246 Corp. v. Daway
MODIFICATIONFacts
The Antecedents: Respondents Montres Rolex S.A. and Rolex Centre Phil., Limited, owners of the "Rolex" trademark, filed a suit for trademark infringement and damages against petitioner 246 Corporation, doing business as "Rolex Music Lounge." Respondents alleged that petitioner adopted and used the mark "Rolex" without authority in its entertainment business since July 1996. Procedural History: Petitioner, in its answer, raised affirmative defenses, arguing no trademark infringement due to unrelated goods/services and questioning the complaint's verification and counsel's authority. Petitioner moved for a preliminary hearing on its affirmative defenses and sought a subpoena ad testificandum against respondents' counsel, Atty. Alonzo Ancheta. The trial court quashed the subpoena and denied the motion for preliminary hearing with motion to dismiss. Petitioner's motion for reconsideration was denied. Petitioner then filed a petition for certiorari with the Court of Appeals, alleging grave abuse of discretion by the trial court. The Court of Appeals dismissed the petition, and a subsequent motion for reconsideration was denied. The Petition: Petitioner seeks review of the Court of Appeals' decision, arguing that the appellate court erred in upholding the trial court's denial of its motion for preliminary hearing and motion to dismiss, and in affirming the quashal of the subpoena, contending these actions constituted grave abuse of discretion.
Issue(s)
Whether the trial court gravely abused its discretion in denying petitioner's motion for preliminary hearing on its affirmative defenses and its motion to dismiss. Whether the trial court gravely abused its discretion in quashing the subpoena ad testificandum issued against Atty. Alonzo Ancheta.
Ruling
The petition is denied. The November 28, 2002 Decision and the February 13, 2003 Resolution of the Court of Appeals are affirmed.
Ratio Decidendi
On the denial of the motion for preliminary hearing and motion to dismiss: The Supreme Court held that the trial court's order denying the motion for preliminary hearing on affirmative defenses also effectively denied the motion to dismiss. The Court found that the trial court ruled on the merits of the motion to dismiss by considering the respondents' Comment and Opposition, which traversed the affirmative defenses. The Court reiterated that a preliminary hearing on affirmative defenses is not a matter of right but is discretionary on the part of the trial court, as provided for in Rule 16, Section 6 of the 1997 Rules of Civil Procedure. The issue of whether a trademark infringement exists, particularly concerning unrelated goods and services and the application of Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293), involves factual determinations that are best resolved in a full-blown trial, not at a preliminary stage. Therefore, the trial court did not commit grave abuse of discretion in denying the motion for preliminary hearing and the motion to dismiss, as these required factual determination. On the quashal of the subpoena ad testificandum: The Supreme Court affirmed the trial court's quashal of the subpoena issued against Atty. Alonzo Ancheta. The Court reasoned that since the motion for preliminary hearing and motion to dismiss were correctly denied, and the issues raised required further factual determination during trial, the testimony of Atty. Ancheta regarding the verification and certification against forum shopping was not essential at that juncture. The Court emphasized that the issue of whether Atty. Ancheta was properly authorized to sign the verification and certification could also be resolved during the trial. Consequently, there was no abuse of discretion in quashing the subpoena, as compelling the witness to testify would not have resolved the substantive issues at that stage of the proceedings.
Main Doctrine
The determination of whether a trademark infringement exists, especially when involving unrelated goods or services and the application of Section 123.1(f) of the Intellectual Property Code, requires a full-blown hearing to resolve factual issues, and a trial court's denial of a motion to dismiss or a preliminary hearing on affirmative defenses, when based on sound discretion and not tainted by grave abuse, will be upheld. Similarly, the quashing of a subpoena ad testificandum is proper when the testimony sought is not essential to resolve the issues at that stage.