G.R. No. 48183 - People vs. Schneckenburger

Respondent Natrapharm, Inc. is an all-Filipino pharmaceutical company that manufactures and sells a medicine bearing the generic name “CITICOLINE” marketed under the registered trademark “ZYNAPSE.”
Petitioners, doing business as Zuneca Pharmaceutical (represented by Akram Arain and/or Venus Arain, M.D.), have been selling a medicine imported from Lahore, Pakistan, bearing the generic name “CARBAMAZEPINE” and marketed under the brand name “ZYNAPS.”

Natrapharm’s “ZYNAPSE” is a registered trademark with the Intellectual Property Office (IPO) as of September 24, 2007, which secures exclusive rights for a period of 10 years. Furthermore, respondent obtained all necessary permits and licenses from the Bureau of Food and Drugs (BFAD) to register, list, and sell its product in various forms and dosages.
Petitioners claim prior use of the brand name “ZYNAPS” since 2003, backed by their Certificate of Product Registration (CPR) issued by the BFAD on April 15, 2003, despite the fact that “ZYNAPS” is not a trademark registered with the IPO.

Respondent alleges that the mark “ZYNAPS” is nearly identical in sound and appearance to its registered “ZYNAPSE,” making the two easily confusable by consumers.
It is further contended that selling “ZYNAPS” (CARBAMAZEPINE)—a drug known to have a documented serious, disfiguring side-effect called “Stevens-Johnson Syndrome”—alongside “ZYNAPSE” (CITICOLINE) in the same drugstores may lead to medicine switching, thereby endangering patients.

On October 30, 2007, respondent sent a cease-and-desist letter demanding that petitioners stop using “ZYNAPS” due to the confusing similarity with “ZYNAPSE” and the potential risk to patients.
Petitioners refused to comply, asserting their right to prior use based on their BFAD-issued CPR.
On November 29, 2007, respondent filed a trademark infringement complaint under Republic Act No. 8293 (the Intellectual Property Code) with a prayer for a temporary restraining order (TRO) and/or a writ of preliminary injunction, relying on provisions that confer exclusive rights to a registered trademark.

The Regional Trial Court (RTC) initially denied respondent’s application for a TRO on December 21, 2007, reasoning that even if the mark had been registered, petitioners’ prior use defeated respondent’s claim.
On March 12, 2008, the RTC again denied the application for a writ of preliminary injunction, emphasizing that petitioners’ Certificate of Product Registration evidenced prior use and that Section 159 of the IPC limited the rights of the trademark registrant against prior users.
The Court of Appeals (CA) later denied the application for TRO/preliminary injunction on June 17, 2008, and the motion for reconsideration was similarly dismissed on July 31, 2008.

In an April 18, 2011 Decision, the CA reversed its previous resolutions by granting a permanent injunction, enjoining petitioners (and related persons) from manufacturing, distributing, selling, or advertising any drug under “ZYNAPS” or any similar mark.
Petitioners’ motion for reconsideration of the CA’s decision was denied in a July 21, 2011 Resolution.
On December 2, 2011, the RTC rendered a decision on the merits, finding petitioners liable for trademark infringement, awarding damages, and ordering that all infringing materials and products be disposed of outside the channels of commerce or destroyed.
Following the RTC’s decision, respondent moved to dismiss the present petition as moot and academic, while petitioners contended that the decision had not yet attained finality.

Whether the issuance of a decision on the merits by the RTC on December 2, 2011, which granted a permanent injunction and rendered damages, has rendered the issues in the petition moot and academic.

Whether the Court of Appeals properly ordered a permanent injunction in resolving a petition for certiorari that questioned the RTC’s earlier denial of collateral relief (i.e., the application for a preliminary injunction).