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[G.R. No. 16588. November 19, 1921. ]

"LA INSULAR" Cigar and Cigarette Factory, Inc., Plaintiff-Appellant, v. B. E. JAO OGE, proprietor of cigarette factory "La Ciudad," Defendant-Appellee.

Kincaid, Perkins & Kincaid for Appellant.

Crossfield & O’Brien for Appellee.


1. TRADE-MARKS; UNFAIR COMPETITION; STATEMENT OF CAUSE OF ACTION. — The plaintiff in an action to restrain the defendant from using a label alleged to be an infringing imitation of the plaintiff’s trade-mark may state the facts constituting his supposed grievance; and he is entitled to relief if the case proved shows either infringement of trade-marks or unfair competition.

2. UNFAIR COMPETITION; ALLEGATIONS OF COMPLAINT; DEMURRER. — Where, in an action to restrain unfair competition, it is alleged with reasonable precision that the defendant in selling his goods is using a mark which closely resembles the plaintiff trade-mark and that he is thus giving his goods an appearance similar to that of the plaintiff’s goods — with the intention of deceiving the public and defrauding the plaintiff — and the marks respectively used by both parties are exhibited with the complaint, a demurrer to the complaint, based on its supposed failure to state a cause of action, cannot be sustained, unless, upon inspection of the rival marks, the one used by the defendant appears so dissimilar to that used by the plaintiff that it could not in any event be considered an objectionable simulation.



The plaintiff in this case conducts a tobacco factory in the city of Manila for the manufacture of cigars and cigarettes; and it is the owner of a registered trade-mark, which it places upon the wrappers of its cigarettes and by which the plaintiff’s product is generally recognized throughout the Philippine Islands and elsewhere. This trade-mark consists of a decorative design printed in colors on a strip of paper of appropriate size to envelope the packages of cigarettes to which it is pasted. A specimen of said design is exhibited with the complaint and appears in the records upon appeal as Exhibit A.

In the complaint itself the same design is described as follows:jgc:chanrobles.com.ph

"On the first square is represented a matron seated on a raised platform with steps leading up to it upon which there is a rug, all on a background of palm leaves. This figure holds a smoking torch in her right hand and in her left a streamer with the words ’La Insular’ inscribed thereon. At the left hand side of this figure are the words ’Marca de Fabrica’ underneath which is a five pointed star with the initial ’E’ on one side of it and ’D’ on the other. Further down are the words ’La Insular Fabrica de Tabacos Manila,’ and still further down appear a terrestrial globe, an anchor, a post, a ship with three sails, with a mountain in the background.

"On the second square is represented a sign placed diagonally from corner to corner of the square with the word ’Hebra’ written thereon in large letters. On one side of this figure, are the words ’:30 Cgiarrillos’ and on the other side, the words ’Entre Fuerte.’ Between the two squares in large letters are the words ’Plaza Binondo.’"

The complaint, after setting forth the ownership of this trade-mark and the continuous use of the same for nearly forty years by the plaintiff and its predecessors in interest, alleges that in the year 1915 the defendant, B. E. Jao Oge, proprietor of the cigarette factory "La Ciudad," in the city of Manila, began to use two different labels on packages of cigarettes offered for sale by him which are infringing imitations of the plaintiff’s mark. Specimens of these alleged imitations are exhibited with the complaint and appear in the record as Exhibits B and C; but no attempt at verbal description of said imitations is made in the complaint.

Paragraphs VII and IX of the complaint are textually as follows:jgc:chanrobles.com.ph

"VII. That the said defendant through the use of said infringing labels (which closely imitate the label and mark of plaintiff as aforesaid) in selling his cigarettes has given and is giving the cigarettes offered for sale by him the appearance of the cigarettes manufactured and offered for sale by plaintiff and its predecessors in interest in such a way as to influence purchasers to believe that the cigarettes offered for sale by defendant are those of the plaintiff and that such appearance has so influenced and is now influencing purchasers.

x       x       x

"IX. That the defendant imitates plaintiff’s mark for the purpose of deceiving the public and of defrauding plaintiff of its legitimate trade, and that the public has been and is being deceived, and this plaintiff has been and is being defrauded thereby in loss of sales to its damage in the sum of twenty thousand pesos (P20,000).." . .

In the petitory clause the plaintiff prays that the defendant be perpetually enjoined from the further use of the alleged obnoxious labels in the sale of cigarettes; that he be required to render a true and complete account of his profits upon all cigarettes bearing such labels sold or otherwise disposed of by him; that judgment be entered in favor of the plaintiff and against the defendant for treble the amount thereof, which the plaintiff avers will amount to P20,000; and finally that the plaintiff be granted any other appropriate remedy.

To this complaint the defendant interposed a general demurrer on the ground that the facts stated did not constitute a cause of action. This demurrer was sustained by the trial judge, to which action the plaintiff excepted; and he having elected not to amend further, judgment was entered dismissing the complaint. From this judgment the plaintiff appealed.

In our opinion this complaint is sufficient, and the order sustaining the demurrer must be reversed.

Infringement of trade-mark, illegal use of trade-name, and unfair competition are related torts and are commonly treated together by authors of legal treatises. It is generally recognized that the generic tort is unfair competition, of which the other two may be considered special forms. The most fully developed branch of the subject is o
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