FACTS: On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), then Bureau of Patents, Trademarks, and Technology Transfer, a trademark application, docketed as Application No. 4-1996-106310, for the use of “KOLIN” on a combination of goods, including colored televisions, refrigerators, window-type and split-type air conditioners, electric fans and water dispensers. Said goods allegedly fall under Classes 9, 11, and 21 of the Nice Classification (NCL).

Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan Kolin’s failure to respond to IPO’s Paper No. 5 requiring it to elect one class of good for its coverage. However, the same application was subsequently revived through Application Serial No. 4-2002-011002, with petitioner electing Class 9 as the subject of its application, particularly: television sets, cassette recorder, VCD Amplifiers, camcorders and other audio/video electronic equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile machines, teleprinters, cellular phones and automatic goods vending machine. The application would in time be duly published.

On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioner’s revived application, docketed as Inter Partes Case No. 14-2006-00096. As argued, the mark Taiwan Kolin seeks to register is identical, if not confusingly similar, with its “KOLIN” mark registered on November 23, 2003, covering the following products under Class 9 of the NCL: automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-DC.

To digress a bit, Kolin Electronics’ “KOLIN” registration was, as it turns out, the subject of a prior legal dispute between the parties in Inter Partes Case No. 14-1998-00050 beforethe IPO. In the said case, Kolin Electronics’ own application was opposed by Taiwan Kolin, being, as Taiwan Kolin claimed, the prior registrant and user of the “KOLIN” trademark, having registered the same in Taipei, Taiwan on December 1, 1988. The Bureau of Legal Affairs of the IPO (BLA-IPO), however, did not accord priority right to Taiwan Kolin’s Taipei registration absent evidence to prove that it has already used the said mark in the Philippines as early as 1988. On appeal, the IPO Director General affirmed the BLA-IPO’s Decision. Taiwan Kolin elevated the case to the CA, but without injunctive relief, Kolin Electronics was able to register the “KOLIN” trademark on November 23, 2003for its products. Subsequently, the CA, on July 31, 2006, affirmed the Decision of the Director General.

In answer to respondent’s opposition in Inter Partes Case No. 14-2006-00096, petitioner argued that it should be accorded the benefits of a foreign-registered mark under Secs. 3 and 131.1 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines (IP Code); that it has already registered the “KOLIN” mark in the People’s Republic of China, Malaysia and Vietnam, all of which are parties to the Paris Convention for the Protection of Industrial Property (Paris Convention) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS); and that benefits accorded to a well-known mark should be accorded to petitioner.

RULING OF THE BLA-IPO: Citing Sec. 123(d) of the IP Code, the BLA-IPO held 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. Accordingly, respondent, as the registered owner of the mark “KOLIN” for goods falling under Class 9 of the NCL, should then be protected against anyone who impinges on its right, including petitioner who seeks to register an identical mark to be used on goods also belonging to Class 9 of the NCL. The BLA-IPO also noted that there was proof of actual confusion in the form of consumers writing numerous e-mails to respondent asking for information, service, and complaints about petitioner’s products.

RULING OF THE IPO DIRECTOR GENERAL: the IPO Director General ratiocinated that product classification alone cannot serve as the decisive factor in the resolution of whether or not the goods are related and that emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics. As held, 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.

Aggrieved, respondent elevated the case to the CA.

COURT OF APPEALS:  the CA found for Kolin Electronics, on the strength of the following premises: (a) the mark sought to be registered by Taiwan Kolin is confusingly similar to the one already registered in favor of Kolin Electronics; (b) there are no other designs, special shape or easily identifiable earmarks that would differentiate the products of both competing companies; and (c) the intertwined use of television sets with amplifier, booster and voltage regulator bolstered the fact that televisions can be considered as within the normal expansion of Kolin Electronics, and is thereby deemed covered by its trademark as explicitly protected under Sec. 138 of the IP Code. Resultantly, the CA granted respondent’s appeal thusly

ISSUE: whether or not petitioner is entitled to its trademark registration of “KOLIN” over its specific goods of television sets and DVD players. Petitioner postulates, in the main, that its goods are not closely related to those of Kolin Electronics. On the other hand, respondent hinges its case on the CA’s findings that its and petitioner’s products are closely-related. Thus, granting petitioner’s application for trademark registration, according to respondent, would cause confusion as to the public.

HELD: YES. Identical marks may be registered for products from the same classification. Verily, whether or not the products covered by the trademark sought to be registered by Taiwan Kolin, on the one hand, and those covered by the prior issued certificate of registration in favor of Kolin Electronics, on the other, fall under the same categories in the NCL is not the sole and decisive factor in determining a possible violation of Kolin Electronics’ intellectual property right should petitioner’s application be granted. It is hornbook doctrine, as held in the above-cited cases, that emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics. The mere fact that one person has adopted and used a trademark on his goods would not, without more, prevent the adoption and use of the same trademark by others on unrelated articles of a different kind.

The products covered by petitioner’s application and respondent’s registration are unrelated

A certificate of trademark registration confers upon the trademark owner the exclusive right to sue those who have adopted a similar mark not only in connection with the goods or services specified in the certificate, but also with those that are related thereto.

In resolving one of the pivotal issues in this case––whether or not the products of the parties involved are related––the doctrine in Mighty Corporation is authoritative. There, the Court held that the goods should be tested against several factors before arriving at a sound conclusion on the question of relatedness. Among these are:

(a) the business (and its location) to which the goods belong;

(b) the class of product to which the goods belong;

(c) the product’s quality, quantity, or size, including the nature of the package, wrapper or container;

(d) the nature and cost of the articles;

(e) the descriptive properties, physical attributes or essential characteristics with reference to their form, composition, texture or quality;

(f) the purpose of the goods;

(g) whether the article is bought for immediate consumption, that is, day-to-day household items;

(h) the fields of manufacture;

(i) the conditions under which the article is usually purchased; and

(j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed and sold.

As mentioned, the classification of the products under the NCL 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 9 in order to establish relatedness between the goods, for this only accounts for one of many considerations enumerated in Mighty Corporation. In this case, credence is accorded to petitioner’s assertions that:

a. Taiwan Kolin’s goods are classified as home appliances as opposed to Kolin Electronics’ goods which are power supply and audio equipment accessories;

b. Taiwan Kolin’s television sets and DVD players perform distinct function and purpose from Kolin Electronics’ power supply and audio equipment; and

c. Taiwan Kolin sells and distributes its various home appliance products on wholesale and to accredited dealers, whereas Kolin Electronics’ goods are sold and flow through electrical and hardware stores.

Clearly then, it was erroneous for respondent to assume over the CA to conclude that all electronic products are related and that the coverage of one electronic product necessarily precludes the registration of a similar mark over another. In this digital age wherein electronic products have not only diversified by leaps and bounds, and are geared towards interoperability, it is difficult to assert readily, as respondent simplistically did, that all devices that require plugging into sockets are necessarily related goods.

It bears to stress at this point that the list of products included in Class 9 can be sub-categorized into five (5) classifications, namely: (1) apparatus and instruments for scientific or research purposes, (2) information technology and audiovisual equipment, (3) apparatus and devices for controlling the distribution and use of electricity, (4) optical apparatus and instruments, and (5) safety equipment. From this sub-classification, it becomes apparent that petitioner’s products, i.e., televisions and DVD players, belong to audio visiual equipment, while that of respondent, consisting of automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-DC, generally fall under devices for controlling the distribution and use of electricity.

The ordinarily intelligent buyer is not likely to be confused

While both competing marks refer to the word “KOLIN” written in upper case letters and in bold font, the Court at once notes the distinct visual and aural differences between them: Kolin Electronics’ mark is italicized and colored black while that of Taiwan Kolin is white in pantone red color background. The differing features between the two, though they may appear minimal, are sufficient to distinguish one brand from the other.

It cannot be stressed enough that the products involved in the case at bar are, generally speaking, various kinds of electronic products. These are not ordinary consumable household 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. Accordingly, the casual buyer is predisposed to be more cautious and discriminating in and would prefer to mull over his purchase. Confusion and deception, then, is less likely. As further elucidated in Del Monte Corporation v. Court of Appeals:

x x x Among these, what essentially determines the attitudes of the purchaser, specifically his inclination to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies will not exercise as much care as one who buys an expensive watch. As a general rule, an ordinary buyer does not exercise as much prudence in buying an article for which he pays a few centavos as he does in purchasing a more valuable thing. Expensive and valuable items are normally bought only after deliberate, comparative and analytical investigation. But mass products, low priced articles in wide use, and matters of everyday purchase requiring frequent replacement are bought by the casual consumer without great care x x x. (emphasis added) Respondent has made much reliance on Arce & Sons, Chua Che, Ang, and Khe, oblivious that they involved common household items––i.e., biscuits and milk, cosmetics, clothes, and toilet articles, respectively–– whereas the extant case involves luxury items not regularly and inexpensively purchased by the consuming public. In accord with common empirical experience, the useful lives of televisions and DVD players last for about five (5) years, minimum, making replacement purchases very infrequent. The same goes true with converters and regulators that are seldom replaced despite the acquisition of new equipment to be plugged onto it. In addition, the amount the buyer would be parting with cannot be deemed minimal considering that the price of televisions or DVD players can exceed today’s monthly minimum wage. In light of these circumstances, it is then expected that the ordinary intelligent buyer would be more discerning when it comes to deciding which electronic product they are going to purchase, and it is this standard which this Court applies herein in determining the likelihood of confusion should petitioner’s application be granted.

To be sure, the extant case is reminiscent of Emerald Garment Manufacturing Corporation v. Court of Appeals, wherein the opposing trademarks are that of Emerald Garment Manufacturing Corporation’s “Stylistic Mr. Lee” and H.D. Lee’s “LEE.” In the said case, the appellate court affirmed the decision of the Director of Patents denying Emerald Garment’s application for registration due to confusing similarity with H.D. Lee’s trademark. This Court, however, was of a different beat and ruled that there is no confusing similarity between the marks, given that the products covered by the trademark, i.e., jeans, were, at that time, considered pricey, typically purchased by intelligent buyers familiar with the products and are more circumspect, and, therefore, would not easily be deceived. As held:

Finally, in line with the foregoing discussions, 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.

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