GR L 1750; (October, 1905) (Digest)
G.R. No. L-1750
FACTS:
Plaintiff-appellee Guillermo Baxter secured a registered trademark for “Agua de Kananga” for a toilet water. He later contributed this trademark to the limited partnership Baxter & Co., of which he was the manager. Plaintiffs filed an action for unfair competition under Act No. 666 against defendant-appellant Zosimo Zuazua, alleging that he manufactured and sold a toilet water under the names “Kananga Superior” and “Kanangue” using bottles and labels that imitated and simulated their own, thereby deceiving the public. The trial court ruled in favor of the plaintiffs, enjoining the defendants from further manufacture and sale. Both parties appealed.
ISSUE:
1. Whether the defendant’s use of the labels and the word “Kananga” constituted unfair competition.
2. Whether the plaintiffs have an exclusive right to the use of the word “Kananga.”
RULING:
1. No, there was no unfair competition. The Supreme Court, upon inspection, found no identity or similarity between the labels used by the defendant and those of the plaintiffs. The differences were apparent and would not deceive the public. Since the bottles were universally used by all manufacturers per stipulation, their use alone did not constitute fraud. Under Section 7 of Act No. 666 , actual intent to deceive must be shown or inferred from the similarity of goods. With no similarity proven, no fraudulent intent could be inferred, and the action for unfair competition could not be maintained.
2. No, the plaintiffs do not have an exclusive right to the word “Kananga.” The Court affirmed the trial court’s finding that “Kananga” is the name of a well-known tree or flower in the Philippines. Under Section 2 of Act No. 666 (and the applicable Spanish Royal Decree), a designation that relates only to the name, quality, or description of the merchandise cannot be the subject of a trademark. Therefore, the word “Kananga,” as a generic name, could not be exclusively appropriated.
The judgment of the trial court was REVERSED. The preliminary injunction was dissolved. The finding that plaintiffs have no exclusive right to “Kananga” was sustained. Each party bore its own costs.