Trademark Infringement Courts Retain Jurisdiction Despite Pending Trademark Cancellation Proceedings

The Supreme Court's 2005 ruling in Levi Strauss (Phils.), Inc. v. Vogue Traders Clothing Company (G.R. No. 132993) settled an important question for trademark owners: can a regular court hear an infringement case while a petition to cancel a trademark registration is still pending before the Bureau of Patents, Trademarks and Technology Transfer (BPTTT, now the Intellectual Property Office)? The Court answered yes, clarifying that the doctrine of primary jurisdiction does not require courts to suspend infringement proceedings merely because a cancellation case is pending.

The Facts of the Case

Levi Strauss & Co., a US-based company, granted Levi Strauss (Phils.), Inc. a license to use the LEVI'S trademarks in the Philippines. The local company later discovered that Vogue Traders Clothing Company held registrations for "LIVE'S" and "LIVE'S Label Mark" trademarks, which Levi Strauss believed were confusingly similar to its own marks.

Levi Strauss filed two cancellation petitions before the BPTTT. It also obtained search warrants against Vogue Traders, leading to the seizure of goods bearing imitations of LEVI'S trademarks. Criminal charges were later dismissed and the warrants quashed.

Vogue Traders then filed a damages suit against Levi Strauss in the Regional Trial Court of Manila. In response, Levi Strauss included a counterclaim for trademark infringement and sought a preliminary injunction. The trial court granted the injunction, ordering Vogue Traders to stop manufacturing and selling jeans with designs substantially similar to LEVI'S trademarks.

The Court of Appeals reversed, ruling that the trial court should have desisted from proceeding until the BPTTT resolved the cancellation cases. The Supreme Court reversed the appellate court's decision.

The Issue

The central question was whether the trial court could proceed with the infringement counterclaim and issue a preliminary injunction while the BPTTT had yet to resolve the cancellation petitions filed by Levi Strauss.

The Court's Ruling

The Supreme Court ruled in favor of Levi Strauss, holding that the trial court properly exercised jurisdiction over the infringement counterclaim despite the pending cancellation proceedings.

Separate proceedings, separate functions. The Court distinguished between administrative cancellation of a trademark registration and judicial enforcement of trademark rights. Under Section 17 of Republic Act No. 166 (the Trademark Law), the BPTTT has exclusive authority over cancellation petitions. However, actions for infringement, unfair competition, injunction, and damages fall squarely within the jurisdiction of ordinary courts.

No prejudicial question. Citing Conrad and Company, Inc. v. Court of Appeals and Shangri-La International Hotel Management Ltd. v. Court of Appeals, the Court emphasized that a pending cancellation petition before the BPTTT does not operate as a prejudicial question that must be resolved before an infringement action proceeds. The Court quoted the Intellectual Property Code (R.A. No. 8293), which explicitly states that the earlier filing of a cancellation petition "shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided."

Independent remedies. The Court stressed that an infringement action and a cancellation proceeding can proceed independently and simultaneously. A party's prior filing of cancellation cases does not preclude it from asserting infringement claims in court.

Other Findings

The Court also addressed procedural issues. It held that the certification against forum shopping must be executed by the petitioner or, for corporations, by a duly authorized officer—not by counsel. The Court of Appeals should have dismissed the petition before it due to the defective certification.

The Court likewise found that the trial court correctly declared Vogue Traders to have waived its right to present evidence when its counsel failed to appear at the scheduled hearing without valid reason. Finally, the Court ruled that a preliminary injunction does not prejudge the case; it merely preserves the status quo until the merits are heard.

Practical Takeaways

• Courts and the IPO can act in parallel. A trademark owner may pursue infringement and damages in court even while a cancellation petition is pending before the Intellectual Property Office.
• A pending cancellation is not a prejudicial question. Courts need not wait for the IPO to resolve cancellation proceedings before hearing infringement claims.
• Preliminary injunctions are provisional. Issuance of a preliminary injunction does not amount to a prejudgment of the case; it only maintains the status quo pending trial.
• Certification against forum shopping is strict. For corporations, the certification must be executed by a duly authorized director or officer, not merely by counsel.
• Appearances matter. Failure to appear at scheduled hearings without valid reason can result in waiver of the right to present evidence.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.