UFC Philippines, Inc. vs. Barrio Fiesta Manufacturing Corporation

The dominancy test governs the determination of confusing similarity between trademarks for ordinary, low-cost consumer goods. Where a junior mark incorporates the dominant feature of a senior registered mark and is used on closely related goods — such that an ordinary purchaser might reasonably assume a connection between the sources or that the senior user has expanded its business — registration must be refused under Section 123.1(d) of the Intellectual Property Code, even if the products are not identical and the junior mark includes additional elements.

Petitioner Nutri-Asia, Inc. (the surviving entity after a merger with UFC Philippines, Inc.) and its predecessors have used the trademark “PAPA” on banana catsup and other food sauces since 1954, deriving the mark from the surname of the original owner. Over the decades, petitioner obtained several registrations involving the “PAPA” term, including “PAPA KETSARAP” under Certificate of Registration No. 34681, which was timely renewed and remained valid. Respondent Barrio Fiesta Manufacturing Corporation filed an application on April 4, 2002 to register the composite mark “PAPA BOY & DEVICE” for lechon sauce (Class 30), a product closely related to catsup as an everyday table condiment. Petitioner opposed, asserting that the dominant element “PAPA” would cause confusion with its well-known family of marks.

• The Application and Opposition: Respondent’s composite mark “PAPA BOY & DEVICE” comprises the words “PAPA BOY,” a smiling hog-like character gesturing thumbs up, a blue ribbon-like device with the words “Lechon Sauce,” and the word “Barrio Fiesta” appearing above the mark on the product label. Petitioner opposed, claiming ownership of several “PAPA”-formative marks used on banana catsup and other sauces. Respondent argued that petitioner’s “PAPA” (Reg. No. 32416) and “PAPA BANANA CATSUP LABEL” (Reg. No. SR-6282) registrations had expired and could not bar the application, leaving only the timely renewed “PAPA KETSARAP” (Reg. No. 34681) as a valid basis.
• IPO Findings: The IPO-BLA found that the dominant feature of both petitioner’s “PAPA KETSARAP” and respondent’s applied-for mark was the word “PAPA,” which was the first and most conspicuous element that catches the eye and ear. The goods — banana catsup and lechon sauce — were closely related condiments falling under the same class and used for similar culinary purposes. The IPO-BLA concluded that confusion of goods and of business was likely: the public could mistake respondent’s lechon sauce as originating from petitioner or as a product line extension. The Director General affirmed, emphasizing that “PAPA BOY” as a phrase was what the purchaser would recall, not the secondary design elements.
• Court of Appeals Reversal: The CA disagreed, holding that only “PAPA KETSARAP” remained protectable, and that the holistic test showed sufficient dissimilarity. The CA noted differences in the marks’ overall presentation, the presence of “Barrio Fiesta” on the label, the distinct colors and nature of the sauces (red for banana catsup, dark brown for lechon sauce), and reasoned that a consumer seeking banana catsup would not mistakenly buy lechon sauce. It also observed that “PAPA” is a common term of endearment and could not be exclusively appropriated.

• Proper Test — Dominancy: Petitioner maintained that the IPO correctly applied the dominancy test, focusing on the dominant feature “PAPA,” which Section 155.1 of the Intellectual Property Code expressly incorporates. The CA’s use of the holistic test was erroneous, particularly for inexpensive household goods where consumers do not scrutinize details.
• Confusion of Business: Petitioner argued that the CA overlooked confusion of business. Banana catsup and lechon sauce are related condiments sold side by side; an ordinary consumer could reasonably believe that petitioner had expanded its “PAPA” product line to include lechon sauce, thereby misappropriating petitioner’s goodwill.
• “PAPA” as an Arbitrary Mark: Petitioner contended that when applied to food sauces, “PAPA” is an arbitrary, inherently distinctive mark with no logical connection to the goods, entitling it to strong protection. The common meaning of “father” does not diminish its registrability as a trademark.
• Deference to Administrative Agency: Petitioner stressed that the factual findings of the IPO, a specialized agency, were supported by substantial evidence and should have been accorded finality by the CA, which had no basis to substitute its own judgment.

• Expired Marks Cannot Bar Registration: Respondent countered that petitioner’s “PAPA” and “PAPA BANANA CATSUP LABEL” registrations had lapsed before the opposition was filed. Only “PAPA KETSARAP” remained valid, and it covered banana catsup only, not lechon sauce.
• No Confusing Similarity: Respondent argued that its mark’s dominant feature was “PAPA BOY” combined with the prominent hog-like character, while petitioner’s “PAPA KETSARAP” mark had “KETSARAP” as the visually dominant word. Under either the holistic or dominancy test, the marks were dissimilar in appearance, sound, spelling, and connotation.
• Dissimilar Goods and Trade Channels: Respondent maintained that banana catsup and lechon sauce are distinct products with different tastes, colors, and uses; a consumer would not mistake one for the other. The difference in goods negated any likelihood of either product or business confusion.
• Non-Exclusive Nature of “PAPA”: Respondent argued that “PAPA” is a common term of endearment and that numerous third-party marks containing the word coexist in the market. Petitioner could not claim exclusive ownership over the term, and respondent’s use derived from the nickname of a company founder, evidencing good faith.

• Applicable Test for Confusing Similarity: Whether the Court of Appeals erred in applying the holistic test instead of the dominancy test in determining whether respondent’s “PAPA BOY & DEVICE” mark is confusingly similar to petitioner’s “PAPA” marks.
• Likelihood of Confusion: Whether respondent’s applied-for mark creates a likelihood of confusion of goods or of business with petitioner’s valid “PAPA KETSARAP” mark, given the nature of the products, the ordinary purchaser, and the marks’ dominant features.
• Exclusive Right over “PAPA”: Whether petitioner can claim exclusive trademark rights over the word “PAPA” despite its dictionary meaning as a term of endearment, and whether such right can bar registration of a mark incorporating “PAPA BOY” for related goods.

• Applicable Test for Confusing Similarity: The dominancy test was properly applied by the IPO, whose expertise in trademark matters commands great respect. Section 155.1 of the Intellectual Property Code explicitly defines infringement by reference to a “dominant feature,” and prevailing jurisprudence for low-cost, mass-market goods applies the dominancy test because casual purchasers rely on general impressions rather than detailed scrutiny. The CA’s use of the holistic test was misplaced, and its substitution of judgment for that of the IPO was not warranted.
• Likelihood of Confusion: The word “PAPA” was correctly identified as the dominant feature in both “PAPA KETSARAP” and “PAPA BOY & DEVICE.” The additional words “KETSARAP” (descriptive) and “BOY,” along with the pictorial elements, do not overcome the predominance of “PAPA” — the first, most striking element that consumers would remember and use to call for the product. The goods are closely related condiments sold in similar packaging on the same grocery aisles. Although product confusion (buying lechon sauce thinking it is banana catsup) is less likely because of distinct colors and flavors, confusion of business is highly probable: consumers may reasonably assume that petitioner, the established source of “PAPA” sauces, has expanded into lechon sauce. This likelihood deprives petitioner of its right to the normal potential expansion of its business, a protected interest under trademark law.
• Exclusive Right over “PAPA”: The common dictionary meaning of “PAPA” as a term for “father” does not bar its registration or enforceability as a trademark. With respect to food sauces, “PAPA” has no logical connection to the goods and thus functions as an arbitrary mark — inherently distinctive and entitled to strong protection. Petitioner’s registration of “PAPA KETSARAP” confers the exclusive right to use the mark on the specified goods and on related goods under Section 138 of the IP Code. The existence of other marks containing “PAPA” in different commercial contexts does not authorize respondent to adopt the same dominant term for closely related products in a way that would cause confusion.

• Dominancy Test — Under this test, the likelihood of confusion is determined by focusing on the similarity of the main, prevalent, or essential features of the competing trademarks that might cause confusion or deception. Minor differences are disregarded. The test is explicitly codified in Section 155.1 of the Intellectual Property Code, which defines infringement as the “colorable imitation of a registered mark … or a dominant feature thereof.” It accords greater weight to the aural and visual impressions created on the ordinary purchaser. For inexpensive, frequently purchased household goods, the dominancy test is the appropriate standard because the casual consumer does not examine the marks in detail.
• Confusion of Business (Source or Origin Confusion) — Trademark law protects against two kinds of confusion: (1) confusion of goods, where the purchaser buys one product believing it is another; and (2) confusion of business, where, although the goods are different, the public is misled into believing that the junior user’s product originates from the senior user or that there is some affiliation or connection between them. The latter protects the trademark owner’s right to the normal potential expansion of its business into related product or market areas.
• Arbitrary Marks — A trademark that bears no logical or descriptive relation to the characteristics of the goods it identifies is classified as arbitrary or fanciful. Such marks are inherently distinctive and receive the highest level of protection. The word “PAPA” for banana catsup and similar condiments is arbitrary, notwithstanding its common dictionary meaning, because the concept of a father has no logical connection to food sauces.
• Deference to IPO Factual Findings — The Intellectual Property Office, by reason of its special knowledge and expertise over trademark matters, is in a better position to determine factual issues such as the dominant features of marks and the likelihood of confusion. Its findings, if supported by substantial evidence, are generally accorded great respect and finality by the courts, which may not re-weigh the evidence or substitute their own judgment.

• “Under the Dominancy Test, the dominant features of the competing marks are considered in determining whether these competing marks are confusingly similar. Greater weight is given to the similarity of the appearance of the products arising from the adoption of the dominant features of the registered mark, disregarding minor differences.”
• “The registered trademark owner may use his mark on the same or similar products, in different segments of the market, and at different price levels depending on variations of the products for specific segments of the market. … [T]he registered trademark owner enjoys protection in product and market areas that are the normal potential expansion of his business.”
• “If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate.”
• “Verily, the protection of trademarks as intellectual property is intended not only to preserve the goodwill and reputation of the business established on the goods bearing the mark through actual use over a period of time, but also to safeguard the public as consumers against confusion on these goods.”

• Skechers, U.S.A., Inc. v. Inter Pacific Industrial Trading Corp., 662 Phil. 11 (2011) — Applied to reiterate the dominancy test and the two types of confusion (goods and business), and to underscore that minor dissimilarities do not outweigh striking similarities in dominant features.
• Societe Des Produits Nestle, S.A. v. Dy, Jr., 641 Phil. 345 (2010) — Relied upon for the definitions of the two types of confusion, the affirmation of the dominancy test for inexpensive consumer goods, and the rule that trademark protection extends to the normal expansion of business.
• McDonald’s Corporation v. MacJoy Fastfood Corporation (cited as G.R. No. 143993, August 18, 2004) — Cited to illustrate application of the dominancy test where the common prefix “Mc/Mac” caused confusing similarity, supporting the principle that a shared dominant feature creates likelihood of confusion.
• Dermaline, Inc. v. Myra Pharmaceuticals, Inc., 642 Phil. 503 (2010) — Used to define trademark, to affirm the statutory basis of the dominancy test in Section 155.1 of the IP Code, and to apply the doctrine of confusion of business in related product areas.
• Berris Agricultural Co., Inc. v. Abyadang, 647 Phil. 517 (2010) — Invoked for the rule that factual findings of the IPO are entitled to great respect and finality when supported by substantial evidence.

• Section 155.1, Republic Act No. 8293 (Intellectual Property Code) — Defines trademark infringement as the use of a colorable imitation of a registered mark “or a dominant feature thereof.” Served as the statutory anchor for applying the dominancy test.
• Section 123.1(d), Republic Act No. 8293 — Prohibits registration of a mark that is identical or nearly resembles a registered mark with an earlier filing or priority date for the same or closely related goods or services, if likely to deceive or cause confusion. Applied to bar respondent’s application.
• Section 138, Republic Act No. 8293 — Provides that a certificate of registration is prima facie evidence of the validity of the registration, the registrant’s ownership, and the exclusive right to use the mark on the goods and those related thereto. Used to establish petitioner’s exclusive rights.
• Section 147.1, Republic Act No. 8293 — Grants the registered mark owner the right to prevent third parties from using identical or similar signs on identical or similar goods where such use would result in a likelihood of confusion. Underpinned petitioner’s right to oppose.
• Rules of Procedure for Intellectual Property Rights Cases (A.M. No. 10-3-10-SC), Rule 18, Sections 1, 4, and 5 — Set forth guidelines on determining likelihood of confusion, including consideration of the general impression of the ordinary purchaser, the factors for non-identical goods, and the rule that the Nice Classification alone does not determine similarity. Applied in framing the confusion analysis.

Chief Justice Maria Lourdes P.A. Sereno (Chairperson), Justice Lucas P. Bersamin, Justice Estela M. Perlas-Bernabe, Justice Francis H. Jardeleza.