GR 233073; (February, 2018) (Digest)
G.R. No. 233073 February 14, 2018
L.C. BIG MAK BURGER, INC., Petitioner vs. McDONALD’S CORPORATION, Respondent
FACTS
This case originated from a final and executory judgment in a trademark infringement and unfair competition case (Civil Case No. 90-1507), where petitioner L.C. Big Mak Burger, Inc. was perpetually enjoined from using the name “Big Mak” for its fast-food business. The Supreme Court reinstated the trial court’s decision in 2004. In 2008, respondent McDonald’s Corporation filed a Petition for Contempt (Spec. Pro. No. 08-370) before the RTC of Makati, Branch 59 (Contempt Court), alleging that petitioner continued to violate the injunction by using “Big Mak.” Petitioner countered that it was only using its registered corporate name “L.C. Big Mak Burger, Inc.” on its stalls, having ceased selling “Big Mak” burgers, and had even rebranded some outlets to “Supermak.” The Contempt Court dismissed the petition and awarded damages to petitioner.
ISSUE
Whether the Court of Appeals erred in reversing the Contempt Court and finding petitioner guilty of indirect contempt for willfully disobeying the final judgment in the infringement case.
RULING
The Supreme Court granted the petition, reversing the CA and reinstating the Contempt Court’s dismissal. The legal logic centered on the requirement for indirect contempt that the violation must be willful or intentional. The Court found no such willful disregard. The injunction prohibited the use of the mark “Big Mak,” not the corporate name “L.C. Big Mak Burger, Inc.,” which remained legally registered with the Securities and Exchange Commission (SEC). Petitioner’s use of its full corporate name was a legitimate exercise of a right under its SEC registration and was not the “colorable imitation” specifically enjoined. The Court emphasized that contempt power is preservative, not vindictive, and should be exercised cautiously. Since petitioner offered a plausible explanation—using its legal corporate name while having ceased the infringing mark—and demonstrated efforts to comply (e.g., rebranding to “Supermak”), bad faith or intentional defiance was not established. The absence of willful disobedience negated indirect contempt liability. Consequently, the CA’s finding of contempt was erroneous.