G.R. No. 87913 - Olalia vs. Hizon

Two sisters-in-law engaged in the meat business became embroiled in a conflict over their respective trade names.
One operated under the name "PAMPANGA'S BEST" while the other used "PAMPANGA'S PRIDE" in marketing similar meat products such as tocino, longaniza, chicharon, and corned beef.

On September 19, 1988, Lolita O. Hizon (private respondent) filed a complaint for unfair competition with damages and a prayer for preliminary injunction against Leonor A. Olalia (petitioner).
Hizon alleged that she had been using the business name "PAMPANGA'S BEST" since 1974, contending that the use of the similar "PAMPANGA'S PRIDE" by the petitioner impugned her longstanding goodwill.

After issuing an initial temporary restraining order (TRO), Judge Eli G. C. Natividad of the Regional Trial Court in Pampanga extended said TRO twice and, following several hearings, granted a preliminary injunction on November 28, 1988.
Key elements of the trial court order included:

A finding that the defendants had used a tradename/trademark similar to that of the plaintiff.
A requirement that the defendants desist from using promotional paraphernalia identified with "PAMPANGA'S PRIDE TOCINO, LONGANIZA, CHITCHARON AND CORNED BEEF."

The trial court’s decision was notably based on the plaintiff’s allegations, the evidence presented during hearings, and the filing of a P50,000.00 bond by the plaintiff.

The petitioner, Leonor A. Olalia, did not file a motion for reconsideration but directly pursued certiorari in the Court of Appeals, contending that the preliminary injunction was improperly issued.
The Court of Appeals issued a temporary restraining order and then a preliminary injunction and eventually denied the petition for certiorari on the ground that no grave abuse of discretion had been committed by the trial court.
The appellate decision was premised on:

The argument that any errors committed by the trial judge were within the realm of judgment errors not amounting to a lack of jurisdiction.
The trial judge was deemed to have acted on the evidence presented (including testimony regarding the similarity of the trade names) without arbitrariness.

The petition detailed further points regarding the issue of alleged trademark infringement and unfair competition:

It was argued by the petitioner that the elements necessary to prove trademark infringement and unfair competition were absent.
The private respondent was criticized for coming to court with “unclean hands” by allegedly adapting her billboards to mimic the petitioner’s professionally designed ones.

A significant contention was the absence of irreparable injury to the private respondent, highlighted by the evidence that her sales had increased during the period in question.
The petition also took issue with procedural missteps, noting that the petitioner should have filed a motion for reconsideration before resorting to certiorari.
The trial judge’s extension of the temporary restraining order beyond the 20-day limit prescribed by BP Blg. 224 was also criticized, warranting a reprimand.

Whether the trial court correctly issued a preliminary injunction based primarily on:

Whether the private respondent had sufficiently demonstrated that she would suffer irreparable injury absent the injunction.
Consideration of the fact that the respondent admitted increased sales during the period in question.

Whether the trial court’s issuance of the preliminary injunction constituted a grave abuse of discretion amounting to a lack of jurisdiction.
Whether the appellants’ objections regarding the trial court’s findings on "confusing similarities" and the alleged “unclean hands” of the private respondent were properly or improperly considered at this stage.

Whether the petitioners should have first filed a motion for reconsideration prior to filing a petition for certiorari.
The implications of the trial judge’s extension of the temporary restraining order beyond the allowed period under BP Blg. 224.