G.R. No. 197802 , November 11, 2015
Zuneca Pharmaceutical, Akram Arain and/or Venus Arain, M.D. dba Zuneca Pharmaceutical, Petitioners, vs. Natrapharm, Inc., Respondent.

FACTS

Respondent Natrapharm, Inc. is a pharmaceutical company that manufactures and sells a medicine with the generic name “CITICOLINE” under its registered trademark “ZYNAPSE,” which was registered with the Intellectual Property Office (IPO) on September 24, 2007. It also secured the necessary permits from the Bureau of Food and Drugs (BFAD). Petitioners Zuneca Pharmaceutical have been selling a medicine with the generic name “CARBAMAZEPINE,” an anti-convulsant, under the brand name “ZYNAPS” since at least 2003, based on a BFAD Certificate of Product Registration (CPR) issued on April 15, 2003. The trademark “ZYNAPS” is not registered with the IPO. Respondent alleged that the two products are sold in the same drugstores, creating a risk of medicine switching, especially since CARBAMAZEPINE has a serious side effect called Stevens-Johnson Syndrome. After petitioners refused a cease-and-desist demand, respondent filed a complaint for trademark infringement with a prayer for a temporary restraining order (TRO) and/or writ of preliminary injunction. The Regional Trial Court (RTC) denied the applications for TRO and preliminary injunction, ruling that petitioners’ prior use of “ZYNAPS” in 2003, evidenced by their BFAD CPR, defeated respondent’s 2007 IPO registration under Section 159.1 of the Intellectual Property Code. Respondent filed a petition for certiorari with the Court of Appeals (CA). The CA initially denied the application for TRO/preliminary injunction but later, in its Decision dated April 18, 2011, reversed the RTC and granted a permanent injunction against petitioners. Petitioners filed the present petition for review. Meanwhile, on December 2, 2011, the RTC rendered a Decision on the merits, finding petitioners liable for trademark infringement, ordering them to pay damages, and permanently enjoining them from using “ZYNAPS.” Respondent moved to dismiss the petition as moot and academic.

ISSUE

1. Whether the decision on the merits rendered the issues in this case moot and academic.
2. Whether the CA may order a permanent injunction in deciding a petition for certiorari against the denial of an application for a preliminary injunction issued by the RTC.

RULING

1. Yes, the issues raised in the petition have been rendered moot and academic by the RTC’s December 2, 2011 Decision on the merits. A preliminary injunction is an ancillary and interlocutory remedy that cannot survive the main case. The RTC’s final judgment, which included a permanent injunction, superseded the interlocutory matters concerning the preliminary injunction. The Court held that the ancillary writ of preliminary injunction loses its force and effect after a decision in the main case.
2. No, the CA erred in ordering a permanent injunction. A permanent injunction can only be granted after a trial on the merits and forms part of the final judgment. A petition for certiorari under Rule 65, which assails an interlocutory order (the denial of a preliminary injunction), is not the proper vehicle for obtaining a permanent injunction. The CA’s role in such a petition is limited to determining whether the RTC committed grave abuse of discretion in denying the preliminary injunction, not to adjudicate the main case and grant final relief. The proper recourse for respondent, if aggrieved by the RTC’s denial of the preliminary injunction, was to proceed to trial on the merits, which it did, resulting in the RTC’s final decision.