WILLAWARE PRODUCTS CORP VS JESICHRIS MANUFACTURING CORP

FACTS:

- Jesichris (Respondent) is engaged in the manufacture and distribution of plastic and metal
products and has been distributing throughout the
- Willaware (Petitioner) is engaged in the manufacture and distribution of kitchenware items made of
plastic and metal has its office near that of Jesichris
- Jesichris alleged that in view of the fact that some of its employees has transferred to Willaware,
the latter had developed familiarity with its products, especially its plastic-made automotive
products
- In Nov. 2000, Jesichris discovered that Willaware has 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.
- Jesichris filed this present complaint for damages for unfair competition with prayer for
permanent injunction to enjoin Willaware from manufacturing and distributing plastic-made
automotive parts similar to those of the respondent
- Willaware, in its answer, denies the allegations except the ff. facts:
o It is engaged in the manufacture and distribution of kitchenware items made of plastic and
metal
o There’s physical proximity between their offices
o Some of Jesichris’ employees transferred to their office
o Over the years, it had developed familiarity with Jesichris’ products, especially is plastic
made automotive products
- Affirmative defenses of Willaware are as follows:
o There can be no unfair competition as the plastic-made automotive products are
mere reproductions of original parts they intend to replace.
o Even assuming that respondent originated the use of these plastic automotive parts, it still
has no exclusive right to use, manufacture, and sell as it has no patent over these
products
- RTC ruled IFO Jesichris finding Willaware liable to the ff: P2MM (actual damages), P100K
(attorney’s fees), and P100K (exemplary damages)
- CA affirmed RTC’s decision w/ modification. Actual damages was deleted as it was not
proven but granted the ff: P200K (nominal damages, P100K (attorney’s fees), and P100K
(exemplary damages)

ISSUE: WON Willaware committed acts of unfair competition under Art 28 of the CC.

RULING:

Yes.
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."

What is being sought to be prevented is the use of unjust, oppressive or high- handed methods which
may deprive others of a fair chance to engage in business or to earn a living.
To qualify as unfair competition, the ff. characteristics must concur:
1. It must involve and injury to a competitor or trade rival
2. It must involve acts which are characterized as "contrary to good conscience," or "shocking to
judicial sensibilities," or otherwise unlawful
Here, both characteristics were present.
1st. Both parties are competitors being engaged in the manufacture of plastic-made automotive parts
2nd. Acts of petitioner were clearly contrary to good conscience as he admitted to having respondent’s
employees transfer to him, deliberately copied the respondent’s products, and selling these products to
respondent’s customers.

Petitioner also had a sudden shift on his business, from manufacturing kitchenware to plastic-made
automotive parts.

SC- Willaware is guilty of unfair competition under Art. 28 of the CC and it is entitled to pay Jesichris:
Nominal damages- P200K
Attorney’s Fees- P50K
Exemplary damages- P100K