Philippine Supreme Court Jurisprudence > Year 1941 > April 1941 Decisions > G.R. No. 46817 April 18, 1941 - TEODORO KALAW NG KHE v. LEVER BROTHERS CO.

083 Phil 947:

La recurrida Lever Brothers Company inicio esta accion en el Juzgado de Primera Instancia de Manila (causa civil No. 48386) para que el recurrente Teodoroo Kalaw Ng Khe, que negocia como Hoc Chuan Ho, sea declarado culpable de infraccion de marcas industriales y de competencia ilegal; para que las marcas industriales que uso ilegalmente sean canceladas y se le prohiba continuar usandolas en el mercado, y para que sea obligado a rendir cuenta de las ventas que hizo de los articulos aue llevaban las mismas. El Director de la Oficina de Comercio fue incluido como demandado con el fin de que cancele el registro en su oficina de las marcas industriales del recurrente. El Tribunal de Apelacion, decidiendo la apelacion interpuesta por la recurrida, revoco la sentencia que dicto el Juzgado de Primera Instancia sobreseyendo la demanda, con las costas. En su decision el Tribunal de Apelacion ordeno al Director de Comercio que cancele las marcas industriales de Teodoro Kalaw Ng Khe, el recurrente, que consisten en la palabra "Lux" y en un diseño, serie No. 11348, Exhibit 1, registrados el 5 de Mayo de 1933 y en las palabras "Lifebuoy Hair Pomade," serie No. 11377, Exhibit "2", registradas el 3 de Junio de 1933, y prohibio a perpetuidad al recurrente el uso de dichas marcas industriales en pomadas y otros articulos de semejante calidad, con las costas a su cargo. En su resolucion que dicto a consecuencia de ias mociones de reconsideracion que se presentaron el Tribunal de Apelacion modifico su decision, eliminando de ella los pronunciamientos que declaraban invalidas las marcas industriales de la recurrida Nos. 10357 y 10363 de la Oficina de Comercio, Exhibits A y C; reafirmando en todo lo demas la citada decision. De la decision y resolucion asi promulgadas el recurrente apelo y presento la consiguiente solicitud de certiorari.

Los hechos del asunto se exponen en la decision del Tribunal de Apelacion * en estos terminos:chanrob1es virtual 1aw library

On December 24, 1930, the plaintiff, a corporation organized under the laws of the State of Maine, and located and doing business at Cambridge, State of Massachusetts, U. S. A., caused to be registered in the Bureau of Commerce the word Lux as its trade-mark "for soap of all kinds; soap powder; soap flakes; soap in paste and liquid form; saponaceous products; washing compounds; blueing; laundry supplies; starch; bleaching preparations; detergents; cleaning, scouring and polishing preparations; water softeners." In the declaration under oath filed by the plaintiff as required in section 11 of Act 666, it stated that the trade-mark had been continuously and exclusively used in its business since August 26, 1921; and that it had been applied or affixed to the goods by means of a printed label on which the trade-mark was shown. The trade-mark bears serial No. 10357 of the Bureau of Commerce (Exhibit A). On December 27, 1930, the plaintiff caused to be registered in the Bureau of Commerce a trade- mark consisting of the word Lux, "a border of mosaic design the representation of flowers, the words ’toilet form’ and the name and address of the applicant, the whole within a rectangular frame," for the same goods or products as those of the preceding trade-mark. In the declaration under oath filed by the plaintiff as required by law, it stated that the trade-mark had been continuously and exclusively used in its business since January 9, 1926; and that it had been applied or affixed to the goods by means of a printed label on which the trade-mark was shown. This trade-mark bears serial No. 10364 of the Bureau of Commerce (Exhibit B). On December 27, 1930, the plaintiff caused to be registered in the same Bureau a trade-mark consisting of the word Lifebuoy and a design representing it for similar goods or products as those of the two preceding trade-marks. In the declaration under oath filed by the plaintiff as required by law, it stated that the trade-mark had been continuously and exclusively used in its business since August 26, 1921; and that it had been applied or affixed to the goods by means of a printed label on which the trade-mark was shown. This trade-mark bears serial No. 10363 of the Bureau of Commerce (Exhibit C).

On May 5, 1933, the defendant Teodoro Kalaw Ng Khe caused to be registered in the Bureau of Commerce a trade-mark for hair pomade, consisting "of the word Lux, a border of small squares, the representation of flowers, the words ’Hair Pomade’ and the initials ’N. K.’ enclosed within a diamond, the whole design is within a rectangular frame." In the declaration under oath filed by him as required in section 11 of Act 666, he stated that the trade-mark had been continuously and exclusively used by him in his business since 1932. The trade-mark bears serial No. 11348 of the Bureau of Commerce (Exhibit D of the plaintiff and Exhibit 1 of the defendant). On June 3, 1933, the same defendant caused to be registered in the Bureau of Commerce a trade-mark for hair pomade, consisting "of the words Lifebuoy Hair Pomade generally used upon a rectangular label with a red background. The word Lifebouy may be written in any form or style without altering the essential feature of the trade-mark, being the word Lifebuoy." In the declaration under oath filed by him as required by law, he stated that the trade-mark had been continuously and exclusively used in his business since the year 1932. This trade-mark bears serial No. 11377 of the Bureau of Commerce (Exhibit E of the plaintiff and Exhibit 2 of the defendant).

On March 27, 1934, the plaintiff caused to be registered in the Bureau of Commerce a trade-mark for soap of all kinds and toilet articles, consisting of the word Lifebuoy printed, lithographed or painted in white letters and also the words Health Soap in yellow letters on a red background with a yellow band on the borders, and also the word Lifebuoy printed, lithographed or painted in white letters on a red foundation on two sides of said facsimile, as well as the words ’For Toilet and Bath’ printed or impressed in white letters on a red foundation, with a yellow band on the border. On the back of the said facsimile, the following words appear:chanrob1es virtual 1aw library

Protection. — Its clean scent tells you.

Face. — Lifebuoy’s gentle, soothing, protective lather deep- cleanses pores of waste matter. Aided by its bland oils of palm fruit and coconut, Lifebuoy promotes radiant complexions. Fine as a shampoo, too.

Hands. — 27 germ diseases may be spread by hands. Clean hands are a great protection. Lifebuoy aids in removing germs. Wash hands, always with Lifebuoy, especially before meals.

Body. — Pores are continuously giving off odor-causing waste - a quart daily is normal. The same properties that have made Lifebuoy famous as a health soap give you protection against offensive body and perspiration odors, common to all people. To keep body always sweet, bathe daily with Lifebuoy.

LEVER BROTHERS CO.

Cambridge, Massachusetts

Made in U. S. A.

In the declaration under oath filed by the plaintiff as required by law, it stated that "the trade-mark is displayed on the wrappers, cardboard cartons, packages, containers containing the goods, or it is painted, printed or lithographed or impressed on the labels, packages or containers of the goods;" that "the trade-mark has been continuously and exclusively used in the business of said corporation since August 26, 1921;" and that "the class of merchandise to which the trade-mark is appropriated is class 4 of the classification of merchandise — chemicals, medicines and pharmaceutical preparations, and the particular description of the goods comprised in said class on which said trade-mark is used is pink carbolic soap, soap of all kinds, toilet articles and other medicinal or pharmaceutical preparations, except hair pomade." This trademark bears serial No. 11685 of the Bureau of Commerce (Exhibit M). On April 10, 1934, the plaintiff caused to be registered in the Bureau of Commerce a trade- mark for soap of all kinds and toilet articles, consisting "of the words Lux Toilet Soap printed in two colors of violet (dark and light), and surrounded by a floral design, printed in green and violet. On the back of the wrapper is the name of the manufacturer, in violet, i. e.’Lever Brothers Co., Cambridge, Mass.,’ and the words ’Made in U. S. A.’ also printed in violet, with the same floral design printed in green and violet. The wrapper has a border design consisting of green, violet and yellow square dots. The wrapper consists of coated paper printed on a background of buff colored squares. The words ’Lux Toilet Soap’ with a floral design also appear on the tablet of soap and on the back of the tablet also appear the words ’Lever Brothers Company, Cambridge, Mass.’ in a rectangle." In the declaration filed by the plaintiff as required by law, it stated that "the trade-mark is displayed on the wrappers, cardboard cartons, packages, containers containing the goods, or it is painted, printed or lithographed or impressed on the labels, packages or containers of the goods;" that "the trade-mark has been continuously and exclusively used in its business since August 26, 1921;" and that "the class of merchandise to which the trade-mark is appropriated is class 4 of the classification of merchandise — chemicals, medicines and pharmaceutical preparations, and the particular description of the goods comprised in said class on which said trade-mark is used is white toilet soap, soap of all kinds, toilet articles and other medicinal and pharmaceutical preparations, except hair pomade," This trade-mark bears serial No. 11689 of the Bureau of Commerce (Exhibit N).

On March 21, 1934, when the application for registration of the trade-mark "Lifebuoy Health Soap," serial No. 11685 (Exhibit M), was filed in the Bureau of Commerce, there was a trade-mark "Lifebuoy for Hair Pomade" already registered in the name of the defendant Teodoro Kalaw Ng Khe, so the officer in charge of registration of trade-marks called the attention of Attorney Trias representing the plaintiff who agreed to write, as he did write, on the declaration the words "except for hair pomade" and his initials. In the application or declaration filed on March 27, 1934, for the registration of the trade-mark "Lux Toilet Soap," serial No. 11689 (Exhibit N), there were written the words "except for hair pomade." The amendments referred to were made by Attorney Trias after consultation with Smith, Bell & Co., Ltd., which was the agent of the plaintiff in the Philippines. Under the classification made by the Bureau of Commerce, the plaintiff’s products referred to in Exhibits A, B and C come under class No. 3 and those of the defendant Teodoro Kalaw Ng Khe referred to in Exhibits D and E come under class No. 4. The soaps bearing the trade-mark "Lux Toilet Soap" on the wrapper, and the trade-mark "Lifebuoy Health Soap" on the container, are products of the plaintiff, of whom Smith, Bell & Co., Ltd. was the exclusive agent since 1924, imported from the United States and sold in the Philippines, through the agent’s branches in Cebu, Iloilo, Legaspi, Tabaco and Cagayan de Misamis. The volume of sales, wholesale and retail, of the "Lux" soap from 1930 to 1934 in the Philippines was, as follows: Box of 500 cakes: 4,945 boxes in 1930; 8,049 in 1931; 8,979 in 1932; 10,441 in 1933; and 7,876 from January to November, 1934. Box of 100 cakes: 6,744 boxes in 1930; 7,243 in 1931; 7,915 in 1932; 6,431 in 1933; and 6,764 from January to November, 1934. The volume of sales, wholesale and retail, of the "Lifebuoy" soap from 1930 to 1934 was, as follows: Box of 500 cakes: 502 boxes in 1932; 1,025 in 1933; and 1,285 from January to November, 1934. Box of 100 cakes: 3,732 boxes in 1930; 3,327 in 1931; 3,396 in 1932; 3,015 in 1933; and 2,757 from January to November, 1934. The advertisement for the sale of these soaps was made in newspapers, sign boards, travelling trucks which distributed the soaps, and by display thereof in show cases and shelves, the cost of advertisement in 1934 amounting to P12,000. The majority of retailers of the products were Chinese who owned stores on Calle Rosario, Comercio, Marcelino de Santos, Tabora, Santo Cristo, and Rizal Avenue. The jars containing Lifebuoy and Lux hair pomade of the defendant Teodoro Kalaw Ng Khe were also displayed side by side with the soaps of the plaintiff and sold in the same stores where the soaps of the plaintiff were sold, the jar of hair pomade manufactured by said defendant marked Exhibit S having been purchased by the manager of the import department of Smith, Bell & Co., Ltd., in the store at 147 Calle Rosario; the jar of hair pomade manufactured by said defendant marked Exhibit T, in the store at 139 Calle Rosario; Exhibit U also manufactured by said defendant, at 127-129 Calle Rosario; Exhibits V and W also manufactured by said defendant, at 117-B Calle Rosario, all said stores selling toilet articles, including the plaintiff’s Lux and Lifebuoy soaps such as those marked Exhibits X and Y.

Discutiendo la cuestion de si el recurrente infringio las marcas industriales de la recurrida, el Tribunal de Apelacion emitio la siguiente interesante opinion.

The plaintiff contends that it is the first user of the trade- marks (Exhibits A, B and C); that it had held registration thereof long before the defendant Teodoro Kalaw Ng Khe used his; that the trade-marks of said defendant (Exhibits 1 and 2) should not have been registered, because they were intended for use upon goods of the same descriptive properties as those of the plaintiff; and that the classification by the Bureau of Commerce is not controlling and creates no right as against the first user.

Section 3, Act 666, provides:jgc:chanrobles.com.ph

"The ownership or possession of a trade-mark, heretofore or hereafter appropriated, as in the foregoing section provided, shall be recognized and protected in the same manner and to the same extent, as are other property rights known to the law. To this end any person entitled to the exclusive use of a trade-mark to designate the origin or ownership of goods he has made or deals in may recover damages in a civil action from any person who has sold goods of a similar kind, bearing such trade-mark, and the measure of the damages suffered, at the option of the complaining party, shall be either the reasonable profit which the complaining party would have made had the defendant not sold the goods with the trade-mark aforesaid, or the profit which the defendant actually made out of the sale of the goods with the trade-mark, and in cases where actual intent to mislead the public or to defraud the owner of the trade-mark shall be shown, in the discretion of the court, the damages may be doubled. The complaining party, upon proper showing, may have a preliminary injunction, restraining the defendant temporarily from use of the trade-mark pending the hearing, to be granted or dissolved in the manner provided in the Code of Civil Procedure, and such injunction upon final hearing, if the complainant’s property in the trade-mark and the defendant’s violation thereof shall be fully established, shall be made perpetual, and this injunction shall be part of the judgment for damages to be rendered in the same cause as above provided."cralaw virtua1aw library

The above-quoted section corresponds to section 16 of the Act of Congress of February 20, 1905.

A trade-mark is a property right. Unfair competition is a tort and strictly one of fraud. (E. Spinner & Co. v. Neuss Hesslein Corporation, 54 Phil., 224, 231.) Under our statute, registration of a trade-mark is a prerequisite to an action for technical infringement (section 4, Act 666, as amended by Act 3332). To maintain an action arising from unfair competition no such registration is necessary, although unfair competition may also be committed against the goods of another with a registered trade-mark. In the case of E. Spinner & Co. v. Neuss Hesslein Corporation, supra, it was said: "The law governing trade-mark rights as well as unfair competition in this jurisdiction is found in Act 666 of the Philippine Commission, which is a reduction to statutory form of the jurisprudence developed by the courts of England and the United States in connection with the subjects mentioned; and to the summary of substantive law expressed in the statute are added the provisions relative to the registration of trade-marks." (pp. 230-231.)

The use by one of a trade-mark identical with a registered trade- mark belonging to another seems necessary to constitute an infringement, for the law uses the phrase "bearing such trade-mark." (La Insular v. Jao Oge, 42 Phil., 366, 369.) But such was not the intent of the Philippine Commission that reduced to statutory form the jurisprudence developed by the courts of England and the United States. A close resemblance between two trade-marks would be sufficient to constitute infringement under section 3 of Act 666. (Inchausti & Co. v. Song Fo & Co., 21 Phil., 278, 283.) Colorable imitation is deemed sufficient for an infringement. (Clarke v. Manila Candy Co., 36 Phil., 100, 113.) Under our law, an infringement of a trade-mark results from fraudulent use of another’s trade-mark or a colorable imitation thereof. Similarity is the test of infringement of trade-mark, but this is not such similitude as amounts to identity. (Forbes, Munn & Co. v. Ang San To, 40 Phil., 272, 274, 275.) If an exact reproduction, counterfeit, copy or imitation, of the genuine trade-mark be required, it would make the remedy available in very few cases, since most traders desirous of filching the trade of others in this way will use colorable imitations, or suggestive reproductions of the trade-mark which they intend to appropriate rather than exact counterfeits. (La Insular v. Jao Oge, supra.) That such is the correct interpretation of the law is confirmed by the provisions of section 13, Act 666, which in part provides: "But no alleged trade- mark or trade-name shall be registered . . . which is identical with a registered or known trade-mark owned by another and appropriate to the same class of merchandise, or which so nearly resembles another person’s lawful trade-mark or trade-name as to be likely to cause confusion or mistake in the mind of the public, or to deceive purchasers." Under the previous as well as under the present law of trade-marks in the United States (Acts of March 3, 1881 and February 20, 1905) after which our law is patterned, a colorable imitation constitutes an infringement.

It results from the foregoing that there is an infringement of a registered trade-mark, when a person, partnership, or corporation, other than the owner thereof, had used a reproduction, counterfeit, copy, or spurious imitation of the genuine registered trade-mark, or a colorable imitation thereof, upon goods of similar kind to those manufactured or dealt in by the lawful owner of the registered trade- mark, and said person, partnership, or corporation had sold the goods with said trade-mark. To entitle an owner of a registered trade-mark to restrain the use of his trade-mark upon goods manufactured or dealt in by another, and to ask for accounting or recover damages for such infringement, three elements must concur: first, use by another person of a reproduction, counterfeit, copy, or spurious imitation of the genuine registered trade-mark or a colorable imitation thereof; second, similarity in kind of the goods manufactured or dealt in by such person to which the trade-mark is attached, to those of the lawful owner of the registered trade-mark; and, third, sale by such person of said goods with the trade-mark.

By a comparison of the plaintiff’s trade-mark consisting of the word Lux and a design, serial No. 10364 (Exhibit B), registered on December 27, 1930, and the trade-mark of the defendant Teodoro Kalaw Ng Khe consisting of the word Lux and a design, serial No. 11348 (Exhibit 1), registered on May 5, 1933, it is apparent that the latter is a colorable imitation of the former. In the case of E. Spinner & Co. v. Neuss Hesslein Corporation, supra, the Supreme Court said. "It has been held in the Supreme Court of the United States that the use of only one of the words constituting a trade-mark may be sufficient to constitute an infringement, and it is not necessary to this end that all of the words comprising the trade-mark should be appropriated (Saxlehner v. Eisner & Mendelson, Co., 179 U. S., 20; 45 Law. ed. 60)." (P. 234)

Se habia suscitado igualmente la cuestion de si los articulos en que el recurrente habia usado las marcas industriales eran similares o parecidos a los que empleaba la recurrida para sus marcas industriales, y sobre este extremo el Tribunal de Apelacion, resolviendo afirmativamente, dijo:.

The next point to be determined is whether pomade and soap are goods of similar kind. We are of the opinion that they are. Both are toilet articles.

"Goods are in the same class when the general and essential characteristics of the goods are the same, so that the general public would be likely to be misled if the same mark were used, or whenever the use of a given trade-mark or name or symbol would enable an unscrupulous dealer to palm off on unsuspecting customers spurious goods as being the genuine goods of the proprietor of the trade-mark, or when, for any other reason, they are so related or associated, either in fact or in the mind of the public, that a common trade-mark would probably lead purchasers to conclude that the several articles have a common origin, In recent years the tendency has been to extend the protection given to the owner of a trade-mark so that, unless the use which another makes of it is so foreign to the owner’s as to insure against any identification of the two, it is unlawful. The owner of a trade-mark which is arbitrary, strange, and fanciful is entitled to a monopoly of use for his mark in a wider field than is he who employs a mark not of that character. Also, the nature of the business in which the trade-mark is used is, in some measure, determinative of whether certain goods are within the general class. It has been said that classification depends more on commercial custom than the inherent nature of the products." (63 C. J., 318-319.)

"The phrase ’same descriptive properties’ must be construed to effectuate the dominant purpose of a section to prevent confusion and deception, as indicated by the first paragraph authorizing registration of a mark by which the goods of the owner may be distinguished from other goods of the same class, so that, whenever it appears that confusion might result, the goods have the same descriptive properties. California Packing Corporation v. Price Booker Mfg. Co. (1923) 285 F. 993, 52 App. D. C. 259, holding that pickles and condiments are goods of the same descriptive properties as canned fruits and vegetables, since they are sold in the same stores, put out in similar containers, and used in connection with each other, and a person seeing a trade-mark on a container of pickles would be likely to assume they were produced by the same concern as that which produced canned fruit or vegetables bearing a similar mark.



"If the use of the marks by the contending parties would be likely to lead the public to believe that the goods to which they are applied were produced by the same concern or person, the goods possess the ’same descriptive properties.’ Application of B. F. Goodrich Co., (1923) 285 F. 995, 52 App. D. C., 261, holding that pneumatic tires for automobiles and rubber hose and belting have the same descriptive properties.

"Validity of a trade-mark cannot depend alone on classification or indexing by the Patent Office, and a valid trade-mark cannot he obtained by two different manufacturers for goods in the same general class, having the same descriptive properties and similar essential characteristics, so that the general public would be misled, though they are placed by the patent office in different classes. Aluminum Cooking Utensil Co., v. Sargoy Bros. & Co., (D. C. N. Y., 1921) 276 F. 447." (U. S. C. A., Title 15, section 85, pp. 92-93.) .

In Kassman & Kessner, Inc., v. Rosenberg Bros. Co., 10 F. (2d) 904-905, it was held:jgc:chanrobles.com.ph

"It is a well-established rule that, where doubt arises upon such a question, the courts incline to resolve the doubt against the newcomer. The reason for this rule is that the filed from which a person may select a trade-mark is practically unlimited, and hence there is no excuse for impinging upon or even closely approaching the mark of a business rival. O. & W. Thom. Co. v. Dickenson, 46 App. D. C., 306; Lambert Pharmacal Co. v. Mentho-Listine Chemical Co., 47 App. D. C., 197; Waltke & Co. v. Schafer & Co., 263 F. 630, 49 App. D. C., 254."cralaw virtua1aw library

The third element of infringement concurs in this case. The defendant Teodoro Kalaw Ng Khe sold the goods with the imitated trade- mark.

En relacion con la accion sobre competencia ilegal el Tribunal de Apelacion hizo las siguientes consideraciones:chanrob1es virtual 1aw library

We now come to the question of unfair competition. Section 7, Act 666, as amended by Act 3423, provides:jgc:chanrobles.com.ph

"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 the manner of their manufacture, 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 who holds a duly registered patent therefor or who has long been accustomed to manufacture or sell such goods and who is other than the actual manufacturer or dealer, and who clothes the goods with such appearance for the purpose of deceiving the public and 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, and 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; and in order that the action shall lie under this section, actual intent to deceive the public and defraud a competitor may be inferred from similarity in the appearance of the goods as packed or offered for sale to those of the complaining party."cralaw virtua1aw library

"Generally, the term ’unfair competition’ presupposes competition of some kind. The doctrine is usually invoked when there is an actual market competition between the analogous products of plaintiff and defendant; and so it has been natural enough to speak of it as the doctrine of unfair competition; and it has been held, that there must be actual competition before there can be any unfair competition, and that there cannot be competition unless there is something to compete with. However, the tendency of the courts has been to widen the scope of protection in the field of unfair competition. They have held that there is no fetish in the word ’competition,’ and that the invocation of equity rests more vitally on the element of unfairness. Accordingly it is now held that the doctrine of unfair competition is not confined to cases of actual market competition between similar products of the parties, but that it extends to all cases in which one party fraudulently seeks to sell his goods as those of another; that it does not necessarily involve unfair competition in the sale of goods, but the unfair appropriation and use of a competitor’s mark, with the intention to profit in the sale of goods of a related character." (63 C. J., 389-390.)

"If a sufficient relationship or analogy exists between the goods to which the marks are applied as to make it likely that an ordinary buyer at retail is likely to assume from the marks upon them that they have a common source, the defendant is guilty of infringement and unfair competition. It is confusion of origin, not confusion of goods, which controls. Vick Chemical Co. v. Vick Medicine Co., 8 F. (2d) 49, 52 ’aff. 11 F. (2d) 33.’" (63 C. J., 390, footnotes.)

There seems to be no question that under the law and jurisprudence the defendant is guilty of unfair competition for having used the label consisting of the word "Lux" and a design upon jars containing pomade manufactured and sold by him. The goods of the plaintiff and the defendant are related goods, both being toilet articles; and the ordinary buyer of plaintiff’s and defendant’s goods to which the trade-mark is applied would likely assume from such mark that they have a common source, or that the defendant’s goods are in some way connected with the plaintiff. The instant case involves an unfair appropriation and use by the defendant of the plaintiff’s trade-mark with the intention to profit by the sale of his goods which are related to those of the plaintiff.

As regards the plaintiff’s trade-mark consisting of the words "Lifebuoy Health Soap" (Exhibit M), we have said that the plaintiff cannot maintain an action for infringement for lack of registration prior to that of the defendant. But although prior registration of a trade-mark is required in case of infringement, such registration is not necessary in case of unfair competition. In an action for unfair competition, the trade-mark, emblem, sign, device, or label attached to the goods, the appearance of the package or wrappings containing the goods, or the devices or words thereon, must have been known and in use. In the present case, although the alleged date of the use of the trade-mark, as stated by the plaintiff in its verified declaration cannot be believed, for reasons hereinbefore stated, the evidence, however, shows that the sale of the plaintiff’s soap in the Philippines (Exhibit Y), the container of which bears its trade-mark Exhibit M, began in 1924 (see testimony of Jose Javier, p. 31, t.s.n.) . For that reason, the plaintiff’s trade-mark printed or lithographed on the container of its soap was known and in use before the year 1932 when the defendant used his, and prior to the date of the registration of his trade-mark (Exhibit 2) which was on June 3, 1933. Under the rules and principles already set forth, the use by the defendant of the trade-mark consisting of the words "Lifebuoy Hair Pomade," serial No. 11377 (Exhibit 2), registered on June 3, 1933 upon pomade manufactured and sold by him, constitutes an unfair competition.

Notwithstanding the finding that there had been an infringement of the plaintiff’s trade-mark (Exhibit B) by the defendant, and that the latter is guilty of unfair competition for having used the trade- mark Exhibit 2 upon pomade manufactured and sold by him, no damages can be awarded as none has been established.

En la decision de las mociones de reconsideracion que se habian presentado el Tribunal de Apelacion, al sentar la conclusion de que el recurrente habia infringido igualmente la marca "Lifebuoy" de la recurrida, se expreso en la forma siguiente:As a result of further consideration of the case and review of authorities, we have come to the conclusion that an arbitrary or fanciful word which is neither descriptive nor deceptive may be adopted and used as a valid trade-mark.

"A ’fanciful and arbitrary’ word is not only the safest, but also the strongest mark, since every infringer is suspected of attempting to capitalize upon the reputation and good-will of its owner." (Deremberg on Trade-Mark Protection and Unfair Trading, pp. 351-316.)

"General rule as to common words. — From these decisions we are able to deduce a general rule as to the appropriatio of words in common use, as follows: Words in common use may be appropriated as trade-marks if they are adopted originally, or by usage have come, to indicate primarily the origin or ownership of a commercial article to which they are applied, and if they are not geographical, in the sense of being the names of localities of production, or not the generic name of the article, or merely descriptive of it, or of its qualities, ingredients or characteristics. Another well-recognized rule is that a trade-mark must not be deceptive." (Paul on The Law on Trade-Marks, section 35, pp. 54- 55.)

"Words as trade-marks. — As stated by Judge Rapallo, ’trade-marks . . . may consist . . . simply of word or words.’ It is no objection to the appropriation of a word as a trade-mark that it is ’in common use.’ Of course the word so adopted must neither be descriptive nor deceptive, or open to either of the other disqualifications which prevent its serving as a proper indication of origin or ownership." (Hopkins on The Law of Trade-Marks, Trade-names and Unfair Competition, 3d. ed., section 56, pp. 141-142.)

"Common words used in an arbitrary sense. — A word in common use but applied to a product in an arbitrary or fanciful sense, may be good trade-mark." (Nims on The Law on Unfair Competition and Trade- Marks, 3d. ed., section 203, p. 534.)

In Armour & Co. v. Louisville Provision Co., 283 Fed., 42, 45, 47, although the Circuit Court of Appeals for the Sixth Circuit held that Armour & Co. had not satisfactorily established the adoption and use of its alleged trade-mark "Star," except as part of a trade-mark "Armour’s Star," it also held that the word "Star," or a symbol thereof, "should be regarded as fanciful and as suggestive, rather than as purely descriptive, and thus as capable of being made the subject of a valid trade-mark, if not already exclusively appropriated."cralaw virtua1aw library

In Menendez Et. Al., v. Holt Et. Al., 128 U. S., 514, 520, the words "La Favorita" as applied to flour was held a valid trademark. The court said that the complainants used "the words ’La Favorita’ to designate flour selected by them, in the exercise of their best judgment, as equal to a certain standard. The brand did not indicate by whom the flour was manufactured, but it did indicate the origin of its selection and classification. It was equivalent to the signature of Holt & Co., to a certificate that the flour was the genuine article which had been determined by them to possess a certain degree of excellence. It did not, of course, in itself indicate quality, for it was merely a fancy name and in a foreign language, but it evidenced that the skill, knowledge, and judgment of Holt & Co., had been exercised in ascertaining that the particular flour so marked was possessed of a merit rendered definite by their examination and of a uniformity rendered certain by their selection."cralaw virtua1aw library

"The Courts held that the doctrine of origin and ownership was not to be interpreted as requiring that the buyer must deduce from the mark the identity of the manufacturer." (Deremberg on Trade-Mark Protection and Unfair Trading, p. 35.)

"It is not necessary that a trade-mark should on its face show the origin, manufacture or ownership of the article to which it is applied. It is sufficient that by association with such article in trade it has acquired with the public an understood reference to such origin etc." (Dennison Mfg. Co., v. Thomas Mfg. Co., 94 Fed., 501, 654.)

Accordingly, the words Lux and Lifebuoy adopted, used and registered by the appellant are valid trade-marks and should be accorded protection. Their use by another upon goods similar to those of the owner of the registered trade-marks should be enjoined.

En su primer señalamiento de error el recurrente sostiene que no hubo infraccion de las marcas industriales de la recurrida porque de acuerdo con las mismas conclusiones del Tribunal de Apelacion dichas marcas industriales se han apropiado y usado para articulos que no pertenecen a la misma clase de mercancias, y que las marcas industriales de ambas partes no se compiten entre si.

En su segundo señalamiento de error el recurrente pretende que no existe competencia ilegal porque de acuerdo con las mismas conclusiones del Tribunal de Apelacion las marcas industriales en disputa fueron apropiadas y usadas para articulos que no pertenecen a la misma clase de mercancias y que no se compiten entre si.

Ambos señalamientos de error quedan resueltos en sentido desfavorable a las pretensiones del recurrente con solo recordar que el Tribunal de Apelacion, despues de considerar los hechos, la ley y las autoridades aplicables, declaro que las pomadas en que el recurrente habia empleado las marcas industriales discutidas pertenecen a la misma clase de mercancias usadas por la recurrida para sus marcas industriales porque las pomadas son de todos modos articulos para el tocador.

El recurrente sostiene que no pudo haber incurrido en infraccion ni en competencia ilegal de marcas industriales puesto que el mismo Tribunal de Apelacion admitio que las pomadas en que uso sus marcas industriales y los articulos de tocador en que la recurrida empleo las suyas no son mercancias que se compiten entre si. Esta pretension queda refutada con lo que el Tribunal de Apelacion dijo sobre el particular en su decision sobre las mociones de reconsideracion:chanrob1es virtual 1aw library

Our attention has been called to the prayer of the complaint for accounting and not for damages. We had not overlooked the prayer for accounting as basis of an award for damages; but in holding that the appellant is not entitled to damages for the reason above stated, we had in mind the fact that the goods of the appellant and those of the appellee Teodoro Kalaw Ng Khe, though similar, are non-competing. Damage cannot result in the sale of non-competing goods. Cases cited by counsel for the appellant in which accounting had been directed or damages awarded, involved the sale of goods competing with those of the owner of a registered trade-mark. In our reading of American cases we have not run across a single case involving non-competing goods wherein accounting had been ordered or damages awarded. The last holding may appear inconsistent with our finding that the appellee Teodoro Kalaw Ng Khe is guilty of unfair competition. But it must he recalled that the appellee is held guilty of unfair competition on the ground of deception as to the origin of the goods sold by him, and not of competition of goods. In other words, the unfair competition consists not in the confusion of goods but of origin.

Se deniega la solicitud de certiorari, con las costas al recurrente. Asi se ordena.

Avanceña, Pres., Diaz y Horrilleno, MM., estan conformes.

Laurel, M., conforme con el resultado.

Endnotes:

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* Decision of the Court of Appeals is published in 39 Off. Gaz., No. 62, pp.

1479-1486, May 24, 1941, with a note, "Affirmed by the Supreme Court (G. R. No. 46817, April 18, 1941)"