Case Title: BIRKENSTOCK v.

PHILIPPINE SHOE EXPO

Petitioners Claim:

Respondents Claim:

Issue/s:
Ruling:

Case Title: CENTURY CHINESE MEDICINE v. PEOPLE

Petitioners Claim:

Respondents Claim:

Issue/s:
Ruling:

Case Title: DIAZ v. PEOPLE

Petitioners Claim:

Respondents Claim:

Issue/s:
Ruling:

Case Title: ECOLE DE CUISINE MANILLE v. COINTREAU

Petitioners Claim:

Respondents Claim:

Issue/s:
Ruling:

Case Title: REPUBLIC GAS v. PETRON

Petitioners Claim:

Respondents Claim:

Issue/s:
Ruling:

Case Title: SONIC STEEL v. CHUA

Petitioners Claim:

Respondents Claim:

Issue/s:
Ruling:

Case Title: UYCO v. LO

Petitioners Claim:

Respondents Claim:

Issue/s:
Ruling:
Assailed in this Petition for Review on Certiorari
1
are the Court of Appeals (CA) Decision
2
dated June
25, 2010 and Resolution
3
dated October 27, 2010 in CA-G.R. SP No. 112278 which reversed and
set aside the Intellectual Property Office (IPO) Director Generals Decision
4
dated December 22,
2009 that allowed the registration of various trademarks in favor of petitioner Birkenstock
Orthopaedie GmbH & Co. KG.
The Facts
Petitioner, a corporation duly organized and existing under the laws of Germany, applied for various
trademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark Application
Serial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the International Classification
of Goods and Services (Nice Classification) with filing date of March 11, 1994; (b) "BIRKENSTOCK
BAD HONNEF -RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL AND
REPRESENTATION OF A FOOT, CROSS AND SUNBEA M" under TASN 4-1994-091509 for goods
falling under Class 25 of the Nice Classification with filing date of March 11, 1994; and (c)
"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL
AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-095043 for
goods falling under Class 10 of the Nice Classification with filing date of September 5, 1994 (subject
applications).
5

However, registration proceedings of the subject applications were suspended in view of an existing
registration of the mark "BIRKENSTOCK AND DEVICE" under Registration No. 56334 dated
October 21, 1993 (Registration No. 56334) in the name of Shoe Town International and Industrial
Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing
Corporation.
6
In this regard, on May 27, 1997 petitioner filed a petition for cancellation of Registration
No. 56334 on the ground that it is the lawful and rightful owner of the Birkenstock marks
(Cancellation Case).
7
During its pendency, however, respondent and/or its predecessor-in-interest
failed to file the required 10th Year Declaration of Actual Use (10th Year DAU) for Registration No.
56334 on or before October 21, 2004,
8
thereby resulting in the cancellation of such
mark.
9
Accordingly, the cancellation case was dismissed for being moot and academic.
10

The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the subject
applications in the IPO e-Gazette on February 2, 2007.
11
In response, respondent filed three (3)
separate verified notices of oppositions to the subject applications docketed as Inter Partes Case
Nos. 14-2007-00108, 14-2007-00115, and 14-2007-00116,
12
claiming, inter alia, that: (a) it, together
with its predecessor-in-interest, has been using Birkenstock marks in the Philippines for more than
16 years through the mark "BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subject
applications are identical to the one covered by Registration No. 56334 and thus, petitioner has no
right to the registration of such marks; (c) on November 15, 1991, respondents predecessor-in-
interest likewise obtained a Certificate of Copyright Registration No. 0-11193 for the word
"BIRKENSTOCK" ; (d) while respondent and its predecessor-in-interest failed to file the 10th Yea r
DAU, it continued the use of "BIRKENSTOCK AND DEVICE" in lawful commerce; and (e) to record
its continued ownership and exclusive right to use the "BIRKENSTOCK" marks, it has filed TASN 4-
2006-010273 as a " re-application " of its old registration, Registration No. 56334.
13
On November 13,
2007, the Bureau of Legal Affairs (BLA) of the IPO issued Order No. 2007-2051 consolidating the
aforesaid inter partes cases (Consolidated Opposition Cases).
14

The Ruling of the BLA
In its Decision
15
dated May 28, 2008, the BLA of the IPO sustained respondents opposition, thus,
ordering the rejection of the subject applications. It ruled that the competing marks of the parties are
confusingly similar since they contained the word "BIRKENSTOCK" and are used on the same and
related goods. It found respondent and its predecessor-in-interest as the prior user and adopter of
"BIRKENSTOCK" in the Philippines, while on the other hand, petitioner failed to present evidence of
actual use in the trade and business in this country. It opined that while Registration No. 56334 was
cancelled, it does not follow that prior right over the mark was lost, as proof of continuous and
uninterrupted use in trade and business in the Philippines was presented. The BLA likewise opined
that petitioners marks are not well -known in the Philippines and internationally and that the various
certificates of registration submitted by petitioners were all photocopies and, therefore, not
admissible as evidence.
16

Aggrieved, petitioner appealed to the IPO Director General.
The Ruling of the IPO Director General
In his Decision
17
dated December 22, 2009, the IPO Director General reversed and set aside the
ruling of the BLA, thus allowing the registration of the subject applications. He held that with the
cancellation of Registration No. 56334 for respondents failure to file the 10th Year DAU, there is no
more reason to reject the subject applications on the ground of prior registration by another
proprietor.
18
More importantly, he found that the evidence presented proved that petitioner is the true
and lawful owner and prior user of "BIRKENSTOCK" marks and thus, entitled to the registration of
the marks covered by the subject applications.
19
The IPO Director General further held that
respondents copyright for the word "BIRKENSTOCK" is of no moment since copyright and
trademark are different forms of intellectual property that cannot be interchanged.
20

Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a petition for
review with the CA.
Ruling of the CA
In its Decision
21
dated June 25, 2010, the CA reversed and set aside the ruling of the IPO Director
General and reinstated that of the BLA. It disallowed the registration of the subject applications on
the ground that the marks covered by such applications "are confusingly similar, if not outright
identical" with respondents mark.
22
It equally held that respondents failure to file the 10th Year DAU
for Registration No. 56334 "did not deprive petitioner of its ownership of the BIRKENSTOCK mark
since it has submitted substantial evidence showing its continued use, promotion and advertisement
thereof up to the present."
23
It opined that when respondents predecessor-in-interest adopted and
started its actual use of "BIRKENSTOCK," there is neither an existing registration nor a pending
application for the same and thus, it cannot be said that it acted in bad faith in adopting and starting
the use of such mark.
24
Finally, the CA agreed with respondent that petitioners documentary
evidence, being mere photocopies, were submitted in violation of Section 8.1 of Office Order No. 79,
Series of 2005 (Rules on Inter Partes Proceedings).
Dissatisfied, petitioner filed a Motion for Reconsideration
25
dated July 20, 2010, which was, however,
denied in a Resolution
26
dated October 27, 2010. Hence, this petition.
27

Issues Before the Court
The primordial issue raised for the Courts resolution is whether or not the subject marks should be
allowed registration in the name of petitioner.
The Courts Ruling
The petition is meritorious.
A. Admissibility of Petitioners Documentary Evidence.
In its Comment
28
dated April 29, 2011, respondent asserts that the documentary evidence submitted
by petitioner in the Consolidated Opposition Cases, which are mere photocopies, are violative of
Section 8.1 of the Rules on Inter Partes Proceedings, which requires certified true copies of
documents and evidence presented by parties in lieu of originals.
29
As such, they should be deemed
inadmissible.
The Court is not convinced.
It is well-settled that "the rules of procedure are mere tools aimed at facilitating the attainment of
justice, rather than its frustration. A strict and rigid application of the rules must always be eschewed
when it would subvert the primary objective of the rules, that is, to enhance fair trials and expedite
justice. Technicalities should never be used to defeat the substantive rights of the other party. Every
party-litigant must be afforded the amplest opportunity for the proper and just determination of his
cause, free from the constraints of technicalities."
30
"Indeed, the primordial policy is a faithful
observance of [procedural rules], and their relaxation or suspension should only be for persuasive
reasons and only in meritorious cases, to relieve a litigant of an injustice not commensurate with the
degree of his thoughtlessness in not complying with the procedure prescribed."
31
This is especially
true with quasi-judicial and administrative bodies, such as the IPO, which are not bound by technical
rules of procedure.
32
On this score, Section 5 of the Rules on Inter Partes Proceedings provides:
Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases. The
rules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases.
The Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict technical
rules of procedure and evidence but may adopt, in the absence of any applicable rule herein, such
mode of proceedings which is consistent with the requirements of fair play and conducive to the just,
speedy and inexpensive disposition of cases, and which will give the Bureau the greatest possibility
to focus on the contentious issues before it. (Emphasis and underscoring supplied)
In the case at bar, while petitioner submitted mere photocopies as documentary evidence in the
Consolidated Opposition Cases, it should be noted that the IPO had already obtained the originals of
such documentary evidence in the related Cancellation Case earlier filed before it. Under this
circumstance and the merits of the instant case as will be subsequently discussed, the Court holds
that the IPO Director Generals relaxation of procedure was a valid exercise of his discretion in the
interest of substantial justice.
33

Having settled the foregoing procedural matter, the Court now proceeds to resolve the substantive
issues.
B. Registration and ownership of "BIRKENSTOCK."
Republic Act No. (RA) 166,
34
the governing law for Registration No. 56334, requires the filing of a
DAU on specified periods,
35
to wit:
Section 12. Duration. Each certificate of registration shall remain in force for twenty years:
Provided, That registrations under the provisions of this Act shall be cancelled by the Director,
unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the
certificate of registration, the registrant shall file in the Patent Office an affidavit showing that the
mark or trade-name is still in use or showing that its non-use is due to special circumstance which
excuse such non-use and is not due to any intention to abandon the same, and pay the required fee.
The Director shall notify the registrant who files the above- prescribed affidavits of his acceptance or
refusal thereof and, if a refusal, the reasons therefor. (Emphasis and underscoring supplied)
The aforementioned provision clearly reveals that failure to file the DAU within the requisite period
results in the automatic cancellation of registration of a trademark. In turn, such failure is tantamount
to the abandonment or withdrawal of any right or interest the registrant has over his trademark.
36

In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. 56334
within the requisite period, or on or before October 21, 2004. As a consequence, it was deemed to
have abandoned or withdrawn any right or interest over the mark "BIRKENSTOCK." Neither can it
invoke Section 236
37
of the IP Code which pertains to intellectual property rights obtained under
previous intellectual property laws, e.g., RA 166, precisely because it already lost any right or
interest over the said mark.
Besides, petitioner has duly established its true and lawful ownership of the mark "BIRKENSTOCK."
Under Section 2
38
of RA 166, which is also the law governing the subject applications, in order to
register a trademark, one must be the owner thereof and must have actually used the mark in
commerce in the Philippines for two (2) months prior to the application for registration. Section 2-
A
39
of the same law sets out to define how one goes about acquiring ownership thereof. Under the
same section, it is clear that actual use in commerce is also the test of ownership but the provision
went further by saying that the mark must not have been so appropriated by another. Significantly, to
be an owner, Section 2-A does not require that the actual use of a trademark must be within the
Philippines. Thus, under RA 166, one may be an owner of a mark due to its actual use but may not
yet have the right to register such ownership here due to the owners failure to use the same in the
Philippines for two (2) months prior to registration.
40

It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring
ownership.1wphi1 If the applicant is not the owner of the trademark, he has no right to apply for its
registration. Registration merely creates a prima facie presumption of the validity of the registration,
of the registrants ownership of the trademark, and of the exclusive right to the use thereof. Such
presumption, just like the presumptive regularity in the performance of official functions, is rebuttable
and must give way to evidence to the contrary.
41

Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it is
the ownership of a trademark that confers the right to register the same. A trademark is an industrial
property over which its owner is entitled to property rights which cannot be appropriated by
unscrupulous entities that, in one way or another, happen to register such trademark ahead of its
true and lawful owner. The presumption of ownership accorded to a registrant must then necessarily
yield to superior evidence of actual and real ownership of a trademark.
The Courts pronouncement in Berris Agricultural Co., Inc. v. Abyadang
42
is instructive on this point:
The ownership of a trademark is acquired by its registration and its actual use by the manufacturer
or distributor of the goods made available to the purchasing public. x x x A certificate of registration
of a mark, once issued, constitutes prima facie evidence of the validity of the registration, of the
registrants ownership of the mark, and of the registrants exclusive right to use the same in
connection with the goods or services and those that are related thereto specified in the certificate. x
x x In other words, the prima facie presumption brought about by the registration of a mark may be
challenged and overcome in an appropriate action, x x x by evidence of prior use by another person,
i.e. , it will controvert a claim of legal appropriation or of ownership based on registration by a
subsequent user. This is because a trademark is a creation of use and belongs to one who first used
it in trade or commerce.
43
(Emphasis and underscoring supplied)
In the instant case, petitioner was able to establish that it is the owner of the mark "BIRKENSTOCK."
It submitted evidence relating to the origin and history of "BIRKENSTOCK" and its use in commerce
long before respondent was able to register the same here in the Philippines. It has sufficiently
proven that "BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor, Johann
Birkenstock, a shoemaker, on his line of quality footwear and thereafter, numerous generations of
his kin continuously engaged in the manufacture and sale of shoes and sandals bearing the mark
"BIRKENSTOCK" until it became the entity now known as the petitioner. Petitioner also submitted
various certificates of registration of the mark "BIRKENSTOCK" in various countries and that it has
used such mark in different countries worldwide, including the Philippines.
44

On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only
presented copies of sales invoices and advertisements, which are not conclusive evidence of its
claim of ownership of the mark "BIRKENSTOCK" as these merely show the transactions made by
respondent involving the same.
45

In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful owner
of the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in bad faith in
having it registered in its name. In this regard, the Court quotes with approval the words of the IPO
Director General, viz.:
The facts and evidence fail to show that [respondent] was in good faith in using and in registering the
mark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly distinct and arbitrary
mark. It is very remote that two persons did coin the same or identical marks. To come up with a
highly distinct and uncommon mark previously appropriated by another, for use in the same line of
business, and without any plausible explanation, is incredible. The field from which a person may
select a trademark is practically unlimited. As in all other cases of colorable imitations, the
unanswered riddle is why, of the millions of terms and combinations of letters and designs available,
[respondent] had to come up with a mark identical or so closely similar to the [petitioners] if there
was no intent to take advantage of the goodwill generated by the [petitioners] mark. Being on the
same line of business, it is highly probable that the [respondent] knew of the existence of
BIRKENSTOCK and its use by the [petitioner], before [respondent] appropriated the same mark and
had it registered in its name.
46

WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and Resolution dated
October 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are REVERSED and SET
ASIDE. Accordingly, the Decision dated December 22, 2009 of the IPO Director General is hereby
REINSTATED.
SO ORDERED.
CENTURY CHINESE MEDICINE CO., MING SENG CHINESE DRUGSTORE, XIANG JIAN
CHINESE DRUG STORE, TEK SAN CHINESE DRUG STORE, SIM SIM CHINESE DRUG STORE,
BAN SHIONG TAY CHINESE DRUG STORE and/or WILCENDO TAN MENDEZ, SHUANG YING
CHINESE DRUGSTORE, and BACLARAN CHINESE DRUG STORE, Petitioners,
vs.
PEOPLE OF THE PHILIPPINES and LING NA LAU, Respondents.
Before us is a petition for review on certiorari which seeks to reverse and set aside the
Decision
1
dated March 31, 2009 of the Court of Appeals in CA-G.R. CV No. 88952 and the
Resolution
2
dated July 2, 2009, which denied reconsideration thereof. The CA reversed the
Order
3
dated September 25, 2006 of the Regional Trial Court (RTC), Branch 143, Makati City,
quashing Search Warrants Nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-042 and 05-
043, and the Order
4
dated March 7, 2007 denying reconsideration thereof.
The antecedent facts are as follows:
Respondent Ling Na Lau, doing business under the name and style Worldwide Pharmacy,
5
is the
sole distributor and registered trademark owner of TOP GEL T.G. & DEVICE OF A LEAF papaya
whitening soap as shown by Certificate of Registration 4-2000-009881 issued to her by the
Intellectual Property Office (IPO) for a period of ten years from August 24, 2003.
6
On November 7,
2005, her representative, Ping Na Lau, (Ping) wrote a letter
7
addressed to National Bureau of
Investigation (NBI) Director Reynaldo Wycoco, through Atty. Jose Justo Yap and Agent Joseph G.
Furing (Agent Furing), requesting assistance for an investigation on several drugstores which were
selling counterfeit whitening papaya soaps bearing the general appearance of their products.
Agent Furing was assigned to the case and he executed an affidavit
8
stating that: he conducted his
own investigation, and on November 9 and 10, 2005, he, together with Junayd Esmael (Esmael),
were able to buy whitening soaps bearing the trademark "TOP-GEL", "T.G." & "DEVICE OF A LEAF"
with corresponding receipts from a list of drugstores which included herein petitioners Century
Chinese Medicine Co., Min Seng Chinese Drugstore, Xiang Jiang Chinese Drug Store, Tek San
Chinese Drug Store, Sim Sim Chinese Drug Store, Ban Shiong Tay Drugstore, Shuang Ying
Chinese Drugstore, and Baclaran Chinese Drug Store; while conducting the investigation and test
buys, he was able to confirm Ping's complaint to be true as he personally saw commercial quantities
of whitening soap bearing the said trademarks being displayed and offered for sale at the said
drugstores; he and Esmael took the purchased items to the NBI, and Ping, as the authorized
representative and expert of Worldwide Pharmacy in determining counterfeit and unauthorized
reproductions of its products, personally examined the purchased samples, and issued a
Certification
9
dated November 18, 2005 wherein he confirmed that, indeed, the whitening soaps
bearing the trademarks "TOP-GEL", "T.G." & "DEVICE OF A LEAF" from the subject drugstores
were counterfeit.
Esmael also executed an affidavit
10
corroborating Agent Furing's statement. Ping's affidavit
11
stated
that upon his personal examination of the whitening soaps purchased from petitioners bearing the
subject trademark, he found that the whitening soaps were different from the genuine quality of their
original whitening soaps with the trademarks "TOP-GEL", "T.G." & "DEVICE OF A LEAF" and
certified that they were all counterfeit.
On November 21, 2005, Agent Furing applied for the issuance of search warrants before the
Regional Trial Court (RTC), Branch 143, Makati City, against petitioners and other establishments
for violations of Sections 168 and 155, both in relation to Section 170 of Republic Act (RA) No. 8293,
otherwise known as the Intellectual Property Code of the Philippines. Section 168, in relation to
Section 170, penalizes unfair competition; while Section 155, in relation to Section 170, punishes
trademark infringement.
On November 23, 2005, after conducting searching questions upon Agent Furing and his witnesses,
the RTC granted the applications and issued Search Warrants Nos. 05-030, 05-033, and 05-038 for
unfair competition and Search Warrants Nos. 05-022, 05-023, 05-025, 05-042 and 05-043 for
trademark infringement against petitioners.
On December 5, 2005, Agent Furing filed his Consolidated Return of Search Warrants.
12

On December 8, 2005, petitioners collectively filed their Motion to Quash
13
the Search Warrants
contending that their issuances violated the rule against forum shopping; that Benjamin Yu (Yu) is
the sole owner and distributor of the product known as "TOP-GEL"; and there was a prejudicial
question posed in Civil Case No. 05-54747 entitled Zenna Chemical Industry v. Ling Na Lau, et al.,
pending in Branch 93 of the RTC of Quezon City, which is a case filed by Yu against respondent for
damages due to infringement of trademark/tradename, unfair competition with prayer for the
immediate issuance of a temporary restraining order and/or preliminary prohibitory injunction.
On January 9, 2006, respondent filed her Comment/Opposition
14
thereto arguing the non-existence
of forum shopping; that Yu is not a party- respondent in these cases and the pendency of the civil
case filed by him is immaterial and irrelevant; and that Yu cannot be considered the sole owner and
distributor of "TOP GEL T.G. & DEVICE OF A LEAF." The motion was then submitted for resolution
in an Order dated January 30, 2006. During the pendency of the case, respondent, on April 20,
2006, filed a Submission
15
in relation to the Motion to Quash attaching an Order
16
dated March 21,
2006 of the IPO in IPV Case No. 10-2005-00001 filed by respondent against Yu, doing business
under the name and style of MCA Manufacturing and Heidi S. Cua, proprietor of South Ocean
Chinese Drug Stores for trademark infringement and/or unfair competition and damages with prayer
for preliminary injunction. The Order approved therein the parties' Joint Motion To Approve
Compromise Agreement filed on March 8, 2006. We quote in its entirety the Order as follows:
The Compromise Agreement between the herein complainant and respondents provides as follows:
1. Respondents acknowledge the exclusive right of Complainant over the trademark TOP
GEL T.G. & DEVICE OF A LEAF for use on papaya whitening soap as registered under
Registration No. 4-2000-009881 issued on August 24, 2003.
2. Respondents acknowledge the appointment by Zenna Chemical Industry Co., Ltd. of
Complainant as the exclusive Philippine distributor of its products under the tradename and
trademark TOP GEL MCA & MCA DEVICE (A SQUARE DEVICE CONSISTING OF A
STYLIZED REPRESENTATION OF A LETTER "M" ISSUED " OVER THE LETTER "CA") as
registered under Registration No. 4-1996-109957 issued on November 17, 2000, as well as
the assignment by Zenna Chemical Industry Co., Ltd. to Complainant of said mark for use on
papaya whitening soap.
3. Respondents admit having used the tradename and trademark aforesaid but after having
realized that Complainant is the legitimate assignee of TOP GEL MCA & MCA DEVICE and
the registered owner of TOP GEL T.G. & DEVICE OF A LEAF, now undertake to voluntarily
cease and desist from using the aforesaid tradename and trademark and further undertake
not to manufacture, sell, distribute, and otherwise compete with Complainant, now and at
anytime in the future, any papaya whitening soap using or bearing a mark or name identical
or confusingly similar to, or constituting a colorable imitation of, the tradename and
trademark TOP GEL MCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF as
registered and described above.
4. Respondents further undertake to withdraw and/or dismiss their counterclaim and petition
to cancel and/or revoke Registration No. 4-2000-009881 issued to Complainant.
Respondents also further undertake to pull out within 45 days from approval of the
Compromise Agreement all their products bearing a mark or name identical or confusingly
similar to, or constituting a colorable imitation of, the tradename and trademark TOP GEL
MCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF, from the market
nationwide.
5. Respondents finally agree and undertake to pay Complainant liquidated damages in the
amount of FIVE HUNDRED THOUSAND (Php500,000.00) PESOS for every breach or
violation of any of the foregoing undertakings which complainant may enforce by securing a
writ of execution from this Office, under this case.
6. Complainant, on the other hand, agrees to waive all her claim for damages against
Respondents as alleged in her complaint filed in the Intellectual Property Office only.
7. The Parties hereby agree to submit this Compromise Agreement for Approval of this
Office and pray for issuance of a decision on the basis thereof.
Finding the Compromise Agreement to have been duly executed and signed by the parties and/or
their representatives/counsels and the terms and conditions thereof to be in conformity with the law,
morals, good customs, public order and public policy, the same is hereby APPROVED. Accordingly,
the above-entitled case is DISMISSED as all issues raised concerning herein parties have been
rendered MOOT AND ACADEMIC.
SO ORDERED.
17

On September 25, 2006, the RTC issued its Order
18
sustaining the Motion to Quash the Search
Warrants, the dispositive portion of which reads as follows:
WHEREFORE, finding that the issuance of the questioned search warrants were not supported by
probable cause, the Motion to Quash is GRANTED. Search warrants nos. 05-030, 05-033, 05-038,
05-022, 05-023, 05-025, 05-042, 05-043 are ordered lifted and recalled.
The NBI Officers who effected the search warrants are hereby ordered to return the seized items to
herein respondents within ten (10) days from receipt of this Order.
So Ordered.
19

In quashing the search warrants, the RTC applied the Rules on Search and Seizure for Civil Action
in Infringement of Intellectual Property Rights.
20
It found the existence of a prejudicial question which
was pending before Branch 93 of RTC Quezon City, docketed as Civil Case No. 05-54747, on the
determination as to who between respondent and Yu is the rightful holder of the intellectual property
right over the trademark TOP GEL T.G. & DEVICE OF A LEAF; and there was also a case for
trademark infringement and/or unfair competition filed by respondent against Yu before the IPO
which was pending at the time of the application for the search warrants. It is clear, therefore, that at
the time of the filing of the application for the search warrants, there is yet no determination of the
alleged right of respondent over the subject trademark/tradename. Also, the RTC found that
petitioners relied heavily on Yu's representation that he is the sole owner/distributor of the Top Gel
whitening soap, as the latter even presented Registration No. 4-1996-109957 from the IPO for a
term of 20 years from November 17, 2000 covering the same product. There too was the notarized
certification from Zenna Chemical Industry of Taiwan, owner of Top Gel MCA, with the caveat that
the sale, production or representation of any imitated products under its trademark and tradename
shall be dealt with appropriate legal action.
The RTC further said that in the determination of probable cause, the court must necessarily resolve
whether or not an offense exists to justify the issuance of a search warrant or the quashal of the one
already issued. In this case, respondent failed to prove the existence of probable cause, which
warranted the quashal of the questioned search warrants.
On November 13, 2006, respondent filed an Urgent Motion to Hold in Abeyance the Release of
Seized Evidence.
21

Respondent filed a motion for reconsideration, which the RTC denied in its Order
22
dated March 7,
2007.
Respondent then filed her appeal with the CA. After respondent filed her appellant's brief and
petitioners their appellee's brief, the case was submitted for decision.
On March 31, 2009, the CA rendered its assailed Decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us GRANTING
the appeal filed in this case and SETTING ASIDE the Order dated March 7, 2007 issued by Branch
143 of the Regional Trial Court of the National Capital Judicial Region stationed in Makati City in the
case involving Search Warrants Nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-042, 05-
043.
23

In reversing the RTC's quashal of the search warrants, the CA found that the search warrants were
applied for and issued for violations of Sections 155 and 168, in relation to Section 170, of the
Intellectual Property Code and that the applications for the search warrants were in anticipation of
criminal actions which are to be instituted against petitioners; thus, Rule 126 of the Rules of Criminal
Procedure was applicable. It also ruled that the basis for the applications for issuance of the search
warrants on grounds of trademarks infringement and unfair competition was the trademark TOP GEL
T.G. & DEVICE OF A LEAF; that respondent was the registered owner of the said trademark, which
gave her the right to enforce and protect her intellectual property rights over it by seeking assistance
from the NBI.
The CA did not agree with the RTC that there existed a prejudicial question, since Civil Case No. 05-
54747 was already dismissed on June 10, 2005, i.e., long before the search warrants subject of this
appeal were applied for; and that Yu's motion for reconsideration was denied on September 15,
2005 with no appeal having been filed thereon as evidenced by the Certificate of Finality issued by
the said court.
Petitioners' motion for reconsideration was denied by the CA in a Resolution dated July 2, 2009.
Hence, this petition filed by petitioners raising the issue that:
(A) THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN
REVERSING THE FINDINGS OF THE REGIONAL TRIAL COURT AND HELD THAT THE
LATTER APPLIED THE RULES ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR
INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.
24

(B) THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN
IT BASED ITS RULING ON THE ARGUMENT WHICH WAS BROUGHT UP FOR THE
FIRST TIME IN RESPONDENT LING NA LAU'S APPELLANT'S BRIEF.
25

Petitioners contend that the products seized from their respective stores cannot be the subject of the
search warrants and seizure as those Top Gel products are not fruits of any crime, infringed product
nor intended to be used in any crime; that they are legitimate distributors who are authorized to sell
the same, since those genuine top gel products bore the original trademark/tradename of TOP GEL
MCA, owned and distributed by Yu. Petitioners also claim that despite the RTC's order to release the
seized TOP GEL products, not one had been returned; that one or two samples from each
petitioners' drugstore would have sufficed in case there is a need to present them in a criminal
prosecution, and that confiscation of thousands of these products was an overkill.
Petitioners also argue that the issue that the RTC erred in applying the rules on search and seizure
in anticipation of a civil action was never raised in the RTC.
The issue for resolution is whether or not the CA erred in reversing the RTC's quashal of the
assailed search warrants.
We find no merit in the petition.
The applications for the issuance of the assailed search warrants were for violations of Sections 155
and 168, both in relation to Section 170 of Republic Act (RA) No. 8293, otherwise known as the
Intellectual Property Code of the Philippines. Section 155, in relation to Section 170, punishes
trademark infringement; while Section 168, in relation to Section 170, penalizes unfair competition,
to wit:
Sec 155. Remedies; Infringement. Any person who shall, without the consent of the owner of the
registered mark:
155.1 Use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
While
Sec. 168. Unfair Competition, Rights, Regulation and Remedies.
x x x x
168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:
(a) Any person, who is selling his goods and gives them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in
which they are contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers to believe that the goods offered are
those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in
selling such goods with a like purpose;
And
SEC. 170. Penalties. - Independent of the civil and administrative sanctions imposed by law, a
criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (P50,000.00) to Two hundred thousand pesos (P200,000.00) shall be imposed on
any person who is found guilty of committing any of the acts mentioned in Section 155
[Infringement], Section 168 [Unfair Competition] and Subsection 169.1 [False Designation of Origin
and False Description or Representation].
Thus, we agree with the CA that A.M. No. 02-1-06-SC, which provides for the Rules on the Issuance
of the Search and Seizure in Civil Actions for Infringement of Intellectual Property Rights, is not
applicable in this case as the search warrants were not applied based thereon, but in anticipation of
criminal actions for violation of intellectual property rights under RA 8293. It was established that
respondent had asked the NBI for assistance to conduct investigation and search warrant
implementation for possible apprehension of several drugstore owners selling imitation or counterfeit
TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap. Also, in his affidavit to support his
application for the issuance of the search warrants, NBI Agent Furing stated that "the items to be
seized will be used as relevant evidence in the criminal actions that are likely to be instituted."
Hence, Rule 126 of the Rules of Criminal Procedure applies.
Rule 126 of the Revised Rules of Court, which governs the issuance of the assailed Search
Warrants, provides, to wit:
SEC. 3. Personal property to be seized. - A search warrant may be issued for the search and
seizure of personal property:
(a) Subject of the offense;
(b) Stolen or embezzled and other proceeds or fruits of the offense; or
(c) Used or intended to be used as the means of committing an offense.
SEC. 4. Requisites for issuing search warrant. - A search warrant shall not issue except upon
probable cause in connection with one specific offense to be determined personally by the judge
after examination under oath or affirmation of the complainant and the witnesses he may produce,
and particularly describing the place to be searched and the things to be seized which may be
anywhere in the Philippines.
SEC. 5. Examination of complainant; record. - The judge must, before issuing the warrant,
personally examine in the form of searching questions and answers, in writing and under oath, the
complainant and the witnesses he may produce on facts personally known to them and attach to the
record their sworn statements together with the affidavits submitted.
A core requisite before a warrant shall validly issue is the existence of a probable cause, meaning
"the existence of such facts and circumstances which would lead a reasonably discreet and prudent
man to believe that an offense has been committed and that the objects sought in connection with
the offense are in the place to be searched."
26
And when the law speaks of facts, the reference is to
facts, data or information personally known to the applicant and the witnesses he may present.
Absent the element of personal knowledge by the applicant or his witnesses of the facts upon which
the issuance of a search warrant may be justified, the warrant is deemed not based on probable
cause and is a nullity, its issuance being, in legal contemplation, arbitrary.
27
The determination of
probable cause does not call for the application of rules and standards of proof that a judgment of
conviction requires after trial on the merits.
28
As implied by the words themselves, "probable cause"
is concerned with probability, not absolute or even moral certainty. The prosecution need not present
at this stage proof beyond reasonable doubt. The standards of judgment are those of a reasonably
prudent man,
29
not the exacting calibrations of a judge after a full-blown trial.
30

The RTC quashed the search warrants, saying that (1) there exists a prejudicial question pending
before Branch 93 of the RTC of Quezon City, docketed as Civil Case No. 05-54747, i.e., the
determination as to who between respondent and Yu is the rightful holder of the intellectual property
right over the trademark TOP GEL T.G. & DEVICE OF A LEAF; and there was also a case for
trademark infringement and/or unfair competition filed by respondent against Yu pending before the
IPO, docketed as IPV Case No. 10-2005-00001; and (2) Yu's representation that he is the sole
distributor of the Top Gel whitening soap, as the latter even presented Registration No. 4-1996-
109957 issued by the IPO to Zenna Chemical Industry as the registered owner of the trademark
TOP GEL MCA & DEVICE MCA for a term of 20 years from November 17, 2000 covering the same
product.
We do not agree. We affirm the CA's reversal of the RTC Order quashing the search warrants.
The affidavits of NBI Agent Furing and his witnesses, Esmael and Ling, clearly showed that they are
seeking protection for the trademark "TOP GEL T.G. and DEVICE OF A LEAF" registered to
respondent under Certificate of Registration 4-2000-009881 issued by the IPO on August 24, 2003,
and no other. While petitioners claim that the product they are distributing was owned by Yu with the
trademark TOP GEL MCA and MCA DEVISE under Certificate of Registration 4-1996-109957, it was
different from the trademark TOP GEL T.G. and DEVICE OF A LEAF subject of the application. We
agree with the CA's finding in this wise:
x x x It bears stressing that the basis for the applications for issuances of the search warrants on
grounds of trademark infringement and unfair competition is the trademark TOP GEL T.G. &
DEVICE OF A LEAF. Private complainant-appellant was issued a Certificate of Registration No. 4-
2000-009881 of said trademark on August 24, 2003 by the Intellectual Property Office, and is thus
considered the lawful holder of the said trademark. Being the registrant and the holder of the same,
private complainant-appellant had the authority to enforce and protect her intellectual property rights
over it. This prompted her to request for assistance from the agents of the NBI, who thereafter
conducted a series of investigation, test buys and inspection regarding the alleged trademark
infringement by herein respondents-appellees. Subsequently, Ping Na Lau, private complainant-
appellants representative, issued a certification with the finding that the examined goods were
counterfeit. This prompted the NBI agents to apply for the issuances of search warrants against the
respondents-appellees. Said applications for the search warrants were granted after by Judge
Laguilles after examining under oath the applicant Agent Furing of the NBI and his witnesses Ping
Na Lau and Junayd R. Ismael.
Based on the foregoing, it is clear that the requisites for the issuance of the search warrants had
been complied with and that there is probable cause to believe that an offense had been committed
and that the objects sought in connection with the offense were in the places to be searched. The
offense pertains to the alleged violations committed by respondents-appellees upon the intellectual
property rights of herein private complainant-appellant, as holder of the trademark TOP GEL T.G. &
DEVICE OF A LEAF under Certificate of Registration No. 4-2000-009881, issued on August 24,
2003 by the Intellectual Property Office.
31

Notably, at the time the applications for the issuance of the search warrants were filed on November
21, 2005, as the CA correctly found, Civil Case No. Q-05-54747, which the RTC found to be where a
prejudicial question was raised, was already dismissed on June 10, 2005,
32
because of the pendency
of a case involving the same issues and parties before the IPO. Yu's motion for reconsideration was
denied in an Order
33
dated September 15, 2005. In fact, a Certificate of Finality
34
was issued by the
RTC on January 4, 2007.
Moreover, the IPO case for trademark infringement and unfair competition and damages with prayer
for preliminary injunction filed by respondent against Yu and Heidi Cua, docketed as IPV Case No.
10-2005-00001, would not also be a basis for quashing the warrants.1avvphi 1 In fact, prior to the
applications for the issuance of the assailed search warrants on November 21, 2005, the IPO had
issued an Order
35
dated October 20, 2005 granting a writ of preliminary injunction against Yu and
Cua, the dispositive portion of which reads:
WHEREFORE, the WRIT OF PRELIMINARY INJUNCTION is hereby issued against Respondent,
Benjamin Yu, doing business under the name and style of MCA Manufacturing and Heidi S. Cua,
Proprietor of South Ocean Chinese Drug Store, and their agents, representatives, dealers and
distributors and all persons acting in their behalf, to cease and desist using the trademark "TOP GEL
T.G. & DEVICE OF A LEAF" or any colorable imitation thereof on Papaya whitening soaps they
manufacture, sell, and/or offer for sale, and otherwise, from packing their Papaya Whitening Soaps
in boxes with the same general appearance as those of complainant's boxes within a period of
NINETY (90) DAYS, effective upon the receipt of respondent of the copy of the COMPLIANCE filed
with this Office by the Complainant stating that it has posted a CASH BOND in the amount of ONE
HUNDRED THOUSAND PESOS (Php100,000.00) together with the corresponding Official Receipt
Number and date thereof. Consequently, complainant is directed to inform this Office of actual date
of receipt by Respondent of the aforementioned COMPLIANCE.
36

To inform the public of the issuance of the writ of preliminary injunction, respondent's counsel had
the dispositive portion of the Order published in The Philippine Star newspaper on October 30,
2005.
37
Thus, it was clearly stated that Yu, doing business under the name and style of MCA
Manufacturing, his agents, representatives, dealers and distributors and all persons acting in his
behalf, were to cease and desist from using the trademark "TOP GEL & DEVICE OF A LEAF" or any
colorable imitation thereof on Papaya Whitening soaps they manufacture, sell and/or offer for sale.
Petitioners, who admitted having derived their TOP GEL products from Yu, are, therefore, notified of
such injunction and were enjoined from selling the same.
Notwithstanding, at the time of the application of the search warrants on November 21, 2005, and
while the injunction was in effect, petitioners were still selling the alleged counterfeit products
bearing the trademark TOP GEL T.G. & DEVICE OF A LEAF. There exists a probable cause for
violation of respondent's intellectual property rights, which entitles her as the registered owner of the
trademark TOP GEL and DEVICE OF A LEAF to be protected by the issuance of the search
warrants.
More importantly, during the pendency of petitioners' motion to quash in the RTC, respondent
submitted the Order dated March 8, 2006 of the IPO in IPV Case No. 10-2005-00001, where the writ
of preliminary injunction was earlier issued, approving the compromise agreement entered into by
respondent with Yu and Cua where it was stated, among others, that:
1. Respondents acknowledge the exclusive right of Complainant over the trademark TOP
GEL T.G. & DEVICE OF A LEAF for use on papaya whitening soap as registered under
Registration No. 4-2000-009881 issued on August 24, 2003.
2. Respondents acknowledge the appointment by Zenna Chemical Industry Co., Ltd. of
Complainant as the exclusive Philippine distributor of its products under the tradename and
trademark TOP GEL MCA & MCA DEVICE (A SQUARE DEVICE CONSISTING OF A
STYLIZED REPRESENTATION OF A LETTER "M" OVER THE LETTER "CA") as registered
under Registration No 4-1996-109957 issued on November 17, 2000, as well as the
assignment by Zenna Chemical Industry Co., Ltd. to Complainant of said mark for use on
papaya whitening soap.
3. Respondents admit having used the tradename and trademark aforesaid, but after having
realized that Complainant is the legitimate assignee of TOP GEL MCA & MCA DEVICE and
the registered owner of TOP GEL T.G. & DEVICE OF A LEAF, now undertake to voluntarily
cease and desist from using the aforesaid tradename and trademark, and further undertake
not to manufacture, sell and distribute and otherwise compete with complainant, now and at
anytime in the future, any papaya whitening soap using or bearing a mark or name identical
or confusingly similar to, or constituting a colorable imitation of the tradename and trademark
TOP GEL MCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF as registered
and described above.
38

Hence, it appears that there is no more controversy as to who is the rightful holder of the trademark
TOP GEL T.G. & DEVICE OF A LEAF. Therefore, respondent, as owner of such registered
trademark has the right to the issuance of the search warrants.
Anent petitioners' claim that one or two samples of the Top Gel products from each of them, instead
of confiscating thousands of the products, would have sufficed for the purpose of an anticipated
criminal action, citing our ruling in Summerville General Merchandising Co. v. Court of Appeals,
39
is
not meritorious.
We do not agree.
The factual milieu of the two cases are different. In Summerville, the object of the violation of
Summerville's intellectual property rights, as assignee of Royal playing cards and Royal brand
playing cards case, was limited to the design of Summerville's Royal plastic container case which
encased and wrapped the Crown brand playing cards. In the application for the search warrant
which the RTC subsequently issued, one of the items to be seized were the Crown brand playing
cards using the copyright plastic and Joker of Royal brand. Thus, numerous boxes containing Crown
playing cards were seized and upon the RTC's instruction were turned over to Summerville, subject
to the condition that the key to the said warehouse be turned over to the court sheriff. Respondents
moved for the quashal of the search warrant and for the return of the seized properties. The RTC
partially granted the motion by ordering the release of the seized Crown brand playing cards and the
printing machines; thus, only the Royal plastic container cases of the playing cards were left in the
custody of Summerville. The CA sustained the RTC order. On petition with us, we affirmed the CA.
We found therein that the Crown brand playing cards are not the subject of the offense as they are
genuine and the Crown trademark was registered to therein respondents names; that it was the
design of the plastic container/case that is alleged to have been utilized by respondents to deceive
the public into believing that the Crown brand playing cards are the same as those manufactured by
Summerville. We then said that assuming that the Crown playing cards could be considered subject
of the offense, a sample or two are more than enough to retain should there have been a need to
examine them along with the plastic container/case; and that there was no need to hold the
hundreds of articles seized. We said so in the context that since what was in dispute was the design
of the Royal plastic cases/containers of playing cards and not the playing card per se, a small
number of Crown brand playing cards would suffice to examine them with the Royal plastic
cases/containers. And the return of the playing cards would better serve the purposes of justice and
expediency. However, in this case, the object of the violation of respondent's intellectual property
right is the alleged counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap being
sold by petitioners, so there is a need to confiscate all these articles to protect respondent's right as
the registered owner of such trademark.
Petitioners next contend that the CA's ruling on the applicability of Rule 126 of the Rules of Court
that the search warrants were issued in anticipation of a criminal action was only based on
respondent's claim which was only brought for the first time in her appellant's brief.
We are not persuaded.
We find worth quoting respondent's argument addressing this issue in its Comment, thus:
In the assailed Decision, the Court of Appeals found that the Rule correctly applicable to the subject
search warrants was Rule 126 of the Rules of Court. Petitioners fault the appellate court for ruling
that the Regional Trial Court incorrectly applied the Rules on Search and Seizure in Civil Actions for
Infringement of Intellectual Property Rights on the basis of an argument that private respondent
brought up for the first time in her Appellant's Brief.
A cursory perusal of the Appellant's Brief shows that the following issues/errors were raised, that: (1)
the Honorable Trial Court erred in holding that the "Rules on Search and Seizure for Infringement of
Intellectual Property Rights" apply to the search warrants at bar; (2) x x x.
It must be remembered that there was no trial on the merits to speak of in the trial court, and the
matter of the application of the wrong set of Rules only arose in the Order dated 25th September
2006 which sustained the Motion to Quash. A thorough examination of the Appellee's Brief filed by
petitioners (respondents-appellees in the Court of Appeals) reveals, however, that petitioners
NEVER assailed the first issue/error on the ground that the same was raised for the first time on
appeal. It is only now, after the appellate court rendered a Decision and Resolution unfavorable to
them, that petitioners questioned the alleged procedural error. Petitioners should now be considered
in estoppel to question the same.
40

Indeed, perusing the appellee's (herein petitioners) brief filed with the CA, the matter of the non-
applicability of the rules on search and seizure in civil action for infringement of intellectual property
rights was never objected as being raised for the first time. On the contrary, petitioners had squarely
faced respondent's argument in this wise:
Appellant (herein respondent) contends that the rule (SC Adm. Memo 1-06, No. 02-1-06, Rule on
Search and Seizure in Civil Actions for Infringement of Intellectual Property Rights) does [not] apply
to the search warrants in the [case] at bar, for the reason that the search warrants themselves reveal
that the same were applied for and issued for violations of "Section 155 in relation to Section 170 of
RA 8293" and violations of "Section 168 in relation to Section 170 of RA 8293," and that a perusal of
the records would show that there is no mention of a civil action or anticipation thereof, upon which
the search warrants are applied for.
Appellees (herein petitioners) cannot agree with the contention of the appellant.1wphi1 Complainant NBI
Agent Joseph G. Furing, who applied for the search warrants, violated the very rule on search and
seizure for infringement of Intellectual Property Rights. The search warrants applied for by the
complainants cannot be considered a criminal action. There was no criminal case yet to speak of
when complainants applied for issuance of the search warrants. There is distinction here because
the search applied for is civil in nature and no criminal case had been filed. The complaint is an
afterthought after the respondents-appellees filed their Motion to Quash Search Warrant before the
Regional Trial Court of Manila, Branch 24. The grounds enumerated in the rule must be complied
with in order to protect the constitutional mandate that "no person shall be deprived of life liberty or
property without due process of law nor shall any person be denied the equal protection of the law."
Clearly, the application of the search warrants for violation of unfair competition and infringement is
in the nature of a civil action.
41

WHEREFORE, the petition for review is DENIED. The Decision dated March 31, 2009 and the
Resolution dated July 2, 2009 of the Court of Appeals, in CA-G.R. CV No. 88952, are hereby
AFFIRMED.
SO ORDERED.


G.R. No. 180677 February 18, 2013
VICTORIO P. DIAZ, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES AND LEVI STRAUSS [PHILS.], INC., Respondents.
It is the tendency of the allegedly infringing mark to be confused with the registered trademark that is
the gravamen of the offense of infringement of a registered trademark. The acquittal of the accused
should follow if the allegedly infringing mark is not likely to cause confusion. Thereby, the evidence
of the State does not satisfy the quantum of proof beyond reasonable doubt.
Accused Victorio P. Diaz (Diaz) appeals the resolutions promulgated on July 17, 2007
1
and
November 22, 2007,
2
whereby the Court of Appeals (CA), respectively, dismissed his appeal in C.A.-
G.R. CR No. 30133 for the belated filing of the appellant's brief, and denied his motion for
reconsideration. Thereby, the decision rendered on February 13, 2006 in Criminal Case No. 00-0318
and Criminal Case No. 00-0319 by the Regional Trial Court, Branch 255, in Las Pifias City (RTC)
convicting him for two counts of infringement of trademark were affirmed.
3

Antecedents
On February 10, 2000, the Department of Justice filed two informations in the RTC of Las Pias City,
charging Diaz with violation of Section 155, in relation to Section 170, of Republic Act No. 8293, also
known as theIntellectual Property Code of the Philippines (Intellectual Property Code), to wit:
Criminal Case No. 00-0318
That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within the
jurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to defraud Levis
Strauss (Phil.) Inc. (hereinafter referred to as LEVIS), did then and there, willfully, unlawfully,
feloniously, knowingly and intentionally engaged in commerce by reproducing, counterfeiting,
copying and colorably imitating Levis registered trademarks or dominant features thereof such as
the ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE LABEL WITH
PATTERNED ARCUATE DESIGN, TAB AND COMPOSITE ARCUATE/TAB/TWO HORSE PATCH,
and in connection thereto, sold, offered for sale, manufactured, distributed counterfeit patches and
jeans, including other preparatory steps necessary to carry out the sale of said patches and jeans,
which likely caused confusion, mistake, and /or deceived the general consuming public, without the
consent, permit or authority of the registered owner, LEVIS, thus depriving and defrauding the latter
of its right to the exclusive use of its trademarks and legitimate trade, to the damage and prejudice of
LEVIS.
CONTRARY TO LAW.
4

Criminal Case No. 00-0319
That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within the
jurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to defraud Levis
Strauss (Phil.) Inc. (hereinafter referred to as LEVIS), did then and there, willfully, unlawfully,
feloniously, knowingly and intentionally engaged in commerce by reproducing, counterfeiting,
copying and colorably imitating Levis registered trademarks or dominant features thereof such as
the ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE LABEL WITH
PATTERNED ARCUATE DESIGN, TAB AND COMPOSITE ARCUATE/TAB/TWO HORSE PATCH,
and in connection thereto, sold, offered for sale, manufactured, distributed counterfeit patches and
jeans, including other preparatory steps necessary to carry out the sale of said patches and jeans,
which likely caused confusion, mistake, and /or deceived the general consuming public, without the
consent, permit or authority of the registered owner, LEVIS, thus depriving and defrauding the latter
of its right to the exclusive use of its trademarks and legitimate trade, to the damage and prejudice of
LEVIS.
CONTRARY TO LAW.
5

The cases were consolidated for a joint trial. Diaz entered his pleas of not guilty to each information
on June 21, 2000.
6

1.
Evidence of the Prosecution
Levi Strauss and Company (Levis), a foreign corporation based in the State of Delaware, United
States of America, had been engaged in the apparel business. It is the owner of trademarks and
designs of Levis jeans like LEVIS 501, the arcuate design, the two-horse brand, the two-horse
patch, the two-horse patch with pattern arcuate, and the composite tab arcuate. LEVIS 501 has the
following registered trademarks, to wit: (1) the leather patch showing two horses pulling a pair of
pants; (2) the arcuate pattern with the inscription "LEVI STRAUSS & CO;" (3) the arcuate design that
refers to "the two parallel stitching curving downward that are being sewn on both back pockets of a
Levis Jeans;" and (4) the tab or piece of cloth located on the structural seam of the right back
pocket, upper left side. All these trademarks were registered in the Philippine Patent Office in the
1970s, 1980s and early part of 1990s.
7

Levi Strauss Philippines, Inc. (Levis Philippines) is a licensee of Levis. After receiving information
that Diaz was selling counterfeit LEVIS 501 jeans in his tailoring shops in Almanza and Talon, Las
Pias City, Levis Philippines hired a private investigation group to verify the information.
Surveillance and the purchase of jeans from the tailoring shops of Diaz established that the jeans
bought from the tailoring shops of Diaz were counterfeit or imitations of LEVIS 501. Levis
Philippines then sought the assistance of the National Bureau of Investigation (NBI) for purposes of
applying for a search warrant against Diaz to be served at his tailoring shops. The search warrants
were issued in due course. Armed with the search warrants, NBI agents searched the tailoring shops
of Diaz and seized several fake LEVIS 501 jeans from them. Levis Philippines claimed that it did
not authorize the making and selling of the seized jeans; that each of the jeans were mere imitations
of genuine LEVIS 501 jeans by each of them bearing the registered trademarks, like the arcuate
design, the tab, and the leather patch; and that the seized jeans could be mistaken for original
LEVIS 501 jeans due to the placement of the arcuate, tab, and two-horse leather patch.
8

2.
Evidence of the Defense
On his part, Diaz admitted being the owner of the shops searched, but he denied any criminal
liability.
Diaz stated that he did not manufacture Levis jeans, and that he used the label "LS Jeans Tailoring"
in the jeans that he made and sold; that the label "LS Jeans Tailoring" was registered with the
Intellectual Property Office; that his shops received clothes for sewing or repair; that his shops
offered made-to-order jeans, whose styles or designs were done in accordance with instructions of
the customers; that since the time his shops began operating in 1992, he had received no notice or
warning regarding his operations; that the jeans he produced were easily recognizable because the
label "LS Jeans Tailoring," and the names of the customers were placed inside the pockets, and
each of the jeans had an "LSJT" red tab; that "LS" stood for "Latest Style;" and that the leather patch
on his jeans had two buffaloes, not two horses.
9

Ruling of the RTC
On February 13, 2006, the RTC rendered its decision finding Diaz guilty as charged, disposing thus:
WHEREFORE, premises considered, the Court finds accused Victorio P. Diaz, a.k.a. Vic Diaz,
GUILTY beyond reasonable doubt of twice violating Sec. 155, in relation to Sec. 170, of RA No.
8293, as alleged in the Informations in Criminal Case Nos. 00-0318 & 00-0319, respectively, and
hereby sentences him to suffer in each of the cases the penalty of imprisonment of TWO (2) YEARS
of prision correcional, as minimum, up to FIVE (5) YEARS of prision correcional, as maximum, as
well as pay a fine of P50,000.00 for each of the herein cases, with subsidiary imprisonment in case
of insolvency, and to suffer the accessory penalties provided for by law.
Also, accused Diaz is hereby ordered to pay to the private complainant Levis Strauss (Phils.), Inc.
the following, thus:
1. P50,000.00 in exemplary damages; and
2. P222,000.00 as and by way of attorneys fees.
Costs de officio.
SO ORDERED.
10

Ruling of the CA
Diaz appealed, but the CA dismissed the appeal on July 17, 2007 on the ground that Diaz had not
filed his appellants brief on time despite being granted his requested several extension periods.
Upon denial of his motion for reconsideration, Diaz is now before the Court to plead for his acquittal.
Issue
Diaz submits that:
THE COURT OF APPEALS VIOLATED EXISTING LAW AND JURISPRUDENCE WHEN IT
APPLIED RIGIDLY THE RULE ON TECHNICALITIES AND OVERRIDE SUBSTANTIAL JUSTICE
BY DISMISSING THE APPEAL OF THE PETITIONER FOR LATE FILING OF APPELLANTS
BRIEF.
11

Ruling
The Court first resolves whether the CA properly dismissed the appeal of Diaz due to the late filing of
his appellants brief.
Under Section 7, Rule 44 of the Rules of Court, the appellant is required to file the appellants brief in
the CA "within forty-five (45) days from receipt of the notice of the clerk that all the evidence, oral
and documentary, are attached to the record, seven (7) copies of his legibly typewritten,
mimeographed or printed brief, with proof of service of two (2) copies thereof upon the appellee."
Section 1(e) of Rule 50 of the Rules of Court grants to the CA the discretion to dismiss an appeal
either motu proprio or on motion of the appellee should the appellant fail to serve and file the
required number of copies of the appellants brief within the time provided by the Rules of Court.
12

The usage of the word may in Section 1(e) of Rule 50 indicates that the dismissal of the appeal upon
failure to file the appellants brief is not mandatory, but discretionary. Verily, the failure to serve and
file the required number of copies of the appellants brief within the time provided by the Rules of
Court does not have the immediate effect of causing the outright dismissal of the appeal. This
means that the discretion to dismiss the appeal on that basis is lodged in the CA, by virtue of which
the CA may still allow the appeal to proceed despite the late filing of the appellants brief, when the
circumstances so warrant its liberality. In deciding to dismiss the appeal, then, the CA is bound to
exercise its sound discretion upon taking all the pertinent circumstances into due consideration.
The records reveal that Diazs counsel thrice sought an extension of the period to file the appellants
brief. The first time was on March 12, 2007, the request being for an extension of 30 days to
commence on March 11, 2007. The CA granted his motion under its resolution of March 21, 2007.
On April 10, 2007, the last day of the 30-day extension, the counsel filed another motion, seeking an
additional 15 days. The CA allowed the counsel until April 25, 2007 to serve and file the appellants
brief. On April 25, 2007, the counsel went a third time to the CA with another request for 15 days.
The CA still granted such third motion for extension, giving the counsel until May 10, 2007.
Notwithstanding the liberality of the CA, the counsel did not literally comply, filing the appellants brief
only on May 28, 2007, which was the 18th day beyond the third extension period granted.
Under the circumstances, the failure to file the appellants brief on time rightly deserved the outright
rejection of the appeal. The acts of his counsel bound Diaz like any other client. It was, of course,
only the counsel who was well aware that the Rules of Court fixed the periods to file pleadings and
equally significant papers like the appellants brief with the lofty objective of avoiding delays in the
administration of justice.
Yet, we have before us an appeal in two criminal cases in which the appellant lost his chance to be
heard by the CA on appeal because of the failure of his counsel to serve and file the appellants brief
on time despite the grant of several extensions the counsel requested. Diaz was convicted and
sentenced to suffer two indeterminate sentences that would require him to spend time in detention
for each conviction lasting two years, as minimum, to five years, as maximum, and to pay fines
totaling P100,000.00 (with subsidiary imprisonment in case of his insolvency). His personal liberty is
now no less at stake. This reality impels us to look beyond the technicality and delve into the merits
of the case to see for ourselves if the appeal, had it not been dismissed, would have been worth the
time of the CA to pass upon. After all, his appellants brief had been meanwhile submitted to the CA.
While delving into the merits of the case, we have uncovered a weakness in the evidence of guilt
that cannot be simply ignored and glossed over if we were to be true to our oaths to do justice to
everyone.
We feel that despite the CA being probably right in dismissing the excuses of oversight and
excusable negligence tendered by Diazs counsel to justify the belated filing of the appellants brief
as unworthy of serious consideration, Diaz should not be made to suffer the dire consequence. Any
accused in his shoes, with his personal liberty as well as his personal fortune at stake, expectedly
but innocently put his fullest trust in his counsels abilities and professionalism in the handling of his
appeal. He thereby delivered his fate to the hands of his counsel. Whether or not those hands were
efficient or trained enough for the job of handling the appeal was a learning that he would get only in
the end. Likelier than not, he was probably even unaware of the three times that his counsel had
requested the CA for extensions. If he were now to be left to his unwanted fate, he would surely
suffer despite his innocence. How costly a learning it would be for him! That is where the Court
comes in. It is most important for us as dispensers of justice not to allow the inadvertence or
incompetence of any counsel to result in the outright deprivation of an appellants right to life, liberty
or property.
13

We do not mind if this softening of judicial attitudes be mislabeled as excessive leniency. With so
much on the line, the people whose futures hang in a balance should not be left to suffer from the
incompetence, mindlessness or lack of professionalism of any member of the Law Profession. They
reasonably expect a just result in every litigation. The courts must give them that just result. That
assurance is the peoples birthright. Thus, we have to undo Diazs dire fate.
Even as we now set aside the CAs rejection of the appeal of Diaz, we will not remand the records to
the CA for its review. In an appeal of criminal convictions, the records are laid open for review. To
avoid further delays, therefore, we take it upon ourselves to review the records and resolve the issue
of guilt, considering that the records are already before us.
Section 155 of R.A. No. 8293 defines the acts that constitute infringement of trademark, viz:
Remedies; Infringement. Any person who shall, without the consent of the owner of the registered
mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall
be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of whether there is actual sale of goods or
services using the infringing material.
The elements of the offense of trademark infringement under the Intellectual Property Code are,
therefore, the following:
1. The trademark being infringed is registered in the Intellectual Property Office;
2. The trademark is reproduced, counterfeited, copied, or colorably imitated by the infringer;
3. The infringing mark is used in connection with the sale, offering for sale, or advertising of
any goods, business or services; or the infringing mark is applied to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services;
4. The use or application of the infringing mark is likely to cause confusion or mistake or to
deceive purchasers or others as to the goods or services themselves or as to the source or
origin of such goods or services or the identity of such business; and
5. The use or application of the infringing mark is without the consent of the trademark owner
or the assignee thereof.
14

As can be seen, the likelihood of confusion is the gravamen of the offense of trademark
infringement.
15
There are two tests to determine likelihood of confusion, namely: the dominancy test,
and the holistic test. The contrasting concept of these tests was explained in Societes Des Produits
Nestle, S.A. v. Dy, Jr., thus:
x x x. The dominancy test focuses on the similarity of the main, prevalent or essential features of the
competing trademarks that might cause confusion. Infringement takes place when the competing
trademark contains the essential features of another. Imitation or an effort to imitate is unnecessary.
The question is whether the use of the marks is likely to cause confusion or deceive purchasers.
The holistic test considers the entirety of the marks, including labels and packaging, in determining
confusing similarity. The focus is not only on the predominant words but also on the other features
appearing on the labels.
16

As to what test should be applied in a trademark infringement case, we said in McDonalds
Corporation v. Macjoy Fastfood Corporation
17
that:
In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to
another, no set rules can be deduced because each case must be decided on its merits. In such
cases, even more than in any other litigation, precedent must be studied in the light of the facts of
the particular case. That is the reason why in trademark cases, jurisprudential precedents should be
applied only to a case if they are specifically in point.
The case of Emerald Garment Manufacturing Corporation v. Court of Appeals,
18
which involved an
alleged trademark infringement of jeans products, is worth referring to. There, H.D. Lee Co., Inc.
(H.D. Lee), a corporation based in the United States of America, claimed that Emerald Garments
trademark of "STYLISTIC MR. LEE" that it used on its jeans products was confusingly similar to the
"LEE" trademark that H.D. Lee used on its own jeans products. Applying the holistic test, the Court
ruled that there was no infringement.
The holistic test is applicable here considering that the herein criminal cases also involved trademark
infringement in relation to jeans products. Accordingly, the jeans trademarks of Levis Philippines
and Diaz must be considered as a whole in determining the likelihood of confusion between them.
The maong pants or jeans made and sold by Levis Philippines, which included LEVIS 501, were
very popular in the Philippines. The consuming public knew that the original LEVIS 501 jeans were
under a foreign brand and quite expensive. Such jeans could be purchased only in malls or
boutiques as ready-to-wear items, and were not available in tailoring shops like those of Diazs as
well as not acquired on a "made-to-order" basis. Under the circumstances, the consuming public
could easily discern if the jeans were original or fake LEVIS 501, or were manufactured by other
brands of jeans. Confusion and deception were remote, for, as the Court has observed in Emerald
Garments:
First, the products involved in the case at bar are, in the main, various kinds of jeans. These are not
your ordinary household items like catsup, soy sauce or soap which are of minimal cost. Maong
pants or jeans are not inexpensive. Accordingly, the casual buyer is predisposed to be more
cautious and discriminating in and would prefer to mull over his purchase. Confusion and deception,
then, is less likely. In Del Monte Corporation v. Court of Appeals, we noted that:
.... Among these, what essentially determines the attitudes of the purchaser, specifically his
inclination to be cautious, is the cost of the goods. To be sure, a person who buys a box of candies
will not exercise as much care as one who buys an expensive watch. As a general rule, an ordinary
buyer does not exercise as much prudence in buying an article for which he pays a few centavos as
he does in purchasing a more valuable thing. Expensive and valuable items are normally bought
only after deliberate, comparative and analytical investigation. But mass products, low priced articles
in wide use, and matters of everyday purchase requiring frequent replacement are bought by the
casual consumer without great care....
Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does not
ask the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even an Armani. He is,
therefore, more or less knowledgeable and familiar with his preference and will not easily be
distracted.
Finally, in line with the foregoing discussions, more credit should be given to the "ordinary
purchaser." Cast in this particular controversy, the ordinary purchaser is not the "completely unwary
consumer" but is the "ordinarily intelligent buyer" considering the type of product involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok is better suited to the present case. There, the
"ordinary purchaser" was defined as one "accustomed to buy, and therefore to some extent familiar
with, the goods in question. The test of fraudulent simulation is to be found in the likelihood of the
deception of some persons in some measure acquainted with an established design and desirous of
purchasing the commodity with which that design has been associated. The test is not found in the
deception, or the possibility of deception, of the person who knows nothing about the design which
has been counterfeited, and who must be indifferent between that and the other. The simulation, in
order to be objectionable, must be such as appears likely to mislead the ordinary intelligent buyer
who has a need to supply and is familiar with the article that he seeks to purchase.
19

Diaz used the trademark "LS JEANS TAILORING" for the jeans he produced and sold in his tailoring
shops. His trademark was visually and aurally different from the trademark "LEVI STRAUSS & CO"
appearing on the patch of original jeans under the trademark LEVIS 501. The word "LS" could not
be confused as a derivative from "LEVI STRAUSS" by virtue of the "LS" being connected to the word
"TAILORING", thereby openly suggesting that the jeans bearing the trademark "LS JEANS
TAILORING" came or were bought from the tailoring shops of Diaz, not from the malls or boutiques
selling original LEVIS 501 jeans to the consuming public.
There were other remarkable differences between the two trademarks that the consuming public
would easily perceive. Diaz aptly noted such differences, as follows:
The prosecution also alleged that the accused copied the "two horse design" of the petitioner-
private complainant but the evidence will show that there was no such design in the seized jeans.
Instead, what is shown is "buffalo design." Again, a horse and a buffalo are two different animals
which an ordinary customer can easily distinguish. x x x.
The prosecution further alleged that the red tab was copied by the accused. However, evidence will
show that the red tab used by the private complainant indicates the word "LEVIS" while that of the
accused indicates the letters "LSJT" which means LS JEANS TAILORING. Again, even an ordinary
customer can distinguish the word LEVIS from the letters LSJT.
x x x x
In terms of classes of customers and channels of trade, the jeans products of the private
complainant and the accused cater to different classes of customers and flow through the different
channels of trade. The customers of the private complainant are mall goers belonging to class A and
B market group while that of the accused are those who belong to class D and E market who can
only afford Php 300 for a pair of made-toorder pants.
20
x x x.
Moreover, based on the certificate issued by the Intellectual Property Office, "LS JEANS
TAILORING" was a registered trademark of Diaz. He had registered his trademark prior to the filing
of the present cases.
21
The Intellectual Property Office would certainly not have allowed the
registration had Diazs trademark been confusingly similar with the registered trademark for LEVIS
501 jeans.
Given the foregoing, it should be plain that there was no likelihood of confusion between the
trademarks involved. Thereby, the evidence of guilt did not satisfy the quantum of proof required for
a criminal conviction, which is proof beyond reasonable doubt. According to Section 2, Rule 133 of
the Rules of Court, proof beyond a reasonable doubt does not mean such a degree of proof as,
excluding possibility of error, produces absolute certainty. Moral certainty only is required, or that
degree of proof which produces conviction in an unprejudiced mind. Consequently, Diaz should be
acquitted of the charges.
WHEREFORE, the Court ACQUITS petitioner VICTORIO P. DIAZ of the crimes of infringement of
trademark charged in Criminal Case No. 00-0318 and Criminal Case No. 00-0319 for failure of the
State to establish his guilt by proof beyond reasonable doubt.
No pronouncement on costs of suit.
SO ORDERED.

ECOLE DE CUISINE MANILLE (CORDON BLEU OF THE PHILIPPINES), INC., Petitioner,
vs.
RENAUD COINTREAU & CIE and LE CORDON BLEU INT'L., B.V., Respondents.
Assailed in this petition for review on certiorari
1
is the December 23, 2008 Decision
2
of the Court of
Appeals (CA) in CA-G.R. SP No. 104672 which affirmed in toto the Intellectual Property Office (IPO)
Director Generals April 21, 2008 Decision
3
that declared respondent Renaud Cointreau & Cie
(Cointreau) as the true and lawful owner of the mark "LE CORDON BLEU & DEVICE" and thus, is
entitled to register the same under its name.
The Facts
On June 21, 1990, Cointreau, a partnership registered under the laws of France, filed before the
(now defunct) Bureau of Patents, Trademarks, and Technology Transfer (BPTTT) of the Department
of Trade and Industry a trademark application for the mark "LE CORDON BLEU & DEVICE" for
goods falling under classes 8, 9, 16, 21, 24, 25, 29, and 30 of the International Classification of
Goods and Services for the Purposes of Registrations of Marks ("Nice Classification") (subject
mark). The application was filed pursuant to Section 37 of Republic Act No. 166, as amended (R.A.
No. 166), on the basis of Home Registration No. 1,390,912, issued on November 25, 1986 in
France. Bearing Serial No. 72264, such application was published for opposition in the March-April
1993 issue of the BPTTT Gazette and released for circulation on May 31, 1993.
4

On July 23, 1993, petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the subject
application, averring that: (a) it is the owner of the mark "LE CORDON BLEU, ECOLE DE CUISINE
MANILLE," which it has been using since 1948 in cooking and other culinary activities, including in
its restaurant business; and (b) it has earned immense and invaluable goodwill such that Cointreaus
use of the subject mark will actually create confusion, mistake, and deception to the buying public as
to the origin and sponsorship of the goods, and cause great and irreparable injury and damage to
Ecoles business reputation and goodwill as a senior user of the same.
5

On October 7, 1993, Cointreau filed its answer claiming to be the true and lawful owner of the
subject mark. It averred that: (a) it has filed applications for the subject marks registration in various
jurisdictions, including the Philippines; (b) Le Cordon Bleu is a culinary school of worldwide acclaim
which was established in Paris, France in 1895; (c) Le Cordon Bleu was the first cooking school to
have set the standard for the teaching of classical French cuisine and pastry making; and (d) it has
trained students from more than eighty (80) nationalities, including Ecoles directress, Ms. Lourdes L.
Dayrit. Thus, Cointreau concluded that Ecoles claim of being the exclusive owner of the subject
mark is a fraudulent misrepresentation.
6

During the pendency of the proceedings, Cointreau was issued Certificates of Registration Nos.
60631 and 54352 for the marks "CORDON BLEU & DEVICE" and "LE CORDON BLEU PARIS 1895
& DEVICE" for goods and services under classes 21 and 41 of the Nice Classification, respectively.
7

The Ruling of the Bureau of Legal Affairs
In its Decision
8
dated July 31, 2006, the Bureau of Legal Affairs (BLA) of the IPO sustained Ecoles
opposition to the subject mark, necessarily resulting in the rejection of Cointreaus application.
9
While
noting the certificates of registration obtained from other countries and other pertinent materials
showing the use of the subject mark outside the Philippines, the BLA did not find such evidence
sufficient to establishCointreaus claim of prior use of the same in the Philippines. It emphasized that
the adoption and use of trademark must be in commerce in the Philippines and not abroad. It then
concluded that Cointreau has not established any proprietary right entitled to protection in the
Philippine jurisdiction because the law on trademarks rests upon the doctrine of nationality or
territoriality.
10

On the other hand, the BLA found that the subject mark, which was the predecessor of the mark "LE
CORDON BLEU MANILLE" has been known and used in the Philippines since 1948 and registered
under the name "ECOLE DE CUISINE MANILLE (THE CORDON BLEU OF THE PHILIPPINES),
INC." on May 9, 1980.
11

Aggrieved, Cointreau filed an appeal with the IPO Director General.
The Ruling of the IPO Director General
In his Decision dated April 21, 2008, the IPO Director General reversed and set aside the BLAs
decision, thus, granting Cointreaus appeal and allowing the registration of the subject mark.
12
He
held that while Section 2 of R.A. No. 166 requires actual use of the subject mark in commerce in the
Philippines for at least two (2) months before the filing date of the application, only the owner thereof
has the right to register the same, explaining that the user of a mark in the Philippines is not ipso
facto its owner. Moreover, Section 2-A of the same law does not require actual use in the Philippines
to be able to acquire ownership of a mark.
13

In resolving the issue of ownership and right to register the subject mark in favor of Cointreau, he
considered Cointreaus undisputed use of such mark since 1895 for its culinary school in Paris,
France (in which petitioners own directress, Ms. Lourdes L. Dayrit, had trained in 1977). Contrarily,
he found that while Ecole may have prior use of the subject mark in the Philippines since 1948, it
failed to explain how it came up with such name and mark. The IPO Director General therefore
concluded that Ecole has unjustly appropriated the subject mark, rendering it beyond the mantle of
protection of Section 4(d)
14
of R.A. No. 166.
15

Finding the IPO Director Generals reversal of the BLAs Decision unacceptable, Ecole filed a
Petition for Review
16
dated June 7, 2008 with the CA.
Ruling of the CA
In its Decision dated December 23, 2008, the CA affirmed the IPO Director Generals Decision in
toto.
17
It declared Cointreau as the true and actual owner of the subject mark with a right to register
the same in the Philippines under Section 37 of R.A. No. 166, having registered such mark in its
country of origin on November 25, 1986.
18

The CA likewise held that Cointreaus right to register the subject mark cannot be barred by Ecoles
prior use thereof as early as 1948 for its culinary school "LE CORDON BLEU MANILLE" in the
Philippines because its appropriation of the mark was done in bad faith. Further, Ecole had no
certificate of registration that would put Cointreau on notice that the former had appropriated or has
been using the subject mark. In fact, its application for trademark registration for the same which
was just filed on February 24, 1992 is still pending with the IPO.
19

Hence, this petition.
Issues Before the Court
The sole issue raised for the Courts resolution is whether the CA was correct in upholding the IPO
Director Generals ruling that Cointreau is the true and lawful owner of the subject mark and thus,
entitled to have the same registered under its name.
At this point, it should be noted that the instant case shall be resolved under the provisions of the old
Trademark Law, R.A. No. 166, which was the law in force at the time of Cointreaus application for
registration of the subject mark.
The Courts Ruling
The petition is without merit.
In the petition, Ecole argues that it is the rightful owner of the subject mark, considering that it was
the first entity that used the same in the Philippines. Hence, it is the one entitled to its registration
and not Cointreau.
Petitioners argument is untenable.
Under Section 2
20
of R.A. No. 166, in order to register a trademark, one must be the owner thereof
and must have actually used the mark in commerce in the Philippines for two (2) months prior to the
application for registration. Section 2-A
21
of the same law sets out to define how one goes about
acquiring ownership thereof. Under Section 2-A, it is clear that actual use in commerce is also the
test of ownership but the provision went further by saying that the mark must not have been so
appropriated by another. Additionally, it is significant to note that Section 2-A does not require that
the actual use of a trademark must be within the Philippines. Thus, as correctly mentioned by the
CA, under R.A. No. 166, one may be an owner of a mark due to its actual use but may not yet have
the right to register such ownership here due to the owners failure to use the same in the Philippines
for two (2) months prior to registration.
22

Nevertheless, foreign marks which are not registered are still accorded protection against
infringement and/or unfair competition. At this point, it is worthy to emphasize that the Philippines
and France, Cointreaus country of origin, are both signatories to the Paris Convention for the
Protection of Industrial Property (Paris Convention).
23
Articles 6bis and 8 of the Paris Convention
state:
ARTICLE 6bis
(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of
an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark
which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark
considered by the competent authority of the country of registration or use to be well known in that
country as being already the mark of a person entitled to the benefits of this Convention and used for
identical or similar goods.1wphi1 These provisions shall also apply when the essential part of the mark
constitutes a reproduction of any such well-known mark or an imitation liable to create confusion
therewith.
ARTICLE 8
A trade name shall be protected in all the countries of the Union without the obligation of filing or
registration, whether or not it forms part of a trademark. (Emphasis and underscoring supplied)
In this regard, Section 37 of R.A. No. 166 incorporated Article 8 of the Paris Convention, to wit:
Section 37. Rights of foreign registrants. - Persons who are nationals of, domiciled in, or have a
bona fide or effective business or commercial establishment in any foreign country, which is a party
to any international convention or treaty relating to marks or trade-names, or the repression of unfair
competition to which the Philippines may be a party, shall be entitled to the benefits and subject to
the provisions of this Act to the extent and under the conditions essential to give effect to any such
convention and treaties so long as the Philippines shall continue to be a party thereto, except as
provided in the following paragraphs of this section.
x x x x
Trade-names of persons described in the first paragraph of this section shall be protected without
the obligation of filing or registration whether or not they form parts of marks.
x x x x
In view of the foregoing obligations under the Paris Convention, the Philippines is obligated to
assure nationals of the signatory-countries that they are afforded an effective protection against
violation of their intellectual property rights in the Philippines in the same way that their own
countries are obligated to accord similar protection to Philippine nationals.
24
"Thus, under Philippine
law, a trade name of a national of a State that is a party to the Paris Convention, whether or not the
trade name forms part of a trademark, is protected "without the obligation of filing or registration."
25

In the instant case, it is undisputed that Cointreau has been using the subject mark in France since
1895, prior to Ecoles averred first use of the same in the Philippines in 1948, of which the latter was
fully aware thereof. In fact, Ecoles present directress, Ms. Lourdes L. Dayrit (and even its foundress,
Pat Limjuco Dayrit), had trained in Cointreaus Le Cordon Bleu culinary school in Paris, France.
Cointreau was likewise the first registrant of the said mark under various classes, both abroad and in
the Philippines, having secured Home Registration No. 1,390,912 dated November 25, 1986 from its
country of origin, as well as several trademark registrations in the Philippines.
26

On the other hand, Ecole has no certificate of registration over the subject mark but only a pending
application covering services limited to Class 41 of the Nice Classification, referring to the operation
of a culinary school. Its application was filed only on February 24, 1992, or after Cointreau filed its
trademark application for goods and services falling under different classes in 1990. Under the
foregoing circumstances, even if Ecole was the first to use the mark in the Philippines, it cannot be
said to have validly appropriated the same.
It is thus clear that at the time Ecole started using the subject mark, the same was already being
used by Cointreau, albeit abroad, of which Ecoles directress was fully aware, being an alumna of
the latters culinary school in Paris, France. Hence, Ecole cannot claim any tinge of ownership
whatsoever over the subject mark as Cointreau is the true and lawful owner thereof. As such, the
IPO Director General and the CA were correct in declaring Cointreau as the true and lawful owner of
the subject mark and as such, is entitled to have the same registered under its name.
In any case, the present law on trademarks, Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, as amended, has already dispensed with the
requirement of prior actual use at the time of registration.
27
Thus, there is more reason to allow the
registration of the subject mark under the name of Cointreau as its true and lawful owner.
As a final note, "the function of a trademark is to point out distinctly the origin or ownership of the
goods (or services) to which it is affixed; to secure to him, who has been instrumental in bringing into
the market a superior article of merchandise, the fruit of his industry and skill; to assure the public
that they are procuring the genuine article; to prevent fraud and imposition; and to protect the
manufacturer against substitution and sale of an inferior and different article as his product."
28
As
such, courts will protect trade names or marks, although not registered or properly selected as
trademarks, on the broad ground of enforcing justice and protecting one in the fruits of his toil.
29

WHEREFORE, the petition is DENIED. Accordingly, the December 23, 2008 Decision of the Court of
Appeals in CA-G.R. SP No. 104672 is hereby AFFIRMED in toto.
SO ORDERED.
G.R. No. 194062 June 17, 2013
REPUBLIC GAS CORPORATION, ARNEL U. TY, MARI ANTONETTE N. TY, ORLANDO REYES,
FERRER SUAZO and ALVIN U. TV, Petitioners,
vs.
PETRON CORPORATION, PILIPINAS SHELL PETROLEUM CORPORATION, and SHELL
INTERNATIONAL PETROLEUM COMPANY LIMITED, Respondents.
D E C I S I O N
PERALTA, J .:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by
petitioners seeking the reversal of the Decision
1
dated July 2, 2010, and Resolution
2
dated October
11, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 106385.
Stripped of non-essentials, the facts of the case, as summarized by the CA, are as follows:
Petitioners Petron Corporation ("Petron" for brevity) and Pilipinas Shell Petroleum Corporation
("Shell" for brevity) are two of the largest bulk suppliers and producers of LPG in the Philippines.
Petron is the registered owner in the Philippines of the trademarks GASUL and GASUL cylinders
used for its LGP products. It is the sole entity in the Philippines authorized to allow refillers and
distributors to refill, use, sell, and distribute GASUL LPG containers, products and its trademarks.
Pilipinas Shell, on the other hand, is the authorized user in the Philippines of the tradename,
trademarks, symbols or designs of its principal, Shell International Petroleum Company Limited,
including the marks SHELLANE and SHELL device in connection with the production, sale and
distribution of SHELLANE LPGs. It is the only corporation in the Philippines authorized to allow
refillers and distributors to refill, use, sell and distribute SHELLANE LGP containers and products.
Private respondents, on the other hand, are the directors and officers of Republic Gas Corporation
("REGASCO" for brevity), an entity duly licensed to engage in, conduct and carry on, the business of
refilling, buying, selling, distributing and marketing at wholesale and retail of Liquefied Petroleum
Gas ("LPG").
LPG Dealers Associations, such as the Shellane Dealers Association, Inc., Petron Gasul Dealers
Association, Inc. and Totalgaz Dealers Association, received reports that certain entities were
engaged in the unauthorized refilling, sale and distribution of LPG cylinders bearing the registered
tradenames and trademarks of the petitioners. As a consequence, on February 5, 2004, Genesis
Adarlo (hereinafter referred to as Adarlo), on behalf of the aforementioned dealers associations, filed
a letter-complaint in the National Bureau of Investigation ("NBI") regarding the alleged illegal trading
of petroleum products and/or underdelivery or underfilling in the sale of LPG products.
Acting on the said letter-complaint, NBI Senior Agent Marvin E. De Jemil (hereinafter referred to as
"De Jemil") was assigned to verify and confirm the allegations contained in the letter-complaint. An
investigation was thereafter conducted, particularly within the areas of Caloocan, Malabon,
Novaliches and Valenzuela, which showed that several persons and/or establishments, including
REGASCO, were suspected of having violated provisions of Batas Pambansa Blg. 33 (B.P. 33). The
surveillance revealed that REGASCO LPG Refilling Plant in Malabon was engaged in the refilling
and sale of LPG cylinders bearing the registered marks of the petitioners without authority from the
latter. Based on its General Information Sheet filed in the Securities and Exchange Commission,
REGASCOs members of its Board of Directors are: (1) Arnel U. Ty President, (2) Marie Antoinette
Ty Treasurer, (3) Orlando Reyes Corporate Secretary, (4) Ferrer Suazo and (5) Alvin Ty
(hereinafter referred to collectively as private respondents).
De Jemil, with other NBI operatives, then conducted a test-buy operation on February 19, 2004 with
the former and a confidential asset going undercover. They brought with them four (4) empty LPG
cylinders bearing the trademarks of SHELLANE and GASUL and included the same with the
purchase of J&S, a REGASCOs regular customer. Inside REGASCOs refilling plant, they witnessed
that REGASCOs employees carried the empty LPG cylinders to a refilling station and refilled the
LPG empty cylinders. Money was then given as payment for the refilling of the J&Ss empty
cylinders which included the four LPG cylinders brought in by De Jemil and his companion. Cash
Invoice No. 191391 dated February 19, 2004 was issued as evidence for the consideration paid.
After leaving the premises of REGASCO LPG Refilling Plant in Malabon, De Jemil and the other NBI
operatives proceeded to the NBI headquarters for the proper marking of the LPG cylinders. The LPG
cylinders refilled by REGASCO were likewise found later to be underrefilled.
Thus, on March 5, 2004, De Jemil applied for the issuance of search warrants in the Regional Trial
Court, Branch 24, in the City of Manila against the private respondents and/or occupants of
REGASCO LPG Refilling Plant located at Asucena Street, Longos, Malabon, Metro Manila for
alleged violation of Section 2 (c), in relation to Section 4, of B.P. 33, as amended by PD 1865. In his
sworn affidavit attached to the applications for search warrants, Agent De Jemil alleged as follows:
"x x x.
"4. Respondents REGASCO LPG Refilling Plant-Malabon is not one of those entities authorized to
refill LPG cylinders bearing the marks of PSPC, Petron and Total Philippines Corporation. A
Certification dated February 6, 2004 confirming such fact, together with its supporting documents,
are attached as Annex "E" hereof.
6. For several days in the month of February 2004, the other NBI operatives and I conducted
surveillance and investigation on respondents REGASCO LPG refilling Plant-Malabon. Our
surveillance and investigation revealed that respondents REGASCO LPG Refilling Plant-Malabon is
engaged in the refilling and sale of LPG cylinders bearing the marks of Shell International, PSPC
and Petron.
x x x.
8. The confidential asset and I, together with the other operatives of the NBI, put together a test-buy
operation. On February 19, 2004, I, together with the confidential asset, went undercover and
executed our testbuy operation. Both the confidential assets and I brought with us four (4) empty
LPG cylinders branded as Shellane and Gasul. x x x in order to have a successful test buy, we
decided to "ride-on" our purchases with the purchase of Gasul and Shellane LPG by J & S, one of
REGASCOs regular customers.
9. We proceeded to the location of respondents REGASCO LPG Refilling Plant-Malabon and asked
from an employee of REGASCO inside the refilling plant for refill of the empty LPG cylinders that we
have brought along, together with the LPG cylinders brought by J & S. The REGASCO employee,
with some assistance from other employees, carried the empty LPG cylinders to a refilling station
and we witnessed the actual refilling of our empty LPG cylinders.
10. Since the REGASCO employees were under the impression that we were together with J & S,
they made the necessary refilling of our empty LPG cylinders alongside the LPG cylinders brought
by J & S. When we requested for a receipt, the REGASCO employees naturally counted our LPG
cylinders together with the LPG cylinders brought by J & S for refilling. Hence, the amount stated in
Cash Invoice No. 191391 dated February 19, 2004, equivalent to Sixteen Thousand Two Hundred
Eighty-Six and 40/100 (Php16,286.40), necessarily included the amount for the refilling of our four
(4) empty LPG cylinders. x x x.
11. After we accomplished the purchase of the illegally refilled LPG cylinders from respondents
REGASCO LPG Refilling Plant-Malabon, we left its premises bringing with us the said LPG
cylinders. Immediately, we proceeded to our headquarters and made the proper markings of the
illegally refilled LPG cylinders purchased from respondents REGASCO LPG Refilling Plant-Malabon
by indicating therein where and when they were purchased. Since REGASCO is not an authorized
refiller, the four (4) LPG cylinders illegally refilled by respondents REGASCO LPG Refilling Plant-
Malabon, were without any seals, and when weighed, were underrefilled. Photographs of the LPG
cylinders illegally refilled from respondents REGASCO LPG Refilling Plant-Malabon are attached as
Annex "G" hereof. x x x."
After conducting a personal examination under oath of Agent De Jemil and his witness, Joel Cruz,
and upon reviewing their sworn affidavits and other attached documents, Judge Antonio M. Eugenio,
Presiding Judge of the RTC, Branch 24, in the City of Manila found probable cause and
correspondingly issued Search Warrants Nos. 04-5049 and 04-5050.
Upon the issuance of the said search warrants, Special Investigator Edgardo C. Kawada and other
NBI operatives immediately proceeded to the REGASCO LPG Refilling Station in Malabon and
served the search warrants on the private respondents. After searching the premises of REGASCO,
they were able to seize several empty and filled Shellane and Gasul cylinders as well as other allied
paraphernalia.
Subsequently, on January 28, 2005, the NBI lodged a complaint in the Department of Justice against
the private respondents for alleged violations of Sections 155 and 168 of Republic Act (RA) No.
8293, otherwise known as the Intellectual Property Code of the Philippines.
On January 15, 2006, Assistant City Prosecutor Armando C. Velasco recommended the dismissal of
the complaint. The prosecutor found that there was no proof introduced by the petitioners that would
show that private respondent REGASCO was engaged in selling petitioners products or that it
imitated and reproduced the registered trademarks of the petitioners. He further held that he saw no
deception on the part of REGASCO in the conduct of its business of refilling and marketing LPG.
The Resolution issued by Assistant City Prosecutor Velasco reads as follows in its dispositive
portion:
"WHEREFORE, foregoing considered, the undersigned finds the evidence against the respondents
to be insufficient to form a well-founded belief that they have probably committed violations of
Republic Act No. 9293. The DISMISSAL of this case is hereby respectfully recommended for
insufficiency of evidence."
On appeal, the Secretary of the Department of Justice affirmed the prosecutors dismissal of the
complaint in a Resolution dated September 18, 2008, reasoning therein that:
"x x x, the empty Shellane and Gasul LPG cylinders were brought by the NBI agent specifically for
refilling. Refilling the same empty cylinders is by no means an offense in itself it being the
legitimate business of Regasco to engage in the refilling and marketing of liquefied petroleum gas. In
other words, the empty cylinders were merely filled by the employees of Regasco because they
were brought precisely for that purpose. They did not pass off the goods as those of complainants
as no other act was done other than to refill them in the normal course of its business.
"In some instances, the empty cylinders were merely swapped by customers for those which are
already filled. In this case, the end-users know fully well that the contents of their cylinders are not
those produced by complainants. And the reason is quite simple it is an independent refilling
station.
"At any rate, it is settled doctrine that a corporation has a personality separate and distinct from its
stockholders as in the case of herein respondents. To sustain the present allegations, the acts
complained of must be shown to have been committed by respondents in their individual capacity by
clear and convincing evidence. There being none, the complaint must necessarily fail. As it were,
some of the respondents are even gainfully employed in other business pursuits. x x x."
3

Dispensing with the filing of a motion for reconsideration, respondents sought recourse to the CA
through a petition for certiorari.
In a Decision dated July 2, 2010, the CA granted respondents certiorari petition. The fallo states:
WHEREFORE, in view of the foregoing premises, the petition filed in this case is hereby GRANTED.
The assailed Resolution dated September 18, 2008 of the Department of Justice in I.S. No. 2005-
055 is hereby REVERSED and SET ASIDE.
SO ORDERED.
4

Petitioners then filed a motion for reconsideration. However, the same was denied by the CA in a
Resolution dated October 11, 2010.
Accordingly, petitioners filed the instant Petition for Review on Certiorari raising the following issues
for our resolution:
Whether the Petition for Certiorari filed by RESPONDENTS should have been denied outright.
Whether sufficient evidence was presented to prove that the crimes of Trademark Infringement and
Unfair Competition as defined and penalized in Section 155 and Section 168 in relation to Section
170 of Republic Act No. 8293 (The Intellectual Property Code of the Philippines) had been
committed.
Whether probable cause exists to hold INDIVIDUAL PETITIONERS liable for the offense charged.
5

Let us discuss the issues in seriatim.
Anent the first issue, the general rule is that a motion for reconsideration is a condition sine qua non
before a certiorari petition may lie, its purpose being to grant an opportunity for the court a quo to
correct any error attributed to it by re-examination of the legal and factual circumstances of the
case.
6

However, this rule is not absolute as jurisprudence has laid down several recognized exceptions
permitting a resort to the special civil action for certiorari without first filing a motion for
reconsideration, viz.:
(a) Where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) Where the questions raised in the certiorari proceedings have been duly raised and
passed upon by the lower court, or are the same as those raised and passed upon in the
lower court.
(c) Where there is an urgent necessity for the resolution of the question and any further delay
would prejudice the interests of the Government or of the petitioner or the subject matter of
the petition is perishable;
(d) Where, under the circumstances, a motion for reconsideration would be useless;
(e) Where petitioner was deprived of due process and there is extreme urgency for relief;
(f) Where, in a criminal case, relief from an order of arrest is urgent and the granting of such
relief by the trial court is improbable;
(g) Where the proceedings in the lower court are a nullity for lack of due process;
(h) Where the proceeding was ex parte or in which the petitioner had no opportunity to
object; and,
(i) Where the issue raised is one purely of law or public interest is involved.
7

In the present case, the filing of a motion for reconsideration may already be dispensed with
considering that the questions raised in this petition are the same as those that have already been
squarely argued and passed upon by the Secretary of Justice in her assailed resolution.
Apropos the second and third issues, the same may be simplified to one core issue: whether
probable cause exists to hold petitioners liable for the crimes of trademark infringement and unfair
competition as defined and penalized under Sections 155 and 168, in relation to Section 170 of
Republic Act (R.A.) No. 8293.
Section 155 of R.A. No. 8293 identifies the acts constituting trademark infringement as follows:
Section 155. Remedies; Infringement. Any person who shall, without the consent of the owner of
the registered mark:
155.1 Use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered
mark of the same container or a dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2 Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall
be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of whether there is actual sale of goods or
services using the infringing material.
8

From the foregoing provision, the Court in a very similar case, made it categorically clear that the
mere unauthorized use of a container bearing a registered trademark in connection with the sale,
distribution or advertising of goods or services which is likely to cause confusion, mistake or
deception among the buyers or consumers can be considered as trademark infringement.
9

Here, petitioners have actually committed trademark infringement when they refilled, without the
respondents consent, the LPG containers bearing the registered marks of the respondents. As
noted by respondents, petitioners acts will inevitably confuse the consuming public, since they have
no way of knowing that the gas contained in the LPG tanks bearing respondents marks is in reality
not the latters LPG product after the same had been illegally refilled. The public will then be led to
believe that petitioners are authorized refillers and distributors of respondents LPG products,
considering that they are accepting empty containers of respondents and refilling them for resale.
As to the charge of unfair competition, Section 168.3, in relation to Section 170, of R.A. No. 8293
describes the acts constituting unfair competition as follows:
Section 168. Unfair Competition, Rights, Regulations and Remedies. x x x.
168.3 In particular, and without in any way limiting the scope of protection against unfair competition,
the following shall be deemed guilty of unfair competition:
(a) Any person, who is selling his goods and gives them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in
which they are contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers to believe that the goods offered are
those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise
clothes the goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in
selling such goods with a like purpose;
x x x x
Section 170. Penalties. Independent of the civil and administrative sanctions imposed by law, a
criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any
person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 and
Subsection 169.1.
From jurisprudence, unfair competition has been defined as the passing off (or palming off) or
attempting to pass off upon the public of the goods or business of one person as the goods or
business of another with the end and probable effect of deceiving the public.
10

Passing off (or palming off) takes place where the defendant, by imitative devices on the general
appearance of the goods, misleads prospective purchasers into buying his merchandise under the
impression that they are buying that of his competitors. Thus, the defendant gives his goods the
general appearance of the goods of his competitor with the intention of deceiving the public that the
goods are those of his competitor.
11

In the present case, respondents pertinently observed that by refilling and selling LPG cylinders
bearing their registered marks, petitioners are selling goods by giving them the general appearance
of goods of another manufacturer.
What's more, the CA correctly pointed out that there is a showing that the consumers may be misled
into believing that the LPGs contained in the cylinders bearing the marks "GASUL" and
"SHELLANE" are those goods or products of the petitioners when, in fact, they are not. Obviously,
the mere use of those LPG cylinders bearing the trademarks "GASUL" and "SHELLANE" will give
the LPGs sold by REGASCO the general appearance of the products of the petitioners.
In sum, this Court finds that there is sufficient evidence to warrant the prosecution of petitioners for
trademark infringement and unfair competition, considering that petitioner Republic Gas Corporation,
being a corporation, possesses a personality separate and distinct from the person of its officers,
directors and stockholders.
12
Petitioners, being corporate officers and/or directors, through whose act,
default or omission the corporation commits a crime, may themselves be individually held
answerable for the crime.
13
Veritably, the CA appropriately pointed out that petitioners, being in direct
control and supervision in the management and conduct of the affairs of the corporation, must have
known or are aware that the corporation is engaged in the act of refilling LPG cylinders bearing the
marks of the respondents without authority or consent from the latter which, under the
circumstances, could probably constitute the crimes of trademark infringement and unfair
competition. The existence of the corporate entity does not shield from prosecution the corporate
agent who knowingly and intentionally caused the corporation to commit a crime. Thus, petitioners
cannot hide behind the cloak of the separate corporate personality of the corporation to escape
criminal liability. A corporate officer cannot protect himself behind a corporation where he is the
actual, present and efficient actor.
14

WHEREFORE, premises considered, the petition is hereby DENIED and the Decision dated July 2,
2010 and Resolution dated October 11, 2010 of the Court of Appeals in CA-G.R. SP No. 106385 are
AFFIRMED.
SO ORDERED.
A.C. No. 6942 July 17, 2013
SONIC STEEL INDUSTRIES, INC., COMPLAINANT,
vs.
ATTY. NONNATUS P. CHUA, RESPONDENT.
D E C I S I O N
PERALTA, J .:
Before us is a complaint for disbarment filed by complainant Sonic Steel Industries, Inc. against
respondent, Atty. Nonnatus P. Chua.
The facts follow.
Complainant is a corporation doing business as a manufacturer and distributor of zinc and
aluminum-zinc coated metal sheets known in the market as Superzinc and Superlume. On the other
hand, respondent is the Vice-President, Corporate Legal Counsel and Assistant Corporate Secretary
of Steel Corporation (STEELCORP).
The controversy arose when, on September 5, 2005, STEELCORP, with the assistance of the
National Bureau of Investigation, applied for and was granted by the Regional Trial Court (RTC) of
Cavite City, Branch 17, a Search Warrant directed against complainant.
On the strength of the search warrant, complainants factory was searched and, consequently,
properties were seized. A week after, STEELCORP filed before the Department of Justice a
complaint for violation of Section 168, in relation to Section 170, of Republic Act No. 8293
1
against
complainant and the latters officers.
Based on three documents, to wit: (1) the Affidavit of Mr. Antonio Lorenzana (Executive Vice-
President of STEELCORP), in support of the application for the Search Warrant; (2) the exchange
between Mr. Lorenzana and Judge Melchor Sadang of Branch 17, RTC of Cavite, during the
searching inquiry conducted by the latter for the application for warrant, as evidenced by the
Transcript of Stenographic Notes (TSN) dated September 5, 2005 in People v. John Doe a.k.a.
Anthony Ong, et al.; and (3) the Complaint-Affidavit executed by respondent and filed before the
Department of Justice, complainant asserts that respondent performed the ensuing acts:
(a)
In stating that STEELCORP is the exclusive licensee of Philippine Patent No. 16269, respondent
deliberately misled the court as well as the Department of Justice, because Letters Patent No. 16269
have already lapsed, making it part of the public domain.
(b)
In refusing to provide the RTC of Cavite City, Branch 17 a copy of the patent, respondent
intentionally deceived said court because even the first page of the patent will clearly show that said
patent already lapsed. It appears that Letters Patent No. 16269 was issued on August 25, 1983 and
therefore had already lapsed rendering it part of the public domain as early as 2000. Had respondent
shown a copy of the patent to the judge, said judge would not have been misled into issuing the
search warrant because any person would know that a patent has a lifetime of 17 years under the
old law and 20 years under R.A. 8293. Either way, it is apparent from the face of the patent that it is
already a lapsed patent and therefore cannot be made basis for a supposed case of infringement
more so as basis for the application for the issuance of a search warrant.
In the affidavit submitted by Mr. Antonio Lorenzana, complainant asserts that the same includes
statements expressing that STEELCORP is the licensee of Philippine Patent No. 16269, to wit:
2. STEELCORP is the exclusive licensee of and manufacturer in the Philippines of "GALVALUME"
metal sheet products, which are coated with aluminum-zinc alloy, produced by using the technical
information and the patent on Hot Dip Coating of Ferrous Strands with Patent Registration No.
16269 issued by the Philippine Intellectual Property Office ("IPO"), a process licensed by BIEC
International, Inc. to STEELCORP for the amount of over Two Million Five Hundred Thousand U.S.
Dollars ($2,500,000.00).
x x x x
7. Specifically, the acts committed by RESPONDENTS of storing, selling, retailing, distributing,
importing, dealing with or otherwise disposing of "SUPERLUME" metal sheet products which are
similarly coated with aluminum-zinc alloy and cannot be produced without utilizing the same basic
technical information and the registered patent used by STEELCORP to manufacture
"GALVALUME" metal sheet products, the entire process of which has been lawfully and exclusively
licensed to STEELCORP by BIEC International, Inc., constitute unfair competition in that
x x x x
b. While SUPERLUME metal sheets have the same general appearance as those of GALVALUME
metal sheets which are similarly coated with aluminum-zinc alloy, produced by using the same
technical information and the aforementioned registered patent exclusively licensed to and
manufactured in the Philippines since 1999 by STEELCORP, the machinery and process for the
production of SUPERLUME metal sheet products were not installed and formulated with the
technical expertise of BIEC International, Inc. to enable the SONIC to achieve the optimum results in
the production of aluminum-zinc alloy-coated metal sheets;
x x x x
8. On the [bases] of the foregoing analyses of the features and characteristics of RESPONDENTS
SUPERLUME metal sheet products, the process by which they are manufactured and produced
certainly involves an assembly line that substantially conforms with the technical information and
registered patent licensed to STEELCORP, which should include, but are not limited to, the following
major components and specifications, viz.:
x x x x
9. It is plain from the physical appearance and features of the metal sheets which are coated with
aluminum-zinc alloy and produced by using the technical information and the registered patent
exclusively licensed to STEELCORP by BIEC International, Inc.; the mark ending with the identical
syllable "LUME" to emphasize its major component (i.e., aluminum) which is used in Respondents
"SUPERLUME" metal sheets while having the same general appearance of STEELCORPs genuine
"GALVALUME" metal sheets, that the intention of RESPONDENTS is to cash in on the goodwill of
STEELCORP by passing off its "SUPERLUME" metal sheet products as those of STEELCORPs
"GALVALUME" metal sheet products, which increases the inducement of the ordinary customer to
buy the deceptively manufactured and unauthorized production of "SUPERLUME" metal sheet
products.
x x x x
11. STEELCORP has lost and will continue to lose substantial revenues and will sustain damages
as a result of the wrongful conduct of RESPONDENTS and their deceptive use of the technical
information and registered patent, exclusively licensed to STEELCORP, as well as the other features
of their SUPERLUME metal sheets, that have the same general appearance as the genuine
GALVALUME metal sheets of STEELCORP. The conduct of RESPONDENTS has also deprived
and will continue to deprive STEELCORP of opportunities to expand its goodwill.
2

Also, in the searching questions of Judge Melchor Sadang of the RTC of Cavite City, Branch 17,
complainant asserts that respondent deliberately misled and intentionally deceived the court in
refusing to provide a copy of Philippine Patent No. 16269 during the hearing for the application for a
search warrant, to wit:
[COURT to Mr. Lorenzana]
Q: You stated here in your affidavit that you are the Executive Vice-President of Steel Corporation of
the Philippines. Is that correct?
A: Yes sir.
Q: You also state that Steel Corporation owns a patent exclusively licensed to Steel Corporation by
BIEC International, Inc. Do you have document to show that?
ATTY. CHUA: We reserve the presentation of the trademark license, your Honor.
Q: Why are you applying a search warrant against the respondent Sonic Steel Industries?
A: We will know that Sonic is not licensed to produce that product coming from the technology which
is exclusively licensed to our Company, your Honor. We know that from our own knowledge. Also,
the investigation of the NBI confirms further that the product has already been in the market for quite
some time. As a product, it has the same feature and characteristic as that of GALVALUME, your
Honor.
Q: In other words, you are not saying that Sonic is using the trademark GALVALUME but only using
the technology of the process which is only licensed to Steel Corporation. Is that correct?
A: Yes, your Honor.
x x x x
Court to Lorenzana:
Q: The patent on the Hot Dip Coating of Ferrous Strands, do you have a document regarding that?
A: Yes, your Honor. It is in the office.
ATTY. CHUA: We reserve the right to present it, your Honor.
Court:
Q: You stated a while ago that it is the Steel Corporation that has been licensed by the BIEC
International to manufacture sheet products which are coated with aluminum-zinc alloy. Is that
correct?
A: Yes, your Honor.
3

Subsequently, respondent initiated a complaint for violation of Section 168 of Republic Act No. 8293
against complainant, as well as its officers, before the Department of Justice. In his complaint-
affidavit, respondent stated that STEELCORP is the exclusive licensee of Philippine Patent No.
16269 on Hot Dip Coating of Ferrous Strands which was allegedly violated by complainant. Thus:
2. STEELCORP is the exclusive licensee and manufacturer in the Philippines of "GALVALUME"
metal sheet products, which are coated with aluminum-zinc alloy, produced by using the technical
information and the patent on Hot Dip Coating of Ferrous Strands with Patent Registration No.
16269, issued by the Philippine Intellectual Property Office ("IPO"), a process licensed by BIEC
International, Inc. to STEELCORP for the amount of over Two Million Five Hundred Thousand U.S.
Dollars ($2,500,000.00).
x x x x
13. x x x x
b. While SUPERLUME metal sheets have the same general appearance as those of GALVALUME
metal sheets which are similarly coated with aluminum-zinc alloy, produced by using the same
technical information and the aforementioned registered patent exclusively licensed to and
manufactured in the Philippines since 1999 by STEELCORP, the machinery and process for the
production of SUPERLUME metal sheet products were not installed and formulated with the
technical expertise of BIEC International, Inc. to enable SONIC to achieve the optimum results in the
production of aluminum-zinc alloy-coated metal sheets;
x x x x
15. The natural, probable and foreseeable result of RESPONDENTS conduct is to continue to
deprive STEELCORP of the exclusive benefits of using the technical information and patent for the
manufacture and distribution of aluminum-zinc alloy-coated metal sheet products, deprive
STEELCORP of sales and goodwill, and continue to injure STEELCORPs relations with present and
prospective customers.
16. STEELCORP has lost and will continue to lose substantial revenues and will sustain damages
as a result of the wrongful conduct by RESPONDENTS and their deceptive use the technical
information and patent, exclusively licensed by BIEC International, Inc. to STEELCORP, used and/or
intended to be used by RESPONDENTS for the manufacture, retail, dealings with or otherwise
disposals of unauthorized SUPERLUME aluminum-zinc alloy-coated metal sheet products, as well
as the other features of its product, having the same general appearance and characteristics as
those of the genuine GALVALUME aluminum-zinc alloy-coated metal sheet products.
RESPONDENTS conduct has also deprived STEELCORP and will continue to deprive
STEELCORP of opportunities to expand its goodwill.
4

For his part, respondent counters that he never made an allegation or reservation that STEELCORP
owned Philippine Patent No. 16269. He asserts that he merely reserved the right to present the
trademark license exclusively licensed to STEELCORP by BIEC International, Inc. which is
composed of the technical information and the patent used to produce GALVALUME metal sheet
products, the same technology being utilized by complainant without authority from STEELCORP.
Respondent further avers that the Complaint-Affidavit filed before the Department of Justice did not
categorically claim that STEELCORP is the owner of the patent, but simply that STEELCORP is the
exclusive licensee of the process by which GALVALUME is produced.
The complaint was then referred to the Integrated Bar of the Philippines (IBP) for investigation,
report and recommendation.
In its Report and Recommendation dated July 10, 2007, the IBPs Commission on Bar Discipline
resolved to suspend respondent from the practice of law for three (3) months with admonition that a
repetition of the same or similar act in the future will be dealt with more severely.
On August 17, 2007, the IBP Board of Governors passed Resolution No. XVIII-2007-76 wherein it
resolved to adopt and approve the Report and Recommendation of the Investigating Officer of the
Commission on Bar Discipline, with the modification that respondent is suspended from the practice
of law for six (6) months.
Unfazed, respondent filed a Motion for Reconsideration against said Resolution, but the same was
denied on January 14, 2012.
Accordingly, the Resolution, together with the records of the case, was transmitted to this Court for
final action.
We affirm in toto the findings and recommendations of the IBP.
Pertinent provisions in the Code of Professional Responsibility state:
Canon 1 A lawyer shall uphold the Constitution, obey the laws of the land and promote respect for
the law and legal process.
Rule 1.01 A lawyer shall not engage in unlawful, dishonest and immoral or deceitful conduct.
x x x x
Canon 10 A lawyer owes candor, fairness and good faith to the court.
Rule 10.01 A lawyer shall do no falsehood, nor consent to the doing of any in Court, nor shall he
mislead or allow the Court to be misled by an artifice.
Lawyers are officers of the court, called upon to assist in the administration of justice. They act as
vanguards of our legal system, protecting and upholding truth and the rule of law. They are expected
to act with honesty in all their dealings, especially with the court. Verily, the Code of Professional
Responsibility enjoins lawyers from committing or consenting to any falsehood in court or from
allowing the courts to be misled by any artifice. Moreover, they are obliged to observe the rules of
procedure and not to misuse them to defeat the ends of justice.
5

In the present case, it appears that respondent claimed or made to appear that STEELCORP was
the licensee of the technical information and the patent on Hot Dip Coating of Ferrous Strands or
Philippine Patent No. 16269. However, an extensive investigation made by the IBPs Commission on
Bar Discipline showed that STEELCORP only has rights as a licensee of the technical information
and not the rights as a licensee of the patent, viz.:
x x x In respondents words and crafted explanation, he claimed that STEELCORP had rights as a
licensee of the process, consisting of a combination of the Technical Information and the Patent.
Considering, however, that STEELCORPs rights as a licensee of the process is severable into (a)
rights as licensee of the technical information and (b) rights as a licensee of Patent No. 16269,
respondent was less than candid in asserting that STEELCORP had rights to the entire process
during the relevant periods, as will be explained below.
Under the TECHNICAL INFORMATION AND PATENT LICENSE AGREEMENT between
STEELCORP and BIEC International, Inc., the terms "technical information" and "patent" are
separate and distinct. Thus, technical information is defined under such contract as "Licensors
existing proprietary data, know-how and technical information which relates to the subject of Sheet
and/or Strip coated with an aluminum-zinc alloy xxx and to facilities and equipment for the
manufacture and use thereof and to data, know-how and technical information applicable thereto as
of the Effective Date xxxx." On the other hand, Licensed Patent is defined therein as "Patent No.
16269" entitled "Hot dip coating of ferrous strands." The combination of such proprietary data, know-
how and the patent on Hot Dip Coating of Ferrous Strands is the process over which STEELCORP
claims it had proprietary license, and represents the same process used by STEELCORP in
producing GALVALUME products. This is supposedly the basis upon which STEELCORP (through
Mr. Lorenzana in his Affidavit in support of the application for a search warrant, presumably under
the direction of respondent) and respondent (in his Complaint-Affidavit before the Department of
Justice) asserted then that it was the exclusive licensee of the technical information and registered
Patent No. 16269.
However, from the time that STEELCORP applied for a search warrant over SONIC STEELs
premises (through the affidavit of Mr. Lorenzana and presumably with respondents strategy as
counsel), Patent No. 16269 had long expired. This fact is crucial in that the license STEELCORP
had, as claimed by respondent, was over the entire process and not just the technical information as
a component thereof. Accordingly, when the application for search was filed and when respondent
subscribed to his Complaint-Affidavit before the Department of Justice, STEELCORP had no more
exclusive license to Patent No. 16269. Said patent had already become free for anyones use,
including SONIC STEEL. All that STEELCORP possessed during those times was the residual right
to use (even if exclusively) just the technical information defined in its agreement with BIEC
International, Inc. STEELCORP had only an incomplete license over the process. The expiration of
the patent effectively negated and rendered irrelevant respondents defense of subsistence of the
contract between STEELCORP and BIEC International, Inc. during the filing of the application for
search warrant and filing of respondents affidavit before the Department of justice. There is basis,
therefore, to the claim that respondent has not been "candid enough" in his actuations.
It would also appear that respondent was wanting in candor as regards his dealings with the lower
court.1wphi 1 The interjection made by respondent during Judge Sadangs (Branch 17, Regional Trial Court
of Cavite) searching examination of Mr. Lorenzana illustrates this, viz.:
Q: You also state here that Steel Corporation owns a patent exclusively licensed to Steel
Corporation by BIEC International, Inc. Do you have a document to show that?
ATTY. CHUA: We reserve the presentation of the trademark license, your Honor.
x x x x x x x x x
Q: The patent on the Hot Dip Coating of Ferrous Strands, do you have a document regarding that?
A: Yes, your Honor. It is in the office.
ATTY. CHUA: We reserve the right to present it, your Honor.
It is worth underscoring that although Judge Sadang addressed his questions solely to Mr.
Lorenzana, respondent was conveniently quick to interrupt and manifest his clients reservation to
present the trademark license. Respondent was equally swift to end Judge Sadangs inquiry over the
patent by reserving the right to present the same at another time. While it is not the Commissions
province to dwell with suppositions and hypotheses, it is well within its powers to make reasonable
inferences from established facts. Given that Patent No. 16269 had been in expiry for more than five
(5) years when Judge Sadang propounded his questions, it logically appears that respondent, in
making such reservations in open court, was trying to conceal from the former the fact of the patents
expiration so as to facilitate the grant of the search warrant in favor of STEELCORP. This is contrary
to the exacting standards of conduct required from a member of the Bar.
Indeed, the practice of law is not a right but merely a privilege bestowed upon by the State upon
those who show that they possess, and continue to possess, the qualifications required by law for
the conferment of such privilege. One of those requirements is the observance of honesty and
candor. Candor in all their dealings is the very essence of a practitioners honorable membership in
the legal profession. Lawyers are required to act with the highest standard of truthfulness, fair play
and nobility in the conduct of litigation and in their relations with their clients, the opposing parties,
the other counsels and the courts. They are bound by their oath to speak the truth and to conduct
themselves according to the best of their knowledge and discretion, and with fidelity to the courts
and their clients.
6

From the foregoing, it is clear that respondent violated his duties as a lawyer to avoid dishonest and
deceitful conduct, (Rule 1.01, Canon 1) and to act with candor, fairness and good faith (Rule 10.01,
Canon 10). Also, respondent desecrated the solemn oath he took before this Court when he sought
admission to the bar, i.e., not to do any falsehood nor consent to the doing of any in Court. Thus,
even at the risk of jeopardizing the probability of prevailing on STEELCORPs application for a
search warrant, respondent should have informed the court of the patents expiration so as to allow
the latter to make an informed decision given all available and pertinent facts.
WHEREFORE, premises considered, respondent Atty. Nonnatus P. Chua is hereby SUSPENDED
from the practice of law for six (6) months with ADMONITION that a repetition of the same or similar
act in the future will be dealt with more severely.
SO ORDERED.
G.R. No. 202423 January 28, 2013
CHESTER UYCO, WINSTON UYCHIYONG, and CHERRY C. UYCO-ONG, Petitioners,
vs.
VICENTE LO, Respondent.
R E S O L U T I O N
BRION, J .:
We resolve the motion for reconsideration
1
dated October 22, 2012 filed by petitioners Chester Uyco,
Winston Uychiyong and Cherry C. Uyco-Ong to set aside the Resolution
2
dated September 12, 2012
of this Court, which affirmed the decision
3
dated March 9, 2012 and the resolution
4
dated June 21,
2012 of the Court of Appeals (CA) in CA-G.R. SP No. 111964. The CA affirmed the resolution
5
dated
September 1, 2008 of the Department of Justice (DOJ). Both the CA and the DOJ found probable
cause to charge the petitioners with false designation of origin, in violation of Section 169.1, in
relation with Section 170, of Republic Act No. (RA) 8293, otherwise known as the "Intellectual
Property Code of the Philippines."
6

The disputed marks in this case are the "HIPOLITO & SEA HORSE & TRIANGULAR DEVICE,"
"FAMA," and other related marks, service marks and trade names of Casa Hipolito S.A. Portugal
appearing in kerosene burners. Respondent Vicente Lo and Philippine Burners Manufacturing
Corporation (PBMC) filed a complaint against the officers of Wintrade Industrial SalesCorporation
(Wintrade), including petitioners Chester Uyco, Winston Uychiyong and Cherry Uyco-Ong, and of
National Hardware, including Mario Sy Chua, for violation of Section 169.1, in relation to Section
170, of RA 8293.
Lo claimed in his complaint that Gasirel-Industria de Comercio e Componentes para Gass, Lda.
(Gasirel), the owner of the disputed marks, executed a deed of assignment transferring these marks
in his favor, to be used in all countries except for those in Europe and America.
7
In a test buy, Lo
purchased from National Hardware kerosene burners with the subject marks and the designations
"Made in Portugal" and "Original Portugal" in the wrappers. These products were manufactured by
Wintrade. Lo claimed that as the assignee for the trademarks, he had not authorized Wintrade to use
these marks, nor had Casa Hipolito S.A. Portugal. While a prior authority was given to Wintrades
predecessor-in-interest, Wonder Project & Development Corporation (Wonder), Casa Hipolito S.A.
Portugal had already revoked this authority through a letter of cancellation dated May 31, 1993.
8
The
kerosene burners manufactured by Wintrade have caused confusion, mistake and deception on the
part of the buying public. Lo stated that the real and genuine burners are those manufactured by its
agent, PBMC.
In their Answer, the petitioners stated that they are the officers of Wintrade which owns the subject
trademarks and their variants. To prove this assertion, they submitted as evidence the certificates of
registration with the Intellectual Property Office. They alleged that Gasirel, not Lo, was the real party-
in-interest. They allegedly derived their authority to use the marks from Casa Hipolito S.A. Portugal
through Wonder, their predecessor-in-interest. Moreover, PBMC had already ceased to be a
corporation and, thus, the licensing agreement between PBMC and Lo could not be given effect,
particularly because the agreement was not notarized and did not contain the provisions required by
Section 87 of RA 8293. The petitioners pointed out that Lo failed to sufficiently prove that the burners
bought from National Hardware were those that they manufactured. But at the same time, they also
argued that the marks "Made in Portugal" and "Original Portugal" are merely descriptive and refer to
the source of the design and the history of manufacture.
In a separate Answer, Chua admitted that he had dealt with Wintrade for several years and had sold
its products. He had not been aware that Wintrade had lost the authority to manufacture, distribute,
and deal with products containing the subject marks, and he was never informed of Wintrades loss
of authority. Thus, he could have not been part of any conspiracy.
After the preliminary investigation, the Chief State Prosecutor found probable cause to indict the
petitioners for violation of Section 169.1, in relation with Section 170, of RA 8293. This law punishes
any person who uses in commerce any false designation of origin which is likely to cause confusion
or mistake as to the origin of the product. The law seeks to protect the public; thus, even if Lo does
not have the legal capacity to sue, the State can still prosecute the petitioners to prevent damage
and prejudice to the public.
On appeal, the DOJ issued a resolution affirming the finding of probable case. It gave credence to
Los assertion that he is the proper assignee of the subject marks. More importantly, it took note of
the petitioners admission that they used the words "Made in Portugal" when in fact, these products
were made in the Philippines. Had they intended to refer to the source of the design or the history of
the manufacture, they should have explicitly said so in their packaging. It then concluded that the
petitioners defenses would be better ventilated during the trial and that the admissions of the
petitioners make up a sufficient basis for probable cause.
The CA found no grave abuse of discretion on the part of the DOJ and affirmed the DOJs ruling.
When the petitioners filed their petition before us, we denied the petition for failure to sufficiently
show any reversible error in the assailed judgment to warrant the exercise of the Courts
discretionary power.
We find no reversible error on the part of the CA and the DOJ to merit reconsideration. The
petitioners reiterate their argument that the products bought during the test buy bearing the
trademarks in question were not manufactured by, or in any way connected with, the petitioners
and/or Wintrade. They also allege that the words "Made in Portugal" and "Original Portugal" refer to
the origin of the design and not to the origin of the goods.
The petitioners again try to convince the Court that they have not manufactured the products bearing
the marks "Made in Portugal" and "Original Portugal" that were bought during the test buy. However,
their own admission and the statement given by Chua bear considerable weight.
The admission in the petitioners Joint Affidavit is not in any way hypothetical, as they would have us
believe. They narrate incidents that have happened. They refer to Wintrades former association with
Casa Hipolito S.A. Portugal; to their decision to produce the burners in the Philippines; to their use of
the disputed marks; and to their justification for their use. It reads as follows:
24. As earlier mentioned, the predecessor-in-interest of Wintrade was the former exclusive licensee
of Casa Hipolito SA of Portugal since the 1970s, and that Wintrade purchased all the rights on the
said trademarks prior to the closure of said company. Indeed, the burners sold by Wintrade used to
be imported from Portugal, but Wintrade later on discovered the possibility of obtaining these
burners from other sources or of manufacturing the same in the Philippines.
Wintrades decision to procure these burners from sources other than Portugal is certainly its
management prerogative. The presence of the words "made in Portugal" and "original Portugal" on
the wrappings of the burners and on the burners themselves which are manufactured by Wintrade is
an allusion to the fact that the origin of the design of said burners can be traced back to Casa
Hipolito SA of Portugal, and that the history of the manufacture of said burners are rooted in
Portugal. These words were not intended to deceive or cause mistake and confusion in the minds of
the buying public.
9

Chua, the owner of National Hardware the place where the test buy was conducted admits that
Wintrade has been furnishing it with kerosene burners with the markings "Made in Portugal" for the
past 20 years, to wit:
5. I hereby manifests (sic) that I had been dealing with Wintrade Industrial Sales Corporation
(WINTRADE for brevity) for around 20 years now by buying products from it. I am not however
aware that WINTRADE was no longer authorized to deal, distribute or sell kerosene burner bearing
the mark HIPOLITO and SEA HORSE Device, with markings "Made in Portugal" on the wrapper as I
was never informed of such by WINTRADE nor was ever made aware of any notices posted in the
newspapers informing me of such fact. Had I been informed, I would have surely stopped dealing
with WINTRADE.
10
1wphi 1
Thus, the evidence shows that petitioners, who are officers of Wintrade, placed the words "Made in
Portugal" and "Original Portugal" with the disputed marks knowing fully well because of their
previous dealings with the Portuguese company that these were the marks used in the products
of Casa Hipolito S.A. Portugal. More importantly, the products that Wintrade sold were admittedly
produced in the Philippines, with no authority from Casa Hipolito S.A. Portugal. The law on
trademarks and trade names precisely precludes a person from profiting from the business
reputation built by another and from deceiving the public as to the origins of products. These facts
support the consistent findings of the State Prosecutor, the DOJ and the CA that probable cause
exists to charge the petitioners with false designation of origin. The fact that the evidence did not
come from Lo, but had been given by the petitioners, is of no significance.
The argument that the words "Made in Portugal" and "Original Portugal" refer to the origin of the
design and not to the origin of the goods does not negate the finding of probable cause; at the same
time, it is an argument that the petitioners are not barred by this Resolution from raising as a
defense during the hearing of the case.
WHEREFORE, premises considered, we hereby DENY the motion for reconsideration for lack of
merit.
SO ORDERED.