November 10, 2019

Juul Corporation
Malate St., Manila

To whom it may concern:

This legal opinion seeks to answer your question as to whether or not

the acts made by your corporation are valid and can be prosecuted in court.

The Facts
Per our discussion and the documents you have shown me, the
following are the pertinent facts:
Juul is a corporation which established itself in the Philippine market
in 2015. They do not maintain office in the Philippines instead they only sell
their products in the Philippine market. While, Juul-A, a corporation, not
known whether it is domestic or foreign, also sells the same products as that
of Juul Corporation – tobaccos and e-cigarettes.
Juul Corporation claims that Juul-A is practicing unfair competition and
are infringing on its intellectual property rights. It is to be noted that Juul
products are not registered trademark of the corporation or its name, Juul,
was not even registered with the Intellectual Property Office of the
Philippines.
Consequently, Juul corporation applied for a general search warrant in
order to raid Juul-A’s warehouse in Mendiola, Manila. Said warrant was
implemented by the police authorities by searching said warehouse, hence,
police authorities were able to seize the unmarked plain boxes from Juul-A’s
warehouse. They opened it and saw Juul-A products that are almost identical
to that of Juul products. These products were seized and turned over to the
police station. They also arrested the persons manning the warehouse.
On the basis of a general search warrant, Juul Corporation filed a
complaint against the persons who were found manning the warehouse and
opined that Juul-A products are counterfeits of the Juul products.

The Applicable Laws

The applicable law is Section 4 Rule 126 of the Revised Rules of Court
with regard to Searches and Seizure, to wit:
Section 4. Requisites for issuing search warrant. – A
search warrant shall not issue except upon probable cause in
connection with one specific offense to be determined
personally by the judge after examination under oath or
 affirmation of the complainant and the witnesses that he may
produce, and particularly describing the place to be searched
and the things to be seized which may be anywhere in the
Philippines.

In relation to Section 2, Article III of the 1987 Constitution

Section 2. The right od people to be secure in their
persons, houses, papers, and effects against unreasonable
searches and seizures of whatever nature and for nay purpose
shall be inviolable, and no search warrant or warrant of arrest
shall issue except upon probable cause to be determined
personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched
and the persons or things to be seized.

Furthermore, the governing law of the issue in the instant case is

Infringement under Section 155 in relation to Section 170 of the IP Code and
False Designation of Origin under Section 169 in relation to Section 170 of
the IP Code to wit:
SECTION 155. Remedies; Infringement. - Any person who shall,
without the consent of the owner of the registered mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark or the same container
or a dominant feature thereof in connection with the sale,
offering for sale, distribution, advertising of any goods or
services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with
which such use is likely to cause confusion, or to cause mistake,
or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a
registered mark or a dominant feature thereof and apply such
reproduction, counterfeit, copy or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in connection with the
sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive, shall be liable
in a civil action for infringement by the registrant for the
remedies hereinafter set forth: Provided, That the infringement
takes place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of whether
there is actual sale of goods or services using the infringing
material.
SECTION 169. False Designations of Origin; False Description or
Representation. — 169.1. Any person who, on or in connection
with any goods or services, or any container for goods, uses in
commerce any word, term, name, symbol, or device, or any
combination thereof, or any false designation of origin, false or
misleading description of fact, or false or misleading
representation of fact, which:
(a) Is likely to cause confusion, or to cause mistake, or to deceive
as to the affiliation, connection, or association of such person
 with another person, or as to the origin, sponsorship, or
approval of his or her goods, services, or commercial activities
by another person; or
(b) In commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or
her or another person’s goods, services, or commercial activities,
shall be liable to a civil action for damages and injunction
provided in Sections 156 and 157 of this Act by any person who
believes that he or she is or is likely to be damaged by such act.
169.2. Any goods marked or labelled in contravention of the
provisions of this Section shall not be imported into the
Philippines or admitted entry at any customhouse of the
Philippines. The owner, importer, or consignee of goods refused
entry at any customhouse under this section may have any
recourse under the customs revenue laws or may have the
remedy given by this Act in cases involving goods refused entry
or seized. (Sec. 30, R.A. No. 166a)
SECTION 170. Penalties. - Independent of the civil and
administrative sanctions imposed by law, a criminal penalty of
imprisonment from two (2) years to five (5) years and a fine
ranging from Fifty thousand pesos (P50,000) to Two hundred
thousand pesos (P200,000), shall be imposed on any person
who is found guilty of committing any of the acts mentioned in
Section 155, Section 168 and Subsection 169.1. (Arts. 188 and
189, Revised Penal Code)

The Applicable Jurisprudences

The actuations of Juul Corporation can be substantiated by the facts of

the instant case supported by the cases of Forietrans Manufacturing Corp
vs Davidoff Et. Cie SA, GR No. 197482 (2017) and Unilever Philippines vs
Michael Tan, GR No. 179367 (2014). Although the arguments were defined,
a primary possible issue that can be used by the prosecution that may be
asserted is that Juul-A Corporation had violated several provisions of the
Intellectual Property Code and also enshrined and discussed in the case of
Skechers USA Inc. vs Inter Pacific Industrial Trading Corp, GR No. 164321
(2011).
Juul Corporation’s application for general search warrant for
Juul-A’s warehouse is valid hence, there is a probable cause to file for a
criminal complaint against Juul-A.
Probable cause, for filing a criminal action, is defined as such facts as
are sufficient to engender a well-founded belief that the crime has been
committed and that respondent is probably guilty thereof.1 It does not
require an inquiry into whether there is sufficient evidence to procure

1Sy v. Secretary of Justice, G.R. No. 166315, December 14, 2006, S 11 SCRA 92, 96, citing Sarigumba v.
Sandiganbayan, G.R. Nos. 154239-41, February 16, 2005, 451 SCRA 533, 550.
conviction. Only prima facie evidence is required which, if not rebutted or
contradicted, will suffice.2
The task of determining probable cause is lodged with the public
prosecutor and ultimately, the Secretary of Justice. Under the doctrine of
separation of powers, courts have no right to directly decide matters over
which full discretionary authority has been delegated to the Executive
Branch of the Government. Thus, we have generally adopted a policy of non-
interference with the executive determination of probable cause.3
In this case, it is clear that the confiscated plain boxes containing the
same products to that of Juul were that of Juul-A’s even if no officer of Juul-A
corporation is present in the warehouse. Hence, the search and seizure of the
said plain boxes are valid under the law and that there was no violation as to
the grant of a general search warrant. The right against unreasonable search
and seizure is a core right implicit in the natural right to life, liberty and
property. Even in the absence of a Constitution individuals have a
fundamental and natural right against searches and seizure under our law.
Moreover, the violation of the right to privacy produces humiliating effect
that cannot be rectified anymore once it is done.

A prima facie case for trademark infringement and false

designation of origin exists against Juul-A.
The essential element of infringement is that the infringing mark is
likely to cause confusion.4 In determining similarity and likelihood of
confusion, jurisprudence has developed tests – the Dominancy Test and the
Holistic or Totality Test. The Dominancy Test focuses on the similarity of the
prevalent or dominant features of the competing trademarks that might
cause confusion, mistake, and deception in the mind of the purchasing public.
Duplication or imitation is not necessary; neither is it required that the mark
sought to be registered suggests an effort to imitate. Given more
consideration are the aural and visual impressions created by the marks on
the buyers of goods, giving little weight to factors like prices, quality, sales
outlets, and market segments.5

In contrast, the Holistic or Totality Test necessitates a consideration of

the entirety of the marks as applied to the products, including the labels and
packaging, in determining confusing similarity. The discerning eye of the
observer must focus not only on the predominant words, but also on the
other features appearing on both labels so that the observer may draw
conclusion on whether one is confusingly similar to the other.6

2 Miller v. Perez, G.R. No. 165412, May 30, 2011, 649 SCRA 158, 180.
3 Metropolitan Bank & Trust Co. (Metrobank) v. Tobias lll, G.R. No. 177780, January 25, 2012, 664 SCRA 165,
176-177.
4 Skechers, US.A., Inc. v. Inter Pacific Industrial Trading Corp., G.R. No. 164321, March 28, 2011, 646 SCRA

448, 455.
5 McDonald’s Corporation v. MacJoy Fastfood Corporation, G.R. No. 166115, February 2, 2007, 514 SCRA

95, 106; McDonald’s Corporation v. L.C. Big Mak Burger, Inc., 480 Phil. 402, 434 (2004).
6 Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R. No. 158589, June 27, 2006, 493 SCRA 333, 357.
 Relative to the question on confusion of marks and trade names,
jurisprudence has noted two (2) types of confusion, viz.: (1) confusion of
goods (product confusion), where the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he was purchasing the
other; and (2) confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product, the mark of which
registration is applied for by one party, is such as might reasonably be
assumed to originate with the registrant of an earlier product, and the public
would then be deceived either into that belief or into the belief that there is
some connection between the two parties, though inexistent.7

In this case, the complaint-affidavit for the Juul infringement case

alleged confusing similarity between the e-cigarette and tobaccos of Juul and
the one seized in the warehouse of Juul-A. parties submitted samples of the
said objects during the said investigation.

While we agree that no confusion is created insofar as the names “Juul”

and "Juul-A" are concerned, we cannot say the same with respect to the e-
cigarettes' packaging. Indeed, there might be differences when the two are
compared. We have, in previous cases, noted that defendants in cases of
infringement do not normally copy but only make colorable changes. The
most successful form of copying is to employ enough points of similarity to
confuse the public, with enough points of difference to confuse the courts.
Juul alleged in their Complaint-Affidavit that Juul-A illegally manufactured
and/or stored e-cigarettes bearing the "Juul" label with an indication that
these e-cigarettes were made in USA even if they were actually processed,
manufactured and packed in the premises of Juul-A in Mendiola, Manila. To
support their claim, Juul submitted samples and attached a copy of the
receipt/inventory of the items seized during the October 2019 raid. These
included e-cigarettes bearing the infringing Juul trademark and various
machineries, receptacles, boxes and other paraphernalia used in the
manufacturing and packing of the infringing products. To our mind, however,
these circumstances are enough to excite the belief that indeed Juul-A were
manufacturing cigarettes in their warehouse here in the Philippines but
misrepresenting the cigarettes' origin to be Germany. In fine, there is a
compelling reason to believe that there is indeed a probable cause against
Juul-A for trademark infringement and false designation of origin.

Recommendation
In view of the foregoing, it is my humble opinion that Juul-A
Corporation be brought to court for the alleged violations of the Intellectual
Property Code of the Philippines in relation to infringement rights, false
designation of origin and unfair competition. However, it must establish that
the general search warrant obtained included the seizing of the unmarked
boxes found in the warehouse.

7McDonald’s Corporation v. L.C. Big Mak Burger, Inc., supra note 16, at 428, citing Sterling Products
International, Incorporated v. Farbenfabriken Bayer Aktiengesellschaft, et al., 137 Phil. 838, 852 (1969).
 Furthermore, a suit against the people manning the corporation
warehouse should be quashed on the basis of Section 3(a) of Rule 117 of the
Revised Rules of Court, to wit:
Section 3. Grounds. – The accused may move to quash the
information or complaint on any of the following grounds:
a. That the facts charged do not constitute an offense

These people are not privy nor they are persons-in-interest in the case
you are trying to pursue. Hence, they cannot represent the Juul-a corporation.
I am confident that said interpretation would prevail in court because to rule
otherwise would be to sanction injustice and absurdity.
I appreciate the opportunity to advise you regarding this matter. Please
let me know if you wish to discuss any of these issues further. Thank you!

Regards,

Zahreena Mae I. Molina

Legal Counsel