UP Law F2021 146 Conrad and Co. Inc. v.

CA
Administrative Law Primary Jurisdiction or Preliminary 1995 Vitug
Resort

SUMMARY
A cancellation proceeding was pending before the Bureau of Patents, Trademarks and Technology Transfers
(BPTTT) seeking cancellation of registration of Fitrite, Inc.’s (Fitrite) trademark ‘Sunshine’ by Sunshine, Inc.
a US company and principal of Conrad and Co., (Conrad). Fitrite filed an action for injunction with damages
before the RTC. Conrad filed a motion to dismiss, invoking the doctrine of primary jurisdiction and litis
pendentia, among others. RTC favored Conrad and dismissed the case. CA reversed, saying that trial court has
jurisdiction over the action. SC upheld CA, averring that an action for injunction with damages falls squarely
under the jurisdiction of ordinary courts.

FACTS

 April 1982 – Private respondent Fitrite, Inc. (Fitrite) filed with the Bureau of Patents, Trademarks and
Technology Transfers (BPTTT) application for registration of trademark ‘SUNSHINE’ both in
Supplemental and Principal Registers;
 It alleged that since March 1981, it had exclusively used the trademark in the concept of owner on its
biscuits and cookies;
 Their application were approved: (1) on May 20, 1983 for Supplemental Register and (2) on March
20, 1990 for Principal Registers. In both instances, a 20-year Certification were issued to Fitrite;
 June 1990 – they discovered that Conrad and Co., (Conrad), the petitioner, had been importing, selling
and distributing biscuits and cookies, and other food items bearing this trademark in the Philippines;
 It was established that it was only in April 1988 Conrad made its first importation to the Philippines,
and prior to this had never been engaged in the importation, sale and distribution of products similar
to those of Fitrite and Victoria;
 They further alleged that the acts done by Conrad without their consent were designed to mislead and
deceive the buyers, making them believe that Conrad’s Sunshine products came from them to the
damage and prejudice of both the purchasing public and respondents;
 They sent a letter to Conrad for the latter to cease and desist from continuing the said acts, but it was
ignored;
 In 1989 and 1990, cancellation proceedings against Fitrite were filed before the BPTTT by Sunshine
Biscuits, Inc. (SBI), a US-based company with trademark registered in the US for “SUNSHINE
BISCUITS”. SBI granted Conrad distributorship of their products in the Philippines, and it considered
Sunshine as its principal;
 They filed an action for injunction with damages against Conrad with the RTC, availing the remedies
set out in Act No. 1661 §232 and §293 ;
 Conrad filed a motion to dismiss, averring: (1) litis pendentia; (2) the doctrine of primary jurisdiction,
and (3) failure to state a cause of action.
 RTC granted Conrad’s motion to dismiss on the grounds of (1) litis pendentia; (2) the doctrine of
primary jurisdiction. MR was similarly dismissed;
 CTA reversed: (1) Conrad should have filed an ANSWER instead of Motion to Dismiss; (2) no evidence
was adduced for outright dismissal of the case; (3) unless the certifications belonging to Fitrite were
cancelled in resolution of the pending proceeding before the BPTTT, for all intents and purposes, the
trademarks belong to Fitrite and all those acts of importing, selling and distributing by CONRAD
constitute infringement as defined in said §224 of Republic Act No. 166, as amended.

1
An Act to Provide for the Registration and Protection of Trade-marks, Trade-names and Service-marks, Defining Unfair Competition and
False Marking and Providing Remedies Against the Same, and Other Purposes
2
Section title: Actions, and damages and injunction for infringement
3
Section title: Unfair competition, rights and remedies
4
Under Sec. 22, the elements that constitute infringement are simply (1) the use by any person, without the consent of the registrant,
(2) of any registered mark or trade-name in connection with the sale, business or services, among other things, bearing such registered
mark or trade-name.
  CA remanded the case to the RTC and ordered Conrad to file an ANSWER, and to cease and desist from
importing, manufacturing, selling and distributing in the Philippines any goods bearing the trademark
'SUNSHINE & DEVICE LABEL’ which it considered as PI/TRO;
 Conrad now filed this petition for review before the SC.

RATIO

W/N the trial court may proceed with the case filed by the private respondents
Yes.

Conrad’s arguments:
 The pending proceeding before the BPTTT cast a cloud of doubt on private respondents' claim of
ownership and exclusive right to the use of the trademark "Sunshine”.
 BPTTT has primary jurisdiction, because technical matters or intricate issues of fact regarding
the ownership of the trademark in question are involved, its determination requires the
expertise, specialized skills and knowledge of the proper administrative body, which is BPTTT,
which has the primary jurisdiction over the action a quo; and therefore the trial court should, and
as it correctly did, yield its jurisdiction to BPTTT [citing Industrialized Enterprise Inc. v. CA] ;
 Hence, based on the foregoing, an injunctive relief from any court is improper.

CA’s arguments
 The issue is not whether the trademark is transferrable or cancellable, which issue is technical in nature
and requires the expertise, specialized skills and knowledge of BPTTT, since it was already registered
in both the Supplemental and Principal Registers under Fitrite; the issue was whether the acts of
Conrad constitutes infringement under §22 of Act 166. This, clearly, is a factual question that
does not require any specialized skill and knowledge for resolution to justify the exercise of
primary jurisdiction by BPTTT.
 But even assuming that the issue is technical in nature, Industrialized Enterprise Inc. v. CA does not
authorize outright dismissal of a case originally cognizable in the courts; what it says is where primary
jurisdiction comes into play in a case 'the judicial process is suspended pending referral of such issues
to the administrative body for its view.’

SC held:
CA is correct.
It might be mentioned that while an application for the administrative cancellation of a registered
trademark on any of the grounds enumerated in §17 of Act 166, as amended, falls under the exclusive
cognizance of BPTTT, an action, however, for infringement or unfair competition, as well as the
remedy of injunction and relief for damages, is explicitly and unquestionably within the
competence and jurisdiction of ordinary courts.

There is a presumption of validity of the registration and of the registrant's ownership and right to the
exclusive use of the mark. It is precisely such a registration that can serve as the basis for an action for
infringement. An invasion of this right entitles the registrant to court protection and relief under
§§23 and 27. Surely, an application with BPTTT for an administrative cancellation of a registered
trade mark cannot per se have the effect of restraining or preventing the courts from the exercise
of their lawfully conferred jurisdiction. A contrary rule would unduly expand the doctrine of
primary jurisdiction which, simply expressed, would merely behoove regular courts, in
controversies involving specialized disputes, to defer to the findings or resolutions of
administrative tribunals on certain technical matters. This rule, evidently, did not escape the appellate
court for it likewise decreed that for "good cause shown, the lower court, in its sound discretion, may
suspend the action pending outcome of the cancellation proceedings" before BPTTT.

FALLO
WHEREFORE, the petition for review is DENIED for lack of merit, and the questioned amended decision of
the Court of Appeals is AFFIRMED. Costs against petitioner. SO ORDERED.