PARKE, DAVIS & COMPANY, PLAINTIFF AND APPELLEE, VS. KIU FOO & CO., LTD., REPRESENTED HEREIN BY ITS ATTORNEY-INFACT, SY YOCO & SONS, INC., AND TOMAS CONFESOR, AS DIRECTOR OF THE …

This is an appeal from a judgment of the
Court of First Instance of Manila in an action entitled by the
plaintiff “cancellation of trade-mark”.

The petition alleges in substance that the plaintiff has been
engaged in the manufacture sale of chemicals, medicines pharmaceutical
preparations for the past sixty-seven years; that for more than twenty
years it has manufactured sold in nearly all parts of the world a tonic
medicine known in the English Spanish languages as “Palatal” in the
Chinese language as “Pai Li To”, written in Chinese characters which
are the nearest phonetic translations of the English name “Palatol”;
that on May 22, 1933, the plaintiff registered its trade-mark in the
Bureau of Commerce of the Philippine Islands under registration No.
11,360.

It is alleged that the defendant Kiu Foo & Co., Ltd., of
Shanghai, China, on April 16, 1931, under registration No. 10,507,
procured the registration of a trade-mark in the Bureau of Commerce of
the Philippine Islands for the same kind of medicine under the name of
“Blandol”, above which in conspicuous Chinese letters are the words “Pu
Li To”; that said registration was a violation of paragraph 16 of the
“Revised rules regulations governing the registration of trade-marks
trade-names issued by the Bureau of Commerce Industry pursuant to
section 20 of Act No. 666 as amended” which provides that “a mark or
name identical with or similar to a registered or known trade-mark or
trade-name as would likely cause confusion or mistake in the mind of
the public or to deceive purchasers may not be registered”; that the
defendant’s use of the words “Pu Li To” in its trade-mark in prominent
letters was intended to deceive the Chinese customers of the plaintiff
prejudice the rights of the plaintiff. The prayer is that judgment be
rendered decreeing ordering the cancellation of the defendant’s
trade-mark “Blandol” in English “Pu Li To” in Chinese for further
general relief.

The defendant’s answer admits that the plaintiff manufactures a
medicine known in English Spanish as “Palatal” that the plaintiff has
sold a medicine in the Philippine Islands under that name; but it
expressly denies that the plaintiff ever used in the Philippine Islands
any Chinese name of said medicine. By way of special defense the
defendant sets up the priority in the registration of its trademark
(April 16, 1931) over that of the plaintiff (May 22, 1983) ; that the
trade-mark of the defendant is entirely different from the trade-mark
of the plaintiff.

Tomas Confesor, as Director of the Bureau of Commerce, was made a
party defendant. The petition states no cause of action whatever
against the Director of Commerce; indeed, it is stated in the petition
“the said Director of Commerce is joined in this action as a nominal
party defendant.” The Solicitor-General demurred on behalf of the
Director of the Bureau of Commerce this demurrer should have been
sustained. It was overruled the Director did not appeal, doubtless,
because no final decree or judgment was pronounced against him. The
court simply decreed the cancellation of the registration of the
defendant’s trade-mark on the assumption that this decree would effect
the cancellation ex proprio vigore.

It is provided in section 13 of Act No. 666 that “* * * in an
application for registration the Chief of the Bureau of Patents,
Copyrights, Trade-Marks (now the Director of the Bureau of Commerce)
shall decide the presumptive lawfulness of claim to the alleged
trade-mark.” The director having decided the presumptive lawfulness of
the claim of Kiu Foo & Co., Ltd., to its said trade-mark on April
16,1931, no oppositors appearing, there being no allegation or proof
that his act was illegal, capricious, arbitrary or fraudulent, there is
no basis whatever upon which a court may rest a decree to nullify what
was done by the director in accordance with law. Making the director a
“nominal party defendant” did not help matters. A “nominal party
defendant” is an illogical innovation upon the Code of Civil Procedure.

If this were simply a suit as to infringement of a trademark, the
defendant should prevail because of the priority of its registration.
However, Act No. 666 is not confined either in terms or in spirit to
the protection of trade-marks. As its very title indicates, it includes
“* * * defining unfair competition providing remedies against the same
* * *.” Section 7 of this Act is as1 follows:

“Any person who in selling his goods shall give
them the general appearance of goods of another manufacturer or dealer,
either in the wrapping of the packages in which they are contained, or
the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers to believe
that the goods offered are those of a manufacturer or dealer other than
the actual manufacturer or dealer, who clothes the goods with such
appearance for the purpose of deceiving the public defrauding another
of his legitimate trade, or any subsequent vendor of such goods or any
agent of any vendor engaged in selling such goods with a like purpose,
shall be guilty of unfair competition, shall be liable to an action for
damages, in which the measure shall be the same as that provided for a
violation of trade-mark rights, together with discretionary power in
the court to impose double damages, if the circumstances call for the
same. The injured party may also have a remedy by injunction similar to
that provided for in cases of violation of trade-marks. This section
applies in cases where the deceitful appearance of the goods,
misleading as to origin or ownership, is effected not by means of
technical trade-marks, emblems, signs, or devices, but by the general
appearance of the package containing the goods, or by the devices or
words thereon, even though such packages, devices, or words are not by
law capable of appropriation as trade-marks; in order that the action
shall lie under this section, actual intent to deceive the public
defraud a competitor shall affirmatively appear on the part of the
person sought to be made liable, but such intent may be inferred from
similarity in the appearance of the goods as packed or offered for sale
to those of the complaining party.”

The evidence in this case is convincing that the plaintiff has been
selling its product under the name of “Palatol” in the Philippine
Islands for many years prior to the registration of the defendant’s
trade-mark; that the formula which the defendant has registered in its
trade-mark is substantially, if not identically, the same formula as
the plaintiff’s; that the bottles of the defendant have the same shape
appearance as those used by the plaintiff; that although there is no
conflict between the name “Palatol” the name “Blandol”, the labels used
by the defendant exhibit the Chinese characters “Pu Li To” prominently,
being in much larger type than the name “Blandol”; that these Chinese
characters would easily mislead the Chinese customers of the plaintiff
to believe that they were purchasing the genuine medicine of the
plaintiff. The use, therefore, of the trade-mark of the defendant,
although registered prior to that of the plaintiff, constitutes unfair
competition, in that such trade-mark, when affixed to the packages
containing the imitation drug, would be likely to deceive purchasers
defraud the plaintiff of its legitimate trade. The intent to defraud
may be inferred from the similarity in appearance of the goods as
packed or offered for sale to those of the complaining party.

The finding of the trial court that the plaintiff has been selling
“Palatol” in the Philippines for some nineteen years would indicate
that the trade-name of “Palatol” was well established when the
defendant made application for its trade-mark. The facts above stated
the judicial proceedings in Shanghai in Hongkong wherein the
defendant’s applications for a similar trade-mark were rejected
indicate conclusively that the defendant was well aware of the value of
the trade-name of the plaintiff that its acts in seeking the
registration of the same trademark in the Philippines putting its
imitation article on the market here constitute unfair competition to
the damage of the plaintiff. (Cf. Ed. A. Keller & Co. vs. Kinkwa Meriyasu Co., 57 Phil., 262.)

It results, therefore, that the erroneous form of decree entered by
the trial court must be modified the cause remanded with directions to
enter a perpetual injunction (under the plaintiff’s prayer for general
relief) restraining prohibiting the defendant its agents from selling
or offering for sale any product under its trade-mark registered on
April 16, 1931, Serial No. 10,507, without special pronouncement as to
costs in this instance.

Malcolm, Villa-Real, Imperial, Diaz, JJ., concur.