CITIGROUP, INC. vs. CITYSTATE SAVINGS BANK, INC.

FACTS: Citigroup, a corporation duly organized under the laws of the State of Delaware engaged in banking and financial services.

In 1970s, Citibank N.A., a wholly-owned subsidiary of petitioner, installed its first automated teller machines in over a hundred New York City branches.

In 1984, Citibank N.A., Philippine Branch, began the development of its domestic Automated Teller Machine (ATM) network.

Citibank Savings, Inc. became an indirect wholly-owned subsidiary of Citibank, N.A. The ATM cards issued by Citibank N.A., Philippine Branch and Citibank Savings, Inc.

are labelled "CITICARD".

In addition, petitioner or Citibank N.A., a wholly-owned subsidiary of petitioner, owns the following other trademarks currently registered with the Philippine [Intellectual

Property Office], to wit: "CITI and arc design", "CITIBANK", "CITIBANK PAYLINK", "CITIBANK SPEEDCOLLECT", "CITIBANKING", "CITICARD", "CITICORP", "CITIFINANCIAL", "CITIGOLD", "CITIGROUP", "CITIPHONE BANKING'', and "CITISERVICE".

Sometime in the mid-nineties, a group of Filipinos and Singaporean companies formed a consortium to establish respondent Citystate Savings Bank

Respondent's registered mark has in its name affixed a lion's head, which is likened to the national symbol of Singapore, the Merlion.

Respondent opened its initial branch in Makati City. From then on, it endeavored to expand its branch network.

In line with this, respondent filed an application for registration with the [Intellectual Property Office] on 21 June 2005 of the trademark "CITY CASH WITH GOLDEN LION'S HEAD" for its ATM service

Citigroup, Inc. (Citigroup) filed an opposition to Citystate's application. Citigroup claimed that the "CITY CASH WITH GOLDEN LION'S HEAD" mark is confusingly similar to its own "CITI" marks.

The Director of the Bureau of Legal Affairs... concluded that the dominant features of the marks were the words "CITI" and "CITY," which were almost the same in all aspects.

(Director General Cristobal) reversed the November 20, 2008 Decision of the Director of the Bureau of Legal Affairs and gave due course to Citystate's trademark application.

The Court of Appeals found that Director General Cristobal did not act with grave abuse of discretion in ruling that the parties' trademarks were not confusingly similar, and in giving due course to Citystate's trademark application.

Respondent argues that its mark is not confusingly similar to petitioner's[29] and that petitioner's fears are purely speculative.[30] It claims that the phonetic similarity between "CITY" and "CITI" is not sufficient to deny its registration, asserting that this Court has ruled that idem sonans alone is insufficient basis for a determination of the existence of confusing similarity.

ISSUE: Whether or not the Court of Appeals committed an error of law in finding that there exists no confusing similarity between petitioner Citigroup, Inc.'s and respondent Citystate Savings Bank, Inc.'s marks.

HELD: There is also an underlying economic justification for the protection of trademarks: an effective trademark system helps bridge the information gap between producers and consumers, and thus, lowers the costs incurred by consumers in searching for and deciding what products to purchase.

There is no objective test for determining whether the confusion is likely. Likelihood of confusion must be determined according to the particular circumstances of each case. To aid in determining the similarity and likelihood of confusion between marks, our jurisprudence has developed two (2) tests: the dominancy test and the holistic test.

With these guidelines in mind, this Court considered "the main, essential, and dominant features" of the marks in this case, as well as the contexts in which the marks are to be used. This Court finds that the use of the "CITY CASH WITH GOLDEN LION'S HEAD" mark will not result in the likelihood of confusion in the minds of customers.

A visual comparison of the marks reveals no likelihood of confusion.

This Court agrees with the observation of Director General Cristobal that the most noticeable part of this mark is the golden lion's head device, and finds that after noticing the image of the lion's head, the words "CITY" and "CASH" are equally prominent.

Applying the dominancy test, this Court sees that the prevalent feature of respondent's mark, the golden lion's head device, is not present at all in any of petitioner's marks. The only similar feature between respondent's mark and petitioner's collection of marks is the word "CITY" in the former, and the "CITI" prefix found in the latter. This Court agrees with the findings of the Court of Appeals that this similarity alone is not enough to create a likelihood of confusion.

This Court also agrees with the Court of Appeals that the context where respondent's mark is to be used, namely, for its ATM services, which could only be secured at respondent's premises and not in an open market of ATM services, further diminishes the possibility of confusion on the part of prospective customers.

Petitioner argues that Emerald Manufacturing is distinguishable from this case, insisting that ATM services are more akin to ordinary household items than they are akin to brand name jeans, in terms of how their customers choose their providers ATM services, like other bank services, are generally not marketed as independent products. Indeed, as pointed out by petitioner itself, ATM cards accompany the basic deposit product in most banks. They are generally adjunct to the main deposit service provided by a bank. Since ATM services must be secured and contracted for at the offering bank's premises, any marketing campaign for an ATM service must focus first and foremost on the offering bank. Hence, any effective internet and newspaper advertisement for respondent would include and emphasize the golden lion's head device. Indeed, a radio advertisement would not have it. It should not be forgotten, however, that a mark is a question of visuals, by statutory definition. Thus, the similarity between the sounds of "CITI" and "CITY" in a radio advertisement alone neither is sufficient for this Court to conclude that there is a likelihood that a customer would be confused nor can operate to bar respondent from registering its mark.