In a trademark dispute between Citigroup, Inc. and Citystate Savings Bank, Inc., the Supreme Court ruled in favor of Citystate, allowing the registration of its trademark “CITY CASH WITH GOLDEN LION’S HEAD” for ATM services. The Court found that the golden lion’s head device, along with the overall context of ATM service usage, sufficiently distinguished Citystate’s mark from Citigroup’s “CITI” family of marks, minimizing the likelihood of consumer confusion. This decision underscores the importance of considering the entirety of a trademark and the specific market context when assessing potential infringement.

Lion’s Head Versus Citi: Differentiating Financial Brands in the Marketplace

The case originated from Citystate’s application to register its trademark “CITY CASH WITH GOLDEN LION’S HEAD” with the Intellectual Property Office (IPO). Citigroup opposed this registration, arguing that Citystate’s mark was confusingly similar to its own registered trademarks, particularly those containing the prefix “CITI”. The IPO’s Bureau of Legal Affairs initially sided with Citigroup, but this decision was overturned by the Director-General of the IPO, Adrian S. Cristobal, Jr., who found that the golden lion head device was the dominant feature of Citystate’s mark and not likely to cause confusion. This ruling was subsequently upheld by the Court of Appeals, leading Citigroup to escalate the matter to the Supreme Court. The central legal question was whether the Court of Appeals erred in determining that no confusing similarity existed between the trademarks of Citigroup and Citystate.

The Supreme Court approached the issue by emphasizing the purpose of trademark law, which is to protect the distinctiveness of brands and prevent consumer confusion. As the Court stated,

“The purpose of the law protecting a trademark cannot be overemphasized. They are to point out distinctly the origin or ownership of the article to which it is affixed, to secure to him, who has been instrumental in bringing into market a superior article of merchandise, the fruit of his industry and skill, and to prevent fraud and imposition.”

The Court noted the importance of maintaining a fair and competitive marketplace, where businesses can build their brand reputation without undue interference. The Court also cited Mirpuri v. Court of Appeals, tracing the historical development of trademark law and its evolution to protect business integrity.

To assess the likelihood of confusion, the Supreme Court employed two established tests: the dominancy test and the holistic test. The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion and deception. In contrast, the holistic test considers the entirety of the marks as applied to the products, including the labels and packaging, in determining confusing similarity. These tests are not mutually exclusive but rather complementary tools to evaluate the overall impression created by the marks on consumers.

In applying the dominancy test, the Court identified the golden lion’s head device as the most noticeable feature of Citystate’s mark, setting it apart from Citigroup’s marks. The Court also noted that while Citigroup’s marks often included a red arc device, or consisted of the prefix “CITI” added to other words, these elements were absent in Citystate’s mark. The presence of the lion’s head in Citystate’s design significantly lessened the chance that consumers would mistake it for a Citigroup product, even though the word “CITY” may have some phonetic similarity to “CITI”. The Court agreed with the Court of Appeals’ finding that the dissimilarities between the marks were noticeable and substantial.

Building on this finding, the Court considered the context in which Citystate’s mark would be used, specifically for ATM services. The Court highlighted that ATM services are not marketed as independent products but are usually adjunct to the main deposit service provided by a bank. Before customers can use ATM services, they must first open an account with the bank, which means they already have a relationship with that specific bank, further lessening the likelihood of confusion. In this context, the Court reasoned that the specific location and branding of ATMs would further minimize potential consumer confusion. As such, the Court cited Emerald Garment Manufacturing Corp. vs. Court of Appeals, emphasizing the importance of considering the “ordinary purchaser” as an “ordinarily intelligent buyer”.

Citigroup argued that in advertisements outside the bank premises, the absence of the golden lion’s head might lead to confusion. The Supreme Court rejected this argument, stating that any effective marketing campaign for Citystate’s ATM service would still emphasize the distinct elements of its brand. The Court clarified that since ATM services must be secured and contracted for at the bank’s premises, advertisements would focus primarily on the offering bank, thus reducing potential consumer confusion. Even if there was phonetic similarity in radio ads, it was not enough to cause trademark infringement. The court stated that

“a mark is a question of visuals, by statutory definition…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.”

This approach contrasts with cases where products are sold in an open market, where the risk of confusion is much higher. By considering the specific circumstances of how ATM services are obtained and used, the Court provided a balanced and practical assessment of the likelihood of confusion. The Court also addressed Citigroup’s concern that it was not claiming a monopoly over all marks prefixed by words sounding like “city.” The Court agreed, noting that Director General Cristobal correctly considered Citystate’s history and name. Ultimately, the Supreme Court affirmed the Court of Appeals’ finding that the Director General of the Intellectual Property Office did not commit any grave abuse of discretion in allowing the registration of Citystate’s trademark.

FAQs

What was the key issue in this case?	The key issue was whether the trademark “CITY CASH WITH GOLDEN LION’S HEAD” was confusingly similar to Citigroup’s “CITI” family of marks, preventing its registration. The court had to determine if consumers were likely to confuse the ATM services offered by Citystate with those associated with Citigroup due to the trademark similarities.
What is the dominancy test in trademark law?	The dominancy test focuses on the similarity of the main, essential, and dominant features of competing trademarks. If these features are similar enough to cause confusion or deception, trademark infringement is likely to occur, even without exact duplication.
How did the Court apply the holistic test?	The holistic test requires a consideration of the entirety of the marks as applied to the products, including labels and packaging. The observer must focus not only on the predominant words but also on the other features appearing on both marks to determine if one is confusingly similar to the other.
What role did the golden lion’s head play in the Court’s decision?	The golden lion’s head device was crucial in differentiating Citystate’s mark from Citigroup’s marks. The Court recognized that this distinct visual element was a prevalent feature that would likely be noticed by consumers, reducing the potential for confusion.
Why was the context of ATM services important?	The context of ATM services was important because it showed that customers must first open an account with a specific bank to use its ATMs. This pre-existing relationship with the bank, along with the bank’s name being displayed at the ATM, reduces the likelihood of confusing the service with another brand.
What is the significance of the “ordinary purchaser” in this case?	The “ordinary purchaser” is considered an “ordinarily intelligent buyer” who is familiar with the products in question. The Court gave credit to the ordinary purchaser’s ability to differentiate between the marks, especially given that banking services require more informed decisions than ordinary household purchases.
How does this ruling affect trademark registration for financial institutions?	This ruling emphasizes that trademarks for financial services must be evaluated in the context of how those services are typically obtained and used. It suggests that distinct visual elements and branding within the specific service environment can help differentiate trademarks, even with some phonetic similarities.
What was Citigroup’s main argument in opposing the trademark registration?	Citigroup argued that the “CITY CASH” portion of Citystate’s trademark was confusingly similar to its “CITI” family of marks. They claimed that consumers might mistakenly believe that Citystate’s ATM services were associated with or endorsed by Citigroup, leading to potential consumer confusion and infringement.

In conclusion, the Supreme Court’s decision in Citigroup, Inc. v. Citystate Savings Bank, Inc. provides valuable insights into the application of trademark law in the context of financial services. The Court’s emphasis on the distinctiveness of the golden lion’s head device and the specific circumstances of ATM service usage underscores the importance of considering the totality of a trademark and its market context when assessing the likelihood of consumer confusion.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: CITIGROUP, INC. VS. CITYSTATE SAVINGS BANK, INC., G.R. No. 205409, June 13, 2018