2/15/2017 G.R.No.

L6623

TodayisWednesday,February15,2017

RepublicofthePhilippines
SUPREMECOURT
Manila

ENBANC

G.R.No.L6623January26,1912

INCHAUSTI&COMPANY,plaintiffsappellees,
vs.
SONGFO&COMPANY,ETAL.,defendantsappellants.

Chicote&Miranda,forappellants.
Haussermann,Cohn&Fisherforappellees.

CARSON,J.:

ThisisasuitbroughtundertheprovisionsofActNo.666ofthePhilippineCommission,inwhichtheplaintiffsseek
toenjointhedefendantsintheuseofacertaintrademark,andfordamagesconsequentupontheallegedillegal
useofthesame.TheplaintiffcompanyisageneralpartnershipdulyorganizedunderthelawsofthePhilippine
IslandsandistheownerofadistilleryinthecityofManilaknownasthe"DestileriadeTanduay."Thedefendants
arethemembersofageneralpartnershipdulyorganizedaccordingtotheprovisionsoflaw,andaretheowners
andoperatorsofadistilleryinthecityofManilaknownasthe"DestileriaLaTondea."Bothfirmsareextensively
engagedinthemanufactureandsaleofalcoholicliquors.

On October 6, 1903, plaintiffs caused to be registered in the division of archieves, patents, copyrights and
trademarks of the Government of the Philippine Islands a trademark for "anisados y alcoholes" as shown by
ExhibitB.Asampleorfacsimileofthistrademarkisaparttobeacirculardesigninclosedwithintwoconcentric
circleswiththesymbolofademijohninthecenteracrossthefaceofthedesign,runninginahorizontaldirection
are two parallel lines, and between these lines the word "Tanduay" is placed thus: TANDUAY this horizontal
designservestodividethetrademarkintoanupperandlowersectionintheupperpartbetweenthetwocircles
appearstheword"Inchausti"andinthelowerarcofthedesigninasimilarpositionistheword"Compaia.""Y"
appearsjustunderneaththesymbolofthedemijohnwithinthesmallercircle.Labelsbearingthistrademarkwere
affixedtothecorksusedbyplaintiffinthebottlingoftheirproducts.

Thedefendantssince1906havebeenusing,amongotherlabels,affixedtothecorksusedinthebottlingoftheir
products, a circular label bearing a design substantially similar to the registered trademark of plaintiffs. It is a
labelofpracticallythesamesizeasthatofplaintiffs.Itmainfeaturesaretwoconcentriccircleshavingthesymbol
ofdemijohninthecenterrunningacrossthefaceoftheinnercircleisahorizontaldesignsimilartotheplaintiffs'
registeredtrademarkinwhichiswrittentheabbreviationforfactory,thus:FACT.Themaindifferenceinthetwo
horizontaldesignsliesinthefactthatinplaintiffs'registeredtrademarkthehorizontaldesignpassesacrossthe
entire face of both circles, while in the trademark used by the defendants the horizontal design passes only
across the face of the inner circle. The wording of the two designs is different, but the general position of the
wordingisthesameinbothdesigns.Thetrademarksappeartohavebeenusedindifferentcolorsandforthe
samepurposebybothparties.ThetrademarkusedbydefendantsisshowninExhibitsC,CC,andCCCofthe
record.Thesetrademarksarethesameingeneraldesign,butvaryincolorandwording.

Referencetothecertificateofregistration(ExhibitB)whichwasgrantedtotheplaintiffcompanybythedivisionof
archives, patents, copyrights and trademarks of the Government of the Philippine Islands and to the facsimile
copyofthetrademarkfiledtherewithshowsthatalltherequirementsoflawweredulycompliedwith,andthatall
the statements and declarations relating thereto, together with facsimile copies of the trademark, were duly
registrationproceedings.Thefacsimileofthetrademarkwhichwaspresentedforregistrationandwhichisaffixed
to the copy of the registration proceedings (Exhibit B) is substantially identical in all respects to the trademark
shown in Exhibit A. It is maintained with considerable zeal in appellants' brief that the description of the trade
mark as shown in the registration proceedings is not an accurate description of all details of the trademark
claimedbyappellees(ExhibitA)andthatthegrantingofacertificateofregistrationforthetrademarkdescribed
inExhibitBwouldnotcoverplaintiffs'trademark(ExhibitA).Todeterminethispointwedonotlookalonetothe
descriptiongivenintheregistrationproceedingswemustlooktothewholerecord.Afacsimilecopyofthetrade
marksoughttotheregisteredwasfiledwiththeregistrationoffice,anditisnowapartofthecertifiedcopyofthe
registrationproceedings(ExhibitB)beforeus.Aswehavealreadystated,thisfacsimilecopywhichisanintegral
partoftheregistrationrecordsissubstantiallyidenticallyinallrespectstoplaintiffs'trademark(ExhibitA).Wedo
not feel therefore that it is necessary to discuss appellants' contention that the description as given in the
registration proceedings does not in all of its details cover plaintiffs' Exhibit A. The certified facsimile speaks for
itself,andthistogetherwiththedescriptionisconclusiveuponthispoint.

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Defendants'counselinsistthatInchausti&Co.didnothavetherighttoadoptastheirexclusivetrademarkthe
design shown in Exhibit A, and that it was error on the part of the lower court to adjudge that they had such a
right.

In support of this contention they rely upon the generally accepted the rule that a symbol which represents
something in universal use by the public generally, or by a particular class of people, is not the subject of an
exclusivetrademark.ItisshownbyExhibit9thatmanyotherfirmsandbusinesshousesinthePhilippineIslands
use circular labels some of these having designs of which two or more concentric circles form a constitute
element,othershavinghorizontallinesacrossthefaceofacirculardesignsomewhatsimilartoplaintiffs'designin
this respect. It is urged that the demijohn is the only distinguishing element in plaintiffs' trademark upon which
they could have been granted an exclusive trademark and it is further contended that a demijohn being well
known and generally used receptacle for alcoholic liquors, and being universally used by the distilling trade,
plaintiffsforthatreasonarenotentitledtotheuseofthesameasadistinguishingsymbolandtrademarkfortheir
products. Many citations are given in support of this contention, and we do not question the soundness of the
doctrinelaiddowninmostofthesecases.

Buttheplaintiffsareentitledtotheexclusiveuseoftheabovedescribedtrademarkupontheirproductsdoesnot
seem to us to be open to question. While the symbol of the demijohn alone might not be the subject of an
exclusivetrademark,yetwethinkthatthedemijohnusedasitisinplaintiffs'trademarkincombinationwiththe
otherdistinguishingelementsthereinmayfairlybemadethesubjectofanexclusivetrademark.Thecomponent
elementsofadesignarenottobeconsideredseparateandapartwemustlooktothedesignasawholetothe
combinationofthosecomponentelements.WeareofopinionthatthedesignshowninExhibitAisthesubjectof
an exclusive trademark, and that the plaintiffs have the exclusive ownership and right of use in the same by
reasonoftheregistrationthereofandtheiruseofthistrademarkinthesaleoftheirproductsformanyyears.

We are now to consideration of the question whether or not the trademarks used by defendants shown in
Exhibits C, CC, and CCC are infringements of plaintiffs' registration trademark. The court below predicated its
decisionuponsections3and4ofActNo.666ofthePhilippineCommission.Thesesectionsrelatetotheviolation
oftrademarkrightsandtoremediesthereunder.Amongtheotherprovisionsofsection3ofthetrademarklawis
thefollowing:

...anypersonentitledtotheexclusiveuseofatrademarktodesignatetheoriginorownershipofgoods
hehasmadeordealsinmayrecoverdamagesinacivilactionfromanypersonwhohassoldgoodsofa
similarkind,bearingsuchtrademark,....

The section further provides for the method of determining the damages, and also concedes to the injury party
therighttohaveaninjunctionrestrainingthefurtheruseofthetrademark.Thecourtbelowwasevidentlyofthe
opinion that the trademark used by the defendants not only closes simulated the registered trademark of
plaintiffs,butthattheywereinrealityoneinthesametrademarkandthatthedefendantswereguiltyofselling
goods of a similar kind to those sold by plaintiffs and bearing the registered trademark used by plaintiffs. An
examination of the two trademarks in question reveals a striking similarity in the two designs, but we are not
preparedtosaythatthelikenessissuchthatthetwodesignsbeconsideredoneandthesametrademark.And
unlessthereissuchacloseresemblanceastoresultinthisconclusiontheactiondoesnotproperlyfallwithinthe
provisionsofsection3oftheTradeMarkLaw.Thereasoningoftheopinionofthetrialjudge,however,doesnot
in any way affect the merits of the issues involved in the case submitted, nor the judgment actually entered by
him.Section7oftheTradeMarkLawprovidesasfollows:

Any person who in selling his goods shall give them the general appearance of the goods of another
manufacturerordealer,eitherinthewrappingofthepackagesinwhichtheyarecontained,orthedevices
orwordsthereon,orinanyotherfeatureoftheirappearance,whichwouldbelikelytoinfluencepurchasers
tobelievethatthegoodsofferedarethoseofamanufacturerordealerotherthantheactualmanufacturer
or dealer, and who clothes the goods with such appearance for the purpose of deceiving the public and
defraudinganotherofhislegitimatetrade...shallbeguiltyofunfaircompetition,andshallbeliabletoan
actionforthedamages...andinorderthattheactionshalllieunderthissection,actualintenttodeceive
thepublicanddefraudacompetitorshallaffirmativelyappearonthepartofthepersonsoughttobemade
liable,butsuchintentmaybeinferredfromsimilarityintheappearanceofthegoodsaspackedoroffered
forsaletothoseofthecomplainingparty.

Itwillbeseenthatthemeasureofdamagesistobedeterminedinthesamewayasthatprovidedinsection3,
andtherightofthecomplainingpartytoaninjunctionisthesameasthatprovidedforincasesoftheviolationofa
trademark. The facts alleged in the complaint and proven at the trial sustain a judgment under either of these
sectionsofActNo.666.Section3relatestotheactualuseofthetrademarkofanother,whilesection7relatesto
unfaircompetition,whereamanufacturerordealerbythewrappingsonapackage,orbythewordsordevices
thereon, or by any other feature of their appearance gives his goods the appearance of those of another
manufacturerordealerwiththeintenttodeceivethepublicordefraudsuchotherdealerormanufactureroutof
his legitimate trade. For reasons already stated we are of the opinion that the present case comes within the
provisionsofsection7oftheTradeMarkLaw.

Wecomenowtoapplythefactsofthecasetotheprovisionsoflawastheyaresetforthinsection7ofsaidAct
No. 666. An examination of the labels used by the parties to this action shows that they are strikingly similar in
theirgeneraldesignandappearance.Wehavealreadyhadoccasioninthecourseofthisopiniontogivearather
minute description of both designs, and as facsimile copies of the same appear in the record we have had the
opportunitytoexaminethem.Therearesomedetailsinwhichthetwotrademarksvary,butinmanyandindeed

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in most important and essential details they are identical. Both designs have the demijohn as a central
surroundedbytwoconcentriccircles.Thehorizontalplaneswhichpassoverthefaceofbothdesignsdifferonlyin
length in plaintiffs' design this plane terminates in the circumference of the outer circle, while in that of the
defendantsitterminatesinthecircumferenceoftheinnercircle.Wecannotescapetheconclusionthatthetwo
trademark are so nearly alike in design and general appearance that only the most careful examination could
detectthattheywerenotinfactthesame.Suchanexaminationdisclosesthepointsofdifference,butitistobe
remembered that the purchasing public has, ordinary, no such opportunity to make such an examination nor is
thereanyreasontoimposesuchanobligationonthepublic.InthecaseofU.S.vs.Manuel(7Phil.Rep.,221)
thiscourtsaid:

The true test of unfair competition is whether certain goods have been intentionally clothed with an
appearancewhichislikelytodeceivetheordinarypurchaserexercisingordinarycare,andnotwhethera
certainlimitedclassofpurchaserswithspecialknowledgenotpossessedbytheordinarypurchasercould
avoidmistakebytheexerciseofthisspecialknowledge.

A person thoroughly familiar with the details of design in plaintiffs' trademark, and exercising special care in
examiningthegoodsofferedforsaleandthewordingusedonthetrademark,wouldhardlybedeceivedbythe
trademark used by the defendants. It certainly could be only in the exercise of such careful scrutiny as this,
however, that an intending purchaser could assure himself that the two labels were different. We are satisfy
beyond a reasonable doubt that the similarity of the two labels, and the further fact that the are affixed in the
samewaybybothpartiestothecorksusedinthebottlingoftheirproducts,wouldbethemeansofinfluencingthe
purchaser to believe that the goods offered by the defendants were those of plaintiff's manufacturer. We are of
opinionthatthechargeofunfaircompetitionisfullysustainedbytherecord.Thesimilarityintheappearanceof
thegoodsaspackedandofferedforsaleissostrikingthatweareunabletoattributethisfacttoanythingother
thananintentonthepartofdefendantstodeceivethepublicanddefraudplaintiffsoutoftheirlegitimatetrade,
andinthiscaseweinfersuchintentfromthelikenessofthegoodssopackedandofferedforsale.

The lower court directed that the defendants render an account to the plaintiffs of the profits which they had
derivedfromthesaleoftheiralcoholicliquorsunderthetrademarkinquestion,inaccordancewiththeprovisions
oftheTradeMarkLaw.Itappears,however,thatthepartiesheretohaveagreed,forthepurposeofthisappeal,
thatthemeasuresofprofitsshallbereckonedatthesumofP1,000.Thejudgmentofthelowercourtistherefore
affirmed,exceptinsofarasitmakesprovisionsforthetakingofanaccount,andinsofarasitthusprovidesfor
thetakingofanaccount,thejudgment,inaccordingwiththeagreementofthepartiesonappeal,ismodifiedby
substituting therefor judgment in favor of the plaintiffs and against the defendants for the sum of P1,000. The
costs of the proceedings in both instances are allowed in favor of the plaintiff company and against the
defendants.

Torres,Mapa,Johnson,MorelandandTrent,JJ.,concur.

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