SC Rules on ‘KOLIN’ Trademark Issue

June 16, 2021

Emphasizing the adoption of the Dominancy Test and the abandonment of the Holistic Test in evaluating trademark resemblance, the Supreme Court, voting unanimously, rejected the “kolin” trademark application filed by Kolin Philippines International, Inc. (KPII) for its television and DVD players.

In a 38-page decision penned by Justice Alfredo Benjamin S. Caguioa, the Court En Banc granted the Petition for Review on Certiorari under Rule 45 of Kolin Electronics Co., Inc. (KECI) to reverse and set aside the April 29, 2016 decision and November 4, 2016 resolution of the Court of Appeals (CA) that ruled in KPII‟s favor to register its “kolin” mark.

The SC reinstated and affirmed the decision of the Intellectual Property Office- Director General (IPO-DG) which had ruled in favor of KECI, which had already been declared as the owner of the KOLIN“mark under the Trademark Law.

The SC summarized its discussion, to wit: (1) there is resemblance between KECI‟s “KOLIN“ and KPII‟s “kolin” marks; (2) the goods covered by KECI‟s “KOLIN“ are related to the goods covered by KPII‟s “kolin”; (3) there is evidence of actual confusion between the two marks; (4) the goods covered by KPII‟s “kolin” fall within the normal potential expansion of business of KECI; (5) sophistication of buyers is not enough to eliminate confusion; (6) KPII‟s adoption of KECI‟s coined and fanciful mark would greatly contribute to likelihood of confusion; and (7) KPII applied for “kolin” in bad faith.

“Thus, KPII‟s application for kolin should be denied because it would cause likelihood of confusion and KECI‟s rights would be damaged,” the Court held. It further held that “[t]he existence of likelihood of confusion is already considered as damage that would be sufficient to sustain the opposition and rejection of KPII‟s trademark application.”

“More than that, however, the Court is likewise cognizant that, by granting this registration, KPII would acquire exclusive rights over the stylized version of KOLIN (kolin) for a range of goods/services. Owing to the peculiar circumstances of this case, this will effectively amount to a curtailment of KECI‟s right to freely use and enforce the KOLIN word mark, or any stylized version thereof, for its own range of goods/services, especially against KPII, regardless of the existence of actual confusion. Thus, based on Section 122 vis-à-vis Section 236 of the IP Code, the Court cannot give due course to KPII‟s trademark application for „kolin‟,” held the Court.

The SC disagreed with the CA which had earlier ruled that res judicata (a latin term which refers to a case or controversy that is already decided with finality) was applicable in the present case. The CA relied on the 2015 SC jurisprudence in G.R. No. 209843, Taiwan Kolin Corporation, Ltd. (TKC) v. Kolin Electronics Co., Inc. (KECI) or the Taiwan Kolin case, where the Court gave due course to the TKC‟s trademark application for “KOLIN.”

The SC stressed the Taiwan Kolin case only ruled that TKC‟s trademark application for “KOLIN” should be given due course and that what was involved in the present case is a new trademark application by KPII which means that it is going through an entirely new process of determining registrability.

“Because this involves a new trademark application and there are new issues arising here which were not decided in the Taiwan Kolin case, the principle of res judicata in the concept of conclusiveness of judgment does not apply,” it stressed.

The ponencia noted that Justice Estela M. Perlas-Bernabe, who wrote a separate concurring opinion, raised a compelling and well-reasoned point on why the principle of conclusiveness of judgment does not apply in the present case. She opined that the Court‟s Third Division in the Taiwan Kolin case could have only allowed the registration of TKC‟s KOLIN as a mark with a specific stylization, and not a word mark.

“Indeed, a perusal of the marks involved in the Taiwan Kolin case would confirm that TKC sought to protect a specific style of lettering in its trademark application, thereby precluding the possibility that the registration granted in the Taiwan Kolin case belongs in the category of word mark,” the Court held.

Aside from Justice Bernabe, then Chief Justice Diosdado M. Peralta and Justices Marvic M.V.F. Leonen and Mario V. Lopez also wrote separate concurring opinions.

The Court noted that the current state of jurisprudence in deciding the resemblance of marks is unclear. But between the Dominancy Test and the Holistic or Totality Test, only the former has been incorporated in the Intellectual Property Code (IP Code), which was discussed in 2004 jurisprudence in McDonald’s Corporation v. L.C. Big Mak Burger, Inc. The Dominancy Test considers the dominant features in the competing marks in determining whether they are confusingly similar. Under the said 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. The test of dominancy is also now explicitly incorporated into law in Section 155.1 of the IP Code.

“Considering the adoption of the Dominancy Test and the abandonment of the Holistic Test, as confirmed by the provisions of the IP Code and the legislative deliberations, the Court hereby makes it crystal clear that the use of Holistic Test in determining resemblance of marks has been abandoned,” the Court said.

Applying the Dominancy Test, KPII‟s kolin mark resembles KECI‟s KOLIN mark because the word “KOLIN” is the prevalent feature of both marks. Phonetically or aurally, the marks are exactly the same, held that Court. It added that the Taiwan Kolin case was inapplicable because it used the Holistic Test in evaluating trademark resemblance.

The SC noted the fact that KPII‟s trademark application possesses special characteristic (referring to the italicized orange letter „i‟) not present in KECI‟s KOLIN“ word mark makes no difference in terms of appearance, sound, connotation, or overall impression because the “KOLIN” word itself is the subject of KECI‟s registration.

The Court also abandoned “the use of product or service classification as a factor in determining relatedness or non-relatedness” of goods or services.

KECI is the predecessor company of Kolin Electronics Industrial Supply (KEIS), owned by a certain Miguel Tan. In 1993, KEIS filed with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT), now the Intellectual Property Office, an application for registration of Trademark Application for KOLIN covering products under

Class 9 – automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, and PA amplifier AC-DC. In a Deed of Assignment of Assets in 1995, Miguel Tan assigned in KECI‟s favor all the assets and merchandise stocks of KEIS, including its pending application for registration of the KOLIN mark. The trademark has been continuously used in various products under the said classification, and the products are being offered for sale at KECI‟s business establishments.

In 1996, TKC filed with BPTTT a trademark application for KOLIN initially covering the following goods – color television, refrigerator, window-type air conditioner, split- type air conditioner, electric fan, and water dispenser. During the pendency of its application, TKC filed a verified Notice of Opposition in 1998 against KECI‟s trademark application for KOLIN. TKC claimed that it is the owner of Taiwan registrations for KOLIN and KOLIN SOLID SERIES and that it has a pending application for KOLIN, thus the grant of the KOLIN application would cause TKC grave and irreparable damage to its business reputation and goodwill because KOLIN is identical, if not confusingly similar, to TKC‟s marks.

In 2002, the IPO Bureau of Legal Affairs (IPO-BLA) rendered a decision denying TKC‟s opposition and giving due course to KECI‟s trademark application for KOLIN. It concluded   that   KECI   “is  the   prior  adopter   and   user  of   the   mark   „KOLIN‟  in   the Philippines, having been able to prove the date of first use of its mark in 1989, ahead of TKC‟s use in the Philippines in 1996.

TKC appealed the decision to the IPO-Director General, which sustained the ruling  of the IPO-BLA. The IPO eventually issued a Certificate of Registration for KOLIN in favor of KECI.

Subsequently, TKC filed a petition for review with the CA. In 2006, the CA issued a Decision against TKC and in favor of KECI. The CA found as undisputed that KEIS, the predecessor-in-interest of KECI, had been using the KOLIN mark in the country since 1989, prior to the filing of the trademark application of KOLIN in 1993. By virtue of the KECI ownership case, KECI is the adjudicated owner of the KOLIN mark under the Trademark Law as against TKC.

However, in another case that went up to the SC, the registration of another KOLIN mark not owned by KECI was allowed. Known as the Taiwan Kolin case, the SC in its 2015 jurisprudence, gave due course to TKC‟s Trademark Application for KOLIN.

To recall, TKC filed a Trademark Application for KOLIN in 1996 before filing an opposition case against KECI‟s application for KOLIN.

(G.R. No. 228165, Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc., February 9, 2021)