Ipl Cases Finals (1st Set).docx

G.R. No. L-40163 June 19, 1982 LEVITON INDUSTRIES, NENA DE LA CRUZ LIM, DOMINGO GO, and LIM KIAT, petitioners, vs. HON. SERAFIN SALVADOR, Judge, Court of First Instance of Rizal, Caloocan City, Branch XIV and LEVITON MANUFACTURING CO., INC., respondents. ESCOLIN, J: Challenged in this petition for certiorari and prohibition is the order of the respondent Judge Serafin Salvador in Civil Case No. C-2891 of the Court of First Instance of Rizal, sustaining the legal capacity of a foreign corporation to maintain a suit for unfair competition under Section 21-A of Republic Act No. 166, as amended, otherwise known as the Trademark Law. On April 17, 1973, private respondent Leviton Manufacturing Co., Inc. filed a complaint for unfair competition against petitioners Leviton Industries, Nena de la Cruz Lim, Domingo Go and Lim Kiat before the Court of First Instance of Rizal, Branch XXXIII, presided by respondent Judge Serafin Salvador. The complaint substantially alleges that plaintiff is a foreign corporation organized and existing under the laws of the State of New York, United States of America, with office located at 236 Greenpoint Avenue, Brooklyn City, State of New York, U.S.A.; that defendant Leviton Industries is a partnership organized and existing under the laws of the Philippines with principal office at 382 10th Avenue, Grace Park, Caloocan City; while defendants Nena de la Cruz Lim, Domingo Go and Lim Kiat are the partners, with defendant Domingo Go acting as General Manager of defendant Leviton Industries; that plaintiff, founded in 1906 by Isidor Leviton, is the largest manufacturer of electrical wiring devices in the United States under the trademark Leviton, which various electrical wiring devices bearing the trademark Leviton and trade name Leviton Manufacturing Co., Inc. had been exported to the Philippines since 1954; that due to the superior quality and widespread use of its products by the public, the same are well known to Filipino consumers under the trade name Leviton Manufacturing Co., Inc. and trademark Leviton; that long subsequent to the use of plaintiff's trademark and trade name in the Philippines, defendants began manufacturing and selling electrical ballast, fuse and oval buzzer under the trademark Leviton and trade name Leviton Industries Co.; that Domingo Go, partner and general manager of defendant partnership, had registered with the Philippine Patent Office the trademarks Leviton Label and Leviton with respect to ballast and fuse under Certificate of Registration Nos. SR-1132 and 15517, respectively, which registration was contrary to paragraphs (d) and (e) of Section 4 of RA 166, as amended, and violative of plaintiff's right over the trademark Leviton; that defendants not only used the trademark Leviton but likewise copied the design used by plaintiff in distinguishing its trademark; and that the use thereof by defendants of its products would cause confusion in the minds of the consumers and likely to deceive them as to the source of origin, thereby enabling defendants to pass off their products as those of plaintiff's. Invoking the provisions of Section 21-A of Republic Act No. 166, plaintiff prayed for damages. It also sought the issuance of a writ of injunction to prohibit defendants from using the trade name Leviton Industries, Co. and the trademark Leviton.

Defendants moved to dismiss the complaint for failure to state a cause of action, drawing attention to the plaintiff's failure to allege therein its capacity to sue under Section 21-A of Republic Act No. 166, as amended. After the filing of the plaintiff's opposition and the defendant's reply, the respondent judge denied the motion on the ground that the same did not appear to be indubitable. On September 21, 1973, defendants filed their answer, reiterating the ground supporting their motion to dismiss. Thereafter, defendants served upon plaintiff a request for admission under Rule 26 of the Rules of Court, of the following matters of fact, to wit: (1) That the plaintiff is not actually manufacturing, selling and/or distributing ballasts generally used in flourescent lighting; (2) That plaintiff has no registered trademark or trade name in the Philippine Patent Office of any of its products; and (3) That plaintiff has no license to do business in the Philippines under and by virtue of the provision of Act No. 1459, better known as the Philippine Corporation Law, at the time it filed the complaint. 1 Complying with the said request, plaintiff admitted: That it does not manufacture ballasts; that it has not registered its trademark in the Philippine Patent Office, but has filed with the same office an application of its trade mark on April 16, 1971; and that it has no license to do business in the Philippines. 2 On the basis of these admissions, defendants filed an Urgent Supplemental Motion to Dismiss. This was followed by the plaintiff's opposition, and the defendant's rejoinder, after which respondent judge issued the questioned order 3 denying the motion, thus: Acting on the Urgent Supplemental Motion to Dismiss, dated July 2, 1974, filed by counsels for the defendants, as well as the oppositions thereto, the Court after a careful consideration of the reasons adduced for and against said motion, is of the opinion that the same should be, as it is hereby DENIED. SO ORDERED. The motion for reconsideration having likewise been denied, defendants instituted the instant petition for certiorari and prohibition, charging respondent judge with grave abuse of discretion in denying their motion to dismiss. We agree with petitioners that respondent Leviton Marketing Co., Inc. had failed to allege the essential facts bearing upon its capacity to sue before Philippine courts. Private respondent's action is squarely founded on Section 21-A of Republic Act No. 166, as amended, which we quote:

Sec. 21-A. Any foreign corporation or juristic person to which a mark or tradename has been registered or assigned under this Act may bring an action hereunder for infringement, for unfair competition, or false designation of origin and false description, whether or not it has been licensed to do business in the Philippines under Act numbered Fourteen Hundred and Fifty-Nine, as amended, otherwise known as the Corporation Law, at the time it brings the complaint; Provided, That the country of which the said foreign corporation or juristic person is a citizen, or in which it is domiciled, by treaty, convention or law, grants a similar privilege to corporate or juristic persons of the Philippines. (As amended by R.A. No. 638) Undoubtedly, the foregoing section grants to a foreign corporation, whether or not licensed to do business in the Philippines, the right to seek redress for unfair competition before Philippine courts. But the said law is not without qualifications. Its literal tenor indicates as a condition sine qua non the registration of the trade mark of the suing foreign corporation with the Philippine Patent Office or, in the least, that it be an asignee of such registered trademark. The said section further requires that the country, of which the plaintiff foreign corporation or juristic person is a citizen or domicilliary, grants to Filipino corporations or juristic entities the same reciprocal treatment, either thru treaty, convention or law, All that is alleged in private respondent's complaint is that it is a foreign corporation. Such bare averment not only fails to comply with the requirements imposed by the aforesaid Section 21-A but violates as well the directive of Section 4, Rule 8 of the Rules of Court that "facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or the legal existence of an organized association of persons that is made a party, must be averred " In the case at bar, private respondent has chosen to anchor its action under the Trademark Law of the Philippines, a law which, as pointed out, explicitly sets down the conditions precedent for the successful prosecution thereof. It is therefore incumbent upon private respondent to comply with these requirements or aver its exemption therefrom, if such be the case. It may be that private respondent has the right to sue before Philippine courts, but our rules on pleadings require that the necessary qualifying circumstances which clothe it with such right be affirmatively pleaded. And the reason therefor, as enunciated in "Atlantic Mutual Insurance Co., et al. versus Cebu Stevedoring Co., Inc." 4 is that — these are matters peculiarly within the knowledge of appellants alone, and it would be unfair to impose upon appellees the burden of asserting and proving the contrary. It is enough that foreign corporations are allowed by law to seek redress in our courts under certain conditions: the interpretation of the law should not go so far as to include, in effect, an inference that those conditions had been met from the mere fact that the party sued is a foreign corporation.

It was indeed in the light of this and other considerations that this Court has seen fit to amend the former rule by requiring in the revised rules (Section 4, Rule 8) that "facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or the legal existence of an organized association of persons that is made a party, must be averred, IN VIEW OF THE FOREGOING, the instant petition is hereby granted and, accordingly, the order of the respondent judge dated September 27, 1974 denying petitioner's motion to dismiss is hereby set aside. The Court of First Instance of Rizal (Caloocan City), the court of origin, is hereby restrained from conducting further proceedings in Civil Case No. C-2891, except to dismiss the same. No costs. SO ORDERED. Facts: Private respondent Leviton Manufacturing Co. Inc. filed a complaint for unfair competition against petitioners Leviton Industries before the CFI of Rizal (RTC), presided by respondent Judge Serafin Salvador. The complaint substantially alleges that plaintiff (Leviton Manufacturing) is a foreign corporation organized and existing under the laws of the State of New York, United States of America with office located at 236 Greenpoint Avenue, Brooklyn City, State of New York, U.S.A. That defendant Leviton Industries is a partnership organized and existing under the laws of the Philippines with principal office at 382 10th Avenue, Grace Park, Caloocan City; while defendants Nena de la Cruz Lim, Domingo Go and Lim Kiat are the partners, with defendant Domingo Go acting as General Manager of defendant Leviton Industries. That plaintiff, founded in 1906 by Isidor Leviton, is the largest manufacturer of electrical wiring devices in the United States under the trademark Leviton, which various electrical wiring devices bearing the trademark Leviton and trade name Leviton Manufacturing Co., Inc. had been exported to the Philippines since 1954; that due to the superior quality and widespread use of its products by the public, the same are well known to Filipino consumers under the trade name Leviton Manufacturing Co., Inc. and trademark Leviton; that long subsequent to the use of plaintiff’s trademark and trade name in the Philippines, defendants (Leviton Industries) began manufacturing and selling electrical ballast, fuse and oval buzzer under the trademark Leviton and trade name Leviton Industries Co. That Domingo Go, partner and general manager of defendant partnership, had registered with the Philippine Patent Office the trademarks Leviton Label and Leviton with respect to ballast and fuse under Certificate of Registration Nos. SR-1132 and 15517, respectively, which registration was contrary to paragraphs (d) and (e) of Section 4 of RA 166, as amended, and violative of plaintiff’s right over the trademark Leviton; that defendants not only used the trademark Leviton but likewise copied the design used by plaintiff in distinguishing its trademark; and that the use thereof by defendants of its products would cause confusion in the minds of the consumers and likely to deceive them as to the source of origin, thereby enabling defendants to pass off their products as those of plaintiff’s. Invoking the provisions of Section 21-A of Republic Act No. 166, plaintiff prayed for damages. It also sought the issuance of a writ of injunction to prohibit defendants from using the trade name Leviton Industries, Co. and the trademark Leviton. Defendants moved to dismiss the complaint for failure to state a cause of action,

drawing attention to the plaintiff’s failure to allege therein its capacity to sue under Section 21-A of Republic Act No. 166, as amended. After the filing of the plaintiff’s opposition and the defendant’s reply, the respondent judge denied the motion on the ground that the same did not appear to be indubitable. The motion for reconsideration having likewise been denied, defendants instituted the instant petition for certiorari and prohibition, charging respondent judge with grave abuse of discretion in denying their motion to dismiss. Issue: Whether or not the plaintiff (Leviton Manufacturing) herein respondents, failed to allege the essential facts bearing its capacity to sue before Philippine courts. Ruling: Yes. We agree with petitioners that respondent Leviton Marketing Co., Inc. had failed to allege the essential facts bearing upon its capacity to sue before Philippine courts. Private respondent’s action is squarely founded on Section 21-A of Republic Act No. 166, as amended, which we quote: Sec. 21-A. Any foreign corporation or juristic person to which a mark or tradename has been registered or assigned under this Act may bring an action hereunder for infringement, for unfair competition, or false designation of origin and false description, whether or not it has been licensed to do business in the Philippines under Act numbered Fourteen Hundred and Fifty-Nine, as amended, otherwise known as the Corporation Law, at the time it brings the complaint; Provided, That the country of which the said foreign corporation or juristic person is a citizen, or in which it is domiciled, by treaty, convention or law, grants a similar privilege to corporate or juristic persons of the Philippines. (As amended by R.A. No. 638) Undoubtedly, the foregoing section grants to a foreign corporation, whether or not licensed to do business in the Philippines, the right to seek redress for unfair competition before Philippine courts. But the said law is not without qualifications. Its literal tenor indicates as a condition sine qua non the registration of the trade mark of the suing foreign corporation with the Philippine Patent Office or, in the least, that it be an asignee of such registered trademark. The said section further requires that the country, of which the plaintiff foreign corporation or juristic person is a citizen or domicilliary, grants to Filipino corporations or juristic entities the same reciprocal treatment, either thru treaty, convention or law, All that is alleged in private respondent’s complaint is that it is a foreign corporation. Such bare averment not only fails to comply with the requirements imposed by the aforesaid Section 21-A but violates as well the directive of Section 4, Rule 8 of the Rules of Court that “facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or the legal existence of an organized association of persons that is made a party, must be averred ”

In the case at bar, private respondent has chosen to anchor its action under the Trademark Law of the Philippines, a law which, as pointed out, explicitly sets down the conditions precedent for the successful prosecution thereof. It is therefore incumbent upon private respondent to comply with these requirements or aver its exemption therefrom, if such be the case. It may be that private respondent has the right to sue before Philippine courts, but our rules on pleadings require that the

necessary qualifying circumstances which clothe it with such right be affirmatively pleaded. And the reason therefor, as enunciated in “Atlantic Mutual Insurance Co., et al. versus Cebu Stevedoring Co., Inc.” 4 is that — these are matters peculiarly within the knowledge of appellants alone, and it would be unfair to impose upon appellees the burden of asserting and proving the contrary. It is enough that foreign corporations are allowed by law to seek redress in our courts under certain conditions: the interpretation of the law should not go so far as to include, in effect, an inference that those conditions had been met from the mere fact that the party sued is a foreign corporation. It was indeed in the light of this and other considerations that this Court has seen fit to amend the former rule by requiring in the revised rules (Section 4, Rule 8) that “facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or the legal existence of an organized association of persons that is made a party, must be averred, IN VIEW OF THE FOREGOING, the instant petition is hereby granted and, accordingly, the order of the respondent judge dated September 27, 1974 denying petitioner’s motion to dismiss is hereby set aside. The Court of First Instance of Rizal (Caloocan City), the court of origin, is hereby restrained from conducting further proceedings in Civil Case No. C-2891, except to dismiss the same. No costs.

G.R. No. 75067 February 26, 1988 PUMA SPORTSCHUHFABRIKEN RUDOLF DASSLER, K.G., petitioner vs. THE INTERMEDIATE APPELLATE COURT and MIL-ORO MANUFACTURING CORPORATION, respondents.

GUTIERREZ, JR., J.: This is a petition for review by way of certiorari of the Court of Appeals' decision which reversed the order of the Regional Trial Court and dismissed the civil case filed by the petitioner on the grounds of litis pendentia and lack of legal capacity to sue. On July 25, 1985, the petitioner, a foreign corporation duly organized and existing under the laws of the Federal Republic of Germany and the manufacturer and producer of "PUMA PRODUCTS," filed a complaint for infringement of patent or trademark with a prayer for the issuance of a writ of preliminary injunction against the private respondent before the Regional Trial Court of Makati. Prior to the filing of the said civil suit, three cases were pending before the Philippine Patent Office, namely: Inter Partes Case No. 1259 entitled 'PUMA SPORTSCHUHFABRIKEN v. MIL-ORO MANUFACTURING CORPORATION, respondent-applicant which is an opposition to the registration of petitioner's trademark 'PUMA and DEVICE' in the PRINCIPAL REGISTER; Inter Partes Case No. 1675 similarly entitled, 'PUMA SPORTSCHUHFABRIKEN RUDOLF DASSLER, K.G., petitioner, versus MIL-ORO MANUFACTURING CORPORATION, respondent-registrant,' which is a case for the cancellation of the trademark registration of the petitioner; and Inter Partes Case No. 1945 also between the same parties this time the petitioner praying for the cancellation of private respondent's Certificate of Registration No. 26875 (pp. 40-41, 255, Rollo) (pp. 51 -52, Rollo) On July 31, 1985, the trial court issued a temporary restraining order, restraining the private respondent and the Director of Patents from using the trademark "PUMA' or any reproduction, counterfeit copy or colorable imitation thereof, and to withdraw from the market all products bearing the same trademark.

On August 9, 1985, the private respondent filed a motion to dismiss on the grounds that the petitioners' complaint states no cause of action, petitioner has no legal personality to sue, and litis pendentia. On August 19, 1985, the trial court denied the motion to dismiss and at the same time granted the petitioner's application for a writ of injunction. The private respondents appealed to the Court of Appeals. On June 23, 1986, the Court of Appeals reversed the order of the trial court and ordered the respondent judge to dismiss the civil case filed by the petitioner. In reversing the order of the trial court, the Court of Appeals ruled that the requisites of lis pendens as ground for the motion to dismiss have been met. It said: Obviously, the parties are Identical. They are the same protagonists. As to the second requisite, which is Identity of rights and reliefs prayed for, both sides maintain that they are the rightful owners of the trademark "PUMA" for socks and belts such that both parties seek the cancellation of the trademark of the other (see prayer in private respondent's complaint, pp, 54-55, Rollo, Annex "A" to the Petition). Inevitably, in either the lower court or in the Patent Office, there is a need to resolve the issue as to who is the rightful owner of the TRADEMARK 'PUMA' for socks and belts.After all,the right to register a trademark must be based on ownership thereof (Operators Inc. v. Director of Patents, L-17910, Oct. 29,1965,15 SCRA 147). Ownership of the trademark is an essential requisite to be proved by the applicant either in a cancellation case or in a suit for infringement of trademark. The relief prayed for by the parties in Inter Partes Cases Nos. 1259, 1675 and 1945 and Civil Case No. 11189 before respondent court seek for the cancellation of usurper's trademark, and the right of the legal owner to have exclusive use of said trademark. From the totality of the obtaining circumstances, the rights of the respective parties are dependent upon the resolution of a single issue, that is, the rightful ownership of the trademark in question. The second requisite needed to justify a motion to dismiss based on lis pendens is present. As to the third requisite, the decisions and orders of administrative agencies rendered pursuant to their quasi-judicial authority have upon their finality the character of res judicata (Brilliantes v. Castro, 99 Phil. 497). The rule which forbids the re-opening of a matter once judicially determined by competent authority applies as well to judicial acts of public executive and administrative officers and boards acting within their jurisdiction as to the judgments of Courts having general judicial powers (Brilliantes vs. Castro, supra). It may be recalled that the resolution and determination of the issue on ownership are both within the jurisdiction of the Director of Patents and the Regional Trial Court (Sec 25, RA 166). It would thus be confusing for two (2) different forums to hear the same case and

resolve a main and determinative issue with both forums risking the possibility of arriving at different conclusions. In the construction of laws and statutes regarding jurisdiction, one must interpret them in a complementary manner for it is presumed that the legislature does not intend any absurdity in the laws it makes (Statutory Construction, Martin, p. 133). Ms is precisely the reason why both decisions of the Director of Patents and Regional Trial Court are appealable to the Intermediate Appellate Court (Sec. 9, BP 129), as both are co-equal in rank regarding the cases that may fall within their jurisdiction.

Respondent Leviton Manufacturing Co. Inc., alleged in par. 2 of its complaint for unfair competition that its action 'is being filed under the provisions of Section 21-A of Republic Act No. 166, as amended.' Respondent is bound by the allegation in its complaint. It cannot sue under Section 21-A because it has not complied with the requirements hereof that (1) its trademark Leviton has been registered with the Patent Office and (2) that it should show that the State of New York grants to Philippine Corporations the privilege to bring an action for unfair competition in that state. Respondent 'Leviton has to comply with those requirements before it can be allowed to maintain an action for unfair competition.(p. 9, CA — decision).(p. 55, Rollo).

The record reveals that on March 31, 1986, the Philippine Patent Office rendered a decision in Inter Partes Cases Nos. 1259 and 1675 whereby it concluded that petitioner is the prior and actual adaptor of the trademark 'PUMA and DEVICE used on sports socks and belts, and that MIL-ORO CORPORATION is the rightful owner thereof. ... (pp. 6-7, CA — decision, pp. 51-52, Rollo) With regard to the petitioner's legal capacity to sue, the Court of Appeals likewise held that it had no such capacity because it failed to allege reciprocity in its complaint: As to private respondent's having no legal personality to sue, the record discloses that private respondent was suing under Sec. 21-A of Republic Act No. 166, as amended (p. 50, Annex "A", Petition). This is the exception to the general rule that a foreign corporation doing business in the Philippines must secure a license to do business before said foreign corporation could maintain a court or administrative suit (Sec. 133, Corporation Code, in relation to Sec. 21-A, RA 638, as amended). However, there are some conditions which must be met before that exception could be made to apply, namely: (a) the trademark of the suing corporation must be registered in the Philippines, or that it be the assignee thereof: and (b) that there exists a reciprocal treatment to Philippine Corporations either by law or convention by the country of origin of the foreign corporation (Sec. 21-A Trademark Law). Petitioner recognizes that private respondent is the holder of several certificates of registration, otherwise, the former would not have instituted cancellation proceedings in the Patent's Office. Petitioner actually zeroes on the second requisite provided by Section 21-A of the Trademark Law which is the private respondent's failure to allege reciprocity in the complaint. ... Citing the case of Leviton Industries v. Salvador (114 SCRA 420), it further ruled: Failure to allege reciprocity, it being an essential fact under the trademark law regarding its capacity to sue before the Philippine courts, is fatal to the foreign corporations' cause. The Concurring Opinion of Chief Justice Aquino on the same case is more emphatic when he said:

The Court of Appeals further ruled that in issuing the writ of preliminary injunction, the trial court committed grave abuse of discretion because it deprived the private respondent of its day in court as the latter was not given the chance to present its counter-evidence. In this petition for review, the petitioner contends that the Court of appeals erred in holding that: (1) it had no legal capacity to sue; (2) the doctrine of lis pendens is applicable as a ground for dismissing the case and (3) the writ of injunction was improperly issued. Petitioner maintains that it has substantially complied with the requirements of Section 21-A of Republic Act R.A. No. 166, as amended. According to the petitioner, its complaint specifically alleged that it is not doing business in the Philippines and is suing under the said Repulbic Act; that Section 21-A thereof provides that "the country of which the said corporation or juristic person is a citizen, or in which it is domiciled, by treaty, convention or law, grants a similar privilege to corporate or juristic persons of the Philippines" but does not mandatorily require that such reciprocity between the Federal Republic of Germany and the Philippines be pleaded; that such reciprocity arrangement is embodied in and supplied by the Union Convention for the Protection of Industrial Property Paris Convention) to which both the Philippines and Federal Republic of Germany are signatories and that since the Paris 'Convention is a treaty which, pursuant to our Constitution, forms part of the law of the land, our courts are bound to take judicial notice of such treaty, and, consequently, this fact need not be averred in the complaint. We agree. In the leading case of La Chemise Lacoste, S.A .v. Fernandez, (129 SCRA 373), we ruled: But even assuming the truth of the private respondents allegation that the petitioner failed to allege material facto in its petition relative to capacity to sue, the petitioner may still maintain the

present suit against respondent Hernandes. As early as 1927, this Court was, and it still is, of the view that a foreign corporation not doing business in the Philippines needs no license to sue before Philippine courts for infringement of trademark and unfair competition. Thus, in Western Equipment and Supply Co. v. Reyes (51 Phil. 11 5), this Court held that a foreign corporation which has never done any business in the Philippines and which is unlicensed and unregistered to do business here, but is widely and favorably known in the Philippines through the use therein of its products bearing its corporate and tradename, has a legal right to maintain an action in the Philippines to restrain the residents and inhabitants thereof from organizing a corporation therein bearing the same name as the foreign corporation, when it appears that they have personal knowledge of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is to deal and trade in the same goods as those of the foreign corporation. Quoting the Paris Convention and the case of Vanity Fair Mills, Inc. v. T. Eaton, Co. (234 F. 2d 633), this Court further said: By the same token, the petitioner should be given the same treatment in the Philippines as we make available to our own citizens. We are obligated to assure to nationals of 'countries of the Union' an effective protection against unfair competition in the same way that they are obligated to similarly protect Filipino citizens and firms. Pursuant to this obligation, the Ministry of Trade on November 20,1980 issued a memorandum addressed to the Director of the Patents Office directing the latter -xxx xxx xxx ... [T]o reject all pending applications for Philippine registration of signature and other world famous trademarks by applicants other than its original owners or users. The conflicting claims over internationally known trademarks involve such name brands as Lacoste, Jordache, Gloria Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus. It is further directed that, in cases where warranted, Philippine registrants of such trademarks should be asked to surrender their certificates of registration, if any, to avoid suits for damages and other legal action by the trademarks' foreign or local owners or original users.

The memorandum is a clear manifestation of our avowed adherence to a policy of cooperation and amity with an nations. It is not, as wrongly alleged by the private respondent, a personal policy of Minister Luis Villafuerte which expires once he leaves the Ministry of trade. For a treaty or convention is not a mere moral obligation to be enforced or not at the whims of an incumbent head of a Ministry. It creates a legally binding obligation on the parties founded on the generally accepted principle of international law of pacta sunt servanda which has been adopted as part of the law of our land. (Constitution, Art. II, Sec. 3). The memorandum reminds the Director of Patents of his legal duty to obey both law and treaty. It must also be obeyed. (at pp. 389-390, La Chemise Lacoste, S.A. v. Fernandez, supra). In the case of of Cerverse Rubber Corporation V. Universal Rubber Products, Inc. (174 SCRA 165), we likewise re-aafirmed our adherence to the Paris Convention: The ruling in the aforecited case is in consonance with the Convention of Converse Rubber Corporation v. Universal Rubber Products, Inc. (I 47 SCRA 165), we likewise re-affirmed our adherence to the Paris Convention: the Union of Paris for the Protection of Industrial Property to which the Philippines became a party on September 27, 1965. Article 8 thereof provides that 'a trade name [corporation name] shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of the trademark.' The object of the Convention is to accord a national of a member nation extensive protection 'against infringement and other types of unfair competition [Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F. 2d 633]." (at p. 165) The mandate of the aforementioned Convention finds implementation in Section 37 of RA No. 166, otherwise known as the trademark Law: Rights of Foreign Registrants. — Persons who are nationals of, domiciled in, or have a bona fide or effective business or commercial establishment in any foreign country, which is a party to an international convention or treaty relating to marks or tradenames on the represssion of unfair competition to which the Philippines may be party, shall be entitled to the benefits and subject to the provisions of this Act ... Tradenames of persons described in the first paragraph of this section shall be protected without the obligation of filing or registration whether or not they form part of marks. We, therefore, hold that the petitioner had the legal capacity to file the action below.

Anent the issue of lis pendens as a ground for a motion to dismiss, the petitioner submits that the relief prayed for in its civil action is different from the relief sought in the Inter Partes cases. More important, however, is the fact that for lis pendens to be a valid ground for the dismissal of a case, the other case pending between the same parties and having the same cause must be a court action. As we have held in Solancho v. Ramos (19 SCRA 848):

much the manufacturer whose product is being faked but the Filipino consuming public and in the case of exportations, our image abroad. No less than the President, in issuing Executive Order No. 913 dated October 7, 1983 to strengthen the powers of the Minister of Trade and Industry for the protection of consumers, stated that, among other acts, the dumping of substandard, imitated, hazardous, and cheap goods, the infringement of internationally known tradenames and trademarks, and the unfair trade Practices of business firms have reached such proportions as to constitute economic sabotage. We buy a kitchen appliance, a household tool, perfume, face powder, other toilet articles, watches, brandy or whisky, and items of clothing like jeans, T-shirts, neckties, etc. — the list is quite lengthy — pay good money relying on the brand name as guarantee of its quality and genuine nature only to explode in bitter frustration and helpless anger because the purchased item turns out to be a shoddy imitation, albeit a clever looking counterfeit, of the quality product. Judges all over the country are well advised to remember that court processes should not be used as instruments to, unwittingly or otherwise, aid counterfeiters and intellectual pirates, tie the hands of the law as it seeks to protect the Filipino consuming public and frustrate executive and administrative implementation of solemn commitments pursuant to international conventions and treaties. (at p. 403)

As noted above, the defendants contend that the pendency of an administrative between themselves and the plaintiff before the Bureau of Lands is a sufficient ground to dismiss the action. On the other hand, the plaintiff, believing that this ground as interposed by the defendants is a sufficient ground for the dismissal of his complaint, filed a motion to withdraw his free patent application No. 16649. This is not what is contemplated under the law because under section 1(d), Rule 16 (formerly Rule 8) of the Rules of Court, one of the grounds for the dismissal of an action is that "there is another action pending between the same parties for the same cause." Note that the Rule uses the phrase another action. This phrase should be construed in line with Section 1 of Rule 2, which defines the word action, thus-Action means an ordinary suit in a court of justice by which one party prosecutes another for the enforcement or protection of alright, or the prevention or redress of a wrong. Every other remedy is a special proceeding. It is,therefore,very clear that the Bureau of Land is not covered under the aforementioned provisions of the Rules of Court. (at p. 851) Thus, the Court of Appeals likewise erred in holding that the requisites of lis pendens were present so as to justify the dismissal of the case below. As regards the propriety of the issuance of the writ of preliminary injunuction, the records show that herein private respondent was given the opportunity to present its counter-evidence against the issuance thereof but it intentionally refused to do so to be consistent with its theory that the civil case should be dismissed in the first place. Considering the fact that "PUMA" is an internationally known brand name, it is pertinent to reiterate the directive to lower courts, which equally applies to administrative agencies, found in La Chemise Lacoste, S.A. v. Fernandez, supra): One final point. It is essential that we stress our concern at the seeming inability of law enforcement officials to stem the tide of fake and counterfeit consumer items flooding the Philippine market or exported abroad from our country. The greater victim is not so

WHEREFORE, the appealed decision of the Court of Appeals dated June 23, 1986 is REVERSED and SET ASIDE and the order of the Regional Trial Court of Makati is hereby Reinstated. SO ORDERED.

G.R. No. L-18289

March 31, 1964

ANDRES ROMERO, petitioner, vs. MAIDEN FORM BRASSIERE CO., INC., and THE DIRECTOR OF PATENTS, respondents. Alafriz Law Office for petitioner. Ross, Selph & Carrascoso for respondent Maiden Form Brassiere Co., Inc. Office of the Solicitor General and Tiburcio S. Evalle for respondent Director of Patents. BARRERA, J.: From the decision of the Director of Patents (of January 17, 1961) dismissing his petition for cancellation of the registration of the trademark "Adagio" for brassieres manufactured by respondent Maiden Form Brassiere Co., Inc., petitioner Andres Romero, interposed this appeal. On February 12, 1957, respondent company, a foreign corporation, filed with respondent Director of Patents an application for registration (pursuant to Republic Act No. 166) of the trademark "Adagio" for the brassieres manufactured by it. In its application, respondent company alleged that said trademark was first used by it in the United States on October 26, 1937, and in the Philippines on August 31, 1946; that it had been continuously used by it in trade in, or with the Philippines for over 10 years; that said trademark "is on the date of this application, actually used by respondent company on the following goods, classified according to the official classification of goods (Rule 82) - Brassieres, Class 40"; and that said trademark is applied or affixed by respondent to the goods by placing thereon a woven label on which the trademark is shown. Acting on said application, respondent Director, on August 13, 1957, approved for publication in the Official Gazette said trademark of respondent company, in accordance with Section 7 of Republic Act No. 166 (Trademark Law), having found, inter alia, that said trademark is "a fanciful and arbitrary use of a foreign word adopted by applicant as a trademark for its product; that it is neither a surname nor a geographical term, nor any that comes within the purview of Section 4 of Republic Act No. 166; and that the mark as used by respondent company convincingly shows that it identifies and distinguishes respondent company's goods from others." On October 17, 1957, respondent Director issued to respondent company a certificate of registration of with, trademark "Adagio". On February 26, 1958, petitioner filed with respondent Director a petition for cancellation of said trademark, on the grounds that it is a common descriptive name of an article or substance on which the patent has expired; that its registration was obtained fraudulently or contrary to the provisions of Section 4, Chapter II of Republic Act No. 166; and that the application for its registration was not filed in accordance with the provisions of Section 37, Chapter XI of the same Act. Petitioner also alleged

that said trademark has not become distinctive of respondent company's goods or business; that it has been used by respondent company to classify the goods (the brassieres) manufactured by it, in the same manner as petitioner uses the same; that said trademark has been used by petitioner for almost 6 years; that it has become a common descriptive name; and that it is not registered in accordance with the requirements of Section 37(a), Chapter XI of Republic Act No. 166. Issues having been joined, the case was heard and, after hearing, respondent Director (on January 17, 1961) rendered the decision above adverted to. Petitioner filed a motion for reconsideration of said decision, on the grounds that (1) it is contrary to the evidence, and (2) it is contrary to law. Said motion was denied by respondent Director by resolution of March 7, 1961. Hence, this appeal. Appellant claims that the trademark "Adagio" has become a common descriptive name of a particular style of brassiere and is, therefore, unregistrable. It is urged that said trademark had been used by local brassiere manufacturers since 1948, without objection on the part of respondent company. This claim is without basis in fact. The evidence shows that the trademark "Adagio" is a musical term, which means slowly or in an easy manner, and was used as a trademark by the owners thereof (the Rosenthals of Maiden Form Co., New York) because they are musically inclined. Being a musical term, it is used in an arbitrary (fanciful) sense as a trademark for brassieres manufactured by respondent company. It also appears that respondent company has, likewise, adopted other musical terms such as "Etude" (Exh. W-2), "Chansonette" (Exh. W-3), "Prelude" (Exh. W-4), "Overture" (Exh. W-6), and "Concerto" (Exh. V), to identify, as a trademark, the different styles or types of its brassieres. As respondent Director pointed out, "the fact that said mark is used also to designate a particular style of brassiere, does not affect its registrability as a trademark" (Kiekhaefer Corp. v. Willys-Overland Motors, Inc., 111 USPQ 105).1äwphï1.ñët It is not true that respondent company did not object to the use of said trademark by petitioner and other local brassiere manufacturers. The records show that respondent company's agent, Mr. Schwartz, warned the Valleson Department Store to desist from the sale of the "Adagio" Royal Form brassieres manufactured by petitioner (t.s.n., pp. 27-28, Oct. 7, 1958), and even placed an advertisement (Exhs. 3 & 4) in the local newspapers (Manila Daily Bulletin, Manila Times, Fookien Times, and others) warning the public against unlawful use of said trademark (t.s.n., p. 15, Aug. 17, 1959). The advertisement (Exh. U) in the Manila Times made by respondent company on February 9, 1958, was brought to petitioner's attention (t.s.n., p. 24, Oct. 7, 1958), which must have prompted him to file this present petition for cancellation, on February 26, 1958. On the other hand, respondent company's long and continuous use of the trademark "Adagio" has not rendered it merely descriptive of the product. In Winthrop Chemical

Co. v. Blackman (268 NYS 653), it was held that widespread dissemination does not justify the defendants in the use of the trademark. Veronal has been widely sold in this country by the plaintiff; over 5,250,000 packages have been sold since 1919. This is a consequence of the long and continued use by the plaintiff of this trademark and is the result of its efforts to inform the profession and the public of its product. This widespread dissemination does not justify the defendants in the use of this trademark. If this argument were sound, then every time a plaintiff obtained the result of having the public purchase its article, that fact of itself would destroy a trademark. Arbitrary trademarks cannot become generic in this way. Jacobs v. Beecham, 221 U.S. 263, 31 S. Ct. 555, 55 L. Ed. 729; Coca-Cola Co. v. Koke Co. of American, 254 U.S. 143, 41 S. Ct. 113, 65 L. Ed. 189. (emphasis supplied.) Appellant next contends that the trademark "Adagio at the time it was registered (in the Philippines) on October 17, 1957, had long been used by respondent company, only "to designate a particular style or quality of brassiere and, therefore, is unregistrable as a trademark. In support of the contention, he alleges that the sentence "Maidenform bras are packaged for your quick shopping convenience. For other popular Maidenform styles writ for free style booklet to: Maiden Form Brassiere Co., Inc 200 Madison Avenue, New York 16, N.Y." printed on the package (Exh. W), shows that the trademark "Adagio" is used to designate a particular style or quality of brassiere. He also cites portions of the testimonies of his witnesses Bautista and Barro, to the effect that said trademark refers to the style of brassieres sold in the stores of which they are salesmen. This contention is untenable. Said sentence appearing on the package (Exh. W), standing alone, does not conclusively indicate that the trademark "Adagio" is merely a style of brassiere. The testimony of Mr. Schwartz, witness of respondent company, belies petitioner's claim: Q. There is a statement at the bottom of Exhibit W which reads, 'There is a Maidenform for every type of figure'. As you stated you are very familiar with these bras manufacture by Maidenform Brassiere Company, what are these types of figures this Exhibit W refer to? A. This is a product sold primarily in the United States they have cold climate there, and a style to suit the climate and we have different here. This kind of bra very seldom comes here. This type is very expensive and sold primarily in the United States. We do not sell it here; it is very expensive an import restrictions do not allow our dollar allocations for such sort. As to the testimonies of Bautista and Barro, they are me conclusions of said witnesses. Note that when Bautista was asked why he considered the trademark "Adagio" as a style, he replied that the brand "Adagio" is attached distinguish the style. He stated as follows:

Q. You said that those bras mentioned by you such as Adagio, Prelude, Alloette, are styles, will you please tell us the reason why you said that those are styles? A. You know his brand like Adagio, Alloette are just attached to the bras just to distinguish the style: It is not the main brand. Barro, on the other hand, said that "Adagio" is a mark. She declared as follows: Q. You state that you used to sell brassieres in the store in which you work; when customers come to your store and ask for brassieres, what do they usually ask from you? A. Well, I tell you there are so many types and certain types of people ask for certain brassiere. There are people who ask for Royal Form Adagio and there are others who ask for Duchess Ideal Form, and so many kinds of marks. Brassieres are usually of different types or styles, and appellee has used different trademarks for every type as shown by its labels, Exhibits W-2 (Etude), W-3 (Chansonette), W-4 (Prelude), W-5 (Maidenette), and W-6, (Overture). The mere fact that appellee uses "Adagio" for one type or style, does not affect the validity of such word as a trademark. In. the case of Kiekhaefer Corp. v. Willys-Overland Motors, 111 USPQ 105, it was held that the fact that the word "Hurricane" was used to designate only one model of automobile, did not affect the validity of that word as a trademark. In Minnesota Mining Co. V. Motloid Co., 74 USPQ 235, the applicant sought to register the letters "MM" in diagonal relationship within a circle. Applicant admitted that this mark was used only for its medium price and medium quality denture-base materials. The Assistant Commissioner of Patents held: It clearly appears, however, that the mark serves to indicate origin of applicant's goods; and the fact that it is used on only one of several types or grades does not affect its registrability as a trade mark. Appellant also claims that respondent Director erred in registering the trademark in question, despite appellee's non-compliance with Section 37, paragraphs 1 and 4 (a) of Republic Act No. 166. This contention flows from a misconception of the application for registration of trademark of respondent. As we see it, respondent's application was filed under the provisions of Section 2 of Republic Act No. 166 as amended by Section 1 of Republic Act 865 which reads as follows: "SEC. 2. What are registrable — Trademarks, ... own by persons, corporations, partnerships or associations domiciled ... in any foreign country may be registered in accordance with the provisions of this Act: Provided, That said trademarks, trade-names, or service marks are actually in use in commerce and services not less than two months in the Philippines before the time the applications for registration are filed: ..."

Section 37 of Republic Act No. 166 can be availed of only where the Philippines is a party to an international convention or treaty relating to trademarks, in which the trade-mark sought to be registered need not be use in the Philippines. The applicability of Section 37 has been commented on by the Director of Patents, in this wise: Trademark rights in the Philippines, without actual use the trademark in this country can, of course, be created artificially by means of a treaty or convention with another country or countries. Section 37 of the present Philippine Trademark Law, Republic Act No. 166 (incorporated as Rule 82 in the Rules of Practice for Registration of Trademarks) envisions the eventual entrance of the Philippines into such convention treaty. It is provided in said section that applications filed thereunder need not allege use in the Philippines of the trade mark sought to be registered. The Philippines has, however not yet entered into any such treaty or convention and, until she does, actual use in the Philippines of the trademark sought to be registered and allegation in the application of such fact, will be required in all applications for original or renewal registration submitted to the Philippine Patent Office. (Circular Release No. 8.) Appellant, likewise, contends that the registration the trademark in question was fraudulent or contrary Section 4 of Republic Act No. 166. There is no evidence to show that the registration of the trademark "Adagio" was obtained fraudulently by appellee. The evidence record shows, on the other hand, that the trademark "Adagio" was first exclusively in the Philippines by a appellee in the year 1932. There being no evidence of use of the mark by others before 1932, or that appellee abandoned use thereof, the registration of the mark was made in accordance with the Trademark Law. Granting that appellant used the mark when appellee stopped using it during the period of time that the Government imposed restrictions on importation of respondent's brassiere bearing the trademark, such temporary non-use did not affect the rights of appellee because it was occasioned by government restrictions and was not permanent, intentional, and voluntary. To work an abandonment, the disuse must be permanent and not ephemeral; it must be intentional and voluntary, and not involuntary or even compulsory. There must be a thorough-going discontinuance of any trademark use of the mark in question (Callman, Unfair Competition and Trademark, 2nd Ed., p. 1341). The use of the trademark by other manufacturers did not indicate an intention on the part of appellee to abandon it. "The instances of the use by others of the term 'Budweiser, cited by the defendant, fail, even when liberally construed, to indicate an intention upon the part of the complainant to abandon its rights to that name. 'To establish the defense of abandonment, it is necessary to show not only acts indicating a practical abandonment, but an actual intention to abandon. Saxlehner v. Eisener & Mendelson Co., 179 U.S. 19, 21 S. Ct. 7 (45 L. Ed. 60).(Anheuser-Busch, Inc. v. Budweiser Malt Products Corp., 287 F. 245.)

Appellant next argues that respondent Director erred in declaring illegal the appropriation in the Philippines of the trademark in question by appellant and, therefore, said appropriation did not affect appellee's right thereto and the subsequent registration thereof. Appellant urges that its appropriation of the trademark in question cannot be considered illegal under Philippine laws, because of non-compliance by appellee of Section 37 of Republic Act No. 166. But we have already shown that Section 37 is not the provision invoked by respondent because the Philippines is not as yet a party to any international convention or treaty relating to trademarks. The case of United Drug Co. v. Rectanus, 248 U.S. 90, 39 S. Ct. 48, 63 L. Ed. 141, cited by appellant, is not applicable to the present case, as the records show that appellee was the first user of the trademark in the Philippines, whereas appellant was the later user. Granting that appellant used the trade-mark at the time appellee stopped using it due to government restrictions on certain importations, such fact did not, as heretofore stated, constitute abandonment of the trademark as to entitle anyone to its free use. Non-use because of legal restrictions is not evidence of an intent to abandon. Non-use of their ancient trade-mark and the adoption of new marks by the Carthusian Monks after they had been compelled to leave France was consistent with an intention to retain their right to use their old mark. Abandonment will not be inferred from a disuse over a period of years occasioned by statutory restrictions on the name of liquor. (Nims Unfair Competition and Trade-Mark p. 1269.) IN VIEW OF ALL THE FOREGOING, we are of the opinion and so hold, that respondent Director of Patents did not err in dismissing the present petition for cancellation of the registered trademark of appellee company, and the decision appealed from is therefore hereby affirmed, with costs against the appellant. So ordered.

G.R. No. 111580

June 21, 2001

SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT LTD., SHANGRI-LA PROPERTIES, INC., MAKATI SHANGRI-LA HOTEL AND RESORT, INC. and KUOK PHILIPPINE PROPERTIES, INC., petitioners, vs. THE COURT OF APPEALS, HON. FELIX M. DE GUZMAN, as Judge, RTC of Quezon City, Branch 99 and DEVELOPERS GROUP OF COMPANIES, INC., respondents. ---------------------------------------G.R. No. 114802

June 21, 2001

DEVELOPERS GROUP OF COMPANIES, INC., petitioner, vs. THE COURT OF APPEALS, HON. IGNACIO S. SAPALO, in his capacity as Director, Bureau of Patents, Trademarks and Technology Transfer, and SHANGRI-LA INTERNATIONAL HOTEL MANAGEMENT, LTD.,respondents. YNARES-SANTIAGO, J.: On June 21, 1988, the Shangri-La International Hotel Management, Ltd., Shangri-La Properties, Inc., Makati Shangri-La Hotel and Resort, Inc. and Kuok Philippine Properties, Inc. (hereinafter collectively referred as the "Shangri-La Group"), filed with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) a petition, docketed as Inter Partes Case No. 3145, praying for the cancellation of the registration of the "Shangri-La" mark and "S" device/logo issued to the Developers Group of Companies, Inc., on the ground that the same was illegally and fraudulently obtained and appropriated for the latter's restaurant business. The Shangri-La Group alleged that it is the legal and beneficial owners of the subject mark and logo; that it has been using the said mark and logo for its corporate affairs and business since March 1962 and caused the same to be specially designed for their international hotels in 1975, much earlier than the alleged first use thereof by the Developers Group in 1982. Likewise, the Shangri-La Group filed with the BPTTT its own application for registration of the subject mark and logo. The Developers Group filed an opposition to the application, which was docketed as Inter Partes Case No. 3529. Almost three (3) years later, or on April 15, 1991, the Developers Group instituted with the Regional Trial Court of Quezon City, Branch 99, a complaint for infringement and damages with prayer for injunction, docketed as Civil Case No. Q-91-8476, against the Shangri-La Group. On January 8, 1992, the Shangri-La Group moved for the suspension of the proceedings in the infringement case on account of the pendency of the administrative proceedings before the BPTTT.1 This was denied by the trial court in a Resolution issued on January 16, 1992.2 The Shangri-La Group filed a Motion for

Reconsideration.3Soon thereafter, it also filed a Motion to Inhibit against Presiding Judge Felix M. de Guzman.4 On July 1, 1992, the trial court denied both motions.5 The Shangri-La Group filed a petition for certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 29006.6 On February 15, 1993, the Court of Appeals rendered its decision dismissing the petition for certiorari. 7The Shangri-La Group filed a Motion for Reconsideration, which was denied on the ground that the same presented no new matter that warranted consideration.8 Hence, the instant petition, docketed as G.R. No. 111580, based on the following grounds: THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT: I. THE INFRINGEMENT CASE SHOULD BE DISMISSED OR AT LEAST SUSPENDED; AND II. THE HONORABLE PRESIDING JUDGE SHOULD INHIBIT HIMSELF FROM TRYING THE INFRINGEMENT CASE.9 Meanwhile, on October 28, 1991, the Developers Group filed in Inter Partes Case No. 3145 an Urgent Motion to Suspend Proceedings, invoking the pendency of the infringement case it filed before the Regional Trial Court of Quezon City. 10 On January 10, 1992, the BPTTT, through Director Ignacio S. Sapalo, issued an Order denying the Motion.11 A Motion for Reconsideration was filed which was, however, denied in a Resolution dated February 11, 1992.12 From the denial by the BPTTT of its Urgent Motion to Suspend Proceedings and Motion for Reconsideration, the Developers Group filed with the Court of Appeals a petition for certiorari, mandamus and prohibition, docketed as CA-G.R. SP No. 27742.13 On March 29, 1994, the Court of Appeals dismissed the petition for lack of merit.14 A petition for review was thereafter filed, docketed as G.R. No. 114802, raising the issue of: WHETHER OR NOT, GIVEN THE ESTABLISHED FACTS AND CIRCUMSTANCES ON RECORD AND THE LAW AND JURISPRUDENCE APPLICABLE TO THE MATTER, THE RESPONDENT COURT ERRED IN HOLDING THAT, INASMUCH AS BOTH THE CIVIL ACTION AND THE ADMINISTRATIVE PROCEEDINGS HERE INVOLVED MAY CO-EXIST AND THE LAW DOES NOT PROVIDE FOR ANY PREFERENCE BY ONE OVER THE OTHER, THE RESPONDENT DIRECTOR HAD JURISDICTION TO RULE AS HE DID AND HAD NOT INCURRED ANY GRAVE ABUSE OF DISCRETION CORRECTIBLE BY THE EXTRAORDINARY REMEDIES OF CERTIORARI, PROHIBITION AND MANDAMUS.15

On February 2, 1998, G.R. Nos. 111580 and 114802 were ordered consolidated. The core issue is simply whether, despite the institution of an Inter Partes case for cancellation of a mark with the BPTTT (now the Bureau of Legal Affairs, Intellectual Property Office) by one party, the adverse party can file a subsequent action for infringement with the regular courts of justice in connection with the same registered mark. We rule in the affirmative. Section 151.2 of Republic Act No. 8293, otherwise known as the Intellectual Property Code, provides, as follows – Section 151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark.On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. (Emphasis provided) Similarly, Rule 8, Section 7, of the Regulations on Inter Partes Proceedings, provides to wit – Section 7. Effect of filing of a suit before the Bureau or with the proper court. - The filing of a suit to enforce the registered mark with the proper court or Bureau shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided.(Emphasis provided) Hence, as applied in the case at bar, the earlier institution of an Inter Partes case by the Shangri-La Group for the cancellation of the "Shangri-La" mark and "S" device/logo with the BPTTT cannot effectively bar the subsequent filing of an infringement case by registrant Developers Group. The law and the rules are explicit. The rationale is plain: Certificate of Registration No. 31904, upon which the infringement case is based, remains valid and subsisting for as long as it has not been cancelled by the Bureau or by an infringement court. As such, Developers Group's Certificate of Registration in the principal register continues as "prima facie evidence of the validity of the registration, the registrant's ownership of the mark or trade-name, and of the registrant's exclusive right to use the same in connection with

the goods, business or services specified in the certificate." 16 Since the certificate still subsists, Developers Group may thus file a corresponding infringement suit and recover damages from any person who infringes upon the former's rights. 17 Furthermore, the issue raised before the BPTTT is quite different from that raised in the trial court. The issue raised before the BPTTT was whether the mark registered by Developers Group is subject to cancellation, as the Shangri-La Group claims prior ownership of the disputed mark. On the other hand, the issue raised before the trial court was whether the Shangri-La Group infringed upon the rights of Developers Group within the contemplation of Section 22 of Republic Act 166. The case of Conrad and Company, Inc. v. Court of Appeals18 is in point. We held: We cannot see any error in the above disquisition. It might be mentioned that while an application for the administrative cancellation of a registered trademark on any of the grounds enumerated in Section 17 of Republic Act No. 166, as amended, otherwise known as the Trade-Mark Law, falls under the exclusive cognizance of BPTTT (Sec. 19, Trade-Mark Law), an action, however, for infringement or unfair competition, as well as the remedy of injunction and relief for damages, is explicitly and unquestionably within the competence and jurisdiction of ordinary courts. xxx

xxx

xxx

Surely, an application with BPTTT for an administrative cancellation of a registered trade mark cannot per se have the effect of restraining or preventing the courts from the exercise of their lawfully conferred jurisdiction. A contrary rule would unduly expand the doctrine of primary jurisdiction which, simply expressed, would merely behoove regular courts, in controversies involving specialized disputes, to defer to the findings or resolutions of administrative tribunals on certain technical matters. This rule, evidently, did not escape the appellate court for it likewise decreed that for "good cause shown, the lower court, in its sound discretion, may suspend the action pending outcome of the cancellation proceedings" before the BPTTT. However, while the instant Petitions have been pending with this Court, the infringement court rendered a Decision, dated March 8, 1996, in Civil Case No. Q-918476,19 the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered in favor of plaintiff Developers Group of Companies, Inc. and against defendants Shangri-La International Hotel Management, Ltd., Shangri-La Properties, Inc., Makati Shangri-La Hotel and Resort, Inc., and Kuok Philippine Properties, Inc. – a) Upholding the validity of the registration of the service mark "Shangri-La" and "S-Logo" in the name of plaintiff;

b) Declaring defendants' use of said mark and logo as an infringement of plaintiff's right thereto; c) Ordering defendants, their representatives, agents, licensees, assignees and other persons acting under their authority and with their permission, to permanently cease and desist from using and/or continuing to use said mark and logo, or any copy, reproduction or colorable imitation thereof, in the promotion, advertisement, rendition of their hotel and allied projects and services or in any other manner whatsoever; d) Ordering defendants to remove said mark and logo from any premises, objects, materials and paraphernalia used by them and/or destroy any and all prints, signs, advertisements or other materials bearing said mark and logo in their possession and/or under their control; and e) Ordering defendants, jointly and severally, to indemnify plaintiff in the amounts of P2,000,000.00 as actual and compensatory damages, P500,000.00 as attorney's fees and expenses of litigation. Let a copy of this Decision be certified to the Director, Bureau of Patents, Trademarks and Technology Transfer, for his information and appropriate action in accordance with the provisions of Section 25, Republic Act No. 166.

shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Bureau, and shall be controlled thereby. (Sec. 25, R.A. No. 166a). (Emphasis provided) With the decision of the Regional Trial Court upholding the validity of the registration of the service mark "Shangri-La" and "S" logo in the name of Developers Group, the cancellation case filed with the Bureau hence becomes moot. To allow the Bureau to proceed with the cancellation case would lead to a possible result contradictory to that which the Regional Trial Court has rendered, albeit the same is still on appeal. Such a situation is certainly not in accord with the orderly administration of justice. In any event, the Court of Appeals has the competence and jurisdiction to resolve the merits of the said RTC decision. We are not unmindful of the fact that in G.R. No. 114802, the only issue submitted for resolution is the correctness of the Court of Appeals' decision sustaining the BPTTT's denial of the motion to suspend the proceedings before it. Yet, to provide a judicious resolution of the issues at hand, we find it apropos to order the suspension of the proceedings before the Bureau pending final determination of the infringement case, where the issue of the validity of the registration of the subject trademark and logo in the name of Developers Group was passed upon.

Costs against defendants.

WHEREFORE, in view of the foregoing, judgment is hereby rendered dismissing G.R. No. 111580 for being moot and academic, and ordering the Bureau of Legal Affairs, Intellectual Property Office, to suspend further proceedings in Inter Partes Case No. 3145, to await the final outcome of the appeal in Civil Case No. Q-918476.1âwphi1.nêt

SO ORDERED.20

SO ORDERED.

The said Decision is now on appeal with respondent Court of Appeals. 21 Following both law and the jurisprudence enunciated in Conrad and Company, Inc. v. Court of Appeals,22 the infringement case can and should proceed independently from the cancellation case with the Bureau so as to afford the owner of certificates of registration redress and injunctive writs. In the same light, so must the cancellation case with the BPTTT (now the Bureau of Legal Affairs, Intellectual Property Office) continue independently from the infringement case so as to determine whether a registered mark may ultimately be cancelled. However, the Regional Trial Court, in granting redress in favor of Developers Group, went further and upheld the validity and preference of the latter's registration over that of the Shangri-La Group. There can be no denying that the infringement court may validly pass upon the right of registration. Section 161 of Republic Act No. 8293 provides to wit – SEC. 161. Authority to Determine Right to Registration – In any action involving a registered mark the court may determine the right to registration, order the cancellation of the registration, in whole or in part, and otherwise rectify the register with respect to the registration of any party to the action in the exercise of this. Judgement and orders

G.R. No. L-23035 July 31, 1975 PHILIPPINE NUT INDUSTRY, INC., petitioner, vs. STANDARD BRANDS INCORPORATED and TIBURCIO S. EVALLE as Director of Patents, respondents. Perfecta E. De Vera for petitioner. Paredes, Poblador, Cruz and Nazareno for private respondent. Office of the Solicitor General Arturo A. Alafriz, Acting Assistant Solicitor General Isidro C. Borromeo and Solicitor Francisco J. Bautista for respondent Director.

MUNOZ PALMA, J.: Challenged in this petition for review is the decision of respondent Director of Patents which orders the cancellation of Certificate of Registration No. SR-416 issued in favor of herein petitioner Philippine Nut Industry, Inc. (hereinafter called Philippine Nut) for the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," upon complaint of Standard Brands Inc. (hereinafter to be called Standard Brands). The records of the case show the following incidents: Philippine Nut, a domestic corporation, obtained from the Patent Office on August 10, 1961, Certificate of Registration No. SR-416 covering the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," the label used on its product of salted peanuts. On May 14, 1962, Standard Brands a foreign corporation, 1 filed with the Director of Patents Inter Partes Case No. 268 asking for the cancellation of Philippine Nut's certificate of registration on the ground that "the registrant was not entitled to register the mark at the time of its application for registration thereof" for the reason that it (Standard Brands) is the owner of the trademark "PLANTERS COCKTAIL PEANUTS" covered by Certificate of Registration No. SR-172, issued by the Patent Office on July 28, 1958. Standard Brands alleged in its petition that Philippine Nut's trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS" closely resembles and is confusingly similar to its trademark "PLANTERS COCKTAIL PEANUTS" used also on salted peanuts, and that the registration of the former is likely to deceive the buying public and cause damage to it. On June 1, 1962, Philippine Nut filed its answer invoking the special defense that its registered label is not confusingly similar to that of Standard Brands as the latter alleges.

At the hearing of October 4, 1962, the parties submitted a partial stipulation of facts. On December 12, 1962, an amended partial stipulation of facts was submitted, the pertinent agreements contained in which are: (1) that Standard Brands is the present owner of the trademark "PLANTERS COCKTAIL PEANUTS" covered by Certificate of Registration No. SR-172 issued on July 28, 1958; (2) that Standard Brands trademark was first used in commerce in the Philippines in December, 1938 and (3) that Philippine Nut's trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS" was first used in the Philippines on December 20, 1958 and registered with the Patent Office on August 10, 1961. On December 10, 1963, after the presentation of oral and documentary evidence and the filing by the parties of their memoranda, respondent Director of Patents rendered Decision No. 281 giving due course to Standard Brand's petition and ordering the cancellation of Philippine Nut's Certificate of Registration No. SR-416. The Director of Patents found and held that in the labels using the two trademarks in question, the dominant part is the word "Planters", displayed "in a very similar manner" so much so that "as to appearance and general impression" there is "a very confusing similarity," and he concluded that Philippine Nut "was not entitled to register the mark at the time of its filing the application for registration" as Standard Brands will be damaged by the registration of the same. Its motion for reconsideration having been denied, Philippine Nut came up to this Court for a review of said decision. In seeking a reversal of the decision of respondent Director of Patents, petitioner brings forth eleven assigned errors all of which revolve around one main issue: is the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS" used by Philippine Nut on its label for salted peanuts confusingly similar to the trademark "PLANTERS COCKTAIL PEANUTS" used by Standard Brands on its product so as to constitute an infringement of the latter's trademark rights and justify its cancellation? 2 The applicable law to the case is found in Republic Act 166 otherwise known as the Trade-Mark Law from which We quote the following pertinent provisions: Chapter II-A. — Sec. 4.Registration of trade-marks, trade-names and service-marks on the principal register. — There is hereby established a register of trade-marks, trade-names and service-marks which shall be known as the principal register. The owner of a trade-mark, tradename or service-mark used to distinguish his goods, business or services from the goods, business or services of others shall have the right to register the same on the principal register, unless it: (d) Consists of or comprises a mark or trade-name which so resembles a mark or trade-nameregistered in the Philippines or a mark or trade-name previously used in the Philippines by anotherand not abandoned, as to be likely, when applied to or used in connection with the goods, business or services of the applicant, to cause confusion or mistake or to deceive purchasers; ... (emphasis Ours)

Sec. 17. Grounds for cancellation — Any person, who believes that he is or will be damaged by the registration of a mark or tradename, may, upon the payment of the prescribed fee, apply to cancel said registration upon any of the following grounds: (c) That the registration was obtained fraudulently or contrary to the provisions of section four, Chapter II hereof; .... Sec. 22.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, offering for sale, or advertising of any goods, business or services on or in 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 reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be 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. (emphasis supplied). In the cases involving infringement of trademark brought before the Court it has been consistently held that there is infringement of trademark when the use of the mark involved would be likely to cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin or source of the commodity; that whether or not a trademark causes confusion and is likely to deceive the public is a question of fact which is to be resolved by applying the "test of dominancy", meaning, if the competing trademark contains the main or essential or dominant features of another by reason of which confusion and deception are likely to result, then infringement takes pIace; that duplication or imitation is not necessary, a similarity in the dominant features of the trademarks would be sufficient. 3 1. The first argument advanced by petitioner which We believe goes to the core of the matter in litigation is that the Director of Patents erred in holding that the dominant portion of the label of Standard Brands in its cans of salted peanuts consists of the word PLANTERS which has been used in the label of Philippine Nut for its own product. According to petitioner, PLANTERS cannot be considered as the dominant feature of the trademarks in question because it is a mere descriptive term, an ordinary word which is defined in Webster International Dictionary as "one who or that which plants or sows, a farmer or an agriculturist." (pp. 10-11, petitioner's brief) We find the argument without merit. While it is true that PLANTERS is an ordinary word, nevertheless it is used in the labels not to describe the nature of the product, but to project the source or origin of the salted peanuts contained in the cans. The word PLANTERS printed across the upper portion of the label in bold letters easily attracts and catches the eye of the ordinary consumer and it is that word and none other that sticks in his mind when he thinks of salted peanuts.

In cases of this nature there can be no better evidence as to what is the dominant feature of a label and as to whether there is a confusing similarity in the contesting trademarks than the labels themselves. A visual and graphic presentation of the labels will constitute the best argument for one or the other, hence, we are reproducing hereunder a picture of the cans of salted peanuts of the parties to the case. The picture below is part of the documentary evidence appearing in the original records, and it clearly demonstrates the correctness of the finding of respondent Director that the word PLANTERS is the dominant, striking mark of the labels in question. It is true that there are other words used such as "Cordial" in petitioner's can and "Cocktail" in Standard Brands', which are also prominently displayed, but these words are mere adjectives describing the type of peanuts in the labeled containers and are not sufficient to warn the unwary customer that the two products come form distinct sources. As a whole it is the word PLANTERS which draws the attention of the buyer and leads him to conclude that the salted peanuts contained in the two cans originate from one and the same manufacturer. In fact, when a housewife sends her housemaid to the market to buy canned salted peanuts, she will describe the brand she wants by using the word PLANTERS and not "Cordial" nor "Cocktail". 2. The next argument of petitioner is that respondent Director should not have based his decision simply on the use of the term PLANTERS, and that what he should have resolved is whether there is a confusing similarity in the trademarks of the parties. It is quite obvious from the record, that respondent Director's decision is based not only on the fact that petitioner herein adopted the same dominant mark of Standard Brands, that is, the word PLANTERS, but that it also used in its label the same coloring scheme of gold, blue, and white, and basically the same lay-out of words such as "salted peanuts" and "vacuum packed" with similar type and size of lettering as appearing in Standard Brands' own trademark, all of which result in a confusing similarity between the two labels. 4 Thus, the decision states: "Furthermore, as to appearance and general impression of the two trademarks, I find a very confusing similarity." (Emphasis supplied) 5 Referring again to the picture We have reproduced, the striking similarity between the two labels is quite evident not only in the common use of PLANTERS but also in the other words employed. As a matter of fact, the capital letter "C" of petitioner's "Cordial" is alike to the capital "C" of Standard's "Cocktail", with both words ending with an "1". Admittedly, no producer or manufacturer may have a monopoly of any color scheme or form of words in a label. But when a competitor adopts a distinctive or dominant mark or feature of another's trademark and with it makes use of the same color ensemble, employs similar words written in a style, type and size of lettering almost identical with those found in the other trademark, the intent to pass to the public his product as that of the other is quite obvious. Hence, there is good reason for Standard Brands' to ask why did petitioner herein use the word PLANTERS, the same coloring scheme, even almost identical size and contour of the cans, the same lay-out

of words on its label when there is a myriad of other words, colors, phrases, symbols, and arrangements to choose from to distinguish its product from Standard Brands, if petitioner was not motivated to simulate the label of the latter for its own can of salted peanuts, and thereby deceive the public? A similar question was asked by this Court in Clarke vs. Manila Candy Co., 36 Phil. 100, when it resolved in favor of plaintiff a case of unfair competition based on an imitation of Clarke's packages and wrappers of its candies the main feature of which was one rooster. The Court queried thus: "... why, with all the birds in the air, and all the fishes in the sea, and all the animals on the face of the earth to choose from, the defendant company (Manila Candy Co.) selected two roosters as its trademark, although its directors and managers must have been well aware of the long-continued use of a rooster by the plaintiff with the sale and advertisement of its goods? ... A cat, a dog, a carabao, a shark or an eagle stamped upon the container in which candies are sold would serve as well as a rooster for purposes of identification as the product of defendant's factory. Why did defendant select two roosters as its trademark ?" (p.109, supra) Petitioner contends, however, that there are differences between the two trademarks, such as, the presence of the word "Philippine" above PLANTERS on its label, and other phrases, to wit: "For Quality and Price, Its Your Outstanding Buy", the address of the manufacturer in Quezon City, etc., plus a pictorial representation of peanuts overflowing from a tin can, while in the label of Standard Brands it is stated that the product is manufactured in San Francisco, California, and on top of the tin can is printed "Mr. Peanut" and the representation of a "humanized peanut". (pp. 30-33, petitioner's brief) We have taken note of those alleged differences but We find them insignificant in the sense that they are not sufficient to call the attention of the ordinary buyer that the labeled cans come from distinct and separate sources. The word "Philippine" printed in small type in petitioner's label may simply give to the purchaser the impression that that particular can of PLANTERS salted peanuts is locally produced or canned but that what he is buying is still PLANTERS canned salted peanuts and nothing else. As regards "Mr. Peanut" on Standard Brands' label, the same appears on the top cover and is not visible when the cans are displayed on the shelves, aside from the fact that the figure of "Mr. Peanut" is printed on the tin cover which is thrown away after opening the can, leaving no lasting impression on the consumer. It is also for this reason that We do not agree with petitioner that it is "Mr. Peanut and the Humanized Peanut" which is the trademark of Standard Brands salted peanuts, it being a mere descriptive pictorial representation of a peanut not prominently displayed on the very body of the label covering the can, unlike the term PLANTERS which dominates the label. It is correctly observed by respondent Director that the merchandize or goods being sold by the parties herein are very ordinary commodities purchased by the average person and many times by the ignorant and unlettered 6 and these are the persons who will not as a rule examine the printed small letterings on the container but will simply be guided by the presence of the striking mark PLANTERS on the label. Differences there will always be, but whatever differences exist, these pale into

insignificance in the face of an evident similarity in the dominant feature and overall appearance of the labels of the parties. It is not necessary, to constitute trademark "infringement", that every word of a trade-mark should be appropriated, but it is sufficient that enough be taken to deceive the public in the purchase of a protected article. (Bunte Bros. v. Standard Chocolates, D.C. Mass., 45 F. Supp. 478, 481) A trade-name in order to be an `infringement' upon another need not be exactly like it in form and sound, but it is enough if the one so resembles another as to deceive or mislead persons of ordinary caution into the belief that they are dealing with the one concern when in fact they are dealing with the other. (Foss v. Culbertson, 136 P. 2d 711, 718, 17 Wash. 2d 610) Where a trade-mark contains a dominating or distinguishing word, and purchasing public has come to know and designate the article by such dominating word, the use of such word by another in marking similar goods may constitute Infringement though the marks aside from such dominating word may be dissimilar. (Queen Mfg. Co. v. lsaac Ginsberg & Bros., C.C.A. Mon., 25 F. 2d 284, 287) (d) "Infringement" of trade-mark does not depend on the use of identical words, nor on the question whether they are so similar that a person looking at one would be deceived into the belief that it was the other; it being sufficient if one mark is so like another in form, spelling, or sound that one with not a very definite or clear recollection as to the real mark is likely to be confused or misled. (Northam Warren Corporation v. Universal Cosmetic Co., C. C. A; III., 18 F. 2d 774, 775) 3. What is next submitted by petitioner is that it was error for respondent Director to have enjoined it from using PLANTERS in the absence of evidence showing that the term has acquired secondary meaning. Petitioner, invoking American jurisprudence, asserts that the first user of a tradename composed of common words is given no special preference unless it is shown that such words have acquired secondary meaning, and this, respondent Standard Brands failed to do when no evidence was presented to establish that fact. (pp. 14-16, petitioner's brief) The doctrine of secondary meaning is found in Sec. 4 (f), Chapter II-A of the TradeMark Law, viz: Except as expressly excluded in paragraphs (a), (b), (c) and (d) of this section, nothing herein shall prevent the registration of a mark or trade-name used by the applicant which has become distinctive of the applicant's goods, business or services. The Director may accept as prima facie evidence that the mark or trade-name has

become distinctive, as applied to or used in connection with the applicant's goods, business or services, proof of substantially exclusive and continuous use thereof as a mark or trade-name by the applicant in connection with the sale of goods, business or services for the five years next preceding the date of the filing of the application for its registration. (As amended by Sec. 3, Rep. Act No. 638.) This Court held that the doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product. 7 By way of illustration, is the word "Selecta" which according to this Court is a common ordinary term in the sense that it may be used or employed by any one in promoting his business or enterprise, but which once adopted or coined in connection with one's business as an emblem, sign or device to characterize its products, or as a badge of authenticity, may acquire a secondary meaning as to be exclusively associated with its products and business, so that its use by another may lead to confusion in trade and cause damage to its business. 8 The applicability of the doctrine of secondary meaning to the situation now before Us is appropriate because there is oral and documentary evidence showing that the word PLANTERS has been used by and closely associated with Standard Brands for its canned salted peanuts since 1938 in this country. Not only is that fact admitted by petitioner in the amended stipulation of facts (see p. 2 of this Decision), but the matter has been established by testimonial (tsn October 4, 1962, pp. 2-8) and documentary evidence consisting of invoices covering the sale of "PLANTERS cocktail peanuts". (Exhibits C to C-4; D to D-10; E to E-10; F to F-2) In other words, there is evidence to show that the term PLANTERS has become a distinctive mark or symbol insofar as salted peanuts are concerned, and by priority of use dating as far back as 1938, respondent Standard Brands has acquired a preferential right to its adoption as its trademark warranting protection against its usurpation by another. Ubi jus ibi remedium. Where there is a right there is a remedy. Standard Brands has shown the existence of a property right(Arce Sons & Co. vs. Selecta Biscuit Co., Inc., supra, pp. 262-263) and respondent Director, has afforded the remedy. Still on this point, petitioner contends that Standard Brands' use of the trademark PLANTERS was interrupted during the Japanese occupation and in fact was discontinued when the importation of peanuts was prohibited by Central Bank regulations effective July 1, 1953, hence it cannot be presumed that it has acquired a secondary meaning. We hold otherwise. Respondent Director correctly applied the rule that non-use of a trademark on an article of merchandize due to legal restrictions or circumstances beyond one's control is not to be considered as an abandonment. In the case of Andres Romero vs. Maiden Form Brassiere Co., Inc., L-18289, March 31, 1964, 10 SCRA 556, the same question was raised by petitioner Romero when he filed with the Bureau of Patents a petition to cancel the registration of the trademark

"Adagio" for brassieres manufactured by Maiden Form Brassiere Co., Inc. His petition having been dismissed by the Director of Patents, Romero appealed to this Court and one of the issues posed by him was that when the Government imposed restrictions on importations of brassieres bearing that particular trademark, there was abandonment of the same by respondent company which entitled petitioner to adopt it for his own use and which in fact he had been using for a number of years. That argument was met by the Court in the words of Justice Jesus Barrera thus: ... The evidence on record shows, on the other hand, that the trademark "Adagio" was first used exlusively in the Philippines by appellee in the year 1932. There being no evidence of use of the mark by others before 1932, or that appellee abandoned use thereof, the registration of the mark was made in accordance with the Trademark Law. Granting that appellant used the mark when appellee stopped using it during the period of time that the Government imposed restrictions on importation of respondent's brassiere being the trademark, such temporary non-use did not affect the rights of appellee because it was occasioned by government restrictions and was not permanent, intentional, and voluntary. To work an abandonment, the disuse must be permanent and not ephemeral; it must, be intentional and voluntary, and not involuntary or even compulsory. There must be a thoroughgoing discontinuance of any trade-mark use of the mark in question (Callman, Unfair Competition and Trademark, 2nd Ed., p. 1341).1äwphï1.ñët The use of the trademark by other manufacturers did not indicate an intention on the part of appellee to abandon it. The instances of the use by others of the term Budweiser, cited by the defendant, fail, even when liberally construed, to indicate an intention upon the part of the complainant to abandon its rights to that name. "To establish the defense of abandonment, it is necessary to show not only acts indicating a practical abandonment, but an actual intention to abandon." Sanlehner v. Eisener & Mendelson Co., 179 U.S. 19, 21 S. Ct. 7 (45 L. Ed. 6.0).(Anheuser-Busch, Inc, v. Budweiser Malt Products Corp., 287 F. 245.) xxx xxx xxx Non-use because of legal restrictions is not evidence of an intent to abandon. Non-use of their ancient trade-mark and the adoption of new marks by the Carthusian Monks after they had been compelled to leave France was consistent with an intention to retain their right to use their old mark. Abandonment will not be inferred from a

disuse over a period of years occasioned by statutory restrictions on the name of liquor. (Nims, Unfair Competition and Trade-Mark, p. 1269.) (pp. 562-564,supra) (emphasis Ours) Applying the words of Justice Roman Ozaeta in the "Ang Tibay" case (Ang vs. Toribio Teodoro, p. 56, supra) to the case now before Us, petitioner herein must not be allowed to get a free ride on the reputation and selling power of Standard Brands PLANTERS salted peanuts, for a self-respecting person, or a reputable business concern as is the case here, does not remain in the shelter of another's popularity and goodwill but builds one of his own. 4. Findings of fact by the Director of Patents are conclusive and binding on this Court provided they are supported by substantial evidence. 9 The testimonial and documentary evidence in addition to the stipulation of facts submitted by the parties fully support the findings of respondent Director that(1) there is a confusing similarity between the labels or trademarks of Philippine Nut and Standard Brands used in their respective canned salted peanuts; (2) respondent Standard Brands has priority of adoption and use of the label with PLANTERS as the dominant feature and the same has acquired secondary meaning in relation to salted peanuts; and (3) there has been no abandonment or non-use of said trademark by Standard Brands which would justify its adoption by petitioner or any other competitor for the sale of salted peanuts in the market. PREMISES CONSIDERED, We AFFIRM the decision of respondent Director of Patents with costs against petitioner. So Ordered. Philippine Nut Industry Inc., a domestic corporation, obtained from the Patent Office on August 10, 1961, a certificate covering the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS," the label used on its product of salted peanuts. On May 14, 1962, Standard Brands, a foreign corporation, filed a case with the Director of Patent, asking for the cancellation of Philippine Nut's certificate of registration on the ground that "the registrant was not entitled to register the mark at the time of its application for registration thereof" for the reason that it (Standard Brands) is the owner of the trademark "PLANTERS COCKTAIL PEANUTS" covered by Certificate of Registration No. SR-172, issued by the Patent Office on July 28, 1958. Thereafter, the Philippine Nut filed its answer invoking the special defense that its registered label is not confusingly similar to that of Standard Brands as the latter alleges. Respondent Director of Patents gave due course to Standard Brand's petition, ordering the cancellation of Philippine Nut's Certificate of Registration. Upon denial of the motion for reconsideration, the Philippine Nut petitioned for a review, seeking the reversal of the Director of Patents’ decision.

Issue: Whether or not the trademark "PHILIPPINE PLANTERS CORDIAL PEANUTS" used by Philippine Nut on its label for salted peanuts with the same coloring scheme and the same lay-out of words, confusingly similar to the trademark "PLANTERS COCKTAIL PEANUTS" used by Standard Brands on its product. Ruling: Yes. As to appearance and general impression of the two trademarks, the Supreme Court said it found a very confusing similarity. The word PLANTERS printed across the upper portion of the label in bold letters easily attracts and catches the eye of the ordinary consumer and it is that word and none other that sticks in his mind when he thinks of salted peanuts. The Supreme Court also held that although it is true that no producer or manufacturer may have a monopoly of any color scheme or form of words in a label, but when a competitor adopts a distinctive or dominant mark or feature of another's trademark and with it makes use of the same color ensemble, employs similar words written in a style, type and size of lettering almost identical with those found in the other trademark, the intent to pass to the public his product as that of the other is quite obvious. It deceives the public. Hence, the decision of respondent Director of Patents was affirmed.

G.R. No. L-19531

August 10, 1967

THE CLOROX COMPANY, petitioner, vs. THE DIRECTOR OF PATENTS and GO SIU GIAN, respondents. Luchauco, Picazo and Agcaoli for petitioner. Gonzalo A. Tejada for respondent Go Siu Gian. Office of the Solicitor General for respondent Director of Patents. ANGELES, J.: We have before us petition to review the order of the Director of Patents in "inter Partes Case No. 204," dated January 6, 1961, dismissing the opposition of the Clorox Company to the registration of the trade-mark "OLDROX" in the name of Go Siu Gian, and the resolution of said Official, dated February 12, 1962, denying the Clorox Company's motion and petition for relief from said order.1äwphï1.ñët The facts of the case, either appearing in the record or admitted by the parties in their pleadings, are as follows: On April 7, 1959, respondent Go Siu Gian filed with the Patent Office an application for registration of the trademark "OLDROX," with an accompanying statement that he is a citizen of China, residing and doing business in the Philippines at 838 Folgueras St., Manila; that he has adopted the trademark "OLDROX" for his goods (whitening agent for bleaching) in trade and commerce in the country; and that said trademark, shown on printed labels affixed to the goods, or to the containers thereof, has been used by him since February 1, 1959. The application was allowed and published in the issue of the Official Gazette dated April 25, 1960, which was released for circulation on August 22, 1960. On September 21 of the same year, or within 30 days from the date of its publication in the Official Gazette, an unverified opposition to the application was filed by the law firm Lichauco, Picazo and Agcaoili in behalf of the Clorox Company, herein petitioner. On January 6, 1961, respondent Director of Patents issued the order appealed from, dismissing the petitioner's opposition to the application upon the ground, which is stated in said order, that the Clorox Company failed to filed the required verified notice of opposition within the period allowed by law. Upon notice of the said order, petitioner's counsel filed a motion with the Patent Office, dated January 10, 1961, advising that it has filed the verified notice of opposition on time, i.e., on November 16, 1960; although it also admitted that the covering letter of said verified opposition was given another case number (Inter Partes Case No. 200, entitled "The Shell Company of the Philippines versus Faustino Co") which is also handled by the same counsel in the Patent Office. Petitioner requested in that motion that the verified opposition be detached from the record of Inter Partes Case No. 200 and to transfer the same in the corresponding file of this case. The motion was opposed by herein respondent Go Siu Gian.

Before the motion could be acted upon by the Director of Patents, petitioner filed on January 26, 1961, a petition for relief from the order dismissing its opposition, alleging circumstances constituting mistake or excusable negligence of its counsel and his employee which led to the misfiling of its verified opposition, and praying that said order of January 6, 1961, be set aside. After due consideration of the arguments of both parties relative to the aforesaid motion and petition for relief from the order of January 6, 1961, the Director of Patents issued the resolution of February 12, 1962, also appealed from, denying both the motion and the petition for relief, and ordering the issuance of the Certificate of Registration of the trademark "OLDROX" in the name of Go Siu Gian. The Clorox Company has come to Us on Appeal. In a nutshell, the various errors pointed out in the petitioner's brief which were allegedly committed by the respondent Director of Patents in issuing the order and resolution appealed from, really boil down to two main propositions, namely: (1) that the Director of Patents erred in dismissing its opposition to the registration of the trademark in question, on the ground of failure to file the required "verified" opposition on time; and (2) that said Official erred in denying altogether its motion and petition for relief from said order. Under the first proposition, the petitioner argues that it was error for the respondent official to have dismissed the opposition, it appearing in an indubitable manner that a verified opposition was timely filed. The Director of Patents, on the other hand, maintains that the verified opposition cannot be considered as having been filed on time, for the reason that it was misfiled in the record of another opposition case through the negligence of its own counsel. Section 8 of Republic Act No. 166 requires that an opposition to an application for registration of a trademark should be filed within 30 days from the publication of the application in the Official Gazette. This requirement is relaxed under Rule 187 (c) of the Revised Rules of Practice in Trademark Cases which provide as follows: Rule 187 (c). Notice filed by attorney. — An unverified notice of opposition may be filed by a duly authorized attorney, but such opposition will be null and void unless verified by the opposer in person within sixty days after such filing. . . . There is no question that petitioner's counsel filed an unverified notice of opposition to the application for registration of the trademark "OLDROX" within 30 days from the date of its publication in the Official Gazette. There is no disagreement also that the record of the case shows that an unverified opposition was filed, and it was for this reason that the order of January 8, 1961, was issued, because the law requires that for an opposition to be valid, it must be verified. It is not disputed, however, that immediately after it received the notice of dismissal of its opposition, petitioner, in due time, filed a motion dated January 10, 1961, advising the Director of Patents that its verified opposition was filed on time, although it admitted its error in submitting it under a covering letter designating another opposition case. Under the circumstances, it is our considered opinion that the verified opposition mentioned was filed on time, although it was submitted under an erroneous covering letter. That fact

alone is no argument to the proposition that a pleading "misfiled" is a pleading "not filed." A covering letter is not part of the pleading. What is important is the fact that the pleading reached the official designated by law to receive it within the prescribed time, regardless of the mistake in the indorsement or covering letter which is not a necessary element of filing. It is the duty of the clerk of court to receive and file the necessary papers of a case in their corresponding files. It is gross negligence on the part of a clerk of court to receive and file pleadings in the record of a case by relying upon a letter of submittal or covering letter without bothering to examine whether or not the pleading or document submitted corresponds to the enclosure mentioned in the letter. And when, as in this case, the pleading is misfiled in the record of another case through the fault of its clerk, it can not be said that the papers were not filed. It is admitted in this case that the verified opposition of herein petitioner was lodged with the proper official authorized to receive. Under the circumstances, we hold, that there was substantial compliance with the requirement of the law. As a second proposition, petitioner contends that the Director of Patents erred in denying its motion and petition for relief from the order of January 6, 1961, dismissing its opposition to the registration of the trademark in question. It holds the view that said Official should have set aside the order and given due course to its opposition. The respondents, on the other hand, argue that the petition for relief filed by petitioner before the order dismissing the opposition became final was premature and may not be legally considered for purposes of setting aside said order. This is being too technical about it. The rule is always in favor of liberality in construction so that the real matter in dispute may be submitted to the judgment of the court. Imperfections of form and technicalities of procedure should be disregarded unless substantial rights would otherwise be prejudiced (Gaspar vs. Dorado, et al., G.R. No. L-17884, November 29, 1965). It should be noted that the grounds of fraud, accident, mistake or excusable negligence for new trial are substantially similar to the grounds of a petition for relief under the Rules; the only difference being that a motion for new trial or for reconsideration is filed before the order or judgment becomes final, while a petition for relief should be filed after the finality of the judgment or order, but within the periods prescribed in Section 3 of Rule 38. Had herein respondents so minded, the petition for relief filed by the petitioner in this case, having been filed before the finality of the order dismissing its opposition, could have been treated as a motion. for reconsideration of the order of January 6, 1961, and having been previously apprised of the fact that the verified opposition in this case was misfiled in the record of another case, should have set aside said order. The rule is well settled that courts may vacate judgments and grant new trials or enter new judgments on the grounds of error in fact or in law. They have no power, of course, to vacate judgments after they have become final, in the sense that the party in whose favor they are rendered is entitled as of right, to have execution thereon, but prior thereto, the courts have plenary control over the proceedings including the judgment, and in the exercise of a sound judicial discretion, may take such proper action in this regard as truth and justice may require (Arnedo vs. Llorente and Liongson, 18 Phil. 257). The order of herein respondent dismissing the opposition of petitioner to the registration of the trademark in question may amount to considerable injustice to the opposer Clorox Company, the order having been entered not upon the merits of the controversy; and the possibility of such serious consequences necessitates a careful examination of the grounds upon which it requests that the order be set aside. It must be remembered that the only discretion conferred upon officers is a legal discretion, and when anything is left

to any officer to be done according to his discretion, the law intends it to be done with a sound discretion and according to law (Coombs vs. Santos, 24 Phil. 446). And when, as in this case, the allegation of the pleading clearly show circumstances constituting mistake and excusable negligence which are grounds for a motion for reconsideration of the order in question, a dismissal of the motion and a denial of the relief sought upon the flimsy excuse that the same was filed as a petition for relief, will amount to an abuse of that discretion. Neither may we consider the argument of herein respondent that the petitioner is not totally deprived of its right to question the registration of the trademark in question because it may still pursue a cancellation proceeding under Sections 17 to 19 of Republic Act No. 166, and Rules 191 to 197 of the Rules of Practice in Trademark Cases. The opposition to a registration and the petition for cancellation are alternative proceedings which a party may avail of according to his purposes, needs, and predicaments (Anchor Trading Company vs. Director of Patents, G.R. No. L-8004, May 30, 1956), and herein petitioner has the right to choose which remedy it deems best for the protection of its rights. Wherefore and considering all the foregoing, the order and resolution of the Director of Patents appealed from are hereby set aside, and the case remanded to the Patent Office for further proceedings. Costs against the private respondent.

G.R. No. 78298 January 30, 1989 WOLVERINE WORLDWIDE, INC., petitioner, vs. HONORABLE COURT OF APPEALS and LOLITO P. CRUZ, respondents. K. V. Faylona & Associates for petitioner. Florencio Z. Sioson for private respondent Lolito P. Cruz.

1. The petitions seeking cancellation of Registration Nos. SR-1099 and SR-1526, respectively, are both denied and accordingly DISMISSED; 2. Respondent-Registrant/Junior Party-Applicant, Roman Angeles, is hereby adjudged as the prior user and adopter of the trademark HUSH PUPPIES & DEVICE, under Appl. Serial No. 17174, and therefore, the same given due course; and 3. Registration No. 14969 of Dexter Sales Company, assignor to Wolverine Worldwide, Inc., covering the trademark HUSH PUPPIES & Representation of a Dogie Head, is hereby CANCELLED. 2

SARMIENTO, J.: The subject of this petition for review is the resolution of the Court of Appeals 1 granting the private respondents's motion for reconsideration and reviving the decision of the Director of Patents which ordered the dismissal, on the ground of res judicata, of Inter Partes Case No. 807 instituted by the petitioner herein. On February 8, 1984, the petitioner, a foreign corporation organized and existing under the laws of the United States, brought a petition before the Philippine Patent Office, docketed as Inter Partes Case No. 1807, for the cancellation of Certificate of Registration No. 24986-B of the trademark HUSH PUPPIES and DOG DEVICE issued to the private respondent, a Filipino citizen. In support of its petition for cancellation, the petitioner alleged, inter alia, that it is the registrant of the internationally known trademark HUSH PUPPIES and the DEVICE of a Dog in the United States and in other countries which are members of the Paris Convention for the Protection of Industrial Property; that the goods sold by the private respondent, on the one hand, and by the petitioner, on the other hand, belong to the same class such that the private respondent's use of the same trademark in the Philippines (which is a member of said Paris Convention) in connection with the goods he sells constitutes an act of unfair competition, as denied in the Paris Convention. Subsequently, the private respondent moved to dismiss the petition on the ground of res judicata, averring that in 1973, or more than ten years before this petition (Inter Partes Case No. 1807) was filed, the same petitioner filed two petitions for cancellation (Inter Partes Cases Nos. 700 and 701) and was a party to an interference proceeding (Inter Partes Case No. 709), all of which involved the trademark HUSH PUPPIES and DEVICE, before the Philippine Patent Office. The Director of Patents had ruled in all three inter parties cases in favor of Ramon Angeles, the private respondent's predecessor-in-interest, to wit: WHEREFORE, for all the foregoing considerations,

On June 29, 1979, the Court of Appeals affirmed tile above decision, finding the same to be in accordance with law and supported by substantial evidence. 3 In the present case, after both parties had submitted their respective memoranda, the Director of Patents rendered the questioned decision (in Inter Partes Case No. 1807), the dispositive portion of which states: WHEREFORE, in view of the foregoing considerations this Office is constrained to hold that Respondent's Motion to Dismiss be, as it is hereby, GRANTED and that the subject Petition for Cancellation be, as it is hereby DISMISSED. Accordingly, Certificate of Registration No. 24986-B issued on May 3, 1983 to the herein Respondent-Registrant, Lolito P. Cruz, for the trademark "HUSH PUPPIES" for use on shoes is, as it is hereby, declared valid and subsisting for the duration of its term unless owner cancelled in accordance with law. 4 On appeal, the Court of Appeals at first set aside the Director's decision; 5 however, upon reconsideration the latter was revived. 6 The principal legal question raised in this petition for review is whether or not the present petition for cancellation (Inter Partes Case No. 1807) is barred by res judicata in the light of the final and executory decision in Inter Partes Cases Nos. 700 701, and 709. We rule in the affirmative. The Court has repeatedly held that for a judgment to be a bar to a subsequent case, the following requisites must concur: (1) it must be a final judgment; (2) the court which rendered it had jurisdiction over the subject matter and the parties; (3) it must be a judgment on the merits; and (4) there must be Identity between the two cases, as to parties, — subject matter, and cause of action. 7

Contrary to the petitioner's assertion, the judgment in Inter Partes Cases Nos. 700, 701, and 709 had long since become final and executory. That Sec. 17 of Republic Act 166, also known as the Trademark Law, allows the cancellation of a registered trademark is not a valid premise for the petitioner's proposition that a decision granting registration of a trademark cannot be imbued with the character of absolute finality as is required in res judicata. A judgment or order is final, as to give it the authority of res judicata, if it can no longer be modified by the court issuing it or by any other court. 8 In the case at bar, the decision of the Court of Appeals affirming that of the Director of Patents, in the cancellation cases filed in 1973, was never appealed to us. Consequently, when the period to appeal from the Court of Appeals to this Court lapsed, with no appeal having been perfected, the foregoing judgment denying cancellation of registration in the name of private respondent's predecessorin-interest but ordering cancellation of registration in the name of the petitioner's predecessor-in-interest, became the settled law in the case. In the words of the Court of Appeals: The subsequent failure of appellant-oppositor to elevate the decision of the Court of Appeals, which affirmed the ruling of the Director of Patents, to the Supreme Court, sounded the death knell of appellant-oppositor's instant case. Having become final and executory, the decision in Case No. 967 now bars the prosecution of the present action under the principle of res judicata. 9 It must be stressed anew that, generally, the fundamental principle of res judicata applies to all cases and proceedings in whatever form they may be. 10 We now expressly affirm that this principle applies, in the appropriate cases, to proceedings for cancellation of trademarks before the Philippine Patent Office (now Bureau of Patents, Trademarks and Technology Transfer). In Ipekjan Merchandising Co., Inc. vs Court of Tax Appeals, we said: To say that the doctrine applies exclusively to decisions rendered by what are usually understood as courts would be to unreasonably circumscribe the scope thereof. The more equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have been conferred. 11 Undoubtedly, final decisions, orders, and resolutions, of the Director of Patents are clothed with a judicial character as they are, in fact, reviewable by the Court of Appeals and by us. The subject judgment is undeniably on the merits of the case, rendered after both parties and actually submitted their evidence. Between the earlier petitions and the present one there is substantial identity of parties, subject matter, and cause of action. The petitioner in all of these cases is Wolverine Worldwide, Inc. The respondentregistrant in this case is the assignee of Randelson Agro-Industrial Development, Inc.

(formerly known as Randelson Shoes, Inc.) which in turn, acquired its right from Ramon Angeles, the original respondents-registrant. As regards the subject matter, all of these cases refer to the cancellation of registration of the trademark HUSH PUPPIES and DEVICE of a Dog. Finally, there is identity of cause of action, which is the alleged wrongful or erroneous registration of the trademark. It is argued, however, that res judicata does not apply in this particular instance because when the May 9, 1977 decision was handed down by the Director of Patents, Executive Order No. 913 dated October 7, 1983 and the resulting memorandum of Minister Roberto Ongpin dated October 25, 1983 had not yet been issued. (The validity of this memorandum was later upheld by this Court in La Chemise Lacoste, S.A. vs. Fernandez and Sujanani vs. Ongpin). 12 The petitioner underscores the following specific directive contained in the abovementioned memorandum of Minister Ongpin for the Director of Patents: 5. All pending applications for Philippine registration of signature and other world famous trademarks filed by applicants other than their original owners or users shall be rejected forthwith. Where such applicants have already obtained registration contrary to the abovementioned PARIS CONVENTION and/or Philippine Law, they shall be directed to surrender their Certificates of Registration to the Philippine Patent Office for immediate cancellation proceedings. 13 It is thus contended that despite the previous grant of registration to the private respondent, the present petition for cancellation could still be brought, and the same should be granted by the Director of Patents, pursuant to the abovequoted clause. Stated otherwise, the petitioner suggests that the petition is not barred by res judicatabecause while the former petitions were filed under Republic Act 166, the present one was brought pursuant to the cited memorandum which expressly sanctions the cancellation of registration of a trademark granted even prior to the same memorandum. In the first place, the subject memorandum never amended, nor was it meant to amend, the Trademark Law. It did not indicate a new policy with respect to the registration in the Philippines of world-famous trademarks. The protection against unfair competition, and other benefits, accorded to owners of internationally known marks, as mandated by the Paris Convention, is already guaranteed under the Trademark Law. 14 Thus, the subject memorandum, as well as Executive Order No. 913, merely reiterated the policy already existing at the time of its issuance. As accurately enunciated by the Court of Appeals: Such being the case, appellant-oppositor could have properly ventilated the issue of whether or not it fell within the protective ambit of the Paris Convention in the previous proceedings which culminated in the registration of the Hush Puppies trademark in appellee-movant's name, i.e., in Case No. 967 before the Philippine

Patent Office. The Director of Patents in that case, after hearing both parties and thereafter, deciding that appellee-movant was entitled to the registration of the trademark in its name, must have concluded that appellant-oppositor had not established the fact that it was entitled to the application of the favorable provision; of the Paris Convention. 15 Furthermore, we agree with the conclusion of the Court of Appeals that the memorandum discussed here is subject to the doctrine of res judicata. The same memorandum has, in the words of the Court of Appeals: ... no room for application where the oppositor previously availed of the same remedy to contest and cancel the registration of subject trademark but did not prevail, against the same registrant regarding the same subject matter (the trademark in question) and for the same cause of action. This is the more so when, as in this present controversy, the certificate of registration, cancellation of which is sought anew, was issued by the Patent office after due hearing in the prior appropriate inter partes case, pursuant to a decision of the Director of Patents which was affirmed on appeal by the Court of Appeals, and has become final and executory. 16 In the same light, the repeated filing of petitions for cancellation founded on substantially the same ground as provided in Sec. 17 of the Trademark Law, we rule, is not permissible. For to allow without any limitation whatsoever such a practice would be clearly violative of the time-honored doctrine of res judicata. The present petition for cancellation raises basically the same issue of ownership of the trademark HUSH PUPPIES, which issue was already discussed and settled in Inter Partes Cases Nos. 700, 701, and 709. As pointed out by the private respondent, the petitioner itself expressly recognized the issue of ownership when in the brief it filed in the Court of Appeals it included the following in the assignment of errors: That the Philippine Patent Office erred in holding that respondent-appellee has established prior use and adoption of the trademark HUSH PUPPIES and is the true and lawful owner thereof, instead of petitioner-appellant herein. (Emphasis supplied). 17 The aforesaid cases, involving as they were the registration of a trademark, necessarily litigated the issue of ownership of such trademark because ownership is, indeed, the basis of registration of a trademark. 18 Thus, Section 4 of R.A. 166 provides: ". . . The owner of a trademark, trade name or service-mark used to distinguish his goods, business or services from the goods, business or services of others shall have the right to register the same on the principal register. . . " Res judicata now bars the petitioner from reopening, by way of another petition for cancellation (the present Inter Partes Case No. 1807), the issue of ownership of the trademark HUSH PUPPIES. Otherwise, there will never be an end to litigation. WHEREFORE, the petition for review is DENIED.

G.R. No. 132993

June 29, 2005

LEVI STRAUSS (PHILS.), INC., petitioner, vs. VOGUE TRADERS CLOTHING COMPANY, respondent. DECISION AZCUNA, J.: This is a petition for review on certiorari seeking to annul the decision1 of the Court of Appeals, dated August 13, 1997, which annulled and set aside the orders, 2 dated December 10, 1996 and April 11, 1997, issued by the Regional Trial Court of Manila, Branch 1 and which directed the trial court to desist from proceeding with the said case until the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) has finally resolved Inter PartesCases Nos. 4216 and 4217, and the resolution of the Court of Appeals, dated March 5, 1998, denying petitioner’s motion for reconsideration. The factual antecedents are as follows: In 1972, per "Trademark, Technical Data, and Technical Assistance Agreement,"3 Levi Strauss & Co., the principal based in Delaware, United States of America, granted petitioner Levi Strauss (Phils.) a non-exclusive license to use LEVI’S trademark, design, and name in the manufacturing, marketing, distribution, and sale of its clothing and other goods.4 The licensing agreement was renewed several times, the recent one being under Certificate of Registration No. 1379A.5 Levi Strauss & Co. obtained certificates of registration from the BPTTT for the following trademarks: "LEVI’S"6; "501"7; "Two Horse Design"8; "Two Horse Label"9; "Two Horse Patch"10; "Two Horse Label with Patterned Arcuate Design"11; "Arcuate Design"12; and the composite trademarks,13 namely, "Arcuate," "Tab," and "Two Horse Patch." Petitioner discovered the existence of some trademark registrations belonging to respondent which, in its view, were confusingly similar to its trademarks. Thus, it instituted two cases before the BPTTT for the cancellation of respondent’s trademark registrations, to wit: Inter Partes Case No. 4216, a petition for cancellation of Certificate of Registration No. 53918 (for "LIVE’S") and Inter Partes Case No. 4217, a petition for cancellation of Certificate of Registration No. 8868 (for "LIVE’S" Label Mark). Petitioner then applied for the issuance of a search warrant on the premises of respondent Vogue Traders Clothing Company, owned by one Tony Lim, with the Regional Trial Court of Manila, Branch 3. On December 12, 1995, said trial court issued Search Warrant No. 95-75714 and Search Warrant No. 95-75815 based on its finding of probable cause that the respondent had violated Article 189 of the Revised Penal Code16 in manufacturing, selling, and incorporating designs or marks in its jeans which were confusingly similar to petitioner’s "LEVI’s jeans." These search warrants commanded the seizure of certain goods bearing copies or imitations of the

trademarks which belonged to petitioner.17 On December 13, 1995, the search warrants were enforced and several goods belonging to respondent were seized.18 Meanwhile, it appears that criminal charges were filed against Tony Lim of respondent company in the Department of Justice,19 but the same were eventually dismissed and the search warrants were quashed. Consequently, on February 1, 1996, respondent filed a complaint20 for damages in the Regional Trial Court of Manila, Branch 50, against petitioner. The complaint alleged that since January 1, 1988, respondent, through Antonio Sevilla, with business address at 1082 Carmen Planas Street, Tondo, Manila, had been a lawful assignee and authorized user of: (a) the trademark "LIVE’S" under Certificate of Registration No. 53918 issued by the BPTTT, (b) the trademark "LIVE’S LABEL MARK" under Certificate of Registration No. SR 8868 issued by the BPTTT, and (c) the copyright registrations of "LIVE’S ORIGINAL JEANS," its pocket design, and hand tag; that the goods, articles, and effects seized from respondent’s establishment were manufactured and used in its legitimate business of manufacturing and selling of the duly registered trademark "LIVE’S" and "LIVE’S ORIGINAL JEANS;" and that the trademarks of respondent did not have any deceptive resemblance with the trademarks of petitioner. Respondent sought to recover the seized assorted sewing materials, equipment, and finished products or the value thereof, in case the same had been destroyed or impaired as a result of the seizure. Respondent also prayed that, after due trial, judgment be rendered ordering the petitioner to pay compensatory damages ofP320,000 with an additional amount of damages of P11,000 per day until the seized properties are restored;P2,000,000 as exemplary damages; P100,000 for attorney’s fees with an additional amount of P100,000 in the event of an appeal plus P1,500 per court appearance and the costs of the suit. In its amended answer with counterclaim,21 petitioner countered that respondent’s LIVE’S brand infringed upon its licensed brand name LEVI’S. It sought to cancel respondent’s Copyright Registration No. I-3838 and enjoin the respondent from further manufacturing, selling, offering for sale, and advertising the denim jeans or slacks by using a design substantially, if not exactly similar to, or a colorable imitation of the trademarks22 of petitioner. Upon manifestation/motion23 by petitioner, the RTC of Manila, Branch 50 issued an order dated May 9, 1996,24forwarding the case to the Executive Judge (RTC of Manila, Branch 23) for re-raffle among the courts designated as Special Courts to try and decide cases involving violations of Intellectual Property Rights pursuant to Administrative Order No. 113-95, dated October 2, 1995. On May 17, 1996, Branch 23 issued an order25 directing that the case be forwarded to Branch 1 (a designated Special Court per said administrative order) for further proceedings. On the scheduled hearing on December 4, 1996 in the RTC of Manila, Branch 1, respondent (as therein plaintiff) failed to appear. Upon motion of petitioner, the trial court declared respondent to have waived its right to present evidence to controvert petitioner’s application for a writ of preliminary injunction. 26 In an order dated December 10, 1996, the trial court found that the respondent intended to appropriate, copy, and slavishly imitate the genuine appearance of authentic LEVI’s jeans and pass off its LIVE’s jeans as genuine LEVI’s jeans. Thus,

In opposing defendant’s application for preliminary in injunction, plaintiff alleges that it has obtained Certificates of Registration for the trademarks "LIVE[‘]S," "LIVE[‘]S LABEL MARK," ["]LIVE[‘]S ORIGINAL JEANS["] as well as the patch pocket design and hand tag. It did not, however, present any evidence to support the same. In any event, plaintiff’s backpocket design is not copyrightable, as it is neither an original work nor a novel design. Rather it is a copy or slavish imitation of LS & Co./LSPI’s Arcuate trademark which was first used by LS & Co. worldwide in 1873 and the Philippines Registration of which is based on LS & Co.’s US Certificate of Registration No. 404243, issued on November 16, 1943. Thus, no rights attendant to a copyright can ever attach to plaintiff’s infringing backpocket design. Also, it could not have been pure chance or coincidence that plaintiff’s LIVE’S jeans use a trademark, symbol or design which is substantially, if not exactly similar to, or a colorable imitation of LS & CO./LSPI trademarks, since there is a practically limitless array of other marks, words, numbers, devices, symbols and designs which plaintiff could have used on its products to identify and distinguish them from those of defendant and other manufacturers. All told, from the mass of evidence adduced, plaintiff’s intent to appropriate, copy, and slavishly imitate the genuine appearance of authentic LEVI’s jeans and pass off its LIVE’s jeans as genuine LEVI’S jeans in much too stark. As above-discussed, through more than a century’s use and continuous substantial promotions and advertising of the LEVI’s TRADEMARKS on its products — on jeans and trousers in particular — LS & Co. has cultivated, gained and established an invaluable goodwill in its name "LEVI’s STRAUSS & COMPANY" and in the products which carry such name and the LEVI’s TRADEMARKS. Hence, unless plaintiff is immediately enjoined from further manufacturing, selling, offering for sale and advertising denims, jeans or slacks using a design substantially, if not exactly similar to, or a colorable imitation of the LS & Co./LSPI trademarks, it will continue to have a free ride on, and erode such invaluable goodwill and reputation by the mere effortless expedient of imitating the overall visual impression of genuine LEVI’s JEANS on its own designs, employing minute points of distinction sufficient to muddle the overall conclusion which is actually generated, but do not dispel the similitude between the trademarks. Well has been said that the most successful form of copying is to employ enough points of similarity to confuse the public with enough points of difference to confuse the court. [(]Del Monte Corporation vs. Court of Appeals, 181 SCRA 418[)]. There is no question that the above-discussed circumstances call for the intervention of equity to prevent further irreparable harm to defendant’s goodwill and reputation. In consonance with Section 3 (a), (b) and (c), Rule 58 of the Rules, defendant is thus entitled to the ancillary relief demanded either for a limited period or perpetually. Corollarily, defendant is hereby directed to execute a bond to the party enjoined to the effect that defendant will pay to plaintiff all damages it may sustain by reason of the injunction if the court should finally decide that defendant is not entitled thereto. WHEREFORE, upon the filing of a bond in the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00), let a writ of preliminary injunction issue restraining plaintiff, its officers, employees, agents, representatives, dealers, retailers or assigns from

manufacturing, distributing, selling, offering for sale, advertising or otherwise using denims or jeans with a design which is substantially, if not exactly similar to defendant’s trademarks. Meanwhile, the hearing on the main cause of action is hereby set on February 5 and 12, 1997, both at 9:00 a.m. SO ORDERED.27 On motion for reconsideration, respondent prayed that the petitioner’s counterclaim be dismissed and that the order dated December 10, 1996, be set aside. In an order dated April 11, 1997, the trial court denied the motion, stating that: Considering: (1) That the defendant’s application for injunctive relief was properly directed against the real property in interest, the self-proclaimed lawful assignee and authorized user of the subject trademarks, hence, the party who would be benefited or injured by this court’s final decision on the application; (2) That the acts which plaintiff was enjoined from doing are within the scope of the reliefs demanded by defendant; (3) That the institution of defendant’s counterclaim for infringement and damages does not amount to forum-shopping in that the elements of litis pendentia which form the basis for a charge for forum-shopping are not all present in the instant case; (4) That the injunctive order sought to be reconsidered, by its very nature, is merely provisional and does not dispose of the case on the merits. Hence, it would not amount to a prejudgment considering that the defendant still has the burden of proving during trial on the merits that it is entitled to protection and that confusion does, in fact, or likely to exist, and, on the other hand, plaintiff would have its opportunity to prove that confusion does not exist or is not likely to happen; and (5) That the evidence on record justifies the injunctive relief granted by this court in favor of defendant. WHEREFORE, in view of all the foregoing, plaintiff’s motion for reconsideration and supplemental motion for reconsideration are DENIED for lack of merit. SO ORDERED.28 Respondent took the matter to the Court of Appeals. On August 13, 1997, the Court of Appeals rendered a decision in favor of the respondent, enjoining the trial court from further proceeding with the case. The dispositive portion thereof reads:

WHEREFORE, the petition is GRANTED. The assailed Orders dated December 10, 1996 and April 11, 1997 are annulled and set aside for having been issued with grave abuse of discretion and in excess of jurisdiction. Respondent court is ordered to desist from proceeding with Civil Case No. 96-76944, entitled "Vogue Traders Clothing Company, Plaintiff, versus Levi Strauss (Phil.), Inc., Defendant.", until the Bureau of Patents, Trademarks and Technology Transfer has finally resolved Inter Partes Cases Nos. 4216 and 4217. No costs. SO ORDERED.29 After its motion for reconsideration was denied, petitioner filed the present petition for review on certiorari, raising the following assignment of errors:

First. Petitioner points out that while the Court of Appeals categorically stated that it did not commit forum-shopping when it filed its counterclaim for infringement (to the petitioner’s complaint for damages in the Regional Trial Court of Manila, Branch 1 — Civil Case No. 96-76944) as the causes of action in the said civil case and the two inter partes cases (Inter Partes Cases Nos. 4216 and 4217 pending before the BPTTT) are different and do not involve the same subject matter and issues, it erred in applying the "doctrine of primary jurisdiction." The appeals court declared that the trial court never had the authority to hear and grant petitioner’s prayer for injunctive relief nor to proceed with the hearing of the case in view of the pendency of the two inter partes cases. Petitioner is a holder of Certificate of Registration No. 1379-A for its Levi’s trademarks. The registration gives rise to a presumption of its validity and the right to the exclusive use of the same. As set forth in Section 17 of Republic Act (R.A.) No. 166 or "The Trademark Law," an entity having a duly registered trademark can file a suit against another entity for the protection of its right:

I THE COURT OF APPEALS COMMITTED CLEARLY REVERSIBLE ERROR IN HOLDING THAT THE DOCTRINE OF PRIMARY JURISDICTION OPERATES TO SUSPEND ANY AND ALL PROCEEDINGS IN CIVIL CASE NO. 96-76944, PARTICULARLY THE ABILITY OF THE TRIAL COURT TO ISSUE PRELIMINARY INJUNCTIVE RELIEF, AND THAT THE TRIAL COURT JUDGE THEREFORE COMMITTED ABUSE OF DISCRETION IN GRANTING SUCH RELIEF. II THE COURT OF APPEALS ERRED IN FAILING TO HOLD THAT THE CERTIFICATION AGAINST FORUM-SHOPPING ATTACHED BY RESPONDENT TO ITS PETITION FOR CERTIORARI AND PROHIBITION IS FATALLY DEFECTIVE. III THE COURT OF APPEALS ERRED IN HOLDING THAT THE TRIAL COURT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION IN DECLARING RESPONDENT TO HAVE WAIVED ITS RIGHT TO ADDUCE EVIDENCE TO COUNTER PETITIONER’S EVIDENCE IN SUPPORT OF ITS APPLICATION FOR PRELIMINARY INJUNCTIVE RELIEF. IV THE COURT OF APPEALS ERRED IN HOLDING THAT THE PRELIMINARY INJUNCTIVE ORDER ISSUED IN CIVIL CASE NO. 96-76944 PREJUDGES THE CASE.30 The petition has merit.

Sec. 17.Grounds for cancellation. — Any person, who believes that he is or will be damaged by the registration of a mark or trade-name, may, upon the payment of the prescribed fee, apply to cancel said registration upon any of the following grounds: (a) That the registered mark or trade-name becomes the common descriptive name of an article or substance on which the patent has expired; (b) That it has been abandoned; (c) That the registration was obtained fraudulently or contrary to the provisions of section four, Chapter II hereof; (d) That the registered mark or trade-name has been assigned, and is being used by, or with the permission of, the assignee, so as to misrepresent the source of the goods, business or services in connection with which the mark or trade-name is used; or (e) That cancellation is authorized by other provisions of this Act. Section 27 thereof states that the proper Regional Trial Court shall have jurisdiction over the damage suits. In Conrad and Company, Inc. v. Court of Appeals,31 as reiterated in the case of Shangri-La International Hotel Management Ltd. v. Court of Appeals,32 the Court clarified that while an administrative cancellation of a registered trademark, on any of the grounds under Section 17 of R.A. No. 166, is within the ambit of the BPTTT, an action for infringement or any other incidental remedy sought is within the jurisdiction of the ordinary courts. Thus, . . . It might be mentioned that while an application for the administrative cancellation of a registered trademark on any of the grounds

enumerated in Section 17 of Republic Act No. 166, as amended, otherwise known as the Trade-Mark Law, falls under the exclusive cognizance of BPTTT (Sec. 19, TradeMark Law), an action, however, for infringement or unfair competition, as well as the remedy of injunction and relief for damages, is explicitly and unquestionably within the competence and jurisdiction of ordinary courts.

156.3. In cases where actual intent to mislead the public or to defraud the complainant is shown, in the discretion of the court, the damages may be doubled. (Sec. 23, first par., R.A. No. 166) 156.4 The complainant, upon proper showing, may also be granted injunction. (Sec. 23, second par., R.A. No. 166a)

... Surely, an application with BPTTT for an administrative cancellation of a registered trade mark cannot per se have the effect of restraining or preventing the courts from the exercise of their lawfully conferred jurisdiction. A contrary rule would unduly expand the doctrine of primary jurisdiction which, simply expressed, would merely behoove regular courts, in controversies involving specialized disputes, to defer to the findings or resolutions of administrative tribunals on certain technical matters. This rule, evidently, did not escape the appellate court for it likewise decreed that for "good cause shown, the lower court, in its sound discretion, may suspend the action pending outcome of the cancellation proceedings" before BPTTT. (Underscoring supplied.) The passage of Republic Act No. 8293, otherwise known as the "Intellectual Property Code of the Philippines,"33expanded the rights accorded to an owner of a registered trademark. Sections 151 (2), 156, and 161 thereof state: Section 151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs {formerly BPTTT] shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. (Sec. 17, R.A. No. 166a) Section 156.Actions, and Damages and Injunction for Infringement. — 156.1 The owner of a registered mark may recover damages from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party (Sec. 23, first par., R.A. No. 166a). 156.2 On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales. (n)

Section 161. Authority to Determine Right to Registration. — In any action involving a registered mark, the court may determine the right to registration, order the cancellation of a registration, in whole or in part, and otherwise rectify the register with respect to the registration of any party to the action in the exercise of this. Judgment and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Bureau, and shall be controlled thereby (Sec. 25, R.A. No. 166a). Sections 155 (2), 156, and 163 of the said law further provide for the remedy of an owner of a registered mark to institute an action for infringement or damages against a person or entity that may reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, 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 goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive. Finally, Rule 8, Section 7 of the Regulations on Inter Partes Proceedings, provides: Section 7.Effect of filing of a suit before the Bureau or with the proper court. — The filing of a suit to enforce the registered mark with the proper court or Bureau shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. (Emphasis supplied) It bears stressing that an action for infringement or unfair competition, including the available remedies of injunction and damages, in the regular courts can proceed independently or simultaneously with an action for the administrative cancellation of a registered trademark in the BPTTT. As applied to the present case, petitioner’s prior filing of two inter partes cases against the respondent before the BPTTT for the cancellation of the latter’s trademark registrations, namely, "LIVE’S" and "LIVE’S Label Mark," does not preclude petitioner’s right (as a defendant) to include in its answer (to respondent’s complaint for damages in Civil Case No. No. 96-76944) a counterclaim for infringement with a prayer for the issuance of a writ of preliminary injunction. Second. As to the procedural matter, petitioner argues that the Court of Appeals erred in giving due course to the respondent’s petition for certiorari even if it was the

latter’s counsel, Atty. Danilo A. Soriano, not one of its duly authorized officers, who executed the certification of non-forum shopping.

Secretary’s Certificate containing the board resolution, was submitted to show that he was indeed authorized to file the said petition in the Court of Appeals.

Section 5, Rule 7 of the Rules of Civil Procedure incorporating Administrative Circular Nos. 28-91 (effective January 1, 1992) and 04-94 (effective April 1, 1994) states the requirement of a plaintiff or petitioner to include in his initiatory pleading or petition a certification of non-forum shopping. Thus,

Third. Petitioner avers that the Court of Appeals erred in finding that the respondent was denied due process. It contends that the trial court had correctly ruled that respondent was deemed to have waived its right to present evidence due to its nonappearance at the scheduled hearing (to oppose the petitioner’s application for the issuance of a writ of preliminary injunction) on December 4, 1996.

Sec. 5.Certification against forum shopping. — The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions. In Digital Microwave Corp. v. CA,34 this Court gave the rationale for this rule, namely, that the certification against forum shopping is required to be accomplished by petitioner himself because only the petitioner himself has actual knowledge of whether or not he has initiated similar actions or proceedings in different courts or agencies. Even his counsel may be unaware of such fact as he may only be aware of the action for which he has been retained. As to corporations, the law requires that the certification could be made by its duly authorized director or officer. The Court also stresses that the petitioner’s non-compliance and utter disregard of the rules cannot be rationalized by invoking the policy of liberal construction. The requirement of certification against forum shopping under the Rules is to be executed by the petitioner, or in the case of a corporation, its duly authorized director or officer, but not petitioner’s counsel whose professional services have been engaged to handle the subject case. The reason is that it is the petitioner who has personal knowledge whether there are cases of similar nature pending with the other courts, tribunals, or agencies. Thus, in the present case, the Court of Appeals should have outrightly dismissed the petition for certiorari filed by the respondent (as therein petitioner in the appeals court) due to the defective certification of non-forum shopping. The certification made by Atty. Soriano, counsel for the respondent, who is not one of its duly authorized directors or officers, is defective.Even if Atty. Soriano was the "in-house counsel," the fact remains that no board resolution, or even a

The records show that respondent, through its former counsel, Atty. Alfonso R. Yatco, was present during the hearing on November 6, 1996 as reflected in the minutes of the court proceedings that day. The counsels for both parties had been duly notified in open court. The Branch Clerk of Court of RTC of Manila, Branch 1, Atty. Joselito C. Frial, even made a notation in the minutes that respondent (as oppositor) shall be given a period of 10 days to interpose its opposition to the petitioner’s prayer for injunctive relief.35 The Order dated November 6, 1996 states: After witness Atty. Gilbert Raymond T. Reyes [witness for the petitioner] had finished his testimony, the counsel for defendant [herein petitioner] moved for and was allowed ten (10) days from today within which to file a written formal offer of exhibits, copy furnish[ed] the counsel for plaintiff [herein respondent] who is allowed a similar period of time from receipt thereof within which to file comment and/or objection. In the meantime, let the hearing be continued on December 4 & 11, 1996, both at 9:00 a.m. as previously scheduled. The counsels are notified of this order in open court. SO ORDERED.36 However, on December 4, 1996, Atty. Yatco failed to appear without proferring any valid reason which prompted the trial court to issue an order that respondent was deemed to have waived its right to present evidence: On call for hearing, only the counsel for defendant [herein petitioner] appeared. There was no appearance for plaintiff [herein respondent] although its counsel was duly notified. In view thereof, upon motion of counsel for defendant, plaintiff is considered to have waived its right to present evidence to controvert defendant’s application for a writ of preliminary injunction, which, consequently, is hereby deemed submitted for resolution. The counsel for defendant is notified in open court. Furnish the counsel for plaintiff with a copy hereof. SO ORDERED.37 Respondent explained to the trial court that its former counsel, Atty. Yatco, had honestly thought that the December 4, 1996 hearing had been rescheduled to

December 11, 1996 per agreement with the petitioner’s counsel. This is not a sufficient ground. It was correct for the trial court, upon motion of petitioner, to consider the matter submitted for resolution on the basis of petitioner’s evidence. Respondent cannot find solace in its lame excuse of honest mistake which was, in fact, negligence and lack of vigilance. Fourth. Petitioner claims that the assailed orders of the trial court, dated December 10, 1996 and April 11, 1997, did not prejudge the case. On the other hand, respondent counters that the trial court’s order dated December 10, 1996 amounted to a prejudgment of the case, to wit: that its LIVE’s backpocket design was not copyrightable because it was neither an original work nor a novel design; that it was a copy or slavish imitation of petitioner’s LEVI’s Arcuate trademark; and that no rights attendant to a copyright can ever attach to respondent’s backpocket design. The trial court granted petitioner’s prayer for the issuance of a writ of preliminary injunction in its answer with counterclaim (to respondent’s complaint for damages). The writ did not have the effect of prejudging or disposing of the merits of the case, but merely enjoined the respondent’s acts of manufacturing, distributing, selling, or offering for sale the jeans which had allegedly incorporated exact or colorable imitations of the products belonging to petitioner. The Order dated April 11, 1997 of the trial court denying the respondent’s motion for reconsideration categorically stated that the said Order did not amount to a prejudgment of the case. Petitioner has yet to establish during the trial that it is entitled to a permanent injunction by reason of respondent’s confusingly similar LIVE’S products. Otherwise, the trial court could declare that the LIVE’S trademark belonging to respondent was not confusingly similar with the LEVI’s trademark of petitioner. Indeed, a writ of preliminary injunction is generally based solely on initial and incomplete evidence adduced by the applicant (herein petitioner). The evidence submitted during the hearing of the incident is not conclusive, for only a "sampling" is needed to give the trial court an idea of the justification for its issuance pending the decision of the case on the merits. As such, the findings of fact and opinion of a court when issuing the writ of preliminary injunction are interlocutory in nature. Moreover, the sole object of a preliminary injunction is to preserve the status quo until the merits of the case can be heard. Since Section 4 of Rule 58 of the Rules of Civil Procedure gives the trial courts sufficient discretion to evaluate the conflicting claims in an application for a provisional writ which often involves a factual determination, the appellate courts generally will not interfere in the absence of manifest abuse of such discretion.38 A writ of preliminary injunction would become a prejudgment of a case only when it grants the main prayer in the complaint or responsive pleading, so much so that there is nothing left for the trial court to try except merely incidental matters.39 Such fact does not obtain in the present case. WHEREFORE, the petition is GRANTED and the Decision of the Court of Appeals dated August 13, 1997 and its Resolution dated March 5, 1998 are REVERSED and SET ASIDE. The Regional Trial Court of Manila, Branch 1 is ORDERED to proceed with the hearing of Civil Case No. 96-76944 with dispatch. No costs.

SO ORDERED. P, per an agreement with Levi Strauss & Co., the principal based in US, was granted a non-exclusive license to use LEVI’S trademark, design, and name in the manufacturing, marketing, distribution, and sale of its clothing and other goods, to wit: “LEVI’S”; “501”; “Two Horse Design”; “Two Horse Label”; “Two Horse Patch”; “Two Horse Label with Patterned Arcuate Design”; “Arcuate Design”; and the composite trademarks, namely, “Arcuate,” “Tab,” and “Two Horse Patch.” P discovered the existence of some trademark registrations belonging to R which, in its view, were confusingly similar to its trademarks. P instituted two Inter Partes cases for the cancellation of R’s trademark registrations (for “LIVE’S”) and (for “LIVE’S” Label Mark). P then applied for the issuance of a SW on the premises of R which was then issued based on its finding of probable cause that the R had violated Article 189 of the RPC. The SWs were enforced and several goods belonging to R were seized. Meanwhile, it appears that criminal charges were filed against R but the same were eventually dismissed and the SWs were quashed. Consequently, R filed a complaint for damages against P alleging that it had been a lawful assignee and authorized user of the trademark “LIVE’S” and “LIVE’S LABEL MARK” and copyright registrations of “LIVE’S ORIGINAL JEANS,” its pocket design, and hand tag; and that their trademarks did not have any deceptive resemblance with that of P. P countered that R’s LIVE’S brand infringed upon its licensed brand name LEVI’S. The case was re-raffled among the Special Courts for cases involving violations of Intellectual Property Rights. R failing to appear, the TC declared R to have waived its right to present evidence to controvert P’s application for a WPI. The TC found that the R intended to appropriate, copy, and slavishly imitate the genuine appearance of authentic LEVI’s jeans and pass off its LIVE’s jeans as genuine LEVI’s jeans. TC issued a WPI and R’s MR was denied. R appealed to the Court of Appeals which rendered a decision in its favor. P’s MR was denied hence the present petition for review on certiorari. Issue: Whether or not an administrative action for cancellation of Trademark can proceed independently from an action of TMI/UC. Ruling: The petition has merit. The passage of Republic Act No. 8293, otherwise known as the “Intellectual Property Code of the Philippines,” expanded the rights accorded to an owner of a registered trademark. Sections 151 (2), 156, and 161 thereof state:

Section 151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs {formerly BPTTT] shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. (Sec. 17, R.A. No. 166a) Finally, Rule 8, Section 7 of the Regulations on Inter Partes Proceedings, provides: Section 7. Effect of filing of a suit before the Bureau or with the proper court. — The filing of a suit to enforce the registered mark with the proper court or Bureau shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. (Emphasis supplied) It bears stressing that an action for infringement or unfair competition, including the available remedies of injunction and damages, in the regular courts can proceed independently or simultaneously with an action for the administrative cancellation of a registered trademark in the BPTTT. As applied to the present case, petitioner’s prior filing of two inter partes cases against the respondent before the BPTTT for the cancellation of the latter’s trademark registrations, namely, “LIVE’S” and “LIVE’S Label Mark,” does not preclude petitioner’s right (as a defendant) to include in its answer (to respondent’s complaint for damages in Civil Case No. No. 96-76944) a counterclaim for infringement with a prayer for the issuance of a writ of preliminary injunction. WHEREFORE, the petition is GRANTED and the CA Decision and Resolution are REVERSED and SET ASIDE. The RTC is ORDERED to proceed with the hearing of case with dispatch.

G.R. No. L-11818

July 31, 1959

LA ESTRELLA DISTILLERY, INC., petitioner, vs. THE DIRECTOR OF PATENTS, CHENG CHIONG, and FOO U. CHING and CO., respondents. Carlos, Yumol and Crisologo for petitioners. Pacunayen and Aguilar for respondent Company. Assistant Solicitor General E. Torres and Solicitor H. C. Fule for respondent Director of Patents.

The pleadings of the parties disclose their respective contentions. The petition for cancellation alleges, among others: (1) That La Estrella's label "is not and cannot be a trademark as defined by law" because it is a "common label affixed to rice wine, Chinese wine and similar goods and also to other kinds of goods." (2) That "it is also used by petitioner (Cheng Chiong) and other manufacturers of same or similar products." (3) That therefore petitioners (Cheng Chiong) deem themselves "prejudiced and/or injured damage by said registration."

BARRERA, J.: The answer of La Estrella avers: La Estrella Distillery, Inc. (hereinafter referred to as La Estrella) and Cheng Chiong & Foo U. Ching Company (Cheng Chiong for short) are both holders of Supplemental Registration label trademarks. Before the Patent Office, proceedings for the cancellation of La Estrella's label by trademark registration No. SR-13 were instituted by Cheng Chiong under Section 19A of Republic Act No. 166. After answer by La Estrella and after trial on the merits, the Director of Patents found that the two label trademarks are distinctly differently in appearance and possess different identifying marks which make each satisfy the statutory requirement for registration — the requirement of being capable of distinguishing the particular goods upon which each is used. The Director accordingly held that no damage to Cheng Chiong could possibly result from La Estrella's registration and use of its own label trademark and dismissed the petition for its cancellation. Despite this favorable decision, La Estrella moved for its reconsideration praying for the elimination of "the findings made therein that the label trademarks of the petitioner and respondents are distinctly different" and "that in lieu thereof a pronouncement be made to the effect that said label trademarks are similar." The reason given for this motion for reconsideration is that the matter of similarly or dissimilarity has not been raised in issue and that in fact the parties have impliedly admitted that the labels are similar. Its motion for reconsideration having been denied, La Estrella has taken the present appeal and here urges the same contention that the Director of Patents has committed error in making a pronouncement in his decision that the two labels in question are not similar, contrary to the pleadings and evidence presented by the parties. This appeal is without merit. While appellant attacks the grounds upon which the decision of the Director of Patents is based, it does not question the dispositive part thereof because it is favorable to it. Appellant claims that the matter of dissimilarity of the two labels has never been put in issue. This is not true. The whole theory upon which this case was presented, tried and decided in the Patent Office was predicated mainly on this question.

(1) That its trademark "meets all the necessary elements of a valid trademark" in that it is "so disposed as to attract attention, impress the memory, and advertises more effectually the origin of the article to which it is attached." (2) That it has been long and continuously used by it "for no other purpose than to further distinguish the products of said respondent (La Estrella) from those of its competitors." (3) "That the trademark in question is the original and exclusive creation of respondent" (La Estrella). During the trial, Cheng Chiong, in support of their claim that La Estrella's label trademark is "publici juris" and therefore incapable of distinguish La Estrella's goods, presented over a dozen labels of different merchants including his own. To counteract this, La Estrella exhibited its own label in color and other evidence to prove that its trademark sufficiently identifies and differentiates its merchandise from those of its competitors. The record disclose similar testimonies of witnesses and statements of counsel of both parties sustaining respectively their opposing stands. In disposing of and denying the motion for reconsideration of appellant La Estrella, the Director of Patents correctly ruled: It is alleged in said motion that the Director of Patents erred (1) in finding that the label trade-mark of the petitioner and of the respondent-registrant are not similar, and (2) in making pronouncement on why they are not similar. Under Sec. 19-A Rep. Act 166, as amended, a label, used as a trademark, may be registered on the Supplemental Register provided (1) it is not a mark prescribed or prohibited under paragraph (a), (b), (c) and (d) of Sec. 4 of the

same acts; (2) it is capable of distinguishing the goods upon it is used; (3) it had been used by the applicants for registration for one year next preceding the filing of the application.

2. Whether or nor not the registration of respondent's trademark in the Supplemental Register had been obtained trough fraud and false representation.

Under the same Sec. 19-A, a person may petition for the cancellation of the registration on the Supplementary Register was not label, used as a trademark, provided (1) the registrant was not entitled to register the mark at the time he filed his application for its registration; and (2) provided the register of the registered mark.

and, because these were the only issues, it was an error, for this tribunal to disregard them and to pass on the questions of the similarity of dissimilarity of the label trademark.

Under the same Sec. 19-A, among the facts that they may be established to show that the registrant was not entitled to the registration of the mark sought to be cancelled are (1) the mark was prescribed under paragraph (a), (b), (c) and (d), of Sec. 4 of the Rep. Act 166, as amended; (2) the mark was and is not capable of distinguishing the registrant's goods; (3) the registrants had never used the mark or had not actually used the mark for one year next preceding the filing of his application for registration; and (4) the registrants had abandoned his mark after registration. But although the petitioner for cancellation may succeed in establishing one or all of the above four facts, his petition for cancellation will nevertheless be dismissed, under the same Sec. 19-A unless he is able clearly to establish that he will damaged by the continuance on the register of the mark he seeks to cancel. Of the two grounds alleged by the petitioner for cancellation (loser in this case, for canceling the respondent's mark, the one pertinent to the instant motion of the respondent (winner in this case) for reconsideration, is the following that respondent's label trademark was and is common to the trade, being used not only by the respondent, but by the petitioner and by the New Occidental Distillery as well. If this allegation be true, then the respondent's trademark is not only incapable of distinguishing respondent's goods, but its continuance on the register will damage the petitioner for cancellation. To determine whether respondent's label trademark was incapable of distinguishing respondent's goods and whether its continuance on the register would damage the petitioner for cancellation, it was necessary for this tribunal to examine the label trademark of the respondent, the petitioner, and the New Occidental Distillery and to make a finding thereon. The finding was that the label trademark were different; that therefore, respondent's goods, the petitioner for cancellation would not be damaged by the continuance on the registers of the respondent's label trademark, and petitioner's petition for cancellation should be dismissed. xxx

xxx

xxx

It is urged by the respondent's that the similarity of the label trademark having been admitted the only issue to be decided were — 1. Whether or not the label trademark of the respondent constitutes a valid trademark as defined by law; and

These two issues are not important. What if the respondent's label trademark was not valid trademark, not registerable under Sec. 19-A of Rep. Act No. 166? What if the registration of the respondent's label trademark was obtained thru the misrepresentation that respondent had been using the same since 1905? Even if proved, these two facts were not sufficient to warrant the cancellation of the respondent's label trademark. In order that these two facts produce cancellation, it was necessary that they he coupled with a showing that the maintenance of the respondent's label trademark on the register would damage the petitioner. The continuance of the respondent's label trademark and petitioner's on the register would damage the petitioner for cancellation only if the respondent's mark were similar. Hence the necessity and the importance of this tribunal making a finding on the similarity or dissimilarity between the two marks. For the above reasons it is ruled that this tribunal committed no error as alleged in the instant motion for reconsideration. The motion for reconsideration is, therefore, denied. We find no error either in the reasoning or in the conclusion reached by the Director of Patents. Wherefore, the present petition for review is hereby dismissed, with costs against the petitioner. It is so ordered.