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.