SC affirms decision voiding search warrant on Pepsi plant yard

The Supreme Court (SC) has affirmed the decision of the Naga City regional trial court (RTC) that the search warrant issued on the petition by the Coca Cola’s Naga plant on the plant yard of its rival Pepsi Cola was void for lacking probable cause.

In a 17-page decision penned by Associate Justice Arturo Brion, the SC’s Second Division denied the petition filed by the Naga plant of Coca Cola Bottlers Phils. Inc., which argued that the RTC should have dismissed Pepsi Cola’s petition for certiorari, as it found no grave abuse of discretion on the part of the Naga municipal trial court (MTC) in issuing the search warrant.

Named as respondents in the petition were Pepsi Cola regional sales manager Danilo Galicia and general manager Quintin Gomez.

In its resolution, the SC ruled that the hoarding of a competitor’s product containers is not punishable as unfair competition under the Intellectual Property Code.

Records show that on July 2, 2001, Coca Cola Naga applied for a search warrant against Pepsi for allegedly hoarding empty Coke bottles in its yard in Concepcion Grande, Naga City.

Coca Cola said the act is penalized under the IP Code, adding that the bottles must be confiscated to preclude their illegal use, destruction or concealment by the respondents.

MTC Judge Julian Ocampo later issued the search warrant which was used in the seizure of 2,500 Litro and 3,000 eight- and 12-ounce empty Coke bottles at Pepsi’s Naga yard for alleged violation of Section 168.3 of the IP Code.

The seized items, along with 168 empty Pepsi cases, were brought to the court’s custody while charges were filed against Gomez and Galicia for alleged violation of the IP Code.

In their defense, the respondents said the Coke bottles came from various Pepsi retailers and wholesalers who included them to make up for shortages of empty Pepsi bottles.

They added that they had no way of determining how to return the empty Coke bottles and that their presence in the yard was not intentional.

As such, the respondents asked the court to quash the search warrant and filed motions for the return of the seized Pepsi cases.

Coca Cola opposed the motions as the cases were part of the evidence and alleged that Pepsi used the cases in hoarding the Coke bottles.

It also insisted that the issuance of the search warrant was based on probable cause for unfair competition under the IP Code.

The SC, however, said hoarding, as defined by Coca Cola, is “not even an act within the contemplation of the IP Code.”

“We clarify at the outset that while we agree with the RTC decision, our agreement is more in the result than in the reasons that supported it. The decision is corrected in nullifying the search warrant because it was issued in an invalid substantive basis – the acts imputed on the respondents do not violate Section 168.3 of the IP Code. For this reason, we deny the present petition,” the SC ruled.