Century Chinese Medicine V People

THIRD DIVISION [G.R. No. 188526. November 11, 2013.) CENTURY CHINESE MEDICINE CO., MING SENG CHINESE DRUGSTORE, XIANG JIAN CHINESE DRUG STORE, TEK SAN CHINESE DRUG STORE, SIM SIM CHINESE DRUG STORE, BAN SHIONG TAY CHINESE DRUG STORE and/or WILCENDO TAN MENDEZ, SHUANG YING CHINESE DRUGSTORE, and BACLARAN CHINESE DRUG STORE, petitioners, vs. PEOPLE OF THE PHILIPPINES and LING NA LAU, respondents. DECISION PERALTA, / : Before us is a petition for review on certiorari which seeks to reverse and set aside the Decision 1 dated March 31, 2009 of the Court of Appeals in CA-G.R. CV No. 88952 and the Resolution 2 dated July 2, 2009, which denied reconsideration thereof. The CA reversed the Order 3 dated September 25, 2006 of the Regional Trial Court (RTC), Branch 143, Makati City, quashing Search Warrants Nos. 05-030, 05-033, 05-038, 05-022, 05-023, 05-025, 05-042 and 05-043, and the Order 4 dated March 7, 2007 denying reconsideration thereof. The antecedent facts are as follows: Respondent Ling Na Lau, doing business under the name and style Worldwide Pharmacy, 5 is the sole distributor and registered trademark owner of TOP GELT.G. & DEVICE OF A LEAF papaya whitening soap as shown by Certificate of Registration 4-2000-009881 issued to her by the Intellectual Property Office (IPO) for a period of ten years from August 24, 2003. 6 On November 7, 2005, her representative, Ping Na Lau, (Ping) wrote a letter 7 addressed to National Bureau of Investigation (NBI) Director Reynaldo Wycoco, through Atty. Jose Justo Yap and Agent Joseph G. Furing (Agent Furing), requesting assistance for an investigation on several drugstores which were selling counterfeit whitening papaya soaps bearing the general appearance of their products. Agent Furing was assigned to the case and he executed an affidavit 8 stating that: he conducted his own investigation, and on November 9 and 10, 2005, he, together with Junayd Esmael (Esmael), were able to buy whitening soaps bearing the trademark "TOP-GEL", "T.G." & "DEVICE OF A LEAF" with corresponding receipts from a list of drugstores which included herein petitioners Century Chinese Medicine Co., Min Seng Chinese Drugstore, Xiang Jiang Chinese Drug Store, Tek San Chinese Drug Store, Sim Sim Chinese Drug Store, Ban Shiong Tay Drugstore, Shuang Ying Chinese Drugstore, and Baclaran Chinese Drug Store; while conductingthe investigation and test buys, he was able to confirm Ping's complaint to be true as he personally saw commercial quantities of whitening soap bearing the said trademarks being displayed and offered for sale at the said drugstores; he and Esmael took the purchased items to the NBI, and Ping, as the authorized representative and expert of Worldwide Pharmacy in determining counterfeit and unauthorized reproductions of its products, personally examined the purchased samples, and issued a Certification 9 dated November 18, 2005 wherein he confirmed that, indeed, the whitening soaps bearing the trademarks "TOP-GEL", "T.G." & "DEVICE OF A LEAF" from the subject drugstores were counterfeit. Esmael also executed an affidavit 10 corroborating Agent Furing's statement. Pings affidavit 11 stated that upon his personal examination of the whitening soaps purchased from petitioners bearing the subject trademark, he found that the whitening soaps were different from the genuine quality of their original whitening soaps with the trademarks "TOP-GEL", "T.G." & "DEVICE OF A LEAF" and certified that they were all counterfeit. On November 21, 2005, Agent Furing applied for the issuance of search warrants before the Regional Trial Court (RTC), Branch 143, Makati City, against petitioners and other establishments for violations of Sections 168 and 155, both in relation to Section 170 of Republic Act (RA) No. 8293, otherwise known as the /ntellectual Property Code of the Philippines. Section 168, in relation to Section 170, penalizes unfair competition; while Section 155, in relation to Section 170, punishes trademark infringement. On November 23, 2005, after conducting searching questions upon Agent Furing and his witnesses, the RTC granted the applications and issued Search Warrants Nos. 05-030, 05-033, and 05-038 for unfair competition and Search Warrants Nos. 05-022, 05-023, 05-025, 05-042 and 05-043 for trademark infringement against petitioners. On December 5, 2005, Agent Furing filed his Consolidated Return of Search Warrants. 12 On December 8, 2005, petitioners collectively filed their Motion to Quash 23 the Search Warrants contending that their issuances violated the rule against forum shopping; that Benjamin Yu (Yu) is the sole owner and distributor of the product known as "TOP-GEL"; and there was a prejudicial question posed in Civil Case No. 05-54747 entitled Zenna Chemical Industry v. Ling Na Lau, et al., pending in Branch 93 of the RTC of Quezon City, which is a case filed by Yu against respondent for damages due to infringement of trademark/tradename, unfair competition with prayer for the immediate issuance of a temporary restraining order and/or preliminary prohibitory injunction. On January 9, 2006, respondent filed her Comment/Opposition 14 thereto arguing the non-existence of forum shopping; that Yu is not a party-respondent in these cases and the pendency of the civil case filed by him is immaterial and irrelevant; and that Yu cannot be considered the sole owner and distributor of "TOP GELT.G. & DEVICE OF A LEAF." The motion was then submitted for resolution in an Orderdated January 30, 2006. During the pendency of the case, respondent, on April 20, 2006, filed a Submission 15 in relation to the Motion to Quash attaching an Order 36 dated March 21, 2006 of the IPO in IPV Case No. 10-2005-00001 filed by respondent against Yu, doing business under the name and style of MCA Manufacturing and Heidi S. Cua, proprietor of South Ocean Chinese Drug Stores for trademark infringement and/or unfair competition and damages with prayer for preliminary injunction. The Order approved therein the parties’ Joint Motion to Approve Compromise Agreement filed on March 8, 2006. We quote in its entirety the Order as follows: The Compromise Agreement between the herein complainant and respondents provides as follows: 1. Respondents acknowledge the exclusive right of Complainant over the trademark TOP GEL T.G. & DEVICE OF A LEAF for use on papaya whitening soap as registered under Registration No. 4-2000- 009881 issued on August 24, 2003. 2. Respondents acknowledge the appointment by Zenna Chemical Industry Co., Ltd. of Complainant as the exclusive Philippine distributor of its products under the tradename and trademark TOP GEL MCA & MCA DEVICE (A SQUARE DEVICE CONSISTING OF A STYLIZED. REPRESENTATION OF A LETTER "M" ISSUED OVER THE LETTER "CA") as registered under Registration No. 4-1996-109957 issued on November 17, 2000, as well as the assignment by Zenna Chemical Industry Co., Ltd. to Complainant of said mark for use on papaya whitening soap. 3. Respondents admit having used the tradename and trademark aforesaid but after having realized that Complainant is the legitimate assignee of TOP GEL MCA & MCA DEVICE and the registered owner of TOP GEL T.G. & DEVICE OF A LEAF, now undertake to voluntarily cease and desist from using the aforesaid tradename and trademark and further undertake not to manufacture, sell, distribute, and otherwise compete with Complainant, now and at anytime in the future, any papaya whitening soap using or bearing a mark or name identical or confusingly similar to, or constituting a colorable imitation of, the tradename and trademark TOP GEL MCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF as registered and described above. 4. Respondents further undertake to withdraw and/or dismiss their counterclaim and petition to cancel and/or revoke Registration No. 4- 2000-009881 issued to Complainant. Respondents also further undertake to pull out within 45 days from approval of the Compromise Agreement all their products bearing a mark or name identical or confusingly similar to, or constituting a colorable imitation of, the tradename and trademark TOP GEL MCA & MCA DEVICE and/or TOP GEL T.G. & DEVICE OF A LEAF, from the market nationwide.

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