Case Digest (G.R. No. 211850) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In G.R. No. 211850 (En Banc, September 8, 2020), Zuneca Pharmaceutical, its proprietor Dr. Venus S. Arain, her husband Akram Arain, and Style of Zuneca Pharmaceutical (collectively, Zuneca) challenged the Quezon City RTC’s December 2, 2011 Decision (Civil Case No. Q-07-61561) finding them liable for infringing Natrapharm, Inc.’s registered mark “ZYNAPSE” under Sections 155.1–155.2 of the Intellectual Property Code (R.A. 8293) and awarding the respondent ₱2,200,000 in damages plus injunction and destruction of infringing goods. Natrapharm had registered “ZYNAPSE” for its citicoline product on September 24, 2007 (TMR No. 4-2007-005596). Zuneca, which had imported and marketed carbamazepine under the mark “ZYNAPS” since 2004 (via a BFAD Certificate of Product Registration dated April 15, 2003), argued that its prior use conferred ownership and that Natrapharm’s registration was in bad faith. After the RTC denied Zuneca’s counterclaims, the Court of Appeals affirmed in its October 3 Case Digest (G.R. No. 211850) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Marks
- Petitioners: Zuneca Pharmaceutical, Akram Arain, Venus Arain, M.D., and Style of Zuneca Pharmaceutical—importers and marketers of generic drugs since 1999. Among these is carbamazepine marketed under the brand name “ZYNAPS” (anti-convulsant). Zuneca obtained a Bureau of Food and Drugs (BFAD, now FDA) Certificate of Product Registration (CPR) on April 15, 2003 and began selling in 2004.
- Respondent: Natrapharm, Inc.—domestic manufacturer, marketer, and distributor of pharmaceutical products. It registered citicoline under the mark “ZYNAPSE” with the Intellectual Property Office (IPO) on September 24, 2007 (Certificate No. 4-2007-005596).
- Trial Court Proceedings (RTC Quezon City, Branch 93, Q-07-61561)
- Natrapharm filed for injunction, trademark infringement, damages (₱2M actual, ₱5M exemplary), attorney’s fees (₱300K), and destruction of infringing goods. Sought TRO/prelim injunction.
- Zuneca counterclaimed: asserted prior use of “ZYNAPS” since 2004, alleged Natrapharm’s bad-faith registration, and prayed for cancellation of “ZYNAPSE” registration, injunction, destruction of goods, and damages.
- RTC Decision (Dec 2, 2011): Held Natrapharm as first in good-faith registrant; rendered judgment for Natrapharm—₱1M damages, ₱1M exemplary damages, ₱200K attorney’s fees; enjoined Zuneca from using “ZYNAPS” and ordered disposal/destruction of infringing materials; dismissed Zuneca’s counterclaims.
- Court of Appeals Proceedings (CA-G.R. CV 99787)
- Zuneca appealed denial of counterclaims and imposition of remedies.
- CA Decision (Oct 3, 2013): Affirmed RTC—registration, not prior use, acquires trademark ownership; good faith presumed in IPO registration; Zuneca failed to prove bad faith. CA denied motions for reconsideration on March 19, 2014.
- Supreme Court (En Banc, G.R. No. 211850, Sep 8, 2020)
- Petition for review under Rule 45 with prayer for TRO/prelim injunct ion.
- Central controversy: confusing similarity of “ZYNAPS” and “ZYNAPSE” (admitted by both parties) and the competing theories on trademark ownership (first-to-file vs. first-to-use).
Issues:
- Trademark Ownership Acquisition
- Is ownership acquired exclusively by registration (first-to-file), or can prior use (first-to-use) vest ownership?
- Rights of First Registrant vs. Prior User
- May Natrapharm, as first-to-file registrant, prevent Zuneca’s continued use of the confusingly similar “ZYNAPS”?
- Good Faith in Registration
- Did Natrapharm register “ZYNAPSE” in good faith?
- Trademark Infringement Liability
- Is Zuneca liable for infringement under IP Code Sections 155–157, warranting damages, injunction, and destruction of infringing goods?
- Validity of Counterclaims
- Was the dismissal of Zuneca’s counterclaims for cancellation and other relief correct?
- Section 159.1 (Prior User Exemption)
- Does Section 159.1 exempt a prior user in good faith from infringement liability even after another party’s registration?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)