Case Digest (G.R. No. 202900)
Facts:
Sao Paulo Alpargatas S.A. v. Kentex Manufacturing Corporation and Ong King Guan, G.R. No. 202900, February 17, 2021, Supreme Court Third Division, Hernando, J., writing for the Court.
Petitioner is Sao Paulo Alpargatas S.A. (SPASA), owner and manufacturer of the Havaianas footwear brand and holder of various registered marks and logos for Havaianas in the Philippines. Respondents are Kentex Manufacturing Corporation (Kentex) and its president Ong King Guan (Ong), manufacturers and distributors of footwear branded Havana, with warehouses in Caloocan and Valenzuela.
The NBI investigated SPASA’s complaint of alleged counterfeit Havaianas after SPASA’s counsel lodged a letter-complaint on August 12, 2010. An NBI investigative team reported finding slippers bearing markings “Havana” or “Havaianas” and observed delivery activity at Kentex’s warehouse. On September 6, 2010, NBI Agent Terrence Agustin obtained Search Warrant Nos. 10-16378 to 10-16381 from the Regional Trial Court (RTC) of Manila, Branch 7, following an ex parte presentation of sample products and affidavits. Implementation of the warrants led to seizure of respondents’ products.
Respondents moved in the RTC to quash the search warrants and to return seized goods, submitting a Certificate of Copyright Registration (1995) for “Havana Footwear” and IPO filings including trademark and industrial-design applications. SPASA opposed, producing multiple certificates of registration for the Havaianas word and logo marks and filed petitions before the Intellectual Property Office (IPO) to cancel respondents’ industrial-design registrations and a complaint for trademark infringement and unfair competition. The IPO later (June 1, 2012) granted SPASA a writ of preliminary injunction.
The RTC denied respondents’ Motion to Quash in an order dated December 16, 2010, later denying reconsideration on February 28, 2011, finding probable cause for the search warrants based on confusing similarity and colorable imitation of SPASA’s marks. Respondents sought certiorari relief in the Court of Appeals (CA).
The CA, in a February 10, 2012 Decision (CA-G.R. SP No. 119379), reversed the RTC orders and ordered return of the seized items, reasoning that respondents held registered industrial-design rights whose validity was presumed pending cancellation proceedings and that seizure could not be used to confiscate an apparent legitimate right to pursue livelihood. SPASA’s motion for reconsideration before the CA was denied on July 10, 2012. SPASA filed a Petition for Review on Certiorari under Rule 45 to the Supreme Court contesting the CA’s treatment of the industrial-design registrations, the application of tests for confusion, and whether the search warrants were premature.
Subsequent to the CA decision, the IPO issued Decision Nos. 2013-244 and 2013-243 (dated December 20, 2013) cancelling respondents’ industrial-design registrations for “Slipper” and “Sole,” finding prior art in SPASA’s earlier-registered Havaianas designs. Later, on March 28, 2019, the parties executed a Settlement Agreement and related Undertakings in which respondents admitted SPASA’s exc...(Pro-only)
Issues:
- Is the Petition for Review on Certiorari moot and academic by reason of the parties’ Settlement Agreement and Undertakings?
- (If not moot) Was the issuance of Search Warrant Nos. 10-16378 to 10-16381 valid — i.e., was there probable cause to support the warrants and was quashal proper given the parties’ competing registrations and pendin...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)