The Supreme Court of the Philippines finally put to rest decades of dispute between Taiwan Kolin Corporation (TKC), a Taiwanese corporation, and Kolin Electronics Company, Inc. (KEC), a Philippine corporation. Both are engaged in the manufacture and sale of electronic products.

KEC Opposes TKC in 2006 on the Ground of Confusing Similarity 

This case stemmed from an opposition case lodged by KEC (herein, respondent) against an application for registration filed by TKC (herein, petitioner) for “KOLIN” for use in Class 09, particularly: television sets, cassette recorders, VCD amplifiers, camcorders and other audio/video electronic equipment, etc.

In its opposition, KEC argued that TKC’s KOLIN mark is identical, if not, confusingly similar to KEC’s registered KOLIN mark covering the following products in Class 09: automatic voltage regulators, converters, chargers, rechargers, stereo boosters, AC-DC regulated power-supplies, step-down transformers and PA-amplified AC-DC.

Ruling in favour of KEC, the Bureau of Legal Affairs of the Intellectual Property Office of the Philippines (BLA-IPO) rejected the application for registration of TKC and stated that a mark cannot be registered if it is identical with a registered mark belonging to a different proprietor in respect of the same or closely-related goods.

The BLA-IPO noted that there was proof of actual confusion in the form of consumers writing numerous e-mails to KEC asking for information, service, and complaints about TKC’s products.

Not the Classification Alone, But the Description of the Products

Aggrieved, TKC appealed to the Office of the Director General of the IPOPHL. The director reversed the ruling and held that product classification alone cannot serve as a decisive factor in the resolution of whether or not the goods are related and that emphasis should be on the similarity of the product involved and not on the arbitrary classification or general description of their properties or characteristics. The director emphasized that “the mere fact that one person has adopted and used a particular trademark for his goods does not prevent the adoption and use of the same trademark by others on articles of a different description.”

And the Rivalry Continues to the Appellate Courts

This time, it was KEC who appealed to the Court of Appeals.

Ultimately, the appellate court sided with KEC instead and sustained the finding of confusing similarity, as held by the BLA-IPOPHL and found that there are “no other designs, special shape or easily identifiable earmarks that would differentiate the products of both competing companies. Further, the Court of Appeals ratiocinated that, “the intertwined use of television sets with amplifier, booster and voltage regulator bolstered the fact that televisions can be considered as a normal expansion of Kolin Electronics, and is thereby deemed covered by its trademark as explicitly protected by the Intellectual Property Code.”

Hence, TKC elevated the matter to the Supreme Court. Finally settling what seems to be a legal conundrum, with the lower tribunals contradicting each other, the Supreme Court ruled favorably for TKC. Stressing two main points, the court found that: first, the products covered by TKC’s application and KEC’s registration are unrelated, and second, the ordinary intelligent buyer is not likely to be confused.

In finding that the goods covered by both the marks are unrelated, the Supreme Court stated that “the classification of the products under the Nice Classification is merely part and parcel of the factors to be considered in ascertaining whether the goods are related. It is not sufficient to state that the goods involved herein are electronic products under Class 09 in order to establish relatedness between the goods, for this only accounts for one of the many considerations.”

Electronic Items are Luxury Goods

Credence was given by the Supreme Court to the petitioner’s contentions, to wit, “Taiwan Kolin’s goods are classified as home appliances as opposed to Kolin Electronics’ goods which are power supply and audio equipment accessories.”

At this point, the Supreme Court also extended the ordinary intelligent buyer to electronic products, stressing that “the products involved in the case are, generally speaking, various kinds of electronic products. These are not ordinary consumable items, like catsup, soy sauce or soap which are of minimal cost.

The products of the contending parties are relatively luxury items not easily considered affordable.” As such, it was expected that a buyer is more discerning, cautious and discriminating when purchasing electronic products and would prefer to mull over his purchase. Confusion and deception, then, is less likely.

With this decision, the Supreme Court has considered electronic items as luxury goods by which an average consumer is expected to be more scrutinizing and has added electronic items to the list of products by which the “average buyer” doctrine applies such as jeans, underwear, cigarettes, tobacco and beer.

This article was first published in Asia IP on July 31, 2015. For further information, please visit http://www.asiaiplaw.com/ .