Case Digest: Compania General de Tabacos de Filipinas and La Flor de la Isabela, Inc. vs. Hon. Virgilio A. Sevandal, et al.

Petitioners’ Claims:

Petitioners claimed in its Letter-Complaint to the SEC that Tabaqueria, owned by its former General Manager, Gabriel Ripoll, cannot be allowed to continue said name because it will confuse and deceive the public into believing that Tabaqueria is operated and managed by, and part of Tabacalera. Compania General, being a Spain-based company, operated under La Flor de la Isabela in the Philippines. Petitioners filed with the DOJ and the DTI a Complaint for Infringement and Unfair Competition.  Petitioners alleged that Tabaqueria deliberately sought to adopt the Tabacalera trademarks to confuse the public that the Tabaqueria cigars are the same or are somehow connected with the Tabacalera products.  As such, the Petitioners filed for a Motion to grant Cease and Desist Order in order to enjoin Tabaqueria from further producing cigars.

Respondents’ Claims:

Ripoll, now the Directing Manager of Tabaqueria, alleged that there is insufficient evidence to issue a Cease and Desist Order against him on the ground of unfair competition and infringement of trademark.  Moreover, they moved to dismiss the case on the ground of forum shopping.  Further, the Office of Legal Affairs of the DTI ruled that there was no similarity in the general appearance of the products of the parties and consumers would not be misled.  DTI further found that the competing products, in their totality, are easily distinguishable through their brand and logos. “TABACALERA” is the brand of the Tabacalera products, while “FLOR DE MANILA” is the brand of the Petitioners.  In fact, per Certification of BIR in 1994, “Flor de Manila” is the brand registered by the latter with said bureau.  As per inspection, none of their boxes even show the word “TABAQUERIA”.

Issue:

Whether or not there is substantial similarity between the two parties as to amount to unfair competition and trademark infringement, and are therefore entitled to a writ of preliminary injunction.

Ruling:

No.  The Supreme Court upheld the decision of the Court of Appeals and the DTI.  Injunctive relief may only be issued when the right of the complainant is clear and unmistakable; when the invasion of the right sought to be protected is material and substantial; and there is an urgent and paramount necessity for the writ to prevent serious damage.  The Court found that there is no urgent and paramount necessity for the writ.  The Petitioners has not shown, at least tentatively, that there exists a fraudulent and malicious entry into the market and as a result thereby, their sales dropped by 25%.