[ G.R. No.

228165, February 09, 2021 ]

KOLIN ELECTRONICS CO., INC., PETITIONER, VS. KOLIN PHILIPPINES
INTERNATIONAL, INC., RESPONDENT.

FACTS:

The KECI Ownership Case

In 1993, Kolin Electronics Industrial Supply (KEIS) owned by Miguel Tan filed an
application for Trademark registration for KOLIN, covering products under Class 9:
automatic voltage regulator, converter, recharger, stereo booster, AC-DC
regulated power supply, step-down transformer and PA amplifier AC-DC.
In 1995, Tan assigned in favor of Kolin Electronics Co., Inc. (KECI) all the assets and
merchandise stocks of KEIS, including its pending application for registration of
the KOLIN mark.
In 1996, Taiwan Kolin Co., Ltd. (TKC) filed an application for Trademark
registration for KOLIN initially covering color television, refrigerator, window-type
air conditioner, split-type air conditioner, electric fan, and water dispenser.
TKC filed a verified Notice of Opposition in 1998 against KECI’s trademark
application claiming that it was the owner of Taiwan registrations for KOLIN and
KOLIN SOLID series and that it has a pending application for KOLIN. It would cause
TKC grave and irreparable damage to its business reputation and goodwill
because KOLIN is identical, if not confusingly similar, to TKC’s marks. If granted,
the application would likely mislead the public as to the nature, quality, and
characteristics of its goods or products.
Ruling of the IPO-BLA (Intellectual Property Office Bureau of Legal Affairs)
Denied TKC’s opposition and gave due course to KECI’s trademark application
for KOLIN. It ruled that KECI proved its earlier adoption and use of KOLIN in 1989
which is ahead of TKC’s use in the Philippines in 1996.
Ruling of the IPO DG (Intellectual Property Office Director General)
Sustained the ruling of IPO-BLA. TKC appealed the decision, but was affirmed by
the IPO-DG. The IPO eventually issued a Certificate of Registration for KOLIN in
favor of KECI.
Ruling of the Court of Appeals
DISMISSED TKC’s petition for lack of merit and affirmed the IPO-DG’s decision.
The Trademark Law was applicable since it was still in effect at the time of the
filing and during the pendency of the trademark applications of both parties.
There must be actual use thereof in commerce to acquire ownership of a
mark. The CA found that KEIS, the predecessor-in-interest of KECI, had been using
the KOLIN mark in the Philippines since 1989, prior to the filing of the trademark
application for KOLIN in 1993. While TKC claimed prior use of the mark in foreign
jurisdictions as early as 1986, the CA agreed with the IPO-BLA and IPO-DG that the
concept of actual use under the Trademark Law refers to use in the Philippines,
and not abroad.

The Taiwan Kolin Case

To recall, the TKC filed an application for Trademark registration for KOLIN in 1996
initially covering color television, refrigerator, window-type air conditioner, split-
type air conditioner, electric fan, and water dispenser. In 1999, the trademark
examiner-in-charge stated in Paper No. 5 that the goods enumerated fall under
Classes 9, 11, and 21 of the Nice Classification (NCL), thus, TKC was required to
elect one class of goods for its application for KOLIN. However, the application
was considered abandoned.
TKC filed a petition to revive the application and elected Class 9 for its application.
Further, TKC requested the inclusion of goods, namely cassette recorder, VCD,
whoofer, amplifiers, camcorders and other audio/video electronic equipment, flat
iron, vacuum cleaners, cordless handsets, videophones, facsimile machines,
teleprinters, cellular phones, automatic goods vending machines and other
electronic equipment belonging to class 9. In 2001, the Bureau of Trademarks
granted TKC’s petition. Consequently, it was published in the IPO Electronic
Gazette for Trademarks. However, television sets was not included in the
enumeration of goods published.
KECI filed an opposition in 2006 against TKC’s application stating that it is the
registered owner of the KOLIN mark, which it claimed was confusingly similar to
TKC’s application for KOLIN.
TKC claimed that its Trademark Application includes television sets and that this
trademark application later became Trademark Application filed in 2002 when it
was re-filed/revived after the delayed submissions caused by the former handling
lawyer.
Ruling of the IPO-BLA (Intellectual Property Office Bureau of Legal Affairs)
SUSTAINED KECI’s opposition and rejected TKC’s application for KOLIN.
Ruling of the IPO DG (Intellectual Property Office Director General)
GRANTED TKC’s appeal allowing the registration of TKC’s mark with limitation for
the goods television and DVD player.
TKC filed an Appeal Memorandum with the IPO DG, claiming that the IPO-BLA
erred in denying its application without any allowance for use limitation or
restriction on televisions and DVD players. Noting that TKC only wanted
its KOLIN application to be given due course subject to the use limitation or
restriction for television and DVD player.
Ruling of the Court of Appeals
REVERSED and SET ASIDE IPO-DG’s decision and REINSTATED IPO-BLA decision.
It ruled in favor of KECI based on the following grounds:
(a) The KOLIN mark sought to be registered by TKC is confusingly similar to
KECI’s KOLIN registration since the only difference is KECI’S mark is italicized and
colored black while that of TKC is in pantone red color;
(b) There are no other designs, special shape or easily identifiable earmarks that
would differentiate the products of both competing companies;
(c) The intertwined use of television sets with amplifier, booster and voltage
regulator bolstered the fact that televisions can be considered as within the
normal expansion of KECI, and is thereby deemed covered by its trademark as
explicitly protected under Section 138 of the IP Code; and
(d) The denial of TKC’s application would prevent the likelihood of confusion
resulting from the use of an identical mark to closely related goods.59 TKC moved
to reconsider the decision, but this was denied by the CA.
Ruling of the Supreme Court
REVERSED and SET ASIDE CA’s decision and reinstated IPO-DG’s decision.
The KECI’s trademark registration not only covers unrelated goods but is also
incapable of deceiving the ordinary buyer in relation to TKC’s application. The list
of products under Class 9 can be sub-categorized into five different classifications
Confusion is unlikely because the products involved are more expensive than
ordinary consumable household items. Consumers will be more careful in
purchasing these products.

Present case
In 2006, Kolin Philippines International, Inc. (KPII), an affiliate of TKC, filed a
Trademark Application for the kolin mark under Class 9 covering televisions and
DVD players. KECI filed an opposition against KPII’s Trademark Application due to
its earlier registration of the KOLIN mark it would cause confusion among
consumers.
In its defense, KPII claimed that its application for kolin cannot be denied based
on the ruling in the KECI ownership case because it was not a party thereto and it
is not a res judicata. It asserted that KECI’s trademark registration is only limited
to goods specified in KECI’s certificate of registration and those related therein. It
insisted that televisions and DVD players are not related to the goods covered by
KECI’ registration.
Ruling of the IPO–BLA
SUSTAINED KECI’s opposition.
Buyers would be confused as to the origin of the products being. KECI received
several customer e-mails complaining against or seeking information about the
products of KPII. Further, the KPII is an instrumentality of TKC.
Ruling of the IPO Director General
DISMISSED KPII’s appeal.
It adopted the decision of the CA that TKC’s television sets and DVD players are
related to KECI’s goods covered by the latter’s certificate of registration
for KOLIN.
Ruling of the Court of Appeals
GRANTED KPII’s appeal.
KPII may register its mark for television sets and DVD players and the doctrine
of res judicata forbids it from arriving at a contrary conclusion.
ISSUE:
Whether or not KPII should be allowed to register its kolin mark.
RULING:
NO. KPII is not allowed to register the kolin mark for televisions and DVD players.
I. Res Judicata does not apply
All the elements of res judicata are not present. The subject matter in this case
and the Taiwan Kolin case are different. The cause of action in the Taiwan Kolin
case is also different from the cause of action in the case at bar. Thus, there is no
bar by prior judgment in this case.
Neither can res judicata in the concept of conclusiveness of judgment operate to
prevent the Court from determining the registrability of KPII’s trademark
application. The issue involving KPII’s use of another figurative or stylized version
of kolin was not ruled in Taiwan Kolin case, thus, the principle of conclusiveness of
judgment cannot apply.
II. KPII’S TRADEMARK APPLICATION IS NOT REGISTRABLE BECAUSE IT WILL
CAUSE DAMAGE TO KECI
There is resemblance between KECI’s KOLIN and KPII’s kolin marks. It would cause
likelihood of confusion and KECI’s rights would be damaged. The goods covered
are related, there is evidence of actual confusion between the two marks, and the
goods covered fall within the normal potential expansion of business. The
sophistication of buyers is not enough to eliminate confusion. Moreover, KPII
applied for kolin in bad faith.
Among the two tests to determine likelihood of confusion only the Dominancy
Test has been incorporated in the Intellectual Property Code. The legislative
intent was explicit in adopting the Dominancy Test and abandoning Holistic Test.
Applying the Dominancy Test in the present case, the Supreme Court ruled that
KPII’s mark resembles KECI’s mark because the word KOLIN is the prevalent
feature of both marks. Phonetically or aurally, the marks are exactly the same.
Minor differences between the mark of KPII’s and KECI’s mark should be
disregarded. The fact that KPII’s application possesses special characteristics not
present in KECI’s mark makes no difference in terms of appearance, sound,
connotation, or overall impression because the KOLIN word itself is the subject of
KECI’s registration.
The goods covered by KPII and KECI are related and it increases the likelihood of
confusion of business. Consumers might think that the goods come from the
same source.
The existence of likelihood of confusion is already considered damage which is
sufficient to sustain the opposition and rejection of KPII’s trademark application. If
the registration will be granted, KPII would acquire exclusive rights over the
stylized version of KOLIN for a range of goods and services falling within the
normal potential expansion of KPII’s business. This will curtail KECI’s right to freely
use and enforce the KOLIN mark, or any stylized version thereof. Based on Section
122 vis-a-vis Section 236 of the Intellectual Property Code, the Supreme Court
cannot give due course to KPII’s trademark application for kolin.