GR 205972; (November, 2016) (Digest)
G.R. No. 205972 and G.R. No. 164352, November 9, 2016
Caterpillar, Inc. vs. Manolo P. Samson
FACTS
Caterpillar, Inc., a foreign corporation, filed criminal complaints for unfair competition against respondent Manolo P. Samson, a local businessman using the trademark “CATERPILLAR” on footwear and apparel under a registration from the Intellectual Property Office. The complaints stemmed from the seizure of goods bearing Caterpillar’s core marks via search warrants. The Department of Justice (DOJ) initially found probable cause and filed criminal cases. However, Samson filed petitions for review with the DOJ Secretary and also moved to suspend the criminal proceedings, citing a pending civil case for trademark cancellation as a prejudicial question.
The DOJ Secretary later reversed the initial findings, issuing resolutions that ultimately dismissed the complaints for lack of probable cause. The Secretary held that Samson’s use of the mark was under a colorable registration, negating criminal intent for unfair competition. Caterpillar appealed these DOJ resolutions to the Court of Appeals, which affirmed the dismissal. Caterpillar then elevated the case to the Supreme Court via petitions for review.
ISSUE
Whether the Court of Appeals erred in affirming the DOJ Secretary’s finding of no probable cause to indict Samson for unfair competition.
RULING
The Supreme Court denied the petitions and affirmed the assailed rulings. The determination of probable cause for filing criminal cases is an executive function, primarily vested in the public prosecutor and, on review, the DOJ Secretary. Judicial review of such determination is limited to checking whether it was rendered with grave abuse of discretion amounting to lack or excess of jurisdiction. The Court found no such abuse.
The DOJ Secretary correctly applied the elements of unfair competition under the Intellectual Property Code, which requires proof of fraudulent intent. The Secretary reasoned that Samson’s use of the “CATERPILLAR” mark was pursuant to his own trademark registration. This registration, though potentially dubious, provided a juristic basis for his use that contradicted a finding of criminal fraudulent intent necessary for probable cause. The existence of a registration creates a presumption of good faith. The question of whether the registration was obtained in bad faith is a separate issue proper for resolution in the pending civil case for cancellation, not in the preliminary criminal investigation for probable cause. The Court upheld the DOJ’s discretion that the evidence did not sufficiently establish deliberate intent to deceive the public, which is central to the crime of unfair competition.