CHESTER UYCO, WINSTON UYCHIYONG, AND CHERRY C. UYCO-ONG, PETITIONERS, VS. VICENTE LO, RESPONDENT.

Uyco versus Lo

The Case

This is a petition brought by Chester Uyco, Winston Uychiyong, and Cherry Uyco-Ong, officers of Wintrade Industrial Sales Corporation, against Vicente Lo, who claims to be the assignee of the trademarks of Casa Hipolito of Portugal. The petitioners ask the Supreme Court to set aside its earlier resolution affirming the finding of probable cause to charge them with the crime of false designation of origin under the Intellectual Property Code. The case matters because it teaches the elements of that offense, the weight of a party's own admissions in a preliminary investigation, and the settled rule that probable cause is a low threshold that does not require a full trial of the merits.

Procedural History

Vicente Lo and Philippine Burners Manufacturing Corporation filed a complaint with the Department of Justice against the officers of Wintrade, including the petitioners, for violation of Section 169.1 in relation to Section 170 of Republic Act Number 8293. After preliminary investigation, the Chief State Prosecutor found probable cause to indict the petitioners. On appeal, the Department of Justice affirmed the finding of probable cause. The petitioners then went to the Court of Appeals on a petition for certiorari, but the Court of Appeals found no grave abuse of discretion on the part of the Department of Justice and affirmed its ruling. The petitioners elevated the matter to the Supreme Court, which initially denied the petition for failure to sufficiently show any reversible error. The petitioners filed a motion for reconsideration, and it is this motion that the Court resolved in the present decision.

Facts

The disputed marks are the Hipolito and Sea Horse and triangular device, the Fama mark, and other related marks, service marks, and trade names of Casa Hipolito of Portugal, appearing on kerosene burners. Vicente Lo claimed that Gasirel, the owner of the marks, executed a deed of assignment transferring them in his favor for use in all countries except those in Europe and America. In a test buy, Lo purchased kerosene burners from National Hardware bearing the subject marks and the designations "Made in Portugal" and "Original Portugal" on the wrappers. These products were manufactured by Wintrade. Lo alleged that neither he nor Casa Hipolito had authorized Wintrade to use the marks, and that while a prior authority had been given to Wintrade's predecessor, Wonder Project and Development Corporation, Casa Hipolito had already revoked that authority through a letter of cancellation dated May 31, 1993.

In their defense, the petitioners claimed that Wintrade owns the subject trademarks and their variants, submitting certificates of registration with the Intellectual Property Office. They alleged that Gasirel, not Lo, was the real party in interest, and that they derived their authority to use the marks from Casa Hipolito through Wonder. They also argued that the marks "Made in Portugal" and "Original Portugal" are merely descriptive and refer to the source of the design and the history of manufacture. Mario Sy Chua, owner of National Hardware, admitted in a separate answer that he had dealt with Wintrade for around twenty years and had sold its products, but claimed he was never informed that Wintrade had lost the authority to deal in the marked goods.

In their Joint Affidavit, the petitioners admitted that Wintrade had decided to produce the burners in the Philippines, that they used the disputed marks, and that the words "Made in Portugal" and "Original Portugal" were an allusion to the origin of the design and the history of manufacture rooted in Portugal. The Department of Justice gave credence to Lo's claim as assignee and took note of the petitioners' admission that they used the words "Made in Portugal" although the products were made in the Philippines.

Issues

• Whether or not the Court of Appeals and the Department of Justice committed reversible error in finding probable cause to charge the petitioners with false designation of origin.
• Whether or not the petitioners' admission that the products were manufactured in the Philippines while bearing the markings "Made in Portugal" and "Original Portugal" supports a finding of probable cause.
• Whether or not the petitioners' defense that the words refer to the origin of the design rather than the origin of the goods negates probable cause.

Applicable Provisions

Section 169.1 of Republic Act Number 8293 provides:

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, shall be liable to a civil action for damages and injunction provided in Sections 156 and 157 of this Act by any person who believes that he or she is or is likely to be damaged by such act.

This is the very provision the petitioners are charged with violating, and its language on false designation of origin and likelihood of confusion frames the probable cause inquiry.

Section 170 of the same law provides:

Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two years to five years and a fine ranging from Fifty thousand pesos to Two hundred thousand pesos, shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 and Subsection 169.1.

This provision supplies the criminal penalty and confirms that a violation of Section 169.1 may be prosecuted criminally, which is why the State may proceed even if the private complainant's capacity is disputed.

Ruling

On the first issue, the Court found no reversible error on the part of the Court of Appeals and the Department of Justice. The consistent findings of the State Prosecutor, the Department of Justice, and the Court of Appeals that probable cause exists were supported by the evidence.

On the second issue, the Court held that the petitioners' own admission and the statement of Chua carried considerable weight. The admission in the Joint Affidavit was not hypothetical; it narrated actual incidents, including Wintrade's former association with Casa Hipolito, its decision to produce the burners in the Philippines, its use of the disputed marks, and its justification for that use. The Court stressed that the products Wintrade sold were admittedly produced in the Philippines, with no authority from Casa Hipolito. The law on trademarks and trade names, the Court said, precisely precludes a person from profiting from the business reputation built by another and from deceiving the public as to the origins of products. The fact that the evidence did not come from Lo but from the petitioners themselves was of no significance.

On the third issue, the Court held that the argument that the words refer to the origin of the design and not the origin of the goods does not negate the finding of probable cause. At the same time, the Court clarified that the petitioners are not barred from raising this argument as a defense during the hearing of the case.

Doctrine

Probable cause for the crime of false designation of origin under Section 169.1 in relation to Section 170 of the Intellectual Property Code exists where the evidence shows that the accused used in commerce a false designation of origin likely to cause confusion or mistake as to the origin of the product. A party's own admissions in a joint affidavit, being judicial or at least deliberate statements against interest, carry considerable weight in a preliminary investigation. The defense that a designation refers to the origin of the design rather than the origin of the goods does not defeat probable cause; it is a matter best ventilated at trial. Finally, because the law seeks to protect the public, the State may prosecute the offense even if the private complainant's legal capacity to sue is disputed.

Disposition

The Court denied the motion for reconsideration for lack of merit, thereby affirming the finding of probable cause to charge the petitioners with false designation of origin.

Remember This

Memorize this line: a party's own admission that goods were made in the Philippines yet marked "Made in Portugal" supplies probable cause for false designation of origin, and the design-origin defense belongs at trial, not in a preliminary investigation. Examiners use this case to test probable cause in intellectual property prosecutions and the weight of admissions against interest.