G.R. No.
L-40163 June 19, 1982 Defendants moved to dismiss the complaint for failure to state a cause of action,
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.
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 necessary qualifying circumstances which clothe it with such right be affirmatively
Section 21-A of Republic Act No. 166, as amended. After the filing of the plaintiff’s pleaded. And the reason therefor, as enunciated in “Atlantic Mutual Insurance Co., et
opposition and the defendant’s reply, the respondent judge denied the motion on the al. versus Cebu Stevedoring Co., Inc.” 4 is that —
ground that the same did not appear to be indubitable.
these are matters peculiarly within the knowledge of appellants alone, and it would be
The motion for reconsideration having likewise been denied, defendants instituted the unfair to impose upon appellees the burden of asserting and proving the contrary. It is
instant petition for certiorari and prohibition, charging respondent judge with grave enough that foreign corporations are allowed by law to seek redress in our courts
abuse of discretion in denying their motion to dismiss. 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
Issue: Whether or not the plaintiff (Leviton Manufacturing) herein respondents, failed that the party sued is a foreign corporation.
to allege the essential facts bearing its capacity to sue before Philippine courts.
It was indeed in the light of this and other considerations that this Court has seen fit to
Ruling: Yes. 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
We agree with petitioners that respondent Leviton Marketing Co., Inc. had failed to be sued in a representative capacity or the legal existence of an organized
allege the essential facts bearing upon its capacity to sue before Philippine courts. association of persons that is made a party, must be averred,
Private respondent’s action is squarely founded on Section 21-A of Republic Act No.
166, as amended, which we quote: IN VIEW OF THE FOREGOING, the instant petition is hereby granted and,
accordingly, the order of the respondent judge dated September 27, 1974 denying
Sec. 21-A. Any foreign corporation or juristic person to which a mark or tradename petitioner’s motion to dismiss is hereby set aside. The Court of First Instance of Rizal
has been registered or assigned under this Act may bring an action hereunder for (Caloocan City), the court of origin, is hereby restrained from conducting further
infringement, for unfair competition, or false designation of origin and false proceedings in Civil Case No. C-2891, except to dismiss the same. No costs.
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
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.
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:
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 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):
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
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)
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), "Over-
ture" (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.
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.

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 trade-
mark 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.)
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-91-
8476,19 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.
Costs against defendants.
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.
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-91-
8476.1âwphi1.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, 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, 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 trade-
name, 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 Trade-
Mark 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.
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.

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.
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.
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.

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
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.
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,
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
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 predecessor-
in-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 respondent-
registrant 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. 1379-
A.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:
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.
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:
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, 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.
...
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)
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)
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.
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,
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
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.
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 non-
appearance at the scheduled hearing (to oppose the petitioner’s application for the
issuance of a writ of preliminary injunction) on December 4, 1996.
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.
BARRERA, J.:
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 19-
A 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.
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."
The answer of La Estrella avers:
(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 2. Whether or nor not the registration of respondent's trademark in the
had been used by the applicants for registration for one year next preceding Supplemental Register had been obtained trough fraud and false
the filing of the application. 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.
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.
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.
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.

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