Diaz vs People of the Philippines

G.R. No. 180677 February 18, 2013

Facts

Levi Strauss Philippines, Inc. received information that Diaz was selling counterfeit or imitations of
LEVI’S 501 jeans in his tailoring shops in Las Piñas City.

Armed with the search warrants, NBI agents searched the tailoring shops of Diaz and seized several
fake LEVI’S 501 jeans from them, claiming that each of the jeans were mere imitations of genuine
LEVI’S 501 jeans by each of them bearing the registered trademarks, like the arcuate design, the tab,
and the leather patch; and that the seized jeans could be mistaken for original LEVI’S 501 jeans due to
the placement of the arcuate, tab, and two-horse leather patch.

Diaz, in his defense, stated that he did not manufacture Levi’s jeans, and that he used the label “LS
Jeans Tailoring” (LS means “Latest Style”) in the jeans that he made and sold; that the label “LS Jeans
Tailoring” was registered with the Intellectual Property Office; that his shops offered made-to-order
jeans; that the jeans he produced were easily recognizable because the label “LS Jeans Tailoring,”; that
the leather patch on his jeans had two buffaloes, not two horses.

Issue

Whether or not Diaz is liable for trademark infringement.

Held

No. Section 155 of R.A. No. 8293 defines the acts that constitute infringement of trademark, viz:

Any person who shall, without the consent of the owner of the registered mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof
and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with
the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which
such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action
for infringement by the registrant for the remedies hereinafter set forth: Provided, That the infringement
takes place at the moment any of the acts stated in Subsection 155.1 or this subsection are committed
regardless of whether there is actual sale of goods or services using the infringing material.
As can be seen, the likelihood of confusion is the gravamen of the offense of trademark infringement.
There are two tests to determine likelihood of confusion, namely: the dominancy test, and the holistic
test.

The holistic test is applicable here considering that the herein criminal cases also involved trademark
infringement in relation to jeans products. Accordingly, the jeans trademarks of Levi’s Philippines and
Diaz must be considered as a whole in determining the likelihood of confusion between them. The maong
pants or jeans made and sold by Levi’s Philippines, which included LEVI’S 501, were very popular in the
Philippines. The consuming public knew that the original LEVI’S 501 jeans were under a foreign brand
and quite expensive. Such jeans could be purchased only in malls or boutiques as ready-to-wear items,
and were not available in tailoring shops like those of Diaz’s as well as not acquired on a “made-to-
order” basis. Under the circumstances, the consuming public could easily discern if the jeans were
original or fake LEVI’S 501, or were manufactured by other brands of jeans.

Given the foregoing, it should be plain that there was no likelihood of confusion between the trademarks
involved. Thereby, the evidence of guilt did not satisfy the quantum of proof required for a criminal
conviction, which is proof beyond reasonable doubt. According to Section 2, Rule 133 of the Rules of
Court, proof beyond a reasonable doubt does not mean such a degree of proof as, excluding possibility
of error, produces absolute certainty. Moral certainty only is required, or that degree of proof which
produces conviction in an unprejudiced mind. Consequently, Diaz should be acquitted of the charges.

ARGUMENT

There is a colorable imitation between the marks “Levi Strauss & Co./Levi’s Jeans 150” as compared
to “LS Jeans Tailoring” which would lead to any likelihood of confusion to the ordinary purchasers.

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

All of these grounds are present in the case at hand. There are striking colorable similarities between
the two marks since the petitioner uses LS jeans, which an ordinary person might confuse to mean as
relating to Levi’s Strauss or Levi’s Jeans, or one of its mutation. By making it followed by the word
“Tailoring” does not remove the confusion, or make it totally different to the respondent’s mark. Next,
the goods to which the marks are attached are similar, it is the jeans. Then, there is a likely effect of
confusion as to the public, since they are not expected to be expert in determining the particulars of
what constitutes the real Levi’s brand. The law considers it to be an infringement the mere fact as it
would likely confuse a consumer on the ground of deceit or device perpetrated by the infringer. The
public could interpret that “LS” probably means, an acronym for Levi’s Strauss. Lastly, the petitioner
was not granted an express and implied consent from the respondent to use the mark in question.

There are two tests to determine colorable imitation, they are the dominancy test or the holistic
test. However, in this case, the court erroneously used holistic test, notwithstanding the express
provision of the law to the use of dominancy test in determining colorable imitation. There may be
instances that holistic test shall still be used, but when the dominancy test is available to determine
confusing similarity, it shall be used since it is the prevailing test being used by the Supreme court.
The "test of dominancy is now explicitly incorporated into law in Section 155.1, R.A 8293 or the
Intellectual Property Code which defines infringement as the 'colorable imitation of a registered mark
x x x or a dominant feature thereof.

In the present case, the dominant feature of the respondent’s mark is the word "Levi’s Strauss" which
is the exact acronym, to the petitioner’s mark “LS”. The express provision of the law does not require it
to be the exact word itself, but as worded “colorable imitation of registered mark xxx or a dominant
feature”. In dominancy test, more consideration is given on the aural and visual impressions created
by the marks on the buyers of goods.

Based on the distinct visual and aural differences between Levi Strauss & Co./Levi’s Jeans 150” as
compared to “LS Jeans Tailoring, I find that there is a confusing similarity between the two marks.

On the other hand, following the line of argument of the Supreme court as to the use of holistic test, it
was still striking that the supreme court failed to appreciate the intent of the petitioner of putting two
buffalos, while using the acronym LS to confuse it with Levi’s Strauss. It was glaring that the petitioner
had tried to circumvent the law by making it not too similar, but at least a considerable touch of similarity
which was enough to confuse the consumers that the jeans he was making was that of a legit Levi’s
Strauss.

These animal symbols are small marks, to be meticulously scrutinized by everyone. If you will look on
the totality of the marks of the petitioner and the respondent, Levi Strauss & Co./Levi’s Jeans 150,
by getting its acronym and combining them, the respondent could come up with LS Jeans, just add
Tailoring. And then put, small TWO BUFFALLOS, INSTEAD OF TWO HORSES.

Applying the intent of the law, it intended to prevent a person to give his goods the general appearance
of the goods of the others with the intention of deceiving the public that the goods are those of the
latter.