LIM KIAH, PETITIONER, VS. THE KAYNEE COMPANY AND THE DIRECTOR OF PATENTS, RESPONDENTS.

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, T-shirts, pants, sporting wear and handkerchiefs, asserting further
that the date of its first 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 became 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 Kaynee Company adduced proof to the
effect that late in 1949 or early 1950, the Aguinaldo’s
Department Store sold therein knitted shirts as well as polo shirts, cotton
sports shirts, swimming trunks and cotton pajamas coming from it and so
identified.  There was also testimony to
the effect that KAYNEE products were advertised in the Philippines.  The assertion as to such advertisement was
confirmed by one official of a public relations and management firm and another
from an advertising agency.

The applicant testified on his own behalf asserting that as of
1957 he had started using such trademark on his products, the word in Chinese,
according to him, being equivalent to fast in English or mabilis in Tagalog.  He referred to the due investigation he made
before filing such application for registration.  He ascertained that no one had previously
registered such trademark in the Philippines.  He spoke of his advertising his products in
at least two Manila newspapers and a weekly magazine.

The Director of Patents concluded that from the facts of record
and the exhibits presented, the opposition by the Kaynee
Company was without merit.  Thus:  “It is clear from the testimony of the Opposer’s witnesses that it had never used the trademark in
the Philippines
through its own initiative but because of Aguinaldo’s
importation and retail activities.  It
does not appear of record that Opposer had a direct
hand in the introduction of the goods bearing its trademark into this country.  There is no distri­butorship agreement
between The Kaynee Company and Aguinaldo’s,
or for that matter, any local outlet. 
Neither has there been shown a license or dealership agreement, an
assignment, or any other document to prove that the Opposer
had authorized Aguinaldo’s to market the KAYNEE goods
locally.  If ever the word KAYNEE has been known to exist in this
country, it is because of Aguinaldo’s trade
activities and not those of the Opposer.  It is incumbent upon Opposer
not only to establish prior use of its mark but prior use thereof for goods
related to those of applicant as to be likely to result in purchaser’s
ascribing to a common origin.”^[1]  As the prior use should exist on the 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.

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 been
proven by the evidence for the Opposer that the
trademark KAYNEE had been advertised in newspapers as early as the year 1953 *
* * 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 Philippine by another
and not abandoned, * * *.  It cannot
be denied that in this particular case the word ‘another’ used by the Statute
can refer to Aguinaldo’s.”^[2]
As to his authority to reject ex parte application for
registration, respondent Director of Patents relied on Englander v. Continental
Distilling Co.^[3] The dispositive
portion of the above decision was worded thus: 
“* * *, the opposition is dismissed for lack of [merit], but the
application of Lim Kiah is rejected ex parte.”^[4]

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 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.

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 well-settled 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 forth by Justice Makalintal in Chung Te v. Ng Kian
Giab:^[5]
“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 trade-name * * * 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.

As early as 1913, in Lizarraga Hermanos v. Yap Tico,^[7]
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
recent decisions.^[8]

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, 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 well-known
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.

Castro, J., concurs in the result.

Zaldivar, J., on official leave.

^[1]
Decision of Philippines
Patent Office, February 22, 1965.

^[2]
Ibid.

^[3]
95 Fed. 2d, 320 (1938).

^[4]
Decision of Philippines
Patent Office, February 22, 1965.

^[5]
L-23791, November 23, 1966.  See also Chua Chee v.
Philippines Patent Office, L-18337, January
30, 1965.

^[6]
Republic Act No. 166, Section 4(d).

^[7]
24 Phil. 504.

^[8]
People v. Mapa, L-22301, August 30, 1967; Pacific Oxygen & Acetylene
Co. v. Central Bank, L-21881, March
1, 1968; Dequito v, Lopez,
L-27757, March 28, 1968 and
Padilla v. City of Pasay,
L-24039, June 29, 1968.