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Dy, Jr. owns 5M Enterprises. He imports Sunny Boy powdered milk from Australia and repacks
the powdered milk into three sizes of plastic packs bearing the name NANNY. The packs weigh
NESTLE, S.A., 80, 180 and 450 grams and are sold for P8.90, P17.50 and P39.90, respectively. NANNY
is is also classified under Class 6 full cream milk for adults in [sic] all ages. Dy, Jr. distributes and
- versus -
sells the powdered milk in Dumaguete, Negros Oriental, Cagayan de Oro, and parts of
MARTIN T. DY, JR., Mindanao.
August 8, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x In a letter dated 1 August 1985, Nestle requested Dy, Jr. to refrain from using NANNY and to
undertake that he would stop infringing the NAN trademark. Dy, Jr. did not act
on Nestles request. On 1 March 1990, Nestle filed before the RTC, Judicial Region 7, Branch
31, Dumaguete City, a complaint against Dy, Jr. for infringement. Dy, Jr. filed a motion to
DECISION dismiss alleging that the complaint did not state a cause of action. In its 4 June 1990 order, the
trial court dismissed the complaint. Nestle appealed the 4 June 1990 order to the Court of
Appeals. In its 16 February 1993 Resolution, the Court of Appeals set aside the 4 June 1990
CARPIO, J.: order and remanded the case to the trial court for further proceedings.
The Case Pursuant to Supreme Court Administrative Order No. 113-95, Nestle filed with the trial court a
motion to transfer the case to the RTC, Judicial Region 7, Branch 9, Cebu City, which was
designated as a special court for intellectual property rights.
This is a petition for review on certiorari under Rule 45 of the Rules of Court. The petition
challenges the 1 September 2005 Decision and 4 April 2006 Resolution of the Court of Appeals
in CA-G.R. CV No. 62730, finding respondent Martin T. Dy, Jr. (Dy, Jr.) not liable for trademark The RTCs Ruling
infringement. The Court of Appeals reversed the 18 September 1998 Decision of the Regional
Trial Court (RTC), Judicial Region 7, Branch 9, Cebu City, in Civil Case No. CEB-19345.
The Facts In its 18 September 1998 Decision, the trial court found Dy, Jr. liable for infringement. The trial
court held:
Petitioner Societe Des Produits Nestle, S.A. (Nestle) is a foreign corporation organized under
the laws of Switzerland. It manufactures food products and beverages. As evidenced by If determination of infringement shall only be limited on whether or not
Certificate of Registration No. R-14621 issued on 7 April 1969 by the then Bureau of Patents, the mark used would likely cause confusion or mistake in the minds of the
Trademarks and Technology Transfer, Nestle owns the NAN trademark for its line of infant buying public or deceive customers, such in [sic] the most considered view
powdered milk products, consisting of PRE-NAN, NAN-H.A., NAN-1, and NAN-2. NAN is of this forum would be highly unlikely to happen in the instant case. This is
classified under Class 6 diatetic preparations for infant feeding. because upon comparison of the plaintiffs NAN and defendants NANNY,
the following features would reveal the absence of any deceptive
tendency in defendants NANNY: (1) all NAN products are contained tin cans
[sic], while NANNY are contained in plastic packs; (2) the predominant
Nestle distributes and sells its NAN milk products all over the Philippines. It has been investing colors used in the labels of NAN products are blue and white, while the
tremendous amounts of resources to train its sales force and to promote the NAN milk predominant colors in the plastic packings of NANNY are blue and green; (3)
products through advertisements and press releases. the labels of NAN products have at the bottom portion an elliptical shaped
figure containing inside it a drawing of nestling birds, which is overlapped
by the trade-name Nestle, while the plastic packs of NANNY have a drawing
1
of milking cows lazing on a vast green field, back-dropped with snow Considering that defendants NANNY belongs to the same class as that of
covered mountains; (4) the word NAN are [sic] all in large, formal and plaintiffs NAN because both are food products, the defendants
conservative-like block letters, while the word NANNY are [sic] all in small unregistered trade mark NANNY should be held an infringement to
and irregular style of letters with curved ends; and (5) all NAN products are plaintiffs registered trademark NAN because defendants use of NANNY
milk formulas intended for use of [sic] infants, while NANNY is an instant would imply that it came from the manufacturer of NAN. Furthermore,
full cream powdered milk intended for use of [sic] adults. since the word nanny means a childs nurse, there might result the not so
remote probability that defendants NANNY may be confused with infant
formula NAN despite the aparent [sic] disparity between the features of
the two products.
The foregoing has clearly shown that infringement in the instant case
cannot be proven with the use of the test of dominancy because the Dy, Jr. appealed the 18 September 1998 Decision to the Court of Appeals.
deceptive tendency of the unregistered trademark NANNY is not apparent
from the essential features of the registered trademark NAN.
However, in Esso Standard Eastern, Inc. vs. Court of Appeals, et al. L-29971,
Aug. 31, 1982, the Supreme Court took the occasion of discussing what is
implied in the definition of infringement when it stated: Implicit in this In its 1 September 2005 Decision, the Court of Appeals reversed the trial courts 18 September
definition is the concept that the goods must be so related that there is 1998 Decision and found Dy, Jr. not liable for infringement. The Court of Appeals held:
likelihood either of confusion of goods or business. x x x But as to whether
trademark infringement exists depends for the most part upon whether or
not the goods are so related that the public may be, or is actually, deceived [T]he trial court appeared to have made a finding that there is no colorable
and misled that they came from the same maker or manufacturer. For imitation of the registered mark NAN in Dys use of NANNY for his own milk
non-competing goods may be those which, though they are not in actual packs. Yet it did not stop there. It continued on applying the concept of
competition, are so related to each other that it might reasonably be related goods.
assumed that they originate from one manufacturer. Non-competing goods
may also be those which, being entirely unrelated, could not reasonably be
assumed to have a common source. In the former case of related goods,
confusion of business could arise out of the use of similar marks; in the The Supreme Court utlilized the concept of related goods in the said case
latter case of non-related goods, it could not. of Esso Standard Easter, Inc. versus Court of Appeals, et al. wherein two
contending parties used the same trademark ESSO for two different goods,
i.e. petroleum products and cigarettes. It rules that there is infringement of
trademark involving two goods bearing the same mark or label, even if the
Furthermore, in said case the Supreme Court as well discussed on when said goods are non-competing, if and only if they are so related that the
goods may become so related for purposes of infringement when it stated: public may be, or is actually, deceived that they originate from the one
Goods are related when they belong to the same class or have same maker or manufacturer. Since petroleum products and cigarettes, in kind
descriptive properties; when they possess the same physical attributes or and nature, flow through different trade channels, and since the possibility
essential characteristics with reference to their form, composition, texture of confusion is unlikely in the general appearances of each mark as a whole,
or quality. They may also be related because they serve the same purpose the Court held in this case that they cannot be so related in the context of
or are sold in grocery stores. x x x infringement.
2
In applying the concept of related goods in the present case, the trial court to the other. Even the trial court found these glaring dissimilarities as
haphazardly concluded that since plaintiff-appellees NAN and above-quoted. We need not add more of these factual dissimilarities.
defendant-appellants NANNY belong to the same class being food products,
the unregistered NANNY should be held an infringement of Nestles NAN
because the use of NANNY would imply that it came from the
NAN products, which consist of Pre-NAN, NAN-H-A, NAN-1 and NAN-2, are
manufacturer of NAN. Said court went on to elaborate further: since the
all infant preparations, while NANNY is a full cream milk for adults in [sic]
word NANNY means a childs nurse, there might result the not so remote
all ages. NAN milk products are sold in tin cans and hence, far expensive
probability that defendants NANNY may be confused with infant formula
than the full cream milk NANNY sold in three (3) plastic packs containing 80,
NAN despite the aparent (sic) disparity between the features of the two
180 and 450 grams and worth P8.90, P17.50 and P39.90 per milk pack. The
products as discussed above.
labels of NAN products are of the colors blue and white and have at the
bottom portion an elliptical shaped figure containing inside it a drawing of
nestling birds, which is overlapped by the trade-name Nestle. On the other
The trial courts application of the doctrine laid down by the Supreme Court hand, the plastic packs NANNY have a drawing of milking cows lazing on a
in the Esso Standard case aforementioned and the cases cited therein is vast green field, back-dropped with snow-capped mountains and using the
quite misplaced. The goods of the two contending parties in those cases predominant colors of blue and green. The word NAN are [sic] all in large,
bear similar marks or labels: Esso for petroleum products and cigarettes, formal and conservative-like block letters, while the word NANNY are [sic]
Selecta for biscuits and milk, X-7 for soap and perfume, lipstick and nail all in small and irregular style of letters with curved ends. With these
polish. In the instant case, two dissimilar marks are involved material differences apparent in the packaging of both milk products,
plaintiff-appellees NAN and defendant-appellants NANNY. Obviously, the NANNY full cream milk cannot possibly be an infringement of NAN infant
concept of related goods cannot be utilized in the instant case in the same milk.
way that it was used in the Esso Standard case.
Nestle filed a motion for reconsideration. In its 4 April 2006 Resolution, the Court of Appeals
denied the motion for lack of merit. Hence, the present petition.
While it is true that both NAN and NANNY are milk products and that the
word NAN is contained in the word NANNY, there are more glaring
dissimilarities in the entirety of their trademarks as they appear in their
respective labels and also in relation to the goods to which they are Issue
attached.The discerning eye of the observer must focus not only on the
predominant words but also on the other features appearing in both labels
in order that he may draw his conclusion whether one is confusingly similar The issue is whether Dy, Jr. is liable for infringement.
3
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark
or a dominant feature thereof and apply such reproduction, counterfeit,
The Courts Ruling copy or colorable imitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of
The petition is meritorious. goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be liable in a civil action
for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts
Section 22 of Republic Act (R.A.) No. 166, as amended, states: stated in Subsection 155.1 or this subsection are committed regardless of
whether there is actual sale of goods or services using the infringing
material.
Infringement, what constitutes. Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale, In Prosource International, Inc. v. Horphag Research Management SA, the Court laid down the
offering for sale, or advertising of any goods, business or services on or in elements of infringement under R.A. Nos. 166 and 8293:
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy
or colorably imitate any such mark or trade-name and apply such In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A,
reproduction, counterfeit, copy, or colorable imitation to labels, signs, 9-A, and 20 thereof, the following constitute the elements of trademark
prints, packages, wrappers, receptacles or advertisements intended to be infringement:
used upon or in connection with such goods, business or services, shall be
liable to a civil action by the registrant for any or all of the remedies herein
provided. (a) A trademark actually used in commerce in the
Philippines and registered in the principal register of
the Philippine Patent Office[;]
Section 155 of R.A. No. 8293 states:
4
It is without the consent of the trademark or
trade name owner or the assignee thereof.
(c) [T]he trademark is used for identical or
similar goods[;] and
Among the elements, the element of likelihood of confusion is the gravamen of trademark
infringement. There are two types of confusion in trademark infringement: confusion of goods
(d) [S]uch act is done without the consent of the and confusion of business. In Sterling Products International, Inc.
trademark registrant or assignee. v. Farbenfabriken Bayer Aktiengesellschaft, the Court distinguished the two types of confusion:
On the other hand, the elements of infringement under R.A. No. 8293 are Callman notes two types of confusion. The first is the confusion of goods in
as follows: which event the ordinarily prudent purchaser would be induced to
purchase one product in the belief that he was purchasing the other. In
which case, defendants goods are then bought as the plaintiffs, and the
The trademark being infringed is registered in poorer quality of the former reflects adversely on the plaintiffs
the Intellectual Property Office; however, in reputation. The other is the confusion of business: Here though the goods
infringement of trade name, the same need not be of the parties are different, the defendants product is such as might
registered; reasonably be assumed to originate with the plaintiff, and the public would
then be deceived either into that belief or into the belief that there is some
connection between the plaintiff and defendant which, in fact, does not
exist.
The trademark or trade name is reproduced,
counterfeited, copied, or colorably imitated by the
infringer;
There are two tests to determine likelihood of confusion: the dominancy test and holistic
test. The dominancy test focuses on the similarity of the main, prevalent or essential features
of the competing trademarks that might cause confusion. Infringement takes place when the
The infringing mark or trade name is used in competing trademark contains the essential features of another. Imitation or an effort to
connection with the sale, offering for sale, or imitate is unnecessary. The question is whether the use of the marks is likely to cause
advertising of any goods, business or services; or the confusion or deceive purchasers.
infringing mark or trade name is applied to labels, signs,
prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in
connection with such goods, business or services; The holistic test considers the entirety of the marks, including labels and packaging, in
determining confusing similarity. The focus is not only on the predominant words but also on
the other features appearing on the labels.
5
In trademark cases, particularly in ascertaining whether one trademark is
confusingly similar to another, no set rules can be deduced because each
case must be decided on its merits. In such cases, even more than in any We find no cogent reason to depart from such conclusion.
other litigation, precedent must be studied in the light of the facts of the
particular case. That is the reason why in trademark cases, jurisprudential
precedents should be applied only to a case if they are specifically in point. This is not the first time the Court takes into account the aural effects of
the words and letters contained in the marks in determining the issue of
confusing similarity. In Marvex Commercial Co., Inc. v. Petra Hawpia & Co.,
et al., cited in McDonalds Corporation v. L.C. Big Mak Burger, Inc., the Court
held:
In the light of the facts of the present case, the Court holds that the dominancy test is
applicable. In recent cases with similar factual milieus, the Court has consistently applied the
dominancy test. In Prosource International, Inc., the Court applied the dominancy test in
The following random list of confusingly similar sounds
holding that PCO-GENOLS is confusingly similar to PYCNOGENOL. The Court held:
in the matter of trademarks, culled from Nims, Unfair
Competition and Trade Marks, 1947, Vol. 1, will
reinforce our view that SALONPAS and LIONPAS are
The trial and appellate courts applied the Dominancy Test in determining confusingly similar in sound: Gold Dust and Gold
whether there was a confusing similarity between the marks PYCNOGENOL Drop; Jantzen and Jass-Sea; Silver Flash and Supper
and PCO-GENOL. Applying the test, the trial court found, and the CA Flash; Cascarete and Celborite; Celluloid and Cellonite;
affirmed, that: Chartreuse and Charseurs; Cutex and Cuticlean; Hebe
and Meje; Kotex
and Femetex; Zuso and Hoo Hoo. Leon Amdur, in his
book Trade-Mark Law and Practice, pp. 419-421, cities
Both the word[s] PYCNOGENOL and
[sic], as coming within the purview of
PCO-GENOLS have the same suffix GENOL which on
the idem sonans rule, Yusea and U-C-A, Steinway Pianos
evidence, appears to be merely descriptive and furnish
and Steinberg Pianos, and Seven-Up and
no indication of the origin of the article and hence,
Lemon-Up. In Co Tiong vs. Director of Patents, this
open for trademark registration by the plaintiff through
Court unequivocally said that Celdura and Condura are
combination with another word or phrase such as
confusingly similar in sound; this Court held
PYCNOGENOL, Exhibits A to A-3. Furthermore, although
in Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the
the letters Y between P and C, N between O and C and S
name Lusolin is an infringement of the
after L are missing in the [petitioners] mark
trademark Sapolin, as the sound of the two names is
PCO-GENOLS, nevertheless, when the two words are
almost the same.
pronounced, the sound effects are confusingly similar
not to mention that they are both described by their
manufacturers as a food supplement and thus,
identified as such by their public consumers. And In McDonalds Corporation v. MacJoy Fastfood Corporation, the Court applied the dominancy
although there were dissimilarities in the trademark test in holding that MACJOY is confusingly similar to MCDONALDS. The Court held:
due to the type of letters used as well as the size, color
and design employed on their individual
packages/bottles, still the close relationship of the
While we agree with the CAs detailed enumeration of differences between
competing products name is sounds as they were
the two (2) competing trademarks herein involved, we believe that the
pronounced, clearly indicates that purchasers could be
holistic test is not the one applicable in this case, the dominancy test being
misled into believing that they are the same and/or
the one more suitable. In recent cases with a similar factual milieu as here,
originates from a common source and manufacturer.
6
the Court has consistently used and applied the dominancy test in dominancy test, courts give greater weight to the similarity of the
determining confusing similarity or likelihood of confusion between appearance of the product arising from the adoption of the dominant
competing trademarks. features of the registered mark, disregarding minor differences. Courts will
consider more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality, sales outlets
and market segments.
xxxx
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, the Court ruled:
Applying the dominancy test to the instant case, the Court finds that herein
petitioners MCDONALDS and respondents MACJOY marks
are are confusingly similar with each other that an ordinary purchaser can
conclude an association or relation between the marks. x x x It has been consistently held that the question of
infringement of a trademark is to be determined by the
test of dominancy. Similarity in size, form and color,
while relevant, is not conclusive. If the competing
To begin with, both marks use the corporate M design logo and the prefixes
trademark contains the main or essential or dominant
Mc and/or Mac as dominant features. x x x
features of another, and confusion and deception is
likely to result, infringement takes place. Duplication or
imitation is not necessary; nor is it necessary that the
For sure, it is the prefix Mc, and abbreviation of Mac, which visually and infringing label should suggest an effort to
aurally catches the attention of the consuming public. Verily, the word imitate. (G. Heilman Brewing Co. vs. Independent
MACJOY attracts attention the same way as did Brewing Co., 191 F., 489, 495, citing Eagle White Lead
McDonalds, MacFries, McSpaghetti, McDo, Big Mac and the rest of the Co. vs. Pflugh (CC) 180 Fed. 579). The question at issue
MCDONALDS marks which all use the prefixes Mc and/or Mac. in cases of infringement of trademarks is whether the
use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or
Besides and most importantly, both trademarks are used in the sale deceive purchasers. (Auburn Rubber Corporation
of fastfood products. Indisputably, the respondents trademark application vs. Honover Rubber Co., 107 F. 2d 588; x x x)
for the MACJOY & DEVICE trademark covers goods under Classes 29 and 30 xxxx
of the International Classification of Goods, namely, fried chicken, chicken
barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioners trademark
registration for the MCDONALDS marks in the Philippines covers goods
which are similar if not identical to those covered by the respondents The test of dominancy is now explicitly incorporated into law in Section
application. 155.1 of the Intellectual Property Code which defines infringement as the
colorable imitation of a registered mark x x x or a dominant
feature thereof.
In McDonalds Corporation v. L.C. Big Mak Burger, Inc., the Court applied the dominancy test in
holding that BIG MAK is confusingly similar to BIG MAC. The Court held:
Applying the dominancy test, the Court finds that respondents use of the
Big Mak mark results in likelihood of confusion. First, Big Mak sounds
exactly the same as Big Mac. Second, the first word in Big Mak is exactly
This Court x x x has relied on the dominancy test rather than the holistic the same as the first word in Big Mac. Third, the first two letters in Makare
test. The dominancy test considers the dominant features in the competing the same as the first two letters in Mac. Fourth, the last letter Mak while a
marks in determining whether they are confusingly similar. Under the
7
k sounds the same as c when the word Mak is pronounced. Fifth, in Filipino, buying public had come to learn to associate the word
the letter k replaces c in spelling, thus Caloocan is spelled Kalookan. MASTER with the opposers goods.
In Societe Des Produits Nestle, S.A v. Court of Appeals, the Court applied the dominancy test in x x x. It is the observation of this Office that much of
holding that FLAVOR MASTER is confusingly similar to MASTER ROAST and MASTER BLEND. The the dominance which the word MASTER has acquired
Court held: through Opposers advertising schemes is carried over
when the same is incorporated into
respondent-applicants trademark FLAVOR
MASTER. Thus, when one looks at the label bearing the
While this Court agrees with the Court of Appeals detailed enumeration of
trademark FLAVOR MASTER (exh. 4) ones attention is
differences between the respective trademarks of the two coffee products,
easily attracted to the word MASTER, rather than to the
this Court cannot agree that totality test is the one applicable in this
dissimilarities that exist. Therefore, the possibility of
case. Rather, this Court believes that the dominancy test is more suitable to
confusion as to the goods which bear the competing
this case in light of its peculiar factual milieu.
marks or as to the origins thereof is not farfetched.
It is our considered view that the trademarks SALONPAS and LIONPAS are
confusingly similar in sound.
8
xxxx NANNY and NAN have the same classification, descriptive properties and physical
attributes. Both are classified under Class 6, both are milk products, and both are in powder
form. Also, NANNY and NAN are displayed in the same section of stores the milk section.
The following random list of confusingly similar sounds in the matter of
trademarks, culled from Nims, Unfair Competition and Trade Marks, 1947,
Vol. 1, will reinforce our view that SALONPAS and LIONPAS are confusingly The Court agrees with the lower courts that there are differences between NAN and NANNY: (1)
similar in sound: Gold Dust and Gold Drop; Jantzen and Jass-Sea; Silver NAN is intended for infants while NANNY is intended for children past their infancy and for
Flash and Supper Flash; Cascarete and Celborite; Celluloid and Cellonite; adults; and (2) NAN is more expensive than NANNY. However, as the registered owner of the
Chartreuse and Charseurs; Cutex and Cuticlean; Hebe and Meje; Kotex NAN mark, Nestle should be free to use its mark on similar products, in different segments of
and Femetex; Zuso and Hoo Hoo. Leon Amdur, in his book Trade-Mark Law the market, and at different price levels. In McDonalds Corporation v. L.C. Big Mak Burger, Inc.,
and Practice, pp. 419-421, cities [sic], as coming withinthe purview of the Court held that the scope of protection afforded to registered trademark owners extends
the idem sonans rule, Yusea and U-C-A, Steinway Pianos and Steinberg to market areas that are the normal expansion of business:
Pianos, and Seven-Up and Lemon-Up. In Co Tiong vs. Director of Patents,
this Court unequivocally said that Celdura and Condura are confusingly
similar in sound; this Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795
xxx
that the name Lusolin is an infringement of the trademark Sapolin, as the
sound of the two names is almost the same.
The registered trademark owner may use his mark on the same or similar
products, in different segments of the market, and at different price
Certificates of Registration. A certificate of registration of a mark shall be
levels depending on variations of the products for specific segments of
prima facie evidence of validity of the registration, the registrants
the market. The Court has recognized that the registered trademark
ownership of the mark, and of the registrants exclusive right to use the
owner enjoys protection in product and market areas that are the normal
same in connection with the goods or services and those that are related
potential expansion of his business. Thus, the Court has declared:
thereto specified in the certificate. (Emphasis supplied)
Facts: Petitioner Nestle, a Swiss corporation, owns the NAN trademark for its line of infant
powdered milk products in the Philippines. Respondent Dy, Jr. on the other hand, owner of 5M
Enterprises, imports and repacks powdered milk for adults bearing the mark NANNY.
Petitioner Nestle filed before the trial court an infringement complaint against respondent. The
trial court held that respondents trademark is an infringement to petitioners mark because it
would imply that respondents NANNY product came from petitioner. CA reversed and held
that the two marks are not confusingly similar thus respondent cannot be held liable for
infringement.
Ruling: YES.
In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-A, 9-A, and 20 thereof,
the following constitute the elements of trademark infringement: (a) A trademark actually
used in commerce in the Philippines and registered in the principal register of the
PhilippinePatent Office; (b) It is used by another person in connection with the sale, offering
for sale, or advertising of any goods, business or services or in connection with which such use
10
Dermaline, Inc. vs. Myra Pharmaceuticals, Inc., Myra also pointed out that Dermaline applied for the same mark DERMALINE on June 3, 2003
GR No. 190065, August 16, 2010 and was already refused registration by the IPO. By filing this new application for registration,
Dermaline appears to have engaged in a fishing expedition for the approval of its
mark. Myra argued that its intellectual property right over its trademark is protected under
DECISION Section 147[6] of R.A. No. 8293.
NACHURA, J.: Myra asserted that the mark DERMALINE DERMALINE, INC. is aurally similar to its own mark
such that the registration and use of Dermalines applied mark will enable it to obtain benefit
This is a petition for review oncertiorari[1]
seeking to reverse and set aside the Decision dated
from Myras reputation, goodwill and advertising and will lead the public into believing that
August 7, 2009[2] and the Resolution dated October 28, 2009[3] of the Court of Appeals (CA) in
Dermaline is, in any way, connected to Myra. Myra added that even if the subject application
CA-G.R. SP No. 108627.
was under Classification 44[7] for various skin treatments, it could still be connected to the
DERMALIN mark under Classification 5[8] for pharmaceutical products, since ultimately these
goods are very closely related.
The antecedent facts and proceedings
In its Verified Answer,[9] Dermaline countered that a simple comparison of the trademark
On October 21, 2006, petitioner Dermaline, Inc. (Dermaline) filed before the Intellectual DERMALINE DERMALINE, INC. vis--vis Myras DERMALIN trademark would show that they have
Property Office (IPO) an application for registration of the trademark DERMALINE DERMALINE, entirely different features and distinctive presentation, thus it cannot result in confusion,
INC. (Application No. 4-2006011536). The application was published for Opposition in the IPO mistake or deception on the part of the purchasing public. Dermaline contended that, in
E-Gazette on March 9, 2007. determining if the subject trademarks are confusingly similar, a comparison of the words is not
the only determinant, but their entirety must be considered in relation to the goods to which
they are attached, including the other features appearing in both labels. It claimed that there
On May 8, 2007, respondent Myra Pharmaceuticals, Inc. (Myra) filed a Verified were glaring and striking dissimilarities between the two trademarks, such that its trademark
Opposition[4] alleging that the trademark sought to be registered by Dermaline so resembles its DERMALINE DERMALINE, INC. speaks for itself (Res ipsa loquitur). Dermaline further argued
trademark DERMALIN and will likely cause confusion, mistake and deception to the purchasing that there could not be any relation between its trademark for health and beauty services
public. Myra said that the registration of Dermalines trademark will violate Section 123 [5] of from Myras trademark classified under medicinal goods against skin disorders.
Republic Act (R.A.) No. 8293 (Intellectual Property Code of the Philippines). It further alleged
that Dermalines use and registration of its applied trademark will diminish the distinctiveness
and dilute the goodwill of Myras DERMALIN, registered with the IPO way back July 8, 1986, The parties failed to settle amicably. Consequently, the preliminary conference was terminated
renewed for ten (10) years on July 8, 2006. Myra has been extensively using DERMALIN and they were directed to file their respective position papers. [10]
commercially since October 31, 1977, and said mark is still valid and subsisting.
On April 10, 2008, the IPO-Bureau of Legal Affairs rendered Decision No.
Myra claimed that, despite Dermalines attempt to differentiate its applied mark, the dominant 2008-70[11] sustaining Myras opposition pursuant to Section 123.1(d) of R.A. No. 8293. It
feature is the term DERMALINE, which is practically identical with its own DERMALIN, more disposed
particularly that the first eight (8) letters of the marks are identical, and that notwithstanding
the additional letter E by Dermaline, the pronunciation for both marks are identical. Further,
both marks have three (3) syllables each, with each syllable identical in sound and appearance,
WHEREFORE, the Verified Opposition is, as it is, hereby
even if the last syllable of DERMALINE consisted of four (4) letters while DERMALIN consisted
SUSTAINED. Consequently, Application Serial No. 4-2006-011536 for the
only of three (3).
mark DERMALINE, DERMALINE, INC. Stylized Wordmark for Dermaline, Inc.
under class 44 covering the aforementioned goods filed on 21 October
2006, is as it is hereby, REJECTED.
11
In determining likelihood of confusion, case law has developed two (2) tests, the Dominancy
Test and the Holistic or Totality Test.
Let the file wrapper of DERMALINE, DERMALINE, INC. Stylized Wordmark
subject matter of this case be forwarded to the Bureau of Trademarks (BOT)
for appropriate action in accordance with this Decision.
The Dominancy Test focuses on the similarity of the prevalent features of the
competing trademarks that might cause confusion or deception.[17] It is applied when the
trademark sought to be registered contains the main, essential and dominant features of the
SO ORDERED.[12] earlier registered trademark, and confusion or deception is likely to result. Duplication or
imitation is not even required; neither is it necessary that the label of the applied mark for
registration should suggest an effort to imitate. The important issue is whether the use of the
Aggrieved, Dermaline filed a motion for reconsideration, but it was denied under Resolution marks involved would likely cause confusion or mistake in the mind of or deceive the ordinary
No. 2009-12(D)[13] dated January 16, 2009. purchaser, or one who is accustomed to buy, and therefore to some extent familiar with, the
goods in question.[18] Given greater consideration are the aural and visual impressions created
by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets,
and market segments.[19] The test of dominancy is now explicitly incorporated into law in
Expectedly, Dermaline appealed to the Office of the Director General of the IPO. However, in Section 155.1 of R.A. No. 8293 which provides
an Order[14] dated April 17, 2009, the appeal was dismissed for being filed out of time.
A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any On the other hand, the Holistic Test entails a consideration of the entirety of the
combination thereof, adopted and used by a manufacturer or merchant on his goods to marks as applied to the products, including labels and packaging, in determining confusing
identify and distinguish them from those manufactured, sold, or dealt by others. [15]Inarguably, similarity. The scrutinizing eye of the observer must focus not only on the predominant words
it is an intellectual property deserving protection by law. In trademark controversies, each case but also on the other features appearing in both labels so that a conclusion may be drawn as to
must be scrutinized according to its peculiar circumstances, such that jurisprudential whether one is confusingly similar to the other.[20]
precedents should only be made to apply if they are specifically in point.[16]
As Myra correctly posits, as a registered trademark owner, it has the right under Section 147 of Relative to the question on confusion of marks and trade names, jurisprudence has
R.A. No. 8293 to prevent third parties from using a trademark, or similar signs or containers for noted two (2) types of confusion, viz: (1) confusion of goods (product confusion), where the
goods or services, without its consent, identical or similar to its registered trademark, where ordinarily prudent purchaser would be induced to purchase one product in the belief that he
such use would result in a likelihood of confusion. was purchasing the other; and (2) confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product, the mark of which registration is
applied for by one party, is such as might reasonably be assumed to originate with the
12
registrant of an earlier product, and the public would then be deceived either into that belief Indeed, the registered trademark owner may use its mark on the same or similar products, in
or into the belief that there is some connection between the two parties, though inexistent. [21] different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market. The Court is cognizant that the registered
trademark owner enjoys protection in product and market areas that are the normal potential
expansion of his business. Thus, we have held
In rejecting the application of Dermaline for the registration of its mark DERMALINE
DERMALINE, INC., the IPO applied the Dominancy Test. It declared that both confusion of
goods and service and confusion of business or of origin were apparent in both trademarks. It
also noted that, per Bureau Decision No. 2007-179 dated December 4, 2007, it already Modern law recognizes that the protection to which the owner of a
sustained the opposition of Myra involving the trademark DERMALINE of Dermaline under trademark is entitled is not limited to guarding his goods or business
Classification 5. The IPO also upheld Myras right under Section 138 of R.A. No. 8293, which from actual market competition with identical or similar products of the
provides that a certification of registration of a mark is prima facie evidence of the validity of parties, but extends to all cases in which the use by a junior appropriator of
the registration, the registrants ownership of the mark, and of the registrants exclusive right to a trade-mark or trade-name is likely to lead to a confusion of source, as
use the same in connection with the goods and those that are related thereto specified in the where prospective purchasers would be misled into thinking that the
certificate. complaining party has extended his business into the field (see 148 ALR
56 et seq; 53 Am Jur. 576) or is in any way connected with the activities of
the infringer; or when it forestalls the normal potential expansion of his
business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577).[23] (Emphasis supplied)
We agree with the findings of the IPO. As correctly applied by the IPO in this case,
while there are no set rules that can be deduced as what constitutes a dominant feature with
respect to trademarks applied for registration; usually, what are taken into account are signs,
color, design, peculiar shape or name, or some special, easily remembered earmarks of the
brand that readily attracts and catches the attention of the ordinary consumer.[22]
Thus, the public may mistakenly think that Dermaline is connected to or associated with Myra,
such that, considering the current proliferation of health and beauty products in the market,
the purchasers would likely be misled that Myra has already expanded its business through
Dermalines insistence that its applied trademark DERMALINE DERMALINE, INC. had differences Dermaline from merely carrying pharmaceutical topical applications for the skin to health and
too striking to be mistaken from Myras DERMALIN cannot, therefore, be sustained. While it is beauty services.
true that the two marks are presented differently Dermalines mark is written with the first
DERMALINE in script going diagonally upwards from left to right, with an upper case D followed Verily, when one applies for the registration of a trademark or label which is almost the same
by the rest of the letters in lower case, and the portion DERMALINE, INC. is written in upper or that very closely resembles one already used and registered by another, the application
case letters, below and smaller than the long-hand portion; while Myras mark DERMALIN is should be rejected and dismissed outright, even without any opposition on the part of the
written in an upright font, with a capital D and followed by lower case letters the likelihood of owner and user of a previously registered label or trademark. This is intended not only to avoid
confusion is still apparent. This is because they are almost spelled in the same way, except for confusion on the part of the public, but also to protect an already used and registered
Dermalines mark which ends with the letter E, and they are pronounced practically in the same trademark and an established goodwill.[24]
manner in three (3) syllables, with the ending letter E in Dermalines mark pronounced
silently. Thus, when an ordinary purchaser, for example, hears an advertisement of Dermalines
applied trademark over the radio, chances are he will associate it with Myras registered mark.
Besides, the issue on protection of intellectual property, such as trademarks, is factual in
nature. The findings of the IPO, upheld on appeal by the same office, and further sustained by
the CA, bear great weight and deserves respect from this Court. Moreover, the decision of the
Further, Dermalines stance that its product belongs to a separate and different classification IPO had already attained finality when Dermaline failed to timely file its appeal with the IPO
from Myras products with the registered trademark does not eradicate the possibility of Office of the Director General.
mistake on the part of the purchasing public to associate the former with the latter, especially
considering that both classifications pertain to treatments for the skin.
13
WHEREFORE, the petition is DENIED. The Decision dated August 7, 2009 and the Resolution originate with the registrant of an earlier product, and the public would then be deceived
dated October 28, 2009 of the Court of Appeals in CA-G.R. SP No. 108627 are AFFIRMED. Costs either into that belief or into the belief that there is some connection between the two parties,
against petitioner. though inexistent.
Using this test, the IPO declared that both confusion of goods and service and confusion of
business or of origin were apparent in both trademarks. While it is true that the two marks are
SO ORDERED.
presented differently, they are almost spelled in the same way, except for Dermalines mark
which ends with the letter "E," and they are pronounced practically in the same manner in
three (3) syllables, with the ending letter "E" in Dermalines mark pronounced silently. Thus,
when an ordinary purchaser, for example, hears an advertisement of
Dermalines applied trademark over the radio, chances are he will associate it with Myras.
When one applies for the registration of a trademark or label which is almost the same or that
very closely resembles one already used and registered by another, the application should be
rejected and dismissed outright, even without any opposition on the part of the owner and
user of a previously registered label or trademark.
Further, Dermalines stance that its product belongs to a separate and different classification
from Myras products with the registeredtrademark does not eradicate the possibility of
mistake on the part of the purchasing public to associate the former with the latter, especially
Facts: Dermaline filed with the IPO an application to register the trademark Dermaline. Myra considering that both classifications pertain to treatments for the skin.
opposed this alleging that the trademark resembles its trademark Dermalin and will cause
confusion, mistake and deception to the purchasing public. Dermalin was registered way
back 1986 and was commercially used since 1977. Myra claims that despite attempts of
Dermaline to differentiate its mark, the dominant feature is the term Dermaline to which the
first 8 letters were identical to that of Dermalin. The pronunciation for both is also identical.
Further, both have 3 syllables each with identical sound and appearance.
Issue: W/N the IPO should allow the registration of the trademark Dermaline. NO
Held: As Myra correctly posits, it has the right under Section 147 of R.A. No. 8293 to prevent
third parties from using a trademark, or similar signs or containers for goods or services,
without its consent, identical or similar to its registered trademark, where such use would
result in a likelihood of confusion. In determining confusion, case lawhas developed two (2)
tests, the Dominancy Test and the Holistic or Totality Test.
The Dominancy Test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion or deception. Duplication or imitation is not even
required; neither is it necessary that the label of the applied mark for registration should
suggest an effort to imitate. Relative to the question on confusion of marks and trade names,
jurisprudence noted two (2) types of confusion, viz: (1) confusion of goods (product confusion),
where the ordinarily prudent purchaser would be induced to purchase one product in the
belief that he was purchasing the other; and (2) confusion of business (source or origin
confusion), where, although the goods of the parties are different, the product, the mark of
which registration is applied for by one party, is such as might reasonably be assumed to
14
Ty vs. NBI Agents De Jemil and Kawada attested to conducting surveillance of Omni in the
G.R. No. 182147 | December 15, 2010 | months of March and April 2004 and doing a test-buy on April 15, 2004. They brought eight
branded LPG cylinders of Shellane, Petron Gasul, Totalgaz, and Superkalan Gaz to Omni for
refilling. The branded LPG cylinders were refilled, for which the National Bureau of
Investigation (NBI) agents paid PhP 1,582 as evidenced by Sales Invoice No. 90040[13] issued by
DECISION
Omni on April 15, 2004. The refilled LPG cylinders were without LPG valve seals and one of the
VELASCO, JR., J.: cylinders was actually underfilled, as found by LPG Inspector Noel N. Navio of the Liquefied
Petroleum Gas Industry Association (LPGIA) who inspected the eight branded LPG cylinders on
April 23, 2004 which were properly marked by the NBI after the test-buy.
The Case The NBIs test-buy yielded positive results for violations of BP 33, Section 2(a) in
relation to Secs. 3(c) and 4, i.e., refilling branded LPG cylinders without authority; and Sec. 2(c)
in relation to Sec. 4, i.e., underdelivery or underfilling of LPG cylinders. Thus, on April 28, 2004,
In this Petition for Review on Certiorari under Rule 45, petitioners seek the reversal Agent De Jemil filed an Application for Search Warrant (With Request for Temporary Custody
of the Decision[1] dated September 28, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. of the Seized Items)[14] before the Regional Trial Court (RTC) in Pasig City, attaching, among
98054, which reversed and set aside the Resolutions dated October 9, 2006[2] and December others, his affidavit[15] and the affidavit of Edgardo C. Kawada,[16]an NBI confidential agent.
14, 2006[3] of the Secretary of Justice, and reinstated the November 7, 2005 Joint
Resolution[4] of the Office of the Chief State Prosecutor. Petitioners assail also the CA On the same day of the filing of the application for search warrants on April 28, 2004,
Resolution[5] dated March 14, 2008, denying their motion for reconsideration. the RTC, Branch 167 in Pasig City issued Search Warrants No. 2624[17] and 2625.[18] The NBI
The Facts served the warrants the next day or on April 29, 2004 resulting in the seizure of several items
from Omnis premises duly itemized in the NBIs Receipt/Inventory of Property/Item
Seized.[19] On May 25, 2004, Agent De Jemil filed his Consolidated Return of Search Warrants
Petitioners are stockholders of Omni Gas Corporation (Omni) as per Omnis General with Ex-Parte Motion to Retain Custody of the Seized Items[20] before the RTC Pasig City.
Information Sheet[6] (GIS) dated March 6, 2004 submitted to the Securities and Exchange
Commission (SEC). Omni is in the business of trading and refilling of Liquefied Petroleum Gas Subsequently, Agent De Jemil filed before the Department of Justice (DOJ) his
(LPG) cylinders and holds Pasig City Mayors Permit No. RET-04-001256 dated February 3, 2004. Complaint-Affidavits against petitioners for: (1) Violation of Section 2(a), in relation to Sections
3(c) and 4, of B.P. Blg. 33, as amended by P.D. 1865;[21] and (2) Violation of Section 2(c), in
The case all started when Joaquin Guevara Adarlo & Caoile Law Offices (JGAC Law relation to Section 4, of B.P. Blg. 33, as amended by P.D. 1865,[22] docketed as I.S. Nos.
Offices) sent a letter dated March 22, 2004[7] to the NBI requesting, on behalf of their clients 2004-616 and 2004-618, respectively.
Shellane Dealers Association, Inc., Petron Gasul Dealers Association, Inc., and Totalgaz Dealers
Association, Inc., for the surveillance, investigation, and apprehension of persons or During the preliminary investigation, petitioners submitted their Joint
establishments in Pasig City that are engaged in alleged illegal trading of petroleum products Counter-Affidavit,[23] which was replied[24] to by Agent De Jemil with a corresponding
and underfilling of branded LPG cylinders in violation of Batas Pambansa Blg. (BP) 33,[8] as rejoinder[25] from petitioners.
amended by Presidential Decree No. (PD) 1865.[9]
Earlier, the JGAC Law Offices was furnished by several petroleum producers/brand The Ruling of the Office of the Chief State Prosecutor
owners their respective certifications on the dealers/plants authorized to refill their respective
branded LPG cylinders, to wit: (1) On October 3, 2003, Pilipinas Shell Petroleum Corporation in I.S. No. 2004-616 and I.S. No. 2004-618
(Pilipinas Shell) issued a certification[10] of the list of entities duly authorized to
refill Shellane LPG cylinders; (2) on December 4, 2003, Petron Corporation (Petron) issued a
certification[11] of their dealers in Luzon, Visayas, and Mindanao authorized to refill Petron On November 7, 2005, the 3rd Assistant City Prosecutor Leandro C. Catalo of Manila
Gasul LPG cylinders; and (3) on January 5, 2004, Total (Philippines) Corporation (Total) issued issued a Joint Resolution,[26] later approved by the Chief State Prosecutor Jovencito R. Zuo
two certifications[12] of the refilling stations and plants authorized to refill upon the recommendation of the Head of the Task Force on Anti-Intellectual Property Piracy
their Totalgaz and Superkalan Gaz LPG cylinders. (TFAIPP), Assistant Chief State Prosecutor Leah C. Tanodra-Armamento, finding probable cause
15
to charge petitioners with violations of pertinent sections of BP 33, as amended, resolving as as the phenomenon may have been caused by human error, oversight or technical error. Being
follows: an isolated case, it ruled that there was no showing of a clear pattern of deliberate
underfilling. Second, on the alleged violation of refilling branded LPG cylinders sans written
authority, it found no sufficient basis to hold petitioners responsible for violation of Sec. 2 (c)
WHEREFORE, premises considered, it is hereby recommended of BP 33, as amended, since there was no proof that the branded LPG cylinders seized from
that two (2) Informations for violations of Section 2 [a] (illegal trading in Omni belong to another company or firm, holding that the simple fact that the LPG cylinders
petroleum and/or petroleum products) and Section 2 [c] (underfilling of with markings or stamps of other petroleum producers cannot by itself prove ownership by
LPG cylinders), both of Batas Pambansa Bilang 33, as amended, be filed said firms or companies as the consumers who take them to Omni fully owned them having
against respondents [herein petitioners] ARNEL TY, MARIE ANTONETTE TY, purchased or acquired them beforehand.
JASON ONG, WILLY DY and ALVIN TY.[27]
Agent De Jemil moved but was denied reconsideration[33] through another
Resolution[34] dated December 14, 2006 prompting him to repair to the CA via a petition for
Assistant City Prosecutor Catalo found the existence of probable cause based on the certiorari[35] under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 98054.
evidence submitted by Agent De Jemil establishing the fact that Omni is not an authorized
refiller of Shellane, Petron Gasul, Totalgaz and Superkalan Gaz LPG cylinders.Debunking
petitioners contention that the branded LPG cylinders are already owned by consumers who The Ruling of the CA
are free to do with them as they please, the law is clear that the stamped markings on the LPG
cylinders show who are the real owners thereof and they cannot be refilled sans authority
The Office of the Solicitor General (OSG), in its Comment[36] on Agent De Jemils
from Pilipinas Shell, Petron or Total, as the case may be. On the underfilling of one LPG cylinder,
appeal, sought the dismissal of the latters petition viewing that the determination by the Office
the findings of LPG Inspector Navio of the LPGIA were uncontroverted by petitioners.
of the Secretary of Justice of probable cause is entitled to respect owing to the exercise of his
prerogative to prosecute or not.
Petitioners motion for reconsideration,[28] was denied through a Resolution[29] by the
Office of the Chief State Prosecutor issued on May 3, 2006.
On August 31, 2007, Petron filed a Motion to Intervene and to Admit Attached
Petition-in-Intervention[37] and Petition-in-Intervention[38] before the CA in CA-G.R. SP No.
In time, petitioners appealed to the Office of the Secretary of Justice.[30]
98054. And much earlier, the Nationwide Association of Consumers, Inc. (NACI) also filed a
similar motion.
The Ruling of the DOJ Secretary
in I.S. No. 2004-616 and I.S. No. 2004-618
On September 28, 2007, the appellate court rendered the assailed
Decision[39] revoking the resolutions of the Office of the Secretary of Justice and reinstated the
On October 9, 2006, the Office of the Secretary of Justice issued a
November 7, 2005 Joint Resolution of the Office of the Chief State Prosecutor. The fallo reads:
Resolution[31] reversing and setting aside the November 7, 2005 Joint Resolution of the Office
of the Chief State Prosecutor, the dispositive portion of which reads:
WHEREFORE, the instant petition is GRANTED. The assailed
resolutions dated October 9, 2006 and December 14, 2006 are
WHEREFORE, the assailed resolution is hereby REVERSED and SET
hereby REVERSED and SET ASIDE. The Joint Resolution dated November 7,
ASIDE. The Chief State Prosecutor is directed to cause the withdrawal of
2005 of the Office of the Chief State Prosecutor finding probable cause
the informations for violations of Sections 2(a) and 2(c) of B.P. Blg. 33, as
against private respondents Arnel Ty, Marie Antonette Ty, Jason Ong, Willy
amended by P.D. 1865, against respondents Arnel Ty, Mari Antonette Ty,
Dy, and Alvin Ty is hereby REINSTATED.
Jason Ong, Willy Dy and Alvin Ty and report the action taken within ten (10)
days from receipt hereof.
SO ORDERED.[40]
SO ORDERED.[32]
Citing Sec. 1 (1) and (3) of BP 33, as amended, which provide for the presumption of
underfilling, the CA held that the actual underfilling of an LPG cylinder falls under the
The Office of the Secretary of Justice viewed, first, that the underfilling of one of the
eight LPG cylinders was an isolated incident and cannot give rise to a conclusion of underfilling,
16
prohibition of the law which does not require for the underfilling to be substantial and and second, whether petitioners can be held liable therefor. We, however, will tackle at the
deliberate. outset the sole procedural issue raised: the propriety of the petition for certiorari under Rule
65 availed of by public respondent Agent De Jemil to assail the resolutions of the Office of the
Moreover, the CA found strong probable violation of refilling of another companys or Secretary of Justice.
firms cylinders without such companys or firms written authorization under Sec. 3 (c) of BP 33,
as amended. The CA relied on the affidavits of Agents De Jemil and Kawada, the certifications Petrons Comment-in-Intervention
from various LPG producers that Omni is not authorized to refill their branded LPG cylinders,
the results of the test-buy operation as attested to by the NBI agents and confirmed by the On April 14, 2009, Petron entered its appearance by filing a Motion for Leave to
examination of LPG Inspector Navio of the LPGIA, the letter-opinion[41]of the Department of Intervene and to Admit Comment-in-Intervention[45] and its Comment-in-Intervention [To
Energy (DOE) to Pilipinas Shell confirming that branded LPG cylinders are properties of the petition for Review on Certiorari dated 13 May 2008].[46] It asserted vested interest in the
companies whose stamp markings appear thereon, and Department Circular No. seizure of several Gasul LPG cylinders and the right to prosecute petitioners for unauthorized
2000-05-007[42] of the DOE on the required stamps or markings by the manufacturers of LPG refilling of its branded LPG cylinders by Omni. Petitioners duly filed their
cylinders. Comment/Opposition[47] to Petrons motion to intervene. It is clear, however, that Petron has
substantial interest to protect in so far as its business relative to the sale and refilling of Petron
After granting the appeal of Agent De Jemil, however, the motions to intervene filed Gasul LPG cylinders is concerned, and therefore its intervention in the instant case is proper.
by Petron and NACI were simply noted by the appellate court.
The Courts Ruling
Petitioners motion for reconsideration was rebuffed by the CA through the equally
assailed March 14, 2008 Resolution.[43] We partially grant the petition.
For another, there is no question that the Secretary of Justice is an alter ego of the
President who may opt to exercise or not to exercise his or her power of review over the
The foregoing issues can be summarized into two core issues: first, whether probable formers determination in criminal investigation cases. As aptly noted by Agent De Jemil, the
cause exists against petitioners for violations of Sec. 2 (a) and (c) of BP 33, as amended; determination of probable cause by the Secretary of Justice is, under the doctrine of qualified
17
political agency, presumably that of the Chief Executive unless disapproved or reprobated by signed due to the withdrawal of petroleum major players Petron, Total and Pilipinas
the latter. Shell. Nonetheless, the non-signing of the MOA does not diminish the fact of the recognized
Chan v. Secretary of Justice[50] delineated the proper remedy from the determination industry practice of cylinder exchange or swapping. Relying on Republic Act No. (RA)
of the Secretary of Justice. Therein, the Court, after expounding on the policy of 8479,[54] petitioners maintain that said law promotes and encourages the entry of new
non-interference in the determination of the existence of probable cause absent any showing participants in the petroleum industry such as Omni. And in furtherance of this mandate is the
of arbitrariness on the part of the public prosecutor and the Secretary of Justice, however, valid practice of cylinder exchange or swapping in the LPG industry.
concluded, citing Alcaraz v. Gonzalez[51] and Preferred Home Specialties, Inc. v. Court of
Appeals,[52] that an aggrieved party from the resolution of the Secretary of Justice may directly We are not persuaded by petitioners strained rationalizations.
resort to judicial review on the ground of grave abuse of discretion, thus:
After all, once a consumer buys a branded LPG cylinder from the brand owner or its
(a) Illegal trading in petroleum and/or petroleum products; authorized dealer, said consumer is practically free to do what he pleases with the branded
LPG cylinder. He can simply store the cylinder once it is empty or he can even destroy it since
xxxx he has paid a deposit for it which answers for the loss or cost of the empty branded LPG
cylinder. Given such fact, what the law manifestly prohibits is the refilling of a branded LPG
Sec. 3. Definition of terms.For the purpose of this Act, the cylinder by a refiller who has no written authority from the brand owner. Apropos, a refiller
following terms shall be construed to mean: cannot and ought not to refill branded LPG cylinders if it has no written authority from the
brand owner.
Illegal trading in petroleum and/or petroleum products
Besides, persuasive are the opinions and pronouncements by the DOE: brand owners
are deemed owners of their duly embossed, stamped and marked LPG cylinders even if these
xxxx are possessed by customers or consumers. The Court recognizes this right pursuant to our
laws, i.e., Intellectual Property Code of the Philippines. Thus the issuance by the DOE Circular
(c) Refilling of liquefied petroleum gas cylinders without authority from No. 2000-05-007,[61] the letter-opinion[62] dated December 9, 2004 of then DOE Secretary
said Bureau, or refilling of another companys or firms cylinders without Vincent S. Perez addressed to Pilipinas Shell, the June 6, 2007 letter[63] of then DOE Secretary
such companys or firms written authorization; (Emphasis supplied.) Raphael P.M. Lotilla to the LPGIA, and DOE Department Circular No. 2007-10-0007[64] on LPG
Cylinder Ownership and Obligations Related Thereto issued on October 13, 2007 by DOE
Secretary Angelo T. Reyes.
As petitioners strongly argue, even if the branded LPG cylinders were indeed owned
by customers, such fact does not authorize Omni to refill these branded LPG cylinders without Fifth. The ownership of the seized branded LPG cylinders, allegedly owned by Omni
written authorization from the brand owners Pilipinas Shell, Petron and Total. In Yao, Sr. v. customers as petitioners adamantly profess, is of no consequence.
People,[57] a case involving criminal infringement of property rights under Sec. 155 of RA
8293,[58] in affirming the courts a quos determination of the presence of probable cause, this The law does not require that the property to be seized should be owned by the
Court held that from Sec. 155.1[59] of RA 8293 can be gleaned that mere unauthorized use of a person against whom the search warrants is directed. Ownership, therefore, is of no
container bearing a registered trademark in connection with the sale, distribution or consequence, and it is sufficient that the person against whom the warrant is directed has
19
control or possession of the property sought to be seized. [65] Petitioners cannot deny that the Contrary to petitioners arguments, a single underfilling constitutes an offense under
seized LPG cylinders were in the possession of Omni, found as they were inside the Omni BP 33, as amended by PD 1865, which clearly criminalizes these offenses. In Perez v. LPG
compound. Refillers Association of the Philippines, Inc.,[68] the Court affirmed the validity of DOE Circular
No. 2000-06-010 which provided penalties on a per cylinder basis for each violation, thus:
In fine, we also note that among those seized by the NBI are 16 LPG cylinders bearing
the embossed brand names of Shellane, Gasul and Totalgaz but were marked as B.P. Blg. 33, as amended, criminalizes illegal trading,
Omnigas. Evidently, this pernicious practice of tampering or changing the appearance of a adulteration, underfilling, hoarding, and overpricing of petroleum
branded LPG cylinder to look like another brand violates the brand owners property rights products. Under this general description of what constitutes criminal acts
as infringement under Sec. 155.1 of RA 8293. Moreover, tampering of LPG cylinders is a mode involving petroleum products, the Circular merely lists the various modes
of perpetrating the criminal offenses under BP 33, as amended, and clearly enunciated under by which the said criminal acts may be perpetrated, namely: no price
DOE Circular No. 2000-06-010 which provided penalties on a per cylinder basis for each display board, no weighing scale, no tare weight or incorrect tare weight
violation. markings, no authorized LPG seal, no trade name, unbranded LPG cylinders,
no serial number, no distinguishing color, no embossed identifying
Foregoing considered, in the backdrop of the quantum of evidence required to markings on cylinder, underfilling LPG cylinders, tampering LPG cylinders,
support a finding of probable cause, we agree with the appellate court and the Office of the and unauthorized decanting of LPG cylinders. These specific acts and
Chief State Prosecutor, which conducted the preliminary investigation, that there exists omissions are obviously within the contemplation of the law, which seeks
probable cause for the violation of Sec. 2 (a) in relation to Sec. 3 (c) of BP 33, as to curb the pernicious practices of some petroleum
amended. Probable cause has been defined as the existence of such facts and circumstances as merchants.[69] (Emphasis supplied.)
would excite belief in a reasonable mind, acting on the facts within the knowledge of the
prosecutor, that the person charged was guilty of the crime for which he was
prosecuted.[66] After all, probable cause need not be based on clear and convincing evidence of Moreover, in denying the motion for reconsideration of the LPG Refillers Association
guilt, as the investigating officer acts upon reasonable beliefprobable cause implies probability of the Philippines, Inc., the Court upheld the basis of said DOE Circular No. 2000-06-010 on
of guilt and requires more than bare suspicion but less than evidence which would justify a the imposition of penalties on a per cylinder basis, thus:
conviction.[67]
Respondents position is untenable. The Circular is not
Probable violation of Sec. 2 (c) of BP 33, as amended confiscatory in providing penalties on a per cylinder basis. Those penalties
do not exceed the ceiling prescribed in Section 4 of B.P. Blg. 33, as
Anent the alleged violation of Sec. 2 (c) in relation to Sec. 4 of BP 33, as amended, amended, which penalizes any person who commits any act [t]herein
petitioners strongly argue that there is no probable cause for said violation based upon an prohibited. Thus, violation on a per cylinder basis falls within the
underfilling of a lone cylinder of the eight branded LPG cylinders refilled during the phrase any act as mandated in Section 4. To provide the same penalty for
test-buy.Besides, they point out that there was no finding of underfilling in any of the filled LPG one who violates a prohibited act in B.P. Blg. 33, as amended, regardless of
cylinders seized during the service of the search warrants. Citing DOEs Bureau of Energy the number of cylinders involved would result in an indiscriminate,
Utilization Circular No. 85-3-348, they maintain that some deviation is allowed from the exact oppressive and impractical operation of B.P. Blg. 33, as amended. The
filled weight. Considering the fact that an isolated underfilling happened in so many LPG equal protection clause demands that all persons subject to such legislation
cylinders filled, petitioners are of the view that such is due to human or equipment error and shall be treated alike, under like circumstances and conditions, both in the
does not in any way constitute deliberate underfilling within the contemplation of the law. privileges conferred and in the liabilities imposed.[70]
Moreover, petitioners cast aspersion on the report and findings of LPG Inspector
Navio of the LPGIA by assailing his independence for being a representative of the major The Court made it clear that a violation, like underfilling, on a per cylinder basis falls
petroleum companies and that the inspection he conducted was made without the presence of within the phrase of any act as mandated under Sec. 4 of BP 33, as amended. Ineluctably, the
any DOE representative or any independent body having technical expertise in determining underfilling of one LPG cylinder constitutes a clear violation of BP 33, as amended.The finding
LPG cylinder underfilling beyond the authorized quantity. of underfilling by LPG Inspector Navio of the LPGIA, as aptly noted by Manila Assistant City
Prosecutor Catalo who conducted the preliminary investigation, was indeed not controverted
Again, we are not persuaded. by petitioners.
20
On the issue of manifest bias and partiality, suffice it to say that aside from the
allegation by petitioners, they have not shown that LPG Inspector Navio is neither an expert Relying on the third paragraph of the above statutory proviso, petitioners argue that
nor qualified to determine underfilling. Besides, it must be noted that the inspection by LPG they cannot be held liable for any perceived violations of BP 33, as amended, since they are
Inspector Navio was conducted in the presence of NBI agents on April 23, 2004 who attested to mere directors of Omni who are not in charge of the management of its business
that fact through their affidavits. Moreover, no rules require and petitioners have not cited any affairs.Reasoning that criminal liability is personal, liability attaches to a person from his
that the inspection be conducted in the presence of DOE representatives. personal act or omission but not from the criminal act or negligence of another. Since Sec. 4 of
BP 33, as amended, clearly provides and enumerates who are criminally liable, which do not
Second Core Issue: Petitioners Liability for Violations include members of the board of directors of a corporation, petitioners, as mere members of
the board of directors who are not in charge of Omnis business affairs, maintain that they
Sec. 4 of BP 33, as amended, provides for the penalties and persons who are cannot be held liable for any perceived violations of BP 33, as amended. To bolster their
criminally liable, thus: position, they attest to being full-time employees of various firms as shown by the Certificates
of Employment[71] they submitted tending to show that they are neither involved in the
day-to-day business of Omni nor managing it. Consequently, they posit that even if BP 33, as
Sec. 4. Penalties. Any person who commits any act herein prohibited amended, had been violated by Omni they cannot be held criminally liable thereof not being in
shall, upon conviction, be punished with a fine of not less than twenty any way connected with the commission of the alleged violations, and, consequently, the
thousand pesos (P20,000) but not more than fifty thousand criminal complaints filed against them based solely on their being members of the board of
pesos (P50,000), or imprisonment of at least two (2) years but not more directors as per the GIS submitted by Omni to SEC are grossly discriminatory.
than five (5) years, or both, in the discretion of the court. In cases of second
and subsequent conviction under this Act, the penalty shall be both fine On this point, we agree with petitioners except as to petitioner Arnel U. Ty who is
and imprisonment as provided herein. Furthermore, the petroleum and/or indisputably the President of Omni.
petroleum products, subject matter of the illegal trading, adulteration,
shortselling, hoarding, overpricing or misuse, shall be forfeited in favor of It may be noted that Sec. 4 above enumerates the persons who may be held liable
the Government: Provided, That if the petroleum and/or petroleum for violations of the law, viz: (1) the president, (2) general manager, (3) managing partner, (4)
products have already been delivered and paid for, the offended party shall such other officer charged with the management of the business affairs of the corporation or
be indemnified twice the amount paid, and if the seller who has not yet juridical entity, or (5) the employee responsible for such violation. A common thread of the
delivered has been fully paid, the price received shall be returned to the first four enumerated officers is the fact that they manage the business affairs of the
buyer with an additional amount equivalent to such price; and in addition, corporation or juridical entity. In short, they are operating officers of a business concern, while
if the offender is an oil company, marketer, distributor, refiller, dealer, the last in the list is self-explanatory.
sub-dealer and other retail outlets, or hauler, the cancellation of his
license.
It is undisputed that petitioners are members of the board of directors of Omni at
the time pertinent. There can be no quibble that the enumeration of persons who may be held
Trials of cases arising from this Act shall be terminated within thirty (30)
liable for corporate violators of BP 33, as amended, excludes the members of the board of
days after arraignment.
directors. This stands to reason for the board of directors of a corporation is generally a policy
making body. Even if the corporate powers of a corporation are reposed in the board of
When the offender is a corporation, partnership, or other juridical person, directors under the first paragraph of Sec. 23[72] of the Corporation Code, it is of common
the president, the general manager, managing partner, or such knowledge and practice that the board of directors is not directly engaged or charged with the
other officer charged with the management of the business affairs running of the recurring business affairs of the corporation. Depending on the powers granted
thereof, or employee responsible for the violation shall be criminally liable; to them by the Articles of Incorporation, the members of the board generally do not concern
in case the offender is an alien, he shall be subject to deportation after themselves with the day-to-day affairs of the corporation, except those corporate officers who
serving the sentence. are charged with running the business of the corporation and are concomitantly members of
the board, like the President. Section 25[73] of the Corporation Code requires the president of a
If the offender is a government official or employee, he shall be perpetually corporation to be also a member of the board of directors.
disqualified from office. (Emphasis supplied.)
21
Thus, the application of the legal maxim expressio unius est exclusio alterius, which
means the mention of one thing implies the exclusion of another thing not mentioned. If a
statute enumerates the thing upon which it is to operate, everything else must necessarily and Petitioners are stockholders of Omni Gas Corporation ("Omni"). They are being suspected of
by implication be excluded from its operation and effect.[74] The fourth officer in the engaging in illegal trading of petroleum products and underfilling of branded LPG cylinders in
enumerated list is the catch-all such other officer charged with the management of the violation of B.P. 33, as amended by P.D. 1865. NBI Agents Marvin De Jemil and Edgardo
business affairs of the corporation or juridical entity which is a factual issue which must be Kawada conducted surveillance operations on Omni. On 15 April 2004, the NBI Agents carried
alleged and supported by evidence. out a test-buy. Using eight branded LPG cylinders from Shell, Petron and Total, they went to
A scrutiny of the GIS reveals that among the petitioners who are members of the Omni for refilling. Omni refilled the cylinders. The NBI agents paid more than P1500. LPG
board of directors are the following who are likewise elected as corporate officers of Omni: (1) Inspector Noel Navio found that the LPG cylinders were without LPG valve seals and one of the
Petitioner Arnel U. Ty (Arnel) as President; (2) petitioner Mari Antonette Ty as Treasurer; and cylinders was actually underfilled.
(3) petitioner Jason Ong as Corporate Secretary. Sec. 4 of BP 33, as amended, clearly indicated
firstly the president of a corporation or juridical entity to be criminally liable for violations of BP
33, as amended. On 28 April 2004, Agent De Jemil obtained a search warrant from Pasig RTC branch 167. The
NBI seized several items from Omni's premises. Subsequently, Agent De Jemil filed his
Evidently, petitioner Arnel, as President, who manages the business affairs of Omni, Complaint-Affidavit before the DOJ. The Assistant City Prosecutor of Pasig found probable
can be held liable for probable violations by Omni of BP 33, as amended. The fact that cause for violation of BP 33. This was later approved by Chief State Prosecutor Jovencito Zuno.
petitioner Arnel is ostensibly the operations manager of Multi-Gas Corporation, a family owned
business, does not deter him from managing Omni as well. It is well-settled that where the
language of the law is clear and unequivocal, it must be taken to mean exactly what it
says.[75] As to the other petitioners, unless otherwise shown that they are situated under the Petitioners appealed the decision to the Secretary of Justice, who later reversed the decision of
catch-all such other officer charged with the management of the business affairs, they may not the Office of the Chief State Prosecutor. NBI Agent De Jemil moved for reconsideration. Denied.
be held liable under BP 33, as amended, for probable violations. Consequently, with the He thus filed a petition for certiorari under Rule 65 with the Court of Appeals.
exception of petitioner Arnel, the charges against other petitioners must perforce be dismissed
or dropped.
The Court of Appeals affirmed the decision of Secretary of Justice. It later reversed itself and
WHEREFORE, premises considered, we PARTIALLY GRANT the instant reinstated the Resolution of the Chief State Prosecutor.
petition. Accordingly, the assailed September 28, 2007 Decision and March 14, 2008 Resolution
of the Court of Appeals in CA-G.R. SP No. 98054
are AFFIRMED withMODIFICATION that petitioners Mari Antonette Ty, Jason Ong, Willy Dy and
Issues:
Alvin Ty are excluded from the two Informations charging probable violations of Batas
Pambansa Bilang 33, as amended. The Joint Resolution dated November 7, 2005 of the Office (1) Whether the petition for certiorari with the Court of Appeals was proper even if Agent De
of the Chief State Prosecutor is modified accordingly. Jemil did not appeal to the Office of the President?
(2) Whether probable cause exists against petitioners for violations of Sec. 2 (a) and (c) of BP
33, as amended?
Held:(1) YES. The determination of probable cause by the public prosecutor, and, later on, by
SO ORDERED.
the Secretary of Justice, is subject to judicial review where it is established that grave abuse of
discretion tainted the determination. The aggrieved party need not resort to the Office of the
President before availing of judicial remedies because the Secretary of Justice is an alter ego of
Facts:
the President who may opt to exercise or not to exercise his or her power of review over the
formers determination in criminal investigation cases. Also, under the doctrine of qualified
22
political agency, the determination of probable cause by the Secretary of Justice is presumably
that of the Chief Executive unless disapproved or reprobated by the latter.
(2) YES. The test-buy conducted on 15 April 2004 tends to show that Omni illegally refilled the
eight branded cylinders. Such act is a clear violation of Sec. 2 (a), in relation to Secs. 3 (c) and 4
of BP 33, as amended.
Omni has no authority to refill LPG cylinders as shown by the certifications provided by Shell,
Petron and Total. The seized items also show that Omni has no authority to refill the cylinders.
It shows that Omni really refilled branded cylinders without authorization. Omnis
unauthorized refilling of branded LPG cylinders, contrary to Sec. 2 (a) in relation to Sec. 3 (c) of
BP 33, as amended.
Granting arguendo that the customers already owned the LPG cylinders, such fact does give
Omni authority to refill the cylinders without authorization from the brand owners. Only the
duly authorized dealers and refillers of the brand owners may refill the branded LPG cylinders.
The offense of refilling a branded LPG cylinder without the written consent of the brand owner
constitutes the offense regardless of the buyer or possessor of the branded LPG cylinder.
Petitioner's contention that they are not liable because the underfilling that took place during
the test-buy is an isolated event is UNTENABLE. A single underfilling under BP 33 is already a
criminal act.
(3) Only Arnel Ty, as President of Omni, is liable. The other petitioners, who are members of
Omni's Board of Directors, are not liable. Sec. 4 of BP 33 enumerates the persons who may be
held liable, viz: (1) the president, (2) general manager, (3) managing partner, (4) such other
officer charged with the management of the business affairs of the corporation or juridical
entity, or (5) the employee responsible for such violation. The Board of Directors is primarily a
policy-making body of the Corporation who doesn't concern itself with day-to-day operations.
23
Pharmawealth vs. Pfizer 9. Sometime in January and February 2003, complainants came to know
that respondent [herein petitioner] submitted bids for the supply of
December 19, 2010 Sulbactam Ampicillin to several hospitals without the consent of
complainants and in violation of the complainants' intellectual property
rights. x x x
DECISION
xxxx
10. Complainants thus wrote the above hospitals and demanded that the
latter immediately cease and desist from accepting bids for the supply [of]
PERALTA, J.: Sulbactam Ampicillin or awarding the same to entities other than
complainants. Complainants, in the same letters sent through undersigned
Before the Court is a petition for review on certiorari seeking to annul and set aside the counsel, also demanded that respondent immediately withdraw its bids to
Resolutions dated January 18, 2005[1] and April 11, 2005[2] by the Court of Appeals (CA) in supply Sulbactam Ampicillin.
CA-G.R. SP No. 82734.
11. In gross and evident bad faith, respondent and the hospitals named in
The instant case arose from a Complaint[3] for patent infringement filed against petitioner Phil paragraph 9 hereof, willfully ignored complainants' just, plain and valid
Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the demands, refused to comply therewith and continued to infringe the
Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO). The Complaint alleged as Patent, all to the damage and prejudice of complainants. As registered
follows: owner of the Patent, Pfizer is entitled to protection under Section 76 of the
xxxx IP Code.
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the
Patent) which was issued by this Honorable Office on July 16, 1987. The x x x x[4]
patent is valid until July 16, 2004. The claims of this Patent are directed to a Respondents prayed for permanent injunction, damages and the forfeiture and impounding of
method of increasing the effectiveness of a beta-lactam antibiotic in a the alleged infringing products. They also asked for the issuance of a temporary restraining
mammalian subject, which comprises co-administering to said subject a order and a preliminary injunction that would prevent herein petitioner, its agents,
beta-lactam antibiotic effectiveness increasing amount of a compound of representatives and assigns, from importing, distributing, selling or offering the subject
the formula IA. The scope of the claims of the Patent extends to a product for sale to any entity in the Philippines.
combination of penicillin such as ampicillin sodium and beta-lactam In an Order[5] dated July 15, 2003 the BLA-IPO issued a preliminary injunction which was
antibiotic like sulbactam sodium. effective for ninety days from petitioner's receipt of the said Order.
7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium Prior to the expiration of the ninety-day period, respondents filed a Motion for Extension of
(hereafter Sulbactam Ampicillin). Ampicillin sodium is a specific example of Writ of Preliminary Injunction[6] which, however, was denied by the BLA-IPO in an
the broad beta-lactam antibiotic disclosed and claimed in the Patent. It is Order[7] dated October 15, 2003.
the compound which efficacy is being enhanced by co-administering the
same with sulbactam sodium. Sulbactam sodium, on the other hand, is a Respondents filed a Motion for Reconsideration but the same was also denied by the BLA-IPO
specific compound of the formula IA disclosed and claimed in the Patent. in a Resolution[8] dated January 23, 2004.
8. Pfizer is marketing Sulbactam Ampicillin under the brand name Unasyn. Respondents then filed a special civil action for certiorari with the CA assailing the October 15,
Pfizer's Unasyn products, which come in oral and IV formulas, are covered 2003 and January 23, 2004 Resolutions of the BLA-IPO. Respondents also prayed for the
by Certificates of Product Registration (CPR) issued by the Bureau of Food issuance of a preliminary mandatory injunction for the reinstatement and extension of the writ
and Drugs (BFAD) under the name of complainants. The sole and exclusive of preliminary injunction issued by the BLA-IPO.
distributor of Unasyn products in the Philippines is Zuellig Pharma
Corporation, pursuant to a Distribution Services Agreement it executed While the case was pending before the CA, respondents filed a Complaint[9] with the Regional
with Pfizer Phils. on January 23, 2001. Trial Court (RTC) of Makati City for infringement and unfair competition with damages against
herein petitioner. In said case, respondents prayed for the issuance of a temporary restraining
order and preliminary injunction to prevent herein petitioner from importing, distributing,
24
selling or offering for sale sulbactam ampicillin products to any entity in the
Philippines. Respondents asked the trial court that, after trial, judgment be rendered awarding c) Is there forum shopping when a party files two actions with two
damages in their favor and making the injunction permanent. seemingly different causes of action and yet pray for the same relief?[16]
On August 24, 2004, the RTC of Makati City issued an Order[10] directing the issuance of a
temporary restraining order conditioned upon respondents' filing of a bond. In the first issue raised, petitioner argues that respondents' exclusive right to monopolize the
subject matter of the patent exists only within the term of the patent. Petitioner claims that
In a subsequent Order[11] dated April 6, 2005, the same RTC directed the issuance of a writ of since respondents' patent expired on July 16, 2004, the latter no longer possess any right of
preliminary injunction prohibiting and restraining [petitioner], its agents, representatives and monopoly and, as such, there is no more basis for the issuance of a restraining order or
assigns from importing, distributing or selling Sulbactam Ampicillin products to any entity in injunction against petitioner insofar as the disputed patent is concerned.
the Philippines.
The Court agrees.
Meanwhile, on November 16, 2004, petitioner filed a Motion to Dismiss [12] the petition filed
with the CA on the ground of forum shopping, contending that the case filed with the RTC has Section 37 of Republic Act No. (RA) 165,[17] which was the governing law at the time of the
the same objective as the petition filed with the CA, which is to obtain an injunction prohibiting issuance of respondents' patent, provides:
petitioner from importing, distributing and selling Sulbactam Ampicillin products.
Section 37. Rights of patentees. A patentee shall have the exclusive right
On January 18, 2005, the CA issued its questioned Resolution[13] approving the bond posted by to make, use and sell the patented machine, article or product, and to use
respondents pursuant to the Resolution issued by the appellate court on March 23, 2004 which the patented process for the purpose of industry or commerce, throughout
directed the issuance of a temporary restraining order conditioned upon the filing of a bond. the territory of the Philippines for the term of the patent; and such making,
On even date, the CA issued a temporary restraining order[14] which prohibited petitioner from using, or selling by any person without the authorization of the patentee
importing, distributing, selling or offering for sale Sulbactam Ampicillin products to any hospital constitutes infringement of the patent.[18]
or to any other entity in the Philippines, or from infringing Pfizer Inc.'s Philippine Patent No.
21116 and impounding all the sales invoices and other documents evidencing sales by
[petitioner] of Sulbactam Ampicillin products. It is clear from the above-quoted provision of law that the exclusive right of a patentee to
make, use and sell a patented product, article or process exists only during the term of the
On February 7, 2005, petitioner again filed a Motion to Dismiss[15] the case for being moot and patent. In the instant case, Philippine Letters Patent No. 21116, which was the basis of
academic, contending that respondents' patent had already lapsed. In the same manner, respondents in filing their complaint with the BLA-IPO, was issued on July 16, 1987. This fact
petitioner also moved for the reconsideration of the temporary restraining order issued by the was admitted by respondents themselves in their complaint. They also admitted that the
CA on the same basis that the patent right sought to be protected has been extinguished due validity of the said patent is until July 16, 2004, which is in conformity with Section 21 of RA
to the lapse of the patent license and on the ground that the CA has no jurisdiction to review 165, providing that the term of a patent shall be seventeen (17) years from the date of
the order of the BLA-IPO as said jurisdiction is vested by law in the Office of the Director issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an admission, verbal
General of the IPO. or written, made by a party in the course of the proceedings in the same case, does not require
proof and that the admission may be contradicted only by showing that it was made through
On April 11, 2005, the CA rendered its presently assailed Resolution denying the Motion to palpable mistake or that no such admission was made. In the present case, there is no dispute
Dismiss, dated November 16, 2004, and the motion for reconsideration, as well as Motion to as to respondents' admission that the term of their patent expired on July 16, 2004. Neither is
Dismiss, both dated February 7, 2005. there evidence to show that their admission was made through palpable mistake. Hence,
contrary to the pronouncement of the CA, there is no longer any need to present evidence on
Hence, the present petition raising the following issues: the issue of expiration of respondents' patent.
a) Can an injunctive relief be issued based on an action of patent On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004,
infringement when the patent allegedly infringed has already lapsed? respondents no longer possess the exclusive right to make, use and sell the articles or products
covered by Philippine Letters Patent No. 21116.
b) What tribunal has jurisdiction to review the decisions of the Director of
Legal Affairs of the Intellectual Property Office?
25
Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a writ It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual Property Code
of preliminary injunction, viz: of the Philippines, which is the presently prevailing law, the Director General of the IPO
exercises exclusive appellate jurisdiction over all decisions rendered by the Director of the
(a) That the applicant is entitled to the relief demanded, and the BLA-IPO. However, what is being questioned before the CA is not a decision, but an
whole or part of such relief consists in restraining the commission or interlocutory order of the BLA-IPO denying respondents' motion to extend the life of the
continuance of the acts complained of, or in requiring the performance of preliminary injunction issued in their favor.
an act or acts, either for a limited period or perpetually;
RA 8293 is silent with respect to any remedy available to litigants who intend to question an
(b) That the commission, continuance or non-performance of the interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and
act or acts complained of during the litigation would probably work Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property
injustice to the applicant; or Rights simply provides that interlocutory orders shall not be appealable. The said Rules and
Regulations do not prescribe a procedure within the administrative machinery to be followed
(c) That a party, court, or agency or a person is doing, in assailing orders issued by the BLA-IPO pending final resolution of a case filed with them.
threatening, or attempting to do, or is procuring or suffering to be done, Hence, in the absence of such a remedy, the provisions of the Rules of Court shall apply in a
some act or acts probably in violation of the rights of the applicant suppletory manner, as provided under Section 3, Rule 1 of the same Rules and Regulations.
respecting the subject of the action or proceeding, and tending to render Hence, in the present case, respondents correctly resorted to the filing of a special civil action
the judgment ineffectual. for certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal
therefrom and they have no other plain, speedy and adequate remedy in the ordinary course
of law. This is consistent with Sections 1[20] and 4,[21]Rule 65 of the Rules of Court, as amended.
In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide that if the In the first place, respondents' act of filing their complaint originally with the BLA-IPO is already
matter is of extreme urgency and the applicant will suffer grave injustice and irreparable injury, in consonance with the doctrine of primary jurisdiction.
a temporary restraining order may be issued ex parte.
This Court has held that:
From the foregoing, it can be inferred that two requisites must exist to warrant the issuance of
an injunctive relief, namely: (1) the existence of a clear and unmistakable right that must be
protected; and (2) an urgent and paramount necessity for the writ to prevent serious
[i]n cases involving specialized disputes, the practice has been to refer the
damage.[19]
same to an administrative agency of special competence in observance of
the doctrine of primary jurisdiction. The Court has ratiocinated that it
In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution approving
cannot or will not determine a controversy involving a question which is
the bond filed by respondents, the latter no longer had a right that must be protected,
within the jurisdiction of the administrative tribunal prior to the resolution
considering that Philippine Letters Patent No. 21116 which was issued to them already expired
of that question by the administrative tribunal, where the question
on July 16, 2004. Hence, the issuance by the CA of a temporary restraining order in favor of the
demands the exercise of sound administrative discretion requiring the
respondents is not proper.
special knowledge, experience and services of the administrative tribunal
to determine technical and intricate matters of fact, and a uniformity of
In fact, the CA should have granted petitioner's motion to dismiss the petition
ruling is essential to comply with the premises of the regulatory statute
for certiorari filed before it as the only issue raised therein is the propriety of extending the
administered. The objective of the doctrine of primary jurisdiction is to
writ of preliminary injunction issued by the BLA-IPO. Since the patent which was the basis for
guide a court in determining whether it should refrain from exercising its
issuing the injunction, was no longer valid, any issue as to the propriety of extending the life of
jurisdiction until after an administrative agency has determined some
the injunction was already rendered moot and academic.
question or some aspect of some question arising in the proceeding before
the court. It applies where the claim is originally cognizable in the courts
As to the second issue raised, the Court, is not persuaded by petitioner's argument that,
and comes into play whenever enforcement of the claim requires the
pursuant to the doctrine of primary jurisdiction, the Director General of the IPO and not the CA
resolution of issues which, under a regulatory scheme, has been placed
has jurisdiction to review the questioned Orders of the Director of the BLA-IPO.
within the special competence of an administrative body; in such case, the
26
judicial process is suspended pending referral of such issues to the The elements of forum shopping are: (a) identity of parties, or at least such parties that
administrative body for its view.[22] represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed
for, the reliefs being founded on the same facts; (c) identity of the two preceding particulars,
such that any judgment rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration.[27]
Based on the foregoing, the Court finds that respondents' initial filing of their complaint with
the BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary
There is no question as to the identity of parties in the complaints filed with the IPO and the
jurisdiction owing to the fact that the determination of the basic issue of whether petitioner
RTC.
violated respondents' patent rights requires the exercise by the IPO of sound administrative
discretion which is based on the agency's special competence, knowledge and experience.
Respondents argue that they cannot be held guilty of forum shopping because their complaints
However, the propriety of extending the life of the writ of preliminary injunction issued by the are based on different causes of action as shown by the fact that the said complaints are
BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the founded on violations of different patents.
jurisdiction of the said administrative agency, particularly that of its Director General. The The Court is not persuaded.
resolution of this issue which was raised before the CA does not demand the exercise by the
IPO of sound administrative discretion requiring special knowledge, experience and services in Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or omission by which
determining technical and intricate matters of fact. It is settled that one of the exceptions to a party violates a right of another. In the instant case, respondents' cause of action in their
the doctrine of primary jurisdiction is where the question involved is purely legal and will complaint filed with the IPO is the alleged act of petitioner in importing, distributing, selling or
ultimately have to be decided by the courts of justice.[23] This is the case with respect to the offering for sale Sulbactam Ampicillin products, acts that are supposedly violative of
issue raised in the petition filed with the CA. respondents' right to the exclusive sale of the said products which are covered by the latter's
patent. However, a careful reading of the complaint filed with the RTC of Makati City would
show that respondents have the same cause of action as in their complaint filed with the IPO.
They claim that they have the exclusive right to make, use and sell Sulbactam Ampicillin
Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do not products and that petitioner violated this right. Thus, it does not matter that the patents upon
provide for a procedural remedy to question interlocutory orders issued by the BLA-IPO. In this which the complaints were based are different. The fact remains that in both complaints the
regard, it bears to reiterate that the judicial power of the courts, as provided for under the rights violated and the acts violative of such rights are identical.
Constitution, includes the authority of the courts to determine in an appropriate action the
validity of the acts of the political departments.[24] Judicial power also includes the duty of the In fact, respondents seek substantially the same reliefs in their separate complaints with the
courts of justice to settle actual controversies involving rights which are legally demandable IPO and the RTC for the purpose of accomplishing the same objective.
and enforceable, and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the It is settled by this Court in several cases that the filing by a party of two apparently different
Government.[25] Hence, the CA, and not the IPO Director General, has jurisdiction to determine actions but with the same objective constitutes forum shopping. [28] The Court discussed this
whether the BLA-IPO committed grave abuse of discretion in denying respondents' motion to species of forum shopping as follows:
extend the effectivity of the writ of preliminary injunction which the said office earlier issued. Very simply stated, the original complaint in the court a
Lastly, petitioner avers that respondents are guilty of forum shopping for having filed separate quo which gave rise to the instant petition was filed by the buyer
actions before the IPO and the RTC praying for the same relief. (herein private respondent and his predecessors-in-interest)
against the seller (herein petitioners) to enforce the alleged
The Court agrees. perfected sale of real estate. On the other hand, the complaint in
the Second Case seeks to declare such purported sale involving the
Forum shopping is defined as the act of a party against whom an adverse judgment has been same real property as unenforceable as against the Bank, which is
rendered in one forum, of seeking another (and possibly favorable) opinion in another forum the petitioner herein. In other words, in the Second Case, the
(other than by appeal or the special civil action of certiorari), or the institution of two (2) or majority stockholders, in representation of the Bank, are seeking to
more actions or proceedings grounded on the same cause on the supposition that one or the accomplish what the Bank itself failed to do in the original case in
other court would make a favorable disposition.[26] the trial court. In brief, the objective or the relief being sought,
though worded differently, is the same, namely, to enable the
27
petitioner Bank to escape from the obligation to sell the property that respondent has no right whatsoever
to respondent.[29] over complainant's patent;
In the instant case, the prayer of respondents in their complaint filed with the IPO is as follows: (1) temporarily restraining Pharmawealth, its agents,
representatives and assigns from importing, distributing, selling
A. Immediately upon the filing of this action, issue an ex parte order (a) or offering for sale infringing sulbactam ampicillin products to
temporarily restraining respondent, its agents, representatives and assigns various government and private hospitals or to any other entity
from importing, distributing, selling or offering for sale Sulbactam Ampicillin in the Philippines, or from otherwise infringing Pfizer Inc.'s
products to the hospitals named in paragraph 9 of this Complaint or to any Philippine Patent No. 26810.
other entity in the Philippines, or from otherwise infringing Pfizer Inc.'s
Philippine Patent No. 21116; and (b) impounding all the sales invoices and (2) impounding all the sales invoices and
other documents evidencing sales by respondent of Sulbactam Ampicillin other documents evidencing sales
products. by pharmawealth of sulbactam
ampicillin products; and
B. After hearing, issue a writ of preliminary injunction enjoining respondent,
its agents, representatives and assigns from importing, distributing, selling (3) disposing of the infringing goods outside
or offering for sale Sulbactam Ampicillin products to the hospitals named in the channels of commerce.
paragraph 9 of the Complaint or to any other entity in the Philippines, or
from otherwise infringing Pfizer Inc.'s Philippine Patent No. 21116; and (b) After hearing, issue a writ of preliminary injunction:
(2) impounding all the sales invoices and It bears to reiterate that what is truly important to consider in determining whether forum
other documents evidencing sales shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks
by Pharmawealth of sulbactam different courts and/or administrative agencies to rule on the same or related causes and/or to
ampicillin products; and grant the same or substantially the same reliefs, in the process creating the possibility of
conflicting decisions being rendered by the different fora upon the same issue.[34]
(3) disposing of the infringing goods outside the channels of
commerce. Thus, the Court agrees with petitioner that respondents are indeed guilty of forum shopping.
(c) After trial, render judgment: Jurisprudence holds that if the forum shopping is not considered willful and deliberate, the
subsequent case shall be dismissed without prejudice, on the ground of either litis
(1) finding Pharmawealth to have pendentia or res judicata.[35] However, if the forum shopping is willful and deliberate, both (or
infringed Patent No. 26810 and all, if there are more than two) actions shall be dismissed with prejudice. [36] In the present case,
declaring Pharmawealth to have no right the Court finds that respondents did not deliberately violate the rule on non-forum shopping.
whatsoever over plaintiff's patent; Respondents may not be totally blamed for erroneously believing that they can file separate
actions simply on the basis of different patents. Moreover, in the suit filed with the RTC of
(2) ordering Pharmawealth to pay plaintiffs Makati City, respondents were candid enough to inform the trial court of the pendency of the
the following amounts: complaint filed with the BLA-IPO as well as the petition for certiorari filed with the CA. On
(i) at least P3,000,000.00 as actual these bases, only Civil Case No. 04-754 should be dismissed on the ground of litis pendentia.
damages;
(ii) P500,000.00 as attorney's fees and P1,000,000.00 as litigation WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions of the Court of
expenses; Appeals, dated January 18, 2005 and April 11, 2005, in CA-G.R. No. 82734,
(iii) P3,000,000.00 as exemplary are REVERSED and SET ASIDE. The petition for certiorari filed with the Court of Appeals
damages; and is DISMISSED for being moot and academic.
(iv) costs of this suit.
(3) ordering the condemnation, seizure or Civil Case No. 04-754, filed with the Regional Trial Court of Makati City, Branch 138, is
forfeiture of Pharmawealth's likewise DISMISSED on the ground of litis pendentia.
infringing goods or products,
wherever they may be found, SO ORDERED.
including the materials and
implements used in the Facts: Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin. It is
commission of infringement, to be marketed under the brand name Unasyn. Sometime in January and February 2003, Pfizer
disposed of in such manner as discovered that Pharmawealth submitted bids for the supply of Sulbactam Ampicillin to several
may be deemed appropriate by hospitals without the Pfizers consent. Pfizer then demanded that the hospitals cease and
this Honorable Court; and desist from accepting such bids. Pfizer also demanded that Pharmawealth immediately
withdraw its bids to supply Sulbactam Ampicillin. Pharmawealth and the hospitals ignored the
(4) making the injunction permanent.[33] demands.
Pfizer then filed a complaint for patent infringement with a prayer for permanent injunction
It is clear from the foregoing that the ultimate objective which respondents seek to achieve in and forfeiture of the infringing products. A preliminary injunction effective for 90 days was
their separate complaints filed with the RTC and the IPO, is to ask for damages for the alleged granted by the IPOs Bureau of Legal Affairs (IPO-BLA). Upon expiration, a motion for extension
29
filed by Pfizer was denied. Pfizer filed a Special Civil Action for Certiorari in the Court of Appeals been rendered in one forum, of seeking another (and possibly favorable) opinion in another
(CA) assailing the denial. forum (other than by appeal or the special civil action of certiorari), or the institution of two (2)
or more actions or proceedings grounded on the same cause on the supposition that one or
While the case was pending in the CA, Pfizer filed with the Regional Trial Court of Makati (RTC) the other court would make a favorable disposition.
a complaint for infringement and unfair competition, with a prayer for injunction. The RTC
issued a temporary restraining order, and then a preliminary injunction. The elements of forum shopping are: (a) identity of parties, or at least such parties that
represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed
Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum shopping. for, the reliefs being founded on the same facts; (c) identity of the two preceding particulars,
Nevertheless, the CA issued a temporary restraining order. Pharmawealth again filed a motion such that any judgment rendered in the other action will, regardless of which party is
to dismiss, alleging that the patent, the main basis of the case, had already lapsed, thus making successful, amount to res judicata in the action under consideration. This instance meets these
the case moot, and that the CA had no jurisdiction to review the order of the IPO-BLA because elements.
this was granted to the Director General. The CA denied all the motions. Pharmawealth filed a
petition for review on Certiorari with the Supreme Court. The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the rights
allegedly violated and the acts allegedly violative of such rights are identical, regardless of
Issues: whether the patents on which the complaints were based are different. In both cases, the
ultimate objective of Pfizer was to ask for damages and to permanently prevent Pharmawealth
a) Can an injunctive relief be issued based on an action of patent infringement when the patent from selling the contested products. Relevantly, the Supreme Court has decided that the filing
allegedly infringed has already lapsed? of two actions with the same objective, as in this instance, constitutes forum shopping.
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the
Intellectual Property Office? Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a
c) Is there forum shopping when a party files two actions with two seemingly different causes decision in one case will necessarily amount to res judicata in the other action.
of action and yet pray for the same relief?
Held:
a) No. The provision of R.A. 165, from which the Pfizers patent was based, clearly states that
"[the] patentee shall have the exclusive right to make, use and sell the patented machine,
article or product, and to use the patented process for the purpose of industry or commerce,
throughout the territory of the Philippines for the term of the patent; and such making, using,
or selling by any person without the authorization of the patentee constitutes infringement of
the patent."
Clearly, the patentees exclusive rights exist only during the term of the patent. Since the
patent was registered on 16 July 1987, it expired, in accordance with the provisions of R.A. 165,
after 17 years, or 16 July 2004. Thus, after 16 July 2004, Pfizer no longer possessed the
exclusive right to make, use, and sell the products covered by their patent. The CA was wrong
in issuing a temporary restraining order after the cut-off date.
b) According to IP Code, the Director General of the IPO exercises exclusive jurisdiction over
decisions of the IPO-BLA. The question in the CA concerns an interlocutory order, and not a
decision. Since the IP Code and the Rules and Regulations are bereft of any remedy regarding
interlocutory orders of the IPO-BLA, the only remedy available to Pfizer is to apply the Rules
and Regulations suppletorily. Under the Rules, a petition for certiorari to the CA is the proper
remedy. This is consistent with the Rules of Court. Thus, the CA had jurisdiction.
c) Yes. Forum shopping is defined as the act of a party against whom an adverse judgment has
30
After an exchange of pleadings, on April 28, 2006, Director Estrellita Beltran-Abelardo (Director
Abelardo) of the IPO-BLA issued Decision No. 2006-24[5] (BLA decision), the dispositive portion
BERRIS AGRICULTURAL CO., INC. vs. NORVY ABYADANG. of which reads
G.R. No. 183404. October 13, 2010
SO ORDERED.[6]
The antecedents
On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), with business address in
Barangay Masiit, Calauan, Laguna, filed with the IPO Bureau of Legal Affairs (IPO-BLA) a IN VIEW OF THE FOREGOING, the Motion for Reconsideration
Verified Notice of Opposition[4] against the mark under application allegedly because NS D-10 filed by the Respondent-Applicant is hereby DENIED FOR LACK OF
PLUS is similar and/or confusingly similar to its registered trademark D-10 80 WP, also used for MERIT. Consequently, Decision No. 2006-24 dated April 28, 2006 STANDS.
Fungicide (Class 5) with active ingredient 80% Mancozeb. The opposition was docketed as IPC
No. 14-2005-00099.
31
Let the filewrapper of the trademark NS D-10 PLUS subject respondents trademark D-10 80 WP; 2) respondent failed to establish its
matter under consideration be forwarded to the Bureau of Trademarks for ownership of the mark D-10 80 WP and 3) respondents trademark
appropriate action in accordance with this Resolution. registration for D-10 80 WP may be cancelled in the present case to avoid
multiplicity of suits.
SO ORDERED.[8]
WHEREFORE, the petition is GRANTED. The decision dated July
20, 2007 of the IPO Director General in Appeal No. 14-06-13 (IPC No.
14-2005-00099) is REVERSED and SET ASIDE, and a new one is entered
Aggrieved, Abyadang filed an appeal on August 22, 2006 with the Office of the Director General,
giving due course to petitioners application for registration of the mark NS
Intellectual Property Philippines (IPPDG), docketed as Appeal No. 14-06-13.
D-10 PLUS, and canceling respondents trademark registration for D-10 80
WP.
With the filing of the parties respective memoranda, Director General Adrian S. Cristobal, Jr. of
the IPPDG rendered a decision dated July 20, 2007,[9] ruling as follows
SO ORDERED.[12]
Therefore, Berris, as prior user and prior registrant, is the owner of the mark D-10 80
Based on their proffered pieces of evidence, both Berris and Abyadang claim to be
WP. As such, Berris has in its favor the rights conferred by Section 147 of R.A. No. 8293, which
the prior user of their respective marks.
provides
34
Now, we confront the question, Is Abyadangs mark NS D-10 PLUS confusingly similar using the same dosage and manner of application. They also belong to the same classification
to that of Berris D-10 80 WP such that the latter can rightfully prevent the IPO registration of of goods under R.A. No. 8293. Both depictions of D-10, as found in both marks, are similar in
the former? size, such that this portion is what catches the eye of the purchaser. Undeniably, the likelihood
of confusion is present.
We answer in the affirmative.
This likelihood of confusion and mistake is made more manifest when the Holistic
According to Section 123.1(d) of R.A. No. 8293, a mark cannot be registered if it is Test is applied, taking into consideration the packaging, for both use the same type of material
identical with a registered mark belonging to a different proprietor with an earlier filing or (foil type) and have identical color schemes (red, green, and white); and the marks are both
priority date, with respect to: (1) the same goods or services; (2) closely related goods or predominantly red in color, with the same phrase BROAD SPECTRUM FUNGICIDE written
services; or (3) near resemblance of such mark as to likely deceive or cause confusion. underneath.
In determining similarity and likelihood of confusion, jurisprudence has developed Considering these striking similarities, predominantly the D-10, the buyers of both
teststhe Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the products, mainly farmers, may be misled into thinking that NS D-10 PLUS could be an upgraded
similarity of the prevalent or dominant features of the competing trademarks that might cause formulation of the D-10 80 WP.
confusion, mistake, and deception in the mind of the purchasing public. Duplication or
imitation is not necessary; neither is it required that the mark sought to be registered suggests
an effort to imitate. Given more consideration are the aural and visual impressions created by
the marks on the buyers of goods, giving little weight to factors like prices, quality, sales outlets, Moreover, notwithstanding the finding of the IPPDG that the D-10 is a fanciful
and market segments.[43] component of the trademark, created for the sole purpose of functioning as a trademark, and
does not give the name, quality, or description of the product for which it is used, nor does it
describe the place of origin, such that the degree of exclusiveness given to the mark is closely
restricted,[46] and considering its challenge by Abyadang with respect to the meaning he has
In contrast, the Holistic or Totality Test necessitates a consideration of the entirety of given to it, what remains is the fact that Berris is the owner of the mark D-10 80 WP, inclusive
the marks as applied to the products, including the labels and packaging, in determining of its dominant feature D-10, as established by its prior use, and prior registration with the
confusing similarity. The discerning eye of the observer must focus not only on the IPO. Therefore, Berris properly opposed and the IPO correctly rejected Abyadangs application
predominant words but also on the other features appearing on both labels so that the for registration of the mark NS D-10 PLUS.
observer may draw conclusion on whether one is confusingly similar to the other. [44]
WHEREFORE, the petition is GRANTED. The assailed Decision dated April 14, 2008
and Resolution dated June 18, 2008 of the Court of Appeals in CA-G.R. SP No. 99928
are REVERSED and SET ASIDE. Accordingly, the Decision No. 2006-24 dated April 28, 2006 and
the Resolution No. 2006-09(D) dated August 2, 2006 in IPC No. 14-2005-00099, and the
Decision dated July 20, 2007 in Appeal No. 14-06-13 are REINSTATED. Costs against
respondent.
SO ORDERED.
FACTS: Abyadang filed a trademark application with the IPO for the mark "NS D-10 PLUS" for
use in connection with Fungicide. Berris Agricultural Co., Inc. filed an opposition against the
trademark citing that it is confusingly similar with their trademark, "D-10 80 WP" which is also
used for Fungicide also with the same active ingredient.
The IPO ruled in favor of Berries but on appeal with the CA, the CA ruled in favor of Abyadang.
RULING:
Yes. The SC found that both products have the component D-10 as their ingredient and that it
is the dominant feature in both their marks. Applying the Dominancy Test, Abyadang's product
is similar to Berris' and that confusion may likely to occur especially that both in the same type
of goods. Also using the Holistic Test, it was more obvious that there is likelihood of confusion
in their packaging and color schemes of the marks. The SC states that buyers would think that
Abyadang's product is an upgrade of Berris'.
36
GLOBAL BUSINESS HOLDINGS, INC. (formerly Global Business Bank, Inc.), undertook to pay Surecomp professional services, which included on-site support and
development of interfaces, and annual maintenance fees for five (5) subsequent anniversaries,
Vs and committed to purchase one (1) or two (2) Remote Access solutions at discounted prices. In
a separate transaction, ABC requested Surecomp to purchase on its behalf a software called
SURECOMP SOFTWARE, B.V
MF Cobol Runtime with a promise to reimburse its cost. Notwithstanding the delivery of the
product and the services provided, Global failed to pay and comply with its obligations under
the agreement. Thus, Surecomp demanded payment of actual damages amounting to
US$319,955.00 and an additional amount of US$227,610.00 for Globals unilateral
pretermination of the agreement, exemplary damages, attorneys fees and costs of suit.[6]
DECISION
Instead of filing an answer, Global filed a motion to dismiss based on two grounds: (1) that
NACHURA, J.: Surecomp had no capacity to sue because it was doing business in the Philippines without a
license; and (2) that the claim on which the action was founded was unenforceable under the
Intellectual Property Code of the Philippines.[7]
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,
assailing the Decision[1] dated May 5, 2006 and the Resolution[2] dated July 10, 2006 of the On the first ground, Global argued that the contract entered into was not an isolated
Court of Appeals (CA) in CA-G.R. SP No. 75524. transaction since the contract was for a period of 20 years. Furthermore, Global stressed that it
could not be held accountable for any breach as the agreement was entered into between
Surecomp and ABC. It had not, in any manner, taken part in the negotiation and execution of
the agreement but merely took over the operations of ABC as a result of the merger. On the
The facts of the case are as follows: second ground, Global averred that the agreement, being a technology transfer arrangement,
failed to comply with Sections 87 and 88 of the Intellectual Property Code of the Philippines.[8]
On March 29, 1999, respondent Surecomp Software, B.V. (Surecomp), a foreign corporation
duly organized and existing under the laws of the Netherlands, entered into a software license In the interim, Global filed a motion for leave to serve written interrogatories to Surecomp in
agreement with Asian Bank Corporation (ABC), a domestic corporation, for the use of its IMEX preparation for the hearing on the motion to dismiss, attaching thereto its written
Software System (System) in the banks computer system for a period of twenty (20) years.[3] interrogatories.
In July 2000, ABC merged with petitioner Global Business Holdings, Inc. (Global), [4] with Global After an exchange of pleadings on the motions filed by Global, on June 18, 2002, the RTC
as the surviving corporation. When Global took over the operations of ABC, it found the issued an Order,[9] the pertinent portions of which read:
System unworkable for its operations, and informed Surecomp of its decision to discontinue
with the agreement and to stop further payments thereon. Consequently, for failure of Global
to pay its obligations under the agreement despite demands, Surecomp filed a complaint for
breach of contract with damages before the Regional Trial Court (RTC) of Makati. The case was After a thorough and careful deliberation of the respective arguments
docketed as Civil Case No. 01-1278.[5] advanced by the parties in support of their positions in these two (2)
incidents, and since it cannot be denied that there is indeed a contract
entered into between the plaintiff [Surecomp] and the defendant [Global],
the latter as a successor in interest of the merging corporation Asian Bank,
In its complaint, Surecomp alleged that it is a foreign corporation not doing business in defendant [Global] is estopped from denying plaintiffs
the Philippines and is suing on an isolated transaction. Pursuant to the agreement, it installed [Surecomps] capacity to sue it for alleged breach of that contract with
the System in ABCs computers for a consideration of US$298,000.00 as license fee. ABC also damages. Its argument that it was not the one who actually contracted
37
with the plaintiff [Surecomp] as it was the merging Asian Bank which did, is
of no moment as it does not relieve defendant Global Bank of its
contractual obligation under the Agreement on account of its undertaking
under it:
Surecomp moved for partial reconsideration, praying for an outright denial of the motion to
dismiss, while Global filed a motion for reconsideration. [11]
It appearing however that the second ground relied upon by the defendant SO ORDERED.[13]
[Global], i.e., that the cause of action of the plaintiff is anchored on an
unenforceable contract under the provision of the Intellectual Property
Code, will require a hearing before the motion to dismiss can be resolved
and considering the established jurisprudence in this jurisdiction, that
availment of mode of discovery by any of the parties to a litigation, shall be
In partially modifying the first assailed Order, the RTC ratiocinated, viz.:
liberally construed to the end that the truth of the controversy on hand,
shall be ascertained at a less expense with the concomitant facility and
expeditiousness, the motion to serve written interrogatories upon the
plaintiff [Surecomp] filed by the defendant [Global] is GRANTED insofar as This court sees no reason to further belabor the issue on plaintiffs capacity
the alleged unenforceability of the subject contract is to sue since there is a prima facie showing that defendant entered into a
concerned. Accordingly, the latter is directed to serve the written contract with defendant and having done so, willingly, it cannot now be
interrogatories upon the plaintiff [Surecomp], which is required to act on it made to raise the issue of capacity to sue [Merrill Lynch Futures, Inc. v. CA,
in accordance with the pertinent rule on the matter. 211 SCRA 824]. That defendant was not aware of plaintiffs lack of capacity
to sue or that defendant did not benefit from the transaction are
arguments that are hardly supported by the evidence already presented for
the resolution of the Motion to Dismiss.
Necessarily, the resolution of the motion to dismiss is held in abeyance
until after a hearing on it is property conducted, relative to the second
ground aforementioned.
As to the issue of unenforceability of the subject contract under the
Intellectual Property Code, this court finds justification in modifying the
earlier Order allowing the further presentation of evidence. It appearing
SO ORDERED.[10]
38
that the subject contract between the parties is an executed, rather than
an executory, contract the statute of frauds therefore finds no application
here. Global presents the following issues for resolution: (1) whether a special civil action
for certiorari is the proper remedy for a denial of a motion to dismiss; and (2) whether Global is
estopped from questioning Surecomps capacity to sue.[19]
xxxx
An order denying a motion to dismiss is an interlocutory order which neither terminates nor
finally disposes of a case as it leaves something to be done by the court before the case is
finally decided on the merits. As such, the general rule is that the denial of a motion to dismiss
Undaunted, Global filed a petition for certiorari with prayer for the issuance of a temporary cannot be questioned in a special civil action for certiorari which is a remedy designed to
restraining order and/or writ of preliminary injunction under Rule 65 of the Rules of Court correct errors of jurisdiction and not errors of judgment.[20]
before the CA, contending that the RTC abused its discretion and acted in excess of its
jurisdiction.[15]
To justify the grant of the extraordinary remedy of certiorari, the denial of the motion to
dismiss must have been tainted with grave abuse of discretion. By "grave abuse of discretion"
On May 5, 2006, the CA rendered a Decision,[16] the dispositive portion of which reads: is meant such capricious and whimsical exercise of judgment that is equivalent to lack of
jurisdiction. The abuse of discretion must be grave as where the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent
and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty
WHEREFORE, premises considered, the instant petition is DENIED. The
enjoined by or to act all in contemplation of law.[21]
assailed Orders dated June 18, 2002 and November 27, 2002 of
the Regional Trial Court of Makati City, Branch 146, in Civil Case No.
01-1278 are hereby AFFIRMED.
In the instant case, Global did not properly substantiate its claim of arbitrariness on the part of
the trial court judge that issued the assailed orders denying the motion to dismiss. In a petition
for certiorari, absent such showing of arbitrariness, capriciousness, or ill motive in the
SO ORDERED.[17]
disposition of the trial judge in the case, we are constrained to uphold the courts ruling,
especially because its decision was upheld by the CA.
A motion for reconsideration was filed by Global. On July 10, 2006, the CA issued a II
Resolution[18] denying the motion for reconsideration for lack of merit.
The determination of a corporations capacity is a factual question that requires the elicitation
Hence, this petition. of a preponderant set of facts.[22] As a rule, unlicensed foreign non-resident corporations doing
39
business in the Philippines cannot file suits in the Philippines.[23] This is mandated under Global also has the right to exercise all defenses, rights, privileges, and counter-claims of every
Section 133 of the Corporation Code, which reads: kind and nature which ABC may have or invoke under the law. These findings of fact were
never contested by Global in any of its pleadings filed before this Court.
A corporation has a legal status only within the state or territory in which it was organized. For
this reason, a corporation organized in another country has no personality to file suits in
the Philippines. In order to subject a foreign corporation doing business in the country to the
jurisdiction of our courts, it must acquire a license from the Securities and Exchange
Commission and appoint an agent for service of process. Without such license, it cannot
institute a suit in the Philippines.[24]
The exception to this rule is the doctrine of estoppel. Global is estopped from challenging
Surecomps capacity to sue.
A foreign corporation doing business in the Philippines without license may sue in Philippine
courts a Filipino citizen or a Philippine entity that had contracted with and benefited from
it.[25] A party is estopped from challenging the personality of a corporation after having
acknowledged the same by entering into a contract with it.[26] The principle is applied to
prevent a person contracting with a foreign corporation from later taking advantage of its
noncompliance with the statutes, chiefly in cases where such person has received the benefits
of the contract. [27]
Due to Globals merger with ABC and because it is the surviving corporation, it is as if it was the
one which entered into contract with Surecomp. In the merger of two existing corporations,
one of the corporations survives and continues the business, while the other is dissolved, and
all its rights, properties, and liabilities are acquired by the surviving corporation.[28] This is
particularly true in this case. Based on the findings of fact of the RTC, as affirmed by the CA,
under the terms of the merger or consolidation, Global assumed all the liabilities and
obligations of ABC as if it had incurred such liabilities or obligations itself. In the same way,
40
E.Y. INDUSTRIAL SALES, INC. G.R. No. 184850 the cancellation of COR No. 4-1997-121492, also for the trademark VESPA, issued in favor of
respondent Shen Dar Electricity and Machinery Co., Ltd. (Shen Dar). The Decision of the IPO
and ENGRACIO YAP, Director General, in effect, affirmed the Decision dated May 29, 2006[4] issued by the Director
of the Bureau of Legal Affairs (BLA) of the IPO.
Petitioners, Present:
MACHINERY CO., LTD., Respondent Shen Dar is a Taiwan-based foreign corporation engaged in the
manufacture of air compressors.[7]
Respondent. October 20, 2010
x-----------------------------------------------------------------------------------------x
Both companies claimed to have the right to register the trademark VESPA for air
compressors.
DECISION
From 1997 to 2004, EYIS imported air compressors from Shen Dar through sales
contracts. In the Sales Contract dated April 20, 2002,[8] for example, Shen Dar would supply
VELASCO, JR., J.: EYIS in one (1) year with 24 to 30 units of 40-ft. containers worth of air compressors identified
in the Packing/Weight Lists simply as SD-23, SD-29, SD-31, SD-32, SD-39, SD-67 and SD-68. In
the corresponding Bill of Ladings, the items were described merely as air compressors. [9] There
is no documentary evidence to show that such air compressors were marked VESPA.
The Case
On June 9, 1997, Shen Dar filed Trademark Application Serial No. 4-1997-121492 with
the IPO for the mark VESPA, Chinese Characters and Device for use on air compressors and
This Petition for Review on Certiorari under Rule 45 seeks to nullify and reverse the February welding machines.[10]
21, 2008 Decision[1] and the October 6, 2008 Resolution[2] rendered by the Court of Appeals
(CA) in CA-G.R. SP No. 99356 entitled Shen Dar Electricity and Machinery Co., Ltd. v. E.Y.
Industrial Sales, Inc. and Engracio Yap.
On July 28, 1999, EYIS filed Trademark Application Serial No. 4-1999-005393, also for
the mark VESPA, for use on air compressors.[11] On January 18, 2004, the IPO issued COR No.
4-1999-005393 in favor of EYIS.[12] Thereafter, on February 8, 2007, Shen Dar was also issued
The assailed decision reversed the Decision dated May 25, 2007[3] issued by the Director COR No. 4-1997-121492.[13]
General of the Intellectual Property Office (IPO) in Inter Partes Case No. 14-2004-00084. The
IPO Director General upheld Certificate of Registration (COR) No. 4-1999-005393issued by the
IPO for the trademark VESPA in favor of petitioner E.Y. Industrial Sales, Inc. (EYIS), but ordered
41
In the meantime, on June 21, 2004, Shen Dar filed a Petition for Cancellation of EYIS
COR with the BLA.[14] In the Petition, Shen Dar primarily argued that the issuance of the COR in
favor of EYIS violated Section 123.1 paragraphs (d), (e) and (f) of Republic Act No. (RA) 8293, 1. Whether the BLA Director erred in ruling that Shen Dar failed to present
otherwise known as the Intellectual Property Code (IP Code), having first filed an application for evidence;
the mark. Shen Dar further alleged that EYIS was a mere distributor of air compressors bearing
the mark VESPA which it imported from Shen Dar. Shen Dar also argued that it had prior and
exclusive right to the use and registration of the mark VESPA in the Philippines under the 2. Whether the registration of EYIS application was proper considering that
provisions of the Paris Convention.[15] Shen Dar was the first to file an application for the mark; and
In its Answer, EYIS and Yap denied the claim of Shen Dar to be the true owners of the 3. Whether the BLA Director correctly ruled that EYIS is the true owner of the
mark VESPA being the sole assembler and fabricator of air compressors since the early mark.[18]
1990s. They further alleged that the air compressors that Shen Dar allegedly supplied them
bore the mark SD for Shen Dar and not VESPA. Moreover, EYIS argued that Shen Dar, not being Later, the IPO Director General issued a Decision dated May 25, 2007 upholding the
the owner of the mark, could not seek protection from the provisions of the Paris Convention COR issued in favor of EYIS while cancelling the COR of Shen Dar, the dispositive portion of
or the IP Code.[16] which reads:
Thereafter, the Director of the BLA issued its Decision dated May 29, 2006 in favor of WHEREFORE, premises considered, the appeal is DENIED.
EYIS and against Shen Dar, the dispositive portion of which reads: Certificate of Registration No. 4-1999-005393 for the mark VESPA for air
compressor issued in favor of Appellee is hereby upheld. Consequently,
Certificate of Registration No. 4-1997-121492 for the mark VESPA, Chinese
Characters & Device for goods air compressor and spot welding machine
WHEREFORE, premises considered, the Petition for Cancellation
issued in favor of Appellant is hereby ordered cancelled.
is, as it is hereby, DENIED. Consequently, Certificate of Registration No.
4-1999-[005393] for the mark VESPA granted in the name of E.Y. Industrial
Sales, Inc. on 9 January 2007 is hereby upheld.
Let a copy of this Decision as well as the records of this case be
furnished and returned to the Director of Bureau of Legal Affairs for
appropriate action. Further, let also the Directors of the Bureau of
Let the filewrapper of VESPA subject matter of this case be
Trademarks, the Administrative, Financial and Human Resources
forwarded to the Administrative, Financial and Human Resource
Development Services Bureau, and the Documentation, Information and
Development Services Bureau for issuance and appropriate action in
Technology Transfer Bureau be furnished a copy of this Decision for
accordance with this DECISION and a copy thereof furnished to the Bureau
information, guidance, and records purposes.[19]
of Trademarks for information and update of its records.
SO ORDERED.[17]
Shen Dar appealed the above decision of the IPO Director General to the CA where
Shen Dar raised the following issues:
Shen Dar appealed the decision of the BLA Director to the Director General of the IPO.
1. Whether Shen Dar is guilty of forum shopping;
In the appeal, Shen Dar raised the following issues:
42
2. Whether the first-to-file rule applies to the instant case; EYIS filed a motion for reconsideration of the assailed decision which the CA denied
in the assailed resolution.
3. Whether Shen Dar presented evidence of actual use;
In the assailed decision, the CA reversed the IPO Director General and ruled in favor of Shen EYIS and Yap raise the following issues in their petition:
Dar. The dispositive portion states:
In ruling for Shen Dar, the CA ruled that, despite the fact that Shen Dar did not D. Whether this Honorable Court may review questions of fact
formally offer its evidence before the BLA, such evidence was properly attached to the Petition considering that the findings of the Court of Appeals and the IPO
for Cancellation. As such, Shen Dars evidence may be properly considered. The CA also are in conflict and the conclusions of the appellee court are
enunciated that the IPO failed to properly apply the provisions of Sec. 123.1(d) of RA 8293, contradicted by the evidence on record.[23]
which prohibits the registration of a trademark in favor of a party when there is an earlier filed
application for the same mark. The CA further ruled that Shen Dar should be considered to
have prior use of the mark based on the statements made by the parties in their respective
Declarations of Actual Use. The CA added that EYIS is a mere importer of the air compressors
with the mark VESPA as may be gleaned from its receipts which indicated that EYIS is an The Ruling of the Court
importer, wholesaler and retailer, and therefore, cannot be considered an owner of the
mark.[22]
The appeal is meritorious.
43
First Issue:
Whether this Court may review the questions of fact presented In the instant case, the records will show that the IPO and the CA made differing
conclusions on the issue of ownership based on the evidence presented by the parties. Hence,
this issue may be the subject of this Courts review.
Petitioners raise the factual issue of who the true owner of the mark is. As a general
rule, this Court is not a trier of facts. However, such rule is subject to exceptions.
Second Issue:
We are very much aware that the rule to the effect that this Preliminarily, it must be noted that the BLA ruled that Shen Dar failed to adduce
Court is not a trier of facts admits of exceptions. As we have stated evidence in support of its allegations as required under Office Order No. 79, Series of 2005,
in Insular Life Assurance Company, Ltd. vs. CA: Amendments to the Regulations on Inter Partes Proceedings, having failed to formally offer its
evidence during the proceedings before it. The BLA ruled:
44
The CA concluded that Shen Dar needed not formally offer its evidence but merely The preceding sections referred to in the above provision refer to Secs. 7.1, 8.1 and 9
needed to attach its evidence to its position paper with the proper markings,[26] which it did in which, in turn, provide:
this case.
Section 7. Filing of Petition or Opposition
The IP Code provides under its Sec. 10.3 that the Director General of the IPO shall
establish the procedure for the application for the registration of a trademark, as well as the 7.1. The petition or opposition, together with the affidavits of
opposition to it: witnesses and originals of the documents and other requirements, shall be
filed with the Bureau, provided, that in case of public documents, certified
copies shall be allowed in lieu of the originals. The Bureau shall check if the
petition or opposition is in due form as provided in the Regulations
Section 10. The Bureau of Legal Affairs.The Bureau of Legal particularly Rule 3, Section 3; Rule 4, Section 2; Rule 5, Section 3; Rule 6,
Affairs shall have the following functions: Section 9; Rule 7, Sections 3 and 5; Rule 8, Sections 3 and 4. For petition for
cancellation of layout design (topography) of integrated circuits, Rule 3,
Section 3 applies as to the form and requirements. The affidavits,
xxxx documents and other evidence shall be marked consecutively as Exhibits
beginning with the letter A.
8.1. Within three (3) working days from receipt of the petition or
opposition, the Bureau shall issue an order for the respondent to file an
Thus, the Director General issued Office Order No. 79, Series of 2005 amending the answer together with the affidavits of witnesses and originals of
regulations on Inter Partes Proceedings, Sec. 12.1 of which provides: documents, and at the same time shall notify all parties required to be
notified in the IP Code and these Regulations, provided, that in case of
public documents, certified true copies may be submitted in lieu of the
Section 12. Evidence for the Parties originals. The affidavits and documents shall be marked consecutively as
Exhibits beginning with the number 1.
In other words, as long as the petition is verified and the pieces of evidence
consisting of the affidavits of the witnesses and the original of other documentary evidence are
attached to the petition and properly marked in accordance with Secs. 7.1 and 8.1
45
abovementioned, these shall be considered as the evidence of the petitioner. There is no Shen Dar challenges the propriety of such cancellation on the ground that there was
requirement under the abovementioned rules that the evidence of the parties must be no petition for cancellation as required under Sec. 151 of RA 8293.
formally offered to the BLA.
Office Order No. 79, Series of 2005, provides under its Sec. 5 that:
In any case, as a quasi-judicial agency and as stated in Rule 2, Sec. 5 of the
Regulations on Inter Partes Proceedings, the BLA is not bound by technical rules of procedure.
The evidence attached to the petition may, therefore, be properly considered in the resolution
of the case.
Section 5. Rules of Procedure to be followed in the conduct of
hearing of Inter Partes cases.The rules of procedure herein contained
primarily apply in the conduct of hearing of Inter Partes cases. The Rules of
Court may be applied suppletorily. The Bureau shall not be bound by strict
technical rules of procedure and evidence but may adopt, in the absence
of any applicable rule herein, such mode of proceedings which is
Third Issue: consistent with the requirements of fair play and conducive to the just,
speedy and inexpensive disposition of cases, and which will give the
Whether the IPO Director General can
Bureau the greatest possibility to focus on the contentious issues before
validly cancel Shen Dars Certificate of Registration it. (Emphasis supplied.)
In his Decision, the IPO Director General stated that, despite the fact that the instant The above rule reflects the oft-repeated legal principle that quasi-judicial and
case was for the cancellation of the COR issued in favor of EYIS, the interests of justice dictate, administrative bodies are not bound by technical rules of procedure. Such principle, however,
and in view of its findings, that the COR of Shen Dar must be cancelled. The Director General is tempered by fundamental evidentiary rules, including due process. Thus, we ruled in Aya-ay,
explained: Sr. v. Arpaphil Shipping Corp.:[28]
Accordingly, while the instant case involves a petition to cancel That administrative quasi-judicial bodies like the NLRC are not
the registration of the Appellees trademark VESPA, the interest of justice bound by technical rules of procedure in the adjudication of cases does not
requires that Certificate of Registration No. 4-1997-121492 be cancelled. mean that the basic rules on proving allegations should be entirely
While the normal course of proceedings should have been the filing of a dispensed with. A party alleging a critical fact must still support his
petition for cancellation of Certificate of Registration No. 4-1997-121492, allegation with substantial evidence. Any decision based on
that would involve critical facts and issues that have already been resolved unsubstantiated allegation cannot stand as it will offend due process.
in this case. To allow the Applicant to still maintain in the Trademark
x x x The liberality of procedure in administrative actions is
Registry Certificate of Registration No. 4-1997-121492 would nullify the
subject to limitations imposed by basic requirements of due process. As
exclusive rights of Appellee as the true and registered owner of the mark
this Court said in Ang Tibay v. CIR, the provision for flexibility in
VESPA and defeat the purpose of the trademark registration system.[27]
administrative procedure does not go so far as to justify orders without a
basis in evidence having rational probative value. More specifically, as held
in Uichico v. NLRC:
46
It is true that administrative and quasi-judicial bodies like Next, petitioners challenge the CAs reversal of the factual findings of the BLA that
the NLRC are not bound by the technical rules of procedure in the Shen Dar and not EYIS is the prior user and, therefore, true owner of the mark. In arguing its
adjudication of cases. However, this procedural rule should not position, petitioners cite numerous rulings of this Court where it was enunciated that the
be construed as a license to disregard certain fundamental factual findings of administrative bodies are given great weight if not conclusive upon the
evidentiary rules. courts when supported by substantial evidence.
We agree with petitioners that the general rule in this jurisdiction is that the factual
findings of administrative bodies deserve utmost respect when supported by
This was later reiterated in Lepanto Consolidated Mining Company v. Dumapis:[29] evidence. However, such general rule is subject to exceptions.
While it is true that administrative or quasi-judicial bodies like the In Fuentes v. Court of Appeals,[30] the Court established the rule of conclusiveness of
NLRC are not bound by the technical rules of procedure in the adjudication factual findings of the CA as follows:
of cases, this procedural rule should not be construed as a license to
disregard certain fundamental evidentiary rules. The evidence presented
must at least have a modicum of admissibility for it to have probative value.
Not only must there be some evidence to support a finding or conclusion, Jurisprudence teaches us that (a)s a rule, the jurisdiction of this
but the evidence must be substantial. Substantial evidence is more than a Court in cases brought to it from the Court of Appeals x x x is limited to the
mere scintilla. It means such relevant evidence as a reasonable mind might review and revision of errors of law allegedly committed by the appellate
accept as adequate to support a conclusion. Thus, even though technical court, as its findings of fact are deemed conclusive. As such this Court is not
rules of evidence are not strictly complied with before the LA and the NLRC, duty-bound to analyze and weigh all over again the evidence already
their decision must be based on evidence that must, at the very least, be considered in the proceedings below. This rule, however, is not without
substantial. exceptions. The findings of fact of the Court of Appeals, which are as a
general rule deemed conclusive, may admit of review by this Court:
(1) when the factual findings of the Court of Appeals and the trial
court are contradictory;
The fact that no petition for cancellation was filed against the COR issued to Shen Dar
does not preclude the cancellation of Shen Dars COR. It must be emphasized that, during the
hearing for the cancellation of EYIS COR before the BLA, Shen Dar tried to establish that it, not (2) when the findings are grounded entirely on speculation,
EYIS, was the true owner of the mark VESPA and, thus, entitled to have it registered. Shen Dar surmises, or conjectures;
had more than sufficient opportunity to present its evidence and argue its case, and it did. It
was given its day in court and its right to due process was respected. The IPO Director Generals
disregard of the procedure for the cancellation of a registered mark was a valid exercise of his (3) when the inference made by the Court of Appeals from its
discretion. findings of fact is manifestly mistaken, absurd, or impossible;
Fourth Issue: (4) when there is grave abuse of discretion in the appreciation of
facts;
Whether the factual findings of the IPO are binding on the CA
47
(5) when the appellate court, in making its findings, goes beyond result of the case. An examination of the IPO Decisions, however, would show that no such
the issues of the case, and such findings are contrary to the admissions of evidence was overlooked.
both appellant and appellee;
First, as to the date of first use of the mark by the parties, the CA stated:
Thereafter, in Villaflor v. Court of Appeals,[31] this Court applied the above principle to
factual findings of quasi-judicial bodies, to wit:
49
invoices shall be issued which shall show the name, business style, if any,
and address of the purchaser, customer or client.
There is no requirement that a sales invoice should accurately state the nature of all
the businesses of the seller. There is no legal ground to state that EYIS declaration in its sales
invoices that it is an importer, wholesaler and retailer is restrictive and would preclude its
The original of each receipt or invoice shall be issued to the being a manufacturer.
purchaser, customer or client at the time the transaction is effected, who,
if engaged in business or in the exercise of profession, shall keep and
preserve the same in his place of business for a period of three (3) years
from the close of the taxable year in which such invoice or receipt was From the above findings, there was no justifiable reason for the CA to disregard the
issued, while the duplicate shall be kept and preserved by the issuer, also in factual findings of the IPO. The rulings of the IPO Director General and the BLA Director were
his place of business, for a like period. supported by clear and convincing evidence. The facts cited by the CA and Shen Dar do not
justify a different conclusion from that of the IPO. Hence, the findings of the BLA Director and
the IPO Director General must be deemed as conclusive on the CA.
Correlatively, in Revenue Memorandum No. 16-2003 dated May 20, 2003, the
Bureau of Internal Revenue defined a Sales Invoice and identified its required information as
In any event, given the length of time already invested by the parties in the instant
follows:
case, this Court must write finis to the instant controversy by determining, once and for all, the
true owner of the mark VESPA based on the evidence presented.
Sales Invoices (SI)/Cash Invoice (CI) is written account of goods RA 8293 espouses the first-to-file rule as stated under Sec. 123.1(d) which states:
sold or services rendered and the prices charged therefor used in the
ordinary course of business evidencing sale and transfer or agreement to
sell or transfer of goods and services. It contains the same information Section 123. Registrability. - 123.1. A mark cannot be registered if
found in the Official Receipt. it:
xxxx
Official Receipt (OR) is a receipt issued for the payment of
services rendered or goods sold. It contains the following information:
(d) Is identical with a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date, in respect of:
a. Business name and address;
Under this provision, the registration of a mark is prevented with the filing of an
earlier application for registration. This must not, however, be interpreted to mean that
ownership should be based upon an earlier filing date. While RA 8293 removed the previous By itself, registration is not a mode of acquiring ownership. When
requirement of proof of actual use prior to the filing of an application for registration of a mark, the applicant is not the owner of the trademark being applied for, he has
proof of prior and continuous use is necessary to establish ownership of a mark. Such no right to apply for registration of the same. Registration merely creates
ownership constitutes sufficient evidence to oppose the registration of a mark. a prima facie presumption of the validity of the registration, of the
registrants ownership of the trademark and of the exclusive right to the use
thereof. Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give way to
Sec. 134 of the IP Code provides that any person who believes that he would be evidence to the contrary.
damaged by the registration of a mark x x x may file an opposition to the application. The term
any person encompasses the true owner of the markthe prior and continuous user.
No costs.
On the other hand, Shen Dar failed to refute the evidence cited by the BLA in its
decision. More importantly, Shen Dar failed to present sufficient evidence to prove its own SO ORDERED.
prior use of the mark VESPA. We cite with approval the ruling of the BLA:
Facts: EYIS is a domestic corporation engaged in the production, distribution and sale of air
[Shen Dar] avers that it is the true and rightful owner of the compressors and other industrial tools and equipment. On the other hand, Shen Dar is a
trademark VESPA used on air compressors. The thrust of [Shen Dars] Taiwan-based foreign manufacturer of air compressors. From 1997 to 2004, EYIS imported air
argument is that respondent E.Y. Industrial Sales, Inc. is a mere distributor compressors from Shen Dar. Both of them sought to register the mark VESPA for use on air
of the VESPA air compressors. We disagree. compressors, but it was Shen Dar who first filed the application on June 1997. EYIS application
was first granted on 2004, so Shen Dar sought for its cancellation on the ground of Sec 123 of
the Intellectual Property Code which provides that the registration of a similar mark is
prevented with the filing of an earlier application for registration. On the other hand, EYIS
This conclusion is belied by the evidence. We have gone over
contended that Shen Dar is not entitled to register the mark VESPA on its products because
each and every document attached as Annexes A, A 1-48 which consist of
EYIS has been using it as the sole assembler and distributor of air compressors since the 1990s.
Bill of Lading and Packing Weight List. Not one of these documents referred
EYIS was able to prove such fact.
to a VESPA air compressor. Instead, it simply describes the goods plainly as
air compressors which is type SD and not VESPA. More importantly, the Issue: W/N EYIS is the true owner of the mark VESPA
earliest date reflected on the Bill of Lading was on May 5, 1997. (Annex
A-1). [Shen Dar] also attached as Annex B a purported Sales Contract with Ruling:Yes. EYIS is the true owner because it is the prior and continuous user of the mark
respondent EY Industrial Sales dated April 20, 2002. Surprisingly, nowhere VESPA.
in the document does it state that respondent EY Industrial agreed to sell
VESPA air compressors. The document only mentions air compressors Section 123.1 of the IPC should not be interpreted to mean that ownership is based upon an
which if genuine merely bolsters respondent Engracio Yaps contention that earlier filing date. While RA 8293 removed the previous requirement of proof of actual use
[Shen Dar] approached them if it could sell the Shen Dar or SD air prior to the filing of an application for registration of a mark, proof of prior and continuous use
compressor. (Exhibit 386) In its position paper, [Shen Dar] merely mentions is necessary to establish ownership of a mark. Ownership of a mark or trade name may be
of Bill of Lading constituting respondent as consignee in 1993 but never acquired not necessarily by registration but by adoption and use in trade or commerce.
submitted the same for consideration of this Bureau. The document is also
not signed by [Shen Dar]. The agreement was not even drafted in the
letterhead of either [Shen Dar] nor [sic] respondent registrant. Our only As between actual use of a mark without registration, and registration of the mark without
conclusion is that [Shen Dar] was not able to prove to be the owner of the actual use thereof, the former prevails over the latter. Hence, EYIS is entitled to the
VESPA mark by appropriation. Neither was it able to prove actual registration of the mark in its name.
commercial use in the Philippines of the mark VESPA prior to its filing of a
trademark application in 9 June 1997.[39]
As such, EYIS must be considered as the prior and continuous user of the mark VESPA
and its true owner. Hence, EYIS is entitled to the registration of the mark in its name.
52
G.R. No. 169440 November 23, 2011 On August 1, 2000, Judge Rebecca G. Salvador of RTC Manila, Branch 1, issued a
warrant of arrest against Gemma, but lifted[4] and set aside[5] the same
GEMMA ONG A.K.A. Maria Teresa Gemma Catacutan, Petitioner, after Gemma voluntarily surrendered on August 4, 2000, and filed a cash bond for 12,000.00.
vs.
PEOPLE OF THE PHILIPPINES, Respondent. Gemma pleaded not guilty to the charge upon arraignment on October 17,
2000.[6] After the pre-trial conference on February 13, 2001,[7] trial on the merits ensued.
The prosecution called to the witness stand the following: Roger Sherman Slagle, the
LEONARDO-DE CASTRO, J.:
Director of Operations of Philip Morris Malaysia, and Philip Morris Philippines, Inc.s (PMPI)
product/brand security expert, to testify that according to his examination, the products they
seized at the subject premises were counterfeit cigarettes; [8] as well as Jesse Lara, who, as then
Before Us is a petition for review on certiorari, filed under Rule 45 of the Rules of Senior Investigator III at the Intellectual Property Rights (IPR) Unit of the Economic Intelligence
Court, to set aside and reverse the June 16, 2005 Decision[1] of the Court of Appeals in CA-G.R. and Investigation Bureau (EIIB), Department of Finance, led the investigating team, to testify
CR No. 28308, which affirmed the September 23, 2003 Decision[2] of the Regional Trial Court on the events that led to the arrest of Gemma.[9] The prosecution also presented the billing
(RTC) of Manila, Branch 24 in Criminal Case No. 00-184454. accountant of Quasha Ancheta Pea & Nolasco Law Office (Quasha Law Office), Juliet Flores, to
show that PMPI, being one of Quasha Law Offices clients, paid the amount of $4,069.12 for
legal services rendered.[10] The last witness for the prosecution was Atty. Alonzo Q. Ancheta, a
On July 28, 2000, petitioner Gemma Ong a.k.a. Maria Teresa Gemma Catacutan senior law partner at Quasha Law Office, who testified that as the duly appointed
(Gemma) was charged before the RTC for Infringement under Section 155 in relation to Section Attorney-in-Fact of PMPI, he was in charge of the EIIB search operation in the subject
170 of Republic Act No. 8293 or the Intellectual Property Code. The accusatory portion of the premises. Atty. Ancheta said that while he was not personally present during the
Information reads: implementation of the search warrant, he sent Atty. Leonardo Salvador, who constantly
reported the developments to him.[11]
53
premises)]. Upon inquiry from the Barangay Chairman, they also learned during the actual search (SPO2 Sese, Jess Lara, Traje, Sr., Henry Mariano,
that the place is owned by a certain Mr. Jackson Ong. Isidro Burgos and Atty. Salvador). Accused signed her name in the said
documents as Gemma Ong, as the Owner/Representative, while a certain
employee, Girlie Cantillo, also signed as witness.
The EIIB team coordinated with officers of Philip Morris, Inc., owner of the
trademark Marlboro Label in the Philippines duly registered with the
Philippine Patents Office and subsequently with the Intellectual Property On September 28, 1998, a Return of Search Warrant was submitted by the
Office (IPO) since 1956. Initial examination made by Philip Morris, Inc. on EIIB to the issuing court stating that the articles seized pursuant to the
those random sample purchases revealed that the cigarettes were indeed warrant were stored in the premises of the EIIB and requesting that EIIB be
fake products unauthorized by the company. With official indorsement by granted temporary custody of the goods. Acting on the Urgent Motion To
the EIIB, Senior Investigator Lara filed an application for search warrant Transfer Custody of Confiscated Articles filed by Philip Morris Products, Inc.
before the Regional Trial Court of Dasmarias, Cavite, Branch 90. (PMPI) of Virginia, U.S.A., Executive Judge Dolores L. Espaol ordered the
custody of the seized goods transferred from EIIB to PMPI c/o Quasha
Ancheta Pea and Nolasco Law Office, the Attorney-in-Fact of PMPI. Judge
Espaol subsequently also issued an order dated October 15, 1998
On September 24, 1998, Executive Judge Dolores L. Espaol issued
authorizing PMPI to secure and take out samples of the unauthorized
a search warrant after finding probable cause to believe that Mr. Jackson
products from the confiscated cartons/boxes of Marlboro cigarettes which
Ong has in his possession/control in the premises located at 1675-1677
are stored at Four Winds Phils. Inc. warehouse located at No. 2241 Pasong
Bulacan St. cor. M. Hizon St., Sta. Cruz, Manila, the following properties:
Tamo Extension, Makati City under the direct and personal control and
supervision of Sheriff IV Tomas C. Azurin. PMPI had earlier sought such
order from the court for the purpose of laboratory analysis and scientific
Substantial number of fake locally made and imported testing of the samples from the confiscated cigarettes.
fake cigarettes bearing the Marlboro brand, together
with the corresponding labels, cartons, boxes and other
packaging as well as receipts, invoices and other
On the basis of the results of the examination conducted by PMPI on the
documents relative to the purchase, sale, and
samples obtained from the confiscated boxes of cigarettes bearing the
distribution of the aforesaid fake Marlboro cigarettes.
Marlboro brand, which confirmed the same to be unauthorized products
and not genuine Marlboro cigarettes, the EIIB filed a case for Violation of
Sections 155 and 168 in relation to Section 170 of Republic Act No. 8293
On September 25, 1998, the EIIB team led by Senior Investigator Lara against Jackson Ong who is not an authorized distributor of Marlboro
implemented the search warrant, together with SPO2 Rommel P. Sese of products in the Philippines.[12]
the Western Police District (WPD) as representative of the Philippine
National Police (PNP), Barangay Chairman Ernesto Traje, Sr., Barangay
Kagawad Vivian V. Rallonza and Atty. Leonardo P. Salvador who was sent
by [Quasha Pea & Nolasco Law Office,] the law firm engaged by Philip
Morris, Inc. They proceeded to the subject premises but Jackson Ong, the After the prosecution rested its case, the defense filed a Demurrer to
alleged owner, was not there. It was accused, who is supposedly either the Evidence,[13] which the RTC denied on March 26, 2003.[14] The defense moved for a
spouse or common-law wife of Jackson Ong, who entertained them. At first, reconsideration of this order but the same was denied on April 22, 2003.[15]
accused refused to allow them entry into the premises but eventually the
team was able to search the premises and found Marlboro cigarettes
stocked in several boxes containing fifty (50) reams inside each box which
were packed in black plastic sacks like in balikbayan boxes. The Inventory Gemma, as the lone witness for the defense, then took the witness stand. She said
and Certification In the Conduct of Search were duly accomplished and that she is married to Co Yok Piao, a Chinese national, but she still uses her maiden name
signed by the members of the EIIB and the other representatives present Catacutan.[16] She denied that she is the Gemma Ong accused in this case. She testified that she
54
was arrested on August 4, 2000, without the arresting officers asking for her name. She said With costs against accused Gemma Catacutan.[20]
that when she pleaded to be released, she was instructed to post a cash bond, which she did in
the amount of 12,000.00. Gemma averred that when she posted her bond and signed her
certificate of arraignment, she did so under her real name Maria Teresa Gemma Catacutan, as
opposed to the signatures in the Inventory and Certification in the Conduct of Search (search
documents), which she denied signing. She claimed that she was not able to bring up her In resolving the case, the RTC narrowed down the issue to whether Gemma
defense of mistaken identity early on as she did not know when the proper time to raise it Catacutan was the same accused identified as Gemma Ong. The RTC answered this in the
was. She avowed that she was not interrogated by the police prior to her arrest, despite the affirmative as it found Gemmas defense of mistaken identity as untenable, especially since she
two-year gap between it and the search of the subject premises.She alleged that she did not claimed to be a professional. The RTC explained:
know Jackson Ong and that the prosecution witnesses, whom she first saw during her trial,
couldnt even point to her as the person present during the raid when they testified in
court. Gemma further asseverated that while she could not remember where she was on
September 25, 1998, she was sure that she was not at the subject premises on that Ranged against the positive and forthright declaration of the
date. Gemma presented her Identification Card issued by the Professional Regulation prosecution witnesses, the mere uncorroborated and self-serving denials of
Commission (PRC) to show that she is a dentist by profession, although she claimed that she is the accused cannot stand. (People vs. Hortaleza, 258 SCRA 201)
a businessperson in practice. She said that she used to buy and sell gear fabrics, t-shirts, truck
materials, and real estate[17] under the business name Fascinate Trading based in Bulacan
Street, Sta. Cruz, Manila, but that it had ceased operations in February 1998.[18] Gemma denied We note in disbelief that it was only in the hearing of November 26, 2001,
ever having engaged in the manufacture and sale of any kind of cigarettes and claimed that she that accused[s] former lawyer manifested that accused is known as Gemma
could not even distinguish between a fake and a genuine Marlboro cigarette.[19] Catacutan never as Gemma Ong (tsn, November 26, 2001, p. 3) and as
admitted by her, she never revealed her true identity when arrested, when
she posted her bail bond and even during her arraignment.
On September 30, 2003, the RTC convicted Gemma of the crime as charged. The
dispositive portion of its Decision reads:
She could have protested at the time of her arrest that they were arresting
the wrong person but this she did not do. She proceeded to post a bond for
her provisional liberty, hired a lawyer to defend her but failed to divulge
the very information that could have led to an early dismissal of the case, if
Accordingly, this Court finds accused Gemma Catacutan guilty beyond true.
reasonable doubt of violation of Section 155 in relation to Section 170 of
Republic Act No. 8293 and hereby sentences her to suffer the penalty of
imprisonment of two (2) years and to pay a fine of Fifty Thousand Her pretensions of ignorance as to the proper stage of when to explain (tsn,
(50,000.00) Pesos. May 26, 2003), p. 13 can hardly be given credit. A dentist by profession, it is
utterly incredible that she remained meek all through-out her arrest and
the posting of her bail bond.[21]
Accused is further directed to indemnify private complainant the sum of
US$4,069.12 or its peso equivalent, as actual damages.
The records of the case as against Jackson Ong is hereby ordered archived The RTC also unfurled the fact that while Gemma claimed to have never engaged in the sale
pending his arrest. and manufacture of Marlboro cigarettes, the address of her business Fascinate Trading is
registered as 1677 Bulacan Street, Sta. Cruz, Manila, the same property raided by the EIIB that
contained the counterfeit cigarettes.[22]
55
V
Aggrieved, Gemma appealed the RTCs decision to the Court of Appeals based on the following
grounds:
THE LOWER COURT COMMITTED A GRAVE REVERSIBLE ERROR IN
CONVICTING ACCUSED-APPELLANT DESPITE THE UTTER AND PATHETIC
LACK OF EVIDENCE TO SUSTAIN THE PROSECUTIONS LAME, SHALLOW AND
I UNCONFOUNDED THEORY OF GUILT.[23]
THE LOWER COURT COMMITTED SERIOUS REVERSIBLE ERROR IN The Court of Appeals affirmed the conviction of Gemma for trademark infringement
CONVICTING THE ACCUSED-APPELLANT WHO HAD NOT BEEN POSITIVELY under Section 155 of Republic Act No. 8293, as the counterfeit goods seized by the EIIB were
IDENTIFIED AND PINPOINTED AS MANUFACTURER NOR (sic) DISTRIBUTOR not only found in her possession and control, but also in the building registered under her
OF FAKE MARLBORO PRODUCT. business, Fascinate Trading. The Court of Appeals said that the prosecution had satisfactorily
proven Gemmas commission of the offense since the unauthorized use of the trademark
Marlboro, owned by PMPI, was clearly intended to deceive the public as to the origin of the
IV cigarettes being distributed and sold, or intended to be distributed and sold. The Court of
Appeals further sustained the penalty and damages imposed by the RTC for being in accord
with the law and facts.[25]
THE LOWER COURT COMMITTED SERIOUS REVERSIBLE ERROR IN
NOT GIVING THE SLIGHTEST CREDENCE TO THE UNCONTRADICTED,
UNREFUTED AND CANDID TESTIMONY OF THE ACCUSED-APPELLANT, BUT Gemma is now before this Court with the following assignment of errors:
INSTEAD, CONVICTED HER ON [T]HE BASIS OF EXTRAPOLATED EVIDENCE
NOT BORNE BY THE RECORDS.
A.
56
THE COURT OF APPEALS ERRED IN GIVING CREDENCE TO THE TESTIMONIES CONTROL OF THE PREMISES WHERE THE COUNTERFEIT ARTICLES WERE
OF PROSECUTION WITNESSES IDENTIFYING PETITIONER AS PRESENT AT SEIZED BECAUSE SHE ALLEGEDLY NEVER PROTESTED BEING WRONGFULLY
THE TIME AND PLACE WHEN THE SEARCH AND SEIZURE TOOK PLACE. ACCUSED AT THE TIME OF HER ARREST ON 4 AUGUST 2000, WHEN SHE
POSTED HER CASH BOND AND WHEN SHE EVEN SIGNED HER NAME AS MA.
TERESA GEMMA CATACUTAN IN THE WAIVER, UNDERTAKING AND
CERTIFICATE OR ARRAIGNMENT, ALL IN THE NAME OF THE ACCUSED AS
B.
GEMMA ONG, a.k.a. MA. THERESA CATACUTAN.
C.
Gemma argues that if it were true that she was in the subject premises when it was
THE COURT OF APPEALS ERRED IN NOT FINDING THAT PETITIONERS raided on September 25, 1998, then her name and presence would have been mentioned in
SIGNATURE IN EXHIBITS A, B AND C ARE NOT HERS BUT WERE FORGED, the respective affidavits of Slagle and Atty. Ancheta; and the EIIB agents who conducted the
BEING COMPLETELY AND PATENTLY DISSIMILAR TO HER TRUE AND REAL search would have confronted, investigated, or arrested her. Gemma insists that the fact that
SIGNATURE AS SHOWN IN HER OFFICIAL I.D AS PROFESSIONAL DENTIST. her name was only mentioned for the first time in the amended affidavits yields to the
conclusion that she was not in the subject premises when it was searched and that the
testimonies of the prosecution witnesses were perjured.[27]
D.
Gemma further claims that the courts below were wrong in finding that she never
THE COURT OF APPEALS ERRED IN CONCLUDING THAT THE AFFIDAVITS OF protested that she was mistakenly identified. She claims that she was arrested without the
THE PROSECUTION WITNESSES WHICH DID NOT MENTION PETITIONERS benefit of a preliminary investigation and all she wanted to do at that point was to get out [of]
PRESENCE AT THE TIME AND PLACE OF THE SEARCH CANNOT TAKE the clutches of overzealous and eager beaver policemen who were exuberant in arresting an
PRECEDENCE OVER THEIR CONTRARY TESTIMONIES IN COURT THAT SHE innocent party like[28] her. Gemma also explains that her non-protest during her arraignment
WAS PRESENT AND IN FACT THE OCCUPANT AND OWNER OF THE was upon the advice of her former lawyer, who said that he would correct it in the proper time
PREMISES FROM WHICH SHE INITIALLY BLOCKED THEIR ENTRY INTO. during the trial.
E. Respondent People of the Philippines, in its comment,[29] avers that there are only
two issues to be resolved in this case, to wit:
57
1. THE INSTANT PETITION IS FATALLY DEFECTIVE AS IT RAISES in a petition for review.[33] However, in exceptional cases, this Court has taken cognizance of
QUESTIONS OF FACT WHICH ARE NOT PROPER FOR REVIEW UNDER questions of fact in order to resolve legal issues, such as when there was palpable error or a
RULE 45 OF THE REVISED RULES OF COURT. grave misapprehension of facts by the lower court.[34] In Armed Forces of the Philippines
Mutual Benefit Association, Inc. v. Court of Appeals,[35] we said that although submission of
2. THE COURT OF APPEALS DID NOT ERR IN AFFIRMING PETITIONERS issues of fact in an appeal by certiorari taken to this Court is ordinarily proscribed, this Court
CONVICTION FOR VIOLATION OF SECTION 155 IN RELATION TO nonetheless retains the option in the exercise of its sound discretion, taking into account the
SECTION 170 OF R.A. 8293 (INTELLECTUAL PROPERTY CODE OF THE attendant circumstances, either to decide the case or refer it to the proper court for
PHILIPPINES).[30] determination.[36] Since the determination of the identity of Gemma is the very issue affecting
her guilt or innocence, this Court chooses to take cognizance of this case in the interest of
proper administration of justice.
Respondent claims that a perusal of the issues in Gemmas petition readily discloses
that only questions of fact have been raised, which are not reviewable in an appeal
by certiorari.[31] Respondent asseverates that Gemmas conviction was warranted as the Gemma is guilty of violating
prosecution had sufficiently established her presence during the search of the subject premises
Section 155 in relation to Section 170 of
where she signed the search documents as Gemma Ong. Moreover, the respondent avers,
Gemma failed to timely protest her arrest and raise her claim that she is not Gemma Ong. [32] Republic Act No. 8293
Issues Gemma was charged and convicted of violating Section 155 in relation to Section 170
of Republic Act No. 8293, or the Intellectual Property Code of the Philippines.
A study of the pleadings filed before this Court shows that the only issues to be
resolved are the following: Section 155. Remedies; Infringement. - Any person who shall,
without the consent of the owner of the registered mark:
58
this subsection are committed regardless of whether there is actual sale Anent the element of confusion, both the RTC and the Court of Appeals have
of goods or services using the infringing material. (Sec. 22, R.A. No 166a) correctly held that the counterfeit cigarettes seized from Gemmas possession were intended to
confuse and deceive the public as to the origin of the cigarettes intended to be sold, as they
Section 170. Penalties. - Independent of the civil and not only bore PMPIs mark, but they were also packaged almost exactly as PMPIs products.[41]
administrative sanctions imposed by law, a criminal penalty of
imprisonment from two (2) years to five (5) years and a fine ranging from
Fifty thousand pesos (50,000) to Two hundred thousand pesos (200,000),
shall be imposed on any person who is found guilty of committing any of Regarding the
the acts mentioned in Section 155, Section 168 and Subsection 169.1. (Arts. Claim of
188 and 189, Revised Penal Code.) (Emphases supplied.) Mistaken
Identity
Despite all these findings, Gemma has posited only a single defense, from the RTC all
A mark is any visible sign capable of distinguishing the goods (trademark) or services the way up to this Court: that she is not the Gemma Ong named and accused in this case. She
(service mark) of an enterprise and shall include a stamped or marked container of goods.[37] bases this claim on the alleged discrepancies in the prosecution witnesses original
affidavits vis--vis the amended ones, which discrepancies, according to her, strongly suggest
her innocence.
In McDonalds Corporation and McGeorge Food Industries, Inc. v. L.C. Big Mak Burger,
Inc.,[38] this Court held:
This Court has time and again held that between an affidavit executed outside the
court, and a testimony given in open court, the latter almost always prevails.
To establish trademark infringement, the following elements
must be shown: (1) the validity of plaintiffs mark; (2) the plaintiffs
ownership of the mark; and (3) the use of the mark or its colorable Discrepancies between a sworn statement and testimony in court
imitation by the alleged infringer results in likelihood of confusion. Of these, do not outrightly justify the acquittal of an accused. Such discrepancies do
it is the element of likelihood of confusion that is the gravamen of not necessarily discredit the witness since ex parte affidavits are often
trademark infringement. incomplete. They do not purport to contain a complete compendium of the
details of the event narrated by the affiant. Thus, our rulings generally
consider sworn statements taken out of court to be inferior to in court
testimony. x x x.[42]
A mark is valid if it is distinctive and not barred from registration. Once registered,
not only the marks validity, but also the registrants ownership of the mark is prima
facie presumed.[39]
A reading of the original affidavits[43] executed by Slagle and Atty. Ancheta, readily
reveals that they concentrated on the facts and events leading up to the search and seizure of
the contraband materials from the subject premises. They not only failed to mention Gemma
The prosecution was able to establish that the trademark Marlboro was not only
Ongs presence there, but they also failed to mention the other witnesses names and presence
valid for being neither generic nor descriptive, it was also exclusively owned by PMPI, as
there as well. Although this might appear to be a mistake on the part of a known and
evidenced by the certificates of registration issued by the Intellectual Property Office of the
established law firm like the Quasha Law Office, the firm immediately sought to rectify this by
Department of Trade and Industry.[40]
having the affidavits of Slagle, Atty. Ancheta, and Lara amended.
59
If it were true that Gemma was not at the subject premises at all on September 25, ATTY. MAGLINAO:
1998, then she should have grabbed every chance to correct this notion and expose this
mistake before she was arrested. She could have brought up her defense of mistaken identity No, your Honor. May we request to correct the information from Gemma
or absence at the raid in the preliminary investigation conducted prior to the issuance of her Ong to Gemma Catacutan.[44]
warrant of arrest; but instead, she chose to ignore her subpoena and disregard the preliminary
investigation. Even then, Gemma had the opportunity to raise the fact that she was not
Gemma Ong; not only during her arrest, but also during the posting of the cash bond for her
bail, and more importantly, during her arraignment, when she was asked if she understood
the charges against her. Gemma also knew that the Information was filed against her on the Gemma further accuses the prosecution witnesses of falsely testifying and of
basis of the amended affidavits, thus, she could have filed a motion to quash the information perjuring themselves just so they can satisfy a big client like PMPI by showing that somebody
before she entered her plea, or asked that a reinvestigation be conducted. However, all had been arrested for counterfeiting its cigarettes. The crimes Gemma is imputing on these
these Gemma failed to do. We agree with the RTC that it is highly unlikely that a person of her witnesses are serious crimes, and in the absence of concrete and convincing evidence, this
stature and educational attainment would be so meek and timid that she failed to protest Court could not believe her mere allegations that imply that these people would destroy
against her being wrongly identified, accused, arrested, and potentially imprisoned. If what she someones life just so they can please a client, more so over mere cigarettes. In Principio v. Hon.
says were true, she would not have agreed to post bail or to be arraigned without at the very Barrientos,[45] we said:
least, bringing up the fact that she was not the Gemma Ong the police officers were looking
for. In addition, her own lawyer, Atty. Maglinao, brought up the fact that she was not Gemma
Ong, only for the purpose of correcting the Information, and not to contest it, to wit: Bad faith is never presumed while good faith is always presumed and the
chapter on Human Relations of the Civil Code directs every person, inter
alia, to observe good faith, which springs from the fountain of good
WITNESS ROGER SHERMAN SLAGLE UNDER THE SAME OATH FOR conscience. Therefore, he who claims bad faith must prove it. For one to be
CONTINUATION OF DIRECT EXAMINATION BY: in bad faith, the same must be evident. x x x.[46]
ATTY. ERESE:
The prosecution witnesses, contrary to Gemmas claim, had positively identified her
as the person who initially refused the search team entrance, then later acquiesced to the
COURT: Proceed. search operations. Slagle explained that even though he mentioned Gemma only in his
amended affidavit, he was sure that she was at the subject premises on the day that they
searched it:
ATTY. MAGLINAO:
60
A Yes sir.
A : Yes, sir.
Q Can you tell the court how you were able to include the name of
Gemma Catacutan in your amended affidavit,
when in fact it did not appear in the first Q : So, as regard to the person whom you identify as the one
affidavit? who refused you to gain entry, would you be
able to identify this person?
A When we arrived she was there and she was very nervous and upset.
A : Yes, sir, that lady in pink is Mrs. Gemma Ong.
Q : Mr. Witness, why do you say that the person whom you
A It is very clear to me when I arrived there that she was somehow pointed to us is the one who wrote the name
involved.[47] (Emphases ours.) Mrs. Gemma Ong?
WITNESS
Lara on the other hand, even pointed to her and thus positively identified her to be Because when we served the search warrant
the one who had signed the search documents,[48] as the owner of the subject premises, to wit: she signed it in our presence and that is her
own signature.
ATTY. FREZ
ATTY. FREZ
Q : Mr. Witness, do you know this person who wrote the name
Gemma Ong? Q : So, Mr. Witness, in this Inventory, we made some markings
during the pre-trial conference and I see here
above the signature (Owner/Representative),
there exist a handwritten name which reads
A : Yes, sir, Gemma Ong is the owner of the premises when we
GEMMA ONG and above it, there exist a
served the search warrant and also, she was
signature, are you familiar with this person
the one who refused us to gain entry during
which appears to be Gemma Ong?
the service of the search warrant.
61
Q : Your Honor, during the pre-trial conference, it was previously ATTY. FERNANDEZ
marked as Exhibit D-1. Mr. Witness, I also see
here a Verification but there also exist an Objection, your honor, the witness would be incompetent . . .
entry below the name and I quote
Owner/Claimant/Representative, there
appears a handwritten name Gemma Ong COURT
and a signature above it, are you familiar with
this person which appears to be Gemma Ong? May answer.
WITNESS
xxxx I am not familiar with the relationship of Mrs. Gemma Ong with Jackson
Ong because during the service of the search
warrant, Mrs. Gemma Ong was there
together with two employees and when I
Q : Mr. Witness, in this document which is the certification in the
asked where was Jackson Ong, she was the
Conduct of Search and I have here above the
one who entertained us.
entry (Owner/Representative), a handwritten
name which reads Gemma Ong and there
exist a signature above the handwritten name,
can you identify the signature? ATTY. FREZ
Yes, Sir.[50]
Lara further attested to the fact that the search warrant was served on Gemma, who
later on entertained the search team:
Positive identification of a culprit is of great weight in determining whether an
accused is guilty or not.[51] Gemma, in claiming the defense of mistaken identity, is in reality
ATTY. FREZ denying her involvement in the crime. This Court has held that the defense of denial is insipid
and weak as it is easy to fabricate and difficult to prove; thus, it cannot take precedence over
Mr. Witness, the person to whom you served the search warrant is the positive testimony of the offended party.[52] The defense of denial is unavailing when
identified as Mrs. Gemma Ong, do you know placed astride the undisputed fact that there was positive identification of the accused.[53]
her relationship with the accused Jackson
Ong?
62
While Gemma claims she does not know Jackson Ong, the subject premises where ISSUE:
the counterfeit cigarettes were seized was registered under her admitted business Fascinate
Trading.[54] Aside from the bare allegation that she had stopped operations in the subject Whether or not Gemma Ong, setting aside the issue of alleged mistaken identity, is guilty
premises as early as February 1998, she has neither proven nor shown any evidence that she beyond reasonable doubt of Infringement under the Intellectual Property Code.
had relinquished control of the building after that date. Gemmas allegation that she did not
sign the search documents, and that the signatures therein did not match the signature on her RULING:
PRC identification card, must also be struck down as she has not shown proof that her PRC
The Supreme Court AFFIRMED the decision of Court of Appeals.
signature is the only way she has ever signed her name. She could have, at the very least,
gotten a handwriting expert to testify on her behalf that there is no way that the signatures in
the search documents and the signature on her PRC identification card could have been In McDonalds Corporation and McGeorge Food Industries, Inc. v. L.C. Big Mak Burger,
written by one and the same person; instead, she relied on the flimsy contention that the two Inc., Supreme Court held:
signatures were, on their face, different.
To establish trademark infringement, the following elements must be shown:
Gemmas defense consists of her claim of mistaken identity, her denial of her (1) the validity of plaintiffs mark;
involvement in the crime, and her accusation against the prosecution witnesses of allegedly
giving false testimonies and committing perjury. These are all weak, unproven, and unfounded (2) the plaintiffs ownership of the mark; and
claims, and will not stand against the strong evidence against her.
(3) the use of the mark or its colorable imitation by the alleged infringer results in
"likelihood of confusion." Of these, it is the element of likelihood of confusion that is the
WHEREFORE, this Court DENIES the Petition. The June 16, 2005 Decision of the Court gravamen of trademark infringement.
of Appeals in CA-G.R. CR No. 28308 is AFFIRMED.
A mark is valid if it is distinctive and not barred from registration. Once registered, not
only the marks validity, but also the registrants ownership of the mark is prima facie
SO ORDERED. presumed.
Anent the element of confusion, both the RTC and the Court of Appeals have correctly
held that the counterfeit cigarettes seized from Gemmas possession were intended to
confuse and deceive the public as to the origin of the cigarettes intended to be sold, as
FACTS: they not only bore PMPIs mark, but they were also packaged almost exactly as PMPIs
products.
On September 2003, the Regional Trial Court of Manila convicted Gemma Ong
for Infringement under Sec. 155 in relation to Sec. 170 of Republic Act. No. 8293 or the The prosecution was able to establish that the trademark "Marlboro" was not only valid
Intellectual Property Code. This decision was assailed based on facts established that for being neither generic nor descriptive, it was also exclusively owned by PMPI, as
Gemma Ong was engaged in the distribution, sale and offering for sale of counterfeit evidenced by the certificates of registration issued by the Intellectual Property Office of
Marlboro cigarettes which caused confusion and deception to public and without permit the Department of Trade and Industry.
or authority from the Telengtan Brothers and Sons Inc., the exclusive manufacturer of
Malboro cigarette in the Philippines and from the Philip Morris Products, Inc. (PMPI)
which is the registered owner and proprietor of the MARLBORO trademark.
The decision of the RTC Manila was affirmed by the Court of Appeals and hence this
appeal by certiorari by Gemma Ong praying that the decision of RTC and CA to be set
aside and reverse.
63
Irrespective of the Holistic and Dominancy tests, the Court finds no confusing similarity
between the subject marks. While both marks use the shape of a shark, the Court noted
GREAT WHITE SHARK ENTERPRISES, INC. v. DANILO M. CARALDE, JR. . G.R. No. 192294 . distinct visual and aural differences between them.
November 21, 2012
As may be gleaned from the foregoing, the visual dissimilarities between the two (2) marks are
FACTS: evident and significant, negating the possibility of confusion in the minds of the ordinary
purchaser, especially considering the distinct aural difference between the marks.
On July 31, 2002, Caralde filed before the Bureau of Legal Affairs (BLA), IPO a trademark
application seeking to register the mark "SHARK & LOGO" for his manufactured goods under
Class 25, such as slippers, shoes and sandals. Petitioner, a foreign corporation domiciled in
Florida, USA, opposed the application claiming to be the owner of the mark consisting of a Finally, there being no confusing similarity between the subject marks, the matter of whether
representation of a shark in color. It alleged that the mark pending registration is confusingly Great White Sharks mark has gained recognition and acquired becomes unnecessary.
similar with theirs which is likely to confuse the public.
Caralde averred that the subject marks are distinctively different from one another and easily
distinguishable.
The BLA Director ruled in favor of petitioners citing that the shark logo was both a dominant
feature and are similar and that both trademarks belong to the same class. The Director
General of the IPO affirmed this decision. The CA, however, reversed the decision citing that
there were no confusing similarity.
RULING:
64
G.R. No. 188225 : November 28, 2012 SCC used the facilities and equipment owned by RGP, as well as the latters business address
(No. 72 Victoria Subdivision, Barangay Dela Paz, Bin, Laguna), which was also the residential
SHIRLEY F. TORRES, Petitioner, v. IMELDA PEREZ and RODRIGO PEREZ, Respondents. address of respondents.15rll
G.R. No. 198728 In August 2003, Sunshine pulled out of the partnership, because she was hired to work in an
international school.16rllRespondent Imelda took over Sunshines responsibilities in the
partnership.17rll
SHIRLEY F. TORRES, Petitioner, v. IMELDA PEREZ and RODRIGO PEREZ, Respondents.
65
Thus, SCC remained the owner of the "Naturals" brand, and petitioner being a legitimate that probable cause for the issuance of a warrant of arrest is different from probable cause for
partner thereof had a right to file the complaint against respondents. The prosecutor found no holding a person for trial. The first is the function of the judge, while the second is the
probable cause against Sunshine, as it was established that she had withdrawn from SCC as of prosecutors.41rll Thus, respondents claimed that it was wrong for Presiding Judge Cesar O.
August 2003. Untalan to deny the prosecutors motion to dismiss for lack of probable cause on the basis of
the judges own finding that there was probable cause to issue a warrant of arrest against
The indictment was raffled to RTC Makati City, Branch 149. On 23 October 2006, it issued an respondents. Furthermore, the Judge Untalan based his finding solely on the evidence
Order finding probable cause for the issuance of a warrant of arrest against submitted by petitioner without evaluating the evidence of respondents.
respondents.31rll
In the first assailed Decision in CA-G.R. SP No. 10384642rll dated 11 March 2009, the CA
Respondents filed a petition for review of the prosecutors resolution before the Department of granted the petition. It found that the trial judge committed grave abuse of discretion
Justice (DOJ), which on 13 December 2006 issued its own Resolution32rll reversing the amounting to lack or excess of jurisdiction when he denied the prosecutors motion to dismiss
finding of existence of probable cause against them. Contrary to the prosecutors finding, the for lack of probable cause. The CA sustained the position of respondents that the finding of
DOJ found that SCC had effectively wound up the latters partnership affairs on 24 April 2006 probable cause for the filing of an information is an executive function lodged with the
when petitioner was reimbursed for her trip to China. That was the last of the payments made prosecutor. It also found that the trial judge did not make an independent assessment of the
to her to cover her share in the partnership affairs, which started after respondent Imelda evidence on record in determining the existence of probable cause for the offense of unfair
manifested her intention to cease from the partnership business on 15 December 2005. Thus, competition, as opposed to the exhaustive study made by the DOJ before arriving at its finding
when the criminal complaint for unfair competition was filed on 9 June 2006, there was "no of lack of probable cause.
longer any competition, unfair or otherwise, involving the partnership." 33rll
The CA also ruled that in determining probable cause, the essential elements of the crime
Furthermore, the DOJ ruled that even if SCC had not yet terminated its business and therefore charged must be considered, for their absence would mean that there is no criminal offense. In
still existed, respondents had the right to use the "Naturals" brand, as they were already the determining probable cause for unfair competition, the question is "whether or not the
exclusive owners of SCC following the completion of payments of petitioners share in the offenders by the use of deceit or any other means contrary to good faith passes off the goods
partnership affairs. Also, the establishment by petitioner of Tezares Enterprise which directly manufactured by him or in which he deals, or his business, or services for those of the one
competed with SCC in terms of products and its subsequent accreditation as supplier of having established such goodwill, or who shall commit any acts calculated to produce said
intimate apparel for SM in April 2006 were regarded by the DOJ as apparent indications that result."43rll The CA affirmed the findings of the DOJ and the RTC of Manila, Branch 24 that
she no longer had any share in SCC. Thus, the petition for review was granted, and the city respondents used the "Naturals" brand because they believed that they were the owners of
prosecutor of Makati was ordered to withdraw the Information against respondents for unfair SCC, which owned the brand. Furthermore, the partnership had been terminated as of April
competition. 2006; hence, the filing of the criminal complaint on 9 June 2006 could no longer prosper. Even
if SCC had not yet terminated its business, respondents, having bought petitioner out of SCC,
were already its exclusive owners and, as such, had the right to use the "Naturals" brand.
The DOJ denied the motion for reconsideration filed by petitioner on 28 March
2007.34rll Hence, she filed a petition for certiorari before the CA, where it was docketed as
CA-G.R. SP No. 98861. In her petition, she questioned the DOJ Resolution, but later withdrew According to the CA, the filing of the criminal complaint for unfair competition was nothing but
the same on 6 December 2007 for an unknown reason.35rll an offshoot of the misunderstanding and quarrel that arose when respondents initially refused
to reimburse the expenses incurred by petitioner in her trip to China and further escalated
when respondent Imelda decided to dissolve SCC.
Following the directive of the DOJ, the prosecutor filed before the RTC of Makati City, Branch
149, a Motion to Dismiss and/or Withdraw Information on 3 April 2007.36rll The trial court
denied the motion in an Order37rll dated 12 February 2008. It maintained the correctness of Petitioner moved for reconsideration44rll of the CA Decision, but the motion was denied on
its finding of existence of probable cause in the case and ruled that the findings of the DOJ 1 June 2009.45rll She then brought the matter before this Court via a Petition for Review on
would be better appreciated and evaluated in the course of the trial. Certiorari filed under Rule 45 of the Rules of Court and docketed as G.R. No.
188225.46rll Without giving due course to the petition, the Court
required47rll respondents to comment thereon. Upon their compliance,48rllpetitioner
Respondents moved for reconsideration,38rll but their motion was denied39rll by the
was required49rll to file a reply,50rll which was later received on 11 December 2009. On
RTC. Aggrieved, they filed a Petition for Certiorari (with Prayer for the Issuance of a Temporary
19 May 2011, she filed her Memorandum.51rll
Restraining Order and thereafter a Preliminary Injunction)40rll before the CA. They argued
66
Meanwhile, following the promulgation of the Decision in CA-G.R. SP No. 103846, respondents No probable cause to indict respondents
filed an Urgent Motion to Dismiss the criminal complaint for unfair competition before the RTC
on 1 April 2009.52rll The motion was duly opposed by petitioner, arguing that the CA At the outset, it is worth noting that Judge Untalan acted well within the exercise of his judicial
Decision had not yet attained finality in view of her pending petition before this Court; thus, discretion when he denied the Motion to Dismiss and/or Withdraw Information filed by the
the motion was premature.53rllThe RTC denied the motion to dismiss for lack of prosecution. His finding that there was probable cause to indict respondents for unfair
merit.54rll However, upon motion for reconsideration55rll filed by respondents, it issued competition, and that the findings of the DOJ would be better appreciated in the course of a
the Order dated 29 July 200956rll ordering the quashal of the Information against them. The trial, was based on his own evaluation of the evidence brought before him. It was an
trial court issued another Order on 19 October 200957rlldenying petitioners Motion for evaluation that was required of him as a judge.
Reconsideration.58rll
Thus, in Yambot v. Armovit,64rll this Court reiterated the mandate of judges to make a
Petitioner filed a Petition for Certiorari59rll before the CA on the ground that the trial judge personal evaluation of records submitted in support of criminal complaints filed before their
committed grave abuse of discretion amounting to lack or excess of jurisdiction when he respective salas:chanroblesvirtuallawlibrary
quashed the Information against respondents based on a CA Decision that was not yet final
and executory, being the subject of a petition still pending before this Court.
Crespo v. Mogul instructs in a very clear manner that once a complaint or information is filed in
court, any disposition of the case as to its dismissal, or the conviction or acquittal of the
On 29 September 2011, the CA issued the second assailed Decision in CA-G.R. SP No. 111903 accused, rests on the sound discretion of the said court, as it is the best and sole judge of what
affirming the RTC Orders dated 29 July 2009 and 19 October 2009. The appellate court ruled to do with the case before it. While the resolution of the prosecutorial arm is persuasive, it is
that while its Decision in CA-G.R. SP No. 103846 was still under review before this Court, not binding on the court. It may therefore grant or deny at its option a motion to dismiss or to
neithercourt had issued a restraining order or injunction that would prevent the RTC from withdraw the information based on its own assessment of the records of the preliminary
implementing the said Decision ordering the dismissal of the information against respondents. investigation submitted to it, in the faithful exercise of judicial discretion and prerogative, and
Furthermore, the CA ruled that since petitioner had withdrawn her petition in CA-G.R. SP No. not out of subservience to the prosecutor.65rll x x x. (Emphasis supplied)
98861 questioning the DOJ Resolution, the issue of whether there was probable cause had
"already been resolved with finality in the negative."60rll Thus, the trial court cannot be
Judge Untalan stood firm on this finding in his denial of the motion for reconsideration and
faulted for following the CA directive to dismiss the Information against respondents.
even initially after the CA had made a ruling on the matter. He only performed a task he was
called upon to do, and his judgment on the matter although erroneous cannot be regarded as
Opting not to file a motion for reconsideration,61rll petitioner again comes before us on a capricious and whimsical. Thus, he did not commit grave abuse of discretion amounting to lack
Petition for Review on Certiorari questioning the Decision in CA-G.R. SP No. 111903.62rll In or excess of jurisdiction.
her petition docketed as G.R. No. 198728, she argues that Presiding Judge Cesar O. Untalan
committed grave abuse of discretion amounting to lack or excess of jurisdiction when he
However, while we recognize that Judge Untalan did not commit grave abuse of discretion, we
dismissed the criminal case against respondents for unfair competition based on CA findings
take note of his apparent loss of steam when he issued the Order dated 29 July 2009 granting
that were not yet final. The trial judge was fully aware that those findings were still subject to a
respondents motion for reconsideration of his earlier ruling denying the Urgent Motion to
pending petition before this Court.
Dismiss. The good judge yielded, even though he was well aware that the CA Decision had not
yet attained finality pending review by this Court.
On 23 November 2011, the Court consolidated G.R. Nos. 198728 and 188225.63rll
We now rule on the issue of probable cause.
ISSUE
Probable cause, for purposes of filing a criminal information, is described as "such facts as are
Despite the extensive legal battle that petitioner and respondents have waged heretofore, sufficient to engender a well-founded belief that a crime has been committed and the
these petitions will be settled simply through a ruling on whether there exists probable cause respondent is probably guilty thereof, and should be held for trial."66rll
to indict respondents for unfair competition (violation of Section 168 in relation to Section 170)
under R.A. 8293.
Thus, the determination of the existence of probable cause necessitates the prior
determination of whether a crime or an offense was committed in the first place. Here, we find
OUR RULING
67
that there was no probable cause to indict respondents, because the crime of unfair
competition was not committed.
In positing that respondents were guilty of unfair competition, petitioner makes a lot of the
fact that they used the vendor code of RGP in marketing the "Naturals" products. She argues
that they passed off the "Naturals" products, which they marketed under RGP, as those of SCC;
thus, they allegedly prejudiced the rights of SCC as owner of the trademark. She also claims
that she has the personality to prosecute respondents for unfair competition on behalf of SCC.
When Judge Untalan denied the Motion to Dismiss and/or Withdraw Information filed by the
prosecution and thereby sustained the position of petitioner, his error lay in the fact that his
focus on the crime of unfair competition was unwarranted. In this case, much more important
than the issue of protection of intellectual property is the change of ownership of SCC. The
arguments of petitioner have no basis, because respondents are the exclusive owners of SCC,
of which she is no longer a partner.
Based on the findings of fact of the CA and the DOJ, respondents have completed the
payments of the share of petitioner in the partnership affairs. Having bought her out of SCC,
respondents were already its exclusive owners who, as such, had the right to use the
"Naturals" brand.
The use of the vendor code of RGP was resorted to only for the practical purpose of ensuring
that SMs payments for the "Naturals" products would go to respondents, who were the actual
suppliers.
Furthermore, even if we were to assume that the issue of protection of intellectual property is
paramount in this case, the criminal complaint for unfair competition against respondents
cannot prosper, for the elements of the crime were not present. We have enunciated in CCBPI
v. Gomez67rllthat the key elements of unfair competition are "deception, passing off and
fraud upon the public."68rllNo deception can be imagined to have been foisted on the
public through different vendor codes, which are used by SM only for the identification of
suppliers products.blrlllbrr
WHEREFORE, the Decisions dated 11 March 2009 in CA-G.R. SP No. 103846 and 29 September
2011 in CA-G.R. SP No. 111903, finding lack of probable cause for respondents alleged violation
of Section 168 in relation to Section 170 of Republic Act No. 8293 (unfair competition), are
AFFIRMED. The Information against respondents for unfair competition is
DISMISSED.rllbrr
SO ORDERED.
68
G.R. No. 194307 November 20, 2013 The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the
subject applications in the IPO e-Gazette on February 2, 2007.11 In response, respondent filed
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly BIRKENSTOCK ORTHOPAEDIE three (3) separate verified notices of oppositions to the subject applications docketed as Inter
GMBH),Petitioner, Partes Case Nos. 14-2007-00108, 14-2007-00115, and 14-2007-00116,12 claiming, inter alia,
vs. that: (a) it, together with its predecessor-in-interest, has been using Birkenstock marks in the
PHILIPPINE SHOE EXPO MARKETING CORPORATION, Respondent. Philippines for more than 16 years through the mark "BIRKENSTOCK AND DEVICE"; (b) the
marks covered by the subject applications are identical to the one covered by Registration No.
56334 and thus, petitioner has no right to the registration of such marks; (c) on November 15,
DECISION
1991, respondents predecessor-in-interest likewise obtained a Certificate of Copyright
Registration No. 0-11193 for the word "BIRKENSTOCK" ; (d) while respondent and its
PERLAS-BERNABE, J.: predecessor-in-interest failed to file the 10th Yea r DAU, it continued the use of "BIRKENSTOCK
AND DEVICE" in lawful commerce; and (e) to record its continued ownership and exclusive
Assailed in this Petition for Review on Certiorari1 are the Court of Appeals (CA) Decision2 dated right to use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a " re-application "
June 25, 2010 and Resolution3 dated October 27, 2010 in CA-G.R. SP No. 112278 which of its old registration, Registration No. 56334.13 On November 13, 2007, the Bureau of Legal
reversed and set aside the Intellectual Property Office (IPO) Director Generals Decision 4 dated Affairs (BLA) of the IPO issued Order No. 2007-2051 consolidating the aforesaid inter partes
December 22, 2009 that allowed the registration of various trademarks in favor of petitioner cases (Consolidated Opposition Cases).14
Birkenstock Orthopaedie GmbH & Co. KG.
The Ruling of the BLA
The Facts
In its Decision15 dated May 28, 2008, the BLA of the IPO sustained respondents opposition,
Petitioner, a corporation duly organized and existing under the laws of Germany, applied for thus, ordering the rejection of the subject applications. It ruled that the competing marks of
various trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark the parties are confusingly similar since they contained the word "BIRKENSTOCK" and are used
Application Serial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the on the same and related goods. It found respondent and its predecessor-in-interest as the
International Classification of Goods and Services (Nice Classification) with filing date of March prior user and adopter of "BIRKENSTOCK" in the Philippines, while on the other hand,
11, 1994; (b) "BIRKENSTOCK BAD HONNEF -RHEIN & DEVICE COMPRISING OF ROUND petitioner failed to present evidence of actual use in the trade and business in this country. It
COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEA M" under TASN opined that while Registration No. 56334 was cancelled, it does not follow that prior right over
4-1994-091509 for goods falling under Class 25 of the Nice Classification with filing date of the mark was lost, as proof of continuous and uninterrupted use in trade and business in the
March 11, 1994; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF Philippines was presented. The BLA likewise opined that petitioners marks are not well -known
ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under in the Philippines and internationally and that the various certificates of registration submitted
TASN 4-1994-095043 for goods falling under Class 10 of the Nice Classification with filing date by petitioners were all photocopies and, therefore, not admissible as evidence.16
of September 5, 1994 (subject applications).5
Aggrieved, petitioner appealed to the IPO Director General.
However, registration proceedings of the subject applications were suspended in view of an
existing registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334 The Ruling of the IPO Director General
dated October 21, 1993 (Registration No. 56334) in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo
In his Decision17 dated December 22, 2009, the IPO Director General reversed and set aside the
Marketing Corporation.6 In this regard, on May 27, 1997 petitioner filed a petition for
ruling of the BLA, thus allowing the registration of the subject applications. He held that with
cancellation of Registration No. 56334 on the ground that it is the lawful and rightful owner of
the cancellation of Registration No. 56334 for respondents failure to file the 10th Year DAU,
the Birkenstock marks (Cancellation Case).7 During its pendency, however, respondent and/or
there is no more reason to reject the subject applications on the ground of prior registration by
its predecessor-in-interest failed to file the required 10th Year Declaration of Actual Use (10th
another proprietor.18 More importantly, he found that the evidence presented proved that
Year DAU) for Registration No. 56334 on or before October 21, 2004,8 thereby resulting in the
petitioner is the true and lawful owner and prior user of "BIRKENSTOCK" marks and thus,
cancellation of such mark.9 Accordingly, the cancellation case was dismissed for being moot
entitled to the registration of the marks covered by the subject applications. 19 The IPO Director
and academic.10
General further held that respondents copyright for the word "BIRKENSTOCK" is of no
69
moment since copyright and trademark are different forms of intellectual property that cannot The Court is not convinced.
be interchanged.20
It is well-settled that "the rules of procedure are mere tools aimed at facilitating the
Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a petition attainment of justice, rather than its frustration. A strict and rigid application of the rules must
for review with the CA. always be eschewed when it would subvert the primary objective of the rules, that is, to
enhance fair trials and expedite justice. Technicalities should never be used to defeat the
Ruling of the CA substantive rights of the other party. Every party-litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free from the constraints of
technicalities."30"Indeed, the primordial policy is a faithful observance of [procedural rules],
In its Decision21 dated June 25, 2010, the CA reversed and set aside the ruling of the IPO
and their relaxation or suspension should only be for persuasive reasons and only in
Director General and reinstated that of the BLA. It disallowed the registration of the subject
meritorious cases, to relieve a litigant of an injustice not commensurate with the degree of his
applications on the ground that the marks covered by such applications "are confusingly similar,
thoughtlessness in not complying with the procedure prescribed."31 This is especially true with
if not outright identical" with respondents mark.22 It equally held that respondents failure to
quasi-judicial and administrative bodies, such as the IPO, which are not bound by technical
file the 10th Year DAU for Registration No. 56334 "did not deprive petitioner of its ownership
rules of procedure.32 On this score, Section 5 of the Rules on Inter Partes Proceedings provides:
of the BIRKENSTOCK mark since it has submitted substantial evidence showing its continued
use, promotion and advertisement thereof up to the present."23 It opined that when
respondents predecessor-in-interest adopted and started its actual use of "BIRKENSTOCK," Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases. The
there is neither an existing registration nor a pending application for the same and thus, it rules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes
cannot be said that it acted in bad faith in adopting and starting the use of such mark. 24 Finally, cases. The Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict
the CA agreed with respondent that petitioners documentary evidence, being mere technical rules of procedure and evidence but may adopt, in the absence of any applicable rule
photocopies, were submitted in violation of Section 8.1 of Office Order No. 79, Series of 2005 herein, such mode of proceedings which is consistent with the requirements of fair play and
(Rules on Inter Partes Proceedings). conducive to the just, speedy and inexpensive disposition of cases, and which will give the
Bureau the greatest possibility to focus on the contentious issues before it. (Emphasis and
underscoring supplied)
Dissatisfied, petitioner filed a Motion for Reconsideration 25 dated July 20, 2010, which was,
however, denied in a Resolution26 dated October 27, 2010. Hence, this petition.27
In the case at bar, while petitioner submitted mere photocopies as documentary evidence in
the Consolidated Opposition Cases, it should be noted that the IPO had already obtained the
Issues Before the Court
originals of such documentary evidence in the related Cancellation Case earlier filed before it.
Under this circumstance and the merits of the instant case as will be subsequently discussed,
The primordial issue raised for the Courts resolution is whether or not the subject marks the Court holds that the IPO Director Generals relaxation of procedure was a valid exercise of
should be allowed registration in the name of petitioner. his discretion in the interest of substantial justice.33
The Courts Ruling Having settled the foregoing procedural matter, the Court now proceeds to resolve the
substantive issues.
The petition is meritorious.
B. Registration and ownership of "BIRKENSTOCK."
A. Admissibility of Petitioners Documentary Evidence.
Republic Act No. (RA) 166,34 the governing law for Registration No. 56334, requires the filing of
In itsComment28 dated April 29, 2011, respondent asserts that the documentary evidence a DAU on specified periods,35 to wit:
submitted by petitioner in the Consolidated Opposition Cases, which are mere photocopies,
are violative of Section 8.1 of the Rules on Inter Partes Proceedings, which requires certified Section 12. Duration. Each certificate of registration shall remain in force for twenty years:
true copies of documents and evidence presented by parties in lieu of originals. 29 As such, they Provided, That registrations under the provisions of this Act shall be cancelled by the Director,
should be deemed inadmissible. unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue
of the certificate of registration, the registrant shall file in the Patent Office an affidavit
70
showing that the mark or trade-name is still in use or showing that its non-use is due to special Clearly, it is not the application or registration of a trademark that vests ownership thereof, but
circumstance which excuse such non-use and is not due to any intention to abandon the same, it is the ownership of a trademark that confers the right to register the same. A trademark is an
and pay the required fee. industrial property over which its owner is entitled to property rights which cannot be
appropriated by unscrupulous entities that, in one way or another, happen to register such
The Director shall notify the registrant who files the above- prescribed affidavits of his trademark ahead of its true and lawful owner. The presumption of ownership accorded to a
acceptance or refusal thereof and, if a refusal, the reasons therefor. (Emphasis and registrant must then necessarily yield to superior evidence of actual and real ownership of a
underscoring supplied) trademark.
The aforementioned provision clearly reveals that failure to file the DAU within the requisite The Courts pronouncement in Berris Agricultural Co., Inc. v. Abyadang42 is instructive on this
period results in the automatic cancellation of registration of a trademark. In turn, such failure point:
is tantamount to the abandonment or withdrawal of any right or interest the registrant has
over his trademark.36 The ownership of a trademark is acquired by its registration and its actual use by the
manufacturer or distributor of the goods made available to the purchasing public. x x x A
In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. certificate of registration of a mark, once issued, constitutes prima facie evidence of the
56334 within the requisite period, or on or before October 21, 2004. As a consequence, it was validity of the registration, of the registrants ownership of the mark, and of the registrants
deemed to have abandoned or withdrawn any right or interest over the mark "BIRKENSTOCK." exclusive right to use the same in connection with the goods or services and those that are
Neither can it invoke Section 23637 of the IP Code which pertains to intellectual property rights related thereto specified in the certificate. x x x In other words, the prima facie presumption
obtained under previous intellectual property laws, e.g., RA 166, precisely because it already brought about by the registration of a mark may be challenged and overcome in an
lost any right or interest over the said mark. appropriate action, x x x by evidence of prior use by another person, i.e. , it will controvert a
claim of legal appropriation or of ownership based on registration by a subsequent user. This is
because a trademark is a creation of use and belongs to one who first used it in trade or
Besides, petitioner has duly established its true and lawful ownership of the mark
commerce.43 (Emphasis and underscoring supplied)
"BIRKENSTOCK."
In the instant case, petitioner was able to establish that it is the owner of the mark
Under Section 238 of RA 166, which is also the law governing the subject applications, in order
"BIRKENSTOCK." It submitted evidence relating to the origin and history of "BIRKENSTOCK" and
to register a trademark, one must be the owner thereof and must have actually used the mark
its use in commerce long before respondent was able to register the same here in the
in commerce in the Philippines for two (2) months prior to the application for registration.
Philippines. It has sufficiently proven that "BIRKENSTOCK" was first adopted in Europe in 1774
Section 2-A39 of the same law sets out to define how one goes about acquiring ownership
by its inventor, Johann Birkenstock, a shoemaker, on his line of quality footwear and thereafter,
thereof. Under the same section, it is clear that actual use in commerce is also the test of
numerous generations of his kin continuously engaged in the manufacture and sale of shoes
ownership but the provision went further by saying that the mark must not have been so
and sandals bearing the mark "BIRKENSTOCK" until it became the entity now known as the
appropriated by another. Significantly, to be an owner, Section 2-A does not require that the
petitioner. Petitioner also submitted various certificates of registration of the mark
actual use of a trademark must be within the Philippines. Thus, under RA 166, one may be an
"BIRKENSTOCK" in various countries and that it has used such mark in different countries
owner of a mark due to its actual use but may not yet have the right to register such ownership
worldwide, including the Philippines.44
here due to the owners failure to use the same in the Philippines for two (2) months prior to
registration.40
On the other hand, aside from Registration No. 56334 which had been cancelled, respondent
only presented copies of sales invoices and advertisements, which are not conclusive evidence
It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring
of its claim of ownership of the mark "BIRKENSTOCK" as these merely show the transactions
ownership.1wphi1 If the applicant is not the owner of the trademark, he has no right to apply
made by respondent involving the same.45
for its registration. Registration merely creates a prima facie presumption of the validity of the
registration, of the registrants ownership of the trademark, and of the exclusive right to the
use thereof. Such presumption, just like the presumptive regularity in the performance of In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful
official functions, is rebuttable and must give way to evidence to the contrary.41 owner of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in
bad faith in having it registered in its name. In this regard, the Court quotes with approval the
words of the IPO Director General, viz.:
71
The facts and evidence fail to show that [respondent] was in good faith in using and in Director General whereby in its decision, the latter reversed and set aside the ruling of the BLA
registering the mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly thus allowing the registration of the subject applications.
distinct and arbitrary mark. It is very remote that two persons did coin the same or identical
marks. To come up with a highly distinct and uncommon mark previously appropriated by Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a
another, for use in the same line of business, and without any plausible explanation, is petition for review with the Court of Appeals. In its decision dated June 25, 2010, the CA
incredible. The field from which a person may select a trademark is practically unlimited. As in reversed and set aside the ruling of the IPO Director General and reinstated that of the BLA.
all other cases of colorable imitations, the unanswered riddle is why, of the millions of terms The petitioner filed a Motion for Reconsideration but was denied by the CA. Hence , this
and combinations of letters and designs available, [respondent] had to come up with a mark petition to the Supreme Court.
identical or so closely similar to the [petitioners] if there was no intent to take advantage of
the goodwill generated by the [petitioners] mark. Being on the same line of business, it is
ISSUE: 1.Whether or not the petitioners documentary evidence, although photocopies, are
highly probable that the [respondent] knew of the existence of BIRKENSTOCK and its use by the
admissible in court?
[petitioner], before [respondent] appropriated the same mark and had it registered in its
name.46
2.Whether or not the subject marks should be allowed registration in the name of the
petitioner?
WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and Resolution dated
October 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are REVERSED and SET
ASIDE. Accordingly, the Decision dated December 22, 2009 of the IPO Director General is HELD:
hereby REINSTATED.
1.The court ruled yes. It is a well-settled principle that the rules of procedure are mere tools
SO ORDERED. aimed at facilitating the attainment of justice, rather than its frustration. A strict and rigid
application of the rules must always be eschewed when it would subvert the primary objective
of the rules, that is, to enhance fair trials and expedite justice. In the light of this, Section 5 of
FACTS: Petitioner, a corporation duly organized and existing under the laws of Germany
the Rules on Inter Partes Proceedings provides that, The Bureau shall not be bound by strict
applied for various trademark registrations before the Intellectual Property Office (IPO).
technical rules of procedure and evidence but may adopt, in the absence of any applicable rule
However, the applications were suspended in view of the existing registration of the mark
herein, such mode of proceedings which is consistent with the requirements of fair play and
BIRKENSTOCK AND DEVICE under Registration No. 56334 dated October 21, 1993 in the conducive to the just, speedy and inexpensive disposition of cases, and which will the Bureau
name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of
the greatest possibility to focus on the contentious issues before it.
respondent Philippine Shoe Expo Marketing Corporation.
In the case at bar, it should be noted that the IPO had already obtained the originals of such
On May 27, 1997, petitioner filed a petition (Cancellation Case) for cancellation of
documentary evidence in the related Cancellation Case earlier before it. Under the
Registration No. 564334 on the ground that it is the lawful and rightful owner of the
circumstance and the merits of the instant case as will be subsequently discussed, the Court
Birkenstock marks. During its pendency, however, respondent and/or it predecessor-in-interest
holds that the IPO Director Generals relaxation of procedure was a valid exercise of his
failed to file the required 10th Year Declaration of Actual Use (10th Year DAU) for Registration discretion in the interest of substantial justice.
No. 56334 on or before October 21, 2004, thereby resulting the cancellation of such mark.
Accordingly, the cancellation case was dismissed for being moot and academic thereby paving
the way for the publication of the subject applications. 2.The court ruled in favour of the petitioner. Under Section 12 of Republic Act 166, it provides
that, Each certificate of registration shall remain in force for twenty years: Provided, that the
registration under the provisions of this Act shall be cancelled by the Director, unless within
In response, respondent filed with the Bureau of Legal Affairs (BLA) of the IPO three
one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the
separate verified notices of opposition to the subject applications docketed as Inter Partes
certificate of registration, the registrant shall file in the Patent Office an affidavit showing that
Cases claiming, among others, it, together with its predecessor-in-interest, has been using the the mark or trade-name is still in use or showing that its non-use is due to special circumstance
Birkenstock marks in the Philippines for more than 16 years through the mark BIRKENSTOCK
which excuse such non-use and is not due to any intention to abandon the same, and pay the
AND DEVICE. In its Decision, the BLA of the IPO sustained respondents opposition, thus required fee.
ordering the rejection of the subject applications. Aggrieved, petitioner appealed to the IPO
72
In the case at bar, respondent admitted that it failed to file the 10th Year DAU for Registration
No. 56334 within the requisite period, or on or before October 21, 2004. As a consequence, it
was deemed to have abandoned or withdrawn any right or interest over the mark
BIRKENSTOCK. It must be emphasized that registration of a trademark, by itself, is not a
mode of acquiring ownership. If the applicant is not the owner of the trademark, he has no
right to apply for its registration. Registration merely creates a prima facie presumption of the
validity of the registration. Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give way to evidence to the contrary.
Besides, petitioner has duly established its true and lawful ownership of the mark
BIRKENSTOCK. It submitted evidence relating to the origin and history of BIRKENSTOCK and
it use in commerce long before respondent was able to register the same here in the
Philippines. Petitioner also submitted various certificates of registration of the mark
BIRKENSTOCK in various countries and that it has used such mark in different countries
worldwide, including the Philippines.
73
G.R. No. 194872 June 9, 2014 Sometime in 2005, Pfizer discovered that Sahar also applied for and was issued a CPR by the
FDA for Atorvastatin Calcium under the brand name Atopitar. 11 It also found out that Sahar has
SAHAR INTERNATIONAL TRADING, INC., Petitioner, been selling and distributing Atopitar in the provinces of Bicol, Zamboanga, Cebu, Ilocos Norte,
vs. as well as in Tarlac; and thatSahars marketing ads showed that Atopitar is neither
WARNER LAMBERT LLC and PFIZER, (Philippines), CO., INC. Respondents. manufactured by Warner Lambert nor any Pfizer company, but by Geofman12 Pharmaceuticals
of Pakistan. Upon further investigation and laboratory testing, Pfizer learned that the
Atorvastatin Calcium that is used in Atopitar is also in its crystalline form.13
RESOLUTION
Pfizer immediately sent numerous letters to Sahar informing the latter of Warner Lamberts
PERLAS-BERNABE, J.:
patents over Atorvastatin Calcium and demanding it to cease and desist from selling and
distributing said pharmaceutical substance under the brand name Atopitar. However, Sahar did
Assailed in this petition for review on certiorari1 are the Decision2 dated April 22, 2010 and the not heed such demands and replied that the patent over Atorvastatin Calcium had already
Resolution3 dated December 21, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 106455 expired in Pakistan and, therefore, it believed the same can already be freely distributed and
which annulled and set aside the Orders4 dated August 5, 2008 and September 25, 2008 of the marketed in the Philippines by any entity.14 Thus, Warner Lambert and Pfizer (respondents)
Regional Trial Court of Makati City, Branch 149 (RTC), thereby directing the said court to issue a filed a Complaint15 for Patent Infringement, Damages, and Injunction, with applications for the
writ of preliminary injunction enjoining petitioner Sahar International Trading, Inc. (Sahar), its issuance of Temporary Restraining Orders and/or Writs of Preliminary Injunction against Sahar
agents, representatives, and assigns, during the pendency of Civil Case No. 08-424, from before the RTC, docketed as Civil Case No. 08-424.16 In support of its prayer for injunctive relief,
making, using or offering for sale, or distributing Atorvastatin or Atorvastatin Calcium products respondents alleged that Sahars acts of importing, selling, and offering for sale Atorvastatin
to various hospitals, drugstores, or to any other individual or entity in the Philippines, or from and Atorvastatin Calcium products under the brand name Atopitar constitute acts of patent
otherwise infringing the patents of respondent Warner Lambert Co., LLC (Warner Lambert)' infringement as defined in Section 7617 of Republic Act No. (RA) 8293,18otherwise known as the
over the foregoing drugs. "Intellectual Property Code of the Philippines,"19 and that unless Sahar is enjoined from doing
said acts, they will suffer irreparable damage and render any judgment ineffectual.20
The Facts
In opposition to the prayer for injunctive relief, Sahar assailed the validity of Warner Lamberts
Warner Lambert, a foreign corporation, is the registered owner of three (3) Philippine patents, patents, maintaining that: (a) the ingredients and the process in the making of the Atorvastatin
namely: (a) Letters Patent (LP) No. 26330 for the pharmaceutical substance Atorvastatin valid Calcium found in Atopitar is substantially different from that found in Lipitor; (b) the FDAs
until April 29, 2009; (b) LP No. 29149 for the pharmaceutical substance Atorvastatin Calcium issuance of a CPR in its favor should be deemed prima facie evidence that it is authorized to
valid until September 26, 2012;5 and (c) LP No. 1-1996-53719 for the pharmaceutical substance sell and distribute Atopitar in the Philippines; and (c) there is no urgent need to enjoin the sale
Atorvastatin Calcium in crystalline form valid until October 23, 2019 (subject patents).6 In and distribution of Atopitar in the Philippine market, considering that Warner and Pfizer
general, Atorvastatin blocks the production of cholesterol in the body and is used to reduce the themselves took more than two (2) years to file their complaint.21
amounts of LDL (bad cholesterol), total cholesterol, triglycerides (another type of fat), and
apolipoprotein B (a protein needed to make cholesterol) in a persons blood. 7 Atorvastatin is The RTC Ruling
also used to increase the level of HDL (good cholesterol) in ones blood. These actions are
important in reducing the risk of hardening of the arteries, which can lead to heart attacks,
In an Order22 dated August 5, 2008, the RTC denied respondents application for the issuance
strokes, and peripheral vascular diseases.8 Warner Lambert and its worldwide affiliates sell
of a writ of preliminary injunction against the alleged patent infringement of Sahar. The RTC
products covered by the subject patents under the brand name Lipitor.9
deemed it proper not to grant such prayer, considering that the instant case is principally for
injunction and damages, and, as such, the issuance of an injunctive writ "would in effect result
On the other hand, respondent Pfizer, Inc. (Pfizer) is the exclusive licensee of Warner Lambert in [the] premature disposition of the main case and would defeat the purpose of preliminary
to import, market, distribute, and sell products covered by the subject patents in the injunctive relief."23
Philippines. To this end, Pfizer applied for and was issued various Certificates of Product
Registration (CPR) from the Bureau of Food and Drugs (now, Food and Drug Administration
Respondents filed a Motion for Reconsideration24 dated August 20, 2008, which was, however,
[FDA]) in order to validly sell and promote such products in the Philippine market.10
denied by the RTC in an Order25 dated September 25, 2008. Aggrieved, respondents filed a
petition for certiorari26 before the CA.
74
The CA Ruling The Court's Ruling
In a Decision27 dated April 22, 2010, the CA annulled and set aside the assailed orders of the The petition is dismissed on the ground of mootness.
RTC and issued a writ of preliminary injunction enjoining Sahar, its agents, representatives, and
assigns, during the pendency of Civil Case No. 08-424, from making, using or offering for sale, A case or issue is considered moot and academic when it ceases to present a justiciable
or distributing Atopitar in the Philippine market.28 controversy by virtue of supervening events, so that an adjudication of the case or a
declaration on the issue would be of no practical value or use. In such instance, there is no
The CA held that from the evidence presented, respondents have established their right to actual substantial relief which a petitioner would be entitled to, and which would be negated
preliminary injunctive relief against Sahars acts of selling and distributing Atorvastatin Calcium by the dismissal of the petition. Courts generally decline jurisdiction over such case or dismiss
under the brand name Atopitar, considering that: (a) Warner Lambert is the registered owner it on the ground of mootness. This is because the judgment will not serve any useful purpose
of the subject patents which are still existing and effective; (b) Sahar does not deny that it has or have any practical legal effect because, in the nature of things, it cannot be enforced.37
been selling and distributing products using Atorvastatin and Atorvastatin Calcium in crystalline
form; and (c) respondents witnesses testified that the presence of Atopitaris causing confusion Applying the foregoing, the Court finds that the CA's supervening promulgation of its Decision
among medical practitioners as to the availability of Lipitor and validity of the subject patents dated November 5, 2013 in CA-G.R. CV No. 97495 - which reversed the RTC's Judgment dated
registered under the name of Warner Lambert.29 March 11, 2011 in Civil Case No. 08-424 and thereby made the writ of preliminary injunction
permanent - rendered the present case moot and academic. This is because the primordial
Further, contrary to the RTCs findings, the CA held that the issuance of a writ of preliminary issue raised in the instant petition is precisely the propriety of the aforesaid issuance. Since the
injunction in respondents favor would not result in the prejudgment of the instant case writ of preliminary injunction is but an incident of the patent infringement case which had
because other issues, such as whether or not Sahar is indeed guilty of patent infringement and already been resolved by the CA, ruling on its propriety would be merely an academic exercise
thus, liable for damages, still need to be resolved through full-blown trial.30 carrying no practical effect. Accordingly, the Court is constrained to dismiss the instant petition.
In this relation, it is relevant to point out that it would be premature for the Court to tackle the
Dissatisfied, Sahar moved for reconsideration,31 which was, however, denied by the CA in a merits of the CA's recent decision for the reason that it is not the matter herein appealed.
Resolution32 dated December 21, 2010.1wphi1 Hence, this petition.
WHEREFORE, the petition is DISMISSED for being moot and academic.
The Issue Before the Court
SO ORDERED.
The sole issue for the Courts resolution is whether or not the CA was correct in issuing a writ
of preliminary injunction enjoining Sahar, its agents, representatives, and assigns, during the
pendency of Civil Case No. 08-424 from making, using or offering for sale, or distributing
Atopitar in the Philippine market.
At this point, it must be noted that on March 11, 2011 and during the pendency of the instant
petition, the RTC issued a Judgment33 dismissing Civil Case No. 08-424 on the ground of lack of
cause of action. Thereafter, respondents filed an appeal before the CA, docketed as CA-G.R. CV
No. 97495.34 In a Decision35 dated November 5, 2013, the CA reversed and set aside the RTC
ruling and found Sahar liable for patent infringement, and thus, ordered that: (a) Sahar pay
respondents P300,000.00 as temperate or moderate damages, P50,000.00 as exemplary
damages, and P50,000.00 as attorneys fees and litigation expenses; (b) the writ of preliminary
injunction that it issued in its April 22, 2010 Decision in CA-G.R. SP No. 106455 be made
permanent; and (c) Sahars Atopitar, wherever they may be found in the Philippines, including
materials and implements used in the commission of patent infringement, be condemned,
seized, and forfeited.36
75
G.R. No. 195549 September 3, 2014 of which acts constitute unfair competition, is and are contrary to law, morals, good customs
and public policy and have caused [respondent] damages in terms oflost and unrealizedprofits
WILLAWARE PRODUCTS CORPORATION, Petitioner, in the amount of TWO MILLION PESOS as of the date of [respondents] complaint.
vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent. Furthermore, [petitioners] tortuous conduct compelled [respondent] to institute this action
and thereby to incur expenses in the way of attorneys fees and other litigation expenses in the
DECISION amount of FIVE HUNDRED THOUSAND PESOS (P500,000.00).
PERALTA, J.: In its Answer, [petitioner] denies all the allegations of the [respondent] except for the following
facts: that it is engaged in the manufacture and distribution of kitchenware items made of
plastic and metal and that theres physical proximity of [petitioners] office to [respondent]s
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
office, and that someof [respondents] employees had transferred to [petitioner] and that over
seeking to set aside the Decision1 dated November 24, 2010 and Resolution2 dated February 10,
the years [petitioner] had developed familiarity with [respondents] products, especially its
2011 of the Court of Appeals (CA) in CA-G.R. CV No. 86744.
plastic made automotive parts.
The facts, as found by the Regional Trial Court (RTC), are as follows:
As its Affirmative Defenses, [petitioner] claims that there can be no unfair competition as the
plastic-made automotive parts are mere reproductions of original parts and their construction
[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed this present and composition merely conforms to the specificationsof the original parts of motor vehicles
complaint for damages for unfair competition with prayer for permanent injunction to enjoin they intend to replace. Thus, [respondent] cannot claim that it "originated" the use of plastic
[petitioner] Willaware Products Corporation ([petitioner] for short) from manufacturing and for these automotive parts. Even assuming for the sake of argument that [respondent] indeed
distributing plastic-made automotive parts similar to those of [respondent]. originated the use of these plastic automotive parts, it still has no exclusive right to use,
manufacture and sell these as it has no patent over these products. Furthermore, [respondent]
[Respondent] alleged that it is a duly registeredpartnership engaged in the manufacture and is not the only exclusive manufacturer of these plastic-made automotive parts as there are
distribution of plastic and metal products, with principal office at No. 100 Mithi Street, other establishments which were already openly selling them to the public.3
Sampalukan, Caloocan City. Since its registration in 1992, [respondent] has been
manufacturing in its Caloocan plant and distributing throughout the Philippines plastic-made After trial on the merits, the RTC ruled in favor of respondent. It ruled that petitioner clearly
automotive parts. [Petitioner], on the other hand, which is engaged in the manufacture and invaded the rights or interest of respondent by deliberately copying and performing acts
distribution of kitchenware items made of plastic and metal has its office near that of amounting to unfair competition. The RTC further opined that under the circumstances, in
[respondent]. [Respondent] further alleged that in view of the physical proximity of order for respondents property rights to be preserved, petitioners acts of manufacturing
[petitioners] office to [respondents] office, and in view of the fact that some of the similar plastic-made automotive parts such as those of respondents and the selling of the
[respondents] employeeshad transferred to [petitioner], [petitioner] had developed familiarity sameproducts to respondents customers, which it cultivated over the years, will have to be
with [respondents] products, especially its plastic-made automotive parts. enjoined. The dispositive portion of the decision reads:
That sometime in November 2000, [respondent] discovered that [petitioner] had been WHEREFORE, premises considered, the court finds the defendant liable to plaintiff Two Million
manufacturing and distributing the same automotive parts with exactly similar design, same (P2,000,000.00) Pesos, as actual damages, One Hundred Thousand (P100,000.00) Pesos as
material and colors but was selling these products at a lower price as [respondents] attorneys fees and One Hundred Thousand (P100,000.00) Pesos for exemplary damages. The
plastic-made automotive parts and to the same customers. court hereby permanently [enjoins] defendant from manufacturing the plastic-made
automotive parts as those manufactured by plaintiffs.
[Respondent] alleged that it had originated the use of plastic in place of rubber in the
manufacture ofautomotive underchassis parts such as spring eye bushing, stabilizer bushing, SO ORDERED.4
shock absorberbushing, center bearing cushions, among others. [Petitioners] manufacture of
the same automotive parts with plastic materialwas taken from [respondents] idea of using
Thus, petitioner appealed to the CA.
plastic for automotive parts. Also, [petitioner] deliberately copied [respondents] products all
76
On appeal, petitioner asserts that ifthere is no intellectual property protecting a good Hence, the present Petition for Review wherein petitioner raises the following issues for our
belonging to another,the copying thereof for production and selling does not add up to unfair resolution:
competition as competition is promoted by law to benefit consumers. Petitioner further
contends that it did not lure away respondents employees to get trade secrets. It points out (1) Whether or not there is unfair competition under human relations when the parties are not
that the plastic spare parts sold by respondent are traded in the market and the copying of competitors and there is actually no damage on the part of Jesichris?
these can be done by simplybuying a sample for a mold to be made.
(2) Consequently, if there is no unfair competition, should there be moral damages and
Conversely, respondent averred that copyright and patent registrations are immaterial for an attorneys fees?
unfair competition case to prosper under Article 28 of the Civil Code. It stresses that the
characteristics of unfair competition are present in the instant case as the parties are trade
(3) Whether or not the addition of nominal damages is proper although no rights have been
rivals and petitioners acts are contrary to good conscience for deliberately copying its
established?
products and employing its former employees.
(4) If ever the right of Jesichris refersto its copyright on automotive parts, should it be
In a Decision dated November 24,2010, the CA affirmed with modification the ruling of the RTC.
considered in the light of the said copyrights were considered to be void by no less than this
Relevant portions of said decision read:
Honorable Court in SC GR No. 161295?
Despite the evidence showing thatWillaware took dishonest steps in advancing its business
(5) If the right involved is "goodwill" then the issue is: whether or not Jesichris has established
interest against Jesichris, however, the Court finds no basis for the award by the RTC of actual
"goodwill?"6
damages. One is entitled to actual damages as one has duly proven. The testimony of Quejada,
who was engaged by Jesichris in 2001 to audit its business, only revealed that there was a
discrepancy between the sales of Jesichris from 2001 to 2002. No amount was mentioned. As In essence, the issue for our resolution is: whether or not petitioner committed acts amounting
for Exhibit "Q," which is a copy of the comparative income statement of Jesichris for 1999-2002, to unfair competition under Article 28 of the Civil Code.
it shows the decline of the sales in 2002 in comparison with those made in 2001 but it does not
disclose if this pertains to the subject automotive parts or to the other products of Jesichris like Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil Code
plates. on humanrelations, and not unfair competition under Republic Act No. 8293, 7 as the present
suit is a damage suit and the products are not covered by patent registration. A fortiori, the
In any event, it was clearly shown that there was unfair competition on the part of Willaware existence of patent registration is immaterial in the present case.
that prejudiced Jesichris. It is only proper that nominal damages be awarded in the amount of
Two Hundred Thousand Pesos (P200,000.00) in order to recognize and vindicate Jesichris The concept of "unfair competition"under Article 28 is very much broader than that covered by
rights. The RTCs award of attorneys fees and exemplary damages is also maintained. intellectual property laws. Under the present article, which follows the extended concept of
"unfair competition" in American jurisdictions, the term coverseven cases of discovery of trade
xxxx secrets of a competitor, bribery of his employees, misrepresentation of all kinds, interference
with the fulfillment of a competitors contracts, or any malicious interference with the latters
business.8
WHEREFORE, premises considered, the Decision dated April 15, 2003 of the Regional Trial
Court of Caloocan City, Branch 131, in Civil Case No. C-19771 is hereby MODIFIED. The award
of Two Million Pesos (P2,000,000.00) actual damages is deleted and in its place, Two Hundred With that settled, we now come to the issue of whether or not petitioner committed acts
Thousand Pesos nominal damages is awarded. amounting tounfair competition under Article 28 of the Civil Code.
Dissatisfied, petitioner moved for reconsideration. However, the same was denied for lack of Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or
merit by the CA in a Resolution dated February 10, 2011. industrial enterprises or in labor through the use of force, intimidation, deceit, machination or
77
any other unjust, oppressive or high-handed method shall give rise to a right of action by the same position he occupied with [respondent]. These sequence of events relating to his
person who thereby suffers damage." employment by [petitioner] is suspect too like the situation with De Guzman.11
From the foregoing, it is clear thatwhat is being sought to be prevented is not competitionper Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of
sebut the use of unjust, oppressive or high- handed methods which may deprive others of a suddenly shifting his business from manufacturing kitchenware to plastic-made automotive
fair chance to engage in business or to earn a living. Plainly,what the law prohibits is unfair parts; his luring the employees of the respondent to transfer to his employ and trying to
competition and not competition where the means usedare fair and legitimate. discover the trade secrets of the respondent.12
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must Moreover, when a person starts an opposing place of business, not for the sake of profit to
involve an injury to a competitor or trade rival, and (2) it must involve acts which are himself, but regardless of loss and for the sole purpose of driving his competitor out of
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or business so that later on he can take advantage of the effects of his malevolent purpose, he is
otherwise unlawful; in the language of our law, these include force, intimidation, deceit, guilty of wanton wrong.13 As aptly observed by the courta quo, the testimony of petitioners
machination or any other unjust, oppressive or high-handed method. The public injury or witnesses indicate that it acted in bad faith in competing with the business of respondent, to
interest is a minor factor; the essence of the matter appears to be a private wrong perpetrated wit: [Petitioner], thru its General Manager, William Salinas, Jr., admitted that it was never
by unconscionable means.9 engaged in the business of plastic-made automotive parts until recently, year 2000:
Here, both characteristics are present. Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic)
not? Manufacturer of kitchenware and distributor ofkitchenware, is it not? Mr. Salinas: Yes, sir.
First, both parties are competitors or trade rivals, both being engaged in the manufacture of Atty. Bautista: And you said you have known the [respondent] Jesichris Manufacturing Co., you
plastic-made automotive parts. Second, the acts of the petitioner were clearly "contrary to have known it to be manufacturing plastic automotive products, is it not? Mr. Salinas: Yes, sir.
good conscience" as petitioner admitted having employed respondents formeremployees, Atty. Bautista: In fact, you have been (sic) physically become familiar with these products,
deliberately copied respondents products and even went to the extent of selling these plastic automotive products of Jesichris? Mr. Salinas: Yes, sir.
products to respondents customers.10
How [petitioner] was able to manufacture the same products, in terms of color, size, shape and
To bolster this point, the CA correctly pointed out that petitioners hiring of the former composition as those sold by Jesichris was due largely to the sudden transfer ofJesichris
employees of respondent and petitioners act of copying the subject plastic parts of employees to Willaware.
respondent were tantamount to unfair competition, viz.:
Atty. Bautista: Since when have you been familiar with Jesichris Manufacturing Company?
The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with Mr. Salinas: Since they transferred there (sic) our place.
the business of [respondent].1wphi1 [Petitioners] acts can be characterized as executed with Atty. Bautista: And that was in what year? Mr. Salinas: Maybe four (4) years. I dont know the
mischievous subtle calculation. To illustrate, in addition to the findings of the RTC, the Court exact date.
observes that [petitioner] is engaged in the production of plastic kitchenware previous to its Atty. Bautista: And some of the employees of Jesichris Manufacturing Co. have transferred to
manufacturing of plasticautomotive spare parts, it engaged the services of the then mold your company, is it not?
setter and maintenance operator of [respondent], De Guzman, while he was employed by the Mr. Salinas: Yes, sir.
latter. De Guzman was hired by [petitioner] in order to adjust its machinery since quality plastic Atty. Bautista: How many, more or less?
automotive spare parts were not being made. It baffles the Court why [petitioner] cannot rely Mr. Salinas: More or less, three (3).
onits own mold setter and maintenance operator to remedy its problem. [Petitioners] Atty. Bautista: And when, in what year or month did they transfer to you?
engagement of De Guzman indicates that it is banking on his experience gained from working Mr. Salinas: First, November 1.
for [respondent]. Atty. Bautista: Year 2000?
Mr. Salinas: Yes sir. And then the other maybe February, this year. And the other one, just one
month ago.
Another point we observe is that Yabut, who used to be a warehouse and delivery man of
[respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this
accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the
78
That [petitioner] was clearly outto take [respondent] out of business was buttressed by the SO ORDERED.
testimony of [petitioners] witness, Joel Torres:
In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code. Held: Yes. Article 28 of the Civil Code applies in the case and not RA 8293 because the product
is not patented. Article 28 seeks to prevent the use of unjust, oppressive or high-handed
However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been methods which may deprive others of a fair chance to engage in business or to earn a living.
deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages is Two characteristics must be present in order to qualify for unfair competition. One is that it
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand must involve an injury to a competitor or trade rival and the other is that it must involve an act
Pesos (P50,000.00). which is characterized as contrary to good conscience or shocking to judicial sensibilities or
otherwise unlawful. Both of these are present in this case. Both parties are trade rivals
engaged in the sale of plastic-made automotive parts. The acts of petitioner of employing the
WHEREFORE, the instant petition is DENIED. The Decision dated November 24, 2010 and
respondents for employees, deliberately copying respondents products and selling these
Resolution dated February 10, 2011 of the Court of Appeals in CA-G.R. CV No. 86744 are
products are contrary to good conscience. It is evident that petitioner is engaged in unfair
hereby AFFIRMED with MODIFICATION that the award of attorney's fees be lowered to Fifty
competition when he suddenly shifter his business from manufacturing kitchenware to
Thousand Pesos (P50,000.00).
79
plastic-made automotive parts, in enticing the employees of the respondent to transfer to his
business and trying to discover the trade secrets of the respondent.
80
G.R. No. 205800 September 10, 2014 On 17 March 2010, counsel for petitioners filed a letter-complaint with the Chief of the
Philippine National Police Criminal Investigation and Detection Group. The case was assigned
MICROSOFT CORPORATION and ADOBE SYSTEMS INCORPORATED, Petitioners, to Police Senior Inspector Ernesto V. Padilla (Padilla).6
vs.
SAMIR FARAJALLAH, VIRGILIO D.C. HERCE, RACHEL P. FOLLOSCO, JESUSITO G. MORALLOS, On 26 March 2010, Padilla, Serrano, and Moradoz went to the office of respondents. Using a
and MA. GERALDINE S. GARCIA (directors and officers of NEW FIELDS (ASIA PACIFIC), legitimate business pretext, they were able to use two computers owned by New Fields and
INC.), Respondents. obtained the following information regarding the installed Microsoft and Adobe software:
The Case
Microsoft Windows XP Pro V2002 SP2 55274-640-1582543-23775
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court which
Microsoft Office Word 2007 Enterprise
seeks to reverse and set aside the Decision1 of the Court of Appeals (CA) dated 28 June 2012 in 89388-707-0358973-65509
CA-G.R. SP No. 116771 and the Resolution2 of the CA dated 30 January 2013. The Decision and
Resolution sustained the orders of the Regional Trial Court of Manila, Branch 21 (RTC) quashing Edition 2007
Search Warrant Nos. 10-15912 and 10-15913.
Adobe Acrobat 8 Pro (1) 1118-1061-0904-4874-2027
The Facts
Microsoft Corporation and Adobe Systems Incorporated (petitioners) are corporations Second computer
organized and existing under the laws of the United States. Microsoft Corporation is the owner
of all rights including copyright relating to all versions and editions of Microsoft software 3 and
the corresponding users manuals, and the registeredowner of the "Microsoft" "MS DOS" Installed Software Product I.D./Serial Number
trademarks in the Philippines. Adobe Systems Incorporatedis the owner of all rights including
copyright relating to all versions and editions of Adobe Software.4 Microsoft Windows XP Pro V2002 SP2 55274-640-1582543-23442
Samir Farajallah, Virgilio D.C. Herce, Rachel P. Follosco, Jesusito G. Morallos and Ma. Geraldine Microsoft Office Word 2007 Enterprise
S. Garcia (respondents) are the directors and officers of New Fields (Asia Pacific), Inc., a 89388-707-0358973-65709
domestic corporation with principal office at Unit 1603, East Tower, PhilippineStock Exchange Edition 2007
Center, Exchange Road, Ortigas Center, Pasig City.
Adobe Acrobat 8 Pro (1) 1118-1061-0904-4874-2027
Petitioners claim that in September 2009, they were informed that New Fields was unlawfully
reproducing and using unlicensed versions of their software. Orion Support, Inc.(OSI) was
engaged by petitioners to assist in the verification of this information. Two OSI Market
Researchers, Norma L. Serrano (Serrano) and Michael A. Moradoz (Moradoz) were assigned to Padilla was trained to distinguish original from counterfeit software,7 and he saw the screens
confirm the informant's tip. Serrano and Moradoz were trained to detect unauthorized copies of the computers used by the OSI staff, including the product I.D. Nos. of the installed
of Adobe and Microsoft software.5 software.
81
In their Joint Affidavit, Serrano and Moradoz stated that: was set for hearing on 11 June 2010. During the hearing on the motion, petitioners were
allowed by the RTC to file their Comment/Opposition on or before 21 June 2010. 12
There are at least two (2) computers using common product identification and/or serial
numbers of MICROSOFT and ADOBE software. This is one indication that the software being In their Comment/Opposition dated 21 June 2010,13 petitioners alleged that:
used is unlicensed or was illegally reproduced or copied. Based on the training we attended, all
ADOBE and MICROSOFTsoftware should only be installed in one computer, unless they avail of The Motion [to Quash] failed to comply with the mandatory 3-day notice rule under the Rules
an Open Licese Agreement from the software developer, which is not the case in NEW FIELDS. of Court. Hence it is nothing but a worthless piece of paper.
In this case, the first three sets of numbers of the Product I.D. Nos. of the MICROSOFT
Windows XP Pro operating System software program installed in the two (2) computerunits we xxxx
used, i.e., "55274-640-1582543-xxxxx", were the same. We also observed that the first three
sets of numbers of the Product I.D Nos. of the MICROSOFT Office 2007 (Word) software in the
In this case, the Motion of Respondents was scheduled for hearing on 11 June 2010. However,
two (2) computers we used, i.e., "89388-707-0358973-xxxxx", were also the same. Ostensibly,
Respondents only furnished [petitioners] a copy of the Motion on 10 June 2010, or just1 day
this means that NEW FIELDS only used one (1) installer of the MICROSOFT Windows XP
before the scheduled hearing, which was in clear violation of the 3-day notice rule.14
operating system software and one (1) installer of the MICROSOFT Office software program on
two (2) computers. Based on our training, if the first three sets of numbers of the Product I.D.
Nos. of the MICROSOFT software installed are the same, it signifies that it came from one On 29 June 2010, the RTC issued an Order quashing both warrants and directing that "allthe
installer. It does not matter [if] the last 5 digits of the Product I.D. Nos. are different because items seized from the respondents be returned x x x."15 According to the RTC,
this is computer-generated and therefore varies with every installation. Apart from the petitionersshould have identified which specific computer had the pirated software. 16 The RTC
MICROSOFT software, the serial numbers of the ADOBE software installed in the computer added that no criminal charge has been filed yet, despite the fact that the seized items have
units we used were also the same, signifying that NEW FIELDS only used one (1) installer of the been in petitioners possession for several weeks since the warrants were issued. Lastly, the
ADOBE software program on two (2) computers.8 (Emphasis supplied) RTC dismissed the petitioners contention that the threeday notice rule was not complied
withbecause petitioners were already notified of the motion personally.17
They also observed that New Fields had 90 computers in their office with Microsoft software,
none of which had the Certificate of Authenticity issued by Microsoft. On 8 July 2010, petitioners receiveda copy of the Order, and Deputy Sheriff Edgardo Reyes of
the RTC alsoeffected the return of the seized items, in compliance with the RTCs
Order.18 Petitioners filed an Urgent Manifestation and Motion for the Issuance of a Status Quo
After being informed of the resultsof the investigation, petitioners then issued certifications
Order on 8 July 2010 wherein they alleged that: (1) they intend to file a Motion for
that they have not authorized New Fields to "copy, print, reproduce and/or publish
Reconsideration of the Order; and (2) the Order was not immediately executory.19Respondents
unauthorized copies of Microsoft and Adobe software products."9
received a copy of the motion the day it was filed.
An application for search warrants was filed by Padilla on 20 May 2010, before Judge Amor
On 9 July 2010, respondents moved to expunge petitioners motion for reconsideration, saying
Reyes in her capacity as Executive Judge of the RTC. Search Warrant Nos. 10-15912 and
that petitioners failed to comply with the threeday notice rule.20 The hearing on the motion
10-15913 were issued on the same date.10
was set on 13 July 2010. A copy of the motion was received by petitioners on 20 July 2010.21
The warrants were served on respondents on 24 May 2010. New Fields employees witnessed
On 15 July 2010, petitioners filed a motion for reconsideration of the Order. 22 Respondents
the search conducted by the authorities. Several items were seized, including 17 CD installers
filed their Comment/Opposition23 to the motion, which was received by petitioners on 12
and 83 computers containing unauthorized copies of Microsoft and/or Adobe software.
August 2010.24
On 6 June 2010, New Fields filed a motion seeking to quash one of the two warrants served
The RTC denied petitioners motion for reconsideration in its Order dated 27 August
(Search Warrant No. 10-15912).11 The motion was received by petitioners on 10 June 2010 and
2010.25 Petitioners filed a petition for certiorari26 under Rule 65 on 8 November 2010 before
the Court of Appeals. Petitioners alleged that the RTC committed grave abuse of discretion in
82
granting the Motion to Quash despite: (1) respondents failure to comply with the three-day As correctly pointed out by the CA:
notice requirement; and (2) the existence of probable cause, and personal knowledge of the
warrant applicant. In the instant case, when the court a quoordered petitioners to submit their comment on the
motion toquash, it was, in effect, giving petitioners their day in court. Thus, while the
The Ruling of the CA [three]-day notice rule was not strictly observed, its purpose was still satisfied when
respondent judge did not immediately rule on the motion giving petitioners x x x the
The CA denied the petition for certiorari. The appellate court held that: opportunity to study and oppose the arguments stated in the motion.30
In the instant case, when the court a quoordered petitioners to submit their comment on the Existence of probable cause
motion toquash, it was, in effect, giving petitioners their day in court. Thus, while the
[three]-day notice rule was not strictly observed, its purpose was still satisfied when Under Section 1 of Rule 45 of the Rules of Court, petitions for review by certiorari "shall raise
respondent judge did not immediately rule on the motion giving petitioners x x x the only questions of law." A question of fact exists when there is a doubt as to the truth of certain
opportunity to study and oppose the arguments stated in the motion.27 facts, and it can only be resolved through a reexamination of the body of evidence.31
Hence, this petition. In Microsoft Corporation v. Maxicorp, Inc.,32 we ruled that the existence of probable cause is a
question of fact.33In the same case, we also stated that:
The Issue
Probable cause is dependent largely on the opinion and findings of the judge who conducted
The instant petition raisedonly one issue, to wit: the examination and who had the opportunity to question the applicant and his witnesses. For
this reason, the findings of the judge deserve great weight. The reviewing court should
The Honorable Court of Appeals erred in ruling that Judge Amor Reyes of Branch 21, Regional overturn such findings only upon proof that the judge disregarded the facts before him or
Trial Court of Manila did not commit grave abuse of discretion amounting to lack or excess of ignored the clear dictates of reason.34
jurisdiction in issuing its Orders dated 29 June2010 and 27 August 2010, quashing Search
Warrant Nos. 10-[1]5912 and 10-[1]5913 and directing the immediate release of the items This Court is not a trier of facts. As a general rule, we defer to the lower courts appreciation
seized pursuant to the said warrants, despite the pendency of appellate proceedings.28 and evaluation of evidence.35 This general rule, however, is not absolute. We will review the
factual findings of the CA in any of the following instances:
The Ruling of the Court
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;
We rule that strict compliance with the three-day notice rule may be relaxed in this case.
However, we sustain petitioners contention that there was probable cause for issuance of a (2) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures;
warrant, and the RTC and CA should have upheld the validity of both warrants. (3) when the inference made by the Court of Appeals from its findings of fact is manifestly
mistaken, absurd, or impossible;
Compliance with the three-day notice rule
(4) when there is a grave abuse of discretion in the appreciation of facts;
In Anama v. Court of Appeals,29 we ruled that the three-day notice rule is not absolute. The
purpose of the ruleis to safeguard the adverse partys right to due process. Thus, if the adverse (5) when the Appellate Court, in making its findings, went beyond the issues of the case and
party was given a reasonable opportunity to study the motion and oppose it, then strict such findings are contrary to the admissions of both appellant and appellee;
compliance with the three-day notice rule may be dispensed with.
(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;
83
(7) when the Court of Appeals failed to notice certain relevant facts which, if properly 6. I suspect that the ADOBE and MICROSOFT computer software programs that are being used
considered, would justify a different conclusion; in the premises of NEW FIELDS are unauthorized, illegal or unlicensed copies because of the
following reasons:
(8) when the findings of fact are themselves conflicting;
6.1. At least two (2) computer units are using a common Product Identification Number of
(9) when the findings of fact are conclusions without citation of the specific evidence on which MICROSOFT and ADOBE software.1wphi1 This is one indication that the software being used
they are based; and is unlicensed or was illegally reproduced or copied. All ADOBE and MICROSOFT computer
software programs should only be used in one computer unit, unless they avail of an Open
(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence License Agreement from the computer software developer, which [was not obtained by] NEW
but such findings are contradicted by the evidence on record. 36 FIELDS. x x x.41
In this case, we find reason to overturn the rulings of the RTC and CA, since there was grave The evidence on record clearly shows that the applicant and witnesses were able to verify the
abuse of discretion in the appreciation of facts. The CA sustained the quashal of the warrant information obtained from their confidential source. The evidence likewise shows that there
because the witnesses had "no personal knowledge of the facts upon which the issuance of the was probable cause for the issuance of a search warrant. Thus, the requirement of personal
warrants may be justified,"37 and the applicants and the witnesses merely relied on the screen knowledge of the applicant and witnesses was clearly satisfied in this case.
shots acquired from the confidential informant.38
WHEREFORE, the petition is GRANTED. The Decision dated 28 June 2012 and the Resolution
We disagree with the conclusions of the CA. The assailed CA Decision itself stated: dated 30 January 2013 of the Court of Appeals, uph0lding the 29 June 2010 and 27 August
2010 Orders of the Regional Trial Court, are hereby REVERSED and SET ASIDE. Search Warrant
Nos. 10-15912 and 10-15913 are declared valid.
Initial hearsay information or tips from confidential informants could very well serve as basis
for the issuance of a search warrant, if followed up personally by the recipient and
validated.39 Looking at the records, it is clear that Padilla and his companions were able to SO ORDERED.
personally verify the tipof their informant. In his Affidavit submitted to Judge Amor Reyes prior
to the issuance of the warrant, Padilla stated that:
At the time that I was inside the office premises of the NEW FIELDS, I saw the Product Keys or
Product Identification Numbers of the ADOBE and MICROSOFT computer software programs
installed in some of the computer units. Ms. Serrano and Mr. Moradoz were able to pull up
these data since they were allowed to use some of the computers of the target companies in
line with the pretext that we used to gain entry into NEW FIELDS. I actively read and attentively
observed the information reflected from the monitor display unit of the computers that Ms.
Serrano and Mr. Moradoz were able to use. x x x.40
As mentioned earlier, Padilla has been trained to distinguish illegally reproduced Adobe and
Microsoft software. Thus, in his Affidavit, he stated that:
xxxx
84
G.R. No. 209843, March 25, 2015 supply, step-down transformer, and PA amplified AC-DC.5cralawred
TAIWAN KOLIN CORPORATION, LTD., Petitioner, v. KOLIN ELECTRONICS CO., To digress a bit, Kolin Electronics KOLIN registration was, as it turns out, the subject of a
INC., Respondent. prior legal dispute between the parties in Inter Partes Case No. 14-1998-00050 before the IPO.
In the said case, Kolin Electronics own application was opposed by Taiwan Kolin, being, as
DECISION Taiwan Kolin claimed, the prior registrant and user of the KOLIN trademark, having
registered the same in Taipei, Taiwan on December 1, 1988. The Bureau of Legal Affairs of the
IPO (BLA-IPO), however, did not accord priority right to Taiwan Kolins Taipei registration
VELASCO JR., J.:
absent evidence to prove that it has already used the said mark in the Philippines as early as
1988. On appeal, the IPO Director General affirmed the BLA-IPOs Decision. Taiwan Kolin
Nature of the Case elevated the case to the CA, but without injunctive relief, Kolin Electronics was able to register
the KOLIN trademark on November 23, 2003 for its products.6 Subsequently, the CA, on July
31, 2006, affirmed7 the Decision of the Director General.
Before the Court is a petition for review under Rule 45 of the Rules of Court interposed by
petitioner Taiwan Kolin Corporation, Ltd. (Taiwan Kolin), assailing the April 30, 2013
In answer to respondents opposition in Inter Partes Case No. 14-2006-00096, petitioner
Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 122565 and its subsequent November
argued that it should be accorded the benefits of a foreign-registered mark under Secs. 3 and
6, 2013 Resolution.2 The assailed issuances effectively denied petitioners trademark
131.1 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the
application for the use of KOLIN on its television and DVD players.chanroblesvirtuallawlibrary
Philippines (IP Code);8 that it has already registered the KOLIN mark in the Peoples Republic
The Facts of China, Malaysia and Vietnam, all of which are parties to the Paris Convention for the
Protection of Industrial Property (Paris Convention) and the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS);and that benefits accorded to a well-known
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), then mark should be accorded to petitioner.9cralawred
Bureau of Patents, Trademarks, and Technology Transfer, a trademark application, docketed as
Application No. 4-1996-106310, for the use of KOLIN on a combination of goods, including Ruling of the BLA-IPO
colored televisions, refrigerators, window-type and split-type air conditioners, electric fans and
water dispensers. Said goods allegedly fall under Classes 9, 11, and 21 of the Nice Classification
(NCL). By Decision10 dated August 16, 2007, the BLA-IPO denied petitioners application disposing as
follows:chanRoblesvirtualLawlibrary
Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan Kolins
failure to respond to IPOs Paper No. 5 requiring it to elect one class of good for its coverage. In view of all the foregoing, the instant Opposition is as, it is
However, the same application was subsequently revived through Application Serial No. hereby SUSTAINED. Accordingly, application bearing Serial No.
4-2002-011002,3 with petitioner electing Class 9 as the subject of its application, particularly: 4-1996-106310 for the mark KOLIN filed in the name of TAIWAN KOLIN.,
television sets, cassette recorder, VCD Amplifiers, camcorders and other audio/video electronic LTD. on February 29, 1996 for goods falling under Class 09 of the
equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile machines, International Classification of Goods such as cassette recorder, VCD,
teleprinters, cellular phones and automatic goods vending machine. The application would in woofer, amplifiers, camcorders and other audio/video electronic
time be duly published.4cralawred equipment, flat iron, vacuum cleaners, cordless handsets, videophones,
facsimile machines, teleprinters, cellular phones, automatic goods vending
On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioners machines and other electronic equipment is hereby REJECTED.
revived application, docketed as Inter Partes Case No. 14-2006-00096. As argued, the mark
Taiwan Kolin seeks to register is identical, if not confusingly similar, with its KOLIN mark Let the file wrapper of KOLIN, subject of this case be forwarded to the
registered on November 23, 2003, covering the following products under Class 9 of the NCL: Bureau of Trademarks (BOT) for appropriate action in accordance with this
automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power Decision.
85
SO ORDERED.cralawlawlibrary Aggrieved, respondent elevated the case to the CA.chanroblesvirtuallawlibrary
Indubitably, Respondent-Applicants [herein petitioner] mark is identical to in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents, 25 we upheld
the registered mark of herein Opposer [herein respondent] and the the Patent Directors registration of the same trademark CAMIA for Ng Sams
(b) ham under Class 47, despite Philippine Refining Companys prior trademark
identical mark is used on goods belonging to Class 9 to which Opposers
goods are also classified. On this point alone, Respondent-Applicants registration and actual use of such mark on its lard, butter, cooking oil (all of
application should already be denied.cralawlawlibrary which belonged to Class 47), abrasive detergents, polishing materials and soaps;
in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun
Liong,26we dismissed Hickoks petition to cancel private respondents HICKOK
(c)
The argument is specious. trademark registration for its Marikina shoes as against petitioners earlier
registration of the same trademark for handkerchiefs, briefs, belts and wallets.
The parties admit that their respective sets of goods belong to Class 9 of the NCL, which
includes the following:22cralawred cralawlawlibrary
Class 9 Verily, whether or not the products covered by the trademark sought to be registered by
Taiwan Kolin, on the one hand, and those covered by the prior issued certificate of registration
Scientific, nautical, surveying, photographic, cinematographic, optical, in favor of Kolin Electronics, on the other, fall under the same categories in the NCL is not the
weighing, measuring, signalling, checking (supervision), life-saving and sole and decisive factor in determining a possible violation of Kolin Electronics intellectual
teaching apparatus and instruments; apparatus and instruments for property right should petitioners application be granted. It is hornbook doctrine, as held in the
conducting, switching, transforming, accumulating, regulating or above-cited cases, that emphasis should be on the similarity of the products involved and not
controlling electricity; apparatus for recording, transmission or on the arbitrary classification or general description of their properties or characteristics. The
reproduction of sound or images; magnetic data carriers, recording discs; mere fact that one person has adopted and used a trademark on his goods would not, without
compact discs, DVDs and other digital recording media; mechanisms for more, prevent the adoption and use of the same trademark by others on unrelated articles of a
coin-operated apparatus; cash registers, calculating machines, data different kind.27cralawred
processing equipment, computers; computer software; fire-extinguishing
apparatus.cralawlawlibrary The CA erred in denying petitioners
registration application
But mere uniformity in categorization, by itself, does not automatically preclude the
registration of what appears to be an identical mark, if that be the case. In fact, this Court, in a Respondent next parlays the idea of relation between products as a factor militating against
long line of cases,has held that such circumstance does not necessarily result in any trademark petitioners application. Citing Esso Standard Eastern, Inc. v. Court of Appeals,28 respondent
infringement. The survey of jurisprudence cited in Mighty Corporation v. E. & J Gallo argues that the goods covered by petitioners application and those covered by its registration
Winery23 is enlightening on this point:chanRoblesvirtualLawlibrary are actually related belonging as they do to the same class or have the same physical
characteristics with reference to their form, composition, texture, or quality, or if they serve
the same purpose. Respondent likewise draws parallelisms between the present controversy
and the following cases:29cralawred
87
In Arce & Sons, Inc. vs. Selecta Biscuit Company,30 biscuits were held related to In sum, the intertwined use, the same classification of the products as
(a)
milk because they were both food products; class 9 under the NICE Agreement, and the fact that they generally flow
through the same channel of trade clearly establish that Taiwan Kolins
(b) In Chua Che vs. Phil. Patents Office,31 soap and perfume, lipstick and nail polish television sets and DVD players are closely related to Kolin Electronics
are held to be similarly related because they are common household items; goods. As correctly pointed out by the BLA-IPO, allowing Taiwan Kolins
registration would only confuse consumers as to the origin of the products
In Ang vs. Teodoro,32 the trademark Ang Tibay for shoes and slippers was
they intend to purchase. Accordingly, protection should be afforded to
(c) disallowed to be used for shirts and pants because they belong to the same
Kolin Electronics, as the registered owner of the KOLIN
general class of goods; and
trademark.37 (emphasis added)cralawlawlibrary
In Khe vs. Lever Bros. Co.,33 soap and pomade, although non-competitive,
(d) were held to be similar or belong to the same class, since both are toilet
The CAs approach and reasoning to arrive at the assailed holding that the approval of
articles.
petitioners application is likely to cause confusion or deceive fail to persuade.
cralawlawlibrary
The products covered by petitioners
application and respondents
Respondent avers that Kolin Electronics and Taiwan Kolins products are closely-related not registration are unrelated
only because both fall under Class 9 of the NCL, but mainly because they both relate to A certificate of trademark registration confers upon the trademark owner the exclusive right to
electronic products, instruments, apparatus, or appliances.34 Pushing the point, respondent sue those who have adopted a similar mark not only in connection with the goods or services
would argue that Taiwan Kolin and Kolin Electronics goods are inherently similar in that they specified in the certificate, but also with those that are related thereto.38cralawred
are all plugged into electric sockets and perform a useful function.35 Furthermore, respondent
echoes the appellate courts ratiocination in denying petitioners application, viz:36cralawred In resolving one of the pivotal issues in this casewhether or not the products of the parties
involved are relatedthe doctrine in Mighty Corporation is authoritative. There, the Court
Significantly, Kolin Electronics goods (automatic voltage regulator; held that the goods should be tested against several factors before arriving at a sound
converter; recharger; stereo booster; AC-DC regulated power supply; conclusion on the question of relatedness. Among these are:chanRoblesvirtualLawlibrary
step-down transformer; and PA amplified AC-DC) and Taiwan Kolins
television sets and DVD players are both classified under class 9 of the NICE (a) the business (and its location) to which the goods belong;
agreement. At first glance, it is also evident that all these goods are (b) the class of product to which the goods belong;
generally desc ribed as electrical devices.x x x [T]he goods of both Kolin (c) the products quality, quantity, or size, including the nature of the
Electronics and Taiwan Kolin will inevitably be introduced to the public as package, wrapper or container;
KOLIN products and will be offered for sale in the same channels of trade. (d) the nature and cost of the articles;
Contrary to Taiwan Kolins claim, power supply as well as audio and stereo (e) the descriptive properties, physical attributes or essential
equipment like booster and amplifier are not only sold in hardware and characteristics with reference to their form, composition, texture or quality;
electrical shops. These products are commonly found in appliance stores (f) the purpose of the goods;
alongside television sets and DVD players. With the present trend in (g) whether the article is bought for immediate consumption, that is,
todays entertainment of having a home theater system, it is not unlikely to day-to-day household items;
see a stereo booster, amplifier and automatic voltage regulator displayed (h) the fields of manufacture;
together with the television sets and DVD players. With the intertwined use (i) the conditions under which the article is usually purchased; and
of these products bearing the identical KOLIN mark, the ordinary (j) the channels of trade through which the goods flow, how they are
intelligent consumer would likely assume that they are produced by the distributed, marketed, displayed and sold.39cralawlawlibrary
same manufacturer.
88
another, no rigid set rules can plausible be formulated. Each case must be decided on its
As mentioned, the classification of the products under the NCL is merely part and parcel of the merits, with due regard to the goods or services involved, the usual purchasers character and
factors to be considered in ascertaining whether the goods are related. It is not sufficient to attitude, among others. In such cases, even more than in any other litigation, precedent must
state that the goods involved herein are electronic products under Class 9 in order to establish be studied in the light of the facts of a particular case. That is the reason why in trademark
relatedness between the goods, for this only accounts for one of many considerations cases, jurisprudential precedents should be applied only to a case if they are specifically in
enumerated in Mighty Corporation. In this case, credence is accorded to petitioners assertions point.43cralawred
that:40cralawred
For a clearer perspective and as matter of record, the following image on the left44 is the
trademark applied for by petitioner, while the image juxtaposed to its right45 is the trademark
1. Taiwan Kolins goods are classified as home appliances as opposed to Kolin
registered by respondent:
Electronics goods which are power supply and audio equipment
accessories;ChanRoblesVirtualawlibrary
(please see image in G.R. No. 209843 page 10)
2. Taiwan Kolins television sets and DVD players perform distinct function and purpose
from Kolin Electronics power supply and audio equipment; and While both competing marks refer to the word KOLIN written in upper case letters and in
bold font, the Court at once notes the distinct visual and aural differences between them: Kolin
3. Taiwan Kolin sells and distributes its various home appliance products on wholesale Electronics mark is italicized and colored black while that of Taiwan Kolin is white in pantone
and to accredited dealers, whereas Kolin Electronics goods are sold and flow red color background. The differing features between the two, though they may appear
through electrical and hardware stores. minimal, are sufficient to distinguish one brand from the other.
It cannot be stressed enough that the products involved in the case at bar are, generally
speaking, various kinds of electronic products. These are not ordinary consumable household
Clearly then, it was erroneous for respondent to assume over the CA to conclude that all
items, like catsup, soy sauce or soap which are of minimal cost.46 The products of the
electronic products are related and that the coverage of one electronic product necessarily
contending parties are relatively luxury items not easily considered affordable. Accordingly, the
precludes the registration of a similar mark over another. In this digital age wherein electronic
casual buyer is predisposed to be more cautious and discriminating in and would prefer to mull
products have not only diversified by leaps and bounds, and are geared towards
over his purchase. Confusion and deception, then, is less likely. 47 As further elucidated in Del
interoperability, it is difficult to assert readily, as respondent simplistically did, that all devices
Monte Corporation v. Court of Appeals:48cralawred
that require plugging into sockets are necessarily related goods.
89
they involved common household itemsi.e., biscuits and milk, cosmetics, clothes, and toilet
articles, respectivelywhereas the extant case involves luxury items not regularly and Consistent with the above ruling, this Court finds that the differences between the two marks,
inexpensively purchased by the consuming public. In accord with common empirical subtle as they may be, are sufficient to prevent any confusion that may ensue should
experience, the useful lives of televisions and DVD players last for about five (5) years, petitioners trademark application be granted.As held in Esso Standard Eastern,
minimum, making replacement purchases very infrequent. The same goes true with converters Inc.:52cralawred
and regulators that are seldom replaced despite the acquisition of new equipment to be
plugged onto it. In addition, the amount the buyer would be parting with cannot be deemed Respondent court correctly ruled that considering the general appearances
minimal considering that the price of televisions or DVD players can exceed todays monthly of each mark as a whole, the possibility of any confusion is unlikely. A
minimum wage.In light of these circumstances, it is then expected that the ordinary intelligent comparison of the labels of the samples of the goods submitted by the
buyer would be more discerning when it comes to deciding which electronic product they are parties shows a great many differences on the trademarks used. As pointed
going to purchase, and it is this standard which this Court applies here in in determining the out by respondent court in its appealed decision, (A) witness for the
likelihood of confusion should petitioners application be granted. plaintiff, Mr. Buhay, admitted that the color of the ESSO used by the
plaintiff for the oval design where the blue word ESSO is contained is the
To be sure, the extant case is reminiscent of Emerald Garment Manufacturing Corporation v. distinct and unique kind of blue. In his answer to the trial courts question,
Court of Appeals,49 wherein the opposing trademarks are that of Emerald Garment Mr. Buhay informed the court that the plaintiff never used its trademark on
Manufacturing Corporations Stylistic Mr. Lee and H.D. Lees LEE. In the said case, the any product where the combination of colors is similar to the label of the
appellate court affirmed the decision of the Director of Patents denying Emerald Garments Esso cigarettes, and Another witness for the plaintiff, Mr. Tengco,
application for registration due to confusing similarity with H.D. Lees trademark. This Court, testified that generally, the plaintiffs trademark comes all in either red,
however, was of a different beat and ruled that there is no confusing similarity between the white, blue or any combination of the three colors. It is to be pointed out
marks, given that the products covered by the trademark, i.e., jeans, were,at that time, that not even a shade of these colors appears on the trademark of the
considered pricey, typically purchased by intelligent buyers familiar with the products and are appellants cigarette. The only color that the appellant uses in its
more circumspect, and, therefore, would not easily be deceived. As trademark is green.
held:chanRoblesvirtualLawlibrary
Even the lower court, which ruled initially for petitioner, found that a
Finally, in line with the foregoing discussions, more credit should be given noticeable difference between the brand ESSO being used by the
to the ordinary purchaser. Cast in this particular controversy, the defendants and the trademark ESSO of the plaintiff is that the former has a
ordinary purchaser is not the completely unwary consumer but is the rectangular background, while in that of the plaintiff the word ESSO is
ordinarily intelligent buyer considering the type of product involved. enclosed in an oval background.cralawlawlibrary
The definition laid down in Dy Buncio v. Tan Tiao Bok50is better suited to
the present case. There, the ordinary purchaser was defined as one All told, We are convinced that petitioners trademark registration not only covers unrelated
accustomed to buy, and therefore to some extent familiar with, the good, but is also incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser
goods in question. The test of fraudulent simulation is to be found in the must be thought of as having, and credited with, at least a modicum of intelligence to be able
likelihood of the deception of some persons in some measure acquainted to see the differences between the two trademarks in question.53cralawred
with an established design and desirous of purchasing the commodity with
which that design has been associated. The test is not found in the Questions of fact may still be entertained
deception, or the possibility of deception, of the person who knows
nothing about the design which has been counterfeited, and who must be On a final note, the policy according factual findings of courts a quo great respect, if not finality,
indifferent between that and the other. The simulation, in order to be is not binding where they have overlooked, misapprehended, or misapplied any fact or
objectionable, must be such as appears likely to mislead the ordinary circumstance of weight and substance.54 So it must be here; the nature of the products
intelligent buyer who has a need to supply and is familiar with the article involved materially affects the outcome of the instant case. A reversal of the appellate courts
that he seeks to purchase.51 (emphasis added)cralawlawlibrary Decision is then in order.
90
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and First, products classified under Class 9 can be further classified into five categories. Accordingly,
November 6, 2013, respectively, are hereby REVERSED and SET ASIDE. Accordingly, the the goods covered by the competing marks between Taiwan Kolin and Kolin Electronics fall
Decision of the Intellectual Property Office Director General in Inter Partes Case No. under different categories. Taiwan Kolins goods are categorized as audio visual equipments,
14-2006-00096, dated November 23, 2011, is hereby REINSTATED. while Kolin Electronics goods fall under devices for controlling the distribution and use of
electricity. Thus, it is erroneous to assume that all electronic products are closely related and
SO ORDERED.cralawlawlibrar that the coverage of one electronic product necessarily precludes the registration of a similar
mark over another.
Second, the ordinarily intelligent buyer is not likely to be confused. The distinct visual and aural
Facts: differences between the two trademarks KOLIN, although appear to be minimal, are
sufficient to distinguish between one brand or another. The casual buyer is predisposed to be
more cautious, discriminating, and would prefer to mull over his purchase because the
products involved are various kind of electronic products which are relatively luxury items and
Taiwan Kolin Corp sought to register the trademark KOLIN in Class 9 on the following
not considered affordable. They are not ordinarily consumable items such as soy sauce, ketsup
combination of goods: television sets, cassette recorder, VCD Amplifiers, camcorders and other
or soap which are of minimal cost. Hence, confusion is less likely.
audio/video electronic equipment, flat iron, vacuum cleaners, cordless handsets, videophones,
facsimile machines, teleprinters, cellular phones and automatic goods vending machine.
Kolin Electronics opposed the application on the ground that the trademark KOLIN is
identical, if not confusingly similar, with its registered trademark KOLIN which covers the
following products under Class 9 of the Nice Classification (NCL): automatic voltage regulator,
converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer,
and PA amplified AC-DC. Kolin Electronics argued that the products are not only closely-related
because they fall under the same classification, but also because they are inherently similar for
being electronic products and are plugged into electric sockets and perform a useful function.
Held:
No, the products are not related and the use of the trademark KOLIN on them would not likely
cause confusion. To confer exclusive use of a trademark, emphasis should be on the
similarity or relatedness of the goods and/or services involved and not on the arbitrary
classification or general description of their properties or characteristics.
91
G.R. No. 197802, November 11, 2015 switching.8
ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS ARAIN, M.D. DBA ZUNECA On October 30, 2007, respondent sent petitioners a cease-and-desist demand letter, pointing
PHARMACEUTICAL, Petitioners, v. NATRAPHARM, INC., Respondent. out that:
However, contrary to its earlier resolutions denying the application for a TRO/preliminary The two issues which need to be addressed are:
injunction, the CA, in its April 18, 2011 Decision, upheld the allegations of respondent that it is
entitled to injunctive relief on the basis of its IPO registration and permanently enjoined 1) Whether the decision on the merits rendered the issues in this case moot and academic?
petitioners from the commercial use of "ZYNAPS." The fallo of the CA Decision reads: and
WHEREFORE, premises considered, the Petition for Certiorari is GRANTED. 2) Whether the CA may order a permanent injunction in deciding a petition
The assailed Omnibus Order dated 12 March 2008 of the Regional Trial for certiorari against the denial of an application for a preliminary injunction issued by the RTC?
Court, Branch 93 of Quezon City in Civil Case No. Q-07-61561
is REVERSED and SET ASIDE, and a new one is We hold that the issues raised in the instant petition have been rendered moot and academic
93
given the RTC's December 2, 2011 Decision on the merits of the case.
In Casilan v. Ybaez,35 this Court stated:
Rule 58 of the Rules of Court provides for both preliminary and permanent injunction. Section
1, Rule 58 provides for the definition of preliminary injunction: As things stand now, this Court can no longer interfere with the preliminary
injunctions issued by the Leyte court in its cases Nos. 2985 and 2990,
SECTION 1. Preliminary injunction defined; classes. A preliminary because such preliminary writs have already been vacated, being
injunction is an order granted at any stage of an action or proceeding superseded and replaced by the permanent injunction ordered in the
prior to the judgment or final order, requiring a party or a court, agency decision on the merits rendered on 21 March 1962. And as to the
or a person to refrain from a particular act or acts. It may also require the permanent injunction, no action can be taken thereon without reviewing
performance of a particular act or acts, in which case it shall be known as a the judgment on the merits, such injunction being but a consequence of
preliminary mandatory injunction. (Emphasis supplied) the pronouncement that the credits of Tiongson and Montilla are entitled
to priority over that of Casilan. Since the court below had the power and
right to determine such question of preference, its judgment is not
On the other hand, Section 9 of the same Rule defines a permanent injunction in this wise: without, nor in excess of, jurisdiction; and even assuming that its findings
are not correct, they would, at most, constitute errors of law, and not
SEC. 9. When final injunction granted. If after the trial of the action it abuses of discretion, correctible bycertiorari . The obvious remedy for
appears that the applicant is entitled to have the act or acts complained of petitioner Casilan was a timely appeal from the judgment on the
permanently enjoined, the court shall grant a final injunction perpetually merits to the Court of Appeals, the amount involved being less than
restraining the party or person enjoined from the commission or P200,000. But the judgment has become final and unappealable and can
continuance of the act or acts or confirming the preliminary mandatory not be set aside through certiorari proceedings. (Emphasis supplied)
injunction. (Emphasis supplied)
Here, this Court is being asked to determine whether the CA erred by issuing a permanent
A writ of preliminary injunction is generally based solely on initial and incomplete injunction in a case which questioned the propriety of the denial of an ancillary writ. But with
evidence.30 The evidence submitted during the hearing on an application for a writ of the RTC's December 2, 2011 Decision on the case for "Injunction, Trademark Infringement,
preliminary injunction is not conclusive or complete for only a sampling is needed to give the Damages and Destruction," the issues raised in the instant petition have been rendered moot
trial court an idea of the justification for the preliminary injunction pending the decision of the and academic. We note that the case brought to the CA on a petition for certiorari merely
case on the merits.31 As such, the findings of fact and opinion of a court when issuing the writ involved the RTC's denial of respondent's application for a writ of preliminary injunction, a
of preliminary injunction are interlocutory in nature and made even before the trial on the mere ancillary writ. Since a decision on the merits has already been rendered and which
merits is commenced or terminated.32 includes in its disposition a permanent injunction, the proper remedy is an appeal36 from the
decision in the main case.
By contrast a permanent injunction, based on Section 9, Rule 58 of the Rules of Court, forms
part of the judgment on the merits and it can only be properly ordered only on final judgment. WHEREFORE, in light of all the foregoing, the petition is hereby DENIED for being moot and
A permanent injunction may thus be granted after a trial or hearing on the merits of the case academic.
and a decree granting or refusing an injunction should not be entered until after a hearing on
the merits where a verified answer containing denials is filed or where no answer is required, SO ORDERED.
or a rule to show cause is equivalent to an answer.33
As such a preliminary injunction, like any preliminary writ and any interlocutory order, cannot
survive the main case of which it is an incident; because an ancillary writ of preliminary
injunction loses its force and effect after the decision in the main petition.34
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EN BANC online outlets owned by the Lead Networks. After the meeting, the representatives of the Lead
Networks drew lots to determine who will host each leg of the debates. GMA and its partner
G.R. No. 222702, April 05, 2016 Philippine Daily Inquirer sponsored the first presidential debate in Mindanao on 21 February
2016; TV5, Philippine Star, and Businessworld sponsored the second phase of presidential
RAPPLER, INC., Petitioner, v. ANDRES D. BAUTISTA, Respondent. debate in the Visayas on 20 March 2016; ABS-CBN and Manila Bulletin will sponsor the
presidential debate to be held in Luzon on 24 April 2016; and the lone vice-presidential debate
will be sponsored by CNN, Business Mirror, and petitioner on 10 April 2016. Petitioner alleged
RESOLUTION
that the draft MOA permitted online streaming, provided proper attribution is given the Lead
Network.
CARPIO, J.:
On 12 January 2016, petitioner was informed that the MOA signing was scheduled the
Petitioner Rappler, Inc. (petitioner) filed a petition for certiorari and prohibition against Andres following day. Upon petitioner's request, the draft MOA was emailed to petitioner on the
D. Bautista (respondent), in his capacity as Chairman of the Commission on Elections evening of 12 January 2016. Petitioner communicated with respondent its concerns regarding
(COMELEC). The petition seeks to nullify Part VI (C), paragraph 19 and Part VI (D), paragraph 20 certain provisions of the MOA particularly regarding online streaming and the imposition of a
of the Memorandum of Agreement (MOA) on the 2016 presidential and vice-presidential maximum limit of two minutes of debate excerpts for news reporting. Respondent assured
debates, for being executed without or in excess of jurisdiction or with grave abuse of petitioner that its concerns will be addressed afterwards, but it has to sign the MOA because
discretion amounting to lack or excess of jurisdiction and for violating the fundamental rights time was of the essence. On 13 January 2016, petitioner, along with other media networks and
of petitioner protected under the Constitution. The MOA, signed on 13 January 2016, was entities, executed the MOA with the KBP and the COMELEC for the conduct of the three
executed by the COMELEC through its Chairman, respondent Bautista, and the Kapisanan ng presidential debates and one vice-presidential debate. Petitioner alleged that it made several
mga Brodkaster ng Pilipinas (KBP), and the various media networks, namely: ABS-CBN communications with respondent and the COMELEC Commissioners regarding its concerns on
Corporation, GMA Network, Inc., Nine Media Corporation, TV5 Network, Inc., Philstar Daily, some of the MOA provisions, but petitioner received no response. Hence, this petition.
Inc., Philippine Daily Inquirer, Inc., Manila Bulletin Publishing Corporation, Philippine Business
Daily Mirror Publishing, Inc., and petitioner. Under the MOA, the KBP was designated as In this petition for certiorari and prohibition, petitioner prays for the Court to render judgment:
Debate Coordinator while ABS-CBN, GMA, Nine Media, and TV5, together with their respective
print media partners were designated as Lead Networks. a. Declaring null and void, for being unconstitutional, pertinent parts of the
Memorandum of Agreement that violate the rights of the Petitioner,
Petitioner alleged that on 21 September 2015, respondent called for a meeting with various specifically Part VI (C), paragraph 19 and Part VI (D), paragraph 20 [of the
media outlets to discuss the "PiliPinas 2016 Debates," for presidential and vice-presidential MOA];
candidates, which the COMELEC was organizing.1 Respondent showed a presentation
explaining the framework of the debates, in which there will be three presidential debates and b. Prohibiting the Respondent from implementing specifically Part VI (C),
one vice presidential debate. Respondent proposed that petitioner and Google, Inc. be in paragraph 19 and Part VI (D), paragraph 20 of the MOA;
charge of online and social media engagement. Respondent announced during the meeting
that KBP will coordinate with all media entities regarding the organization and conduct of the c. Pending resolution of this case, issuing a Preliminary Injunction enjoining
debates. the Respondent from implementing Part VI (C), paragraph 19 and Part VI
(D), paragraph 20 of the MOA; and
On 22 September 2015, petitioner sent a proposed draft for broadcast pool guidelines to
COMELEC and the KBP. A broadcast pool has a common audio and video feed of the debates, d. Pending resolution of this case, issuing a Preliminary Mandatory
and the cost will be apportioned among those needing access to the same. KBP informed Injunction requiring the Respondent to ensure an unimpaired and equal
petitioner that the proposal will be discussed in the next meeting. access to all mass media, online or traditional, to all the Debates.2
On 19 October 2015, another meeting was held at the COMELEC office to discuss a draft MOA
on the debates. In the draft, petitioner and Google's participation were dropped in favor of the Part VI (C), paragraph 19 and Part VI (D), paragraph 20 of the MOA read:
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VI already started and only two of the scheduled four national debates remain to be staged.7 And
considering the importance of the debates in informing the electorate of the positions of the
ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS presidential and vice-presidential candidates on vital issues affecting the nation, this case falls
under the exception laid down in GMA Network, Inc. v. Commission on Elections.
xxxx
Petitioner is a signatory to the MOA. In fact, the sole vice-presidential debate, to be held in
C. ONLINE STREAMING Manila on 10 April 2016, will be sponsored by CNN Philippines (owned and operated by Nine
Media Corporation) and its partners Business Mirror and petitioner. Petitioner, however, is
xxxx alleging that it is being discriminated particularly as regards the MOA provisions on live audio
broadcast via online streaming. Petitioner argues that the MOA grants radio stations the right
19. Subject to copyright conditions or separate to simultaneously broadcast live the audio of the debates, even if the radio stations are not
negotiations with the Lead Networks, allow the debates obliged to perform any obligation under the MOA. Yet, this right to broadcast by live streaming
they have produced to be shown or streamed on other online the audio of the debates is denied petitioner and other online media entities, which also
websites; have the capacity to live stream the audio of the debates. Petitioner insists that it signed the
MOA believing in good faith the issues it has raised will be resolved by the COMELEC.
D. NEWS REPORTING AND FAIR USE
The provisions on Live Broadcast and Online Streaming under the MOA read:
20. Allow a maximum of two minutes of excerpt from
the debates they have produced to be used for news VI
reporting or fair use by other media or entities as ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS
allowed by the copyright law: Provided, that the use of
excerpts longer than two minutes shall be subject to xxxx
the consent of the Lead Network concerned;3
B1. LIVE BROADCAST
Respondent argues that the petition should be dismissed for its procedural defects. In several
cases, this Court has acted liberally and set aside procedural lapses in cases involving 10. Broadcast the debates produced by the Lead
transcendental issues of public interest,4 especially when time constraint is a factor to be Networks in their respective television stations and
considered, as in this case. As held in GMA Network, Inc. v. Commission on Elections:5 other news media platforms;
Respondent claims that certiorari and prohibition are not the proper 11. Provide a live feed of the debate to other radio
remedies that petitioners have taken to question the assailed Resolution of stations, other than those of the Lead Network's, for
the COMELEC. Technically, respondent may have a point. However, simultaneous broadcast;
considering the very important and pivotal issues raised, and the limited
time, such technicality should not deter the Court from having to make the 12. Provide a live feed of the debates produced by
final and definitive pronouncement that everyone else depends for them to radio stations not belonging to any of the Lead
enlightenment and guidance. "[T]his Court has in the past seen fit to step in Networks for simultaneous broadcast;
and resolve petitions despite their being the subject of an improper
remedy, in view of the public importance of the issues raised therein.6 xxxx
C. ONLINE STREAMING
The urgency to resolve this case is apparent considering that the televised debates have
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17. Live broadcast the debates produced by the Lead not been expressly reserved by the Lead Networks (copyright holders); and (3) the source is
Networks on their respective web sites and social clearly indicated.
media sites for free viewing by the public;
Condition 1 is complied because the live streaming by petitioner is obviously for information
18. Maintain a copy of the debate produced by the purposes. Condition 2 is also complied because Part VI (C), paragraph 19 of the MOA
Lead Network on its on-line site(s) for free viewing by expressly "allow[s] the debates x x x to be shown or streamed on other websites," including
the public during the period of elections or longer; petitioner's website. This means that the "reproduction or communication (of the debates) to
the public by mass media x x x has not been expressly reserved" or withheld. Condition 3 is
19. Subject to copyright conditions or separate complied by clearly indicating and acknowledging that the source of the debates is one or
negotiations with the Lead Networks, allow the more of the Lead Networks.
debates they have produced to be shown or streamed
on other websites;8 (Boldfacing and underscoring Part VI (C), paragraph 19 of the MOA, which expressly allows the debates produced by the Lead
supplied) Networks to be shown or streamed on other websites, clearly means that the Lead Networks
have not "expressly reserved" or withheld the use of the debate audio for online streaming.
In short, the MOA expressly allows the live streaming of the debates subject only to
Petitioner's demand to exercise the right to live stream the debates is a contractual right of compliance with the "copyright conditions." Once petitioner complies with the copyright
petitioner under the MOA. Under Part VI (C), paragraph 19 of the MOA, the Lead Networks are conditions, petitioner can exercise the right to live stream the audio of the debates as
expressly mandated to "allow the debates they have produced to be shown or streamed on expressly allowed by the MOA.
other websites," but "subject to copyright conditions or separate negotiations with the Lead
Networks." The use of the word "or" means that compliance with the "copyright conditions" is Under the MOA, the Lead Networks are mandated to promote the debates for maximum
sufficient for petitioner to exercise its right to live stream the debates in its website. audience.9The MOA recognizes the public function of the debates and the need for the
widest possible dissemination of the debates. The MOA has not reserved or withheld the
The "copyright conditions" refer to the limitations on copyright as provided under Section reproduction of the debates to the public but has in fact expressly allowed the reproduction
184.1(c) of the Intellectual Property Code (IPC), thus: of the debates "subject to copyright conditions." Thus, petitioner may live stream the debate
in its entirety by complying with the "copyright conditions," including the condition that "the
SEC. 184. Limitations on Copyright. - 184.1 Notwithstanding the provisions source is clearly indicated" and that there will be no alteration, which means that the
of Chapter V, the following acts shall not constitute infringement of streaming will include the proprietary graphics used by the Lead Networks. If petitioner opts
copyright: for a clean feed without the proprietary graphics used by the Lead Networks, in order for
petitioner to layer its own proprietary graphics and text on the same, then petitioner will have
xxxx to negotiate separately with the Lead Networks. Similarly, if petitioner wants to alter the
debate audio by deleting the advertisements, petitioner will also have to negotiate with the
(c) The reproduction or communication to the public by mass media of Lead Networks.
articles on current political, social, economic, scientific or religious topic,
lectures, addresses and other works of the same nature, which are Once the conditions imposed under Section 184.1(c) of the IPC are complied with, the
delivered in public if such use is for information purposes and has not information - in this case the live audio of the debates -now forms part of the public domain.
been expressly reserved; Provided, That the source is clearly indicated; There is now freedom of the press to report or publicly disseminate the live audio of the
(Sec. 11, P.D. No. 49) (Boldfacing and underscoring supplied) debates. In fact, the MOA recognizes the right of other mass media entities, not parties to the
MOA, to reproduce the debates subject only to the same copyright conditions. The freedom of
Under this provision, the debates fall under "addresses and other works of the same nature." the press to report and disseminate the live audio of the debates, subject to compliance with
Thus, the copyright conditions for the debates are: (1) the reproduction or communication to Section 184.1(c) of the IPC, can no longer be infringed or subject to prior restraint. Such
the public by mass media of the debates is for information purposes; (2) the debates have freedom of the press to report and disseminate the live audio of the debates is now protected
and guaranteed under Section 4, Article III of the Constitution, which provides that "[N]o law
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shall be passed abridging the freedom x x x of the press."
The presidential and vice-presidential debates are held primarily for the benefit of the
electorate to assist the electorate in making informed choices on election day. Through the
conduct of the national debates among presidential and vice-presidential candidates, the
electorate will have the "opportunity to be informed of the candidates' qualifications and track
record, platforms and programs, and their answers to significant issues of national
concern."10 The political nature of the national debates and the public's interest in the wide
availability of the information for the voters' education certainly justify allowing the debates to
be shown or streamed in other websites for wider dissemination, in accordance with the MOA.
Therefore, the debates should be allowed to be live streamed on other websites, including
petitioner's, as expressly mandated in Part VI (C), paragraph 19 of the MOA. The respondent,
as representative of the COMELEC which provides over-all supervision under the MOA,
including the power to "resolve issues that may arise among the parties involved in the
organization of the debates,"11 should be directed by this Court to implement Part VI (C),
paragraph 19 of the MOA, which allows the debates to be shown or live streamed unaltered on
petitioner's and other websites subject to the copyright condition that the source is clearly
indicated.chanrobleslaw
SO ORDERED.cralawla
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Rapler vs Bautista
FACTS
Rappler, Inc. signed a Memorandum of Agreement (MOA) to sponsor the Presidential and
Vice-Presidential debates. Alleging that it is being discriminated particularly as regards the
MOA provisions on live audio broadcast via online streaming, Rappler argues that the MOA
grants radio stations the right to simultaneously broadcast live the audio of the debates, even
if the radio stations are not obliged to perform any obligation under the MOA. However, the
right to broadcast by online live streaming the audio of the debates is denied to the petitioner
and other online media entities which also have the capacity to live stream the audio of the
debates.
Rappler filed a petition for certiorari and prohibition against COMELEC Chairman Andres
Bautista to nullify MOA provisions on the ground of violating the fundamental rights protected
under the Constitution.
ISSUE: Whether petitioner has the right to live stream the debates
RULING: Yes, Rappler has the right to live stream the debates because the exercise to do so is
its contractual right under the MOA. Under the MOA, as long as it complies with the copyright
conditions for the debates, it can live stream the debates.
The MOA recognizes the right of other mass media entities, not parties to the MOA, to
reproduce the debates subject to the same copyright conditions. The freedom of the press to
report and disseminate the live audio can no longer be infringed or subject to prior restraint.
Such freedom of the press to report and disseminate the live audio of the debates is now
protected and guaranteed under Section 4, Article III of the Constitution, which provides that,
No law shall be passed abridging the freedomof the press.
The petition was partially granted. The COMELEC Chairman was directed to allow the debates
to be shown or live streamed unaltered on the petitioners website subject to the copyright
condition that the source is clearly indicated.
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