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~iP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

KONINKLIJKE PHILIPS APPEAL NO. 14-06-28 ELECTRONICS N.V., IPC NO. 14-2006-00034

Opposer-Appellant, Opposition to:

-versus- Application No. 4-2000-002937 Date Filed: 12 April 2000

WILTON DY and/or PHILITES Trademark: PHILITES & ELECTRONIC & LIGHTING Letter P Device PRODUCTS, Respondent-Applicant-Appellee, x-----------------------------------------x

NOTICE OF DECISION

FEDERIS AND ASSOCIATES LAWOFFICES Counsel for Appellant Suite 2005, BB Corporate Center ~ 141 Valero St., Salcedo Village 4- }I~ Ioe Makati City 0

MR. WILTONDY ~ Appellee 'L 2216 Oroquieta St., Sta. Cruz, Manila ~\~\'"

r\ ~ ESTRELLITA BELTRAN-ABELARDO

Director, Burea !? r:~g,a airs ~ Intellectual Pro t!HytjrBce, akiti Gtve" J1 'VJJ

On:' -rl Tim " .. I a-hee of the Director

) Eh,;I';;",',j wI Logel Affairs

GREETINGS:

DIRECTOR LENY B, RAZ Bureau of Trademarks Intellectual Property Office Makati City

IP PHILIPPINES LIBRARY ~ 111~"1 Documentation, Information Technology Transfer Bureau, Intellectual Property Office, Makati City

OIC-DIRECTOR ERIC T. LANAD9Jt; 411a Administrative, Finance and Human Resource Development Services Bureau Intellectual Property Office, Makati City

Please be informed that on 16 April 2008, the Office of the Director General rendered a Decision in the above-titled case (copy attached).

Makati City, 17 April 2008.

Very truly yours,

CERTIFIED TRUE COpy ATTY. Attq ey Vi

f th Ph'lOffice of the Director GeneralRepuhiic ' 0 e I ippmes

JNTFJ.J .FC'TTT A J, PROPF.RTV OFFJC'F.

~iP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

KONINKLIJKE PHILIPS APPEAL NO. 14-06-28 ELECTRONICS N.V., IPC NO. 14-2006-00034

Opposer-Appellant, Opposition to:

-versus- Application No. 4-2000-002937 IDate Filed: 12 April 2000 WILTON DY and/or PHILITES Trademark: PHILITES & ELECTRONIC & LIGHTING Letter P Device PRODUCTS, I Respondent-Applicant-Appellee.

x-----------------------------------------x

NOTICE OF DECISION

FEDERIS AND ASSOCIATES LAW OFFICES DIRECTOR LENY B. RAZ Counsel for Appellant Bureau of Trademarks Suite 2005, 88 Corporate Center Intellectual Property Office 141 Valero St., Salcedo Village Makati City Makati City

MR. WILTON DY IP PHILIPPINES LIBRARY Appellee Documentation, Information 2216 Oroquieta St., Sta. Cruz, Manila Technology Transfer Bureau,

Intellectual Property Office, Makati City

ESTRELLITA BELTRAN-ABELARDO OIC-DIRECTOR ERIC T. LANADO Director, Bureau of Legal Affairs Administrative, Finance and Human Intellectual Property Office, Makati City Resource Development Services Bureau

Intellectual Property Office, Makati City

GREETINGS:

Please be informed that on 16 April 2008, the Office of the Director General rendered a Decision in the above-titled case (copy attached).

Makati City, 17 April 2008.

Very truly yours,

ATTY. Atto ey v.

Republic of the Philfi?~th~) of the Director General INTELLECTUAL PROPERTY OFFICE

__ _

~iP INTELLECTUAL PROPERTY PHILIPPINES

OFFICE OF THE DIRECTOR GENERAL

KONINKLIJKE PHILIPS Appeal No. 14-06-28 ELECTRONICS N.V..

Appellant, IPC No. 14-20006-00034 Opposition to:

-versus- Application No. 4-2000-002937 Date Filed: 12 April 2000

WILTON DY and/or PHILITES ELECTRONIC & LIGHTING Trademark: PHILITES & Letter P PRODUCTS, Device

Appellee. )(--------------------------------)(

DECISION

KONINKLIJKE PHILIPS ELECTRONICS N.V. ("Appellant") appeals Decision No. 2006-125 of the Director of the Bureau of Legal Affairs ("Director"), dated 09 November 2006. The Director denied the Appellant's opposition to the application for the registration of the trademark "PHILITES & LETTER P DEVICE" ("PHILITES and Device") filed by WILTON Dyl ("Appellee").

Records show that the Appellee filed on 12 April 2000 his trademark application covering fluorescent bulb, incandescent light, starter and ballast.' After the publication of the application,' the Appellant filed an opposition' alleging the following:

1. The approval of the Appellee's trademark application is contrary to Sections 123.1, par. (d) (i) and (iii), 123.1 (e), 147, and 168 of the Intellectual Property Code ("IP Code") and will cause grave and irreparable damage and injury to the Appellant;

2. The use and registration of the Appellee's trademark will mislead the public as to the origin, nature, quality and characteristics of the goods on which it is affixed;

1 Doing business under the name PHILITES ELECTRONIC & LIGHTING PRODUCTS. 2 Designated as Trademark Application No. 4-2000-002937. 3 The trademark application was published in the E-gazette for trademarks on 18 Nov. 2005. 4 The Appellant filed a Notice of Opposition on 29 Mar. 2006.

Republic of tbe Pbilippines INTELLECTUAL PROPERTY OFFICE ~:Job

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3. The Appellee's application for registration is tantamount to fraud as it

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seeks to register and obtain legal protection for an identical or confusingly similar mark that clearly infringes upon the established rights of the Appellant over its registered and internationally well-known mark;

4. The registration of the Appellee's trademark will violate the proprietary rights and interests, business reputation and goodwill of the Appellant's trademark "PHILIPS" and will dilute the distinctiveness thereof;

5. The registration of the Appellee's trademark will not only prejudice the Appellant but will also cause the Appellee to unfairly profit commercially from the goodwill, fame and notoriety of the Appellant's trademarks and reputation; and

6. The registration and use of the Appellee's trademark will violate the Appellant's proprietary rights, weaken the unique and distinctive significance of the mark PHILIPS and tarnish, degrade or dilute the distinctive quality of the Appellant's trademark resulting in the gradual attenuation or whittling away of the value of Appellant's trademark;

The Appellee alleged the following in defense:'

1. Confusion is nil because there are vast dissimilarities between the contending trademarks as regards the visual attributes, specifically, the representation, logo, style and size in the lettering;

2. His trademark is not confusingly similar with that of the Appellant because the spelling, sound and meaning of his trademark is different from the Appellant;

3. His trademark consists of the word "PHILITES" and the letter "P" device which serves as a logo and written in a stylized manner where the vertical stroke is drawn in broken lines and semi-circle upper stroke in broken solid while the Appellant's trademarks are the word mark "PHILIPS" and a shield emblem inside of which is the word "PHILIPS" and a circle with a star representations separated by wavy lines;

5 The Appellee filed a VERIFIED ANSWER TO THE OPPOSITION on 08 Aug. 2006.

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I I 4. His trademark when spelled has eight letters, one letter "P", consists of

two syllables "PHI" and "LITES" whereas, the Appellant's trademark has seven letters, two letter "P" and the two syllables "PHI" and "LIPS" and that while there are similar letters present in both trademarks, the words are totally different and distinct from each other that whatever similarities in letters are outweighed by the totally different words created;

5. His trademark is a coined and arbitrary mark which has no dictionary meaning whereas the Appellant's mark was allegedly taken from the family name of its founder; and

6. The differences between his trademarks and the Appellant's will negate any connection between their products, thus, the possibility of likelihood of confusion to consumers is nil.

The Director decided the case in favor of the Appellee holding that the competing trademarks are so unlike each other, visually and aurally, that no confusion is likely to occur despite their contemporaneous use. According to the Director, the ordinary purchaser must be thought of as having, and credited with, at least a modicum of intelligence to see the obvious differences between the trademarks.

Consequently, the Appellant filed the instant appeal" alleging that the Director erred in:

I 1. not rejecting the Appellee's trademark application as being defectively

filed or filed in bad faith, for being untruthful as to the real appearance of its mark;

2. not ruling that the Appellee's trademark for light bulbs is confusingly similar to the Appellant's world-famous trademark for light bulbs also;

3. not ruling that the Appellant's trademark is well-known;

4. ruling that the Appellant is seeking a monopoly on the design of its PHILIPS wrappers; and

6 The Appellant flied an APPEAL MEMORANDUM on 18 Dec. 2006.

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5. misapplying the Supreme Court's ruling in the Asia Brewery and Fruit ofthe Loom cases.

In its appeal, the Appellant claims that the drawing submitted by the Appellee in his application is not a true or substantially exact representation of the trademark sought to be registered as actually used or intended to be used. According to the Appellant, this is in violation of the regulations and that the application was defectively filed or was filed in bad faith.

The Appellant contends that applying the "Dominancy Test", the Appellee's trademark is confusingly similar to its trademarks because they are aurally similar, the first syllable of their trademarks are phonetically the same, visually their trademarks have the same first five letters and last letter, and that the Appellee has adopted almost all the features of its trademarks.

Citing the ruling of the Supreme Court in Philips Export B. v: et al vs. Court ofAppeals/ the Appellant asserts that its PHILIPS trademark is no doubt a world-famous mark. The Appellant also argues that it is not seeking a monopoly on its design but is opposing the registration of the Appellee's trademark to prevent deception to the public. The rulings in Asia Brewery and Fruit of the Loom cases, according to the Appellant, are not applicable in this instance as the competing marks in those cases are completely different from each other.

Commenting on the appeal," the Appellee alleges that he filed his application in good faith and that his trademark was coined from the words "Philippines" and "lights" to create a mark combining the marks' origin and the goods upon which the mark will be used. The Appellee claims that by using both the Dominancy and the Holistic tests, there is no confusing similarity, as there are extensive differences between the competing marks, making his virtually distinct from the Appellant's in every aspect. The Appellee also claims that the Appellant's mark is not a well-known mark in the Philippines. The declaration in Philips Export B. V:J et al v. Court ofAppeals, that the word "PHILIPS" is considered as a well-known trade name and not trademark is merely an obiter dictum and not determinative of the issue.

The Appellee points out that, with respect to the issue that the Appellant is seeking a monopoly of its design, what the appealed decision says is that the functional features of products and descriptive words can be appropriated by anyone if not registered. Also, according to the Appellee, the principles enunciated

7G.R. No. 96161,21 Feb. 1992. 8 The Appellee filed its COMMENT TO APPEAL MEMORANDUM on 02 Mar. 2007.

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in Asia Brewery and Fruit of the Loom cases can be applied to any case because these are general principles that are not dependent on the particular circumstances in those cases.

In resolving this appeal, this Office is guided by the raison d'etre underlying the trademark registration system. The essence of trademark registration is to give protection to the owners of trademarks. The function of a trademark is to point out distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior and different article as his product.9

Trademark law prevents one manufacturer from misrepresenting his goods as someone else's, by protecting the first user of a mark from others who might try to use identical or misleadingly similar marks. The law often refers to the confusion of consumers or the probable confusion of consumers. In protecting legitimate business interests, the interests and welfare of the consumers are also protected. By providing a business with the incentive-increase in profits by the grant of exclusive rights in a mark-and imposing a duty upon that owner to stop others from using that same mark on competing products, trademark law gives consumers some amount of control over the quality of products they buy. If one brand pleased the customer more than another, that customer can easily find the brand they like without having to read ingredient labels or scrutinize packaging, materials and workmanship. This saves the consumer time and allows him or her to make informed purchase decisions. For this reason, the standard of when a trademark right is being infringed has entirely to do with whether or not a consumer is going to be confused, and thus deprived of making informed purchasing decisions.

Would the registration of the Appellee's mark serve the purpose of the trademark registration system?

It is not necessary to inject herein a disquisition on the issue of whether the Appellant's trademark is well-known. That issue is not indispensable in resolving this case because what applies is Sec. 123.1(d) of the IP Code and not Sec.

9 Pribhdas J. Mirpuri v. CA, G.R. No. 114508, 19 Nov. 1999, citing Etepha v. Director ofPatents, 16 SCRA 495

(1966), Gabriel v. Perez, 55 SCRA 406 (1974).

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I 123.l(e)1O. The Appellant's trademark is already registered and In use In the Philippines. Thus, Sec. 123.l(d) provides:

"SEC. 123. Registrability- 123.1. A mark cannot be registered if it: xxx (d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of: (i) The same goods or services, or (ii) Closely related goods or services, or (iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;"

In this regard, it is undisputed that the parties use their respective trademarks on identical or similar goods or products. The trademarks, however, are not identical. What needs to be done is to see if the Appellee's trademark resembles the Appellant's that its use will likely deceive or cause confusion. The competing marks are reproduced below for comparison: f

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PHllIP~ Appellant's trademarks

-I=>= PHILITES-Appellee's trademark

The Appellee's trademark is a composite mark (the word "PHILITES" and a device for the letter "P") while the Appellant's trademarks are the word mark

10 "(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is

considered by the competent authority of the Philippines to be well-known internationally and in the

Philippines, whether or not it is registered here, as being already the mark of a person other than the

applicant for registration, and used for identical or similar goods or services: Provided, That in

determining whether a mark is well-known, account shall be taken of the knowledge of the relevant

sector of the public, rather than of the public at large, including knowledge in the Philippines which has

been obtained as a result of the promotion of the mark;"

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"PHILIPS" and the composite mark of the word "PHILIPS" and a device for shield emblem.

In determining confusing similarity of trademarks, jurisprudence has developed the Dominancy and the Holistic tests. The Dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion while the Holistic test requires the consideration of the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity." As to what test should be used depends on the attendant or surrounding circumstances that should include, but not be limited to, the reputation of trademark and the goods or services it represents, the kind and standing of the goods or services in the market, and the presence of dominant or Iprevalent features of the trademark. Also, it is important to consider the nature of the case, whether it is an opposition to trademark application or a petition for I

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cancellation of trademark registration or a complaint for trademark infringement and/or unfair competition.

In this instance, the goods or products involved - light bulbs, starters and ballasts - are common household products or items. These goods target no particular social or economic groups and can be found in malls, department stores, groceries, convenience stores, and other kinds of stores of all sizes and shapes, including "sari-sad' stores and even in "tiangges'. In the malls, department stores and convenience stores, purchasers pick these products by themselves and pay the price at the cashier. In other instances, purchasers ask the sales clerk or the vendor. Thus, both the competing marks have visual and aural significance.

Scrutinizing the competing marks, this Office concurs with the Director's findings that, regardless of the test used, the Appellee's trademark is not confusingly similar to the Appellant's. There are differences between the Appellant's trademarks and the Appellee's. The dominant feature of the Appellant's trademarks is "PHILIPS" while of the Appellee's trademark is "PHILITES". While the first syllables of the marks are identical - "PHI" - the second syllables are not. The differences in the last syllable accounted for the variance of the trademarks visually and aurally. The second syllable of the Appellant's trademark phonetically sounds as if pronouncing the word "leaps". On the other hand, the second syllable of the Appellee's trademark phonetically sound as if pronouncing the word "light". With respect to the Appellant's trademark featuring a shield, the differences are highlighted by the peculiarities in the composition and elements of the competing trademarks in their entireties. As correctly pointed out by the Director:

11 McDonalds Corp., et al., IJ. L. C. BigMak BU'l,er, G.R. No. 143993, 18 Aug. 2004.

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"At first glance, it is obvious that there is a marked difference between the Philips shield mark and the Philites and 'P' device of respondent. All in all, there are glaring differences and dissimilarities in the design and general appearance of the Philips shield emblem mark and the letter "P" of Philites mark. The Philips shield mark has four stars in different sizes located at the northeast and southwest portions inside a circle within the shield. There are three wavy lines dissecting the middle of the circle. None of these appear in the respondent's mark.,,12

In Philip Morris) et sl. v. Fortune Tobacco Corp.,13 the Supreme Court held that:

"For one, as rightly concluded by the CA after comparing the trademarks involved in their entirety as they appear on the products, the striking dissimilarities are significant enough to warn any purchaser that one is different from the other. Indeed, although the perceived offending word 'MARK' is itself prominent in petitioners' trademarks 'MARK VII' and 'MARK TEN,' the entire marking system should be considered as a whole and not dissected, because a discerning eye would focus not only on the predominant word but also on the other features appearing in the labels. Only then would such discerning observer draw his conclusion whether one mark would be confusingly similar to the other and whether or not sufficient differences existed between the marks."

The distinctive features of the contending marks in this case are sufficient to warn the purchasing public on what are the Appellant's products as distinguished from the Appellee's products. The purchasing public should be equated to an ordinarily intelligent buyer that can differentiate the Appellant's trademark from the Appellee's trademark. In Emerald Garment Manufacturing Corporation v. Court of Appeals,14 it was held that:

"More credit should be given to the 'ordinary purchaser.' Cast in this particular controversy, the ordinary purchaser is not the 'completely unwary consumer' but is the 'ordinarily intelligent buyer' considering the type of product involved ... the 'ordinary purchaser' was defined as one 'accustomed to buy, and therefore to some extent familiar with, the goods in question. The test of fraudulent simulation is to be found in the likelihood of the deception of some persons in some measure acquainted with an established design and desirous of purchasing the commodity with which that design has been associated. The test is not found in the deception, or the possibility of deception, of the person who knows nothing about the design which has been counterfeited, and who must be indifferent between that and the other. The simulation, in order to be objectionable, must be such as appears likely to mislead the ordinary intelligent buyer who has a need to supply and is familiar with the article that he seeks to purchase."

12 Decision No. 2006-125, p. 8. 13G.R. No. 158589,27 Jun. 2006. 14 G.R. No.100098, 29 Dec. 1995.

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Moreover, while the determination of whether the Appellant's trademark is well-known is not indispensable to the resolution of this case, that the Appellants' trademark may be actually well-known would even support a finding that the consumers or the public will not be confused as to the parties' respective goods or their origin. As a well-known mark, the public could be very well aware of the quality, notoriety, and reputation of the products bearing the mark PHILIPS. Thus, even if the Appellant's products bearing the trademark PHILIPS are placed side by side with other brands, the purchaser would not be confused to pick up the Appellant's product if this is his choice or preference, unless the resemblance in the appearance of the trademarks is so glaring which is not in this case.

Accordingly, on the issue that the Appellee is using a form, style and font of the trademark different from those it submitted in its application, Rule 403 of the Trademarks Regulations provides that the drawing of the mark shall be substantially the exact representation thereof as actually used or intended to be used on or in connection with, the goods or services of the applicant. Examining the records, this Office noted that as actually used, the Appellee is using a slightly different form, style and font of the trademark than what it submitted in its application. However, the trademark as applied for registration is still substantially the exact reproduction of the trademark as actually in use. The letter "P" device also appears in the products of the Appellee as shown in the words "Prolong" and "Pangmatagslan". The difference, therefore, is not substantial enough to be a ground to reject the Appellee's trademark application. Significantly, under Sec. 152.2 of the IP Code, the use of a mark in a form different from that of which is registered but does not alter its distinctive character, is allowed.IS

~ Again, it should be emphasized that this case is an opposition case, the objective of which is to prevent the registration of a trademark. The trademark to be registered is the one represented by the drawing submitted as part of the trademark application. The labels and packaging are, technically, not part of the trademark.

In cases of trademark infringement and unfair competition, the comparison may extend to the labels and packaging. This is so because in cases of unfair competition and in cases of trademark infringement where there is also an element of unfair competition, the crux of the matter is the passing off his goods as that of

15 Sec. 152.2. of the IP Code provides that:"SEC. 152. Non-use of a Mark When Excused.- x x x 152.2. The use of the mark in a form different from the form in which it is registered, which does not alter its distinctive character, shall not be ground for cancellation or removal of the mark and shall not diminish the protection granted to the mark."

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another. Thus, the need to scrutinize also the labels and packaging of the goods or products involved.

If ever the Appellee would use his trademark in a manner that will make the packaging of his products virtually undistinguishable from those of the Appellant, such that it can be fairly inferred that there is an intent to pass off his goods as those of the Appellant, the latter has the remedy of filing a case for trademark infringement and/or an unfair competition.

On the claim that the Director erred in holding that the Appellant is seeking a monopoly on its design, the argument deserves scant consideration. What the Director ruled is that in the absence of any proof that the "color or diameter or shape of a light bulb or packaging shape'?" is protected in the name of the Appellant, the Appellant cannot use these factors to prevent the registration of the

~ Appellee's trademark.

Finally, on the applicability of the Asia Brewery and Fruit of the Loom cases, the Appellee was correct in pointing out that the general principles cited in these cases can be applied in the present case."

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit. Accordingly, Decision No. 2006-125 of the Director of the Bureau of Legal Affairs dated 09 November 2006, is hereby AFFIRMED.

Let a copy of this Decision as well as the trademark application and records be furnished and returned to the Director of Bureau of Legal Affairs for appropriate action. Further, let also the Directors of the Bureau of Trademarks, the Administrative, Financial and Human Resources Development Services Bureau, and the library of the Documentation, Information and Technology Transfer Bureau be furnished a copy of this Decision for information, guidance, and records purposes.

SO ORDERED.

APR 16 2008 Makati City

AD

16Decision No. 2006-125, pp. 8-9. 17 COMMENT TO APPEAL MEMORANDUM, p. 26.

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