Skechers, USA, Inc. v. Inter Pacific Industrial Trading Corp. G.R. No.

164321 (March 23, 2011) FACTS: Skechers, USA Inc. is the owner o the re!istere" tra"e#arks $Skechers% an" $S within an o&a' 'o!o%. Skechers i'e" a cri#ina' case or tra"e#ark in rin!e#ent a!ainst se&era' store(owners that were se''in! shoes )ran"e" as $Stron!% an" )earin! a si#i'ar $S% 'o!o. *he Re!iona' *ria' +o,rt (R*+) iss,e" search warrants, a''owin! the Nationa' -,rea, o In&esti!ation (N-I) to rai" the stores an" con iscate 6,000 .airs o shoes. *he acc,se" #o&e" to /,ash the warrants, sa0in! that there was no con ,sin! si#i'arit0 )etween the $Skechers% an" the $Stron!% )ran"s.*he R*+ !rante" the #otion to /,ash an" or"ere" the N-I to ret,rn the sei1e" !oo"s. *he co,rt sai" that the two )ran"s ha" !'arin! "i erences an" that an or"inar0 .r,"ent cons,#er wo,'" not #istake one or the other. 2n certiorari, the +o,rt o A..ea's (+A) a ir#e" the R*+ r,'in!. *he #atter was e'e&ate" to the S,.re#e +o,rt (S+). ISSUE: 3i" the acc,se" co##it tra"e#ark in rin!e#ent4 56738 9es, the acc,se" is !,i't0 o tra"e#ark in rin!e#ent. Un"er the I: +o"e (RA No. ;2<3), tra"e#ark in rin!e#ent is co##itte" when8 Remedies; Infringement. = An0 .erson who sha'', witho,t the consent o the owner o the re!istere" #ark8 1>>.1. Use in co##erce an0 re.ro",ction, co,nter eit, co.0, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sa'e, o erin! or sa'e, "istri),tion, a"&ertisin! o an0 !oo"s or ser&ices inc',"in! other .re.arator0 ste.s necessar0 to carr0 o,t the sa'e o an0 !oo"s or ser&ices on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive? or 1>>.2. Re.ro",ce, co,nter eit, co.0 or co'ora)'0 i#itate a re!istere" #ark or a dominant feature thereof an" a..'0 s,ch re.ro",ction, co,nter eit, co.0 or co'ora)'e i#itation to 'a)e's, si!ns, .rints, .acka!es, wra..ers, rece.tac'es or a"&ertise#ents inten"e" to )e ,se" in co##erce ,.on or in connection with the sa'e, o erin! or sa'e, "istri),tion, or a"&ertisin! o !oo"s or ser&ices on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive , sha'' )e 'ia)'e in a ci&i' action or in rin!e#ent )0 the re!istrant or the re#e"ies hereina ter set orth8 :ro&i"e", *hat the in rin!e#ent takes .'ace at the #o#ent an0 o the acts state" in S,)section

1>>.1 or this s,)section are co##itte" re!ar"'ess o whether there is act,a' sa'e o !oo"s or ser&ices ,sin! the in rin!in! #ateria' *here is tra"e#ark in rin!e#ent when the secon" #ark ,se" is 'ike'0 to ca,se con ,sion. *here are two tests to "eter#ine this8 . !o"inanc# Test @ the co,rt oc,ses on the si#i'arit0 o the "o#inant eat,res o the #arks that #i!ht ca,se con ,sion in the #in" o the cons,#er. 3,.'ication or i#itation is not necessar0. 6&en acci"enta' con ,sion #a0 )e ca,se or tra"e#ark in rin!e#ent. More consi"eration is !i&en to the a,ra' an" &is,a' i#.ressions create" )0 the #arks on the ),0ers an" 'ess wei!ht is !i&en to actors 'ike .rice, /,a'it0, sa'es o,t'ets an" #arket se!#ents. Applied to this case: *he S+ o,n" that the ,se o the $S% s0#)o' )0 Strong r,))er shoes in rin!es on the re!istere" Skechers tra"e#ark. It is the #ost "o#inant eat,re o the #ark (( one that catches the ),0erAs e0e irst. 6&en i the acc,se" c'ai#s that there was a "i erence )eca,se the $S% ,se" )0 Skechers is o,n" insi"e an o&a', the act that the acc,se" ,se" the "o#inant $S% s0#)o' a'rea"0 constit,tes tra"e#ark in rin!e#ent. *he S+ "isa!ree" with the +A reasonin! that the $S% s0#)o' is a'rea"0 ,se" or #an0 thin!s, inc',"in! the S,.er#an s0#)o'. 6&en i this is tr,e, the act that Stron! ,se" sa#e st0'i1e" $S% s0#)o' as that o the Skechers )ran" #akes this a case o tra"e#ark in rin!e#ent. *he sa#e ont an" st0'e was ,se" in this case. *he S,.er#an $S% s0#)o' is c'ear'0 "i erent ro# the $S% in this case. $. %olistic or Totalit# Test @ the co,rt 'ooks at the entiret0 o the #arks as a..'ie" to the .ro",cts, inc',"in! the 'a)e's an" .acka!in!. 9o, #,st not on'0 'ook at the "o#inant eat,res ),t a'' other eat,res a..earin! on )oth #arks. Applied to this case: -oth R*+ an" +A ,se" the Holistic Test to r,'e that there was no in rin!e#ent. -oth co,rts ar!,e" the o''owin! "i erences8 *he #ark $S% o,n" in Strong Shoes is not enc'ose" in an $o&a' "esi!n.% *he wor" $Stron!% is cons.ic,o,s'0 .'ace" at the )acksi"e an" inso'es. *he han! ta!s an" 'a)e's attache" to the shoes )ears the wor" $Stron!% or res.on"ent an" $Skechers U.S.A.% or .ri&ate co#.'ainant? Stron! shoes are #o"est'0 .rice" co#.are" to the costs o Skechers Shoes. A'so ,sin! the Holistic Test, the S+ correcte" the 'ower co,rts an" r,'e" that the strikin! si#i'arities )etween the .ro",cts o,twei!h the "i erences ar!,e" )0 the res.on"ents8 Sa#e co'or sche#e o )',e, white an" !ra0? Sa#e wa&e('ike .attern on the #i"so'e an" the o,ter so'e? Sa#e e'on!ate" "esi!ns at the si"e o the #i"so'e near the hee'? Sa#e n,#)er o ri"!es on the o,ter so'es ( i&e at the )ack an" siB in ront)? Sa#e 'ocation o the st0'i1e" $S% s0#)o'? *he wor"s CSkechers S.ort *rai'C at the )ack o the Skechers shoes an" CStron! S.ort *rai'C at the )ack o the Strong shoes, ,sin! the sa#e ont, co'or, si1e, "irection an" orientation? Sa#e two !ra0ish(white se#i(trans.arent circ'es on to. o the hee' co''ars. *he eat,res an" o&era'' "esi!n o the two .ro",cts are so si#i'ar that there is a hi!h 'ike'ihoo" o con ,sion. *wo .ro",cts "o not nee" to )e i"entica', the0 D,st nee" to )e si#i'ar eno,!h to con ,se the or"inar0 ),0er in or"er to constit,te tra"e#ark in rin!e#ent ( Converse Rubber

Cor oration v. !acinto Rubber " #lastic Co., 1;6 :hi'. ;> E1<;0F). A'so, the "i erence in .rice cannot )e a "e ense in a case or tra"e#ark in rin!e#ent ( $c%onald&s Cor oration v. '.C. (ig $ak (urger, Inc., 4;0 :hi'. 402, 434 E2004F). *here are two t0.es o con ,sion8 1. Product Confusion @ where the or"inar0 .r,"ent .,rchaser wo,'" )e in",ce" to .,rchase on .ro",ct in the )e'ie that he was ),0in! another. 2. Source or &rigin Confusion @ a'tho,!h the !oo"s are "i erent, the ,se o the #ark ca,ses the cons,#er to ass,#e that )oth .ro",cts ori!inate ro# the sa#e so,rce. *ra"e#ark 'aw .rotects the owner not on'0 ro# .ro",ct con ,sion ),t a'so ro# so,rce con ,sion. :rotection is not 'i#ite" to the sa#e or si#i'ar .ro",cts ),t eBten"s to a'' cases where8 *he cons,#er is #is'e" into thinkin! that the tra"e#ark owner eBten"e" his ),siness into a new ie'"? *he cons,#er is #is'e" into thinkin! that the tra"e#ark owner is in an0 wa0 connecte" to the in rin!erAs acti&ities? or *he in rin!e#ent oresta''s the nor#a' .otentia' eB.ansion o the tra"e#ark ownerAs ),siness. *ra"e#ark 'aw "oes not on'0 .rotect the ownerAs re.,tation an" !oo"wi'', it a'so .rotects the cons,#ers ro# ra," an" con ,sion. In this case, it is c'ear that there was an atte#.t to co.0 the tra"e#ark ownerAs #ark an" .ro",ct "esi!n. In tra"e#ark in rin!e#ent cases, 0o, "o not nee" to co.0 anotherGs #ark or .ro",ct eBact'0. +o'ora)'e i#itation is eno,!h.