Trademark tests; confusion of goods; confusion of business

In determining likelihood of confusion, case law has developed two (2) tests, the Dominancy Test and the Holistic or Totality Test. (Note: Please remember that recent pieces of jurisprudence tend toward the dominancy test. See Kolin Electronics Co., Inc. Vs. Kolin Philippines International, Inc., G.R. No. 228165, February 9, 2021.)The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception.[1] It is applied when the trademark sought to be registered contains the main, essential and dominant features of the earlier registered trademark, and confusion or deception is likely to result. Duplication or imitation is not even required; neither is it necessary that the label of the applied mark for registration should suggest an effort to imitate. The important issue is whether the use of the marks involved would likely cause confusion or mistake in the mind of or deceive the ordinary purchaser, or one who is accustomed to buy, and therefore to some extent familiar with, the goods in question.[2] Given greater consideration are the aural and visual impressions created by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets, and market segments.[3] The test of dominancy is now explicitly incorporated into law in Section 155.1 of R.A. No. 8293 (which is the reason for the abandonment of the Holistic Test) which provides--
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; (emphasis supplied)

On the other hand, the Holistic Test entails a consideration of the entirety of the marks as applied to the products, including labels and packaging, in determining confusing similarity. The scrutinizing eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels so that a conclusion may be drawn as to whether one is confusingly similar to the other.[4] It must be emphasized that use of the Holistic Test has been abandoned. (G.R. No. 228165)

Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2) types of confusion, viz: (1) confusion of goods (product confusion), where the ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other; and (2) confusion of business (source or origin confusion), where, although the goods of the parties are different, the product, the mark of which registration is applied for by one party, is such as might reasonably be assumed to originate with the registrant of an earlier product, and the public would then be deceived either into that belief or into the belief that there is some connection between the two parties, though inexistent.[5]

[1] Amigo Manufacturing, Inc. v. Cluett Peabody Co., Inc., 406 Phil. 905, 918 (2001).

[2] Philip Morris, Inc. v. Fortune Tobacco Corporation, supra at 359, citing Dy Buncio v. Tan Tiao Bok, 42 Phil 190, 196-197 (1921).

[3] McDonald's Corporation v. L.C. Big Mak Burger, Inc., 480 Phil. 402, 434 (2004).

[4] Mighty Corporation v. E. & J. Gallo Winery, 478 Phil. 615, 659 (2004).

[5] McDonald's Corporation v. L.C. Big Mak Burger, Inc., supra at 428, citing Sterling Products International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et al., 137 Phil 838, 852 (1969).