Case Summary (G.R. No. L-49154)
Key Dates and Applicable Law
Applicable Constitution: 1987 Philippine Constitution (decision date is post-1990).
Primary statute: Republic Act No. 8293, Intellectual Property Code of the Philippines, specifically Section 155 (Remedies; Infringement) and its relation to Section 170 (procedure referenced in the search-warrant application).
Notable jurisprudence cited in the decision: Prosource International, Inc. v. Horphag Research Management SA; McDonald’s Corporation v. MacJoy Fastfood Corporation; McDonald’s Corporation v. L.C. Big Mak Burger, Inc.; Philip Morris, Inc. v. Fortune Tobacco Corporation; Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., Inc.; Del Monte Corporation v. Court of Appeals.
Factual Background
Petitioner holds registered trademarks for “SKECHERS” (Reg. No. 63364) and a stylized “S” within an oval design (Reg. No. 4-1996-110182) with the Intellectual Property Office. Petitioner filed for search warrants at Branch 24, RTC Manila, seeking to seize infringing goods at respondents’ outlet and warehouse. Two search warrants were issued and executed, resulting in the seizure of more than 6,000 pairs of shoes bearing an “S” logo. Respondents moved to quash the warrants, asserting lack of confusing similarity between petitioner’s Skechers shoes and respondents’ Strong shoes.
Procedural History
- RTC (Branch 24, Manila) issued an order on November 7, 2002 quashing the search warrants and directing return of seized goods, concluding no confusing similarity.
- Petitioner filed certiorari with the Court of Appeals (CA); on November 17, 2003 the CA affirmed the RTC’s quashal.
- Petitioner brought the matter to the Supreme Court; on November 30, 2006 the Supreme Court initially dismissed the petition.
- Petitioner and petitioner-intervenor filed motions for reconsideration of the November 30, 2006 decision. The Supreme Court, upon re-examination, issued the resolution at hand granting reconsideration and setting aside the earlier decision.
Issues Presented
The petition and motions for reconsideration framed principally two issues: (1) whether the CA committed grave abuse of discretion by considering defenses on the merits (i.e., guilt or innocence) when reviewing a quashal of search warrants, because the CA should have limited review to whether the trial court abused discretion in quashing; and (2) whether the CA erred in finding no probable cause for trademark infringement where the central question was confusing similarity and whether the seized items constituted infringements under Section 155 of R.A. No. 8293.
Legal Standard for Trademark Infringement
Under Section 155 of R.A. No. 8293, infringement occurs when a person uses in commerce a reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with sale or distribution in a manner likely to cause confusion, mistake, or deception. The essential element is likelihood of confusion. Jurisprudence recognizes two principal tests to determine confusing similarity:
- Dominancy Test: Focuses on the similarity of the dominant or prevalent features of competing marks that would likely produce confusion, emphasizing the aural and visual impressions of the marks themselves.
- Holistic/Totality Test: Considers the totality of the marks as applied to the products, including labels, packaging, and other features, to determine whether the overall impressions would confuse purchasers.
Court’s Analytical Approach and Choice of Test
The Supreme Court re-examined the case and applied the Dominancy Test to the marks at issue. The Court concluded that the stylized “S” is the dominant, eye-catching element of petitioner’s registered mark—even though petitioner’s registered mark also includes an oval design—because the stylized “S” itself is what primarily attracts the purchaser’s attention. Consequently, respondent’s use of the same stylized “S” (even without an oval enclosure) falls within the scope of potential infringement under the Dominancy Test.
Rejection of the CA’s Reasoning and the Superman Analogy
The Court rejected the CA’s reasoning that the letter “S” is too generic to be attributable to petitioner alone and found the CA’s analogy to the Superman “S” to be inapt. The Supreme Court distinguished the specific stylized form of petitioner’s “S” from other “S” logos (e.g., the Superman emblem) by reference to differing shapes and distinctive font elements. The Court concluded the stylized “S” used by respondent, by font and size, is effectively the same stylized “S” for which petitioner holds a registration.
Application of the Holistic Comparison on Product Features
Although the RTC and the CA had relied on the Holistic Test to find no infringement, the Supreme Court examined the overall design and product features and found multiple striking similarities beyond the mark itself:
- Similar color scheme (blue, white, gray);
- Very similar “wavelike” pattern of midsole and outer sole;
- Two elongated designs at the midsole near the heel in essentially the same location;
- Identical number and arrangement of outsole ridges;
- Stylized “S” placed in the same locations (side, tongue) and of similar size;
- Use of identical typography and positioning for phrases like “Skechers Sport Trail” versus “Strong Sport Trail”;
- Two grayish-white semi-transparent circles at the heel collar in the same positions.
The Supreme Court characterized the dissimilarities identified by the lower courts (absence of oval enclosure, presence of the word “Strong,” differences in price and labeling) as trifling
...continue readingCase Syllabus (G.R. No. L-49154)
Case Caption and Parties
- Petitioners: Skechers, U.S.A., Inc. (original petitioner) and Trendworks International Corporation (petitioner-intervenor).
- Respondents: Inter Pacific Industrial Trading Corp. and/or Inter Pacific Trading Corp., Strong Sports Gear Co., Ltd., Strongshoes Warehouse and/or Strong Fashion Shoes Trading, and/or Tan Tuan Hong, Violeta T. Magayaga, Jeffrey R. Morales, and/or any of its other proprietors, directors, officers, employees and/or occupants of its premises located at S-7, Ed & Joe's Commercial Arcade, No. 153 Quirino Avenue, Parañaque City.
- Case citation and procedural identifier: 662 Phil. 11; G.R. No. 164321; Decision rendered March 23, 2011; Second Division.
Relief Sought and Procedural Posture
- Primary relief originally sought by petitioner: issuance of search warrants for respondents' outlet and warehouse for trademark infringement under Section 155 in relation to Section 170 of R.A. No. 8293 (Intellectual Property Code).
- Two search warrants were issued by the RTC (Search Warrant Nos. 02-2827 and 02-2828) and served on respondents’ premises, yielding seizure of more than 6,000 pairs of shoes bearing the "S" logo.
- Respondents moved to quash the search warrants on the ground that there was no confusing similarity between petitioner’s "Skechers" rubber shoes and respondents’ "Strong" rubber shoes.
- RTC Branch 24 of Manila issued an Order on November 7, 2002 quashing the search warrants and directing the NBI to return the seized goods.
- Petitioner filed a petition for certiorari with the Court of Appeals (CA); on November 17, 2003 the CA affirmed the RTC Order.
- Petitioner then elevated the case to the Supreme Court by filing the present petition; petitioner-intervenor filed a petition-in-intervention claiming to be the sole licensed distributor of Skechers products in the Philippines.
- On November 30, 2006 the Supreme Court rendered a Decision dismissing the petition; both petitioner and petitioner-intervenor filed separate Motions for Reconsideration from that Decision.
Issues Presented on Appeal and in Motions for Reconsideration
- Petitioner’s assignments of error (as presented to the Supreme Court):
- Whether the Court of Appeals committed grave abuse of discretion in considering matters of defense in a criminal trial for trademark infringement when deciding the validity of the search warrant, instead of limiting itself to whether the trial court committed grave abuse of discretion in quashing the warrants.
- Whether the Court of Appeals committed grave abuse of discretion in finding respondents not guilty of trademark infringement when the sole triable issue is the existence of probable cause to issue a search warrant.
- Petitioner’s Motion for Reconsideration grounds (summary):
- The Court must re-examine the facts due to significance and repercussions of its decision.
- The seized items were commercial quantities bearing unauthorized reproductions of the "S" trademark intended for distribution in the Philippine market to petitioner’s detriment; returning the goods will adversely affect petitioner’s goodwill and reputation.
- The search warrant court and the CA acted with grave abuse of discretion.
- The search warrant court did not properly re-evaluate evidence presented during search warrant proceedings.
- The Solid Triangle case is not applicable; preliminary findings of guilt were improper.
- The search warrant court overstepped its discretion; the dominancy test should be used.
- The Court of Appeals committed errors of jurisdiction.
- Petitioner-intervenor’s Motion for Reconsideration errors (summary):
- The CA and the search warrant court acted contrary to law and jurisprudence by adopting the holistic test already rejected in determining confusing similarity.
- The CA and search warrant court acted contrary to law in holding there was no probable cause for trademark infringement.
- The CA sanctioned the trial court’s departure from usual judicial proceedings by upholding the quashal of search warrants solely on the basis that there is no confusing similarity.
Factual Background and Evidence Found in the Records
- Petitioner is a registered owner of the trademark "SKECHERS" (Registration No. 63364) and the stylized "S" within an oval design (Registration No. 4-1996-110182) with the Intellectual Property Office.
- Respondent used a stylized "S" mark on its Strong rubber shoes; more than 6,000 pairs of shoes bearing the "S" logo were seized during the raid.
- RTC and CA applied the holistic test and concluded respondents had not infringed petitioner’s trademark, citing dissimilarities including:
- The mark "S" in Strong shoes is not enclosed in an oval design.
- The word "Strong" is conspicuously placed at the backside and insoles.
- Hang tags and labels bear "Strong" for respondent and "Skechers U.S.A." for petitioner.
- Strong shoes are modestly priced compared to Skechers shoes.
- Petitioners argued the seized items were commercial quantities intended for distribution and caused harm to petitioner’s goodwill.
Applicable Law and Legal Standard
- Governing statute: Republic Act No. 8293 (Intellectual Property Code of the Philippines).
- Section 155 (Remedies; Infringement) of R.A. No. 8293 states that any person who, without consent of the owner of a registered mark:
- Uses in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services, where such use is likely to cause confusion, mistake or to deceive; or
- Reproduces, counterfeits, copies or colorably imitates a registered mark or dominant feature thereof and applies such reproduction to labels, signs, prints, packages, wrappers, receptacles or advertisements intended for use in commerce upon or in connection with the sale, etc., of goods or services where such use is likely to cause confusion, mistake or to deceive,
- shall be liable in a civil action for