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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-28744 April 29, 1971

ACOJE MINING CO., INC., petitioner-applicant,

vs.

THE IRECTOR O! PATENTS, respondent.

Manuel M. Antonio and Roman G. Pacia for petitioner.

Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor

General Frine' C. Zaallero, Solicitor Antonio M. Martine! and Attorne"

Amado #. Mar$ue! for respondent.

!ERNANO, J.:

The issue before us is simple and uncomplicated. Ma petitioner Aco!e

Minin" Compan re"ister for the purpose of advertisin" its product, so

sauce, the trademar# $%T&', there bein" alread in e(istence one suchre"istered in favor of the Philippine Refinin" Compan for its product, edible

oil, it bein" further sho)n that the trademar# applied for is in smaller tpe,

colored differentl, set on a bac#"round )hich is dissimilar as to ield a

distinct appearance* The ans)er of the +irector of Patents )as in the

ne"ative. ence this appeal )hich )e sustain in the li"ht of the controllin"

norm as set forth in the American ire Cable Co. care. 1 The facts as set

forth in the appealed decision follo)/ 0%n 'eptember 12, 1345, Aco!e

Minin" Co., 6nc. a domestic corporation, filed an application for re"istration

of the trademar# $%T&', used on 'o 'auce, Class 27. &se in commerce in

the Philippines since 8une 1, 1345 is asserted. The Chief trademar# E(aminer

finall re!ected the application b reason of confusin" similarit )ith the

trademar# $%T&' re"istered in this %ffice under Certificate of Re"istration

No. 19274 issued in favor of Philippine Refinin" C%., 6nc., another domestic

corporation. The cited mar# is bein" used on edible oil, Class 27.0 2 The

matter )as then elevated to respondent +irector of Patents )ho, on 8anuar

:1, 134;, upheld the vie) of the Chief Trademar# E(aminer and re!ected the

application of Petitioner on the "round that )hile there is a difference

bet)een so sauce and edible oil and there )ere dissimilarities in the

trademar#s due to tpe of letters used as )ell as in the si it

)ould be sufficient, for purposes of the la), that the similarit bet)een the

t)o labels, is such that there is a possibilit or li#elihood of the purchaser of

the older brand mista#in" the ne)er brand for it.0 #

1


2/40

Can it be said then that petitioner?s application )ould be li#el to cause

confusion or mista#e on the part of the buin" public* The ans)er should be

in the ne"ative. 6t does not def common sense to assert that a purchaser

)ould be co"ni


3/40

under Class 27. Alle"ed date of first use of the trademar# b respondent )as

on @ebruar 1D, 1353.

After due publication of the application, petitioner filed an opposition, in

accordance )ith 'ection ; of Republic Act No. 144, other)ise #no)n as the

Trademar# $a), as amended. Basis of petitioner?s opposition )as 'ection

2d of said la), )hich provides as unre"istrable/

a mar# )hich consists of or comprises a mar# or tradename

)hich so resembles a mar# or tradename re"istered in the

Philippines or a mar# or tradename previousl used in the

Philippines b another and not abandoned, as to be li#el,

)hen applied to or used in connection )ith the "oods,

business services of the applicant, to cause confusion or

mista#e or to deceive purchasers.

The parties submitted the case for decision )ithout presentin" an evidence/thereafter the +irector of patents rendered a decision allo)in" re"istration of

the trademar# 0CAM6A0 in favor of N" 'am.

Petitioner moved for a reconsideration, but the same )as denied.

ence, this petition.

A rudimentar precept in trademar# protection is that 0the ri"ht to a

trademar# is a limited one, in the sense that others ma used the same mar#

on unrelated "oods.0 1 Thus, as pronounced b the &nited 'tates 'upremeCourt in the case of American Foundries (s. Roertson 2, 0the mere fact that

one person has adopted and used a trademar# on his "oods does not prevent

the adoption and use of the same trademar# b others on articles of a

different description.0

'uch restricted ri"ht over a trademar# is li#e)ise reflected in our Trademar#

la). &nder 'ection 2d of the la), re"istration of a trademar# )hich so

resembles another alread re"istered or in use should be denied, )here to

allo) such re"istration could li#el result in confusion, mista#e or deception

to the consumers. Conversel, )here no confusion is li#el to arise, as in this

case, re"istration of a similar or even 6dentical mar# ma be allo)ed.

The term 0CAM6A0 is descriptive of a )hole "enus of "arden plants )ith

fra"rant )hite flo)ers. 'ome people call the 0CAM6A0 the 0)hite "in"er

plant0 because of its tuberous roots, )hile children refer to it as the butterfl

flo)er because of its shape. Bein" a "eneric and common term, its

appropriation as a trademar#, albeit in a fanciful manner in that it bears no

relation to the product it 6dentifies, is valid. o)ever, the de"ree of

e(clusiveness accorded to each user is closel restricted. "

The records of this case disclose that the term 0CAM6A0 has been re"istered

as a trademar# not onl b petitioner but b t)o 9 other concerns, as

follo)s/

1. CAM6A Application No. 9;D Re"istration No. 'R-:9D+ate Re"istered Ma 94, 134D %)ner Everbri"ht

+evelopment Compan Business Address :1D M. . del

Pilar Frace Par#, Caloocan Cit Class 2 Thread and Garn

9. CAM6A and Representation Application No. 5:; +ate

@iled Au"ust 1D, 1325 +ate Re"istered - April 9D, 1324

%)ner @.E. Huelli", 6nc. Business Address 55 Rosario

't., Manila Class 2: Particular Food on )hich mar# is

used/ Te(tiles, Embroideries laces, etc.

A trademar# is desi"ned to 6dentif the user. But it should be so distinctive

and sufficientl ori"inal as to enable those )ho come into contact )ith it to

reco"ni


4/40

derived from coined )ords such as 0Role(0, 0Ioda#0 or 0Iote(0. 6t has been

held that if a mar# is so commonplace that it cannot be readil distin"uished

from others, then it is apparent that it cannot 6dentif a particular business>

and he )ho first adopted it cannot be in!ured b an subse=uent

appropriation or imitation b others, and the public )ill not be deceived.0 #

The trademar# 0CAM6A0 is used b petitioner on a )ide ran"e of products/

lard, butter, coo#in" oil, abrasive deter"ents, polishin" materials and soap of

all #inds. Respondent desires to use the same on his product, ham. hile

ham and some of the products of petitioner are classified under Class 27

@oods and 6n"redients of @ood, this alone cannot serve as the decisive

factor in the resolution of )hether or not the are related "oods. Emphasis

should be on the similarit of the products involved and not on the arbitrar

classification or "eneral description of their properties or characteristics.

6n his decision, the +irector of Patents enumerated the factors that set

respondent?s product apart from the "oods of petitioner. e opined and e=uote/

6 have ta#en into account such factors as probable purchaser

attitude and habits, mar#etin" activities, retail outlets, and

commercial impression li#el to be conveed b the

trademar#s if used in con!unction )ith the respective "oods

of the parties. 6 believe that ham on one hand, and lard,

butter, oil, and soap on the other are products that )ould not

move in the same manner throu"h the same channels of

trade. The pertain to unrelated fields of manufacture, mi"ht be distributed and mar#eted under dissimilar conditions, and

are displaed separatel even thou"h the fre=uentl ma be

sold throu"h the same retail food establishments. %pposer?s

products are ordinar da-to-da household items )hereas

ham is not necessaril so. Thus, the "oods of the parties are

not of a character )hich purchasers )ould be li#el to

attribute to a common ori"in. p. 9:, Rollo.

The observation and conclusion of the +irector of Patents are correct. The

particular "oods of the parties are so unrelated that consumers )ould not in

an probabilit mista#e one as the source or ori"in of the product of the

other. 0am0 is not a dail food fare for the avera"e consumer. %ne

purchasin" ham )ould e(ercise a more cautious inspection of )hat he bus

on account of it price. 'eldom, if ever, is the purchase of said food product

dele"ated to household helps, e(cept perhaps to those )ho, li#e the coo#s,

are e(pected to #no) their business. Besides, there can be no li#elihood for

the consumer of respondent?s ham to confuse its source as anone but

respondent. The facsimile of the label attached b him on his product, his

business name 0'AM?' AM AN+ BAC%N @ACT%RG0 )ritten in bold

)hite letters a"ainst a reddish oran"e bac#"round $, is certain to catch the ee

of the class of consumers to )hich he caters.

6n addition, the "oods of petitioners are basicall derived from ve"etable oil

and animal fats, )hile the product of respondent is processed from pi"?s le"s.

A consumer )ould not reasonabl assume that, petitioner has so diversifiedits business as to include the product of respondent.

Mr. Runolf Callman, in 'ection ;D.:, %$. 6, p. 1191 of his boo#, &nfair

Competition and Trade Mar#s, declare/

hile confusion of "oods can onl be evident, )here the

liti"ants are actuall in competition, confusion of business

ma arise bet)een non-competitive interests as )ell. This is

true )hether or not the trademar#s are re"istered. 'ec. 14 of

the Trademar# Act, in referrin" to ?merchandise ofsubstantiall the same descriptive properties, embraces

competitive and non-competitive trademar# infrin"ement

ut it is not so etensi(e as to e applicale to cases /here

the pulic /ould not reasonal" epect the plaintiff to ma%e

or sell the same class of oods as those made or sold " the

defendant . Emphasis supplied.

4


5/40

6n fine, e hold that the businesss of the parties are non-competitive and

their products so unrelated that the use of 6dentical trademar#s is not li#el to

"ive rise to confusion, much less cause dama"e to petitioner.

ERE@%RE, the instant petition is hereb dismissed and the decision of

the +irector of Patents in 6nter Partes Case No. 9:1 affirmed in toto. Costs

a"ainst petitioner.

'% %R+ERE+.

Barredo 0Chairman1, A$uino, Concepcion, &r., Guerrero, Aad Santos and

e Castro, &&., concur.

S+p(r(+ Opi)io)

E CASTRO, J., dissentin"/

6 vote to "rant the petition of the Philippine Refinin" Co. 6nc. As the

re"istered o)ner and prior user of the trademar#, 0CAM6A0 on a )ide

variet of products such as lard, butter, coo#in" oil, abrasive deter"ents,

polishin" materials and soap of all #inds, the respondent?s ham )hich comesunder the same classification of 0@ood and 6n"redients of @oods0 under

)hich petitioner has re"istered its trademar#, if "iven the same trademar#,

0CAM6A0 is li#el to confuse the public that the source of the ham is the

petitioner. if the respondent?s ham is of poor =ualit, petitioner?s business

ma thus be affected adversel as a result, )hile from the standpoint of the

purchasers, some measure of deception ma ta#e effect upon them. Thus, the

use of the same trademar# on the ham )ould li#el result in confusion as to

the source or ori"in thereof, to the dama"e or detriment of the petitioner. The

purpose of the la) )ill be served better b not allo)in" the re"istration of

the trademar# 0CAM6A0 for respondent?s ham, )ith such a limitless number

of other )ords respondent ma choose from, as trademar# for his product.

S+p(r(+ Opi)io)

E CASTRO, J., dissentin"/

6 vote to "rant the petition of the Philippine Refinin" Co. 6nc. As the

re"istered o)ner and prior user of the trademar#, 0CAM6A0 on a )ide

variet of products such as lard, butter, coo#in" oil, abrasive deter"ents,

polishin" materials and soap of all #inds, the respondent?s ham )hich comes

under the same classification of 0@ood and 6n"redients of @oods0 under

)hich petitioner has re"istered its trademar#, if "iven the same trademar#,

0CAM6A0 is li#el to confuse the public that the source of the ham is the

petitioner. if the respondent?s ham is of poor =ualit, petitioner?s business

ma thus be affected adversel as a result, )hile from the standpoint of the

purchasers, some measure of deception ma ta#e effect upon them. Thus, the

use of the same trademar# on the ham )ould li#el result in confusion as to

the source or ori"in thereof, to the dama"e or detriment of the petitioner. The purpose of the la) )ill be served better b not allo)in" the re"istration of

the trademar# 0CAM6A0 for respondent?s ham, )ith such a limitless number

of other )ords respondent ma choose from, as trademar# for his product.

!oo)o+

5


6/40


SUPREME COURT

Manila

@6R'T +66'6%N

G.R. No. L-447'7 A%% "1, 1982

HIC/O/ MANU!ACTURING CO., INC., petitioner,

vs.

COURT O! APPEALS 00 ()* SANTOS LIM UN LIONG, respondents.

S"cip, Sala!ar, Feliciano, 2ernande! - Castillo #a/ Offices for petitioner.

)a3ada, Sanche!, )afiada - )anada #a/ Offices and Geore R. Arolario

for respondents.

TEEHAN/EE, J.:1äwphï1.ñët

The Court affirms on the stren"th of controllin" doctrine as reaffirmed in the

companion case of +sso Standard +astern 4nc. (s. Court of Appeals 1

promul"ated also on this date and the recent case of Philippine Refinin Co.,

4nc. (s. 5 Sam and irector of Parents 2 the appealed decision of the Court

of Appeals reversin" the patent director?s decision and instead dismissin"

petitioner?s petition to cancel private respondent?s re"istration of thetrademar# of 6CI%I for its Mari#ina shoes as a"ainst petitioner?s earlier

re"istration of the same trademar# for its other non-competin" products.

%n the basis of the applicable reasons and considerations e(tensivel set

forth in the above-cited controllin" precedents and the leadin" case of Aco6e

Minin Co., 4nc. (s. irector of Patents " on )hich the appellate court

anchored its decision at bar, said decision must stand affirmed, as follo)s/

78/ph97.3:t

An e(amination of the trademar# of petitioner-appellee and

that of re"istrant-appellant convinces us that there is a

difference in the desi"n and the colorin" of, as )ell as in the

)ords on the ribbons, the t)o trademar#s.

6n petitioner-appellee?s trademar# for hand#erchiefs E(hibit

?J?, the )ord ?6CI%I? is in red )ith )hite bac#"round in

the middle of t)o branches of laurel in li"ht "old. At the

lo)er part thereof is a ribbon on )hich are the )ords

?P%'6T6E$G @6NER? in li"ht "old. 6n the trademar# for

under)ear E(hibit ?R?, the )ord ?6CI%I? is also in red

)ith )hite bac#"round in the middle of t)o branches of

laurel in dar# "old )ith similar ribbons and the )ords

?P%'6T6E$G @6NER? in dar# "old. And in the trademar#

for briefs E(hibit ?'?, the )ord ?6CI%I? is in )hite but

)ith red bac#"round in the middle of t)o branches of laurel,

the leaves bein" in dar# "old )ith )hite ed"es, and )ithsimilar ribbon and )ords ?P%'6T6E$G @6NER? in dar#

"old. 6n contrast, in respondent-appellant?s trademar#

E(hibit ?8?, the )ord ?6CI%I? is in )hite )ith "old

bac#"round bet)een the t)o branches of laurel in red, )ith

the )ord ?'%E'? also in red belo) the )ord ?6CI%I?.9t

;


7/40

6n the recent case of Aco6e Minin Co., 4nc. (s. irector of

Patents, :; 'CRA 2;D, 2;9-2;:, the 'upreme Court stated -

78/ph97.3:t

Can it be said then that petitioner?s

application )ould be li#el to cause

confusion or mista#e on the part of the

buin" public* The ans)er should be in the

ne"ative. 6t does not def common sense to

assert that a purchaser )ould be co"ni


8/40

Ma%asiar, &., is on lea(e. *as$ue!, &., too% no part.


SUPREME COURT

Manila

@6R'T +66'6%N

G.R. No. L-29971 A%% "1, 1982

ESSO STANAR EASTERN, INC., petitioner,

vs.

THE HONORALE COURT O! APPEALS 00 ()* UNITE

CIGARETTE CORPORATION, respondents.

TEEHAN/EE, J.:1äwphï1.ñët

The Court affirms on the basis of controllin" doctrine the appealed decision

of the Court of Appeals reversin" that of the Court of @irst 6nstance of

Manila and dismissin" the complaint filed b herein petitioner a"ainst private

respondent for trade infrin"ement for usin" petitioner?s trademar# E''%,

since it clearl appears that the "oods on )hich the trademar# E''% is used

b respondent is non-competin" and entirel unrelated to the products of

petitioner so that there is no li#elihood of confusion or deception on the part

of the purchasin" public as to the ori"in or source of the "oods.

Petitioner Esso 'tandard Eastern, 6nc., 1 then a forei"n corporation dul

licensed to do business in the Philippines, is en"a"ed in the sale of petroleum

products )hich are 6dentified )ith its trademar# E''% )hich as successor

of the defunct 'tandard acuum %il Co. it re"istered as a business name )ith

the Bureaus of Commerce and 6nternal Revenue in April and Ma, 1349.

Private respondent in turn is a domestic corporation then en"a"ed in the

manufacture and sale of ci"arettes, after it ac=uired in November, 134: the

business, factor and patent ri"hts of its predecessor $a %riental Tobacco

Corporation, one of the ri"hts thus ac=uired havin" been the use of the

trademar# E''% on its ci"arettes, for )hich a permit had been dul "ranted

b the Bureau of 6nternal Revenue.

Barel had respondent as such successor started manufacturin" ci"arettes

)ith the trademar# E''%, )hen petitioner commenced a case for trademar#

infrin"ement in the Court of @irst 6nstance of Manila. The complaint alle"ed

that the petitioner had been for man ears en"a"ed in the sale of petroleum

products and its trademar# E''% had ac=uired a considerable "ood)ill to

such an e(tent that the buin" public had al)as ta#en the trademar# E''%

as e=uivalent to hi"h =ualit petroleum products. Petitioner asserted that the

continued use b private respondent of the same trademar# E''% on its

ci"arettes )as bein" carried out for the purpose of deceivin" the public as to

its =ualit and ori"in to the detriment and disadvanta"e of its o)n products.

6n its ans)er, respondent admitted that it used the trademar# E''% on its

o)n product of ci"arettes, )hich )as not 6dentical to those produced and

sold b petitioner and therefore did not in an )a infrin"e on or imitate

petitioner?s trademar#. Respondent contended that in order that there ma be

trademar# infrin"ement, it is indispensable that the mar# must be used b one

person in connection or competition )ith "oods of the same #ind as the

complainant?s.

The trial court, relin" on the old cases of An (s. )eodoro 2 and Arce -Sons, 4nc. (s. Selecta Biscuit Compan", " referrin" to related products,

decided in favor of petitioner and ruled that respondent )as "uilt of

infrin"ement of trademar#.

%n appeal, respondent Court of Appeals found that there )as no trademar#

infrin"ement and dismissed the complaint. Reconsideration of the decision

havin" been denied, petitioner appealed to this Court b )a of certiorari to

reverse the decision of the Court of Appeals and to reinstate the decision of

8


9/40

the Court of @irst 6nstance of Manila. The Court finds no "round for "rantin"

the petition.

The la) defines infrin"ement as the use )ithout consent of the trademar#

o)ner of an 0reproduction, counterfeit, cop or colorable limitation of an

re"istered mar# or tradename in connection )ith the sale, offerin" for sale, or

advertisin" of an "oods, business or services on or in connection )ith )hich

such use is li#el to cause confusion or mista#e or to deceive purchasers or

others as to the source or ori"in of such "oods or services, or 6dentit of such

business> or reproduce, counterfeit, cop or colorabl imitate an such mar#

or tradename and appl such reproduction, counterfeit, cop or colorable

limitation to labels, si"ns, prints, pac#a"es, )rappers, receptacles or

advertisements intended to be used upon or in connection )ith such "oods,

business or services.0 4 6mplicit in this definition is the concept that the "oods

must be so related that there is a li#elihood either of confusion of "oods or

business. # But li#elihood of confusion is a relative concept> to be determined

onl accordin" to the particular, and sometimes peculiar, circumstances ofeach case. $ 6t is un=uestionabl true that, as stated in Courn (s. Puritan

Mills, 4nc. 7 06n trademar# cases, even more than in other liti"ation, precedent

must be studied in the li"ht of the facts of the particular case.

6t is undisputed that the "oods on )hich petitioner uses the trademar# E''%,

petroleum products, and the product of respondent, ci"arettes, are non-

competin". But as to )hether trademar# infrin"ement e(ists depends for the

most part upon )hether or not the "oods are so related that the public ma

be, or is actuall, deceived and misled that the came from the same ma#er

or manufacturer. @or non-competin" "oods ma be those )hich, thou"h theare not in actual competition, are so related to each other that it mi"ht

reasonabl be assumed that the ori"inate from one manufacturer. 5on>

competin "oods ma also be those )hich, bein" entirel unrelated , could

not reasonabl be assumed to have a common source. in the former case of

related "oods, confusion of business could arise out of the use of similar

mar#s> in the latter case of non-related "oods, it could not. 8 The vast

ma!orit of courts toda follo) the modern theor or concept of 0related

"oods0 9 )hich the Court has li#e)ise adopted and uniforml reco"ni


10/40

B the same to#en, in the recent case of Philippine Refinin Co., 4nc. (s. 5

Sam and irector of Patents, 18 the Court upheld the patent director?s

re"istration of the same trademar# CAM6A for therein respondent?s product

of ham not)ithstandin" its alread bein" used b therein petitioner for a

)ide ran"e of products/ lard butter, coo#in" oil, abrasive deter"ents,

polishin" materials and soap of all #inds. The Court, after notin" that the

same CAM6A trademar# had been re"istered b t)o other companies,

Everbri"ht +evelopment Compan and @. E. Huelli", 6nc. for their respective

products of thread and arn for the former and te(tiles, embroideries and

laces for the latter ruled that 0)hile ham and some of the products of

petitioner are classified under Class 27 @oods and 6n"redients of @ood, this

alone cannot serve as the decisive factor in the resolution of )hether or not

the are related "oods. Emphasis should be on the similarit of the products

involved and not on the arbitrar classification or "eneral description of their

properties or characteristics.0 The Court, therefore, concluded that 06n fine,

e hold that the businesses of the parties are non-competitive and their

products so unrelated that the use of 6dentical trademar#s is not li#el to "iverise to confusion, much less cause dama"e to petitioner.0

6n the situation before us, the "oods are obviousl different from each other

)ith 0absolutel no iota of similitude0 19 as stressed in respondent court?s

!ud"ment. The are so forei"n to each other as to ma#e it unli#el that

purchasers )ould thin# that petitioner is the manufacturer of respondent?s

"oods.9t;


11/40

of the three colors. 6t is to be pointed out that not even a shade of these colors

appears on the trademar# of the appellant?s ci"arette. The onl color that the

appellant uses in its trademar# is "reen.0 24

Even the lo)er court, )hich ruled initiall for petitioner, found that a

0noticeable difference bet)een the brand E''% bein" used b the defendants

and the trademar# E''% of the plaintiff is that the former has a rectan"ular

bac#"round, )hile in that of the plaintiff the )ord E''% is enclosed in an

oval bac#"round.0

6n point of fact and time, the Court?s dismissal of the petition at bar )as

presa"ed b its Resolution of Ma 91, 1373 dismissin" b minute resolution

the petition for revie) for lac# of merit in the 6dentical case of Shell

Compan" of the Philippines, #td (s. Court of Appeals 2#, )herein the Court

thereb affirmed the patent office?s re"istration of the trademar# 'E$$ as

used in the ci"arettes manufactured b therein respondent @ortune Tobacco

Corporation not)ithstandin" the therein petitioner 'hell Compan?sopposition thereto as the prior re"istrant of the same trademar# for its

"asoline and other petroleum trademar#s, on the stren"th of the controllin"

authorit of Aco6e Minin Co. (s. irector of Patents, Supra, and the same

rationale that 06n the Philippines, )here buers of appellee?s @ortune

Corp.?s ci"arettes, )hich are lo) cost articles, can be more numerous

compared to buers of the hi"her priced petroleum and chemical products of

appellant 'hell Co. and )here appellant 'hell is #no)n to be in the

business of sellin" petroleum and petroleum-based chemical products, and no

others, it is difficult to conceive of confusion in the minds of the buin"

public in the sense it can be thou"ht that appellant 'hell is the manufacturer

of appellee?s @ortune?s ci"arettes, or that appellee @ortune is the

manufacturer or processor of appellant?s 'hell?s petroleum and chemical

products.0 2$

ACC%R+6NF$G, the petition is dismissed and the decision of respondent

Court of Appeals is hereb affirmed.

Melencio>2errera, Plana, Relo(a and Gutierre!, &r., &&., concur.78/ph97.3:t

Ma%asiar, &., is on lea(e.

*as$ue!, &., too% no part.


SUPREME COURT

Manila

T6R+ +66'6%N

G.R. No. 12'9'' J%l& 2', 2'''

CANON /AUSHI/I /AISHA, petitioner,

vs.

COURT O! APPEALS ()* NSR RUER CORPORATION,

respondents.

GON3AGA-REES, J .5

Before us is a petition for revie) that see#s to set aside the +ecision 1 dated

@ebruar 91, 1335 of the Court of Appeals in CA-FR 'P No. :D9D:, entitled

0Canon Iabushi#i Iaisha vs. N'R Rubber Corporation0 and its Resolution

dated 8une 97, 1335 denin" the motion for reconsideration of herein

petitioner Canon Iabushi#i Iaisha petitioner.

%n 8anuar 15, 13;5, private respondent N'R Rubber Corporation private

respondent filed an application for re"istration of the mar# CAN%N for

sandals in the Bureau of Patents, Trademar#s, and Technolo" Transfer

BPTTT. A erified Notice of %pposition )as filed b petitioner, a forei"n

corporation dul or"ani


12/40

Petitioner moved to declare private respondent in default for its failure to file

its ans)er )ithin the prescribed period. The BPTTT then declared private

respondent in default and allo)ed petitioner to present its evidence e>parte.

Based on the records, the evidence presented b petitioner consisted of its

certificates of re"istration for the mar# CAN%N in various countries

coverin" "oods belon"in" to class 9 paints, chemical products, toner, and

de stuff. Petitioner also submitted in evidence its Philippine Trademar#

Re"istration No. :3:3;, sho)in" its o)nership over the trademar# CAN%N

also under class 9.

%n November 1D, 1339, the BPTTT issued its decision dismissin" the

opposition of petitioner and "ivin" due course to private respondent?s

application for the re"istration of the trademar# CAN%N. %n @ebruar 14,

133:, petitioner appealed the decision of the BPTTT )ith public respondent

Court of Appeals that eventuall affirmed the decision of BPTTT. ence, this

petition for revie).

Petitioner anchors this instant petition on these "rounds/

A PET6T6%NER 6' ENT6T$E+ T% EC$&'6E &'E %@ TE

MARI CAN%N BECA&'E 6T 6' 6T' TRA+EMARI AN+ 6'

&'E+ A$'% @%R @%%TEAR.

B T% A$$% PR6ATE RE'P%N+ENT T% REF6'TER CAN%N

@%R @%%TEAR 6' T% PREENT PET6T6%NER @R%M &'6NF

CAN%N @%R AR6%&' I6N+' %@ @%%TEAR, EN 6N@ACT, PET6T6%NER A' EAR$6ER &'E+ 'A6+ MARI @%R

'A6+ F%%+'.

C PET6T6%NER 6' A$'% ENT6T$E+ T% TE R6FT T%

EC$&'6E$G &'E CAN%N T% PREENT C%N@&'6%N %@

B&'6NE''.

+ PET6T6%NER 6' A$'% ENT6T$E+ T% TE EC$&'6E &'E

%@ CAN%N BECA&'E 6T @%RM' PART %@ 6T' C%RP%RATE

NAME, PR%TECTE+ BG TE PAR6' C%NENT6%N.9

The BPTTT and the Court of Appeals share the opinion that the trademar#

0CAN%N0 as used b petitioner for its paints, chemical products, toner, and

destuff, can be used b private respondent for its sandals because the

products of these t)o parties are dissimilar. Petitioner protests the

appropriation of the mar# CAN%N b private respondent on the "round that

petitioner has used and continues to use the trademar# CAN%N on its )ide

ran"e of "oods )orld)ide. Alle"edl, the corporate name or tradename of

petitioner is also used as its trademar# on diverse "oods includin" foot)ear

and other related products li#e shoe polisher and polishin" a"ents. To lend

credence to its claim, petitioner points out that it has branched out in its

business based on the various "oods carrin" its trademar# CAN%N:,

includin" foot)ear )hich petitioner contends covers sandals, the "oods for

)hich private respondent sou"ht to re"ister the mar# CAN%N. @or petitioner,the fact alone that its trademar# CAN%N is carried b its other products li#e

foot)ear, shoe polisher and polishin" a"ents should have precluded the

BPTTT from "ivin" due course to the application of private respondent.

e find the ar"uments of petitioner to be unmeritorious. %rdinaril, the

o)nership of a trademar# or tradename is a propert ri"ht that the o)ner is

entitled to protect2 as mandated b the Trademar# $a).5 o)ever, )hen a

trademar# is used b a part for a product in )hich the other part does not

deal, the use of the same trademar# on the latter?s product cannot be validl

ob!ected to.4

A revie) of the records sho)s that )ith the order of the BPTTT declarin"

private respondent in default for failure to file its ans)er, petitioner had

ever opportunit to present e>parte all of its evidence to prove that its

certificates of re"istration for the trademar# CAN%N cover foot)ear. The

certificates of re"istration for the trademar# CAN%N in other countries and

in the Philippines as presented b petitioner, clearl sho)ed that said

certificates of re"istration cover "oods belon"in" to class 9 paints, chemical

12

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13/40

products, toner, destuff. %n this basis, the BPTTT correctl ruled that since

the certificate of re"istration of petitioner for the trademar# CAN%N covers

class 9 paints, chemical products, toner, destuff, private respondent can

use the trademar# CAN%N for its "oods classified as class 95 sandals.

Clearl, there is a )orld of difference bet)een the paints, chemical products,

toner, and destuff of petitioner and the sandals of private respondent.

Petitioner counters that not)ithstandin" the dissimilarit of the products of

the parties, the trademar# o)ner is entitled to protection )hen the use of b

the !unior user 0forestalls the normal e(pansion of his business0. 7 Petitioner?s

opposition to the re"istration of its trademar# CAN%N b private respondent

rests upon petitioner?s insistence that it )ould be precluded from usin" the

mar# CAN%N for various #inds of foot)ear, )hen in fact it has earlier used

said mar# for said "oods. 'tretchin" this ar"ument, petitioner claims that it is

possible that the public could presume that petitioner )ould also produce a

)ide variet of foot)ear considerin" the diversit of its products mar#eted

)orld)ide.

e do not a"ree. Even in this instant petition, e(cept for its bare assertions,

petitioner failed to attach evidence that )ould convince this Court that

petitioner has also embar#ed in the production of foot)ear products. e

=uote )ith approval the observation of the Court of Appeals that/

0The herein petitioner has not made #no)n that it intends to venture

into the business of producin" sandals. This is clearl sho)n in its

Trademar# Principal Re"ister E(hibit 0&0 )here the products of

the said petitioner had been clearl and specificall described as0Chemical products, destuffs, pi"ments, toner developin"

preparation, shoe polisher, polishin" a"ent0. 6t )ould be ta(in" one?s

credibilit to aver at this point that the production of sandals could

be considered as a possible 0natural or normal e(pansion0 of its

business operation0.;

6n Faere, 4ncorporated (s. 4ntermediate Appellate Court ,3 the +irector of

patents allo)ed the !unior user to use the trademar# of the senior user on the

"round that the briefs manufactured b the !unior user, the product for )hich

the trademar# BR&TE )as sou"ht to be re"istered, )as unrelated and non-

competin" )ith the products of the senior user consistin" of after shave

lotion, shavin" cream, deodorant, talcum po)der, and toilet soap. The senior

user vehementl ob!ected and claimed that it )as e(pandin" its trademar# to

briefs and ar"ued that permittin" the !unior user to re"ister the same

trademar# )ould allo) the latter to invade the senior user?s e(clusive

domain. 6n sustainin" the +irector of Patents, this Court said that since 0the

senior user has not ventured in the production of briefs, an item )hich is not

listed in its certificate of re"istration, the senior user, cannot and should not

be allo)ed to fei"n that the !unior user had invaded the senior user?s

e(clusive domain.01D e reiterated the principle that the certificate of

re"istration confers upon the trademar# o)ner the e(clusive ri"ht to use its

o)n smbol onl" to those oods specified in the certificate, sub!ect to the

conditions and limitations stated therein.11 Thus, the e(clusive ri"ht of

petitioner in this case to use the trademar# CAN%N is limited to the products

covered b its certificate of re"istration.

Petitioner further ar"ues that the alle"ed diversit of its products all over the

)orld ma#es it plausible that the public mi"ht be misled into thin#in" that

there is some supposed connection bet)een private respondent?s "oods and

petitioner. Petitioner is apprehensive that there could be confusion as to the

ori"in of the "oods, as )ell as confusion of business, if private respondent is

allo)ed to re"ister the mar# CAN%N. 6n such a case, petitioner )ould

alle"edl be immensel pre!udiced if private respondent )ould be permitted

to ta#e 0a free ride on, and reap the advanta"es of, the "ood)ill and

reputation of petitioner Canon0.19 6n support of the fore"oin" ar"uments, petitioner invo#es the rulin"s in Sta. Ana (s. Mali/at 1: , An (s. )eodoro12

and Con(erse Ruer Corporation (s. ?ni(ersal Ruer Products, 4nc.15.

The li#elihood of confusion of "oods or business is a relative concept, to be

determined onl accordin" to the particular, and sometimes peculiar,

circumstances of each case.14 6ndeed, in trademar# la) cases, even more than

in other liti"ation, precedent must be studied in the li"ht of the facts of the

particular case.17 Contrar to petitioner?s supposition, the facts of this case

13

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)ill sho) that the cases of Sta. Ana (s. Mali/at,, An (s. )eodoro and

Con(erse Ruer Corporation (s. ?ni(ersal Ruer Products, 4nc. are hardl

in point. The !ust cited cases involved "oods that )ere confusin"l similar, if

not identical, as in the case of Con(erse Ruer Corporation (s. ?ni(ersal

Ruer Products, 4nc. ere, the products involved are so unrelated that the

public )ill not be misled that there is the sli"htest ne(us bet)een petitioner

and the "oods of private respondent.

6n cases of confusion of business or ori"in, the =uestion that usuall arises is

)hether the respective "oods or services of the senior user and the !unior user

are so related as to li#el cause confusion of business or ori"in, and thereb

render the trademar# or tradenames confusin"l similar .1; Foods are related

)hen the belon" to the same class or have the same descriptive properties>

)hen the possess the same phsical attributes or essential characteristics

)ith reference to their form, composition, te(ture or =ualit.13 The ma also

be related because the serve the same purpose or are sold in "rocer stores.9D

Thus, in +sso Standard +astern, 4nc. (s. Court of Appeals, this Court ruled

that the petroleum products on )hich the petitioner therein used the

trademar# E''%, and the product of respondent, ci"arettes are 0so forei"n to

each other as to ma#e it unli#el that purchasers )ould thin# that petitioner is

the manufacturer of respondent?s "oods091. Moreover, the fact that the "oods

involved therein flo) throu"h different channels of trade hi"hli"hted their

dissimilarit, a factor e(plained in this )ise/

0The products of each part move alon" and are disposed throu"h

different channels of distribution. The petitioner?s products aredistributed principall throu"h "asoline service and lubrication

stations, automotive shops and hard)are stores. %n the other hand,

the respondent?s ci"arettes are sold in sari-sari stores, "rocer store,

and other small distributor outlets. Respondnet?s ci"arettes are even

peddled in the streets )hile petitioner?s ?"asul? burners are not.

@inall, there is a mar#ed distinction bet)een oil and tobacco, as

)ell as bet)een petroleum and ci"arettes. Evidentl, in #ind and

nature the products of respondent and of petitioner are poles

apart.099

&ndoubtedl, the paints, chemical products, toner and destuff of petitioner

that carr the trademar# CAN%N are unrelated to sandals, the product of

private respondent. e a"ree )ith the BPTTT, follo)in" the Esso doctrine,

)hen it noted that the t)o classes of products in this case flo) throu"h

different trade channels. The products of petitioner are sold throu"h special

chemical stores or distributors )hile the products of private respondent are

sold in "rocer stores, sari-sari stores and department stores.9: Thus, the

evident disparit of the products of the parties in the case at bar renders

unfounded the apprehension of petitioner that confusion of business or ori"in

mi"ht occur if private respondent is allo)ed to use the mar# CAN%N.

6n its bid to bar the re"istration of private respondent of the mar# CAN%N,

petitioner invo#es the protective mantle of the Paris Convention. Petitioner

asserts that it has the e(clusive ri"ht to the mar# CAN%N because it forms

part of its corporate name or tradename, protected b Article ; of the Paris

Convention, to )it/

0A tradename shall be protected in all the countries of the &nion

)ithout the obli"ation of filin" or re"istration, )hether or not it

forms part of a trademar#.0

Public respondents BPTTT and the Court of Appeals alle"edl committed an

oversi"ht )hen the re=uired petitioner to prove that its mar# is a )ell-

#no)n mar# at the time the application of private respondent )as filed.Petitioner =uestions the applicabilit of the "uidelines embodied in the

Memorandum of then Minister of Trade and 6ndustr Roberto %n"pin

%n"pin dated %ctober 95, 13;: )hich accordin" to petitioner implements

Article 4bis of the Paris Convention, the provision referrin" to the protection

of trademar#s. The memorandum reads/

0a the mar# must be internationall #no)n>

14

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15/40

b the sub!ect of the ri"ht must be a trademar#, not a patent or

copri"ht or anthin" else>

c the mar# must be for use in the same or similar class of "oods>

d the person claimin" must be the o)ner of the mar#.0

Accordin" to petitioner, it should not be re=uired to prove that its trademar#is )ell-#no)n and that the products are not similar as re=uired b the =uoted

memorandum. Petitioner emphasi the names or titles la)full

adopted and used b natural or !uridical persons, unions, and an

manufacturin", industrial, commercial, a"ricultural or other or"ani


16/40

The Convention of Paris for the Protection of 6ndustrial Propert, other)ise

#no)n as the Paris Convention, of )hich both the Philippines and 8apan, the

countr of petitioner, are si"natories93, is a multilateral treat that see#s to

protect industrial propert consistin" of patents, utilit models, industrial

desi"ns, trademar#s, service mar#s, trade names and indications of source or

appellations of ori"in, and at the same time aims to repress unfair

competition.:D e a"ree )ith public respondents that the controllin" doctrine

)ith respect to the applicabilit of Article ; of the Paris Convention is that

established in @aushi @aisha 4setan (s. 4ntermediate Appellate Court.:1 As

pointed out b the BPTTT/

0Re"ardin" the applicabilit of Article ; of the Paris Convention, this

%ffice believes that there is no automatic protection afforded an

entit )hose tradename is alle"ed to have been infrin"ed throu"h the

use of that name as a trademar# b a local entit.

6n Iabushi#i Iaisha 6setan vs. The 6ntermediate Appellate Court, et.

al., F.R. No. 7529D, 15 November 1331, the onorable 'upreme

Court held that/

?The Paris Convention for the Protection of 6ndustrial

Propert does not automaticall e(clude all countries of the

)orld )hich have si"ned it from usin" a tradename )hich

happens to be used in one countr. To illustrate if a ta(icab

or bus compan in a to)n in the &nited Iin"dom or 6ndia

happens to use the tradename 0Rapid Transportation0, it does

not necessaril follo) that 0Rapid0 can no lon"er bere"istered in &"anda, @i!i, or the Philippines.

This office is not unmindful that in the Treat of Paris for the

Protection of 6ntellectual Propert re"ardin" )ell-#no)n mar#s and

possible application thereof in this case. Petitioner, as this office sees

it, is trin" to see# refu"e under its protective mantle, claimin" that

the sub!ect mar# is )ell #no)n in this countr at the time the then

application of N'R Rubber )as filed.

o)ever, the then Minister of Trade and 6ndustr, the on. Roberto

. %n"pin, issued a memorandum dated 95 %ctober 13;: to the

+irector of Patents, a set of "uidelines in the implementation of

Article 4bis sic of the Treat of Paris. These conditions are/

a the mar# must be internationall #no)n>

b the sub!ect of the ri"ht must be a trademar#, not a patentor copri"ht or anthin" else>

c the mar# must be for use in the same or similar #inds of

"oods> and

d the person claimin" must be the o)ner of the mar# The

Parties Convention Commentar on the Paris Convention.

Article b +r. Bo"sch, +irector Feneral of the orld

6ntellectual Propert %r"ani


17/40

in the case of @aushi @aisha 4setan (s. 4ntermediate Appellate Court that

Article ; of the Paris Convention does not automaticall e(tend protection to

a tradename that is in dan"er of bein" infrin"ed in a countr that is also a

si"nator to said treat. This contention deserves scant consideration. 'uffice

it to sa that the !ust =uoted pronouncement in the case of @aushi @aisha

4setan (s. 4ntermediate Appellate Court, )as made independent of the factual

findin" that petitioner in said case had not conducted its business in this

countr.

6HERE!ORE, in vie) of the fore"oin", the instant petition for revie) on

certiorari is +EN6E+ for lac# of merit.

'% %R+ERE+.


'&PREME C%&RT

Manila

T6R+ +66'6%N

F.R. No. 135415 April 91, 9D12

BANI %@ C%MMERCE, Petitioner,

vs.

RA+6% P6$6PP6NE' NET%RI, 6NC., 6NTERC%NT6NENTA$

BR%A+CA'T6NF C%RP%RAT6%N, and BANAA BR%A+CA'T6NF

C%RP%RAT6%N, TR& B%AR+ %@ A+M6N6'TRAT%R, and 'ER6@@

B6ENEN6+% '. REGE', 8R., 'heriff, Re"ional Trial Court of Jue

sub!ect to inclusion of the follo)in" provision in the P A/

17


18/40

The parties to the P A had considered other potential liabilities a"ainst

TRB, and to address these claims, the parties have a"reed to set up an escro)

fund amountin" to @ift Million Pesos P5D,DDD,DDD.DD in cash to be

invested in "overnment securities to ans)er for an such claim that shall be

!udiciall established, )hich fund shall be #ept for 15 ears in the trust

department of an other ban# acceptable to the B'P. An deviation therefrom

shall re=uire prior approval from the Monetar Board.

( ( ( (

@ollo)in" the above approval, on November 3, 9DD1 Bancommerce entered

into a P A A"reement )ith TRB and ac=uired its specified assets and

liabilities, e(cludin" liabilities arisin" from !udicial actions )hich )ere to be

covered b the B'P-mandated escro) of P5D million.

To compl )ith the B'P mandate, on +ecember 4, 9DD1 TRB placed P5D

million in escro) )ith Metropolitan Ban# and Trust Co. Metroban# to

ans)er for those claims and liabilities that )ere e(cluded from the P A

A"reement and remained )ith TRB. Accordin"l, the B'P finall approved

such a"reement on 8ul :, 9DD9.

'hortl after or on %ctober 1D, 9DD9, actin" in F.R. 1:;51D, Traders Roal

Ban# v. Radio Philippines Net)or# RPN, 6nc., this Court ordered TRB to

pa respondents RPN, 6ntercontinental Broadcastin" Corporation, and

Banaha) Broadcastin" Corporation collectivel, RPN, et al. actual

dama"es of P3,73D,714.;7 plus 19L le"al interest and some amounts. Based

on this decision, RPN, et al.filed a motion for e(ecution a"ainst TRB before

the Re"ional Trial Court RTC of Jue


19/40

e are not prepared thou"h, unli#e the respondent 8ud"e, to declare the P'A

bet)een TRB and BANC%M as a farce or 0a mere tool to effectuate a mer"er

andKor consolidation0 of the parties to the P'A. There is !ust a dearth of

conclusive evidence to support such a findin", at least at this point.

Conse=uentl, the statement in the dispositive portion of the assailed Au"ust

15, 9DD5 %rder referrin" to a mer"erKconsolidation bet)een TRB and

BANC%M is deleted.4

( ( ( (

ERE@%RE, the herein consolidated Petitions are +EN6E+. The assailed

%rders dated Au"ust 15, 9DD5 and @ebruar 99, 9DD4 of the respondent

8ud"e, are A@@6RME+ )ith the M%+6@6CAT6%N that the pronouncement of

respondent 8ud"e in the Au"ust 15, 9DD5 %rder that the P'A bet)een TRB

and BANC%M is a farce or 0a mere tool to effectuate a mer"er andKor

consolidation bet)een TRB and BANC%M0 is +E$ETE+.

'% %R+ERE+.7

%n 8anuar ;, 9D1D RPN, et al. filed )ith the RTC a motion to cause the

issuance of an alias )rit of e(ecution a"ainst Bancommerce based on the CA

+ecision. The RTC "ranted; the motion on @ebruar 13, 9D1D on the premise

that the CA +ecision allo)ed it to e(ecute on the assets that Bancommerce

ac=uired from TRB under their P A A"reement.

%n March 1D, 9D1D Bancommerce sou"ht reconsideration of the RTC %rder

considerin" that the +ecember ;,9DD3 CA +ecision actuall declared that no

mer"er e(isted bet)een TRB and Bancommerce. But, since the RTC had

alread issued the alias )rit on March 3, 9D1D Bancommerce filed on March

14, 9D1D a motion to =uash the same, follo)ed b supplemental Motion3 on

April 93, 9D1D.

%n Au"ust 1;, 9D1D the RTC issued the assailed %rder1D denin"

Bancommerce pleas and, amon" others, directin" the release to the 'heriff of

BancommerceOs 0"arnished monies and shares of stoc# or their monetar

e=uivalent0 and for the sheriff to pa 95L of the amount 0to the respondentsO

counsel representin" his attorneOs fees and P9DD,DDD.DD representin" his

appearance fees and liti"ation e(penses0 and the balance to be paid to the

respondents after deductin" court dues.

A""rieved, Bancommerce immediatel elevated the RTC %rder to the CA via

a petition for certiorari under Rule 45 to assail the %rders dated @ebruar 13,

9D1D and Au"ust 1;, 9D1D. %n November 94, 9D1D the CA11 dismissed the

petition outri"ht for the supposed failure of Bancommerce to file a motion

for reconsideration of the assailed order. The CA denied BancommerceOs

motion for reconsideration on @ebruar 3, 9D11, promptin" it to come to this

Court.

The issues this case presents are/

1. hether or not the CA "ravel erred in holdin" that Bancommerce had no

valid e(cuse in failin" to file the re=uired motion for reconsideration of the

assailed RTC %rder before comin" to the CA> and

9. hether or not the CA "ravel erred in failin" to rule that the RTCOs %rder

of e(ecution a"ainst Bancommerce )as a nullit because the CA +ecision of

19


20/40

+ecember ;, 9DD3 in CA-F.R. 'P 3195; held that TRB had not been mer"ed

into Bancommerce as to ma#e the latter liable for TRBOs !ud"ment debts.

+irect filin" of the petition for

certiorari b Bancommerce

'ection 1, Rule 45 of the Rules of Court provides that a petition for certiorari

ma onl be filed )hen there is no plain, speed, and ade=uate remed in the

course of la). 'ince a motion for reconsideration is "enerall re"arded as a

plain, speed, and ade=uate remed, the failure to first ta#e recourse to is

usuall re"arded as fatal omission.

But Bancommerce invo#ed certain reco"ni and d the issues raised )ere purel of la).

6n this case, the records ampl sho) that BancommerceOs action fell )ithin

the reco"ni


21/40

Mer"er is a re-or"ani


22/40

an plan or articles of mer"er or consolidation. More importantl, the 'EC

did not issue an certificate of mer"er or consolidation.

The dissentin" opinion of 8ustice Mendo


23/40

The Bureau of 6nternal Revenue B6R treated the transaction bet)een the

t)o ban#s purel as a sale of specified assets and liabilities )hen it rendered

its opinion99 on the ta( conse=uences of the transaction "iven that there is a

difference in ta( treatment bet)een a sale and a mer"er or consolidation.

6ndubitabl, since the transaction bet)een TRB and Bancommerce )as

neither a mer"er nor a de facto mer"er but a mere 0sale of assets )ith

assumption of liabilities,0 the ne(t =uestion before the Court is )hether or

not the RTC could re"ard Bancommerce as RPN, et al.Os !ud"ment debtor.

6t is pointed out that under common la),9: if one corporation sells or

other)ise transfers all its assets to another corporation, the latter is not liable

for the debts and liabilities of the transferor if it has acted in "ood faith and

has paid ade=uate consideration for the assets, e(cept/ 1 )here the

purchaser e(pressl or impliedl a"rees to assume such debts> 9 )here the

transaction amounts to a consolidation or mer"er of the corporations> :

)here the purchasin" corporation is merel a continuation of the sellin"

corporation> and 2 )here the transaction is entered into fraudulentl in

order to escape liabilit for such debts.92

But, in the first place, common la) has no application in this !urisdiction

)here e(istin" statutes "overnin" the situation are in place. 'econdl, none

of the cited e(ceptions appl to this case.

1. Bancommerce a"reed to assume those liabilities of TRB that are specified

in their P A A"reement. That a"reement specificall e(cluded TRBOs

contin"ent liabilities that the latter mi"ht have arisin" from pendin"

liti"ations in court, includin" the claims of respondent RPN, et al.

The pertinent provision of the P A provides/

Article 66

C%N'6+ERAT6%N/ A''&MPT6%N %@ $6AB6$6T6E'

6n consideration of the sale of identified recorded assets and properties

covered b this A"reement, BANC%MMERCE shall assume identified

recorded TRBOs liabilities includin" boo#ed contin"ent liabilities as listed

and referred to in its Consolidated 'tatement of Condition as of Au"ust :1,

9DD1, in the total amount of PE'%'/ TEN B6$$6%N @%&R &N+RE+

%NE M6$$6%N @%&R &N+RE+ T6RTG '6 T%&'AN+

P1D,21D,2:4,DDD.DD, provided that the liabilities so assumed shall not

include/

( ( ( (

9. 6tems in liti"ation, both actual and prospective, a"ainst TRB )hich

include but not limited to the follo)in"/

9.1 Claims of su"ar planters for alle"ed under valuation of su"ar e(port

sales ( ( (>

9.9 Claims of the Republic of the Philippines for peso-denominated

certificates supposed to have been placed b the Marcos famil )ith TRB>

23


24/40

9.: %ther liabilities not included in said Consolidated 'tatement of

Condition> and

9.2 $iabilities accruin" after the effectivit date of this A"reement that

)ere not incurred in the ordinar course of business.95 &nderscorin"

supplied

9. As alread pointed out above, the sale did not amount to mer"er or de

facto mer"er of Bancommerce and TRB since the elements re=uired of both

)ere not present.

:. The evidence in this case fails to sho) that Bancommerce )as a mere

continuation of TRB. TRB retained its separate and distinct identit after the purchase. Althou"h it subse=uentl chan"ed its name to Traders Roal

oldin"Os, 6nc. such chan"e did not result in its dissolution. 0The chan"in" of

the name of a corporation is no more than creation of a corporation than the

chan"in" of the name of a natural person is the be"ettin" of a natural person.

The act, in both cases, )ould seem to be )hat the lan"ua"e )hich )e use to

desi"nate it importsa chan"e of name and not a chan"e of bein".094 As

such, Bancommerce and TRB remained separate corporations.

2. To protect contin"ent claims, the B'P directed Bancommerce and TRB

to put up P5D million in escro) )ith another ban#. 6t )as the B'P, not

Bancommerce that fi(ed the amount of the escro). Conse=uentl, it cannot

be said that the latter ban# acted in bad faith )ith respect to the e(cluded

liabilities. The did not enter into the P A A"reement to enable TRB to

escape from its liabilit to creditors )ith pendin" court cases.

@urther, even )ithout the escro), TRB continued to be liable to its creditors

althou"h under its ne) name. Parentheticall, the P A A"reement sho)s

that Bancommerce ac=uired "reater amount of TRB liabilities than assets.

Article 66 of the P A A"reement sho)s that Bancommerce assumed total

liabilities of P1D,2D1,2:4,DDD.DD )hile it received total assets of onl

P1D,949,152,DDD.DD. This proves the arms len"th =ualit of the transaction.

The dissentin" opinion of 8ustice Mendo


25/40

6t is thus clear that the phrase 0no) #no)n as Ban# of Commerce0 used in

the petition served onl to indicate that Bancommerce is no) the former

propert o)nerOs creditor that filed the petition for )rit of possession as a

result of the P A A"reement. 6t does not indicate a mer"er.

$astl, the dissentin" opinion of 8ustice Mendo


26/40

5; referrin" to the aforementioned transaction bet)een TRB and

Bancommerce as a purchase and assumption a"reement.0:9

'ince there had been no mer"er, Bancommerce cannot be considered as

TRBOs successor-in-interest and a"ainst )hich the CourtOs +ecision of

%ctober 1D, 9DD9 in F.R. 1:;51D ma been forced. Bancommerce did not

hold the former TRBs assets in trust for it as to sub!ect them to "arnishment

for the satisfaction of the latterOs liabilities to RPN, et al. Bancommerce

bou"ht and ac=uired those assets and thus, became their absolute o)ner.

The CA +ecision in

CA-F.R. 'P 3195;

Accordin" to the dissentin" opinion of 8ustice Mendo


27/40

ERE@%RE, the petition is FRANTE+. The assailed Resolution of

November 94, 9D1D and the Resolution of @ebruar 3, 9D11 of the Court of

Appeals both in CA-F.R. 'P 1147D2 are REER'E+ and 'ET A'6+E.

Accordin"l, the assailed %rders dated @ebruar 13, 9D1D and Au"ust 1;,

9D1D, the Alias rit of E(ecution dated March 3, 9D1D, all issued b the

Re"ional Trial Court and all orders, notices of "arnishmentKlev, or notices of

sale and an other action emanatin" from the %rders dated @ebruar 13, 9D1D

and Au"ust 1;, 9D1D in Civil Case J-;3-:5;D are ANN&$$E+ and 'ET

A'6+E. The Temporar Restrainin" %rder issued b this Court on April 1:,

9D11 is hereb made PERMANENT.

'% %R+ERE+.

Patents


SUPREME COURT

Manila

T6R+ +66'6%N

G.R. No. 188#2$ No++r 11, 2'1"

CENTUR CHINESE MEICINE CO., MING SENG CHINESE

RUGSTORE, :IANG JIAN CHINESE RUG STORE, TE/

SAN CHINESE RUG STORE, SIM SIM CHINESE RUG

STORE, AN SHIONG TA CHINESE RUG STORE ()*;or

6ILCENO TAN MENE3, SHUANG ING CHINESE

RUGSTORE, ()* ACLARAN CHINESE RUG STORE,

Petitioners,

vs.

PEOPLE O! THE PHILIPPINES ()* LING NA LAU,

Respondents.

+ E C 6 ' 6 % N

PERALTA, J.:

Before us is a petition for revie) on certiorari )hich see#s to reverse

and set aside the +ecision1 dated March :1, 9DD3 of the Court of

Appeals in CA-F.R. C No. ;;359 and the Resolution9 dated 8ul 9,

9DD3, )hich denied reconsideration thereof. The CA reversed the

%rder : dated 'eptember 95, 9DD4 of the Re"ional Trial Court RTC,

Branch 12:, Ma#ati Cit, =uashin" 'earch arrants Nos. D5-D:D, D5-

D::, D5-D:;, D5-D99, D5-D9:, D5-D95, D5-D29 and D5-D2:, and the

%rder 2 dated March 7, 9DD7 denin" reconsideration thereof.

The antecedent facts are as follo)s/

Respondent $in" Na $au, doin" business under the name and stle

orld)ide Pharmac,5 is the sole distributor and re"istered trademar#

o)ner of T%P FE$ T.F. +E6CE %@ A $EA@ papaa )hitenin"

soap as sho)n b Certificate of Re"istration 2-9DDD-DD3;;1 issued to

her b the 6ntellectual Propert %ffice 6P% for a period of ten ears

from Au"ust 92, 9DD:.4 %n November 7, 9DD5, her representative,

Pin" Na $au, Pin" )rote a letter 7 addressed to National Bureau of6nvesti"ation NB6 +irector Renaldo coco, throu"h Att. 8ose

8usto Gap and A"ent 8oseph F. @urin" A"ent @urin", re=uestin"

assistance for an investi"ation on several dru"stores )hich )ere

sellin" counterfeit )hitenin" papaa soaps bearin" the "eneral

appearance of their products.

27

http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt1http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt2http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt3http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt4http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt5http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt5http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt5http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt6http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt7http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt1http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt2http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt3http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt4http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt5http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt6http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt7


28/40

A"ent @urin" )as assi"ned to the case and he e(ecuted an affidavit;

statin" that/ he conducted his o)n investi"ation, and on November 3

and 1D, 9DD5, he, to"ether )ith 8unad Esmael Esmael, )ere able to

bu )hitenin" soaps bearin" the trademar# 0T%P-FE$0, 0T.F.0

0+E6CE %@ A $EA@0 )ith correspondin" receipts from a list of

dru"stores )hich included herein petitioners Centur Chinese

Medicine Co., Min 'en" Chinese +ru"store, ian" 8ian" Chinese+ru" 'tore, Te# 'an Chinese +ru" 'tore, 'im 'im Chinese +ru"

'tore, Ban 'hion" Ta +ru"store, 'huan" Gin" Chinese +ru"store,

and Baclaran Chinese +ru" 'tore> )hile conductin" the investi"ation

and test bus, he )as able to confirm Pin"?s complaint to be true as he

personall sa) commercial =uantities of )hitenin" soap bearin" the

said trademar#s bein" displaed and offered for sale at the said

dru"stores> he and Esmael too# the purchased items to the NB6, and

Pin", as the authori that Gu is not a

part- respondent in these cases and the pendenc of the civil case

filed b him is immaterial and irrelevant> and that Gu cannot be

considered the sole o)ner and distributor of 0T%P FE$ T.F.

+E6CE %@ A [email protected] The motion )as then submitted for resolution28

http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt8http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt9http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt10http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt11http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt12http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt13http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt14http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt8http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt9http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt10http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt11http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt12http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt13http://www.lawphil.net/judjuris/juri2013/nov2013/gr_188526_2013.html#fnt14


29/40

in an %rder dated 8anuar :D, 9DD4. +urin" the pendenc of the case,

respondent, on April 9D, 9DD4, filed a 'ubmission15 in relation to the

Motion to Juash attachin" an %rder 14 dated March 91, 9DD4 of the

6P% in 6P Case No. 1D-9DD5-DDDD1 filed b respondent a"ainst Gu,

doin" business under the name and stle of MCA Manufacturin" and

eidi '. Cua, proprietor of 'outh %cean Chinese +ru" 'tores for

trademar# infrin"ement andKor unfair competition and dama"es )ith praer for preliminar in!unction. The %rder approved therein the

parties? 8oint Motion To Approve Compromise A"reement filed on

March ;, 9DD4. e =uote in its entiret the %rder as follo)s/

The Compromise A"reement bet)een the herein complainant and

respondents provides as follo)s/

1. Respondents ac#no)led"e the e(clusive ri"ht of

Complainant over the trademar# T%P FE$ T.F. +E6CE%@ A $EA@ for use on papaa )hitenin" soap as re"istered

under Re"istration No. 2-9DDD-DD3;;1 issued on Au"ust 92,

9DD:.

9. Respondents ac#no)led"e the appointment b Henna

Chemical 6ndustr Co., $td. of Complainant as the e(clusive

Philippine distributor of its products under the tradename and

trademar# T%P FE$ MCA MCA +E6CE A 'J&ARE

+E6CE C%N'6'T6NF %@ A 'TG$6HE+REPRE'ENTAT6%N %@ A $ETTER 0M0 6''&E+ 0 %ER

TE $ETTER 0CA0 as re"istered under Re"istration No. 2-

1334-1D3357 issued on November 17, 9DDD, as )ell as the

assi"nment b Henna Chemical 6ndustr Co., $td. to

Complainant of said mar# for use on papaa )hitenin" soap.

:. Respondents admit havin" used the tradename and

trademar# aforesaid but after havin" reali


30/40

7. The Parties hereb a"ree to submit this Compromise

A"reement for Approval of this %ffice and pra for issuance of

a decision on the basis thereof.

@indin" the Compromise A"reement to have been dul e(ecuted and

si"ned b the parties andKor their representativesKcounsels and the

terms and conditions thereof to be in conformit )ith the la), morals,

"ood customs, public order and public polic, the same is hereb

APPR%E+. Accordin"l, the above-entitled case is +6'M6''E+ as

all issues raised concernin" herein parties have been rendered M%%T

AN+ ACA+EM6C.

'% %R+ERE+.17

%n 'eptember 95, 9DD4, the RTC issued its %rder 1; sustainin" the

Motion to Juash the 'earch arrants, the dispositive portion of )hich

reads as follo)s/

ERE@%RE, findin" that the issuance of the =uestioned search

)arrants )ere not supported b probable cause, the Motion to Juash is

FRANTE+. 'earch )arrants nos. D5-D:D, D5-D::, D5-D:;, D5-D99, D5-

D9:, D5-D95, D5-D29, D5-D2: are ordered lifted and recalled.

The NB6 %fficers )ho effected the search )arrants are hereb ordered

to return the sei


31/40

Respondent then filed her appeal )ith the CA. After respondent filed

her appellant?s brief and petitioners their appellee?s brief, the case )as

submitted for decision.

%n March :1, 9DD3, the CA rendered its assailed +ecision, the

dispositive portion of )hich reads/

ERE@%RE, in vie) of the fore"oin" premises, !ud"ment is hereb

rendered b us FRANT6NF the appeal filed in this case and

'ETT6NF A'6+E the %rder dated March 7, 9DD7 issued b Branch

12: of the Re"ional Trial Court of the National Capital 8udicial Re"ion

stationed in Ma#ati Cit in the case involvin" 'earch arrants Nos.

D5-D:D, D5-D::, D5-D:;, D5-D99, D5-D9:, D5-D95, D5-D29, D5-D2:.9:

6n reversin" the RTC?s =uashal of the search )arrants, the CA found

that the search )arrants )ere applied for and issued for violations of

'ections 155 and 14;, in relation to 'ection 17D, of the 6ntellectual

Propert Code and that the applications for the search )arrants )ere in

anticipation of criminal actions )hich are to be instituted a"ainst

petitioners> thus, Rule 194 of the Rules of Criminal Procedure )as

applicable. 6t also ruled that the basis for the applications for issuance

of the search )arrants on "rounds of trademar#s infrin"ement and

unfair competition )as the trademar# T%P FE$ T.F. +E6CE %@

A $EA@> that respondent )as the re"istered o)ner of the said

trademar#, )hich "ave her the ri"ht to enforce and protect herintellectual propert ri"hts over it b see#in" assistance from the NB6.

The CA did not a"ree )ith the RTC that there e(isted a pre!udicial

=uestion, since Civil Case No. D5-52727 )as alread dismissed on

8une 1D, 9DD5, i.e., lon" before the search )arrants sub!ect of this

appeal )ere applied for> and that Gu?s motion for reconsideration )as

denied on 'eptember 15, 9DD5 )ith no appeal havin" been filed

thereon as evidenced b the Certificate of @inalit issued b the said

court.

Petitioners? motion for reconsideration )as denied b the CA in a

Resolution dated 8ul 9, 9DD3. ence, this petition filed b petitioners

raisin" the issue that/

A TE C%&RT %@ APPEA$' ERRE+ AN+ FRAE$G

AB&'E+ 6T' +6'CRET6%N 6N REER'6NF TE

@6N+6NF' %@ TE REF6%NA$ TR6A$ C%&RT AN+

E$+ TAT TE $ATTER APP$6E+ TE R&$E' %N'EARC AN+ 'E6H&RE 6N C66$ ACT6%N' @%R

6N@R6NFEMENT %@ 6NTE$$ECT&A$ PR%PERTG

R6FT'.92

B TE C%&RT %@ APPEA$' ERRE+ AN+ FRAE$G

AB&'E+ 6T' +6'CRET6%N EN 6T BA'E+ 6T'

R&$6NF %N TE ARF&MENT 6C A' BR%&FT

&P @%R TE @6R'T T6ME 6N RE'P%N+ENT $6NF NA

$A&?' APPE$$ANT?' [email protected]

Petitioners contend that the products sei


32/40

RTC?s order to release the sei that one or t)o samples from each petitionerOs? dru"store

)ould have sufficed in case there is a need to present them in a

criminal prosecution, and that confiscation of thousands of these

products )as an over#ill.

Petitioners also ar"ue that the issue that the RTC erred in applin" the

rules on search and sei )hile 'ection 14;, in relation

to 'ection 17D, penali


33/40

Thus, )e a"ree )ith the CA that A.M. No. D9-1-D4-'C, )hich

provides for the Rules on the 6ssuance of the 'earch and 'ei


34/40

The RTC =uashed the search )arrants, sain" that 1 there e(ists a

pre!udicial =uestion pendin" before Branch 3: of the RTC of Jue and there )as also a case for trademar#

infrin"ement andKor unfair competition filed b respondent a"ainst Gu pendin" before the 6P%, doc#eted as 6P Case No. 1D-9DD5-DDDD1>

and 9 Gu?s representation that he is the sole distributor of the Top Fel

)hitenin" soap, as the latter even presented Re"istration No. 2-1334-

1D3357 issued b the 6P% to Henna Chemical 6ndustr as the

re"istered o)ner of the trademar# T%P FE$ MCA +E6CE MCA

for a term of 9D ears from November 17, 9DDD coverin" the same

product.

e do not a"ree. e affirm the CA?s reversal of the RTC %rder=uashin" the search )arrants.

The affidavits of NB6 A"ent @urin" and his )itnesses, Esmael and

$in", clearl sho)ed that the are see#in" protection for the trademar#

0T%P FE$ T.F. and +E6CE %@ A $EA@0 re"istered to respondent

under Certificate of Re"istration 2-9DDD-DD3;;1 issued b the 6P% on

Au"ust 92, 9DD:, and no other. hile petitioners claim that the product

the are distributin" )as o)ned b Gu )ith the trademar# T%P FE$

MCA and MCA +E6'E under Certificate of Re"istration 2-1334-1D3357, it )as different from the trademar# T%P FE$ T.F. and

+E6CE %@ A $EA@ sub!ect of the application. e a"ree )ith the

CA?s findin" in this )ise/

( ( ( 6t bears stressin" that the basis for the applications for issuances

of the search )arrants on "rounds of trademar# infrin"ement and

unfair competition is the trademar# T%P FE$ T.F. +E6CE %@ A

$EA@. Private complainant-appellant )as issued a Certificate of

Re"istration No. 2-9DDD-DD3;;1 of said trademar# on Au"ust 92, 9DD:

b the 6ntellectual Propert %ffice, and is thus considered the la)ful

holder of the said trademar#. Bein" the re"istrant and the holder of the

same, private complainant-appellant had the authorit to enforce and

protect her intellectual propert ri"hts over it. This prompted her to

re=uest for assistance from the a"ents of the NB6, )ho thereafterconducted a series of investi"ation, test bus and inspection re"ardin"

the alle"ed trademar# infrin"ement b herein respondents-appellees.

'ubse=uentl, Pin" Na $au, private complainant-appellantOs

representative, issued a certification )ith the findin" that the e(amined

"oods )ere counterfeit. This prompted the NB6 a"ents to appl for the

issuances of search )arrants a"ainst the respondents-appellees. 'aid

applications for the search )arrants )ere "ranted after b 8ud"e

$a"uilles after e(aminin" under oath the applicant A"ent @urin" of the

NB6 and his )itnesses Pin" Na $au and 8unad R. 6smael.

Based on the fore"oin", it is clear that the re=uisites for the issuance of

the search )arrants had been complied )ith and that there is probable

cause to believe that an offense had been committed and that the

ob!ects sou"ht in connection )ith the offense )ere in the places to be

searched. The offense pertains to the alle"ed violations committed b

respondents-appellees upon the intellectual propert ri"hts of herein

private complainant-appellant, as holder of the trademar# T%P FE$

T.F. +E6CE %@ A $EA@ under Certificate of Re"istration No. 2-9DDD-DD3;;1, issued on Au"ust 92, 9DD: b the 6ntellectual Propert

%ffice.:1

Notabl, at the time the applications for the issuance of the search

)arrants )ere filed on November 91, 9DD5, as the CA correctl found,

Civil Case No. J-D5-52727, )hich the RTC found to be )here a

pre!udicial =uestion )as raised, )as alread dismissed on 8une 1D,

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9DD5,:9 because of the pendenc of a case involvin" the same issues

and parties before the 6P%. Gu?s motion for reconsideration )as denied

in an %rder :: dated 'eptember 15, 9DD5. 6n fact, a Certificate of

@inalit:2 )as issued b the RTC on 8anuar 2, 9DD7.

Moreover, the 6P% case for trademar# infrin"ement and unfair

competition and dama"es )ith praer for preliminar in!unction filed

b respondent a"ainst Gu and eidi Cua, doc#eted as 6P Case No.

1D-9DD5-DDDD1, )ould not also be a basis for =uashin" the

)arrants.7a((phi7 6n fact, prior to the applications for the issuance of

the assailed search )arrants on November 91, 9DD5, the 6P% had

issued an %rder :5 dated %ctober 9D, 9DD5 "rantin" a )rit of

preliminar in!unction a"ainst Gu and Cua, the dispositive portion of

)hich reads/

ERE@%RE, the R6T %@ PRE$6M6NARG 6N8&NCT6%N ishereb issued a"ainst Respondent, Ben!amin Gu, doin" business under

the name and stle of MCA Manufacturin" and eidi '. Cua,

Proprietor of 'outh %cean Chinese +ru" 'tore, and their a"ents,

representatives, dealers and distributors and all persons actin" in their

behalf, to cease and desist usin" the trademar# 0T%P FE$ T.F.

+E6CE %@ A $EA@0 or an colorable imitation thereof on Papaa

)hitenin" soaps the manufacture, sell, andKor offer for sale, and

other)ise, from pac#in" their Papaa hitenin" 'oaps in bo(es )ith

the same "eneral appearance as those of complainant?s bo(es )ithin a period of N6NETG 3D +AG', effective upon the receipt of

respondent of the cop of the C%MP$6ANCE filed )ith this %ffice b

the Complainant statin" that it has posted a CA' B%N+ in the

amount of %NE &N+RE+ T%&'AN+ PE'%' Php1DD,DDD.DD

to"ether )ith the correspondin" %fficial Receipt Number and date

thereof. Conse=uentl, complainant is directed to inform this %ffice of

actual date of receipt b Respondent of the aforementioned

C%MP$6ANCE.:4

To inform the public of the issuance of the )rit of preliminar

in!unction, respondent?s counsel had the dispositive portion of the

%rder published in The Philippine 'tar ne)spaper on %ctober :D,

9DD5.:7 Thus, it )as clearl stated that Gu, doin" business under the

name and stle of MCA Manufacturin", his a"ents, representatives,

dealers and distributors and all persons actin" in his behalf, )ere to

cease and desist from usin" the trademar# 0T%P FE$ +E6CE %@

A $EA@0 or an colorable imitation thereof on Papaa hitenin"

soaps the manufacture, sell andKor offer for sale. Petitioners, )ho

admitted havin" derived their T%P FE$ products from Gu, are,

therefore, notified of such in!unction and )ere en!oined from sellin"

the same.

Not)ithstandin", at the time of the application of the search )arrants

on November 91, 9DD5, and )hile the in!unction )as in effect,

petitioners )ere still sellin" the alle"ed counterfeit products bearin"

the trademar# T%P FE$ T.F. +E6CE %@ A $EA@. There e(ists a

probable cause for violation of respondent?s intellectual propert

ri"hts, )hich entitles her as the re"istered o)ner of the trademar# T%P

FE$ and +E6CE %@ A $EA@ to be protected b the issuance of the

search )arrants.

More importantl, durin" the pendenc of petitioners? motion to =uash

in the RTC, respondent submitted the %rder dated March ;, 9DD4 of

the 6P% in 6P Case No. 1D-9DD5-DDDD1, )here the )rit of

preliminar in!unction )as earlier issued, approvin" the compromise

a"reement entered into b respondent )ith Gu and Cua )here it )as

stated, amon" others, that/

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1. Respondents ac#no)led"e the e(clusive ri"ht of

Complainant over the trademar# T%P FE$ T.F. +E6CE

%@ A $EA@ for use on papaa )hitenin" soap as re"istered

under Re"istration No. 2-9DDD-DD3;;1 issued on Au"ust 92,

9DD:.

9. Respondents ac#no)led"e the appointment b Henna

Chemical 6ndustr Co., $td. of Complainant as the e(clusive

Philippine distributor of its products under the tradename and

trademar# T%P FE$ MCA MCA +E6CE A 'J&ARE

+E6CE C%N'6'T6NF %@ A 'TG$6HE+

REPRE'ENTAT6%N %@ A $ETTER 0M0 %ER TE

$ETTER 0CA0 as re"istered under Re"istration No 2-1334-

1D3357 issued on November 17, 9DDD, as )ell as the

assi"nment b Henna Chemical 6ndustr Co., $td. to

Complainant of said mar# for use on papaa )hitenin" soap.

:. Respondents admit havin" used the tradename and

trademar# aforesaid, but after havin" reali


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)as re"istered to therein respondentsO names> that it )as the desi"n of

the plastic containerKcase that is alle"ed to have been utili


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)arrants themselves reveal that the same )ere applied for and issued

for violations of 0'ection 155 in relation to 'ection 17D of RA ;93:0

and violations of 0'ection 14; in relation to 'ection 17D of RA ;93:,0

and that a perusal of the records )ould sho) that there is no mention

of a civil action or anticipation thereof, upon )hich the search

)arrants are applied for.

Appellees herein petitioners cannot a"ree )ith the contention of the

appellant.7/phi7 Complainant NB6 A"ent 8oseph F. @urin", )ho

applied for the search )arrants, violated the ver rule on search and

sei


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default on their obli"ations to submit periodic li=uidations of theiroperational e(penses in relation to the revolvin" funds Banda"

provided them. Conse=uentl, Banda" terminated their respective '@A.

A""rieved, petitioners filed a complaint for constructive dismissal,

nonpament of )a"es, incentive pa, 1:th month pa and dama"esa"ainst Banda" )ith the National $abor Relations Commission

N$RC. Petitioners contend that, not)ithstandin" the e(ecution of the'@As, the remained to be Banda"Os emploees, the '@As bein" but a

circumvention of their status as re"ular emploees.

@or its part, Banda" pointed out that petitioners freel resi"ned from

their emploment and decided to avail themselves of the opportunitto be independent entrepreneurs under the franchise scheme that

Banda" had. Thus, no emploeremploee relationship e(isted

bet)een petitioners and Banda".

%n March 12, 9DD: the $abor Arbiter rendered a +ecision, dismissin"the complaint on the "round that no emploeremploee relationship

e(isted bet)een Banda" and petitioners. &pon petitionersO appeal tothe N$RC the latter affirmed on 8une :D, 9DD: the $abor ArbiterOs

+ecision. 6t also denied petitionersO motion for reconsideration.

&ndaunted, petitioners filed a petition for certiorari under Rule 45)ith the Court of Appeals CA ascribin" "rave abuse of discretion.

%n 8ul 93, 9DD5 the CA rendered a +ecision,1 dismissin" the petitionfor lac# of merit. 6t also denied their motion for reconsideration on

@ebruar 7, 9DD4.

I%+ o >+ C(+

The onl issue presented in this case is )hether or not petitioners

remained to be Banda"Os salesmen under the franchise scheme itentered into )ith them.

R%li) o >+ Co%r

@ranchisin" is a business method of e(pansion that allo)s an

individual or "roup of individuals to mar#et a product or a

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