Title
Philip Morris, Inc. vs. Court of Appeals
Case
G.R. No. 91332
Decision Date
Jul 16, 1993
Foreign cigarette manufacturers sued a local company for trademark infringement over the use of "MARK," claiming irreparable harm. The Supreme Court reinstated a preliminary injunction, upholding trademark protection under the Paris Convention despite petitioners not operating locally.

Case Summary (G.R. No. 91332)

Preliminary Injunction Proceedings Before the Trial Court

At first instance, Branch 166, RTC Pasig (Judge Reyes), denied the injunction (Mar 28, 1983) on grounds that petitioners, not doing business locally, could not suffer irreparable harm in the Philippines; Fortune’s trademark application remained pending; and BIR approval did not bar infringement claims but indicated absence of final Patent Office action. A motion for reconsideration was likewise denied (Apr 5, 1984).

Second Motion for Preliminary Injunction

In September 1986, petitioners cited new Patent Office communications declaring Fortune’s “MARK” application abandoned and confusingly similar to their marks. RTC Branch 166 (Judge Galing) again denied relief (Apr 22, 1987), noting petitioners failed to prove actual local use of their marks and that abandonment was not final, Fortune having refiled its application.

Proceedings in the Court of Appeals

Petitioners filed certiorari (G.R. No. 78141) which was referred to the Court of Appeals. The CA First Division (Justice Cacdac) set aside the RTC’s 1987 order and granted preliminary injunction (May 5, 1989), finding petitioners’ exclusive rights clear: Patent Office rulings barred Fortune’s registration under Sec 4(d); petitioners showed prima facie entitlement; and failure to enjoin would render final relief ineffectual. Fortune’s motion for reconsideration was denied (July 12, 1989).

Counterbond and Dissolution of Injunction

Fortune moved to dissolve the CA-issued injunction, offering counterbond and citing potential loss of hundreds of millions in government taxes and massive lay-offs of local workers. The CA granted dissolution upon filing of a P 400 000 counterbond (Sept 14, 1989), concluding that petitioners, not manufacturing locally, would not suffer irreparable injury and could be compensated by bond. Petitioners’ motion for re-examination was denied (Nov 29, 1989).

Petitioners’ Legal Arguments

Petitioners invoked certiorari, arguing the CA:

  1. Erroneously required proof of actual local use to establish irreparable injury;
  2. Violated Rule 58(6), Sec 6 (grounds for dissolution) by lifting injunction on insufficient grounds; and
  3. Abandoned its own finding of grave abuse and reversed course without legal justification, undermining petitioners’ clear statutory and treaty-based trademark rights.

Legal Basis: 1987 Constitution and Trademark Law

The decision postdates 1990; thus the 1987 Constitution governs. Under Art 2, Sec 2 (national treatment), the Philippines must grant foreign registrants the same protection as nationals. Sec 21-A of R.A. 166 (as amended) permits foreign trademark owners to sue for infringement in Philippine courts, whether or not licensed to do business locally, provided their home country grants reciprocal rights.

Analysis on Foreign Corporations’ Capacity to Sue

Jurisp­rudence (La Chemise Lacoste S.A. v. Fernandez; Puma Sportschuhfabriken v. IAC) consistently upholds foreign registrants’ capacity to file infringement or cancellation actions despite lack of local business operations. The Paris Convention bars domicile requirements for industrial property rights (Art 2, para 2).

Requirement of Actual Use in Commerce

Sections 2 and 2-A of R.A. 166 require registrability on proof of actual local use for two months pre-registration. Post-registration, Sec 12 mandates affidavits of continued use but does not condition enforcement of rights on ongoing local business. Patent Office registration in the Principal Register provides prima facie presumption of valid prior use. Petitioners’ marks were properly registered and remain effective.

Irreparable Injury and Balance of Hardships

Irreparable harm in trademark cases extends beyond quantifiable sales loss to erosion of goodwill, consumer confusion, and dilution of trademark identity—damages not adequately measured by money alone (Social Security Commission v. Bayona). Petitioners demonstrated such harm. Fortune’s economic arguments—loss of tax revenues and possible job-cuts—did not justify infringement continuation; it could manufacture und

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster—building context before diving into full texts.

About Privacy Terms