G.R. No. 78413 - Cagayan Valley Enterprises, Inc. vs. Court of Appeals

In 1953, La Tondena, Inc. (LTI) registered with the Philippine Patent Office the 350 c.c. white flint bottles used for its “Ginebra San Miguel” under Republic Act No. 623; registration was renewed on December 4, 1974.
Registration requirements under RA 623: bottles must bear the manufacturer’s name or product name stamped or marked; submission of two signed photographs; no specific label or drawing required.

On November 10, 1981, LTI sued Cagayan Valley Enterprises, Inc. (Cagayan) in the CFI of Isabela for using LTI’s registered bottles stamped “La Tondena, Inc.” and “Ginebra San Miguel” to sell its “Sonny Boy” liquor without consent, praying for injunction and damages; an ex parte petition for a temporary restraining order (TRO) was also filed.
On November 16, 1981, the trial court issued a TRO; on December 18, 1981, upon LTI’s posting of a ₱50,000 bond, it issued a writ of preliminary injunction against Cagayan.

Cagayan’s defenses included: LTI’s failure to display “Registered in the Phil. Patent Office” per RA 166, inapplicability of RA 623 to hard liquor, no reservation or bottle deposit by LTI, and use of its own trademarked labels.
After a protracted trial with multiple contempt motions, the trial court held that LTI’s complaint failed to state a cause of action, acquitted Cagayan of contempt, and awarded damages to Cagayan.

On December 5, 1986, the CA reversed the trial court, made the preliminary injunction permanent, enjoined Cagayan from using LTI’s bottles, and awarded LTI nominal (₱15,000) and exemplary (₱50,000) damages, attorney’s fees (₱10,000), and costs.
On May 5, 1987, the CA denied Cagayan’s motion for reconsideration.

Cagayan elevated the case to the Supreme Court, assigning six errors concerning: scope of RA 623, omission of “property of,” notice requirements, good faith reliance, contempt proceedings, and the award of damages.

Whether RA 623’s protection extends to bottles used for hard liquor such as gin.

Whether omission of the words “property of” or failure to display “Reg. Phil. Pat. Off.” invalidates LTI’s registration or bars LTI’s injunctive suit.

Whether bottles stamped only “La Tondena, Inc.” and “Ginebra San Miguel” suffice as constructive notice.
Whether Cagayan can claim good faith in reusing LTI’s registered bottles.

Whether LTI may recover civil damages and attorney’s fees under RA 623, RA 166 or Civil Code Article 20 despite any marking deficiencies.
Whether exemplary damages and attorney’s fees require proof of bad faith.

Whether contempt for violating the injunction constitutes civil or criminal contempt and whether double jeopardy applies.

Whether Cagayan Valley Enterprises is a separate entity from the former Cagayan Valley Distillery or its alter ego, binding it to prior admissions regarding the bottles’ registration.