Prosource International, Inc. vs. Horphag Research Management SA

A trademark is infringed where the competing mark contains the dominant features of a registered mark, creating confusingly similar aural and visual impressions, even if the infringer discontinues the mark prior to the filing of the complaint.

Respondent Horphag Research Management SA owns the trademark "PYCNOGENOL" for a food supplement distributed by Zuellig Pharma Corporation. Petitioner Prosource International, Inc. distributed a similar food supplement under the mark "PCO-GENOLS" starting in 1996. Respondent demanded that petitioner cease using the mark. Petitioner subsequently withdrew the "PCO-GENOLS" products from the market as of June 19, 2000, and changed the mark to "PCO-PLUS" without notifying respondent.

• Trademark Ownership and Use: Respondent is the owner of the registered trademark "PYCNOGENOL," a food supplement sold and distributed by Zuellig Pharma Corporation. Petitioner distributed a similar food supplement using the mark "PCO-GENOLS" beginning in 1996.
• Demand and Discontinuance: Upon discovering petitioner's use of the mark, respondent sent a demand letter dated June 2, 2000, requiring petitioner to cease and desist. Petitioner discontinued the use of, and withdrew from the market, the products bearing the mark "PCO-GENOLS" as of June 19, 2000, changing the mark to "PCO-PLUS" without notifying respondent.
• Pre-trial Admissions: During pre-trial, the parties admitted that respondent's trademark was registered with the Intellectual Property Office (IPO) but not the Bureau of Food and Drug (BFAD), while petitioner's product was registered with the BFAD but not the IPO. Petitioner also admitted discontinuing the use of "PCO-GENOLS" as of June 19, 2000.
• Lower Court Findings: The RTC found the marks confusingly similar, noting the shared suffix "GENOL" and the similar aural effects when pronounced. The CA affirmed the RTC's application of the Dominancy Test.

• Lack of Standing: Petitioner argued that respondent lacked the capacity to file the infringement suit because the registered owner of the trademark "PYCNOGENOL" is Horphag Research Limited, not respondent.
• Absence of Confusing Similarity: Petitioner maintained that the marks "PYCNOGENOL" and "PCO-GENOLS" are not confusingly similar.
• Prior Discontinuance: Petitioner contended that it is not liable for infringement because it had already discontinued the use of the mark and withdrawn the products from the market prior to the institution of the infringement case.

• Confusing Similarity: Respondent countered that the marks are confusingly similar under the Dominancy Test, sharing the suffix "GENOL" and possessing similar aural effects that could mislead purchasers.
• Entitlement to Attorney's Fees: Respondent argued that the award of attorney's fees was proper because it was compelled to litigate to protect its trademark rights.

• Trademark Infringment: Whether the mark "PCO-GENOLS" infringes upon respondent's registered trademark "PYCNOGENOL" due to confusing similarity.
• Attorney's Fees: Whether the award of attorney's fees in favor of respondent was proper.

• Trademark Infringement: Infringement was established because the marks are confusingly similar under the Dominancy Test. The prevalent features, specifically the suffix "GENOL" and the overall aural impression, create a likelihood of confusion among purchasers. The factual findings of the trial court, affirmed by the appellate court, are final and binding. Furthermore, liability for infringement was not negated by petitioner's discontinuance of the mark prior to the filing of the complaint, as unauthorized use from 1996 to June 2000 had already occurred.
• Attorney's Fees: The award of attorney's fees was affirmed. Under Article 2208 of the Civil Code, attorney's fees may be awarded where the court deems it just and equitable, even in the absence of an award of moral and exemplary damages, as respondent was compelled to litigate to protect its interest.

• Dominancy Test — Focuses on the similarity of the prevalent features of competing trademarks that might cause confusion and deception. Courts consider 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. If the competing trademark contains the main, essential, and dominant features of another, and confusion or deception is likely, infringement takes place.
• Holistic or Totality Test — Entails a consideration of the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. The observer must focus not only on the predominant words but also on the other features appearing on both labels to draw a conclusion on confusing similarity.
• Likelihood of Confusion — The gravamen of trademark infringement. It is a relative concept, the existence of which is determined by the particular, and sometimes peculiar, circumstances of each case.

• "In determining similarity and likelihood of confusion, jurisprudence has developed two tests: the Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion and deception, thus constituting infringement."
• "The question is whether the use of the marks involved is likely to cause confusion or mistake in the mind of the public or to deceive purchasers."

• Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R. No. 158589 (2006) — Followed for the definition of a trademark, the elements of infringement under R.A. No. 166 and R.A. No. 8293, and the principle that factual determinations of the trial court affirmed by the CA are binding.
• McDonald’s Corporation v. L.C. Big Mak Burger, Inc., G.R. No. 143993 (2004) — Followed for the application of the Dominancy Test and the idem sonans rule regarding confusingly similar sounds in trademarks.
• Mighty Corporation v. E. & J. Gallo Winery, G.R. No. 154342 (2004) — Followed for the definition and application of the Dominancy and Holistic Tests.

• Section 22, Republic Act No. 166 (Trademark Law) — Defines trademark infringement for acts committed until December 31, 1997, penalizing the unauthorized use of any reproduction, counterfeit, copy, or colorable imitation of a registered mark likely to cause confusion.
• Section 155, Republic Act No. 8293 (Intellectual Property Code) — Defines trademark infringement for acts committed from January 1, 1998, onward, penalizing the unauthorized use in commerce of any reproduction, counterfeit, copy, or colorable imitation of a registered mark or a dominant feature thereof likely to cause confusion.
• Article 2208, Civil Code — Enumerates the instances when attorney's fees and expenses of litigation can be recovered, including when the court deems it just and equitable.

Renato C. Corona, Minita V. Chico-Nazario, Presbitero J. Velasco, Jr., Diosdado M. Peralta.