HYPOTHETHICAL SITUATION : “ IT IS ABOUT THE USE OF SPONSORED SPORTING EVENTS e.g. FIBA, IF THE EVENT IS SPONSORED BY BRAND A, AND A NON-SPONSOR BRAND B GIVES OUT TICKET TO SUCH EVENT, WITH THE RECIPIENTS OF SUCH TICKETS ARE EXPECTED TO WEAR THE BRAND ( TRADEMARK OR TRADENAME ) FOR EXPOSURE “

Regarding the use of competing trademarks in a sponsored sporting event in FIBA, in which the event was, sponsored then by Brand A and in such manner the competing Brand B who is then a non-sponsor brand who gives out tickets to such event in which the real sponsor of that FIBA event is Brand A.  Because being the main sponsor of such event, Brand A, who is the recipient of such tickets, they expect that people who shall participate or watch the said event should wear the brand for the exposure of their products.

As correctly phrased by us the public, the basic issue presented for our consideration is WHETHER OR NOT BRAND B IS OF SUCH CHARACTER THAT IS CALCULATED TO DECEIVE OR CONFUSE THE PUBLIC TO THE INJURY OF BRAND A, to which the brand who sponsored the event belongs.

Let us then make certain distinctions, and analyze as to the meaning of TRADEMARK AND TRADENAME.

Under Sec. 121 (3) of the Intellectual Property Code of the Philippines, it states that:

TRADENAME means the name or designation identifying or distinguishing an enterprise.

Trade name is any individual name or surname, firm name, device or word used by manufacturers, individualists, merchants and others to identify their businesses, vocations, or occupations.

As the Trade name refers to the business and its goodwill...., the Trademark refers to the goods, the ownership of a trademark or trade name is a property right which the owner is entitled to protect “since there is damage to him from confusion or reputation or goodwill in the mind of the public as well as from confusion of goods “. The modern trend is to give emphasis to the unfairness of the acts and to classify and treat the issue as fraud.

Since Brand A and Brand B are both engaged in similar business, the dominant facts is that Brand A is the primary sponsor of the event and Brand B has no right to appropriate the same for use on its products which are similar to those being sponsored by Brand A.

Brand A had no idea why Brand B chose to give out tickets to the event in which they are then the major sponsor.  And the record discloses no reasonable explanation for the Brand B’s contention of giving out such tickets on that event.  Such unexplained use by them lends itself open to suspicion of fraudulent motive to trade upon Brand A’s reputation.

A boundless choice of words, phrases, symbols, advertising techniques, and marketing strategies is available to one who wishes a trademark sufficient unto itself to distinguish his product from those of others.  When, however, there is no reasonable explanation for Brand B’s choice of such mark through the field for his selection was so broad, the inference is inevitable that it was a chosen deliberately to deceive.

The fact that brand A, who is the legitimate trader as well as the sponsorship of the FIBA event evidencing of Brand A’s product in the Philippines, give evidence to Brand A’s claim that it has earned a business reputation and goodwill in this country.

The best proof that the company of Brand B in the market in the country and that there was actual use for protracted period of Brand A’s trademark or part thereof through sales and sponsorship. 

The most convincing proof of use of a mark in commerce is testimony of such witnesses, as customers, patrons for the commercial use during such period.  Brand B’s witness, having affirmed her lack of business connections with Brand A, has testified as such patrons, supporting strongly Brand A’s move for trademark pre-exemption.

Any sale made by legitimate trader from his store is a commercial act of business to the general public, not only to limited individuals.  It is a matter of public knowledge that all brands of goods filters into the market, indiscriminately sold by jobbers dealers and merchants not necessarily with the knowledge or consent of the manufacturer.

Such actual sale of goods in the local market establishes trademark use which serves as a basis for any action aimed at trademark pre-exemption.  It is corollary logical that Brand A is licensed to do business; it means that its goods are being sold and earned a reputation or goodwill as regards to its products.

Since it was an event, there should be a better determination with regards to not to confuse the viewing public of the event to the prejudice of Brand A.

The determinative factor in ascertaining whether or not marks are confusingly similar to each other “is not whether the challenged mark on the tickets would actually cause confusion or mistake on the part of the buying public.”  It would be sufficient, for purposes of the law that the similarity between the two companies on their tickets or advertising scheme is such that there is possibility or likelihood of the purchaser of the sponsoring company mistaking the new brand for it.  Even if not of the details just mentioned were identical, with general appearance alone of the 2 companies, any ordinary, or even perhaps, even is not too perceptive and discriminating could be deceived.

Such actions of Brand B are not tenable and for my own opinion, the action in general contention of both companies Brand B and Brand A, in which would evidently create a likelihood of confusion among the purchasing and viewing public of the FIBA.  But even assuming arguendo that the trademark is already known unlike that of Brand B, the likelihood of confusion would still subsists, not on the purchaser’s perception of the goods but on the origins thereof.  By giving out the tickets on that occasion are likely to be mistaken as having been co-produced by Brand B.

The risk of damage is not limited to a possible confusion on the sponsoring company but also includes confusion of reputation of the public could reasonably assume that the goods of the parties originated from the same source.

The Brand A have the exclusive right to prevent all 3^rd persons not having the owner’s consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which he trademark is registered where such use would result in a likelihood of confusion.  Because of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.

The company of Brand A is not here seeking to enforce any legal or control rights arising from or growing out of, any business which it has transacted in the Philippine islands. The sale purpose of the action:

Is to protect its reputation, its corporate name, its goodwill whenever that reputation, corporate name, its goodwill whenever that reputation, corporate name or goodwill have, though the natural development of its trade, established themselves.  And it contends that its rights to the use of its corporate and trade name.

Is a property right, a right in recess which it may assert and protect against all the world, in any of the courts, even in jurisdiction where it does not transact business just the same as it may protect its tangible property, real or personal against trespass or conversion.

Since it is trade and not the mark that is to be protected, a trademark acknowledges no territorial boundaries of municipalities or states or nations but extends to every market where the sponsors’ goods have become known and identified by the use of the mark.

The object of the government is to accord a member extensive protection against infringement and other types of unfair competition.

The pertinent provision of RA No. 166 (Trademark Law) states that:

Sec. 22 Infringement, what constitutes – any person who shall use, without the consent of the registrant; any reproduction, counterfeit, copy or colourable imitation of any registered mark or trade name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others or to the source or origin of such goods or services or identify of such business; or to reproduce, counterfeit, copy or colorable imitation any such mark or trademark and apply such reproduction, counterfeit, copy or colourable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business or services; shall be liable to a civil action by the registrant for any or all of the remedies herein provided.

Practical application, however, of the aforesaid provision is easier said than done.  In the history of trademark cases in the Philippines, particularly in ascertaining whether one trademark is confusingly similar to or is colourable imitation of another, no set rules can be deduced.  Each case must be decided on its own merits.

                But likelihood of confusion is a relative concept; to be determined only according to the particular, and sometimes peculiar, circumstances of each case. It is unquestionably true that, as stated in Coburn vs. Puritan Mills, Inc.: “In trademark cases, even more than in other litigation, precedent must be studied in the light of the facts of the particular case.”

Likewise, it has been observed that:

In determining whether a particular name or mark is a “colorable imitation” of another, no all-embracing rule seems possible in view of the great number of factors which must necessarily be considered in resolving this question of fact, such as the class of product or business to which the article belongs; the product’s quality, quantity, or size, including its wrapper or container; the dominant color, style, size, form, meaning of letters, words, designs and emblems used; the nature of the package, wrapper or container; the character of the product’s purchasers; location of the business; the likelihood of deception or the mark or name’s tendency to confuse;
etc. ²⁵

Proceeding to the task at hand, the essential element of infringement is colorable imitation. This term has been defined as “such a close or ingenious imitation as to be calculated to deceive ordinary purchasers, or such resemblance of the infringing mark to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other.” 

Colorable imitation does not mean such similitude as amounts to identity. Nor does it require that all the details be literally copied. Colorable imitation refers to such similarity in form, content, words, sound, meaning, special arrangement, or general appearance of the trademark or trade name with that of the other mark or trade name in their over-all presentation or in their essential, substantive and distinctive parts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine article. 

In determining whether colorable imitation exists, jurisprudence has developed two kinds of tests — the Dominancy Test applied in Asia Brewery, Inc. v. Court of Appeals and other cases and the Holistic Test developed in Del Monte Corporation v. Court of Appeals and its proponent cases. 

As its title implies, the test of dominancy focuses on the similarity of the prevalent features of the competing trademarks which might cause confusion or deception and thus constitutes infringement.

. . . 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. Duplication or imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate. On the other side of the spectrum, the holistic test mandates that the entirety of the marks in question must be considered in determining confusing similarity.

In determining whether the trademarks are confusingly similar, a comparison of the words is not the only determinant factor. The trademarks in their entirety as they appear in their respective labels or hang tags must also be considered in relation to the goods to which they are attached. The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to the other. 

To arrive at a proper resolution of this case, it is important to bear in mind the following distinctions between infringement of trademark and unfair competition.

(1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the passing off of one’s goods as those of another.

(2) In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition fraudulent intent is essential.

(3) In infringement of trademark the prior registration of the trademark is a prerequisite to the action, whereas in unfair competition registration is not necessary. ⁸

In this situation, these factors should always be considered in determining whether two trademarks are confusingly similar, the two marks in their entirety as they appear in the respective labels must be considered in relation to the goods to which they are attached; the discerning eye of the observer must focus not only on the predominant words but also on the other features appearing on both labels.

On this situation it is so unjust for Brand B to give out such tickets knowingly that they are within the vicinity of the FBA with being Brand a as the major sponsor of such event.  Their rights have to respected and the government must lay a hand in protecting such company from Infringement and Unfair Competition.