CHAPTER THREE: FRAUDS
means of threats, gifts, promises or any other artifice with intent that the thing
Section One – Machinations, monopolies, and combinations
ARTICLE 185: Machinations in public auctions
ACTS PUNISHABLE UNDER ARTICLE 185
1. By soliciting any gift or promise as a consideration for refraining from
taking part in any public auction
2. By attempting to cause bidders to stay away from an auction by threats,
gifts, promises or any other artifice
ELEMENTS OF SOLICITING GIFT OR PROMISE:
1. Public auction
2. The accused solicited any gift from any of the bidders
3. That such gift or promise was the consideration for his refraining from
taking part in that public auction
4. That the accused had the intent to cause the reduction of the price of the
thing auctioned
CONSUMMATED BY MERE SOLICITATION
It is not required that the person making the proposal actually refrains from taking
part in any public auction.
It is consummated by mere solicitation of gift or promise as consideration for not
bidding.
If the person to whom the solicitation is made agrees to pay or gives the gift or
makes a promise, then he will be a principal in the crime. His act will be similar to
the second way of committing the crime.
ELEMENTS OF ATTEMPTING TO CAUSE BIDDERS TO STAY AWAY:
1. Public auction
2. The accused attempted to cause the bidders to stay away from that public
auction
3. It was done by threats, gifts, promises or any other artifice
4. The accused had the intent to cause the reduction of the price of the thing
auctioned
“OTHER ARTIFICE”
Thus, the bidders may be caused to stay away from public auction by tricks, such as
by telling them that the public bidding would not be held at that time to make them
go away, knowing that the bidding would not be postponed.
MERE ATTEMPT CONSUMMATES THE CRIME
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Likewise, an attempt to cause prospective bidders to stay away from an auction by
auctioned should command a lesser price, is sufficient to constitute an offense.
The threat need not be effective nor the offer or gift accepted for the crime to arise.
ARTICLE 186: Monopolies and combinations in restraint of trade
ACTS PUNISHED AS MONOPOLIES AND COMBINATIONS IN RESTRAINT
OF TRADE
(a) Combination to prevent free competition in the market
- By entering into any contract or agreement or taking part in any
conspiracy or combination in the form of a trust or otherwise, in
restraint of trade or commerce or to prevent by artificial means free
competition in the market
(b) Monopoly to restrain free competition in the market
- By monopolizing any merchandise or object of trade or commerce,
or by combining with any other person or persons to monopolize said
merchandise or object in order to alter the prices thereof by spreading
false rumors or making use of any other artifice to restrain free
competition in the market
(c) Manufacturer, producer, or processor or importer combining, conspiring
or agreeing with any person to make transactions prejudicial to lawful
commerce or to increase the market price of merchandise
The person liable is the:
1. Manufacturer
2. Producer
3. Processor
4. Importer of any merchandise or object of commerce
The crime is committed by:
1. Combining
2. Conspiring
3. Agreeing with any person
The purpose is:
1. To make transactions prejudicial to lawful commerce
2. To increase the market price of any merchandise or object of
commerce manufactured, produced, processed, assembled or
imported into the Philippines
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EXAMPLE OF SPREADING FALSE RUMORS TO RESTRAIN FREE
COMPETITION
A person went about disturbing papers and proclamations to the people of a certain
town spreading subversive and fanatic ideas that unless they lower the prices of
needful commodities they would be visited by flood and other calamities. The
people were thereby caused to lower the prices of commodities and to provide
themselves with instruments of measure larger than the regular size.
PROPERTY IS FORFEITED TO THE GOVERNMENT
Any property possessed under any contract or combination contemplated in this
article, shall be forfeited to the Government.
MERE CONSPIRACY OR COMBINATION IS PUNISHED
The law intends to punish the mere conspiracy or combination at which it is aimed.
IF THE OFFENSE AFFECTS ANY FOOD SUBSTANCE OR OTHER ARTICLE
OF PRIME NECESSITY, IT IS SUFFICIENT THAT INITIAL STEPS ARE
TAKEN
If the monopolies and combinations in restraint of trade affect any food substance,
motor fuel or lubricants or other article of prime necessity, it is sufficient for the
imposition of a higher penalty that the initial steps have been taken toward carrying
out the purposes of combination.
WHEN OFENSE IS COMMITTED BY A CORPORATON OR ASSOCIATION,
THE PRESIDENT AND DIRECTORS OR MANAGERS ARE LIABLE
Who knowingly permitted or failed to prevent the commission of such offenses,
shall be held liable as principals thereof.
By express provision of Article 186, the president and each one of the directors or
managers of the corporation or association shall be held as principals of the crime of
monopolies and combinations in restraint of trade.
But they are liable only when they:
1. Knowingly permitted
2. Failed to prevent the commission of such offenses
ILLEGAL ACTS OF PRICE MANIPULATION
RA 7581 or “the Price Act” declares it unlawful for any person habitually engaged
in the production, manufacture, importation, storage, transport, distribution, sale or
other methods of disposition of goods to engage in the following acts of price
manipulation of the price of any basic necessity or prime commodity:
(1) Hoarding
- The undue accumulation by a person or combination of persons of
any basic commodity beyond his or their normal inventory
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(2) Profiteering
- The sale or offering for sale of any basic necessity or prime
commodity at a price grossly in excess of its true worth
(3) Cartel
- Any combination of or agreement between two or more persons
engaged in the production, manufacture, processing, storage, supply
of any basic necessity or prime commodity designed to artificially
and unreasonable increase or manipulate its price
Section Two – Frauds in commerce and industry
ARTICLE 187: Importation and disposition of falsely marked articles or
merchandise made of gold, silver, or other precious metals or their alloy
ARTICLES OR MERCHANDISE INVOLVED
a. Gold
b. Silver
c. Other precious metals
d. Alloys
ELEMENTS:
1. That the offender imports, sells or disposes of any of those articles or
merchandise
2. That the stamps, brands, or marks of those articles of merchandise fail to
indicate the actual fineness or quality of said metals or alloys
3. That the offender knows that the stamps, brands, or marks fail to indicate
the actual fineness or quality of the metals or alloys
SELLING THE MISBRANDED ARTICLES IS NOT NECESSARY
It is not necessary that they be sold and the public be actually deceived. But there
must be evidence showing that the articles were imported.
ARTICLE 187 DOES NOT APPLY TO MANUFACTURER OF MISBRANDED
ARTICLES MADE OF GOLD, SILVER, ETC
The manufacturer who alters the quality or fineness of anything pertaining to his art
or business is liable for estafa.
RA 8293 (Intellectual Property Code of the PH) repealed the provisions of Articles
188 and 189 which are inconsistent.
ARTICLE 188: Substituting and altering trademarks, trade names, or service
marks
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ACTS PUNISHABLE UNDER ARTICLE 188:
1. By:
a. Substituting the trade name or trademark of some other manufacturer
or dealer, or a colourable imitation thereof, for the trade name or
trademark of the real manufacturer
b. Selling the same
2. By selling or by offering for sale such articles of commerce, knowing that
the trade name or trademark has been fraudulently used
3. By using or substituting the service mark of some other persons, or a
colourable imitation of such mark, in the sale or advertising of his services
4. By printing, lithographing or reproducing trade name
ARTICLE 189: Unfair competition, fraudulent registration of trade name,
trademark, or service mark, fraudulent designation of origin, and false
description
ACTS PUNISHED UNDER ARTICLE 189:
1. By selling his goods, giving them the general appearance of the goods of
another manufacturer or dealer (unfair competition)
2. By:
a. Affixing to his goods or using in connection with his services a false
designation of origin, or any false description or representation
b. Selling such goods or services (Fraudulent designation of origin;
False description)
3. By procuring fraudulently from the patent office the registration of trade
name, trademark or service mark (Fraudulent registration)
REPUBLIC ACT NO. 8293 (INTELLECTUAL PROPERTY CODE OF THE
PHILIPPINES)
INFRINGEMENT
WHO IS LIABLE FOR INFRINGEMENT?
Infringement:
- Committed by any person who shall, without the consent of the
owner of the registered mark:
1. Use in commerce any reproduction, counterfeit, copy or colourable
imitation of a registered mark or the same container or a dominant feature
thereof in connection with the sale
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2. Reproduce, counterfeit, copy or colourable imitate a registered mark or a
dominant feature thereof and apply such reproduction, counterfeit, copy or
colourable imitation
Mark:
- Any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped
or marked container
Tradename:
- The name or designation identifying or distinguishing an enterprise
One of the distinguishing characteristics of a trade name is that, unlike trademarks, it
is not necessarily attached or affixed to the goods of the owner.
OFFICE OR FUNCTION OF TRADEMARK
The office or function of a trademark is not to name or describe the quality of the
goods to which it is attached but instead, it is to indicate the origin or ownership of
the goods to which it is fixed. It is to distinguish the goods of one person from those
of another, and to prevent one person from passing off his goods or his business as
the goods or business of another.
THE OBJECTS OF A TRADEMARK
The objects of a trademark are to point out distinctly the origin or ownership of the
article to which it is affixed, to secure him, who has been instrumental in bringing
into market a superior article of merchandise, the fruit of his industry and skill, and
to prevent fraud and imposition.
ELEMENTS OF TRADEMARK INFRINGEMENT:
1. Validity of plaintiff’s mark
2. Plaintiff’s ownership of the mark
3. The use of the mark or its colourable imitation by the alleged infringer
results in “likelihood of confusion”
Of these, it is the element of likelihood of confusion that is the gravamen of
trademark infringement.
FIRST ELEMENT: THE VALIDITY OF THE PLAINTIFF’S MARK
TRADEMARK MUST NOT BE MERELY DESCRIPTIVE OR GENERIC
The Intellectual Property Code of the PH provides that a mark which “consists
exclusively of signs that are generic for the goods or services they seek to identify”
is not registrable.
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Generic terms:
- Those which constitute “the common descriptive name of an article
or substance,” or comprise the “genus of which the particular product
is a species,” or are “commonly used as the name or description of a
kind of goods,”
Thus, the word “bubble gum” cannot be considered as a trademark, because the
words are merely descriptive and generic, designating the article made of sweetened
gum which, if chewed and blown off mouth, produces a bubble.
The IPC of the PH provides that marks that “consists exclusively of signs or any
indication that may serve in trade to designate the kind, quality, quantity, intended
purpose, value, geographical origin, time or production of the goods or rendering of
the services or other characteristics of the goods or services” are not registrable.
Mere geographical names, like “Wellington” which is the capital of New Zealand,
are ordinarily regarded as common property, and it is a general rule that same cannot
be appropriated as the subject of an exclusive trademark or tradename.
TRADEMARK WHICH LOSES ITS DISTINCTIVENESS OR HAS BECOME
“PUBLICI JURIS”
The exclusive right to an originally valid trademark or tradename is lost, if for any
reason it loses its distinctiveness or has become “publici juris.”
SECOND ELEMENT: THE PLAINTIFF’S OWNERSHIP OF THE MARK
THE TRADENAME OR TRADEMARK MUST BE REGISTERED
The trademark must be registered in the Intellectual Property Office of the PH. A
certificate of registration of a mark shall be prima facie evidence of the validity of
the registration, the registrant’s ownership of the mark, and of the registrant’s
exclusive right to use the same in connection with the goods or services and those
that are related thereto specified in the certificate.
THIRD ELEMENT: THE USE OF THE MARK OR ITS COLORABLE
IMITATION BY THE ALLEGED INFRINGER RESULTS IN LIKELIHOOD
OF CONFUSION
“OR A COLORABLE IMITATION THEREOF”
The trademark used by the offender need not be identical with the infringed
trademark. A colourable imitation is sufficient.
Colorable imitation denotes such a close or ingenious imitation as to be calculated to
deceive ordinary persons, or such a resemblance to the original as to deceive an
ordinary purchaser giving such attention as a purchaser usually gives, as to cause
him to purchase the one supposing it to be the other.
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TESTS IN DETERMINING CONFUSINF SIMILARITY
1. The Dominancy Test
- Focuses on the similarity of the prevalent features of the competing
trademarks which might cause confusion or deception, and thus
infringement
If the competing trademark contains the main, essential or dominant
features of another, and confusion or deception is likely to result,
infringement takes place. Duplication or imitation is not necessary;
not it is necessary that the infringing label should suggest an effort to
imitate.
2. The Holistic Test
- Requires that the entirety of the marks in question be considered in
resolving confusing similarity. Comparison of words is not the only
determining factor.
The trademarks in their entirety as they appear in their respective
labels or hang tags must also be considered in relation to the goods to
which they are attached.
DOMINANCY TEST, TO DETERMINE QUESTION OF INFRINGEMENT
The SC has relied on the dominancy test rather than the holistic test. The
Dominancy Test considers the dominant features in the competing marls in
determining whether they are confusingly similar. Under the dominancy test, courts
give greater weight to the similarity of the appearance of the product arising from
the adoption of the dominant features of the registered mark, disregarding minor
differences.
o There must not be differences which are glaring and striking to the eye
TYPES OF CONFUSION ARISING FROM THE USE OF SIMILAR OR
COLORABLE IMITATION MARKS
1. Confusion of goods (product confusion)
- When the products are competing
2. Confusion of business (source or origin confusion)
- Exists when the products are non-competing but related enough to
produce confusion of affiliation
CONCEPT OF RELATED GOODS
When goods are so related that the public may be, or is actually, deceived and
misled that they come from the same marker or manufacturer, trademark
infringement occurs.
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Non-competing goods may be those which, though they are not in actual limited class of purchasers could avoid mistake by the exercise of this special
competition, are so related to each other that it can reasonably be assumed that they knowledge.
originate from one manufacturer, in which case, confusion of business can arise out
of the use of similar marks. TRADEMARK INFRINGEMENT, DISTINGUISHED FROM UNFAIR
COMPETITION
PRODUCT CLASSIFICATION, NOT DECISIVE FACTOR IN THE
DETERMINATION OF WHETHER GOODS ARE RELATED Trademark infringement Unfair competition
Product classification alone cannot serve as the decisive factor in the resolution Limited range Broader and more inclusive
whether wines and cigarettes are related goods. Emphasis should be on the similarity The offended party has identified a The offended party has identified in the
of the products involved and not on the arbitrary classification or general description peculiar symbol or mark with his goods mind of the public the goods he
of their properties or characteristics. and thereby has acquired a property manufactures or deals in from those of
right in such symbol or mark others, whether or not a mark or trade
UNFAIR COMPETITION name is employed, and has a property
right in the goodwill of the said goods
WHO HAS THE RIGHT TO BE PROTECTED AGAINST UNFAIR The offender uses the trademark or trade The offender gives his goods the general
COMPETITION? name of another manufacturer or dealer appearance of the goods of another
Any person who has identified in the mind of the public the goods he manufactures and sells his goods on which the manufacturer or dealer and sells the
or deals in, his business or services from those of others, whether or not a registered trademark is affixed same
mark is employed, has a property right in the goodwill of the said goods, business or The unauthorized use of a trademark The passing off of one’s goods as those
service so identified, which will be protected in the same manner as other property of another
rights. Fraudulent intent is unnecessary Fraudulent intent is essential
The prior registration of the trademark is Registration is not necessary
WHO IS LIABLE FOR UNFAIR COMPETITION? a prerequisite to the action
Any person who shall employ deception or any other means contrary to good faith
by which he shall pass off the gods manufactured by him or in which he deals, or his WHEN TRADEMARK INFRINGEMENT CONSTITUTES UNFAIR
business, or services for those of the one having established such goodwill, or who COMPETITION
shall commit any acts calculated to produce said result, shall be guilty of unfair Trademark infringement constitutes unfair competition when there is not merely
competition. likelihood of confusion, but also actual or probable deception on the public because
of the general appearance of the goods.
UNFAIR COMPETITION, DEFINED
 Consists in employing deception or any other means contrary to good faith THERE CAN BE TRADEMARK INFRINGEMENT WITHOUT UNFAIR
by which he shall pass off the goods manufactured by him or in which he COMPETITION
deals, or his business, or services for those of the one having established As when the infringer discloses on the labels containing the mark that he
such goodwill, or who shall commit any acts calculated to produce said manufactures the goods, thus preventing the public from being deceived that the
results. goods originate from the trademark owner.
ELEMENTS OF UNFAIR COMPETITION:
1. Confusing similarity in the general appearance of the goods
2. Intent to deceive the public and defraud a competitor FALSE DESIGNATION OF ORIGIN OR FALSE DESCRIPTION OR
REPRESENTATION
o Evidence of actual fraudulent intent not necessary
WHO IS LIABLE FOR FALSE DESIGNATION OF ORIGIN?
Any person which:
TRUE TEST OF UNFAIR COMPETITION
a. Is likely to cause confusion, or to cause mistake
Whether certain goods have been clothed with an appearance which is likely to
deceive the ordinary purchaser exercising ordinary care, and not whether a certain

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 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

USE OF DULY STAMPED OR MARKED CONTAINERS, REGULATED

RA 623 regulates the use of duly stamped or marked bottles, boxes, casks, kegs,
barrels and other similar containers.

THE LAW ON SMUGGLING OR ILLEGAL IMPORTATION

In order that a person may be deemed guilty of smuggling or illegal importation
under the foregoing statute, three requisites must concur:
1. That the merchandise must have been fraudulently or knowingly imported
contrary to law
2. That the defendant, if he is not the importer himself, must have received,
concealed, bought, sold or in any manner facilitated the transportation,
concealment or sale of the merchandise
3. That the defendant must be shown to have knowledge that the
merchandise had been illegally imported

Articles 190 to 193 were repealed by RA 6425 (DANGEROUS DRUGS ACT

OF 1972)

TITLE SIX: CRIMES AGAINST PUBLIC MORALS

Articles 195-199 (PRESIDENTIAL DECREE NO. 1602: PRESCRIBING

STIFFER PENALTIES IN ILLEGAL GAMBLING)

ARTICLE 195: What acts are punishable in gambling

ARTICLE 196: Importation, sale and possession of lottery tickets or

advertisements

ARTICLE 197: Betting in sports contents – Repealed (PRESIDENTIAL

DECREE NO. 483: PENALIZING BETTING, GAME-FIXING, ETC. IN
SPORTS ACTIVITIES)

ARTICLE 198: Illegal betting on horse races

ARTICLE 199: Illegal cockfighting ( PD 449: COCKFIGHTING LAW OF

1974)

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