G.R. No. 212705, September 10, 2014.
ROBERTO CO, Petitioner, vs. KENG HUAN JERRY YEUNG and EMMA YEUNG, Respondents.

FACTS

Respondents Keng Huan Jerry Yeung and Emma Yeung (Sps. Yeung) are the owner of Greenstone Pharmaceutical in Hong Kong and the owner of Taka Trading, the exclusive Philippine importer and distributor, respectively, of “Greenstone Medicated Oil Item No. 16” (Greenstone). On April 24, 2000, Emma Yeung’s brother, Jose Ruivivar III, purchased a bottle of Greenstone from Royal Chinese Drug Store in Binondo, Manila, owned by Ling Na Lau. He found the product to be inauthentic, having a different smell and weaker heat effect. On May 4, 2000, Yeung investigated at the store and found seven bottles of counterfeit Greenstone on display. The store’s proprietor, Pinky Lau (sister of Ling Na Lau), stated the items came from petitioner Roberto Co of Kiao An Chinese Drug Store, who offered them as “Tienchi Fong Sap Oil Greenstone” (Tienchi). Pinky Lau provided a written note detailing these events. Sps. Yeung filed a civil complaint for trademark infringement and unfair competition against the Laus and Co. Co denied supplying counterfeit items, claiming his stocks came only from Taka Trading. The Laus denied selling Greenstone, claimed the Tienchi items were left by an unidentified person, and asserted Pinky was forced to sign the note.

ISSUE

Whether or not the Court of Appeals correctly upheld Co’s liability for unfair competition.

RULING

Yes, the Court of Appeals correctly upheld Co’s liability. The petition for review under Rule 45 generally bars questions of fact, and the petitioner failed to show any exception warranting a review. The factual findings of the Regional Trial Court (RTC), affirmed by the CA, are final and conclusive. Both courts found that Sps. Yeung established by preponderance of evidence that Co conspired with the Laus in selling/distributing counterfeit Greenstone products to the public. The counterfeit products were packaged in bottles identical to the original, giving rise to a presumption of fraudulent intent under the rules governing unfair competition. Unfair competition is defined as passing off one’s goods as those of another, deceiving the public. Co’s actions constituted unfair competition. However, Co was properly exculpated from trademark infringement because the registration of the “Greenstone” trademark was not proven to exist at the time of the acts complained of (May 2000), a prerequisite for such a suit. The RTC awarded, and the Supreme Court sustained, temperate damages (Php 300,000.00) for the unquantifiable pecuniary loss (e.g., damage to goodwill), moral damages (Php 200,000.00), exemplary damages (Php 100,000.00), attorney’s fees (Php 100,000.00), and costs of suit. The petition was denied and the CA Decision and Resolution were affirmed.