Sapolin Co. v. Balmaceda
REITERATIONFacts
The Antecedents: Sapolin Co., Inc. (cross-plaintiff) filed a cross-complaint against Germann & Co., Ltd. (cross-defendant) and the Director of the Bureau of Commerce and Industry. Sapolin Co., Inc. sought to enjoin Germann & Co., Ltd. from selling products bearing the trade-mark "Lusolin," demanded an accounting of profits, payment of double the profits, and cancellation of the trade-mark certificate for "Lusolin" issued to Co Lu So and transferred to Germann & Co., Ltd. Procedural History: The Court of First Instance of Manila dismissed Sapolin Co., Inc.'s cross-complaint, ruling that it was not entitled to the remedies sought under Section 4 of Act No. 666, as amended by Act No. 3332, for failure to register its trade-mark in the Philippine Bureau of Commerce and Industry. The Petition: Sapolin Co., Inc. appealed, arguing that the lower court erred in not holding that "Lusolin" infringed its trade-mark "Sapolin," that its action for unfair competition was valid, and that Act No. 3332 was unconstitutional.
Issue(s)
Whether Section 4 of Act No. 666, as amended by Act No. 3332, is unconstitutional. Whether the trade-mark "Lusolin" constitutes an infringement of the trade-mark "Sapolin." Whether Sapolin Co., Inc. has a cause of action based on unfair competition. Whether the lower court erred in dismissing the cross-complaint.
Ruling
The Supreme Court reversed the decision of the Court of First Instance, remanding the case for further proceedings consistent with its findings. The Court held that Section 4 of Act No. 666, as amended by Act No. 3332, is constitutional and applicable to cases not involving trade-marks registered in the United States Patent Office. The Court found that the trade-mark "Lusolin" was a colorable imitation of "Sapolin" and that an action for infringement was proper.
Ratio Decidendi
On the constitutionality of Section 4 of Act No. 666, as amended by Act No. 3332: The Court held that the provision is constitutional and reconcilable with the Act of Congress of February 20, 1905. The Philippine Legislature, by enacting Section 14 of Act No. 666, as amended, and considering the Jones Law, did not intend to negate the protection afforded to trade-marks registered in the United States Patent Office. The provision's purpose is to encourage diligent registration within the Philippines, distinguishing it from cases involving foreign registrations. The Court stated, "All this goes to show that in enacting the said section 14 and the entire law of which it is a part (Acts Nos. 666 and 2460), the Philippine Legislature could not have intended to give to section 4 thereof, as amended by Act No. 3332, the strict interpretation that, unless a trade-mark or trade-name allegedly violated has been duly registered in the Bureau of Commerce and Industry, no action to cut short or prevent the violation can be taken against the infringer even in case of a trade-mark or trade-name registered in the Patent Office of the United States." On the infringement of the trade-mark "Lusolin" of "Sapolin": The Court found that the trade-marks "Lusolin" and "Sapolin" were almost the same in color, design, size, and other characteristics, including the sound produced by their pronunciation. The cross-defendant itself admitted the striking similarity in its letter, stating the marks were "in shape, design, color and printing as to deceive the public, specially that both are being used for paints." The Court reiterated that resemblance, not exact identity, constitutes a sufficient violation, and it is sufficient to prove that the essential characteristics have been imitated or copied. The Court cited Forbes, Munn & Co. vs. Ang San To, stating, "As already stated, the violation of the trade-mark is established by comparing it with the one allegedly violated and by showing that the resemblance between the two — resemblance which in the case at bar is admitted by the cross-defendant itself (Exhibit 9) — is of such a nature that one can be taken for the other; and it has also been stated that it is the said resemblance and not identify that constitutes a sufficient violation, or better still, the test for the detection of whether or not there is such a violation." On the cause of action for unfair competition: The Court held that an action for violation of a trade-mark or trade-name cannot be brought simultaneously with an action for unfair competition. This is because the former does not require fraud or deceit as an essential condition, unlike the latter. The Court referenced its ruling in Compañia Gral. de Tabacos vs. Alhambra Cigar & Cigarette Manufacturing Co., stating, "For the reasons and considerations appearing in said case it was said that an action for a violation of a trade-mark or trade-name cannot be brought at the same time as an action for unfair competition. The two actions cannot coexist because the first does not require, like the second, as an essential and indispensable condition that there be fraud or deceit." On the dismissal of the cross-complaint: The Court found that the lower court erred in dismissing the cross-complaint solely on the ground of non-registration in the Philippines. Given the findings of infringement and the applicability of international trade-mark protection, the case should have proceeded to determine the merits of the infringement claim. The Court concluded that the appealed decision should be reversed and the case remanded for proper orders and decision, taking into account the findings in favor of the cross-plaintiff.
Main Doctrine
A trade-mark or trade-name registered in the United States Patent Office is protected in the Philippines, and an action for infringement may be brought in Philippine courts even if the trade-mark or trade-name has not been registered in the Philippine Bureau of Commerce and Industry, provided that the Philippine Legislature did not intend to give a strict interpretation to Section 4 of Act No. 666, as amended by Act No. 3332, that would negate such protection.