Case Summary (G.R. No. 233073)
Petitioner and Respondent Positions
Respondent alleged continued use of the words “Big Mak” in petitioner’s stalls and products and refusal to fully pay the judgment debt, prompting a petition for contempt. Petitioner maintained it complied with the injunction by ceasing the standalone use of the mark, instead using its corporate name “L.C. Big Mak Burger, Inc.” and, in many locations, the trade name “Super Mak”; it also asserted attempted payment via sheriff and relied on a final SEC decision upholding its corporate name.
Key Dates and Procedural Milestones
Important procedural dates and events in the record include: August 16, 1990 — preliminary injunction issued by the Infringement Court; September 5, 1994 — RTC decision made the injunction permanent and awarded damages; November 26, 1999 — CA reversed the RTC; August 18, 2004 — Supreme Court reinstated the RTC decision; November 14, 2005 — Writ of Execution issued; May 5, 2008 — respondent filed Petition for Contempt; April 7, 2014 — RTC (Branch 59) dismissed contempt petition and awarded damages to petitioner and Francis Dy; February 2, 2017 — CA reversed and found petitioner guilty of indirect contempt; July 26, 2017 — CA denied petitioner’s motion for reconsideration; Supreme Court review followed.
Procedural History (Concise)
McDonald’s filed Civil Case No. 90-1507 for trademark infringement and unfair competition. The Infringement Court issued a preliminary injunction (Aug. 16, 1990) and later rendered judgment (Sept. 5, 1994) making the injunction permanent and awarding damages. The CA initially reversed, but the Supreme Court reinstated the RTC judgment in G.R. No. 143993 (Aug. 18, 2004). After issuance of the writ of execution, McDonald’s filed a contempt petition (2008) alleging continued use of “Big Mak” and nonpayment. The Contempt Court dismissed the petition and awarded compensatory and exemplary damages to petitioner; the CA reversed and found indirect contempt, imposing a fine and ordering compliance; the Supreme Court then reviewed the CA decision.
Injunction Order: Scope and Terms
The August 16, 1990 injunction (made permanent by final judgment) prohibited petitioner from: (a) using for its fast-food business the name “Big Mak” or any mark/word/device whose colorable imitation would confuse the public into believing petitioner’s goods or services originate from or are affiliated with respondent’s, particularly targeting the mark “BIG MAC”; (b) selling, distributing, advertising, offering for sale, or otherwise disposing of articles purporting to be manufactured by respondent; and (c) directly or indirectly using any mark or doing acts likely to induce belief of connection with respondent’s goods and services within the National Capital Judicial Region. The injunction contained an express geographic limitation.
Contempt Petition: Allegations
Respondent asserted that, despite service of the writ of execution, petitioner continued to use the words “Big Mak” in stalls and products both within and outside Metro Manila and refused to fully pay the damages awarded in the underlying judgment. The contempt proceeding alleged disobedience of the writ and the court’s judgment.
Petitioner’s Defenses in Contempt Proceedings
Petitioner alleged it had tendered payment via the sheriff but respondent refused to accept such payment and demanded direct payment; it contended it had desisted from using the proscribed mark “Big Mak” and had employed its corporate name and “Super Mak” in many stalls; it emphasized the geographic limitation of the injunction (National Capital Judicial Region); and it relied on an earlier, final Securities and Exchange Commission (SEC) decision (Jan. 3, 1994) which had rejected McDonald’s effort to cancel petitioner’s corporate name, finding no confusing similarity and granting priority in right to petitioner’s corporate name.
RTC (Branch 59) Decision on Contempt (2014)
The Contempt Court dismissed the contempt petition for lack of merit. It also awarded damages to petitioner and to Francis Dy: P500,000.00 to L.C. Big Mak Burger, Inc. for reputational injury, P500,000.00 to Francis Dy as moral damages, P100,000.00 exemplary damages, and P100,000.00 for attorneys’ fees; costs were taxed against respondent. The Contempt Court concluded petitioner had not committed indirect contempt.
Court of Appeals Reversal (2017)
The CA reversed the Contempt Court, holding petitioner guilty of indirect contempt. The CA’s findings included that (1) Francis Dy allegedly admitted in a judicial affidavit that the company complied with the court’s order only in 2009 (after the contempt petition was filed), and (2) petitioner’s continued use of its corporate name was, in CA’s view, an infringement of respondent’s mark and therefore a defiance of the injunction.
Issue Presented to the Supreme Court
The sole issue for the Supreme Court’s resolution was whether petitioner was guilty of indirect contempt.
Governing Legal Standard on Indirect Contempt
Section 3, Rule 71 of the Rules of Court defines indirect contempt and prescribes the procedure: after a written charge and opportunity to comment and be heard, a person may be punished for acts including disobedience of or resistance to a lawful writ, process, order, or judgment of a court; any abuse or unlawful interference with court processes; and conduct tending to impede or obstruct the administration of justice. Jurisprudence emphasizes that contempt requires willful disregard or disobedience; intent to defy the court is the gravamen of the offense, and good faith is a relevant defense because contempt must be willful and for an illegitimate purpose.
Supreme Court’s Analysis — Compliance Timing and Evidence
The Supreme Court rejected the CA’s interpretation that Francis Dy’s affidavit admitted belated (2009) compliance. The Court analyzed the affidavit and the photographs dated 2009 and concluded that the photographs’ dates do not establish that compliance commenced only in 2009; rather, the affidavit stated that by early 2009 the stalls and vans reflected “Super Mak” and the corporate name, and the photographs were proof of their state at the time taken. The record contained evidence that changes (e.g., wrappers and bags reflecting the corporate name) had been implemented earlier during trial. Thus, the CA’s inference of deliberate late compliance was unwarranted.
Supreme Court’s Analysis — Corporate Name vs. Proscribed Mark
The Co
...continue readingCase Syllabus (G.R. No. 233073)
Parties, Case Title, and Court of Origin
- Petitioner: L.C. Big Mak Burger, Inc.
- Respondent: McDonald’s Corporation.
- Case before the Supreme Court: G.R. No. 233073, February 14, 2018, Decision penned by Justice Tijam of the First Division.
- The petition is a Petition for Review on Certiorari under Rule 45, assailing the Court of Appeals’ Decision dated February 2, 2017 and Resolution dated July 26, 2017 in CA-G.R. CR No. 36768 (McDonald’s Corporation v. L.C. Big Mak Burger, Inc. and Francis Dy in his capacity as President).
- Lower courts involved: Regional Trial Court (RTC) of Makati City, Branch 137 (Infringement Court) and Branch 59 (Contempt Court); Court of Appeals (CA).
Nature of the Proceedings
- The underlying controversy began as Civil Case No. 90-1507 filed by McDonald’s Corporation for trademark infringement and unfair competition.
- Proceedings relevant to this petition: issuance and making permanent of a preliminary injunction; trial and judgment in the infringement and unfair competition case; appellate review by the Court of Appeals; review by the Supreme Court in G.R. No. 143993; writ of execution; a subsequent petition for contempt (Spec. Pro. No. 08-370) filed by respondent alleging noncompliance with the writ of execution and continued use of the mark “Big Mak”; adjudication of the contempt petition in RTC Branch 59; reversal by the CA; and now review by the Supreme Court under Rule 45.
Factual Antecedents and Chronology
- August 16, 1990: Infringement Court issued a preliminary injunction directing petitioner to refrain from specified acts concerning the mark “Big Mak” and related unfair competition within the National Capital Judicial Region.
- November 11, 1990: (date referenced in the injunction made permanent) — preliminary injunction issued in the infringement case.
- September 5, 1994: Infringement Court decision after trial rendered judgment in favor of McDonald’s Corporation and McGeorge Food Industries Inc. against L.C. Big Mak Burger, Inc., making the preliminary injunction permanent and awarding monetary damages and attorneys’ fees.
- Specific disposition: (1) writ of preliminary injunction made permanent; (2) actual damages P400,000.00, exemplary damages P100,000.00, attorneys’ fees and expenses P100,000.00; (3) dismissal of complaint against several individual defendants and dismissal of counterclaims.
- November 26, 1999: Court of Appeals overturned the Infringement Court’s September 5, 1994 Decision (CA-G.R. CV No. 53722).
- August 18, 2004: Supreme Court reversed the Court of Appeals and reinstated the Infringement Court’s September 5, 1994 Decision in G.R. No. 143993, finding petitioner liable for trademark infringement and unfair competition.
- November 14, 2005: Infringement Court issued a Writ of Execution to implement the September 5, 1994 Decision.
- May 5, 2008: Respondent filed a Petition for Contempt (Spec. Pro. No. 08-370) against petitioner and Francis Dy (in his capacity as President), docketed and raffled to RTC Makati, Branch 59 (Contempt Court). Allegations included continued use of the words “Big Mak” in stalls and products and refusal to fully pay the damages awarded.
- Petitioner’s Answer with Compulsory Counterclaims: denied refusal to settle; alleged issuance/tender of checks via sheriff which respondent refused to accept; asserted injunction proscribed only the use of the mark “Big Mak” and not the corporate name “L.C. Big Mak Burger, Inc.;” claimed it had used the corporate name and had already stopped selling “Big Mak” burgers for several years; asserted changes in some stalls/products to “Super Mak”; noted geographic limitation of preliminary injunction to the National Capital Judicial Region.
- April 7, 2014: RTC Makati Branch 59 Decision dismissed respondent’s petition for contempt for lack of merit and awarded monetary damages and attorneys’ fees in favor of petitioner and Francis Dy:
- Awards: P500,000.00 to L.C. Big Mak Burger, Inc. for damage to business reputation; P500,000.00 to Francis Dy as moral damages; P100,000.00 exemplary damages; P100,000.00 attorney’s fees; costs against respondent.
- February 2, 2017: Court of Appeals reversed the Contempt Court’s decision, found petitioner guilty of indirect contempt, ordered payment of a fine of P30,000.00, and enjoined petitioner to faithfully comply with the Supreme Court’s ruling in G.R. No. 143993 as implemented by RTC Branch 59.
- July 26, 2017: Court of Appeals denied petitioner’s motion for reconsideration; appealed to the Supreme Court.
Specific Injunctive Prohibitions (as Ordered August 16, 1990 and Made Final)
- The injunction, as reiterated and made final by the Supreme Court’s August 18, 2004 Decision, directed petitioner to refrain from:
- using for its fast food restaurant business the name “Big Mak” or any mark, word, name, or device which by colorable imitation is likely to confuse, mislead or deceive the public into believing that petitioner’s goods and services originate from, or are sponsored by or affiliated with, respondent’s, and from unfairly trading on the reputation and goodwill of McDonald’s marks, in particular the mark “BIG MAC”;
- selling, distributing, advertising, offering for sale or procuring to be sold, or otherwise disposing of any article described as or purporting to be manufactured by respondent;
- directly or indirectly using any mark, or doing any act likely to induce belief that petitioner and their products and services are in any way connected with respondent’s and their products and services in places within the jurisdiction of the National Capital Judicial Region.
Trial Court Judgment (September 5, 1994) — Key Dispositions
- Writ of preliminary injunction made permanent.
- Monetary awards against petitioner: actual damages P400,000.00; exemplary damages P100,000.00; attorneys’ fees and expenses P100,000.00.
- Complaint against several individual defendants and counterclaims dismissed for lack of merit and insufficiency of evidence.
Contempt Petition Allegations and Petitioner’s Defenses
- Respondent alleged after service of the Writ of Execution (served Nov. 17, 2005) petitioner continued to use “Big Mak” in stalls and products in and out of Metro Manila, and refused to fully pay the damages awarded.
- Petitioner’s defenses included:
- Denial of refusal to settle; asserted tender of payment by checks to the sheriff which respondent refused to accept, and respondent demanded direct payment.
- Assertion that injunction proscribed only the use of the mark “Big Mak” and did not proscribe use of its corporate name “L.C. Big Mak Burger, Inc.”; petitioner was using its corpora