CASE 1

MANOLO P. SAMSON, Petitioner,
vs.
HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge, Regional Trial Court of
Quezon City, Branch 90, PEOPLE OF THE PHILIPPINES and CATERPILLAR,
INC., Respondents.
G.R. NOS. 160054-55
July 21, 2004

DOCTRINE: Jurisdiction over cases for infringement of registered marks, unfair

competition, false designation of origin and false description or representation, is lodged
with the Court of First Instance (now Regional Trial Court).
FACTS

On March 7, 2002, two informations for unfair competition under Section 168.3 (a), in
relation to Section 170, of the IPC (RA 8293), similarly worded save for the dates and places of
commission, were filed against petitioner Manolo P. Samson, the registered owner of ITTI
Shoes. The accusatory portion of said informations read:

That on or about the first week of November 1999 and sometime prior or subsequent
thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court,
above-named accused, owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng
Corporation located at Robinsons Galleria, EDSA corner Ortigas Avenue, Quezon City,
did then and there willfully, unlawfully and feloniously distribute, sell and/or offer
for sale CATERPILLAR products such as footwear, garments, clothing, bags,
accessories and paraphernalia which are closely identical to and/or colorable
imitations of the authentic Caterpillar products and likewise using trademarks,
symbols and/or designs as would cause confusion, mistake or deception on the
part of the buying public to the damage and prejudice of CATERPILLAR, INC., the
prior adopter, user and owner of the following internationally: CATERPILLAR, CAT,
CATERPILLAR & DESIGN, CAT AND DESIGN, WALKING MACHINES and TRACK-
TYPE TRACTOR & DESIGN.

On April 19, 2002, petitioner filed a motion to suspend arraignment and other proceedings
in view of the existence of an alleged prejudicial question involved in Civil Case No. Q-00-
41446 for unfair competition pending with the same branch; and also in view of the pendency
of a Petition for Review filed with the Secretary of Justice assailing the Chief State
Prosecutors resolution finding probable cause to charge petitioner with unfair competition. In
an Order dated August 9, 2002, the trial court denied the motion to suspend arraignment and
other proceedings.

On August 20, 2002, petitioner filed a twin motion to quash the informations and motion for
reconsideration of the order denying motion to suspend, this time challenging the jurisdiction of
the trial court over the offense charged. He contended that since under Section 170 of R.A.
No. 8293, the penalty of imprisonment for unfair competition does not exceed six years,
the offense is cognizable by the Municipal Trial Courts and not by the Regional Trial
Court, per R.A. No. 7691.
In its assailed March 26, 2003 Order, the trial court denied petitioners twin motions. A motion for
reconsideration thereof was likewise denied on August 5, 2003.

ISSUE(s)

(1) Which court has jurisdiction over criminal and civil cases for violation of intellectual
property rights?

(2) Did the respondent Judge gravely abuse his discretion in refusing to suspend the
arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44 on the ground
of (a) the existence of a prejudicial question; and (b) the pendency of a Petition for
Review with the Secretary of Justice on the finding of probable cause for unfair
competition?chanroblesvirtualawlibrary

HELD

(1) REGIONAL TRIAL COURT. Jurisdiction over the instant criminal case for unfair
competition is properly lodged with the Regional Trial Court even if the penalty therefor
is imprisonment of less than 6 years, or from 2 to 5 years and a fine ranging from
P50,000.00 to P200,000.00.
Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty
for infringement of registered marks, unfair competition, false designation of origin and false
description or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty
Thousand Pesos to Two Hundred Thousand Pesos.
Corollarily, Section 163 of the same Code states that actions (including criminal and civil)
under Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the proper
courts with appropriate jurisdiction under existing laws.
The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The
Trademark Law) which provides that jurisdiction over cases for infringement of registered
marks, unfair competition, false designation of origin and false description or
representation, is lodged with the Court of First Instance (now Regional Trial Court)
SEC. 27. Jurisdiction of Court of First Instance. All actions under this Chapter [V
Infringement] and Chapters VI [Unfair Competition] and VII [False Designation of Origin
and False Description or Representation], hereof shall be brought before the Court of
First Instance.
We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No.
8293. The repealing clause of R.A. No. 8293, reads 
SEC. 239. Repeals. 239.1. All Acts and parts of Acts inconsistent herewith, more particularly
Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and
189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No.
285, as amended, are hereby repealed. 
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise,
it would not have used the phrases parts of Acts and inconsistent herewith; and it would have
simply stated Republic Act No. 165, as amended; Republic Act No. 166, as amended; and
Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including
Presidential Decree No. 285, as amended are hereby repealed. It would have removed all
doubts that said specific laws had been rendered without force and effect. The use of the
phrases parts of Actsand inconsistent herewith only means that the repeal pertains only to
provisions which are repugnant or not susceptible of harmonization with R.A. No. 8293. Section
27 of R.A. No. 166, however, is consistent and in harmony with Section 163 of R.A. No. 8293.
Had R.A. No. 8293 intended to vest jurisdiction over violations of intellectual property rights with
the Metropolitan Trial Courts, it would have expressly stated so under Section 163 thereof.
Moreover, the settled rule in statutory construction is that in case of conflict between a
general law and a special law, the latter must prevail. Jurisdiction conferred by a special
law to RTCs must prevail over that granted by a general law to MTCs.
(2)
(a) NO. Petitioner failed to substantiate his claim that there was a prejudicial question. In his
petition, he prayed for the reversal of the March 26, 2003 order which sustained the denial of his
motion to suspend arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44.
For unknown reasons, however, he made no discussion in support of said prayer in his petition
and reply to comment. Neither did he attach a copy of the complaint in Civil Case No. Q-00-
41446 nor quote the pertinent portion thereof to prove the existence of a prejudicial question.
At any rate, there is no prejudicial question if the civil and the criminal action can,
according to law, proceed independently of each other. Under Rule 111, Section 3 of the
Revised Rules on Criminal Procedure, in the cases provided in Articles 32, 33, 34 and
2176 of the Civil Code, the independent civil action may be brought by the offended
party. It shall proceed independently of the criminal action and shall require only a
preponderance of evidence.
In the case at bar, the common element in the acts constituting unfair competition under
Section 168 of R.A. No. 8293 is fraud. Pursuant to Article 33 of the Civil Code, in cases of
defamation, fraud, and physical injuries, a civil action for damages, entirely separate and
distinct from the criminal action, may be brought by the injured party. Hence, Civil Case No. Q-
00-41446, which as admitted by private respondent also relate to unfair competition, is an
independent civil action under Article 33 of the Civil Code. As such, it will not operate as a
prejudicial question that will justify the suspension of the criminal cases at bar.

(b) NO. Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure provides:

SEC. 11. Suspension of arraignment. Upon motion by the proper party, the arraignment
shall be suspended in the following cases 

x x x 

(c) A Petition for Review of the resolution of the prosecutor is pending at either the
Department of Justice, or the Office of the President; Provided, that the period of
suspension shall not exceed sixty (60) days counted from the filing of the petition with
the reviewing office.
While the pendency of a Petition for Review is a ground for suspension of the arraignment, the
aforecited provision limits the deferment of the arraignment to a period of 60 days reckoned
from the filing of the petition with the reviewing office. It follows, therefore, that after the
expiration of said period, the trial court is bound to arraign the accused or to deny the motion to
defer arraignment.

In the instant case, petitioner failed to establish that respondent Judge abused his discretion in
denying his motion to suspend. His pleadings and annexes submitted before the Court do
not show the date of filing of the Petition for Review with the Secretary of Justice.
Moreover, the Order dated August 9, 2002 denying his motion to suspend was not
appended to the petition. He thus failed to discharge the burden of proving that he was
entitled to a suspension of his arraignment and that the questioned orders are contrary to
Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure. Indeed, the age-old but
familiar rule is that he who alleges must prove his allegations.

In sum, the dismissal of the petition is proper considering that petitioner has not established that
the trial court committed grave abuse of discretion. So also, his failure to attach documents
relevant to his allegations warrants the dismissal of the petition, pursuant to Section 3,
Rule 46 of the Rules of Civil Procedure, which states:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. The

petition shall contain the full names and actual addresses of all the petitioners and respondents,
a concise statement of the matters involved, the factual background of the case, and the
grounds relied upon for the relief prayed for.

It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the
respondent with the original copy intended for the court indicated as such by the petitioner, and
shall be accompanied by a clearly legible duplicate original or certified true copy of the
judgment, order, resolution, or ruling subject thereof, such material portions of the
record as are referred to therein, and other documents relevant or pertinent
thereto.cralawlibrary 

xxx

The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition. (Emphasis added)
 CASE 2
ANDREA TAN, CLARITA LLAMAS, VICTOR ESPINA and LUISA ESPINA,Petitioners,
vs.
BAUSCH & LOMB, INC., Respondent.
G.R. No.148420
December 15, 2005

DOCTRINE: Section 5 (5) of the 1987 Constitution empowers the Supreme Court to
promulgate rules concerning pleading, practice and procedure in all courts. The
limitations to this rule-making power are the following: the rules must (a) provide a
simplified and inexpensive procedure for the speedy disposition of cases; (b) be uniform
for all courts of the same grade and (c) not diminish, increase or modify substantive
rights. As long as these limits are met, the argument used by petitioners that the
Supreme Court, through A.O. Nos. 113-95 and 104-96, transgressed on Congress' sole
power to legislate, cannot be sustained.

A.O. No. 113-95 designated special intellectual property courts to promote the efficient
administration of justice and to ensure the speedy disposition of intellectual property cases. 

A.O. No. 104-96, on the other hand, was issued pursuant to Section 23 of BP 129   which
transferred the jurisdiction over such crimes from the MTC and MTCC to the RTC and
which furthermore gave the Supreme Court the authority to designate certain branches
of the RTC to exclusively handle special cases in the interest of the speedy and efficient
administration of justice. Accordingly, the RTC was vested with the exclusive and
original jurisdiction to try and decide intellectual property cases.

FACTS

On April 8, 1997, an information for violation of paragraph 1, Article 189  of the Revised

Penal Code (RPC) was filed before Branch 21, RTC, Cebu City against petitioners Andrea
Tan, Clarita Llamas, Victor Espina and Luisa Espina of Best Buy Mart, Inc. The information
read:

That on or about June 27, 1996 and sometime prior or subsequent thereto, in the City of Cebu,
Philippines, and within the jurisdiction of this Honorable Court, abovementioned accused,
conspiring and mutually helping each other, did then and there willfully, unlawfully and
feloniously distribute and sell counterfeit RAY BAN sunglasses bearing the appearance
and trademark of RAY BAN in the aforesaid store wherein they have direct control,
supervision and management thereby inducing the public to believe that these goods
offered by them are those of RAY BAN to the damage and prejudice of BAUSCH AND
LOMB, INC., the exclusive owner and user of trademark RAY BAN on sunglasses.

On January 21, 1998, respondent filed a motion to transfer the case to Branch 9, RTC, Cebu
City. Administrative Order No. 113-95 (A.O. No. 113-95) designated the said branch as the
special court in Region VII to handle violations of intellectual property rights.

On March 2, 1998, petitioners filed a motion to quash the information on the ground that
the RTC had no jurisdiction over the offense charged against them. The provided by the
RPC for the crime was within the jurisdiction of the Municipal Trial Court in Cities
(MTCC). 

On March 6, 1998, respondent filed an opposition to the motion to quash, explaining that
BP 129 had already transferred the exclusive jurisdiction to try and decide violations of
intellectual property rights from the MTC and MTCC to the RTC and that the Supreme
Court had also issued Administrative Order No. 104-96 (A.O. No. 104-96) deleting and
withdrawing the designation of several branches of the MTC and MTCC as special
intellectual property courts.

On December 22, 1998, the court a quo denied respondent's motion to transfer the case
and granted petitioners' motion to quash. It ruled:

Accused was charged for violation of Art. 189 of Revised Penal Code the penalty
for which is prision correccional in its minimum period or a fine ranging from P500.00
to P2,000.00, or both. Hence, within the jurisdiction of the metropolitan and
municipal trial courts (Sec. 32(2), B.P. Blg. 129, as amended).

Administrative Orders Nos. 113-95 and 104-96, cited by plaintiff, cannot prevail
over the express provisions of Batas Pambansa Blg. 129, as amended, jurisdiction
of courts being a matter of substantive law.

If this Court has no jurisdiction over the case, the same is true with Branch 9 of the same
court, Therefore, the motion to transfer the case to the latter should fail.

WHEREFORE, premises considered, the motion to transfer is denied, while the motion
to quash is granted. The case is thus dismissed.

Respondent received the order on January 21, 1999 but filed neither an appeal nor a motion for
reconsideration. Rather, it filed a petition for certiorari  in the Court of Appeals on March 23,
1999 or one (1) day beyond the period allowed in Section 4, Rule 65 of the Rules of Court.

ISSUE

W/N the jurisdiction over the crime allegedly committed by petitioners is vested on the
RTC.

HELD

YES. Section 5 (5) of the 1987 Constitution empowers the Supreme Court to promulgate
rules concerning pleading, practice and procedure in all courts. The limitations to this
rule-making power are the following: the rules must (a) provide a simplified and
inexpensive procedure for the speedy disposition of cases; (b) be uniform for all courts
of the same grade and (c) not diminish, increase or modify substantive rights. As long as
these limits are met, the argument used by petitioners that the Supreme Court, through
A.O. Nos. 113-95 and 104-96, transgressed on Congress' sole power to legislate, cannot
be sustained.

A.O. No. 113-95 designated special intellectual property courts to promote the efficient
administration of justice and to ensure the speedy disposition of intellectual property cases. 
A.O. No. 104-96, on the other hand, was issued pursuant to Section 23 of BP 129 which
transferred the jurisdiction over such crimes from the MTC and MTCC to the RTC and
which furthermore gave the Supreme Court the authority to designate certain branches
of the RTC to exclusively handle special cases in the interest of the speedy and efficient
administration of justice. Accordingly, the RTC was vested with the exclusive and
original jurisdiction to try and decide intellectual property cases.

The transfer of jurisdiction from the MTC and MTCC to the RTC did not in any way affect the
substantive rights of petitioners. The administrative orders did not change the definition or scope
of the crime of unfair competition with which petitioners were charged.

Both administrative orders therefore have the force and effect of law, having been validly issued
by the Supreme Court in the exercise of its constitutional rule-making power. The trial court,
being a subordinate court, should have followed the mandate of the later A.O. 104-96 which
vested jurisdiction over the instant case on the RTC. Thus, the appellate court correctly found
that the court a quo committed grave abuse of discretion.

Furthermore, the order of the trial court was a patent nullity. In resolving the pending incidents of
the motion to transfer and motion to quash, the trial court should not have allowed petitioners to
collaterally attack the validity of A.O. Nos. 113-95 and 104-96. We have ruled time and again
that the constitutionality or validity of laws, orders, or such other rules with the force of law
cannot be attacked collaterally. There is a legal presumption of validity of these laws and rules.
Unless a law or rule is annulled in a direct proceeding, the legal presumption of its validity
stands. The trial court's order was consequently null and void. 

The transfer of this case to Branch 9, RTC, Cebu City, however, is no longer possible. A.M. No.
03-03-03-SC consolidated the intellectual property courts and commercial SEC courts in one
RTC branch in a particular locality to streamline the court structure and to promote expediency.
The RTC branch so designated will try and decide cases involving violations of intellectual
property rights, and cases formerly cognizable by the Securities and Exchange Commission. It
is now called a special commercial court. In Region VII, the designated special commercial
court is Branch 11, RTC, Cebu City. The transfer of this case to that court is therefore
warranted.
 CASE 3

SONY MUSIC ENTERTAINMENT (PHILS.), INC. and IFPI (SOUTHEAST ASIA),

LTD., Petitioners,
vs.
HON. JUDGE DOLORES L. ESPANOL OF THE REGIONAL TRIAL COURT, BRANCH 90,
DASMARIÑAS, CAVITE, ELENA S. LIM, SUSAN L. TAN, DAVID S. LIM, JAMES H. UY,
WILSON ALEJANDRO, JR., JOSEPH DE LUNA, MARIA A. VELA CRUZ, DAVID CHUNG,
JAMES UY, JOHN DOES AND JANE DOES, AND SOLID LAGUNA
CORPORATION, Respondents.
G.R. NO. 156804
March 14, 2005

DOCTRINE: Absent the element of personal knowledge by the applicant or his witnesses
of the facts upon which the issuance of a search warrant may be justified, the warrant is
deemed not based on probable cause and is a nullity, its issuance being, in legal
contemplation, arbitrary, as held by us in   Columbia Pictures, Inc. vs. Court of
Appeals.  Testimony based on what is supposedly told to a witness, being patent hearsay
and, as rule, of no evidentiary weight or probative value, whether objected to or not,
would, alone, not suffice under the law on the existence of probable cause.

FACTS

In a criminal complaint filed with the Department of Justice (DOJ), the Videogram
Regulatory Board (VRB) charged herein private respondents James Uy, David Chung,
Elena Lim and another officer of respondent Solid Laguna Corporation (SLC) with
violation of Presidential Decree (PD) No. 1987. As alleged in the complaint, docketed
as I.S. No. 2000-1576, the four (4) were engaged in the replication, reproduction and
distribution of videograms without license and authority from VRB. On account of this
and petitioners’ own complaints for copyright infringement, the National Bureau of
Investigation (NBI), through Agent Ferdinand M. Lavin, applied on September 18, 2000,
with the RTC at Dasmariñas, Cavite, Branch 80, presided by the respondent judge, for the
issuance of search warrants against private respondents David Chung, James Uy,
John and Jane Does, doing business under the name and style "Media Group" inside the
factory and production facility of SLC at Solid corner Camado Sts., Laguna International
Industrial Park, Biñan, Laguna.

During the proceedings on the application, Agent Lavin presented, as witnesses, Rodolfo
Pedralvez, a deputized agent of VRB, and Rene C. Baltazar, an investigator retained by
the law firm R.V. Domingo & Associates, petitioners’ attorney-in-fact. In their sworn
statements, the three stated that petitioners sought their assistance, complaining about
the manufacture, sale and distribution of various titles of compact discs (CDs) in
violation of petitioners’ right as copyright owners; that acting on the complaint, Agent
Lavin and the witnesses conducted an investigation, in the course of which unnamed
persons informed them that allegedly infringing or pirated discs were being
manufactured somewhere in an industrial park in Laguna; that in the process of their
operation, they were able to enter, accompanied by another unnamed source, the premises of
SLC and to see various replicating equipment and stacks of CDs; and that they were told by
their anonymous source that the discs were being manufactured in the same premises. They
also testified that private respondents were (1) engaged in the reproduction or replication of
audio and video compacts discs without the requisite authorization from VRB, in violation of
Section 6 of PD No. 1987, presenting a VRB certification to such effect; and (2) per petitioners’
certification and a listing of Sony music titles, infringing on petitioners’ copyrights in violation of
Section 208 of Republic Act (RA) No. 8293, otherwise known as Intellectual Property Code.

On the basis of the foregoing sworn statements, the respondent judge issued Search
Warrant No. 219-00 for violation of Section 208 of R.A. No. 8293 and Search Warrant No.
220-00 for violation of Section 6 of PD No. 1987.

The following day, elements of the PNP Criminal Investigation and Detection Group, led by PO2
Reggie Comandante, enforced both warrants and brought the seized items to a private
warehouse of Carepak Moving and Storage at 1234 Villonco Road, Sucat, Paranaque City and
their custody turned over to VRB. An inventory of seized items, as well as a "Return of Search
Warrant" were later filed with the respondent court.

Meanwhile, the respondents in I.S. No. 2000-1576 belabored to prove before the DOJ
Prosecutorial Service that, since 1998 and up to the time of the search, they were licensed by
VRB to operate as replicator and duplicator of videograms.

On the stated finding that "respondents cannot . . . be considered an unauthorized reproducers

of videograms", being "licensed to engage in reproduction in videograms under SLC in which
they are the officers and/or or officials", the DOJ, via a resolution dated January 15, 2001,
dismissed VRB’s complaint in I.S. No. 2000-1576.

On February 6, 2001, private respondents, armed with the DOJ resolution adverted to, moved to
quash the search warrants thus issued. VRB interposed an opposition for the reason that the
DOJ has yet to resolve the motion for reconsideration it filed in I.S. No. 2000-1576.

Eventually, the DOJ denied VRB’s motion for reconsideration, prompting private respondents to
move anew for the quashal of the search warrants. In its supplement to motion, private
respondents attached copies of SLC’s license as videogram duplicator and replicator.

In an order dated October 30, 2001, the respondent judge, citing the January 15, 2001 DOJ
resolution in I.S. No. 2000-1576, granted private respondents’ motion to quash, as
supplemented, dispositively stating: "Nonetheless, such being the case, the aforesaid Search
Warrants are QUASHED"

Petitioners forthwith sought clarification on whether or not the quashal order referred to both
search warrants or to Search Warrant No. 220-00 alone, since it was the latter that was based
on the charge of violation of PD No. 1987. The respondent judge, in a modificatory order dated
January 29, 2002, clarified that her previous order quashed only Search Warrant No. 220-00.

Meanwhile, or on November 22, 2001, petitioners filed with the DOJ an affidavit-complaint,
docketed thereat as I.S. No. 2001-1158, charging individual private respondents with copyright
infringement in violation of Sections 172 and 208 in relation to other provisions of RA No.
8293. Attached to the affidavit-complaint were certain documents and records seized from
SLC’s premises, such as production and delivery records.
Following their receipt of DOJ-issued subpoenas to file counter-affidavits, private respondents
moved, in the search warrant case, that they be allowed to examine the seized items to enable
them to intelligently prepare their defense. On January 30, 2002, respondent judge issued an
order allowing the desired examination, provided it is made under the supervision of the court’s
sheriff and in the "presence of the applicant of Search Warrant No. 219-00".

On February 8, 2002, the parties, represented by their counsels, repaired to the Carepak
warehouse. An NBI agent representing Agent Lavin appeared. The examination, however, did
not push through on account of petitioners’ counsel insistence on Agent Lavin’s physical
presence. Private respondents were able to make an examination on the following scheduled
setting, February 15, 2002, albeit it was limited, as the minutes of the inspection discloses, to
inspecting only one (1) box containing 35 assorted CDs, testing stampers, diskettes, a calendar,
organizers and some folders and documents. The minutes also contained an entry stating -
"Other items/machines were not examined because they cannot be identified as they are not
properly segregated from other items/machines in the warehouse. The parties agreed to
schedule another examination on (to be agreed by the parties) after the items/machines subject
of the examination shall have been segregated from the other items/machines by Carepak
Moving and Storage , Inc."

During the preliminary investigation conducted on February 26, 2002 in I.S. No. 2001-1158,
however, petitioners’ counsel objected to any further examination, claiming that such exercise
was a mere subterfuge to delay proceedings.

On April 11, 2002, individual private respondents, through counsel, filed a "Motion To
Quash Search Warrant (And To Release Seized Properties)" grounded on lack of
probable cause to justify issuance of search warrant, it being inter alia alleged that the
applicant and his witnesses lacked the requisite personal knowledge to justify the valid
issuance of a search warrant; that the warrant did not sufficiently describe the items to be
seized; and that the warrant was improperly enforced. To this motion to quash, petitioners
interposed an opposition dated May 7, 2002 predicated on four (4) grounds. On June 26, 2002,
respondent SLC filed a Manifestation joining its co-respondents in, and adopting, their motion to
quash.

On June 25, 2002, the respondent judge issued the herein first assailed order quashing
Search Warrant No. 219-00 principally on the ground that the integrity of the seized items as
evidence had been compromised, commingled as they were with other articles. Wrote the
respondent judge:

Based on the report submitted, it appears that on February 15, 2002, an examination was
actually conducted. Unfortunately, the alleged seized items were commingled with and not
segregated from thousands of other items stored in the warehouse. Only one box . . . were (sic)
examined in the presence of both parties with the sheriff, such that another date was set . . . .
On February 22, 2002, during the hearing before the Department of Justice (DOJ), [petitioners’
counsel] Atty. Arevalo manifested their objection to the further examination on the alleged
ground that all of the items subject of the DOJ complaint have been examined.

Analyzing the report and the incidents relative thereto, it shows that the items subject of the
questioned Search Warrant were commingled with other items in the warehouse of Carepak
resulting in the failure to identify the machines and other items subject of this Search Warrant,
while the other items enumerated in the said Inventory of Seized Items and Certification of
Legality, Orderliness and Regularity in the Execution and enforcement of Search Warrants were
not examined, hence, the charge imputed against the respondents could not be established as
the evidence to show such violation fails to determine the culpability of said respondents, thus,
violating their constitutional rights.

Excepting, petitioners moved for reconsideration, arguing on the main that the quashal order
was erroneously based on a ground outside the purview of a motion to quash. To this motion,
private respondents interposed an opposition, against which petitioners countered with a reply.

On January 6, 2003, respondent judge issued the second assailed order denying petitioners’

motion for reconsideration on the strength of the following premises:

Careful scrutiny of the records of the case reveals that the application of the above-entitled case
stemmed from the application for Search Warrant alleging that the respondent was not licensed
to duplicate or replicate CDs and VCDs. The Court was misled when the applicants declared
that Solid Laguna Corporation (SLC) is not licensed to engage in replicating/duplicating CDs
and VCDs, when in truth and in fact, SLC was still a holder of a valid and existing VRB license.
Considering the fact that respondent was duly licensed which facts (sic) was not laid bare to this
Court when the application for writ was filed by the private complainant through the National
Bureau of Investigation, this Court hereby recalls and quashes the above writ.

Lastly, taking into account that respondents were licensed to engage in replicating/duplicating
CDs and VCDs, the issuance of search warrant was of no force and effect as there was
absence of probable cause to justify said issuance. xxx Hence, petitioners’ present recourse.

ISSUE
Whether Search Warrant No. 219-00 was properly quashed.

HELD
YES.
1. PERSONAL KNOWLEDGE OF THE APPLICANT AND HIS WITNESSES WAS LACKING.
A core requisite before a warrant shall validly issue is the existence of a probable cause,
meaning "the existence ofsuch facts and circumstances which would lead a reasonably discreet
and prudent man to believe that an offense has been committed and that the objects sought in
connection with the offense are in the place to be searched". And when the law speaks of facts,
the reference is to facts, data or information personally known to the applicant and the
witnesses he may present. Absent the element of personal knowledge by the applicant or
his witnesses of the facts upon which the issuance of a search warrant may be justified,
the warrant is deemed not based on probable cause and is a nullity, its issuance being,
in legal contemplation, arbitrary, as held by us in Columbia Pictures, Inc. vs. Court of
Appeals. Testimony based on what is supposedly told to a witness, being patent hearsay
and, as rule, of no evidentiary weight or probative value, whether objected to or not,
would, alone, not suffice under the law on the existence of probable cause.

The issuance of the search warrant in question did not meet the requirements of probable
cause. The respondent judge did not accordingly err in quashing the same, let alone gravely
abuse her discretion.

2. APPLICANTS AND WITNESSES RELIED MOSTLY ON ALLEGED UNNAMED SOURCES

INDICATING LACK OF PERSONAL KNOWLEDGE. Here, applicant Agent Lavin and his
witnesses, Pedralvez and Baltazar, when queried during the application hearing how they
knew that audio and video compact discs were infringing or pirated, relied for the most
part on what alleged unnamed sources told them and/or on certifications or lists made by
persons who were never presented as witnesses. In net effect, they testified under oath
as to the truth of facts they had no personal knowledge of. The following excerpts of the
depositions of applicant Lavin and his witnesses suggest as much:

A. Deposition of Agent Lavin

28. Question: What happened next?

Answer: We then went to the Laguna Industrial Park, your Honor . . . We then verified from an
informant that David Chung, James Uy . . . under the name and style Media Group were the
ones replicating the infringing CDs.
xxx xxx xxx

36. Question: How do you know that all of these VCDs and CDs you purchased or are indeed
infringing?

Answer: I have with me the VRB certification that the VCDs are unauthorized copies. I also have
with me the Complaint-Affidavit of Sony Music and IFPI that certified that these are infringing
copies, as well as the title list of Sony Music wherein some of the CDs purchased are indicated.

B. Deposition of Baltazar

18. Question: What did you see in that address?

Answer: We saw that they had in stock several infringing, pirated and unauthorized CDs. They
also had videograms without VRB labels, aside from artworks and labels. John Doe gave us a
"Wholesome" CD while Jane Doe gave us "Kenny Rogers Videoke" and "Engelbert
Humperdinck Videoke" which the informant told us were being reproduced in that facility. The
informant further showed us the rooms where the replicating and/or stamping machine was
located.

19. Question: How did you determine that the CDs you purchased are counterfeit, pirated or
unauthorized?

Answer: The Attorney-in-fact of Sony Music and IFPI certified in his Complaint-Affidavit that they
are unauthorized copies. I also have with me a listing of Sony Music titles and some of the CDs
I purchased are in that list.

C. Deposition of Pedralvez

27. Question: What proof do you have they are producing infringing materials?

Answer: We were given some samples by John Doe and Jane Doe. These are Kenny Rogers
Videoke, Engelbert Humperdinck Videoke, and Andrew E. Wholesome CD. The informant told
us that the said samples were being reproduced in the facility.

28. Question: How do you know that all of these VCDs you purchased or got are indeed
unauthorized?
Answer: The VRB has certified that they are unauthorized copies. (Annex "12", Comment, Rollo,
pp. 849-852).

Agent Lavin and his witnesses, judging from their above quoted answers, had no
personal knowledge that the discs they saw, purchased or received were, in fact, pirated
or infringing on petitioners’ copyrights. To us, it is not enough that the applicant and his
witnesses testify that they saw stacks of several allegedly infringing, pirated and
unauthorized discs in the subject facility. The more decisive consideration determinative of
whether or not a probable cause obtains to justify the issuance of a search warrant is that they
had personal knowledge that the discs were actually infringing, pirated or unauthorized copies.

3. MISREPRESENTATION ON THE PART OF THE APPLICANT AND HIS WITNESSES HAD

BEEN ESTABLISHED IN THIS CASE. It cannot be overemphasized that not one of them
testified seeing the pirated discs being manufactured at SLC’s premises. What they
stated instead was that they were given copies of "Kenny Rogers Videoke", "Engelbert
Humperdinck Videoke" and "Andrew E. Wholesome CD" by two anonymous sources,
while yet another informant told them that the discs were manufactured at said premises.

Initial hearsay information or tips from confidential informants could very well serve as
basis for the issuance of a search warrant, if followed up personally by the recipient and
validated
 CASE 4
PEOPLE OF THE PHILIPPINES, HON. LOURDES F. GATBALITE, Presiding Judge, Branch
56, Regional Trial Court, Angeles City and ATTY. BENNIE NICDAO, Special Prosecutor,
Special Operative Group, Economic Intelligence & Investigation Bureau, Petitioners,
vs.
CHRISTOPHER CHOI, Respondent.
G.R. No. 152950
August 3, 2006

DOCTRINE: The determination of probable cause does not call for the application of
rules and standards of proof that a judgment of conviction requires after trial on the
merits. As the term implies, probable cause is concerned with probability, not absolute
or even moral certainty.
FACTS
On April 27, 1999, Mario P. Nieto, Intelligence Operative of the Economic Intelligence and
Investigation Bureau, Department of Finance, applied for a search warrant with the RTC
of Angeles City, Pampanga, Branch 56, against respondent Christopher Choi for violation
of Section 168, paragraphs 2 and 3 (a) and (c), in relation to Section 169 of RA 8293, also
known as the Intellectual Property Code.

After examination of the applicant and his witnesses, namely, Max Cavalera and David
Lee Sealey, Judge Lourdes F. Gatbalite issued Search Warrant No. 99-17 dated April 27,
1999 worded as follows:

TO ANY PEACE OFFICER:

G r e e t i n g s:
It appearing to the satisfaction of the undersigned, after examining under oath in the form of
searching and probing questions, the applicant, MARIO P. NIETO, Intelligence Operative,
Economic Intelligence Investigation Bureau, Department of Finance, and his witnesses Max
Cavalera and David Lee Sealey that there are good and sufficient reasons to believe that
Christopher Choi of No. 25-13 Columbia Street, Carmenville Subd., Angeles City has in his
possession, control and custody reams and packs of fake Marlboro Red Cigarettes, as well as
cardboard cases of fake Marlboro Red Cigarettes (each cardboard case contains two (2)
[m]aster [c]ases of Marlboro and each [m]aster case contains fifty (50) reams) being distributed,
kept and sold thereat in violation of Section 168, par. 2 and 3 (a) and (c) in relation to Sec 169
of R.A. 8293;

You are hereby commanded to make an immediate search at anytime of the day or night of the
above-premises and forthwith seize and take possession of the aforedescribed items found at
the residence/warehouse of Christopher Choi at No. 25-13 Columbia Street, Carmenville Subd.,
Angeles City. xxxx

The search was conducted on the same date.

On May 12, 1999, respondent filed a "motion to quash search warrant" and a
"supplemental motion to quash" on June 22, 1999. Both were denied by Judge Gatbalite
in an order dated November 29, 1999. Reconsideration was likewise denied.

On June 19, 2000, respondent filed a petition for certiorari and prohibition before the CA.
He alleged that Judge Gatbalite committed grave abuse of discretion in refusing to quash
the search warrant, arguing that probable cause was not sufficiently established as the
examination conducted was not probing and exhaustive and the warrant did not
particularly describe the place to be searched. Respondent also prayed that Atty. Bennie
Nicdao be prohibited from using as evidence the articles seized by virtue of the search warrant.
This was granted by the CA in a decision dated April 10, 2002. 

According to the CA, in determining whether there was probable cause to believe that the
cigarettes purchased by Nieto were fake and in violation of RA 8293, Judge Gatbalite failed to
ask searching and probing questions of witness David Lee Sealey.

In addition, the CA ruled that Judge Gatbalite committed grave abuse of discretion when she
merely relied on the conclusion of Sealey that the cigarettes he received from Nieto were fake.
She should have at least required Sealey to present the alleged fake Marlboro cigarettes and
the genuine ones for comparison, instead of relying on his testimony alone. The CA reasoned
that this was an absolute requirement under the Supreme Court ruling in 20th Century Fox Film
Corporation v. Court of Appeals. 

ISSUE(s)

(1) Did Judge Gatbalite purportedly not comply strictly with the requirement to determine
the existence of probable cause by personally examining the applicant and his witnesses
through searching questions and answers?
(2) Should we apply the doctrine in 20th Century Fox Film Corporation?

HELD

(1) NO. A search warrant can be issued only upon a finding of probable cause. Probable cause
means such facts and circumstances which would lead a reasonably discreet and prudent man
to believe that an offense has been committed and that the objects sought in connection with
the offense are in the place sought to be searched. The determination of the existence of
probable cause requires the following: 

(1) the judge must examine the complainant and his witnesses personally; 
(2) the examination must be under oath and 
(3) the examination must be reduced in writing in the form of searching questions and answers.

The searching questions propounded to the applicant and the witnesses depend largely
on the discretion of the judge. Although there is no hard-and-fast rule governing how a judge
should conduct his examination, it is axiomatic that the examination must be probing and
exhaustive, not merely routinary, general, peripheral, perfunctory or pro-forma. The judge must
not simply rehash the contents of the affidavit but must make his own inquiry on the intent and
justification of the application. The questions should not merely be repetitious of the averments
stated in the affidavits or depositions of the applicant and the witnesses. If the judge fails to
determine probable cause by personally examining the applicant and his witnesses in the form
of searching questions before issuing a search warrant, grave abuse of discretion is committed.

The determination of probable cause does not call for the application of rules and
standards of proof that a judgment of conviction requires after trial on the merits. As the
term implies, probable cause is concerned with probability, not absolute or even moral
certainty.

In this case, aside from the testimony of Sealey, petitioner judge also heard the
testimony of applicant Nieto:

Q: In connection with Search Warrant 99-17, are you the same Mario Nieto who is the applicant in this
application for search warrant filed today April 27, 1999?
A: Yes, your Honor.
Q: Do you know this Christopher Choi referred to herein?
A: Yes, your Honor.
Q: Why do you know him?
A: He was introduced to us by Michael Chua, your Honor.
Q: As what?
A: As the supplier for the goods.
Q: Subject of the application?
A: Yes, your Honor, in violation of Section 169 of R.A. 8293.
Q: How did you know him?
A: When I was conducting a test-buy operation against Mr. Michael Chua, Mr. Michael Chua told me that
the bulk of supply if we need more supply we can get from the source, a certain Christopher Choi, who
lives in the same village and who is actually the supplier for the entire region.
Q: Where did you see him. This Christopher Choi?
A: I went to his house, your Honor.
Q: Where?
A: At No. 25-13 Columbia St., Carmenville Subd., Angeles City, Pampanga.
Q: Upon arriving at the place what did you do?
A: Upon arriving at the place, your Honor, I introduced myself as the one who was referred by a certain
Michael Chua who is interested in buying the Marlboro cigarettes from him and he accommodated me
and showed me the sample that he has and I was able to procure the samples from him, the samples that
like what we did to the others were inspected by certain Mr. David Lee Sealey, the representative and
authority from the Philip Morris.
Q: Did you actually buy those samples?
A: Yes, your Honor, I got the samples form Mr. Christopher Choi and I submitted them to Mr. David Lee
Sealey.
Q: How many Marlboro cigarettes did you buy?
A: We bought only one ream, P17.00 per pack.
Q: Do you know from what particular place the house of Christopher Choi did he got (sic) those samples?
A: The volume stocks were found inside the house, they are almost everywhere in the house of
Christopher Choi.
Q: There is a sketch here attached to your application, can you point it out here?
A: Yes, your Honor, at the warehouse, in the storage room as shown in the lay out of the house, it is
adjacent to the residential house as shown in the sketch.
Q: You went to the warehouse?
A: We were shown [the] entire area by the supplier, Christopher Choi. As a matter of fact he was trying to
show us how much volume he has and his capacity to supply.

Max Cavalera, a witness who accompanied Nieto during the "test-buy" operation, also
testified: 
Q How about this Christopher Choi?
A As I’ve said earlier, he was one of those identified by the informant storing and selling counterfeit
Marlboro cigarettes, so on April 22, 1999 we conducted a surveillance and we were able to confirm that
the said cigarettes are being stored at the subject place.
Q At what place?
A At 25-13 Columbia St., Carmenville Subd., Angeles City. On April 23, 1999 at about 8:30 p.m., Mario
Nieto and I again went to the subject place to conduct a test-buy operation. [A]fter Mr. Choi had been
convinced of our intention to buy cigarettes from him, he brought us to his warehouse where he showed
to us several cardboard cases of Marlboro cigarettes.

Given the foregoing testimonies and applying the established standards in determining
probable cause, we cannot say that Judge Gatbalite committed grave abuse of discretion
in issuing the search warrant. Her questions were sufficiently probing, not at all
superficial and perfunctory. The testimonies were consistent with each other and the
narration of facts was credible. The testimonies and other evidence on record
constituted adequate bases to establish probable cause that the alleged offense had
been committed.

(2) NO. As correctly pointed out by petitioners, 20th Century Fox Film Corporation,
insofar as it required the presentation of the master tapes for comparison with the
pirated copies for a search warrant to issue, had already been superseded by Columbia
Pictures, Inc. v. Court of Appeals:

More to the point, it is felt that the reasonableness of the added requirement in 20th Century
Fox calling for the production of the master tapes of the copyrighted films for determination of
probable cause in copyright infringement cases needs revisiting and clarification. xxx xxx xxx

In fine, the supposed pronunciamento in said case regarding the necessity for the presentation
of the master tapes of the copyrighted films for the validity of search warrants should at most be
understood to merely serve as a guidepost in determining the existence of probable cause in
copyright infringement cases where there is doubt as to the true nexus between the master
tape and the pirated copies. An objective and careful reading of the decision in said case
could lead to no other conclusion than that said directive was hardly intended to be a
sweeping and inflexible requirement in all or similar copyright infringement cases.
Judicial dicta should always be construed within the factual matrix of their parturition, otherwise
a careless interpretation thereof could unfairly fault the writer with the vice of overstatement and
the reader with the fallacy of undue generalization. xxx xxx xxx

It is evidently incorrect to suggest, as the ruling in 20th Century Fox may appear to do,
that in copyright infringement cases, the presentation of master tapes of the copyrighted
films is always necessary to meet the requirement of probable cause and that, in the
absence thereof, there can be no finding of probable cause for the issuance of a search
warrant. xxx xxx xxx

Accordingly, to restrict the exercise of discretion by a judge by adding a particular requirement

(the presentation of master tapes, as intimated by 20th Century Fox) not provided nor implied in
the law for a finding of probable cause is beyond the realm of judicial competence or
statesmanship. It serves no purpose but to stultify and constrict the judicious exercise of a
court’s prerogatives and to denigrate the judicial duty of determining the existence of probable
cause to a mere ministerial or mechanical function. There is, to repeat, no law or rule which
requires that the existence of probable cause is or should be determined solely by a
specific kind of evidence. Surely, this could not have been contemplated by the framers
of the Constitution, and we do not believe that the Court intended the statement in 20th
Century Fox regarding master tapes as the dictum for all seasons and reasons in
infringement cases.

It is obvious that 20th Century Fox Film Corporation should not be applied to the present
case since this involves the offense of unfair competition and not copyright
infringement. More importantly, as pronounced by the Court in Columbia Pictures, Inc.,
the judge’s exercise of discretion should not be unduly restricted by adding a
requirement that is not sanctioned by law.