Prosel Pharmaceuticals & Distributors, Inc. vs. Tynor Drug House, Inc.

A trademark constitutes a colorable imitation of a registered mark where, despite minor differences in spelling or design elements, the marks create a likelihood of confusion among consumers in the relevant market as to the source of the goods, particularly when the products are over-the-counter items sold side-by-side and target the same consumer demographic, and where the alleged infringer admitted the similarity and undertook to withdraw confusingly similar materials.

Tynor Drug House, Inc. formulated and marketed CHERIFER, a multivitamin for children, since 1993, securing copyright registration for its packaging design in 2002 and trademark registration for "CHERIFER + Logo" (featuring a boy dunking a basketball with the slogan "Height is Might") in 2004. Prosel Pharmaceuticals & Distributors, Inc. introduced CEEGEEFER in 2007, allegedly as an enhanced version of its prior product Selvon C, using packaging that resembled CHERIFER's design and a name phonetically derived from "Chlorella Growth Factor" but bearing the suffix "fer." Upon discovering CEEGEEFER in the market, Tynor demanded that Prosel cease distribution and recall the products, alleging trademark and copyright infringement.

• Nature of the Action: Respondent Tynor Drug House, Inc. instituted a civil action for trademark and copyright infringement, unfair competition, and damages against petitioner Prosel Pharmaceuticals & Distributors, Inc. before the Regional Trial Court, seeking injunctive relief, seizure of infringing products, nominal damages of at least P500,000.00, exemplary damages, attorney's fees, and litigation expenses.
• Respondent's Product and Intellectual Property Rights: Respondent formulated CHERIFER in 1993 as a children's multivitamin. On July 3, 2002, respondent deposited the packaging material with the Philippine National Library, obtaining a Certificate of Copyright Registration and Deposit on July 25, 2002. On July 8, 2004, the Intellectual Property Office registered respondent's trademark "CHERIFER + Logo," described as the word CHERIFER with a logo of a young boy dunking a basketball, wearing a red uniform with a "C" print, accompanied by the slogan "Height is Might" on a blue and pink arc against a green triangular background.
• Petitioner's Product Development: Petitioner alleged that CEEGEEFER was an improved formulation of its prior product Selvon C (registered with BFAD on December 3, 1999), containing Chlorella Growth Factor (CGF) in addition to vitamins and minerals. Petitioner claimed it phonetically derived "CEEGEEFER" from "CGF" (Chlorella Growth Factor), using "fer" as slang for "factor." To expedite BFAD approval, petitioner utilized packaging for CEEGEEFER identical to that of Selvon C.
• Demand and Response: On March 28, 2007, respondent sent a demand letter requiring petitioner to cease distribution, recall distributed products, and execute an undertaking to stop using respondent's trademark and design, alleging that CEEGEEFER was confusingly similar to CHERIFER. In a letter-reply dated April 13, 2007, petitioner denied confusing similarity but undertook to withdraw all CEEGEEFER promotional materials bearing any resemblance to CHERIFER's trade box, issuing an internal memorandum on April 12, 2007 to instruct field personnel accordingly. Petitioner requested time to coordinate with its exclusive distributor, Metro Drug, Inc., to remove stocks already in distribution.
• Procedural History: Respondent filed its complaint on the heels of petitioner's alleged failure to cause immediate recall. The RTC dismissed the complaint, but the CA reversed, finding trademark infringement and awarding damages, leading to the instant petition.

• Lack of Confusing Similarity: Petitioner maintained that CEEGEEFER and CHERIFER are not confusingly similar in sound or spelling, arguing that the only similarity is the suffix "fer," which in CEEGEEFER represents "factor" (from Chlorella Growth Factor) while in CHERIFER represents "ferrous sulfate." Petitioner contended that the idem sonans rule is inapplicable because the attentive ear can easily distinguish the two names.
• Product Differentiation: Petitioner argued that the products are not sold as the same goods: CEEGEEFER is a drug containing vitamin C and CGF, whereas CHERIFER is a multivitamin without vitamin C. Petitioner emphasized differences in the logos (body type of the boy, type of dunk, cap style, slogan "Healthy & Mighty" vs. "Height is Might"), price points (CEEGEEFER being more expensive), and target market behavior (mothers purchasing for children, not the children themselves).
• Prior Use and Good Faith: Petitioner asserted that CEEGEEFER was merely an enhanced version of its predecessor product Selvon C, which had been marketed since 1999, and that the packaging similarity was adopted to expedite BFAD approval, not to deceive consumers.
• Procedural Defect: Petitioner noted that respondent failed to oppose the CEEGEEFER mark when first offered in the market, implying acquiescence or lack of confusion.

• Colorable Imitation: Respondent countered that the CA correctly found a colorable imitation between CEEGEEFER and CHERIFER, noting that petitioner admitted the similarity in its letter-reply and undertook to withdraw resembling materials. Respondent argued that not all details need be copied to constitute infringement.
• Confusing Similarity: Respondent maintained that the marks are phonetically and visually confusingly similar, with both using the suffix "fer," depicting a boy performing a basketball dunk, utilizing orange and yellow color combinations, and employing arc slogans beginning with "H" and "M." Respondent dismissed petitioner's enumerated differences as minute and negligible.
• Likelihood of Confusion: Respondent argued that both products target the same market (parents seeking growth supplements for children) and are sold over-the-counter without prescription, increasing the likelihood of confusion, especially where drug stores displayed them side-by-side.

• Confusing Similarity: Whether the marks CEEGEEFER and CHERIFER, and their respective packaging, are confusingly similar so as to constitute trademark infringement.
• Classification of Goods: Whether the classification of CEEGEEFER as a drug and CHERIFER as a multivitamin precludes a finding of trademark infringement.
• Damages: Whether the award of P500,000.00 as nominal damages and P100,000.00 as attorney's fees is proper.

• Confusing Similarity: The marks are confusingly similar. The names CEEGEEFER and CHERIFER are confusingly similar in sound under the doctrine of idem sonans, following precedents establishing that similarities such as "SALONPAS" and "LIONPAS" or "Celdura" and "Cordura" constitute infringement. The packaging elements create a striking similarity: both display the right profile of a boy wearing a basketball jersey and cap performing a dunk, with slogans starting with "H" and "M" in an arc with a differently colored line, using orange and yellow color schemes and ribbon drawings. Petitioner's admission in its April 13, 2007 letter-reply that it would withdraw materials "that bears any resemblance to the trade box of CHERIFER" estopped it from denying similarity. Minor differences in the boy's physique, dunk style, or cap design do not negate the overall commercial impression of similarity, as infringers often introduce negligible changes to avoid liability while still confusing consumers.
• Classification of Goods: The classification of CEEGEEFER as a drug versus CHERIFER as a multivitamin is immaterial. The gravamen of trademark infringement is the likelihood of confusion as to the source of the goods. Both are over-the-counter children's growth supplements containing CGF, targeting the same relevant market and sold side-by-side in establishments, rendering them reasonably interchangeable and creating a high propensity for mistaken purchase.
• Damages: The award of nominal damages is reduced from P500,000.00 to P100,000.00 pursuant to precedent in similar infringement cases. The award of P100,000.00 attorney's fees is affirmed as respondent proved engagement of counsel and expenses to protect its rights. Both awards shall earn 6% annual interest from finality until full payment.

• Idem Sonans — This doctrine applies when names sound sufficiently alike to cause confusion despite minor spelling differences. The test is whether the attentive ear finds difficulty in distinguishing the names when pronounced. The Court applied this to find CEEGEEFER and CHERIFER confusingly similar, citing historical examples such as "Steinway" and "Steinberg," "Celdura" and "Cordura," and "Lusolin" and "Sapolin."
• Colorable Imitation — This refers to copying with slight modifications calculated to deceive consumers who are not vigilant. The Court held that introducing negligible changes to a registered mark does not avoid infringement liability if the overall commercial impression remains confusingly similar.
• Likelihood of Confusion — The gravamen of trademark infringement is the likelihood that consumers will be confused or deceived as to the source of the goods. This is determined through the Dominancy Test (focusing on the dominant features) or the Holistic/Totality Test (considering the mark as a whole), though the Court noted the need for objective, scientific, and economic standards to assess whether goods are related and likely to cause confusion.
• Estoppel by Admission — A party who admits facts or undertakes certain actions in correspondence cannot later assume a contrary position in litigation to the prejudice of the other party. Petitioner's admission of resemblance in its demand letter reply estopped it from denying similarity.

• "The following random list of confusingly similar sounds in the matter of trademarks... will reinforce our view...: 'Gold Dust' and 'Gold Drop'; 'Jantzen' and 'Jass-Sea';... 'Steinway Pianos' and 'Steinberg Pianos'... In Co Tiong vs. Director of Patents, this Court unequivocally said that 'Celdura' and 'Cordura' are confusingly similar in sound..." — Illustrating the application of the idem sonans doctrine to find phonetic similarity between marks.
• "[T]he infringer merely introduces negligible changes in an already registered mark, and then banks on these slight differences to state that there was no identity or confusing similarity, which would result in no infringement." — Describing the nature of colorable imitation and the inadequacy of minor variations to avoid liability.
• "[T]here should be 'objective, scientific, and economic standards to determine whether goods or services offered by two parties are so related that there is a likelihood of confusion.'" — Adopting Justice Leonen's observation in Asia Pacific Resources International Holdings, Ltd. v. Paperone, Inc. regarding the need for systematic analysis in trademark confusion cases.

• McDonald's Corp. v. L.C. Big Mak Burger, Inc., 480 Phil. 402 (2004) — Controlling precedent enumerating examples of confusingly similar sounds under the idem sonans doctrine; followed to establish that CEEGEEFER and CHERIFER are phonetically similar.
• Asia Brewery, Inc. v. Court of Appeals, 296 Phil. 298 (1993) — Cited by the RTC and distinguished by the Supreme Court; established factors (consumer age, education, nature of article) for determining infringement, though the Supreme Court found infringement here based on the specific similarities and market conditions.
• ABS-CBN Publishing, Inc. v. Director of Bureau of Trademarks, G.R. No. 217916, June 20, 2018 — Controlling precedent defining colorable imitation as the introduction of negligible changes to a registered mark; applied to reject petitioner's reliance on minor logo differences.
• Asia Pacific Resources International Holdings, Ltd. v. Paperone, Inc., G.R. Nos. 213365-66, December 10, 2018 — Cited for Justice Leonen's observation advocating objective, scientific, and economic standards for determining likelihood of confusion; acknowledged though not determinative of the outcome given the clear similarities.
• San Miguel Pure Foods Company, Inc. v. Foodsphere, Inc., G.R. Nos. 217781 and 217788, June 20, 2018 — Controlling precedent for the proper amount of nominal damages in trademark infringement cases; followed to reduce the award from P500,000.00 to P100,000.00.

• Rule 45, Rules of Court — Procedural basis for the Petition for Review on Certiorari to the Supreme Court.
• Article 2222, Civil Code — Basis for the award of nominal damages for the invasion of a property right (trademark).
• Section 3, Republic Act No. 9711 (Food and Drug Administration Act of 2009) — Cited to establish that BFAD/FDA authority is limited to health product regulation and does not extend to trademark infringement disputes.

Gesmundo, Lazaro-Javier, and Gaerlan, JJ.

• Justice Leonen — Filed a dissenting opinion.