedings by issuing a Notice of Non-Settlement of Dispute. Thereafter, the parties shall proceed with pre-trial proper. Finally, the proposed rules provide that any admission and statement made during the mediation shall be inadmissible in a proceeding, unless otherwise specifically provided by law.

2 B. UPDATES ON LEGAL JURISPRUDENCE (1) Supreme Court Decisions a. Dermaline, Inc. v. Myra Pharmaceuticals, Inc. G.R. No , August 16, 2010 The Dominancy Test Must Be Applied in Determining Whether Competing Marks are Confusingly Similar In this case, the Court denied registration of the mark "DERMALINE DERMALINE, INC." for various skin treatments on the ground that said mark is confusingly similar to the prior registered mark "DERMALIN" as used on pharmaceutical products. The Court upheld the opposer s argument that despite the applicant s attempts to differentiate its applied mark from the prior mark, the dominant feature thereof remains to be the word "DERMALINE," which is practically identical to the prior mark both in sound and appearance. In so doing, the Court rejected the applicant s arguments that relied on the Holistic Test by pointing out differences in the entirety of the two marks in relation to the goods as shown by other features appearing in the labels of the conflicting marks. The Court declared that likelihood of confusion between marks should be determined using the Dominancy Test, that is, by comparing the prevalent features of the competing trademarks that might cause confusion or deception, as incorporated in Section 155 of the Intellectual Property Code ( IP Code ). In this case, the Court noted that (i) the dominant elements of the marks are spelled almost in the same way, and that (ii) they are pronounced practically in the same manner in three (3) syllables. While there are no set rules that can be deduced as to what constitutes a dominant feature with respect to trademarks applied for registration, usually, what are taken into account are signs, color, design, peculiar shape or name, or some special, easily remembered earmarks of the brand that readily attracts and catches the attention of the ordinary consumer. b. Coffee Partners, Inc. vs. San Francisco Coffee & Roastery, Inc. G.R. No , March 3, 2010 Prior IPO Registration is Not Required for Trade Name Infringement In this case, the Supreme Court reiterated its 2009 ruling that the local prior registration of a trade name is not a requisite for its owner to hold an unauthorized user liable for infringement. The Court emphasized that, unlike in the case of trademark infringement which requires the prior registration with the Intellectual Property Office ( IPO ) of the trademark or service mark being enforced, all that is required in a case of trade name infringement is that the trade name being enforced was previously used in trade or commerce in the Philippines. The foregoing doctrine finds basis under Section of the IP Code, which provides that, 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; and that any subsequent use of a trade name by a third party,

3 whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, that is likely to mislead the public, is deemed unlawful. Under the old trademark law, Republic Act No. 166 the registration of a trade name was required as a condition for the institution of an infringement suit. In Prosource International, Inc. vs. Horphag Research Management SA (G.R. No ), which was promulgated late last year, the Court laid down the elements of infringement of an unregistered trade name: (1) the trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer; (2) the infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or 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; (3) the use or application of the infringing mark or trade name is likely to cause confusion or mistake or 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 (4) the use of the mark or trade name is without the consent of the trade name owner or the assignee thereof. In this regard, the Court also clarified that it is the likelihood of confusion that is the gravamen of trade name infringement. c. Tanduay Distillers, Inc. vs. Ginebra San Miguel G.R. No , August 14, 2009 A Generic Term is Incapable of Appropriation While a Descriptive Term may be Appropriated if it Acquires a Secondary Meaning in Respect of the Goods The decision in this case involves a prayer for injunctive relief arising from a complaint for trademark infringement, unfair competition and damages, filed by the manufacturer of the leading prior gin brand Ginebra San Miguel against the manufacturer of another gin product bearing the mark Ginebra Kapitan with the representation of a revolutionary captain on horseback, on the ground that the marks are confusingly similar because they both include the word "Ginebra" which is a dominant feature of the prior mark. In denying injunctive relief to the prior user, the Court held that the prior user s right to prevent other business entities from using the word "Ginebra" is not evident. A determination must be made in the lower court as to whether "Ginebra" is a generic word that as a matter of law cannot be appropriated, or a descriptive word that may be appropriated based on the fact that it has acquired a secondary meaning for gin products, so as to enable the prior user to prohibit the use of the word "Ginebra" by other gin manufacturers or sellers. Significantly, the prior user s application for registration of the Ginebra for use on its gin products was denied on the ground that it is the Spanish translation of the generic term for gin.

4 In rejecting the application, the trademark office emphasized that words or phrases which have been in common use and which indicate the character, kind, quality and composition of the thing, may not be appropriated by any one to his exclusive use. Therefore, to allow an entity to register a generic term would give the registrant the exclusive right to use the generic term to the prejudice of others who are engaged in producing or manufacturing a similar class of products. (2) Decisions of the Director General of the Intellectual Property Office a. T.C. Pharmaceutical Industries Co., Ltd. v. Osborne Y Compania S.A. Appeal No dated September 21, 2010 Translation of a Prior Well Known Mark Cannot be Registered in Respect of the Goods Covered by the Well Known Mark In this opposition action, the IPO denied the application for the registration of TORO for being a Spanish translation of the word bull and as such, confusingly similar with the prior registered marks RED BULL and DOUBLE BULL DEVICE for use on similar goods. The IPO also sustained the argument of the prior registrant that its marks are well known marks. The IPO held that TORO cannot be registered for the same or similar goods covered by the prior marks RED BULL and DOUBLE BULL DEVICE because TORO constitutes a translation of the well-known marks. The words and pictorial representations in the RED BULL and DOUBLE BULL DEVICE marks connote the same idea or concept, which is the male cow or cattle. TORO is the Spanish word or term for bull. Closeness in meaning can itself substantiate a claim of similarity of trademarks (citing AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 350 [9thCir. 1979]) However, the IPO declared that the mark TORO may be allowed registration for goods other than those covered by the well-known mark. b. PT Nutrifood Indonesia vs. Director of Trademarks Appeal No , December 22, 2009) The Dominancy Test Must Be Applied in Determining Whether Competing Marks are Confusingly Similar In this case, the IPO denied the application for registration of TROPICANA SLIM for use on low calorie artificial sweeteners and dietetic products and beverages in the form of high protein and calcium, and low fat milk powder falling for being confusingly similar to prior registered marks including the word TROPICANA in respect of similar products, including fruit juices. The trademark office found that the word TROPICANA is the dominant feature of applicant s mark and the cited prior marks and that the minor visual differences between the marks are not sufficient to overcome a likelihood of confusion as to the source or origin of goods. It was further held that confusion of source is even more likely since the marks refer to closely related goods and that a registered trademark holder enjoys protection in product and market areas that may result from the normal potential expansion of one s business. Further, while the applicant s mark includes the word SLIM, the same is not sufficient to distinguish the mark from the prior

5 registered marks because the word TROPICANA is present in all the cited prior marks either as the sole or the dominant feature therein. Thus, it is likely that the mark TROPICANA SLIM may be seen merely as a variation of the prior marks. c. La Tondena Distillers, Inc. vs. Director of Trademarks Appeal No , December 7, 2009 A Translation of a Generic Term is Incapable of Appropriation In this case, the IPO rejected the application for registration of the mark GINEBRA in respect of gin products for being a Spanish word which when translated to English means gin and as such, is a generic term that may not be exclusively appropriated. It held that under the Doctrine of Foreign Equivalents, a mark that is generic in a foreign language is still unregistrable even if the language is not predominantly spoken in the country where registration is sought. The trademark office initially rejected the applicant s arguments that Ginebra has already been associated or identified by ordinary Filipino gin consumers with the applicant and thus, has acquired a secondary meaning in respect of the goods; and that the Doctrine of Foreign Equivalents admits of exceptions such as where no significant portion of the Philippine market is familiar with the term Ginebra as being a Spanish equivalent for gin. On appeal, the IPO affirmed the decision of the trademark office and emphasized that words or phrases which have been in common use and which indicate the character, kind, quality and composition of the thing, may not be appropriated by any one to his exclusive use. It was further noted that generic words are considered to be in the public domain and free for all to use. It also held that the Doctrine of Secondary Meaning is only applicable on descriptive marks and thus, cannot apply to Ginebra which is a generic word for gin products. d. Mars UK Ltd. v. Estrella P. Fernandez Appeal No dated December 03, 2009 Goods and Services do not Need to be Sold in the Philippines nor Advertised in Local Print or Broadcast Media for the Mark to be Considered as Well Known in the Philippines In this case, the IPO rejected the application for FLAVIA for coffee, tea and other similar beverages on that ground that it is identical to the opposer s well-known mark, thus is protected under Sec (e) of the IP Code. The applicant s argument that the opposer s mark was never used and marketed in the Philippines and as such cannot be considered a well-known mark under the IP Code was rejected on the ground that goods and services need not be sold or advertised in Philippine print or broadcast media to be known in the Philippines, suggesting that broadcast on electronic communications medium, particularly on the Internet, and other technological media reaching Philippine buyers, as sufficient to establish knowledge of the mark in the Philippines. In this regard, the IPO relied upon and cited the case of Mirpuri v. Court of Appeals, GR No , Nov. 19, 1999, which held that: In the last half century, the unparalleled growth of industry and the rapid development of communications technology have enabled trademarks, tradenames and other distinctive signs of

6 a product to penetrate regions where the owner does not actually manufacture or sell the product itself. Goodwill is no longer confined to the territory of actual market penetration; it extends to zones where the marked article has been fixed in the public mind through advertising. Whether in the print, broadcast or electronic communications medium, particularly on the Internet, advertising has paved the way for growth and expansion of the product by creating and earning a reputation that crosses over borders, virtually turning the whole world into one vast marketplace. e. Albert M.G. Garcia vs. Director of Trademarks Appeal No , October 21, 2009 A Descriptive Term Cannot be Registered as a Trademark In this case, the trademark office rejected the application for registration of the mark GARGOL MOUTH FLUSH & DEVICE in respect of mouthwashes on the ground that the word GARGOL is descriptive of the goods, dismissing the applicant s assertion that the mark is fanciful or a coined phrase that may be legally appropriated. It held that the word GARGOL is a play on the word GARGLE, which is descriptive of the intended purpose of the goods, i.e., for gargling or to cleanse or disinfect the mouth. Moreover, it held that the words MOUTH FLUSH are pronounced identically as the descriptive term mouthwash and connote the same function which is to cleanse the mouth of residues. The IPO, in sustaining the rejection, declared that a term is descriptive, and therefore, invalid as a trademark if, as understood in its normal and natural sense, it conveys the characteristics, functions, qualities or ingredients of a product to one who has never seen it and does not know what it is, or if it conveys an immediate idea of the ingredients, qualities or characteristics of the goods, or if it clearly denotes what goods or services are provided in such a way that the consumer does not have to exercise powers of perception or imagination. It found that in this case, a sudden glance at the subject mark immediately gives the impression that the product is for mouthwash and that it is obvious that GARGOL connotes the meaning of the word gargle.