Apple Loses Trademark Battle in the Philippines

June 6, 2015

In a surprising decision, the Bureau of Legal Affairs (“Bureau”) dismissed Apple Inc.’s (“Apple”) opposition, which it lodged against an application for the mark “mylphone” in the name of a local entity, Solid Broadband Corporation (“Solid”) [Apple, Inc. vs. Solid Broadband Corporation (IPC No. 14-2010-00212)]. Solid sought the registration of “mylphone” used in connection with “distribution and sales of mobile and cellular phones including chargers, headsets, micro SD cards, T-Flash cards, extra phone batteries and stylus pens”, under Class 9 of the International Classification of Goods.

Apple anchored its opposition on Section 123.1 (d) of the IP Code, which prohibits the registration of a mark that is confusingly similar to an earlier filed or registered trademark. Apple contended that its “IPHONE” mark is well-known internationally and in the Philippines, and that the registration of “mylphone” is barred as being confusingly similar thereto.

Solid defended its application claiming that it has used “myIphone” on mobile phones in the Philippines since 2007. According to Solid, the opposition is a case of a “giant trying to claim more territory than what it is entitled to, to the great prejudice of a local ‘Pinoy Phone’ merchant who has managed to obtain a significant foothold in the mobile phone market.” Solid denied the assertion of confusing similarity between the “mylphone” mark and the “IPHONE” marks claiming that any similarity is only in the use of “phone”, a word which is generic and not subject to exclusive appropriation.

The Bureau agreed with Solid and took the view that while the contending marks are similar in their use of the word “phone”, that similarity does not create a likelihood of confusion among consumers because “phone” is a generic term for mobile phone products. The Bureau therefore confined its scrutiny to the words “I” in Apple’s mark and the word “MY” in Solid’s mark and found that there is a “striking difference” between these words. While there may be a resemblance as to the sound produced when pronouncing “I” and “MY”, they are both distinct, one being pronounced with a pure vowel sound, while the other is a combination of two consonants. Furthermore, the Bureau noted that “MY” is an adjective that connotes “relating to or belonging to me”, while “I” in the “IPHONE” mark does not immediately convey a similar concept. It noted that Apple’s “I” or “i” as part of the name of its different products is unique, the meaning of which is left to the imagination of the observer.

The Bureau addressed Apple’s argument that its mark is well-known and famous, concluding that there is no likelihood of confusion of business, with these observations:

“It is improbable for one who is buying or using “mylphone” products to be reminded of the mark “IPHONE”. The buying public should be credited with a modicum of intelligence and discernment in purchasing articles, such as gadgets and mobile phones. Mobile phones are such kind of consumer goods where brand patronage or consciousness is concededly prevalent. Corollarily, the fame and popularity of IPhones in fact makes it improbable for one to confuse “mylphone” product as an IPHONE. The Opposer has continuously used “I” or “i” in its products and one who is confronted with the “my” as in “mylphone” is unlikely to believe or conclude that it is connected with the Opposer.”

The Bureau compared the advertisements of the products bearing the marks, and found that they give off distinct commercial impressions when seen in the actual marketplace. It also relied upon the Supreme Court Case of Emerald Garment Manufacturing Corporation vs. Court of Appeals (G.R. 100098, 29 Dec. 1995) for the proposition that credit should be given to the “ordinary purchaser” who is not the “completely unwary consumer”, but is the “ordinarily intelligent buyer” considering the type of products involved.

The appeal period has not expired as of this writing, and it is widely believed that Apple will take full advantage of the appeals process in this jurisdiction. Appeals may be filed, first with the Office of the Director General, then with the Court of Appeals and finally with the Supreme Court.

One of the noteworthy aspects of this decision is the Bureau’s elevation of the “ordinary consumer” standard to the “ordinary intelligent buyer” standard, especially when it comes to consumers of mobile phone products. However, such high regard for the consumer seems to be unnecessary or impractical considering that almost every person owns a mobile phone in the Philippines. It therefore appears that by setting this higher standard, it makes it more difficult for brand-owners of well-known marks to prove likelihood of confusion against similar copycat trademarks.

Another interesting aspect is the way Solid framed its defense, painting this case as a battle between David and Goliath, where a giant multinational corporation is asserting its weight against a small local brand. This position strikes a chord among local consumers and can win public sympathy with many, including Judges. While it is not evident from the text of the decision whether Solid’s argument was an important factor, there is still a PR lesson to be learned, especially for owners of international well-known brands, who file opposition against local brands, which are normally associated with cheaper versions of the same products.

Finally, it is curious that the decision makes no mention whatsoever of the concept of “trademark dilution” as understood in this jurisdiction, and which had the potential to work in Apple’s favor. It is unclear whether a dilution type claim was presented by Apple’s counsel. In the Philippines, dilution by blurring or dilution by tarnishment has been recognized even in cases where the trademarks are not identical and where parties are actually in competition. This is not to say that the outcome could have been different, but it should have at least been discussed in light of the fame of Apple’s IPHONE mark.


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