Facts:
The respondents Fitrite, Inc. and
its sister company, Victoria Biscuit Co., Inc. are domestic corporations
engaged in the business of manufacturing, selling and distributing biscuits and
cookies. Their products bear the trademark "SUNSHINE" in the
Philippines which was awarded by the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT) listing Fitrite as principal registrant.
Since May 20, 1983 when Fitrite was
issued the Certificate of Registration for its trademark to the filing of its
complaint against Conrad Company Inc., Fitrite and Victoria Biscuit have been
manufacturing, selling and distributing on a massive scale biscuits and cookies
bearing the "Sunshine" trademark making it popular in Metro Manila
and in the provinces.
On May 30, 1990, Conrad's own Import Manager and Executive Assistant, Raul
Olaya, executed an affidavit stating that Conrad had also been importing,
selling and distributing biscuits and cookies, and other items bearing the same
trademark as Fitrite and Victoria's. It was traced by the mentioned domestic
corporations that on April 18, 1988, Conrad was designated as an exclusive
importer and dealer of the products of "Sunshine Biscuits, Inc." for
sale in the Philippine market.
A few days later, Conrad started its first
importation and continuously did so. Through their counsel, Fitrite and
Victoria addressed a letter to Conrad demanding that it cease and desist from
continuing its operation and use of the subject trademark, but was ignored.
This led Fitrite and Victoria to file a complaint against Conrad for
infringement and unfair competition. Conrad sought to dismiss the complaint by
invoking litis pendentia, the
doctrine of primary jurisdiction, and failure to state a cause of action.
Conrad argued that it has been granted distributorship by Sunshine Biscuits USA
over the Philippine territory, and so, it follows that the basis of Fitrite and
Victoria's claim is lodged under the exclusive jurisdiction of the BPTTT. The
trial court found merit on the motion to dismiss the complaint.
Fitrite and Victoria filed a motion for reconsideration, but was denied
by the lower court. The Court of Appeals, however, found merit on their claims
and reinstated the complaint. Hence, this petition by Conrad praying that the
Civil Case for "Injunction with Damages with Prayer for Preliminary
Injunction" based on infringement and unfair competition filed by Fitrite
and Victoria be dismissed.
Issue: Whether or not Fitrite and
Victoria’s civil action against Conrad which was based on infringement and
unfair competition be dismissed because of the doctrine of litis pendentia.
Held: No, the petition is without merit.
An
application for administrative cancellation of a registered trademark on any of
the grounds enumerated in Section 17 of R.A. No. 166 or the Trade-Mark Law, as
amended, falls under the exclusive jurisdiction of BPTTT. But, for infringement
or unfair competition, as well as the remedy of injunction and relief for
damages, it is explicitly and unquestionably within the competence and
jurisdiction of ordinary courts. As held in an earlier decision by the Supreme
Court, that the registration in the Principal Register gives rise to a
presumption of validity of the registration and of the registrant's ownership
and right to the exclusive use of the mark. Such registration can serve as the
basis for an action of infringement which entitles the registrant whose right
was invaded for court protection and relief.
Section
23 and Section 27 of Chapter V, of the Trade-Mark Law provides:
Sec.
23. Actions, and damages and injunction for infringement. — Any person entitled
to the exclusive use of a registered mark or trade-name may recover damages in
a civil action from any person who infringes his rights, and the measure of the
damages suffered shall be either the reasonable profit which the complaining
party would have made, had the defendant not infringe his said rights, or the
profit which the defendant actually made out of the infringement, or in the
event such measure of damages cannot be readily ascertained with reasonable
certainty, then the court may award as damages a reasonable percentage based
upon the amount of gross sales of the defendant or the value of the services in
connection with which the mark or trade-name was used in the infringement of
the rights of the complaining party. In cases where actual intent to mislead
the public or to defraud the complaining party shall be shown, in the
discretion of the court, the damages may be doubled.
The
complaining party, upon proper showing, may also be granted injunction.
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