La Insular Cigar and Cigarette Factory, Inc. v. B.E. Jao Oge Summary: La Insular filed a complaint against B.E.

Jao Oge, the proprietor of La Ciudad for infringing its trademark or for unfair competition. It alleged that through the use of B.E. Jao Oge of 2 different labels on packages of its cigarettes, the defendant herein deceives the public and defrauds the plaintiff. The defendant interposed a general demurrer on the ground that the facts did not constitute a cause of action. The SC reversed this decision and remanded the case to the court of origin. It was of the opinion that the packaging used by the La Ciudad closely imitates the label and mark of La Insular and that the defendant is giving his cigarettes the appearance of cigarettes manufactured and offered for sale by the plaintiff, and this, said the Court, is enough to interpose unfair competition or trademark. The difference between the two is merely academic, but both have the same remedies. It is apparent that there is resemblance in the labels, thus a demurrer cannot be sustained. The person filing a complaint is not really required to indicate the particular provision of law upon which he relies for relief. If he does so and is mistaken, it does not preclude him from obtaining relief under a different conception of the case. FACTS La Insular is a Corporation engaged in the tobacco business and it is the owner of a registered trademark, which it places upon the wrappers of its cigarettes and by which its products is generally recognized throughout the Philippine Islands and elsewhere.

The complainant set forth ownership of the above trademark and the continuous use of the same for nearly 40 years. It alleges that the defendant BE Jao (La Ciudad proprietor) began to use 2 different labels on packages of its cigarettes offered for sale which are infringing imitations of the plaintiffs mark. To this complaint, the defendant interposed a general demurrer on the ground that the facts stated did not constitute a cause of action. Such demurrer was sustained by the trial court hence, judgment was entered dismissing the complaint. ISSUE Real issue in the case: WON the demurrer must be sustained NO Related to Trademark: Whether or not there is a case for infringement or unfair competition. YES RATIO The complaint is sufficient and the order sustaining the demurrer must be dismissed. An action for infringement of a trademark lies in favor of the injured person against any one who sells goods of a similar kind bearing such trademark. This interpretation 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 trademark which they intend to appropriate rather than exact counterfeits. But if a litigants right is doubtful under infringement, he only needs to claim the benefit of the section dealing with unfair competition which gives precisely the remedies that he would have contained under the other provision and under this section, it is immaterial what form the deceptive practices of the infringer take. In cases of infringement of trademarks, the law primarily takes no account of the actual intent on the part of the infringer to mislead the public and defraud the owner of the trademarks. On the other hand, in cases of unfair competition actual intent to deceive the public and defraud the person injured is declared to be essential to the maintenance of the action but it is immediately added that such intent may be inferred from similarity of appearance of the goods as packed or offered for sale to those of the complaining party.

The elements of unfair competition are: 1. The person complained of shall have given to his goods the general appearance of the goods of the complaining party either in wrapping, devices or words; 2. That the person complained of should have clothed the goods with such appearance for the purpose of deceiving the public and defrauding the complaining party of his legitimate trade. It is not always easy to point out exactly where one ends and the other begins, but together they comprise all actionable injuries which one person may inflict upon another as the result of the unfair use of names, marks, and other trade devices. The person injured is not really required to indicate the particular provision of law upon which he relies for relief, and if he does so and is mistaken, this will not preclude him from obtaining relief under a different conception of the case, provided always that the facts stated and proved justify such relief. The packaging used by the La Ciudad closely imitates the label and mark of La Insular and there is a further allegation that the defendant is giving his cigarettes the appearance of cigarettes manufactured and offered for sale by the plaintiff. The intent to deceive may be inferred from similarity in the appearance of the goods as packed or offered for sale. It is too clear from the allegations of the complaint, taken in connection with the exhibits that there is actionable imitation on the part of the defendant. The offending marks submitted for purposes of actual comparison tell the story to the eye. The judgment of demurrer must therefore be reversed, and the cause was remanded to the court of origin for further proceedings in conformity with this opinion.