Courts issue arrest warrants for energy drink Thai owners

MANILA, Philippines – The regional and municipal trial courts of Legazpi City have recently issued warrants of arrest against the Thai owners and officers of Red Bull energy drink and its local distributor for violation of the Intellectual Property Code and the Food, Drug and Cosmetic Act.

The Legazpi City Regional Trial Court (RTC) Branch 5 and the Municipal Trial Court (MTC) Branch 3, also of Legazpi, both sustained the earlier resolution issued by Department of Justice (DOJ) Undersecretary Jose Vicente Salazar finding probable cause to charge the owners and officers of T. C. Pharmaceutical Industries Co., Ltd. (TCP), Thai manufacturer of Red Bull, and of its local distributor Maryland Distributors, Inc. (MDI).

Charges of violation of RA 8293 or the Intellectual Property Code for unfair competition was filed with the Legazpi RTC Branch 5 while separate charges of violation of RA 3720 otherwise known as the Food, Drug and Cosmetic Act for product misbranding were filed with the Legazpi MTC Branch 3.

The arrest warrants were issued against Pavana Langthara, Suthirat Yoovidhya, Supreeya Yoovidhya, Nucharee Yoovidhya, and Visuit Chiemkitchavarote as owners and officers of TCP that owns the Red Bull brand, as well as the officers of local distributor MDI identified as Gino Baltao, Gina Tolentino, Ramoncito Abad, Benjamin Ros, and Nelson Escobar.

The case stemmed from the criminal complaint filed by Energy Food and Drinks Inc. (EFDI), the appointed local exclusive distributor of Red Bull energy drink products since March 1993 and holder of a certificate of product registration for the said products with the Food and Drugs Administration.

In an order dated Aug. 28, 2012, MTC Judge Jose Noel Rubio ruled that “after a personal evaluation of the questioned resolution and the evidence on record, this court finds no cogent reason to disturb the findings of the DOJ and therefore sustains its finding of probable cause in this case.”

Copies of the said RTC and MTC orders were also sent to the media.

RTC Judge Pedro Soriao also agreed with the pronouncement of the DOJ that “the issues raised in the motion are purely evidentiary best presented at the trial.”

Soriao, on the other hand, took judicial notice of the fact of the deliberate tampering by the accused of EFDI’s label, which undermined its property rights.

“It appears that the Red Bull products in dispute have had labels with original printed annotation reading: Manufactured by T.C. Pharmaceutical Ind. Co. Ltd., Bangkok, Thailand. Exclusively Distributed by Energy Food & Drinks Inc., Antipolo City, Philippines,” which annotation appears to have been effaced by superimposed stickers reading: “Manufactured by T.C. Pharmaceutical Ind. Co. Ltd., Bangkok, Thailand. Authorized Philippine Importer: Maryland Distributors Inc., Taytay Rizal, Philippines,” the court said.

The RTC judge agreed with the DOJ findings that there is unfair competition to EFDI’s rights as the exclusive distributor of Red Bull products in the Philippines when it said that, “considering that the intent to defraud or deceive the public in unfair competition case is presumed under the law, the evidence on record appears to sustain the finding of probable cause by the Undersecretary.”

EFDI discovered the proliferation in the market of Red Bull products with “Maryland” stickers superimposed on the portion of the label that supposedly identified EFDI as the products’ exclusive distributor. This was confirmed through test buys conducted in various parts of the country.

DOJ Usec. Salazar, acting on the petition filed by EFDI, issued a resolution last June 21, 2012 recommending the filing of charges against all the accused after finding probable cause.

“Since complainant EFDI was the exclusive distributor, its name must be indicated in the label of Red Bull products. In the instant case, however, the bottles of Red Bull bore tampered stickers/labels which indicated the following: ‘Manufactured by: T.C. Pharmaceutical Ind. Co., Ltd. Bangkok, Thailand Authorized Philippine Importer Maryland Distributors, Inc., Taytay, Rizal, Philippines’,” said the DOJ.

The DOJ found that the named accused acted in conspiracy with one another in committing acts of unfair competition against EFDI.

“In the instant case, complainant was able to adduce sufficient evidence that respondents, in conspiracy with one another, engaged in unfair competition. The importation of Red Bull products, the tampering of the product label and the proliferation thereof in the market constitute ‘underground sales and marketing’ of Red Bull products, which undermined the property rights of herein complainant EFDI,” the DOJ said.

In the same resolution, the DOJ directed the Legazpi City prosecutor’s office to file two separate information for violation of Section 11(g) and 15 (a) of RA 3720 as well as for violation of Section 168 in relation to Section 170 of RA 8293 against the accused officers.

The information for violation of RA 3720 was filed with the Legazpi City MTC and was raffled to MTC Branch 3.

On the other hand, the information for the crime of unfair competition under RA 8293 was raffled to RTC of Legazpi Branch 5.

The said accused filed their respective Motions for Judicial Determination of Probable Cause with prayer to suspend the proceedings before both courts, praying for the courts to revisit and overrule the DOJ finding of probable cause against them and to hold in abeyance the issuance of warrants of arrest.

In their independent appreciation of the facts, both courts agreed with the resolution issued by the DOJ and dismissed the motions of the accused.