Tag: Intellectual Property Code

Trademark Law: Prior Use Prevails Over International Reputation in Philippine Trademark Registration

The Supreme Court ruled that prior use of a trademark in the Philippines takes precedence over international reputation when determining trademark registration rights. Emerald Garment Manufacturing Corporation’s prior use of the ‘DOUBLE REVERSIBLE WAVE LINE’ and ‘DOUBLE CURVE LINES’ trademarks since 1973 and 1980, respectively, bars The H.D. Lee Company, Inc. from registering the ‘LEE & OGIVE CURVE DESIGN’ trademark, despite H.D. Lee’s international presence. This decision reinforces the principle that actual use in commerce within the Philippines is a critical factor in establishing trademark ownership and rights, emphasizing the importance of local commercial activity in trademark disputes.

Whose Curve Is It Anyway? A Trademark Battle Over Garment Designs

The case of Emerald Garment Manufacturing Corporation v. The H.D. Lee Company, Inc., revolves around a dispute over trademark rights for garment designs. Emerald Garment, a local manufacturer, opposed H.D. Lee’s application to register the trademark ‘LEE & OGIVE CURVE DESIGN,’ arguing it infringed on Emerald’s existing trademarks, ‘DOUBLE REVERSIBLE WAVE LINE’ and ‘DOUBLE CURVE LINES.’ The central legal question is whether H.D. Lee’s international reputation and use of a similar design outweigh Emerald’s prior use and registration of its trademarks within the Philippines.

The Intellectual Property Office’s (IPO) Director of the Bureau of Legal Affairs (BLA) initially sided with Emerald, emphasizing Emerald’s prior use and registration of its marks. However, the IPO’s Director General (DG) reversed this decision, favoring H.D. Lee based on its international registrations and reputation. The Court of Appeals (CA) affirmed the DG’s decision, taking judicial notice of H.D. Lee’s design being featured in popular culture. This ruling highlighted the complexities of trademark law when international brands clash with local businesses.

Emerald then elevated the case to the Supreme Court, asserting the principle of conclusiveness of judgment based on a previous case, G.R. No. 195415, where the Court upheld Emerald’s registration of the ‘DOUBLE REVERSIBLE WAVE LINE’ mark. Emerald argued that the issue of confusing similarity and prior use had already been determined in that case, preventing H.D. Lee from relitigating the same issues. The Supreme Court agreed with Emerald, emphasizing the importance of finality in legal proceedings.

The Supreme Court’s decision hinged on the doctrine of res judicata, which prevents parties from relitigating issues that have already been decided by a competent court. The Court highlighted that res judicata embraces two concepts: bar by prior judgment and conclusiveness of judgment. In this case, the Court focused on the latter, which applies when a fact or question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction.

The Court found that the issue of confusing similarity between the marks and the issue of prior use had already been determined in favor of Emerald in previous cases. Therefore, H.D. Lee was barred from relitigating these issues in its application for trademark registration. The Court stated:

H.D. Lee argues that the principle of conclusiveness of judgment does not apply since no identity of issue exists between the instant petition, on one hand, and G.R. No. 195415, on the other. The Court finds the foregoing untenable as the issues all point to the registrability of the confusingly similar marks ‘DOUBLE CURVE LINES,’ ‘DOUBLE REVERSIBLE WAVE LINE,’ and ‘OGIVE CURVE DESIGN.’

The Court emphasized that prior use in commerce within the Philippines is a critical factor in establishing trademark ownership. Section 2-A of Republic Act No. 166 (the law then in force and effect) stated that ownership of a trademark is acquired through continuous commercial use. H.D. Lee’s argument that its international reputation should outweigh Emerald’s prior local use was rejected by the Court.

Moreover, the Court found that H.D. Lee had failed to prove that its ‘OGIVE CURVE DEVICE’ was well-known internationally and in the Philippines at the time Emerald filed its application for registration. The Court noted that H.D. Lee’s sale of garments in the Philippines only began in 1996, while Emerald had been using its marks since 1973 and 1980. This timeline was crucial in establishing Emerald’s prior rights.

The ruling also underscored the significance of the Intellectual Property Code (IPC), specifically Section 123.1(d), which prohibits the registration of a mark that is identical or confusingly similar to a registered mark with an earlier filing or priority date. This provision is designed to protect the rights of trademark owners and prevent consumer confusion.

The Supreme Court highlighted the importance of upholding final judgments to ensure an effective and efficient administration of justice. The Court quoted the case of Pryce Corporation v. China Banking Corporation, stating:

[W]ell-settled is the principle that a decision that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether it will be made by the court that rendered it or by the highest court of the land.

Furthermore, the decision serves as a reminder to lower courts to consider related cases and ensure consistency in judicial decisions. This vigilance is crucial to avoid judicial confusion and conflicting rulings.

The implications of this decision are significant for trademark law in the Philippines. It reinforces the principle that prior use in commerce within the Philippines is a critical factor in establishing trademark ownership. It also highlights the importance of the doctrine of res judicata in preventing the relitigation of issues that have already been decided. This ruling provides clarity for businesses seeking to register trademarks and underscores the need to conduct thorough searches to avoid infringing on existing trademark rights.

The Court’s decision rested on the application of several key legal principles. Firstly, the concept of prior use, which dictates that the first party to use a trademark in commerce generally has the right to register and protect that mark. Secondly, the doctrine of res judicata, specifically the principle of conclusiveness of judgment, which prevents parties from relitigating issues that have already been decided by a competent court. Lastly, the provisions of the Intellectual Property Code (IPC), which govern the registration and protection of trademarks in the Philippines. These principles collectively guide the Court’s reasoning and its ultimate decision in favor of Emerald Garment.

In conclusion, the Supreme Court’s decision underscores the importance of prior use and the principle of conclusiveness of judgment in trademark law. The Court firmly established that Emerald Garment Manufacturing Corporation’s prior use of its trademarks within the Philippines outweighed The H.D. Lee Company, Inc.’s international reputation. This ruling reinforces the significance of local commercial activity in trademark disputes and provides clarity for businesses seeking to register and protect their trademarks.

FAQs

What was the key issue in this case?	The key issue was whether H.D. Lee’s international reputation outweighed Emerald’s prior use and registration of similar trademarks in the Philippines, specifically concerning the registration of the ‘LEE & OGIVE CURVE DESIGN’ trademark.
What is the doctrine of res judicata?	Res judicata is a legal doctrine that prevents parties from relitigating issues that have already been decided by a competent court. It includes two concepts: bar by prior judgment and conclusiveness of judgment.
What is conclusiveness of judgment?	Conclusiveness of judgment applies when a fact or question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction. It only requires identity of parties and issues to apply.
Why did the Supreme Court rule in favor of Emerald Garment?	The Supreme Court ruled in favor of Emerald Garment because Emerald had established prior use and registration of its trademarks (‘DOUBLE REVERSIBLE WAVE LINE’ and ‘DOUBLE CURVE LINES’) in the Philippines before H.D. Lee sought to register its mark. Also, the issues of confusing similarity and prior use had already been decided in favor of Emerald in previous cases.
What is the significance of prior use in trademark law?	Prior use means that the first party to use a trademark in commerce generally has the right to register and protect that mark. It is a critical factor in establishing trademark ownership.
What is Section 123.1(d) of the Intellectual Property Code (IPC)?	Section 123.1(d) of the IPC prohibits the registration of a mark that is identical or confusingly similar to a registered mark with an earlier filing or priority date. This section aims to prevent consumer confusion and protect trademark owners’ rights.
When did H.D. Lee start selling garments in the Philippines?	H.D. Lee started selling garments in the Philippines in 1996, which was after Emerald had already been using its trademarks for several years.
What trademarks were at the center of the dispute?	The trademarks at the center of the dispute were Emerald Garment’s ‘DOUBLE REVERSIBLE WAVE LINE’ and ‘DOUBLE CURVE LINES,’ and H.D. Lee’s ‘LEE & OGIVE CURVE DESIGN.’

This landmark decision provides crucial guidance on the application of trademark law in the Philippines, especially in cases involving international brands and local businesses. The emphasis on prior use reinforces the importance of establishing a commercial presence within the Philippines to secure trademark rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Emerald Garment Manufacturing Corporation v. The H.D. Lee Company, Inc., G.R. No. 210693, June 07, 2017

June 7, 2017

Trademark Infringement: Likelihood of Confusion and the Secretary of Justice’s Discretion

In Forietrans Manufacturing Corp. v. Davidoff Et. Cie SA, the Supreme Court held that the Secretary of Justice committed grave abuse of discretion by disregarding evidence of trademark infringement and false designation of origin. The Court emphasized that determining probable cause for filing a criminal case is distinct from assessing probable cause for issuing a search warrant. This ruling underscores the judiciary’s power to intervene when executive decisions on probable cause are made arbitrarily, impacting businesses by ensuring that potential infringers are held accountable and preventing consumer deception through counterfeit products.

Counterfeit Cigarettes: When is a Brand ‘Confusingly Similar’ Enough to Prosecute?

The case revolves around Davidoff and Japan Tobacco, Inc. (JTI), who alleged that Forietrans Manufacturing Corporation (FMC) was producing counterfeit cigarettes. Acting on this suspicion, authorities executed search warrants on FMC’s premises, leading to the seizure of cigarettes labeled ‘DAGETA’ and ‘DAGETA International,’ along with cigarettes bearing similarities to JTI’s ‘Mild Seven’ brand. Davidoff and JTI filed complaints alleging trademark infringement and false designation of origin under the Intellectual Property Code of the Philippines. These complaints sparked a legal battle concerning the determination of probable cause and the extent of the Secretary of Justice’s discretion in evaluating evidence.

The Provincial Prosecutor initially dismissed the complaints, a decision affirmed by the Secretary of Justice, Raul M. Gonzalez. However, the Court of Appeals (CA) reversed these dismissals, finding that Secretary Gonzalez had gravely abused his discretion. The CA argued that Secretary Gonzalez improperly weighed evidence, a function reserved for trial courts. The central legal question thus became whether the CA erred in overturning the Secretary of Justice’s determination of no probable cause, thereby questioning the boundaries of executive discretion in preliminary investigations.

The Supreme Court sided with the Court of Appeals. It reiterated the definition of probable cause as facts sufficient to create a well-founded belief that a crime has been committed and that the respondent is likely guilty. It emphasized that only prima facie evidence is needed, meaning evidence that is facially sufficient to establish a claim or defense, unless rebutted. The Court acknowledged the general policy of non-interference with the executive branch’s determination of probable cause, stemming from the doctrine of separation of powers. However, this policy is not absolute.

The Supreme Court emphasized that courts can intervene when there is a clear showing of grave abuse of discretion. The term grave abuse of discretion refers to an exercise of judgment that is capricious, whimsical, or arbitrary, essentially equivalent to lacking jurisdiction. The Court cited Unilever Philippines, Inc. v. Tan, which established that dismissing a complaint despite ample evidence supporting probable cause constitutes grave error justifying judicial intervention. The Supreme Court found that Secretary Gonzalez’s actions met this threshold.

The Court criticized the Secretary of Justice for essentially reviewing the judge’s determination of probable cause for issuing search warrants, rather than focusing on the evidence presented during the preliminary investigation. The Supreme Court emphasized the distinct roles of a judge, who determines probable cause for issuing warrants, and a prosecutor, who assesses probable cause for filing a criminal case. The Court quoted the Joint Resolution:

As can be seen supra, Trocio’s affidavit was clearly insufficient to show probable cause to search FMC’s premises and look for fake JTI or [Davidoff] products.

x x x

It would seem that reason had taken leave of the senses. The undeniable fact, standing out like a sore thumb, is that the applicants never presented a single shred of proof to show probable cause for the issuance of a search warrant. It would have been laughable if not for the fact that persons were arrested and detained and properties were confiscated.

As can be seen, what began as a search for fake JTI and [Davidoff] products changed into a search for fake Dageta International cigarettes, then shifted to a sea[r]ch for fake Dageta cigarettes confusingly similar to Davidoff and finally shifted to fake mislabeled Dageta cigarettes. One can only wonder why the applications were granted without a shred of proof showing probable cause. The exception against unreasonable searches and seizures became the very weapon to commit abuses that the provision was designed to prevent.

The Court found that a prima facie case existed for both trademark infringement and false designation of origin. Section 155 of the Intellectual Property Code (IP Code) defines trademark infringement:

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

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

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth: Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether there is actual sale of goods or services using the infringing material.

The crucial element of infringement is the likelihood of confusion. The Court noted the complaint-affidavit alleged confusing similarity between Davidoff and Dageta cigarette packs. Samples presented during the preliminary investigation revealed notable similarities in the packaging:

Davidoff (Exhibit 1)	Dageta (Exhibit 2)
Octagonal designed pack	Octagonal designed pack
Black and red covering	Black and red covering
Silver coloring of the tear tape and printing	Silver coloring of the tear tape and printing
“Made in Germany by Reemtsman under license of Davidoff & CIE SA, Geneva”	“Made Germany under license of DAGETA & Tobacco LT”
Manufacturing Code imprinted on the base of the pack	Manufacturing Code imprinted on the base of the pack
Writing at the back says : “These carefully selected tobaccos have been skillfully blended to assure your pleasure” with the signature of Zino Davidoff	Writing at the back says: “These specifically selected tobaccos have been professionally blended to ensure highest quality” with Chinese letters underneath the name Dageta

While the names ‘Davidoff’ and ‘Dageta’ were distinct, the Court emphasized the similarities in packaging, indicating potential for consumer confusion. Successful infringement often involves subtle changes that confuse consumers while appearing different to courts. Similar logic applied to the JTI infringement case, where FMC allegedly manufactured cigarettes deceptively similar to ‘Mild Seven’ without authorization.

Concerning the charge of false designation of origin, Section 169 of the IP Code states:

Sec. 169. False Designations of Origin; False Description or Representation. –

1691. Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which:

(a) Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person; or

(b) In commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable to a civil action for damages and injunction provided in Sections 156 and 157 of this Act by any person who believes that he or she is or is likely to be damaged by such act.

Respondents claimed FMC illegally manufactured ‘DAGETA’ cigarettes labeled ‘Made in Germany’ despite being produced in the Philippines. Supporting this, they presented samples and an inventory of seized items, including manufacturing equipment. While FMC argued these were genuine imported cigarettes, the Court found enough evidence to suggest local manufacturing with misrepresented origin. Secretary Gonzalez’s dismissal of this charge, without factual or legal basis, further highlighted the abuse of discretion.

FAQs

What was the key issue in this case?	The key issue was whether the Secretary of Justice committed grave abuse of discretion in dismissing the complaints for trademark infringement and false designation of origin against Forietrans Manufacturing Corp.
What is “probable cause” in this context?	Probable cause refers to facts sufficient to create a well-founded belief that a crime has been committed and that the respondent is probably guilty, requiring only prima facie evidence.
What does “grave abuse of discretion” mean?	“Grave abuse of discretion” means an exercise of judgment that is capricious, whimsical, arbitrary, or an evasion of positive duty, essentially equivalent to lacking jurisdiction.
What is trademark infringement under the IP Code?	Trademark infringement involves using a reproduction, counterfeit, copy, or colorable imitation of a registered mark that is likely to cause confusion among consumers.
What is false designation of origin?	False designation of origin involves misrepresenting the geographic origin of goods, creating a false or misleading impression about where they are manufactured.
Why did the Court of Appeals reverse the Secretary of Justice’s decision?	The Court of Appeals reversed the Secretary of Justice’s decision because he improperly weighed the evidence, a function reserved for trial courts, and disregarded the evidence presented by the complainants.
What evidence suggested trademark infringement?	Evidence included samples of ‘DAGETA’ cigarettes with packaging strikingly similar to ‘Davidoff’ cigarettes and the unauthorized manufacturing of cigarettes similar to JTI’s ‘Mild Seven’ brand.
What was the significance of the cigarette packaging similarities?	The cigarette packaging similarities suggested that FMC was intentionally creating products that would confuse consumers into believing they were purchasing genuine ‘Davidoff’ cigarettes.
How did the Court view the ‘Made in Germany’ label on DAGETA cigarettes?	The Court found the ‘Made in Germany’ label on ‘DAGETA’ cigarettes suspicious, given that manufacturing equipment was found in FMC’s Philippine warehouse, suggesting a misrepresentation of origin.

The Supreme Court’s decision underscores the importance of thoroughly evaluating evidence in intellectual property cases. It reinforces the judiciary’s role in checking potential abuses of discretion by executive officials. This ruling has significant implications for businesses seeking to protect their trademarks, ensuring that the authorities seriously consider evidence of infringement and false advertising. This decision promotes fair competition and prevents consumer deception in the marketplace.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Forietrans Manufacturing Corp. v. Davidoff Et. Cie SA, G.R. No. 197482, March 06, 2017

March 6, 2017

Trademark Distinctiveness: How Similar is Too Similar? A Case of LOLANE vs. ORLANE

In a trademark dispute between Seri Somboonsakdikul and Orlane S.A., the Supreme Court reversed the Court of Appeals’ decision, allowing the registration of the trademark “LOLANE.” The IPO’s denial, affirmed by the CA, was based on the similarity between LOLANE and the already registered “ORLANE,” arguing potential consumer confusion. However, the Supreme Court emphasized the importance of distinctiveness and the absence of “colorable imitation” between the marks, focusing on visual and aural differences. This ruling clarifies the threshold for trademark similarity and protects a business’s ability to establish its own brand identity.

Brand Identity Under Scrutiny: Can LOLANE and ORLANE Coexist in the Beauty Market?

The heart of this case lies in the application for trademark registration of “LOLANE” by Seri Somboonsakdikul, intended for personal care products. Orlane S.A., already possessing the registered trademark “ORLANE” for similar goods, opposed this application. The primary contention revolved around whether the similarity between LOLANE and ORLANE would likely cause consumer confusion, potentially infringing on Orlane S.A.’s established brand. The Intellectual Property Office (IPO) initially sided with Orlane S.A., a decision later upheld by the Court of Appeals (CA), prompting Somboonsakdikul to elevate the case to the Supreme Court.

The legal framework governing this dispute is primarily the Republic Act No. 8293, also known as the Intellectual Property Code of the Philippines. Section 123.1 of this code outlines the conditions under which a trademark cannot be registered, particularly focusing on marks that are identical or confusingly similar to existing registered marks. This provision aims to protect brand owners from unfair competition and prevent consumer deception. The key question, therefore, is whether LOLANE is “confusingly similar” to ORLANE, as to deceive or cause confusion.

The IPO and CA decisions leaned heavily on the perceived similarity between the two marks, citing the shared ending “LANE,” their similar syllabic structure, and their use in relation to similar products. The CA applied the dominancy test, concluding that the suffix “LANE” was the dominant feature, leading to potential confusion. However, this approach was contested by Somboonsakdikul, who argued that the overall impression of the marks, including visual and aural differences, should be considered.

The Supreme Court, in its analysis, emphasized the importance of determining whether there is “colorable imitation” between the trademarks. Colorable imitation is defined as:

“such similarity in form, content, words, sound, meaning, special arrangement or general appearance of the trademark or trade name in their overall presentation or in their essential and substantive and distinctive parts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine article.”

The Court referenced its previous rulings in cases like Mighty Corporation v. E. & J. Gallo Winery, highlighting that the likelihood of confusion must be assessed by considering the resemblance between trademarks, the similarity of goods, the likely effect on purchasers, and other equitable considerations. While acknowledging the dominancy test, the Supreme Court differed in its application, focusing on the distinct visual and aural differences between LOLANE and ORLANE. The Court contrasted the plain block letters of ORLANE with the stylized presentation of LOLANE, where the letters “L” and “A” are conjoined.

Furthermore, the Supreme Court addressed the aural aspect, finding that the pronunciations of LOLANE and ORLANE differed significantly. It stated, regarding the differences of the marks in question:

“Appeals to the ear in pronouncing ORLANE and LOLANE are dissimilar. The first syllables of each mark, i.e., OR and LO do not sound alike, while the proper pronunciation of the last syllable LANE-“LEYN” for LOLANE and “LAN” for ORLANE, being of French origin, also differ.”

The Court also challenged the generalization that Filipinos would invariably pronounce ORLANE as “ORLEYN,” asserting that some consumers might be aware of the proper French pronunciation. This point underscores the Court’s focus on the overall impression and the potential for consumers to differentiate between the brands.

Moreover, the Supreme Court noted that the IPO had previously allowed the registration of “GIN LANE” for similar goods, indicating that the suffix “LANE” was not exclusively associated with ORLANE products. This demonstrated that LANE is a weak mark, commonly used by other sellers in the market. This decision highlights a critical aspect of trademark law: the need to protect unique brand identifiers while allowing common terms to be used in ways that do not create genuine confusion.

The Supreme Court’s decision has practical implications for both trademark applicants and existing brand owners. It emphasizes the importance of creating trademarks that are sufficiently distinct to avoid confusion. While similarities may exist, the overall impression, including visual and aural differences, must be considered. The decision also underscores the need for the IPO to maintain consistency in its rulings, taking into account previous registrations and the common use of certain terms in the market.

This case serves as a reminder that trademark law seeks to strike a balance between protecting established brands and fostering competition. The Supreme Court’s decision reflects a nuanced understanding of this balance, prioritizing distinctiveness and the absence of genuine consumer confusion. By focusing on the specific characteristics of the trademarks and the context in which they are used, the Court has provided valuable guidance for future trademark disputes.

FAQs

What was the key issue in this case?	The central issue was whether the trademark “LOLANE” was confusingly similar to the registered trademark “ORLANE,” thus preventing its registration under the Intellectual Property Code. The court assessed if the visual and aural similarities would likely cause consumer confusion.
What is “colorable imitation”?	“Colorable imitation” refers to similarities in trademarks that are close enough to deceive ordinary purchasers, leading them to believe they are buying the genuine product. This includes similarities in form, content, words, sound, meaning, or general appearance.
What is the dominancy test in trademark law?	The dominancy test focuses on the dominant features of competing trademarks that are most likely to cause confusion among consumers. It emphasizes the aural and visual impressions created by the marks, rather than a detailed analysis of all differences.
How did the Supreme Court apply the dominancy test in this case?	The Supreme Court, while using the dominancy test, disagreed with the lower courts’ emphasis on the suffix “LANE.” Instead, it focused on the distinct visual and aural differences between “LOLANE” and “ORLANE,” concluding that the marks were not confusingly similar.
What aural differences did the Court consider?	The Court noted that the first syllables, “OR” and “LO,” sound different, and the proper pronunciation of the last syllable “LANE” also varies. “LOLANE” ends with “LEYN,” while “ORLANE,” of French origin, ends with “LAN.”
Why did the Court consider the IPO’s previous registration of “GIN LANE”?	The Court cited the “GIN LANE” registration to show that the suffix “LANE” was not exclusively associated with ORLANE products. This suggested that the term was in common use and did not inherently create confusion.
What is the significance of the visual differences between the marks?	The visual differences, such as the stylized lettering of “LOLANE” (with conjoined L and A) versus the plain block letters of “ORLANE,” contributed to the Court’s finding of no colorable imitation. These differences help consumers distinguish the brands.
What factors did the Supreme Court weigh in its decision?	The Supreme Court considered the visual and aural differences, the common use of the suffix “LANE,” and the overall impression of the marks. It also noted that the absence of evidence proving LANE was particularly connected to respondent’s product.

The Supreme Court’s ruling in Seri Somboonsakdikul v. Orlane S.A. offers valuable insights into the complexities of trademark law and the importance of distinctiveness in brand identity. By prioritizing a comprehensive assessment of visual and aural differences, the Court has provided a balanced framework for evaluating potential consumer confusion and protecting the rights of trademark applicants.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: SERI SOMBOONSAKDIKUL vs. ORLANE S.A., G.R. No. 188996, February 01, 2017

February 1, 2017

Finality of Judgment vs. Probable Cause: Balancing Justice in Trademark Infringement Cases

The Supreme Court’s decision in Ferdinand V. Tomas v. Criminal Investigation and Detection Group addresses the conflict between the finality of a court decision and the pursuit of justice in intellectual property cases. While a prior ruling had quashed search warrants used against Tomas due to procedural defects, the Court clarified that this did not prevent the Department of Justice from pursuing charges of trademark infringement and unfair competition if sufficient independent evidence existed. The case underscores the principle that procedural errors in obtaining evidence do not automatically negate the possibility of establishing probable cause through other means.

When Justice and Final Decisions Collide: Can a Trademark Case Survive a Faulty Search?

This case stems from complaints filed by Myrna Uy Tomas against Ferdinand V. Tomas for violations of the Intellectual Property Code, specifically trademark infringement and unfair competition. Based on these complaints, the Criminal Investigation and Detection Group (CIDG) obtained search warrants to search Ferdinand’s business premises. However, these warrants were later quashed by the Court of Appeals (CA) because the applications for the warrants were not properly endorsed by the head of the Philippine National Police (PNP), as required by Supreme Court guidelines. The central legal question is whether the quashing of these search warrants, and the subsequent finality of that decision, prevents the Department of Justice (DOJ) from pursuing criminal charges against Ferdinand based on the same alleged violations of intellectual property law. Can the DOJ still proceed with the case if it has other evidence, independent of the evidence seized under the faulty search warrants?

The heart of the matter lies in the doctrine of finality of judgment, which dictates that a decision, once final, is immutable and unalterable. This principle ensures stability and prevents endless litigation. The Supreme Court has stated,

“[A] decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land. Any act which violates this principle must immediately be struck down.”

However, the Court also recognizes exceptions to this rule, such as correcting clerical errors, nunc pro tunc entries, void judgments, and situations where circumstances after the finality of the decision render its execution unjust. But none of these exceptions applied in this case regarding the faulty search warrants that had already been nullified.

The Court grappled with two conflicting CA decisions. The first, by the Sixth Division, declared the search warrants invalid. The second, by the Fourth Division, upheld their validity and found Ferdinand guilty of forum shopping. This latter decision was problematic because it effectively sought to overturn a final and executory judgment. The Supreme Court emphasized that the CA’s Fourth Division erred in ruling that the search warrants were valid, as this directly contradicted the final decision of the Sixth Division. The principle of immutability of judgment should have been respected.

Further complicating the matter was the issue of forum shopping. Forum shopping occurs when a party files multiple cases based on the same cause of action, seeking a favorable judgment in different courts. While the CA’s Fourth Division initially found Ferdinand guilty of forum shopping, the Supreme Court disagreed. The Court noted that Ferdinand had disclosed the pendency of the first case in his certification against forum shopping in the second case. Therefore, the CA was aware of the related case and could have dismissed the second petition outright if it believed forum shopping had occurred. The admission by Myrna Tomas that Ferdinand did, in fact, inform the CA further weakened the forum shopping argument. The court emphasized that the certification regarding non-forum shopping rules should be strictly complied with.

However, the Supreme Court clarified that the finality of the decision regarding the search warrants did not preclude the DOJ from pursuing the criminal charges against Ferdinand. Even though the evidence seized under the defective search warrants could not be used, the DOJ could still present other evidence to establish probable cause for trademark infringement and unfair competition. The Supreme Court emphasized that it maintains “a deferential attitude towards review of the executive’s finding of probable cause.” This deference stems from the constitutional powers granted to the executive branch and from practical considerations.

The Supreme Court also addressed the CA’s reliance on Administrative Matter No. 03-8-02-SC, which required the heads of certain agencies to personally endorse applications for search warrants. The Court clarified that this rule does not prohibit the delegation of this ministerial duty to assistant heads, citing Section 31, Chapter 6, Book IV of the Administrative Code of 1987. This section allows assistant heads and other subordinates to perform duties specified by their superiors, as long as it is not inconsistent with the law. This interpretation aligns with a more pragmatic approach to law enforcement. In this case, the CA’s original decision quashing the search warrants, premised on the lack of personal endorsement by the PNP Chief, was overly strict.

Moreover, the Court underscored that the essential requisites for a valid search warrant are: (1) probable cause; (2) personal determination of probable cause by the judge; (3) examination of the complainant and witnesses under oath; (4) testimony based on personal knowledge; and (5) particular description of the place to be searched and the items to be seized.

“SEC. 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.”

A mere defect in the application, such as the lack of personal endorsement, should not automatically invalidate a warrant if the other constitutional requirements are met. The overarching principle is that the finding of probable cause by the court should be given greater weight.

FAQs

What was the key issue in this case?	The central issue was whether the finality of a prior court decision quashing search warrants prevented the Department of Justice from pursuing criminal charges based on the same alleged violations of the Intellectual Property Code, specifically trademark infringement and unfair competition.
Why were the search warrants initially quashed?	The search warrants were quashed because the applications for the warrants were not properly endorsed by the head of the Philippine National Police (PNP), as required by Supreme Court guidelines at the time.
What is the doctrine of finality of judgment?	The doctrine of finality of judgment states that a decision, once it becomes final, is immutable and unalterable, and may no longer be modified, even if the modification is meant to correct errors of fact or law.
What is probable cause?	Probable cause is a reasonable ground for belief in certain alleged facts that would justify legal action, such as issuing a search warrant or filing criminal charges. It doesn’t require absolute certainty, but more than mere suspicion.
What is forum shopping?	Forum shopping occurs when a party files multiple cases based on the same cause of action, seeking a favorable judgment in different courts or tribunals. It is generally prohibited to prevent inconsistent rulings and to conserve judicial resources.
Did the Supreme Court find that forum shopping occurred in this case?	No, the Supreme Court found that Ferdinand Tomas did not engage in willful forum shopping because he disclosed the pendency of the first case in his certification against forum shopping in the second case.
Can the DOJ still file charges against Ferdinand Tomas?	Yes, the Supreme Court clarified that the DOJ is not barred from filing an information against Ferdinand for trademark infringement and unfair competition if it still finds probable cause, even without the evidence seized under the defective search warrants.
Can the head of an agency delegate the duty of endorsing search warrant applications?	Yes, the Supreme Court clarified that agency heads can delegate the ministerial duty of endorsing search warrant applications to their assistants, as long as it is not inconsistent with the law, according to Section 31, Chapter 6, Book IV of the Administrative Code of 1987.

In conclusion, the Supreme Court’s decision underscores the importance of respecting the finality of judgments while also allowing for the pursuit of justice when independent evidence exists. Procedural defects in obtaining evidence do not necessarily preclude the establishment of probable cause through other means. This ruling balances the need for legal certainty with the imperative of addressing intellectual property violations.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Ferdinand V. Tomas v. Criminal Investigation and Detection Group, G.R. No. 208090, November 9, 2016

November 9, 2016

Executive Power vs. Senate Authority: Validating the Madrid Protocol Under Philippine Law

The Supreme Court upheld the President’s ratification of the Madrid Protocol, concerning international trademark registration, as a valid executive agreement that doesn’t require Senate concurrence. This decision affirms the executive branch’s authority in international agreements related to administrative procedures already aligned with existing laws. The ruling clarifies the balance between executive and legislative powers in foreign affairs, ensuring the Philippines can efficiently participate in international trademark systems.

Trademarks on the World Stage: Did the President Overstep Authority by Joining the Madrid Protocol?

The Intellectual Property Association of the Philippines (IPAP) challenged the Philippines’ accession to the Madrid Protocol, arguing that it is a treaty requiring Senate concurrence under Section 21, Article VII of the Constitution. IPAP contended that the Protocol’s implementation conflicts with the Intellectual Property Code of the Philippines (IP Code), specifically Section 125, which mandates foreign trademark applicants to designate a Philippine resident agent. The core legal question was whether the President’s ratification of the Madrid Protocol as an executive agreement was constitutional, and whether its provisions clashed with existing domestic intellectual property laws.

The Supreme Court, in its decision, addressed IPAP’s challenge, first tackling the issue of locus standi, or legal standing. While initially doubtful of IPAP’s direct injury, the Court recognized the transcendental importance of the constitutional issues raised, thereby granting IPAP the standing to sue. The Court emphasized that the requirement of direct and material injury can be relaxed when the case involves paramount public interest, particularly when it questions the overreach of one government branch into another’s functions.

The Court then delved into the heart of the matter: the validity and constitutionality of the President’s ratification of the Madrid Protocol as an executive agreement. To resolve this, the Court distinguished between treaties and executive agreements. Treaties, as defined by Executive Order No. 459, Series of 1997, are international agreements requiring legislative concurrence after executive ratification, often involving political issues or changes in national policy. Executive agreements, on the other hand, are similar to treaties but do not require legislative concurrence, typically embodying adjustments of detail carrying out well-established national policies.

The landmark case of Commissioner of Customs v. Eastern Sea Trading provides guidance in differentiating the two, noting that agreements concerning trademark protection have historically been handled as executive agreements. The Court underscored the Department of Foreign Affairs’ (DFA) authority, under Executive Order No. 459, to determine whether an agreement should be treated as a treaty or an executive agreement. This determination is crucial in delineating the boundaries of executive power in international relations.

The Court then considered the state policy on intellectual property, as articulated in Section 2 of the IP Code. This section declares that an effective intellectual property system is vital for domestic development, technology transfer, foreign investment, and market access. Importantly, it expresses the State’s policy to streamline administrative procedures for registering patents, trademarks, and copyrights. It also empowers the Executive Branch to implement rules and regulations that enhance the registration process without amending the existing legal framework.

Section 2. Declaration of State Policy. – The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act.

The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of knowledge and information for the promotion of national development and progress and the common good.

It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines.

Crucially, the Supreme Court found no conflict between the Madrid Protocol and the IP Code. The Court emphasized that the method of trademark registration through the IPOPHL, as defined by the IP Code, is separate from the registration method through the WIPO, as outlined in the Madrid Protocol. The Court stated that comparing the two methods, governed by distinct registration systems, is misplaced. Section 125 of the IP Code requiring a resident agent, was misinterpreted by IPAP, the Court noted, that the provision does not grant anyone in particular the right to represent the foreign trademark applicant.

The Court also clarified the procedure for examination under the Madrid Protocol. It stated that the designation of a resident agent is required by the IPOPHL when refusing the registration of a mark, in submitting the Declaration of Actual Use, and in submitting the license contract. This requirement ensures that non-resident entities seeking protection under Philippine Intellectual Property Laws are subject to the country’s jurisdiction.

Moreover, the Supreme Court underscored that the Madrid Protocol does not amend or modify the IP Code regarding the acquisition of trademark rights. Applications under the Madrid Protocol are still examined according to the relevant national law. The IPOPHL will only grant protection to marks that meet local registration requirements. As such, the procedure outlined in the Madrid Protocol complements, rather than conflicts with, existing Philippine law.

FAQs

What was the key issue in this case?	The central issue was whether the President’s ratification of the Madrid Protocol as an executive agreement was constitutional, without the concurrence of the Senate. Additionally, the Court examined if the Protocol conflicted with the Philippine Intellectual Property Code.
What is the Madrid Protocol?	The Madrid Protocol is an international treaty that simplifies the process of registering trademarks in multiple countries through a centralized system. It allows trademark owners to file a single application in one language and pay one set of fees to protect their mark in numerous member states.
What is the difference between a treaty and an executive agreement?	Treaties require Senate concurrence and typically address political issues or changes in national policy, while executive agreements do not require such concurrence and usually involve adjustments that carry out established national policies. The key distinction lies in the level of legislative involvement required for ratification.
Did the Supreme Court find any conflict between the Madrid Protocol and the Philippine IP Code?	No, the Court found no conflict. It clarified that the Madrid Protocol complements the IP Code by providing an alternative method for international trademark registration, but it does not alter the substantive requirements for trademark protection under Philippine law.
Does the Madrid Protocol eliminate the need for a resident agent for foreign trademark applicants?	No, the Court clarified that the resident agent requirement under Section 125 of the IP Code is not entirely eliminated. Local representation is still necessary for certain actions, such as submitting the Declaration of Actual Use and dealing with oppositions to trademark registrations.
What is ‘locus standi’ and why was it an issue in this case?	Locus standi refers to legal standing, or the right to bring a case in court. It was initially an issue because IPAP’s direct injury was not immediately apparent, but the Court recognized the case’s transcendental importance, granting IPAP standing to sue.
What is the role of the Department of Foreign Affairs (DFA) in international agreements?	The DFA is responsible for determining whether an international agreement should be treated as a treaty or an executive agreement. This determination is based on the nature and scope of the agreement and its potential impact on national policy.
What is the significance of Section 2 of the IP Code in this case?	Section 2 of the IP Code outlines the State’s policy on intellectual property, including the streamlining of administrative procedures for registering trademarks. The Court cited this section to support the President’s authority to enter into the Madrid Protocol as an executive agreement.
What does it mean to streamline administrative procedures in the context of trademark registration?	Streamlining administrative procedures means simplifying and making the registration process more efficient. This can involve reducing bureaucratic hurdles, speeding up processing times, and using technology to improve accessibility and convenience for applicants.

In conclusion, the Supreme Court’s decision validates the President’s authority to enter into executive agreements, like the Madrid Protocol, that align with existing laws and policies. This ruling provides clarity on the division of powers between the executive and legislative branches in international affairs, particularly in the context of intellectual property rights. It also highlights the importance of an efficient and streamlined trademark registration system for promoting domestic development and attracting foreign investment.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Intellectual Property Association of the Philippines v. Hon. Paquito Ochoa, G.R. No. 204605, July 19, 2016

July 19, 2016

Balancing Freedom of the Press and Electoral Integrity: Rappler’s Right to Live Stream Debates

In a decision with significant implications for media freedom and electoral transparency, the Supreme Court ruled that Rappler, Inc. has the right to live stream presidential and vice-presidential debates, subject to standard copyright conditions. This decision underscores the importance of ensuring broad access to information during elections, reinforcing the principle that freedom of the press is crucial for an informed electorate. The Court balanced the rights of media organizations with the need to maintain the integrity of the electoral process, affirming that debates should be widely disseminated to empower voters.

Can Election Debate Agreements Limit Online Media’s Right to Report?

The case arose from a Memorandum of Agreement (MOA) for the 2016 presidential and vice-presidential debates, which Rappler, Inc. (petitioner) signed with the Commission on Elections (COMELEC) and other media networks. Rappler challenged specific provisions of the MOA that restricted its ability to live stream the debates online, arguing that these provisions violated its fundamental rights under the Constitution. The MOA granted certain privileges to “Lead Networks,” potentially disadvantaging other media outlets like Rappler, particularly regarding online streaming rights and the use of debate excerpts.

The contentious provisions, Part VI (C), paragraph 19 and Part VI (D), paragraph 20, stipulated conditions for online streaming and news reporting. Paragraph 19 stated that Lead Networks would “allow the debates they have produced to be shown or streamed on other websites,” subject to copyright conditions or separate negotiations. Paragraph 20 limited the use of debate excerpts for news reporting to a maximum of two minutes without the Lead Network’s consent. Rappler contended that these restrictions unduly limited its ability to provide real-time coverage and analysis of the debates, thereby infringing on its freedom of the press.

The Supreme Court acknowledged the urgency of the matter, given the imminent elections and the importance of the debates in informing the electorate. The Court referenced GMA Network, Inc. v. Commission on Elections, emphasizing that procedural technicalities should not impede the resolution of significant public interest issues, especially when time is a critical factor. The Court underscored the importance of the debates in informing the electorate of the candidates’ positions on vital issues. “[T]his Court has in the past seen fit to step in and resolve petitions despite their being the subject of an improper remedy, in view of the public importance of the issues raised therein.” The urgency to resolve this case was apparent considering that the televised debates had already started and only two of the scheduled four national debates remained to be staged.

Building on this, the Supreme Court then analyzed the MOA’s provisions concerning live broadcasting and online streaming. Part VI (C), paragraph 19 of the MOA, the Lead Networks were mandated to “allow the debates they have produced to be shown or streamed on other websites,” but “subject to copyright conditions or separate negotiations with the Lead Networks.” The use of the word “or” means that compliance with the “copyright conditions” is sufficient for petitioner to exercise its right to live stream the debates in its website.

The Court clarified that the “copyright conditions” are those limitations on copyright provided under Section 184.1(c) of the Intellectual Property Code (IPC):

SEC. 184. Limitations on Copyright. – 184.1 Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright:

(c) The reproduction or communication to the public by mass media of articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered in public if such use is for information purposes and has not been expressly reserved; Provided, That the source is clearly indicated; (Sec. 11, P.D. No. 49)

Applying this provision, the Court found that the debates fell under “addresses and other works of the same nature.” Therefore, the copyright conditions for the debates are: (1) the reproduction or communication to the public by mass media of the debates is for information purposes; (2) the debates have not been expressly reserved by the Lead Networks (copyright holders); and (3) the source is clearly indicated.

The Court emphasized that the MOA itself, by expressly allowing the debates to be shown or streamed on other websites, indicated that the Lead Networks had not “expressly reserved” the copyright. This meant that as long as Rappler complied with the conditions of using the material for information purposes and clearly indicating the source, it was entitled to live stream the debates. Once the conditions imposed under Section 184.1(c) of the IPC are complied with, the information – in this case the live audio of the debates -now forms part of the public domain. There is now freedom of the press to report or publicly disseminate the live audio of the debates. In fact, the MOA recognizes the right of other mass media entities, not parties to the MOA, to reproduce the debates subject only to the same copyright conditions. Such freedom of the press to report and disseminate the live audio of the debates is now protected and guaranteed under Section 4, Article III of the Constitution, which provides that “[N]o law shall be passed abridging the freedom x x x of the press.”

The Court also highlighted the importance of the debates in enabling voters to make informed choices, stating that the electorate should have the “opportunity to be informed of the candidates’ qualifications and track record, platforms and programs, and their answers to significant issues of national concern.” Thus, the political nature of the national debates and the public’s interest in the wide availability of the information for the voters’ education certainly justify allowing the debates to be shown or streamed in other websites for wider dissemination, in accordance with the MOA.

Thus, the Court directed the COMELEC Chairman to implement Part VI (C), paragraph 19 of the MOA, ensuring that the debates could be shown or live-streamed unaltered on Rappler’s and other websites, subject to the copyright condition that the source is clearly indicated. The Court’s decision underscores the importance of balancing copyright concerns with the fundamental right to freedom of the press and the public’s interest in accessing information during elections. This approach ensures that media organizations can effectively perform their role in informing the electorate, while also respecting the intellectual property rights of content creators.

In conclusion, the Supreme Court’s ruling in Rappler, Inc. v. Andres D. Bautista reinforces the principle that freedom of the press is essential for a well-informed electorate, particularly during election periods. By clarifying the conditions under which media organizations can live stream debates, the Court has struck a balance between protecting intellectual property rights and ensuring the widest possible dissemination of information on matters of public concern.

FAQs

What was the key issue in this case?	The central issue was whether Rappler, Inc. had the right to live stream presidential and vice-presidential debates, despite restrictions in the Memorandum of Agreement (MOA) it signed with COMELEC and other media networks. Rappler argued that the MOA provisions infringed on its freedom of the press.
What did the Supreme Court decide?	The Supreme Court ruled in favor of Rappler, holding that it had the right to live stream the debates, subject to the copyright condition that the source is clearly indicated. The Court directed the COMELEC Chairman to implement the MOA accordingly.
What part of the MOA was in dispute?	Part VI (C), paragraph 19 and Part VI (D), paragraph 20 of the MOA were in dispute. These provisions concerned online streaming rights and the use of debate excerpts for news reporting.
What is the Intellectual Property Code’s relevance to this case?	The Court referenced Section 184.1(c) of the Intellectual Property Code, which outlines limitations on copyright. This section allows the reproduction or communication of certain works for information purposes, provided the source is clearly indicated.
What are the “copyright conditions” mentioned in the ruling?	The “copyright conditions” require that the use of the debates is for information purposes, that the debates have not been expressly reserved by the Lead Networks, and that the source of the debates is clearly indicated. Compliance with these conditions allows live streaming.
Why did the Court emphasize the importance of the debates?	The Court emphasized that the debates are crucial for informing the electorate about the candidates’ qualifications, platforms, and positions on national issues. Ensuring wide access to this information is essential for a well-informed electorate.
How does this ruling affect other media organizations?	This ruling ensures that other media organizations can live stream the debates as long as they comply with the copyright conditions of using the material for information purposes and clearly indicating the source, promoting freedom of the press and wider access to information.
What was the legal basis for Rappler’s argument?	Rappler argued that the MOA provisions violated its fundamental rights under the Constitution, specifically its freedom of the press. It asserted that the restrictions unduly limited its ability to provide real-time coverage and analysis of the debates.

This decision sets a precedent for future elections, emphasizing the need for transparency and the importance of media freedom. By clarifying the rights of media organizations to disseminate information during elections, the Court has reaffirmed the principles of a well-informed and engaged electorate.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Rappler, Inc. v. Bautista, G.R. No. 222702, April 05, 2016

April 5, 2016

Protecting Broadcast Rights: Copyright Infringement and Fair Use in News Rebroadcasting

In the Philippines, broadcasting organizations have rights that are infringed upon by another entity broadcasting the copyrighted material without prior consent. This landmark Supreme Court case clarifies the nuances of copyright law concerning news footage, emphasizing that while news itself is not copyrightable, the manner of its expression in video footage is. The decision emphasizes the importance of securing authorization before rebroadcasting and establishes guidelines for fair use, thereby balancing the protection of intellectual property with the public’s right to information.

GMA Network’s News Broadcast: A Copyright Clash Over Angelo Dela Cruz’s Homecoming

This case revolves around the legal battle between ABS-CBN Corporation and GMA Network, Inc. concerning the alleged copyright infringement during the news coverage of the homecoming of overseas Filipino worker Angelo dela Cruz. The focal point of the dispute was GMA-7’s use of ABS-CBN’s news footage, which GMA-7 obtained via Reuters, during its broadcast. At the heart of this legal challenge is the question of whether GMA-7’s actions constituted a violation of ABS-CBN’s copyright, particularly considering the principles of fair use and the potential defense of good faith.

The central point of contention is whether ABS-CBN’s news footage of Angelo dela Cruz’s arrival is copyrightable under Philippine law. The Intellectual Property Code grants copyright protection to various forms of creative work, including audiovisual and cinematographic works. ABS-CBN argued that its news footage, which involved creative choices in framing shots, using images, graphics, and sound effects, constitutes an expression of news and is therefore subject to copyright protection. In contrast, GMA-7 contended that the arrival of Angelo dela Cruz was a newsworthy event and that the news footage itself lacked the necessary ingenuity to qualify for copyright protection.

The Supreme Court unequivocally stated that **news footage is copyrightable**, emphasizing the distinction between an idea or event and the expression of that idea or event. While the news event itself is not subject to copyright, the creative manner in which it is captured and presented is entitled to protection. The Court referenced Section 175 of the Intellectual Property Code, acknowledging that “news of the day and other miscellaneous facts having the character of mere items of press information” are not protected. It clarified, however, that **the expression of news, particularly when it undergoes a creative process, is entitled to copyright protection**.

The Court also considered the concept of **fair use** as a limitation on copyright protection. Section 185 of the Intellectual Property Code outlines the factors to be considered in determining whether the use of a copyrighted work constitutes fair use, including the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used, and the effect of the use upon the potential market for the copyrighted work. The Court acknowledged the Court of Appeals’ finding that GMA-7 aired a five-second footage of the ABS-CBN news coverage. Nevertheless, it deferred to the trial court the determination of whether the broadcast qualifies as fair use, underscoring the need for a comprehensive evaluation of the facts and circumstances involved.

In its analysis, the Supreme Court underscored the importance of broadcast organizations’ related or neighboring rights, which are rights equivalent to copyright. It recognized that the broadcasting of a news event requires the assignment of values for each second of broadcast or airtime, as broadcasting organizations generate revenue through the sale of time slots to advertisers based on market share. To protect these rights, **the unauthorized rebroadcasting of copyrighted material without the owner’s consent constitutes a violation of the Intellectual Property Code**.

The Supreme Court addressed the argument of good faith as a defense against criminal prosecution for copyright infringement, definitively stating that **good faith is not a defense** in this context. It held that Philippine copyright law prescribes strict liability for copyright infringement, regardless of mens rea or culpa. The Court emphasized that copyright infringement under the Intellectual Property Code is malum prohibitum, meaning that the act is prohibited by law, and the intent to commit the act is irrelevant. The Court contrasted this with jurisdictions that require intent for criminal copyright infringement, highlighting the Philippines’ emphasis on protecting intellectual property rights.

Moreover, the Court examined the liability of corporate officers and employees in cases of copyright infringement. While acknowledging that corporations have separate and distinct personalities from their officers, the Court reiterated that corporate officers and/or agents may be held individually liable for a crime committed under the Intellectual Property Code. However, **the criminal liability of a corporation’s officers or employees stems from their active participation in the commission of the wrongful act**; mere membership in the Board or being President per se does not mean knowledge, approval, and participation in the act alleged as criminal.

In this particular case, the Court found that while respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas actively participated in the infringement of ABS-CBN’s news footage, there was a lack of proof of actual participation by respondents Felipe Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, and Jessica A. Soho. As a result, the Court reinstated the Department of Justice Resolution as to respondents Dela Peña-Reyes and Manalastas, while absolving respondents Gozon, Duavit, Jr., Flores, and Soho from criminal liability.

This case showcases a balancing act. While the court recognizes intellectual property rights and aims to protect the market share of broadcasting companies, it also acknowledged fair use as an important limitation on copyright. Because this area requires careful judgment on a case-to-case basis, the defense of fair use should be threshed out during trial. In conclusion, this landmark case provides valuable insights into the intricacies of copyright law in the Philippines, particularly in the context of news broadcasting. It reinforces the importance of safeguarding intellectual property rights while also upholding the public’s right to information.

FAQs

What was the key issue in this case?	The key issue was whether GMA-7 infringed on ABS-CBN’s copyright by using its news footage of Angelo dela Cruz’s arrival, and whether good faith or fair use could be valid defenses.
Is news footage copyrightable in the Philippines?	Yes, the Supreme Court clarified that while news events themselves aren’t copyrightable, the specific expression of that news in video footage is protected. This includes the creative elements like camera angles, editing, and presentation.
What is fair use, and how does it apply to this case?	Fair use allows limited use of copyrighted material without permission for purposes like news reporting, commentary, or education. GMA-7 argued fair use because the footage was a short excerpt for news, but the Court left it for the trial court to determine if the use was indeed fair.
Is good faith a valid defense against copyright infringement?	No, the Supreme Court ruled that good faith is not a defense because copyright infringement is a malum prohibitum offense, meaning it’s illegal regardless of intent. The focus is on the act of infringement, not the intent behind it.
Can corporate officers be held liable for copyright infringement?	Yes, corporate officers can be held liable if they actively participated in the infringing act. However, mere membership in the board or holding a high position isn’t enough; there must be direct involvement.
What factors are considered in determining fair use?	The purpose and character of the use, the nature of the copyrighted work, the amount used, and the effect on the market value of the work are considered. These factors help balance copyright protection with public access.
What are broadcasting organizations’ neighboring rights?	Broadcasting organizations have neighboring rights, including the right to authorize or prevent rebroadcasting of their broadcasts. These rights protect their investment in creating and transmitting content.
What was the outcome for the individual respondents in this case?	The Supreme Court found probable cause against Grace Dela Peña-Reyes and John Oliver T. Manalastas due to their direct roles in the news broadcast. However, it absolved Felipe Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, and Jessica A. Soho due to a lack of evidence showing their direct participation in the infringement.

This decision underscores the importance of Philippine intellectual property law in protecting the rights of broadcasting organizations while balancing the need for fair use in reporting. It serves as a reminder to media entities to respect copyright laws and secure proper authorization before rebroadcasting content.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

March 11, 2015

Geographical Trademark and Unfair Competition: Protecting Business Identity in Real Estate

In Shang Properties Realty Corporation v. St. Francis Development Corporation, the Supreme Court ruled that Shang Properties did not commit unfair competition by using the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE.” This decision hinged on the geographically descriptive nature of the mark “ST. FRANCIS” and the lack of evidence proving Shang Properties intended to deceive the public or that St. Francis Development Corporation had established a secondary meaning for the mark.

Trademark Turf Wars: When Location Names Can’t Be Exclusively Claimed

The case began when St. Francis Development Corporation (SFDC), a real estate developer, accused Shang Properties of unfair competition and trademark infringement for using “ST. FRANCIS” in its property developments. SFDC argued it had established goodwill with the public through its use of the “ST. FRANCIS” mark in its St. Francis Square Commercial Center. Shang Properties countered that “ST. FRANCIS” was a geographically descriptive term, referring to the location of their projects on St. Francis Avenue and St. Francis Street (now Bank Drive) in Ortigas Center. This dispute reached the Intellectual Property Office (IPO), where initial rulings were mixed. Some BLA rulings favored SFDC, while others sided with Shang Properties, leading to appeals and consolidation of cases before the IPO Director-General.

The IPO Director-General reversed the BLA’s finding of unfair competition, stating that SFDC could not claim exclusive use of the “ST. FRANCIS” mark. He reasoned that the mark was geographically descriptive and that customers were unlikely to confuse the two companies’ projects simply because of the shared name. SFDC appealed this decision to the Court of Appeals (CA), which sided with SFDC, finding Shang Properties guilty of unfair competition and ordering them to cease using “ST. FRANCIS.” Shang Properties then elevated the case to the Supreme Court, challenging the CA’s ruling on unfair competition.

At the heart of the Supreme Court’s decision was an analysis of unfair competition under Section 168 of the Intellectual Property Code (IP Code). This section defines unfair competition as employing deception or bad faith to pass off one’s goods or services as those of another who has established goodwill. The key element is proving fraudulent intent, which the Court found lacking in this case. The Court referenced the case of Republic Gas Corporation v. Petron Corporation, reiterating that unfair competition involves “’the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public.’”

The Supreme Court emphasized that the CA erred in assuming SFDC had the exclusive right to use the “ST. FRANCIS” mark. The Court highlighted the mark’s geographically descriptive nature, referencing Great Southern Bank v. First Southern Bank, which states that “‘descriptive geographical terms are in the ‘public domain’ in the sense that every seller should have the right to inform customers of the geographical origin of his goods.” A geographically descriptive term identifies the location of origin, such as cities or streets, and is generally not subject to exclusive appropriation unless it has acquired a secondary meaning.

To establish a secondary meaning, a geographically descriptive mark must be associated by the public with a particular source rather than just a place. This concept was explained in Burke-Parsons-Bowlby Corporation v. Appalachian Log Homes, Inc. Section 123.2 of the IP Code specifies the requirements for establishing secondary meaning. These include substantial commercial use in the Philippines, distinctiveness resulting from such use, and proof of substantially exclusive and continuous commercial use for five years before claiming distinctiveness. Without establishing secondary meaning, Section 123.1(j) of the IP Code prevents the registration of geographically descriptive marks.

In this case, the Supreme Court found that SFDC failed to prove it had acquired a secondary meaning for the “ST. FRANCIS” mark. While SFDC had been using the mark since 1992, its use was primarily limited to its projects within Ortigas Center. This localized use did not demonstrate substantial commercial use throughout the Philippines, nor did it establish a clear association between the mark and SFDC’s enterprise in the minds of buyers. Even if secondary meaning had been acquired, the Court clarified that this alone does not automatically prove fraud, which is essential for unfair competition.

Considering the notoriety of the Shangri-La brand in real estate, the Court found that Shang Properties’ use of the marks was intended to identify their projects’ location, not to deceive the public. The IPO Director-General’s observation that “for these kinds of goods or services there can be no description of its geographical origin as precise and accurate as that of the name of the place where they are situated” further supported this conclusion. The Supreme Court therefore exonerated Shang Properties from the charge of unfair competition.

FAQs

What was the key issue in this case?	The key issue was whether Shang Properties committed unfair competition by using the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE,” considering St. Francis Development Corporation’s prior use of the “ST. FRANCIS” mark.
What is a geographically descriptive mark?	A geographically descriptive mark is a name or term that identifies the geographical origin of goods or services. These marks are generally not protectable unless they acquire a secondary meaning.
What is secondary meaning in trademark law?	Secondary meaning occurs when a geographically descriptive mark becomes associated in the public’s mind with a particular source or company rather than just the location itself. Establishing secondary meaning gives the mark owner exclusive rights to use the mark.
What are the requirements to prove secondary meaning?	To prove secondary meaning, the trademark owner must show substantial commercial use of the mark in the Philippines, distinctiveness resulting from such use, and substantially exclusive and continuous commercial use for five years before claiming distinctiveness.
What is unfair competition under the IP Code?	Unfair competition involves using deception or bad faith to pass off one’s goods or services as those of another who has established goodwill. A key element is proving the intent to deceive the public.
Why did the Supreme Court rule in favor of Shang Properties?	The Court ruled in favor of Shang Properties because the mark “ST. FRANCIS” was geographically descriptive, St. Francis Development Corporation failed to prove secondary meaning, and there was no evidence of intent to deceive the public.
What is the significance of the Shangri-La brand in this case?	The notoriety of the Shangri-La brand in the real estate industry diluted Shang Properties’ propensity to merely ride on St. Francis Development Corporation’s goodwill, supporting the conclusion that their use was to indicate location.
Can a geographically descriptive mark ever be registered?	Yes, a geographically descriptive mark can be registered if it has acquired a secondary meaning, meaning the public associates the mark with a specific source or company rather than just the location.

This case clarifies the limitations on protecting geographically descriptive trademarks and underscores the importance of proving secondary meaning and fraudulent intent in unfair competition claims. It reinforces the principle that businesses cannot exclusively claim geographic names unless they have successfully established a strong association between the name and their brand in the public’s mind.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Shang Properties Realty Corporation vs. St. Francis Development Corporation, G.R. No. 190706, July 21, 2014

July 21, 2014

Challenging Evidence: When Can You Question a Search in Intellectual Property Cases?

The Supreme Court has clarified the timing and grounds for challenging the admissibility of evidence obtained during an arrest, particularly in cases involving intellectual property violations. The Court ruled that objections to an arrest must be raised before entering a plea during arraignment. Failing to do so prevents the accused from later questioning the legality of the arrest, affecting the admissibility of any evidence seized as a result. This decision underscores the importance of timely raising constitutional rights issues in legal proceedings.

Counterfeit Brandy and Constitutional Rights: A Question of Evidence

This case revolves around Jay Candelaria and Eric Basit, who were arrested during a buy-bust operation for allegedly selling counterfeit Fundador Brandy. The central legal question is whether the evidence seized during their arrest should be admissible in court, considering the petitioners’ claim that their arrest and the subsequent search were unlawful. The Regional Trial Court (RTC) initially denied the petitioners’ Motion to Suppress/Exclude Evidence, leading them to file a Petition for Certiorari with the Supreme Court.

The petitioners argued that the evidence against them was obtained in violation of their constitutional right against unreasonable searches and seizures. They claimed they were not committing any crime at the time of their arrest, making the warrantless search and seizure invalid. However, the RTC, while acknowledging the need to object to an arrest before arraignment, based its decision on the arresting officers’ affidavit, which stated that the arrest was a valid warrantless arrest because the accused were caught *in flagrante delicto.*

The Supreme Court addressed the procedural and substantive aspects of the case. Procedurally, the Court emphasized the necessity of demonstrating the absence of other adequate legal remedies before resorting to a special civil action like certiorari. Specifically, the court stated that “[H]e must allege in his petition and establish facts to show that any other existing remedy is not speedy or adequate x x x.” This requirement ensures that certiorari is used only when other avenues for redress are insufficient.

Building on this procedural point, the Court found that the petitioners had failed to adequately demonstrate the lack of an appeal or any other plain, speedy, and adequate remedy. Citing *Visca v. Secretary of Agriculture and Natural Resources*, the Court reiterated that an applicant for certiorari must explicitly state facts showing the absence of other remedies, which is an indispensable requirement for a valid petition.

x x x [I]t is incumbent upon an applicant for a writ of certiorari to allege with certainty in his verified petition facts showing that “there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law,” because this is an indispensable ingredient of a valid petition for certiorari.

Substantively, the Court clarified the scope of certiorari, emphasizing that it is reserved for cases where a lower court acted without or in excess of jurisdiction, or with grave abuse of discretion. The Court held that in situations where the court has jurisdiction over the case and the parties, any mistake in the application of the law or appreciation of evidence constitutes an error in judgment, correctible only by appeal.

The writ of certiorari is restricted to truly extraordinary cases wherein the act of the lower court or quasi-judicial body is wholly void. Moreover, it is designed to correct errors of jurisdiction and not errors in judgment. The rationale of this rule is that, when a court exercises its jurisdiction, an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed.

The Court found that the RTC had jurisdiction over the case and the petitioners, thus any error in its interpretation of the law or assessment of evidence would be an error of judgment, not of jurisdiction. The determination of the admissibility of evidence, such as that obtained during a search, falls within the court’s jurisdiction. Any perceived error in this determination should be addressed through appeal, not certiorari.

The Supreme Court also addressed the issue of grave abuse of discretion, defining it as the capricious and whimsical exercise of judgment equivalent to an excess or lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. The Court found no such grave abuse of discretion on the part of the RTC, as the court thoroughly considered the pleadings and the joint affidavit submitted by the arresting officers before rendering its judgment.

Finally, the Court noted that the petitioners violated the principle of hierarchy of courts by directly appealing to the Supreme Court from the RTC. As stated in *Rayos v. City of Manila* : “A direct invocation of the Supreme Court’s original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition”. The Court emphasized that petitions for certiorari assailing interlocutory orders of the RTC should be filed with the Court of Appeals, unless special and important reasons justify a direct invocation of the Supreme Court’s original jurisdiction, which were not present in this case.

FAQs

What was the key issue in this case?	The key issue was whether the RTC committed grave abuse of discretion in denying the petitioners’ motion to suppress evidence obtained during an allegedly unlawful arrest for violating intellectual property laws.
What is a Motion to Suppress/Exclude Evidence?	A Motion to Suppress/Exclude Evidence is a request to a court to prohibit certain evidence from being presented in a trial, typically because it was obtained illegally or in violation of constitutional rights.
*What does “in flagrante delicto” mean?*	“In flagrante delicto” is a Latin term that means “caught in the act” of committing a crime. It is a legal justification for a warrantless arrest.
*What is a writ of certiorari?*	A writ of certiorari is a special civil action used to review decisions of lower courts or tribunals, typically on the grounds that they acted without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion.
*Why was the Petition for Certiorari* dismissed?**	The Petition was dismissed because the petitioners failed to allege that there was no appeal or any other plain, speedy, and adequate remedy available, and because the RTC’s decision was deemed an error of judgment, not of jurisdiction.
What is grave abuse of discretion?	Grave abuse of discretion is the capricious and whimsical exercise of judgment equivalent to an excess or lack of jurisdiction, or the exercise of power in an arbitrary or despotic manner.
What is the principle of hierarchy of courts?	The principle of hierarchy of courts dictates that cases should be filed with the lowest appropriate court, and higher courts should only be invoked when there are special and important reasons.
What was the violation the petitioners were initially charged with?	The petitioners were charged with violating Section 155 in relation to Section 170 of Republic Act No. 8293, also known as the Intellectual Property Code of the Philippines, for selling counterfeit Fundador Brandy.

This case serves as a reminder of the importance of adhering to procedural rules and understanding the proper scope of legal remedies. Litigants must raise objections to arrests and searches promptly and pursue appeals for errors in judgment, rather than resorting to certiorari without demonstrating the inadequacy of other remedies. Understanding this ruling is essential for ensuring protection of constitutional rights in intellectual property and other criminal cases.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Jay Candelaria and Eric Basit v. Regional Trial Court, G.R. No. 173861, July 14, 2014

July 14, 2014

Trademark Infringement: Upholding Search Warrants Based on Probable Cause in Intellectual Property Cases

The Supreme Court affirmed the validity of search warrants issued for trademark infringement and unfair competition, emphasizing the importance of probable cause in protecting intellectual property rights. The Court found that the applications for the search warrants were properly based on violations of the Intellectual Property Code and that the respondent, as the registered trademark owner, had the right to seek assistance from law enforcement to protect her rights. This decision reinforces the legal mechanisms available to trademark owners against counterfeit goods and unfair trade practices, ensuring that intellectual property rights are duly protected under Philippine law.

Counterfeit Soap Showdown: Did the Court of Appeals Correctly Overturn the Quashing of Search Warrants?

This case revolves around respondent Ling Na Lau, who operates Worldwide Pharmacy and holds the registered trademark for “TOP GEL T.G. & DEVICE OF A LEAF” papaya whitening soap. Believing that counterfeit versions of her product were being sold, Lau sought assistance from the National Bureau of Investigation (NBI). NBI Agent Furing, after conducting test buys at various drugstores, including those owned by the petitioners, confirmed the presence of counterfeit soaps. Based on this evidence, Agent Furing applied for and was granted search warrants by the Regional Trial Court (RTC) for violations of the Intellectual Property Code, specifically trademark infringement and unfair competition.

The petitioners, Century Chinese Medicine Co., et al., moved to quash the search warrants, arguing that their issuance violated the rule against forum shopping and that a prejudicial question existed in a related civil case. The RTC initially agreed with the petitioners, quashing the search warrants. However, the Court of Appeals (CA) reversed the RTC’s decision, reinstating the validity of the search warrants. The CA reasoned that the search warrants were applied for in anticipation of criminal actions and that the respondent had sufficiently demonstrated probable cause for trademark infringement and unfair competition.

The core legal question before the Supreme Court was whether the CA erred in reversing the RTC’s quashal of the search warrants. The petitioners contended that the products seized from their stores were not the fruits of any crime, arguing that they were legitimate distributors of “TOP GEL MCA,” a product owned by a different entity. They also claimed that the RTC had incorrectly applied rules on search and seizure for civil actions, a point they argued was only raised on appeal.

The Supreme Court upheld the CA’s decision, emphasizing that the applications for the search warrants were indeed for violations of the Intellectual Property Code, specifically Sections 155 and 168 in relation to Section 170. Section 155 of Republic Act (RA) No. 8293, penalizes trademark infringement:

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

Section 168, in relation to Section 170, penalizes unfair competition:

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

x x x x

168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

The Court further stated 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, was not applicable because the search warrants were applied for in anticipation of criminal actions. The Court also highlighted NBI Agent Furing’s affidavit, which stated that “the items to be seized will be used as relevant evidence in the criminal actions that are likely to be instituted.” Therefore, Rule 126 of the Rules of Criminal Procedure was the governing law.

Rule 126 of the Revised Rules of Court governs the issuance of search warrants, stating in Section 4:

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.

The Supreme Court emphasized that probable cause is a core requisite for a valid search warrant, defined as “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.” The Court noted that the affidavits of NBI Agent Furing and his witnesses, Esmael and Lau, clearly demonstrated that they were seeking protection for the trademark “TOP GEL T.G. and DEVICE OF A LEAF,” registered to Lau under Certificate of Registration 4-2000-009881.

While the petitioners claimed that they were distributing products owned by a different entity, with the trademark TOP GEL MCA and MCA DEVISE, the Court found that this was different from the trademark subject of the application. The Court also dismissed the argument that a prejudicial question existed in a related civil case, noting that the case had already been dismissed before the search warrants were applied for. Moreover, the Court pointed out that the Intellectual Property Office (IPO) had issued an order granting a writ of preliminary injunction against the entity that the petitioners claimed owned the TOP GEL MCA trademark. This injunction prohibited the entity from using the trademark “TOP GEL & DEVICE OF A LEAF” or any colorable imitation thereof.

The Supreme Court addressed the petitioners’ argument that confiscating thousands of products was excessive, stating that the object of the violation was the alleged counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap. Thus, confiscating all these articles was necessary to protect the registered owner’s rights.

The Court also dismissed the petitioners’ contention that the CA’s ruling was based on an argument raised for the first time on appeal. It noted that the petitioners had failed to object to the argument in their brief filed with the CA. The Supreme Court determined that there was no procedural error, as both parties had fully addressed the applicability of Rule 126 in their submissions to the appellate court.

FAQs

What was the key issue in this case?	The central issue was whether the Court of Appeals erred in reversing the Regional Trial Court’s decision to quash search warrants issued for trademark infringement and unfair competition related to counterfeit papaya whitening soap.
Who was the respondent in this case?	The respondent was Ling Na Lau, who operated Worldwide Pharmacy and held the registered trademark for “TOP GEL T.G. & DEVICE OF A LEAF” papaya whitening soap.
What intellectual property rights were at stake?	The primary intellectual property rights at stake were those associated with the trademark “TOP GEL T.G. & DEVICE OF A LEAF,” which was registered to the respondent.
What was the role of the NBI in this case?	The National Bureau of Investigation (NBI) was involved in conducting investigations and test buys to confirm the presence of counterfeit soaps, which led to the application for search warrants.
What is probable cause, and why is it important in this case?	Probable cause is the existence of facts and circumstances that would lead a reasonably prudent person to believe that an offense has been committed and that the objects sought are related to the offense. It is a crucial requirement for the valid issuance of a search warrant.
What rule governs the issuance of search warrants for criminal actions?	Rule 126 of the Revised Rules of Court governs the issuance of search warrants for criminal actions, requiring probable cause determined personally by a judge.
Why did the Supreme Court uphold the CA’s decision?	The Supreme Court upheld the CA’s decision because it found that the applications for search warrants were based on violations of the Intellectual Property Code and that the respondent had demonstrated probable cause for trademark infringement.
What was the significance of the IPO’s prior injunction?	The IPO’s prior injunction against another entity was significant because it notified the petitioners that they were prohibited from selling products bearing the trademark “TOP GEL & DEVICE OF A LEAF” or any imitation thereof.

The Supreme Court’s decision in this case reaffirms the importance of protecting intellectual property rights through the enforcement of search warrants based on probable cause. This ruling underscores the legal remedies available to trademark owners against those who engage in trademark infringement and unfair competition, thus safeguarding legitimate businesses and consumers alike.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: CENTURY CHINESE MEDICINE CO. VS. PEOPLE, G.R. No. 188526, November 11, 2013

November 11, 2013