Eriks Pte., Ltd. vs. Court of Appeals; G.R. No. 118843; Co., Inc. vs.
Inc. vs. Mangalima, The true test, however, seems to
February 6, 1997
Prepared by: Kathrina De Castro
DOCTRINE
By securing a license, a foreign entity would be giving
assurance that it will abide by the decisions of our courts,
even if adverse to it.
FACTS
Petitioner Eriks Pte., Ltd., a non-resident foreign
corporation, duly organized and existing under the laws of
Singapore, is engaged in manufacturing and sale of
elements used in sealing pumps, valves and pipes for
industrial purposes, valves and control equipment used for
industrial fluid control and PVC pipes and fittings for
industrial uses. The petitioner corporation is not licensed
to do business in the Philippines and not engaged and is
suing on an isolated transaction for which it has capacity
to sue. On various dates, Private respondent Delfin
Enriquez, Jr., doing business under Delrene EB Controls
Center and/or EB Karmine Commercial, ordered and
received from petitioner various materials and such was
delivered via airfreight. The transfers of goods were
perfected in Singapore, for private respondent’s account,
F.O.B. Singapore, with a 90day credit term. Upon demands
made by petitioner, private respondents failed and refused
to settle its account. Petitioner then filed a complaint with
RTC for the collection of sum of money plus interest and
damages. Private respondent move to dismiss the
complaint on the grounds that petitioner corporation had
no legal capacity to sue.
The Trial court dismissed the action on the ground that
petitioner is a foreign corporation doing business in the
Philippines without a license. On appeal, the CA affirmed
said order as it deemed the series of transactions between
Petitioner Corporation and private respondent not to be
an isolated or casual transaction. The CA also found
petitioner to be without legal capacity to sue. Hence,
petition to the Supreme Court.
ISSUES
1. Whether petitioner’s business with private
respondent may be treated as isolated
transactions.
2. Whether Petitioner Corporation may maintain an
action in Philippine courts considering that it has
no license to do business in the country.
HELD/RULING
1. NO, the Supreme Court agrees to the ruling of the lower
courts that the business made by petitioner was not an
isolated transaction. The court explained that base on the
factual evidence presented, more than the sheer number
of transactions entered into, a clear and unmistakable
intention on the part of petitioner to continue the body of
its business in the Philippines is more than apparent.
Further, its grant and extension of 90-day credit terms to
private respondent for every purchase made, unarguably
shows an intention to continue transacting with private
respondent, since in the usual course of commercial
transactions, credit is extended only to customers in good
standing or to those on whom there is an intention to
maintain long-term relationship The court further ruled
that petitioner corporation was indeed doing business in
the country. The court cited the case of The Mentholatum
be whether the foreign corporation is continuing the body
or substance of the business or enterprise for which it was
organized or whether it has substantially retired from it
and turned it over to another. The Court holds that the
series of transactions in question could not have been
isolated or casual transactions. What is determinative of
“doing business” is not really the number or the quantity
of the transactions, but more importantly, the intention of
an entity to continue the body of its business in the
country. The number and quantity are merely evidence of
such intention.
2. NO, the court ruled that petitioner is incapacitated to
maintain the action. The legislative never intended to bar
court access by a foreign corporation which is doing an
isolated business in the country. Neither had it intended to
shield debtors from their obligations. However, it cannot
allow foreign corporations which conduct regular business
any access to courts without the fulfilment by such
corporations of the necessary requisites to be subjected to
our government’s regulation and authority. By securing a
license, the foreign entity would be giving assurance that it
will abide by the decisions of our courts, even if adverse to
it. Since, it was clear that petitioner is doing regular
business in the country it is necessary to obtain license,
without such, it is not allowed to maintain suit against
private respondent.
REMEDY: The foreign corporation can acquire license and
may still file new action against private respondent. The
decision of the court is not res judicata.
HUTCHISON PORTS PHILIPPINES LIMITED v. SUBIC BAY
METROPOLITAN AUTHORITY
G.R. No. 131367 August 31, 2000
FACTS OF THE CASE
The Subic Bay Metropolitan Authority (or SBMA)
advertised in leading national daily newspapers and in one
international publication, an invitation offering to the
private sector the opportunity to develop and operate a
modern marine container terminal within the Subic Bay
Freeport Zone. Out of seven bidders who responded to the
published invitation, three were declared by the SBMA as
qualified bidders after passing the pre-qualification
evaluation conducted by the SBMA’s Technical Evaluation
Committee (or SBMA-TEC). Among these is the petitioner.
Thereafter, the services of three (3) international
consultants recommended by the World Bank for their
expertise were hired by SBMA to evaluate the business
plans submitted by each of the bidders, and to ensure that
there would be a transparent and comprehensive review
of the submitted bids. The SBMA also hired the firm of
Davis, Langdon and Seah Philippines, Inc. to assist in the
evaluation of the bids and in the negotiation process after
the winning bidder is chosen. All the consultants, after
such review and evaluation unanimously concluded that
HPPL’s Business Plan was “far superior to that of the two
other bidders.”
However, even before the sealed envelopes containing the
bidders’ proposed royalty fees could be opened at the
appointed time and place, RPSI formally protested that
ICTSI is legally barred from operating a second port in the
Philippines based on Executive Order No. 212 and
Department of Transportation and Communication (DOTC)
Order 95-863.
ISSUE
 Whether the petitioner HPPL has the legal capacity to
seek redress from the Court.
RULING
Yes. Admittedly, petitioner HPPL is a foreign corporation,
organized and existing under the laws of the British Virgin
Islands. While the actual bidder was a consortium
composed of petitioner, and two other corporations,
namely, Guoco Holdings (Phils.) Inc. and Unicol
Management Services, Inc., it is only petitioner HPPL that
has brought the controversy before the Court, arguing that
it is suing only on an isolated transaction to evade the legal
requirement that foreign corporations must be licensed to
do business in the Philippines to be able to file and
prosecute an action before Philippines courts.
There is no general rule or governing principle laid down
as to what constitutes “doing” or “engaging in” or
“transacting” business in the Philippines. Each case must
be judged in the light of its peculiar circumstances.Thus, it
has often been held that a single act or transaction may be
considered as “doing business” when a corporation
performs acts for which it was created or exercises some
of the functions for which it was organized. The amount or
volume of the business is of no moment, for even a
singular act cannot be merely incidental or casual if it
indicates the foreign corporation’s intention to do
business.
Participating in the bidding process constitutes “doing
business” because it shows the foreign corporation’s
intention to engage in business here. The bidding for the
concession contract is but an exercise of the corporation’s
reason for creation or existence. Thus, it has been held
that “a foreign company invited to bid for IBRD and ADB
international projects in the Philippines will be considered
as doing business in the Philippines for which a license is
required.”
MR HOLDINGS, LTD., petitioner, vs. SHERIFF CARLOS P.
BAJAR, SHERIFF FERDINAND M. JANDUSAY, SOLIDBANK
CORPORATION, AND MARCOPPER MINING
CORPORATION, respondents.
FACTS:
On 04 November 1992, a Principal Loan Agreement and
Complementary Loan Agreement, was executed between
Asian Development Bank (ADB), a multilateral
development finance institution, and Marcopper Mining
Corporation (Marcopper) to extend a loan to the latter in
the aggregate amount of US$40,000,000.00 to finance the
latter’s mining project at Sta. Cruz, Marinduque.
On even date, ADB and Placer Dome, Inc., (Placer Dome), a
foreign corporation which owns 40% of Marcopper,
executed a Support and Standby Credit Agreement
whereby the latter agreed to provide Marcopper with cash
flow support for the payment of its obligations to ADB.
To secure the loan, Marcopper executed in favor of ADB
a Deed of Real Estate and Chattel Mortgage dated
November 11, 1992, covering substantially all of its
(Marcoppers) properties and assets in Marinduque. It was
registered with the Register of Deeds on November 12,
1992.
When Marcopper defaulted in the payment of its loan
obligation, Placer Dome, in fulfilment of its undertaking
under the Support and Standby Credit Agreement, and
presumably to preserve its international credit standing,
agreed to have its subsidiary corporation, petitioner MR
Holding, Ltd., assumed Marcopper’s obligation to ADB in
the amount of US$ 18,453,450.02. Consequently, in an
Assignment Agreement dated March 20, 1997, ADB
assigned to petitioner all its rights, interests and
obligations under the principal and complementary loan
agreements, (Deed of Real Estate and Chattel Mortgage,
and Support and Standby Credit Agreement).
On December 8, 1997, Marcopper likewise executed
a Deed of Assignment in favor of petitioner. Under its
provisions, Marcopper assigns, transfers, cedes and
conveys to petitioner, its assigns and/or successors-in-
interest all of its (Marcoppers) properties, mining
equipment and facilities.
Meanwhile, it appeared that on May 7, 1997, Solidbank
Corporation (Solidbank) obtained a Partial Judgment
against Marcopper from the RTC, Branch 26, Manila.
Upon Solidbank’s motion, the RTC of Manila issued a writ
of execution pending appeal directing Carlos P. Bajar,
respondent sheriff, to require Marcopper to pay the sums
of money to satisfy the Partial Judgment. Thereafter,
respondent Bajar issued two notices of levy on
Marcoppers personal and real properties, and over all its
stocks of scrap iron and unserviceable mining equipment.
Together with sheriff Ferdinand M. Jandusay (also a
respondent) of the RTC, Branch 94, Boac, Marinduque,
respondent Bajar issued two notices setting the public
auction sale of the levied properties on August 27, 1998 at
the Marcopper mine site.
Having learned of the scheduled auction sale, petitioner
served an Affidavit of Third-Party Claim upon respondent
sheriffs on August 26, 1998, asserting its ownership over
all Marcoppers mining properties, equipment and facilities
by virtue of the Deed of Assignment.
Upon the denial of its Affidavit of Third-Party Claim by the
RTC of Manila, petitioner commenced with the RTC of
Boac, Marinduque, presided by Judge Leonardo P.
Ansaldo, a complaint for reivindication of properties, etc.,
with prayer for preliminary injunction and temporary
restraining order against respondents Solidbank,
Marcopper, and sheriffs Bajar and Jandusay.
On October 6, 1998, Judge Ansaldo
denied petitioners application for a writ of preliminary
injunction on the ground, among others, that petitioner
has no legal capacity to sue, it being a foreign corporation
doing business in the Philippines without license. This
decision was affirmed and sustained by the Court of
Appeals.
Petitioner contends that it has the legal capacity to sue
and seek redress from Philippine courts as it is a non-
resident foreign corporation not doing business in the
Philippines and suing on isolated transactions. But the
appellate court ruled otherwise, it stressed that while
petitioner may just be an assignee to the Deeds of
Assignment, it may still fall within the meaning of doing
business. Where a single act or transaction however is not
merely incidental or casual but indicates the foreign
corporations intention to do other business in the
Philippines, said single act or transaction constitutes doing
or engaging in or transacting business in the Philippines.
ISSUE: Whether or not Petitioner has legal capacity to sue
and seek redress from Philippine Courts?
RULING:
YES.
First, the Court enumerated the principles governing a
foreign corporation’s right to sue in local courts as settled
in our Corporation Law, to wit:
1. a)if a foreign corporation does business in the
Philippines without a license, it cannot sue before
the Philippine courts;
2. b) if a foreign corporation is not doing businessin
the Philippines, it needs no license to sue before
Philippine courts on an isolated transaction or on
a cause of action entirely independent of any
business transaction; and,
3. c)if a foreign corporation does businessin the
Philippines with the required license, it can
sue before Philippine courts on any transaction.
Apparently, it is not the absence of the prescribed license
but the doing (of) business in the Philippines without such
license which debars the foreign corporation from access
to our courts.
Batas Pambansa Blg. 68, otherwise known as The
Corporation Code of the Philippines, is silent as to what
constitutes doing or transacting business in the
Philippines. Fortunately, jurisprudence has supplied the
deficiency and has held that the term implies a continuity
of commercial dealings and arrangements, and
contemplates, to that extent, the performance of acts or
works or the exercise of some of the functions normally
incident to, and in progressive prosecution of, the purpose
and object for which the corporation was organized.
In Mentholatum Co. Inc., vs. Mangaliman, this Court laid
down the test to determine whether a foreign company
is doing business, thus:
x x x The true test, however, seems to be whether the
foreign corporation is continuing the body or substance
of the business or enterprise for which it was organized
or whether it has substantially retired from it and turned
it over to another. (Traction Cos. vs. Collectors of Int.
Revenue [C.C.A., Ohio], 223 F. 984,987.) x x x.
The traditional case law definition has metamorphosed
into a statutory definition, having been adopted with some
qualifications in various pieces of legislation in our
jurisdiction. For instance, Republic Act No. 7042, otherwise
known as the Foreign Investment Act of 1991,
defines doing business as follows:
1. d) The phrase doing business shall include
soliciting orders, service contracts, opening
offices, whether called liaison offices or branches;
appointing representatives or distributors
domiciled in the Philippines or who in any
calendar year stay in the country for a period or
periods totalling one hundred eight(y) (180) days
or more; participating in the management,
supervision or control of any domestic business,
firm, entity, or corporation in the Philippines; and
any other act or acts that imply a continuity of
commercial dealings or arrangements, and
contemplate to that extent the performance of
acts or works; or the exercise of some of the
functions normally incident to, and in progressive
prosecution of, commercial gain or of the
purpose and object of the business
organization; Provided, however,That the phrase
doing business shall not be deemed to include
mere investment as a shareholder by a foreign
entity in domestic corporations duly registered to
do business, and/or the exercise of rights as such
investor, nor having a nominee director or officer
to represent its interests in such corporation, nor
appointing a representative or distributor
domiciled in the Philippines which transacts
business in its own name and for its own account.
(Emphasis supplied)
In the case at bar, the Court of Appeals categorized as
doing business petitioners participation under the
Assignment Agreement and the Deed of Assignment. This
is simply untenable. 
The expression doing business should not be given such a
strict and literal construction as to make it apply to any
corporate dealing whatever. At this early stage and with
petitioner’s acts or transactions limited to the assignment
contracts, it cannot be said that it had performed acts
intended to continue the business for which it was
organized.
Being a mere assignee does not constitute “doing
business” in the Philippines. MR Holdings, a foreign
corporation, cannot be said to be doing business simply
because it became an assignee of Marcopper. MR Holdings
was not doing anything else other than being a mere
assignee. The only time that MR Holdings is considered to
be doing business here is that if it continues the business
of Marcopper – which it did not.
Therefore, since it is not doing business here, pursuant to
the rules above, it can sue without any license before
Philippine courts on an isolated transaction or on a cause
of action entirely independent of any business transaction.
Indeed, the Court of Appeals holding that petitioner was
determined to be doing business in the Philippines is
based mainly on conjectures and speculation. Absent overt
acts of petitioner from which we may directly infer its
intention to continue Marcopper’s business, the Court said
it cannot give its concurrence.
Also, petitioner’s payment of US$ 18,453, 450.12 to ADB
was more of a fulfilment of an obligation under the
Support and Standby Credit Agreement rather than an
investment. That petitioner had to step into the shoes of
ADB as Marcopper’s creditor was just a necessary legal
consequence of the transactions that transpired, hence,
the alleged intention of petitioner to continue Marcopper’s
business could have no basis for at that time.
The Court was convinced that petitioner was engaged only
in isolated acts or transactions. Single or isolated acts,
contracts, or transactions of foreign corporations are not
regarded as a doing or carrying on of business.
Steelcase, Inc.
v.
Design International Selections, Inc.
G.R. No. 171995
April 18, 2012
Facts:
Steelcase is a foreign corporation engaged in
office furniture manufacture, who distributes the same
worldwide. To distribute in the Philippines, it entered into
a dealership agreement with Design International
Selections, Inc. (DISI) where it had the right to market, sell,
distribute, install, and service its products to end-user
customers within the Philippines. The relationship later on
terminated, with DISI having an unpaid account to
Steelcase. To recover the amount, Steelcase sued DISI in
the Philippine Courts for a collection of sum of money with
damages. As defense, DISI argues that Steelcase have no
capacity to sue in the Philippines due to lack of license to
engage in business in the Philippines, during the time it
engaged business with DISI. Hence, this petition.
Issue: Whether or not Steelcase was doing business in the
Philippines without a license.
Ruling: No. It is an unlicensed foreign corporation not
doing business in the Philippines.
Both from the the Foreign Investments Act of
1991, and its Implementing Rules and Regulations, the
appointment of a distributor in the Philippines is not
sufficient to constitute "doing business" unless it is under
the full control of the foreign corporation. On the other
hand, if the distributor is an independent entity which
buys and distributes products, other than those of the
foreign corporation, for its own name and its own account,
the latter cannot be considered to be doing business in the
Philippines. It should be kept in mind that the
determination of whether a foreign corporation is doing
business in the Philippines must be judged in light of the
attendant circumstances. All things considered, it has been
sufficiently demonstrated that DISI was an independent
contractor which sold Steelcase products in its own name
and for its own account. As a result, Steelcase cannot be
considered to be doing business in the Philippines by its
act of appointing a distributor as it falls under one of the
exceptions under R.A. No. 7042.
Steelcase, Inc. v. Design International Selections, Inc.
(DISI), G.R. No. 171995, 18 April 2012
18APR
[MENDOZA, J.]
FACTS
Steelcase, Inc. (Steelcase) granted Design International
Selections, Inc. (DISI) the right to market, sell, distribute,
install, and service its products to end-user customers
within the Philippines.Steelcase argues that Section 3(d) of
R.A. No. 7042 or the Foreign Investments Act of
1991 (FIA) expressly states that the phrase doing business
excludes the appointment by a foreign corporation of a
local distributor domiciled in the Philippines which
transacts business in its own name and for its own
account. On the other hand, DISI argues that it was
appointed by Steelcase as the latter’s exclusive distributor
of Steelcase products.  The dealership agreement between
Steelcase and DISI had been described by the owner
himself as basically a buy and sell arrangement.
 
ISSUE
Whether Steelcase had been doing business in the
Philippines.
RULING
NO.
[T]he appointment of a distributor in the Philippines is not
sufficient to constitute doing business unless it is under
the full control of the foreign corporation. On the other
hand, if the distributor is an independent entity which
buys and distributes products, other than those of the
foreign corporation, for its own name and its own account,
the latter cannot be considered to be doing business in
the Philippines. Here, DISI was an independent contractor
which sold Steelcase products in its own name and for its
own account. As a result, Steelcase cannot be considered
to be doing business in the Philippines by its act of
appointing a distributor as it falls under one of the
exceptions under R.A. No. 7042.
LAUREL VS GARCIA
GR 92013 JULY 25, 1990.
Facts:
Petitioners seek to stop the Philippine Government to sell
the Roppongi Property, which is located in Japan. It is one
of the properties given by the Japanese Government as
reparations for damage done by the latter to the former
during the war.
Petitioner argues that under Philippine Law, the subject
property is property of public dominion. As such, it is
outside the commerce of men. Therefore, it cannot be
alienated.
Respondents aver that Japanese Law, and not Philippine
Law, shall apply to the case because the property is
located in Japan. They posit that the principle of lex situs
applies.
Issues and Held:
1. WON the subject property cannot be alienated.
The answer is in the affirmative.
Under Philippine Law, there can be no doubt that it is of
public dominion unless it is convincingly shown that the
property has become patrimonial. This, the respondents
have failed to do. As property of public dominion, the
Roppongi lot is outside the commerce of man. It cannot be
alienated.
2. WON Philippine Law applies to the case at bar.
The answer is in the affirmative.
We see no reason why a conflict of law rule should apply
when no conflict of law situation exists. A conflict of law
situation arises only when: (1) There is a dispute over the
title or ownership of an immovable, such that the capacity
to take and transfer immovables, the formalities of
conveyance, the essential validity and effect of the
transfer, or the interpretation and effect of a conveyance,
are to be determined; and (2) A foreign law on land
ownership and its conveyance is asserted to conflict with a
domestic law on the same matters. Hence, the need to
determine which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or
title. There is no question that the property belongs to the
Philippines. The issue is the authority of the respondent
officials to validly dispose of property belonging to the
State. And the validity of the procedures adopted to effect
its sale. This is governed by Philippine Law. The rule of lex
situs does not apply.
The assertion that the opinion of the Secretary of Justice
sheds light on the relevance of the lex situs rule is
misplaced. The opinion does not tackle the alienability of
the real properties procured through reparations nor the
existence in what body of the authority to sell them. In
discussing who are capable of acquiring the lots, the
Secretary merely explains that it is the foreign law which
should determine who can acquire the properties so that
the constitutional limitation on acquisition of lands of the
public domain to Filipino citizens and entities wholly
owned by Filipinos is inapplicable.
WIGBERTO E. TAÑADA et al, petitioners, vs. EDGARDO
ANGARA, et al, respondents.
Facts:
Petitioners prayed for the nullification, on constitutional
grounds, of the concurrence of the Philippine Senate in the
ratification by the President of the Philippines of the
Agreement Establishing the World Trade Organization
(WTO Agreement, for brevity) and for the prohibition of its
implementation and enforcement through the release and
utilization of public funds, the assignment of public
officials and employees, as well as the use of government
properties and resources by respondent-heads of various
executive offices concerned therewith.
They contended that WTO agreement violates the
mandate of the 1987 Constitution to “develop a self-
reliant and independent national economy effectively
controlled by Filipinos x x x (to) give preference to
qualified Filipinos (and to) promote the preferential use of
Filipino labor, domestic materials and locally produced
goods” as (1) the WTO requires the Philippines “to place
nationals and products of member-countries on the same
footing as Filipinos and local products” and (2) that the
WTO “intrudes, limits and/or impairs” the constitutional
powers of both Congress and the Supreme Court.
Issue:
Whether provisions of the Agreement Establishing the
World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power
which, under Sec. 2, Article VI, 1987 Philippine
Constitution is ‘vested in the Congress of the Philippines.
Held:
No, the WTO agreement does not unduly limit, restrict,
and impair the Philippine sovereignty, particularly the
legislative power granted by the Philippine Constitution.
The Senate was acting in the proper manner when it
concurred with the President’s ratification of the
agreement.
While sovereignty has traditionally been deemed absolute
and all-encompassing on the domestic level, it is however
subject to restrictions and limitations voluntarily agreed to
by the Philippines, expressly or impliedly, as a member of
the family of nations. Unquestionably, the Constitution did
not envision a hermit-type isolation of the country from
the rest of the world. In its Declaration of Principles and
State Policies, the Constitution “adopts the generally
accepted principles of international law as part of the law
of the land, and adheres to the policy of peace, equality,
justice, freedom, cooperation and amity, with all nations.”
By the doctrine of incorporation, the country is bound by
generally accepted principles of international law, which
are considered to be automatically part of our own laws.
One of the oldest and most fundamental rules in
international law is pacta sunt servanda — international
agreements must be performed in good faith. “A treaty
engagement is not a mere moral obligation but creates a
legally binding obligation on the parties x x x. A state which
has contracted valid international obligations is bound to
make in its legislations such modifications as may be
necessary to ensure the fulfillment of the obligations
undertaken.”
By their inherent nature, treaties really limit or restrict the           Whether or not the treaty (Paris Convention) affords
absoluteness of sovereignty. By their voluntary act, protection to a foreign corporation against a Philippine
nations may surrender some aspects of their state power applicant for the registration of a similar trademark.
in exchange for greater benefits granted by or derived
from a convention or pact. After all, states, like individuals,  HELD
live with coequals, and in pursuit of mutually covenanted
          The Court held in the affirmative. RA 8293 defines
objectives and benefits, they also commonly agree to limit
trademark as any visible sign capable of distinguishing
the exercise of their otherwise absolute rights. Thus,
goods. The Paris Convention is a multilateral treaty that
treaties have been used to record agreements between
seeks to protect industrial property consisting of patents,
States concerning such widely diverse matters as, for
utility models, industrial designs, trademarks, service
example, the lease of naval bases, the sale or cession of
marks, trade names and indications of source or
territory, the termination of war, the regulation of conduct
appellations of origin, and at the same time aims to
of hostilities, the formation of alliances, the regulation of
repress unfair competition. In short, foreign nationals are
commercial relations, the settling of claims, the laying
to be given the same treatment in each of the member
down of rules governing conduct in peace and the
countries as that country makes available to its own
establishment of international organizations. The
citizens. Nationals of the various member nations are thus
sovereignty of a state therefore cannot in fact and in
assured of a certain minimum of international protection
reality be considered absolute. Certain restrictions enter
of their industrial property.
into the picture: (1) limitations imposed by the very nature
of membership in the family of nations and (2) limitations
imposed by treaty stipulations. As aptly put by John F.
Kennedy, “Today, no nation can build its destiny alone.
The age of self-sufficient nationalism is over. The age of
interdependence is here.”

The WTO reliance on “most favored nation,” “national

treatment,” and “trade without discrimination” cannot be
struck down as unconstitutional as in fact they are rules of
equality and reciprocity that apply to all WTO members.
Aside from envisioning a trade policy based on “equality
and reciprocity,” the fundamental law encourages
industries that are “competitive in both domestic and
foreign markets,” thereby demonstrating a clear policy
against a sheltered domestic trade environment, but one
in favor of the gradual development of robust industries
that can compete with the best in the foreign markets.
Indeed, Filipino managers and Filipino enterprises have
shown capability and tenacity to compete internationally.
And given a free trade environment, Filipino
entrepreneurs and managers in Hongkong have
demonstrated the Filipino capacity to grow and to prosper
against the best offered under a policy of laissez faire.

WHEREFORE, the petition is DISMISSED for lack of merit.

FACTS

          Lolita Escobar applied with the Bureau of Patents for

the registration of the trademark “Barbizon”, alleging that
she had been manufacturing and selling these products
since 1970. private respondent Barbizon Corp opposed the
application in IPC No. 686. The Bureau granted the
application and a certificate of registration was issued for
the trademark “Barbizon”. Escobar later assigned all her
rights and interest over the trademark to petitioner
Mirpuri. In 1979, Escobar failed to file with the Bureau the
Affidavit of Use of the trademark. Due to his failure, the
Bureau cancelled the certificate of registration. Escobar
reapplied and Mirpuri also applied and this application was
also opposed by private respondent in IPC No. 2049,
claiming that it adopted said trademark in 1933 and has
been using it. It obtained a certificate from the US Patent
Office in 1934. Then in 1991, DTI cancelled petitioner’s
registration and declared private respondent the owner
and prior user of the business name “Barbizon
International”.

 ISSUE