G.R. No. 228165, February 9, 2021
KOLIN ELECTRONICS CO., INC., Petitioner, vs. KOLIN PHILIPPINES INTERNATIONAL, INC., Respondent.

FACTS

This is a Petition for Review on Certiorari seeking to reverse the Court of Appeals (CA) Decision and Resolution which reversed the ruling of the Director General of the Intellectual Property Office (IPO-DG) and gave due course to the trademark application of respondent Kolin Philippines International, Inc. (KPII), denying the opposition of petitioner Kolin Electronics Co., Inc. (KECI).
The antecedents involve two related cases:
1. The KECI Ownership Case: KECI’s predecessor-in-interest, Kolin Electronics Industrial Supply (KEIS), filed an application for the “KOLIN” mark on August 17, 1993. Taiwan Kolin Co., Ltd. (TKC) opposed this application. The IPO Bureau of Legal Affairs (IPO-BLA) and the IPO-DG ruled in favor of KECI, finding it to be the prior adopter and user of the mark in the Philippines since 1989. The CA affirmed this decision. TKC’s appeal to the Supreme Court was withdrawn, making the CA decision final and executory. Thus, KECI was adjudicated the owner of the “KOLIN” mark under the Trademark Law as against TKC.
2. The Taiwan Kolin Case: In a separate proceeding (G.R. No. 209843), the Supreme Court, on March 25, 2015, gave due course to TKC’s trademark application for “KOLIN” for specific goods (e.g., television, DVD player), subject to the limitation that it would not be used on goods similar to those of KECI. The Court found the marks identical but ruled that confusion was unlikely due to the vast price difference and distinct market segments of their products (KECI’s low-priced electronic parts vs. TKC’s high-end consumer appliances).
In the present case, respondent KPII, a sister company of TKC, filed Trademark Application No. 4-2007-00167 for the “KOLIN” mark on January 3, 2007, covering goods under Class 7 (e.g., washing machines) and Class 11 (e.g., cooking ranges, microwave ovens). KECI opposed this application based on its prior registration and ownership of the “KOLIN” mark. The IPO-BLA sustained KECI’s opposition. On appeal, the IPO-DG reversed the IPO-BLA and dismissed KECI’s opposition, finding no likelihood of confusion. The CA affirmed the IPO-DG’s ruling, prompting KECI’s petition to the Supreme Court.

ISSUE

Whether the CA erred in affirming the IPO-DG’s decision which gave due course to KPII’s application for the “KOLIN” trademark despite KECI’s claim of prior ownership and registration of an identical mark.

RULING

The Supreme Court GRANTED the petition. It REVERSED and SET ASIDE the CA Decision and Resolution and REINSTATED the IPO-BLA Decision which sustained KECI’s opposition to KPII’s trademark application.
The Court ruled that KPII’s application for the identical “KOLIN” mark must be denied due to the likelihood of confusion. The core principles applied are:
1. “Prior Tempore, Potior Jure” (First in Time, Stronger in Right): Ownership of a trademark is acquired by registration and actual use. KECI has prior, exclusive, and continuous use of the “KOLIN” mark in the Philippines since 1989, and it is the registered owner. This prior right cannot be defeated by KPII’s subsequent application.
2. Test of Likelihood of Confusion: Applying the dominancy test, the marks are identical. The holistic test also leads to a finding of likelihood of confusion because:
* Similarity of Goods: The goods covered by KPII’s application (home appliances like washing machines, cooking ranges) are related to and within the normal expansion of the business of KECI, whose registered goods include electronic equipment and components. These goods are complementary and may be sold through the same channels to the same class of consumers.
Identity of Marks: The marks are visually, aurally, and connotatively identical.
KPII’s Lack of Good Faith: KPII, as a sister company of TKC, was fully aware of KECI’s prior registration and the ongoing legal disputes over the “KOLIN” mark. Its application was filed in bad faith, with the intent to exploit the goodwill associated with KECI’s mark.
3. Res Judicata: The final and executory decision in the KECI Ownership Case conclusively established KECI’s ownership of the “KOLIN” mark as against TKC. Since KPII is a sister company of TKC and its application is part of a series of attempts by the Kolin Group to register the mark, the principle of res judicata bars KPII from re-litigating the issue of KECI’s ownership and prior use.
4. Protection of Prior Rights: The Intellectual Property Code protects rights acquired in good faith prior to its effectivity. KECI’s rights, acquired under the old Trademark Law, are preserved. Allowing KPII’s registration would adversely affect these vested rights.
Therefore, KPII’s application for the “KOLIN” trademark was denied.