G.R. No. 194062; June 17, 2013
Republic Gas Corporation, Arnel U. Ty, Mari Antonette N. Ty, Orlando Reyes, Ferrer Suazo and Alvin U. Ty, Petitioners, vs. Petron Corporation, Pilipinas Shell Petroleum Corporation, and Shell International Petroleum Company Limited, Respondents.

FACTS

Petitioners Petron Corporation and Pilipinas Shell Petroleum Corporation are major LPG suppliers. Petron owns the trademarks “GASUL” and “GASUL cylinders,” and is the sole entity authorized to permit refilling and distribution of its LPG containers. Pilipinas Shell is the authorized user in the Philippines of the trademarks “SHELLANE” and “SHELL device” for its principal, Shell International Petroleum Company Limited, and is the only entity authorized to permit refilling and distribution of SHELLANE LPG containers. Private respondents (petitioners in the Supreme Court case) are the directors and officers of Republic Gas Corporation (REGASCO), a licensed LPG refilling and marketing business.
LPG Dealers Associations reported unauthorized refilling and sale of LPG cylinders bearing petitioners’ registered trademarks. A letter-complaint was filed with the NBI. An investigation and surveillance, particularly in Caloocan, Malabon, Novaliches, and Valenzuela, indicated that REGASCO and others were suspected of violating Batas Pambansa Blg. 33. Surveillance revealed REGASCO’s Malabon plant was refilling and selling LPG cylinders bearing petitioners’ marks without authority.
On February 19, 2004, NBI Senior Agent Marvin E. De Jemil conducted a test-buy operation. He and a confidential asset brought four empty LPG cylinders bearing SHELLANE and GASUL trademarks to the REGASCO plant. They “rode-on” their purchase with a regular customer, J&S. Inside the plant, they witnessed REGASCO employees refill the empty cylinders. Payment was made, and Cash Invoice No. 191391 was issued, which included payment for the four cylinders. The refilled cylinders were later found to be underfilled and without seals.
Based on De Jemil’s sworn affidavit detailing the surveillance and test-buy, and after personal examination under oath of De Jemil and his witness, Judge Antonio M. Eugenio of the RTC, Branch 24, Manila, found probable cause and issued Search Warrants Nos. 04-5049 and 04-5050. NBI operatives served the warrants on the private respondents at the REGASCO plant and seized several empty and filled Shellane and Gasul cylinders and other paraphernalia.
Subsequently, the NBI lodged a complaint with the Department of Justice against the private respondents for alleged violations of Sections 155 and 168 of Republic Act No. 8293 (Intellectual Property Code). The Assistant City Prosecutor recommended dismissal, finding no proof that REGASCO was selling petitioners’ products or imitating their trademarks, and saw no deception in REGASCO’s business. The Court of Appeals’ Decision dated July 2, 2010, and Resolution dated October 11, 2010, which are the subject of the petition, upheld the validity of the search warrants.

ISSUE

The core issue is the validity of the search warrants issued against the private respondents (REGASCO and its officers) for alleged violation of trademark laws.

RULING

The Supreme Court upheld the validity of the search warrants. The Court ruled that the issuing judge did not commit grave abuse of discretion. The requirements for issuing a search warrant were satisfied: 1) the application was based on probable cause; 2) the probable cause was determined personally by the judge after examination under oath or affirmation of the complainant and witnesses; and 3) the warrant particularly described the place to be searched and the things to be seized.
The Court found that the NBI agent’s sworn application and testimony, based on his personal knowledge gained from surveillance and a test-buy operation where he witnessed the unauthorized refilling of trademarked cylinders, established probable cause. The examination of the witness was not merely perfunctory. The warrants particularly described the items to be seized (e.g., LPG cylinders bearing specified trademarks). The Court emphasized that in determining probable cause, the judge merely determines the probability of a violation of law, not the certainty of conviction. The allegations of unauthorized refilling of cylinders bearing registered trademarks, if true, would constitute infringement under the Intellectual Property Code. Therefore, the search warrants were validly issued.