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AIR PHILIPPINES CORP VPENNSWELL 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 Phii!!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( $an'(act'rin% an# "ein% in#'"tria che$ica"+ "o)ent"+ an#

"!ecia '&ricant".2. Re"!on#ent #ei)ere# an# "o# to !etitioner "'n#r %oo#" in tra#e. /n#er the contract"+

!etitioner" tota o't"tan#in% o&i%ation a$o'nte# to P9+8.98 ,ith intere"t at 1 !erann'$ '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 (ie# a Co$!aint (or a '$ o( 6one on 28

A!ri 2000 ,ith the RC.3. n it" An",er+ !etitioner ae%e# that it ,a" #e(ra'#e# in the a$o'nt o( P592+000.00 &

re"!on#ent (or it" !re)io'" "ae o( (o'r ite$". Petitioner a""erte# that it ,a" #ecei)e# &

re"!on#ent ,hich $ere atere# the na$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(.. 6oreo)er+ !etitioner ae%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$o'nt it !re)io'" !ai#. o,e)er+!etitioner ,a" "'r!ri"e# ,hen it recei)e# a etter (ro$ the re"!on#ent+ #e$an#in% !a$ent

o( the a$o'nt o( P9+8.9+ ,hich ater &eca$e the "'&ect o( re"!on#ent" Co$!aint (orCoection o( a '$ o( 6one a%ain"t !etitioner.

5. D'rin% the !en#enc o( the tria+ !etitioner (ie# a 6otion to Co$!e re"!on#ent to %i)e a

#etaie# i"t o( the in%re#ient" an# che$ica co$!onent" o( the (oo,in% !ro#'ct". he RCren#ere# an *r#er %rantin% the !etitioner" $otion.

. Re"!on#ent "o'%ht recon"i#eration o( the (ore%oin% *r#er+ conten#in% that it cannot &eco$!ee# to #i"co"e the che$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. he RC %a)e cre#ence to re"!on#ent" rea"onin%+ an# re)er"e# it"e(. Ae%in% %ra)e a&'"e

o( #i"cretion on the !art o( the RC+ !etitioner (ie# a Petition (or Certiorari 'n#er R'e 5o( 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 200 o( the RC. Petitioner" 6otion (or Recon"i#eration ,a" #enie#.

/nie#in%+ !etitioner &ro'%ht the in"tant Petition &e(ore C.

Issue:

;<N CA erre# in '!ho#in% RC #eci"ion #enin% !etitioner" $otion to "'&ect re"!on#ent"!ro#'ct" to co$!'"or #i"co"'re.

Held:

No. he !ro#'ct" are co)ere# & the e=ce!tion o( tra#e "ecret" &ein% #i)'%e# in co$!'"or

#i"co"'re. he Co'rt a((ir$" the r'in% o( the Co'rt o( A!!ea" ,hich '!he# the (in#in% o( the

RC that there i" "'&"tantia &a"i" (or re"!on#ent to "ee> !rotection o( the a, (or it" !ro!rietar

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ri%ht" o)er the #etaie# che$ica co$!o"ition o( it" !ro#'ct".

The Supreme Court has declared that trade secrets and ban!n" transact!ons are amon" thereco"n!#ed restr!ct!ons to the r!"ht o$ the people to !n$ormat!on as embod!ed !n theConst!tut!on% C "ai# that the #ra(ter" o( the Con"tit'tion a"o 'ne'i)oca a((ir$e# that+ a"i#e

(ro$ nationa "ec'rit $atter" an# intei%ence in(or$ation+ tra#e or in#'"tria "ecret" ?!'r"'ant to

the nteect'a Pro!ert Co#e an# other reate# a,"@ a" ,e a" &an>in% tran"action" ?!'r"'ant to

the ecrec o( an> De!o"it" Act@+ are a"o e=e$!te# (ro$ co$!'"or #i"co"'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$!oee" to ,ho$ it i" nece""ar to con(i#e it. he #e(inition a"o e=ten#"

to a "ecret (or$'a or !roce"" not !atente#+ &'t >no,n on to certain in#i)i#'a" '"in% it inco$!o'n#in% "o$e artice o( tra#e ha)in% a co$$ercia )a'e. A$erican 'ri"!r'#ence ha" 'tiize#

the (oo,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$ation i" >no,n o't"i#e o( the e$!oer" &'"ine""B?2@ the e=tent to ,hich the in(or$ation i" >no,n & e$!oee" an# other" in)o)e# in the &'"ine""B

?3@ the e=tent o( $ea"'re" ta>en & the e$!oer to %'ar# the "ecrec o( the in(or$ationB

?@ the )a'e o( the in(or$ation to the e$!oer an# to co$!etitor"B?5@ the a$o'nt o( e((ort or $one e=!en#e# & the co$!an in #e)eo!in% the in(or$ationB an#

?@ 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&ect" or tan%i&e thin%" that $a &e !ro#'ce# an# in"!ecte# "ho'# not &e

!ri)ie%e#. he #oc'$ent" $'"t not &e !ri)ie%e# a%ain"t #i"co"'re. *n the %ro'n# o( !'&ic!oic+ 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)ie%e# $atterB that i"+ boos and papers &h!ch' because o$ the!rcon$!dent!al and pr!(!le"ed character' could not be rece!(ed !n e(!dence%  '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" !o""e""ion+c'"to# or contro.

n the ca"e at &ar+ !etitioner cannot re on ection 77o( Re!'&ic Act 739+ or the Con"'$er Act o(

the Phii!!ine"+ in or#er to co$!e re"!on#ent to re)ea the che$ica co$!onent" o( it" !ro#'ct".

;hie it i" tr'e that a con"'$er !ro#'ct" #o$e"tica "o#+ ,hether $an'(act're# oca ori$!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#ent" "!eciaize# '&ricant" na$e+Contact Grea"e+ Connector Grea"e+ hi=ohtro!ic Grea"e+ Di-ectric tren%th Protecti)e Coatin%+

Dr E'&ricant an# Anti-eize Co$!o'n# are not con"'$er !ro#'ct".

;hat i" cear (ro$ the (act'a (in#in%" o( the RC an# the Co'rt o( A!!ea" i" that the che$ica

(or$'ation o( re"!on#ent" !ro#'ct" i" not >no,n to the %enera !'&ic an# i" 'ni'e on to it.oth co'rt" 'ni(or$ r'e# that the"e in%re#ient" are not ,ithin the >no,e#%e o( the !'&ic. ince

"'ch (act'a (in#in%" are %enera not re)ie,a&e & thi" Co'rt+ it i" not #'t-&o'n# to anaze an#,ei%h a o)er a%ain the e)i#ence area# con"i#ere# in the !rocee#in%" &eo,.

he re)eation o( re"!on#ent" tra#e "ecret" "er)e" no &etter !'r!o"e to the #i"!o"ition o( the $ainca"e !en#in% ,ith the RC+ ,hich i" on the coection o( a "'$ o( $one. A" can &e %eane# (ro$

the (act"+ !etitioner recei)e# re"!on#ent" %oo#" in tra#e in the nor$a co'r"e o( &'"ine"". o &e"'re+ there are #e(en"e" 'n#er the a," o( contract" an# "ae" a)aia&e to !etitioner. *n the other

han#+ the %reater intere"t o( '"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"+ C 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)' becausethe) der!(e econom!c (alue $rom be!n" "enerall) unno&n and not read!l) ascerta!nable b)the publ!c%

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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' 502SCRA 6.47

FACTS8PetitionerF" ae%ation" are that the are #oin% &'"ine"" 'n#er the na$e an# "te o( C Co"$etic"

Ea&orator+ re%i"tere# o,ner o( Chin Ch'n ' an# o)a (acia crea$ container<ca"e+ an# ae%e" that"he a"o ha" !atent ri%ht" on Chin Ch'n ' an# De)ice an# Chin Ch'n ' 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 Phii!!ine Patent *((ice an# that '$$er)ie a#)erti"e# an# "o# !etitioner" crea$!ro#'ct" 'n#er the &ran# na$e Chin Ch'n '+ in "i$iar container" that !etitioner '"e"+ there&

$i"ea#in% the !'&ic+ an# re"'tin% in the #ecine in the !etitioner" &'"ine"" "ae" an# inco$eB

an#+ that the re"!on#ent" "ho'# &e enoine# (ro$ ae%e# in(rin%in% on the co!ri%ht" an# !atent"o( the !etitioner.

he re"!on#ent"+ on the other han#+ ae%e# a" their #e(en"e that ?1@ '$$er)ie i" the e=c'"i)e

an# a'thorize# i$!orter+ re-!ac>er an# #i"tri&'tor o( Chin Ch'n ' !ro#'ct" $an'(act're# & h'n

Ii (actor o( ai,an+ ?2@ that the "ai# ai,ane"e $an'(act'rin% co$!an a'thorize# '$$er)ieto re%i"ter it" tra#e na$e Chin Ch'n C' 6e#icate# Crea$ ,ith the Phii!!ine Patent o((ice an#

*ther a!!ro!riate %o)ern$enta a%encie"B ?3@ that C Co"$etic" Ea&orator o( the !etitionero&taine# the co!ri%ht" thro'%h $i"re!re"entation an# (a"i(icationB an#+ ?@ 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 '

!ro#'ct" in the Phii!!ine" ha# area# ter$inate# & the "ai# ai,ane"e $an'(act'rin% co$!an.

ISS9E8;hether or not ho ha" the "oe ri%ht '"in% the !ac>a%e o( Chin Ch'n ' !ro#'ct"

R9LIN+8

Petitioner ha" no ri%ht to "'!!ort her cai$ (or the e=c'"i)e '"e o( the "'&ect tra#e na$e an# it"container. he na$e an# container o( a &ea't crea$ !ro#'ct are !ro!er "'&ect" o( a tra#e$ar> ina" $'ch a" the "a$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 petitioner’s copyright and patent registration ofthe 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!rei$inar in'nction or#er cannot &e i""'e# (or the rea"on that the !etitioner ha" not !ro)en that

"he ha" a cear 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 anone #i#.

N*:Trademark+ copyright + an# patents are #i((erent inteect'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 reation 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,hie+ the "co!e o( copyright  i" con(ine# to iterar an# arti"tic,or>" ,hich are ori%ina inteect'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.