G.R. No. L-4815, LA YEBANA COMPANY, plaintiff-appellee, vs. FRANCISCO CHUA SECO & CO., ET AL., defendants-appellants., December 2, 1909

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FACTS:
La Yebana Company (successor to Bear, Senior & Co.) registered the “La Sevillana” trade-mark for cigarettes in 1904. Francisco Chua Seco & Co. subsequently registered the “La Valenciana” trade-mark for similar cigarettes in 1907.

La Yebana Company filed a complaint for unfair competition under Act No. 666 , Section 7, alleging that Francisco Chua Seco & Co.’s cigarette wrappers bore a general appearance similar to “La Sevillana,” intended to deceive the public. Plaintiff sought a permanent injunction and damages.

The Court of First Instance found that despite specific differences in the figures on the wrappers, the “color and the general design of the wrappers of the defendants are so similar to those of the plaintiff that, unless they are examined by a person who is able to read, he would be apt to believe that the cigarettes offered by the defendants are such as are manufactured by the plaintiffs, and the general public buying these cigarettes would thus be deceived.” The CFI issued an injunction prohibiting the use of the “La Valenciana” label with the specific green and red design and awarded P82.62 in damages.

Francisco Chua Seco & Co. appealed, assigning the following errors: (1) insufficient resemblance between the trade-marks; (2) a duly registered trade-mark owner cannot be guilty of unfair competition; and (3) the “La Sevillana” trade-mark was not protected by law due to the plaintiff’s alleged non-compliance with Section 10 of Act No. 666 , which requires disclosure of assignment from the original owner.

Evidence showed that Francisco Chua Seco & Co. initially registered its trade-mark in black and white, but later decided to print its wrappers in green and redthe same colors as La Yebana Company’s “La Sevillana”after determining these colors were most favorably received by the public, despite having been previously advised by the registration chief about the resemblance to the plaintiff’s already registered green and red mark.

ISSUE:
1. Was there sufficient resemblance between the plaintiff’s and defendant’s cigarette wrappers to constitute unfair competition under Act No. 666 ?
2. Can a person whose trade-mark is duly registered be found guilty of unfair competition?
3. Is the plaintiff’s claim for protection against unfair competition barred by its alleged non-compliance with Section 10 of Act No. 666 (regarding assignment disclosure)?

RULING:
The Supreme Court AFFIRMED with modification the trial court’s decision.

1. Yes, there was sufficient resemblance to constitute unfair competition. The Court held that the striking feature of both trade-marks was the combination and tint of the green and red colors, which, when viewed as a whole and at a distance, created a general appearance likely to deceive the public. The defendant’s intent to imitate was inferred from its deliberate choice to use the green and red colors, despite prior warning of resemblance and initial registration in black and white, because those colors proved most popular, thus capitalizing on the established prestige of the plaintiff’s mark.
2. Yes, a person with a duly registered trade-mark can be found guilty of unfair competition. Registration merely provides prima facie evidence of ownership. Unfair competition under Act No. 666 focuses on the deceitful general appearance of goods (packaging, emblems, or words), which is distinct from technical trade-mark infringement. The law punishes actions that create an appearance likely to mislead purchasers, regardless of whether the offending mark is registered.
3. No, Section 10 of Act No. 666 is not applicable. This case is not primarily about the protection of trade-mark ownership or usurpation but about unfair competition. The law protects even an unregistered trade-mark if the complaining party proves long enough use to establish reputation, and that another’s use would injure them and deceive the public.

Therefore, the Supreme Court upheld the finding of unfair competition and the award of damages. It modified the injunction, specifying that Francisco Chua Seco & Co. was prohibited from using the green and red colors in the specific form, tone, tint, and combination presented in their Exhibit No. 14, or any general appearance resembling that of La Yebana Company, while allowing them to use their registered mark in other colors.