Dermaline, Inc. vs. Myra Pharmaceuticals, Inc.

A trademark application is properly rejected when the applied mark's dominant features are nearly identical in spelling and pronunciation to a registered mark, creating a likelihood of confusion of business or origin, even if the goods or services fall under different classifications but pertain to the same general field.

On October 21, 2006, Dermaline, Inc. filed an application with the Intellectual Property Office (IPO) to register the trademark "DERMALINE DERMALINE, INC." under Classification 44 for various skin and beauty treatments. Myra Pharmaceuticals, Inc., the registered owner of the mark "DERMALIN" under Classification 5 for pharmaceutical topical applications for skin disorders, opposed the application, alleging confusing similarity and likelihood of deception. Myra claimed the dominant feature of the applied mark was practically identical to its registered mark in spelling and pronunciation, and that the registration would dilute its goodwill and violate Section 123 of Republic Act No. 8293. Dermaline countered that the marks possessed glaring dissimilarities in visual presentation and pertained to entirely different classifications of goods, precluding confusion.

• The Application: On October 21, 2006, Dermaline, Inc. filed an application for registration of the trademark "DERMALINE DERMALINE, INC." (Application No. 4-2006011536) with the IPO, covering health and beauty services under Classification 44. The application was published for opposition in the IPO E-Gazette on March 9, 2007.
• The Opposition: On May 8, 2007, Myra Pharmaceuticals, Inc. filed a Verified Opposition. Myra owns the registered mark "DERMALIN" under Classification 5 for pharmaceutical products against skin disorders, registered on July 8, 1986, and commercially used since October 31, 1977. Myra alleged that the applied mark so resembles its registered mark that it would likely cause confusion, mistake, and deception, and dilute its goodwill. Myra also pointed out that Dermaline had previously applied for the same mark in 2003 and was refused registration.
• The IPO Decision: The IPO-Bureau of Legal Affairs sustained Myra's opposition on April 10, 2008, rejecting Dermaline's application. Dermaline's motion for reconsideration was denied on January 16, 2009. Dermaline's subsequent appeal to the IPO Office of the Director General was dismissed on April 17, 2009, for being filed out of time.
• The CA Appeal: The Court of Appeals affirmed the IPO Director General's dismissal and the underlying rejection of the application on August 7, 2009, and denied Dermaline's motion for reconsideration on October 28, 2009.

• Confusing Similarity: Petitioner argued that a simple comparison shows entirely different features and distinctive presentations between "DERMALINE DERMALINE, INC." and "DERMALIN," precluding confusion. It maintained that the Holistic Test should apply, requiring a consideration of the entirety of the marks including labels and packaging, not just the words.
• Difference in Classification: Petitioner contended there could be no relation between its trademark for health and beauty services (Class 44) and Myra’s trademark for medicinal goods against skin disorders (Class 5).

• Dominant Feature Similarity: Respondent asserted the dominant feature of Dermaline's mark is "DERMALINE," practically identical to "DERMALIN" in spelling (first 8 letters identical) and pronunciation (3 syllables, identical sound with silent "E").
• Likelihood of Confusion: Respondent argued the aural similarity would lead the public to believe Dermaline is connected to Myra, allowing Dermaline to benefit from Myra's goodwill.
• Related Goods/Services: Respondent contended that despite different classifications, the goods/services are closely related as both pertain to treatments for the skin.

• Likelihood of Confusion: Whether the trademark "DERMALINE DERMALINE, INC." is confusingly similar to the registered trademark "DERMALIN."
• Applicable Test: Whether the Dominancy Test or the Holistic Test should be applied in determining confusing similarity.
• Classification of Goods: Whether the difference in classification (Class 44 vs. Class 5) precludes a finding of likelihood of confusion where both goods/services pertain to skin treatments.

• Likelihood of Confusion: Likelihood of confusion was established. The marks are almost spelled the same way and pronounced practically in the same manner in three syllables, with the ending letter "E" in Dermaline's mark pronounced silently. An ordinary purchaser hearing the mark over the radio would likely associate it with Myra's registered mark.
• Applicable Test: The Dominancy Test was correctly applied by the IPO. This test focuses on the similarity of the prevalent or dominant features of the competing trademarks that might cause confusion. Duplication or imitation is not required; the crucial issue is whether the use of the marks would likely cause confusion or deception in the mind of the ordinary purchaser. Greater consideration is given to the aural and visual impressions created by the marks in the public mind.
• Classification of Goods: The difference in classification does not eradicate the possibility of mistake, especially since both classifications pertain to treatments for the skin. The registered trademark owner enjoys protection in product and market areas that are the normal potential expansion of his business. The public may mistakenly think Dermaline is connected to Myra, misleading purchasers into believing Myra expanded its business from pharmaceutical topical applications to health and beauty services.

• Dominancy Test — Focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. It is applied when the trademark sought to be registered contains the main, essential, and dominant features of the earlier registered trademark. Greater consideration is given to 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 Court applied this test to find that the dominant feature "DERMALINE" is confusingly similar to "DERMALIN" due to near-identical spelling and identical pronunciation.
• Holistic or Totality Test — Entails a consideration of the entirety of the marks as applied to the products, including labels and packaging, in determining confusing similarity. The observer must focus not only on the predominant words but also on the other features appearing in both labels. The Court did not apply this test, favoring the Dominancy Test as applied by the IPO.
• Confusion of Goods vs. Confusion of Business — Confusion of goods (product confusion) occurs when the ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other. Confusion of business (source or origin confusion) occurs when the goods are different, but the product is such as might reasonably be assumed to originate with the registrant of an earlier product, deceiving the public into believing there is some connection between the two parties. Both types of confusion were found apparent in the case.
• Normal Potential Expansion of Business — The protection to which the owner of a trademark is entitled extends to all cases in which the use by a junior appropriator of a trademark is likely to lead to a confusion of source, or when it forestalls the normal potential expansion of his business. The Court applied this to hold that Myra's trademark protection extends to health and beauty services, a normal potential expansion of its pharmaceutical skin business.

• "Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited to guarding his goods or business from actual market competition with identical or similar products of the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining party has extended his business into the field or is in any way connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business."
• "When one applies for the registration of a trademark or label which is almost the same or that very closely resembles one already used and registered by another, the application should be rejected and dismissed outright, even without any opposition on the part of the owner and user of a previously registered label or trademark."

• McDonald's Corporation v. L.C. Big Mak Burger, Inc. — Cited for the definitions of the Dominancy Test, confusion of goods, and confusion of business, and for the rule that trademark protection extends to the normal potential expansion of business.
• Philip Morris, Inc. v. Fortune Tobacco Corporation — Cited for the principle that trademark controversies must be scrutinized according to their peculiar circumstances, and for the definition of the Dominancy Test.
• Amigo Manufacturing, Inc. v. Cluett Peabody Co., Inc. — Cited for the definition of the Dominancy Test.
• Mighty Corporation v. E. & J. Gallo Winery — Cited for the definition of the Holistic or Totality Test.

• Section 123.1(d), Republic Act No. 8293 (Intellectual Property Code) — Provides that a mark cannot be registered if it is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing date, in respect of the same or closely related goods or services, or if it nearly resembles such a mark as to be likely to deceive or cause confusion. The IPO and Court applied this provision to reject Dermaline's application.
• Section 147.1, Republic Act No. 8293 — Confers upon the owner of a registered mark the exclusive right to prevent third parties from using identical or similar signs for identical or similar goods/services where such use would result in a likelihood of confusion. Myra invoked this right to oppose Dermaline's application.
• Section 155.1, Republic Act No. 8293 — Explicitly incorporates the test of dominancy by prohibiting the use in commerce of any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof where such use is likely to cause confusion. The Court cited this provision to support the application of the Dominancy Test.
• Section 138, Republic Act No. 8293 — Provides that a certification of registration of a mark is prima facie evidence of the validity of the registration, the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the same in connection with the goods and those that are related thereto. The IPO upheld Myra's right under this provision.

Antonio T. Carpio, Diosdado M. Peralta, Roberto A. Abad, Jose Catral Mendoza.