G.R. No. 190065 - Dermaline, Inc. vs. Myra Pharmaceuticals, Inc.

Case Summary (G.R. No. 190065)

Key Dates

Application filed by Dermaline: October 21, 2006; publication for opposition: March 9, 2007; opposition filed by Myra: May 8, 2007; IPO-Bureau of Legal Affairs Decision No. 2008-70: April 10, 2008; Resolution denying motion for reconsideration: January 16, 2009; appeal to IPO Director General dismissed as late: April 17, 2009; Court of Appeals Decision: August 7, 2009; CA Resolution: October 28, 2009; Supreme Court decision: August 16, 2010.

Applicable Law and Legal Provisions

Primary statutory provisions applied: Republic Act No. 8293 (Intellectual Property Code of the Philippines), specifically Section 123.1(d) on registrability (prohibiting registration of marks identical with a registered mark or nearly resembling such a mark likely to deceive or cause confusion), Section 147 on rights conferred to the owner of a registered mark (exclusive right to prevent third-party use where likelihood of confusion exists), Section 138 on prima facie evidentiary effect of registration, and Section 155.1 on use in commerce of reproductions or dominant features of registered marks. The dispute also involves classification of goods/services (Class 44 for Dermaline’s health and beauty services; Class 5 for Myra’s topical pharmaceutical preparations).

Factual Background

Dermaline applied to register “DERMALINE DERMALINE, INC.” (Application No. 4-2006-011536) for services in Class 44. Myra opposed, asserting that Dermaline’s applied mark so nearly resembles Myra’s registered mark “DERMALIN” (registered July 8, 1986; used commercially since October 31, 1977 and renewed July 8, 2006) that confusion, mistake, and deception are likely. Myra alleged diminution of distinctiveness and dilution of its goodwill and relied on the earlier refusal of Dermaline’s 2003 application for “DERMALINE” under a related proceeding.

Parties’ Contentions

Myra argued that the dominant, salient feature of Dermaline’s mark (the word element “DERMALINE”) is practically identical to “DERMALIN,” that both marks produce the same aural and visual impression (three syllables, similar pronunciation), and that the goods/services are closely related (skin treatments versus topical pharmaceuticals), so confusion of goods or source is likely. Dermaline countered that the marks differ in presentation and overall label, that the entirety of the marks and labels must be considered (Holistic/Totality Test), and that its services in Class 44 are distinct from Myra’s pharmaceutical goods in Class 5, thus precluding confusion.

Procedural History

After preliminary conference and position papers, the IPO-Bureau of Legal Affairs sustained Myra’s opposition and rejected Dermaline’s application (Decision No. 2008-70). Dermaline’s motion for reconsideration was denied (Resolution No. 2009-12(D)), and its appeal to the IPO Director General was dismissed as filed out of time. Dermaline appealed to the Court of Appeals, which affirmed the IPO’s Order and rejection; the CA denied reconsideration. Dermaline then filed a petition for review on certiorari with the Supreme Court.

Issues Presented to the Court

Whether the Court of Appeals erred in upholding the IPO’s rejection of Dermaline’s trademark application on the ground that “DERMALINE DERMALINE, INC.” is confusingly similar to Myra’s registered mark “DERMALIN,” thereby creating a likelihood of confusion in violation of Section 123.1(d) and contrary to the rights conferred by Section 147 of R.A. No. 8293.

Legal Standards Adopted

The Court restated trademark principles: a trademark is a distinctive sign entitled to legal protection. Two judicial tests for likelihood of confusion are recognized and applied: (1) the Dominancy Test — which focuses on whether the applied mark contains the main, essential and dominant features of the earlier registered mark such that confusion or deception is likely (now embodied in Section 155.1 of R.A. No. 8293); and (2) the Holistic or Totality Test — which examines the entirety of the marks, including labels and packaging, to determine overall confusing similarity. Jurisprudence distinguishes between confusion of goods (product confusion) and confusion of business or origin (source confusion). A registered mark’s owner is entitled to prevent third-party use of identical or similar signs where such use would result in a likelihood of confusion (Section 147), and registration is prima facie evidence of validity and exclusive right (Section 138).

Application of Legal Standards to the Facts

The IPO applied the Dominancy Test and found both product and source confusion probable. The Supreme Court agreed. Despite stylistic or label differences in Dermaline’s stylized presentation (script diagonal “DERMALINE” with smaller uppercase “DERMALINE, INC.” below) and Myra’s upright font for “DERMALIN,” the marks are essentially spelled the same except for an added terminal “E” in Dermaline’s mark. The Court emphasized aural and visual impressions: both marks contain three syllables and are pronounced practically the same, with the terminal “E” in “DERMALINE” effectively silent in common pronunciation. The Court highlighted the likelihood of confusion especially where auditory impressions (e.g., rad

Case Syllabus (G.R. No. 190065)

Procedural History

Petition for review on certiorari filed with the Supreme Court seeking to reverse and set aside the Court of Appeals Decision dated August 7, 2009 and the Court of Appeals Resolution dated October 28, 2009 in CA-G.R. SP No. 108627.
Trademark application by petitioner Dermaline, Inc. (Application No. 4-2006011536) filed with the Intellectual Property Office (IPO) on October 21, 2006; published for opposition in the IPO E-Gazette on March 9, 2007.
Respondent Myra Pharmaceuticals, Inc. filed a Verified Opposition on May 8, 2007.
IPO-Bureau of Legal Affairs rendered Decision No. 2008-70 on April 10, 2008 sustaining Myra’s opposition and rejecting Dermaline’s application pursuant to Section 123.1(d) of R.A. No. 8293.
Dermaline’s motion for reconsideration denied by Resolution No. 2009-12(D) dated January 16, 2009.
Dermaline’s appeal to the Office of the Director General of the IPO dismissed as filed out of time by Order dated April 17, 2009.
Dermaline appealed to the Court of Appeals, which affirmed the IPO’s order and the rejection of the mark; the CA denied Dermaline’s motion for reconsideration (Decision dated August 7, 2009; Resolution dated October 28, 2009).
Petition to the Supreme Court was filed; Supreme Court rendered decision on August 16, 2010 denying the petition and affirming the CA decision; costs imposed against petitioner.

Parties and Marks at Issue

Petitioner: Dermaline, Inc. — applied for registration of the trademark “DERMALINE DERMALINE, INC.” (stylized wordmark).
Respondent: Myra Pharmaceuticals, Inc. — owner of the registered mark “DERMALIN,” registered July 8, 1986, renewed for ten years on July 8, 2006, and commercially used since October 31, 1977.
Prior Dermaline application: Dermaline had previously applied for the mark “DERMALINE” on June 3, 2003 and was refused registration by the IPO.

Goods, Services and Classifications Involved

Dermaline’s application: filed under Classification 44 — described services include facial, acne treatment and control, skin peeling, slimming, hair treatments, skin bleaching, dermalift (face lifting, body toning, eyebag removal), excessive sweating treatment, body odor treatment and control, open pores treatment, stretch mark treatment, body massage, eyelash perming, tattoo services (eyebrow, upper and lower lid, lip), various haircut and hair styling services, perming, tint, highlights, cellophane, hair color, hair relaxing, hair treatment/spa, hot oil, full make-up, eye make-up, foot spa with pedicure, foot scrub, manicure, eyebrow threading, upper lip threading, full body massage, half body massage, sauna, and others (as detailed in the source).
Myra’s registered mark: classified under Classification 5 — topical antibacterial, antifungal, antiscabies preparations for the treatment of skin disorders.

Opposer’s (Myra’s) Contentions

Dermaline’s applied mark “DERMALINE DERMALINE, INC.” so resembles Myra’s registered mark “DERMALIN” that it will likely cause confusion, mistake, and deception among the purchasing public.
Registration of Dermaline’s mark would violate Section 123 of R.A. No. 8293.
The applied mark will diminish distinctiveness and dilute the goodwill of Myra’s “DERMALIN.”
Myra’s mark has been used commercially since October 31, 1977, is valid and subsisting, and was registered in 1986 and renewed in 2006.
The dominant feature of Dermaline’s applied mark is the term “DERMALINE,” which is practically identical to “DERMALIN” — first eight letters identical; pronunciation practically identical; both marks have three syllables with each syllable identical in sound and appearance (noting only that Dermaline’s last syllable has an extra letter “E” but pronounced silently).
Dermaline’s prior refusal in 2003 suggests Dermaline’s new application is a fishing expedition for approval.
Myra invoked Section 147 of R.A. No. 8293 to assert exclusive rights and to prevent use of identical or similar signs that would cause likelihood of confusion.
Even though classifications differ, goods and services are closely related because both pertain to skin treatments, so confusion may arise across Class 44 and Class 5.

Applicant’s (Dermaline’s) Contentions

Dermaline argued its trademark “DERMALINE DERMALINE, INC.” and Myra’s “DERMALIN” have entirely different features and distinctive presentation, preventing confusion, mistake, or deception.
In assessing confusing similarity, the entirety of the trademarks, including labels and packaging, must be considered; visual and other features create glaring and striking differences.
Dermaline relied on the argument that its mark speaks for itself (Res ipsa loquitur).
Dermaline contended that its mark pertains to health and beauty services (Class 44), which are different from Myra’s medicinal goods for skin disorders (Class 5), and therefore cannot be related or cause confusion.

Legal Provisions Quoted and Applied

Section 123.1(d) (Registrability): A mark cannot be registered if it is identical with a registered mark belonging to a different proprietor or nearly resembles such a mark as likely to deceive or cause confusion, in respect of the same or closely related goods or services. (text included in source).
Section 147 (Rights Conferred): Owner of a registered mark has exclusive right to prevent third parties from using identical or similar signs for identical or similar goods or services where such use would result in a likelihood of confusion; likelihood of confusion presumed in case of identical signs for identical goods or services. (text included in source).
Section 155.1 (Use in commerce — dominancy concept): Use of any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with sale, distribution, advertising of goods or services where such use is likely to cause confusion, mistake, or deception. (text included in source).
Section 138 referenced: certificate of registration of a mark is prima facie evidence of validity, registrant’s ownership, and exclusive right to use