3rd Set Pooling (Full Text)

THIRD DIVISION
WILLIAM C. YAO, SR.,

LUISA C. YAO, RICHARD
C. YAO, WILLIAM C. YAO
JR., and ROGER C. YAO,
Petitioners,
-versus
G.R. No. 168306

Present:
YNARES-SANTIAGO,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.
THE PEOPLE OF THE

PHILIPPINES,
PETRON
CORPORATION
and
PILIPINAS
SHELL
PETROLEUM CORP., and
its Principal, SHELL INTL
Promulgated:
PETROLEUM CO. LTD.,
Respondents.
June 19, 2007
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review on Certiorari[1] under Rule 45 of the Rules of
Court, petitioners William C. Yao, Sr., Luisa C. Yao, Richard C. Yao, William
C. Yao, Jr., and Roger C. Yao pray for the reversal of the Decision dated 30
September 2004,[2] and Resolution dated 1 June 2005, of the Court of Appeals in
CA G.R. SP No. 79256,[3]affirming the two Orders, both dated 5 June 2003, of the
Regional Trial Court (RTC), Branch 17, Cavite City, relative to Search Warrants
No. 2-2003 and No. 3-2003.[4] In the said Orders, the RTC denied the petitioners
Motion to Quash Search Warrant[5] and Motion for the Return of the Motor
Compressor and Liquified Petroleum Gas (LPG) Refilling Machine.[6]

The following are the facts:
Petitioners are incorporators and officers of MASAGANA GAS
CORPORATION (MASAGANA), an entity engaged in the refilling, sale and
distribution of LPG products. Private respondents Petron Corporation (Petron)
and Pilipinas Shell Petroleum Corporation (Pilipinas Shell) are two of the largest
bulk suppliers and producers of LPG in the Philippines. Their LPG products are
sold under the marks GASUL and SHELLANE, respectively. Petron is the
registered owner in the Philippines of the trademarks GASUL and GASUL
cylinders used for its LPG 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 (Shell International), 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 LPG
containers and products.[7]
On 3 April 2003, National Bureau of Investigation (NBI)
agent Ritche N. Oblanca (Oblanca) filed two applications for search warrant with
the RTC, Branch 17, CaviteCity, against petitioners and other occupants of the
MASAGANA
compound
located
at
Governors
Drive, Barangay Lapidario, Trece Martires, Cavite City, for alleged violation of
Section 155, in relation to Section 170 of Republic Act No. 8293, otherwise known
as The Intellectual Property Code of the Philippines.[8] The two applications for
search warrant uniformly alleged that per information, belief, and personal
verification of Oblanca, the petitioners are actually producing, selling, offering for
sale and/or distributing LPG products using steel cylinders owned by, and bearing
the tradenames, trademarks, and devices of Petron and Pilipinas Shell, without
authority and in violation of the rights of the said entities.
In his two separate affidavits[9] attached to the two applications for search
warrant, Oblanca alleged:
1.
[That] on 11 February 2003, the National Bureau of
Investigation
(NBI)
received
a
letter-complaint
from
Atty. Bienvenido I. Somera Jr. of Villaraza and Angangco, on behalf of
among others, [Petron Corporation (PETRON)] and Pilipinas Shell
Petroleum Corporation (PSPC), the authorized representative of Shell
International Petroleum Company Limited (Shell International),
requesting assistance in the investigation and, if warranted, apprehension
and prosecution of certain persons and/or establishments suspected of
violating the intellectual property rights [of PETRON] and of PSPC and
Shell International.
2.
[That] on the basis of the letter-complaint, I, together
with Agent Angelo Zarzoso, was assigned as the NBI agent on the
case.
3.
[That] prior to conducting the investigation on the
reported illegal activities, he reviewed the certificates of trademark
registrations issued in favor of [PETRON], PSPC and Shell
International as well as other documents and other evidence obtained
by the investigative agency authorized by [PETRON], PSPC and Shell
International to investigate and cause the investigation of persons and
establishments violating the rights of [PETRON], PSPC and Shell
International, represented by Mr. Bernabe C. Alajar. Certified copies
of the foregoing trademark registrations are attached hereto as Annexes
A to :E.
4.
[That] among the establishments alleged to be
unlawfully refilling and unlawfully selling and distributing
[Gasul LPG and] Shellane products is Masagana Gas Corporation
(MASAGANA). Based on Securities and Exchange Commission
Records, MASAGANA has its principal office address
at 9775 Kamagong Street, San
Antonio Village, Makati, MetroManila. The
incorporators
and
directors of MASAGANA are William C. Yao, Sr., Luisa C. Yao,
Richard C. Yao, William C. Yao, Jr., and Roger C. Yao. x x x.
5.
[PETRON
I confirmed that MASAGANA is not authorized to use

and] Shellane LPG cylinders and its trademarks
and tradenames or to
and] Shellane LPGs.
be refillers or
distributors
of
[PETRON
6.
I went to MASAGANAs refilling station located at
Governors
Drive, Barangay Lapidario, Trece Martires City (sic), Cavite to
investigate its activities. I confirmed that MASAGANA is indeed
engaged in the unauthorized refilling, sale and/or distribution of
[Gasul and] Shellane LPG cylinders. I found out that MASAGANA
delivery trucks with Plate Nos. UMN-971, PEZ-612, WTE-527, XAM970 and WFC-603 coming in and out of the refilling plant located at
the aforementioned address contained multi-brand LPG cylinders
including [Gasul and] Shellane. x x x.
7.
[That] on 13 February 2003, I conducted a test-buy
accompanied by Mr. Bernabe C. Alajar. After asking the purpose of
our visit, MASAGANAs guard allowed us to enter the MASAGANA
refilling plant to purchase GASUL and SHELLANE LPGs. x x x. We
were issued an order slip which we presented to the cashiers office
located near the refilling station. After paying the amount
x x x covering the cost of the cylinders and their contents, they were
issued Cash Invoice No. 56210 dated February 13, 2003. We were,
thereafter, assisted by the plant attendant in choosing empty GASUL
and SHELLANE 11 kg. cylinders, x x x were brought to the refilling
station [and filled in their presence.] I noticed that no valve seals were
placed on the cylinders.
[That] while inside the refilling plant doing the test-buy, I
noticed that stockpiles of multi-branded cylinders including GASUL
and SHELLANE cylinders were stored near the refilling station. I also
noticed that the total land area of the refilling plant is about 7,000 to
10,000 square meters. At the corner right side of the compound
immediately upon entering the gate is a covered area where the
maintenance of the cylinders is taking place. Located at the back right
corner of the compound are two storage tanks while at the left side also
at the corner portion is another storage tank. Several meters and
fronting the said storage tank is where the refilling station and the
office are located. It is also in this storage tank where the elevated
blue water tank depicting MASAGANA CORP. is located. About
eleven (11) refilling pumps and stock piles of multi-branded cylinders
including Shellane and GASUL are stored in the refilling station. At
the left side of the entrance gate is the guard house with small door for
the pedestrians and at the right is a blue steel gate used for incoming
and outgoing vehicles.
8.
[That] on 27 February 2003, I conducted another testbuy accompanied by Mr. Bernabe C. Alajar. x x x After choosing the
cylinders, we were issued an order slip which we presented to the
cashier. Upon payment, Cash Invoice No. 56398 was issued covering
the cost of both GASUL and SHELLANE LPG cylinders and their
contents. x x x Both cylinders were refilled in our presence and no
valve seals were placed on the cylinders.
Copies of the photographs of the delivery trucks, LPG cylinders and

registration papers were also attached to the aforementioned affidavits.[10]
Bernabe C. Alajar (Alajar), owner of Able Research and Consulting Services
Inc., was hired by Petron and Pilipinas Shell to assist them in carrying out their
Brand Protection Program. Alajar accompanied Oblanca during the surveillance of
and test-buys at the refilling plant of MASAGANA. He also executed two separate
affidavits corroborating the statements of Oblanca. These were annexed to the two
applications for search warrant.[11]
After conducting the preliminary examination on Oblanca and Alajar, and
upon reviewing their sworn affidavits and other attached documents,
Judge Melchor Q.C.Sadang (Judge Sadang), Presiding Judge of the RTC, Branch
17, Cavite City, found probable cause and correspondingly issued Search Warrants
No. 2-2003 and No. 3-2003.[12] The search warrants commanded any peace officer
to make an immediate search of the MASAGANA compound and to seize the
following items:
Under Search Warrant No. 2-2003:
a.
Empty/filled
LPG
cylinder
tanks/containers,
bearing
the tradename SHELLANE,
SHELL
(Device)
of Pilipinas Shell Petroleum Corporation and the trademarks and
other devices owned by Shell International Petroleum Company,
Ltd.;
b.
Machinery and/or equipment being used or intended to be used

for the purpose of illegally refilling LPG cylinders belonging
to Pilipinas Shell
Petroleum
Corporation
bearing
the
latters tradename as well as the marks belonging to Shell
International Petroleum Company, Ltd., enumerated hereunder:
1.
2.
3.
4.
5.
6.
7.
Bulk/Bullet LPG storage tanks;

Compressor/s (for pneumatic refilling system);
LPG hydraulic pump/s;
LPG refilling heads/hoses and appurtenances or LPG
filling assembly;
LPG pipeline gate valve or ball valve and handles and
levers;
LPG weighing scales; and
Seals simulating the shell trademark.
c.
Sales invoices, ledgers, journals, official receipts, purchase

orders, and all other books of accounts, inventories and
documents pertaining to the production, sale and/or distribution of
the aforesaid goods/products.
d.
Delivery truck bearing Plate Nos. WTE-527, XAM-970 and

WFC-603, hauling trucks, and/or other delivery trucks or vehicles
or conveyances being used or intended to be used for the purpose
of selling and/or distributing the above-mentioned counterfeit
products.
Under Search Warrant No. 3-2003:

a.
Empty/filled
LPG
cylinder
tanks/containers,
bearing Petron Corporations
(Petron) tradename and
its tradename GASUL and other devices owned and/or used
exclusively by Petron;
b.
Machinery and/or equipment being used or intended to be used

for the purpose of illegally refilling LPG cylinders belonging
to Petron enumerated hereunder;
1.
2.
Bulk/Bullet LPG storage tanks;

Compressor/s (for pneumatic filling system);
3.
4.
5.
6.
7.
LPG hydraulic pump/s;

LPG filling heads/hoses and appurtenances or LPG filling
assembly;
LPG pipeline gate valve or ball valve and handles levers;
LPG weighing scales; and
Seals bearing the Petron mark;
c.
Sales invoices, ledgers, journals, official receipts, purchase

orders, and all other books of accounts, inventories and
documents pertaining to the production, sale and/or distribution of
the aforesaid goods/products; and
d.
Delivery trucks bearing Plate Nos. UMN-971, PEZ-612 and

WFC-603, hauling trucks, and/or other delivery trucks or vehicles
or conveyances being used for the purpose of selling and/or
distributing the above-mentioned counterfeit products.
Upon the issuance of the said search warrants, Oblanca and several NBI
operatives immediately proceeded to the MASAGANA compound and served the
search warrants on petitioners.[13] After searching the premises of MASAGANA,
the following articles described in Search Warrant No. 2-2003 were seized:
a.
Thirty-eight (38) filled 11 kg. LPG cylinders, bearing

the tradename of Pilipinas Shell Petroleum Corporation and the
trademarks and other devices owned by Shell International
Petroleum Company, Ltd.;
b.
Thirty-nine (39) empty 11 kg. LPG cylinders, bearing

c.
Eight (8) filled 50 kg. LPG cylinders, bearing

d.
Three
(3)
empty
50
kg.
LPG
cylinders,
bearing

e.
One (1) set of motor compressor for filling system.
Pursuant to Search Warrant No. 3-2003, the following articles were also
seized:
a.
Six (6) filled 11 kg. LPG cylinders without seal,

bearing Petrons tradename and its trademark GASUL and other
devices owned and/or used exclusively by Petron;
b.
Sixty-three
(63)
empty
11
kg.
LPG
cylinders,
bearing Petrons tradename and its trademark GASUL and
other devices owned and/or used exclusively by Petron;
c.
Seven
(7)
tampered
11
kg.
LPG
cylinders,
devices owned and/or used exclusively by Petron;
d.
Five
(5)
tampered
50
kg.
LPG
cylinders,
devices owned and/or used exclusively by Petron with tampered
GASUL logo;
e.
One (1) set of motor compressor for filling system; and
f.
One (1) set of LPG refilling machine.
On 22 April 2003, petitioners filed with the RTC a Motion to Quash Search
Warrants No. 2-2003 and No. 3-2003[14] on the following grounds:
1.
There is no probable cause for the issuance of the search

warrant and the conditions for the issuance of a search
warrant were not complied with;
2.
Applicant NBI Agent Ritchie N. Oblanca and his
witness Bernabe C. Alajar do not have any authority to

apply for a search warrant. Furthermore, they committed
perjury when they alleged in their sworn statements that
they conducted a test-buy on two occasions;
3.
The place to be searched was not specified in the Search

Warrant as the place has an area of 10,000 square meters
(one hectare) more or less, for which reason the place to
be searched must be indicated with particularity;
4.
The search warrant is characterized as a general warrant

as the items to be seized as mentioned in the search
warrant are being used in the conduct of the lawful
business of respondents and the same are not being used
in refilling Shellane and Gasul LPGs.
On 30 April 2003, MASAGANA, as third party claimant, filed with the

RTC a Motion for the Return of Motor Compressor and LPG Refilling
Machine.[15] It claimed that it is the owner of the said motor compressor and LPG
refilling machine; that these items were used in the operation of its legitimate
business; and that their seizure will jeopardize its business interests.
On 5 June 2003, the RTC issued two Orders, one of which denied the
petitioners Motion to Quash Search Warrants No. 2-2003 and No. 3-2003, and
the other one also denied the Motion for the Return of Motor Compressor and
LPG Refilling Machine of MASAGANA, for lack of merit.[16]
With respect to the Order denying the petitioners motion to quash Search
Warrants No. 2-2003 and No. 3-2003, the RTC held that based on the testimonies
of Oblancaand Alajar, as well as the documentary evidence consisting of receipts,
photographs, intellectual property and corporate registration papers, there is
probable cause to believe that petitioners are engaged in the business of refilling
or
using
cylinders
which
bear
the
trademarks
or
devices
of Petron and Pilipinas Shell in the place sought to be searched and that such
activity is probably in violation of Section 155 in relation to Section 170 of
Republic Act No. 8293.
It also ruled that Oblanca and Alajar had personal knowledge of the acts
complained of since they were the ones who monitored the activities of and
conducted test-buys on MASAGANA; that the search warrants in question are
not general warrants because the compound searched are solely used and
occupied by MASAGANA, and as such, there was no need to particularize the
areas within the compound that would be searched; and that the items to be
seized in the subject search warrants were sufficiently described with
particularity as the same was limited to cylinder tanks bearing the trademarks
GASUL and SHELLANE.
As regards the Order denying the motion of MASAGANA for the return of
its motor compressor and LPG refilling machine, the RTC resolved that
MASAGANA cannot be considered a third party claimant whose rights were
violated as a result of the seizure since the evidence disclosed that petitioners are
stockholders of MASAGANA and that they conduct their business through the
same juridical entity. It maintained that to rule otherwise would result in the
misapplication and debasement of the veil of corporate fiction. It also stated that
the veil of corporate fiction cannot be used as a refuge from liability.
Further, the RTC ratiocinated that ownership by another person or entity of
the seized items is not a ground to order its return; that in seizures pursuant to a
search warrant, what is important is that the seized items were 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.
Petitioners filed Motions for Reconsideration of the assailed Orders,[17] but
these were denied by the RTC in its Order dated 21 July 2003 for lack of
compelling reasons.[18]
Subsequently, petitioners appealed the two Orders of the RTC to the Court
of Appeals via a special civil action for certiorari under Rule 65 of the Rules of
Court.[19] On30 September 2004, the Court of Appeals promulgated its Decision
affirming the Orders of the RTC.[20] It adopted in essence the bases and reasons
of the RTC in its two Orders. The decretal portion thereof reads:
Based on the foregoing, this Court finds no reason to disturb the

assailed Orders of the respondent judge. Grave abuse of discretion has
not been proven to exist in this case.
WHEREFORE, the petition is hereby DISMISSED for lack of
merit. The assailed orders both dated June 5, 2003 are hereby
AFFIRMED.
Petitioners filed a Motion for Reconsideration[21] of the Decision of the

Court of Appeals, but this was denied in its Resolution dated 1 June 2005 for lack
of merit.[22]
Petitioners filed the instant petition on the following grounds:
I.
THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT THE PRESIDING JUDGE OF RTC CAVITE CITY HAD
SUFFICIENT BASIS IN DECLARING THE EXISTENCE OF
PROBABLE CAUSE;
II.
THAT NBI AGENT (RITCHIE OBLANCA) CAN APPLY FOR THE
SEARCH WARRANTS NOTHWITHSTANDING HIS LACK OF
AUTHORITY;
III.
THAT THE REQUIREMENT OF GIVING A PARTICULAR
DESCRIPTION OF THE PLACE TO BE SEARCHED WAS
COMPLIED WITH;
IV.

THAT THE APPLICATIONS AND THE SEARCH WARRANTS
THEMSELVES SHOW NO AMBIGUITY OF THE ITEMS TO BE
SEIZED;
V.
THAT THE COMPLAINT IS DIRECTED AGAINST MASAGANA
GAS CORPORATION, ACTING THROUGH ITS OFFICERS AND
DIRECTORS, HENCE MASAGANA GAS CORPORATION MAY
NOT BE CONSIDERED AS THIRD PARTY CLAIMANT WHOSE
RIGHTS WERE VIOLATED AS A RESULT OF THE SEIZURE.[23]
Apropos the first issue, petitioners allege that Oblanca and Alajar had no
personal knowledge of the matters on which they testified;
that Oblanca and Alajar lied to JudgeSadang when they stated under oath that they
were the ones who conducted the test-buys on two different occasions; that the
truth of the matter is that Oblanca and Alajar never made the purchases personally;
that the transactions were undertaken by other persons namely, Nikko Javier and
G. Villanueva as shown in the Entry/Exit Slips of MASAGANA; and that even if it
were true that Oblanca and Alajar asked Nikko Javier and G. Villanueva to conduct
the test-buys, the information relayed by the latter two to the former was mere
hearsay.[24]
Petitioners also contend that if Oblanca and Alajar had indeed used different
names in purchasing the LPG cylinders, they should have mentioned it in their
applications for search warrants and in their testimonies during the preliminary
examination; that it was only after the petitioners had submitted to the RTC the
entry/exit slips showing different personalities who made the purchases
that Oblanca and Alajar explained that they had to use different names in order to
avoid detection; that Alajar is not connected with either of the private respondents;
that Alajar was not in a position to inform the RTC as to the distinguishing
trademarks of SHELLANE and GASUL; that Oblanca was not also competent to
testify on the marks allegedly infringed by petitioners; that Judge Sadang failed to
ask probing questions on the distinguishing marks of SHELLANE and GASUL;

that the findings of the Brand Protection Committee of Pilipinas Shell were not
submitted
nor
presented
to
the
RTC;
that
although
Judge Sadang examined Oblanca and Alajar, the former did not ask exhaustive
questions; and that the questions Judge Sadang asked were merely rehash of the
contents of the affidavits of Oblanca and Alajar.[25]
These contentions are devoid of merit.
Article III, Section 2, of the present Constitution states the requirements
before a search warrant may be validly issued, to wit:
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 of Rule 126 of the Revised Rules on Criminal Procedure, provides

with more particularity the requisites in issuing a search warrant, viz:
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.
According to the foregoing provisions, a search warrant can be issued only

upon a finding of probable cause. 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.[26]

The facts and circumstances being referred thereto pertain to facts, data or
information personally known to the applicant and the witnesses he may
present.[27] The applicant or his witnesses must have personal knowledge of the
circumstances surrounding the commission of the offense being complained
of. Reliable information is insufficient. Mere affidavits are not enough, and the
judge must depose in writing the complainant and his witnesses.[28]
Section 155 of Republic Act No. 8293 identifies the acts constituting
trademark infringement, thus:
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
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.
As can be gleaned in Section 155.1, 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.
In his sworn affidavits,[29] Oblanca stated that before conducting an
investigation on the alleged illegal activities of MASAGANA, he reviewed the
certificates of trademark registrations issued by the Philippine Intellectual Property
Office
in
favor
of Petron and Pilipinas Shell;
that
he
confirmed
from Petron and Pilipinas Shell that MASAGANA is not authorized to sell, use,
refill or distribute GASUL and SHELLANE LPG cylinder containers; that he
and Alajar monitored the activities of MASAGANA in its refilling plant station
located
within
its
compound
at
Governors
Drive, Barangay Lapidario, Trece Martires, Cavite City; that, using different
names, they conducted two test-buys therein where they purchased LPG cylinders
bearing the trademarks GASUL and SHELLANE; that the said GASUL and
SHELLANE LPG cylinders were refilled in their presence by the MASAGANA
employees; that while they were inside the MASAGANA compound, he noticed
stock piles of multi-branded cylinders including GASUL and SHELLANE LPG
cylinders; and that they observed delivery trucks loaded with GASUL and
SHELLANE LPG cylinders coming in and out of the MASAGANA compound and
making deliveries to various retail outlets. These allegations were corroborated
by Alajar in his separate affidavits.
In support of the foregoing statements, Oblanca also submitted the following
documentary and object evidence:
1.
Certified true copy of the Certificate of Registration No. 44046

for SHELL (DEVICE) in the name of Shell International;
2.

3.

4.
Certified true copy of the Certificate of Registration No. R-2813

for SHELL in the name of Shell International;
5.

for SHELLANE in the name of Shell International;
6.

for the mark GASUL in the name of Petron;
7.
Certified true copy of the Certificate of Registration No. C-147

for GASUL CYLINDER CONTAINING LIQUEFIED
PETROLEUM GAS in the name of Petron;
8.

for the mark GASUL AND DEVICE in the name of Petron;
9.
Certified true copy of the Articles of Incorporation of Masagana;
10.
Certified true copy of the By-laws of Masagana;
11.
Certified true copy of the latest General Information Sheet

of Masagana on file with the Securities and Exchange
Commission;
12.
Pictures of delivery trucks coming in and out of Masagana while

it delivered Gasul and Shellane LPG;
13.
Cash Invoice No. 56210 dated 13 February 2003 issued

by Masagana for the Gasul and Shellane LPG purchased by
Agent Oblanca and witness Alajar;
14.
Pictures of the Shellane and Gasul LPGs covered by Cash

Invoice
No.
56210
purchased
from Masagana by
Agent Oblanca and witness Alajar;
15.
Cash Invoice No. 56398 dated 27 February 2003 issued

by Masagana for the Gasul and Shellane LPG purchased by
Agent Oblanca and witness Alajar; and
16.
Pictures of the Shellane and Gasul LPGs covered by Cash

Invoice
No.
56398
purchased
from Masagana by
[30]
Agent Oblanca and witness Alajar.
Extant from the foregoing testimonial, documentary and object evidence is

that Oblanca and Alajar have personal knowledge of the fact that petitioners,
through MASAGANA, have been using the LPG cylinders bearing the marks
GASUL and SHELLANE without permission from Petron and Pilipinas Shell, a
probable cause for trademark infringement. Both Oblanca and Alajar were clear
and insistent that they were the very same persons who monitored the activities of
MASAGANA; that they conducted test-buys thereon; and that in order to avoid
suspicion, they used different names during the test-buys. They also personally
witnessed the refilling of LPG cylinders bearing the marks GASUL and
SHELLANE inside the MASAGANA refilling plant station and the deliveries of
these refilled containers to some outlets using mini-trucks.
Indeed, the aforesaid facts and circumstances are sufficient to establish
probable cause. It should be borne in mind that the determination of probable cause
does not call for the application of the rules and standards of proof that a judgment
of conviction requires after trial on the merits. 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.[31]
The fact that Oblanca and Alajar used different names in the purchase
receipts do not negate personal knowledge on their part. It is a common practice of
the law enforcers such as NBI agents during covert investigations to use different
names in order to conceal their true identities. This is reasonable and
understandable so as not to endanger the life of the undercover agents and to
facilitate the lawful arrest or apprehension of suspected violators of the law.
Petitioners contention that Oblanca and Alajar should have mentioned the
fact that they used different names in their respective affidavits and during the
preliminary examination is puerile. The argument is too vacuous to merit serious
consideration. There is nothing in the provisions of law concerning the issuance of
a search warrant which directly or indirectly mandates that the applicant of the
search warrant or his witnesses should state in their affidavits the fact that they
used different names while conducting undercover investigations, or to divulge
such fact during the preliminary examination. In the light of other more material
facts which needed to be established for a finding of probable cause, it is not

difficult to believe that Oblanca and Alajar failed to mention that they used aliases
in entering the MASAGANA compound due to mere oversight.
It cannot be gainfully said that Oblanca and Alajar are not competent to
testify on the trademarks infringed by the petitioners. As earlier
discussed, Oblanca declared under oath that before conducting an investigation on
the alleged illegal activities of MASAGANA, he reviewed the certificates of
trademark registrations issued by the Philippine Intellectual Property Office in
favor of Petron and Pilipinas Shell. These certifications of trademark registrations
were attached by Oblanca in his applications for the search warrants. Alajar, on the
other hand, works as a private investigator and, in fact, owns a private
investigation and research/consultation firm. His firm was hired and authorized,
pursuant to the Brand Protection Program of Petron and Pilipinas Shell, to verify
reports that MASAGANA is involved in the illegal sale and refill of GASUL and
SHELLANE LPG cylinders.[32] As part of the job, he studied and familiarized
himself with the registered trademarks of GASUL and SHELLANE, and the
distinct features of the LPG cylinders bearing the same trademarks before
conducting surveillance and test-buys on MASAGANA.[33] He also submitted
to Oblanca several copies of the same registered trademark registrations and
accompanied Oblanca during the surveillance and test-buys.
As to whether the form and manner of questioning made by
Judge Sadang complies with the requirements of law, Section 5 of Rule 126 of the
Revised Rules on CriminalProcedure, prescribes the rules in the examination of the
complainant and his witnesses when applying for search warrant, to wit:
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.
The searching questions propounded to the applicant and the witnesses

depend largely on the discretion of the judge. Although there is no hard-andfast
rule governing how a judge should conduct his investigation, it is axiomatic that
the examination must be probing and exhaustive, not merely routinary, general,
peripheral, perfunctory or pro forma. The judge must not simply rehash the
contents of the affidavit but must make his own inquiry on the intent and
justification of the application.[34]
After perusing the Transcript of Stenographic Notes of the preliminary
examination, we found the questions of Judge Sadang to be sufficiently probing,
not
at
all
superficial
and
perfunctory.[35] The
testimonies
of Oblanca and Alajar were consistent with each other and their narration of facts
was credible. As correctly found by the Court of Appeals:
This Court is likewise not convinced that respondent Judge failed
to ask probing questions in his determination of the existence of
probable cause. This Court has thoroughly examined the Transcript of
Stenographic Notes taken during the investigation conducted by the
respondent Judge and found that respondent Judge lengthily inquired
into the circumstances of the case. For instance, he required the NBI
agent to confirm the contents of his affidavit, inquired as to where the
test-buys were conducted and by whom, verified whether PSPC and
PETRON have registered trademarks or tradenames, required the NBI
witness to explain how the test-buys were conducted and to describe
the LPG cylinders purchased from Masagana Gas Corporation, inquired
why the applications for Search Warrant were filed in Cavite City
considering
that Masagana Gas
Corporation
was
located
in Trece Martires, Cavite, inquired whether the NBI Agent has a sketch
of the place and if there was any distinguishing sign to identify the place
to be searched, and inquired about their alleged tailing and monitoring of
the delivery trucks. x x x.[36]
Since probable cause is dependent largely on the opinion and findings of the
judge who conducted the examination and who had the opportunity to question the
applicant and his witnesses, the findings of the judge deserves great weight. 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.[37] We find
no compelling reason to disturb Judge Sadangs findings herein.
Anent the second issue, petitioners argue that Judge Sadang failed to
require Oblanca to show his authority to apply for search warrants; that Oblanca is
a member of the Anti-Organized Crime and not that of the Intellectual Property
Division of the NBI; that all complaints for infringement should be investigated by
the Intellectual Property Division of the NBI; that it is highly irregular that an
agent not assigned to the Intellectual Property Division would apply for a search
warrant and without authority from the NBI Director; that the alleged lettercomplaint of Atty. Bienvenido Somera, Jr. of Villaraza and Angangco Law Office
was not produced in court; that Judge Sadang did not requireOblanca to produce
the alleged letter-complaint which is material and relevant to the determination of
the existence of probable cause; and that Petron and Pilipinas Shell, being two
different corporations, should have issued a board resolution authorizing
the Villaraza and Angangco Law Office to apply for search warrant in their
behalf.[38]
We reject these protestations.
The authority of Oblanca to apply for the search warrants in question is
clearly discussed and explained in his affidavit, viz:
[That] on 11 February 2003, the National Bureau of Investigation
(NBI) received a letter-complaint from Atty. Bienvenido I. Somera, Jr.
of Villaraza and Angangco,
on
behalf
of
among
others, Petron Corporation (PETRON) [and Pilipinas Shell Petroleum
Corporation (PSPC), the authorized representative of Shell International
Petroleum Company Limited (SHELL INTERNATIONAL)] requesting
assistance in the investigation and, if warranted, apprehension and
prosecution of certain persons and/or establishments suspected of
violating the intellectual property rights of PETRON [and of PSPC and
Shell International.]
11.
[That] on the basis of the letter-complaint, I, together with
Agent Angelo Zarzoso, was assigned as the NBI agent on the case.[39]
The fact that Oblanca is a member of the Anti-Organized Crime Division

and not that of the Intellectual Property Division does not abrogate his authority to
apply for search warrant. As aptly stated by the RTC and the Court of Appeals,
there is nothing in the provisions on search warrant under Rule 126 of the Revised
Rules on Criminal Procedure, which specifically commands that the applicant law
enforcer must be a member of a division that is assigned or related to the subject
crime or offense before the application for search warrant may be acted upon. The
petitioners did not also cite any law, rule or regulation mandating such
requirement. At most, petitioners may only be referring to the administrative
organization and/or internal rule or practice of the NBI. However, not only did
petitioners failed to establish the existence thereof, but they also did not prove that
such administrative organization and/or internal rule or practice are inviolable.
Neither is the presentation of the letter-complaint of Atty. Somera and board
resolutions from Petron and Pilipinas Shell required or necessary in determining
probable cause. As heretofore discussed, the affidavits of Oblanca and Alajar,
coupled with the object and documentary evidence they presented, are sufficient to
establish probable cause. It can also be presumed that Oblanca, as an NBI agent, is
a public officer who had regularly performed his official duty.[40] He would not
have initiated an investigation on MASAGANA without a proper complaint.
Furthermore, Atty. Somera did not step up to deny his letter-complaint.
Regarding the third issue, petitioners posit that the applications for search
warrants of Oblanca did not specify the particular area to be searched, hence,
giving the raiding team wide latitude in determining what areas they can search.
They aver that the search warrants were general warrants, and are
therefore violative of the Constitution. Petitioners also assert that since the
MASAGANA compound is about 10,000.00 square meters with several structures
erected on the lot, the search warrants should have defined the areas to be
searched.
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.[41]
Moreover, in the determination of whether a search warrant describes the
premises to be searched with sufficient particularity, it has been held that the
executing officers prior knowledge as to the place intended in the warrant is
relevant. This would seem to be especially true where the executing officer is the
affiant on whose affidavit the warrant had been issued, and when he knows that the
judge who issued the warrant intended the compound described in the affidavit.[42]
The search warrants in question commanded any peace officer to make an
immediate search on MASAGANA compound located at Governors
Drive, BarangayLapidario, Trece Martires, Cavite City. It appears that the raiding
team had ascertained and reached MASAGANA compound without difficulty
since
MASAGANA
does
not
have
any
other
offices/plants
in Trece Martires, Cavite City. Moreover, Oblanca, who was with the raiding
team, was already familiar with the MASAGANA compound as he and Alajar had
monitored and conducted test-buys thereat.
Even if there are several structures inside the MASAGANA compound,
there was no need to particularize the areas to be searched because, as correctly
stated by Petronand Pilipinas Shell, these structures constitute the essential and
necessary components of the petitioners business and cannot be treated separately
as they form part of one entire compound. The compound is owned and used solely
by MASAGANA. What the case law merely requires is that, the place to be
searched can be distinguished in relation to the other places in the community.
Indubitably, this requisite was complied with in the instant case.
As to the fourth issue, petitioners asseverate that the search warrants did not
indicate with particularity the items to be seized since the search warrants merely
described the items to be seized as LPG cylinders bearing the trademarks GASUL
and SHELLANE without specifying their sizes.
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.[43]
While it is true that the property to be seized under a warrant must be

particularly described therein and no other property can be taken thereunder, yet
the description is required to be specific only in so far as the circumstances will
ordinarily allow. 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.[44]
Measured against this standard, we find that the items to be seized under the
search warrants in question were sufficiently described with particularity. The
articles to be confiscated were restricted to the following: (1) LPG cylinders
bearing the trademarks GASUL and SHELLANE; (2) Machines and equipments
used or intended to be used in the illegal refilling of GASUL and SHELLANE
cylinders. These machines were also specifically enumerated and listed in the
search warrants; (3) Documents which pertain only to the production, sale and
distribution of the GASUL and SHELLANE LPG cylinders; and (4) Delivery
trucks bearing Plate Nos. WTE-527, XAM-970 and WFC-603, hauling trucks,
and/or other delivery trucks or vehicles or conveyances being used or intended to
be used for the purpose of selling and/or distributing GASUL and SHELLANE
LPG cylinders.[45]
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.
Given the foregoing, the indication of the accurate sizes of the GASUL and
SHELLANE LPG cylinders or tanks would be unnecessary.
Finally, petitioners claim that MASAGANA has the right to intervene and to
move for the return of the seized items; that the items seized by the raiding team
were being used in the legitimate business of MASAGANA; that the raiding team
had no right to seize them under the guise that the same were being used in
refilling GASUL and SHELLANE LPG cylinders; and that there being no action
for infringement filed against them and/or MASAGANA from the seizure of the
items up to the present, it is only fair that the seized articles be returned to the
lawful owner in accordance with Section 20 of A.M. No. 02-1-06-SC.
It is an elementary and fundamental principle of corporation law that a
corporation is an entity separate and distinct from its stockholders, directors or
officers. However, 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.[46] In other words, the law will not recognize the separate corporate
existence if the corporation is being used pursuant to the foregoing unlawful
objectives. This non-recognition is sometimes referred to as the doctrine of
piercing the veil of corporate entity or disregarding the fiction of corporate entity.
Where the separate corporate entity is disregarded, the corporation will be treated
merely as an association of persons and the stockholders or members will be
considered as the corporation, that is, liability will attach personally or directly to
the officers and stockholders.[47]
As we now find, the petitioners, as directors/officers of MASAGANA, are
utilizing the latter in violating the intellectual property rights
of Petron and Pilipinas Shell. Thus, petitioners collectively and MASAGANA
should be considered as one and the same person for liability purposes.
Consequently, MASAGANAs third party claim serves no refuge for petitioners.
Even if we were to sustain the separate personality of MASAGANA from
that of the petitioners, the effect will be the same. The law does not require that the
property to be seized should be owned by the person against whom the search
warrants is directed. Ownership, therefore, is of no consequence, and it is sufficient
that the person against whom the warrant is directed has control or possession of
the property sought to be seized.[48] Hence, even if, as petitioners claimed, the
properties seized belong to MASAGANA as a separate entity, their seizure
pursuant to the search warrants is still valid.
Further, it is apparent that the motor compressor, LPG refilling machine and
the GASUL and SHELL LPG cylinders seized were the corpus delicti, the body or
substance of the crime, or the evidence of the commission of trademark
infringement. These were the very instruments used or intended to be used by the
petitioners in trademark infringement. It is possible that, if returned to
MASAGANA, these items will be used again in violating the intellectual property
rights of Petron and Pilipinas Shell.[49] Thus, the RTC was justified in denying the
petitioners motion for their return so as to prevent the petitioners and/or
MASAGANA from using them again in trademark infringement.
Petitioners reliance on Section 20 of A.M. No. 02-1-06-SC,[50] is not
tenable. As correctly observed by the Solicitor General, A.M. 02-1-06-SC is not
applicable in the present case because it governs only searches and seizures in civil
actions for infringement of intellectual property rights.[51] The offense complained
of herein is for criminal violation of Section 155 in relation to Section 170[52] of
Republic Act No. 8293.
WHEREFORE, the petition is DENIED. The Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 79256, dated 30 September 2004 and 1
June 2005, respectively, are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Republic of the Philippines

Supreme Court
Manila
FIRST DIVISION
GEMMA
ONG a.k.a. MARIA
TERESA GEMMA CATACUTAN,
Petitioner,
G.R. No. 169440

Present:
CORONA, C.J.,
Chairperson,
CARPIO,*
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PERLAS-BERNABE,** JJ.
- versus -
PEOPLE OF THE PHILIPPINES,

Respondent.
Promulgated:
November 23, 2011

x---------------------------------------------------- x
DECISION
LEONARDO-DE CASTRO, J.:

Before Us is a petition for review on certiorari, filed under Rule 45 of the
Rules of Court, to set aside and reverse the June 16, 2005 Decision[1] of the Court
of Appeals inCA-G.R. CR No. 28308, which affirmed the September 23,
2003 Decision[2] of the Regional Trial Court (RTC) of Manila, Branch 24
in Criminal Case No. 00-184454.
On July 28, 2000, petitioner Gemma Ong a.k.a. Maria Teresa Gemma
Catacutan (Gemma) was charged before the RTC for Infringement under Section
155 in relation to Section 170 of Republic Act No. 8293 or the Intellectual Property
Code. The accusatory portion of the Information reads:
That sometime in September 25, 1998 and prior thereto at Sta.
Cruz, Manila and within the jurisdiction of this Honorable Court, the
above-named accused did then and there, knowingly, maliciously,
unlawfully and feloniously engage in the distribution, sale, [and]

offering for sale of counterfeit Marlboro cigarettes which had caused
confusion, deceiving the public that such cigarettes [were] Marlboro
cigarettes and those of the Telengtan Brothers and Sons, Inc., doing
business under the style of La Suerte Cigar and Cigarettes Factory, the
exclusive manufacturer of Marlboro Cigarette in the Philippines and that
of Philip Morris Products, Inc. (PMP7) the registered owner and
proprietor of the MARLBORO trademark together with the devices,
including the famous-Root Device, to their damage and prejudice,
without the accused seeking their permit or authority to manufacture and
distribute the same.[3]
On August 1, 2000, Judge Rebecca G. Salvador of RTC Manila, Branch 1,

issued a warrant of arrest against Gemma, but lifted[4] and set aside[5] the same
after Gemmavoluntarily surrendered on August 4, 2000, and filed a cash bond
for 12,000.00.
Gemma pleaded not guilty to the charge upon arraignment on October 17,
2000. After the pre-trial conference on February 13, 2001,[7] trial on the merits
ensued.
[6]
The prosecution called to the witness stand the following: Roger Sherman
Slagle, the Director of Operations of Philip Morris Malaysia, and Philip Morris
Philippines, Inc.s (PMPI) product/brand security expert, to testify that according
to his examination, the products they seized at the subject premises were
counterfeit cigarettes;[8] as well as Jesse Lara, who, as then Senior Investigator III
at the Intellectual Property Rights (IPR) Unit of the Economic Intelligence and
Investigation Bureau (EIIB), Department of Finance, led the investigating team, to
testify on the events that led to the arrest of Gemma.[9] The prosecution also
presented the billing accountant of Quasha Ancheta Pea & Nolasco Law Office
(Quasha Law Office), Juliet Flores, to show that PMPI, being one of Quasha Law
Offices clients, paid the amount of $4,069.12 for legal services rendered. [10] The
last witness for the prosecution was Atty. Alonzo Q. Ancheta, a senior law partner
at Quasha Law Office, who testified that as the duly appointed Attorney-in-Fact of
PMPI, he was in charge of the EIIB search operation in the subject premises. Atty.
Ancheta said that while he was not personally present during the implementation
of the search warrant, he sent Atty. Leonardo Salvador, who constantly reported the
developments to him.[11]
The facts, as succinctly summarized by the Court of Appeals, are as follows:
On September 10, 1998, Jesse S. Lara, then Senior Investigator III
at the Intellectual Property Rights (IPR) Unit of the Economic
Intelligence and Investigation Bureau (EIIB), Department of Finance,
received reliable information that counterfeit Marlboro cigarettes were
being distributed and sold by two (2) Chinese nationals, Johnny Sia and
Jessie Concepcion, in the areas of Tondo, Binondo, Sta. Cruz and
Quiapo, Manila. A mission team formed by EIIB, including Lara,
conducted surveillance operation to verify the report. EIIB agents
Leonardo Villanueva and Jigo Madrigal did a test-buy on the
different sari-sari stores of Manila located in Quiapo, Tondo, Sta. Cruz
and Blumentritt areas and took samples of Marlboro cigarettes sold
therein. During the surveillance, the container van delivering the
Marlboro packed in black plastic bags was seen parked at 1677
Bulacan corner Hizon Streets, Sta. Cruz, Manila [(the subject
premises)]. Upon inquiry from the Barangay Chairman, they also
learned that the place is owned by a certain Mr. Jackson Ong.
The EIIB team coordinated with officers of Philip Morris, Inc.,
owner of the trademark Marlboro Label in the Philippines duly
registered with the Philippine Patents Office and subsequently with the
Intellectual Property Office (IPO) since 1956. Initial examination made
by Philip Morris, Inc. on those random sample purchases revealed that
the cigarettes were indeed fake products unauthorized by the
company. With official indorsement by the EIIB, Senior Investigator
Lara filed an application for search warrant before the Regional Trial
Court of Dasmarias, Cavite, Branch 90.
On September 24, 1998, Executive Judge Dolores L. Espaol
issued a search warrant after finding probable cause to believe that Mr.
Jackson Ong has in his possession/control in the premises located at
1675-1677 Bulacan St. cor. M. Hizon St., Sta. Cruz, Manila, the
following properties:
Substantial number of fake locally made and imported
fake cigarettes bearing the Marlboro brand, together with
the corresponding labels, cartons, boxes and other

packaging as well as receipts, invoices and other
documents relative to the purchase, sale, and distribution of
the aforesaid fake Marlboro cigarettes.
On September 25, 1998, the EIIB team led by Senior Investigator
Lara implemented the search warrant, together with SPO2 Rommel P.
Sese of the Western Police District (WPD) as representative of the
Philippine National Police (PNP), Barangay Chairman Ernesto Traje, Sr.,
Barangay Kagawad Vivian V. Rallonza and Atty. Leonardo P. Salvador
who was sent by [Quasha Pea & Nolasco Law Office,] the law firm
engaged by Philip Morris, Inc. They proceeded to the subject premises
but Jackson Ong, the alleged owner, was not there. It was accused, who
is supposedly either the spouse or common-law wife of Jackson Ong,
who entertained them. At first, accused refused to allow them entry into
the premises but eventually the team was able to search the premises and
found Marlboro cigarettes stocked in several boxes containing fifty (50)
reams inside each box which were packed in black plastic sacks like in
balikbayan boxes. The Inventory and Certification In the Conduct
of Search were duly accomplished and signed by the members of the
EIIB and the other representatives present during the actual search
(SPO2 Sese, Jess Lara, Traje, Sr., Henry Mariano, Isidro Burgos and
Atty. Salvador). Accused signed her name in the said documents as
Gemma Ong, as the Owner/Representative, while a certain employee,
Girlie Cantillo, also signed as witness.
On September 28, 1998, a Return of Search Warrant was
submitted by the EIIB to the issuing court stating that the articles seized
pursuant to the warrant were stored in the premises of the EIIB and
requesting that EIIB be granted temporary custody of the goods. Acting
on the Urgent Motion To Transfer Custody of Confiscated Articles filed
by Philip Morris Products, Inc. (PMPI) of Virginia, U.S.A., Executive
Judge Dolores L. Espaol ordered the custody of the seized goods
transferred from EIIB to PMPI c/o Quasha Ancheta Pea and Nolasco
Law Office, the Attorney-in-Fact of PMPI. Judge Espaol subsequently
also issued an order dated October 15, 1998 authorizing PMPI to secure
and take out samples of the unauthorized products from the confiscated
cartons/boxes of Marlboro cigarettes which are stored at Four Winds
Phils. Inc. warehouse located at No. 2241 Pasong Tamo Extension,
Makati City under the direct and personal control and supervision of
Sheriff IV Tomas C. Azurin. PMPI had earlier sought such order from
the court for the purpose of laboratory analysis and scientific testing of
the samples from the confiscated cigarettes.
On the basis of the results of the examination conducted by PMPI
on the samples obtained from the confiscated boxes of cigarettes bearing
the Marlboro brand, which confirmed the same to be unauthorized
products and not genuine Marlboro cigarettes, the EIIB filed a case for
Violation of Sections 155 and 168 in relation to Section 170 of Republic
Act No. 8293 against Jackson Ong who is not an authorized distributor
of Marlboro products in the Philippines.[12]
After the prosecution rested its case, the defense filed a Demurrer to
Evidence,[13] which the RTC denied on March 26, 2003.[14] The defense moved for
a reconsideration of this order but the same was denied on April 22, 2003.[15]
Gemma, as the lone witness for the defense, then took the witness
stand. She said that she is married to Co Yok Piao, a Chinese national, but she still
uses her maiden name Catacutan.[16] She denied that she is the Gemma Ong
accused in this case. She testified that she was arrested on August 4, 2000, without
the arresting officers asking for her name. She said that when she pleaded to be
released, she was instructed to post a cash bond, which she did in the amount
of 12,000.00. Gemma averred that when she posted her bond and signed her
certificate of arraignment, she did so under her real name Maria Teresa Gemma
Catacutan, as opposed to the signatures in the Inventory and Certification in the
Conduct of Search (search documents), which she denied signing. She claimed
that she was not able to bring up her defense of mistaken identity early on as she
did not know when the proper time to raise it was. She avowed that she was not
interrogated by the police prior to her arrest, despite the two-year gap between it
and the search of the subject premises. She alleged that she did not know Jackson
Ong and that the prosecution witnesses, whom she first saw during her trial,
couldnt even point to her as the person present during the raid when they testified
in court. Gemma further asseverated that while she could not remember where she
was on September 25, 1998, she was sure that she was not at the subject premises
on that date. Gemma presented her Identification Card issued by the Professional
Regulation Commission (PRC) to show that she is a dentist by profession, although
she claimed that she is a businessperson in practice. She said that she used to buy
and sell gear fabrics, t-shirts, truck materials, and real estate[17] under the business
name Fascinate Trading based in Bulacan Street, Sta. Cruz, Manila, but that it
had ceased operations in February 1998.[18] Gemma denied ever having engaged in
the manufacture and sale of any kind of cigarettes and claimed that she could not
even distinguish between a fake and a genuine Marlboro cigarette.[19]
On September 30, 2003, the RTC convicted Gemma of the crime as
charged. The dispositive portion of its Decision reads:
Accordingly, this Court finds accused Gemma Catacutan guilty
beyond reasonable doubt of violation of Section 155 in relation to
Section 170 of Republic Act No. 8293 and hereby sentences her to suffer
the penalty of imprisonment of two (2) years and to pay a fine of Fifty
Thousand (50,000.00) Pesos.
Accused is further directed to indemnify private complainant the
sum of US$4,069.12 or its peso equivalent, as actual damages.
The records of the case as against Jackson Ong is hereby ordered
archived pending his arrest.
With costs against accused Gemma Catacutan.[20]
In resolving the case, the RTC narrowed down the issue to whether Gemma
Catacutan was the same accused identified as Gemma Ong. The RTC answered
this in the affirmative as it found Gemmas defense of mistaken identity as
untenable, especially since she claimed to be a professional. The RTC explained:
Ranged against the positive and forthright declaration of the
prosecution witnesses, the mere uncorroborated and self-serving denials
of the accused cannot stand. (People vs. Hortaleza, 258 SCRA 201)
We note in disbelief that it was only in the hearing of November
26, 2001, that accused[s] former lawyer manifested that accused is
known as Gemma Catacutan never as Gemma Ong (tsn, November 26,
2001, p. 3) and as admitted by her, she never revealed her true identity
when arrested, when she posted her bail bond and even during her
arraignment.
She could have protested at the time of her arrest that they were
arresting the wrong person but this she did not do. She proceeded to
post a bond for her provisional liberty, hired a lawyer to defend her but
failed to divulge the very information that could have led to an early
dismissal of the case, if true.
Her pretensions of ignorance as to the proper stage of when to
explain (tsn, May 26, 2003), p. 13 can hardly be given credit. A dentist
by profession, it is utterly incredible that she remained meek all throughout her arrest and the posting of her bail bond.[21]
The RTC also unfurled the fact that while Gemma claimed to have never
engaged in the sale and manufacture of Marlboro cigarettes, the address of her
business Fascinate Trading is registered as 1677 Bulacan Street, Sta. Cruz,
Manila, the same property raided by the EIIB that contained the counterfeit
cigarettes.[22]
Aggrieved, Gemma appealed the RTCs decision to the Court of Appeals
based on the following grounds:
I
THE LOWER COURT GRIEVOUSLY ERRED IN
CONVICTING DR. MARIA TERESA GEMMA CATACUTAN
GUILTY OF THE CRIME OF VIOLATION OF THE INTELLECTUAL
PROPERTY RIGHTS LAW DESPITE UTTER LACK OF EVIDENCE.
II
THE LOWER COURT IN CONVICTING DR. MARIA
TERESA GEMMA CATACUTAN ON THE BASIS OF SURMISE (sic),
CONJECTURES AND GUESSWORK COMMITTED GRAVE
VIOLENCE AGAINST THE CONSTITUTIONAL PRESUMPTION
OF INNOCENCE.
III
THE LOWER COURT COMMITTED SERIOUS REVERSIBLE
ERROR IN CONVICTING THE ACCUSED-APPELLANT WHO HAD

NOT BEEN POSITIVELY IDENTIFIED AND PINPOINTED AS
MANUFACTURER NOR (sic) DISTRIBUTOR OF FAKE
MARLBORO PRODUCT.
IV
THE LOWER COURT COMMITTED SERIOUS REVERSIBLE
ERROR IN NOT GIVING THE SLIGHTEST CREDENCE TO THE
UNCONTRADICTED, UNREFUTED AND CANDID TESTIMONY
OF THE ACCUSED-APPELLANT, BUT INSTEAD, CONVICTED
HER ON [T]HE BASIS OF EXTRAPOLATED EVIDENCE NOT
BORNE BY THE RECORDS.
V
THE LOWER COURT COMMITTED A GRAVE REVERSIBLE
ERROR IN CONVICTING ACCUSED-APPELLANT DESPITE THE
UTTER AND PATHETIC LACK OF EVIDENCE TO SUSTAIN THE
PROSECUTIONS LAME, SHALLOW AND UNCONFOUNDED
THEORY OF GUILT.[23]
The Court of Appeals found Gemmas appeal to be unmeritorious. It said

that Gemma was positively identified by the prosecution witnesses as the woman
who entertained them during the search of the subject premises on September 25,
1998, and the woman who signed the Certification in the Conduct of Search and
Inventory. The Court of Appeals agreed with the RTCs rejection of Gemmas
defense of mistaken identity, as she should have raised it at the earliest opportunity,
which was at the time of her arrest, the posting of her bail bond, or during her
arraignment. The Court of Appeals held that the amendment of the prosecution
witnesses affidavits was explained during the hearing, and although the original
affidavits were the ones marked during the pre-trial, the amended ones provided
the basis for the filing of the Information against Gemma and her co-accused
Jackson Ong. The Court of Appeals also noted that the March 20, 2000 Resolution
of the State Prosecutor specifically mentioned that the search warrant was served
on Gemma Ong. The Court of Appeals then proclaimed that in the hierarchy of
evidence, the testimony of the witness in court commands greater weight than his
written affidavit.[24]
The Court of Appeals affirmed the conviction of Gemma for trademark

infringement under Section 155 of Republic Act No. 8293, as the counterfeit goods
seized by the EIIB were not only found in her possession and control, but also in
the building registered under her business, Fascinate Trading. The Court of
Appeals said that the prosecution had satisfactorily proven Gemmas commission
of the offense since the unauthorized use of the trademark Marlboro, owned by
PMPI, was clearly intended to deceive the public as to the origin of the cigarettes
being distributed and sold, or intended to be distributed and sold. The Court of
Appeals further sustained the penalty and damages imposed by the RTC for being
in accord with the law and facts.[25]
Gemma is now before this Court with the following assignment of errors:
A.
THE COURT OF APPEALS ERRED IN GIVING CREDENCE TO
THE
TESTIMONIES
OF
PROSECUTION
WITNESSES
IDENTIFYING PETITIONER AS PRESENT AT THE TIME AND
PLACE WHEN THE SEARCH AND SEIZURE TOOK PLACE.
B.
THE COURT OF APPEALS ERRED IN GIVING CREDENCE TO
THE TESTIMONIES OF PROSECUTION WITNESSES THAT THEY
SAW PETITIONER SIGN HER NAME AS GEMMA ONG AS
OWNER/CLAIMANT/REPRESENTATIVE (OF THE ARTICLES
SEIZED) ON THE SEARCH WARRANT (EXH. A),
CERTIFICATION IN THE CONDUCT OF SEARCH (EXH. B) AND
INVENTORY OF THE S[E]IZED ARTICLES AT THE TIME OF THE
SEARCH (EXH. D).
C.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT
PETITIONERS SIGNATURE IN EXHIBITS A, B AND C ARE
NOT HERS BUT WERE FORGED, BEING COMPLETELY AND
PATENTLY DISSIMILAR TO HER TRUE AND REAL SIGNATURE
AS SHOWN IN HER OFFICIAL I.D AS PROFESSIONAL DENTIST.
D.
THE COURT OF APPEALS ERRED IN CONCLUDING THAT THE
AFFIDAVITS OF THE PROSECUTION WITNESSES WHICH DID
NOT MENTION PETITIONERS PRESENCE AT THE TIME AND
PLACE OF THE SEARCH CANNOT TAKE PRECEDENCE OVER
THEIR CONTRARY TESTIMONIES IN COURT THAT SHE WAS
PRESENT AND IN FACT THE OCCUPANT AND OWNER OF THE
PREMISES FROM WHICH SHE INITIALLY BLOCKED THEIR
ENTRY INTO.
E.
THE COURT OF APPEALS ERRED IN CONCLUDING THAT
[PETITIONER] WAS THE VERY SAME PERSON WHO WAS
CAUGHT IN POSSESSION AND CONTROL OF THE PREMISES
WHERE THE COUNTERFEIT ARTICLES WERE SEIZED BECAUSE
SHE ALLEGEDLY NEVER PROTESTED BEING WRONGFULLY
ACCUSED AT THE TIME OF HER ARREST ON 4 AUGUST 2000,
WHEN SHE POSTED HER CASH BOND AND WHEN SHE EVEN
SIGNED HER NAME AS MA. TERESA GEMMA CATACUTAN IN
THE WAIVER, UNDERTAKING AND CERTIFICATE OR
ARRAIGNMENT, ALL IN THE NAME OF THE ACCUSED AS
GEMMA ONG, a.k.a. MA. THERESA CATACUTAN.
F.
THE COURT OF APPEALS ERRED IN NOT ACQUITTING
[PETITIONER] FOR FAILURE OF THE PROSECUTION TO PROVE
THE GUILT OF THE ACCUSED-APPELLANT BEYOND
REASONABLE DOUBT.[26]
Gemma argues that if it were true that she was in the subject premises when
it was raided on September 25, 1998, then her name and presence would have been
mentioned in the respective affidavits of Slagle and Atty. Ancheta; and the EIIB
agents who conducted the search would have confronted, investigated, or arrested
her. Gemma insists that the fact that her name was only mentioned for the first
time in the amended affidavits yields to the conclusion that she was not in the
subject premises when it was searched and that the testimonies of the prosecution
witnesses were perjured.[27]

Gemma further claims that the courts below were wrong in finding that she
never protested that she was mistakenly identified. She claims that she was
arrested without the benefit of a preliminary investigation and all she wanted to do
at that point was to get out [of] the clutches of overzealous and eager beaver
policemen who were exuberant in arresting an innocent party like[28] her. Gemma
also explains that her non-protest during her arraignment was upon the advice of
her former lawyer, who said that he would correct it in the proper time during the
trial.
Respondent People of the Philippines, in its comment,[29] avers that there are
only two issues to be resolved in this case, to wit:
1. THE INSTANT PETITION IS FATALLY DEFECTIVE AS IT
RAISES QUESTIONS OF FACT WHICH ARE NOT PROPER
FOR REVIEW UNDER RULE 45 OF THE REVISED RULES
OF COURT.
2. THE COURT OF APPEALS DID NOT ERR IN AFFIRMING
PETITIONERS CONVICTION FOR VIOLATION OF
SECTION 155 IN RELATION TO SECTION 170 OF R.A. 8293
(INTELLECTUAL
PROPERTY
CODE
OF
THE
PHILIPPINES).[30]
Respondent claims that a perusal of the issues in Gemmas petition readily

discloses that only questions of fact have been raised, which are not reviewable in
an appeal bycertiorari.[31] Respondent asseverates that Gemmas conviction was
warranted as the prosecution had sufficiently established her presence during the
search of the subject premises where she signed the search documents as Gemma
Ong. Moreover, the respondent avers, Gemma failed to timely protest her arrest
and raise her claim that she is not Gemma Ong.[32]
Issues
A study of the pleadings filed before this Court shows that the only issues to
be resolved are the following:

1. Whether or not accused-appellants petition for review
on certiorari under Rule 45 of the Rules of Court is fatally defective as it
raises questions of fact; and
2. Whether or not Gemmas guilt was proven beyond reasonable doubt in
light of her alleged mistaken identity.
This Courts Ruling
Procedural Issue
As this case reached this Court via Rule 45 of the Rules of Court, the basic
rule is that factual questions are beyond the province of this Court, because only
questions of law may be raised in a petition for review.[33] However, in exceptional
cases, this Court has taken cognizance of questions of fact in order to resolve legal
issues, such as when there was palpable error or a grave misapprehension of facts
by the lower court.[34] In Armed Forces of the Philippines Mutual Benefit
Association, Inc. v. Court of Appeals,[35]we said that although submission of issues
of fact in an appeal by certiorari taken to this Court is ordinarily proscribed, this
Court nonetheless retains the option in the exercise of its sound discretion, taking
into account the attendant circumstances, either to decide the case or refer it to the
proper court for determination.[36] Since the determination of the identity of
Gemma is the very issue affecting her guilt or innocence, this Court chooses to
take cognizance of this case in the interest of proper administration of justice.
Gemma is guilty of violating
Section 155 in relation to Section 170 of
Republic Act No. 8293
Gemma was charged and convicted of violating Section 155 in relation to
Section 170 of Republic Act No. 8293, or the 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 (50,000) to Two hundred thousand pesos
(200,000), 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.) (Emphases
supplied.)
A mark is any visible sign capable of distinguishing the goods (trademark)

or services (service mark) of an enterprise and shall include a stamped or marked
container of goods.[37]
In McDonalds Corporation and McGeorge Food Industries, Inc. v. L.C. Big
Mak Burger, Inc.,[38] this Court held:
To establish trademark infringement, the following elements must
be shown: (1) the validity of plaintiffs mark; (2) the plaintiffs
ownership of the mark; and (3) the use of the mark or its colorable
imitation by the alleged infringer results in likelihood of
confusion. Of these, it is the element of likelihood of confusion that is
the gravamen of trademark infringement.
A mark is valid if it is distinctive and not barred from registration. Once

registered, not only the marks validity, but also the registrants ownership of the
mark is prima facie presumed.[39]
The prosecution was able to establish that the trademark Marlboro was not
only valid for being neither generic nor descriptive, it was also exclusively owned
by PMPI, as evidenced by the certificates of registration issued by the Intellectual
Property Office of the Department of Trade and Industry.[40]
Anent the element of confusion, both the RTC and the Court of Appeals
have correctly held that the counterfeit cigarettes seized from Gemmas possession
were intended to confuse and deceive the public as to the origin of the cigarettes
intended to be sold, as they not only bore PMPIs mark, but they were also
packaged almost exactly as PMPIs products.[41]
Regarding the Claim
Mistaken Identity
of
Despite all these findings, Gemma has posited only a single defense, from
the RTC all the way up to this Court: that she is not the Gemma Ong named and
accused in this case. She bases this claim on the alleged discrepancies in the
prosecution witnesses original affidavits vis--vis the amended ones, which
discrepancies, according to her, strongly suggest her innocence.
This Court has time and again held that between an affidavit executed
outside the court, and a testimony given in open court, the latter almost always
prevails.
Discrepancies between a sworn statement and testimony in court
do not outrightly justify the acquittal of an accused. Such discrepancies
do not necessarily discredit the witness since ex parte affidavits are often
incomplete. They do not purport to contain a complete compendium of

the details of the event narrated by the affiant. Thus, our rulings
generally consider sworn statements taken out of court to be inferior to
in court testimony. x x x.[42]
A reading of the original affidavits[43] executed by Slagle and Atty. Ancheta,

readily reveals that they concentrated on the facts and events leading up to the
search and seizure of the contraband materials from the subject premises. They not
only failed to mention Gemma Ongs presence there, but they also failed to
mention the other witnesses names and presence there as well. Although this
might appear to be a mistake on the part of a known and established law firm like
the Quasha Law Office, the firm immediately sought to rectify this by having the
affidavits of Slagle, Atty. Ancheta, and Lara amended.
If it were true that Gemma was not at the subject premises at all on
September 25, 1998, then she should have grabbed every chance to correct this
notion and expose this mistake before she was arrested. She could have brought up
her defense of mistaken identity or absence at the raid in the preliminary
investigation conducted prior to the issuance of her warrant of arrest; but instead,
she chose to ignore her subpoena and disregard the preliminary
investigation. Even then, Gemma had the opportunity to raise the fact that she was
not Gemma Ong; not only during her arrest, but also during the posting of the cash
bond for her bail, and more importantly, during her arraignment, when she was
asked if she understood the charges against her. Gemma also knew that the
Information was filed against her on the basis of the amended affidavits, thus, she
could have filed a motion to quash the information before she entered her plea, or
asked that a reinvestigation be conducted. However, all these Gemma failed to
do. We agree with the RTC that it is highly unlikely that a person of her stature
and educational attainment would be so meek and timid that she failed to protest
against her being wrongly identified, accused, arrested, and potentially
imprisoned. If what she says were true, she would not have agreed to post bail or
to be arraigned without at the very least, bringing up the fact that she was not the
Gemma Ong the police officers were looking for. In addition, her own lawyer,
Atty. Maglinao, brought up the fact that she was not Gemma Ong, only for the
purpose of correcting the Information, and not to contest it, to wit:
WITNESS ROGER SHERMAN SLAGLE UNDER THE SAME OATH

FOR CONTINUATION OF DIRECT EXAMINATION BY:
ATTY. ERESE:
With the kind permission of the hon. court.
COURT:
Proceed.
ATTY. MAGLINAO:
I would just want to be on record that my
client, Gemma Catacutan has never been known
as Gemma Ong because her real name is Gemma
Catacutan.
COURT:
Do you have any objection to the amendment

of the information?
ATTY. MAGLINAO:
No, your Honor. May we request to correct
the information from Gemma Ong to Gemma
Catacutan.[44]
Gemma further accuses the prosecution witnesses of falsely testifying and of

perjuring themselves just so they can satisfy a big client like PMPI by showing that
somebody had been arrested for counterfeiting its cigarettes. The
crimes Gemma is imputing on these witnesses are serious crimes, and in the
absence of concrete and convincing evidence, this Court could not believe her
mere allegations that imply that these people would destroy someones life just so
they can please a client, more so over mere cigarettes. InPrincipio v. Hon.
Barrientos,[45] we said:
Bad faith is never presumed while good faith is always presumed and the
chapter on Human Relations of the Civil Code directs every person, inter
alia, to observe good faith, which springs from the fountain of good
conscience. Therefore, he who claims bad faith must prove it. For one
to be in bad faith, the same must be evident. x x x.[46]
The prosecution witnesses, contrary to Gemmas claim, had positively

identified her as the person who initially refused the search team entrance, then
later acquiesced to the search operations. Slagle explained that even though he
mentioned Gemma only in his amended affidavit, he was sure that she was at the
subject premises on the day that they searched it:
Testimony of Roger Sherman Slagle
ATTY. MAGLINAO:
Q
In this amended affidavit you mentioned the

name, Gemma Catacutan as one of the accused?
Yes sir.
Can you tell the court how you were able to

include the name of Gemma Catacutan in your
amended affidavit, when in fact it did not appear
in the first affidavit?
When we arrived she was there and she was

very nervous and upset.
xxxx
It is very clear to me when I arrived there that she

was somehow involved.[47] (Emphases ours.)
Lara on the other hand, even pointed to her and thus positively identified her
to be the one who had signed the search documents,[48] as the owner of the subject
premises, to wit:
Testimony of Jesse Lara
ATTY. FREZ
Q
Mr. Witness, do you know this person who wrote

the name Gemma Ong?
Yes, sir, Gemma Ong is the owner of the

premises when we served the search warrant and
also, she was the one who refused us to gain entry
during the service of the search warrant.
Were you able to gain entry at the premises?
Yes, sir.
So, as regard to the person whom you identify

as the one who refused you to gain entry, would
you be able to identify this person?
Yes, sir, that lady in pink is Mrs. Gemma Ong.

(As witness is pointing to the accused Gemma
Ong).
Mr. Witness, why do you say that the person

whom you pointed to us is the one who wrote the
name Mrs. Gemma Ong?
WITNESS
Because when we served the search warrant she
signed it in our presence and that is her own
signature.
xxxx
ATTY. FREZ
Q
:
So, Mr. Witness, in this Inventory, we made some

markings during the pre-trial conference and I see
here above the signature (Owner/Representative),
there exist a handwritten name which reads
GEMMA ONG and above it, there exist a signature,
are you familiar with this person which appears to be
Gemma Ong?
Yes, sir, Gemma Ong signed that in my
presence.
Your Honor, during the pre-trial conference, it was

previously marked as Exhibit D-1. Mr. Witness, I
also see here a Verification but there also exist an
entry
below
the
name
and
I
quote
Owner/Claimant/Representative, there appears a
handwritten name Gemma Ong and a signature
above it, are you familiar with this person which
appears to be Gemma Ong?
Yes, sir, Gemma

my presence.
Ong
signed
that
in
xxxx
Q
Mr. Witness, in this document which is the

certification in the Conduct of Search and I have
here above the entry (Owner/Representative), a
handwritten name which reads Gemma Ong and
there exist a signature above the handwritten name,
can you identify the signature?
Yes, sir, this was signed by Gemma Ong in my

presence.[49] (Emphases ours.)
Lara further attested to the fact that the search warrant was served on
Gemma, who later on entertained the search team:
ATTY. FREZ
Mr. Witness, the person to whom you served the
search warrant is identified as Mrs. Gemma Ong, do
you know her relationship with the accused Jackson
Ong?
ATTY. FERNANDEZ
Objection, your honor, the witness would be
incompetent . . .
COURT
May answer.
(The stenographer read back the question).
WITNESS
I am not familiar with the relationship of Mrs.
Gemma Ong with Jackson Ong because during the
service of the search warrant, Mrs. Gemma Ong was
there together with two employees and when I asked
where was Jackson Ong, she was the one who
entertained us.
ATTY. FREZ
So, the search warrant was served against Gemma
Ong?
WITNESS
Yes, Sir.[50]
Positive identification of a culprit is of great weight in determining whether

an accused is guilty or not.[51] Gemma, in claiming the defense of mistaken
identity, is in reality denying her involvement in the crime. This Court has held
that the defense of denial is insipid and weak as it is easy to fabricate and difficult
to prove; thus, it cannot take precedence over the positive testimony of the
offended party.[52] The defense of denial is unavailing when placed astride the
undisputed fact that there was positive identification of the accused.[53]
While Gemma claims she does not know Jackson Ong, the subject premises
where the counterfeit cigarettes were seized was registered under her admitted
business Fascinate Trading.[54] Aside from the bare allegation that she had
stopped operations in the subject premises as early as February 1998, she has
neither proven nor shown any evidence that she had relinquished control of the
building after that date. Gemmas allegation that she did not sign the search
documents, and that the signatures therein did not match the signature on her PRC
identification card, must also be struck down as she has not shown proof that her
PRC signature is the only way she has ever signed her name. She could have, at the
very least, gotten a handwriting expert to testify on her behalf that there is no way
that the signatures in the search documents and the signature on her PRC
identification card could have been written by one and the same person; instead,
she relied on the flimsy contention that the two signatures were, on their face,
different.
Gemmas defense consists of her claim of mistaken identity, her denial of
her involvement in the crime, and her accusation against the prosecution witnesses
of allegedly giving false testimonies and committing perjury. These are all weak,
unproven, and unfounded claims, and will not stand against the strong evidence
against her.
WHEREFORE, this
Court DENIES the
Petition. The
2005 Decision of
the
Court
of
Appeals
in CA-G.R.
28308 is AFFIRMED.
June
CR
16,
No.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
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.
DECISION
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 Decision1 dated July 2, 2010, and Resolution2 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 PlantMalabon, 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. 2005055 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
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 xSection 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.12Petitioners, 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.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 188526
November 11, 2013
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.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari which seeks to reverse and set aside the
Decision1 dated March 31, 2009 of the Court of Appeals in CA-G.R. CV No. 88952 and the
Resolution2 dated July 2, 2009, which denied reconsideration thereof. The CA reversed the
Order3 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 05043, and the Order4 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 letter7addressed 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 affidavit8 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
Certification9 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 affidavit10 corroborating Agent Furing's statement. Ping's affidavit11 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 Quash13 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/Opposition14 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 Submission15 in relation to the Motion to Quash attaching an Order16 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 Order18 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 Order22 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, 05043.23
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. 0554747 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
While
Sec. 168. Unfair Competition, Rights, Regulation and Remedies.
xxxx
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."26And 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. 4-1996109957 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. 4-2000009881 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 complainantappellants 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 Order33 dated September 15, 2005. In fact, a Certificate of Finality34 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. In fact, prior to the
applications for the issuance of the assailed search warrants on November 21, 2005, the IPO had
issued an Order35 dated October 20, 2005 granting a writ of preliminary injunction against Yu and
Cua, the dispositive portion of which reads:
1avv phi 1
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 nonapplicability 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. 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.41WHEREFORE, 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. CVNo.
88952, are hereby AFFIRMED.SO ORDERED.
1wphi1
SECOND DIVISION
COCA-COLA BOTTLERS,
PHILS., INC. (CCBPI), Naga Plant,
Petitioner,
G.R. No. 154491

Present:
*
- versus
QUISUMBING, J., Chairperson,

CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.
QUINTIN J. GOMEZ, a.k.a.

KIT GOMEZ and DANILO E.
GALICIA,
a.k.a.
DANNYGALICIA,
Respondents.
Promulgated:
November 14, 2008
x -------------------------------------------------------------------------------------------x
DECISION
BRION, J.:
Is the hoarding of a competitors product containers punishable as unfair
competition under the Intellectual Property Code (IP Code, Republic Act No.
8293) that would entitle the aggrieved party to a search warrant against the
hoarder? This is the issue we grapple with in this petition for review
on certiorari involving two rival multinational softdrink giants; petitioner CocaCola Bottlers, Phils., Inc. (Coca-Cola) accuses Pepsi Cola Products Phils., Inc.
(Pepsi), represented by the respondents, of hoarding empty Coke bottles in bad
faith to discredit its business and to sabotage its operation in Bicolandia.
BACKGROUND
The facts, as culled from the records, are summarized below.
On July 2, 2001, Coca-Cola applied for a search warrant against Pepsi for
hoarding Coke empty bottles in Pepsis yard in Concepcion Grande, Naga City, an
act allegedly penalized as unfair competition under the IP Code. Coca-Cola

claimed that the bottles must be confiscated to preclude their illegal use,
destruction or concealment by the respondents.[1] In support of the application,
Coca-Cola submitted the sworn statements of three witnesses: Naga plant
representative Arnel John Ponce said he was informed that one of their plant
security guards had gained access into the Pepsi compound and had seen empty
Coke bottles; acting plant security officer Ylano A. Regaspi said he investigated
reports that Pepsi was hoarding large quantities of Coke bottles by requesting their
security guard to enter the Pepsi plant and he was informed by the security guard
that Pepsi hoarded several Coke bottles; security guard Edwin Lirio stated that he
entered Pepsis yard on July 2, 2001 at 4 p.m. and saw empty Coke bottles inside
Pepsi shells or cases.[2]
Municipal Trial Court (MTC) Executive Judge Julian C. Ocampo of Naga
City, after taking the joint deposition of the witnesses, issued Search Warrant No.
2001-01[3] to seize 2,500 Litro and 3,000 eight and 12 ounces empty Coke bottles
at Pepsis Naga yard for violation of Section 168.3 (c) of the IP Code. [4] The local
police seized and brought to the MTCs custody 2,464 Litro and 4,036 eight and 12
ounces empty Coke bottles, 205 Pepsi shells for Litro, and 168 Pepsi shells for
smaller (eight and 12 ounces) empty Coke bottles, and later filed with the Office of
the City Prosecutor of Naga a complaint against two Pepsi officers for violation of
Section 168.3 (c) in relation to Section 170 of the IP Code. [5] The named
respondents, also the respondents in this petition, were Pepsi regional sales
manager Danilo E. Galicia (Galicia) and its Naga general managerQuintin J.
Gomez, Jr. (Gomez).
In their counter-affidavits, Galicia and Gomez claimed that the bottles came
from various Pepsi retailers and wholesalers who included them in their return to
make up for shortages of empty Pepsi bottles; they had no way of ascertaining
beforehand the return of empty Coke bottles as they simply received what had
been delivered; the presence of the bottles in their yard was not intentional nor
deliberate; Ponce and Regaspis statements are hearsay as they had no personal
knowledge of the alleged crime; there is no mention in the IP Code of the crime of
possession of empty bottles; and that the ambiguity of the law, which has a penal
nature, must be construed strictly against the State and liberally in their
favor. Pepsi security guards Eduardo E. Miral and Rene Acebuche executed a joint
affidavit stating that per their logbook, Lirio did not visit or enter the plant
premises in the afternoon of July 2, 2001.
The respondents also filed motions for the return of their shells and to quash
the search warrant. They contended that no probable cause existed to justify the
issuance of the search warrant; the facts charged do not constitute an offense; and
their Naga plant was in urgent need of the shells.
Coca-Cola opposed the motions as the shells were part of the evidence of the
crime, arguing that Pepsi used the shells in hoarding the bottles. It insisted that the
issuance of warrant was based on probable cause for unfair competition under the
IP Code, and that the respondents violated R.A. 623, the law regulating the use of
stamped or marked bottles, boxes, and other similar containers.
THE MTC RULINGS
On September 19, 2001, the MTC issued the first assailed order[6] denying
the twin motions. It explained there was an exhaustive examination of the
applicant and its witnesses through searching questions and that the Pepsi shells
are prima facie evidence that the bottles were placed there by the respondents.
In their motion for reconsideration, the respondents argued for the quashal of
the warrant as the MTC did not conduct a probing and exhaustive examination; the
applicant and its witnesses had no personal knowledge of facts surrounding the
hoarding; the court failed to order the return of the borrowed shells; there was no
crime involved; the warrant was issued based on hearsay evidence; and the seizure
of the shells was illegal because they were not included in the warrant.
On November 14, 2001, the MTC denied the motion for reconsideration in
the second assailed order,[7] explaining that the issue of whether there was unfair
competition can only be resolved during trial.
The respondents responded by filing a petition for certiorari under Rule 65
of the Revised Rules of Court before the Regional Trial Court (RTC)
of Naga City on the ground that the subject search warrant was issued
without probable cause and that the empty shells were neither mentioned in the
warrant nor the objects of the perceived crime.
THE RTC RULINGS

On May 8, 2002, the RTC voided the warrant for lack of probable cause and
the non-commission of the crime of unfair competition, even as it implied that
other laws may have been violated by the respondents. The RTC, though, found
no grave abuse of discretion on the part of the issuing MTC judge.[8] Thus,
Accordingly, as prayed for, Search Warrant No. 2001-02 issued
by the Honorable Judge Julian C. Ocampo III on July 2, 2001 is
ANNULLED and SET ASIDE. The Orders issued by the Pairing Judge
of Br. 1, MTCC of Naga City dated September 19, 2001 and November
14, 2001 are also declared VOID and SET ASIDE. The City Prosecutor
of Naga City and SPO1 Ernesto Paredes are directed to return to the
Petitioner the properties seized by virtue of Search Warrant No. 200102. No costs.
SO ORDERED.[9]
In a motion for reconsideration, which the RTC denied on July 12, 2002, the
petitioner stressed that the decision of the RTC was contradictory because it
absolved Judge Ocampo of grave abuse of discretion in issuing the search warrant,
but at the same time nullified the issued warrant. The MTC should have dismissed
the petition when it found out that Judge Ocampo did not commit any grave abuse
of discretion.
Bypassing the Court of Appeals, the petitioner asks us through this petition
for review on certiorari under Rule 45 of the Rules of Court to reverse the decision
of the RTC. Essentially, the petition raises questions against the RTCs
nullification of the warrant when it found no grave abuse of discretion committed
by the issuing judge.
THE PETITION and

THE PARTIES POSITIONS
In its petition, the petitioner insists the RTC should have dismissed the
respondents petition for certiorari because it found no grave abuse of discretion by
the MTC in issuing the search warrant. The petitioner further argues that the IP
Code was enacted into law to remedy various forms of unfair competition
accompanying globalization as well as to replace the inutile provision of unfair
competition under Article 189 of the Revised Penal Code. Section 168.3(c) of the
IP Code does not limit the scope of protection on the particular acts enumerated as
it expands the meaning of unfair competition to include other acts contrary to
good faith of a nature calculated to discredit the goods, business or services of
another. The inherent element of unfair competition is fraud or deceit, and that
hoarding of large quantities of a competitors empty bottles is necessarily
characterized by bad faith. It claims that its Bicol bottling operation was
prejudiced by the respondents hoarding and destruction of its empty bottles.
The petitioner also argues that the quashal of the search warrant was
improper because it complied with all the essential requisites of a valid
warrant. The empty bottles were concealed in Pepsi shells to prevent discovery
while they were systematically being destroyed to hamper the petitioners bottling
operation and to undermine the capability of its bottling operations in Bicol.
The respondents counter-argue that although Judge Ocampo conducted his
own examination, he gravely erred and abused his discretion when he ignored the
rule on the need of sufficient evidence to establish probable cause; satisfactory and
convincing evidence is essential to hold them guilty of unfair competition; the
hoarding of empty Coke bottles did not cause actual or probable deception and
confusion on the part of the general public; the alleged criminal acts do not show
conduct aimed at deceiving the public; there was no attempt to use the empty
bottles or pass them off as the respondents goods.
The respondents also argue that the IP Code does not criminalize bottle
hoarding, as the acts penalized must always involve fraud and deceit. The
hoarding does not make them liable for unfair competition as there was no
deception or fraud on the end-users.
THE ISSUE
Based on the parties positions, the basic issue submitted to us for resolution
is whether the Naga MTC was correct in issuing Search Warrant No. 2001-01 for
the seizure of the empty Coke bottles from Pepsis yard for probable violation of
Section 168.3 (c) of the IP Code. This basic issue involves two sub-issues, namely,
the substantive issue of whether the application for search warrant effectively
charged an offense, i.e., a violation of Section 168.3 (c) of the IP Code; and the
procedural issue of whether the MTC observed the procedures required by the
Rules of Court in the issuance of search warrants.
OUR RULING
We resolve to deny the petition for lack of merit.
We clarify at the outset that while we agree with the RTC decision, our
agreement is more in the result than in the reasons that supported it. The decision
is correct in nullifying the search warrant because it was issued on an
invalid substantive basis the acts imputed on the respondents do not
violate Section 168.3 (c) of the IP Code. For this reason, we deny the present
petition.
The issuance of a search warrant[10] against a personal property[11] is
governed by Rule 126 of the Revised Rules of Court whose relevant sections state:
Section 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.
Section 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.
Section 6.
Issuance and form of search warrant. If the
judge is satisfied of the existence of facts upon which the application is
based or that there is probable cause to believe that they exist, he shall
issue the warrant, which must be substantially in the form prescribed by
these Rules. [Emphasis supplied]
To paraphrase this rule, a search warrant may be issued only if there is

probable cause in connection with a specific offense alleged in an application
based on the personal knowledge of the applicant and his or her witnesses. This is
the substantive requirement in the issuance of a search warrant. Procedurally, the
determination of probable cause is a personal task of the judge before whom the
application for search warrant is filed, as he has to examine under oath or
affirmation the applicant and his or her witnesses in the form of searching
questions and answers in writing and under oath. The warrant, if issued, must
particularly describe the place to be searched and the things to be seized.
We paraphrase these requirements to stress that they have substantive and
procedural aspects. Apparently, the RTC recognized this dual nature of the
requirements and, hence, treated them separately; it approved of the way the MTC
handled the procedural aspects of the issuance of the search warrant but found its
action on the substantive aspect wanting. It therefore resolved to nullify the
warrant, without however expressly declaring that the MTC gravely abused its
discretion when it issued the warrant applied for. The RTCs error, however, is in
the form rather than the substance of the decision as the nullification of the issued
warrant for the reason the RTC gave was equivalent to the declaration that grave
abuse of discretion was committed. In fact, we so rule as the discussions below
will show.
Jurisprudence teaches us that probable cause, as a condition for the issuance
of a search warrant, is such reasons supported by facts and circumstances as will
warrant a cautious man in the belief that his action and the means taken in
prosecuting it are legally just and proper. Probable cause requires facts and
circumstances that would lead a reasonably prudent man to believe that an offense
has been committed and the objects sought in connection with that offense are in
the place to be searched.[12] Implicit in this statement is the recognition that an
underlying offense must, in the first place, exist. In other words, the acts alleged,
taken together, must constitute an offense and that these acts are imputable to an
offender in relation with whom a search warrant is applied for.
In the context of the present case, the question is whether the act charged
alleged to be hoarding of empty Coke bottles constitutes an offense under
Section 168.3 (c) of the IP Code. Section 168 in its entirety states:
SECTION 168. Unfair Competition, Rights, Regulation and
Remedies.
168.1. A person who has identified in the mind of the public the
goods he manufactures or deals in, his business or services from those of
others, whether or not a registered mark is employed, has a property
right in the goodwill of the said goods, business or services so identified,
which will be protected in the same manner as other property rights.
168.2. Any person who shall employ deception or any other
means contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or services
for those of the one having established such goodwill, or who shall
commit any acts calculated to produce said result, shall be guilty of
unfair competition, and shall be subject to an action therefor.
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;
(b)
Any person who by any artifice, or device, or who employs any
other means calculated to induce the false belief that such person is
offering the services of another who has identified such services in the
mind of the public; or
(c)
Any person who shall make any false statement in the course of
trade or who shall commit any other act contrary to good faith of a
nature calculated to discredit the goods, business or services of another.
168.4. The remedies provided by Sections 156, 157 and 161 shall
apply mutatis mutandis. (Sec. 29, R.A. No. 166a)
The petitioner theorizes that the above section does not limit the scope of
protection on the particular acts enumerated as it expands the meaning of unfair
competition to include other acts contrary to good faith of a nature calculated to
discredit the goods, business or services of another. Allegedly, the respondents
hoarding of Coca Cola empty bottles is one such act.
We do not agree with the petitioners expansive interpretation of Section
168.3 (c).
Unfair competition, previously defined in Philippine jurisprudence in
relation with R.A. No. 166 and Articles 188 and 189 of the Revised Penal Code, is
now covered by Section 168 of the IP Code as this Code has expressly repealed
R.A. No. 165 and R.A. No. 166, and Articles 188 and 189 of the Revised Penal
Code.
Articles 168.1 and 168.2, as quoted above, provide the concept and general
rule on the definition of unfair competition. The law does not thereby cover every
unfair act committed in the course of business; it covers only acts characterized by
deception or any other means contrary to good faith in the passing off of goods
and services as those of another who has established goodwill in relation with these
goods or services, or any other act calculated to produce the same result.
What unfair competition is, is further particularized under Section 168.3
when it provides specifics of what unfair competition is without in any way
limiting the scope of protection against unfair competition. Part of these
particulars is provided under Section 168.3(c) which provides the general catchall phrase that the petitioner cites. Under this phrase, a person shall be guilty of
unfair competition who shall commit any other act contrary to good faith of a
nature calculated to discredit the goods, business or services of another.
From jurisprudence, unfair competition has been defined as the passing off
(or palming off) or attempting to pass off upon the public the goods or business of
one person as the goods or business of another with the end and probable effect of
deceiving the public. It formulated the true test of unfair competition: whether
the acts of defendant are such as are calculated to deceive the ordinary buyer
making his purchases under the ordinary conditions which prevail in the particular
trade to which the controversy relates.[13] One of the essential requisites in an
action to restrain unfair competition is proof of fraud; the intent to deceive must be
shown before the right to recover can exist.[14] The advent of the IP Code has not
significantly changed these rulings as they are fully in accord with what Section
168 of the Code in its entirety provides. Deception, passing off andfraud upon the
public are still the key elements that must be present for unfair competition to
exist.
The act alleged to violate the petitioners rights under Section 168.3 (c) is
hoarding which we gather to be the collection of the petitioners empty bottles so
that they can be withdrawn from circulation and thus impede the circulation of the
petitioners bottled products. This, according to the petitioner, is an act contrary to
good faith a conclusion that, if true, is indeed an unfair act on the part of the
respondents. The critical question, however, is not the intrinsic unfairness of the
act of hoarding; what is critical for purposes of Section 168.3 (c) is to determine if
the hoarding, as charged, is of a nature calculated to discredit the goods, business
or services of the petitioner.
We hold that it is not. Hoarding as defined by the petitioner is not even an

act within the contemplation of the IP Code.
The petitioners cited basis is a provision of the IP Code, a set of rules that
refer to a very specific subject intellectual property. Aside from the IP Codes
actual substantive contents (which relate specifically to patents, licensing,
trademarks, trade names, service marks, copyrights, and the protection and
infringement of the intellectual properties that these protective measures embody),
the coverage and intent of the Code is expressly reflected in its Declaration of
State Policy which states:
Section 2. Declaration of State Policy. The State recognizes
that an effective intellectual and industrial property system is vital to the
development of domestic and creative activity, facilitates transfer of
technology, attracts foreign investments, and ensures market access for
our products. It shall protect and secure the exclusive rights of scientists,
inventors, artists and other gifted citizens to their intellectual property
and creations, particularly when beneficial to the people, for such
periods as provided in this Act.
The use of intellectual property bears a social function. To this
end, the State shall promote the diffusion of knowledge and information
for the promotion of national development and progress and the common
good.
It is also the policy of the State to streamline administrative
procedures of registering patents, trademarks and copyright, to liberalize
the registration on the transfer of technology, and to enhance the
enforcement of intellectual property rights in the Philippines. (n)
Intellectual property rights have furthermore been defined under Section 4 of the
Code to consist of: a) Copyright and Related Rights; b) Trademarks and Service
Marks; c) Geographic Indications; d) IndustrialDesigns; e) Patents; f) LayoutDesigns (Topographies) of Integrated Circuits; and g)Protection of Undisclosed
Information.
Given the IP Codes specific focus, a first test that should be made when a
question arises on whether a matter is covered by the Code is to ask if it refers to
an intellectual property as defined in the Code. If it does not, then coverage by the
Code may be negated.
A second test, if a disputed matter does not expressly refer to an intellectual
property right as defined above, is whether it falls under the general unfair
competition concept and definition under Sections 168.1 and 168.2 of the
Code. The question then is whether there is deception or any other similar act in
passing off of goods or services to be those of another who enjoys established
goodwill.
Separately from these tests is the application of the principles of statutory
construction giving particular attention, not so much to the focus of the IP Code
generally, but to the terms of Section 168 in particular. Under the principle
of noscitur a sociis, when a particular word or phrase is ambiguous in itself or
is equally susceptible of various meanings, its correct construction may be made
clear and specific by considering the company of words in which it is found or
with which it is associated.[15]
As basis for this interpretative analysis, we note that Section 168.1 speaks of
a person who has earned goodwill with respect to his goods and services and who
is entitled to protection under the Code, with or without a registered mark. Section
168.2, as previously discussed, refers to the general definition of unfair
competition. Section 168.3, on the other hand, refers to the specific instances of
unfair competition, with Section 168.1 referring to the sale of goods given the
appearance of the goods of another; Section 168.2, to the inducement of belief that
his or her goods or services are that of another who has earned goodwill; while the
disputed Section 168.3 being a catch all clause whose coverage the parties now
dispute.
Under all the above approaches, we conclude that the hoarding - as
defined and charged by the petitioner does not fall within the coverage of the IP
Code and of Section 168 in particular. It does not relate to any patent, trademark,
trade name or service mark that the respondents have invaded, intruded into or
used without proper authority from the petitioner. Nor are the respondents alleged
to be fraudulently passing off their products or services as those of the petitioner.
The respondents are not also alleged to be undertaking any representation or
misrepresentation that would confuse or tend to confuse the goods of the petitioner
with those of the respondents, or vice versa. What in fact the petitioner alleges is
an act foreign to the Code, to the concepts it embodies and to the acts it regulates;
as alleged, hoarding inflicts unfairness by seeking to limit the oppositions sales by
depriving it of the bottles it can use for these sales.
In this light, hoarding for purposes of destruction is closer to what another
law - R.A. No. 623 covers, to wit:
SECTION 1. Persons engaged or licensed to engage in the
manufacture, bottling or selling of soda water, mineral or aerated waters,
cider, milk, cream, or other lawful beverages in bottles, boxes, casks,
kegs, or barrels, and other similar containers, with their names or the
names of their principals or products, or other marks of ownership
stamped or marked thereon, may register with the Philippine Patent
Office a description of the names or are used by them, under the same
conditions, rules, and regulations, made applicable by law or regulation
to the issuance of trademarks.
SECTION 2. It shall be unlawful for any person, without the
written consent of the manufacturer, bottler or seller who has
successfully registered the marks of ownership in accordance with the
provisions of the next preceding section, to fill such bottles, boxes, kegs,
barrels, or other similar containers so marked or stamped, for the
purpose of sale, or to sell, dispose of, buy, or traffic in, or wantonly
destroy the same, whether filled or not, or to use the same for drinking
vessels or glasses or for any other purpose than that registered by the
manufacturer, bottler or seller. Any violation of this section shall be
punished by a fine or not more than one hundred pesos or imprisonment
of not more than thirty days or both.
As its coverage is defined under Section 1, the Act appears to be a measure

that may overlap or be affected by the provisions of Part II of the IP Code on The
Law on Trademarks, Service Marks and Trade Names. What is certain is that the
IP Code has not expressly repealed this Act. The Act appears, too, to have specific
reference to a special type of registrants the manufacturers, bottlers or sellers of
soda water, mineral or aerated waters, cider, milk, cream, or other lawful beverages
in bottles, boxes, casks, kegs, or barrels, and other similar containers who are
given special protection with respect to the containers they use. In this sense, it is
in fact a law of specific coverage and application, compared with the general terms
and application of the IP Code. Thus, under its Section 2, it speaks specifically of
unlawful use of containers and even of the unlawfulness of their wanton
destruction a matter that escapes the IP Codes generalities unless linked with the
concepts of deception and passing off as discussed above.
Unfortunately, the Act is not the law in issue in the present case and one that
the parties did not consider at all in the search warrant application. The petitioner
in fact could not have cited it in its search warrant application since the one
specific offense that the law allows and which the petitioner used was Section
168.3 (c). If it serves any purpose at all in our discussions, it is to show that the
underlying factual situation of the present case is in fact covered by another law,
not by the IP Code that the petitioner cites. Viewed in this light, the lack of
probable cause to support the disputed search warrant at once becomes apparent.
Where, as in this case, the imputed acts do not violate the cited offense, the
ruling of this Court penned by Mr. Justice Bellosillo is particularly instructive:
In the issuance of search warrants, the Rules of Court requires a
finding of probable cause in connection with one specific offense to be
determined personally by the judge after examination of the complainant
and the witnesses he may produce, and particularly describing the place
to be searched and the things to be seized. Hence, since there is no
crime to speak of, the search warrant does not even begin to fulfill
these stringent requirements and is therefore defective on its
face. The nullity of the warrant renders moot and academic the other
issues raised in petitioners Motion to Quash and Motion for
Reconsideration. Since the assailed search warrant is null and void, all
property seized by virtue thereof should be returned to petitioners in
accordance with established jurisprudence.[16]
Based on the foregoing, we conclude that the RTC correctly ruled that the
petitioners search warrant should properly be quashed for the petitioners failure
to show that the acts imputed to the respondents do not violate the cited
offense. There could not have been any probable cause to support the issuance of a
search warrant because no crime in the first place was effectively charged. This
conclusion renders unnecessary any further discussion on whether the search
warrant application properly alleged that the imputed act of holding Coke empties
was in fact a hoarding in bad faith aimed to prejudice the petitioners operations,
or whether the MTC duly complied with the procedural requirements for the
issuance of a search warrant under Rule 126 of the Rules of Court.
WHEREFORE, we hereby DENY the petition for lack of
merit. Accordingly, we confirm that Search Warrant No. 2001-01, issued by the
Municipal Trial Court, Branch 1, Naga City, is NULL and VOID. Costs against
the petitioner.
SO ORDERED.

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THIRD DIVISION

WILLIAM C. YAO, SR.,

G.R. No. 168306

THE PEOPLE OF THE

Compressor and Liquified Petroleum Gas (LPG) Refilling Machine.[6]

I confirmed that MASAGANA is not authorized to use

Copies of the photographs of the delivery trucks, LPG cylinders and

Machinery and/or equipment being used or intended to be used

Bulk/Bullet LPG storage tanks;

Sales invoices, ledgers, journals, official receipts, purchase

Delivery truck bearing Plate Nos. WTE-527, XAM-970 and

Under Search Warrant No. 3-2003:

Machinery and/or equipment being used or intended to be used

Bulk/Bullet LPG storage tanks;

LPG hydraulic pump/s;

Sales invoices, ledgers, journals, official receipts, purchase

Delivery trucks bearing Plate Nos. UMN-971, PEZ-612 and

Thirty-eight (38) filled 11 kg. LPG cylinders, bearing

Thirty-nine (39) empty 11 kg. LPG cylinders, bearing

Eight (8) filled 50 kg. LPG cylinders, bearing

the tradename of Pilipinas Shell Petroleum Corporation and the

One (1) set of motor compressor for filling system.

Six (6) filled 11 kg. LPG cylinders without seal,

One (1) set of motor compressor for filling system; and

One (1) set of LPG refilling machine.

There is no probable cause for the issuance of the search

Applicant NBI Agent Ritchie N. Oblanca and his

witness Bernabe C. Alajar do not have any authority to

The place to be searched was not specified in the Search

The search warrant is characterized as a general warrant

On 30 April 2003, MASAGANA, as third party claimant, filed with the

Based on the foregoing, this Court finds no reason to disturb the

Petitioners filed a Motion for Reconsideration[21] of the Decision of the

THE HONORABLE COURT OF APPEALS ERRED IN RULING

ask probing questions on the distinguishing marks of SHELLANE and GASUL;

Section 4 of Rule 126 of the Revised Rules on Criminal Procedure, provides

According to the foregoing provisions, a search warrant can be issued only

connection with the offense are in the place to be searched.[26]

As can be gleaned in Section 155.1, mere unauthorized use of a container

advertising of goods or services which is likely to cause confusion, mistake or

Certified true copy of the Certificate of Registration No. 44046

Certified true copy of the Certificate of Registration No. 41789

Certified true copy of the Certificate of Registration No. 37525

Certified true copy of the Certificate of Registration No. R-2813

Certified true copy of the Certificate of Registration No. 31443

Certified true copy of the Certificate of Registration No. 57945

Certified true copy of the Certificate of Registration No. C-147

Certified true copy of the Certificate of Registration No. 61920

Certified true copy of the Articles of Incorporation of Masagana;

Certified true copy of the By-laws of Masagana;

Certified true copy of the latest General Information Sheet

Pictures of delivery trucks coming in and out of Masagana while

Cash Invoice No. 56210 dated 13 February 2003 issued

Pictures of the Shellane and Gasul LPGs covered by Cash

Cash Invoice No. 56398 dated 27 February 2003 issued

Pictures of the Shellane and Gasul LPGs covered by Cash

Extant from the foregoing testimonial, documentary and object evidence is

facts which needed to be established for a finding of probable cause, it is not

The searching questions propounded to the applicant and the witnesses

The fact that Oblanca is a member of the Anti-Organized Crime Division

While it is true that the property to be seized under a warrant must be

Republic of the Philippines

G.R. No. 169440