La Chemise Lacoste, S.A. vs. Fernandez

Nos. L-63796-97. May 21, 1984

FACTS:

La Chemise Lacoste, S.A., a well known European manufacturer of clothings and sporting apparels sold in the international market and bearing the trademarks “LACOSTE”, “CHEMISE LACOSTE”, “CROCODILE DEVICE” and a composite mark consisting of the word “LACOSTE” and a representation of a crocodile/alligator. 

In 1975, Hemandas & Co., a duly licensed domestic firm applied for and was issued the Supplemental Register of the trademark “CHEMISE LACOSTE & CROCODILE DEVICE” by the Philippine Patent Office for use on T-shirts, sportswear and other garment products of the company. Thereafter, it assigned to Gobindram Hemandas all rights, title, and interest in the trademark. 

In 1980, La Chemise filed its application for registration of the trademark “Crocodile Device” (Application Serial No. 43242) and “Lacoste” (Application Serial No. 43241).  La Chemise filed with the National Bureau of Investigation (NBI) a letter-complaint alleging therein the acts of unfair competition being committed by Hemandas and requesting their assistance in his apprehension and prosecution. The NBI filed with the trial court two applications for the issuance of search warrants which would authorize the search of the premises used and occupied by the Lacoste Sports Center and Games and Garments both owned and operated by Hemandas.

The Trial Court issued  the search warrants after appearing  to the satisfaction of the judge after examining under oath applicant and his witnesses that there are good and sufficient reasons to believe that Gobindram Hemandas has in his control and possession in his premises the properties subject of the offense. 

Hemandas filed a motion to quash the search warrants alleging that the trademark used by him was different from the petitioner’s trademark. The search warrants were recalled and set aside and the NBI agents or officers in custody of the seized items were ordered to return the same to Hemandas.

ISSUES: 

(A) Whether La Chemise Lacoste,  a foreign corporation not doing business and is not licensed to do business in the Philippines,   has no capacity to sue before Philippine courts.

(B) Whether Hemandas is the holder of a certificate of registration of the trademark “CHEMISE LACOSTE & CROCODILE DEVICE. 

HELD:

(A) NO. The foreign corporation may have the right to sue before Philippine courts, but our rules on pleadings require that the qualifying circumstances necessary for the assertion of such right should first be affirmatively pleaded.

A foreign corporation not doing business in the Philippines needs no license to sue in the Philippines for trademark violations.  More important is the nature of the case which led to this petition. What preceded this petition for certiorari was a letter-complaint filed before the NBI charging Hemandas with a criminal offense. If prosecution follows after the completion of the preliminary investigation being conducted by the Special Prosecutor the information shall be in the name of the People of the Philippines and no longer the petitioner which is only an aggrieved party since a criminal offense is essentially an act against the State. It is the latter which is principally the injured party although there is a private right violated. Petitioner’s capacity to sue would become, therefore, of not much significance in the main case. We cannot allow a possible violator of our criminal statutes to escape prosecution upon a far-fetched contention that the aggrieved party or victim of a crime has no standing to sue.

The right of the  La Chemise Lacoste to maintain the present suit before our courts for unfair competition or infringement of trademarks of a foreign corporation, is within the duties and the rights of foreign states under the Paris Convention for the Protection of Industrial Property to which the Philippines and France are parties. We are simply interpreting and enforcing a solemn international commitment of the Philippines embodied in a multilateral treaty to which we are a party and which we entered into because it is in our national interest to do so. The petitioner should be given the same treatment in the Philippines as we make available to our own citizens. We are obligated to assure to nationals of “countries of the Union” an effective protection against unfair competition in the same way that they are obligated to similarly protect Filipino citizens and firms.

(B) NO. A certificate of registration in the Supplemental Register is not prima facie evidence of the validity of registration, of the registrant’s exclusive right to use the same in connection with the goods, business, or services specified in the certificate. 

The registration of a mark upon the supplemental register is not, as in the case of the principal register, prima facie evidence of (1) the validity of registration; (2) registrant’s ownership of the mark; and (3) registrant’s exclusive right to use the mark. It is not subject to opposition, although it may be cancelled after its issuance. Neither may it be the subject of interference proceedings. Registration on the supplemental register is not constructive notice of the registrant’s claim of ownership.

The records show that the goodwill and reputation of the petitioner’s products bearing the trademark LACOSTE date back even before 1964 when LACOSTE clothing apparels were first marketed in the Philippines. To allow Hemandas to continue using the trademark Lacoste for the simple reason that he was the first registrant in the Supplemental Register of a trademark used in international commerce and not belonging to him is to render nugatory the very essence of the law on trademarks and tradenames. 

The law on trademarks and tradenames is based on the principle of business integrity and common justice. This law, both in letter and spirit, is laid upon the premise that, while it encourages fair trade in every way and aims to foster.

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