Facts:

The case of Alhambra Cigar and Cigarette Manufacturing Co. vs. Compania General de Tabacos de Filipinas revolves around an appeal made by the Alhambra Cigar and Cigarette Manufacturing Company (the plaintiff) against Compania General de Tabacos de Filipinas (the defendant). The dispute emerged in Manila, where both corporations are engaged in the manufacture of tobacco products. The plaintiff commenced proceedings asserting that it had been producing a specific brand of cigar, named "Especiales Alhambra," since 1906. These cigars purportedly featured superior quality tobacco with distinct packaging, including a brown label embellished with gold lettering that prominently displayed its name. The plaintiff claimed extensive advertising, deeming the cigar as "The little brown label cigar," which had garnered a strong reputation and substantial profits over the years.

However, in July 1915, the plaintiff alleged that the defendant began selling a rival cigar name

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Facts:

Parties and Business Background

• The plaintiff, THE ALHAMBRA CIGAR AND CIGARETTE MANUFACTURING CO., is engaged in the manufacture of cigars under the brand name Especiales Alhambra since 1906.
• The defendant, COMPANIA GENERAL DE TABACOS DE FILIPINAS, is similarly engaged in the manufacture and sale of tobacco products in Manila.

Claims and Allegations

• The plaintiff alleged that its cigars, known for their superior quality, distinctive packaging, and extensive advertising as “The little brown label cigar,” enjoyed a strong reputation and market presence.
• It accused the defendant of imitating its product by manufacturing and selling a cigar, allegedly similar in appearance, size, and packaging, thus engaging in unfair competition.
• The plaintiff sought damages amounting to P20,000 and a permanent injunction to restrain the defendant from further manufacture and sale of the alleged imitation product, in addition to an accounting.

Statutory Basis and Legal Provision

• The claim was primarily based on section 7 of Act No. 666 of the Philippine Commission.
• This provision penalizes any person who dresses his goods in a manner that gives them the general appearance of another’s product with the intent to deceive the public and defraud a competitor.
• The statute requires a demonstrable intent to deceive the public, which must be inferred from the similarity in the packaging or appearance of the goods.

Description of the Products and Exhibits

• Exhibit A (Plaintiff’s Cigar)
• A box containing twenty-five cigars with specific dimensions and labels on various parts of the box (top, inside cover, loose leaf, outside label, and on each cigar’s band).
• The cigars bear distinctive features such as a brown band with gold imprinted letters and are marketed under the name Especiales Alhambra.
• Exhibit B (Defendant’s Cigar)
• A box containing fifty cigars with different box dimensions, label placement, and design elements compared to Exhibit A.
• The defendant’s product featured a label bearing the name “Especiales” along with a brown colored band or ring, but with differences in shape, lettering, and overall appearance.

Testimonies and Evidentiary Highlights

• Plaintiff’s witness Marker testified that while both products utilized Sumatra wrappers with a brown color, the shape and design of the cigars and their packages were distinctly different so as not to be confused by the ordinary purchaser.
• Defendant’s witness Strickler further affirmed that a person familiar with the plaintiff’s Especiales Alhambra would not mistake it for the defendant’s differently shaped and labeled cigar.
• The record and the physical comparisons of Exhibits A and B indicated marked differences in packaging, cigar shape, and labeling, despite sharing minor common features.

Lower Court Findings

• The lower court found insufficient evidence of similarity necessary to infer an actual intent on the defendant’s part to deceive the public.
• It ruled that differences in the general appearance, size, and labeling precluded a finding of unfair competition under section 7 of Act No. 666.
• Accordingly, the defendant was absolved of liability and the judgment was rendered with costs against the plaintiff.

Issue:

Whether the defendant’s cigars, in terms of packaging, labeling, and overall appearance, substantially imitated the plaintiff’s cigars to the extent that an ordinary purchaser would be deceived.

• Does the similarity in a few features, such as the brown color of the band, suffice to establish the intent to deceive?
• Must the imitation be exact, or is a general resemblance to the plaintiff’s product adequate for an action in unfair competition?

Whether the evidence, both testimonial and physical (Exhibits A and B), supports an inference of actual intent on the part of the defendant to commit unfair competition as provided under section 7 of Act No. 666.

• Was there a demonstrated intent to defraud the purchaser or the plaintiff’s legitimate trade?
• Can the existence of minor similarities justify a conclusion of deceptive imitation?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

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