G.R. No.

91332 July 16, 1993

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., AND FABRIQUES OF TABAC REUNIES, S.A., petitioners

vs.

THE COURT OF APPEALS AND FORTUNE TOBACCO CORPORATION, respondents.

FACTS:

● Philip Morris, Incorporated is a corporation organized under the laws of the State of Virginia, United States of America, and not doing
business in the Philippines. They are registered owners "MARK VII", "MARK TEN", and "LARK" per certificates of registration issued
by the Philippine Patent Office.

● They asserted that even if they are not doing business in the Philippines and are suing on an isolated transaction, Fortune Tobacco
Corporation has no right to manufacture and sell cigarettes bearing the allegedly identical or confusingly similar trademark "MARK" in
contravention of Section 22 of the Trademark Law, and should, therefore, be precluded during the pendency of the case from
performing the acts complained of via a preliminary injunction.

● Plaintiffs maintain that since their trademarks are entitled to protection by treaty obligation under Article 2 of the Paris Convention and
since this is an action for a violation or infringement of a trademark or trade name by defendant, such mere allegation is sufficient
even in the absence of proof to support it.

● For its part, Fortune Tobacco Corporation admitted petitioners' certificates of registration with the Philippine Patent Office. Private
respondent alleged further that it has been authorized by the Bureau of Internal Revenue to manufacture and sell cigarettes bearing
the trademark "MARK", and that "MARK" is a common word which cannot be exclusively appropriated.

TRIAL COURT:

Denied the petition for preliminary injuction.

1). No proof whatsoever that any of plaintiffs' products which they seek to protect from any adverse effect of the trademark applied for by
defendant, is in actual use and available for commercial purposes anywhere in the Philippines.

2). The abandonment of an application is of no moment, for the same can always be refiled.

CA:

Granted the issuance of a writ of preliminary injunction.

ISSUE: WON Philip Morris as a foreign corporation has rights over the patent

HELD: NO.

To sustain a successful prosecution of their suit for infringement, petitioners, as foreign corporations not engaged in local commerce, rely on
section 21-A of the Trademark Law reading as follows:
Sec. 21-A. Any foreign corporation or juristic person to which a mark or trade-name has been registered or assigned under this act may bring
an action hereunder for infringement, for unfair competition, or false designation of origin and false description, whether or not it has been
licensed to do business in the Philippines under Act Numbered Fourteen hundred and fifty-nine, as amended, otherwise known as the
Corporation Law, at the time it brings complaint: Provided, That the country of which the said foreign 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. (As inserted by
Sec. 7 of Republic Act No. 638.)

To drive home the point that they are not precluded from initiating a cause of action in the Philippines on account of the principal perception that
another entity is pirating their symbol without any lawful authority to do so. Judging from a perusal of the aforequoted Section 21-A, the
conclusion reached by petitioners is certainly correct for the proposition in support thereof is embedded in the Philippine legal jurisprudence.

Another point which petitioners considered to be of significant interest, and which they desire to impress upon us is the protection they enjoy
under the Paris Convention of 1965 to which the Philippines is a signatory. Yet, insofar as this discourse is concerned, there is no necessity to
treat the matter with an extensive response because adherence of the Philippines to the 1965 international covenant due to pact sunt servanda
had been acknowledged in La Chemise (supra at page 390).

Given these confluence of existing laws amidst the cases involving trademarks, there can be no disagreement to the guiding principle in
commercial law that foreign corporations not engaged in business in the Philippines may maintain a cause of action for infringement primarily
because of Section 21-A of the Trademark Law when the legal standing to sue is alleged, which petitioners have done in the case at hand.

In assailing the justification arrived at by respondent court when it recalled the writ of preliminary injunction, petitioners are of the impression
that actual use of their trademarks in Philippine commercial dealings is not an indispensable element under Article 2 of the Paris Convention in
that:

(2) . . . . no condition as to the possession of a domicile or establishment in the country where protection is claimed may be required of persons
entitled to the benefits of the Union for the enjoyment of any industrial property of any industrial property rights. (p. 28, Petition; p. 29, Rollo in
G.R. No. 91332.)

Yet petitioners' perception along this line is nonetheless resolved by Sections 2 and 2-A of the Trademark Law which speak loudly, about
necessity of actual commercial use of the trademark in the local forum:

Sec. 2. What are registrable. — Trademarks, tradenames and service marks owned by persons, corporations, partnerships or associations
domiciled in the Philippines and by persons, corporations, partnerships or associations domiciled in any foreign country may be registered in
accordance with the provisions of this Act; Provided, That said trademarks, tradenames, or service marks are actually in use in commerce and
services not less than two months in the Philippines before the time the applications for registration are filed; And provided, further, That the
country of which the applicant for registration is a citizen grants by law substantially similar privileges to citizens of the Philippines, and such
fact is officially certified, with a certified true copy of the foreign law translated into the English language, by the government of the foreign
country to the Government of the Republic of the Philippines. (As amended by R.A. No. 865).

Sec. 2-A. Ownership of trademarks, tradenames and service marks; how acquired. — Anyone who lawfully produces or deals in merchandise
of any kind or who engages in any lawful business, or who renders any lawful service in commerce, by actual use thereof in manufacture or
trade, in business, and in the service rendered, may appropriate to his exclusive use a trademark, a tradename, or a service mark not so
appropriated by another, to distinguish his merchandise, business or service from the merchandise, business or service of others. The
ownership or possession of a trademark, tradename, service mark, heretofore or hereafter appropriated, as in this section provided, shall be
recognized and protected in the same manner and to the same extent as are other property rights known to the law. (As amended by R.A. No.
638). (Kabushi Kaisha Isetan vs. Intermediate Appellate Court, 203 SCRA 583 [1991], at pp. 589-590; emphasis supplied.)

Following universal acquiescence and comity, our municipal law on trademarks regarding the requirement of actual use in the
Philippines must subordinate an international agreement inasmuch as the apparent clash is being decided by a municipal tribunal
(Mortensen vs. Peters, Great Britain, High Court of Judiciary of Scotland, 1906, 8 Sessions 93; Paras, International Law and World
Organization, 1971 Ed., p. 20). Withal, the fact that international law has been made part of the law of the land does not by any means
imply the primacy of international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most
countries, rules of international law are given a standing equal, not superior, to national legislative enactments (Salonga and Yap, Public
International Law, Fourth ed., 1974, p. 16).

In other words, petitioners may have the capacity to sue for infringement irrespective of lack of business activity in the Philippines on account of
Section 21-A of the Trademark Law but the question whether they have an exclusive right over their symbol as to justify issuance of the
controversial writ will depend on actual use of their trademarks in the Philippines in line with Sections 2 and 2-A of the same law. It is thus
incongruous for petitioners to claim that when a foreign corporation not licensed to do business in Philippines files a complaint for infringement,
the entity need not be actually using its trademark in commerce in the Philippines. Such a foreign corporation may have the personality to file a
suit for infringement but it may not necessarily be entitled to protection due to absence of actual use of the emblem in the local market.

On the economic repercussion of this case, we are extremely bothered by the thought of having to participate in throwing into the streets
Filipino workers engaged in the manufacture and sale of private respondent's "MARK" cigarettes who might be retrenched and forced to join the
ranks of the many unemployed and unproductive as a result of the issuance of a simple writ of preliminary injunction and this, during the
pendency of the case before the trial court, not to mention the diminution of tax revenues represented to be close to a quarter million pesos
annually. On the other hand, if the status quo is maintained, there will be no damage that would be suffered by petitioners inasmuch as they are
not doing business in the Philippines.

In view of the explicit representation of petitioners in the complaint that they are not engaged in business in the Philippines, it inevitably follows
that no conceivable damage can be suffered by them not to mention the foremost consideration heretofore discussed on the absence of their
"right" to be protected. At any rate, and assuming in gratia argumenti that respondent court erroneously lifted the writ it previously issued, the
same may be cured by appeal and not in the form of a petition for certiorari (Clark vs. Philippine Ready Mix Concrete Co., 88 Phil. 460 [1951]).
Verily, and mindful of the rule that a writ of preliminary injunction is an interlocutory order which is always under the control of the court before
final judgment, petitioners' criticism must fall flat on the ground, so to speak, more so when extinction of the previously issued writ can even be
made without previous notice to the adverse party and without a hearing (Caluya vs. Ramos, 79 Phil. 640 [1974]; 3 Moran, Rules of Court, 1970
ed., p. 81).

WHEREFORE, the petition is hereby DISMISSED and the Resolutions of the Court of Appeals dated September 14, 1989 and November 29,
1989 are hereby AFFIRMED.