G.R. No. 91332 July 16, 1993 Registration No.

Registration No. 11147, dated May 28, 1963 and the Third Plaintiff is
a registrant of trademark "LARK" as shown by Certificate of
Registration No. 10953 dated March 23, 1964, in addition to a
PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., AND
pending application for registration of trademark "MARK VII" filed on
FABRIQUES OF TABAC REUNIES, S.A., petitioners 
November 21, 1980 under Application Serial No. 43243, all in the
vs.
Philippine Patent Office. In same the manner, defendant has a
THE COURT OF APPEALS AND FORTUNE TOBACCO
pending application for registration of the trademark "LARK"
CORPORATION, respondents.
cigarettes with the Philippine Patent Office under Application Serial
No. 44008. Defendant contends that since plaintiffs are "not doing
MELO, J.: business in the Philippines" coupled the fact that the Director of
Patents has not denied their pending application for registration of its
trademark "MARK", the grant of a writ of preliminary injunction is
In the petition before us, petitioners Philip Morris, Inc., Benson and
premature. Plaintiffs contend that this act(s) of defendant is but a
Hedges (Canada), Inc., and Fabriques of Tabac Reunies, S.A., are ascribing
subterfuge to give semblance of good faith intended to deceive the
whimsical exercise of the faculty conferred upon magistrates by Section 6,
public and patronizers into buying the products and create the
Rule 58 of the Revised Rules of Court when respondent Court of Appeals
impression that defendant's goods are identical with or come from
lifted the writ of preliminary injunction it earlier had issued against
the same source as plaintiffs' products or that the defendant is a
Fortune Tobacco Corporation, herein private respondent, from
licensee of plaintiffs when in truth and in fact the former is not. But
manufacturing and selling "MARK" cigarettes in the local market.
the fact remains that with its pending application, defendant has
embarked in the manufacturing, selling, distributing and advertising
Banking on the thesis that petitioners' respective symbols "MARK VII", of "MARK" cigarettes. The question of good faith or bad faith on the
"MARK TEN", and "LARK", also for cigarettes, must be protected against part of defendant are matters which are evidentiary in character
unauthorized appropriation, petitioners twice solicited the ancillary writ which have to be proven during the hearing on the merits; hence,
in the course the main suit for infringement but the court of origin was until and unless the Director of Patents has denied defendant's
unpersuaded. application, the Court is of the opinion and so holds that issuance a
writ of preliminary injunction would not lie.
Before we proceed to the generative facts of the case at bar, it must be
emphasized that resolution of the issue on the propriety of lifting the writ There is no question that defendant has been authorized by the
of preliminary injunction should not be construed as a prejudgment of the Bureau of Internal Revenue to manufacture cigarettes bearing the
suit below. Aware of the fact that the discussion we are about to enter trademark "MARK" (Letter of Ruben B. Ancheta, Acting
into involves a mere interlocutory order, a discourse on the aspect Commissioner addressed to Fortune Tobacco Corporation dated April
infringement must thus be avoided. With these caveat, we shall now shift 3, 1981, marked as Annex "A", defendant's "OPPOSITION, etc." dated
our attention to the events which spawned the controversy. September 24, 1982). However, this authority is qualified . . . that the
said brands have been accepted and registered by the Patent Office
not later than six (6) months after you have been manufacturing the
As averred in the initial pleading, Philip Morris, Incorporated is a
cigarettes and placed the same in the market." However, this grant
corporation organized under the laws of the State of Virginia, United
". . . does not give you protection against any person or entity whose
States of America, and does business at 100 Park Avenue, New York, New
rights may be prejudiced by infringement or unfair competition in
York, United States of America. The two other plaintiff foreign
relation to your indicated trademarks/brands". As aforestated, the
corporations, which are wholly-owned subsidiaries of Philip Morris, Inc.,
registration of defendant's application is still pending in the
are similarly not doing business in the Philippines but are suing on an
Philippine Patent Office.
isolated transaction. As registered owners "MARK VII", "MARK TEN", and
"LARK" per certificates of registration issued by the Philippine Patent
Office on April 26, 1973, May 28, 1964, and March 25, 1964, plaintiffs- It has been repeatedly held in this jurisdiction as well as in the United
petitioners asserted that defendant Fortune Tobacco Corporation has no States that the right or title of the applicant for injunction remedy
right to manufacture and sell cigarettes bearing the allegedly identical or must be clear and free from doubt. Because of the disastrous and
confusingly similar trademark "MARK" in contravention of Section 22 of painful effects of an injunction, Courts should be extremely careful,
the Trademark Law, and should, therefore, be precluded during the cautious and conscionable in the exercise of its discretion consistent
pendency of the case from performing the acts complained of via a with justice, equity and fair play.
preliminary injunction (p. 75, Court of Appeals Rollo in AC-G.R. SP No.
13132).
There is no power the exercise of which is more delicate which
requires greater caution, deliberation, and sound discretion, or
For its part, Fortune Tobacco Corporation admitted petitioners' (which is) more dangerous in a doubtful case than the issuing of
certificates of registration with the Philippine Patent Office subject to the an injunction; it is the strong arm of equity that never ought to be
affirmative and special defense on misjoinder of party plaintiffs. Private extended unless to cases of great injury, where courts of law
respondent alleged further that it has been authorized by the Bureau of cannot afford an adequate or commensurate remedy in damages.
Internal Revenue to manufacture and sell cigarettes bearing the The right must be clear, the injury impending or threatened, so as
trademark "MARK", and that "MARK" is a common word which cannot be to be averted only by the protecting preventive process of
exclusively appropriated (p.158, Court of Appeals Rollo in A.C.-G.R. SP No. injunction. (Bonaparte v. Camden, etc. N. Co., 3 F. Cas. No. 1, 617,
13132). On March 28, 1983, petitioners' prayer for preliminary injunction Baldw. 205, 217.)
was denied by the Presiding Judge of Branch 166 of the Regional Trial
Court of the National Capital Judicial Region stationed at Pasig, premised
Courts of equity constantly decline to lay down any rule which
upon the following propositions:
injunction shall be granted or withheld. There is wisdom in this
course, for it is impossible to foresee all exigencies of society
Plaintiffs admit in paragraph 2 of the complaint that ". . . they are  which may require their aid to protect rights and restrain
not doing business in the Philippines and are suing on an isolated wrongs. (Merced M. Go v. Freemont, 7 Gal. 317, 321; 68 Am. Dec.
transaction . . .". This simply means that they are not engaged in the 262.)
sale, manufacture, importation, expor[t]ation and advertisement of
their cigarette products in the Philippines. With this admission,
It is the strong arm of the court; and to render its operation begin
defendant asks: ". . . how could defendant's "MARK" cigarettes cause
and useful, it must be exercised with great discretion, and when
the former "irreparable damage" within the territorial limits of the
necessary requires it. (Attorney-General v. Utica Inc. Co., P. John
Philippines?" Plaintiffs maintain that since their trademarks are
Ch. (N.Y.) 371.)
entitled to protection by treaty obligation under Article 2 of the Paris
Convention of which the Philippines is a member and ratified by
Resolution No. 69 of the Senate of the Philippines and as such, have Having taken a panoramic view of the position[s] of both parties as
the force and effect of law under Section 12, Article XVII of our viewed from their pleadings, the picture reduced to its minimum size
Constitution and since this is an action for a violation or infringement would be this: At the crossroads are the two (2) contending parties,
of a trademark or trade name by defendant, such mere allegation is plaintiffs vigorously asserting the rights granted by law, treaty and
sufficient even in the absence of proof to support it. To the mind of jurisprudence to restrain defendant in its activities of manufacturing,
the Court, precisely, this is the issue in the main case to determine selling, distributing and advertising its "MARK" cigarettes and now
whether or not there has been an invasion of plaintiffs' right of comes defendant who countered and refused to be restrained
property to such trademark or trade name. This claim of plaintiffs is claiming that it has been authorized temporarily by the Bureau of
disputed by defendant in paragraphs 6 and 7 of the Answer; hence, Internal Revenue under certain conditions to do so as aforestated
this cannot be made a basis for the issuance of a writ of preliminary coupled by its pending application for registration of trademark
injunction. "MARK" in the Philippine Patent Office. This circumstance in itself has
created a dispute between the parties which to the mind of the Court
does not warrant the issuance of a writ of preliminary injunction.
There is no dispute that the First Plaintiff is the registered owner of
trademar[k] "MARK VII" with Certificate of Registration No. 18723,
dated April 26,1973 while the Second Plaintiff is likewise the It is well-settled principle that courts of equity will refuse an
registered owner of trademark "MARK TEN" under Certificate of application for the injunctive remedy where the principle of law
 on which the right to preliminary injunction rests is disputed and However, on the strength of supposed changes in the material facts of
will admit of doubt, without a decision of the court of law this case, plaintiffs came up with the present motion citing therein
establishing such principle although satisfied as to what is a the said changes which are: that defendant's application had been
correct conclusion of law upon the facts. The fact, however, that rejected and barred by the Philippine Patents Office, and that said
there is no such dispute or conflict does not in itself constitute a application has been deemed abandoned and forfeited. But defendant
justifiable ground for the court to refuse an application for the has refiled the same.
injunctive relief. (Hackensack Impr. Commn. v. New Jersey
Midland P. Co., 22 N.J. Eg. 94.)
Plaintiffs' arguments in support of the present motion appear to be a
mere rehash of their stand in the first above-mentioned petition
Hence, the status quo existing between the parties prior to the filing which has already been ruled upon adversely against them. Granting
of this case should be maintained. For after all, an injunction, without that the alleged changes in the material facts are sufficient grounds
reference to the parties, should be violent, vicious nor even for a motion seeking a favorable grant of what has already been
vindictive. (pp. 338-341, Rollo in G.R. No. 91332.) denied, this motion just the same cannot prosper.

In the process of denying petitioners' subsequent motion for In the first place there is no proof whatsoever that any of plaintiffs'
reconsideration of the order denying issuance of the requested writ, the products which they seek to protect from any adverse effect of the
court of origin took cognizance of the certification executed on January trademark applied for by defendant, is in actual use and available for
30, 1984 by the Philippine Patent Office attesting to the fact that private commercial purposes anywhere in the Philippines. Secondly as
respondent's application for registration is still pending appropriate shown by plaintiffs' own evidence furnished by no less than the chief
action. Apart from this communication, what prompted the trial court of Trademarks Division of the Philippine Patent Office, Atty. Enrique
judge to entertain the idea of prematurity and untimeliness of petitioners' Madarang, the abandonment of an application is of no moment, for
application for a writ of preliminary injunction was the letter from the the same can always be refiled. He said there is no specific provision
Bureau of Internal Revenue date February 2, 1984 which reads: in the rules prohibiting such refiling (TSN, November 21, 1986, pp. 60
& 64, Raviera). In fact, according to Madarang, the refiled application
of defendant is now pending before the Patents Office. Hence, it
MRS. TERESITA GANDIONGCO OLEDAN
appears that the motion has no leg to stand on. (pp. 350-351, Rolloin
Legal Counsel
G. R. No. 91332.)
Fortune Tobacco Corporation

Confronted with this rebuff, petitioners filed a previous petition

Madam:
for certiorari before the Court, docketed as G.R. No. 78141, but the
petition was referred to the Court of Appeals.
In connection with your letter dated January 25, 1984, reiterating
your query as to whether your label approval automatically expires
The Court of Appeals initially issued a resolution which set aside the
or becomes null and void after six (6) months if the brand is not
court of origin's order dated April 22, 1987, and granted the issuance of a
accepted and by the patent office, please be informed that no
writ of preliminary injunction enjoining Fortune, its agents, employees,
provision in the Tax Code or revenue regulation that requires an
and representatives, from manufacturing, selling, and advertising "MARK"
applicant to comply with the aforementioned condition order that his
cigarettes. The late Justice Cacdac, speaking for the First Division of the
label approved will remain valid and existing.
Court of Appeals in CA-G.R. SP No. 13132, remarked:

Based on the document you presented, it shows that registration of this

There is no dispute that petitioners are the registered owners of the
particular label still pending resolution by the Patent Office. These being
trademarks for cigarettes "MARK VII", "MARK TEN", and "LARK".
so , you may therefore continue with the production said brand of
(Annexes B, C and D, petition). As found and reiterated by the
cigarette until this Office is officially notified that the question of
Philippine Patent Office in two (2) official communications dated
ownership of "MARK" brand is finally resolved.
April 6, 1983 and January 24, 1984, the trademark "MARK" is
"confusingly similar" to the trademarks of petitioners, hence
Very truly yours, registration was barred under Sec. 4 (d) of Rep. Act. No. 166, as
amended (pp. 106, 139, SCA rollo). In a third official communication
dated April 8, 1986, the trademark application of private respondent
TEODORO D. PAREÑ O
for the "MARK" under Serial No. 44008 filed on February 13, 1981
Chief, Manufactured Tobacco
which was declared abandoned as of February 16, 1986, is now
Tax Division
deemed forfeited, there being no revival made pursuant to Rule 98 of
TAN-P6531-D2830-A-6
the Revised Rules of Practitioners in Trademark Cases." (p. 107,
CA rollo). The foregoing documents or communications mentioned by
(p. 348, Rollo.) petitioners as "the changes in material facts which occurred after
March 28, 1983", are not also questioned by respondents.
It appears from the testimony of Atty. Enrique Madarang, Chief of the
Trademark Division of the then Philippine Patent Office that Fortune's Pitted against the petitioners' documentary evidence, respondents
application for its trademark is still pending before said office (p. pointed to (1) the letter dated January 30, 1979 (p. 137, CA rollo) of
311, Rollo). Conrado P. Diaz, then Acting Commissioner of Internal Revenue,
temporarily granting the request of private respondent for a permit
to manufacture two (2) new brands of cigarettes one of which is
Petitioners thereafter cited supervening events which supposedly
brand "MARK" filter-type blend, and (2) the certification dated
transpired since March 28, 1983, when the trial court first declined
September 26, 1986 of Cesar G. Sandico, Director of Patents (p. 138,
issuing a writ of preliminary injunction, that could alter the results of the
CA rollo) issued upon the written request of private respondents'
case in that Fortune's application had been rejected, nay, barred by the
counsel dated September 17, 1986 attesting that the records of his
Philippine Patent Office, and that the application had been forfeited by
office would show that the "trademark MARK" for cigarettes is now
abandonment, but the trial court nonetheless denied the second motion
the subject of a pending application under Serial No. 59872 filed on
for issuance of the injunctive writ on April 22, 1987, thus:
September 16, 1986.

For all the prolixity of their pleadings and testimonial evidence, the
Private respondent's documentary evidence provides the reasons
plaintiffs-movants have fallen far short of the legal requisites that
neutralizing or weakening their probative values. The penultimate
would justify the grant of the writ of preliminary injunction prayed
paragraph of Commissioner Diaz' letter of authority reads:
for. For one, they did not even bother to establish by competent
evidence that the products supposedly affected adversely by
defendant's trademark now subject of an application for registration Please be informed further that the authority herein granted does
with the Philippine Patents Office, are in actual use in the Philippines. not give you protection against any person or entity whose rights
For another, they concentrated their fire on the alleged abandonment may be prejudiced by infringement or unfair competition in
and forfeiture by defendant of said application for registration. relation to your above-named brands/trademark.

The Court cannot help but take note of the fact that in their complaint while Director Sandico's certification contained similar conditions as
plaintiffs included a prayer for issuance preliminary injunction. The follows:
petition was duly heard, and thereafter matter was assiduously
discussed lengthily and resolved against plaintiffs in a 15-page Order
This Certification, however, does not give protection as against
issued by the undersigned's predecessor on March 28, 1983.
any person or entity whose right may be prejudiced by
Plaintiffs' motion for reconsideration was denied in another well-
infringement or unfair competition in relation to the aforesaid
argued 8 page Order issued on April 5, 1984,, and the matter was
trademark nor the right to register if contrary to the provisions of
made to rest.
the Trademark Law, Rep. Act No. 166 as amended and the
Revised Rules of Practice in Trademark Cases.
 The temporary permit to manufacture under the trademark "MARK" Hence, the instant petition casting three aspersions that respondent court
for cigarettes and the acceptance of the second application filed by gravely abused its discretion tantamount to excess of jurisdiction when:
private respondent in the height of their dispute in the main case
were evidently made subject to the outcome of the said main case or
I. . . . it required, contrary to law and jurisprudence, that in order that
Civil Case No. 47374 of the respondent Court. Thus, the Court has not
petitioners may suffer irreparable injury due to the lifting of the
missed to note the absence of a mention in the Sandico letter of
injunction, petitioners should be using actually their registered
September 26, 1986 of any reference to the pendency of the instant
trademarks in commerce in the Philippines;
action filed on August 18, 1982. We believe and hold that petitioners
have shown a prima facie case for the issuance of the writ of
prohibitory injunction for the purposes stated in their complaint and II. . . . it lifted the injunction in violation of section 6 of Rule 58 of the
subsequent motions for the issuance of the prohibitory writ. (Buayan Rules of Court; and
Cattle Co. vs. Quintillan, 125 SCRA 276)
III. . . . after having found that the trial court had committed grave
The requisites for the granting of preliminary injunction are the abuse of discretion and exceeded its jurisdiction for having refused to
existence of the right protected and the facts against which the issue the writ of injunction to restrain private respondent's acts that
injunction is to be directed as violative of said right. (Buayan Cattle are contrary to equity and good conscience, it made a complete about
Co. vs. Quintillan, supra; Ortigas & Co. vs. Ruiz, 148 SCRA 326). It is a face for legally insufficient grounds and authorized the private
writ framed according to the circumstances of the case commanding respondent to continue performing the very same acts that it had
an act which the Court regards as essential to justice and restraining considered contrary to equity and good conscience, thereby ignoring
an act it deems contrary to equity and good conscience (Rosauro vs. not only the mandates of the Trademark Law, the international
Cuneta, 151 SCRA 570). If it is not issued, the defendant may, before commitments of the Philippines, the judicial admission of private
final judgment, do or continue the doing of the act which the plaintiff respondent that it will have no more right to use the trademark
asks the court to restrain, and thus make ineffectual the final "MARK" after the Director of Patents shall have rejected the
judgment rendered afterwards granting the relief sought by the application to register it, and the admonitions of the Supreme Court.
plaintiff (Calo vs. Roldan, 76 Phil. 445). Generally, its grant or denial (pp. 24-25, Petition; pp. 25-26, Rollo.)
rests upon the sound discretion of the Court except on a clear case of
abuse (Belish Investment & Finance Co. vs. State House, 151 SCRA
To sustain a successful prosecution of their suit for infringement,
636). Petitioners' right of exclusivity to their registered trademarks
petitioners, as foreign corporations not engaged in local commerce, rely
being clear and beyond question, the respondent court's denial of the
on section 21-A of the Trademark Law reading as follows:
prohibitive writ constituted excess of jurisdiction and grave abuse
discretion. If the lower court does not grant preliminary injunction,
the appellate court may grant the same. (Service Specialists, Inc. vs. Sec. 21-A. Any foreign corporation or juristic person to which a mark
Sheriff of Manila, 145 SCRA 139). (pp. 165-167, Rollo in G.R. No. or trade-name has been registered or assigned under this act may
91332.) bring an action hereunder for infringement, for unfair competition, or
false designation of origin and false description, whether or not it has
been licensed to do business in the Philippines under Act Numbered
After private respondent Fortune's motion for reconsideration was
Fourteen hundred and fifty-nine, as amended, otherwise known as
rejected, a motion to dissolve the disputed writ of preliminary injunction
the Corporation Law, at the time it brings complaint: Provided, That
with offer to post a counterbond was submitted which was favorably
the country of which the said foreign corporation or juristic person is
acted upon by the Court of Appeals, premised on the filing of a sufficient
a citizen or in which it is domiciled, by treaty, convention or law,
counterbond to answer for whatever perjuicio petitioners may suffer as a
grants a similar privilege to corporate or juristic persons of the
result thereof, to wit:
Philippines. (As inserted by Sec. 7 of Republic Act No. 638.)

The private respondent seeks to dissolve the preliminary injunction

to drive home the point that they are not precluded from initiating a
previously granted by this Court with an offer to file a counterbond. It
cause of action in the Philippines on account of the principal
was pointed out in its supplemental motion that lots of workers
perception that another entity is pirating their symbol without any
employed will be laid off as a consequence of the injunction and that
lawful authority to do so. Judging from a perusal of the aforequoted
the government will stand to lose the amount of specific taxes being
Section 21-A, the conclusion reached by petitioners is certainly
paid by the 
correct for the proposition in support thereof is embedded in the
private respondent. The specific taxes being paid is the sum total of
Philippine legal jurisprudence.
P120,120, 295.98 from January to July 1989.

Indeed, it was stressed in General Garments Corporation vs. Director of

The petitioners argued in their comment that the damages caused by
Patents (41 SCRA 50 [1971]) by then Justice (later Chief Justice)
the infringement of their trademark as well as the goodwill it
Makalintal that:
generates are incapable of pecuniary estimation and monetary
evaluation and not even the counterbond could adequately
compensate for the damages it will incur as a result of the dissolution Parenthetically, it may be stated that the ruling in the Mentholatum
of the bond. In addition, the petitioner further argued that doing case was subsequently derogated when Congress, purposely to
business in the Philippines is not relevant as the injunction pertains "counteract the effects" of said case, enacted Republic Act No. 638,
to an infringement of a trademark right. inserting Section 21-A in the Trademark Law, which allows a foreign
corporation or juristic person to bring an action in Philippine courts
for infringement of a mark or tradename, for unfair competition, or
After a thorough re-examination of the issues involved and the
false designation of origin and false description, "whether or not it
arguments advanced by both parties in the offer to file a counterbond
has been licensed to do business in the Philippines under Act
and the opposition thereto, WE believe that there are sound and
Numbered Fourteen hundred and fifty-nine, as amended, otherwise
cogent reasons for US to grant the dissolution of the writ of
known as the Corporation Law, at the time it brings complaint."
preliminary injunction by the offer of the private respondent to put
up a counterbond to answer for whatever damages the petitioner
may suffer as a consequence of the dissolution of the preliminary Petitioner argues that Section 21-A militates against respondent's
injunction. capacity to maintain a suit for cancellation, since it requires, before a
foreign corporation may bring an action, that its trademark or
tradename has been registered under the Trademark Law. The
The petitioner will not be prejudiced nor stand to suffer irreparably
argument misses the essential point in the said provision, which is
as a consequence of the lifting of the preliminary injunction
that the foreign corporation is allowed thereunder to sue "whether or
considering that they are not actually engaged in the manufacture of
not it has been licensed to do business in the Philippines" pursuant to
the cigarettes with the trademark in question and the filing of the
the Corporation Law (precisely to counteract the effects of the
counterbond will amply answer for such damages.
decision in the Mentholatum case). (at p. 57.)

While the rule is that an offer of a counterbond does not operate to

However, on May, 21, 1984, Section 21-A, the provision under
dissolve an injunction previously granted, nevertheless, it is equally
consideration, was qualified by this Court in La Chemise Lacoste S.A. vs.
true that an injunction could be dissolved only upon good and valid
Fernandez (129 SCRA 373 [1984]), to the effect that a foreign corporation
grounds subject to the sound discretion of the court. As WE have
not doing business in the Philippines may have the right to sue before
maintained the view that there are sound and good reasons to lift the
Philippine Courts, but existing adjective axioms require that qualifying
preliminary injunction, the motion to file a counterbond is granted.
circumstances necessary for the assertion of such right should first be
(pp. 53-54, Rollo in G.R. No. 91332.)
affirmatively pleaded (2 Agbayani Commercial Laws of the Philippines,
1991 Ed., p. 598; 4 Martin, Philippine Commercial Laws, Rev. Ed., 1986, p.
Petitioners, in turn, filed their own motion for re-examination geared 381). Indeed, it is not sufficient for a foreign corporation suing under
towards reimposition of the writ of preliminary injunction but to no avail Section 21-A to simply allege its alien origin. Rather, it must additionally
(p. 55, Rollo in G.R. No. 91332). allege its personality to sue. Relative to this condition precedent, it may
be observed that petitioners were not remiss in averring their personality
to lodge a complaint for infringement (p. 75, Rollo in AC-G.R. SP No.
13132) especially so when they asserted that the main action for A fundamental principle of Philippine Trademark Law is that actual
infringement is anchored on an isolated transaction (p. 75, Rollo in AC- use in commerce in the Philippines is a pre-requisite to the
G.R. SP No. 13132; Atlantic Mutual Ins. Co. vs. Cebu Stevedoring Co., Inc., acquisition of ownership over a trademark or a tradename.
17 SCRA 1037 (1966), 1 Regalado, Remedial Law Compendium, Fifth Rev.
Ed., 1988, p. 103).
xxx xxx xxx

Another point which petitioners considered to be of significant interest,

These provisions have been interpreted in Sterling Products
and which they desire to impress upon us is the protection they enjoy
International, Inc. v. Farbenfabriken Bayer Actiengesellschaft (27 SCRA
under the Paris Convention of 1965 to which the Philippines is a
1214 [1969]) in this way:
signatory. Yet, insofar as this discourse is concerned, there is no necessity
to treat the matter with an extensive response because adherence of the
Philippines to the 1965 international covenant due to pact sunt A rule widely accepted and firmly entrenched because it has
servanda had been acknowledged in La Chemise (supra at page 390). come down through the years is that actual use in commerce or
business is a prerequisite to the acquisition of the right of
ownership over a trademark.
Given these confluence of existing laws amidst the cases involving
trademarks, there can be no disagreement to the guiding principle in
commercial law that foreign corporations not engaged in business in the x x x           x x x          x x x
Philippines may maintain a cause of action for infringement primarily
because of Section 21-A of the Trademark Law when the legal standing to
. . . Adoption alone of a trademark would not give exclusive right
sue is alleged, which petitioners have done in the case at hand.
thereto. Such right grows out of their actual use. Adoption is not
use. One may make advertisements, issue circulars, give out price
In assailing the justification arrived at by respondent court when it lists on certain goods; but these alone would not give exclusive
recalled the writ of preliminary injunction, petitioners are of the right of use. For trademark is a creation of use. The underlying
impression that actual use of their trademarks in Philippine commercial reason for all these is that purchasers have come to understand
dealings is not an indispensable element under Article 2 of the Paris the mark as indicating the origin of the wares. Flowing from this
Convention in that: is the trader's right to protection in the trade he has built up and
the goodwill he has accumulated from use of the trademark. . . .
(2) . . . . no condition as to the possession of a domicile or
establishment in the country where protection is claimed may be In fact, a prior registrant cannot claim exclusive use of the trademark
required of persons entitled to the benefits of the Union for the unless it uses it in commerce.
enjoyment of any industrial property of any industrial property
rights. (p. 28, Petition; p. 29, Rollo in G.R. No. 91332.)
We rule[d] in Pagasa Industrial Corporation v. Court of Appeals (118
SCRA 526 [1982]):
Yet petitioners' perception along this line is nonetheless resolved by
Sections 2 and 2-A of the Trademark Law which speak loudly, about
3. The Trademark law is very clear. It requires actual commercial use
necessity of actual commercial use of the trademark in the local forum:
of the mark prior to its registration. There is no dispute that
respondent corporation was the first registrant, yet it failed to fully
Sec. 2. What are registrable. — Trademarks, tradenames and service substantiate its claim that it used in trade or business in the
marks owned by persons, corporations, partnerships or associations Philippines the subject mark; it did not present proof to invest it with
domiciled in the Philippines and by persons, corporations, exclusive, continuous adoption of the trademark which should consist
partnerships or associations domiciled in any foreign country may be among others, of considerable sales since its first use. The invoices
registered in accordance with the provisions of this Act; Provided, (Exhibits 7, 7-a, and 8-b) submitted by respondent which were dated
That said trademarks, tradenames, or service marks are actually in use way back in 1957 show that the zippers sent to the Philippines were
in commerce and services not less than two months in the to be used as "samples" and "of no commercial value". The evidence
Philippines before the time the applications for registration are filed; for respondent must be clear, definite and free from inconsistencies.
And provided, further, That the country of which the applicant for (Sy Ching v. Gaw Lui, 44 SCRA 148-149) "Samples" are not for sale
registration is a citizen grants by law substantially similar privileges and therefore, the fact of exporting them to the Philippines cannot be
to citizens of the Philippines, and such fact is officially certified, with a considered to be equivalent to the "use" contemplated by the law.
certified true copy of the foreign law translated into the English Respondent did not expect income from such "samples". There were
language, by the government of the foreign country to the no receipts to establish sale, and no proof were presented to show
Government of the Republic of the Philippines. (As amended by R.A. that they were subsequently sold in the Philippines. (Pagasa
No. 865). Industrial Corp. v. Court of Appeals, 118 SCRA 526 [1982]; Emphasis
Supplied)
Sec. 2-A. Ownership of trademarks, tradenames and service marks;
how acquired. — Anyone who lawfully produces or deals in The records show that the petitioner has never conducted any
merchandise of any kind or who engages in any lawful business, or business in the Philippines. It has never promoted its tradename or
who renders any lawful service in commerce, by actual use thereof in trademark in the Philippines. It is unknown to Filipino except the
manufacture or trade, in business,and in the service rendered, may very few who may have noticed it while travelling abroad. It has
appropriate to his exclusive use a trademark, a tradename, or a never paid a single centavo of tax to the Philippine government.
service mark not so appropriated by another, to distinguish his Under the law, it has no right to the remedy it seeks. (at pp. 589-591.)
merchandise, business or service from the merchandise, business or
service of others. The ownership or possession of a trademark,
In other words, petitioners may have the capacity to sue for infringement
tradename, service mark, heretofore or hereafter appropriated, as in
irrespective of lack of business activity in the Philippines on account of
this section provided, shall be recognized and protected in the same
Section 21-A of the Trademark Law but the question whether they have
manner and to the same extent as are other property rights known to
an exclusive right over their symbol as to justify issuance of the
the law. (As amended by R.A. No. 638). (Kabushi Kaisha Isetan vs.
controversial writ will depend on actual use of their trademarks in the
Intermediate Appellate Court, 203 SCRA 583 [1991], at pp. 589-590;
Philippines in line with Sections 2 and 2-A of the same law. It is thus
emphasis supplied.)
incongruous for petitioners to claim that when a foreign corporation not
licensed to do business in Philippines files a complaint for infringement,
Following universal acquiescence and comity, our municipal law on the entity need not be actually using its trademark in commerce in the
trademarks regarding the requirement of actual use in the Philippines Philippines. Such a foreign corporation may have the personality to file a
must subordinate an international agreement inasmuch as the apparent suit for infringement but it may not necessarily be entitled to protection
clash is being decided by a municipal tribunal (Mortensen vs. Peters, due to absence of actual use of the emblem in the local market.
Great Britain, High Court of Judiciary of Scotland, 1906, 8 Sessions 93;
Paras, International Law and World Organization, 1971 Ed., p. 20). Withal,
Going back to the first assigned error, we can not help but notice the
the fact that international law has been made part of the law of the land
manner the ascription was framed which carries with it the implied but
does not by any means imply the primacy of international law over
unwarranted assumption of the existence of petitioners' right to relief. It
national law in the municipal sphere. Under the doctrine of incorporation
must be emphasized that this aspect of exclusive dominion to the
as applied in most countries, rules of international law are given a
trademarks, together with the corollary allegation of irreparable injury,
standing equal, not superior, to national legislative enactments (Salonga
has yet to be established by petitioners by the requisite quantum of
and Yap, Public International Law, Fourth ed., 1974, p. 16).
evidence in civil cases. It cannot be denied that our reluctance to issue a
writ of preliminary injunction is due to judicial deference to the lower
The aforequoted basic provisions of our Trademark Law, according to courts, involved as there is mere interlocutory order (Villarosa vs.
Justice Gutierrez, Jr., in Kabushi Kaisha Isetan vs. Intermediate Appellate Teodoro, Sr., 100 Phil. 25 [1956]). In point of adjective law, the petition
Court (203 SCRA 583 [1991]), have been construed in this manner: has its roots on a remedial measure which is but ancillary to the main
action for infringement still pending factual determination before the
court of origin. It is virtually needless to stress the obvious reality that
critical facts in an infringement case are not before us more so when even that the extent of the preliminary injunction granted is too great, it
Justice Feliciano's opinion observes that "the evidence is scanty" and that must be modified.
petitioners "have yet to submit copies or photographs of their registered
marks as used in cigarettes" while private respondent has not, for its part,
Under the foregoing rule, injunction may be refused, or, if granted, may be
"submitted the actual labels or packaging materials used in selling its
dissolved, on the following instances:
"Mark" cigarettes." Petitioners therefore, may not be permitted to
presume a given state of facts on their so called right to the trademarks
which could be subjected to irreparable injury and in the process, suggest (1) If there is insufficiency of the complaint as shown by the allegations
the fact of infringement. Such a ploy would practically place the cart therein. Refusal or dissolution may be granted in this case with or
ahead of the horse. To our mind, what appears to be the insurmountable without notice to the adverse party.
barrier to petitioners' portrayal of whimsical exercise of discretion by the
Court of Appeals is the well-taken remark of said court that:
(2) If it appears after hearing that although the plaintiff is entitled to
the injunction, the issuance or continuance thereof would cause great
The petitioner[s] will not be prejudiced nor stand to suffer damage to the defendant, while the plaintiff can be fully compensated
irreparably as a consequence of the lifting of the preliminary for such damages as he may suffer. The defendant, in this case, must
injunction considering that they are not actually engaged in the file a bond in an amount fixed by the judge conditioned that he will
manufacture of the cigarettes with the trademark in question and the pay all damages which plaintiff may suffer by the refusal or the
filing of the counterbond will amply answer for such damages. (p. dissolution of the injunction.
54. Rollo in G.R. No. 91332.)
(3) On the other grounds upon affidavits on the part of the defendant
More telling are the allegations of petitioners in their complaint (p. which may be opposed by the plaintiff also affidavits.
319, Rollo G.R. No. 91332) as well as in the very petition filed with this
Court (p. 2, Rollo in G.R. No. 91332) indicating that they are not doing
Modification of the injunction may also be ordered by the court if it
business in the Philippines, for these frank representations are
appears that the extent of the preliminary injunction granted is too
inconsistent and incongruent with any pretense of a right which can
great. (3 Martin, Rules of Court, 1986 ed., p. 99; Francisco, supra, at p.
breached (Article 1431, New Civil Code; Section 4, Rule 129; Section 3,
268.)
Rule 58, Revised Rules of Court). Indeed, to be entitled to an injunctive
writ, petitioner must show that there exists a right to be protected and
that the facts against which injunction is directed are violative of said In view of the explicit representation of petitioners in the complaint that
right (Searth Commodities Corporation vs. Court of Appeals, 207 SCRA they are not engaged in business in the Philippines, it inevitably follows
622 [1992]). It may be added in this connection that albeit petitioners are that no conceivable damage can be suffered by them not to mention the
holders of certificate of registration in the Philippines of their symbols as foremost consideration heretofore discussed on the absence of their
admitted by private respondent, the fact of exclusive ownership cannot "right" to be protected. At any rate, and assuming in gratia argumenti that
be made to rest solely on these documents since dominion over respondent court erroneously lifted the writ it previously issued, the
trademarks is not acquired by the mere fact of registration alone and same may be cured by appeal and not in the form of a petition
does not perfect a trademark right (Unno Commercial Enterprises, Inc. vs. for certiorari (Clark vs. Philippine Ready Mix Concrete Co., 88 Phil. 460
General Milling Corporation, 120 SCRA 804 [1983]). [1951]). Verily, and mindful of the rule that a writ of preliminary
injunction is an interlocutory order which is always under the control of
the court before final judgment, petitioners' criticism must fall flat on the
Even if we disregard the candid statements of petitioners anent the
ground, so to speak, more so when extinction of the previously issued
absence of business activity here and rely on the remaining statements of
writ can even be made without previous notice to the adverse party and
the complaint below, still, when these averments are juxtaposed with the
without a hearing (Caluya vs. Ramos, 79 Phil. 640 [1974]; 3 Moran, Rules
denials and propositions of the answer submitted by private respondent,
of Court, 1970 ed., p. 81).
the supposed right of petitioners to the symbol have thereby been
controverted. This is not to say, however, that the manner the complaint
was traversed by the answer is sufficient to tilt the scales of justice in WHEREFORE, the petition is hereby DISMISSED and the Resolutions of
favor of private respondent. Far from it. What we are simply conveying is the Court of Appeals dated September 14, 1989 and November 29, 1989
another basic tenet in remedial law that before injunctive relief may are hereby AFFIRMED.
properly issue, complainant's right or title must be undisputed and
demonstrated on the strength of one's own title to such a degree as to
SO ORDERED.
unquestionably exclude dark clouds of doubt, rather than on the
weakness of the adversary's evidence, inasmuch as the possibility of
irreparable damage, without prior proof of transgression of an actual
existing right, is no ground for injunction being mere damnum absque
injuria (Talisay-Silay Milling Co., Inc. vs. CFI of Negros Occidental, 42
SCRA 577 [1971]; Francisco, Rules of Court, Second ed., 1985, p. 225; 3
Martin, Rules of Court, 1986 ed., p. 82).

On the economic repercussion of this case, we are extremely bothered by

the thought of having to participate in throwing into the streets Filipino
workers engaged in the manufacture and sale of private respondent's
"MARK" cigarettes who might be retrenched and forced to join the ranks
of the many unemployed and unproductive as a result of the issuance of a
simple writ of preliminary injunction and this, during the pendency of the
case before the trial court, not to mention the diminution of tax revenues
represented to be close to a quarter million pesos annually. On the other
hand, if the status quo is maintained, there will be no damage that would
be suffered by petitioners inasmuch as they are not doing business in the
Philippines.

With reference to the second and third issues raised by petitioners on the
lifting of the writ of preliminary injunction, it cannot be gainsaid that
respondent court acted well within its prerogatives under Section 6, Rule
58 of the Revised Rules of Court:

Sec. 6. Grounds for objection to, or for motion of dissolution of

injunction. — The injunction may be refused or, if granted ex parte,
may be dissolved, upon the insufficiency of the complaint as shown
by the complaint itself, with or without notice to the adverse party. It
may also be refused or dissolved on other grounds upon affidavits on
the part of the defendants which may be opposed by the plaintiff also
by affidavits. It may further be refused or, if granted, may be
dissolved, if it appears after hearing that although the plaintiff is
entitled to the injunction, the issuance or continuance thereof, as the
case may be, would cause great damage to the defendant while the
plaintiff can be fully compensated for such damages as he may suffer,
and the defendant files a bond in an amount fixed by the judge
conditioned that he will pay all damages which the plaintiff may
suffer by the refusal or the dissolution of the injunction. If it appears