Lacoste S.A. vs. Crocodile International Pte Ltd.

A composite trademark containing a word and a design element is not confusingly similar to a prior registered mark consisting solely of a device, where the dominant design elements are visually distinguishable in appearance and overall commercial impression, and where evidence of actual co-existence in other jurisdictions and a lack of bad faith further negate likelihood of confusion.

Lacoste S.A., a French company, owned the registered "CROCODILE DEVICE" mark in the Philippines (a right-facing crocodile) since 1963. Crocodile International Pte. Ltd., a Singaporean company, filed an application in 1996 to register its composite "CROCODILE AND DEVICE" mark (a left-facing crocodile with the stylized word "Crocodile" above it) for goods in Class 25. Lacoste opposed, alleging confusing similarity and trademark dilution. The dispute traversed the Intellectual Property Office-Bureau of Legal Affairs (IPO-BLA), the IPO-Director General (IPO-DG), and the Court of Appeals (CA), all of which denied Lacoste's opposition.

• Nature of the Parties and Marks: Lacoste, a French company, owned the registered "CROCODILE DEVICE" mark (a solid, right-facing crocodile) in the Philippines since 1963. Crocodile, a Singaporean company, sought to register its composite "CROCODILE AND DEVICE" mark (a stylized, left-facing crocodile drawing with the word "Crocodile" above it) for clothing (Class 25).
• Opposition and Defense: Lacoste opposed, claiming confusing similarity and trademark dilution. Crocodile argued the marks had substantial differences, pointed to concurrent registrations and judicial decisions in other jurisdictions (e.g., Japan, Myanmar), and invoked a 1983 Mutual Co-Existence Agreement with Lacoste.
• IPO and CA Proceedings: The IPO-BLA, IPO-DG, and CA uniformly found no confusing similarity. They emphasized the composite nature of Crocodile's mark, the visual differences in the crocodile devices, and the lack of evidence of bad faith or dilution. Lacoste's consumer survey ("Project Copy Cat") was discredited.
• Supreme Court Proceedings: Lacoste appealed via a Rule 45 petition, reiterating arguments on confusing similarity, trademark dilution, and the survey's probative value.

• Confusing Similarity: Petitioner argued that the "saurian" figure is the dominant feature in both marks, and the distinction as to which side the crocodile faces is too minute for ordinary consumers to notice, making Crocodile's mark a mere mirror image of its own.
• Trademark Dilution: Petitioner maintained that the use of Crocodile's mark in the Philippines would likely dilute the distinctive quality of Lacoste's famous mark by lessening its capacity to identify its products, citing Levi Strauss & Co. v. Clinton Apparelle, Inc.
• Survey Evidence: Petitioner contended that its "Project Copy Cat" survey proved actual consumer confusion and should be given probative weight.

• No Confusing Similarity: Respondent countered that its composite mark, with the prominent stylized word "Crocodile" above the crocodile device, creates a distinct overall commercial impression from Lacoste's device-only mark.
• Co-Existence and Good Faith: Respondent argued that the marks co-exist in numerous jurisdictions, supported by judicial decisions and a Mutual Co-Existence Agreement, negating any intent to ride on Lacoste's goodwill or cause confusion.
• Survey Inadmissibility: Respondent asserted that Lacoste's survey was privately commissioned, lacked scientific rigor, and failed to establish trustworthiness, rendering it without probative value.

• Likelihood of Confusion: Whether the CA erred in affirming that there is no confusing similarity between Lacoste's "CROCODILE DEVICE" mark and Crocodile's "CROCODILE AND DEVICE" mark under the Dominancy Test.
• Trademark Dilution: Whether the CA erred in not applying the doctrine of trademark dilution to prevent the registration of Crocodile's mark.
• Survey Evidence: Whether the CA erred in disregarding the consumer survey evidence ("Project Copy Cat") submitted by Lacoste.

• Likelihood of Confusing Similarity: No confusing similarity exists. Under the Dominancy Test, the dominant "saurian" figures in both marks are visually distinct: Lacoste's is a solid, right-facing crocodile with specific scutes, while Crocodile's is a non-solid, left-facing drawing with scale patterns and a prominent stylized word element. These differences in form, arrangement, and overall presentation make the propensity to mistake one for the other very low. This conclusion is bolstered by the marks' co-existence in other jurisdictions.
• Trademark Dilution: The claim of dilution is speculative. Lacoste failed to prove that Crocodile used its mark in bad faith or with intent to defame or disparage Lacoste's mark. The evidence showed Crocodile as a legitimate business with its own goodwill, and the parties' history of co-existence and a Mutual Co-Existence Agreement negated any intent to tarnish or blur Lacoste's mark.
• Survey Evidence: The survey "Project Copy Cat" has no probative value. It failed to establish trustworthiness under the factors from Ginebra v. Tanduay and Zippo Mfg. Co. v. Rogers Imps., Inc.: the universe was not properly defined, the representativeness of the sample was not shown, and the questionnaire was not presented for scrutiny to ensure non-leading questions.

• Dominancy Test — This test focuses on the similarity of the prevalent or dominant features of competing trademarks that might cause confusion. Duplication or imitation is not necessary. More consideration is given to the aural and visual impressions created by the marks on buyers. The Court applied this test, abandoning the Holistic Test per Kolin Electronics Co. Inc. v. Kolin Philippines International, Inc., and found the dominant "saurian" figures in the marks to be distinguishable.
• Trademark Dilution — Defined as the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of competition or likelihood of confusion. Protection requires that the mark is famous and distinctive, the junior user's use began after the mark became famous, and such use defames the mark. The Court found Lacoste failed to prove the third element.
• Admissibility and Probative Value of Survey Evidence - Survey evidence, though hearsay, may be admitted based on necessity and trustworthiness. Trustworthiness requires factors like a properly defined universe, representative sample, clear and non-leading questions, and sound interview procedures. The survey here failed these requirements.

• "Applying the Dominancy Test, the Court holds that there are pronounced differences between Lacoste's and Crocodile's marks, which resultantly, make them distinguishable from one another... The form, arrangement, general appearance, and overall presentation of their marks are evidently dissimilar, thus, the propensity to mistake one for the other is very low." — This passage articulates the core application of the Dominancy Test to the facts.
• "Courts should take care not to interfere in a free and fair market, or to foster monopolistic practices. Instead, they should confine themselves to prevent fraud and misrepresentation on the public." — Quoted from a separate opinion, this underscores the policy against using trademark law to stifle competition absent fraud.

• Kolin Electronics Co. Inc. v. Kolin Philippines International, Inc., G.R. No. 228165, February 9, 2021 — Cited as the controlling precedent that categorically abandoned the Holistic or Totality Test in favor of the Dominancy Test in trademark confusion cases.
• Levi Strauss & Co. v. Clinton Apparelle, Inc., 507 Phil. 238 (2005) — Applied for its definition and elements of trademark dilution. The Court distinguished it, finding Lacoste failed to meet the required elements.
• Ginebra v. Tanduay, G.R. Nos. 196372, 210224, 216104 & 219632, August 9, 2022 - Relied upon for the framework on the admissibility and trustworthiness of consumer survey evidence in trademark cases.

• Section 4(d), Republic Act No. 166 (Old Trademark Law) — Prohibits the registration of a mark that so resembles a previously registered or used mark as to be likely to cause confusion. Applied as the governing law since Crocodile's application was filed before the effectivity of the Intellectual Property Code (R.A. 8293).

• Justice Henri Jean Paul B. Inting
• Justice Jhosep Y. Lopez
• Justice Maria Filomena D. Singh (Acting Chairperson)

N/A — The decision was unanimous.