Republic of the Philippines

Court of Appeals
Manila

SPECIAL FOURTEENTH DIVISION

NIKON CORPORATION CA-G.R. SP No. 154367

Petitioner,
Members:

BUESER, Chairman,
FIEL-MACARAIG &
-versus- AMPUAN,* JJ.

Promulgated:
ISCO HOLDING CORPORA-
TION
Respondent. 26 AUG 2020

x-----------------------------------------------x

DECISION

FIEL-MACARAIG, J.:

This is a Petition for Review1 under Rule 43 of the 1997

Rules of Civil Procedure, assailing the Decision2 of the Office of the
Director General of the Intellectual Property Office of the Philip-
pines (IPO-ODG) dated 20 December 2017 in Appeal No. 14-2016-
0029, which disposed, to wit:

Wherefore, premises considered, the appeal is hereby

granted. The opposition must be dismissed.

Let a copy of this Decision be furnished the Director of

Bureau of Legal Affairs for appropriate action. Further, let also

1* Designated as Acting Junior Member per Office Order No. 210-20-RSF dated 24 August 2020.
Rollo, pp. 11-46.
2Id., pp. 80-86.
 CA-G.R. SP No. 154367
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the Director of Bureau of Trademarks and the library of the
Documentation, Information and Technology Transfer Bureau
be furnished a copy of this decision for information, guidance,
and records purposes.

SO ORDERED.

The Antecedents

Petitioner Nikon Corporation (petitioner) is a corporation

organized and existing under and by virtue of the laws of Japan.
On the other hand, respondent ISCO Holding Corporation (re-
spondent) is a corporation duly organized and existing under and
by virtue of the laws of the Philippines.

On 25 September 2009, respondent filed Trademark Appli-

cation No. 4-2009-009807 for “NIKON & DESIGN” for use on
home and household goods and appliances under Classes 7, 9, 11,
14, 213 of the Nice Classification of goods and services. The mark
appears as follows:

3Under Class 7: washing machine; vacuum cleaners; floor polishers; electric blender; electric juicer;
electric coffee maker; electric food processor; water pumps; under Class 9: television; mp3/mp4 play-
er; dvd; component; disc players/recorders; radio; speakers; amplifiers; electric fans; ceiling fans; orbit
fans; box fans; industrial fans; exhaust fans; air coolers; air humidifiers; air cleaners; ionizers; comput -
ers; flat iron; under Class 11: air conditioners; gas range; electric range; range hoods; gas stoves; elec-
tric stoves; rice cooker; over toaster; turbo broiler, induction cooker; electric oven; deep fryer; grillers,
sandwich makers, food steamer; bread maker; water purifier; electric airpot; flashlights; rechargeable
lights; cfl; led bulbs; lighting consumables and equipments; hair dyer; refrigerator; freezers; under
Class 14: wall clocks; under Class 21: non-electric blender, juicer, coffee maker, food processor, jug,
kettle, airpot, vacuum flask, water jug, water dispenser, water containers, coolers, rice dispenser.
 CA-G.R. SP No. 154367
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[The anchor is in blue color, while the word “Nikon” below

it is in red.]

After the application was published, petitioner filed an Un-

verified Notice of Opposition.4

On 24 January 2011, petitioner filed its Verified Notice of Op-

position5 asserting that: “(i) [it] was the true owner, prior regis-
trant, and user of the NIKON mark; (ii) its mark is well-known;
(iii) [respondent’s] NIKON mark is confusingly similar to its
NIKON mark; and (iv) [it] would be damaged if [respondent’s]
NIKON mark was registered.”6 Petitioner’s mark appears as fol-
lows:

Although not doing business in the Philippines, petitioner

manifested that it has registered its NIKON mark in the country
since 4 August 1981. On 29 June 2004, the Intellectual Property of
the Philippines (IPO) issued a Certificate of RENEWAL of Registra-
tion7 in favor of petitioner, extending its registration for another
10 years from 4 August 2001.

4Rollo, pp. 99-109.

5Id., pp. 126-140.
6Id., pp. 14-15.
7Id., p. 313.
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In its Answer,8 respondent contended that the opposition

should be dismissed, on the ground of res judicata or law of the
case. It made reference to two cases decided by the Director of the
Bureau of Legal Affairs of the IPO (IPO-BLA) in 2006: IPC Case
Nos. 4091 and 4092, both entitled Nikon Corporation v. Nikon Indus-
trial Corporation. It averred that in these cases, the IPO-BLA ruled
in principle that the mark NIKON can be used for household ap-
pliances, without infringing on petitioner’s mark since the latter is
used only for cameras and the like. To the respondent, the present
opposition should be decided in accordance with these IPO-BLA
decisions.

In its Reply,9 petitioner added that the NIKON mark should

be protected as it is likewise its business name or trade name. It
also pointed out that respondent did not specifically deny, and
thus admitted, the following: (1) that their marks are confusingly
similar; (2) that petitioner is the prior user and registrant of the
mark; and (3) petitioner’s NIKON is a well-known mark. Further-
more, it avers that the doctrine of res judicata is not applicable in
this case since not only is there no identity of parties between this
case and IPC Case Nos. 4091 and 4092, there is also no judgment
on the merits in the previous cases because the applicant therein
was considered to have abandoned or withdrawn the application
of the mark. Finally, it asserts that the law of the case is inapplica-
ble since the present case is an entirely new one, and not a pro-
ceeding subsequent to IPC Case Nos. 4091 and 4092.

8Id., pp. 763-764.

9Id., pp. 799-826.
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Thereafter, petitioner submitted its Position Paper (for the Op-

poser);10 respondent, on the other hand, submitted a Memorandum
(for the Respondent).11

On 27 October 2015, petitioner submitted a Manifestation and

Submission,12 presenting two recently decided cases by the IPO-
BLA, entitled Nikon Corporation v. San Mateo Rubber Corporation 13
(San Mateo Rubber Cases). Petitioner pointed out that in these cas-
es, the IPO-BLA re-affirmed the well-known status of its NIKON
mark. Moreover, petitioner contended that the mere use by a
third party of the NIKON mark will cause dilution and/or restrict
the expansion of its business.

On 1 March 2016, the IPO-BLA rendered its Decision,14 the

decretal portion of which, reads:

WHEREFORE, premises considered, the instant Opposi-

tion to Trademark Application No. 4-2009-009807 is hereby
SUSTAINED. Let the filewrapper of the subject trademark ap-
plication be returned, together with a copy of this Decision, to
the Bureau of Trademarks for information and appropriate ac-
tion.

SO ORDERED.15

Finding respondent’s mark to be identical with that of peti-

tioner, the IPO-BLA ruled that respondent’s use of the mark “is
likely to cause deception or confusion; would indicate a connec-
tion between the [respondent’s] goods and the [petitioner] where-

10Id., pp. 887-921.

11Id., pp. 921-925.
12Id., pp.928-951.
13Id., pp. 949-951.
14Id., pp. 976-982.
15Id., p. 982.
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by damaging to the latter’s interests; and/or mislead the public.”16

It also sustained petitioner’s contention that NIKON is a well-
known mark, and that respondent’s goods are similar or closely
related to those of petitioner. Lastly, it found that respondent’s
use of NIKON is contrary to law, particularly Section 165.3 of R.A.
9283, otherwise known as the “Intellectual Property Code of the
Philippines” (IP Code), considering that the mark is also petition-
er’s trade name.

On 27 April 2016, respondent filed its Appeal Memorandum17

with the Office of the Director General of the IPO (IPO-ODG). Re-
spondent reasserted that the principles of res judicata and the law
of the case apply in the present case. It also maintained that its
goods and those of petitioner are unrelated as they flow from dif-
ferent channels of trade. For this reason, respondent maintained
that its use of the NIKON mark will unlikely mislead the public,
and thus, it should be allowed to register it, even though it is peti-
tioner’s trade name.

In its Comment,18 petitioner impugned respondent’s asser-

tion that the doctrines of res judicata and law of the case are appli-
cable in this case. It also insisted that respondent’s use of the mark
would raise a likelihood of confusion of its own mark. It argued
that, regardless of the goods involved, respondent’s mark cannot
be registered because the NIKON mark is already declared well-
known, and allowing a third party to use it will dilute its distinc-
tiveness. Furthermore, it maintained that respondent’s trademark
application will forestall the possibility of the expansion of its
16Id., pp. 980-981.
17Id., pp. 985-990.
18Id., pp. 1001-1026.
 CA-G.R. SP No. 154367
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business. Finally, it stands by its assertion that respondent’s use of

the mark is unlawful, as it is also its trade name.

Thereafter, petitioner submitted its Memorandum.19 As for re-

spondent, there is nothing in the records that would indicate that
it submitted one.

On 20 December 2017, the IPO-ODG, in the assailed Deci-

sion, granted respondent’s appeal. The IPO-ODG gave no merit to
the contention that the doctrines of res judicata and the law of the
case are applicable in this case. Nonetheless, it dismissed petition-
er’s opposition, finding that there were noticeable differences be-
tween the marks of the parties. It also found merit in respondent’s
insistence that its products and those of petitioner are unrelated
as they flow from different channels of trade. For the IPO-ODG,
petitioner failed to establish that respondent’s use of the NIKON
mark will likely damage its own mark.

Aggrieved, petitioner filed this petition, assigning the fol-

lowing errors:

A. The IPO-ODG erred when she reversed the IPO-BLA Di-

rector’s decision and ruled that [respondent’s] NIKON
mark poses no likelihood of confusion with [petitioner’s]
NIKON mark.

B. The IPO-ODG erred when she ruled that [respondent’s]

NIKON mark has satisfied the requirements of registra-
bility and is capable of distinguishing [its] goods.
19Id., pp. 1039-1065.
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Petitioner argues:

[Respondent] should not be allowed to register a NIKON

mark. Section 123.1(f) of the IP Code prohibits the registration
of a mark that is identical or confusingly similar to a registered
and well-known trademark. This prohibition applies even if
the goods of the contending trademarks are not similar. Fur-
ther, allowing [respondent] to register a NIKON mark will in-
fringe on [petitioner’s] trade name rights and dilute the distinc-
tiveness of its NIKON mark.”20

In this petition, petitioner also applies for the issuance of ex

parte temporary restraining order (TRO) and writ of preliminary
injunction, arguing that respondent’s use of the trademark will
erode whatever goodwill petitioner has painstakingly built for its
brand. Likewise, it asserts that, without injunctive reliefs, grave
injustice and irreparable damage will result from trademark dilu-
tion and consumer confusion of the NIKON mark.

On 25 May 2018, petitioner filed a Supplemental Petition,21

submitting a copy of the Decision dated 22 December 2017 of IPO-
BLA in a case entitled, Nikon Corporation v. Alfra Steel Industrial,
Inc. (Alfra Steel Industrial Case).22 Petitioner, the opposer in that
case, highlighted that the IPO-BLA disallowed the registration of
the mark “STYLIZED NP NIKON EMT,” even though the mark
was to be used on “pipes of metal.”

In its Comment,23 respondent cited Article 6bis of the Paris

Convention for the Protection of Industrial Property (Paris Con-

20Id., p. 17.
21Id., pp. 1105-1115.
22Id., pp. 1117-1129.
23Id., pp. 1138-1143.
 CA-G.R. SP No. 154367
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vention)24 and Section 123.1(d) and (e) of the IP Code. It argued

that based on these provisions, the protection afforded to well-
known marks are limited to related goods. It maintained that its
goods are unrelated to those of petitioner, thus, there could be no
confusing similarity between its mark and that of petitioner. It re-
iterated that its household goods are sold in department stores
and specialty stores for household items, while petitioner’s goods
are sold in specialty camera stores.

Commenting on petitioner’s application for TRO and writ or

preliminary injunction, respondent insinuates that petitioner
failed to establish a clear legal right, and is therefore not entitled
to injunctive relief.

On 18 July 2018, petitioner filed its Reply,25 and thereafter, its

Memorandum.26 Respondent, on the other hand, submitted a Com-
ment.27 Petitioner moved to expunge the Comment, which We de-
nied in our Resolution28 dated 2 April 2019. In the same Resolution,
We resolved to treat respondent’s Comment as its Memorandum.

Issue

The main issue for Our resolution is whether or not respon-

dent ISCO Holding Corporation should be allowed to register the
NIKON mark for its household goods.

24The Philippines became a signatory to the Paris Convention on 27 September 1965; Japan, on 15 July
1899.
25Rollo, pp. 1154-1162.
26Id., pp. 1165-1199.
27Id., pp. 1201-1206.
28Id., p. 1222.
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Our Ruling

The petition is granted.

A trademark is any distinctive word, name, symbol, em-

blem, sign, or device, or any combination thereof, adopted and
used by a manufacturer or merchant on his goods to identify and
distinguish them from those manufactured, sold, or dealt by oth-
ers. It is intellectual property deserving protection by law, and
susceptible to registration if it is crafted fancifully or arbitrarily
and is capable of identifying and distinguishing the goods of one
manufacturer or seller from those of another.29

We find that the IPO-ODG erred in reversing the decision of

the IPO-BLA. Respondent must not be allowed to register the
NIKON mark in light of the following: (1) it is identical with, or
confusingly similar to, the registered and well-known NIKON
mark of petitioner; (2) respondent’s use of the mark will indicate a
connection between its goods and petitioner (confusion of busi-
ness); (3) its use will likely damage the interests of petitioner; and
(4) its use is against Section 165.2 of the IP Code.

Respondent’s mark is identical

with, or confusingly similar to,
petitioner’s registered and well-
known NIKON mark

We uphold petitioner’s contention that it is plain error to

disregard the registration and well-known status of its NIKON
mark. It is essential to determine whether a mark is well-known
29Dy and/or Philites Electronic & Lighting Products v. Koninklijke Philips Electronics, N.V., G.R. No. 186088,
22 March 2017, citations omitted.
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because the IP Code affords greater protection to one that pos-

sesses the status. Coupled with a registration in the Philippines,
the protection is even more extensive.

There is no question that petitioner’s NIKON mark is regis-

tered in the Philippines.

Moreover, petitioner’s NIKON mark is also well-known in

the country. One of the qualifications provided by Section 123.1(e)
of the IP Code in prohibiting the registration of a well-known
mark is that it should be considered as such by a competent au-
thority. Rule 101(d) of the Rules and Regulations on Trademarks, Ser-
vice Marks, Trade Names and Marked or Stamped Containers of 2017 30
defines “competent authority” in the following manner:

(d) “Competent authority” for purposes of determining

whether a mark is well-known, means the courts, the Director
General and the Director of the Bureau of Legal Affairs; (em-
phasis supplied)

In this case, the IPO-BLA sustained petitioner’s submission

that its mark is well-known. This is not an isolated finding since,
as pointed out by petitioner, the IPO-BLA has pronounced in San
Mateo Rubber Cases and Alfra Steel Industrial Case that the NIKON
mark has attained a well-known status in the Philippines. We find
no reason to rule otherwise.

Significantly, respondent does not dispute that petitioner’s

NIKON mark is well-known. However, it maintains that there is
no hindrance to the registration of its NIKON mark since it will be

30IPOPHL Memorandum Circular No. 17-010

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used on goods which are unrelated to those of petitioner. It

grounds its contention on Article 6bis of the Paris Convention and
Section 123.1(e) of the IP Code, which provide:

Article 6bis
Marks: Well-Known Marks

(1) The countries of the Union undertake, ex officio if their legis-

lation so permits, or at the request of an interested party, to
refuse or to cancel the registration, and to prohibit the use, of a
trademark which constitutes a reproduction, an imitation, or a
translation, liable to create confusion, of a mark considered by
the competent authority of the country of registration or use to
be well known in that country as being already the mark of a
person entitled to the benefits of this Convention and used for
identical or similar goods. These provisions shall also apply
when the essential part of the mark constitutes a reproduction
of any such well-known mark or an imitation liable to create
confusion therewith.

xxx

Section 123.1. A mark cannot be registered if it:

xxx

(e) Is identical with, or confusingly similar to, or constitutes a

translation of a mark which is considered by the competent au-
thority of the Philippines to be well-known internationally and
in the Philippines, whether or not it is registered here, as being
already the mark of a person other than the applicant for regis-
tration, and used for identical or similar goods or services: x x
x (Emphasis and underscoring supplied by respondent.)

Respondent avers that it is using its mark NIKON and De-

vice for household items such as electric fans, oven toasters and
the like, while petitioner uses its mark on cameras. Echoing the
finding of the IPO-ODG, it asserts that its goods on which its
mark is used are not identical or similar to those of petitioner;
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hence, its registration is not prohibited under Section 123.1(e) of

the IP Code.

Petitioner counters that Article 6bis of the Paris Convention

should be tied to Article 16 of the Trade Related Aspects of Intel-
lectual Property Rights (TRIPS) Agreement,31 which states:

Article 16
Rights Conferred

xxx

3. Article 6bis of the Paris Convention (1967) shall apply,

mutatis mutandis, to goods or services which are not similar to
those in respect of which a trademark is registered, provided
that use of that trademark in relation to those goods or services
would indicate a connection between those goods or services
and the owner of the registered trademark and provided that
the interests of the owner of the registered trademark are likely
to be damaged by such use. (Emphasis and underscoring sup-
plied by petitioner.)

Furthermore, petitioner submits that it is Section 123.1(f) of

the IP Code, not Section 123.1(e), that is applicable in this case,
given that the mark involved is both registered and well-known.
The law provides:

Section 123.1. A mark cannot be registered if it:

xxx

(f) Is identical with, or confusingly similar to, or constitutes a

translation of a mark considered well-known in accordance
with the preceding paragraph, which is registered in the
Philippines with respect to goods or services which are not
similar to those with respect to which registration is applied
for: x x x (Emphasis supplied.)

31This treaty entered into force both in the Philippines and in Japan on 1 January 1995.
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Petitioner’s contention has merit.

Respondent should not be allowed to register its NIKON

mark, since it is visually and aurally identical with that of peti-
tioner. Considering that NIKON is a coined and fanciful term,
and therefore highly distinctive, respondent’s mark is almost an
exact reproduction of petitioner’s mark.

Assuming that the blue anchor device, together with the

red word “Nikon” below it, distinguishes it from petitioner’s
mark, the former cannot still be registered as it is still confusingly
similar to petitioner’s NIKON mark.

The IPO-ODG held:

At a glance one can see the differences in these marks.

While they both contain the word “NIKON”, the [responden-
t’s] mark has noticeable differences from that of the
[petitioner]. The [petitioner’s] mark is solely the word
“NIKON” while the [respondent’s] mark consists not only of
the word “NIKON” but includes the design of an anchor en-
closed in a circle. Moreover, the [respondent] has also filed col-
or claims of blue and red that further distinguished its mark
from that of the [petitioner]. Thus, the presence of the similar
term “NIKON” in the parties’ respective mark is not sufficient
to conclude that the marks of the [respondent] and [petitioner]
are confusingly similar.

xxx

In this case, not only are the marks visually different, the
products covered by these marks are also different. The [re-
spondent] is applying the registration of NIKON & Design on
goods which are different from those covered by the [petition-
er’s] trademark registration for NIKON x x x.32

32Rollo, pp. 82-83

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We do not agree that respondent’s mark is not confusingly

similar to petitioner’s NIKON mark.

In determining similarity and likelihood of confusion, ju-

risprudence has developed two tests: the dominancy test, and the
holistic or totality test.33

On one hand, the dominancy test focuses on the similarity

of the prevalent or dominant features of the competing trade-
marks that might cause confusion, mistake, and deception in the
mind of the purchasing public. Duplication or imitation is not
necessary; neither is it required that the mark sought to be regis-
tered suggests an effort to imitate. Given more consideration are
the aural and visual impressions created by the marks on the buy-
ers of goods, giving little weight to factors like prices, quality,
sales outlets, and market segments.34

On the other hand, the holistic or totality test necessitates a

consideration of the entirety of the marks as applied to the prod-
ucts, including the labels and packaging, in determining confus-
ing similarity. The discerning eye of the observer must focus not
only on the predominant words, but also on the other features ap-
pearing on both labels so that the observer may draw conclusion
on whether one is confusingly similar to the other.35

Applying the dominancy test calls for a simple examination

of the marks of the parties. It is apparent at a glance that the dom-
inant feature in respondent’s mark is the word NIKON, which is
33Dy and/or Philites Electronic & Lighting Products v. Koninklijke Philips Electronics, N.V., supra.
34Id.
35Id.
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the entirety of petitioner’s mark. In addition, although additional

colors are provided by the anchor design, the larger part of the
mark is in black, much like the NIKON mark of petitioner. We
quote with approval the findings of IPO-BLA:

[Respondent’s mark] has the same spelling, pronunciation as

well as meaning. The design of the blue anchor inside the circle
with the word NIKON in red ink does not provide a distinct
feature sufficient to recognize independently the subject mark
from that of [petitioner].36

Visually, respondent’s mark is almost exactly the same as

that of petitioner. Aurally, they are exactly identical. Thus, it is
not unlikely that respondent’s mark may cause confusion, mis-
take, and deception in the mind of the purchasing public.

We agree with petitioner that the holistic test is not applica-

ble in this case. Applying the holistic test entails a consideration
of the entirety of the marks as applied to the products. 37 Respon-
dent failed to adduce evidence, or at least show, how it intends to
appropriate its mark to its products.

Moreover, the IPO-ODG compared the goods of the parties

to bolster the difference between their marks. This finding is later
emphasized by respondent to support its claim that the registra-
tion of its mark is not prohibited by law.

We do not agree.

36Rollo, p. 981
37Dy and/or Philites Electronic & Lighting Products v. Koninklijke Philips Electronics, N.V., supra.
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Even if We find that respondent’s goods on which it will use

its mark, are different from those of petitioner, We cannot ignore
the categorical provisions of Article 16(3) of the TRIPS Agreement
and Section 123.1(f) of the IP Code. The latter clearly states that a
mark cannot be registered if it is identical with, or confusingly
similar to, a well-known and registered mark “with respect to
goods or services which are not similar to those with respect to
which registration is applied for.” Respondent conveniently ig-
nores this provision, even as it acknowledges petitioner’s certifi-
cate of registration and the well-known status of the NIKON
mark.

We also sustain petitioner’s submission that the IPO-ODG

gravely erred in citing Taiwan Kolin Corporation, Ltd. v. Kolin Elec-
tronics Co., Inc.38 to support its ruling. The circumstances in Tai-
wan Kolin Corporation are not on all fours with this case, because it
does not dwell on well-known marks. In that case, the opposer
did not, and could not, avail of the protection afforded to well-
known marks because it was the applicant who owned the mark
that could be considered well-known. In this case, it is the oppos-
er, herein petitioner, who owns the well-known mark.

Furthermore, a closer examination of Taiwan Kolin

Corporation shows that what was scrutinized therein was Section
123.1(d) of the IP Code. In this case, petitioner raises Section
123.1(f) to protect its mark. Unlike the latter, the former does not
deal with registered and well-known marks. To emphasize what
was previously stated, registered and well-known marks are ac-
corded more protection than those that are not.
38G.R. No. 209843, 25 March 2015; Rollo, p. 85
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Moving on, Section 123.1(f) of the IP Code provides two

qualifications for an identical mark to be denied registration. We
find that both qualifications are present in this case. Again, Sec-
tion 123.1(f) provides:

Section 123.1. A mark cannot be registered if it:

xxx

(f) Is identical with, or confusingly similar to, or constitutes a

translation of a mark considered well-known in accordance
with the preceding paragraph, which is registered in the
Philippines with respect to goods or services which are not
similar to those with respect to which registration is applied
for: Provided, That use of the mark in relation to those goods
or services would indicate a connection between those goods
or services, and the owner of the registered mark: Provided,
further, That the interests of the owner of the registered mark
are likely to be damaged by such use; (Emphasis supplied.)

xxx

Respondent’s use of the mark will

indicate a connection between its
goods and petitioner

Petitioner argues that the IPO-ODG erred in ignoring the

finding of IPO-BLA that respondent’s use of the NIKON mark
will indicate a connection between their goods. The IPO-BLA
held:

Because NIKON is a highly distinctive mark, there is the

likelihood that information, assessment, perception or impres-
sion about the [respondent’s] good may unfairly case (sic)
upon or attributed to the [petitioner], and vice-versa.39

39Rollo, p. 981.
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We agree with the ruling of IPO-BLA.

UFC Philippines, Inc. v. Barrio Fiesta Manufacturing

Corporation40 is instructive:

[J]urisprudence has noted two (2) types of confusion, viz.:

(1) confusion of goods (product confusion), where the ordinari-
ly prudent purchaser would be induced to purchase one prod-
uct in the belief that he was purchasing the other; and (2) con-
fusion of business (source or origin confusion), where, al-
though the goods of the parties are different, the product, the
mark of which registration is applied for by one party, is
such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be
deceived either into that belief or into the belief that there is
some connection between the two parties, though inexistent.
(Emphasis supplied.)

In this case, assuming that respondent is correct in that there

will be no confusion with respect to its goods and those of peti-
tioner, there remains the possibility that there will be a confusion
of business, i.e., the purchasing public will attribute respondent’s
goods to petitioner, and petitioner’s goods to respondent. As peti-
tioner contended, there is a possibility that consumers will asso-
ciate the NIKON brand with respondent and its products, and
think that petitioner has expanded its business into home appli-
ances.

This leads to the second qualification imposed by Section

123.1(f) of the IP Code, i.e., “[t]hat the interests of the owner of the
registered mark are likely to be damaged by such use.”

40G.R. No. 198889, 20 January 2016, citing Dermaline, Inc. v. Myra Pharmaceuticals, Inc., G.R. No. 190065,
16 August 2010.
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The interests of petitioner are
likely to be damaged by respon-
dent’s use of the mark

Petitioner identifies two ways by which its interests will be

damaged if respondent is allowed to register its mark: first, peti-
tioner will be precluded from expanding its business; and second,
respondent’s use of the mark will dilute the distinctive character
of the NIKON mark.

We give credence to the contention of petitioner that it will

be precluded from expanding its business.

Petitioner cited the case of Dermaline v. Myra Pharmaceuti-

cals, Inc.,41 where the Supreme Court recognized that “the regis-
tered trademark owner enjoys protection in product and market
areas that are normal potential expansion of his business.” This
ruling was reiterated in the more recent case of UFC Philippines,
Inc. v. Barrio Fiesta Manufacturing Corporation.

The question is: will the respondent’s use of its NIKON

mark on household items forestall the normal potential expansion
of petitioner’s business? We answer in the affirmative. We find
that the possibility of petitioner dealing with household items is
beyond speculative. The foreign trademark registration certifi-
cates of petitioner show that it has registered its NIKON mark for
electronic, home appliance, and other household products. Peti-
tioner enumerates some examples:

41G.R. No. 190065, 16 August 2010.

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[U]nder class 07 of Japanese Registration Certificate No.
4637426, dish washing machines are included; x x x under class
09 of the Hong Kong Registration No. 19902472AA, computers
and computer peripheral devices are covered while class 11
covers installations for heating, cooking, refrigerating and
lighting, including illuminators and bulbs; x x x42

A quick examination of these items reveal that they are sim-

ilar or related to the goods of respondent. If respondent’s mark is
registered, the possibility for petitioner to register its NIKON
mark in the Philippines for these products may already be ham-
pered.

We, however, do not sustain petitioner’s contention that re-

spondent’s use of the mark will dilute the distinctive character of
its NIKON mark. As cited by petitioner, Levi Strauss & Co., v. Clin-
ton Apparelle, Inc.43 defines trademark dilution in this manner:

Trademark dilution is the lessening of the capacity of a famous

mark to identify and distinguish goods or services, regardless
of the presence or absence of: (1) competition between the
owner of the famous mark and other parties; or (2) likelihood
of confusion, mistake or deception. x x x

Based on the foregoing, to be eligible for protection from dilu-

tion, there has to be a finding that: (1) the trademark sought to
be protected is famous and distinctive; (2) the use by respon-
dent of [the mark] began after the petitioners’ mark became fa-
mous; and (3) such subsequent use defames petitioners’ mark.

We find that the third requisite is lacking. Petitioner alleges

that “the reputation and commercial value of NIKON may dimin-
ish because the public would associate any lack of quality or pres-
tige in [respondent’s] goods with [petitioner’s] Japan-quality
42Rollo, p. 33.
43G.R. No. 138900, 20 September 2005
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goods.”44 This is conjectural. Even petitioner’s use of the word

“may” before “diminish” indicates that this was hypothetical. Al-
though it is a possibility, there is no evidence on record yet that
shows that respondent’s use of the mark defames petitioner’s
mark.

To sum up so far, respondent’s NIKON mark cannot be reg-

istered because it meets the qualifications set forth by Section
123.1(f) of the IP Code. However, even assuming that petitioner’s
NIKON mark is not well-known and registered in the Philippines,
respondent’s application must still be denied for the reason stated
in the following paragraphs.

Respondent seeks to register a

mark that comprises the trade
name of petitioner

Petitioner avers that respondent’s use of the NIKON mark

contravenes the IP Code. It cites, among others, Section 165.2 of
the IP Code, which provides:

SECTION 165. Trade Names or Business Names. - x x x

165.2. (a) Notwithstanding any laws or regulations providing

for any obligation to register trade names, such names shall be
protected, even prior to or without registration, against any
unlawful act committed by third parties.

(b) In particular, any subsequent use of the trade name by a

third party, whether as a trade name or a mark or collective

44Rollo, p. 34
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mark, or any such use of a similar trade name or mark, likely to
mislead the public, shall be deemed unlawful.

Respondent, in its Appeal Memorandum filed before the IPO-

ODG, underscored that its use of petitioner’s trade name is not
“likely to mislead the public,” since the goods involved in this
case are unrelated.45

Respondent’s submission is untenable. The IPO-BLA cor-

rectly ruled, thus:
The likelihood of confusion or deception or the public be-
ing [misled] is further enhanced by the fact that, as mentioned
above, NIKON comprises the trade name or business name of
the [petitioner]. The [respondent’s] use, including the filing of
an application to register the mark in its favor is thus consid-
ered unlawful pursuant to Sec. 165.2 of the IP Code.46

There is no cogent reason to reverse the ruling of IPO-BLA.

Interestingly, the Paris Convention, which respondent con-

sistently raised to support its cause, contains a provision regard-
ing trade names. Article 8 provides:

A trade name shall be protected in all the countries of the

Union without the obligation of filing or registration, whether
or not it forms part of a trademark.

In this provision, there is no qualification that the subse-

quent use of the trade name should be on related goods or ser-
vices. Hence, for the sole reason that NIKON comprises petition-
er’s trade name, respondent cannot be allowed to register the
mark.
45Respondent’s Comment and its Comment (treated as Memorandum) are silent on this matter.
46Rollo, p. 982.
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In fine, petitioner has sufficiently established that respon-

dent’s mark cannot be registered because it is identical with, or
confusingly similar to, the registered and well-known mark of pe-
titioner. Even assuming, arguendo, that petitioner’s mark is neither
registered nor well-known, respondent’s application must still be
denied since the mark it seeks to register comprises the petition-
er’s trade name.

WHEREFORE, the petition is GRANTED. The Decision

dated 20 December 2017 of IPO-ODG in Appeal No. 14-2016-0029
is hereby REVERSED and SET ASIDE. Accordingly, the Decision
dated 1 March 2016 in IPC No. 14-2011-0029 of the IPO-BLA is
REINSTATED.

SO ORDERED.

ORIGINAL SIGNED
GERALDINE C. FIEL-MACARAIG
Associate Justice

WE CONCUR:

ORIGINAL SIGNED
DANTON Q. BUESER
Associate Justice

ORIGINAL SIGNED
ALFREDO D. AMPUAN
Associate Justice
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CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer
of the opinion of the Court.

ORIGINAL SIGNED
DANTON Q. BUESER
Associate Justice
Chairman, Special Fourteenth Division