Unilever Philippines (PRC), Inc. vs. Court of Appeals

A preliminary injunction may issue to restrain the airing of television commercials that allegedly infringe an unregistered copyright, because under Section 2 of PD 49 copyright subsists from the moment of creation and protection is not contingent on registration or any formality; the trial court’s tentative determination of the right does not prejudge the main case.

Unilever Philippines (PRC), Inc. and Procter and Gamble Philippines, Inc. (P&GP) are competing manufacturers and marketers of laundry products. P&GP is a subsidiary of Procter and Gamble Company, for which the “double tug” or “tac-tac” key visual was conceptualized or created. The dispute concerns the use of advertising visuals and the availability of preliminary injunctive relief under Rule 58 and Presidential Decree No. 49.

Procter and Gamble Philippines, Inc. (P&GP) and Unilever Philippines (PRC), Inc. are competitors in the Philippine market for laundry products. P&GP alleged that as early as 1982, a P&G subsidiary in Italy used a key visual in the advertisement of its laundry detergent and bleaching products. The key visual, known as the “double-tug” or “tac-tac” demonstration, showed fabric being held by both hands and stretched sideways. It was conceptualized for P&G by the advertising agency Milano and Gray of Italy in 1982 and was used that same year in an advertisement entitled “All aperto” to demonstrate the effect on fabrics of “Ace,” a liquid bleach. Since then, P&G used the “tac-tac” key visual in the advertisement of its products, including in 1986 in Italy in a television commercial for “Ace” entitled “Kite.” P&G also used the same distinctive “tac-tac” key visual to local consumers in the Philippines.

According to P&GP, Unilever on July 24, 1993 started airing a 60-second television commercial (TVC) for its “Breeze Powerwhite” laundry product called “Porky.” P&GP alleged that the “Porky” TVC included a stretching visual presentation and sound effects almost identical or substantially similar to P&GP’s “tac-tac” key visual. P&GP claimed that Unilever thereby substantially and materially imitated its key visual and blatantly disregarded its intellectual property rights.

On July 15, 1994, P&GP aired in the Philippines the same “Kite” television advertisement it had used in Italy in 1986, dubbing the Italian language with Filipino for the same product, “Ace” bleaching liquid, which P&GP now markets in the Philippines. On August 1, 1994, Unilever filed a complaint with the Advertising Board of the Philippines to prevent P&GP from airing the “Kite” television advertisement.

On August 24, 1994, P&GP filed a complaint for injunction with damages and a prayer for a temporary restraining order and/or writ of preliminary injunction against Unilever. P&GP alleged the foregoing facts and sought to restrain Unilever from airing the allegedly infringing TV commercials. The trial court issued a temporary restraining order on August 26, 1994 and, after hearings and exchanges of pleadings, ordered the issuance of a writ of preliminary injunction on September 16, 1994, fixing a bond of P100,000. P&GP received the order on September 19, 1994 and filed the required bond issued by Prudential Guarantee and Assurance, Inc. on the same date. Unilever challenged the order before the Court of Appeals.

• Clear and Unmistakable Right: Petitioner alleged that the writ of preliminary injunction was issued by the trial court, and affirmed by the Court of Appeals, without any evidence of private respondent’s clear and unmistakable right to the writ.
• Prejudgment of Main Case: Petitioner contended that the preliminary injunction issued against it already disposed of the main case without trial, thus denying petitioner any opportunity to present evidence on its behalf.
• Copyright Registration: Petitioner submitted that P&GP is not entitled to the relief demanded because petitioner has Certificates of Copyright Registration for its advertisements while P&GP has none with respect to its “double-tug” or “tac-tac” key visual; P&GP did not register with the National Library the very TV commercials it claims were infringed.
• Jurisdiction / Non-Party Relief: Petitioner assigned as error that the trial court issued the order according relief to a non-party in Civil Case No. 94-2434 without jurisdiction.
• Due Process / Cross-Examination: Petitioner assigned as error that the trial court deprived it of substantive and procedural due process and foreclosed petitioner’s right and opportunity to cross-examine P&GP’s witnesses Abad and Herbosa.
• Grave Abuse / Rule 58: Petitioner assigned that the trial court acted without or in excess of jurisdiction and with grave abuse of discretion in issuing the writ of preliminary injunction in violation of the rules on evidence and procedure, particularly Section 3(a), Rule 58 of the Revised Rules of Court, and prevailing jurisprudence.

• Intellectual Property Rights: Respondent’s verified complaint alleged that it had used the “double-tug” or “tac-tac” key visual since 1982 and in the Philippines, and that Unilever’s “Porky” TVC substantially and materially imitated it in blatant disregard of P&GP’s intellectual property rights.
• Injunctive Relief: Respondent sought a writ of preliminary injunction to restrain Unilever from airing the allegedly infringing TV commercials, alleging that the airing of TV commercials is necessarily of limited duration and that irreparable damage could result without temporary relief.
• Subsidiary’s Protection: Respondent alleged that it is a subsidiary of Procter and Gamble Company, for which the “double-tug” or “tac-tac” key visual was conceptualized or created, and that in that capacity it used the advertisement in the Philippines to promote its products.

• Clear and Unmistakable Right: Whether the Court of Appeals erred in affirming the issuance of the writ of preliminary injunction despite the alleged absence of evidence of P&GP’s clear and unmistakable right.
• Copyright Registration: Whether P&GP is entitled to protection for its “double-tug” or “tac-tac” key visual despite not having registered it with the National Library, while Unilever holds certificates of copyright registration for its advertisements.
• Prejudgment of Main Case: Whether the issuance of the preliminary injunction effectively disposed of the main case without trial and prejudged its merits.
• Non-Party Relief / Jurisdiction: Whether the trial court issued the writ according relief to a non-party in Civil Case No. 94-2434 without jurisdiction.
• Due Process / Cross-Examination: Whether petitioner was deprived of substantive and procedural due process, including the opportunity to cross-examine P&GP’s witnesses Abad and Herbosa.
• Procedure under Rule 58: Whether the trial court followed the procedure for issuing a preliminary injunction under Section 5, Rule 58, as amended by BP 224, and Paragraph A(8) of the Interim Rules.
• Grave Abuse of Discretion: Whether the trial court acted with grave abuse of discretion in issuing the writ.

• Clear and Unmistakable Right: No. A preliminary injunction requires only that the verified complaint show a probable entitlement to the relief demanded; the trial court need not make a final determination of the right.
• Copyright Registration: No. Under Section 2 of PD 49, copyright subsists from the moment of creation and is not contingent on registration or any formality; P&GP’s lack of registration did not bar injunctive relief.
• Prejudgment of Main Case: No. The determination for preliminary injunction is tentative and does not pass on the merits; the writ may be dissolved during or after trial if the plaintiff is not entitled.
• Non-Party Relief / Jurisdiction: No. P&GP is a subsidiary of Procter and Gamble Company, for which the key visual was conceptualized or created, and as such is within the protective mantle of Section 6, PD 49.
• Due Process / Cross-Examination: No. Petitioner was given the opportunity to oppose the application, filed pleadings, and was heard; it was not deprived of its day in court.
• Procedure under Rule 58: Yes. The trial court followed Section 5, Rule 58, as amended by BP 224, and Paragraph A(8) of the Interim Rules by setting hearings, requiring show cause, and allowing opposition.
• Grave Abuse of Discretion: No. The issuance of a preliminary injunction rests on the court’s discretion and is generally not interfered with absent manifest abuse; no such abuse was shown, especially given the urgency of TV commercials.

• Clear and Unmistakable Right: The provisional remedy of preliminary injunction will not issue unless the verified complaint shows that the plaintiff is probably entitled to the relief demanded, which consists in whole or in part in restraining the commission or continuance of the acts complained of. The court must make a tentative determination whether the right sought to be protected exists and whether the act against which the writ is directed violates that right. The Court of Appeals correctly found that P&GP’s verified complaint, taking its material allegations in the context of PD 49, sufficiently showed at least a probable right for purposes of preliminary injunction. The writ is based on initial and incomplete evidence and does not require the full proof needed for final judgment.
• Copyright Registration: Section 2 of PD 49 provides that copyright for a work or intellectual creation subsists from the moment of its creation; the creator acquires copyright upon creation. The exercise and enjoyment of copyright, and the protection given by law, are not contingent or dependent on any formality or registration. Thus, P&GP’s failure to register its “double-tug” or “tac-tac” key visual with the National Library did not preclude protection for purposes of preliminary injunction. The Court rejected petitioner’s argument that its own certificates of copyright registration for its advertisements entitled it to air the allegedly similar commercials.
• Prejudgment of Main Case: The trial court’s determination of the propriety of the writ is tentative in nature and does not pass upon the merits of the main case, which cannot be done until after a full-blown hearing. The writ may be dissolved during or after trial if the court finds that the plaintiff was not entitled to it. The Court of Appeals correctly held that the trial court did not prejudge the merits; the main case still had to be resolved by the trial court.
• Non-Party Relief / Jurisdiction: P&GP alleged in its complaint that it is a subsidiary of Procter and Gamble Company, for which the “double-tug” or “tac-tac” key visual was conceptualized or created. In that capacity, P&GP used the advertisement in the Philippines to promote its products. As such subsidiary, P&GP is within the protective mantle of Section 6, PD 49. The objection that the writ accorded relief to a non-party was therefore unmeritorious.
• Due Process / Cross-Examination: The record showed that the trial court set the incident for hearing on September 2, 1994, at which petitioner was ordered to show cause why the writ should not issue. Petitioner filed an opposition to the application; the incident was again set for hearing on September 9, 1994, during which the parties made manifestations; and petitioner subsequently filed a reply to P&GP’s rejoinder to its opposition. Under these circumstances, petitioner was given its day in court in the matter of the preliminary injunctive relief. The Court found no deprivation of substantive or procedural due process.
• Procedure under Rule 58: The trial court followed the procedure provided in Section 5, Rule 58, as amended by BP 224, and Paragraph A(8) of the Interim Rules. It set the incident for hearing, required petitioner to show cause, allowed petitioner to file an opposition, held further hearing, and received subsequent pleadings. The procedure was therefore in order.
• Grave Abuse of Discretion: The issuance of a preliminary injunction rests entirely on the discretion of the court and is generally not interfered with except in cases of manifest abuse. There was extreme urgency for the trial court to act because the airing of TV commercials is necessarily of limited duration; without temporary relief, any permanent injunction P&GP might obtain after final adjudication could be illusory if the advertisements were no longer aired. The Court noted that the “Kite” TV advertisement was no longer aired more than 10 years after the injunction was granted. Petitioner was given all opportunity to oppose the application but failed to convince the court why the injunction should not issue. No grave abuse of discretion was shown.

• Copyright subsists from creation; registration is not a condition for protection under PD 49 — Under Section 2 of PD 49, copyright for a work or intellectual creation subsists from the moment of its creation, and the creator acquires copyright upon creation. The exercise and enjoyment of copyright, and the protection given by law, are not contingent or dependent on any formality or registration. Applied: P&GP’s unregistered “double-tug” or “tac-tac” key visual was entitled to protection for purposes of preliminary injunction.
• Preliminary injunction requires probable right, not full proof — A preliminary injunction will not issue unless the verified complaint shows that the plaintiff is probably entitled to the relief demanded, which consists in whole or in part in restraining the commission or continuance of the acts complained of. The court makes only a tentative determination of the existence of the right and whether the act violates it. Applied: P&GP’s verified complaint sufficiently alleged a probable right under PD 49.
• Preliminary injunction does not prejudge the merits — The determination of the propriety of a preliminary injunction is tentative; the writ may be dissolved during or after trial if the plaintiff is not entitled to it. The merits cannot be passed upon until after a full-blown hearing. Applied: The trial court’s issuance of the writ did not dispose of the main case.
• Preliminary injunction preserves status quo and addresses urgency/irreparable damage — The sole objective of a writ of preliminary injunction is to preserve the status quo until the merits of the case can be heard fully. It is resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard compensation. Applied: TV commercials are aired for a limited period; without temporary relief, a permanent injunction could be illusory.
• Discretion in issuing preliminary injunction; grave abuse standard — The issuance of a preliminary injunction rests entirely on the discretion of the court and is generally not interfered with except in cases of manifest abuse. No grave abuse of discretion can be attributed where the party was not deprived of its day in court and was heard on its arguments and defenses. Applied: Petitioner was heard and failed to show manifest abuse.
• Subsidiary’s standing under Section 6, PD 49 — A subsidiary of the company for which a key visual was conceptualized or created, and which used the advertisement in the Philippines, is within the protective mantle of Section 6 of PD 49. Applied: P&GP, as subsidiary of Procter and Gamble Company, could seek protection for the key visual.

• "Section 2 of PD 49 stipulates that the copyright for a work or intellectual creation subsists from the moment of its creation. Accordingly, the creator acquires copyright for his work right upon its creation.… Contrary to petitioner’s contention, the intellectual creator’s exercise and enjoyment of copyright for his work and the protection given by law to him is not contingent or dependent on any formality or registration." — This passage states the ratio decidendi on copyright: protection subsists from creation and does not require registration, which defeated petitioner’s argument that P&GP’s lack of registration barred injunctive relief.
• "The sole objective of a writ of preliminary injunction is to preserve the status quo until the merits of the case can be heard fully." — This defines the purpose of preliminary injunction and supports the holding that the trial court’s issuance of the writ did not dispose of the main case.
• "A writ of preliminary injunction is generally based solely on initial and incomplete evidence." — This explains why the trial court could issue the writ without the full evidence required for final judgment and why its determination was only tentative.
• "There was of course extreme urgency for the court a quo to act on plaintiff’s application for preliminary injunction. The airing of TV commercials is necessarily of limited duration only. Without such temporary relief, any permanent injunction against the infringing TV advertisements of which P&GP may possibly succeed in getting after the main case is finally adjudicated could be illusory if by then such advertisements are no longer used or aired by petitioner." — This passage supplies the urgency and irreparable-damage rationale for the preliminary injunction, given the limited broadcast life of television commercials.

• Santos vs. Court of Appeals, G.R. No. 61218, 23 September 1992, 214 SCRA 162 — Cited for the rule that no grave abuse of discretion can be attributed to a judge or body issuing a writ of preliminary injunction where the party has not been deprived of its day in court, as it was heard and exhaustively presented all its arguments and defenses.
• Republic vs. Court of Appeals, 383 Phil. 398 (2000) — Cited for the principle that preliminary injunction is a provisional remedy intended to provide protection to parties for the preservation of their rights or interests during the pendency of the principal action.
• Unionbank of the Philippines vs. Court of Appeals, 370 Phil. 837 (1999) — Cited for the rule that injunction is resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard compensation.
• Heirs of Joaquin Asuncion vs. Gervacio, 363 Phil. 666 (1999) — Cited for the rule that the sole objective of a writ of preliminary injunction is to preserve the status quo until the merits of the case can be heard fully.
• La Vista Association, Inc. vs. Court of Appeals, 344 Phil. 30 (1997) — Cited for the rule that a writ of preliminary injunction is generally based solely on initial and incomplete evidence.
• Reyes vs. Court of Appeals, 378 Phil. 984 (1999) — Cited for the rule that the issuance of a preliminary injunction rests entirely on the discretion of the court and is generally not interfered with except in cases of manifest abuse.

• Section 2, Presidential Decree No. 49 — Provides that copyright for a work or intellectual creation subsists from the moment of its creation, and the creator acquires copyright upon creation. The Court applied this to hold that P&GP’s unregistered “double-tug” or “tac-tac” key visual was protected and that registration was not a condition for protection.
• Section 6, Presidential Decree No. 49 — Extends the protective mantle of the statute to P&GP as a subsidiary of Procter and Gamble Company, for which the key visual was conceptualized or created, and which used the advertisement in the Philippines.
• Section 1, Rule 58, Rules of Court — Defines preliminary injunction as an order granted at any stage of an action or proceeding prior to judgment or final order, requiring a party or a court, agency or a person to refrain from a particular act or acts, or to perform a particular act or acts. The Court used this definition to characterize the writ issued against Unilever.
• Section 5, Rule 58, Rules of Court, as amended by Batas Pambansa Blg. 224 — Governs the procedure for issuing a preliminary injunction. The Court found that the trial court followed this procedure by setting hearings, requiring petitioner to show cause, and allowing petitioner to file an opposition and subsequent pleadings.
• Paragraph A(8), Interim Rules — Cited together with Section 5, Rule 58, as the procedural basis followed by the trial court in issuing the writ of preliminary injunction.

Reynato S. Puno (Chairperson), Angelina Sandoval-Gutierrez, and Adolfo S. Azcuna concurred. Cancio C. Garcia took no part.