Petron Corporation and People of the Philippines vs. William Yao, Sr. et al.

Unfair competition under Section 168 of R.A. No. 8293 is a continuing offense, not a delito continuado, because the violation of the law is deemed continuing by reason of the very nature of the offense committed. In transitory or continuing offenses where some acts material and essential to the crime occur in one province and some in another, the court of either province has jurisdiction to try the case; however, in cases of concurrent jurisdiction, the court first acquiring jurisdiction excludes the other courts.

Petron Corporation is a corporation organized under Philippine law and one of the bulk suppliers of Liquefied Petroleum Gas (LPG) in the Philippines, using the trademark "GASUL" for its LPG products. It is the only entity in the Philippines authorized to refill, use, sell, and distribute Petron Gasul LPG containers and/or products. Respondents are the Directors and Officers of Masagana Gas Corporation, which was reported to be engaged in the unauthorized refilling, sale, and distribution of Petron-owned Gasul LPG cylinders. Petron engaged the services of Bernabe Alajar of Able Research and Consulting Services, Inc. to investigate reported violations of the corporation's intellectual property rights, who then coordinated with the National Bureau of Investigation (NBI).

Petron Corporation, a corporation organized under Philippine law and one of the bulk suppliers of Liquefied Petroleum Gas (LPG) in the Philippines, uses the trademark "GASUL" for its LPG products and is the only entity in the Philippines authorized to refill, use, sell, and distribute Petron Gasul LPG containers and/or products. It came to Petron's attention that some entities, including Masagana Gas Corp (Masagana), were engaged in the unauthorized refilling, sale, and distribution of Petron-owned Gasul LPG cylinders. Pursuant to these reports, Petron engaged the services of Bernabe Alajar of Able Research and Consulting Services, Inc. to investigate reported violations of the corporation's intellectual property rights and to gather evidence. Alajar coordinated with the National Bureau of Investigation (NBI), and sometime in February 2003, NBI agents together with Alajar conducted a discreet surveillance operation on the Masagana refilling plant located in Trece Martires, Cavite.

On February 13 and February 27, 2003, NBI agent Riche N. Oblanca and Alajar conducted test-buys at the Masagana refilling plant in Trece Martires, Cavite, wherein they personally witnessed Masagana employees in the act of refilling Petron Gasul LPG cylinders and selling them. Cash invoices were issued to them after they purchased the LPG tanks. During their surveillance on February 18, 2003, the NBI agents and Alajar followed a ten-wheeler truck of Masagana carrying Petron Gasul LPG cylinders from its refilling plant in Trece Martires, Cavite to its warehouse located in Makati City. Upon arrival at the Makati warehouse, they noticed that another four-wheeler truck containing Petron Gasul LPG cylinders was parked in front of said warehouse. On February 27, 2003, the NBI agents and Alajar went back to Masagana's warehouse in Makati City where they saw at least one hundred twenty (120) Petron Gasul LPG cylinders in the premises. They were informed by a Masagana employee that the company is engaged in the sale and distribution of Petron Gasul LPG. On the same day, they purchased another Petron Gasul LPG, and Cash Invoice No. 981938 was issued evidencing the sale.

On April 3, 2003, NBI Agents Oblanca and Angelo Zarzoso separately applied for the issuance of Search Warrants before the RTC, Branch 17, Cavite City and RTC, Branch 56, Makati City against respondents for violations of Section 155 in relation to Section 170 of R.A. No. 8293. Acting on the Complaint Affidavit of Alajar, on March 8, 2010, the Task Force on Intellectual Property Piracy of the Department of Justice (DOJ) issued a Resolution recommending that two separate Informations for violation of Section 168.3 in relation to Section 170 of RA 8293 be filed against respondents. An Information for violation of Section 168 in relation to Section 170 of RA No. 8293 was filed against respondents with the trial court of Trece Martires City (TMC RTC), docketed as Criminal Case No. 239-10. An Information for violation of Section 168, in relation to Section 170 of R.A. No. 8293, was also filed on February 21, 2011 against respondents with the trial court of Makati City (Makati RTC), docketed as Criminal Case No. 11-529.

On April 15, 2011, private respondents filed a motion to quash information before the Makati RTC arguing that: (a) the trial court has no jurisdiction over the subject matter of the case; (b) the facts charged do not constitute the offense of unfair competition; (c) the accused are being indicted for the same/identical offense arising from the same act in violation of their rights to be protected against double jeopardy; (d) the information is vague and ambiguous; and (e) factual defenses may be considered in the determination of the motion to quash. The Makati RTC issued a Resolution dated June 23, 2011 denying the motion for lack of merit and scheduled the case for arraignment. After several postponements, the accused were finally arraigned on July 24, 2014, and all entered pleas of "NOT GUILTY."

Private respondents filed an Urgent Motion to Dismiss on December 4, 2014, contending that the two separate Informations filed before the Makati City and Trece Martires City trial courts for unfair competition contain the same set of facts, alleged identical acts, all producing one continuing offense, one single crime, which necessitate the filing of only one Information. Since the Information for unfair competition was filed first in Trece Martires City, that court had already acquired exclusive jurisdiction over the same to the exclusion of all others. On February 16, 2015, the Makati RTC issued an Order denying the Urgent Motion to Dismiss. Private respondents filed a Motion for Reconsideration, and the Makati City RTC issued the first assailed Resolution dated May 29, 2015 granting the Motion for Reconsideration, holding that the crime of unfair competition is a transitory offense, hence, the court had no more jurisdiction to take cognizance of the criminal case since the TMC RTC already acquired jurisdiction over the same. The cash bonds put up by the five accused were ordered released. Petron sought reconsideration but was unsuccessful as shown by the second assailed Order dated September 29, 2015.

Petron filed with the CA a petition for certiorari alleging grave abuse of discretion committed by the RTC of Makati City. On March 20, 2018, the CA issued its assailed Decision dismissing the petition and affirming the Makati RTC's Resolution and Order. The CA found that the RTC correctly quashed the Information for the crime of unfair competition on the basis that it is a transitory or continuing crime, and since the RTC of Trece Martires City had taken prior cognizance of the case, it was divested of jurisdiction. The CA ruled that the crime of unfair competition committed in Trece Martires City, Cavite and in Makati City were motivated by a single criminal impulse, hence only one crime was committed. Petron filed a motion for reconsideration which the CA denied in a Resolution dated November 28, 2018.

• Continuing Crime vs. Transitory Crime: Petron contended that the CA mischaracterized the crime of unfair competition as a continuing crime, erroneously concluding that there can only be a single crime of unfair competition committed regardless of the acts involved. Petron claimed there is a clear distinction between the concepts of continuing crime, which is used to determine criminal liability arising from a series of acts, and a transitory crime, which is a concept in criminal procedure used to determine territorial jurisdiction for crimes whose elements occurred in different jurisdictions.

• Single Criminal Impulse: Petron argued that while the crime of unfair competition is a transitory crime, it is not a continuing crime since the distinct acts of selling counterfeit goods on different dates and in different locations do not arise from a single criminal impulse. The elements of fraud and deception in unfair competition only materialized during the act of selling counterfeit goods, thus each sale constitutes an independent unlawful act of deceiving the public which is separate and distinct commission of the crime of unfair competition.

• Separate Offenses: Petron argued that the respondents' alleged crime of unfair competition committed in Makati City is independent and separate from that committed in Trece Martires City, Cavite, and that the Makati RTC has jurisdiction to hear the unfair competition case lodged with it notwithstanding the earlier case at the RTC, Trece Martires City.

• Multiple Offended Parties: Petron contended that there are several consumers who were deceived into believing that Petron is the source of Masagana's goods as a result of separate and distinct sales, hence each consumer is an offended party that can initiate separate and distinct complaints for the crime of unfair competition, and the liability cannot be limited to a single offense.

• Procedural Issue — Lack of OSG Representation: Respondents argued in their Comment that the instant petition for review, which ultimately seeks the reversal of the RTC's quashal of the Information in Criminal Case No. 11-529, should not be given due course as it was only filed by Petron, a mere private complainant, and not by the People as represented by the Solicitor General.

• Lack of Jurisdiction: Respondents maintained that the two separate Informations filed before the trial courts of Makati City and Trece Martires City for unfair competition under Section 168 in relation to Section 170 of RA 8293 contain the same set of facts, alleged identical acts, all producing one continuing offense, one single crime, which necessitate the filing of only one Information. Since the Information for unfair competition was filed first in Trece Martires City, that court had already acquired exclusive jurisdiction over the same to the exclusion of all others.

• Transitory or Continuing Crime: Respondents argued that the offense of unfair competition, being a transitory or continuing crime, barred the Makati RTC from prosecuting the case because a similar case had been earlier lodged before the TMC RTC which effectively excluded all other courts.

• Procedural Issue — Standing of Private Complainant: Whether the petition for review filed by Petron, a mere private complainant, without the intervention of the Office of the Solicitor General, should be given due course.

• Continuing Offense vs. Delito Continuado: Whether the crime of unfair competition is a continuing offense or a delito continuado such that the sales made in Cavite and Makati City constitute only one crime.

• Jurisdiction of the Makati RTC: Whether the CA correctly found no grave abuse of discretion committed by the Makati RTC in quashing the Information for the crime of unfair competition on the ground of lack of jurisdiction.

• Procedural Issue — Standing of Private Complainant: Yes, the petition was given due course. The OSG filed its Manifestation and Motion dated February 11, 2019 adopting the petition for review filed by Petron and stating that the People of the Philippines is joining the present petition as co-petitioner, which effectively gave its conformity to the filing of the petition.

• Continuing Offense vs. Delito Continuado: No. The crime of unfair competition is a continuing offense, not a delito continuado. The sales made in Cavite and Makati City cannot be considered as separate offenses of unfair competition as they merely constitute the ingredients of the crime.

• Jurisdiction of the Makati RTC: No. The Makati RTC correctly quashed the Information for lack of jurisdiction. Since the TMC RTC had earlier acquired jurisdiction over the case of unfair competition filed against respondents, the Makati RTC was divested of jurisdiction to entertain the case.

• Procedural Issue — Standing of Private Complainant: The Court addressed the procedural issue raised by respondents that the petition should not be given due course as it was only filed by Petron, a mere private complainant, and not by the People as represented by the Solicitor General. The Court cited People vs. Piccio for the settled rule that the authority to represent the State in appeals of criminal cases before the Court and the CA is vested solely in the OSG. The rationale is rooted in the principle that the party affected by the dismissal of the criminal action is the People and not the petitioners who are mere complaining witnesses. However, the OSG had filed its Manifestation and Motion dated February 11, 2019, adopting the petition for review filed by Petron and stating that the People of the Philippines is joining the present petition as co-petitioner. In effect, the OSG gave its conformity to the filing of the petition, thus curing the procedural defect.

• Continuing Offense vs. Delito Continuado: The Court held that unfair competition is characterized as a continuing offense because of the very nature of the crime. Section 168 of Republic Act No. 8293 describes the acts constituting the crime of unfair competition, which includes any person who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, which would be likely to influence purchasers to believe that the goods offered are those of another manufacturer or dealer. The main element of unfair competition is passing off, and one way of committing the crime is by sale. In this case, the Petron-owned gasul tanks were allegedly refilled by respondents at their Trece Martires City refilling plant and were sold therein, thus the crime of unfair competition was already consummated in Trece Martires City. However, respondents continued to pass off the Petron gasul tanks as their own by subsequently selling the same in Makati City, hence, there is a continuing violation of the law. The Court distinguished unfair competition from a delito continuado, citing Santiago vs. Hon. Justice Garchitorena, which defined delito continuado as requiring a plurality of acts performed during a period of time, unity of penal provision violated, and unity of criminal intent or purpose. The Court held that respondents did not commit on the same occasion several acts of passing off their gas tanks as that of Petron or other parties; rather, respondents only continued or repeated the alleged singular crime committed in Cavite and all the way up to Makati. Hence, unfair competition does not fall under the criterion of a delito continuado, and there are also no two separate crimes of unfair competition allegedly committed by respondents.

• Jurisdiction of the Makati RTC: The Court held that in transitory or continuing offenses in which some acts material and essential to the crime and requisite to its consummation occur in one province and some in another, the court of either province has jurisdiction to try the case. Both the RTC of Cavite and Makati City have jurisdiction to try the case for unfair competition filed against respondents. However, in cases of concurrent jurisdiction, the court first acquiring jurisdiction excludes the other courts. Since it is the RTC of Trece Martires City, Cavite which had earlier acquired jurisdiction over the case of unfair competition filed against respondents, the RTC of Makati City correctly quashed the Information filed with it for lack of jurisdiction.

• Multiple Offended Parties: The Court rejected Petron's contention that since several consumers had been deceived into believing that they were buying Petron-owned gasul tanks, they can initiate separate and distinct complaints for the crime of unfair competition. Citing US vs. Kyburz, the Court held that it is only the owners of the trademark who can file a case for unfair competition for deceptive trade practices. The rule which protects against unfair competition is primarily for the protection of the party against whom such competition is directed, and only incidentally for the protection of the public.

• Continuing Offense — A continuing offense is a crime which, although all the elements for its consummation may have occurred in a single place, by reason of the very nature of the offense committed, the violation of the law is deemed to be continuing. The Court applied this doctrine to unfair competition under Section 168 of R.A. No. 8293, holding that because the respondents continued to pass off Petron gasul tanks as their own by selling them in Makati City after the crime was consummated in Trece Martires City, there was a continuing violation of the law.

• Delito Continuado (Continued or Continuous Crime) — For a crime to be considered a delito continuado, there must be a plurality of acts committed by the actor against different parties on the same occasion with the same criminal intent or purpose of violating the same penal provision. A delito continuado is a continuous, unlawful act or series of acts set on foot by a single impulse and operated by an unintermittent force, however long a time it may occupy. The Court distinguished unfair competition from delito continuado, holding that respondents did not commit on the same occasion several acts of passing off their gas tanks as that of Petron or other parties; rather, they only continued or repeated the alleged singular crime committed in Cavite and all the way up to Makati.

• Transitory Offense and Territorial Jurisdiction — Under Section 15(a), Rule 110 of the 2000 Revised Rules of Criminal Procedure, the criminal action shall be instituted and tried in the court of the municipality or territory where the offense was committed or where any of its essential ingredients occurred. In transitory or continuing offenses where some acts material and essential to the crime occur in one province and some in another, the court of either province has jurisdiction to try the case. However, in cases of concurrent jurisdiction, the court first acquiring jurisdiction excludes the other courts.

• Passing Off (Palming Off) — Unfair competition is defined as the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. Passing off takes place where the defendant, by imitative devices on the general appearance of the goods, misleads prospective purchasers into buying his merchandise under the impression that they are buying that of his competitors. The main element of unfair competition is passing off, and one way of committing the crime is by sale.

• Standing of Private Complainant in Criminal Appeals — The authority to represent the State in appeals of criminal cases before the Court and the CA is vested solely in the OSG. The party affected by the dismissal of the criminal action is the People, not the petitioners who are mere complaining witnesses. The private complainant or the offended party may file an appeal without the intervention of the OSG only insofar as the civil liability of the accused is concerned, or may file a special civil action for certiorari only to the end of preserving his interest in the civil aspect of the case.

• "Unfair competition is characterized as a continuing offense because of the very nature of the crime." — This passage states the core ratio decidendi of the case, establishing that unfair competition under Section 168 of R.A. No. 8293 is a continuing offense by its very nature, which is the controlling doctrine for determining territorial jurisdiction.

• "The Petron owned gasul tanks were allegedly refilled by respondents at their Trece Martires City refilling plant and were sold therein. Thus, the crime of unfair competition was already consummated in Trece Martires City. However, respondents continued to pass off the Petron gasul tanks as their own by subsequently selling the same in Makati City, hence, there is a continuing violation of the law. Therefore, the sales made in Cavite and Makati City cannot be considered as separate offenses of unfair competition as they merely constitute the ingredients of the crime." — This passage applies the continuing offense doctrine to the facts of the case, explaining why the sales in different locations constitute one continuing crime rather than separate offenses.

• "Here, respondents did not commit on the same occasion several acts of passing off their gas tanks as that of Petron or other parties. Rather, respondents only continued or repeated the alleged singular crime committed in Cavite and all the way up to Makati. Hence, unfair competition does not fall under the criterion of a delito continuado." — This passage distinguishes unfair competition from delito continuado, clarifying that the concept of delito continuado requires plurality of acts committed on the same occasion against different parties, which was not present in this case.

• "It is only the owners of the trademark who can file a case for unfair competition for deceptive trade practices." — This passage, citing US v. Kyburz, establishes the rule that only trademark owners, not individual consumers, may file a case for unfair competition, rejecting Petron's argument that each deceived consumer could initiate separate complaints.

• People vs. Piccio, 740 Phil. 616 (2014) — Cited as controlling precedent for the rule that the authority to represent the State in appeals of criminal cases before the Court and the CA is vested solely in the OSG, and that the private complainant may only file an appeal without the OSG's intervention insofar as the civil liability of the accused is concerned.

• Sony Computer Entertainment, Inc. vs. Supergreen, Incorporated, 547 Phil. 639 (2007) — Cited as controlling precedent holding that the crime of unfair competition is a transitory or continuing offense, and that the act of imitation done in one place and the selling made in another are not considered separate offenses but constitute an ingredient thereof.

• Santiago vs. Hon. Justice Garchitorena, 298-A Phil. 164 (1993) — Cited for the definition and elements of delito continuado, including the requirement of plurality of acts performed during a period of time, unity of penal provision violated, and unity of criminal intent or purpose.

• US vs. Kyburz, 28 Phil. 475 (1914) — Cited for the rule that the protection against unfair competition is primarily for the protection of the party against whom such competition is directed, and only incidentally for the protection of the public, and that it is only the owners of the trademark who can file a case for unfair competition.

• Parulan vs. Director of Prisons, 130 Phil. 641 (1968) — Cited for the definition of transitory or continuing offenses and continued crimes.

• Superior Commercial Enterprises, Inc. vs. Kunnan Enterprises Ltd. et al., 632 Phil. 546 (2010) — Cited for the definition of unfair competition as the passing off or attempting to pass off upon the public of the goods or business of one person as the goods or business of another.

• Republic Gas Corp., et al. vs. Petron Corp., et al., 711 Phil. 348 (2013) — Cited for the definition of passing off or palming off.

• Lee vs. Presiding Judge, MTC Legaspi City, 229 Phil. 405 (1986) — Cited for the rule that in cases of concurrent jurisdiction, the court first acquiring jurisdiction excludes the other courts.

• People vs. de Leon, 608 Phil. 701 (2009) — Cited for the definition of delito continuado as a continuous, unlawful act or series of acts set on foot by a single impulse and operated by an unintermittent force.

• Section 168, Republic Act No. 8293 (Intellectual Property Code of the Philippines) — Defines unfair competition, including the acts constituting the crime, such as employing deception or any other means contrary to good faith to pass off goods manufactured by one person for those of another having established goodwill, and selling goods with the general appearance of goods of another manufacturer or dealer. The Court applied this provision to determine that the main element of unfair competition is passing off, and one way of committing the crime is by sale.

• Section 170, Republic Act No. 8293 (Intellectual Property Code of the Philippines) — The penal provision in relation to which the Informations for unfair competition were filed against respondents.

• Section 155, Republic Act No. 8293 (Intellectual Property Code of the Philippines) — The provision cited in the application for Search Warrants against respondents for violations of intellectual property rights.

• Section 15(a), Rule 110, 2000 Revised Rules of Criminal Procedure — Provides that the criminal action shall be instituted and tried in the court of the municipality or territory where the offense was committed or where any of its essential ingredients occurred. The Court applied this provision to determine territorial jurisdiction in transitory or continuing offenses.

• Section 35(1), Chapter 12, Title III, Book IV, 1987 Administrative Code — Provides that the Office of the Solicitor General shall represent the Government in the Supreme Court and the Court of Appeals in all criminal proceedings. The Court applied this provision to address the procedural issue of whether Petron, a mere private complainant, could file the petition without the OSG's representation.

Caguioa, Carandang, Zalameda, and Gaerlan, JJ., concurred.

N/A — No dissenting opinions were noted in the provided case text.