G.R. No. 41405, November 21, 1934
Parke, Davis & Company vs. Kiu Foo & Co., Ltd., represented by Sy Yoco & Sons, Inc., and Tomas Confesor, as Director of the Bureau of Commerce

FACTS

Plaintiff Parke, Davis & Company, a manufacturer of pharmaceutical products, has sold a tonic medicine under the name “Palatol” (known in Chinese as “Pai Li To”) in the Philippines for many years. It registered this trademark on May 22, 1933. Defendant Kiu Foo & Co., Ltd., earlier registered a trademark on April 16, 1931, for a similar medicine under the name “Blandol,” but with prominent Chinese characters for “Pu Li To.” Plaintiff sued for cancellation of defendant’s trademark, alleging it was intended to deceive Chinese customers. The trial court ordered the cancellation. The Director of the Bureau of Commerce was improperly joined as a nominal defendant.

ISSUE

Whether the defendant’s use of its registered trademark constitutes unfair competition, notwithstanding its prior registration date.

RULING

Yes. The Supreme Court modified the trial court’s judgment. While the defendant’s trademark registration was prior, its use constituted unfair competition under Section 7 of Act No. 666. The evidence showed defendant’s product had a substantially identical formula, used bottles of the same shape and appearance, and prominently displayed the Chinese characters “Pu Li To,” which were phonetically similar to plaintiff’s “Pai Li To.” This was likely to deceive purchasers, especially Chinese customers, into believing they were buying plaintiff’s product. The intent to defraud could be inferred from the similarity. The Court directed the trial court to issue a perpetual injunction restraining the defendant from selling any product under its registered trademark, but set aside the decree for cancellation of the registration, as the Director of Commerce’s administrative act in granting it was not shown to be illegal, capricious, or fraudulent.

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