FIRST DIVISION
November 9, 2016
G.R. No. 205972
CATERPILLAR, INC., Petitioner
vs.
MANOLO P. SAMSON, Respondent
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 164352
CATERPILLAR, INC., Petitioner,
vs.
MANOLO P. SAMSON, Respondent.
D E C I S I O N
BERSAMIN, J.:
The determination of probable cause to charge a person in court for a criminal offense is exclusively lodged in the Executive Branch of the Government, through the Department of Justice. Initially, the determination is done by the investigating public prosecutor, and on review by the Secretary of Justice or his duly authorized subordinate. The courts will respect the determination, unless the same shall be shown to have been made in grave abuse of discretion amounting to lack or excess of jurisdiction.
The Cases
Before us are the consolidated cases of G.R. No. 2059721 and G.R. No. 164352.2
G.R. No. 164352 involves the appeal by petition for review on certiorari of Caterpillar, Inc. (Caterpillar) to reverse the decision promulgated on January 21, 20043 by the Court of Appeals (CA) in CA-G.R. SP No. 75526, and the resolution promulgated on June 30, 2004 denying the motion for reconsideration thereof.4
G.R. No. 205972 relates to the appeal brought by Caterpillar to assail the decision and resolution promulgated in CA-G.R. SP No. 102316 respectively on May 8, 20125 and February 12, 2013,6 whereby the CA affirmed the resolutions of the Department of Justice (DOJ) finding that there was no probable cause to indict Manolo P. Samson (Samson) for unfair competition.
Antecedents
Caterpillar is a foreign corporation engaged in the manufacture and distribution of footwear, clothing and related items, among others. Its products are known for six core trademarks, namely, "CATERPILLAR", "CAT" "CATERPILLAR & DESIGN" "CAT AND DESIGN", "WALKING MACHINES" and "TRACK-TYPE TRACTOR & DESIGN (Core Marks),7 all of which are alleged as internationally known. On the other hand, Samson, doing business under the names and styles of Itti Shoes Corporation, Kolm's Manufacturing Corporation and Caterpillar Boutique and General Merchandise, is the proprietor of various retail outlets in the Philippines selling footwear, bags, clothing, and related items under the trademark "CATERPILLAR", registered in 1997 under Trademark Registration No. 64705 issued by the Intellectual Property Office (IPO).8
G.R. No. 164352
On July 26, 2000, upon application of the National Bureau of Investigation (NBI), the Regional Trial Court (RTC), Branch 56, in Makati City issued Search Warrants Nos. 00-022 to 00-032, inclusive, all for unfair competition,9 to search the establishments owned, controlled and operated by Samson. The implementation of the search warrants on July 27, 2000 led to the seizure of various products bearing Caterpillar's Core Marks.
Caterpillar filed against Samson several criminal complaints for unfair competition in the Department of Justice (DOJ), docketed as LS. Nos. 2000-13 54 to 2000-13 64, inclusive.
Additionally, on July 31, 2000, Caterpillar commenced a civil action against Samson and his business entities, with the IPO as a nominal party10 - for Unfair Competition, Damages and Cancellation of Trademark with Application for Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction - docketed as Civil Case No. Q-00-41446 of the RTC in Quezon City. In said civil action, the RTC denied Caterpillar's application for the issuance of the TRO on August 17, 2000.
The DOJ, through Senior State Prosecutor Jude R. Romano, issued a joint resolution dated November 15, 200111 recommending that Samson be criminally charged with unfair competition under Section 168.3 (a),12 in relation to Section 123.l(e),13 Section 131.114 and Section 170,15 all of Republic Act No. 8293, or the Intellectual Property Code of the Philippines (IP Code).
However, because Samson and his affiliate companies allegedly continued to sell and distribute products clothed with the general appearance of its own products, Caterpillar again applied for another set of search warrants against Samson and his businesses. The RTC, Branch 172, in Valenzuela City issued Search Warrants Nos. 12-V-00,16 13-V-00,17 20-V-0018 and 29-V-0019 upon application of the NBI, by virtue of the implementation of which several goods were seized and confiscated by the NBI agents.
As a consequence, Caterpillar filed 26 criminal complaints for unfair competition on January 31, 2001, docketed as LS. Nos. 2001-42 to 2001-67, against Samson and/or the occupants of his affiliate entities before the DOJ.20 In due course, the DOJ, through State Prosecutor Zenaida M. Lim, issued a joint resolution dated September 28, 200121 recommending the filing of criminal complaints for unfair competition under Section 168.3(a), in relation to Section 123 .1, Section 131.1 and Section 170 of the IP Code. Accordingly, six criminal complaints were filed in the RTC, Branch 256, in Muntinlupa City, presided by Judge Alberto L. Lerma, docketed as Criminal Cases Nos. 02-238 to 02-243.
On January 17 and 22, 2002, Samson filed a petitions for review with the Office of the Secretary of Justice to appeal the joint resolutions in LS. Nos. 2000-1354 to 2000-136422 and LS. Nos. 2001-042 to 2001-067.23
On May 30, 2002, Samson filed a Motion to Suspend Arraignment in Criminal Cases Nos. 02-238 to 243,24 citing the following as grounds:25
I.
THERE EXISTS PREJUDICIAL QUESTIONS PENDING LITIGATION BEFORE THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 90, IN CIVIL CASE NO. Q-00-41446 ENTITLED: "CATERPILLAR, INC., ET AL. VS. ITTI SHOES CORPORATION, ET AL.," THE FINAL RESOLUTIONS OF WHICH WILL DETERMINE THE OUTCOME OF THE INSTANT CRIMINAL CASES.
II.
ACCUSED HAS FILED PETITIONS FOR REVIEW WITH THE DEPARTMENT OF JUSTICE ASSAILING THE RESOLUTIONS OF THE CHIEF STATE PROSECUTOR WHO CAUSED THE FILING OF THE INSTANT CASES AND ARE STILL PENDING THEREIN UP TO THE PRESENT.
In the meanwhile, on July 10, 2002, the DOJ, through Secretary Hernando B. Perez, issued a resolution26 denying Samson's petition for review in I.S. Nos. 2000-1354 to 2000-1364. Samson's motion for reconsideration was likewise denied on May 26, 2003.
On September 23, 2002, Presiding Judge Lerma of the RTC granted Samson's Motion to Suspend Arraignment, and suspended the arraignment and all other proceedings in Criminal Cases Nos. 02-240 to 02-243 until Civil Case No. Q-00-41446 was finally resolved,27 holding:
After a careful scrutiny of the case, this Court finds that private complainant, in Civil Case No. Q-00-41446, seeks for the cancellation of the trademark "CATERPILLAR" which is registered in the name of the accused and to prevent the latter from using the said trademark ("CATERPILLAR"), while the issue in the instant case is the alleged unlawful use by the accused of the trademark "CATERPILLAR" which is claimed to be owned by the private complainant. From the foregoing, this Court believes that there exists a prejudicial question since the determination of who is really the lawful or registered user of the trademark "CATERPILLAR" will ultimately determine whether or not the instant criminal action shall proceed. Clearly, the issues raised in Civil Case No. Q-00-41446 is similar or intimately related to the issue in the case at bar for if the civil case will be resolved sustaining the trademark registration of the accused for the trademark CATERPILLAR, then the latter would have all the authority to continue the use of the said trademark as a consequence of a valid registration, and by reason of which there may be no more basis to proceed with the instant criminal action.28
After the RTC denied its motion for reconsideration29 on December 5, 2002,30 Caterpillar elevated the matter to the CA by petition for certiorari on February 14, 2003,31 docketed as C.A.-G.R. SP No. 75526 entitled Caterpillar, Inc. v. Hon. Alberto L. Lerma, in his capacity as Presiding Judge of Branch 256 of the Regional Trial Court, Muntinlupa City, and Manolo P. Samson, alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC in suspending the arraignment and other proceedings in Criminal Cases Nos. 02-238 to 02-243 on the ground of the existence of an alleged prejudicial question in Civil Case No. Q-00-41446 then pending in the RTC in Quezon City whose resolution would determine the outcome of the criminal cases.
Meanwhile, on January 13, 2003, Acting Justice Secretary Ma. Merceditas N. Gutierrez reversed and set aside the resolution issued by State Prosecutor Lim in I.S. No. 2001-042 to 2001-067, and directed the Chief State Prosecutor to cause the withdrawal of the criminal informations filed against Samson in court,32 disposing as follows:
the assailed joint resolution is hereby REVERSED and SET ASIDE. The Chief State Prosecutor is directed to forthwith cause the withdrawal of the informations filed in court against respondent Manolo P. Samson and to report action taken hereon within ten (10) days from receipts hereof.33ACCORDINGLY,