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[ALHAMBRA CIGAR v. COMPANIA GENERAL DE TABACOS DE FILIPINAS](https://www.lawyerly.ph/juris/view/ce094?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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35 Phil. 62

[ G.R. No. 11490, October 14, 1916 ]

THE ALHAMBRA CIGAR AND CIGARETTE MANUFACTURING CO., PLAINTIFF AND APPELLANT, VS. COMPANIA GENERAL DE TABACOS DE FILIPINAS, DEFENDANT AND APPELLEE.

D E C I S I O N

JOHNSON, J.:

The only question  presented by this appeal is whether or not  the  defendant is guilty of unfair  competition  in the manufacture and  sale of a certain  cigar.   The plaintiff attempted to show that  the defendant was guilty  of a  violation of section 7 of Act No. 666 of the Philippine Commission, and claimed that it had  been damaged in the sum of P20,000, and prayed  for a permanent injunction  to restrain the defendant  from the further manufacture or  sale of the cigars  alleged to have been made in imitation of a cigar manufactured by the plaintiff, and for an accounting.

Upon the issues presented the lower court reached the conclusion that the defendant was not guilty of a violation of said Act and absolved it from all liability under the complaint, with costs against the plaintiff.  From that conclusion the plaintiff appealed to this court and made several assignments of error here.

An examination of the argument of the appellant with reference to said assignments of errors shows that the observation made by the appellee concerning the same is quite true.   The appellee says:
"While the appellant has made an assignment of errors, it has practically abandoned them in its brief.  There  is no discussion  of any specific error.  The  argument is  directed to the subject in general.  It  is like discharging a shotgun loaded  with birdshot.  If it scatters sufficiently something may be brought down.   No criticism of counsel is intended.  It was practically the only course they had open.  There was no error at  which a rifle ball could be directed."
An examination  of the record  discloses the  following facts:

The plaintiff and defendant are corporations engaged in manufacturing products of tobacco in the city of Manila. The plaintiff alleged that it had engaged in manufacturing a certain brand of cigars which  it named Especiales Alhambra, since the year  1906; that these cigars are made of superior quality of tobacco and wrapped with perfect leaves of Sumatra tobacco;  that each cigar is encircled with a band of a brown  color, on which is  imprinted  in gold color the word Especiales Alhambra; that the cigara are packed with distinguishable labels and marks; that the cigars present a very definite appearance; that the plaintiff had extensively advertised the said cigar as "The little brown label cigar."

The plaintiff further alleged that the cigars had acquired a reputation for their excellence and  had  been a source of great profit.   It  was alleged that three months preceding the filing of the  complaint  (July 19, 1915)  the defendant, "in disregard of plaintiff's rights and with intent to deceive the public and defraud the plaintiff," had sold and was selling a cigar ''made in similar form, size, and  appearance and in simulation of plaintiff's said  cigar" that defendant's cigar was named Especiales, and is "encircled with a brown colored band,  with the words 'Especiales Imbela,'  printed in gold letters upon it, with the intent to thereby imitate plaintiff's said cigars; that the defendant had so packed and ornamented the receptacles  and boxes containing its cigars, in colors and  forms of devices, as  to give its said cigars, when offered for sale, the general appearance of plaintiff's said brand of  cigars."

The plaintiff further alleged that all of said acts of the defendant  were done with the intent to deceive the public and to defraud the plaintiff and that such acts did actually deceive the buyers of plaintiff's cigars.

To the foregoing allegations of the plaintiff, the defendant appeared and denied generally all of the allegations of plaintiff's petition.

Upon the issue presented  by the petition and answer, the cause was brought on for trial, with the result above indicated.

Said section 7 of Act No.  666, for the alleged violation of which the present action was instituted, provides:
"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, 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 trademark 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 in junction similar to  that  provided  for in cases of violation of trademarks.   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 trademarks; and in order that the action  shall  lie  under this  section, actual intent to deceive the public and 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."
In addition to the oral testimony, the plaintiff presented Exhibits A and  B. Exhibit A is a  box of cigars  which the plaintiff claims the defendant was attempting to imitate. Exhibit B is a box of cigars which the plaintiff claims is an imitation of the  cigars  in Exhibit A and  constitutes the infringement or unfair competition complained of.  Exhibits  A and B, including the size of  the box,  labels, etc., are  as follows:

EXHIBIT A.

Exhibit  A of the plaintiff  was a box containing twenty five  cigars and was $!, inches long, by 5 1/4 inches  wide and 1 3/8 inches deep.

On the top of said box and in the center thereof there appeared the following label:

(See Image Vol. 35  Phil. 67)

On the inside of the top cover there appeared the following label:

(See Image Vol. 35  Phil. 68)

On the loose leaf immediately over the cigars there was the following label:

(See Image Vol. 35  Phil. 68)        

Over the end of the box and pasted on the outside thereof, there appeared the following label:

(See Image Vol. 35  Phil. 69)

On each cigar was the following band:

(See Image Vol. 35  Phil. 69)  

On the immediate front of the box there appeared the following label:

(See Image Vol. 35  Phil. 69)  

The box contained twenty five cigars, of which the following is one:

(See Image Vol. 35  Phil. 69)

EXHIBIT B.

Exhibit B of the defendant was a box containing  fifty cigars  and was 7 3/4 inches  long, by  5 1/8 inches wide, by 2 inches deep.

On the top of the said box and in the center thereof, there appeared the following label :

(See Image Vol. 35  Phil. 70)

On the inside of the cover there appeared the following label:

(See Image Vol. 35  Phil. 70)

On the loose leaf immediately over the cigars there appeared the following label:

(See Image Vol. 35  Phil. 71)

Over the end of the box and pasted on the outside thereof, there appeared the following label:

(See Image Vol. 35  Phil. 71 )

On each cigar was the following band:

(See Image Vol. 35  Phil. 72)

On the immediate front of the box there appeared  the following label:

(See Image Vol. 35  Phil. 72)

The box contained fifty cigars, of which the following is one:

(See Image Vol. 35  Phil. 72)

The lower court, after an  examination of  the evidence, states in the course of his opinion:
"There certainly is not sufficient similarity to justify the inference of actual intent  on defendant's part to deceive the public and defraud a competitor, and this is an essential element of unfair competition."
An action for unfair competition is distinguished from an action for a violation of  technical  trademarks  and is based upon the proposition that no dealer in merchandise should be allowed to  dress his goods  in simulation of the goods of another dealer, so  that purchasers desiring to buy the goods of the latter would be induced to  buy the goods of the former.  The  policy of the law is not to  prevent competition but to prevent  deceit and fraud.   A merchant is entitled to the fruits of his reputation and his ingenuity and  no other merchant will be allowed to simulate the appearance of the goods of the former,  for the  purpose of taking advantage of his  reputation and ingenuity in business.   The law does not, however  pretend  to prohibit or enjoin every similarity.  The similarity must be such that the ordinary purchaser will be deceived into the belief that the goods are those of another.  It must be a "similarity in the general appearance," or in  the  goods  "taken  as a whole."  (Alhambra Cigar, etc., Co. vs.  Mojica, 27  Phil. Rep.,  266; Coats vs. Merrick Thread Company, 149 U. S., 562; Enoch Morgan's Sons Company vs. Troxell, 89 N. Y., 292; P. Lorillard  Co.  vs.  Peper, 86  Fed. Rep., 956.)  It frequently happens that  goods  of  a particular class are labeled  by  all manufacturers in a common manner.  In cases  of that  sort, no manufacturer may appropriate to himself the method of labeling or packing his  merchandise and then enjoin other merchants from using it.  Instances of such  articles are  spools of  thread, soap, cigars,  etc. Thread, for example, is commonly put up on wooden spools of substantially the same size.   That is a result of business demands.  Soap is commonly sold in a similar sort of wrap per.   Cigars, as a rule, have the same funeral shape  and are usually labeled with  bands  of somewhat similar  color. They  are generally put  up in  packages or boxes of  like shape, size, and form.  A manufacturer of any one of these articles may put up his  particular  brand of goods in the common form, without running  the risk of being enjoined by another manufacturer.  He  will, however,  be enjoined if it clearly appears that there is a studied attempt to imitate  or  simulate certain distinctive features,  adopted by one manufacturer, for the   purpose of  identifying or distinguishing his  goods  from others of the same general class and appearance.

In the case of Coats vs. Merrick Thread Company, supra, the question presented to the court  was with regard to the similarity of the labels on spools of thread.  The labels of both parties were black  and gold,  with the name of the manufacturer, kind of thread, and the number of the thread stamped upon it.  These labels were  small and were attached to the end of  the spools.   The  court  found  that the small black and gold labels was in common use among manufacturers of that quality of  thread.  The court held, that in view of the limited space upon the label, and in view of the common right to use such label, the defendants were  fully within their rights.

In the case of Enoch Morgan's Sons Company vs. Troxell, supra, the question was raised with reference to the method of packing and  wrapping soap.  In discussing that question, the court said:
"The only points of similarity between the two articles sold  are that  they are both  small  cakes of soap covered with tinfoil or tinned paper and having a blue band around them, with gilt lettering.   The  cakes are not even of the same shape, one being nearly square, and the other oblong. But we are of the opinion that this  form of package, with a blue  band and gilt lettering,  can not be appropriated by the plaintiff as a trademark.  There is nothing peculiar about  it,  it is an appropriate and  usual  form in which to put up small cakes of soap and the law of trademarks has not yet gone so far as to enable  a party to appropriate such a  form of package and fashion of  label and exclude every one else from its use,  or from the use of anything resembling it."  (Fleischmann vs. Newman, 4 N. Y., Supp., 642.)
In the case of Fleischmann vs. Newman, supra, we have a further discussion  of the right of merchants to pack their merchandise in  the  ordinary and usual  form  adopted  by others.   In the course of the discussion, the court said:
"The only point of similarity between the two (packages) is in the shade of yellow which the groundwork of the labels has.   In the case of  both plaintiffs and defendant the shade is lighter than that  used by other dealers for twelve years past,  but each has its distinctive characteristics, none of which would be liable to mislead even a careless purchaser, as may plainly be seen by an inspection of the labels contained in the preliminary statement.  Under these circumstances the defendant can not be deemed to have simulated the design of  the plaintiffs' package so  as to give a  right of action  against  him, for the simple reason that he has done no more than other dealers have  done in putting up packages  of  this  description, which must necessarily be about of a prescribed size in  order to  be  marketable, and there is no law of this state which prohibits a manufacturer or dealer  from using the words 'Compressed Yeast.' The manufacture of  this article is open to all  competitors and they can not be  held liable in any  action to restrain them where they plainly put their name upon the label, even though they do happen to use light yellow for the background of the paper  upon  win the  description of the commodity  is given."
With reference to Exhibits A and B, upon a close examination some points of resemblance may possibly be  found. A casual examination, however, shows clearly that there is an essential and marked difference. The allegation  of unfair  competition, however, can not be based upon the fact that by a close examination a similarity may be found.  The similarity or simulation  must be such  as  to  defraud and  deceive the purchaser into the belief that he is purchasing the goods of one person believing them to  be the goods  of  another.   The question   is whether, taking the defendant's package and label as a whole, it so far copies or resembles the plaintiff's package and label, that a person of ordinary intelligence  would be  misled  into buying the one,  supposing he was buying the  other.  No inflexible definition can be given as to what will constitute unfair com petition.   Each case must depend  upon its own particular facts.  The rule which we are discussing can not be better stated  than the plaintiff himself states it in his brief:
"The resemblance spoken of in the law of unfair com petition is a resemblance  in the general appearance  of the goods,  in  the wrapping of the packages, or in the devices or words thereon,  or in any other feature  of their appearance which  would be  likely  to  deceive  purchasers.   It  is not enough for the plaintiff's  cause that in certain details there may be discovered something of similarity,  provided that in the  general appearance there  is a  decided dis similarity.   Nor is it  enough to save the defendant  that experts, on examination, can point to differences in details of the component  parts  of the markings  or wrappings. Details may present differences  and yet the whole be  very much alike and very deceptive  to the ordinary purchases using ordinary care. * *  *  *   An inspection of the cigars in question  will afford the best test of  their likeness  u general appearance."
The late Mr. Justice  Brewer of the Supreme Court of the United States,  in  the  case  of P.  Lorillard Co. vs.  Peper (86 Fed. Rep.,  956), in discussing the general question  of how unfair competition may be  determined, said:
"Summing it all up,  while there are certain minor points of resemblance which  have been forcibly urged upon our attention by  the counsel  for plaintiff, yet,  looking at the two packages with their labels, taking the tout ensemble it appears to us clear that they  are so essentially different that no one of ordinary  intelligence, desiring to  buy the one kind of tobacco, would  be misled into buying a pack age of the other.  We shall not stop to review the testimony which is offered upon the question whether the resemblances between  the  two  packages  and labels were calculated  to mislead,  or  whether in fact they did operate to  mislead. It is enough to say that there was testimony on both sides of these  questions, and perhaps, looking  at the matter  of the testimony alone, it might be difficult to  say on  which was the  preponderance; but such testimony, giving it all the weight that it is entitled to, does not disturb  the  conclusions which we have reached from an  inspection of the packages and labels themselves.  We can not surrender our own judgment  in  this  matter because others may be  of a different opinion,  or because it happens, in isolated in stances, that some  purchaser was so careless as not to detect the differences."
In the present case there is no proof in the  record  that any person or persons had  been deceived into purchasing the cigars of the defendant,  believing that he was purchasing the cigars of the plaintiff.  There is no  proof that any person or persons were actually deceived.   During the trial the plaintiff practically abandoned its contention that there was any resemblance or any attempt to simulate its cigars by the defendant,  except in the color of  the band or ring used on said cigars.  Marker, a witness called by the  plain tiff, testified:
"Q. In what particular way  do you  think a  man might get these cigars mixed ? A. Well, they are both made with Sumatra wrappers, the label being brown.   It is true, so far as the shape of the cigar is concerned, there is no re semblance.

"Q. As an expert, Mr. Marker, do you think  any person would be likely to mistake the general appearance of the package or  container of the Alhambra cigar  for that of the Tabacalera? A. The package, no; there would be no chance of his getting that mixed.

"Q. None whatever? A. No.

"Q. Isn't it a fact, Mr. Marker, that the shapes of these two cigars are  what may be termed in trade as distinctive shapes? A. Yes, sir.

"Q. They come under different distinctions? A. Yes, sir.

"Q. And  this is a very different shape, is it not? A. A very different shape; yes, sir.

"Q. How  many  other factories  manufacture Especiales? A. Probably four or five of them  I should  think.

"Q. And  have been for many years? A. Yes, sir.

"Q. You  do not contend that the Alhambra were the first to use the word Especial, by any means,  do you? A. No."

Strickler, testifying for the defendant,  states:

"Q. I say if you were lookingfor the cigar known as Especiales Alhambra  (Exhibit A) and were familiar with that cigar and liked it, do you think you would be  at all likely to take the cigar in Exhibit B, a different shaped cigar and ring? A. If I was familiar with Especiales Alhambra, I would not take an Especiales Flor de Isabela for it."
From an examination  on#the band of  the cigars of the plaintiff and a comparison of it with the  ring of the cigars of the defendant  (See Exhibits A and B above), it will at once be seen that there is no similarity in the shape of the two.  The color is not exactly the same.  The lettering  is different; the  names are different.  It is difficult to under stand, as Strickler testified, how  any person familiar with the cigars of the plaintiff could be deceived into accepting the cigars of the defendant.   The shape of the band is very different  from the shape  of the ring.   There  is also  a marked difference in the color of the two.  A most casual examination of the  two will show a wide difference.  The judgment of the eye upon the two is more satisfactory than evidence from any other source  as  to  the  possibility of parties being misled, so as to take one of the cigars for the other; seeing in such cases is believing, existing differences being at once  perceived and remaining in the mind  of the careful observer.   There is no evidence in the record that any one was ever misled by the alleged resemblance between the two cigars.  (Liggett & Myers Tobacco  Co. vs. Finzer, 128 U. S., 182.)

The plaintiff makes no pretention that it  has any ab solute exclusive right to the  use  of the brown color or of the use of the Sumatra wrapper,  nor to any of the infinite shapes and cigars, nor to any of the words of the alphabet. It does contend,  however, that when it has fashioned  a special  cigar,   has  clothed it in   a  certain wrapper,  has branded it with a  brown ring with  gold letters  and has named it Especiales, and has established a  trade for that cigar and made it popular and stylish because of its form, quality, and attractive appearance,  that no other manufacturer can thereafter commence to make a similar cigar, resembling it  in size and shape,  using the  same  Sumatra wrapper, using a similar brown ring with equal gold letters. and  with the  identical name.  That contention  of the appellant  is certainly in conformity with  the  provisions of the law.   The difficulty with it, however, is that the cigars in the present case are not similar, either in size or shape. The  bands or  rings are  not similar,  either  in their shape or the lettering thereon; neither are the names found upon the different bands or rings identically the same; neither are the colors exactly the same.

As has been stated in effect,  any one who sells goods packed, or labeled, or otherwise prepared in such a manner to induce intending purchasers to believe that the goods are of a make or origin other than the true, or who clothes his goods with a certain appearance for the purpose of deceiving the public, is  deemed guilty of unfair  competition as defined in section 7 of Act No. 666.   (Brook Bros. vs. Froelich & Kuttner, 8 Phil. Rep., 580.)  The true test of unfair competition is whether  certain goods have been intention ally clothed with an appearance  which  is likely to deceive the ordinary purchaser, exercising ordinary care, and not whether a certain  limited class of purchasers, with special knowledge  not possessed by  the  ordinary purchaser, could avoid a mistake by the exercise  of this special knowledge. (U. S. vs. Manuel, 7 Phil. Rep., 221; Song Fo & Co. vs. Tiu Ca Siong, 13 Phil.  Rep., 143; Inchausti & Co. vs. Song Fo & Co., 21 Phil. Rep.,  278; Baxter and Baxter & Co. vs. Zuazua, 5  Phil. Rep., 160; Nelle vs. Baer,  Senior  & Co., 5  Phil. Rep., 608.)

With reference  to the similarity of bands or rings upon cigars, we held in  the case of Nelle vs. Baer, Senior &  Co., supra, in the absence of  other proof, that the mere similarity in the appearance of two cigar rings  is not sufficient to show the actual intent to deceive the public which is required by Act No. 666, section 7.
"Facsimiles of the two rings are in the record before us, and they are so nearly alike in general appearance  that one might  pass for the other.   These rings  so  used on cigars are, however, so small, and are necessarily so similar in design and  appearance, that we should  hesitate to say that 'actual intent to deceive the public and defraud a  competitor  *   *  *  may  be inferred from the similarity in the goods.'"
In view  of all of the  foregoing and summing up all the arguments pro and con, while there are certain minor points of resemblance in the  bands of the two cigars presented, which have been forcibly urged  upon our attention by the respective counsel,  yet,  looking  at the two cigars, with special reference to the rings or bands used by the plaintiff and the defendant,  we are convinced that the two cigars. including their rings or  bands, are so essentially different that no one  of ordinary intelligence desiring to buy one would be misled or deceived into buying the other.  "It is not enough for plaintiff's cause that in certain details and upon a  close examination there may be  discovered some thing of a similarity in the general appearance of the cigars, or bands or rings.  The similarity must be such as to deceive and to defraud."  It  must  be such as to induce a person to buy the cigars of the plaintiff,  believing that he is  buying the cigars of the defendant.  In our  opinion no such similarity exists.  The boxes  in which  the cigars are packed are different.  They are different  in size and color. One  contains fifty cigars while  the other  contains  but twenty five.   The labels, as will  appear from Exhibits A and B  above, are entirely different.  There  is no attempt on the part of the  defendant to  simulate, in the slightest degree,  the box or  the label used  by the plaintiff.   With reference to the cigars, the slightest examination discloses that they are of an entirely different shape.  One is thick and blunt.  The other is much thinner, pointed, and shorter. With reference to the bands or labels encircling the cigars, from an examination of the same, it is found, by reference to Exhibits A  and B, that  while both  are of a brownish color they are not  of the same brown color.  Neither  are the bands of the same shape.  One is generally called a band while the other is a ring.  We are unable to see or to understand how a person with reasonable  or  ordinary care, knowing and accustomed to use the cigar of the plaintiff, could ever be deceived  into purchasing  the cigar of  the defendant.

For all of  the foregoing reasons, we are of the opinion that the judgment  of the lower  court should be affirmed, with costs.   So ordered.

Torres, Carson, Moreland, Trent, and Araullo, JJ., concur.

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