Levi Strauss v. Vogue Traders
REITERATIONFacts
The Antecedents: In 1972 Levi Strauss & Co. granted petitioner a non-exclusive license to use LEVI'S trademarks in the Philippines, and petitioner obtained Philippine registrations for various LEVI'S marks. Petitioner discovered registrations owned by respondent which it considered confusingly similar and filed two administrative cancellation petitions (Inter Partes Cases Nos. 4216 and 4217) before the Bureau of Patents, Trademarks and Technology Transfer (BPTTT). Petitioner also sought and obtained search warrants from the Regional Trial Court (RTC) for respondent's premises based on probable cause of violation of Article 189 of the Revised Penal Code; the warrants were executed in December 1995 and goods were seized. Criminal charges were filed but later dismissed and the warrants quashed. Procedural History: Respondent filed a civil complaint for damages in the RTC on February 1, 1996, asserting lawful use and registrations of "LIVE'S" trademarks and seeking recovery of seized goods and damages. Petitioner answered with a counterclaim for trademark infringement and sought cancellation of respondent's copyright registration and a preliminary injunction. The RTC, after proceedings and a hearing where respondent failed to appear on December 4, 1996, granted a writ of preliminary injunction on December 10, 1996, and denied respondent's motion for reconsideration on April 11, 1997. Respondent filed a petition for certiorari with the Court of Appeals, which on August 13, 1997 annulled the RTC orders and enjoined further proceedings pending resolution of the BPTTT inter partes cases; the Court of Appeals denied reconsideration by resolution dated March 5, 1998. Petitioner then filed a petition for review on certiorari before the Supreme Court. The Petition: Petitioner assailed the Court of Appeals' application of the doctrine of primary jurisdiction to bar RTC proceedings, challenged the Court of Appeals' treatment of the forum-shopping certification issue, and contended that the RTC did not commit grave abuse of discretion in deeming respondent to have waived presentation of evidence; petitioner sought reversal of the Court of Appeals' decision and an order for the RTC to proceed with Civil Case No. 96-76944.
Issue(s)
Whether the Court of Appeals erred in applying the doctrine of primary jurisdiction to suspend proceedings in Civil Case No. 96-76944 and in holding that the trial court lacked authority to issue preliminary injunctive relief. Whether the Court of Appeals erred in not dismissing respondent's petition for certiorari due to a defective certification against forum-shopping executed by counsel rather than by a corporate officer. Whether the Court of Appeals erred in finding that the trial court committed grave abuse of discretion in declaring respondent to have waived its right to adduce evidence when its counsel failed to appear on December 4, 1996. Whether the preliminary injunction issued by the trial court amounted to a prejudgment of the case.
Ruling
The petition is GRANTED. The Decision of the Court of Appeals dated August 13, 1997 and its Resolution dated March 5, 1998 are REVERSED and SET ASIDE. The Regional Trial Court of Manila, Branch 1 is ORDERED to proceed with the hearing of Civil Case No. 96-76944 with dispatch. Costs were not imposed.
Ratio Decidendi
On Issue 1: The Court held that the doctrine of primary jurisdiction does not automatically preclude ordinary courts from exercising jurisdiction over actions for infringement or unfair competition, or from granting provisional remedies such as injunctions. Applying precedent in Conrad and Company, Inc. v. Court of Appeals and Shangri-La International Hotel Management Ltd. v. Court of Appeals, the Court reiterated that administrative cancellation proceedings before the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) concern the right to registration, whereas infringement and damages actions and injunctive relief fall within the competence of regular courts. The Supreme Court observed that Section 151.2, Section 156 and Section 161 of Republic Act No. 8293 (Intellectual Property Code) explicitly permit courts to determine the right to registration and to grant injunctions and damages, and that the filing of an administrative cancellation does not, per se, constitute a prejudicial question that must be resolved before a court can adjudicate an infringement action. The Court emphasized that the appellate court erred in expanding the doctrine of primary jurisdiction to the point of depriving the RTC of its lawfully conferred jurisdiction, noting that the lower court may, for good cause shown and in its sound discretion, suspend proceedings pending administrative determinations but is not compelled to do so in all cases. Accordingly, the Court concluded that the Court of Appeals committed reversible error in holding that the RTC could not proceed. On Issue 2: The Supreme Court held that the certification against forum-shopping required by Section 5, Rule 7 of the Rules of Civil Procedure must be executed by the plaintiff or petitioner or, in the case of a corporation, by a duly authorized officer or director, not by counsel. Relying on Digital Microwave Corp. v. Court of Appeals, the Court reiterated the rationale that the petitioner or corporate officer has the personal knowledge necessary to certify the absence of other actions or proceedings. The Court found that the Court of Appeals should have dismissed respondent's petition for certiorari because the certification was signed by respondent's counsel, Atty. Soriano, who was not shown to be an authorized corporate officer. The Supreme Court therefore concluded that the Court of Appeals erred in giving due course to the petition despite that defect. However, the dispositive relief in this case turned on the incorrect application of primary jurisdiction by the Court of Appeals, and the Supreme Court proceeded to correct that substantive error by reversing the Court of Appeals' decision. On Issue 3: The Court found that the RTC did not commit grave abuse of discretion in deeming respondent to have waived its right to adduce evidence when its counsel failed to appear at the December 4, 1996 hearing. The record showed that counsel had been present at the November 6, 1996 hearing and the parties were given deadlines and notified in open court; the RTC's minutes recorded that respondent had ten days to file opposition and that the December dates were maintained. The Supreme Court agreed with the RTC that respondent's explanation that its counsel mistakenly believed the hearing was reset to December 11 amounted to negligence and lack of vigilance, which does not vitiate the RTC's exercise of discretion. The Court emphasized that interlocutory applications such as those for preliminary injunctions are decided on a sampling of evidence and that the RTC properly considered the matter submitted when respondent failed to appear. Accordingly, there was no grave abuse warranting reversal on this ground. On Issue 4: The Supreme Court held that the issuance of a writ of preliminary injunction does not, as a matter of law, amount to a prejudgment of the case. The Court reiterated that a preliminary injunction is interlocutory in nature, based on initial or incomplete evidence to preserve the status quo pending final determination on the merits, and that appellate courts should not lightly disturb the trial court's exercise of discretion under Rule 58. The RTC expressly stated that the injunction did not decide the merits and that the parties would still be required to prove their claims at trial; the Supreme Court found this consistent with controlling law. Only when a provisional order effectively grants the main relief and leaves nothing to be tried would it amount to a prejudgment; that was not the case here. Therefore, the Court concluded the preliminary injunction did not prejudge the case and affirmed the RTC's proper characterization of the order as interlocutory.
Main Doctrine
An action for trademark infringement and ancillary remedies in the regular courts may proceed independently and simultaneously with administrative cancellation proceedings before the Bureau of Patents, Trademarks and Technology Transfer; the doctrine of primary jurisdiction does not automatically divest trial courts of authority to hear infringement claims or to issue provisional relief such as preliminary injunctions. Certification against forum-shopping must be executed by the petitioner or, in the case of a corporation, by its duly authorized officer.