G.R. No. 143193; June 29, 2005
MELBAROSE R. SASOT and ALLANDALE R. SASOT, petitioners, vs. PEOPLE OF THE PHILIPPINES, et al., respondents.

FACTS

Petitioners Melbarose and Allandale Sasot were charged with unfair competition under Article 189 of the Revised Penal Code before the Manila RTC. The Information alleged they manufactured and sold garment products bearing counterfeit “NBA” names, symbols, and trademarks, to the damage of NBA Properties, Inc., a U.S. corporation and registered owner of the trademarks. The charge stemmed from an NBI investigation and a complaint initiated by Rick Welts, President of NBA Properties, through a Special Power of Attorney.
Before arraignment, petitioners filed a Motion to Quash the Information, arguing primarily that the facts charged do not constitute an offense because NBA Properties is a foreign corporation not doing business in the Philippines and is not a registered patentee locally, thus incapable of maintaining a suit for unfair competition. They also questioned the authority of Welts to act for the corporation. The RTC denied the motion. The Court of Appeals dismissed their subsequent petition for certiorari, ruling it was not the proper remedy and the grounds should be raised during trial.

ISSUE

The core issue is whether the RTC correctly denied the Motion to Quash, specifically on the ground that the facts charged do not constitute an offense given the foreign corporate status of the complainant.

RULING

The Supreme Court denied the petition, upholding the denial of the Motion to Quash. The legal logic is that the capacity of a foreign corporation to sue for unfair competition in the Philippines is not contingent upon its being licensed to do business or having a local trademark registration. The crime of unfair competition is a public offense prosecuted by the State in the interest of public order and fair trade. The participation of the private offended party, while relevant for certain procedural aspects like the filing of the complaint, is not a jurisdictional element that defines the offense itself.
The Court clarified that the allegations in the Information—that petitioners willfully manufactured and sold goods bearing the appearance of “NBA” names to induce the public to believe they were genuine, to the damage of the trademark owner—sufficiently aver the elements of unfair competition. The nationality or licensing status of the corporate entity claiming ownership of the trademark does not negate the criminal act described. Furthermore, the Philippines’ commitment under the Paris Convention for the Protection of Industrial Property obligates it to protect industrial property rights of nationals of other member states, irrespective of registration or engagement in business within the country. Petitioners’ other arguments regarding the complainant’s authority to act and the originality of their designs are matters of defense properly evaluated during a full trial on the merits, not in a pre-trial motion to quash.