La Naval Drug Corporation vs

Court of Appeals
236 SCRA 78 Remedial Law Civil Procedure Motion to Dismiss Grounds for
Dismissal

In 1989, a conflict between La Naval Drug Corporation and a certain Wilson Yao arose
regarding a lease contract. Yao invoked a provision in the lease contract whereby pursuant
to R.A. 876 (Arbitration Law), they should refer the matter to arbitration. Hence, the parties
agreed to refer the issue to three arbitrators however, certain complications arose when
they were choosing a third arbitrator. This prompted Yao to go to court to demand the
arbitrators to proceed with the arbitration. Yao went to the regional trial court (Angeles City)
and the case was filed as a summary proceeding case under R.A. 876. Yao also prayed for
an award for damages in his favor.

In its answer, La Naval asserted that the case should be dismissed as it was filed
prematurely; La Naval questioned Yaos claim for damages as it averred that the same
should be litigated independently and not in the same summary proceeding case. However,
La Naval also posed a counterclaim.

The RTC resolved the matter regarding the arbitrators (it appointed a third arbitrator). The
RTC also ruled that La Naval is estopped from questioning Yaos claim for damages for
being out of jurisdiction as La Naval itself filed a counterclaim for damages.

ISSUE: Whether or not the RTC has jurisdiction over the claims for damages between
parties.

HELD: No. R.A. 876 is clear that summary proceedings under said law shall only involve
the matter of arbitration. The parties claims for damages must be litigated in another civil
case.

The Supreme Court went on to discuss that where the court clearly has no jurisdiction over
the subject matter, in this case the claim and counterclaim for damages, the court must
dismiss the case (in this case, the claim and counterclaim for damages). Lack of jurisdiction
over the subject matter as a defense may be raised at any time. Failure to raise such
defense shall not estop the defendant from raising such defense (as opposed to the
defense of lack of jurisdiction over the person which is deemed waived if the defendant
voluntarily appeared if defendant voluntarily appeared, then he is estopped from raising
that defense).
 Del Monte vs Court of Appeals and
Sunshine Sauce
181 SCRA 410 Mercantrile Law Intellectual Property Law Law on Trademarks,
Service Marks and Trade Trademark Infringement Unfair Competition

Del Monte Corporation is an American corporation which is not engaged in business in the
Philippines. Though not engaging business here, it has given authority to Philippine Packing
Corporation (Philpack) the right to manufacture, distribute and sell in the Philippines various
agricultural products, including catsup, under the Del Monte trademark and logo. In 1965,
Del Monte also authorized Philpack to register with the Patent Office the Del Monte catsup
bottle configuration. Philpack was issued a certificate of trademark registration under the
Supplemental Register.

Later, Del Monte and Philpack learned that Sunshine Sauce Manufacturing was using Del
Monte bottles in selling its products and that Sunshine Sauces logo is similar to that of Del
Monte. The RTC of Makati as well as the Court of Appeals ruled that there was no
infringement because the trademarks used between the two are different in designs and
that the use of Del Monte bottles by Sunshine Sauce does not constitute unfair competition
because as ruled in Shell Company vs Insular Petroleum: selling oil in containers of
another with markings erased, without intent to deceive, was not unfair competition.

ISSUE: Whether or not there is unfair competition and infringement in the case at bar.

HELD: Yes. The Supreme Court recognizes that there really are distinctions between the
designs of the logos or trademarks of Del Monte and Sunshine Sauce. However, it has
been that side by side comparison is not the final test of similarity. Sunshine Sauces
logo is a colorable imitation of Del Montes trademark. The word catsup in both bottles is
printed in white and the style of the print/letter is the same. Although the logo of Sunshine is
not a tomato, the figure nevertheless approximates that of a tomato. The person who
infringes a trade mark does not normally copy out but only makes colorable changes,
employing enough points of similarity to confuse the public with enough points of
differences to confuse the courts. What is undeniable is the fact that when a manufacturer
prepares to package his product, he has before him a boundless choice of words, phrases,
colors and symbols sufficient to distinguish his product from the others. When as in this
case, Sunshine chose, without a reasonable explanation, to use the same colors and letters
as those used by Del Monte though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive.
The Supreme Court also ruled that Del Monte does not have the exclusive right to use Del
Monte bottles in the Philippines because Philpacks patent was only registered under the
Supplemental Register and not with the Principal Register. Under the law, registration under
the Supplemental Register is not a basis for a case of infringement because unlike
registration under the Principal Register, it does not grant exclusive use of the patent.
However, the bottles of Del Monte do say in embossed letters: Del Monte Corporation, Not
to be Refilled. And yet Sunshine Sauce refilled these bottles with its catsup products. This
clearly shows the Sunshine Sauces bad faith and its intention to capitalize on the Del
Montes reputation and goodwill and pass off its own product as that of Del Monte.