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REPUBLIC GAS CORPORATION v. PETRON CORPORATION

FACTS:

Petron Corporation and Pilipinas Shell Petroleum Corporation, two of the largest bulk suppliers and producers of LPG in the Philippines, filed a petition for review on certiorari to reverse the decision of the Court of Appeals. Petron is the registered owner of the trademarks GASUL and GASUL cylinders, while Shell is the authorized user of the tradename and trademarks SHELLANE and SHELL device. The respondents are the directors and officers of Republic Gas Corporation (REGASCO), a company engaged in the business of refilling, buying, selling, and distributing LPG.

The LPG Dealers Associations received reports of unauthorized refilling, sale, and distribution of LPG cylinders bearing the trademarks of the petitioners. A letter-complaint was filed with the National Bureau of Investigation (NBI), which conducted an investigation and confirmed that REGASCO was engaged in the unauthorized refilling and sale of LPG cylinders bearing the petitioners' trademarks. A test-buy operation was conducted, wherein empty LPG cylinders were brought to REGASCO and witnessed the refilling of the cylinders. Cash Invoice No. 191391 was issued as evidence of the payment for the refilling. The NBI later found that the refilled cylinders were also underfilled.

NBI Senior Agent De Jemil applied for the issuance of search warrants against the private respondents and/or occupants of REGASCO's LPG Refilling Plant for alleged violation of the law governing the sale and distribution of LPG. The complaint filed by the NBI against the respondents alleged violations of Sections 155 and 168 of Republic Act (RA) No. 8293, also known as the Intellectual Property Code of the Philippines.

The Regional Trial Court (RTC) issued search warrants based on the agents' testimony and evidence. The NBI served the search warrants and seized various empty and filled Shellane and Gasul cylinders, as well as other related items, from the REGASCO premises. However, the Assistant City Prosecutor recommended the dismissal of the complaint, finding insufficient evidence to support the allegations. The Secretary of the Department of Justice affirmed the dismissal, stating that there was no proof that the respondents sold the petitioners' products or imitated their registered trademarks.

ISSUES:

  1. Whether the Petition for Certiorari filed by RESPONDENTS should have been denied outright.

  2. Whether sufficient evidence was presented to prove that the crimes of Trademark Infringement and Unfair Competition had been committed.

  3. Whether probable cause exists to hold INDIVIDUAL PETITIONERS liable for the offense charged.

  4. Whether the unauthorized refilling of LPG containers bearing registered marks constitutes trademark infringement.

  5. Whether the act of selling goods by giving them the general appearance of goods of another manufacturer constitutes unfair competition.

  6. Whether corporate officers and/or directors may be held individually liable for the crimes committed by the corporation.

  7. Whether the petitioners' liability as corporate officers can be shielded by the separate corporate personality of the corporation.

RULING:

  1. The general rule is that a motion for reconsideration is a condition sine qua non before a certiorari petition may lie. However, exceptions to this rule exist, such as when the questions raised in the certiorari proceedings have already been passed upon by the lower court or when there is an urgent necessity for the resolution of the question. In this case, the filing of a motion for reconsideration may be dispensed with as the questions raised in the petition are the same as those already argued and passed upon by the Secretary of Justice.

  2. The core issue is whether probable cause exists to hold petitioners liable for trademark infringement and unfair competition. Section 155 of Republic Act No. 8293 provides the acts constituting trademark infringement, while Section 168 provides the acts constituting unfair competition. The prosecutor and the Department of Justice both found that there was insufficient evidence to establish that the private respondent engaged in selling the petitioners' products or imitated their registered trademarks. Moreover, the nature of the private respondent's business as a refilling and marketing station of liquefied petroleum gas did not deceive customers or pass off the goods as those of the complainants. Thus, the prosecutor's dismissal of the complaint was affirmed.

  3. Yes, the unauthorized refilling of LPG containers bearing registered marks constitutes trademark infringement. This act is likely to cause confusion, mistake, or deception among the buyers or consumers, as they have no way of knowing that the gas contained in the LPG tanks is not the authorized product of the trademark owner.

  4. Yes, the act of selling goods by giving them the general appearance of goods of another manufacturer constitutes unfair competition. By refilling and selling LPG cylinders bearing registered marks, the defendants are misleading prospective purchasers into buying their merchandise under the impression that they are buying goods from the registered trademark owner.

  5. The Supreme Court affirmed the decision of the Court of Appeals and held that corporate officers and/or directors may be individually held liable for the crimes committed by the corporation. The Court emphasized that being in direct control and supervision of the corporation, the petitioners must have known or been aware of the unlawful acts committed by the corporation. The existence of the corporate entity does not shield corporate agents from prosecution if they knowingly and intentionally caused the corporation to commit a crime. The petitioners cannot hide behind the separate corporate personality of the corporation to escape criminal liability.

PRINCIPLES:

  • A motion for reconsideration is generally a prerequisite for a certiorari petition, but there are exceptions when a motion for reconsideration may be dispensed with.

  • Probable cause is required to hold a person liable for trademark infringement and unfair competition, as defined by the relevant provisions of Republic Act No. 8293.

  • In trademark infringement and unfair competition cases, the evidence must establish that the defendant engaged in acts that deceive customers or pass off goods as those of the complainant.

  • Unauthorized use of a container bearing a registered trademark, which is likely to cause confusion, mistake, or deception, can be considered as trademark infringement.

  • Unfair competition involves passing off or attempting to pass off the goods or business of one person as the goods or business of another with the intention to deceive the public.

  • Passing off occurs when the defendant gives his goods the general appearance of the goods of his competitor to mislead prospective purchasers.

  • It is not necessary for actual sale of the goods or services to occur for trademark infringement to take place.

  • Corporate officers and directors can be prosecuted for trademark infringement and unfair competition if their acts, default, or omission cause harm to the corporation.

  • Corporate officers and/or directors may be individually held liable for the crimes committed by the corporation.

  • The separate corporate personality of a corporation does not shield corporate agents who knowingly and intentionally caused the corporation to commit a crime.