Philippine Jurisprudence: The Skechers Trademark Case (2011)

Skechers, USA, Inc. v. Inter-Pacific Industrial Trading Corp.

G.R. No. 164321 (2011)

Skechers, USA Inc. is the owner of the registered trademarks “Skechers” and “S within an oval logo”.

Skechers filed a criminal case for trademark infringement against several store-owners that were selling shoes branded as “Strong” and bearing a similar “S” logo. The Regional Trial Court (RTC)  issued search warrants, allowing the National Bureau of Investigation (NBI) to raid the stores and confiscate 6,000 pairs of shoes.

The accused moved to quash the warrants, saying that there was no confusing similarity between the “Skechers” and the “Strong” brands.

The RTC granted the motion to quash and ordered the NBI to return the seized goods. The court said that the two brands had glaring differences and that an ordinary prudent consumer would not mistake one for the other.

On certiorari, the Court of Appeals (CA) affirmed the RTC ruling.

The matter was elevated to the Supreme Court (SC).

Issue: Did the accused commit trademark infringement?

Yes, the accused is guilty of trademark infringement.

Under the IP Code (RA No. 8293), trademark infringement is committed when: 

Remedies; Infringement. — 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. (emphasis supplied)

There is trademark infringement when the second mark used is likely to cause confusion. There are two tests to determine this:

1. Dominancy Test – the court focuses on the similarity of the dominant features of the marks that might cause confusion in the mind of the consumer. Duplication or imitation is not necessary. Even accidental confusion may be cause for trademark infringement. More consideration is given to the aural and visual impressions created by the marks on the buyers and less weight is given to factors like price, quality, sales outlets and market segments.  

Applied to this case: The SC found that the use of the “S” symbol by Strong rubber shoes infringes on the registered Skechers trademark. It is the most dominant feature of the mark -- one that catches the buyer’s eye first. Even if the accused claims that there was a difference because the “S” used by Skechers is found inside an oval, the fact that the accused used the dominant “S” symbol already constitutes trademark infringement.  

The SC disagreed with the CA reasoning that the “S” symbol is already used for many things, including the Superman symbol. Even if this is true, the fact that Strong used same stylized “S” symbol as that of the Skechers brand makes this a case of trademark infringement. The same font and style was used in this case. The Superman “S” symbol is clearly different from the “S” in this case.  

2. Holistic or Totality Test – the court looks at the entirety of the marks as applied to the products, including the labels and packaging. You must not only look at the dominant features but all other features appearing on both marks.  

Applied to this case: Both RTC and CA used the Holistic Test to rule that there was no infringement. Both courts argued the following differences: 

• The mark “S” found in Strong Shoes is not enclosed in an “oval design.”

• The word “Strong” is conspicuously placed at the backside and insoles.

• The hang tags and labels attached to the shoes bears the word “Strong” for respondent and “Skechers U.S.A.” for private complainant;

• Strong shoes are modestly priced compared to the costs of Skechers Shoes.
 

Also using the Holistic Test, the SC corrected the lower courts and ruled that the striking similarities between the products outweigh the differences argued by the respondents:

• Same color scheme of blue, white and gray;

• Same wave-like pattern on the midsole and the outer sole;

• Same elongated designs at the side of the midsole near the heel;

• Same number of ridges on the outer soles (five at the back and six in front);

• Same location of the stylized “S” symbol;

• The words "Skechers Sport Trail" at the back of the Skechers shoes and "Strong Sport Trail" at the back of the Strong shoes, using the same font, color, size, direction and orientation;

• Same two grayish-white semi-transparent circles on top of the heel collars.

The features and overall design of the two products are so similar that there is a high likelihood of confusion. 

Two products do not need to be identical, they just need to be similar enough to confuse the ordinary buyer in order to constitute trademark infringement (Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., 186 Phil. 85 [1980]). Also, the difference in price cannot be a defense in a case for trademark infringement (McDonald’s Corporation v. L.C. Big Mak Burger, Inc., 480 Phil. 402, 434 [2004]).

There are two types of confusion:

1. Product Confusion – where the ordinary prudent purchaser would be induced to purchase on product in the belief that he was buying another.
2. Source or Origin Confusion – although the goods are different, the use of the mark causes the consumer to assume that both products originate from the same source. 

Trademark law protects the owner not only from product confusion but also from source confusion. Protection is not limited to the same or similar products but extends to all cases where:

• The consumer is misled into thinking that the trademark owner extended his business into a new field;

• The consumer is misled into thinking that the trademark owner is in any way connected to the infringer’s activities; or 

• The infringement forestalls the normal potential expansion of the trademark owner’s business.

Trademark law does not only protect the owner’s reputation and goodwill, it also protects the consumers from fraud and confusion. 

In this case, it is clear that there was an attempt to copy the trademark owner’s mark and product design. In trademark infringement cases, you do not need to copy another's mark or product exactly. Colorable imitation is enough.