G.R. No. 128938 - Soriano vs. Court of Appeals

Case Summary (G.R. No. 128938)

Factual Background

Ong imported vermicelli from China National Cereals Oils and Foodstuffs Import and Export Corporation and repacked the product in a cellophane wrapper bearing a two-dragon design and the TOWER trademark. He obtained a Certificate of Copyright Registration from the National Library on June 9, 1993 for that design. Tan repacked vermicelli obtained from the same Chinese supplier but from a Qingdao branch in a wrapper that Ong alleged was nearly identical. Ong discovered the similarity and asserted infringement.

Trial Court Proceedings

On September 16, 1993, Ong filed a verified complaint for infringement of copyright with damages and sought a temporary restraining order and a writ of preliminary injunction. The trial court issued a temporary restraining order the same day and subsequently issued a writ of preliminary injunction on October 13, 1993 after Ong posted a P100,000.00 bond. Tan filed an opposition and counter-application and later a motion to dissolve the writ, which the trial court denied on December 15, 1993; the court denied the motion for reconsideration on March 1, 1994.

Proceedings in the Court of Appeals

Tan elevated the matter to the Court of Appeals by a special civil action for certiorari under Rule 65, Rules of Court, seeking to set aside the RTC orders and for injunctive relief against Ong. The Court of Appeals rendered a decision on August 8, 1994 setting aside the trial court order as issued with grave abuse of discretion. By resolution dated January 3, 1995 the Court of Appeals modified its language, ordered that a writ of preliminary injunction be issued enjoining respondents from enforcing the RTC writ upon Tan's posting of a P200,000.00 bond, and directed further proceedings. On August 27, 1997 the Court of Appeals promulgated a decision setting aside the RTC resolutions of October 13 and December 15, 1993 and the RTC order of March 1, 1994 and made its injunction permanent.

Issues Presented

The principal issues presented were whether the issuance of the writ of preliminary injunction by the trial court in favor of Ong was proper and whether the Court of Appeals committed grave abuse of discretion when it set aside the trial court order and issued findings that touched on the merits of the infringement claim.

Parties' Contentions

Ong contended that his Certificate of Copyright Registration justified issuance of a preliminary injunction under P.D. No. 49, that he was the original creator entitled to protection, and that Tan had no registered copyright and relied only on his principal's foreign trademark registrations. Tan contended that the PAGODA and LUNGKOW trademarks and the label were originally adopted and registered in the name of Ceroilfood Shandong in China and in many other countries, that Tan was the exclusive Philippine distributor and authorized user, and that Ong merely copied the design; Tan submitted copies of foreign certificates to raise doubt as to Ong's originality and ownership.

Standards for Preliminary Injunction and Copyright Ownership

The Court reiterated that to be entitled to copyright protection a person must be the original creator of the work created by his own skill, labor and judgment without directly copying another. The grant of a preliminary injunction rests on the sound discretion of the court and must be exercised with extreme caution. The requisites include a clear and unmistakable right and urgent necessity to prevent serious damage. Under P.D. No. 49, prints, pictorials, illustrations, labels, tags, and box wraps are protected and an infringer may be enjoined; the Court cited Chapter I, Sec. 2 and Chapter II, Article VI, Sec. 28 of P.D. No. 49 and relevant authorities, including Hoffman v. Le Traunik, Bataclan v. CA, and other precedents addressing the standard for injunctive relief.

Supreme Court Analysis

The Supreme Court found that copies of certificates of copyright registration presented in the name of Ceroilfood Shandong raised reasonable doubt about Ong's exclusive right and originality. Given that doubt, the issuance of a preliminary injunction in Ong's favor was unwarranted. The Court also held that the Court of Appeals did not commit grave abuse of discretion in ordering that the RTC writ not be enforced; an order in a certiorari proceeding under Rule 65 enjoining enforcement of a writ effectively sets aside the RTC order for grave abuse. However, the Supreme Court concluded that the Court of Appeals exceeded the proper scope of a certiorari proceeding when it declared, on the merits, that Ong's wrapper was a copy of Ceroilfood Shandong's wrapper. That determination touched the merits of the infringement claim and was premature because the substantive infringement case remained for trial.

Ruling and Disposition

The Supreme Court partly granted the petition. It denied Ong's prayer for a writ of preliminary injunction to prohibit Tan from using the two-dragon cellophane wrapper. The Court set aside the Court of Appeals' finding that Ong's copyrighted wrapper was a copy of Ceroilfood Shandong's wrapper as

Case Syllabus (G.R. No. 128938)

Parties and Procedural Posture

Wilson Ong Ching Kian Chuan filed a verified complaint for infringement of copyright with damages and a prayer for temporary restraining order and writ of preliminary injunction before the Regional Trial Court, Quezon City, Branch 94.
Lorenzo Tan opposed the injunction, filed a counter-application for an injunction against Ong, and later elevated the matter to the Court of Appeals by a special civil action for certiorari under Rule 65, Rules of Court.
The RTC issued a temporary restraining order on September 16, 1993 and a writ of preliminary injunction on October 13, 1993 upon Ong’s posting of a P100,000.00 bond.
The RTC denied Tan’s motion to dissolve the writ on December 15, 1993 and denied a motion for reconsideration on March 1, 1994.
The Court of Appeals set aside the RTC order on August 8, 1994, modified its resolution on January 3, 1995 to enjoin enforcement of the RTC writ upon a P200,000.00 bond, and, after further proceedings, promulgated a decision on August 27, 1997 setting aside the RTC resolutions and making its injunction permanent.
Wilson Ong Ching Kian Chuan filed a petition for review with the Supreme Court contesting the Court of Appeals’ rulings on grounds of grave abuse of discretion and premature adjudication of the merits.

Key Facts

Wilson Ong Ching Kian Chuan imported vermicelli and repacked it in cellophane wrappers bearing a two‑dragon design and the TOWER trademark and obtained a Certificate of Copyright Registration from the National Library dated June 9, 1993 for that design.
Lorenzo Tan repacked vermicelli imported from a Qingdao, China source in a wrapper alleged to be nearly identical to Ong’s wrapper.
Lorenzo Tan asserted that the trademarks PAGODA and LUNGKOW and the two‑dragon device were first adopted and registered by CHINA NATIONAL CEREALS OILS AND FOODSTUFFS IMPORT AND EXPORT CORPORATION, SHANDONG CEREALS AND OILS BRANCH (referred to in the record as Ceroilfood Shandong).
Lorenzo Tan presented unauthenticated copies of numerous foreign certificates of registration in the name of Ceroilfood Shandong to show prior ownership of the design and trademarks.
Ong alleged that his Certificate of Copyright Registration under P.D. No. 49 vested in him the exclusive right to the two‑dragon wrapper and justified the issuance of injunctive relief.

Statutory Framework

P.D. No. 49 defines protected works to include "prints, pictorial, illustrations, advertising copies, labels, tags, and box wraps" and prescribes that an infringer is liable to "an injunction restraining such infringement" under Chapter II, Article VI, Section 28.
Rule 65, Rules of Court provided the procedural vehicle for Lorenzo Tan to challenge the RTC’s issuance of the writ of preliminary injunction by certiorari for alleged grave abuse of discretion.

Issues

Whether the issuance of the writ of preliminary injunction by the RTC in favor of Ong was proper.
Whether the Court of Appeals committed grave abuse of discretion in setting aside the RTC order and whether the Court of Appeals improperly adjudicated the merits of the infringement claim.

Parties’ Contentions

Ong contended that his Certificate of Copyright Registration justified issuance of the writ under P.D. No. 49 and that he had shown a clear and unmistakable right requiring injunctive relief.
Ong also contended that the Court of Appeals intruded upon the trial court’s discretionary