G.R. No. L-75067 February 26, 1988
PUMA SPORTSCHUHFABRIKEN RUDOLF DASSLER, K.G., petitioner, vs. THE INTERMEDIATE APPELLATE COURT and MIL-ORO MANUFACTURING CORPORATION, respondents.

FACTS

Petitioner Puma, a German corporation, filed a complaint for trademark infringement and a prayer for a preliminary injunction against respondent Mil-Oro Manufacturing Corporation before the Regional Trial Court (RTC) of Makati. Prior to this civil suit, three inter partes cases involving the same parties and the trademark “PUMA” for socks and belts were already pending before the Philippine Patent Office. These cases included an opposition to registration, a petition for cancellation of Puma’s registration, and a petition for cancellation of Mil-Oro’s registration.
The RTC issued a temporary restraining order and later denied Mil-Oro’s motion to dismiss, which was grounded on litis pendentia and Puma’s alleged lack of legal capacity to sue. The RTC also granted the writ of preliminary injunction. The Intermediate Appellate Court reversed the RTC, ordering the dismissal of the civil case. It held that litis pendentia was present because the issue of rightful trademark ownership was common to both the civil case and the Patent Office proceedings, risking conflicting decisions. It also ruled that Puma lacked legal capacity to sue under the trademark law’s reciprocity exception, as its complaint failed to allege such reciprocity.

ISSUE

The primary issues are: (1) whether the civil case for infringement should be dismissed on the ground of litis pendentia due to pending administrative cases before the Patent Office; and (2) whether the petitioner foreign corporation has the legal capacity to sue.

RULING

The Supreme Court reversed the Appellate Court and reinstated the RTC’s order. On litis pendentia, the Court held that the requisites were not met. While the parties were identical, the rights asserted and the reliefs prayed for were not. The action before the Patent Office was a suit for the cancellation of trademark registration, which is a special proceeding. In contrast, the civil case before the RTC was an action for infringement, which is a suit for damages and injunction to prevent unauthorized use. These are distinct causes of action. An administrative case for cancellation does not preclude a judicial action for infringement, as they involve different substantive rights and remedies.
Regarding legal capacity to sue, the Supreme Court found that the Appellate Court erred. Puma was suing under Section 21-A of the Trademark Law, an exception for foreign corporations to sue for infringement without a local license, provided its country grants reciprocal rights to Philippine corporations. The Court ruled that the existence of reciprocity is a matter of evidence, not of allegation. A motion to dismiss based on lack of capacity to sue must show that the plaintiff’s lack of capacity is apparent from the complaint itself. Since Puma’s complaint did not contain admissions negating reciprocity, the ground was improperly invoked in a motion to dismiss. The Court also emphasized the need for vigilance against trademark piracy to protect the public and uphold international commitments.