Case Summary (G.R. No. 116511)
Trial Court Proceedings and Orders
Respondents commenced suit on November 26, 1998, alleging petitioner’s unauthorized adoption of “Rolex” in its entertainment business name and advertising, thereby infringing their registered marks. Petitioner answered, raising as special defenses lack of cause of action (goods and services unrelated), absence of confusion, and improper verification (counsel lacked authority). Petitioner moved for a preliminary hearing on its affirmative defenses and subpoenaed Atty. Alonzo Ancheta to testify on authorization. On October 27, 2000, the trial court granted the motion to quash the subpoena and denied the motion for preliminary hearing on defenses and the motion to dismiss. A motion for reconsideration was likewise denied on March 16, 2001.
Court of Appeals’ Disposition
Petitioner filed a petition for certiorari before the Court of Appeals, alleging grave abuse of discretion in the two trial court orders. On November 28, 2002, the CA dismissed the petition, finding no abuse of discretion either in denying the preliminary hearing and motion to dismiss or in quashing the subpoena. A subsequent motion for reconsideration was denied on February 13, 2003.
Issues for Supreme Court Review
- Whether the October 27, 2000 order denied only the motion for preliminary hearing or also the motion to dismiss for lack of cause of action.
- If both motions were denied, whether the trial court gravely abused its discretion.
- Whether quashing the subpoena ad testificandum against Atty. Ancheta constituted grave abuse of discretion.
Denial of Motion to Dismiss and Motion for Preliminary Hearing
The dispositive portion of the order clearly adjudicated both the motion to quash and the combined motion for preliminary hearing with motion to dismiss “the instant complaint based on said affirmative defenses.” Under the old Rule 16, Sec. 5, and the current Rule 16, Sec. 6, a preliminary hearing on affirmative defenses is discretionary, not mandatory. There was no qualification or abeyance in the trial court’s ruling, and the presumption that the court acted properly remains unrebutted.
Trademark Infringement Standard and Section 123.1(f)
Determination of trademark infringement, particularly likelihood of confusion, is a question of fact ripe for trial. Under the pre-1998 Trademark Law, use of identical marks on wholly unrelated goods precluded infringement. However, Republic Act No. 8293, Sec. 123.1(f), extends protection of well-known marks to unrelated goods or services when use creates a perceived connection and is likely to damage the owner’s interests. Assessment of these requisites requires full evidentiary hearing, not a preliminary proceeding.
Subpoe
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Facts
- In July 1996, petitioner 246 Corporation adopted and used the mark “Rolex” in its business name “Rolex Music Lounge” and in advertisements as “Rolex Music Lounge, KTV, Disco & Party Club,” without authorization.
- On November 26, 1998, respondents Montres Rolex S.A. and Rolex Centre Phil., Limited, owners of the registered “Rolex” mark, sued petitioner for trademark infringement and damages, praying for a restraining order or writ of preliminary injunction.
- Petitioner filed an answer raising special affirmative defenses:
- No trademark infringement since petitioner’s entertainment services are unrelated to respondents’ goods (watches, clocks, bracelets, and parts).
- Lack of cause of action.
- The complaint was improperly verified and certified against forum shopping because respondents’ counsel, Atty. Alonzo Ancheta, lacked authority to represent them.
Trial Court Proceedings
- July 21, 2000: Petitioner moved for a preliminary hearing on its affirmative defenses and to dismiss the complaint.
- The RTC issued a subpoena ad testificandum requiring Atty. Ancheta to attend the preliminary hearing.
- Respondents filed a comment and opposition to the preliminary hearing motion and moved to quash the subpoena.
- October 27, 2000: The RTC granted the motion to quash the subpoena and denied both the motion for preliminary hearing on affirmative defenses and the motion to dismiss the complaint on those defenses.
- March 16, 2001: The RTC denied petitioner’s motion for reconsideration of the October 27, 2000 order.
Court of Appeals Proceedings
- Petitioner elevated the matter to the Court of Appeals via a petition for certiorari under Rule 45, alleging grave abuse of discretion by the RTC in denying its motions and quashing the subpo