Stability and certainty in judicial decisions – that’s where the rule of law best thrives. The familiar doctrine of stare decisis commands that once a question of law has been examined and decided, it should be deemed settled and closed to further argument. This simply means that a ruling on a certain state of facts established in a final decision of the Philippine Supreme Court has to be followed in subsequent cases by all courts in the land where the facts are substantially the same, regardless of whether the parties and property are the same.
This doctrine, however, disappears in the realm of confusing similarity in trademark disputes. In 2004, the Supreme Court ruled in the McDonald’s case that confusing similarity is to be resolved only by using the dominancy test because it is explicitly incorporated in Section 155.1 of the Philippine Intellectual Property Code (defining infringement as the “colorable imitation of a registered mark xxx or a dominant feature thereof”). For this reason, the Supreme Court expressly rejected the holistic test, even declaring it as contrary to the elementary postulate of trademark law. Thus, under the dominancy test, confusing similarity is found if one dominant feature is copied, notwithstanding the presence of differentiating words or design. In addition, if the element copied is the first word of the mark, this is deemed sufficient copying of the dominant element.
In one case applying the dominancy test, the Examiner issued a final rejection to an application filed by Associated British Foods, PLC (“Applicant”) for the mark ACTIV8 ICON HAS IODINE, IRON, FOLIC ACID & ZINC TO HELP SUPPORT MENTAL PERFORMANCE AND DEVICE (“ACTIV8”), ruling that it is blocked by two registrations. It cited an earlier registration for ACTIVE 8 covering fruit drinks, fruit juices, fruit juice powder and drink mixes, issued to Alticor, Inc. and another for ACTIVATE in the name of Societe Des Produits Nestle and used in connection with coffee, coffee extracts, coffee-based preparations, among others. Taking Applicant’s ACTIV8 to be the dominant element in the application, the Examiner concluded that it is visually and aurally similar to the blocking marks. The Director of the Bureau of Trademarks, therefore, sustained the final rejection of the application. Applicant pursued an appeal with the Office of the Director General who issued a decision (Appeal No. 04-2011-0019) reversing the final rejection.
The Director General’s ruling failed to mention the dominancy test, and cited a different principle altogether. Thus, “(I)n trademark cases, particularly in ascertaining whether one trademark is confusingly similar to or is a colorable imitation of another, no set of rules can be deduced.” The Director General further pointed out that likelihood of confusion “is a relative concept, to be determined only according to the particular, and sometimes, peculiar circumstances of each case.” Accordingly, likelihood of confusion “requires that the entire panoply of elements constituting the relevant factual landscape be comprehensively examined.” Here, the Director General surveyed what it deemed as the entire panoply of elements of the contending marks, and found that there was no confusing similarity because of various design features in the applied mark that are nowhere to be found in the cited ACTIVE 8 or ACTIVATE marks. It also cited another reason, which indicates that what is referred to as the “entire panoply of elements” encompasses the registration history of the Applicant. Here, the Director General considered records showing that the Applicant has another registered and even well-known mark, namely, OVALTINE, and that ACTIV8 is only being used or is intended to be used as a “secondary mark” in conjunction with the OVALTINE mark. Such secondary use was therefore deemed as preventing likelihood of confusion with ACTIVE 8 products.
In this ruling, the Intellectual Property Office appears to have veered back to the holistic approach, which the Supreme Court rejected in the McDonald’s case in 2004. In this case, the scope of judicial inquiry is expressed in broad terms – “entire panoply of elements”, a standard which considers an infinite number of variables and hence uncertainty in the outcome.
The dominancy test eliminates a good amount of subjectivity in determining confusing similarity since judicial inquiry is confined only to what really matters, and that is, the dominant features of the contending marks. It is these dominant features that the buyer’s mind latches on to. Any decision applying dominancy test will be easily digested by trademark owners, and can therefore effectively guide their behavior in the market when looking around for a good trademark. Lawyers for trademark owners/claimants can streamline their allegations and evidence for a simpler presentation of their claims or defenses. Hearing officers will not have to look far and wide for legal support of their rulings since the scope of judicial inquiry becomes more compact, as compared to the universe called “entire panoply of elements.”
Administrative agencies, such as the Intellectual Property Office (“IPO”), are considered as having acquired expertise because their jurisdiction is confined to specific matters. Their findings thus are accorded respect by courts. Decisions therefore of the IPO are awaited with much anticipation by stakeholders, who will have to tailor fit their future trademark decisions to its expert view on what marks will be barred by a confusing similarity objection.
The IPO must, through its decisions, promote stability and certainty in the highly competitive world where market shares expand or contract depending on fickle preferences of consumers whose choice of products are guided by the power of brand recall. This is a challenge that the Director General could have taken on successfully in this case without disrespecting the trademark history of the Applicant here.