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PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

[G.R. No. L-3369. September 24, 1907. ]

JONAS BROOK BROS., Plaintiff-Appellee, v. FROELICH AND KUTTNER, Defendant-Appellant.

Bishop & O’Brien, for Appellant.

Coudert Brothers, for Appellee.

SYLLABUS


1. TRADE-MARKS AND TRADE-NAMES; ACTION TO RESTRAIN UNFAIR COMPETITION. — Anyone who sells goods packed or labeled or otherwise prepared in such a manner as to induce intending purchasers to believe that the goods are of a make or origin other than the true one, or who clothes the goods with a certain appearance for the purpose of deceiving the public, is deemed guilty of unfair competition as defined by section 7 of Act No. 666. The intention to deceive may be inferred form the similarity of the goods as packed and offered for sale, and action will lie to restrain such unfair competition, and for damages (Nelle v. Baer, Senior & Co., 5 Phil. Rep., 608; U.S. v. Manuel, 7 Phil. Rep., 221.)

2. ID., ID.; ACTION BY A FOREIGN CORPORATION. — A foreign corporation, although not established in the Philippine Islands and whose articles of incorporation have not been filed in the mercantile register, may maintain an action for damages. (Dampfschieffs Rhederei Union v. La Compañia Trasatlantica.)


D E C I S I O N


JOHNSON, J.:


This action was brought in the Court of First Instance of the city of Manila, by the plaintiff against the defendant, under section 7 of Act No. 666 of the Philippine Commission, to restrain the defendant from selling in the Philippine Islands cotton thread in boxes labeled in a way which was intended to deceive the public into believing that the said thread was that sold by the said plaintiff.

The said cotton thread imported and sold in the Philippine Islands was packed in small flat boxes of white pasteboard, of the same size and shape as those of the plaintiff, and bearing within and without certain labels whose color, size, form, and appearance were so nearly like those used by the plaintiff that it is believed that it was the intention of the defendant to cause the public to believe that the thread so sold by the defendant was the same thread as that sold by the plaintiff. Facsimiles of the labels used upon the said boxes were as follows, marked "Exhibit A" and "Exhibit B," respectively, of the plaintiff and defendant:jgc:chanrobles.com.ph

"EXHIBIT A." — Plaintiff’s labels.

INSERT PICTURES

NOTE. — The above oblong labels were printed on green paper, with all figures, letters, and characters in gold. The predominant colors in the circular labels were red, green, and gold.

"EXHIBIT B." — Defendant’s labels.

INSERT PICTURES

NOTE. — The above oblong labels were printed on green paper, with all figures, letters, and characters in gold. The predominant colors in the larger of the circular labels were red, gold, and blue, and in the smaller, gold, blue, and green.

From an examination of these respective labels it will be noted that they are really of the same color, the corresponding parts of each of the labels being practically the same, both in form and color, and are so nearly alike that unless they were compared together the common observer would fail to note any difference whatsoever. The similarity between the general appearance of the packages with the labels imported and offered for sale by the defendants and those sold by the plaintiff is so great as to require the closest scrutiny to detect the difference, even to one wholly familiar with the packages and wholly aware of the difference between them. The similarity is such as to influence the purchaser of the goods offered by the defendant, to believe that the same are the goods of the plaintiff’s manufactured. So faithfully and closely has the appearance and arrangement of plaintiff’s packages of thread been followed by the defendant, that the mind refuses to credit the possibility of attributing the many points of identity to mere accidental coincidence on the part of the defendant.

Section 7 of Act No. 666 provides in part as follows:jgc:chanrobles.com.ph

"Any person who in selling his goods shall give them the general appearance of goods of another manufacturer or dealer, either in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchaser to believe that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer, and who clothes the goods with such appearance for the purpose of deceiving the public and defrauding another of his legitimate trade, . . . shall be liable to an action for damages . . . This section applies in case where the deceitful appearance of the goods, misleading as to origin or ownership, is effected not by means of technical trade-marks, emblems, signs, or devices, but by the general appearance of the package containing the goods, or by the devices or words thereon, even though such packages, devices, or words are not by law capable of appropriation as trade marks; and in order that the action shall lie under this section, actual intent to deceive the public and defraud a competitor shall affirmatively appear on the part of the person sought to be made liable, but such intent may be inferred from similarity in the appearance of the goods as packed or offered for sale to those of the complaining party."cralaw virtua1aw library

From an examination of the evidence adduced in this cause in the court below, we are satisfied beyond a reasonable doubt that the defendant and appellant, in selling the thread in the boxes labeled in the manner described, intended to give his goods the general appearance of the thread manufactured and sold by the plaintiff, in the devices, labels, and words used by them, in a way which would be likely to influence purchasers to believe that the goods offered by them were those of the plaintiff, and that the similarity in the appearance of the goods offered for sale by the defendants to those of the plaintiff was such as to justify the inference and conclusion that the defendant actually intended to deceive the public and defraud the plaintiff. (U.S. v. Manuel, 7 Phil. Rep., 221; Nelle v. Baer, Senior & Co., 5 Phil. Rep., 608.)

Said section 7 provides that "in order that the action shall lie under this section, actual intent to deceive the public and defraud a competitor shall affirmatively appear." But the same section provides that "such intent may be inferred from similarity in the appearance of the goods as packed or offered for sale." In this case we hold that the unfair competition on the part of the defendant is fully proven "from the similarity in the appearance of the goods as packed or offered for sale." Indeed, in most of the case of unfair competition the similarity of the goods must appear from the form or general appearance of the goods sold.

The defendant and appellant claims that the plaintiff, being a foreign corporation, was without judicial personality in the Philippine Islands, not being registered in compliance with the requirements of the Commercial Code. In reply to that assignment of error of defendant, it is sufficient to say that the court has already decided in the case of Dampschieffs Rhederei Union v. La Compañia Trasatlantica 1 (5 Off. Gaz., 712) that a foreign corporation which had not established itself in the Philippine Islands against another for damages without filing articles of incorporation in the mercantile register.

We, therefore, are of the opinion that the judgment of the lower court should be affirmed with costs.

After the expiration of twenty days let judgment be entered adjudging and decreeing that the defendant render into the Court of First Instance of the city of Manila, within a time to be fixed by the lower court, a full, true, and correct statement and account of the profits had and received by the said defendant from the sale of five cases of cotton thread sold and disposed of by the said defendant under the labels whose facsimiles are attached to the complaint, marked "Exhibit B." and that the plaintiff recover from the said defendants double the amount of said profits. with costs; and that defendant, his agent, attorneys, and representatives, be perpetually enjoined from selling in the Philippine Islands the thread put up in packages with the labels heretofore used. So ordered.

Arellano, C.J., Torres, Willard, and Tracey, JJ., concur.

Endnotes:



1. Page 766, post.

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