AIR PHILIPPINES CORP V PENNSWELL INC

29 Jan GR 172835 | Dec 13 2007 | J. Chico-Nazario Trade secrets should receive greater protection from discovery, because they derive economic value from being generally unknown and not readily ascertainable by the public. Facts: 1. Petitioner Air Phi i!!ine" Cor!oration i" a #o$e"tic cor!oration en%a%e# in the &'"ine"" o( air tran"!ortation "er)ice". *n the other han#+ re"!on#ent Penn",e + -nc. ,a" or%anize# to en%a%e in the &'"ine"" o( $an'(act'rin% an# "e in% in#'"tria che$ica "+ "o )ent"+ an# "!ecia '&ricant". 2. Re"!on#ent #e i)ere# an# "o # to !etitioner "'n#r. %oo#" in tra#e. /n#er the contract"+ !etitioner0" tota o't"tan#in% o& i%ation a$o'nte# to P119+821.98 ,ith intere"t at 113 !er ann'$ 'nti the a$o'nt ,o' # &e (' . !ai#. 4or (ai 're o( the !etitioner to co$! . ,ith it" o& i%ation 'n#er "ai# contract"+ re"!on#ent (i e# a Co$! aint (or a 5'$ o( 6one. on 28 A!ri 2000 ,ith the R7C. 3. -n it" An",er+ !etitioner a e%e# that it ,a" #e(ra'#e# in the a$o'nt o( P592+000.00 &. re"!on#ent (or it" !re)io'" "a e o( (o'r ite$". Petitioner a""erte# that it ,a" #ecei)e# &. re"!on#ent ,hich $ere . a tere# the na$e" an# a&e " o( "'ch %oo#". Petitioner a""e)erate# that ha# re"!on#ent &een (orthri%ht a&o't the i#entica character o( the !ro#'ct"+ it ,o' # not ha)e !'rcha"e# the ite$" co$! aine# o(. 1. 6oreo)er+ !etitioner a e%e# that ,hen the !'r!orte# (ra'# ,a" #i"co)ere#+ a con(erence ,a" he # &et,een !etitioner an# re"!on#ent on 13 Jan'ar. 2000+ ,here&. the !artie" a%ree# that re"!on#ent ,o' # ret'rn to !etitioner the a$o'nt it !re)io'" . !ai#. 8o,e)er+ !etitioner ,a" "'r!ri"e# ,hen it recei)e# a etter (ro$ the re"!on#ent+ #e$an#in% !a.$ent o( the a$o'nt o( P119+821.91+ ,hich ater &eca$e the "'&9ect o( re"!on#ent0" Co$! aint (or Co ection o( a 5'$ o( 6one. a%ain"t !etitioner. 5. D'rin% the !en#enc. o( the tria + !etitioner (i e# a 6otion to Co$!e re"!on#ent to %i)e a #etai e# i"t o( the in%re#ient" an# che$ica co$!onent" o( the (o o,in% !ro#'ct". 7he R7C ren#ere# an *r#er %rantin% the !etitioner0" $otion. 2. Re"!on#ent "o'%ht recon"i#eration o( the (ore%oin% *r#er+ conten#in% that it cannot &e co$!e e# to #i"c o"e the che$ica co$!onent" "o'%ht &eca'"e the $atter i" con(i#entia . -t ar%'e# that ,hat !etitioner en#ea)ore# to in:'ire '!on con"tit'te# a tra#e "ecret ,hich re"!on#ent cannot &e (orce# to #i)' %e. 7. 7he R7C %a)e cre#ence to re"!on#ent0" rea"onin%+ an# re)er"e# it"e (. A e%in% %ra)e a&'"e o( #i"cretion on the !art o( the R7C+ !etitioner (i e# a Petition (or Certiorari 'n#er R' e 25 o( the R' e" o( Co'rt ,ith the Co'rt o( A!!ea "+ ,hich #enie# the Petition an# a((ir$e# the *r#er #ate# 30 J'ne 2001 o( the R7C. Petitioner0" 6otion (or Recon"i#eration ,a" #enie#. /n.ie #in%+ !etitioner &ro'%ht the in"tant Petition &e(ore 5C. Issue: ;<N CA erre# in '!ho #in% R7C #eci"ion #en.in% !etitioner0" $otion to "'&9ect re"!on#ent0" !ro#'ct" to co$!' "or. #i"c o"'re. Held: No. 7he !ro#'ct" are co)ere# &. the e=ce!tion o( tra#e "ecret" &ein% #i)' %e# in co$!' "or. #i"c o"'re. 7he Co'rt a((ir$" the r' in% o( the Co'rt o( A!!ea " ,hich '!he # the (in#in% o( the R7C that there i" "'&"tantia &a"i" (or re"!on#ent to "ee> !rotection o( the a, (or it" !ro!rietar.

ri%ht" o)er the #etai e# che$ica co$!o"ition o( it" !ro#'ct". The Supreme Court has declared that trade secrets and ban !n" transact!ons are amon" the reco"n!#ed restr!ct!ons to the r!"ht o$ the people to !n$ormat!on as embod!ed !n the Const!tut!on% 5C "ai# that the #ra(ter" o( the Con"tit'tion a "o 'ne:'i)oca . a((ir$e# that+ a"i#e (ro$ nationa "ec'rit. $atter" an# inte i%ence in(or$ation+ tra#e or in#'"tria "ecret" ?!'r"'ant to the -nte ect'a Pro!ert. Co#e an# other re ate# a,"@ a" ,e a" &an>in% tran"action" ?!'r"'ant to the 5ecrec. o( Aan> De!o"it" Act@+ are a "o e=e$!te# (ro$ co$!' "or. #i"c o"'re. A trade secret i" #e(ine# a" a ! an or !roce""+ too + $echani"$ or co$!o'n# >no,n on . to it" o,ner an# tho"e o( hi" e$! o.ee" to ,ho$ it i" nece""ar. to con(i#e it. 7he #e(inition a "o e=ten#" to a "ecret (or$' a or !roce"" not !atente#+ &'t >no,n on . to certain in#i)i#'a " '"in% it in co$!o'n#in% "o$e artic e o( tra#e ha)in% a co$$ercia )a 'e. A$erican 9'ri"!r'#ence ha" 'ti ize# the (o o,in% (actor" to #eter$ine i( an in(or$ation i" a tra#e "ecret+ to ,it: ?1@ the e=tent to ,hich the in(or$ation i" >no,n o't"i#e o( the e$! o.er0" &'"ine""B ?2@ the e=tent to ,hich the in(or$ation i" >no,n &. e$! o.ee" an# other" in)o )e# in the &'"ine""B ?3@ the e=tent o( $ea"'re" ta>en &. the e$! o.er to %'ar# the "ecrec. o( the in(or$ationB ?1@ the )a 'e o( the in(or$ation to the e$! o.er an# to co$!etitor"B ?5@ the a$o'nt o( e((ort or $one. e=!en#e# &. the co$!an. in #e)e o!in% the in(or$ationB an# ?2@ the e=tent to ,hich the in(or$ation co' # &e ea"i . or rea#i . o&taine# thro'%h an in#e!en#ent "o'rce. R' e 27 "et" an 'ne:'i)oca !ro)i"o that the #oc'$ent"+ !a!er"+ &oo>"+ acco'nt"+ etter"+ !hoto%ra!h"+ o&9ect" or tan%i& e thin%" that $a. &e !ro#'ce# an# in"!ecte# "ho' # not &e !ri)i e%e#. 7he #oc'$ent" $'"t not &e !ri)i e%e# a%ain"t #i"c o"'re. *n the %ro'n# o( !'& ic !o ic.+ the r' e" !ro)i#in% (or !ro#'ction an# in"!ection o( &oo>" an# !a!er" #o not a'thorize the !ro#'ction or in"!ection o( !ri)i e%e# $atterB that i"+ boo s and papers &h!ch' because o$ the!r con$!dent!al and pr!(!le"ed character' could not be rece!(ed !n e(!dence% 5'ch a con#ition i" in a##ition to the re:'i"ite that the ite$" &e "!eci(ica . #e"cri&e#+ an# $'"t con"tit'te or contain e)i#ence $ateria to an. $atter in)o )e# in the action an# ,hich are in the !art.0" !o""e""ion+ c'"to#. or contro . -n the ca"e at &ar+ !etitioner cannot re . on 5ection 77o( Re!'& ic Act 7391+ or the Con"'$er Act o( the Phi i!!ine"+ in or#er to co$!e re"!on#ent to re)ea the che$ica co$!onent" o( it" !ro#'ct". ;hi e it i" tr'e that a con"'$er !ro#'ct" #o$e"tica . "o #+ ,hether $an'(act're# oca . or i$!orte#+ "ha in#icate their %enera $a>e or acti)e in%re#ient" in their re"!ecti)e a&e " o( !ac>a%in%+ the a, #oe" not a!! . to re"!on#ent. Re"!on#ent0" "!ecia ize# '&ricant" C na$e .+ Contact Grea"e+ Connector Grea"e+ 7hi=ohtro!ic Grea"e+ Di-D ectric 5tren%th Protecti)e Coatin%+ Dr. E'&ricant an# Anti-5eize Co$!o'n# C are not con"'$er !ro#'ct". ;hat i" c ear (ro$ the (act'a (in#in%" o( the R7C an# the Co'rt o( A!!ea " i" that the che$ica (or$' ation o( re"!on#ent0" !ro#'ct" i" not >no,n to the %enera !'& ic an# i" 'ni:'e on . to it. Aoth co'rt" 'ni(or$ . r' e# that the"e in%re#ient" are not ,ithin the >no, e#%e o( the !'& ic. 5ince "'ch (act'a (in#in%" are %enera . not re)ie,a& e &. thi" Co'rt+ it i" not #'t.-&o'n# to ana .ze an# ,ei%h a o)er a%ain the e)i#ence a rea#. con"i#ere# in the !rocee#in%" &e o,. 7he re)e ation o( re"!on#ent0" tra#e "ecret" "er)e" no &etter !'r!o"e to the #i"!o"ition o( the $ain ca"e !en#in% ,ith the R7C+ ,hich i" on the co ection o( a "'$ o( $one.. A" can &e % eane# (ro$ the (act"+ !etitioner recei)e# re"!on#ent0" %oo#" in tra#e in the nor$a co'r"e o( &'"ine"". 7o &e "'re+ there are #e(en"e" 'n#er the a," o( contract" an# "a e" a)ai a& e to !etitioner. *n the other han#+ the %reater intere"t o( 9'"tice o'%ht to (a)or re"!on#ent a" the ho #er o( tra#e "ecret". ;ei%hin% the con( ictin% intere"t" &et,een the !artie"+ 5C r' e" in (a)or o( the %reater intere"t o( re"!on#ent. Trade secrets should rece!(e "reater protect!on $rom d!sco(er)' because the) der!(e econom!c (alue $rom be!n" "enerall) un no&n and not read!l) ascerta!nable b) the publ!c%

El!dad C% *ho (s% Court o$ Appeals' Summer(!lle +eneral ,erchand!s!n" Compan) and An" T!am Cha) -+%R% No% ../0/1' ,arch .2' 3443' 502 SCRA 6.47
FACTS8 PetitionerF" a e%ation" are that the. are #oin% &'"ine"" 'n#er the na$e an# "t. e o( GDC Co"$etic" Ea&orator.+ re%i"tere# o,ner o( Chin Ch'n 5' an# o)a (acia crea$ container<ca"e+ an# a e%e" that "he a "o ha" !atent ri%ht" on Chin Ch'n 5' an# De)ice an# Chin Ch'n 5' 6e#icate# Crea$ a(ter !'rcha"in% the "a$e (ro$ H'intin Chen%+ the re%i"tere# o,ner thereo( in the "'!! e$enta re%i"ter o( the Phi i!!ine Patent *((ice an# that 5'$$er)i e a#)erti"e# an# "o # !etitioner0" crea$ !ro#'ct" 'n#er the &ran# na$e Chin Ch'n 5'+ in "i$i ar container" that !etitioner '"e"+ there&. $i" ea#in% the !'& ic+ an# re"' tin% in the #ec ine in the !etitioner0" &'"ine"" "a e" an# inco$eB an#+ that the re"!on#ent" "ho' # &e en9oine# (ro$ a e%e# . in(rin%in% on the co!.ri%ht" an# !atent" o( the !etitioner. 7he re"!on#ent"+ on the other han#+ a e%e# a" their #e(en"e that ?1@ 5'$$er)i e i" the e=c '"i)e an# a'thorize# i$!orter+ re-!ac>er an# #i"tri&'tor o( Chin Ch'n 5' !ro#'ct" $an'(act're# &. 5h'n Ii (actor. o( 7ai,an+ ?2@ that the "ai# 7ai,ane"e $an'(act'rin% co$!an. a'thorize# 5'$$er)i e to re%i"ter it" tra#e na$e Chin Ch'n C' 6e#icate# Crea$ ,ith the Phi i!!ine Patent o((ice an# *ther a!!ro!riate %o)ern$enta a%encie"B ?3@ that GDC Co"$etic" Ea&orator. o( the !etitioner o&taine# the co!.ri%ht" thro'%h $i"re!re"entation an# (a "i(icationB an#+ ?1@ that the a'thorit. o( H'intin Chen%+ a""i%nee o( the !atent re%i"tration certi(icate+ to #i"tri&'te an# $ar>et Chin Ch'n 5' !ro#'ct" in the Phi i!!ine" ha# a rea#. ter$inate# &. the "ai# 7ai,ane"e $an'(act'rin% co$!an.. ISS9E8 ;hether or not Gho ha" the "o e ri%ht '"in% the !ac>a%e o( Chin Ch'n 5' !ro#'ct" R9LIN+8 Petitioner ha" no ri%ht to "'!!ort her c ai$ (or the e=c '"i)e '"e o( the "'&9ect tra#e na$e an# it" container. 7he na$e an# container o( a &ea't. crea$ !ro#'ct are !ro!er "'&9ect" o( a tra#e$ar> in a" $'ch a" the "a$e (a " ":'are . ,ithin it" #e(inition. In order to be entitled to exclusively use the same in the sale of the beauty cream product, the user must sufficiently prove that she registered or used it before anybody else did. The petitioners copyright and patent registration of the name and container would not guarantee her the right to exclusive use of the same for the reason that they are not appropriate subjects of the said intellectual rights. Con"e:'ent .+ a !re i$inar. in9'nction or#er cannot &e i""'e# (or the rea"on that the !etitioner ha" not !ro)en that "he ha" a c ear ri%ht o)er the "ai# na$e an# container to the e=c '"ion o( other"+ not ha)in% !ro)en that "he ha" re%i"tere# a tra#e$ar> thereto or '"e# the "a$e &e(ore an.one #i#. N*7D: Trademark+ copyright+ an# patents are #i((erent inte ect'a !ro!ert. ri%ht" that cannot &e interchan%e# ,ith one another. A trademark i" an. )i"i& e "i%n ca!a& e o( #i"tin%'i"hin% the %oo#" ?tra#e$ar>@ or "er)ice" ?"er)ice $ar>@ o( an enter!ri"e an# "ha inc '#e a "ta$!e# or $ar>e# container %oo#". -n re ation thereto+ a trade name $ean" the na$e or #e"i%nation i#enti(.in% or #i"tin%'i"hin% an enter!ri"e. 6ean,hi e+ the "co!e o( copyright i" con(ine# to iterar. an# arti"tic ,or>" ,hich are ori%ina inte ect'a creation" in the iterar. an# arti"tic #o$ain !rotecte# (ro$ the $o$ent o( their creation. Patentable inventions+ on the other han#+ re(er to an. technica "o 'tion o( a !ro& e$ in an. (ie # o( h'$an acti)it. ,hich i" ne,+ in)o )e" an in)enti)e "te! an# i" in#'"tria a!! ica& e.