Case # 9

SAMSON V. DAWAY AND CATERPILLAR, INC.

G.R. NO. 160054-55, July 21, 2004

YNARES-SANTIAGO,J.:

FACTS:
Two informations for unfair competition were filed against Samson, the registered owner
of ITTI shoes. The infomations state that Samson did then and there willfully, unlawfully
and feloniously distribute, sell and/or offer for sale CATERPILLAR products such as
footwear, garments, clothing, bags, accessories and paraphernalia which are closely
identical to and/or colorable imitations of the authentic Caterpillar products and likewise
using trademarks, symbols and/or designs as would cause confusion, mistake or
deception on the part of the buying public to the damage and prejudice of
CATERPILLAR, INC., the prior adopter, user and owner of the following internationally:
“CATERPILLAR,” “CAT,” “CATERPILLAR & DESIGN,” “CAT AND DESIGN,” “WALKING
MACHINES” and “TRACK-TYPE TRACTOR & DESIGN.”

Samson filed a motion to suspend the arraignment and other proceedings in view of the
existence of an alleged prejudicial question involving a civil case for unfair competition
pending with the same branch, and also in view of the pendency of a petition for review
filed with the Secretary of Justice assailing the Chief State Prosecutor’s resolution
finding probable cause to charge petitioner with unfair competition.

The TC judge denied the motion and arraignment ensued. Thereafter, Samson filed a
motion to quash the informations contending that since under Section 170 of R.A. No.
8293, the penalty of imprisonment for unfair competition does not exceed six years, the
offense is cognizable by the Municipal Trial Courts and not by the Regional Trial Court,
per R.A. No. 7691. The TC judge denied the motion. Hence, this petition for certiorari.

ISSUE/S:
1. Which court has jurisdiction over criminal and civil cases for violation of intellectual
property rights?
2. Did the TC judge commit grave abuse of discretion when he refused to suspend the
proceedings on the ground of existence of prejudicial question and a pending petition
for review before the Sec. of Justice on the finding of probable cause for unfair
competition?

RULING:
1. RTC. Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the
criminal penalty for infringement of registered marks, unfair competition, false
designation of origin and false description or representation, is imprisonment from 2 to 5
years and a fine ranging from Fifty Thousand Pesos to Two Hundred Thousand Pesos.
Corollarily, Section 163 of the same Code states that actions (including criminal and
civil) under Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the
proper courts with appropriate jurisdiction under existing laws.
The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The
Trademark Law) which provides that jurisdiction over cases for infringement of
registered marks, unfair competition, false designation of origin and false description or
representation, is lodged with the CFI (now RTC). We find no merit in the claim of
Samson that R.A. No. 166 was expressly repealed by R.A. No. 8293. The use of the
phrases “parts of Acts” and “inconsistent herewith” only means that the repeal pertains
only to provisions which are repugnant or not susceptible of harmonization with R.A. No.
8293.7 Section 27 of R.A. No. 166, however, is consistent and in harmony with Section
163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over violations of
intellectual property rights with the Metropolitan Trial Courts, it would have expressly
stated so under Section 163 thereof.

Moreover, the settled rule in statutory construction is that in case of conflict between a
general law and a special law, the latter must prevail. Jurisdiction conferred by a special
law to Regional Trial Courts must prevail over that granted by a general law to Municipal
Trial Courts. In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws
conferring jurisdiction over violations of intellectual property rights to the Regional Trial
Court. They should therefore prevail over R.A. No. 7691, which is a general law. Hence,
jurisdiction over the instant criminal case for unfair competition is properly lodged with
the Regional Trial Court even if the penalty therefor is imprisonment of less than 6
years, or from 2 to 5 years and a fine ranging from P50,000.00 to P200,000.00.

In fact, to implement and ensure the speedy disposition of cases involving violations of
intellectual property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC
dated February 19, 2002 designating certain Regional Trial Courts as Intellectual
Property Courts. On June 17, 2003, the Court further issued a Resolution consolidating
jurisdiction to hear and decide Intellectual Property Code and Securities and Exchange
Commission cases in specific Regional Trial Courts designated as Special Commercial
Courts.

2. NO. Samson failed to substantiate his claim that there was a prejudicial question. He
made no discussion in support of said prayer in his petition and reply to comment.
Neither did he attach a copy of the complaint in Civil Case nor quote the pertinent
portion thereof to prove the existence of a prejudicial question. At any rate, there is no
prejudicial question if the civil and the criminal action can, according to law, proceed
independently of each other.

In the case at bar, the common element in the acts constituting unfair competition under
Section 168 of R.A. No. 8293 is fraud. Pursuant to Article 33 of the Civil Code, in cases
of defamation, fraud, and physical injuries, a civil action for damages, entirely separate
and distinct from the criminal action, may be brought by the injured party. Hence, Civil
Case No. Q-00-41446, which as admitted by Caterpilar also relate to unfair competition,
is an independent civil action under Article 33 of the Civil Code. As such, it will not
operate as a prejudicial question that will justify the suspension of the criminal cases at
bar.
While the pendency of a petition for review is a ground for suspension of the
arraignment, the aforecited provision limits the deferment of the arraignment to a period
of 60 days reckoned from the filing of the petition with the reviewing office. It follows,
therefore, that after the expiration of said period, the trial court is bound to arraign the
accused or to deny the motion to defer arraignment.

In the instant case, Samson failed to establish that respondent Judge abused his
discretion in denying his motion to suspend. His pleadings and annexes submitted
before the Court do not show the date of filing of the petition for review with the
Secretary of Justice.15Moreover, the Order dated August 9, 2002 denying his motion to
suspend was not appended to the petition. He thus failed to discharge the burden of
proving that he was entitled to a suspension of his arraignment and that the questioned
orders are contrary to Section 11 (c), Rule 116 of the Revised Rules on Criminal
Procedure. Indeed, the age-old but familiar rule is that he who alleges must prove his
allegations.

Case # 10
EMERALD GARMENT vs. THE H.D. LEE COMPANY
G.R. No. 210693, June 7, 2017

Reyes, J.:

Facts:
This is a Petition for Review on Certiorari 1 filed by Emerald Garment Manufacturing
Corporation (Emerald) against The H.D. Lee Company, Inc. (H.D. Lee) to assail the
Decision 2 and Resolution 3 of the Court of Appeals (CA), dated April 8, 2013 and
January 6, 2014, respectively. The CA reversed the Decision of the Intellectual Property
Office's (IPO) then Director General Ricardo R. Blancaflor (DG Blancaflor) in Inter
Partes Case, approving H.D. Lee's application for registration of the trademark "LEE &
OGIVE CURVE DESIGN."

H.D. Lee filed before the IPO an application for the registration of the trademark, "LEE &
OGIVE CURVE DESIGN" and claimed that the said mark was first used in the
Philippines. Relative thereto, on outer clothing categorized under Class 25, which
includes jeans, casual pants, trousers, slacks, shorts, jackets, vests, shirts, blouses,
sweaters, tops, skirts, jumpers, caps, hats, socks, shoes, suspenders, belts and
bandannas, was filed. Within three years from the filing of the application, H.D. Lee
submitted to the IPO a Declaration of Actual Use of the mark. 5 H.D. Lee's application
was published in the Intellectual Property Philippines' Electronic Gazette for
Trademarks, which was belatedly released on January 5, 2007. 6 Emerald opposed
argued that the approval of the application will violate the exclusive use of its marks,
"DOUBLE REVERSIBLE WA VE LINE," and "DOUBLE CURVE LINES," which it has
been using on a line of clothing apparel since October 1, 1973 7 and 1980, respectively.
DG Blancaflor rendered a Decision reversing the findings of Atty. Abelardo based on the
grounds cited as follows:
That H.D. Lee has established by substantial evidence that it is the owner of LEE &
OGIVECURVE DESIGN.

That Emerald has trademark applications and/or registrations in the Philippines on

marks similar to [H.D. Lee] and which were filed and/or registered earlier than H.D.
Lee's trademark application is not sufficient to overcome the pieces of evidence proving
H.D. Lee's ownership of LEE & OGIVE CURVE DESIGN. c. H.D. Lee has shown that
LEE & OGIVE CURVE DESIGN is a well-known mark.

Furthermore, there is nothing in the records which explained how [Emerald] came to
use a highly distinctive sign such as a "Back Pocket Design" or the "Double Curve
Lines" which are identical or confusingly similar to the well-known mark LEE & OGIVE
CURVE DESIGN. The absence of any explanation on how Emerald conceived these
marks gives credence to the position that H.D. Lee is the owner and creator of LEE &
OGIVE CURVE DESIGN and is, therefore, entitled to the registration of this mark.

Emerald filed a petition for review under Rule 43 of the Rules of Court, which the CA
denied in the herein assailed decision which ruled that H.D. Lee substantially complied
with the procedural requirements in filing before the IPO a petition for registration of the
mark "LEE & OGIVE CURVE DESIGN." Hence, the petition.

Issue:

Whether or not the EMERALD GARMENT MANUFACTURING CORPORATION has the

rights over the registration of the marks "DOUBLE CURVE LINES' and "DOUBLE
REVERSIBLE WAVE LINE' as against H.D. Lee's "OGIVE CURVE DESIGN."

Ruling:
The instant petition is impressed with merit. The reason for this is that litigation must
end and terminate sometime and somewhere, and it is essential to an effective and
efficient administration of justice that, once a judgment has become final, the winning
party be not deprived of the fruits of the verdict. Courts must guard against any scheme
calculated to bring about that result and must frown upon any attempt to prolong the
controversies. The Court also emphatically instructs anent the concept and application
of res judicata, viz.:"a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all
points and matters determined in the former suit." The elements for res judicata to apply
are as follows: (a) the former judgment was final; (b) the court that rendered it had
jurisdiction over the subject matter and the parties; (c) the judgment was based on the
merits; and (d) between the first and the second actions, there was an identity of
parties, subject matters, and causes of action.
H.D. Lee argues that the principle of conclusiveness of judgment does not apply since
no identity of issue exists between the instant petition, on one hand, and G.R. No.
195415, on the other. The Court finds the foregoing untenable as the issues all point to
the registrability of the confusingly similar marks "DOUBLE CURVE LINES," "DOUBLE
REVERSIBLE WAVE LINE," and "OGIVE CURVE DESIGN." Further, H.D. Lee's claim
that the instant petition involves the mark "LEE & OGIVE CURVE DESIGN' and not
"OGIVE CURVE DESIGN' is specious and a clear attempt to engage into hair-splitting
distinctions. A thorough examination of the pleadings submitted by H.D. Lee itself shows
that indeed, the focus is the "OGIVE CURVE DESIGN," which remains to be the
dominant feature of the mark sought to be registered.

The Court needs to stress that in G.R. No. 195415 and Inter Partes Case No. 3498
before the IPO, Emerald had already established with finality its rights over the
registration of the marks "DOUBLE CURVE LINES' and "DOUBLE REVERSIBLE WAVE
LINE' as against H.D. Lee's "OGIVE CURVE DESIGN."

Case # 11
COCA BOTTLERS VS. GOMEZ
GR NO. 154491, NOVEMBER 14, 2008

BRION, J.:

Facts:
CCBPI, the petitioner applied for a search warrant against Pepsi Cola Product
Philippines, Inc. (PCPPI) for allegedly hoarding empty bottles of Coke bottles which
same act is punishable under IP Code, and further claimed that the empty bottles be
confiscated. Following the search warrant, the police seized and brought to MTC 2,464
Litro and 4,036 of 12 oz. of empty Coke bottles.

The petitioner after seizing the bottles, filed with the Office of the City Prosecutor of
Naga complaint against two Pepsi Officers, namely Garcia and Gomez, for violation of
Sec. 168.3 (c) in relation to Sec. 170 of the IP Code.

The respondents counter-claim was, as represented by Galicia and Gomez, that the
bottles came from the various Pepsi retailers and wholesalers who included them in
their return to make-up for their shortages of empty Pepsi bottles. They also have no
way of ascertaining before hand the return of empty coke bottles as they simply
received what had been delivered; the presence of the bottles in their yard was not
intentional nor deliberate. The respondent also filed motions for the return of the seized
bottles and quash the search warrant for the warrant itself existed no probable cause to
justify the issuance.

The petition was denied both by the MTC and the RTC. Bypassing the CA, the
petitioner files a petition for review on certiorari under Rule 45 of the Rules of Court to
reverse the decision of the RTC.
Issues:

Is the hoarding of a competitor's product containers punishable as unfair competition

under the Intellectual Property Code (IP Code, Republic Act No. 8293) that would entitle
the aggrieved party to a search warrant against the hoarder?

Ruling:

In the context of the present case, the question is whether the act charged - alleged to
be hoarding of empty Coke bottles - constitutes an offense under Section 168.3 (c) of
the IP Code.

SECTION 168. Unfair Competition, Rights, Regulation and Remedies.

168.1. A person who has identified in the mind of the public the goods he manufactures
or deals in, his business or services from those of others, whether or not a registered
mark is employed, has a property right in the goodwill of the said goods, business or
services so... identified, which will be protected in the same manner as other property
rights.

168.2. Any person who shall employ deception or any other means contrary to good
faith by which he shall pass 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, shall be guilty of unfair
competition, and shall be subject to an action therefor.

The petitioner theorizes that the above section does not limit the scope of protection on
the particular acts enumerated as it expands the meaning of unfair competition to
include "other acts contrary to good faith of a nature calculated to discredit the goods,
business or... services of another." Allegedly, the respondents' hoarding of Coca Cola
empty bottles is one such act.

We do not agree with the petitioner's expansive interpretation of Section 168.3 (c).

What unfair competition is, is further particularized under Section 168.3 when it provides
specifics of what unfair competition is "without in any way limiting the scope of
protection against unfair competition." Part of these particulars is provided under
Section 168.3(c)... which provides the general "catch-all" phrase that the petitioner cites.
Under this phrase, a person shall be guilty of unfair competition "who shall commit any
other act contrary to good faith of a nature calculated to discredit the goods, business or
services of... another."

The critical question, however, is not the intrinsic unfairness of the act of hoarding; what
is... critical for purposes of Section 168.3 (c) is to determine if the hoarding, as charged,
"is of a nature calculated to discredit the goods, business or services" of the petitioner.
Under all the above approaches, we conclude that the "hoarding" - as defined and
charged by the petitioner - does not fall within the coverage of the IP Code and of
Section 168 in particular. It does not relate to any patent, trademark, trade name or
service mark that the... respondents have invaded, intruded into or used without proper
authority from the petitioner.

In this light, hoarding for purposes of destruction is closer to what another law - R.A. No.
623

If it serves any purpose at all in our discussions, it is to show that the underlying factual
situation of the present case is in fact covered by another law, not by the IP Code that
the petitioner cites.

Viewed in this light, the lack of probable cause to support the disputed search warrant at
once becomes apparent.

Principles:

Articles 168.1 and 168.2, as quoted above, provide the concept and general rule on the
definition of unfair competition. The law does not thereby cover every unfair act
committed in the course of business; it covers only acts characterized by "deception or...
any other means contrary to good faith" in the passing off of goods and services as
those of another who has established goodwill in relation with these goods or services,
or any other act calculated to produce the same result.

Case # 12
MIGHTY CORP. vs. E&J GALLO
G.R. NO. 154342, July 14, 2004

CORONA, J.:

FACTS:
On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC
(respondents) sued MIGHTY CORPORATION and LA CAMPANA FABRICA DE
TABACO, INC. (petitioners) in the RTC-Makati for trademark and trade name
infringement and unfair competition, with a prayer for damages and preliminary
injunction.

They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winery’s and
Gallo and Ernest & Julio Gallo trademark’s established reputation and popularity, thus
causing confusion, deception and mistake on the part of the purchasing public who had
always associated Gallo and Ernest and Julio & Gallo trademarks with Gallo Winery’s
wines.
In their answer, petitioners alleged, among other affirmative defenses that: petitioners
Gallo cigarettes and Gallo Winery’s wine were totally unrelated products. To wit:

1. Gallo Winery’s GALLO trademark registration certificates covered wines only, and not
cigarettes;
2. GALLO cigarettes and GALLO wines were sold through different channels of trade;
3. the target market of Gallo Winery’s wines was the middle or high-income bracket
while Gallo cigarette buyers were farmers, fishermen, laborers and other low-income
workers;
4. that the dominant feature of the Gallo cigarette was the rooster device with the
manufacturer’s name clearly indicated as MIGHTY CORPORATION, while in the case
of Gallo Winery’s wines, it was the full names of the founders-owners ERNEST & JULIO
GALLO or just their surname GALLO;

The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a writ
of preliminary injunction. CA likewise dismissed respondent’s petition for review on
certiorari.

After the trial on the merits, however, the Makati RTC held petitioners liable for
committing trademark infringement and unfair competition with respect to the GALLO
trademark.

On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied
petitioner’s motion for reconsideration.

ISSUE: Whether GALLO cigarettes and GALLO wines were identical, similar or related
goods for the reason alone that they were purportedly forms of vice.

RULING: NO.
Wines and cigarettes are not identical, similar, competing or related goods.

In resolving whether goods are related, several factors come into play:
 the business (and its location) to which the goods belong
 the class of product to which the good belong
 the product’s quality, quantity, or size, including the nature of the package,
wrapper or container
 the nature and cost of the articles
 the descriptive properties, physical attributes or essential characteristics with
reference to their form, composition, texture or quality
 the purpose of the goods
 whether the article is bought for immediate consumption, that is, day-to-day
household items
 the field of manufacture
 the conditions under which the article is usually purchased and
  the articles of the trade through which the goods flow, how they are distributed,
marketed, displayed and sold.

The test of fraudulent simulation is to 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 simulation, in order to be
objectionable, must be 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.

The petitioners are not liable for trademark infringement, unfair competition or damages.