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G.R. No.

L-38010 December 21, 1933


PATRICK HENRY FRANK and WILLIAM
HENRY GOHN, plaintiffs-appellants,
vs.
G. KOSUYAMA, defendant-appellee.
J.W. Ferrier for appellants.
Pablo Lorenzo for appellee.

IMPERIAL, J .:
Patent No. 1519579 (Exhibit 117) on improvement
in hemp stripping machines, issued by the United
States Patent Office on December 16,1924, and
registered in the Bureau of Commerce and Industry
of the Philippine Islands on March 17,1925, was the
origin of this action brought by the plaintiffs herein
who prayed that the judgment be rendered against
the defendant, ordering him thereby to refrain
immediately from the manufacture and sale of
machines similar to the one covered by the patent: to
render an accounting of the profits realized from the
manufacture and sale of the machines in question;
that in case of refusal or failure to render such
accounting, the defendants be ordered to pay the
plaintiffs the sum of P60 as profit on each machine
manufactured or sold by him; that upon approval of
the required bond, said defendant be restrained from
continuing the manufacture and sale of the same kind
of machines; that after the trial the preliminary
injunction issued therein be declared permanent and,
lastly, that the said defendant be sentenced to pay the
costs and whatever damages the plaintiffs might be
able to prove therein. The action therefore was based
upon alleged infringement by the defendant of the
rights and privileges acquired by the plaintiffs over
the aforesaid patent through the manufacture and
sale by the former of machines similar to that
covered by the aforesaid patent.
The plaintiffs appealed from the judgment rendered
by the trial court dismissing their complaint, with
cost, as well as the defendant's counterclaim of
P10,000. The defendant did not appeal.
In their amended complaint, the plaintiff alleged that
their hemp stripping machines, for which they
obtained a patent, have the following characteristics:
"A stripping head, a horizontal table, a stripping
knife supported upon such table, a tappering spindle,
a rest holder adjustably secured on the table portion,
a lever and means of compelling the knife to close
upon the table, a pallet or rest in the bottom of the
table, a resilient cushion under such palletor rest." In
spite of the fact that they filed an amended complaint
from which the "spindle" or conical drum, which
was the only characteristic feature of the machine
mentioned in the original complaint, was eliminated,
the plaintiffs insisted that the said part constitutes the
essential difference between the machine in question
and other machines and that it was the principal
consideration upon which their patent was issued.
The said plaintiffs sustained their contention on this
point even in their printed brief and memorandum
filed in this appeal.
During the trial, both parties presented voluminous
evidence from which the trial court arrived at the
following conclusions:
In constructing their machine the plaintiffs
did nothing but improve, to a certain degree,
those that were already in vogue and in actual
us in hemp producing provinces. It cannot be
said that they have invented the "spindle"
inasmuch as this was already known since the
year 1909 or 1910. Neither it can be said that
they have invented the stripping knife and the
contrivance which controls the movement
and pressure thereof on the ground that
stripping knives together with their control
sets were already in actual use in the different
stripping machines long before their machine
appeared. Neither can it be said that they
invented the fly wheel because that part or
piece thereof, so essential in every machine
from time immemorial, was already known
and actually employed in hemp stripping
machines such as those of Riesgo (Exhibit 4-
A), Crumb (Exhibit 1-A), Icsiar (Exhibit A-
Suzara), Browne (Exhibit 28-A), McFie, etc.,
all of which were in use for the benefit of
hemp long before the appearance of the
plaintiffs' machines in the market. Much less
can it be said that they invented the pedal to
raise the knife in order to allow the hemp to
be stripped to pass under it, on the ground
that the use of such contrivance has, likewise,
been known since the invention of the most
primitive of hemp stripping machines.
On the other hand, although the plaintiffs
alleged in their original complaint that "the
principal and important feature of said
machine is a spindle upon which the hemp to
be stripped is wound in the process of
stripping," nevertheless, in their amended
complaint of March 3, 1928, which was filed
after a portion of the evidence therein had
already been submitted and it was known that
the use of the spindle was nothing new, they
still made the allegations appearing in
paragraph 3 of their said amended complaint
and reproduced on pages 2,3,4 and 5 hereof,
copying the same from the application which
they filed with the United States Patent
Office, under which they obtained their
patent in question. The aforesaid application
clearly shows that what they applied for was
not a patent for a "pioneer or primary
invention" but only for some "new and useful
improvement in hemp stripping machines."
We have carefully reviewed the evidence presented
and have had the opportunity of ascertaining the
truth of the conclusions above stated. We agree with
the trial court that, strictly speaking, the hemp
stripping machine of the plaintiffs does not constitute
an invention on the ground that it lacks the elements
of novelty, originality and precedence (48 C.J., sec.
101, p. 97, and 102, p. 98). In fact, before the
plaintiffs herein obtained their patent, they
themselves had already publicly used the same kind
of machine for some months, at least, and, various
other machines, having in general, the same
characteristics and important parts as that of the said
plaintiffs, were known in the Province of Davao.
Machines known as Molo, Riesgo, Crumb, Icsiar,
Browne and McFie were already known in that
locality and used by the owners of hemp plantations
before the machine of the plaintiffs came into
existence. It may also be noted that Adrian de Icsiar
applied for a patent on an invention which resulted in
the rejection by the United States Patent Office of
the plaintiffs' original application for a patent on the
so called "spindle" or conical drum which was then
in actual use in the Dringman and Icsiar hemp
stripping machines.
Notwithstanding the foregoing facts, the trial court
did not decree the annulment of the plaintiffs' patent
and the herein defendant-appellee insists that the
patent in question should be declared null and void.
We are of the opinion that it would be improper and
untimely to render a similar judgment, in view of the
nature of the action brought by the plaintiffs and in
the absence of a cross-complaint to that effect. For
the purposes of this appeal, suffice it to hold that the
defendant is not civilly liable for alleged
infringement of the patent in question.
In the light of sound logic, the plaintiffs cannot insist
that the "spindle" was a patented invention on the
ground that said part of the machine was voluntarily
omitted by them from their application, as evidenced
by the photographic copy thereof (Exhibit 41)
wherein it likewise appears that the patent on
Improved Hemp Stripping Machines was issued
minus the "spindle" in question. Were we to stress to
this part of the machine, we would be giving the
patent obtained by the plaintiffs a wider range than it
actually has, which is contrary to the principles of
interpretation in matters relating to patents.
In support of their claim the plaintiffs invoke the
doctrine laid down by this court in the case of Frank
and Gohn vs. Benito (51 Phil., 712), wherein it was
held that the therein defendant really infringed upon
the patent of the therein plaintiffs. It may be noted
that the plaintiffs in the former and those of the latter
case are the same and that the patent then involved is
the very same one upon which the present action of
the plaintiffs is based. The above-cited case,
however, cannot be invoked as a precedent to justify
a judgment in favor of the plaintiffs-appellants on the
ground that the facts in one case entirely different
from those in the other. In the former case the
defendant did not set up the same special defenses as
those alleged by the herein defendant in his answer
and the plaintiffs therein confined themselves to
presenting the patent, or rather a copy thereof,
wherein the "spindle" was mentioned, and this court
took for granted their claim that it was one of the
essential characteristics thereof which was imitated
or copied by the then defendant. Thus it came to pass
that the "spindle" in question was insistently
mentioned in the decision rendered on appeal as the
essential part of the plaintiffs' machine allegedly
imitated by the then defendant. In the case under
consideration, it is obvious that the "spindle" is not
an integral part of the machine patented by the
plaintiffs on the ground that it was eliminated from
their patent inasmuch as it was expressly excluded in
their application, as evidenced by the aforesaid
Exhibit 41.
Wherefore, reiterating that the defendant cannot be
held civilly liable for alleged infringement of the
patent upon which the present action is based on the
ground that there is no essential part of the machine
manufactured and sold by him, which was unknown
to the public in the Province of Davao at the time the
plaintiffs applied for and obtained their patent for
improved hemp stripping machines, the judgment
appealed from is hereby affirmed, with the costs
against the plaintiffs-appellants. So ordered.
Avancea, C.J., Malcolm, Villa-Real, and Hull, JJ.,
concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 113388 September 5, 1997
ANGELITA MANZANO, petitioner,
vs.
COURT OF APPEALS, and MELECIA
MADOLARIA, as Assignor to NEW UNITED
FOUNDRY MANUFACTURING
CORPORATION, respondents.

BELLOSILLO, J .:
The primary purpose of the patent system is not
the reward of the individual but the
advancement of the arts and sciences. The
function of a patent is to add to the sum of
useful knowledge and one of the purposes of
the patent system is to encourage
dissemination of information concerning
discoveries and inventions. This is a matter
which is properly within the competence of the
Patent Office the official action of which has the
presumption of correctness and may not be
interfered with in the absence of new evidence
carrying thorough conviction that the Office has
erred. Since the Patent Office is an expert body
preeminently qualified to determine questions of
patentability, its findings must be accepted if
they are consistent with the evidence, with
doubts as to patentability resolved in favor of
the Patent Office.
1

Petitioner Angelita Manzano filed with the
Philippine Patent Office on 19 February 1982 an
action for the cancellation of Letters Patent No.
UM-4609 for a gas burner registered in the
name of respondent Melecia Madolaria who
subsequently assigned the letters patent to New
United Foundry and Manufacturing Corporation
(UNITED FOUNDRY, for brevity). Petitioner
alleged that (a) the utility model covered by the
letters patent, in this case, an LPG gas burner,
was not inventive, new or useful; (b) the
specification of the letters patent did not comply
with the requirements of Sec. 14, RA No. 165,
as amended; (c) respondent Melecia Madolaria
was not the original, true and actual inventor nor
did she derive her rights from the original, true
and actual inventor of the utility model covered
by the letters patent; and, (d) the letters patent
was secured by means of fraud or
misrepresentation. In support of her petition for
cancellation petitioner further alleged that (a)
the utility model covered by the letters patent of
respondent had been known or used by others
in the Philippines for more than one (1) year
before she filed her application for letters patent
on 9 December 1979; (b) the products which
were produced in accordance with the utility
model covered by the letters patent had been in
public use or on sale in the Philippines for more
than one (1) year before the application for
patent therefor was filed.
Petitioner presented the following documents
which she correspondingly marked as exhibits:
(a) affidavit of petitioner alleging the existence
of prior art, marked Exh. "A;" (b) a brochure
distributed by Manila Gas Corporation
disclosing a pictorial representation of Ransome
Burner made by Ransome Torch and Burner
Company, USA, marked Exh. "D;" and, (c) a
brochure distributed by Esso Gasul or Esso
Standard Eastern, Inc., of the Philippines
showing a picture of another similar burner with
top elevation view and another perspective view
of the same burner, marked Exh. "E."
Testifying for herself petitioner narrated that her
husband Ong Bun Tua worked as a helper in
the UNITED FOUNDRY where respondent
Melecia Madolaria used to be affiliated with
from 1965 to 1970; that Ong helped in the
casting of an LPG burner which was the same
utility model of a burner for which Letters Patent
No. UM-4609 was issued, and that after her
husband's separation from the shop she
organized Besco Metal Manufacturing (BESCO
METAL, for brevity) for the casting of LPG
burners one of which had the configuration,
form and component parts similar to those
being manufactured by UNITED FOUNDRY.
Petitioner presented in evidence an alleged
model of an LPG burner marked Exh. "K" and
covered by the Letters Patent of respondent,
and testified that it was given to her in January
1982 by one of her customers who allegedly
acquired it from UNITED FOUNDRY. Petitioner
also presented in evidence her own model of an
LPG burner called "Ransome" burner marked
Exh. "L," which was allegedly manufactured in
1974 or 1975 and sold by her in the course of
her business operation in the name of BESCO
METAL. Petitioner claimed that this "Ransome"
burner (Exh. "L") had the same configuration
and mechanism as that of the model which was
patented in favor of private respondent Melecia
Madolaria. Also presented by petitioner was a
burner cup of an imported "Ransome" burner
marked Exh "M" which was allegedly existing
even before the patent application of private
respondent.
Petitioner presented two (2) other witnesses,
namely, her husband Ong Bun Tua and Fidel
Francisco. Ong testified that he worked as a
helper in the UNITED FOUNDRY from 1965 to
1970 where he helped in the casting of LPG
burners with the same form, configuration and
mechanism as that of the model covered by the
Letters Patent issued to private respondent.
Francisco testified that he had been employed
with the Manila Gas Corporation from 1930 to
1941 and from 1952 up to 1969 where he
retired as supervisor and that Manila Gas
Corporation imported "Ransome" burners way
back in 1965 which were advertised through
brochures to promote their sale.
Private respondent, on the other hand,
presented only one witness, Rolando Madolaria,
who testified, among others, that he was the
General Supervisor of the UNITED FOUNDRY
in the foundry, machine and buffing section; that
in his early years with the company, UNITED
FOUNDRY was engaged in the manufacture of
different kinds of gas stoves as well as burners
based on sketches and specifications furnished
by customers; that the company manufactured
early models of single-piece types of burners
where the mouth and throat were not
detachable; that in the latter part of 1978
respondent Melecia Madolaria confided in him
that complaints were being brought to her
attention concerning the early models being
manufactured; that he was then instructed by
private respondent to cast several experimental
models based on revised sketches and
specifications; that private respondent again
made some innovations; that after a few
months, private respondent discovered the
solution to all the defects of the earlier models
and, based on her latest sketches and
specifications, he was able to cast several
models incorporating the additions to the
innovations introduced in the models. Various
tests were conducted on the latest model in the
presence and under the supervision of Melecia
Madolaria and they obtained perfect results.
Rolando Madolaria testified that private
respondent decided to file her application for
utility model patent in December 1979.
On 7 July 1986 the Director of Patents Cesar C.
Sandiego issued Decision No. 86-56 denying
the petition for cancellation and holding that the
evidence of petitioner was not able to establish
convincingly that the patented utility model of
private respondent was anticipated. Not one of
the various pictorial representations of business
clearly and convincingly showed that the
devices presented by petitioner was identical or
substantially identical with the utility model of
the respondent. The decision also stated that
even assuming that the brochures depicted
clearly each and every element of the patented
gas burner device so that the prior art and
patented device became identical although in
truth they were not, they could not serve as
anticipatory bars for the reason that they were
undated. The dates when they were distributed
to the public were not indicated and, therefore,
were useless prior art references. The records
and evidence also do not support the
petitioner's contention that Letters Patent No.
UM-4609 was obtained by means of fraud
and/or misrepresentation. No evidence
whatsoever was presented by petitioner to show
that the then applicant Melecia Madolaria
withheld with intent to deceive material facts
which, if disclosed, would have resulted in the
refusal by the Philippine Patent Office to issue
the Letters Patent under inquiry.
Petitioner elevated the decision of the Director
of Patents to the Court of Appeals which on 15
October 1993 affirmed the decision of the
Director of Patents. Hence, this petition for
review on certiorari alleging that the Court of
Appeals erred (a) in relying on imaginary
differences which in actuality did not exist
between the model of private respondent
covered by Letters Patent No. UM-4609 and the
previously known model of Esso Standard
Eastern, Inc., and Manila Gas Corporation,
making such imaginary differences grounded
entirely on speculation, surmises and
conjectures; (b) in rendering judgment based on
misapprehension of facts; (c) in relying mainly
on the testimony of private respondent's sole
witness Rolando Madolaria; and, (d) in not
cancelling Letters Patent No. UM-4609 in the
name of private respondent.
Petitioner submits that the differences cited by
the Court of Appeals between the utility model
of private respondent and the models of Manila
Gas Corporation and Esso Standard Eastern,
Inc., are more imaginary than real. She alleges
that based on Exhs. "E," "E-1," "F" and "F-1" or
the brochures of Manila Gas Corporation and
Esso Standard Eastern, Inc., presented by
petitioner, the cup-shaped burner mouth and
threaded hole on the side are shown to be
similar to the utility model of private respondent.
The exhibits also show a detachable burner
mouth having a plurality of upwardly existing
undulations adopted to act as gas passage
when the cover is attached to the top of said
cup-shaped mouth all of which are the same as
those in the patented model. Petitioner also
denies as substantial difference the short
cylindrical tube of the burner mouth appearing
in the brochures of the burners being sold by
Manila Gas Corporation and the long cylindered
tube of private respondent's model of the gas
burner.
Petitioner argues that the actual demonstration
made during the hearing disclosed the
similarities in form, operation and mechanism
and parts between the utility model of private
respondent and those depicted in the
brochures. The findings of the Patent Office and
the Court of Appeals that the brochures of
Manila Gas Corporation and Esso Standard
Eastern, Inc., are undated cannot overcome the
fact of their circulation before private
respondent filed her application for utility model
patent. Petitioner thus asks this Court to take
judicial notice of the fact that Esso Standard
Eastern, Inc., disappeared before 1979 and
reappeared only during the Martial Law years
as Petrophil Corporation. Petitioner also
emphasizes that the brochures indicated the
telephone number of Manila Gas Corporation as
5-79-81 which is a five (5) numbered telephone
number existing before 1975 because
telephones in Metro Manila started to have six
(6) numbers only after that year.
Petitioner further contends that the utility model
of private respondent is absolutely similar to the
LPG burner being sold by petitioner in 1975 and
1976, and also to the "Ransome" burner
depicted in the old brochures of Manila Gas
Corporation and Esso Standard Eastern, Inc.,
fabricated by Ransome Torch and Burner
Company of Oakland, California, USA,
especially when considered through actual
physical examination, assembly and
disassembly of the models of petitioner and
private respondent. Petitioner faults the Court of
Appeals for disregarding the testimonies of Ong
Bun Tua and Fidel Francisco for their failure to
produce documents on the alleged importation
by Manila Gas Corporation of "Ransome"
burners in 1965 which had the same
configuration, form and mechanism as that of
the private respondent's patented model.
Finally, it is argued that the testimony of private
respondent's lone witness Rolando Madolaria
should not have been given weight by the
Patent Office and the Court of Appeals because
it contained mere after-thoughts and
pretensions.
We cannot sustain petitioner. Section 7 of RA
No. 165, as amended, which is the law on
patents, expressly provides
Sec. 7. Inventians patentable. Any invention of a
new and useful machine, manufactured product
or substance, process or an improvement of any
of the foregoing, shall be patentable.
Further, Sec. 55 of the same law provides
Sec. 55. Design patents and patents for utility
models. (a) Any new, original and ornamental
design for an article of manufacture and (b) any
new model of implements or tools or of any
industrial product or of part of the same, which
does not possess the quality of invention, but
which is of practical utility by reason of its form,
configuration, construction or composition, may
be protected by the author thereof, the former by
a patent for a design and the latter by a patent for
a utility model, in the same manner and subject to
the same provisions and requirements as relate
to patents for inventions insofar as they are
applicable except as otherwise herein provided.
The element of novelty is an essential requisite
of the patentability of an invention or discovery.
If a device or process has been known or used
by others prior to its invention or discovery by
the applicant, an application for a patent
therefor should be denied; and if the application
has been granted, the court, in a judicial
proceeding in which the validity of the patent is
drawn in question, will hold it void and
ineffective.
2
It has been repeatedly held that an
invention must possess the essential elements
of novelty, originality and precedence, and for
the patentee to be entitled to the protection the
invention must be new to the world.
3

In issuing Letters Patent No. UM-4609 to
Melecia Madolaria for an "LPG Burner" on 22
July 1981, the Philippine Patent Office found
her invention novel and patentable. The
issuance of such patent creates a presumption
which yields only to clear and cogent evidence
that the patentee was the original and first
inventor. The burden of proving want of novelty
is on him who avers it and the burden is a
heavy one which is met only by clear and
satisfactory proof which overcomes every
reasonable doubt.
4
Hence, a utility model shall
not be considered "new" if before the
application for a patent it has been publicly
known or publicly used in this country or has
been described in a printed publication or
publications circulated within the country, or if it
is substantially similar to any other utility model
so known, used or described within the country.

5

As found by the Director of Patents, the
standard of evidence sufficient to overcome the
presumption of legality of the issuance of UM-
4609 to respondent Madolaria was not legally
met by petitioner in her action for the
cancellation of the patent. Thus the Director of
Patents explained his reasons for the denial of
the petition to cancel private respondent's
patent
Scrutiny of Exhs. "D" and "E" readily reveals that
the utility model (LPG Burner) is not anticipated.
Not one of the various pictorial representations of
burners clearly and convincingly show that the
device presented therein is identical or
substantially identical in construction with the
aforesaid utility model. It is relevant and material
to state that in determining whether novelty or
newness is negatived by any prior art, only one
item of the prior art may be used at a time. For
anticipation to occur, the prior art must show that
each element is found either expressly or
described or under principles of inherency in a
single prior art reference or that the claimed
invention was probably known in a single prior art
device or practice. (Kalman v. Kimberly Clark,
218 USPQ 781, 789)
Even assuming gratia arguendi that the aforesaid
brochures do depict clearly on all fours each and
every element of the patented gas burner device
so that the prior art and the said patented device
become identical, although in truth they are not,
they cannot serve as anticipatory bars for the
reason that they are undated. The dates when
they were distributed to the public were not
indicated and, therefore, they are useless prior
art references.
xxx xxx xxx
Furthermore, and more significantly, the model
marked Exh. "K" does not show whether or not it
was manufactured and/or cast before the
application for the issuance of patent for the LPG
burner was filed by Melecia Madolaria.
With respect to Exh. "L," petitioner claimed it to
be her own model of LPG burner allegedly
manufactured sometime in 1974 or 1975 and sold
by her in the course of her business operation in
the name of Besco Metal Manufacturing, which
burner was denominated as "Ransome" burner
xxx xxx xxx
But a careful examination of Exh. "L" would show
that it does not bear the word "Ransome" which is
the burner referred to as the product being sold
by the Petitioner. This is not the way to prove that
Exh. "L" anticipates Letters Patent No. UM-4609
through Exhs. "C" and "D." Another factor
working against the Petitioner's claims is that an
examination of Exh. "L" would disclose that there
is no indication of the time or date it was
manufactured. This Office, thus has no way of
determining whether Exh. "L" was really
manufactured before the filing of the aforesaid
application which matured into Letters Patent No.
UM-4609, subject matter of the cancellation
proceeding.
At this juncture, it is worthwhile to point out that
petitioner also presented Exh. "M" which is the
alleged burner cup of an imported "Ransome"
burner. Again, this Office finds the same as
unreliable evidence to show anticipation. It
observed that there is no date indicated therein
as to when it was manufactured and/or imported
before the filing of the application for issuance of
patent of the subject utility model. What is more,
some component parts of Exh. "M" are missing,
as only the cup was presented so that the same
could not be compared to the utility model
(subject matter of this case) which consists of
several other detachable parts in combination to
form the complete LPG burner.
xxx xxx xxx
It must likewise be pointed out that Ong Bun Tua
testified on the brochures allegedly of Manila Gas
and of Esso Gasul marked Exhs. "E" and "F" and
on the alleged fact that Manila Gas Corporation
was importing from the United States "Ransome"
burners. But the same could not be given
credence since he himself admitted during cross-
examination that he has never been connected
with Manila Gas Corporation. He could not even
present any importation papers relating to the
alleged imported ransome burners. Neither did
his wife.
6

The above findings and conclusions of the
Director of Patent were reiterated and affirmed
by the Court of Appeals.
7

The validity of the patent issued by the
Philippine Patent Office in favor of private
respondent and the question over the
inventiveness, novelty and usefulness of the
improved model of the LPG burner are matters
which are better determined by the Patent
Office. The technical staff of the Philippine
Patent Office composed of experts in their field
has by the issuance of the patent in question
accepted private respondent's model of gas
burner as a discovery. There is a presumption
that the Office has correctly determined the
patentability of the model
8
and such action must
not be interfered with in the absence of
competent evidence to the contrary.
The rule is settled that the findings of fact of the
Director of Patents, especially when affirmed by
the Court of Appeals, are conclusive on this
Court when supported by substantial evidence.
Petitioner has failed to show compelling
grounds for a reversal of the findings and
conclusions of the Patent Office and the Court
of Appeals.
The alleged failure of the Director of Patents
and the Court of Appeals to accord evidentiary
weight to the testimonies of the witnesses of
petitioner showing anticipation is not a
justification to grant the petition. Pursuant to the
requirement of clear and convincing evidence to
overthrow the presumption of validity of a
patent, it has been held that oral testimony to
show anticipation is open to suspicion and if
uncorroborated by cogent evidence, as what
occurred in this case, it may be held insufficient.

9

Finally, petitioner would want this Court to
review all over again the evidence she
presented before the Patent Office. She argues
that contrary to the decision of the Patent Office
and the Court of Appeals, the evidence she
presented clearly proves that the patented
model of private respondent is no longer new
and, therefore, fraud attended the acquisition of
patent by private respondent.
It has been held that the question on priority of
invention is one of fact. Novelty and utility are
likewise questions of fact. The validity of patent
is decided on the basis of factual inquiries.
Whether evidence presented comes within the
scope of prior art is a factual issue to be
resolved by the Patent Office.
10
There is
question of fact when the doubt or difference
arises as to the truth or falsehood of alleged
facts or when the query necessarily invites
calibration of the whole evidence considering
mainly the credibility of witnesses, existence
and relevance of specific surrounding
circumstances, their relation to each other and
to the whole and the probabilities of the
situation.
11

Time and again we have held that it is not the
function of the Supreme Court to analyze or
weigh all over again the evidence and credibility
of witnesses presented before the lower tribunal
or office. The Supreme Court is not a trier of
facts. Its jurisdiction is limited to reviewing and
revising errors of law imputed to the lower court,
its findings of fact being conclusive and not
reviewable by this Court.
WHEREFORE, the Petition is DENIED. The
Decision of the Court of Appeals affirming that
of the Philippine Patent Office is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Vitug, Kapunan and Hermosisima, Jr., JJ.,
concur.
Footnotes
1 60 AmJur 2d 462.
2 40 AmJur 547.
3 Maguan v. Court of Appeals, No. L-
45101, 28 November 1986, 146 SCRA
107.
4 60 AmJur 2d 573.
5 Sec. 55. RA No. 165, as amended.
6 Rollo, pp. 143-167.
7 Id., pp. 204-214.
8 Aguas v. de Leon, No. L-32160, 30
January 1982, 111 SCRA 238.
9 60 AmJur 2d 573.
10 Id., p. 582.
11 Bernardo v. Court of Appeals, G.R.
No. 101680, 2 December 1992, 216
SCRA 224.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G. R. No. 126627 August 14, 2003
SMITH KLINE BECKMAN CORPORATION,
Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and
TRYCO PHARMA CORPORATION,
Respondents.
D E C I S I O N
CARPIO-MORALES, J .:
Smith Kline Beckman Corporation (petitioner), a
corporation existing by virtue of the laws of the state
of Pennsylvania, United States of America (U.S.)
and licensed to do business in the Philippines, filed
on October 8, 1976, as assignee, before the
Philippine Patent Office (now Bureau of Patents,
Trademarks and Technology Transfer) an application
for patent over an invention entitled "Methods and
Compositions for Producing Biphasic Parasiticide
Activity Using Methyl 5 Propylthio-2-
Benzimidazole Carbamate." The application bore
Serial No. 18989.
On September 24, 1981, Letters Patent No. 14561
1

for the aforesaid invention was issued to petitioner
for a term of seventeen (17) years.
The letters patent provides in its claims
2
that the
patented invention consisted of a new compound
named methyl 5 propylthio-2-benzimidazole
carbamate and the methods or compositions utilizing
the compound as an active ingredient in fighting
infections caused by gastrointestinal parasites and
lungworms in animals such as swine, sheep, cattle,
goats, horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a
domestic corporation that manufactures, distributes
and sells veterinary products including Impregon, a
drug that has Albendazole for its active ingredient
and is claimed to be effective against gastro-
intestinal roundworms, lungworms, tapeworms and
fluke infestation in carabaos, cattle and goats.
Petitioner sued private respondent for infringement
of patent and unfair competition before the Caloocan
City Regional Trial Court (RTC).
3
It claimed that its
patent covers or includes the substance Albendazole
such that private respondent, by manufacturing,
selling, using, and causing to be sold and used the
drug Impregon without its authorization, infringed
Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No.
14561
4
as well as committed unfair competition
under Article 189, paragraph 1 of the Revised Penal
Code and Section 29 of Republic Act No. 166 (The
Trademark Law) for advertising and selling as its
own the drug Impregon although the same contained
petitioners patented Albendazole.
5

On motion of petitioner, Branch 125 of the Caloocan
RTC issued a temporary restraining order against
private respondent enjoining it from committing acts
of patent infringement and unfair competition.
6
A
writ of preliminary injunction was subsequently
issued.
7

Private respondent in its Answer
8
averred that
Letters Patent No. 14561 does not cover the
substance Albendazole for nowhere in it does that
word appear; that even if the patent were to include
Albendazole, such substance is unpatentable; that the
Bureau of Food and Drugs allowed it to manufacture
and market Impregon with Albendazole as its known
ingredient; that there is no proof that it passed off in
any way its veterinary products as those of
petitioner; that Letters Patent No. 14561 is null and
void, the application for the issuance thereof having
been filed beyond the one year period from the filing
of an application abroad for the same invention
covered thereby, in violation of Section 15 of
Republic Act No. 165 (The Patent Law); and that
petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against
petitioner for such amount of actual damages as may
be proven; P1,000,000.00 in moral damages;
P300,000.00 in exemplary damages; and
P150,000.00 in attorneys fees.
Finding for private respondent, the trial court
rendered a Decision dated July 23, 1991,
9
the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing, plaintiffs
complaint should be, as it is hereby, DISMISSED.
The Writ of injunction issued in connection with the
case is hereby ordered DISSOLVED.
The Letters Patent No. 14561 issued by the then
Philippine Patents Office is hereby declared null and
void for being in violation of Sections 7, 9 and 15 of
the Patents Law.
Pursuant to Sec. 46 of the Patents Law, the Director
of Bureau of Patents is hereby directed to cancel
Letters Patent No. 14561 issued to the plaintiff and
to publish such cancellation in the Official Gazette.
Defendant Tryco Pharmaceutical Corporation is
hereby awarded P330,000.00 actual damages and
P100,000.00 attorneys fees as prayed for in its
counterclaim but said amount awarded to defendant
is subject to the lien on correct payment of filing
fees.
SO ORDERED. (Underscoring supplied)
On appeal, the Court of Appeals, by Decision of
April 21, 1995,
10
upheld the trial courts finding that
private respondent was not liable for any
infringement of the patent of petitioner in light of the
latters failure to show that Albendazole is the same
as the compound subject of Letters Patent No.
14561. Noting petitioners admission of the issuance
by the U.S. of a patent for Albendazole in the name
of Smith Kline and French Laboratories which was
petitioners former corporate name, the appellate
court considered the U.S. patent as implying that
Albendazole is different from methyl 5 propylthio-2-
benzimidazole carbamate. It likewise found that
private respondent was not guilty of deceiving the
public by misrepresenting that Impregon is its
product.
The appellate court, however, declared that Letters
Patent No. 14561 was not void as it sustained
petitioners explanation that Patent Application
Serial No. 18989 which was filed on October 8, 1976
was a divisional application of Patent Application
Serial No. 17280 filed on June 17, 1975 with the
Philippine Patent Office, well within one year from
petitioners filing on June 19, 1974 of its Foreign
Application Priority Data No. 480,646 in the U.S.
covering the same compound subject of Patent
Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of
Appeals thus ruled that Patent Application Serial No.
18989 was deemed filed on June 17, 1995 or still
within one year from the filing of a patent
application abroad in compliance with the one-year
rule under Section 15 of the Patent Law. And it
rejected the submission that the compound in Letters
Patent No. 14561 was not patentable, citing the
jurisprudentially established presumption that the
Patent Offices determination of patentability is
correct. Finally, it ruled that petitioner established
itself to be the one and the same assignee of the
patent notwithstanding changes in its corporate
name. Thus the appellate court disposed:
WHEREFORE, the judgment appealed from is
AFFIRMED with the MODIFICATION that the
orders for the nullification of Letters Patent No.
14561 and for its cancellation are deleted therefrom.
SO ORDERED.
Petitioners motion for reconsideration of the Court
of Appeals decision having been denied
11
the
present petition for review on certiorari
12
was filed,
assigning as errors the following:
I. THE COURT OF APPEALS GRAVELY
ERRED IN NOT FINDING THAT
ALBENDAZOLE, THE ACTIVE
INGREDIENT IN TRYCOS "IMPREGON"
DRUG, IS INCLUDED IN PETITIONERS
LETTERS PATENT NO. 14561, AND
THAT CONSEQUENTLY TRYCO IS
ANSWERABLE FOR PATENT
INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY
ERRED IN AWARDING TO PRIVATE
RESPONDENT TRYCO PHARMA
CORPORATION P330,000.00 ACTUAL
DAMAGES AND P100,000.00
ATTORNEYS FEES.
Petitioner argues that under the doctrine of
equivalents for determining patent infringement,
Albendazole, the active ingredient it alleges was
appropriated by private respondent for its drug
Impregon, is substantially the same as methyl 5
propylthio-2-benzimidazole carbamate covered by its
patent since both of them are meant to combat worm
or parasite infestation in animals. It cites the
"unrebutted" testimony of its witness Dr. Godofredo
C. Orinion (Dr. Orinion) that the chemical formula in
Letters Patent No. 14561 refers to the compound
Albendazole. Petitioner adds that the two substances
substantially do the same function in substantially
the same way to achieve the same results, thereby
making them truly identical. Petitioner thus submits
that the appellate court should have gone beyond the
literal wordings used in Letters Patent No. 14561,
beyond merely applying the literal infringement test,
for in spite of the fact that the word Albendazole
does not appear in petitioners letters patent, it has
ably shown by evidence its sameness with methyl 5
propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with
the Philippine Patent Office on account of which it
was granted Letters Patent No. 14561 was merely a
divisional application of a prior application in the U.
S. which granted a patent for Albendazole. Hence,
petitioner concludes that both methyl 5 propylthio-2-
benzimidazole carbamate and the U.S.-patented
Albendazole are dependent on each other and
mutually contribute to produce a single result,
thereby making Albendazole as much a part of
Letters Patent No. 14561 as the other substance is.
Petitioner concedes in its Sur-Rejoinder
13
that
although methyl 5 propylthio-2-benzimidazole
carbamate is not identical with Albendazole, the
former is an improvement or improved version of the
latter thereby making both substances still
substantially the same.
With respect to the award of actual damages in favor
of private respondent in the amount of P330,000.00
representing lost profits, petitioner assails the same
as highly speculative and conjectural, hence, without
basis. It assails too the award of P100,000.00 in
attorneys fees as not falling under any of the
instances enumerated by law where recovery of
attorneys fees is allowed.
In its Comment,
14
private respondent contends that
application of the doctrine of equivalents would not
alter the outcome of the case, Albendazole and
methyl 5 propylthio-2-benzimidazole carbamate
being two different compounds with different
chemical and physical properties. It stresses that the
existence of a separate U.S. patent for Albendazole
indicates that the same and the compound in Letters
Patent No. 14561 are different from each other; and
that since it was on account of a divisional
application that the patent for methyl 5 propylthio-2-
benzimidazole carbamate was issued, then, by
definition of a divisional application, such a
compound is just one of several independent
inventions alongside Albendazole under petitioners
original patent application.
As has repeatedly been held, only questions of law
may be raised in a petition for review on certiorari
before this Court. Unless the factual findings of the
appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of
discretion, or contrary to the findings culled by the
court of origin,
15
this Court does not review them.
From an examination of the evidence on record, this
Court finds nothing infirm in the appellate courts
conclusions with respect to the principal issue of
whether private respondent committed patent
infringement to the prejudice of petitioner.
The burden of proof to substantiate a charge for
patent infringement rests on the plaintiff.
16
In the
case at bar, petitioners evidence consists primarily
of its Letters Patent No. 14561, and the testimony of
Dr. Orinion, its general manager in the Philippines
for its Animal Health Products Division, by which it
sought to show that its patent for the compound
methyl 5 propylthio-2-benzimidazole carbamate also
covers the substance Albendazole.
From a reading of the 9 claims of Letters Patent No.
14561 in relation to the other portions thereof, no
mention is made of the compound Albendazole. All
that the claims disclose are: the covered invention,
that is, the compound methyl 5 propylthio-2-
benzimidazole carbamate; the compounds being
anthelmintic but nontoxic for animals or its ability to
destroy parasites without harming the host animals;
and the patented methods, compositions or
preparations involving the compound to maximize its
efficacy against certain kinds of parasites infecting
specified animals.
When the language of its claims is clear and distinct,
the patentee is bound thereby and may not claim
anything beyond them.
17
And so are the courts bound
which may not add to or detract from the claims
matters not expressed or necessarily implied, nor
may they enlarge the patent beyond the scope of that
which the inventor claimed and the patent office
allowed, even if the patentee may have been entitled
to something more than the words it had chosen
would include.
18

It bears stressing that the mere absence of the word
Albendazole in Letters Patent No. 14561 is not
determinative of Albendazoles non-inclusion in the
claims of the patent. While Albendazole is
admittedly a chemical compound that exists by a
name different from that covered in petitioners
letters patent, the language of Letter Patent No.
14561 fails to yield anything at all regarding
Albendazole. And no extrinsic evidence had been
adduced to prove that Albendazole inheres in
petitioners patent in spite of its omission therefrom
or that the meaning of the claims of the patent
embraces the same.
While petitioner concedes that the mere literal
wordings of its patent cannot establish private
respondents infringement, it urges this Court to
apply the doctrine of equivalents.
The doctrine of equivalents provides that an
infringement also takes place when a device
appropriates a prior invention by incorporating its
innovative concept and, although with some
modification and change, performs substantially the
same function in substantially the same way to
achieve substantially the same result.
19
Yet again, a
scrutiny of petitioners evidence fails to convince
this Court of the substantial sameness of petitioners
patented compound and Albendazole. While both
compounds have the effect of neutralizing parasites
in animals, identity of result does not amount to
infringement of patent unless Albendazole operates
in substantially the same way or by substantially the
same means as the patented compound, even though
it performs the same function and achieves the same
result.
20
In other words, the principle or mode of
operation must be the same or substantially the
same.
21

The doctrine of equivalents thus requires satisfaction
of the function-means-and-result test, the patentee
having the burden to show that all three components
of such equivalency test are met.
22

As stated early on, petitioners evidence fails to
explain how Albendazole is in every essential detail
identical to methyl 5 propylthio-2-benzimidazole
carbamate. Apart from the fact that Albendazole is
an anthelmintic agent like methyl 5 propylthio-2-
benzimidazole carbamate, nothing more is asserted
and accordingly substantiated regarding the method
or means by which Albendazole weeds out parasites
in animals, thus giving no information on whether
that method is substantially the same as the manner
by which petitioners compound works. The
testimony of Dr. Orinion lends no support to
petitioners cause, he not having been presented or
qualified as an expert witness who has the
knowledge or expertise on the matter of chemical
compounds.
As for the concept of divisional applications
proffered by petitioner, it comes into play when two
or more inventions are claimed in a single
application but are of such a nature that a single
patent may not be issued for them.
23
The applicant
thus is required "to divide," that is, to limit the
claims to whichever invention he may elect, whereas
those inventions not elected may be made the subject
of separate applications which are called "divisional
applications."
24
What this only means is that
petitioners methyl 5 propylthio-2-benzimidazole
carbamate is an invention distinct from the other
inventions claimed in the original application divided
out, Albendazole being one of those other
inventions. Otherwise, methyl 5 propylthio-2-
benzimidazole carbamate would not have been the
subject of a divisional application if a single patent
could have been issued for it as well as
Albendazole.1wphi1
The foregoing discussions notwithstanding, this
Court does not sustain the award of actual damages
and attorneys fees in favor of private respondent.
The claimed actual damages of P330,000.00
representing lost profits or revenues incurred by
private respondent as a result of the issuance of the
injunction against it, computed at the rate of 30% of
its alleged P100,000.00 monthly gross sales for
eleven months, were supported by the testimonies of
private respondents President
25
and Executive Vice-
President that the average monthly sale of Impregon
was P100,000.00 and that sales plummeted to zero
after the issuance of the injunction.
26
While
indemnification for actual or compensatory damages
covers not only the loss suffered (damnum
emergens) but also profits which the obligee failed to
obtain (lucrum cessans or ganacias frustradas), it is
necessary to prove the actual amount of damages
with a reasonable degree of certainty based on
competent proof and on the best evidence obtainable
by the injured party.
27
The testimonies of private
respondents officers are not the competent proof or
best evidence obtainable to establish its right to
actual or compensatory damages for such damages
also require presentation of documentary evidence to
substantiate a claim therefor.
28

In the same vein, this Court does not sustain the
grant by the appellate court of attorneys fees to
private respondent anchored on Article 2208 (2) of
the Civil Code, private respondent having been
allegedly forced to litigate as a result of petitioners
suit. Even if a claimant is compelled to litigate with
third persons or to incur expenses to protect its
rights, still attorneys fees may not be awarded
where no sufficient showing of bad faith could be
reflected in a partys persistence in a case other than
an erroneous conviction of the righteousness of his
cause.
29
There exists no evidence on record
indicating that petitioner was moved by malice in
suing private respondent.
This Court, however, grants private respondent
temperate or moderate damages in the amount of
P20,000.00 which it finds reasonable under the
circumstances, it having suffered some pecuniary
loss the amount of which cannot, from the nature of
the case, be established with certainty.
30

WHEREFORE, the assailed decision of the Court
of Appeals is hereby AFFIRMED with
MODIFICATION. The award of actual or
compensatory damages and attorneys fees to private
respondent, Tryco Pharma Corporation, is
DELETED; instead, it is hereby awarded the amount
of P20,000.00 as temperate or moderate damages.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez,
and Corona, JJ., concur.
G.R. No. 114508 November 19, 1999
PRIBHDAS J. MIRPURI, petitioner,
vs.
COURT OF APPEALS, DIRECTOR OF
PATENTS and the BARBIZON
CORPORATION, respondents.

PUNO, J .:
The Convention of Paris for the Protection of
Industrial Property is a multi-lateral treaty which
the Philippines bound itself to honor and
enforce in this country. As to whether or not the
treaty affords protection to a foreign corporation
against a Philippine applicant for the registration
of a similar trademark is the principal issue in
this case.
On June 15, 1970, one Lolita Escobar, the
predecessor-in-interest of petitioner Pribhdas J.
Mirpuri, filed an application with the Bureau of
Patents for the registration of the trademark
"Barbizon" for use in brassieres and ladies
undergarments. Escobar alleged that she had
been manufacturing and selling these products
under the firm name "L & BM Commercial"
since March 3, 1970.
Private respondent Barbizon Corporation, a
corporation organized and doing business
under the laws of New York, U.S.A., opposed
the application. It claimed that:
The mark BARBIZON of respondent-
applicant is confusingly similar to the
trademark BARBIZON which opposer
owns and has not abandoned.
That opposer will be damaged by the
registration of the mark BARBIZON and
its business reputation and goodwill will
suffer great and irreparable injury.
That the respondent-applicant's use of
the said mark BARBIZON which
resembles the trademark used and
owned by opposer, constitutes an
unlawful appropriation of a mark
previously used in the Philippines and not
abandoned and therefore a statutory
violation of Section 4 (d) of Republic Act
No. 166, as amended.
1

This was docketed as Inter Partes Case
No. 686 (IPC No. 686). After filing of the
pleadings, the parties submitted the case
for decision.
On June 18, 1974, the Director of Patents
rendered judgment dismissing the opposition
and giving due course to Escobar's application,
thus:
WHEREFORE, the opposition should be,
as it is hereby, DISMISSED. Accordingly,
Application Serial No. 19010 for the
registration of the trademark BARBIZON,
of respondent Lolita R. Escobar, is given
due course.
IT IS SO ORDERED.
2

This decision became final and on
September 11, 1974, Lolita Escobar was
issued a certificate of registration for the
trademark "Barbizon." The trademark
was "for use in "brassieres and lady's
underwear garments like panties."
3

Escobar later assigned all her rights and
interest over the trademark to petitioner
Pribhdas J. Mirpuri who, under his firm name
then, the "Bonito Enterprises," was the sole and
exclusive distributor of Escobar's "Barbizon"
products.
In 1979, however, Escobar failed to file with the
Bureau of Patents the Affidavit of Use of the
trademark required under Section 12 of
Republic Act (R.A.) No. 166, the Philippine
Trademark Law. Due to this failure, the Bureau
of Patents cancelled Escobar's certificate of
registration.
On May 27, 1981, Escobar reapplied for
registration of the cancelled trademark. Mirpuri
filed his own application for registration of
Escobar's trademark. Escobar later assigned
her application to herein petitioner and this
application was opposed by private respondent.
The case was docketed as Inter Partes Case
No. 2049 (IPC No. 2049).
In its opposition, private respondent alleged
that:
(a) The Opposer has adopted the
trademark BARBIZON (word), sometime
in June 1933 and has then used it on
various kinds of wearing apparel. On
August 14, 1934, Opposer obtained from
the United States Patent Office a more
recent registration of the said mark under
Certificate of Registration No. 316,161.
On March 1, 1949, Opposer obtained
from the United States Patent Office a
more recent registration for the said
trademark under Certificate of
Registration No. 507,214, a copy of
which is herewith attached as Annex "A."
Said Certificate of Registration covers the
following goods wearing apparel:
robes, pajamas, lingerie, nightgowns and
slips;
(b) Sometime in March 1976, Opposer
further adopted the trademark
BARBIZON and Bee design and used the
said mark in various kinds of wearing
apparel. On March 15, 1977, Opposer
secured from the United States Patent
Office a registration of the said mark
under Certificate of Registration No.
1,061,277, a copy of which is herein
enclosed as Annex "B." The said
Certificate of Registration covers the
following goods: robes, pajamas, lingerie,
nightgowns and slips;
(c) Still further, sometime in 1961,
Opposer adopted the trademark
BARBIZON and a Representation of a
Woman and thereafter used the said
trademark on various kinds of wearing
apparel. Opposer obtained from the
United States Patent Office registration of
the said mark on April 5, 1983 under
Certificate of Registration No. 1,233,666
for the following goods: wearing apparel:
robes, pajamas, nightgowns and lingerie.
A copy of the said certificate of
registration is herewith enclosed as
Annex "C."
(d) All the above registrations are
subsisting and in force and Opposer has
not abandoned the use of the said
trademarks. In fact, Opposer, through a
wholly-owned Philippine subsidiary, the
Philippine Lingerie Corporation, has been
manufacturing the goods covered by said
registrations and selling them to various
countries, thereby earning valuable
foreign exchange for the country. As a
result of respondent-applicant's
misappropriation of Opposer's
BARBIZON trademark, Philippine
Lingerie Corporation is prevented from
selling its goods in the local market, to
the damage and prejudice of Opposer
and its wholly-owned subsidiary.
(e) The Opposer's goods bearing the
trademark BARBIZON have been used in
many countries, including the Philippines,
for at least 40 years and has enjoyed
international reputation and good will for
their quality. To protect its registrations in
countries where the goods covered by
the registrations are being sold, Opposer
has procured the registration of the
trademark BARBIZON in the following
countries: Australia, Austria, Abu Dhabi,
Argentina, Belgium, Bolivia, Bahrain,
Canada, Chile, Colombia, Denmark,
Ecuador, France, West Germany,
Greece, Guatemala, Hongkong,
Honduras, Italy, Japan, Jordan, Lebanon,
Mexico, Morocco, Panama, New
Zealand, Norway, Sweden, Switzerland,
Syria, El Salvador, South Africa, Zambia,
Egypt, and Iran, among others;
(f) To enhance its international reputation
for quality goods and to further promote
goodwill over its name, marks and
products, Opposer has extensively
advertised its products, trademarks and
name in various publications which are
circulated in the United States and many
countries around the world, including the
Philippines;
(g) The trademark BARBIZON was
fraudulently registered in the Philippines
by one Lolita R. Escobar under
Registration No. 21920, issued on
September 11, 1974, in violation of
Article 189 (3) of the Revised Penal Code
and Section 4 (d) of the Trademark Law.
Herein respondent applicant acquired by
assignment the "rights" to the said mark
previously registered by Lolita Escobar,
hence respondent-applicant's title is
vitiated by the same fraud and criminal
act. Besides, Certificate of Registration
No. 21920 has been cancelled for failure
of either Lolita Escobar or herein
respondent-applicant, to seasonably file
the statutory affidavit of use. By applying
for a re-registration of the mark
BARBIZON subject of this opposition,
respondent-applicant seeks to perpetuate
the fraud and criminal act committed by
Lolita Escobar.
(h) Opposer's BARBIZON as well as its
BARBIZON and Bee Design and
BARBIZON and Representation of a
Woman trademarks qualify as well-known
trademarks entitled to protection under
Article 6bis of the Convention of Paris for
the Protection of Industrial Property and
further amplified by the Memorandum of
the Minister of Trade to the Honorable
Director of Patents dated October 25,
1983 [sic],
4
Executive Order No. 913
dated October 7, 1963 and the
Memorandum of the Minister of Trade
and Industry to the Honorable Director of
Patents dated October 25, 1983.
(i) The trademark applied for by
respondent applicant is identical to
Opposer's BARBIZON trademark and
constitutes the dominant part of
Opposer's two other marks namely,
BARBIZON and Bee design and
BARBIZON and a Representation of a
Woman. The continued use by
respondent-applicant of Opposer's
trademark BARBIZON on goods
belonging to Class 25 constitutes a clear
case of commercial and criminal piracy
and if allowed registration will violate not
only the Trademark Law but also Article
189 of the Revised Penal Code and the
commitment of the Philippines to an
international treaty.
5

Replying to private respondent's
opposition, petitioner raised the defense
of res judicata.
On March 2, 1982, Escobar assigned to
petitioner the use of the business name
"Barbizon International." Petitioner registered
the name with the Department of Trade and
Industry (DTI) for which a certificate of
registration was issued in 1987.
Forthwith, private respondent filed before the
Office of Legal Affairs of the DTI a petition for
cancellation of petitioner's business name.
On November 26, 1991, the DTI, Office of Legal
Affairs, cancelled petitioner's certificate of
registration, and declared private respondent
the owner and prior user of the business name
"Barbizon International." Thus:
WHEREFORE, the petition is hereby
GRANTED and petitioner is declared the
owner and prior user of the business
name "BARBIZON INTERNATIONAL"
under Certificate of Registration No. 87-
09000 dated March 10, 1987 and issued
in the name of respondent, is [sic] hereby
ordered revoked and cancelled. . . . .
6

Meanwhile, in IPC No. 2049, the evidence of
both parties were received by the Director of
Patents. On June 18, 1992, the Director
rendered a decision declaring private
respondent's opposition barred by res judicata
and giving due course to petitioner's application
for registration, to wit:
WHEREFORE, the present Opposition in
Inter Partes Case No. 2049 is hereby
DECLARED BARRED by res judicata
and is hereby DISMISSED. Accordingly,
Application Serial No. 45011 for
trademark BARBIZON filed by Pribhdas
J. Mirpuri is GIVEN DUE COURSE.
SO ORDERED.
7

Private respondent questioned this decision
before the Court of Appeals in CA-G.R. SP No.
28415. On April 30, 1993, the Court of Appeals
reversed the Director of Patents finding that IPC
No. 686 was not barred by judgment in IPC No.
2049 and ordered that the case be remanded to
the Bureau of Patents for further proceedings,
viz:
WHEREFORE, the appealed Decision
No. 92-13 dated June 18, 1992 of the
Director of Patents in Inter Partes Case
No. 2049 is hereby SET ASIDE; and the
case is hereby remanded to the Bureau
of Patents for further proceedings, in
accordance with this pronouncement. No
costs.
8

In a Resolution dated March 16, 1994,
the Court of Appeals denied
reconsideration of its decision.
9
Hence,
this recourse.
Before us, petitioner raises the following issues:
1. WHETHER OR NOT THE DECISION
OF THE DIRECTOR OF PATENTS IN
INTER PARTES CASE NO. 686
RENDERED ON JUNE 18, 1974, ANNEX
C HEREOF, CONSTITUTED RES
JUDICATA IN SO FAR AS THE CASE
BEFORE THE DIRECTOR OF PATENTS
IS CONCERNED;
2. WHETHER OR NOT THE DIRECTOR
OF PATENTS CORRECTLY APPLIED
THE PRINCIPLE OF RES JUDICATA IN
DISMISSING PRIVATE RESPONDENT
BARBIZON'S OPPOSITION TO
PETITIONER'S APPLICATION FOR
REGISTRATION FOR THE
TRADEMARK BARBIZON, WHICH HAS
SINCE RIPENED TO CERTIFICATE OF
REGISTRATION NO. 53920 ON
NOVEMBER 16, 1992;
3. WHETHER OR NOT THE REQUISITE
THAT A "JUDGMENT ON THE MERITS"
REQUIRED A "HEARING WHERE
BOTH PARTIES ARE SUPPOSED TO
ADDUCE EVIDENCE" AND WHETHER
THE JOINT SUBMISSION OF THE
PARTIES TO A CASE ON THE BASIS
OF THEIR RESPECTIVE PLEADINGS
WITHOUT PRESENTING TESTIMONIAL
OR DOCUMENTARY EVIDENCE FALLS
WITHIN THE MEANING OF
"JUDGMENT ON THE MERITS" AS ONE
OF THE REQUISITES TO CONSTITUTE
RES JUDICATA;
4. WHETHER A DECISION OF THE
DEPARTMENT OF TRADE AND
INDUSTRY CANCELLING
PETITIONER'S FIRM NAME
"BARBIZON INTERNATIONAL" AND
WHICH DECISION IS STILL PENDING
RECONSIDERATION NEVER
OFFERED IN EVIDENCE BEFORE THE
DIRECTOR OF PATENTS IN INTER
PARTES CASE NO. 2049 HAS THE
RIGHT TO DECIDE SUCH
CANCELLATION NOT ON THE BASIS
OF THE BUSINESS NAME LAW (AS
IMPLEMENTED BY THE BUREAU OF
DOMESTIC TRADE) BUT ON THE
BASIS OF THE PARIS CONVENTION
AND THE TRADEMARK LAW (R.A. 166)
WHICH IS WITHIN THE ORIGINAL AND
EXCLUSIVE JURISDICTION OF THE
DIRECTOR OF PATENTS.
10

Before ruling on the issues of the case, there is
need for a brief background on the function and
historical development of trademarks and
trademark law.
A "trademark" is defined under R.A. 166, the
Trademark Law, as including "any word, name,
symbol, emblem, sign or device or any
combination thereof adopted and used by a
manufacturer or merchant to identify his goods
and distinguish them from those manufactured,
sold or dealt in by others.
11
This definition has
been simplified in R.A. No. 8293, the Intellectual
Property Code of the Philippines, which defines
a "trademark" as "any visible sign capable of
distinguishing goods."
12
In Philippine
jurisprudence, the function of a trademark is to
point out distinctly the origin or ownership of the
goods to which it is affixed; to secure to him,
who has been instrumental in bringing into the
market a superior article of merchandise, the
fruit of his industry and skill; to assure the public
that they are procuring the genuine article; to
prevent fraud and imposition; and to protect the
manufacturer against substitution and sale of an
inferior and different article as his product.
13

Modern authorities on trademark law view
trademarks as performing three distinct
functions: (1) they indicate origin or ownership
of the articles to which they are attached; (2)
they guarantee that those articles come up to a
certain standard of quality; and (3) they
advertise the articles they symbolize.
14

Symbols have been used to identify the
ownership or origin of articles for several
centuries.
15
As early as 5,000 B.C., markings
on pottery have been found by archaeologists.
Cave drawings in southwestern Europe show
bison with symbols on their flanks.
16

Archaeological discoveries of ancient Greek
and Roman inscriptions on sculptural works,
paintings, vases, precious stones, glassworks,
bricks, etc. reveal some features which are
thought to be marks or symbols. These marks
were affixed by the creator or maker of the
article, or by public authorities as indicators for
the payment of tax, for disclosing state
monopoly, or devices for the settlement of
accounts between an entrepreneur and his
workmen.
17

In the Middle Ages, the use of many kinds of
marks on a variety of goods was commonplace.
Fifteenth century England saw the compulsory
use of identifying marks in certain trades. There
were the baker's mark on bread, bottlemaker's
marks, smith's marks, tanner's marks,
watermarks on paper, etc.
18
Every guild had its
own mark and every master belonging to it had
a special mark of his own. The marks were not
trademarks but police marks compulsorily
imposed by the sovereign to let the public know
that the goods were not "foreign" goods
smuggled into an area where the guild had a
monopoly, as well as to aid in tracing defective
work or poor craftsmanship to the artisan.
19
For
a similar reason, merchants also used
merchants' marks. Merchants dealt in goods
acquired from many sources and the marks
enabled them to identify and reclaim their goods
upon recovery after shipwreck or piracy.
20

With constant use, the mark acquired popularity
and became voluntarily adopted. It was not
intended to create or continue monopoly but to
give the customer an index or guarantee of
quality.
21
It was in the late 18th century when
the industrial revolution gave rise to mass
production and distribution of consumer goods
that the mark became an important
instrumentality of trade and commerce.
22
By
this time, trademarks did not merely identify the
goods; they also indicated the goods to be of
satisfactory quality, and thereby stimulated
further purchases by the consuming public.
23

Eventually, they came to symbolize the goodwill
and business reputation of the owner of the
product and became a property right protected
by law.
24
The common law developed the
doctrine of trademarks and tradenames "to
prevent a person from palming off his goods as
another's, from getting another's business or
injuring his reputation by unfair means, and,
from defrauding the public."
25
Subsequently,
England and the United States enacted national
legislation on trademarks as part of the law
regulating unfair trade.
26
It became the right of
the trademark owner to exclude others from the
use of his mark, or of a confusingly similar mark
where confusion resulted in diversion of trade or
financial injury. At the same time, the trademark
served as a warning against the imitation or
faking of products to prevent the imposition of
fraud upon the public.
27

Today, the trademark is not merely a symbol of
origin and goodwill; it is often the most effective
agent for the actual creation and protection of
goodwill. It imprints upon the public mind an
anonymous and impersonal guaranty of
satisfaction, creating a desire for further
satisfaction. In other words, the mark actually
sells the goods.
28
The mark has become the
"silent salesman," the conduit through which
direct contact between the trademark owner
and the consumer is assured. It has invaded
popular culture in ways never anticipated that it
has become a more convincing selling point
than even the quality of the article to which it
refers.
29
In the last half century, the
unparalleled growth of industry and the rapid
development of communications technology
have enabled trademarks, tradenames and
other distinctive signs of a product to penetrate
regions where the owner does not actually
manufacture or sell the product itself. Goodwill
is no longer confined to the territory of actual
market penetration; it extends to zones where
the marked article has been fixed in the public
mind through advertising.
30
Whether in the
print, broadcast or electronic communications
medium, particularly on the Internet,
31

advertising has paved the way for growth and
expansion of the product by creating and
earning a reputation that crosses over borders,
virtually turning the whole world into one vast
marketplace.
This is the mise-en-scene of the present
controversy. Petitioner brings this action
claiming that "Barbizon" products have been
sold in the Philippines since 1970. Petitioner
developed this market by working long hours
and spending considerable sums of money on
advertisements and promotion of the trademark
and its products. Now, almost thirty years later,
private respondent, a foreign corporation,
"swaggers into the country like a conquering
hero," usurps the trademark and invades
petitioner's market.
32
Justice and fairness
dictate that private respondent be prevented
from appropriating what is not its own. Legally,
at the same time, private respondent is barred
from questioning petitioner's ownership of the
trademark because of res judicata.
33

Literally, res judicata means a matter adjudged,
a thing judicially acted upon or decided; a thing
or matter settled by judgment.
34
In res judicata,
the judgment in the first action is considered
conclusive as to every matter offered and
received therein, as to any other admissible
matter which might have been offered for that
purpose, and all other matters that could have
been adjudged therein.
35
Res judicata is an
absolute bar to a subsequent action for the
same cause; and its requisites are: (a) the
former judgment or order must be final; (b) the
judgment or order must be one on the merits;
(c) it must have been rendered by a court
having jurisdiction over the subject matter and
parties; (d) there must be between the first and
second actions, identity of parties, of subject
matter and of causes of action.
36

The Solicitor General, on behalf of respondent
Director of Patents, has joined cause with
petitioner. Both claim that all the four elements
of res judicata have been complied with: that
the judgment in IPC No. 686 was final and was
rendered by the Director of Patents who had
jurisdiction over the subject matter and parties;
that the judgment in IPC No. 686 was on the
merits; and that the lack of a hearing was
immaterial because substantial issues were
raised by the parties and passed upon by the
Director of Patents.
37

The decision in IPC No. 686 reads as follows:
xxx xxx xxx.
Neither party took testimony nor adduced
documentary evidence. They submitted
the case for decision based on the
pleadings which, together with the
pertinent records, have all been carefully
considered.
Accordingly, the only issue for my
disposition is whether or not the herein
opposer would probably be damaged by
the registration of the trademark
BARBIZON sought by the respondent-
applicant on the ground that it so
resembles the trademark BARBIZON
allegedly used and owned by the former
to be "likely to cause confusion, mistake
or to deceive purchasers."
On record, there can be no doubt that
respondent-applicant's sought-to-be-
registered trademark BARBIZON is
similar, in fact obviously identical, to
opposer's alleged trademark BARBIZON,
in spelling and pronunciation. The only
appreciable but very negligible difference
lies in their respective appearances or
manner of presentation. Respondent-
applicant's trademark is in bold letters
(set against a black background), while
that of the opposer is offered in stylish
script letters.
It is opposer's assertion that its
trademark BARBIZON has been used in
trade or commerce in the Philippines
prior to the date of application for the
registration of the identical mark
BARBIZON by the respondent-applicant.
However, the allegation of facts in
opposer's verified notice of opposition is
devoid of such material information. In
fact, a reading of the text of said verified
opposition reveals an apparent, if not
deliberate, omission of the date (or year)
when opposer's alleged trademark
BARBIZON was first used in trade in the
Philippines (see par. No. 1, p. 2, Verified
Notice of Opposition, Rec.). Thus, it
cannot here and now be ascertained
whether opposer's alleged use of the
trademark BARBIZON could be prior to
the use of the identical mark by the
herein respondent-applicant, since the
opposer attempted neither to substantiate
its claim of use in local commerce with
any proof or evidence. Instead, the
opposer submitted the case for decision
based merely on the pleadings.
On the other hand, respondent-applicant
asserted in her amended application for
registration that she first used the
trademark BARBIZON for brassiere (or
"brasseire") and ladies underwear
garments and panties as early as March
3, 1970. Be that as it may, there being no
testimony taken as to said date of first
use, respondent-applicant will be limited
to the filing date, June 15, 1970, of her
application as the date of first use (Rule
173, Rules of Practice in Trademark
Cases).
From the foregoing, I conclude that the
opposer has not made out a case of
probable damage by the registration of
the respondent-applicant's mark
BARBIZON.
WHEREFORE, the opposition should be,
as it is hereby, DISMISSED. Accordingly,
Application Serial No. 19010, for the
registration of the trademark BARBIZON
of respondent Lolita R. Escobar, is given
due course.
38

The decision in IPC No. 686 was a judgment on
the merits and it was error for the Court of
Appeals to rule that it was not. A judgment is on
the merits when it determines the rights and
liabilities of the parties based on the disclosed
facts, irrespective of formal, technical or dilatory
objections.
39
It is not necessary that a trial
should have been conducted. If the court's
judgment is general, and not based on any
technical defect or objection, and the parties
had a full legal opportunity to be heard on their
respective claims and contentions, it is on the
merits although there was no actual hearing or
arguments on the facts of the case.
40
In the
case at bar, the Director of Patents did not
dismiss private respondent's opposition on a
sheer technicality. Although no hearing was
conducted, both parties filed their respective
pleadings and were given opportunity to present
evidence. They, however, waived their right to
do so and submitted the case for decision
based on their pleadings. The lack of evidence
did not deter the Director of Patents from ruling
on the case, particularly on the issue of prior
use, which goes into the very substance of the
relief sought by the parties. Since private
respondent failed to prove prior use of its
trademark, Escobar's claim of first use was
upheld.
The judgment in IPC No. 686 being on the
merits, petitioner and the Solicitor General
allege that IPC No. 686 and IPC No. 2049 also
comply with the fourth requisite of res judicata,
i.e., they involve the same parties and the same
subject matter, and have identical causes of
action.
Undisputedly, IPC No. 686 and IPC No. 2049
involve the same parties and the same subject
matter. Petitioner herein is the assignee of
Escobar while private respondent is the same
American corporation in the first case. The
subject matter of both cases is the trademark
"Barbizon." Private respondent counter-argues,
however, that the two cases do not have
identical causes of action. New causes of action
were allegedly introduced in IPC No. 2049, such
as the prior use and registration of the
trademark in the United States and other
countries worldwide, prior use in the Philippines,
and the fraudulent registration of the mark in
violation of Article 189 of the Revised Penal
Code. Private respondent also cited protection
of the trademark under the Convention of Paris
for the Protection of Industrial Property,
specifically Article 6bis thereof, and the
implementation of Article 6bis by two
Memoranda dated November 20, 1980 and
October 25, 1983 of the Minister of Trade and
Industry to the Director of Patents, as well as
Executive Order (E.O.) No. 913.
The Convention of Paris for the Protection of
Industrial Property, otherwise known as the
Paris Convention, is a multilateral treaty that
seeks to protect industrial property consisting of
patents, utility models, industrial designs,
trademarks, service marks, trade names and
indications of source or appellations of origin,
and at the same time aims to repress unfair
competition.
41
The Convention is essentially a
compact among various countries which, as
members of the Union, have pledged to accord
to citizens of the other member countries
trademark and other rights comparable to those
accorded their own citizens by their domestic
laws for an effective protection against unfair
competition.
42
In short, foreign nationals are to
be given the same treatment in each of the
member countries as that country makes
available to its own citizens.
43
Nationals of the
various member nations are thus assured of a
certain minimum of international protection of
their industrial property.
44

The Convention was first signed by eleven
countries in Paris on March 20, 1883.
45
It
underwent several revisions at Brussels in
1900, at Washington in 1911, at The Hague in
1925, at London in 1934, at Lisbon in 1958,
46

and at Stockholm in 1967. Both the Philippines
and the United States of America, herein private
respondent's country, are signatories to the
Convention. The United States acceded on May
30, 1887 while the Philippines, through its
Senate, concurred on May 10, 1965.
47
The
Philippines' adhesion became effective on
September 27, 1965,
48
and from this date, the
country obligated itself to honor and enforce the
provisions of the Convention.
49

In the case at bar, private respondent anchors
its cause of action on the first paragraph of
Article 6bis of the Paris Convention which reads
as follows:
Article 6bis
(1) The countries of the Union undertake,
either administratively if their legislation
so permits, or at the request of an
interested party, to refuse or to cancel the
registration and to prohibit the use, of a
trademark which constitutes a
reproduction, an imitation, or a
translation, liable to create confusion, of a
mark considered by the competent
authority of the country of registration or
use to be well-known in that country as
being already the mark of a person
entitled to the benefits of this Convention
and used for identical or similar goods.
These provisions shall also apply when
the essential part of the mark constitutes
a reproduction of any such well-known
mark or an imitation liable to create
confusion therewith.
(2) A period of at least five years from the
date of registration shall be allowed for
seeking the cancellation of such a mark.
The countries of the Union may provide
for a period within which the prohibition of
use must be sought.
(3) No time limit shall be fixed for seeking
the cancellation or the prohibition of the
use of marks registered or used in bad
faith.
50

This Article governs protection of well-
known trademarks. Under the first
paragraph, each country of the Union
bound itself to undertake to refuse or
cancel the registration, and prohibit the
use of a trademark which is a
reproduction, imitation or translation, or
any essential part of which trademark
constitutes a reproduction, liable to
create confusion, of a mark considered
by the competent authority of the country
where protection is sought, to be well-
known in the country as being already
the mark of a person entitled to the
benefits of the Convention, and used for
identical or similar goods.
Art. 6bis was first introduced at The Hague in
1925 and amended in Lisbon in 1952.
51
It is a
self-executing provision and does not require
legislative enactment to give it effect in the
member country.
52
It may be applied directly by
the tribunals and officials of each member
country by the mere publication or proclamation
of the Convention, after its ratification according
to the public law of each state and the order for
its execution.
53

The essential requirement under Article 6bis is
that the trademark to be protected must be
"well-known" in the country where protection is
sought. The power to determine whether a
trademark is well-known lies in the "competent
authority of the country of registration or use."
This competent authority would be either the
registering authority if it has the power to decide
this, or the courts of the country in question if
the issue comes before a court.
54

Pursuant to Article 6bis, on November 20, 1980,
then Minister Luis Villafuerte of the Ministry of
Trade issued a Memorandum to the Director of
Patents. The Minister ordered the Director that:
Pursuant to the Paris Convention for the
Protection of Industrial Property to which
the Philippines is a signatory, you are
hereby directed to 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, 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.
You are also required to submit to the
undersigned a progress report on the
matter.
For immediate compliance.
55

Three years later, on October 25, 1983, then
Minister Roberto Ongpin issued another
Memorandum to the Director of Patents, viz:
Pursuant to Executive Order No. 913
dated 7 October 1983 which strengthens
the rule-making and adjudicatory powers
of the Minister of Trade and Industry and
provides inter alia, that "such rule-making
and adjudicatory powers should be
revitalized in order that the Minister of
Trade and Industry can . . . apply more
swift and effective solutions and
remedies to old and new problems . . .
such as infringement of internationally-
known tradenames and trademarks . . ."
and in view of the decision of the
Intermediate Appellate Court in the case
of LA CHEMISE LACOSTE, S.A., versus
RAM SADWHANI [AC-G.R. SP NO.
13359 (17) June 1983]
56
which affirms
the validity of the MEMORANDUM of
then Minister Luis R. Villafuerte dated 20
November 1980 confirming our
obligations under the PARIS
CONVENTION FOR THE PROTECTION
OF INDUSTRIAL PROPERTY to which
the Republic of the Philippines is a
signatory, you are hereby directed to
implement measures necessary to effect
compliance with our obligations under
said Convention in general, and, more
specifically, to honor our commitment
under Section 6bis
57
thereof, as follows:
1. Whether the
trademark under
consideration is well-
known in the Philippines
or is a mark already
belonging to a person
entitled to the benefits of
the CONVENTION, this
should be established,
pursuant to Philippine
Patent Office procedures
in inter partes and ex
parte cases, according to
any of the following
criteria or any
combination thereof:
(a) a
declarati
on by
the
Minister
of Trade
and
Industry
that the
trademar
k being
consider
ed is
already
well-
known in
the
Philippin
es such
that
permissi
on for its
use by
other
than its
original
owner
will
constitut
e a
reproduc
tion,
imitation,
translatio
n or
other
infringe
ment;
(b) that
the
trademar
k is used
in
commer
ce
internati
onally,
supporte
d by
proof
that
goods
bearing
the
trademar
k are
sold on
an
internati
onal
scale,
advertise
ments,
the
establish
ment of
factories,
sales
offices,
distributo
rships,
and the
like, in
different
countries
,
including
volume
or other
measure
of
internati
onal
trade
and
commer
ce;
(c) that
the
trademar
k is duly
registere
d in the
industrial
property
office(s)
of
another
country
or
countries
, taking
into
consider
ation the
date of
such
registrati
on;
(d) that
the
trademar
k has
long
been
establish
ed and
obtained
goodwill
and
internati
onal
consume
r
recogniti
on as
belongin
g to one
owner or
source;
(e) that
the
trademar
k
actually
belongs
to a
party
claiming
ownershi
p and
has the
right to
registrati
on under
the
provision
s of the
aforestat
ed
PARIS
CONVE
NTION.
2. The word trademark,
as used in this
MEMORANDUM, shall
include tradenames,
service marks, logos,
signs, emblems, insignia
or other similar devices
used for identification
and recognition by
consumers.
3. The Philippine Patent
Office shall refuse all
applications for, or
cancel the registration of,
trademarks which
constitute a reproduction,
translation or imitation of
a trademark owned by a
person, natural or
corporate, who is a
citizen of a country
signatory to the PARIS
CONVENTION FOR
THE PROTECTION OF
INDUSTRIAL
PROPERTY.
4. The Philippine Patent
Office shall give due
course to the Opposition
in cases already or
hereafter filed against
the registration of
trademarks entitled to
protection of Section 6bis
of said PARIS
CONVENTION as
outlined above, by
remanding applications
filed by one not entitled
to such protection for
final disallowance by the
Examination Division.
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.
xxx xxx xxx.
58

In the Villafuerte Memorandum, the Minister of
Trade instructed the Director of Patents to reject
all pending applications for Philippine
registration of signature and other world-famous
trademarks by applicants other than their
original owners or users. The Minister
enumerated several internationally-known
trademarks and ordered the Director of Patents
to require Philippine registrants of such marks
to surrender their certificates of registration.
In the Ongpin Memorandum, the Minister of
Trade and Industry did not enumerate well-
known trademarks but laid down guidelines for
the Director of Patents to observe in
determining whether a trademark is entitled to
protection as a well-known mark in the
Philippines under Article 6bis of the Paris
Convention. This was to be established through
Philippine Patent Office procedures in inter
partes and ex parte cases pursuant to the
criteria enumerated therein. The Philippine
Patent Office was ordered to refuse applications
for, or cancel the registration of, trademarks
which constitute a reproduction, translation or
imitation of a trademark owned by a person who
is a citizen of a member of the Union. All
pending applications for registration of world-
famous trademarks by persons other than their
original owners were to be rejected forthwith.
The Ongpin Memorandum was issued pursuant
to Executive Order No. 913 dated October 7,
1983 of then President Marcos which
strengthened the rule-making and adjudicatory
powers of the Minister of Trade and Industry for
the effective protection of consumers and the
application of swift solutions to problems in
trade and industry.
59

Both the Villafuerte and Ongpin Memoranda
were sustained by the Supreme Court in the
1984 landmark case of La Chemise Lacoste,
S.A. v. Fernandez.
60
This court ruled therein
that under the provisions of Article 6bis of the
Paris Convention, the Minister of Trade and
Industry was the "competent authority" to
determine whether a trademark is well-known in
this country.
61

The Villafuerte Memorandum was issued in
1980, i.e., fifteen (15) years after the adoption of
the Paris Convention in 1965. In the case at
bar, the first inter partes case, IPC No. 686, was
filed in 1970, before the Villafuerte
Memorandum but five (5) years after the
effectivity of the Paris Convention. Article 6bis
was already in effect five years before the first
case was instituted. Private respondent,
however, did not cite the protection of Article
6bis, neither did it mention the Paris Convention
at all. It was only in 1981 when IPC No. 2049
was instituted that the Paris Convention and the
Villafuerte Memorandum, and, during the
pendency of the case, the 1983 Ongpin
Memorandum were invoked by private
respondent.
The Solicitor General argues that the issue of
whether the protection of Article 6bis of the
Convention and the two Memoranda is barred
by res judicata has already been answered in
Wolverine Worldwide, Inc. v. Court of
Appeals.
62
In this case, petitioner Wolverine, a
foreign corporation, filed with the Philippine
Patent Office a petition for cancellation of the
registration certificate of private respondent, a
Filipino citizen, for the trademark "Hush
Puppies" and "Dog Device." Petitioner alleged
that it was the registrant of the internationally-
known trademark in the United States and other
countries, and cited protection under the Paris
Convention and the Ongpin Memorandum. The
petition was dismissed by the Patent Office on
the ground of res judicata. It was found that in
1973 petitioner's predecessor-in-interest filed
two petitions for cancellation of the same
trademark against respondent's predecessor-in-
interest. The Patent Office dismissed the
petitions, ordered the cancellation of registration
of petitioner's trademark, and gave due course
to respondent's application for registration. This
decision was sustained by the Court of Appeals,
which decision was not elevated to us and
became final and
executory.
63

Wolverine claimed that while its previous
petitions were filed under R.A. No. 166, the
Trademark Law, its subsequent petition was
based on a new cause of action, i.e., the
Ongpin Memorandum and E.O. No. 913 issued
in 1983, after finality of the previous decision.
We held that the said Memorandum and E.O.
did not grant a new cause of action because it
did "not amend the Trademark Law," . . . "nor
did it indicate a new policy with respect to the
registration in the Philippines of world-famous
trademarks."
64
This conclusion was based on
the finding that Wolverine's two previous
petitions and subsequent petition dealt with the
same issue of ownership of the trademark.
65
In
other words, since the first and second cases
involved the same issue of ownership, then the
first case was a bar to the second case.
In the instant case, the issue of ownership of
the trademark "Barbizon" was not raised in IPC
No. 686. Private respondent's opposition therein
was merely anchored on:
(a) "confusing similarity" of its trademark
with that of Escobar's;
(b) that the registration of Escobar's
similar trademark will cause damage to
private respondent's business reputation
and goodwill; and
(c) that Escobar's use of the trademark
amounts to an unlawful appropriation of a
mark previously used in the Philippines
which act is penalized under Section 4
(d) of the Trademark Law.
In IPC No. 2049, private respondent's
opposition set forth several issues
summarized as follows:
(a) as early as 1933, it adopted the word
"BARBIZON" as trademark on its
products such as robes, pajamas,
lingerie, nightgowns and slips;
(b) that the trademark "BARBIZON" was
registered with the United States Patent
Office in 1934 and 1949; and that
variations of the same trademark, i.e.,
"BARBIZON" with Bee design and
"BARBIZON" with the representation of a
woman were also registered with the U.S.
Patent Office in 1961 and 1976;
(c) that these marks have been in use in
the Philippines and in many countries all
over the world for over forty years.
"Barbizon" products have been
advertised in international publications
and the marks registered in 36 countries
worldwide;
(d) Escobar's registration of the similar
trademark "BARBIZON" in 1974 was
based on fraud; and this fraudulent
registration was cancelled in 1979,
stripping Escobar of whatsoever right she
had to the said mark;
(e) Private respondent's trademark is
entitled to protection as a well-known
mark under Article 6bis of the Paris
Convention, Executive Order No. 913,
and the two Memoranda dated November
20, 1980 and October 25, 1983 of the
Minister of Trade and Industry to the
Director of Patents;
(f) Escobar's trademark is identical to
private respondent's and its use on the
same class of goods as the latter's
amounts to a violation of the Trademark
Law and Article 189 of the Revised Penal
Code.
IPC No. 2049 raised the issue of
ownership of the trademark, the first
registration and use of the trademark in
the United States and other countries,
and the international recognition and
reputation of the trademark established
by extensive use and advertisement of
private respondent's products for over
forty years here and abroad. These are
different from the issues of confusing
similarity and damage in IPC No. 686.
The issue of prior use may have been
raised in IPC No. 686 but this claim was
limited to prior use in the Philippines
only. Prior use in IPC No. 2049 stems
from private respondent's claim as
originator of the word and symbol
"Barbizon,"
66
as the first and registered
user of the mark attached to its products
which have been sold and advertised
worldwide for a considerable number of
years prior to petitioner's first application
for registration of her trademark in the
Philippines. Indeed, these are substantial
allegations that raised new issues and
necessarily gave private respondent a
new cause of action. Res judicata does
not apply to rights, claims or demands,
although growing out of the same subject
matter, which constitute separate or
distinct causes of action and were not put
in issue in the former action.
67

Respondent corporation also introduced in the
second case a fact that did not exist at the time
the first case was filed and terminated. The
cancellation of petitioner's certificate of
registration for failure to file the affidavit of use
arose only after IPC No. 686. It did not and
could not have occurred in the first case, and
this gave respondent another cause to oppose
the second application. Res judicata extends
only to facts and conditions as they existed at
the time judgment was rendered and to the
legal rights and relations of the parties fixed by
the facts so determined.
68
When new facts or
conditions intervene before the second suit,
furnishing a new basis for the claims and
defenses of the parties, the issues are no longer
the same, and the former judgment cannot be
pleaded as a bar to the subsequent action.
69

It is also noted that the oppositions in the first
and second cases are based on different laws.
The opposition in IPC No. 686 was based on
specific provisions of the Trademark Law, i.e.,
Section 4 (d)
70
on confusing similarity of
trademarks and Section 8
71
on the requisite
damage to file an opposition to a petition for
registration. The opposition in IPC No. 2049
invoked the Paris Convention, particularly
Article 6bis thereof, E.O. No. 913 and the two
Memoranda of the Minister of Trade and
Industry. This opposition also invoked Article
189 of the Revised Penal Code which is a
statute totally different from the Trademark Law.
72
Causes of action which are distinct and
independent from each other, although arising
out of the same contract, transaction, or state of
facts, may be sued on separately, recovery on
one being no bar to subsequent actions on
others.
73
The mere fact that the same relief is
sought in the subsequent action will not render
the judgment in the prior action operative as res
judicata, such as where the two actions are
based on different statutes.
74
Res judicata
therefore does not apply to the instant case and
respondent Court of Appeals did not err in so
ruling.
Intellectual and industrial property rights cases
are not simple property cases. Trademarks deal
with the psychological function of symbols and
the effect of these symbols on the public at
large.
75
Trademarks play a significant role in
communication, commerce and trade, and
serve valuable and interrelated business
functions, both nationally and internationally.
For this reason, all agreements concerning
industrial property, like those on trademarks and
tradenames, are intimately connected with
economic development.
76
Industrial property
encourages investments in new ideas and
inventions and stimulates creative efforts for the
satisfaction of human needs. They speed up
transfer of technology and industrialization, and
thereby bring about social and economic
progress.
77
These advantages have been
acknowledged by the Philippine government
itself. The Intellectual Property Code of the
Philippines declares that "an effective
intellectual and industrial property system is
vital to the development of domestic and
creative activity, facilitates transfer of
technology, it attracts foreign investments, and
ensures market access for our products."
78
The
Intellectual Property Code took effect on
January 1, 1998 and by its express provision,
79

repealed the Trademark Law,
80
the Patent Law,
81
Articles 188 and 189 of the Revised Penal
Code, the Decree on Intellectual Property,
82

and the Decree on Compulsory Reprinting of
Foreign Textbooks.
83
The Code was enacted to
strengthen the intellectual and industrial
property system in the Philippines as mandated
by the country's accession to the Agreement
Establishing the World Trade Organization
(WTO).
84

The WTO is a common institutional framework
for the conduct of trade relations among its
members in matters related to the multilateral
and plurilateral trade agreements annexed to
the WTO Agreement.
85
The WTO framework
ensures a "single undertaking approach" to the
administration and operation of all agreements
and arrangements attached to the WTO
Agreement. Among those annexed is the
Agreement on Trade-Related Aspects of
Intellectual Property Rights or TRIPs.
86

Members to this Agreement "desire to reduce
distortions and impediments to international
trade, taking into account the need to promote
effective and adequate protection of intellectual
property rights, and to ensure that measures
and procedures to enforce intellectual property
rights do not themselves become barriers to
legitimate trade." To fulfill these objectives, the
members have agreed to adhere to minimum
standards of protection set by several
Conventions.
87
These Conventions are: the
Berne Convention for the Protection of Literary
and Artistic Works (1971), the Rome
Convention or the International Convention for
the Protection of Performers, Producers of
Phonograms and Broadcasting Organisations,
the Treaty on Intellectual Property in Respect of
Integrated Circuits, and the Paris Convention
(1967), as revised in Stockholm on July 14,
1967.
88

A major proportion of international trade
depends on the protection of intellectual
property rights.
89
Since the late 1970's, the
unauthorized counterfeiting of industrial
property and trademarked products has had a
considerable adverse impact on domestic and
international trade revenues.
90
The TRIPs
Agreement seeks to grant adequate protection
of intellectual property rights by creating a
favorable economic environment to encourage
the inflow of foreign investments, and
strengthening the multi-lateral trading system to
bring about economic, cultural and
technological independence.
91

The Philippines and the United States of
America have acceded to the WTO Agreement.
This Agreement has revolutionized international
business and economic relations among states,
and has propelled the world towards trade
liberalization and economic globalization.
92

Protectionism and isolationism belong to the
past. Trade is no longer confined to a bilateral
system. There is now "a new era of global
economic cooperation, reflecting the
widespread desire to operate in a fairer and
more open multilateral trading system."
93

Conformably, the State must reaffirm its
commitment to the global community and take
part in evolving a new international economic
order at the dawn of the new millenium.
IN VIEW WHEREOF, the petition is denied and
the Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 28415 are affirmed.
SO ORDERED.
Davide, Jr., C.J., Kapunan, Pardo and Ynares-
Santiago, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 120900 July 20, 2000
CANON KABUSHIKI KAISHA, petitioner,
vs.
COURT OF APPEALS and NSR RUBBER
CORPORATION, respondents.
GONZAGA-REYES, J .:
Before us is a petition for review that seeks to set
aside the Decision
1
dated February 21, 1995 of the
Court of Appeals in CA-GR SP No. 30203, entitled
"Canon Kabushiki Kaisha vs. NSR Rubber
Corporation" and its Resolution dated June 27, 1995
denying the motion for reconsideration of herein
petitioner Canon Kabushiki Kaisha (petitioner).
On January 15, 1985, private respondent NSR
Rubber Corporation (private respondent) filed an
application for registration of the mark CANON for
sandals in the Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT). A Verified Notice of
Opposition was filed by petitioner, a foreign
corporation duly organized and existing under the
laws of Japan, alleging that it will be damaged by the
registration of the trademark CANON in the name of
private respondent. The case was docketed as Inter
Partes Case No. 3043.
Petitioner moved to declare private respondent in
default for its failure to file its answer within the
prescribed period. The BPTTT then declared private
respondent in default and allowed petitioner to
present its evidence ex-parte.
Based on the records, the evidence presented by
petitioner consisted of its certificates of registration
for the mark CANON in various countries covering
goods belonging to class 2 (paints, chemical
products, toner, and dye stuff). Petitioner also
submitted in evidence its Philippine Trademark
Registration No. 39398, showing its ownership over
the trademark CANON also under class 2.
On November 10, 1992, the BPTTT issued its
decision dismissing the opposition of petitioner and
giving due course to private respondent's application
for the registration of the trademark CANON. On
February 16, 1993, petitioner appealed the decision
of the BPTTT with public respondent Court of
Appeals that eventually affirmed the decision of
BPTTT. Hence, this petition for review.
Petitioner anchors this instant petition on these
grounds:
A) PETITIONER IS ENTITLED TO
EXCLUSIVE USE OF THE MARK
CANON BECAUSE IT IS ITS
TRADEMARK AND IS USED ALSO FOR
FOOTWEAR.
B) TO ALLOW PRIVATE RESPONDENT
TO REGISTER CANON FOR FOOTWEAR
IS TO PREVENT PETITIONER FROM
USING CANON FOR VARIOUS KINDS
OF FOOTWEAR, WHEN IN FACT,
PETITIONER HAS EARLIER USED SAID
MARK FOR SAID GOODS.
C) PETITIONER IS ALSO ENTITLED TO
THE RIGHT TO EXCLUSIVELY USE
CANON TO PREVENT CONFUSION OF
BUSINESS.
D) PETITIONER IS ALSO ENTITLED TO
THE EXCLUSIVE USE OF CANON
BECAUSE IT FORMS PART OF ITS
CORPORATE NAME, PROTECTED BY
THE PARIS CONVENTION.
2

The BPTTT and the Court of Appeals share the
opinion that the trademark "CANON" as used by
petitioner for its paints, chemical products, toner, and
dyestuff, can be used by private respondent for its
sandals because the products of these two parties are
dissimilar. Petitioner protests the appropriation of the
mark CANON by private respondent on the ground
that petitioner has used and continues to use the
trademark CANON on its wide range of goods
worldwide. Allegedly, the corporate name or
tradename of petitioner is also used as its trademark
on diverse goods including footwear and other
related products like shoe polisher and polishing
agents. To lend credence to its claim, petitioner
points out that it has branched out in its business
based on the various goods carrying its trademark
CANON
3
, including footwear which petitioner
contends covers sandals, the goods for which private
respondent sought to register the mark CANON. For
petitioner, the fact alone that its trademark CANON
is carried by its other products like footwear, shoe
polisher and polishing agents should have precluded
the BPTTT from giving due course to the application
of private respondent.
We find the arguments of petitioner to be
unmeritorious. Ordinarily, the ownership of a
trademark or tradename is a property right that the
owner is entitled to protect
4
as mandated by the
Trademark Law.
5
However, when a trademark is
used by a party for a product in which the other party
does not deal, the use of the same trademark on the
latter's product cannot be validly objected to.
6

A review of the records shows that with the order of
the BPTTT declaring private respondent in default
for failure to file its answer, petitioner had every
opportunity to present ex-parte all of its evidence to
prove that its certificates of registration for the
trademark CANON cover footwear. The certificates
of registration for the trademark CANON in other
countries and in the Philippines as presented by
petitioner, clearly showed that said certificates of
registration cover goods belonging to class 2 (paints,
chemical products, toner, dyestuff). On this basis, the
BPTTT correctly ruled that since the certificate of
registration of petitioner for the trademark CANON
covers class 2 (paints, chemical products, toner,
dyestuff), private respondent can use the trademark
CANON for its goods classified as class 25
(sandals). Clearly, there is a world of difference
between the paints, chemical products, toner, and
dyestuff of petitioner and the sandals of private
respondent.
Petitioner counters that notwithstanding the
dissimilarity of the products of the parties, the
trademark owner is entitled to protection when the
use of by the junior user "forestalls the normal
expansion of his business".
7
Petitioner's opposition
to the registration of its trademark CANON by
private respondent rests upon petitioner's insistence
that it would be precluded from using the mark
CANON for various kinds of footwear, when in fact
it has earlier used said mark for said goods.
Stretching this argument, petitioner claims that it is
possible that the public could presume that petitioner
would also produce a wide variety of footwear
considering the diversity of its products marketed
worldwide.
We do not agree. Even in this instant petition, except
for its bare assertions, petitioner failed to attach
evidence that would convince this Court that
petitioner has also embarked in the production of
footwear products. We quote with approval the
observation of the Court of Appeals that:
"The herein petitioner has not made known
that it intends to venture into the business of
producing sandals. This is clearly shown in
its Trademark Principal Register (Exhibit
"U") where the products of the said petitioner
had been clearly and specifically described as
"Chemical products, dyestuffs, pigments,
toner developing preparation, shoe polisher,
polishing agent". It would be taxing one's
credibility to aver at this point that the
production of sandals could be considered as
a possible "natural or normal expansion" of
its business operation".
8

In Faberge, Incorporated vs. Intermediate Appellate
Court,
9
the Director of patents allowed the junior
user to use the trademark of the senior user on the
ground that the briefs manufactured by the junior
user, the product for which the trademark BRUTE
was sought to be registered, was unrelated and non-
competing with the products of the senior user
consisting of after shave lotion, shaving cream,
deodorant, talcum powder, and toilet soap. The
senior user vehemently objected and claimed that it
was expanding its trademark to briefs and argued
that permitting the junior user to register the same
trademark would allow the latter to invade the senior
user's exclusive domain. In sustaining the Director of
Patents, this Court said that since "(the senior user)
has not ventured in the production of briefs, an item
which is not listed in its certificate of registration,
(the senior user), cannot and should not be allowed
to feign that (the junior user) had invaded (the senior
user's) exclusive domain."
10
We reiterated the
principle that the certificate of registration confers
upon the trademark owner the exclusive right to use
its own symbol only to those goods specified in the
certificate, subject to the conditions and limitations
stated therein.
11
Thus, the exclusive right of
petitioner in this case to use the trademark CANON
is limited to the products covered by its certificate of
registration.
Petitioner further argues that the alleged diversity of
its products all over the world makes it plausible that
the public might be misled into thinking that there is
some supposed connection between private
respondent's goods and petitioner. Petitioner is
apprehensive that there could be confusion as to the
origin of the goods, as well as confusion of business,
if private respondent is allowed to register the mark
CANON. In such a case, petitioner would allegedly
be immensely prejudiced if private respondent would
be permitted to take "a free ride on, and reap the
advantages of, the goodwill and reputation of
petitioner Canon".
12
In support of the foregoing
arguments, petitioner invokes the rulings in Sta. Ana
vs. Maliwat
13
, Ang vs. Teodoro
14
and Converse
Rubber Corporation vs. Universal Rubber Products,
Inc.
15
.
The likelihood of confusion of goods or business is a
relative concept, to be determined only according to
the particular, and sometimes peculiar,
circumstances of each case.
16
Indeed, in trademark
law cases, even more than in other litigation,
precedent must be studied in the light of the facts of
the particular case.
17
Contrary to petitioner's
supposition, the facts of this case will show that the
cases of Sta. Ana vs. Maliwat,, Ang vs. Teodoro and
Converse Rubber Corporation vs. Universal Rubber
Products, Inc. are hardly in point. The just cited
cases involved goods that were confusingly similar,
if not identical, as in the case of Converse Rubber
Corporation vs. Universal Rubber Products, Inc.
Here, the products involved are so unrelated that the
public will not be misled that there is the slightest
nexus between petitioner and the goods of private
respondent.
In cases of confusion of business or origin, the
question that usually arises is whether the respective
goods or services of the senior user and the junior
user are so related as to likely cause confusion of
business or origin, and thereby render the trademark
or tradenames confusingly similar.
18
Goods are
related when they belong to the same class or have
the same descriptive properties; when they possess
the same physical attributes or essential
characteristics with reference to their form,
composition, texture or quality.
19
They may also be
related because they serve the same purpose or are
sold in grocery stores.
20

Thus, in Esso Standard Eastern, Inc. vs. Court of
Appeals, this Court ruled that the petroleum products
on which the petitioner therein used the trademark
ESSO, and the product of respondent, cigarettes are
"so foreign to each other as to make it unlikely that
purchasers would think that petitioner is the
manufacturer of respondent's goods"
21
. Moreover,
the fact that the goods involved therein flow through
different channels of trade highlighted their
dissimilarity, a factor explained in this wise:
"The products of each party move along and
are disposed through different channels of
distribution. The (petitioner's) products are
distributed principally through gasoline
service and lubrication stations, automotive
shops and hardware stores. On the other
hand, the (respondent's) cigarettes are sold in
sari-sari stores, grocery store, and other small
distributor outlets. (Respondnet's) cigarettes
are even peddled in the streets while
(petitioner's) 'gasul' burners are not. Finally,
there is a marked distinction between oil and
tobacco, as well as between petroleum and
cigarettes. Evidently, in kind and nature the
products of (respondent) and of (petitioner)
are poles apart."
22

Undoubtedly, the paints, chemical products, toner
and dyestuff of petitioner that carry the trademark
CANON are unrelated to sandals, the product of
private respondent. We agree with the BPTTT,
following the Esso doctrine, when it noted that the
two classes of products in this case flow through
different trade channels. The products of petitioner
are sold through special chemical stores or
distributors while the products of private respondent
are sold in grocery stores, sari-sari stores and
department stores.
23
Thus, the evident disparity of
the products of the parties in the case at bar renders
unfounded the apprehension of petitioner that
confusion of business or origin might occur if private
respondent is allowed to use the mark CANON.
In its bid to bar the registration of private respondent
of the mark CANON, petitioner invokes the
protective mantle of the Paris Convention. Petitioner
asserts that it has the exclusive right to the mark
CANON because it forms part of its corporate name
or tradename, protected by Article 8 of the Paris
Convention, to wit:
"A tradename shall be protected in all the
countries of the Union without the obligation
of filing or registration, whether or not it
forms part of a trademark."
Public respondents BPTTT and the Court of Appeals
allegedly committed an oversight when they required
petitioner to prove that its mark is a well-known
mark at the time the application of private
respondent was filed. Petitioner questions the
applicability of the guidelines embodied in the
Memorandum of then Minister of Trade and Industry
Roberto Ongpin (Ongpin) dated October 25, 1983
which according to petitioner implements Article
6bis of the Paris Convention, the provision referring
to the protection of trademarks. The memorandum
reads:
"a) the mark must be internationally known;
b) the subject of the right must be a
trademark, not a patent or copyright or
anything else;
c) the mark must be for use in the same or
similar class of goods;
d) the person claiming must be the owner of
the mark."
According to petitioner, it should not be required to
prove that its trademark is well-known and that the
products are not similar as required by the quoted
memorandum. Petitioner emphasizes that the
guidelines in the memorandum of Ongpin implement
Article 6bis of the Paris Convention, the provision
for the protection of trademarks, not tradenames.
Article 6bis of the Paris Convention states:
(1) The countries of the Union undertake,
either administratively if their legislation so
permits, or at the request of an interested
party, to refuse or to cancel the registration
and to prohibit the use of a trademark which
constitutes a reproduction, imitation or
translation, liable to create confusion, of a
mark considered by the competent authority
of the country of registration or use to be
well-known in that country as being already
the mark of a person entitled to the benefits
of the present Convention and used for
identical or similar goods. These provisions
shall also apply when the essential part of the
mark constitutes a reproduction of any such
well-known mark or an imitation liable to
create confusion therewith.
(2) A period of at least five years from the
date of registration shall be allowed for
seeking the cancellation of such a mark. The
countries of the Union may provide for a
period within which the prohibition of use
must be sought.
(3) No time limit shall be fixed for seeking
the cancellation or the prohibition of the use
of marks or used in bad faith."
Petitioner insists that what it seeks is the protection
of Article 8 of the Paris Convention, the provision
that pertains to the protection of tradenames.
Petitioner believes that the appropriate memorandum
to consider is that issued by the then Minister of
Trade and Industry, Luis Villafuerte, directing the
Director of patents to:
"reject all pending applications for Philippine
registration of signature and other world
famous trademarks by applicants other than
the original owners or users."
As far as petitioner is concerned, the fact that its
tradename is at risk would call for the protection
granted by Article 8 of the Paris Convention.
Petitioner calls attention to the fact that Article 8,
even as embodied in par. 6, sec. 37 of RA 166,
mentions no requirement of similarity of goods.
Petitioner claims that the reason there is no mention
of such a requirement, is "because there is a
difference between the referent of the name and that
of the mark"
24
and that "since Art. 8 protects the
tradename in the countries of the Union, such as
Japan and the Philippines, Petitioner's tradename
should be protected here."
25

We cannot uphold petitioner's position.
The term "trademark" is defined by RA 166, the
Trademark Law, as including "any word, name,
symbol, emblem, sign or device or any combination
thereof adopted and used by a manufacturer or
merchant to identify his goods and distinguish them
for those manufactured, sold or dealt in by others."
26

Tradename is defined by the same law as including
"individual names and surnames, firm names,
tradenames, devices or words used by manufacturers,
industrialists, merchants, agriculturists, and others to
identify their business, vocations, or occupations; the
names or titles lawfully adopted and used by natural
or juridical persons, unions, and any manufacturing,
industrial, commercial, agricultural or other
organizations engaged in trade or commerce."
27

Simply put, a trade name refers to the business and
its goodwill; a trademark refers to the goods.
28

The Convention of Paris for the Protection of
Industrial Property, otherwise known as the Paris
Convention, of which both the Philippines and
Japan, the country of petitioner, are signatories
29
, is a
multilateral treaty that seeks to protect industrial
property consisting of patents, utility models,
industrial designs, trademarks, service marks, trade
names and indications of source or appellations of
origin, and at the same time aims to repress unfair
competition.
30
We agree with public respondents that
the controlling doctrine with respect to the
applicability of Article 8 of the Paris Convention is
that established in Kabushi Kaisha Isetan vs.
Intermediate Appellate Court.
31
As pointed out by
the BPTTT:
"Regarding the applicability of Article 8 of
the Paris Convention, this Office believes
that there is no automatic protection afforded
an entity whose tradename is alleged to have
been infringed through the use of that name
as a trademark by a local entity.
In Kabushiki Kaisha Isetan vs. The
Intermediate Appellate Court, et. al., G.R.
No. 75420, 15 November 1991, the
Honorable Supreme Court held that:
'The Paris Convention for the
Protection of Industrial Property does
not automatically exclude all
countries of the world which have
signed it from using a tradename
which happens to be used in one
country. To illustrate if a taxicab or
bus company in a town in the United
Kingdom or India happens to use the
tradename "Rapid Transportation", it
does not necessarily follow that
"Rapid" can no longer be registered in
Uganda, Fiji, or the Philippines.
This office is not unmindful that in the Treaty
of Paris for the Protection of Intellectual
Property regarding well-known marks and
possible application thereof in this case.
Petitioner, as this office sees it, is trying to
seek refuge under its protective mantle,
claiming that the subject mark is well known
in this country at the time the then application
of NSR Rubber was filed.
However, the then Minister of Trade and
Industry, the Hon. Roberto V. Ongpin, issued
a memorandum dated 25 October 1983 to the
Director of Patents, a set of guidelines in the
implementation of Article 6bis (sic) of the
Treaty of Paris. These conditions are:
a) the mark must be internationally
known;
b) the subject of the right must be a
trademark, not a patent or copyright
or anything else;
c) the mark must be for use in the
same or similar kinds of goods; and
d) the person claiming must be the
owner of the mark (The Parties
Convention Commentary on the Paris
Convention. Article by Dr. Bogsch,
Director General of the World
Intellectual Property Organization,
Geneva, Switzerland, 1985)'
From the set of facts found in the records, it
is ruled that the Petitioner failed to comply
with the third requirement of the said
memorandum that is the mark must be for use
in the same or similar kinds of goods. The
Petitioner is using the mark "CANON" for
products belonging to class 2 (paints,
chemical products) while the Respondent is
using the same mark for sandals (class 25).
Hence, Petitioner's contention that its mark is
well-known at the time the Respondent filed
its application for the same mark should fail.
"
32

Petitioner assails the application of the case of
Kabushi Kaisha Isetan vs. Intermediate Appellate
Court to this case. Petitioner points out that in the
case of Kabushi Kaisha Isetan vs. Intermediate
Appellate Court, petitioner therein was found to have
never at all conducted its business in the Philippines
unlike herein petitioner who has extensively
conducted its business here and also had its
trademark registered in this country. Hence,
petitioner submits that this factual difference renders
inapplicable our ruling in the case of Kabushi Kaisha
Isetan vs. Intermediate Appellate Court that Article 8
of the Paris Convention does not automatically
extend protection to a tradename that is in danger of
being infringed in a country that is also a signatory to
said treaty. This contention deserves scant
consideration. Suffice it to say that the just quoted
pronouncement in the case of Kabushi Kaisha Isetan
vs. Intermediate Appellate Court, was made
independent of the factual finding that petitioner in
said case had not conducted its business in this
country.
WHEREFORE, in view of the foregoing, the
instant petition for review on certiorari is DENIED
for lack of merit.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Pursima,
JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. 158589 June 27, 2006
PHILIP MORRIS, INC., BENSON & HEDGES
(CANADA), INC., and FABRIQUES DE TABAC
REUNIES, S.A., (now known as PHILIP
MORRIS PRODUCTS S.A.), Petitioners,
vs.
FORTUNE TOBACCO CORPORATION,
Respondent.
D E C I S I O N
GARCIA, J .:
Via this petition for review under Rule 45 of the
Rules of Court, herein petitioners Philip Morris, Inc.,
Benson & Hedges (Canada) Inc., and Fabriques de
Tabac Reunies, S.A. (now Philip Morris Products
S.A.) seek the reversal and setting aside of the
following issuances of the Court of Appeals (CA) in
CA-G.R. CV No. 66619, to wit:
1. Decision dated January 21, 2003
1

affirming an earlier decision of the Regional
Trial Court of Pasig City, Branch 166, in its
Civil Case No. 47374, which dismissed the
complaint for trademark infringement and
damages thereat commenced by the
petitioners against respondent Fortune
Tobacco Corporation; and
2. Resolution dated May 30, 2003
2
denying
petitioners motion for reconsideration.
Petitioner Philip Morris, Inc., a corporation
organized under the laws of the State of Virginia,
United States of America, is, per Certificate of
Registration No. 18723 issued on April 26, 1973 by
the Philippine Patents Office (PPO), the registered
owner of the trademark "MARK VII" for cigarettes.
Similarly, petitioner Benson & Hedges (Canada),
Inc., a subsidiary of Philip Morris, Inc., is the
registered owner of the trademark "MARK TEN" for
cigarettes as evidenced by PPO Certificate of
Registration No. 11147. And as can be seen in
Trademark Certificate of Registration No. 19053,
another subsidiary of Philip Morris, Inc., the Swiss
company Fabriques de Tabac Reunies, S.A., is the
assignee of the trademark "LARK," which was
originally registered in 1964 by Ligget and Myers
Tobacco Company. On the other hand, respondent
Fortune Tobacco Corporation, a company organized
in the Philippines, manufactures and sells cigarettes
using the trademark "MARK."
The legal dispute between the parties started when
the herein petitioners, on the claim that an
infringement of their respective trademarks had been
committed, filed, on August 18, 1982, a Complaint
for Infringement of Trademark and Damages against
respondent Fortune Tobacco Corporation, docketed
as Civil Case No. 47374 of the Regional Trial Court
of Pasig, Branch 166.
The decision under review summarized what
happened next, as follows:
In the Complaint xxx with prayer for the issuance of
a preliminary injunction, [petitioners] alleged that
they are foreign corporations not doing business in
the Philippines and are suing on an isolated
transaction. xxx they averred that the countries in
which they are domiciled grant xxx to corporate or
juristic persons of the Philippines the privilege to
bring action for infringement, xxx without need of a
license to do business in those countries.
[Petitioners] likewise manifested [being registered
owners of the trademark "MARK VII" and "MARK
TEN" for cigarettes as evidenced by the
corresponding certificates of registration and an
applicant for the registration of the trademark
"LARK MILDS"]. xxx. [Petitioners] claimed that
they have registered the aforementioned trademarks
in their respective countries of origin and that, by
virtue of the long and extensive usage of the same,
these trademarks have already gained international
fame and acceptance. Imputing bad faith on the part
of the [respondent], petitioners claimed that the
[respondent], without any previous consent from any
of the [petitioners], manufactured and sold cigarettes
bearing the identical and/or confusingly similar
trademark "MARK" xxx Accordingly, they argued
that [respondents] use of the trademark "MARK" in
its cigarette products have caused and is likely to
cause confusion or mistake, or would deceive
purchasers and the public in general into buying
these products under the impression and mistaken
belief that they are buying [petitioners] products.
Invoking the provisions of the Paris Convention for
the Protection of Industrial and Intellectual Property
(Paris Convention, for brevity), to which the
Philippines is a signatory xxx, [petitioners] pointed
out that upon the request of an interested party, a
country of the Union may prohibit the use of a
trademark which constitutes a reproduction,
imitation, or translation of a mark already belonging
to a person entitled to the benefits of the said
Convention. They likewise argued that, in
accordance with Section 21-A in relation to Section
23 of Republic Act 166, as amended, they are
entitled to relief in the form of damages xxx [and]
the issuance of a writ of preliminary injunction
which should be made permanent to enjoin
perpetually the [respondent] from violating
[petitioners] right to the exclusive use of their
aforementioned trademarks.
[Respondent] filed its Answer xxx denying
[petitioners] material allegations and xxx averred
[among other things] xxx that "MARK" is a common
word, which cannot particularly identify a product to
be the product of the [petitioners] xxx
xxx xxx
xxx.
lawphil.net
Meanwhile, after the [respondent] filed its
Opposition (Records, Vo. I, p. 26), the matter of the
[petitioners] prayer for the issuance of a writ of
preliminary injunction was negatively resolved by
the court in an Order xxx dated March 28, 1973.
[The incidental issue of the propriety of an injunction
would eventually be elevated to the CA and would
finally be resolved by the Supreme Court in its
Decision dated July 16, 1993 in G.R. No. 91332].
xxx.
xxx xxx
xxx
After the termination of the trial on the merits xxx
trial court rendered its Decision xxx dated November
3, 1999 dismissing the complaint and counterclaim
after making a finding that the [respondent] did not
commit trademark infringement against the
[petitioners]. Resolving first the issue of whether or
not [petitioners] have capacity to institute the instant
action, the trial court opined that [petitioners] failure
to present evidence to support their allegation that
their respective countries indeed grant Philippine
corporations reciprocal or similar privileges by law
xxx justifies the dismissal of the complaint xxx. It
added that the testimonies of [petitioners] witnesses
xxx essentially declared that [petitioners] are in fact
doing business in the Philippines, but [petitioners]
failed to establish that they are doing so in
accordance with the legal requirement of first
securing a license. Hence, the court declared that
[petitioners] are barred from maintaining any action
in Philippine courts pursuant to Section 133 of the
Corporation Code.
The issue of whether or not there was infringement
of the [petitioners] trademarks by the [respondent]
was likewise answered xxx in the negative. It
expounded that "in order for a name, symbol or
device to constitute a trademark, it must, either by
itself or by association, point distinctly to the origin
or ownership of the article to which it is applied and
be of such nature as to permit an exclusive
appropriation by one person". Applying such
principle to the instant case, the trial court was of the
opinion that the words "MARK", "TEN", "LARK"
and the Roman Numerals "VII", either alone or in
combination of each other do not by themselves or
by association point distinctly to the origin or
ownership of the cigarettes to which they refer, such
that the buying public could not be deceived into
believing that [respondents] "MARK" cigarettes
originated either from the USA, Canada, or
Switzerland.
Emphasizing that the test in an infringement case is
the likelihood of confusion or deception, the trial
court stated that the general rule is that an
infringement exists if the resemblance is so close that
it deceives or is likely to deceive a customer
exercising ordinary caution in his dealings and
induces him to purchase the goods of one
manufacturer in the belief that they are those of
another. xxx. The trial court ruled that the
[petitioners] failed to pass these tests as it neither
presented witnesses or purchasers attesting that they
have bought [respondents] product believing that
they bought [petitioners] "MARK VII", "MARK
TEN" or "LARK", and have also failed to introduce
in evidence a specific magazine or periodical
circulated locally, which promotes and popularizes
their products in the Philippines. It, moreover,
elucidated that the words consisting of the
trademarks allegedly infringed by [respondent] failed
to show that they have acquired a secondary meaning
as to identify them as [petitioners] products. Hence,
the court ruled that the [petitioners] cannot avail
themselves of the doctrine of secondary meaning.
As to the issue of damages, the trial court deemed it
just not to award any to either party stating that,
since the [petitioners] filed the action in the belief
that they were aggrieved by what they perceived to
be an infringement of their trademark, no wrongful
act or omission can be attributed to them. xxx.
3

(Words in brackets supplied)
Maintaining to have the standing to sue in the local
forum and that respondent has committed trademark
infringement, petitioners went on appeal to the CA
whereat their appellate recourse was docketed as
CA-G.R. CV No. 66619.
Eventually, the CA, in its Decision dated January 21,
2003, while ruling for petitioners on the matter of
their legal capacity to sue in this country for
trademark infringement, nevertheless affirmed the
trial courts decision on the underlying issue of
respondents liability for infringement as it found
that:
xxx the appellants [petitioners] trademarks, i.e.,
"MARK VII", "MARK TEN" and "LARK", do not
qualify as well-known marks entitled to protection
even without the benefit of actual use in the local
market and that the similarities in the trademarks in
question are insufficient as to cause deception or
confusion tantamount to infringement. Consequently,
as regards the third issue, there is likewise no basis
for the award of damages prayed for by the
appellants herein.
4
(Word in bracket supplied)
With their motion for reconsideration having been
denied by the CA in its equally challenged
Resolution of May 30, 2003, petitioners are now
with this Court via this petition for review essentially
raising the following issues: (1) whether or not
petitioners, as Philippine registrants of trademarks,
are entitled to enforce trademark rights in this
country; and (2) whether or not respondent has
committed trademark infringement against
petitioners by its use of the mark "MARK" for its
cigarettes, hence liable for damages.
In its Comment,
5
respondent, aside from asserting
the correctness of the CAs finding on its liability for
trademark infringement and damages, also puts in
issue the propriety of the petition as it allegedly
raises questions of fact.
The petition is bereft of merit.
Dealing first with the procedural matter interposed
by respondent, we find that the petition raises both
questions of fact and law contrary to the prescription
against raising factual questions in a petition for
review on certiorari filed before the Court. A
question of law exists when the doubt or difference
arises as to what the law is on a certain state of facts;
there is a question of fact when the doubt or
difference arises as to the truth or falsity of alleged
facts.
6

Indeed, the Court is not the proper venue to consider
factual issues as it is not a trier of facts.
7
Unless the
factual findings of the appellate court are mistaken,
absurd, speculative, conflicting, tainted with grave
abuse of discretion, or contrary to the findings culled
by the court of origin,
8
we will not disturb them.
It is petitioners posture, however, that their
contentions should
be treated as purely legal since they are assailing
erroneous conclusions deduced from a set of
undisputed facts.
Concededly, when the facts are undisputed, the
question of whether or not the conclusion drawn
therefrom by the CA is correct is one of law.
9
But,
even if we consider and accept as pure questions of
law the issues raised in this petition, still, the Court is
not inclined to disturb the conclusions reached by the
appellate court, the established rule being that all
doubts shall be resolved in favor of the correctness
of such conclusions.
10

Be that as it may, we shall deal with the issues
tendered and determine whether the CA ruled in
accordance with law and established jurisprudence in
arriving at its assailed decision.
A "trademark" is any distinctive word, name,
symbol, emblem, sign, or device, or any combination
thereof adopted and used by a manufacturer or
merchant on his goods to identify and distinguish
them from those manufactured, sold, or dealt in by
others.
11
Inarguably, a trademark deserves
protection. For, as Mr. Justice Frankfurter observed
in Mishawaka Mfg. Co. v. Kresge Co.:
12

The protection of trademarks is the laws recognition
of the psychological function of symbols. If it is true
that we live by symbols, it is no less true that we
purchase goods by them. A trade-mark is a
merchandising short-cut which induces a purchaser
to select what he wants, or what he has been led to
believe what he wants. The owner of a mark exploits
this human propensity by making every effort to
impregnate the atmosphere of the market with the
drawing power of a congenial symbol. Whatever the
means employed, the aim is the same - to convey
through the mark, in the minds of potential
customers, the desirability of the commodity upon
which it appears. Once this is attained, the trade-
mark owner has something of value. If another
poaches upon the commercial magnetism of the
symbol he has created, the owner can obtain legal
redress.
It is thus understandable for petitioners to invoke in
this recourse their entitlement to enforce trademark
rights in this country, specifically, the right to sue for
trademark infringement in Philippine courts and be
accorded protection against unauthorized use of their
Philippine-registered trademarks.
In support of their contention respecting their right of
action, petitioners assert that, as corporate nationals
of member-countries of the Paris Union, they can sue
before Philippine courts for infringement of
trademarks, or for unfair competition, without need
of obtaining registration or a license to do business
in the Philippines, and without necessity of actually
doing business in the Philippines. To petitioners,
these grievance right and mechanism are accorded
not only by Section 21-A of Republic Act (R.A.) No.
166, as amended, or the Trademark Law, but also by
Article 2 of the Paris Convention for the Protection
of Industrial Property, otherwise known as the Paris
Convention.
In any event, petitioners point out that there is actual
use of their trademarks in the Philippines as
evidenced by the certificates of registration of their
trademarks. The marks "MARK TEN" and "LARK"
were registered on the basis of actual use in
accordance with Sections 2-A
13
and 5(a)
14
of R.A.
No. 166, as amended, providing for a 2-month pre-
registration use in local commerce and trade while
the registration of "MARK VII" was on the basis of
registration in the foreign country of origin pursuant
to Section 37 of the same law wherein it is explicitly
provided that prior use in commerce need not be
alleged.
15

Besides, petitioners argue that their not doing
business in the Philippines, if that be the case, does
not mean that cigarettes bearing their trademarks are
not available and sold locally. Citing Converse
Rubber Corporation v. Universal Rubber Products,
Inc.,
16
petitioners state that such availability and sale
may be effected through the acts of importers and
distributors.
Finally, petitioners would press on their entitlement
to protection even in the absence of actual use of
trademarks in the country in view of the Philippines
adherence to the Trade Related Aspects of
Intellectual Property Rights or the TRIPS Agreement
and the enactment of R.A. No. 8293, or the
Intellectual Property Code (hereinafter the "IP
Code"), both of which provide that the fame of a
trademark may be acquired through promotion or
advertising with no explicit requirement of actual use
in local trade or commerce.
Before discussing petitioners claimed entitlement to
enforce trademark rights in the Philippines, it must
be emphasized that their standing to sue in Philippine
courts had been recognized, and rightly so, by the
CA. It ought to be pointed out, however, that the
appellate court qualified its holding with a statement,
following G.R. No. 91332, entitled Philip Morris,
Inc., et al. v. The Court of Appeals and Fortune
Tobacco Corporation,
17
that such right to sue does
not necessarily mean protection of their registered
marks in the absence of actual use in the Philippines.
Thus clarified, what petitioners now harp about is
their entitlement to protection on the strength of
registration of their trademarks in the Philippines.
As we ruled in G.R. No. 91332,
18
supra, so it must be
here.
Admittedly, the registration of a trademark gives the
registrant, such as petitioners, advantages denied
non-registrants or ordinary users, like respondent.
But while petitioners enjoy the statutory
presumptions arising from such registration,
19
i.e., as
to the validity of the registration, ownership and the
exclusive right to use the registered marks, they may
not successfully sue on the basis alone of their
respective certificates of registration of trademarks.
For, petitioners are still foreign corporations. As
such, they ought, as a condition to availment of the
rights and privileges vis--vis their trademarks in this
country, to show proof that, on top of Philippine
registration, their country grants substantially similar
rights and privileges to Filipino citizens pursuant to
Section 21-A
20
of R.A. No. 166.
In Leviton Industries v. Salvador,
21
the Court further
held that the aforementioned reciprocity requirement
is a condition sine qua non to filing a suit by a
foreign corporation which, unless alleged in the
complaint, would justify dismissal thereof, a mere
allegation that the suit is being pursued under
Section 21-A of R.A. No. 166 not being sufficient. In
a subsequent case,
22
however, the Court held that
where the complainant is a national of a Paris
Convention- adhering country, its allegation that it is
suing under said Section 21-A would suffice,
because the reciprocal agreement between the two
countries is embodied and supplied by the Paris
Convention which, being considered part of
Philippine municipal laws, can be taken judicial
notice of in infringement suits.
23

As well, the fact that their respective home countries,
namely, the United States, Switzerland and Canada,
are, together with the Philippines, members of the
Paris Union does not automatically entitle petitioners
to the protection of their trademarks in this country
absent actual use of the marks in local commerce and
trade.
True, the Philippines adherence to the Paris
Convention
24
effectively obligates the country to
honor and enforce its provisions
25
as regards the
protection of industrial property of foreign nationals
in this country. However, any protection accorded
has to be made subject to the limitations of
Philippine laws.
26
Hence, despite Article 2 of the
Paris Convention which substantially provides that
(1) nationals of member-countries shall have in this
country rights specially provided by the Convention
as are consistent with Philippine laws, and enjoy the
privileges that Philippine laws now grant or may
hereafter grant to its nationals, and (2) while no
domicile requirement in the country where protection
is claimed shall be required of persons entitled to the
benefits of the Union for the enjoyment of any
industrial property rights,
27
foreign nationals must
still observe and comply with the conditions imposed
by Philippine law on its nationals.
Considering that R.A. No. 166, as amended,
specifically Sections 2
28
and 2-A
29
thereof, mandates
actual use of the marks and/or emblems in local
commerce and trade before they may be registered
and ownership thereof acquired, the petitioners
cannot, therefore, dispense with the element of actual
use. Their being nationals of member-countries of
the Paris Union does not alter the legal situation.
In Emerald Garment Mfg. Corporation v. Court of
Appeals,
30
the Court reiterated its rulings in Sterling
Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft,
31
Kabushi Kaisha Isetan v.
Intermediate Appellate Court,
32
and Philip Morris v.
Court of Appeals and Fortune Tobacco Corporation
33

on the importance of actual commercial use of a
trademark in the Philippines notwithstanding the
Paris Convention:
The provisions of the 1965 Paris Convention
relied upon by private respondent and Sec. 21-A of
the Trademark Law were sufficiently expounded
upon and qualified in the recent case of Philip
Morris, Inc., et. al. vs. Court of Appeals:
xxx xxx
xxx
Following universal acquiescence and comity, our
municipal law on trademarks regarding the
requirements of actual use in the Philippines must
subordinate an international agreement inasmuch as
the apparent clash is being decided by a municipal
tribunal. Xxx. Withal, the fact that international law
has been made part of the law of the land does not by
any means imply the primacy of international law
over national law in the municipal sphere. Under the
doctrine of incorporation as applied in most
countries, rules of International Law are given a
standing equal, not superior, to national legislative
enactments.
xxx xxx
xxx
In other words, (a foreign corporation) may have the
capacity to sue for infringement but the question
of whether they have an exclusive right over their
symbol as to justify issuance of the controversial writ
will depend on actual use of their trademarks in the
Philippines in line with Sections 2 and 2-A of the
same law. It is thus incongruous for petitioners to
claim that when a foreign corporation not licensed to
do business in the Philippines files a complaint for
infringement, the entity need not be actually using its
trademark in commerce in the Philippines. Such a
foreign corporation may have the personality to file a
suit for infringement but it may not necessarily be
entitled to protection due to absence of actual use of
the emblem in the local market.
Contrary to what petitioners suggest, the registration
of trademark cannot be deemed conclusive as to the
actual use of such trademark in local commerce. As
it were, registration does not confer upon the
registrant an absolute right to the registered mark.
The certificate of registration merely constitutes
prima facie evidence that the registrant is the owner
of the registered mark. Evidence of non-usage of the
mark rebuts the presumption of trademark
ownership,
34
as what happened here when petitioners
no less admitted not doing business in this country.
35

Most importantly, we stress that registration in the
Philippines of trademarks does not ipso facto convey
an absolute right or exclusive ownership thereof. To
borrow from Shangri-La International Hotel
Management, Ltd. v. Development Group of
Companies, Inc.
36
trademark is a creation of use and,
therefore, actual use is a pre-requisite to exclusive
ownership; registration is only an administrative
confirmation of the existence of the right of
ownership of the mark, but does not perfect such
right; actual use thereof is the perfecting ingredient.
37

Petitioners reliance on Converse Rubber
Corporation
38
is quite misplaced, that case being cast
in a different factual milieu. There, we ruled that a
foreign owner of a Philippine trademark, albeit not
licensed to do, and not so engaged in, business in the
Philippines, may actually earn reputation or goodwill
for its goods in the country. But unlike in the instant
case, evidence of actual sales of Converse rubber
shoes, such as sales invoices, receipts and the
testimony of a legitimate trader, was presented in
Converse.
This Court also finds the IP Code and the TRIPS
Agreement to be inapplicable, the infringement
complaint herein having been filed in August 1982
and tried under the aegis of R.A. No. 166, as
amended. The IP Code, however, took effect only on
January 1, 1998 without a provision as to its
retroactivity.
39
In the same vein, the TRIPS
Agreement was inexistent when the suit for
infringement was filed, the Philippines having
adhered thereto only on December 16, 1994.
With the foregoing perspective, it may be stated right
off that the registration of a trademark
unaccompanied by actual use thereof in the country
accords the registrant only the standing to sue for
infringement in Philippine courts. Entitlement to
protection of such trademark in the country is
entirely a different matter.
This brings us to the principal issue of infringement.
Section 22 of R.A. No. 166, as amended, defines
what constitutes trademark infringement, as follows:
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
tradename 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 of color ably imitate any
such mark or tradename 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.
Petitioners would insist on their thesis of
infringement since respondents mark "MARK" for
cigarettes is confusingly or deceptively similar with
their duly registered "MARK VII," "MARK TEN"
and "LARK" marks likewise for cigarettes. To them,
the word "MARK" would likely cause confusion in
the trade, or deceive purchasers, particularly as to the
source or origin of respondents cigarettes.
The "likelihood of confusion" is the gravamen of
trademark infringement.
40
But likelihood of
confusion is a relative concept, the particular, and
sometimes peculiar, circumstances of each case
being determinative of its existence. Thus, in
trademark infringement cases, more than in other
kinds of litigation, precedents must be evaluated in
the light of each particular case.
41

In determining similarity and likelihood of
confusion, jurisprudence has developed two tests: the
dominancy test and the holistic test.
42
The
dominancy test
43
sets sight on the similarity of the
prevalent features of the competing trademarks that
might cause confusion and deception, thus
constitutes infringement. Under this norm, the
question at issue turns on whether the use of the
marks involved would be likely to cause confusion
or mistake in the mind of the public or deceive
purchasers.
44

In contrast, the holistic test
45
entails a consideration
of the entirety of the marks as applied to the
products, including the labels and packaging, in
determining confusing similarity.
Upon consideration of the foregoing in the light of
the peculiarity of this case, we rule against the
likelihood of confusion resulting in infringement
arising from the respondents use of the trademark
"MARK" for its particular cigarette product.
For one, as rightly concluded by the CA after
comparing the trademarks involved in their entirety
as they appear on the products,
46
the striking
dissimilarities are significant enough to warn any
purchaser that one is different from the other. Indeed,
although the perceived offending word "MARK" is
itself prominent in petitioners trademarks "MARK
VII" and "MARK TEN," the entire marking system
should be considered as a whole and not dissected,
because a discerning eye would focus not only on the
predominant word but also on the other features
appearing in the labels. Only then would such
discerning observer draw his conclusion whether one
mark would be confusingly similar to the other and
whether or not sufficient differences existed between
the marks.
47

This said, the CA then, in finding that respondents
goods cannot be mistaken as any of the three
cigarette brands of the petitioners, correctly relied on
the holistic test.
But, even if the dominancy test were to be used, as
urged by the petitioners, but bearing in mind that a
trademark serves as a tool to point out distinctly the
origin or ownership of the goods to which it is
affixed,
48
the likelihood of confusion tantamount to
infringement appears to be farfetched. The reason for
the origin and/or ownership angle is that unless the
words or devices do so point out the origin or
ownership, the person who first adopted them cannot
be injured by any appropriation or imitation of them
by others, nor can the public be deceived.
49

Since the word "MARK," be it alone or in
combination with the word "TEN" and the Roman
numeral "VII," does not point to the origin or
ownership of the cigarettes to which they apply, the
local buying public could not possibly be confused
or deceived that respondents "MARK" is the
product of petitioners and/or originated from the
U.S.A., Canada or Switzerland. And lest it be
overlooked, no actual commercial use of petitioners
marks in local commerce was proven. There can thus
be no occasion for the public in this country,
unfamiliar in the first place with petitioners marks,
to be confused.
For another, a comparison of the trademarks as they
appear on the goods is just one of the appreciable
circumstances in determining likelihood of
confusion. Del Monte Corp. v. CA
50
dealt with
another, where we instructed to give due regard to
the "ordinary purchaser," thus:
The question is not whether the two articles are
distinguishable by their label when set side by side
but whether the general confusion made by the
article upon the eye of the casual purchaser who is
unsuspicious and off his guard, is such as to likely
result in his confounding it with the original. As
observed in several cases, the general impression of
the ordinary purchaser, buying under the normally
prevalent conditions in trade and giving the attention
such purchasers usually give in buying that class of
goods is the touchstone.
When we spoke of an "ordinary purchaser," the
reference was not to the "completely unwary
customer" but to the "ordinarily intelligent buyer"
considering the type of product involved.
51

It cannot be over-emphasized that the products
involved are addicting cigarettes purchased mainly
by those who are already predisposed to a certain
brand. Accordingly, the ordinary buyer thereof
would be all too familiar with his brand and
discriminating as well. We, thus, concur with the CA
when it held, citing a definition found in Dy Buncio
v. Tan Tiao Bok,
52
that the "ordinary purchaser" in
this case means "one accustomed to buy, and
therefore to some extent familiar with, the goods in
question."
Pressing on with their contention respecting the
commission of trademark infringement, petitioners
finally point to Section 22 of R.A. No. 166, as
amended. As argued, actual use of trademarks in
local commerce is, under said section, not a requisite
before an aggrieved trademark owner can restrain the
use of his trademark upon goods manufactured or
dealt in by another, it being sufficient that he had
registered the trademark or trade-name with the IP
Office. In fine, petitioners submit that respondent is
liable for infringement, having manufactured and
sold cigarettes with the trademark "MARK" which,
as it were, are identical and/or confusingly similar
with their duly registered trademarks "MARK VII,"
"MARK TEN" and "LARK".
This Court is not persuaded.
In Mighty Corporation v. E & J Gallo Winery,
53
the
Court held that the following constitute the elements
of trademark infringement in accordance not only
with Section 22 of R.A. No. 166, as amended, but
also Sections 2, 2-A, 9-A
54
and 20 thereof:
(a) a trademark actually used in commerce in
the Philippines and registered in the principal
register of the Philippine Patent Office,
(b) is used by another person in connection
with the sale, offering for sale, or advertising
of any goods, business or services or in
connection with which such use 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 such trademark is reproduced,
counterfeited, copied or colorably imitated by
another person and such reproduction,
counterfeit, copy or colorable imitation is
applied to labels, signs, prints, packages,
wrappers, receptacles or advertisements
intended to be used upon or in connection
with such goods, business or services as to
likely cause confusion or mistake or to
deceive purchasers,
(c) the trademark is used for identical or
similar goods, and
(d) such act is done without the consent of
the trademark registrant or
assignee.lawphil.net
As already found herein, while petitioners have
registered the trademarks "MARK VII," "MARK
TEN" and "LARK" for cigarettes in the Philippines,
prior actual commercial use thereof had not been
proven. In fact, petitioners judicial admission of not
doing business in this country effectively belies any
pretension to the contrary.
Likewise, we note that petitioners even failed to
support their claim that their respective marks are
well-known and/or have acquired goodwill in the
Philippines so as to be entitled to protection even
without actual use in this country in accordance with
Article 6bis
55
of the Paris Convention. As correctly
found by the CA, affirming that of the trial court:
xxx the records are bereft of evidence to establish
that the appellants [petitioners] products are indeed
well-known in the Philippines, either through actual
sale of the product or through different forms of
advertising. This finding is supported by the fact that
appellants admit in their Complaint that they are not
doing business in the Philippines, hence, admitting
that their products are not being sold in the local
market. We likewise see no cogent reason to disturb
the trial courts finding that the appellants failed to
establish that their products are widely known by
local purchasers as "(n)o specific magazine or
periodical published in the Philippines, or in other
countries but circulated locally" have been presented
by the appellants during trial. The appellants also
were not able to show the length of time or the extent
of the promotion or advertisement made to
popularize their products in the Philippines.
56

Last, but not least, we must reiterate that the issue of
trademark infringement is factual, with both the trial
and appellate courts having peremptorily found
allegations of infringement on the part of respondent
to be without basis. As we said time and time again,
factual determinations of the trial court, concurred in
by the CA, are final and binding on this Court.
57

For lack of convincing proof on the part of the
petitioners of actual use of their registered
trademarks prior to respondents use of its mark and
for petitioners failure to demonstrate confusing
similarity between said trademarks, the dismissal of
their basic complaint for infringement and the
concomitant plea for damages must be affirmed. The
law, the surrounding circumstances and the equities
of the situation call for this disposition.
WHEREFORE, the petition is hereby DENIED.
Accordingly, the assailed decision and resolution of
the Court of Appeals are AFFIRMED.
Costs against the petitioners.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Associate Justice
Chairperson
ANGELINA
SANDOVAL-
GUTIERREZ
Associate Justice
RENATO C.
CORONA
Asscociate Justice
ADOLFO S. AZCUNA
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above decision
were reached in consultation before the case was
assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to Article VIII, Section 13 of the
Constitution, and the Division Chairperson's
Attestation, it is hereby certified that the conclusions
in the above decision were reached in consultation
before the case was assigned to the writer of the
opinion of the Court.
ARTEMIO V. PANGANIBAN
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 166115 February 2, 2007
McDONALDS CORPORATION, Petitioner,
vs.
MACJOY FASTFOOD CORPORATION,
Respondent.
D E C I S I O N
GARCIA, J .:
In this petition for review on certiorari under Rule 45
of the Rules of Court, herein petitioner McDonalds
Corporation seeks the reversal and setting aside of
the following issuances of the Court of Appeals (CA)
in CA-G.R. SP No. 57247, to wit:
1. Decision dated 29 July 2004
1
reversing an
earlier decision of the Intellectual Property
Office (IPO) which rejected herein
respondent MacJoy FastFood Corporations
application for registration of the trademark
"MACJOY & DEVICE"; and
2. Resolution dated 12 November 2004
2

denying the petitioners motion for
reconsideration.
As culled from the record, the facts are as follows:
On 14 March 1991, respondent MacJoy Fastfood
Corporation, a domestic corporation engaged in the
sale of fast food products in Cebu City, filed with the
then Bureau of Patents, Trademarks and Technology
Transfer (BPTT), now the Intellectual Property
Office (IPO), an application, thereat identified as
Application Serial No. 75274, for the registration of
the trademark "MACJOY & DEVICE" for fried
chicken, chicken barbeque, burgers, fries, spaghetti,
palabok, tacos, sandwiches, halo-halo and steaks
under classes 29 and 30 of the International
Classification of Goods.
Petitioner McDonalds Corporation, a corporation
duly organized and existing under the laws of the
State of Delaware, USA, filed a verified Notice of
Opposition
3
against the respondents application
claiming that the trademark "MACJOY & DEVICE"
so resembles its corporate logo, otherwise known as
the Golden Arches or "M" design, and its marks
"McDonalds," McChicken," "MacFries," "BigMac,"
"McDo," "McSpaghetti," "McSnack," and "Mc,"
(hereinafter collectively known as the
MCDONALDS marks) such that when used on
identical or related goods, the trademark applied for
would confuse or deceive purchasers into believing
that the goods originate from the same source or
origin. Likewise, the petitioner alleged that the
respondents use and adoption in bad faith of the
"MACJOY & DEVICE" mark would falsely tend to
suggest a connection or affiliation with petitioners
restaurant services and food products, thus,
constituting a fraud upon the general public and
further cause the dilution of the distinctiveness of
petitioners registered and internationally recognized
MCDONALDS marks to its prejudice and
irreparable damage. The application and the
opposition thereto was docketed as Inter Partes Case
No. 3861.
Respondent denied the aforementioned allegations of
the petitioner and averred that it has used the mark
"MACJOY" for the past many years in good faith
and has spent considerable sums of money for said
marks extensive promotion in tri-media, especially
in Cebu City where it has been doing business long
before the petitioner opened its outlet thereat
sometime in 1992; and that its use of said mark
would not confuse affiliation with the petitioners
restaurant services and food products because of the
differences in the design and detail of the two (2)
marks.
In a decision
4
dated December 28, 1998, the IPO,
ratiocinating that the predominance of the letter "M,"
and the prefixes "Mac/Mc" in both the "MACJOY"
and the "MCDONALDS" marks lead to the
conclusion that there is confusing similarity between
them especially since both are used on almost the
same products falling under classes 29 and 30 of the
International Classification of Goods, i.e., food and
ingredients of food, sustained the petitioners
opposition and rejected the respondents application,
viz:
WHEREFORE, the Opposition to the registration of
the mark MACJOY & DEVICE for use in fried
chicken and chicken barbecue, burgers, fries,
spaghetti, palabok, tacos, sandwiches, halo-halo, and
steaks is, as it is hereby, SUSTAINED. Accordingly,
Application Serial No. 75274 of the herein
Respondent-Applicant is REJECTED.
Let the filewrapper of MACJOY subject matter of
this case be sent to the Administrative, Financial and
Human Resources Development Bureau for
appropriate action in accordance with this Decision,
with a copy to be furnished the Bureau of
Trademarks for information and to update its record.
SO ORDERED.
In time, the respondent moved for a reconsideration
but the IPO denied the motion in its Order
5
of
January 14, 2000.
Therefrom, the respondent went to the CA via a
Petition for Review with prayer for Preliminary
Injunction
6
under Rule 43 of the Rules of Court,
whereat its appellate recourse was docketed as CA-
G.R. SP No. 57247.
Finding no confusing similarity between the marks
"MACJOY" and "MCDONALDS," the CA, in its
herein assailed Decision
7
dated July 29, 2004,
reversed and set aside the appealed IPO decision and
order, thus:
WHEREFORE, in view of the foregoing, judgment
is hereby rendered by us REVERSING and
SETTING ASIDE the Decision of the IPO dated 28
December 1998 and its Order dated 14 January 2000
and ORDERING the IPO to give due course to
petitioners Application Serial No. 75274.
SO ORDERED.
Explains the CA in its decision:
xxx, it is clear that the IPO brushed aside and
rendered useless the glaring and drastic differences
and variations in style of the two trademarks and
even decreed that these pronounced differences are
"miniscule" and considered them to have been
"overshadowed by the appearance of the
predominant features" such as "M," "Mc," and
"Mac" appearing in both MCDONALDS and
MACJOY marks. Instead of taking into account
these differences, the IPO unreasonably shrugged off
these differences in the device, letters and marks in
the trademark sought to be registered. The IPO
brushed aside and ignored the following irrefutable
facts and circumstances showing differences
between the marks of MACJOY and
MCDONALDS. They are, as averred by the
petitioner [now respondent]:
1. The word "MacJoy" is written in round
script while the word "McDonalds" is
written in single stroke gothic;
2. The word "MacJoy" comes with the
picture of a chicken head with cap and bowtie
and wings sprouting on both sides, while the
word "McDonalds" comes with an arches
"M" in gold colors, and absolutely without
any picture of a chicken;
3. The word "MacJoy" is set in deep pink and
white color scheme while "McDonalds" is
written in red, yellow and black color
combination;
4. The faade of the respective stores of the
parties are entirely different. Exhibits 1 and
1-A, show that [respondents] restaurant is
set also in the same bold, brilliant and
noticeable color scheme as that of its
wrappers, containers, cups, etc., while
[petitioners] restaurant is in yellow and red
colors, and with the mascot of "Ronald
McDonald" being prominently displayed
therein." (Words in brackets supplied.)
Petitioner promptly filed a motion for
reconsideration. However, in its similarly challenged
Resolution
8
of November 12, 2004, the CA denied
the motion, as it further held:
Whether a mark or label of a competitor resembles
another is to be determined by an inspection of the
points of difference and resemblance as a whole, and
not merely the points of resemblance. The articles
and trademarks employed and used by the
[respondent] Macjoy Fastfood Corporation are so
different and distinct as to preclude any probability
or likelihood of confusion or deception on the part of
the public to the injury of the trade or business of the
[petitioner] McDonalds Corporation. The "Macjoy
& Device" mark is dissimilar in color, design,
spelling, size, concept and appearance to the
McDonalds marks. (Words in brackets supplied.)
Hence, the petitioners present recourse on the
following grounds:
I.
THE COURT OF APPEALS ERRED IN RULING
THAT RESPONDENTS "MACJOY & DEVICE"
MARK IS NOT CONFUSINGLY SIMILAR TO
PETITIONERS "McDONALDS MARKS." IT
FAILED TO CORRECTLY APPLY THE
DOMINANCY TEST WHICH HAS BEEN
CONSISTENTLY APPLIED BY THIS
HONORABLE COURT IN DETERMINING THE
EXISTENCE OF CONFUSING SIMILARITY
BETWEEN COMPETING MARKS.
A. The McDonalds Marks belong to a well-
known and established "family of marks"
distinguished by the use of the prefix "Mc"
and/or "Mac" and the corporate "M" logo
design.
B. The prefix "Mc" and/or "Mac" is the
dominant portion of both Petitioners
McDonalds Marks and the Respondents
"Macjoy & Device" mark. As such, the
marks are confusingly similar under the
Dominancy Test.
C. Petitioners McDonalds Marks are well-
known and world-famous marks which must
be protected under the Paris Convention.
II.
THE COURT OF APPEALS ERRED IN RULING
THAT THE DECISION OF THE IPO DATED 28
DECEMBER 1998 AND ITS ORDER DATED 14
JANUARY 2000 WERE NOT BASED ON
SUBSTANTIAL EVIDENCE.
In its Comment,
9
the respondent asserts that the
petition should be dismissed outright for being
procedurally defective: first, because the person who
signed the certification against forum shopping in
behalf of the petitioner was not specifically
authorized to do so, and second, because the petition
does not present a reviewable issue as what it
challenges are the factual findings of the CA. In any
event, the respondent insists that the CA committed
no reversible error in finding no confusing similarity
between the trademarks in question.
The petition is impressed with merit.
Contrary to respondents claim, the petitioners
Managing Counsel, Sheila Lehr, was specifically
authorized to sign on behalf of the petitioner the
Verification and Certification
10
attached to the
petition. As can be gleaned from the petitioners
Board of Directors Resolution dated December 5,
2002, as embodied in the Certificate of the Assistant
Secretary dated December 21, 2004,
11
Sheila Lehr
was one of those authorized and empowered "to
execute and deliver for and on behalf of [the
petitioner] all documents as may be required in
connection with x x x the protection and
maintenance of any foreign patents, trademarks,
trade-names, and copyrights owned now or hereafter
by [the petitioner], including, but not limited to, x x
x documents required to institute opposition or
cancellation proceedings against conflicting
trademarks, and to do such other acts and things and
to execute such other documents as may be
necessary and appropriate to effect and carry out the
intent of this resolution." Indeed, the afore-stated
authority given to Lehr necessarily includes the
authority to execute and sign the mandatorily
required certification of non-forum shopping to
support the instant petition for review which
stemmed from the "opposition proceedings" lodged
by the petitioner before the IPO. Considering that the
person who executed and signed the certification
against forum shopping has the authority to do so,
the petition, therefore, is not procedurally defective.
As regards the respondents argument that the
petition raises only questions of fact which are not
proper in a petition for review, suffice it to say that
the contradictory findings of the IPO and the CA
constrain us to give due course to the petition, this
being one of the recognized exceptions to Section 1,
Rule 45 of the Rules of Court. True, this Court is not
the proper venue to consider factual issues as it is not
a trier of facts.
12
Nevertheless, when the factual
findings of the appellate court are mistaken, absurd,
speculative, conjectural, conflicting, tainted with
grave abuse of discretion, or contrary to the findings
culled by the court of origin,
13
as here, this Court
will review them.
The old Trademark Law, Republic Act (R.A.) No.
166, as amended, defines a "trademark" as any
distinctive word, name, symbol, emblem, sign, or
device, or any combination thereof adopted and used
by a manufacturer or merchant on his goods to
identify and distinguish them from those
manufactured, sold, or dealt in by others.
14

Under the same law, the registration of a trademark
is subject to the provisions of Section 4 thereof,
paragraph (d) of which is pertinent to this case. The
provision reads:
Section 4. Registration of trademarks, trade-names
and service-marks on the principal register. There
is hereby established a register of trademarks,
tradenames and service-marks which shall be known
as the principal register. The owner of the trade-
mark, trade-name or service-mark used to distinguish
his goods, business or services of others shall have
the right to register the same on the principal
register, unless it:
xxx xxx xxx
(d) Consists of or comprises a mark or trade-name
which so resembles a mark or trade-name registered
in the Philippines or a mark or trade-name previously
used in the Philippines by another and 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;
xxx xxx xxx
Essentially, the issue here is whether there is a
confusing similarity between the MCDONALDS
marks of the petitioner and the respondents
"MACJOY & DEVICE" trademark when applied to
Classes 29 and 30 of the International Classification
of Goods, i.e., food and ingredients of food.
In determining similarity and likelihood of
confusion, jurisprudence has developed two tests, the
dominancy test and the holistic test.
15
The
dominancy test focuses on the similarity of the
prevalent features of the competing trademarks that
might cause confusion or deception.
16
In contrast, the
holistic test requires the court to consider the entirety
of the marks as applied to the products, including the
labels and packaging, in determining confusing
similarity.
17
Under the latter test, a comparison of the
words is not the only determinant factor.
18

1awphi1.net
Here, the IPO used the dominancy test in concluding
that there was confusing similarity between the two
(2) trademarks in question as it took note of the
appearance of the predominant features "M", "Mc"
and/or "Mac" in both the marks. In reversing the
conclusion reached by the IPO, the CA, while
seemingly applying the dominancy test, in fact
actually applied the holistic test. The appellate court
ruled in this wise:
Applying the Dominancy test to the present case, the
IPO should have taken into consideration the entirety
of the two marks instead of simply fixing its gaze on
the single letter "M" or on the combinations "Mc" or
"Mac". A mere cursory look of the subject marks
will reveal that, save for the letters "M" and "c", no
other similarity exists in the subject marks.
We agree with the [respondent] that it is entirely
unwarranted for the IPO to consider the prefix "Mac"
as the predominant feature and the rest of the designs
in [respondents] mark as details. Taking into
account such paramount factors as color, designs,
spelling, sound, concept, sizes and audio and visual
effects, the prefix "Mc" will appear to be the only
similarity in the two completely different marks; and
it is the prefix "Mc" that would thus appear as the
miniscule detail. When pitted against each other, the
two marks reflect a distinct and disparate visual
impression that negates any possible confusing
similarity in the mind of the buying public. (Words
in brackets supplied.)
Petitioner now vigorously points out that the
dominancy test should be the one applied in this
case.
We agree.
In trademark cases, particularly in ascertaining
whether one trademark is confusingly similar to
another, no set rules can be deduced because each
case must be decided on its merits.
19
In such cases,
even more than in any other litigation, precedent
must be studied in the light of the facts of the
particular case.
20
That is the reason why in trademark
cases, jurisprudential precedents should be applied
only to a case if they are specifically in point.
21

While we agree with the CAs detailed enumeration
of differences between the two (2) competing
trademarks herein involved, we believe that the
holistic test is not the one applicable in this case, the
dominancy test being the one more suitable. In
recent cases with a similar factual milieu as here, the
Court has consistently used and applied the
dominancy test in determining confusing similarity
or likelihood of confusion between competing
trademarks.
22

Notably, in McDonalds Corp. v. LC Big Mak
Burger, Inc.,
23
a case where the trademark "Big
Mak" was found to be confusingly similar with the
"Big Mac" mark of the herein the petitioner, the
Court explicitly held:
This Court, xxx, has relied on the dominancy test
rather than the holistic test. The dominancy test
considers the dominant features in the competing
marks in determining whether they are confusingly
similar. Under the dominancy test, courts give
greater weight to the similarity of the appearance of
the product arising from the adoption of the
dominant features of the registered mark,
disregarding minor differences. Courts will consider
more the aural and visual impressions created by the
marks in the public mind, giving little weight to
factors like prices, quality, sales outlets and market
segments.
Moreover, in Societe Des Produits Nestle, S.A. v.
CA
24
the Court, applying the dominancy test,
concluded that the use by the respondent therein of
the word "MASTER" for its coffee product
"FLAVOR MASTER" was likely to cause confusion
with therein petitioners coffee products "MASTER
ROAST" and "MASTER BLEND" and further ruled:
xxx, the totality or holistic test is contrary to the
elementary postulate of the law on trademarks and
unfair competition that confusing similarity is to be
determined on the basis of visual, aural, connotative
comparisons and overall impressions engendered by
the marks in controversy as they are encountered in
the marketplace. The totality or holistic test only
relies on visual comparisons between two trademarks
whereas the dominancy test relies not only on the
visual but also on the aural and connotative
comparisons and overall impressions between the
two trademarks.
Applying the dominancy test to the instant case, the
Court finds that herein petitioners
"MCDONALDS" and respondents "MACJOY"
marks are confusingly similar with each other such
that an ordinary purchaser can conclude an
association or relation between the marks.
To begin with, both marks use the corporate "M"
design logo and the prefixes "Mc" and/or "Mac" as
dominant features. The first letter "M" in both marks
puts emphasis on the prefixes "Mc" and/or "Mac" by
the similar way in which they are depicted i.e. in an
arch-like, capitalized and stylized manner.
25

For sure, it is the prefix "Mc," an abbreviation of
"Mac," which visually and aurally catches the
attention of the consuming public. Verily, the word
"MACJOY" attracts attention the same way as did
"McDonalds," "MacFries," "McSpaghetti," "McDo,"
"Big Mac" and the rest of the MCDONALDS marks
which all use the prefixes Mc and/or Mac.
Besides and most importantly, both trademarks are
used in the sale of fastfood products. Indisputably,
the respondents trademark application for the
"MACJOY & DEVICE" trademark covers goods
under Classes 29 and 30 of the International
Classification of Goods, namely, fried chicken,
chicken barbeque, burgers, fries, spaghetti, etc.
Likewise, the petitioners trademark registration for
the MCDONALDS marks in the Philippines covers
goods which are similar if not identical to those
covered by the respondents application.
Thus, we concur with the IPOs findings that:
In the case at bar, the predominant features such as
the "M," "Mc," and "Mac" appearing in both
McDonalds marks and the MACJOY & DEVICE"
easily attract the attention of would-be customers.
Even non-regular customers of their fastfood
restaurants would readily notice the predominance of
the "M" design, "Mc/Mac" prefixes shown in both
marks. Such that the common awareness or
perception of customers that the trademarks
McDonalds mark and MACJOY & DEVICE are one
and the same, or an affiliate, or under the
sponsorship of the other is not far-fetched.
The differences and variations in styles as the device
depicting a head of chicken with cap and bowtie and
wings sprouting on both sides of the chicken head,
the heart-shaped "M," and the stylistic letters in
"MACJOY & DEVICE;" in contrast to the arch-like
"M" and the one-styled gothic letters in McDonalds
marks are of no moment. These minuscule variations
are overshadowed by the appearance of the
predominant features mentioned hereinabove.
Thus, with the predominance of the letter "M," and
prefixes "Mac/Mc" found in both marks, the
inevitable conclusion is there is confusing similarity
between the trademarks Mc Donalds marks and
"MACJOY AND DEVICE" especially considering
the fact that both marks are being used on almost the
same products falling under Classes 29 and 30 of the
International Classification of Goods i.e. Food and
ingredients of food.
With the existence of confusing similarity between
the subject trademarks, the resulting issue to be
resolved is who, as between the parties, has the
rightful claim of ownership over the said marks.
We rule for the petitioner.
A mark is valid if it is distinctive and hence not
barred from registration under the Trademark Law.
However, once registered, not only the marks
validity but also the registrants ownership thereof is
prima facie presumed.
26

Pursuant to Section 37
27
of R.A. No. 166, as
amended, as well as the provision regarding the
protection of industrial property of foreign nationals
in this country as embodied in the Paris Convention
28

under which the Philippines and the petitioners
domicile, the United States, are adherent-members,
the petitioner was able to register its
MCDONALDS marks successively, i.e.,
"McDonalds" in 04 October, 1971
29
; the corporate
logo which is the "M" or the golden arches design
and the "McDonalds" with the "M" or golden arches
design both in 30 June 1977
30
; and so on and so
forth.
31

On the other hand, it is not disputed that the
respondents application for registration of its
trademark "MACJOY & DEVICE" was filed only on
March 14, 1991 albeit the date of first use in the
Philippines was December 7, 1987.
32

Hence, from the evidence on record, it is clear that
the petitioner has duly established its ownership of
the mark/s.
Respondents contention that it was the first user of
the mark in the Philippines having used "MACJOY
& DEVICE" on its restaurant business and food
products since December, 1987 at Cebu City while
the first McDonalds outlet of the petitioner thereat
was opened only in 1992, is downright
unmeritorious. For the requirement of "actual use in
commerce x x x in the Philippines" before one may
register a trademark, trade-name and service mark
under the Trademark Law
33
pertains to the territorial
jurisdiction of the Philippines and is not only
confined to a certain region, province, city or
barangay.
Likewise wanting in merit is the respondents claim
that the petitioner cannot acquire ownership of the
word "Mac" because it is a personal name which
may not be monopolized as a trademark as against
others of the same name or surname. As stated
earlier, once a trademark has been registered, the
validity of the mark is prima facie presumed. In this
case, the respondent failed to overcome such
presumption. We agree with the observations of the
petitioner regarding the respondents explanation
that the word "MACJOY" is based on the name of its
presidents niece, Scarlett Yu Carcell. In the words
of the petitioner:
First of all, Respondent failed to present evidence to
support the foregoing claim which, at best, is a mere
self-serving assertion. Secondly, it cannot be denied
that there is absolutely no connection between the
name "Scarlett Yu Carcel" and "MacJoy" to merit
the coinage of the latter word. Even assuming that
the word "MacJoy" was chosen as a term of
endearment, fondness and affection for a certain
Scarlett Yu Carcel, allegedly the niece of
Respondents president, as well as to supposedly
bring good luck to Respondents business, one
cannot help but wonder why out of all the possible
letters or combinations of letters available to
Respondent, its president had to choose and adopt a
mark with the prefix "Mac" as the dominant feature
thereof. A more plausible explanation perhaps is that
the niece of Respondents president was fond of the
food products and services of the Respondent, but
that is beside the point."
34

By reason of the respondents implausible and
insufficient explanation as to how and why out of the
many choices of words it could have used for its
trade-name and/or trademark, it chose the word
"MACJOY," the only logical conclusion deducible
therefrom is that the respondent would want to ride
high on the established reputation and goodwill of
the MCDONALDs marks, which, as applied to
petitioners restaurant business and food products, is
undoubtedly beyond question.
Thus, the IPO was correct in rejecting and denying
the respondents application for registration of the
trademark "MACJOY & DEVICE." As this Court
ruled in Faberge Inc. v. IAC,
35
citing Chuanchow
Soy & Canning Co. v. Dir. of Patents and
Villapanta:
36

When one applies for the registration of a trademark
or label which is almost the same or very closely
resembles one already used and registered by
another, the application should be rejected and
dismissed outright, even without any opposition on
the part of the owner and user of a previously
registered label or trademark, this not only to avoid
confusion on the part of the public, but also to
protect an already used and registered trademark and
an established goodwill.
WHEREFORE, the instant petition is GRANTED.
Accordingly, the assailed Decision and Resolution of
the Court of Appeals in CA-G.R. SP NO. 57247, are
REVERSED and SET ASIDE and the Decision of
the Intellectual Property Office in Inter Partes Case
No. 3861 is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
epublic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 138900 September 20, 2005
LEVI STRAUSS & CO., & LEVI STRAUSS
(PHILS.), INC., Petitioners,
vs.
CLINTON APPARELLE, INC., Respondent.
D E C I S I O N
Tinga, J .:
Before us is a petition for review on certiorari
1
under
Rule 45 of the 1997 Rules of Civil Procedure filed
by Levi Strauss & Co. (LS & Co.) and Levi Strauss
(Philippines), Inc. (LSPI) assailing the Court of
Appeals Decision
2
and Resolution
3
respectively
dated 21 December 1998 and 10 May 1999. The
questioned Decision granted respondents prayer for
a writ of preliminary injunction in its Petition
4
and
set aside the trial courts orders dated 15 May 1998
5

and 4 June 1998
6
which respectively granted
petitioners prayer for the issuance of a temporary
restraining order (TRO) and application for the
issuance of a writ of preliminary injunction.
This case stemmed from the Complaint
7
for
Trademark Infringement, Injunction and Damages
filed by petitioners LS & Co. and LSPI against
respondent Clinton Apparelle, Inc.
*
(Clinton
Aparelle) together with an alternative defendant,
Olympian Garments, Inc. (Olympian Garments),
before the Regional Trial Court of Quezon City,
Branch 90.
8
The Complaint was docketed as Civil
Case No. Q-98-34252, entitled "Levi Strauss & Co.
and Levi Strauss (Phils.), Inc. v. Clinton Aparelle,
Inc. and/or Olympian Garments, Inc."
The Complaint alleged that LS & Co., a foreign
corporation duly organized and existing under the
laws of the State of Delaware, U.S.A., and engaged
in the apparel business, is the owner by prior
adoption and use since 1986 of the internationally
famous "Dockers and Design" trademark. This
ownership is evidenced by its valid and existing
registrations in various member countries of the
Paris Convention. In the Philippines, it has a
Certificate of Registration No. 46619 in the Principal
Register for use of said trademark on pants, shirts,
blouses, skirts, shorts, sweatshirts and jackets under
Class 25.
9

The "Dockers and Design" trademark was first used
in the Philippines in or about May 1988, by LSPI, a
domestic corporation engaged in the manufacture,
sale and distribution of various products bearing
trademarks owned by LS & Co. To date, LSPI
continues to manufacture and sell Dockers Pants
with the "Dockers and Design" trademark.
10

LS & Co. and LSPI further alleged that they
discovered the presence in the local market of jeans
under the brand name "Paddocks" using a device
which is substantially, if not exactly, similar to the
"Dockers and Design" trademark owned by and
registered in the name of LS & Co., without its
consent. Based on their information and belief, they
added, Clinton Apparelle manufactured and
continues to manufacture such "Paddocks" jeans and
other apparel.
However, since LS & Co. and LSPI are unsure if
both, or just one of impleaded defendants are behind
the manufacture and sale of the "Paddocks" jeans
complained of, they brought this suit under Section
13, Rule 3
11
of the 1997 Rules of Civil Procedure.
12

The Complaint contained a prayer that reads as
follows:
1. That upon the filing of this complaint, a temporary
restraining order be immediately issued restraining
defendants, their officers, employees, agents,
representatives, dealers, retailers or assigns from
committing the acts herein complained of, and,
specifically, for the defendants, their officers,
employees, agents, representatives, dealers and
retailers or assigns, to cease and desist from
manufacturing, distributing, selling, offering for sale,
advertising, or otherwise using denims, jeans or
pants with the design herein complained of as
substantially, if not exactly similar, to plaintiffs
"Dockers and Design" trademark.
2. That after notice and hearing, and pending trial on
the merits, a writ of preliminary injunction be issued
enjoining defendants, their officers, employees,
agents, dealers, retailers, or assigns from
manufacturing, distributing, selling, offering for sale,
advertising, jeans the design herein complained of as
substantially, if not exactly similar, to plaintiffs
"Dockers and Design" trademark.
3. That after trial on the merits, judgment be
rendered as follows:
a. Affirming and making permanent the writ of
preliminary injunction;
b. Ordering that all infringing jeans in the possession
of either or both defendants as the evidence may
warrant, their officers, employees, agents, retailers,
dealers or assigns, be delivered to the Honorable
Court of plaintiffs, and be accordingly destroyed;
13

Acting on the prayer for the issuance of a TRO, the
trial court issued an Order
14
setting it for hearing on
5 May 1998. On said date, as respondent failed to
appear despite notice and the other defendant,
Olympian Garments, had yet to be notified, the
hearing was re-scheduled on 14 May 1998.
15

On 14 May 1998, neither Clinton Apparelle nor
Olympian Garments appeared. Clinton Apparelle
claimed that it was not notified of such hearing. Only
Olympian Garments allegedly had been issued with
summons. Despite the absence of the defendants, the
hearing on the application for the issuance of a TRO
continued.
16

The following day, the trial court issued an Order
17

granting the TRO applied for, the pertinent portions
of which state:
Considering the absence of counsel/s for the
defendant/s during the summary hearing scheduled
on May 5, 1998 and also during the re-scheduled
summary hearing held on May 14, 1998 set for the
purpose of determining whether or not a Temporary
Restraining Order shall be issued, this Court allowed
the counsel for the plaintiffs to present on May 14,
1998 their arguments/evidences in support of their
application. After hearing the arguments presented
by the counsel for the plaintiffs during the summary
hearing, this Court is of the considered and humble
view that grave injustice and irreparable injury to the
plaintiffs would arise before the matter of whether or
not the application for the issuance of a Writ of
Preliminary Injunction can be heard, and that, in the
interest of justice, and in the meantime, a Temporary
Restraining Order be issued.
WHEREFORE, let this Temporary Restraining
Order be issued restraining the defendants, their
officers, employees, agents, representatives, dealers,
retailers or assigns from committing the acts
complained of in the verified Complaint, and
specifically, for the defendants, their officers,
employees, agents, representatives, dealers and
retailers or assigns, to cease and desist from
manufacturing, distributing, selling, offering for sale,
advertising or otherwise using denims, jeans or pants
with the design complained of in the verified
Complaint as substantially, if not exactly similar, to
plaintiffs "Dockers and Design" trademark; until
after the application/prayer for the issuance of a Writ
of Preliminary Injunction is heard/resolved, or until
further orders from this Court.
The hearing on the application for the issuance of a
Writ of Preliminary Injunction as embodied in the
verified Complaint is set on May 26, 1998 (Tuesday)
at 2:00 P.M. which setting is intransferable in
character considering that the lifetime of this
Temporary Restraining Order is twenty (20) days
from date hereof.
18

On 4 June 1998, the trial court issued another
Order
19
granting the writ of preliminary injunction,
to wit:
O R D E R
This resolves the plaintiffs application or prayer for
the issuance of a writ of preliminary injunction as
embodied in the verified complaint in this case.
Parenthetically, this Court earlier issued a temporary
restraining order. (see Order dated May 15, 1998; see
also Order dated May 26, 1998)
After a careful perusal of the contents of the
pleadings and documents on record insofar as they
are pertinent to the issue under consideration, this
Court finds that at this point in time, the plaintiffs
appear to be entitled to the relief prayed for and this
Court is of the considered belief and humble view
that, without necessarily delving on the merits, the
paramount interest of justice will be better served if
the status quo shall be maintained and that an
injunction bond of P2,500,000.00 appears to be in
order. (see Sections 3 and 4, Rule 58, 1997 Rules of
Civil Procedure)
IN VIEW OF THE FOREGOING, the plaintiffs
prayer for the issuance of a writ of preliminary
injunction is GRANTED. Accordingly, upon the
plaintiffs filing, within ten (10) days from their
receipt hereof, an injunction bond of P2,500,000.00
executed to the defendants to the effect that the
plaintiffs will pay all damages the defendants may
sustain by reason of this injunction in case the Court
should finally decide that the plaintiffs are not
entitled thereto, let a writ of preliminary injunction
issue enjoining or restraining the commission of the
acts complained of in the verified Complaint in this
case, and specifically, for the defendants, their
officers, employees, agents, representatives, dealers
and retailers or assigns or persons acting in their
behalf to cease and desist from manufacturing,
distributing, selling, offering for sale, advertising, or
otherwise using, denims, jeans or pants with the
design complained of in the verified Complaint in
this case, which is substantially, if not exactly,
similar to plaintiffs "DOCKERS and DESIGN"
trademark or logo as covered by the Bureau of
Patents, Trademarks and Technology Transfer
Certificate of Registration No. 46619, until after this
case shall have been decided on the merits and/or
until further orders from this Court.
20

The evidence considered by the trial court in
granting injunctive relief were as follows: (1) a
certified true copy of the certificate of trademark
registration for "Dockers and Design"; (2) a pair of
DOCKERS pants bearing the "Dockers and Design"
trademark; (3) a pair of "Paddocks" pants bearing
respondents assailed logo; (4) the Trends MBL
Survey Report purportedly proving that there was
confusing similarity between two marks; (5) the
affidavit of one Bernabe Alajar which recounted
petitioners prior adoption, use and registration of the
"Dockers and Design" trademark; and (6) the
affidavit of one Mercedes Abad of Trends MBL, Inc.
which detailed the methodology and procedure used
in their survey and the results thereof.
21

Clinton Apparelle thereafter filed a Motion to
Dismiss
22
and a Motion for Reconsideration
23
of the
Order granting the writ of preliminary injunction.
Meantime, the trial court issued an Order
24

approving the bond filed by petitioners.
On 22 June 1998, the trial court required
25
the parties
to file their "respective citation of authorities/
jurisprudence/Supreme Court decisions" on whether
or not the trial court may issue the writ of
preliminary injunction pending the resolution of the
Motion for Reconsideration and the Motion to
Dismiss filed by respondent.
On 2 October 1998, the trial court denied Clinton
Apparelles Motion to Dismiss and Motion for
Reconsideration in an Omnibus Order,
26
the
pertinent portions of which provide:
After carefully going over the contents of the
pleadings in relation to pertinent portions of the
records, this Court is of the considered and humble
view that:
On the first motion, the arguments raised in the
plaintiffs aforecited Consolidated Opposition
appears to be meritorious. Be that as it may, this
Court would like to emphasize, among other things,
that the complaint states a cause of action as
provided under paragraphs 1 to 18 thereof.
On the second motion, the arguments raised in the
plaintiffs aforecited Consolidated Opposition
likewise appear to be impressed with merit. Besides,
there appears to be no strong and cogent reason to
reconsider and set aside this Courts Order dated
June 4, 1998 as it has been shown so far that the
trademark or logo of defendants is substantially, if
not exactly, similar to plaintiffs "DOCKERS and
DESIGN" trademark or logo as covered by BPTTT
Certificate of Registration No. 46619 even as the
BPTTT Certificate of Registration No. 49579 of
Clinton Apparelle, Inc. is only for the mark or word
"PADDOCKS" (see Records, p. 377) In any event,
this Court had issued an Order dated June 18, 1998
for the issuance of the writ of preliminary injunction
after the plaintiffs filed the required bond of
P2,500,000.00.
IN VIEW OF THE FOREGOING, the aforecited
Motion To Dismiss and Motion For Reconsideration
are both DENIED for lack of merit, and accordingly,
this Courts Order dated June 18, 1998 for the
issuance of the writ of preliminary injunction is
REITERATED so the writ of preliminary injunction
could be implemented unless the implementation
thereof is restrained by the Honorable Court of
Appeals or Supreme Court.
The writ of preliminary injunction was thereafter
issued on 8 October 1998.
27

Thus, Clinton Apparelle filed with the Court of
Appeals a Petition
28
for certiorari, prohibition and
mandamus with prayer for the issuance of a
temporary restraining order and/or writ of
preliminary injunction, assailing the orders of the
trial court dated 15 May 1998, 4 June 1998 and 2
October 1998.
On 20 October 1998, the Court of Appeals issued a
Resolution
29
requiring herein petitioners to file their
comment on the Petition and at the same time issued
the prayed-for temporary restraining order.
The appellate court rendered on 21 December 1998
its now assailed Decision granting Clinton
Apparelles petition. The Court of Appeals held that
the trial court did not follow the procedure required
by law for the issuance of a temporary restraining
order as Clinton Apparelle was not duly notified of
the date of the summary hearing for its issuance.
Thus, the Court of Appeals ruled that the TRO had
been improperly issued.
30

The Court of Appeals also held that the issuance of
the writ of preliminary injunction is questionable. In
its opinion, herein petitioners failed to sufficiently
establish its material and substantial right to have the
writ issued. Secondly, the Court of Appeals observed
that the survey presented by petitioners to support
their contentions was commissioned by petitioners.
The Court of Appeals remarked that affidavits taken
ex-parte are generally considered to be inferior to
testimony given in open court. The appellate court
also considered that the injury petitioners have
suffered or are currently suffering may be
compensated in terms of monetary consideration, if
after trial, a final judgment shall be rendered in their
favor.
31

In addition, the Court of Appeals strongly believed
that the implementation of the questioned writ would
effectively shut down respondents business, which
in its opinion should not be sanctioned. The Court of
Appeals thus set aside the orders of the trial court
dated 15 May 1998 and 4 June 1998, respectively
issuing a temporary restraining order and granting
the issuance of a writ of preliminary injunction.
With the denial of their Motion for
Reconsideration,
32
petitioners are now before this
Court seeking a review of the appellate courts
Decision and Resolution. LS & Co. and LSPI claim
that the Court of Appeals committed serious error in:
(1) disregarding the well-defined limits of the writ of
certiorari that questions on the sufficiency of
evidence are not to be resolved in such a petition; (2)
in holding that there was no confusion between the
two marks; (3) in ruling that the erosion of
petitioners trademark is not protectable by
injunction; (4) in ignoring the procedure previously
agreed on by the parties and which was adopted by
the trial court; and (5) in declaring that the
preliminary injunction issued by the trial court will
lead to the closure of respondents business.
In its Comment,
33
Clinton Apparelle maintains that
only questions of law may be raised in an appeal by
certiorari under Rule 45 of the Rules of Court. It
asserts that the question of whether the Court of
Appeals erred in: (1) disregarding the survey
evidence; (2) ruling that there was no confusion
between the two marks; and (c) finding that the
erosion of petitioners trademark may not be
protected by injunction, are issues not within the
ambit of a petition for review on certiorari under
Rule 45. Clinton Apparelle also contends that the
Court of Appeals acted correctly when it overturned
the writ of preliminary injunction issued by the trial
court. It believes that the issued writ in effect
disturbed the status quo and disposed of the main
case without trial.
There is no merit in the petition.
At issue is whether the issuance of the writ of
preliminary injunction by the trial court was proper
and whether the Court of Appeals erred in setting
aside the orders of the trial court.
Section 1, Rule 58 of the Rules of Court defines a
preliminary injunction as an order granted at any
stage of an action prior to the judgment or final order
requiring a party or a court, agency or a person to
refrain from a particular act or acts. Injunction is
accepted as the strong arm of equity or a
transcendent remedy to be used cautiously as it
affects the respective rights of the parties, and only
upon full conviction on the part of the court of its
extreme necessity. An extraordinary remedy,
injunction is designed to preserve or maintain the
status quo of things and is generally availed of to
prevent actual or threatened acts until the merits of
the case can be heard.
34
It may be resorted to only by
a litigant for the preservation or protection of his
rights or interests and for no other purpose during the
pendency of the principal action.
35
It is resorted to
only when there is a pressing necessity to avoid
injurious consequences, which cannot be remedied
under any standard compensation. The resolution of
an application for a writ of preliminary injunction
rests upon the existence of an emergency or of a
special recourse before the main case can be heard in
due course of proceedings.
36

Section 3, Rule 58, of the Rules of Court enumerates
the grounds for the issuance of a preliminary
injunction:
SEC. 3. Grounds for issuance of preliminary
injunction. A preliminary injunction may be
granted when it is established:
(a) That the applicant is entitled to the relief
demanded, and the whole or part of such relief
consists in restraining the commission or
continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for
a limited period or perpetually;
(b) That the commission, continuance, or non-
performance of the act or acts complained of during
the litigation would probably work injustice to the
applicant; or
(c) That a party, court, agency or a person is doing,
threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to
render the judgment ineffectual.
Under the cited provision, a clear and positive right
especially calling for judicial protection must be
shown. Injunction is not a remedy to protect or
enforce contingent, abstract, or future rights; it will
not issue to protect a right not in esse and which may
never arise, or to restrain an act which does not give
rise to a cause of action. There must exist an actual
right.
37
There must be a patent showing by the
complaint that there exists a right to be protected and
that the acts against which the writ is to be directed
are violative of said right.
38

There are generally two kinds of preliminary
injunction: (1) a prohibitory injunction which
commands a party to refrain from doing a particular
act; and (2) a mandatory injunction which commands
the performance of some positive act to correct a
wrong in the past.
39

The Court of Appeals did not err in reviewing proof
adduced by petitioners to support its application for
the issuance of the writ. While the matter of the
issuance of a writ of preliminary injunction is
addressed to the sound discretion of the trial court,
this discretion must be exercised based upon the
grounds and in the manner provided by law. The
exercise of discretion by the trial court in injunctive
matters is generally not interfered with save in cases
of manifest abuse.
40
And to determine whether there
was abuse of discretion, a scrutiny must be made of
the bases, if any, considered by the trial court in
granting injunctive relief. Be it stressed that
injunction is the strong arm of equity which must be
issued with great caution and deliberation, and only
in cases of great injury where there is no
commensurate remedy in damages.
41

In the present case, we find that there was scant
justification for the issuance of the writ of
preliminary injunction.
Petitioners anchor their legal right to "Dockers and
Design" trademark on the Certificate of Registration
issued in their favor by the Bureau of Patents,
Trademarks and Technology Transfer.
*
According to
Section 138 of Republic Act No. 8293,
42
this
Certificate of Registration is prima facie evidence of
the validity of the registration, the registrants
ownership of the mark and of the exclusive right to
use the same in connection with the goods or
services and those that are related thereto specified in
the certificate. Section 147.1 of said law likewise
grants the owner of the registered mark the exclusive
right to prevent all third parties not having the
owners consent from using in the course of trade
identical or similar signs for goods or services which
are identical or similar to those in respect of which
the trademark is registered if such use results in a
likelihood of confusion.
However, attention should be given to the fact that
petitioners registered trademark consists of two
elements: (1) the word mark "Dockers" and (2) the
wing-shaped design or logo. Notably, there is only
one registration for both features of the trademark
giving the impression that the two should be
considered as a single unit. Clinton Apparelles
trademark, on the other hand, uses the "Paddocks"
word mark on top of a logo which according to
petitioners is a slavish imitation of the "Dockers"
design. The two trademarks apparently differ in their
word marks ("Dockers" and "Paddocks"), but again
according to petitioners, they employ similar or
identical logos. It could thus be said that respondent
only "appropriates" petitioners logo and not the
word mark "Dockers"; it uses only a portion of the
registered trademark and not the whole.
Given the single registration of the trademark
"Dockers and Design" and considering that
respondent only uses the assailed device but a
different word mark, the right to prevent the latter
from using the challenged "Paddocks" device is far
from clear. Stated otherwise, it is not evident
whether the single registration of the trademark
"Dockers and Design" confers on the owner the right
to prevent the use of a fraction thereof in the course
of trade. It is also unclear whether the use without
the owners consent of a portion of a trademark
registered in its entirety constitutes material or
substantial invasion of the owners right.
It is likewise not settled whether the wing-shaped
logo, as opposed to the word mark, is the dominant
or central feature of petitioners trademarkthe
feature that prevails or is retained in the minds of the
publican imitation of which creates the likelihood
of deceiving the public and constitutes trademark
infringement.
43
In sum, there are vital matters which
have yet and may only be established through a full-
blown trial.
From the above discussion, we find that petitioners
right to injunctive relief has not been clearly and
unmistakably demonstrated. The right has yet to be
determined. Petitioners also failed to show proof that
there is material and substantial invasion of their
right to warrant the issuance of an injunctive writ.
Neither were petitioners able to show any urgent and
permanent necessity for the writ to prevent serious
damage.
Petitioners wish to impress upon the Court the urgent
necessity for injunctive relief, urging that the erosion
or dilution of their trademark is protectable. They
assert that a trademark owner does not have to wait
until the mark loses its distinctiveness to obtain
injunctive relief, and that the mere use by an
infringer of a registered mark is already actionable
even if he has not yet profited thereby or has
damaged the trademark owner.
Trademark dilution is the lessening of the capacity of
a famous mark to identify and distinguish goods or
services, regardless of the presence or absence of: (1)
competition between the owner of the famous mark
and other parties; or (2) likelihood of confusion,
mistake or deception. Subject to the principles of
equity, the owner of a famous mark is entitled to an
injunction "against another persons commercial use
in commerce of a mark or trade name, if such use
begins after the mark has become famous and causes
dilution of the distinctive quality of the mark." This
is intended to protect famous marks from subsequent
uses that blur distinctiveness of the mark or tarnish
or disparage it.
44

Based on the foregoing, to be eligible for protection
from dilution, there has to be a finding that: (1) the
trademark sought to be protected is famous and
distinctive; (2) the use by respondent of "Paddocks
and Design" began after the petitioners mark
became famous; and (3) such subsequent use
defames petitioners mark. In the case at bar,
petitioners have yet to establish whether "Dockers
and Design" has acquired a strong degree of
distinctiveness and whether the other two elements
are present for their cause to fall within the ambit of
the invoked protection. The Trends MBL Survey
Report which petitioners presented in a bid to
establish that there was confusing similarity between
two marks is not sufficient proof of any dilution that
the trial court must enjoin.
The Court also finds that the trial courts order
granting the writ did not adequately detail the
reasons for the grant, contrary to our ruling in
University of the Philippines v. Hon. Catungal Jr.,
45

wherein we held that:
The trial court must state its own findings of fact and
cite particular law to justify grant of preliminary
injunction. Utmost care in this regard is demanded.
46

The trial court in granting the injunctive relief tersely
ratiocinated that "the plaintiffs appear to be entitled
to the relief prayed for and this Court is of the
considered belief and humble view that, without
necessarily delving on the merits, the paramount
interest of justice will be better served if the status
quo shall be maintained." Clearly, this statement falls
short of the requirement laid down by the above-
quoted case. Similarly, in Developers Group of
Companies, Inc. v. Court of Appeals,
47
we held that
it was "not enough" for the trial court, in its order
granting the writ, to simply say that it appeared
"after hearing that plaintiff is entitled to the relief
prayed for."
In addition, we agree with the Court of Appeals in its
holding that the damages the petitioners had suffered
or continue to suffer may be compensated in terms of
monetary consideration. As held in Government
Service Insurance System v. Florendo:
48

a writ of injunction should never have been issued
when an action for damages would adequately
compensate the injuries caused. The very foundation
of the jurisdiction to issue the writ of injunction rests
in the probability of irreparable injury, inadequacy of
pecuniary estimation and the prevention of the
multiplicity of suits, and where facts are not shown
to bring the case within these conditions, the relief of
injunction should be refused.
49

We also believe that the issued injunctive writ, if
allowed, would dispose of the case on the merits as it
would effectively enjoin the use of the "Paddocks"
device without proof that there is basis for such
action. The prevailing rule is that courts should avoid
issuing a writ of preliminary injunction that would in
effect dispose of the main case without trial.
50
There
would be a prejudgment of the main case and a
reversal of the rule on the burden of proof since it
would assume the proposition which petitioners are
inceptively bound to prove.
51

Parenthetically, we find no flaw in the Court of
Appeals disquisition on the consequences of the
issued injunction. An exercise of caution, we believe
that such reflection is necessary to weigh the alleged
entitlement to the writ vis--vis its possible effects.
The injunction issued in the instant case is of a
serious nature as it tends to do more than to maintain
the status quo. In fact, the assailed injunction if
sustained would bring about the result desired by
petitioners without a trial on the merits.
Then again, we believe the Court of Appeals
overstepped its authority when it declared that the
"alleged similarity as to the two logos is hardly
confusing to the public." The only issue brought
before the Court of Appeals through respondents
Petition under Rule 65 of the Rules of Court
involved the grave abuse of discretion allegedly
committed by the trial court in granting the TRO and
the writ of preliminary injunction. The appellate
court in making such a statement went beyond that
issue and touched on the merits of the infringement
case, which remains to be decided by the trial court.
In our view, it was premature for the Court of
Appeals to declare that there is no confusion between
the two devices or logos. That matter remains to be
decided on by the trial court.
Finally, we have no contention against the procedure
adopted by the trial court in resolving the application
for an injunctive writ and we believe that respondent
was accorded due process. Due process, in essence,
is simply an opportunity to be heard. And in
applications for preliminary injunction, the
requirement of hearing and prior notice before
injunction may issue has been relaxed to the point
that not all petitions for preliminary injunction must
undergo a trial-type hearing, it being a hornbook
doctrine that a formal or trial-type hearing is not at
all times and in all instances essential to due process.
Due process simply means giving every contending
party the opportunity to be heard and the court to
consider every piece of evidence presented in their
favor. Accordingly, this Court has in the case of Co
v. Calimag, Jr.,
52
rejected a claim of denial of due
process where such claimant was given the
opportunity to be heard, having submitted his
counter-affidavit and memorandum in support of his
position.
53

After a careful consideration of the facts and
arguments of the parties, the Court finds that
petitioners did not adequately prove their entitlement
to the injunctive writ. In the absence of proof of a
legal right and the injury sustained by the applicant,
an order of the trial court granting the issuance of an
injunctive writ will be set aside for having been
issued with grave abuse of discretion.
54

Conformably, the Court of Appeals was correct in
setting aside the assailed orders of the trial court.
WHEREFORE, the instant petition is DENIED. The
Decision of the Court of Appeals dated 21 December
1998 and its Resolution dated 10 May 1999 are
AFFIRMED. Costs against petitioners.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
REYNATO S. PUNO
Associate Justice
Chairman
MA. ALICIA AUSTRIA-MARTINEZ, ROMEO
J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision
were reached in consultation before the case was
assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Associate Justice
Chairman, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairmans
Attestation, it is hereby certified that the conclusions
in the above Decision had been reached in
consultation before the case was assigned to the
writer of the opinion of the Courts Division.
HILARIO G. DAVIDE, JR.
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 168306 June 19, 2007
WILLIAM C. YAO, SR., LUISA C. YAO,
RICHARD C. YAO, WILLIAM C. YAO JR., and
ROGER C. YAO, petitioners,
vs.
THE PEOPLE OF THE PHILIPPINES,
PETRON CORPORATION and PILIPINAS
SHELL PETROLEUM CORP., and its Principal,
SHELL INTL PETROLEUM CO. LTD.,
respondents.
D E C I S I O N
CHICO-NAZARIO, J .:
In this Petition for Review on Certiorari
1
under Rule
45 of the Rules of Court, petitioners William C. Yao,
Sr., Luisa C. Yao, Richard C. Yao, William C. Yao,
Jr., and Roger C. Yao pray for the reversal of the
Decision dated 30 September 2004,
2
and Resolution
dated 1 June 2005, of the Court of Appeals in CA
G.R. SP No. 79256,
3
affirming the two Orders, both
dated 5 June 2003, of the Regional Trial Court
(RTC), Branch 17, Cavite City, relative to Search
Warrants No. 2-2003 and No. 3-2003.
4
In the said
Orders, the RTC denied the petitioners Motion to
Quash Search Warrant
5
and Motion for the Return of
the Motor Compressor and Liquified Petroleum Gas
(LPG) Refilling Machine.
6

The following are the facts:
Petitioners are incorporators and officers of
MASAGANA GAS CORPORATION
(MASAGANA), an entity engaged in the refilling,
sale and distribution of LPG products. Private
respondents Petron Corporation (Petron) and
Pilipinas Shell Petroleum Corporation (Pilipinas
Shell) are two of the largest bulk suppliers and
producers of LPG in the Philippines. Their LPG
products are sold under the marks "GASUL" and
"SHELLANE," respectively. Petron is the registered
owner in the Philippines of the trademarks GASUL
and GASUL cylinders used for its LPG products. It
is the sole entity in the Philippines authorized to
allow refillers and distributors to refill, use, sell, and
distribute GASUL LPG containers, products and its
trademarks. Pilipinas Shell, on the other hand, is the
authorized user in the Philippines of the tradename,
trademarks, symbols, or designs of its principal,
Shell International Petroleum Company Limited
(Shell International), including the marks
SHELLANE and SHELL device in connection with
the production, sale and distribution of SHELLANE
LPGs. It is the only corporation in the Philippines
authorized to allow refillers and distributors to refill,
use, sell and distribute SHELLANE LPG containers
and products.
7

On 3 April 2003, National Bureau of Investigation
(NBI) agent Ritche N. Oblanca (Oblanca) filed two
applications for search warrant with the RTC,
Branch 17, Cavite City, against petitioners and other
occupants of the MASAGANA compound located at
Governors Drive, Barangay Lapidario, Trece
Martires, Cavite City, for alleged violation of
Section 155, in relation to Section 170 of Republic
Act No. 8293, otherwise known as "The Intellectual
Property Code of the Philippines."
8
The two
applications for search warrant uniformly alleged
that per information, belief, and personal verification
of Oblanca, the petitioners are actually producing,
selling, offering for sale and/or distributing LPG
products using steel cylinders owned by, and bearing
the tradenames, trademarks, and devices of Petron
and Pilipinas Shell, without authority and in
violation of the rights of the said entities.
In his two separate affidavits
9
attached to the two
applications for search warrant, Oblanca alleged:
1. [That] on 11 February 2003, the National Bureau
of Investigation ("NBI") received a letter-complaint
from Atty. Bienvenido I. Somera Jr. of Villaraza and
Angangco, on behalf of among others, [Petron
Corporation (PETRON)] and Pilipinas Shell
Petroleum Corporation (PSPC), the authorized
representative of Shell International Petroleum
Company Limited ("Shell International"), requesting
assistance in the investigation and, if warranted,
apprehension and prosecution of certain persons
and/or establishments suspected of violating the
intellectual property rights [of PETRON] and of
PSPC and Shell International.
2. [That] on the basis of the letter-complaint, I,
together with Agent Angelo Zarzoso, was assigned
as the NBI agent on the case.
3. [That] prior to conducting the investigation on the
reported illegal activities, he reviewed the
certificates of trademark registrations issued in favor
of [PETRON], PSPC and Shell International as well
as other documents and other evidence obtained by
the investigative agency authorized by [PETRON],
PSPC and Shell International to investigate and
cause the investigation of persons and establishments
violating the rights of [PETRON], PSPC and Shell
International, represented by Mr. Bernabe C. Alajar.
Certified copies of the foregoing trademark
registrations are attached hereto as Annexes "A" to
":E".
4. [That] among the establishments alleged to be
unlawfully refilling and unlawfully selling and
distributing [Gasul LPG and] Shellane products is
Masagana Gas Corporation ("MASAGANA").
Based on Securities and Exchange Commission
Records, MASAGANA has its principal office
address at 9775 Kamagong Street, San Antonio
Village, Makati, Metro Manila. The incorporators
and directors of MASAGANA are William C. Yao,
Sr., Luisa C. Yao, Richard C. Yao, William C. Yao,
Jr., and Roger C. Yao. x x x.
5. I confirmed that MASAGANA is not authorized
to use [PETRON and] Shellane LPG cylinders and
its trademarks and tradenames or to be refillers or
distributors of [PETRON and] Shellane LPGs.
6. I went to MASAGANAs refilling station located
at Governors Drive, Barangay Lapidario, Trece
Martires City (sic), Cavite to investigate its
activities. I confirmed that MASAGANA is indeed
engaged in the unauthorized refilling, sale and/or
distribution of [Gasul and] Shellane LPG cylinders. I
found out that MASAGANA delivery trucks with
Plate Nos. UMN-971, PEZ-612, WTE-527, XAM-
970 and WFC-603 coming in and out of the refilling
plant located at the aforementioned address
contained multi-brand LPG cylinders including
[Gasul and] Shellane. x x x.
7. [That] on 13 February 2003, I conducted a test-
buy accompanied by Mr. Bernabe C. Alajar. After
asking the purpose of our visit, MASAGANAs
guard allowed us to enter the MASAGANA refilling
plant to purchase GASUL and SHELLANE LPGs. x
x x. We were issued an order slip which we
presented to the cashiers office located near the
refilling station. After paying the amount x x x
covering the cost of the cylinders and their contents,
they were issued Cash Invoice No. 56210 dated
February 13, 2003. We were, thereafter, assisted by
the plant attendant in choosing empty GASUL and
SHELLANE 11 kg. cylinders, x x x were brought to
the refilling station [and filled in their presence.] I
noticed that no valve seals were placed on the
cylinders.
[That] while inside the refilling plant doing the test-
buy, I noticed that stockpiles of multi-branded
cylinders including GASUL and SHELLANE
cylinders were stored near the refilling station. I also
noticed that the total land area of the refilling plant is
about 7,000 to 10,000 square meters. At the corner
right side of the compound immediately upon
entering the gate is a covered area where the
maintenance of the cylinders is taking place. Located
at the back right corner of the compound are two
storage tanks while at the left side also at the corner
portion is another storage tank. Several meters and
fronting the said storage tank is where the refilling
station and the office are located. It is also in this
storage tank where the elevated blue water tank
depicting MASAGANA CORP. is located. About
eleven (11) refilling pumps and stock piles of multi-
branded cylinders including Shellane and GASUL
are stored in the refilling station. At the left side of
the entrance gate is the guard house with small door
for the pedestrians and at the right is a blue steel gate
used for incoming and outgoing vehicles.
8. [That] on 27 February 2003, I conducted another
test-buy accompanied by Mr. Bernabe C. Alajar. x x
x After choosing the cylinders, we were issued an
order slip which we presented to the cashier. Upon
payment, Cash Invoice No. 56398 was issued
covering the cost of both GASUL and SHELLANE
LPG cylinders and their contents. x x x Both
cylinders were refilled in our presence and no valve
seals were placed on the cylinders.
Copies of the photographs of the delivery trucks,
LPG cylinders and registration papers were also
attached to the aforementioned affidavits.
10

Bernabe C. Alajar (Alajar), owner of Able Research
and Consulting Services Inc., was hired by Petron
and Pilipinas Shell to assist them in carrying out
their Brand Protection Program. Alajar accompanied
Oblanca during the surveillance of and test-buys at
the refilling plant of MASAGANA. He also executed
two separate affidavits corroborating the statements
of Oblanca. These were annexed to the two
applications for search warrant.
11

After conducting the preliminary examination on
Oblanca and Alajar, and upon reviewing their sworn
affidavits and other attached documents, Judge
Melchor Q.C. Sadang (Judge Sadang), Presiding
Judge of the RTC, Branch 17, Cavite City, found
probable cause and correspondingly issued Search
Warrants No. 2-2003 and No. 3-2003.
12
The search
warrants commanded any peace officer to make an
immediate search of the MASAGANA compound
and to seize the following items:
Under Search Warrant No. 2-2003:
a. Empty/filled LPG cylinder tanks/containers,
bearing the tradename "SHELLANE", "SHELL"
(Device) of Pilipinas Shell Petroleum Corporation
and the trademarks and other devices owned by Shell
International Petroleum Company, Ltd.;
b. Machinery and/or equipment being used or
intended to be used for the purpose of illegally
refilling LPG cylinders belonging to Pilipinas Shell
Petroleum Corporation bearing the latters tradename
as well as the marks belonging to Shell International
Petroleum Company, Ltd., enumerated hereunder:
1. Bulk/Bullet LPG storage tanks;
2. Compressor/s (for pneumatic refilling system);
3. LPG hydraulic pump/s;
4. LPG refilling heads/hoses and appurtenances or
LPG filling assembly;
5. LPG pipeline gate valve or ball valve and handles
and levers;
6. LPG weighing scales; and
7. Seals simulating the shell trademark.
c. Sales invoices, ledgers, journals, official receipts,
purchase orders, and all other books of accounts,
inventories and documents pertaining to the
production, sale and/or distribution of the aforesaid
goods/products.
d. Delivery truck bearing Plate Nos. WTE-527,
XAM-970 and WFC-603, hauling trucks, and/or
other delivery trucks or vehicles or conveyances
being used or intended to be used for the purpose of
selling and/or distributing the above-mentioned
counterfeit products.
Under Search Warrant No. 3-2003:
a. Empty/filled LPG cylinder tanks/containers,
bearing Petron Corporations (Petron) tradename and
its tradename "GASUL" and other devices owned
and/or used exclusively by Petron;
b. Machinery and/or equipment being used or
intended to be used for the purpose of illegally
refilling LPG cylinders belonging to Petron
enumerated hereunder;
1. Bulk/Bullet LPG storage tanks;
2. Compressor/s (for pneumatic filling system);
3. LPG hydraulic pump/s;
4. LPG filling heads/hoses and appurtenances or
LPG filling assembly;
5. LPG pipeline gate valve or ball valve and handles
levers;
6. LPG weighing scales; and
7. Seals bearing the Petron mark;
c. Sales invoices, ledgers, journals, official receipts,
purchase orders, and all other books of accounts,
inventories and documents pertaining to the
production, sale and/or distribution of the aforesaid
goods/products; and
d. Delivery trucks bearing Plate Nos. UMN-971,
PEZ-612 and WFC-603, hauling trucks, and/or other
delivery trucks or vehicles or conveyances being
used for the purpose of selling and/or distributing the
above-mentioned counterfeit products.
Upon the issuance of the said search warrants,
Oblanca and several NBI operatives immediately
proceeded to the MASAGANA compound and
served the search warrants on petitioners.
13
After
searching the premises of MASAGANA, the
following articles described in Search Warrant No.
2-2003 were seized:
a. Thirty-eight (38) filled 11 kg. LPG cylinders,
bearing the tradename of Pilipinas Shell Petroleum
Corporation and the trademarks and other devices
owned by Shell International Petroleum Company,
Ltd.;
b. Thirty-nine (39) empty 11 kg. LPG cylinders,
bearing the tradename of Pilipinas Shell Petroleum
Corporation and the trademarks and other devices
owned by Shell International Petroleum Company,
Ltd.;
c. Eight (8) filled 50 kg. LPG cylinders, bearing the
tradename of Pilipinas Shell Petroleum Corporation
and the trademarks and other devices owned by Shell
International Petroleum Company, Ltd.;
d. Three (3) empty 50 kg. LPG cylinders, bearing the
tradename of Pilipinas Shell Petroleum Corporation
and the trademarks and other devices owned by Shell
International Petroleum Company, Ltd.;
e. One (1) set of motor compressor for filling system.
Pursuant to Search Warrant No. 3-2003, the
following articles were also seized:
a. Six (6) filled 11 kg. LPG cylinders without seal,
bearing Petrons tradename and its trademark
"GASUL" and other devices owned and/or used
exclusively by Petron;
b. Sixty-three (63) empty 11 kg. LPG cylinders,
bearing Petrons tradename and its trademark
"GASUL" and other devices owned and/or used
exclusively by Petron;
c. Seven (7) tampered 11 kg. LPG cylinders, bearing
Petrons tradename and its trademark "GASUL" and
other devices owned and/or used exclusively by
Petron;
d. Five (5) tampered 50 kg. LPG cylinders, bearing
Petrons tradename and its trademark "GASUL" and
other devices owned and/or used exclusively by
Petron with tampered "GASUL" logo;
e. One (1) set of motor compressor for filling system;
and
f. One (1) set of LPG refilling machine.
On 22 April 2003, petitioners filed with the RTC a
Motion to Quash Search Warrants No. 2-2003 and
No. 3-2003
14
on the following grounds:
1. There is no probable cause for the issuance of the
search warrant and the conditions for the issuance of
a search warrant were not complied with;
2. Applicant NBI Agent Ritchie N. Oblanca and his
witness Bernabe C. Alajar do not have any authority
to apply for a search warrant. Furthermore, they
committed perjury when they alleged in their sworn
statements that they conducted a test-buy on two
occasions;
3. The place to be searched was not specified in the
Search Warrant as the place has an area of 10,000
square meters (one hectare) more or less, for which
reason the place to be searched must be indicated
with particularity;
4. The search warrant is characterized as a general
warrant as the items to be seized as mentioned in the
search warrant are being used in the conduct of the
lawful business of respondents and the same are not
being used in refilling Shellane and Gasul LPGs.
On 30 April 2003, MASAGANA, as third party
claimant, filed with the RTC a Motion for the Return
of Motor Compressor and LPG Refilling Machine.
15

It claimed that it is the owner of the said motor
compressor and LPG refilling machine; that these
items were used in the operation of its legitimate
business; and that their seizure will jeopardize its
business interests.
On 5 June 2003, the RTC issued two Orders, one of
which denied the petitioners Motion to Quash
Search Warrants No. 2-2003 and No. 3-2003, and the
other one also denied the Motion for the Return of
Motor Compressor and LPG Refilling Machine of
MASAGANA, for lack of merit.
16

With respect to the Order denying the petitioners
motion to quash Search Warrants No. 2-2003 and
No. 3-2003, the RTC held that based on the
testimonies of Oblanca and Alajar, as well as the
documentary evidence consisting of receipts,
photographs, intellectual property and corporate
registration papers, there is probable cause to believe
that petitioners are engaged in the business of
refilling or using cylinders which bear the
trademarks or devices of Petron and Pilipinas Shell
in the place sought to be searched and that such
activity is probably in violation of Section 155 in
relation to Section 170 of Republic Act No. 8293.
It also ruled that Oblanca and Alajar had personal
knowledge of the acts complained of since they were
the ones who monitored the activities of and
conducted test-buys on MASAGANA; that the
search warrants in question are not general warrants
because the compound searched are solely used and
occupied by MASAGANA, and as such, there was
no need to particularize the areas within the
compound that would be searched; and that the items
to be seized in the subject search warrants were
sufficiently described with particularity as the same
was limited to cylinder tanks bearing the trademarks
GASUL and SHELLANE.
As regards the Order denying the motion of
MASAGANA for the return of its motor compressor
and LPG refilling machine, the RTC resolved that
MASAGANA cannot be considered a third party
claimant whose rights were violated as a result of the
seizure since the evidence disclosed that petitioners
are stockholders of MASAGANA and that they
conduct their business through the same juridical
entity. It maintained that to rule otherwise would
result in the misapplication and debasement of the
veil of corporate fiction. It also stated that the veil of
corporate fiction cannot be used as a refuge from
liability.
Further, the RTC ratiocinated that ownership by
another person or entity of the seized items is not a
ground to order its return; that in seizures pursuant to
a search warrant, what is important is that the seized
items were used or intended to be used as means of
committing the offense complained of; that by its
very nature, the properties sought to be returned in
the instant case appear to be related to and intended
for the illegal activity for which the search warrants
were applied for; and that the items seized are
instruments of an offense.
Petitioners filed Motions for Reconsideration of the
assailed Orders,
17
but these were denied by the RTC
in its Order dated 21 July 2003 for lack of
compelling reasons.
18

Subsequently, petitioners appealed the two Orders of
the RTC to the Court of Appeals via a special civil
action for certiorari under Rule 65 of the Rules of
Court.
19
On 30 September 2004, the Court of
Appeals promulgated its Decision affirming the
Orders of the RTC.
20
It adopted in essence the bases
and reasons of the RTC in its two Orders. The
decretal portion thereof reads:
Based on the foregoing, this Court finds no reason to
disturb the assailed Orders of the respondent judge.
Grave abuse of discretion has not been proven to
exist in this case.
WHEREFORE, the petition is hereby DISMISSED
for lack of merit. The assailed orders both dated June
5, 2003 are hereby AFFIRMED.
Petitioners filed a Motion for Reconsideration
21
of
the Decision of the Court of Appeals, but this was
denied in its Resolution dated 1 June 2005 for lack of
merit.
22

Petitioners filed the instant petition on the following
grounds:
I.
THE HONORABLE COURT OF APPEALS
ERRED IN RULING THAT THE PRESIDING
JUDGE OF RTC CAVITE CITY HAD
SUFFICIENT BASIS IN DECLARING THE
EXISTENCE OF PROBABLE CAUSE;
II.
THE HONORABLE COURT OF APPEALS
ERRED IN RULING THAT NBI AGENT
(RITCHIE OBLANCA) CAN APPLY FOR THE
SEARCH WARRANTS NOTHWITHSTANDING
HIS LACK OF AUTHORITY;
III.
THE HONORABLE COURT OF APPEALS
ERRED IN RULING THAT THE REQUIREMENT
OF GIVING A PARTICULAR DESCRIPTION OF
THE PLACE TO BE SEARCHED WAS
COMPLIED WITH;
IV.
THE HONORABLE COURT OF APPEALS
ERRED IN RULING THAT THE APPLICATIONS
AND THE SEARCH WARRANTS THEMSELVES
SHOW NO AMBIGUITY OF THE ITEMS TO BE
SEIZED;
V.
THE HONORABLE COURT OF APPEALS
ERRED IN RULING THAT THE COMPLAINT IS
DIRECTED AGAINST MASAGANA GAS
CORPORATION, ACTING THROUGH ITS
OFFICERS AND DIRECTORS, HENCE
MASAGANA GAS CORPORATION MAY NOT
BE CONSIDERED AS THIRD PARTY
CLAIMANT WHOSE RIGHTS WERE VIOLATED
AS A RESULT OF THE SEIZURE.
23

Apropos the first issue, petitioners allege that
Oblanca and Alajar had no personal knowledge of
the matters on which they testified; that Oblanca and
Alajar lied to Judge Sadang when they stated under
oath that they were the ones who conducted the test-
buys on two different occasions; that the truth of the
matter is that Oblanca and Alajar never made the
purchases personally; that the transactions were
undertaken by other persons namely, Nikko Javier
and G. Villanueva as shown in the Entry/Exit Slips
of MASAGANA; and that even if it were true that
Oblanca and Alajar asked Nikko Javier and G.
Villanueva to conduct the test-buys, the information
relayed by the latter two to the former was mere
hearsay.
24

Petitioners also contend that if Oblanca and Alajar
had indeed used different names in purchasing the
LPG cylinders, they should have mentioned it in
their applications for search warrants and in their
testimonies during the preliminary examination; that
it was only after the petitioners had submitted to the
RTC the entry/exit slips showing different
personalities who made the purchases that Oblanca
and Alajar explained that they had to use different
names in order to avoid detection; that Alajar is not
connected with either of the private respondents; that
Alajar was not in a position to inform the RTC as to
the distinguishing trademarks of SHELLANE and
GASUL; that Oblanca was not also competent to
testify on the marks allegedly infringed by
petitioners; that Judge Sadang failed to ask probing
questions on the distinguishing marks of
SHELLANE and GASUL; that the findings of the
Brand Protection Committee of Pilipinas Shell were
not submitted nor presented to the RTC; that
although Judge Sadang examined Oblanca and
Alajar, the former did not ask exhaustive questions;
and that the questions Judge Sadang asked were
merely rehash of the contents of the affidavits of
Oblanca and Alajar.
25

These contentions are devoid of merit.
Article III, Section 2, of the present Constitution
states the requirements before a search warrant may
be validly issued, to wit:
Section 2. The right of the people to be secure in
their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever
nature and for any purpose shall be inviolable, and
no search warrant or warrant of arrest shall issue
except upon probable cause to be determined
personally by the judge after examination under oath
or affirmation of the complainant and the witnesses
he may produce, and particularly describing the
place to be searched and the persons or things to be
seized. (emphasis supplied).
Section 4 of Rule 126 of the Revised Rules on
Criminal Procedure, provides with more particularity
the requisites in issuing a search warrant, viz:
SEC. 4. Requisites for issuing search warrant. A
search warrant shall not issue except upon probable
cause in connection with one specific offense to be
determined personally by the judge after examination
under oath or affirmation of the complainant and the
witnesses he may produce, and particularly
describing the place to be searched and the things to
be seized which may be anywhere in the Philippines.
According to the foregoing provisions, a search
warrant can be issued only upon a finding of
probable cause. Probable cause for search warrant
means such facts and circumstances which would
lead a reasonably discreet and prudent man to
believe that an offense has been committed and that
the objects sought in connection with the offense are
in the place to be searched.
26

The facts and circumstances being referred thereto
pertain to facts, data or information personally
known to the applicant and the witnesses he may
present.
27
The applicant or his witnesses must have
personal knowledge of the circumstances
surrounding the commission of the offense being
complained of. "Reliable information" is insufficient.
Mere affidavits are not enough, and the judge must
depose in writing the complainant and his
witnesses.
28

Section 155 of Republic Act No. 8293 identifies the
acts constituting trademark infringement, thus:
SEC. 155. Remedies; Infringement. Any person
who shall, without the consent of the owner of the
registered mark:
155.1. Use in commerce any reproduction,
counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant
feature thereof in connection with the sale, offering
for sale, distribution, advertising of any goods or
services including other preparatory steps necessary
to carry out the sale of any goods or services on or in
connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. 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, shall be
liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the
moment any of the acts stated in Subsection 155.1 or
this subsection are committed regardless of whether
there is actual sale of goods or services using the
infringing material.
As can be gleaned in Section 155.1, mere
unauthorized use of a container bearing a registered
trademark in connection with the sale, distribution or
advertising of goods or services which is likely to
cause confusion, mistake or deception among the
buyers/consumers can be considered as trademark
infringement.
In his sworn affidavits,
29
Oblanca stated that before
conducting an investigation on the alleged illegal
activities of MASAGANA, he reviewed the
certificates of trademark registrations issued by the
Philippine Intellectual Property Office in favor of
Petron and Pilipinas Shell; that he confirmed from
Petron and Pilipinas Shell that MASAGANA is not
authorized to sell, use, refill or distribute GASUL
and SHELLANE LPG cylinder containers; that he
and Alajar monitored the activities of MASAGANA
in its refilling plant station located within its
compound at Governors Drive, Barangay Lapidario,
Trece Martires, Cavite City; that, using different
names, they conducted two test-buys therein where
they purchased LPG cylinders bearing the
trademarks GASUL and SHELLANE; that the said
GASUL and SHELLANE LPG cylinders were
refilled in their presence by the MASAGANA
employees; that while they were inside the
MASAGANA compound, he noticed stock piles of
multi-branded cylinders including GASUL and
SHELLANE LPG cylinders; and that they observed
delivery trucks loaded with GASUL and
SHELLANE LPG cylinders coming in and out of the
MASAGANA compound and making deliveries to
various retail outlets. These allegations were
corroborated by Alajar in his separate affidavits.
In support of the foregoing statements, Oblanca also
submitted the following documentary and object
evidence:
1. Certified true copy of the Certificate of
Registration No. 44046 for "SHELL (DEVICE)" in
the name of Shell International;
2. Certified true copy of the Certificate of
Registration No. 41789 for "SHELL (DEVICE) in
the name of Shell International;
3. Certified true copy of the Certificate of
Registration No. 37525 for "SHELL (DEVICE) in
the name of Shell International;
4. Certified true copy of the Certificate of
Registration No. R-2813 for "SHELL" in the name
of Shell International;
5. Certified true copy of the Certificate of
Registration No. 31443 for "SHELLANE" in the
name of Shell International;
6. Certified true copy of the Certificate of
Registration No. 57945 for the mark "GASUL" in
the name of Petron;
7. Certified true copy of the Certificate of
Registration No. C-147 for "GASUL CYLINDER
CONTAINING LIQUEFIED PETROLEUM GAS"
in the name of Petron;
8. Certified true copy of the Certificate of
Registration No. 61920 for the mark "GASUL AND
DEVICE" in the name of Petron;
9. Certified true copy of the Articles of Incorporation
of Masagana;
10. Certified true copy of the By-laws of Masagana;
11. Certified true copy of the latest General
Information Sheet of Masagana on file with the
Securities and Exchange Commission;
12. Pictures of delivery trucks coming in and out of
Masagana while it delivered Gasul and Shellane
LPG;
13. Cash Invoice No. 56210 dated 13 February 2003
issued by Masagana for the Gasul and Shellane LPG
purchased by Agent Oblanca and witness Alajar;
14. Pictures of the Shellane and Gasul LPGs
covered by Cash Invoice No. 56210 purchased from
Masagana by Agent Oblanca and witness Alajar;
15. Cash Invoice No. 56398 dated 27 February 2003
issued by Masagana for the Gasul and Shellane LPG
purchased by Agent Oblanca and witness Alajar; and
16. Pictures of the Shellane and Gasul LPGs
covered by Cash Invoice No. 56398 purchased from
Masagana by Agent Oblanca and witness Alajar.
30

Extant from the foregoing testimonial, documentary
and object evidence is that Oblanca and Alajar have
personal knowledge of the fact that petitioners,
through MASAGANA, have been using the LPG
cylinders bearing the marks GASUL and
SHELLANE without permission from Petron and
Pilipinas Shell, a probable cause for trademark
infringement. Both Oblanca and Alajar were clear
and insistent that they were the very same persons
who monitored the activities of MASAGANA; that
they conducted test-buys thereon; and that in order to
avoid suspicion, they used different names during the
test-buys. They also personally witnessed the
refilling of LPG cylinders bearing the marks GASUL
and SHELLANE inside the MASAGANA refilling
plant station and the deliveries of these refilled
containers to some outlets using mini-trucks.
Indeed, the aforesaid facts and circumstances are
sufficient to establish probable cause. It should be
borne in mind that the determination of probable
cause does not call for the application of the rules
and standards of proof that a judgment of conviction
requires after trial on the merits. As the term implies,
"probable cause" is concerned with probability, not
absolute or even moral certainty. The standards of
judgment are those of a reasonably prudent man, not
the exacting calibrations of a judge after a full blown
trial.
31

The fact that Oblanca and Alajar used different
names in the purchase receipts do not negate
personal knowledge on their part. It is a common
practice of the law enforcers such as NBI agents
during covert investigations to use different names in
order to conceal their true identities. This is
reasonable and understandable so as not to endanger
the life of the undercover agents and to facilitate the
lawful arrest or apprehension of suspected violators
of the law.
Petitioners contention that Oblanca and Alajar
should have mentioned the fact that they used
different names in their respective affidavits and
during the preliminary examination is puerile. The
argument is too vacuous to merit serious
consideration. There is nothing in the provisions of
law concerning the issuance of a search warrant
which directly or indirectly mandates that the
applicant of the search warrant or his witnesses
should state in their affidavits the fact that they used
different names while conducting undercover
investigations, or to divulge such fact during the
preliminary examination. In the light of other more
material facts which needed to be established for a
finding of probable cause, it is not difficult to believe
that Oblanca and Alajar failed to mention that they
used aliases in entering the MASAGANA compound
due to mere oversight.
It cannot be gainfully said that Oblanca and Alajar
are not competent to testify on the trademarks
infringed by the petitioners. As earlier discussed,
Oblanca declared under oath that before conducting
an investigation on the alleged illegal activities of
MASAGANA, he reviewed the certificates of
trademark registrations issued by the Philippine
Intellectual Property Office in favor of Petron and
Pilipinas Shell. These certifications of trademark
registrations were attached by Oblanca in his
applications for the search warrants. Alajar, on the
other hand, works as a private investigator and, in
fact, owns a private investigation and
research/consultation firm. His firm was hired and
authorized, pursuant to the Brand Protection
Program of Petron and Pilipinas Shell, to verify
reports that MASAGANA is involved in the illegal
sale and refill of GASUL and SHELLANE LPG
cylinders.
32
As part of the job, he studied and
familiarized himself with the registered trademarks
of GASUL and SHELLANE, and the distinct
features of the LPG cylinders bearing the same
trademarks before conducting surveillance and test-
buys on MASAGANA.
33
He also submitted to
Oblanca several copies of the same registered
trademark registrations and accompanied Oblanca
during the surveillance and test-buys.
As to whether the form and manner of questioning
made by Judge Sadang complies with the
requirements of law, Section 5 of Rule 126 of the
Revised Rules on Criminal Procedure, prescribes the
rules in the examination of the complainant and his
witnesses when applying for search warrant, to wit:
SEC. 5. Examination of complainant; record.- The
judge must, before issuing the warrant, personally
examine in the form of searching questions and
answers, in writing under oath, the complainant and
the witnesses he may produce on facts personally
known to them and attach to the record their sworn
statements, together with the affidavits submitted.
The searching questions propounded to the applicant
and the witnesses depend largely on the discretion of
the judge. Although there is no hard-andfast rule
governing how a judge should conduct his
investigation, it is axiomatic that the examination
must be probing and exhaustive, not merely
routinary, general, peripheral, perfunctory or pro
forma. The judge must not simply rehash the
contents of the affidavit but must make his own
inquiry on the intent and justification of the
application.
34

After perusing the Transcript of Stenographic Notes
of the preliminary examination, we found the
questions of Judge Sadang to be sufficiently probing,
not at all superficial and perfunctory.
35
The
testimonies of Oblanca and Alajar were consistent
with each other and their narration of facts was
credible. As correctly found by the Court of Appeals:
This Court is likewise not convinced that respondent
Judge failed to ask probing questions in his
determination of the existence of probable cause.
This Court has thoroughly examined the Transcript
of Stenographic Notes taken during the investigation
conducted by the respondent Judge and found that
respondent Judge lengthily inquired into the
circumstances of the case. For instance, he required
the NBI agent to confirm the contents of his
affidavit, inquired as to where the "test-buys" were
conducted and by whom, verified whether PSPC and
PETRON have registered trademarks or tradenames,
required the NBI witness to explain how the "test-
buys" were conducted and to describe the LPG
cylinders purchased from Masagana Gas
Corporation, inquired why the applications for
Search Warrant were filed in Cavite City considering
that Masagana Gas Corporation was located in Trece
Martires, Cavite, inquired whether the NBI Agent
has a sketch of the place and if there was any
distinguishing sign to identify the place to be
searched, and inquired about their alleged tailing and
monitoring of the delivery trucks. x x x.
36

Since probable cause is dependent largely on the
opinion and findings of the judge who conducted the
examination and who had the opportunity to question
the applicant and his witnesses, the findings of the
judge deserves great weight. The reviewing court can
overturn such findings only upon proof that the judge
disregarded the facts before him or ignored the clear
dictates of reason.
37
We find no compelling reason to
disturb Judge Sadangs findings herein.
Anent the second issue, petitioners argue that Judge
Sadang failed to require Oblanca to show his
authority to apply for search warrants; that Oblanca
is a member of the Anti-Organized Crime and not
that of the Intellectual Property Division of the NBI;
that all complaints for infringement should be
investigated by the Intellectual Property Division of
the NBI; that it is highly irregular that an agent not
assigned to the Intellectual Property Division would
apply for a search warrant and without authority
from the NBI Director; that the alleged letter-
complaint of Atty. Bienvenido Somera, Jr. of
Villaraza and Angangco Law Office was not
produced in court; that Judge Sadang did not require
Oblanca to produce the alleged letter-complaint
which is material and relevant to the determination
of the existence of probable cause; and that Petron
and Pilipinas Shell, being two different corporations,
should have issued a board resolution authorizing the
Villaraza and Angangco Law Office to apply for
search warrant in their behalf.
38

We reject these protestations.
The authority of Oblanca to apply for the search
warrants in question is clearly discussed and
explained in his affidavit, viz:
[That] on 11 February 2003, the National Bureau of
Investigation (NBI) received a letter-complaint from
Atty. Bienvenido I. Somera, Jr. of Villaraza and
Angangco, on behalf of among others, Petron
Corporation (PETRON) [and Pilipinas Shell
Petroleum Corporation (PSPC), the authorized
representative of Shell International Petroleum
Company Limited (SHELL INTERNATIONAL)]
requesting assistance in the investigation and, if
warranted, apprehension and prosecution of certain
persons and/or establishments suspected of violating
the intellectual property rights of PETRON [and of
PSPC and Shell International.]
11. [That] on the basis of the letter-complaint, I,
together with Agent Angelo Zarzoso, was assigned
as the NBI agent on the case.
39

The fact that Oblanca is a member of the Anti-
Organized Crime Division and not that of the
Intellectual Property Division does not abrogate his
authority to apply for search warrant. As aptly stated
by the RTC and the Court of Appeals, there is
nothing in the provisions on search warrant under
Rule 126 of the Revised Rules on Criminal
Procedure, which specifically commands that the
applicant law enforcer must be a member of a
division that is assigned or related to the subject
crime or offense before the application for search
warrant may be acted upon. The petitioners did not
also cite any law, rule or regulation mandating such
requirement. At most, petitioners may only be
referring to the administrative organization and/or
internal rule or practice of the NBI. However, not
only did petitioners failed to establish the existence
thereof, but they also did not prove that such
administrative organization and/or internal rule or
practice are inviolable.
Neither is the presentation of the letter-complaint of
Atty. Somera and board resolutions from Petron and
Pilipinas Shell required or necessary in determining
probable cause. As heretofore discussed, the
affidavits of Oblanca and Alajar, coupled with the
object and documentary evidence they presented, are
sufficient to establish probable cause. It can also be
presumed that Oblanca, as an NBI agent, is a public
officer who had regularly performed his official
duty.
40
He would not have initiated an investigation
on MASAGANA without a proper complaint.
Furthermore, Atty. Somera did not step up to deny
his letter-complaint.
Regarding the third issue, petitioners posit that the
applications for search warrants of Oblanca did not
specify the particular area to be searched, hence,
giving the raiding team wide latitude in determining
what areas they can search. They aver that the search
warrants were general warrants, and are therefore
violative of the Constitution. Petitioners also assert
that since the MASAGANA compound is about
10,000.00 square meters with several structures
erected on the lot, the search warrants should have
defined the areas to be searched.
The long standing rule is that a description of the
place to be searched is sufficient if the officer with
the warrant can, with reasonable effort, ascertain and
identify the place intended and distinguish it from
other places in the community. Any designation or
description known to the locality that points out the
place to the exclusion of all others, and on inquiry
leads the officers unerringly to it, satisfies the
constitutional requirement.
41

Moreover, in the determination of whether a search
warrant describes the premises to be searched with
sufficient particularity, it has been held that the
executing officers prior knowledge as to the place
intended in the warrant is relevant. This would seem
to be especially true where the executing officer is
the affiant on whose affidavit the warrant had been
issued, and when he knows that the judge who issued
the warrant intended the compound described in the
affidavit.
42

The search warrants in question commanded any
peace officer to make an immediate search on
MASAGANA compound located at Governors
Drive, Barangay Lapidario, Trece Martires, Cavite
City. It appears that the raiding team had ascertained
and reached MASAGANA compound without
difficulty since MASAGANA does not have any
other offices/plants in Trece Martires, Cavite City.
Moreover, Oblanca, who was with the raiding team,
was already familiar with the MASAGANA
compound as he and Alajar had monitored and
conducted test-buys thereat.
Even if there are several structures inside the
MASAGANA compound, there was no need to
particularize the areas to be searched because, as
correctly stated by Petron and Pilipinas Shell, these
structures constitute the essential and necessary
components of the petitioners business and cannot
be treated separately as they form part of one entire
compound. The compound is owned and used solely
by MASAGANA. What the case law merely requires
is that, the place to be searched can be distinguished
in relation to the other places in the community.
Indubitably, this requisite was complied with in the
instant case.
As to the fourth issue, petitioners asseverate that the
search warrants did not indicate with particularity the
items to be seized since the search warrants merely
described the items to be seized as LPG cylinders
bearing the trademarks GASUL and SHELLANE
without specifying their sizes.
A search warrant may be said to particularly describe
the things to be seized when the description therein
is as specific as the circumstances will ordinarily
allow; or when the description expresses a
conclusion of fact not of law by which the warrant
officer may be guided in making the search and
seizure; or when the things described are limited to
those which bear direct relation to the offense for
which the warrant is being issued.
43

While it is true that the property to be seized under a
warrant must be particularly described therein and no
other property can be taken thereunder, yet the
description is required to be specific only in so far as
the circumstances will ordinarily allow. The law
does not require that the things to be seized must be
described in precise and minute details as to leave no
room for doubt on the part of the searching
authorities; otherwise it would be virtually
impossible for the applicants to obtain a search
warrant as they would not know exactly what kind of
things they are looking for. Once described,
however, the articles subject of the search and
seizure need not be so invariant as to require
absolute concordance, in our view, between those
seized and those described in the warrant. Substantial
similarity of those articles described as a class or
specie would suffice.
44

Measured against this standard, we find that the
items to be seized under the search warrants in
question were sufficiently described with
particularity. The articles to be confiscated were
restricted to the following: (1) LPG cylinders bearing
the trademarks GASUL and SHELLANE; (2)
Machines and equipments used or intended to be
used in the illegal refilling of GASUL and
SHELLANE cylinders. These machines were also
specifically enumerated and listed in the search
warrants; (3) Documents which pertain only to the
production, sale and distribution of the GASUL and
SHELLANE LPG cylinders; and (4) Delivery trucks
bearing Plate Nos. WTE-527, XAM-970 and WFC-
603, hauling trucks, and/or other delivery trucks or
vehicles or conveyances being used or intended to be
used for the purpose of selling and/or distributing
GASUL and SHELLANE LPG cylinders.
45

Additionally, since the described items are clearly
limited only to those which bear direct relation to the
offense, i.e., violation of section 155 of Republic Act
No. 8293, for which the warrant was issued, the
requirement of particularity of description is
satisfied.
Given the foregoing, the indication of the accurate
sizes of the GASUL and SHELLANE LPG cylinders
or tanks would be unnecessary.
Finally, petitioners claim that MASAGANA has the
right to intervene and to move for the return of the
seized items; that the items seized by the raiding
team were being used in the legitimate business of
MASAGANA; that the raiding team had no right to
seize them under the guise that the same were being
used in refilling GASUL and SHELLANE LPG
cylinders; and that there being no action for
infringement filed against them and/or
MASAGANA from the seizure of the items up to the
present, it is only fair that the seized articles be
returned to the lawful owner in accordance with
Section 20 of A.M. No. 02-1-06-SC.
It is an elementary and fundamental principle of
corporation law that a corporation is an entity
separate and distinct from its stockholders, directors
or officers. However, when the notion of legal entity
is used to defeat public convenience, justify wrong,
protect fraud, or defend crime, the law will regard
the corporation as an association of persons, or in the
case of two corporations merge them into one.
46
In
other words, the law will not recognize the separate
corporate existence if the corporation is being used
pursuant to the foregoing unlawful objectives. This
non-recognition is sometimes referred to as the
doctrine of piercing the veil of corporate entity or
disregarding the fiction of corporate entity. Where
the separate corporate entity is disregarded, the
corporation will be treated merely as an association
of persons and the stockholders or members will be
considered as the corporation, that is, liability will
attach personally or directly to the officers and
stockholders.
47

As we now find, the petitioners, as directors/officers
of MASAGANA, are utilizing the latter in violating
the intellectual property rights of Petron and
Pilipinas Shell. Thus, petitioners collectively and
MASAGANA should be considered as one and the
same person for liability purposes. Consequently,
MASAGANAs third party claim serves no refuge
for petitioners.
Even if we were to sustain the separate personality of
MASAGANA from that of the petitioners, the effect
will be the same. The law does not require that the
property to be seized should be owned by the person
against whom the search warrants is directed.
Ownership, therefore, is of no consequence, and it is
sufficient that the person against whom the warrant
is directed has control or possession of the property
sought to be seized.
48
Hence, even if, as petitioners
claimed, the properties seized belong to
MASAGANA as a separate entity, their seizure
pursuant to the search warrants is still valid.
Further, it is apparent that the motor compressor,
LPG refilling machine and the GASUL and SHELL
LPG cylinders seized were the corpus delicti, the
body or substance of the crime, or the evidence of
the commission of trademark infringement. These
were the very instruments used or intended to be
used by the petitioners in trademark infringement. It
is possible that, if returned to MASAGANA, these
items will be used again in violating the intellectual
property rights of Petron and Pilipinas Shell.
49
Thus,
the RTC was justified in denying the petitioners
motion for their return so as to prevent the
petitioners and/or MASAGANA from using them
again in trademark infringement.
Petitioners reliance on Section 20 of A.M. No. 02-1-
06-SC,
50
is not tenable. As correctly observed by the
Solicitor General, A.M. 02-1-06-SC is not applicable
in the present case because it governs only searches
and seizures in civil actions for infringement of
intellectual property rights.
51
The offense
complained of herein is for criminal violation of
Section 155 in relation to Section 170
52
of Republic
Act No. 8293.
WHEREFORE, the petition is DENIED. The
Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 79256, dated 30 September 2004
and 1 June 2005, respectively, are hereby
AFFIRMED. Costs against petitioners.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice
WE CONCUR:
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 108946 January 28, 1999
FRANCISCO G. JOAQUIN, JR., and BJ
PRODUCTIONS, INC., petitioners,
vs.
HONORABLE FRANKLIN DRILON, GABRIEL
ZOSA, WILLIAM ESPOSO, FELIPE MEDINA,
JR., and CASEY FRANCISCO, respondents.

MENDOZA, J .:
This is a petition for certiorari. Petitioners seek
to annul the resolution of the Department of
Justice, dated August 12, 1992, in Criminal
Case No. Q-92-27854, entitled "Gabriel Zosa, et
al. v. City Prosecutor of Quezon City and
Francisco Joaquin, Jr.," and its resolution, dated
December 3, 1992, denying petitioner Joaquin's
motion for reconsideration.
Petitioner BJ Productions, Inc. (BJPI) is the
holder/grantee of Certificate of Copyright No.
M922, dated January 28, 1971, of Rhoda and
Me, a dating game show aired from 1970 to
1977.
On June 28, 1973, petitioner BJPI submitted to
the National Library an addendum to its
certificate of copyright specifying the show's
format and style of presentation.
On July 14, 1991, while watching television,
petitioner Francisco Joaquin, Jr., president of
BJPI, saw on RPN Channel 9 an episode of It's
a Date, which was produced by IXL
Productions, Inc. (IXL). On July 18, 1991, he
wrote a letter to private respondent Gabriel M.
Zosa, president and general manager of IXL,
informing Zosa that BJPI had a copyright to
Rhoda and Me and demanding that IXL
discontinue airing It's a Date.
In a letter, dated July 19, 1991, private
respondent Zosa apologized to petitioner
Joaquin and requested a meeting to discuss a
possible settlement. IXL, however, continued
airing It's a Date, prompting petitioner Joaquin
to send a second letter on July 25, 1991 in
which he reiterated his demand and warned
that, if IXL did not comply, he would endorse the
matter to his attorneys for proper legal action.
Meanwhile, private respondent Zosa sought to
register IXL's copyright to the first episode of It's
a Date for which it was issued by the National
Library a certificate of copyright August 14,
1991.
Upon complaint of petitioners, an information for
violation of P.D. No. 49 was filed against private
respondent Zosa together with certain officers
of RPN Channel 9, namely, William Esposo,
Felipe Medina, and Casey Francisco, in the
Regional Trial Court of Quezon City where it
was docketed as Criminal Case No. 92-27854
and assigned to Branch 104 thereof. However,
private respondent Zosa sought a review of the
resolution of the Assistant City Prosecutor
before the Department of Justice.
On August 12, 1992, respondent Secretary of
Justice Franklin M. Drilon reversed the
Assistant City Prosecutor's findings and directed
him to move for the dismissal of the case
against private respondents.
1

Petitioner Joaquin filed a motion for
reconsideration, but his motion denied by
respondent Secretary of Justice on December
3, 1992. Hence, this petition. Petitioners
contend that:
1. The public respondent
gravely abused his
discretion amounting to
lack of jurisdiction
when he invoked non-
presentation of the
master tape as being
fatal to the existence of
probable cause to prove
infringement, despite the
fact that private
respondents never
raised the same as a
controverted issue.
2. The public respondent
gravely abused his
discretion amounting to
lack of jurisdiction when
he arrogated unto
himself the determination
of what is copyrightable
an issue which is
exclusively within the
jurisdiction of the
regional trial court to
assess in a proper
proceeding.
Both public and private respondents maintain
that petitioners failed to establish the existence
of probable cause due to their failure to present
the copyrighted master videotape of Rhoda and
Me. They contend that petitioner BJPI's
copyright covers only a specific episode of
Rhoda and Me and that the formats or concepts
of dating game shows are not covered by
copyright protection under P.D. No. 49.
Non-Assignment of Error.
Petitioners claim that their failure to submit the
copyrighted master videotape of the television
show Rhoda and Me was not raised in issue by
private respondents during the preliminary
investigation and, therefore, it was error for the
Secretary of Justice to reverse the investigating
prosecutor's finding of probable cause on this
ground.
A preliminary investigation falls under the
authority of the state prosecutor who is given by
law the power to direct and control criminal
actions.
2
He is, however, subject to the control
of the Secretary of Justice. Thus, Rule 112, 4
of the Revised Rules of Criminal Procedure,
provides:
Sec. 4. Duty of investigating fiscal. If
the investigating fiscal finds cause to hold
the respondent for trial, he shall prepare
the resolution and corresponding
information. He shall certify under oath
that he, or as shown by the record, an
authorized officer, has personally
examined the complainant and his
witnesses, that there is reasonable
ground to believe that a crime has been
committed and that the accused is
probably guilty thereof, that the accused
was informed of the complaint and of the
evidence submitted against him and that
he was given an opportunity to submit
controverting evidence. Otherwise, he
shall recommend dismissal of the
complaint.
In either case, he shall forward the
records of the case to the provincial or
city fiscal or chief state prosecutor within
five (5) days from his resolution. The
latter shall take appropriate action
thereon ten (10) days from receipt
thereof, immediately informing the parties
of said action.
No complaint or information may be filed
or dismissed by an investigating fiscal
without the prior written authority or
approval of the provincial or city fiscal or
chief state prosecutor.
Where the investigating assistant fiscal
recommends the dismissal of the case
but his findings are reversed by the
provincial or city fiscal or chief state
prosecutor on the ground that a probable
cause exists, the latter may, by himself,
file the corresponding information against
the respondent or direct any other
assistant fiscal or state prosecutor to do
so, without conducting another
preliminary investigation.
If upon petition by a proper party, the
Secretary of Justice reverses the
resolution of the provincial or city fiscal or
chief state prosecutor, he shall direct the
fiscal concerned to file the corresponding
information without conducting another
preliminary investigation or to dismiss or
move for dismissal of the complaint or
information.
In reviewing resolutions of prosecutors, the
Secretary of Justice is not precluded from
considering errors, although unassigned, for the
purpose of determining whether there is
probable cause for filing cases in court. He must
make his own finding, of probable cause and is
not confined to the issues raised by the parties
during preliminary investigation. Moreover, his
findings are not subject to review unless shown
to have been made with grave abuse.
Opinion of the Secretary of Justice
Petitioners contend, however, that the
determination of the question whether the
format or mechanics of a show is entitled to
copyright protection is for the court, and not the
Secretary of Justice, to make. They assail the
following portion of the resolution of the
respondent Secretary of Justice:
[T]he essence of copyright infringement
is the copying, in whole or in part, of
copyrightable materials as defined and
enumerated in Section 2 of PD. No. 49.
Apart from the manner in which it is
actually expressed, however, the idea of
a dating game show is, in the opinion of
this Office, a non-copyrightable material.
Ideas, concepts, formats, or schemes in
their abstract form clearly do not fall
within the class of works or materials
susceptible of copyright registration as
provided in PD. No. 49.
3
(Emphasis
added.)
It is indeed true that the question whether the
format or mechanics of petitioners television
show is entitled to copyright protection is a legal
question for the court to make. This does not,
however, preclude respondent Secretary of
Justice from making a preliminary determination
of this question in resolving whether there is
probable cause for filing the case in court. In
doing so in this case, he did not commit any
grave error.
Presentation of Master Tape
Petitioners claim that respondent Secretary of
Justice gravely abused his discretion in ruling
that the master videotape should have been
predented in order to determine whether there
was probable cause for copyright infringement.
They contend that 20th Century Fox Film
Corporation v. Court of Appeals,
4
on which
respondent Secretary of Justice relied in
reversing the resolution of the investigating
prosecutor, is inapplicable to the case at bar
because in the present case, the parties
presented sufficient evidence which clearly
establish "linkage between the copyright show
"Rhoda and Me" and the infringing TV show "It's
a Date."
5

The case of 20th Century Fox Film Corporation
involved raids conducted on various videotape
outlets allegedlly selling or renting out "pirated"
videotapes. The trial court found that the
affidavits of NBI agents, given in support of the
application for the search warrant, were
insufficient without the master tape.
Accordingly, the trial court lifted the search
warrants it had previously issued against the
defendants. On petition for review, this Court
sustained the action of the trial court and ruled:
6

The presentation of the master tapes of
the copyrighted films from which the
pirated films were allegedly copied, was
necessary for the validity of search
warrants against those who have in their
possession the pirated films. The
petitioner's argument to the effect that the
presentation of the master tapes at the
time of application may not be necessary
as these would be merely evidentiary in
nature and not determinative of whether
or not a probable cause exists to justify
the issuance of the search warrants is not
meritorious. The court cannot presume
that duplicate or copied tapes were
necessarily reproduced from master
tapes that it owns.
The application for search warrants was
directed against video tape outlets which
allegedly were engaged in the
unauthorized sale and renting out of
copyrighted films belonging to the
petitioner pursuant to P.D. 49.
The essence of a copyright infringement
is the similarity or at least substantial
similarity of the purported pirated works
to the copyrighted work. Hence, the
applicant must present to the court the
copyrighted films to compare them with
the purchased evidence of the video
tapes allegedly pirated to determine
whether the latter is an unauthorized
reproduction of the former. This linkage
of the copyrighted films to the pirated
films must be established to satisfy the
requirements of probable cause. Mere
allegations as to the existence of the
copyrighted films cannot serve as basis
for the issuance of a search warrant.
This ruling was qualified in the later case
of Columbia Pictures, Inc. v. Court of
Appeals
7
in which it was held:
In fine, the supposed pronunciamento in
said case regarding the necessity for the
presentation of the master tapes of the
copyrighted films for the validity of search
warrants should at most be understood to
merely serve as a guidepost in
determining the existence of probable
cause in copyright infringement cases
where there is doubt as to the true nexus
between the master tape and the printed
copies. An objective and careful reading
of the decision in said case could lead to
no other conclusion than that said
directive was hardly intended to be a
sweeping and inflexible requirement in all
or similar copyright infringement cases. . .

8

In the case at bar during the preliminary
investigation, petitioners and private
respondents presented written descriptions of
the formats of their respective televisions
shows, on the basis of which the investigating
prosecutor ruled:
As may [be] gleaned from the evidence
on record, the substance of the television
productions complainant's "RHODA AND
ME" and Zosa's "IT'S A DATE" is that two
matches are made between a male and a
female, both single, and the two couples
are treated to a night or two of dining
and/or dancing at the expense of the
show. The major concepts of both shows
is the same. Any difference appear mere
variations of the major concepts.
That there is an infringement on the
copyright of the show "RHODA AND ME"
both in content and in the execution of
the video presentation are established
because respondent's "IT'S A DATE" is
practically an exact copy of complainant's
"RHODA AND ME" because of
substantial similarities as follows, to wit:
RHODA AND ME "IT'S A DATE"
Set 1 Set 1
a. Unmarried participant of one gender (searcher) appears on one side of
a divider, while three (3) unmarried participants of the other gender are on
the other side of the divider. This arrangement is done to ensure that the
searcher does not see the searchees.
a. same
b. Searcher asks a question to be answered by each of the searchees.
The purpose is to determine who among the searchees is the most
compatible with the searcher.
b. same
c. Searcher speculates on the match to the searchee. c. same
d. Selection is made by the use of compute (sic) methods, or by the way
questions are answered, or similar methods.
d. Selection is based on the answer of the Searchees.
Set 2 Set 2
Same as above with the genders of the searcher and searchees
interchanged.
9

same
Petitioners assert that the format of Rhoda and
Me is a product of ingenuity and skill and is thus
entitled to copyright protection. It is their
position that the presentation of a point-by-point
comparison of the formats of the two shows
clearly demonstrates the nexus between the
shows and hence establishes the existence of
probable cause for copyright infringement. Such
being the case, they did not have to produce the
master tape.
To begin with the format of a show is not
copyrightable. Section 2 of P.D. No. 49,
10

otherwise known as the DECREE ON
INTELLECTUAL PROPERTY, enumerates the
classes of work entitled to copyright protection,
to wit:
Sec. 2. The rights granted by this Decree
shall, from the moment of creation,
subsist with respect to any of the
following classes of works:
(A) Books, including composite and
cyclopedic works, manuscripts,
directories, and gazetteers:
(B) Periodicals, including pamphlets and
newspapers;
(C) Lectures, sermons, addresses,
dissertations prepared for oral delivery;
(D) Letters;
(E) Dramatic or dramatico-musical
compositions; choreographic works and
entertainments in dumb shows, the acting
form of which is fixed in writing or
otherwise;
(F) Musical compositions, with or without
words;
(G) Works of drawing, painting,
architecture, sculpture, engraving,
lithography, and other works of art;
models or designs for works of art;
(H) Reproductions of a work of art;
(I) Original ornamental designs or models
for articles of manufacture, whether or
not patentable, and other works of
applied art;
(J) Maps, plans, sketches, and charts;
(K) Drawings or plastic works of a
scientific or technical character;
(I) Photographic works and works
produced by a process analogous to
photography lantern slides;
(M) Cinematographic works and works
produced by a process analogous to
cinematography or any process for
making audio-visual recordings;
(N) Computer programs;
(O) Prints, pictorial illustrations
advertising copies, labels tags, and box
wraps;
(P) Dramatizations, translations,
adaptations, abridgements,
arrangements and other alterations of
literary, musical or artistic works or of
works of the Philippine government as
herein defined, which shall be protected
as provided in Section 8 of this Decree.
(Q) Collections of literary, scholarly, or
artistic works or of works referred to in
Section 9 of this Decree which by reason
of the selection and arrangement of their
contents constitute intellectual creations,
the same to be protected as such in
accordance with Section 8 of this Decree.
(R) Other literary, scholarly, scientific and
artistic works.
This provision is substantially the same as 172
of the INTELLECTUAL PROPERTY CODE OF
PHILIPPINES (R.A. No. 8293).
11
The format or
mechanics of a television show is not included
in the list of protected works in 2 of P.D. No.
49. For this reason, the protection afforded by
the law cannot be extended to cover them.
Copyright, in the strict sense of the term,
is purely a statutory right. It is a new or
independent right granted by the statute,
and not simply a pre-existing right
regulated by the statute. Being a
statutory grant, the rights are only such
as the statute confers, and may be
obtained and enjoyed only with respect to
the subjects and by the persons and on
terms and conditions specified in the
statute.
12

Since . . . copyright in published works is
purely a statutory creation, a copyright
may be obtained only for a work falling
within the statutory enumeration or
description.
13

Regardless of the historical viewpoint, it
is authoritatively settled in the United
States that there is no copyright except
that which is both created and secured by
act of Congress . . . . .
14

P.D. No. 49, 2, in enumerating what are
subject to copyright, refers to finished works
and not to concepts. The copyright does not
extend to an idea, procedure, process, system,
method of operation, concept, principle, or
discovery, regardless of the form in which it is
described, explained, illustrated, or embodied in
such work.
15
Thus, the new INTELLECTUAL
PROPERTY CODE OF THE PHILIPPINES
provides:
Sec. 175. Unprotected Subject Matter.
Notwithstanding the provisions of
Sections 172 and 173, no protection shall
extend, under this law, to any idea,
procedure, system, method or operation,
concept, principle, discovery or mere
data as such, even if they are expressed,
explained, illustrated or embodied in a
work; news of the day and other
miscellaneous facts having the character
of mere items of press information; or any
official text of a legislative, administrative
or legal nature, as well as any official
translation thereof.
What then is the subject matter of petitioners'
copyright? This Court is of the opinion that
petitioner BJPI's copyright covers audio-visual
recordings of each episode of Rhoda and Me,
as falling within the class of works mentioned in
P.D. 49, 2(M), to wit:
Cinematographic works and works
produced by a process analogous to
cinematography or any process for
making audio-visual recordings;
The copyright does not extend to the
general concept or format of its dating
game show. Accordingly, by the very
nature of the subject of petitioner BJPI's
copyright, the investigating prosecutor
should have the opportunity to compare
the videotapes of the two shows.
Mere description by words of the general format
of the two dating game shows is insufficient; the
presentation of the master videotape in
evidence was indispensable to the
determination of the existence of probable
cause. As aptly observed by respondent
Secretary of Justice:
A television show includes more than
mere words can describe because it
involves a whole spectrum of visuals and
effects, video and audio, such that no
similarity or dissimilarity may be found by
merely describing the general
copyright/format of both dating game
shows.
WHEREFORE, the petition is hereby
DISMISSED
SO ORDERED.1wphi1.nt
Puno, Quisumbing and Buena, JJ., concur.
Bellosillo, J., took no part.
Footnotes

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 119280 August 10, 2006
UNILEVER PHILIPPINES (PRC), INC.,
Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and
PROCTER AND GAMBLE PHILIPPINES,
INC., Respondents.
D E C I S I O N
CORONA, J .:
In this petition for review under Rule 45 of the Rules
of Court, petitioner assails the February 24, 1995
decision
1
of the Court of Appeals (CA) in CA-G.R.
SP No. 35242 entitled "Unilever Philippines (PRC),
Inc. v. Honorable Fernando V. Gorospe, Jr. and
Procter and Gamble Philippines, Inc. (P&GP)"
which affirmed the issuance by the court a quo of a
writ of preliminary injunction against it. The writ
enjoined petitioner from using and airing, until
further orders of the court, certain television
commercials for its laundry products claimed to be
identical or similar to its "double tug" or "tac-tac"
key visual.
2

Petitioner alleges that the writ of preliminary
injunction was issued by the trial court (and affirmed
by the CA) without any evidence of private
respondents clear and unmistakable right to the writ.
Petitioner further contends that the preliminary
injunction issued against it already disposed of the
main case without trial, thus denying petitioner of
any opportunity to present evidence on its behalf.
The antecedents show that on August 24, 1994,
private respondent Procter and Gamble Phils., Inc.
filed a complaint for injunction with damages and a
prayer for temporary restraining order and/or writ of
preliminary injunction against petitioner Unilever,
alleging that:
1.5. As early as 1982, a P&G subsidiary in Italy used
a key visual in the advertisement of its laundry
detergent and bleaching products. This key visual
known as the "double-tug" or "tac-tac"
demonstration shows the fabric being held by both
hands and stretched sideways.
1.6. The "tac-tac" was conceptualized for P&G by
the advertising agency Milano and Gray of Italy in
1982. The "tac-tac" was used in the same year in an
advertisement entitled "All aperto" to demonstrate
the effect on fabrics of one of P&GPs products, a
liquid bleach called "Ace."
x x x x x x x x x
1.7. Since then, P&G has used the "tac-tac" key
visual in the advertisement of its products. In fact, in
1986, in Italy, the "tac-tac" key visual was used in
the television commercial for "Ace" entitled "Kite."
1.8. P&G has used the same distinctive "tac-tac" key
visual to local consumers in the Philippines.
x x x x x x x x x
1.10. Substantially and materially imitating the
aforesaid "tac-tac" key visual of P&GP and in blatant
disregard of P&GPs intellectual property rights,
Unilever on 24 July 1993 started airing a 60 second
television commercial "TVC" of its "Breeze
Powerwhite" laundry product called "Porky." The
said TVC included a stretching visual presentation
and sound effects almost [identical] or substantially
similar to P&GPs "tac-tac" key visual.
x x x x x x x x x
1.14. On July 15, 1994, P&GP aired in the
Philippines, the same "Kite" television advertisement
it used in Italy in 1986, merely dubbing the Italian
language with Filipino for the same produce "Ace"
bleaching liquid which P&GP now markets in the
Philippines.
1.15. On August 1, 1994, Unilever filed a Complaint
with the Advertising Board of the Philippines to
prevent P&GP from airing the "Kite" television
advertisement.
3

On August 26, 1994, Judge Gorospe issued an order
granting a temporary restraining order and setting it
for hearing on September 2, 1994 for Unilever to
show cause why the writ of preliminary injunction
should not issue. During the hearing on September 2,
1994, P&GP received Unilevers answer with
opposition to preliminary injunction. P&GP filed its
reply to Unilevers opposition to a preliminary
injunction on September 6, 1994.
During the hearing on September 9, 1994, Judge
Gorospe ordered petitioner to submit a sur-rejoinder.
P&GP received Unilevers rejoinder to reply on
September 13, 1994. The following day, on
September 14, 1994, P&GP filed its sur-reply to
Unilevers rejoinder.
On September 19, 1994, P&GP received a copy of
the order dated September 16, 1994 ordering the
issuance of a writ of preliminary injunction and
fixing a bond of P100,000. On the same date, P&GP
filed the required bond issued by Prudential
Guarantee and Assurance, Inc.
On September 21, 1994, petitioner appealed to the
CA assigning the following errors allegedly
committed by the court a quo, to wit:
PUBLIC RESPONDENT HAD ACTED WITHOUT
OR IN EXCESS OF JURISDICTION AND WITH
GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OF JURISDICTION IN ISSUING THE
WRIT OF PRELIMINARY INJUNCTION IN
VIOLATION OF THE RULES ON EVIDENCE
AND PROCEDURE, PARTICULARLY OF SEC. 3
(a), RULE 58 OF THE REVISED RULES OF
COURT AND OF THE PREVAILING
JURISPRUDENCE.
PUBLIC RESPONDENT IN ISSUING THE VOID
ORDER DATED SEPTEMBER 16, 1994, HAD, IN
EFFECT, ALREADY PREJUDGED THE MERITS
OF THE MAIN CASE.
PUBLIC RESPONDENT HAD ISSUED THE
VOID ORDER ACCORDING RELIEF TO A NON-
PARTY IN CIVIL CASE NO. 94-2434 WITHOUT
JURISDICTION.
PUBLIC RESPONDENT IN ISSUING THE VOID
ORDER HAD DEPRIVED PETITIONER OF
SUBSTANTIVE AND PROCEDURAL DUE
PROCESS; PUBLIC RESPONDENT HAD
FORECLOSED PETITIONERS RIGHT AND THE
OPPORTUNITY TO CROSS-EXAMINE
PROCTERS WITNESSES ABAD AND
HERBOSA.
4

On February 24, 1995, the CA rendered its decision
finding that Judge Gorospe did not act with grave
abuse of discretion in issuing the disputed order. The
petition for certiorari was thus dismissed for lack of
merit.
After a careful perusal of the records, we agree with
the CA and affirm its decision in toto:
Petitioner does not deny that the questioned TV
advertisements are substantially similar to P&GPs
"double tug" or "tac-tac" key visual. However, it
submits that P&GP is not entitled to the relief
demanded, which is to enjoin petitioner from airing
said TV advertisements, for the reason that petitioner
has Certificates of Copyright Registration for which
advertisements while P&GP has none with respect to
its "double-tug" or "tac-tac" key visual. In other
words, it is petitioners contention that P&GP is not
entitled to any protection because it has not
registered with the National Library the very TV
commercials which it claims have been infringed by
petitioner.
We disagree. Section 2 of PD 49 stipulates that the
copyright for a work or intellectual creation subsists
from the moment of its creation. Accordingly, the
creator acquires copyright for his work right upon its
creation. Contrary to petitioners contention, the
intellectual creators exercise and enjoyment of
copyright for his work and the protection given by
law to him is not contingent or dependent on any
formality or registration. Therefore, taking the
material allegations of paragraphs 1.3 to 1.5 of
P&GPs verified Complaint in the context of PD 49,
it cannot be seriously doubted that at least, for
purposes of determining whether preliminary
injunction should issue during the pendency of the
case, P&GP is entitled to the injunctive relief prayed
for in its Complaint.
The second ground is likewise not well-taken. As
adverted to earlier, the provisional remedy of
preliminary injunction will not issue unless it is
shown in the verified complaint that plaintiff is
probably entitled to the relief demanded, which
consists in whole or in part in restraining the
commission or continuance of the acts complained
of. In view of such requirement, the court has to
make a tentative determination if the right sought to
be protected exists and whether the act against which
the writ is to be directed is violative of such right.
Certainly, the courts determination as to the
propriety of issuing the writ cannot be taken as a
prejudgment of the merits of the case because it is
tentative in nature and the writ may be dissolved
during or after the trial if the court finds that plaintiff
was not entitled to it.
x x x x x x x x x
Obviously, the determination made by the court a
quo was only for purposes of preliminary injunction,
without passing upon the merits of the case, which
cannot be done until after a full-blown hearing is
conducted.
The third ground is patently unmeritorious. As
alleged in the Complaint P&GP is a subsidiary of
Procter and Gamble Company (P&G) for which the
"double tug" or "tac-tac" key visual was
conceptualized or created. In that capacity, P&GP
used the said TV advertisement in the Philippines to
promote its products. As such subsidiary, P&GP is
definitely within the protective mantle of the statute
(Sec. 6, PD 49).
Finally, We find the procedure adopted by the court
a quo to be in order.
The record clearly shows that respondent Judge
followed the (procedure provided for in Section 5,
Rule 58, as amended by BP 224, and Paragraph A(8)
of the Interim Rules). In fact, the court a quo set the
incident for hearing on September 2, 1994, at which
date petitioner was ordered to show cause why the
writ should not be issued. Petitioner filed an
Opposition to the application for preliminary
injunction. The same incident was again set for
hearing on September 9, 1994, during which the
parties made some manifestations in support of their
respective positions. Subsequent to such hearing
petitioner filed a Reply to P&GPs Rejoinder to its
Opposition. Under the foregoing circumstances, it is
absurd to even suggest that petitioner was not given
its day in court in the matter of the issuance of the
preliminary injunctive relief.
x x x x x x x x x
There was of course extreme urgency for the court a
quo to act on plaintiffs application for preliminary
injunction. The airing of TV commercials is
necessarily of limited duration only. Without such
temporary relief, any permanent injunction against
the infringing TV advertisements of which P&GP
may possibly succeed in getting after the main case
is finally adjudicated could be illusory if by then
such advertisements are no longer used or aired by
petitioner. It is therefore not difficult to perceive the
possible irreparable damage which P&GP may suffer
if respondent Judge did not act promptly on its
application for preliminary injunction.
5

Preliminary injunction is a provisional remedy
intended to provide protection to parties for the
preservation of their rights or interests during the
pendency of the principal action.
6
Thus, Section1,
Rule 58 of the Rules of Court provides:
Section 1. Preliminary injunction defined; classes.
A preliminary injunction is an order granted at any
stage of an action or proceeding prior to the
judgment or final order, requiring a party or a court,
agency or a person to refrain from a particular act or
acts. It may also require the performance of a
particular act or acts, in which case it shall be known
as a preliminary mandatory injunction.
Injunction is resorted to only when there is a
pressing necessity to avoid injurious consequences
which cannot be remedied under any standard
compensation.
7
As correctly ruled by the CA, there
was an extreme urgency to grant the preliminary
injunction prayed for by P&GP considering that TV
commercials are aired for a limited period of time
only. In fact, this Court takes note of the fact that the
TV commercial in issue the Kite TV
advertisement is no longer aired today, more than
10 years after the injunction was granted on
September 16, 1994.
The sole objective of a writ of preliminary injunction
is to preserve the status quo until the merits of the
case can be heard fully.
8
A writ of preliminary
injunction is generally based solely on initial and
incomplete evidence.
9
Thus, it was impossible for
the court a quo to fully dispose of the case, as
claimed by petitioner, without all the evidence
needed for the full resolution of the same. To date,
the main case still has to be resolved by the trial
court.
The issuance of a preliminary injunction rests
entirely on the discretion of the court and is
generally not interfered with except in cases of
manifest abuse.
10
There was no such abuse in the
case at bar, especially because petitioner was given
all the opportunity to oppose the application for
injunction. The fact was, it failed to convince the
court why the injunction should not be issued. Thus,
in Santos v. Court of Appeals,
11
we held that no
grave abuse of discretion can be attributed to a judge
or body issuing a writ of preliminary injunction
where a party has not been deprived of its day in
court as it was heard and it exhaustively presented all
its arguments and defenses.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO ORDERED.
RENATO C. CORONA
Associate Justice
WE CONCUR:

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