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246 Corp. (Rolex Music Lounge) v. Hon. Reynaldo B. the court.

Daway (RTC-QC, Branch 90), Montres Rolex S.A., and
2. If YES, whether the trial court gravely abused its
Rolex Centre Phil. Limited
discretion. NO
20 November 2003; Yñares-Santiago, J.
3. Whether there was GAD in quashing the
Digest prepared by Jethro Koon subpoena ad testificandum. NO, considering #2

I. Facts III. Holding

1. Nov. 26, 1998, respondents, owners/proprietors Petition denied. CA affirmed.
of Rolex and Crown Device, filed against 246
IV. Ratio
Corp. this suit for trademark infringement and
damages with prayer for the issuance of a 1. Under the 1997 Rules of Civil Procedure2. Rule
restraining order or writ of prel. injunction before 16, Section 6 provides that a grant of a
RTC-QC. preliminary hearing rests on the sound discretion
of the court, to wit –
Sometime in July 1996, 246 Corp.
adopted and, since then, has been using SEC. 6. Pleading grounds as
without authority the mark "Rolex" in its affirmative defenses.— If no motion to
business name as well as in its dismiss has been filed, any of the
newspaper advertisements as "Rolex grounds for dismissal provided for in this
Music Lounge, KTV, Disco & Party Rule may be pleaded as an affirmative
Club." defense in the answer and, in the
discretion of the court, a preliminary
2. 246 argued that Rolex has no cause of action
hearing may be had thereon as if a
because no trademark infringement exist; that no
motion to dismiss had been filed.
confusion would arise from the use considering
that its entertainment business is totally 2. CA did not err in finding that the RTC did not
unrelated to the items catered by Rolex. It also commit GAD. The issue of whether trademark
contended that Atty. Alonzo Ancheta, the counsel infringement exists is a question of fact that could
of record of Rolex who signed the verification best be determined by the trial court.
and certification, was not authorized to represent
3. Under the old Trademark Law where the goods
them.
for which the identical marks are used are
3. July 21, 2000, 246 filed a motion for preliminary unrelated, there can be no likelihood of confusion
hearing on its affirmative defenses. and there is therefore no infringement in the use
Subsequently, on their motion, the trial court by the junior user of the registered mark on the
issued a subpoena ad testificandum requiring entirely different goods. This ruling, however, has
Atty. Ancheta to appear at the preliminary been to some extent, modified by Section
hearing. Rolex, in the meantime, filed a 123.1(f) of the IP Code.3
Comment and Opposition to the motion for
4. Citing AGPALO: A junior user of a well-known
preliminary hearing and a motion to quash the
mark on goods or services dissimilar to the
subpoena ad testificandum. RTC quashed both.
goods or services (therefore unrelated to those
246 filed an MR with the RTC (denied), and
specified in the cert. of registration) is precluded
certiorari and MR with the CA (both denied).
from using the same on the entirely unrelated
They filed this R45.
goods or services, subject to the following
II. Issues
2 The decision also cited the old ROC—same rule by using “may”
1. Whether the trial court denied not only the motion in describing whether a court should grant the motion, even if
the 1997 Rules took effect on July 1, 1997 or before the case
for preliminary hearing on its affirmative defenses was filed.
but its motion to dismiss as well. YES/BOTH.1 3 Sec. 123. Registrability. – 123.1. A mark cannot be registered if
Moreover, it is presumed that all matters within it: (f) Is identical with, or confusingly similar to, or constitutes a
translation of a mark considered well-known in accordance with
an issue raised in a case were passed upon by the preceding paragraph, which is registered in the Philippines
with respect to goods or services which are not similar to those
with respect to which registration is applied for: Provided, That
1 “IN VIEW OF THE FOREGOING, the aforecited Motion To use of the mark in relation to those goods or services would
Quash Subpoena Ad Testificandum is granted; and the indicate a connection between those goods or services, and the
aforecited Motion For Preliminary Hearing On Defendant’s owner of the registered mark: Provided, further, That the
Affirmative Defenses With Motion To dismiss The Instant interest of the owner of the registered mark are likely to be
Complaint Based On Said Affirmative Defenses is denied.” damaged by such use

1(f) is clearly in point because the (h) the exclusivity of Music Lounge of is entirely unrelated to Rolex. the goods or services and duration. used in the world. or if the registration attained by interests of the registrant of the mark in the world. Service Marks. Section 123. The interests of the owner the mark. including is a well-known mark. Trade Names and Marked or (k) the outcome of Stamped Containers. The use of the well-known fairs or exhibitions. and thereof may be taken into account: (l) the presence of absence of identical or (a) the duration. of the well-known mark are likely to be damaged. of the well known mark. the well-known mark will be damaged because of the (g) the extent to which inferior quality of the good or the mark has been services of the user. registrant and the user of the mark. 5. in litigations dealing with determining whether a mark is the issue of whether well known. the following the mark is a well- criteria or any combination known mark. The mark is well-known mark in the world. such unrelated goods or services and those goods or (b) the market share in services specified in the the Philippines and in certificate of registration in the other countries. if the registrant will the mark has been be precluded from expanding registered in the world. the rights in the mark. extent and owned by persons geographical area of other than the person any promotion of the claiming that his mark mark. advertising or publicity and presentation. its business to those unrelated (f) the exclusivity of the good or services. on identical or similar in particular. For (e) the extent to which instance. origin or business or some (c) the degree of the business connection or inherent or acquired relationship between the distinction of the mark. (d) the quality-image or reputation acquired by 3. This goods and/or services requirement refers to the to which the mark likelihood of confusion of applies. extent similar marks validly and geographical area registered for or used of any use of the mark. However. internationally and in the Philippines.requisites. Under Rule 102 of (j) the record of the Rules and Regulations on successful protection of Trademarks. of mark on the entirely unrelated the goods and/or goods or services would services to which the indicate a connection between mark applies. at 2. use attained by the mark in the world. the Court cannot yet resolve the . to wit: (i) the commercial value attributed to the 1.

merits of the present controversy considering should be addressed in a full blown hearing that the requisites for the application of and not on a mere preliminary hearing. court. The existence or absence of these .1(f) clearly require determination Rolex must be given ample opportunity to facts of which need to be resolved at the trial prove its claim. Section 123. and 247 to debunk the same.