Mighty Corporation and La Campana Fabrica De Tabaco, Inc. vs. E. & J.

Gallo Winery
and The Andresons Group, Inc. [G.R. No. 154342. July 14, 2004]

Facts:

 E. & J. Gallo Winery and The Andresons Group, Inc. sued Mighty Corporation and La
Campana Fabrica De Tabaco, Inc. in the Makati RTC for trademark and tradename
infringement and unfair competition, with a prayer for damages and preliminary
injunction.


Issue:

Whether or not petitioners (MIGHTY CORPORATION and LA CAMPANA FABRICA DE

TABACO, INC., ) were liable for trademark infringement, unfair competition and damages.

Held:

No. petitioners are not liable for trademark infringement, unfair competition and damages.

Respondents claim that GALLO wines and GALLO cigarettes flow through the same channels
of trade, that is, retail trade. If respondent’s assertion is true, then both goods co-existed
peacefully for a considerable period of time. It took respondents almost 20 years to know about
the existence of GALLO cigarettes and sue petitioners for trademark infringement. Given, on
one hand, the long period of time that petitioners were engaged in the manufacture, marketing,
distribution and sale of GALLO cigarettes and, on the other, respondents delay in enforcing their
rights (not to mention implied consent, acquiescence or negligence) we hold that equity, justice
and fairness require us to rule in favor of petitioners. The scales of conscience and reason tip far
more readily in favor of petitioners than respondents. Moreover, there exists no evidence that
petitioners employed malice, bad faith or fraud, or that they intended to capitalize on
respondent’s goodwill in adopting the GALLO mark for their cigarettes which are totally
unrelated to respondents GALLO wines. Thus, we rule out trademark infringement on the part of
petitioners.

Under Section 29 of the Trademark Law, any person who employs deception or any other means
contrary to good faith by which he passes off the goods manufactured by him or in which he
deals, or his business, or services for those of the one having established such goodwill, or who
commits any acts calculated to produce said result, is guilty of unfair competition. It includes the
following acts: (a) Any person, who in selling his goods shall give them the general appearance
of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping
of the packages in which they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer,
or who otherwise clothes the goods with such appearance as shall deceive the public and defraud
another of his legitimate trade, or any subsequent vendor of such goods or any agent of any
vendor engaged in selling such goods with a like purpose; (b) Any person who by any artifice, or
device, or who employs any other means calculated to induce the false belief that such person is
offering the services of another who has identified such services in the mind of the public; (c)
Any person who shall make any false statement in the course of trade or who shall commit any
other act contrary to good faith of a nature calculated to discredit the goods, business or services
of another.