Substantial evidence in trademark “confusing similarity” cases

A finding of similarity does not necessarily equate to a finding of similarity “that is likely to confuse the ordinary purchaser.”

This was the ruling of the Supreme Court  in Innolab Industries, Inc.,, Vs. United Laboratories, Inc. (August 5. 2025 G.R No. 257075)  that involved the "INNOLAB"  and  "UNILAB" marks.

The case involved the application for the "INNOLAB" mark  covering the following goods under the Nice Classification (NCL): (a) Class 3 – soaps, perfumery, oils, cosmetics and cosmetic preparations, personal care, skin care and hair products; and (b) Class 5 – pharmaceutical and sanitary preparations, food supplements, cosmetics and household hazardous substance products.

Unilab argued that Innolab's mark was confusingly similar to its own registered, well-known, and established trademark.

Although  the application for trademark registration  before the Intellectual Property Office of the Philippines  (IPO) was denied primarily due to procedural errors, the Supreme Court reviewed the case records  and found that there appears to be merit in the registrability of the  application.  

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.

Any person who believes they would be damaged by such a mark is allowed by law to file their verified opposition to the registration of the mark, stating the grounds and surrounding facts on which they rely.

 Being an administrative case, such verified opposition is required by the rules on evidence to be supported by substantial evidence, or the kind of evidence that a reasonable person would consider adequate to support a conclusion. The oppositor bears this burden of evidence.

In determining the likelihood of confusion, the Court must consider: [a] the resemblance between the trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely effect on the purchaser; [d] the registrant's express and implied consent and other fair and equitable considerations.

Case law has developed the Dominancy Test and the Holistic or Totality Test.

The Dominancy Test focuses on the similarity of the prevalent or dominant features of the competing trademarks that might cause confusion, mistake, and deception in the mind of the purchasing public disregarding minor differences. Duplication or imitation is not necessary; neither is it required that the mark sought to be registered suggests an effort to imitate. Given more consideration are the aural and visual impressions created by the marks on the buyers of goods, giving little weight to factors like prices, quality, sales outlets, and market segments.

In contrast, the Holistic or Totality Test considers the entirety of the marks as applied to the products, including the labels and packaging, and focuses not only on the predominant words but also on the other features appearing on both labels to determine whether one is confusingly similar to the other as to mislead the ordinary purchaser. The “ordinary purchaser” refers to one “accustomed to buy, and therefore to some extent familiar with, the goods in question.”

The Court utilized the dominancy test rather than the holistic test in  the Innolab case.

SC Senior Associate Justice Marvic  Leonen said that there should be evidence-based standards to determine likelihood of confusion.

Apart from the element of similarity, there is also the element of likelihood of confusion.

Evaluations of likelihood of confusion cannot be left to the subjective determination by the IPO or the courts, which may often rely on ad hoc inferences of similarity in class, physical attributes or descriptive properties, purpose, or points of sale of the goods and services.

The standard for determining likelihood of confusion should be evaluated from the perspective of the consumer, employing scientific methodologies derived from advancements in the fields of competition and economics, rather than merely through the lens of the adjudicator.

This  may be through testimonies of "stringently qualified" witnesses, or market surveys conducted with the appropriate methodology, proper sampling and scope, and the relevant market conditions, subject to several factors that ensure the objectivity.

The Supreme Court  found  that Unilab   failed to present substantial evidence that the similarities between the "INNOLAB" mark and the "UNILAB" mark is of such .a degree as to likely cause confusion among consumers. The alleged confusing similarity between  the marks-whether aural or visual was not sufficiently proven.

Atty. Dennis R. Gorecho is the  Junior Partner who heads the Seafarers’ Division of the Sapalo Velez Bundang Bulilan Law Offices. For comments, e-mail info@sapalovelez.com, or call 0908-8665786.