8/3/2019 Levis Strauss v.

Clinton Apparelle

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 owner’s 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 respondent’s
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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RECENT JURISPRUDENCE – MERCANTILE LAW

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 toinprotectesse or enforce contingent, abstract, or future

rights; it will not issue o protect a right not 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 owner’s 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
Apparelle’s 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 owner’s consent of a portion of a trademark registered in its entirety constitutes
material or substantial invasion of the owner’s 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’
trademark—the feature that prevails or is retained in the minds of the public—an imitation of which
creates the likelihood of deceiving the public and constitutes trademark

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RECENT JURISPRUDENCE – MERCANTILE LAW

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.

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