LIP Assgn-Case Digest

8/11/2019 LIP Assgn-Case Digest

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Case Title: BIRKENSTOCK v. PHILIPPINE SHOE EXPO

Petitioners Claim:

Respondents Claim:

Issue/s:

Ruling:

Case Title: CENTURY CHINESE MEDICINE v. PEOPLE

Petitioners Claim:

Respondents Claim:

Issue/s:

Ruling:

Case Title: DIAZ v. PEOPLE

Petitioners Claim:

Respondents Claim:

Issue/s:

Ruling:

Case Title: ECOLE DE CUISINE MANILLE v. COINTREAU

Petitioners Claim:

Respondents Claim:

Issue/s:
https://www.dropbox.com/sh/n4funcu8oko9ib9/AACUorZecMbTGxOPZ38m7oQwa/Birkenstock%20v%20Phil%20Shoe%20Expo.pdf?dl=0


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Ruling:

Case Title: REPUBLIC GAS v. PETRON

Petitioners Claim:

Respondents Claim:

Issue/s:

Ruling:

Case Title: SONIC STEEL v. CHUA

Petitioners Claim:

Respondents Claim:

Issue/s:

Ruling:

Case Title: UYCO v. LO

Petitioners Claim:

Respondents Claim:

Issue/s:

Ruling:

Assailed in this Petition for Review on Certiorari1are the Court of Appeals (CA) Decision2dated June25, 2010 and Resolution3dated October 27, 2010 in CA-G.R. SP No. 112278 which reversed andset aside the Intellectual Property Office (IPO) Director Generals Decision4dated December 22,2009 that allowed the registration of various trademarks in favor of petitioner BirkenstockOrthopaedie GmbH & Co. KG.

The Facts
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Petitioner, a corporation duly organized and existing under the laws of Germany, applied for varioustrademark registrations before the IPO, namely: (a) "BIRKENSTOCK" under Trademark ApplicationSerial No. (TASN) 4-1994-091508 for goods falling under Class 25 of the International Classificationof Goods and Services (Nice Classification) with filing date of March 11, 1994; (b) "BIRKENSTOCKBAD HONNEF -RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL ANDREPRESENTATION OF A FOOT, CROSS AND SUNBEA M" under TASN 4-1994-091509 for goods

falling under Class 25 of the Nice Classification with filing date of March 11, 1994; and (c)"BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEALAND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM" under TASN 4-1994-095043 forgoods falling under Class 10 of the Nice Classification with filing date of September 5, 1994 (subjectapplications).5

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

The aforesaid cancellation of Registration No. 56334 paved the way for the publication of the subjectapplications in the IPO e-Gazette on February 2, 2007.11In response, respondent filed three (3)separate verified notices of oppositions to the subject applications docketed as Inter Partes CaseNos. 14-2007-00108, 14-2007-00115, and 14-2007-00116,12claiming, inter alia, that: (a) it, togetherwith its predecessor-in-interest, has been using Birkenstock marks in the Philippines for more than16 years through the mark "BIRKENSTOCK AND DEVICE"; (b) the marks covered by the subjectapplications are identical to the one covered by Registration No. 56334 and thus, petitioner has noright to the registration of such marks; (c) on November 15, 1991, respondents predecessor-in-

interest likewise obtained a Certificate of Copyright Registration No. 0-11193 for the word"BIRKENSTOCK" ; (d) while respondent and its predecessor-in-interest failed to file the 10th Yea rDAU, it continued the use of "BIRKENSTOCK AND DEVICE" in lawful commerce; and (e) to recordits continued ownership and exclusive right to use the "BIRKENSTOCK" marks, it has filed TASN 4-2006-010273 as a " re-application " of its old registration, Registration No. 56334.13On November 13,2007, the Bureau of Legal Affairs (BLA) of the IPO issued Order No. 2007-2051 consolidating theaforesaid inter partes cases (Consolidated Opposition Cases).14

The Ruling of the BLA

In its Decision15dated May 28, 2008, the BLA of the IPO sustained respondents opposition, thus,ordering the rejection of the subject applications. It ruled that the competing marks of the parties areconfusingly similar since they contained the word "BIRKENSTOCK" and are used on the same andrelated goods. It found respondent and its predecessor-in-interest as the prior user and adopter of"BIRKENSTOCK" in the Philippines, while on the other hand, petitioner failed to present evidence ofactual use in the trade and business in this country. It opined that while Registration No. 56334 wascancelled, it does not follow that prior right over the mark was lost, as proof of continuous anduninterrupted use in trade and business in the Philippines was presented. The BLA likewise opinedthat petitioners marks are not well -known in the Philippines and internationally and that the variouscertificates of registration submitted by petitioners were all photocopies and, therefore, notadmissible as evidence.16
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Aggrieved, petitioner appealed to the IPO Director General.

The Ruling of the IPO Director General

In his Decision17dated December 22, 2009, the IPO Director General reversed and set aside theruling of the BLA, thus allowing the registration of the subject applications. He held that with the

cancellation of Registration No. 56334 for respondents failure tofile the 10th Year DAU, there is nomore reason to reject the subject applications on the ground of prior registration by anotherproprietor.18More importantly, he found that the evidence presented proved that petitioner is the trueand lawful owner and prior user of "BIRKENSTOCK" marks and thus, entitled to the registration ofthe marks covered by the subject applications.19The IPO Director General further held thatrespondents copyright for the word "BIRKENSTOCK" is of no moment since copyright andtrademark are different forms of intellectual property that cannot be interchanged.20

Finding the IPO Director Generals reversal of the BLA unacceptable, respondent filed a petition forreview with the CA.

Ruling of the CA

In its Decision21dated June 25, 2010, the CA reversed and set aside the ruling of the IPO DirectorGeneral and reinstated that of the BLA. It disallowed the registration of the subject applications onthe ground that the marks covered by such applications "are confusingly similar, if not outrightidentical" with respondents mark.22It equally held that respondents failure to file the 10th Year DAUfor Registration No. 56334 "did not deprive petitioner of its ownership of the BIRKENSTOCK marksince it has submitted substantial evidence showing its continued use, promotion and advertisementthereof up to the present."23It opined that when respondents predecessor-in-interest adopted andstarted its actual use of "BIRKENSTOCK," there is neither an existing registration nor a pendingapplication for the same and thus, it cannot be said that it acted in bad faith in adopting and startingthe use of such mark.24Finally, the CA agreed with respondent that petitioners documentaryevidence, being mere photocopies, were submitted in violation of Section 8.1 of Office Order No. 79,Series of 2005 (Rules on Inter Partes Proceedings).

Dissatisfied, petitioner filed a Motion for Reconsideration25dated July 20, 2010, which was, however,denied in a Resolution26dated October 27, 2010. Hence, this petition.27

Issues Before the Court

The primordial issue raised for the Courts resolution is whether or not the subject marks should beallowed registration in the name of petitioner.

The Courts Ruling

The petition is meritorious.

A. Admissibility of Petitioners Documentary Evidence.

In its Comment28dated April 29, 2011, respondent asserts that the documentary evidence submittedby petitioner in the Consolidated Opposition Cases, which are mere photocopies, are violative ofSection 8.1 of the Rules on Inter Partes Proceedings, which requires certified true copies ofdocuments and evidence presented by parties in lieu of originals.29As such, they should be deemedinadmissible.
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The Court is not convinced.

It is well-settled that "the rules of procedure are mere tools aimed at facilitating the attainment ofjustice, rather than its frustration. A strict and rigid application of the rules must always be eschewedwhen it would subvert the primary objective of the rules, that is, to enhance fair trials and expedite

justice. Technicalities should never be used to defeat the substantive rights of the other party. Every

party-litigant must be afforded the amplest opportunity for the proper and just determination of hiscause, free from the constraints of technicalities."30"Indeed, the primordial policy is a faithfulobservance of [procedural rules], and their relaxation or suspension should only be for persuasivereasons and only in meritorious cases, to relieve a litigant of an injustice not commensurate with thedegree of his thoughtlessness in not complying with the procedure prescribed."31This is especiallytrue with quasi-judicial and administrative bodies, such as the IPO, which are not bound by technicalrules of procedure.32On this score, Section 5 of the Rules on Inter Partes Proceedings provides:

Sec. 5. Rules of Procedure to be followed in the conduct of hearing of Inter Partes cases.Therules of procedure herein contained primarily apply in the conduct of hearing of Inter Partes cases.The Rules of Court may be applied suppletorily. The Bureau shall not be bound by strict technicalrules of procedure and evidence but may adopt, in the absence of any applicable rule herein, suchmode of proceedings which is consistent with the requirements of fair play and conducive to the just,speedy and inexpensive disposition of cases, and which will give the Bureau the greatest possibilityto focus on the contentious issues before it. (Emphasis and underscoring supplied)

In the case at bar, while petitioner submitted mere photocopies as documentary evidence in theConsolidated Opposition Cases, it should be noted that the IPO had already obtained the originals ofsuch documentary evidence in the related Cancellation Case earlier filed before it. Under thiscircumstance and the merits of the instant case as will be subsequently discussed, the Court holdsthat the IPO Director Generals relaxation of procedure was a valid exercise of his discretion in theinterest of substantial justice.33

Having settled the foregoing procedural matter, the Court now proceeds to resolve the substantiveissues.

B. Registration and ownership of "BIRKENSTOCK."

Republic Act No. (RA) 166,34the governing law for Registration No. 56334, requires the filing of aDAU on specified periods,35to wit:

Section 12. Duration.Each certificate of registration shall remain in force for twenty years:Provided, That registrations under the provisions of this Act shall be cancelled by the Director,unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue of thecertificate of registration, the registrant shall file in the Patent Office an affidavit showing that themark or trade-name is still in use or showing that its non-use is due to special circumstance whichexcuse such non-use and is not due to any intention to abandon the same, and pay the required fee.

The Director shall notify the registrant who files the above- prescribed affidavits of his acceptance orrefusal thereof and, if a refusal, the reasons therefor. (Emphasis and underscoring supplied)

The aforementioned provision clearly reveals that failure to file the DAU within the requisite periodresults in the automatic cancellation of registration of a trademark. In turn, such failure is tantamountto the abandonment or withdrawal of any right or interest the registrant has over his trademark.36
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In this case, respondent admitted that it failed to file the 10th Year DAU for Registration No. 56334within the requisite period, or on or before October 21, 2004. As a consequence, it was deemed tohave abandoned or withdrawn any right or interest over the mark "BIRKENSTOCK." Neither can itinvoke Section 23637of the IP Code which pertains to intellectual property rights obtained underprevious intellectual property laws, e.g., RA 166, precisely because it already lost any right orinterest over the said mark.

Besides, petitioner has duly established its true and lawful ownership of the mark "BIRKENSTOCK."

Under Section 238of RA 166, which is also the law governing the subject applications, in order toregister a trademark, one must be the owner thereof and must have actually used the mark incommerce in the Philippines for two (2) months prior to the application for registration. Section 2-

A39of the same law sets out to define how one goes about acquiring ownership thereof. Under thesame section, it is clear that actual use in commerce is also the test of ownership but the provisionwent further by saying that the mark must not have been so appropriated by another. Significantly, tobe an owner, Section 2-A does not require that the actual use of a trademark must be within thePhilippines. Thus, under RA 166, one may be an owner of a mark due to its actual use but may notyet have the right to register such ownership here due to the owners failure to use the same in thePhilippines for two (2) months prior to registration.40

It must be emphasized that registration of a trademark, by itself, is not a mode of acquiringownership. 1wphi1If the applicant is not the owner of the trademark, he has no right to apply for itsregistration. Registration merely creates a prima facie presumption of the validity of the registration,of the registrants ownership of the trademark, and of the exclusive right to the use thereof. Suchpresumption, just like the presumptive regularity in the performance of official functions, is rebuttableand must give way to evidence to the contrary.41

Clearly, it is not the application or registration of a trademark that vests ownership thereof, but it isthe ownership of a trademark that confers the right to register the same. A trademark is an industrialproperty over which its owner is entitled to property rights which cannot be appropriated byunscrupulous entities that, in one way or another, happen to register such trademark ahead of its

true and lawful owner. The presumption of ownership accorded to a registrant must then necessarilyyield to superior evidence of actual and real ownership of a trademark.

The Courts pronouncement inBerris Agricultural Co., Inc. v. Abyadang42is instructive on this point:

The ownership of a trademark is acquired by its registration and its actual use by the manufactureror distributor of the goods made available to the purchasing public. x x x A certificate of registrationof a mark, once issued, constitutes prima facie evidence of the validity of the registration, of theregistrants ownership of the mark,and of the registrants exclusive right to use the same inconnection with the goods or services and those that are related thereto specified in the certificate. xx x In other words, the prima facie presumption brought about by the registration of a mark may bechallenged and overcome in an appropriate action, x x x by evidence of prior use by another person,

i.e. , it will controvert a claim of legal appropriation or of ownership based on registration by asubsequent user. This is because a trademark is a creation of use and belongs to one who first usedit in trade or commerce.43(Emphasis and underscoring supplied)

In the instant case, petitioner was able to establish that it is the owner of the mark "BIRKENSTOCK."It submitted evidence relating to the origin and history of "BIRKENSTOCK" and its use in commercelong before respondent was able to register the same here in the Philippines. It has sufficientlyproven that "BIRKENSTOCK" was first adopted in Europe in 1774 by its inventor, JohannBirkenstock, a shoemaker, on his line of quality footwear and thereafter, numerous generations of
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his kin continuously engaged in the manufacture and sale of shoes and sandals bearing the mark"BIRKENSTOCK" until it became the entity now known as the petitioner. Petitioner also submittedvarious certificates of registration of the mark "BIRKENSTOCK" in various countries and that it hasused such mark in different countries worldwide, including the Philippines.44

On the other hand, aside from Registration No. 56334 which had been cancelled, respondent only

presented copies of sales invoices and advertisements, which are not conclusive evidence of itsclaim of ownership of the mark "BIRKENSTOCK" as these merely show the transactions made byrespondent involving the same.45

In view of the foregoing circumstances, the Court finds the petitioner to be the true and lawful ownerof the mark "BIRKENSTOCK" and entitled to its registration, and that respondent was in bad faith inhaving it registered in its name. In this regard, the Court quotes with approval the words of the IPODirector General, viz.:

The facts and evidence fail to show that [respondent] was in good faith in using and in registering themark BIRKENSTOCK. BIRKENSTOCK, obviously of German origin, is a highly distinct and arbitrarymark. It is very remote that two persons did coin the same or identical marks. To come up with a

highly distinct and uncommon mark previously appropriated by another, for use in the same line ofbusiness, and without any plausible explanation, is incredible. The field from which a person mayselect a trademark is practically unlimited. As in all other cases of colorable imitations, theunanswered riddle is why, of the millions of terms and combinations of letters and designs available,[respondent] had to come up with a mark identical or so closely similar to the [petitioners] if therewas no intent to take advantage of the goodwill generated by the [petitioners] mark. Being on thesame line of business, it is highly probable that the [respondent] knew of the existence ofBIRKENSTOCK and its use by the [petitioner], before [respondent] appropriated the same mark andhad it registered in its name.46

WHEREFORE, the petition is GRANTED. The Decision dated June 25, 2010 and Resolution datedOctober 27, 2010 of the Court of Appeals in CA-G.R. SP No. 112278 are REVERSED and SET

ASIDE. Accordingly, the Decision dated December 22, 2009 of the IPO Director General is hereby

REINSTATED.

SO ORDERED.

CENTURY CHINESE MEDICINE CO., MING SENG CHINESE DRUGSTORE, XIANG JIANCHINESE DRUG STORE, TEK SAN CHINESE DRUG STORE, SIM SIM CHINESE DRUG STORE,BAN SHIONG TAY CHINESE DRUG STORE and/or WILCENDO TAN MENDEZ, SHUANG YINGCHINESE DRUGSTORE, and BACLARAN CHINESE DRUG STORE,Petitioners,vs.PEOPLE OF THE PHILIPPINES and LING NA LAU,Respondents.

Before us is a petition for review on certiorari which seeks to reverse and set aside the

Decision1dated March 31, 2009 of the Court of Appeals in CA-G.R. CV No. 88952 and theResolution2dated July 2, 2009, which denied reconsideration thereof. The CA reversed theOrder3dated September 25, 2006 of the Regional Trial Court (RTC), Branch 143, Makati City,quashing Search Warrants Nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-042 and 05-043, and the Order4dated March 7, 2007 denying reconsideration thereof.

The antecedent facts are as follows:
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On January 9, 2006, respondent filed her Comment/Opposition 14thereto arguing the non-existenceof forum shopping; that Yu is not a party- respondent in these cases and the pendency of the civilcase filed by him is immaterial and irrelevant; and that Yu cannot be considered the sole owner anddistributor of "TOP GEL T.G. & DEVICE OF A LEAF." The motion was then submitted for resolutionin an Order dated January 30, 2006. During the pendency of the case, respondent, on April 20,2006, filed a Submission15in relation to the Motion to Quash attaching an Order16dated March 21,

2006 of the IPO in IPV Case No. 10-2005-00001 filed by respondent against Yu, doing businessunder the name and style of MCA Manufacturing and Heidi S. Cua, proprietor of South OceanChinese Drug Stores for trademark infringement and/or unfair competition and damages with prayerfor preliminary injunction. The Order approved therein the parties' Joint Motion To ApproveCompromise 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 TOPGEL T.G. & DEVICE OF A LEAF for use on papaya whitening soap as registered underRegistration No. 4-2000-009881 issued on August 24, 2003.

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

3. Respondents admit having used the tradename and trademark aforesaid but after havingrealized that Complainant is the legitimate assignee of TOP GEL MCA & MCA DEVICE andthe registered owner of TOP GEL T.G. & DEVICE OF A LEAF, now undertake to voluntarilycease and desist from using the aforesaid tradename and trademark and further undertakenot 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 identicalor confusingly similar to, or constituting a colorable imitation of, the tradename andtrademark TOP GEL MCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF asregistered and described above.

4. Respondents further undertake to withdraw and/or dismiss their counterclaim and petitionto 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 theCompromise Agreement all their products bearing a mark or name identical or confusinglysimilar to, or constituting a colorable imitation of, the tradename and trademark TOP GELMCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF, from the marketnationwide.

5. Respondents finally agree and undertake to pay Complainant liquidated damages in theamount of FIVE HUNDRED THOUSAND (Php500,000.00) PESOS for every breach orviolation of any of the foregoing undertakings which complainant may enforce by securing awrit of execution from this Office, under this case.

6. Complainant, on the other hand, agrees to waive all her claim for damages againstRespondents as alleged in her complaint filed in the Intellectual Property Office only.
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7. The Parties hereby agree to submit this Compromise Agreement for Approval of thisOffice 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/ortheir 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 beenrendered MOOT AND ACADEMIC.

SO ORDERED.17

On September 25, 2006, the RTC issued its Order18sustaining the Motion to Quash the SearchWarrants, the dispositive portion of which reads as follows:

WHEREFORE, finding that the issuance of the questioned search warrants were not supported byprobable 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 toherein 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 Actionin Infringement of Intellectual Property Rights.20It found the existence of a prejudicial question whichwas pending before Branch 93 of RTC Quezon City, docketed as Civil Case No. 05-54747, on thedetermination as to who between respondent and Yu is the rightful holder of the intellectual propertyright over the trademark TOP GEL T.G. & DEVICE OF A LEAF; and there was also a case fortrademark infringement and/or unfair competition filed by respondent against Yu before the IPOwhich 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 thealleged right of respondent over the subject trademark/tradename. Also, the RTC found thatpetitioners relied heavily on Yu's representation that he is the sole owner/distributor of the Top Gelwhitening soap, as the latter even presented Registration No. 4-1996-109957 from the IPO for aterm of 20 years from November 17, 2000 covering the same product. There too was the notarizedcertification from Zenna Chemical Industry of Taiwan, owner of Top Gel MCA, with the caveat thatthe sale, production or representation of any imitated products under its trademark and tradenameshall be dealt with appropriate legal action.

The RTC further said that in the determination of probable cause, the court must necessarily resolvewhether or not an offense exists to justify the issuance of a search warrant or the quashal of the onealready issued. In this case, respondent failed to prove the existence of probable cause, whichwarranted the quashal of the questioned search warrants.

On November 13, 2006, respondent filed an Urgent Motion to Hold in Abeyance the Release ofSeized Evidence.21

Respondent filed a motion for reconsideration, which the RTC denied in its Order22dated March 7,2007.
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Respondent then filed her appeal with the CA. After respondent filed her appellant's brief andpetitioners 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 Branch143 of the Regional Trial Court of the National Capital Judicial Region stationed in Makati City in thecase involving Search Warrants Nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-042, 05-043.23

In reversing the RTC's quashal of the search warrants, the CA found that the search warrants wereapplied for and issued for violations of Sections 155 and 168, in relation to Section 170, of theIntellectual Property Code and that the applications for the search warrants were in anticipation ofcriminal actions which are to be instituted against petitioners; thus, Rule 126 of the Rules of CriminalProcedure was applicable. It also ruled that the basis for the applications for issuance of the searchwarrants on grounds of trademarks infringement and unfair competition was the trademark TOP GELT.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 assistancefrom the NBI.

The CA did not agree with the RTC that there existed a prejudicial question, since Civil Case No. 05-54747 was already dismissed on June 10, 2005, i.e., long before the search warrants subject of thisappeal 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 bythe 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 INREVERSING THE FINDINGS OF THE REGIONAL TRIAL COURT AND HELD THAT THELATTER APPLIED THE RULES ON SEARCH AND SEIZURE IN CIVIL ACTIONS FORINFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.24

(B) THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHENIT BASED ITS RULING ON THE ARGUMENT WHICH WAS BROUGHT UP FOR THEFIRST 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 thesearch warrants and seizure as those Top Gel products are not fruits of any crime, infringed productnor intended to be used in any crime; that they are legitimate distributors who are authorized to sellthe 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 theseized TOP GEL products, not one had been returned; that one or two samples from eachpetitioners' drugstore would have sufficed in case there is a need to present them in a criminalprosecution, 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 seizurein anticipation of a civil action was never raised in the RTC.
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The issue for resolution is whether or not the CA erred in reversing the RTC's quashal of theassailed 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 theIntellectual Property Code of the Philippines. Section 155, in relation to Section 170, punishestrademark 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 theregistered mark:

155.1 Use in commerce any reproduction, counterfeit, copy or colorable imitation of a registeredmark or the same container or a dominant feature thereof in connection with the sale, offering forsale, distribution, advertising of any goods or services including other preparatory steps necessary tocarry out the sale of any goods or services on or in connection with which such use is likely to cause

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

While

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

x x x x

168.3. In particular, and without in any way limiting the scope of protection against unfaircompetition, 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 inwhich they are contained, or the devices or words thereon, or in any other feature of theirappearance, which would be likely to influence purchasers to believe that the goods offered arethose of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwiseclothes the goods with such appearance as shall deceive the public and defraud another of hislegitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged inselling such goods with a like purpose;

And

SEC. 170. Penalties. - Independent of the civil and administrative sanctions imposed by law, acriminal 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 onany 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 Originand 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 Issuanceof the Search and Seizure in Civil Actions for Infringement of Intellectual Property Rights, is notapplicable in this case as the search warrants were not applied based thereon, but in anticipation ofcriminal actions for violation of intellectual property rights under RA 8293. It was established that


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respondent had asked the NBI for assistance to conduct investigation and search warrantimplementation for possible apprehension of several drugstore owners selling imitation or counterfeitTOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap. Also, in his affidavit to support hisapplication for the issuance of the search warrants, NBI Agent Furing stated that "the items to beseized 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 SearchWarrants, provides, to wit:

SEC. 3. Personal property to be seized. - A search warrant may be issued for the search andseizure 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 uponprobable cause in connection with one specific offense to be determined personally by the judgeafter 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 beanywhere 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, thecomplainant and the witnesses he may produce on facts personally known to them and attach to therecord 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 prudentman to believe that an offense has been committed and that the objects sought in connection withthe offense are in the place to be searched."26And when the law speaks of facts, the reference is tofacts, 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 whichthe issuance of a search warrant may be justified, the warrant is deemed not based on probablecause and is a nullity, its issuance being, in legal contemplation, arbitrary.27The determination ofprobable cause does not call for the application of rules and standards of proof that a judgment ofconviction requires after trial on the merits.28As implied by the words themselves, "probable cause"is concerned with probability, not absolute or even moral certainty. The prosecution need not presentat this stage proof beyond reasonable doubt. The standards of judgment are those of a reasonablyprudent man,29not 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 pendingbefore Branch 93 of the RTC of Quezon City, docketed as Civil Case No. 05-54747, i.e., thedetermination as to who between respondent and Yu is the rightful holder of the intellectual propertyright over the trademark TOP GEL T.G. & DEVICE OF A LEAF; and there was also a case fortrademark infringement and/or unfair competition filed by respondent against Yu pending before theIPO, docketed as IPV Case No. 10-2005-00001; and (2) Yu's representation that he is the soledistributor 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
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TOP GEL MCA & DEVICE MCA for a term of 20 years from November 17, 2000 covering the sameproduct.

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 torespondent 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 thetrademark TOP GEL MCA and MCA DEVISE under Certificate of Registration 4-1996-109957, it wasdifferent from the trademark TOP GEL T.G. and DEVICE OF A LEAF subject of the application. Weagree 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 ongrounds 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 thusconsidered 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 rightsover it. This prompted her to request for assistance from the agents of the NBI, who thereafterconducted a series of investigation, test buys and inspection regarding the alleged trademarkinfringement by herein respondents-appellees. Subsequently, Ping Na Lau, private complainant-appellants representative, issued a certification with the finding that the examined goods werecounterfeit. This prompted the NBI agents to apply for the issuances of search warrants against therespondents-appellees. Said applications for the search warrants were granted after by JudgeLaguilles after examining under oath the applicant Agent Furing of the NBI and his witnesses PingNa Lau and Junayd R. Ismael.

Based on the foregoing, it is clear that the requisites for the issuance of the search warrants hadbeen complied with and that there is probable cause to believe that an offense had been committedand 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 intellectualproperty 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 November21, 2005, as the CA correctly found, Civil Case No. Q-05-54747, which the RTC found to be where aprejudicial question was raised, was already dismissed on June 10, 2005,32because of the pendencyof a case involving the same issues and parties before the IPO. Yu's motion for reconsideration wasdenied in an Order33dated September 15, 2005. In fact, a Certificate of Finality34was issued by theRTC on January 4, 2007.

Moreover, the IPO case for trademark infringement and unfair competition and damages with prayerfor 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. 1avvphi1In fact, prior to theapplications for the issuance of the assailed search warrants on November 21, 2005, the IPO hadissued an Order35dated October 20, 2005 granting a writ of preliminary injunction against Yu andCua, 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,
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Proprietor of South Ocean Chinese Drug Store, and their agents, representatives, dealers anddistributors and all persons acting in their behalf, to cease and desist using the trademark "TOP GELT.G. & DEVICE OF A LEAF" or any colorable imitation thereof on Papaya whitening soaps theymanufacture, sell, and/or offer for sale, and otherwise, from packing their Papaya Whitening Soapsin boxes with the same general appearance as those of complainant's boxes within a period ofNINETY (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 ONEHUNDRED THOUSAND PESOS (Php100,000.00) together with the corresponding Official ReceiptNumber and date thereof. Consequently, complainant is directed to inform this Office of actual dateof receipt by Respondent of the aforementioned COMPLIANCE.36

To inform the public of the issuance of the writ of preliminary injunction, respondent's counsel hadthe dispositive portion of the Order published in The Philippine Star newspaper on October 30,2005.37Thus, it was clearly stated that Yu, doing business under the name and style of MCAManufacturing, his agents, representatives, dealers and distributors and all persons acting in hisbehalf, were to cease and desist from using the trademark "TOP GEL & DEVICE OF A LEAF" or anycolorable 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 ofsuch injunction and were enjoined from selling the same.

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

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

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

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

3. Respondents admit having used the tradename and trademark aforesaid, but after havingrealized that Complainant is the legitimate assignee of TOP GEL MCA & MCA DEVICE andthe registered owner of TOP GEL T.G. & DEVICE OF A LEAF, now undertake to voluntarilycease and desist from using the aforesaid tradename and trademark, and further undertakenot to manufacture, sell and distribute and otherwise compete with complainant, now and atanytime in the future, any papaya whitening soap using or bearing a mark or name identicalor confusingly similar to, or constituting a colorable imitation of the tradename and trademark
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TOP GEL MCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF as registeredand described above.38

Hence, it appears that there is no more controversy as to who is the rightful holder of the trademarkTOP GEL T.G. & DEVICE OF A LEAF. Therefore, respondent, as owner of such registeredtrademark 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, insteadof confiscating thousands of the products, would have sufficed for the purpose of an anticipatedcriminal action, citing our ruling in Summerville General Merchandising Co. v. Court of Appeals,39isnot meritorious.

We do not agree.

The factual milieu of the two cases are different. In Summerville, the object of the violation ofSummerville's intellectual property rights, as assignee of Royal playing cards and Royal brandplaying cards case, was limited to the design of Summerville's Royal plastic container case whichencased 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 playingcards using the copyright plastic and Joker of Royal brand. Thus, numerous boxes containing Crownplaying cards were seized and upon the RTC's instruction were turned over to Summerville, subjectto the condition that the key to the said warehouse be turned over to the court sheriff. Respondentsmoved for the quashal of the search warrant and for the return of the seized properties. The RTCpartially granted the motion by ordering the release of the seized Crown brand playing cards and theprinting machines; thus, only the Royal plastic container cases of the playing cards were left in thecustody 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 aregenuine and the Crown trademark was registered to therein respondents names; that it was thedesign of the plastic container/case that is alleged to have been utilized by respondents to deceivethe public into believing that the Crown brand playing cards are the same as those manufactured bySummerville. 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 toexamine them along with the plastic container/case; and that there was no need to hold thehundreds of articles seized. We said so in the context that since what was in dispute was the designof the Royal plastic cases/containers of playing cards and not the playing card per se, a smallnumber of Crown brand playing cards would suffice to examine them with the Royal plasticcases/containers. And the return of the playing cards would better serve the purposes of justice andexpediency. However, in this case, the object of the violation of respondent's intellectual propertyright is the alleged counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap beingsold by petitioners, so there is a need to confiscate all these articles to protect respondent's right asthe 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 onrespondent'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 subjectsearch warrants was Rule 126 of the Rules of Court. Petitioners fault the appellate court for ruling


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that the Regional Trial Court incorrectly applied the Rules on Search and Seizure in Civil Actions forInfringement of Intellectual Property Rights on the basis of an argument that private respondentbrought 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 thematter of the application of the wrong set of Rules only arose in the Order dated 25th September2006 which sustained the Motion to Quash. A thorough examination of the Appellee's Brief filed bypetitioners (respondents-appellees in the Court of Appeals) reveals, however, that petitionersNEVER assailed the first issue/error on the ground that the same was raised for the first time onappeal. It is only now, after the appellate court rendered a Decision and Resolution unfavorable tothem, that petitioners questioned the alleged procedural error. Petitioners should now be consideredin 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 propertyrights was never objected as being raised for the first time. On the contrary, petitioners had squarelyfaced respondent's argument in this wise:

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

Appellees (herein petitioners) cannot agree with the contention of the appellant.1wphi1Complainant NBIAgent Joseph G. Furing, who applied for the search warrants, violated the very rule on search andseizure for infringement of Intellectual Property Rights. The search warrants applied for by thecomplainants cannot be considered a criminal action. There was no criminal case yet to speak ofwhen complainants applied for issuance of the search warrants. There is distinction here becausethe search applied for is civil in nature and no criminal case had been filed. The complaint is anafterthought after the respondents-appellees filed their Motion to Quash Search Warrant before theRegional Trial Court of Manila, Branch 24. The grounds enumerated in the rule must be compliedwith in order to protect the constitutional mandate that "no person shall be deprived of life liberty orproperty 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 isin the nature of a civil action.41

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

SO ORDERED.


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G.R. No. 180677 February 18, 2013

VICTORIO P. DIAZ,Petitioner,vs.PEOPLE OF THE PHILIPPINES AND LEVI STRAUSS [PHILS.], INC.,Respondents.

It is the tendency of the allegedly infringing mark to be confused with the registered trademark that isthe gravamen of the offense of infringement of a registered trademark. The acquittal of the accusedshould follow if the allegedly infringing mark is not likely to cause confusion. Thereby, the evidenceof the State does not satisfy the quantum of proof beyond reasonable doubt.

Accused Victorio P. Diaz (Diaz) appeals the resolutions promulgated on July 17, 20071andNovember 22, 2007,2whereby the Court of Appeals (CA), respectively, dismissed his appeal in C.A.-G.R. CR No. 30133 for the belated filing of the appellant's brief, and denied his motion forreconsideration. Thereby, the decision rendered on February 13, 2006 in Criminal Case No. 00-0318and Criminal Case No. 00-0319 by the Regional Trial Court, Branch 255, in Las Pifias City (RTC)convicting him for two counts of infringement of trademark were affirmed.3

Antecedents

On February 10, 2000, the Department of Justice filed two informations in the RTC of Las Pias City,charging Diaz with violation of Section 155, in relation to Section 170, of Republic Act No. 8293, alsoknown as theIntellectual Property Code of the Philippines (Intellectual Property Code), to wit:

Criminal Case No. 00-0318

That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within thejurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to defraud LevisStrauss (Phil.) Inc. (hereinafter referred to as LEVIS), d id then and there, willfully, unlawfully,feloniously, knowingly and intentionally engaged in commerce by reproducing, counterfeiting,

copying and colorably imitating Levis registered trademarks or dominant features thereof such asthe ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE LABEL WITHPATTERNED ARCUATE DESIGN, TAB AND COMPOSITE ARCUATE/TAB/TWO HORSE PATCH,and in connection thereto, sold, offered for sale, manufactured, distributed counterfeit patches and

jeans, including other preparatory steps necessary to carry out the sale of said patches and jeans,which likely caused confusion, mistake, and /or deceived the general consuming public, without theconsent, permit or authority of the registered owner, LEVIS, thus depriving and defrauding the latterof its right to the exclusive use of its trademarks and legitimate trade, to the damage and prejudice ofLEVIS.

CONTRARY TO LAW.4

Criminal Case No. 00-0319

That on or about August 28, 1998, and on dates prior thereto, in Las Pinas City, and within thejurisdiction of this Honorable Court, the abovenamed accused, with criminal intent to defraud LevisStrauss (Phil.) Inc. (hereinafter referred to as LEVIS), did then and there, willfully, unlawfully,feloniously, knowingly and intentionally engaged in commerce by reproducing, counterfeiting,copying and colorably imitating Levis registered trademarks or dominant features thereof such asthe ARCUATE DESIGN, TWO HORSE BRAND, TWO HORSE PATCH, TWO HORSE LABEL WITHPATTERNED ARCUATE DESIGN, TAB AND COMPOSITE ARCUATE/TAB/TWO HORSE PATCH,and in connection thereto, sold, offered for sale, manufactured, distributed counterfeit patches and
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jeans, including other preparatory steps necessary to carry out the sale of said patches and jeans,which likely caused confusion, mistake, and /or deceived the general consuming public, without theconsent, permit or authority of the registered owner, LEVIS, thus depriving and defrauding the latterof its right to the exclusive use of its trademarks and legitimate trade, to the damage and prejudice ofLEVIS.

CONTRARY TO LAW.5

The cases were consolidated for a joint trial. Diaz entered his pleas of not guilty to each informationon June 21, 2000.6

1.

Evidence of the Prosecution

Levi Strauss and Company (Levis), a foreign corporation based in the State of Delaware, UnitedStates of America, had been engaged in the apparel business. It is the owner of trademarks anddesigns of Levis jeans like LEVIS 501, the arcuate design, the two-horse brand, the two-horse

patch, the two-horse patch with pattern arcuate, and the composite tab arcuate. LEVIS 501 has thefollowing registered trademarks, to wit: (1) the leather patch showing two horses pulling a pair ofpants; (2) the arcuate pattern with the inscription "LEVI STRAUSS & CO;" (3) the arcuate design thatrefers to "the two parallel stitching curving downward that are being sewn on both back pockets of aLevis Jeans;" and (4) the tab or piece of cloth located on the structural seam of the right backpocket, upper left side. All these trademarks were registered in the Philippine Patent Office in the1970s, 1980s and early part of 1990s.7

Levi Strauss Philippines, Inc. (Levis Philippines) is a licensee of Levis. After receiving informationthat Diaz was selling counterfeit LEVIS 501 jeans in his tailoring shops in Almanza and Talon, LasPias City, Levis Philippines hired a private investigation group to verify the information.Surveillance and the purchase of jeans from the tailoring shops of Diaz established that the jeansbought from the tailoring shops of Diaz were counterfeit or imitations of LEVIS 501. LevisPhilippines then sought the assistance of the National Bureau of Investigation (NBI) for purposes ofapplying for a search warrant against Diaz to be served at his tailoring shops. The search warrantswere issued in due course. Armed with the search warrants, NBI agents searched the tailoring shopsof Diaz and seized several fake LEVIS 501 jeans from them. Levis Philippines claimed that it didnot authorize the making and selling of the seized jeans; that each of the jeans were mere imitationsof genuine LEVIS 501 jeans by each of them bearing the registered trademarks, like the arcuatedesign, the tab, and the leather patch; and that the seized jeans could be mistaken for originalLEVIS 501 jeans due to the placement of the arcuate, tab, and two-horse leather patch.8

2.

Evidence of the Defense

On his part, Diaz admitted being the owner of the shops searched, but he denied any criminalliability.

Diaz stated that he did not manufacture Levis jeans, and that he used the label "LS Jeans Tailoring"in the jeans that he made and sold; that the label "LS Jeans Tailoring" was registered with theIntellectual Property Office; that his shops received clothes for sewing or repair; that his shopsoffered made-to-order jeans, whose styles or designs were done in accordance with instructions ofthe customers; that since the time his shops began operating in 1992, he had received no notice or
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warning regarding his operations; that the jeans he produced were easily recognizable because thelabel "LS Jeans Tailoring," and the names of the customers were placed inside the pockets, andeach of the jeans had an "LSJT" red tab; that "LS" stood for "Latest Style;" and that the leather patchon his jeans had two buffaloes, not two horses.9

Ruling of the RTC

On February 13, 2006, the RTC rendered its decision finding Diaz guilty as charged, disposing thus:

WHEREFORE, premises considered, the Court finds accused Victorio P. Diaz, a.k.a. Vic Diaz,GUILTY beyond reasonable doubt of twice violating Sec. 155, in relation to Sec. 170, of RA No.8293, as alleged in the Informations in Criminal Case Nos. 00-0318 & 00-0319, respectively, andhereby sentences him to suffer in each of the cases the penalty of imprisonment of TWO (2) YEARSofprision correcional, as minimum, up to FIVE (5) YEARS ofprision correcional, as maximum, aswell as pay a fine of P50,000.00 for each of the herein cases, with subsidiary imprisonment in caseof insolvency, and to suffer the accessory penalties provided for by law.

Also, accused Diaz is hereby ordered to pay to the private complainant Levis Strauss (Phils.), Inc.

the following, thus:

1. P50,000.00 in exemplary damages; and

2. P222,000.00 as and by way of attorneys fees.

Costs de officio.

SO ORDERED.10

Ruling of the CA

Diaz appealed, but the CA dismissed the appeal on July 17, 2007 on the ground that Diaz had notfiled his appellants brief on time despite being granted his requested several extension periods.

Upon denial of his motion for reconsideration, Diaz is now before the Court to plead for his acquittal.

Issue

Diaz submits that:

THE COURT OF APPEALS VIOLATED EXISTING LAW AND JURISPRUDENCE WHEN ITAPPLIED RIGIDLY THE RULE ON TECHNICALITIES AND OVERRIDE SUBSTANTIAL JUSTICEBY DISMISSING THE APPEAL OF THE PETITIONER FOR LATE FILING OFAPPELLANTS

BRIEF.11

Ruling

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

required number of copies of the appellants brief within the time provided by theRules of Court.12

The usage of the word may in Section 1(e) of Rule 50 indicates that the dismissal of the appeal uponfailure to file the appellants brief is not mandatory, but discretionary. Verily, the failure to serve andfile the required number of copies of the appellants brief within the time provided by theRules ofCourt does not have the immediate effect of causing the outright dismissal of the appeal. Thismeans that the discretion to dismiss the appeal on that basis is lodged in the CA, by virtue of whichthe CA may still allow the appeal to proceed despite the late filing of the appellants brief, when thecircumstances so warrant its liberality. In deciding to dismiss the appeal, then, the CA is bound toexercise its sound discretion upon taking all the pertinent circumstances into due consideration.

The records reveal that Diazs counsel thrice sought an extension of the period to file the appellantsbrief. The first time was on March 12, 2

LIP Assgn-Case Digest

Documents

Transcript of LIP Assgn-Case Digest