FACTS:

Tanduay Distillers, Inc. developed a new gin product called "Ginebra Kapitan" with a brand name and label designed to distinguish it from San Miguel's leading gin brand, "Ginebra San Miguel." Tanduay filed a trademark application for "Ginebra Kapitan" and obtained the necessary permits to manufacture and sell the product. San Miguel sent a letter demanding Tanduay to cease using the mark "Ginebra" and from any acts violating San Miguel's intellectual property rights. San Miguel filed a complaint for trademark infringement, unfair competition, and damages against Tanduay. The trial court denied Tanduay's motion to strike out hearsay affidavits and evidence.

San Miguel Corporation, the registered owner of the trademark "Ginebra San Miguel," filed a complaint against Tanduay for trademark infringement. The trial court issued a temporary restraining order (TRO) prohibiting Tanduay from manufacturing, selling, and advertising Ginebra Kapitan. Tanduay filed a petition for certiorari with the Court of Appeals (CA), which issued a TRO against the trial court's injunction order. The CA later dismissed Tanduay's petition and supplemental petition. Tanduay appealed to the Supreme Court. The trial court granted the application for a TRO and a writ of preliminary injunction, finding that San Miguel has a clear and existing right to be protected.

San Miguel Corporation (San Miguel) is the registered owner of the trademark "Ginebra San Miguel" for its gin products. Tanduay Distillers, Inc. (Tanduay) also produces gin and has been using the trademark "Ginebra Kapitan" for its own product. San Miguel filed a complaint against Tanduay for trademark infringement and unfair competition, alleging that Tanduay's use of the word "Ginebra" in its trademark was likely to cause confusion and deceive the public into thinking that Tanduay's product was affiliated with or produced by San Miguel. The trial court concluded that Tanduay's use of the word "Ginebra" in its trademark was a deliberate attempt to ride on San Miguel's popularity and established goodwill. The court also found that the dominant feature in both trademarks was the word "Ginebra," which could cause confusion among consumers. Thus, the trial court granted a temporary restraining order (TRO) and a writ of preliminary injunction in favor of San Miguel.

ISSUES:

1. • Whether San Miguel is entitled to the writ of preliminary injunction granted by the trial court.
2. • Whether San Miguel has a clear and unmistakable right to the exclusive use of the mark "Ginebra."
3. • Whether the requisites for the valid issuance of a writ of preliminary injunction were established.

4. Can the word "Ginebra" be appropriated and registered as a trademark under Section 123.1(j) in relation to Section 123.2 of the Intellectual Property Code?

5. Does San Miguel have an exclusive right to use the word "Ginebra" based on its registration of composite marks that include the word "Ginebra"?

6. Does San Miguel have a clear and unmistakable right to use the word "Ginebra" as a dominant feature of its trademark?

7. Whether the word "Ginebra" is a generic mark that is incapable of appropriation by gin manufacturers.

8. Whether San Miguel's exclusive right to the word "Ginebra" is still in dispute and can only be resolved after a full-blown trial.

9. Whether the trial court's granting of the writ of preliminary injunction in favor of San Miguel constitutes grave abuse of discretion.

10. Whether or not a writ of preliminary injunction should be issued in relation to complaints for infringement and unfair competition.

11. Whether or not the petitioner has proven the probability of irreparable injury and damages incapable of pecuniary estimation.

RULING:

1. The Court held that San Miguel is entitled to the writ of preliminary injunction granted by the trial court. San Miguel has a clear and unmistakable right to the exclusive use of the mark "Ginebra." The requisites for the valid issuance of a writ of preliminary injunction were established.

2. The Court of Appeals erred in ruling that San Miguel has sufficiently established its right to prior use and registration of the word "Ginebra" as a dominant feature of its trademark. The issue in the main case is whether San Miguel has the right to prevent other businesses from using the word "Ginebra." It is not clear whether "Ginebra" is the dominant feature of the trademarks, whether it is a generic word that cannot be appropriated, or whether it is merely descriptive and can be appropriated based on acquired secondary meaning. Therefore, the trial court must determine whether the word "Ginebra" can acquire a secondary meaning for gin products to prohibit its use by other gin manufacturers or sellers.

3. The Court ruled in Asia Brewery, Inc. v. Court of Appeals that "pale pilsen" are generic words and incapable of appropriation by any beer manufacturer. Thus, if the word "Ginebra" is also proven to be generic, it cannot be exclusively used by San Miguel or any other gin manufacturer.

4. San Miguel's exclusive right to the word "Ginebra" is still in dispute and can only be determined after a full-blown trial. The trial court's grant of the writ of preliminary injunction in favor of San Miguel, without a clear and unmistakable right, constitutes grave abuse of discretion amounting to lack of jurisdiction.

5. The issuance of the writ of preliminary injunction effectively disposes of the case on the merits without a full-blown trial, which is not proper. Therefore, the trial court's grant of the injunction constitutes grave abuse of discretion.

6. The Supreme Court held that a writ of preliminary injunction should not be issued when an action for damages would adequately compensate the injuries caused. The relief of injunction is based on the probability of irreparable injury, inadequacy of pecuniary compensation, and the prevention of the multiplicity of suits. In this case, the petitioner failed to prove the probability of irreparable injury which it will suffer if the sale of the disputed product is not enjoined.

7. The petitioner presented evidence that it had invested significant amounts to establish goodwill and reputation in its mark over a period of 170 years. However, the petitioner failed to submit proof that the damages it claims are irreparable and incapable of pecuniary estimation. Without such proof, the petitioner's claim cannot be the basis for a valid writ of preliminary injunction.

PRINCIPLES:

• A preliminary injunction is a provisional remedy for the protection of substantive rights and interests.

• Before an injunctive writ is issued, the requisites of the existence of a right to be protected and the acts against which the injunction is directed being violative of the right must be present.

• The movant for a preliminary injunction has the burden of proving that the invasion of the right sought to be protected is material and substantial, the right of the movant is clear and unmistakable, and there is an urgent and paramount necessity for the writ to prevent serious damage.

• A mark can be appropriated and registered as a trademark even if it is a generic word, as long as it meets the requirements under the Intellectual Property Code.

• The issuance of a writ of preliminary injunction is addressed to the discretion of the trial court, to be exercised based on the grounds and in the manner provided by law. (Levi Strauss & Co. v. Clinton Apparelle, Inc.)

• Injunction is the strong arm of equity that should be issued with caution and deliberation, only in cases of great injury where there is no commensurate remedy in damages.

• The registration of composite marks that include a disclaimed word does not necessarily confer exclusive rights over the disclaimed word itself.

• The determination of whether a mark has acquired a secondary meaning and is entitled to protection depends on the specific facts and circumstances of each case.

• A mark cannot be registered if it consists exclusively of signs that are generic for the goods or services that they seek to identify (Section 123.1(h) of the IP Code).

• In the absence of proof of a legal right and the injury sustained by the movant, the trial court's order granting the issuance of an injunctive writ may be set aside for grave abuse of discretion (Ong Ching Kian Chuan v. Court of Appeals).

• The grant of a writ of preliminary injunction should be exercised with prudence and extreme caution, as an injunction is a limitation upon the freedom of action of the defendant and should not be granted lightly (Manila International Airport Authority v. Court of Appeals).

• Courts should avoid issuing a writ of preliminary injunction that disposes of the main case without trial (Rivas v. Securities and Exchange Commission).

• Irreparable injury refers to the damage or injury that cannot be adequately compensated for in damages or cannot be measured with reasonable accuracy (Section 156.1 of the IP Code).

• A writ of preliminary injunction should not be issued when an action for damages would adequately compensate the injuries caused.

• The jurisdiction to issue a writ of injunction rests on the probability of irreparable injury, inadequacy of pecuniary compensation, and the prevention of the multiplicity of suits.

• The party seeking a writ of preliminary injunction must prove the probability of irreparable injury and damages that are incapable of pecuniary estimation.