STAT CON GROUP DIGEST CASE NO: 1 CASE TITLE: CAGAYAN VALLEY ENTERPRISE, INC v.

COURT OF APPEALS DECISION DATE: NOV 8, 1989 PONENTE: REGALDO J. VOTATION: Paras, Padilla and Sarmiento, JJ., concur. Melencio-Herrera (Chairperson), J., is on leave. I. PETITIONER: CAGAYAN VALLEY ENTERPRISE (Cagayan) Liquor producing company that was using empty bottles patented by La Toneda Inc (LTI). They were refilling the said bottles with their own liquor product with the label Sonny Boy; reportedly acquired bottles through junkshops RESPONDENTS: Court of AppealsCA ruled in favour of LTI, enjoining Cagayan of using the empty bottles that were patented and compelling them to pay for damages. Cagayan seeks the nullification of the decision of the CA PARTIES IN THE CASE: La Toneda Inc (LTI) The company with patent rights over the contested bottles FACTS / TIMELINE OF EVENTS: FIRST CASE: LTI initiated the suit against Cagayan LTI registered with the Philippine Patent Office pursuant to Republic Act No. 623 the 350 c.c. white flint bottles it has been using for its gin popularly known as "Ginebra San Miguel" LTI filed Civil Case for injunction and damages against Cagayan for using the bottles with the mark "La Tondea Inc." and "Ginebra San Miguel" stamped by filling the same with Cagayan's liquor product bearing the label "Sonny Boy" for commercial sale and distribution, without LTI's written consent In violation of Section 2 of Republic Act No. 623, as amended by Republic Act No. 5700. Cagayan alleged that LTI did not have cause of action; that it cannot claim protection under RA 623 because it was not able to satisfy some requirements for patenting of trademarks (See Arguments Table). Trial Court ruled in favour of Cagayan. LTIs complaint had no cause of action and Cagayan was not guilty of contempt of court. Trial Court awarded damages in favour of Cagayan SECOND CASE: LTI filed for Appeal LTI appealed to the CA which; decision was in favor of said appellant THIRD CASE: CAGAYAN filed motion for reconsideration but was denied by CA Cagayan seeks the nullification of the decision of the CA

II.

III. IV.

V. PROVISION BEING CONTESTED: Republic Act No. 623, as amended by Republic Act No. 5700 SEC 1. Persons engaged or licensed to engage in the manufacture, bottling, or selling of soda water, mineral or aerated waters, cider, milk, cream or other lawful beverages in bottles, boxes, casks, kegs, or barrels and other similar containers, or in the manufacturing, compressing or selling of gases such as oxygen, acytelene, nitrogen, carbon dioxide ammonia, hydrogen, chloride, helium, sulphur, dioxide, butane, propane, freon, melthyl chloride or similar gases contained in steel cylinders, tanks, flasks, accumulators or similar containers, with the name or the names of their principals or products, or other marks of ownership stamped or marked thereon, may register with the Philippine Patent Office a description of the names or marks, and the purpose for which the containers so marked and used by them, under the same conditions, rules, and regulations, made applicable by law or regulation to the issuance of trademarks. SEC. 2. It shall be unlawful for any person, without the written consent of the manufacturer, bottler, or seller, who has succesfully registered the marks of ownership in accordance with the provisions of the next preceding section, to fill such bottles, boxes, kegs, barrels, steel cylinders, tanks, flasks, accumulators or other similar containers so marked or stamped, for the purpose of sale, or to sell, disposed of, buy or traffic in, or wantonly

destroy the same, whether filled or not, to use the same, for drinking vessels or glasses or drain pipes, foundation pipes, for any other purpose than that registered by the manufacturer, bottler or seller. Any violation of this section shall be punished by a fine of not more than one thousand pesos or imprisonment of not more than one year or both. SEC. 3. The use by any person other than the registered manufacturer, bottler or seller, without written permission of the latter of any such bottle, cask, barrel, keg, box, steel cylinders, tanks, flask, accumulators, or other similar containers, or the possession thereof without written permission of the manufacturer, by any junk dealer or dealer in casks, barrels, kegs boxes, steel cylinders, tanks, flasks, accumulators or other similar containers, the same being duly marked or stamped and registered as herein provided, shall give rise to a prima facie presumption that such use or possession is unlawful. VI. ARGUMENTS OF BOTH SIDES ISSUE/S W/N Cagayan violated Section 2 of Republic Act No. 623, as amended by Republic Act No. 5700 in its conduct of re-using bottles from LTI. Are the patent rights of LTI over the bottles valid?

LTI/CA ARGUMENTS 1. The mere use of registered bottles or containers without the written consent of the manufacturer is prohibited (exceptions: used as containers for "sisi," bagoong," "patis" and similar native products) 2. Republic Act No. 623 which governs the registration of marked bottles and containers merely requires that the bottles, in order to be eligible for registration, must be stamped or marked with the names of the manufacturers or the names of their principals or products, or other marks of ownership.

CAGAYAN ARGUMENTS 1. LTI has no cause of action because it failed to comply with requirement of giving notice that its aforesaid marks are registered. They did not display/print the words "Registered in the Phil. Patent Office" or "Reg Phil. Pat. Off.," hence no suit, civil or criminal, can be filed against Cagayan; 2. LTI is not entitled to any protection under Republic Act No. 623 because its products, consisting of hard liquor, were not included in the list of beverages enumerated. Cagayan did not consider hard liquor as other lawful beverages 3. No reservation of ownership on its bottles was made by LTI in its sales invoices nor does it require any deposit for the retention of said bottles; and 4. There was no infringement of the goods or products of LTI since Cagayan uses its own labels and trademark on its product. (They were only re-using the bottles, not the actual LOGO or trademark of Ginebra/LTI)

VII. DECISION OF THE COURT (HELD), RATIO, STAT CON PRINCIPLES: ISSUE/S HELD RATIO W/N display/print the words NO The omitted words "property of are dispensable; "Registered in the Phil. Patent omission will NOT remove the bottles from the protection

Office" or "Reg Phil. Pat. Off.," is a requirement for RA 623 to become effective

of the law. The owner of a trade-mark or trade-name, and in this case the marked containers, does not abandon it by making minor modifications in the mark or name itself. Even without said words the ownership of the bottles is easily Identifiable. The words "La Tondea Inc." and "Ginebra San Miguel" stamped on the bottles, even without the words "property of," are sufficient notice to the public that those bottles so marked are owned by LTI.

The claim of petitioner that hard liquor is not included under the term "other lawful beverages" as provided in Section I of Republic Act No. 623, as amended by Republic Act No. 5700 W/N LTI, who is entitled to the exclusive use of a registered mark or tradename, may recover damages in a civil action from any person (Cagayan)who infringes his rights.

Without merit

YES

The words "other lawful beverages" is used in its general sense, referring to all beverages not prohibited by law. Beverage is defined as a liquor or liquid for drinking. Hard liquor, although regulated, is not prohibited by law; hence it is within the purview and coverage of Republic Act No. 623, as amended. Under, RA 166: no damages shall be recovered unless the defendant has actual notice of the registration of trademark. HOWEVER: The failure of LTI to make said marking will not bar civil action against petitioner Cagayan. Petitioner cannot claim good faith. The record shows that it had actual knowledge that the bottles with the blown-in marks "La Tondea Inc." and "Ginebra San Miguel" are duly registered. Petitioner cannot avoid the effect of the admission and/or acknowledgment made by Diego Lim (stock holder) of Cagayan

Statcon Principle The proposition that Republic Act No. 623 protects only the containers of the soft drinks enumerated by petitioner (CAGAYAN) and those similar thereto, is unwarranted and specious. The rule of ejusdem generi s cannot be applied in this case. To limit the coverage of the law only to those enumerated or of the same kind or class as those specifically mentioned will defeat the very purpose of the law. (We have to go back to the intention of the framers when they created RA 623) Republic Act No. 623 Purpose= the protection of the health of the general public and the prevention of the spread of contagious diseases. Seeks to safeguard the property rights of an important sector of Philippine industry Afford a person a means of identifying the containers he uses in the manufacture, preservation, packing or sale of his products so that he may secure their registration with the Bureau of Commerce and Industry and thus prevent other persons from using them. OTHER IMPORTANT FACT/S Writ of injunction directing petitioner (CAGAYAN) to desist from using the subject bottles was properly issued by the trial court. Hence, said writ could not be simply disregarded by Cagayan without adducing proof sufficient to overcome the aforesaid presumption. Cagayans disregard is equivalent to contempt of court Judgment= rendered DENYING the petition of Cagayan in this case and AFFIRMING the decision of respondent Court of Appeals in favour of LTI. Petitioner is declared in contempt of court and ORDERED to pay a fine of One Thousand Pesos (P1,000.00), with costs.