G.R. No. L-63796-97 and G.R. No. L-65659, May 2, 1984 and May 21, 1984
LA CHEMISE LACOSTE, S.A. vs. HON. OSCAR C. FERNANDEZ, et al. and GOBINDRAM HEMANDAS SUJANANI vs. HON. ROBERTO V. ONGPIN, et al.

FACTS

La Chemise Lacoste, S.A., a French corporation not doing business in the Philippines, is the internationally known owner of the “LACOSTE” and crocodile device trademarks for apparel. It discovered that respondent Gobindram Hemandas was manufacturing and selling clothing bearing imitations of these marks in the Philippines. Lacoste filed a complaint with the NBI, leading to the issuance of Search Warrants by respondent Judge Oscar C. Fernandez against Hemandas’s premises for violation of unfair competition laws. The NBI executed the warrants and seized alleged counterfeit goods.
Subsequently, Hemandas filed a Motion to Quash the search warrants. He argued that his trademark “CHEMISE LACOSTE & CROCODILE DEVICE” was registered in the Supplemental Register and that pending inter partes cases for cancellation and opposition before the Philippine Patent Office involving these marks, any criminal action was premature. The respondent Judge granted the motion, quashed the warrants, and ordered the return of the seized items to Hemandas. Lacoste filed this petition for certiorari.

ISSUE

Did the respondent Judge commit grave abuse of discretion in quashing the search warrants on the grounds of alleged differences in the trademarks and the pendency of administrative proceedings before the Patent Office?

RULING

Yes. The Supreme Court granted Lacoste’s petition, reversing the trial court’s order. The legal logic is clear: the existence of a trademark registration in the Supplemental Register and pending administrative proceedings do not divest the courts of their jurisdiction to act on criminal complaints for unfair competition or to issue search warrants based on a finding of probable cause. A Supplemental Register registration does not confer the same substantive rights as one in the Principal Register; it is merely evidence of ownership. More importantly, the offense of unfair competition is separate from trademark infringement and is grounded on deceitful conduct and passing off one’s goods as another’s, which can exist independently of trademark registration.
The respondent Judge’s finding of no probable cause, after having initially found its existence, constituted a reversible error. The alleged differences in the trademarks and the claim of prior registration are matters of defense best adjudicated in a full trial on the merits. They do not affect the preliminary determination of probable cause for issuing a search warrant, which requires only a reasonable ground of suspicion supported by circumstances warranting a cautious person to believe an offense has been committed. The seized items were instrumentalities of the alleged crime. The Court emphasized the state’s duty to protect the public from counterfeit goods and intellectual piracy, noting that court processes should not be used to aid such activities. The related petition by Hemandas (G.R. No. 65659) was denied for lack of merit.