SUPERIOR COMMERCIAL ENTERPRISES INC. v. KUNNAN ENTERPRISES LTD.

AND SPORTS
CONCEPT & DISTRBUTOR, INC.
G.R. No. 16974, 20 April 2010; Brion, J.

FACTS:
Kunnan appointed Superior as its exclusive distributor in the Philippines under a Distributorship
Agreement which states that “Kunnan intends to acquire ownership of the Kennex Trademark registered
by Superior Commercial in the Philippines. Superior Commercial is desirious of being appointed as the sole
distributor of Kunnan products in the Philippines.”

Superior’s President and General Manager misled Kunnan’s Officers into believing that Kunnan could
not acquire trademark rights in the Philippines. Thus, Kunnan decided to assign its applications to register
“Pro Kennex” as a trademark to Superior, on condition that Superior acknowledged that Kunnan was still
the real owner of the mark and agreed to return to it to Kunnan on request.

Upon termination of distributorship agreement with Superior, Kunnan appointed Sports Concept as its
new distributor.

Kunnan caused the publication of a Notice and Warning in the Manila Bulletin’s 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 against Kunnan.

Prior to and during the pendency of the infringement and unfair competition case before the RTC, Kunnan
filed with the Bureau of Patents, Trademarks and Technology Transfer separate Petitions for the
Cancellation of Registration Trademarks involving the Kennex and Pro Kennex trademarks.
Kunna filed the petition on the ground that Superior fraudulently registered and appropriated the disputed
trademarks as mere distributor and not as lawful owner.
Both the trial court and the Court of Appeals ruled in favor of Kunnan.

ISSUES: WON Superior, as a distributor, has true ownership over the trademarks.

RULING: No. An exclusive distributor does not acquire any proprietary interest in the principal’s trademark
and cannot register it, unless the owner has assigned the right.
1. To establish trademark infringement, the following elements must be proven:
a. The validity of the plaintiff’s mark;
b. The plaintiff’s ownership of the mark; and
In no certain 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.
The right to register a trademark is based on ownership, and therefore only the owner can register it.
Gabriel v. Perez provided that 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.

2. Unfair competition has been defined as the passing off or attempting to pass off upon the public
of the goods and 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:
a. Confusing similarity in the general appearance of the goods; and
b. Intent to deceive the public and defraud the competitor.

The 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.
 In the hereby case, no evidence exist showing that Kunnan ever attempted to pass off goods it sold as
those of Superior and that there is no bad faith or fraud imputable to Kunnan in using the disputed
trademarks.
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.
DEL MONTE VS. CA
G.R. No. 78325, January 25, 1990

Facts:

Petitioner Del Monte Corporation is a foreign company organized under the laws of the United States and

not engaged in business in the Philippines. Both the Philippines and the United States are signatories to

the Convention of Paris, a treaty which grants to the nationals of the parties rights and advantages which

their own nationals enjoy for the repression of acts of infringement and unfair competition. On the other

hand, petitioner Philippine Packing Corporation (Philpack) is a domestic corporation duly organized under

the laws of the Philippines.

Sometime in 1965, Del Monte authorized Philpack to register with the Philippine Patent Office the Del Monte

catsup bottle configuration, for which it was granted Certificate of Trademark Registration by the Philippine

Patent Office under the Supplemental Register. In 1969, Del Monte granted Philpack the right to

manufacture, distribute and sell in the Philippines various agricultural products, including catsup, under the

Del Monte trademark and logo. In 1972, Del Monte also obtained two registration certificates for its

trademark “DEL MONTE” and its logo.

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of Registration by the

Bureau of Domestic Trade in 1980 to engage in the manufacture, packing, distribution and sale of various

kinds of sauce, identified by the logo Sunshine Fruit Catsup. The logo was registered in the Supplemental

Register in 1983. Sunshine Sauce’s product itself was contained in various kinds of bottles, including the

Del Monte bottle, which it bought from the junk shops for recycling.

Philpack received reports that Sunshine Sauce was using its exclusively designed bottles and a logo

confusingly similar to Del Monte’s. Philpack warned Sunshine Sauce to desist from doing so on pain of

legal action. Thereafter, claiming that the demand had been ignored, Philpack and Del Monte filed a

complaint against the Sunshine Sauce for infringement of trademark and unfair competition.

Sunshine alleged that:

  it had long ceased to use the Del Monte bottle and that

 its logo was substantially different from the Del Monte logo and would not confuse the buying public

to the detriment of the petitioners.

The RTC dismissed the complaint on the following grounds:

 there were substantial differences between the logos or trademarks of the parties

 Sunshine Sauce became the owner of the said bottles upon its purchase thereof from the junk

yards

 Del Monte and Philpack had failed to establish the its malice or bad faith, which is an essential

element of infringement of trademark or unfair competition

The CA affirmed RTC’s decision in toto. Hence, the appeal.

Issue(s):

 Whether or not Sunshine Sauce is guilty of unfair competition.

 Whether or not Sunshine Sauce is guilty of infringement for having used the Del Monte bottle.

Held:

 Yes, it is guilty of unfair competition.

The SC compared the Del Monte and Sunshine Sauce’s packaging. While it recognized several distinctions,

it does not agree with the conclusion that there was no infringement or unfair competition.

According to the SC, side-by-side comparison is not the final test of similarity. Such comparison requires a

careful scrutiny to determine in what points the labels of the products differ, as was done by the trial judge.

The ordinary buyer does not usually make such scrutiny nor does he usually have the time to do so. The

average shopper is usually in a hurry and does not inspect every product on the shelf as if he were browsing

in a library.

The question is not whether the two articles are distinguishable by their label when set side by side but

whether the general confusion made by the article upon the eye of the casual purchaser who is

unsuspicious and off his guard, is such as to likely result in his confounding it with the original.
 A number of courts have held that to determine whether a trademark has been infringed, we must consider

the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the marks as a totality,

not usually to any part of it. The court therefore should be guided by its first impression, for a buyer acts

quickly and is governed by a casual glance, the value of which may be dissipated as soon as the court

assumes to analyze carefully the respective features of the mark.

It has also been held that it is not the function of the court in cases of infringement and unfair competition

to educate purchasers but rather to take their carelessness for granted, and to be ever conscious of the

fact that marks need not be identical. A confusing similarity will justify the intervention of equity. The judge

must also be aware of the fact that usually a defendant in cases of infringement does not normally copy but

makes only colorable changes. Well has it been said that the most successful form of copying is to employ

enough points of similarity to confuse the public with enough points of difference to confuse the courts.

The Sunshine label is a colorable imitation of the Del Monte trademark. The predominant colors used in the

Del Monte label are green and red-orange, the same with Sunshine. The word “catsup” in both bottles is

printed in white and the style of the print/letter is the same. Although the logo of Sunshine is not a tomato,

the figure nevertheless approximates that of a tomato.

 No, it is not guilty of infringement.

Sunshine Sauce is not guilty of infringement for having used the Del Monte bottle. The reason is that the

configuration of the said bottle was merely registered in the Supplemental Register. Registration only in the

Supplemental Register means absence of the following presumptions: validity of the trademark, the

registrant’s ownership of the mark and his right to its exclusive use.

Registration in the Principal Register Registration in the Supplemental Register

 gives rise to a presumption of the validity of the

registration, the registrant’s ownership of the  no such presumption
mark and his right to the exclusive use thereof

 limited to the actual owner of the trademark  not limited to the actual owner of the trademark
  merely proof of actual use of the trademark and
 constructive notice of the registrant’s claim of
notice that the registrant has used or appropriated
ownership
it

 the issue of ownership may be contested through

 not subject to opposition although it may be
opposition or interference proceedings or, after
cancelled after the issuance
registration, in a petition for cancellation

 basis for an action for infringement  not a basis

 in applications for registration in the Principal

 not so in applications for registrations in the
Register, publication of the application is
Supplemental Register
necessary

It can be inferred from the foregoing that although Del Monte has actual use of the bottle’s configuration,
the petitioners cannot claim exclusive use thereof because it has not been registered in the Principal
Register. However, we find that Sunshine, despite the many choices available to it and notwithstanding
that the