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VOL. 25, OCTOBER 14, 1968 485

Lim Kiah vs. Kaynee Company

No. L24802. October 14, 1968.

LIM KIAH, petitioner, vs. THE KAYNEE COMPANY and

THE DIRECTOR OF PATENTS, respondents.

Philippines Patent Office; Revised Rules of Practice in

Trademark Cases; Trademark; Registration; Who may apply for
registration of trademark; Case at bar.Under Rule 34 of the
Revised Rules of Practice in Trademark Cases, only the owner of a
trademark may apply for its registration. In the case at bar, it has
been proven by the evidence for the Opposer that the trademark
KAYNEE had been advertised in newspapers as early as the year
1953 x x x through Aguinaldo's advertising activities. From that
and subsequent years it has been at least known to some segment
of the purchasing public that Aguinaldo's was continuously using
the trademark KAYNEE as among those sold in its store. Under
Section 4(d) of Republic Act No. 166, a trademark shall not be
registrable if it consists of or comprises a mark which so
resembles a mark registered in the Philippines or a mark or
tradename previously used in the Philippines by another and not
abandoned. x x x. It cannot be denied that in this particular case
the word "another" used by the Statute can refer to Aguinaldo's.
Same; Director of Patents; Findings of fact; When binding
upon the Supreme Court; Exception.Findings of fact of the
Director of Patents are binding upon the Supreme Court and are
not subject to its inquiry in the absence of any showing that there
was a grave abuse of discretion. As set forth by Justice

486

486 SUPREME COURT REPORTS ANNOTATED

Lim Kiah vs. Kaynee Company

Makalintal in Chung Te v. Ng Kian Giab (L23791, Nov. 23,

1966): "The rule is that the findings of fact by the Director of
Patents are conclusive on the Supreme Court provided they are
supported by substantial evidence."

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Statutory construction; When construction and interpretation

may be resorted to.As early as 1913, in Lizarraga Hermanos v.
Yap Tico (24 Phil. 504), it was stressed that our first and
fundamental duty is to apply the law. Construction and
interpretation come only "after it has been demonstrated that
application is impossible and inadequate without them." Such a
principle has since then commended itself for acceptance and has
been invariably followed, especially so in not a few of Supreme
Court's decisions (People vs. Mapa, L22301, Aug. 30, 1967, etc.).

PETITION for review of a decision of the Director of

Patents.

The facts are stated in the opinion of the Court.

Dugenia & Associates for petitioner.
Solicitor General for respondent Director of Patents.
Picazo & Agcaoili and Roque Recio for respondent
Kaynee Company.

FERNANDO, J.:

The dispute in this controversy centered around the right

to use the trademark KAYNEE. Petitioner Lim Kiah, on
April 5, 1957, filed an application with the Philippines
Patent Office to register such a trademark allegedly being
used by him on undershirts, polo shirts, Tshirts, pants,
sporting wear and handkerchiefs, asserting f urther that
the date of its f irst use went back to January 7, 1957. Such
an application was opposed by the Kaynee Company, one of
the respondents here, a South Carolina corporation, It
claimed ownership by virtue of a registration with the
United States Patent Office on February 18, 1913. It was
likewise alleged by it that it had used the same in the
Philippines as far back as 1951, on goods similar to those
being sold by the applicant. Its opposition likewise stressed
that such a trademark had by then become exceedingly
popular in the Philippines enjoying tremendous amount of
goodwill arising from newspaper, radio and television
advertising as well as the high and superior quality of its
products.
Both testimonial and documentary evidence were
introduced before the Philippines Patent Office.
Respondent
487

VOL. 35, OCTOBER 24, 1970 487

Edu vs. Ericta

Justice Laurel, in the first leading decision after the4

Constitution came into force, Calalang v. Williams,
identified police power with state authority to enact
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legislation that may interfere with personal liberty or

property in order to promote the general welfare. Persons
and property could thus "be subjected to all kinds of
restraints and burdens in order to secure the general
comfort, health and prosperity of the state." 5
Shortly after
independence in 1948, Primicias v. Fugoso, reiterated the
doctrine, such a competence being referred to as "the power
to prescribe regulations to promote the health, morals,
peace, education, good order or safety, and general welfare
of the people." The concept was set forth in negative terms
by Justice Malcolm in a preCommonwealth decision as
"that inherent and plenary power in the State which
enables it to prohibit all things6
hurtful to the comfort,
safety and welfare of society," In that sense it could be
hardly7 distinguishable as noted by this Court in Morfe v.
Mutuc with the totality of legislative power.
It is in the above sense the greatest and most powerful
attribute of government. It is to quote Justice Malcolm
anew "the most
8
essential, insistent, and at least illimitable
of powers," extending as Justice Holmes aptly pointed

_______________

4 70 Phil. 726 (1940).

5 80 Phil. 71. Cf. Ichong v Hernandez, 101 Phil. 1155 (1957).
6 Rubi v. Provincial Board, 39 Phil. 660, 708 (1919). Earlier Philippine
cases during the same era referred to police power as the power to
promote the general welfare and public interest, U.S. v. Toribio, 15 Phil.
85, 94 (1910); to enact such laws in relation to persons and property as
may promote public health, public morals, public safety, and the general
welfare of its inhabitants, U.S. v. Gomez Jesus, 31 Phil. 218, 225 (1915); to
preserve public order and to prevent offenses against the state and to
establish. for the intercourse of citizen with citizen, those rules of good
manners and good neighborhood calculated to prevent conflict of rights,
U.S. v. Pompeya, 31 Phil. 245, 254 (1915). The term is of American origin,
having been first referred to by Chief Justice Marshall in Gibsons v.
Ogden, 9 Wheat 7, 208 (1824) and explicitly identified as Maryland, 12
Wheat, 419, 443.
7 L20387, January 31, 1968, 22 SCRA 424.
8 Smith Bell and Co. v. Natividad, 40 Phil. 136 (1919).

488

488 SUPREME COURT REPORTS ANNOTATED

Lim Kiah vs. Kaynee Company

part of the oppositor and as in this case it had not done so,
there being no showing either that it authorized the
Aguinaldo's Department Store to use its trademark, its
opposition was dismissed.

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It did not result, however, in petitioner Lim Kiah

emerging as the victorious party. As noted in the aforesaid
decision of the Director of Patents of February 22, 1965,
"sufficient grounds exist for the ex parte rejection of
[petitioner's] application." The decision explained why:
'The Opposer was able to prove that the Respondent
Applicant is not the owner of the trademark KAYNEE.
Under Rule 34 of the Revised Rules of Practice in
Trademark Cases, only the owner of a trademark may
apply for its registration. It has beer proven by the
evidence for the Opposer that the trademark KAYNEE had
been advertised in newspapers as early as the year 1953 x
x x through Aguinaldo's advertising activities. From that
and subsequent years it has been at least known to some
segment of the purchasing public that Aguinaldo's was
continuously using the trademark KAYNEE as among
those sold in its store. Under Section 4(d) of Republic Act
No. 166, a trademark shall not be registrable if it consists
of or comprises a mark which so resembles a mark
registered in the Philippines or a mark or tradename
previously used in the Philippines by another and not
abandoned. x x x. It cannot be denied that in this particular
case the word 2
'another' used by the Statute can refer to
Aguinaldo's." As to his authority to reject ex parte
application for registration, respondent Director of Patents
3
relied on Englander v. Continental Distilling Co. The
dispositive portion of the above decision was worded thus:
"x x x, the opposition is dismissed for lack of [merit],
4
but
the application of Lim Kiah is rejected ex parte."
Then came this petition for the review of the above
decision of the Director of Patents, likewise included as
respondent. Petitioner Lim Kiah assigned three alleged
errors, namely, that he had presented evidence "clearly and

_______________

2 Ibid.
3 95 Fed. 2d, 230 (1938).
4 Decision of Philippines Patent Office, February 22, 1965.

489

VOL. 25, OCTOBER 14, 1968 489

Lim Kiah vs. Kaynee Company

fully establishing" his ownership" of the trademark, that no

evidence existed to support the ruling that the Aguinaldo's
Department Store had been using such a trademark, and
that the construction fastened on Section 4(d) of Republic
Act No. 166 by respondent Director of Patents ignored
other relevant sections.

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The appeal cannot prosper. The decision of the Director

of Patents must be sustained. The errors assigned do not
call for its reversal.
The first two of the above errors are factual in character.
It is wellsettled that we are precluded from making such
an inquiry as the finding of facts of the Director of Patents
in the absence of any showing that there was a grave abuse
of discretion is binding on us. As set 5 forth by Justice
Makalintal in Chung Te v. Ng Kian Giab: "The rule is that
the findings of fact by the Director of Patents are
conclusive on the Supreme Court provided they are
supported by substantial evidence."
That leaves only the third assigned error, petitioner
maintaining the view that when the Director of Patents
relied on the explicit and literal language of the
appropriate section,6 to the effect that a trademark shall
not be registrable if it "consists of or comprises a mark or
tradename x x x previously used in the Philippines by
another and not abandoned," it ignored other relevant
provision which could have called for a different conclusion.
Such an assertion flies in the face of the explicit and
categorical terminology of the act. It is unequivocal in
character and does not call for any interpretation that may
result in modifying or changing its meaning. 7
As early as 1913, in Lizarraga Hermanos v. Yap Tico, it
was stressed that our first and fundamental duty is to
apply the law. Construction and interpretation come only
"after it has been demonstrated that application is
impossible and inadequate without them." Such a principle
has since then commended itself for acceptance and has
been invariably followed, especially so in not a few of our

_______________

5 L23791, November 23, 1966. See also Chua Chee Philippines Patent
Office, L18337, January 30, 1965.
6 Republic Act No. 166, Section 4(d).
7 24 Phil. 504.

490

490 SUPREME COURT REPORTS ANNOTATED

Lim Kiah vs. Kaynee Company
8
recent decisions.
It is apparent, therefore, why, as above noted, the
appeal is doomed to failure. The decision of the Director of
Patents is not only sound in law but also commendable for
its consonance with the appropriate ethical standard which
by no means should be excluded from the business world as
an alien, if not a hostile, force. While in the fierce,

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competitive jungle which at times constitutes the arena of

commercial transactions, shrewdness and ingenuity are at
a premium, the law is by no means called upon to yield
invariably its nod of approval to schemes frowned upon by
the concept of fairness. Here, petitioner engaged in
manufacturing and selling the same kind of products would
rely on a trademark, which undeniably was previously
registered abroad and which theretofore had been used and
advertised extensively by one of the leading department
stores in the Philippines.
Petitioner would have the Director of Patents believe
reliance on what KAYNEE stands for as understood in the
language of his land, possibly even as a mark of ancestral
piety, caused him to make use of it. Such a solemn avowal
did not inevitably call for assent, considering that such a
trademark had long stood for similar products which
undoubtedly were wellknown and patronized locally. It did
not improve his standing at all. As a matter of fact, without
his so intending it, the legitimate suspicion did arise that
such a plea while perhaps a tribute to his ingenuity hardly
seemed to betray fidelity to fact. He ought to have been
aware then that both the administrative agencies and the
judiciary can be trusted to possess enough discernment not
to be taken in by so transparent a verbal ploy.
WHEREFORE, the decision is affirmed, with costs
against petitioner Lim Kiah.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,

Sanchez, Angeles and Capistrano, JJ., concur.

_______________

8 People v. Mapa, L22301, August 30, 1967; Pacific Oxygen &

Acetylene Co. v. Central Bank, L21881, March 1, 1968; Dequito v. Lopez,
L27757, March 28, 1968 and Padilla v. City of Pasay, L24039, June 29,
1968.

491

VOL. 25, OCTOBER 14, 1968 491

People vs. Navarra

Castro, J., concurs in the result.

Zaldivar, J., on official leave.

Decision affirmed.

Notes.(a) Conclusiveness of factual findings of the

Director of Patents.Findings of the Director of Patents on
the matter of similarity or dissimilarity of trademarks and
tradenames are not conclusive. They are subject to review
by the Supreme Court (Marvex Commercial Company, Inc.
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vs. Petra Hawpia & Co., L19297, Dec. 22, 1966, 18 SCRA
1178, 1182),
(b) Effect of registration abroad.In Asari Yoko Co., Ltd.
vs. Kee Boc, L14086, Jan. 20, 1961, 1 SCRA 1, the
Supreme Court reversed a decision of the Director of
Patents granting an application for the registration of a
trademark which had already been previously registered in
Japan by a Japanese firm and used on products imported
into the Philippines. The Court observed that "Modern
trade and commerce demands that depredations on
legitimate trademarks of aliens should not be
countenanced."

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