IPO Sides with Daicel in Refusing to Register the ‘DIACEL’ Mark in the Philippines

August 30, 2016

The inquiry of likelihood of confusion generally revolves around the point of view of the ordinary purchaser. In fact, jurisprudence in the Philippines is replete with trademark cases reiterating that competing marks are not meant to be scrutinized in a vacuum, but always in the context of an ordinarily intelligent buyer embedded in the realities of the marketplace. The case of Daicel Corporation vs. CFF GMBH & CO. KG (IPC No. 14-2013-0047) is an example of this standard of analysis.

Daicel Corporation is a Japanese company engaged in the manufacture, sale, and distribution of a wide spectrum of organic and inorganic products. Its predecessor Dainippon Celluloid, Ltd. came about after 8 celluloid manufacturing companies merged together during the First World War. The merger was in response to the unfortunate decrease in the demand of celluloid due to the recession.  ‘DAICEL’ was coined and adopted as a trademark in 1956.  And in 1966, ‘DAICEL’ was incorporated as the trade name. Presently, Daicel Corporation undertakes several key businesses including Cellulosic derivatives, organic chemicals, plastics, household products, among others.

CFF GmbH & Co. KG is a German company, which boasts of its cellulose fibres exclusively made from organic and renewable materials.  Cellulose fibres are useful in road construction and in other industrial applications, as well as in the food industry. CFF GmbH & Co. KG is the owner of ‘TECHNOCEL’; ‘TOPCEL’; ‘SANACEL’; and ‘SENSOCEL’ marks registered in numerous countries. It was also able to register the ‘DIACEL’ mark in various countries including Israel, Indonesia, Australia, and Germany.

The case stems from CFF GMBH & CO. KG’s (“CFF”) trademark application for the mark ‘DIACEL’ in the Philippines, for use on goods under Class 1, including auxiliary filtering agents made of raw or semi-worked synthetic materials, among others.  Daicel Corporation (“Daicel”) filed an opposition against the subject mark arguing that it is confusingly similar to its registered ‘DAICEL’ mark covering chemical goods under the same class.

In deciding the opposition, the Bureau of Legal Affairs noted that the only difference between the competing marks are their second and third letters. These differences are insignificant as the applied mark’s second and third letters appear to be just an interchanged version of Daicel’s mark. The Bureau cited a Supreme Court decision, which clarifies that the question of whether confusion is likely is not to be answered by juxtaposing the competing marks. Likelihood of confusion must be determined on the basis of a casual purchaser buying under the prevalent trade conditions and his propensity to suppose one mark to be the other, as caused by the disputed mark. Based on this precedent, the Bureau concluded that confusion is more likely to happen in this case because the goods of the competing marks were related. All of these observations lead the Bureau to sustain the opposition filed by Daicel and to reject the registration of CFF’s ‘DIACEL’ mark.

This decision does not deviate from established principle of Trademark Law. The case should be seen as a reminder that likelihood of confusion will mostly be determined using consumer perception. It should be analyzed in terms of the buyer vis-à-vis the marks, rather than the marks vis-à-vis each other. It is through this mindset that one would realize that confusion cannot be avoided by merely adding, removing, or changing some letters of a registered mark. Confusion subsists so long as there is ingenious imitation between the marks capable of deceiving the ordinarily intelligent buyer.

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