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Republic of the Philippines

G.R. No. 144309 November 23, 2001
TUPA, a! -'e PEOPLE O$ T#E P#ILIPPINES, respondents.
The petition at bar stes fro t!o cases, Search "arrant #ase No. $%&&'( )**+
before ,ranch *& of the $ue-on #it. Re/ional Trial #ourt )RT#+, and #ivil #ase No.
$%*&%&0'12 for daa/es and in3unctions before ,ranch *4 of the sae court.
The facts are set forth in the Decision of the #ourt of 5ppeals dated 6ul. 2, 4***7
8 8 8 on 6anuar. '9, 4***, 6ud/e 5polinario D. ,ruselas, 6r., Presidin/ 6ud/e
of RT#, ,ranch *&, $ue-on #it., upon application of the :conoic
Intelli/ence and Investi/ation ,ureau ):II,+, issued Search "arrant No. &&'(
)**+ a/ainst Sanl. #orporation )Sanl.+, respondent, for violation of Section
429 of R.5. No. 9'*& )unfair copetition+.
,. virtue of Search "arrant No. &&'( )**+, :II, a/ents sei-ed (;4 bo8es of
Mitsubishi photo/raphic color paper fro respondent Sanl.. . .
Forth!ith, Solid Trian/le, throu/h Robert Sitchon, its Mar<etin/ and
#ounication Mana/er, filed !ith the Office of the #it. Prosecutor, $ue-on
#it., an affidavit coplaint for unfair copetition a/ainst the ebers of the
,oard of Sanl. and ="T #o., Inc. )="T+, doc<eted as I.S. No. 4%**%'901.
Sitchon alle/ed that :R5 Radio and :lectrical Suppl. ):R5+, o!ned and
operated b. ="T, is in conspirac. !ith Sanl. in sellin/ and>or distributin/
Mitsubishi brand photo paper to the daa/e and pre3udice of Solid Trian/le,
?!hich clais to be the sole and e8clusive distributor thereof, pursuant to an
a/reeent !ith the Mitsubishi #orporation@.
On Februar. (, 4***, petitioner Solid Trian/le filed !ith 6ud/e ,ruselasA sala
an ur/ent ex parte otion for the transfer of custod. of the sei-ed Mitsubishi
photo color paper stored in the office of :II,.
On Februar. 9, 4***, respondents Sanl., ="T and :R5 oved to Buash the
search !arrant !hich !as denied b. 6ud/e ,ruselas in an order dated March
;, 4***.
The said respondents filed a otion for reconsideration !hich !as /ranted b.
6ud/e ,ruselas in the first assailed order of March 49, 4***. Respondent
6ud/e held that there is doubt !hether the act coplained of )unfair
copetition+ is criinal in nature.
Petitioner Solid Trian/le filed a otion for reconsideration contendin/ that the
Buashal of the search !arrant is not proper considerin/ the pendenc. of the
preliinar. investi/ation in I.S. No. 4%**%'901 for unfair copetition !herein
the sei-ed ites !ill be used as evidence.
On March '2, 4***, 6ud/e ,ruselas issued the second assailed order Solid Trian/leAs otion for reconsideration.
On March '*, 4***, petitioner Solid Trian/le filed !ith ,ranch *4 of the sae
#ourt, presided b. 6ud/e =ita S. Tolentino%Cenilo, #ivil #ase No. $%**%&0'12
for daa/es and in3unction !ith for !rits of preliinar. in3unction and
attachent. Ipleaded as defendants !ere Sanl., ="T and :R5.
On March &1, 4***, the defendants filed their opposition to the application for
the issuance of !rits of in3unction and attachent.
On March &4, 4***, 6ud/e Cenilo denied petitionerAs application for a
preliinar. attachent on the /round that the application is not supported
!ith an affidavit b. the applicant, throu/h its authori-ed officer, !ho personall.
<no!s the facts.
Mean!hile, on 5pril '1, 4***, 6ud/e ,ruselas issued the third assailed order,
the dispositive portion of !hich reads7
"D:R:FOR:, the fore/oin/ preises considered, the court directs
4+ :II,, Mr. Robert Sitchon and Solid Trian/le Sales #orporation to
divul/e and report to the court the e8act location of the !arehouse
!here the /oods sub3ect of this proceedin/ are presentl. <ept !ithin
sevent.%t!o hours fro receipt hereofE
'+ Mr. Robert Sitchon and Solid Trian/le Sales #orporation to
appear and sho! cause !h. the. should not be held in contept of
court for failure to obe. a la!ful order of the court at a hearin/ for the
purpose on 4' Ma. 4*** at 97&1 oAcloc< in the ornin/E
&+ The Deput. Sheriff of this #ourt to ta<e custod. of the sei-ed
/oods and cause their deliver. to the person fro !ho the /oods
!ere sei-ed !ithout further lost ?sic@ of tieE
=et a cop. of this order be served b. personal service upon Mr.
Robert Sitchon and Solid Trian/le Sales #orporation. Serve copies
also to :II, and the respondents Rod #astro and Sanl. #orporation.

5lle/in/ /rave abuse of discretion, petitioners Buestioned before the #ourt of 5ppeals
the orders of ,ranch *& of the $ue-on #it. RT# /rantin/ private respondentsA otion
for reconsideration and that of petitionersA, as !ell as the order dated 5pril '1,
4*** directin/ petitioners to, aon/ other thin/s, sho! cause !h. the. should not be
held in contept. Petitioners also assailed the order of the $ue-on #it. RT#, ,ranch
*4 their application for a !rit of attachent. Fpon the filin/ of the petition on
5pril '2, 4***, the #ourt of 5ppeals issued a teporar. restrainin/ order to prevent
6ud/e ,ruselas fro ipleentin/ the Order dated 5pril '1, 4***.
On 6ul. 2, 4***, the #ourt of 5ppeals rendered 3ud/ent initiall. /rantin/ certiorari. It
held that the Buashin/ of the !arrant deprived the prosecution of vital evidence to
deterine probable cause.
5dittedl., the #it. Prosecutor of $ue-on #it. has filed a coplaint for unfair
copetition a/ainst private respondents and that the under/oin/ preliinar.
investi/ation is in pro/ress. In the said proceedin/s, the prosecution inevitabl. !ill
present the sei-ed ites to establish a pria facie case of unfair copetition a/ainst
private respondents.
#onsiderin/ that 6ud/e ,ruselas Buashed the search !arrant, he practicall. deprived
the prosecution of its evidence so vital in establishin/ the e8istence of probable cause.
PetitionersA reliance on Vlasons Enterprises Corporation vs. Court of Appeals ?4;;
S#R5 492 )4*90+.@ is in order. Thus7
The proceedin/ for the sei-ure of propert. in virtue of a search !arrant does
not end !ith the actual ta<in/ of the propert. b. the proper officers and its
deliver., usuall. constructive, to the court. The order for the issuance of the
!arrant is not a final one and cannot constitute res 3udicata )Cruz vs.
Dinglasan, 9& Phil. &&&+. Such an order does not ascertain and ad3udicate the
peranent status or character of the sei-ed propert.. ,. its ver. nature, it is
provisional, interlocutor. )Marcelo vs. de Guzman, 44( S#R5 2;0+. It is
erel. the first step in the process to deterine the character and title of the
propert.. That deterination is done in the criinal action involvin/ the crie
or cries in connection !ith !hich the search !arrant !as issued. Dence,
such a criinal action should be prosecuted, or coenced if not .et
instituted, and prosecuted. The outcoe of the criinal action !ill dictate the
disposition of the sei-ed propert..

The appellate court further ruled that the affidavit of erits is not necessar. for the
order of preliinar. attachent to issue considerin/ that the petition itself is under
The denial !as based on the /round that the application is not supported b.
an affidavit of the applicant corporation, throu/h its authori-ed officer, !ho
personall. <no!s the facts.
"e cannot /o alon/ !ith respondent 3ud/eAs theor.. In Consul vs. Consul ?40
S#R5 220 )4**2+@, the Supree #ourt held7
5ffidavit of erits has a <no!n purpose7 #ourts and parties should
not reBuire the achiner. of 3ustice to /rind ane!, if the prospects of
a different conclusion cannot be reasonabl. reached should relief
fro 3ud/ent be /ranted. "e loo< bac< at the facts here. The
petition for relief is verified b. petitioner hiself. The merits of
petitioner's case are apparent in the recitals of the petition. aid
petition is under oath. That oath! "e #elieve! elevates the petition to
the same categor$ as a separate affidavit. To reBuire defendant to
append an affidavit of erits to his verified petition to the
circustances, is to copel hi to do the unnecessar.. Therefore,
the defect pointed b. the court belo! is one of fors, not of
substance. Result7 5bsence of a separate affidavit is of de minimis

Fpon otion b. respondents, ho!ever, the #ourt of 5ppeals reversed itself. In its
G5endator. Decision,G the appellate court held that there !as no probable cause for
the issuance of the search !arrant. 5ccordin/l., the evidence obtained b. virtue of
said !arrant !as inadissible in the preliinar. investi/ation.
8 8 8 Fnder Sections 429 and 401 of R.5. 9'*& )the Intellectual Propert.
#ode+, there is unfair copetition if the alle/ed offender has /iven to his
/oods the /eneral appearance of the /oods of another anufacturer or
dealer and sells or passes the off as /oods of that anufacturer or dealer in
order to deceive or defraud the /eneral public or the le/itiate trader. 5lso, if
he a<es false stateents in the course of trade to discredit the /oods,
business, or services of another.
Fndisputedl., the sei-ed /oods fro Sanl. are /enuine and not ere
iitations. This is aditted b. petitioners in their application for a search
!arrant and supportin/ affidavits, 5nne8es G5G to GDG, inclusive, in their 5pril
'0, 4*** Subission of 5nne8es to this #ourt. It bears stressin/ that there is
no sho!in/ or alle/ation that Sanl. has presented, sold, or passed off its
photo/raphic paper as /oods !hich coe fro Solid Trian/le. There is no
attept on its part to deceive.
,oth Sanl. and Solid Trian/le sell /enuine Mitsubishi products. Solid Trian/le
acBuires its /oods fro 6apan on the basis of its e8clusive distributorship !ith
Mitsubishi #orporation. "hile Sanl. bu.s its /oods fro Don/<on/, claiin/
it is a parallel iporter, not an unfair copetitor. 5s defined, a parallel
iporter is one !hich iports, distributes, and sells /enuine products in the
ar<et, independentl$ of an exclusive distri#utorship or agenc$ agreement
!ith the anufacturer. 5nd, this is precisel. !hat Sanl. states as its
coercial status.
Records sho! that Sanl. sold its photo/raphic paper purchased fro
Don/<on/ !ithout alterin/ its appearance. It is distributed in the sae
Mitsubishi bo8 !ith its lo/o and distin/uishin/ ar<s as ar<eted in 6apan.
The sae bro!n paper !ith the Mitsubishi seal is !rapped around its
products. #opies of the iportation docuents and the certification on
iports issued b. the Philippine /overnent reco/ni-ed SocieteA CeneraleA dA
Surveillance )SCS+ !ere appended to the otion to Buash search !arrant.
Thus, on factual basis, the real dispute is actuall. bet!een Solid Trian/le and
the anufacturer Mitsubishi. If Solid Trian/le feels a//rieved, it should sue
Mitsubishi for daa/es, if at all for breach of its distributorship. ,ut that is
bet!een the.
#ertainl., there is here no probable cause to 3ustif. the issuance of a search
!arrant based on a criinal action for Gunfair copetition.G
Therefore, since there is no probable cause for unfair copetition in this case,
then the Buashal of the search !arrant b. respondent 6ud/e ,ruselas is valid.
This bein/ the case, there is erit in the otion for reconsideration.
In ascertainin/ the le/alit. of a search !arrant and the validit. of the search
and sei-ure conducted b. the :II, a/ents b. virtue of the !arrant, it is
essential that a crie has been coitted or is bein/ coitted and that the
thin/s sei-ed are fruits of the crie or the eans b. !hich it is coitted.
The validit. of a search and sei-ure is of constitutional diensions. The ri/ht
to privac. and the sanctit. of a personAs house, papers and effects a/ainst
unreasonable searches and sei-ures are not onl. ancient. The. are also
-ealousl. protected.
888 888 888
Solid Trian/le contends that the Buashal of the search !arrant deprived it of
its ri/ht to prove a prima facie case of unfair copetition in the preliinar.
investi/ation. "e initiall. a/reed !ith it.
"hile Solid Trian/le has the ri/ht to present ever. sin/le piece of evidence it
can /ather and uster, ho!ever, it has no ri/ht to prove its case throu/h the
use of ille/all. sei-ed evidence secured in dero/ation of a constitutionall.
/uaranteed ri/ht.
The constitutional provision that an. evidence obtained in violation of the
provision a/ainst unreasonable searches and sei-ures Gshall be inadissible
for an. purpose in an. proceedin/G finds application here. The /oods sei-ed
!ithout probable cause are fruits of the poisonous tree and cannot be used
for the purpose of provin/ unfair copetition durin/ preliinar. investi/ation
The case of Vlasons Enterprises Corporation vs. Court of Appeals does not
appl. since it involved a different set of facts and issues.
On the contrar., it is the case of %eople vs. Court of Appeals ?'42 S#R5 414
)4**'+@ that /overns, !here the Supree #ourt ruled that !ith the Buashal of
the search !arrant, the sei-ed /oods could not be used as evidence for an.
purpose, in an. proceedin/.

5s re/ards the preliinar. attachent, the appellate court found that there !as no
/round for the issuance of the !rit because7
8 8 8 Sanl. does not den. that it sells Mitsubishi photo/raphic color paper. ,ut
there is no sho!in/ that it attepts to depart fro countr., defraud Solid
Trian/le or the public, conceal or dispose of un3ustl. detained personal
propert., or coit an. of the acts provided in Rule ;0 of the 4**0 Rules of
#ivil Procedure as /rounds for the issuance of a !rit of preliinar.

Petitioners oved for reconsideration but the sae !as denied b. the #ourt of
5ppeals in its Resolution dated 5u/ust (, '111.
In assailin/ the 5endator. Decision of the #ourt of 5ppeals, petitioners ar/ue that7
TD: 6FDC: "DO ISSF:D 5 S:5R#D "5RR5NT TD5T D5S 5=R:5DH ,::N
D:#:IT 5ND ,5D F5ITD, TD:R: :IISTS PRO,5,=: #5FS: TD5T TD: #RIM:
#OMP=5INT, 5S TD: #OFRT OF 5PP:5=S D5S 5=R:5DH RF=:D, 5ND ON TD:

Petitioners contend that the #onstitution does not authori-e the 3ud/e to reverse
hiself and Buash the !arrant, Gespeciall. after /oods had been sei-ed pursuant to
the search !arrant, and the prosecution is poised to push for!ard !ith the /oods as
In findin/ that doubt e8ists that a crie has been coitted, it is ar/ued
that the 3ud/e Gtrench?ed@ upon the prero/ative and dut. of the cit. prosecutor.G

The contention has no erit.
It is undisputed that onl. 3ud/es have the po!er to issue search !arrants.
function is e8clusivel. 3udicial. 5rticle III of the #onstitution uneBuivocall. states7
S:#TION '. The ri/ht of the people to be secure in their persons, houses,
papers, and effects a/ainst unreasonable searches and sei-ures of !hatever
nature and for an. purpose shall be inviolable, and no search !arrant or
!arrant of arrest shall issue e8cept upon probable cause to be deterined
personall. #$ the &udge after e8aination under oath or affiration of the
coplainant and the !itnesses he a. produce, and particularl. describin/
the place to be searched and the persons or thin/s to be sei-ed. ?:phasis
Inherent in the courtsA po!er to issue search !arrants is the po!er to Buash !arrants
alread. issued. In this connection, this #ourt has ruled that the otion to Buash should
be filed in the court that issued the !arrant unless a criinal case has alread. been
instituted in another court, in !hich case, the otion should be filed !ith the latter.

The rulin/ has since been incorporated in Rule 4'2 of the Revised Rules of #riinal
S:#TION 4(. Motion to 'uash a search "arrant or to suppress evidence(
"here to file. J 5 otion to Buash a search !arrant and>or to suppress
evidence obtained thereb. a. be filed in and acted upon onl. b. the court
!here the action has been instituted. If no criinal action has been instituted,
the otion a. be filed in and resolved b. the court that issued the search
!arrant. Do!ever, if such court failed to resolve the otion and a criinal
case is subseBuentl. filed in another court, the otion shall be resolved b.
the latter court.
In the deterination of probable cause, the court ust necessaril. resolve !hether or
not an offense e8ists to 3ustif. the issuance or Buashal of the search !arrant. Prior to
the revision of Deceber 4, '111, Rule 4'2 of the Rules of #ourt provided7
S:#TION &. )e'uisites for issuing search "arrant. J 5 search !arrant shall
not issue but upon probable cause in connection !ith one specific offense to
be deterined personall. b. the 3ud/e after e8aination under oath or
affiration of the coplainant and the !itnesses he a. produce, and
particularl. describin/ the place to be searched and the thin/s to be sei-ed
?:phasis supplied.@

Note that probable cause is defined as7
. . .the e8istence of such facts and circustances !hich could lead a
reasonabl. discreet and prudent an to believe that an offense has #een
committed and that the ite)s+, article)s+ or ob3ect)s+ sou/ht in connection
!ith said offense or sub3ect to sei-ure and destruction b. la! is in the place to
be searched.

In *enneth )o$ avage+* Angelin Export Trading vs. Ta$pin,
the #ourt !as
confronted !ith a search !arrant that !as issued purportedl. in connection !ith unfair
copetition involvin/ desi/n patents. The #ourt held that the alle/ed crie is not
punishable under 5rticle 49* of the Revised Penal #ode, and accordin/l., Buashed the
search !arrant issued for the non%e8istent crie.
In the issuance of search !arrants, the Rules of #ourt reBuires a findin/ of
probable cause in connection !ith one specific offense to be deterined
personall. b. the 3ud/e after e8aination of the coplainant and the
!itnesses he a. produce, and particularl. describin/ the place to be
searched and the thin/s to be sei-ed. Dence, since there is no crie to spea<
of, the search !arrant does not even be/in to fulfill these strin/ent
reBuireents and is therefore defective on its face. 8 8 8.
5 preliinar. investi/ation, b. definition, also reBuires a findin/ b. the authori-ed
officer of the coission of a crie. Previous to the '111 revision, Section 4 of Rule
44' of the Rules of #ourt defined a preliinar. investi/ation as Gan inBuir. or
proceedin/ to deterine !hether there is sufficient /round to en/ender a !ell%founded
belief that a crie co/ni-able b. the Re/ional Trial #ourt has #een committed and the
respondent is probabl. /uilt. thereof, and should be held for trial.AA

Section ' of the sae Rule enuerates !ho a. conduct preliinar. investi/ations7
S:#TION '. ,fficers authorized to conduct preliminar$ investigations. J The
follo!in/ a. conduct preliinar. investi/ations7
)a+ Provincial or cit. fiscals and their assistantsE
)b+ 6ud/es of the Municipal Trial #ourts and Municipal #ircuit Trial
)c+ National and Re/ional state prosecutorsE and
)d+ Such other officers as a. be authori-ed b. la!.
Their authorit. to conduct preliinar. investi/ations shall include all cries
co/ni-able b. the proper court in their respective territorial 3urisdictions.

The deterination of probable cause durin/ a preliinar. investi/ation has been
described as an e8ecutive function.
The proceedin/s for the issuance>Buashal of a search !arrant before a court on the
one hand, and the preliinar. investi/ation before an authori-ed officer on the other,
are proceedin/s entirel. independent of each other. One is not bound b. the otherAs
findin/ as re/ards the e8istence of a crie. The purpose of each proceedin/ differs
fro the other. The first is to deterine !hether a !arrant should issue or be Buashed,
and the second, !hether an inforation should be filed in court.
"hen the court, in deterinin/ probable cause for issuin/ or Buashin/ a search
!arrant, finds that no offense has been coitted, it does not interfere !ith or
encroach upon the proceedin/s in the preliinar. investi/ation. The court does not
obli/e the investi/atin/ officer not to file an inforation for the courtAs rulin/ that no
crie e8ists is onl. for purposes of issuin/ or Buashin/ the !arrant. This does not, as
petitioners !ould li<e to believe, constitute a usurpation of the e8ecutive function.
Indeed, to shir< fro this dut. !ould aount to an abdication of a constitutional
The effect of the Buashal of the !arrant on the /round that no offense has been
coitted is to render the evidence obtained b. virtue of the !arrant Ginadissible for
an. purpose in an. proceedin/,G includin/ the preliinar. investi/ation. 5rticle III of the
#onstitution provides7
S:#TION &. )4+ . . .
)'+ 5n. evidence obtained in violation of this or the precedin/ section ?Section
'@ shall be inadissible for an. purpose in an. proceedin/.
It a. be true that, as a result of the Buashal of the !arrant, the private coplainant is
deprived of vital evidence to establish his case, but such is the inevitable
Nevertheless, the inadissibilit. of the evidence obtained throu/h an ille/al !arrant
does not necessaril. render the preliinar. investi/ation acadeic. The preliinar.
investi/ation and the filin/ of the inforation a. still proceed if, because of other
)adissible+ evidence, there e8ists Gsufficient /round to en/ender a !ell%founded belief
that a crie has been coitted and the respondent is probabl. /uilt. thereof, and
should be held for trial.G The findin/ b. the court that no crie e8ists does not preclude
the authori-ed officer conductin/ the preliinar. investi/ation fro a<in/ his o!n
deterination that a crie has been coitted and that probable cause e8ists for
purposes of filin/ the inforation.
Petitioners also ar/ue that Section 4(, Rule 4'2 of the Revised Rules of #riinal
Procedure, supra, !hile intended Gto resolve conflicts of responsibilit. bet!een courts,G
Gdoes not e8pressl. cover the situation !here the criinal coplaint is pendin/ !ith
the prosecutor.G In such a case, petitioners subit, the public prosecutor should be
allo!ed to resolve the Buestion of !hether or not probable cause e8ists.

The #ourt finds this interpretation too contrived. Section 4(, Rule 4'2 precisel. covers
situations li<e the one at bar. Section 4( e8pressl. provides that a otion to Buash a
search !arrant and>or to suppress evidence obtained thereb. a. be filed in and
acted upon onl. b. the court !here the action has been instituted. Fnder the sae
section, the court !hich issued the search !arrant a. be prevented fro resolvin/ a
otion to Buash or suppress evidence onl. !hen a criinal case is subseBuentl. filed
in another court, in !hich case, the otion is to be resolved b. the latter court. It is
therefore puerile to ar/ue that the court that issued the !arrant cannot entertain
otions to suppress evidence !hile a preliinar. investi/ation is on/oin/. Such
erroneous interpretation !ould place a person !hose propert. has been sei-ed b.
virtue of an invalid !arrant !ithout a reed. !hile the /oods procured b. virtue thereof
are sub3ect of a preliinar. investi/ation
"e no! turn to the Buestion of !hether the facts, as presented before the trial court,
constitute an offense.
Private respondents are alle/ed to have coitted unfair copetition in violation of
Section 429 of the Intellectual Propert. #ode, !hich states7
S:#TION 429. -nfair Competition! )ights! )egulation and )emedies. J
429.4 5 person !ho has identified in the ind of the public /oods he
anufactures or deals in, his business or services fro those of others,
!hether or not a re/istered ar< is eplo.ed, has a propert. ri/ht in the
/ood!ill of the said /oods, business or services so identified, !hich !ill be
protected in the sae anner as other propert. ri/hts.
429.' 5n. person !ho shall eplo. deception or an. other eans contrar. to
/ood faith b. !hich he shall pass off the /oods anufactured b. hi or in
!hich he deals, or his business, or services for those of the one havin/
established such /ood!ill, or !ho shall coit an. acts calculated to
produce said result, shall be /uilt. of unfair copetition, and shall be sub3ect
to an action therefor.
429.& In particular, and !ithout in an. !a. liitin/ the scope of protection
a/ainst unfair copetition, the follo!in/ shall be deeed /uilt. of unfair
)a+ 5n. person, !ho is sellin/ his /oods and /ives the the /eneral
appearance of /oods of another anufacturer or dealer, either as to the
/oods theselves or in the !rappin/ of the pac<a/es in !hich the. are
contained, or the devices or !ords thereon, or in an. other feature of their
appearance, !hich !ould be li<el. to influence purchasers to believe that the
/oods offered are those of a anufacturer or dealer, other than the actual
anufacturer or dealer, or !ho other!ise clothes the /oods !ith such
appearance as shall deceive the public and defraud another of his le/itiate
trade, or an. subseBuent vendor of such /oods or an. a/ent of an. vendor
en/a/ed in sellin/ such /oods !ith a lie purposeE
)b+ 5n. person !ho b. an. artifice, or device, or !ho eplo.s an. other
eans calculated to induce the false belief that such person is offerin/ the
service of another !ho has identified such services in the ind of the publicE
)c+ 5n. person !ho shall a<e an. false stateent in the course of trade or
!ho shall coit an. other act contrar. to /ood faith of a nature calculated to
discredit the /oods, business or services of another.
429.( The reedies provided b. Sections 4;2, 4;0 and 424 shall appl.
mutatis mutandis.
The sae la!, in Section 401, provides the penalt. for violation of Section 4297
S:#TION 401. %enalties. J Independent of the civil and adinistrative
sanctions iposed b. la!, a criinal penalt. of iprisonent fro t!o )'+
.ears to five );+ .ears and a fine ran/in/ fro Fift. thousand pesos );1,111+
to T!o hundred thousand pesos )'11,111+, shall be iposed on an. person
!ho is found /uilt. of coittin/ an. of the acts entioned in Section 4;;,
Section 429 and Subsection 42*.4.
Petitioners subit that Gthe iportation of even /enuine /oods can constitute a crie
under the Intellectual Propert. #ode so lon/ as fraud or deceit is present.G The intent
to deceive in this case, accordin/ to petitioners, is GpatentG Gfro the follo!in/
undisputed factsG7
)a+ ,efore ar<etin/ its product, the respondents totall. obliterated and
erased the :ulsion Nuber and that !as printed on the bo8>carton of
the product because of !hich the source of the /oods can no lon/er be
)b+ Respondents even covered the bo8es !ith ne!spapers to conceal true
)c+ ,ein/ also en/a/ed in the sale of photo eBuipents ?sic@ and havin/ had
the occasion of participatin/ in the sae e8hibit !ith petitioner Solid Trian/le
several ties alread., respondents certainl. <ne! that petitioner Solid
Trian/le is the sole and e8clusive iporter and distributor of Mitsubishi Photo
)d+ T!o a/ents of the :II, !ere also able to confir fro a sales/irl of
respondents that substantial Buantit. of stoc<s of Mitsubishi Photo Paper are
available at respondentsA store and that the products are /enuine, as the. are
dul. authori-ed to sell and distribute it to interested custoers.
)e+ No better proof of unfair copetition is the sei-ure of the /oods, (;4
bo8es of Mitsubishi photo/raphic color paper.

Petitioners further e8pound7
(0. "e a. cate/ori-e the acts of the respondents as Gunder/round sales
and ar<etin/G of /enuine /oods, underinin/ the propert. ri/hts of
petitioner Solid Trian/le. The #ourt of 5ppeals itself reco/ni-ed the ri/hts of a
dealer. The acts of the respondents !ere ade to appropriate un3ustl. the
/ood!ill of petitioner Solid Trian/le, and /ood!ill is protected b. the la! on
unfair copetition.
(9. Petitioner Solid Trian/le has established a trade or business in !hich it
had acBuired /ood!ill and reputation that !ill be protected, and so, to perit
respondents to continue iportin/ and distributin/ Mitsubishi Photo Paper,
!ould be to countenance the unla!ful appropriation of the benefit of a
/ood!ill !hich petitioner Solid Trian/le has acBuired and perit the
respondent to /rab the reputation or /ood!ill of the business of another.
(*. . . petitioners have a valid cause to coplain a/ainst respondents for the
criinal violation of the Intellectual Propert. =a! !hen the latter ade it
appear that the. !ere dul. authori-ed to sell or distribute Mitsubishi Photo
Paper in the Philippines, !hen in truth and in fact the. !ere not, and !hen
the. !ere hidin/ their iportation fro the petitioners b. such acts as
reovin/ the :ulsion Nuber and and coverin/ the bo8es !ith old

"e disa/ree !ith petitioners and find that the evidence presented before the trial court
does not prove unfair copetition under Section 429 of the Intellectual Propert. #ode.
Sanl. #orporation did not pass off the sub3ect /oods as that of another. Indeed, it
adits that the /oods are /enuine Mitsubishi photo/raphic paper, !hich it purchased
fro a supplier in Don/ Kon/.
Petitioners also alle/e that private respondents Gade
it appear that the. !ere dul. authori-ed to sell or distribute Mitsubishi Photo Paper in
the Philippines.G 5ssuin/ that this act constitutes a crie, there is no proof to
establish such an alle/ation.
"e a/ree !ith petitioners, ho!ever, that the #ourt of 5ppeals !ent be.ond the issues
!hen it ruled that there !ere no /rounds for the issuance of an order of preliinar.
attachent. The onl. issue raised !ith respect to the preliinar. attachent !as
!hether the application for the !rit should have been denied because the sae !as
not supported b. an affidavit of the applicant corporation, throu/h its authori-ed officer,
!ho personall. <no!s the facts. "hether there are sufficient /rounds to 3ustif. the
order is a atter best left to the trial court, !hich apparentl. has .et to hear the atter.
Thus, !e sustain the #ourt of 5ppealsA ori/inal decision holdin/ that an affidavit of
erit is not necessar. since the petition is verified b. an authori-ed officer !ho
personall. <no!s the facts.
Siilarl. preature is !hether petitionersA failure to return the /oods to respondents
constituted indirect contept. The assailed order dated 5pril '1, 4*** !as a Gsho!
causeG order. ,efore an. hearin/ on the order could be held, petitioners proptl. filed
a petition for certiorari. #learl., the trial court had .et to rule on the atter, and for this
#ourt no! to hold petitionersA act conteptuous !ould preept said court.
"D:R:FOR:, the petition is CR5NT:D IN P5RT. The 5endator. Decision of the
#ourt of 5ppeals dated March &4, '111, as !ell as its Resolution dated 5u/ust (,
'111, is 5FFIRM:D insofar as it holds that )4+ the $ue-on #it. Re/ional Trial #ourt,
,ranch *&, has the po!er to deterine the e8istence of a crie in Buashin/ a search
!arrant and, )'+ the evidence does not support a findin/ that the crie of unfair
copetition has been coitted b. respondentsE and R:V:RS:D insofar as it holds
that )4+ there are no /rounds to !arrant the issuance of a !rit of preliinar.
attachent and )'+ petitioners are /uilt. of contept. The case is reanded for further
proceedin/s to the courts of ori/in, nael., ,ranch *4 of RT#, $ue-on #it. for
resolution of the application for a !rit of attachent, and ,ranch *& of the sae court
for resolution of the application to cite petitioners for contept.
Petitioners are ordered to return to respondent Sanl. #orporation the (;4 bo8es of
Mitsubishi photo/raphic color paper sei-ed b. virtue of Search "arrant No. &&'( )**+
issued b. the $ue-on #it. Re/ional Trial #ourt, ,ranch *&.