Dominancy test approved by Supreme Court

In McDonald's Corporation v Macjoy FastFood Corporation (Case GR 166115, promulgated on February 2 2007), the Supreme Court has held that the mark MACJOY (and device) used by Macjoy FastFood Corporation as a mark for fried chicken, chicken barbeque, burgers, fries, spaghetti, tacos, sandwiches and steaks is confusingly similar to McDonald's Corporation's marks MCDONALDS, MCCHICKEN, MACFRIES, BIGMAC, MCDO, MCSPAGHETTI, MCSNACK and MC.

Before the Intellectual Property Office (IPO), McDonald's opposed the application of Macjoy FastFood Corporation for the registration of the mark MACJOY (and device) on the grounds that use for goods identical or related to McDonald's products would confuse or deceive purchasers into believing that the goods originated from the same source or origin. McDonald's also claimed that Macjoy's use of MACJOY (and device) falsely suggested a connection or affiliation with McDonald's restaurant services and food products, and would cause the dilution of the distinctiveness of its registered and internationally recognized marks.

The IPO rejected the application based on the fact that the predominant features such as the 'M', 'MC' and 'MAC' appearing in McDonald's marks and the mark MACJOY (and device) easily attracted the attention of would-be customers. On appeal by Macjoy, the Court of Appeals took into account factors such as colour, designs, spelling, sound, concept, sizes and audio and visual effects of the marks, and held that the prefix 'MC/MAC' was the only similarity between, what it felt to be, two completely different marks.

On appeal, the Supreme Court noted that jurisprudence has developed two tests in determining confusing similarity between rival marks, the dominancy test and the holistic test. The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion or deception. The holistic test requires the court to consider the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity.

While the IPO applied the dominancy test, the Court of Appeals applied the holistic test. Although the Supreme Court agreed with the Court of Appeal's detailed enumeration of the differences between the two competing trademarks, it declared that the holistic test was not applicable in this case, the dominancy test being the one more suitable.

The Supreme Court referred to its 2004 decision in McDonald's Corp v LC Big Mak Burger Inc (Case GR 143993, August 18 2004), in which it found the trademark BIG MAK confusingly similar to McDonald's BIG MAC mark. The Supreme Court declared that LC Big Mak Burger Inc committed trademark infringement and unfair competition against McDonald's for using the mark BIG MAK on its own hamburgers. The Supreme Court declared that Section 157 of the Intellectual Property Code has adopted the dominant feature test as the statutory test for resolving whether rival marks are confusingly similar. It also abandoned the holistic test, which takes into account all the surrounding circumstances relating to the unauthorized use to determine if such use is likely to confuse consumers.

Under the holistic test, the BIG MAK mark could have been declared non-infringing since the hamburgers were sold on open, roadside stalls in contrast to McDonald's Big Mac hamburgers, which are sold at its air-conditioned outlets.

The twin decisions should probably serve as a signal to the lower courts to abandon the holistic test and implement the test of dominancy.

Vicente B Amador, Sycip Salazar Hernandez & Gatmaitan, Manila