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.

Section 170. Penalties. - Independent of the civil and administrative sanctions imposed by law, a
criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (P50,000) to Two hundred thousand pesos(P200,000), shall be imposed on any
person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 and
Subsection 169.1. (Arts. 188 and 189, Revised Penal Code)

Article 178: Using fictitious name and concealing true name

ELEMENTS (USING FICTITIOUS NAME):

1. That the offender uses a name other than his real name.

2. That he uses that fictitious name publicly.

3. That the purpose of the offender is –

a. to conceal a crime;

b. to evade the execution of a judgment; or

c. to cause damage to public interest.

ELEMENTS (CONCEALING TRUE NAME):

1. That the offender conceals –

a. his true name; and

b. all other personal circumstances.

2. That the purpose is only to conceal his identity.

Article 178: Using fictitious name and concealing true name

The penalty of arresto mayor and a fine not to exceed 500 pesos shall be imposed upon any person
who shall publicly use a fictitious name for the purpose of concealing a crime, evading the execution
of a judgment, or causing damage.

Any person who conceals his true name and other personal circumstances shall be punished by
arresto menor or a fine not to exceed 200 pesos. (Restored by E.O. No. 187)

COMMONWEALTH ACT NO. 142 (ANTI-ALIAS LAW), REGULATING THE USE OF ALIASES, WAS
AMENDED BY REPUBLIC ACT NO. 6085.

ACT PUNISHABLE:

Using any name different from the one with which a person was registered at birth in the office of the
local civil registry, or with which he was baptized for the first time, or, in case of an alien, with which
he was registered in the bureau of immigration upon entry; or such substitute name as may have
been authorized by a competent court.

THE INSTANCES WHEN A SECOND NAME CAN BE USED BY AN INDIVIDUAL WITHOUT INFRINGING
UPON THE LAW:

DISTINCTION BETWEEN USE OF FICTITIOUS NAME AND CONCEALING TRUE NAME:

1. In use of fictitious name, the element of publicity must be present; in concealing true name and
other personal circumstances, that element is not necessary.

2. The purpose in use of fictitious name is any of those three enumerated (to conceal a crime, to
evade the execution of a judgment, or to cause damage); in concealing true name, it is merely to
conceal identity.

ACT PUNISHABLE:

Using any name different from the one with which a person was registered at birth in the office of the
local civil registry, or with which he was baptized for the first time, or, in case of an alien, with which
he was registered in the bureau of immigration upon entry; or such substitute name as may have
been authorized by a competent court.
1. As a pseudonym solely for literary, cinema, television, radio, or other entertainment purposes, and
in athletic events where the use of pseudonym is a normally accepted practice;

2. When the use of the second name or alias is judicially authorized and duly recorded in the proper
local civil registry;

3. The use of a fictitious name or a different name belonging to a single person in a single instance
without any sign or indication that the user intends to be known by this name in addition to his real
name from that day forth.

FAST FACTS:

If the purpose of using a fictitious name is for causing damage, it must be damage to public interest. If
it is damage to private interest, the crime will be estafa under Article 315, subdivision 2, paragraph
(a).

The purpose of the Anti-Alias Law is to prevent confusion and fraud in business transactions.

The penalty provided by the Anti-Alias Law for violation of the terms thereof is imprisonment from
one to five years and a fine of P5,000.00 to P10,000.00.

Any person not legally provided to obtain judicial authority for a change of name or use of an alias will
be liable.

The prescriptive period of Anti-Alias Law is eight (8) years.

Q: Will the use of another name in a particular instance constitute use of an alias?

A: The use of a fictitious name or a different name belonging to another person in a single instance
without any sign or indication that the user intends to be known by this name in addition to his real
name from that day forth does not fall within the prohibition contained in C.A. No. 142 as amended.

FICTITIOUS NAME:

- any other name which a person publicly applies to himself without authority of law. (U.S. v. To Lee
Piu, 35 Phil. 4)

ALIAS:

- a name or names used by a person or intended to be used by him publicly and habitually, usually in
business transactions in addition to his real name by which he is registered at birth or baptized the
first tie or substitute name authorized by a competent authority. (Cesario Ursua vs. Court of Appeals,
G.R. No. 112170. April 10, 1996)

///

“Iqbal’s alleged use of aliases violates law — solon,” states the caption of a news article, referring to
the allegation of Davao City Representative Carlo Nogales that the use of an alias by MILF Spokesman
Mohagher Iqbal, apparently not his real name, in official documents “violates the Revised Penal Code
and the Anti-Alias law which prohibit the use of pseudonyms in public documents.” It might be helpful
to have a summary of the laws the penalize the use of aliases.
What is an alias?

An alias is a name or names used by a person or intended to be used by him publicly and habitually
usually in business transactions in addition to his real name by which he is registered at birth or
baptized the first time or substitute name authorized by a competent authority. A man’s name is
simply the sound or sounds by which he is commonly designated by his fellows and by which they
distinguish him but sometimes a man is known by several different names and these are known as
aliases.

What is the objective of the law?

The objective and purpose of Commonwealth Act No. 142 (An Act to Regulate the Use of Aliases, full
text below), according to the Supreme Court, have their origin and basis in Act No. 3883 (“An Act to
Regulate the Use in Business Transactions of Names other than True Names, Prescribing the Duties of
the Director of the Bureau of Commerce And Industry in its Enforcement, Providing Penalties for
Violations thereof, and for other purposes,”), amended by Act No. 4147. This law was made primarily
to curb the common practice among the Chinese of adopting scores of different names and aliases
which created tremendous confusion in the field of trade. Such a practice almost bordered on the
crime of using fictitious names which for obvious reasons could not be successfully maintained
against the Chinese who, rightly or wrongly, claimed they possessed a thousand and one names. CA.
No. 142 thus penalized the act of using an alias name, unless such alias was duly authorized by proper
judicial proceedings and recorded in the civil register.

Is the use of an alias automatically penalized?

Under C.A. 142, the use of a fictitious name or a different name belonging to another person in a
single instance without any sign or indication that the user intends to be known by this name in
addition to his real name from that day forth does not fall within the prohibition.

What are the relevant laws on false names?

We point to the summary of these laws, contained in President Gloria Macapagal-Arroyo’s Executive
Order No. 306 (Instituting Measures to Promote Lawful Use of Government-Issued Identity
Documents and Prevent Violations of Laws Involving False Names and Identities):

(a) the Anti-Money Laundering Act of 2002 (Republic Act [RA] No. 9160, as amended), which requires
banks and other covered institutions to established and record the true identity of their clients based
on official documents;

(b) the Revised Penal Code (Act of 3815, as amended) which penalizes the public use of a fictitious
name for the purpose of concealing a crime, evading the execution of a judgment, or causing of
damage (1st paragraph, Art 178), the concealment of a person’s true name and other personal
circumstances (2nd paragraph, Art. 178), and the Act of defrauding another by using a fictitious name
(4th paragraph, Art. 315);

(c) the Civil Code of the Philippines (RA No. 386, as amended), which prohibits the use of different
names and surnames, except for pen and stage names (Art. 379 and 380);

(d) the Philippine Immigration Act of 1940 (Commonwealth Act No. 613 as amended), which penalizes
any individual who shall be evade the immigration laws by appearing under an assumed or fictitious
name (Sec. 45);

(e) the Tax Reform Act of 1997 (RA8424), as amended, which made it unlawful for any person to enter
any false or fictitious name in a taxpayer’s books of accounts or records;

(f) Presidential Decree No. 1829, which penalizes any individual who shall knowingly or willfully
obstruct, impede, frustrate or delay the apprehension of suspects and the investigation and
prosecution of criminal cases by publicly using a fictitious name for the purpose of concealing a crime
evading prosecution or the execution of a judgment, or concealing his true name and other personal
circumstances for the same purpose (Sec. 1[d]); and

(g) Commonwealth Act No. 142, as amended by RA No. 6085, which penalizes any person who shall
use any name different from the one with which he was registered at birth in the office of the local
civil registry, or with which he was baptized for the first time, or with which he was registered in the
Bureau of Immigration, or such substitute name as may have been authorized by a competent court
(Sec. 1);

Rep. Nograles speaks of two laws — the Revised Penal Code and the “anti-alias law.” Both provisions
carry the penalty of imprisonment. The pertinent provision of the Revised Penal Code is Article 178,
which reads:

Art. 178. Using fictitious name and concealing true name. — The penalty of arresto mayor and a fine
not to exceed 500 pesos shall be imposed upon any person who shall publicly use a fictitious name for
the purpose of concealing a crime, evading the execution of a judgment or causing damage.

Any person who conceals his true name and other personal circumstances shall be punished by
arresto menor or a fine not to exceed 200 pesos.

The “anti-alias law,” on the other hand, is Commonwealth Act No. 142 (An Act to Regulate the Use of
Aliases), as amended by Republic Act No. 6085, which provides:
Sec. 1. Except as a pseudonym solely for literary, cinema, television, radio or other entertainment
purposes and in athletic events where the use of pseudonym is a normally accepted practice, no
person shall use any name different from the one with which he was registered at birth in the office
of the local civil registry, or with which he was baptized for the first time, or, in case of an alien, with
which he was registered in the bureau of immigration upon entry; or such substitute name as may
have been authorized by a competent court: Provided, That persons, whose births have not been
registered in any local civil registry and who have not been baptized, have one year from the approval
of this act within which to register their names in the civil registry of their residence. The name shall
comprise the patronymic name and one or two surnames.

Sec. 2. Any person desiring to use an alias shall apply for authority therefor in proceedings like those
legally provided to obtain judicial authority for a change of name, and no person shall be allowed to
secure such judicial authority for more than one alias. The petition for an alias shall set forth the
person’s baptismal and family name and the name recorded in the civil registry, if different, his
immigrant’s name, if an alien, and his pseudonym, if he has such names other than his original or real
name, specifying the reason or reasons for the use of the desired alias. The judicial authority for the
use of alias the Christian name and the alien immigrant’s name shall be recorded in the proper local
civil registry, and no person shall use any name or names other, than his original or real name unless
the same is or are duly recorded in the proper local civil registry.

Sec. 3. No person having been baptized with a name different from that with which he was registered
at birth in the local civil registry, or in case of an alien, registered in the bureau of immigration upon
entry, or any person who obtained judicial authority to use an alias, or who uses a pseudonym, shall
represent himself in any public or private transaction or shall sign or execute any public or private
document without stating or affixing his real or original name and all names or aliases or pseudonym
he is or may have been authorized to use.

Sec. 4. Six months from the approval of this act and subject to the provisions of section 1 hereof, all
persons who have used any name and/or names and alias or aliases different from those authorized
in section one of this act and duly recorded in the local civil registry, shall be prohibited to use such
other name or names and/or alias or aliases.

Sec. 5. Any violation of this Act shall be punished with imprisonment of from one year to five years
and a fine of P5,000 to P10,000.

Source: Ursua vs. Court of Appeals (G.R. No. 112170, 10 April 1996.

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Unfair competition jurisprudence

The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No. 8293.
Specifically, Section 155 of R.A. No. 8293 states:

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.15

The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to cause
confusion. In determining similarity and likelihood of confusion, jurisprudence has developed tests
the Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the similarity of
the prevalent or dominant features of the competing trademarks that might cause confusion, mistake,
and deception in the mind of the purchasing public. Duplication or imitation is not necessary; neither
is it required that the mark sought to be registered suggests an effort to imitate. Given more
consideration are the aural and visual impressions created by the marks on the buyers of goods,
giving little weight to factors like prices, quality, sales outlets, and market segments.16

In contrast, the Holistic or Totality Test necessitates a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in determining confusing similarity. The
discerning eye of the observer must focus not only on the predominant words, but also on the other
features appearing on both labels so that the observer may draw conclusion on whether one is
confusingly similar to the other.17

Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2)
types of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent
purchaser would be induced to purchase one product in the belief that he was purchasing the other;
and (2) confusion of business (source or origin confusion), where, although the goods of the parties
are different, the product, the mark of which registration is applied for by one party, is such as might
reasonably be assumed to originate with the registrant of an earlier product, and the public would
then be deceived either into that belief or into the belief that there is some connection between the
two parties, though inexistent.18
Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S" by
respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the
IPO. While it is undisputed that petitioner’s stylized "S" is within an oval design, to this Court’s mind,
the dominant feature of the trademark is the stylized "S," as it is precisely the stylized "S" which
catches the eye of the purchaser. Thus, even if respondent did not use an oval design, the mere fact
that it used the same stylized "S", the same being the dominant feature of petitioner’s trademark,
already constitutes infringement under the Dominancy Test.

This Court cannot agree with the observation of the CA that the use of the letter "S" could hardly be
considered as highly identifiable to the products of petitioner alone. The CA even supported its
conclusion by stating that the letter "S" has been used in so many existing trademarks, the most
popular of which is the trademark "S" enclosed by an inverted triangle, which the CA says is
identifiable to Superman. Such reasoning, however, misses the entire point, which is that respondent
had used a stylized "S," which is the same stylized "S" which petitioner has a registered trademark for.
The letter "S" used in the Superman logo, on the other hand, has a block-like tip on the upper portion
and a round elongated tip on the lower portion. Accordingly, the comparison made by the CA of the
letter "S" used in the Superman trademark with petitioner’s stylized "S" is not appropriate to the case
at bar.

Furthermore, respondent did not simply use the letter "S," but it appears to this Court that based on
the font and the size of the lettering, the stylized "S" utilized by respondent is the very same stylized
"S" used by petitioner; a stylized "S" which is unique and distinguishes petitioner’s trademark.
Indubitably, the likelihood of confusion is present as purchasers will associate the respondent’s use of
the stylized "S" as having been authorized by petitioner or that respondent’s product is connected
with petitioner’s business.

Both the RTC and the CA applied the Holistic Test in ruling that respondent had not infringed
petitioner’s trademark. For its part, the RTC noted the following supposed dissimilarities between the
shoes, to wit:

1. The mark "S" found in Strong Shoes is not enclosed in an "oval design."

2. The word "Strong" is conspicuously placed at the backside and insoles.

3. The hang tags and labels attached to the shoes bears the word "Strong" for respondent and
"Skechers U.S.A." for private complainant;

4. Strong shoes are modestly priced compared to the costs of Skechers Shoes.19

While there may be dissimilarities between the appearances of the shoes, to this Court’s mind such
dissimilarities do not outweigh the stark and blatant similarities in their general features. As can be
readily observed by simply comparing petitioner’s Energy20 model and respondent’s Strong21 rubber
shoes, respondent also used the color scheme of blue, white and gray utilized by petitioner. Even the
design and "wavelike" pattern of the midsole and outer sole of respondent’s shoes are very similar to
petitioner’s shoes, if not exact patterns thereof. At the side of the midsole near the heel of both shoes
are two elongated designs in practically the same location. Even the outer soles of both shoes have
the same number of ridges, five at the back and six in front. On the side of respondent’s shoes, near
the upper part, appears the stylized "S," placed in the exact location as that of the stylized "S" on
petitioner’s shoes. On top of the "tongue" of both shoes appears the stylized "S" in practically the
same location and size. Moreover, at the back of petitioner’s shoes, near the heel counter, appears
"Skechers Sport Trail" written in white lettering. However, on respondent’s shoes appears "Strong
Sport Trail" noticeably written in the same white lettering, font size, direction and orientation as that
of petitioner’s shoes. On top of the heel collar of petitioner’s shoes are two grayish-white
semi-transparent circles. Not surprisingly, respondent’s shoes also have two grayish-white
semi-transparent circles in the exact same location.lihpwa1

Based on the foregoing, this Court is at a loss as to how the RTC and the CA, in applying the holistic
test, ruled that there was no colorable imitation, when it cannot be any more clear and apparent to
this Court that there is colorable imitation. The dissimilarities between the shoes are too trifling and
frivolous that it is indubitable that respondent’s products will cause confusion and mistake in the eyes
of the public. Respondent’s shoes may not be an exact replica of petitioner’s shoes, but the features
and overall design are so similar and alike that confusion is highly likely.1avvphi1

In Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., Inc.,22 this Court, in a case for unfair
competition, had opined that even if not all the details are identical, as long as the general
appearance of the two products are such that any ordinary purchaser would be deceived, the imitator
should be liable, to wit:

From said examination, We find the shoes manufactured by defendants to contain, as found by the
trial court, practically all the features of those of the plaintiff Converse Rubber Corporation and
manufactured, sold or marketed by plaintiff Edwardson Manufacturing Corporation, except for their
respective brands, of course. We fully agree with the trial court that "the respective designs, shapes,
the colors of the ankle patches, the bands, the toe patch and the soles of the two products are exactly
the same ... (such that) at a distance of a few meters, it is impossible to distinguish "Custombuilt"
from "Chuck Taylor." These elements are more than sufficient to serve as basis for a charge of unfair
competition. Even if not all the details just mentioned were identical, with the general appearances
alone of the two products, any ordinary, or even perhaps even a not too perceptive and
discriminating customer could be deceived, and, therefore, Custombuilt could easily be passed off for
Chuck Taylor. Jurisprudence supports the view that under such circumstances, the imitator must be
held liable. x x x23

Neither can the difference in price be a complete defense in trademark infringement. In McDonald’s
Corporation v. L.C. Big Mak Burger. Inc.,24 this Court held:

Modern law recognizes that the protection to which the owner of a trademark is entitled is not
limited to guarding his goods or business from actual market competition with identical or similar
products of the parties, but extends to all cases in which the use by a junior appropriator of a
trade-mark or trade-name is likely to lead to a confusion of source, as where prospective purchasers
would be misled into thinking that the complaining party has extended his business into the field (see
148 ALR 56 et seq; 53 Am. Jur. 576) or is in any way connected with the activities of the infringer; or
when it forestalls the normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576,
577). x x x25

Indeed, the registered trademark owner may use its mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market.26 The purchasing public might be mistaken in thinking
that petitioner had ventured into a lower market segment such that it is not inconceivable for the
public to think that Strong or Strong Sport Trail might be associated or connected with petitioner’s
brand, which scenario is plausible especially since both petitioner and respondent manufacture
rubber shoes.

Withal, the protection of trademarks as intellectual property is intended not only to preserve the
goodwill and reputation of the business established on the goods bearing the mark through actual use
over a period of time, but also to safeguard the public as consumers against confusion on these
goods.27 While respondent’s shoes contain some dissimilarities with petitioner’s shoes, this Court
cannot close its eye to the fact that for all intents and purpose, respondent had deliberately
attempted to copy petitioner’s mark and overall design and features of the shoes. Let it be
remembered, that defendants in cases of infringement do not normally copy but only make colorable
changes.28 The most successful form of copying is to employ enough points of similarity to confuse
the public, with enough points of difference to confuse the courts.29 (G.R. No. 164321
March 23, 2011 SKECHERS, U.S.A., INC vs INTER PACIFIC INDUSTRIAL TRADING CORP)

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With that settled, we now come to the issue of whether or not petitioner committed acts amounting
tounfair competition under Article 28 of the Civil Code.

We find the petition bereft of merit.

Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or industrial
enterprises or in labor through the use of force, intimidation, deceit, machination or any other unjust,
oppressive or high-handed method shall give rise to a right of action by the person who thereby
suffers damage."

From the foregoing, it is clear thatwhat is being sought to be prevented is not competitionper sebut
the use of unjust, oppressive or high- handed methods which may deprive others of a fair chance to
engage in business or to earn a living. Plainly,what the law prohibits is unfair competition and not
competition where the means usedare fair and legitimate.
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must involve an
injury to a competitor or trade rival, and (2) it must involve acts which are characterized as "contrary
to good conscience," or "shocking to judicial sensibilities," or otherwise unlawful; in the language of
our law, these include force, intimidation, deceit, machination or any other unjust, oppressive or
high-handed method. The public injury or interest is a minor factor; the essence of the matter
appears to be a private wrong perpetrated by unconscionable means.9

Here, both characteristics are present.

First, both parties are competitors or trade rivals, both being engaged in the manufacture of
plastic-made automotive parts. Second, the acts of the petitioner were clearly "contrary to good
conscience" as petitioner admitted having employed respondent’s formeremployees, deliberately
copied respondent’s products and even went to the extent of selling these products to respondent’s
customers.10

To bolster this point, the CA correctly pointed out that petitioner’s hiring of the former employees of
respondent and petitioner’s act of copying the subject plastic parts of respondent were tantamount
to unfair competition, viz.:

The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with the
business of [respondent].1âwphi1 [Petitioner’s] acts can be characterized as executed with
mischievous subtle calculation. To illustrate, in addition to the findings of the RTC, the Court observes
that [petitioner] is engaged in the production of plastic kitchenware previous to its manufacturing of
plasticautomotive spare parts, it engaged the services of the then mold setter and maintenance
operator of [respondent], De Guzman, while he was employed by the latter. De Guzman was hired by
[petitioner] in order to adjust its machinery since quality plastic automotive spare parts were not
being made. It baffles the Court why [petitioner] cannot rely onits own mold setter and maintenance
operator to remedy its problem. [Petitioner’s] engagement of De Guzman indicates that it is banking
on his experience gained from working for [respondent].

Another point we observe is that Yabut, who used to be a warehouse and delivery man of
[respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this
accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the same
position he occupied with [respondent]. These sequence of events relating to his employment by
[petitioner] is suspect too like the situation with De Guzman.11

Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of suddenly
shifting his business from manufacturing kitchenware to plastic-made automotive parts; his luring the
employees of the respondent to transfer to his employ and trying to discover the trade secrets of the
respondent.12

Moreover, when a person starts an opposing place of business, not for the sake of profit to himself,
but regardless of loss and for the sole purpose of driving his competitor out of business so that later
on he can take advantage of the effects of his malevolent purpose, he is guilty of wanton wrong.13 As
aptly observed by the courta quo, the testimony of petitioner’s witnesses indicate that it acted in bad
faith in competing with the business of respondent, to wit: [Petitioner], thru its General Manager,
William Salinas, Jr., admitted that it was never engaged in the business of plastic-made automotive
parts until recently, year 2000: (G.R. No. 195549 September 3, 2014 WILLAWARE PRODUCTS
CORPORATION, Petitioner, vs.JESICHRIS MANUFACTURING CORPORATION, Respondent.)

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SEARCH WARRANT (SEC 168)

The issue for resolution is whether or not the CA erred in reversing the RTC's quashal of the assailed
search warrants.

We find no merit in the petition.

The applications for the issuance of the assailed search warrants were for violations of Sections 155
and 168, both in relation to Section 170 of Republic Act (RA) No. 8293, otherwise known as the
Intellectual Property Code of the Philippines. Section 155, in relation to Section 170, punishes
trademark infringement; while Section 168, in relation to Section 170, penalizes unfair competition,
to wit:

Sec 155. Remedies; Infringement. – Any person who shall, without the consent of the owner of the
registered mark:

155.1 Use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for
sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or

While

Sec. 168. Unfair Competition, Rights, Regulation and Remedies. –

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."26 And when the law speaks of facts, the reference is to facts,
data or information personally known to the applicant and the witnesses he may present. Absent the
element of personal knowledge by the applicant or his witnesses of the facts upon which the issuance
of a search warrant may be justified, the warrant is deemed not based on probable cause and is a
nullity, its issuance being, in legal contemplation, arbitrary.27 The determination of probable cause
does not call for the application of rules and standards of proof that a judgment of conviction requires
after trial on the merits.28 As implied by the words themselves, "probable cause" is concerned with
probability, not absolute or even moral certainty. The prosecution need not present at this stage
proof beyond reasonable doubt. The standards of judgment are those of a reasonably prudent
man,29 not the exacting calibrations of a judge after a full-blown trial.30

The RTC quashed the search warrants, saying that (1) there exists a prejudicial question pending
before Branch 93 of the RTC of Quezon City, docketed as Civil Case No. 05-54747, i.e., the
determination as to who between respondent and Yu is the rightful holder of the intellectual property
right over the trademark TOP GEL T.G. & DEVICE OF A LEAF; and there was also a case for trademark
infringement and/or unfair competition filed by respondent against Yu pending before the IPO,
docketed as IPV Case No. 10-2005-00001; and (2) Yu's representation that he is the sole distributor of
the Top Gel whitening soap, as the latter even presented Registration No. 4-1996-109957 issued by
the IPO to Zenna Chemical Industry as the registered owner of the trademark TOP GEL MCA & DEVICE
MCA for a term of 20 years from November 17, 2000 covering the same product.

We do not agree. We affirm the CA's reversal of the RTC Order quashing the search warrants.

The affidavits of NBI Agent Furing and his witnesses, Esmael and Ling, clearly showed that they are
seeking protection for the trademark "TOP GEL T.G. and DEVICE OF A LEAF" registered to respondent
under Certificate of Registration 4-2000-009881 issued by the IPO on August 24, 2003, and no other.
While petitioners claim that the product they are distributing was owned by Yu with the trademark
TOP GEL MCA and MCA DEVISE under Certificate of Registration 4-1996-109957, it was different from
the trademark TOP GEL T.G. and DEVICE OF A LEAF subject of the application. We agree with the CA's
finding in this wise:
x x x It bears stressing that the basis for the applications for issuances of the search warrants on
grounds of trademark infringement and unfair competition is the trademark TOP GEL T.G. & DEVICE
OF A LEAF. Private complainant-appellant was issued a Certificate of Registration No. 4-2000-009881
of said trademark on August 24, 2003 by the Intellectual Property Office, and is thus considered the
lawful holder of the said trademark. Being the registrant and the holder of the same, private
complainant-appellant had the authority to enforce and protect her intellectual property rights over it.
This prompted her to request for assistance from the agents of the NBI, who thereafter conducted a
series of investigation, test buys and inspection regarding the alleged trademark infringement by
herein respondents-appellees. Subsequently, Ping Na Lau, private complainant-appellant’s
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.1avvphi1 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:

WHEREFORE, the WRIT OF PRELIMINARY INJUNCTION is hereby issued against Respondent, Benjamin
Yu, doing business under the name and style of MCA Manufacturing and Heidi S. Cua, Proprietor of
South Ocean Chinese Drug Store, and their agents, representatives, dealers and distributors and all
persons acting in their behalf, to cease and desist using the trademark "TOP GEL T.G. & DEVICE OF A
LEAF" or any colorable imitation thereof on Papaya whitening soaps they manufacture, sell, and/or
offer for sale, and otherwise, from packing their Papaya Whitening Soaps in boxes with the same
general appearance as those of complainant's boxes within a period of NINETY (90) DAYS, effective
upon the receipt of respondent of the copy of the COMPLIANCE filed with this Office by the
Complainant stating that it has posted a CASH BOND in the amount of ONE HUNDRED THOUSAND
PESOS (Php100,000.00) together with the corresponding Official Receipt Number and date thereof.
Consequently, complainant is directed to inform this Office of actual date of receipt by Respondent of
the aforementioned COMPLIANCE.36

To inform the public of the issuance of the writ of preliminary injunction, respondent's counsel had
the dispositive portion of the Order published in The Philippine Star newspaper on October 30,
2005.37 Thus, it was clearly stated that Yu, doing business under the name and style of MCA
Manufacturing, his agents, representatives, dealers and distributors and all persons acting in his
behalf, were to cease and desist from using the trademark "TOP GEL & DEVICE OF A LEAF" or any
colorable imitation thereof on Papaya Whitening soaps they manufacture, sell and/or offer for sale.
Petitioners, who admitted having derived their TOP GEL products from Yu, are, therefore, notified of
such injunction and were enjoined from selling the same.

Notwithstanding, at the time of the application of the search warrants on November 21, 2005, and
while the injunction was in effect, petitioners were still selling the alleged counterfeit products
bearing the trademark TOP GEL T.G. & DEVICE OF A LEAF. There exists a probable cause for violation
of respondent's intellectual property rights, which entitles her as the registered owner of the
trademark TOP GEL and DEVICE OF A LEAF to be protected by the issuance of the search warrants.

More importantly, during the pendency of petitioners' motion to quash in the RTC, respondent
submitted the Order dated March 8, 2006 of the IPO in IPV Case No. 10-2005-00001, where the writ
of preliminary injunction was earlier issued, approving the compromise agreement entered into by
respondent with Yu and Cua where it was stated, among others, that:

1. Respondents acknowledge the exclusive right of Complainant over the trademark TOP GEL T.G. &
DEVICE OF A LEAF for use on papaya whitening soap as registered under Registration No.
4-2000-009881 issued on August 24, 2003.

2. Respondents acknowledge the appointment by Zenna Chemical Industry Co., Ltd. of Complainant as
the exclusive Philippine distributor of its products under the tradename and trademark TOP GEL MCA
& MCA DEVICE (A SQUARE DEVICE CONSISTING OF A STYLIZED REPRESENTATION OF A LETTER "M"
OVER THE LETTER "CA") as registered under Registration No 4-1996-109957 issued on November 17,
2000, as well as the assignment by Zenna Chemical Industry Co., Ltd. to Complainant of said mark for
use on papaya whitening soap.

3. Respondents admit having used the tradename and trademark aforesaid, but after having realized
that Complainant is the legitimate assignee of TOP GEL MCA & MCA DEVICE and the registered owner
of TOP GEL T.G. & DEVICE OF A LEAF, now undertake to voluntarily cease and desist from using the
aforesaid tradename and trademark, and further undertake not to manufacture, sell and distribute
and otherwise compete with complainant, now and at anytime in the future, any papaya whitening
soap using or bearing a mark or name identical or confusingly similar to, or constituting a colorable
imitation of the tradename and trademark TOP GEL MCA & MCA DEVICE and/or TOP GEL T.G. &
DEVICE OF A LEAF as registered and described above.38
Hence, it appears that there is no more controversy as to who is the rightful holder of the trademark
TOP GEL T.G. & DEVICE OF A LEAF. Therefore, respondent, as owner of such registered trademark has
the right to the issuance of the search warrants.

Anent petitioners' claim that one or two samples of the Top Gel products from each of them, instead
of confiscating thousands of the products, would have sufficed for the purpose of an anticipated
criminal action, citing our ruling in Summerville General Merchandising Co. v. Court of Appeals,39 is
not meritorious.

We do not agree.

The factual milieu of the two cases are different. In Summerville, the object of the violation of
Summerville's intellectual property rights, as assignee of Royal playing cards and Royal brand playing
cards case, was limited to the design of Summerville's Royal plastic container case which encased and
wrapped the Crown brand playing cards. In the application for the search warrant which the RTC
subsequently issued, one of the items to be seized were the Crown brand playing cards using the
copyright plastic and Joker of Royal brand. Thus, numerous boxes containing Crown playing cards
were seized and upon the RTC's instruction were turned over to Summerville, subject to the condition
that the key to the said warehouse be turned over to the court sheriff. Respondents moved for the
quashal of the search warrant and for the return of the seized properties. The RTC partially granted
the motion by ordering the release of the seized Crown brand playing cards and the printing machines;
thus, only the Royal plastic container cases of the playing cards were left in the custody of
Summerville. The CA sustained the RTC order. On petition with us, we affirmed the CA. We found
therein that the Crown brand playing cards are not the subject of the offense as they are genuine and
the Crown trademark was registered to therein respondents’ names; that it was the design of the
plastic container/case that is alleged to have been utilized by respondents to deceive the public into
believing that the Crown brand playing cards are the same as those manufactured by Summerville.
We then said that assuming that the Crown playing cards could be considered subject of the offense,
a sample or two are more than enough to retain should there have been a need to examine them
along with the plastic container/case; and that there was no need to hold the hundreds of articles
seized. We said so in the context that since what was in dispute was the design of the Royal plastic
cases/containers of playing cards and not the playing card per se, a small number of Crown brand
playing cards would suffice to examine them with the Royal plastic cases/containers. And the return
of the playing cards would better serve the purposes of justice and expediency. However, in this case,
the object of the violation of respondent's intellectual property right is the alleged counterfeit TOP
GEL T.G. & DEVICE OF A LEAF papaya whitening soap being sold by petitioners, so there is a need to
confiscate all these articles to protect respondent's right as the registered owner of such trademark.

Petitioners next contend that the CA's ruling on the applicability of Rule 126 of the Rules of Court that
the search warrants were issued in anticipation of a criminal action was only based on respondent's
claim which was only brought for the first time in her appellant's brief.

We are not persuaded.

We find worth quoting respondent's argument addressing this issue in its Comment, thus:
In the assailed Decision, the Court of Appeals found that the Rule correctly applicable to the subject
search warrants was Rule 126 of the Rules of Court. Petitioners fault the appellate court for ruling
that the Regional Trial Court incorrectly applied the Rules on Search and Seizure in Civil Actions for
Infringement of Intellectual Property Rights on the basis of an argument that private respondent
brought up for the first time in her Appellant's Brief.

A cursory perusal of the Appellant's Brief shows that the following issues/errors were raised, that: (1)
the Honorable Trial Court erred in holding that the "Rules on Search and Seizure for Infringement of
Intellectual Property Rights" apply to the search warrants at bar; (2) x x x.

It must be remembered that there was no trial on the merits to speak of in the trial court, and the
matter of the application of the wrong set of Rules only arose in the Order dated 25th September
2006 which sustained the Motion to Quash. A thorough examination of the Appellee's Brief filed by
petitioners (respondents-appellees in the Court of Appeals) reveals, however, that petitioners NEVER
assailed the first issue/error on the ground that the same was raised for the first time on appeal. It is
only now, after the appellate court rendered a Decision and Resolution unfavorable to them, that
petitioners questioned the alleged procedural error. Petitioners should now be considered in estoppel
to question the same.40

Indeed, perusing the appellee's (herein petitioners) brief filed with the CA, the matter of the
non-applicability of the rules on search and seizure in civil action for infringement of intellectual
property rights was never objected as being raised for the first time. On the contrary, petitioners had
squarely faced respondent's argument in this wise:

Appellant (herein respondent) contends that the rule (SC Adm. Memo 1-06, No. 02-1-06, Rule on
Search and Seizure in Civil Actions for Infringement of Intellectual Property Rights) does [not] apply to
the search warrants in the [case] at bar, for the reason that the search warrants themselves reveal
that the same were applied for and issued for violations of "Section 155 in relation to Section 170 of
RA 8293" and violations of "Section 168 in relation to Section 170 of RA 8293," and that a perusal of
the records would show that there is no mention of a civil action or anticipation thereof, upon which
the search warrants are applied for.

Appellees (herein petitioners) cannot agree with the contention of the appellant.1âwphi1
Complainant NBI Agent Joseph G. Furing, who applied for the search warrants, violated the very rule
on search and seizure for infringement of Intellectual Property Rights. The search warrants applied for
by the complainants cannot be considered a criminal action. There was no criminal case yet to speak
of when complainants applied for issuance of the search warrants. There is distinction here because
the search applied for is civil in nature and no criminal case had been filed. The complaint is an
afterthought after the respondents-appellees filed their Motion to Quash Search Warrant before the
Regional Trial Court of Manila, Branch 24. The grounds enumerated in the rule must be complied with
in order to protect the constitutional mandate that "no person shall be deprived of life liberty or
property without due process of law nor shall any person be denied the equal protection of the law."
Clearly, the application of the search warrants for violation of unfair competition and infringement is
in the nature of a civil action.41 (G.R. No. 188526 November 11, 2013 CENTURY CHINESE MEDICINE
CO. VS PEOPLE OF THE PHILIPPINES and LING NA LAU)
//////

JURISDICTION (SEC 168)

The petition must be dismissed.

It appears that petitioner had already raised the same issue and argument before this Court in the
case of Samson vs. Daway,[12] decided on July 21, 2004. That case involved exactly the same facts
and issue as in this case, except that the information for unfair competition against petitioner was
filed before the RTC of Quezon City. We held in that case:

The issues posed for resolution are - (1) Which court has jurisdiction over criminal and civil cases for
violation of intellectual property rights? xxx

Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty for
infringement of registered marks, unfair competition, false designation of origin and false description
or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty Thousand Pesos to
Two Hundred Thousand Pesos, to wit:

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 Section 169.1 [False Designation of Origin and False Description or
Representation].

Corollarily, Section 163 of the same Code states that actions (including criminal and civil) under
Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the proper courts with
appropriate jurisdiction under existing laws, thus -

SEC. 163. Jurisdiction of Court. - All actions under Sections 150, 155, 164 and 166 to 169 shall be
brought before the proper courts with appropriate jurisdiction under existing laws. (Emphasis
supplied)

The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The Trademark
Law) which provides that jurisdiction over cases for infringement of registered marks, unfair
competition, false designation of origin and false description or representation, is lodged with the
Court of First Instance (now Regional Trial Court) -
SEC. 27. Jurisdiction of Court of First Instance. - All actions under this Chapter [V - Infringement] and
Chapters VI [Unfair Competition] and VII [False Designatiion of Origin and False Description or
Representation], hereof shall be brought before the Court of First Instance.

We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No. 8293.
The repealing clause of R.A. No. 8293, reads -

SEC. 239. Repeals. - 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic
Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised
Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are
hereby repealed. (Emphasis added)

Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it
would not have used the phrases parts of Acts and inconsistent herewith; and it would have simply
stated Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and
189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as
amended are hereby repealed. It would have removed all doubts that said specific laws had been
rendered without force and effect. The use of the phrases parts of Acts and inconsistent herewith
only means that the repeal pertains only to provisions which are repugnant or not susceptible of
harmonization with R.A. No. 8293. Section 27 of R.A. No. 166, however, is consistent and in harmony
with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over violations of
intellectual property rights with the Metropolitan Trial Courts, it would have expressly stated so
under Section 163 thereof.

Moreover, the settled rule in statutory construction is that in case of conflict between a general law
and a special law, the latter must prevail. Jurisdiction conferred by a special law to Regional Trial
Courts must prevail over that granted by a general law to Municipal Trial Courts.

In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws conferring jurisdiction over
violations of intellectual property rights to the Regional Trial Court. They should therefore prevail over
R.A. No. 7691, which is a general law. Hence, jurisdiction over the instant criminal case for unfair
competition is properly lodged with the Regional Trial Court even if the penalty therefor is
imprisonment of less than 6 years, or from 2 to 5 years and a fine ranging from P50,000.00 to
P200,000.00.

In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual
property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19, 2002
designating certain Regional Trial Courts as Intellectual Property Courts. On June 17, 2003, the Court
further issued a Resolution consolidating jurisdiction to hear and decide Intellectual Property Code
and Securities and Exchange Commission cases in specific Regional Trial Courts designated as Special
Commercial Courts.

The case of Mirpuri v. Court of Appeals, invoked by petitioner finds no application in the present case.
Nowhere in Mirpuri did we state that Section 27 of R.A. No. 166 was repealed by R.A. No. 8293.
Neither did we make a categorical ruling therein that jurisdiction over cases for violation of
intellectual property rights is lodged with the Municipal Trial Courts. The passing remark in Mirpuri on
the repeal of R.A. No. 166 by R.A. No. 8293 was merely a backgrounder to the enactment of the
present Intellectual Property Code and cannot thus be construed as a jurisdictional pronouncement in
cases for violation of intellectual property rights.

The foregoing ruling is the law of the case and thus lays to rest the issue posed by petitioner. We see
no reason in this case to deviate therefrom. It is a basic legal principle that whatever is once
irrevocably established as the controlling legal rule or decision between the same parties in the case
continues to be the law of the case, whether correct on general principles or not, so long as the facts
on which such decision was predicated continue to be the facts of the case before the court.[13]

////

APPLICATION FOR SEARCH WARRANT SECTION 168

The applications for the issuance of the assailed search warrants were

for violations of Sections 155 and 168, both in relation to Section 170 of

Republic Act (RA) No. 8293, otherwise known as the Intellectual Property

Code of the Philippines. Section 155, in relation to Section 170, punishes

trademark infringement; while Section 168, in relation to Section 170,

penalizes unfair competition, to wit:

Sec 155. Remedies; Infringement. – Any person who shall, without

the consent of the owner of the registered mark:

155.1 Use in commerce any reproduction, counterfeit, copy

or colorable imitation of a registered mark or the same

container or a dominant feature thereof in connection with

the sale, offering for sale, distribution, advertising of any

goods or services including other preparatory steps necessary to carry out the sale of any goods or
services on

or in connection with which such use is likely to cause

confusion, or to cause mistake, or to deceive; or

While
Sec. 168. Unfair Competition, Rights, Regulation and Remedies. -

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.”26 And when the law speaks of facts, the reference is to facts, data or information
personally known to the applicant and the witnesses he may present. Absent the element of personal
knowledge by the applicant or his witnesses of the facts upon which the issuance of a search warrant
may be justified, the warrant is deemed not based on probable cause and is a nullity, its issuance
being, in legal contemplation, arbitrary.27 The determination of probable cause does not call for the
application of rules and standards of proof that a judgment of conviction requires after trial on the
merits.28 As implied by the words themselves, "probable cause" is concerned with probability, not
absolute or

even moral certainty. The prosecution need not present at this stage proof beyond reasonable doubt.
The standards of judgment are those of a

reasonably prudent man,29 not the exacting calibrations of a judge after a full-blown trial.30