Professional Documents
Culture Documents
*
G.R. No. 172835. December 13, 2007.
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* THIRD DIVISION.
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tion; and (6) the extent to which the information could be easily or
readily obtained through an independent source.
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CHICO-NAZARIO, J.:
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12 Id., at p. 300.
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228 SUPREME COURT REPORTS ANNOTATED
Air Philippines Corporation vs. Pennswell, Inc.
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some article of trade having a commercial value. A trade
secret may consist of any formula, pattern, device, or
compilation of information that: (1) is used in one’s
business; and (2) gives the employer an opportunity to
obtain an advantage
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over competitors who do not possess
the information. Generally, a trade secret is a process or
device intended for continuous use in the operation of the
business, for example, a machine or formula, but can 19
be a
price list or catalogue or specialized customer list. It is
indubitable that trade secrets constitute proprietary rights.
The inventor, discoverer, or possessor of a trade secret or
similar innovation has rights therein which may be treated
as property, and ordinarily an injunction will be granted to
prevent the disclosure of the trade secret by one who
obtained the information 20“in confi-dence” or through a
“confidential relationship.” American
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17 Id., citing Palin Mfg. Co., Inc. v. Water Technology, Inc., 103
Ill.App.3d 926, 59 Ill.Dec. 553, 431
18 AMJUR EMPLOYMENT § 178, citing Saunders v. Florence
Enameling Co., Inc., 540 So. 2d 651 (Ala. 1988); Air Products and
Chemicals, Inc. v. Johnson, 296 Pa. Super. 405, 442 A.2d 1114 (1982). The
foregoing citation also expounded that trade secrets need not be technical
in nature. Market-related information such as information on current and
future projects, as well as potential future opportunities for a firm, may
constitute a trade secret., citing Air Products and Chemicals, Inc. v.
Johnson, 296 Pa. Super. 405, 442 A.2d 1114 (1982).
19 Id., citing Saunders v. Florence Enameling Co., Inc., 540 So. 2d 651
(Ala. 1988); Air Products and Chemicals, Inc. v. Johnson, 296 Pa. Super.
405, 442 A.2d 1114 (1982). A former employee of an insurance company,
who routinely received information regarding the company’s customer list
and policy termination dates while serving as vice-president, was barred
from disclosing that information, even though the company had partially
disclosed the customer list in attempts to secure new clients. Alexander &
Alexander, Inc. v. Drayton, 378 F. Supp. 824 (E.D. Pa. 1974), aff’d, 505
F.2d 729 (3d Cir. 1974).
20 9 A.L.R.3d 665, citing Am. Jur., Injunctions (Rev. ed. § 72). The
Restatement of the Law of Torts § 757, emphasizes that liability
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jurisprudence has utilized the following factors to
determine if an information is a trade secret, to wit:
In Cocoland Development23
Corporation v. National Labor
Relations Commission, the issue was the legality of an
employee’s termination on the ground of unauthorized
disclosure of trade secrets. The Court laid down the rule
that any determination by management as to the
confidential nature of technologies, processes, formulae or
other so-called trade secrets must have a substantial
factual basis which can pass judicial scrutiny. The Court
rejected the employer’s naked contention that its own
determination as to what constitutes a trade secret should
be binding and conclusive upon the NLRC. As a caveat, the
Court said that to rule otherwise would be to permit an
employer to label almost anything a trade secret, and
thereby create a weapon with which he/it
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24 Id.
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lows the speakers to resist legal pressure to disclose its contents. (See
Barron’s Law Dictionary, 3rd ed., p. 373.) The term “privileged” in Section
2, Rule 24, Rules of Court, on depositions and discovery, refers to
privileged confidential communications under Sec. 21, Rule 130, Rules of
Court. (See Philippine Law Dictionary, 1982 ed., p. 484.)
26 Feria and Noche, CIVIL PROCEDURE ANNOTATED (2001 ed.), p.
553.
27 Agpalo, HANDBOOK ON CIVIL PROCEDURE (2001 ed.), p. 288.
28 Id., at p. 289.
29 Sec. 24. Disqualification by reason of privileged communication.—
The following persons cannot testify as to matters learned in confidence in
the following cases:
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(a) The husband or the wife, during or after the marriage cannot be
examined without the consent of the other as to any
communication received in confidence by one from the other
during the marriage except in a civil case by one against the other,
or in a criminal case for a crime committed by one against the
other or the latter’s direct descendants or ascendants;
(b) An attorney cannot, without the consent of his client, be examined
as to any communication made by the client to him, or his advice
given thereon in the course of, or with a view to, professional
employment, nor can an attorney’s secretary, stenographer, or
clerk be examined, without the consent of the client and his
employer, concerning any fact the knowledge of which has been
acquired in such capacity;
(c) A person authorized to practice medicine, surgery or obstetrics
cannot in a civil case, without the consent of the patient, be
examined as to any advice or treatment given by him or any
information which he may have acquired in attending such patient
in a professional capacity, which information was necessary to
enable him to act in capacity, and which would blacken the
reputation of the patient;
(d) A minister or priest cannot, without the consent of the person
making the confession, be examined as to any confession made to
or any advice given by him in his professional character in the
course of discipline enjoined by the church to which the minister or
priest belongs;
(e) A public officer cannot be examined during his term of office or
afterwards, as to communications made to him in official
confidence, when the court finds that the public interest would
suffer by the disclosure.
30 Francisco, EVIDENCE (3rd ed., 1996), pp. 171-173.
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ance with the requirements of this Code shall be made available to any
member of the general public, upon request, in the premises and during
regular office hours of the Commission, except as set forth in this Section.
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35 Section 12.—Public Access to Records, Reports or Notification.—The
public shall have access to records, reports, or information concerning
chemical substances and mixtures including safety data submitted, data
on emission or discharge into the environment, and such documents shall
be available for inspection or reproduction during normal business hours
except that the Department of Environment and Natural Resources may
consider a record, report or information or particular portions thereof
confidential and may not be made public when such would divulge trade
secrets, production or sales figures or methods, production or processes
unique to such manufacturer, processor or distributor, or would otherwise
tend to affect adversely the competitive position of such manufacturer,
processor or distributor. The Department of Environment and Natural
Resources, however, may release information subject to claim of
confidentiality to a medical research or scientific institution where the
information is needed for the purpose of medical diagnosis or treatment of
a person exposed to the chemical substance or mixture.
36 Mirpuri v. Court of Appeals, 376 Phil. 628; 318 SCRA 516 (1999).
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37 Id.
38 Id. In Mirpuri (id., at p. 666; p. 553), the Court acknowledges the
Philippines’ respect for intellectual and industrial property, and held:
The Intellectual Property Code of the Philippines declares that “an effective
intellectual and industrial property system is vital to the development of domestic
and creative activity, facilitates transfer of technology, it attracts foreign
investments, and ensures market access for our products.” The Intellectual
Property Code took effect on January 1, 1998 and by its express provision,
repealed the Trademark Law, the Patent Law, Articles 188 and 189 of the Revised
Penal Code, the Decree on Intellectual Property, and the Decree on Compulsory
Reprinting of Foreign Textbooks. The Code was enacted to strengthen the
intellectual and industrial property system in the Philippines as mandated by the
country’s accession to the Agreement Establishing the World Trade Organization
(WTO).
39 Id.
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embodied in the Constitution. We said that the drafters of
the Constitution also unequivocally affirmed that, aside
from national security matters and intelligence
information, trade or industrial secrets (pursuant to the
Intellectual Property Code and other related laws) as well
as banking transactions (pursuant to the Secrecy of Bank
Deposits 41Act), are also exempted from compulsory
disclosure.
Significantly, our cases on labor are replete with
examples of a protectionist stance towards the trade secrets
of employers. For instance, this Court upheld the validity of
the policy of a pharmaceutical company prohibiting its
employees from marrying employees of any competitor
company, on the rationalization that the company has a
right to guard its trade secrets, manufacturing formulas,
marketing strategies and other42 confidential programs and
information from competi-tors. Notably, it was in a labor-
related case that this Court made a stark ruling on the
proper determination of trade secrets.
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Sec. 7 [Article III]. The right of the people to information on matters of public
concern shall be recognized. Access to official records, and to documents, and
papers pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be afforded
the citizen, subject to such limitations as may be provided by law.
Sec. 28 [Article II]. Subject to reasonable conditions prescribed by law, the State
adopts and implements a policy of full public disclosure of all its transactions
involving public interest.
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In the case at bar, petitioner cannot rely on Section 77 of
Republic Act 7394, or the Consumer Act of the Philippines,
in order to compel respondent to reveal the chemical
components of its products. While it is true that all
consumer products
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242 SUPREME COURT REPORTS ANNOTATED
Air Philippines Corporation vs. Pennswell, Inc.
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generally unknown
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and not readily ascertainable by
the public. To the mind of this Court, petitioner was not
able to show a compelling reason for us to lift the veil of
confidentiality which shields respondent’s trade secrets.
WHEREFORE, the Petition is DENIED. The Decision
dated 16 February 2006, and the Resolution dated 25 May
2006, of the Court of Appeals in CA-G.R. SP No. 86329 are
AFFIRMED. No costs.
SO ORDERED.
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