G.R. No. 221732 . August 23, 2017
Fernando U. Juan, Petitioner, v. Roberto U. Juan (Substituted by his son Jeffrey C. Juan) and Laundromatic Corporation, Respondents.

FACTS

Respondent Roberto U. Juan claimed prior use of the name and mark “Lavandera Ko” for his laundry business since 1994, securing a copyright certificate from the National Library in 1997 and registering it as a business name with the DTI in 1998. He later discovered that his brother, petitioner Fernando U. Juan, had registered the identical mark with the Intellectual Property Office (IPO) in 2001. Roberto alleged that Fernando, through an agent, threatened his franchisees and sold competing franchises. Roberto thus filed a petition for injunction, unfair competition, and cancellation of trademark before the RTC of Makati, which initially issued a writ of preliminary injunction against Fernando.
The RTC, after trial, dismissed both parties’ claims in a 2013 Resolution. It ruled that neither had exclusive rights to “Lavandera Ko,” finding the mark originated from a 1942 musical composition by Santiago S. Suarez. The court held both parties made misrepresentations, dismissed their pleadings for no cause of action, lifted the injunction, and ordered the National Library and IPO to cancel the respective certificates issued to Roberto and Fernando. Fernando appealed to the CA, arguing the RTC erred in equating a mark with a copyright and in relying on an unverified internet article about the folk song.

ISSUE

Whether the Court of Appeals correctly dismissed the appeal on technical grounds for non-compliance with procedural rules, and whether the case should be remanded for substantive resolution.

RULING

The Supreme Court reversed the CA and remanded the case to the RTC. On the procedural issue, the Court held that while Fernando’s Appellant’s Brief had formal deficiencies, such as inadequate page references, dismissal on purely technical grounds was improper. Rules of procedure are tools to facilitate justice, not to defeat it. The CA should have considered the merits, as the brief substantially complied by presenting the case’s factual background and legal arguments, allowing a proper adjudication. The dismissal for technicality deprived the parties of a resolution on the substantive rights in dispute.
On the substantive issues, the Supreme Court found the RTC’s resolution legally flawed, necessitating remand. The RTC erroneously treated copyright and trademark as interchangeable concepts. A copyright protects original artistic or literary works, while a trademark or service mark distinguishes the goods or services of one enterprise. Ownership of one does not automatically confer rights over the other. Furthermore, the RTC’s heavy reliance on an internet article to establish the mark’s origin was improper, as such unverified online material constitutes hearsay without authentication. The RTC also failed to properly apply intellectual property principles, such as the protection of trade names even without registration under the Intellectual Property Code and the concept of prior use in trademark disputes. Since these factual and legal determinations require thorough evaluation, the Supreme Court ordered the case remanded to the RTC for a new decision based on the correct application of law and competent evidence.