G.R. No. 202423 - Uyco vs. Lo

Case Summary (G.R. No. 202423)

Factual Background

Vicente Lo alleged that he was the assignee of several marks owned by Gasirel and by assignment through it could assert rights in the marks HIPOLITO & SEA HORSE & TRIANGULAR DEVICE, FAMA, and related service marks and trade names appearing on kerosene burners. Lo contended that these marks had been used historically by Casa Hipolito S.A. Portugal and that a deed of assignment transferred rights to him for use outside Europe and America. Lo reported that a test buy from National Hardware yielded kerosene burners bearing the disputed marks and the designations "Made in Portugal" and "Original Portugal" on the wrappers, and that those burners were manufactured by Wintrade Industrial Sales Corporation without his authorization.

Complaint, Test Buy and Preliminaries

Lo filed a complaint for violation of Section 169.1, in relation with Section 170, of RA 8293 against officers of Wintrade, including the petitioners, and against officers of National Hardware, including Mario Sy Chua. Lo alleged confusion and deception among the buying public because Wintrade sold burners bearing marks and country-of-origin designations associated with Casa Hipolito while manufacturing the burners in the Philippines and without authorization from Casa Hipolito or from Lo as assignee.

Petitioners’ Pleadings and Evidence

The petitioners, admitting their status as officers of Wintrade, pleaded that Wintrade owned the subject trademarks and submitted certificates of registration from the Intellectual Property Office to support ownership. They asserted that Gasirel, not Lo, was the real party-in-interest. They maintained that Wintrade derived authority from Wonder, its predecessor-in-interest, and that Casa Hipolito had granted and later revoked authority to Wonder by a letter of cancellation dated May 31, 1993. The petitioners also argued that the designations "Made in Portugal" and "Original Portugal" were descriptive of the origin of the design or historical manufacture and were not intended to mislead as to the origin of the goods.

Testimony of National Hardware

Mario Sy Chua, owner of National Hardware, admitted that he had purchased products from Wintrade for about twenty years and that he had not been informed that Wintrade had lost authorization to deal in products bearing the subject marks. Chua stated that, had he been informed, he would have ceased dealing with Wintrade. His statement corroborated that the disputed markings had long appeared on burners supplied to National Hardware.

Admissions by the Petitioners

The petitioners executed a Joint Affidavit in which they acknowledged Wintrade’s historical association with Casa Hipolito S.A. Portugal and stated that Wintrade shifted to producing or procuring burners in the Philippines. They admitted the use of the words "made in Portugal" and "original Portugal" on wrappers and on the burners themselves and described those words as an allusion to the origin of the design and the history of manufacture rather than an assertion of current manufacture in Portugal. The petitioners maintained that such words were not intended to deceive the public.

Prosecutorial Determination of Probable Cause

After preliminary investigation, the Chief State Prosecutor found probable cause to indict the petitioners for violation of Section 169.1, in relation with Section 170, of RA 8293. The Prosecutor emphasized that the statute punishes using in commerce any false designation of origin likely to cause confusion as to the origin of goods and that the State may prosecute to protect the public interest irrespective of civil capacity of the complainant. The Prosecutor relied in part on the petitioners’ own admissions that their products were produced in the Philippines while bearing the words "Made in Portugal."

Department of Justice Resolution

The DOJ affirmed the finding of probable cause in its resolution dated September 1, 2008. The DOJ credited Lo’s assertion that he was the proper assignee of the marks and gave weight to the petitioners’ admission of placing "Made in Portugal" on products manufactured in the Philippines. The DOJ observed that if the petitioners had intended to refer only to the origin of the design or the history of manufacture, they should have expressed that more explicitly on packaging. The DOJ concluded that the petitioners’ defenses were better addressed at trial and that their admissions sufficed to establish probable cause.

Court of Appeals Review

The Court of Appeals reviewed the matter in CA-G.R. SP No. 111964 and found no grave abuse of discretion on the part of the DOJ in its determination of probable cause. The CA affirmed the DOJ resolution on March 9, 2012 and issued a resolution on June 21, 2012 upholding that conclusion.

Supreme Court Proceedings and Motion for Reconsideration

The petitioners sought relief in the Supreme Court, which issued a Resolution dated September 12, 2012 affirming the CA decision. The petitioners filed a motion for reconsideration dated October 22, 2012. Justice Brion authored the resolution denying reconsideration on January 28, 2013. The Supreme Court reiterated that the petitioners failed to demonstrate reversible error in the CA’s affirmance of the DOJ’s finding of probable cause.

Issues Presented

The principal questions were whether probable cause existed to charge the petitioners with false designation of origin under Section 169.1 of RA 8293, and whether the petitioners’ asserted defenses — chiefly that the designations referred only to the origin of the design and that the test-bought products were not manufactured by them — defeated probable cause.

The Court’s Reasoning on Probable Cause

The Supreme Court explained that probable cause requires facts and circumstances sufficient to warrant a person of ordinary prudence to believe a crime has been committed and that the accused committed it. The Court found that the petitioners’ own admissions and Chua’s statement provided those facts. The petitioners acknowledged Wintrade’s historical use of the marks, the later manufacture of burners in the Philippines, and the continued application of the designations "Made in Portugal" and "Original Portugal" to products manufactured domestically without authorization from Casa Hipolito. The Court held that these admissions and corroborating testimony supported the consistent findings of the State Prosecutor, the DOJ, and the CA that probable cause existed to charge the petitioners with fal

Case Syllabus (G.R. No. 202423)

Parties and Procedural Posture

Chester Uyco, Winston Uychiyong, and Cherry C. Uyco-Ong were petitioners as officers of Wintrade Industrial Sales Corporation in a criminal proceeding for trademark offenses.
Vicente Lo was the respondent and complainant who asserted rights as assignee of the disputed marks and who enlisted Philippine Burners Manufacturing Corporation as his agent.
The case proceeded from a preliminary investigation by the State Prosecutor to a resolution by the Department of Justice finding probable cause, which the Court of Appeals affirmed in CA-G.R. SP No. 111964, and from which the petitioners elevated the matter to this Court.
The petitioners filed a motion for reconsideration of this Court’s Resolution affirming the CA, which this Court denied in the present Resolution.

Key Factual Allegations

The disputed marks included HIPOLITO & SEA HORSE & TRIANGULAR DEVICE, FAMA, and related marks allegedly owned by Casa Hipolito S.A. Portugal and allegedly assigned to Vicente Lo.
Vicente Lo conducted a test buy at National Hardware, obtaining kerosene burners bearing the disputed marks and the designations Made in Portugal and Original Portugal on the wrappers.
The kerosene burners purchased in the test buy were manufactured in the Philippines by Wintrade, whose officers are the petitioners.
The petitioners admitted prior association with Casa Hipolito through a predecessor-in-interest and admitted continued use of the disputed marks and the phrases Made in Portugal and Original Portugal on locally manufactured burners.

Evidence and Admissions

The petitioners submitted certificates of registration from the Intellectual Property Office asserting ownership of the marks as part of Wintrade’s evidence.
The petitioners executed a Joint Affidavit admitting that Wintrade manufactured burners in the Philippines and used the phrases Made in Portugal and Original Portugal as allusions to the origin of the design and manufacturing history.
Mario Sy Chua, owner of National Hardware, admitted he had purchased burners from Wintrade for about twenty years and was not informed that Wintrade had lost authority to use the disputed marks.

Statutory Framework

The case invoked Sections 169.1 and 170 of RA 8293 as the criminal basis for the prosecution.
Section 169.1 of RA 8293 penalizes the use in commerce of any false designation of origin or false or misleading representation likely to cause confusion or deception as to the origin or affiliation of goods.
Section 170 of RA 8293 prescribes penalties of imprisonment and fines independent of civil and administrative sanctions for violations specified in Section 169.1.

Issues Presented

Whether probable cause existed to charge the petitioners with false designation of origin under Sections 169.1 and 170 of RA 8293.
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