Title
Unilever Philippines, Inc. vs. Tan
Case
G.R. No. 179367
Decision Date
Jan 29, 2014
NBI seized counterfeit shampoo from Paul D. Tan's office and warehouse. DOJ and CA dismissed charges, but SC ruled probable cause existed, ordering prosecution for unfair competition.
unfair competition
counterfeit shampoo products
dismissal of criminal complaint

Case Summary (G.R. No. 179367)

Factual Background

On January 17, 2002, agents of the National Bureau of Investigation applied for and obtained search warrants for an office on the third floor of Probest International Trading Building, Katipunan Street, Concepcion, Marikina City, and for a warehouse on Camia Street, Marikina City, premises alleged to be associated with the Respondent. During the searches the NBI seized numerous sachets and boxes of shampoo products alleged to be counterfeit, including multiple variants of Creamsilk and Sunsilk sachets from the office and hundreds of boxes from the warehouse. The NBI filed a complaint with the Department of Justice, docketed I.S. No. 2002-667, charging a violation of Section 168 (unfair competition) in relation with Section 170 of R.A. No. 8293.

Respondent’s Answer and Position at the DOJ

In his counter-affidavit the Respondent asserted that he was “Paul D. Tan,” not “Michael Tan,” that he operated a business selling leather goods under the registered trade name Probest International Trading, that he did not own or operate the Camia Street warehouse, and that the sachets seized from his office were genuine products for personal consumption. He denied involvement in the manufacture, distribution or sale of counterfeit Unilever products and denied commission of the offense charged.

Preliminary Investigation and Rulings of the DOJ

State Prosecutor Melvin J. Abad dismissed the complaint on December 18, 2002 for insufficiency of evidence, concluding that the petitioner failed to prove the Respondent’s actual and direct participation in the offense and that ownership of the warehouse was not established. The motion for reconsideration was denied on June 5, 2003. The petitioner filed a petition for review with the Department of Justice, which Acting Secretary Merceditas N. Gutierrez dismissed by resolution dated March 16, 2004; reconsideration was then denied.

Court of Appeals Proceedings

The petitioner filed a petition for certiorari under Rule 65 with the Court of Appeals on October 19, 2004, alleging grave abuse of discretion by the Acting Secretary of Justice and the DOJ. The Court of Appeals, by decision dated June 18, 2007, dismissed the petition for certiorari and mandamus for lack of merit, holding that the petitioner failed to establish acts constituting unfair competition and that the DOJ did not gravely abuse its discretion in finding no probable cause. The Court of Appeals denied the petitioner’s motion for reconsideration on August 16, 2007.

Issues Presented to the Supreme Court

The petitioner invoked Rule 45 to challenge the Court of Appeals’ June 18, 2007 decision and its August 16, 2007 resolution. The principal issue presented was whether the Court of Appeals committed reversible error in upholding the Acting Secretary of Justice’s dismissal of the complaint and whether there existed probable cause to indict the Respondent for unfair competition under R.A. No. 8293.

Petitioner’s Contentions in the Supreme Court

The petitioner argued that, irrespective of proof of ownership of the Camia Street warehouse, the volume and nature of the seized counterfeit shampoo products established that the Respondent owned or controlled the counterfeit goods and that those items, in their aggregate, sufficed to establish probable cause for unfair competition. The petitioner further relied on additional seizures and reports indicating continued operations involving counterfeit Unilever products.

Legal Standard on Probable Cause and Prosecutorial Discretion

The Court reiterated that the initial determination of probable cause to file an information is an executive function lodged primarily with the public prosecutor and ultimately with the Secretary of Justice, and that their findings ordinarily are not subject to judicial review. The Court cited controlling precedents, including Baron A. Villanueva, et al. v. Edna R. Caparas, G.R. No. 190969, and Callo-Claridad v. Esteban, G.R. No. 191567, for the broad discretion afforded prosecutors. The Court reiterated the narrow exception permitting judicial intrusion where there is grave abuse of discretion amounting to lack or excess of jurisdiction, as required by Art. VIII, Sec. 1, 1987 Constitution and elaborated in Elma v. Jacobi and First Women’s Credit Corp. v. Hon. Perez.

Supreme Court’s Evaluation of the Evidence

The Court reviewed the record and identified several facts and materials that it found sufficient to establish probable cause and that had not been given adequate weight below. Those included the NBI search results and joint affidavit, affidavits and complaint-affidavits such as those of Elmer Cadanos and Rene Baltazar, object evidence seized at both the office and warehouse, Unilever representatives’ claim that laborers present at the warehouse identified it as operated by Probest International Trading, photographs and documents, and a subsequent seizure of counterfeit Unilever shampoos from a warehouse in Antipolo City allegedly linked to the Respondent. The Court observed that one thousand two hundred thirty-eight assorted counterfeit products were seized from the Respondent’s office, and it found that the volume and placement of those items were inconsistent with a claim of personal consumption.

Application of the Probable Cause Standard to the Record

The Court applied the settled standard that probable cause requires only a reasonable ground to believe that a crime has been comm

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