Trademark owners usually ask for risk assessment on registrability and infringement of their proposed marks before filing with the IP office. The trademark agent does the analysis of confusing similarity between the proposed mark against registered and pending trademark applications as appearing in the database of the IP office, on the basis of appearance, sound and meaning. In doing this, the issue of whether it would be helpful to the trademark owner for the agent to recommend registration in classes that would be considered as within the zone of the natural expansion of the goods or services, or in the case where there are senior registrants or users of confusingly similar marks but covering related goods, to avoid those classes and/or think of possible changes to the subject mark, or possible defenses. 

Philippine courts and the Intellectual Property Office of the Philippines (IPOPHL) have recognized this doctrine of the natural expansion of trademark rights for goods and/or services not specified in its trademark registration, nor used earlier. In the case of Sta. Ana v. Maliwat (G.R. No. L-23023, August 31, 1968), the Supreme Court had ruled that the “protection to which the owner of a trademark is entitled is not limited to guarding his goods or business from actual market competition with identical or similar products of the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or trade-name is likely to lead to a confusion of source, as where prospective purchasers would be misled into thinking that the complaining party has extended his business into the field or is in any way connected with the activities of the infringer; or when it forestalls the normal potential expansion of his business”. This doctrine, however, is not applied automatically, but is considered as one factor within the broader analysis of relatedness, anchored on consumer perception, market realities, and credible evidence, as shown in the following leading cases: 

Wines and cigarettes (Mighty Corporation v. E. & J. Gallo Winery, G.R. No. 154342, July 14, 2004): Mighty, a company engaged in the cultivation, manufacture and sale of tobacco products, has used the mark GALLO, the Spanish word for rooster since 1973. For the winery, GALLO is a family surname, and registered in the Philippines since 1971, but actually used commercially for wines in 1979. Gallo claimed that cigarettes were natural expansion of its business because the products flowed thru the same retail trade channels, and that its Gallo mark was internationally well-known. The Regional Trial Court (RTC) and the Court of Appeals (CA), held that wines and cigarettes are related products because: (1) “they are related forms of vice, harmful when taken in excess, and used for pleasure and relaxation” and (2) “they are grouped or classified in the same section of supermarkets and groceries.”  

The Supreme Court, however, found said “premises patently insufficient and too arbitrary to support the legal conclusion that wines and cigarettes are related products within the contemplation of the trademark law and the Paris Convention.” Elements expressed by the Supreme Court, which held that wines and cigarettes are not identical, similar, competing or related goods, include: (i) strict application of the trademark law and the Paris Convention, which proscribe trademark infringement not only of goods specified in the certificate of registration, and (ii), in which the court also applied the modern concept of related goods, i.e. when goods are so related, even if non-competing, that the public may be, or is actually, deceived and misled that they come from the same maker or manufacturer, trademark infringement occurs. The Supreme Court came up with a list of factors in determining whether goods are related or not, which is consistently quoted or referred to. 

Paints and footwear (Canon Kabushiki Kaisha v. NSR Rubber Corporation, Court of Appeals, G.R. No. 120900, July 20, 2000): Canon argued in the opposition case that NSR’s use of the mark CANON on footwear would forestall its normal expansion, and that the public could presume that Canon would also produce a wide variety of footwear considering the diversity of its products marketed worldwide, claiming earlier us of said mark on footwear. The Supreme Court disagreed, ruling that bare assertions and hypothetical possibilities do not establish natural expansion. Canon failed to attach objective evidence that would convince the court that it has also embarked in the production of footwear products. The court found it implausible that footwear could be considered a logical extension of a business engaged in chemical products, paints, and toner.  

Power supply and audio equipment accessories versus television and DVD player (Kolin Electronics Co., Inc., v. Kolin Philippines International, Inc., G.R. No. 228165, February 09, 2021): This is an opposition case filed by Kolin Electronics (KECI) against Kolin Philippines (KPII) for the stylized mark KOLIN for television and DVD player. KECI’s KOLIN trademark registration covers automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, PA amplifier AC-DC. KPII’s application specifies the goods television and DVD player. Among the relevant questions posed by the Supreme Court is: Will KPII’s exclusive appropriation of a specific stylized version of the mark KOLIN cause “damage” to KECI who, as it stands, has an existing right to use any and all stylized versions of KOLIN for a range of goods/services (i.e., goods covered by its registration, related goods/services, and goods/services falling within the normal expansion of its business)? To answer the question, the court held that “in determining likelihood of confusion – which can manifest in the form of ‘confusion of goods’ and/or ‘confusion of business’ – it came up with a multi-factor test, embodying the following criteria: 

a) The strength of plaintiff’s mark; 

b) The degree of similarity between the plaintiff’s and the defendant’s marks; 

c) The proximity of the products or services; 

d) The likelihood that the plaintiff will bridge the gap; 

e) Evidence of actual confusion; 

f) The defendant’s good faith in adopting the mark; 

g) The quality of defendant’s product or service; and/or 

h) The sophistication of the buyers. 

Among the above, two factors are consistently regarded as pivotal: (i) the resemblance of the marks, or the degree of similarity between the parties’ marks, and (ii) the relatedness of the goods or services, or the proximity of the products or services in the marketplace. While these factors carry particular weight, the remaining considerations likewise inform the overall determination of likelihood of confusion. Significantly, this framework ensures that claims of natural or potential expansion are assessed not solely from the trademark owner’s perspective, but from that of the ordinary intelligent buyer, whose perception ultimately anchors the analysis. The factor involving the “likelihood that the plaintiff will bridge the gap” pertains to the possibility that the plaintiff will expand its product offerings to cover the product areas of the defendant. The scope of protection afforded to registered trademark owners is not limited to protection from infringers with identical goods. The scope of protection extends to protection from infringers with related goods, and to market areas that are the normal expansion of business of the registered trademark owners. As held by the Supreme Court, the goods covered by both parties’ KOLIN marks are related. Therefore, it is likely that the goods, television and DVD player, are covered by and falls within the normal potential expansion of business of KECI. 

Use of well-known mark on unrelated goods (Suyen Corporation v. Danjaq LLC (G.R. No. 250800. July 06, 2021): In this case, the Supreme Court evaluated expansion not as a speculative claim by the senior user Danjaq, which owned the James Bond mark, but as part of the multifactor test for likelihood of confusion, particularly in the context of a well-known mark. The Court held that the mark AGENT BOND for hair care products by Suyen was confusingly similar to Danjaq’s well-known JAMES BOND mark, resulting in confusion of business under the IP code notwithstanding the fact that the goods were not identical. The court noted that Danjaq had previously sold similar goods (e.g., BOND GIRL 007 for fragrance, cosmetic and toiletry products), suggesting that hair styling products fall within the “normal potential expansion of [Danjaq’s] business.” Thus, the expansion of business claim is not a mere speculation but supported by actual market conditions.  

Significantly, the court recognized that the protection afforded to a well-known mark extends beyond identical or closely related goods where the junior mark suggests a connection with the famous mark and falls within the senior user’s legitimate zone of commercial interest. In assessing the likelihood of confusion, the court considered, among other things, the strength of the JAMES BOND mark, the degree of similarity under the dominancy test, and the likelihood that the senior mark owner could bridge the gap, noting that Danjaq had previously licensed the BOND name for fragrance, cosmetic and toiletry products. In this context, hair care products were deemed to fall within the normal potential expansion of Danjaq’s business. 

Conclusion 

Philippine courts have consistently held that natural or potential expansion is never presumed. Courts require demonstrable indicators – such as proximity of markets, industry practice and credible evidence of expansion – before extending trademark protection beyond the goods or services expressly covered by the registration certificate. Absent such proof, claims of natural expansion are treated with judicial restraint, consistent with the policy against granting overbroad trademark monopolies. Further, it is desirable for trademark owners to review their trademark portfolio and consider filing a request to have their mark declared as well-known which are given stronger protection against identical or confusingly similar mark covering unrelated goods, under for IPOPHL Memorandum Circular No. 2025-009, which took effect on April 28, 2025.