San Miguel Pure Foods Company Inc v.

Foodsphere

GR No. 217781

Jun 20, 2018

Facts:

The parties herein are both engaged in the business of the manufacture, sale, and
distribution of food products, with SMPFCI owning the trademark "PUREFOODS FIESTA
HAM" while Foodsphere, Inc. products (Foodsphere) bear the "CDO" brand. On November 4,
2010, SMPFCI filed a Complaint3 for trademark infringement and unfair competition with
prayer for preliminary injunction and temporary restraining order against Foodsphere
before the Bureau of Legal Affairs (BLA) of the Intellectual Property Office (IPO) pursuant
to Sections 155 and 168 of Republic Act (R.A.) No. 8293, otherwise known as
the Intellectual Property Code (IP Code), for using, in commerce, a colorable imitation of its
registered trademark in connection with the sale, offering for sale, and advertising of goods
that are confusingly similar to that of its registered trademark. Nevertheless SMPFCI,
alleged that its “FIESTA” ham was already sold in the market since 1980 gaining its
popularity as a sumptuous ham of great taste to the populace specially during the holiday
season.

In the year 2006 Foodsphere introduced their own “PISTA” ham. The two corporations
have been vigorous in terms of promoting their respective ham products. SMPFCI alleged
that Foodsphere is guilty of unfair competition. This is because there is confusing similarity
in the general appearance of the goods of the parties and intent on the part of Foodsphere,
to deceive the public and defraud SMPFCL According to SMPFCI, there is confusing
similarity because the display panel of both products have a picture of a partly sliced ham
served on a plate of fruits, while the back panel features other ham varieties offered, both
"FIESTA" and "PISTA" are printed in white bold stylized font, and the product packaging for
both "FIESTA" and "PISTA". Foodsphere similarly denied the allegation that it is guilty of
unfair competition or passing off its product as that of SMPFCI. As mentioned, the "PISTA"
and "FIESTA" labels are substantially different in the manner of presentation, carrying their
respective house marks. Moreover, its paper ham bags are labeled with their respective
house marks and are given to consumers only after purchase, hence, they do not factor in
when the choice of ham is being made. Also, Foodsphere claims to have been using the red
color for its boxes and it was SMPFCI, by its own admission, that switched colors from
green to red in 2009 for its own ham bags.

Issue: Whether or not Foodsphere is guilty of unfair competition under Section 168 of the
Intellectual property code?
Ruling:

Yes, Foodsphere is indeed guilty of unfair completion under Section 168 of the Intellectual
Property Code. The Court has held that unfair competition consists of the passing off (or
palming off) or attempting to pass off upon the public of the goods or business of one
person as the goods or business of another with the end and probable effect of deceiving
the public. Passing off (or palming off) takes place where the defendant, by imitative
devices on the general appearance of the goods, misleads prospective purchasers into
buying his merchandise under the impression that they are buying that of his competitors.
In other words, the defendant gives his goods the general appearance of the goods of his
competitor with the intention of deceiving the public that the goods are those of his
competitor. The "true test," therefore, of unfair competition has thus been "whether the
acts of the defendant have the intent of deceiving or are calculated to deceive the ordinary
buyer making his purchases under the ordinary conditions of the particular trade to which
the controversy relates."

Thus, the essential elements of an action for unfair competition are: (1) confusing similarity
in the general appearance of the goods; and (2) intent to deceive the public and defraud a
competitor. The confusing similarity may or may not result from similarity in the marks,
but may result from other external factors in the packaging or presentation of the goods.
The intent to deceive and defraud may be inferred from the similarity of the appearance of
the goods as offered for sale to the public. Actual fraudulent intent need not be shown.
Provided further, Foodsphere's intent to deceive the public, to defraud its competitor, and
to ride on the goodwill of SMPFCI's products is evidenced by the fact that not only did
Foodsphere switch from its old box packaging to the same paper ham bag packaging as that
used by SMPFCI, it also used the same layout design printed on the same. As the Director
General observed, why, of the millions of terms and combinations of letters, designs, and
packaging available, Foodsphere had to choose those so closely similar to SMPFCI's if there
was no intent to pass off upon the public the ham of SMPFCI as its own with the end and
probable effect of deceiving the public.
G.R. No. 195549 September 3, 2014

WILLAWARE PRODUCTS CORPORATION,

vs.
JESICHRIS MANUFACTURING CORPORATION

Facts:
Jesichris Manufacturing Company filed this present complaint for damages for unfair
competition with prayer for permanent injunction to enjoin Willaware Products
Corporation manufacturing and distributing plastic-made automotive parts similar to
those of Jesichris.
Jesichris alleged that it is a duly registered partnership engaged in the manufacture and
distribution of plastic and metal products
Jesichris further alleged that in view of the physical proximity of Willaware office to
Jesichris office, and in view of the fact that some of Jesichris employees had transferred to
Willaware. Willare had developed familiarity with Jesichris’s products, especially its
plastic-made automotive parts.
That sometime in November 2000, Jesichris discovered that Willaware had been
manufacturing and distributing the same automotive parts with exactly similar design,
same material and colors but was selling these products at a lower price as Jesichris’s
plastic-made automotive parts and to the same customers.
Issue:
Whether or not Jesichris violated Section 168 of the Intellectual Property Code?
Ruling:
Ruling:
The concept of "unfair competition" under Article 28 is very much broader than that
covered by intellectual property laws. Under the present article, which follows the
extended concept of "unfair competition" in American jurisdictions, the term covers even
cases of discovery of... trade secrets of a competitor, bribery of his employees,
misrepresentation of all kinds, interference with the fulfillment of a competitor's contracts,
or any malicious interference with the latter's business.
Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination
or any other unjust, oppressive or high-handed method shall give rise to a right of action...
by the person who thereby suffers damage."
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must
involve an injury to a competitor or trade rival, and (2) it must involve acts which are
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or...
otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or
interest is a minor factor; the essence of the matter appears to be a private wrong
perpetrated by... unconscionable means.
Here, both characteristics are present.
First, both parties are competitors or trade rivals, both being engaged in the manufacture
of plastic-made automotive parts.
Second, the acts of the petitioner were clearly "contrary to good conscience" as petitioner
admitted having employed respondent's former... employees, deliberately copied
respondent's products and even went to the extent of selling these products to
respondent's customers.
As aptly observed by the court a quo, the testimony of petitioner's witnesses indicate that it
acted in bad faith in competing with the business of respondent, to wit:
In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must
involve an injury to a competitor or trade rival, and (2) it must involve acts which are
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or...
otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or
interest is a minor factor; the essence of the matter appears to be a private wrong
perpetrated by... unconscionable means.
Pearl and Dean Inc. v Shoemart Inc.
GR No. 148222
August 15, 2003

FACTS:

Pearl and Dean (Phil.), Inc. (PDI) is engaged in the manufacture of advertising display units
simply referred to as light boxes. PDI was able to secure a Certificate of Copyright
Registration, the advertising light boxes were marketed under the trademark “Poster Ads”.

In 1985, PDI negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in certain SM Makati and SM Cubao. PDI submitted for
signature the contracts covering both stores, but only the contract for SM Makati, however,
was returned signed. Eventually, SMI’s informed PDI that it was rescinding the contract for
SM Makati due to non-performance of the terms thereof.

Years later, PDI found out that exact copies of its light boxes were installed at different SM
stores. It was further discovered that SMI’s sister company North Edsa Marketing Inc.
(NEMI), sells advertising space in lighted display units located in SMI’s different branches.

PDI sent a letter to both SMI and NEMI enjoining them to cease using the subject light
boxes, remove the same from SMI’s establishments and to discontinue the use of the
trademark “Poster Ads,” as well as the payment of compensatory damages.

Claiming that both SMI and NEMI failed to meet all its demands, PDI filed this instant case
for infringement of trademark and copyright, unfair competition and damages.

SMI maintained that it independently developed its poster panels using commonly known
techniques and available technology, without notice of or reference to PDI’s copyright. SMI
noted that the registration of the mark “Poster Ads” was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word “Poster Ads” is a
generic term which cannot be appropriated as a trademark, and, as such, registration of
such mark is invalid. On this basis, SMI, aside from praying for the dismissal of the case,
also counterclaimed for moral, actual and exemplary damages and for the cancellation of
PDI’s Certification of Copyright Registration, and Certificate of Trademark Registration.

Issue: Whether the owner of a registered trademark legally prevent others from using such
trademark if it is a mere abbreviation of a term descriptive of his goods, services or
business?

Ruling:

On the issue of trademark infringement, the petitioner’s president said “Poster Ads” was a
contraction of “poster advertising.” P & D was able to secure a trademark certificate for it,
but one where the goods specified were “stationeries such as letterheads, envelopes, calling
cards and newsletters.”Petitioner admitted it did not commercially engage in or market
these goods. On the contrary, it dealt in electrically operated backlit advertising units
which, however, were not at all specified in the trademark certificate.

Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of P &
D to secure a trademark registration for specific use on the light boxes meant that there
could not have been any trademark infringement since registration was an essential
element thereof.

There was no evidence that P & D’s use of “Poster Ads” was distinctive or well-known. As
noted by the Court of Appeals, petitioner’s expert witnesses himself had testified that ”
‘Poster Ads’ was too generic a name. So it was difficult to identify it with any company,
honestly speaking.”This crucial admission that “Poster Ads” could not be associated with P
& D showed that, in the mind of the public, the goods and services carrying the trademark
“Poster Ads” could not be distinguished from the goods and services of other entities.

“Poster Ads” was generic and incapable of being used as a trademark because it was used in
the field of poster advertising, the very business engaged in by petitioner. “Secondary
meaning” means that a word or phrase originally incapable of exclusive appropriation with
reference to an article in the market might nevertheless have been used for so long and so
exclusively by one producer with reference to his article that, in the trade and to that
branch of the purchasing public, the word or phrase has come to mean that the article was
his property.