GR L 3369; (September, 1907) (Digest)
FACTS
Jonas Brook Bros. (plaintiff) brought an action against Froelich and Kuttner (defendant) under section 7 of Act No. 666 of the Philippine Commission, seeking to enjoin the defendant from selling cotton thread in boxes labeled in a manner intended to deceive the public into believing that the thread was sold by the plaintiff. The defendant’s cotton thread was packaged and labeled with boxes and designs that were substantially similar in color, size, shape, and overall appearance to those used by the plaintiff. This similarity was so pronounced that it was likely to mislead ordinary purchasers into believing they were buying the plaintiff’s product. The defendant argued on appeal that the plaintiff, as a foreign corporation, lacked the legal standing to sue in the Philippine Islands due to non-compliance with registration requirements.
ISSUE
Whether or not the defendant’s use of packaging and labels that were substantially similar in appearance to those of the plaintiff, with the intention to deceive the public and defraud the plaintiff of its trade, constitutes unfair competition under Section 7 of Act No. 666 , and whether the plaintiff, as a foreign corporation, could maintain such an action.
RULING
Yes. The Supreme Court held that the defendant’s actions constituted unfair competition under Section 7 of Act No. 666 . The Court found that the extensive similarity between the defendant’s packaging and labels and those of the plaintiff was such as to justify the inference that the defendant intended to deceive the public and defraud the plaintiff. The Court also ruled that a foreign corporation, even if not registered in the Philippine Islands, could maintain an action for damages against another party for unfair competition, citing previous jurisprudence. Consequently, the judgment of the lower court was affirmed, ordering the defendant to account for profits derived from the sale of the deceptively packaged thread and enjoining them perpetually from selling the thread in packages with the offending labels.