3 Superior Commercial V Kunnan Enterprises

10/31/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 618
G.R. No. 169974. April 20, 2010.*
SUPERIOR COMMERCIAL ENTERPRISES, INC., petitioner, vs.

KUNNAN ENTERPRISES LTD. AND SPORTS CONCEPT &
DISTRIBUTOR, INC., respondents.
Mercantile Law; Trademarks; “ Trademark Infringement,” Defined.—

Section 22 of Republic Act No. 166, as amended (“RA 166”), the law
applicable to this case, defines trademark infringement as follows: Section
22. Infringement, what constitutes.—Any person who [1] shall use,
without the consent of the registrant, any reproduction, counterfeit, copy
or colorable imitation of any registered mark or tradename in connection
with the sale, offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely to cause confusion
or mistake or to deceive purchasers or others as to the source or origin of
such goods or services, or identity of such business; or [2] reproduce,
counterfeit, copy, or colorably imitate any such mark or tradename and
apply such reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to
be used upon or in connection with such goods, business or services, shall
be liable to a civil action by the registrant for any or all of the remedies
herein provided.”
Civil Procedure; Trademarks; Trademark Infringement; Parties;
Section 22 of Republic Act (RA) No. 166 states that only a registrant of a
mark can file a case for infringement; The cancellation of registration of a
trademark has the effect of depriving the registrant of protection from
infringement from the moment judgment or order of cancellation has
become final.—Essentially, Section 22 of RA 166 states that only a
registrant of a mark can file a case for infringement. Corollary to this,
Section 19 of RA 166 provides that any right conferred upon the registrant
under the provisions of RA 166 terminates when the judgment or order of
cancellation has become final, viz.: “Section 19. Cancellation of
registration.—If the Director finds that a case for cancellation has been
made out he shall order the cancellation of the registration. The order shall
not become effective until the period for appeal has elapsed, or if appeal is
taken, until
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* SECOND DIVISION.
http://www.central.com.ph/sfsreader/session/00000166ca17b1ee36bfa497003600fb002c009e/t/?o=False 1/25
532
532 SUPREME COURT REPORTS ANNOTATED
Superior Commercial Enterprises, Inc. vs. Kunnan Enterprises Ltd.
the judgment on appeal becomes final. When the order or judgment

becomes final, any right conferred by such registration upon the
registrant or any person in interest of record shall terminate. Notice of
cancellation shall be published in the Official Gazette.” [Emphasis
supplied.] Thus, we have previously held that the cancellation of registration
of a trademark has the effect of depriving the registrant of protection from
infringement from the moment judgment or order of cancellation has
become final.
Same; Judgments; Res Judicata; Facts and issues actually and directly
resolved in a former suit cannot again be raised in any future case between
the same parties, even if the latter suit may involve a different cause of
action.—Under the concept of res judicata by conclusiveness of judgment,
a final judgment or decree on the merits by a court of competent jurisdiction
is conclusive of the rights of the parties or their privies in all later suits on
points and matters determined in the former suit. Stated differently, facts
and issues actually and directly resolved in a former suit cannot again be
raised in any future case between the same parties, even if the latter suit may
involve a different cause of action. This second branch of the principle of
res judicata bars the re-litigation of particular facts or issues in another
litigation between the same parties on a different claim or cause of action.
Mercantile Law; Trademarks; Trademark Infringement; Elements that
must be proven to establish trademark infringement.—To establish
trademark infringement, the following elements must be proven: (1) the
validity of plaintiff’s mark; (2) the plaintiff’s ownership of the mark; and
(3) the use of the mark or its colorable imitation by the alleged infringer
results in “likelihood of confusion.”
Same; Same; Same; “ Unfair Competition,” Defined.—From
jurisprudence, unfair competition has been defined as the passing off (or
palming off) or attempting to pass off upon the public of the goods or
business of one person as the goods or business of another with the end and
probable effect of deceiving the public. The essential elements of unfair
competition are (1) confusing similarity in the general appearance of the
goods; and (2) intent to deceive the public and defraud a competitor.
533
VOL. 618, APRIL 20, 2010 533
Same; Same; Same; Same; There can be trademark infringement

without unfair competition.—In McDonald’s Corporation v. L.C. Big Mak
Burger, Inc., 437 SCRA 10 (2004), we held that there can be trademark
infringement without unfair competition such as when the infringer
discloses on the labels containing the mark that he manufactures the
goods, thus preventing the public from being deceived that the goods
originate from the trademark owner.
PETITION for review on certiorari of the decision and resolution of

the Court of Appeals.
The facts are stated in the opinion of the Court.
Arturo Z. Sioson for petitioner.
Sycip, Salazar, Hernandez & Gatmaitan for respondents.
BRION, J.:
We review in this petition for review on certiorari1 the (1)
decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 60777
that reversed the ruling of the Regional Trial Court of Quezon City,
Branch 85 (RTC),3 and dismissed the petitioner Superior
Commercial Enterprises, Inc.’s (SUPERIOR) complaint for
trademark infringement and unfair competition (with prayer for
preliminary injunction) against the respondents Kunnan Enterprises
Ltd. (KUNNAN) and Sports Concept and Distributor, Inc. (SPORTS
CONCEPT); and (2) the CA resolution4 that denied SUPERIOR’s
subsequent motion for reconsideration. The RTC decision that the
CA reversed
_______________
1 Under Rule 45 of the RULES OF COURT.

2 Dated June 22, 2005; penned by Associate Justice Japar B. Dimaampao and
concurred in by Associate Justice Renato C. Dacudao and Associate Justice Edgardo
F. Sundiam (both retired); Rollo, pp. 33-50.
3 CA Rollo, pp. 11-22.
4 Dated October 4, 2005; Rollo, pp. 51-52.
534

found the respondents liable for trademark infringement and unfair

competition, and ordered them to pay SUPERIOR P2,000,000.00 in
damages, P500,000.00 as attorney’s fees, and costs of the suit.
The F actual Antecedents
On February 23, 1993, SUPERIOR5 filed a complaint for

trademark infringement and unfair competition with preliminary
injunction against KUNNAN6 and SPORTS CONCEPT7 with the

RTC, docketed as Civil Case No. Q-93014888.
In support of its complaint, SUPERIOR first claimed to be the
owner of the trademarks, trading styles, company names and
business names8 “KENNEX”,9 “KENNEX & DEVICE”,10
_______________
5 SUPERIOR is a domestic corporation duly organized under Philippine laws; id.,

at p. 34.
6 KUNNAN is foreign corporation organized under the laws of Taiwan, Republic
of China, doing business in the Philippines; id.
7 SPORTS CONCEPT is a domestic corporation organized under Philippine laws;
id.
8 SUPERIOR claimed that it registered the business name “PRO-KENNEX
SPORTS PRODUCTS” with the Bureau of Domestic Trade on February 10, 1983
under Certificate of Registration No. 03767. It also claimed that it registered the
business name “PRO-KENNEX (PHIL) SPORTS PRODUCTS” with the Bureau of
Domestic Trade on February 10, 1983 under Certificate of Registration No. 03767,
which it renewed on April 4, 1988 with Certificate of Registration No. 14693 dated
April 4, 1988; id., at p. 35.
9 SUPERIOR alleged that it first used the mark “KENNEX” in the Philippines on
March 15, 1978 and registered the mark in its name under Supplemental Registration
No. 34478 dated May 31, 1985 to be used for the following goods, namely: “tennis
racket, pelota racket, pingpong racket, goal net, volleyball net and tennis shoulder
bags;” id., at p. 12.
10 SUPERIOR also claimed that it first used the mark “KENNEX & DEVICE OF
LETTER ‘K” INSIDE A CIRCLE OF THORNS” in the Philippines on March 15,
1978; the mark was registered in its name under Supplemental Registration No. 4730
dated May 23,
535
VOL. 618, APRIL 20, 2010 535

“PRO KENNEX”11 and “PRO-KENNEX” (disputed trademarks).12

Second, it also asserted its prior use of these trademarks, presenting
as evidence of ownership the Principal and Supplemental
Registrations of these trademarks in its name. Third, SUPERIOR
also alleged that it extensively sold and advertised sporting goods
and products covered by its trademark registrations. Finally,
SUPERIOR presented as evidence of its ownership of the disputed
trademarks the preambular clause of the Distributorship Agreement
dated October 1, 1982 (Distributorship Agreement) it executed with
KUNNAN, which states:
_______________
1980 to be used for the following goods: “tennis racket, pelota racket, pingpong,
squash racket, badminton racket, basketball, tennis ball, soccer ball, foot ball,
badminton shuttlecock, sports clothing, head ban, wrist band, basketball goal net,
tennis net, volleyball net, tennis shoulder bag, handbag and sport rubber shoes, tennis
string;” id.
11 SUPERIOR also alleged that the trademark “PROKENNEX” was first used in
the Philippines by KUNNAN on August 1, 1982 and was registered under the
former’s name as assignee under Principal Certificate of Registration No. 39254 dated
July 13, 1988 for the following goods: “handbags, travelling bags and trunks;” id., at
p. 13.
12 SUPERIOR also claimed that the trademark “PRO-KENNEX” was first used
by KUNNAN on January 2, 1980 and is registered under the former’s name as
assignee under Principal Certificate of Registration No. 40326 dated August 12, 1988
for the following goods: “tennis rackets, squash rackets, racketball rackets, badminton
rackets and fishing rods.” However, SUPERIOR claims that it first used the trademark
“PRO-KENNEX” with the word “ball design” and “tennis racket” on January 2, 1980
and is registered in its name under Certificate of Registration No. 41032 dated
September 2, 1988 for the following sporting goods: “tennis racket and accessories.”
The trademark “PRO-KENNEX” with the design ball and racket is claimed to be first
used by SUPERIOR on January 2, 1980 and is registered under Supplemental
Certificate of Registration No. 6663 dated November 2, 1984 for the following goods:
“sporting goods such as tennis racket and accessories”; id.
536

“Whereas, KUNNAN intends to acquire the ownership of KENNEX

trademark registered by the [sic] Superior in the Philippines. Whereas,
the [sic] Superior is desirous of having been appointed [sic] as the sole
distributor by KUNNAN in the territory of the Philippines.” [Emphasis
supplied.]13
In its defense, KUNNAN disputed SUPERIOR’s claim of ownership

and maintained that SUPERIOR—as mere distributor from October
6, 1982 until December 31, 1991—fraudulently registered the
trademarks in its name. KUNNAN alleged that it was incorporated
in 1972, under the name KENNEX Sports Corporation for the
purpose of manufacturing and selling sportswear and sports
equipment; it commercially marketed its products in different
countries, including the Philippines since 1972.14 It created and first
used “PRO KENNEX,” derived from its original corporate name, as
a distinctive trademark for its products in 1976. KUNNAN also
alleged that it registered the “PRO KENNEX” trademark not only in
the Philippines but also in 31 other countries, and widely promoted
the “KENNEX” and “PRO KENNEX” trademarks through
worldwide advertisements in print media and sponsorships of known

tennis players.
On October 1, 1982, after the expiration of its initial distributorship
agreement with another company,15 KUNNAN appointed
SUPERIOR as its exclusive distributor in the Philippines under a
Distributorship Agreement whose pertinent provisions state:16
_______________
13 Id., at p. 102.
14 KUNNAN alleged that it has manufactured products bearing the KENNEX and
PRO KENNEX trademarks and sold them in the Philippines, initially through the
importation by independent outlets and the subsequently through agreements with
local distributors; id., at pp. 90-91.
15 KUNNAN also alleged that its initial distributorship agreement was with
Bonmark Sportsmasters, Inc. from August 21, 1982 to January 3, 1983; id., at p. 91.
16 Id., at pp. 102-103.
537
VOL. 618, APRIL 20, 2010 537

“Whereas, KUNNAN intends to acquire ownership of KENNEX trademark

registered by the Superior in the Philippines. Whereas, the Superior is desirous of
having been appointed [sic] as the sole distributor by KUNNAN in the territory
of the Philippines.
Now, therefore, the parties hereto agree as follows:
1. KUNNAN in accordance with this Agreement, will appoint the sole
distributorship right to Superior in the Philippines, and this Agreement
could be renewed with the consent of both parties upon the time of
expiration.
2. The Superior, in accordance with this Agreement, shall assign the
ownership of KENNEX trademark, under the registration of Patent
Certificate No. 4730 dated 23 May 1980 to KUNNAN on the effects [sic]
of its ten (10) years contract of distributorship, and it is required that the
ownership of the said trademark shall be genuine, complete as a whole and
without any defects.
3. KUNNAN will guarantee to the Superior that no other third parties will be
permitted to supply the KENNEX PRODUCTS in the Philippines except
only to the Superior. If KUNNAN violates this stipulation, the transfer of the
KENNEX trademark shall be null and void.
4. If there is a necessity, the Superior will be appointed, for the protection of
interest of both parties, as the agent in the Philippines with full power to
exercise and granted the power of attorney, to pursue any case of Pirating,
Infringement and Counterfeiting the [sic] KENNEX trade mark in the
Philippine territory.
5. The Superior will be granted from [sic] KUNNAN’s approval before making
and selling any KENNEX products made in the Philippines and the other
countries, and if this is the situation, KUNNAN is entitled to have a royalty
of 5%-8% of FOB as the right.
6. Without KUNNAN’s permission, the Superior cannot procure other goods
supply under KENNEX brand of which are not available to supply [sic] by
KUNNAN. However, in connection with the sporting goods, it is
538

permitted that the Superior can procure them under KENNEX brand
of which are not available to be supplied by KUNNAN. [Emphasis
supplied.]
Even though this Agreement clearly stated that SUPERIOR was

obligated to assign the ownership of the KENNEX trademark to
KUNNAN, the latter claimed that the Certificate of Registration for
the KENNEX trademark remained with SUPERIOR because
Mariano Tan Bon Diong (Mr. Tan Bon Diong), SUPERIOR’s
President and General Manager, misled KUNNAN’s officers into
believing that KUNNAN was not qualified to hold the same due to
the “many requirements set by the Philippine Patent Office” that
KUNNAN could not meet.17 KUNNAN further asserted that
SUPERIOR deceived it into assigning its applications for
registration of the “PRO KENNEX” trademark in favor of
SUPERIOR, through an Assignment Agreement dated June 14, 1983
whose pertinent provisions state:18
1. In consideration of the distributorship relationship between KUNNAN and

Superior, KUNNAN, who is the seller in the distributorship relationship,
agrees to assign the following trademark applications owned by itself in
the Philippines to Superior who is the buyer in the distributorship
relationship.
Trademark Application Number Class
PROKENNEX 49999 28
PROKENNEX 49998 25
PROKENNEX 49997 18
2. Superior shall acknowledge that KUNNAN is still the real and truthful
owner of the abovementioned trademarks, and shall agree that it will
not use the right of the abovementioned trademarks to do anything
which is unfavourable or harmful to KUNNAN.
_______________
17 Id., at p. 92.
18 Id., at p. 94.
539
VOL. 618, APRIL 20, 2010 539

3. Superior agrees that it will return back the abovementioned trademarks

to KUNNAN without hesitation at the request of KUNNAN at any time.
KUNNAN agrees that the cost for the concerned assignment of the
abovementioned trademarks shall be compensated by KUNNAN.
4. Superior agrees that the abovementioned trademarks when requested by
KUNNAN shall be clean and without any incumbency.
5. Superior agrees that after the assignment of the abovementioned trademarks,
it shall have no right to reassign or license the said trademarks to any other
parties except KUNNAN.” [Emphasis supplied]
Prior to and during the pendency of the infringement and

unfair competition case before the RTC, KUNNAN filed with the
now defunct Bureau of Patents, Trademarks and Technology
Transfer19 separate Petitions for the Cancellation of Registration
Trademark Nos. 41032, SR 6663, 40326, 39254, 4730 and 49998,
docketed as Inter Partes Cases Nos. 3709, 3710, 3811, 3812, 3813
and 3814, as well as Opposition to Application Serial Nos. 84565
and 84566, docketed as Inter Partes Cases Nos. 4101 and 4102
(Consolidated Petitions for Cancellation) involving the KENNEX
and PRO KENNEX trademarks.20 In essence, KUNNAN filed the
Petition for Cancellation and Opposition on the ground that
SUPERIOR fraudulently registered and appropriated the disputed
trademarks; as mere distributor and not as lawful owner, it obtained
the registrations and assignments of the disputed trademarks in
violation
_______________
19 On January 1, 1998, Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, took effect which abolished among
other offices, the Bureau of Patents, Trademarks and Technology Transfer and
transferred its functions to the newly created Intellectual Property Office.
20 Id., at p. 36.
540

of the terms of the Distributorship Agreement and Sections 2-A and

17 of Republic Act No. 166, as amended.21
On December 3, 1991, upon the termination of its distributorship

agreement with SUPERIOR, KUNNAN appointed SPORTS
CONCEPT as its new distributor. Subsequently, KUNNAN also
caused the publication of a Notice and Warning in the Manila
Bulletin’s January 29, 1993 issue, stating that (1) it is the owner of
the disputed trademarks; (2) it terminated its Distributorship
Agreement with SUPERIOR; and (3) it appointed SPORTS
CONCEPT as its exclusive distributor. This notice prompted
SUPERIOR to file its Complaint for Infringement of Trademark and
Unfair Competition with Preliminary Injunction against
KUNNAN.22
The RTC Ruling
On March 31, 1998, the RTC issued its decision23 holding
KUNNAN liable for trademark infringement and unfair com-
_______________
21 Id., at p. 82.
22 Id., at pp. 36-37.
23 The dispositive portion of the decision reads:
WHEREFORE, it is hereby ordered that it appearing from the established facts
that great and irreparable damage and injury has resulted and will continue to result to
the Plaintiff, let a writ of preliminary injunction be issued enjoining the defendants
KUNNAN ENTERPRISES LIMITED, and SPORTS CONCEPT AND
DISTRIBUTOR INC., their officers, employees, agents, representatives, or assigns
and other persons acting for and in their behalf, from using, in connection with its
business the trademarks KENNEX, PRO-KENNEX AND KENNEX and DEVICE
OF LETTER “K” INSIDE A CIRCLE OF THORNS and the like and any other marks
and trade names which are identical or confusingly similar to plaintiff’s marks and
trade names.
a.) All infringing matter in the possession of defendants, its officers, employees,
agents, representatives, or as-
541
VOL. 618, APRIL 20, 2010 541

petition. The RTC also issued a writ of preliminary injunction

enjoining KUNNAN and SPORTS CONCEPT from using the
disputed trademarks.
The RTC found that SUPERIOR sufficiently proved that it was
the first user and owner of the disputed trademarks in the
Philippines, based on the findings of the Director of Patents in Inter
Partes Case No. 1709 and 1734 that SUPERIOR was “rightfully
entitled to register the mark ‘KENNEX’ as user and owner thereof.”
It also considered the “Whereas clause” of the Distributorship
Agreement, which categorically stated that “KUNNAN intends to
acquire ownership of [the] KENNEX trademark registered by

SUPERIOR in the Philippines.” According to the RTC, this clause
amounts to KUNNAN’s express recognition of SUPERIOR’s
ownership of the KENNEX trademarks.24
KUNNAN and SPORTS CONCEPT appealed the RTC’s
decision to the CA where the appeal was docketed as CA-G.R. CV
No. 60777. KUNNAN maintained that SUPERIOR was merely its
distributor and could not be the owner of the dis-
_______________
signs should be delivered to this Court or the plaintiff and be accordingly

destroyed;
b.) Defendants are hereby ordered to render an accounting of the sales from the
time it commenced using the marks and trade names of the plaintiff up to the time of
judgment, including the profits derived from said sales;
c.) Defendants are hereby ordered to pay plaintiff the amount of P2,000,000.00
which is the reasonable profit which plaintiff could have made, had not defendant
infringed the plaintiff’s trademarks;
d.) Defendants are likewise ordered to pay plaintiff’s attorney’s fees and
expenses of litigation in the amount of P500,000.00;
e.) Defendants should pay the cost of the suit.
SO ORDERED. Id., at p. 37.
24 CA Rollo, pp. 11-22.
542

puted trademarks. SUPERIOR, for its part, claimed ownership based

on its prior use and numerous valid registrations.
Intervening Developments:
The IPO and CA Rulings
In the course of its appeal to the CA, KUNNAN filed on
December 19, 2003 a Manifestation and Motion praying that the
decision of the Bureau of Legal Affairs (BLA) of the Intellectual
Property Office (IPO), dated October 30, 2003, in the
Consolidated Petitions for Cancellation be made of record and
be considered by the CA in resolving the case.25 The BLA ruled in
this decision—
“In the case at bar, Petitioner-Opposer (Kunnan) has overwhelmingly

and convincingly established its rights to the mark “PRO KENNEX”. It was
proven that actual use by Respondent-Registrant is not in the concept of an
owner but as a mere distributor (Exhibits “I”, “S” to “S-1”, “P” and “P-1”
and “Q” and “Q-2”) and as enunciated in the case of Crisanta Y. Gabriel vs.
Dr. Jose R. Perez, 50 SCRA 406, “a mere distributor of a product bearing a
trademark, even if permitted to use said trademark has no right to and

cannot register the said trademark.”
WHEREFORE, there being sufficient evidence to prove that the
Petitioner-Opposer (KUNNAN) is the prior user and owner of the trademark
“PRO-KENNEX”, the consolidated Petitions for Cancellation and the
Notices of Opposition are hereby GRANTED. Consequently, the trademark
“PRO-KENNEX” bearing Registration Nos. 41032, 40326, 39254, 4730,
49998 for the mark PRO-KENNEX issued in favor of Superior Commercial
Enterprises, Inc., herein Respondent-Registrant under the Principal Register
and SR No. 6663 are hereby CANCELLED. Accordingly, trademark
application Nos. 84565 and 84566, likewise for the registration of the mark
PRO-KENNEX are hereby REJECTED.
Let the file wrappers of PRO-KENNEX subject matter of these cases be
forwarded to the Administrative Finance and Human Resources
Development Services Bureau (AFHRDSB) for appropriate
_______________
25 Rollo, p. 39.
543
VOL. 618, APRIL 20, 2010 543

action in accordance with this Decision and a copy thereof be furnished the
Bureau of Trademarks (BOT) for information and update of its record.”26
On February 4, 2005, KUNNAN again filed another Mani-

festation requesting that the IPO Director General’s decision on
appeal dated December 8, 2004, denying SUPERIOR’s appeal,
be given weight in the disposition of the case.27 The dispositive
portion of the decision reads:28
“WHEREFORE, premises considered, there is no cogent reason to

disturb Decision No. 2003-35 dated 30 October 2003 rendered by the
Director of the Bureau of Legal Affairs. Accordingly, the instant appeal is
DENIED and the appealed decision is hereby AFFIRMED.”
We take judicial notice that SUPERIOR questioned the IPO

Director General’s ruling before the Court of Appeals on a petition
for review under Rule 43 of the Rules of Court, docketed as CA-
G.R. SP No. 87928 (Registration Cancellation Case). On August 30,
2007, the CA rendered its decision dismissing SUPERIOR’s
petition.29 On December 3, 2007, the CA decision was declared
final and executory and entry of judgment was accordingly made.
Hence, SUPERIOR’s registration of the disputed trademarks
now stands effectively cancelled.
_______________
26 Id., at p. 93. While the dispositive portion of the BLA Decision dated October
30, 2003 referred only to the PRO-KENNEX trademark, Certificate of Registration
No. 4730 which covers the KENNEX trademarks was cancelled in the same Decision.
This oversight was remedied in the Director General’s Decision dated December 8,
2004 which noted that the “registrations and the applications cover the mark PRO-
KENNEX except Registration No. 4730 which refers to the mark KENNEX;” id., at
pp. 53-54.
27 Supra note 23.
28 Id., at p. 67.
29 Decision penned by Guevara-Salonga, J., with Roxas and Garcia, JJ.,
concurring.
544

The CA Ruling
On June 22, 2005, the CA issued its decision in CA-G.R. CV No.
60777, reversing and setting aside the RTC’s decision of March 31,
1998.30 It dismissed SUPERIOR’s Complaint for Infringement of
Trademark and Unfair Competition with Preliminary Injunction on
the ground that SUPERIOR failed to establish by preponderance of
evidence its claim of ownership over the KENNEX and PRO
KENNEX trademarks. The CA found the Certificates of Principal
and Supplemental Registrations and the “whereas clause” of the
Distributorship Agreement insufficient to support SUPERIOR’s
claim of ownership over the disputed trademarks.
The CA stressed that SUPERIOR’s possession of the
aforementioned Certificates of Principal Registration does not
conclusively establish its ownership of the disputed trademarks as
dominion over trademarks is not acquired by the fact of registration
alone;31 at best, registration merely raises a presumption of
ownership that can be rebutted by contrary evidence.32 The CA
further emphasized that the Certificates of Supplemental
Registration issued in SUPERIOR’s name do not even enjoy the
presumption of ownership accorded to registration in the principal
register; it does not amount to a prima facie evidence of the validity
of registration or of the
_______________
30 The dispositive portion of which states:

WHEREFORE, the Appeal is GRANTED. The Decision dated 31 March 1998 of
the Regional Trial Court of Quezon City, Branch 85 is hereby REVERSED and SET
ASIDE. The Complaint for Infringement of Trademark and Unfair Competition with
Preliminary Injunction, docketed as Civil Case No. Q-93-14888, is DISMISSED.
SO ORDERED. Rollo, p. 49.
31 Citing Phillip Morris v. Court of Appeals, G.R. No. 91332, July 16, 1993, 224
SCRA 576, 596.
32 Citing Emerald Garment Manufacturing Corp. v. Court of Appeals, G.R. No.
100098, December 29, 1995, 251 SCRA 600, 622-623.
545
VOL. 618, APRIL 20, 2010 545

registrant’s exclusive right to use the trademarks in connection with

the goods, business, or services specified in the certificate.33
In contrast with the failure of SUPERIOR’s evidence, the CA
found that KUNNAN presented sufficient evidence to rebut
SUPERIOR’s presumption of ownership over the trademarks.
KUNNAN established that SUPERIOR, far from being the rightful
owner of the disputed trademarks, was merely KUNNAN’s
exclusive distributor. This conclusion was based on three pieces of
evidence that, to the CA, clearly established that SUPERIOR had no
proprietary interest over the disputed trademarks.
First, the CA found that the Distributorship Agreement,
considered in its entirety, positively confirmed that SUPERIOR
sought to be the KUNNAN’s exclusive distributor. The CA based
this conclusion on the following provisions of the Distributorship
Agreement:
(1) that SUPERIOR was “desirous of [being] appointed as the sole

distributor by KUNNAN in the territory of the Philippines;”
(2) that “KUNNAN will appoint the sole distributorship right to
Superior in the Philippines;” and
(3) that “no third parties will be permitted to supply KENNEX
PRODUCTS in the Philippines except only to Superior.”
The CA thus emphasized that the RTC erred in unduly relying on

the first whereas clause, which states that “KUNNAN intends to
acquire ownership of [the] KENNEX trademark registered by
SUPERIOR in the Philippines” without considering the entirety of
the Distributorship Agreement indicating that SUPERIOR had been
merely appointed by KUNNAN as its distributor.
_______________
33 Citing La Chemise Lacoste, S.A. v. Fernandez, G.R. Nos. L-63796-97 and L-

65659, May 21, 1984, 129 SCRA 373, 392.
546
Second, the CA also noted that SUPERIOR made the express

undertaking in the Assignment Agreement to “acknowledge that
KUNNAN is still the real and truthful owner of the [PRO KENNEX]
trademarks,” and that it “shall agree that it will not use the right of
the abovementioned trademarks to do anything which is
unfavourable or harmful to KUNNAN.” To the CA, these provisions
are clearly inconsistent with SUPERIOR’s claim of ownership of the
disputed trademarks. The CA also observed that although the
Assignment Agreement was a private document, its authenticity and
due execution was proven by the similarity of Mr. Tan Bon Diong’s
signature in the Distributorship Agreement and the Assignment
Agreement.
Third, the CA also took note of SUPERIOR’s Letter dated
November 12, 1986 addressed to Brig. Gen. Jose Almonte,
identifying itself as the “sole and exclusive licensee and distributor
in the Philippines of all its KENNEX and PRO-KENNEX products.”
Attached to the letter was an agreement with KUNNAN, identifying
the latter as the “foreign manufacturer of all KENNEX products.”
The CA concluded that in this letter, SUPERIOR acknowledged its
status as a distributor in its dealings with KUNNAN, and even in its
transactions with third persons.
Based on these reasons, the CA ruled that SUPERIOR was a
mere distributor and had no right to the registration of the disputed
trademarks since the right to register a trademark is based on
ownership. Citing Section 4 of Republic Act No. 16634 and
established jurisprudence,35 the CA held that SUPERIOR
_______________
34 The provision states:

x x x The owner of a trademark, a trade-name or service mark used to distinguish
his goods, business or services from the goods, business or services of other shall
have the right to register the same. x x x
35 See Marvex Commercial Co. Inc. v. Petra Hawpia & Milling Co., G.R. No. L-
19297, December 22, 1966, 18 SCRA 1178, 1180; Unno Commercial Enterprises,
Inc. v. General Milling Corporation,
547
VOL. 618, APRIL 20, 2010 547

– as an exclusive distributor—did not acquire any proprietary

interest in the principal’s (KUNNAN’s) trademark.
The CA denied SUPERIOR’s motion for reconsideration for lack
of merit in its Resolution dated October 4, 2005.
The Petition
In the present petition, SUPERIOR raises the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING
THAT PETITIONER SUPERIOR IS NOT THE TRUE AND RIGHTFUL
OWNER OF THE TRADEMARKS “KENNEX” AND “PRO-KENNEX”
IN THE PHILIPPINES
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED
IN HOLDING THAT PETITIONER SUPERIOR IS A MERE
DISTRIBUTOR OF RESPONDENT KUNNAN IN THE PHILIPPINES
III.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED
IN REVERSING AND SETTING ASIDE THE DECISION OF THE
REGIONAL TRIAL COURT OF QUEZON CITY IN CIVIL CASE NO. Q-
93-14888, LIFTING THE PRELIMINARY INJUNCTION ISSUED
AGAINST RESPONDENTS KUNNAN AND SPORTS CONCEPT AND
DISMISSING THE COMPLAINT FOR INFRINGEMENT OF
TRADEMARK AND UNFAIR COMPETITION WITH PRELIMINARY
INJUNCTION
The Court’s Ruling
We do not find the petition meritorious.
_______________
G.R. No. L-28554, Ferbuary 28, 1983, 120 SCRA 804, 808-809; Gabriel v. Perez,
G.R. No. L-24075, January 31, 1974, 55 SCRA 406.
548

On the Issue of Trademark Infringement

We first consider the effect of the final and executory decision in
the Registration Cancellation Case on the present case. This decision
—rendered after the CA decision for trademark infringement and
unfair competition in CA-G.R. CV No. 60777 (root of the present
case) - states:
“As to whether respondent Kunnan was able to overcome the

presumption of ownership in favor of Superior, the former sufficiently
established the fraudulent registration of the questioned trademarks by
Superior. The Certificates of Registration No. SR-4730 (Supplemental
Register) and 33487 (Principal Register) for the KENNEX trademark were
fraudulently obtained by petitioner Superior. Even before PROKENNEX

products were imported by Superior into the Philippines, the same already
enjoyed popularity in various countries and had been distributed worldwide,
particularly among the sports and tennis enthusiasts since 1976. Riding on
the said popularity, Superior caused the registration thereof in the
Philippines under its name when it knew fully well that it did not own nor
did it manufacture the PROKENNEX products. Superior claimed ownership
of the subject marks and failed to disclose in its application with the IPO
that it was merely a distributor of KENNEX and PROKENNEX products in
the Philippines.
While Superior accepted the obligation to assign Certificates of
Registration Nos. SR-4730 and 33487 to Kunnan in exchange for the
appointment by the latter as its exclusive distributor, Superior however
breached its obligation and failed to assign the same to Kunnan. In a letter
dated 13 February 1987, Superior, through Mr. Tan Bon Diong,
misrepresented to Kunnan that the latter cannot own trademarks in the
Philippines. Thus, Kunnan was misled into assigning to Superior its
(Kunnan’s) own application for the disputed trademarks. In the same
assignment document, however. Superior was bound to ensure that the
PROKENNEX trademarks under Registration Nos. 40326, 39254, and
49998 shall be returned to Kunnan clean and without any incumbency when
requested by the latter.
In fine, We see no error in the decision of the Director General of the
IPO which affirmed the decision of the Director of the Bureau of Legal
Affairs canceling the registration of the questioned marks in
549
VOL. 618, APRIL 20, 2010 549

the name of petitioner Superior and denying its new application for
registration, upon a finding that Superior is not the rightful owner of the
subject marks.
WHEREFORE, the foregoing considered, the petition is DISMISSED.”
The CA decided that the registration of the “KENNEX” and

“PRO KENNEX” trademarks should be cancelled because
SUPERIOR was not the owner of, and could not in the first
place have validly registered these trademarks. Thus, as of the
finality of the CA decision on December 3, 2007, these trademark
registrations were effectively cancelled and SUPERIOR was no
longer the registrant of the disputed trademarks.
Section 22 of Republic Act No. 166, as amended (“RA 166”),36
the law applicable to this case, defines trademark infringement as
follows:
“Section 22. Infringement, what constitutes.—Any person who [1] shall

use, without the consent of the registrant, any reproduction, counterfeit,
copy or colorable imitation of any registered mark or tradename in

connection with the sale, offering for sale, or advertising of any goods,
business or services on or in connection with which such use is likely to
cause confusion or mistake or to deceive purchasers or others as to the
source or origin of such goods or services, or identity of such business; or
[2] reproduce, counterfeit, copy, or colorably imitate any such mark or
tradename and apply such reproduction, counterfeit, copy, or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods,
business or services, shall be liable to a civil action by the registrant for any
or all of the remedies herein provided.” [Emphasis supplied]
_______________
36 An Act To Provide For the Registration and Protection of Trademarks, Trade-
Names, and Service-Marks, Defining Unfair Competition and False Marking And
Providing Remedies Against The Same, And For Other Purposes.
550

Essentially, Section 22 of RA 166 states that only a registrant of a

mark can file a case for infringement. Corollary to this, Section 19 of
RA 166 provides that any right conferred upon the registrant under
the provisions of RA 16637 terminates when the judgment or order
of cancellation has become final, viz:
“Section 19. Cancellation of registration.—If the Director finds that a

case for cancellation has been made out he shall order the cancellation of the
registration. The order shall not become effective until the period for appeal
has elapsed, or if appeal is taken, until the judgment on appeal becomes
final. When the order or judgment becomes final, any right conferred
by such registration upon the registrant or any person in interest of
record shall terminate. Notice of cancellation shall be published in the
Official Gazette.” [Emphasis supplied.]
Thus, we have previously held that the cancellation of

registration of a trademark has the effect of depriving the registrant
of protection from infringement from the moment judgment or order
of cancellation has become final.38
In the present case, by operation of law, specifically Section 19 of
RA 166, the trademark infringement aspect of SUPERIOR’s case
has been rendered moot and academic in view of the finality of the
decision in the Registration Cancellation Case. In short, SUPERIOR
is left without any cause of action for trademark infringement since
the cancellation of registra-
_______________
37 Section 20 of RA 166 considers the trademark registration certificate as

prima facie evidence of the validity of the registration, the registrant’s ownership
and exclusive right to use the trademark in connection with the goods, business or
services as classified by the Director of Patents and as specified in the certificate,
subject to the conditions and limitations stated therein. See Mighty Corporation v. E.
& J. Gallo Winery, G.R. No. 154342, July 14, 2004, 434 SCRA 473, 495.
38 See Heirs of Crisanta Y. Gabriel-Almoradie v. Court of Appeals, G.R. No.
91385, January 4, 1994, 229 SCRA 15, 32-33.
551
VOL. 618, APRIL 20, 2010 551

tion of a trademark deprived it of protection from infringement from

the moment judgment or order of cancellation became final. To be
sure, in a trademark infringement, title to the trademark is
indispensable to a valid cause of action and such title is shown by its
certificate of registration.39 With its certificates of registration over
the disputed trademarks effectively cancelled with finality,
SUPERIOR’s case for trademark infringement lost its legal basis
and no longer presented a valid cause of action.
Even assuming that SUPERIOR’s case for trademark
infringement had not been rendered moot and academic, there can be
no infringement committed by KUNNAN who was adjudged with
finality to be the rightful owner of the disputed trademarks in the
Registration Cancellation Case. Even prior to the cancellation of the
registration of the disputed trademarks, SUPERIOR—as a mere
distributor and not the owner—cannot assert any protection from
trademark infringement as it had no right in the first place to the
registration of the disputed trademarks. In fact, jurisprudence holds
that in the absence of any inequitable conduct on the part of the
manufacturer, an exclusive distributor who employs the trademark
of the manufacturer does not acquire proprietary rights of the
manufacturer, and a registration of the trademark by the
distributor as such belongs to the manufacturer, provided the
fiduciary relationship does not terminate before application for
registration is filed.40 Thus, the CA in the Registration Cancellation
Case correctly held:
“As a mere distributor, petitioner Superior undoubtedly had no right to

register the questioned mark in its name. Well-entrenched in our jurisdiction
is the rule that the right to register a trademark should be based on
ownership. When the applicant is not the owner
_______________
39 Western Equipment & Supply Co. v. Reyes, 51 Phil. 115 (1927).

40 Gabriel v. Perez, G.R. No. L-24075, January 31, 1974, 55 SCRA 406.
552

of the trademark being applied for, he has no right to apply for the
registration of the same. Under the Trademark Law, only the owner of the
trademark, trade name or service mark used to distinguish his goods,
business or service from the goods, business or service of others is entitled
to register the same. An exclusive distributor does not acquire any
proprietary interest in the principal’s trademark and cannot register it in his
own name unless it is has been validly assigned to him.”
In addition, we also note that the doctrine of res judicata bars

SUPERIOR’s present case for trademark infringement. The doctrine
of res judicata embraces two (2) concepts: the first is “bar by prior
judgment” under paragraph (b) of Rule 39, Section 47, and the
second is “conclusiveness of judgment” under paragraph (c) thereof.
In the present case, the second concept—conclusiveness of
judgment—applies. Under the concept of res judicata by
conclusiveness of judgment, a final judgment or decree on the
merits by a court of competent jurisdiction is conclusive of the rights
of the parties or their privies in all later suits on points and matters
determined in the former suit.41 Stated differently, facts and issues
actually and directly resolved in a former suit cannot again be raised
in any future case between the same parties, even if the latter suit
may involve a different cause of action.42 This second branch of the
_______________
41 RULES OF COURT, Section 47(c), Rule 39—Effect of judgments or final orders.—

The effect of a judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows:
xxxx
(c) In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment or
final order which appears upon its face to have been so adjudged, or which
was actually and necessarily included therein or necessary thereto.
See also Gutierrez v. Court of Appeals, 193 SCRA 437 (1991).
42 Tan v. Court of Appeals, G.R. No. 142401, August 20, 2001, 363 SCRA 444.
553
VOL. 618, APRIL 20, 2010 553

principle of res judicata bars the re-litigation of particular facts or

issues in another litigation between the same parties on a different
claim or cause of action.43
Because the Registration Cancellation Case and the present case
involve the same parties, litigating with respect to and disputing the
same trademarks, we are bound to examine how one case would
affect the other. In the present case, even if the causes of action of
the Registration Cancellation Case (the cancellation of trademark
registration) differs from that of the present case (the improper or
unauthorized use of trademarks), the final judgment in the
Registration Cancellation Case is nevertheless conclusive on the
particular facts and issues that are determinative of the present case.
To establish trademark infringement, the following elements
must be proven: (1) the validity of plaintiff’s mark; (2) the
plaintiff’s ownership of the mark; and (3) the use of the mark or
its colorable imitation by the alleged infringer results in “likelihood
of confusion.”44
Based on these elements, we find it immediately obvious that the
second element—the plaintiff’s ownership of the mark—was what
the Registration Cancellation Case decided with finality. On this
element depended the validity of the registrations that, on their own,
only gave rise to the presumption of, but was not conclusive on, the
issue of ownership.45
In no uncertain terms, the appellate court in the Registration
Cancellation Case ruled that SUPERIOR was a mere distributor
and could not have been the owner, and was thus an invalid
registrant of the disputed trademarks. Significantly, these are the
exact terms of the
_______________
43 Mata v. Court of Appeals, 376 Phil. 525; 318 SCRA 416 (1999).
44 McDonald’s Corporation v. L.C. Big Mak Burger, Inc., G. R. No. 143993,
August 18, 2004, 437 SCRA 10.
45 Supra note 31.
554

ruling the CA arrived at in the present petition now under our

review. Thus, whether with one or the other, the ruling on the issue
of ownership of the trademarks is the same. Given, however, the
final and executory ruling in the Registration Cancellation Case on
the issue of ownership that binds us and the parties, any further
discussion and review of the issue of ownership—although the
current CA ruling is legally correct and can stand on its own merits
—becomes a pointless academic discussion.
On the Issue of Unfair Competition
Our review of the records shows that the neither the RTC nor the
CA made any factual findings with respect to the issue of unfair
competition. In its Complaint, SUPERIOR alleged that:46
“17. In January 1993, the plaintiff learned that the defendant Kunnan
Enterprises, Ltd., is intending to appoint the defendant Sports Concept and
Distributors, Inc. as its alleged distributor for sportswear and sporting goods
bearing the trademark “PRO-KENNEX.” For this reason, on January 20,
1993, the plaintiff, through counsel, wrote the defendant Sports Concept and
Distributor’s Inc. advising said defendant that the trademark “PRO-
KENNEX” was registered and owned by the plaintiff herein.
18. The above information was affirmed by an announcement made by
the defendants in The Manila Bulletin issue of January 29, 1993, informing
the public that defendant Kunnan Enterprises, Ltd. has appointed the
defendant Sports Concept and Distributors, Inc. as its alleged distributor of
sportswear and sporting goods and equipment bearing the trademarks
“KENNEX and “PRO-KENNEX” which trademarks are owned by and
registered in the name of plaintiff herein as alleged hereinabove.
xxxx
27. The acts of defendants, as previously complained herein, were
designed to and are of the nature so as to create confusion with
_______________
46 Original Records, pp. 5-8.
555
VOL. 618, APRIL 20, 2010 555

the commercial activities of plaintiff in the Philippines and is liable to

mislead the public as to the nature and suitability for their purposes of
plaintiff’s business and the defendant’s acts are likely to discredit the
commercial activities and future growth of plaintiff’s business.”
From jurisprudence, unfair competition has been defined as the

passing off (or palming off) or attempting to pass off upon the public
of the goods or business of one person as the goods or business of
another with the end and probable effect of deceiving the public.
The essential elements of unfair competition47 are (1) confusing
similarity in the general appear-
_______________
47 Under Section 29 of RA 166, any person who employs deception or any other
means contrary to good faith by which he passes off the goods manufactured by him
or in which he deals, or his business, or services for those of the one having
established such goodwill, or who commits any acts calculated to produce said result,
is guilty of unfair competition. Unfair competition include the following acts:
a) Any person, who in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either as to the
goods themselves or in the wrapping of the packages in which they are
contained, or the devices or words thereon, or in any feature of their
appearance, which would be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer, other than the actual
manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another of his legitimate
trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other
means calculated to induce the false belief that such person is offering the
services of another who has identified such services in the mind of the public;
or
(c) Any person who shall make any false statement in the course of trade
or who shall commit any other act contrary to good faith of a nature
calculated to discredit the goods, business or services of another. [Emphasis
supplied.]
556

ance of the goods; and (2) intent to deceive the public and
defraud a competitor.48
Jurisprudence also formulated the following “true test” of unfair
competition: whether the acts of the defendant have the intent of
deceiving or are calculated to deceive the ordinary buyer making his
purchases under the ordinary conditions of the particular trade to
which the controversy relates. One of the essential requisites in an
action to restrain unfair competition is proof of fraud; the intent to
deceive, actual or probable must be shown before the right to
recover can exist.49
In the present case, no evidence exists showing that KUNNAN
ever attempted to pass off the goods it sold (i.e. sportswear, sporting
goods and equipment) as those of SUPERIOR. In addition, there is
no evidence of bad faith or fraud imputable to KUNNAN in using
the disputed trademarks. Specifically, SUPERIOR failed to adduce
any evidence to show that KUNNAN by the above-cited acts
intended to deceive the public as to the identity of the goods sold or
of the manufacturer of the goods sold. In McDonald’s Corporation v.
L.C. Big Mak Burger, Inc.,50 we held that there can be trademark
infringement without unfair competition such as when the
infringer discloses on the labels containing the mark that he
manufactures the goods, thus preventing the public from being

deceived that the goods originate from the trademark owner. In
this case, no issue of confusion arises because the same
manufactured products are sold; only the ownership of the
trademarks is at issue. Furthermore, KUNNAN’s January 29, 1993
notice by its terms prevents the public from being deceived that the
goods originated from SUPERIOR since the notice clearly indicated
that KUNNAN is the manufacturer of the goods bearing the
_______________
48 Supra note 42.

49 Coca-Cola Bottlers, Inc.v. Quintin J. Gomez, G.R. No. 154491, November 14,
2008, 571 SCRA 18.
50 G.R. No. 143993, August 18, 2004, 437 SCRA 10.
557
VOL. 618, APRIL 20, 2010 557

trademarks “KENNEX” and “PRO KENNEX.” This notice states in

full:51
NOTICE AND WARNING

Kunnan Enterprises Ltd. is the owner and first user of the internationally-
renowned trademarks KENNEX and PRO KENNEX for sportswear and
sporting goods and equipment. Kunnan Enterprises Ltd. has registered the
trademarks KENNEX and PRO KENNEX in the industrial property offices
of at least 31 countries worldwide where KUNNAN Enterprises Ltd. has
been selling its sportswear and sporting goods and equipment bearing the
KENNEX and PRO KENNEX trademarks.
Kunnan Enterprises Ltd. further informs the public that it had terminated
its Distributorship Agreement with Superior Commercial Enterprises, Inc.
on December 31, 1991. As a result, Superior Commercial Enterprises,
Inc. is no longer authorized to sell sportswear and sporting goods and
equipment manufactured by Kunnan Enterprises Ltd. and bearing the
trademarks KENNEX and PRO KENNEX.
xxxx
In its place, KUNNAN has appointed SPORTS CONCEPT AND
DISTRIBUTORS, INC. as its exclusive Philippine distributor of sportswear
and sporting goods and equipment bearing the trademarks KENNEX and
PRO KENNEX. The public is advised to buy sporting goods and
equipment bearing these trademarks only from SPORTS CONCEPT
AND DISTRIBUTORS, INC. to ensure that the products they are
buying are manufactured by Kunnan Enterprises Ltd. [Emphasis
supplied.]
Finally, with the established ruling that KUNNAN is the rightful

owner of the trademarks of the goods that SUPERIOR asserts are
being unfairly sold by KUNNAN under trademarks registered in
SUPERIOR’s name, the latter is left with no effective right to make
a claim. In other words, with the CA’s final ruling in the Registration
Cancellation Case, SUPERIOR’s case no longer presents a valid
cause of action.
_______________
51 Original Records, p. 14.
558

For this reason, the unfair competition aspect of the SUPERIOR’s

case likewise falls.
WHEREFORE, premises considered, we DENY Superior
Commercial Enterprises, Inc.’s petition for review on certiorari for
lack of merit. Cost against petitioner Superior Commercial
Enterprises, Inc.
SO ORDERED.
Carpio (Chairperson), Del Castillo, Abad and Perez, JJ.,

concur.
Petition denied.
Notes.—Where a party raised, among others, the affirmative

defense that he had the right to revoke the Authority to Use
Trademark because the grantee manufactured other products aside
from what was agreed upon, said party is deemed to have seasonably
raised such defense. (Samson vs. Court of Appeals, 549 SCRA 412
[2008])
An applicant’s declaration in his Comment and Memorandum
before the Supreme Court that he has not filed the Declaration of
Actual Use (DAU) as mandated by pertinent provisions of R.A. No.
8293 is a judicial admission that he has effectively abandoned or
withdrawn any right or interest in his trademark. (Mattel, Inc. vs.
Francisco, 560 SCRA 504 [2008])
Petitioner’s complaint, which seeks the cancellation of the
disputed mark in the name of respondent Sehwani, Incorporated, and
damages for violation of petitioner’s intellectual property rights,
falls within the jurisdiction of the Intellectual Property Office (IPO)
Director of Legal Affairs. (In-N-Out Burger, Inc. vs. Sehwani,
Incorporated, 575 SCRA 535 [2008])
——o0o——
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10/31/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 618

G.R. No. 169974. April 20, 2010.*

SUPERIOR COMMERCIAL ENTERPRISES, INC., petitioner, vs.

Mercantile Law; Trademarks; “ Trademark Infringement,” Deﬁned.—

532 SUPREME COURT REPORTS ANNOTATED

Superior Commercial Enterprises, Inc. vs. Kunnan Enterprises Ltd.

the judgment on appeal becomes ﬁnal. When the order or judgment

VOL. 618, APRIL 20, 2010 533

Superior Commercial Enterprises, Inc. vs. Kunnan Enterprises Ltd.

Same; Same; Same; Same; There can be trademark infringement

PETITION for review on certiorari of the decision and resolution of

1 Under Rule 45 of the RULES OF COURT.

534 SUPREME COURT REPORTS ANNOTATED

found the respondents liable for trademark infringement and unfair

The F actual Antecedents

On February 23, 1993, SUPERIOR5 ﬁled a complaint for

injunction against KUNNAN6 and SPORTS CONCEPT7 with the

5 SUPERIOR is a domestic corporation duly organized under Philippine laws; id.,

VOL. 618, APRIL 20, 2010 535

“PRO KENNEX”11 and “PRO-KENNEX” (disputed trademarks).12

536 SUPREME COURT REPORTS ANNOTATED

“Whereas, KUNNAN intends to acquire the ownership of KENNEX

In its defense, KUNNAN disputed SUPERIOR’s claim of ownership

worldwide advertisements in print media and sponsorships of known

VOL. 618, APRIL 20, 2010 537

“Whereas, KUNNAN intends to acquire ownership of KENNEX trademark

538 SUPREME COURT REPORTS ANNOTATED

Even though this Agreement clearly stated that SUPERIOR was

1. In consideration of the distributorship relationship between KUNNAN and

VOL. 618, APRIL 20, 2010 539

3. Superior agrees that it will return back the abovementioned trademarks

Prior to and during the pendency of the infringement and

540 SUPREME COURT REPORTS ANNOTATED

of the terms of the Distributorship Agreement and Sections 2-A and

On December 3, 1991, upon the termination of its distributorship

VOL. 618, APRIL 20, 2010 541

petition. The RTC also issued a writ of preliminary injunction

acquire ownership of [the] KENNEX trademark registered by

signs should be delivered to this Court or the plaintiff and be accordingly

542 SUPREME COURT REPORTS ANNOTATED

puted trademarks. SUPERIOR, for its part, claimed ownership based

“In the case at bar, Petitioner-Opposer (Kunnan) has overwhelmingly

trademark, even if permitted to use said trademark has no right to and

VOL. 618, APRIL 20, 2010 543

On February 4, 2005, KUNNAN again ﬁled another Mani-

“WHEREFORE, premises considered, there is no cogent reason to

We take judicial notice that SUPERIOR questioned the IPO

544 SUPREME COURT REPORTS ANNOTATED

30 The dispositive portion of which states:

VOL. 618, APRIL 20, 2010 545

registrant’s exclusive right to use the trademarks in connection with

(1) that SUPERIOR was “desirous of [being] appointed as the sole

The CA thus emphasized that the RTC erred in unduly relying on

33 Citing La Chemise Lacoste, S.A. v. Fernandez, G.R. Nos. L-63796-97 and L-

546 SUPREME COURT REPORTS ANNOTATED

Superior Commercial Enterprises, Inc. vs. Kunnan Enterprises Ltd.

Second, the CA also noted that SUPERIOR made the express

34 The provision states:

VOL. 618, APRIL 20, 2010 547