Supreme Court allows sale of Lucio Tan's gin product 'Ginebra Kapitan'

MANILA, Philippines - The Supreme Court (SC) yesterday allowed Lucio Tan’s Tanduay Distillers Inc. (TDI), one of the country’s leading liquor companies, to continue manufacturing and selling its gin product “Ginebra Kapitan” that was earlier stopped by a regional trial court in Mandaluyong City.

In a 23-page decision, the first division of the High Court reversed a decision of the Court of Appeals and nullified the writ of preliminary injunction issued by Mandaluyong RTC Branch 214 in October 2003, which stopped the production and distribution of the product of TDI upon complaint of Ginebra San Miguel, Inc. (GSMI), an alcoholic beverage company owned by businessman Eduardo Cojuangco Jr.

Although the High Court lifted the injunction, it also ordered the lower court to resolve expeditiously the infringement case filed by GSMI.

The SC ruled that both CA and the trial court erred in stopping the sales of “Ginebra Kapitan” pending resolution of the trademark infringement suit filed by GSMI against TDI.

It stressed that the lower court committed grave abuse of discretion in issuing a writ of preliminary injunction “despite the lack of a clear and unmistakable right” on the part of GSMI.

The Court noted that it is not yet clear whether San Miguel has the right to prevent other business entities from using the word “Ginebra.”

Specifically, the SC ordered the trial court to determine whether the word “Ginebra” is a generic mark that is incapable of appropriation by gin manufacturers.

“In this case, a cloud exists over San Miguel’s exclusive right relating to the word ‘Ginebra.’ San Miguel’s claim to the exclusive use of the word ‘Ginebra’ is clearly still in dispute because of Tanduay’s claim that it has, as others have, also registered the word ‘Ginebra’ for its gin products. This issue can be resolved only after a full-blown trial,” the Court stressed in the ruling penned by Associate Justice Antonio Carpio.

The Court affirmed the argument of TDI that the CA has prejudged the merits of the case when it upheld the issuance of the writ of preliminary injunction by the Mandaluyong court since nothing is left to be decided by the trial court except the amount of damages to be awarded to San Miguel.

“We believe that the issued writ of preliminary injunction, if allowed, disposes of the case on the merits as it effectively enjoins the use of the word ‘Ginebra’ without the benefit of a full-blown trial,” the SC noted.

In 2002, Tanduay developed a new gin product which it called “Ginebra Kapitan” with the representation of a revolutionary “Kapitan” on horseback as the dominant feature of its label.

Tanduay, which has been engaged in the liquor business since 1854, pointed out that the label design of its new gin product in terms of color scheme, size and arrangement of text, and other label features were precisely selected to distinguish it from the leading gin brand in the Philippine market, which is Ginebra San Miguel.

It also noted that “Ginebra Kapitan” bottle uses a re-sealable twist cap to distinguish it from Ginebra San Miguel and other local gin products with bottles which use the crow cap.

After filing the trademark application for “Ginebra Kapitan” and securing a permit to manufacture and sell the same, Tanduay started selling the new gin products in Northern and Southern Luzon and in Metro Manila in 2003.

On Aug. 13, 2003, TDI received a letter from San Miguel directing it to immediately cease and desist from using the mark “Ginebra.”

Several days after, GSMI filed a complaint for trademark infringement before the trial court.