Facts:

The case involves Cagayan Valley Enterprises, Inc. (petitioner) represented by its president Rogelio Q. Lim, and La Tondena, Inc. (respondent). The dispute arose from a civil case filed on November 10, 1981, in the Court of First Instance of Isabela, where La Tondena, Inc. sought an injunction and damages against Cagayan Valley Enterprises for using its registered 350 c.c. white flint bottles without permission. La Tondena had registered these bottles with the Philippine Patent Office in 1953, with a renewal on December 4, 1974. The bottles were marked with "La Tondena, Inc." and "Ginebra San Miguel." Cagayan Valley Enterprises filled these bottles with its liquor product labeled "Sonny Boy" for commercial sale, which La Tondena claimed violated Republic Act No. 623, as amended by Republic Act No. 5700.

The trial court initially issued a temporary restraining order against Cagayan on November 16, 1981, followed by a writ of preliminary injunct...

Facts:

Registration and Initial Conduct

• In 1953, La Tondena, Inc. (LTI) registered with the Philippine Patent Office the 350 c.c. white flint bottles used for its gin, popularly known as "Ginebra San Miguel."
• The registration was renewed on December 4, 1974, thereby establishing a legal basis for exclusive rights over the marked bottles.

Commencement of the Legal Dispute

• On November 10, 1981, LTI filed Civil Case No. 2668 in the then Branch I, Court of First Instance of Isabela, seeking an injunction and damages against Cagayan Valley Enterprises, Inc. (Cagayan) for allegedly using the 350 c.c. bottles marked "La Tondena, Inc." and "Ginebra San Miguel" on its own liquor product labeled "Sonny Boy."
• On the same date, LTI filed an ex parte petition for a writ of preliminary injunction to restrain Cagayan, alleging use of the bottles without its written consent in violation of Section 2 of Republic Act No. 623 as amended by Republic Act No. 5700.
• The lower court responded favorably by issuing a temporary restraining order on November 16, 1981, against Cagayan and its officers/employees to halt the use of the marked bottles.

Arguments and Defenses Presented

• Cagayan, in its answer, advanced several defenses including:
• Alleging LTI’s non-compliance with Section 21 of Republic Act No. 166, which required the notice “Registered in the Phil. Pat. Off.” on the bottles, thereby contending that LTI lacked a valid cause of action.
• Asserting that LTI was not entitled to protection under the law because its products (hard liquor) were not among those contemplated under Republic Act No. 623.
• Claiming that no explicit reservation of ownership was made through sales invoices or deposit requirements for the bottles.
• Arguing that as Cagayan used its own labels and trade-mark, there was no infringement of LTI’s goods or products.
• In subsequent pleadings, Cagayan contended that the bottles in its possession were not the registered ones of LTI because they lacked the phrase "property of" as stated in the affidavit accompanying the registration certificate and renewal.

Trial Court Proceedings and Subsequent Appeal

• On December 18, 1981, the trial court issued a writ of preliminary injunction against Cagayan, after the filing of a bond by LTI amounting to P50,000.00.
• After a protracted trial that saw five motions for contempt filed by LTI against Cagayan, the trial court rendered judgment in favor of Cagayan. It held that the complaint did not state a cause of action, declared Cagayan not guilty of contempt, and even awarded damages against LTI.
• Dissatisfied with the trial court’s decision, LTI appealed the judgment to the Court of Appeals.
• On December 5, 1986, the Court of Appeals reversed the trial court’s ruling by:
• Setting aside the previous decision and issuing a permanent injunction restraining Cagayan and its officers from using the disputed bottles.
• Ordering Cagayan to pay nominal damages of P15,000.00, exemplary damages of P50,000.00, attorney’s fees of P10,000.00, as well as the costs of suit.
• Cagayan’s motion for reconsideration, filed on December 23, 1986, was denied on May 5, 1987, leading to the present petition for review on certiorari.

Assignment of Errors in the Petition for Review

• The petition raised several errors, among which were:
• The contention that LTI’s failure to display “Reg. Phil. Pat. Off.” on its bottles should preclude an injunction suit.
• The argument that the omission of the words “property of” in some bottles removed them from the ambit of protection under Republic Act No. 623, as amended.
• The assertion that the mere display of “La Tondena, Inc. and Ginebra San Miguel” should have prompted the defendant to verify the registration status with the Philippine Patent Office.
• The contention that Cagayan could claim good faith in the use of the bottles which bore only “La Tondena, Inc.”
• The alleged erroneous dismissal of five contempt charges and the award of damages against LTI without proof of bad faith.

Issue:

Compliance with Statutory Notice Requirements

• Whether the absence of the words “Reg. Phil. Pat. Off.” on LTI’s bottles precludes the manufacturer from bringing an injunction suit under Republic Act No. 623, as amended.

Sufficiency of the Markings

• Whether the omission of the words “property of” from some of LTI’s bottles renders them non-registered and thereby deprives LTI of its statutory protection.

Infringement and Notice to the Public

• Whether the mere presence of the markings “La Tondena, Inc. and Ginebra San Miguel” provides sufficient public notice of the owner’s exclusive rights, obliging the defendant to verify the registration status.

Good Faith Defense Claim

• Whether Cagayan can successfully claim good faith in its use of the bottles that bear only a part of the registered marks.

Nature and Application of Contempt Proceedings

• Whether the trial court’s dismissal of the five contempt charges was proper, and if the double jeopardy defense is applicable to civil contempt proceedings in this context.

Award of Damages Without Proof of Bad Faith

• Whether the award of nominal, exemplary damages, and attorney’s fees to LTI, despite a lack of demonstrable bad faith by Cagayan, was legally justified.

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Ruling:

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Ratio:

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Doctrine:

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