G.R. No. 130360 , August 15, 2001
Wilson Ong Ching Kian Chuan, petitioner, vs. Hon. Court of Appeals and Lorenzo Tan, respondents.

FACTS

Petitioner Wilson Ong Ching Kian Chuan (“Ong”) imports vermicelli from China and repacks it using a cellophane wrapper with a two-dragon design and the TOWER trademark. He acquired a Certificate of Copyright Registration for this design from the National Library on June 9, 1993. Ong discovered that private respondent Lorenzo Tan, who also imports vermicelli from a related Chinese company, was using a “nearly” identical wrapper. Ong filed a complaint for copyright infringement with the Regional Trial Court (RTC) of Quezon City, which issued a temporary restraining order and later a writ of preliminary injunction in Ong’s favor upon posting a bond. Tan opposed, claiming Ong was not the original creator of the design, that the trademark and design belonged to the Chinese corporation Ceroilfood Shandong, and that Tan was its exclusive distributor authorized to use the trademark. The RTC denied Tan’s motion to dissolve the writ. Tan elevated the case to the Court of Appeals (CA) via certiorari. The CA initially set aside the RTC’s orders but later modified its resolution, issuing its own writ of preliminary injunction against the enforcement of the RTC’s writ. After submission of memoranda, the CA promulgated a decision setting aside the RTC’s resolutions and order and making its injunction permanent. Ong filed the instant petition for review.

ISSUE

1. Whether the issuance of the writ of preliminary injunction by the RTC was proper.
2. Whether the Court of Appeals committed grave abuse of discretion in setting aside the RTC’s order and in issuing a judgment that touched on the merits of the case.

RULING

The Supreme Court PARTIALLY GRANTED the petition.
1. On the propriety of the preliminary injunction: The Court held that the grant of a preliminary injunction rests on the sound discretion of the court and must be exercised with extreme caution. It depends on the extent of doubt regarding the validity of the copyright, the existence of infringement, and the damages sustained. While Ong held a Certificate of Copyright Registration, Tan presented evidence (copies of certificates from other countries) suggesting the design originated from Ceroilfood Shandong. The Supreme Court found that the CA erred in declaring that Ong’s wrapper was a copy of Ceroilfood Shandong’s design, as this determination was premature and a matter for the trial court to decide after a full trial. Consequently, the prayer for a preliminary injunction to prohibit Tan from using the wrapper was denied, and the CA’s finding on the copy issue was set aside.
2. On the CA’s alleged grave abuse of discretion: The Supreme Court directed the RTC to proceed with the trial to determine the merits of the case (Civil Case No. 33779) expeditiously. The records were ordered remanded to the RTC. The Court implicitly found that the CA’s action in making a determination on the originality of the design pre-empted the trial court’s role. No pronouncement was made as to costs.