Willaware Products Corp v.
Jesichris Manufacturing composition and construction merely conform to the specs
G.R. No. 195549 | Sept. 3, 2014| Trent
Nature of Case: Petition for review on certiorari
Digest maker: Rojo
CASE SUMMARY: Willaware was accused of unfair competition under Article 28,
for deliberately copying the respondent’s plastic-made automotive parts. Its acts of
changing its business from manufacturing kitchenware and luring employees from
the respondent were appreciated by the Court to constitute unfair competition.
DOCTRINE: 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.
FACTS:
 Jesichris Manufacturing filed a 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 Jesichris.
 Claims it is a duly registered partnership engaged in the production
and distribution of plastic and metal products with principal office at
Caloocan City
 Since its registration, it has been distributing plastic-automotive
parts.
 Willaware has office near that of Jesichris and that it is because of
such proximity and the fact that some employees of Jesichris had
transferred to WIllaware, that the latter had developed familiarity
with its products, especially plastic-made automotive parts.
 November 2000: Jesichris discovered that Willaware 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 its plastic-made automotive parts and to
the same customers.
 Jesichris claims:
 It originated the use of plastic in place of rubber in the
manufacture of automotive under chassis parts such as ISSUE: Whether or Willaware committed acts amounting to unfair competition under
spring eye bushing, stabilizer bushing, shock absorber Article 28 of the Civil Code? YES.
bushing, center bearing cushions, among others
 Willaware deliberately copied its products which constitute
unfair competition.
 It was such tortuous conduct that compelled Jesichris to
institute such action.
 Claims P 2 Million in damages and 500k in
attorney’s fees and litigation expenses.
 Willaware’s affirmative defense:
 There can be no unfair competition because the plastic
parts are mere reproductions of the original and that their
of the vehicles; thus cannot claim it “originated use of
plastic for these automotive parts.
 Jesichris also had no exclusive right to manufacture and
sell such because it has no patent and that there are other
establishments which are also selling these parts.
 RTC: ruled in favor of Jesichris
 Willaware clearly invaded rights of Jesichris by deliberately copying
and performing acts amounting to unfair competition.
 Permanently enjoined Willaware from manufacturing plastic-made
automotive parts.
 Awarded the P 2 Million plus 100k of attorney’s fees, litigation
expenses, and 100k exemplary damages.
 CA: Affirmed RTC but replaced the 2 Million with 200K nominal
damages, and maintained the award for attorney’s fees and exemplary
damages
 Petitioner: if there is no intellectual property protecting a good
belonging to another, the copying thereof for production and selling
does not add up to unfair competition as competition is promoted by
law to benefit consumers; it did not lure away respondent’s
employees to get trade secrets; the plastic spare parts sold by
respondent are traded in the market and the copying of these can
be done by simply buying a sample for a mold to be made.
 Respondent: copyright and patent registrations are immaterial for
an unfair competition case to prosper under Article 28 of the Civil
Code; characteristics of unfair competition are present in the instant
case as the parties are trade rivals and petitioner’s acts are contrary
to good conscience for deliberately copying its products and
employing its former employees
 Damages discussion:
 Found no basis for actual damages. A copy of the
comparative income statement of Jesicris was presented
showing decline of sales but it does not disclose if they
pertain to the subject automotive parts or to other products
of Jesichris.
 Nominal damages awarded to recognize and vindicate
Jesichris’ rights.
 The existent of patent registration is immaterial in this case. This case falls
under Article 28 of the Civil Code on human relations, and not under RA
8293. It is a damage suit.
 The concept of "unfair competition" under Article 28 is 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 cover 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 advantage of the effects of his malevolent purpose, he is
with the latter’s business. guilty of wanton wrong.
 Article 28 of the Civil Code: "unfair competition in agricultural, commercial or  As aptly observed by the court, the testimony of petitioner’s
industrial enterprises or in labor through the use of force, intimidation, witnesses indicate that it acted in bad faith in competing
deceit, machination or any other unjust, oppressive or high-handed method with the business of respondent, to wit: Willaware, thru its
shall give rise to a right of action by the person who thereby suffers General Manager, William Salinas, Jr., admitted that it was
damage." never engaged in the business of plastic-made automotive
 What is being prevented is not competition per se, by the use of parts until recently, year 2000.
unjust, oppressive, or high-handed methods which deprive others a  Testimony of Jun Molina, an employee of Jesichris,
fair chance to engage in business or earn a living. revealed that Salinas was out to drive them out of
 In order to qualify the competition as "unfair," it must have two business. In a drinking spree, Salinas said “O, ano
characteristics: naapektuhan na kayo sa ginaya (sic) ko sa inyo?" and
 (1) it must involve an injury to a competitor or trade rival, and added “sabihin mo sa amo mo, dalawang taon na lang
 (2) it must involve acts which are characterized as "contrary to good pababagsakin ko na siya."
conscience," or "shocking to judicial sensibilities," or otherwise  Willaware guilty of unfair competition under Art. 28.
unlawful; in the language of our law, these include force,  However, Court reduced attorney’s fees to 50k.
intimidation, deceit, machination or any other unjust, oppressive or
high-handed method.
 The public injury or interest is a minor factor; the essence DISPOSITION: WHEREFORE, the instant petition is DENIED. The Decision
of the matter appears to be a private wrong perpetrated by dated November 24, 2010 and Resolution dated February 10, 2011 of the Court
unconscionable means. of Appeals in CA-G.R. CV No. 86744 are hereby AFFIRMED with MODIFICATION
 In this case, both characteristics are present. that the award of attorney's fees be lowered to Fifty Thousand Pesos
 (1): both parties are trade rivals engaged in the manufacture of (₱50,000.00).
plastic-made automotive parts.
 (2): the acts of Willaware were clearly contrary to good conscience
because it admitted having employed Jesichris’ employees,
deliberately copied the products of Jesichris, and even went to the
extend of selling the products to Jesichris’ clients.
 The testimonies of the witnesses indicate that WIllaware was in bad
faith in competing with Jesichris.
 It was first engaged in kitchenware. It engaged the services
of De Guzman, mold setter and maintenance operator of
Jesichris, while he was still employed by the latter. It
baffles the Court why [petitioner] cannot rely on its own
mold setter and maintenance operator to remedy its
problem. [Petitioner’s] engagement of De Guzman
indicates that it is banking on his experience gained from
working for [respondent].
 Yabut who use to be a warehouse and delivery man of
Jesichris was fired because he was accused of spying for
Willaware. He did not get angry over such accusation.
Later he was hired for same position by Willaware.
 Evident that Willaware is engaged in unfair competition as shown
by his act of suddenly shifting business from manufacturing
kitchenware to plastic-made automotive parts, luring employees
and trying to discover trade secrets of respondent.
 “Moreover, when a person starts an opposing place of
business, not for the sake of profit to himself, but
regardless of loss and for the sole purpose of driving his
competitor out of business so that later on he can take