Published — June 22, 2017
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Related Article: Giving your business its own identity
In today’s time where competition is too stiff in the market, established businesses continue to thrive because of their reputation, among others, which they have established over the years. When customers purchase their products or engage their services, part of what they are paying for is the confidence that a certain product or service meets their expectation.
The trademark(s) of a business is a valuable business asset, evoking an image and a set of desired qualities associated with the mark leading customers to purchase their product. Surely, a company’s reputation was not built overnight. It involves a long and meticulous process crafted through the years, carefully establishing the product’s or service’s relevance and superiority over the others.
That is why it is depressing, to say the least, when newcomers, instead of making their own mark, take the short and easy route by copying a mark. With the advent of technology and Internet, trademark infringement has become a commonplace, which is resorted to by some enterprising businesses (pun intended) to cash in on the goodwill, reputation and/or prestige established by a registered trademark. There is infringement when an unauthorized copy, counterfeit or colorable imitation of a registered mark is used in connection with selling or advertising of goods, when such use is likely to cause confusion.
In determining likelihood of confusion, Philippine jurisprudence adopts (1) the dominancy test, and (2) the holistic test. The dominancy test focuses on the similarity of the dominant and prevalent features of competing trademarks that may cause confusion or deception in the mind of the purchasing public, while the holistic test considers the entirety of the marks as applied to the products, including the labels, packaging and other features, in determining confusing similarity. The Intellectual Property Code [R.A. No. 8293], however, is inclined toward the dominancy test by saying that persons who use in commerce “any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof” commit infringement.
An interesting example is the imitation of the stylized “S” owned by Skechers USA by a local shoe manufacturer for its “Strong” rubber shoes. More than 6,000 pairs of shoes bearing the mark “STRONG” (with the “S” being similar to the mark owned by Skechers) were seized. Strong claimed that an ordinary and prudent purchaser would not likely be misled to purchasing the wrong article because there were glaring differences between the marks “S” and “Strong” (particularly the absence of Sketchers’ oval design on Strong’s shoes). However, the Court still ruled that there was infringement, noting that the dominant feature of the mark is the stylized “S”, which was confusingly similar with that of Skechers, and that was what catches the eye of the purchaser [See: G.R. No. 164321].
Since trademarks are protected, and considered a property right even, the Intellectual Property Code attaches both civil and criminal liability on those who would be found guilty of infringement. This is to give teeth to the protection afforded by law to registered trademarks. Thus, for victims of trademark infringement, you may establish infringement by proving the following:
(1) The trademark being infringed is registered in the Intellectual Property Office (IPO);
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or the infringing mark or trade name is applied to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services;
(4) The use or application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive purchasers or others as to the goods or services themselves or as to the source or origin of such goods or services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.
The Intellectual Property Code provides for the civil and administrative sanctions against those who commit infringement of trademark, such as:
(1) The owner of a registered mark may recover damages from any person who infringes his rights, which shall either be the reasonable profit which the complaining party would have made were it not for the infringement, or the profit which the defendant actually made out of the infringement. If the amount of damages cannot be ascertained with reasonable certainty, then it shall be the reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party. If the infringement was committed with actual intention to mislead the public or to defraud the trademark owner, the court is allowed to double the amount of damages.
(2) On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales.
(3) The complainant, upon proper showing, may also be granted injunction to prevent the infringer from using the mark.
(4) The court may order that goods found to be infringing be destroyed without any compensation. All labels, signs, prints, packages, wrappers, receptacles and advertisements in the possession of the defendant bearing the registered mark, or any reproduction, counterfeit, copy or colorable imitation thereof, all plates, molds, matrices and other means of making the same, shall be delivered up and destroyed.
Administrative complaints for violation of intellectual property rights may likewise be filed before Bureau of Legal Affairs of the IPO, which includes infringement of trademarks. The said Bureau is empowered by law to impose administrative fines in such amounts as may be deemed reasonable by the Director of Legal Affairs, which in no case shall be less that P5,000.00 but not more than P150,000.00, with an additional P1,000.00 fine for each day of continuing violation.
Aside from such civil and administrative actions, a criminal complaint may likewise be initiated before the prosecutor’s office of the place where the infringement was committed. If after conducting preliminary investigation the prosecutor found that infringement may have probably been committed, a criminal case shall then be filed in court where a warrant of arrest may be issued against the accused. Upon conviction, the infringer may be penalized by imprisonment ranging from 2 years to 5 years, and a criminal fine ranging from P50,000.00 to P200,000.00.
For sure, the State recognizes that an effective intellectual property system is vital to the development of businesses and creative activities, thus providing for civil, administrative and criminal recourse once intellectual property rights are transgressed. There is still no substitute to fair conduct of business, and respect to the intellectual creation of fellow entrepreneurs, and that is exactly what the law seeks to preserve.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding trademark infringement, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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