COCA-COLA BOTTLERS PHILS. NAGA PLANT V. GOMEZ (G.R. NO.

154491)

Petitioner Coca-Cola applied for a search warrant against Pepsi for hoarding empty Coke bottles in Pepsi’s
yard, an act allegedly penalized as unfair competition under the IP Code. MTC issued the search warrants and
the local police seized the goods. Later, a complaint against respondents was filed for violation of the IP Code.
Respondent contended that the hoarding of empty Coke bottles did not involve fraud and deceit for them to be
liable for unfair competition. MTC upheld the validity of the warrants. RTC voided the warrant for lack of
probable cause of the commission of unfair competition.

ISSUE:

WHETHER OR NOT RESPONDENT’S HOARDING OF COKE BOTTLES CONSTITUTE UNFAIR
COMPETITION.

RULING: NO.

From jurisprudence, unfair competition has been defined as the passing off (or palming off) or attempting to
pass off upon the public the goods or business of one person as the goods or business of another with the end
and probable effect of deceiving the public. One of the essential requisites in an action to restrain unfair
competition is proof of fraud; the intent to deceive must be shown before the right to recover can exist. The
advent of the IP Code has not significantly changed these rulings as they are fully in accord with what Section
168 of the Code in its entirety provides. Deception, passing off and fraud upon the public are still the key
elements that must be present for unfair competition to exist.

As basis for this interpretative analysis, we note that Section 168.1 speaks of a person who has earned
goodwill with respect to his goods and services and who is entitled to protection under the Code, with or
without a registered mark. Section 168.2, as previously discussed, refers to the general definition of unfair
competition. Section 168.3, on the other hand, refers to the specific instances of unfair competition, with
Section 168.3(a) referring to the sale of goods given the appearance of the goods of another; Section 168.3(b),
to the inducement of belief that his or her goods or services are that of another who has earned goodwill; while
the disputed Section 168.3(c) being a “catch all” clause whose coverage the parties now dispute.

Under all the above approaches, we conclude that the “hoarding” – as defined and charged by the petitioner –
does not fall within the coverage of the IP Code and of Section 168 in particular. It does not relate to any
patent, trademark, trade name or service mark that the respondents have invaded, intruded into or used
without proper authority from the petitioner. Nor are the respondents alleged to be fraudulently “passing off”
their products or services as those of the petitioner. The respondents are not also alleged to be undertaking
any representation or misrepresentation that would confuse or tend to confuse the goods of the petitioner with
those of the respondents, or vice versa. What in fact the petitioner alleges is an act foreign to the Code, to the
concepts it embodies and to the acts it regulates; as alleged, hoarding inflicts unfairness by seeking to limit the
opposition’s sales by depriving it of the bottles it can use for these sales. In this light, hoarding for purposes of
destruction is closer to what another law, R.A. No. 623 covers.
 ROBERTO CO vs. KENG HUAN JERRY YEUNG AND EMMA YEUNG
G.R. No. 212705, 10 September 2014

FACTS:

Ruivivar bought a bottle of Greenstone from Royal Chinese Drug Store in Binondo, Manila, owned by Ling Na
Lau. However, he doubted its authenticity because it had a different smell, and the heat it produced was not as
strong as the original Greenstone he frequently used. He then informed his brother-in-law Yeung, the owner of
Greenstone Pharmaceutical. The latter went to Royal and found 7 bottles of counterfeit Greenstone on display
for sale. He was told by Pinky Lau – the store’s proprietor – that the items came from Co of KiaoAn Chinese
Drug Store. According to Pinky, Co offered the products as “Tienchi Fong Sap Oil Greenstone” (Tienchi) which
she eventually availed from him.

Sps. Yeung filed a civil complaint for trademark infringement and unfair competition before the RTC against
Ling Na Lau, her sister Pinky Lau, and Co for allegedly conspiring in the sale of counterfeit Greenstone
products to the public.

The RTC ruled in favor of Sps. Yeung. It found that the Sps. Yeung had proven by preponderance of evidence
that the Laus and Co committed unfair competition through their conspiracy to sell counterfeit Greenstone
products that resulted in confusion and deception not only to the ordinary purchaser, like Ruivivar, but also to
the public. It, however, did not find the Laus and Co liable for trademark infringement as there was no showing
that the trademark “Greenstone” was registered at the time the acts complained of occurred. CA affirmed the
RTC Decision.

ISSUE:

 WHETHER OR NOT ONLY SUIT FOR UNFAIR COMPETITION WILL PROSPER CONSIDERING
THE TRADEMARK WAS NOT REGISTERED.

HELD:

YES, the defendants cannot be liable for trademark infringement. In the case at bar, the Court defined unfair
competition as the passing off (or palming off) or attempting to pass off upon the public of the goods or
business of one person as the goods or business of another with the end and probable effect of deceiving the
public. This takes place where the defendant gives his goods the general appearance of the goods of his
competitor with the intention of deceiving the public that the goods are those of his competitor.

Here, it has been established that Co conspired with the Laus in the sale/distribution of counterfeit Greenstone
products to the public, which were even packaged in bottles identical to that of the original, thereby giving rise
to the presumption of fraudulent intent.

Although liable for unfair competition, the Court deems it apt to clarify that Co was properly exculpated from the
charge of trademark infringement considering that the registration of the trademark “Greenstone”– essential as
it is in a trademark infringement case – was not proven to have existed during the time the acts complained of
were committed. In this relation, the distinctions between suits for trademark infringement and unfair
competition prove useful: (a) the former is the unauthorized use of a trademark, whereas the latter is the
passing off of one’s goods as those of another; (b) fraudulent intent is unnecessary in the former, while it is
essential in the latter; and (c) in the former, prior registration of the trademark is a pre-requisite to the action,
while it is not necessary in the latter.