Title
Tan vs. Bausch and Lomb, Inc.
Case
G.R. No. 148420
Decision Date
Dec 15, 2005
Petitioners charged with trademark infringement for counterfeit RAY BAN sunglasses; jurisdictional dispute between RTC and MTCC resolved in favor of RTC, citing administrative orders. Procedural lapses excused for substantial justice.
transfer of criminal case
distribution
sale

Case Summary (G.R. No. 148420)

Factual Background

The information alleged that, on or about June 27, 1996, petitioners—identified as personnel associated with Best Buy Mart, Inc.—conspired and mutually helped each other to distribute and sell counterfeit RAY BAN sunglasses bearing the appearance and trademark of RAY BAN. It further alleged that petitioners sold the counterfeit goods within the store where they exercised direct control, supervision, and management, thereby inducing the public to believe that the goods were those of Bausch & Lomb, Inc., the exclusive owner and user of the trademark RAY BAN on sunglasses.

The information charged petitioners with violation of paragraph 1, Article 189 of the RPC, a crime for which the RPC provided a penalty of prision correccional in its minimum period or a fine ranging from P500.00 to P2,000.00, or both.

Administrative Orders and the Motion to Transfer

Respondent moved to transfer the case to Branch 9, RTC, Cebu City on January 21, 1998. It relied on Administrative Order No. 113-95, which had designated Branch 9 as a special court in Region VII to handle violations of intellectual property rights. That administrative framework was important to the respondent’s position that the RTC—through a designated special branch—had jurisdiction over the offense.

Petitioners opposed the transfer and, on March 2, 1998, filed a motion to quash the information, alleging that the RTC had no jurisdiction because, under the penalty in the RPC, the offense was within the jurisdiction of the Municipal Trial Court in Cities (MTCC). Respondent countered by invoking later issuances: it argued that Batas Pambansa Blg. 129 (BP 129) had transferred exclusive jurisdiction over violations of intellectual property rights from the MTC and MTCC to the RTC, and that the Supreme Court had issued Administrative Order No. 104-96, which deleted and withdrew the designation of certain MTC and MTCC branches as special intellectual property courts.

Trial Court Proceedings and the Motion to Quash

On December 22, 1998, Branch 21 denied respondent’s motion to transfer and granted petitioners’ motion to quash, thereby dismissing the case. The trial court reasoned that petitioners were charged under Article 189 of the RPC and that the penalty fell within prision correccional in its minimum period or a fine between P500.00 and P2,000.00, or both. It concluded that this placement meant the offense was within the jurisdiction of the metropolitan and municipal trial courts under Section 32(2), BP Blg. 129, as amended.

The trial court then held that Administrative Orders Nos. 113-95 and 104-96 could not prevail over the “express provisions” of BP 129 because jurisdiction over courts was a matter of substantive law. It added that if Branch 21 had no jurisdiction, neither would Branch 9 of the same RTC, and thus the motion to transfer had to fail.

The Rule 65 Petition and Petitioners’ Challenge to Its Admission

After respondent received the dismissal order on January 21, 1999, it filed neither an appeal nor a motion for reconsideration. Instead, it filed a petition for certiorari in the Court of Appeals on March 23, 1999, which the petitioners characterized as filed one day beyond the period allowed by Section 4, Rule 65. Petitioners argued that the Court of Appeals should have dismissed the petition due to respondent’s procedural lapses and the failure to exhaust ordinary remedies.

The Court of Appeals nevertheless gave due course to the petition and vacated the trial court’s order, ordering the transfer of Criminal Case No. CBU-45890 to Branch 9, RTC, Cebu City, and directing transmission of the records.

Issues on Review

In the present petition, petitioners raised two main issues: first, that the Court of Appeals erred in not dismissing the certiorari petition despite respondent’s procedural defects and the late filing; and second, that the Court of Appeals erred in overturning the trial court’s ruling that the RTC had no jurisdiction over the Article 189 offense.

Legal Standards on Procedural Lapse and Due Course

The Court held that petitioners’ first assignment of error lacked merit. The Court recognized that, as a general rule, certiorari cannot substitute for appeal and that strict compliance with procedural requirements is ordinarily expected. It further acknowledged that the acceptance of a Rule 65 petition is generally within the discretion of the court and that technical rules may be relaxed in exceptional circumstances.

The Court explained that even without a motion for reconsideration, a certiorari petition may be given due course under recognized special circumstances. Among these exceptions is when the order assailed is a patent nullity and when jurisdiction was squarely raised, submitted to, met, and decided by the lower court. The Court also treated the one-day delay as excusable based on equity, particularly to avoid a manifest miscarriage of justice and to afford the respondent a chance to establish the merits of the complaint.

Accordingly, the determinative question narrowed to whether jurisdiction over the crime charged was vested on the RTC.

Supreme Court Rule-Making Power and Jurisdiction Over Intellectual Property Cases

The Court grounded its analysis on the constitutional framework for procedure and court organization. It cited Section 5(5) of the 1987 Constitution, which empowers the Supreme Court to promulgate rules concerning pleading, practice, and procedure in all courts, subject to limitations: the rules must (a) provide a simplified and inexpensive procedure for the speedy disposition of cases; (b) be uniform for all courts of the same grade; and (c) not diminish, increase, or modify substantive rights.

The Court rejected the argument that the Supreme Court’s administrative issuances exceeded Congress’s power. It held that Administrative Order No. 113-95 was designed to designate special intellectual property courts to promote efficient administration of justice and ensure speedy disposition. It further held that Administrative Order No. 104-96 was issued pursuant to Section 23 of BP 129, which transferred jurisdiction over intellectual property crimes from the MTC and MTCC to the RTC. It also held that A.O. No. 104-96 expressly gave the Supreme Court authority to designate certain RTC branches to handle special cases in the interest of speedy and efficient administration of justice.

The Court thus concluded that the RTC possessed exclusive and original jurisdiction over intellectual property cases covered by these issuances. It emphasized that the transfer of jurisdiction from the MTC and MTCC to the RTC did not impair substantive rights because the administrative orders did not change the definition or scope of the offense charged. It ruled that both administrative orders had the force and effect of law because they were validly issued in the exercise of the Supreme Court’s constitutional rule-making authority.

Improper Collateral Attack and Patent Nullity of the Trial Court’s Order

The Court further held that Branch 21 should have followed the later A.O. No. 104-96, which vested jurisdiction over the case on the RTC. It characterized the trial court’s contrary approach as grave abuse of discretion.

In addition, the Court declared the trial court’s order a patent nullity. It held that, in resolving incidents of a motion to transfer and motion to quash, the trial court should not have allowed petitioners to collaterally attack the validity of A.O. Nos. 113-95 and 104-96. The Court reiterated the presumption of validity of laws and rules having

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