Keller & Co. v. Kinkwa Meriyasu Co.
REITERATIONFacts
The Antecedents: Plaintiff-appellee, Ed. A. Keller & Co., Ltd., registered its trade-mark consisting of a picture of a peacock (pavo real) on October 24, 1904, and again on March 12, 1924. For forty years, it sold high-grade men's undershirts under this trade-mark, which became known to the public as "PAVO" or "MARCA PAVO." Defendant-appellant, Kinkwa Meriyasu Co. (P. I.), Inc., sold a cheap imitation of plaintiff's goods, using a trade-mark of a turkey with the name "PAVO" or "MARCA PAVO" printed thereon. Plaintiff alleged that the similarity deceived the buying public, causing grave damage and injury to its business, and sought P10,000 in damages and an injunction. Procedural History: The Court of First Instance of Manila rendered judgment in favor of the plaintiff, granting a permanent injunction against the defendant and awarding P10,000 in damages. The court dismissed the defendant's cross-complaint. The Petition: The defendant appealed the decision, assigning errors related to the infringement of its trade-mark and the award of damages.
Issue(s)
Whether the defendant's registered trade-mark infringed upon the plaintiff's trade-mark. Whether the court erred in allowing damages to the plaintiff, particularly in the amount awarded.
Ruling
The Supreme Court affirmed the judgment of the Court of First Instance, dismissing the appeal and ordering the defendant-appellant to pay the costs. The Court found the defendant guilty of unfair competition and upheld the award of P10,000 in damages and the permanent injunction.
Ratio Decidendi
On the issue of trade-mark infringement and unfair competition: The Court held that while neither party may have been using the identical trade-mark authorized by their original certificates, the action was essentially for unfair competition under Act No. 666 as amended by Act No. 3423. The evidence established that the plaintiff had continuously sold its goods under the trade name "MARCA PAVO" since at least 1913, building a reputation and substantial business value. The defendant began selling imitation goods under the same trade name in 1928, even after purchasing plaintiff's goods, and used a trade name with a picture of a turkey that was confusingly similar. The Court found that this similarity deceived the buying public, constituting unfair competition. The Court noted that the defendant's own manager testified that the defendant bought "MARCA PAVO" undershirts from the plaintiff, demonstrating knowledge of the plaintiff's established mark. The exhibits and testimony amply sustained the lower court's conclusion that the defendant was guilty of unfair competition. On the issue of damages: The Court found no merit in the argument that the plaintiff was not entitled to damages. Regarding the amount of P10,000, the appellant argued that certain expenses should be deducted from the gross profits. However, the Court found that the only evidence presented for these expenses was the oral testimony of the defendant's manager, which consisted of general estimates and lacked specific amounts actually paid. The Court emphasized that the defendant possessed the books and receipts that would show the exact amounts paid for these expenses, and this conclusive evidence was not produced. Therefore, the Court found no basis to reduce the damages awarded by the lower court.
Main Doctrine
The use of a trade-mark that is confusingly similar to an established trade-mark, even if not identical, constitutes unfair competition, entitling the injured party to damages and injunctive relief.