Forbes, Munn & Co. v. Ang San To
REITERATIONFacts
The Antecedents: Forbes, Munn & Co., Ltd. (plaintiff) alleged that Ang San To (defendant) infringed upon its "Tres Soldados" trademark for khaki by using a similar mark, "Cinco Soldados," on inferior goods. Prior to the infringement, the plaintiff's sales averaged six hundred pieces per month. After the infringement began in May 1916, and until an injunction was issued in December 1916, plaintiff's sales dropped to two hundred pieces per month. Procedural History: The case was previously before the Supreme Court, which reversed the initial judgment and remanded the case to the trial court for the issuance of a permanent injunction and the determination of damages. The trial court awarded the plaintiff P8,000 in damages, which was P4,000 doubled due to a finding of intent to mislead. The Appeal: Both parties appealed the trial court's decision. The plaintiff argued it should have been awarded P32,112.84 in damages, representing its total loss in sales. The defendant argued that the plaintiff should recover nothing. The Supreme Court's inquiry was whether the evidence warranted a modification of the trial judge's decision on damages.
Issue(s)
Whether the trial court erred in awarding P8,000 in damages to the plaintiff. Whether the damages awarded should be based on the plaintiff's lost profits or the defendant's sales.
Ruling
The judgment of the trial court is affirmed, with costs against the defendant-appellant.
Ratio Decidendi
On Whether the trial court erred in awarding P8,000 in damages to the plaintiff: The Court found that the trial court's award of P8,000 was a reasonably probable estimate of the damages suffered by the plaintiff. While the plaintiff's sales diminished by P16,056.42 due to the infringement, the trial court reduced this amount, considering that it could not be determined with certainty that all the loss was solely due to the defendant's infringement. The trial court, finding actual intent to mislead, doubled the P4,000 it considered as the reasonable profit the plaintiff would have made, resulting in the P8,000 award. The Supreme Court was loath to change this appreciation of facts, especially since not all evidence was elevated to the Supreme Court. On Whether the damages awarded should be based on the plaintiff's lost profits or the defendant's sales: The Court clarified that damages in trademark infringement cases can be measured by either the profit the complaining party would have made or the profit the infringer actually made, as provided by Act No. 666, Section 3. The plaintiff's election was presumed to be for what it lost due to the defendant's breach, not what the defendant gained. The Court also emphasized that the defendant's sales do not solely constitute the measure of damages; the injury to the credit and reputation of the owner's mark due to the use of an infringing trademark on inferior goods must also be considered. Evidence of the defendant's sales is proper as proof of injury, not for measuring damages by the defendant's profits.
Main Doctrine
The owner of a trademark is entitled to recover actual damages suffered due to infringement. The measure of these damages, at the option of the complaining party, can be either the reasonable profit lost by the owner or the profit gained by the infringer. Furthermore, if actual intent to mislead the public or defraud the trademark owner is proven, the court may, in its discretion, double the damages. The extent of injury to the trademark's reputation, particularly when associated with inferior goods, is a critical component in damage assessment, not solely limited to the infringer's sales figures.