Irrespective of the Holistic and Dominancy tests, the Court finds no confusing similarity

between the subject marks. While both marks use the shape of a shark, the Court noted
GREAT WHITE SHARK ENTERPRISES, INC. v. DANILO M. CARALDE, JR. . G.R. No. 192294 . distinct visual and aural differences between them.
November 21, 2012

As may be gleaned from the foregoing, the visual dissimilarities between the two (2) marks are
FACTS: evident and significant, negating the possibility of confusion in the minds of the ordinary
purchaser, especially considering the distinct aural difference between the marks.

On July 31, 2002, Caralde filed before the Bureau of Legal Affairs (BLA), IPO a trademark
application seeking to register the mark "SHARK & LOGO" for his manufactured goods under
Class 25, such as slippers, shoes and sandals. Petitioner, a foreign corporation domiciled in
Florida, USA, opposed the application claiming to be the owner of the mark consisting of a Finally, there being no confusing similarity between the subject marks, the matter of whether
representation of a shark in color. It alleged that the mark pending registration is confusingly Great White Sharks mark has gained recognition and acquired becomes unnecessary.
similar with theirs which is likely to confuse the public.

Caralde averred that the subject marks are distinctively different from one another and easily
distinguishable.

The BLA Director ruled in favor of petitioners citing that the shark logo was both a dominant
feature and are similar and that both trademarks belong to the same class. The Director
General of the IPO affirmed this decision. The CA, however, reversed the decision citing that
there were no confusing similarity.

ISSUE: Whether there is confusing similarity between the trademarks.

RULING:

No. A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily and is

capable of identifying and distinguishing the goods of one manufacturer or seller from those of
another. Apart from its commercial utility, the benchmark of trademark registrability is
distinctiveness. Thus, a generic figure, as that of a shark in this case, if employed and designed
in a distinctive manner, can be a registrable trademark device, subject to the provisions of the
IP Code.

53
G.R. No. 188225 : November 28, 2012
SHIRLEY F. TORRES, Petitioner, v. IMELDA PEREZ and RODRIGO PEREZ, Respondents.
G.R. No. 198728
SHIRLEY F. TORRES, Petitioner, v. IMELDA PEREZ and RODRIGO PEREZ, Respondents.
DECISION
SERENO, C.J.:
These are Petitions for Review on Certiorari under Rule 45 of the Rules of Court. The petition
docketed as G.R. No. 188225 assails the Decision1rll of the Court of Appeals (CA) in CA-G.R.
SP No. 103846 dated 11 March 2009. The CA Decision nullified the Orders dated 12 February
20082rll and 11 April 20083rll of the Regional Trial Court (RTC) of Makati, Branch 149.
The RTC Orders had denied the Motion to Dismiss and/or Withdraw Information filed against
respondents for unfair competition (violation of Section 168 in relation to Section
170)4rll under Republic Act No. (R.A.) 8293 (Intellectual Property Code of the Philippines).
On the other hand, the petition docketed as G.R. No. 198728 assails the Decision5rll in
CA-G.R. SP No. 111903 dated 29 September 2011, which affirmed the RTC Orders dated 29 July
20096rll and 19 October 2009,7rll this time quashing the Information against
respondents.
Respondents Imelda and Rodrigo are spouses who own RGP Footwear Manufacturing (RGP),
which supplies ladies shoes to Shoe Mart (SM).8rll They met petitioner when she sold them
business-class plane tickets to the United States in 2002.9rll She was also interested in
doing business with SM, and they suggested that she form a partnership with their daughter
Sunshine, nicknamed Sasay.10rll
Petitioner and Sunshine formed Sasays Closet Co. (SCC), a partnership registered with the
Securities and Exchange Commission on 17 October 2002. SCC was engaged in the supply,
trading, retailing of garments such as underwear, childrens wear, womens and mens wear, and
other incidental activities related thereto.11rll
For its products, SCC used the trademark "Naturals with Design," which it filed with the
Intellectual Property Office on 24 August 2005 and registered on 26 February
2007.12rll These products were primarily supplied to SM,13rll which assigned to them the
vendor code "190501" for purposes of identification.14rll
SCC used the facilities and equipment owned by RGP, as well as the latters business address
(No. 72 Victoria Subdivision, Barangay Dela Paz, Bin, Laguna), which was also the residential
address of respondents.15rll
In August 2003, Sunshine pulled out of the partnership, because she was hired to work in an
international school.16rllRespondent Imelda took over Sunshines responsibilities in the
partnership.17rll
On 14 December 2005, petitioner sent an email to respondent Imelda asking to be reimbursed
for expenses incurred in the formers travel to China.18rllRespondent Imelda replied the
following day, stating that the partnership could not reimburse petitioner, because the trip was
personal and not business-related.19rll In the same email, respondent Imelda vented her
frustration over the fact that she, together with respondent Rodrigo, had been doing all the
work for SCC and incurring expenses that they did not charge to the
partnership.20rllRespondent Imelda then informed petitioner of the formers decision to
dissolve the partnership.21rll Despite the objections of petitioner to the dissolution of SCC,
various amounts were paid to her by respondents from January to April 2006 representing her
share in the partnership assets.22rll
Meanwhile, on 27 March 2006, petitioner established Tezares Enterprise, a sole proprietorship
engaged in supplying and trading of clothing and accessories except footwear. 23rll Also in
March 2006, she discovered that underwear products bearing the brand "Naturals" were being
sold in SM with vendor code "180195."24rll This code was registered to RGP,25rll a fact
confirmed by test buys conducted by her lawyers on 13 and 14 May 2006.26rll
On 5 June 2006, a search warrant for unfair competition under Section 168 in relation to
Section 170 of R.A. 8293 was issued by the RTC of Manila, Branch 24, against respondents at
their address.27rllThe search warrant called for the seizure of womens undergarments
bearing the brand "Naturals," as well as equipment and papers having the vendor code
"180195" or the inscription "RGP." The search warrant was implemented on the same day.
However, it was quashed by the same court on 20 October 2006 upon motion of respondents.
The trial court ruled that respondents did not pass off "Naturals" as the brand of another
manufacturer. On the contrary, they used the brand in the honest belief that they owned SCC,
the owner of the brand.
On 9 June 2006, petitioner filed a criminal complaint for unfair competition against
respondents and Sunshine before the City Prosecution Office of Makati City. 28rll Assistant
City Prosecutor Imelda P. Saulog found probable cause to indict respondents for unfair
competition.29rll She ruled that they had clearly passed off the "Naturals" brand as RGPs
even if the brand was owned by SCC. According to the prosecutor, SCC was indeed dissolved
when respondent Imelda manifested her intention to cease from the partnership in an email
sent to petitioner on 15 December 2005.30rll The prosecutor said, however, that it
remained operational, since the process of winding up its business had not been completed.
54
Thus, SCC remained the owner of the "Naturals" brand, and petitioner being a legitimate
partner thereof had a right to file the complaint against respondents. The prosecutor found no
probable cause against Sunshine, as it was established that she had withdrawn from SCC as of
August 2003.
The indictment was raffled to RTC Makati City, Branch 149. On 23 October 2006, it issued an
Order finding probable cause for the issuance of a warrant of arrest against
respondents.31rll
Respondents filed a petition for review of the prosecutors resolution before the Department of
Justice (DOJ), which on 13 December 2006 issued its own Resolution32rll reversing the
finding of existence of probable cause against them. Contrary to the prosecutors finding, the
DOJ found that SCC had effectively wound up the latters partnership affairs on 24 April 2006
when petitioner was reimbursed for her trip to China. That was the last of the payments made
to her to cover her share in the partnership affairs, which started after respondent Imelda
manifested her intention to cease from the partnership business on 15 December 2005. Thus,
when the criminal complaint for unfair competition was filed on 9 June 2006, there was "no
longer any competition, unfair or otherwise, involving the partnership."33rll
Furthermore, the DOJ ruled that even if SCC had not yet terminated its business and therefore
still existed, respondents had the right to use the "Naturals" brand, as they were already the
exclusive owners of SCC following the completion of payments of petitioners share in the
partnership affairs. Also, the establishment by petitioner of Tezares Enterprise which directly
competed with SCC in terms of products and its subsequent accreditation as supplier of
intimate apparel for SM in April 2006 were regarded by the DOJ as apparent indications that
she no longer had any share in SCC. Thus, the petition for review was granted, and the city
prosecutor of Makati was ordered to withdraw the Information against respondents for unfair
competition.
The DOJ denied the motion for reconsideration filed by petitioner on 28 March
2007.34rll Hence, she filed a petition for certiorari before the CA, where it was docketed as
CA-G.R. SP No. 98861. In her petition, she questioned the DOJ Resolution, but later withdrew
the same on 6 December 2007 for an unknown reason.35rll
Following the directive of the DOJ, the prosecutor filed before the RTC of Makati City, Branch
149, a Motion to Dismiss and/or Withdraw Information on 3 April 2007.36rll The trial court
denied the motion in an Order37rll dated 12 February 2008. It maintained the correctness of
its finding of existence of probable cause in the case and ruled that the findings of the DOJ
would be better appreciated and evaluated in the course of the trial.
Respondents moved for reconsideration,38rll but their motion was denied39rll by the
RTC. Aggrieved, they filed a Petition for Certiorari (with Prayer for the Issuance of a Temporary
Restraining Order and thereafter a Preliminary Injunction)40rll before the CA. They argued
that probable cause for the issuance of a warrant of arrest is different from probable cause for
holding a person for trial. The first is the function of the judge, while the second is the
prosecutors.41rll Thus, respondents claimed that it was wrong for Presiding Judge Cesar O.
Untalan to deny the prosecutors motion to dismiss for lack of probable cause on the basis of
the judges own finding that there was probable cause to issue a warrant of arrest against
respondents. Furthermore, the Judge Untalan based his finding solely on the evidence
submitted by petitioner without evaluating the evidence of respondents.
In the first assailed Decision in CA-G.R. SP No. 10384642rll dated 11 March 2009, the CA
granted the petition. It found that the trial judge committed grave abuse of discretion
amounting to lack or excess of jurisdiction when he denied the prosecutors motion to dismiss
for lack of probable cause. The CA sustained the position of respondents that the finding of
probable cause for the filing of an information is an executive function lodged with the
prosecutor. It also found that the trial judge did not make an independent assessment of the
evidence on record in determining the existence of probable cause for the offense of unfair
competition, as opposed to the exhaustive study made by the DOJ before arriving at its finding
of lack of probable cause.
The CA also ruled that in determining probable cause, the essential elements of the crime
charged must be considered, for their absence would mean that there is no criminal offense. In
determining probable cause for unfair competition, the question is "whether or not the
offenders by the use of deceit or any other means contrary to good faith passes off the goods
manufactured by him or in which he deals, or his business, or services for those of the one
having established such goodwill, or who shall commit any acts calculated to produce said
result."43rll The CA affirmed the findings of the DOJ and the RTC of Manila, Branch 24 that
respondents used the "Naturals" brand because they believed that they were the owners of
SCC, which owned the brand. Furthermore, the partnership had been terminated as of April
2006; hence, the filing of the criminal complaint on 9 June 2006 could no longer prosper. Even
if SCC had not yet terminated its business, respondents, having bought petitioner out of SCC,
were already its exclusive owners and, as such, had the right to use the "Naturals" brand.
According to the CA, the filing of the criminal complaint for unfair competition was nothing but
an offshoot of the misunderstanding and quarrel that arose when respondents initially refused
to reimburse the expenses incurred by petitioner in her trip to China and further escalated
when respondent Imelda decided to dissolve SCC.
Petitioner moved for reconsideration44rll of the CA Decision, but the motion was denied on
1 June 2009.45rll She then brought the matter before this Court via a Petition for Review on
Certiorari filed under Rule 45 of the Rules of Court and docketed as G.R. No.
188225.46rll Without giving due course to the petition, the Court
required47rll respondents to comment thereon. Upon their compliance,48rllpetitioner
was required49rll to file a reply,50rll which was later received on 11 December 2009. On
19 May 2011, she filed her Memorandum.51rll
55
Meanwhile, following the promulgation of the Decision in CA-G.R. SP No. 103846, respondents
filed an Urgent Motion to Dismiss the criminal complaint for unfair competition before the RTC
on 1 April 2009.52rll The motion was duly opposed by petitioner, arguing that the CA
Decision had not yet attained finality in view of her pending petition before this Court; thus,
the motion was premature.53rllThe RTC denied the motion to dismiss for lack of
merit.54rll However, upon motion for reconsideration55rll filed by respondents, it issued competition, and that the findings of the DOJ would be better appreciated in the course of a
the Order dated 29 July 200956rll ordering the quashal of the Information against them. The
trial court issued another Order on 19 October 200957rlldenying petitioners Motion for
Reconsideration.58rll
Petitioner filed a Petition for Certiorari59rll before the CA on the ground that the trial judge
committed grave abuse of discretion amounting to lack or excess of jurisdiction when he
quashed the Information against respondents based on a CA Decision that was not yet final
and executory, being the subject of a petition still pending before this Court.
On 29 September 2011, the CA issued the second assailed Decision in CA-G.R. SP No. 111903
affirming the RTC Orders dated 29 July 2009 and 19 October 2009. The appellate court ruled
that while its Decision in CA-G.R. SP No. 103846 was still under review before this Court,
neithercourt had issued a restraining order or injunction that would prevent the RTC from
implementing the said Decision ordering the dismissal of the information against respondents.
Furthermore, the CA ruled that since petitioner had withdrawn her petition in CA-G.R. SP No.
98861 questioning the DOJ Resolution, the issue of whether there was probable cause had
"already been resolved with finality in the negative."60rll Thus, the trial court cannot be
faulted for following the CA directive to dismiss the Information against respondents.
Opting not to file a motion for reconsideration,61rll petitioner again comes before us on a
Petition for Review on Certiorari questioning the Decision in CA-G.R. SP No. 111903.62rll In
her petition docketed as G.R. No. 198728, she argues that Presiding Judge Cesar O. Untalan
committed grave abuse of discretion amounting to lack or excess of jurisdiction when he
dismissed the criminal case against respondents for unfair competition based on CA findings
that were not yet final. The trial judge was fully aware that those findings were still subject to a
pending petition before this Court.
On 23 November 2011, the Court consolidated G.R. Nos. 198728 and 188225.63rll
ISSUE
Despite the extensive legal battle that petitioner and respondents have waged heretofore,
these petitions will be settled simply through a ruling on whether there exists probable cause
to indict respondents for unfair competition (violation of Section 168 in relation to Section 170)
under R.A. 8293.
OUR RULING
No probable cause to indict respondents
At the outset, it is worth noting that Judge Untalan acted well within the exercise of his judicial
discretion when he denied the Motion to Dismiss and/or Withdraw Information filed by the
prosecution. His finding that there was probable cause to indict respondents for unfair
trial, was based on his own evaluation of the evidence brought before him. It was an
evaluation that was required of him as a judge.
Thus, in Yambot v. Armovit,64rll this Court reiterated the mandate of judges to make a
personal evaluation of records submitted in support of criminal complaints filed before their
respective salas:chanroblesvirtuallawlibrary
Crespo v. Mogul instructs in a very clear manner that once a complaint or information is filed in
court, any disposition of the case as to its dismissal, or the conviction or acquittal of the
accused, rests on the sound discretion of the said court, as it is the best and sole judge of what
to do with the case before it. While the resolution of the prosecutorial arm is persuasive, it is
not binding on the court. It may therefore grant or deny at its option a motion to dismiss or to
withdraw the information based on its own assessment of the records of the preliminary
investigation submitted to it, in the faithful exercise of judicial discretion and prerogative, and
not out of subservience to the prosecutor.65rll x x x. (Emphasis supplied)
Judge Untalan stood firm on this finding in his denial of the motion for reconsideration and
even initially after the CA had made a ruling on the matter. He only performed a task he was
called upon to do, and his judgment on the matter although erroneous cannot be regarded as
capricious and whimsical. Thus, he did not commit grave abuse of discretion amounting to lack
or excess of jurisdiction.
However, while we recognize that Judge Untalan did not commit grave abuse of discretion, we
take note of his apparent loss of steam when he issued the Order dated 29 July 2009 granting
respondents motion for reconsideration of his earlier ruling denying the Urgent Motion to
Dismiss. The good judge yielded, even though he was well aware that the CA Decision had not
yet attained finality pending review by this Court.
We now rule on the issue of probable cause.
Probable cause, for purposes of filing a criminal information, is described as "such facts as are
sufficient to engender a well-founded belief that a crime has been committed and the
respondent is probably guilty thereof, and should be held for trial."66rll
Thus, the determination of the existence of probable cause necessitates the prior
determination of whether a crime or an offense was committed in the first place. Here, we find
56
that there was no probable cause to indict respondents, because the crime of unfair
competition was not committed.

In positing that respondents were guilty of unfair competition, petitioner makes a lot of the
fact that they used the vendor code of RGP in marketing the "Naturals" products. She argues
that they passed off the "Naturals" products, which they marketed under RGP, as those of SCC;
thus, they allegedly prejudiced the rights of SCC as owner of the trademark. She also claims
that she has the personality to prosecute respondents for unfair competition on behalf of SCC.

When Judge Untalan denied the Motion to Dismiss and/or Withdraw Information filed by the
prosecution and thereby sustained the position of petitioner, his error lay in the fact that his
focus on the crime of unfair competition was unwarranted. In this case, much more important
than the issue of protection of intellectual property is the change of ownership of SCC. The
arguments of petitioner have no basis, because respondents are the exclusive owners of SCC,
of which she is no longer a partner.

Based on the findings of fact of the CA and the DOJ, respondents have completed the
payments of the share of petitioner in the partnership affairs. Having bought her out of SCC,
respondents were already its exclusive owners who, as such, had the right to use the
"Naturals" brand.

The use of the vendor code of RGP was resorted to only for the practical purpose of ensuring
that SMs payments for the "Naturals" products would go to respondents, who were the actual
suppliers.

Furthermore, even if we were to assume that the issue of protection of intellectual property is
paramount in this case, the criminal complaint for unfair competition against respondents
cannot prosper, for the elements of the crime were not present. We have enunciated in CCBPI
v. Gomez67rllthat the key elements of unfair competition are "deception, passing off and
fraud upon the public."68rllNo deception can be imagined to have been foisted on the
public through different vendor codes, which are used by SM only for the identification of
suppliers products.blrlllbrr

WHEREFORE, the Decisions dated 11 March 2009 in CA-G.R. SP No. 103846 and 29 September
2011 in CA-G.R. SP No. 111903, finding lack of probable cause for respondents alleged violation
of Section 168 in relation to Section 170 of Republic Act No. 8293 (unfair competition), are
AFFIRMED. The Information against respondents for unfair competition is

DISMISSED.rllbrr

SO ORDERED.

57
G.R. No. 194307 November 20, 2013
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG (formerly BIRKENSTOCK ORTHOPAEDIE
GMBH),Petitioner,
vs.
PHILIPPINE SHOE EXPO MARKETING CORPORATION, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this Petition for Review on Certiorari1 are the Court of Appeals (CA) Decision2 dated
June 25, 2010 and Resolution3 dated October 27, 2010 in CA-G.R. SP No. 112278 which
reversed and set aside the Intellectual Property Office (IPO) Director Generals Decision 4 dated
December 22, 2009 that allowed the registration of various trademarks in favor of petitioner
Birkenstock Orthopaedie GmbH & Co. KG.
The Facts
Petitioner, a corporation duly organized and existing under the laws of Germany, applied for
various trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark
Application Serial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the
International Classification of Goods and Services (Nice Classification) with filing date of March
11, 1994; (b) "BIRKENSTOCK BAD HONNEF -RHEIN & DEVICE COMPRISING OF ROUND
COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEA M" under TASN
4-1994-091509 for goods falling under Class 25 of the Nice Classification with filing date of
March 11, 1994; and (c) "BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF
ROUND COMPANY SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under
TASN 4-1994-095043 for goods falling under Class 10 of the Nice Classification with filing date
of September 5, 1994 (subject applications).5
However, registration proceedings of the subject applications were suspended in view of an
existing registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334
dated October 21, 1993 (Registration No. 56334) in the name of Shoe Town International and
Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo
Marketing Corporation.6 In this regard, on May 27, 1997 petitioner filed a petition for
cancellation of Registration No. 56334 on the ground that it is the lawful and rightful owner of
the Birkenstock marks (Cancellation Case).7 During its pendency, however, respondent and/or
its predecessor-in-interest failed to file the required 10th Year Declaration of Actual Use (10th
Year DAU) for Registration No. 56334 on or before October 21, 2004,8 thereby resulting in the
cancellation of such mark.9 Accordingly, the cancellation case was dismissed for being moot
and academic.10
The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the
subject applications in the IPO e-Gazette on February 2, 2007.11 In response, respondent filed
three (3) separate verified notices of oppositions to the subject applications docketed as Inter
Partes Case Nos. 14-2007-00108, 14-2007-00115, and 14-2007-00116,12 claiming, inter alia,
that: (a) it, together with its predecessor-in-interest, has been using Birkenstock marks in the
Philippines for more than 16 years through the mark "BIRKENSTOCK AND DEVICE"; (b) the
marks covered by the subject applications are identical to the one covered by Registration No.
56334 and thus, petitioner has no right to the registration of such marks; (c) on November 15,
1991, respondents predecessor-in-interest likewise obtained a Certificate of Copyright
Registration No. 0-11193 for the word "BIRKENSTOCK" ; (d) while respondent and its
predecessor-in-interest failed to file the 10th Yea r DAU, it continued the use of "BIRKENSTOCK
AND DEVICE" in lawful commerce; and (e) to record its continued ownership and exclusive
right to use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a " re-application "
of its old registration, Registration No. 56334.13 On November 13, 2007, the Bureau of Legal
Affairs (BLA) of the IPO issued Order No. 2007-2051 consolidating the aforesaid inter partes
cases (Consolidated Opposition Cases).14
The Ruling of the BLA
In its Decision15 dated May 28, 2008, the BLA of the IPO sustained respondents opposition,
thus, ordering the rejection of the subject applications. It ruled that the competing marks of
the parties are confusingly similar since they contained the word "BIRKENSTOCK" and are used
on the same and related goods. It found respondent and its predecessor-in-interest as the
prior user and adopter of "BIRKENSTOCK" in the Philippines, while on the other hand,
petitioner failed to present evidence of actual use in the trade and business in this country. It
opined that while Registration No. 56334 was cancelled, it does not follow that prior right over
the mark was lost, as proof of continuous and uninterrupted use in trade and business in the
Philippines was presented. The BLA likewise opined that petitioners marks are not well -known
in the Philippines and internationally and that the various certificates of registration submitted
by petitioners were all photocopies and, therefore, not admissible as evidence.16
Aggrieved, petitioner appealed to the IPO Director General.
The Ruling of the IPO Director General
In his Decision17 dated December 22, 2009, the IPO Director General reversed and set aside the
ruling of the BLA, thus allowing the registration of the subject applications. He held that with
the cancellation of Registration No. 56334 for respondents failure to file the 10th Year DAU,
there is no more reason to reject the subject applications on the ground of prior registration by
another proprietor.18 More importantly, he found that the evidence presented proved that
petitioner is the true and lawful owner and prior user of "BIRKENSTOCK" marks and thus,
entitled to the registration of the marks covered by the subject applications. 19 The IPO Director
General further held that respondents copyright for the word "BIRKENSTOCK" is of no
58
moment since copyright and trademark are different forms of intellectual property that cannot
be interchanged.20
Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a petition
for review with the CA.
Ruling of the CA
In its Decision21 dated June 25, 2010, the CA reversed and set aside the ruling of the IPO
Director General and reinstated that of the BLA. It disallowed the registration of the subject
applications on the ground that the marks covered by such applications "are confusingly similar,
if not outright identical" with respondents mark.22 It equally held that respondents failure to
file the 10th Year DAU for Registration No. 56334 "did not deprive petitioner of its ownership
of the BIRKENSTOCK mark since it has submitted substantial evidence showing its continued
use, promotion and advertisement thereof up to the present."23 It opined that when
respondents predecessor-in-interest adopted and started its actual use of "BIRKENSTOCK,"
there is neither an existing registration nor a pending application for the same and thus, it
cannot be said that it acted in bad faith in adopting and starting the use of such mark. 24 Finally,
the CA agreed with respondent that petitioners documentary evidence, being mere
photocopies, were submitted in violation of Section 8.1 of Office Order No. 79, Series of 2005
(Rules on Inter Partes Proceedings).
Dissatisfied, petitioner filed a Motion for Reconsideration 25 dated July 20, 2010, which was,
however, denied in a Resolution26 dated October 27, 2010. Hence, this petition.27
Issues Before the Court
The primordial issue raised for the Courts resolution is whether or not the subject marks
should be allowed registration in the name of petitioner.
The Courts Ruling
The petition is meritorious.
A. Admissibility of Petitioners Documentary Evidence.
In itsComment28 dated April 29, 2011, respondent asserts that the documentary evidence
submitted by petitioner in the Consolidated Opposition Cases, which are mere photocopies,
are violative of Section 8.1 of the Rules on Inter Partes Proceedings, which requires certified
true copies of documents and evidence presented by parties in lieu of originals. 29 As such, they
should be deemed inadmissible.
The Court is not convinced.
It is well-settled that "the rules of procedure are mere tools aimed at facilitating the
attainment of justice, rather than its frustration. A strict and rigid application of the rules must
always be eschewed when it would subvert the primary objective of the rules, that is, to
enhance fair trials and expedite justice. Technicalities should never be used to defeat the
substantive rights of the other party. Every party-litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free from the constraints of
technicalities."30"Indeed, the primordial policy is a faithful observance of [procedural rules],
and their relaxation or suspension should only be for persuasive reasons and only in
meritorious cases, to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed."31 This is especially true with
quasi-judicial and administrative bodies, such as the IPO, which are not bound by technical
rules of procedure.32 On this score, Section 5 of the Rules on Inter Partes Proceedings provides:
Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases. The
rules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes
cases. The Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict
technical rules of procedure and evidence but may adopt, in the absence of any applicable rule
herein, such mode of proceedings which is consistent with the requirements of fair play and
conducive to the just, speedy and inexpensive disposition of cases, and which will give the
Bureau the greatest possibility to focus on the contentious issues before it. (Emphasis and
underscoring supplied)
In the case at bar, while petitioner submitted mere photocopies as documentary evidence in
the Consolidated Opposition Cases, it should be noted that the IPO had already obtained the
originals of such documentary evidence in the related Cancellation Case earlier filed before it.
Under this circumstance and the merits of the instant case as will be subsequently discussed,
the Court holds that the IPO Director Generals relaxation of procedure was a valid exercise of
his discretion in the interest of substantial justice.33
Having settled the foregoing procedural matter, the Court now proceeds to resolve the
substantive issues.
B. Registration and ownership of "BIRKENSTOCK."
Republic Act No. (RA) 166,34 the governing law for Registration No. 56334, requires the filing of
a DAU on specified periods,35 to wit:
Section 12. Duration. Each certificate of registration shall remain in force for twenty years:
Provided, That registrations under the provisions of this Act shall be cancelled by the Director,
unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue
of the certificate of registration, the registrant shall file in the Patent Office an affidavit
59
showing that the mark or trade-name is still in use or showing that its non-use is due to special
circumstance which excuse such non-use and is not due to any intention to abandon the same,
and pay the required fee.
The Director shall notify the registrant who files the above- prescribed affidavits of his
acceptance or refusal thereof and, if a refusal, the reasons therefor. (Emphasis and
underscoring supplied)
The aforementioned provision clearly reveals that failure to file the DAU within the requisite
period results in the automatic cancellation of registration of a trademark. In turn, such failure
is tantamount to the abandonment or withdrawal of any right or interest the registrant has
over his trademark.36
In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No.
56334 within the requisite period, or on or before October 21, 2004. As a consequence, it was
deemed to have abandoned or withdrawn any right or interest over the mark "BIRKENSTOCK."
Neither can it invoke Section 23637 of the IP Code which pertains to intellectual property rights
obtained under previous intellectual property laws, e.g., RA 166, precisely because it already
lost any right or interest over the said mark.
Besides, petitioner has duly established its true and lawful ownership of the mark
"BIRKENSTOCK."
Under Section 238 of RA 166, which is also the law governing the subject applications, in order
to register a trademark, one must be the owner thereof and must have actually used the mark
in commerce in the Philippines for two (2) months prior to the application for registration.
Section 2-A39 of the same law sets out to define how one goes about acquiring ownership
thereof. Under the same section, it is clear that actual use in commerce is also the test of
ownership but the provision went further by saying that the mark must not have been so
appropriated by another. Significantly, to be an owner, Section 2-A does not require that the
actual use of a trademark must be within the Philippines. Thus, under RA 166, one may be an
owner of a mark due to its actual use but may not yet have the right to register such ownership
here due to the owners failure to use the same in the Philippines for two (2) months prior to
registration.40
It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring
ownership.1wphi1 If the applicant is not the owner of the trademark, he has no right to apply
for its registration. Registration merely creates a prima facie presumption of the validity of the
registration, of the registrants ownership of the trademark, and of the exclusive right to the
use thereof. Such presumption, just like the presumptive regularity in the performance of
official functions, is rebuttable and must give way to evidence to the contrary.41
Clearly, it is not the application or registration of a trademark that vests ownership thereof, but
it is the ownership of a trademark that confers the right to register the same. A trademark is an
industrial property over which its owner is entitled to property rights which cannot be
appropriated by unscrupulous entities that, in one way or another, happen to register such
trademark ahead of its true and lawful owner. The presumption of ownership accorded to a
registrant must then necessarily yield to superior evidence of actual and real ownership of a
trademark.
The Courts pronouncement in Berris Agricultural Co., Inc. v. Abyadang42 is instructive on this
point:
The ownership of a trademark is acquired by its registration and its actual use by the
manufacturer or distributor of the goods made available to the purchasing public. x x x A
certificate of registration of a mark, once issued, constitutes prima facie evidence of the
validity of the registration, of the registrants ownership of the mark, and of the registrants
exclusive right to use the same in connection with the goods or services and those that are
related thereto specified in the certificate. x x x In other words, the prima facie presumption
brought about by the registration of a mark may be challenged and overcome in an
appropriate action, x x x by evidence of prior use by another person, i.e. , it will controvert a
claim of legal appropriation or of ownership based on registration by a subsequent user. This is
because a trademark is a creation of use and belongs to one who first used it in trade or
commerce.43 (Emphasis and underscoring supplied)
In the instant case, petitioner was able to establish that it is the owner of the mark
"BIRKENSTOCK." It submitted evidence relating to the origin and history of "BIRKENSTOCK" and
its use in commerce long before respondent was able to register the same here in the
Philippines. It has sufficiently proven that "BIRKENSTOCK" was first adopted in Europe in 1774
by its inventor, Johann Birkenstock, a shoemaker, on his line of quality footwear and thereafter,
numerous generations of his kin continuously engaged in the manufacture and sale of shoes
and sandals bearing the mark "BIRKENSTOCK" until it became the entity now known as the
petitioner. Petitioner also submitted various certificates of registration of the mark
"BIRKENSTOCK" in various countries and that it has used such mark in different countries
worldwide, including the Philippines.44
On the other hand, aside from Registration No. 56334 which had been cancelled, respondent
only presented copies of sales invoices and advertisements, which are not conclusive evidence
of its claim of ownership of the mark "BIRKENSTOCK" as these merely show the transactions
made by respondent involving the same.45
In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful
owner of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in
bad faith in having it registered in its name. In this regard, the Court quotes with approval the
words of the IPO Director General, viz.:
60
The facts and evidence fail to show that [respondent] was in good faith in using and in
registering the mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly
distinct and arbitrary mark. It is very remote that two persons did coin the same or identical
marks. To come up with a highly distinct and uncommon mark previously appropriated by
another, for use in the same line of business, and without any plausible explanation, is
incredible. The field from which a person may select a trademark is practically unlimited. As in
all other cases of colorable imitations, the unanswered riddle is why, of the millions of terms
and combinations of letters and designs available, [respondent] had to come up with a mark
identical or so closely similar to the [petitioners] if there was no intent to take advantage of
the goodwill generated by the [petitioners] mark. Being on the same line of business, it is
highly probable that the [respondent] knew of the existence of BIRKENSTOCK and its use by the
[petitioner], before [respondent] appropriated the same mark and had it registered in its
name.46
WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and Resolution dated
October 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are REVERSED and SET
ASIDE. Accordingly, the Decision dated December 22, 2009 of the IPO Director General is
hereby REINSTATED.
SO ORDERED.
FACTS: Petitioner, a corporation duly organized and existing under the laws of Germany
applied for various trademark registrations before the Intellectual Property Office (IPO).
However, the applications were suspended in view of the existing registration of the mark
BIRKENSTOCK AND DEVICE under Registration No. 56334 dated October 21, 1993 in the
name of Shoe Town International and Industrial Corporation, the predecessor-in-interest of
respondent Philippine Shoe Expo Marketing Corporation.
On May 27, 1997, petitioner filed a petition (Cancellation Case) for cancellation of
Registration No. 564334 on the ground that it is the lawful and rightful owner of the
Birkenstock marks. During its pendency, however, respondent and/or it predecessor-in-interest
failed to file the required 10th Year Declaration of Actual Use (10th Year DAU) for Registration
No. 56334 on or before October 21, 2004, thereby resulting the cancellation of such mark.
Accordingly, the cancellation case was dismissed for being moot and academic thereby paving
the way for the publication of the subject applications.
In response, respondent filed with the Bureau of Legal Affairs (BLA) of the IPO three
separate verified notices of opposition to the subject applications docketed as Inter Partes
Cases claiming, among others, it, together with its predecessor-in-interest, has been using the
Birkenstock marks in the Philippines for more than 16 years through the mark BIRKENSTOCK
AND DEVICE. In its Decision, the BLA of the IPO sustained respondents opposition, thus
ordering the rejection of the subject applications. Aggrieved, petitioner appealed to the IPO
Director General whereby in its decision, the latter reversed and set aside the ruling of the BLA
thus allowing the registration of the subject applications.
Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a
petition for review with the Court of Appeals. In its decision dated June 25, 2010, the CA
reversed and set aside the ruling of the IPO Director General and reinstated that of the BLA.
The petitioner filed a Motion for Reconsideration but was denied by the CA. Hence , this
petition to the Supreme Court.
ISSUE: 1.Whether or not the petitioners documentary evidence, although photocopies, are
admissible in court?
2.Whether or not the subject marks should be allowed registration in the name of the
petitioner?
HELD:
1.The court ruled yes. It is a well-settled principle that the rules of procedure are mere tools
aimed at facilitating the attainment of justice, rather than its frustration. A strict and rigid
application of the rules must always be eschewed when it would subvert the primary objective
of the rules, that is, to enhance fair trials and expedite justice. In the light of this, Section 5 of
the Rules on Inter Partes Proceedings provides that, The Bureau shall not be bound by strict
technical rules of procedure and evidence but may adopt, in the absence of any applicable rule
herein, such mode of proceedings which is consistent with the requirements of fair play and
conducive to the just, speedy and inexpensive disposition of cases, and which will the Bureau
the greatest possibility to focus on the contentious issues before it.
In the case at bar, it should be noted that the IPO had already obtained the originals of such
documentary evidence in the related Cancellation Case earlier before it. Under the
circumstance and the merits of the instant case as will be subsequently discussed, the Court
holds that the IPO Director Generals relaxation of procedure was a valid exercise of his
discretion in the interest of substantial justice.
2.The court ruled in favour of the petitioner. Under Section 12 of Republic Act 166, it provides
that, Each certificate of registration shall remain in force for twenty years: Provided, that the
registration under the provisions of this Act shall be cancelled by the Director, unless within
one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the
certificate of registration, the registrant shall file in the Patent Office an affidavit showing that
the mark or trade-name is still in use or showing that its non-use is due to special circumstance
which excuse such non-use and is not due to any intention to abandon the same, and pay the
required fee.
61
In the case at bar, respondent admitted that it failed to file the 10th Year DAU for Registration
No. 56334 within the requisite period, or on or before October 21, 2004. As a consequence, it
was deemed to have abandoned or withdrawn any right or interest over the mark
BIRKENSTOCK. It must be emphasized that registration of a trademark, by itself, is not a
mode of acquiring ownership. If the applicant is not the owner of the trademark, he has no
right to apply for its registration. Registration merely creates a prima facie presumption of the
validity of the registration. Such presumption, just like the presumptive regularity in the
performance of official functions, is rebuttable and must give way to evidence to the contrary.
Besides, petitioner has duly established its true and lawful ownership of the mark
BIRKENSTOCK. It submitted evidence relating to the origin and history of BIRKENSTOCK and
it use in commerce long before respondent was able to register the same here in the
Philippines. Petitioner also submitted various certificates of registration of the mark
BIRKENSTOCK in various countries and that it has used such mark in different countries
worldwide, including the Philippines.

62
G.R. No. 194872 June 9, 2014
SAHAR INTERNATIONAL TRADING, INC., Petitioner,
vs.
WARNER LAMBERT LLC and PFIZER, (Philippines), CO., INC. Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated April 22, 2010 and the
Resolution3 dated December 21, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 106455
which annulled and set aside the Orders4 dated August 5, 2008 and September 25, 2008 of the
Regional Trial Court of Makati City, Branch 149 (RTC), thereby directing the said court to issue a
writ of preliminary injunction enjoining petitioner Sahar International Trading, Inc. (Sahar), its
agents, representatives, and assigns, during the pendency of Civil Case No. 08-424, from
making, using or offering for sale, or distributing Atorvastatin or Atorvastatin Calcium products
to various hospitals, drugstores, or to any other individual or entity in the Philippines, or from
otherwise infringing the patents of respondent Warner Lambert Co., LLC (Warner Lambert)'
over the foregoing drugs.
The Facts
Warner Lambert, a foreign corporation, is the registered owner of three (3) Philippine patents,
namely: (a) Letters Patent (LP) No. 26330 for the pharmaceutical substance Atorvastatin valid
until April 29, 2009; (b) LP No. 29149 for the pharmaceutical substance Atorvastatin Calcium
valid until September 26, 2012;5 and (c) LP No. 1-1996-53719 for the pharmaceutical substance
Atorvastatin Calcium in crystalline form valid until October 23, 2019 (subject patents).6 In
general, Atorvastatin blocks the production of cholesterol in the body and is used to reduce the
amounts of LDL (bad cholesterol), total cholesterol, triglycerides (another type of fat), and
apolipoprotein B (a protein needed to make cholesterol) in a persons blood. 7 Atorvastatin is
also used to increase the level of HDL (good cholesterol) in ones blood. These actions are
important in reducing the risk of hardening of the arteries, which can lead to heart attacks,
strokes, and peripheral vascular diseases. 8 Warner Lambert and its worldwide affiliates sell
products covered by the subject patents under the brand name Lipitor.9
On the other hand, respondent Pfizer, Inc. (Pfizer) is the exclusive licensee of Warner Lambert
to import, market, distribute, and sell products covered by the subject patents in the
Philippines. To this end, Pfizer applied for and was issued various Certificates of Product
Registration (CPR) from the Bureau of Food and Drugs (now, Food and Drug Administration
[FDA]) in order to validly sell and promote such products in the Philippine market.10
Sometime in 2005, Pfizer discovered that Sahar also applied for and was issued a CPR by the
FDA for Atorvastatin Calcium under the brand name Atopitar. 11 It also found out that Sahar has
been selling and distributing Atopitar in the provinces of Bicol, Zamboanga, Cebu, Ilocos Norte,
as well as in Tarlac; and thatSahars marketing ads showed that Atopitar is neither
manufactured by Warner Lambert nor any Pfizer company, but by Geofman12 Pharmaceuticals
of Pakistan. Upon further investigation and laboratory testing, Pfizer learned that the
Atorvastatin Calcium that is used in Atopitar is also in its crystalline form.13
Pfizer immediately sent numerous letters to Sahar informing the latter of Warner Lamberts
patents over Atorvastatin Calcium and demanding it to cease and desist from selling and
distributing said pharmaceutical substance under the brand name Atopitar. However, Sahar did
not heed such demands and replied that the patent over Atorvastatin Calcium had already
expired in Pakistan and, therefore, it believed the same can already be freely distributed and
marketed in the Philippines by any entity.14 Thus, Warner Lambert and Pfizer (respondents)
filed a Complaint15 for Patent Infringement, Damages, and Injunction, with applications for the
issuance of Temporary Restraining Orders and/or Writs of Preliminary Injunction against Sahar
before the RTC, docketed as Civil Case No. 08-424.16 In support of its prayer for injunctive relief,
respondents alleged that Sahars acts of importing, selling, and offering for sale Atorvastatin
and Atorvastatin Calcium products under the brand name Atopitar constitute acts of patent
infringement as defined in Section 7617 of Republic Act No. (RA) 8293,18otherwise known as the
"Intellectual Property Code of the Philippines,"19 and that unless Sahar is enjoined from doing
said acts, they will suffer irreparable damage and render any judgment ineffectual.20
In opposition to the prayer for injunctive relief, Sahar assailed the validity of Warner Lamberts
patents, maintaining that: (a) the ingredients and the process in the making of the Atorvastatin
Calcium found in Atopitar is substantially different from that found in Lipitor; (b) the FDAs
issuance of a CPR in its favor should be deemed prima facie evidence that it is authorized to
sell and distribute Atopitar in the Philippines; and (c) there is no urgent need to enjoin the sale
and distribution of Atopitar in the Philippine market, considering that Warner and Pfizer
themselves took more than two (2) years to file their complaint. 21
The RTC Ruling
In an Order22 dated August 5, 2008, the RTC denied respondents application for the issuance
of a writ of preliminary injunction against the alleged patent infringement of Sahar. The RTC
deemed it proper not to grant such prayer, considering that the instant case is principally for
injunction and damages, and, as such, the issuance of an injunctive writ "would in effect result
in [the] premature disposition of the main case and would defeat the purpose of preliminary
injunctive relief."23
Respondents filed a Motion for Reconsideration24 dated August 20, 2008, which was, however,
denied by the RTC in an Order25 dated September 25, 2008. Aggrieved, respondents filed a
petition for certiorari26 before the CA.
63
The CA Ruling The Court's Ruling

In a Decision27 dated April 22, 2010, the CA annulled and set aside the assailed orders of the
RTC and issued a writ of preliminary injunction enjoining Sahar, its agents, representatives, and
assigns, during the pendency of Civil Case No. 08-424, from making, using or offering for sale,
or distributing Atopitar in the Philippine market.28
The CA held that from the evidence presented, respondents have established their right to
preliminary injunctive relief against Sahars acts of selling and distributing Atorvastatin Calcium
under the brand name Atopitar, considering that: (a) Warner Lambert is the registered owner
of the subject patents which are still existing and effective; (b) Sahar does not deny that it has
been selling and distributing products using Atorvastatin and Atorvastatin Calcium in crystalline
form; and (c) respondents witnesses testified that the presence of Atopitaris causing confusion
among medical practitioners as to the availability of Lipitor and validity of the subject patents
registered under the name of Warner Lambert.29
Further, contrary to the RTCs findings, the CA held that the issuance of a writ of preliminary
injunction in respondents favor would not result in the prejudgment of the instant case
because other issues, such as whether or not Sahar is indeed guilty of patent infringement and
thus, liable for damages, still need to be resolved through full-blown trial.30
Dissatisfied, Sahar moved for reconsideration,31 which was, however, denied by the CA in a
Resolution32 dated December 21, 2010.1wphi1 Hence, this petition.
The Issue Before the Court
The sole issue for the Courts resolution is whether or not the CA was correct in issuing a writ
of preliminary injunction enjoining Sahar, its agents, representatives, and assigns, during the
pendency of Civil Case No. 08-424 from making, using or offering for sale, or distributing
Atopitar in the Philippine market.
The petition is dismissed on the ground of mootness.
A case or issue is considered moot and academic when it ceases to present a justiciable
controversy by virtue of supervening events, so that an adjudication of the case or a
declaration on the issue would be of no practical value or use. In such instance, there is no
actual substantial relief which a petitioner would be entitled to, and which would be negated
by the dismissal of the petition. Courts generally decline jurisdiction over such case or dismiss
it on the ground of mootness. This is because the judgment will not serve any useful purpose
or have any practical legal effect because, in the nature of things, it cannot be enforced.37
Applying the foregoing, the Court finds that the CA's supervening promulgation of its Decision
dated November 5, 2013 in CA-G.R. CV No. 97495 - which reversed the RTC's Judgment dated
March 11, 2011 in Civil Case No. 08-424 and thereby made the writ of preliminary injunction
permanent - rendered the present case moot and academic. This is because the primordial
issue raised in the instant petition is precisely the propriety of the aforesaid issuance. Since the
writ of preliminary injunction is but an incident of the patent infringement case which had
already been resolved by the CA, ruling on its propriety would be merely an academic exercise
carrying no practical effect. Accordingly, the Court is constrained to dismiss the instant petition.
In this relation, it is relevant to point out that it would be premature for the Court to tackle the
merits of the CA's recent decision for the reason that it is not the matter herein appealed.
WHEREFORE, the petition is DISMISSED for being moot and academic.
SO ORDERED.

At this point, it must be noted that on March 11, 2011 and during the pendency of the instant
petition, the RTC issued a Judgment33 dismissing Civil Case No. 08-424 on the ground of lack of
cause of action. Thereafter, respondents filed an appeal before the CA, docketed as CA-G.R. CV
No. 97495.34 In a Decision35 dated November 5, 2013, the CA reversed and set aside the RTC
ruling and found Sahar liable for patent infringement, and thus, ordered that: (a) Sahar pay
respondents P300,000.00 as temperate or moderate damages, P50,000.00 as exemplary
damages, and P50,000.00 as attorneys fees and litigation expenses; (b) the writ of preliminary
injunction that it issued in its April 22, 2010 Decision in CA-G.R. SP No. 106455 be made
permanent; and (c) Sahars Atopitar, wherever they may be found in the Philippines, including
materials and implements used in the commission of patent infringement, be condemned,
seized, and forfeited.36

64
G.R. No. 195549 September 3, 2014
WILLAWARE PRODUCTS CORPORATION, Petitioner,
vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.
DECISION
PERALTA, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeking to set aside the Decision1 dated November 24, 2010 and Resolution2 dated February 10,
2011 of the Court of Appeals (CA) in CA-G.R. CV No. 86744.
The facts, as found by the Regional Trial Court (RTC), are as follows:
[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed this present
complaint for damages for unfair competition with prayer for permanent injunction to enjoin
[petitioner] Willaware Products Corporation ([petitioner] for short) from manufacturing and
distributing plastic-made automotive parts similar to those of [respondent].
[Respondent] alleged that it is a duly registeredpartnership engaged in the manufacture and
distribution of plastic and metal products, with principal office at No. 100 Mithi Street,
Sampalukan, Caloocan City. Since its registration in 1992, [respondent] has been
manufacturing in its Caloocan plant and distributing throughout the Philippines plastic-made
automotive parts. [Petitioner], on the other hand, which is engaged in the manufacture and
distribution of kitchenware items made of plastic and metal has its office near that of
[respondent]. [Respondent] further alleged that in view of the physical proximity of
[petitioners] office to [respondents] office, and in view of the fact that some of the
[respondents] employeeshad transferred to [petitioner], [petitioner] had developed familiarity
with [respondents] products, especially its plastic-made automotive parts.
That sometime in November 2000, [respondent] discovered that [petitioner] had been
manufacturing and distributing the same automotive parts with exactly similar design, same
material and colors but was selling these products at a lower price as [respondents]
plastic-made automotive parts and to the same customers.
[Respondent] alleged that it had originated the use of plastic in place of rubber in the
manufacture ofautomotive underchassis parts such as spring eye bushing, stabilizer bushing,
shock absorberbushing, center bearing cushions, among others. [Petitioners] manufacture of
the same automotive parts with plastic materialwas taken from [respondents] idea of using
plastic for automotive parts. Also, [petitioner] deliberately copied [respondents] products all
of which acts constitute unfair competition, is and are contrary to law, morals, good customs
and public policy and have caused [respondent] damages in terms oflost and unrealizedprofits
in the amount of TWO MILLION PESOS as of the date of [respondents] complaint.
Furthermore, [petitioners] tortuous conduct compelled [respondent] to institute this action
and thereby to incur expenses in the way of attorneys fees and other litigation expenses in the
amount of FIVE HUNDRED THOUSAND PESOS (P500,000.00).
In its Answer, [petitioner] denies all the allegations of the [respondent] except for the following
facts: that it is engaged in the manufacture and distribution of kitchenware items made of
plastic and metal and that theres physical proximity of [petitioners] office to [respondent]s
office, and that someof [respondents] employees had transferred to [petitioner] and that over
the years [petitioner] had developed familiarity with [respondents] products, especially its
plastic made automotive parts.
As its Affirmative Defenses, [petitioner] claims that there can be no unfair competition as the
plastic-made automotive parts are mere reproductions of original parts and their construction
and composition merely conforms to the specificationsof the original parts of motor vehicles
they intend to replace. Thus, [respondent] cannot claim that it "originated" the use of plastic
for these automotive parts. Even assuming for the sake of argument that [respondent] indeed
originated the use of these plastic automotive parts, it still has no exclusive right to use,
manufacture and sell these as it has no patent over these products. Furthermore, [respondent]
is not the only exclusive manufacturer of these plastic-made automotive parts as there are
other establishments which were already openly selling them to the public.3
After trial on the merits, the RTC ruled in favor of respondent. It ruled that petitioner clearly
invaded the rights or interest of respondent by deliberately copying and performing acts
amounting to unfair competition. The RTC further opined that under the circumstances, in
order for respondents property rights to be preserved, petitioners acts of manufacturing
similar plastic-made automotive parts such as those of respondents and the selling of the
sameproducts to respondents customers, which it cultivated over the years, will have to be
enjoined. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the court finds the defendant liable to plaintiff Two Million
(P2,000,000.00) Pesos, as actual damages, One Hundred Thousand (P100,000.00) Pesos as
attorneys fees and One Hundred Thousand (P100,000.00) Pesos for exemplary damages. The
court hereby permanently [enjoins] defendant from manufacturing the plastic-made
automotive parts as those manufactured by plaintiffs.
SO ORDERED.4
Thus, petitioner appealed to the CA.
65
On appeal, petitioner asserts that ifthere is no intellectual property protecting a good
belonging to another,the copying thereof for production and selling does not add up to unfair
competition as competition is promoted by law to benefit consumers. Petitioner further
contends that it did not lure away respondents employees to get trade secrets. It points out
that the plastic spare parts sold by respondent are traded in the market and the copying of
these can be done by simplybuying a sample for a mold to be made.
Conversely, respondent averred that copyright and patent registrations are immaterial for an
unfair competition case to prosper under Article 28 of the Civil Code. It stresses that the
characteristics of unfair competition are present in the instant case as the parties are trade
rivals and petitioners acts are contrary to good conscience for deliberately copying its
products and employing its former employees.
In a Decision dated November 24,2010, the CA affirmed with modification the ruling of the RTC.
Relevant portions of said decision read:
Despite the evidence showing thatWillaware took dishonest steps in advancing its business
interest against Jesichris, however, the Court finds no basis for the award by the RTC of actual
damages. One is entitled to actual damages as one has duly proven. The testimony of Quejada,
who was engaged by Jesichris in 2001 to audit its business, only revealed that there was a
discrepancy between the sales of Jesichris from 2001 to 2002. No amount was mentioned. As
for Exhibit "Q," which is a copy of the comparative income statement of Jesichris for 1999-2002,
it shows the decline of the sales in 2002 in comparison with those made in 2001 but it does not
disclose if this pertains to the subject automotive parts or to the other products of Jesichris like
plates.
In any event, it was clearly shown that there was unfair competition on the part of Willaware
that prejudiced Jesichris. It is only proper that nominal damages be awarded in the amount of
Two Hundred Thousand Pesos (P200,000.00) in order to recognize and vindicate Jesichris
rights. The RTCs award of attorneys fees and exemplary damages is also maintained.
xxxx
WHEREFORE, premises considered, the Decision dated April 15, 2003 of the Regional Trial
Court of Caloocan City, Branch 131, in Civil Case No. C-19771 is hereby MODIFIED. The award
of Two Million Pesos (P2,000,000.00) actual damages is deleted and in its place, Two Hundred
Thousand Pesos nominal damages is awarded.
SO ORDERED.5
Dissatisfied, petitioner moved for reconsideration. However, the same was denied for lack of
merit by the CA in a Resolution dated February 10, 2011.
Hence, the present Petition for Review wherein petitioner raises the following issues for our
resolution:
(1) Whether or not there is unfair competition under human relations when the parties are not
competitors and there is actually no damage on the part of Jesichris?
(2) Consequently, if there is no unfair competition, should there be moral damages and
attorneys fees?
(3) Whether or not the addition of nominal damages is proper although no rights have been
established?
(4) If ever the right of Jesichris refersto its copyright on automotive parts, should it be
considered in the light of the said copyrights were considered to be void by no less than this
Honorable Court in SC GR No. 161295?
(5) If the right involved is "goodwill" then the issue is: whether or not Jesichris has established
"goodwill?"6
In essence, the issue for our resolution is: whether or not petitioner committed acts amounting
to unfair competition under Article 28 of the Civil Code.
Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil Code
on humanrelations, and not unfair competition under Republic Act No. 8293, 7 as the present
suit is a damage suit and the products are not covered by patent registration. A fortiori, the
existence of patent registration is immaterial in the present case.
The concept of "unfair competition"under Article 28 is very much broader than that covered by
intellectual property laws. Under the present article, which follows the extended concept of
"unfair competition" in American jurisdictions, the term coverseven cases of discovery of trade
secrets of a competitor, bribery of his employees, misrepresentation of all kinds, interference
with the fulfillment of a competitors contracts, or any malicious interference with the latters
business.8
With that settled, we now come to the issue of whether or not petitioner committed acts
amounting tounfair competition under Article 28 of the Civil Code.
We find the petition bereft of merit.
Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or
66
any other unjust, oppressive or high-handed method shall give rise to a right of action by the
person who thereby suffers damage."
From the foregoing, it is clear thatwhat is being sought to be prevented is not competitionper
sebut the use of unjust, oppressive or high- handed methods which may deprive others of a
fair chance to engage in business or to earn a living. Plainly,what the law prohibits is unfair
competition and not competition where the means usedare fair and legitimate.
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must
involve an injury to a competitor or trade rival, and (2) it must involve acts which are
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or
otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or
interest is a minor factor; the essence of the matter appears to be a private wrong perpetrated
by unconscionable means.9
Here, both characteristics are present.
First, both parties are competitors or trade rivals, both being engaged in the manufacture of
plastic-made automotive parts. Second, the acts of the petitioner were clearly "contrary to
good conscience" as petitioner admitted having employed respondents formeremployees,
deliberately copied respondents products and even went to the extent of selling these
products to respondents customers.10
To bolster this point, the CA correctly pointed out that petitioners hiring of the former
employees of respondent and petitioners act of copying the subject plastic parts of
respondent were tantamount to unfair competition, viz.:
The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with
the business of [respondent].1wphi1 [Petitioners] acts can be characterized as executed with
mischievous subtle calculation. To illustrate, in addition to the findings of the RTC, the Court
observes that [petitioner] is engaged in the production of plastic kitchenware previous to its
manufacturing of plasticautomotive spare parts, it engaged the services of the then mold
setter and maintenance operator of [respondent], De Guzman, while he was employed by the
latter. De Guzman was hired by [petitioner] in order to adjust its machinery since quality plastic
automotive spare parts were not being made. It baffles the Court why [petitioner] cannot rely
onits own mold setter and maintenance operator to remedy its problem. [Petitioners]
engagement of De Guzman indicates that it is banking on his experience gained from working
for [respondent].
Another point we observe is that Yabut, who used to be a warehouse and delivery man of
[respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this
accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the
same position he occupied with [respondent]. These sequence of events relating to his
employment by [petitioner] is suspect too like the situation with De Guzman.11
Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of
suddenly shifting his business from manufacturing kitchenware to plastic-made automotive
parts; his luring the employees of the respondent to transfer to his employ and trying to
discover the trade secrets of the respondent.12
Moreover, when a person starts an opposing place of business, not for the sake of profit to
himself, but regardless of loss and for the sole purpose of driving his competitor out of
business so that later on he can take advantage of the effects of his malevolent purpose, he is
guilty of wanton wrong.13 As aptly observed by the courta quo, the testimony of petitioners
witnesses indicate that it acted in bad faith in competing with the business of respondent, to
wit: [Petitioner], thru its General Manager, William Salinas, Jr., admitted that it was never
engaged in the business of plastic-made automotive parts until recently, year 2000:
Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic)
not? Manufacturer of kitchenware and distributor ofkitchenware, is it not? Mr. Salinas: Yes, sir.
Atty. Bautista: And you said you have known the [respondent] Jesichris Manufacturing Co., you
have known it to be manufacturing plastic automotive products, is it not? Mr. Salinas: Yes, sir.
Atty. Bautista: In fact, you have been (sic) physically become familiar with these products,
plastic automotive products of Jesichris? Mr. Salinas: Yes, sir.
How [petitioner] was able to manufacture the same products, in terms of color, size, shape and
composition as those sold by Jesichris was due largely to the sudden transfer ofJesichris
employees to Willaware.
Atty. Bautista: Since when have you been familiar with Jesichris Manufacturing Company?
Mr. Salinas: Since they transferred there (sic) our place.
Atty. Bautista: And that was in what year? Mr. Salinas: Maybe four (4) years. I dont know the
exact date.
Atty. Bautista: And some of the employees of Jesichris Manufacturing Co. have transferred to
your company, is it not?
Mr. Salinas: Yes, sir.
Atty. Bautista: How many, more or less?
Mr. Salinas: More or less, three (3).
Atty. Bautista: And when, in what year or month did they transfer to you?
Mr. Salinas: First, November 1.
Atty. Bautista: Year 2000?
Mr. Salinas: Yes sir. And then the other maybe February, this year. And the other one, just one
month ago.
67
That [petitioner] was clearly outto take [respondent] out of business was buttressed by the
testimony of [petitioners] witness, Joel Torres:
Q: Are you familiar with the [petitioner], Willaware Product Corporation?
A: Yes, sir.
Q: Will you kindly inform this court where is the office of this Willaware Product Corporation
(sic)?
A: At Mithi Street, Caloocan City, sir.
Q: And Mr. Witness, sometime second Saturday of January 2001, will you kindly inform this
court what unusual even (sic) transpired between you and Mr. Salinas on said date?
A: There was, sir.
Q: What is that?
A: Sir, I was walking at that time together with my wife going to the market and then I passed
by the place where they were having a drinking spree, sir.
Q: You mentioned they, who were they who were drinking at that time?
A: I know one Jun Molina, sir.
Q: And who else was there?
A: William Salinas, sir.
Q: And will you kindly inform us what happened when you spotted upon them drinking?
A: Jun Molina called me, sir.
Q: And what happened after that?
A: At that time, he offered mea glass of wine and before I was able to drink the wine, Mr.
Salinas uttered something, sir.
Q: And what were those words uttered by Mr. Salinas to you?
A: "O, ano naapektuhan na kayo sa ginaya (sic) ko sa inyo?"
Q: And what did you do after that, after hearing those words?
A: And he added these words, sir. "sabihin mo sa amo mo, dalawang taon na lang
pababagsakin ko na siya."
Q: Alright, hearing those words, will you kindly tell this court whom did you gather to be
referred to as your "amo"?
A: Mr. Jessie Ching, sir.14
In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages is
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (P50,000.00).
WHEREFORE, the instant petition is DENIED. The Decision dated November 24, 2010 and
Resolution dated February 10, 2011 of the Court of Appeals in CA-G.R. CV No. 86744 are
hereby AFFIRMED with MODIFICATION that the award of attorney's fees be lowered to Fifty
Thousand Pesos (P50,000.00).
SO ORDERED.
Facts:
The respondent filed a complaint for damages for unfair competition to enjoin the
respondents from manufacturing from manufacturing and distributing plastic-made
automotive parts which are similar to that of the respondent. The petitioner is engaged in the
manufacture and distribution of kitchenware items while respondent is engaged in the
manufacture and distribution of plastic and metal products. In 2000, the respondent
discovered that the petitioner was manufacturing and distributing automotive parts with
exactly the same design, same material and colors as that of respondents but at a lower price.
The respondent also alleged that some of the respondents employees transferred to
petitioners business which thereby led to the familiarity of its products. The petitioners
countered that respondent had no exclusive right to use, manufacture and sell these products
as he has no patent over these. RTC ruled in favor of the respondent. CA affirmed RTCs
decision with modification on actual damages.
Issue: WoN petitioner committed acts amounting to unfair competition under Article 28 of the
Civil Code
Held: Yes. Article 28 of the Civil Code applies in the case and not RA 8293 because the product
is not patented. Article 28 seeks to prevent the use of unjust, oppressive or high-handed
methods which may deprive others of a fair chance to engage in business or to earn a living.
Two characteristics must be present in order to qualify for unfair competition. One is that it
must involve an injury to a competitor or trade rival and the other is that it must involve an act
which is characterized as contrary to good conscience or shocking to judicial sensibilities or
otherwise unlawful. Both of these are present in this case. Both parties are trade rivals
engaged in the sale of plastic-made automotive parts. The acts of petitioner of employing the
respondents for employees, deliberately copying respondents products and selling these
products are contrary to good conscience. It is evident that petitioner is engaged in unfair
competition when he suddenly shifter his business from manufacturing kitchenware to
68
plastic-made automotive parts, in enticing the employees of the respondent to transfer to his
business and trying to discover the trade secrets of the respondent.

69
G.R. No. 205800 September 10, 2014 On 17 March 2010, counsel for petitioners filed a letter-complaint with the Chief of the
Philippine National Police Criminal Investigation and Detection Group. The case was assigned
MICROSOFT CORPORATION and ADOBE SYSTEMS INCORPORATED, Petitioners, to Police Senior Inspector Ernesto V. Padilla (Padilla).6
vs.
SAMIR FARAJALLAH, VIRGILIO D.C. HERCE, RACHEL P. FOLLOSCO, JESUSITO G. MORALLOS, On 26 March 2010, Padilla, Serrano, and Moradoz went to the office of respondents. Using a
and MA. GERALDINE S. GARCIA (directors and officers of NEW FIELDS (ASIA PACIFIC), legitimate business pretext, they were able to use two computers owned by New Fields and
INC.), Respondents. obtained the following information regarding the installed Microsoft and Adobe software:

DECISION First computer

CARPIO, Acting C.J.: Installed Software Product I.D./Serial Number

The Case
Microsoft Windows XP Pro V2002 SP2 55274-640-1582543-23775

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court which
Microsoft Office Word 2007 Enterprise
seeks to reverse and set aside the Decision1 of the Court of Appeals (CA) dated 28 June 2012 in 89388-707-0358973-65509
CA-G.R. SP No. 116771 and the Resolution2 of the CA dated 30 January 2013. The Decision and
Resolution sustained the orders of the Regional Trial Court of Manila, Branch 21 (RTC) quashing Edition 2007
Search Warrant Nos. 10-15912 and 10-15913.
Adobe Acrobat 8 Pro (1) 1118-1061-0904-4874-2027

The Facts

Microsoft Corporation and Adobe Systems Incorporated (petitioners) are corporations Second computer
organized and existing under the laws of the United States. Microsoft Corporation is the owner
of all rights including copyright relating to all versions and editions of Microsoft software3 and
the corresponding users manuals, and the registeredowner of the "Microsoft" "MS DOS" Installed Software Product I.D./Serial Number
trademarks in the Philippines. Adobe Systems Incorporatedis the owner of all rights including
copyright relating to all versions and editions of Adobe Software.4 Microsoft Windows XP Pro V2002 SP2 55274-640-1582543-23442

Samir Farajallah, Virgilio D.C. Herce, Rachel P. Follosco, Jesusito G. Morallos and Ma. Geraldine Microsoft Office Word 2007 Enterprise
S. Garcia (respondents) are the directors and officers of New Fields (Asia Pacific), Inc., a 89388-707-0358973-65709
domestic corporation with principal office at Unit 1603, East Tower, PhilippineStock Exchange Edition 2007
Center, Exchange Road, Ortigas Center, Pasig City.
Adobe Acrobat 8 Pro (1) 1118-1061-0904-4874-2027
Petitioners claim that in September 2009, they were informed that New Fields was unlawfully
reproducing and using unlicensed versions of their software. Orion Support, Inc.(OSI) was
engaged by petitioners to assist in the verification of this information. Two OSI Market
Researchers, Norma L. Serrano (Serrano) and Michael A. Moradoz (Moradoz) were assigned to Padilla was trained to distinguish original from counterfeit software,7 and he saw the screens
confirm the informant's tip. Serrano and Moradoz were trained to detect unauthorized copies of the computers used by the OSI staff, including the product I.D. Nos. of the installed
of Adobe and Microsoft software.5 software.
70
In their Joint Affidavit, Serrano and Moradoz stated that:
There are at least two (2) computers using common product identification and/or serial
numbers of MICROSOFT and ADOBE software. This is one indication that the software being
used is unlicensed or was illegally reproduced or copied. Based on the training we attended, all
ADOBE and MICROSOFTsoftware should only be installed in one computer, unless they avail of
an Open Licese Agreement from the software developer, which is not the case in NEW FIELDS.
In this case, the first three sets of numbers of the Product I.D. Nos. of the MICROSOFT
Windows XP Pro operating System software program installed in the two (2) computerunits we
used, i.e., "55274-640-1582543-xxxxx", were the same. We also observed that the first three
sets of numbers of the Product I.D Nos. of the MICROSOFT Office 2007 (Word) software in the
two (2) computers we used, i.e., "89388-707-0358973-xxxxx", were also the same. Ostensibly,
this means that NEW FIELDS only used one (1) installer of the MICROSOFT Windows XP
operating system software and one (1) installer of the MICROSOFT Office software program on
two (2) computers. Based on our training, if the first three sets of numbers of the Product I.D.
Nos. of the MICROSOFT software installed are the same, it signifies that it came from one
installer. It does not matter [if] the last 5 digits of the Product I.D. Nos. are different because
this is computer-generated and therefore varies with every installation. Apart from the
MICROSOFT software, the serial numbers of the ADOBE software installed in the computer
units we used were also the same, signifying that NEW FIELDS only used one (1) installer of the
ADOBE software program on two (2) computers.8 (Emphasis supplied)
They also observed that New Fields had 90 computers in their office with Microsoft software,
none of which had the Certificate of Authenticity issued by Microsoft.
After being informed of the resultsof the investigation, petitioners then issued certifications
that they have not authorized New Fields to "copy, print, reproduce and/or publish
unauthorized copies of Microsoft and Adobe software products."9
An application for search warrants was filed by Padilla on 20 May 2010, before Judge Amor
Reyes in her capacity as Executive Judge of the RTC. Search Warrant Nos. 10-15912 and
10-15913 were issued on the same date.10
The warrants were served on respondents on 24 May 2010. New Fields employees witnessed
the search conducted by the authorities. Several items were seized, including 17 CD installers
and 83 computers containing unauthorized copies of Microsoft and/or Adobe software.
On 6 June 2010, New Fields filed a motion seeking to quash one of the two warrants served
(Search Warrant No. 10-15912).11 The motion was received by petitioners on 10 June 2010 and
was set for hearing on 11 June 2010. During the hearing on the motion, petitioners were
allowed by the RTC to file their Comment/Opposition on or before 21 June 2010.12
In their Comment/Opposition dated 21 June 2010,13 petitioners alleged that:
The Motion [to Quash] failed to comply with the mandatory 3-day notice rule under the Rules
of Court. Hence it is nothing but a worthless piece of paper.
xxxx
In this case, the Motion of Respondents was scheduled for hearing on 11 June 2010. However,
Respondents only furnished [petitioners] a copy of the Motion on 10 June 2010, or just1 day
before the scheduled hearing, which was in clear violation of the 3-day notice rule.14
On 29 June 2010, the RTC issued an Order quashing both warrants and directing that "allthe
items seized from the respondents be returned x x x."15 According to the RTC,
petitionersshould have identified which specific computer had the pirated software. 16 The RTC
added that no criminal charge has been filed yet, despite the fact that the seized items have
been in petitioners possession for several weeks since the warrants were issued. Lastly, the
RTC dismissed the petitioners contention that the threeday notice rule was not complied
withbecause petitioners were already notified of the motion personally.17
On 8 July 2010, petitioners receiveda copy of the Order, and Deputy Sheriff Edgardo Reyes of
the RTC alsoeffected the return of the seized items, in compliance with the RTCs
Order.18 Petitioners filed an Urgent Manifestation and Motion for the Issuance of a Status Quo
Order on 8 July 2010 wherein they alleged that: (1) they intend to file a Motion for
Reconsideration of the Order; and (2) the Order was not immediately executory. 19Respondents
received a copy of the motion the day it was filed.
On 9 July 2010, respondents moved to expunge petitioners motion for reconsideration, saying
that petitioners failed to comply with the threeday notice rule.20 The hearing on the motion
was set on 13 July 2010. A copy of the motion was received by petitioners on 20 July 2010.21
On 15 July 2010, petitioners filed a motion for reconsideration of the Order. 22 Respondents
filed their Comment/Opposition23 to the motion, which was received by petitioners on 12
August 2010.24
The RTC denied petitioners motion for reconsideration in its Order dated 27 August
2010.25 Petitioners filed a petition for certiorari26 under Rule 65 on 8 November 2010 before
the Court of Appeals. Petitioners alleged that the RTC committed grave abuse of discretion in
71
granting the Motion to Quash despite: (1) respondents failure to comply with the three-day
notice requirement; and (2) the existence of probable cause, and personal knowledge of the
warrant applicant.
The Ruling of the CA
The CA denied the petition for certiorari. The appellate court held that:
In the instant case, when the court a quoordered petitioners to submit their comment on the
motion toquash, it was, in effect, giving petitioners their day in court. Thus, while the
[three]-day notice rule was not strictly observed, its purpose was still satisfied when
respondent judge did not immediately rule on the motion giving petitioners x x x the
opportunity to study and oppose the arguments stated in the motion.27
Hence, this petition.
The Issue
The instant petition raisedonly one issue, to wit:
The Honorable Court of Appeals erred in ruling that Judge Amor Reyes of Branch 21, Regional
Trial Court of Manila did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing its Orders dated 29 June2010 and 27 August 2010, quashing Search
Warrant Nos. 10-[1]5912 and 10-[1]5913 and directing the immediate release of the items
seized pursuant to the said warrants, despite the pendency of appellate proceedings.28
The Ruling of the Court
We rule that strict compliance with the three-day notice rule may be relaxed in this case.
However, we sustain petitioners contention that there was probable cause for issuance of a
warrant, and the RTC and CA should have upheld the validity of both warrants.
Compliance with the three-day notice rule
In Anama v. Court of Appeals,29 we ruled that the three-day notice rule is not absolute. The
purpose of the ruleis to safeguard the adverse partys right to due process. Thus, if the adverse
party was given a reasonable opportunity to study the motion and oppose it, then strict
compliance with the three-day notice rule may be dispensed with.
As correctly pointed out by the CA:
In the instant case, when the court a quoordered petitioners to submit their comment on the
motion toquash, it was, in effect, giving petitioners their day in court. Thus, while the
[three]-day notice rule was not strictly observed, its purpose was still satisfied when
respondent judge did not immediately rule on the motion giving petitioners x x x the
opportunity to study and oppose the arguments stated in the motion.30
Existence of probable cause
Under Section 1 of Rule 45 of the Rules of Court, petitions for review by certiorari "shall raise
only questions of law." A question of fact exists when there is a doubt as to the truth of certain
facts, and it can only be resolved through a reexamination of the body of evidence.31
In Microsoft Corporation v. Maxicorp, Inc.,32 we ruled that the existence of probable cause is a
question of fact.33In the same case, we also stated that:
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. For
this reason, the findings of the judge deserve great weight. The reviewing court should
overturn such findings only upon proof that the judge disregarded the facts before him or
ignored the clear dictates of reason.34
This Court is not a trier of facts. As a general rule, we defer to the lower courts appreciation
and evaluation of evidence.35 This general rule, however, is not absolute. We will review the
factual findings of the CA in any of the following instances:
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;
(2) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures;
(3) when the inference made by the Court of Appeals from its findings of fact is manifestly
mistaken, absurd, or impossible;
(4) when there is a grave abuse of discretion in the appreciation of facts;
(5) when the Appellate Court, in making its findings, went beyond the issues of the case and
such findings are contrary to the admissions of both appellant and appellee;
(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;
72
(7) when the Court of Appeals failed to notice certain relevant facts which, if properly
considered, would justify a different conclusion;
(8) when the findings of fact are themselves conflicting;
(9) when the findings of fact are conclusions without citation of the specific evidence on which
they are based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence
but such findings are contradicted by the evidence on record. 36
6. I suspect that the ADOBE and MICROSOFT computer software programs that are being used
in the premises of NEW FIELDS are unauthorized, illegal or unlicensed copies because of the
following reasons:
6.1. At least two (2) computer units are using a common Product Identification Number of
MICROSOFT and ADOBE software.1wphi1 This is one indication that the software being used
is unlicensed or was illegally reproduced or copied. All ADOBE and MICROSOFT computer
software programs should only be used in one computer unit, unless they avail of an Open
License Agreement from the computer software developer, which [was not obtained by] NEW
FIELDS. x x x.41

In this case, we find reason to overturn the rulings of the RTC and CA, since there was grave
abuse of discretion in the appreciation of facts. The CA sustained the quashal of the warrant
because the witnesses had "no personal knowledge of the facts upon which the issuance of the
warrants may be justified,"37 and the applicants and the witnesses merely relied on the screen
shots acquired from the confidential informant.38
We disagree with the conclusions of the CA. The assailed CA Decision itself stated:
Initial hearsay information or tips from confidential informants could very well serve as basis
for the issuance of a search warrant, if followed up personally by the recipient and
validated.39 Looking at the records, it is clear that Padilla and his companions were able to
personally verify the tipof their informant. In his Affidavit submitted to Judge Amor Reyes prior
to the issuance of the warrant, Padilla stated that:
The evidence on record clearly shows that the applicant and witnesses were able to verify the
information obtained from their confidential source. The evidence likewise shows that there
was probable cause for the issuance of a search warrant. Thus, the requirement of personal
knowledge of the applicant and witnesses was clearly satisfied in this case.
WHEREFORE, the petition is GRANTED. The Decision dated 28 June 2012 and the Resolution
dated 30 January 2013 of the Court of Appeals, uph0lding the 29 June 2010 and 27 August
2010 Orders of the Regional Trial Court, are hereby REVERSED and SET ASIDE. Search Warrant
Nos. 10-15912 and 10-15913 are declared valid.
SO ORDERED.

At the time that I was inside the office premises of the NEW FIELDS, I saw the Product Keys or
Product Identification Numbers of the ADOBE and MICROSOFT computer software programs
installed in some of the computer units. Ms. Serrano and Mr. Moradoz were able to pull up
these data since they were allowed to use some of the computers of the target companies in
line with the pretext that we used to gain entry into NEW FIELDS. I actively read and attentively
observed the information reflected from the monitor display unit of the computers that Ms.
Serrano and Mr. Moradoz were able to use. x x x.40

As mentioned earlier, Padilla has been trained to distinguish illegally reproduced Adobe and
Microsoft software. Thus, in his Affidavit, he stated that:

xxxx

73
G.R. No. 209843, March 25, 2015
TAIWAN KOLIN CORPORATION, LTD., Petitioner, v. KOLIN ELECTRONICS CO.,
INC., Respondent.
DECISION
VELASCO JR., J.:
Nature of the Case
Before the Court is a petition for review under Rule 45 of the Rules of Court interposed by
petitioner Taiwan Kolin Corporation, Ltd. (Taiwan Kolin), assailing the April 30, 2013
Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 122565 and its subsequent November
6, 2013 Resolution.2 The assailed issuances effectively denied petitioners trademark
application for the use of KOLIN on its television and DVD players.chanroblesvirtuallawlibrary
The Facts
On February 29, 1996, Taiwan Kolin filed with the Intellectual Property Office (IPO), then
Bureau of Patents, Trademarks, and Technology Transfer, a trademark application, docketed as
Application No. 4-1996-106310, for the use of KOLIN on a combination of goods, including
colored televisions, refrigerators, window-type and split-type air conditioners, electric fans and
water dispensers. Said goods allegedly fall under Classes 9, 11, and 21 of the Nice Classification
(NCL).
Application No. 4-1996-106310 would eventually be considered abandoned for Taiwan Kolins
failure to respond to IPOs Paper No. 5 requiring it to elect one class of good for its coverage.
However, the same application was subsequently revived through Application Serial No.
4-2002-011002,3 with petitioner electing Class 9 as the subject of its application, particularly:
television sets, cassette recorder, VCD Amplifiers, camcorders and other audio/video electronic
equipment, flat iron, vacuum cleaners, cordless handsets, videophones, facsimile machines,
teleprinters, cellular phones and automatic goods vending machine. The application would in
time be duly published.4cralawred
On July 13, 2006, respondent Kolin Electronics Co., Inc. (Kolin Electronics) opposed petitioners
revived application, docketed as Inter Partes Case No. 14-2006-00096. As argued, the mark
Taiwan Kolin seeks to register is identical, if not confusingly similar, with its KOLIN mark
registered on November 23, 2003, covering the following products under Class 9 of the NCL:
automatic voltage regulator, converter, recharger, stereo booster, AC-DC regulated power
supply, step-down transformer, and PA amplified AC-DC.5cralawred
To digress a bit, Kolin Electronics KOLIN registration was, as it turns out, the subject of a
prior legal dispute between the parties in Inter Partes Case No. 14-1998-00050 before the IPO.
In the said case, Kolin Electronics own application was opposed by Taiwan Kolin, being, as
Taiwan Kolin claimed, the prior registrant and user of the KOLIN trademark, having
registered the same in Taipei, Taiwan on December 1, 1988. The Bureau of Legal Affairs of the
IPO (BLA-IPO), however, did not accord priority right to Taiwan Kolins Taipei registration
absent evidence to prove that it has already used the said mark in the Philippines as early as
1988. On appeal, the IPO Director General affirmed the BLA-IPOs Decision. Taiwan Kolin
elevated the case to the CA, but without injunctive relief, Kolin Electronics was able to register
the KOLIN trademark on November 23, 2003 for its products.6 Subsequently, the CA, on July
31, 2006, affirmed7 the Decision of the Director General.
In answer to respondents opposition in Inter Partes Case No. 14-2006-00096, petitioner
argued that it should be accorded the benefits of a foreign-registered mark under Secs. 3 and
131.1 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the
Philippines (IP Code);8 that it has already registered the KOLIN mark in the Peoples Republic
of China, Malaysia and Vietnam, all of which are parties to the Paris Convention for the
Protection of Industrial Property (Paris Convention) and the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS);and that benefits accorded to a well-known
mark should be accorded to petitioner.9cralawred
Ruling of the BLA-IPO
By Decision10 dated August 16, 2007, the BLA-IPO denied petitioners application disposing as
follows:chanRoblesvirtualLawlibrary
In view of all the foregoing, the instant Opposition is as, it is
hereby SUSTAINED. Accordingly, application bearing Serial No.
4-1996-106310 for the mark KOLIN filed in the name of TAIWAN KOLIN.,
LTD. on February 29, 1996 for goods falling under Class 09 of the
International Classification of Goods such as cassette recorder, VCD,
woofer, amplifiers, camcorders and other audio/video electronic
equipment, flat iron, vacuum cleaners, cordless handsets, videophones,
facsimile machines, teleprinters, cellular phones, automatic goods vending
machines and other electronic equipment is hereby REJECTED.
Let the file wrapper of KOLIN, subject of this case be forwarded to the
Bureau of Trademarks (BOT) for appropriate action in accordance with this
Decision.
74
 SO ORDERED.cralawlawlibrary
Citing Sec. 123(d) of the IP Code,11 the BLA-IPO held that a mark cannot be registered if it is
identical with a registered mark belonging to a different proprietor in respect of the same or
closely-related goods. Accordingly, respondent, as the registered owner of the mark KOLIN
for goods falling under Class 9 of the NCL, should then be protected against anyone who
impinges on its right, including petitioner who seeks to register an identical mark to be used on
goods also belonging to Class 9 of the NCL.12 The BLA-IPO also noted that there was proof of
actual confusion in the form of consumers writing numerous e-mails to respondent asking for
information, service, and complaints about petitioners products.13cralawred
Petitioner moved for reconsideration but the same was denied on January 26, 2009 for lack of
merit.14 Thus, petitioner appealed the above Decision to the Office of the Director General of
the IPO.chanroblesvirtuallawlibrary
Ruling of the IPO Director General
On November 23, 2011, the IPO Director General rendered a Decision15 reversing that of the
BLA-IPO in the following wise:chanRoblesvirtualLawlibrary
Wherefore, premises considered, the appeal is hereby GRANTED. The
Appellants Trademark Application No. 4-1996-106310 is hereby GIVEN
DUE COURSE subject to the use limitation or restriction for the goods
television and DVD player. Let a copy of this Decision as well as the
trademark application and records be furnished and returned to the
Director of the Bureau of Legal Affairs for appropriate action. Further, let
the Director of the Bureau of Trademarks and the library of the
Documentation, Information and Technology Transfer Bureau be furnished
a copy of this Decision for information, guidance, and records purposes.
SO ORDERED.cralawlawlibrary
In so ruling, the IPO Director General ratiocinated that product classification alone cannot
serve as the decisive factor in the resolution of whether or not the goods are related and that
emphasis should be on the similarity of the products involved and not on the arbitrary
classification or general description of their properties or characteristics. As held, the mere fact
that one person has adopted and used a particular trademark for his goods does not prevent
the adoption and use of the same trademark by others on articles of a different
description.16cralawred
Aggrieved, respondent elevated the case to the CA.chanroblesvirtuallawlibrary
Ruling of the Court of Appeals
In its assailed Decision, the CA found for Kolin Electronics, on the strength of the following
premises: (a) the mark sought to be registered by Taiwan Kolin is confusingly similar to the one
already registered in favor of Kolin Electronics; (b) there are no other designs, special shape or
easily identifiable earmarks that would differentiate the products of both competing
companies;17 and (c) the intertwined use of television sets with amplifier, booster and voltage
regulator bolstered the fact that televisions can be considered as within the normal expansion
of Kolin Electronics,18 and is thereby deemed covered by its trademark as explicitly protected
under Sec. 13819 of the IP Code.20Resultantly, the CA granted respondents appeal
thusly:chanRoblesvirtualLawlibrary
WHEREFORE, the appeal is GRANTED. The November 23, 2011 Decision of
the Director General of the Intellectual Property Office in Inter Partes Case
No. 14-2006-0096 is REVERSED and SET ASIDE. The September 17, 2007
Decision of the Bureau of Legal Affairs of the same office is REINSTATED.
SO ORDERED.cralawlawlibrary
Petitioner moved for reconsideration only to be denied by the CA through its equally assailed
November 6, 2013 Resolution. Hence, the instant recourse.chanroblesvirtuallawlibrary
The Issue
The primordial issue to be resolved boils down to whether or not petitioner is entitled to its
trademark registration of KOLIN over its specific goods of television sets and DVD players.
Petitioner postulates, in the main, that its goods are not closely related to those of Kolin
Electronics. On the other hand, respondent hinges its case on the CAs findings that its and
petitioners products are closely-related. Thus, granting petitioners application for trademark
registration, according to respondent, would cause confusion as to the public.
The Courts Ruling
The petition is impressed with merit.
Identical marks may be registered for
75
products from the same classification
To bolster its opposition against petitioners application to register trademark KOLIN,
respondent maintains that the element of mark identity argues against approval of such
application,quoting the BLA IPOs ruling in this regard:21cralawred
Indubitably, Respondent-Applicants [herein petitioner] mark is identical to
the registered mark of herein Opposer [herein respondent] and the
identical mark is used on goods belonging to Class 9 to which Opposers
goods are also classified. On this point alone, Respondent-Applicants
application should already be denied.cralawlawlibrary
The argument is specious.
The parties admit that their respective sets of goods belong to Class 9 of the NCL, which
includes the following:22cralawred
Class 9
Scientific, nautical, surveying, photographic, cinematographic, optical,
weighing, measuring, signalling, checking (supervision), life-saving and
teaching apparatus and instruments; apparatus and instruments for
conducting, switching, transforming, accumulating, regulating or
controlling electricity; apparatus for recording, transmission or
reproduction of sound or images; magnetic data carriers, recording discs;
compact discs, DVDs and other digital recording media; mechanisms for
coin-operated apparatus; cash registers, calculating machines, data
processing equipment, computers; computer software; fire-extinguishing
apparatus.cralawlawlibrary
But mere uniformity in categorization, by itself, does not automatically preclude the
registration of what appears to be an identical mark, if that be the case. In fact, this Court, in a
long line of cases,has held that such circumstance does not necessarily result in any trademark
infringement. The survey of jurisprudence cited in Mighty Corporation v. E. & J Gallo
Winery23 is enlightening on this point:chanRoblesvirtualLawlibrary
in Acoje Mining Co., Inc. vs. Director of Patents,24 we ordered the approval of
Acoje Minings application for registration of the trademark LOTUS for its soy
(a) sauce even though Philippine Refining Company had prior registration and use
of such identical mark for its edible oil which, like soy sauce, also belonged to
Class 47;
in Philippine Refining Co., Inc. vs. Ng Sam and Director of Patents, 25 we upheld
the Patent Directors registration of the same trademark CAMIA for Ng Sams
(b) ham under Class 47, despite Philippine Refining Companys prior trademark
registration and actual use of such mark on its lard, butter, cooking oil (all of
which belonged to Class 47), abrasive detergents, polishing materials and soaps;
in Hickok Manufacturing Co., Inc. vs. Court of Appeals and Santos Lim Bun
Liong,26we dismissed Hickoks petition to cancel private respondents HICKOK
(c)
trademark registration for its Marikina shoes as against petitioners earlier
registration of the same trademark for handkerchiefs, briefs, belts and wallets.
cralawlawlibrary
Verily, whether or not the products covered by the trademark sought to be registered by
Taiwan Kolin, on the one hand, and those covered by the prior issued certificate of registration
in favor of Kolin Electronics, on the other, fall under the same categories in the NCL is not the
sole and decisive factor in determining a possible violation of Kolin Electronics intellectual
property right should petitioners application be granted. It is hornbook doctrine, as held in the
above-cited cases, that emphasis should be on the similarity of the products involved and not
on the arbitrary classification or general description of their properties or characteristics. The
mere fact that one person has adopted and used a trademark on his goods would not, without
more, prevent the adoption and use of the same trademark by others on unrelated articles of a
different kind.27cralawred
The CA erred in denying petitioners
registration application
Respondent next parlays the idea of relation between products as a factor militating against
petitioners application. Citing Esso Standard Eastern, Inc. v. Court of Appeals,28 respondent
argues that the goods covered by petitioners application and those covered by its registration
are actually related belonging as they do to the same class or have the same physical
characteristics with reference to their form, composition, texture, or quality, or if they serve
the same purpose. Respondent likewise draws parallelisms between the present controversy
and the following cases:29cralawred
76
 In Arce & Sons, Inc. vs. Selecta Biscuit Company,30 biscuits were held related to
(a)
milk because they were both food products;
(b) In Chua Che vs. Phil. Patents Office,31 soap and perfume, lipstick and nail polish
are held to be similarly related because they are common household items;
In Ang vs. Teodoro,32 the trademark Ang Tibay for shoes and slippers was
(c) disallowed to be used for shirts and pants because they belong to the same
general class of goods; and
In Khe vs. Lever Bros. Co.,33 soap and pomade, although non-competitive,
(d) were held to be similar or belong to the same class, since both are toilet
articles.
cralawlawlibrary
Respondent avers that Kolin Electronics and Taiwan Kolins products are closely-related not
only because both fall under Class 9 of the NCL, but mainly because they both relate to
electronic products, instruments, apparatus, or appliances.34 Pushing the point, respondent
would argue that Taiwan Kolin and Kolin Electronics goods are inherently similar in that they
are all plugged into electric sockets and perform a useful function.35 Furthermore, respondent
echoes the appellate courts ratiocination in denying petitioners application, viz:36cralawred
Significantly, Kolin Electronics goods (automatic voltage regulator;
converter; recharger; stereo booster; AC-DC regulated power supply;
step-down transformer; and PA amplified AC-DC) and Taiwan Kolins
television sets and DVD players are both classified under class 9 of the NICE
agreement. At first glance, it is also evident that all these goods are
generally desc ribed as electrical devices.x x x [T]he goods of both Kolin
Electronics and Taiwan Kolin will inevitably be introduced to the public as
KOLIN products and will be offered for sale in the same channels of trade.
Contrary to Taiwan Kolins claim, power supply as well as audio and stereo
equipment like booster and amplifier are not only sold in hardware and
electrical shops. These products are commonly found in appliance stores
alongside television sets and DVD players. With the present trend in
todays entertainment of having a home theater system, it is not unlikely to
see a stereo booster, amplifier and automatic voltage regulator displayed
together with the television sets and DVD players. With the intertwined use
of these products bearing the identical KOLIN mark, the ordinary
intelligent consumer would likely assume that they are produced by the
same manufacturer.
In sum, the intertwined use, the same classification of the products as
class 9 under the NICE Agreement, and the fact that they generally flow
through the same channel of trade clearly establish that Taiwan Kolins
television sets and DVD players are closely related to Kolin Electronics
goods. As correctly pointed out by the BLA-IPO, allowing Taiwan Kolins
registration would only confuse consumers as to the origin of the products
they intend to purchase. Accordingly, protection should be afforded to
Kolin Electronics, as the registered owner of the KOLIN
trademark.37 (emphasis added)cralawlawlibrary
The CAs approach and reasoning to arrive at the assailed holding that the approval of
petitioners application is likely to cause confusion or deceive fail to persuade.
The products covered by petitioners
application and respondents
registration are unrelated
A certificate of trademark registration confers upon the trademark owner the exclusive right to
sue those who have adopted a similar mark not only in connection with the goods or services
specified in the certificate, but also with those that are related thereto.38cralawred
In resolving one of the pivotal issues in this casewhether or not the products of the parties
involved are relatedthe doctrine in Mighty Corporation is authoritative. There, the Court
held that the goods should be tested against several factors before arriving at a sound
conclusion on the question of relatedness. Among these are:chanRoblesvirtualLawlibrary
(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;
(c) the products quality, quantity, or size, including the nature of the
package, wrapper or container;
(d) the nature and cost of the articles;
(e) the descriptive properties, physical attributes or essential
characteristics with reference to their form, composition, texture or quality;
(f) the purpose of the goods;
(g) whether the article is bought for immediate consumption, that is,
day-to-day household items;
(h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
(j) the channels of trade through which the goods flow, how they are
distributed, marketed, displayed and sold.39cralawlawlibrary
77

As mentioned, the classification of the products under the NCL is merely part and parcel of the
factors to be considered in ascertaining whether the goods are related. It is not sufficient to
state that the goods involved herein are electronic products under Class 9 in order to establish
relatedness between the goods, for this only accounts for one of many considerations
enumerated in Mighty Corporation. In this case, credence is accorded to petitioners assertions
that:40cralawred
1. Taiwan Kolins goods are classified as home appliances as opposed to Kolin
Electronics goods which are power supply and audio equipment
accessories;ChanRoblesVirtualawlibrary
2. Taiwan Kolins television sets and DVD players perform distinct function and purpose
from Kolin Electronics power supply and audio equipment; and
3. Taiwan Kolin sells and distributes its various home appliance products on wholesale
and to accredited dealers, whereas Kolin Electronics goods are sold and flow
through electrical and hardware stores.
Clearly then, it was erroneous for respondent to assume over the CA to conclude that all
electronic products are related and that the coverage of one electronic product necessarily
precludes the registration of a similar mark over another. In this digital age wherein electronic
products have not only diversified by leaps and bounds, and are geared towards
interoperability, it is difficult to assert readily, as respondent simplistically did, that all devices
that require plugging into sockets are necessarily related goods.
It bears to stress at this point that the list of products included in Class 941 can be
sub-categorized into five (5) classifications, namely: (1) apparatus and instruments for scientific
or research purposes, (2) information technology and audiovisual equipment, (3) apparatus
and devices for controlling the distribution and use of electricity, (4) optical apparatus and
instruments, and (5) safety equipment.42 From this sub-classification, it becomes apparent that
petitioners products, i.e., televisions and DVD players, belong to audiovisiual equipment, while
that of respondent, consisting of automatic voltage regulator, converter, recharger, stereo
booster, AC-DC regulated power supply, step-down transformer, and PA amplified AC-DC,
generally fall under devices for controlling the distribution and use of electricity.
The ordinarily intelligent buyer
is not likely to be confused
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to
another, no rigid set rules can plausible be formulated. Each case must be decided on its
merits, with due regard to the goods or services involved, the usual purchasers character and
attitude, among others. In such cases, even more than in any other litigation, precedent must
be studied in the light of the facts of a particular case. That is the reason why in trademark
cases, jurisprudential precedents should be applied only to a case if they are specifically in
point.43cralawred
For a clearer perspective and as matter of record, the following image on the left44 is the
trademark applied for by petitioner, while the image juxtaposed to its right45 is the trademark
registered by respondent:
(please see image in G.R. No. 209843 page 10)
While both competing marks refer to the word KOLIN written in upper case letters and in
bold font, the Court at once notes the distinct visual and aural differences between them: Kolin
Electronics mark is italicized and colored black while that of Taiwan Kolin is white in pantone
red color background. The differing features between the two, though they may appear
minimal, are sufficient to distinguish one brand from the other.
It cannot be stressed enough that the products involved in the case at bar are, generally
speaking, various kinds of electronic products. These are not ordinary consumable household
items, like catsup, soy sauce or soap which are of minimal cost.46 The products of the
contending parties are relatively luxury items not easily considered affordable. Accordingly, the
casual buyer is predisposed to be more cautious and discriminating in and would prefer to mull
over his purchase. Confusion and deception, then, is less likely. 47 As further elucidated in Del
Monte Corporation v. Court of Appeals:48cralawred
x x x Among these, what essentially determines the attitudes of the
purchaser, specifically his inclination to be cautious, is the cost of the goods.
To be sure, a person who buys a box of candies will not exercise as much
care as one who buys an expensive watch. As a general rule, an ordinary
buyer does not exercise as much prudence in buying an article for which he
pays a few centavos as he does in purchasing a more valuable
thing. Expensive and valuable items are normally bought only after
deliberate, comparative and analytical investigation. But mass products,
low priced articles in wide use, and matters of everyday purchase
requiring frequent replacement are bought by the casual consumer
without great care x x x.(emphasis added)cralawlawlibrary
Respondent has made much reliance on Arce & Sons, Chua Che, Ang, and Khe, oblivious that
78
they involved common household itemsi.e., biscuits and milk, cosmetics, clothes, and toilet
articles, respectivelywhereas the extant case involves luxury items not regularly and
inexpensively purchased by the consuming public. In accord with common empirical
experience, the useful lives of televisions and DVD players last for about five (5) years,
minimum, making replacement purchases very infrequent. The same goes true with converters
and regulators that are seldom replaced despite the acquisition of new equipment to be
plugged onto it. In addition, the amount the buyer would be parting with cannot be deemed
minimal considering that the price of televisions or DVD players can exceed todays monthly
minimum wage.In light of these circumstances, it is then expected that the ordinary intelligent
buyer would be more discerning when it comes to deciding which electronic product they are
going to purchase, and it is this standard which this Court applies here in in determining the
likelihood of confusion should petitioners application be granted.
To be sure, the extant case is reminiscent of Emerald Garment Manufacturing Corporation v.
Court of Appeals,49 wherein the opposing trademarks are that of Emerald Garment
Manufacturing Corporations Stylistic Mr. Lee and H.D. Lees LEE. In the said case, the
appellate court affirmed the decision of the Director of Patents denying Emerald Garments
application for registration due to confusing similarity with H.D. Lees trademark. This Court,
however, was of a different beat and ruled that there is no confusing similarity between the
marks, given that the products covered by the trademark, i.e., jeans, were,at that time,
considered pricey, typically purchased by intelligent buyers familiar with the products and are
more circumspect, and, therefore, would not easily be deceived. As
held:chanRoblesvirtualLawlibrary
Finally, in line with the foregoing discussions, more credit should be given
to the ordinary purchaser. Cast in this particular controversy, the
ordinary purchaser is not the completely unwary consumer but is the
ordinarily intelligent buyer considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok50is better suited to
the present case. There, the ordinary purchaser was defined as one
accustomed to buy, and therefore to some extent familiar with, the
goods in question. The test of fraudulent simulation is to be found in the
likelihood of the deception of some persons in some measure acquainted
with an established design and desirous of purchasing the commodity with
which that design has been associated. The test is not found in the
deception, or the possibility of deception, of the person who knows
nothing about the design which has been counterfeited, and who must be
indifferent between that and the other. The simulation, in order to be
objectionable, must be such as appears likely to mislead the ordinary
intelligent buyer who has a need to supply and is familiar with the article
that he seeks to purchase.51 (emphasis added)cralawlawlibrary
Consistent with the above ruling, this Court finds that the differences between the two marks,
subtle as they may be, are sufficient to prevent any confusion that may ensue should
petitioners trademark application be granted.As held in Esso Standard Eastern,
Inc.:52cralawred
Respondent court correctly ruled that considering the general appearances
of each mark as a whole, the possibility of any confusion is unlikely. A
comparison of the labels of the samples of the goods submitted by the
parties shows a great many differences on the trademarks used. As pointed
out by respondent court in its appealed decision, (A) witness for the
plaintiff, Mr. Buhay, admitted that the color of the ESSO used by the
plaintiff for the oval design where the blue word ESSO is contained is the
distinct and unique kind of blue. In his answer to the trial courts question,
Mr. Buhay informed the court that the plaintiff never used its trademark on
any product where the combination of colors is similar to the label of the
Esso cigarettes, and Another witness for the plaintiff, Mr. Tengco,
testified that generally, the plaintiffs trademark comes all in either red,
white, blue or any combination of the three colors. It is to be pointed out
that not even a shade of these colors appears on the trademark of the
appellants cigarette. The only color that the appellant uses in its
trademark is green.
Even the lower court, which ruled initially for petitioner, found that a
noticeable difference between the brand ESSO being used by the
defendants and the trademark ESSO of the plaintiff is that the former has a
rectangular background, while in that of the plaintiff the word ESSO is
enclosed in an oval background.cralawlawlibrary
All told, We are convinced that petitioners trademark registration not only covers unrelated
good, but is also incapable of deceiving the ordinary intelligent buyer. The ordinary purchaser
must be thought of as having, and credited with, at least a modicum of intelligence to be able
to see the differences between the two trademarks in question.53cralawred
Questions of fact may still be entertained
On a final note, the policy according factual findings of courts a quo great respect, if not finality,
is not binding where they have overlooked, misapprehended, or misapplied any fact or
circumstance of weight and substance.54 So it must be here; the nature of the products
involved materially affects the outcome of the instant case. A reversal of the appellate courts
Decision is then in order.
79
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP No. 122565, dated April 30, 2013 and
November 6, 2013, respectively, are hereby REVERSED and SET ASIDE. Accordingly, the
Decision of the Intellectual Property Office Director General in Inter Partes Case No.
14-2006-00096, dated November 23, 2011, is hereby REINSTATED.
SO ORDERED.cralawlawlibrar
First, products classified under Class 9 can be further classified into five categories. Accordingly,
the goods covered by the competing marks between Taiwan Kolin and Kolin Electronics fall
under different categories. Taiwan Kolins goods are categorized as audio visual equipments,
while Kolin Electronics goods fall under devices for controlling the distribution and use of
electricity. Thus, it is erroneous to assume that all electronic products are closely related and
that the coverage of one electronic product necessarily precludes the registration of a similar
mark over another.

Facts:
Taiwan Kolin Corp sought to register the trademark KOLIN in Class 9 on the following
combination of goods: television sets, cassette recorder, VCD Amplifiers, camcorders and other
audio/video electronic equipment, flat iron, vacuum cleaners, cordless handsets, videophones,
facsimile machines, teleprinters, cellular phones and automatic goods vending machine.
Second, the ordinarily intelligent buyer is not likely to be confused. The distinct visual and aural
differences between the two trademarks KOLIN, although appear to be minimal, are
sufficient to distinguish between one brand or another. The casual buyer is predisposed to be
more cautious, discriminating, and would prefer to mull over his purchase because the
products involved are various kind of electronic products which are relatively luxury items and
not considered affordable. They are not ordinarily consumable items such as soy sauce, ketsup
or soap which are of minimal cost. Hence, confusion is less likely.

Kolin Electronics opposed the application on the ground that the trademark KOLIN is
identical, if not confusingly similar, with its registered trademark KOLIN which covers the
following products under Class 9 of the Nice Classification (NCL): automatic voltage regulator,
converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer,
and PA amplified AC-DC. Kolin Electronics argued that the products are not only closely-related
because they fall under the same classification, but also because they are inherently similar for
being electronic products and are plugged into electric sockets and perform a useful function.

Issue: W/N the products are closely-related

Held:

No, the products are not related and the use of the trademark KOLIN on them would not likely
cause confusion. To confer exclusive use of a trademark, emphasis should be on the
similarity or relatedness of the goods and/or services involved and not on the arbitrary
classification or general description of their properties or characteristics.
80
G.R. No. 197802, November 11, 2015
ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS ARAIN, M.D. DBA ZUNECA
PHARMACEUTICAL, Petitioners, v. NATRAPHARM, INC., Respondent.
RESOLUTION
VILLARAMA, JR., J.:
This is a petition for review1 under Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the April 18, 2011 Decision2 and July 21, 2011 Resolution3 of the Court of Appeals (CA)
in the petition for certiorari docketed as CA-G.R. SP No. 103333 granting a permanent
injunction in favor of respondent Natrapharm, Inc. and against petitioner Zuneca
Pharmaceutical.
The facts follow:
Respondent is an all-Filipino pharmaceutical company which manufactures and sells a medicine
bearing the generic name "CITICOLINE," which is indicated for heart and stroke patients. The
said medicine is marketed by respondent under its registered trademark "ZYNAPSE," which
respondent obtained from the Intellectual Property Office (IPO) on September 24, 2007 under
Certificate of Trademark Registration No. 4-2007-005596. With its registration, the trademark
"ZYNAPSE" enjoys protection for a term of 10 years from September 24, 2007.4
In addition, respondent obtained from the Bureau of Food and Drugs (BFAD) all necessary
permits and licenses to register, list and sell its "ZYNAPSE" medicine in its various forms and
dosages.5
Allegedly unknown to respondent, since 2003 or even as early as 2001, petitioners have been
selling a medicine imported from Lahore, Pakistan bearing the generic name
"CARBAMAZEPINE," an anti-convulsant indicated for epilepsy, under the brand name
"ZYNAPS," which trademark is however not registered with the IPO. "ZYNAPS" is pronounced
exactly like "ZYNAPSE."6
Respondent further alleged that petitioners are selling their product "ZYNAPS"
CARBAMAZEPINE in numerous drugstores in the country where its own product "ZYNAPSE"
CITICOLINE is also being sold.7
Moreover, respondent claimed that the drug CARBAMAZEPINE has one documented serious
and disfiguring side-effect called "Stevens-Johnson Syndrome," and that the sale of the
medicines "ZYNAPSE" and "ZYNAPS" in the same drugstores will give rise to medicine
switching.8
On October 30, 2007, respondent sent petitioners a cease-and-desist demand letter, pointing
out that:
1. "ZYNAPSE" is the registered trademark of [respondent], and that
as such owner, it has exclusive trademark right under the law to
the use thereof and prevent others from using identical or
confusingly similar marks, and that [petitioners] must stop the
use of "ZYNAPS" for being nearly identical to "ZYNAPSE"; and
2. Because there is confusing similarity between "ZYNAPSE" and
"ZYNAPS," there is a danger of medicine switching, with the
patient on "ZYNAPSE" medication placed in a more injurious
situation given the Steven-Johnson Syndrome side effect of the
"ZYNAPS" CARBAMAZEPINE.9
Petitioners refused to heed the above demand, claiming that they had prior use of the name
"ZYNAPS" since year 2003, having been issued by the BFAD a Certificate of Product Registration
(CPR) on April 15, 2003, which allowed them to sell CARBAMAZEPINE under the brand name
"ZYNAPS."10
On November 29, 2007, respondent filed a complaint against petitioners for trademark
infringement for violation of Republic Act (R.A.) No. 8293, or the Intellectual Property Code of
the Philippines (IPC), with prayer for a temporary restraining order (TRO) and/or writ of
preliminary injunction. To justify the TRO/writ of preliminary injunction, respondent cited
Section 12211 of R.A. No. 8293, under which the registration of "ZYNAPSE" gives it the exclusive
right to use the said name as well as to exclude others from using the same. 12 In addition,
respondent argued that under Sections 13813 and 147.114 of the IPC, certificates of registration
are prima facie evidence of the registrant's ownership of the mark and of the registrant's
exclusive right to use the same.15 Respondent also invoked the case of Conrad and Company,
Inc. v. Court of Appeals16 where it was ruled that an invasion of a registered mark entitles the
holder of a certificate of registration thereof to injunctive relief.17
In their answer, petitioners argued that they enjoyed prior use in good faith of the brand name
"ZYNAPS," having submitted their application for CPR with the BFAD on October 2, 2001, with
the name "ZYNAPS" expressly indicated thereon. The CPR was issued to them on April 15,
2003.18Moreover, petitioners averred that under Section 15919 of the IPC their right to use the
said mark is protected.20
81
In its December 21, 2007 Order,21 the Regional Trial Court (RTC) denied respondent's
application for a TRO, ruling that even if respondent was able to first register its mark
"ZYNAPSE" with the IPO in 2007, it is nevertheless defeated by the prior actual use by
petitioners of "ZYNAPS" in 2003.
In its March 12, 2008 Order,22 the RTC denied the application for a writ of preliminary
injunction, reiterating the reasons stated in the order denying the application for a TRO:
In this Court's objective evaluation, neither party is, at this point, entitled
to any injunctive solace. Plaintiff, while admittedly the holder of a
registered trademark under the IPC, may not invoke ascendancy or
superiority of its CTR [certificate of trademark registration] over the CPR
[certificate of product registration of the BFAD] of the defendants, as the
latter certificate is, in the Court's opinion, evidence of its "prior use".
Parenthetically, the plaintiff would have been entitled to an injunction as
against any or all third persons in respect of its registered mark under
normal conditions, that is, in the event wherein Section 159.1 would not be
invoked by such third person. Such is the case however in this litigation.
Section 159 of the IPC explicitly curtails the registrant's rights by providing
for limitations on those rights as against a "prior user" under Section 159.1
xxx.23
Via a petition for certiorari with an application for a TRO and/or a writ of preliminary injunction,
respondent questioned before the CA the RTC's denial of the application for a writ of
preliminary injunction.
On June 17, 2008, the CA issued a Resolution24 denying respondent's application for TRO
and/or preliminary injunction for lack of merit. The CA found no compelling reason to grant the
application for TRO and/or preliminary injunction because there was no showing that
respondent had a clear and existing right that will be violated by petitioners. Respondent
moved for reconsideration but was denied by the CA in its July 31, 2008 Resolution.25cralawred
However, contrary to its earlier resolutions denying the application for a TRO/preliminary
injunction, the CA, in its April 18, 2011 Decision, upheld the allegations of respondent that it is
entitled to injunctive relief on the basis of its IPO registration and permanently enjoined
petitioners from the commercial use of "ZYNAPS." The fallo of the CA Decision reads:
WHEREFORE, premises considered, the Petition for Certiorari is GRANTED.
The assailed Omnibus Order dated 12 March 2008 of the Regional Trial
Court, Branch 93 of Quezon City in Civil Case No. Q-07-61561
is REVERSED and SET ASIDE, and a new one is
entered permanently ENJOINING defendants-respondents, their
employees, agents, representatives, dealers, retailers, and/or assigns, and
any and all persons acting in their behalf, from manufacturing, importing,
distributing, selling and/or advertising for sale, or otherwise using in
commerce, the anti-convulsant drug CARBAMAZEPINE under the brand
name and mark "ZYNAPS," or using any other name which is similar or
confusingly similar to petitioner's registered trademark "ZYNAPSE,"
including filing of application for permits, license, or certificate of product
registration with the Food and Drug Administration and other government
agencies.
SO ORDERED.26 (Underscoring and additional emphasis supplied)
Petitioners' motion for reconsideration was denied by the CA in its Resolution dated July 21,
2011.
Hence, this petition for review.
On December 2, 2011, the RTC rendered a Decision 27 on the merits of the case. It found
petitioners liable to respondent for damages. Moreover, it enjoined the petitioners from using
"ZYNAPS" and ordered all materials related to it be disposed outside the channel of commerce
or destroyed without compensation.28
Respondent moved to dismiss the present petition in view of the December 2, 2011 RTC
Decision which functions as a full adjudication on the merits of the main issue of trademark
infringement. Respondent contended that the present petition is moot and academic, it only
involving an ancillary writ.29
Petitioners, on the other hand, opposed the motion to dismiss arguing that the December 2,
2011 RTC Decision had not yet attained finality, thus, the present petition had not yet been
rendered moot.
The two issues which need to be addressed are:
1) Whether the decision on the merits rendered the issues in this case moot and academic?
and
2) Whether the CA may order a permanent injunction in deciding a petition
for certiorari against the denial of an application for a preliminary injunction issued by the RTC?
We hold that the issues raised in the instant petition have been rendered moot and academic
82
given the RTC's December 2, 2011 Decision on the merits of the case.
Rule 58 of the Rules of Court provides for both preliminary and permanent injunction. Section
1, Rule 58 provides for the definition of preliminary injunction:
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. (Emphasis supplied)
On the other hand, Section 9 of the same Rule defines a permanent injunction in this wise:
SEC. 9. When final injunction granted. If after the trial of the action it
appears that the applicant is entitled to have the act or acts complained of
permanently enjoined, the court shall grant a final injunction perpetually
restraining the party or person enjoined from the commission or
continuance of the act or acts or confirming the preliminary mandatory
injunction. (Emphasis supplied)
A writ of preliminary injunction is generally based solely on initial and incomplete
evidence.30 The evidence submitted during the hearing on an application for a writ of
preliminary injunction is not conclusive or complete for only a sampling is needed to give the
trial court an idea of the justification for the preliminary injunction pending the decision of the
case on the merits.31 As such, the findings of fact and opinion of a court when issuing the writ
of preliminary injunction are interlocutory in nature and made even before the trial on the
merits is commenced or terminated.32
By contrast a permanent injunction, based on Section 9, Rule 58 of the Rules of Court, forms
part of the judgment on the merits and it can only be properly ordered only on final judgment.
A permanent injunction may thus be granted after a trial or hearing on the merits of the case
and a decree granting or refusing an injunction should not be entered until after a hearing on
the merits where a verified answer containing denials is filed or where no answer is required,
or a rule to show cause is equivalent to an answer.33
As such a preliminary injunction, like any preliminary writ and any interlocutory order, cannot
survive the main case of which it is an incident; because an ancillary writ of preliminary
injunction loses its force and effect after the decision in the main petition.34
In Casilan v. Ybaez,35 this Court stated:
As things stand now, this Court can no longer interfere with the preliminary
injunctions issued by the Leyte court in its cases Nos. 2985 and 2990,
because such preliminary writs have already been vacated, being
superseded and replaced by the permanent injunction ordered in the
decision on the merits rendered on 21 March 1962. And as to the
permanent injunction, no action can be taken thereon without reviewing
the judgment on the merits, such injunction being but a consequence of
the pronouncement that the credits of Tiongson and Montilla are entitled
to priority over that of Casilan. Since the court below had the power and
right to determine such question of preference, its judgment is not
without, nor in excess of, jurisdiction; and even assuming that its findings
are not correct, they would, at most, constitute errors of law, and not
abuses of discretion, correctible bycertiorari . The obvious remedy for
petitioner Casilan was a timely appeal from the judgment on the
merits to the Court of Appeals, the amount involved being less than
P200,000. But the judgment has become final and unappealable and can
not be set aside through certiorari proceedings. (Emphasis supplied)
Here, this Court is being asked to determine whether the CA erred by issuing a permanent
injunction in a case which questioned the propriety of the denial of an ancillary writ. But with
the RTC's December 2, 2011 Decision on the case for "Injunction, Trademark Infringement,
Damages and Destruction," the issues raised in the instant petition have been rendered moot
and academic. We note that the case brought to the CA on a petition for certiorari merely
involved the RTC's denial of respondent's application for a writ of preliminary injunction, a
mere ancillary writ. Since a decision on the merits has already been rendered and which
includes in its disposition a permanent injunction, the proper remedy is an appeal36 from the
decision in the main case.
WHEREFORE, in light of all the foregoing, the petition is hereby DENIED for being moot and
academic.
SO ORDERED.
83
EN BANC
G.R. No. 222702, April 05, 2016
RAPPLER, INC., Petitioner, v. ANDRES D. BAUTISTA, Respondent.
RESOLUTION
CARPIO, J.:
Petitioner Rappler, Inc. (petitioner) filed a petition for certiorari and prohibition against Andres
D. Bautista (respondent), in his capacity as Chairman of the Commission on Elections
(COMELEC). The petition seeks to nullify Part VI (C), paragraph 19 and Part VI (D), paragraph 20
of the Memorandum of Agreement (MOA) on the 2016 presidential and vice-presidential
debates, for being executed without or in excess of jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction and for violating the fundamental rights
of petitioner protected under the Constitution. The MOA, signed on 13 January 2016, was
executed by the COMELEC through its Chairman, respondent Bautista, and the Kapisanan ng
mga Brodkaster ng Pilipinas (KBP), and the various media networks, namely: ABS-CBN
Corporation, GMA Network, Inc., Nine Media Corporation, TV5 Network, Inc., Philstar Daily,
Inc., Philippine Daily Inquirer, Inc., Manila Bulletin Publishing Corporation, Philippine Business
Daily Mirror Publishing, Inc., and petitioner. Under the MOA, the KBP was designated as
Debate Coordinator while ABS-CBN, GMA, Nine Media, and TV5, together with their respective
print media partners were designated as Lead Networks.
Petitioner alleged that on 21 September 2015, respondent called for a meeting with various
media outlets to discuss the "PiliPinas 2016 Debates," for presidential and vice-presidential
candidates, which the COMELEC was organizing.1 Respondent showed a presentation
explaining the framework of the debates, in which there will be three presidential debates and
one vice presidential debate. Respondent proposed that petitioner and Google, Inc. be in
charge of online and social media engagement. Respondent announced during the meeting
that KBP will coordinate with all media entities regarding the organization and conduct of the
debates.
On 22 September 2015, petitioner sent a proposed draft for broadcast pool guidelines to
COMELEC and the KBP. A broadcast pool has a common audio and video feed of the debates,
and the cost will be apportioned among those needing access to the same. KBP informed
petitioner that the proposal will be discussed in the next meeting.
On 19 October 2015, another meeting was held at the COMELEC office to discuss a draft MOA
on the debates. In the draft, petitioner and Google's participation were dropped in favor of the
online outlets owned by the Lead Networks. After the meeting, the representatives of the Lead
Networks drew lots to determine who will host each leg of the debates. GMA and its partner
Philippine Daily Inquirer sponsored the first presidential debate in Mindanao on 21 February
2016; TV5, Philippine Star, and Businessworld sponsored the second phase of presidential
debate in the Visayas on 20 March 2016; ABS-CBN and Manila Bulletin will sponsor the
presidential debate to be held in Luzon on 24 April 2016; and the lone vice-presidential debate
will be sponsored by CNN, Business Mirror, and petitioner on 10 April 2016. Petitioner alleged
that the draft MOA permitted online streaming, provided proper attribution is given the Lead
Network.
On 12 January 2016, petitioner was informed that the MOA signing was scheduled the
following day. Upon petitioner's request, the draft MOA was emailed to petitioner on the
evening of 12 January 2016. Petitioner communicated with respondent its concerns regarding
certain provisions of the MOA particularly regarding online streaming and the imposition of a
maximum limit of two minutes of debate excerpts for news reporting. Respondent assured
petitioner that its concerns will be addressed afterwards, but it has to sign the MOA because
time was of the essence. On 13 January 2016, petitioner, along with other media networks and
entities, executed the MOA with the KBP and the COMELEC for the conduct of the three
presidential debates and one vice-presidential debate. Petitioner alleged that it made several
communications with respondent and the COMELEC Commissioners regarding its concerns on
some of the MOA provisions, but petitioner received no response. Hence, this petition.
In this petition for certiorari and prohibition, petitioner prays for the Court to render judgment:
a. Declaring null and void, for being unconstitutional, pertinent parts of the
Memorandum of Agreement that violate the rights of the Petitioner,
specifically Part VI (C), paragraph 19 and Part VI (D), paragraph 20 [of the
MOA];
b. Prohibiting the Respondent from implementing specifically Part VI (C),
paragraph 19 and Part VI (D), paragraph 20 of the MOA;
c. Pending resolution of this case, issuing a Preliminary Injunction enjoining
the Respondent from implementing Part VI (C), paragraph 19 and Part VI
(D), paragraph 20 of the MOA; and
d. Pending resolution of this case, issuing a Preliminary Mandatory
Injunction requiring the Respondent to ensure an unimpaired and equal
access to all mass media, online or traditional, to all the Debates.2
Part VI (C), paragraph 19 and Part VI (D), paragraph 20 of the MOA read:
84
 VI
ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS
xxxx
C. ONLINE STREAMING
xxxx
19. Subject to copyright conditions or separate
negotiations with the Lead Networks, allow the debates
they have produced to be shown or streamed on other
websites;
D. NEWS REPORTING AND FAIR USE
20. Allow a maximum of two minutes of excerpt from
the debates they have produced to be used for news
reporting or fair use by other media or entities as
allowed by the copyright law: Provided, that the use of
excerpts longer than two minutes shall be subject to
the consent of the Lead Network concerned;3
Respondent argues that the petition should be dismissed for its procedural defects. In several
cases, this Court has acted liberally and set aside procedural lapses in cases involving
transcendental issues of public interest,4 especially when time constraint is a factor to be
considered, as in this case. As held in GMA Network, Inc. v. Commission on Elections:5
Respondent claims that certiorari and prohibition are not the proper
remedies that petitioners have taken to question the assailed Resolution of
the COMELEC. Technically, respondent may have a point. However,
considering the very important and pivotal issues raised, and the limited
time, such technicality should not deter the Court from having to make the
final and definitive pronouncement that everyone else depends for
enlightenment and guidance. "[T]his Court has in the past seen fit to step in
and resolve petitions despite their being the subject of an improper
remedy, in view of the public importance of the issues raised therein.6
The urgency to resolve this case is apparent considering that the televised debates have
already started and only two of the scheduled four national debates remain to be staged.7 And
considering the importance of the debates in informing the electorate of the positions of the
presidential and vice-presidential candidates on vital issues affecting the nation, this case falls
under the exception laid down in GMA Network, Inc. v. Commission on Elections.
Petitioner is a signatory to the MOA. In fact, the sole vice-presidential debate, to be held in
Manila on 10 April 2016, will be sponsored by CNN Philippines (owned and operated by Nine
Media Corporation) and its partners Business Mirror and petitioner. Petitioner, however, is
alleging that it is being discriminated particularly as regards the MOA provisions on live audio
broadcast via online streaming. Petitioner argues that the MOA grants radio stations the right
to simultaneously broadcast live the audio of the debates, even if the radio stations are not
obliged to perform any obligation under the MOA. Yet, this right to broadcast by live streaming
online the audio of the debates is denied petitioner and other online media entities, which also
have the capacity to live stream the audio of the debates. Petitioner insists that it signed the
MOA believing in good faith the issues it has raised will be resolved by the COMELEC.
The provisions on Live Broadcast and Online Streaming under the MOA read:
VI
ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS
xxxx
B1. LIVE BROADCAST
10. Broadcast the debates produced by the Lead
Networks in their respective television stations and
other news media platforms;
11. Provide a live feed of the debate to other radio
stations, other than those of the Lead Network's, for
simultaneous broadcast;
12. Provide a live feed of the debates produced by
them to radio stations not belonging to any of the Lead
Networks for simultaneous broadcast;
xxxx
C. ONLINE STREAMING
85
 17. Live broadcast the debates produced by the Lead
Networks on their respective web sites and social
media sites for free viewing by the public;
18. Maintain a copy of the debate produced by the
Lead Network on its on-line site(s) for free viewing by
the public during the period of elections or longer;
19. Subject to copyright conditions or separate
negotiations with the Lead Networks, allow the
debates they have produced to be shown or streamed
on other websites;8 (Boldfacing and underscoring
supplied)
Petitioner's demand to exercise the right to live stream the debates is a contractual right of
petitioner under the MOA. Under Part VI (C), paragraph 19 of the MOA, the Lead Networks are
expressly mandated to "allow the debates they have produced to be shown or streamed on
other websites," but "subject to copyright conditions or separate negotiations with the Lead
Networks." The use of the word "or" means that compliance with the "copyright conditions" is
sufficient for petitioner to exercise its right to live stream the debates in its website.
The "copyright conditions" refer to the limitations on copyright as provided under Section
184.1(c) of the Intellectual Property Code (IPC), thus:
SEC. 184. Limitations on Copyright. - 184.1 Notwithstanding the provisions
of Chapter V, the following acts shall not constitute infringement of
copyright:
xxxx
(c) The reproduction or communication to the public by mass media of
articles on current political, social, economic, scientific or religious topic,
lectures, addresses and other works of the same nature, which are
delivered in public if such use is for information purposes and has not
been expressly reserved; Provided, That the source is clearly indicated;
(Sec. 11, P.D. No. 49) (Boldfacing and underscoring supplied)
Under this provision, the debates fall under "addresses and other works of the same nature."
Thus, the copyright conditions for the debates are: (1) the reproduction or communication to
the public by mass media of the debates is for information purposes; (2) the debates have
not been expressly reserved by the Lead Networks (copyright holders); and (3) the source is
clearly indicated.
Condition 1 is complied because the live streaming by petitioner is obviously for information
purposes. Condition 2 is also complied because Part VI (C), paragraph 19 of the MOA
expressly "allow[s] the debates x x x to be shown or streamed on other websites," including
petitioner's website. This means that the "reproduction or communication (of the debates) to
the public by mass media x x x has not been expressly reserved" or withheld. Condition 3 is
complied by clearly indicating and acknowledging that the source of the debates is one or
more of the Lead Networks.
Part VI (C), paragraph 19 of the MOA, which expressly allows the debates produced by the Lead
Networks to be shown or streamed on other websites, clearly means that the Lead Networks
have not "expressly reserved" or withheld the use of the debate audio for online streaming.
In short, the MOA expressly allows the live streaming of the debates subject only to
compliance with the "copyright conditions." Once petitioner complies with the copyright
conditions, petitioner can exercise the right to live stream the audio of the debates as
expressly allowed by the MOA.
Under the MOA, the Lead Networks are mandated to promote the debates for maximum
audience.9The MOA recognizes the public function of the debates and the need for the
widest possible dissemination of the debates. The MOA has not reserved or withheld the
reproduction of the debates to the public but has in fact expressly allowed the reproduction
of the debates "subject to copyright conditions." Thus, petitioner may live stream the debate
in its entirety by complying with the "copyright conditions," including the condition that "the
source is clearly indicated" and that there will be no alteration, which means that the
streaming will include the proprietary graphics used by the Lead Networks. If petitioner opts
for a clean feed without the proprietary graphics used by the Lead Networks, in order for
petitioner to layer its own proprietary graphics and text on the same, then petitioner will have
to negotiate separately with the Lead Networks. Similarly, if petitioner wants to alter the
debate audio by deleting the advertisements, petitioner will also have to negotiate with the
Lead Networks.
Once the conditions imposed under Section 184.1(c) of the IPC are complied with, the
information - in this case the live audio of the debates -now forms part of the public domain.
There is now freedom of the press to report or publicly disseminate the live audio of the
debates. In fact, the MOA recognizes the right of other mass media entities, not parties to the
MOA, to reproduce the debates subject only to the same copyright conditions. The freedom of
the press to report and disseminate the live audio of the debates, subject to compliance with
Section 184.1(c) of the IPC, can no longer be infringed or subject to prior restraint. Such
freedom of the press to report and disseminate the live audio of the debates is now protected
and guaranteed under Section 4, Article III of the Constitution, which provides that "[N]o law
86
shall be passed abridging the freedom x x x of the press."

The presidential and vice-presidential debates are held primarily for the benefit of the
electorate to assist the electorate in making informed choices on election day. Through the
conduct of the national debates among presidential and vice-presidential candidates, the
electorate will have the "opportunity to be informed of the candidates' qualifications and track
record, platforms and programs, and their answers to significant issues of national
concern."10 The political nature of the national debates and the public's interest in the wide
availability of the information for the voters' education certainly justify allowing the debates to
be shown or streamed in other websites for wider dissemination, in accordance with the MOA.

Therefore, the debates should be allowed to be live streamed on other websites, including
petitioner's, as expressly mandated in Part VI (C), paragraph 19 of the MOA. The respondent,
as representative of the COMELEC which provides over-all supervision under the MOA,
including the power to "resolve issues that may arise among the parties involved in the
organization of the debates,"11 should be directed by this Court to implement Part VI (C),
paragraph 19 of the MOA, which allows the debates to be shown or live streamed unaltered on
petitioner's and other websites subject to the copyright condition that the source is clearly
indicated.chanrobleslaw

WHEREFORE, we PARTIALLY GRANT the petition. Respondent Andres D. Bautista, as Chairman

of the COMELEC, is directed to implement Part VI (C), paragraph 19 of the MOA, which allows
the debates to be shown or live streamed unaltered on petitioner's and other websites subject
to the copyright condition that the source is clearly indicated. Due to the time constraint, this
Resolution is immediately executory.

SO ORDERED.cralawla

87
Rapler vs Bautista

FACTS

Rappler, Inc. signed a Memorandum of Agreement (MOA) to sponsor the Presidential and
Vice-Presidential debates. Alleging that it is being discriminated particularly as regards the
MOA provisions on live audio broadcast via online streaming, Rappler argues that the MOA
grants radio stations the right to simultaneously broadcast live the audio of the debates, even
if the radio stations are not obliged to perform any obligation under the MOA. However, the
right to broadcast by online live streaming the audio of the debates is denied to the petitioner
and other online media entities which also have the capacity to live stream the audio of the
debates.

Rappler filed a petition for certiorari and prohibition against COMELEC Chairman Andres
Bautista to nullify MOA provisions on the ground of violating the fundamental rights protected
under the Constitution.

ISSUE: Whether petitioner has the right to live stream the debates

RULING: Yes, Rappler has the right to live stream the debates because the exercise to do so is
its contractual right under the MOA. Under the MOA, as long as it complies with the copyright
conditions for the debates, it can live stream the debates.

The MOA recognizes the right of other mass media entities, not parties to the MOA, to
reproduce the debates subject to the same copyright conditions. The freedom of the press to
report and disseminate the live audio can no longer be infringed or subject to prior restraint.
Such freedom of the press to report and disseminate the live audio of the debates is now
protected and guaranteed under Section 4, Article III of the Constitution, which provides that,
No law shall be passed abridging the freedomof the press.

The petition was partially granted. The COMELEC Chairman was directed to allow the debates
to be shown or live streamed unaltered on the petitioners website subject to the copyright
condition that the source is clearly indicated.

88