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G.R. No. 195549 September 3, 2014 Willaware Products Corporation, Petitioner, vs. Jesichris Manufacturing Corporation, Respondent

Jesichris Manufacturing Corporation filed a complaint against Willaware Products Corporation for unfair competition. Jesichris alleged that Willaware copied Jesichris' plastic automotive parts and sold them at a lower price to Jesichris' customers. The Supreme Court ruled that Willaware committed unfair competition based on evidence that Willaware hired former Jesichris employees to copy its products and sold the copied products to Jesichris' customers, demonstrating bad faith. The Court affirmed the ruling of actual damages but modified it to award nominal damages of 200,000 pesos instead.

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250 views2 pages

G.R. No. 195549 September 3, 2014 Willaware Products Corporation, Petitioner, vs. Jesichris Manufacturing Corporation, Respondent

Jesichris Manufacturing Corporation filed a complaint against Willaware Products Corporation for unfair competition. Jesichris alleged that Willaware copied Jesichris' plastic automotive parts and sold them at a lower price to Jesichris' customers. The Supreme Court ruled that Willaware committed unfair competition based on evidence that Willaware hired former Jesichris employees to copy its products and sold the copied products to Jesichris' customers, demonstrating bad faith. The Court affirmed the ruling of actual damages but modified it to award nominal damages of 200,000 pesos instead.

Uploaded by

MJ
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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G.R. No.

195549 September 3, 2014


WILLAWARE PRODUCTS CORPORATION, Petitioner, vs. JESICHRIS MANUFACTURING CORPORATION,
Respondent.

Facts:
 Jesichris Manufacturing Company filed this present complaint for damages for unfair
competition with prayer for permanent injunction to enjoin Willaware Products
Corporation from manufacturing and distributing plastic-made automotive parts similar
to those of respondent.
 Respondent alleged that it is a duly registered partnership engaged in the manufacture
and distribution of plastic and metal products
 Respondent further alleged that in view of the physical proximity of petitioner's office to
respondent's office, and in view of the fact that some of the former’s employees had
transferred to the latter, petitioner had developed familiarity with respondent's products,
especially its plastic-made automotive parts.
 That sometime in November 2000, respondent discovered that petitioner had been
manufacturing and distributing the same automotive parts with exactly similar design,
same material and colors but was selling these products at a lower price as respondent's
plastic-made automotive parts and to the same customers.

 Also, [petitioner] deliberately copied [respondent’s] products all of which acts constitute
unfair competition, is and are contrary to law, morals, good customs and public policy
and have caused [respondent] damages in terms oflost and unrealizedprofits in the
amount of TWO MILLION PESOS as of the date of [respondent’s] complaint.
Issues:
Whether or not petitioner committed acts amounting to unfair competition under Article 28 of
the Civil Code.
Ruling:
 The concept of "unfair competition" under Article 28 is very much broader than that
covered by intellectual property laws. Under the present article, which follows the
extended concept of "unfair competition" in American jurisdictions, the term covers even
cases of discovery of trade secrets of a competitor, bribery of his employees,
misrepresentation of all kinds, interference with the fulfillment of a competitor's contracts,
or any malicious interference with the latter's business.
 Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial
or industrial enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method shall give rise to a
right of action... by the person who thereby suffers damage."
 In order to qualify the competition as "unfair," it must have two characteristics: (1) it
must involve an injury to a competitor or trade rival, and (2) it must involve acts which
are characterized as "contrary to good conscience," or "shocking to judicial sensibilities,"
or otherwise unlawful; in the language of our law, these include force, intimidation,
deceit, machination or any other unjust, oppressive or high-handed method. The public
injury or interest is a minor factor; the essence of the matter appears to be a private
wrong perpetrated by unconscionable means. Both characteristics are present.
 First, both parties are competitors or trade rivals, both being engaged in the manufacture
of plastic-made automotive parts.
 Second, the acts of the petitioner were clearly "contrary to good conscience" as
petitioner admitted having employed respondent's former employees, deliberately
copied respondent's products and even went to the extent of selling these products to
respondent's customers.
 The testimonies of the witnesses indicate that the petitioner acted in bad faith in
competing with the business of respondent.
 The petitioner is engaged in the production of plastic kitchenware previous to its
manufacturing of plastic automotive spare parts
 It engaged the services of the then mold setter and maintenance operator of
respondent, De Guzman, while he was employed by the latter. De Guzman was hired by
petitioner in order to adjust its machinery since quality plastic automotive spare parts
were not being made. It is banking on his experience gained from working for
respondent.
 Yabut, who used to be a warehouse and delivery man of [respondent], was fired because
he was blamed of spying in favor of petitioner. Despite this accusation, he did not get
angry. Later on, he applied for and was hired by petitioner for the same position he
occupied with respondent.
 During a Dringking Spree, GM William Salinas talked to Joel Torres, saying, “O, ano
naapektuhan na na kayo sa ginaya (sic) ko sa inyo?"
 RTC. Favoured JesiChris. CA affirmed RTC’s decision but with modification. Actual
damages had been deleted, Instead 200K nominal damages is awarded.
 Petitioner is guilty of unfair competition under Article 28 of the Civil Code.

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