RECENT JURISPRUDENCE MERCANTILE LAW

LEVIS STRAUSS & CO. and LEVI STRAUSS PHILIPPINE INC. v. CLINTON APPARELLE, INC. GR. No. 138900, 20 September 2005, Second Division (Tinga, J.)
The petitioners anchor their legal right to the trademark on the Certificate of Registration as well as under RA No. 8293 Section 147.1. This grants the owner of the registered mark the exclusive right to prevent all third parties not having the owners consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered if such use results in a likelihood of confusion. This case arose from the Complaint for Trademark Infringement, Injunction and Damages filed by petitioners LEVIS STRAUSS & CO. and LEVI STRAUSS PHILIPPINE INC. (LSPI) against respondent Clinton Apparelle, Inc. together with an alternative defendant, Olympian Garments, Inc., before the RTC of Quezon City. The Complaint alleged that LS & Co., a foreign corporation duly organized and existing under the laws of the State of Delaware, USA, and engaged in the apparel business, is the owner by prior adoption and use since 1986 of the internationally famous Dockers and Design trademark. The Dockers and Design trademark was first used in the Philippines in or about May 1988, by LSPI, a domestic corporation engaged in the manufacture, sale and distribution of various products bearing trademarks owned by LS & Co. LS & Co. and LSPI further alleged that they discovered the presence in the local market of jeans under the brand name Paddocks using a device which is substantially, if not exactly, similar to the Dockers and Design trademark without LS & Co.s consent. The petitioners prayed for a TRO and writ of preliminary injunctions which the court granted after the respondent failed to appear despite notice. Clinton Apparelle filed a Motion to Dismiss and Motion for Reconsideration in an Omnibus Order but this was denied for lack of merit. Thus, Clinton Apparelle filed with the Court of Appeals a Petition for certiorari, prohibition and mandamus with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction, assailing the orders of the trial court. The Court of Appeals ruled in favor of the respondent and held that the trial court did not follow the procedure required by law for the issuance of a temporary restraining order, as Clinton Apparelle was not duly notified of the date of the summary hearing for its issuance. Thus, the Court of Appeals ruled that the TRO had been improperly issued. The appellate court also held that such issuance is questionable for the petitioners failed to sufficiently establish their material and substantial right to have the writ issued. In addition, the Court of Appeals strongly believed that the implementation of the questioned writ would effectively shut down the respondents business, which in its opinion should not be sanctioned. Hence, this petition. ISSUES: 1. Whether or not the issuance of the writ of preliminary injunction by the trial court was proper 2. Whether or not the CA erred in setting aside the orders of the trial court HELD: Petition is denied.

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Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an order granted at any stage of an action prior to the judgment or final order requiring a party or a court, agency or a person to refrain from a particular act or acts. Injunction is accepted as the strong arm of equity or a transcendent remedy to be used cautiously as it affects the respective rights of the parties, and only upon full conviction on the part of the court of its extreme necessity. An extraordinary remedy, injunction is designed to preserve or maintain the status quo of things and is generally availed of to prevent actual or threatened acts until the merits of the case can be heard. It may be resorted to only by a litigant for the preservation or protection of his rights or interests and for no other purpose during the pendency of the principal action. It is resorted to only when there is a pressing necessity to avoid injurious consequences, which cannot be remedied under any standard compensation. The resolution of an application for a writ of preliminary injunction rests upon the existence of an emergency or of a special recourse before the main case can be heard in due course of proceedings. The grounds for the issuance of preliminary injunction under Section 3, Rule 58, of the Rules of Court provide that a clear and positive right especially calling for judicial protection must be shown. Injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will not issue to protect a right not in esse and which may never arise, or to restrain an act which does not give rise to a cause of action. There must exist an actual right. There must be a patent showing by the complaint that there exists a right to be protected and that the acts against which the writ is to be directed are violative of said right. In this case, the court finds scant justification for the issuance of the writ of preliminary injunction. The petitioners anchor their legal right to the Dockers and Design trademark on the Certificate of Registration issued in their favor by the Bureau of Patents, Trademarks and Technology Transfer, as well as under Republic Act No. 8293 Section 147.1. This grants the owner of the registered mark the exclusive right to prevent all third parties not having the owners consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered if such use results in a likelihood of confusion. However, attention should be given to the fact that the petitioners registered trademark consists of two elements: (1) the word mark Dockers and (2) the wing-shaped design or logo. Notably, there is only one registration for both features of the trademark giving the impression that the two should be considered as a single unit. Clinton Apparelles trademark, on the other hand, uses the Paddocks word mark on top of a logo which according to the petitioners is a slavish imitation of the Dockers design. The two trademarks apparently differ in their word marks (Dockers and Paddocks), but again according to the petitioners, they employ similar or identical logos. It could thus be said that the respondent only appropriates the petitioners logo and not the word mark Dockers; it uses only a portion of the registered trademark and not the whole. Given the single registration of the trademark Dockers and Design and considering that the respondent only uses the assailed device but a different word mark, the right to prevent the latter from using the challenged Paddocks device is far from clear. It is also unclear whether the use without the owners consent of a portion of a trademark registered in its entirety constitutes material or substantial invasion of the owners right. It is likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the dominant or central feature of the petitioners trademarkthe feature that prevails or is retained in the minds of the publican imitation of which creates the likelihood of deceiving the public and constitutes trademark

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infringement. In sum, there are vital matters, which have yet and may only be established through a full-blown trial. The Court finds that the petitioners right to injunctive relief has not been clearly and unmistakably demonstrated. The right has yet to be determined. The petitioners also failed to show proof that there is material and substantial invasion of their right to warrant the issuance of an injunctive writ. Neither were they able to show any urgent and permanent necessity for the writ to prevent serious damage. The fact that the petitioners had suffered or continue to suffer may be compensated in terms of monetary consideration. The issued injunctive writ, if allowed, would dispose of the case on the merits as it would effectively enjoin the use of the Paddocks device without proof that there is basis for such action. The prevailing rule is that courts should avoid issuing a writ of preliminary injunction that would in effect dispose of the main case without trial. There would be a prejudgment of the main case and a reversal of the rule on the burden of proof since it would assume the proposition which the petitioners are inceptively bound to prove.