CASE DIGEST: AIR PHILIPPINES CORP. v. PENNSWELL

Date Published:

G.R. No. 172835. December 13, 2007. AIR PHILIPPINES CORPORATION, Petitioner, vs. PENNSWELL, INC. Respondent.

FACTS: 

Petitioner Air Philippines Corporation is a domestic corporation engaged in the business of air transportation services. On the other hand, Respondent Pennswell, Inc. was organized to engage in the business of manufacturing and selling industrial chemicals, solvents, and special lubricants. Both entered into a contract; Petitioner failed to pay its outstanding balance. Respondent filed a collection of sum of money, and Petitioner contended that its refusal is due to purported fraud of the ingredients of the object of their contract. Petitioner also prayed that Respondent be ordered to provide a detailed list of their ingredients. Respondent then raised the matter of “trade secret.”

ISSUE: 

Are the ingredients of Respondent’s products considered trade secrets and not subject to compulsory disclosure?

RULING: 

Yes, Respondent’s ingredients are considered trade secrets because the detailed ingredients sought to be revealed will have a commercial value to respondent.

In the case at bar, petitioner cannot rely on Section 77 of Republic Act 7394, or the Consumer Act of the Philippines, in order to compel respondent to reveal the chemical components of its products. While it is true that all consumer products domestically sold, whether manufactured locally or imported, shall indicate their general make or active ingredients in their respective labels of packaging, the law does not apply to respondent. Respondent’s specialized lubricants are not consumer products. "Consumer products," as it is defined in Article 4(q), refers to goods, services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes, which shall include, but not be limited to, food, drugs, cosmetics, and devices. This is not the nature of respondent’s products. Its products are not intended for personal, family, household or agricultural purposes. Rather, they are for industrial use, specifically for the use of aircraft propellers and engines. Hence, it is a trade secret not subject to compulsory disclosure.