062 Puma v IAC

062 Puma v IAC Feb. 26, 1988 Gutierrez Jr, J. Short Version: Puma sued Mil-oro for trademark infringement, as the latter had been producing “Puma” socks and belts. MTD filed for lack of capacity to sue. Denied and injunction issued. SC upheld injunction. Puma had capacity to sue. A foreign corporation not doing business in the Philippines which is a national of a country party to the Paris Convention need not have a license in order to sue to protect its intellectual property. Facts: Puma, a West German Corporation and producer of Puma products, filed a complaint for patent or trademark infringement with a prayer for the issuance of a writ of prelim injunction against Mil-Oro Manufacturing Corp. Mil-Oro had been producing Puma socks and belts. MTD filed for lack of capacity to sue. MTD denied, injunction granted. CA reversed. Hence this petition for review on certiorari. Issues: 1. WON Puma has capacity to sue (Yes) 2. WON the case should be dismissed on the ground of lis pendens (No) 3. WON injunction should issue. (Yes) Ratio: 1. Puma had substantially complied with Sec. 21-A of RA 166. Its complaint specifically alleged that it is not doing business in the Philippines and is suing under that law, which provides that "the country of which the said corporation or juristic person is a citizen, or in which it is domiciled, by treaty, convention or law, grants a similar privilege to corporate or juristic persons of the Philippines." The Federal Republic of Germany and the Philippines are both parties of the Paris Convention, which forms part of the law of the land.

As held in La Chemise Lacoste, S.A .v. Fernandez,, a foreign corporation not doing business in the Philippines needs no license to sue before Philippine courts for infringement of trademark and unfair competition. Further, a foreign corporation which has never done any business in the Philippines and which is unlicensed and unregistered to do business here, but is widely and favorably known in the Philippines through the use therein of its products bearing its corporate and tradename, has a legal right to maintain an action in the Philippines to restrain the residents and inhabitants thereof from organizing a corporation therein bearing the same name as the foreign corporation, when it appears that they have personal knowledge of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is to deal and trade in the same goods as those of the foreign corporation. This is in accordance with Section 37 of RA No. 166, otherwise known as the trademark Law, which provides that “Persons who are nationals of, domiciled in, or have a bona fide or effective business or commercial establishment in any foreign country, which is a party to an international convention or treaty relating to marks or tradenames on the represssion of unfair competition to which the Philippines may be party, shall be entitled to the benefits and subject to the provisions of this Act ... Tradenames of persons described in the first paragraph of this section shall be protected without the obligation of filing or registration whether or not they form part of marks.” Thus, Puma had the legal capacity to file the action. 2. There was no lis pendens. The civil action filed was different from the administrative action filed. For a finding of lis pendens, the other case pending between the same parties and having the same cause must be a court action. Thus, the Court of Appeals likewise erred in holding that the requisites of lis pendens were present so as to justify the dismissal of the case below. 3. Mil-oro intentionally refused to present counter-evidence against the issuance of the writ. Thus, the court reiterated its guidance to lower courts and administrative agencies found in Lacoste: One final point. It is essential that we stress our concern at the seeming inability of law enforcement officials to stem the tide of fake and counterfeit consumer items flooding the Philippine market or exported abroad from our country. The greater victim is not so much the manufacturer whose product is being faked but the Filipino consuming public

and in the case of exportations, our image abroad. No less than the President, in issuing Executive Order No. 913 dated October 7, 1983 to strengthen the powers of the Minister of Trade and Industry for the protection of consumers, stated that, among other acts, the dumping of substandard, imitated, hazardous, and cheap goods, the infringement of internationally known tradenames and trademarks, and the unfair trade Practices of business firms have reached such proportions as to constitute economic sabotage. We buy a kitchen appliance, a household tool, perfume, face powder, other toilet articles, watches, brandy or whisky, and items of clothing like jeans, T-shirts, neckties, etc. — the list is quite lengthy — pay good money relying on the brand name as guarantee of its quality and genuine nature only to explode in bitter frustration and helpless anger because the purchased item turns out to be a shoddy imitation, albeit a clever looking counterfeit, of the quality product. Judges all over the country are well advised to remember that court processes should not be used as instruments to, unwittingly or otherwise, aid counterfeiters and intellectual pirates, tie the hands of the law as it seeks to protect the Filipino consuming public and frustrate executive and administrative implementation of solemn commitments pursuant to international conventions and treaties.

CA reversed and set aside. Gabe.