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While not explicitly mentioned in the Intellectual Property Code of the Philippines, and seldom mentioned in jurisprudence, trademark dilution may be a viable option for owners of famous marks as grounds for filing opposition and cancellation actions. This concept, which addresses the unauthorised use of a mark in ways that weaken its distinctiveness or tarnish its reputation, can provide an additional layer of protection for brand owners aside from the IP Code provisions on well-known marks.

Section 134 of the IP Code allows any person who believes that he/she would be damaged by the registration of a mark to file an opposition. The grounds for prohibiting trademark registrations are not confined to the 13 enumerated in section 123.1. Further, in Suyen Corporation v Danjaq LLC, the Philippine Supreme Court was clear in stating that the brand owner incurs damage if there is trademark dilution.

In contrast to the type of damage involved in section 123.1(d) of the IP Code – where harm arises from the likelihood of confusion among consumers – the concept of damage in trademark dilution is broader and pertains to the interests of the mark owner.

The concept of trademark dilution as it is understood in the US has been followed by many jurisdictions. In the US, trademark dilution has been resorted to in instances where a mark that is identical to a famous mark is used on totally unrelated goods or services.

In the 2005 case of Levi Strauss v Clinton Apparelle, the Philippine Supreme Court adopted the concept of trademark dilution. The court explained that trademark dilution is the lessening of capacity of a mark to identify the goods it is used on because another mark has copied it, even if there is no likelihood of confusion. The rationale is to protect famous marks from subsequent uses that blur the distinctiveness of the mark. It can take two forms: dilution by blurring, or dilution by tarnishment.

Citing US jurisprudence, the Suyen case states that in determining whether a mark is likely to cause blurring, the courts consider all relevant factors, including: (1) degree of similarity of the marks; (2) degree of inherent or acquired distinctiveness of the famous mark; (3) extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark; (4) degree of recognition of the famous mark; (5) whether the user of the mark intended to create an association with the famous mark; and (6) any actual association between the mark and the famous mark.

On the other hand, dilution by tarnishment is association arising from the similarity between a mark and the famous mark that harms the reputation of the famous mark, such as the use of the mark on inferior products.

Note that the goods or services covered by the famous mark may not be the same as those of the impugned mark. There may be a finding of trademark dilution even in the absence of competition. The critical requirement is that the mark must have already become a famous mark at the time the application was filed, or when the use of the contested mark commenced.

In the 2008 US case of Hershey Company et al v Art Van Furniture Inc, the Michigan court found that Art Van’s use of a delivery truck decoration depicting a chocolate-brown sofa emerging from a wrapper was likely to dilute the distinctive quality of Hershey’s famous trademark. This ruling came after the US Trademark Dilution Revision Act of 2006 was enacted.

Courts consider the degree of similarity between the marks, with a higher degree of similarity increasing the likelihood that the distinctiveness of the famous mark will be compromised. Coined or fanciful marks receive the strongest protection, while arbitrary marks with less exclusive use are afforded lesser protection.

The IP Code has remained largely unchanged for more than two decades, while infringers have evolved their tactics, finding ways to skirt established standards such as the dominancy test and likelihood of confusion. By providing a mechanism that tackles instances where likelihood of confusion is absent, trademark dilution may address nuanced threats to a mark’s distinctiveness and reputation. This will safeguard famous marks from unauthorised use, and reinforces their role as powerful identifiers of quality and reputation.

Ernest Luigi A Manzanares is an associate at Federis & Associates Law Offices