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PROSOURCE INTERNATIONAL v. HORPHAG RESEARCH MANAGEMENT SA

FACTS:

The case involves a petition for review on certiorari wherein the petitioner seeks to reverse and set aside the decisions of the Court of Appeals (CA) and the Regional Trial Court (RTC) in Civil Case No. 68048. The respondent is a Swiss corporation that owns the trademark PYCNOGENOL for a food supplement. The respondent discovered that the petitioner was distributing a similar product using the mark PCO-GENOLS. Upon receiving notice from the respondent, the petitioner discontinued the use of PCO-GENOLS and changed its mark to PCO-PLUS without notifying the respondent. Subsequently, the respondent filed a complaint for trademark infringement against the petitioner. During the pre-trial, certain facts were admitted by both parties, including the registration of the respondent's trademark with the Intellectual Property Office but not with the Bureau of Food and Drug, and the registration of the petitioner's product with the Bureau of Food and Drug but not with the Intellectual Property Office. The trial court ruled in favor of the respondent, finding the marks to be confusingly similar and ordering the petitioner to pay attorney's fees. The decision of the trial court was affirmed by the Court of Appeals. The petitioner then filed a petition for review on certiorari with the Supreme Court, but it was denied.

ISSUES:

  1. Whether there is trademark infringement based on the elements under R.A. No. 166.

  2. Whether there is trademark infringement based on the elements under R.A. No. 8293.

  3. Whether the Dominancy Test or the Holistic or Totality Test should be applied in determining similarity and likelihood of confusion between two marks.

  4. Whether the trademarks "SALONPAS" and "LIONPAS" are confusingly similar in sound.

  5. Whether the petitioner is liable for trademark infringement.

  6. Whether the award of attorney's fees in favor of the respondent is justified.

RULING:

  1. Yes, there is trademark infringement based on the elements under R.A. No. 166. The dominant features of the competing trademarks, PYCNOGENOL and PCO-GENOL, are similar and likely to cause confusion or mistake in the mind of the public or deceive purchasers. The trial court and the Court of Appeals (CA) applied the Dominancy Test and correctly found trademark infringement.

  2. Yes, there is trademark infringement based on the elements under R.A. No. 8293. The trademark PYCNOGENOL is registered in the Intellectual Property Office, and the mark PCO-GENOL is a reproduction, imitation, or copying of PYCNOGENOL. It is used in connection with the sale, offering for sale, or advertising of goods and is likely to cause confusion or mistake or to deceive purchasers. The use of PCO-GENOL without the consent of the trademark owner constitutes trademark infringement.

  3. The Dominancy Test should be applied in determining similarity and likelihood of confusion between two marks. This test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion and deception. Courts consider 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. The trial and appellate courts correctly applied the Dominancy Test in this case.

  4. The Court found that the trademarks "SALONPAS" and "LIONPAS" are confusingly similar in sound. Despite some dissimilarities in the trademark, such as the type of letters used and the size, color, and design of the packaging, the Court determined that the aural effects of the words and letters are important in determining the issue of confusing similarity. The close relationship of the competing products' names in sound indicates that purchasers could be misled into believing that they are the same or originate from a common source and manufacturer.

  5. The Court affirmed the finding of both the trial and appellate courts that the petitioner is liable for trademark infringement. Infringement is a factual issue, and the factual determinations of the lower courts are final and binding. The petitioner, therefore, is held liable for trademark infringement.

  6. The Court sustained the award of attorney's fees in favor of the respondent. Article 2208 of the Civil Code enumerates the instances when attorney's fees are awarded, and the Court found that the grant of attorney's fees is justified in this case. Even though moral and exemplary damages were not awarded, the Court held that attorney's fees may still be granted if the court deems it just and equitable. In this case, the Court found no reversible error in the grant of attorney's fees by the appellate court.

PRINCIPLES:

  • In determining trademark infringement, the elements of "likelihood of confusion" and "similarity" are crucial. Likelihood of confusion is a relative concept that depends on the particular circumstances of each case. (R.A. No. 166)

  • The Dominancy Test and the Holistic or Totality Test are two tests used in determining similarity and likelihood of confusion between two marks. The Dominancy Test focuses on the similarity of the prevalent features that might cause confusion and deception. The Holistic Test considers the entirety of the marks, including labels and packaging, to determine confusing similarity. (Jurisprudence)

  • The aural effects of words and letters are important in determining the issue of confusing similarity in trademarks.

  • Factual determinations of the trial court, concurred in by the appellate court, are final and binding.

  • Attorney's fees may be awarded even if moral and exemplary damages are not granted, if the court deems it just and equitable.