G.R. No. 154491 - Coca-Cola Bottlers, Philippines, Inc. vs. Gomez

Parties and Allegations
Coca-Cola Bottlers, Philippines, Inc. (Coca-Cola) accuses Pepsi Cola Products Philippines, Inc., represented by respondents Quintin J. Gomez and Danilo E. Galicia, of hoarding empty Coca-Cola bottles in bad faith to discredit and sabotage its bottling operations in Bicolandia.
Coca-Cola bases its application on Section 168.3(c) of the Intellectual Property Code (IP Code), alleging that such hoarding constitutes unfair competition.

Application for Search Warrant
On July 2, 2001, Coca-Cola filed before MTC Judge Julian C. Ocampo Search Warrant No. 2001-01 to seize approximately 2,500 Litro and 3,000 eight- and 12-ounce empty Coke bottles found in Pepsi’s Naga City yard.
Coca-Cola submitted sworn statements of:

Arnel John Ponce, plant representative who heard of bottles seen in Pepsi shells;
Ylano A. Regaspi, acting security officer who investigated reports and was told by a guard of large-scale hoarding;
Edwin Lirio, security guard who personally entered Pepsi’s yard and saw the bottles at 4 p.m. on July 2.

Municipal Trial Court Proceedings
After personal examination of witnesses, Judge Ocampo found probable cause and issued the warrant; police seized 2,464 Litro and 4,036 smaller empty Coke bottles, plus 205 Pepsi Litro shells and 168 Pepsi smaller-bottle shells.
Pepsi’s officers filed counter-affidavits arguing the bottles were innocently returned by retailers, the affidavits were hearsay, no crime of possessing empty bottles exists, and the warrant was procedurally defective. Their motions to quash the warrant and for return of shells were denied on September 19 and November 14, 2001.

Regional Trial Court Proceedings
Respondents petitioned for certiorari under Rule 65, claiming lack of probable cause and non-commission of the charged offense. On May 8, 2002, RTC Branch 21 annulled Search Warrant No. 2001-01 and voided the MTC orders, directing return of all seized property.
The RTC denied Coca-Cola’s motion for reconsideration (July 12, 2002). Coca-Cola then filed a Rule 45 petition with the Supreme Court.

Substantive Issue: Does the hoarding of a competitor’s empty bottles constitute unfair competition under IP Code Section 168.3(c)?
Procedural Issue: Did the MTC comply with Rule 126 of the Rules of Court in personally examining witnesses, establishing probable cause, and particularly describing the place and items to be seized?