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 Appeals—CA 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 Tondeña 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. LTI’s 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 tanks. civil or criminal. 623 because its products. Are the patent rights of LTI over the bottles valid? LTI/CA ARGUMENTS 1. 5700 in its conduct of re-using bottles from LTI. RATIO. Patent Office" or "Reg Phil..destroy the same. consisting of hard liquor. flask. accumulators." bagoong. the same being duly marked or stamped and registered as herein provided. SEC. or the possession thereof without written permission of the manufacturer. to use the same. ARGUMENTS OF BOTH SIDES ISSUE/S W/N Cagayan violated Section 2 of Republic Act No. CAGAYAN ARGUMENTS 1. keg. VI. 623 which governs the registration of marked bottles and containers merely requires that the bottles. steel cylinders. The mere use of registered bottles or containers without the written consent of the manufacturer is prohibited (exceptions: used as containers for "sisi. STAT CON PRINCIPLES: ISSUE/S HELD RATIO W/N display/print the words NO The omitted words "property of” are dispensable. 3. bottler or seller. Cagayan did not consider hard liquor as “other lawful beverages” 3. Off. for drinking vessels or glasses or drain pipes. or other marks of ownership. There was no infringement of the goods or products of LTI since Cagayan uses its own labels and trademark on its product. can be filed against Cagayan. cask." hence no suit. "Registered in the Phil. Patent omission will NOT remove the bottles from the protection . accumulators or other similar containers. 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. not the actual LOGO or trademark of Ginebra/LTI) VII. The use by any person other than the registered manufacturer. 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. box. kegs boxes. DECISION OF THE COURT (HELD). steel cylinders. 2. shall give rise to a prima facie presumption that such use or possession is unlawful. were not included in the list of beverages enumerated. flasks." "patis" and similar native products) 2. 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. without written permission of the latter of any such bottle. for any other purpose than that registered by the manufacturer. foundation pipes. or other similar containers. Pat. 623. by any junk dealer or dealer in casks. LTI is not entitled to any protection under Republic Act No. tanks. and 4. Republic Act No. They did not display/print the words "Registered in the Phil. LTI has no cause of action because it failed to comply with requirement of giving notice that its aforesaid marks are registered. whether filled or not. (They were only re-using the bottles. barrel. as amended by Republic Act No. barrels. bottler or seller. with costs. 623 Purpose= the protection of the health of the general public and the prevention of the spread of contagious diseases." are sufficient notice to the public that those bottles so marked are owned by LTI. does not abandon it by making minor modifications in the mark or name itself. hence it is within the purview and coverage of Republic Act No. (We have to go back to the intention of the framers when they created RA 623) Republic Act No. 623." is a requirement for RA 623 to become effective of the law. Pat. 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. Petitioner cannot claim good faith. although regulated. 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. even without the words "property of. may recover damages in a civil action from any person (Cagayan)who infringes his rights. Hard liquor. and in this case the marked containers. 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.00). The record shows that it had actual knowledge that the bottles with the blown-in marks "La Tondeña Inc. 5700 W/N LTI.Office" or "Reg Phil." and "Ginebra San Miguel" stamped on the bottles. Hence. Without merit YES The words "other lawful beverages" is used in its general sense.000. Under. The owner of a trade-mark or trade-name. referring to all beverages not prohibited by law. Off. 623 protects only the containers of the soft drinks enumerated by petitioner (CAGAYAN) and those similar thereto. OTHER IMPORTANT FACT/S Writ of injunction directing petitioner (CAGAYAN) to desist from using the subject bottles was properly issued by the trial court. 623. 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. Petitioner is declared in contempt of court and ORDERED to pay a fine of One Thousand Pesos (P1. said writ could not be simply disregarded by Cagayan without adducing proof sufficient to overcome the aforesaid presumption. as amended. The rule of ejusdem generi s cannot be applied in this case.. is unwarranted and specious. . 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. Beverage is defined as a liquor or liquid for drinking. as amended by Republic Act No. The words "La Tondeña Inc. HOWEVER: The failure of LTI to make said marking will not bar civil action against petitioner Cagayan. is not prohibited by law." and "Ginebra San Miguel" are duly registered. RA 166: no damages shall be recovered unless the defendant has actual notice of the registration of trademark. who is entitled to the exclusive use of a registered mark or tradename. Even without said words the ownership of the bottles is easily Identifiable. Cagayan’s 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.