LIVE'S vs LEVI'S: Supreme Court Rules on Trademark Confusion and Cancellation

The Supreme Court has ruled that the trademark "LIVE'S" is confusingly similar to the well-known "LEVI'S" mark, ordering the cancellation of the former's registration. The decision clarifies important principles on trademark protection, including how courts determine confusing similarity and why a prior criminal case dismissal does not bar a separate administrative cancellation case.

The Case Background

Levi Strauss & Co., a foreign corporation, has owned the "LEVI'S" word mark since 1946 and has used it extensively on clothing items under Class 25 of the Nice Classification. In 1972, it granted Levi Strauss Phils., Inc. (LSPI) a license to use its registered marks in the Philippines.

Meanwhile, respondent Antonio Sevilla originally registered the mark "LIVE'S," also covering Class 25 goods. Sevilla later assigned his rights to Antonio Guevarra, who operated as Vogue Traders Clothing Company.

In 1995, LSPI commissioned a consumer survey called "Project Cherokee 5" to determine whether the public confused other entities' marks with Levi Strauss's marks. The survey results showed that 86% of participants associated the "LIVE'S" mark with "LEVI'S," and 90% read the stylized "LIVE'S" mark as "LEVI'S."

Levi Strauss then filed a petition to cancel the "LIVE'S" registration before the Bureau of Patents, Trademarks, and Technology Transfer (now the Intellectual Property Office or IPO), arguing that registration.

On the issue of mootness, the Court held that the assignment of the trademark to Dale Sy did not render the case moot. The registration remained valid and subsisting. More importantly, since the assignment occurred while the cancellation case was pending, Dale Sy was a transferee pendente lite. Under the Rules of Court, a transferee stands in the shoes of the original party and is bound by the proceedings and judgment in the case. The case could continue against the original parties.

On the issue of res judicata, the Court ruled that the prior case did not bar the cancellation petition. That case arose from a preliminary investigation conducted by the Department of Justice, which dismissed a criminal complaint for unfair competition due to lack of probable cause. The Court explained that a preliminary investigation is not a trial on the merits. It is merely an inquisitorial process to determine whether there is probable cause to file charges. A prosecutor's dismissal of a complaint during preliminary investigation does not determine the rights of the parties and cannot give rise to res judicata.

The Dominancy Test

On the substantive issue, the Court applied the Dominancy Test in determining confusing similarity. This test focuses on the similarity of the dominant features of competing trademarks that might cause confusion in the minds of the purchasing public. The Court noted that the Supreme Court En Banc had recently clarified in Kolin Electronics Co., Inc. v. Kolin Philippines International, Inc. that the Holistic Test has been abandoned in favor of the Dominancy Test.

Applying this test, the Court found that both marks consist of five letters with an apostrophe before the final "S." The only difference is that the letters "E" and "I" are interchanged, making "LIVE'S" a mere anagram of "LEVI'S." The Court also noted that both marks use a lowercase "E" in their stylized forms, adding to the visual similarity.

The Court further observed that even under the abandoned Holistic Test, the marks' overall presentation—including color scheme, borders, and design elements—were strikingly similar. The evidence of actual confusion from the survey supported the conclusion that consumers would likely be deceived.

Practical Takeaways

• The Dominancy Test is now the definitive standard for determining confusing similarity between trademarks in the Philippines, following the En Banc ruling in Kolin Electronics.
• A prior dismissal of a criminal complaint during preliminary investigation does not bar a subsequent administrative or civil case involving the same facts, because preliminary investigation is not a judgment on the merits.
• A trademark assigned while a cancellation case is pending does not render the case moot; the transferee is bound by the outcome of the case.
• Even minor differences between marks—such as rearranging letters—may not prevent a finding of confusing similarity if the dominant features create a likelihood of confusion.
• Businesses should conduct thorough trademark searches and consider potential anagrams or similar variations when selecting marks to avoid infringement risks.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.