119 Willaware Products V Jesichris Manufacturing (2014) [Unfair Competition]

Gonzales, Rafael

Willaware Producs Corporation V Jesichris Manufacturing Corporation

G.R. No. 195548

September 3, 2014

FACTS: Jesichris Manufacturing Company manufactures and distributes plastic and metal products as
well as car parts made from plastic, while Willaware produces and distributes plastic and metal
kitchenware. Jesichris filed for damages for unfair competition with prayer for permanent injunction to
enjoin Willaware Products from manufacturing and distributing plastic-made automotive parts similar to
theirs. Jesichris avers that the proximity of their offices and the departure of their employees for Willaware
has lead to an increasing similarity in the products sold by Willaware. They further allege that Willware
had been selling products with exactly the same design made with the exact same material as theirs but
at a lower price point. They contend that this similarity constitutes unfair competition.

ISSUES:1. Whether or not there is unfair competition. 2. What damages are proper, if in fact respondents
are entitled to any.

HELD: 1. Yes. 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." It is not competition per se that is gives rise to damages, but competition that is unfair. It
is not competition using fair and just means but competition using oppressive methoses that deprive
persons from a fair chance at earning income. For competition to be considered “unfair” two elements
must be present, to wit; (1) Involves injury to a competitor or trade rival and (2) using acts that are
contrary to good conscience. It is essentially an intentional act of competition using unconscionable
means giving rise to injury of a private nature. It is clear in this case that the act of Willaware in both
shifting its main product from kitchenware to auto-parts, and poaching respondent’s employees, and then
selling the same products at a lower price point evince an intent to drive respondent out of business in
order to take over the market.

2. Nominal damages and attorney’s fees. The Court affirmed the Court of Appeals ruling that no actual
damages can be awarded since the actual pecuniary loss was not proven, thus it modified the Trial
Court’s award of actual damages in the sum of 2 Million pesos to nominal damages in the sum of 200
thousand pesos. The reason for this is because it was in fact proven that Willaware acted maliciously in
breach of a right held by Jesichris causing injury to the same, but the actual extent of this damage was
not proven. While there was in fact unfair competition, since the specific pecuniary damage suffered by
respondent was not proven, nominal damages are proper.