Title
Innolab Industries, Inc. vs. United Laboratories, Inc.
Case
G.R. No. 257075
Decision Date
Aug 5, 2025
IPOPHL trademark dispute: "INNOLAB" vs "UNILAB." Procedural lapse shouldn't bar substantive justice. Likelihood of confusion?
trademark
intellectual property
trademark registration
A

Case Summary (G.R. No. 257075)

Factual Background of the Trademark Application and Opposition

On July 29, 2015, Innolab filed Trademark Application No. 4-2015-008549 with the IPOPHL to register the trademark “INNOLAB”. The application covered, under the Nice Classification, (a) NCL Class 3 goods and (b) NCL Class 5 goods, which included pharmaceutical and sanitary preparations, food supplements, and cosmetics, among others.

After the issuance of a notice of allowance and its publication in the Electronic Gazette, Unilab filed a Verified Notice of Opposition. The opposition rested on the assertion that Innolab’s prospective registration would cause damage to Unilab’s existing registered marks due to confusing similarity. Unilab supported its opposition by citing and presenting evidence of its own registered trademark “UNILAB”, along with renewals of registration and evidence of use, including affidavits and declarations and scanned images showing products bearing “UNILAB and LOGO.” It also presented a certification from the Philippine Patent Office evidencing registration of “UNILAB” dated May 25, 1983.

Procedural Developments Before the BLA

Upon filing of the opposition, the IPOPHL issued to Innolab a Notice to Answer. Innolab did not file an Answer, and the BLA subsequently declared Innolab in default in an Order dated February 28, 2017. Innolab later claimed it had not received the Notice in a manner that permitted immediate action by its appropriate officers, asserting that the Notice to Answer was not properly recorded, logged, or transmitted within its organization.

BLA Decision on the Opposition

In a Decision dated April 19, 2017, the BLA sustained the opposition. It denied Innolab’s trademark application and directed the return of the filewrapper of the application to the Bureau of Trademarks for appropriate action. Innolab then appealed to the BLA by filing its Appeal Memorandum.

Denial of Appeal by the BLA Director and the ODG’s Refusal to Reach the Merits

In an Order dated June 13, 2017, the BLA director denied Innolab’s appeal, citing IPOPHL Memorandum Circular No. 16-007, which provides that an appeal shall be immediately denied if it is filed out of time and/or is not accompanied by the payment of the applicable fee. The BLA director found that the appeal memorandum was not accompanied by the filing fee.

Innolab thereafter filed another Appeal Memorandum with the ODG on July 3, 2017, seeking that the appeal be heard on the merits. Innolab explained that the failure to pay the appeal fee was attributable to counsel’s lapse, involving counsel’s failure to verify whether the required fee had indeed been paid.

In a Decision dated December 20, 2019, the ODG affirmed the BLA and dismissed the appeal outright. The ODG acknowledged Innolab’s stated reason but ruled that liberal interpretation of procedural rules applies only upon demonstrable merit and under justifiable circumstances. The ODG held that counsel’s negligence was not excusable and therefore did not reach the substantive issues.

CA Review and Its Reliance on Both Procedure and Merits

Innolab filed a Petition for Review under Rule 43 before the CA, arguing that the IPOPHL erred in dismissing the appeal outright. In its Decision dated December 4, 2020, the CA denied the petition. It held that the right to appeal is not a natural right or part of due process but a statutory privilege. Because Innolab failed to pay the appeal fee as required by IPOPHL rules, the BLA ruling became final and executory. The CA also held that counsel’s failure bound the client.

The CA nevertheless discussed the merits. It agreed with the IPOPHL that the marks are confusingly similar under the governing statutory framework. The CA reasoned that “INNOLAB” and “UNILAB” sound the same and share identical letter patterns in key portions—specifically the second letter “N” and the last three letters “LAB”—that both have three syllables, and that they are pronounced with similar intonation. The CA therefore concluded that registration was barred by Section 123.1(d) of the Intellectual Property Code.

The CA denied reconsideration in a Resolution dated June 23, 2021, prompting Innolab’s Rule 45 petition to the Supreme Court.

Issues Presented to the Supreme Court

The Supreme Court confronted whether the CA erred in affirming both the procedural dismissal of Innolab’s appeal and the substantive rejection of its trademark application. Innolab argued that the IPOPHL erred by applying procedural rules strictly and rigidly, and that “INNOLAB” was not confusingly similar to “UNILAB.” It also insisted that its mark would not unjustly benefit from Unilab’s claimed goodwill.

Unilab responded that Innolab’s arguments before the Supreme Court merely reiterated matters previously raised before the IPOPHL and the CA, and it echoed the CA’s position that the marks were confusingly similar.

Legal Reasoning I: Administrative Proceedings Require Liberality, Not Rigid Procedure

The Supreme Court granted the Petition and held that the CA erred in affirming the IPOPHL’s denial of the trademark application. It began by reaffirming that the general rule in proceedings before administrative agencies is liberality. Procedural rules must not be strictly and rigidly applied if such rigidity would frustrate justice or deprive parties of substantive rights. Quasi-judicial administrative bodies such as the IPOPHL are not bound by technical rules of procedure, subject only to limitations imposed by due process.

The Court noted the procedural defect: Innolab filed its appeal but failed to pay the filing fee at the time of filing, which is described as a ground to dismiss an appeal outright under Rule 9, Section 2(a) of IPO Memorandum Circular No. 16-007. Nonetheless, the Supreme Court ruled that since the nonpayment did not breach the due process rights of any party, the ODG erred in dismissing the appeal outright by rigidly applying procedural rules. The Court viewed the outright dismissal as sacrificing the purpose of procedural rules, which is to assist parties in obtaining a just, speedy, and inexpensive determination of their claims and defenses.

Because dismissal deprived the parties of a genuine opportunity to be heard by a tribunal with specialized expertise, the Supreme Court held that the IPOPHL should have allowed Innolab to rectify its error and belatedly pay the appeal fee, then proceed to hear the appeal on the merits. It further held that the nonpayment of the appeal fee at the time of filing should not have rendered the BLA decision final in the particular circumstances, and that the CA likewise erred in affirming the dismissal of Innolab’s appeal on procedural grounds.

Legal Reasoning II: The Supreme Court Would Not Sustain Merits Conclusions Without Evidence-Supported Findings

Although the CA affirmed dismissal on procedural grounds, it also discussed the substantive question of confusing similarity. The Supreme Court agreed that there was some degree of similarity between the marks. Still, it emphasized that the oppositor bears the burden not only to show similarity, but also to show that the similarity is to such an extent as to likely confuse the ordinary purchaser. It recognized that these determinations are usually questions of fact, typically resolved by tribunals that evaluate evidence, and that the Supreme Court is generally not a trier of facts.

The Court acknowledged exceptions allowing factual review in certain circumstances, but it focused on a critical evidentiary deficiency: both the CA and the IPOPHL allegedly failed to cite specific evidence to support a finding of likelihood of confusion. The Court reasoned that respondent did not present evidence showing that any similarities between “INNOLAB” and “UNILAB” were likely to confuse ordinary purchasers of the goods in question.

The Supreme Court therefore held that the CA’s and IPOPHL’s conclusion could not stand because the legal finding of likelihood of confusion lacked evidentiary anchoring.

Legal Reasoning III: Similarity Is Distinct From Likelihood of Confusion Under the Intellectual Property Code

The Court then examined the statutory framework in more detail. Under the Intellectual Property Code, a mark cannot be registered if it nearly resembles a registered mark belonging to a different proprietor as to be likely to deceive or cause confusion. The Court stressed that it is not enough that the marks nearly resemble each other. There is a separate and additional requirement: likelihood of confusion.

In administrative inter partes proceedings, a verified opposition must be supported by substantial evidence, meaning evidence that a reasonable mind would find adequate to support a conclusion. Thus, respondent as oppositor had to present substantial evidence of likelihood of confusion, not merely assertions of resemblance.

While the CA had upheld the IPOPHL’s reliance on the dominancy test and framed the finding of likelihood of confusion using factors drawn from prior rulings and decisions—including references to the resemblance between marks, likely effect on purchasers, and related considerations—the Supreme Court found that the tribunals did not adequately specify or support each required element with evidence.

The Court also clarified doctrinally that even where a dominancy test is properly used to identify dominant features, the inquiry does not stop at similarity. The key question remains whether those similarities are likely to deceive or cause confusion among ordinary purchasers.

The Burden of Evidence Was Not Met by Respondent in This Record

The Supreme Court concluded that respondent failed to prove likelihood of confusion with substantial evidence. It rejected respondent’s arguments that likelihood of confusion could be inferred merely because both marks relate to goods under the same NCL Class 5. It noted that jurisprudence has moved away from product classification alone as a determinant of relatedness, and that respondent’s own evidence un

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