UFC Phil v Fiesta Barrio Manufacturing,
GR No 198889, January 20, 2016.
[First Division] [Leonardo-De Castro]
Facts:
On April 4, 2002, respondent filed Application No. 4-2002-002757 for the mark "PAPA BOY & DEVICE" for goods under Class 30, specifically for "lechon sauce." The Intellectual Property Office (IPO) published said application for opposition in the IP Phil. e-Gazette released on September 8, 2006.
On December 11, 2006, petitioner filed with the IPO-BLA a Verified Notice of Opposition to the above-mentioned application and alleged that: The mark "PAPA" for use on banana catsup and other similar goods was first used [in] 1954 by Neri Papa, and thus, was taken from his surname; After using the mark "PAPA" for about twenty-seven (27) years, Neri Papa subsequently assigned the mark "PAPA" to Hernan D. Reyes who, on September 17, 1981, filed an application to register said mark "PAPA" for use on banana catsup, chili sauce, achara, banana chips, and instant ube powder. On August 14, 1983, Hernan D. Reyes was issued Certificate of Registration No. 32416. Hernan D. Reyes also filed on March 04, 1982 an application to register in the Supplemental Register the "PAPA BANANA CATSUP Label.
Petitioner contended that "PAPA BOY & DEVICE" is confusingly similar with its "PAPA" marks inasmuch as the former incorporates the term "PAPA," which is the dominant feature of petitioner's "PAPA" marks. Petitioner averred that respondent's use of "PAPA BOY & DEVICE" mark for its lechon sauce product, if allowed, would likely lead the consuming public to believe that said lechon sauce product originates from or is authorized by petitioner, and that the "PAPA BOY & DEVICE" mark is a variation or derivative of petitioner's "PAPA" marks. Petitioner argued that this was especially true considering that petitioner's ketchup product and respondent's lechon sauce product are related articles that fall under the same Class 30.
In its Verified Answer, respondent argued that there is no likelihood of confusion between petitioner's family of "PAPA" trademarks and respondent's "PAPA BOY & DEVICE" trademark.
IPO-BLA rendered a Decision on March 26, 2008 sustaining petitioner's Opposition and rejecting respondent's application for "PAPA BOY & DEVICE." BLA held that the mark "PAPA BOY & DEVICE" for lechon sauce under Class 30 filed on April 04, 2002 by Barrio Fiesta Manufacturing Corporation, is, as it is hereby, REJECTED. IPO Director General dismiss the appeal filed by Barrio Fiesta.
CA held that "PAPA BOY & DEVICE" is not confusingly similar to respondent's "PAPA KETSARAP" and "PAPA BANANA CATSUP" trademark. Petitioner's trademark is "PAPA BOY" as a whole as opposed to respondent's "PAPA". Although on its label the word "PAPA" is prominent, the trademark should be taken as a whole and not piecemeal. The difference between the two marks are conspicuous and noticeable. While respondent's products are both labeled as banana sauces, that of petitioner Barrio Fiesta is labeled as lechon sauce.
Under the third ground, petitioner claims that the fact that the word "PAPA" is a known term of endearment for fathers does not preclude it from being used as a mark to identify goods. Petitioner claims that their mark falls under a type of mark known as "arbitrary or fanciful marks," which are "marks that bear no logical relation to the actual characteristics of the products they represent," are "highly distinctive and valid," and "are entitled to the greatest protection."
Respondent argued that applying the Dominancy test, as correctly emphasized by the Court of Appeals, the dominant feature in respondent's mark is "PAPA BOY" and not "PAPA". It can be gleaned from respondent's mark that the word "PAPA" was written in the same font, style and color as the word "BOY". There is also the presence of a "smiling hog-like character" which is positioned very prominently, both in size and location in said mark, at glance (sic) even more dominant than the word "PAPA BOY". On the other hand, the dominant feature in petitioner's mark is "KETSARAP", not "PAPA". Even an ordinary examiner could observe that the word "KETSARAP" in petitioner's mark is more prominently printed than the word "PAPA". In a dominancy test, the prominent feature of the competing trademarks must be similar to cause confusion or deception. Verily, respondent's dominant feature "PAPA BOY" and the smiling hog-like character and petitioner's dominant feature "KETSARAP", being the word written in a larger font, are neither confusing nor deceiving to the public. In fact, the differences between their dominant marks are very noticeable and conspicuous to every purchaser.
Furthermore, the Supreme Court in Societe des Produits Nestle, SA. v. Dy [ 641 Phil. 345], applied the dominancy test by taking into account the aural effects of the words and letters contained in the marks in determining the issue of confusing similarity. Obviously, petitioners' "PAPA KETSARAP" mark does not in any way sounds (sic) like respondent's "PAPA BOY" mark. The common prefix "PAPA" does not render the marks aurally the same. As discussed above, the dominant feature in petitioner's mark is "KETSARAP" and the dominant feature in respondent's mark is "PAPA BOY". Thus, the words "KETSARAP" and "PAP A BOY" in petitioner's and respondent's respective marks are obviously different in sound, making "PAPA BOY & DEVICE" even more distinct from petitioner's "PAPA KETSARAP" mark.
Using the holistic test, respondent further discusses the differences in the marks in this wise: Even the use of the holistic test takes into consideration the entirety of the marks in question [to] be considered in resolving confusing similarity. The differences are again very obvious. Respondent's mark has (1) the word "lechon sauce" printed inside a blue ribbon-like device which is illustrated below the word "PAPA BOY"; (2) a prominent smiling hog-like character gesturing a thumbs-up sign and wearing a Filipino hat and scarf stands beside the word "PAPA BOY"; and the word "BARRIO FIESTA" conspicuously displayed above the said trademark which leaves no doubt in the consumer's mind on the product that he or she is purchasing. On the other hand, petitioner's mark is the word "PAPA" enclosed by a cloud on top of the word "KETSARAP' enclosed by a geometrical figure.
Respondent argue that the respective marks are obviously different in color scheme, logo, spelling, sound, meaning and connotation. Thus, yet again, under the holistic test there can be no confusion or deception between these marks.
Issue:
Whether PAPA BOY is confusingly similar to Opposer's PAPA mark
Held:
Yes; SC find that the Court of Appeals erred in applying the holistic test and in reversing and setting aside the decision of the IPO-BLA and that of the IPO Director General, both of which rejected respondent's application for the mark "PAPA BOY & DEVICE."
In Dermaline, Inc. v. Myra Pharmaceuticals, Inc., we defined a trademark as "any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt by others." We held that a trademark is "an intellectual property deserving protection by law."
The guideline for courts in determining likelihood of confusion is found in A.M. No. 10-3-10-SC, or the Rules of Procedure for Intellectual Property Rights Cases, Rule 18, which provides: SECTION 3. Presumption of Likelihood of Confusion. - Likelihood of confusion shall be presumed in case an identical sign or mark is used for identical goods or services.
SECTION 4. Likelihood of Confusion in Other Cases. - In determining whether one trademark is confusingly similar to or is a colorable imitation of another, the court must consider the general impression of the ordinary purchaser, buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods. Visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace must be taken into account. Where there are both similarities and differences in the marks, these must be weighed against one another to see which predominates.
In determining likelihood of confusion between marks used on non-identical goods or services, several factors may be taken into account, such as, but not limited to:
a) the strength of plaintiffs mark;
b) the degree of similarity between the plaintiffs and the defendant's marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.
"Colorable imitation" denotes such a close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other.
On this matter of particular concern, administrative agencies, such as the IPO, by reason of their special knowledge and expertise over matters falling under their jurisdiction, are in a better position to pass judgment thereon. Thus, their findings of fact in that regard are generally accorded great respect, if not finality by the courts, as long as they are supported by substantial evidence, even if such evidence might not be overwhelming or even preponderant. It is not the task of the appellate court to weigh once more the evidence submitted before the administrative body and to substitute its own judgment for that of the administrative agency in respect to sufficiency of evidence.
There are two tests used in jurisprudence to determine likelihood of confusion, namely the dominancy test used by the IPO, and the holistic test adopted by the Court of Appeals. In Skechers, U.S.A., Inc. vs. Inter Pacific Industrial Trading Corp., we held: "The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to cause confusion. In determining similarity and likelihood of confusion, jurisprudence has developed tests - the Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of the prevalent or dominant features of the competing trademarks that might cause confusion, mistake, and deception in the mind of the purchasing public. Duplication or imitation is not necessary; neither is it required that the mark sought to be registered suggests an effort to imitate. Given more consideration are the aural and visual impressions created by the marks on the buyers of goods, giving little weight to factors like prices, quality, sales outlets, and market segments.
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.
Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S" by respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the IPO. While it is undisputed that petitioner's stylized "S" is within an oval design, to this Court's mind, the dominant feature of the trademark is the stylized "S," as it is precisely the stylized "S" which catches the eye of the purchaser. Thus, even if respondent did not use an oval design, the mere fact that it used the same stylized "S", the same being the dominant feature of petitioner's trademark, already constitutes infringement under the Dominancy Test.
This Court cannot agree with the observation of the CA that the use of the letter "S" could hardly be considered as highly identifiable to the products of petitioner alone. The CA even supported its conclusion by stating that the letter "S" has been used in so many existing trademarks, the most popular of which is the trademark "S" enclosed by an inverted triangle, which the CA says is identifiable to Superman. Such reasoning, however, misses the entire point, which is that respondent had used a stylized "S," which is the same stylized "S" which petitioner has a registered trademark for. The letter "S" used in the Superman logo, on the other hand, has a block-like tip on the upper portion and a round elongated tip on the lower portion. Accordingly, the comparison made by the CA of the letter "S" used in the Superman trademark with petitioner's stylized "S" is not appropriate to the case at bar.
Furthermore, respondent did not simply use the letter "S," but it appears to this Court that based on the font and the size of the lettering, the stylized "S" utilized by respondent is the very same stylized "S" used by petitioner; a stylized "S" which is unique and distinguishes petitioner's trademark. Indubitably, the likelihood of confusion is present as purchasers will associate the respondent's use of the stylized "S" as having been authorized by petitioner or that respondent's product is connected with petitioner's business.
While there may be dissimilarities between the appearances of the shoes, to this Court's mind such dissimilarities do not outweigh the stark and blatant similarities in their general features.
Neither can the difference in price be a complete defense in trademark infringement. In McDonald's Corporation v. L.C Big Mak Burger, Inc., this Court held: “Modem law recognizes that the protection to which the owner of a trademark is entitled is not limited to guarding his goods or business from actual market competition with identical or similar products of the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining party has extended his business into the field (see 148 ALR 56 et seq; 53 Am. Jur. 576) or is in any way connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business”
In Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, the Court distinguished the two types of confusion: Callman notes two types of confusion. The first is the confusion of goods "in which event the ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other." In which case, "defendant's goods are then bought as the plaintiff's, and the poorer quality of the former reflects adversely on the plaintiff's reputation." The other is the confusion of business: "Here though the goods of the parties are different, the defendant's product is such as might reasonably be assumed to originate with the plaintiff, and the public would then be deceived either into that belief or into the belief that there is some connection between the plaintiff and defendant which, in fact, does not exist."
There are two tests to determine likelihood of confusion: the dominancy test and holistic test. The dominancy test focuses on the similarity of the main, prevalent or essential features of the competing trademarks that might cause confusion. Infringement takes place when the competing trademark contains the essential features of another. Imitation or an effort to imitate is unnecessary. The question is whether the use of the marks is likely to cause confusion or deceive purchasers.
In McDonald's Corporation v. MacJoy Fastfood Corporation, the Court applied the dominancy test in holding that "MACJOY" is confusingly similar to "MCDONALD'S." The Court held: While we agree with the CA's detailed enumeration of differences between the two (2) competing trademarks herein involved, we believe that the holistic test is not the one applicable in this case, the dominancy test being the one more suitable. In recent cases with a similar factual milieu as here, the Court has consistently used and applied the dominancy test in determining confusing similarity or likelihood of confusion between competing trademarks.
Applying the dominancy test to the instant case, the Court finds that herein petitioner's "MCDONALD'S" and respondent's "MACJOY" marks are confusingly similar with each other that an ordinary purchaser can conclude an association or relation between the marks. To begin with, both marks use the corporate "M" design logo and the prefixes "Mc" and/or "Mac" as dominant features. For sure, it is the prefix "Mc," and abbreviation of "Mac," which visually and aurally catches the attention of the consuming public. Verily, the word "MACJOY" attracts attention the same way as did "McDonalds," "Mac Fries," "Mc Spaghetti," "McDo," "Big Mac" and the rest of the MCDONALD'S marks which all use the prefixes Mc and/or Mac.
Besides and most importantly, both trademarks are used in the sale of fastfood products. Indisputably, the respondent's trademark application for the "MACJOY & DEVICE" trademark covers goods under Classes 29 and 30 of the International Classification of Goods, namely, fried chicken, chicken barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioner's trademark registration for the MCDONALD'S marks in the Philippines covers goods which are similar if not identical to those covered by the respondent's application.
In McDonald's Corporation v. L. C. Big Mak Burger, Inc., the Court applied the dominancy test in holding that "BIG MAK" is confusingly similar to "BIG MAC." The Court held: This Court has relied on the dominancy test rather than the holistic test. The dominancy test considers the dominant features in the competing marks in determining whether they are confusingly similar. Under the dominancy test, courts give greater weight to the similarity of the appearance of the product arising from the adoption of the dominant features of the registered mark, disregarding minor differences. Courts will consider more 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.
A scrutiny of petitioner's and respondent's respective marks would show that the IPO-BLA and the IPO Director General correctly found the word "PAPA" as the dominant feature of petitioner's mark "PAPA KETSARAP." Contrary to respondent's contention, "KETSARAP" cannot be the dominant feature of the mark as it is merely descriptive of the product. Furthermore, it is the "PAPA" mark that has been in commercial use for decades and has established awareness and goodwill among consumers.
We likewise agree with the IPO-BLA that the word "PAPA" is also the dominant feature of respondent's "PAPA BOY & DEVICE" mark subject of the application, such that "the word 'PAPA' is written on top of and before the other words such that it is the first word/figure that catches the eyes." Furthermore, as the IPO Director General put it, the part of respondent's mark which appears prominently to the eyes and ears is the phrase "PAPA BOY" and that is what a purchaser of respondent's product would immediately recall, not the smiling hog.
Under the Dominancy Test, the dominant features of the competing marks are considered in determining whether these competing marks are confusingly similar. Greater weight is given to the similarity of the appearance of the products arising from the adoption of the dominant features of the registered mark, disregarding minor differences. The visual, aural, connotative, and overall comparisons and impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace are the main considerations (McDonald's Corporation, et al., v. L. C. Big Mak Burger, Inc., et al., G. R. No.143993, August 18, 2004; Societe Des Produits Nestle, S. A." et al. v. Court of Appeals, et al., G. R. No. 112012, April 4, 2001). If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. (Lim Hoa v. Director of Patents, 100 Phil. 214 [1956]); Co Tiong Sa v. Director of Patents, et al., G. R. No. L-5378, May 24, 1954). Duplication or imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate (Lim Hoa v. Director of Patents, supra, and Co Liang Sa v. Director of Patents, supra). Actual confusion is not required: Only likelihood of confusion on the part of the buying public is necessary so as to render two marks confusingly similar so as to deny the registration of the junior mark (Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, 137 Phil. 838 [1969]).
Though Respondent-applicant was first to file the subject application on April 04, 2002 vis-a-vis the mark "PAPA" the filing date of which is reckoned on October 28, 2005, and the mark "PAPA LABEL DESIGN" the filing date of which is reckoned on November 15, 2006, Opposer was able to secure a registration for the mark "PAPA KETSARAP" on August 23, 1985 considering that Opposer was the prior registrant and that its renewal application timely filed on August 23, 2005.
Pursuant to [Section 123 .1 (d) of the IP Code], the application for registration of the subject mark cannot be allowed considering that Opposer was earlier registrant of the marks PAPA and PAPA KETSARAP which registrations were timely renewed upon its expiration. Respondent-applicant's mark "PAPA BOY & DEVICE" is confusingly similar to Opposer's mark "PAPA KETSARAP" and is applied to goods that are related to Opposer's goods, but Opposer's mark "PAPA KETSARAP" was registered on August 23, 1985 per Certificate of Registration No. 34681, which registration was renewed for a period of 10 years counted from August 23, 2005 per Certificate of Renewal of Registration No. 34681 issued on August 23, 2005. To repeat, Opposer has already registered a mark which Respondent-applicant's mark nearly resembles as to likely deceive or cause confusion as to origin and which is applied to goods to which respondent-applicant's goods under Class 30 are closely related.
Section 138 of the IP Code provides that a certificate of registration of a mark is prima facie evidence of the validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same in connection with the goods and those that are related thereto specified in the certificate.
We agree that respondent's mark cannot be registered. Respondent's mark is related to a product, lechon sauce, an everyday all-purpose condiment and sauce; that is not subjected to great scrutiny and care by the casual purchaser, who knows from regular visits to the grocery store under what aisle to find it, in which bottle it is contained, and approximately how much it costs. Since petitioner's product, catsup, is also a household product found on the same grocery aisle, in similar packaging, the public could think that petitioner had expanded its product mix to include lechon sauce, and that the "PAPA BOY" lechon sauce is now part of the "PAPA" family of sauces, which is not unlikely considering the nature of business that petitioner is in. Thus, if allowed. registration, confusion of business may set in, and petitioner's hard-earned goodwill may be associated to the newer product introduced by respondent, all because of the use of the dominant feature of petitioner's mark on respondent's mark, which is the word "PAPA." The words "Barrio Fiesta" are not included in the mark, and although printed on the label of respondent's lechon sauce packaging, still do not remove the impression that "PAPA BOY" is a product owned by the manufacturer of "PAPA" catsup, by virtue of the use of the dominant feature. It is possible that petitioner could expand its business to include lechon sauce, and that would be well within petitioner's rights, but the existence of a "PAPA BOY" lechon sauce would already eliminate this possibility and deprive petitioner of its rights as an owner of a valid mark included in the Intellectual Property Code.
The Court of Appeals likewise erred in finding that "PAPA," being a common term of endearment for one's father, is a word over which petitioner could not claim exclusive use and ownership. The Merriam-Webster dictionary defines "Papa" simply as "a person's father." True, a person's father has no logical connection with catsup products, and that precisely makes "PAPA" as an arbitrary mark capable of being registered, as it is distinctive, coming from a family name that started the brand several decades ago. What was registered was not the word "Papa" as defined in the dictionary, but the word "Papa" as the last name of the original owner of the brand. In fact, being part of several of petitioner's marks, there is no question that the IPO has found "PAPA" to be a registrable mark.
Respondent had an infinite field of words and combinations of words to choose from to coin a mark for its lechon sauce. While its claim as to the origin of the term "PAPA BOY" is plausible, it is not a strong enough claim to overrule the rights of the owner of an existing and valid mark. Furthermore, this Court cannot equitably allow respondent to profit by the name and reputation carefully built by petitioner without running afoul of the basic demands of fair play.
WHEREFORE, we hereby GRANT the petition. We SET ASIDE the June 23, 2011 Decision and the October 4, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 107570, and REINSTATE the March 26, 2008 Decision of the Bureau of Legal Affairs of the Intellectual Property Office (IPO-BLA) and the January 29, 2009 Decision of the Director General of the IPO.