Since time immemorial, a prominent beer manufacturing corporation has monopolized the market for beer drinkers in the Philippines. In the early 1980’s, however, a new corporation emerged and began manufacturing beer products as well. In 1988, the more established corporation (Corporation 1) filed a compliant against the new corporation (Corporation 2) for trademark infringement and unfair competition. It alleged that Corporation 2 copied its pale pilsen product, without its consent.

While the Regional Trial Court dismissed the complaint, the Court of Appeals (CA), on appeal, found Corporation 2 guilty of infringement of trademark and unfair competition, restraining Corporation 2 from manufacturing, putting up, selling, advertising, offering, or announcing for sale, or supplying its Beer Pale Pilsen product.

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