G.R. No.

179367               January 29, 2014 The NBI thereafter filed with the Department of Justice (DOJ)
a complaint against the respondent for violation of R.A. No.
UNILEVER PHILIPPINES, INC., Petitioner, 8293, specifically Section 168 (unfair competition), in relation
vs. with Section 170, docketed as I.S. No. 2002-667.
MICHAEL TAN a.k.a. PAUL D. TAN, Respondent.
In his counter-affidavit, the respondent claimed that he is
BRION, J.: "Paul D. Tan," and not "Michael Tan" as alluded in the
complaint; he is engaged in the business of selling leather
Before us is a petition for review on certiorari1 filed by goods and raw materials for making leather products, and he
Unilever Philippines, Inc. (petitioner), assailing the conducts his business under the name "Probest International
decision2 dated June 18, 2007 and the resolution3 dated Trading," registered with the Department of Trade and
August 16, 2007 of the Court of Appeals (CA) in CA G.R. SP Industry; he is not engaged in the sale of counterfeit Unilever
No. 87000. These CA rulings dismissed the petitioner's shampoo products; the sachets of Unilever shampoos seized
petition for certiorari and mandamus for lack of merit. from his office in Probest International Trading Building are
genuine shampoo products which they use for personal
consumption; he does not own and does not operate the
The Factual Antecedents
warehouse located on Camia Street, Marikina City, where a
substantial number of alleged counterfeit Unilever shampoo
The records show that on January 17, 2002, agents of the products were found; and he did not violate R.A. No. 8293
National Bureau of Investigation (NBI) applied for the because there is no prima facie evidence that he committed
issuance of search warrants for the search of a warehouse the offense charged.
located on Camia Street, Marikina City, and of an office
located on the 3rd floor of Probest International Trading
Rulings of the DOJ
Building, Katipunan Street, Concepcion, Marikina City,
allegedly owned by Michael Tan a.k.a. Paul D. Tan
(respondent). The application alleged that the respondent On December 18, 2002, State Prosecutor Melvin J. Abad
had in his possession counterfeit shampoo products which issued a Resolution5 dismissing the criminal complaint on the
were being sold, retailed, distributed, dealt with or intended ground of insufficiency of evidence. To quote:
to be disposed of, in violation of Section 168, in relation with
Section 170, of Republic Act (R.A.) No. 8293, otherwise known After a thorough evaluation of the evidence, we find no
as the Intellectual Property Code of the Philippines. sufficient evidence so as to warrant a finding of probable
cause to indict respondent Paul D. Tan (not Michael Tan) for
On the same date, Judge Antonio M. Eugenio, Jr. of the violation of Section 168 (unfair competition) in relation to
Regional Trial Court of Manila, Branch 1, granted the Section 170 of R.A. No. 8293.
application and issued Search Warrant Nos. 02-2606 and 02-
2607. Armed with the search warrants, the NBI searched the xxxx
premises and, in the course of the search, seized the
following items: WHEREFORE, it is respectfully recommended that the instant
complaint for Violation of Section 168 (unfair competition) in
(A) From [the respondent’s] office: relation to Section 170 of R.A. No. 8293 be DISMISSED for
(a) 192 sachets of Creamsilk Hair Conditioner (White); insufficiency of evidence.6
(b) 156 sachets of Creamsilk Hair Conditioner (Blue);
(c) 158 sachets of Creamsilk Hair Conditioner (Green); The State Prosecutor found that the petitioner failed to show
(d) 204 sachets of Creamsilk Hair Conditioner (Black); the respondent’s actual and direct participation in the offense
charged. While the Certificate of Registration of Probest
(e) 192 sachets of Vaseline Amino Collagen Shampoo;
International Trading shows that a certain "Paul D. Tan" is the
(f) 192 sachets of Sunsilk Nutrient Shampoo (Pink);
registered owner and proprietor of the office, there is no
(g) 144 sachets of Sunsilk Nutrient Shampoo (Blue);
showing that he is also the registered owner of the
(h) 136 sachets of Sunsilk Nutrient Shampoo (Orange); warehouse where the alleged counterfeit Unilever shampoo
(i) 144 sachets of Sunsilk Nutrient Shampoo (Green); and products were found. There is also no evidence to support
(j) 1 box of assorted commercial documents. the claim that the respondent was engaged in the sale of
counterfeit products other than the self-serving claim of the
(B) From [the respondent’s] warehouse[:] petitioner’s representatives. Lastly, the State Prosecutor
(a) 372 boxes each containing six (6) cases of Sunsilk Nutrient found that the pieces of evidence adduced against the
Shampoo; and respondent, e.g. alleged counterfeit Unilever shampoo
(b) 481 boxes each containing six (6) cases Creamsilk Hair products, by themselves, are not sufficient to support a
Conditioner.4 finding of probable cause that he is engaged in unfair
competition.
The motion for reconsideration that followed was denied in a determination of the existence of probable cause in order to
resolution7 dated June 5, 2003. indict the respondent of unfair competition.

On September 9, 2003, the petitioner filed a petition for The Court’s Ruling
review with the DOJ,8 which the Acting Secretary of Justice,
Merceditas N. Gutierrez, dismissed in her March 16, 2004 We find merit in the petition.
resolution. In the resolution, the Acting Secretary of Justice
affirmed the State Prosecutor’s finding of lack of probable Determination of Probable Cause
cause. Lies Within the Competence of the
Public Prosecutor
The petitioner thereafter sought, but failed, to secure a
reconsideration. The determination of probable cause for purposes of filing of
information in court is essentially an executive function that is
On October 19, 2004, the petitioner filed with the CA a lodged, at the first instance, with the public prosecutor and,
petition for certiorari under Rule 65 of the Rules of Court, ultimately, to the Secretary of Justice.9 The prosecutor and
imputing grave abuse of discretion on the Acting Secretary of the Secretary of Justice have wide latitude of discretion in the
Justice, et al., in deciding the case in the respondent’s favor. conduct of preliminary investigation;10 and their findings with
respect to the existence or non-existence of probable cause
The Rulings of the CA are generally not subject to review by the Court.

The CA, in a decision dated June 18, 2007, dismissed the Consistent with this rule, the settled policy of non-
petition on the ground that the petitioner failed to establish interference in the prosecutor’s exercise of discretion
facts and circumstances that would constitute acts of unfair requires the courts to leave to the prosecutor and to the DOJ
competition under R.A. No. 8293. The CA took into account the determination of what constitutes sufficient evidence to
the insufficiency of evidence that would link the respondent establish probable cause.11 Courts can neither override their
to the offense charged. It also ruled that the Acting Secretary determination nor substitute their own judgment for that of
of Justice did not gravely abuse her discretion when she the latter. They cannot likewise order the prosecution of the
affirmed the State Prosecutor’s resolution dismissing the accused when the prosecutor has not found a prima facie
petitioner’s complaint for insufficiency of evidence to case.12
establish probable cause.
Nevertheless, this policy of non-interference is not without
The petitioner sought reconsideration of the aforementioned exception. The Constitution itself allows (and even directs)
decision rendered by the CA but its motion was denied in a court action where executive discretion has been gravely
resolution dated August 16, 2007. abused.13 In other words, the court may intervene in the
executive determination of probable cause, review the
The present Rule 45 petition questions the CA’s June 18, 2007 findings and conclusions, and ultimately resolve the existence
decision and August 16, 2007 resolution. or non-existence of probable cause by examining the records
of the preliminary investigation when necessary for the
The Petition orderly administration of justice.14

The petitioner contends that the CA erred in dismissing its Courts Cannot Reverse the Secretary
petition for certiorari and in affirming the DOJ’s rulings. It of Justice’s Findings Except in Clear
argues that while it may be possible that the respondent is Cases of Grave Abuse of Discretion
not the owner of the warehouse, the overwhelming pieces of
evidence nonetheless prove that he is the owner of the The term "grave abuse of discretion" means such capricious
counterfeit shampoo products found therein. The petitioner or whimsical exercise of judgment which is equivalent to lack
also maintains that the voluminous counterfeit shampoo of jurisdiction. To justify judicial intervention, the abuse of
products seized from the respondent are more than sufficient discretion must be so patent and gross as to amount to an
evidence to indict him for unfair competition. evasion of a positive duty or to a virtual refusal to perform a
duty enjoined by law or to act at all in contemplation of law,
The Issue as where the power is exercised in an arbitrary and despotic
manner by reason of passion or hostility. 15 In Elma v.
Jacobi,16 we said that:
The case presents to us the issue of whether the CA
committed a reversible error in upholding the Acting
Secretary of Justice’s decision dismissing the information This error or abuse alone, however, does not render his act
against the respondent. The resolution of this issue requires a amenable to correction and annulment by the extraordinary
remedy of certiorari. To justify judicial intrusion into what is
fundamentally the domain of the Executive, the petitioner consumption) will ordinarily and logically be found inside the
must clearly show that the prosecutor gravely abused his house, specifically, inside the bathroom or in a private room,
discretion amounting to lack or excess of jurisdiction in not in the consumer’s office.
making his determination and in arriving at the conclusion he
reached. This requires the petitioner to establish that the Second, the failure to prove that the respondent is the owner
prosecutor exercised his power in an arbitrary and despotic of the warehouse located on Camia St., Marikina City, does
manner by reason of passion or personal hostility; and it must not automatically free him from liability. Proof of the
be so patent and gross as to amount to an evasion or to a warehouse’s ownership is not crucial to the finding of
unilateral refusal to perform the duty enjoined or to act in probable cause. In fact, ownership of the establishment
contemplation of law, before judicial relief from a where the counterfeit products were found is not even an
discretionary prosecutorial action may be obtained. element of unfair competition. While the respondent may not
[emphasis supplied] be its owner, this does not foreclose the possibility that he
was the manufacturer or distributor of the counterfeit
An examination of the decisions of the State Prosecutor and shampoo products. Needless to say, what is material to a
of the DOJ shows that the complaint’s dismissal was anchored finding of probable cause is the commission of acts
on the insufficiency of evidence to establish the respondent’s constituting unfair competition, the presence of all its
direct, personal or actual participation in the offense charged. elements and the reasonable belief, based on evidence, that
As the State Prosecutor found (and affirmed by the DOJ), the the respondent had committed it.
petitioner failed to prove the ownership of the warehouse
where counterfeit shampoo products were found. This Third, the result of the NBI’s search conducted on January 17,
finding led to the conclusion that there was insufficient basis 2002 (yielding to several boxes of counterfeit shampoo
for an indictment for unfair competition as the petitioner sachets) and the NBI’s Joint Affidavits in support of the
failed to sufficiently prove that the respondent was the owner application for search warrants serve as corroborating
or manufacturer of the counterfeit shampoo products found evidence. The striking similarities17 between the genuine
in the warehouse. Unilever shampoo sachets and the counterfeit sachets seized
by the NBI support the belief that the respondent had been
A careful analysis of the lower courts’ rulings and the records, engaged in dealing, manufacturing, selling and distributing
however, reveals that substantial facts and circumstances counterfeit Unilever shampoo products.
that could affect the result of the case have been overlooked.
While the ownership of the warehouse on Camia Street, Fourth, there were also allegations that the respondent’s
Marikina City, was not proven, sufficient evidence to prove laborers and warehousemen who were present during the
the existence of probable cause nevertheless exists. These search had confirmed that the warehouse was being
pieces of evidence consist of: (1) the result of the NBI agents’ maintained and operated by Probest International Trading.
search of the office and of the warehouse; (2) Elmer Cadano’s The NBI investigators who served the search warrant also
complaint-affidavit; (3) Rene Baltazar’s affidavit; (4) Unilever’s claimed that several persons, introducing themselves as the
representatives’ claim that all the laborers present at the respondent’s relatives and friends, had requested them to
warehouse confirmed that it was operated by Probest seize only a portion of the counterfeit shampoo products.
International Trading; (5) other object evidence found and Whether these claims are admissible in evidence or whether
seized at the respondent’s office and warehouse; (6) the NBI they should be excluded as hearsay are matters that should
operatives’ Joint Affidavit; (7) the subsequent seizure of be determined not in a preliminary investigation, but in a full-
counterfeit Unilever products from the respondent’s blown trial.
warehouse in Antipolo City; and (8) other photographs and
documents relative to the counterfeit products. In Lee v. KBC Bank N.V.,18 citing Andres v. Justice Secretary
Cuevas,19 we held that:
These pieces of evidence, to our mind, are sufficient to form a
reasonable ground to believe that the crime of unfair [A preliminary investigation] is not the occasion for the full
competition was committed and that the respondent was its and exhaustive display of [the prosecution’s]
author. evidence.1âwphi1 The presence or absence of the elements
of the crime is evidentiary in nature and is a matter of
First, a total of 1,238 assorted counterfeit Unilever products defense that may be passed upon after a full-blown trial on
were found at, and seized from, the respondent’s office the merits.
located on the 3rd floor of Probest International Trading
Building, Katipunan Street, Concepcion, Marikina City. The We also emphasized in that case that:
huge volume and the location where these shampoos were
found (inside a box under a pile of other boxes located inside
In fine, the validity and merits of a party’s defense or
the respondent’s office) belie the respondent’s claim of
accusation, as well as the admissibility of testimonies and
personal consumption. Human experience and common
sense dictate that shampoo products (intended for personal
evidence, are better ventilated during trial proper than at the into whether there is sufficient evidence to procure a
preliminary investigation level.20 conviction. It is enough that it is believed that the act or
omission complained of constitutes the offense charged.
Finally, the subsequent events that occurred – after the filing Precisely, there is a trial for the reception of evidence of the
of the petitioner’s complaint and the institution of its appeal prosecution in support of the charge.
to the CA – are too significant to be ignored.
Guided by this ruling, we find that the CA gravely erred in
In its motion to reconsider the CA’s decision, 21 the petitioner sustaining the Acting Secretary of Justice’s finding that there
pointed to the reports it received sometime in October 2005 was no probable cause to indict the respondent for unfair
that the respondent had resumed its operations involving competition. The dismissal of the complaint, despite ample
counterfeit Unilever products. Notably, these significant evidence to support a finding of probable cause, clearly
reports, albeit supported by the subsequent seizure of large constitutes grave error that warrants judicial intervention and
quantity of counterfeit Unilever shampoos22 in the correction.
respondent’s warehouse23 (located at No. 13 First Street
Corner Sevilla Avenue, Virginia Summerville Subdivision, WHEREFORE, in view of the foregoing, judgment is hereby
Barangay Mambugan, Antipolo City), were ignored by the CA. rendered GRANTING the petition filed by Unilever Philippines,
We, however, find that this development is significant, Inc. The appealed decision dated June 18, 2007 and the
although they were not part of the mass of evidence resolution dated August 16, 2007 of the Court of Appeals are
considered below. Even without them and based solely on ANNULLED AND SET ASIDE.
the evidentiary materials available below, we conclude that
sufficient grounds exist to indict the respondent for unfair The State Prosecutor is hereby ORDERED to file the
competition. appropriate Information against Michael Tan a.k.a. Paul D.
Tan.
Determination of Probable Cause
SO ORDERED.
Merely Requires Probability of Guilt
or Reasonable Ground for Belief

The determination of probable cause needs only to rest on NICE Classifications

evidence showing that more likely than not, a crime has been This page details the NICE classifications as detailed by
committed and there is enough reason to believe that it was the World Intellectual Property Organization. The Philippines
committed by the accused.24 It need not be based on clear is a participant in WIPO and can also read more about the
and convincing evidence of guilt, neither on evidence WIPO in general here.
establishing absolute certainty of guilt.25 What is merely
required is "probability of guilt." Its determination, too, does All trademarks must designate a class (or multiple classes) to
not call for the application of rules or standards of proof that be registered in. We provide this information on this page for
a judgment of conviction requires after trial on the your reference. We suggest you contact our expert staff for
merits.26 Thus, in concluding that there is probable cause, it guidance on choosing a category. There are total of 45
suffices that it is believed that the act or omission complained classes, with 34 for goods and 11 for services. Both goods and
of constitutes the very offense charged. services can be registered for trademarks in the Philippines.

It is also important to stress that the determination of The list of services follows, and you can click different links to
probable cause does not depend on the validity or merits of a see details about each class.
party’s accusation or defense or on the admissibility or
veracity of testimonies presented. As previously discussed, GOODS
these matters are better ventilated during the trial proper of 1. Chemicals used in industry, science and
the case.27 As held in Metropolitan Bank & Trust Company v. photography, as well as in agriculture, horticulture and
Gonzales:28 forestry; unprocessed artificial resins, unprocessed plastics;
manures; fire extinguishing compositions; tempering and
Probable cause has been defined as the existence of such soldering preparations; chemical substances for preserving
facts and circumstances as would excite the belief in a foodstuffs; tanning substances; adhesives used in
reasonable mind, acting on the facts within the knowledge of industry. Click here for Class 1 details.
the prosecutor, that the person charged was guilty of the 2. Paints, varnishes, lacquers; preservatives against rust
crime for which he was prosecuted. xxx The term does not and against deterioration of wood; colorants; mordants; raw
mean "actual or positive cause" nor does it import absolute natural resins; metals in foil and powder form for painters,
certainty. It is merely based on opinion and reasonable belief. decorators, printers and artists. Click here for Class 2 details. 
Thus, a finding of probable cause does not require an inquiry
3. Bleaching preparations and other substances for 16. Paper, cardboard and goods made from these
laundry use; cleaning, polishing, scouring and abrasive materials, not included in other classes; printed matter;
preparations; soaps; perfumery, essential oils, cosmetics, hair bookbinding material; photographs; stationery; adhesives for
lotions; dentifrices. Click here for Class 3 details. stationery or household purposes; artists' materials; paint
4. Industrial oils and greases; lubricants; dust brushes; typewriters and office requisites (except furniture);
absorbing, wetting and binding com positions; fuels (including instructional and teaching material (except apparatus); plastic
motor spirit) and illuminates; candles and wicks for materials for packaging (not included in other classes);
lighting. Click here for Class 4 details. printers' type; printing blocks. Click here for Class 16 details.
5. Pharmaceutical and veterinary preparations; sanitary 17. Rubber, gutta-percha, gum, asbestos, mica and
preparations for medical purposes; dietetic food and goods made from these materials and not included in other
substances adapted for medical or veterinary use, food for classes; plastics in extruded form for use in manufacture;
babies; dietary supplements for humans and animals; packing, stopping and insulating materials; flexible pipes, not
plasters, materials for dressings; material for stopping teeth, of metal. Click here for Class 17 details.
dental wax; disinfectants; preparations for destroying vermin; 18. Leather and imitations of leather, and goods made of
fungicides, herbicides. Click here for Class 5 details. these materials and not included in other classes; animal
6. Common metals and their alloys; metal building skins, hides; trunks and travelling bags; umbrellas and
materials; transportable buildings of metal; materials of metal parasols; walking sticks; whips, harness and saddlery. Click
for railway tracks; non-electric cables and wires of common here for Class 18 details.
metal; ironmongery, small items of metal hardware; pipes 19. Building materials (non-metallic); non-metallic rigid
and tubes of metal; safes; goods of common metal not pipes for building; asphalt, pitch and bitumen; non-metallic
included in other classes; ores. Click here for Class 6 details. transportable buildings; monuments, not of metal. Click here
7. Machines and machine tools; motors and engines for Class 19 details.
(except for land vehicles); machine coupling and transmission 20. Furniture, mirrors, picture frames; goods (not
components (except for land vehicles); agricultural included in other classes) of wood, cork, reed, cane, wicker,
implements other than hand-operated; incubators for eggs; horn, bone, ivory, whalebone, shell, amber, mother-of-pearl,
automatic vending machines. Click here for Class 7 details. meerschaum and substitutes for all these materials, or of
8. Hand tools and implements (hand-operated); plastics. Click here for Class 20 details.
cutlery; side arms; razors. Click here for Class 8 details. 21. Household or kitchen utensils and containers; combs
9. Scientific, nautical, surveying, photographic, and sponges; brushes (except paint brushes); brush-making
cinematographic, optical, weighing, measuring, signalling, materials; articles for cleaning purposes; steelwool; unworked
checking (supervision), life-saving and teaching apparatus and or semi-worked glass (except glass used in building);
instruments; apparatus and instruments for conducting, glassware, porcelain and earthenware not included in other
switching, transforming, accumulating, regulating or classes. Click here for Class 21 details.
controlling electricity; apparatus for recording, transmission 22. Ropes, string, nets, tents, awnings, tarpaulins, sails,
or reproduction of sound or images; magnetic data carriers, sacks and bags (not included in other classes); padding and
recording discs; compact discs, DVDs and other digital stuffing materials (except of rubber or plastics); raw fibrous
recording media; mechanisms for coin-operated apparatus; textile materials. Click here for Class 22 details.
cash registers, calculating machines, data processing 23. Yarns and threads, for textile use. Click here for Class
equipment, computers; computer software; fire-extinguishing 23 details.
apparatus. Click here for Class 9 details. 24. Textiles and textile goods, not included in other
10. Surgical, medical, dental and veterinary apparatus classes; bed covers; table covers. Click here for Class 24
and instruments, artificial limbs, eyes and teeth; orthopaedic details.
articles; suture materials. Click here for Class 10 details. 25. Clothing, footwear, headgear. Click here for Class 25
11. Apparatus for lighting, heating, steam generating, details.
cooking, refrigerating, drying, ventilating, water supply and 26. Lace and embroidery, ribbons and braid; buttons,
sanitary purposes. Click here for Class 11 details. hooks and eyes, pins and needles; artificial flowers. Click here
12. Vehicles; apparatus for locomotion by land, air or for Class 26 details.
water. Click here for Class 12 details. 27. Carpets, rugs, mats and matting, linoleum and other
13. Firearms; ammunition and projectiles; explosives; materials for covering existing floors; wall hangings (non-
fireworks. Click here for Class 13 details. textile). Click here for Class 27 details.
14. Precious metals and their alloys and goods in 28. Games and playthings; gymnastic and sporting
precious metals or coated therewith, not included in other articles not included in other classes; decorations for
classes; jewellery, precious stones; horological and Christmas trees. Click here for Class 28 details.
chronometric instruments. Click here for Class 14 details. 29. Meat, fish, poultry and game; meat extracts;
15. Musical instruments. Click here for Class 15 details. preserved, frozen, dried and cooked fruits and vegetables;
 jellies, jams, compotes; eggs; milk and milk products; edible
oils and fats. Click here for Class 29 details.
30. Coffee, tea, cocoa and artificial coffee; rice; tapioca
and sago; flour and preparations made from cereals; bread,
pastry and confectionery; ices; sugar, honey, treacle; yeast,
baking-powder; salt; mustard; vinegar, sauces (condiments);
spices; ice. Click here for Class 30 details.
31. Grains and agricultural, horticultural and forestry
products not included in other classes; live animals; fresh
fruits and vegetables; seeds; natural plants and flowers;
foodstuffs for animals; malt. Click here for Class 31 details.
32. Beers; mineral and aerated waters and other non-
alcoholic beverages; fruit beverages and fruit juices; syrups
and other preparations for making beverages. Click here for
Class 32 details.
33. Alcoholic beverages (except beers). Click here for
Class 33 details.
34. Tobacco; smokers' articles; matches. Click here for
Class 34 details.

SERVICES

35. Advertising; business management; business

administration; office functions. Click here for Class 35 details.

36. Insurance; financial affairs; monetary affairs; real estate

affairs. Click here for Class 36 details.
37. Building construction; repair; installation services. Click
here for Class 37 details.
38. Telecommunications. Click here for Class 38 details.
39. Transport; packaging and storage of goods; travel
arrangement. Click here for Class 39 details.
40. Treatment of materials. Click here for Class 40 details.
41. Education; providing of training; entertainment; sporting
and cultural activities. Click here for Class 41 details.
42. Scientific and technological services and research and
design relating thereto; industrial analysis and research
services; design and development of computer hardware and
software. Click here for Class 42 details.
43. Services for providing food and drink; temporary
accommodation. Click here for Class 43 details.
44. Medical services; veterinary services; hygienic and beauty
care for human beings or animals; agriculture, horticulture
and forestry services. Click here for Class 44 details.
45. Legal services; security services for the protection of
property and individuals; personal and social services
rendered by others to meet the needs of individuals. Click
here for Class 45 details.