G.R. No. 188996 - Seri Somboonsakdikul vs. Orlane S.A.

Case Summary (G.R. No. 188996)

Background and Factual Summary

On September 23, 2003, petitioner Seri Somboonsakdikul filed an application for the trademark LOLANE covering various personal care products under Class 3. Orlane S.A., the respondent, opposed the application, claiming that LOLANE was confusingly similar to its registered mark ORLANE. Orlane S.A. asserted prior ownership of the ORLANE mark, first used in 1948 and registered in the Philippines in 1967, for perfumes, cosmetics, and other personal care items under Class 3. Additionally, respondent filed another application in 2003 for an expanded list of related personal care goods. Orlane S.A. argued that the ORLANE mark had acquired a high degree of distinctiveness, goodwill, and reputation worldwide and in the Philippines. Respondent suggested bad faith on the part of petitioner, alleging petitioner’s LOLANE mark was first used only in August 2003.

Petitioner's Defense and Contentions

Petitioner denied confusing similarity and asserted lawful ownership of the LOLANE mark, with first use worldwide in Vietnam in 1995 and continuous marketing and advertisement globally, including the Philippines. Petitioner claimed that LOLANE and ORLANE were not confusingly similar either visually, aurally, or in general appearance, applying both the dominancy and holistic tests. Petitioner argued that ORLANE was in plain block letters while LOLANE was stylized with distinct lettering, and that pronunciation differed. Petitioner further noted the use of Thai characters on LOLANE products versus the "Paris" mark on ORLANE products, suggesting consumers would not be confused. Petitioner invoked prior IPO allowance of coexistence between marks containing common syllables and referenced decisions by foreign intellectual property offices ruling no confusion between LOLANE and ORLANE.

Proceedings Before the Intellectual Property Office (IPO)

The IPO Bureau of Legal Affairs (BLA) denied the application for LOLANE, finding a likelihood of confusion based on similarities such as both marks having six letters with the same last four letters "LANE," usage for similar products, and similar syllabic structure. The BLA ruled that the marks were likely to cause confusion among consumers. The IPO Director General affirmed this decision, emphasizing that ORLANE was a fanciful, highly distinctive mark, and that the similarity in the suffix "LANE" was significant due to visual and aural aspects. The IPO rejected petitioner’s reliance on foreign decisions and stated that the law does not require marks to be identical to produce confusion.

Court of Appeals (CA) Decision

The CA denied petitioner’s appeal and upheld the IPO’s findings. It applied the dominancy test, concluding that the suffix "LANE" was the dominant part of both marks due to the striking similarity in spelling and pronunciation. The CA emphasized that the marks shared the same number of syllables and produced similar sounds when pronounced. It rejected petitioner’s arguments regarding the different pronunciation of ORLANE based on its French origin and the dissimilarity of market segments. The CA also found unreasonable the petitioner’s claim that the cheaper cost of LOLANE products would eliminate confusion, noting that consumers across income levels could be misled. The CA distinguished the case from prior IPO decisions on other marks containing "LANE" and dismissed foreign decisions because they lacked binding effect in the Philippines. The CA further held that the IPO Director General was not bound by the Trademark Examiner’s earlier favorable findings regarding the application.

Issue Presented to the Supreme Court

Whether the mark LOLANE is confusingly similar to the registered mark ORLANE so as to bar its registration under the Intellectual Property Code of the Philippines.

Applicable Law on Trademark Registrability and Likelihood of Confusion

Under Section 123.1(d) and (e) of Republic Act No. 8293, a mark cannot be registered if it is identical or confusingly similar to a previously registered mark covering identical or related goods and likely to cause deception or confusion. The Supreme Court reiterated that likelihood of confusion arises from "colorable imitation," defined as such similarity in form, sound, meaning, or general appearance that would likely mislead ordinary purchasers.

The Court's Analysis on Likelihood of Confusion

The Court recognized the established canons in trademark law concerning the assessment of confusing similarity, focusing primarily on the dominancy and holistic tests. The dominancy test considers dominant features likely to cause confusion in the purchasing public, emphasizing aural and visual impressions rather than extraneous factors such as sales outlets or pricing. The holistic test looks at the marks as a whole, including packaging and design.

While the CA correctly employed the dominancy test, the Supreme Court disagreed with its conclusion. Notably, the Court found:

Significant visual differences between LOLANE and ORLANE, including stylization and lettering;
Aural differences, with distinct pronunciations of the first syllables ("LO" vs. "OR") and the suffix “LANE,” which is pronounced differently in each mark;
The suffix "LANE" is weak as a trademark element since it appears in various other marks in the same class and is not exclusively associated with ORLANE;
The CA’s assumption that Filipinos invariably pronounce ORLANE as "OR-LEYN" is baseless and unfounded;
Foreign decisions and the Trademark Examiner’s preliminary assessment are not binding and insufficient t

Case Syllabus (G.R. No. 188996)

Background and Parties

Petitioner Seri Somboonsakdikul filed an application on September 23, 2003, to register the trademark "LOLANE" under Class 3 for personal care products with the Intellectual Property Office (IPO) of the Philippines.
Respondent Orlane S.A. opposed the registration, claiming prior ownership of the mark "ORLANE," first used in 1948 and registered in the Philippines since 1967 for related products under Class 3.
Orlane S.A. argued that "LOLANE" was confusingly similar to “ORLANE” in presentation, appearance, and pronunciation, constituting infringement.
Petitioner claimed lawful ownership of the "LOLANE" mark with first worldwide use in Vietnam in 1995 and continuous marketing in the Philippines and internationally.

Trademark Applications and Opposition

Respondent’s opposition was based on:
- Prior first use and long-standing registration of "ORLANE."
- The mark "ORLANE" covering a wide range of personal care products, including perfumes, cosmetics, skincare, and toiletries.
- Allegations of bad faith by petitioner due to "LOLANE" first usage just before the application in August 2003.
- Claim that "ORLANE" had acquired goodwill, reputation, and was well-known in the Philippines and worldwide.
Petitioner denied these allegations, arguing the two marks are visually and aurally distinct and that the dominant features differ.

Case Developments Before the IPO and Bureau of Legal Affairs

The Bureau of Legal Affairs (BLA), after examination, rejected petitioner’s application, finding:
- The marks "ORLANE" and "LOLANE" shared the last four letters “LANE” and had similar pronunciations.
- Both marks pertain to the same class of goods (Class 3), increasing likelihood of confusion.
- The dominant feature of both marks was the suffix “LANE,” leading to colorable imitation.
Petitioner’s motion for reconsideration was denied, the BLA emphasizing that likelihood of confusion does not require absolute identicality but sufficient similarity likely to confuse the public.
IPO Director General affirmed BLA’s decision, supporting the finding of strong visual and aural resemblance.
The Director General noted the fanciful and highly distinctive nature of the mark "ORLANE" and dismissed petitioner’s reliance on foreign judgments as non-precedential.

Petition Before the Court of Appeals

Petitioner filed a petition for review before the Court of Appeals (CA), arguing:
- No confusing similarity exists between "LOLANE" and "ORLANE."
- The suffix "LANE" is not the dominant feature, especially since the marks are plain word marks, and the dominancy test was inapplicable.
- IPO had previously allowed registration of other marks containing “LANE” (e.g., "GIN LANE") for Class 3 goods.
- Foreign rulings by trademark offices in Australia and Singapore found no confusion between "LOLANE" and "ORLANE."
- The Trademark Examiner found no conflicting mark during substantive examination, implying no confusing similarity.
The CA denied petitioner’s petition, affirming the IPO's fi