G.R. No. L-46817. April 18, 1941.
TEODORO KALAW NG KHE, trading as HOC CHUAN HO, petitioner, vs. LEVER BROTHERS CO., respondent.

FACTS

The respondent, Lever Brothers Company, a corporation organized under the laws of Maine, U.S.A., initiated an action in the Court of First Instance of Manila (Civil Case No. 48386) against the petitioner, Teodoro Kalaw Ng Khe, for infringement of industrial trademarks and unfair competition. The Director of the Bureau of Commerce was also included as a defendant to effect the cancellation of the petitioner’s trademark registrations. Lever Brothers had registered the trademarks “Lux” (Serial Nos. 10357 and 10364) and “Lifebuoy” (Serial No. 10363) for soaps, washing compounds, and similar products, claiming exclusive use since 1921 and 1926. Subsequently, the petitioner registered the trademarks “Lux” (Serial No. 11348) and “Lifebuoy Hair Pomade” (Serial No. 11377) for hair pomade in 1933, claiming use since 1932. Later, in 1934, Lever Brothers registered additional trademarks for “Lifebuoy” and “Lux Toilet Soap” for soaps and toilet articles, explicitly excluding hair pomade from their classification. The Court of First Instance dismissed the complaint. On appeal, the Court of Appeals reversed the dismissal. It ordered the Director of Commerce to cancel the petitioner’s trademarks (“Lux” Serial No. 11348 and “Lifebuoy Hair Pomade” Serial No. 11377) and perpetually enjoined the petitioner from using them on pomades and similar articles. However, upon motions for reconsideration, the Court of Appeals modified its decision by eliminating the pronouncements that declared Lever Brothers’ trademarks (Serial Nos. 10357 and 10363) invalid, reaffirming the rest of its decision. The petitioner appealed this decision and resolution.

ISSUE

Whether the petitioner is guilty of trademark infringement and unfair competition for using the trademarks “Lux” and “Lifebuoy” on hair pomade, which are similar to the respondent’s trademarks registered for soaps and toilet articles.

RULING

The Supreme Court denied the petition for certiorari, affirming the decision of the Court of Appeals. The Court held that the petitioner was guilty of unfair competition. The ruling was based on the principle that unfair competition can exist even when the goods are non-competing. The Court of Appeals found that the goods (hair pomade vs. soaps/toilet articles) were similar but non-competing. Nevertheless, the petitioner’s use of the trademarks “Lux” and “Lifebuoy” was likely to deceive the public as to the origin of the goods, constituting unfair competition through confusion of origin, not confusion of goods. The Court of Appeals clarified that while damages or an accounting were not awarded because the goods were non-competing and damage could not result from the sale of such goods, the prohibition against the use of the trademarks and their cancellation were proper remedies to prevent deception. Thus, the orders for cancellation and injunction were upheld.