Yao vs.

People Facts: NBI Agent Ritche Oblanca applied for 2 search warrants with RTC Cavite against petitioners along with other occupants of MASAGANA compound for allegedly violating the Intellectual Property rights of Petron and Pilipinas Shell with attached affidavits stating the following: 1) NBI received a letter-complaint from Atty. Bienvenido Somera Jr. in behalf of Petron and Shell requesting assistance in the investigation and if warranted, prosecution of the persons/establishment in violation of their Intellectual Property rights. 2) Based on the letter-complaint, Oblanca and Agent Angelo Zarzoso were assigned on the case. 3) Prior to conducting investigations, Oblanca reviewed the trademark registrations issued to Petron and Shell as well as other documents and evidence obtained when Petron and company employed an investigative agency by Mr. Bernabe Alajar. 4) MASAGANA Gas Corporation is not authorized to refill and sell and distribute Gasul and Shellane products. Petitioners are the directors and stockholders of said corporation. 5) Oblanca and Alajar conducted test-buys on 2 occasions, Feb. 13, 2003 and Feb. 27, 2003. After stating their intent to do business, were allowed inside the MASAGANA refilling plant, receipts were issued and were assisted in choosing empty Gasul cylinders. In their presence, the empty cylinders were refilled where Oblanca noticed that there was no valve seal placed on the cylinders. Oblanca furnished copies of photographs of the delivery trucks in his application for the search warrant. RTC issued 2 search warrants for the search and seizure of transaction records, the trucks used in the delivery of illegally refilled cylinders, machinery and equipment being used or intended to be used in illegally refilling the cylinders bearing the trademarks of Gasul and Shellane, and Gasul and Shellane cylinders and any other items bearing their trademark. Petitioners filed a Motion to Quash on the grounds that there is no probable cause, that Oblanca and Alajar do not have the authority to apply for search warrant, allegedly committing perjury when they submitted their sworn statements that they conducted test-buys, that the area was not specified as the place to be searched must be indicated with particularity and that the search warrant was general in nature as the items seized were being used in the conduct of lawful business. Petitioners also filed for a Motion for the Return of the Motor Compressor and the LPG Refilling Machine as said items were being used in the conduct of lawful business as third-party claimants. RTC denied both motions holding that the search warrant issued was based on probable cause considering the testimonies of Oblanca and Alajar, the documentary evidence presented that MASAGANA was in violation of Petron and Shells intellectual property rights. It was also ruled that Oblanca and Alajar had personal knowledge since they were the ones who conducted the search warrant, the search warrant was not general in nature since the are described was solely being used by MASAGANA and the items to be seized were sufficiently described with particularity as the same was limited to cylinders bearing the trademarks of Gasul and Shellane. Denying the motion of MASAGANA for the Return of the equipment as third party complainant cannot be considered since evidence show that the petitioners are the stockholders of MASAGANA, conducting their business through the same judicial entity. RTC added that the ownership of another person or entity of the seized items is not a ground to order its return, in seizures pursuant to a warrant what is important is that the seized items were being used or intended to be used as means of committing the offense complained of that by its very nature, the properties sought to be returned in the instant case appear to be related to and intended for the illegal activity for which the search warrants were applied for; and that the items seized are instruments of an offense. RTC denied petitioners Motion for Reconsideration for lack of compelling cause on July 21, 2003. Pettitioners field for certiorari with CA who affirmed the assailed decision and orders of RTC on Sept. 30, 2004, finding that grave abuse of discretion was no proven to exist. Thus the instant petition. Issues: 1) W/N there was probable cause.

2) 3) 4) 5)

W/N Oblanca has the authority to apply for the search warrant. W/N the requirement of giving particular description of the place to be searched was complied with. W/N the search warrant was general in nature. W/N the complaint was against MASAGANA [to not consider it as third party claimant whose rights were violated as a result of the seizure].

Ruling: I As provided for by Art. III, Sec. 2 of the Constitution and Rule 126 of the Revised Rules on Criminal Procedure regarding requisites of issuing search warrants. According to these provisions, a search warrant can only be issued upon a finding of probable cause. The facts and circumstances referred to pertain to facts and information personally known to the applicant and the witness he may present. As provided by Sec. 155 of RA 8293, 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/consumers can be considered as trademark infringement. Oblanca in his sworn affidavits stated that in reviewing the trademark registrations issued by Philippine Intellectual Property Office to Petron and Pilipinas Shell, he confirmed that MASAGANA is not authorized to sell, use, refill or distribute Gasul and Shellane LPG cylinders. Aside from the documentary evidence Oblanca submitted, both him and Alajar had personal knowledge, stating in their affidavits that they used different names during the test-buys to avoid suspicion and personally witnessed the refilling, of cylinders bearing the marks Gasul and Shellane inside the plant and the deliveries of these refilled containers to some outlets using mini-trucks. Such facts and circumstances establish a sufficient probable cause. As the term implies, probable cause is concerned with probability, not absolute or even moral certainty. The standards of judgment are those of a reasonably prudent man, not the exacting calibrations of a judge after a full blown trial. Using different names do not negate the personal knowledge that Oblanca and Alajar have since it is the common practice of officers of the law such as NBI agents during covert investigations to use another name to conceal their true identities. Oblanca having reviewed the trademark registrations issued to Petron ans Shell and Alajar, a private investigator employed by both [Petron and Shell] to verify the reports that MASAGANA is involved in the illegal refilling, selling and distribution of cylinders bearing their trade marks cannot be said incompetent to testify on the trademarks infringed by the petitioners. As provided by Section 5 of the Revised Rules on Criminal Procedure, the searching questions propounded to the applicant and the witnesses depend largely on the discretion of the judge. Reviewing the Transcript of Stenographic Notes of the preliminary examination, it was found that the questions of Judge Sadang to be sufficiently probing, not at all superficial and perfunctory. The reviewing court can overturn such findings only upon proof that the judge disregarded the facts before him or ignored the clear dictates of reason. II Oblanca s authority to apply for the search warrant is clearly discussed in his affidavit. It can also be presumed that Oblanca, as an NBI agent, is a public officer who had regularly performed his official duty. He would not have initiated an investigation on MASAGANA without a proper complaint. III The long standing rule is that a description of the place to be searched is sufficient if the officer with the warrant can, with reasonable effort, ascertain and identify the place intended and distinguish it from other places in the community. Any designation or description known to the locality that points out the place to the exclusion of all others, and on inquiry leads the officers unerringly to it, satisfies the constitutional requirement. IV

A search warrant may be said to particularly describe the things to be seized when the description therein is as specific as the circumstances will ordinarily allow; or when the description expresses a conclusion of fact not of law by which the warrant officer may be guided in making the search and seizure; or when the things described are limited to those which bear direct relation to the offense for which the warrant is being issued. The law does not require that the things to be seized must be described in precise and minute details as to leave no room for doubt on the part of the searching authorities; otherwise it would be virtually impossible for the applicants to obtain a search warrant as they would not know exactly what kind of things they are looking for. Once described, however, the articles subject of the search and seizure need not be so invariant as to require absolute concordance, in our view, between those seized and those described in the warrant. Substantial similarity of those articles described as a class or specie would suffice. The items to be seized under the search warrants in question were sufficiently described with particularity. Additionally, since the described items are clearly limited only to those which bear direct relation to the offense, i.e., violation of section 155 of Republic Act No. 8293, for which the warrant was issued, the requirement of particularity of description is satisfied. V A fundamental principle of corporation law is that a corporation is a separate and distinct entity from its stockholders, directors, or officers but when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons, or in the case of two corporations merge them into one. Petitioners are directors and officers of MASAGANA, using the entity to violate the intellectual property right of Petron and Shell and so they should be considered one and the same for liability purposes. The motor compressor and the LPG refilling machine were the corpus delicti or the evidence of the commission of the trademark infringement, thus RTC denying the return of said items was to prevent MASAGANA/petitioners from using it again in trademark infringement. Petitioner relying on Section 20 of AM No 02-1-06 SC is not tenable because it is not applicable in the present case as it governs only searches and seizure in civil actions whereas this case is for criminal violation of RA 8293.

RA 8293 Intellectual Property Code of the Philippines 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 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. (Sec. 22, R.A. No 166a) 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. (Arts. 188 and 189, Revised Penal Code) Article III, Section 2 of the Constitution: Section 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause 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 persons or things to be seized. (emphasis supplied). Section 4 and 5 of Rule 126 of the Revised Rules on Criminal Procedure: 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 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.M. No. 02-1-06-SC - RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 20. Failure to file complaint. - The writ shall also. Upon motion of the expected adverse party, be set aside and the seized documents and articles returned to the expected adverse party if no case is filed with the appropriate court or authority within thirty-one (31) calendar days from the date of issuance of the writ. Probable cause for search warrant means 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. > Probable cause is the existence of such facts and circumstances as would excite the belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted > Based on the evidence that would be adduced by the parties Doctrine of Piercing the Veil of Corporate Entity Requires the court to see through the protective shroud which exempts its stockholders from liabilities that they ordinarily would be subject to, or distinguishes a corporation from a seemingly separate one, were it not for the existing corporate fiction (Lim vs CA, 323 SCRA 102) Extent: The application of the doctrine to a particular case does not deny the corporation of legal personality for any and all purposes, but only for the particular transaction or instance for which the doctrine was applied (Koppel v. Yatco 77 Phil. 496)