FIRST DIVISION

G.R. No. 212705, September 10, 2014

ROBERTO CO, Petitioner, v. KENG HUAN JERRY YEUNG AND EMMA

YEUNG, Respondents.

The Facts

At the core of the controversy is the product Greenstone Medicated Oil Item No. 16
(Greenstone) which is manuf actured by Greenstone Pharmaceutical, a traditional
Chinese medicine manuf acturing f irm based in Hong Kong and owned by KengHuan
Jerry Yeung (Yeung), and is exclusively imported and distributed in the Philippines by
Taka Trading owned by Yeung’s wif e, Emma Yeung (Emma).

On July 27, 2000, Sps. Yeung f iled a civil complaint f or trademark inf ringement and
unf air competition bef ore the RTC against Ling Na Lau, her sister Pinky Lau (the Laus),
and Co f or allegedly conspiring in the sale of counterf eit Greenstone products to the
public.

In the complaint, Sps. Yeung averred that on April 24, 2000, Emma’s brother, Jose
Ruivivar III (Ruivivar), bought a bottle of Greenstone f rom Royal Chinese Drug Store
(Royal) in Binondo, Manila, owned by Ling Na Lau. However, when he used the product,
Ruivivar doubted its authenticity considering that it had a dif f erent smell, and the heat
it produced was not as strong as the original Greenstone he f requently used.

Having been inf ormed by Ruivivar of the same, Yeung, together with his son, John
Philip, went to Royal on May 4, 2000 to investigate the matter, and, there, f ound seven
(7) bottles of counterf eit Greenstone on display f or sale. He was then told by Pinky Lau
(Pinky) – the store’s proprietor – that the items came f rom Co of KiaoAn Chinese Drug
Store. According to Pinky, Co of f ered the products on April 28, 2000 as “Tienchi Fong
Sap Oil Greenstone” (Tienchi) which she eventually availed f rom him. Upon Yeung’s
prodding, Pinky wrote a note stating these events. 6 cralawred

In def ense, Co denied having supplied counterf eit items to Royal and maintained that
the stocks of Greenstone came only f rom Taka Trading. Meanwhile, the Laus denied
selling Greenstone and claimed that the seven (7) items of Tienchi were lef t by an
unidentif ied male person at the counter of their drug store and that when Yeung came
and threatened to report the matter to the authorities, the items were surrendered to
him. As to Pinky’s note, it was claimed that she was merely f orced by Yeung to sign the
same.7 cralawred

In a Decision8 dated October 27, 2008, the RTC ruled in f avor of Sps. Yeung,
The CA Ruling

In a Decision12 dated September 16, 2013, the CA af f irmed the RTC Decision.

Issue

whether or not the petitioner is guilty of unf air competition is guilty of unf air
competition and, thus, liable f or damages to respondents?

Held

The petition is without merit.

Unf air competition is def ined as the passing of f (or palming of f ) or attempting to pass
of f upon the public of the goods or business of one person as the goods or business of
another with the end and probable ef f ect of deceiving the public. This takes place where
the def endant 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. 18 cralawred

Here, it has been established that Co conspired with the Laus in the sale/distribution of
counterf eit Greenstone products to the public, which were even packaged in bottles
identical to that of the original, thereby giving rise to the presumption of f raudulent
intent.19 In light of the f oregoing def inition, it is thus clear that Co, together with the
Laus, committed unf air competition, and should, consequently, be held liable theref or.
To this end, the Court f inds the award of P300,000.00 as temperate damages to be
appropriate in recognition of the pecuniary loss suf f ered by Sps. Yeung, albeit its actual
amount cannot, f rom the nature of the case, as it involves damage to goodwill, be
proved with certainty. 20 The awards of moral and exemplary damages, attorney’s f ees,
and costs of suit are equally sustained f or the reasons already f ully-explained by the
courts a quo in their decisions.

Although liable f or unf air competition, the Court deems it apt to clarif y that Co was
properly exculpated f rom the charge of trademark inf ringement considering that the
registration of the trademark “Greenstone”– essential as it is in a trademark
inf ringement case – was not proven to have existed during the time the acts
complained of were committed, i.e., in May 2000.In this relation, the distinctions
between suits f or trademark inf ringement and unf air competition prove usef ul: (a) the
f ormer is the unauthorized use of a trademark, whereas the latter is the passing of f of
one’s goods as those of another; (b) f raudulent intent is unnecessary in the f ormer,
while it is essential in the latter; and (c) in the f ormer, prior registration of the
trademark is a pre-requisite to the action, while it is not necessary in the latter. 21
cralawred

WHEREFORE, the petition is DENIED.