TANDUAY DISTILLERS, INC. vs. GINEBRA SAN MIGUEL, INC. G.R. No.

164324 August 14, 2009 FACTS Tanduay has been engaged in the liquor business since 1984. In 2002, they developed a new gin product labeled !inebra "apitan#. Tanduay points out that the label and $eatures o$ such were precisely chosen to distinguish it $ro% the leading gin brand in the &hilippine 'ar(et which is !inebra )an 'iguel#. *$ter Tanduay had started selling their %erchandise, !inebra $iled a co%plaint $or trade%ar( in$ringe%ent and un$air co%petition with da%ages against Tanduay. +ith this, a cease and desist order was issued in which both the ,egional Trial -ourt and -ourt o$ *ppeals sided with !inebra.s contentions. -/0T10TI/0 /2 T31 &1TITI/01,4 Tanduay contends that the label design o$ !inebra "apitan# in ter%s o$ color, si5e and arrange%ent o$ te6t and other label $eatures were precisely selected to distinguish it $ro% !inebra.s %erchandise. !inebra "apitan# bottle uses a resealable twist cap to distinguish it $ro% the other products which uses crown caps or tansans#. -/0T10TI/0 /2 ,1)&/0710T4 There was In$ringe%ent and 8n$air -o%petition because the close si%ilarity between the two a$ore%entioned products %ay give rise to con$usion o$ goods since Tanduay and !inebra )an 'iguel are co%petitors in the business o$ %anu$acturing and selling liquors and !inebra which is a well (nown trade%ar( was adopted by Tanduay to bene$it $ro% the established reputation. ISSUE +hether or 0ot there was proper issuance o$ the preli%inary in9unctive order against Tanduay by the lower -ourts. RULING T31,1 I) 0/ &,/&1, I))8*0-1 /2 T31 I0:80-TI;1 +,IT. )an 'iguel.s right to the in9unctive writ has not been clearly de%onstrated. The right to the e6clusive use o$ the word !inebra# has yet to be deter%ined in the %ain case and the lower court.s action constitutes grave abuse o$ discretion a%ounting to lac( o$ 9urisdiction. In the case at bar, a cloud o$ doubt e6ists over )an 'iguel.s e6clusive right relating to the word !inebra# is still clearly in dispute because o$ Tanduay.s clai% that it has, as others have, also registered the word !inebra# $or its gin products.

'erchandising $ro% using the na%e -hin -hun )u in their crea% products. ISSUE +ho between 1lidad "ho and )u%%erville has a better right to use the trade%ar( E-hin -hun )uE on their $acial crea% productF RULING )u%%erville has better right. The )- held that )u%%erville !eneral 'erchandising and -o%pany has the better right to use the trade%ar( E-hin -hun )uE on its $acial crea% product by virtue o$ the e6clusive i%portation and distribution rights given to it by )hun <ih -he%istry 2actory o$ Taiwan on a$ter the latter cancelled and ter%inated its )ole 7istributorship *gree%ent with @uintin -heng, who assigned and trans$erred his rights under said agree%ent to 1lidad -. "ho. "ho is not the author o$ the trade%ar( E-hin -hun )uE and his only clai% to the use o$ the trade%ar( is based on the 7eed o$ *gree%ent e6ecuted in his $avor by @uintin -heng. Ay virtue thereo$, he registered the trade%ar( in his na%e. The registration was a patent nullity because petitioner is not the creator o$ the trade%ar( E-hin -hun )uE and, there$ore, has no right to register the sa%e in his na%e. 2urther%ore, the authority o$ @uintin -heng to be the sole distributor o$ -hin -hun )u in the &hilippines had already been ter%inated by )hun <ih -he%istry o$ Taiwan. +ithal, he had no right to assign or to trans$er the sa%e to "ho.

ABS-CBN BR#ADCASTING C#R.#RATI#N vs. ."ILI..INE MULTI-MEDIA SYSTEM, INC., CESAR G. REYES, FRANCIS C"UA /ANG BIA#0, MANUEL F. ABELLADA, RAUL B. DE MESA, AND AL#YSIUS M. C#LAYC# G.R. Nos. 1+)+69-+0 1$%u$2, 19, 2009 FACTS *A)B-A0 is engaged in television and radio broadcasting through wireless and satellite %eans while &hilippine 'ultiB'edia )yste%s Inc. = &')I# $or brevity>, the operator o$ 7rea% Aroadcasting )yste% provides directBtoBho%e =7T3> television via satellite to its subscribers all over the &hilippines. &')I was granted legislative $ranchise under ,* 8CD0 to install, operate and %aintain a nationwide 7T3 satellite service and is obligated under by 0T- 'e%orandu% -ircular 0o. 4B08B88, )ection C.2 o$ which requires all cable television syste% operators operating in a co%%unity within !rade *# or A# contours to carry the television signals o$ the authori5ed television broadcast stations = %ustBcarry rule#>. *A)B-A0 $iled a co%plaint with Intellectual &roperty /$$ice =I&/> $or violation o$ laws involving property rights. It alleged that &')I.s unauthori5ed rebroadcasting o$ -hannels 2 and 2D in$ringed on its broadcasting rights and copyright and that the 0T- circular only covers cable television syste% operators and not 7T3 satellite television operators. 'oreover, 0T- -ircular 4B08B88 violates )ec. 9 o$ *rt. III o$ the -onstitution because it allows the ta(ing o$ property $or public use without pay%ent o$ 9ust co%pensation. &')I argued that its rebroadcasting o$ -hannels 2 and 2D is sanctioned by 'e%orandu% -ircular 0o. 04B08B88G that the %ustBcarry rule under the 'e%orandu% -ircular is a valid e6ercise o$ police power. I&/ and -ourt o$ *ppeals ruled in $avor o$ &')I. ISSUES 1. 2. D. +hether or not &')I in$ringed on *A)B-A0.s broadcasting rights and copyright. +hether or not &')I is covered by the 0T- -ircular = %ustBcarry rule#>. +hether 0T- -ircular 4B08B88 violates )ec. 9 o$ *rt. III o$ the-onstitution because it allows the ta(ing o$ property $or public use without pay%ent o$ 9ust co%pensation or it is a valid e6ercise o$ police power.

ELIDAD !"# $%& 'I#LETA !"# vs. ENRIC# LAN(ANAS $%& SUMMER'ILLE GENERAL MERC"ANDISING G.R. No. 1)0*++ M$, 4, 2006 FACTS )hun <ih -he%istry 2actory =)<-2>, a business e6isting and operating in Taiwan and engaged in the %anu$acture and sale o$ -hin -hun )u -rea%s?-os%etics, appointed @uintin -heng as its distributor o$ -hin -hun )u products in the &hilippines $or a ter% o$ two years. @uintin -heng registered with the Aureau o$ 2ood and 7rugs =A2*7> as distributor o$ -hin -hun )u products. @uintin -heng subsequently secured a supple%ental registration $or -hin -hun )u and device. This supple%ental registration was ordered cancelled by the Aureau o$ &atents, Trade%ar(s and Technology Trans$er on the ground o$ $ailure o$ the registrant to $ile the required a$$idavit o$ nonBuse as required by )ection 12 o$ ,epublic *ct 0o. 1CC, as a%ended. 0otwithstanding this cancellation, @uintin -heng e6ecuted an *ssign%ent o$ a ,egistered Trade%ar( and a )upple%entary 7eed o$ *ssign%ent wherein he sold all his right, title, interest and goodwill in the trade%ar( -hin -hun )u and device to 1lidad "ho. In the %eanti%e, ani%osity arose between )<-2 and @uintin -heng resulting in the ter%ination o$ their distributorship agree%ent. -onsequently, on D0 0ove%ber 1990, )<-2 appointed )u%%erville !eneral 'erchandising, represented by *ng Tia% -hay and ;ictor -hua, as its e6clusive i%porter, reBpac(er and distributor o$ -hin -hun )u products in the &hilippines $or a period o$ $ive years. * -o%plaint $or In9unction and 7a%ages was $iled by 1lidad "ho against )u%%erville. "ho $iled the co%plaint to en9oin )u%%erville !eneral

RULING 1. 0/. &')I does not in$ringe on *A)B-A0.s broadcasting rights under the I& -ode as &')I is not engaged in rebroadcasting o$ -hannels 2 and 2D. ,ebroadcasting, which is prohibited by the I& -ode, is the si%ultaneous broadcasting by one broadcasting organi5ation o$ the broadcast o$ another broadcasting organi5ation.# *A)B-A0 creates and trans%its its own signalsG &')I %erely carries such signals which the viewers receive in its unaltered $or%. &')I does not produce, select, or deter%ine the progra%s to be shown in -hannels 2 and 2D. Hi(ewise, it does not pass itsel$ o$$ as the origin or author o$ such progra%s. Inso$ar as -hannels 2 and 2D are concerned, &')I %erely retrans%its the sa%e in accordance with 0T'e%orandu% -ircular 04B08B88. 2. <1). 7T3 satellite tv operators# is covered under the 0T--ircular which requires all cable television syste% operatorsI to carry the television signals o$ the authori5ed television broadcast stations#. The 7irectorB!eneral o$ the I&/ and the -ourt o$ *ppeals correctly $ound that &')I.s services are si%ilar to a cable television syste% because the services it renders $all under cable retrans%ission#. Thus, &')I, being a 7T3 )atellite T; operator is covered by the 0T- -ircular. D. The carriage o$ *A)B-A0.s signals by virtue o$ the %ustB carry rule in 'e%orandu% -ircular 0o. 04B08B88 is under the direction and control o$ the govern%ent though the 0T- which is vested with e6clusive 9urisdiction to supervise, regulate and control teleco%%unications and broadcast services?$acilities in the &hilippines. The i%position o$ the %ustBcarry rule is within the 0T-.s power to pro%ulgate rules and regulations, as public sa$ety and interest %ay require, to encourage a larger and %ore e$$ective use o$ co%%unications, radio and television broadcasting $acilities, and to %aintain e$$ective co%petition a%ong private entities.

that an intellectual creation should be copyrighted thirty =D0> days a$ter its publication, i$ %ade in 'anila, or within the =C0> days i$ %ade elsewhere, $ailure o$ which renders such creation public property.E Indeed, i$ the general public has %ade use o$ the ob9ect sought to be copyrighted $or thirty =D0> days prior to the copyright application the law dee%s the ob9ect to have been donated to the public do%ain and the sa%e can no longer be copyrighted. * care$ul study o$ the records reveals that the song E7ahil )a IyoE which was registered on *pril 20, 19JC beca%e popular in radios, 9u(e bo6es, etc. long be$ore registration while the song EThe 0earness /$ <ouE registered on :anuary 14, 19JJ had beco%e popular twenty $ive =2J> years prior to 19C8, =the year o$ the hearing> or $ro% 194D and the songs E)apag(at I(aw *y *(inE and E)apag(at "a%i *y Tao Ha%angE both registered on :uly 10, 19CC, appear to have been (nown and sang by the witnesses as early as 19CJ or three years be$ore the hearing in 19C8. The testi%onies o$ the witnesses at the hearing o$ this case on this sub9ect were unrebutted by the appellant.

ABS-CBN '. ."ILI..INE MULTIMEDIA SYSTEM INC. G.R. N#. 1+)+69-+0 /20090 2*-T)4 &')I is the operator o$ 7rea% Aroadcasting )yste%. *A)B -A0 contends that &')I.s unauthori5ed rebroadcasting o$ -hannels 2 and 2D is an in$ringe%ent o$ its broadcasting rights and copyright under the Intellectual &roperty -ode. The -ourt o$ *ppeals. interpretation o$ the must-carry rule violates )ection 9 o$ *rticle III o$ the 198K &hilippine -onstitution because it allows the ta(ing o$ property $or public use without pay%ent o$ 9ust co%pensation. ,espondents, on the other hand, argue that &')I.s rebroadcasting o$ -hannels 2 and 2D is sanctioned by 'e%orandu% -ircular 0o. 04B08B88. 3ence, the must-carry rule under the 'e%orandu% -ircular is a valid e6ercise o$ police power. I))81)4

FILI.IN# S#CIETY #F C#M.#SERS '. TAN 14* SCRA 461 /19*+0 2*-T)4 2ilipino )ociety o$ -o%posers, *uthors and &ublishers Inc. is the owner o$ certain %usical co%positions including songs such as E7ahil )a IyoE, E)apag(at I(aw *y *(in,E E)apag(at "a%i *y Tao Ha%angE and EThe 0earness /$ <ou.E Aen9a%in Tan. on the other hand, is the operator o$ a restaurant (nown as E*le6 )oda 2oundation and ,estaurantE where a co%bo with pro$essional singers, hired to play and sing %usical co%positions to entertain and a%use custo%ers therein, were playing and singing the aboveB%entioned co%positions without any license or per%ission $ro% the appellant to play or sing the sa%e. *ccordingly, appellant de%anded $ro% the appellee pay%ent o$ the necessary license $ee $or the playing and singing o$ a$oresaid co%positions but the de%and was ignored. Tan argued that the %ere singing and playing o$ songs and popular tunes even i$ they are copyrighted do not constitute an in$ringe%ent. I))81)4

1. 2.
,8HI0!4

+hether &')I rebroadcasts -hannels 2 and 2D o$ *A)B-A0 or not thus, in$ringing the broadcasting rights and copyrights o$ the latter. +hether the %ustBcarry rule violates the rights o$ *A)B-A0 under the I&H or not.

1.

+hether or not the playing and singing o$ %usical co%positions which have been copyrighted under the provisions o$ the -opyright Haw =*ct D1D4> inside the establish%ent o$ Aen9a%in Tan constitute a public per$or%ance $or pro$it within the %eaning and conte%plation o$ the -opyright Haw o$ the &hilippinesG and *ssu%ing that there were indeed public per$or%ances $or pro$it, whether or not Aen9a%in Tan can be held liable there$ore.

2.

,8HI0!4 =1> <es. The playing o$ %usic in dine and dance establish%ent which was paid $or by the public in purchases o$ $ood and drin( constituted Eper$or%ance $or pro$itE within a -opyright Haw . =2> The )upre%e -ourt has ruled that E&aragraph DD o$ &atent /$$ice *d%inistrative /rder 0o. D provides a%ong other things

=1> The 7irectorB!eneral o$ the I&/ correctly $ound that &')I is not engaged in rebroadcasting and thus cannot be considered to have in$ringed *A)B-A0.s broadcasting rights and copyright. *A)B -A0 creates and trans%its its own signalsG &')I %erely carries such signals which the viewers receive in its unaltered $or%. &')I does not produce, select, or deter%ine the progra%s to be shown in -hannels 2 and 2D. Hi(ewise, it does not pass itsel$ o$$ as the origin or author o$ such progra%s. Inso$ar as -hannels 2 and 2D are concerned, &')I %erely retrans%its the sa%e in accordance with 'e%orandu% -ircular 04B08B88. +ith regard to its pre%iu% channels, it buys the channels $ro% content providers and trans%its on an asBis basis to its viewers. -learly, &')I does not per$or% the $unctions o$ a broadcasting organi5ation hence, it cannot be said that it is engaged in rebroadcasting -hannels 2 and 2D. Thus, while the ,o%e -onvention gives broadcasting organi5ations the right to authori5e or prohibit the rebroadcasting o$ its broadcast, however, this protection does not e6tend to cable retrans%ission. The retrans%ission o$ *A)B-A0.s signals by &')I L which $unctions essentially as a cable television L does not there$ore constitute rebroadcasting in violation o$ the $or%er.s intellectual property rights under the I& -ode. =2> The must-carry rule under the 'e%orandu% -ircular 04B08B88 requires all cable television syste% operators operating in a co%%unity within !rade *# or A# contours to carry the television

signals o$ the authori5ed television broadcast stations =164 broadcasting organi5ations with $reeBtoBair signals such as !'*BK, ,&0B9, *A-BJ, and IA-B1D> The carriage o$ *A)B-A0.s signals by virtue o$ the %ustB carry rule in 'e%orandu% -ircular 0o. 04B08B88 is under the direction and control o$ the govern%ent though the 0T- which is vested with e6clusive 9urisdiction to supervise, regulate and control teleco%%unications and broadcast services?$acilities in the &hilippines. The i%position o$ the %ustBcarry rule is within the 0T-.s power to pro%ulgate rules and regulations, as public sa$ety and interest %ay require, to encourage a larger and %ore e$$ective use o$ co%%unications, radio and television broadcasting $acilities, and to %aintain e$$ective co%petition a%ong private entities in these activities whenever the -o%%ission $inds it reasonably $easible. *s correctly observed by the 7irectorB!eneral o$ the I&/4 *ccordingly, the MustCarry Rule under 0T- -ircular 0o. 4B08B88 $alls under the $oregoing category o$ li%itations on copyright. NOTE: +hile the ,o%e -onvention gives broadcasting organi5ations the right to authori5e or prohibit the rebroadcasting o$ its broadcast, however, this protection does not e6tend to cable retrans%ission.

I))81)4 1. +hether or not the issuance o$ the writ o$ preli%inary in9unction by the trial court was proper 2. +hether or not the -* erred in setting aside the orders o$ the trial court 31H74 &etition is denied. )ection 1, ,ule J8 o$ the ,ules o$ -ourt de$ines a preli%inary in9unction as an order granted at any stage o$ an action prior to the 9udg%ent or $inal order requiring a party or a court, agency or a person to re$rain $ro% a particular act or acts. In9unction is accepted as the strong ar% o$ equity or a transcendent re%edy to be used cautiously as it a$$ects the respective rights o$ the parties, and only upon $ull conviction on the part o$ the court o$ its e6tre%e necessity. *n e6traordinary re%edy, in9unction is designed to preserve or %aintain the status quo o$ things and is generally availed o$ to prevent actual or threatened acts until the %erits o$ the case can be heard. It %ay be resorted to only by a litigant $or the preservation or protection o$ his rights or interests and $or no other purpose during the pendency o$ the principal action. It is resorted to only when there is a pressing necessity to avoid in9urious consequences, which cannot be re%edied under any standard co%pensation. The resolution o$ an application $or a writ o$ preli%inary in9unction rests upon the e6istence o$ an e%ergency or o$ a special recourse be$ore the %ain case can be heard in due course o$ proceedings. The grounds $or the issuance o$ preli%inary in9unction under )ection D, ,ule J8, o$ the ,ules o$ -ourt provide that a clear and positive right especially calling $or 9udicial protection %ust be shown. In9unction is not a re%edy to protect or en$orce contingent, abstract, or $uture rightsG it will not issue to protect a right not in esse and which %ay never arise, or to restrain an act which does not give rise to a cause o$ action. There %ust e6ist an actual right. There %ust be a patent showing by the co%plaint that there e6ists a right to be protected and that the acts against which the writ is to be directed are violative o$ said right. In this case, the court $inds scant 9usti$ication $or the issuance o$ the writ o$ preli%inary in9unction. The petitioners anchor their legal right to the 7oc(ers and 7esign# trade%ar( on the -erti$icate o$ ,egistration issued in their $avor by the Aureau o$ &atents, Trade%ar(s and Technology Trans$er, as well as under ,epublic *ct 0o. 829D )ection 14K.1. This grants the owner o$ the registered %ar( the e6clusive right to prevent all third parties not having the owner.s consent $ro% using in the course o$ trade identical or si%ilar signs $or goods or services which are identical or si%ilar to those in respect o$ which the trade%ar( is registered i$ such use results in a li(elihood o$ con$usion. 3owever, attention should be given to the $act that the petitioners. registered trade%ar( consists o$ two ele%ents4 =1> the word %ar( 7oc(ers# and =2> the wingBshaped design or logo. 0otably, there is only one registration $or both $eatures o$ the trade%ar( giving the i%pression that the two shouldbe considered as a single unit. -linton *pparelle.s trade%ar(, on the other hand, uses the &addoc(s# word %ar( on top o$ a logo which according to the petitioners is a slavish i%itation o$ the 7oc(ers# design. The two trade%ar(s apparently di$$er in their word %ar(s = 7oc(ers# and &addoc(s#>, but again according to the petitioners, they e%ploy si%ilar or identical logos. It could thus be said that the respondent only appropriates# the petitioners. logo and not the word %ar( 7oc(ers#G it uses only a portion o$ the registered trade%ar( and not the whole. !iven the single registration o$ the trade%ar( 7oc(ers and 7esign# and considering that the respondent only uses the assailed device but a di$$erent word %ar(, the right to prevent the latter $ro% using the challenged &addoc(s# device is $ar $ro% clear. It is also unclear whether the use without the owner.s consent o$ a portion o$ a trade%ar( registered in its entirety constitutes %aterial or substantial invasion o$ the owner.s right. It is li(ewise not settled whether the wingB shaped logo, as opposed to the word %ar(, is the do%inant or central $eature o$ the petitioners. trade%ar(Nthe $eature that prevails or is retained in the %inds o$ the publicNan i%itation o$ which creates the li(elihood o$ deceiving the public and constitutes trade%ar( in$ringe%ent. In su%, there are vital %atters, which have yet and %ay only be established through a $ullBblown trial. The -ourt $inds that the petitioners. right to in9unctive relie$ has not been clearly and un%ista(ably de%onstrated. The right has yet to be deter%ined. The petitioners also $ailed to show proo$ that there is

LE'IS STRAUSS 3 C#. $%& LE'I STRAUSS ."ILI..INE INC. 4. CLINT#N A..ARELLE, INC. GR. No. 13*900, 20 S56t57852 200), S59o%& D:4:s:o% /T:%g$, 1.0 The petitioners anchor their legal right to the trade%ar( on the -erti$icate o$ ,egistration as well as under ,* 0o. 829D )ection 14K.1. This grants the owner o$ the registered %ar( the e6clusive right to prevent all third parties not having the owner.s consent $ro% using in the course o$ trade identical or si%ilar signs $or goods or services which are identical or si%ilar to those in respect o$ which the trade%ar( is registered i$ such use results in a li(elihood o$ con$usion. This case arose $ro% the -o%plaint $or Trade%ar( In$ringe%ent, In9unction and 7a%ages $iled by petitioners H1;I) )T,*8)) M -/. and H1;I )T,*8)) &3IHI&&I01 I0-. =H)&I> against respondent -linton *pparelle, Inc. together with an alternative de$endant, /ly%pian !ar%ents, Inc., be$ore the ,T- o$ @ue5on -ity. The -o%plaint alleged that H) M -o., a $oreign corporation duly organi5ed and e6isting under the laws o$ the )tate o$ 7elaware, 8)*, and engaged in the apparel business, is the owner by prior adoption and use since 198C o$ the internationally $a%ous 7oc(ers and 7esign# trade%ar(. The 7oc(ers and 7esign# trade%ar( was $irst used in the &hilippines in or about 'ay 1988, by H)&I, a do%estic corporation engaged in the %anu$acture, sale and distribution o$ various products bearing trade%ar(s owned by H) M -o. H) M -o. and H)&I $urther alleged that they discovered the presence in the local %ar(et o$ 9eans under the brand na%e &addoc(s# using a device which is substantially, i$ not e6actly, si%ilar to the 7oc(ers and 7esign# trade%ar( without H) M -o..s consent. The petitioners prayed $or a T,/ and writ o$ preli%inary in9unctions which the court granted a$ter the respondent $ailed to appear despite notice. -linton *pparelle $iled a 'otion to 7is%iss and 'otion $or ,econsideration in an /%nibus /rder but this was denied $or lac( o$ %erit. Thus, -linton *pparelle $iled with the -ourt o$ *ppeals a &etition $or certiorari, prohibition and %anda%us with prayer $or the issuance o$ a te%porary restraining order and?or writ o$ preli%inary in9unction, assailing the orders o$ the trial court. The -ourt o$ *ppeals ruled in $avor o$ the respondent and held that the trial court did not $ollow the procedure required by law $or the issuance o$ a te%porary restraining order, as -linton *pparelle was not duly noti$ied o$ the date o$ the su%%ary hearing $or its issuance. Thus, the -ourt o$ *ppeals ruled that the T,/ had been i%properly issued. The appellate court also held that such issuance is questionable $or the petitioners $ailed to su$$iciently establish their %aterial and substantial right to have the writ issued. In addition, the -ourt o$ *ppeals strongly believed that the i%ple%entation o$ the questioned writ would e$$ectively shut down the respondent.s business, which in its opinion should not be sanctioned. 3ence, this petition.

%aterial and substantial invasion o$ their right to warrant the issuance o$ an in9unctive writ. 0either were they able to show any urgent and per%anent necessity $or the writ to prevent serious da%age. The $act that the petitioners had su$$ered or continue to su$$er %ay be co%pensated in ter%s o$ %onetary consideration. The issued in9unctive writ, i$ allowed, would dispose o$ the case on the %erits as it would e$$ectively en9oin the use o$ the &addoc(s# device without proo$ that there is basis $or such action. The prevailing rule is that courts should avoid issuing a writ o$ preli%inary in9unction that would in e$$ect dispose o$ the %ain case without trial. There would be a pre9udg%ent o$ the %ain case and a reversal o$ the rule on the burden o$ proo$ since it would assu%e the proposition which the petitioners are inceptively bound to prove.

$ro% using the %ar( E!inebraE and $ro% co%%itting acts that violate )an 'iguel.s intellectual property rights.8 /n 1J *ugust 200D, )an 'iguel $iled a co%plaint $or trade%ar( in$ringe%ent, un$air co%petition and da%ages, with applications $or issuance o$ T,/ and +rit o$ &reli%inary In9unction against Tanduay be$ore the ,egional Trial -ourt o$ 'andaluyong. The case was ra$$led to Aranch 214 and doc(eted as I& -ase 0o. '-B0DB01 and -ivil -ase 0o. '-B0DB0KD.9 /n 2J and 29 *ugust and 4 )epte%ber 200D, the trial court conducted hearings on the T,/. )an 'iguel sub%itted $ive a$$idavits, but only one a$$iant, 'ercedes *bad, was presented $or crossBe6a%ination because the trial court ruled that such e6a%ination would be inconsistent with the su%%ary nature o$ a T,/ hearing.10 )an 'iguel sub%itted the $ollowing pieces o$ evidence411 1. *$$idavit o$ 'ercedes *bad, &resident and 'anaging 7irector o$ the research $ir% 02/ Trends, Inc. =02/ Trends>, to present, a%ong others, %ar(et survey results which prove that gin drin(ers associate the ter% E!inebraE with )an 'iguel, and that the consu%ing public is being %isled that E!inebra "apitanE is a product o$ )an 'iguelG 2. 'ar(et )urvey results conducted by 02/ Trends to deter%ine the brand associations o$ the %ar( E!inebraE and to prove that the consu%ing public is con$used as to the %anu$acturer o$ E!inebra "apitanEG D. *$$idavit o$ ,a%on -ru5, )an 'iguel.s !roup &roduct 'anager, to prove, a%ong others, the prior right o$ )an 'iguel to the %ar( E!inebraE as shown in various applications $or, and registrations o$, trade%ar(s that contain the %ar( E!inebra.E 3is a$$idavit included docu%ents showing that the %ar( E!inebraE has been used on )an 'iguel.s gin products since 18D4G 4. *$$idavits o$ Heopoldo !uan5on, :r., )an 'iguel.s Trade and &ro%o 'erchandising 3ead $or 0orth Hu5on *rea, and :uderic( -rescini, )an 'iguel.s 7istrict )ales )upervisor $or )outh Hu5onB1ast *rea, to prove, a%ong others, that Tanduay.s sales%en or distributors %isrepresent E!inebra "apitanE as )an 'iguel.s product and that nu%erous retailers o$ )an 'iguel.s gin products are con$used as to the %anu$acturer o$ E!inebra "apitanEG and J. *$$idavit o$ :ose ,eginald &ascual, )an 'iguel.s 7istrict )ales )upervisor $or the 0orthB!reater 'anila *rea, to prove, a%ong others, that gin drin(ers con$use )an 'iguel to be the %anu$acturer o$ E!inebra "apitanE due to the use o$ the do%inant $eature E!inebra.E Tanduay $iled a 'otion to )tri(e /ut 3earsay *$$idavits and 1vidence, which %otion was denied by the trial court. Tanduay presented witnesses who a$$ir%ed their a$$idavits in open court, as $ollows4 12 1. ,a%oncito Augia, !eneral )ervices 'anager o$ Tanduay. *ttached to his a$$idavit were various certi$icates o$ registration o$ trade%ar(s containing the word E!inebraE obtained by Tanduay and other liquor co%panies, to prove that the word E!inebraE is required to be disclai%ed by the I&/. The a$$idavit also attested that there are other liquor co%panies using the word E!inebraE as part o$ their trade%ar(s $or gin products aside $ro% )an 'iguel and Tanduay. 2. 3erbert ,osales, ;ice &resident o$ :. )alcedo and *ssociates, Inc., the advertising and pro%otions co%pany hired by Tanduay to design the label o$ E!inebra "apitan.E 3is a$$idavit attested that the label was designed to %a(e it Eloo( absolutely di$$erent $ro% the !inebra )an 'iguel label.E

G.R. No. 164324

August 14, 2009

TANDUAY DISTILLERS, INC., &etitioner, vs. GINEBRA SAN MIGUEL, INC., ,espondent. 71-I)I/0 CAR.I#, J.: T;5 C$s5 Tanduay 7istillers, Inc. =Tanduay> $iled this &etition $or ,eview on -ertiorari1 assailing the -ourt o$ *ppeals. 7ecision dated 9 :anuary 20042 as well as the ,esolution dated 2 :uly 2004D in -*B!.,. )& 0o. K9CJJ denying the 'otion $or ,econsideration. In the assailed decision, the -ourt o$ *ppeals =-*> a$$ir%ed the ,egional Trial -ourt.s /rders4 dated 2D )epte%ber 200D and 1K /ctober 200D which respectively granted !inebra )an 'iguel, Inc..s =)an 'iguel> prayer $or the issuance o$ a te%porary restraining order =T,/> and writ o$ preli%inary in9unction. The ,egional Trial -ourt o$ 'andaluyong -ity, Aranch 214 =trial court>, en9oined Tanduay E$ro% co%%itting the acts co%plained o$, and, speci$ically, to cease and desist $ro% %anu$acturing, distributing, selling, o$$ering $or sale, advertising, or otherwise using in co%%erce the %ar( E!inebra,E and %anu$acturing, producing, distributing, or otherwise dealing in gin products which have the general appearance o$, and which are con$usingly si%ilar with,E )an 'iguel.s %ar(s, bottle design, and label $or its gin products.J T;5 F$9ts Tanduay, a corporation organi5ed and e6isting under &hilippine laws, has been engaged in the liquor business since 18J4. In 2002, Tanduay developed a new gin product distinguished by its sweet s%ell, s%ooth taste, and a$$ordable price. Tanduay clai%s that it engaged the services o$ an advertising $ir% to develop a brand na%e and a label $or its new gin product. The brand na%e eventually chosen was E!inebra "apitanE with the representation o$ a revolutionary "apitan on horsebac( as the do%inant $eature o$ its label. Tanduay points out that the label design o$ E!inebra "apitanE in ter%s o$ color sche%e, si5e and arrange%ent o$ te6t, and other label $eatures were precisely selected to distinguish it $ro% the leading gin brand in the &hilippine %ar(et, E!inebra )an 'iguel.E Tanduay also states that the E!inebra "apitanE bottle uses a resealable twist cap to distinguish it $ro% E!inebra )an 'iguelE and other local gin products with bottles which use the crown cap or tansan.C *$ter $iling the trade%ar( application $or E!inebra "apitanE with the Intellectual &roperty /$$ice =I&/> and a$ter securing the approval o$ the per%it to %anu$acture and sell E!inebra "apitanE $ro% the Aureau o$ Internal ,evenue, Tanduay began selling E!inebra "apitanE in 0orthern and )outhern Hu5on areas in 'ay 200D. In :une 200D, E!inebra "apitanE was also launched in 'etro 'anila.K /n 1D *ugust 200D, Tanduay received a letter $ro% )an 'iguel.s counsel. The letter in$or%ed Tanduay to i%%ediately cease and desist

/n 2D )epte%ber 200D, the trial court issued a T,/ prohibiting Tanduay $ro% %anu$acturing, selling and advertising E!inebra "apitan.E1D The dispositive portion reads in part4 +31,12/,1, the application $or te%porary restraining order is hereby !,*0T17 and %ade e$$ective i%%ediately. &lainti$$ is directed to post a bond o$ /01 'IHHI/0 &1)/) =&hp 1,000,000.00> within $ive =J> days $ro% issuance hereo$, otherwise, this restraining order shall lose its e$$icacy. *ccordingly, de$endant Tanduay 7istillers, Inc., and all persons and agents acting $or and in behal$ are en9oined to cease and desist $ro% %anu$acturing, distributing, selling, o$$ering $or sale and?or advertising or otherwise using in co%%erce the %ar( E!I01A,* "*&IT*0E which e%ploys, thereon, or in the wrappings, sundry ite%s, cartons and pac(ages thereo$, the %ar( E!I01A,*E as well as $ro% using the bottle design and labels $or its gin products during the e$$ectivity o$ this te%porary restraining order unless a contrary order is issued by this -ourt.14 /n D /ctober 200D, Tanduay $iled a petition $or certiorari with the -*. 1J 7espite Tanduay.s 8rgent 'otion to 7e$er In9unction 3earing, the trial court continued to conduct hearings on 8, 9, 1D and 14 /ctober 200D $or Tanduay to show cause why no writ o$ preli%inary in9unction should be issued.1C /n 1K /ctober 200D, the trial court granted )an 'iguel.s application $or the issuance o$ a writ o$ preli%inary in9unction.1K The dispositive portion o$ the /rder reads4 +31,12/,1, the plainti$$.s application $or a writ o$ preli%inary in9unction is !,*0T17. 8pon plainti$$.s $iling o$ an in9unctive bond e6ecuted to the de$endant in the a%ount o$ &20,000,000.00 =T+10T< 'IHHI/0> &1)/), let a +rit o$ &reli%inary In9unction issue en9oining the de$endant, its e%ployees, agents, representatives, dealers, retailers or assigns, and any all persons acting on its behal$, $ro% co%%itting the acts co%plained o$, and, speci$ically, to cease and desist $ro% %anu$acturing, distributing, selling, o$$ering $or sale, advertising, or otherwise using in co%%erce the %ar( E!I01A,*E, and %anu$acturing, producing, distributing or otherwise dealing in gin products which have the general appearance o$, and which are con$usingly si%ilar with, plainti$$.s %ar(s, bottle design and label $or its gin products. )/ /,71,17.18 /n 22 /ctober 200D, Tanduay $iled a supple%ental petition in the -* assailing the in9unction order. /n 10 0ove%ber 200D, the -* issued a T,/ en9oining the trial court $ro% i%ple%enting its in9unction order and $ro% $urther proceeding with the case.19 /n 2D 7ece%ber 200D, the -* issued a resolution directing the parties to appear $or a hearing on C :anuary 2004 to deter%ine the need $or the issuance o$ a writ o$ preli%inary in9unction.20 /n 9 :anuary 2004, the -* rendered a 7ecision dis%issing Tanduay.s petition and supple%ental petition. /n 28 :anuary 2004, Tanduay %oved $or reconsideration which was denied in a ,esolution dated 2 :uly 2004.21 *ggrieved by the decision dis%issing the petition and supple%ental petition and by the resolution denying the 'otion $or ,econsideration, Tanduay elevated the case be$ore this -ourt. T;5 T2:$< Cou2t=s #2&52s In the /rder dated 2D )epte%ber 200D, the trial court stated that during the hearings conducted on 2J and 29 *ugust and on 4 and 11 )epte%ber 200D, the $ollowing $acts have been established4 1. )an 'iguel has registered the trade%ar( E!inebra )an 'iguelEG 2. There is a close rese%blance between E!inebra )an 'iguelE and E!inebra "apitanEG

D. The close si%ilarity between E!inebra )an 'iguelE and E!inebra "apitanE %ay give rise to con$usion o$ goods since )an 'iguel and Tanduay are co%petitors in the business o$ %anu$acturing and selling liquorsG and E!inebra,E which is a wellB(nown trade%ar(, was adopted by Tanduay to bene$it $ro% the reputation and advertise%ent o$ the originator o$ the %ar( E!inebra )an 'iguel,E and to convey to the public the i%pression o$ so%e supposed connection between the %anu$acturer o$ the gin product sold under the na%e E!inebra )an 'iguelE and the new gin product E!inebra "apitan.E22 Aased on these $acts, the trial court concluded that )an 'iguel had de%onstrated a clear, positive, and e6isting right to be protected by a T,/. /therwise, )an 'iguel would su$$er irreparable in9ury i$ in$ringe%ent would not be en9oined. 3ence, the trial court granted the application $or a T,/ and set the hearing $or preli%inary in9unction. 2D In the /rder dated 1K /ctober 200D, the trial court granted the application $or a writ o$ preli%inary in9unction. The trial court ruled that while a corporation acquires a trade na%e $or its product by choice, it should not select a na%e that is con$usingly si%ilar to any other na%e already protected by law or is patently deceptive, con$using, or contrary to e6isting law.24 The trial court pointed out that )an 'iguel and its predecessors have continuously used E!inebraE as the do%inant $eature o$ its gin products since 18D4. /n the other hand, Tanduay $iled its trade%ar( application $or E!inebra "apitanE only on K :anuary 200D. The trial court declared that )an 'iguel is the prior user and registrant o$ E!inebraE which has beco%e closely associated to all o$ )an 'iguel.s gin products, thereby gaining popularity and goodwill $ro% such na%e.2J The trial court noted that while the sub9ect trade%ar(s are not identical, it is obviously clear that the word E!inebraE is the do%inant $eature in the trade%ar(s. The trial court stated that there is a strong indication that con$usion is li(ely to occur since one would inevitably be led to conclude that both products are a$$iliated with )an 'iguel due to the distinctive %ar( E!inebraE which is readily identi$ied with )an 'iguel. The trial court concluded that ordinary purchasers would not e6a%ine the letterings or $eatures printed on the label but would si%ply be guided by the presence o$ the do%inant %ar( E!inebra.E *ny di$$erence would pale in signi$icance in the $ace o$ evident si%ilarities in the do%inant $eatures and overall appearance o$ the products. The trial court e%phasi5ed that the deter%inative $actor was whether the use o$ such %ar( would li(ely cause con$usion on the part o$ the buying public, and not whether it would actually cause con$usion on the part o$ the purchasers. Thus, Tanduay.s choice o$ E!inebraE as part o$ the trade%ar( o$ E!inebra "apitanE tended to show Tanduay.s intention to ride on the popularity and established goodwill o$ E!inebra )an 'iguel.E2C The trial court held that to constitute trade%ar( in$ringe%ent, it was not necessary that every word should be appropriatedG it was su$$icient that enough be ta(en to deceive the public in the purchase o$ a protected article.2K The trial court conceded to Tanduay.s assertion that the ter% E!inebraE is a generic wordG hence, it is nonBregistrable because generic words are by law $ree $or all to use. 3owever, the trial court relied on the principle that even i$ a word is incapable o$ appropriation as a trade%ar(, the word %ay still acquire a proprietary connotation through long and e6clusive use by a business entity with re$erence to its products. The purchasing public would associate the word to the products o$ a business entity. The word thus associated would be entitled to protection against in$ringe%ent and un$air co%petition. The trial court held that this principle could be %ade to apply to this case because )an 'iguel has shown that it has established goodwill o$ considerable value, such that its gin products have acquired a wellB (nown reputation as 9ust E!inebra.E In essence, the word E!inebraE has beco%e a popular byBword a%ong the consu%ers and they had closely associated it with )an 'iguel.28

/n the other hand, the trial court held that Tanduay $ailed to substantiate its clai% against the issuance o$ the in9unctive relie$.29 T;5 Ru<:%g o> t;5 Cou2t o> A665$<s In resolving the petition and supple%ental petition, the -* stated that it is constrained to li%it itsel$ to the deter%ination o$ whether the T,/ and the writ o$ preli%inary in9unction were issued by the trial court with grave abuse o$ discretion a%ounting to lac( o$ 9urisdiction.D0 To warrant the issuance o$ a T,/, the -* ruled that the a$$idavits o$ )an 'iguel.s witnesses and the $act that the registered trade%ar( E!inebra )an 'iguelE e6ists are enough to %a(e a $inding that )an 'iguel has a clear and un%ista(able right to prevent irreparable in9ury because gin drin(ers con$use )an 'iguel to be the %anu$acturer o$ E!inebra "apitan.ED1 The -* enu%erated the requisites $or an in9unction4 =1> there %ust be a right in esse or the e6istence o$ a right to be protected and =2> the act against which the in9unction is to be directed is a violation o$ such right. The -* stated that the trade%ar(s E!inebra )an 'iguelE and E!inebra "apitanE are not identical, but it is clear that the word E!inebraE is the do%inant $eature in both trade%ar(s. There was a strong indication that con$usion was li(ely to occur. /ne would be led to conclude that both products are a$$iliated with )an 'iguel because the distinctive %ar( E!inebraE is identi$ied with )an 'iguel. It is the %ar( which draws the attention o$ the buyer and leads hi% to conclude that the goods originated $ro% the sa%e %anu$acturer.D2 The -* observed that the gin products o$ E!inebra )an 'iguelE and E!inebra "apitanE possess the sa%e physical attributes with re$erence to their $or%, co%position, te6ture, or quality. The -* upheld the trial court.s ruling that )an 'iguel has su$$iciently established its right to prior use and registration o$ the %ar( E!inebraE as a do%inant $eature o$ its trade%ar(. E!inebraE has been identi$ied with )an 'iguel.s goods, thereby, it acquired a right in such %ar(, and i$ another in$ringed the trade%ar(, )an 'iguel could invo(e its property right.DD The Issue The central question $or resolution is whether )an 'iguel is entitled to the writ o$ preli%inary in9unction granted by the trial court as a$$ir%ed by the -*. 2or this reason, we shall deal only with the questioned writ and not with the %erits o$ the case pending be$ore the trial court. T;5 Ru<:%g o> t;5 Cou2t Clear and Unmistakable Right )ection 1, ,ule J8 o$ the ,ules o$ -ourt de$ines a preli%inary in9unction as an order granted at any stage o$ a proceeding prior to the 9udg%ent or $inal order, requiring a party or a court, agency, or a person to re$rain $ro% a particular act or acts. * preli%inary in9unction is a provisional re%edy $or the protection o$ substantive rights and interests. It is not a cause o$ action in itsel$ but %erely an ad9unct to the %ain case. Its ob9ective is to prevent a threatened or continuous irreparable in9ury to so%e o$ the parties be$ore their clai%s can be thoroughly investigated and advisedly ad9udicated. It is resorted to only when there is a pressing need to avoid in9urious consequences which cannot be re%edied under any standard co%pensation.D4 )ection D, ,ule J8 o$ the ,ules o$ -ourt provides4 )1-TI/0 D. !rounds $or issuance o$ a writ o$ preli%inary in9unction.N * preli%inary in9unction %ay be granted when it is established4 =a> That the applicant is entitled to the relie$ de%anded, and the whole or part o$ such relie$ consists in restraining the

co%%ission or continuance o$ the act or acts co%plained o$, or in requiring the per$or%ance o$ an act or acts, either $or a li%ited period or perpetuallyG =b> That the co%%ission, continuance or nonBper$or%ance o$ the act or acts co%plained o$ during the litigation would probably wor( in9ustice to the applicantG or =c> That a party, court, agency or a person is doing, threatening, or is atte%pting to do, or is procuring or su$$ering to be done, so%e act or acts probably in violation o$ the rights o$ the applicant respecting the sub9ect o$ the action or proceeding, and tending to render the 9udg%ent ine$$ectual. Ae$ore an in9unctive writ is issued, it is essential that the $ollowing requisites are present4 =1> the e6istence o$ a right to be protected and =2> the acts against which the in9unction is directed are violative o$ the right. The onus probandi is on the %ovant to show that the invasion o$ the right sought to be protected is %aterial and substantial, that the right o$ the %ovant is clear and un%ista(able, and that there is an urgent and para%ount necessity $or the writ to prevent serious da%age.DJ )an 'iguel clai%s that the requisites $or the valid issuance o$ a writ o$ preli%inary in9unction were clearly established. The clear and un%ista(able right to the e6clusive use o$ the %ar( E!inebraE was proven through the continuous use o$ E!inebraE in the %anu$acture, distribution, %ar(eting and sale o$ gin products throughout the &hilippines since 18D4. To the ginBdrin(ing public, the word E!inebraE does not si%ply indicate a (ind o$ beverageG it is now synony%ous with )an 'iguel.s gin products.DC )an 'iguel contends that E!inebraE can be appropriated as a trade%ar(, and there was no error in the trial court.s provisional ruling based on the evidence on record. *ssu%ing that E!inebraE is a generic word which is proscribed to be registered as a trade%ar( under )ection 12D.1=h>DK o$ ,epublic *ct 0o. 829D or the Intellectual &roperty -ode =I& -ode>,D8 it can still be appropriated and registered as a trade%ar( under )ection 12D.1=9>D9 in relation to )ection 12D.240 o$ the I& -ode, considering that E!inebraE is also a %ar( which designates the (ind o$ goods produced by )an 'iguel.41 )an 'iguel alleges that although E!inebra,E the )panish word $or Egin,E %ay be a ter% originally incapable o$ e6clusive appropriation, 9urisprudence dictates that the %ar( has beco%e distinctive o$ )an 'iguel.s products due to its substantially e6clusive and continuous use as the do%inant $eature o$ )an 'iguel.s trade%ar(s since 18D4. 3ence, )an 'iguel is entitled to a $inding that the %ar( is dee%ed to have acquired a secondary %eaning.42 )an 'iguel states that Tanduay $ailed to present any evidence to disprove its clai%sG thus, there is no basis to set aside the grant o$ the T,/ and writ o$ preli%inary in9unction.4D )an 'iguel states that its disclai%er o$ the word E!inebraE in so%e o$ its registered %ar(s is without pre9udice to, and did not a$$ect, its e6isting or $uture rights over E!inebra,E especially since E!inebraE has de%onstrably beco%e distinctive o$ )an 'iguel.s products.44 )an 'iguel adds that it did not disclai% E!inebraE in all o$ its trade%ar( registrations and applications li(e its registration $or E!inebra -ru5 de /ro,E E!inebra "a 'iguel,E E!inebra )an 'iguelE bottle, E!inebra )an 'iguel,E and EAarangay !inebra.E4J Tanduay asserts that not one o$ the requisites $or the valid issuance o$ a preli%inary in9unction is present in this case. Tanduay argues that )an 'iguel cannot clai% the e6clusive right to use the generic word E!inebraE $or its gin products based on its registration o$ the co%posite %ar(s E!inebra )an 'iguel,E E!inebra ). 'iguel CJ,E and EHa TondeOa -liqP !inebra 'i6,E because in all o$ these registrations, )an 'iguel disclai%ed any e6clusive right to use the nonBregistrable word E!inebraE $or gin products.4C Tanduay e6plains that the word E!inebra,E which is disclai%ed by )an 'iguel in all o$ its registered trade%ar(s, is an unregistrable co%ponent o$ the co%posite %ar( E!inebra )an 'iguel.E Tanduay argues that this disclai%er $urther %eans that )an 'iguel does not have an e6clusive right to the generic word E!inebra.E4K Tanduay states that the word E!inebraE does not indicate

the source o$ the product, but it is %erely descriptive o$ the na%e o$ the product itsel$ and not the %anu$acturer thereo$.48 Tanduay sub%its that it has been producing gin products under the brand na%es !inebra CJ, !inebra 'atador, and !inebra Toro without any co%plaint $ro% )an 'iguel. Tanduay alleges that )an 'iguel has not $iled any co%plaint against other liquor co%panies which use E!inebraE as part o$ their brand na%es such as !inebra &inoy, a registered trade%ar( o$ +ebengton 7istilleryG !inebra &residente and !inebra Hu5on as registered trade%ar(s o$ +ashington 7istillery, Inc.G and !inebra Huc(y 0ine and !inebra )antiago as registered trade%ar(s o$ 7istileria Hi%tuaco M -o., Inc.49 Tanduay clai%s that the e6istence o$ these products, the use and registration o$ the word E!inebraE by other co%panies as part o$ their trade%ar(s belie )an 'iguel.s clai% that it has been the e6clusive user o$ the trade%ar( containing the word E!inebraE since 18D4. Tanduay argues that be$ore a court can issue a writ o$ preli%inary in9unction, it is i%perative that )an 'iguel %ust establish a clear and un%ista(able right that is entitled to protection. )an 'iguel.s alleged e6clusive right to use the generic word E!inebraE is $ar $ro% clear and un%ista(able. Tanduay clai%s that the in9unction issued by the trial court was based on its pre%ature conclusion that E!inebra "apitanE in$ringes E!inebra )an 'iguel.EJ0 In Hevi )trauss M -o. v. -linton *pparelle, Inc.,J1 we held4 +hile the %atter o$ the issuance o$ a writ o$ preli%inary in9unction is addressed to the sound discretion o$ the trial court, this discretion %ust be e6ercised based upon the grounds and in the %anner provided by law. The e6ercise o$ discretion by the trial court in in9unctive %atters is generally not inter$ered with save in cases o$ %ani$est abuse. *nd to deter%ine whether there was grave abuse o$ discretion, a scrutiny %ust be %ade o$ the bases, i$ any, considered by the trial court in granting in9unctive relie$. Ae it stressed that in9unction is the strong ar% o$ equity which %ust be issued with great caution and deliberation, and only in cases o$ great in9ury where there is no co%%ensurate re%edy in da%ages.J2 The -* upheld the trial court.s ruling that )an 'iguel has su$$iciently established its right to prior use and registration o$ the word E!inebraE as a do%inant $eature o$ its trade%ar(. The -* ruled that based on )an 'iguel.s e6tensive, continuous, and substantially e6clusive use o$ the word E!inebra,E it has beco%e distinctive o$ )an 'iguel.s gin productsG thus, a clear and un%ista(able right was shown. +e hold that the -* co%%itted a reversible error. The issue in the %ain case is )an 'iguel.s right to the e6clusive use o$ the %ar( E!inebra.E The two trade%ar(s E!inebra )an 'iguelE and E!inebra "apitanE apparently di$$er when ta(en as a whole, but according to )an 'iguel, Tanduay appropriates the word E!inebraE which is a do%inant $eature o$ )an 'iguel.s %ar(. It is not evident whether )an 'iguel has the right to prevent other business entities $ro% using the word E!inebra.E It is not settled =1> whether E!inebraE is indeed the do%inant $eature o$ the trade%ar(s, =2> whether it is a generic word that as a %atter o$ law cannot be appropriated, or =D> whether it is %erely a descriptive word that %ay be appropriated based on the $act that it has acquired a secondary %eaning. The issue that %ust be resolved by the trial court is whether a word li(e E!inebraE can acquire a secondary %eaning $or gin products so as to prohibit the use o$ the word E!inebraE by other gin %anu$acturers or sellers. This boils down to whether the word E!inebraE is a generic %ar( that is incapable o$ appropriation by gin %anu$acturers. In *sia Arewery, Inc. v. -ourt o$ *ppeals,JD the -ourt ruled that Epale pilsenE are generic words, EpaleE being the actual na%e o$ the color and EpilsenE being the type o$ beer, a light bohe%ian beer with a strong hops $lavor that originated in &ilsen -ity in -5echoslova(ia and beca%e $a%ous in the 'iddle *ges, and hence incapable o$ appropriation by any beer %anu$acturer.J4 'oreover, )ection 12D.1=h>

o$ the I& -ode states that a %ar( cannot be registered i$ it Econsists e6clusively o$ signs that are generic $or the goods or services that they see( to identi$y.E1avvphi1 In this case, a cloud o$ doubt e6ists over )an 'iguel.s e6clusive right relating to the word E!inebra.E )an 'iguel.s clai% to the e6clusive use o$ the word E!inebraE is clearly still in dispute because o$ Tanduay.s clai% that it has, as others have, also registered the word E!inebraE $or its gin products. This issue can be resolved only a$ter a $ullBblown trial. In /ng -hing "ian -huan v. -ourt o$ *ppeals,JJ we held that in the absence o$ proo$ o$ a legal right and the in9ury sustained by the %ovant, the trial court.s order granting the issuance o$ an in9unctive writ will be set aside, $or having been issued with grave abuse o$ discretion. +e $ind that )an 'iguel.s right to in9unctive relie$ has not been clearly and un%ista(ably de%onstrated. The right to the e6clusive use o$ the word E!inebraE has yet to be deter%ined in the %ain case. The trial court.s grant o$ the writ o$ preli%inary in9unction in $avor o$ )an 'iguel, despite the lac( o$ a clear and un%ista(able right on its part, constitutes grave abuse o$ discretion a%ounting to lac( o$ 9urisdiction. Prejudging the Merits of the Case Tanduay alleges that the -*, in upholding the issuance o$ the writ o$ preli%inary in9unction, has pre9udged the %erits o$ the case since nothing is le$t to be decided by the trial court e6cept the a%ount o$ da%ages to be awarded to )an 'iguel.JC )an 'iguel clai%s that neither the -* nor the trial court pre9udged the %erits o$ the case. )an 'iguel states that the -* did not rule on the ulti%ate correctness o$ the trial court.s evaluation and appreciation o$ the evidence be$ore it, but %erely $ound that the assailed /rders o$ the trial court are supported by the evidence on record and that Tanduay was not denied due process.JK )an 'iguel argues that the -* only upheld the trial court.s issuance o$ the T,/ and writ o$ preli%inary in9unction upon a $inding that there was su$$icient evidence on record, as well as legal authorities, to warrant the trial court.s preli%inary $indings o$ $act.J8 The instructive ruling in 'anila International *irport *uthority v. -ourt o$ *ppealsJ9 states4 -onsidering the $arBreaching e$$ects o$ a writ o$ preli%inary in9unction, the trial court should have e6ercised %ore prudence and 9udiciousness in its issuance o$ the in9unction order. +e re%ind trial courts that while generally the grant o$ a writ o$ preli%inary in9unction rests on the sound discretion o$ the court ta(ing cogni5ance o$ the case, e6tre%e caution %ust be observed in the e6ercise o$ such discretion. The discretion o$ the court a quo to grant an in9unctive writ %ust be e6ercised based on the grounds and in the %anner provided by law. Thus, the -ourt declared in !arcia v. Aurgos4 EIt has been consistently held that there is no power the e6ercise o$ which is %ore delicate, which requires greater caution, deliberation and sound discretion, or %ore dangerous in a doubt$ul case, than the issuance o$ an in9unction. It is the strong ar% o$ equity that should never be e6tended unless to cases o$ great in9ury, where courts o$ law cannot a$$ord an adequate or co%%ensurate re%edy in da%ages. 1very court should re%e%ber that an in9unction is a li%itation upon the $reedo% o$ action o$ the de$endant and should not be granted lightly or precipitately. It should be granted only when the court is $ully satis$ied that the law per%its it and the e%ergency de%ands it.E =1%phasis in the original> +e believe that the issued writ o$ preli%inary in9unction, i$ allowed, disposes o$ the case on the %erits as it e$$ectively en9oins the use o$ the word E!inebraE without the bene$it o$ a $ullBblown trial. In ,ivas v. )ecurities and 16change -o%%ission,C0 we ruled that courts should avoid issuing a writ o$ preli%inary in9unction which would in e$$ect

dispose o$ the %ain case without trial. The issuance o$ the writ o$ preli%inary in9unction had the e$$ect o$ granting the %ain prayer o$ the co%plaint such that there is practically nothing le$t $or the trial court to try e6cept the plainti$$.s clai% $or da%ages.

G.R. No. 1)0*++

M$, 4, 2006

ELIDAD !"# $%& 'I#LETA !"#, &etitioners, vs. "#N. ENRIC# LAN(ANAS, .25s:&:%g 1u&g5 o> t;5 R5g:o%$< T2:$< Cou2t o> M$%:<$ @ B2$%9; + $%& SUMMER'ILLE GENERAL MERC"ANDISING, ,espondents. rre!arable njur" 71-I)I/0 Tanduay points out that the supposed da%ages that )an 'iguel will su$$er as a result o$ Tanduay.s in$ringe%ent or un$air co%petition cannot be considered irreparable because the da%ages are susceptible o$ %athe%atical co%putation. Tanduay invo(es )ection 1JC.1 o$ the I& -odeC1 as the basis $or the co%putation o$ da%ages.C2 )an 'iguel avers that it stands to su$$er irreparable in9ury i$ the %anu$acture and sale o$ Tanduay.s E!inebra "apitanE are not en9oined. )an 'iguel clai%s that the rough esti%ate o$ the da%agesCD it would incur is si%ply a guide $or the trial court in co%puting the appropriate doc(et $ees. )an 'iguel asserts that the $ull e6tent o$ the da%age it would su$$er is di$$icult to %easure with any reasonable accuracy because it has invested hundreds o$ %illions over a period o$ 1K0 years to establish goodwill and reputation now being en9oyed by the E!inebra )an 'iguelE %ar(.C4 )an 'iguel re$utes Tanduay.s clai% that the in9ury which )an 'iguel stands to su$$er can be %easured with reasonable accuracy as the legal $or%ula to deter%ine such in9ury is provided in )ection 1JC.1 o$ the I& -ode. )an 'iguel reasons that i$ Tanduay.s clai% is upheld, then there would never be a proper occasion to issue a writ o$ preli%inary in9unction in relation to co%plaints $or in$ringe%ent and un$air co%petition, as the in9ury which the owner o$ the %ar( su$$ers, or stands to su$$er, will always be susceptible o$ %athe%atical co%putation.CJ In Hevi )trauss M -o. v. -linton *pparelle, Inc.,CC this -ourt upheld the appellate court.s ruling that the da%ages Hevi )trauss M -o. had su$$ered or continues to su$$er %ay be co%pensated in ter%s o$ %onetary consideration. This -ourt, quoting Government Service Insurance System v. Florendo,CK held4 6 6 6 a writ o$ in9unction should never issue when an action $or da%ages would adequately co%pensate the in9uries caused. The very $oundation o$ the 9urisdiction to issue the writ o$ in9unction rests in the probability o$ irreparable in9ury, inadequacy o$ pecuniary co%pensation and the prevention o$ the %ultiplicity o$ suits, and where $acts are not shown to bring the case within these conditions, the relie$ o$ in9unction should be re$used. Aased on the a$$idavits and %ar(et survey report sub%itted during the in9unction hearings, )an 'iguel has $ailed to prove the probability o$ irreparable in9ury which it will stand to su$$er i$ the sale o$ E!inebra "apitanE is not en9oined. )an 'iguel has not presented proo$ o$ da%ages incapable o$ pecuniary esti%ation. *t %ost, )an 'iguel only clai%s that it has invested hundreds o$ %illions over a period o$ 1K0 years to establish goodwill and reputation now being en9oyed by the E!inebra )an 'iguelE %ar( such that the $ull e6tent o$ the da%age cannot be %easured with reasonable accuracy. +ithout the sub%ission o$ proo$ that the da%age is irreparable and incapable o$ pecuniary esti%ation, )an 'iguel.s clai% cannot be the basis $or a valid writ o$ preli%inary in9unction. ?;525>o25, we GRANT the petition. +e SET ASIDE the 7ecision o$ the -ourt o$ *ppeals dated 9 :anuary 2004 and the ,esolution dated 2 :uly 2004 in -*B!.,. )& 0o. K9CJJ. +e declare '#ID the /rder dated 1K /ctober 200D and the corresponding writ o$ preli%inary in9unction issued by Aranch 214 o$ the ,egional Trial -ourt o$ 'andaluyong -ity in I& -ase 0o. '-B0DB01 and -ivil -ase 0o. '-B 0DB0KD. C"IC#-NA(ARI#, J.: -ulled $ro% the records are the $ollowing antecedent $acts4 )hun <ih -he%istry 2actory =)<-2>, a business e6isting and operating in Taiwan and engaged in the %anu$acture and sale o$ -hin -hun )u -rea%s?-os%etics, appointed <oung 2actor 1nterprises in the &hilippines, owned and operated by @uintin -heng also (nown as "ho )eng 3io(, as its distributor o$ -hin -hun )u products in the &hilippines $or a ter% o$ two years beginning 19K8.1 @uintin -heng registered with the Aureau o$ 2ood and 7rugs =A2*7> as distributor o$ -hin -hun )u products. @uintin -heng subsequently secured a supple%ental registration $or -hin -hun )u and device.2 This supple%ental registration was ordered cancelled by the Aureau o$ &atents, Trade%ar(s and Technology Trans$erD on the ground o$ $ailure o$ the registrant to $ile the required a$$idavit o$ nonBuse as required by )ection 12 o$ ,epublic *ct 0o. 1CC, as a%ended.4 0otwithstanding this cancellation, @uintin -heng e6ecuted on D0 :anuary 1990 an *ssign%ent o$ a ,egistered Trade%ar(J and a )upple%entary 7eed o$ *ssign%entC dated 2J 0ove%ber 1991 wherein he sold all his right, title, interest and goodwill in the trade%ar( -hin -hun )u and device to petitioner 1lidad "ho. In the %eanti%e, ani%osity arose between )<-2 and @uintin -heng resulting in the ter%ination o$ their distributorship agree%ent on D0 /ctober 1990.K -onsequently, on D0 0ove%ber 1990, )<-2 appointed respondent )u%%erville !eneral 'erchandising, represented by *ng Tia% -hay and ;ictor -hua, as its e6clusive i%porter, reBpac(er and distributor o$ -hin -hun )u products in the &hilippines8 $or a period o$ $ive years or until 'ay 200J. )<-2 $urther e6ecuted a )pecial &ower o$ *ttorney dated 11 )epte%ber 1991 in $avor o$ )u%%erville !eneral 'erchandising granting it the authority to $ile co%plaints against usurpers o$ -hin -hun )u trade%ar(s?tradena%e.9 2ro% the $oregoing incidents arose several 9udicial and quasiB9udicial proceedings. 1) Civil Case o. !-"1-1#"$% &e'ore the Re(ional )rial Court *R)C) o' !ue+on City, -ranch "# /n 20 7ece%ber 1991, 1lidad "ho?"1- Haboratory $iled a -o%plaint $or In9unction and 7a%ages against *ng Tia% -hay and )u%%erville !eneral 'erchandising be$ore the ,T- o$ @ue5on -ity, Aranch 90, doc(eted as -ivil -ase 0o. @B91B1092C. &lainti$$ therein 1lidad "ho?"1- Haboratory sought to en9oin de$endants *ng Tia% -hay and )u%%erville !eneral 'erchandising $ro% using the na%e -hin -hun )u in their crea% products. /n 22 :anuary 199D, a decision in -ivil -ase 0o. @B91B1092C was rendered, the dispositive portion o$ which provides4 *--/,7I0!H<, 9udg%ent is hereby rendered4

1. 7eclaring that plainti$$ is not legally authori5ed to use the trade%ar( E-3I0 -380 )8E and upholding the right o$ de$endant )u%%erville !eneral 'erchandising M -o. to use said trade%ar( as authori5ed by )hun <ih -he%istry 2actory o$ TaiwanG 2. 7eclaring plainti$$ to have the right to use the copyright clai% on E/;*H 2*-I*H -,1*' -/0T*I01,?-*)1E by virtue o$ -erti$icate o$ -opyright ,egistration 0o. DC8K issued by the 0ational Hibrary on 'ay 2D, 1991G D. 0o award o$ da%agesG 4. -ounsels $or plainti$$ and de$endants are awarded &KJ,000.00 each as attorney.s $eesG and J. Aoth parties to pay proportionate $ees.10 Aoth parties appealed the ,T- decision to the -ourt o$ *ppeals, doc(eted as -*B!.,. -; 0/. 4804D entitled, E1lidad -. "ho, doing business under the style o$ "1- -os%etic Haboratory v. )u%%erville !eneral 'erchandising and -o., et al.E In a decision11 dated 22 0ove%ber 1999, the appellate court a$$ir%ed in toto the decision o$ the trial court.12 1lidad "ho elevated the case to this -ourt, doc(eted as !.,. 0o. 144100. In a resolution dated 28 *ugust 2000, we denied the petition. +e held that4 The issue is who, between petitioner 1lidad -. "ho and respondent )u%%erville !eneral 'erchandising and -o%pany has the better right to use the trade%ar( E-hin -hun )uE on their $acial crea% productF +e agree with both the -ourt o$ *ppeals and the trial court that )u%%erville !eneral 'erchandising and -o%pany has the better right to use the trade%ar( E-hin -hun )uE on its $acial crea% product by virtue o$ the e6clusive i%portation and distribution rights given to it by )hun <ih -he%istry 2actory o$ Taiwan on 0ove%ber 20, 1990 a$ter the latter cancelled and ter%inated on /ctober D0, 1990 its )ole 7istributorship *gree%ent with one @uintin -heng, who assigned and trans$erred his rights under said agree%ent to petitioner 1lidad -. "ho on :anuary D1, 1990. *s correctly held by the -ourt o$ *ppeals, petitioner "ho is not the author o$ the trade%ar( E-hin -hun )uE and his only clai% to the use o$ the trade%ar( is based on the 7eed o$ *gree%ent e6ecuted in his $avor by @uintin -heng. Ay virtue thereo$, he registered the trade%ar( in his na%e. The registration was a patent nullity because petitioner is not the creator o$ the trade%ar( E-hin -hun )uE and, there$ore, has no right to register the sa%e in his na%e. 2urther%ore, the authority o$ @uintin -heng to be the sole distributor o$ -hin -hun )u in the &hilippines had already been ter%inated by )hun <ih -he%istry o$ Taiwan. +ithal, he had no right to assign or to trans$er the sa%e to petitioner "ho. +31,12/,1, the instant petition is hereby denied due course.1D $) -F./ Cosmetic Case o. CM-#0#-"1 *t the other end o$ the spectru%, due to the proli$eration o$ $a(e -hin -hun )u products, )u%%erville !eneral 'erchandising $iled a -o%plaint14 be$ore the A2*7 against "1- -os%etic Haboratory owned by 1lidad "ho. In a resolution o$ the A2*7 dated 4 2ebruary 1992, it ruled that4 +31,12/,1, the brand na%e clearance o$ --) in $avor o$ "1- is recalled and cos%etic registration nu%ber 7,BQC11DBK8 dtd 11?1K?K8 is T1'&/,*,IH< -*0-1HH17 until "1- applies to change or a%end the brand na%e --) it is now using. 2or this purpose, "1- is hereby ordered to retrieve all locally produced -hin -hun )u &earl -rea% $or relabelling as soon as the a%end%ent o$ its brand na%e

has been approved by this Aureau with the corresponding a%ended -erti$icate o$ ,egistration. )u%%erville.s application to register =renew or reinstate> --) 'edicated -rea% under 7,BQC11DBK8 in the na%e o$ )hun <ih -he%istry 2actory is herewith approved $or processing at A2*7B &roduct )ervices 7ivision.1J 1) Criminal Case o. ##-121$%1 &e'ore the R)C o' Manila, -ranch 1

This is the case $iled be$ore the ,T- o$ 'anila, Aranch 1, entitled, E&eople o$ the &hilippines v. 1lidad and ;ioleta "ho and ,oger "ho,E pursuant to the 7/: ,esolution in I.). 0o. 00*B02D9C and I.). 0o. 00AB109KD, ordering the $iling o$ a cri%inal co%plaint against 1lidad, ,oger and ;ioleta "ho.1C &rior to the $iling o$ -ri%inal -ase 0o. 00B18D2C1 be$ore the ,T- o$ 'anila, Aranch 1, on 18 :anuary 2000, ;ictor -hua, representing )u%%erville !eneral 'erchandising, $iled a -o%plaint $or 8n$air -o%petition, doc(eted as I.). 0o. 00*B02D9C entitled, E)u%%erville !eneral 'erchandising, represented by ;ictor -hua v. 1lidad and ;ioleta "ho,E be$ore the /$$ice o$ the -ity &rosecutor o$ 'anila. 1lidad and ;ioleta "ho $iled their counterBa$$idavit in the -o%plaint $or 8n$air -o%petition which served as their countercharge against *ng Tia% -hay and ;ictor -hua, li(ewise $or 8n$air -o%petition, doc(eted as I.). 0o. //AB109KD. /n 29 'arch 2000, the /$$ice o$ the -ity &rosecutor granted the consolidation o$ both I.). 0o. 00*B02D9C and I.). 0o. 00AB109KD. /n 2J *pril 2000, *ssistant -ity &rosecutor ,ector 'acapagal rendered a 9oint resolution dis%issing both the -o%plaint and countercharge. This resolution o$ dis%issal was reversed by the review resolution1K dated D1 'ay 2000 issued by *ssistant -ity &rosecutor 1l%er -alledo who directed the $iling o$ an in$or%ation against 1lidad "ho, ,oger "ho and ;ioleta "ho $or violation o$ )ection 1C8.D=a> in relation to )ections 1C8 and 1K0, ,epublic *ct 0o. 829D =The Intellectual &roperty -ode>.18 /n 1K *ugust 2000, 7epart%ent o$ :ustice =7/:> 8ndersecretary ,egis &uno issued a resolution19 dis%issing the petition $or review $iled by 1lidad and ;ioleta "ho and upholding the ruling o$ *ssistant -ity &rosecutor -alledo, directing the $iling o$ charges against the "hos. 1lidad and ;ioleta "ho $iled a %otion $or reconsideration, and in a co%plete turnabout, on 28 )epte%ber 2001, a resolution20 was issued by then 7/: )ecretary 3ernando &ere5 again dis%issing the -o%plaint and countercharge in I.). 0o. 00*B02D9C and I.). 0o. 00AB 109KD $or lac( o$ %erit. )u%%erville !eneral 'erchandising accordingly $iled a %otion $or reconsideration o$ this 7/: resolution dated 20 )epte%ber 2001. In view o$ the latest 7/: resolution ordering the dis%issal o$ the co%plaint o$ )u%%erville !eneral 'erchandising against the "hos, the ,T- o$ 'anila, Aranch 1, issued an /rder dated 24 /ctober 2001 directing the dis%issal o$ the -o%plaint in -ri%inal -ase 0o. 00B 18D2C1.21 )u%%erville !eneral 'erchandising $iled with the ,T- o$ 'anila, Aranch 1, a %otion $or reconsideration o$ its /rder o$ dis%issal o$ -ri%inal -ase 0o. 00B18D2C1. 2or their part, 1lidad and ;ioleta "ho also $iled with the sa%e court a supple%ental %otion insisting that the /rder dis%issing -ri%inal -ase 0o. 00B18D2C1 cannot be set aside because to do so would, in e$$ect, reinstate the said cri%inal case and would already constitute double 9eopardy. *cting on these %otions, the ,T- o$ 'anila, Aranch 1, issued an /rder dated 21 *ugust 2002 resolving the %otions in the $ollowing %anner4 The $oregoing duly established $acts indubitably supports accused.s contention that a reB$iling RoS$ the In$or%ation would put the% in double 9eopardy. *s ruled by the )upre%e -ourt in 'arcelo v. -ourt o$ *ppeals, 2DJ )-,* D9, upon withdrawal o$ the In$or%ation, which is the logical consequence o$ the grant o$ the 'otion to +ithdraw, there no longer re%ained any case to dis%iss. *ccordingly, $inding %erit in the 'otion $or ,econsideration, the sa%e is hereby granted.

The in$or%ation against accused is hereby dis%issed. The -ler( o$ -ourt is hereby directed to return to the accused the cash bonds posted by the latter $or their provisional liberty upon presentation o$ the requisite receipts. The ruling renders the re%aining incidents %oot and acade%ic.22 Therea$ter, on 1K )epte%ber 2002, the 7/: )ecretary, 3ernando A. &ere5, granted the pending %otion o$ )u%%erville !eneral 'erchandising $or reconsideration o$ the 7/: resolution2D dated 28 )epte%ber 2001, which dis%issed the -o%plaint o$ %ovant )u%%erville !eneral 'erchandising in I.). 0o. 00*B02D9C, and accordingly issued another resolution vacating the questioned 28 )epte%ber 2001 resolution and directing the -ity &rosecutor o$ 'anila to continue with the cri%inal prosecution o$ the "hos $or 8n$air -o%petition. 1lidad and ;ioleta "ho $iled a %otion $or reconsideration o$ the resolution dated 1K )epte%ber 2002 be$ore the 7/:. The 7/:,24 thru the new )ecretary )i%eon *. 7atu%anong denied that double 9eopardy lies, in a resolution dated 1K :uly 200D, declared that4 *$ter an evaluation o$ the record, we resolve to deny the %otion $or reconsideration. 2or double 9eopardy to attach, the $ollowing require%ents %ust be present4 =1> upon a valid indict%entG =2> be$ore a co%petent courtG =D> a$ter arraign%entG =4> when a valid plea has been enteredG and =J> when the de$endant was convicted, acquitted, or the case was dis%issed or otherwise ter%inated without the e6press consent o$ the accused. =&eople v. -ourt o$ *ppeals, D08 )-,* C8K>. In the instant case, it appears that the case was ter%inated with the e6press consent o$ the respondent, as the cri%inal case was dis%issed upon the e6press application o$ the accused. 3er action in having the case dis%issed constitutes a waiver o$ her constitutional prerogative against double 9eopardy as she thereby prevented the court $ro% proceeding to trial on the %erits and rendering a 9udg%ent o$ conviction against her.2J *t odds with the $inal 7/: resolution, the ,T- o$ 'anila, Aranch 1, handling -ri%inal -ase 0o. 00B18D2C1, held in its /rder dated 2 *pril 200D that4 -onsidering the tenors o$ the orders o$ dis%issal, whatever %aybe the %erits o$ the 'otion $or ,econsideration, revival o$ the case is now barred by the i%pregnable wall o$ double 9eopardy. *--/,7I0!H<, the 'otion $or ,econsideration dated )epte%ber 10, 2002 $iled by the private prosecutor and sub9ect o$ the 'otion to ,esolve is hereby denied with $inality. The -ler( o$ -ourt is hereby directed to return to the accused the cash bond posted by the% $or their provisional liberty upon presentation o$ the required receipts.2C Thus, )u%%erville !eneral 'erchandising raised its case to the -ourt o$ *ppeals, doc(eted as -*B!.,. )& 0o. KK180, assailing the /rder dated 24 /ctober 2001 o$ the ,T- o$ 'anila, Aranch 1, dis%issing -ri%inal -ase 0o. 00B18D2C1, as well as the /rders dated 21 *ugust 2002 and 2 *pril 200D o$ the sa%e court a$$ir%ing its previous order o$ dis%issal. In a decision o$ the -ourt o$ *ppeals dated 2C 'ay 2004 in -*B!.,. )& 0o. KK180,2K the -ourt denied due course to the petition o$ )u%%erville !eneral 'erchandising and a$$ir%ed the ruling o$ the trial court that, indeed, double 9eopardy has set in. The decision o$ the -ourt o$ *ppeals in -*B!.,. )& 0o. KK180 is now the sub9ect o$ a &etition $or ,eview be$ore this -ourt, doc(eted as !.,. 0o. 1CDK41 entitled, )u%%erville !eneral 'erchandising and -o., Inc. v. 1lidad "ho.E28

0) Search 3arrant o. ""-14$# &e'ore the R)C o' Manila, -ranch 5 )hortly be$ore instituting -ri%inal -ase 0o. 00B18D2C1 against the "hos, or on K :anuary 2000, )u%%erville !eneral 'erchandising applied $or the issuance o$ a search warrant against the )pouses 1lidad and ;ioleta "ho and ,oger "ho, since they persisted in %anu$acturing and selling -hin -hun )u products despite the A2*7 order directing the% to re$rain $ro% doing so. The application was doc(eted as )earch +arrant 0o. 99B1J20 be$ore the ,T- o$ 'anila, Aranch K, which was presided over by respondent herein, :udge 1nrico *. Han5anas. * hearing on the application was held on 10 :anuary 200029 and the search warrant was issued against 1lidad, ;ioleta and ,oger "ho on the sa%e day.D0 Its en$orce%ent led to the sei5ure o$ several -hin -hun )u products.D11avvphil.net /n 1K :anuary 2000, 1lidad, ;ioleta and ,oger "ho $iled be$ore the ,T- o$ 'anila, Aranch K, a %otion to quash the search warrant and $or the return o$ the ite%s unlaw$ully sei5ed. The %otion was opposed by )u%%erville !eneral 'erchandising. In an /rderD2 dated D *pril 2000, the ,T- o$ 'anila, Aranch K, denied 1lidad and ;ioleta "ho.s %otion to quash and to return the sei5ed articles $or lac( o$ %erit.DD 1lidad and ;ioleta "ho $iled a %otion $or reconsideration and %otion to trans$er the proceedings in ,T- o$ 'anila, Aranch K, to ,T- o$ 'anila, Aranch 1, citing )upre%e -ourt *d%inistrative /rder 11DB9JD4 designating the ,T- o$ 'anila, Aranch 1, as an Intellectual &roperty -ourt. The ,T- o$ 'anila, Aranch K, denied these %otions in an /rder dated J :une 2000,DJ e6plaining that4 *nent the 'otion to -o%pel this Aranch to trans$er the case to Aranch 1 o$ this -ourt, su$$ice it to say that the cases $or violation o$ *rts. 188 and 189 o$ the ,evised &enal -ode =now under the Intellectual &roperty Haw> are those that are already $iled in court a$ter the proper preli%inary investigation and not cases $or application $or search warrant involving probable violation o$ said law. )upre%e -ourt *d%inistrative -ircular 0o. 11DB9J itsel$ designates the alluded court or branch thereo$ to try and decide which clearly e6cludes cases?applications $or search warrant which obviously does not involve trying and deciding case $or violation o$ the Intellectual &roperty law. /n respondent.s 'otion $or ,econsideration, the -ourt $inds their argu%ents therein a rehash o$ the issues and argu%ents raised in their 'otion to @uash. +31,12/,1, $or lac( o$ %erit, respondents. 'otion $or ,econsideration and 'otion to Trans$er, are hereby 710I17. DC 1lidad and ;ioleta "ho $iled a &etition $or -ertiorari and &reli%inary 'andatory In9unction,DK doc(eted as -*B!.,. )& 0o. C0084, be$ore the -ourt o$ *ppeals questioning the a$ore%entioned /rders o$ the ,T- o$ 'anila, Aranch K. * decision dated C *ugust 2001D8 was rendered by the -ourt o$ *ppeals denying the petition. It upheld )earch +arrant 0o. 99B1J20 as having been validly issued and properly e6ecuted and, thus, there is no basis $or the return o$ the goods sei5ed. * %otion $or reconsideration $iled by the "hos was denied by the -ourt o$ *ppeals in an /rder dated 1C 0ove%ber 2001.D9 1lidad and ;ioleta "ho $iled a supple%ent to their 'otion $or ,econsideration dated 20 0ove%ber 200140 be$ore the -ourt o$ *ppeals in -*B!.,. )& 0o. C0084, reiterating their prayer $or the quashal o$ )earch +arrant 0o. 99B1J20 and the return o$ the sei5ed ite%s. The -ourt o$ *ppeals, in a resolution dated 4 7ece%ber 2001,41 %erely noted the %otion in view o$ its earlier resolution rendered on 1C 0ove%ber 2001 already denying 1lidad and ;ioleta "ho.s 'otion $or ,econsideration. &ained by the decisions and orders o$ the trial court and appellate court, petitioners 1lidad and ;ioleta "ho $iled the present petition praying that the decision o$ the -ourt o$ *ppeals in -*B!.,. )& 0o. C0084 dated C *ugust 2001 be reversed and set aside, and a new decision be issued granting the quashal o$ )earch +arrant 0o. 99B 1J20 and ordering the return o$ the ite%s unlaw$ully sei5ed.42

In their 'e%orandu%, petitioners raise the $ollowing issues $or resolution4 +31T31, /, 0/T T31 -/8,T /2 *&&1*H) 1,,17 I0 7I),1!*,7I0! T31 +IT37,*+*H /2 T31 I02/,'*TI/0 2/, 802*I, -/'&1TITI/0 *!*I0)T T31 &1TITI/01,) I0 A,*0-3 1 /2 ,T-B'*0IH* *) * ,1)8HT /2 T31 ,1)/H8TI/0 /2 T31 71&*,T'10T /2 :8)TI-1 2I07I0! 0/ &,/A*AH1 -*8)1. +31T31, /, 0/T T31 -/8,T /2 *&&1*H) 1,,17 I0 2I07I0! T3*T 0/ !,*;1 *A8)1 /2 7I)-,1TI/0 +*) -/''ITT17 A< 3/0/,*AH1 :87!1 10,I-/ H*0T*0*) I0 2I07I0! T3*T &,/A*AH1 -*8)1 1QI)T17 *!*I0)T T31 &1TITI/01,) 2/, T31 I))8*0-1 /2 )1*,-3 +*,,*0T 0/. 99B1J20. +31T31, /, 0/T T31 -/8,T /2 *&&1*H) 1,,17 I0 2I07I0! T3*T A,*0-3 K /2 T31 ,1!I/0*H T,I*H -/8,T /2 '*0IH* 3*7 :8,I)7I-TI/0 T/ I))81 )1*,-3 +*,,*0T 0/. 99B1J20. +31T31, /, 0/T T31 -/8,T /2 *&&1*H) 1,,17 I0 2I07I0! T3*T 0/ !,*;1 *A8)1 /2 7I)-,1TI/0 +*) -/''ITT17 A< 3/0/,*AH1 :87!1 10,I-/ H*0T*0*) I0 ,8HI0! T3*T )1*,-3 +*,,*0T 0/. 99B1J20 +*) H*+28HH< 1Q1-8T17. +31T31, /, 0/T T31 -/8,T /2 *&&1*H) 1,,17 I0 2I07I0! T3*T 0/ !,*;1 *A8)1 /2 7I)-,1TI/0 +*) -/''ITT17 A< 3/0/,*AH1 :87!1 10,I-/ H*0T*0*) I0 0/T /,71,I0! T31 ,1T8,0 /2 T31 IT1') )1IT17 8071, )1*,-3 +*,,*0T 0/. 99B1J20.4D The petition is devoid o$ %erit. *s to the $irst issue, it %ust be noted that the dis%issal o$ -ri%inal -ase 0o. 00B18D2C1 by the ,T- o$ 'anila, Aranch 1, was initially by virtue o$ the resolution o$ the 7/: dated 28 )epte%ber 200144 ordering the dis%issal o$ the cri%inal case $or un$air co%petition. This order o$ dis%issal, however, was again set aside by the 7/: in its resolution dated 1K )epte%ber 20024J directing that appropriate in$or%ation $or 8n$air -o%petition be $iled against the "hos. The %otion $or reconsideration o$ 1lidad and ;ioleta "ho was denied by the 7/: in its resolution dated 1K :uly 200D.4C This is the latest e6isting resolution o$ the 7/: on the %atter, dated 1K :uly 200D, which a$$ir%ed the resolution o$ the then 7/: )ecretary 3ernando A. &ere5 directing the -ity &rosecutor o$ 'anila to $ile the appropriate in$or%ation against 1lidad and ;ioleta "ho $or 8n$air -o%petition as de$ined and penali5ed under )ection 1C8.D=a>, in relation to )ections 1C8 and 1K0 o$ ,ep. *ct 0o. 829D or The Intellectual &roperty -ode o$ the &hilippines. There$ore, at the ti%e o$ the dis%issal o$ -ri%inal -ase 0o. 00B18D2C1 by the ,T- o$ 'anila, Aranch 1, on 24 /ctober 2001, the 7/: resolution on I.). 0o. 00*B02D9C on which -ri%inal -ase 0o. 00B18D2C1 is based has not been written 'inis as yet. Ta(ing into consideration these circu%stances, the -ourt o$ *ppeals did not err in a$$ir%ing the /rder o$ the ,T- o$ 'anila, Aranch K, denying the %otion to quash $iled by the herein petitioners because, subsequently, the 7/: still ordered the $iling o$ charges against 1lidad and ;ioleta "ho. *s to whether the ,T- o$ 'anila, Aranch 1, properly dis%issed the cri%inal case against the "hos despite the resolution o$ the 7/: ordering their cri%inal prosecution, we cannot dwell %ore on the issue because it is already the sub9ect o$ !.,. 0o. 1CDK41 be$ore another division o$ this -ourt. Issues two, three and $our, on the other hand, boil down to the central issue o$ whether or not the -ourt o$ *ppeals erred in upholding the ,T- o$ 'anila, Aranch K, in its $indings o$ probable cause to issue a search warrant. *lso resting on how we shall resolve the $oregoing issue is the $i$th and last issue in the &etition at bar which questions the re$usal by both the -ourt o$ *ppeals and the ,T- o$ 'anila, Aranch K, to return the sei5ed ite%s.

The issuance o$ )earch +arrants is governed by ,ule 12C o$ the ,evised ,ules o$ -ourt reproduced below4 )1-TI/0 1. )earch warrant de$ined. L * search warrant is an order in writing issued in the na%e o$ the &eople o$ the &hilippines, signed by a 9udge and directed to a peace o$$icer, co%%anding hi% to search $or personal property described therein and bring it be$ore the court. )1-. 2. Court 6here application 'or search 6arrant shall &e 'iled. B *n application $or search warrant shall be $iled with the $ollowing4 a> *ny court within whose territorial 9urisdiction a cri%e was co%%itted. b> 2or co%pelling reasons stated in the application, any court within the 9udicial region where the cri%e was co%%itted i$ the place o$ the co%%ission o$ the cri%e is (nown, or any court within the 9udicial region where the warrant shall be en$orced. 3owever, i$ the cri%inal action has already been $iled, the application shall only be %ade in the court where the cri%inal action is pending. )1-. D. &ersonal property to be sei5ed. L * search warrant %ay be issued $or the search and sei5ure o$ personal property4 =a> )ub9ect o$ the o$$enseG =b> )tolen or e%be55led and other proceeds or $ruits o$ the o$$enseG or =c> 8sed or intended to be used as the %eans o$ co%%itting an o$$ense. )1-. 4. ,equisites $or issuing search warrant. L * search warrant shall not issue e6cept upon probable cause in connection with one speci$ic o$$ense to be deter%ined personally by the 9udge a$ter e6a%ination under oath or a$$ir%ation o$ the co%plainant and the witnesses he %ay produce, and particularly describing the place to be searched and the things to be sei5ed which %ay be anywhere in the &hilippines. )1-.J. 16a%ination o$ co%plainantG record. L The 9udge %ust, be$ore issuing the warrant, personally e6a%ine in the $or% o$ searching questions and answers, in writing and under oath, the co%plainant and the witnesses he %ay produce on $acts personally (nown to the% and attach to the record their sworn state%ents together with the a$$idavits sub%itted. )1-. C. Issuance and $or% o$ search warrant. L I$ the 9udge is satis$ied o$ the e6istence o$ $acts upon which the application is based or that there is probable cause to believe that they e6ist, he shall issue the warrant, which %ust be substantially in the $or% prescribed by these ,ules. +hat constitutes Eprobable causeE is well settled. In 'icroso$t -orporation v. 'a6icorp, Inc.,4K we de$ined probable cause as $ollows4 &robable cause %eans Esuch reasons, supported by $acts and circu%stances as will warrant a cautious %an in the belie$ that his action and the %eans ta(en in prosecuting it are legally 9ust and proper.E Thus, probable cause $or a search warrant requires such $acts and circu%stances that would lead a reasonably prudent %an to believe that an o$$ense has been co%%itted and the ob9ects sought in connection with that o$$ense are in the place to be searched. 6666 The deter%ination o$ probable cause does not call $or the application o$ rules and standards o$ proo$ that a 9udg%ent o$ conviction requires

a$ter trial on the %erits. *s i%plied by the words the%selves, Eprobable causeE is concerned with probability, not absolute or even %oral certainty. The prosecution need not present at this stage proo$ beyond reasonable doubt. The standards o$ 9udg%ent are those o$ a reasonably prudent %an, not the e6acting calibrations o$ a 9udge a$ter a $ullBblown trial. 0o law or rule states that probable cause requires a speci$ic (ind o$ evidence. 0o $or%ula or $i6ed rule $or its deter%ination e6ists. &robable cause is deter%ined in the light o$ conditions obtaining in a given situation. 666 In -olu%bia &ictures, Inc. v. -ourt o$ *ppeals,48 we e6plained $urther that4 *lthough the ter% Eprobable causeE has been said to have a wellB de$ined %eaning in the law, the ter% is e6ceedingly di$$icult to de$ine, in this case, with any degree o$ precisionG indeed, no de$inition o$ it which would 9usti$y the issuance o$ a search warrant can be $or%ulated which would cover every state o$ $acts which %ight arise, and no $or%ula or standard, or hard and $ast rule, %ay be laid down which %ay be applied to the $acts o$ every situation. *s to what acts constitute probable cause see% incapable o$ de$inition. There is, o$ necessity, no e6act test. *t best, the ter% Eprobable causeE has been understood to %ean a reasonable ground o$ suspicion, supported by circu%stances su$$iciently strong in the%selves to warrant a cautious %an in the belie$ that the person accused is guilty o$ the o$$ense with which he is chargedG or the e6istence o$ such $acts and circu%stances as would e6cite an honest belie$ in a reasonable %ind acting on all the $acts and circu%stances within the (nowledge o$ the %agistrate that the charge %ade by the applicant $or the warrant is true. &robable cause does not %ean actual and positive cause, nor does it i%port absolute certainty. The deter%ination o$ the e6istence o$ probable cause is not concerned with the question o$ whether the o$$ense charged has been or is being co%%itted in $act, or whether the accused is guilty or innocent, but only whether the a$$iant has reasonable grounds $or his belie$. The require%ent is less than certainty or proo$, but %ore than suspicion or possibility. In &hilippine 9urisprudence, probable cause has been uni$or%ly de$ined as such $acts and circu%stances which would lead a reasonable, discreet and prudent %an to believe that an o$$ense has been co%%itted, and that the ob9ects sought in connection with the o$$ense are in the place sought to be searched. It being the duty o$ the issuing o$$icer to issue, or re$use to issue, the warrant as soon as practicable a$ter the application there$or is $iled, the $acts warranting the conclusion o$ probable cause %ust be assessed at the ti%e o$ such 9udicial deter%ination by necessarily using legal standards then set $orth in law and 9urisprudence, and not those that have yet to be cra$ted therea$ter. +e also declared in &eople v. -hiu,49 citing Malaloan v. Court o' .ppeals,J0 that a search warrant is %erely a 9udicial process designed by the ,ules to respond only to an incident in the %ain case, i$ one has already been instituted, or in anticipation thereo$. It bears repeating that the proceedings be$ore the ,T- o$ 'anila, Aranch K, was solely $or the issuance o$ )earch +arrant 0o. 99B1J20, while the %ain case against 1lidad and ;ioleta "ho $or violation o$ The Intellectual &roperty -ode was instituted only later on as -ri%inal -ase 0o. 00B18D2C1 be$ore the ,T- o$ 'anila, Aranch 1. +hat is be$ore us in the &etition at bar is the validity o$ the search warrant issued in the proceedings in )earch +arrant 0o. 99B1J20. * perspicacious e6a%ination o$ the records reveal that the ,T- o$ 'anila, Aranch K, $ollowed the prescribed procedure $or the issuance o$ )earch +arrant 0o. 99B1J20, na%ely, =1> the e6a%ination under oath or a$$ir%ation o$ the -o%plainant and his witnesses and, in this case, :udge 1nrico *. Han5anas personally e6a%ined co%plainantB policewo%an )&/4 0edita *lvario Aalagbis, and 'r. ;ictor -hua, the

representative?o$$icer o$ )u%%erville !eneral 'erchandising, at the hearing on the application $or )earch +arrant 0o. 99B1J20 held on 10 :anuary 2000G =2> an e6a%ination personally conducted by then &residing :udge Han5anas, in the $or% o$ searching questions and answers, in writing and under oath, o$ the co%plainant and witnesses on $acts personally (nown to the%G and =D> the ta(ing o$ sworn state%ents, together with the a$$idavits sub%itted, which were duly attached to the records.J1 In deter%ining probable cause in the issuance o$ a search warrant, the oath required %ust re$er to the truth o$ the $acts within the personal (nowledge o$ the applicant or his witnesses, because the purpose thereo$ is to convince the co%%itting %agistrate, not the individual %a(ing the a$$idavit and see(ing the issuance o$ the warrant, o$ the e6istence o$ probable cause.J2 2ro% the a$$idavit dated K :anuary 2000 o$ )&/4 0edita Aalagbis, in support o$ the application $or search warrant, she stated that )u%%erville !eneral 'erchandising represented by 'r. ;ictor -hua sought the assistance o$ their police station in connection with the proli$eration o$ $a(e -hin -hun )u products. +ith ;ictor -hua, they %ade a surveillance o$ two places, na%ely 240K Topacio )treet and 2412 ,ay%undo )treet both in )an *ndres, 'anila. Through this, they were able to veri$y that plastic containers were being labeled with -hin -hun )u stic(ers $illed with crea% at 240K Topacio )treet. /n the other hand, in the a$$idavit dated K :anuary 2000 o$ ;ictor -hua, he stated that )u%%erville !eneral 'erchandising, being the e6clusive i%porter, distributor and dealer o$ -hin -hun )u products received reliable in$or%ation that persons going by the na%e o$ 1lidad, ;ioleta and ,oger "ho were engaged in the illegal %anu$acture and sale o$ these products. 2ro% the surveillance conducted with the help o$ )&/4 Aalagbis, they saw a tricycle $ull o$ containers ta(en to a house at 2412 ,ay%undo )treet, )an *ndres, 'anila. It was at this address that -hin -hun )u stic(ers were being a$$i6ed. The containers were therea$ter ta(en to 240K Topacio )treet to be $illed with the crea% product. -learly, probable cause e6isted $or the issuance o$ the warrant as shown by the a$$idavits o$ the above a$$iants who had personal (nowledge o$ $acts indicating that an o$$ense involving violation o$ intellectual property rights was being co%%itted and that the ob9ects sought in connection with the o$$ense are in the place sought to be searched. The surveillance conducted by )&/4 0edita Aalagbis on the basis o$ reliable in$or%ation that 1lidad, ;ioleta and ,oger "ho were engaged in the illegal %anu$acture and sale o$ $a(e -hin -hun )u products enabled her to gain personal (nowledge o$ the illegal activities o$ the "hos.JD This $act was su$$icient 9usti$ication $or the e6a%ining 9udge, in this case :udge Han5anas, to conclude that there was probable cause $or the issuance o$ the search warrant. *t the hearing conducted by :udge Han5anas, )&/4 0edita Aalagbis and ;ictor -hua testi$ied on the a$$idavits they separately e6ecuted, and essentially stated therein upon inquiry by :udge Han5anas that indeed several $a(e -hin -hun )u products were loaded to a tricycle and brought to a warehouse in Topacio )treet. In &eople v. Tee,J4 this -ourt held that4 It is presu%ed that a 9udicial $unction has been regularly per$or%ed, absent a showing to the contrary. * %agistrate.s deter%ination o$ probable cause $or the issuance o$ a search warrant is paid great de$erence by a reviewing court, as long as there was substantial basis $or that deter%ination. )ubstantial basis %eans that the questions o$ the e6a%ining 9udge brought out such $acts and circu%stances as would lead a reasonably discreet and prudent %an to believe that an o$$ense has been co%%itted, and the ob9ects in connection with the o$$ense sought to be sei5ed are in the place sought to be searched. +e cannot $ind any irregularity or abuse o$ discretion on the part o$ :udge Han5anas $or issuing the assailed search warrant. /n the contrary, we $ind that he had co%plied with the procedural and substantive require%ents $or issuing a search warrant. +e are, there$ore, bound to respect his $inding o$ probable cause $or issuing )earch +arrant 0o. 99B1J20.

*$ter declaring that )earch +arrant 0o. 99B1J20 was validly issued by the ,T- o$ 'anila, Aranch K, then there is no reason $or us to order the return o$ the articles sei5ed by virtue thereo$. +31,12/,1, the 7ecision o$ the -ourt o$ *ppeals dated C *ugust 2001 and ,esolution dated 1C 0ove%ber 2001, denying the quashal o$ )earch +arrant 0o. 99B1J20 and the return o$ the sei5ed ite%s, are hereby *22I,'17. -osts against petitioners. )/ /,71,17.