Wilton Dy and/or Philites Electronic & Lighting Products vs. Koninklijke Philips Electronics, N.V.

A trademark application for "PHILITES" covering lighting products is properly denied under Section 123.1(e) of the Intellectual Property Code where the mark bears confusing similarity to the well-known mark "PHILIPS", as the dominant "PHILI" feature creates visual and aural impressions likely to deceive or cause confusion among consumers, and the applicant's actual use of the mark on packaging reinforces such confusion under the holistic test.

Petitioner Wilton Dy, doing business under Philites Electronic & Lighting Products, manufactured and sold fluorescent bulbs, incandescent lights, starters, and ballasts under the mark "PHILITES," allegedly coined from the words "Philippines" and "lights." Respondent Koninklijke Philips Electronics, N.V. had maintained registered trademark rights in the Philippines for "PHILIPS" and the "PHILIPS SHIELD EMBLEM" since 1922, covering various classes including lighting products, and had established significant goodwill and international recognition in the electrical goods industry.

• The Trademark Application: On April 12, 2000, petitioner Wilton Dy and/or Philites Electronic & Lighting Products filed Application Serial Number 4-2000-002937 for the mark "PHILITES & LETTER P DEVICE" covering fluorescent bulbs, incandescent lights, starters, and ballasts under Class 11.
• The Opposition: Respondent Koninklijke Philips Electronics, N.V., owner of registered trademarks "PHILIPS" and "PHILIPS SHIELD EMBLEM" (evidenced by Certificates of Registration Nos. 42271, 42270, R-1651, R-29134, R-1674, and R-28981), filed a Verified Notice of Opposition on March 17, 2006. Respondent alleged that the approval of petitioner's application would violate Sections 123.1(d), (i), (iii), 123.1(e), 147, and 168 of the IP Code; mislead the public as to the origin, nature, quality, and characteristics of the goods; constitute fraud; dilute the distinctiveness of the PHILIPS mark; and allow petitioner to unfairly profit from respondent's goodwill, fame, and notoriety.
• Petitioner's Defense: Petitioner filed a Verified Answer on August 8, 2006, asserting that "PHILITES" was coined from "Philippines" and "lights," and that the marks differed in spelling, sound, and meaning.
• Initial Administrative Rulings: The IPP-BLA Director rendered a Decision on November 9, 2006, denying the opposition and granting the application. The Bureau found that "PHILITES" was an arbitrary, coined word capable of appropriation, and that visual and aural differences—particularly the final syllable and the absence of the shield emblem elements—prevented confusion. The IPP-DG affirmed this on April 16, 2008, noting the variance in last syllables and "glaring differences" between the shield emblem and the letter "P" device.
• Appellate Reversal: The Court of Appeals reversed on October 7, 2008, finding that the drawing submitted by petitioner had a different appearance from its actual wrapper or packaging, which was confusingly similar to respondent's registered trademark and packaging. The appellate court deemed petitioner's explanation for choosing "PHILITES" self-serving, noting the oddity of selecting a mark containing the same five dominant letters "PHILI" as the well-known "PHILIPS" mark for identical goods, and concluded that petitioner intended to ride on respondent's established reputation.

• Dissimilarity of Marks: Petitioner maintained that "PHILITES" and "PHILIPS" possessed vast dissimilarities in spelling, sound, and meaning, rendering confusion unlikely among consumers.
• Coined Term: Petitioner argued that "PHILITES" constituted a valid arbitrary mark coined from "Philippines" and "lights," capable of registration and protection under trademark law as a distinctive identifier.
• Procedural Compliance: Petitioner asserted that the trademark application complied with formal requirements and that the opposition failed to establish the requisite likelihood of confusion to warrant denial under either the dominancy or holistic test.

• Well-Known Mark Status: Respondent countered that the "PHILIPS" mark constituted a registered and internationally well-known mark in the Philippines since 1922, entitled to broad protection under Section 123.1(e) of the IP Code regardless of petitioner's intent.
• Confusing Similarity: Respondent argued that "PHILITES" was confusingly similar to "PHILIPS," sharing the dominant "PHILI" feature, and that petitioner's actual packaging further replicated respondent's trade dress, creating a likelihood of confusion as to the origin of the goods under both the dominancy and holistic tests.
• Fraudulent Intent: Respondent maintained that petitioner's selection of a mark containing the prevalent "PHILI" letters for identical lighting products evidenced intent to ride on respondent's established reputation and goodwill, constituting unfair competition and trademark dilution.

• Well-Known Mark: Whether respondent's "PHILIPS" mark constitutes a registered and well-known mark in the Philippines.
• Confusing Similarity: Whether the mark "PHILITES" applied for by petitioner is identical or confusingly similar to respondent's mark.

• Well-Known Mark: Respondent's mark is indisputably a registered and well-known mark in the Philippines, as established by prior Supreme Court precedent in Philips Export B.V. v. Court of Appeals and extensive worldwide registration dating back to 1922. Section 123.1(e) of the IP Code prohibits registration of marks confusingly similar to well-known marks, whether registered or not, and the "competent authority" for such determination includes the Court, the Director General, and the Director of the Bureau of Legal Affairs pursuant to Rule 100(a) of the Trademark Rules.
• Confusing Similarity: The mark "PHILITES" bears confusing similarity to "PHILIPS" under both the dominancy and holistic tests. Under the dominancy test, the prevalent "PHILI" feature creates visual and aural impressions likely to deceive or cause confusion among ordinary purchasers, notwithstanding the difference in final syllables. Under the holistic test, consideration of the entirety of the marks as applied to the products, including labels and packaging, reveals strong similitude likely to cause deception or confusion, particularly where petitioner's actual packaging employed colors and designs confusingly similar to respondent's established trade dress.

• Dominancy Test — This test focuses on the similarity of the prevalent or dominant features of competing trademarks that might cause confusion, mistake, and deception in the mind of the purchasing public. Duplication or imitation is not necessary; neither is it required that the mark sought to be registered suggests an effort to imitate. Given more consideration are the aural and visual impressions created by the marks on the buyers of goods, giving little weight to factors like prices, quality, sales outlets, and market segments. The Court applied this test to find that the identical "PHILI" dominant feature in both marks created confusing similarity.
• Holistic or Totality Test — This test necessitates consideration of the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing on both labels so that the observer may draw conclusion on whether one is confusingly similar to the other. The Court utilized this test to find that petitioner's actual packaging, which differed from its submitted drawing, reinforced the likelihood of confusion with respondent's packaging.
• Protection of Well-Known Marks — Section 123.1(e) of the IP Code prohibits registration of a mark that is identical with, or confusingly similar to, or constitutes a translation of a mark considered by the competent authority to be well-known internationally and in the Philippines, whether or not it is registered here. The competent authority includes the Court, the Director General, the Director of the Bureau of Legal Affairs, or any administrative agency or office vested with quasi-judicial or judicial jurisdiction to hear and adjudicate actions to enforce rights to a mark.

• "A trademark is 'any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof, adopted and used by a manufacturer or merchant on his goods to identify and distinguish them from those manufactured, sold, or dealt by others.' It is 'intellectual property deserving protection by law,' and 'susceptible to registration if it is crafted fancifully or arbitrarily and is capable of identifying and distinguishing the goods of one manufacturer or seller from those of another.'" — Articulating the definition and protectable nature of trademarks under Philippine law.
• "Section 123.1(e) of R.A. No. 8293 now categorically states that 'a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here,' cannot be registered by another in the Philippines." — Establishing the statutory basis for protecting well-known marks regardless of local registration.
• "The dominancy test focuses on 'the similarity of the prevalent or dominant features of the competing trademarks that might cause confusion, mistake, and deception in the mind of the purchasing public. Duplication or imitation is not necessary; neither is it required that the mark sought to be registered suggests an effort to imitate. Given more consideration are the aural and visual impressions created by the marks on the buyers of goods, giving little weight to factors like prices, quality, sales outlets, and market segments.'" — Defining the dominancy test for determining confusing similarity.
• "The holistic or totality test necessitates a 'consideration of the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. The discerning eye of the observer must focus not only on the predominant words, but also on the other features appearing on both labels so that the observer may draw conclusion on whether one is confusingly similar to the other.'" — Defining the holistic test for trademark comparison.
• "Applying the dominancy test in the instant case, it shows the uncanny resemblance or confusing similarity between the trademark applied for by respondent with that of petitioner's registered trademark. An examination of the trademarks shows that their dominant or prevalent feature is the five-letter 'PHILI', 'PHILIPS' for petitioner, and 'PHILITES' for respondent." — Application of the dominancy test to the specific marks at issue.

• Fredco Manufacturing Corporation v. Harvard University, 665 Phil. 374 (2011) — Cited for the interpretation of Section 123.1(e) regarding the protection of well-known marks regardless of registration status in the Philippines.
• Philips Export B.V. v. Court of Appeals, G.R. No. 96161, February 21, 1992, 206 SCRA 457 — Controlling precedent establishing that "PHILIPS" is a well-known mark registered in the Philippines since 1922 with international recognition.
• Skechers USA v. Inter Pacific Industrial Trading Corp., 662 Phil. 11 (2011) — Cited for the definitions and application of the dominancy and holistic tests for determining confusing similarity between competing marks.
• Prosource International Inc. v. Horphag Research Management, 620 Phil. 539 (2009) — Cited regarding the application of the dominancy test in trademark disputes.
• Philip Morris Inc. v. Fortune Tobacco Corporation, 526 Phil. 300 (2006) — Cited regarding the application of the holistic test in determining confusing similarity.

• Section 122, Republic Act No. 8293 (Intellectual Property Code of the Philippines) — Establishes that rights to a mark shall be acquired through registration validly made in accordance with the provisions of the law.
• Section 123, Republic Act No. 8293 — Enumerates the grounds for which a mark cannot be registered, including identity or confusing similarity to registered marks (Sec. 123.1(d)) and to well-known marks (Sec. 123.1(e)).
• Section 123.1(d), Republic Act No. 8293 — Prohibits registration of marks identical with a registered mark belonging to a different proprietor 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.
• Section 123.1(e), Republic Act No. 8293 — Prohibits registration of marks identical with, or confusingly similar to, or constituting a translation of a mark considered by the competent authority to be well-known internationally and in the Philippines, whether or not registered here, used for identical or similar goods or services.
• Rule 100(a), Rules and Regulations on Trademarks, Service Marks, Tradenames and Marked or Stamped Containers — Defines "competent authority" for purposes of determining whether a mark is well-known as including the Court, the Director General, the Director of the Bureau of Legal Affairs, or any administrative agency or office vested with quasi-judicial or judicial jurisdiction.

Teresita J. Leonardo-De Castro, Mariano C. Del Castillo, Estella M. Perlas-Bernabe, Alfredo Benjamin S. Caguioa